Note 9 – Goodwill and Core Deposit Intangible

In accordance with ASC 805, the Company has recorded goodwill and core deposit intangible (“CDI”) assets related to prior acquisitions. CDI assets are amortized over a 10-year period using the sum-of-the-years’-digits method. In accordance with GAAP, goodwill is evaluated for impairment annually, or more frequently if events or changes in circumstances indicate potential impairment. The Company performs its annual goodwill impairment assessment as of May 31. Management has determined that the Company’s community banking operations constitute a single reporting unit, which is also the Company’s only operating segment.

ASC Topic 350-20 guidance requires an annual review of the fair value of a Reporting Unit that has goodwill in order to determine if it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a Reporting Unit is less than its carrying amount, including goodwill. A qualitative factor test can be performed to determine whether it is necessary to perform a quantitative goodwill impairment test. If this qualitative test determines it is not more likely than not (less than 50% probability) that the fair value of the Reporting Unit is less than the Carrying Value, then the Company does not have to perform a quantitative test and goodwill can be considered not impaired. After performing the qualitative factor test, the result was the Company determined that a quantitative test would be performed at May 31, 2025, primarily due to the Company’s common stock trading at 80.0% of book value. This was a possible indication that a goodwill impairment may exist. The result of this quantitative test indicates that fair value is greater than book value and that no Reporting Unit goodwill impairment exists. Management noted no events or changes in circumstances subsequent to the May 31, 2025 annual impairment assessment that would indicate a potential impairment of goodwill.