FCBC » Topics » Goodwill and Other Intangible Assets

These excerpts taken from the FCBC 10-K filed Mar 13, 2009.
Goodwill and Other Intangible Assets
 
The excess of the cost of an acquired company over the fair value of the net assets and identified intangibles acquired is recorded as goodwill. The net carrying amount of goodwill was $83.19 million and $66.31 million at December 31, 2008 and 2007, respectively. A portion of the purchase price in certain transactions has been allocated to values associated with the future earnings potential of acquired deposits and is being amortized over the estimated lives of the deposits, ranging from four to ten years while the weighted average remaining life of these core deposits is approximately 8.0 years. As of December 31, 2008 and 2007, the balance of core deposit intangibles was $6.41 million and $4.59 million, respectively, while the corresponding accumulated amortization was $3.79 million and $3.41 million, respectively. The net unamortized balance of identified intangibles associated with acquired deposits was $3.02 million and $1.18 million at December 31, 2008 and 2007, respectively. The acquisition of Greenpoint, and its continued acquisitions, added $1.35 million of goodwill and $1.14 million in other identified intangible assets for the period ended December 31, 2008. The acquisition of Investment Planning Consultants, Inc. added a total of $240 thousand of goodwill for the period ended December 31, 2008. Annual amortization expense of all intangibles for 2009 and the succeeding four years are approximately $962 thousand, $869 thousand, $864 thousand, $672 thousand, and $598 thousand, respectively.
 
The Company reviews and tests goodwill for potential impairment on an annual basis in November. Goodwill is tested for impairment by comparing the fair value of the unit with its book value, including goodwill. If the fair value of the Company is greater than its book value, no goodwill impairment exists. However, if the book value of the Company is greater than its determined fair value, goodwill impairment may exist and further testing is required to determine the amount, if any, of the actual impairment loss.


54


Table of Contents

 
FIRST COMMUNITY BANCSHARES, INC.
 
NOTES TO CONSOLIDATED STATEMENTS — (Continued)
 
The progression of the Company’s goodwill and intangible assets for continuing operations for the three years ended December 31, 2008, is detailed in the following table:
 
                 
          Other
 
    Goodwill     Intangibles  
    (Amounts in thousands)  
 
Balance at December 31, 2005
  $ 59,182     $ 1,937  
Acquisitions and dispositions, net
    953       472  
Amortization
          (348 )
                 
Balance at December 31, 2006
    60,135       2,061  
Acquisitions
    6,175       2,152  
Amortization
          (467 )
                 
Balance at December 31, 2007
    66,310       3,746  
Acquisitions
    15,990       3,362  
Other Adjustments
    892        
Amortization
          (689 )
                 
Balance at December 31, 2008
  $ 83,192     $ 6,419  
                 
 
Goodwill and Other Intangible Assets
 
The excess of the cost of an acquired company over the fair value of the net assets and identified intangibles acquired is recorded as goodwill. The net carrying amount of goodwill was $83.19 million and $66.31 million at December 31, 2008 and 2007, respectively. A portion of the purchase price in certain transactions has been allocated to values associated with the future earnings potential of acquired deposits and is being amortized over the estimated lives of the deposits, ranging from four to ten years while the weighted average remaining life of these core deposits is approximately 8.0 years. As of December 31, 2008 and 2007, the balance of core deposit intangibles was $6.41 million and $4.59 million, respectively, while the corresponding accumulated amortization was $3.79 million and $3.41 million, respectively. The net unamortized balance of identified intangibles associated with acquired deposits was $3.02 million and $1.18 million at December 31, 2008 and 2007, respectively. The acquisition of Greenpoint, and its continued acquisitions, added $1.35 million of goodwill and $1.14 million in other identified intangible assets for the period ended December 31, 2008. The acquisition of Investment Planning Consultants, Inc. added a total of $240 thousand of goodwill for the period ended December 31, 2008. Annual amortization expense of all intangibles for 2009 and the succeeding four years are approximately $962 thousand, $869 thousand, $864 thousand, $672 thousand, and $598 thousand, respectively.
 
