NOTE 5 - INTANGIBLE ASSETS

The Company had net intangible assets of $84.8 million at December 31, 2014 and December 31, 2013. Intangible assets were as follows:

Net Core Deposit Intangibles:  As of December 31, 2013, the Company’s core deposit intangibles were fully amortized. Amortization expense was $200,000 and $19,000 for 2012 and 2013, respectively.

Goodwill:  As of December 31, 2014 and December 31, 2013, 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 December 31, 2014, the Company’s net book value, including goodwill, 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 was less than its estimated fair value, therefore, no impairment was recorded. The Company will continue to evaluate goodwill for impairment as defined by ASC Topic 350.

Other:  As of December 31, 2014 and December 31, 2013, the Company had a customer relationship intangible asset, net of accumulated amortization, of $0 and $32,000, respectively.  This intangible asset was recorded as a result of the acquisition of trust customer relationships.  The Company’s customer relationship intangible asset was fully amortized in February 2014. Annual amortization expense during 2014 was approximately $32,000. Annual amortization expense for 2013 and 2012 was approximately $191,000.