ALLOWANCE FOR CREDIT LOSSES FOR LOANS AND FINANCE LEASES	6 Months Ended
	Jun. 30, 2023
ALLOWANCE FOR CREDIT LOSSES FOR LOANS AND FINANCE LEASES [Abstract]
ALLOWANCE FOR CREDIT LOSSES FOR LOANS AND FINANCE LEASES	NOTE 4 – ALLOWANCE FOR CREDIT LOSSES FOR LOANS AND FINANCE LEASES The following tables present the activity in the ACL on loans and finance leases by portfolio segment for the indicated periods: Residential Mortgage Loans Construction Loans Commercial Mortgage Commercial & Industrial Loans Consumer Loans Total Quarter Ended June 30, 2023 (In thousands) ACL: Beginning balance $ 64,403 $ 3,231 $ 36,460 $ 31,235 $ 130,238 $ 265,567 Provision for credit losses - (benefit) expense (3,500) 1,202 5,999 2,997 14,072 20,770 Charge-offs (1,146) (38) (88) (6,350) (16,462) (24,084) Recoveries 757 409 56 132 3,451 4,805 Ending balance $ 60,514 $ 4,804 $ 42,427 $ 28,014 $ 131,299 $ 267,058 Residential Mortgage Loans Construction Loans Commercial Mortgage Commercial & Industrial Loans Consumer Loans Total Six-Month Period Ended June 30, 2023 (In thousands) ACL: Beginning balance $ 62,760 $ 2,308 $ 35,064 $ 32,906 $ 127,426 $ 260,464 Impact of adoption of ASU 2022-02 2,056 - - 7 53 2,116 Provision for credit losses - (benefit) expense (3,427) 2,062 7,245 1,347 29,799 37,026 Charge-offs (2,129) (38) (106) (6,468) (33,260) (42,001) Recoveries 1,254 472 224 222 7,281 9,453 Ending balance $ 60,514 $ 4,804 $ 42,427 $ 28,014 $ 131,299 $ 267,058 Residential Mortgage Loans Construction Loans Commercial Mortgage Commercial & Industrial Loans Consumer Loans Total Quarter Ended June 30, 2022 (In thousands) ACL: Beginning balance $ 68,820 $ 1,842 $ 30,138 $ 36,784 $ 107,863 $ 245,447 Provision for credit losses - (benefit) expense (2,797) 151 1,265 (1,102) 15,148 12,665 Charge-offs (2,079) (16) (2) (68) (10,427) (12,592) Recoveries 1,287 43 1,218 589 3,495 6,632 Ending balance $ 65,231 $ 2,020 $ 32,619 $ 36,203 $ 116,079 $ 252,152 Residential Mortgage Loans Construction Loans Commercial Mortgage Commercial & Industrial Loans Consumer Loans Total Six-Month Period Ended June 30, 2022 (In thousands) ACL: Beginning balance $ 74,837 $ 4,048 $ 52,771 $ 34,284 $ 103,090 $ 269,030 Provision for credit losses - (benefit) expense (7,668) (2,063) (21,375) 653 26,129 (4,324) Charge-offs (4,607) (60) (39) (358) (20,243) (25,307) Recoveries 2,669 95 1,262 1,624 7,103 12,753 Ending balance $ 65,231 $ 2,020 $ 32,619 $ 36,203 $ 116,079 $ 252,152 The Corporation estimates the ACL following the methodologies described in Note 1 – Nature of Business and Summary of Significant Accounting Policies, to the audited consolidated financial statements included in the 2022 Annual Report on Form 10-K, for each portfolio segment. The Corporation applies probability weights to the baseline and alternative downside economic scenarios to estimate the ACL with the baseline scenario carrying the highest weight. During the second quarter of 2023, the Corporation applied the baseline scenario for the commercial mortgage and construction loan portfolios as deterioration in the CRE price index in these portfolios is expected at a lower extent than projected in the alternative downside scenario, particularly in the Puerto Rico region. The economic scenarios used in the ACL determination contained assumptions related to economic uncertainties associated with geopolitical instability, the commercial real estate price index (“CRE price index”), high inflation levels, and the expected path of interest rate increases by the FED. As of June 30, 2023, the ACL for loans and finance leases was $ 267.1 million, an increase of $ 6.6 million, from $ 260.5 million as of December 31, 2022. The ACL for commercial and construction loans increased by $ 5.0 million, mainly due to