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Goodwill and Intangible Assets
6 Months Ended
Jun. 30, 2011
Goodwill and Intangible Assets  
Goodwill and Intangible Assets

(6)                     Goodwill and Intangible Assets

 

US GAAP requires that goodwill and intangible assets with indefinite useful lives not be amortized, but instead be tested for impairment at least annually.  Annual evaluations have resulted in no charges for impairment.  Bancorp currently has goodwill from the acquisition of a bank in southern Indiana in the amount of $682,000.  This goodwill is assigned to the commercial banking segment of Bancorp.

 

Mortgage servicing rights (MSRs) are amortized in proportion to and over the period of estimated net servicing income, considering appropriate prepayment assumptions. MSRs are evaluated quarterly for impairment by comparing the carrying value to the fair value. The estimated fair values of MSRs at June 30, 2011 and December 31 2010 were $2,327,000 and $2,188,000, respectively. The total outstanding principal balances of loans serviced for others were $272,585,000 and $254,988,000 at June 30, 2011, and December 31, 2010 respectively. Changes in the net carrying amount of MSRs for the six months ended June 30, 2011 and 2010 are shown in the following table.

 

(in thousands)

 

2011

 

2010

 

Balance at beginning of period

 

$

1,785

 

$

1,616

 

Originations

 

224

 

257

 

Amortization

 

(346

)

(236

)

Balance at June 30

 

$

1,663

 

$

1,637