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Income taxes (Tables)

3 Months Ended

Mar. 31, 2022

Components of Deferred Tax Assets and Liabilities

			March 31, 2022
(In thousands)			PR		US		Total
Deferred tax assets:
Tax credits available for carryforward		$	261	$	2,781	$	3,042
Net operating loss and other carryforward available			117,016		663,751		780,767
Postretirement and pension benefits			54,701		-		54,701
Deferred loan origination fees/cost			245		-		245
Allowance for credit losses			228,627		30,955		259,582
Accelerated depreciation			5,246		7,350		12,596
FDIC-assisted transaction			152,665		-		152,665
Intercompany deferred gains			1,739		-		1,739
Lease liability			31,292		22,856		54,148
Unrealized net gain on trading and available-for-sale securities			138,994		9,600		148,594
Difference in outside basis from pass-through entities			52,251		-		52,251
Other temporary differences			36,380		8,547		44,927
	Total gross deferred tax assets		819,417		745,840		1,565,257
Deferred tax liabilities:
Indefinite-lived intangibles			77,467		52,012		129,479
Right of use assets			29,103		19,310		48,413
Deferred loan origination fees/cost			-		3,635		3,635
Other temporary differences			44,079		1,530		45,609
	Total gross deferred tax liabilities		150,649		76,487		227,136
Valuation allowance			132,449		430,447		562,896
Net deferred tax asset		$	536,319	$	238,906	$	775,225
			December 31, 2021
(In thousands)			PR		US		Total
Deferred tax assets:
Tax credits available for carryforward		$	261	$	2,781	$	3,042
Net operating loss and other carryforward available			112,331		665,164		777,495
Postretirement and pension benefits			57,002		-		57,002
Deferred loan origination fees/cost			2,788		-		2,788
Allowance for credit losses			233,500		31,872		265,372
Deferred gains			1,642		-		1,642
Accelerated depreciation			5,246		7,422		12,668
FDIC-assisted transaction			152,665		-		152,665
Lease liability			31,211		23,894		55,105
Difference in outside basis from pass-through entities			54,781		-		54,781
Other temporary differences			38,512		8,418		46,930
	Total gross deferred tax assets		689,939		739,551		1,429,490
Deferred tax liabilities:
Indefinite-lived intangibles			76,635		51,150		127,785
Unrealized net gain (loss) on trading and available-for-sale securities			4,329		2,817		7,146
Right of use assets			29,025		20,282		49,307
Deferred loan origination fees/cost			-		3,567		3,567
Other temporary differences			43,856		1,530		45,386
	Total gross deferred tax liabilities		153,845		79,346		233,191
Valuation allowance			128,557		410,970		539,527
Net deferred tax asset		$	407,537	$	249,235	$	656,772

Reconciliation of Unrecognized Tax Benefits

(In millions)		2022			2021
Balance at January 1	$	3.5		$	14.8
Balance at March 31	$	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
			March 31, 2022					March 31, 2021
(In thousands)			Amount	% of pre-tax income				Amount	% of pre-tax income
Computed income tax expense at statutory rates		$	98,312	38	%		$	127,299	38	%
Net benefit of tax exempt interest income			(36,489)	(14)				(34,163)	(10)
Deferred tax asset valuation allowance			3,891	1				10,321	3
Difference in tax rates due to multiple jurisdictions			(6,493)	(2)				(10,948)	(3)
Effect of income subject to preferential tax rate			(3,945)	(2)				(3,329)	(1)
Adjustment due to estimate on the annual effective rate			(6,380)	(2)				(10,328)	(3)
State and local taxes			3,665	1				61	-
Others			(2,082)	(1)				(2,082)	(1)
Income tax expense		$	50,479	19	%		$	76,831	23	%

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- Definition

Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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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.

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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.

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