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Loans Receivable

3 Months Ended

Mar. 31, 2017

Loans Receivable [Abstract]

LOANS RECEIVABLE

NOTE 4 - LOANS

The Company’s loan portfolio is composed of two segments, loans initially accounted for under the amortized cost method (referred to as "originated and other" loans) and loans acquired (referred to as "acquired" loans). Acquired loans are further segregated between acquired BBVAPR loans and acquired Eurobank loans. Acquired Eurobank loans were purchased subject to loss-sharing agreements with the FDIC, which were terminated on February 6, 2017.

The composition of the Company’s loan portfolio at March 31, 2017 and December 31, 2016 was as follows:

	March 31,			December 31,
	2017			2016
	(In thousands)
Originated and other loans and leases held for investment:
Mortgage	$	709,863		$	721,494
Commercial		1,253,712			1,277,866
Consumer		300,412			290,515
Auto and leasing		786,606			756,395
		3,050,593			3,046,270
Allowance for loan and lease losses on originated and other loans and leases		(60,483)			(59,300)
		2,990,110			2,986,970
Deferred loan costs, net		6,464			5,766
Total originated and other loans loans held for investment, net		2,996,574			2,992,736
Acquired loans:
Acquired BBVAPR loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		5,436			5,562
Consumer		31,001			32,862
Auto		42,523			53,026
		78,960			91,450
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-20		(3,615)			(4,300)
		75,345			87,150
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy)
Mortgage		558,112			569,253
Commercial		278,665			292,564
Consumer		3,201			4,301
Auto		71,495			85,676
		911,473			951,794
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-30		(34,930)			(31,056)
		876,543			920,738
Total acquired BBVAPR loans, net		951,888			1,007,888
Acquired Eurobank loans:
Loans secured by 1-4 family residential properties		72,966			73,018
Commercial		73,181			81,460
Consumer		1,268			1,372
Total acquired Eurobank loans		147,415			155,850
Allowance for loan and lease losses on Eurobank loans		(22,006)			(21,281)
Total acquired Eurobank loans, net		125,409			134,569
Total acquired loans, net		1,077,297			1,142,457
Total held for investment, net		4,073,871			4,135,193
Mortgage loans held-for-sale		15,837			12,499
Total loans, net	$	4,089,708		$	4,147,692

Originated and Other Loans and Leases Held for Investment

The Company’s originated and other loans held for investment are encompassed within four portfolio segments: mortgage, commercial, consumer, and auto and leasing.

The following tables present the aging of the recorded investment in gross originated and other loans held for investment at March 31, 2017 and December 31, 2016, by class of loans. Mortgage loans past due include delinquent loans in the GNMA buy-back option program. Servicers of loans underlying GNMA mortgage-backed securities must report as their own assets the defaulted loans that they have the option (but not the obligation) to repurchase, even when they elect not to exercise that option.

	March 31, 2017
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	195		$	1,408		$	3,135		$	4,738		$	56		$	44,001		$	48,795		$	112
Years 2003 and 2004		163			3,963			6,743			10,869			192			77,391			88,452			-
Year 2005		-			1,852			3,573			5,425			111			42,372			47,908			-
Year 2006		658			2,094			5,757			8,509			-			58,460			66,969			-
Years 2007, 2008 and 2009		288			2,053			10,455			12,796			-			61,909			74,705			389
Years 2010, 2011, 2012, 2013		243			1,565			9,379			11,187			124			125,773			137,084			433
Years 2014, 2015, 2016 and 2017		-			232			1,573			1,805			-			109,593			111,398			-
		1,547			13,167			40,615			55,329			483			519,499			575,311			934
Non-traditional		-			378			4,567			4,945			-			16,397			21,342			-
Loss mitigation program		9,956			5,779			14,840			30,575			2,960			69,363			102,898			1,637
		11,503			19,324			60,022			90,849			3,443			605,259			699,551			2,571
Home equity secured personal loans		-			-			-			-			-			339			339			-
GNMA's buy-back option program		-			-			9,973			9,973			-			-			9,973			-
		11,503			19,324			69,995			100,822			3,443			605,598			709,863			2,571
Commercial
Commercial secured by real estate:
Corporate		-			-			-			-			-			228,306			228,306			-
Institutional		-			-			254			254			-			47,553			47,807			-
Middle market		813			-			3,240			4,053			1,255			222,862			228,170			-
Retail		3,030			359			6,042			9,431			4,408			231,436			245,275			-
Floor plan		-			-			-			-			-			2,950			2,950			-
Real estate		-			-			-			-			-			16,090			16,090			-
		3,843			359			9,536			13,738			5,663			749,197			768,598			-
Other commercial and industrial:
Corporate		-			-			-			-			-			135,056			135,056			-
Institutional		-			-			-			-			-			154,965			154,965			-
Middle market		-			99			-			99			1,207			76,902			78,208			-
Retail		1,177			230			413			1,820			728			80,340			82,888			-
Floor plan		-			-			55			55			-			33,942			33,997			-
		1,177			329			468			1,974			1,935			481,205			485,114			-
		5,020			688			10,004			15,712			7,598			1,230,402			1,253,712			-

