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FAIR VALUE (Tables)
 9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value on Recurring Basis [Table Text Block]
Assets and liabilities measured at fair value on a recurring basis are summarized below as of
 
September 30, 2022 and December 31,
2021:
As of September 30, 2022
As of December 31, 2021
Fair Value Measurements Using
 
Fair Value Measurements Using
 
(In thousands)
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets:
Debt securities available for sale:
U.S. Treasury securities
$
138,258
$
-
$
-
$
138,258
$
148,486
$
-
$
-
$
148,486
Noncallable U.S. agencies debt securities
-
249,798
-
249,798
-
285,028
-
285,028
Callable U.S. agencies debt securities
-
2,086,221
-
2,086,221
-
1,971,954
-
1,971,954
MBS
-
3,185,549
6,170
(1)
3,191,719
-
4,037,209
7,234
(1)
4,044,443
Puerto Rico government obligations
-
-
2,193
2,193
-
-
2,850
2,850
Other investments
 
-
-
500
500
-
-
1,000
1,000
Equity securities
4,924
-
-
4,924
5,378
-
-
5,378
Derivative assets
-
1,212
-
1,212
-
1,505
-
1,505
Liabilities:
Derivative liabilities
-
452
-
452
-
1,178
-
1,178
(1)
Related to private label MBS.
Impairment or Valuation Adjustments were Recorded for Assets Recognized at Fair Value [Table Text Block]
Carrying value as of September 30, 2022
Related to losses recorded
for the Quarter Ended
September 30, 2022
Related to losses recorded
for the Nine-Month Period
Ended September 30, 2022
Losses recorded for the
Quarter Ended September
30, 2022
Losses recorded for the
Nine-Month Period Ended
September 30, 2022
(In thousands)
Loans receivable
(1)
$
4,207
$
27,531
$
(227)
$
(2,978)
OREO
 
(2)
1,234
2,913
(57)
(34)
Loans held for sale
12,169
12,169
(177)
(177)
Premises and equipment (3)
-
1,242
-
(218)
(1)
Consists mainly of
 
collateral dependent commercial and
 
construction loans. The
 
Corporation generally measured
 
losses based on
 
the fair value
 
of the
 
collateral.
The Corporation
 
derived the
 
fair values
 
from external
 
appraisals that
 
took into
 
consideration prices
 
in observed
 
transactions involving
 
similar assets
 
in similar
locations but adjusted for specific characteristics and assumptions
 
of the collateral (e.g., absorption rates), which are
 
not market observable.
(2)
The Corporation derived the fair values from appraisals that took into consideration prices in observed transactions involving similar
 
assets in similar locations but
adjusted for specific characteristics and assumptions of
 
the properties (e.g., absorption rates and net
 
operating income of income producing properties), which
 
are
not market observable. Losses were related to market valuation
 
adjustments after the transfer of the loans to the OREO
 
portfolio.
(3)
Relates to a banking facility reclassified to held-for-sale and measured
 
at the fair value of the collateral.
As of September 30, 2021, the Corporation recorded losses or valuation adjustments
 
for assets recognized at fair value on a non-
recurring basis and still held as of September 30, 2021 as shown in the following
 
table:
Carrying value as of September 30, 2021
Related to losses recorded
for the Quarter Ended
September 30, 2021
Related to losses recorded
for the Nine-Month Period
Ended September 30, 2021
Losses recorded for the
Quarter Ended September
30, 2021
Losses recorded for the
Nine-Month Period Ended
September 30, 2021
(In thousands)
Loans receivable
(1)
$
25,240
$
37,154
$
(1,612)
$
(5,285)
OREO
(2)
5,631
8,370
(53)
(210)
(1)
Consists mainly of
 
