GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

At September 30, 2025 and December 31, 2024, goodwill was $69.8 million and $68.1 million, respectively. During 2024, $49.4 million of goodwill was added through the Merger with Codorus Valley. As permitted under GAAP, the Company had up to twelve months following the date of the merger to finalize the fair values of the acquired assets and assumed liabilities related to the merger of Codorus Valley. During this measurement period, the Company recorded subsequent adjustments totaling $1.6 million to goodwill for provisional amounts related to income taxes recorded at the merger date, which increased total goodwill from the Merger with Codorus Valley to $51.0 million. The measurement period to finalize the fair values of the

acquired assets and assumed liabilities ended on June 30, 2025. No further adjustments to the fair values were recorded subsequent to twelve months following the Merger date.



	September 30, 2025		December 31, 2024
Balance, beginning of year	$	68,106	$	18,724
Acquired goodwill	—		49,382
Adjustments to acquired goodwill	1,645		—

Balance, end of period	$	69,751	$	68,106

Goodwill is not amortized, but is reviewed for potential impairment on at least an annual basis, with testing between annual tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit. The Company conducted its last annual goodwill impairment test as of November 30, 2024 using generally accepted valuation methods. As a result of that impairment test, no goodwill impairment was identified. No changes occurred that would impact the results of that analysis through September 30, 2025. No impairment charges were recorded in the three and nine months ended September 30, 2025 and 2024.

The Company acquired core deposit intangibles of $40.1 million and customer relationship intangible assets associated with wealth and brokerage businesses totaling $10.6 million from the Merger. The core deposit intangible and customer relationship intangible assets are amortized based on the sum-of-the-years digits method over the expected life of 10 years. The Company also acquired an investment advisory business and related accounts with assets under management of $85.0 million on July 1, 2024. In connection with this acquisition, the Company recorded an intangible asset totaling $374 thousand associated with the customer list, which is being amortized based on the sum-of-the-years digits method over the expected life of seven years.

The following table presents changes in and components of other intangible assets for the three and nine months ended September 30, 2025 and 2024. No impairment charges were recorded on other intangible assets during the three and nine months ended September 30, 2025 and 2024.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Beginning of period	$	42,748	$	1,974	$	47,765	$	2,414
Acquired core deposit intangible	—		35,860		—		35,860
Adjustment to acquired customer list	—		10,774		(10)		10,774

Amortization expense	(2,410)		(2,464)		(7,417)		(2,904)

Balance, end of period	$	40,338	$	46,144	$	40,338	$	46,144

The following table presents the components of other identifiable intangible assets at September 30, 2025 and December 31, 2024:


	September 30, 2025				December 31, 2024
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Amortized intangible assets:
Core deposit intangible	$	48,530	$	16,846	$	48,530	$	10,911
Customer relationship intangibles	11,231		2,577		11,242		1,096


Total	$	59,761	$	19,423	$	59,772	$	12,007

The following table presents future estimated aggregate amortization expense for other identifiable intangible assets at September 30, 2025:



2025	$	2,348
2026	8,585
2027	7,404
2028	6,226
2029	5,126
Thereafter	10,649
Total other identifiable intangible assets	$	40,338

ORRSTOWN FINANCIAL SERVICES INC 10-Q