NOTE 4 - INTANGIBLE ASSETS

The Company had net intangible assets of $85.0 million and $85.1 million at March 31, 2013 and December 31, 2012, respectively. Intangible assets were as follows:

Net Core Deposit Intangibles: As of March 31, 2013, the Company’s core deposit intangibles were fully amortized. At December 31, 2012, the Company had net core deposit intangibles of $19,000. Amortization expense for the first three months of 2013 and 2012 was $19,000 and $0.1 million, respectively.

Goodwill: As of March 31, 2013 and December 31, 2012, the Company had goodwill, net of accumulated amortization, of $84.8 million. Goodwill is tested for impairment on an annual basis, or more often if impairment indicators exist. A goodwill impairment test consists of two steps. Step One compares the estimated fair value of the reporting unit to its carrying amount. If the carrying amount exceeds the estimated fair value, Step Two is performed by comparing the fair value of the reporting unit’s implied goodwill to the carrying value of goodwill. If the carrying value of the reporting unit’s goodwill exceeds the estimated fair value, an impairment charge is recorded equal to the excess.

As of March 31, 2013, the book value of the Company’s equity exceeded its market capitalization, and as such, the Company performed goodwill impairment testing. The Step One test indicated that the carrying amount (including goodwill) of the Company’s reporting unit exceeded its estimated fair value. The Step Two test indicated the estimated fair value of our reporting unit’s implied goodwill exceeded its carrying amount. Based on the results of the Step Two analysis, the Company concluded that goodwill was not impaired as of March 31, 2013. The Company will continue to evaluate goodwill for impairment as defined by ASC Topic 350.

Other: As of March 31, 2013 and December 31, 2012, the Company had a customer relationship intangible asset, net of accumulated amortization, of $0.1 million, respectively. This intangible asset was recorded as a result of the acquisition of trust customer relationships. Amortization expense for the first three months of 2013 and 2012 was approximately $49,000. Estimated annual amortization expense is approximately $0.2 million based on use of a 10-year useful life.