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Income taxes (Tables) | 9 Months Ended
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Sep. 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 September 30, 2025 September 30, 2024 (In thousands) Amount % of pre-tax income Amount % of pre-tax income Computed income tax expense at statutory rates $ 92,733 37.5 % $ 74,169 37.5 % Net benefit of tax exempt income (51,732) (20.9) (29,055) (13.3) Effect of income subject to preferential tax rate (2,490) (1.0) (327) - Deferred tax asset valuation allowance 2,748 1.1 451 - Difference in tax rates due to multiple jurisdictions (6,212) (2.5) (6,764) (3.1) State and local taxes 2,717 1.1 3,429 0.4 Others (1,794) (0.8) 560 - Income tax expense $ 35,970 14.5 % $ 42,463 21.5 % Nine months ended September 30, 2025 September 30, 2024 (In thousands) Amount % of pre-tax income Amount % of pre-tax income Computed income tax expense at statutory rates $ 273,066 37.5 % $ 215,582 37.5 % Net benefit of tax exempt income (137,061) (18.8) (91,035) (15.8) Effect of income subject to preferential tax rate (4,009) (0.6) (475) (0.1) Deferred tax asset valuation allowance 10,680 1.5 2,779 0.5 Difference in tax rates due to multiple jurisdictions (11,469) (1.6) (11,893) (2.1) Other tax benefits - - (4,500) (0.8) Tax on intercompany distributions [1] - - 24,325 4.2 U.S., States, and local taxes 7,167 1.0 6,669 1.2 Others (9,456) (1.3) (2,962) (0.5) Income tax expense $ 128,918 17.7 % $ 138,490 24.1 % [1] Includes $ 16.5 million of out-of-period adjustment recorded during the first quarter of 2024.
Components of Deferred Tax Assets and Liabilities | September 30, 2025 (In thousands) PR US Total Deferred tax assets: Tax credits available for carryforward $ 4,861 $ 38,382 $ 43,243 Net operating loss and other carryforward available 60,370 584,546 644,916 Postretirement and pension benefits 28,228 - 28,228 Allowance for credit losses 249,065 28,482 277,547 Deferred loan origination fees/cost 4,533 (2,844) 1,689 Depreciation 7,700 7,742 15,442 FDIC-assisted transaction 152,665 - 152,665 Lease liability 28,040 18,572 46,612 Unrealized net loss on investment securities 179,530 14,083 193,613 Difference in outside basis from pass-through entities 53,182 - 53,182 Mortgage Servicing Rights 15,051 - 15,051 Other temporary differences 33,698 8,555 42,253 Total gross deferred tax assets 816,923 697,518 1,514,441 Deferred tax liabilities: Intangibles 91,503 55,023 146,526 Right of use assets 25,509 16,666 42,175 Loans acquired 17,244 - 17,244 Other temporary differences 7,476 429 7,905 Total gross deferred tax liabilities 141,732 72,118 213,850 Valuation allowance 78,134 386,914 465,048 Net deferred tax asset $ 597,057 $ 238,486 $ 835,543 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 Balance at September 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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