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Goodwill and other intangible assets

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Intangible Assets Disclosure [Text Block]

Note 14 – Goodwill and other intangible assets

Goodwill

The changes in the carrying amount of goodwill for the three months ended March 31, 2014 and 2013, allocated by reportable segments, were as follows (refer to Note 34 for the definition of the Corporation's reportable segments):

2014
					Purchase
	Balance at		Goodwill on		accounting				Balance at
(In thousands)	January 1, 2014		acquisition		adjustments		Other		March 31,2014
Banco Popular de Puerto Rico	$	245,679	$	-	$	-	$	-	$	245,679
Banco Popular North America		402,078		-		-		-		402,078
Total Popular, Inc.	$	647,757	$	-	$	-	$	-	$	647,757

2013
					Purchase
	Balance at		Goodwill on		accounting				Balance at
(In thousands)	January 1, 2013		acquisition		adjustments		Other		March 31, 2013
Banco Popular de Puerto Rico	$	245,679	$	-	$	-	$	-	$	245,679
Banco Popular North America		402,078		-		-		-		402,078
Total Popular, Inc.	$	647,757	$	-	$	-	$	-	$	647,757

Purchase accounting adjustments consists of adjustments to the value of the assets acquired and liabilities assumed resulting from the completion of appraisals or other valuations, adjustments to initial estimates recorded for transaction costs, if any, and contingent consideration paid during a contractual contingency period.

The following table presents the gross amount of goodwill and accumulated impairment losses by reportable segments.

March 31, 2014

	Balance at				Balance at		Balance at				Balance at
	January 1,		Accumulated		January 1,		March 31,		Accumulated		March 31,
	2014		impairment		2014		2014		impairment		2014
(In thousands)	(gross amounts)		losses		(net amounts)		(gross amounts)		losses		(net amounts)
Banco Popular de Puerto Rico	$	245,679	$	-	$	245,679	$	245,679	$	-	$	245,679
Banco Popular North America		566,489		164,411		402,078		566,489		164,411		402,078
Total Popular, Inc.	$	812,168	$	164,411	$	647,757	$	812,168	$	164,411	$	647,757

December 31, 2013

	Balance at				Balance at		Balance at				Balance at
	January 1,		Accumulated		January 1,		December 31,		Accumulated		December 31,
	2013		impairment		2013		2013		impairment		2013
(In thousands)	(gross amounts)		losses		(net amounts)		(gross amounts)		losses		(net amounts)
Banco Popular de Puerto Rico	$	245,679	$	-	$	245,679	$	245,679	$	-	$	245,679
Banco Popular North America		566,489		164,411		402,078		566,489		164,411		402,078
Total Popular, Inc.	$	812,168	$	164,411	$	647,757	$	812,168	$	164,411	$	647,757

BPNA Goodwill Impairment Test

As discussed in Note 35, Subsequent events, on April 22, 2014, the Corporation entered into definitive agreements to sell its regional operations in California, Illinois and Central Florida to three different buyers and intends to centralize certain back office operations in Puerto Rico and New York. The possibility of executing this transaction represented a triggering event to perform a goodwill impairment analysis as of March 31, 2014, considering the price indications received from the buyers of these regions. Accordingly, management performed a goodwill impairment test as of March 31, 2014 for the BPNA segment. The methodology followed to perform this impairment test was consistent with the Corporation's annual goodwill impairment test, described in the Corporation's annual report for the year ended December 31, 2013, except that in determining the fair value of the reporting unit's net assets for step 2, management considered the price indications received from the buyers and applied these to the net assets of those specific regions. This analysis resulted in no impairment as of March 31, 2014.

During the second quarter of 2014, the net assets for these regions will be reclassified as held-for-sale in accordance with ASC 360-10-45. As a result of the reclassification of these discontinued operations to held-for-sale, and in accordance with ASC 350-20-40, BPNA will be allocating a proportionate share of the goodwill balance to each regional operation based on a relative fair value basis. This allocation of goodwill and related impairment analysis is expected to result in an estimated charge within a range of $160 million to $220 million. The amount of the goodwill charge is based on a preliminary estimate and may be materially different depending on the final fair value distribution analysis. However, this non-cash charge will have no impact on the Corporation's tangible capital or regulatory capital ratios.

Other Intangible Assets

At March 31, 2014 and December 31, 2013, the Corporation had $ 6 million of identifiable intangible assets, with indefinite useful lives, mostly associated with E-LOAN's trademark.

The following table reflects the components of other intangible assets subject to amortization:

		Gross				Net
		Carrying		Accumulated		Carrying
(In thousands)		Amount		Amortization		Value
March 31, 2014
	Core deposits	$	77,885	$	53,766	$	24,119
	Other customer relationships		17,552		5,179		12,373
	Other intangibles		135		115		20
Total other intangible assets		$	95,572	$	59,060	$	36,512
December 31, 2013
	Core deposits	$	77,885	$	51,737	$	26,148
	Other customer relationships		17,555		4,712		12,843
	Other intangibles		135		107		28
Total other intangible assets		$	95,575	$	56,556	$	39,019

There were no core deposits or any customer relationships intangibles that became fully amortized during the quarter ended March 31, 2014.

During the quarter ended March 31, 2014, the Corporation recognized $ 2.5 million in amortization expense related to other intangible assets with definite useful lives (March 31, 2013 - $ 2.5 million).

The following table presents the estimated amortization of the intangible assets with definite useful lives for each of the following periods:

(In thousands)
Remaining 2014	$	6,867
Year 2015		7,227
Year 2016		6,942
Year 2017		4,194
Year 2018		4,101
Year 2019		3,969

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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