a deterioration in the forecasted CRE price index to account for an increased uncertainty in the CRE market at a national level that could potentially impact the markets served by the Corporation coupled with the growth in the commercial and construction loan portfolios. The ACL for consumer loans increased by $ 3.9 million, primarily reflecting the effect of the increase in the size of the consumer loan portfolios and historical charge-off levels, partially offset by updated macroeconomic variables, such as the unemployment rate, which are now forecasted to deteriorate at a slower pace than previously expected. The ACL for residential mortgage loans decreased by $ 2.3 million, mainly driven by a more favorable economic outlook in the projection of certain forecasted macroeconomic variables, such as the Regional Home Price Index, partially offset by a $ 2.1 million cumulative increase in the ACL, due to the adoption of ASU 2022-02, for which the Corporation elected to discontinue the use of a discounted cash flow methodology for restructured accruing loans. See Note 1 – Basis of Presentation and Significant Accounting Policies for additional information related to the adoption of ASU 2022-02 during 2023. The tables below present the ACL related to loans and finance leases and the carrying values of loans by portfolio segment as of June 30, 2023 and December 31, 2022: As of June 30, 2023 Residential Mortgage Loans Construction Loans Commercial Mortgage Loans Commercial and Industrial Loans Consumer Loans Total (Dollars in thousands) Total loans held for investment: Amortized cost of loans $ 2,793,790 $ 163,998 $ 2,320,069 $ 2,946,201 $ 3,495,257 $ 11,719,315 Allowance for credit losses 60,514 4,804 42,427 28,014 131,299 267,058 Allowance for credit losses to amortized cost 2.17 % 2.93 % 1.83 % 0.95 % 3.76 % 2.28 % As of December 31, 2022 Residential Mortgage Loans Construction Loans Commercial Mortgage Loans Commercial and Industrial Loans Consumer Loans Total (Dollars in thousands) Total loans held for investment: Amortized cost of loans $ 2,847,290 $ 132,953 $ 2,358,851 $ 2,886,263 $ 3,327,468 $ 11,552,825 Allowance for credit losses 62,760 2,308 35,064 32,906 127,426 260,464 Allowance for credit losses to amortized cost 2.20 % 1.74 % 1.49 % 1.14 % 3.83 % 2.25 % In addition, the Corporation estimates expected credit losses over the contractual period in which the Corporation is exposed to credit risk via a contractual obligation to extend credit, such as unfunded loan commitments and standby letters of credit for commercial and construction loans, unless the obligation is unconditionally cancellable by the Corporation. See Note 22 – Regulatory Matters, Commitments, and Contingencies for information on off-balance sheet exposures as of June 30, 2023 and December 31, 2022. The Corporation estimates the ACL for these off-balance sheet exposures following the methodology described in Note 1 – Nature of Business and Summary of Accounting Policies, to the audited consolidated financial statements included in the 2022 Annual Report on Form 10-K. As of June 30, 2023, the ACL for off-balance sheet credit exposures increased to $ 4.9 million, from $ 4.3 million as of December 31, 2022, driven by the deterioration in the forecasted CRE price index and its effect in construction unfunded loan commitments. The following table presents the activity in the ACL for unfunded loan commitments and standby letters of credit for the quarters and six-month periods ended June 30, 2023 and 2022: Quarter Ended Six-Month Period Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) Beginning Balance $ 4,168 $ 1,359 $ 4,273 $ 1,537 Provision for credit losses - expense 721 812 616 634 Ending balance $ 4,889 $ 2,171 $ 4,889 $ 2,171