The Company reviews and tests goodwill for potential impairment on an annual basis in November. Goodwill is tested for impairment by comparing the fair value of the unit with its book value, including goodwill. If the fair value of the Company is greater than its book value, no goodwill impairment exists. However, if the book value of the Company is greater than its determined fair value, goodwill impairment may exist and further testing is required to determine the amount, if any, of the actual impairment loss.


54


Table of Contents

 
FIRST COMMUNITY BANCSHARES, INC.
 
NOTES TO CONSOLIDATED STATEMENTS — (Continued)
 
The progression of the Company’s goodwill and intangible assets for continuing operations for the three years ended December 31, 2008, is detailed in the following table:
 
                 
          Other
 
    Goodwill     Intangibles  
    (Amounts in thousands)  
 
Balance at December 31, 2005
  $ 59,182     $ 1,937  
Acquisitions and dispositions, net
    953       472  
Amortization
          (348 )
                 
Balance at December 31, 2006
    60,135       2,061  
Acquisitions
    6,175       2,152  
Amortization
          (467 )
                 
Balance at December 31, 2007
    66,310       3,746  
Acquisitions
    15,990       3,362  
Other Adjustments
    892        
Amortization
          (689 )
                 
Balance at December 31, 2008
  $ 83,192     $ 6,419  
                 
 
Goodwill
and Other Intangible Assets



 



The excess of the cost of an acquired company over the fair
value of the net assets and identified intangibles acquired is
recorded as goodwill. The net carrying amount of goodwill was
$83.19 million and $66.31 million at December 31,
2008 and 2007, respectively. A portion of the purchase price in
certain transactions has been allocated to values associated
with the future earnings potential of acquired deposits and is
being amortized over the estimated lives of the deposits,
ranging from four to ten years while the weighted average
remaining life of these core deposits is approximately
8.0 years. As of December 31, 2008 and 2007, the
balance of core deposit intangibles was $6.41 million and
$4.59 million, respectively, while the corresponding
accumulated amortization was $3.79 million and
$3.41 million, respectively. The net unamortized balance of
identified intangibles associated with acquired deposits was
$3.02 million and $1.18 million at December 31,
2008 and 2007, respectively. The acquisition of Greenpoint, and
its continued acquisitions, added $1.35 million of goodwill
and $1.14 million in other identified intangible assets for
the period ended December 31, 2008. The acquisition of
Investment Planning Consultants, Inc. added a total of $240
thousand of goodwill for the period ended December 31,
2008. Annual amortization expense of all intangibles for 2009
and the succeeding four years are approximately $962 thousand,
$869 thousand, $864 thousand, $672 thousand, and $598 thousand,
respectively.


 



The Company reviews and tests goodwill for potential impairment
on an annual basis in November. Goodwill is tested for
impairment by comparing the fair value of the unit with its book
value, including goodwill. If the fair value of the Company is
greater than its book value, no goodwill impairment exists.
However, if the book value of the Company is greater than its
determined fair value, goodwill impairment may exist and further
testing is required to determine the amount, if any, of the
actual impairment loss.





54





Table of Contents





 




FIRST
COMMUNITY BANCSHARES, INC.




 




NOTES TO
CONSOLIDATED STATEMENTS — (Continued)


 



The progression of the Company’s goodwill and intangible
assets for continuing operations for the three years ended
December 31, 2008, is detailed in the following table:


 
















































































































































































































                 

 

 

 

 

 

Other



 

 

 

Goodwill

 

 

Intangibles

 

 

 

(Amounts in thousands)

 
 


Balance at December 31, 2005


 

$

59,182

 

 

$

1,937

 


Acquisitions and dispositions, net


 

 

953

 

 

 

472

 


Amortization


 

 



 

 

 

(348

)

 

 

 

 

 

 

 

 

 


Balance at December 31, 2006


 

 

60,135

 

 

 

2,061

 


Acquisitions


 

 

6,175

 

 

 

2,152

 


Amortization


 

 



 

 

 

(467

)

 

 

 

 

 

 

 

 

 


Balance at December 31, 2007


 

 

66,310

 

 

 

3,746

 


Acquisitions


 

 

