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GOODWILL AND OTHER INTANGIBLES
 12 Months Ended
Dec. 31, 2022
Business Combinations [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS 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.
On February 28, 2022, ACNB Insurance Services, Inc. completed its acquisition of Hockley & O’Donnell Insurance Agency, LLC of Gettysburg, Pennsylvania. The purchase price was $7,800,000 and was funded with all cash and no additional contingent payments were required. The acquisition of Hockley & O’Donnell resulted in goodwill of approximately $2,077,000 and generated $5,723,000 in customer list and covenant not to compete intangibles. During the third quarter of 2022, goodwill was decreased and the customer list was increased by $587,000 due to finalizing the calculation.
The fair value of customer list intangibles was based upon an income approach which included estimated financial projections developed by the Corporation and included other fair value assumptions for attrition, present value discount rates using market participant assumptions. The fair value of the covenant not to compete intangible was based upon an income
approach which compared the present value impact of various non-compete scenarios and other fair value assumptions including present value discount rates using market participant assumptions.
Combined goodwill included in the Corporation’s consolidated statement of condition is $44,185,000. 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, 2022 and 2021. Additionally, there are no accumulated impairment losses associated with goodwill as of December 31, 2022 and 2021.
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 list 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 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:
20222021
Dollars in thousandsGross
Carrying
Amount		Accumulated AmortizationGross
Carrying
Amount		Accumulated Amortization
ACNB Insurance Services, Inc. amortized intangible assets$16,151 $8,177 $10,428 $7,448 
New Windsor core deposit intangibles2,418 1,872 2,418 1,627 
FCBI core deposit intangibles3,560 1,748 3,560 1,230 
$22,129 $11,797 $16,406 $10,305 
Amortization expense was $1,492,000 and $1,164,000 for the years ended December 31, 2022 and 2021, respectively.
Amortization of the intangible assets for the five years subsequent to December 31, 2022, is expected to be as follows:
Years EndingIn thousands
2023$1,419 
20241,233 
20251,104 
2026991 
2027846 
Thereafter4,739 
$10,332