Navy Federal Credit Union 2013 Annual Report Download - page 56

Download and view the complete annual report

Please find page 56 of the 2013 Navy Federal Credit Union annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 73

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73

Navy Federal Credit Union • 2013 Financial Section
36
2013 ANNUAL REPORT
The following table summarizes the carrying amount of goodwill that is classified as Goodwill and other
intangible assets, net, on the Consolidated Statements of Financial Condition:
(dollars in thousands)


December 31, 2011 $ 58,904
Adjustments during 2012 1
December 31, 2012 58,905
Adjustments during 2013 —
December 31, 2013 $ 58,905
Other Intangible Assets
Navy Federal’s acquisition of USAFCU at October 1, 2010 resulted in the recognition of a $2.0 million core
deposit intangible asset related to money market accounts. Core deposit balances represent a favorable
source of financing for financial institutions, and a “core deposit intangible” asset represents the fair value
of cost savings derived from available core deposits acquired relative to the cost of alternative funding.
The core deposit intangible is being amortized on a straight-line basis over its estimated remaining useful
life of four years. Amortization expense was $0.5 million during each of the years ended December 31,
2013 and 2012. The gross carrying amount, accumulated amortization, and net carrying amount of the
core deposit intangible were as follows at December 31:
(dollars in thousands)  
Gross carrying amount $ 2,040 $ 2,040
Accumulated amortization (1,657) (1,148)
Net carrying amount $ 383 $ 892
Amortization expense of the core deposit intangible for the year ended December 31, 2014 is estimated
to be $0.4 million.
NOTE 16:
Interest rates on members’ share accounts are set by the Board of Directors and are based on an
evaluation of current and future market conditions. Interest on members’ accounts is based on available
earnings for each interest period and is not guaranteed by Navy Federal. In claims against the assets of
Navy Federal, such as in the event of its liquidation, Navy Federal members’ accounts are subordinate to
other liabilities of Navy Federal.