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Income taxes (Tables) | 6 Months Ended
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Jun. 30, 2025
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 June 30, 2025 June 30, 2024 (In thousands) Amount % of pre-tax income Amount % of pre-tax income Computed income tax expense at statutory rates $ 96,871 37.5 % $ 81,843 37.5 % Net benefit of tax exempt income (45,374) (17.6) (33,220) (15.2) Effect of income subject to preferential tax rate (606) (0.2) 1,272 0.6 Deferred tax asset valuation allowance 4,050 1.6 (235) (0.1) Difference in tax rates due to multiple jurisdictions (2,282) (0.9) (4,456) (2.1) Other tax benefits - - (4,500) (2.1) State and local taxes 414 0.1 2,204 1.0 Others (5,189) (2.0) (2,449) (1.1) Income tax expense $ 47,884 18.5 % $ 40,459 18.5 % Six months ended June 30, 2025 June 30, 2024 (In thousands) Amount % of pre-tax income Amount % of pre-tax income Computed income tax expense at statutory rates $ 180,333 37.5 % $ 141,412 37.5 % Net benefit of tax exempt income (85,329) (17.7) (61,979) (16.4) Effect of income subject to preferential tax rate (1,519) (0.3) (148) - Deferred tax asset valuation allowance 7,932 1.6 2,328 0.6 Difference in tax rates due to multiple jurisdictions (5,257) (1.1) (5,129) (1.4) Other tax benefits - - (4,500) (1.2) Tax on intercompany distributions [1] - - 24,325 6.4 U.S., States, and local taxes 4,450 0.9 3,240 0.9 Others (7,663) (1.6) (3,522) (0.9) Income tax expense $ 92,947 19.3 % $ 96,027 25.5 % [1] Includes $ 16.5 million of out-of-period adjustment recorded during the first quarter of 2024.
Components of Deferred Tax Assets and Liabilities | June 30, 2025 (In thousands) PR US Total Deferred tax assets: Tax credits available for carryforward $ 4,861 $ 32,925 $ 37,786 Net operating loss and other carryforward available 59,441 594,642 654,083 Postretirement and pension benefits 28,197 - 28,197 Allowance for credit losses 245,070 28,339 273,409 Deferred loan origination fees/cost 3,005 (2,702) 303 Depreciation 7,700 7,551 15,251 FDIC-assisted transaction 152,665 - 152,665 Lease liability 27,417 13,953 41,370 Unrealized net loss on investment securities 202,822 15,914 218,736 Difference in outside basis from pass-through entities 53,043 - 53,043 Mortgage Servicing Rights 14,561 - 14,561 Other temporary differences 36,015 8,743 44,758 Total gross deferred tax assets 834,797 699,365 1,534,162 Deferred tax liabilities: Intangibles 90,392 57,493 147,885 Right of use assets 24,908 12,280 37,188 Loans acquired 17,471 - 17,471 Other temporary differences 7,138 429 7,567 Total gross deferred tax liabilities 139,909 70,202 210,111 Valuation allowance 76,804 386,914 463,718 Net deferred tax asset $ 618,084 $ 242,249 $ 860,333 December 31, 2024 (In thousands) PR US Total Deferred tax assets: Tax credits available for carryforward $ 4,861 $ 24,728 $ 29,589 Net operating loss and other carryforward available 52,211 610,279 662,490 Postretirement and pension benefits 27,786 - 27,786 Allowance for credit losses 247,153 24,415 271,568 Depreciation 7,700 7,229 14,929 FDIC-assisted transaction 152,665 - 152,665 Lease liability 25,167 16,451 41,618 Unrealized net loss on investment securities 252,411 20,996 273,407 Difference in outside basis from pass-through entities 50,144 - 50,144 Mortgage Servicing Rights 14,475 - 14,475 Other temporary differences 41,127 9,072 50,199 Total gross deferred tax assets 875,700 713,170 1,588,870 Deferred tax liabilities: Intangibles 88,351 55,926 144,277 Right of use assets 22,784 14,454 37,238 Deferred loan origination fees/cost (1,880) 2,085 205 Loans acquired 18,415 - 18,415 Other temporary differences 6,799 429 7,228 Total gross deferred tax liabilities 134,469 72,894 207,363 Valuation allowance 69,837 386,914 456,751 Net deferred tax asset $ 671,394 $ 253,362 $ 924,756
Reconciliation of Unrecognized Tax Benefits | The reconciliation of unrecognized tax benefits, excluding interest, was as follows: (In millions) 2025 2024 Balance at January 1 $ 1.5 $ 1.5 Balance at March 31 $ 1.5 $ 1.5 Balance at June 30 $ 1.5 $ 1.5

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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://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12A -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12A Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 + Details
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