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Allowance for Loan and Lease Losses | 12 Months Ended
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Dec. 31, 2016
Loans Receivable [Abstract] |
Allowance For Credit Losses Text Block | NOTE 6 – ALLOWANCE FOR LOAN AND LEASE LOSSES The composition of the Company’s allowance for loan and lease losses at December 31, 2016 and 2015 was as follows:
| December 31, |  | December 31,
| 2016 |  | 2015
| (In thousands)
Allowance for loans and lease losses on non-acquired loans: |  |  |  |  |
Originated and other loans and leases held for investment: |  |  |  |  |
Mortgage | $ | 17,344 |  | $ | 18,352
Commercial |  | 8,995 |  |  | 64,791
Consumer |  | 13,067 |  |  | 11,197
Auto and leasing |  | 19,463 |  |  | 18,261
Unallocated |  | 431 |  |  | 25
Total allowance for originated and other loans and lease losses |  | 59,300 |  |  | 112,626
Acquired loans: |  |  |  |  |
Acquired BBVAPR loans: |  |  |  |  |
Accounted for under ASC 310-20 (Loans with revolving feature and/or |  |  |  |  |
acquired at a premium) |  |  |  |  |
Commercial |  | 169 |  |  | 26
Consumer |  | 3,028 |  |  | 3,429
Auto |  | 1,103 |  |  | 2,087
|  | 4,300 |  |  | 5,542
Accounted for under ASC 310-30 (Loans acquired with deteriorated |  |  |  |  |
credit quality, including those by analogy) |  |  |  |  |
Mortgage |  | 2,682 |  |  | 1,762
Commercial |  | 23,452 |  |  | 21,161
Auto |  | 4,922 |  |  | 2,862
|  | 31,056 |  |  | 25,785
Total allowance for acquired BBVAPR loans and lease losses |  | 35,356 |  |  | 31,327
Acquired Eurobank loans: |  |  |  |  |
Loans secured by 1-4 family residential properties |  | 11,947 |  |  | 22,570
Commercial and other construction |  | 9,328 |  |  | 67,365
Consumer |  | 6 |  |  | 243
Total allowance for acquired Eurobank loan and lease losses |  | 21,281 |  |  | 90,178
Total allowance for loan and lease losses | $ | 115,937 |  | $ | 234,131
The Company maintains an allowance for loan and lease losses at a level that management considers adequate to provide for probable losses based upon an evaluation of known and inherent risks. The Company’s allowance for loan and lease losses policy provides for a detailed quarterly analysis of probable losses. The analysis includes a review of historical loan loss experience, value of underlying collateral, current economic conditions, financial condition of borrowers and other pertinent factors. Whi le management uses available information in estimating probable loan losses, future additions to the allowance may be required based on factors beyond the Company’s control. We also maintain an allowance for loan losses on acquired loans when: (i) for loan s accounted for under ASC 310-30, there is deterioration in credit quality subsequent to acquisition, and (ii) for loans accounted for under ASC 310-20, the inherent losses in the loans exceed the remaining credit discount recorded at the time of acquisiti on. Allowance for Originated and Other Loan and Lease Losses Held for Investment The following tables presents the activity in our allowance for loan and lease losses and the related recorded investment of the originated and other loans held for investment portfolio by segment for the periods indicated:
| Year Ended December 31, 2016
| Mortgage |  | Commercial |  | Consumer |  | Auto and Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 18,352 |  | $ | 64,791 |  | $ | 11,197 |  | $ | 18,261 |  | $ | 25 |  | $ | 112,626
Charge-offs |  | (6,767) |  |  | (62,445) |  |  | (11,554) |  |  | (31,731) |  |  | - |  |  | (112,497)
Recoveries |  | 330 |  |  | 460 |  |  | 452 |  |  | 12,871 |  |  | - |  |  | 14,113
Provision for originated and other loans and lease losses |  | 5,429 |  |  | 6,189 |  |  | 12,972 |  |  | 20,062 |  |  | 406 |  |  | 45,058
Balance at end of year | $ | 17,344 |  | $ | 8,995 |  | $ | 13,067 |  | $ | 19,463 |  | $ | 431 |  | $ | 59,300
