GOODWILL AND OTHER INTANGIBLES

3 Months Ended

Mar. 31, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLES [Text Block]

NOTE 14 – GOODWILL AND OTHER INTANGIBLES

Goodwill as of both March 31, 2020 and December 31, 2019 amounted to $28.1 million, recognized as part of Other Assets in the consolidated statements of financial condition. The Corporation’s goodwill is related to the Florida reporting unit. The Corporation conducted its annual evaluation of goodwill and other intangibles during the fourth quarter of 2019. Such analysis indicated that it is more likely than not that the reporting unit’s fair value is greater than its carrying value based on a qualitative assessment of events and circumstances that could impact the latest quantitative estimate of fair value of the reporting unit performed in the fourth quarter of 2018. During the first quarter of 2020, the COVID-19 pandemic broadly impacted the operating environment, notably in March, causing a sharp contraction in global economic activity and increased market volatility affecting both equity and credit markets. Due to this event, the Corporation performed a qualitative assessment to conclude if recent events constituted a triggering event that would indicate that it is more likely than not that the reporting unit is impaired. Although the market volatility resulting from uncertainties around the COVID-19 pandemic negatively broadly affected macroeconomic and equity market indicators, the duration and extent of the effects of the COVID-19 pandemic are highly uncertain at this time and its ultimate effect could be affected by measures implemented by central banks and governments aimed at mitigating the contraction in economic activity and market concerns. There were no other events, specific to the reporting unit, that would have had a significant negative impact on the valuation of the reporting unit. Ultimately, the Corporation concluded that the COVID-19 event not to be a triggering event to perform a quantitative test or to accelerate the indefinite life intangibles impairment analyses. As a result, no impartment charges for goodwill and indefinite-lived intangible assets were recorded during the first quarter of 2020.

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 ($3.1 million as of March 31, 2020 and $3.6 million as of December 31, 2019), which is being amortized over the remaining estimated life of 1.6 years on an accelerated basis based on the estimated attrition rate of the purchased credit card accounts, which reflects the Corporation’s estimate that it will realize the economic benefits of the intangible asset as the revenue stream generated by the cardholder relationship is realized.

The core deposit intangible of $3.3 million as of March 31, 2020 (December 31, 2019 - $3.5 million) primarily consisted of the core deposit acquired in the February 2015 Doral Bank transaction described in Note 1 – Basis of Presentation and Significant Accounting Policies above.

In the first quarter of 2016, FirstBank Insurance Agency acquired insurance customer accounts and related customer records and recognized an insurance customer relationship intangible of $1.1 million ($0.4 million as of March 31, 2020 and $0.5 million as of December 31, 2019). 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 indicated dates:
	As of		As of
	March 31,		December 31,
	2020		2019
(Dollars in thousands)
Core deposit intangible:
Gross amount	$	51,664	$	51,664
Accumulated amortization (1)		(48,377)		(48,176)
Net carrying amount	$	3,287	$	3,488
Remaining amortization period (in years)		4.8		5.1
Purchased credit card relationship intangible:
Gross amount	$	24,465	$	24,465
Accumulated amortization (2)		(21,324)		(20,850)
Net carrying amount	$	3,141	$	3,615
Remaining amortization period (in years)		1.6		1.9
Insurance customer relationship intangible:
Gross amount	$	1,067	$	1,067
Accumulated amortization (3)		(635)		(597)
Net carrying amount	$	432	$	470
Remaining amortization period (in years)		2.8		3.0

For each of the quarters ended March 31, 2020 and 2019, the amortization expense of core deposit intangibles amounted to $0.2 million.For each of the quarters ended March 31, 2020 and 2019, the amortization expense of the purchased credit card relationship intangible amounted to $0.5 million.For each of the quarters ended March 31, 2020 and 2019, the amortization expense of the insurance customer relationship intangible amounted to $38 thousand.

The estimated aggregate annual amortization expense related to the intangible assets for future periods is as follows as of March 31, 2020:
		Amount
(In thousands)
2020	$	2,138
2021		2,656
2022		915
2023		622
2024		457
2025 and after		72