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Fair value measurement (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures

Schedule Of Fair Value Assets And Liabilities Measured On Recurring Basis Table Text Block

At December 31, 2018
(In thousands)	Level 1		Level 2		Level 3		Total
RECURRING FAIR VALUE MEASUREMENTS
Assets
Debt securities available-for-sale:
U.S. Treasury securities	$	2,719,740	$	5,552,456	$	-	$	8,272,196
Obligations of U.S. Government sponsored entities		-		333,309		-		333,309
Obligations of Puerto Rico, States and political subdivisions		-		6,742		-		6,742
Collateralized mortgage obligations - federal agencies		-		728,671		-		728,671
Mortgage-backed securities		-		3,957,545		1,233		3,958,778
Other		-		488		-		488
Total debt securities available-for-sale	$	2,719,740	$	10,579,211	$	1,233	$	13,300,184
Trading account debt securities, excluding derivatives:
U.S. Treasury securities	$	6,278	$	-	$	-	$	6,278
Obligations of Puerto Rico, States and political subdivisions		-		134		-		134
Collateralized mortgage obligations		-		48		611		659
Mortgage-backed securities		-		27,214		43		27,257
Other		-		2,974		485		3,459
Total trading account debt securities, excluding derivatives	$	6,278	$	30,370	$	1,139	$	37,787
Equity securities	$	-	$	13,296	$	-	$	13,296
Mortgage servicing rights		-		-		169,777		169,777
Derivatives		-		13,603		-		13,603
Total assets measured at fair value on a recurring basis	$	2,726,018	$	10,636,480	$	172,149	$	13,534,647
Liabilities
Derivatives	$	-	$	(12,320)	$	-	$	(12,320)
Total liabilities measured at fair value on a recurring basis	$	-	$	(12,320)	$	-	$	(12,320)

At December 31, 2017
(In thousands)	Level 1		Level 2		Level 3		Total
RECURRING FAIR VALUE MEASUREMENTS
Assets
Debt securities available-for-sale:
U.S. Treasury securities	$	503,385	$	3,424,779	$	-	$	3,928,164
Obligations of U.S. Government sponsored entities		-		608,933		-		608,933
Obligations of Puerto Rico, States and political subdivisions		-		6,609		-		6,609
Collateralized mortgage obligations - federal agencies		-		943,753		-		943,753
Mortgage-backed securities		-		4,687,374		1,288		4,688,662
Other		-		802		-		802
Total debt securities available-for-sale	$	503,385	$	9,672,250	$	1,288	$	10,176,923
Trading account debt securities, excluding derivatives:
U.S. Treasury securities	$	261	$	-	$	-	$	261
Obligations of Puerto Rico, States and political subdivisions		-		159		-		159
Collateralized mortgage obligations		-		-		529		529
Mortgage-backed securities		-		29,237		43		29,280
Other		-		2,988		529		3,517
Total trading account debt securities, excluding derivatives	$	261	$	32,384	$	1,101	$	33,746
Equity securities	$	-	$	11,076	$	-	$	11,076
Mortgage servicing rights		-		-		168,031		168,031
Derivatives		-		16,719		-		16,719
Total assets measured at fair value on a recurring basis	$	503,646	$	9,732,429	$	170,420	$	10,406,495
Liabilities
Derivatives	$	-	$	(14,431)	$	-	$	(14,431)
Contingent consideration		-		-		(164,858)		(164,858)
Total liabilities measured at fair value on a recurring basis	$	-	$	(14,431)	$	(164,858)	$	(179,289)

Fair Value Measurements, Nonrecurring [Table Text Block]

Year ended December 31, 2018
(In thousands)		Level 1		Level 2		Level 3		Total
NONRECURRING FAIR VALUE MEASUREMENTS
Assets											Write-downs
	Loans[1]	$	-	$	-	$	73,893	$	73,893	$	(25,745)
	Other real estate owned[2]		-		-		43,463		43,463		(9,189)
	Other foreclosed assets[2]		-		-		1,349		1,349		(722)
Total assets measured at fair value on a nonrecurring basis		$	-	$	-	$	118,705	$	118,705	$	(35,656)

Year ended December 31, 2017
(In thousands)		Level 1		Level 2		Level 3		Total
NONRECURRING FAIR VALUE MEASUREMENTS
Assets											Write-downs
	Loans[1]	$	-	$	-	$	64,041	$	64,041	$	(16,807)
	Other real estate owned[2] [3]		-		-		89,743		89,743		(19,085)
	Other foreclosed assets[2]		-		-		2,176		2,176		(890)
Total assets measured at fair value on a nonrecurring basis		$	-	$	-	$	155,960	$	155,960	$	(36,782)

Year ended December 31, 2016
(In thousands)	Level 1		Level 2		Level 3		Total
NONRECURRING FAIR VALUE MEASUREMENTS
Assets										Write-downs
Loans[1]	$	-	$	-	$	79,175	$	79,175	$	(26,272)
Other real estate owned[2]		-		-		44,735		44,735		(10,260)
Other foreclosed assets[2]		-		-		25		25		(12)
Total assets measured at fair value on a nonrecurring basis	$	-	$	-	$	123,935	$	123,935	$	(36,544)

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Year ended December 31, 2018
		MBS						Other
		classified		CMOs				securities
		as debt		classified		MBS		classified
		securities		as trading		classified as		as trading		Mortgage
		available-		account debt		trading account		account debt		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		debt securities		securities		rights		assets		consideration [1]		liabilities
Balance at January 1, 2018		$	1,288	$	529	$	43	$	529	$	168,031	$	170,420	$	(164,858)	$	(164,858)
Gains (losses) included in earnings			-		2		-		(44)		(8,477)		(8,519)		(6,112)		(6,112)
Gains (losses) included in OCI			(5)		-		-		-		-		(5)		-		-
Additions			-		260		-		-		10,223		10,483		-		-
Settlements			(50)		(180)		-		-		-		(230)		170,970		170,970
Balance at December 31, 2018		$	1,233	$	611	$	43	$	485	$	169,777	$	172,149	$	-	$	-
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at December 31, 2018	$	-	$	2	$	-	$	20	$	8,703	$	8,725	$	-	$	-
[1] Effective May 22, 2018, the Corporation entered into a Termination Agreement with the FDIC to terminate the Corporation’s loss sharearrangement ahead of their contractual maturities. Refer to Note 10 for additional information.