| Year Ended December 31, 2015
| Mortgage |  | Commercial |  | Consumer |  | Auto and Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 19,679 |  | $ | 8,432 |  | $ | 9,072 |  | $ | 14,255 |  | $ | 1 |  | $ | 51,439
Charge-offs |  | (5,397) |  |  | (5,546) |  |  | (8,683) |  |  | (33,375) |  |  | - |  |  | (53,001)
Recoveries |  | 391 |  |  | 432 |  |  | 871 |  |  | 13,158 |  |  | - |  |  | 14,852
Provision for originated and other loans and lease losses |  | 3,679 |  |  | 61,473 |  |  | 9,937 |  |  | 24,223 |  |  | 24 |  |  | 99,336
Balance at end of year | $ | 18,352 |  | $ | 64,791 |  | $ | 11,197 |  | $ | 18,261 |  | $ | 25 |  | $ | 112,626
| Year Ended December 31, 2014
| Mortgage |  | Commercial |  | Consumer |  | Auto and Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 19,937 |  | $ | 14,897 |  | $ | 6,006 |  | $ | 7,866 |  | $ | 375 |  | $ | 49,081
Charge-offs |  | (5,011) |  |  | (2,424) |  |  | (5,782) |  |  | (26,041) |  |  | - |  |  | (39,258)
Recoveries |  | 428 |  |  | 333 |  |  | 570 |  |  | 8,858 |  |  | - |  |  | 10,189
Provision (recapture) for originated and other loans and lease losses |  | 4,325 |  |  | (4,374) |  |  | 8,278 |  |  | 23,572 |  |  | (374) |  |  | 31,427
Balance at end of year | $ | 19,679 |  | $ | 8,432 |  | $ | 9,072 |  | $ | 14,255 |  | $ | 1 |  | $ | 51,439
| December 31, 2016
| Mortgage |  | Commercial |  | Consumer |  | Auto and Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses on originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 7,761 |  | $ | 1,626 |  | $ | - |  | $ | - |  | $ | - |  | $ | 9,387
Collectively evaluated for impairment |  | 9,583 |  |  | 7,369 |  |  | 13,067 |  |  | 19,463 |  |  | 431 |  |  | 49,913
Total ending allowance balance | $ | 17,344 |  | $ | 8,995 |  | $ | 13,067 |  | $ | 19,463 |  | $ | 431 |  | $ | 59,300
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 91,650 |  | $ | 53,139 |  | $ | - |  | $ | - |  | $ | - |  | $ | 144,789
Collectively evaluated for impairment |  | 629,844 |  |  | 1,224,727 |  |  | 290,515 |  |  | 756,395 |  |  | - |  |  | 2,901,481
Total ending loan balance | $ | 721,494 |  | $ | 1,277,866 |  | $ | 290,515 |  | $ | 756,395 |  | $ | - |  | $ | 3,046,270
| December 31, 2015
| Mortgage |  | Commercial |  | Consumer |  | Auto and Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses on originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 9,233 |  | $ | 55,947 |  | $ | - |  | $ | - |  | $ | - |  | $ | 65,180
Collectively evaluated for impairment |  | 9,119 |  |  | 8,844 |  |  | 11,197 |  |  | 18,261 |  |  | 25 |  |  | 47,446
Total ending allowance balance | $ | 18,352 |  | $ | 64,791 |  | $ | 11,197 |  | $ | 18,261 |  | $ | 25 |  | $ | 112,626
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 89,973 |  | $ | 235,294 |  | $ | - |  | $ | - |  | $ | - |  | $ | 325,267
Collectively evaluated for impairment |  | 667,855 |  |  | 1,206,355 |  |  | 242,950 |  |  | 669,163 |  |  | - |  |  | 2,786,323
Total ending loan balance | $ | 757,828 |  | $ | 1,441,649 |  | $ | 242,950 |  | $ | 669,163 |  | $ | - |  | $ | 3,111,590
Allowance for BBVAPR Acquired Loan Losses Loans accounted for under ASC 310-20 (Loans with revolving feature and/or acquired at a premium) The following tables present the activity in our allowance for loan losses and related recorded investment of the associated loans in our BBVAPR acquired loan portfolio, excluding loans accounted for under ASC 310-30, for the periods indicated:
| Year Ended December 31, 2016
| Commercial |  | Consumer |  | Auto |  |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 26 |  | $ | 3,429 |  | $ | 2,087 |  |  | $ | 5,542
Charge-offs |  | (42) |  |  | (3,619) |  |  | (2,155) |  |  |  | (5,816)
Recoveries |  | 73 |  |  | 301 |  |  | 1,945 |  |  |  | 2,319