15,990

 

 

 

3,362

 


Other Adjustments


 

 

892

 

 

 



 


Amortization


 

 



 

 

 

(689

)

 

 

 

 

 

 

 

 

 


Balance at December 31, 2008


 

$

83,192

 

 

$

6,419

 

 

 

 

 

 

 

 

 

 






 




Goodwill
and Other Intangible Assets



 



The excess of the cost of an acquired company over the fair
value of the net assets and identified intangibles acquired is
recorded as goodwill. The net carrying amount of goodwill was
$83.19 million and $66.31 million at December 31,
2008 and 2007, respectively. A portion of the purchase price in
certain transactions has been allocated to values associated
with the future earnings potential of acquired deposits and is
being amortized over the estimated lives of the deposits,
ranging from four to ten years while the weighted average
remaining life of these core deposits is approximately
8.0 years. As of December 31, 2008 and 2007, the
balance of core deposit intangibles was $6.41 million and
$4.59 million, respectively, while the corresponding
accumulated amortization was $3.79 million and
$3.41 million, respectively. The net unamortized balance of
identified intangibles associated with acquired deposits was
$3.02 million and $1.18 million at December 31,
2008 and 2007, respectively. The acquisition of Greenpoint, and
its continued acquisitions, added $1.35 million of goodwill
and $1.14 million in other identified intangible assets for
the period ended December 31, 2008. The acquisition of
Investment Planning Consultants, Inc. added a total of $240
thousand of goodwill for the period ended December 31,
2008. Annual amortization expense of all intangibles for 2009
and the succeeding four years are approximately $962 thousand,
$869 thousand, $864 thousand, $672 thousand, and $598 thousand,
respectively.


 



The Company reviews and tests goodwill for potential impairment
on an annual basis in November. Goodwill is tested for
impairment by comparing the fair value of the unit with its book
value, including goodwill. If the fair value of the Company is
greater than its book value, no goodwill impairment exists.
However, if the book value of the Company is greater than its
determined fair value, goodwill impairment may exist and further
testing is required to determine the amount, if any, of the
actual impairment loss.





54





Table of Contents





 




FIRST
COMMUNITY BANCSHARES, INC.




 




NOTES TO
CONSOLIDATED STATEMENTS — (Continued)


 



The progression of the Company’s goodwill and intangible
assets for continuing operations for the three years ended
December 31, 2008, is detailed in the following table:


 
















































































































































































































                 

 

 

 

 

 

Other



 

 

 

Goodwill

 

 

Intangibles

 

 

 

(Amounts in thousands)

 
 


Balance at December 31, 2005


 

$

59,182

 

 

$

1,937

 


Acquisitions and dispositions, net


 

 

953

 

 

 

472

 


Amortization


 

 



 

 

 

(348

)

 

 

 

 

 

 

 

 

 


Balance at December 31, 2006


 

 

60,135

 

 

 

2,061

 


Acquisitions


 

 

6,175

 

 

 

2,152

 


Amortization


 

 



 

 

 

(467

)

 

 

 

 

 

 

 

 

 


Balance at December 31, 2007


 

 

66,310

 

 

 

3,746

 


Acquisitions


 

 

15,990

 

 

 

3,362

 


Other Adjustments


 

 

892

 

 

 



 


Amortization


 

 



 

 

 

(689

)

 

 

 

 

 

 

 

 

 


Balance at December 31, 2008


 

$

83,192

 

 

$

6,419

 

 

 

 

 

 

 

 

 

 






 




These excerpts taken from the FCBC 10-K filed Mar 13, 2008.
Goodwill and Other Intangible Assets
 