	March 31, 2017
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Consumer
Credit cards	$	641		$	247		$	456		$	1,344		$	-		$	25,596		$	26,940		$	-
Overdrafts		12			16			16			44			-			192			236			-
Personal lines of credit		25			44			37			106			-			2,201			2,307			-
Personal loans		3,030			1,701			830			5,561			370			249,613			255,544			-
Cash collateral personal loans		275			33			21			329			-			15,056			15,385			-
		3,983			2,041			1,360			7,384			370			292,658			300,412			-
Auto and leasing		47,588			14,324			7,710			69,622			254			716,730			786,606			-
Total	$	68,094		$	36,377		$	89,069		$	193,540		$	11,665		$	2,845,388		$	3,050,593		$	2,571

	December 31, 2016
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	196		$	2,176		$	3,371		$	5,743		$	-		$	44,542		$	50,285		$	158
Years 2003 and 2004		156			3,872			7,272			11,300			181			79,226			90,707			-
Year 2005		-			1,952			4,306			6,258			180			43,571			50,009			-
Year 2006		506			2,905			6,261			9,672			94			59,534			69,300			-
Years 2007, 2008 and 2009		409			1,439			11,732			13,580			111			63,038			76,729			398
Years 2010, 2011, 2012, 2013		349			1,772			10,417			12,538			126			127,196			139,860			583
Years 2014, 2015 and 2016		47			123			1,357			1,527			-			106,672			108,199			-
		1,663			14,239			44,716			60,618			692			523,779			585,089			1,139
Non-traditional		-			498			4,730			5,228			-			17,631			22,859			-
Loss mitigation program		8,911			7,205			16,541			32,657			3,599			67,272			103,528			1,724
		10,574			21,942			65,987			98,503			4,291			608,682			711,476			2,863
Home equity secured personal loans		-			-			-			-			-			337			337			-
GNMA's buy-back option program		-			-			9,681			9,681			-			-			9,681			-
		10,574			21,942			75,668			108,184			4,291			609,019			721,494			2,863
Commercial
Commercial secured by real estate:
Corporate		-			-			-			-			-			242,770			242,770			-
Institutional		-			-			254			254			-			26,546			26,800			-
Middle market		-			60			3,319			3,379			1,304			230,298			234,981			-
Retail		154			350			6,594			7,098			4,638			237,992			249,728			-
Floor plan		-			-			-			-			-			2,989			2,989			-
Real estate		-			-			-			-			-			16,395			16,395			-
		154			410			10,167			10,731			5,942			756,990			773,663			-
Other commercial and industrial:
Corporate		-			-			-			-			-			136,438			136,438			-
Institutional		-			-			-			-			-			180,285			180,285			-
Middle market		-			-			-			-			1,278			80,355			81,633			-
Retail		930			100			969			1,999			294			71,412			73,705			-
Floor plan		8			-			61			69			-			32,073			32,142			-
		938			100			1,030			2,068			1,572			500,563			504,203			-
		1,092			510			11,197			12,799			7,514			1,257,553			1,277,866			-

	December 31, 2016
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Consumer
Credit cards	$	527		$	283		$	525		$	1,335		$	-		$	25,023		$	26,358		$	-
Overdrafts		16			12			5			33			-			174			207			-
Personal lines of credit		41			4			32			77			-			2,327			2,404			-
Personal loans		2,474			1,489			1,081			5,044			259			240,969			246,272			-
Cash collateral personal loans		240			20			4			264			-			15,010			15,274			-
		3,298			1,808			1,647			6,753			259			283,503			290,515			-
Auto and leasing		42,714			19,014			8,173			69,901			181			686,313			756,395			-
Total	$	57,678		$	43,274		$	96,685		$	197,637		$	12,245		$	2,836,388		$	3,046,270		$	2,863

At March 31, 2017 and December 31, 2016, the Company had carrying balance of $136.5 million and $136.6 million, respectively, in originated and other loans held for investment granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of the institutional commercial loan segment. All originated and other loans granted to the Puerto Rico government are general obligations of municipalities secured by ad valorem taxation, without limitation as to rate or amount, on all taxable property within the issuing municipalities. The good faith, credit and unlimited taxing power of each issuing municipality are pledged for the payment of its general obligations.

Acquired Loans

Acquired loans were initially measured at fair value and subsequently accounted for under either ASC 310-30 or ASC 310-20 (Non-refundable fees and Other Costs). We have acquired loans in two acquisitions, BBVAPR and Eurobank.

