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GOODWILL AND OTHER INTANGIBLES

6 Months Ended

Jun. 30, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

NOTE 14 – GOODWILL AND OTHER INTANGIBLES

Goodwill as of June 30, 2019 and December 31, 2018 amounted to $28.1 million, recognized as part of Other assets in the consolidated statements of financial condition. The Corporation conducted its annual evaluation of goodwill and other intangibles during the fourth quarter of 2018. The Corporation’s goodwill is related to the U.S. (Florida) reporting unit.

There have been no significant events related to the Florida reporting unit that could indicate potential goodwill impairment since the date of the last evaluation; therefore, no goodwill impairment evaluation was performed during the first six months of 2019. Goodwill and other indefinite life intangibles are reviewed at least annually for impairment.

In connection with the acquisition of the FirstBank-branded credit card loan portfolio, in the second quarter of 2012, the Corporation recognized a purchased credit card relationship intangible of $24.5 million ($4.7 million as of June 30, 2019 and $5.7 million as of December 31, 2018), which is being amortized over the remaining estimated life of 2.4 years on an accelerated basis based on the estimated attrition rate of the purchased credit card accounts, which reflects the Corporation’s estimate that it will realize the economic benefits of the intangible asset as the revenue stream generated by the cardholder relationship is realized.

The core deposit intangible of $3.9 million (December 31, 2018 - $4.3 million) primarily consists of the core deposit acquired in the February 2015 Doral Bank transaction.

In the first quarter of 2016, FirstBank Insurance Agency acquired certain insurance customer accounts and related customer records and recognized an insurance customer relationship intangible of $1.1 million ($0.5 million as of June 30, 2019 and $0.6 million as of December 31, 2018). The acquired accounts have a direct relationship to the previous mortgage loan portfolio acquisitions from Doral Bank and Doral Financial in 2015 and 2014.

The following table shows the gross amount and accumulated amortization of the Corporation’s intangible assets recognized as part of Other assets in the consolidated statements of financial condition:

	As of		As of
	June 30,		December 31,
	2019		2018
(Dollars in thousands)
Core deposit intangible:
Gross amount	$	51,664	$	51,664
Accumulated amortization ⁽¹⁾		(47,761)		(47,329)
Net carrying amount	$	3,903	$	4,335

Remaining amortization period (in years)		5.6		6.0

Purchased credit card relationship intangible:
Gross amount	$	24,465	$	24,465
Accumulated amortization ⁽²⁾		(19,806)		(18,763)
Net carrying amount	$	4,659	$	5,702

Remaining amortization period (in years)		2.4		2.9

Insurance customer relationship intangible:
Gross amount	$	1,067	$	1,067
Accumulated amortization ⁽³⁾		(521)		(445)
Net carrying amount	$	546	$	622

Remaining amortization period (in years)		3.5		4.0

For the quarter and six-month period ended June 30, 2019, the amortization expense of core deposit intangibles amounted to $0.2 million and $0.4 million, respectively (2018 - $0.2 million and $0.6 million, respectively).For the quarter and six-month period ended June 30, 2019, the amortization expense of the purchased credit card relationship intangible amounted to $0.5 million and $1.0 million, respectively (2018 - $0.6 million and $1.1 million, respectively).For the quarter and six-month periods ended June 30, 2019 and 2018, the amortization expense of the insurance customer relationship intangible amounted to $38 thousand and $76 thousand, respectively.

The estimated aggregate annual amortization expense related to the intangible assets for future periods is as follows:

			Amount
			(In thousands)
	2019	$	1,537
	2020		2,851
	2021		2,658
	2022		915
	2023		622
	2024 and after		525