BusinessCombinationAndDeconsolidationDisclosure

3 Months Ended

Mar. 31, 2019

Notes

BusinessCombinationAndDeconsolidationDisclosure

On January 4, 2019 (the "Acquisition Date"), the Company acquired all of the stock of My1HR, a web-based entity with state-of-the-art insurance quoting and cloud-based enrollment platform, for a purchase price of $4,534,000, net of certain post-closing adjustments. In general, companies that provide insurance through user-centric platforms, or create efficiencies in the insurance industry through technological advances, are referred to as “insuretech” companies. The Company acquired My1HR for its quoting and cloud-based

enrollment platforms as part of an effort to expand our “insuretech” footprint through our agencies, which generate leads and sell our products through our owned call center and career advisors.

Upon the acquisition, the Company consolidated the assets and liabilities of My1HR. The following table presents the identifiable assets acquired and liabilities assumed in the acquisition of My1HR on the Acquisition Date based on their respective fair values (in thousands):

Cash	$	100
Intangible assets		1,500
Other assets		911
Total identifiable assets		2,511
Other liabilities		278
Total liabilities		278
Net identifiable assets acquired	$	2,233

In connection with the acquisition, the Company recorded $2,301,000 of goodwill and $1,500,000 of intangible assets (see Note 8). Goodwill reflects the synergies between My1HR and our insurance carriers as My1HR has an existing distribution network and offers increased distribution sources for IHC carrier products through its quoting and cloud based enrollment platforms designed specifically for producers in the small group employer market and individual Affordable Care Act (“ACA”) and ancillary market. This new quoting and enrollment system will support group and individual products for all IHC carriers as well as select group ACA and level funded health coverages from leading national health plans. Goodwill was calculated as the excess of the acquisition date fair value of total cash consideration transferred of $4,534,000 on the acquisition date; over the net identifiable assets of $2,233,000 that were acquired. The enterprise value of My1HR was determined by an independent appraisal using a discounted cash flow model based upon the projected future earnings of My1HR. Acquisition-related costs, primarily legal and consulting fees, were expensed and are included in selling, general and administrative expenses in the Consolidated Statement of Income.

For the period from the Acquisition Date to March 31, 2019, the Company’s Consolidated Statement of Income includes revenues and net income of $508,000 and $23,000, respectively, from My1HR.

Pro forma adjustments to present the Company’s consolidated revenues and net income as if the acquisition date was January 1, 2018 are not material and accordingly are omitted.