XML 22 R10.htm IDEA: XBRL DOCUMENT v3.25.3
ACQUISITIONS
 9 Months Ended
Sep. 30, 2025
ACQUISITIONS  
ACQUISITIONS

NOTE B: ACQUISITIONS

​

Pending Acquisition

​

On June 25, 2025, the Company, through its subsidiary Community Bank, N.A. (“CBNA”), entered into an agreement with Santander Bank, N.A. (“Santander”) to acquire seven branch locations in the Allentown, Pennsylvania area, including certain branch-related loans and deposits. In addition, CBNA’s wholly-owned subsidiary, Nottingham Investment Services, Inc., has agreed to purchase related wealth management relationships from Santander’s affiliate, Santander Securities LLC. Based on the most current available information, the Company is expected to acquire approximately $32.0 million of loans and assume approximately $570.0 million of deposits, excluding purchase accounting adjustments. Total cash consideration will include a deposit premium of 8.0%, or approximately $45.6 million. The acquisition is expected to be completed on November 7, 2025. The Company expects to incur certain one-time, transaction-related costs in connection with the pending acquisition.

​

Current and Prior Period Acquisitions

​

On September 5, 2025, the Company acquired an ownership interest in Leap Holdings, Inc., a Delaware corporation (“Leap”) for $37.4 million comprised of various classes of preferred and common stock. Leap’s wholly owned subsidiary, Leap Insurance Agency, LLC, is a tech-first managing general agent (“MGA”) providing insurance solutions for the rental housing sector. The Company determined it has the ability to exercise significant influence over the operating and financial policies of Leap and therefore accounts for its ownership interest as an equity method investment. On the acquisition date, the Company estimated its investment included embedded goodwill of $27.1 million and a customer relationship intangible asset of $7.7 million. The income from equity method investments during the three and nine months ended September 30, 2025 was immaterial.

​

During the third quarter of 2025, the Company, through its subsidiary OneGroup NY, Inc. (“OneGroup”), completed the acquisition of certain assets of two financial services companies based in Florida and Kentucky. Total aggregate consideration was $4.2 million in cash and contingent consideration with an estimated fair value of $0.6 million at the acquisition date. The contingent consideration arrangement requires additional consideration to be paid by the Company based on a percentage of net revenue over a three year period following the acquisition date, up to a maximum of $2.0 million. The fair value of the contingent consideration at the acquisition date was determined by forecasting estimated amounts of net revenue for each applicable period and applying the appropriate factor to those amounts based on the purchase agreement. The effects of the acquired assets are included in the consolidated financial statements from that date. Net assets acquired were $3.9 million of customer list intangible assets and the Company recorded $0.9 million of goodwill in conjunction with the acquisitions. Revenues and direct expenses for the three and nine months ended September 30, 2025 were immaterial.

​

​

During the first nine months of 2025, the Company, through its subsidiary Benefit Plans Administrative Services, LLC (“BPA”), completed acquisitions of certain assets of three financial services companies based in New York and Kansas for aggregate consideration of $0.3 million in cash and contingent consideration with a fair value at acquisition of $3.5 million. The contingent consideration arrangements require additional consideration to be paid by the Company based on a percentage of retained revenue over periods ranging from two to four years following the acquisition date. The fair value of the contingent consideration at the acquisition date was determined by forecasting estimated amounts of retained revenue for each applicable period and applying the appropriate factor to those amounts based on the purchase agreements. The effects of the acquired assets are included in the consolidated financial statements from that date. Net assets acquired included $2.2 million of customer list intangible assets and the Company recorded $1.8 million of goodwill in conjunction with the acquisitions. Revenues and direct expenses for the three and nine months ended September 30, 2025 were immaterial.

​

During 2024, the Company, through its subsidiary OneGroup, completed acquisitions of certain insurance agencies headquartered in New York and Florida for aggregate consideration of $9.6 million in cash plus contingent consideration with an estimated fair value of $0.7 million at the respective acquisition dates. The contingent consideration arrangements require additional consideration to be paid by the Company based on a percentage of retained revenue two years after the date of acquisition, up to a maximum amount of $1.4 million. The fair value of the contingent consideration of $0.7 million at the acquisition date was estimated based on projected retained revenue levels. The effects of the acquired assets and liabilities are included in the consolidated financial statements from the date of acquisition. Net assets acquired were $6.5 million, including $6.8 million of customer list intangible assets, and the Company recorded $3.8 million of goodwill in conjunction with the acquisitions. Revenues and direct expenses for the three and nine months ended September 30, 2025 and 2024 were immaterial.

