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Debt securities held-to-maturity | 9 Months Ended
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Sep. 30, 2025
Held To Maturity Debt Securities |
Schedule of Held-to-maturity Securities [Line Items] |
Investments in debt and marketable equity securities | Note 6 –Debt securities held-to-maturity The following tables present the amortized cost, allowance for credit losses, gross unrealized gains and losses, approximate fair value, weighted average yield and contractual maturities of debt securities held-to-maturity at September 30, 2025 and December 31, 2024. At September 30, 2025 Allowance Carrying Value Gross Gross Weighted Amortized Book [1] for Credit Net of unrealized unrealized Fair average (In thousands) cost Value Losses Allowance gains losses value yield U.S. Treasury securities Within 1 year $ 2,107,187 $ 2,071,286 $ - $ 2,071,286 $ 2,554 $ 762 $ 2,073,078 1.50 % After 1 to 5 years 5,607,069 5,302,786 - 5,302,786 29,216 - 5,332,002 1.24 Total U.S. Treasury securities 7,714,256 7,374,072 - 7,374,072 31,770 762 7,405,080 1.31 Obligations of Puerto Rico, States and political subdivisions Within 1 year 2,605 2,605 9 2,596 7 - 2,603 6.43 After 1 to 5 years 12,530 12,530 44 12,486 28 80 12,434 3.48 After 5 to 10 years 450 450 15 435 15 - 450 5.81 After 10 years 36,012 36,012 5,769 30,243 3,205 1,802 31,646 1.42 Total obligations of Puerto Rico, States and political subdivisions 51,597 51,597 5,837 45,760 3,255 1,882 47,133 2.21 Collateralized mortgage obligations - federal agencies After 10 years 1,506 1,506 - 1,506 - 191 1,315 2.87 Total collateralized mortgage obligations - federal agencies 1,506 1,506 - 1,506 - 191 1,315 2.87 Securities in wholly owned statutory business trusts After 5 to 10 years 5,960 5,960 - 5,960 - - 5,960 6.33 Total securities in wholly owned statutory business trusts 5,960 5,960 - 5,960 - - 5,960 6.33 Total debt securities held-to-maturity [2] $ 7,773,319 $ 7,433,135 $ 5,837 $ 7,427,298 $ 35,025 $ 2,835 $ 7,459,488 1.32 % [1] Book value includes $ 340 million of unrealized loss which remains in Accumulated other comprehensive (loss) income (AOCI) related to certain securities previously transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio. [2] Includes $ 7.3 billion pledged to secure public and trust deposits that the secured parties are not permitted to sell or repledge the collateral. The Corporation had unpledged held-to-maturities securities with a fair value of $ 89.7 million that could be used to increase its borrowing facilities. At December 31, 2024 Allowance Carrying Value Gross Gross Weighted Amortized Book [1] for Credit Net of unrealized unrealized Fair average (In thousands) cost Value Losses Allowance gains losses value yield U.S. Treasury securities Within 1 year $ 599,910 $ 599,910 $ - $ 599,910 $ - $ 4,498 $ 595,412 2.76 % After 1 to 5 years 7,572,435 7,093,508 - 7,093,508 - 65,096 7,028,412 1.28 Total U.S. Treasury securities 8,172,345 7,693,418 - 7,693,418 - 69,594 7,623,824 1.39 Obligations of Puerto Rico, States and political subdivisions ` Within 1 year 2,440 2,440 5 2,435 3 - 2,438 6.39 After 1 to 5 years 16,454 16,454 80 16,374 47 80 16,341 3.69 After 5 to 10 years 655 655 22 633 20 - 653 5.81 After 10 years 37,633 37,633 5,210 32,423 2,318 2,596 32,145 1.42 Total obligations of Puerto Rico, States and political subdivisions 57,182 57,182 5,317 51,865 2,388 2,676 51,577 2.34 Collateralized mortgage obligations - federal agencies After 10 years 1,518 1,518 - 1,518 - 214 1,304 2.87 Total collateralized mortgage obligations - federal agencies 1,518 1,518 - 1,518 - 214 1,304 2.87 Securities in wholly owned statutory business trusts After 5 to 10 years 5,959 5,959 - 5,959 - - 5,959 6.33 Total securities in wholly owned statutory business trusts 5,959 5,959 - 5,959 - - 5,959 6.33 Total debt securities held-to-maturity [2] $ 8,237,004 $ 7,758,077 $ 5,317 $ 7,752,760 $ 2,388 $ 72,484 $ 7,682,664 1.40 % [1] Book value includes $ 479 million of unrealized loss which remains in Accumulated other comprehensive (loss) income (AOCI) related to certain securities transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio. [2] Includes $ 7.6 billion pledged to secure public and trust deposits that the secured parties are not permitted to sell or repledge the collateral. The Corporation had unpledged held-to-maturities securities with a fair value of $ 139.9 million that could be used to increase its borrowing facilities. Debt securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period