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Note 5 - Core Deposit and Customer List Intangible Assets

9 Months Ended

Sep. 30, 2023

Intangible Assets Disclosure [Text Block]

(5)

Core Deposit and Customer List Intangible Assets

Bancorp recorded CDI assets of $13 million, $4 million, $2 million and $3 million in association with the acquisitions of CB in 2022, KB in 2021, KSB in 2019 and TBOC in 2013, respectively.

Changes in the net carrying amount of CDIs follows:

	Three months ended						Nine months ended
	September 30,						September 30,
(in thousands)	2023			2022			2023			2022
Balance at beginning of period	$	13,442		$	16,870		$	14,958		$	5,596
Core deposit intangible acquired		—			—			—			12,724
Amortization		(749	)		(956	)		(2,265	)		(2,406	)
Balance at end of period	$	12,693		$	15,914		$	12,693		$	15,914

As a result of the CB acquisition, Bancorp also recorded intangible assets totaling $14 million associated with the customer lists of the acquired WM&T and LFA businesses. Of this total, $12 million was recorded for WM&T and $2 million was recorded for LFA. Similar to CDI assets, these intangibles also amortize over their estimated useful lives.

As previously noted, Bancorp’s interest in LFA was sold effective December 31, 2022. As a result, the remaining CLI associated with LFA was written off at the date of sale and ultimately reflected as a component of the $870,000 pre-tax loss on the disposition of LFA that was recorded on Bancorp’s consolidated income statements for the fourth quarter and year ended December 31, 2022.

Changes in the net carrying amount of CLIs follows:

	Three months ended						Nine months ended
	September 30,						September 30,
(in thousands)	2023			2022			2023			2022
Balance at beginning of period	$	9,196		$	13,487		$	10,032		$	-
Customer list intangibles acquired		—			—			—			14,360
Disposition of LFA		—			—			—			—
Amortization		(418	)		(654	)		(1,254	)		(1,527	)
Balance at end of period	$	8,778		$	12,833		$	8,778		$	12,833

Future CDI and CLI amortization expense is estimated as follows:

(in thousands)	CDI		CLI
Remainder of 2023	$	750	$	418
2024		2,686		1,520
2025		2,375		1,368
2026		2,063		1,216
2027		1,752		1,064
2028		1,339		912
2029		888		760
2030		576		608
2031		264		456
2032		-		304
2033		-		152
Total future expense	$	12,693	$	8,778