collateral dependent commercial and
 
construction loans. The
 
Corporation generally measured
 
losses based on
 
the fair value
 
of the
 
collateral.
The Corporation
 
derived the
 
fair values
 
from external
 
appraisals that
 
took into
 
consideration prices
 
in observed
 
transactions involving
 
similar assets
 
in similar
locations but adjusted for specific characteristics and assumptions
 
of the collateral (e.g., absorption rates), which are
 
not market observable.
(2)
The Corporation derived the fair values from appraisals that took into consideration prices in observed transactions involving similar
 
assets in similar locations but
adjusted for specific characteristics and assumptions of
 
the properties (e.g., absorption rates and net
 
operating income of income producing properties), which are
not market observable. Losses were related to market valuation
 
adjustments after the transfer of the loans to the OREO
 
portfolio.
Estimated Fair Value and Carrying Value of Financial Instruments [Table Text Block]
Total Carrying
Amount in
Statement of
Financial
Condition as of
September 30,
2022
Fair Value
Estimate as of
September 30,
2022
Level 1
Level 2
Level 3
(In thousands)
Assets:
Cash and due from banks and money
 
market investments (amortized cost)
$
554,990
$
554,990
$
554,990
$
-
$
-
Debt securities available
 
for sale (fair value)
5,668,689
5,668,689
138,258
5,521,568
8,863
Debt securities held to maturity (amortized
 
cost)
445,862
Less: allowance for credit losses on
held-to-maturity debt securities
(8,257)
Debt securities held to maturity, net of allowance
$
437,605
429,530
-
268,552
160,978
Equity securities (amortized cost)
19,803
19,803
-
19,803
(1)
-
Other equity securities (fair value)
4,924
4,924
4,924
-
-
Loans held for sale (lower of cost or market)
12,169
12,169
-
12,169
-
Loans held for investment (amortized cost)
11,298,618
Less: allowance for credit losses for loans
 
and finance leases
(257,859)
Loans held for investment, net of allowance
$
11,040,759
10,986,720
-
-
10,986,720
MSRs (amortized cost)
29,690
44,621
-
-
44,621
Derivative assets (fair value)
(2)
1,212
1,212
-
1,212
-
Liabilities:
Deposits
 
(amortized cost)
$
16,569,581
$
16,553,140
$
-
$
16,553,140
$
-
Securities sold under agreements
 
to repurchase (amortized cost)
200,000
202,510
-
202,510
-
Other borrowings (amortized cost)
183,762
181,761
-
-
181,761
Derivative liabilities (fair value)
(2)
452
452
-
452
-
(1)
Includes FHLB stock with a carrying value of $
12.3
 
million.
(2)
Includes interest rate swap agreements, interest rate caps, forward contracts, interest rate lock commitments, and forward loan sales commitments.
Total Carrying
Amount in
Statement of
Financial
Condition as of
December 31,
2021
Fair Value
Estimate as of
December 31,
2021
Level 1
Level 2
Level 3
(In thousands)
Assets:
Cash and due from banks and money
market investments (amortized cost)
$
2,543,058
$
2,543,058
$
2,543,058
$
-
$
-
Debt securities available
 
for sale (fair value)
6,453,761
6,453,761
148,486
6,294,191
11,084
Debt securities held to maturity (amortized
 
cost)
178,133
Less: allowance for credit losses on
held-to-maturity debt securities
(8,571)
Debt securities held to maturity, net of allowance
169,562
167,147
-
-
167,147
Equity securities (amortized cost)
26,791
26,791
-
26,791
(1)
-
Other equity securities (fair value)
5,378
5,378
5,378
-
-
Loans held for sale (lower of cost or market)
35,155
36,147
-
36,147
-
Loans held for investment (amortized cost)
11,060,658
Less: allowance for credit losses for loans
 
