GOODWILL AND OTHER INTANGIBLES

12 Months Ended

Dec. 31, 2021

GOODWILL AND OTHER INTANGIBLES

On January 5, 2005, ACNB Corporation completed its acquisition of Russell Insurance Group, Inc. (now ACNB Insurance Services, Inc.) of Westminster, Maryland. The acquisition of ACNB Insurance Services, Inc. resulted in goodwill of approximately $6,308,000.

On July 1, 2017, ACNB Corporation completed its acquisition of New Windsor Bancorp Inc. (New Windsor) of Taneytown, Maryland. The acquisition of New Windsor resulted in goodwill of approximately $13,272,000 and generated $2,418,000 in core deposit intangibles.

On January 11, 2020, ACNB Corporation completed its acquisition of Frederick County Bancorp, Inc. (FCBI) of Frederick, Maryland. The acquisition of FCBI resulted in good will of approximately $22,528,000 and generated $3,560,000 in core deposit intangibles.

Combined goodwill included in the Corporation’s consolidated statement of condition is $42,108,000. Goodwill, which has an indefinite useful life, is evaluated for impairment annually and is evaluated for impairment more frequently if events and circumstances indicate that the asset might be impaired. The Corporation did not identify any goodwill impairment on ACNB Insurance Services, Inc. or the Bank’s outstanding goodwill from its most recent testing. There are no impairment losses associated with goodwill as of December 31, 2021 and 2020. Additionally, there are no accumulated impairment losses

associated with goodwill as of December 31, 2021 and 2020.

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, customer relationship intangibles and renewal lists, are amortized over their estimated useful lives and subject to periodic impairment testing. Core deposit intangibles are primarily amortized over ten years using accelerated methods. Customer renewal lists are amortized over their estimated useful lives which range from eight to fifteen years.

The carrying value and accumulated amortization of the intangible assets and core deposit intangibles are as follows:


	2021				2020
Dollars in thousands	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
ACNB Insurance Services, Inc. amortized intangible assets	$	10,428	$	7,448	$	10,428	$	7,152
New Windsor core deposit intangibles	2,418		1,627		2,418		1,341
FCBI core deposit intangibles	3,560		1,230		3,560		648
	$	16,406	$	10,305	$	16,406	$	9,141

Amortization expense was $1,164,000 and $1,264,000 for the years ended December 31, 2021 and 2020, respectively.

Amortization of the intangible assets for the five years subsequent to December 31, 2021, is expected to be as follows:


Years Ending	In thousands
2022	$	1,056
2023	947
2024	830
2025	707
2026	617
Thereafter	1,944
	$	6,101