The excess of the cost of an acquired company over the fair value of the net assets and identified intangibles acquired is recorded as goodwill. The net carrying amount of goodwill was $66.31 million and $60.14 million at December 31, 2007 and 2006, respectively. A portion of the purchase price in certain transactions has been allocated to values associated with the future earnings potential of acquired deposits and is being amortized over the estimated lives of the deposits, ranging from seven to ten years while the weighted average remaining life of these core deposits is approximately 4.0 years. As of December 31, 2007 and 2006, the balance of core deposit intangibles was $4.59 million and $4.42 million, respectively, while the corresponding accumulated amortization was $3.41 million and $2.89 million, respectively. The net unamortized balance of identified intangibles associated with acquired deposits was $1.18 million and $1.53 million at December 31, 2007 and 2006, respectively. The acquisition of Greenpoint added $5.69 million of goodwill and $2.15 million in other identified intangible assets. The acquisition of Investment Planning Consultants, Inc. has added a total of $1.44 million of goodwill and $534 thousand in other intangible assets. Annual amortization expense of all intangibles for 2008 and the following four years is approximately $615 thousand, $577 thousand, $484 thousand, $479 thousand, and $290 thousand, respectively.
 
The Company reviews and tests goodwill for potential impairment on an annual basis. Goodwill is tested for impairment by comparing the fair value of the unit with its book value, including goodwill. If the fair value of the Company is greater than its book value, no goodwill impairment exists. However, if the book value of the Company is greater than its determined fair value, goodwill impairment may exist and further testing is required to determine the amount, if any, of the actual impairment loss.


47


 

 
FIRST COMMUNITY BANCSHARES, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The progression of the Company’s goodwill and intangible assets for continuing operations for the three years ended December 31, 2007, is detailed in the following table:
 
                 
          Other
 
    Goodwill     Intangibles  
    (Amounts in thousands)  
 
Balance at December 31, 2004
  $ 58,828     $ 2,482  
Dispositions
          (109 )
Tax Benefits, Exercise of Stock Options and Other Adjustments
    354        
Amortization
          (436 )
                 
Balance at December 31, 2005
    59,182       1,937  
Acquisitions and dispositions, net
    953       472  
Tax Benefits, Exercise of Stock Options and Other Adjustments
           
Amortization
          (348 )
                 
Balance at December 31, 2006
    60,135       2,061  
Acquisitions
    6,175       2,152  
Tax Benefits, Exercise of Stock Options and Other Adjustments
           
Amortization
          (467 )
                 
Balance at December 31, 2007
  $ 66,310     $ 3,746  
                 
 
Goodwill
and Other Intangible Assets



 



The excess of the cost of an acquired company over the fair
value of the net assets and identified intangibles acquired is
recorded as goodwill. The net carrying amount of goodwill was
$66.31 million and $60.14 million at December 31,
2007 and 2006, respectively. A portion of the purchase price in
certain transactions has been allocated to values associated
with the future earnings potential of acquired deposits and is
being amortized over the estimated lives of the deposits,
ranging from seven to ten years while the weighted average
remaining life of these core deposits is approximately
4.0 years. As of December 31, 2007 and 2006, the
balance of core deposit intangibles was $4.59 million and
$4.42 million, respectively, while the corresponding
accumulated amortization was $3.41 million and
$2.89 million, respectively. The net unamortized balance of
identified intangibles associated with acquired deposits was
$1.18 million and $1.53 million at December 31,
2007 and 2006, respectively. The acquisition of Greenpoint added
$5.69 million of goodwill and $2.15 million in other
identified intangible assets. The acquisition of Investment
Planning Consultants, Inc. has added a total of
$1.44 million of goodwill and $534 thousand in other
intangible assets. Annual amortization expense of all
intangibles for 2008 and the following four years is
approximately $615 thousand, $577 thousand, $484 thousand, $479
thousand, and $290 thousand, respectively.


 



The Company reviews and tests goodwill for potential impairment
on an annual basis. Goodwill is tested for impairment by
comparing the fair value of the unit with its book value,
including goodwill. If the fair value of the Company is greater
than its book value, no goodwill impairment exists. However, if
the book value of the Company is greater than its determined
fair value, goodwill impairment may exist and further testing is
required to determine the amount, if any, of the actual
impairment loss.





47





 





 




FIRST
COMMUNITY BANCSHARES, INC.



