XML 21 R10.htm IDEA: XBRL DOCUMENT
v3.21.2

BUSINESS COMBINATION | 9 Months Ended
--- | ---
Sep. 30, 2021
Business Combinations [Abstract] |
Business Combination Disclosure [Text Block] | NOTE 2 – BUSINESS COMBINATION Effective as of September 1, 2020, the Corporation completed its previously announced acquisition of BSPR. The Corporation accounted for the acquisition as a business combination in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”). Accordingly, the Corporation recorded the assets and liabilities assumed, as of the date of the acquisition, at their respective fair values and allocated to goodwill the excess of the purchase price consideration over the fair value of the net assets acquired. The determination of fair value required management to make estimates about discount rates, future expected cash flows, market conditions at the time of the acquisition, and other future events that are highly subjective in nature and subject to change. Fair value estimates related to the acquired assets and liabilities were subject to adjustment for up to one year after the closing date of the acquisition as additional information relative to the closing date fair values becomes available and such information is considered final, whichever is earlier. Since the acquisition, the Corporation adjusted the original fair value estimates and goodwill by approximately $4.2 million. Substantially all of the $4.2 million were recorded in the fourth quarter of 2020. The adjustments were primarily related to post-closing purchase price adjustments to account for differences between BSPR’s actual excess capital at closing date compared to the BSPR’s excess capital amount used for the preliminary closing statement at the acquisition date. In August 2021, the Corporation finalized its fair value analysis of the acquired assets and assumed liabilities associated with this acquisition. The following table summarizes the purchase price consideration and estimated fair values of assets acquired and liabilities assumed from BSPR as of September 1, 2020 under the acquisition method of accounting:
| Fair Value as Originally Recorded |  | Measurement Period Adjustments |  | Fair Value as Remeasured
Total purchase price consideration | $ | 1,277,626 |  | $ | 3,382 |  | $ | 1,281,008
Fair value of assets acquired: |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 1,684,252 |  | $ | - |  | $ | 1,684,252
Investment securities |  | 1,167,225 |  |  | - |  |  | 1,167,225
Loans: |  |  |  |  |  |  |  |
Residential mortgage loans |  | 807,637 |  |  | 540 |  |  | 808,177
Commercial mortgage loans |  | 740,919 |  |  | 122 |  |  | 741,041
Commercial and Industrial (“C&I”) loans |  | 752,154 |  |  | (390) |  |  | 751,764
Consumer loans |  | 214,206 |  |  | (488) |  |  | 213,718
Loans, net |  | 2,514,916 |  |  | (216) |  |  | 2,514,700
Premises and equipment, net |  | 12,499 |  |  | - |  |  | 12,499
Intangible assets |  | 39,232 |  |  | 448 |  |  | 39,680
Other assets |  | 144,008 |  |  | (195) |  |  | 143,813
Total assets and identifiable intangible assets acquired |  | 5,562,132 |  |  | 37 |  |  | 5,562,169
Fair value of liabilities assumed: |  |  |  |  |  |  |  |
Deposits | $ | 4,194,940 |  | $ | - |  | $ | 4,194,940
Other liabilities |  | 95,869 |  |  | 865 |  |  | 96,734
Total liabilities assumed |  | 4,290,809 |  |  | 865 |  |  | 4,291,674
Fair value of net assets and identifiable intangible assets acquired |  | 1,271,323 |  |  | (828) |  |  | 1,270,495
Goodwill | $ | 6,303 |  | $ | 4,210 |  | $ | 10,513
Goodwill recognized in this transaction is not deductible for income tax purposes. For a description of the methods used to determine the fair values of significant identifiable assets and liabilities assumed, see Note 2 - Business Combination in the audited consolidated financial statements included in the 2020 Annual Report on Form 10-K. Merger and Restructuring Costs Upon completion of the acquisition, the Corporation began to integrate BSPR’s operations into FirstBank’s operations. Early in July 2021, the Corporation completed the conversion of all remaining BSPR’s core systems into FirstBank’s systems with the conversion of the deposit, debit card, online banking, automated teller machine (“ATM”) and cash management platforms. In conjunction with the conversion of the remaining core systems, the Corporation consolidated six banking branches which increased to nine the number of branches consolidated in Puerto Rico since the acquisition. Management has completed all systems integration efforts and is finalizing personnel and functions integrations, which are expected to be completed in the fourth quarter of 2021. Certain decisions arising from these assessments may involve cancellations of existing contracts and other actions. To the extent there are costs associated with these actions, the costs will be recognized based on the nature and timing of these integration actions. Acquisition and restructuring costs are expensed as incurred. The Corporation recognized cumulative acquisition expenses of $62.5 million through September 30, 2021, of which $2.3 million and $24.6 million was incurred during the quarter and nine-month period ended September 30, 2021, respectively, compared to $10.4 million and $14.2 million for the comparable periods in 2020, respectively. 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.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration