Quarterly report pursuant to Section 13 or 15(d)

INTANGIBLE ASSETS

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INTANGIBLE ASSETS
6 Months Ended
Jun. 30, 2013
Intangible Assets [Abstract]  
INTANGIBLE ASSETS

NOTE 4 - INTANGIBLE ASSETS

 

The Company had net intangible assets of $84.9 million and $85.1 million at June 30, 2013 and December 31, 2012, respectively.  Intangible assets were as follows:

 

    June 30, 2013   December 31, 2012
(Dollars in Thousands)   Gross
Amount
  Accumulated
Amortization
  Gross
Amount
  Accumulated
Amortization
Core Deposit Intangibles   $ 47,176     $ 47,176     $ 47,176     $ 47,157  
Goodwill     84,811       —         84,811       —    
Customer Relationship Intangible     1,867       1,741       1,867       1,644  
Total Intangible Assets   $ 133,854     $ 48,917     $ 133,854     $ 48,801  

 

Net Core Deposit Intangibles:  As of June 30, 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 six months of 2013 and 2012 was $19,000 and $119,000, respectively.

 

Goodwill:  As of June 30, 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 June 30, 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 June 30, 2013. The Company will continue to evaluate goodwill for impairment as defined by ASC Topic 350.

 

Other:  As of June 30, 2013 and December 31, 2012, the Company had a customer relationship intangible asset, net of accumulated amortization, of $126,000 and $223,000, respectively.  This intangible asset was recorded as a result of the acquisition of trust customer relationships.  Amortization expense for the first six months of 2013 and 2012 was approximately $97,000.  The Company’s customer relationship intangible asset will be fully amortized in February 2014.