(

)

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. Bancorp currently has goodwill in the amount of

$682

thousand from the

1996

acquisition of an Indiana bank.

impairment charges have been deemed necessary or recorded to date, as the fair value is substantially in excess of the carrying value. This goodwill is assigned to the commercial banking segment of Bancorp.

Bancorp recorded a gross core deposit intangible totaling

$2.5

million as a result of its

2013

acquisition of THE BANCorp, Inc. This intangible is being amortized over the expected life of the underlying deposits to which the intangible is attributable. At

September 30, 2018,

the unamortized core deposit intangible was

$1.1

million.

Mortgage servicing rights (MSRs) are initially recognized at fair value when mortgage loans are sold with servicing retained. The 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 carrying value to fair value. Estimated fair values of MSRs at

September 30, 2018

and

December 31, 2017

were

$3.5

million and

$3.1

million, respectively. Total outstanding principal balances of loans serviced for others were

$331.8

million and

$344.5

million at

September 30, 2018,

and

December 31, 2017,

respectively.

Changes in the net carrying amount of MSRs for the

three

and

nine

months ended

September 30, 2018

and

2017

are shown in the following table:

	Three months ended						Nine months ended
	September 30,						September 30,
(In thousands)	2018			2017			2018			2017
Balance at beginning of period	$	898		$	869		$	875		$	921
Additions for mortgage loans sold		125			50			220			143
Amortization		(40	)		(77	)		(112	)		(222	)
Balance at end of period	$	983		$	842		$	983		$	842