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Business Combinations | 12 Months Ended
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Dec. 31, 2020
Business Combinations [Abstract] |
Business Combinations | NOTE 2 – BUSINESS COMBINATIONS On December 31, 2019, Oriental purchased from the BNS all outstanding common stock of SBPR for an aggregate purchase price of $550.0 million, subject to settlement amounts as described herein. Immediately following the closing, Oriental merged SBPR with and into the Bank, with the Bank continuing as the surviving entity. As part of this transaction, the Bank also acquired the USVI banking operations of BNS through an acquisition of certain assets (including loans, ATMs and physical branch locations) and an assumption of certain liabilities (including deposits) for their net book value plus a $10.0 million premium on deposits which were settled as part of the final consideration from the acquisition. In addition, Oriental acquired certain loans and assumed certain liabilities, from BNS’s Puerto Rico branch for their net book value which were settled as part of the final consideration from the acquisition. The assets acquired and liabilities assumed as of December 31, 2019 were presented at their estimated fair value. The fair values initially assigned to the assets acquired and liabilities assumed were preliminary and subject to refinement for up to one year after the closing date of the acquisition as new information relative to closing date fair values became available. During the year ended December 31, 2020, Oriental recorded remeasurement adjustments to the preliminary estimated fair values of certain accrued interest receivables, deferred tax asset, and accounts receivables to reflect new information obtained during the measurement period (as defined by ASC Topic 805), about facts and circumstances that existed as of the acquisition date that, if known, would have affected the acquisition-date fair value measurements, as detailed in the table below. The adjustments resulted from the fair value determination of certain accrued interest receivable of loans accounted for under ASC 310-30 and from the receipt of funds from BNS for certain intercompany transactions. As of December 31, 2020, the measurement period has finalized.
| December 31, 2019 |  | Measurement |  | Fair Value
|  |  |  | Fair Value |  |  |  |  | Period |  | as
| Book Value |  | Adjustments, net |  | Fair Value |  | Adjustments |  | Remeasured
| (In thousands) |  |  |  |  |  |
Cash and cash equivalents | $ | 492,512 |  | $ | - |  | $ | 492,512 |  | $ | - |  | $ | 492,512
Investments |  | 576,319 |  |  | (102) |  |  | 576,217 |  |  | - |  |  | 576,217
Loans |  | 2,237,337 |  |  | (21,134) |  |  | 2,216,203 |  |  | - |  |  | 2,216,203
Accrued interest receivable |  | 7,722 |  |  | (2,952) |  |  | 4,770 |  |  | 5,540 |  |  | 10,310
Foreclosed real estate |  | 8,636 |  |  | (352) |  |  | 8,284 |  |  | - |  |  | 8,284
Deferred tax asset, net |  | 37,606 |  |  | 22,335 |  |  | 59,941 |  |  | 1,386 |  |  | 61,327
Premises and equipment |  | 10,866 |  |  | (1,068) |  |  | 9,798 |  |  | - |  |  | 9,798
Servicing asset |  | 40,258 |  |  | 206 |  |  | 40,464 |  |  | - |  |  | 40,464
Core deposit intangible |  | - |  |  | 41,507 |  |  | 41,507 |  |  | - |  |  | 41,507
Customer relationship intangible |  | - |  |  | 12,693 |  |  | 12,693 |  |  | - |  |  | 12,693
Other intangible |  | - |  |  | 567 |  |  | 567 |  |  | - |  |  | 567
Operating lease right-of-use assets |  | 15,452 |  |  | 4,011 |  |  | 19,463 |  |  | - |  |  | 19,463
Other assets |  | 86,016 |  |  | (6,507) |  |  | 79,509 |  |  | 410 |  |  | 79,919
Total identifiable assets acquired |  | 3,512,724 |  |  | 49,204 |  |  | 3,561,928 |  |  | 7,336 |  |  | 3,569,264
Deposits |  | 3,028,066 |  |  | (2,607) |  |  | 3,025,459 |  |  | - |  |  | 3,025,459
Operating lease liability |  | 16,317 |  |  | 2,091 |  |  | 18,408 |  |  | - |  |  | 18,408
Accrued expenses and other liabilities |  | 87,309 |  |  | - |  |  | 87,309 |  |  | - |  |  | 87,309
Total liabilities assumed |  | 3,131,692 |  |  | (516) |  |  | 3,131,176 |  |  | - |  |  | 3,131,176
Total identifiable net assets |  |  |  |  |  |  | $ | 430,752 |  | $ | 7,336 |  | $ | 438,088
Bargain purchase gain |  |  |  |  |  |  |  | 315 |  |  | 7,336 |  |  | 7,651
Total consideration |  |  |  |  |  |  | $ | 430,437 |  | $ | - |  | $ | 430,437
Merger and Restructuring Charges Merger and restructuring charges are recorded in the consolidated statement of operations and include incremental costs to integrate the operations of Oriental and its most recent acquisition. These charges represent costs associated with these activities and do not represent ongoing costs of the fully integrated combined organization. These costs were recorded in merger and restructuring charges within the consolidated statement of operations. The following table presents severance and employee charges, systems integrations charges, branch consolidation, and other merger and restructuring charges related to the Scotiabank PR & USVI Acquisition, for the years ended December 31, 2020 and 2019:
| Year Ended December 31,
| 2020 |  | 2019
| (In thousands)
Severance and employee-related charges | $ | 220 |  | $ | 13,323
Professional services and system integrations |  | 9,973 |  |  | 9,718
Branch consolidation |  | 3,707 |  |  | -
Other |  | 2,183 |  |  | 1,013
Total merger and restructuring charges | $ | 16,083 |  | $ | 24,054
Restructuring Reserve Restructuring reserves are established by a charge to merger and restructuring charges, and the restructuring charges are included in the merger and restructuring charges table. The following table presents the changes in restructuring reserves for the years ended December 31, 2020 and 2019:
| Year Ended December 31,
| 2020 |  | 2019
| (In thousands)
Balance at the beginning of the year | $ | 17,491 |  | $ | -
Merger and restructuring charges |  | 16,083 |  |  | 24,054
Cash payments |  | (18,445) |  |  | (6,563)
Balance at the end of the year | $ | 15,129 |  | $ | 17,491
Payments under merger and restructuring reserves associated with the Scotiabank PR & USVI Acquisition may continue into 2021 but should not be material and will be accounted under applicable accounting guidance to the cost being incurred.

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- 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
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