Note 6 - Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

6. Goodwill and Intangible Assets

The following table summarizes the Corporation’s acquired goodwill and intangible assets as of December 31:

(Dollar amounts in thousands)	December 31, 2021				December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Goodwill	$	19,460	$	—	$	19,460	$	—
Core deposit intangibles		5,634		4,735		5,634		4,551
Total	$	25,094	$	4,735	$	25,094	$	4,551

The goodwill on the Corporation's financial statements resulted from five prior acquisitions.  Goodwill represents the excess of the total purchase price paid for the acquisitions over the fair value of the identifiable assets acquired, net of the fair value of the liabilities assumed.  Goodwill is not amortized, but is subject to impairment tests on an annual basis and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  As part of the Corporation's qualitative assessment of goodwill impairment, management has continued the periodic monitoring of goodwill for possible impairment which began with the onset of the COVID-19 pandemic, concluding no impairment.  Because of the continued economic uncertainty surrounding the pandemic, the Corporation engaged an independent third party to perform the annual, November 30, impairment testing, including the Step 0 and Step 1, qualitative and quantitative analyses to determine the fair value of the Corporation.  Based on the analysis performed, the fair value of the Corporation's equity was $111.0 million, which exceeded the recorded book value of $92.3 million as of November 30, 2021. Management concluded that the Corporation's goodwill was not impaired as of November 30, 2021.  Although no goodwill impairment was noted, there can be no assurances that future goodwill impairment will not occur.  No goodwill impairment charges were recorded in 2021 or 2020.

The core deposit intangible asset, resulting from three acquisitions, is amortized over a weighted average estimated life of the related deposits and is not estimated to have a significant residual value. The Corporation recorded intangible amortization expense totaling $185,000 and $164,000 in 2021 and 2020, respectively.

The estimated amortization expense of the core deposit intangible for the years ending December 31 is as follows:

(Dollar amounts in thousands)	Amortization
	Expense
2022	$	152
2023		136
2024		136
2025		136
2026		127
Thereafter		212
Total	$	899