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Note 6 - Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 6:

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is tested annually, or more than annually, if circumstances warrant, for impairment. If the implied fair value of goodwill is lower than its carrying amount, goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements. Goodwill totaled $108.2 million at September 30, 2014 and $78.5 million at December 31, 2013. The Company recorded $29.1 million of goodwill during the third quarter as a result of its Delta Trust acquisition.

Core deposit premiums are amortized over a ten year period and are periodically evaluated, at least annually, as to the recoverability of their carrying value. Core deposit premiums of $4.3 million were recorded in the third quarter as part of the Delta Trust acquisition. These core deposits premiums will be amortized over a ten year period.

The Delta Trust acquisition included some significant lines of business related to investments, trust and insurance. The Company recorded $5.0 million of intangible assets related to those acquired lines of business during the third quarter. These intangible assets will be amortized over various periods ranging from 10 to 15 years.

On September 30, 2013, the Company acquired a credit card portfolio and recorded Purchased Credit Card Relationships (“PCCR’s”) of $2.1 million. This intangible asset is being amortized over a five year period.

The Company’s goodwill and other intangibles (carrying basis and accumulated amortization) at September 30, 2014 and December 31, 2013, were as follows:

(In thousands)	September 30, 2014			December 31, 2013

Goodwill	$	108,158		$	78,529
Core deposit premiums:
Gross carrying amount		18,318			15,245
Accumulated amortization		(2,039	)		(2,237	)
Core deposit premiums, net		16,279			13,008
Purchased credit card relationships:
Gross carrying amount		2,068			2,068
Accumulated amortization		(414	)		(104	)
Purchased credit card relationships, net		1,654			1,964
Books of business intangible:
Gross carrying amount		5,041			-
Accumulated amortization		-			-
Books of business intangible, net		5,041			-
Other misc. intangibles, net		14			-
Other intangible assets, net		22,988			14,972
Total goodwill and other intangible assets	$	131,146		$	93,501

Core deposit premium amortization expense recorded for the three and nine months ended September 30, 2014 was $344,000 and $1,043,000, respectively. Core deposit premium amortization expense recorded for the three and nine months ended September 30, 2013 was $135,000 and $408,000, respectively. The Company’s estimated remaining amortization expense on core deposit premiums as of September 30, 2014, is as follows:

(In thousands)	Year	Amortization Expense
	Remaining in 2014	$	495
	2015		1,819
	2016		1,817
	2017		1,817
	2018		1,817
	Thereafter		8,514
	Total	$	16,279

PCCR amortization expense recorded for the three and nine months ended September 30, 2014 was $103,000 and $310,000, respectively. There was no PCCR amortization expense recorded for the three and nine months ended September 30, 2013. The Company’s estimated remaining amortization expense on PCCR’s as of September 30, 2014, is as follows:

(In thousands)	Year	Amortization Expense
	Remaining in 2014	$	103
	2015		414
	2016		414
	2017		413
	2018		310
	Total	$	1,654

Because the Delta Trust acquisition closed late in the third quarter, the Company will begin recording amortization expense on its acquired books of business beginning October 2014. Therefore, there was no book of business amortization expense recorded for the three and nine months ended September 30, 2014. There was no book of business amortization expense recorded for the three and nine months ended September 30, 2013. The Company’s estimated remaining amortization expense on the books of business as of September 30, 2014, is as follows:

(In thousands)	Year	Amortization Expense
	Remaining in 2014	$	126
	2015		504
	2016		504
	2017		504
	2018		504
	Thereafter		2,899
	Total	$	5,041

- 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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