Company: WBS-PG
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0000801337-25-000083
Chunk: 63

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 1
Chunk 63
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, respectively, and a remaining unfunded commitment of $38.1 million and $30.1 million, respectively.Contingent Consideration. The Company recorded contingent consideration at fair value related to two earn-out agreements associated with the acquisition of interLINK Insured Sweep LLC from StoneCastle Partners LLC in January 2023. The terms of the purchase agreement specified that the seller would receive earn-outs based on the ability of the Company to: (i) re-sign the existing broker dealers under contract, and (ii) generate $2.5 billion in new broker dealer deposit programs within three years of the acquisition date. The estimated fair values of the contingent consideration liabilities are measured on a recurring basis and determined using an income approach considering management’s evaluation of the probability of achievement, forecasted achievement date (payment term), and a discount rate equivalent to the cost of debt. These significant inputs, which are the responsibility of management and calculated with the assistance of a third-party valuation specialist, are not observable, and accordingly, are classified within Level 3 of the fair value hierarchy.The following tables summarize the unobservable inputs used to derive the estimated fair value of the Company’s contingent consideration liabilities (dollars in thousands):June 30, 2025AgreementMaximum AmountProbability of AchievementPayment Term(in years)Discount RateFair Value(i) Re-sign broker dealers$20799.0 %0.386.40 %$182(ii) Deposit program growth (1) (2)n/an/an/an/an/aDecember 31, 2024AgreementMaximum AmountProbability of AchievementPayment Term(in years)Discount RateFair Value(i) Re-sign broker dealers $20799.0 %0.886.40 %$182(ii) Deposit program growth (1) (2)$12,500100.0 %0.506.40 %$11,568(1)During the first quarter of 2025, the Company re-evaluated its estimate of the forecasted achievement date (payment term) for the deposit program growth event earn-out, which resulted in a revised expected achievement date of April 30, 2025, instead of June 30, 2025. This change in estimate resulted in an increase in fair value of $0.9 million. (2)The Company generated the required $2.5 billion in new broker dealer deposit programs in April 2025, which resulted in the cash payment of $12.5 million on April 22,