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Goodwill and other intangible assets (Policies)
 9 Months Ended
Sep. 30, 2025
Goodwill and Intangible Assets Disclosure  
Goodwill impairment
The Corporation’s goodwill and
 
other identifiable intangible assets having
 
an indefinite useful life
 
are tested for impairment,
 
at least
annually and
 
on a
 
more frequent basis
 
if events
 
or circumstances indicate
 
impairment could have
 
taken place. Such
 
events could
include,
 
among others,
 
a significant
 
adverse change
 
in the
 
business climate,
 
an adverse
 
action by
 
a regulator,
 
an unanticipated
change in the competitive environment and a decision
 
to change the operations or dispose of a
 
reporting unit.
Management
 
monitors
 
events
 
or
 
changes
 
in
 
circumstances
 
between
 
annual
 
tests
 
to
 
determine
 
if
 
these
 
events
 
or
 
changes
 
in
circumstances would more likely than not reduce
 
the fair value of its reporting units below their
 
carrying amounts.
The reporting units evaluated are one level below the business segments and correspond to the legal entities within each reportable
segment. In accordance with push-down accounting, all
 
goodwill is assigned to the reporting units
 
following a business combination.
When
 
evaluating
 
goodwill
 
for
 
impairment,
 
the
 
Corporation
 
may
 
decide
 
to
 
first
 
perform
 
a
 
qualitative
 
assessment,
 
or
 
“Step
 
Zero”
impairment test, to determine whether it is more likely than not that impairment has occurred. The qualitative assessment includes a
review of
 
macroeconomic conditions,
 
industry and
 
market considerations,
 
internal cost
 
factors, and
 
our own
 
overall financial
 
and
share
 
price performance,
 
among other
 
factors. If
 
it
 
is
 
determined that
 
it
 
is more
 
likely than
 
not that
 
the carrying
 
amounts
 
of
 
our
reporting units exceed their fair value,
 
the Corporation will perform a quantitative
 
assessment and calculate the estimated fair value
of
 
the
 
respective
 
reporting
 
unit.
 
If
 
the
 
carrying
 
amount
 
of
 
a
 
reporting
 
unit’s
 
goodwill
 
exceeds
 
the
 
fair
 
value
 
of
 
that
 
goodwill,
 
an
impairment loss is recognized.
 
To
 
assess
 
a
 
reporting unit’s
 
fair value,
 
the
 
Corporation generally
 
uses
 
a
 
combination of
 
methods
 
such
 
as
 
discounted cash
 
flow
analysis and market
 
multiples.
 
The financial projections used
 
in the discounted
 
cash flow (“DCF”)
 
valuation analysis are
 
based on
the
 
most
 
recent
 
(as
 
of
 
the
 
valuation
 
date)
 
projections
 
presented
 
to
 
the
 
Corporation’s
 
Asset
 
/
 
Liability
 
Management
 
Committee
(“ALCO”). These
 
projections reflect
 
management’s
 
expectations for
 
the
 
reporting unit’s
 
financial
 
prospects considering
 
economic
and industry conditions. The Corporation evaluates the results obtained under the valuation methodology to identify and understand
the
 
key
 
value
 
drivers,
 
to
 
ascertain
 
that
 
the
 
results
 
obtained are
 
reasonable and
 
appropriate under
 
the
 
circumstances. Elements
considered include current market and
 
economic conditions, developments in specific lines of
 
business, and any particular features
of the individual reporting units.
 
The Corporation
 
completed its
 
annual goodwill
 
impairment evaluation during
 
the third
 
quarter of
 
2025, using
 
July 31,
 
2025 as
 
the
evaluation date.
 
Through a
 
qualitative analysis,
 
Step
 
Zero, the
 
Corporation determined
 
that for
 
all
 
reporting units,
 
except for
 
the
Popular Equipment
 
Finance (‘’PEF’’)
 
reporting unit,
 
it is
 
more-likely-than-not that
 
the fair
 
value exceeded
 
the carrying
 
value. As
 
a
result, the Corporation performed a quantitative test
 
to assess PEF’s goodwill impairment.
 
The results
 
of the
 
PEF annual
 
goodwill impairment
 
test as
 
of July
 
31, 2025,
 
indicated that
 
the estimated
 
fair value
 
was below
 
it’s
carrying amount. Accordingly, the Corporation recognized a goodwill impairment
 
charge of $
13.0
 
million, which was mainly driven by
lower projected earnings for the forecasted period,
 
primarily due to lower lending activity.