Company: WBS-PG
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0000801337-25-000104
Chunk: 213

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 2
Chunk 213
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 31, 2024, these alternative investments had a total carrying amount of $52.6 million and $43.4 million, respectively, and a remaining unfunded commitment of $53.8 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. As of September 30, 2025, the Company had settled all of its contingent consideration obligations with StoneCastle Partners LLC in accordance with the purchase agreement. The following table summarizes the unobservable inputs used to derive the estimated fair value of the Company’s contingent consideration liabilities at December 31, 2024 (dollars in thousands):AgreementMaximum AmountProbability of AchievementPayment Term(in years)Discount RateFair Value(i) Re-sign broker dealers (1)$20799.0 %0.886.40 %$182(ii) Deposit program growth (2)$12,500100.0 %0.506.40 %$11,568(1)The Company re-signed the last existing broker dealer under contract in July 2025, which resulted in the cash payment of $0.2 million and an immaterial fair value adjustment.(2)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. 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.The estimated fair values of the contingent consideration liabilities were 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