GOODWILL AND OTHER INTANGIBLES

12 Months Ended

Dec. 31, 2022

GOODWILL AND OTHER INTANGIBLES [Abstract]

GOODWILL AND OTHER INTANGIBLES [Text Block]

NOTE 9 – GOODWILL AND OTHER INTANGIBLES 

Goodwill

Goodwill as of each of December 31, 2022 and December 31, 2021 amounted to $

38.6

 million.

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. During the

fourth quarter of 2022, management performed a qualitative analysis over the carrying amount of each relevant reporting units’

goodwill and concluded that it is more-likely-than-not that the fair value of the reporting units exceeded their carrying value. This

assessment involved identifying the inputs and assumptions that most affect fair value, including evaluating significant and relevant

events impacting each reporting entity, and evaluating such factors to determine if a positive assertion can be made that it is more-

likely-than-not that the fair value of the reporting units exceeded their carrying amount.

In the qualitative assessment performed for each reporting unit, the Corporation evaluated events and circumstances that could

impact the fair value including the following:

● Macroeconomic conditions, such as improvement or deterioration in general economic conditions;

● Industry and market considerations;

● Interest rate fluctuations;

● Overall financial performance of the entity;

● Performance of industry peers over the last year; and

● Recent market transactions.

Management considered positive and negative evidence obtained during the evaluation of significant events and circumstances and

evaluated such information to conclude that it is more likely than not that the reporting unit’s fair value is greater than their carrying

amount; thus, quantitative tests were not required.

 As a result,

no

 impairment charges for goodwill were recorded during the year

ended December 31, 2022.

There were

no

 changes in the carrying amount of goodwill during the year ended December 31, 2022. The changes 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

$

-

$

1,406

$

-

$

26,692

$

28,098

Merger and acquisitions

(1)

574

794

4,935

-

6,303

Measurement period adjustment

(1) (2)

385

533

3,313

-

4,231

Goodwill, December 31, 2020

$

959

$

2,733

$

8,248

$

26,692

$

38,632

Measurement period adjustment

(1) (2)

53

74

(148)

-

(21)

Goodwill, December 31, 2021

$

1,012

$

2,807

$

8,100

$

26,692

$

38,611

(1)

Recognized in connection with the BSPR acquisition on September 1, 2020. 

(2)

Relates to the fair value estimate update performed within one year of the closing of the BSPR acquisition, in accordance with ASC Topic 805, "Business Combinations"("ASC 805").

Merger and Restructuring Costs – BSPR Acquisition

In connection with the BSPR acquisition on September 1, 2020, the Corporation recognized acquisition expenses of $

26.4

 million

and $

26.5

 million during the years ended December 31, 2021 and 2020, respectively.

No

 acquisition expenses were recognized during

the year ended December 31, 2022. Acquisition, integration, and restructuring expenses were included in merger and restructuring

costs in the consolidated statements of income, and consisted primarily of legal fees, severance and personnel-related costs, service

contracts cancellation penalties, valuation services, systems conversion, and other integration efforts, as well as accelerated

depreciation charges related to planned closures and consolidation of branches in accordance with the Corporation’s integration and

restructuring plan.

Other Intangible Assets

The following table shows the gross amount and accumulated amortization of the Corporation’s intangible assets subject to

amortization as of the indicated dates:

As of

As of

December 31, 

December 31,

2022 

2021 

(Dollars in thousands)

Core deposit intangible:

Gross amount

$

87,544

$

87,544

Accumulated amortization

(66,644)

(58,973)

Net carrying amount

$

20,900

$

28,571

Remaining amortization period (in years)

7.0

8.0

Purchased credit card relationship intangible:

Gross amount

$

3,800

$

3,800

Accumulated amortization

(3,595)

(2,602)

Net carrying amount

$

205

$

1,198

Remaining amortization period (in years)

0.7

1.7

Insurance customer relationship intangible:

Gross amount

$

1,067

$

1,067

Accumulated amortization

(1,054)

(902)

Net carrying amount

$

13

$

165

Remaining amortization period (in years)

0.1

1.1

During the years ended December 31, 2022, 2021, and 2020, the Corporation recognized $

8.8

 million, $

11.4

 million, and $

5.9

million, respectively, in amortization expense on its other intangibles subject to amortization.

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 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, 2022.

The estimated aggregate annual amortization expense related to the intangible assets subject to amortization for future periods was

as follows as of December 31, 2022:

(In thousands)

2023

$

7,736

2024

6,416

2025

3,509

2026

872

2027

872

2028 and after

1,713