​

On February 1, 2024, the Company, through its subsidiary BPA, completed the acquisition of certain assets of Creative Plan Designs Limited (“CPD”), a financial services company that provides employee benefit plan design, administration and consulting services. Total consideration was $5.9 million in cash plus contingent consideration with an estimated fair value of $3.0 million at acquisition date. The effects of the acquired assets are included in the consolidated financial statements from that date. Net assets acquired were $4.5 million, including $5.5 million of customer list intangible assets, and the Company recorded $4.4 million of goodwill in conjunction with the acquisition. Revenues and direct expenses for the three and nine months ended September 30, 2025 and 2024 were immaterial.

​

The acquisition of CPD includes contingent consideration arrangements that require additional consideration to be paid by the Company based on the future revenue levels of CPD over approximately three years and a contract holdback payment. The contract holdback will be paid upon satisfaction of certain customer retention requirements and will be prorated based on actual results. The contract holdback amount was estimated at the maximum level of $1.5 million at the acquisition date. The revenue-based contingent consideration is payable in four installments, based on future revenue levels of CPD in 2024, 2025, 2026 and the first quarter of 2027. The range of undiscounted amounts the Company could pay under the contingent consideration agreement is between zero and $2.0 million for the first three payments in total and a variable amount for the fourth payment, which is between zero and a percentage of annualized revenue above a threshold for a particular revenue stream in the first quarter of 2027. The fair value of the contingent consideration recognized on the acquisition date of $3.0 million was estimated by applying the income approach, a measure that is based on significant Level 3 inputs not readily observable in the market. Key assumptions at the date of acquisition include (1) a discount rate range of 15.1% to 19.1% to present value the payments and (2) probability of achievement of future revenue levels of 82%.

​

The Santander transaction accelerates CBNA’s de novo expansion in the strategic Greater Lehigh Valley and complements its existing commercial and consumer lending presence in the market. The Leap transaction adds diversification to the Company’s existing insurance services business through new exposure to a growing tech-first MGA in an expanding market focused on the rental housing sector. The OneGroup and BPA transactions generally expand the Company’s insurance services and employee benefit services presence.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed in acquisitions considered to be business combinations:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2025

​

2024

(000s omitted)

    

Other(1)

    

CPD

    

Other(2)

    

Total

Consideration:

​

​

​

​

​

​

​

​

​

​

​

​

Cash

​

$

4,472

​

$

5,861

​

$

9,599

​

$

15,460

Contingent consideration

​

​

4,099

​

​

3,066

​

​

750

​

​

3,816

Total net consideration

​

​

8,571

​

​

8,927

​

​

10,349

​

​

19,276

​

​

​

​

​

​

​

​

​

​

​

​

​

Recognized amounts of identifiable assets acquired and liabilities assumed:

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

​

0

​

​

0

​

​

33

​

​

33

Premises and equipment, net

​

​

98

​

​

6

​

​

156

​

​

162

Other assets

​

​

0

​

​

26

​

​

384

​

​

410

Other intangibles

​

​

6,040

​

​

5,500

​

​

6,849

​

​

12,349

Other liabilities

​

​

(209)

​

​

(990)

​

​

(916)

​

​

(1,906)

Total identifiable assets, net

​

​

5,929

​

​

4,542

​

​

6,506

​

​

11,048

Goodwill

​

$

2,642

​

$

4,385

​

$

3,843

​

$

8,228

(1)Includes amounts for OneGroup and BPA acquisitions completed as of September 30, 2025.
(2)Includes amounts for OneGroup acquisitions completed in 2024.

​

The other intangibles related to the CPD acquisition are being amortized using an accelerated method over an estimated useful life of 12 years. The other intangibles related to the OneGroup and BPA acquisitions completed through the end of the third quarter of 2025 and the OneGroup acquisitions completed in 2024 are being amortized using an accelerated method over an estimated useful life of eight years. The goodwill, which is not amortized for book purposes, was assigned to the Employee Benefits Services segment for the BPA acquisitions completed through the end of the third quarter of 2025 and the CPD acquisition, and the Insurance Services segment for the OneGroup acquisitions completed through the end of the third quarter of 2025 and in 2024. The goodwill arising from one of the OneGroup acquisitions in 2024 is not deductible for tax purposes, while the goodwill arising from the OneGroup and BPA acquisitions completed through the end of the third quarter of 2025 and the remaining OneGroup acquisitions completed in 2024 is deductible for tax purposes.