Provision (recapture) for acquired BBVAPR loan and lease losses accounted for under ASC 310-20 |  | 112 |  |  | 2,917 |  |  | (774) |  |  |  | 2,255
Balance at end of year | $ | 169 |  | $ | 3,028 |  | $ | 1,103 |  |  | $ | 4,300
| Year Ended December 31, 2015
| Commercial |  | Consumer |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 65 |  | $ | 1,211 |  | $ | 3,321 |  | $ | 4,597
Charge-offs |  | (42) |  |  | (4,755) |  |  | (4,548) |  |  | (9,345)
Recoveries |  | 31 |  |  | 680 |  |  | 2,110 |  |  | 2,821
Provision (recapture) for acquired BBVAPR loan and lease losses accounted for under ASC 310-20 |  | (28) |  |  | 6,293 |  |  | 1,204 |  |  | 7,469
Balance at end of year | $ | 26 |  | $ | 3,429 |  | $ | 2,087 |  | $ | 5,542
| Year Ended December 31, 2014
| Commercial |  | Consumer |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 926 |  | $ | - |  | $ | 1,428 |  | $ | 2,354
Charge-offs |  | (532) |  |  | (6,902) |  |  | (6,011) |  |  | (13,445)
Recoveries |  | 73 |  |  | 531 |  |  | 2,169 |  |  | 2,773
Provision (recapture) for acquired BBVAPR loan and lease losses accounted for under ASC 310-20 |  | (402) |  |  | 7,582 |  |  | 5,735 |  |  | 12,915
Balance at end of year | $ | 65 |  | $ | 1,211 |  | $ | 3,321 |  | $ | 4,597
| December 31, 2016
| Commercial |  | Consumer |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 141 |  | $ | - |  | $ | - |  | $ | 141
Collectively evaluated for impairment |  | 28 |  |  | 3,028 |  |  | 1,103 |  |  | 4,159
Total ending allowance balance | $ | 169 |  | $ | 3,028 |  | $ | 1,103 |  | $ | 4,300
Loans: |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 1,150 |  | $ | - |  | $ | - |  | $ | 1,150
Collectively evaluated for impairment |  | 4,412 |  |  | 32,862 |  |  | 53,026 |  |  | 90,300
Total ending loan balance | $ | 5,562 |  | $ | 32,862 |  | $ | 53,026 |  | $ | 91,450
| December 31, 2015
| Commercial |  | Consumer |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for impairment | $ | 26 |  | $ | 3,429 |  | $ | 2,087 |  | $ | 5,542
Total ending allowance balance | $ | 26 |  | $ | 3,429 |  | $ | 2,087 |  | $ | 5,542
Loans: |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 474 |  | $ | - |  | $ | - |  | $ | 474
Collectively evaluated for impairment |  | 6,983 |  |  | 38,385 |  |  | 106,911 |  |  | 152,279
Total ending loan balance | $ | 7,457 |  | $ | 38,385 |  | $ | 106,911 |  | $ | 152,753
Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy) The following tables present the activity in our allowance for loan losses and related recorded investment of the acquired BBVAPR loan portfolio accounted for under ASC 310-30, for the periods indicated:
| Year Ended December 31, 2016
| Mortgage |  | Commercial |  | Consumer |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 1,762 |  | $ | 21,161 |  | $ | - |  | $ | 2,862 |  | $ | 25,785
Provision for BBVAPR loans and lease losses accounted for under ASC 310-30 |  | 1,105 |  |  | 11,710 |  |  | - |  |  | 2,693 |  |  | 15,508
Loan pools fully charged-off |  | (14) |  |  | (66) |  |  | - |  |  | (202) |  |  | (282)
Allowance de-recognition |  | (171) |  |  | (9,353) |  |  | - |  |  | (431) |  |  | (9,955)
Balance at end of year | $ | 2,682 |  | $ | 23,452 |  | $ | - |  | $ | 4,922 |  | $ | 31,056
| Year Ended December 31, 2015
| Mortgage |  | Commercial |  | Consumer |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 5 |  | $ | 13,476 |  | $ | - |  | $ | - |  | $ | 13,481
Provision (recapture) for BBVAPR loans and lease losses accounted for under ASC 310-30 |  | 1,757 |  |  | 12,037 |  |  | - |  |  | 2,862 |  |  | 16,656
Loan pools fully charged-off |  | - |  |  | (4,352) |  |  | - |  |  | - |  |  | (4,352)
Balance at end of year | $ | 1,762 |  | $ | 21,161 |  | $ | - |  | $ | 2,862 |  | $ | 25,785
| Year Ended December 31, 2014
| Mortgage |  | Commercial |  | Consumer |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 5 |  |  | 1,713 |  |  | 413 |  |  | 732 |  |  | 2,863
