GOODWILL AND OTHER INTANGIBLES

12 Months Ended

Dec. 31, 2018

Goodwill and other Intangible Assets [Abstract]

GOODWILL AND OTHER INTANGIBLES [Text Block]

NOTE 14 – GOODWILL AND OTHER INTANGIBLES

Goodwill as of December 31, 2018 and 2017 amounted to $28.1 million, recognized as part of “Other Assets” in the consolidated statements of financial condition. The Corporation conducted its annual evaluation of goodwill and other intangibles during the fourth quarter of 2018. The Corporation’s goodwill is related to the U.S. (Florida) reporting unit.

The Corporation bypassed the qualitative assessment in 2018 and proceeded directly to perform the first step of the two-step goodwill impairment test. The Step 1 evaluation of goodwill allocated to the Florida reporting unit under both valuation approaches (market and discounted cash flow analysis) indicated that the fair value of the unit was above the carrying amount of its equity book value as of the valuation date (October 1); therefore, the completion of Step 2 was not required. Based on the analyses under both the market and discounted cash flow approaches, the estimated fair value of the reporting unit exceeded the carrying amount of the entity, including goodwill at the evaluation date. Goodwill was not impaired as of December 31, 2018 or 2017, nor was any goodwill written off due to impairment during 2018, 2017, or 2016.

In connection with the acquisition of the FirstBank-branded credit card loan portfolio in the second quarter of 2012, the Corporation recognized a purchased credit card relationship intangible of $24.5 million ($5.7 million as of December 31, 2018 and $8.0 million as of December 31, 2017), which is being amortized over the remaining estimated life of 2.9 years on an accelerated basis based on the estimated attrition rate of the purchased credit card accounts, which reflects the pattern in which the economic benefits of the intangible asset are consumed. These benefits are consumed as the revenue stream generated by the cardholder relationship is realized.

The core deposit intangible of $4.3 million (2017 - $5.5 million) primarily consists of the core deposit acquired in the February 2015 Doral Bank transaction.

In the first quarter of 2016, FirstBank Insurance Agency acquired certain insurance customer accounts and related customer records and recognized an insurance customer relationship intangible of $1.1 million ($0.6 million as of December 31, 2018 and $0.8 million as of December 31. 2017), which is being amortized over the remaining estimated life of 4.0 years on a straight-line basis. The acquired accounts have a direct relationship to the previous mortgage loan portfolio acquisitions from Doral Bank and Doral Financial in 2015 and 2014.



The following table shows the gross amount and accumulated amortization of the Corporation’s intangible assets recognized as part of Other Assets in the consolidated statements of financial condition:
	As of
	December 31,
	2018		2017
(Dollars in thousands)
Core deposit intangible:
Gross amount	$	51,664	$	51,664
Accumulated amortization ⁽¹⁾		(47,329)		(46,186)
Net carrying amount	$	4,335	$	5,478

Remaining amortization period		6.0 years		7.0 years

Purchased credit card relationship intangible:
Gross amount	$	24,465	$	24,465
Accumulated amortization ⁽²⁾		(18,763)		(16,465)
Net carrying amount	$	5,702	$	8,000

Remaining amortization period		2.9 years		3.9 years

Insurance customer relationship intangible:
Gross amount	$	1,067	$	1,067
Accumulated amortization ⁽³⁾		(445)		(292)
Net carrying amount	$	622	$	775

Remaining amortization period		4.0 years		5.0 years

(1) For the years ended December 31, 2018, 2017 and 2016, the amortization expense of core deposit intangibles amounted to $1.1 million, $1.7 million and $2.0 million, respectively.
(2) For the years ended December 31, 2018, 2017 and 2016, the amortization expense of the purchased credit card relationship intangible amounted to $2.3 million, $2.5 million and $2.8 million, respectively.
(3) For the years ended December 31, 2018, 2017 and 2016, the amortization expense of the insurance customer relationship intangible amounted to $0.2 million, $0.2 million and $0.1 million, respectively.

The estimated aggregate annual amortization expense related to the intangible assets for future periods is as follows:
			Amount
	(In thousands)
	2019	$	3,088
	2020		2,851
	2021		2,658
	2022		915
	2023		622
	2024 and after		525