GOODWILL AND OTHER INTANGIBLES

12 Months Ended

Dec. 31, 2020

Goodwill and other Intangible Assets [Abstract]

GOODWILL AND OTHER INTANGIBLES [Text Block]

NOTE 14 – GOODWILL AND OTHER INTANGIBLES

Goodwill as of December 31, 2020 and December 31, 2019 amounted to $38.6 million and $28.1 million, respectively. During the year ended December 31, 2020, the additions to goodwill included $6.3 million associated with the acquisition of BSPR and adjustments to goodwill within the one-year measurement period subsequent to the acquisition date in the amount of $4.2 million recorded in the fourth quarter of 2020. This transaction was accounted for as a business combination under the acquisition method of accounting in which the Corporation preliminarily allocated the total cash consideration paid of $1.3 billion over the estimated fair value of BSPR’s assets acquired and liabilities assumed. This acquisition also resulted in the recognition of $39.2 million of identifiable intangible assets as further discussed below. The amount of goodwill is subject to change, as the Corporation’s fair value estimates associated with the BSPR acquisition are considered preliminary estimates and are subject to refinement for a period of up to one year after the closing date of the acquisition as additional information related to those fair value estimates become available and such information is considered final. In addition to the goodwill recorded in connection with the acquisition of BSPR, the Corporation’s goodwill includes $28.1 million related to the United States (Florida) reporting unit.

The Corporation’s policy is to assess goodwill and other intangibles for impairment on an annual basis during the fourth quarter of each year, and more frequently if events or circumstances lead management to believe that the values of goodwill or other intangibles may be impaired. Given the volatility in economic conditions and equity markets observed during 2020, triggered by the outbreak of the COVID-19 pandemic, the Corporation performed qualitative assessments during the first three quarters of 2020 to determine whether the continued effects of the COVID-19 pandemic constituted a triggering event that would indicate that it was more likely than not that the fair value of the Florida reporting unit was impaired. The Corporation concluded that the COVID-19 event was not a triggering event that required the performance of a quantitative test. In the fourth quarter of 2020, as part of its annual evaluation, the Corporation bypassed the qualitative assessment and proceeded directly to perform quantitative analyses to test for impairment the goodwill of the Florida reporting unit. Based on analyses under both the market and discounted cash flow approaches, the estimated fair value of the Florida reporting unit well exceeded the carrying amount of the entity, including goodwill as of the evaluation date (October 1). Goodwill was not impaired as of December 31, 2020 or 2019, nor was any goodwill written off due to impairment during 2020, 2019 and 2018.

The change in the carrying amount of goodwill attributable to operating segments are reflected in the following table.

	Mortgage Banking		Consumer (Retail) Banking		Commercial and Corporate Banking		United States Operations		Total
(In thousands)
Goodwill, January 1, 2020	$	-	$	-	$	-	$	28,098	$	28,098
Merger and acquisitions		574		794		4,935		-		6,303
Adjustments		385		533		3,313		-		4,231
Goodwill, December 31, 2020	$	959	$	1,327	$	8,248	$	28,098	$	38,632

The Corporation had other intangible assets of $40.9 million as of December 31, 2020, consisting of $35.8 million in core deposit intangibles, $4.7 million in purchased credit card relationship intangibles, and $0.3 million in insurance customer relationship intangibles. The additions of $35.4 million of core deposit intangibles and $3.8 million in purchased credit card relationship intangibles during 2020 was the result of the BSPR acquisition.

The following table shows the gross amount and accumulated amortization of the Corporation’s other intangible assets as of the indicated dates:

	Year Ended December 31, 2020
	Core deposit intangible		Purchased credit card relationship intangible		Insurance customer relationship intangible		Total
(In thousands)
Gross amount of intangible assets:
Beginning balance	$	51,664	$	24,465	$	1,067	$	77,196
Additions due to acquisitions		35,432		3,800		-		39,232
Ending Balance		87,096		28,265		1,067		116,428
Accumulated amortization:
Beginning balance		(48,176)		(20,850)		(597)		(69,623)
Amortization		(3,078)		(2,682)		(152)		(5,912)
Ending balance		(51,254)		(23,532)		(749)		(75,535)
Net intangible assets	$	35,842	$	4,733	$	318	$	40,893
	Year Ended December 31, 2019
	Core deposit intangible		Purchased credit card relationship intangible		Insurance customer relationship intangible		Total
(In thousands)
Gross amount of intangible assets:
Beginning balance	$	51,664	$	24,465	$	1,067	$	77,196
Accumulated amortization:
Beginning balance		(47,329)		(18,763)		(445)		(66,537)
Amortization		(847)		(2,087)		(152)		(3,086)
Ending balance		(48,176)		(20,850)		(597)		(69,623)
Net intangible assets	$	3,488	$	3,615	$	470	$	7,573

	Year Ended December 31, 2018
	Core deposit intangible		Purchased credit card relationship intangible		Insurance customer relationship intangible		Total
(In thousands)
Gross amount of intangible assets:
Beginning balance	$	51,664	$	24,465	$	1,067	$	77,196
Accumulated amortization:
Beginning balance		(46,187)		(16,464)		(293)		(62,944)
Amortization		(1,142)		(2,299)		(152)		(3,593)
Ending balance		(47,329)		(18,763)		(445)		(66,537)
Net intangible assets	$	4,335	$	5,702	$	622	$	10,659

The Corporation amortizes core deposit intangibles and customer relationship intangibles based on the projected useful lives of the related deposits in the case of core deposit intangibles, and over the projected useful lives of the related client relationships in the case of customer relationship intangibles. The weighted average remaining amortization periods typically range from one to six years. As mentioned above, the Corporation analyzes core deposit intangibles and customer relationship intangibles annually for impairment, or sooner if events and circumstances indicate possible impairment. Factors that may suggest impairment include customer attrition and run-off. Management is unaware of any events and/or circumstances that would indicate a possible impairment to the core deposit intangibles or customer relationship intangibles as of December 31, 2020.

The estimated aggregate annual amortization expense related to the intangible assets for future periods was as follows as of December 31, 2020:
			Amount
	(In thousands)
	2021	$	11,293
	2022		8,731
	2023		7,651
	2024		6,346
	2025		3,469
	2026 and after		3,403