Acquired BBVAPR Loans

Accounted for under ASC 310-20 (Loans with revolving feature and/or acquired at a premium)

Credit cards, retail and commercial revolving lines of credits, floor plans and performing auto loans with FICO scores over 660 acquired at a premium are accounted for under the guidance of ASC 310-20, which requires that any contractually required loan payment receivable in excess of the Company’s initial investment in the loans be accreted into interest income on a level-yield basis over the life of the loan. Loans accounted for under ASC 310-20 are placed on non-accrual status when past due in accordance with the Company’s non-accrual policy, and any accretion of discount or amortization of premium is discontinued. Acquired BBVAPR loans that were accounted for under the provisions of ASC 310-20 are removed from the acquired loan category at the end of the reporting period upon refinancing, renewal or normal re-underwriting.

The following tables present the aging of the recorded investment in gross acquired BBVAPR loans accounted for under ASC 310-20 as of March 31, 2017 and December 31, 2016, by class of loans:

	March 31, 2017
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Retail	$	-		$	-		$	103		$	103		$	30		$	-		$	133		$	-
Floor plan		911			-			209			1,120			-			1,198			2,318			-
		911			-			312			1,223			30			1,198			2,451			-
Other commercial and industrial
Retail		97			90			33			220			-			2,763			2,983			-
Floor plan		-			-			2			2			-			-			2			-
		97			90			35			222			-			2,763			2,985			-
		1,008			90			347			1,445			30			3,961			5,436			-
Consumer
Credit cards		536			235			546			1,317			-			27,087			28,404			-
Personal loans		24			22			48			94			-			2,503			2,597			-
		560			257			594			1,411			-			29,590			31,001			-
Auto		2,875			944			435			4,254			9			38,260			42,523			-
Total	$	4,443		$	1,291		$	1,376		$	7,110		$	39		$	71,811		$	78,960		$	-

	December 31, 2016
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Retail	$	33		$	-		$	110		$	143		$	-		$	-		$	143		$	-
Floor plan		-			-			219			219			929			1,242			2,390			-
		33			-			329			362			929			1,242			2,533			-
Other commercial and industrial
Retail		97			34			121			252			-			2,775			3,027			-
Floor plan		-			-			2			2			-			-			2			-
		97			34			123			254			-			2,775			3,029			-
		130			34			452			616			929			4,017			5,562			-
Consumer
Credit cards		736			369			708			1,813			-			28,280			30,093			-
Personal loans		48			14			120			182			-			2,587			2,769			-
		784			383			828			1,995			-			30,867			32,862			-
Auto		3,652			1,355			517			5,524			15			47,487			53,026			-
Total	$	4,566		$	1,772		$	1,797		$	8,135		$	944		$	82,371		$	91,450		$	-

Acquired BBVAPR Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy)

Acquired BBVAPR loans, except for credit cards, retail and commercial revolving lines of credits, floor plans and performing auto loans with FICO scores over 660 acquired at a premium, are accounted for by the Company in accordance with ASC 310-30.

The carrying amount corresponding to acquired BBVAPR loans with deteriorated credit quality, including those accounted under ASC 310-30 by analogy, in the statements of financial condition at March 31, 2017 and December 31, 2016 is as follows:

	March 31,			December 31,
		2017			2016
		(In thousands)
Contractual required payments receivable:	$	1,610,352		$	1,669,602
Less: Non-accretable discount		365,519			363,107
Cash expected to be collected		1,244,833			1,306,495
Less: Accretable yield		333,360			354,701
Carrying amount, gross		911,473			951,794
Less: allowance for loan and lease losses		34,930			31,056
Carrying amount, net	$	876,543		$	920,738

At March 31, 2017 and December 31, 2016, the Company had $66.1 million and $66.2 million, respectively, in loans granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of its acquired BBVAPR loans accounted for under ASC 310-30. These loans are primarily secured municipal general obligations and a $10.7 million participation in a loan to the Puerto Rico Housing Finance Authority ("PRHFA") legally required to be repaid from abandoned or unclaimed funds at financial institutions that revert to the government under a Puerto Rico escheat law. Such loan defaulted on an annual principal payment in the third quarter of 2016.

The following tables describe the accretable yield and non-accretable discount activity of acquired BBVAPR loans accounted for under ASC 310-30 for the quarters ended March 31, 2017, and 2016

	Quarter Ended March 31, 2017
	Mortgage			Commercial			Auto			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	292,115		$	50,366		$	8,538		$	3,682		$	354,701
Accretion		(7,890)			(4,981)			(2,147)			(602)			(15,620)
Change in expected cash flows		1			198			52			36			287
Transfer (to) from non-accretable discount		(7,409)			1,319			140			(58)			(6,008)
Balance at end of period	$	276,817		$	46,902		$	6,583		$	3,058		$	333,360
Non-Accretable Discount Activity:
Balance at beginning of period	$	305,615		$	16,965		$	22,407		$	18,120		$	363,107
Change in actual and expected losses		(3,031)			(843)			297			(19)			(3,596)
Transfer from (to) accretable yield		7,409			(1,319)			(140)			58			6,008
Balance at end of period	$	309,993		$	14,803		$	22,564		$	18,159		$	365,519

