Intangible Assets

6 Months Ended

Jun. 30, 2011

(5)

Intangible Assets

A summary of other intangible assets at June 30, 2011 and December 31, 2010, respectively is as follows:


	June 30, 2011							December 31, 2010
	Gross							Gross
	Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Amount		Amortization			Amount		Amount		Amortization			Amount

Amortizable intangible assets:
Core deposit intangible	$	4,795,224	$	(4,044,428	)	$	750,796	$	7,060,224	$	(6,082,715	)	$	977,509
Mortgage servicing rights		3,084,915		(813,000	)		2,271,915		3,067,368		(711,378	)		2,355,990

Total intangible assets	$	7,880,139	$	(4,857,428	)	$	3,022,711	$	10,127,592	$	(6,794,093	)	$	3,333,499

Changes in the net carrying amount of other intangible assets for the three months ended June 30, 2011 are as follows:


	Core Deposit			Mortgage
	Intangible			Servicing
	Asset			Rights

Balance at December 31, 2010	$	977,509		$	2,355,990
Additions		—			220,554
Amortization		(226,713	)		(304,629	)

Balance at June 30, 2011	$	750,796		$	2,271,915

Mortgage servicing rights (MSRs) are amortized over the shorter of 7 years or the life of the loan. They are periodically reviewed for impairment and if impairment is indicated, recorded at fair value. At June 30, 2011 and December 31, 2010, no temporary impairment was recognized. The fair value of MSRs is based on the present value of expected cash flows, as further discussed in Fair Value of Financial Instruments. Mortgage loans serviced for others totaled approximately $300,040,000 and $298,325,000 at June 30, 2011 and December 31, 2010, respectively. Included in other noninterest income were real estate servicing fees for the three months ended June 30, 2011 and 2010 of $211,000, and $204,000, respectively, and for the six months ended June 30, 2011 and 2010 of $390,000 and $396,000, respectively.

The aggregate amortization expense of intangible assets subject to amortization for the three and six months ended June 30, 2011 and 2010 is as follows:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
Aggregate amortization expense	2011		2010		2011		2010

Core deposit intangible asset	$	108,687	$	139,906	$	226,713	$	290,425
Mortgage servicing rights		155,390		152,102		304,629		286,976

Our Company’s amortization expense on intangible assets in any given period may be different from the estimated amounts depending upon the acquisition of intangible assets, changes in mortgage interest rates, prepayment rates and other market conditions. The following table shows the estimated future amortization expense based on existing asset balances and the interest rate environment as of June 30, 2011 for the next five years:


	Core Deposit		Mortgage
	Intangible		Servicing
	Asset		Rights

2011	$	208,050	$	230,000
2012		408,062		435,000
2013		134,684		354,000
2014		—		288,000
2015		—		235,000

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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