	Year ended December 31, 2017
		MBS						Other
		classified		CMOs				securities
		as debt		classified		MBS		classified
		securities		as trading		classified as		as trading		Mortgage
		available-		account debt		trading account		account debt		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		debt securities		securities		rights		assets		consideration		liabilities
Balance at January 1, 2017		$	1,392	$	1,321	$	4,755	$	602	$	196,889	$	204,959	$	(153,158)	$	(153,158)
Gains (losses) included in earnings			-		-		(124)		(73)		(36,519)		(36,716)		(11,700)		(11,700)
Gains (losses) included in OCI			9		-		-		-		-		9		-		-
Additions			-		44		332		-		7,661		8,037		-		-
Sales			-		(365)		(156)		-		-		(521)		-		-
Settlements			(25)		(195)		(876)		-		-		(1,096)		-		-
Transfers out of Level 3			(88)		(276)		(3,888)		-		-		(4,252)		-		-
Balance at December 31, 2017		$	1,288	$	529	$	43	$	529	$	168,031	$	170,420	$	(164,858)	$	(164,858)
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at December 31, 2017	$	-	$	-	$	(3)	$	42	$	(18,986)	$	(18,947)	$	(11,700)	$	(11,700)

	Year ended December 31, 2016
		MBS						Other
		classified		CMOs				securities
		as debt		classified		MBS		classified
		securities		as trading		classified as		as trading		Mortgage
		available-		account debt		trading account		account debt		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		debt securities		securities		rights		assets		consideration		liabilities
Balance at January 1, 2016		$	1,434	$	1,831	$	6,454	$	687	$	211,405	$	221,811	$	(120,380)	$	(120,380)
Gains (losses) included in earnings			(3)		(4)		(86)		(85)		(25,336)		(25,514)		(32,778)		(32,778)
Gains (losses) included in OCI			11		-		-		-		-		11		-		-
Additions			-		233		1,128		-		10,835		12,196		-		-
Sales			-		(309)		(1,852)		-		-		(2,161)		-		-
Settlements			(50)		(430)		(889)		-		(15)		(1,384)		-		-
Balance at December 31, 2016		$	1,392	$	1,321	$	4,755	$	602	$	196,889	$	204,959	$	(153,158)	$	(153,158)
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at December 31, 2016	$	-	$	2	$	(84)	$	39	$	(4,745)	$	(4,788)	$	(32,778)	$	(32,778)

Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Table Text Block]

		2018				2017				2016
		Total		Changes in unrealized		Total		Changes in unrealized		Total		Changes in unrealized
		gains (losses)		gains (losses)		gains (losses)		gains (losses)		gains (losses)		gains (losses)
		included		relating to assets still		included		relating to assets still		included		relating to assets still
(In thousands)		in earnings		held at reporting date		in earnings		held at reporting date		in earnings		held at reporting date
Interest income		$	-	$	-	$	-	$	-	$	(3)	$	-
FDIC loss share (expense)
	income		(6,112)		-		(11,700)		(11,700)		(33,413)		(33,413)
Mortgage banking activities			(8,477)		8,703		(36,519)		(18,986)		(25,336)		(4,745)
Trading account (loss) profit			(42)		22		(197)		39		(175)		(43)
Other operating income			-		-		-		-		635		635
Total		$	(14,631)	$	8,725	$	(48,416)	$	(30,647)	$	(58,292)	$	(37,566)

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

			Fair value
			at December 31,
(In thousands)			2018	Valuation technique	Unobservable inputs	Weighted average (range)[1]
CMO's - trading		$	611	Discounted cash flow model	Weighted average life	1.9 years (1.3 - 2.1 years)
					Yield	4.1% (3.9% - 4.4%)
					Prepayment speed	18.9% (16.3% - 20.7%)
Other - trading		$	485	Discounted cash flow model	Weighted average life	5.2	years
					Yield	12.0	%
					Prepayment speed	10.8	%
Mortgage servicing rights		$	169,777	Discounted cash flow model	Prepayment speed	5.3% (0.2% - 17.8%)
					Weighted average life	6.8 years (0.1 - 17.4 years)
					Discount rate	11.2% (9.5% - 15.0%)
Loans held-in-portfolio		$	61,020 [2]	External appraisal	Haircut applied on
					external appraisals	10.3% (10.0%-20.0%)
Other real estate owned		$	35,233 [3]	External appraisal	Haircut applied on
					external appraisals	24.7% (15.0% - 30.0%)
[1] Weighted average of significant unobservable inputs used to develop Level 3 fair value measurements were calculated by relative fair value.
[2] Loans held-in-portfolio in which haircuts were not applied to external appraisals were excluded from this table.
[3] Other real estate owned in which haircuts were not applied to external appraisals were excluded from this table.

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- Definition

Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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Tabular disclosure of the amount of gains or losses for the period included in earnings or resulted in a change to net assets, have arisen from the use of significant unobservable inputs (level 3) to measure the fair value of assets, liabilities, and financial instruments classified in shareholders' equity.

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Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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