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Allowance for Loan and Lease Losses | 6 Months Ended
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Jun. 30, 2017
Allowance for loan and lease losses [Abstract] |
Allowance For Credit Losses Text Block | NOTE 5 – ALLOWANCE FOR LOAN AND LEASE LOSSES The composition of the Company’s allowance for loan and lease losses at June 30, 2017 and December 31, 2016 was as follows:
| June 30, |  | December 31,
| 2017 |  | 2016
| (In thousands)
Allowance for loans and lease losses: |  |  |  |  |
Originated and other loans and leases held for investment: |  |  |  |  |
Mortgage | $ | 18,664 |  | $ | 17,344
Commercial |  | 17,279 |  |  | 8,995
Consumer |  | 14,981 |  |  | 13,067
Auto and leasing |  | 18,742 |  |  | 19,463
Unallocated |  | - |  |  | 431
Total allowance for originated and other loans and lease losses |  | 69,666 |  |  | 59,300
Acquired BBVAPR loans: |  |  |  |  |
Accounted for under ASC 310-20 (Loans with revolving feature and/or |  |  |  |  |
acquired at a premium) |  |  |  |  |
Commercial |  | 41 |  |  | 169
Consumer |  | 2,623 |  |  | 3,028
Auto |  | 684 |  |  | 1,103
|  | 3,348 |  |  | 4,300
Accounted for under ASC 310-30 (Loans acquired with deteriorated |  |  |  |  |
credit quality, including those by analogy) |  |  |  |  |
Mortgage |  | 4,141 |  |  | 2,682
Commercial |  | 25,614 |  |  | 23,452
Auto |  | 7,739 |  |  | 4,922
|  | 37,494 |  |  | 31,056
Total allowance for acquired BBVAPR loans and lease losses |  | 40,842 |  |  | 35,356
Acquired Eurobank loans: |  |  |  |  |
Loans secured by 1-4 family residential properties |  | 13,651 |  |  | 11,947
Commercial |  | 8,131 |  |  | 9,328
Consumer |  | 5 |  |  | 6
Total allowance for acquired Eurobank loan and lease losses |  | 21,787 |  |  | 21,281
Total allowance for loan and lease losses | $ | 132,295 |  | $ | 115,937
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 invest ment portfolio by segment for the periods indicated:
| Quarter Ended June 30, 2017
| 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 period | $ | 18,578 |  | $ | 9,888 |  | $ | 13,394 |  | $ | 18,621 |  | $ | 2 |  | $ | 60,483
Charge-offs |  | (2,162) |  |  | (4,841) |  |  | (4,012) |  |  | (7,775) |  |  | - |  |  | (18,790)
Recoveries |  | 63 |  |  | 136 |  |  | 780 |  |  | 4,176 |  |  | - |  |  | 5,155
Provision for originated and other loans and lease losses |  | 2,185 |  |  | 12,096 |  |  | 4,819 |  |  | 3,720 |  |  | (2) |  |  | 22,818
Balance at end of period | $ | 18,664 |  | $ | 17,279 |  | $ | 14,981 |  | $ | 18,742 |  | $ | - |  | $ | 69,666
| Six-Month Period Ended June 30, 2017
| 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 period | $ | 17,344 |  | $ | 8,995 |  | $ | 13,067 |  | $ | 19,463 |  | $ | 431 |  | $ | 59,300
Charge-offs |  | (4,541) |  |  | (5,697) |  |  | (7,368) |  |  | (15,339) |  |  | - |  |  | (32,945)
Recoveries |  | 119 |  |  | 226 |  |  | 945 |  |  | 7,470 |  |  | - |  |  | 8,760
Provision for originated and other loans and lease losses |  | 5,742 |  |  | 13,755 |  |  | 8,337 |  |  | 7,148 |  |  | (431) |  |  | 34,551
Balance at end of period | $ | 18,664 |  | $ | 17,279 |  | $ | 14,981 |  | $ | 18,742 |  | $ | - |  | $ | 69,666
| June 30, 2017
| 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 | $ | 8,630 |  | $ | 1,940 |  | $ | - |  | $ | - |  | $ | - |  | $ | 10,570
Collectively evaluated for impairment |  | 10,034 |  |  | 15,339 |  |  | 14,981 |  |  | 18,742 |  |  | - |  |  | 59,096
Total ending allowance balance | $ | 18,664 |  | $ | 17,279 |  | $ | 14,981 |  | $ | 18,742 |  | $ | - |  | $ | 69,666
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 87,042 |  | $ | 57,328 |  | $ | - |  | $ | - |  | $ | - |  | $ | 144,370
Collectively evaluated for impairment |  | 612,248 |  |  | 1,213,516 |  |  | 314,267 |  |  | 807,204 |  |  | - |  |  | 2,947,235
Total ending loan balance | $ | 699,290 |  | $ | 1,270,844 |  | $ | 314,267 |  | $ | 807,204 |  | $ | - |  | $ | 3,091,605
| Quarter Ended June 30, 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 period | $ | 18,784 |  | $ | 64,206 |  | $ | 11,414 |  | $ | 18,716 |  | $ | 118 |  | $ | 113,238
Charge-offs |  | (1,374) |  |  | (833) |  |  | (2,811) |  |  | (8,100) |  |  | - |  |  | (13,118)
