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Income taxes (Tables) | 9 Months Ended
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Sep. 30, 2022
Components of Deferred Tax Assets and Liabilities |
|  |  | September 30, 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 |  | 121,840 |  | 640,545 |  | 762,385
Postretirement and pension benefits |  | 50,997 |  | - |  | 50,997
Deferred loan origination fees/cost |  | 20 |  | - |  | 20
Allowance for credit losses |  | 240,578 |  | 34,147 |  | 274,725
Accelerated depreciation |  | 5,246 |  | 7,367 |  | 12,613
FDIC-assisted transaction |  | 152,665 |  | - |  | 152,665
Intercompany deferred gains |  | 1,829 |  | - |  | 1,829
Lease liability |  | 28,747 |  | 20,960 |  | 49,707
Unrealized net loss on trading and available-for-sale securities |  | 291,285 |  | 26,109 |  | 317,394
Difference in outside basis from pass-through entities |  | 42,459 |  | - |  | 42,459
Other temporary differences |  | 33,017 |  | 8,218 |  | 41,235
| Total gross deferred tax assets |  | 968,944 |  | 740,127 |  | 1,709,071
Deferred tax liabilities: |  |  |  |  |  |
Indefinite-lived intangibles |  | 79,617 |  | 53,778 |  | 133,395
Right of use assets |  | 26,499 |  | 17,594 |  | 44,093
Deferred loan origination fees/cost |  | 574 |  | 3,506 |  | 4,080
Other temporary differences |  | 38,104 |  | 1,529 |  | 39,633
| Total gross deferred tax liabilities |  | 144,794 |  | 76,407 |  | 221,201
Valuation allowance |  | 138,219 |  | 444,444 |  | 582,663
Net deferred tax asset | $ | 685,931 | $ | 219,276 | $ | 905,207
|  |  | 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
Balance at June 30 | $ | 3.5 |  | $ | 14.8
Reduction as a result of lapse of statute of limitations - July through September |  | (1.1) |  |  | -
Reduction as a result of settlements - July through September |  | - |  |  | (11.3)
Balance at September 30 | $ | 2.4 |  | $ | 3.5
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, 2022 |  |  |  | September 30, 2021 |
(In thousands) |  | Amount | % of pre-tax income |  |  |  | Amount | % of pre-tax income |
Computed income tax expense at statutory rates | $ | 183,893 | 38 | % |  | $ | 124,370 | 38 | %
Net benefit of tax exempt interest income |  | (45,499) | (9) |  |  |  | (34,294) | (10) |
Deferred tax asset valuation allowance |  | 3,724 | 1 |  |  |  | 3,529 | 1 |
Difference in tax rates due to multiple jurisdictions |  | (7,147) | (2) |  |  |  | (9,600) | (3) |
Effect of income subject to preferential tax rate |  | (109,588) | (22) |  |  |  | (5,441) | (2) |
Unrecognized tax benefits |  | (1,503) | - |  |  |  | (5,484) | (2) |
Adjustment due to estimate on the annual effective rate |  | 10,096 | 2 |  |  |  | 4,001 | 1 |
State and local taxes |  | 3,726 | 1 |  |  |  | 6,352 | 2 |
Others |  | 30,284 | 6 |  |  |  | 109 | - |
Income tax expense | $ | 67,986 | 14 | % |  | $ | 83,542 | 25 | %
|  |  | Nine months ended |
|  |  | September 30, 2022 |  |  |  | September 30, 2021 |
(In thousands) |  | Amount | % of pre-tax income |  |  |  | Amount | % of pre-tax income |
Computed income tax expense at statutory rates | $ | 385,567 | 38 | % |  | $ | 360,859 | 38 | %
Net benefit of tax exempt interest income |  | (123,324) | (12) |  |  |  | (105,297) | (11) |
Deferred tax asset valuation allowance |  | 9,662 | 1 |  |  |  | 19,682 | 2 |
Difference in tax rates due to multiple jurisdictions |  | (20,457) | (2) |  |  |  | (25,429) | (3) |
Effect of income subject to preferential tax rate |  | (116,630) | (11) |  |  |  | (10,175) | (1) |
Adjustment due to estimate on the annual effective rate |  | 10,655 | 1 |  |  |  | (6,732) | (1) |
Unrecognized tax benefits |  | (1,503) | - |  |  |  | (5,484) | (1) |
State and local taxes |  | 10,957 | 1 |  |  |  | 8,943 | 1 |
Others |  | 27,750 | 3 |  |  |  | (2,901) | - |
Income tax expense | $ | 182,677 | 18 | % |  | $ | 233,466 | 24 | %

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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=121826272&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=121826272&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=121826272&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=121826272&loc=d3e32840-109319 + Details
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