 




NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)


 



The progression of the Company’s goodwill and intangible
assets for continuing operations for the three years ended
December 31, 2007, is detailed in the following table:


 






































































































































































































































                 

 

 

 

 

 

Other



 

 

 

Goodwill

 

 

Intangibles

 

 

 

(Amounts in thousands)

 
 


Balance at December 31, 2004


 

$

58,828

 

 

$

2,482

 


Dispositions


 

 



 

 

 

(109

)


Tax Benefits, Exercise of Stock Options and Other Adjustments


 

 

354

 

 

 



 


Amortization


 

 



 

 

 

(436

)

 

 

 

 

 

 

 

 

 


Balance at December 31, 2005


 

 

59,182

 

 

 

1,937

 


Acquisitions and dispositions, net


 

 

953

 

 

 

472

 


Tax Benefits, Exercise of Stock Options and Other Adjustments


 

 



 

 

 



 


Amortization


 

 



 

 

 

(348

)

 

 

 

 

 

 

 

 

 


Balance at December 31, 2006


 

 

60,135

 

 

 

2,061

 


Acquisitions


 

 

6,175

 

 

 

2,152

 


Tax Benefits, Exercise of Stock Options and Other Adjustments


 

 



 

 

 



 


Amortization


 

 



 

 

 

(467

)

 

 

 

 

 

 

 

 

 


Balance at December 31, 2007


 

$

66,310

 

 

$

3,746

 

 

 

 

 

 

 

 

 

 






 




This excerpt taken from the FCBC 10-K filed Mar 12, 2007.
Goodwill and Other Intangible Assets
 
The excess of the cost of an acquired company over the fair value of the net assets and identified intangibles acquired is recorded as goodwill. The net carrying amount of goodwill from continuing operations was $60.1 million and $59.2 million at December 31, 2006 and 2005, respectively. A portion of the purchase price in certain transactions has been allocated to values associated with the future earnings potential of acquired deposits and is being amortized over the estimated lives of the deposits, ranging from seven to ten years while the weighted average remaining life of these core deposits is approximately 4.8 years. As of December 31, 2006 and 2005, the balance of core deposit intangibles was $4.4 million and $4.5 million, respectively, while the corresponding accumulated amortization was $2.9 million and $2.5 million, respectively. The net unamortized balance of identified intangibles associated with acquired deposits was $1.5 million and $1.9 million at December 31, 2006 and 2005, respectively. The acquisition of Investment Planning Consultants, Inc. added $1.0 million of goodwill and $534 thousand in other intangible assets. Annual amortization expense of all intangibles is approximately $420 thousand for the next two years, then $380 thousand, $289 thousand, and $284 thousand for the following two years, respectively.
 
The Company reviews and tests goodwill for potential impairment on an annual basis. Goodwill is tested for impairment by comparing the fair value of the unit with its book value, including goodwill. If the fair value of the Company is greater than its book value, no goodwill impairment exists. However, if the book value of the Company is greater than its determined fair value, goodwill impairment may exist and further testing is required to determine the amount, if any, of the actual impairment loss. Through the results of impairment tests, and the sale of the discontinued operating subsidiary, a goodwill impairment charge of $1.4 million was appropriate for the discontinued mortgage banking segment in 2004, and is included in “loss from discontinued operations” in the consolidated statements of income.


47


Table of Contents

 
FIRST COMMUNITY BANCSHARES, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The progression of the Company’s goodwill and intangible assets for continuing operations for the three years ended December 31, 2006, is detailed in the following table:
 
                 
          Other
 
    Goodwill     Intangibles  
    (Amounts in thousands)  
 
Balance at December 31, 2003
  $ 37,978     $ 1,363  
Acquisitions
    21,231       1,518  
Tax Benefits, Exercise of Stock Options and Other Adjustments
    (381 )      
Amortization
          (399 )
                 
Balance at December 31, 2004
    58,828       2,482  
Acquisitions (Dispositions)
          (109 )
Tax Benefits, Exercise of Stock Options and Other Adjustments
    354        
Amortization
          (436 )
                 
Balance at December 31, 2005
    59,182       1,937  
Acquisitions and dispositions, net
    953       472  
Tax Benefits, Exercise of Stock Options and Other Adjustments
           
Amortization
          (348 )
                 
Balance at December 31, 2006
  $ 60,135     $ 2,061  
                 
 
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