Recoveries |  | 36 |  |  | 228 |  |  | 133 |  |  | 3,243 |  |  | - |  |  | 3,640
Provision (recapture) for originated and other loan and lease losses |  | 1,091 |  |  | (457) |  |  | 3,035 |  |  | 5,400 |  |  | (17) |  |  | 9,052
Balance at end of period | $ | 18,537 |  | $ | 63,144 |  | $ | 11,771 |  | $ | 19,259 |  | $ | 101 |  | $ | 112,812
| Six-Month Period Ended June 30, 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 period | $ | 18,352 |  | $ | 64,791 |  | $ | 11,197 |  | $ | 18,261 |  | $ | 25 |  | $ | 112,626
Charge-offs |  | (3,036) |  |  | (1,844) |  |  | (5,138) |  |  | (16,462) |  |  | - |  |  | (26,480)
Recoveries |  | 181 |  |  | 316 |  |  | 235 |  |  | 6,222 |  |  | - |  |  | 6,954
Provision (recapture) for originated and other loan and lease losses |  | 3,040 |  |  | (119) |  |  | 5,477 |  |  | 11,238 |  |  | 76 |  |  | 19,712
Balance at end of period | $ | 18,537 |  | $ | 63,144 |  | $ | 11,771 |  | $ | 19,259 |  | $ | 101 |  | $ | 112,812
| 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
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 accounted for under ASC 310-20, for the periods indicated:
| Quarter Ended June 30, 2017
| 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 period | $ | 183 |  | $ | 2,591 |  | $ | 841 |  |  | $ | 3,615
Charge-offs |  | (126) |  |  | (771) |  |  | (205) |  |  |  | (1,102)
Recoveries |  | 2 |  |  | 295 |  |  | 597 |  |  |  | 894
Provision (recapture) for acquired BBVAPR loan and lease losses accounted for under ASC 310-20 |  | (18) |  |  | 508 |  |  | (549) |  |  |  | (59)
Balance at end of period | $ | 41 |  | $ | 2,623 |  | $ | 684 |  |  | $ | 3,348
| Six-Month Period Ended June 30, 2017
| 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 | $ | 169 |  | $ | 3,028 |  | $ | 1,103 |  | $ | 4,300
Charge-offs |  | (132) |  |  | (1,656) |  |  | (483) |  |  | (2,271)
Recoveries |  | 3 |  |  | 359 |  |  | 1,049 |  |  | 1,411
Provision (recapture) for acquired BBVAPR loan and lease losses accounted for under ASC 310-20 |  | 1 |  |  | 892 |  |  | (985) |  |  | (92)
Balance at end of year | $ | 41 |  | $ | 2,623 |  | $ | 684 |  | $ | 3,348
| June 30, 2017
| 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 |  | 41 |  |  | 2,623 |  |  | 684 |  |  | 3,348
Total ending allowance balance | $ | 41 |  | $ | 2,623 |  | $ | 684 |  | $ | 3,348
Loans: |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 761 |  | $ | - |  | $ | - |  | $ | 761
Collectively evaluated for impairment |  | 4,589 |  |  | 30,233 |  |  | 33,661 |  |  | 68,483
Total ending loan balance | $ | 5,350 |  | $ | 30,233 |  | $ | 33,661 |  | $ | 69,244
| Quarter Ended June 30, 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 period | $ | 23 |  | $ | 3,243 |  | $ | 1,727 |  | $ | 4,993
Charge-offs |  | (12) |  |  | (1,013) |  |  | (571) |  |  | (1,596)
Recoveries |  | 8 |  |  | 88 |  |  | 446 |  |  | 542
Provision (recapture) for acquired loan and lease losses accounted for under ASC 310-20 |  | 2 |  |  | 684 |  |  | (138) |  |  | 548
Balance at end of period | $ | 21 |  | $ | 3,002 |  | $ | 1,464 |  | $ | 4,487
| Six-Month Period Ended June 30, 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 |  | (19) |  |  | (1,825) |  |  | (1,308) |  |  | (3,152)
Recoveries |  | 40 |  |  | 169 |  |  | 1,044 |  |  | 1,253
Provision (recapture) for acquired loan and lease losses accounted for under ASC 310-20 |  | (26) |  |  | 1,229 |  |  | (359) |  |  | 844
Balance at end of period | $ | 21 |  | $ | 3,002 |  | $ | 1,464 |  | $ | 4,487
| 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
Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy) 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 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:
| Quarter Ended June 30, 2017
| Mortgage |  | Commercial |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 3,573 |  | $ | 23,528 |  | $ | 7,829 |  | $ | 34,930
Provision for BBVAPR loans and lease losses accounted for under ASC 310-30 |  | 630 |  |  | 2,735 |  |  | - |  |  | 3,365
Allowance de-recognition |  | (62) |  |  | (649) |  |  | (90) |  |  | (801)
Balance at end of period | $ | 4,141 |  | $ | 25,614 |  | $ | 7,739 |  | $ | 37,494
| Six-Month Period Ended June 30, 2017
| Mortgage |  | Commercial |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 2,682 |  | $ | 23,452 |  | $ | 4,922 |  | $ | 31,056