Provision for BBVAPR loans and lease losses accounted for under ASC 310-30 |  | - |  |  | 11,763 |  |  | (413) |  |  | (732) |  |  | 10,618
Loan pools fully charged-off |  | - |  |  | - |  |  | - |  |  | - |  |  | -
Balance at end of year | $ | 5 |  | $ | 13,476 |  | $ | - |  | $ | - |  | $ | 13,481
Allowance for Acquired Eurobank Loan Losses For loans accounted for under ASC 310- 30, as part of the evaluation of actual versus expected cash flows, the Company assesses on a quarterly basis the credit quality of these loans based on delinquency, severity factors and risk ratings, among other assumptions. Migration and credit quality trends are assessed at the pool level, by comparing information from the latest evaluation period through the end of the reporting period. The changes in the allowance for loan and lease losses on acquired Eurobank loans for the years ended December 31, 2016, 2015 and 2014 were as follows:
| Year Ended December 31, 2016
| Loans Secured by 1-4 Family Residential Properties |  | Commercial and Construction |  | Consumer |  | Leasing |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired Eurobank loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 22,570 |  | $ | 67,365 |  | $ | 243 |  | $ | - |  | $ | 90,178
Provision for (recapture) covered loan and lease losses, net |  | 1,080 |  | $ | 1,183 |  |  | (8) |  |  | - |  |  | 2,255
Loan pools fully charged-off |  | - |  |  | (134) |  |  | - |  |  | - |  |  | (134)
Allowance de-recognition from new policy |  | (15,094) |  |  | (59,086) |  |  | (229) |  |  | - |  |  | (74,409)
FDIC shared-loss portion of provision for covered loan and lease losses, net |  | 3,391 |  |  | - |  |  | - |  |  | - |  |  | 3,391
Balance at end of year | $ | 11,947 |  | $ | 9,328 |  | $ | 6 |  | $ | - |  | $ | 21,281
| Year Ended December 31, 2015
| Loans secured by 1-4 Family Residential Properties |  | Commercial and Construction |  | Consumer |  | Leasing |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired Eurobank loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 5,469 |  | $ | 58,511 |  | $ | 265 |  | $ | - |  | $ | 64,245
Provision for covered loan and lease losses, net |  | 17,718 |  |  | 20,043 |  |  | 279 |  |  | - |  |  | 38,040
Loan pools fully charged-off |  | (722) |  |  | (13,587) |  |  | (301) |  |  | - |  |  | (14,610)
FDIC shared-loss portion of provision for covered loan and lease losses, net |  | 105 |  |  | 2,398 |  |  | - |  |  | - |  |  | 2,503
Balance at end of year | $ | 22,570 |  | $ | 67,365 |  | $ | 243 |  | $ | - |  | $ | 90,178
| Year Ended December 31, 2014
| Mortgage |  | Commercial and Construction |  | Consumer |  | Leasing |  | Total
| (In thousands)
Allowance for loan and lease losses for Eurobank loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 2,441 |  | $ | 49,797 |  | $ | 491 |  | $ | - |  | $ | 52,729
Provision for (recapture) covered loan and lease losses, net |  | 2,144 |  |  | 3,717 |  |  | (181) |  |  | - |  |  | 5,680
FDIC shared-loss portion of provision for covered loan and lease losses, net |  | 884 |  |  | 4,997 |  |  | (45) |  |  | - |  |  | 5,836
Balance at end of year | $ | 5,469 |  | $ | 58,511 |  | $ | 265 |  | $ | - |  | $ | 64,245
The FDIC shared-loss portion of provision for acquired Eurobank loans and lease losses, net, represents the credit impairment losses to be covered under the FDIC loss-share agreement which is increasing the FDIC loss-share indemnification asset. At December 31, 2016 and 2015, allowance for loan losses on loans covered by the FDIC shared-loss agreement amounted $11.9 million and $2 2.6 mill ion, respectively, the provision for covered loan and lease losses for the years ended December 31, 2016, 2015, and 2014 was $1.1 million, $17.7 million, and $5.7 million, respectively.

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