and finance leases
(269,030)
Loans held for investment, net of allowance
$
10,791,628
10,900,400
-
-
10,900,400
MSRs (amortized cost)
30,986
42,132
-
-
42,132
Derivative assets (fair value)
(2)
1,505
1,505
-
1,505
-
Liabilities:
Deposits (amortized cost)
$
17,784,894
$
17,800,706
$
-
$
17,800,706
$
-
Securities sold under
agreements to repurchase (amortized cost)
300,000
322,105
-
322,105
-
Advances from FHLB (amortized cost)
200,000
202,044
-
202,044
-
Other borrowings (amortized cost)
183,762
177,689
-
-
177,689
Derivative liabilities (fair value)
(2)
1,178
1,178
-
1,178
-
(1)
Includes FHLB stock with a carrying value of $
21.5
 
million.
(2)
Includes interest rate swap agreements, interest rate caps, forward contracts, interest rate lock commitments, and forward loan sales commitments.
Fair Value of Assets and Liabilities Measured on Recurring Basis [Table Text Block]
The table below presents
 
a reconciliation of the
 
beginning and ending balances
 
of all assets and
 
liabilities measured at fair
 
value on
a recurring
 
basis using
 
significant unobservable
 
inputs (Level
 
3) for
 
the quarters
 
and nine-month
 
periods ended
 
September 30,
 
2022
and 2021:
Quarter Ended September 30,
2022
2021
Level 3 Instruments Only
Debt Securities
 
Debt Securities
 
(In thousands)
Available For Sale
(1)
Available For Sale
(1)
Beginning balance
$
10,180
$
11,481
Total (losses) gains:
Included in other comprehensive income (unrealized)
(177)
191
Included in earnings (unrealized) (2)
12
9
Purchases
-
1,000
Principal repayments and amortization
(1,152)
(1,213)
Ending balance
$
8,863
$
11,468
(1)
 
Amounts mostly related to private label MBS.
(2)
 
Changes in unrealized gains included in earnings were recognized
 
within provision for credit losses - expense (benefit) and relate
 
to assets still held as of the
reporting date.
Nine-Month Period Ended September 30,
2022
2021
Level 3 Instruments Only
Debt Securities
 
Debt Securities
 
(In thousands)
Available For Sale
(1)
Available For Sale
(1)
Beginning balance
$
11,084
$
11,977
Total (losses) gains:
Included in other comprehensive income (unrealized)
(570)
896
Included in earnings (unrealized) (2)
435
136
Purchases
-
1,000
Principal repayments and amortization
(2,086)
(2,541)
Ending balance
$
8,863
$
11,468
(1)
 
Amounts mostly related to private label MBS.
(2)
 
Changes in unrealized gains included in earnings were recognized
 
within provision for credit losses - expense (benefit) and relate
 
to assets still held as of the
reporting date.
Fair Value, Measurements, Recurring [Member]  
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]  
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]
The tables below present quantitative information for significant assets and liabilities measured
 
at fair value on a recurring basis
using significant unobservable inputs (Level 3) as of September 30, 2022 and December
 
31, 2021:
September 30, 2022
Fair Value
Valuation Technique
Unobservable Input
Range
Weighted
Average
(Dollars in thousands)
Minimum
 
Maximum
Available-for-sale debt securities:
Private label MBS
$
6,170
Discounted cash flows
Discount rate
16.4%
16.4%
16.4%
Prepayment rate
1.9%
17.4%
12.6%
Projected cumulative loss rate
0.2%
17.3%
6.9%
 
Puerto Rico government obligations
2,193
Discounted cash flows
Discount rate
13.0%
13.0%
13.0%
Projected cumulative loss rate
19.0%
19.0%
19.0%
December 31, 2021
Fair Value
Valuation Technique
Unobservable Input
Range
Weighted
Average
(Dollars in thousands)
Minimum
 
Maximum
Available-for-sale debt securities:
Private label MBS
$
7,234
 
Discounted cash flows
Discount rate
12.9%
12.9%
12.9%
Prepayment rate
7.6%
24.9%
15.2%
Projected cumulative loss rate
0.2%
15.7%
7.6%
Puerto Rico government obligations
2,850
 
Discounted cash flows
Discount rate
6.6%
8.4%
7.9%
Projected cumulative loss rate
8.6%
8.6%
8.6%