Note 4 - Goodwill

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

(4) Goodwill

As of June 30, 2023 and December 31, 2022, goodwill totaled $194 million, of which $172 million was attributed to the commercial banking segment and $22 million is attributed to WM&T. Goodwill of $67 million was added through the CB acquisition, $8.5 million of which was subsequently written off as a result of Bancorp selling its interest in LFA effective December 31, 2022.

The composition of goodwill is presented by respective acquisition below:

	June 30,		December 31,
(in thousands)	2023		2022
Commonwealth Bancshares (2022)	$	58,244	$	58,244
Kentucky Bancshares (2021)		123,317		123,317
King Southern Bancorp (2019)		11,831		11,831
Austin State Bank (1996)		682		682
Total	$	194,074	$	194,074

Note: The acquisition of The Bank Oldham County in 2013 resulted in a bargain purchase gain.

GAAP requires that goodwill and intangible assets with indefinite useful lives not be amortized, but instead be tested for impairment at least annually. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. Bancorp’s annual goodwill impairment test is conducted as of September 30 of each year or more often as situations dictate.

At September 30, 2022, Bancorp elected to perform a qualitative assessment to determine if it was more-likely-than-not that the fair value of the reporting units exceeded their carrying value, including goodwill. The qualitative assessment indicated that it was not more-likely-than-not that the carrying value of the reporting units exceeded their fair value.

Changes in the carrying value of goodwill follows:

	Three months ended				Six months ended
	June 30,				June 30,
(in thousands)	2023		2022		2023		2022
Balance at beginning of period	$	194,074	$	202,524	$	194,074	$	135,830
Goodwill recorded from acquisitions		—		—		—		66,694
Provisional period adjustments		—		—		—		—
Disposition of LFA		—		—		—		—
Impairment		—		—		—		—
Balance at end of period	$	194,074	$	202,524	$	194,074	$	202,524