	Quarter Ended March 31, 2016
	Mortgage			Commercial			Auto			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	268,794		$	65,026		$	21,578		$	6,290		$	361,688
Accretion		(8,307)			(7,708)			(4,211)			(938)			(21,164)
Change in actual and expected losses		-			328			1			-			329
Transfer from (to) non-accretable discount		70			(388)			219			(91)			(190)
Balance at end of period	$	260,557		$	57,258		$	17,587		$	5,261		$	340,663
Non-Accretable Discount Activity:
Balance at beginning of period	$	374,772		$	18,545		$	22,039		$	18,834		$	434,190
Change in actual and expected losses		(4,547)			(785)			118			(190)			(5,404)
Transfer (to) from accretable yield		(70)			388			(219)			91			190
Balance at end of period	$	370,155		$	18,148		$	21,938		$	18,735		$	428,976

Acquired Eurobank Loans

The carrying amount of acquired Eurobank loans at March 31, 2017 and December 31, 2016 is as follows:

	March 31			December 31
	2017			2016
	(In thousands)
Contractual required payments receivable:	$	216,962		$	232,698
Less: Non-accretable discount		10,236			12,340
Cash expected to be collected		206,726			220,358
Less: Accretable yield		59,311			64,508
Carrying amount, gross		147,415			155,850
Less: Allowance for loan and lease losses		22,006			21,281
Carrying amount, net	$	125,409		$	134,569

The following tables describe the accretable yield and non-accretable discount activity of acquired Eurobank loans for the quarters ended March 31, 2017, and 2016:

	Quarter Ended March 31, 2017
	Loans Secured by 1-4 Family Residential Properties			Commercial			Construction & Development Secured by 1-4 Family Residential Properties			Leasing			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	45,839		$	16,475		$	2,194		$	-		$	-		$	64,508
Accretion		(1,904)			(4,510)			(38)			-			(158)			(6,610)
Change in expected cash flows		81			778			37			(143)			310			1,063
Transfer from (to) non-accretable discount		681			-			(322)			143			(152)			350
Balance at end of period	$	44,697		$	12,743		$	1,871		$	-		$	-		$	59,311
Non-Accretable Discount Activity:
Balance at beginning of period	$	8,441		$	3,880		$	11		$	-		$	8		$	12,340
Change in actual and expected losses		(334)			(1,409)			-			143			(154)			(1,754)
Transfer from (to) accretable yield		(681)			-			322			(143)			152			(350)
Balance at end of period	$	7,426		$	2,471		$	333		$	-		$	6		$	10,236

	Quarter Ended March 31, 2016
	Loans Secured by 1-4 Family Residential Properties			Commercial			Construction & Development Secured by 1-4 Family Residential Properties			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	51,954		$	26,970		$	2,255		$	3,213		$	84,392
Accretion		(2,266)			(4,095)			(14)			(1,185)			(7,560)
Change in actual and expected losses		984			11,093			(23)			(2,028)			10,026
Transfer from (to) non-accretable discount		115			(765)			19			-			(631)
Balance at end of period	$	50,787		$	33,203		$	2,237		$	-		$	86,227
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,869		$	-		$	-		$	8,287		$	21,156
Change in actual and expected losses		(51)			(765)			19			(8,287)			(9,084)
Transfer (to) from accretable yield		(115)			765			(19)			-			631
Balance at end of period	$	12,703		$	-		$	-		$	-		$	12,703

Non-accrual Loans

The following table presents the recorded investment in loans in non-accrual status by class of loans as of March 31, 2017 and December 31, 2016:

	March 31,			December 31,
	2017			2016
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year):
Up to the year 2002	$	3,079		$	3,336
Years 2003 and 2004		7,064			7,668
Year 2005		3,794			4,487
Year 2006		5,807			6,746
Years 2007, 2008 and 2009		10,256			11,526
Years 2010, 2011, 2012, 2013		9,070			10,089
Years 2014, 2015, 2016 and 2017		1,573			1,404
		40,643			45,256
Non-traditional		4,567			4,730
Loss mitigation program		18,239			20,744
		63,449			70,730
Commercial
Commercial secured by real estate
Institutional		254			-
Middle market		4,497			4,682
Retail		11,168			11,561
		15,919			16,243
Other commercial and industrial
Middle market		1,306			1,278
Retail		2,107			1,950
Floor plan		55			61
		3,468			3,289
		19,387			19,532
Consumer
Credit cards		456			525
Overdrafts		16			-
Personal lines of credit		37			32
Personal loans		1,418			1,420
Cash collateral personal loans		21			4
		1,948			1,981
Auto and leasing		8,709			9,052
Total non-accrual originated loans	$	93,493		$	101,295