Provision (recapture) for BBVAPR loans and lease losses accounted for under ASC 310-30 |  | 1,552 |  |  | 2,958 |  |  | 3,186 |  |  | 7,696
Allowance de-recognition |  | (93) |  |  | (796) |  |  | (369) |  |  | (1,258)
Balance at end of period | $ | 4,141 |  | $ | 25,614 |  | $ | 7,739 |  | $ | 37,494
| Quarter Ended June 30, 2016
| Mortgage |  | Commercial |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 1,762 |  | $ | 20,430 |  | $ | 5,555 |  | $ | 27,747
Provision (recapture) for acquired BBVAPR loans and lease losses accounted for under ASC 310-30 |  | (163) |  |  | 3,977 |  |  | - |  |  | 3,814
Loan pools fully charged-off |  | (14) |  |  | - |  |  | (202) |  |  | (216)
Allowance de-recognition |  | - |  |  | (8,544) |  |  | - |  |  | (8,544)
Balance at end of period | $ | 1,585 |  | $ | 15,863 |  | $ | 5,353 |  | $ | 22,801
| Six-Month Period Ended June 30, 2016
| Mortgage |  | Commercial |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 1,678 |  | $ | 21,245 |  | $ | 2,862 |  | $ | 25,785
Provision for acquired BBVAPR loans and lease losses accounted for under ASC 310-30 |  | (79) |  |  | 3,228 |  |  | 2,693 |  |  | 5,842
Loan pools fully charged-off |  | (14) |  |  | (66) |  |  | (202) |  |  | (282)
Allowance de-recogntion |  | - |  |  | (8,544) |  |  | - |  |  | (8,544)
Balance at end of period | $ | 1,585 |  | $ | 15,863 |  | $ | 5,353 |  | $ | 22,801
Allowance for Acquired Eurobank Loan Losses The changes in the allowance for loan and lease losses on acquired Eurobank loans for the quarters and six-month periods ended June 30, 2017 and 2016 were as follows:
| Quarter Ended June 30, 2017
| Loans Secured by 1-4 Family Residential Properties |  | Commercial |  | Consumer |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired Eurobank loans: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 14,168 |  | $ | 7,833 |  | $ | 5 |  | $ | 22,006
Provision for (recapture) acquired Eurobank loans and lease losses, net |  | 474 |  |  | (62) |  |  | - |  |  | 412
Allowance de-recognition |  | (991) |  |  | 360 |  |  | - |  |  | (631)
Balance at end of period | $ | 13,651 |  | $ | 8,131 |  | $ | 5 |  | $ | 21,787
| Six-Month Period Ended June 30, 2017
| Loans Secured by 1-4 Family Residential Properties |  | Commercial |  | Consumer |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired Eurobank loans: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 11,947 |  | $ | 9,328 |  | $ | 6 |  | $ | 21,281
Provision for (recapture) acquired Eurobank loans and lease losses, net |  | 2,872 |  | $ | (840) |  |  | - |  |  | 2,032
Allowance de-recognition |  | (1,168) |  |  | (357) |  |  | (1) |  |  | (1,526)
Balance at end of period | $ | 13,651 |  | $ | 8,131 |  | $ | 5 |  | $ | 21,787
| Quarter Ended June 30, 2016
| Loans secured by 1-4 Family Residential Properties |  | Commercial |  | Consumer |  | Total
| (In thousands)
Allowance for loan and lease losses for acquired Eurobank loans: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 23,961 |  | $ | 68,089 |  | $ | 243 |  | $ | 92,293
Provision for (recapture) acquired Eurobank loan and lease losses, net |  | 237 |  |  | 801 |  |  | (7) |  |  | 1,031
Loan pools fully charged-off |  | 951 |  |  | - |  |  | - |  |  | 951
Allowance de-recognition |  | (14,133) |  |  | (57,794) |  |  | (232) |  |  | (72,159)
Balance at end of period | $ | 11,016 |  | $ | 11,096 |  | $ | 4 |  | $ | 22,116
| Six-Month Period Ended June 30, 2016
| Loans secured by 1-4 Family Residential Properties |  | Commercial |  | Consumer |  | Total
| (In thousands)
Allowance for loan and lease losses for Eurobank loans: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 22,570 |  | $ | 67,365 |  | $ | 243 |  | $ | 90,178
Provision for (recapture) acquired Eurobank loan and lease losses, net |  | 184 |  |  | 1,659 |  |  | (7) |  |  | 1,836
FDIC shared-loss portion of provision for covered loan and lease losses, net |  | 2,395 |  |  | - |  |  | - |  |  | 2,395
Loan pools fully charged-off |  | - |  |  | (134) |  |  | - |  |  | (134)
Allowance de-recognition |  | (14,133) |  |  | (57,794) |  |  | (232) |  |  | (72,159)
Balance at end of period | $ | 11,016 |  | $ | 11,096 |  | $ | 4 |  | $ | 22,116

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