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Income taxes (Tables) | 9 Months Ended
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Sep. 30, 2021
Components of Deferred Tax Assets and Liabilities |
|  |  | September 30, 2021
(In thousands) |  | PR |  | US |  | Total
Deferred tax assets: |  |  |  |  |  |
Tax credits available for carryforward | $ | 3,718 | $ | 2,781 | $ | 6,499
Net operating loss and other carryforward available |  | 106,024 |  | 682,305 |  | 788,329
Postretirement and pension benefits |  | 73,189 |  | - |  | 73,189
Deferred loan origination fees |  | 11,251 |  | (3,997) |  | 7,254
Allowance for credit losses |  | 254,120 |  | 32,493 |  | 286,613
Accelerated depreciation |  | 4,400 |  | 7,325 |  | 11,725
FDIC-assisted transaction |  | 152,665 |  | - |  | 152,665
Intercompany deferred gains |  | 1,458 |  | - |  | 1,458
Lease liability |  | 27,670 |  | 24,757 |  | 52,427
Difference in outside basis from pass-through entities |  | 56,358 |  | - |  | 56,358
Other temporary differences |  | 40,689 |  | 8,443 |  | 49,132
| Total gross deferred tax assets |  | 731,542 |  | 754,107 |  | 1,485,649
Deferred tax liabilities: |  |  |  |  |  |
Indefinite-lived intangibles |  | 75,803 |  | 50,562 |  | 126,365
Unrealized net gain (loss) on trading and available-for-sale securities |  | 35,095 |  | 5,882 |  | 40,977
Right of use assets |  | 25,564 |  | 21,065 |  | 46,629
Other temporary differences |  | 52,623 |  | 1,507 |  | 54,130
| Total gross deferred tax liabilities |  | 189,085 |  | 79,016 |  | 268,101
Valuation allowance |  | 124,351 |  | 417,013 |  | 541,364
Net deferred tax asset | $ | 418,106 | $ | 258,078 | $ | 676,184
|  |  | December 31, 2020
(In thousands) |  | PR |  | US |  | Total
Deferred tax assets: |  |  |  |  |  |
Tax credits available for carryforward | $ | 3,003 | $ | 5,269 | $ | 8,272
Net operating loss and other carryforward available |  | 124,355 |  | 698,842 |  | 823,197
Postretirement and pension benefits |  | 80,179 |  | - |  | 80,179
Deferred loan origination fees |  | 12,079 |  | (2,652) |  | 9,427
Allowance for credit losses |  | 373,010 |  | 38,606 |  | 411,616
Accelerated depreciation |  | 3,439 |  | 5,390 |  | 8,829
FDIC-assisted transaction |  | 152,665 |  | - |  | 152,665
Intercompany deferred gains |  | 1,728 |  | - |  | 1,728
Lease liability |  | 22,790 |  | 18,850 |  | 41,640
Difference in outside basis from pass-through entities |  | 61,222 |  | - |  | 61,222
Other temporary differences |  | 38,954 |  | 7,344 |  | 46,298
| Total gross deferred tax assets |  | 873,424 |  | 771,649 |  | 1,645,073
Deferred tax liabilities: |  |  |  |  |  |
Indefinite-lived intangibles |  | 73,305 |  | 37,745 |  | 111,050
Unrealized net gain (loss) on trading and available-for-sale securities |  | 67,003 |  | 8,595 |  | 75,598
Right of use assets |  | 20,708 |  | 15,510 |  | 36,218
Other temporary differences |  | 50,247 |  | 1,169 |  | 51,416
| Total gross deferred tax liabilities |  | 211,263 |  | 63,019 |  | 274,282
Valuation allowance |  | 112,871 |  | 407,225 |  | 520,096
Net deferred tax asset | $ | 549,290 | $ | 301,405 | $ | 850,695
Reconciliation of Unrecognized Tax Benefits |
(In millions) |  | 2021 |  |  | 2020
Balance at January 1 | $ | 14.8 |  | $ | 16.3
Balance at March 31 | $ | 14.8 |  | $ | 16.3
Balance at June 30 | $ | 14.8 |  | $ | 16.3
Reduction as a result of lapse of statute of limitations - July through September |  | (11.3) |  |  | (1.5)
Balance at September 30 | $ | 3.5 |  | $ | 14.8
PR |
Differences Between Income Tax Expense (Benefit) Applicable to Income Before Income Taxes and Amount Computed by Applying the Statutory Tax Rate in Puerto Rico |
|  |  | Quarters ended |
|  |  | September 30, 2021 |  |  |  | September 30, 2020 |
(In thousands) |  | Amount | % of pre-tax income |  |  |  | Amount | % of pre-tax income |
Computed income tax expense at statutory rates | $ | 124,370 | 38 | % |  | $ | 78,594 | 38 | %
Net benefit of tax exempt interest income |  | (34,294) | (10) |  |  |  | (31,177) | (15) |
Deferred tax asset valuation allowance |  | 3,529 | 1 |  |  |  | 2,185 | 1 |
Difference in tax rates due to multiple jurisdictions |  | (9,600) | (3) |  |  |  | (2,584) | (1) |
Effect of income subject to preferential tax rate |  | (5,441) | (2) |  |  |  | (3,095) | (2) |
Unrecognized tax benefits |  | (5,484) | (2) |  |  |  | (2,163) | (1) |
Adjustment due to estimate on the annual effective rate |  | 4,001 | 1 |  |  |  | (4,030) | (2) |
State and local taxes |  | 6,352 | 2 |  |  |  | 3,748 | 2 |
Others |  | 109 | - |  |  |  | (310) | - |
Income tax expense | $ | 83,542 | 25 | % |  | $ | 41,168 | 20 | %
|  |  | Nine months ended |
|  |  | September 30, 2021 |  |  |  | September 30, 2020 |
(In thousands) |  | Amount | % of pre-tax income |  |  |  | Amount | % of pre-tax income |
Computed income tax expense at statutory rates | $ | 360,859 | 38 | % |  | $ | 149,715 | 38 | %
Net benefit of tax exempt interest income |  | (105,297) | (11) |  |  |  | (93,497) | (24) |
Deferred tax asset valuation allowance |  | 19,682 | 2 |  |  |  | 10,333 | 3 |
Difference in tax rates due to multiple jurisdictions |  | (25,429) | (3) |  |  |  | 2,081 | 1 |
Effect of income subject to preferential tax rate |  | (10,175) | (1) |  |  |  | (7,722) | (2) |
Adjustment due to estimate on the annual effective rate |  | (6,732) | (1) |  |  |  | 2,821 | 1 |
Unrecognized tax benefits |  | (5,484) | (1) |  |  |  | (2,163) | (1) |
State and local taxes |  | 8,943 | 1 |  |  |  | 5,807 | 1 |
Others |  | (2,901) | - |  |  |  | 1,518 | - |
Income tax expense | $ | 233,466 | 24 | % |  | $ | 68,893 | 17 | %

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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=84230637&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32840-109319 + Details
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