Note 18. Goodwill and Intangible Assets

The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, “Intangibles—Goodwill and Other.” The Company records the excess of cost acquired entities over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumes, as goodwill. The Company amortizes acquired intangible assets with definite useful economic lives over their useful economic lives. On a periodic basis, management assesses whether events or changes in circumstances indicate that the carrying amount of the intangible assets may be impaired. The Company does not amortize goodwill or any acquired intangible assets with an indefinite useful economic life, but reviews them for impairment on an annual basis, or when events or changes in circumstances indicate that the carrying amounts may be impaired. The Company has performed the required goodwill impairment test and has determined that goodwill was not impaired as of December 31, 2019.

Goodwill: The Company acquired goodwill in the purchases of Liberty Bell Bank and Virginia Partners Bank (see Note 20 and 21). The following table provides changes in goodwill for the periods ended December 31, 2019 and December 31, 2018:


	December 31,		December 31,
Dollars in Thousands	2019		2018
Balance at the beginning of the period	$	5,237	$	—
Liberty Bell Bank acquisition		—		5,237
Virginia Partners Bank acquisition		4,154		—
Impairment		—		—
Balance at the end of the period	$	9,391	$	5,237

Core Deposit Intangible: The Company acquired core deposit intangibles in the acquisitions of Liberty Bell Bank and Virginia Partners Bank. For the core deposit intangible related to Liberty, the Company utilizes the double declining balance method of amortization, in which the straight line amortization rate is doubled and applied to the remaining unamortized portion of the intangible asset. The amortization method changes to the straight line method of amortization when the straight line amortization amount exceeds the amount that would be calculated under the double declining balance method. This core deposit intangible will be amortized over seven years. For the core deposit intangible related to Partners, the Company utilizes the sum of months method and an estimated average life of 120 months. The following table provides changes in the core deposit intangible for the periods ended December 31, 2019 and December 31, 2018:


	December 31,		December 31,
Dollars in Thousands	2019		2018
Balance at the beginning of the period	$	1,069	$	—
Liberty Bell Bank acquisition		—		1,489
Virginia Partners Bank acquisition		2,650
Accumulated amortization		(346)		(420)
Balance at the end of the period	$	3,373	$	1,069

The following table provides the amortization expense for the core deposit intangible over the years indicated below:


	December 31,
Dollars in Thousands	2019
2020	$	713
2021		600
2022		520
2023		467
2024 and thereafter		1,073
	$	3,373

Net Deposits Purchased Premium and Discount: The Company paid a deposit premium in the acquisition of Liberty Bell Bank and received a deposit discount in the purchase of Virginia Partners Bank, which are included in the balances of time deposits on the balance sheets. The premium amount is amortized as a reduction in interest expense over the life of the acquired time deposits and the discount is accreted as an increase in interest expense over the life of the acquired time deposits. The premium and discount on deposits will both be amortized and accreted over approximately five years. The following table provides changes in the net deposit premium and discounts for the periods ended December 31, 2019 and December 31, 2018:


	December 31,		December 31,
Dollars in Thousands	2019		2018
Balance at the beginning of the period	$	27	$	—
Liberty Bell Bank acquisition		—		108
Virginia Partners Bank acquisition		(38)
Accumulated accretion		(20)		(81)
Balance at the end of the period	$	(31)	$	27

The following table provides the accretion income for the net deposit discount over the years indicated below:


	December 31,
Dollars in Thousands	2019
2020	$	(8)
2021		(15)
2022		(6)
2023		(2)
2024 and thereafter		—
	$	(31)