	March 31,			December 31,
	2017			2016
	(In thousands)
Acquired BBVAPR loans accounted for under ASC 310-20
Commercial
Commercial secured by real estate
Retail	$	133		$	143
Floor plan		1,120			1,149
		1,253			1,292
Other commercial and industrial
Retail		33			121
Floor plan		2			2
		35			123
		1,288			1,415
Consumer
Credit cards		546			708
Personal loans		48			120
		594			828
Auto		466			552
Total non-accrual acquired BBVAPR loans accounted for under ASC 310-20		2,348			2,795
Total non-accrual loans	$	95,841		$	104,090

Loans accounted for under ASC 310-30 are excluded from the above table as they are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses or are accounted under the cost recovery method.

Delinquent residential mortgage loans insured or guaranteed under applicable FHA and VA programs are classified as non-performing loans when they become 90 days or more past due, but are not placed in non-accrual status until they become 18 months or more past due, since they are insured loans. Therefore, these loans are included as non-performing loans but excluded from non-accrual loans. In addition, these loans are excluded from the impairment analysis.

At March 31, 2017 and December 31, 2016, loans whose terms have been extended and which are classified as troubled-debt restructurings that are not included in non-accrual loans amounted to $99.1 million and $98.1 million, respectively, as they are performing under their new terms.

Impaired Loans

The Company evaluates all loans, some individually and others as homogeneous groups, for purposes of determining impairment. The total investment in impaired commercial loans that were individually evaluated for impairment was $59.6 million and $54.3 million at March 31, 2017 and December 31, 2016, respectively. The impairments on these commercial loans were measured based on the fair value of collateral or the present value of cash flows, including those identified as troubled-debt restructurings. The allowance for loan and lease losses for these impaired commercial loans amounted to $1.6 million and $1.8 million at March 31, 2017 and December 31, 2016, respectively. The total investment in impaired mortgage loans that were individually evaluated for impairment was $88.8 million and $91.6 million at March 31, 2017 and December 31, 2016, respectively. Impairment on mortgage loans assessed as troubled-debt restructurings was measured using the present value of cash flows. The allowance for loan losses for these impaired mortgage loans amounted to $8.2 million and $7.8 million at March 31, 2017 and December 31, 2016, respectively.

Originated and Other Loans and Leases Held for Investment

The Company’s recorded investment in commercial and mortgage loans categorized as originated and other loans and leases held for investment that were individually evaluated for impairment and the related allowance for loan and lease losses at March 31, 2017 and December 31, 2016 are as follows:

	March 31, 2017
	Unpaid			Recorded			Related
	Principal			Investment			Allowance			Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	14,091		$	12,362		$	1,475		12%
Residential impaired and troubled-debt restructuring		97,696			88,820			8,156		9%
Impaired loans with no specific allowance:
Commercial		52,682			46,345			N/A		0%
Total investment in impaired loans	$	164,469		$	147,527		$	9,631		7%

	December 31, 2016
	Unpaid			Recorded			Related
	Principal			Investment			Allowance			Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	13,183		$	11,698		$	1,626		14%
Residential impaired and troubled-debt restructuring		100,101			91,650			7,761		8%
Impaired loans with no specific allowance
Commercial		49,038			41,441			N/A		0%
Total investment in impaired loans	$	162,322		$	144,789		$	9,387		6%

Acquired BBVAPR Loans Accounted for under ASC 310-20 (Loans with revolving feature and/or acquired at a premium)

The Company’s recorded investment in acquired BBVAPR commercial loans accounted for under ASC 310-20 that were individually evaluated for impairment and the related allowance for loan and lease losses at March 31, 2017 and December 31, 2016 are as follows:

	March 31, 2017
	Unpaid			Recorded			Related
	Principal			Investment			Allowance			Coverage
	(In thousands)
Impaired loans with specific allowance
Commercial	$	936		$	911			149		16%
Impaired loans with no specific allowance
Commercial	$	-		$	-			N/A		0%
Total investment in impaired loans	$	936		$	911		$	149		16%
	December 31, 2016
	Unpaid			Recorded			Specific
	Principal			Investment			Allowance			Coverage
	(In thousands)
Impaired loans with specific allowance
Commercial	$	944		$	929			141		15%
Impaired loans with no specific allowance
Commercial	$	240		$	221			N/A		0%
Total investment in impaired loans	$	1,184		$	1,150		$	141		12%

Acquired BBVAPR Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy)

The Company’s recorded investment in acquired BBVAPR loan pools accounted for under ASC 310-30 that have recorded impairments and their related allowance for loan and lease losses at March 31, 2017 and December 31, 2016 are as follows:

