GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2013

GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS

GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS

9. GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS

A progression of the balance for goodwill follows:

December 31, (in thousands)	2013		2012

Beginning of year	$	10,168	$	10,168
Acquired goodwill	—		—
Impairment	—		—

End of year	$	10,168	$	10,168

The Bank did not record goodwill associated with its 2012 FDIC-assisted acquisitions. The goodwill balance relates entirely to the Traditional Banking segment.

Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At September 30, 2013, the Company’s traditional bank reporting unit had positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the carrying value of the reporting unit did not exceed its fair value. Therefore, the Company did not complete the two-step impairment test as of September 30, 2013.

The Bank initially recorded $623,000 in core deposit intangibles (“CDI”) associated with its 2012 acquisitions. The CDI related to the FCB acquisition was initially recorded for $559,000 in September 2012 and amortized on an accelerated basis through December 31, 2013. FCB related CDI totaled $489,000 at December 31, 2012 and was fully amortized during 2013. Based on the nature of the TCB deposits acquired, the Bank amortized all $64,000 in CDI related to the TCB acquisition during 2012.

Detail of core deposit intangibles, which are included in other assets in the Company’s consolidated balance sheets, follows:

	2013				2012

Years ended December 31, (in thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization

Core deposit intangibles	$	1,160	$	1,160	$	1,160	$	650

Aggregate core deposit intangible amortization expense follows:

December 31, (in thousands)	2013		2012		2011

Aggregate core deposit intangible amortization expense	$	510	$	171	$	59

- 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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