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Goodwill and other intangible assets

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure

Note 16 – Goodwill and other intangible assets

Goodwill

The changes in the carrying amount of goodwill for the six months ended June 30, 2016 and 2015, allocated by reportable segments, were as follows (refer to Note 35 for the definition of the Corporation’s reportable segments):

2016
					Purchase
	Balance at		Goodwill on		accounting		Balance at
(In thousands)	January 1, 2016		acquisition		adjustments		June 30,2016
Banco Popular de Puerto Rico	$	280,221	$	-	$	-	$	280,221
Banco Popular North America		346,167		-		4,707		350,874
Total Popular, Inc.	$	626,388	$	-	$	4,707	$	631,095

2015


					Purchase
	Balance at		Goodwill on		accounting		Balance at
(In thousands)	January 1, 2015		acquisition		adjustments		June 30, 2015
Banco Popular de Puerto Rico	$	250,109	$	3,899	$	(2,875)	$	251,133
Banco Popular North America		215,567		38,735		-		254,302
Total Popular, Inc.	$	465,676	$	42,634	$	(2,875)	$	505,435

During the first quarter of 2016, the Corporation recorded adjustments to its initial fair value estimates in connection with the Doral Bank Transaction. As a result, the discount on the loans increased by $4.7 million with a corresponding increase to goodwill.

The goodwill recorded during 2015 was related to the Doral Bank Transaction. The Corporation recorded purchase accounting adjustments during 2015 of $0.5 million related to the Doral Bank Transaction and of $2.4 million related to the acquisition of an insurance benefits business during 2014.

The following tables present the gross amount of goodwill and accumulated impairment losses by reportable segments.

June 30, 2016

	Balance at				Balance at		Balance at				Balance at
	January 1,		Accumulated		January 1,		June 30,		Accumulated		June 30,
	2016		impairment		2016		2016		impairment		2016
(In thousands)	(gross amounts)		losses		(net amounts)		(gross amounts)		losses		(net amounts)
Banco Popular de Puerto Rico	$	280,221	$	-	$	280,221	$	280,221	$	-	$	280,221
Banco Popular North America		510,578		164,411		346,167		515,285		164,411		350,874
Total Popular, Inc.	$	790,799	$	164,411	$	626,388	$	795,506	$	164,411	$	631,095

December 31, 2015

	Balance at				Balance at		Balance at				Balance at
	January 1,		Accumulated		January 1,		December 31,		Accumulated		December 31,
	2015		impairment		2015		2015		impairment		2015
(In thousands)	(gross amounts)		losses		(net amounts)		(gross amounts)		losses		(net amounts)
Banco Popular de Puerto Rico	$	250,109	$	-	$	250,109	$	280,221	$	-	$	280,221
Banco Popular North America		379,978		164,411		215,567		510,578		164,411		346,167
Total Popular, Inc.	$	630,087	$	164,411	$	465,676	$	790,799	$	164,411	$	626,388

Other Intangible Assets

At June 30, 2016 and December 31, 2015, the Corporation had $ 6.1 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
June 30, 2016
	Core deposits	$	63,539	$	41,800	$	21,739
	Other customer relationships		36,751		13,621		23,130
Total other intangible assets		$	100,290	$	55,421	$	44,869
December 31, 2015
	Core deposits	$	63,539	$	38,464	$	25,075
	Other customer relationships		37,665		10,745		26,920
Total other intangible assets		$	101,204	$	49,209	$	51,995

During the quarter ended June 30, 2016, the Corporation recognized $ 3.1 million in amortization expense related to other intangible assets with definite useful lives (June 30, 2015 - $ 2.9 million). During the six months ended June 30, 2016, the Corporation recognized $ 6.2 million in amortization related to other intangible assets with definite useful lives (June 30, 2015 - $ 5.0 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 2016	$	5,933
Year 2017		9,378
Year 2018		9,286
Year 2019		9,042
Year 2020		4,967
Year 2021		2,157

- 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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