	March 31, 2017
										Coverage
	Unpaid			Recorded						to Recorded
	Principal			Investment			Allowance			Investment
	(In thousands)
Impaired loan pools with specific allowance:
Mortgage	$	584,300		$	558,112		$	3,573		1%
Commercial		191,970			189,408			23,528		12%
Auto		79,022			71,495			7,829		11%
Total investment in impaired loan pools	$	855,292		$	819,015		$	34,930		4%

	December 31 , 2016
										Coverage
	Unpaid			Recorded						to Recorded
	Principal			Investment			Allowance			Investment
	(In thousands)
Impaired loan pools with specific allowance:
Mortgage	$	595,757		$	569,250		$	2,682		0%
Commercial		199,092			195,528			23,452		12%
Auto		92,797			85,676			4,922		6%
Total investment in impaired loan pools	$	887,646		$	850,454		$	31,056		4%

The tables above only present information with respect to acquired BBVAPR loan pools accounted for under ASC 310-30 if there is a recorded impairment to such loan pools and a specific allowance for loan losses.

Acquired Eurobank Loans

The Company’s recorded investment in acquired Eurobank loan pools that have recorded impairments and their related allowance for loan and lease losses as of March 31, 2017 and December 31, 2016 are as follows:

	March 31, 2017
										Coverage
	Unpaid			Recorded						to Recorded
	Principal			Investment			Allowance			Investment
	(In thousands)
Impaired loan pools with specific allowance:
Loans secured by 1-4 family residential properties	$	87,689		$	72,966		$	14,168		19%
Commercial		69,800			62,529			7,833		13%
Consumer		13			1,268			5		0%
Total investment in impaired loan pools	$	157,502		$	136,763		$	22,006		16%

	December 31, 2016
										Coverage
	Unpaid			Recorded			Specific			to Recorded
	Principal			Investment			Allowance			Investment
	(In thousands)
Impaired loan pools with specific allowance
Loans secured by 1-4 family residential properties	$	88,017		$	73,018		$	11,947		16%
Commercial		81,992			72,140			9,328		13%
Consumer		29			1,372			6		0%
Total investment in impaired loan pools	$	170,038		$	146,530		$	21,281		15%

The tables above only present information with respect to acquired Eurobank loan pools accounted for under ASC 310-30 if there is a recorded impairment to such loan pools and a specific allowance for loan losses.

The following table presents the interest recognized in commercial and mortgage loans that were individually evaluated for impairment, which excludes loans accounted for under ASC 310-30, for the quarters ended March 31, 2017 and 2016:

	Quarter Ended March 31,
	2017						2016
	Interest Income Recognized			Average Recorded Investment			Interest Income Recognized			Average Recorded Investment
	(In thousands)
Originated and other loans held for investment:
Impaired loans with specific allowance
Commercial	$	125		$	12,809		$	71		$	196,795
Residential troubled-debt restructuring		766			89,543			798			90,292
Impaired loans with no specific allowance
Commercial		532			43,895			270			33,626
		1,423			146,247			1,139			320,713
Acquired loans accounted for under ASC 310-20:
Impaired loans with specific allowance
Commercial		-			917			-			-
Impaired loans with no specific allowance
Commercial		-			-			-			467
Total interest income from impaired loans	$	1,423		$	147,164		$	1,139		$	321,180

Modifications

The following tables present the troubled-debt restructurings in all loan portfolios during the quarters ended March 31, 2017 and 2016.

	Quarter Ended March 31, 2017
	Number of contracts		Pre-Modification Outstanding Recorded Investment			Pre-Modification Weighted Average Rate		Pre-Modification Weighted Average Term (in Months)		Post-Modification Outstanding Recorded Investment			Post-Modification Weighted Average Rate		Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	32		$	4,004		6.53%		391		$	4,015		4.86%		387
Commercial	9			1,218		7.29%		55			1,219		5.93%		64
Consumer	25			392		10.94%		64			430		10.33%		74
Auto	3			45		8.90%		75			47		11.88%		39
	Quarter Ended March 31, 2016
	Number of contracts		Pre-Modification Outstanding Recorded Investment			Pre-Modification Weighted Average Rate		Pre-Modification Weighted Average Term (in Months)		Post-Modification Outstanding Recorded Investment			Post-Modification Weighted Average Rate		Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	33		$	3,957		6.03%		361		$	4,854		4.83%		493
Commercial	2			655		6.81%		41			656		6.71%		36
Consumer	21			192		14.28%		75			231		11.15%		72

The following table presents troubled-debt restructurings for which there was a payment default during the twelve month periods ended March 31, 2017 and 2016:

	Twelve Month Period Ended, March 31,
	2017						2016
	Number of Contracts		Recorded Investment				Number of Contracts		Recorded Investment
	(Dollars in thousands)
Mortgage	14		$	2,051			31		$	3,732
Commercial	1		$	50			-		$	-
Consumer	15		$	188			3		$	77
Auto	-		$	-			1		$	17

Credit Quality Indicators

The Company categorizes originated and other loans and acquired loans accounted for under ASC 310-20 into risk categories based on relevant information about the ability of borrowers to service their debt, such as economic conditions, portfolio risk characteristics, prior loss experience, and the results of periodic credit reviews of individual loans.