of final contractual maturity. The expected maturities of collateralized mortgage obligations and certain other securities may differ from their contractual maturities because they may be subject to prepayments or may be called by the issuer. Credit Quality Indicators The following describes the credit quality indicators by major security type that the Corporation considers to develop the estimate of the allowance for credit losses for investment securities held-to-maturity. As discussed in Note 2 of the 2024 Form 10-K, U.S. Treasury securities carry an explicit guarantee from the U.S. Government are highly rated by major rating agencies and have a long history of no credit losses. Accordingly, the Corporation applies a zero-credit loss assumption and no allowance for credit losses (“ACL”) for these securities has been established. At September 30, 2025 and December 31, 2024, the “Obligations of Puerto Rico, States and political subdivisions” classified as held-to-maturity, included securities issued by municipalities of Puerto Rico that are generally not rated by a credit rating agency. The Corporation performs periodic credit quality reviews of these securities and internally assigns standardized credit risk ratings based on its evaluation. For the definitions of the obligor risk ratings, refer to the Credit Quality section of Note 8 to the Consolidated Financial Statements. This includes $ 8.7 million of general and special obligation bonds issued by three municipalities of Puerto Rico, of which $ 7.9 million have a “Pass” rating, that are payable primarily from certain property taxes imposed by the issuing municipality (compared to $ 13 million and $ 11.1 million, respectively, at December 31, 2024). At September 30, 2025, the portfolio of “Obligations of Puerto Rico, States and political subdivisions” also included $ 36 million in securities issued by the Puerto Rico Housing Finance Authority (“HFA”), a government instrumentality, for which the underlying source of payment is second mortgage loans in Puerto Rico residential properties (not the government), but for which HFA, provides a guarantee in the event of default and upon the satisfaction of certain other conditions (December 31, 2024 - $ 38 million). These securities are not rated by a credit rating agency. Refer to Note 18 to the Consolidated Financial Statements for additional information on the Corporation’s exposure to the Puerto Rico Government The Corporation assesses the credit risk associated with these securities by evaluating the refreshed FICO scores of a representative sample of the underlying borrowers. As of September 30, 2025, the average refreshed FICO score for the sample, comprised of 76 % of the nominal value of the securities, used for the loss estimate was of 676 (compared to 72 % and 674 , respectively, at December 31, 2024). The loss estimates for this portfolio was based on the methodology established under CECL for similar loan obligations. The Corporation does not consider the government guarantee when estimating the credit losses associated with this portfolio. A deterioration of the Puerto Rico economy or of the fiscal health of the Government of Puerto Rico and/or its instrumentalities (including if any of the issuing municipalities become subject to a debt restructuring proceeding under the Puerto Rico Oversight Management and Economic Stability Act (“PROMESA”) could adversely affect the value of these securities, resulting in losses to the Corporation. At September 30, 2025 and December 31, 2024, the portfolio of “Obligations of Puerto Rico, States and political subdivisions” also included $ 6.9 million in securities issued by the HFA for which the underlying source of payment is U.S. Treasury securities. The Corporation applies a zero-credit loss assumption for these securities, and no ACL has been established for these securities given that U.S. Treasury securities carry an explicit guarantee from the U.S. Government, are highly rated by major rating agencies, and have a long history of no credit losses. Delinquency status At September 30, 2025 and December 31, 2024, there were no securities held-to-maturity in past due or non-performing status. Allowance for credit losses on debt securities held-to-maturity The allowance for credit losses related to the Obligations of Puerto Rico and the States and Political subdivisions securities at September 30, 2025 was $ 5.8 million (December 31, 2024 - $ 5.3 million).

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