The Company uses the following definitions for risk ratings:

Pass: Loans classified as “pass” have a well-defined primary source of repayment very likely to be sufficient, with no apparent risk, strong financial position, minimal operating risk, profitability, liquidity and capitalization better than industry standards.

Special Mention: Loans classified as “special mention” have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as “substandard” are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as “doubtful” have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, questionable and improbable.

Loss: Loans classified as “loss” are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be effected in the future.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

As of March 31, 2017 and December 31, 2016, and based on the most recent analysis performed, the risk category of gross originated and other loans and BBVAPR acquired loans accounted for under ASC 310-20 subject to risk rating by class of loans is as follows:

	March 31, 2017
	Risk Ratings
																Individually
	Balance						Special									Measured for
	Outstanding			Pass			Mention			Substandard			Doubtful			Impairment
	(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate	$	228,306		$	213,576		$	14,730		$	-		$	-		$	-
Institutional		47,807			35,458			10,788			-			-			1,561
Middle market		228,170			189,767			8,151			454			-			29,798
Retail		245,275			218,160			6,844			3,708			-			16,563
Floor plan		2,950			2,950			-			-			-			-
Real estate		16,090			16,090			-			-			-			-
		768,598			676,001			40,513			4,162			-			47,922
Other commercial and industrial:
Corporate		135,056			135,056			-			-			-			-
Institutional		154,965			154,965			-			-			-			-
Middle market		78,208			61,094			9,832			235			-			7,047
Retail		82,888			77,716			720			714			-			3,738
Floor plan		33,997			31,259			2,683			55			-			-
		485,114			460,090			13,235			1,004			-			10,785
Total		1,253,712			1,136,091			53,748			5,166			-			58,707
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Retail		133			-			-			133			-			-
Floor plan		2,318			880			318			209			-			911
		2,451			880			318			342			-			911
Other commercial and industrial:
Retail		2,983			2,977			-			6			-			-
Floor plan		2			-			-			2			-			-
		2,985			2,977			-			8			-			-
Total		5,436			3,857			318			350			-			911
Total	$	1,259,148		$	1,139,948		$	54,066		$	5,516		$	-		$	59,618

	December 31, 2016
	Risk Ratings
																Individually
	Balance						Special									Measured for
	Outstanding			Pass			Mention			Substandard			Doubtful			Impairment
	(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate	$	242,770		$	226,768		$	16,002		$	-		$	-		$	-
Institutional		26,800			16,067			9,090			-			-			1,643
Middle market		234,981			194,913			9,437			514			-			30,117
Retail		249,728			221,687			7,860			4,318			-			15,863
Floor plan		2,989			2,989			-			-			-			-
Real estate		16,395			16,395			-			-			-			-
		773,663			678,819			42,389			4,832			-			47,623
Other commercial and industrial:
Corporate		136,438			136,438			-			-			-			-
Institutional		180,285			180,185			100			-			-			-
Middle market		81,633			63,556			16,150			149			-			1,778
Retail		73,705			68,529			731			740			-			3,705
Floor plan		32,142			29,267			2,814			28			-			33
		504,203			477,975			19,795			917			-			5,516
Total		1,277,866			1,156,794			62,184			5,749			-			53,139
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Retail		143			-			-			143			-			-
Floor plan		2,390			905			337			-			-			1,148
		2,533			905			337			143			-			1,148
Other commercial and industrial:
Retail		3,027			3,014			-			13			-			-
Floor plan		2			-			-			-			-			2
		3,029			3,014			-			13			-			2
Total		5,562			3,919			337			156			-			1,150
Total	$	1,283,428		$	1,160,713		$	62,521		$	5,905		$	-		$	54,289

For residential and consumer loan classes, the Company evaluates credit quality based on the delinquency status of the loan. As of March 31, 2017 and December 31, 2016, and based on the most recent analysis performed, the risk category of gross originated and other loans and acquired BBVAPR loans accounted for under ASC 310-20 not subject to risk rating by class of loans is as follows:

	March 31, 2017
	Delinquency
																						Individually
	Balance																					Measured for
	Outstanding			0-29 days			30-59 days			60-89 days			90-119 days			120-364 days			365+ days			Impairment
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year)
Up to the year 2002	$	48,795		$	43,628		$	-		$	1,407		$	477		$	1,188		$	1,334		$	761
Years 2003 and 2004		88,452			76,647			-			3,834			861			3,128			2,295			1,687
Year 2005		47,908			42,078			-			1,643			580			1,009			1,560			1,038
Year 2006		66,969			56,976			-			2,094			162			2,122			3,139			2,476
Years 2007, 2008 and 2009		74,705			60,651			-			1,681			568			2,464			6,015			3,326
Years 2010, 2011, 2012 2013		137,084			126,278			90			1,483			589			1,824			3,217			3,603
Years 2014, 2015, 2016 and 2017		111,398			109,594			-			232			-			811			761			-
		575,311			515,852			90			12,374			3,237			12,546			18,321			12,891
Non-traditional		21,342			16,397			-			378			299			1,195			3,073			-
Loss mitigation program		102,898			18,042			1,618			1,573			994			1,033			3,709			75,929
		699,551			550,291			1,708			14,325			4,530			14,774			25,103			88,820
Home equity secured personal loans		339			339			-			-			-			-			-			-
GNMA's buy-back option program		9,973			-			-			-			1,991			4,153			3,829			-
		709,863			550,630			1,708			14,325			6,521			18,927			28,932			88,820
Consumer
Credit cards		26,940			25,596			641			247			145			311			-			-
Overdrafts		236			192			12			16			3			13			-			-
Unsecured personal lines of credit		2,307			2,202			25			44			-			11			25			-
Unsecured personal loans		255,544			249,982			3,030			1,701			803			28			-			-
Cash collateral personal loans		15,385			15,056			275			33			21			-			-			-
		300,412			293,028			3,983			2,041			972			363			25			-
Auto and Leasing		786,606			716,985			47,588			14,324			5,798			1,911			-			-
		1,796,881			1,560,643			53,279			30,690			13,291			21,201			28,957			88,820
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		28,404			27,087			536			235			232			314			-			-
Personal loans		2,597			2,503			24			22			1			46			1			-
		31,001			29,590			560			257			233			360			1			-
Auto		42,523			38,268			2,875			944			347			89			-			-
		73,524			67,858			3,435			1,201			580			449			1			-
Total	$	1,870,405		$	1,628,501		$	56,714		$	31,891		$	13,871		$	21,650		$	28,958		$	88,820

	December 31, 2016
	Delinquency
																						Individually
	Balance																					Measured for
	Outstanding			0-29 days			30-59 days			60-89 days			90-119 days			120-364 days			365+ days			Impairment
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year)
Up to the year 2002	$	50,285		$	44,248		$	-		$	2,095		$	368		$	1,315		$	1,552		$	707
Years 2003 and 2004		90,707			78,501			-			3,712			1,767			2,675			2,100			1,952
Year 2005		50,009			43,177			-			1,952			561			1,024			2,181			1,114
Year 2006		69,300			57,271			82			2,397			353			2,210			3,410			3,577
Years 2007, 2008 and 2009		76,729			61,547			83			1,439			865			2,330			6,459			4,006
Years 2010, 2011, 2012 2013		139,860			127,375			60			1,451			1,459			1,667			3,584			4,264
Year 2014, 2015 and 2016		108,199			106,672			-			123			386			210			761			47
		585,089			518,791			225			13,169			5,759			11,431			20,047			15,667
Non-traditional		22,859			17,631			-			498			366			1,263			3,101			-
Loss mitigation program		103,528			17,814			2,304			1,681			388			1,599			3,759			75,983
		711,476			554,236			2,529			15,348			6,513			14,293			26,907			91,650
Home equity secured personal loans		337			337			-			-			-			-			-			-
GNMA's buy-back option program		9,681			(1)			-			-			2,441			3,141			4,100			-
		721,494			554,572			2,529			15,348			8,954			17,434			31,007			91,650
Consumer
Credit cards		26,358			25,023			527			283			191			334			-			-
Overdrafts		207			174			16			12			1			4			-			-
Unsecured personal lines of credit		2,404			2,327			41			4			3			25			4			-
Unsecured personal loans		246,272			241,227			2,474			1,489			1,074			8			-			-
Cash collateral personal loans		15,274			15,010			240			20			4			-			-			-
		290,515			283,761			3,298			1,808			1,273			371			4			-
Auto and Leasing		756,395			686,493			42,714			19,014			6,253			1,921			-			-
		1,768,404			1,524,826			48,541			36,170			16,480			19,726			31,011			91,650
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		30,093			28,281			736			369			227			480			-			-
Personal loans		2,769			2,587			48			14			21			99			-			-
		32,862			30,868			784			383			248			579			-			-
Auto		53,026			47,503			3,652			1,355			415			101			-			-
		85,888			78,371			4,436			1,738			663			680			-			-
Total	$	1,854,292		$	1,603,197		$	52,977		$	37,908		$	17,143		$	20,406		$	31,011		$	91,650

X

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e5066-111524

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.3,4)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e5162-111524

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e5074-111524

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 7
-Article 9

+ Details

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Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- References

No definition available.

+ Details

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Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration