10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

       EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number 001-12647

OFG Bancorp

Incorporated in the Commonwealth of Puerto Rico, IRS Employer Identification No. 66-0538893

Principal Executive Offices: 

254 Muñoz Rivera Avenue

San Juan, Puerto Rico 00918

Telephone Number: (787) 771-6800

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No¨ 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x  No ¨ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ý               Accelerated Filer o                Non-Accelerated Filer ¨                 Smaller Reporting Company ¨                                                                                            (Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨  No x 

Number of shares outstanding of the registrant’s common stock, as of thelatest practicable date:

 44,678,475 common shares ($1.00 par value per share) outstanding as of October 31, 2014

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION			Page
Item 1.	Financial Statements
	Unaudited Consolidated Statements of Financial Condition		1
	Unaudited Consolidated Statements of Operations		2
	Unaudited Consolidated Statements of Comprehensive Income		3
	Unaudited Consolidated Statements of Changes in Stockholders’ Equity		4
	Unaudited Consolidated Statements of Cash Flows		5
	Notes to Unaudited Consolidated Financial Statements
		Note 1 – Organization, Consolidation and Basis of Presentation	7
		Note 2 – Restricted Cash	8
		Note 3 – Investment Securities	8
		Note 4 – Loans	15
		Note 5 – Allowance for Loan and Lease Losses	37
		Note 6 – FDIC Indemnification Asset and True-Up Payment Obligation	44
		Note 7 – Derivatives	46
		Note 8 – Accrued Interest Receivable and Other Assets	48
		Note 9 – Deposits and Related Interest	49
		Note 10 – Borrowings	51
		Note 11 – Offsetting of  Financial Assets and Liabilities	54
		Note 12 – Related Party Transactions	55
		Note 13 – Income Taxes	56
		Note 14 – Stockholders’ Equity	57
		Note 15 – Accumulated Other Comprehensive Income	60
		Note 16 – Earnings per Common Share	62
		Note 17 – Guarantees	63
	Note 18 – Commitments and Contingencies		65
	Note 19 – Fair Value of Financial Instruments		67
	Note 20 – Business Segments		76
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		79
		Critical Accounting Policies and  Estimates	80
		Overview of Financial Performance	81
		Selected Financial Data	81
		Analysis of Results of Operations	87
		Analysis of Financial Condition	100
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		125
Item 4.	Controls and Procedures		129
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings		130
Item 1A.	Risk Factors		130
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		132
Item 3.	Default upon Senior Securities		132
Item 4.	Mine Safety Disclosures		132
Item 5.	Other Information		132
Item 6.	Exhibits		132
SIGNATURES			134
EXHIBIT INDEX

FORWARD-LOOKING STATEMENTS

The information included in this quarterly report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may relate to the financial condition, results of operations, plans, objectives, future performance and business of OFG Bancorp (“we,” “our,” “us” or the “Company”), including, but not limited to, statements with respect to the adequacy of the allowance for loan losses, delinquency trends, market risk and the impact of interest rate changes, capital markets conditions, capital adequacy and liquidity, and the effect of legal proceedings and new accounting standards on the Company’s financial condition and results of operations. All statements contained herein that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” “project” and similar expressions and future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may,” or similar expressions are generally intended to identify forward-looking statements.

These statements are not guarantees of future performance and involve certain risks, uncertainties, estimates and assumptions by management that are difficult to predict. Various factors, some of which by their nature are beyond the Company’s control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. Factors that might cause such a difference include, but are not limited to:

·the rate of growth in the economy and employment levels, as well as general business and economic conditions;

·changes in interest rates, as well as the magnitude of such changes;

·the fiscal and monetary policies of the federal government and its agencies;

·a credit default or potential restructuring by the Commonwealth of Puerto Rico or any of its agencies, municipalities or instrumentalities;

·changes in federal bank regulatory and supervisory policies, including required levels of capital;

·the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) on the

Company’s businesses, business practices and cost of operations;

·the relative strength or weakness of the consumer and commercial credit sectors and of the real estate market in

Puerto Rico;

·the performance of the securities markets;

·competition in the financial services industry;

·additional Federal Deposit Insurance Corporation (“FDIC”) assessments; and

·possible legislative, tax or regulatory changes.

Other possible events or factors that could cause results or performance to differ materially from those expressed in these forward-looking statements include the following: negative economic conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the level of non-performing assets, charge-offs and provision expense; changes in interest rates and market liquidity which may reduce interest margins, impact funding sources and affect the ability to originate and distribute financial products in the primary and secondary markets; adverse movements and volatility in debt and equity capital markets; changes in market rates and prices which may adversely impact the value of financial assets and liabilities; liabilities resulting from litigation and regulatory investigations; changes in accounting standards, rules and interpretations; increased competition; the Company’s ability to grow its core businesses; decisions to downsize, sell or close units or otherwise change the Company’s business mix; and management’s ability to identify and manage these and other risks.

All forward-looking statements included in this quarterly report on Form 10-Q are based upon information available to the Company as of the date of this report, and other than as required by law, including the requirements of applicable securities laws, the Company assumes no obligation to update or revise any such forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

ITEM 1.     FINANCIAL STATEMENTS

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

AS OF SEPTEMBER 30, 2014 AND DECEMBER 31, 2013

	September 30,		December 31,
	2014		2013
	(In thousands)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	663,462	$	614,302
Money market investments		7,777		6,967
Total cash and cash equivalents		671,239		621,269
Restricted cash		32,907		82,199
Securities purchased under agreements to resell		-		60,000
Investments:
Trading securities, at fair value, with amortized cost of $2,419 (December 31, 2013 - $2,448)		1,687		1,869
Investment securities available-for-sale, at fair value, with amortized cost of $1,249,769 (December 31, 2013 - $1,575,043)		1,273,879		1,588,425
Investment securities held-to-maturity, at amortized cost, with fair value of $144,217		144,305		-
Federal Home Loan Bank (FHLB) stock, at cost		21,189		24,450
Other investments		65		65
Total investments		1,441,125		1,614,809
Loans:
Mortgage loans held-for-sale, at lower of cost or fair value		16,757		46,529
Non-covered loans, net of allowance for loan and lease losses of $64,859 (December 31, 2013 - $54,298)		4,528,452		4,615,929
Covered loans, net of allowance for loan and lease losses of $62,227 (December 31, 2013 - $52,729)		311,693		356,961
Total loans, net		4,856,902		5,019,419
Other assets:
FDIC indemnification asset		120,619		189,240
Foreclosed real estate covered under shared-loss agreements with the FDIC		49,814		33,209
Foreclosed real estate not covered under shared-loss agreements with the FDIC		50,750		56,815
Accrued interest receivable		19,665		18,734
Deferred tax asset, net		121,217		137,564
Premises and equipment, net		82,099		82,903
Customers' liability on acceptances		21,077		23,042
Servicing assets		13,986		13,801
Derivative assets		8,445		20,502
Goodwill		86,069		86,069
Other assets		97,425		98,440
Total assets	$	7,673,339	$	8,158,015
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand deposits	$	2,132,073		2,138,005
Savings accounts		1,263,115		1,194,567
Time deposits		1,673,987		2,050,693
Total deposits		5,069,175		5,383,265
Borrowings:
Securities sold under agreements to repurchase		1,012,228		1,267,618
Advances from FHLB		334,787		336,143
Subordinated capital notes		101,190		100,010
Other borrowings		3,872		3,663
Total borrowings		1,452,077		1,707,434
Other liabilities:
Securities purchased but not yet received		30,057		-
Derivative liabilities		11,414		14,937
Acceptances executed and outstanding		21,077		23,042
Accrued expenses and other liabilities		159,541		144,424
Total liabilities		6,743,341		7,273,102
Commitments and contingencies (See Note 18)
Stockholders’ equity:
Preferred stock; 10,000,000 shares authorized;
1,340,000 shares of Series A, 1,380,000 shares of Series B, and 960,000 shares of Series D
issued and outstanding, (December 31, 2013 - 1,340,000; 1,380,000; and 960,000) $25 liquidation value		92,000		92,000
84,000 shares of Series C issued and outstanding (December 31, 2013 - 84,000); $1,000 liquidation value		84,000		84,000
Common stock, $1 par value; 100,000,000 shares authorized; 52,761,295 shares issued:
45,059,988 shares outstanding (December 31, 2013 - 52,707,023; 45,676,922)		52,761		52,707
Additional paid-in capital		539,522		538,071
Legal surplus		68,437		61,957
Retained earnings		170,519		133,629
Treasury stock, at cost, 7,701,307 shares (December 31, 2013 - 7,030,101 shares)		(90,652)		(80,642)
Accumulated other comprehensive income, net of tax of $1,867 (December 31, 2013 -$831)		13,411		3,191
Total stockholders’ equity		929,998		884,913
Total liabilities and stockholders’ equity	$	7,673,339	$	8,158,015
See notes to unaudited consolidated financial statements.

1

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE QUARTERS AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2014 AND 2013

	Quarter Ended September 30,
						Nine-Month Period Ended September 30,
	2014		2013			2014		2013
	(In thousands, except per share data)
Interest income:
Non-covered loans	$	87,662	$	87,655	$	260,969	$	259,567
Covered loans		20,886		21,657		69,153		65,884
Total interest income from loans		108,548		109,312		330,122		325,451
Mortgage-backed securities		10,842		9,662		35,243		29,559
Investment securities and other		911		2,127		3,910		6,564
Total interest income		120,301		121,101		369,275		361,574
Interest expense:
Deposits		7,661		11,334		25,804		30,757
Securities sold under agreements to repurchase		7,453		7,211		22,238		21,569
Advances from FHLB and other borrowings		2,314		2,321		6,896		6,275
Subordinated capital notes		1,002		1,144		2,990		3,973
Total interest expense		18,430		22,010		57,928		62,574
Net interest income		101,871		99,091		311,347		299,000
Provision for non-covered loan and lease losses		16,142		9,900		39,424		55,343
Provision for covered loan and lease losses, net		1,115		3,074		4,339		4,957
Total provision for loan and lease losses		17,257		12,974		43,763		60,300
Net interest income after provision for loan and lease losses		84,614		86,117		267,584		238,700
Non-interest income:
Banking service revenue		9,753		12,146		30,305		36,491
Wealth management revenue		7,113		7,394		21,316		23,084
Mortgage banking activities		2,097		2,334		5,346		9,299
Total banking and financial service revenues		18,963		21,874		56,967		68,874
FDIC shared-loss expense, net:
FDIC indemnification asset expense		(16,059)		(15,198)		(51,180)		(46,623)
Change in true-up payment obligation		(875)		(767)		(2,596)		(2,178)
		(16,934)		(15,965)		(53,776)		(48,801)
Net gain (loss) on:
Sale of securities		-		-		4,366		-
Derivatives		7		(811)		(463)		(1,746)
Early extinguishment of debt		-		-		-		1,061
Other non-interest income		455		(1,775)		1,133		575
Total non-interest income, net		2,491		3,323		8,227		19,963
Non-interest expense:
Compensation and employee benefits		18,592		22,590		61,086		69,927
Professional and service fees		3,807		4,409		11,525		16,262
Occupancy and equipment		8,770		8,270		25,684		25,552
Insurance		2,099		1,828		6,506		7,229
Electronic banking charges		4,637		3,694		14,085		11,458
Information technology expenses		1,289		2,729		4,589		7,708
Advertising, business promotion, and strategic initiatives		1,825		1,471		5,274		4,550
Merger and restructuring charges		-		2,252		-		13,060
Foreclosure, repossession and other real estate expenses		7,842		5,703		20,783		12,603
Loan servicing and clearing expenses		1,870		2,133		5,598		5,493
Taxes, other than payroll and income taxes		3,494		4,024		11,005		11,778
Communication		820		782		2,590		2,481
Printing, postage, stationary and supplies		620		824		1,820		2,841
Director and investor relations		250		230		794		843
Other		3,660		2,295		9,488		6,749
Total non-interest expense		59,575		63,234		180,827		198,534
Income before income taxes		27,530		26,206		94,984		60,129
Income tax expense (benefit)		7,998		6,585		30,396		(18,223)
Net income		19,532		19,621		64,588		78,352
Less: dividends on preferred stock		(3,465)		(3,465)		(10,396)		(10,396)
Income available to common shareholders	$	16,067	$	16,156	$	54,192	$	67,956
Earnings per common share:
Basic	$	0.36	$	0.35	$	1.20	$	1.49
Diluted	$	0.34	$	0.34	$	1.14	$	1.39
Average common shares outstanding and equivalents		52,362		53,322		52,440		53,053
Cash dividends per share of common stock	$	0.08	$	0.06	$	0.24	$	0.18
See notes to unaudited consolidated financial statements.

2

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE QUARTERS AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2014 AND 2013

					Nine-Month Period Ended September 30,
	Quarter Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Net income	$	19,532	$	19,621	$	64,588	$	78,352
Other comprehensive income (loss) before tax:
Unrealized gain (loss) on securities available-for-sale		(9,410)		(5,779)		15,094		(52,346)
Realized gain on investment securities included in net income		-		-		(4,366)		-
Unrealized gain on cash flow hedges		1,798		233		2,189		4,711
Other comprehensive income (loss) before taxes		(7,612)		(5,546)		12,917		(47,635)
Income tax effect		(732)		611		(2,697)		2,587
Other comprehensive income (loss) after taxes		(8,344)		(4,935)		10,220		(45,048)
Comprehensive income	$	11,188	$	14,686	$	74,808	$	33,304
See notes to unaudited consolidated financial statements.

3

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2014 AND 2013

	Nine-Month Period Ended September 30,
	2014		2013
	(In thousands)
Preferred stock:
Balance at beginning of period	$	176,000	$	176,000
Balance at end of period		176,000		176,000
Common stock:
Balance at beginning of period		52,707		52,671
Exercised stock options		54		20
Balance at end of period		52,761		52,691
Additional paid-in capital:
Balance at beginning of period		538,071		537,453
Stock-based compensation expense		1,248		1,360
Exercised stock options		589		187
Lapsed restricted stock units		(386)		(728)
Common stock issuance costs		-		(16)
Preferred stock issuance costs		-		(25)
Balance at end of period		539,522		538,231
Legal surplus:
Balance at beginning of period		61,957		52,143
Transfer from retained earnings		6,480		7,724
Balance at end of period		68,437		59,867
Retained earnings:
Balance at beginning of period		133,629		70,734
Net income		64,588		78,352
Cash dividends declared on common stock		(10,822)		(8,219)
Cash dividends declared on preferred stock		(10,396)		(10,396)
Transfer to legal surplus		(6,480)		(7,724)
Balance at end of period		170,519		122,747
Treasury stock:
Balance at beginning of period		(80,642)		(81,275)
Stock repurchased		(10,394)		-
Lapsed restricted stock units		384		556
Stock used to match defined contribution plan		-		77
Balance at end of period		(90,652)		(80,642)
Accumulated other comprehensive income, net of tax:
Balance at beginning of period		3,191		55,880
Other comprehensive income (loss), net of tax		10,220		(45,048)
Balance at end of period		13,411		10,832
Total stockholders’ equity	$	929,998	$	879,726
See notes to unaudited consolidated financial statements.

4

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2014 AND 2013

	Nine-Month Period Ended September 30,
	2014		2013
	(In thousands)
Cash flows from operating activities:
Net income	$	64,588	$	78,352
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred loan origination fees, net of costs		2,065		733
Amortization of fair value premiums, net of discounts, on acquired loans		9,914		8,239
Amortization of investment securities premiums, net of accretion of discounts		1,048		17,116
Amortization of core deposit and customer relationship intangibles		1,627		1,932
Amortization of fair value premiums on acquired deposits		4,349		12,032
FDIC shared-loss expense, net		53,776		48,801
Depreciation and amortization of premises and equipment		7,415		7,703
Deferred income tax expense (benefit), net		20,418		(18,816)
Provision for covered and non-covered loan and lease losses, net		43,763		60,300
Stock-based compensation		1,248		1,360
(Gain) loss on:
Sale of securities		(4,366)		-
Sale of mortgage loans held-for-sale		(3,891)		(2,009)
Derivatives		584		224
Early extinguishment of debt		-		(1,061)
Foreclosed real estate		9,185		5,321
Sale of other repossessed assets		4,506		1,813
Sale of premises and equipment		(11)		-
Originations of loans held-for-sale		(130,547)		(239,804)
Proceeds from sale of loans held-for-sale		72,211		125,245
Net (increase) decrease in:
Trading securities		182		(1,629)
Accrued interest receivable		(931)		(4,802)
Servicing assets		(185)		(2,856)
Other assets		8,538		15,984
Net increase (decrease) in:
Accrued interest on deposits and borrowings		(1,811)		(1,658)
Accrued expenses and other liabilities		(3,099)		13,937
Net cash provided by operating activities		160,576		126,457
Cash flows from investing activities:
Purchases of:
Investment securities available-for-sale		(219,027)		(32,874)
Investment securities held-to-maturity		(115,396)		-
FHLB stock		(84,375)		(32,562)
Maturities and redemptions of:
Investment securities available-for-sale		429,939		477,610
Investment securities held-to-maturity		1,045		-
FHLB stock		87,636		46,503
Proceeds from sales of:
Investment securities available-for-sale		189,249		120,526
Foreclosed real estate and other repossessed assets		33,915		44,754
Loans held-for-investment		9,378		-
Premises and equipment		25		896
Origination and purchase of loans, excluding loans held-for-sale		(545,776)		(911,443)
Principal repayment of loans, including covered loans		561,479		806,676
Reimbursements from the FDIC on shared-loss agreements		31,537		32,732
Additions to premises and equipment		(6,626)		(6,747)
Net change in securities purchased under agreements to resell		60,000		(5,000)
Net change in restricted cash		49,292		(2,517)
Net cash provided by investing activities		482,295		538,554

5

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2014 AND 2013 – (Continued)

	Nine-Month Period Ended September 30,
	2014		2013
	(In thousands)
Cash flows from financing activities:
Net increase (decrease) in:
Deposits		(306,917)		(96,552)
Short term borrowings		-		(92,210)
Securities sold under agreements to repurchase		(255,000)		(427,931)
FHLB advances, federal funds purchased, and other borrowings		(1,142)		(199,731)
Subordinated capital notes		1,180		(45,491)
Exercise of stock options and restricted units lapsed, net		641		207
Purchase of treasury stock		(10,394)		-
Termination of derivative instruments		-		1,483
Dividends paid on preferred stock		(10,396)		(10,226)
Dividends paid on common stock		(10,873)		(8,219)
Net cash used in financing activities		(592,901)		(878,670)
Net change in cash and cash equivalents		49,970		(213,659)
Cash and cash equivalents at beginning of period		621,269		855,235
Cash and cash equivalents at end of period	$	671,239	$	641,576
Supplemental Cash Flow Disclosure and Schedule of Non-cash Activities:
Interest paid	$	63,082	$	64,272
Income taxes paid	$	1,839	$	378
Mortgage loans securitized into mortgage-backed securities	$	71,466	$	117,687
Securities purchased but not yet received	$	30,057	$	-
Transfer from loans to foreclosed real estate and other repossessed assets	$	67,296	$	65,716
Reclassification of loans held-for-investment portfolio to held-for-sale portfolio	$	5,268	$	42,289
Reclassification of loans held-for-sale portfolio to held-for-investment portfolio	$	25,801	$	-
See notes to unaudited consolidated financial statements.

6

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 –  ORGANIZATION, CONSOLIDATION AND BASIS OF PRESENTATION

Nature of Operations

OFG Bancorp (the “Company”) is a publicly-owned financial holding company incorporated under the laws of the Commonwealth of Puerto Rico. The Company operates through various subsidiaries including, a commercial bank, Oriental Bank (or the “Bank”), a securities broker-dealer, Oriental Financial Services Corp. (“Oriental Financial Services”), an insurance agency, Oriental Insurance, Inc. (“Oriental Insurance”) and a retirement plan administrator, Caribbean Pension Consultants, Inc. (“CPC”). Through these subsidiaries and their respective divisions, the Company provides a wide range of banking and financial services such as commercial, consumer and mortgage lending, auto loans, financial planning, insurance sales, money management and investment banking and brokerage services, as well as corporate and individual trust services. On April 25, 2013, the Company changed its corporate name from Oriental Financial Group Inc. to OFG Bancorp.

On April 30, 2010, the Bank acquired certain assets and assumed certain deposits and other liabilities of Eurobank, a Puerto Rico commercial bank, in an FDIC-assisted acquisition. On December 18, 2012, the Company acquired a group of Puerto Rico based entities that included Banco Bilbao Vizcaya Argentaria Puerto Rico (“BBVAPR”), a Puerto Rico commercial bank, as well as a securities broker-dealer and an insurance agency, which is referred to herein as the “BBVAPR Acquisition.” The businesses acquired in these acquisitions have been integrated with the Company’s existing business.

Recent Accounting Developments

In August 2014, the Financial Accounting Standard Board (“FASB”) issued a new going concern standard, which requires management to assess at each interim and annual reporting period whether substantial doubt exists about the company’s ability to continue as a going concern. Substantial doubt exists if it is probable (the same threshold that is used for contingencies) that the company will be unable to meet its obligations as they become due within one year after the date the financial statements are issued or available to be issued (assessment date). Management needs to consider known (and reasonably knowable) events and conditions at the assessment date. For all entities, this standard is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016, with earlier adoption permitted. The adoption of this standard will have no material impact on our financial position or results of operations.

In August 2014, FASB issued new guidance requiring creditors to classify certain foreclosed, government-guaranteed, mortgage loans as receivables. The receivable is measured at the amount expected to be recovered under the guarantee, which is not treated as a separate unit of account. For public business entities, this guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2014, with earlier adoption permitted if the entity already has adopted Accounting Standards Update (“ASU”) 2014-04. An entity should adopt the amendments in this update using either a prospective transition method or a modified retrospective transition method. We are currently evaluating the impact that the adoption of this guidance will have on our financial position and results of operations.

Other than the accounting pronouncements disclosed above, there was no other new accounting pronouncement issued during the third quarter of 2014 that could have a material impact on the Company’s financial position, operating results or financials statement disclosures.

7

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 2 – RESTRICTED CASH

The following table includes the composition of the Company’s restricted cash:

	September 30,		December 31,
	2014		2013
	(In thousands)
Cash pledged as collateral to other financial institutions to secure:
Securities sold under agreements to repurchase	$	24,500	$	67,029
Derivatives		2,980		2,980
Obligations under agreement of loans sold with recourse		5,427		12,190
	$	32,907	$	82,199

The Company delivers cash as collateral to meet margin calls for some long term securities sold under agreements to repurchase. At September 30, 2014 and December 31, 2013, the Company had cash pledged as collateral for securities sold under agreements to repurchase amounting to $24.5 million and $67.0 million, respectively.

As part of its derivative activities, the Company has entered into collateral agreements with certain financial counterparties.  At both September 30, 2014 and December 31, 2013, the Company had delivered $3.0 million of cash as collateral for such derivatives activities.

As part of the BBVAPR Acquisition, the Company assumed various contracts with the Federal National Mortgage Association (“FNMA”) which required collateral to guarantee the repurchase, if necessary, of certain mortgage loans sold with recourse. At September 30, 2014 and December 31, 2013, the Company had $5.4 million and $12.2 million, respectively, of cash pledged as collateral for such recourse obligations.

NOTE 3 – INVESTMENT SECURITIES

Money Market Investments

The Company considers as cash equivalents all money market instruments that are not pledged and that have maturities of three months or less at the date of acquisition. At September 30, 2014 and December 31, 2013, money market instruments included as part of cash and cash equivalents amounted to $7.8 million and $7.0 million, respectively.

Securities Purchased Under Agreements to Resell

Securities purchased under agreements to resell consist of short-term investments and are carried at the amounts at which the assets will be subsequently resold as specified in the respective agreements. At December 31, 2013, securities purchased under agreements to resell amounted to $60.0 million. At September 30, 2014, there were no securities purchased under agreements to resell.

The amounts advanced under those agreements are reflected as assets in the consolidated statements of financial condition. It is the Company’s policy to take possession of securities purchased under agreements to resell. Agreements with third parties specify the Company’s right to request additional collateral based on its monitoring of the fair value of the underlying securities on a daily basis. The fair value of the collateral securities held by the Company on these transactions as of December 31, 2013 was approximately $64.6 million.

8

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Investment Securities

The amortized cost, gross unrealized gains and losses, fair value, and weighted average yield of the securities owned by the Company at September 30, 2014 and December 31, 2013 were as follows:

	September 30, 2014
			Gross		Gross				Weighted
	Amortized		Unrealized		Unrealized		Fair		Average
	Cost		Gains		Losses		Value		Yield
	(In thousands)
Available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	1,023,303	$	36,414	$	3,082	$	1,056,635	3.13%
GNMA certificates		5,241		348		21		5,568	4.92%
CMOs issued by US government-sponsored agencies		189,142		206		4,390		184,958	1.80%
Total mortgage-backed securities		1,217,686		36,968		7,493		1,247,161	2.93%
Investment securities
Obligations of US government-sponsored agencies		7,795		-		34		7,761	1.32%
Obligations of Puerto Rico government and             political subdivisions		20,915		-		5,469		15,446	5.41%
Other debt securities		3,373		138		-		3,511	2.91%
Total investment securities		32,083		138		5,503		26,718	4.15%
Total securities available for sale	$	1,249,769	$	37,106	$	12,996	$	1,273,879	2.96%
Held-to-maturity
Mortgage-backed securities
FNMA and FHLMC certificates		144,305		82		170		144,217	1.95%
Total	$	1,394,074	$	37,188	$	13,166	$	1,418,096	2.86%

	December 31, 2013
			Gross		Gross				Weighted
	Amortized		Unrealized		Unrealized		Fair		Average
	Cost		Gains		Losses		Value		Yield
	(In thousands)
Available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	1,190,910	$	33,089	$	6,669	$	1,217,330	2.93%
GNMA certificates		7,406		433		24		7,815	4.92%
CMOs issued by US government-sponsored agencies		220,801		407		6,814		214,394	1.78%
Total mortgage-backed securities		1,419,117		33,929		13,507		1,439,539	2.76%
Investment securities
Obligations of US government-sponsored agencies		10,691		-		42		10,649	1.21%
Obligations of Puerto Rico government and             political subdivisions		121,035		-		6,845		114,190	4.38%
Other debt securities		24,200		167		320		24,047	3.46%
Total investment securities		155,926		167		7,207		148,886	2.99%
Total securities available-for-sale	$	1,575,043	$	34,096	$	20,714	$	1,588,425	2.89%

9

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The amortized cost and fair value of the Company’s investment securities at September 30, 2014, by contractual maturity, are shown in the next table. Securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period of final contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2014
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)				(In thousands)
Mortgage-backed securities
Due after 5 to 10 years
FNMA and FHLMC certificates	$	22,896	$	23,243	$	-	$	-
Total due after 5 to 10 years		22,896		23,243		-		-
Due after 10 years
FNMA and FHLMC certificates		1,000,407		1,033,392		144,305		144,217
GNMA certificates		5,241		5,568		-		-
CMOs issued by US government-sponsored agencies		189,142		184,958		-		-
Total due after 10 years		1,194,790		1,223,918		144,305		144,217
Total  mortgage-backed securities		1,217,686		1,247,161		144,305		144,217
Investment securities
Due from 1 to 5 years
Obligations of Puerto Rico government and political subdivisions		10,450		8,628		-		-
Total due from 1 to 5 years		10,450		8,628		-		-
Due after 5 to 10 years
Obligations of US government and sponsored agencies		7,795		7,761		-		-
Total due after 5 to 10 years		7,795		7,761		-		-
Due after 10 years
Obligations of Puerto Rico government and political subdivisions		10,465		6,818		-		-
Other debt securities		3,373		3,511		-		-
Total due after 10 years		13,838		10,329		-		-
Total  investment securities		32,083		26,718		-		-
Total securities available-for-sale	$	1,249,769	$	1,273,879	$	144,305	$	144,217

10

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At December 31, 2013, obligations of the Puerto Rico government and its political subdivisions included a $98.7 million principal amount, LIBOR floating rate bond with a maturity date of July 1, 2024, that was subject to mandatory tender for purchase by the end of the third year anniversary of the closing date, which was June 1, 2014. The bond was also subject to optional demand tender for purchase upon the occurrence and continuance of certain events, including (among others) the withdrawal, suspension or reduction below investment grade of the credit rating on any general obligation of the Commonwealth by any of the three major rating agencies. This bond was repaid by the issuer on March 17, 2014.

The Company, as part of its asset/liability management, may purchase U.S. Treasury securities and U.S. government-sponsored agency discount notes close to their maturities as alternatives to cash deposits at correspondent banks or as a short term vehicle to reinvest the proceeds of sale transactions until investment securities with attractive yields can be purchased. During the nine-month period ended September 30, 2014, the Company sold $74.1 million of available-for-sale Government National Mortgage Association (“GNMA”) certificates that were sold as part of its recurring mortgage loan origination and securitization activities. These sales did not realize any gains or losses during such period.

In addition, during the nine-month period ended September 30, 2014, the Company sold $110.8 million of available-for-sale FNMA and FHLMC certificates because the Company believed that gains could be realized and that there were good opportunities to invest the proceeds in other investment securities with attractive yields and terms that would allow the Company to continue protecting its net interest margin. The Company recorded a net gain on sale of these securities of $4.4 million. The table below presents the gross realized gains by category for such period. There was no realized gain or loss for the nine-month period ended September 30, 2013.

	Nine-Month Period Ended September 30, 2014
			Book Value		Gross		Gross
Description	Sale Price		at Sale		Gains		Losses
	(In thousands)
Sale of securities available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	115,158	$	110,792	$	4,366	$	-
GNMA certificates		74,091		74,091		-		-
Total	$	189,249	$	184,883	$	4,366	$	-

11

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following tables show the Company’s gross unrealized losses and fair value of investment securities available-for-sale and held-to-maturity, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position at September 30, 2014 and December 31, 2013:

	September 30, 2014
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	149,957	$	4,242	$	145,716
FNMA and FHLMC certificates		183,479		3,049		180,430
Obligations of Puerto Rico government and political subdivisions		20,915		5,469		15,446
GNMA certificates		197		22		176
	$	354,548	$	12,782	$	341,768
	Less than 12 months
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	15,746	$	148	$	15,598
FNMA and FHLMC certificates		26,220		33		26,187
Obligations of US government and sponsored agencies		7,796		34		7,761
Securities held-to-maturity
FNMA and FHLMC Certificates		95,598		170		95,428
	$	145,359	$	385	$	144,974
	Total
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	165,703	$	4,390	$	161,314
FNMA and FHLMC certificates		209,699		3,082		206,617
Obligations of Puerto Rico government and political subdivisions		20,915		5,469		15,446
Obligations of US government and sponsored agencies		7,796		34		7,761
GNMA certificates		197		22		176
		404,309		12,996		391,314
Securities held-to-maturity
FNMA and FHLMC Certificates		95,598		170		95,428
	$	499,907	$	13,166	$	486,742

12

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2013
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico government and political subdivisions	$	20,845	$	5,470	$	15,375
CMOs issued by US government-sponsored agencies		2,559		237		2,322
GNMA certificates		81		11		70
	$	23,485	$	5,718	$	17,767
	Less than 12 months
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico government and political subdivisions	$	100,190	$	1,375	$	98,815
CMOs issued by US government-sponsored agencies		182,661		6,577		176,084
GNMA certificates		122		13		109
FNMA and FHLMC certificates		220,913		6,669		214,244
Obligations of US government and sponsored agencies		10,691		42		10,649
Other debt securities		20,000		320		19,680
	$	534,577	$	14,996	$	519,581
	Total
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico government and political subdivisions	$	121,035	$	6,845	$	114,190
CMOs issued by US government-sponsored agencies		185,220		6,814		178,406
GNMA certificates		203		24		179
FNMA and FHLMC certificates		220,913		6,669		214,244
Obligations of US government and sponsored agencies		10,691		42		10,649
Other debt securities		20,000		320		19,680
	$	558,062	$	20,714	$	537,348

13

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company performs valuations of the investment securities on a monthly basis. Moreover, the Company conducts quarterly reviews to identify and evaluate each investment in an unrealized loss position for other-than-temporary impairment. Any portion of a decline in value associated with credit loss is recognized in income with the remaining noncredit-related component recognized in other comprehensive income. A credit loss is determined by assessing whether the amortized cost basis of the security will be recovered by comparing the present value of cash flows expected to be collected from the security, discounted at the rate equal to the yield used to accrete current and prospective beneficial interest for the security. The shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is considered to be the “credit loss.” Other-than-temporary impairment analysis is based on estimates that depend on market conditions and are subject to further change over time. In addition, while the Company believes that the methodology used to value these exposures is reasonable, the methodology is subject to continuing refinement, including those made as a result of market developments. Consequently, it is reasonably possible that changes in estimates or conditions could result in the need to recognize additional other-than-temporary impairment charges in the future.

Most of the investment ($479.0 million or 96%) with an unrealized loss position at September 30, 2014 consist of securities issued or guaranteed by the U.S. Treasury or U.S. government-sponsored agencies, all of which are highly liquid securities that have a large and efficient secondary market. Their aggregate losses and their variability from period to period are the result of changes in market conditions, and not due to the repayment capacity or creditworthiness of the issuers or guarantors of such securities.

The remaining investments ($20.9 million or 4%) with an unrealized loss position at September 30, 2014 consist of obligations issued or guaranteed by the government of Puerto Rico and its political subdivisions or instrumentalities. The recent decline in the market value of these securities is mainly attributed to an increase in volatility as a result of changes in market conditions that reflect the significant economic and fiscal challenges that Puerto Rico is facing, including a protracted economic recession, sizable government debt-service obligations and structural budget deficits, high unemployment and a shrinking population.  Moreover, uncertainty in regards to the impact of the recently enacted Public Corporation Debt Enforcement and Recovery Act (the “Recovery Act”) and the related subsequent negative rating decisions taken by the credit rating agencies has affected the market value of these securities.

As of September 30, 2014, the Company applied a discounted cash flow analysis to the Puerto Rico government bonds to calculate the cash flows expected to be collected and determine if any portion of the decline in market value of these investments was considered an other-than-temporary impairment. The analysis derives an estimate of value based on the present value of risk-adjusted future cash flows of the underlying investments, and included the following components:

·The contractual future cash flows of the bonds are projected based on the key terms as set forth in the official statements for each investment. Such key terms include among others the interest rate, amortization schedule, if any, and maturity date.

·The risk-adjusted cash flows are calculated based on monthly default probability and recovery rate assumptions based on the credit rating of each investment. Constant monthly default rates are assumed throughout the life of the bonds which are based on the respective security’s credit rating as of the date of the analysis.

·The adjusted future cash flows are then discounted at the original effective yield of each investment based on the purchase price and expected risk-adjusted future cash flows as of the purchase date of each investment.

The discounted cash flow analysis for the investments showed at maturity in the range of 2.509% to 15.340%, thus reflecting that it is more likely than not that the bonds will not default at all during their remaining terms (range between 84.660% and 97.491%). Based on this analysis, the Company determined that it is more likely than not that it will recover all interest and principal invested in the Puerto Rico government bonds and is therefore not required to recognize a credit loss as of September 30, 2014.

14

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 4 - LOANS 

The Company’s loan portfolio is composed of covered loans and non-covered loans. Covered loans are subject to loss sharing agreements with the FDIC and non-covered loans are not subject to FDIC loss sharing agreements. The risks of covered loans are different from the risks of non-covered loans because of the loss protection provided by the FDIC to covered loans. Loans acquired in the BBVAPR Acquisition are included as non-covered loans in the unaudited consolidated statements of financial condition. Non-covered loans are further subdivided between originated and other loans, acquired loans accounted for under ASC 310-20 (loans with revolving feature and/or acquired at a premium), and acquired loans accounted for under ASC 310-30 (loans acquired with deteriorated credit quality, including those by analogy).

The composition of the Company’s loan portfolio at September 30, 2014 and December 31, 2013 was as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Non-covered loans:
Originated and other loans and leases held for investment:
Mortgage	$	791,106	$	766,265
Commercial		1,217,235		1,127,657
Consumer		175,882		127,744
Auto and leasing		542,892		379,874
		2,727,115		2,401,540
Acquired loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		26,984		77,681
Consumer		47,284		56,174
Auto		210,808		301,584
		285,076		435,439
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy)
Mortgage		670,188		717,904
Commercial		485,444		545,117
Construction		108,694		126,427
Consumer		36,470		63,620
Auto		276,749		379,145
		1,577,545		1,832,213
		4,589,736		4,669,192
Deferred loan cost , net		3,575		1,035
Loans receivable		4,593,311		4,670,227
Allowance for loan and lease losses on non-covered loans		(64,859)		(54,298)
Loans receivable, net		4,528,452		4,615,929
Mortgage loans held-for-sale		16,757		46,529
Total non-covered loans, net		4,545,209		4,662,458
Covered loans:
Loans secured by 1-4 family residential properties		121,658		121,748
Construction and development secured by 1-4 family residential properties		18,947		17,304
Commercial and other construction		228,410		264,249
Consumer		4,905		6,119
Leasing		-		270
Total covered loans		373,920		409,690
Allowance for loan and lease losses on covered loans		(62,227)		(52,729)
Total covered loans, net		311,693		356,961
Total loans, net	$	4,856,902	$	5,019,419

During the nine-month period ended September 30, 2014, the Company reclassified $25.8 million in mortgage loans held-for-sale to held-for-investment. 

15

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Non-covered Loans

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 as of September 30, 2014 and December 31, 2013 by class of loans. Mortgage loans past due included 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.

	September 30, 2014
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	5,996	$	3,283	$	3,424	$	12,703	$	55,635	$	68,338	$	141
Years 2003 and 2004		6,679		1,730		3,471		11,880		50,464		62,344		-
Year 2005		7,368		3,295		8,258		18,921		69,510		88,431		89
Year 2006		10,274		5,678		6,041		21,993		91,218		113,211		114
Years 2007, 2008             and 2009		3,285		3,095		7,647		14,027		83,036		97,063		59
Years 2010, 2011, 2012, 2013             and 2014		4,938		1,368		5,706		12,012		181,550		193,562		509
		38,540		18,449		34,547		91,536		531,413		622,949		912
Non-traditional		1,084		783		3,022		4,889		32,886		37,775		-
Loss mitigation program		10,022		7,358		14,625		32,005		57,578		89,583		5,773
		49,646		26,590		52,194		128,430		621,877		750,307		6,685
Home equity secured personal loans		-		-		126		126		607		733		-
GNMA's buy-back option program		-		-		40,066		40,066		-		40,066		-
		49,646		26,590		92,386		168,622		622,484		791,106		6,685
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		113,976		113,976		-
Institutional		-		-		-		-		37,177		37,177		-
Middle market		-		1,071		638		1,709		142,830		144,539		-
Retail		1,164		129		7,258		8,551		153,091		161,642		-
Floor plan		-		-		-		-		1,666		1,666		-
Real estate		-		-		-		-		11,878		11,878		-
		1,164		1,200		7,896		10,260		460,618		470,878		-
Other commercial and industrial:
Corporate		-		-		-		-		60,402		60,402		-
Institutional		-		-		-		-		482,277		482,277		-
Middle market		-		-		628		628		82,577		83,205		-
Retail		267		144		809		1,220		79,592		80,812		-
Floor plan		-		-		-		-		39,661		39,661		-
		267		144		1,437		1,848		744,509		746,357		-
		1,431		1,344		9,333		12,108		1,205,127		1,217,235		-

16

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	September 30, 2014
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		238		189		408		835		17,022		17,857		-
Overdrafts		20		2		1		23		317		340		-
Personal lines of credit		67		132		29		228		1,823		2,051		-
Personal loans		1,666		627		604		2,897		135,711		138,608		-
Cash collateral personal loans		214		132		36		382		16,644		17,026		-
		2,205		1,082		1,078		4,365		171,517		175,882		-
Auto and leasing		43,537		15,956		8,279		67,772		475,120		542,892		-
Total	$	96,819	$	44,972	$	111,076	$	252,867	$	2,474,248	$	2,727,115	$	6,685

17

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2013
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	6,697	$	1,635	$	3,408	$	11,740	$	64,772	$	76,512	$	79
Years 2003 and 2004		4,722		2,163		1,845		8,730		56,387		65,117		-
Year 2005		8,527		2,119		4,808		15,454		74,087		89,541		-
Year 2006		12,055		4,312		4,418		20,785		99,537		120,322		-
Years 2007, 2008             and 2009		3,464		1,104		4,663		9,231		91,919		101,150		152
Years 2010, 2011, 2012             and 2013		3,923		1,609		4,453		9,985		139,561		149,546		459
		39,388		12,942		23,595		75,925		526,263		602,188		690
Non-traditional		3,217		1,162		2,311		6,690		35,412		42,102		-
Loss mitigation program		9,759		5,560		13,191		28,510		57,808		86,318		2,185
		52,364		19,664		39,097		111,125		619,483		730,608		2,875
Home equity secured personal loans		-		-		138		138		598		736		-
GNMA's buy-back option program		-		-		34,921		34,921		-		34,921		-
		52,364		19,664		74,156		146,184		620,081		766,265		2,875
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		54,796		54,796		-
Institutional		-		-		-		-		4,050		4,050		-
Middle market		1,356		-		10,294		11,650		149,933		161,583		-
Retail		4,253		1,015		3,190		8,458		158,184		166,642		-
Floor plan		-		-		-		-		1,835		1,835		-
Real estate		-		-		-		-		11,655		11,655		-
		5,609		1,015		13,484		20,108		380,453		400,561		-
Other commercial and industrial:
Corporate		236		-		-		236		32,362		32,598		-
Institutional		-		-		-		-		536,445		536,445		-
Middle market		-		299		1,134		1,433		57,464		58,897		-
Retail		1,830		552		539		2,921		58,589		61,510		-
Floor plan		39		-		-		39		37,607		37,646		-
		2,105		851		1,673		4,629		722,467		727,096		-
		7,714		1,866		15,157		24,737		1,102,920		1,127,657		-

18

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2013
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		287		168		232		687		14,554		15,241		-
Overdrafts		46		4		-		50		322		372		-
Personal lines of credit		33		38		66		137		1,844		1,981		-
Personal loans		1,324		399		352		2,075		92,485		94,560		-
Cash collateral personal loans		324		43		-		367		15,223		15,590		-
		2,014		652		650		3,316		124,428		127,744		-
Auto and leasing		25,531		9,437		5,089		40,057		339,817		379,874		-
Total	$	87,623	$	31,619	$	95,052	$	214,294	$	2,187,246	$	2,401,540	$	2,875

At September 30, 2014, the increase in delinquencies in the consumer and the auto and leasing portfolios compared to December 31, 2013 is mainly attributed to the fact that non-performing loans of acquired non-covered loan portfolio were accounted for under ASC 310-30. Such portfolios are increasing as new originations are ramping up the balances outstanding. More than a year from the BBVAPR Acquisition, those portfolios are beginning to reflect normal delinquency levels as seasoned portfolios. At September 30, 2014, the increase in delinquencies in the mortgage portfolio compared to December 31, 2013 is mainly attributed to Puerto Rico’s prolonged recession.

At September 30, 2014 and December 31, 2013, the Company had $458.0 million and $515.4 million, respectively, in loans granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of the institutional commercial loan segment. This entire amount was current at September 30, 2014.

19

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Acquired 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 as part of the non-covered portfolio 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. Loans acquired in the non-covered portfolio 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 loans accounted for under ASC 310-20 as of September 30, 2014 and December 31, 2013, by class of loans:

	September 30, 2014
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Corporate	$	-	$	-	$	-	$	-	$	3,746	$	3,746	$	-
Retail		-		-		342		342		482		824		-
Floor plan		-		-		101		101		3,972		4,073		-
		-		-		443		443		8,200		8,643		-
Other commercial and industrial
Corporate		-		-		-		-		2,915		2,915		-
Retail		169		73		451		693		7,328		8,021		-
Floor plan		97		40		108		245		7,160		7,405		-
		266		113		559		938		17,403		18,341		-
		266		113		1,002		1,381		25,603		26,984		-
Consumer
Credit cards		1,625		678		1,328		3,631		40,051		43,682		-
Personal loans		160		83		66		309		3,293		3,602		-
		1,785		761		1,394		3,940		43,344		47,284		-
Auto		11,372		4,137		1,537		17,046		193,762		210,808		-
Total	$	13,423	$	5,011	$	3,933	$	22,367	$	262,709	$	285,076	$	-

20

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2013
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Corporate	$	-	$	-	$	-	$	-	$	10,166	$	10,166	$	-
Retail		431		331		868		1,630		4,140		5,770		-
Floor plan		-		-		101		101		2,576		2,677		-
		431		331		969		1,731		16,882		18,613		-
Other commercial and industrial
Corporate		14		83		-		97		9,696		9,793		-
Retail		1,717		1,418		659		3,794		23,544		27,338		-
Floor plan		35		193		18		246		21,691		21,937		-
		1,766		1,694		677		4,137		54,931		59,068		-
		2,197		2,025		1,646		5,868		71,813		77,681		-
Consumer
Credit cards		2,217		1,200		2,068		5,485		46,714		52,199		-
Personal loans		196		7		91		294		3,681		3,975		-
		2,413		1,207		2,159		5,779		50,395		56,174		-
Auto		12,534		3,616		1,608		17,758		283,826		301,584		-
Total	$	17,144	$	6,848	$	5,413	$	29,405	$	406,034	$	435,439	$	-

21

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Acquired loans that are part of the non-covered portfolio, 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 non-covered loans acquired with deteriorated credit quality, including those accounted under ASC 310-30 by analogy, in the statements of financial condition at September 30, 2014 and December 31, 2013 is as follows:

	September 30,	December 31,
	2014	2013
	(In thousands)
Contractual required payments receivable	$ 2,505,662	$ 2,929,353
Less: Non-accretable discount	523,987	579,587
Cash expected to be collected	1,981,675	2,349,766
Less: Accretable yield	404,130	517,553
Carrying amount, gross	1,577,545	1,832,213
Less: allowance for loan and lease losses	10,120	2,863
Carrying amount, net	$ 1,567,425	$ 1,829,350

During the quarter ended September 30, 2014, the Company sold non-performing residential mortgage loans that were accounted for under ASC 310-30 with a carrying amount of $19.7 million. No gain or loss was realized in the transaction in accordance to ASC 310-30 accounting.

At September 30, 2014 and December 31, 2013, the Company had $168.7 million and $180.5 million, respectively, in loans granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of its non-covered acquired loans accounted for under ASC 310-30.  This entire amount was current at September 30, 2014.

The following tables describe the accretable yield and non-accretable discount activity of acquired loans accounted for under ASC 310-30 for the quarters and nine-month periods ended September 30, 2014 and 2013, excluding covered loans:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Accretable Yield Activity
Balance at beginning of period	$	444,606	$	561,485	$	517,553	$	655,833
Accretion		(38,340)		(48,352)		(118,323)		(150,447)
Transfer from (to) non-accretable discount		(2,136)		6,010		4,900		13,757
Balance at end of period	$	404,130	$	519,143	$	404,130	$	519,143
	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Non-Accretable Discount Activity
Balance at beginning of period	$	554,724	$	686,231	$	579,587	$	714,462
Principal losses		(32,873)		(44,301)		(50,700)		(64,785)
Transfer from (to) accretable yield		2,136		(6,010)		(4,900)		(13,757)
Balance at end of period	$	523,987	$	635,920	$	523,987	$	635,920

22

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Covered Loans

The carrying amount of covered loans at September 30, 2014 and December 31, 2013 is as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Contractual required payments receivable	$	561,844	$	702,126
Less: Non-accretable discount		77,940		129,477
Cash expected to be collected		483,904		572,649
Less: Accretable yield		109,984		162,959
Carrying amount, gross		373,920		409,690
Less: Allowance for covered loan and lease losses		62,227		52,729
Carrying amount, net	$	311,693	$	356,961

The following tables describe the accretable yield and non-accretable discount activity of covered loans for the quarters and nine-month periods ended September 30, 2014 and 2013:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Accretable Yield Activity
Balance at beginning of period	$	128,061	$	167,132	$	162,959	$	188,008
Accretion		(20,886)		(21,657)		(69,154)		(65,884)
Transfer from non-accretable discount		2,809		23,070		16,179		46,421
Balance at end of period	$	109,984	$	168,545	$	109,984	$	168,545
	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2013		2013		2014		2013
	(In thousands)
Non-Accretable Discount Activity
Balance at beginning of period	$	85,224	$	192,259	$	129,477	$	237,555
Principal losses		(4,475)		(7,762)		(35,358)		(29,707)
Transfer to accretable yield		(2,809)		(23,070)		(16,179)		(46,421)
Balance at end of period	$	77,940	$	161,427	$	77,940	$	161,427

23

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Non-accrual Loans

The following table presents the recorded investment in loans in non-accrual status by class of loans as of September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year):
Up to the year 2002	$	3,613	$	3,428
Years 2003 and 2004		3,749		1,845
Year 2005		9,117		4,922
Year 2006		7,019		4,418
Years 2007, 2008 and 2009		9,817		4,511
Years 2010, 2011, 2012, 2013 and 2014		6,244		7,818
		39,559		26,942
Non-traditional		3,022		2,311
Loss mitigation program		17,636		18,792
		60,217		48,045
Home equity secured personal loans		125		138
		60,342		48,183
Commercial
Commercial secured by real estate
Middle market		10,608		11,895
Retail		8,942		7,208
		19,550		19,103
Other commercial and industrial
Middle market		628		1,134
Retail		2,112		2,485
Floor plan		-		108
		2,740		3,727
		22,290		22,830
Consumer
Credit cards		408		232
Overdrafts		1		-
Personal lines of credit		35		84
Personal loans		761		485
Cash collateral personal loans		36		4
		1,241		805
Auto and leasing		9,008		5,089
	$	92,881	$	76,907

24

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	September 30,		December 31,
	2014		2013
	(In thousands)
Acquired loans accounted under ASC 310-20
Commercial
Commercial secured by real estate
Retail	$	342	$	956
Floor plan		101		101
		443		1,057
Other commercial and industrial
Corporate		-		97
Retail		455		1,371
Floor plan		121		18
		576		1,486
		1,019		2,543
Consumer
Credit cards		1,326		2,068
Personal loans		76		151
		1,402		2,219
Auto		1,746		1,608
		4,167		6,370
Total non-accrual loans	$	97,048	$	83,277

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.

Delinquent residential mortgage loans insured or guaranteed under applicable FHA and VA programs are placed in non-accrual when they become 18 months or more past due, since they are insured loans.

At September 30, 2014 and December 31, 2013, loans whose terms have been extended and which are classified as troubled-debt restructurings that are not included in non-accrual loans amounted to $273.6 million and $66.5 million, respectively, as they are performing under their new terms. During the quarter ended September 30, 2014, the revolving line of credit to finance the purchase of fuel for the day to day power generation activities of the Puerto Rico Electric Power Authority (“PREPA”) was classified substandard and a troubled-debt restructuring. Based on our analysis, the loan is being maintained in accrual status requiring no impairment. At September 30, 2014 this line of credit had an unpaid principal balance of $200.0 million.

25

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 was $226.8 million and $28.4 million at September 30, 2014 and December 31, 2013, respectively. Impaired commercial loans at September 30, 2014 included the PREPA line of credit with an unpaid principal balance of $200.0 million. The impaired 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 valuation allowance for impaired commercial loans amounted to $1.1 million and $1.4 million at September 30, 2014 and December 31, 2013, respectively. The total investment in impaired mortgage loans was $91.7 million and $84.5 million at September 30, 2014 and December 31, 2013, respectively. Impairment on mortgage loans assessed as troubled-debt restructurings was measured using the present value of cash flows. The valuation allowance for impaired mortgage loans amounted to approximately $7.9 million and $8.7 million at September 30, 2014 and December 31, 2013, respectively.

Originated and Other Loans and Leases Held for Investment

The Company’s recorded investment in non-covered 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 September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	5,297	$	4,731	$	1,108	23%
Residential troubled-debt restructuring		97,289		91,692		7,932	9%
Impaired loans with no specific allowance:
Commercial		228,968		221,852		N/A	N/A
Total investment in impaired loans	$	331,554	$	318,275	$	9,040	3%

	December 31, 2013
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance
Commercial	$	6,600	$	5,553	$	1,431	26%
Residential troubled-debt restructuring		89,539		84,494		8,708	10%
Impaired loans with no specific allowance
Commercial		27,914		22,592		N/A	N/A
Total investment in impaired loans	$	124,053	$	112,639	$	10,139	9%

26

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

The Company’s recorded investment in non-covered commercial loans categorized as non-covered acquired loans accounted for under ASC 310-20 that were individually evaluated for impairment and the related allowance for loan and lease losses at September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial		208		208		N/A	N/A
Total investment in impaired loans	$	208	$	208	$	-	0%
	December 31, 2013
	Unpaid		Recorded		Specific
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial		208		208		N/A	N/A
Total investment in impaired loans	$	208	$	208	$	-	0%

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

The Company’s recorded investment in non-covered acquired loan pools accounted for under ASC 310-30 and their related allowance for non-covered loan and lease losses at September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired non-covered loan pools:
Commercial	$	294,966	$	257,234	$	4,613	2%
Construction		52,367		45,770		5,502	12%
Consumer		42,897		36,463		5	0%
Total investment in impaired non-covered loan pools	$	390,230	$	339,467	$	10,120	3%

27

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2013
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired non-covered loan pools:
Mortgage	$	5,183	$	4,718	$	57	1%
Commercial		48,100		40,411		394	1%
Construction		21,526		17,818		1,319	7%
Consumer		73,043		63,606		361	1%
Auto		379,236		377,316		732	0%
Total investment in impaired non-covered loan pools	$	527,088	$	503,869	$	2,863	1%

The following table presents the interest recognized in non-covered commercial and mortgage loans that were individually evaluated for impairment, excluding loans accounted for under ASC 310-30, for the quarters and nine-month periods ended September 30, 2014 and 2013:

	Quarter Ended September 30,
	2014				2013
	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
	(In thousands)
Impaired loans with specific allowance
Commercial	$	28	$	5,103	$	5	$	9,039
Residential troubled-debt restructuring		666		91,293		712		82,388
Impaired loans with no specific allowance
Commercial		1,728		89,029		146		28,805
Total interest income from impaired loans	$	2,422	$	185,425	$	863	$	120,232
	Nine-Month Period Ended Ended September 30,
	2014				2013
	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
	(In thousands)
Impaired loans with specific allowance
Commercial	$	83	$	6,187	$	16	$	14,872
Residential troubled-debt restructuring		1,876		89,597		1,942		81,406
Impaired loans with no specific allowance
Commercial		5,185		44,203		438		26,471
Total interest income from impaired loans	$	7,144	$	139,987	$	2,396	$	122,749

28

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Covered Loans

The Company’s recorded investment in covered loan pools that have recorded impairments and their related allowance for covered loan and lease losses as of September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired covered loan pools:
Loans secured by 1-4 family residential properties	$	138,029	$	106,823	$	15,252	14%
Construction and development secured by 1-4 family             residential properties		61,562		20,249		8,679	43%
Commercial and other construction		105,542		73,424		37,907	52%
Consumer		8,408		4,844		389	8%
Total investment in impaired covered loan pools	$	313,541	$	205,340	$	62,227	30%

	December 31, 2013
							Coverage
	Unpaid		Recorded		Specific		to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired covered loan pools with specific allowance
Loans secured by 1-4 family residential properties	$	52,142	$	38,179	$	12,495	33%
Construction and development secured by 1-4 family             residential properties		66,037		17,304		6,866	40%
Commercial and other construction		209,566		111,946		32,753	29%
Consumer		10,512		5,857		615	11%
Total investment in impaired covered loan pools	$	338,257	$	173,286	$	52,729	30%

29

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Modifications

The following tables present the troubled-debt restructurings during the quarters and nine-month periods ended September 30, 2014 and 2013:

	Quarter Ended September 30, 2014
	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	26	$	3,016	5.62%	347	$	2,965	4.22%	393
Commercial	20		200,007	7.25%	3		200,007	7.25%	10
Consumer	6		58	10.00%	61		68	9.66%	55
	Nine-Month Period Ended September 30, 2014
	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	113	$	14,562	5.99%	349	$	14,162	4.21%	389
Commercial	21		200,080	7.25%	3		200,080	7.25%	10
Consumer	13		123	11.77%	66		136	11.48%	62
	Quarter Ended September 30, 2013
	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	21	$	2,887	6.74%	352	$	3,066	6.74%	351
	Nine-Month Period Ended September 30, 2013
	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	102	$	12,828	6.43%	334	$	13,685	5.15%	393
Commercial	2		1,842	8.99%	87		1,842	4.00%	66

30

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents troubled-debt restructurings for which there was a payment default during the twelve-month periods ended September 30, 2014 and 2013:

	Twelve-Month Period Ended September 30,
	2014			2013
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(Dollars in thousands)
Mortgage	15	$	1,739	30	$	3,097
Consumer	2	$	5	-	$	-

Credit Quality Indicators

The Company categorizes non-covered 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.

31

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of September 30, 2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of gross non-covered originated and other loans and acquired loans accounted for under ASC 310-20 subject to risk rating by class of loans is as follows:

	September 30, 2014
	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	$	113,976	$	90,006	$	23,970	$	-	$	-	$	-
Institutional		37,177		27,232		9,702		-		-		243
Middle market		144,539		127,640		3,707		-		-		13,192
Retail		161,642		147,034		3,020		2,441		-		9,147
Floor plan		1,666		594		971		101		-		-
Real estate		11,878		11,878		-		-		-		-
		470,878		404,384		41,370		2,542		-		22,582
Other commercial and industrial:
Corporate		60,402		60,402		-		-		-		-
Institutional		482,275		282,293		-		-		-		199,982
Middle market		83,206		77,504		3,144		-		-		2,558
Retail		80,813		76,684		308		2,360		-		1,461
Floor plan		39,661		38,301		1,147		213		-		-
		746,357		535,184		4,599		2,573		-		204,001
Total		1,217,235		939,568		45,969		5,115		-		226,583
Commercial - acquired loans       (under ASC 310-20)
Commercial secured by real estate:
Corporate		3,746		3,746		-		-		-		-
Retail		824		467		-		357		-		-
Floor plan		4,073		4,073		-		-		-		-
		8,643		8,286		-		357		-		-
Other commercial and industrial:
Corporate		2,915		2,915		-		-		-		-
Retail		8,021		7,612		9		400		-		-
Floor plan		7,405		7,405		-		-		-		-
		18,341		17,932		9		400		-		-
Total		26,984		26,218		9		757		-		-
Total	$	1,244,219	$	965,786	$	45,978	$	5,872	$	-	$	226,583

32

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2013
	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	$	54,796	$	54,796	$	-	$	-	$	-	$	-
Institutional		4,050		4,050		-		-		-		-
Middle market		161,583		133,061		16,627		118		-		11,777
Retail		166,642		149,018		2,182		2,258		-		13,184
Floor plan		1,835		1,835		-		-		-		-
Real estate		11,655		11,655		-		-		-		-
		400,561		354,415		18,809		2,376		-		24,961
Other commercial and industrial:
Corporate		32,598		32,598		-		-		-		-
Institutional		536,445		536,445		-		-		-		-
Middle market		58,897		53,868		3,466		198		-		1,365
Retail		61,510		58,742		257		691		-		1,820
Floor plan		37,646		37,350		188		108		-		-
		727,096		719,003		3,911		997		-		3,185
Total		1,127,657		1,073,418		22,720		3,373		-		28,146
Commercial - acquired loans       (under ASC 310-20)
Commercial secured by real estate:
Corporate		10,166		10,166		-		-		-		-
Retail		5,770		4,378		443		949		-		-
Floor plan		2,677		2,576		-		101		-		-
		18,613		17,120		443		1,050		-		-
Other commercial and industrial:
Corporate		9,793		9,696		-		97		-		-
Retail		27,338		26,044		150		1,144		-		-
Floor plan		21,937		21,769		168		-		-		-
		59,068		57,509		318		1,241		-		-
Total		77,681		74,629		761		2,291		-		-
Total	$	1,205,338	$	1,148,047	$	23,481	$	5,664	$	-	$	28,146

All loans individually measured for impairment are classified as substandard as of September 30, 2014.

33

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At September 30, 2014 and December 31, 2013, we had approximately $647.9 million and $763.4 million, respectively, of credit facilities granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities, of which $626.8 million and $696.0 million, respectively, were outstanding as of such dates. A substantial portion of our credit exposure to the government of Puerto Rico consists of collateralized loans or obligations that have a specific source of income or revenues identified for its repayment. Some of these obligations consist of senior and subordinated loans to public corporations that obtain revenues from rates charged for services, such as water and electric power utilities. Public corporations have varying degrees of independence from the central government and many have received appropriations or are due other payments from it. We also have loans to various municipalities for which the good faith, credit and unlimited taxing power of the applicable municipality has been pledged to their repayment. These municipalities are required by law to levy special property taxes in such amounts as shall be required for the payment of all their general obligation bonds and notes. Another portion of these loans consists of special obligations of various municipalities that are payable from the basic real and personal property taxes collected within such municipalities. The good faith and credit obligations of the municipalities have a first lien on the basic property taxes.

In the second quarter of 2014, the government enacted the Puerto Rico Public Corporation Debt Enforcement and Recovery Act (the “Recovery Act”), which establishes procedures for the adjustment of certain public corporations’ debts.  The Recovery Act states in its preamble that it further promotes the central government’s public policy objectives of no longer providing financial support to public corporations and promoting their economic independence.  The Recovery Act, which is without precedent and is being challenged in federal court on constitutional grounds, has increased the level of uncertainty as to the rights of the affected public corporation’s creditors. As of September 30, 2014, we had approximately $382.1 million of credit facilities granted to public corporations authorized to initiate proceedings under the Recovery Act.

Oriental Bank is part of a four bank syndicate providing a $550 million dollar revolving line of credit to finance the purchase of fuel for the day to day power generation activities of PREPA, a public corporation authorized to seek relief under the Recovery Act. The Bank’s participation in the line of credit has an unpaid principal balance of $200.0 million as of September 30, 2014. The Company, as part of the bank syndicate, agreed during the quarter to extend its credit facility with PREPA to March 31, 2015. In connection with such extension, PREPA appointed a Chief Restructuring Officer to work alongside the Executive Director to develop, organize and manage a financial and operational restructuring of PREPA subject to the approval of PREPA’s Board.  PREPA also committed to delivering a comprehensive business plan by December 15, 2014 and a full debt restructuring plan by March 2, 2015.  After the extension, the Company classified the credit as substandard and a troubled-debt restructuring. The Company conducted an impairment analysis considering the probability of collection of principal and interest. Based on the experience and knowledge of the borrower, independent scenarios were developed to assess the collectability of the Company’s current credit exposure to PREPA.  Such scenarios project very probable outcomes based on a conservative set of assumptions related to PREPA’s ability for future cash flow generation. The Company concluded that the loan should be maintained in accrual status requiring no impairment.

34

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

For residential and consumer loan classes, the Company evaluates credit quality based on the delinquency status of the loan. As of September 30, 2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of non-covered gross originated and other loans and acquired loans accounted for under ASC 310-20 not subject to risk rating by class of loans is as follows:

	September 30, 2014
	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	$	68,338	$	54,931	$	5,831	$	3,160	$	537	$	999	$	1,888	$	992
Years 2003 and 2004		62,344		49,747		6,309		1,730		221		1,623		1,489		1,225
Year 2005		88,431		66,895		6,451		3,236		831		3,768		3,659		3,591
Year 2006		113,211		90,157		9,821		5,471		1,740		2,479		1,759		1,784
Years 2007, 2008             and 2009		97,063		79,950		2,874		2,774		839		3,181		3,352		4,093
Years 2010, 2011, 2012             2013 and 2014		193,562		180,558		4,088		1,224		106		1,597		1,281		4,708
		622,949		522,238		35,374		17,595		4,274		13,647		13,428		16,393
Non-traditional		37,775		32,886		1,084		783		259		1,047		1,667		49
Loss mitigation program		89,583		9,249		1,665		789		628		1,022		980		75,250
		750,307		564,373		38,123		19,167		5,161		15,716		16,075		91,692
Home equity secured         personal loans		733		607		-		-		-		-		126		-
GNMA's buy-back         option program		40,066		-		-		-		8,825		18,512		12,729		-
		791,106		564,980		38,123		19,167		13,986		34,228		28,930		91,692
Consumer
Credit cards		17,857		17,022		238		189		140		268		-		-
Overdrafts		340		318		20		2		-		-		-		-
Unsecured personal lines of credit		2,051		1,823		67		132		-		26		3		-
Unsecured personal loans		138,608		135,169		1,586		614		579		22		-		638
Cash collateral personal loans		17,026		16,644		214		132		36		-		-		-
		175,882		170,976		2,125		1,069		755		316		3		638
Auto and Leasing		542,892		475,120		43,537		15,956		5,662		2,617		-		-
		1,509,880		1,211,076		83,785		36,192		20,403		37,161		28,933		92,330
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		43,682		40,053		1,625		678		483		843		-		-
Personal loans		3,602		3,293		160		83		32		34		-		-
		47,284		43,346		1,785		761		515		877		-		-
Auto		210,808		193,762		11,372		4,137		1,209		328		-		-
		258,092		237,108		13,157		4,898		1,724		1,205		-		-
Total	$	1,767,972	$	1,448,184	$	96,942	$	41,090	$	22,127	$	38,366	$	28,933	$	92,330

35

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2013
	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	$	76,512	$	64,743	$	6,594	$	1,634	$	868	$	1,082	$	1,458	$	133
Years 2003 and 2004		65,117		56,283		4,722		1,938		56		1,437		352		329
Year 2005		89,541		74,016		8,414		2,119		1,198		3,037		573		184
Year 2006		120,322		99,243		12,055		4,312		1,148		2,755		515		294
Years 2007, 2008             and 2009		101,150		91,920		3,464		1,104		1,264		2,844		554		-
Years 2010, 2011,             2012 and 2013		149,546		134,577		3,192		1,609		115		974		989		8,090
		602,188		520,782		38,441		12,716		4,649		12,129		4,441		9,030
Non-traditional		42,102		35,168		3,217		1,162		-		1,324		833		398
Loss mitigation program		86,318		7,762		1,376		149		624		312		1,029		75,066
		730,608		563,712		43,034		14,027		5,273		13,765		6,303		84,494
Home equity secured         personal loans		736		598		-		-		-		126		12		-
GNMA's buy-back         option program		34,921		-		-		-		7,670		14,425		12,826		-
		766,265		564,310		43,034		14,027		12,943		28,316		19,141		84,494
Consumer
Credit cards		15,241		14,555		287		168		118		113		-		-
Overdrafts		372		322		46		4		-		-		-		-
Unsecured personal lines of credit		1,981		1,844		33		38		25		34		7		-
Unsecured personal loans		94,560		92,102		1,272		399		300		39		13		435
Cash collateral personal loans		15,590		15,223		324		43		-		-		-		-
		127,744		124,046		1,962		652		443		186		20		435
Auto and Leasing		379,874		339,817		25,532		9,437		3,397		1,691		-		-
		1,273,883		1,028,173		70,528		24,116		16,783		30,193		19,161		84,929
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		52,199		46,713		2,217		1,200		828		1,241		-		-
Personal loans		3,975		3,681		196		7		60		31		-		-
		56,174		50,394		2,413		1,207		888		1,272		-		-
Auto		301,584		283,825		12,534		3,616		1,095		514		-		-
		357,758		334,219		14,947		4,823		1,983		1,786		-		-
Total	$	1,631,641	$	1,362,392	$	85,475	$	28,939	$	18,766	$	31,979	$	19,161	$	84,929

36

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 5 – ALLOWANCE FOR LOAN AND LEASE LOSSES

The composition of the Company’s allowance for loan and lease losses at September 30, 2014 and December 31, 2013 was as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Allowance for loans and lease losses on non-covered loans:
Originated and other loans and leases held for investment:
Mortgage	$	18,872	$	19,937
Commercial		9,112		14,897
Consumer		8,709		6,006
Auto and leasing		13,404		7,866
Unallocated		182		375
		50,279		49,081
Acquired loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		270		926
Consumer		1,031		-
Auto		3,159		1,428
		4,460		2,354
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy)
Commercial		10,115		1,713
Consumer		5		418
Auto		-		732
		10,120		2,863
		64,859		54,298
Allowance for loans and lease losses on covered loans:
Loans secured by 1-4 family residential properties		15,252		12,495
Commercial and other construction		46,586		39,619
Consumer		389		615
		62,227		52,729
Total allowance for loan and lease losses	$	127,086	$	107,027

Non-Covered Loans

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. While 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 loans 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 acquisition. As part of the Company’s continuous enhancement to the allowance for loan and lease losses methodology, during the quarter ended March 31, 2014, an assessment of the look-back period and historical loss factor was performed for auto and leasing and consumer loan portfolios based on the trends observed and their relation with the economic cycle as of the period ended March 31, 2014. Same analysis was performed for the commercial portfolio during the quarter ended June 30, 2014.  As a result, the look-back period was changed to 24 months from the previously determined 12 months for auto and leasing and consumer.  For the commercial portfolio, a look back period of 12 months was maintained.  In addition, during the quarter ended June 30, 2014, an assessment of environmental factors was performed for commercial, auto, and consumer portfolios. As a result, the environmental factors continue to reflect our assessment of the impact to our portfolio, taking into consideration the current evolution of the portfolio and expected impact, due to recent economic developments, changes in values of collateral and delinquencies, among others. These changes in the allowance for loan and

37

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

lease losses’ look-back period for the consumer and auto and leasing portfolios, and economic factors for the commercial, auto, and consumer portfolios are considered a change in accounting estimate as per ASC 250-10 provisions, where adjustments should be made prospectively. 

Originated and Other Loans and Leases Held for Investment

The following tables present the activity in our allowance for loan and lease losses and the related recorded investment of the associated loans for our originated and other loans held for investment portfolio by segment for the periods indicated:

	Quarter Ended September 30, 2014
							Auto and
	Mortgage		Commercial		Consumer		Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	19,062	$	12,423	$	7,887	$	11,127	$	139	$	50,638
Charge-offs		(1,563)		(1,081)		(1,585)		(7,393)		-		(11,622)
Recoveries		138		56		66		2,434		-		2,694
Provision (recapture) for non-covered             originated and other loan and lease losses		1,235		(2,286)		2,341		7,236		43		8,569
Balance at end of period	$	18,872	$	9,112	$	8,709	$	13,404	$	182	$	50,279
	Nine-Month Period Ended September 30, 2014
							Auto and
	Mortgage		Commercial		Consumer		Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	19,937	$	14,897	$	6,006	$	7,866	$	375	$	49,081
Charge-offs		(3,764)		(2,043)		(3,820)		(17,994)		-		(27,621)
Recoveries		374		269		457		6,094		-		7,194
Provision (recapture) for non-covered             originated and other loan and lease losses		2,325		(4,011)		6,066		17,438		(193)		21,625
Balance at end of period	$	18,872	$	9,112	$	8,709	$	13,404	$	182	$	50,279

	September 30, 2014
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on non-covered originated and other loans:
Ending allowance balance attributable       to loans:
Individually evaluated for impairment	$	7,932	$	1,108	$	-	$	-	$	-	$	9,040
Collectively evaluated for impairment		10,940		8,004		8,709		13,404		182		41,239
Total ending allowance balance	$	18,872	$	9,112	$	8,709	$	13,404	$	182	$	50,279
Loans:
Individually evaluated for impairment	$	91,692	$	226,583	$	-	$	-	$	-	$	318,275
Collectively evaluated for impairment		699,414		990,652		175,882		542,892		-		2,408,840
Total ending loan balance	$	791,106	$	1,217,235	$	175,882	$	542,892	$	-	$	2,727,115

38

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Quarter Ended September 30, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	21,375	$	17,624	$	2,341	$	3,641	$	720	$	45,701
Charge-offs		(1,758)		(2,234)		(465)		(1,305)		-		(5,762)
Recoveries		-		28		37		639		-		704
Provision for non-covered             originated and other loan and lease losses		1,374		(703)		2,915		3,143		201		6,930
Balance at end of period	$	20,991	$	14,715	$	4,828	$	6,118	$	921	$	47,573
	Nine-Month Period Ended September 30, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	21,092	$	17,072	$	856	$	533	$	368	$	39,921
Charge-offs		(33,465)		(5,678)		(1,034)		(2,105)		-		(42,282)
Recoveries		-		291		143		855		-		1,289
Provision for  non-covered             originated and other loan and lease losses		33,364		3,030		4,863		6,835		553		48,645
Balance at end of period	$	20,991	$	14,715	$	4,828	$	6,118	$	921	$	47,573

	December 31, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	8,708	$	1,431	$	-	$	-	$	-	$	10,139
Collectively evaluated for impairment		11,229		13,466		6,006		7,866		375		38,942
Total ending allowance balance	$	19,937	$	14,897	$	6,006	$	7,866	$	375	$	49,081
Loans:
Individually evaluated for impairment	$	84,494	$	28,145	$	-	$	-	$	-	$	112,639
Collectively evaluated for impairment		681,771		1,099,512		127,744		379,874		-		2,288,901
Total ending loans balance	$	766,265	$	1,127,657	$	127,744	$	379,874	$	-	$	2,401,540

39

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Acquired 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 non-covered acquired loan portfolio, excluding loans accounted for under ASC 310-30, for the periods indicated:

	Quarter Ended September 30, 2014
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses     for non-covered acquired loans      accounted for under ASC 310-20:
Balance at beginning of period	$	464	1	$	338	$	2,642	$	-	$	3,444
Charge-offs		(228)			(1,432)		(1,748)		-		(3,408)
Recoveries		35			139		519		-		693
Provision (recapture) for non-covered acquired             loan and lease losses accounted for             under ASC 310-20		(1)			1,986		1,746		-		3,731
Balance at end of period	$	270		$	1,031	$	3,159	$	-	$	4,460
	Nine-Month Period  Ended September 30, 2014
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses     for non-covered acquired loans      accounted for under ASC 310-20:
Balance at beginning of period	$	926	1	$	-	$	1,428	$	-	$	2,354
Charge-offs		(512)			(5,442)		(4,414)		-		(10,368)
Recoveries		65			363		1,504		-		1,932
Provision (recapture) for non-covered acquired             loan and lease losses accounted for             under ASC 310-20		(209)			6,110		4,641		-		10,542
Balance at end of period	$	270		$	1,031	$	3,159	$	-	$	4,460

	September 30, 2014
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on non-covered acquired loans accounted for under ASC 310-20:
Ending allowance balance attributable       to loans:
Collectively evaluated for impairment		270		1,031		3,159		-		4,460
Total ending allowance balance	$	270	$	1,031	$	3,159	$	-	$	4,460
Loans:
Collectively evaluated for impairment		26,984		47,284		210,808		-		285,076
Total ending loan balance	$	26,984	$	47,284	$	210,808	$	-	$	285,076

40

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Quarter Ended September 30, 2013
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses     for non-covered acquired loans      accounted for under ASC 310-20:
Balance at beginning of period	$	924	$ 1	$	-	$	-	$	-	$	924
Charge-offs		-			(1,233)		(1,598)		-		(2,831)
Recoveries		6			88		884		-		978
Provision (recapture)for non-covered acquired             loan and lease losses accounted for             under ASC 310-20		431			1,145		1,394		-		2,970
Balance at end of period	$	1,361		$	-	$	680	$	-	$	2,041
	Nine-Month Period Ended September 30, 2013
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses     for non-covered acquired loans      accounted for under ASC 310-20:
Balance at beginning of period	$	-	$ 1	$	-	$	-	$	-	$	-
Charge-offs		(25)			(3,847)		(4,723)		-		(8,595)
Recoveries		6			932		3,000		-		3,938
Provision (recapture) for non-covered acquired             loan and lease losses accounted for             under ASC 310-20		1,380			2,915		2,403		-		6,698
Balance at end of period	$	1,361		$	-	$	680	$	-	$	2,041

	December 31, 2013
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on non-covered acquired loans accounted for under ASC 310-20:
Ending allowance balance attributable       to loans:
Collectively evaluated for impairment		926		-		1,428		-		2,354
Total ending allowance balance	$	926	$	-	$	1,428	$	-	$	2,354
Loans:
Collectively evaluated for impairment		77,681		56,174		301,584		-		435,439
Total ending loan balance	$	77,681	$	56,174	$	301,584	$	-	$	435,439

41

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Acquired 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 associated loans in our non-covered acquired loan portfolio accounted for under ASC 310-30, for the periods indicated:

	Quarter Ended September 30, 2014
	Mortgage			Commercial			Construction			Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for non-covered loans accounted for under ASC 310-30:
Balance at beginning of period	$	-	1	$	6,216	1	$	-	$ 1	$	62	$	-	$	6,278
Provision(recapture) for non-covered acquired             loan and lease losses accounted for             under ASC 310-30		-			3,899			-			(57)		-		3,842
Balance at end of period	$	-		$	10,115		$	-		$	5	$	-	$	10,120
	Nine-Month Period Ended September 30, 2014
	Mortgage			Commercial			Construction			Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for non-covered loans accounted for under ASC 310-30:
Balance at beginning of period	$	-	1	$	1,713	1	$	-	1	$	418	$	732	$	2,863
Provision (recapture) for non-covered acquired             loan and lease losses accounted for             under ASC 310-30		-			8,402			-			(413)		(732)		7,257
Balance at end of period	$	-		$	10,115		$	-		$	5	$	-	$	10,120

Non-covered acquired loans accounted for under ASC 310-30 were recognized at fair value as of December 18, 2012, which included the impact of expected credit losses, and therefore, no allowance for credit losses was recorded during the nine-month period ended September 30, 2013.

42

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Covered Loans

For covered loans, 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 covered loans for the quarters and nine-month periods ended September 30, 2014 and 2013 were as follows:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Balance at beginning of the period	$	59,515	$	53,992	$	52,729	$	54,124
Provision for covered loan and lease losses, net		1,115		3,074		4,339		4,956
FDIC shared-loss portion of provision for (recapture of)
covered loan and lease losses, net		1,597		(511)		5,159		(2,525)
Balance at end of the period	$	62,227	$	56,555	$	62,227	$	56,555

FDIC shared-loss portion of provision for (recapture of) covered loans and lease losses net, represents the credit impairment losses to be covered under the FDIC loss-share agreement which is increasing (decreasing) the FDIC loss-share indemnification asset.

Net provision for covered loans includes both additional reserves and reserve releases for different pools. The pools for which there were releases are also subject to a reduction to the FDIC shared-loss indemnification asset because of lower expected losses which are recognized as recaptures.

43

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 6- FDIC INDEMNIFICATION ASSET AND TRUE-UP PAYMENT OBLIGATION

In connection with the FDIC assisted acquisition, the Bank and the FDIC entered into shared-loss agreements pursuant to which the FDIC covers a substantial portion of any losses on loans (and related unfunded loan commitments), foreclosed real estate and other repossessed properties covered by the agreements.

The acquired loans, foreclosed real estate, and other repossessed properties subject to the shared-loss agreements are collectively referred to as “covered assets.” Under the terms of the shared-loss agreements, the FDIC absorbs 80% of losses and shares in 80% of loss recoveries on covered assets. The term of the shared-loss agreement covering single family residential mortgage loans is ten years with respect to losses and loss recoveries, while the term of the shared-loss agreement covering commercial loans is five years with respect to losses and eight years with respect to loss recoveries, from the April 30, 2010 acquisition date. The shared-loss agreements also provide for certain costs directly related to the collection and preservation of covered assets to be reimbursed at an 80% level. The FDIC indemnification asset represents the portion of estimated losses covered by the shared-loss agreements between the Bank and the FDIC.

The following table presents the activity in the FDIC indemnification asset and true-up payment obligation for the quarters and nine month periods ended September 30, 2014 and 2013:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
FDIC indemnification asset:
Balance at beginning of period	$	143,660	$	253,379	$	189,240	$	302,295
Shared-loss agreements reimbursements from the FDIC		(12,837)		(14,036)		(31,537)		(32,732)
Increase (decrease) in expected credit losses to be       covered under shared-loss agreements, net		1,597		(510)		5,159		(2,525)
FDIC indemnification asset expense		(16,059)		(15,198)		(51,180)		(46,623)
Incurred expenses to be reimbursed under shared-loss agreements		4,258		1,947		8,937		5,167
Balance at end of period	$	120,619	$	225,582	$	120,619	$	225,582
True-up payment obligation:
Balance at beginning of period	$	20,231	$	16,907	$	18,510	$	15,496
Change in true-up payment obligation		875		767		2,596		2,178
Balance at end of period	$	21,106	$	17,674	$	21,106	$	17,674

The FDIC shared- loss expense bears an inverse relationship with a change in the yield of covered pools in accordance with ASC 310-30. ASC 310-30 dictates that such pools should be subject to increases in their yield when the present value of the expected cash flows is higher than the pool’s carrying balance. When the increases in cash flow expectations are driven by reductions in the expected credit losses, the Bank recognizes that such losses are no longer expected to be collected from the FDIC. Accordingly, the Bank reduces the FDIC indemnification asset by amortizing the reduction in expected collections throughout the remaining life of the underlying pools. This amortization is recognized in the FDIC shared-loss expense.

The underlying factors that caused an increase in the expected cash flows and resulting reduction in projected losses are derived from the pool-level cash flow forecasts. Credit loss assumptions used to develop each pool-level cash flow forecast are based on the behavior of defaults, recoveries and losses of the corresponding pool of covered loans.

44

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The FDIC indemnification asset expense of $16.1 million and $51.2 million for the quarter and nine-month period ended September 30, 2014 increased when compared to $15.2 million and $46.6 million for the same periods in 2013. These changes were caused by the ongoing evaluation of expected cash flows of the covered loan portfolio, which resulted in reduced projected losses expected to be collected from the FDIC and the improved accretable yield on the covered loans. Forecasted losses show a decreasing trend during the nine-month period ended September 30, 2014 as compared to the projections in 2013. The reduction in claimable losses amortizes the FDIC indemnification asset through the shorter of the life of the shared loss agreement or the loan holding period. This amortization is net of the accretion of the discount recorded to reflect the expected claimable loss at its net present value. During the quarter and nine-month period ended September 30, 2014, the net amortization included $2.6 million and $7.7 million of additional amortization of the FDIC indemnification asset from stepped up cost recoveries on certain construction, commercial, and leasing loan pools. Additional amortization of the FDIC indemnification asset may be recorded, should the Company continue to experience reduced expected losses. The majority of the FDIC indemnification asset, $84.3 million, is recorded for projected claimable losses on non-single family residential loans whose loss share period ends in the second quarter of 2015, although the period during which recoveries are shared extends for an additional three-years.

Also in connection with the FDIC assisted acquisition, the Bank agreed to make a true-up payment, also known as clawback liability or clawback provision, to the FDIC on the date that is 45 days following the last day (such day, the “True-Up Measurement Date”) of the final shared-loss month, or upon the final disposition of all covered assets under the shared-loss agreements in the event losses thereunder fail to reach expected levels. Under the shared-loss agreements, the Bank will pay to the FDIC 50% of the excess, if any, of: (i) 20% of the Intrinsic Loss Estimate of $906.0 million (or $181.2 million) (as determined by the FDIC) less (ii) the sum of: (A) 25% of the asset discount (per bid) (or $227.5 million); plus (B) 25% of the cumulative shared-loss payments (defined as the aggregate of all of the payments made or payable to the Bank minus the aggregate of all of the payments made or payable to the FDIC); plus (C) the sum of the period servicing amounts for every consecutive twelve-month period prior to and ending on the True-Up Measurement Date in respect of each of the shared-loss agreements during which the shared-loss provisions of the applicable shared-loss agreement is in effect (defined as the product of the simple average of the principal amount of shared-loss loans and shared-loss assets at the beginning and end of such period times 1%). The true-up payment represents an estimated liability of $21.1 million and $18.5 million, net of discount, as of September 30, 2014 and December 31, 2013, respectively. The estimated liability is included within accrued expenses and other liabilities in the unaudited consolidated statements of financial condition.

The true-up payment obligation, also known as clawback liability, may increase if actual and expected losses decline. The Company measures the true-up payment obligation at fair value. During the quarter and nine-month period ended September 30, 2014, the fair value of the true-up payment obligation increased by $875 thousand and $2.6 million, respectively, compared to increases of $767 thousand and $2.2 million for the same periods in 2013.  These changes in fair value are included as change in true-up payment obligation within FDIC shared-loss expense, net in the unaudited consolidated statements of operations.

The following table provides the fair value and the undiscounted amount of the true-up payment obligation at September 30, 2014 and December 31, 2013:  

	September 30,		December 31,
	2014		2013
	(In thousands)
Carrying amount (fair value)	$	21,106	$	18,510
Undiscounted amount	$	40,638	$	40,199

45

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 7 —  DERIVATIVES

The following table presents the Company’s derivative assets and liabilities at September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
	(In thousands)
Derivative assets:
Options tied to S&P 500 Index	$	5,762	$	16,430
Interest rate swaps designated as cash flow hedges		-		850
Interest rate swaps not designated as hedges		2,451		2,861
Interest rate caps		224		319
Other		8		42
	$	8,445	$	20,502
Derivative liabilities:
Interest rate swaps designated as cash flow hedges		8,717		11,757
Interest rate swaps not designated as hedges		2,451		2,861
Interest rate caps		224		319
Other		22		-
	$	11,414	$	14,937

Interest Rate Swaps

The Company enters into interest rate swap contracts to hedge the variability of future interest cash flows of forecasted wholesale borrowings attributable to changes in a predetermined variable index rate. The interest rate swaps effectively fix the Company’s interest payments on an amount of forecasted interest expense attributable to the variable index rate corresponding to the swap notional stated rate. These swaps are designated as cash flow hedges for the forecasted wholesale borrowing transactions, are properly documented as such, and therefore, qualify for cash flow hedge accounting. Any gain or loss associated with the effective portion of our cash flow hedges was recognized in other comprehensive income and is subsequently reclassified into earnings in the period during which the hedged forecasted transactions affect earnings. Changes in the fair value of these derivatives are recorded in accumulated other comprehensive income to the extent there is no significant ineffectiveness in the cash flow hedging relationships. Currently, the Company does not expect to reclassify any amount included in other comprehensive income related to these interest rate swaps to earnings in the next twelve months.

46

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table shows a summary of these swaps and their terms at September 30, 2014:

	Notional		Fixed	Variable	Trade	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date	Date
	(In thousands)
Interest Rate Swaps	$	25,000	2.4365%	1-Month LIBOR	05/05/11	05/04/12	05/04/16
		25,000	2.6200%	1-Month LIBOR	05/05/11	07/24/12	07/24/16
		25,000	2.6350%	1-Month LIBOR	05/05/11	07/30/12	07/30/16
		50,000	2.6590%	1-Month LIBOR	05/05/11	08/10/12	08/10/16
		100,000	2.6750%	1-Month LIBOR	05/05/11	08/16/12	08/16/16
		39,641	2.4210%	1-Month LIBOR	07/03/13	07/03/13	08/01/23
	$	264,641

An unrealized loss of $8.7 million was recognized in accumulated other comprehensive income related to the valuation of these swaps at September 30, 2014, and the related asset and liability are being reflected in the accompanying unaudited consolidated statements of financial condition.

At September 30, 2014 and December 31, 2013, interest rate swaps not designated as hedging instruments that were offered to clients represented an asset of $2.5 million and $2.9 million, respectively, and were included as part of derivative assets in the unaudited consolidated statements of financial position. The credit risk to these clients stemming from these derivatives, if any, is not material. At September 30, 2014 and December 31, 2013, interest rate swaps not designated as hedging instruments that are the mirror-images of the derivatives offered to clients represented a liability of $2.5 million and $2.9 million, respectively, and were included as part of derivative liabilities in the unaudited consolidated statements of financial condition.

The following table shows a summary of these interest rate swaps not designated as hedging instruments and their terms at September 30, 2014:

	Notional		Fixed	Variable	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date
	(In thousands)
Interest Rate Swaps - Derivatives Offered to Clients	$	4,003	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,503
Interest Rate Swaps - Mirror Image Derivatives	$	4,003	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,503

47

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Options Tied to Standard & Poor’s 500 Stock Market Index

The Company has offered its customers certificates of deposit with an option tied to the performance of the S&P 500 Index. The Company uses option agreements with major broker-dealers to manage its exposure to changes in this index. Under the terms of the option agreements, the Company receives the average increase in the month-end value of the index in exchange for a fixed premium. The changes in fair value of the option agreements used to manage the exposure in the stock market in the certificates of deposit are recorded in earnings. At September 30, 2014 and December 31, 2013, the purchased options used to manage exposure to the S&P 500 Index on stock indexed deposits represented an asset of $5.8 million (notional amount of $12.0 million) and $16.4 million (notional amount of $28.0 million), respectively, and the options sold to customers embedded in the certificates of deposit and recorded as deposits in the unaudited consolidated statements of financial condition, represented a liability of $5.6 million (notional amount of $11.6 million) and $15.7 million (notional amount of $26.9 million), respectively.

Interest rate caps

The Company has entered into interest rate cap transactions with various clients with floating-rate debt who wish to protect their financial results against increases in interest rates. In these cases, the Company simultaneously enters into mirror-image interest rate cap transactions with financial counterparties. None of these cap transactions qualify for hedge accounting, and therefore, they are marked to market through earnings. The outstanding total notional amount of interest rate caps was $110.0 million at September 30, 2014 and $94.0 million at December 31, 2013. At September 30, 2014 and December 31, 2013, the interest rate caps sold to clients represented a liability of $224 thousand and $319 thousand, respectively, and were included as part of derivative liabilities in the unaudited consolidated statements of financial condition. At September 30, 2014 and December 31, 2013, the interest rate caps purchased as mirror-images represented an asset of $224 thousand and $319 thousand, respectively, and were included as part of derivative assets in the unaudited consolidated statements of financial condition.

NOTE 8 — ACCRUED INTEREST RECEIVABLE ANDOTHER ASSETS

Accrued interest receivable at September 30, 2014 and December 31, 2013 consists of the following:

	September 30,		December 31,
	2014		2013
	(In thousands)
Non-covered loans	$	15,260	$	13,378
Investments		4,405		5,356
	$	19,665	$	18,734

Other assets at September 30, 2014 and December 31, 2013 consist of the following:

		September 30,		December 31,
	2014		2013
	(In thousands)
Prepaid expenses	$	18,375	$	15,439
Core deposit and customer relationship intangibles		10,285		11,912
Other repossessed assets		21,733		12,583
Mortgage tax credits		8,706		8,706
Investment in Statutory Trust		1,083		1,083
Accounts receivable and other assets		37,243		48,717
	$	97,425	$	98,440

48

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Prepaid expenses amounting to $18.4 million and $15.4 million at September 30, 2014 and December 31, 2013, respectively, include prepaid municipal, property and income taxes aggregating to $12.8 million and $8.6 million, respectively.

In connection with the FDIC-assisted acquisition and the BBVAPR Acquisition, the Company recorded a core deposit intangible representing the value of checking and savings deposits acquired. At September 30, 2014 and December 31, 2013, this core deposit intangible amounted to $6.8 million and $7.8 million, respectively. In addition, the Company recorded a customer relationship intangible amounting to $5.0 million representing the value of customer relationships acquired with the acquisition of the securities broker-dealer and insurance agency in the BBVAPR Acquisition as of December 31, 2012. At September 30, 2014 and December 31, 2013, this customer relationship intangible amounted to $3.5 million and $4.1 million, respectively.

Other repossessed assets totaled $21.7 million and $12.6 million at September 30, 2014 and December 31, 2013, respectively, include repossessed automobiles amounting to $21.0 million and $12.3 million, respectively, which are recorded at their net realizable value.

At both September 30, 2014 and December 31, 2013, tax credits for the Company totaled $8.7 million. These tax credits do not have an expiration date.

NOTE 9—  DEPOSITS AND RELATED INTEREST

Total deposits as of September 30, 2014 and December 31, 2013 consist of the following:

	September 30,		December 31,
	2014		2013
	(In thousands)
Non-interest bearing demand deposits	$	734,449	$	744,327
Interest-bearing savings and demand deposits		2,566,952		2,489,971
Individual retirement accounts		314,813		347,262
Retail certificates of deposit		455,286		568,367
Institutional certificates of deposit		328,031		405,224
Total core deposits		4,399,531		4,555,151
Brokered deposits		669,644		828,114
Total deposits	$	5,069,175	$	5,383,265

Brokered deposits include $575.8 million in certificates of deposits and $93.7 million in money market accounts at September 30, 2014, and $729.8 million in certificates of deposits and $98.3 million in money market accounts at December 31, 2013.

The weighted average interest rate of the Company’s deposits was 0.75% at September 30, 2014 and 0.73% at December 31, 2013, inclusive of non-interest bearing deposits of $734.4 million and $744.3 million, respectively. Interest expense for the quarters and nine-month periods ended September 30, 2014 and 2013 was as follows:

	Quarter Ended September 30,					Nine-Month Period Ended September 30,
	2014		2013			2014		2013
	(In thousands)
Demand and savings deposits	$	4,003	$	5,596	$	13,834	$	16,994
Certificates of deposit		3,658		5,738		11,970		13,763
	$	7,661	$	11,334	$	25,804	$	30,757

49

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At September 30, 2014 and December 31, 2013, demand and interest-bearing deposits and certificates of deposit included deposits of Puerto Rico Cash & Money Market Fund, Inc., which amounted to $108.9 million and $93.1 million, respectively, with a weighted average rate of 0.78% in both years, and were collateralized with investment securities with a fair value of $83.4 million and $67.5 million, respectively.

At September 30, 2014 and December 31, 2013, time deposits in denominations of $100 thousand or higher, excluding accrued interest and unamortized discounts, amounted to $681.6 million and $845.8 million, including public fund time deposits from various Puerto Rico government municipalities, agencies, and corporations of $20.8 million and $26.7 million, respectively, at a weighted average rate of 0.53% at September 30, 2014 and 0.32% at December 31, 2013.

At September 30, 2014 and December 31, 2013, total public fund deposits from various Puerto Rico government municipalities, agencies, and corporations amounted to $359.2 million and $328.6 million, respectively. These public funds were collateralized with commercial loans amounting to $416.0 million at September 30, 2014, and with investment securities with a fair value of $97.8 million and commercial loans amounting to $549.0 million at December 31, 2013.

Excluding equity indexed options in the amount of $4.4 million, which are used by the Company to manage its exposure to the S&P 500 Index, and also excluding accrued interest of $1.3 million and unamortized deposit discount in the amount of $1.1 million, the scheduled maturities of certificates of deposit at September 30, 2014 are as follows:

	September 30, 2014
	(In thousands)
Within one year:
Three (3) months or less	$	342,429
Over 3 months through 1 year		590,965
		933,394
Over 1 through 2 years		454,186
Over 2 through 3 years		210,567
Over 3 through 4 years		50,067
Over 4 through 5 years		18,926
	$	1,667,140

The table of scheduled maturities of certificates of deposits above includes brokered deposits.

The aggregate amount of overdrafts in demand deposit accounts that were reclassified to loans amounted to $890 thousand and $1.8 million as of September 30, 2014 and December 31, 2013, respectively.

50

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 10 —  BORROWINGS

Securities Sold under Agreements to Repurchase

At September 30, 2014, securities underlying agreements to repurchase were delivered to, and are being held by, the counterparties with whom the repurchase agreements were transacted. The counterparties have agreed to resell to the Company the same or similar securities at the maturity of these agreements.

At September 30, 2014 and December 31, 2013, securities sold under agreements to repurchase (classified by counterparty), excluding accrued interest in the amount of $2.2 million and $2.6 million, respectively, were as follows:

	September 30,				December 31,
	2014				2013
			Fair Value of				Fair Value of
	Borrowing		Underlying		Borrowing		Underlying
	Balance		Collateral		Balance		Collateral
	(In thousands)
JP Morgan Chase Bank NA		255,000		259,039		255,000		273,250
Credit Suisse Securities (USA) LLC		755,000		842,183		755,000		864,232
Deutsche Bank		-		-		255,000		272,053
Total	$	1,010,000	$	1,101,222	$	1,265,000	$	1,409,535

The following table shows a summary of the Company’s repurchase agreements and their terms, excluding accrued interest in the amount of $2.2 million, at September 30, 2014: 

			Weighted-
	Borrowing		Average		Maturity
Year of Maturity	Balance		Coupon	Settlement Date	Date
	(In thousands)
2014	$	85,000	0.675%	12/3/2012	12/3/2014
2015		255,000	0.840%	12/10/2012	6/13/2015
2016		170,000	1.500%	12/6/2012	12/8/2016
2017		500,000	4.780%	3/2/2007	3/2/2017
	$	1,010,000	2.831%

51

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents the repurchase liability associated with the repurchase agreement transactions (excluding accrued interest) by maturity. Also, it includes the carrying value and approximate market value of collateral (excluding accrued interest) at September 30, 2014 and December 31, 2013. The information excludes repurchase agreement transactions which were collateralized with securities or cash, or securities purchased under agreements to resell.

	September 30, 2014
					Market Value of Underlying Collateral
									CMOs		Obligations
			Weighted		FNMA and				issued by US		of US
	Repurchase		Average		FHLMC		GNMA		Government		Government
	Liability		Rate		Certificates		Certificates		Sponsored Agencies		Sponsored Agencies		Total
	(Dollars in thousands)
Less than 90 days		85,000		0.68%		95,420		2,061		-		-		97,481
Over 90 days		925,000		2.83%		1,003,070		671		-		-		1,003,741
Total	$	1,010,000		2.89%	$	1,098,490	$	2,732	$	-	$	-	$	1,101,222

	December 31, 2013
					Market Value of Underlying Collateral
									CMOs		Obligations
			Weighted		FNMA and				issued by US		of US
	Repurchase		Average		FHLMC		GNMA		Government		Government
	Liability		Rate		Certificates		Certificates		Sponsored Agencies		Sponsored Agencies		Total
	(Dollars in thousands)
Within 30 days	$	255,000		0.50%	$	216,201	$	-	$	48,923	$	6,929	$	272,053
Over 90 days		1,010,000		2.89%		1,018,632		3,000		45,100		3,720		1,070,452
Total	$	1,265,000		2.41%	$	1,234,833	$	3,000	$	94,023	$	10,649	$	1,342,505

Advances from the Federal Home Loan Bank of New York

Advances are received from the Federal Home Loan Bank of New York (the “FHLB-NY”) under an agreement whereby the Company is required to maintain a minimum amount of qualifying collateral with a fair value of at least 110% of the outstanding advances. At September 30, 2014 and December 31, 2013, these advances were secured by mortgage and commercial loans amounting to $1.2 billion and $1.3 billion, respectively. Also, at September 30, 2014 and December 31, 2013, the Company had an additional borrowing capacity with the FHLB-NY of $653.5 million and $674.2 million, respectively. At September 30, 2014 and December 31, 2013, the weighted average remaining maturity of FHLB’s advances was 9.4 months and 11.3 months, respectively. The original terms of these advances range between one day and seven years, and the FHLB-NY does not have the right to exercise put options at par on any advances outstanding as of September 30, 2014.

52

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table shows a summary of these advances and their terms, excluding accrued interest in the amount of $330 thousand, at September 30, 2014: 

			Weighted-
		Borrowing	Average		Maturity
Year of Maturity		Balance	Coupon	Settlement Date	Date
		(In thousands)
2014	$	25,000	0.36%	9/4/2014	10/6/2014
		50,000	0.37%	9/10/2014	10/10/2014
		100,000	0.36%	9/16/2014	10/16/2014
		25,000	0.32%	9/24/2014	10/24/2014
		25,000	0.30%	9/30/2014	10/30/2014
		39,641	0.37%	9/2/2014	10/1/2014
		264,641
2017		4,558	1.24%	4/3/2012	4/3/2017
2018		30,000	2.19%	1/16/2013	1/16/2018
		25,000	2.18%	1/16/2013	1/16/2018
		55,000
2020		10,259	2.59%	7/19/2013	7/20/2020
	$	334,458	0.74%

All of the advances referred to above with maturity dates up to the date of this report were renewed as one-month short-term advances.

Subordinated Capital Notes

Subordinated capital notes amounted to $101.2 million at September 30, 2014 and $100.0 million at December 31, 2013.

Under the requirements of Puerto Rico Banking Act, the Bank must establish a redemption fund for the subordinated capital notes by transferring from undivided profits pre-established amounts as follows:

	Redemption fund
	(In thousands)
Redemption fund - September 30, 2014	$	53,600
2014		1,675
2015		6,700
2016		5,025
	$	67,000

Other borrowings

Other borrowings, presented in the unaudited consolidated statement of financial condition amounted to $3.9 million and $3.7 million at September 30, 2014 and December 31, 2013, respectively, which mainly consists of unsecured fixed-rate borrowings and term notes tied to the appreciation of the S&P index. For both periods, the unsecured fixed rate borrowings amounted to $1.7 million at a fixed rate of 3.0%. The term notes tied to the S&P index amounted to $1.0 million at both September 30, 2014 and December 31, 2013 with an index appreciation of $1.1 million and $957 thousand, respectively.

53

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 11 – OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES

The Company’s derivatives are subject to agreements which allow a right of set-off with each respective counterparty. In addition, the Company’s securities purchased under agreements to resell and securities sold under agreements to repurchase have a right of set-off with the respective counterparty under the supplemental terms of the master repurchase agreements. In an event of default, each party has a right of set-off against the other party for amounts owed in the related agreements and any other amount or obligation owed in respect of any other agreement or transaction between them. Security collateral posted to open and maintain a master netting agreement with a counterparty, in the form of cash and securities, may from time to time be segregated in an account at a third-party custodian pursuant to a an account control agreement.

The following table presents the potential effect of rights of set-off associated with the Company’s recognized financial assets and liabilities at September 30, 2014 and December 31, 2013:

September 30, 2014
							Gross Amounts Not Offset in the Statement of Financial Condition
			Gross Amounts		Net Amount of
			Offset in the		Assets Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Assets		Condition		Condition		Instruments		Received		Amount
	(In thousands)
Derivatives	$	8,445	$	-	$	8,445	$	2,003	$	-	$	6,442
Total	$	8,445	$	-	$	8,445	$	2,003	$	-	$	6,442
December 31, 2013
							Gross Amounts Not Offset in the Statement of Financial Condition
			Gross Amounts		Net amount of
			Offset in the		Assets Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Assets		Condition		Condition		Instruments		Received		Amount
	(In thousands)
Derivatives	$	20,502	$	-	$	20,502	$	2,450	$	6,780	$	11,272
Securities purchased under agreements to resell		60,000		-		60,000		64,587		-		(4,587)
Total	$	80,502	$	-	$	80,502	$	67,037	$	6,780	$	6,685

54

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

September 30, 2014
							Gross Amounts Not Offset in the Statement of Financial Condition
					Net Amount of
			Gross Amounts		Liabilities
			Offset in the		Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Liabilities		Condition		Condition		Instruments		Provided		Amount
					(In thousands)
Derivatives	$	17,001	$	-	$	17,001	$	-	$	2,980	$	14,021
Securities sold under agreements to repurchase		1,010,000		-		1,010,000		1,101,222		24,500		(115,722)
Total	$	1,027,001	$	-	$	1,027,001	$	1,101,222	$	27,480	$	(101,701)
December 31, 2013
							Gross Amounts Not Offset in the Statement of Financial Condition
					Net Amount of
			Gross Amounts		Liabilities
			Offset in the		Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Liabilities		Condition		Condition		Instruments		Provided		Amount
	(In thousands)
Derivatives	$	30,672	$	-	$	30,672	$	-	$	2,349	$	28,323
Securities sold under agreements to repurchase		1,265,000		-		1,265,000		1,277,919		67,029		(79,948)
Total	$	1,295,672	$	-	$	1,295,672	$	1,277,919	$	69,378	$	(51,625)

NOTE 12 —  RELATED PARTY TRANSACTIONS

The Bank grants loans to its directors, executive officers and to certain related individuals or organizations in the ordinary course of business. These loans are offered at the same terms as loans to unrelated third parties. As of September 30, 2014 and December 31, 2013, these loan balances amounted to $25.6 million and $19.0 million, respectively. The activity and balance of these loans for the quarters and nine-month periods ended September 30, 2014 and 2013 were as follows:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Balance at the beginning of year	$	24,151	$	8,031	$	18,963	$	6,055
New loans		319		14,264		14,166		18,498
Repayments and sales		1,174		(3,289)		(7,485)		(5,315)
Credits of persons no longer         considered related parties		-		-		-		(232)
Balance at the end of year	$	25,644	$	19,006	$	25,644	$	19,006

55

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 13 —  INCOME TAXES

On July 1st, 2014 the Governor signed Act No. 77-2014, known as “Ley de Ajustes al Sistema Contributivo” (Act of Adjustments to the Tax System).  The main purpose of the Act is to increase government collections in order to alleviate the structural deficit. The most relevant provisions of the Act, as applicable to the Company, and effective for transactions held after June 30, 2014 are as follows: (1) the capital tax rate was increased from 15% to 20% and (2) for an asset to be considered long term capital asset, the holding period must be over a year, which before was defined with a holding period of over six months. 

Other provisions applicable to tax years commencing after December 31, 2013 is the additional tax on gross income (“patente nacional”) is defined as a separate tax, rather than a component of the Alternative Minimum Tax (AMT) for non-financial institutions and, therefore is not longer accounted for under the provisions of ASC 740.  For financial institutions, the additional tax on gross income remained mostly unaltered at a tax rate of 1% of its gross income of a taxable year, of which fifty percent (50%) may be claimed as a credit against the financial institution’s applicable income tax of that year.

At September 30, 2014 and December 31, 2013, the Company’s net deferred tax asset amounted to $121.2 million and $137.6 million, respectively. In assessing the realizability of the deferred tax asset, management considers whether it is more likely than not that some portion or the entire deferred tax asset will not be realized. The ultimate realization of the deferred tax asset is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.  Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.  Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax asset are deductible, management believes it is more likely than not that the Company will realize the entire deferred tax asset, net of the existing valuation allowances recorded at September 30, 2014 and December 31, 2013. The amount of the deferred tax asset that is considered realizable could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

At September 30, 2014 and December 31, 2013, Oriental International Bank Inc. (“OIB”), the Bank’s international banking entity subsidiary, had $198 thousand and $356 thousand, respectively, in income tax effect of unrecognized gain on available-for-sale securities included in other comprehensive income. Following the change in OIB’s applicable tax rate from 5% to 0% as a result of a Puerto Rico law adopted in 2011, this remaining tax balance will flow through income as these securities are repaid or sold in future periods. During the quarters ended September 30, 2014 and 2013, $11 thousand and $36 thousand, respectively, related to this residual tax effect from OIB was reclassified from accumulated other comprehensive income into income tax provision. During the nine-month periods ended September 30, 2014 and 2013, $158 thousand and $126 thousand, respectively, related to the residual effect from OIB was reclassified from accumulated other comprehensive income to income tax provision.

The Company classifies unrecognized tax benefits in income taxes payable. These gross unrecognized tax benefits would affect the effective tax rate if realized. The balance of unrecognized tax benefits at September 30, 2014 was $2.6 million (December 31, 2013 - $4.0 million). The Company had accrued $430 thousand at September 30, 2014 (December 31, 2013 - $1.2 million) for the payment of interest and penalties relating to unrecognized tax benefits. Also, during this quarter the Company recorded a reversal of an income tax contingency of $1.0 million as a result of reviewing the positions of certain unrecognized tax benefits at the Bank. 

Income tax expense was $8.0 million for the quarter ended September 30, 2014, compared to $6.6 million for the same period in 2013. Effective July 1, 2014, capital gains tax rate was increased from 15% to 20% as explained above.  

56

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 14 —  STOCKHOLDERS’ EQUITY

Regulatory Capital Requirements

The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by federal and Puerto Rico banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Pursuant to the Dodd-Frank Act, federal banking regulators have adopted new capital rules that became effective January 1, 2014 for advanced approaches banking organizations and will become effective January 1, 2015 for all other covered organizations (subject to certain phase-in periods through January 1, 2019) and that will replace their general risk-based capital rules, advanced approaches rule, market risk rule, and leverage rules. Quantitative measures established by regulation to ensure capital adequacy currently require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations) and of Tier 1 capital to average total assets (as defined in the regulations). As of September 30, 2014 and December 31, 2013, the Company and the Bank met all capital adequacy requirements to which they are subject. As of September 30, 2014 and December 31, 2013, the Bank is “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” an institution must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the tables presented below.

The Company’s and the Bank’s actual capital amounts and ratios as of September 30, 2014 and December 31, 2013 are as follows:

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio		Amount	Ratio
	(Dollars in thousands)
Company Ratios
As of September 30, 2014
Total capital to risk-weighted assets	$	858,356	17.50%	$	392,465	8.00%	$	490,581	10.00%
Tier 1 capital to risk-weighted assets	$	782,797	15.96%	$	196,233	4.00%	$	294,349	6.00%
Tier 1 capital to average total assets	$	782,797	10.51%	$	297,984	4.00%	$	372,480	5.00%
As of December 31, 2013
Total capital to risk-weighted assets	$	827,459	16.16%	$	409,514	8.00%	$	511,893	10.00%
Tier 1 capital to risk-weighted assets	$	736,106	14.38%	$	204,757	4.00%	$	307,136	6.00%
Tier 1 capital to average total assets	$	736,106	9.06%	$	324,910	4.00%	$	406,138	5.00%

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Bank Ratios
As of September 30, 2014
Total capital to risk-weighted assets	$	813,760	16.66%	$	390,644	8.00%	$	488,305	10.00%
Tier 1 capital to risk-weighted assets	$	738,482	15.12%	$	195,322	4.00%	$	292,983	6.00%
Tier 1 capital to average total assets	$	738,482	9.99%	$	295,673	4.00%	$	369,592	5.00%
As of December 31, 2013
Total capital to risk-weighted assets	$	779,413	15.30%	$	407,637	8.00%	$	509,547	10.00%
Tier 1 capital to risk-weighted assets	$	688,350	13.51%	$	203,819	4.00%	$	305,728	6.00%
Tier 1 capital to average total assets	$	688,350	8.54%	$	322,395	4.00%	$	402,993	5.00%

57

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

    Additional Paid-in Capital

Additional paid-in capital represents contributed capital in excess of par value of common and preferred stock net of the costs of issuance. As of September 30, 2014, accumulated issuance costs charged against additional paid in capital amounted to $10.1 million and $13.6 million for preferred and common stock, respectively.

Treasury Stock

Under the Company’s current stock repurchase program it is authorized to purchase in the open market up to $70 million of its outstanding shares of common stock, of which approximately $23.2 million of authority remains. The shares of common stock repurchased are to be held by the Company as treasury shares. During the nine-month period ended September 30, 2014, the Company purchased 707,500 shares under this program for a total of $10.4 million, at an average price of $14.66 per share. There were no repurchases during 2013.

The following table presents the shares repurchased for each month in the nine-month period ended September 30, 2014, excluding the months of March, April, May, June, July and September of 2014, during which no shares were purchased as part of the stock repurchase program:

	Total number of				Dollar amount of
	shares purchased as		Average		shares repurchased
		part of stock	price paid		(excluding
	repurchase programs		per share		commissions paid)
						(In thousands)
Period
January 2014		57,700	$	14.73	$	850
February 2014		649,700		14.66		9,522
August 2014		100		15.50		2
Nine-Month Period Ended September 30, 2014		707,500	$	14.66	$	10,374

The number of shares that may yet be purchased under the $70 million program is estimated at 1,548,481 and was calculated by dividing the remaining balance of $23.2 million by $14.98 (closing price of the Company common stock at September 30, 2014). The Company did not purchase any shares of its common stock other than through its publicly announced stock repurchase program during the nine-months ended September 30, 2014.

The activity in connection with common shares held in treasury by the Company for the nine-month periods ended September 30, 2014 and 2013 is set forth below:

	Nine-Month Period  Ended September 30,
	2014			2013
		Dollar			Dollar
	Shares	Amount		Shares	Amount
	(In thousands, except shares data)
Beginning of period	7,030,101	$	80,642	7,090,597	$	81,275
Common shares used upon lapse of restricted stock units	(36,294)		(384)	(53,178)		(556)
Common shares repurchased as part of the stock repurchase program	707,500		10,394	-		-
Common shares used to match defined contribution plan, net	-		-	(7,318)		(77)
End of period	7,701,307	$	90,652	7,030,101	$	80,642

58

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 15 - ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income, net of income tax, as of September 30, 2014 and December 31, 2013 consisted of:

	September 30,		December 31,
	2014		2013
	(In thousands)
Unrealized gain on securities available-for-sale which are not     other-than-temporarily impaired	$	23,995	$	13,267
Income tax effect of unrealized gain on securities available-for-sale		(3,677)		(1,834)
Net unrealized gain on securities available-for-sale which are not         other-than-temporarily impaired		20,318		11,433
Unrealized loss on cash flow hedges		(8,717)		(10,907)
Income tax effect of unrealized loss on cash flow hedges		1,810		2,665
Net unrealized loss on cash flow hedges		(6,907)		(8,242)
Accumulated other comprehensive income, net of taxes	$	13,411	$	3,191

The following table presents changes in accumulated other comprehensive income by component, net of taxes, for the quarters and nine-month periods ended September 30, 2014 and 2013:

	Quarter Ended September 30,
	2014						2013
	Net unrealized		Net unrealized		Accumulated		Net unrealized		Net unrealized		Accumulated
	gains on		loss on		other		gains on		loss on		other
	securities		cash flow		comprehensive		securities		cash flow		comprehensive
	available-for-sale		hedges		income		available-for-sale		hedges		income
	(In thousands)
Beginning balance	$	29,759	$	(8,004)	$	21,755	$	25,400	$	(9,634)	$	15,766
Other comprehensive income (loss) before reclassifications		(9,452)		(559)		(10,011)		(5,113)		(1,509)		(6,622)
Amounts reclassified out of accumulated other comprehensive income		11		1,656		1,667		37		1,651		1,688
Other comprehensive income (loss)		(9,441)		1,097		(8,344)		(5,076)		142		(4,934)
Ending balance	$	20,318	$	(6,907)	$	13,411	$	20,324	$	(9,492)	$	10,832
	Nine-Month Period Ended September 30,
	2014						2013
	Net unrealized		Net unrealized		Accumulated		Net unrealized		Net unrealized		Accumulated
	gains on		loss on		other		gains on		loss on		other
	securities		cash flow		comprehensive		securities		cash flow		comprehensive
	available-for-sale		hedges		income		available-for-sale		hedges		income
	(In thousands)
Beginning balance	$	11,433	$	(8,242)	$	3,191	$	68,245	$	(12,365)	$	55,880
Other comprehensive income before reclassifications		8,727		(3,584)		5,143		(48,047)		(1,530)		(49,577)
Amounts reclassified out of accumulated other comprehensive income		158		4,919		5,077		126		4,403		4,529
Other comprehensive income (loss)		8,885		1,335		10,220		(47,921)		2,873		(45,048)
Ending balance	$	20,318	$	(6,907)	$	13,411		20,324	$	(9,492)	$	10,832

59

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents reclassifications out of accumulated other comprehensive income for the quarters and nine-month periods ended September 30, 2014 and 2013:

	Amount reclassified out of accumulated
	other comprehensive income
		Quarter Ended		Nine-Month Period	Affected Line Item in
		September 30, 2014		Ended September 30, 2014	Consolidated Statement
					of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	1,656	$	4,919	Net interest expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		11		158	Income tax expense
	$	1,667	$	5,077
	Amount reclassified out of accumulated
	other comprehensive income
		Quarter Ended		Nine-Month Period	Affected Line Item in
		September 30, 2013		Ended September 30, 2013	Consolidated Statement
					of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	1,651	$	4,403	Net interest expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		37		126	Income tax expense
	$	1,688	$	4,529

60

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 16 – EARNINGS PER COMMON SHARE

The calculation of earnings per common share for the quarters and nine-month periods ended September 30, 2014 and 2013 is as follows:

	Quarter ended September 30 ,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands, except per share data)
Net income	$	19,532	$	19,621	$	64,588	$	78,352
Less: Dividends on preferred stock
Non-convertible preferred stock (Series A, B, and D)		(1,627)		(1,628)		(4,882)		(4,884)
Convertible preferred stock (Series C)		(1,838)		(1,837)		(5,514)		(5,512)
Income available to common shareholders	$	16,067	$	16,156	$	54,192	$	67,956
Effect of assumed conversion of the convertible                    '     '  preferred stock		1,838		1,837		5,514		5,512
Income available to common shareholders assuming conversion	$	17,905	$	17,993	$	59,706	$	73,468
Weighted average common shares and share equivalents:
Average common shares outstanding		45,055		45,927		45,131		45,717
Effect of dilutive securities:
Average potential common shares-options		160		257		162		198
Average potential common shares-assuming                    '     '  conversion of convertible preferred stock		7,147		7,138		7,147		7,138
Total weighted average common shares                       '  'outstanding and equivalents		52,362		53,322		52,440		53,053
Earnings per common share - basic	$	0.36	$	0.35	$	1.20	$	1.49
Earnings per common share - diluted	$	0.34	$	0.34	$	1.14	$	1.39

In computing diluted earnings per common share, the 84,000 shares of convertible preferred stock, which remain outstanding at September 30, 2014, with a conversion rate, subject to certain conditions, of 85.2719 shares of common stock per share, were included as average potential common shares from the date they were issued and outstanding. Moreover, in computing diluted earnings per common share, the dividends declared during the quarters ended September 30, 2014 and 2013 on the convertible preferred stock were added back as income available to common shareholders.

For the quarters ended September 30, 2014 and 2013, weighted-average stock options with an anti-dilutive effect on earnings per share not included in the calculation amounted to 397,766 and 196,425, respectively. For the nine-month periods ended September 30, 2014 and 2013, weighted-average stock options with an anti-dilutive effect on earnings per share not included in the calculation amounted to 325,994 and 233,775, respectively.

61

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 17 – GUARANTEES

At September 30, 2014, the unamortized balance of the obligations undertaken in issuing the guarantees under standby letters of credit represented a liability of $37.1 million (December 31, 2013 - $38.6 million).

As a result of the BBVAPR Acquisition, the Company assumed a liability for residential mortgage loans sold subject to credit recourse, pursuant to FNMA’s residential mortgage loan sales and securitization programs. At September 30, 2014 and December 31, 2013, the unpaid principal balance of residential mortgage loans sold subject to credit recourse was $98.4 million and $122.3 million, respectively.

The following table shows the changes in the Company’s liability for estimated losses from these credit recourse agreements, included in the unaudited consolidated statements of financial condition during the quarters and nine-month periods ended September 30, 2014 and 2013.

	Quarter Ended September 30,					Nine-Month Period Ended September 30,
	2014		2013			2014		2013
	(In thousands)
Balance at beginning of period	$	1,310	$	2,460	$	1,955	$	2,460
Net charge-offs/terminations		(232)		-		(877)		-
Balance at end of period	$	1,078	$	2,460	$	1,078	$	2,460

The estimated losses to be absorbed under the credit recourse arrangements were recorded as a liability when the credit recourse was assumed, and are updated on a quarterly basis. The expected loss, which represents the amount expected to be lost on a given loan, considers the probability of default and loss severity. The probability of default represents the probability that a loan in good standing would become 120 days delinquent, in which case the Company is obligated to repurchase the loan. At September 30, 2014, $68.4 million or 70% of the recourse obligation will be extinguished during the next two years.

If a borrower defaults, pursuant to the credit recourse provided, the Company is required to repurchase the loan or reimburse the third party investor for the incurred loss. The maximum potential amount of future payments that the Company would be required to make under the recourse arrangements is equivalent to the total outstanding balance of the residential mortgage loans serviced with recourse and interest, if applicable. During the quarter and nine-month period ended September 30, 2014, the Company repurchased approximately $1.9 million and $5.6 million of unpaid principal balance in mortgage loans subject to the credit recourse provisions. If a borrower defaults, the Company has rights to the underlying collateral securing the mortgage loan. The Company suffers losses on these mortgage loans when the proceeds from a foreclosure sale of the collateral property are less than the outstanding principal balance of the loan, any uncollected interest advanced, and the costs of holding and disposing the related property. At September 30, 2014 and December 31, 2013, the Company’s liability for estimated credit losses related to loans sold with credit recourse amounted to $1.1 million (December 31, 2013 – $2.0 million).

62

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

When the Company sells or securitizes mortgage loans, it generally makes customary representations and warranties regarding the characteristics of the loans sold. The Company's mortgage operations division groups conforming mortgage loans into pools which are exchanged for FNMA and GNMA mortgage-backed securities, which are generally sold to private investors, or are sold directly to FNMA or other private investors for cash. As required under such mortgage backed securities programs, quality review procedures are performed by the Company to ensure that asset guideline qualifications are met. To the extent the loans do not meet specified characteristics, the Company may be required to repurchase such loans or indemnify for losses and bear any subsequent loss related to the loans. Repurchases during the quarter and nine-month period ended September 30, 2014 under the Company’s representation and warranty arrangements, excluding mortgage loans subject to credit recourse provisions referred to above, approximated $4.1 million and $9.2 million, respectively, in unpaid principal balance. A substantial amount of these loans are reinstated to performing status or have mortgage insurance, and thus the ultimate losses on the loans are not deemed significant.

During the quarter and nine-month period ended September 30, 2014, the Company recognized $115 thousand and $261 thousand in losses from the repurchase of residential mortgage loans sold subject to credit recourse, and $979 thousand and $1.9 million in losses from the repurchase of residential mortgage loans as a result of breaches of the customary representations and warranties. During the quarter and nine-month period ended September 30, 2013, the Company did not recognized any losses from the repurchase of residential mortgage loans sold subject to credit recourse, but for the nine-month period ended September 30, 2013, recognized $477 thousand in losses from the repurchase of residential mortgage loans as a result of breaches of the customary representations and warranties.

Servicing agreements relating to the mortgage-backed securities programs of FNMA and GNMA, and to mortgage loans sold or serviced to certain other investors, including the Federal Home Loan Mortgage Corporation (“FHLMC”), require the Company to advance funds to make scheduled payments of principal, interest, taxes and insurance, if such payments have not been received from the borrowers. At September 30, 2014, the Company serviced $1.2 billion in mortgage loans for third-parties. The Company generally recovers funds advanced pursuant to these arrangements from the mortgage owner, from liquidation proceeds when the mortgage loan is foreclosed or, in the case of FHA/VA loans, under the applicable FHA and VA insurance and guarantees programs. However, in the meantime, the Company must absorb the cost of the funds it advances during the time the advance is outstanding. The Company must also bear the costs of attempting to collect on delinquent and defaulted mortgage loans. In addition, if a defaulted loan is not cured, the mortgage loan would be canceled as part of the foreclosure proceedings and the Company would not receive any future servicing income with respect to that loan. At September 30, 2014, the outstanding balance of funds advanced by the Company under such mortgage loan servicing agreements was approximately $319 thousand (December 31, 2013 - $243 thousand). To the extent the mortgage loans underlying the Company's servicing portfolio experience increased delinquencies, the Company would be required to dedicate additional cash resources to comply with its obligation to advance funds as well as incur additional administrative costs related to increases in collection efforts.

63

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 18 —  COMMITMENTS AND CONTINGENCIES

Loan Commitments

In the normal course of business, the Company becomes a party to credit-related financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby and commercial letters of credit, and financial guarantees. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated statements of financial condition. The contract or notional amount of those instruments reflects the extent of the Company’s involvement in particular types of financial instruments.

The Company’s exposure to credit losses in the event of nonperformance by the counterparty to the financial instrument for commitments to extend credit, including commitments under credit card arrangements, and commercial letters of credit is represented by the contractual notional amounts of those instruments, which do not necessarily represent the amounts potentially subject to risk. In addition, the measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are identified. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

Credit-related financial instruments at September 30, 2014 and December 31, 2013 were as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Commitments to extend credit	$	476,523	$	520,269
Commercial letters of credit		1,193		1,096

Commitments to extend credit represent agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Company upon the extension of credit, is based on management’s credit evaluation of the counterparty.

At September 30, 2014 and December 31, 2013, commitments to extend credit consisted mainly of undisbursed available amounts on commercial lines of credit, construction loans, and revolving credit card arrangements. Since many of the unused commitments are expected to expire unused or be only partially used, the total amount of these unused commitments does not necessarily represent future cash requirements. These lines of credit had a reserve of $900 thousand at both September 30, 2014 and December 31, 2013.

Commercial letters of credit are issued or confirmed to guarantee payment of customers’ payables or receivables in short-term international trade transactions. Generally, drafts will be drawn when the underlying transaction is consummated as intended. However, the short-term nature of this instrument serves to mitigate the risk associated with these contracts.

64

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The summary of instruments that are considered financial guarantees in accordance with the authoritative guidance related to guarantor’s accounting and disclosure requirements for guarantees, including indirect guarantees of indebtedness of others, at September 30, 2014 and December 31, 2013, is as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Standby letters of credit and financial guarantees	$	37,145	$	38,577
Loans sold with recourse		98,433		122,291
Commitments to sell or securitize mortgage loans		34,650		80,307

Standby letters of credit and financial guarantees are written conditional commitments issued by the Company to guarantee the payment and/or performance of a customer to a third party (“beneficiary”). If the customer fails to comply with the agreement, the beneficiary may draw on the standby letter of credit or financial guarantee as a remedy. The amount of credit risk involved in issuing letters of credit in the event of nonperformance is the face amount of the letter of credit or financial guarantee. These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer.

Lease Commitments

The Company has entered into various operating lease agreements for branch facilities and administrative offices. Rent expense for the quarters ended September 30, 2014 and 2013 amounted to $2.4 million and $2.5 million, respectively, and is included in the “occupancy and equipment” caption in the unaudited consolidated statements of operations. For the nine-month periods ended September 30, 2014 and 2013, rent expense amounted to $7.3 million and $7.7 million, respectively. Future rental commitments under leases in effect at September 30, 2014, exclusive of taxes, insurance, and maintenance expenses payable by the Company, are summarized as follows:

Year Ending  December 31,	Minimum Rent
	(In thousands)
2014 (October 1 to December 31)	$	2,221
2015		8,026
2016		7,435
2017		6,807
2018		5,928
Thereafter		22,239
	$	52,656

65

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Contingencies

The Company and its subsidiaries are defendants in a number of legal proceedings incidental to their business. In the ordinary course of business, the Company and its subsidiaries are also subject to governmental and regulatory examinations. Certain subsidiaries of the Company, including the Bank (and its subsidiary OIB), Oriental Financial Services, and Oriental Insurance, are subject to regulation by various U.S., Puerto Rico and other regulators.

The Company seeks to resolve all litigation and regulatory matters in the manner management believes is in the best interests of the Company and its shareholders, and contests allegations of liability or wrongdoing and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter.

Subject to the accounting and disclosure framework under the provisions of ASC 450, it is the opinion of the Company’s management, based on current knowledge and after taking into account its current legal accruals, that the eventual outcome of all matters would not be likely to have a material adverse effect on the consolidated statements of financial condition of the Company. Nonetheless, given the substantial or indeterminate amounts sought in certain of these matters, and the inherent unpredictability of such matters, an adverse outcome in certain of these matters could, from time to time, have a material adverse effect on the Company’s consolidated results of operations or cash flows in particular quarterly or annual periods. The Company has evaluated all litigation and regulatory matters where the likelihood of a potential loss is deemed reasonably possible. The Company has determined that the estimate of the reasonably possible loss is not significant.

NOTE 19 - FAIR VALUEOF FINANCIAL INSTRUMENTS

The Company follows the fair value measurement framework under GAAP.

Fair Value Measurement

The fair value measurement framework defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This framework also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs previously described that may be used to measure fair value.

Money market investments

The fair value of money market investments is based on the carrying amounts reflected in the consolidated statements of financial condition as these are reasonable estimates of fair value given the short-term nature of the instruments.

Investment securities

The fair value of investment securities is based on quoted market prices, when available, or market prices provided by recognized broker-dealers. Such securities are classified as level 1 or level 2 depending on the basis for determining fair value. If listed prices or quotes are not available, fair value is based upon externally developed models that use both observable and unobservable inputs depending on the market activity of the instrument, and such securities are classified as level 3. At December 31, 2013, the Company held two securities categorized as other debt that are classified as Level 3. At September 30, 2014, the Company did not have securities classified as Level 3. The estimated fair value of the other debt securities was determined by using a third-party model to calculate the present value of projected future cash flows. The assumptions are highly uncertain and include primarily market discount rates, current spreads, and an indicative pricing.

66

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Securities purchased under agreements to resell

The fair value of securities purchased under agreements to resell is based on the carrying amounts reflected in the consolidated statements of financial condition as these are reasonable estimates of fair value given the short-term nature of the instruments.

Derivative instruments

The fair value of the interest rate swaps is largely a function of the financial market’s expectations regarding the future direction of interest rates. Accordingly, current market values are not necessarily indicative of the future impact of derivative instruments on earnings. This will depend, for the most part, on the shape of the yield curve, the level of interest rates, as well as the expectations for rates in the future. The fair value of most of these derivative instruments is based on observable market parameters, which include discounting the instruments’ cash flows using the U.S. dollar LIBOR-based discount rates, and also applying yield curves that account for the industry sector and the credit rating of the counterparty and/or the Company.

Certain other derivative instruments with limited market activity are valued using externally developed models that consider unobservable market parameters. Based on their valuation methodology, derivative instruments are classified as Level 2 or Level 3. The Company has offered its customers certificates of deposit with an option tied to the performance of the S&P Index and uses equity indexed option agreements with major broker-dealers to manage its exposure to changes in this index. Their fair value is obtained through the use of an external based valuation that was thoroughly evaluated and adopted by management as its measurement tool for these options. The payoff of these options is linked to the average value of the S&P Index on a specific set of dates during the life of the option. The methodology uses an average rate option or a cash-settled option whose payoff is based on the difference between the expected average value of the S&P Index during the remaining life of the option and the strike price at inception. The assumptions, which are uncertain and require a degree of judgment, include primarily S&P Index volatility, forward interest rate projections, estimated index dividend payout, and leverage.

Servicing assets

Servicing assets do not trade in an active market with readily observable prices. Servicing assets are priced using a discounted cash flow model. The valuation model considers servicing fees, portfolio characteristics, prepayment assumptions, delinquency rates, late charges, other ancillary revenues, cost to service and other economic factors. Due to the unobservable nature of certain valuation inputs, the servicing rights are classified as Level 3.

Loans receivable considered impaired that are collateral dependent

The impairment is measured based on the fair value of the collateral, which is derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations, in accordance with the provisions of ASC 310-10-35. Currently, the associated loans considered impaired are classified as Level 3.

Foreclosed real estate

Foreclosed real estate includes real estate properties securing residential mortgage and commercial loans. The fair value of foreclosed real estate may be determined using an external appraisal, broker price option or an internal valuation. These foreclosed assets are classified as Level 3 given certain internal adjustments that may be made to external appraisals

Other repossessed assets

Other repossessed assets include repossessed automobile loans and leases. The fair value of the repossessed automobiles may be determined using internal valuation and an external appraisal. These repossessed assets are classified as Level 3 given certain internal adjustments that may be made to external appraisals.

67

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Assets and liabilities measured at fair value on a recurring and non-recurring basis, including financial liabilities for which the Company has elected the fair value option, are summarized below:

	September 30, 2014
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	1,273,879	$	-	$	1,273,879
Money market investments		7,777		-		-		7,777
Derivative assets		-		2,683		5,762		8,445
Servicing assets		-		-		13,986		13,986
Derivative liabilities		-		(11,414)		(5,588)		(17,002)
	$	7,777	$	1,265,148	$	14,160	$	1,287,085
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	226,791	$	226,791
Foreclosed real estate		-		-		100,564		100,564
Other repossessed assets		-		-		21,733		21,733
	$	-	$	-	$	349,088	$	349,088

	December 31, 2013
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	1,568,745	$	19,680	$	1,588,425
Securities purchased under agreements to resell		-		60,000		-		60,000
Money market investments		6,967		-		-		6,967
Derivative assets		-		4,072		16,430		20,502
Servicing assets		-		-		13,801		13,801
Derivative liabilities		-		(14,937)		(15,736)		(30,673)
	$	6,967	$	1,617,880	$	34,175	$	1,659,022
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	28,353	$	28,353
Foreclosed real estate		-		-		90,024		90,024
Other repossessed assets		-		-		12,583		12,583
	$	-	$	-	$	130,960	$	130,960

68

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The table below presents a reconciliation 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, 2014 and 2013:

	Quarter Ended September 30, 2014
			Derivative				Derivative
	Other		asset				liability
	debt		(S&P				(S&P
	securities		Purchased		Servicing		Embedded
Level 3 Instruments Only	available-for-sale		Options)		assets		Options)		Total
Balance at beginning of period	$	-	$	6,580	$	13,970	$	(6,368)	$	14,182
Gains (losses) included in earnings		-		(818)		-		675		(143)
New instruments acquired		-		-		554		-		554
Principal repayments		-		-		(427)		-		(427)
Amortization		-		-		-		105		105
Changes in fair value of servicing assets		-		-		(111)		-		(111)
Balance at end of period	$	-	$	5,762	$	13,986	$	(5,588)	$	14,160
	Nine-Month Period Ended September 30, 2014
			Derivative				Derivative
	Other		asset				liability
	debt		(S&P				(S&P
	securities		Purchased		Servicing		Embedded
Level 3 Instruments Only	available-for-sale		Options)		assets		Options)		Total
Balance at beginning of period	$	19,680	$	16,430	$	13,801	$	(15,736)	$	34,175
Gains (losses) included in earnings		-		(10,668)		-		9,639		(1,029)
Changes in fair value of investment         securities available for sale included         in other comprehensive income		320		-		-		-		320
New instruments acquired		-		-		1,608		-		1,608
Principal repayments		(20,000)		-		(799)		-		(20,799)
Amortization		-		-		-		509		509
Changes in fair value of servicing assets		-		-		(624)		-		(624)
Balance at end of period	$	-	$	5,762	$	13,986	$	(5,588)	$	14,160

69

OFG BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Quarter Ended September 30, 2013
			Derivative				Derivative
	Other		asset				liability
	debt		(S&P				(S&P
	securities		Purchased			Servicing	Embedded
Level 3 Instruments Only	available-for-sale		Options)			assets	Options)		Total
Balance at beginning of period	$	20,058	$	16,020	$	12,994	$	(15,315)	$	33,757
Gains (losses) included in earnings		-		1,921		-		(1,994)		(73)
Changes in fair value of investment         securities available for sale included         in other comprehensive income		(552)		-		-		-		(552)
New instruments acquired		-		-		704		-		704
Principal repayments		-		-		(309)		-		(309)
Amortization		-		-		-		110		110
Changes in fair value of servicing assets		-		-		262		-		262
Balance at end of period	$	19,506	$	17,941	$	13,651	$	(17,199)	$	33,899
	Nine-Month Period Ended September 30, 2013
			Derivative					Derivative
	Other		asset					liability
	debt		(S&P					(S&P
	securities		Purchased			Servicing		Embedded
Level 3 Instruments Only	available-for-sale		Options)			assets		Options)		Total
Balance at beginning of period	$	20,012	$	13,233	$	10,795	$	(12,707)	$	31,333
Gains (losses) included in earnings		-		4,708		-		(4,807)		(99)
Changes in fair value of investment         securities available for sale included         in other comprehensive income		(506)		-		-		-		(506)
New instruments acquired		-		-		2,659		-		2,659
Principal repayments		-		-		(855)		-		(855)
Amortization		-		-		-		315		315
Changes in fair value of servicing assets		-		-		1,052		-		1,052
Balance at end of period	$	19,506	$	17,941	$	13,651	$	(17,199)	$	33,899

During the quarters and the nine-month periods ended September 30, 2014 and 2013, there were purchases and sales of assets and liabilities measured at fair value on a recurring basis. There were no transfers into and out of Level 1 and Level 2 fair value measurements during such periods.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The table below presents quantitative information for all assets and liabilities measured at fair value on a recurring and non-recurring basis using significant unobservable inputs (Level 3) at September 30, 2014:

	September 30, 2014
	Fair Value		Valuation Technique	Unobservable Input	Range
	(In thousands)
Derivative assets (S&P     Purchased Options)	$	5,762	Option pricing model	Implied option volatility	25.75%-36.88%
				Counterparty credit risk     (based on 5-year credit     default swap ("CDS")     spread)	66.90% - 69.11%
Servicing assets	$	13,986	Cash flow valuation	Constant prepayment rate	5.60% - 13.28%
				Discount rate	10.00% - 12.00%
Derivative liability (S&P     Embedded Options)	$	(5,588)	Option pricing model	Implied option volatility	25.75%-36.88%
				Counterparty credit risk (based on 5-year CDS spread)	66.90% - 69.11%
Collateral dependant     impaired loans	$	26,809	Fair value of property     or collateral	Appraised value less disposition costs	20.20% - 29.20%
Puerto Rico Electric Power     Authority line of credit	$	199,982	Cash flow valuation	Discount rate	7.25
Foreclosed real estate	$	100,564	Fair value of property     or collateral	Appraised value less disposition costs	20.20% - 29.20%
Other repossessed assets	$	21,733	Fair value of property     or collateral	Appraised value less disposition costs	20.20% - 29.20%

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Information about Sensitivity to Changes in Significant Unobservable Inputs

Other debt securities – The significant unobservable inputs used in the fair value measurement of one of the Company’s other debt securities are indicative comparable pricing, option adjusted spread (“OAS”), yield to maturity, and spread to maturity. Significant changes in any of those inputs in isolation would result in a significantly different fair value measurement. Generally, a change in the assumption used for indicative comparable pricing is accompanied by a directionally opposite change in the assumption used for OAS and a directionally, although not equally proportional, opposite change in the assumptions used for yield to maturity and spread to maturity.

Derivative asset (S&P Purchased Options) – The significant unobservable inputs used in the fair value measurement of the Company’s derivative assets related to S&P purchased options are implied option volatility and counterparty credit risk. Significant changes in any of those inputs in isolation would result in a significantly different fair value measurement. Generally, a change in the assumption used for implied option volatility is not necessarily accompanied by directionally similar or opposite changes in the assumption used for counterparty credit risk.

Servicing assets – The significant unobservable inputs used in the fair value measurement of the Company’s servicing assets are constant prepayment rates and discount rates. Changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or offset the sensitivities. Mortgage banking activities, a component of total banking and financial service revenue in the consolidated statements of operations, include the changes from period to period in the fair value of the mortgage loan servicing rights, which may result from changes in the valuation model inputs or assumptions (principally reflecting changes in discount rates and prepayment speed assumptions) and other changes, including changes due to collection/realization of expected cash flows.

Derivative liability (S&P Embedded Options) – The significant unobservable inputs used in the fair value measurement of the Company’s derivative liability related to S&P purchased options are implied option volatility and counterparty credit risk. Significant changes in any of those inputs in isolation would result in a significantly different fair value measurement. Generally, a change in the assumption used for implied option volatility is not necessarily accompanied by directionally similar or opposite changes in the assumption used for counterparty credit risk.

Fair Value of Financial Instruments

The information about the estimated fair value of financial instruments required by GAAP is presented hereunder. The aggregate fair value amounts presented do not necessarily represent management’s estimate of the underlying value of the Company.

The estimated fair value is subjective in nature, involves uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could affect these fair value estimates. The fair value estimates do not take into consideration the value of future business and the value of assets and liabilities that are not financial instruments. Other significant tangible and intangible assets that are not considered financial instruments are the value of long-term customer relationships of retail deposits, and premises and equipment.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The estimated fair value and carrying value of the Company’s financial instruments at September 30, 2014 and December 31, 2013 is as follows:

	September 30,				December 31,
	2014				2013
	Fair		Carrying		Fair		Carrying
	Value		Value		Value		Value
	(In thousands)
Level 1
Financial Assets:
Cash and cash equivalents	$	671,239	$	671,239	$	621,269	$	621,269
Restricted cash		32,907		32,907		82,199		82,199
Level 2
Financial Assets:
Securities purchased under agreements to resell		-		-		60,000		60,000
Trading securities		1,687		1,687		1,869		1,869
Investment securities available-for-sale		1,273,879		1,273,879		1,568,745		1,568,745
Investment securities held-to-maturity		144,217		144,305		-		-
Federal Home Loan Bank (FHLB) stock		21,189		21,189		24,450		24,450
Other investments		65		65		65		65
Derivative assets		2,683		2,683		4,072		4,072
Financial Liabilities:
Securities purchased but not yet received		30,057		30,057		-		-
Derivative liabilities		11,414		11,414		14,937		14,937
Level 3
Financial Assets:
Investment securities available-for-sale		-		-		19,680		19,680
Total loans (including loans held-for-sale)
Non-covered loans, net		4,486,738		4,545,209		4,857,505		4,662,458
Covered loans, net		365,503		311,693		459,444		356,961
Derivative assets		5,762		5,762		16,430		16,430
FDIC indemnification asset		83,995		120,619		152,965		189,240
Accrued interest receivable		19,665		19,665		18,734		18,734
Servicing assets		13,986		13,986		13,801		13,801
Financial Liabilities:
Deposits		5,053,119		5,069,175		5,409,540		5,383,265
Securities sold under agreements to repurchase		1,058,042		1,012,228		1,323,903		1,267,618
Advances from FHLB		340,043		334,787		335,324		336,143
Other borrowings		3,865		3,872		3,638		3,663
Subordinated capital notes		91,061		101,190		99,316		100,010
Accrued expenses and other liabilities		159,541		159,541		144,424		144,424
Derivative liabilities		5,588		5,588		15,736		15,736

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following methods and assumptions were used to estimate the fair values of significant financial instruments at September 30, 2014 and December 31, 2013:

•     Cash and cash equivalents (including money market investments and time deposits with other banks), restricted cash, accrued interest receivable, securities purchased under agreements to resell, securities purchased but not yet received, and accrued expenses and other liabilities have been valued at the carrying amounts reflected in the consolidated statements of financial condition as these are reasonable estimates of fair value given the short-term nature of the instruments.

•     Investments in FHLB-NY stock are valued at their redemption value.

•     The fair value of investment securities, including trading securities, is based on quoted market prices, when available, or market prices provided by recognized broker-dealers. If listed prices or quotes are not available, fair value is based upon externally developed models that use both observable and unobservable inputs depending on the market activity of the instrument. The estimated fair value of the structured credit investments is determined by using a third-party cash flow valuation model to calculate the present value of projected future cash flows. The assumptions used which are highly uncertain and require a high degree of judgment, include primarily market discount rates, current spreads, duration, leverage, default, home price depreciation, and loss rates. The assumptions used are drawn from a wide array of data sources, including the performance of the collateral underlying each deal. The external-based valuation, which is obtained at least on a quarterly basis, is analyzed and its assumptions are evaluated and incorporated in either an internal-based valuation model when deemed necessary, or compared to counterparties’ prices and agreed by management.

•     The fair value of the FDIC indemnification asset represents the present value of the net estimated cash payments expected to be received from the FDIC for future losses on covered assets based on the credit assumptions on estimated cash flows for each covered asset pool and the loss sharing percentages. The ultimate collectability of the FDIC indemnification asset is dependent upon the performance of the underlying covered loans, the passage of time and claims paid by the FDIC which are impacted by the Bank’s adherence to certain guidelines established by the FDIC.

•     The fair value of servicing assets is estimated by using a cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration actual and expected loan prepayment rates, discount rates, servicing costs, and other economic factors, which are determined based on current market conditions.

•     The fair values of the derivative instruments are provided by valuation experts and counterparties. Certain derivatives with limited market activity are valued using externally developed models that consider unobservable market parameters. The Company has offered its customers certificates of deposit with an option tied to the performance of the S&P Index, and uses equity indexed option agreements with major broker-dealers to manage its exposure to changes in this index. Their fair value is obtained through the use of an external based valuation that was thoroughly evaluated and adopted by management as its measurement tool for these options. The payoff of these options is linked to the average value of the S&P Index on a specific set of dates during the life of the option. The methodology uses an average rate option or a cash-settled option whose payoff is based on the difference between the expected average value of the S&P Index during the remaining life of the option and the strike price at inception. The assumptions, which are uncertain and require a degree of judgment, include primarily S&P Index volatility, forward interest rate projections, estimated index dividend payout, and leverage.

•     Fair value of derivative liabilities, which include interest rate swaps and forward-settlement swaps, are based on the net discounted value of the contractual projected cash flows of both the pay-fixed receive-variable legs of the contracts. The projected cash flows are based on the forward yield curve, and discounted using current estimated market rates.

•     The fair value of the covered and non-covered loan portfolio (including loans held-for-sale) is estimated by segregating by type, such as mortgage, commercial, consumer, auto and leasing. Each loan segment is further segmented into fixed and adjustable interest rates and by performing and non-performing categories. The fair value of performing loans is calculated by discounting contractual cash flows, adjusted for prepayment estimates (voluntary and involuntary), if any, using estimated current market discount rates that reflect the credit and interest rate risk inherent in the loan. This fair value is not currently an indication of an exit price as that type of assumption could result in a different fair value estimate.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

•     The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is based on the discounted value of the contractual cash flows, using estimated current market discount rates for deposits of similar remaining maturities.

•    The fair value of long-term borrowings, which include securities sold under agreements to repurchase, advances from FHLB-NY, term notes, and subordinated capital notes, is based on the discounted value of the contractual cash flows using current estimated market discount rates for borrowings with similar terms, remaining maturities and put dates.

•     The fair value of commitments to extend credit and unused lines of credit is based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standings.

NOTE 20 –  BUSINESSSEGMENTS 

The Company segregates its businesses into the following major reportable segments of business: Banking, Wealth Management, and Treasury. Management established the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. Other factors such as the Company’s organization, nature of its products, distribution channels and economic characteristics of the products were also considered in the determination of the reportable segments. The Company measures the performance of these reportable segments based on pre-established goals of different financial parameters such as net income, net interest income, loan production, and fees generated. The Company’s methodology for allocating non-interest expenses among segments is based on several factors such as revenue, employee headcount, occupied space, dedicated services or time, among others. These factors are reviewed on a periodical basis and may change if the conditions warrant. 

Banking includes the Bank’s branches and traditional banking products such as deposits and commercial, consumer and mortgage loans. Mortgage banking activities are carried out by the Bank’s mortgage banking division, whose principal activity is to originate mortgage loans for the Company’s own portfolio. As part of its mortgage banking activities, the Company may sell loans directly into the secondary market or securitize conforming loans into mortgage-backed securities.

Wealth Management is comprised of the Bank’s trust division, Oriental Financial Services, Oriental Insurance, and CPC. The core operations of this segment are financial planning, money management and investment banking, brokerage services, insurance sales activity, corporate and individual trust and retirement services, as well as pension plan administration services.

The Treasury segment encompasses all of the Company’s asset/liability management activities, such as purchases and sales of investment securities, interest rate risk management, derivatives, and borrowings. Intersegment sales and transfers, if any, are accounted for as if the sales or transfers were to third parties, that is, at current market prices.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Following are the results of operations and the selected financial information by operating segment for the quarters and nine-month periods ended September 30, 2014 and 2013:

	Quarter Ended September 30, 2014
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	108,548	$	44	$	11,709	$	120,301	$	-	$	120,301
Interest expense		(7,892)		-		(10,538)		(18,430)		-		(18,430)
Net interest income		100,656		44		1,171		101,871		-		101,871
Provision for non-covered    loan and lease losses		(16,142)		-		-		(16,142)		-		(16,142)
Provision for covered    loan and lease losses		(1,115)		-		-		(1,115)		-		(1,115)
Non-interest income (loss)		(3,242)		6,208		(475)		2,491		-		2,491
Non-interest expenses		(53,669)		(4,483)		(1,423)		(59,575)		-		(59,575)
Intersegment revenue		431		-		290		721		(721)		-
Intersegment expenses		(290)		(330)		(101)		(721)		721		-
Income before income taxes	$	26,629	$	1,439	$	(538)	$	27,530	$	-	$	27,530
Total assets	$	6,494,141	$	26,800	$	2,098,341	$	8,619,282		(945,943)	$	7,673,339
	Quarter Ended September 30, 2013
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	109,311	$	95	$	11,695	$	121,101	$	-	$	121,101
Interest expense		(10,994)		-		(11,016)		(22,010)		-		(22,010)
Net interest income		98,317		95		679		99,091		-		99,091
Provision for non-covered    loan and lease losses		(9,900)		-		-		(9,900)		-		(9,900)
Provision for covered    loan and lease losses		(3,074)		-		-		(3,074)		-		(3,074)
Non-interest income (loss)		(3,960)		7,114		169		3,323		-		3,323
Non-interest expenses		(52,615)		(6,168)		(4,451)		(63,234)		-		(63,234)
Intersegment revenue		562		-		-		562		(562)		-
Intersegment expenses		-		(461)		(101)		(562)		562		-
Income before income taxes	$	29,330	$	580	$	(3,704)	$	26,206	$	-	$	26,206
Total assets	$	6,542,840	$	40,994	$	2,691,621	$	9,275,455	$	(895,230)	$	8,380,225

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Nine-Month Period Ended September 30, 2014
			Wealth					Total Major				Consolidated
	Banking		Management			Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	330,148	$	132		$	38,995	$	369,275	$	-	$	369,275
Interest expense		(26,235)		-			(31,693)		(57,928)		-		(57,928)
Net interest income		303,913		132			7,302		311,347		-		311,347
Provision for non-covered loan and lease losses		(39,424)		-			-		(39,424)		-		(39,424)
Provision for covered loan and lease losses, net		(4,339)		-			-		(4,339)		-		(4,339)
Non-interest income(loss)		(14,845)		20,232			2,840		8,227		-		8,227
Non-interest expenses		(156,867)		(15,629)			(8,331)		(180,827)		-		(180,827)
Intersegment revenue		1,410		-			290		1,700		(1,700)		-
Intersegment expenses		(290)		(1,089)	$		(321)		(1,700)		1,700		-
Income before income taxes	$	89,558	$	3,646			1,780	$	94,984	$	-	$	94,984
	Nine-Month Period Ended September 30, 2013
			Wealth					Total Major				Consolidated
	Banking		Management			Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	325,432	$	277		$	35,865	$	361,574	$	-	$	361,574
Interest expense		(31,490)		-			(31,084)		(62,574)		-		(62,574)
Net interest income		293,942		277			4,781		299,000		-		299,000
Provision for non-covered loan and lease losses		(55,343)		-			-		(55,343)		-		(55,343)
Provision for covered loan and lease losses, net		(4,957)		-			-		(4,957)		-		(4,957)
Non-interest income(loss)		(7,151)		22,915			4,199		19,963		-		19,963
Non-interest expenses		(168,119)		(18,945)			(11,470)		(198,534)		-		(198,534)
Intersegment revenue		1,524		-			-		1,524		(1,524)		-
Intersegment expenses		-		(1,247)			(277)		(1,524)		1,524		-
Income (loss) before income taxes	$	59,896	$	3,000		$	(2,767)	$	60,129	$	-	$	60,129

77

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

The following discussion of the Company’s financial condition and results of operations should be read in conjunction with the “Selected Financial Data” and the Company’s unaudited consolidated financial statements and related notes. This discussion and analysis contains forward-looking statements. Please see “Forward-Looking Statements” and the risk factors set forth in our 2013 Form 10-K for the year ended December 31, 2013 (the “2013 Form 10-K”), for discussion of the uncertainties, risks and assumptions associated with these statements.

The Company is a publicly-owned financial holding company that provides a full range of banking and financial services through its subsidiaries, including commercial, consumer, auto and mortgage lending; checking and savings accounts; financial planning, insurance and securities brokerage services; and corporate and individual trust and retirement services. The Company operates through three major business segments: Banking, Wealth Management, and Treasury, and distinguishes itself based on quality service. The Company has 55 branches in Puerto Rico and a subsidiary in Boca Raton, Florida. The Company’s long-term goal is to strengthen its banking and financial services franchise by expanding its lending businesses, increasing the level of integration in the marketing and delivery of banking and financial services, maintaining effective asset-liability management, growing non-interest revenue from banking and financial services, and improving operating efficiencies.

The Company’s diversified mix of businesses and products generates both the interest income traditionally associated with a banking institution and non-interest income traditionally associated with a financial services institution (generated by such businesses as securities brokerage, fiduciary services, investment banking, insurance agency, and retirement plan administration). Although all of these businesses, to varying degrees, are affected by interest rate and financial market fluctuations and other external factors, the Company’s commitment is to continue producing a balanced and growing revenue stream.

78

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make a number of judgments, estimates and assumptions that affect the reported amount of assets, liabilities, income and expenses in the consolidated financial statements. Understanding our accounting policies and the extent to which we use management judgment and estimates in applying these policies is integral to understanding our financial statements. We provide a summary of our significant accounting policies in “Note 1—Summary of Significant Accounting Policies” of our annual report on the 2013 Form 10-K.

In the “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” section of our 2013 Form 10-K, we identified the following accounting policies as critical because they require significant judgments and assumptions about highly complex and inherently uncertain matters and the use of reasonably different estimates and assumptions could have a material impact on our reported results of operations or financial condition:

• Business combination

• Allowance for loan and lease losses

• Financial instruments

We evaluate our critical accounting estimates and judgments on an ongoing basis and update them as necessary based on changing conditions. Management has reviewed and approved these critical accounting policies and has discussed its judgments and assumptions with the Audit and Compliance Committee of our Board of Directors. As part of the Company’s continuous enhancement to the allowance for loan and lease losses methodology, during the quarter ended March 31, 2014, an assessment of the look-back period and historical loss factor was performed for auto and leasing and consumer loan portfolios based on the trends observed and their relation with the economic cycle as of the period ended March 31, 2014. Same analysis was performed for the commercial portfolio during the quarter ended June 30, 2014.  As a result, the look-back period was changed to 24 months from the previously determined 12 months for auto and leasing and consumer.  For the commercial portfolio, a look-back period of 12 months was maintained.  In addition, during the quarter ended June 30, 2014, an assessment of environmental factors was performed for commercial, auto, and consumer portfolios. As a result, the environmental factors continue to reflect our assessment of the impact to our portfolio, taking into consideration current evolution of the portfolio and expected impact, due to recent economic developments, changes in values of collateral, and delinquencies, among others. These changes in the allowance for loan and lease losses’ look back period for the consumer and auto and leasing portfolios, and economic factors for the commercial, auto, and consumer portfolios are considered a change in accounting estimate as per ASC 250-10 provisions, where adjustments should be made prospectively. Apart from these changes, there have been no other material changes in the methods used to formulate these critical accounting estimates from those discussed in our 2013 Form 10-K.

79

OVERVIEW OF FINANCIAL PERFORMANCE

SELECTED FINANCIAL DATA
	Quarter Ended September 30,					Nine-Month Period Ended September 30,
					Variance					Variance
	2014		2013		%	2014		2013		%
EARNINGS DATA:	(In thousands, except per share data)
Interest income	$	120,301	$	121,101	-0.7%	$	369,275	$	361,574	2.1%
Interest expense		18,430		22,010	-16.3%		57,928		62,574	-7.4%
Net interest income		101,871		99,091	2.8%		311,347		299,000	4.1%
Provision for non-covered loan and lease losses		16,142		9,900	63.1%		39,424		55,343	-28.8%
Provision for covered loan and lease losses, net		1,115		3,074	-63.7%		4,339		4,957	-12.5%
Total provision for loan and lease losses, net		17,257		12,974	33.0%		43,763		60,300	-27.4%
Net interest income after provision for loan             and lease losses		84,614		86,117	-1.7%		267,584		238,700	12.1%
Non-interest income		2,491		3,323	-25.0%		8,227		19,963	-58.8%
Non-interest expenses		59,575		63,234	-5.8%		180,827		198,534	-8.9%
Income before taxes		27,530		26,206	5.1%		94,984		60,129	58.0%
Income tax expense (benefit)		7,998		6,585	21.5%		30,396		(18,223)	266.8%
Net income		19,532		19,621	-0.5%		64,588		78,352	-17.6%
Less: dividends on preferred stock		(3,465)		(3,465)	153.0%		(10,396)		(10,396)	153.0%
Income available to common shareholders	$	16,067	$	16,156	-0.6%	$	54,192	$	67,956	-20.3%
PER SHARE DATA:
Basic	$	0.36	$	0.35	2.9%	$	1.20	$	1.49	-19.5%
Diluted	$	0.34	$	0.34	0.0%	$	1.14	$	1.39	-18.0%
Average common shares outstanding		45,054		45,927	-1.9%		45,170		45,613	-1.0%
Average common shares outstanding and equivalents		52,362		53,322	-1.8%		52,440		53,053	-1.2%
Cash dividends declared per common share	$	0.08	$	0.06	33.3%	$	0.24	$	0.18	33.3%
Cash dividends declared on common shares	$	3,605	$	2,740	31.6%	$	10,822	$	8,219	31.7%
PERFORMANCE RATIOS:
Return on average assets (ROA)		1.02%		0.93%	9.7%		1.10%		1.22%	-9.8%
Return on average tangible common equity		9.78%		10.71%	-8.7%		11.17%		15.12%	-26.1%
Return on average common equity (ROE)		8.52%		9.20%	-7.4%		9.71%		12.96%	-25.1%
Equity-to-assets ratio		12.12%		10.48%	15.6%		12.13%		10.48%	15.8%
Efficiency ratio		49.30%		52.27%	-5.7%		49.10%		53.97%	-9.0%
Interest rate spread		5.78%		5.28%	9.5%		5.85%		5.28%	10.8%
Interest rate margin		5.84%		5.28%	10.6%		5.90%		5.28%	11.7%

80

SELECTED FINANCIAL DATA - (Continued)
	September 30,		December 31,		Variance
	2014		2013		%
PERIOD END BALANCES AND CAPITAL RATIOS:	(In thousands, except per share data)
Investments and loans
Investment securities	$	1,441,125	$	1,614,809	-10.8%
Loans and leases not covered under shared-loss         agreements with the FDIC, net		4,545,209		4,662,458	-2.5%
Loans and leases covered under shared-loss         agreements with the FDIC, net		311,693		356,961	-12.7%
Total investments and loans	$	6,298,027	$	6,634,228	-5.1%
Deposits and borrowings
Deposits	$	5,069,175	$	5,383,265	-5.8%
Securities sold under agreements to repurchase		1,012,228		1,267,618	-20.1%
Other borrowings		439,849		439,816	0.0%
Total deposits and borrowings	$	6,521,252	$	7,090,699	-8.0%
Stockholders’ equity
Preferred stock	$	176,000	$	176,000	0.0%
Common stock		52,761		52,707	0.1%
Additional paid-in capital		539,522		538,071	0.3%
Legal surplus		68,437		61,957	10.5%
Retained earnings		170,519		133,629	27.6%
Treasury stock, at cost		(90,652)		(80,642)	-12.4%
Accumulated other comprehensive income		13,411		3,191	320.3%
Total stockholders' equity	$	929,998	$	884,913	5.1%
Per share data
Book value per common share	$	16.96	$	15.74	7.8%
Tangible book value per common share	$	14.82	$	13.60	9.0%
Market price at end of period	$	14.98	$	17.34	-13.6%
Capital ratios
Leverage capital		10.51%		9.06%	16.0%
Tier 1 risk-based capital		15.96%		14.38%	11.0%
Total risk-based capital		17.50%		16.16%	8.3%
Tier 1 common equity to risk-weighted assets		11.86%		10.46%	13.4%
Financial assets managed
Trust assets managed	$	2,851,815	$	2,796,923	2.0%
Broker-dealer assets gathered	$	2,483,611	$	2,493,324	-0.4%

81

FINANCIAL HIGHLIGHTS OF THE THIRD QUARTER OF 2014

The Company achieved performance equal to the year ago quarter despite weaker economic conditions in Puerto Rico. As such, the increase in the Company’s provision for loan and leases and its decreases in interest and non-interest income were substantially offset by decreases in the Company’s interest and non-interest expenses. Income available to common shareholders for the quarter ended September 30, 2014 was $16.1 million, or $0.34 per diluted share, compared to $16.2 million, or $0.34 per diluted share, in the third quarter of 2013.

Net interest margin expanded to 5.84% from 5.28% primarily as a result of an increase in the yield of the Company’s interest earning assets.

The Company’s return on assets increased to 1.02% from 0.93%, and its return on equity decreased to 8.52% from 9.20%, from the third quarter of 2013. The Company improved its efficiency ratio, which decreased to 49.30% from 52.27% when compared with the same quarter in 2013, primarily as a result of a decrease in the Company’s non-interest expenses.

Interest Income

Total interest income remained level at $120.3 million, compared to $121.1 million in the third quarter of 2013. The yield on interest-earning assets increased to 6.89% from 6.46%. This was offset by a decrease in earning asset volume.

Interest Expense

Total interest expense decreased 16.3% as compared to the same period in 2013. Such decrease reflects the lower cost of deposits before fair value premium amortization and core deposit intangible amortization (0.68% vs. 0.93%). Such lower cost reflects continuing progress in the repricing of the Company’s core retail deposits and other reductions in its cost of funds.

Net Interest Income

Net interest income increased $2.8 million for the third quarter of 2014. Such increase reflects an increase in net interest margin of 56 basis points to 5.84% when compared to the third quarter of 2013.

Provision for Loan and Lease Losses

Provision for non-covered loan losses increased $6.2 million when compared to $9.9 million for the third quarter of 2013, while provision for covered loan losses decreased $2.0 million when compared to $3.1 million for the same period in 2013.

Non-Interest Income

Core banking and financial services revenues decreased 13.3% to $19.0 million as compared to the same period in 2013, primarily reflecting a decrease of $2.4 million in banking services revenue to $9.8 million. Decrease in banking services revenues is mostly due to the reclassification of loan late charges into interest income during the last quarter of 2013. For the quarter ended September 30, 2013 these revenues were included as part of banking activities, since the reclassification was not reflected until late 2013.

The FDIC shared-loss expense of $16.9 million, compared to $16.0 million for the same period in 2013, resulted from the ongoing evaluation of expected cash flows of the covered loan portfolio, which resulted in reduced projected losses expected to be collected from the FDIC and the improved accretable yield on the covered loans.

Non-Interest Expense

Non-interest expense of $59.6 million, decreased $3.7 million compared to the same period in 2013, mainly because during the third quarter of 2014, there were no merger and restructuring charges compared to $2.3 million for the same period in 2013. As a result of such decrease, the Company’s efficiency ratio improved to 49.30%, compared to 52.27% for the same period in 2013.

82

Income Tax Expense

Income tax expense was $8.0 million, compared to an income tax expense of $6.6 million for the same period in 2013.

Income Available to Common Shareholders

The Company’s income available to common shareholders amounted to $16.1 million, compared to $16.2 million for the same period in 2013. Income per basic common share and fully diluted common share was $0.36 and $0.34, respectively, compared to income per basic common share and fully diluted common share of $0.35 and $0.34, respectively, for the third quarter of 2013.

Interest Earning Assets

The loan portfolio declined to $4.857 billion at September 30, 2014, compared to $4.936 billion at June 30, 2014, primarily due to repayments and maturities, including the strategic reduction of Puerto Rico government related debt. The investment portfolio of $1.441 billion at September 30, 2014 decreased 2.2% compared to $1.472 billion at June 30, 2014.

Interest Bearing Liabilities

Total deposits amounted to $5.069 billion at September 30, 2014, a decrease of 1.4% compared to $5.141 billion at June 30, 2014. Securities sold under agreements to repurchase remained at $1.012 billion.

Stockholders’ Equity

Stockholders’ equity at September 30, 2014 was $930.0 million compared to $925.2 million at June 30, 2014, an increase of 0.52%. This increase reflects the net income for the quarter partially offset by a decrease in accumulated other comprehensive income. Book value per share was $16.96 at September 30, 2014 compared to $16.87 at June 30, 2014.

The Company maintains capital ratios in excess of regulatory requirements. At September 30, 2014, Tier 1 Leverage Capital Ratio was 10.51% (June 30, 2014 – 10.26%), Tier 1 Risk-Based Capital Ratio was 15.96% (June 30, 2014 – 15.49%), Tier 1 Common Equity to Risk- Based Assets was 11.86% (June 30, 2014-11.47%) and Total Risk-Based Capital Ratio was 17.50% (June 30, 2014 – 17.30%).

Return on Average Assets and Common Equity

Return on average common equity (“ROE”) was 8.52% compared to 9.20% for the quarter ended September 30, 2013. Return on average assets (“ROA”) was 1.02% compared to 0.93% for the same period in 2013. The decrease in ROE is mostly due to a 7.3% increase in average common stockholders’ equity to $753.9 million, from $702.4 million for the same period in 2013. The increase in ROA is mostly due to a 9.2% decrease in average assets to $7.646 billion from $8.424 billion in the same period in 2013.

Assets under Management

At September 30, 2014, total assets managed by the Company’s trust division and CPC remained level at $2.852 billion compared to $2.867 billion at June 30, 2014. At September 30, 2014, total assets gathered by the securities broker-dealer subsidiary from its customer investment accounts decreased 6.3% to $2.484 billion, compared to $2.651 billion at June 30, 2014. Changes in trust and broker-dealer related assets primarily reflect a slight increase in portfolio and differences in market values.

83

Lending

Total loan production of $242.6 million decreased 55.9% for the third quarter of 2014. Total commercial loan production of $90.1 million decreased 75.3% from $365.3 million for the same period in 2013.

Mortgage loan production of $55.3 million decreased 8.9% from the same period in 2013. The Company sells most of its conforming mortgage loans in the secondary market and retains the servicing rights.

In the aggregate, consumer loan and auto and leasing production totaled $97.2 million, a decrease of 21.3% from the same period in 2013. Such decrease is mostly due to a decrease in auto and leasing production.

Total loan portfolio declined by $79.1 million from $4.936 billion at June 30, 2014 to $4.857 billion at September 30, 2014, mostly as the result of scheduled pay downs and maturities in both the non-covered and covered loan portfolios.

Credit Quality on Non-Covered Loans

Net credit losses, excluding acquired loans, increased $3.9 million to $8.9 million, representing 1.34% of average non-acquired loans outstanding versus 1.02% in the same period in 2013.  The allowance for loan and lease losses on non-covered loans at September 30, 2014, increased to $64.9 million compared to $60.4 million at June 30, 2014. The allowances for loan and lease losses, excluding acquired loans, increased to $50.3 million (1.84% of total non-covered loans, excluding acquired loans) at September 30, 2014, compared to $50.6 million (1.92% of total non-covered loans, excluding acquired loans) at June 30, 2014. The allowance for loan and lease losses on acquired loans accounted for under ASC 310-20 increased to $4.5 million at September 30, 2014, compared to $3.4 million at June 30, 2014.

Non-performing loans (“NPLs”), which exclude loans covered under shared-loss agreements with the FDIC and loans acquired in the BBVAPR Acquisition accounted under ASC 310-30, increased to $103.7 million at September 30, 2014 compared to $94.1 million at June 30, 2014. The increase is due mainly to an increase in non-performing mortgage and auto loans.

Non-GAAP Measures

The Company uses certain non-GAAP measures of financial performance to supplement the unaudited consolidated financial statements presented in accordance with GAAP. The Company presents non-GAAP measures that management believes are useful and meaningful to investors. Non-GAAP measures do not have any standardized meaning, are not required to be uniformly applied, and are not audited. Therefore, they are unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP.

The Company’s management has reported and discussed the results of operations herein both on a GAAP basis and on a pre-tax pre-provision operating income basis (defined as net interest income, plus banking and financial services revenue, less non-interest expenses, as calculated on the table below). The Company’s management believes that, given the nature of the items excluded from the definition of pre-tax pre-provision operating income, it is useful to state what the results of operations would have been without them so that investors can see the financial trends from the Company’s continuing business.

84

During the quarter ended September 30, 2014, the Company’s pre-tax pre-provision operating income increased 2.1% to $61.3 million as compared to $60.0 million for the same period in 2013. Pre-tax pre-provision operating income is calculated as follows:

	Quarter Ended September 30,					Nine-Month Period Ended September 30,
	2014		2013			2014		2013
	(In thousands)					(In thousands)
PRE-TAX PRE-PROVISION OPERATING INCOME
Net interest income	$	101,871	$	99,091	$	311,347	$	299,000
Core non-interest income:
Banking service revenue		9,753		12,146		30,305		36,491
Financial service revenue		7,113		7,394		21,316		23,084
Mortgage banking activities		2,097		2,334		5,346		9,299
Total core non-interest income		18,963		21,874		56,967		68,874
Non-interest expenses		59,575		63,234		180,827		198,533
Less merger and restructuring charges		-		(2,252)		-		(13,060)
		59,575		60,982		180,827		185,473
Total pre-tax pre-provision operating income	$	61,259	$	59,983	$	187,487	$	182,401

Tangible common equity consists of common equity less goodwill, core deposit intangibles and customer relationship intangible. Tier 1 common equity consists of common equity less goodwill, core deposit intangibles, net unrealized gains on available for sale securities, net unrealized losses on cash flow hedges, and disallowed deferred tax asset and servicing assets. Tangible book value per common share consists of tangible common equity divided by common stock outstanding at the end of the period. Ratios of tangible common equity to total assets, tangible common equity to risk-weighted assets, total equity to risk-weighted assets, and Tier 1 common equity to risk-weighted assets and tangible book value per common share are non-GAAP measures.

At September 30, 2014, tangible common equity to total assets and tangible common equity to risk-weighted assets increased to 8.71% and 13.64%, respectively, from 8.59% and 13.26%, respectively, at June 30, 2014. Total equity to risk-weighted assets and Tier 1 common equity to risk-weighted assets at September 30, 2014 increased to 18.99% and 11.89%, respectively, from 18.52% and 11.47%, respectively, at June 30, 2014.

Ratios calculated based upon Tier 1 common equity have become a focus of regulators and investors, and management believes ratios based on Tier 1 common equity assist investors in analyzing the Company’s capital position. Furthermore, management and many stock analysts use tangible common equity in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations. Neither Tier 1 common equity nor tangible common equity or related measures should be considered in isolation or as a substitute for stockholders’ equity, total assets or any other measure calculated in accordance with GAAP.

85

ANALYSIS OF RESULTS OF OPERATIONS

The following tables show major categories of interest-earning assets and interest-bearing liabilities, their respective interest income, expenses, yields and costs, and their impact on net interest income due to changes in volume and rates for the quarters and nine-month periods ended September 30, 2014 and 2013:

TABLE 1 - QUARTERLY ANALYSIS OF NET INTEREST INCOME AND CHANGES DUE TO VOLUME/RATE
FOR THE QUARTERS ENDED SEPTEMBER 30, 2014 AND 2013
	Interest				Average rate		Average balance
	September		September		September	September	September		September
	2014		2013		2014	2013	2014		2013
	(Dollars in thousands)
A - TAX EQUIVALENT SPREAD
Interest-earning assets	$	120,301	$	121,101	6.89%	6.46%	$	6,923,413	$	7,438,957
Tax equivalent adjustment		20,435		6,092	1.17%	0.32%		-		-
Interest-earning assets - tax equivalent		140,736		127,193	8.07%	6.78%		6,923,413		7,438,957
Interest-bearing liabilities		18,430		22,011	1.11%	1.18%		6,571,666		7,389,043
Tax equivalent net interest income / spread		122,306		105,182	6.96%	5.61%		351,747		49,914
Tax equivalent interest rate margin					7.01%	5.61%
B - NORMAL SPREAD
Interest-earning assets:
Investments:
Investment securities		11,399		11,520	3.26%	2.59%		1,388,535		1,761,477
Trading securities		38		28	9.49%	4.21%		1,589		2,641
Interest bearing cash and money market investments		316		241	0.21%	0.18%		593,391		538,094
Total investments		11,753		11,789	2.35%	2.03%		1,983,515		2,302,212
Loans not covered under shared-loss agreements     with the FDIC:
Originated
Mortgage		10,287		11,007	5.17%	5.72%		789,204		763,929
Commercial		16,538		10,126	5.51%	4.71%		1,190,607		852,395
Consumer		4,142		2,331	10.20%	9.46%		161,147		97,738
Auto and leasing		13,739		7,216	10.25%	10.54%		531,914		271,727
Total originated non-covered loans		44,706		30,680	6.64%	6.13%		2,672,872		1,985,790
Acquired
Mortgage		9,627		11,062	5.58%	5.75%		684,536		763,032
Commercial		18,643		26,438	11.83%	9.87%		625,472		1,063,226
Consumer		3,731		5,052	13.88%	12.38%		106,640		161,948
Auto		10,955		14,423	8.38%	7.19%		518,599		796,047
Total acquired non-covered loans		42,956		56,975	8.81%	8.12%		1,935,247		2,784,252
Total non-covered loans		87,662		87,655	7.55%	7.29%		4,608,119		4,770,042
Loans covered under shared loss agreements with the FDIC		20,886		21,657	24.98%	23.43%		331,779		366,703
Total loans		108,548		109,312	8.72%	8.44%		4,939,898		5,136,745
Total interest earning assets		120,301		121,101	6.89%	6.46%		6,923,413		7,438,957

86

	Interest					Average rate		Average balance
	September		September			September	September	September		September
	2014		2013			2014	2013	2014		2013
	(Dollars in thousands)
Interest-bearing liabilities:
Deposits:
Non-interest bearing deposits		-		-		0.00%	0.00%		716,681		855,094
Now Accounts		1,817		2,778		0.51%	0.80%		1,413,776		1,383,070
Savings and money market		1,780		2,313		0.61%	0.97%		1,154,712		941,892
Individual retirement accounts		906		1,161		1.12%	1.32%		320,756		350,207
Retail certificates of deposits		1,620		2,747		1.36%	1.67%		473,456		651,224
Total core deposits		6,123		8,999		0.60%	0.85%		4,079,381		4,181,487
Institutional deposits		1,244		2,622		1.48%	1.55%		334,121		673,064
Brokered deposits		1,400		1,679		0.79%	0.83%		700,256		799,723
Total wholesale deposits		2,644		4,301		1.01%	1.16%		1,034,377		1,472,787
Deposits fair value premium amortization		(1,441)		(2,382)		0.00%	0.00%		-		-
Core deposit intangible amortization		335		416		0.00%	0.00%		-		-
Total deposits		7,661		11,334		0.59%	0.80%		5,113,758		5,654,274
Borrowings:
Securities sold under agreements to repurchase		7,453		7,211		2.93%	2.26%		1,010,000		1,268,544
Advances from FHLB and other borrowings		2,314		2,321		2.65%	2.51%		346,977		366,964
Subordinated capital notes		1,002		1,144		3.94%	4.57%		100,931		99,261
Total borrowings		10,769		10,676		2.93%	2.44%		1,457,908		1,734,769
Total interest bearing liabilities		18,430		22,010		1.11%	1.18%		6,571,666		7,389,043
Net interest income / spread	$	101,871	$	99,091		5.78%	5.28%
Interest rate margin						5.84%	5.28%
Excess of average interest-earning assets     over average interest-bearing liabilities								$	351,747	$	49,913
Average interest-earning assets to average     interest-bearing liabilities ratio									105.35%		100.68%
C - CHANGES IN NET INTEREST INCOME DUE TO:
	Volume		Rate		Total
	(In thousands)
Interest Income:
Investments	$	(1,632)	$	1,596	$	(36)
Loans		(5,039)		4,274		(765)
Total interest income		(6,671)		5,870		(801)
Interest Expense:
Deposits		(1,084)		(2,590)		(3,674)
Repurchase agreements		(1,470)		1,712		242
Other borrowings		(136)		(13)		(149)
Total interest  expense		(2,690)		(891)		(3,581)
Net Interest Income	$	(3,981)	$	6,761	$	2,780

87

TABLE 1/A - YEAR-TO-DATE ANALYSIS OF NET INTEREST INCOME AND CHANGES DUE TO VOLUME/RATE
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2014 AND 2013
	Interest				Average rate		Average balance
	September		September		September	September	September		September
	2014		2013		2014	2013	2014		2013
	(Dollars in thousands)
A - TAX EQUIVALENT SPREAD
Interest-earning assets	$	369,275	$	361,574	7.00%	6.39%	$	7,051,561	$	7,569,249
Tax equivalent adjustment		38,290		18,132	0.73%	0.32%		-		-
Interest-earning assets - tax equivalent		407,565		379,706	7.73%	6.71%		7,051,561		7,569,249
Interest-bearing liabilities		57,929		62,572	1.15%	1.11%		6,741,332		7,551,043
Tax equivalent net interest income / spread		349,636		317,134	6.58%	5.61%		310,229		18,206
Tax equivalent interest rate margin					6.63%	5.60%
B - NORMAL SPREAD
Interest-earning assets:
Investments:
Investment securities		38,088		35,255	3.48%	2.44%		1,464,938		1,933,834
Trading securities		114		78	8.56%	6.21%		1,780		1,679
Interest bearing cash and money market investments		951		791	0.22%	0.19%		580,872		562,961
Total investments		39,153		36,124	2.56%	1.93%		2,047,590		2,498,474
Loans not covered under shared-loss agreements     with the FDIC:
Originated
Mortgage		31,085		32,945	5.28%	5.62%		786,434		783,172
Commercial		47,335		21,063	5.39%	7.36%		1,174,220		382,654
Consumer		10,923		5,274	10.03%	10.30%		145,659		68,480
Auto and leasing		37,378		15,136	10.44%	13.96%		478,592		144,995
Total originated non-covered loans		126,721		74,418	6.55%	7.21%		2,584,905		1,379,302
Acquired
Mortgage		28,359		33,370	5.43%	5.74%		698,762		777,229
Commercial		56,315		88,679	11.11%	8.29%		677,570		1,430,953
Consumer		11,939		16,354	13.60%	11.96%		117,379		182,806
Auto		37,635		46,745	8.65%	6.77%		581,888		923,135
Total acquired non-covered loans		134,248		185,148	8.65%	7.47%		2,075,599		3,314,122
Total non-covered loans		260,969		259,566	7.49%	7.39%		4,660,504		4,693,425
Loans covered under shared loss agreements with the FDIC		69,153		65,884	26.92%	23.34%		343,467		377,350
Total loans		330,122		325,450	8.82%	8.58%		5,003,971		5,070,775
Total interest earning assets		369,275		361,574	7.00%	6.39%		7,051,561		7,569,249

88

	Interest					Average rate		Average balance
	September		September			September	September	September		September
	2014		2013			2014	2013	2014		2013
	(Dollars in thousands)
Interest-bearing liabilities:
Deposits:
Non-interest bearing deposits		-		-		0.00%	0.00%		707,519		797,378
Now Accounts		6,349		8,486		0.59%	0.81%		1,438,818		1,408,649
Savings and money market		6,268		7,134		0.73%	1.06%		1,150,871		898,619
Individual retirement accounts		2,904		3,696		1.17%	1.36%		331,283		362,032
Retail certificates of deposits		5,301		8,788		1.40%	1.79%		506,653		658,080
Total core deposits		20,822		28,104		0.67%	0.91%		4,135,144		4,124,758
Institutional deposits		3,942		7,982		1.44%	1.62%		366,167		657,818
Brokered deposits		4,384		5,458		0.81%	0.87%		720,208		837,916
		8,326		13,440		1.02%	1.20%		1,086,375		1,495,734
Deposits fair value premium amortization		(4,349)		(12,032)		0.00%	0.00%		-		-
Core deposit intangible amortization		1,005		1,244		0.00%	0.00%		-		-
Total deposits		25,804		30,756		0.66%	0.73%		5,221,519		5,620,492
Borrowings:
Securities sold under agreements to repurchase		22,237		21,570		2.81%	2.09%		1,058,378		1,382,670
Advances from FHLB and other borrowings		6,897		5,366		2.56%	1.74%		360,884		412,313
FDIC-guaranteed term notes		-		909		0.00%	5.56%		-		21,875
Subordinated capital notes		2,990		3,973		3.98%	4.67%		100,551		113,693
Total borrowings		32,124		31,818		2.83%	2.20%		1,519,813		1,930,551
Total interest bearing liabilities		57,928		62,574		1.15%	1.11%		6,741,332		7,551,043
Net interest income / spread	$	311,347	$	299,000		5.85%	5.28%
Interest rate margin						5.90%	5.28%
Excess of average interest-earning assets over     average interest-bearing liabilities								$	310,229	$	18,206
Average interest-earning assets to average     interest-bearing liabilities ratio									104.60%		100.24%
C - CHANGES IN NET INTEREST INCOME DUE TO:
	Volume		Rate		Total
	(In thousands)
Interest Income:
Investments	$	(6,519)	$	9,548	$	3,029
Loans		(7,737)		12,409		4,672
Total interest income		(14,256)		21,957		7,701
Interest Expense:
Deposits		(2,183)		(2,769)		(4,952)
Repurchase agreements		(5,059)		5,726		667
Other borrowings		(1,617)		1,256		(361)
Total interest  expense		(8,859)		4,213		(4,646)
Net Interest Income	$	(5,397)	$	17,744	$	12,347

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Net Interest Income

Comparison of quarters ended September 30, 2014 and 2013

Net interest income of $101.9 million slightly increased 2.8% compared with $99.1 million reported in the third quarter of 2013, reflecting a decrease of 16.3% in interest expense partially offset by a slight decrease of 0.7% in interest income from loans.

Interest rate spread increased to 50 basis points from 5.28% to 5.78%. This increase is mainly due to the net effect of a 43 basis point increase in the average yield of interest-earning assets from 6.46% to 6.89%, and a 7 basis point decrease in the average cost of funds from 1.18% to 1.11%.

Interest income decreased to $120.3 million from $121.1 million in the same quarter in 2013. Such decrease reflects a $6.7 million decrease in the volume of interest-earning assets partially offset by an increase of $5.9 million in interest rate. Interest income from loans decreased 0.7% to $108.5 million, primarily reflecting a decrease in volume of $5.0 million, partially offset by $4.3 million in interest rate. Interest income from investments remained level at $11.8 million in both periods.  

Interest expense decreased 16.3% to $18.4 million, primarily because of a $2.7 million decrease in the volume of interest-bearing liabilities and a decrease of $891 thousand in interest rate. The decrease in interest-bearing liabilities is mostly due to the decrease in repurchase agreements volume of $1.5 million, and a decrease in deposits volume of $1.1 million and interest rate of $2.6 million. The cost of deposits before fair value amortization and core deposit intangible amortization decreased 25 basis points to 0.68% for the third quarter of 2014, compared to 0.93% for the third quarter of 2013. The decrease in the cost of deposits was partially offset by an increase in the cost of borrowings, which increased 49 basis points to 2.93% from 2.44%.

The average balance of total interest-earning assets was $6.923 billion, a decrease of 6.9% from the same period in 2013. The decrease in average balance of interest-earning assets was mainly attributable to a decrease of 13.8% in average investments, resulting from redemptions and maturities during 2014. The average yield on interest-earning assets was 6.89% compared to 6.46% for the same quarter in 2013. This was mainly due to higher average yields in the loan portfolio, which increased to 8.72% from 8.44%, and in the investment portfolio, which increased to 2.35% from 2.03%.

Comparison of nine-month periods ended September 30, 2014 and 2013

Net interest income increased 4.1% to $311.3 million as compared to $299.0 million for the same period in 2013. The change reflects a decrease of 7.4% in interest expense and increases of 1.4% in interest income from loans and 8.4% in interest income from investment securities.

Interest rate spread increased 57 basis points to 5.85% from 5.28% in the same period for 2013. This increase is mainly due to the net effect of a 61 basis point increase in the average yield of interest-earning assets from 6.39% to 7.00% and a 4 basis point increase in the average cost of funds from 1.11% to 1.15%.

Interest income increased 2.1% to $369.3 million when compared to $361.6 million for the same period in 2013. Results reflect an increase of $22.0 million in interest-earning asset interest rate partially offset by a $14.3 million decrease in volume. Interest income from loans increased 1.4% to $330.1 million, reflecting an increase in interest rate of $12.4 million, partially offset by a $7.7 million decrease in volume. Interest income from investments increased 8.4% to $39.2 million, reflecting an increase in interest earning rate of $9.6 million, partially offset by a $6.5 million decrease in volume. 

Interest expense decreased 7.4% to $57.9 million, primarily the result of an $8.9 million decrease in the volume of interest-bearing liabilities, partially offset by a $4.2 million increase in interest rate. The decrease in interest-bearing liabilities is mostly due to the decrease in deposit volume of $2.2 million and a $2.8 million increase in interest rate. The cost of deposits before fair value amortization and core deposit intangible amortization decreased 24 basis points to 0.75%, compared to 0.99% for the same period in 2013. The decrease in the cost of deposits was partially offset by an increase in the cost of borrowings, which increased 63 basis points to 2.83% from 2.20%.

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Average balance of total interest-earning assets was $7.052 billion, a decrease of 6.8% from the same period in 2013. The decrease in average balance of interest-earning assets was mainly attributable to a decrease of 18.0% in average investments, resulting from redemptions and maturities, to the sale of available for sale securities during the current period amounting to $184.9 million, and to a reduction of 1.3% in the average loan portfolio primarily due to maturities and repayments. The average yield on interest-earning assets was 7.00% compared to 6.39% for the same period in 2013. This was mainly due to higher average yields in the investment portfolio, which increased to 2.56% from 1.93%, and in the loan portfolio, which increased to 8.82% from 8.58%.

TABLE 2 - NON-INTEREST INCOME SUMMARY
	Quarter Ended September 30,					Nine-Month Period Ended September 30,
	2014		2013		Variance		2014		2013	Variance
	(Dollars in thousands)
Banking service revenue	$	9,753	$	12,146	-19.7%	$	30,305	$	36,491	-17.0%
Wealth management revenue		7,113		7,394	-3.8%		21,316		23,084	-7.7%
Mortgage banking activities		2,097		2,334	-10.2%		5,346		9,299	-42.5%
Total banking and financial service revenue		18,963		21,874	-13.3%		56,967		68,874	-17.3%
FDIC shared-loss expense, net:
FDIC indemnification asset expense		(16,059)		(15,198)	-5.7%		(51,180)		(46,623)	-9.8%
Change in true-up payment obligation		(875)		(767)	-14.0%		(2,596)		(2,178)	-19.2%
		(16,934)		(15,965)	-6.1%		(53,776)		(48,801)	-10.2%
Net gain (loss) on:
Sale of securities available for sale		-		-	0.0%		4,366		-	100.0%
Derivatives		7		(811)	100.9%		(463)		(1,746)	73.5%
Early extinguishment of debt		-		-	0.0%		-		1,061	-100.0%
Other non-interest income		455		(1,775)	125.6%		1,133		575	97.0%
		(16,472)		(18,551)	11.2%		(48,740)		(48,911)	0.3%
Total non-interest income, net	$	2,491	$	3,323	-25.0%		8,227		19,963	-58.8%

Non-Interest Income

Non-interest income is affected by the level of trust assets under management, transactions generated by clients’ financial assets serviced by the securities broker-dealer and insurance agency subsidiaries, the level of mortgage banking activities, and the fees generated from loans and deposit accounts. It is also affected by the FDIC shared-loss expense, which varies depending on the results of the on-going evaluation of expected cash flows of the loan portfolio acquired in the FDIC-assisted acquisition. In addition, it is affected by the amount of securities, derivatives and trading transactions.

Comparison of quarters ended September 30, 2014 and 2013

As shown in Table 2 above, the Company recorded non-interest income in the amount of $2.5 million, compared to $3.3 million for the same period in 2013, a decrease of $832 thousands.

The FDIC shared-loss expense, net, increased to $16.9 million as compared to $16.0 million for the same period in 2013, which resulted from the ongoing evaluation of expected cash flows of the covered loan portfolio and from changes in the fair value of the true-up payment obligation, also known as a clawback liability.

During the quarters ended September 30, 2014 and 2013 the FDIC indemnification asset expense increased to $16.1 million from $15.2 million for the same period in 2013. The majority of the FDIC indemnification asset is recorded for projected claimable losses on non-single family residential loans whose loss share period ends by the third quarter of 2015, although the recovery share period extends for an additional three-year period.

During the quarters ended September 30, 2014 and 2013 the true-up payment obligation increased to $875 thousand as compared to $767 thousand for the same period in 2013. The true-up payment obligation may increase if actual and expected losses decline. The Company measures the true-up payment obligation at fair value.

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Banking service revenue, which consists primarily of fees generated by deposit accounts, electronic banking services, and customer services, decreased 19.7% to $9.8 million, from $12.1 million for the same period in 2013. The decrease in banking services revenues is mostly due to the reclassification of auto loan late charges into interest income during the last quarter of 2013 amounting to $2.7 million. For the quarter ended September 30, 2013, these revenues were included as part of banking activities, since the reclassification was not reflected until late 2013.

Wealth management revenue, which consists of commissions and fees from fiduciary activities, and securities brokerage and insurance activities, decreased 3.8% to $7.1 million, compared to $7.4 million for the same period in 2013. This decrease is mainly due to local market conditions, which has resulted in lower investment activity.

Income generated from mortgage banking activities decreased 10.2% to $2.1 million, compared to $2.3 million for the same period in 2013. The decrease in mortgage banking activities is mainly due to higher losses in repurchased loans and a decrease in sales when compared to same period in 2013.

Comparison of nine-month periods ended September 30, 2014 and 2013

Non-interest income decreased $11.7 million to $8.2 million from $20.0 million in the nine-month period ended September 30, 2013.

The FDIC shared-loss expense, net increased 10.2% to $53.8 million, as compared to $48.8 million for the same period in 2013, as a result of the ongoing evaluation of expected cash flows of the covered loan portfolio, which resulted in reduced projected losses expected to be collected from the FDIC and improved the accretable yield on the covered loans, and from changes in the fair value of the true-up payment obligation.

During the nine-month period ended September 30, 2014, the FDIC indemnification asset expense increased 9.8% to $51.2 million, as compared to $46.6 million for the same period in 2013. The reduction in claimable losses amortizes the FDIC indemnification asset through the life of the shared loss agreements. This amortization is net of the accretion of the discount recorded to reflect the expected claimable loss at its net present value. During the nine-month period ended September 30, 2014, the net amortization included $7.7 million of additional amortization of the FDIC indemnification asset from stepped up cost recoveries on certain construction and leasing loan pools. Additional amortization of the FDIC indemnification asset may be recorded, should the Company continue to experience reduced expected losses.

During the nine-period ended September 30, 2014, the true-up payment obligation increased 19.2% to $2.6 million, as compared to $2.2 million for the same period in 2013. The Company measures the true-up payment obligation at fair value.  

The FDIC shared-loss expense bears an inverse relationship with a change in the yield of covered pools in accordance with ASC 310-30. ASC 310-30 dictates that such pools should be subject to increases in their yield when the present value of the expected cash flows is higher than the pool’s carrying balance. When the increases in cash flow expectations are driven by reductions in the expected credit losses, the Bank recognizes that such losses are no longer expected to be collected from the FDIC. Accordingly, the Bank reduces the FDIC indemnification asset by amortizing the reduction in expected collections throughout the remaining life of the underlying pools. This amortization is recognized in the FDIC shared-loss expense.

The underlying factors that caused an increase in the expected cash flows and resulting reduction in projected losses are derived from the pool-level cash flow forecasts. Credit loss assumptions used to develop each pool-level cash flow forecast are based on the behavior of defaults, recoveries and losses of the corresponding pool of covered loans.

Banking service revenue decreased 17.0% to $30.3 million from $36.5 million for the same period in 2013. The decrease in banking services revenues is mostly due to the reclassification of auto loan late charges into interest income during the last quarter of 2013 amounting to $2.7 million. For the nine-month period ended September 30, 2013, these revenues were included as part of banking activities, since the reclassification was not reflected until late 2013. In addition, a non-recurring prepayment penalty was received during the first quarter of 2013 of approximately $1 million. Lower overdrawn and non-sufficient fund fees of $1.1 million and lower retail checking fees of $987 thousand also contributed to the decrease.

Wealth management revenue decreased 7.7% to $21.3 million, compared to $23.1 million for the same period in 2013. This decrease is mainly due to local market conditions, which has resulted in lower investment activity.

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Income generated from mortgage banking activities decreased 42.5% to $5.3 million, compared to $9.3 million for the same period in 2013. The decrease in mortgage banking activities is mainly due to higher losses in repurchased loans and a decrease in sales when compared to same period in 2013.

Gains from the sale of securities increased to $4.4 million from the same period in 2013, in which no gain or loss from the sale of securities was recorded. Losses from derivative activities were $463 thousand, as compared to $1.7 million for the same period in 2013. During the nine-month period ended September 30, 2014, the Company did not have a gain or loss on extinguishment of debt, as compared to the same period in 2013 in which the Company had a gain of $1.1 million.

TABLE 3 - NON-INTEREST EXPENSES SUMMARY
	Quarter Ended September 30,					Nine-Month Period Ended September 30,
	2014		2013		Variance %		2014		2013	Variance %
	(Dollars in thousands)
Compensation and employee benefits	$	18,592	$	22,590	-17.7%	$	61,086	$	69,927	-12.6%
Professional and service fees		3,807		4,409	-13.7%		11,525		16,262	-29.1%
Occupancy and equipment		8,770		8,270	6.0%		25,684		25,552	0.5%
Insurance		2,099		1,828	14.8%		6,506		7,229	-10.0%
Electronic banking charges		4,637		3,694	25.5%		14,085		11,458	22.9%
Information technology expenses		1,289		2,729	-52.8%		4,589		7,708	-40.5%
Advertising, business promotion, and strategic initiatives		1,825		1,471	24.1%		5,274		4,550	15.9%
Merger and restructuring charges		-		2,252	-100.0%		-		13,060	-100.0%
Foreclosure, repossession and other real estate expenses		7,842		5,703	37.5%		20,783		12,603	64.9%
Loan servicing and clearing expenses		1,870		2,133	-12.3%		5,598		5,493	1.9%
Taxes, other than payroll and income taxes		3,494		4,024	-13.2%		11,005		11,778	-6.6%
Communication		820		782	4.9%		2,590		2,481	4.4%
Printing, postage, stationery and supplies		620		824	-24.8%		1,820		2,841	-35.9%
Director and investor relations		250		230	8.7%		794		843	-5.8%
Other operating expenses		3,660		2,295	59.5%		9,488		6,748	40.6%
Total non-interest expenses	$	59,575	$	63,234	-5.8%	$	180,827	$	198,533	-8.9%
Relevant ratios and data:
Efficiency ratio		49.30%		52.27%			49.10%		53.97%
Compensation and benefits to         non-interest expense		31.21%		35.72%			33.78%		35.22%
Compensation to average total assets owned		0.97%		1.07%			1.04%		1.08%
Average number of employees		1,574		1,562			1,564		1,569
Average compensation per employee	$	11.8	$	14.5		$	39.1	$	44.6
Average loans per average employee	$	3,138	$	3,289		$	3,199	$	3,232

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Non-Interest Expenses

Comparison of quarters ended September 30, 2014 and 2013

Non-interest expense reached $59.6 million, representing a decrease of 5.8% compared to $63.2 million for the same period in the previous year. The decrease is due mainly to the non-recurring merger and restructuring charges of $2.3 million incurred during the quarter ended September 30, 2013 for the BBVAPR Acquisition and to the decrease of $4.0 million in compensation and employee benefits.

Compensation and employee benefits decreased 17.7% to $18.6 million from $22.6 million for the same periods in 2013. The decrease is due mainly to the impact of the assessment of employee bonuses required pursuant to the BBVAPR Acquisition of $2.1 million for the quarter ended September 30, 2013, a decrease in incentives of $590 thousand, and a decrease of $300 thousand in commissions paid by the securities broker-dealer.

Professional and service fees decreased 13.7% to $3.8 million, as compared to $4.4 million for the same period in 2013. Professional and service fees primarily comprise legal expenses and consulting and outsourcing expenses. For the quarter ended September 30, 2014, legal expenses amounted to $1.4 million compared to $872 thousand for the same period in 2013. The decrease in professional and service fees is mainly related consulting and outsourcing expenses which amounted to $759 thousand, compared to $1.3 million for the same period in 2013, and a decrease in audit fees which amounted to $438 thousand compared to $877 thousand for the same period in 2013. 

Information technology expenses decreased 52.8% to $1.3 million, as compared to $2.7 million, mostly due to a decrease in data processing expenses.

The decreases in the foregoing non-interest expenses were partially offset by increases in foreclosure, repossession and other real estate expenses and in electronic banking charges.

Foreclosure, repossession and other real estate expenses increased 37.5% to $7.8 million, as compared to $5.7 million in the same period for the previous year, principally due to an increase in foreclosures and a decrease in the fair value of real estate as a result of current local economic conditions.

Electronic banking charges increased 25.5% to $4.6 million, mostly due to the increase in expenses related to merchant business and card interchange transactions resulting from the continued growth of our banking business.

The decrease in non-interest expenses resulted in an improved efficiency ratio of 49.30%, from 52.27% for the same period in 2013. The efficiency ratio measures how much of the Company’s revenue is used to pay operating expenses. The Company computes its efficiency ratio by dividing non-interest expenses by the sum of its net interest income and non-interest income, but excluding gains on the sale of investment securities, derivatives gains or losses, credit-related other-than-temporary impairment losses, FDIC shared-loss expense, losses on the early extinguishment of debt, other gains and losses, and other income that may be considered volatile in nature. Management believes that the exclusion of those items permits consistent comparability. Amounts presented as part of non-interest income that are excluded from the efficiency ratio computation amounted to losses of $16.5 million, compared to $18.6 million for the same period in 2013. Revenue for purposes of the efficiency ratio amounted to $120.8 million, compared to $121.0 million for the same period in 2013.

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Comparison of nine-month periods ended September 30, 2014 and 2013

Non-interest expense decreased 8.9% to $180.8 million, compared to $198.5 for the same period in 2013. The decrease is due mainly to the non-recurring merger and restructuring charges of $13.1 million incurred during the nine-month period ended September 30, 2013 for the BBVAPR Acquisition and the implementation of expense reduction measures.

Compensation and employee benefits decreased 12.6% to $61.1 million from $69.9 million for the same period in 2013. The decrease is due mainly to the impact in 2013 of the assessment of employee bonuses required pursuant to the BBVAPR Acquisition of $4.5 million, a decrease in average total employees during the nine-month period ended September 30, 2014, compared to the same period in 2013, and a decrease in commissions paid by the securities broker-dealer of $1.4 million.

Professional and service fees decreased 29.1% to $11.5 million, as compared to $16.3 million for the same period in 2013. Legal expenses amounted to $3.7 million, compared to $3.4 million for the same period in 2013. Consulting and outsourcing expenses amounted to $2.6 million, compared to $4.1 million for the same period in 2013. Decrease in professional and service fees is mainly related to loan servicing fees amounting to $3.0 million for a third party loan servicer whose contract was terminated during the quarter ended June 30, 2013.

Information technology expenses decreased 40.5% to $4.6 million, as compared to $7.7 million, mostly due to decrease in data processing expenses.

The decreases in the foregoing non-interest expenses were partially offset by increases in electronic banking charges and foreclosure, repossession and other real estate expenses.

Electronic banking charges increased 22.9% to $14.1 million, as compared to $11.5 million, mostly due to the increase in expenses related to merchant business and card interchange transactions resulting from the continued growth of our banking business.

Foreclosure, repossession and other real estate expenses increased 64.9% to $20.8 million, as compared to $12.6 million for the same period in 2013, principally due to an increase in foreclosures and a decrease in the fair value of real estate as a result of current local economic conditions.

The decrease in non-interest expenses resulted in an improved efficiency ratio of 49.1% from 54.0%. Amounts presented as part of non-interest income that are excluded from the efficiency ratio computation amounted to losses of $48.7 million, compared to $48.9 million for the same period in 2013. Revenue for purposes of the efficiency ratio amounted to $368.3 million, compared to $367.9 million for the same period in 2013.

Provision for Loan and Lease Losses

Comparison of quarters ended September 30, 2014 and 2013

Provision for non-covered loan and lease losses increased 63.1% to $16.1 million from $9.9 million when compared with the same period in 2013. Provision for covered loan and lease losses decreased 63.7% to $1.1 million from $3.1 million when compared to the same period in 2013. Based on an analysis of the credit quality and the composition of the Company’s loan portfolio, management determined that the provision for the quarter ended September 30, 2014 was adequate in order to maintain the allowance for loan and lease losses at an adequate level to provide for probable losses based upon an evaluation of known and inherent risks.

Provision for non-covered loans, excluding acquired loans, increased 23.7% to $8.6 million from $6.9 million when compared with the same period in 2013. This was the result of an increase in the provision for auto and leasing of 130.2% to $7.2 million, partially offset by a decrease in the provision for mortgage loans of 10.1% to $1.2 million, an increase in the recapture for commercial loans of 225.2% to $2.3 million, a decrease in the provision for consumer loans of 19.7% to $2.3 million, and a decrease in the unallocated provision of 78.6% to $43 thousand. At September 30, 2014, the auto portfolio has been increasing as new originations are ramping up balances outstanding. After almost two years from the BBVAPR Acquisition, this portfolio is beginning to reflect normal delinquency and charge-off levels as a seasoned portfolio.

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Total charge-offs on non-covered loans, excluding acquired loans, increased 101.7% to $11.6 million, as compared to $5.8 million for the same period in 2013.  This was the result of a 466.5% increase in auto and leasing charge-offs to $7.4 million and a 240.9% increase in consumer charge-offs to $1.4 million, partially offset by a 11.1% decrease in mortgage charge-offs to $1.6 million and a 51.6% decrease in commercial charge-offs to $1.1 million.

Total recoveries increased from $704 thousand to $2.7 million. As a result, the recoveries to charge-offs ratio increased from 12.22% to 23.18%. Net credit losses, excluding acquired loans, increased $3.9 million to $8.9 million, representing 1.34% of average non-covered loans outstanding versus 1.02% for the same period in 2013, annualized.

The non-covered acquired loans accounted for under ASC 310-20 required a provision for loan and lease losses of $3.7 million, as compared to $3.0 million for the same period in 2013. Non-covered acquired loans accounted for under ASC 310-30 required a provision for loan and lease losses of $3.8 million. This portfolio did not require a provision for loan and leases losses for the same period in 2013. The provision for the quarter ended September 30, 2014, reflects the Company’s revision of the expected cash flows in the non-covered acquired loan portfolio considering actual experiences and changes in the Company’s expectations for the remaining term of the loan pools. Provision for covered loan and lease losses was $1.1 million, compared to $3.1 million for the same period in 2013, reflecting the Company’s revision of the expected cash flows in the covered loan portfolio considering actual experiences and changes in the Company’s expectations for the remaining terms of the loan pools.

Comparison of nine-month periods ended September 30, 2014 and 2013

Provision for non-covered loan and lease losses decreased $15.9 million to $39.4 million when compared to $55.3 million, which included the impact of a $21.0 million additional provision due to the reclassification to held-for-sale of non-performing residential mortgage loans. Provision for covered loan and lease losses decreased $618 thousand, when compared to the same period in 2013. Based on an analysis of the credit quality and the composition of the Company’s loan portfolio, management determined that the provision for the nine-month period ended September 30, 2014, was adequate in order to maintain the allowance for loan and lease losses at an adequate level to provide for probable losses based upon an evaluation of known and inherent risks.

Provision for non-covered loans, excluding acquired loans, decreased 55.8% to $21.6 million from $48.6 million when compared with the same period in 2013. This was the result of decrease in the provision for mortgage loans of 93.0% to $2.3 million, an increase in the recapture for commercial loans of 232.4% to $4.0 million, and an increase in the unallocated recapture of 134.9% to $193 thousand, partially offset by an increase in the provision for auto and leasing of 155.1% to $17.4 million and an increase in the provision for consumer loans of 24.7% to $6.1 million. At September 30, 2014, the auto and consumer portfolios have been increasing as new originations are ramping up balances outstanding. After almost two years from the BBVAPR Acquisition, these portfolios are beginning to reflect normal delinquency and charge-off levels as seasoned portfolios.

Total charge-offs on non-covered loans, excluding acquired loans, decreased 34.7% to $27.6 million, as compared to $42.3 million for the same period in 2013.  This was the result of an 88.9% decrease in mortgage charge-offs to $3.8 million and a 64.0% decrease in commercial charge-offs to $2.0 million, partially offset by a 754.8% increase in auto and leasing charge-offs to $18.0 million and a 269.4% increase in consumer charge-offs to $3.8 million.

Total recoveries increased from $1.3 million to $7.2 million. As a result, the recoveries to charge-offs ratio increased from 3.05% to 26.05%. Net credit losses, excluding acquired loans, decreased $20.6 million to $20.4 million, representing 1.05% of average non-covered loans outstanding versus 3.96% in the same period in 2013, annualized. The credit losses for the nine-month period ended September 30, 2013 included a $27 million charge-off from nonperforming mortgage loans transferred into the loan held-for-sale category. Isolating this credit charge-off, the net credit losses for the nine-month period ended September 30, 2013 would have been $14.0 million, representing 1.35% of average non-covered loans outstanding, annualized.

The non-covered acquired loans accounted for under ASC 310-20 required a provision for loan and lease losses of $10.5 million, as compared to $6.7 million for the same period in 2013. Non-covered acquired loans accounted for under ASC 310-30 required a provision for loan and lease losses of $7.3 million for the nine-month period ended September 30, 2014. This portfolio did not require provision for loan and leases losses for the same period in 2013. The provision for the nine-month period ended September 30, 2014 reflects the Company’s revision of the expected cash flows in the non-covered acquired loan portfolio considering actual experiences and changes in the Company’s expectations for the remaining term of the loan pools. Provision for covered loan and lease losses was $4.3 million, compared to $5.0 million for the same period in 2013, reflecting the Company’s revision of the expected cash flows in

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the covered loan portfolio considering actual experiences and changes in the Company’s expectations for the remaining terms of the loan pools.

Please refer to the “Allowance for Loan and Lease Losses and Non-Performing Assets” section in this MD&A and Table 8 through Table 12 below for more detailed information concerning the allowances for the loan and lease losses, net credit losses and credit quality statistics.

Income Taxes

Comparison of quarters ended September 30, 2014 and 2013

Income tax expense increased $1.4 million to $8.0 million, compared to an income tax expense of $6.6 million for the same period in 2013.The increase is caused by the change in enacted tax rates for capital gains during the quarter ended September 30, 2014 from 15% to 20%.

Comparison of nine-month periods ended September 30, 2014 and 2013

Income tax expense increased to $30.4 million, compared to an income tax benefit of $18.2 million for the same period in 2013. The income tax benefit for the nine-month period ended September 30, 2013 included a $38.6 million benefit from the effect in deferred taxes due to the increase in tax rates from 30.0% to 39.0% due to enacted law in 2013. Effective July 1, 2014 the capital gains tax rate was increased from 15% to 20%, which results in a net increase of the income tax expense for 2014.

Business Segments

The Company segregates its businesses into the following major reportable segments: Banking, Wealth Management, and Treasury. Management established the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. Other factors such as the Company’s organization, nature of its products, distribution channels and economic characteristics of the products were also considered in the determination of the reportable segments. The Company measures the performance of these reportable segments based on pre-established goals of different financial parameters such as net income, net interest income, loan production, and fees generated. The Company’s methodology for allocating non-interest expenses among segments is based on several factors such as revenue, employee headcount, occupied space, dedicated services or time, among others.

Comparison of quarters ended September 30, 2014 and 2013

Banking

Net interest income of the Company’s Banking segment slightly increased $2.3 million for the third quarter of 2014, or 2.4%, reflecting a decrease of 28.2% in interest expense, partially offset by a slight decrease of 0.7% in interest income from loans. The decrease of $3.1 million in interest expenses mainly reflects the lower cost of deposits before fair value amortization and core deposit intangible amortization (0.68% vs. 0.93%) due to the continuing progress in the repricing of the Company’s core retail deposits. 

Provision for non-covered loans losses increased $6.2 million when compared to $9.9 million for the third quarter of 2013, while provision for covered loans losses decreased $2.0 million when compared to the third quarter of 2013.

Banking service revenues decreased $2.4 million to $9.8 million. The decrease is mostly due to the reclassification of loan late charges into interest income during the last quarter of 2013. For the quarter ended September 30, 2013, these revenues were included as part of banking activities, since the reclassification was not reflected until late 2013.

For the quarter ended September 30, 2013, the Company recognized a realized loss of $1.5 million from the sale of performing and non-performing residential mortgage loans, which was not the case in the current quarter.  

Non-interest expense of $53.7 million increased 2.0% when compared to the same period in 2013. The increase in non-interest expense is mainly due to an increase in foreclosure, repossession and other real estate expenses of $2.1 million to $7.8 million, principally caused by an increase in foreclosures and a decrease in the fair value of real estate as a result of current local economic

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conditions. Also, there was an increase in electronic banking charges of $943 thousand to $4.6 million, mostly due to the increase in expenses related to merchant business and card interchange transactions resulting from the continued growth of our banking business. This increase was partially offset by the $2.3 million in merger and restructuring charges during the quarter ended September 30, 2013, compared to none in the current quarter.

Wealth Management

Wealth management revenue, which consists of commissions and fees from fiduciary activities, and securities brokerage and insurance activities, decreased 12.7% to $6.2 million, compared to $7.1 million for the same period in 2013. This decrease is mainly due to local market conditions, which has resulted in lower investment activity.

Non-interest expenses decreased 27.3% to $4.5 million, mainly as commissions paid by the securities broker-dealer decreased when compared to the same quarter in 2013.

Treasury

Average investments decreased 13.8% resulting from redemptions and maturities during 2014. Nevertheless, interest income from investments remained level at $11.7 million as the yield increased to 2.35% from 2.03%. Interest expenses remained constant at $11 million when compared to the same period in 2013, reflecting lower borrowings at higher costs.

Non-interest expenses, mainly composed of indirect expenses allocated from support departments, decreased 68.0% to $1.4 million as part of the Company’s cost reduction strategy.

Comparison of nine-month periods ended September 30, 2014 and 2013

Banking

Net interest income increased $10.0 million for the third quarter of 2014, or 3.4%, reflecting an increase of 1.4% in interest income from loans and a decrease of 16.7% in interest expense. The decrease of $5.3 million in interest expenses when compared to the same period in 2013 mainly reflects the lower cost of deposits fair value amortization and core deposit intangible amortization (0.75% vs. 0.99%) due to the continuing progress in the repricing of the Company’s core retail deposits and other reductions in its cost of funds.

Provision for non-covered loan losses decreased $15.9 million when compared to $55.3 million, which included the impact of a $21.0 million additional provision due to the reclassification to held-for-sale of non-performing residential mortgage loans. Provision for covered loan losses decreased $618 thousand when compared to the same period in 2013.

Banking service revenues decreased 17.0% to $30.3 million from $36.5 million for the same period in 2013. The decrease in banking service revenues is mostly due to the reclassification of auto loan late charges into interest income during the last quarter of 2013 amounting to $2.7 million. For the nine-month period ended September 30, 2013, these revenues were included as part of banking activities, since the reclassification was not reflected until late 2013. In addition, a non-recurring prepayment penalty was received during the first quarter of 2013 of approximately $1 million. Lower overdrawn and non-sufficient fund fees by approximately $1.1 million and lower retail checking fees by approximately $987 thousand also contributed to the decrease.

Net FDIC shared- loss expense increased $5.0 million to $53.8 million from $48.8 million for the same period in 2013.

For the nine-month period ended September 30, 2013, the Company recognized a realized loss of $1.5 million from the sale of performing and non-performing residential mortgage loans, which did not have an impact in 2014.

Non-interest expense of $156.9 million decreased 6.7% when compared to the same period in 2013. The decrease is due mainly to the non-recurring merger and restructuring charges of $13.1 million incurred during the nine-month period ended September 30, 2013 for the BBVAPR Acquisition.

Wealth Management

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Wealth management revenue decreased 11.7% to $20.2 million, compared to $22.9 million for the same period in 2013. This decrease is mainly due to local market conditions, which has resulted on lower investment activity.

Non-interest expenses decreased 17.5% to $15.6 million from $18.9 million for the same period in 2013. Commissions paid by the securities broker-dealer decreased $1.4 million when compared to the same period in 2013.

Treasury

Average investments decreased 18.0% resulting from redemptions and maturities and the sale of available for sale securities during the current period amounting to $184.9 million. Nevertheless, interest income from investments increased 8.7% to $39.0 million as yield increased to 2.56% from 1.93%. Interest expenses slightly increased to $31.7 million from $31.1 million for the same period in 2013, reflecting lower borrowings at higher costs.

Non-interest expenses, mainly composed of indirect expenses allocated from support departments, decreased 27.4% to $8.3 million as part of the Company’s cost reduction strategy.

ANALYSIS OF FINANCIAL CONDITION

Assets Owned

At September 30, 2014, the Company’s total assets amounted to $7.673 billion representing a decrease of 5.9% when compared to $8.158 billion at December 31, 2013. This reduction is mainly due to a decrease in investment securities available-for-sale of 19.8% from $1.588 billion to $1.274 billion, partially offset by a $144.3 million increase in investment securities held-to-maturity.

At September 30, 2014, loans represented 77% of total interest-earning assets while investments represented 23%, compared to 75% and 25%, respectively, at December 31, 2013.

The Company’s loan portfolio is comprised of residential mortgage loans, commercial loans collateralized by mortgages on real estate located in Puerto Rico, other commercial and industrial loans, consumer loans, and auto loans. At September 30, 2014, the Company’s loan portfolio decreased by 3.2% to $4.857 billion compared to $5.019 billion at December 31, 2013. At September 30, 2014, the covered loan portfolio decreased $45.3 million, or 12.7% from December 31, 2013 as the loans continue to pay down. At September 30, 2014, the non-covered loan portfolio decreased $117.2 million or 2.5%, primarily due to maturities and early pay downs of some commercial loans.

The FDIC indemnification asset amounted to $120.6 million at September 30, 2014 and $189.2 million as of December 31, 2013, representing a 36.3% reduction. The decrease in the FDIC indemnification asset is mainly related to the amortization of the FDIC indemnification asset by $51.2 million during the nine-month period ended September 30, 2014.

Investments principally consist of U.S. government and agency bonds, mortgage-backed securities, and Puerto Rico government and agency bonds. At September 30, 2014, the investment portfolio decreased 10.8% to $1.441 billion from $1.615 billion at December 31, 2013. This decrease is mostly due to net effect of a reduction of $98.7 million in Puerto Rico government obligations and a reduction of $20.5 million in other debt securities due to redemptions and maturities. In addition, during the nine-month period  ended September 30, 2014, the Company sold $110.8 million of mortgage-backed available for sale securities taking advantage of market opportunities to realize gains and reduce some interest rate sensitivity. Recent purchases of investment securities were categorized as held-to-maturity. The Company’s management will determine the category of following investment securities purchases based on the Company’s approach at that time.

Financial Assets Managed

The Company’s financial assets managed include those managed by the Company’s trust division, retirement plan administration subsidiary, and assets gathered by its broker-dealer subsidiary. The Company’s trust division offers various types of IRAs and manages 401(k) and Keogh retirement plans and custodian and corporate trust accounts, while the retirement plan administration subsidiary, CPC, manages private retirement plans. At September 30, 2014, total assets managed by the Company’s trust division and CPC amounted to $2.852 billion, compared to $2.797 billion at December 31, 2013. Oriental Financial Services offers a wide array of investment alternatives to its client base, such as tax-advantaged fixed income securities, mutual funds, stocks, bonds and money

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management wrap-fee programs. At September 30, 2014, total assets gathered by Oriental Financial Services from its customer investment accounts decreased to $2.484 billion, compared to $2.493 billion at December 31, 2013. Changes in trust and broker-dealer related assets primarily reflect an increase in portfolio and differences in market values.

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TABLE 4 - ASSETS SUMMARY AND COMPOSITION
	September 30,		December 31,
	2014		2013		Variance %
	(Dollars in thousands)
Investments:
FNMA and FHLMC certificates	$	1,200,940	$	1,217,330	-1.3%
Obligations of US government-sponsored agencies		7,761		10,649	-27.1%
CMOs issued by US government-sponsored agencies		184,958		214,394	-13.7%
GNMA certificates		5,568		7,816	-28.8%
Puerto Rico government and political subdivisions		15,446		114,190	-86.5%
FHLB stock		21,189		24,450	-13.3%
Other debt securities		3,511		24,047	-85.4%
Other investments		1,752		1,933	-9.4%
Total investments		1,441,125		1,614,809	-10.8%
Loans:
Non-covered loans		4,593,311		4,670,227	-1.6%
Allowance for loan and lease losses on non-covered loans		(64,859)		(54,298)	-19.5%
Non-covered loans receivable, net		4,528,452		4,615,929	-1.9%
Mortgage loans held for sale		16,757		46,529	-64.0%
Total non-covered loans, net		4,545,209		4,662,458	-2.5%
Covered loans		373,920		409,690	-8.7%
Allowance for loan and lease losses on covered loans		(62,227)		(52,729)	-18.0%
Total covered loans, net		311,693		356,961	-12.7%
Total loans, net		4,856,902		5,019,419	-3.2%
Securities purchased under agreements to resell		-		60,000	-100.0%
Total securities and loans		6,298,027		6,694,228	-5.9%
Other assets:
Cash and due from banks		696,369		696,501	0.0%
Money market investments		7,777		6,967	11.6%
FDIC indemnification asset		120,619		189,240	-36.3%
Foreclosed real estate		100,564		90,024	11.7%
Accrued interest receivable		19,665		18,734	5.0%
Deferred tax asset, net		121,217		137,564	-11.9%
Premises and equipment, net		82,099		82,903	-1.0%
Servicing assets		13,986		13,801	1.3%
Derivative assets		8,445		20,502	-58.8%
Goodwill		86,069		86,069	0.0%
Other assets		118,502		121,482	-2.5%
Total other assets		1,375,312		1,463,787	-6.0%
Total assets	$	7,673,339	$	8,158,015	-5.9%
Investments portfolio composition:
FNMA and FHLMC certificates		83.4%		75.4%
Obligations of US government-sponsored agencies		0.5%		0.7%
CMOs issued by US government-sponsored agencies		12.8%		13.3%
GNMA certificates		0.4%		0.5%
Puerto Rico government and political subdivisions		1.1%		7.1%
FHLB stock		1.5%		1.5%
Other debt securities and other investments		0.3%		1.5%
		100.0%		100.0%

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TABLE 5 — LOANS RECEIVABLE COMPOSITION
	September 30,		December 31,		Variance
	2014		2013		%
	(Dollars in thousands)
Non-covered loans:
Originated and other loans and leases held for investment:
Mortgage	$	791,106	$	766,265	3.2%
Commercial		1,217,235		1,127,657	7.9%
Consumer		175,882		127,744	37.7%
Auto and leasing		542,892		379,874	42.9%
Total originated and other loans and leases held for investment		2,727,115		2,401,540	13.6%
Acquired loans:
Accounted for under ASC 310-20
Commercial		26,984		77,681	-65.3%
Consumer		47,284		56,174	-15.8%
Auto		210,808		301,584	-30.1%
		285,076		435,439	-34.5%
Accounted for under ASC 310-30
Mortgage		670,188		717,904	-6.6%
Commercial		485,444		545,117	-10.9%
Construction		108,694		126,427	-14.0%
Consumer		36,470		63,620	-42.7%
Auto		276,749		379,145	-27.0%
		1,577,545		1,832,213	-13.9%
		1,862,621		2,267,652	-17.9%
		4,589,736		4,669,192	-1.7%
Deferred loans fees, net		3,575		1,035	245.4%
Loans receivable		4,593,311		4,670,227	-1.6%
Allowance for loan and lease losses on non-covered loans		(64,859)		(54,298)	-19.5%
Loans receivable, net		4,528,452		4,615,929	-1.9%
Mortgage loans held-for-sale		16,757		46,529	-64.0%
Total non-covered loans, net		4,545,209		4,662,458	-2.5%
Covered loans:
Loans secured by 1-4 family residential properties		121,658		121,748	-0.1%
Construction and development secured by 1-4 family residential properties		18,947		17,304	9.5%
Commercial and other construction		228,410		264,249	-13.6%
Consumer		4,905		6,119	-19.8%
Leasing		-		270	-100.0%
Total covered loans		373,920		409,690	-8.7%
Allowance for loan and lease losses on covered loans		(62,227)		(52,729)	-18.0%
Total covered loans, net		311,693		356,961	-12.7%
Total loans receivable, net	$	4,856,902	$	5,019,419	-3.2%

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As shown in Table 5 above, total loans, net, amounted to $4.857 billion at September 30, 2014 and $5.019 billion at December 31, 2013.

The Company’s originated and other loans held-for-investment portfolio composition and trends were as follows:

·Mortgage loan portfolio amounted to $791.1 million (29.0% of the gross originated loan portfolio) compared to $766.3 million (31.9% of the gross originated loan portfolio) at December 31, 2013. Mortgage loan production totaled $55.3 million and $158.1 million for the quarter and nine-month period ended September 30, 2014, respectively, which represents a decrease of 8.9% and 48.4 % from $60.7 million and $306.6 million for the same periods in 2013. Mortgage loans included delinquent loans in the GNMA buy-back option program amounting to $40.1 million and $34.9 million for the periods ended September 30, 2014, and December 31, 2013, respectively. 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.

·Commercial loan portfolio amounted to $1.217 billion (44.6% of the gross originated loan portfolio) compared to $1.128 billion (47.0% of the gross originated loan portfolio) at December 31, 2013. Commercial loan production decreased 75.3% to $90.1 million for the third quarter of 2014, and 75.0% to $175.3 million for the nine-month period ended September 30, 2014, from $365.3 million and $700.8 million for the same periods in 2013, respectively.

·Consumer loan portfolio amounted to $175.9 million (6.4% of the gross originated loan portfolio) compared to $127.7 million (5.3% of the gross originated loan portfolio) at December 31, 2013. Consumer loan production increased 0.3% to $28.7 million for the quarter ended September 30, 2014, and decreased 10.2% to $91.0 million for the nine-month period ended September 30, 2014 from $28.6 million and $101.4 million for the same periods in 2013, respectively.

·Auto loans and leasing portfolio amounted to $542.9 million (20.0% of the gross originated loan portfolio) compared to $379.9 million (15.8% of the gross originated loan portfolio) at December 31, 2013. Auto production was $68.5 million for the quarter ended September 30, 2014 and $251.9 million for the nine-month period ended September 30, 2014, compared to $95.0 million and $375.3 million for the same periods in 2013, respectively.

At September 30, 2014 and December 31, 2013, the Company's non-covered acquired loan portfolio composition was as follows:
	September 30, 2014			December 31, 2013
Portfolio Type		Carrying Amounts	% of Gross Non-Covered Acquired Loan Portfolio		Carrying Amounts	% of Gross Non-Covered Acquired Loan Portfolio
	(Dollars in thousands)
Mortgage	$	670,188	36.0%	$	717,904	31.7%
Commercial		621,122	33.3%		749,225	33.0%
Consumer		83,754	4.5%		119,794	5.3%
Auto		487,557	26.2%		680,729	30.0%
	$	1,862,621	100.00%	$	2,267,652	100.00%

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TABLE 6 — HIGHER RISK RESIDENTIAL MORTGAGE LOANS
	September 30, 2014
	Higher-Risk Residential Mortgage Loans*
											High Loan-to-Value Ratio Mortgages
	Junior Lien Mortgages					Interest Only Loans					LTV 90% and over
	Carrying					Carrying					Carrying
	Value		Allowance		Coverage	Value		Allowance		Coverage	Value		Allowance		Coverage
	(In thousands)
Delinquency:
0 - 89 days	$	14,074	$	233	1.66%	$	22,722	$	984	4.33%	$	91,438	$	1,975	2.16%
90 - 119 days		99		4	4.04%		113		5	4.42%		1,002		38	3.79%
120 - 179 days		14		0	0.00%		-		-	0.00%		491		16	3.26%
180 - 364 days		80		1	1.25%		510		69	13.53%		495		21	4.24%
365+ days		509		48	9.43%		563		272	48.31%		2,273		231	10.16%
Total	$	14,776	$	286	1.94%	$	23,908	$	1,330	5.56%	$	95,699	$	2,281	2.38%
Percentage of total loans excluding     acquired loans accounted for under ASC 310-30		0.49%					0.79%					3.16%
Refinanced or Modified Loans:
Amount	$	2,235	$	179	8.01%	$	-	$	-	0.00%	$	14,234	$	1,089	7.65%
Percentage of Higher-Risk Loan     Category		15.13%					0.00%					14.87%
Loan-to-Value Ratio:
Under 70%	$	9,043	$	191	2.11%	$	2,457	$	226	9.20%	$	-	$	-	-
70% - 79%		2,776		49	1.77%		3,238		206	6.36%		-		-	-
80% - 89%		766		20	2.61%		7,116		355	4.99%		-		-	-
90% and over		2,191		26	1.19%		11,097		543	4.89%		95,699		2,281	2.38%
	$	14,776	$	286	1.94%	$	23,908	$	1,330	5.56%	$	95,699	$	2,281	2.38%
* Loans may be included in more than one higher-risk loan category and excludes acquired residential mortgage loans.

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The following table includes the Company's lending and investment exposure to the Puerto Rico government, including its agencies, instrumentalities, municipalities and public corporations:
TABLE 7 - PUERTO RICO GOVERNMENT RELATED LOANS AND SECURITIES
September 30, 2014
						Maturity
Loans and Securities:		Carrying Value		Less than 1 Year		1 to 3 Years		More than 3 Years	Comments
	(In thousands)
Central government	$	32,662	$	7,733	$	-	$	24,929		Repayment sources include all available revenues of the Commonwealth
Public corporations		382,069		299,982		1,296		80,791		$80.8 million which mature in more than 3 years, with pledged securities (rating > A)
Municipalities		212,100		-		1,174		210,926		Repayment from property taxes
Investment securities		20,915		-		439		20,476
Total	$	647,746	$	307,715	$	2,909	$	337,122

Some highlights follow on the data included above:

·Loans to municipalities are backed by their unlimited taxing power or real and personal property taxes.

·48% of loans and securities balances mature in 12-months or less.

·Deposits from municipalities, central government and other government entities totaled $359.2 million at September 30, 2014. However, this amount may decline as a result of recently enacted legislation to improve the liquidity of the Government Development Bank for Puerto Rico (“GDB”) by requiring the Commonwealth’s agencies, instrumentalities and public corporations to maintain certain deposits at GDB.

·The Puerto Rico Public Corporation Debt Enforcement and Recovery Act (the “Recovery Act”) enacted in the second quarter of 2014 establishes procedures for the adjustment of debts of certain public corporations. Significantly all of the Company’s public corporation debtors are authorized to seek relief under the Recovery Act.

·Oriental Bank is part of a four bank syndicate providing a $550 million dollar revolving line of credit to finance the purchase of fuel for the day to day power generation activities of the Puerto Rico Electric Power Authority (“PREPA”), a public corporation authorized to seek relief under the Recovery Act. The Bank’s participation in the line of credit has an unpaid principal balance of $200.0 million as of September 30, 2014. As part of the bank syndicate, the Company agreed during the quarter to extend its credit facility with PREPA to March 31, 2015. In connection with such extension, PREPA appointed a Chief Restructuring Officer to work alongside the Executive Director to develop, organize and manage a financial and operational restructuring of PREPA subject to the approval of PREPA’s Board.  PREPA also committed to delivering a comprehensive business plan by December 15, 2014 and a full debt restructuring plan by March 2, 2015.  After the extension, the Company classified the credit as substandard and a troubled-debt restructuring. The Company conducted an impairment analysis considering the probability of collection of principal and interest and concluded that the loan should be maintained in accrual status requiring no impairment.

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Credit Risk Management

Allowance for Loan and Lease Losses

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. Tables 8 through 12 set forth an analysis of activity in the allowance for loan and lease losses and present selected loan loss statistics. In addition, Table 5 sets forth the composition of the loan portfolio. As part of the Company’s continuous enhancement to the allowance for loan and lease losses methodology, during the quarter ended March 31, 2014, an assessment of the look-back period and historical loss factor was performed for auto and leasing and consumer loan portfolios based on the trends observed and their relation with the economic cycle as of the period ended March 31, 2014. As a result, the look-back period was changed to 24 months from the previously determined 12 months. In addition, during the quarter ended June 30, 2014, an assessment of environmental factors was performed for commercial, auto, and consumer portfolios. As a result, the environmental factors continue to reflect our assessment of the impact to our portfolio, taking into consideration the current evolution of the portfolio and expected impact, due to recent economic developments, changes in values of collateral and delinquencies, among others. These changes in the allowance for loan and lease losses’ look back period for the consumer and auto and leasing portfolios, and economic factors for the commercial, auto, and consumer portfolios are considered a change in accounting estimate as per ASC 250-10 provisions, where adjustments should be made prospectively.

At September 30, 2014, the Company’s allowance for non-covered loan and lease losses amounted to $64.9 million, an increase from $54.3 million at December 31, 2013. At September 30, 2014, $50.3 million of the allowance corresponded to originated and other loans held for investment, or 1.84% of total non-covered originated and other loans held for investment, compared to $49.1 million or 2.04% of total non-covered originated and other loans held for investment at December 31, 2013. The allowance increased as a result of a $21.6 million provision for loan and lease losses and $7.2 million of recoveries, which were partially offset by charge-offs of $27.6 million during the nine-month period ended September 30, 2014. The allowance for residential mortgage loans and commercial loans decreased by 5.3% (or $1.1 million), and 38.8% (or $5.8 million), respectively, when compared with the balances recorded at December 31, 2013. The allowance for consumer loans and auto and leases increased by 45.0% (or $2.7 million) and 70.4% (or $5.5 million), respectively, when compared with the balances recorded at December 31, 2013. The unallocated allowance at September 30, 2014 decreased by 51.4%, or $193 thousand, when compared with the balance recorded at December 31, 2013. Changes are related to the evolution and the current trends of the portfolio. In the mortgage and commercial portfolios, losses have decreased, therefore less reserve was required. In the consumer and auto portfolios, losses had increased, therefore higher reserve was required.

Allowance for loan and lease losses recorded for acquired non-covered loans accounted for under the provisions of ASC 310-20 at September 30, 2014 was $4.5 million compared to $2.4 million at December 31, 2013, a 89.5% increase. The allowance increased as a result of a $10.5 million provision for loan and lease losses and $1.9 million of recoveries, which were partially offset by $10.4 million in charge-offs during the nine-month period ended September 30, 2014. The allowance for commercial loans decreased by 70.8% (or $656 thousand), when compared with the balance recorded at December 31, 2013. The allowance for consumer and auto loans increased by 100% (or $1.0 million) and 121.2% (or $1.7 million), respectively, when compared with the balances recorded at December 31, 2013, due to the normal amortization of credit discount of these acquired loans.

Allowance for loan and lease losses recorded for acquired non-covered loans accounted for under ASC-310-30 at September 30, 2014 was $10.1 million as compared to $2.9 million at December 31, 2013. The allowance increased as a result of a $7.3 million provision for loan and lease losses during the nine-month period ended September 30, 2014. The allowance for commercial loans increased by 490.5% (or $8.4 million), when compared with the balance recorded at December 31, 2013. The allowance for consumer and auto loans decreased by 98.8% (or $413 thousand) and 100% (or $732 thousand), respectively, when compared with the balances recorded at December 31, 2013.

Allowance for loan and lease losses recorded for covered loans at September 30, 2014 was $62.2 million as compared to $52.7 million at December 31, 2013. The allowance increased as a result of a $4.3 million provision for loan and lease losses and $5.2 million of FDIC shared-loss portion of provision for covered loan and lease losses during the nine-month period ended September 30, 2014. The allowance for loan and lease losses on covered loans is accounted under the provisions of ASC 310-30. Under this accounting guidance, the allowance for loan and lease losses on covered loans is evaluated at each financial reporting period, based on forecasted cash flows. Credit related decreases in expected cash flows, compared to those previously forecasted, are recognized by recording a provision for credit losses on covered loans when it is probable that all cash flows expected at acquisition will not be collected. The portion of the loss on covered loans reimbursable from the FDIC is recorded as an offset to the provision for credit losses and increases the FDIC indemnification asset.

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Please refer to the “Provision for Loan and Lease Losses” section in this MD&A for a more detailed analysis of provisions for loan and lease losses.

Non-performing Assets

The Company’s non-performing assets include non-performing loans and foreclosed real estate (see Tables 11 and 12). At September 30, 2014 and December 31, 2013, the Company had $103.7 million and $86.2 million, respectively, of non-accrual loans, including acquired loans accounted under ASC 310-20 (loans with revolving feature and/or acquired at a premium). At September 30, 2014 and December 31 2013, loans whose terms have been extended and which are classified as troubled-debt restructuring that are not included in non-performing assets amounted to $273.6 million and $66.5 million, respectively.

Covered loans and loans acquired in the BBVAPR Acquisition with credit deterioration are considered to be performing due to the application of the accretion method under ASC 310-30, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Credit related decreases in expected cash flows, compared to those previously forecasted are recognized by recording a provision for credit losses on non-covered loans when it is probable that all cash flows expected at acquisition will not be collected.

At September 30, 2014, the Company’s non-performing assets increased by 13.4% to $176.1 million (3.07% of total assets, excluding covered assets and acquired loans with deteriorated credit quality) from $155.3 million (2.61% of total assets, excluding covered assets and acquired loans with deteriorated credit quality) at December 31, 2013. The Company does not expect non-performing loans to result in significantly higher losses as most are well-collateralized with adequate loan-to-value ratios. At September 30, 2014, the allowance for non-covered originated loan and lease losses to non-performing loans coverage ratio was 50.50% (61.52% at December 31, 2013).

The Company follows a conservative residential mortgage lending policy, with more than 90% of its residential mortgage portfolio consisting of fixed-rate, fully amortizing, fully documented loans that do not have the level of risk associated with subprime loans offered by certain major U.S. mortgage loan originators. Furthermore, the Company has never been active in negative amortization loans or adjustable rate mortgage loans, including those with teaser rates.

The following items comprise non-performing assets:

·Originated and other loans held for investment:

Mortgage loans — are placed on non-accrual status when they become 90 days or more past due and are written-down, if necessary, based on the specific evaluation of the collateral underlying the loan, except for FHA and VA insured mortgage loans which are placed in non-accrual when they become 18 months or more past due. At September 30, 2014, the Company’s originated non-performing mortgage loans totaled $67.0 million (64.6% of the Company’s non-performing loans), a 31.3% increase from $51.1 million (59.4% of the Company’s non-performing loans) at December 31, 2013. Non-performing loans in this category are primarily residential mortgage loans.

Commercial loans — are placed on non-accrual status when they become 90 days or more past due and are written-down, if necessary, based on the specific evaluation of the underlying collateral, if any. At September 30, 2014, the Company’s originated non-performing commercial loans amounted to $22.3 million (21.5% of the Company’s non-performing loans), a 2.4% decrease from $22.8 million at December 31, 2013 (26.5% of the Company’s non-performing loans). Most of this portfolio is collateralized by commercial real estate properties.

Consumer loans — are placed on non-accrual status when they become 90 days past due and written-off when payments are delinquent 120 days in personal loans and 180 days in credit cards and personal lines of credit. At September 30, 2014, the Company’s originated non-performing consumer loans amounted to $1.2 million (1.2% of the Company’s total non-performing loans), a 54.2% increase from $805 thousand at December 31, 2013 (0.9% of the Company’s total non-performing loans).

107

Auto loans and leases — are placed on non-accrual status when they become 90 days past due, partially written-off to collateral value when payments are delinquent 120 days, and fully written-off when payments are delinquent 180 days. At September 30, 2014, the Company’s originated non-performing auto loans and leases amounted to $9.0 million (8.7% of the Company’s total non-performing loans), an increase of 77.0% from $5.1 million at December 31, 2013 (5.9% of the Company’s total non-performing loans).

·Acquired loans accounted for under ASC 310-20 (loans with revolving features and/or acquired at premium):

Commercial revolving lines of credit and credit cards — are placed on non-accrual status when they become 90 days or more past due and are written-down, if necessary, based on the specific evaluation of the underlying collateral, if any. At September 30, 2014, the Company’s acquired non-performing commercial lines of credit accounted for under ASC 310-20 amounted to $1.0 million (1.0% of the Company’s non-performing loans), a 59.9% decrease from $2.5 million at December 31, 2013 (3.0% of the Company’s non-performing loans).

Consumer revolving lines of credit and credit cards — are placed on non-accrual status when they become 90 days past due and written-off when payments are delinquent 180 days. At September 30, 2014, the Company’s acquired non-performing consumer lines of credit and credit cards accounted for under ASC 310-20 totaled $1.4 million (1.4% of the Company’s non-performing loans), a 36.8% decrease from $2.2 million at December 31, 2013 (2.6% of the Company’s non-performing loans).

Auto loans acquired at premium - are placed on non-accrual status when they become 90 days past due, partially written-off to collateral value when payments are delinquent 120 days, and fully written-off when payments are delinquent 180 days. At September 30, 2014, the Company’s acquired non-performing auto loans accounted for under ASC 310-20 totaled $1.7 million (1.7% of the Company’s non-performing loans), an 8.6% increase from $1.6 million at December 31, 2013 (1.9% of the Company’s non-performing loans).

·Foreclosed real estate is initially recorded at the lower of the related loan balance or fair value less the estimated cost to sell as of the date of foreclosure. Any excess of the loan balance over the fair value of the property is charged against the allowance for loan and lease losses. Subsequently, any excess of the carrying value over the estimated fair value less disposition cost is charged to operations. Net losses on foreclosed real estate and other repossessed assets for the quarter and nine month period ended September 30, 2014, amounted to $5.3 million and $13.7 million, respectively, compared to $3.6 million and $7.1 million for the same periods in 2013.

The Company has two mortgage loan modification programs. These are the Loss Mitigation Program and the Non-traditional Mortgage Loan Program. Both programs are intended to help responsible homeowners to remain in their homes and avoid foreclosure, while also reducing the Company’s losses on non-performing mortgage loans.

The Loss Mitigation Program helps mortgage borrowers who are or will become financially unable to meet the current or scheduled mortgage payments. Loans that qualify under this program are those guaranteed by FHA, VA, RHS, “Banco de la Vivienda de Puerto Rico,” conventional loans guaranteed by Mortgage Guaranty Insurance Corporation (MGIC), conventional loans sold to FNMA and FHLMC, and conventional loans retained by the Company. The program offers diversified alternatives such as regular or reduced payment plans, payment moratorium, mortgage loan modification, partial claims (only FHA), short sale, and payment in lieu of foreclosure.

The Non-traditional Mortgage Loan Program is for non-traditional mortgages, including balloon payment, interest only / interest first, variable interest rate, adjustable interest rate and other qualified loans. Non-traditional mortgage loan portfolios are segregated into the following categories: performing loans that meet secondary market requirement and are refinanced under the credit underwriting guidelines of FHA/VA/FNMA/ FHLMC, and performing loans not meeting secondary market guidelines processed by the Company’s current credit and underwriting guidelines. The Company achieved an affordable and sustainable monthly payment by taking specific, sequential, and necessary steps such as reducing the interest rate, extending the loan term, capitalizing arrearages, deferring the payment of principal or, if the borrower qualifies, refinancing the loan.

There may not be a foreclosure sale scheduled within 60 days prior to a loan modification under any such programs. This requirement does not apply to loans where the foreclosure process has been stopped by the Company. In order to apply for any of the loan modification programs, the borrower may not be in active bankruptcy or have been discharged from Chapter 7 bankruptcy since the

108

loan was originated. Loans in these programs are to be evaluated by management for troubled-debt restructuring classification if the Company grants a concession for legal or economic reasons due to the debtor’s financial difficulties.

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TABLE 8 — ALLOWANCE FOR LOAN AND LEASE LOSSES SUMMARY
	Quarter Ended September 30,				Variance	Nine-Month Period Ended September 30,				Variance
	2014		2013		%	2014		2013		%
	(Dollars in thousands)
Non-covered loans
Originated and other loans:
Balance at beginning of period	$	50,638	$	45,701	10.8%	$	49,081	$	39,921	22.9%
Provision for non-covered         loan and lease losses		8,569		6,930	23.7%		21,625		48,645	-55.5%
Charge-offs		(11,622)		(5,762)	101.7%		(27,621)		(42,282)	-34.7%
Recoveries		2,694		704	282.7%		7,194		1,289	458.1%
		50,279		47,573	5.7%		50,279		47,573	5.7%
Acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	3,444	$	924	100.0%	$	2,354	$	-	100.0%
Provision for non-covered         loan and lease losses		3,731		2,970	25.6%		10,542		6,698	57.4%
Charge-offs		(3,408)		(2,831)	20.4%		(10,368)		(8,595)	20.6%
Recoveries		693		978	-29.1%		1,932		3,938	-50.9%
		4,460		2,041	118.5%		4,460		2,041	118.5%
Acquired loans accounted for under ASC 310-30:
Balance at beginning of period	$	6,278	$	-	100.0%	$	2,863	$	-	100.0%
Provision for non-covered         loan and lease losses		3,842		-	100.0%		7,257		-	100.0%
		10,120		-	100.0%		10,120		-	100.0%
Total non-covered loans balance   at end of period	$	64,859	$	49,614	30.7%	$	64,859	$	49,614	30.7%
Allowance for loans and lease       losses on originated and other       loans to:
Total originated loans		1.84%		2.03%	-9.2%		1.84%		2.03%	-9.2%
Non-performing originated loans		50.50%		59.78%	-15.5%		50.50%		59.78%	-15.5%
Allowance for loans and lease       losses on acquired loans       accounted for under       ASC 310-20 to:
Total acquired loans accounted         for under ASC 310-20		1.56%		0.39%	100.0%		1.56%		0.39%	100.0%
Non-performing acquired loans         accounted for under ASC 310-20		107.03%		70.33%	52.2%		107.03%		70.33%	52.2%
Covered loans
Balance at beginning of period	$	59,515	$	53,992	10.2%	$	52,729	$	54,124	-2.6%
Provision for covered         loan and lease losses, net		1,115		3,074	-63.7%		4,339		4,956	-12.4%
FDIC shared-loss portion on        (provision for) recapture of loan        and lease losses		1,597		(511)	-412.5%		5,159		(2,525)	-304.3%
Balance at end of period	$	62,227	$	56,555	10.0%	$	62,227	$	56,555	10.0%

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TABLE 9 — ALLOWANCE FOR NON-COVERED LOAN AND LEASE LOSSES BREAKDOWN
		September 30, 2014	December 31, 2013		Variance %
	(Dollars in thousands)
Originated and other loans held for investment
Allowance balance:
Mortgage	$	18,872	$	19,937	-5.3%
Commercial		9,112		14,897	-38.8%
Consumer		8,709		6,006	45.0%
Auto and leasing		13,404		7,866	70.4%
Unallocated allowance		182		375	-51.5%
Total allowance balance	$	50,279	$	49,081	2.4%
Allowance composition:
Mortgage		37.53%		40.62%	-7.6%
Commercial		18.12%		30.35%	-40.3%
Consumer		17.32%		12.24%	41.5%
Auto and leasing		26.66%		16.03%	66.3%
Unallocated allowance		0.37%		0.76%	-51.3%
		100.00%		100.00%
Allowance coverage ratio at end of period applicable to:
Mortgage		2.39%		2.60%	-8.3%
Commercial		0.75%		1.32%	-43.3%
Consumer		4.95%		4.70%	5.3%
Auto and leasing		2.47%		2.07%	19.2%
Unallocated allowance to total originated loans		0.01%		0.02%	-57.3%
Total allowance to total originated loans		1.84%		2.04%	-9.8%
Allowance coverage ratio to non-performing loans:
Mortgage		28.16%		39.05%	-27.9%
Commercial		40.88%		65.25%	-37.4%
Consumer		701.77%		746.09%	-5.9%
Auto and leasing		148.80%		154.57%	-3.7%
Total		50.50%		61.52%	-17.9%
Acquired loans accounted for under ASC 310-20
Allowance balance:
Commercial	$	270	$	926	-70.8%
Consumer		1,031		-	100.0%
Auto		3,159		1,428	121.2%
Total allowance balance	$	4,460	$	2,354	89.5%
Allowance composition:
Commercial		6.05%		39.34%	-84.6%
Consumer		23.12%		0.00%	100.0%
Auto		70.83%		60.66%	16.8%
		100.00%		100.00%
Allowance coverage ratio at end of period applicable to:
Commercial		1.00%		1.19%	-16.1%
Consumer		2.18%		0.00%	100.0%
Auto		1.50%		0.47%	216.5%
Total allowance to total acquired loans		1.56%		0.54%	189.4%
Allowance coverage ratio to non-performing loans:
Commercial		26.50%		36.41%	-27.2%
Consumer		73.54%		0.00%	100.0%
Auto		180.93%		88.81%	103.7%
Total		107.03%		36.95%	189.6%

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TABLE 9 — ALLOWANCE FOR NON-COVERED LOAN AND LEASE LOSSES BREAKDOWN (CONTINUED)
		September 30, 2014	December 31, 2013		Variance %
	(Dollars in thousands)
Acquired loans accounted for under ASC 310-30
Allowance balance:
Commercial	$	10,115	$	1,713	490.5%
Consumer		5		418	100.0%
Auto		-		732	-100.0%
Total allowance balance	$	10,120	$	2,863	253.5%
Allowance composition:
Commercial		99.95%		59.83%	67.1%
Consumer		0.05%		14.60%	100.0%
Auto		0.00%		25.57%	-100.0%
		100.00%		100.00%

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TABLE 10 — NET CREDIT LOSSES STATISTICS ON LOAN AND LEASES, EXCLUDING LOANS ACCOUNTED FOR UNDER ASC 310-30
	Quarter Ended September 30,				Variance		Nine-Month Period Ended September 30,			Variance
	2014		2013		%		2014		2013	%
	(Dollar in thousands)
Originated and other loans and leases:
Mortgage
Charge-offs	$	(1,563)	$	(1,758)	-11.1%	$	(3,764)	$	(33,466)	-88.8%
Recoveries		138		-	100.0%		374		-	100.0%
Total		(1,425)		(1,758)	-18.9%		(3,390)		(33,466)	-89.9%
Commercial
Charge-offs		(1,081)		(2,234)	-51.6%		(2,043)		(5,678)	-64.0%
Recoveries		56		28	100.0%		269		290	-7.2%
Total		(1,025)		(2,206)	-53.5%		(1,774)		(5,388)	-67.1%
Consumer
Charge-offs		(1,585)		(465)	240.9%		(3,820)		(1,034)	269.4%
Recoveries		66		37	78.4%		457		145	215.2%
Total		(1,519)		(428)	254.9%		(3,363)		(889)	278.3%
Auto
Charge-offs		(7,393)		(1,305)	466.5%		(17,994)		(2,105)	754.8%
Recoveries		2,434		639	280.9%		6,094		855	612.7%
Total		(4,959)		(666)	644.6%		(11,900)		(1,250)	852.0%
Net credit losses
Total charge-offs		(11,622)		(5,762)	101.7%		(27,621)		(42,283)	-34.7%
Total recoveries		2,694		704	282.7%		7,194		1,290	457.7%
Total	$	(8,928)	$	(5,058)	76.5%	$	(20,427)	$	(40,993)	-50.2%
Net credit losses to average     loans outstanding:
Mortgage		0.72%		0.92%	-21.7%		0.57%		5.70%	-90.0%
Commercial		0.34%		1.04%	-67.3%		0.20%		1.88%	-89.4%
Consumer		3.77%		1.75%	115.4%		3.08%		1.73%	78.0%
Auto		3.73%		0.98%	280.6%		3.32%		1.15%	188.7%
Total		1.34%		1.02%	31.4%		1.05%		3.96%	-73.5%
Recoveries to charge-offs		23.18%		12.22%	89.7%		26.05%		3.05%	753.7%
Average originated loans:
Mortgage	$	789,204	$	763,929	3.3%	$	786,434	$	783,172	0.4%
Commercial		1,190,607		852,395	39.7%		1,174,220		382,654	206.9%
Consumer		161,147		97,738	64.9%		145,659		68,480	112.7%
Auto		531,914		271,727	95.8%		478,592		144,995	230.1%
Total	$	2,672,872	$	1,985,789	34.6%	$	$ 2,584,905	$	1,379,301	87.4%

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TABLE 10 — NET CREDIT LOSSES STATISTICS ON LOAN AND LEASES, EXCLUDING LOANS ACCOUNTED FOR UNDER ASC 310-30 (CONTINUED)
	Quarter Ended September 30,				Variance		Nine-Month Period Ended September 30,			Variance
	2014		2013		%		2014		2013	%
	(Dollars in thousands)
Acquired loans accounted for under ASC 310-20:
Commercial
Charge-offs	$	(228)	$	-	100.0%	$	(512)	$	(25)	1948.0%
Recoveries		35		6	483.3%		65		6	983.3%
Total		(193)		6	-3316.7%		(447)		(19)	2252.6%
Consumer
Charge-offs		(1,432)		(1,233)	16.1%		(5,442)		(3,847)	41.5%
Recoveries		139		88	58.0%		363		932	-61.1%
Total		(1,293)		(1,145)	12.9%		(5,079)		(2,915)	74.2%
Auto
Charge-offs		(1,747)		(1,598)	9.3%		(4,413)		(4,723)	-6.6%
Recoveries		519		884	-41.3%		1,504		3,000	-49.9%
Total		(1,228)		(714)	72.0%		(2,909)		(1,723)	68.8%
Net credit losses
Total charge-offs		(3,407)		(2,831)	20.3%		(10,367)		(8,595)	20.6%
Total recoveries		693		978	-29.1%		1,932		3,938	-50.9%
Total	$	(2,714)	$	(1,853)	46.5%	$	(8,435)	$	(4,657)	81.1%
Net credit losses to average     loans outstanding:
Commercial		7.26%		-0.01%	-62125.6%		1.66%		0.01%	28946.2%
Consumer		7.88%		6.30%	25.1%		10.05%		4.93%	103.7%
Auto		2.21%		0.81%	171.6%		1.54%		0.53%	190.1%
Total		3.64%		1.18%	208.6%		3.17%		0.65%	387.4%
Recoveries to charge-offs		20.34%		34.55%	-41.1%		18.64%		45.82%	-59.3%
Average loans accounted for under ASC 310-20:
Commercial	$	10,634	$	205,051	-94.8%	$	35,983	$	444,255	-91.9%
Consumer		65,639		72,726	-9.7%		67,399		78,803	-14.5%
Auto		221,989		350,587	-36.7%		251,808		432,673	-41.8%
Total	$	298,262	$	628,364	-52.5%	$	355,190	$	955,731	-62.8%

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TABLE 11 — NON-PERFORMING ASSETS
	September 30,		December 31,		Variance
	2014		2013		(%)
	(Dollars in thousands)
Non-performing assets:
Non-accruing loans
Troubled-Debt Restructuring loans	$	26,558	$	26,847	-1.1%
Other loans		70,490		56,430	24.9%
Accruing loans
Troubled-Debt Restructuring loans		3,844		1,898	102.5%
Other loans		2,842		977	190.9%
Total non-performing loans	$	103,734	$	86,152	20.4%
Foreclosed real estate not covered under the         shared-loss agreements with the FDIC		50,750		56,815	-10.7%
Other repossessed assets		21,576		12,314	75.2%
	$	176,060	$	155,281	13.4%
Non-performing assets to total assets, excluding covered assets and acquired loans with deteriorated credit quality (including those by analogy)		3.07%		2.61%	17.6%
Non-performing assets to total capital		18.93%		17.55%	7.9%

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Interest that would have been recorded in the period if the     loans had not been classified as non-accruing loans	$	833	$	560	$	1,389	$	1,371

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TABLE 12 — NON-PERFORMING LOANS
	September 30,		December 31,		Variance
	2014		2013		%
	(Dollars in thousands)
Non-performing loans:
Originated and other loans held for investment
Mortgage	$	67,028	$	51,058	31.3%
Commercial		22,290		22,830	-2.4%
Consumer		1,241		805	54.2%
Auto and leasing		9,008		5,089	77.0%
		99,567		79,782	24.8%
Acquired loans accounted for under ASC 310-20 (Loans with         revolving feature and/or acquired at a premium)
Commercial		1,019		2,543	-59.9%
Consumer		1,402		2,219	-36.8%
Auto		1,746		1,608	8.6%
		4,167		6,370	-34.6%
Total	$	103,734	$	86,152	20.4%
Non-performing loans composition percentages:
Originated loans
Mortgage		64.6%		59.4%
Commercial		21.5%		26.5%
Consumer		1.2%		0.9%
Auto and leasing		8.7%		5.9%
Acquired loans accounted for under ASC 310-20 (Loans with         revolving feature and/or acquired at a premium)
Commercial		1.0%		3.0%
Consumer		1.4%		2.6%
Auto		1.7%		1.9%
Total		100.0%		100.0%
Non-performing loans to:
Total loans, excluding covered loans and loans accounted for         under ASC 310-30 (including those by analogy)		3.44%		3.04%	13.1%
Total assets, excluding covered assets and loans accounted for         under ASC 310-30 (including those by analogy)		1.81%		1.45%	24.8%
Total capital		11.15%		9.74%	14.6%
Non-performing loans with partial charge-offs to:
Total loans, excluding covered loans and loans accounted for         under ASC 310-30 (including those by analogy)		1.02%		0.83%	22.9%
Non-performing loans		29.51%		27.35%	7.9%
Other non-performing loans ratios:
Charge-off rate on non-performing loans to non-performing loans         on which charge-offs have been taken		54.35%		56.05%	-3.0%
Allowance for loan and lease losses to non-performing         loans on which no charge-offs have been taken		74.86%		82.18%	-8.9%

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TABLE 13 - LIABILITIES SUMMARY AND COMPOSITION
		September 30,		December 31,
	2014		2013		Variance %
	(Dollars in thousands)
Deposits:
Non-interest bearing deposits	$	734,449	$	744,328	-1.3%
NOW accounts		1,397,600		1,393,645	0.3%
Savings and money market accounts		1,263,114		1,194,566	5.7%
Certificates of deposit		1,672,708		2,048,040	-18.3%
Total deposits		5,067,871		5,380,579	-5.8%
Accrued interest payable		1,304		2,686	-51.5%
Total deposits and accrued interest payable		5,069,175		5,383,265	-5.8%
Borrowings:
Securities sold under agreements to repurchase		1,012,228		1,267,618	-20.1%
Advances from FHLB		334,787		336,143	-0.4%
Other term notes		3,872		3,663	5.7%
Subordinated capital notes		101,190		100,010	1.2%
Total borrowings		1,452,077		1,707,434	-15.0%
Total deposits and borrowings		6,521,252		7,090,699	-8.0%
Other Liabilities:
Securities purchased but not yet received		30,057		-	100.0%
Derivative liabilities		11,414		14,937	-23.6%
Acceptances outstanding		21,077		23,042	-8.5%
Other liabilities		159,541		144,424	10.5%
Total liabilities	$	6,743,341	$	7,273,102	-7.3%
Deposits portfolio composition percentages:
Non-interest bearing deposits		14.5%		13.8%
NOW accounts		27.6%		25.9%
Savings and money market accounts		24.9%		22.2%
Certificates of deposit		33.0%		38.1%
		100.0%		100.0%
Borrowings portfolio composition percentages:
Securities sold under agreements to repurchase		69.7%		74.2%
Advances from FHLB		23.1%		19.7%
Other term notes		0.3%		0.2%
Subordinated capital notes		6.9%		5.9%
		100.0%		100.0%
Securities sold under agreements to repurchase (excluding accrued interest)
Amount outstanding at period-end	$	1,010,000	$	1,265,000
Daily average outstanding balance	$	1,058,378	$	1,353,011
Maximum outstanding balance at any month-end	$	1,149,167	$	1,552,269

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Liabilities and Funding Sources

As shown in Table 13 above, at September 30, 2014, the Company’s total liabilities were $6.743 billion, 7.3% less than the $7.273 billion reported at December 31, 2013. Deposits and borrowings, the Company’s funding sources, amounted to $6.521 billion at September 30, 2014 versus $7.091 billion at December 31, 2013, an 8.0% decrease.

At September 30, 2014, deposits represented 78% and borrowings represented 22% of interest-bearing liabilities, compared to 76% and 24%, respectively, at December 31, 2013. At September 30, 2014, deposits, the largest category of the Company’s interest-bearing liabilities, were $5.069 billion, down 5.8% from $5.383 billion at December 31, 2013. Non-maturing deposit balances increased 1.09%, to $3.395 billion, while higher-priced time deposits declined 18.3% as part of efforts to reduce the cost of deposits, which averaged 0.66% as of September 30, 2014 compared to 0.73% at December 31, 2013.

Borrowings consist mainly of repurchase agreements, FHLB-NY advances, subordinated capital notes, and short-term borrowings. At September 30, 2014, borrowings amounted to $1.452 billion, 15.0% lower than the $1.707 billion reported at December 31, 2013. Repurchase agreements as of September 30, 2014 decreased $255.4 million to $1.012 billion from $1.268 billion at December 31, 2013, as the Company used available cash to pay off repurchase agreements at maturity.

As a member of the FHLB-NY, the Bank can obtain advances from the FHLB-NY secured by the FHLB-NY stock owned by the Bank as well as by certain of the Bank’s mortgage loans and investment securities. Advances from the FHLB-NY amounted to $334.8 million as of September 30, 2014 and $336.1 million as of December 31, 2013. These advances mature from October 2014 through July 2020.

Stockholders’ Equity

At September 30, 2014, the Company’s total stockholders’ equity was $930.0 million, a 5.1% increase when compared to $884.9 million at December 31, 2013. Increase in stockholders’ equity was mainly driven by the income for the nine-month period ended September 30, 2014, partially offset by an increase in treasury stock, as a result of the 707,500 repurchased shares of outstanding common stock during the first and third quarter of 2014.

From December 31, 2013 to September 30, 2014, tangible common equity to total assets increased to 8.70% from 7.61%, Tier 1 Leverage Capital Ratio increased to 10.51% from 9.11%, Tier 1 Risk-Based Capital Ratio increased to 15.96% from 14.35%, and Total Risk-Based Capital Ratio increased to 17.50% from 16.14%.

Taking into consideration the strong capital position, in the fourth quarter of 2013, the Company increased the cash dividend per common share to $0.08 from the dividend of $0.06 paid in previous quarters in 2013.

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The following are the consolidated capital ratios of the Company at September 30, 2014 and December 31, 2013:

TABLE 14 — CAPITAL, DIVIDENDS AND STOCK DATA
	September 30,		December 31,		Variance
	2014		2013		%
	(Dollars in thousands, except per share data)
Capital data:
Stockholders’ equity	$	929,998	$	884,913	5.1%
Regulatory Capital Ratios data:
Leverage capital ratio		10.51%		9.06%	16.0%
Minimum leverage capital ratio required		4.00%		4.00%
Actual tier 1 capital	$	782,797	$	736,106	6.3%
Minimum tier 1 capital required	$	297,984	$	324,910	-8.3%
Excess over regulatory requirement	$	484,814	$	411,197	17.9%
Tier 1 risk-based capital ratio		15.96%		14.38%	11.0%
Minimum tier 1 risk-based capital ratio required		4.00%		4.00%
Actual tier 1 risk-based capital	$	782,797	$	736,106	6.3%
Minimum tier 1 risk-based capital required	$	196,233	$	204,757	-4.2%
Excess over regulatory requirement	$	586,565	$	531,350	10.4%
Risk-weighted assets	$	4,905,814	$	5,118,927	-4.2%
Total risk-based capital ratio		17.50%		16.16%	8.3%
Minimum total risk-based capital ratio required		8.00%		8.00%
Actual total risk-based capital	$	858,356	$	827,459	3.7%
Minimum total risk-based capital required	$	392,465	$	409,514	-4.2%
Excess over regulatory requirement	$	465,891	$	417,946	11.5%
Risk-weighted assets	$	4,905,814	$	5,118,927	-4.2%
Tangible common equity to total assets		8.70%		7.61%	14.3%
Tangible common equity to risk-weighted assets		13.61%		12.13%	12.2%
Total equity to total assets		12.12%		10.85%	11.7%
Total equity to risk-weighted assets		18.96%		17.29%	9.7%
Tier 1 common equity to risk-weighted assets		11.86%		10.46%	13.4%
Tier 1 common equity capital	$	581,927	$	535,237	8.7%
Stock data:
Outstanding common shares		45,059,988		45,676,922	-1.4%
Book value per common share	$	16.96	$	15.74	7.8%
Tangible book value per common share	$	14.82	$	13.60	9.0%
Market price at end of period	$	14.98	$	17.34	-13.6%
Market capitalization at end of period	$	674,999	$	792,038	-14.8%

	Nine-Month Period Ended September 30,				Variance
	2014		2013		%
Common dividend data:
Cash dividends declared	$	10,822	$	8,219	31.7%
Cash dividends declared per share	$	0.24	$	0.18	33.3%
Payout ratio		21.05%		12.95%	62.6%
Dividend yield		2.14%		1.48%	44.1%

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The following table presents a reconciliation of the Company’s total stockholders’ equity to tangible common equity and total assets to tangible assets at September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
		(In thousands, except share or per share information)
Total stockholders' equity	$	929,998	$	884,913
Preferred stock		(176,000)		(176,000)
Preferred stock issuance costs		10,130		10,130
Goodwill		(86,069)		(86,069)
Core deposit intangible		(6,798)		(7,804)
Customer relationship intangible		(3,487)		(4,108)
Total tangible common equity	$	667,774	$	621,062
Total assets		7,673,339		8,158,015
Goodwill		(86,069)		(86,069)
Core deposit intangible		(6,798)		(7,804)
Customer relationship intangible		(3,487)		(4,108)
Total tangible assets	$	7,576,985	$	8,060,034
Tangible common equity to tangible assets		8.81%		7.71%
Common shares outstanding at end of period		45,059,988		45,676,922
Tangible book value per common share	$	14.82	$	13.60

The tangible common equity ratio and tangible book value per common share are non-GAAP measures. Management and many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations. Neither tangible common equity nor tangible assets or related measures should be considered in isolation or as a substitute for stockholders’ equity, total assets or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Company calculates its tangible common equity, tangible assets and any other related measures may differ from that of other companies reporting measures with similar names.

The Tier 1 common equity to risk-weighted assets ratio is another non-GAAP measure. Ratios calculated based upon Tier 1 common equity have become a focus of regulators and investors, and management believes ratios based on Tier 1 common equity assist investors in analyzing the Company’s capital position. In connection with the 2009 Supervisory Capital Assessment Program, the Federal Reserve Board supplemented its assessment of the capital adequacy of certain large bank holding companies based on a variation of Tier 1 capital, known as Tier 1 common equity.

Because Tier 1 common equity is not formally defined by GAAP or, unlike Tier 1 capital, codified in the federal banking regulations, this measure is considered to be a non-GAAP financial measure. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. To mitigate these limitations, the Company has procedures in place to calculate these measures using the appropriate GAAP or regulatory components. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP.

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The table below presents a reconciliation of the Company’s total common equity (GAAP) at September 30, 2014 and December 31, 2013 to Tier 1 common equity (non-GAAP):

	September 30,		December 31,
	2014		2013
	(Dollars in thousands)
Common stockholders' equity	$	764,128	$	719,043
Unrealized gains on available-for-sale securities, net of income tax		(20,318)		(11,434)
Unrealized losses on cash flow hedges, net of income tax		6,907		8,243
Disallowed deferred tax assets		(71,037)		(81,254)
Disallowed servicing assets		(1,399)		(1,380)
Intangible assets:
Goodwill		(86,069)		(86,069)
Other intangible assets		(10,285)		(11,912)
Total Tier 1 common equity	$	581,927	$	535,238
Tier 1 common equity to risk-weighted assets		11.86%		10.46%

The following table presents the Company’s capital adequacy information at September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
	(Dollars in thousands)
Risk-based capital:
Tier 1 capital	$	782,797	$	736,106
Supplementary (Tier 2) capital		75,559		91,353
Total risk-based capital	$	858,356	$	827,459
Risk-weighted assets:
Balance sheet items	$	4,738,053	$	4,953,911
Off-balance sheet items		167,761		165,016
Total risk-weighted assets	$	4,905,814	$	5,118,927
Ratios:
Tier 1 capital (minimum required - 4%)		15.96%		14.38%
Total capital (minimum required - 8%)		17.50%		16.16%
Leverage ratio		10.51%		9.06%
Equity to assets		12.12%		10.85%
Tangible common equity to assets		8.70%		7.61%

The Federal Reserve Board has risk-based capital guidelines for bank holding companies. Under the guidelines, the minimum ratio of qualifying total capital to risk-weighted assets is 8%. At least half of the total capital is to be comprised of qualifying common stockholders’ equity, qualifying noncumulative perpetual preferred stock (including related surplus), minority interests related to qualifying common or noncumulative perpetual preferred stock directly issued by a consolidated U.S. depository institution or foreign bank subsidiary, and restricted core capital elements (collectively, “Tier 1 Capital”). Banking organizations are expected to maintain at least 50% of their Tier 1 Capital as common equity. Except for certain debt or equity instruments issued on or after May 19, 2010, which are excluded from Tier 1 Capital , not more than 25% of qualifying Tier 1 Capital may consist of qualifying cumulative perpetual preferred stock, trust preferred securities or other so-called restricted core capital elements. “Tier 2 Capital” may consist, subject to certain limitations, of allowance for loan and lease losses; perpetual preferred stock and related surplus; hybrid capital instruments, perpetual debt, and mandatory convertible debt securities; term subordinated debt and intermediate-term preferred stock, including related surplus; and unrealized holding gains on equity securities. “Tier 3 Capital” consists of qualifying unsecured subordinated debt. The sum of Tier 2 and Tier 3 Capital may not exceed the amount of Tier 1 Capital.

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Pursuant to the Dodd-Frank Act, federal banking agencies have adopted new capital rules that became effective January 1, 2014 for advanced approaches banking organizations (i.e., those with consolidated assets greater than $250 billion or consolidated on-balance sheet foreign exposures of at least $10 billion) and will become effective on January 1, 2015 for all other covered organizations (subject to certain phase-in periods through January 1, 2019) and that will replace their general risk-based capital rules, advanced approaches rule, market risk rule, and leverage rules.

The new capital rules provide certain changes to the prompt corrective action regulations adopted by the agencies under Section 38 of the FDIA, as amended by FDICIA. These regulations are designed to place restrictions on U.S. insured depository institutions if their capital levels begin to show signs of weakness. The five capital categories established by the agencies under their prompt corrective action framework are: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.” As of September 30, 2014 and December 31, 2013, the Company is “well capitalized” for regulatory purposes.

The new capital rules expand such categories by introducing a common equity tier 1 capital requirement for all depository institutions, revising the minimum risk-based capital ratios and, beginning in 2018, the proposed supplementary leverage requirement for advanced approaches banking organizations. The common equity tier 1 capital ratio is a new minimum requirement designed to ensure that banking organizations hold sufficient high-quality regulatory capital that is available to absorb losses on a going-concern basis. The Company believes that it will continue to meet the “well capitalized” category after the implementation of new capital rules on January 1, 2015.

The Bank is considered “well capitalized” under the regulatory framework for prompt corrective action. The table below shows the Bank’s regulatory capital ratios at September 30, 2014, and December 31, 2013:

	September 30 ,		December 31,		Variance
	2014		2013		%
	(Dollars in thousands)
Oriental Bank Regulatory Capital Ratios:
Total Tier 1 Capital to Total Assets		9.99%		8.54%	17.0%
Actual tier 1 capital	$	738,482	$	688,350	7.3%
Minimum capital requirement (4%)	$	295,673	$	322,395	-8.3%
Minimum to be well capitalized (5%)	$	369,592	$	402,993	-8.3%
Tier 1 Capital to Risk-Weighted Assets		15.12%		13.51%	11.9%
Actual tier 1 risk-based capital	$	738,482	$	688,350	7.3%
Minimum capital requirement (4%)	$	195,322	$	203,819	-4.2%
Minimum to be well capitalized (6%)	$	292,983	$	305,728	-4.2%
Total Capital to Risk-Weighted Assets		16.66%		15.30%	8.9%
Actual total risk-based capital	$	813,760	$	779,413	4.4%
Minimum capital requirement (8%)	$	390,644	$	407,637	-4.2%
Minimum to be well capitalized (10%)	$	488,305	$	509,547	-4.2%

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The Company’s common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “OFG.” At September 30, 2014 and December 31, 2013, the Company’s market capitalization for its outstanding common stock was $675.0 million ($14.98 per share) and $792.0 million ($17.34 per share), respectively.

The following table provides the high and low prices and dividends per share of the Company’s common stock for each quarter of the last two calendar years:

					Cash
	Price				Dividend
	High		Low		Per share
2014
September 30, 2014	$	18.89	$	14.92	$	0.08
June 30, 2014	$	18.88	$	16.38	$	0.08
March 31, 2014	$	17.54	$	14.30	$	0.08
2013
December 31, 2013	$	17.34	$	14.74	$	0.08
September 30, 2013	$	18.97	$	16.13	$	0.06
June 30, 2013	$	18.11	$	14.26	$	0.06
March 31, 2013	$	15.83	$	13.85	$	0.06
2012
December 31, 2012	$	13.35	$	9.98	$	0.06
September 30, 2012	$	11.49	$	10.02	$	0.06
June 30, 2012	$	12.37	$	9.87	$	0.06
March 31, 2012	$	12.69	$	11.25	$	0.06

Under the Company’s current stock repurchase program it is authorized to purchase in the open market up to $70 million of its outstanding shares of common stock. The shares of common stock repurchased are to be held by the Company as treasury shares. During the nine-month period ended September 30, 2014, the Company purchased 707,500 shares under this program for a total of $10.4 million, at an average price of $14.66 per share. There were no repurchases during 2013. The number of shares that may yet be purchased under the $70 million program is estimated at 1,548,481 and was calculated by dividing the remaining balance of $23.2 million the closing price of the Company’s common stock at September 30, 2014 ($14.98).

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Background

The Company’s risk management policies are established by its Board of Directors (the “Board”) with the assistance of the Board Risk and Compliance Committee formed during the second quarter of 2014. Such policies are implemented by management through the adoption of a risk management program, which is overseen and monitored by the Chief Risk Officer and the Executive Risk and Compliance Committee and the Board Risk and Compliance Committee. The Company has continued to refine and enhance its risk management program by strengthening policies, processes and procedures necessary to maintain effective risk management.

All aspects of the Company’s business activities are susceptible to risk. Consequently, risk identification and monitoring are essential to risk management. As more fully discussed below, the Company’s primary risk exposures include, market, interest rate, credit, liquidity, operational and concentration risks.

Market Risk

Market risk is the risk to earnings or capital arising from adverse movements in market rates or prices, such as interest rates or prices. The Company evaluates market risk together with interest rate risk. The Company’s financial results and capital levels are constantly exposed to market risk. The Board and management are primarily responsible for ensuring that the market risk assumed by the Company complies with the guidelines established by policies approved by the Board. The Board has delegated the management of this riskto the Asset/Liability Management Committee (“ALCO”) which is composed of certain executive officers from the business, treasury and finance areas. One of ALCO’s primary goals is to ensure that the market risk assumed by the Company is within the parameters established in such policies.

Interest Rate Risk

Interest rate risk is the exposure of the Company’s earnings or capital to adverse movements in interest rates. It is a predominant market risk in terms of its potential impact on earnings. The Company manages its asset/liability position in order to limit the effects of changes in interest rates on net interest income. ALCO oversees interest rate risk, liquidity management and other related matters.

In discharging its responsibilities, ALCO examines current and expected conditions in global financial markets, competition and prevailing rates in the local deposit market, liquidity, unrealized gains and losses in securities, recent or proposed changes to the investment portfolio, alternative funding sources and their costs, hedging and the possible purchase of derivatives such as swaps, and any tax or regulatory issues which may be pertinent to these areas.

On a monthly basis, the Company performs a net interest income simulation analysis on a consolidated basis to estimate the potential change in future earnings from projected changes in interest rates. These simulations are carried out over a one-year time horizon, assuming certain gradual upward and downward interest rate movements, achieved during a twelve-month period. Simulations are carried out in two ways:

(i)using a static balance sheet as the Company had on the simulation date, and

(ii)using a dynamic balance sheet based on recent growth patterns and business strategies.

The balance sheet is divided into groups of assets and liabilities detailed by maturity or re-pricing and their corresponding interest yields and costs. As interest rates rise or fall, these simulations incorporate expected future lending rates, current and expected future funding sources and costs, the possible exercise of options, changes in prepayment rates, deposits decay and other factors which may be important in projecting the future growth of net interest income.

The Company uses a software application to project future movements in the Company’s balance sheet and income statement. The starting point of the projections generally corresponds to the actual values of the balance sheet on the date of the simulations.

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These simulations are complex, and use many assumptions that are intended to reflect the general behavior of the Company over the period in question. There can be no assurance that actual events will match these assumptions in all cases. For this reason, the results of these simulations are only approximations of the true sensitivity of net interest income to changes in market interest rates. The following table presents the results of the simulations at September 30, 2014 for the most likely scenario, assuming a one-year time horizon:

	Net Interest Income Risk (one year projection)
	Static Balance Sheet			Growing Simulation
	Amount		Percent	Amount		Percent
	Change		Change	Change		Change
Change in interest rate	(Dollars in thousands)
+ 200 Basis points	$	7,640	2.13%	$	7,045	1.96%
+ 100 Basis points	$	4,150	1.16%	$	3,883	1.08%
- 50 Basis points	$	(437)	-0.12%	$	(339)	-0.09%

The impact of -100 and -200 basis point reductions in interest rates is not presented in view of current level of the federal funds rate and other short-term interest rates.

Future net interest income could be affected by the Company’s investments in callable securities, prepayment risk related to mortgage loans and mortgage-backed securities, and any structured repurchase agreements and advances from the FHLB-NY in which it may enter into from time to time. As part of the strategy to limit the interest rate risk and reduce the re-pricing gaps of the Company’s assets and liabilities, the Company has executed certain transactions which include extending the maturity and the re-pricing frequency of the liabilities to longer terms reducing the amounts of its structured repurchase agreements and entering into hedge-designated swaps to hedge the variability of future interest cash flows of forecasted wholesale borrowings that only consist of advances from the FHLB-NY as of September 30, 2014.

The Company maintains an overall interest rate risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings that are caused by interest rate volatility. The Company’s goal is to manage interest rate sensitivity by modifying the repricing or maturity characteristics of certain balance sheet assets and liabilities so that the net interest margin is not, on a material basis, adversely affected by movements in interest rates. As a result of interest rate fluctuations, hedged fixed-rate assets and liabilities will appreciate or depreciate in market value. Also, for some fixed-rate assets or liabilities, the effect of this variability in earnings is expected to be substantially offset by the Company’s gains and losses on the derivative instruments that are linked to the forecasted cash flows of these hedged assets and liabilities. The Company considers its strategic use of derivatives to be a prudent method of managing interest-rate sensitivity as it reduces the exposure of earnings and the market value of its equity to undue risk posed by changes in interest rates. The effect of this unrealized appreciation or depreciation is expected to be substantially offset by the Company’s gains or losses on the derivative instruments that are linked to these hedged assets and liabilities. Another result of interest rate fluctuations is that the contractual interest income and interest expense of hedged variable-rate assets and liabilities, respectively, will increase or decrease.

Derivative instruments that are used as part of the Company’s interest risk management strategy include interest rate swaps, forward-settlement swaps, futures contracts, and option contracts that have indices related to the pricing of specific balance sheet assets and liabilities. Interest rate swaps generally involve the exchange of fixed and variable-rate interest payments between two parties based on a common notional principal amount and maturity date. Interest rate futures generally involve exchanged-traded contracts to buy or sell U.S. Treasury bonds and notes in the future at specified prices. Interest rate options represent contracts that allow the holder of the option to (i) receive cash or (ii) purchase, sell, or enter into a financial instrument at a specified price within a specified period. Some purchased option contracts give the Company the right to enter into interest rate swaps and cap and floor agreements with the writer of the option. In addition, the Company enters into certain transactions that contain embedded derivatives. When the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, it is bifurcated and carried at fair value. Please refer to Note 7 to the accompanying unaudited consolidated financial statements for further information concerning the Company’s derivative activities.

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Following is a summary of certain strategies, including derivative activities, currently used by the Company to manage interest rate risk:

Interest rate swaps — The Company entered into hedge-designated swaps to hedge the variability of future interest cash flows of forecasted wholesale borrowings attributable to changes in the one-month LIBOR rate. Once the forecasted wholesaleborrowings transactions occurred, the interest rate swap effectively fixes the Company’s interest payments on an amount of forecasted interest expense attributable to the one-month LIBOR rate corresponding to the swap notional stated rate. A derivative liability of $8.7 million (notional amount of $265.0 million) was recognized at September 30, 2014 related to the valuation of these swaps.

In addition, the Company has certain derivative contracts, including interest rate swaps not designated as hedging instruments, which are utilized to convert certain variable rate loans to fixed-rate loans, and the mirror-images of these interest rate swaps in which the Company enters into to minimize its interest rate risk exposure that results from offering the derivatives to clients. These interest rate swaps are marked to market through earnings. At September 30, 2014, interest rate swaps offered to clients not designated as hedging instruments represented a derivative asset of $2.5 million (notional amounts of $16.5 million), and the mirror-image interest rate swaps in which BBVAPR entered into represented a derivative liability of $2.5 million (notional amounts of $16.5 million).

S&P options — The Company has offered its customers certificates of deposit with an option tied to the performance of the S&P 500 Index. At the end of five years, the depositor receives a minimum return or a specified percentage of the average increase of the month-end value of the S&P 500 Index. The Company uses option agreements with major money center banks and major broker-dealer companies to manage its exposure to changes in that index. Under the terms of the option agreements, the Company receives the average increase in the month-end value of the S&P 500 Index in exchange for a fixed premium. The changes in fair value of the options purchased and the options embedded in the certificates of deposit are recorded in earnings.

At September 30, 2014, the fair value of the purchased options used to manage the exposure to the S&P 500 Index on stock-indexed certificates of deposit represented an asset of $5.8 million (notional amounts of $12.0 million) and the options sold to customers embedded in the certificates of deposit represented a liability of $5.6 million (notional amount of $11.6 million).

Wholesale borrowings — The Company uses interest rate swaps to hedge the variability of interest cash flows of certain advances from the FHLB-NY that are tied to a variable rate index. The interest rate swaps effectively fix the Company’s interest payments on these borrowings. As of September 30, 2014, the Company had $265 million in interest rate swaps at an average rate of 2.6% designated as cash flow hedges for $265 million in advances from the FHLB-NY that reprice or are being rolled over on a monthly basis.

Credit Risk

Credit risk is the possibility of loss arising from a borrower or counterparty in a credit-related contract failing to perform in accordance with its terms. The principal source of credit risk for the Company is its lending activities. In Puerto Rico, the Company’s principal market, economic conditions are challenging, as they have been for the last eight years, due to a shrinking population, a protracted economic recession, a housing sector that remains under pressure, the Puerto Rico government’s large indebtedness and structural budget deficit, and the recent rating downgrades of Puerto Rico general obligations and other government bonds to levels that are below investment grade.

The Company manages its credit risk through a comprehensive credit policy which establishes sound underwriting standards by monitoring and evaluating loan portfolio quality, and by the constant assessment of reserves and loan concentrations. The Company also employs proactive collection and loss mitigation practices.

The Company may also encounter risk of default in relation to its securities portfolio. The securities held by the Company are principally agency mortgage-backed securities. Thus, a substantial portion of these instruments are guaranteed by mortgages, a U.S. government-sponsored entity, or the full faith and credit of the U.S. government.

The Company’s Executive Credit Committee, composed of its Chief Executive Officer, Chief Credit Risk Officer and other senior executives, has primary responsibility for setting strategies to achieve the Company’s credit risk goals and objectives. Those goals and objectives are set forth in the Company’s Credit Policy as approved by the Board.

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Liquidity Risk

Liquidity risk is the risk of the Company not being able to generate sufficient cash from either assets or liabilities to meet obligations as they become due without incurring substantial losses. The Board has established a policy tomanage this risk. The Company’s cash requirements principally consist of deposit withdrawals, contractual loan funding, repayment of borrowings as these mature, and funding of new and existing investments as required.

The Company’s business requires continuous access to various funding sources. While the Company is able to fund its operations through deposits as well as through advances from the FHLB-NY and other alternative sources, the Company’s business is dependent upon other wholesale funding sources. Although the Company has selectively reduced its use of wholesale funding sources, such as repurchase agreements and brokered deposits, it is still dependent on wholesale funding sources. As of September 30, 2014, the Company had $1.010 billion in repurchase agreements and $669.6 million in brokered deposits.  

Brokered deposits are typically offered through an intermediary to small retail investors. The Company’s ability to continue to attract brokered deposits is subject to variability based upon a number of factors, including volume and volatility in the global securities markets, the Company’s credit rating, and the relative interest rates that it is prepared to pay for these liabilities. Brokered deposits are generally considered a less stable source of funding than core deposits obtained through retail bank branches. Investors in brokered deposits are generally more sensitive to interest rates and will generally move funds from one depository institution to another based on small differences in interest rates offered on deposits.

The Company participates in the Federal Reserve Bank’s Borrower-In Custody Program which allows it to pledge certain type of loans while keeping physical control of the collateral.

Although the Company expects to have continued access to credit from the foregoing sources of funds, there can be no assurance that such financing sources will continue to be available or will be available on favorable terms. In a period of financial disruption or if negative developments occur with respect to the Company, the availability and cost of the Company’s funding sources could be adversely affected. In that event, the Company’s cost of funds may increase, thereby reducing its net interest income, or the Company may need to dispose of a portion of its investment portfolio, which depending upon market conditions, could result in realizing a loss or experiencing other adverse accounting consequences upon any such dispositions. The Company’s efforts to monitor and manage liquidity risk may not be successful to deal with dramatic or unanticipated changes in the global securities markets or other reductions in liquidity driven by the Company or market-related events. In the event that such sources of funds are reduced or eliminated and the Company is not able to replace these on a cost-effective basis, the Company may be forced to curtail or cease its loan origination business and treasury activities, which would have a material adverse effect on its operations and financial condition.

As of September 30, 2014, the Company had approximately $663.5 million in unrestricted cash and cash equivalents, $196.0 million in investment securities that are not pledged as collateral, $653.5 million in borrowing capacity at the FHLB-NY and $748.9 million in borrowing capacity at the Federal Reserve’s discount window available to cover liquidity needs.

     Operational Risk

Operational risk is the risk of loss from inadequate or failed internal processes, personnel and systems or from external events. All functions, products and services of the Company are susceptible to operational risk.

The Company faces ongoing and emerging risk and regulatory pressure related to the activities that surround the delivery of banking and financial products and services. Coupled with external influences such as market conditions, security risks, and legal risk, the potential for operational and reputational loss has increased. In order to mitigate and control operational risk, the Company has developed, and continues to enhance, specific internal controls, policies and procedures that are designed to identify and manage operational risk at appropriate levels throughout the organization. The purpose of these policies and procedures is to provide reasonable assurance that the Company’s business operations are functioning within established limits.

127

The Company classifies operational risk into two major categories: business specific and corporate-wide affecting all business lines. For business specific risks, a risk assessment group works with the various business units to ensure consistency in policies, processes and assessments. With respect to corporate-wide risks, such as information security, business recovery, legal and compliance, the Company has specialized groups, such as Information Security, Enterprise Risk Management, Corporate Compliance, Information Technology, Legal and Operations. These groups assist the lines of business in the development and implementation of risk management practices specific to the needs of the business groups. All these matters are reviewed and discussed in the Information Technology Steering Committee, and the Executive Risk and Compliance Committee.

The Company is subject to extensive United States federal and Puerto Rico regulations, and this regulatory scrutiny has been significantly increasing over the last several years. The Company has established and continues to enhance procedures based on legal and regulatory requirements that are reasonably designed to ensure compliance with all applicable statutory and regulatory requirements. The Company has a corporate compliance function headed by a Compliance Director who reports to the Chief Risk Officer and is responsible for the oversight of regulatory compliance and implementation of a company-wide compliance program.

Concentration Risk

Substantially all of the Company’s business activities and a significant portion of its credit exposure are concentrated in Puerto Rico. As a consequence, the Company’s profitability and financial condition may be adversely affected by an extended economic slowdown, adverse political or economic developments in Puerto Rico or the effects of a natural disaster, all of which could result in a reduction in loan originations, an increase in non-performing assets, an increase in foreclosure losses on mortgage loans, and a reduction in the value of its loans and loan servicing portfolio.

ITEM 4.   CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon such evaluation, the CEO and the CFO have concluded that, as of the end of such period, the Company’s disclosure controls and procedures provided reasonable assurance of effectiveness in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports.

Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2014, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

128

PART - II OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

The Company and its subsidiaries are defendants in a number of legal proceedings incidental to their business. The Company is vigorously contesting such claims. Based upon a review by legal counsel and the development of these matters to date, management is of the opinion that the ultimate aggregate liability, if any, resulting from these claims will not have a material adverse effect on the Company’s financial condition or results of operations.

ITEM 1A.  RISK FACTORS

Except as set forth below, there have been no material changes to the risk factors previously disclosed in the Company’s annual report on Form 10-K for the year ended December 31, 2013. In addition to other information set forth in this report, you should carefully consider the risk factors included in the Company’s annual report on Form 10-K, as updated by this report or other filings the Company makes with the SEC under the Exchange Act. Additional risks and uncertainties not presently known to the Company at this time or that the Company currently deems immaterial may also adversely affect the Company’s business, financial condition or results of operations.

We rely on the services of third parties for our banking, information technology, telecommunications, and mortgage loan servicing infrastructure, and any failure, interruption or termination of such services or systems could have a material adverse affect on our financial condition and results of operations.

Our business relies on the secure, successful and uninterrupted functioning of our banking, information technology, telecommunications, and mortgage loan servicing infrastructure. We outsource some of our major systems, such as customer data and deposit processing, mortgage loan servicing, Internet and mobile banking, and electronic fund transfer systems. The failure or interruption of such systems, or the termination of a third-party software license or mortgage servicing, or any service agreement on which any of these systems or services is based, could interrupt our operations.  Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such systems fail or experience interruptions. 

We periodically sell or securitize our mortgage loans while retaining the obligation to perform the servicing of such loans.  Although we are the master servicer of our mortgage loan portfolios, we outsource our servicing functions pursuant to a subservicing arrangement with a third party in Puerto Rico. The termination or interruption of such subservicing arrangement, without a feasible substitute or successor, could adversely affect our financial condition and results of operations. In addition, because the FDIC has the right to refuse or delay payment for loan and lease losses if the shared-loss agreements are not performed by us in accordance with their terms, any such termination or interruption of the subservicing of the covered loans that we acquired in the FDIC-assisted acquisition could adversely affect our ability to comply with such terms.

If sustained or repeated, a failure, denial or termination of such systems or services could result in a deterioration of our ability to process new loans, service existing loans, gather deposits and/or provide customer service.  It could also compromise our ability to operate effectively, damage our reputation, result in a loss of customer business and/or subject us to additional regulatory scrutiny and possible financial liability. Any of the foregoing could have a material adverse effect on our financial condition and results of operations.

129

A credit default or ratings downgrade on the Puerto Rico government’s debt obligations could adversely affect the value of our loans to the government of Puerto Rico and our investment portfolio of Puerto Rico government bonds.

Even though the economy of Puerto Rico is closely related to the economy of the rest of the United States, prevailing economic conditions, the fiscal situation of the Puerto Rico government and legislation it has recently enacted have led Standard & Poor’s, Moody’s and Fitch to further downgrade all obligations of the Puerto Rico government to levels below investment grade.

In the third quarter of 2014, the government enacted the Puerto Rico Public Corporation Debt Enforcement and Recovery Act (the “Recovery Act”), which establishes procedures for the adjustment of certain public corporations’ debts.  The Recovery Act states in its preamble that it further promotes the central government’s public policy objectives of no longer providing financial support to public corporations and promoting their economic independence.  The Recovery Act, which is without precedent and is being challenged in federal court on constitutional grounds, has increased the level of uncertainty as to the rights of the affected public corporation’s creditors.

Despite the Commonwealth’s progress in addressing its persistent budget deficits and underfunded government retirement plans, Puerto Rico continues to face significant economic and fiscal challenges, including a protracted economic recession, sizable debt-service obligations, high unemployment and a shrinking population. The recent Commonwealth credit downgrades by three leading rating agencies reflect only the views of such agencies, an explanation of which may be obtained from each such rating agency. Generally, below-investment-grade securities present greater risks and can be less liquid than investment-grade securities.

The reduction in the credit ratings of Puerto Rico government debt obligations could severely weaken the demand for such securities and the Commonwealth’s access to capital markets, which may affect its ability to obtain the financing that it needs. This may in turn increase the Commonwealth’s risk of default.

It is uncertain how capital markets may react to any future ratings downgrade in Puerto Rico government debt obligations. However, a further deterioration of economic or fiscal conditions in Puerto Rico, with possible negative ratings implications, could adversely affect the value of our loans to the government of Puerto Rico and the value of our investment portfolio of Puerto Rico government bonds.

At September 30, 2014, we had approximately $647.9 million of credit facilities granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities, of which $626.8 million was outstanding as of such date. A substantial portion of our credit exposure to the government of Puerto Rico consists of collateralized loans or obligations that have a specific source of income or revenues identified for its repayment. Some of these obligations consist of senior and subordinated loans to public corporations that obtain revenues from rates charged for services or products, such as the Puerto Rico Electric Power Authority (“PREPA”) and the Puerto Rico Aqueducts and Sewer Authority. Public corporations have varying degrees of independence from the central government and many have received appropriations or are due other payments from it. At September 30, 2014, we had approximately $382.1 million of credit facilities granted to public corporations, and significantly all such debtors are authorized to seek relief under the Recovery Act. The Company’s banking subsidiary is part of a four bank syndicate providing a $550 million dollar revolving line of credit to finance the purchase of fuel for the day to day power generation activities of PREPA. The Bank’s participation in the line of credit has an unpaid principal balance of $200.0 million as of September 30, 2014. The Company, as part of the bank syndicate, agreed during the quarter to extend its credit facilities with PREPA to March 31, 2015. In connection with such extension, PREPA appointed a Chief Restructuring Officer to work alongside the Executive Director to develop, organize and manage a financial and operational restructuring of PREPA subject to the approval of PREPA’s Board.  PREPA also committed to delivering a comprehensive business plan by December 15, 2014 and a full debt restructuring plan by March 2, 2015.  After the extension, the Company classified the credit as substandard and a troubled-debt restructuring. The Company conducted an impairment analysis considering the probability of collection of principal and interest and concluded that the loan should be maintained in accrual status requiring no impairment.

We also have loans to various municipalities for which the good faith, credit and unlimited taxing power of the applicable municipality has been pledged to their repayment. These municipalities are required by law to levy special property taxes in such amounts as required for the payment of all of its general obligation bonds and notes. Another portion of these loans consists of special obligations of various municipalities that are payable from the basic real and personal property taxes collected within such municipalities. The good faith and credit obligations of the municipalities have a first lien on the basic property taxes.

130

Furthermore, as of September 30, 2014, we had approximately $20.9 million in obligations issued and guaranteed by the Puerto Rico government, including certain instrumentalities or public corporations, as part of our investment securities portfolio. We continue to closely monitor the economic and fiscal situation of Puerto Rico and evaluate the portfolio for any declines in value that management may consider being other-than-temporary.

Approximately 48% of our Puerto Rico government loans and obligations mature in the next 12 months or less. At September 30, 2014, we also had deposits of approximately $359.2 million from the government of Puerto Rico.

If the Company’s public corporation debtors seek relief under the Recovery Act or are otherwise unable to pay their obligations as they become due, or under certain other circumstances, the Company and its banking subsidiary may be required to adversely classify such loans and provision for losses in connection therewith. Such provision may significantly impact the Company’s financial condition and its regulatory capital ratios.

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITES AND USE OF PROCEEDS

On June 29, 2011, the Company announced the approval by the Board of Directors of a stock repurchase program to purchase an additional $70 million of the Company’s common stock in the open market.

Any shares of common stock repurchased are held by the Company as treasury shares. The Company records treasury stock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. During the quarter ended September 30, 2014, the Company purchased 100 additional shares under this program for a total of $2 thousand, at an average price of $15.50 per share.

The following table presents the shares repurchased for each month during the quarter ended September 30, 2014, excluding the month ended July 31, 2014 and September 30, 2014, during which no shares were purchased as part of the stock repurchase program: 

				Total number of		Maximum approximate
				shares purchased		dollar value of shares
	Total number of	Average price paid		as part of publicly		that may yet be purchased
Period	shares purchased	per share		announced programs		under the programs
						(In thousands)
August 1-31, 2014	100	$	15.50	100	$	23,196
Quarter ended September 30, 2014	100	$	15.50	100	$	23,196

The number of shares that may yet be purchased under the current $70 million program is estimated at 1,548,481 and was calculated by dividing the remaining balance of $23.2 million by $14.98 (closing price of the Company’s common stock at September 30, 2014). The Company did not purchase any shares of its common stock other than through its publicly announced stock repurchase program during the quarter ended September 30, 2014. 

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.     MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.     OTHER INFORMATION

None.

ITEM 6.     EXHIBITS 

131

Exhibit No.Description of Document:

 31.1   Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101     The following materials from OFG Bancorp’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Consolidated Statements of Financial Condition, (ii) Unaudited Consolidated Statements of Operations, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited Consolidated Statements of Changes in Stockholders’ Equity, (v) Unaudited Consolidated Statements of Cash Flows, and (vi) Notes to Unaudited Consolidated Financial Statements.

132

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

OFG Bancorp

(Registrant)

By:	/s/ José Rafael Fernández	Date: November 7, 2014
	José Rafael Fernández
	President and Chief Executive Officer
By:	/s/ Ganesh Kumar	Date: November 7, 2014
	Ganesh Kumar
	Executive Vice President and Chief Financial Officer
By:	/s/ Maritza Arizmendi	Date: November 7, 2014
	Maritza Arizmendi
	Senior Vice President and Chief Accounting Officer

133

EX-31.1

 

EXHIBIT 31.1

MANAGEMENT CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, José Rafael Fernández, President and Chief Executive Officer of OFG Bancorp, certify that:

1.      I have reviewed this quarterly report on Form 10-Q of OFG Bancorp;

2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f ) and 15d-15(f )) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U. S. generally accepted accounting principles;

c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2014

By:        /s/ José Rafael Fernández

José Rafael Fernández

President and Chief Executive Officer

EX-31.2

 

EXHIBIT 31.2

MANAGEMENT CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ganesh Kumar, Executive Vice President and Chief Financial Officer of OFG Bancorp, certify that:

1 .      I have reviewed this quarterly report on Form 10-Q of OFG Bancorp;

2 .      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3 .      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.       The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f ) and 15d-15(f )) for the registrant and have:

a)       Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles;

c)        Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and

5.       The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)       Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2014

By:         /s/ Ganesh Kumar

                Ganesh Kumar

Executive Vice President and Chief Financial Officer

EX-32.1

 

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. §1350)

In connection with OFG Bancorp’s quarterly report on Form 10-Q for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, José Rafael Fernández, President and Chief Executive Officer of OFG Bancorp, hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §1350), that:

(1)      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of OFG Bancorp.

In witness whereof, I execute this certification in San Juan, Puerto Rico, this 7th day of November, 2014.

                                                                                                                                By:         /s/ José Rafael Fernández

                                                                                                                                                José Rafael Fernández

                                                                                                                                                President and Chief Executive Officer

EX-32.2

 

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. §1350)

In connection with OFG Bancorp’s quarterly report on Form 10-Q for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ganesh Kumar, Executive Vice President and Chief Financial Officer of OFG Bancorp, hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §1350), that:

(1)      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of OFG Bancorp.

In witness whereof, I execute this certification in San Juan, Puerto Rico, this 7th day of November, 2014.

By:         /s/ Ganesh Kumar

                Ganesh Kumar

Executive Vice President and Chief Financial Officer

XML

Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

The activity and balance of these loans for the quarters and nine-month periods endedSeptember 30, 2014and 2013were as follows:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Balance at the beginning of year	$	24,151	$	8,031	$	18,963	$	6,055
New loans		319		14,264		14,166		18,498
Repayments and sales		1,174		(3,289)		(7,485)		(5,315)
Credits of persons no longer considered related parties		-		-		-		(232)
Balance at the end of year	$	25,644	$	19,006	$	25,644	$	19,006

XML

Fair Value (Qualitative information for assets and liabilities) (Details) (Fair Value, Inputs, Level 3 [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2014
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value assets and liabilities measured on reccurring basis	$ 5,762
Derivative asset (S&P Purchased Options) [Member] | Option Pricing Model Technique [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Valuation Technique	Option pricing model
Unobservable Input	Implied option volatility Counterparty credit risk (based on 5-year credit default swap ("CDS") spread)
Derivative asset (S&P Purchased Options) [Member] | Option Pricing Model Technique [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Implied option volatility	25.75%
Counterparty credit risk (based on 5-year CDS spread)	66.90%
Derivative asset (S&P Purchased Options) [Member] | Option Pricing Model Technique [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Implied option volatility	36.88%
Counterparty credit risk (based on 5-year CDS spread)	69.11%
Servicing Assets [Member] | Cash Flow Valuation Technique [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value assets and liabilities measured on reccurring basis	13,986
Valuation Technique	Cash flow valuation
Unobservable Input	Constant prepayment rate Discount rate
Servicing Assets [Member] | Cash Flow Valuation Technique [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Constant prepayment rate	5.60%
Discount rate	10.00%
Servicing Assets [Member] | Cash Flow Valuation Technique [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Constant prepayment rate	13.28%
Discount rate	12.00%
Derivative liability (S&P Embedded Options) [Member] | Option Pricing Model Technique [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value assets and liabilities measured on reccurring basis	(5,588)
Valuation Technique	Option pricing model
Unobservable Input	Implied option volatility Counterparty credit risk (based on 5-year CDS spread)
Derivative liability (S&P Embedded Options) [Member] | Option Pricing Model Technique [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Implied option volatility	25.75%
Counterparty credit risk (based on 5-year CDS spread)	66.90%
Derivative liability (S&P Embedded Options) [Member] | Option Pricing Model Technique [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Implied option volatility	36.88%
Counterparty credit risk (based on 5-year CDS spread)	69.11%
Collateral dependant impaired loan | Fair value of property or collateral [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value assets and liabilities measured on reccurring basis	26,809
Valuation Technique	Fair value of property or collateral
Unobservable Input	Appraised value less disposition costs
Collateral dependant impaired loan | Fair value of property or collateral [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	20.20%
Collateral dependant impaired loan | Fair value of property or collateral [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	29.20%
Puerto Rico Electric Power Authority loan | Cash Flow Valuation Technique [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value assets and liabilities measured on reccurring basis	199,982
Puerto Rico Electric Power Authority loan | Fair value of property or collateral [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Valuation Technique	Cash flow valuation
Unobservable Input	Discount rate
Puerto Rico Electric Power Authority loan | Fair value of property or collateral [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	7.25%
Puerto Rico Electric Power Authority loan | Fair value of property or collateral [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	7.25%
Foreclosed real estate [Member] | Fair value of property or collateral [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value assets and liabilities measured on reccurring basis	100,564
Valuation Technique	Fair value of property or collateral
Unobservable Input	Appraised value less disposition costs
Foreclosed real estate [Member] | Fair value of property or collateral [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	20.20%
Foreclosed real estate [Member] | Fair value of property or collateral [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	29.20%
Other repossessed assets [Member] | Fair value of property or collateral [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value assets and liabilities measured on reccurring basis	$ 21,733
Valuation Technique	Fair value of property or collateral
Unobservable Input	Appraised value less disposition costs
Other repossessed assets [Member] | Fair value of property or collateral [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	20.20%
Other repossessed assets [Member] | Fair value of property or collateral [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	29.20%

XML

Loans Receivable (Composition of loan portfolio) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	$ 4,589,736		$ 4,669,192
Deferred loan cost (fees), net	3,575		1,035
Loans Receivable Net Of Deferred Income	4,593,311		4,670,227
Allowance for loan and lease losses on non-covered loans	(64,859)		(54,298)
Loans not covered under shared-loss agreements with the FDIC, net of allowance for loan and lease losses, excluding loans held-for-sale.	4,528,452		4,615,929
Mortgage loans held-for-sale	16,757		46,529
Loans not covered under shared-loss agreements with the FDIC, net of allowance for loan and lease losses, including loans held-for-sale.	4,545,209		4,662,458
Loans And Leases Receivable Net Reported Amount Covered [Abstract]
Loans And Leases Receivable Gross Carrying Amount Covered	373,920		409,690
Allowance for Covered Loan and Lease Losses, net	(62,227)	(59,515)	(52,729)	(56,555)	(53,992)	(54,124)
Loans covered under shared-loss agreements with the FDIC, net of allowance for loan and lease losses	311,693		356,961
Loans And Leases Receivable Net Reported Amount Covered And Not Covered	4,856,902		5,019,419
Non Covered Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Allowance for loan and lease losses on non-covered loans	(64,859)		(54,298)
Originated Loans [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	2,727,115		2,401,540
Allowance for loan and lease losses on non-covered loans	(50,279)		(49,081)
Originated Loans [Member] | Mortgages [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	791,106		766,265
Originated Loans [Member] | Commercial Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	1,217,235		1,127,657
Originated Loans [Member] | Consumer Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	175,882		127,744
Originated Loans [Member] | Auto and Leasing loans receivable
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	542,892		379,874
Non-covered acquired loans accounted for under ASC 310-20
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	285,076		435,439
Allowance for loan and lease losses on non-covered loans	(4,460)		(2,354)
Non-covered acquired loans accounted for under ASC 310-20 | Commercial Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	26,984		77,681
Non-covered acquired loans accounted for under ASC 310-20 | Consumer Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	47,284		56,174
Non-covered acquired loans accounted for under ASC 310-20 | Auto
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	210,808		301,584
Non-covered loans accounted under ASC 310-30
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	1,577,545		1,832,213
Allowance for loan and lease losses on non-covered loans	(10,120)		(2,863)
Non-covered loans accounted under ASC 310-30 | Mortgages [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	670,188		717,904
Non-covered loans accounted under ASC 310-30 | Commercial Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	485,444		545,117
Non-covered loans accounted under ASC 310-30 | Consumer Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	36,470		63,620
Non-covered loans accounted under ASC 310-30 | Auto
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	276,749		379,145
Non-covered loans accounted under ASC 310-30 | Construction
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	108,694		126,427
Acquired Loans In An F D I C Assisted Transaction [Member]
Loans And Leases Receivable Net Reported Amount Covered [Abstract]
Loans And Leases Receivable Gross Carrying Amount Covered	373,920		409,690
Allowance for Covered Loan and Lease Losses, net	(62,227)		(52,729)
Acquired Loans In An F D I C Assisted Transaction [Member] | Consumer Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered [Abstract]
Loans And Leases Receivable Gross Carrying Amount Covered	4,905		6,119
Acquired Loans In An F D I C Assisted Transaction [Member] | Loans Secured by 1-4 properties
Loans And Leases Receivable Net Reported Amount Covered [Abstract]
Loans And Leases Receivable Gross Carrying Amount Covered	121,658		121,748
Allowance for Covered Loan and Lease Losses, net	(15,252)		(12,495)
Acquired Loans In An F D I C Assisted Transaction [Member] | Construction and development secured by multi-family properties [Member]
Loans And Leases Receivable Net Reported Amount Covered [Abstract]
Loans And Leases Receivable Gross Carrying Amount Covered	18,947		17,304
Acquired Loans In An F D I C Assisted Transaction [Member] | Commercial and Other Construction [Member]
Loans And Leases Receivable Net Reported Amount Covered [Abstract]
Loans And Leases Receivable Gross Carrying Amount Covered	228,410		264,249
Allowance for Covered Loan and Lease Losses, net	(46,586)		(39,619)
Acquired Loans In An F D I C Assisted Transaction [Member] | Lease Agreements [Member]
Loans And Leases Receivable Net Reported Amount Covered [Abstract]
Loans And Leases Receivable Gross Carrying Amount Covered	$ 0		$ 270

XML

Investment Securities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Fair value of securities held as collateral		$ 64.6
Puerto Rico Government obligation with mandatory tender offer repaid by user		98.7
Investments Guaranteed by US Treasury and Sponsored Agencies in Unrealized Loss on Position	479.0
Investments Guaranteed by Puerto Rico Government and its Political Subdivisions in Unrealized Loss On Position	$ 20.9
Investments Guaranteed By Us Treasury And Sponsored Agencies in Unrealized Loss Position Percentage To Total Investment in Unrealized Loss Position	96.00%
Investments Guaranteed By Puerto Rico Government and Its Political Subdivisions in Unrealized Loss Position Percentage To Total Investment in Unrealized Loss Position	4.00%
Minimum Government Bond Probability of Default	2.509%
Maximum GovernmentBond Probability Of Default	15.34%
Minimum Government Bond Recovery Rate	84.66%
Maximum Government Bond Recovery Rate	97.491%

XML

Allowance for Loan and Lease Losses (Gross Loan and Allowance for loan and lease losses) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 4,589,736		$ 4,669,192
Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	0		0
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	4,460		2,354
Financing Receivable, Allowance for Credit Losses	4,460	3,444	2,354	2,041	924	0
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	285,076		435,439
Loans and Leases Receivable, Gross, Carrying Amount	285,076		435,439
Most recent acquired loans accounted under ASC 310-30
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses	10,120	6,278	2,863
Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	9,040		10,139
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	41,239		38,942
Financing Receivable, Allowance for Credit Losses	50,279	50,638	49,081	47,573	45,701	39,921
Financing Receivable, Individually Evaluated for Impairment	318,275		112,639
Financing Receivable, Collectively Evaluated for Impairment	2,408,840		2,288,901
Loans and Leases Receivable, Gross, Carrying Amount	2,727,115		2,401,540
Residential Portfolio Segment | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses				680
Residential Portfolio Segment | Most recent acquired loans accounted under ASC 310-30
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses	0	0	0
Residential Portfolio Segment | Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	7,932		8,708
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	10,940		11,229
Financing Receivable, Allowance for Credit Losses	18,872	19,062	19,937	20,991	21,375	21,092
Financing Receivable, Individually Evaluated for Impairment	91,692		84,494
Financing Receivable, Collectively Evaluated for Impairment	699,414		681,771
Loans and Leases Receivable, Gross, Carrying Amount	791,106		766,265
Commercial Portfolio Segment | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	0		0
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	270		926
Financing Receivable, Allowance for Credit Losses	270	464	926	1,361	924	0
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	26,984		77,681
Loans and Leases Receivable, Gross, Carrying Amount	26,984		77,681
Commercial Portfolio Segment | Most recent acquired loans accounted under ASC 310-30
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses	10,115	6,216	1,713
Commercial Portfolio Segment | Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	1,108		1,431
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	8,004		13,466
Financing Receivable, Allowance for Credit Losses	9,112	12,423	14,897	14,715	17,624	17,072
Financing Receivable, Individually Evaluated for Impairment	226,583		28,145
Financing Receivable, Collectively Evaluated for Impairment	990,652		1,099,512
Loans and Leases Receivable, Gross, Carrying Amount	1,217,235		1,127,657
Consumer Portfolio Segment | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	0		0
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	1,031		0
Financing Receivable, Allowance for Credit Losses	1,031	338	0	0	0	0
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	47,284		56,174
Loans and Leases Receivable, Gross, Carrying Amount	47,284		56,174
Consumer Portfolio Segment | Most recent acquired loans accounted under ASC 310-30
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses	5	62	418
Consumer Portfolio Segment | Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	0		0
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	8,709		6,006
Financing Receivable, Allowance for Credit Losses	8,709	7,887	6,006	4,828	2,341	856
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	175,882		127,744
Loans and Leases Receivable, Gross, Carrying Amount	175,882		127,744
Auotomobile Loans Portfolio Segment | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	0		0
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	3,159		1,428
Financing Receivable, Allowance for Credit Losses	3,159		1,428
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	210,808		301,584
Loans and Leases Receivable, Gross, Carrying Amount	210,808		301,584
Auto and Leasing loans receivable
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses	13,404
Auto and Leasing loans receivable | Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	0		0
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	13,404		7,866
Financing Receivable, Allowance for Credit Losses	13,404	11,127	7,866	6,118	3,641	533
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	542,892		379,874
Loans and Leases Receivable, Gross, Carrying Amount	542,892		379,874
Unallocated Financing Receivables | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	0		0
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	0		0
Financing Receivable, Allowance for Credit Losses	0	0	0	0	0	0
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	0		0
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Unallocated Financing Receivables | Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	0		0
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	182		375
Financing Receivable, Allowance for Credit Losses	182	139	375	921	720	368
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	0		0
Loans and Leases Receivable, Gross, Carrying Amount	$ 0		$ 0

XML

Loans Receivable (Aging of recorded investment in gross loans) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 4,589,736	$ 4,669,192
Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing		0
Originated Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	96,819	87,623
60 - 89 Days Past Due	44,972	31,619
90+ Days Past Due	111,076	95,052
Total Past Due	252,867	214,294
Current	2,474,248	2,187,246
Total Loans	2,727,115	2,401,540
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	6,685	2,875
Originated Loans [Member] | Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	49,646	52,364
60 - 89 Days Past Due	26,590	19,664
90+ Days Past Due	92,386	74,156
Total Past Due	168,622	146,184
Current	622,484	620,081
Total Loans	791,106	766,265
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	6,685	2,875
Originated Loans [Member] | Traditional loan
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	38,540	39,388
60 - 89 Days Past Due	18,449	12,942
90+ Days Past Due	34,547	23,595
Total Past Due	91,536	75,925
Current	531,413	526,263
Total Loans	622,949	602,188
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	912	690
Originated Loans [Member] | Originated Up To The Year 2002 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	5,996	6,697
60 - 89 Days Past Due	3,283	1,635
90+ Days Past Due	3,424	3,408
Total Past Due	12,703	11,740
Current	55,635	64,772
Total Loans	68,338	76,512
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	141	79
Originated Loans [Member] | Originated In The Years 2003 And 2004 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	6,679	4,722
60 - 89 Days Past Due	1,730	2,163
90+ Days Past Due	3,471	1,845
Total Past Due	11,880	8,730
Current	50,464	56,387
Total Loans	62,344	65,117
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Originated In The Year 2005 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	7,368	8,527
60 - 89 Days Past Due	3,295	2,119
90+ Days Past Due	8,258	4,808
Total Past Due	18,921	15,454
Current	69,510	74,087
Total Loans	88,431	89,541
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	89	0
Originated Loans [Member] | Originated In The Year 2006 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	10,274	12,055
60 - 89 Days Past Due	5,678	4,312
90+ Days Past Due	6,041	4,418
Total Past Due	21,993	20,785
Current	91,218	99,537
Total Loans	113,211	120,322
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	114	0
Originated Loans [Member] | Originated In The Years 2007 2008 And 2009 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	3,285	3,464
60 - 89 Days Past Due	3,095	1,104
90+ Days Past Due	7,647	4,663
Total Past Due	14,027	9,231
Current	83,036	91,919
Total Loans	97,063	101,150
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	59	152
Originated Loans [Member] | Originated In The Years 2010 2011 2012 2013 And 2014 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	4,938	3,923
60 - 89 Days Past Due	1,368	1,609
90+ Days Past Due	5,706	4,453
Total Past Due	12,012	9,985
Current	181,550	139,561
Total Loans	193,562	149,546
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	509	459
Originated Loans [Member] | NonTraditional Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	1,084	3,217
60 - 89 Days Past Due	783	1,162
90+ Days Past Due	3,022	2,311
Total Past Due	4,889	6,690
Current	32,886	35,412
Total Loans	37,775	42,102
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Loss Mitigation Program [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	10,022	9,759
60 - 89 Days Past Due	7,358	5,560
90+ Days Past Due	14,625	13,191
Total Past Due	32,005	28,510
Current	57,578	57,808
Total Loans	89,583	86,318
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	5,773	2,185
Originated Loans [Member] | Home equity secured personal loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
90+ Days Past Due	126	138
Total Past Due	126	138
Current	607	598
Total Loans	733	736
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | GNMA's Buy Back Option related
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
90+ Days Past Due	40,066	34,921
Total Past Due	40,066	34,921
Current	0	0
Total Loans	40,066	34,921
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Commercial Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,217,235	1,127,657
Originated Loans [Member] | Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	1,164	5,609
60 - 89 Days Past Due	1,200	1,015
90+ Days Past Due	7,896	13,484
Total Past Due	10,260	20,108
Current	460,618	380,453
Total Loans	470,878	400,561
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0
Originated Loans [Member] | Corporate Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
90+ Days Past Due	0	0
Total Past Due	0	0
Current	113,976	54,796
Total Loans	113,976	54,796
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Institutional Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
90+ Days Past Due	0	0
Total Past Due	0	0
Current	37,177	4,050
Total Loans	37,177	4,050
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Middle Market Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	1,356
60 - 89 Days Past Due	1,071	0
90+ Days Past Due	638	10,294
Total Past Due	1,709	11,650
Current	142,830	149,933
Total Loans	144,539	161,583
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Retail Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	1,164	4,253
60 - 89 Days Past Due	129	1,015
90+ Days Past Due	7,258	3,190
Total Past Due	8,551	8,458
Current	153,091	158,184
Total Loans	161,642	166,642
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Floor Plan Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
90+ Days Past Due	0	0
Total Past Due	0	0
Current	1,666	1,835
Total Loans	1,666	1,835
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Real Estate Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
90+ Days Past Due	0	0
Total Past Due	0	0
Current	11,878	11,655
Total Loans	11,878	11,655
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Other Commercial and Industrial[Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	267	2,105
60 - 89 Days Past Due	144	851
90+ Days Past Due	1,437	1,673
Total Past Due	1,848	4,629
Current	744,509	722,467
Total Loans	746,357	727,096
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Corporate Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	236
60 - 89 Days Past Due	0	0
90+ Days Past Due	0
Total Past Due	0	236
Current	60,402	32,362
Total Loans	60,402	32,598
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Institutional Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0
60 - 89 Days Past Due	0
90+ Days Past Due	0	0
Total Past Due	0	0
Current	482,277	536,445
Total Loans	482,277	536,445
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Middle Market Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	299
90+ Days Past Due	628	1,134
Total Past Due	628	1,433
Current	82,577	57,464
Total Loans	83,205	58,897
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Retail Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	267	1,830
60 - 89 Days Past Due	144	552
90+ Days Past Due	809	539
Total Past Due	1,220	2,921
Current	79,592	58,589
Total Loans	80,812	61,510
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Floor Plan Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	39
60 - 89 Days Past Due	0	0
90+ Days Past Due	0	0
Total Past Due	0	39
Current	39,661	37,607
Total Loans	39,661	37,646
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	2,205	2,014
60 - 89 Days Past Due	1,082	652
90+ Days Past Due	1,078	650
Total Past Due	4,365	3,316
Current	171,517	124,428
Total Loans	175,882	127,744
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Credit Cards [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	238	287
60 - 89 Days Past Due	189	168
90+ Days Past Due	408	232
Total Past Due	835	687
Current	17,022	14,554
Total Loans	17,857	15,241
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	20	46
60 - 89 Days Past Due	2	4
90+ Days Past Due	1	0
Total Past Due	23	50
Current	317	322
Total Loans	340	372
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Unsecured personal lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	67	33
60 - 89 Days Past Due	132	38
90+ Days Past Due	29	66
Total Past Due	228	137
Current	1,823	1,844
Total Loans	2,051	1,981
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Unsecured personal loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	1,666	1,324
60 - 89 Days Past Due	627	399
90+ Days Past Due	604	352
Total Past Due	2,897	2,075
Current	135,711	92,485
Total Loans	138,608	94,560
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Cash collateral personal loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	214	324
60 - 89 Days Past Due	132	43
90+ Days Past Due	36	0
Total Past Due	382	367
Current	16,644	15,223
Total Loans	17,026	15,590
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loans [Member] | Auto and Leasing loans receivable
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	43,537	25,531
60 - 89 Days Past Due	15,956	9,437
90+ Days Past Due	8,279	5,089
Total Past Due	67,772	40,057
Current	475,120	339,817
Total Loans	542,892	379,874
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	13,423	17,144
60 - 89 Days Past Due	5,011	6,848
90+ Days Past Due	3,933	5,413
Total Past Due	22,367	29,405
Current	262,709	406,034
Total Loans	285,076	435,439
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Commercial Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	266	2,197
60 - 89 Days Past Due	113	2,025
90+ Days Past Due	1,002	1,646
Total Past Due	1,381	5,868
Current	25,603	71,813
Total Loans	26,984	77,681
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	431
60 - 89 Days Past Due	0	331
90+ Days Past Due	443	969
Total Past Due	443	1,731
Current	8,200	16,882
Total Loans	8,643	18,613
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Corporate Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
90+ Days Past Due	0	0
Total Past Due	0	0
Current	3,746	10,166
Total Loans	3,746	10,166
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Retail Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	431
60 - 89 Days Past Due	0	331
90+ Days Past Due	342	868
Total Past Due	342	1,630
Current	482	4,140
Total Loans	824	5,770
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Floor Plan Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
90+ Days Past Due	101	101
Total Past Due	101	101
Current	3,972	2,576
Total Loans	4,073	2,677
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Other Commercial and Industrial[Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	266	1,766
60 - 89 Days Past Due	113	1,694
90+ Days Past Due	559	677
Total Past Due	938	4,137
Current	17,403	54,931
Total Loans	18,341	59,068
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Corporate Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	14
60 - 89 Days Past Due	0	83
90+ Days Past Due	0	0
Total Past Due	0	97
Current	2,915	9,696
Total Loans	2,915	9,793
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Institutional Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0
60 - 89 Days Past Due	0
90+ Days Past Due	0
Total Past Due	0
Current	0
Total Loans	0
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0
Non-covered acquired loans accounted for under ASC 310-20 | Retail Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	169	1,717
60 - 89 Days Past Due	73	1,418
90+ Days Past Due	451	659
Total Past Due	693	3,794
Current	7,328	23,544
Total Loans	8,021	27,338
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Floor Plan Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	97	35
60 - 89 Days Past Due	40	193
90+ Days Past Due	108	18
Total Past Due	245	246
Current	7,160	21,691
Total Loans	7,405	21,937
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	1,785	2,413
60 - 89 Days Past Due	761	1,207
90+ Days Past Due	1,394	2,159
Total Past Due	3,940	5,779
Current	43,344	50,395
Total Loans	47,284	56,174
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Credit Cards [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	1,625	2,217
60 - 89 Days Past Due	678	1,200
90+ Days Past Due	1,328	2,068
Total Past Due	3,631	5,485
Current	40,051	46,714
Total Loans	43,682	52,199
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Unsecured personal loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	160	196
60 - 89 Days Past Due	83	7
90+ Days Past Due	66	91
Total Past Due	309	294
Current	3,293	3,681
Total Loans	3,602	3,975
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Non-covered acquired loans accounted for under ASC 310-20 | Automobile Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	11,372	12,534
60 - 89 Days Past Due	4,137	3,616
90+ Days Past Due	1,537	1,608
Total Past Due	17,046	17,758
Current	193,762	283,826
Total Loans	210,808	301,584
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	$ 0	$ 0

XML

Derivative Activities (Interest rate swap not designated as hedging instruments and their term) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2014
Derivatives Offered to Clients [Member]
Derivative [Line Items]
Amount	$ 16,503
Derivatives Offered to Clients [Member] | Rate 5.13% [Member]
Derivative [Line Items]
Amount	4,003
Fixed rate	5.13%
Settlement Date	Jul. 03, 2006
Maturity Date	Jul. 03, 2016
Derivatives Offered to Clients [Member] | Rate 5.51% [Member]
Derivative [Line Items]
Amount	12,500
Fixed rate	5.505%
Settlement Date	Apr. 11, 2009
Maturity Date	Apr. 11, 2019
Mirror Image Derivatives [Member]
Derivative [Line Items]
Amount	16,503
Mirror Image Derivatives [Member] | Rate 5.13% [Member]
Derivative [Line Items]
Amount	4,003
Fixed rate	5.13%
Settlement Date	Jul. 03, 2006
Maturity Date	Jul. 03, 2016
Mirror Image Derivatives [Member] | Rate 5.51% [Member]
Derivative [Line Items]
Amount	$ 12,500
Fixed rate	5.505%
Settlement Date	Apr. 11, 2009
Maturity Date	Apr. 11, 2019

XML

Earnings Per Common Share (Earnings per common share) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Net income	$ 19,532	$ 19,621	$ 64,588	$ 78,352
Non-Convertible Preferred Stock Dividend (Series A,B and D)	(1,627)	(1,628)	(4,882)	(4,884)
Convertible Preferred Stock Dividend (Series C)	(1,838)	(1,837)	(5,514)	(5,512)
Income available to common shareholders	16,067	16,156	54,192	67,956
Effect of assumed conversion of convertible preferred stock	1,838	1,837	5,514	5,512
Income available to common sharesholders assuming conversion	$ 17,905	$ 17,993	$ 59,706	$ 73,468
Average common shares outstanding	45,055	45,927	45,131	45,717
Average potential common shares options	160	257	162	198
Average potential common shares convertible preferred stock	7,147	7,138	7,147	7,138
Average common shares outstanding and equivalents	52,362	53,322	52,440	53,053
Earnings per common share - basic	$ 0.36	$ 0.35	$ 1.20	$ 1.49
Earnings per common share - diluted	$ 0.34	$ 0.34	$ 1.14	$ 1.39

XML

Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Following are the results of operations and the selected financial information by operating segment for the quartersand nine-month periodsendedSeptember 30, 2014and 2013:

	Quarter Ended September 30, 2014
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	108,548	$	44	$	11,709	$	120,301	$	-	$	120,301
Interest expense		(7,892)		-		(10,538)		(18,430)		-		(18,430)
Net interest income		100,656		44		1,171		101,871		-		101,871
Provision for non-covered loan and lease losses		(16,142)		-		-		(16,142)		-		(16,142)
Provision for covered loan and lease losses		(1,115)		-		-		(1,115)		-		(1,115)
Non-interest income (loss)		(3,242)		6,208		(475)		2,491		-		2,491
Non-interest expenses		(53,669)		(4,483)		(1,423)		(59,575)		-		(59,575)
Intersegment revenue		431		-		290		721		(721)		-
Intersegment expenses		(290)		(330)		(101)		(721)		721		-
Income before income taxes	$	26,629	$	1,439	$	(538)	$	27,530	$	-	$	27,530
Total assets	$	6,494,141	$	26,800	$	2,098,341	$	8,619,282		(945,943)	$	7,673,339
	Quarter Ended September 30, 2013
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	109,311	$	95	$	11,695	$	121,101	$	-	$	121,101
Interest expense		(10,994)		-		(11,016)		(22,010)		-		(22,010)
Net interest income		98,317		95		679		99,091		-		99,091
Provision for non-covered loan and lease losses		(9,900)		-		-		(9,900)		-		(9,900)
Provision for covered loan and lease losses		(3,074)		-		-		(3,074)		-		(3,074)
Non-interest income (loss)		(3,960)		7,114		169		3,323		-		3,323
Non-interest expenses		(52,615)		(6,168)		(4,451)		(63,234)		-		(63,234)
Intersegment revenue		562		-		-		562		(562)		-
Intersegment expenses		-		(461)		(101)		(562)		562		-
Income before income taxes	$	29,330	$	580	$	(3,704)	$	26,206	$	-	$	26,206
Total assets	$	6,542,840	$	40,994	$	2,691,621	$	9,275,455	$	(895,230)	$	8,380,225

	Nine-Month Period Ended September 30, 2014
			Wealth					Total Major				Consolidated
	Banking		Management			Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	330,148	$	132		$	38,995	$	369,275	$	-	$	369,275
Interest expense		(26,235)		-			(31,693)		(57,928)		-		(57,928)
Net interest income		303,913		132			7,302		311,347		-		311,347
Provision for non-covered loan and lease losses		(39,424)		-			-		(39,424)		-		(39,424)
Provision for covered loan and lease losses, net		(4,339)		-			-		(4,339)		-		(4,339)
Non-interest income(loss)		(14,845)		20,232			2,840		8,227		-		8,227
Non-interest expenses		(156,867)		(15,629)			(8,331)		(180,827)		-		(180,827)
Intersegment revenue		1,410		-			290		1,700		(1,700)		-
Intersegment expenses		(290)		(1,089)	$		(321)		(1,700)		1,700		-
Income before income taxes	$	89,558	$	3,646			1,780	$	94,984	$	-	$	94,984
	Nine-Month Period Ended September 30, 2013
			Wealth					Total Major				Consolidated
	Banking		Management			Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	325,432	$	277		$	35,865	$	361,574	$	-	$	361,574
Interest expense		(31,490)		-			(31,084)		(62,574)		-		(62,574)
Net interest income		293,942		277			4,781		299,000		-		299,000
Provision for non-covered loan and lease losses		(55,343)		-			-		(55,343)		-		(55,343)
Provision for covered loan and lease losses, net		(4,957)		-			-		(4,957)		-		(4,957)
Non-interest income(loss)		(7,151)		22,915			4,199		19,963		-		19,963
Non-interest expenses		(168,119)		(18,945)			(11,470)		(198,534)		-		(198,534)
Intersegment revenue		1,524		-			-		1,524		(1,524)		-
Intersegment expenses		-		(1,247)			(277)		(1,524)		1,524		-
Income (loss) before income taxes	$	59,896	$	3,000		$	(2,767)	$	60,129	$	-	$	60,129

XML

FDIC Loss Share Asset and True-up Payment Obligation (Tables)

9 Months Ended

Sep. 30, 2014

Banking and Thrift [Abstract]

FDIC Indemnification Asset Roll Forward [Table Text Block]

The following table presents the activity in the FDIC indemnification assetand true-up payment obligation for the quartersand nine month periods ended September 30, 2014 and 2013:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
FDIC indemnification asset:
Balance at beginning of period	$	143,660	$	253,379	$	189,240	$	302,295
Shared-loss agreements reimbursements from the FDIC		(12,837)		(14,036)		(31,537)		(32,732)
Increase (decrease) in expected credit losses to be covered under shared-loss agreements, net		1,597		(510)		5,159		(2,525)
FDIC indemnification asset expense		(16,059)		(15,198)		(51,180)		(46,623)
Incurred expenses to be reimbursed under shared-loss agreements		4,258		1,947		8,937		5,167
Balance at end of period	$	120,619	$	225,582	$	120,619	$	225,582
True-up payment obligation:
Balance at beginning of period	$	20,231	$	16,907	$	18,510	$	15,496
Change in true-up payment obligation		875		767		2,596		2,178
Balance at end of period	$	21,106	$	17,674	$	21,106	$	17,674

Schedule Of Business Acquisitions By Acquisition Contingent Consideration Text Block

	September 30,		December 31,
	2014		2013
	(In thousands)
Carrying amount (fair value)	$	21,106	$	18,510
Undiscounted amount	$	40,638	$	40,199

XML

Accrued Interest and Other Assets (Narratives) (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013	Dec. 18, 2012
Other assets [Line Items]
Prepaid Taxes	$ 12,800,000	$ 8,600,000
Mortgage tax credits	8,706,000	8,706,000
Repossessed auto	21,000,000	12,300,000
CoreDepositsMember | Eurobank [Member]
Other assets [Line Items]
Other Intangible Assets	6,800,000	7,800,000
Customer Relationships [Member] | BBVAPR
Other assets [Line Items]
Other Intangible Assets	$ 3,500,000	$ 4,100,000	$ 5,000,000

XML

FDIC Asset and True-up Payment Obligation (FDIC Indemnification Asset Roll Forward) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
FDIC Indemnification Asset [Roll Forward]
Balance	$ 143,660	$ 253,379	$ 189,240	$ 302,295
Indemnification agreements reimbursements from the FDIC	(12,837)	(14,036)	(31,537)	(32,732)
Increase (decrease) in expected credit losses to be covered under shared-loss agreements, net	1,597	(510)	5,159	(2,525)
FDIC indemnification asset, expense	(16,059)	(15,198)	(51,180)	(46,623)
Incurred expenses to be reimbursed under shared-loss agreements	4,258	1,947	8,937	5,167
Balance	120,619	225,582	120,619	225,582
True-up payment obligation [Roll Forward]
Balance	20,231	16,907	18,510	15,496
Change in true-up payment obligation expense	875	767	2,596	2,178
Balance	$ 21,106	$ 17,674	$ 21,106	$ 17,674

XML

Borrowings (Repurchase Transaction Liability and Market Value of its Underlying Collateral) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Assets Sold Under Agreements To Repurchase Line Items
Assets Sold Under Agreements To Repurchase Repurchase Liability	$ 1,010,000	$ 1,265,000
Assets Sold Under Agreements To Repurchase Interest Rate	2.89%
Market value of underlying collateral of a repurchase agreement	1,101,222	1,342,505
FNMA and FHLMC [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	1,098,490	1,234,833
Government National Mortgage Association Certificates and Obligations (GNMA) [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	2,732	3,000
Collateralized Mortgage Obligations [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	0	94,023
US Government-sponsored Enterprises Debt Securities [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	0	10,649
Securities Sold under Agreements to Repurchase [Member]
Assets Sold Under Agreements To Repurchase Line Items
Assets Sold Under Agreements To Repurchase Interest Rate		2.41%
Securities Sold under Agreements to Repurchase [Member] | Maturity up to 30 days
Assets Sold Under Agreements To Repurchase Line Items
Assets Sold Under Agreements To Repurchase Repurchase Liability		255,000
Assets Sold Under Agreements To Repurchase Interest Rate		0.50%
Market value of underlying collateral of a repurchase agreement		272,053
Securities Sold under Agreements to Repurchase [Member] | Maturity up to 30 days | FNMA and FHLMC [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement		216,201
Securities Sold under Agreements to Repurchase [Member] | Maturity up to 30 days | Government National Mortgage Association Certificates and Obligations (GNMA) [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement		0
Securities Sold under Agreements to Repurchase [Member] | Maturity up to 30 days | Collateralized Mortgage Obligations [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement		48,923
Securities Sold under Agreements to Repurchase [Member] | Maturity up to 30 days | US Government-sponsored Enterprises Debt Securities [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement		6,929
Securities Sold under Agreements to Repurchase [Member] | Maturity 30 To 90 Days Member
Assets Sold Under Agreements To Repurchase Line Items
Assets Sold Under Agreements To Repurchase Repurchase Liability	85,000
Assets Sold Under Agreements To Repurchase Interest Rate	0.68%
Market value of underlying collateral of a repurchase agreement	97,481
Securities Sold under Agreements to Repurchase [Member] | Maturity 30 To 90 Days Member | FNMA and FHLMC [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	95,420
Securities Sold under Agreements to Repurchase [Member] | Maturity 30 To 90 Days Member | Government National Mortgage Association Certificates and Obligations (GNMA) [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	2,061
Securities Sold under Agreements to Repurchase [Member] | Maturity 30 To 90 Days Member | Collateralized Mortgage Obligations [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	0
Securities Sold under Agreements to Repurchase [Member] | Maturity 30 To 90 Days Member | US Government-sponsored Enterprises Debt Securities [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	0
Securities Sold under Agreements to Repurchase [Member] | Maturity over 90 days
Assets Sold Under Agreements To Repurchase Line Items
Assets Sold Under Agreements To Repurchase Repurchase Liability	925,000	1,010,000
Assets Sold Under Agreements To Repurchase Interest Rate	2.83%	2.89%
Market value of underlying collateral of a repurchase agreement	1,003,741	1,070,452
Securities Sold under Agreements to Repurchase [Member] | Maturity over 90 days | FNMA and FHLMC [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	1,003,070	1,018,632
Securities Sold under Agreements to Repurchase [Member] | Maturity over 90 days | Government National Mortgage Association Certificates and Obligations (GNMA) [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	671	3,000
Securities Sold under Agreements to Repurchase [Member] | Maturity over 90 days | Collateralized Mortgage Obligations [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	0	45,100
Securities Sold under Agreements to Repurchase [Member] | Maturity over 90 days | US Government-sponsored Enterprises Debt Securities [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	$ 0	$ 3,720

XML

Loans Receivable (Accretable yield and non-accretable discount activity) (Details) (Acquired under ASC 310-30 Non-Covered Loans [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Acquired under ASC 310-30 Non-Covered Loans [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	$ 444,606	$ 561,485	$ 517,553	$ 655,833
Additions accretable	0	0	0	0
Accretion Accretable	(38,340)	(48,352)	(118,323)	(150,447)
Transfer from (to) non-accretable discount	(2,136)	6,010	4,900	13,757
Balance at end of period	404,130	519,143	404,130	519,143
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	554,724	686,231	579,587	714,462
Additions non-accretable	0	0	0	0
Principal Losses	(32,873)	(44,301)	(50,700)	(64,785)
Transfer (to) from accretable yield	2,136	(6,010)	(4,900)	(13,757)
Balance at end of period	$ 523,987	$ 635,920	$ 523,987	$ 635,920

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Commitments (Future rental commitments under leases) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014
Operating Leases, Future Minimum Payments Due [Abstract]
2014	$ 2,221
2015	8,026
2016	7,435
2017	6,807
2018	5,928
Thereafter	22,239
Total	$ 52,656

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Derivative Activities (Derivative Assets and Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Derivative Assets Liabilities At Fair Value Net [Line Items]
Derivative Assets	$ 8,445	$ 20,502
Derivative Liabilities	11,414	14,937
Options tied to Standard & Poor 500 Stock Market Index [Member]
Derivative Assets Liabilities At Fair Value Net [Line Items]
Derivative Assets	5,762	16,430
Designated as Hedging Instrument [Member]
Derivative Assets Liabilities At Fair Value Net [Line Items]
Derivative Assets	0	850
Derivative Liabilities	8,717	11,757
Not Designated as Hedging Instrument [Member]
Derivative Assets Liabilities At Fair Value Net [Line Items]
Derivative Assets	2,451	2,861
Derivative Liabilities	2,451	2,861
Interest Rate Cap [Member]
Derivative Assets Liabilities At Fair Value Net [Line Items]
Derivative Assets	224	319
Derivative Liabilities	224	319
Other derivative
Derivative Assets Liabilities At Fair Value Net [Line Items]
Derivative Assets	8	42
Derivative Liabilities	$ 22	$ 0

XML

Borrowings (Narrative) (Details) (USD $)	3 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Other borrowings	$ 3,872,000	$ 3,663,000
Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Loans Receivable, Gross, Commercial, Mortgage	1,200,000,000	1,300,000,000
Additional Borrowing Capacity	653,500,000	674,200,000
Weighted average period remaining maturity of FHLB advances	9.4 months	11.3 months
Interest Payable	330,000
Unsecured Debt [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	3.00%	3.00%
Other borrowings	1,700,000	1,700,000
Index Appreciation	1,100,000	957,000
Term Notes
Debt Instrument [Line Items]
Other borrowings	1,000,000	1,000,000
Repurchase agreement
Debt Instrument [Line Items]
Interest Payable	$ 2,200,000	$ 2,600,000

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Accrued Interest and Other Assets (Other assets) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Other asset
Other prepaid expenses	$ 18,375	$ 15,439
Core deposit intangible and customer relationship intangibles	10,285	11,912
Other repossessed assets	21,733	12,583
Mortgage tax credits	8,706	8,706
Investment in Statutory Trust	1,083	1,083
Accounts receivable and other assets	37,243	48,717
Other assets	$ 97,425	$ 98,440

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Borrowings (Securities Sold Under Agreement to Repurchase by Counterparties) (Details) (Securities Sold under Agreements to Repurchase [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Borrowed fund	$ 1,010,000	$ 1,265,000
Fair Value of Underlying Collateral	1,101,222	1,409,535
Jp Morgan Chase Bank Na [Member]
Debt Instrument [Line Items]
Borrowed fund	255,000	255,000
Fair Value of Underlying Collateral	259,039	273,250
Credit Suisse Securities LLC [Member]
Debt Instrument [Line Items]
Borrowed fund	755,000	755,000
Fair Value of Underlying Collateral	842,183	864,232
Deutsche Bank [Member]
Debt Instrument [Line Items]
Borrowed fund	0	255,000
Fair Value of Underlying Collateral	$ 0	$ 272,053

XML

Derivative Activities (Interest rate swap and their term) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2014
Interest rate swap designated as cash flow hedges
Derivative [Line Items]
Amount	$ 264,641
Interest rate swap designated as cash flow hedges | Rate 2.4365% [Member]
Derivative [Line Items]
Amount	25,000
Fixed rate	2.4365%
Trade Date	May 05, 2011
Settlement Date	May 04, 2012
Maturity Date	May 04, 2016
Interest rate swap designated as cash flow hedges | Rate 2.6200% [Member]
Derivative [Line Items]
Amount	25,000
Fixed rate	2.62%
Trade Date	May 05, 2011
Settlement Date	Jul. 24, 2012
Maturity Date	Jul. 24, 2016
Interest rate swap designated as cash flow hedges | Rate 2.6350% [Member]
Derivative [Line Items]
Amount	25,000
Fixed rate	2.635%
Trade Date	May 05, 2011
Settlement Date	Jul. 30, 2012
Maturity Date	Jul. 30, 2016
Interest rate swap designated as cash flow hedges | Rate 2.6590% [Member]
Derivative [Line Items]
Amount	50,000
Fixed rate	2.659%
Trade Date	May 05, 2011
Settlement Date	Aug. 10, 2012
Maturity Date	Aug. 10, 2016
Interest rate swap designated as cash flow hedges | Rate 2.6750% [Member]
Derivative [Line Items]
Amount	100,000
Fixed rate	2.675%
Trade Date	May 05, 2011
Settlement Date	Aug. 16, 2012
Maturity Date	Aug. 16, 2016
Interest rate swap designated as cash flow hedges | Rate 2.4210% [Member]
Derivative [Line Items]
Amount	39,641
Fixed rate	2.421%
Trade Date	Jul. 03, 2013
Settlement Date	Jul. 03, 2013
Maturity Date	Aug. 01, 2023
Interest rate swaps not designated as hedges - offered to clients
Derivative [Line Items]
Amount	16,503
Interest rate swaps not designated as hedges - offered to clients
Derivative [Line Items]
Amount	$ 16,503

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Allowance for Loan and Lease Losses (Allowance for Covered Loan and Lease Losses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of the period	$ 59,515	$ 53,992	$ 52,729	$ 54,124
Provision for covered loan and lease losses, net	1,115	3,074	4,339	4,956
FDIC shared-loss portion of provision for (recapture of) covered loan and lease losses, net	1,597	(511)	5,159	(2,525)
Balance at end of the period	$ 62,227	$ 56,555	$ 62,227	$ 56,555

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies [Abstract]

Commitments

NOTE 18—COMMITMENTS AND CONTINGENCIES

Loan Commitments

In the normal course of business, the Company becomes a party to credit-related financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby and commercial letters of credit, and financial guarantees. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidatedstatements of financial condition. The contract or notional amount of those instruments reflects the extent of the Company's involvement in particular types of financial instruments.

The Company's exposure to credit losses in the event of nonperformance by the counterparty to the financial instrument for commitments to extend credit, including commitments under credit card arrangements, and commercial letters of credit is represented by the contractual notional amounts of those instruments, which do not necessarily represent the amounts potentially subject to risk. In addition, the measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are identified. The Companyuses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

Credit-related financial instruments at September 30, 2014 and December 31, 2013were as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Commitments to extend credit	$	476,523	$	520,269
Commercial letters of credit		1,193		1,096

Commitments to extend credit represent agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Company upon the extension of credit, is based on management's credit evaluation of the counterparty.

At September 30, 2014 and December 31, 2013, commitments to extend credit consisted mainly of undisbursed available amounts on commercial lines of credit, construction loans, and revolving credit card arrangements. Since many of the unused commitments are expected to expire unused or be only partially used, the total amount of these unused commitments does not necessarily represent future cash requirements. These lines of credit had a reserve of $900 thousand at both September 30, 2014 and December 31, 2013.

Commercial letters of credit are issued or confirmed to guarantee payment of customers' payables or receivables in short-term international trade transactions. Generally, drafts will be drawn when the underlying transaction is consummated as intended. However, the short-term nature of this instrument serves to mitigate the risk associated with these contracts.

The summary of instruments that are considered financial guarantees in accordance with the authoritative guidance related to guarantor's accounting and disclosure requirements for guarantees, including indirect guarantees of indebtedness of others, at September 30, 2014 and December 31, 2013, is as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Standby letters of credit and financial guarantees	$	37,145	$	38,577
Loans sold with recourse		98,433		122,291
Commitments to sell or securitize mortgage loans		34,650		80,307

Standby letters of credit and financial guarantees are written conditional commitments issued by the Company to guarantee the payment and/or performance of a customer to a third party (“beneficiary”). If the customer fails to comply with the agreement, the beneficiary may draw on the standby letter of credit or financial guarantee as a remedy. The amount of credit risk involved in issuing letters of credit in the event of nonperformance is the face amount of the letter of credit or financial guarantee. These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management's credit evaluation of the customer.

Lease Commitments

The Company has entered into various operating lease agreements for branch facilities and administrative offices. Rent expense for the quarters endedSeptember 30, 2014 and 2013amounted to $2.4millionand $2.5million,respectively, and is included in the “occupancy and equipment” caption in the unaudited consolidated statements of operations. For the nine-month periods ended September 30, 2014 and 2013, rent expense amounted to $7.3millionand $7.7million, respectively.Future rental commitments under leases in effect at September 30, 2014, exclusive of taxes, insurance, and maintenance expenses payable by the Company, are summarized as follows:

Year Ending December 31,	Minimum Rent
	(In thousands)
2014 (October 1 to December 31)	$	2,221
2015		8,026
2016		7,435
2017		6,807
2018		5,928
Thereafter		22,239
	$	52,656

Contingencies

Contingencies

The Company and its subsidiaries are defendants in a number of legal proceedings incidental to their business. In the ordinary course of business, the Company and its subsidiaries are also subject to governmental and regulatory examinations. Certain subsidiaries of the Company, including the Bank (and its subsidiary OIB), Oriental Financial Services, and Oriental Insurance, are subject to regulation by various U.S., Puerto Rico and other regulators.

The Company seeks to resolve all litigation and regulatory matters in the manner management believes is in the best interests of the Company and its shareholders, and contests allegations of liability or wrongdoing and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter.

Subject to the accounting and disclosure framework under the provisions of ASC 450, it is the opinion of the Company's management, based on current knowledge and after taking into account its current legal accruals, that the eventual outcome of all matters would not be likely to have a material adverse effect on the consolidated statements of financial condition of the Company. Nonetheless, given the substantial or indeterminate amounts sought in certain of these matters, and the inherent unpredictability of such matters, an adverse outcome in certain of these matters could, from time to time, have a material adverse effect on the Company's consolidated results of operations or cash flows in particular quarterly or annual periods. The Company has evaluated all litigation and regulatory matters where the likelihood of a potential loss is deemed reasonably possible. The Company has determined that the estimate of the reasonably possible loss is not significant.

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Investment Securities (Investment securities by contractual maturity) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 1,249,769	$ 1,575,043
Available-for-sale Securities	1,273,879	1,588,425
Held-to-maturity, Amortized cost	144,305
Held to maturity Fair Value	144,217	0
Collateralized Mortgage Backed Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	1,217,686	1,419,117
Available-for-sale Securities	1,247,161	1,439,539
Held-to-maturity, Amortized cost	144,305
Held to maturity Fair Value	144,217
Collateralized Mortgage Backed Securities [Member] | FNMA and FHLMC [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	1,023,303	1,190,910
Available-for-sale Securities	1,056,635	1,217,330
Held-to-maturity, Amortized cost	144,305
Held to maturity Fair Value	144,217
Collateralized Mortgage Backed Securities [Member] | GNMA [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	5,241	7,406
Available-for-sale Securities	5,568	7,815
Collateralized Mortgage Backed Securities [Member] | CMO's [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	189,142	220,801
Available-for-sale Securities	184,958	214,394
Collateralized Mortgage Backed Securities [Member] | Maturities Due From Five To Ten Years [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	22,896
Available-for-sale Securities	23,243
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Collateralized Mortgage Backed Securities [Member] | Maturities Due From Five To Ten Years [Member] | FNMA and FHLMC [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	22,896
Available-for-sale Securities	23,243
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Collateralized Mortgage Backed Securities [Member] | Maturities Due After Ten Years [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	1,194,790
Available-for-sale Securities	1,223,918
Held-to-maturity, Amortized cost	144,305
Held to maturity Fair Value	144,217
Collateralized Mortgage Backed Securities [Member] | Maturities Due After Ten Years [Member] | FNMA and FHLMC [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	1,000,407
Available-for-sale Securities	1,033,392
Held-to-maturity, Amortized cost	144,305
Held to maturity Fair Value	144,217
Collateralized Mortgage Backed Securities [Member] | Maturities Due After Ten Years [Member] | GNMA [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	5,241
Available-for-sale Securities	5,568
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Collateralized Mortgage Backed Securities [Member] | Maturities Due After Ten Years [Member] | CMO's [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	189,142
Available-for-sale Securities	184,958
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Investment Securities
Schedule of Investments [Line Items]
Available for sale Amortized Cost	32,083	155,926
Available-for-sale Securities	26,718	148,886
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Investment Securities | US Treasury Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	0
Available-for-sale Securities	0
Investment Securities | Obligation of US Government sponsored agencies at loss [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	7,795	10,691
Available-for-sale Securities	7,761	10,649
Investment Securities | Obligation of Puerto Rico Government and political subdivisions [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	20,915	121,035
Available-for-sale Securities	15,446	114,190
Investment Securities | Other Debt Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	3,373	24,200
Available-for-sale Securities	3,511	24,047
Investment Securities | Maturities Due From One To Five Years [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	10,450
Available-for-sale Securities	8,628
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Investment Securities | Maturities Due From One To Five Years [Member] | Obligation of Puerto Rico Government and political subdivisions [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	10,450
Available-for-sale Securities	8,628
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Investment Securities | Maturities Due From Five To Ten Years [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	7,795
Available-for-sale Securities	7,761
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Investment Securities | Maturities Due From Five To Ten Years [Member] | Obligation of US Government sponsored agencies at loss [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	7,795
Available-for-sale Securities	7,761
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Investment Securities | Maturities Due After Ten Years [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	13,838
Available-for-sale Securities	10,329
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Investment Securities | Maturities Due After Ten Years [Member] | Obligation of Puerto Rico Government and political subdivisions [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	10,465
Available-for-sale Securities	6,818
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Investment Securities | Maturities Due After Ten Years [Member] | Other Debt Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	3,373
Available-for-sale Securities	3,511
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	$ 0

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Earning Per Common Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The calculation of earnings per common share for the quartersand nine-month periods ended September 30, 2014and 2013 is asfollows:

	Quarter ended September 30 ,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands, except per share data)
Net income	$	19,532	$	19,621	$	64,588	$	78,352
Less: Dividends on preferred stock
Non-convertible preferred stock (Series A, B, and D)		(1,627)		(1,628)		(4,882)		(4,884)
Convertible preferred stock (Series C)		(1,838)		(1,837)		(5,514)		(5,512)
Income available to common shareholders	$	16,067	$	16,156	$	54,192	$	67,956
Effect of assumed conversion of the convertible ' ' preferred stock		1,838		1,837		5,514		5,512
Income available to common shareholders assuming conversion	$	17,905	$	17,993	$	59,706	$	73,468
Weighted average common shares and share equivalents:
Average common shares outstanding		45,055		45,927		45,131		45,717
Effect of dilutive securities:
Average potential common shares-options		160		257		162		198
Average potential common shares-assuming ' ' conversion of convertible preferred stock		7,147		7,138		7,147		7,138
Total weighted average common shares ' 'outstanding and equivalents		52,362		53,322		52,440		53,053
Earnings per common share - basic	$	0.36	$	0.35	$	1.20	$	1.49
Earnings per common share - diluted	$	0.34	$	0.34	$	1.14	$	1.39

XML

Derivative Activities (Narratives) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized Gain (Loss) on Interest Rate Cash Flow Hedges, Pretax, Accumulated Other Comprehensive Income (Loss)	$ 1,798,000	$ 233,000	$ 2,189,000	$ 4,711,000
Notional Amount Purchased Option	12,000,000		12,000,000		28,000,000
Embedded Derivative, Fair Value of Embedded Derivative Liability	5,600,000		5,600,000		15,700,000
Notional Amount Embedded Option	11,600,000		11,600,000		26,900,000
Interest Rate Cap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Notional Amount	110,000,000		110,000,000		94,000,000
Unrealized Gain (Loss) on Interest Rate Cash Flow Hedges, Pretax, Accumulated Other Comprehensive Income (Loss)	$ 8,700,000

XML

Stockholders' Equity (Group's and the Bank's actual capital amounts and ratios) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Capital [Abstract]
Minimum to be well capitalized - Total Capital		$ 511,893
Minimum to be well capitalized - Tier 1 capital		307,136
Minimum to be well capitalized - Tier 1 leverage		406,138
Risk Based Ratios [Abstract]
Capital Required to be Well Capitalized to Risk Weighted Assets		10.00%
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets		6.00%
Tier One Leverage Capital Required to be Well Capitalized to Average Assets		5.00%
Group [Member]
Capital [Abstract]
Actual - Total capital	858,356	827,459
Actual - Tier 1 capital	782,797	736,106
Actual - Tier 1 leverage capital	782,797	736,106
Minimum Capital - Total Capital	392,465	409,514
Minimum capital - Tier 1 capital	196,233	204,757
Minimum capital - Tier 1 leverage capital	297,984	324,910
Minimum to be well capitalized - Total Capital	490,581
Minimum to be well capitalized - Tier 1 capital	294,349
Minimum to be well capitalized - Tier 1 leverage	372,480
Risk Based Ratios [Abstract]
Capital to Risk Weighted Assets	17.50%	16.16%
Tier One Risk Based Capital to Risk Weighted Assets	15.96%	14.38%
Tier One Leverage Capital to Average Assets	10.51%	9.06%
Capital Required for Capital Adequacy to Risk Weighted Assets	8.00%	8.00%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	4.00%	4.00%
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Capital Required to be Well Capitalized to Risk Weighted Assets	10.00%
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	6.00%
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	5.00%
Bank [Member]
Capital [Abstract]
Actual - Total capital	813,760	779,413
Actual - Tier 1 capital	738,482	688,350
Actual - Tier 1 leverage capital	738,482	688,350
Minimum Capital - Total Capital	390,644	407,637
Minimum capital - Tier 1 capital	195,322	203,819
Minimum capital - Tier 1 leverage capital	295,673	322,395
Minimum to be well capitalized - Total Capital	488,305	509,547
Minimum to be well capitalized - Tier 1 capital	292,983	305,728
Minimum to be well capitalized - Tier 1 leverage	$ 369,592	$ 402,993
Risk Based Ratios [Abstract]
Capital to Risk Weighted Assets	16.66%	15.30%
Tier One Risk Based Capital to Risk Weighted Assets	15.12%	13.51%
Tier One Leverage Capital to Average Assets	9.99%	8.54%
Capital Required for Capital Adequacy to Risk Weighted Assets	8.00%	8.00%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	4.00%	4.00%
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Capital Required to be Well Capitalized to Risk Weighted Assets	10.00%	10.00%
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	6.00%	6.00%
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	5.00%	5.00%

XML

Borrowings (Tables)

9 Months Ended

Sep. 30, 2014

Debt Instruments [Abstract]

Schedule Of Repurchase Agreement Counterparty [Table Text Block]

	September 30,				December 31,
	2014				2013
			Fair Value of				Fair Value of
	Borrowing		Underlying		Borrowing		Underlying
	Balance		Collateral		Balance		Collateral
	(In thousands)
JP Morgan Chase Bank NA		255,000		259,039		255,000		273,250
Credit Suisse Securities (USA) LLC		755,000		842,183		755,000		864,232
Deutsche Bank		-		-		255,000		272,053
Total	$	1,010,000	$	1,101,222	$	1,265,000	$	1,409,535

Schedule of Repurchase Agreement by Maturity [Table text Block]

The following table shows a summary of the Company's repurchase agreements and their terms, excluding accrued interest in the amount of $2.2 million, at September 30, 2014:

			Weighted-
	Borrowing		Average		Maturity
Year of Maturity	Balance		Coupon	Settlement Date	Date
	(In thousands)
2014	$	85,000	0.675%	12/3/2012	12/3/2014
2015		255,000	0.840%	12/10/2012	6/13/2015
2016		170,000	1.500%	12/6/2012	12/8/2016
2017		500,000	4.780%	3/2/2007	3/2/2017
	$	1,010,000	2.831%

Schedule of Repurchase Agreements [Table]

At September 30, 2014and December 31, 2013, securities sold under agreements to repurchase (classified by counterparty), excluding accrued interest in the amount of $2.2millionand $2.6million, respectively,were as follows

	September 30, 2014
					Market Value of Underlying Collateral
									CMOs		Obligations
			Weighted		FNMA and				issued by US		of US
	Repurchase		Average		FHLMC		GNMA		Government		Government
	Liability		Rate		Certificates		Certificates		Sponsored Agencies		Sponsored Agencies		Total
	(Dollars in thousands)
Less than 90 days		85,000		0.68%		95,420		2,061		-		-		97,481
Over 90 days		925,000		2.83%		1,003,070		671		-		-		1,003,741
Total	$	1,010,000		2.89%	$	1,098,490	$	2,732	$	-	$	-	$	1,101,222

	December 31, 2013
					Market Value of Underlying Collateral
									CMOs		Obligations
			Weighted		FNMA and				issued by US		of US
	Repurchase		Average		FHLMC		GNMA		Government		Government
	Liability		Rate		Certificates		Certificates		Sponsored Agencies		Sponsored Agencies		Total
	(Dollars in thousands)
Within 30 days	$	255,000		0.50%	$	216,201	$	-	$	48,923	$	6,929	$	272,053
Over 90 days		1,010,000		2.89%		1,018,632		3,000		45,100		3,720		1,070,452
Total	$	1,265,000		2.41%	$	1,234,833	$	3,000	$	94,023	$	10,649	$	1,342,505

Federal Home Loan Bank Advances Maturities Summary [Table Text Block]

The following table shows a summary of these advances and their terms, excluding accrued interest in the amount of $330thousand,at September 30, 2014:

			Weighted-
		Borrowing	Average		Maturity
Year of Maturity		Balance	Coupon	Settlement Date	Date
		(In thousands)
2014	$	25,000	0.36%	9/4/2014	10/6/2014
		50,000	0.37%	9/10/2014	10/10/2014
		100,000	0.36%	9/16/2014	10/16/2014
		25,000	0.32%	9/24/2014	10/24/2014
		25,000	0.30%	9/30/2014	10/30/2014
		39,641	0.37%	9/2/2014	10/1/2014
		264,641
2017		4,558	1.24%	4/3/2012	4/3/2017
2018		30,000	2.19%	1/16/2013	1/16/2018
		25,000	2.18%	1/16/2013	1/16/2018
		55,000
2020		10,259	2.59%	7/19/2013	7/20/2020
	$	334,458	0.74%

Redemtion Funds [Table Text Block]

	Redemption fund
	(In thousands)
Redemption fund - September 30, 2014	$	53,600
2014		1,675
2015		6,700
2016		5,025
	$	67,000

XML

Investment Securities (Gains and losses by category) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Total Available for Sale Amortization cost	$ 404,309	$ 558,062
Total Available for Sale Unrealized Loss	12,996	20,714
Total Available for Sale Fair Value	391,314	537,348
12 months or more
Available for sale - Amortized cost	354,548	23,485
Available for sale - Unrealized Loss	12,782	5,718
Available-for-sale, Fair Value	341,768	17,767
Less than 12 months
Available for sale - Amortized cost		534,577
Available for sale - Unrealized Loss		14,996
Available for sale - Fair Value		519,581
Held To Maturity Securities, Continuous Unrealized Loss Position Aggregate Losses [Abstract]
Held to Maturity - Amortized Cost	95,598
Held to Maturity - Unrealized Loss	170
Held to Maturity - Fair Value	95,428
Investment Securities, Continuous Unrealized Loss Position [Abstract]
Total Securities - Amortized Cost	499,907	558,062
Total Securities - Unrealized Position	13,166	20,714
Total Securities - Fair Value	486,742	537,348
CMO's issued by us government sponsored agenciesat loss
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Total Available for Sale Amortization cost	165,703	185,220
Total Available for Sale Unrealized Loss	4,390	6,814
Total Available for Sale Fair Value	161,314	178,406
12 months or more
Available for sale - Amortized cost	149,957	2,559
Available for sale - Unrealized Loss	4,242	237
Available-for-sale, Fair Value	145,716	2,322
Less than 12 months
Available for sale - Amortized cost	15,746	182,661
Available for sale - Unrealized Loss	148	6,577
Available for sale - Fair Value	15,598	176,084
FNMA and FHLMC [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Total Available for Sale Amortization cost	209,699	220,913
Total Available for Sale Unrealized Loss	3,082	6,669
Total Available for Sale Fair Value	206,617	214,244
12 months or more
Available for sale - Amortized cost	183,479
Available for sale - Unrealized Loss	3,049
Available-for-sale, Fair Value	180,430
Less than 12 months
Available for sale - Amortized cost	26,220	220,913
Available for sale - Unrealized Loss	33	6,669
Available for sale - Fair Value	26,187	214,244
Held To Maturity Securities, Continuous Unrealized Loss Position Aggregate Losses [Abstract]
Held to Maturity - Amortized Cost	95,598
Held to Maturity - Unrealized Loss	170
Held to Maturity - Fair Value	95,428
Less than 12 months
Held to Maturity - Amortized cost	95,598
Held to Maturity - Unrealized Loss	170
Held-to-Maturity - Fair Value	95,428
Obligation of Puerto Rico Government and political subdivisions [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Total Available for Sale Amortization cost	20,915	121,035
Total Available for Sale Unrealized Loss	5,469	6,845
Total Available for Sale Fair Value	15,446	114,190
12 months or more
Available for sale - Amortized cost	20,915	20,845
Available for sale - Unrealized Loss	5,469	5,470
Available-for-sale, Fair Value	15,446	15,375
Less than 12 months
Available for sale - Amortized cost		100,190
Available for sale - Unrealized Loss		1,375
Available for sale - Fair Value		98,815
Government National Mortgage Association Certificates and Obligations (GNMA) [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Total Available for Sale Amortization cost	197	203
Total Available for Sale Unrealized Loss	22	24
Total Available for Sale Fair Value	176	179
12 months or more
Available for sale - Amortized cost	197	81
Available for sale - Unrealized Loss	22	11
Available-for-sale, Fair Value	176	70
Less than 12 months
Available for sale - Amortized cost		122
Available for sale - Unrealized Loss		13
Available for sale - Fair Value		109
Obligation of US Government sponsored agencies at loss [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Total Available for Sale Amortization cost	7,796	10,691
Total Available for Sale Unrealized Loss	34	42
Total Available for Sale Fair Value	7,761	10,649
Less than 12 months
Available for sale - Amortized cost	7,796	10,691
Available for sale - Unrealized Loss	34	42
Available for sale - Fair Value	7,761	10,649
Other Debt Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Total Available for Sale Amortization cost		20,000
Total Available for Sale Unrealized Loss		320
Total Available for Sale Fair Value		19,680
Less than 12 months
Available for sale - Amortized cost		20,000
Available for sale - Unrealized Loss		320
Available for sale - Fair Value		$ 19,680

XML

Loans Receivable (Risk category of gross non-covered loans not subject to risk rating ) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 4,589,736	$ 4,669,192
Non Covered Loan, Not Subject To Risk Ratings [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,767,972	1,631,641
0 - 29 Days Past Due	1,448,184	1,362,392
30 - 59 Days Past Due	96,942	85,475
60 - 89 Days Past Due	41,090	28,939
90-119 Days Past Due	22,127	18,766
120 - 364 Days Past Due	38,366	31,979
365+ Days Past Due	28,933	19,161
Financing Receivable, Individually Evaluated for Impairment	92,330	84,929
Originated loans, not subject to risk rating [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,509,880	1,273,883
0 - 29 Days Past Due	1,211,076	1,028,173
30 - 59 Days Past Due	83,785	70,528
60 - 89 Days Past Due	36,192	24,116
90-119 Days Past Due	20,403	16,783
120 - 364 Days Past Due	37,161	30,193
365+ Days Past Due	28,933	19,161
Financing Receivable, Individually Evaluated for Impairment	92,330	84,929
Originated loans, not subject to risk rating [Member] | Mortgages [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	791,106	766,265
0 - 29 Days Past Due	564,980	564,310
30 - 59 Days Past Due	38,123	43,034
60 - 89 Days Past Due	19,167	14,027
90-119 Days Past Due	13,986	12,943
120 - 364 Days Past Due	34,228	28,316
365+ Days Past Due	28,930	19,141
Financing Receivable, Individually Evaluated for Impairment	91,692	84,494
Originated loans, not subject to risk rating [Member] | Conventional Loan [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	622,949	602,188
0 - 29 Days Past Due	522,238	520,782
30 - 59 Days Past Due	35,374	38,441
60 - 89 Days Past Due	17,595	12,716
90-119 Days Past Due	4,274	4,649
120 - 364 Days Past Due	13,647	12,129
365+ Days Past Due	13,428	4,441
Financing Receivable, Individually Evaluated for Impairment	16,393	9,030
Originated loans, not subject to risk rating [Member] | Originated Up To The Year 2002 [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	68,338	76,512
0 - 29 Days Past Due	54,931	64,743
30 - 59 Days Past Due	5,831	6,594
60 - 89 Days Past Due	3,160	1,634
90-119 Days Past Due	537	868
120 - 364 Days Past Due	999	1,082
365+ Days Past Due	1,888	1,458
Financing Receivable, Individually Evaluated for Impairment	992	133
Originated loans, not subject to risk rating [Member] | Originated In The Years 2003 And 2004 [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	62,344	65,117
0 - 29 Days Past Due	49,747	56,283
30 - 59 Days Past Due	6,309	4,722
60 - 89 Days Past Due	1,730	1,938
90-119 Days Past Due	221	56
120 - 364 Days Past Due	1,623	1,437
365+ Days Past Due	1,489	352
Financing Receivable, Individually Evaluated for Impairment	1,225	329
Originated loans, not subject to risk rating [Member] | Originated In The Year 2005 [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	88,431	89,541
0 - 29 Days Past Due	66,895	74,016
30 - 59 Days Past Due	6,451	8,414
60 - 89 Days Past Due	3,236	2,119
90-119 Days Past Due	831	1,198
120 - 364 Days Past Due	3,768	3,037
365+ Days Past Due	3,659	573
Financing Receivable, Individually Evaluated for Impairment	3,591	184
Originated loans, not subject to risk rating [Member] | Originated In The Year 2006 [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	113,211	120,322
0 - 29 Days Past Due	90,157	99,243
30 - 59 Days Past Due	9,821	12,055
60 - 89 Days Past Due	5,471	4,312
90-119 Days Past Due	1,740	1,148
120 - 364 Days Past Due	2,479	2,755
365+ Days Past Due	1,759	515
Financing Receivable, Individually Evaluated for Impairment	1,784	294
Originated loans, not subject to risk rating [Member] | Originated In The Years 2007 2008 And 2009 [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	97,063	101,150
0 - 29 Days Past Due	79,950	91,920
30 - 59 Days Past Due	2,874	3,464
60 - 89 Days Past Due	2,774	1,104
90-119 Days Past Due	839	1,264
120 - 364 Days Past Due	3,181	2,844
365+ Days Past Due	3,352	554
Financing Receivable, Individually Evaluated for Impairment	4,093	0
Originated loans, not subject to risk rating [Member] | Originated In The Years 2010 2011 2012 2013 And 2014 [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	193,562	149,546
0 - 29 Days Past Due	180,558	134,577
30 - 59 Days Past Due	4,088	3,192
60 - 89 Days Past Due	1,224	1,609
90-119 Days Past Due	106	115
120 - 364 Days Past Due	1,597	974
365+ Days Past Due	1,281	989
Financing Receivable, Individually Evaluated for Impairment	4,708	8,090
Originated loans, not subject to risk rating [Member] | NonTraditional Mortgage [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	37,775	42,102
0 - 29 Days Past Due	32,886	35,168
30 - 59 Days Past Due	1,084	3,217
60 - 89 Days Past Due	783	1,162
90-119 Days Past Due	259	0
120 - 364 Days Past Due	1,047	1,324
365+ Days Past Due	1,667	833
Financing Receivable, Individually Evaluated for Impairment	49	398
Originated loans, not subject to risk rating [Member] | Loss Mitigation Program Loan Exclude Individually Impairment Measure [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	89,583	86,318
0 - 29 Days Past Due	9,249	7,762
30 - 59 Days Past Due	1,665	1,376
60 - 89 Days Past Due	789	149
90-119 Days Past Due	628	624
120 - 364 Days Past Due	1,022	312
365+ Days Past Due	980	1,029
Financing Receivable, Individually Evaluated for Impairment	75,250	75,066
Originated loans, not subject to risk rating [Member] | Home equity secured personal loans [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	733	736
0 - 29 Days Past Due	607	598
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
90-119 Days Past Due	0	0
120 - 364 Days Past Due	0	126
365+ Days Past Due	126	12
Financing Receivable, Individually Evaluated for Impairment	0	0
Originated loans, not subject to risk rating [Member] | GNMA's Buy Back Option related
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	40,066	34,921
0 - 29 Days Past Due	0	0
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
90-119 Days Past Due	8,825	7,670
120 - 364 Days Past Due	18,512	14,425
365+ Days Past Due	12,729	12,826
Financing Receivable, Individually Evaluated for Impairment	0	0
Originated loans, not subject to risk rating [Member] | Consumer Loan [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	175,882	127,744
0 - 29 Days Past Due	170,976	124,046
30 - 59 Days Past Due	2,125	1,962
60 - 89 Days Past Due	1,069	652
90-119 Days Past Due	755	443
120 - 364 Days Past Due	316	186
365+ Days Past Due	3	20
Financing Receivable, Individually Evaluated for Impairment	638	435
Originated loans, not subject to risk rating [Member] | Credit Cards [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	17,857	15,241
0 - 29 Days Past Due	17,022	14,555
30 - 59 Days Past Due	238	287
60 - 89 Days Past Due	189	168
90-119 Days Past Due	140	118
120 - 364 Days Past Due	268	113
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Originated loans, not subject to risk rating [Member] | Overdrafts [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	340	372
0 - 29 Days Past Due	318	322
30 - 59 Days Past Due	20	46
60 - 89 Days Past Due	2	4
90-119 Days Past Due	0	0
120 - 364 Days Past Due	0	0
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Originated loans, not subject to risk rating [Member] | Unsecured personal lines of credit [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,051	1,981
0 - 29 Days Past Due	1,823	1,844
30 - 59 Days Past Due	67	33
60 - 89 Days Past Due	132	38
90-119 Days Past Due	0	25
120 - 364 Days Past Due	26	34
365+ Days Past Due	3	7
Financing Receivable, Individually Evaluated for Impairment	0	0
Originated loans, not subject to risk rating [Member] | Unsecured personal loans [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	138,608	94,560
0 - 29 Days Past Due	135,169	92,102
30 - 59 Days Past Due	1,586	1,272
60 - 89 Days Past Due	614	399
90-119 Days Past Due	579	300
120 - 364 Days Past Due	22	39
365+ Days Past Due	0	13
Financing Receivable, Individually Evaluated for Impairment	638	435
Originated loans, not subject to risk rating [Member] | Cash collateral personal loans [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	17,026	15,590
0 - 29 Days Past Due	16,644	15,223
30 - 59 Days Past Due	214	324
60 - 89 Days Past Due	132	43
90-119 Days Past Due	36	0
120 - 364 Days Past Due	0	0
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Originated loans, not subject to risk rating [Member] | Auto and Leasing loans receivable
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	542,892	379,874
0 - 29 Days Past Due	475,120	339,817
30 - 59 Days Past Due	43,537	25,532
60 - 89 Days Past Due	15,956	9,437
90-119 Days Past Due	5,662	3,397
120 - 364 Days Past Due	2,617	1,691
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Accounted For Under ASC 310-20, not subject to risk rating [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	258,092	357,758
0 - 29 Days Past Due	237,108	334,219
30 - 59 Days Past Due	13,157	14,947
60 - 89 Days Past Due	4,898	4,823
90-119 Days Past Due	1,724	1,983
120 - 364 Days Past Due	1,205	1,786
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Accounted For Under ASC 310-20, not subject to risk rating [Member] | Consumer Loan [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	47,284	56,174
0 - 29 Days Past Due	43,346	50,394
30 - 59 Days Past Due	1,785	2,413
60 - 89 Days Past Due	761	1,207
90-119 Days Past Due	515	888
120 - 364 Days Past Due	877	1,272
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Accounted For Under ASC 310-20, not subject to risk rating [Member] | Credit Cards [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	43,682	52,199
0 - 29 Days Past Due	40,053	46,713
30 - 59 Days Past Due	1,625	2,217
60 - 89 Days Past Due	678	1,200
90-119 Days Past Due	483	828
120 - 364 Days Past Due	843	1,241
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Accounted For Under ASC 310-20, not subject to risk rating [Member] | Unsecured personal loans [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,602	3,975
0 - 29 Days Past Due	3,293	3,681
30 - 59 Days Past Due	160	196
60 - 89 Days Past Due	83	7
90-119 Days Past Due	32	60
120 - 364 Days Past Due	34	31
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Accounted For Under ASC 310-20, not subject to risk rating [Member] | Automobile Loan [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	210,808	301,584
0 - 29 Days Past Due	193,762	283,825
30 - 59 Days Past Due	11,372	12,534
60 - 89 Days Past Due	4,137	3,616
90-119 Days Past Due	1,209	1,095
120 - 364 Days Past Due	328	514
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	$ 0	$ 0

XML

Fair Value (Reconciliation of assets and liabilities using significant unobservable inputs (Level 3)) (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance	$ 14,182	$ 33,757	$ 34,175	$ 31,333
Gains (losses) included in earnings	(143)	(73)	(1,029)	(99)
Changes in fair value of investment securities available for sale included in other comprehensive income	0	(552)	320	(506)
New instruments acquired	554	704	1,608	2,659
Principal repayments	(427)	(309)	(20,799)	(855)
Amortization	105	110	509	315
Changes in fair value of servicing assets	(111)	262	(624)	1,052
Balance	14,160	33,899	14,160	33,899
Other Debt Obligations [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance	0	20,058	19,680	20,012
Gains (losses) included in earnings	0	0	0	0
Changes in fair value of investment securities available for sale included in other comprehensive income	0	(552)	320	(506)
New instruments acquired	0		0	0
Principal repayments	0	0	(20,000)	0
Amortization	0	0	0	0
Changes in fair value of servicing assets	0	0	0	0
Balance	0	19,506	0	19,506
Derivative Financial Instruments, Assets [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance	6,580	16,020	16,430	13,233
Gains (losses) included in earnings	(818)	1,921	(10,668)	4,708
Changes in fair value of investment securities available for sale included in other comprehensive income	0	0	0	0
New instruments acquired	0	0	0	0
Principal repayments	0	0	0	0
Amortization	0	0	0	0
Changes in fair value of servicing assets	0	0	0	0
Balance	5,762	17,941	5,762	17,941
Servicing Assets [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance	13,970	12,994	13,801	10,795
Gains (losses) included in earnings	0	0	0	0
Changes in fair value of investment securities available for sale included in other comprehensive income	0	0	0	0
New instruments acquired	554	704	1,608	2,659
Principal repayments	(427)	(309)	(799)	(855)
Amortization	0	0	0	0
Changes in fair value of servicing assets	(111)	262	(624)	1,052
Balance	13,986	13,651	13,986	13,651
Derivative Financial Instruments, Liabilities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance	(6,368)	(15,315)	(15,736)	(12,707)
Gains (losses) included in earnings	675	(1,994)	9,639	(4,807)
Changes in fair value of investment securities available for sale included in other comprehensive income	0	0	0	0
New instruments acquired	0	0	0	0
Principal repayments	0	0	0	0
Amortization	105	110	509	315
Changes in fair value of servicing assets	0	0	0	0
Balance	$ (5,588)	$ (17,199)	$ (5,588)	$ (17,199)

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Loans Receivable (Recorded Investment in loans individually evaluated for impairment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Financing Receivable, Impaired [Line Items]
Allowance for loan and lease losses, non covered	$ 64,859	$ 54,298
Non-covered originated loans [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	331,554	124,053
Recorded Investment	318,275	112,639
Allowance for loan and lease losses, non covered	9,040	10,139
Coverage	3.00%	9.00%
Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Impaired [Line Items]
Unpaid Principal	208	208
Recorded Investment	208	208
Allowance for loan and lease losses, non covered	0	0
Coverage	0.00%	0.00%
Non-covered acquired loans accounted under ASC 310-30
Financing Receivable, Impaired [Line Items]
Unpaid Principal	390,230	527,088
Recorded Investment	339,467	503,869
Allowance for loan and lease losses, non covered	10,120	2,863
Coverage	3.00%	1.00%
Commercial impaired loans with specific allowance [Member] | Non-covered originated loans [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	5,297	6,600
Recorded Investment	4,731	5,553
Allowance for loan and lease losses, non covered	1,108	1,431
Coverage	23.00%	26.00%
Residential troubled-debt restructuring impaired loans with specific allowance [Member] | Non-covered originated loans [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	97,289	89,539
Recorded Investment	91,692	84,494
Allowance for loan and lease losses, non covered	7,932	8,708
Coverage	9.00%	10.00%
Commercial impaired loans with no specific allowance [Member] | Non-covered originated loans [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	228,968	27,914
Recorded Investment	221,852	22,592
Commercial impaired loans with no specific allowance [Member] | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Impaired [Line Items]
Unpaid Principal	208	208
Recorded Investment	208	208
Mortgage impaired non-covered loan pool [Member] | Non-covered acquired loans accounted under ASC 310-30
Financing Receivable, Impaired [Line Items]
Unpaid Principal		5,183
Recorded Investment		4,718
Allowance for loan and lease losses, non covered		57
Coverage		1.00%
Commercial impaired non-covered loan pool [Member] | Non-covered acquired loans accounted under ASC 310-30
Financing Receivable, Impaired [Line Items]
Unpaid Principal	294,966	48,100
Recorded Investment	257,234	40,411
Allowance for loan and lease losses, non covered	4,613	394
Coverage	2.00%	1.00%
Construction impaired non-covered loan pool [Member] | Non-covered acquired loans accounted under ASC 310-30
Financing Receivable, Impaired [Line Items]
Unpaid Principal	52,367	21,526
Recorded Investment	45,770	17,818
Allowance for loan and lease losses, non covered	5,502	1,319
Coverage	12.00%	7.00%
Consumer impaired non-covered loan pool [Member] | Non-covered acquired loans accounted under ASC 310-30
Financing Receivable, Impaired [Line Items]
Unpaid Principal	42,897	73,043
Recorded Investment	36,463	63,606
Allowance for loan and lease losses, non covered	5	361
Coverage	0.00%	1.00%
Auto impaired non-covered loan pool [Member] | Non-covered acquired loans accounted under ASC 310-30
Financing Receivable, Impaired [Line Items]
Unpaid Principal		379,236
Recorded Investment		377,316
Allowance for loan and lease losses, non covered		$ 732
Coverage		0.00%

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Restricted Cash (Composition) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Restricted cash components by secured investment type
Deposit pledged as collateral	$ 32,907	$ 82,199
Securities sold under agreements to repurchase secured with cash or equivalents [Member]
Restricted cash components by secured investment type
Deposit pledged as collateral	24,500	67,029
Derivatives
Restricted cash components by secured investment type
Deposit pledged as collateral	2,980	2,980
Obligations under agreements of loans sold with recourse
Restricted cash components by secured investment type
Deposit pledged as collateral	$ 5,427	$ 12,190

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Resticted Cash

9 Months Ended

Sep. 30, 2014

Restricted Cash And Investments Abstract

Resticted Cash Disclosure

NOTE 2–RESTRICTED CASH

The following table includes the composition of the Company's restricted cash:

	September 30,		December 31,
	2014		2013
	(In thousands)
Cash pledged as collateral to other financial institutions to secure:
Securities sold under agreements to repurchase	$	24,500	$	67,029
Derivatives		2,980		2,980
Obligations under agreement of loans sold with recourse		5,427		12,190
	$	32,907	$	82,199

The Company delivers cash as collateral to meet margin calls for some long term securities sold under agreements to repurchase. At September 30, 2014 and December 31, 2013, the Company had cash pledged as collateral for securities sold under agreements to repurchase amounting to $24.5 million and $67.0 million, respectively.

As part of its derivative activities, the Company has entered into collateral agreements with certain financial counterparties. At bothSeptember 30, 2014 and December 31, 2013, the Company had delivered $3.0 million of cash as collateral for such derivatives activities.

As part of the BBVAPR Acquisition, the Company assumed various contracts with the Federal National Mortgage Association (“FNMA”)which required collateral to guarantee the repurchase, if necessary, of certain mortgageloans sold with recourse. At September 30, 2014 and December 31, 2013, the Company had $5.4 million and $12.2 million,respectively,of cash pledged as collateral for such recourse obligations.

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Loans Receivable (Interest Income Recognized in loans individually evaluated for impairment) (Details) (Originated Loans [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Impaired Financing Receivable Interest Income Accrual Method [Abstract]
Total Interest Income	$ 2,422	$ 863	$ 7,144	$ 2,396
Impaired Financing Receivable Average Recorded Investment [Abstract]
Total Average Recorded Investment	185,425	120,232	139,987	122,749
Commercial Loan [Member]
Impaired Financing Receivable Interest Income Accrual Method [Abstract]
Impaired Financing Receivable With Related Allowance Interest Income Accrual Method	28	5	83	16
Impaired Financing Receivable With No Related Allowance Interest Income Accrual Method	1,728	146	5,185	438
Impaired Financing Receivable Average Recorded Investment [Abstract]
Impaired Financing Receivable With Related Allowance Average Recorded Investment	5,103	9,039	6,187	14,872
Impaired Financing Receivable With No Related Allowance Average Recorded Investment	89,029	28,805	44,203	26,471
Troubled Debt Restructuring [Member]
Impaired Financing Receivable Interest Income Accrual Method [Abstract]
Impaired Financing Receivable With Related Allowance Interest Income Accrual Method	666	712	1,876	1,942
Impaired Financing Receivable Average Recorded Investment [Abstract]
Impaired Financing Receivable With Related Allowance Average Recorded Investment	$ 91,293	$ 82,388	$ 89,597	$ 81,406

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Guarantees (Tables)

9 Months Ended

Sep. 30, 2014

Guarantees [Abstract]

Schedule Of Guarantee Obligations Text Block

The following table shows the changes in the Company's liability for estimated losses from these credit recourse agreements, included in the unaudited consolidated statements of financial condition during the quarters and nine-month periods ended September 30, 2014 and 2013

	Quarter Ended September 30,					Nine-Month Period Ended September 30,
	2014		2013			2014		2013
	(In thousands)
Balance at beginning of period	$	1,310	$	2,460	$	1,955	$	2,460
Net charge-offs/terminations		(232)		-		(877)		-
Balance at end of period	$	1,078	$	2,460	$	1,078	$	2,460

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Restricted Cash (Tables)

9 Months Ended

Sep. 30, 2014

Restricted Cash And Investments Abstract

Restricted Cash Components and Its Secured Investments

The following table includes the composition of the Company's restricted cash

	September 30,		December 31,
	2014		2013
	(In thousands)
Cash pledged as collateral to other financial institutions to secure:
Securities sold under agreements to repurchase	$	24,500	$	67,029
Derivatives		2,980		2,980
Obligations under agreement of loans sold with recourse		5,427		12,190
	$	32,907	$	82,199

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

New Accounting Pronouncements Policy [Policy Text Block]

Recent Accounting Developments

In August 2014, the Financial Accounting Standard Board (“FASB”) issued a new going concern standard, which requires management to assessat each interim and annual reporting period whether substantial doubt exists about the company's ability to continue as a going concern. Substantial doubt exists if it is probable (the same threshold that is used for contingencies) that the company will be unable to meet its obligations as they become due within one year after the date the financial statements are issued or available to be issued (assessment date). Management needs to consider known (and reasonably knowable) events and conditions at the assessment date. For all entities, this standard is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016, with earlier adoption permitted. The adoption of this standard will have no material impact on our financial position or results of operations.

In August 2014, FASB issued new guidance requiring creditors to classify certain foreclosed, government-guaranteed, mortgage loans as receivables. The receivable is measured at the amount expected to be recovered under the guarantee, which is not treated as a separate unit of account.For publicbusiness entities, this guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2014, with earlier adoption permitted if the entity already has adopted Accounting Standards Update (“ASU”) 2014-04. An entity should adopt the amendments in this update using either a prospectivetransition method or a modified retrospective transition method. We are currently evaluating the impact that the adoption of this guidance will have on our financial position and results of operations.

Other than the accounting pronouncements disclosed above, there was no other new accounting pronouncement issued during the third quarter of 2014 that could have a material impact on the Company's financial position, operating results or financials statement disclosures.

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Accumulated Other Comprehensive Income (Accumulated Comprehensive Income, net of income tax) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Accumulated Other Comprehensive Income [Line Items]
Accumulated other comprehensive income, net of tax, Total	$ 13,411	$ 3,191
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income [Line Items]
Accumulated other comprehensive income, net of tax, Total	13,411	3,191
AccumulatedOtherThanTemporaryImpairmentMember
Accumulated Other Comprehensive Income [Line Items]
Unrealized gain on securities available-for-sale which are not other-than-temporarily impaired	23,995	13,267
Income tax effect of unrealized gain on securities available-for-sale	(3,677)	(1,834)
Net unrealized gain on securities available for sale wich are not other than temporarily impaired	20,318	11,433
Accumulated Net Gain Loss From Designated Or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income [Line Items]
Unrealized loss on cash flow hedges	(8,717)	(10,907)
Income tax effect of unrealized loss on cash flow hedges	1,810	2,665
Net unrealized (loss) income on cash flow hedges	$ (6,907)	$ (8,242)

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Loans Receivable (Non-Covered Acquired Loan carrying amounts) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Accounts Notes And Loans Receivable Line Items
Financing Receivable Acquired With Deteriorated Credit Quality	$ 2,505,662	$ 2,929,353
Non-acretable discount	523,987	579,587
Cash expected to be collected	1,981,675	2,349,766
Accretable Yield	404,130	517,553
Carrying amount, gross	1,577,545	1,832,213
Allowance for loan and lease losses	10,120	2,863
Carrying amount, net	$ 1,567,425	$ 1,829,350

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies [Abstract]

Schedule Of Fair Value Off Balance Sheet Risks Text Block

Credit-related financial instruments at September 30, 2014 and December 31, 2013were as follows

	September 30,		December 31,
	2014		2013
	(In thousands)
Commitments to extend credit	$	476,523	$	520,269
Commercial letters of credit		1,193		1,096

	September 30,		December 31,
	2014		2013
	(In thousands)
Standby letters of credit and financial guarantees	$	37,145	$	38,577
Loans sold with recourse		98,433		122,291
Commitments to sell or securitize mortgage loans		34,650		80,307

Operating Leases, Future Minimum Payments Due [Abstract]

Contractual Obligation Fiscal Year Maturity Schedule [Table Text Block]

Year Ending December 31,	Minimum Rent
	(In thousands)
2014 (October 1 to December 31)	$	2,221
2015		8,026
2016		7,435
2017		6,807
2018		5,928
Thereafter		22,239
	$	52,656

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Investments Securities (Tables)

9 Months Ended

Sep. 30, 2014

Investments [Abstract]

Available for sale securities

	September 30, 2014
			Gross		Gross				Weighted
	Amortized		Unrealized		Unrealized		Fair		Average
	Cost		Gains		Losses		Value		Yield
	(In thousands)
Available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	1,023,303	$	36,414	$	3,082	$	1,056,635	3.13%
GNMA certificates		5,241		348		21		5,568	4.92%
CMOs issued by US government-sponsored agencies		189,142		206		4,390		184,958	1.80%
Total mortgage-backed securities		1,217,686		36,968		7,493		1,247,161	2.93%
Investment securities
Obligations of US government-sponsored agencies		7,795		-		34		7,761	1.32%
Obligations of Puerto Rico government and political subdivisions		20,915		-		5,469		15,446	5.41%
Other debt securities		3,373		138		-		3,511	2.91%
Total investment securities		32,083		138		5,503		26,718	4.15%
Total securities available for sale	$	1,249,769	$	37,106	$	12,996	$	1,273,879	2.96%
Held-to-maturity
Mortgage-backed securities
FNMA and FHLMC certificates		144,305		82		170		144,217	1.95%
Total	$	1,394,074	$	37,188	$	13,166	$	1,418,096	2.86%

	December 31, 2013
			Gross		Gross				Weighted
	Amortized		Unrealized		Unrealized		Fair		Average
	Cost		Gains		Losses		Value		Yield
	(In thousands)
Available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	1,190,910	$	33,089	$	6,669	$	1,217,330	2.93%
GNMA certificates		7,406		433		24		7,815	4.92%
CMOs issued by US government-sponsored agencies		220,801		407		6,814		214,394	1.78%
Total mortgage-backed securities		1,419,117		33,929		13,507		1,439,539	2.76%
Investment securities
Obligations of US government-sponsored agencies		10,691		-		42		10,649	1.21%
Obligations of Puerto Rico government and political subdivisions		121,035		-		6,845		114,190	4.38%
Other debt securities		24,200		167		320		24,047	3.46%
Total investment securities		155,926		167		7,207		148,886	2.99%
Total securities available-for-sale	$	1,575,043	$	34,096	$	20,714	$	1,588,425	2.89%

	September 30, 2014
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)				(In thousands)
Mortgage-backed securities
Due after 5 to 10 years
FNMA and FHLMC certificates	$	22,896	$	23,243	$	-	$	-
Total due after 5 to 10 years		22,896		23,243		-		-
Due after 10 years
FNMA and FHLMC certificates		1,000,407		1,033,392		144,305		144,217
GNMA certificates		5,241		5,568		-		-
CMOs issued by US government-sponsored agencies		189,142		184,958		-		-
Total due after 10 years		1,194,790		1,223,918		144,305		144,217
Total mortgage-backed securities		1,217,686		1,247,161		144,305		144,217
Investment securities
Due from 1 to 5 years
Obligations of Puerto Rico government and political subdivisions		10,450		8,628		-		-
Total due from 1 to 5 years		10,450		8,628		-		-
Due after 5 to 10 years
Obligations of US government and sponsored agencies		7,795		7,761		-		-
Total due after 5 to 10 years		7,795		7,761		-		-
Due after 10 years
Obligations of Puerto Rico government and political subdivisions		10,465		6,818		-		-
Other debt securities		3,373		3,511		-		-
Total due after 10 years		13,838		10,329		-		-
Total investment securities		32,083		26,718		-		-
Total securities available-for-sale	$	1,249,769	$	1,273,879	$	144,305	$	144,217

Gross Realized Gains and Losses by Category

In addition, during the nine-month period ended September 30, 2014, the Company sold $110.8 millionof available-for-sale FNMA and FHLMC certificatesbecause the Company believed that gains could be realized and that there were good opportunities to invest the proceeds in other investment securities with attractive yields and terms that would allow the Company to continue protecting its net interest margin. The Company recorded a net gain on sale of these securities of $4.4 million. The table below presents the gross realized gains by category for such period. There was no realized gain or loss for the nine-month period ended September 30, 2013.

	Nine-Month Period Ended September 30, 2014
			Book Value		Gross		Gross
Description	Sale Price		at Sale		Gains		Losses
	(In thousands)
Sale of securities available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	115,158	$	110,792	$	4,366	$	-
GNMA certificates		74,091		74,091		-		-
Total	$	189,249	$	184,883	$	4,366	$	-

Available For Sale Securities Continuous Unrealized Loss Position Fair Value

The following tables show the Company's gross unrealized losses and fair value of investment securities available-for-sale and held-to-maturity, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position at September 30, 2014 and December 31, 2013

	September 30, 2014
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	149,957	$	4,242	$	145,716
FNMA and FHLMC certificates		183,479		3,049		180,430
Obligations of Puerto Rico government and political subdivisions		20,915		5,469		15,446
GNMA certificates		197		22		176
	$	354,548	$	12,782	$	341,768
	Less than 12 months
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	15,746	$	148	$	15,598
FNMA and FHLMC certificates		26,220		33		26,187
Obligations of US government and sponsored agencies		7,796		34		7,761
Securities held-to-maturity
FNMA and FHLMC Certificates		95,598		170		95,428
	$	145,359	$	385	$	144,974
	Total
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	165,703	$	4,390	$	161,314
FNMA and FHLMC certificates		209,699		3,082		206,617
Obligations of Puerto Rico government and political subdivisions		20,915		5,469		15,446
Obligations of US government and sponsored agencies		7,796		34		7,761
GNMA certificates		197		22		176
		404,309		12,996		391,314
Securities held-to-maturity
FNMA and FHLMC Certificates		95,598		170		95,428
	$	499,907	$	13,166	$	486,742

	December 31, 2013
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico government and political subdivisions	$	20,845	$	5,470	$	15,375
CMOs issued by US government-sponsored agencies		2,559		237		2,322
GNMA certificates		81		11		70
	$	23,485	$	5,718	$	17,767
	Less than 12 months
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico government and political subdivisions	$	100,190	$	1,375	$	98,815
CMOs issued by US government-sponsored agencies		182,661		6,577		176,084
GNMA certificates		122		13		109
FNMA and FHLMC certificates		220,913		6,669		214,244
Obligations of US government and sponsored agencies		10,691		42		10,649
Other debt securities		20,000		320		19,680
	$	534,577	$	14,996	$	519,581
	Total
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico government and political subdivisions	$	121,035	$	6,845	$	114,190
CMOs issued by US government-sponsored agencies		185,220		6,814		178,406
GNMA certificates		203		24		179
FNMA and FHLMC certificates		220,913		6,669		214,244
Obligations of US government and sponsored agencies		10,691		42		10,649
Other debt securities		20,000		320		19,680
	$	558,062	$	20,714	$	537,348

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Loans Receivable (Tables)

9 Months Ended

Sep. 30, 2014

Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]

Schedule Of Accounts Notes Loans And Financing Receivable Text Block

The composition of the Company's loan portfolio at September 30, 2014 and December 31,2013 was as follows

	September 30,		December 31,
	2014		2013
	(In thousands)
Non-covered loans:
Originated and other loans and leases held for investment:
Mortgage	$	791,106	$	766,265
Commercial		1,217,235		1,127,657
Consumer		175,882		127,744
Auto and leasing		542,892		379,874
		2,727,115		2,401,540
Acquired loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		26,984		77,681
Consumer		47,284		56,174
Auto		210,808		301,584
		285,076		435,439
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy)
Mortgage		670,188		717,904
Commercial		485,444		545,117
Construction		108,694		126,427
Consumer		36,470		63,620
Auto		276,749		379,145
		1,577,545		1,832,213
		4,589,736		4,669,192
Deferred loan cost , net		3,575		1,035
Loans receivable		4,593,311		4,670,227
Allowance for loan and lease losses on non-covered loans		(64,859)		(54,298)
Loans receivable, net		4,528,452		4,615,929
Mortgage loans held-for-sale		16,757		46,529
Total non-covered loans, net		4,545,209		4,662,458
Covered loans:
Loans secured by 1-4 family residential properties		121,658		121,748
Construction and development secured by 1-4 family residential properties		18,947		17,304
Commercial and other construction		228,410		264,249
Consumer		4,905		6,119
Leasing		-		270
Total covered loans		373,920		409,690
Allowance for loan and lease losses on covered loans		(62,227)		(52,729)
Total covered loans, net		311,693		356,961
Total loans, net	$	4,856,902	$	5,019,419

Past Due Financing Receivables [Table Text Block]

The following tables present the aging of the recorded investment in gross originated and other loans held for investment as of September 30,2014 and December 31, 2013 by class ofloans. Mortgage loans past due included 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

	September 30, 2014
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	5,996	$	3,283	$	3,424	$	12,703	$	55,635	$	68,338	$	141
Years 2003 and 2004		6,679		1,730		3,471		11,880		50,464		62,344		-
Year 2005		7,368		3,295		8,258		18,921		69,510		88,431		89
Year 2006		10,274		5,678		6,041		21,993		91,218		113,211		114
Years 2007, 2008 and 2009		3,285		3,095		7,647		14,027		83,036		97,063		59
Years 2010, 2011, 2012, 2013 and 2014		4,938		1,368		5,706		12,012		181,550		193,562		509
		38,540		18,449		34,547		91,536		531,413		622,949		912
Non-traditional		1,084		783		3,022		4,889		32,886		37,775		-
Loss mitigation program		10,022		7,358		14,625		32,005		57,578		89,583		5,773
		49,646		26,590		52,194		128,430		621,877		750,307		6,685
Home equity secured personal loans		-		-		126		126		607		733		-
GNMA's buy-back option program		-		-		40,066		40,066		-		40,066		-
		49,646		26,590		92,386		168,622		622,484		791,106		6,685
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		113,976		113,976		-
Institutional		-		-		-		-		37,177		37,177		-
Middle market		-		1,071		638		1,709		142,830		144,539		-
Retail		1,164		129		7,258		8,551		153,091		161,642		-
Floor plan		-		-		-		-		1,666		1,666		-
Real estate		-		-		-		-		11,878		11,878		-
		1,164		1,200		7,896		10,260		460,618		470,878		-
Other commercial and industrial:
Corporate		-		-		-		-		60,402		60,402		-
Institutional		-		-		-		-		482,277		482,277		-
Middle market		-		-		628		628		82,577		83,205		-
Retail		267		144		809		1,220		79,592		80,812		-
Floor plan		-		-		-		-		39,661		39,661		-
		267		144		1,437		1,848		744,509		746,357		-
		1,431		1,344		9,333		12,108		1,205,127		1,217,235		-

	September 30, 2014
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		238		189		408		835		17,022		17,857		-
Overdrafts		20		2		1		23		317		340		-
Personal lines of credit		67		132		29		228		1,823		2,051		-
Personal loans		1,666		627		604		2,897		135,711		138,608		-
Cash collateral personal loans		214		132		36		382		16,644		17,026		-
		2,205		1,082		1,078		4,365		171,517		175,882		-
Auto and leasing		43,537		15,956		8,279		67,772		475,120		542,892		-
Total	$	96,819	$	44,972	$	111,076	$	252,867	$	2,474,248	$	2,727,115	$	6,685

	December 31, 2013
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	6,697	$	1,635	$	3,408	$	11,740	$	64,772	$	76,512	$	79
Years 2003 and 2004		4,722		2,163		1,845		8,730		56,387		65,117		-
Year 2005		8,527		2,119		4,808		15,454		74,087		89,541		-
Year 2006		12,055		4,312		4,418		20,785		99,537		120,322		-
Years 2007, 2008 and 2009		3,464		1,104		4,663		9,231		91,919		101,150		152
Years 2010, 2011, 2012 and 2013		3,923		1,609		4,453		9,985		139,561		149,546		459
		39,388		12,942		23,595		75,925		526,263		602,188		690
Non-traditional		3,217		1,162		2,311		6,690		35,412		42,102		-
Loss mitigation program		9,759		5,560		13,191		28,510		57,808		86,318		2,185
		52,364		19,664		39,097		111,125		619,483		730,608		2,875
Home equity secured personal loans		-		-		138		138		598		736		-
GNMA's buy-back option program		-		-		34,921		34,921		-		34,921		-
		52,364		19,664		74,156		146,184		620,081		766,265		2,875
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		54,796		54,796		-
Institutional		-		-		-		-		4,050		4,050		-
Middle market		1,356		-		10,294		11,650		149,933		161,583		-
Retail		4,253		1,015		3,190		8,458		158,184		166,642		-
Floor plan		-		-		-		-		1,835		1,835		-
Real estate		-		-		-		-		11,655		11,655		-
		5,609		1,015		13,484		20,108		380,453		400,561		-
Other commercial and industrial:
Corporate		236		-		-		236		32,362		32,598		-
Institutional		-		-		-		-		536,445		536,445		-
Middle market		-		299		1,134		1,433		57,464		58,897		-
Retail		1,830		552		539		2,921		58,589		61,510		-
Floor plan		39		-		-		39		37,607		37,646		-
		2,105		851		1,673		4,629		722,467		727,096		-
		7,714		1,866		15,157		24,737		1,102,920		1,127,657		-

	December 31, 2013
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		287		168		232		687		14,554		15,241		-
Overdrafts		46		4		-		50		322		372		-
Personal lines of credit		33		38		66		137		1,844		1,981		-
Personal loans		1,324		399		352		2,075		92,485		94,560		-
Cash collateral personal loans		324		43		-		367		15,223		15,590		-
		2,014		652		650		3,316		124,428		127,744		-
Auto and leasing		25,531		9,437		5,089		40,057		339,817		379,874		-
Total	$	87,623	$	31,619	$	95,052	$	214,294	$	2,187,246	$	2,401,540	$	2,875

The following tables present the aging of the recorded investment in gross acquired loans accounted for under ASC 310-20 as ofSeptember 30,2014 and December 31, 2013, by class ofloans:

	September 30, 2014
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Corporate	$	-	$	-	$	-	$	-	$	3,746	$	3,746	$	-
Retail		-		-		342		342		482		824		-
Floor plan		-		-		101		101		3,972		4,073		-
		-		-		443		443		8,200		8,643		-
Other commercial and industrial
Corporate		-		-		-		-		2,915		2,915		-
Retail		169		73		451		693		7,328		8,021		-
Floor plan		97		40		108		245		7,160		7,405		-
		266		113		559		938		17,403		18,341		-
		266		113		1,002		1,381		25,603		26,984		-
Consumer
Credit cards		1,625		678		1,328		3,631		40,051		43,682		-
Personal loans		160		83		66		309		3,293		3,602		-
		1,785		761		1,394		3,940		43,344		47,284		-
Auto		11,372		4,137		1,537		17,046		193,762		210,808		-
Total	$	13,423	$	5,011	$	3,933	$	22,367	$	262,709	$	285,076	$	-

	December 31, 2013
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Corporate	$	-	$	-	$	-	$	-	$	10,166	$	10,166	$	-
Retail		431		331		868		1,630		4,140		5,770		-
Floor plan		-		-		101		101		2,576		2,677		-
		431		331		969		1,731		16,882		18,613		-
Other commercial and industrial
Corporate		14		83		-		97		9,696		9,793		-
Retail		1,717		1,418		659		3,794		23,544		27,338		-
Floor plan		35		193		18		246		21,691		21,937		-
		1,766		1,694		677		4,137		54,931		59,068		-
		2,197		2,025		1,646		5,868		71,813		77,681		-
Consumer
Credit cards		2,217		1,200		2,068		5,485		46,714		52,199		-
Personal loans		196		7		91		294		3,681		3,975		-
		2,413		1,207		2,159		5,779		50,395		56,174		-
Auto		12,534		3,616		1,608		17,758		283,826		301,584		-
Total	$	17,144	$	6,848	$	5,413	$	29,405	$	406,034	$	435,439	$	-

Carrying Amounts Of Acquired Non Covered Loans Tabular Disclosure [Table Text Block]

	September 30,	December 31,
	2014	2013
	(In thousands)
Contractual required payments receivable	$ 2,505,662	$ 2,929,353
Less: Non-accretable discount	523,987	579,587
Cash expected to be collected	1,981,675	2,349,766
Less: Accretable yield	404,130	517,553
Carrying amount, gross	1,577,545	1,832,213
Less: allowance for loan and lease losses	10,120	2,863
Carrying amount, net	$ 1,567,425	$ 1,829,350

Accretable Yield for Acquired Loans Non-covered [Table Text Block]

The following tables describe the accretable yield and non-accretable discount activity of acquired loans accounted for under ASC 310-30 for the quartersand nine-month periods ended September 30, 2014 and 2013, excluding covered loans

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Accretable Yield Activity
Balance at beginning of period	$	444,606	$	561,485	$	517,553	$	655,833
Accretion		(38,340)		(48,352)		(118,323)		(150,447)
Transfer from (to) non-accretable discount		(2,136)		6,010		4,900		13,757
Balance at end of period	$	404,130	$	519,143	$	404,130	$	519,143
	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Non-Accretable Discount Activity
Balance at beginning of period	$	554,724	$	686,231	$	579,587	$	714,462
Principal losses		(32,873)		(44,301)		(50,700)		(64,785)
Transfer from (to) accretable yield		2,136		(6,010)		(4,900)		(13,757)
Balance at end of period	$	523,987	$	635,920	$	523,987	$	635,920

Covered loans carrying amount [Table Text Block]

Covered Loans

The carrying amount of covered loans at September 30, 2014 and December 31, 2013is as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Contractual required payments receivable	$	561,844	$	702,126
Less: Non-accretable discount		77,940		129,477
Cash expected to be collected		483,904		572,649
Less: Accretable yield		109,984		162,959
Carrying amount, gross		373,920		409,690
Less: Allowance for covered loan and lease losses		62,227		52,729
Carrying amount, net	$	311,693	$	356,961

The following tables describe the accretable yield and non-accretable discount activity of covered loans for the quartersand nine-month periods ended September 30, 2014 and2013:

Accretable Yield for Acquired Loans Covered [Table Text Block]

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Accretable Yield Activity
Balance at beginning of period	$	128,061	$	167,132	$	162,959	$	188,008
Accretion		(20,886)		(21,657)		(69,154)		(65,884)
Transfer from non-accretable discount		2,809		23,070		16,179		46,421
Balance at end of period	$	109,984	$	168,545	$	109,984	$	168,545
	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2013		2013		2014		2013
	(In thousands)
Non-Accretable Discount Activity
Balance at beginning of period	$	85,224	$	192,259	$	129,477	$	237,555
Principal losses		(4,475)		(7,762)		(35,358)		(29,707)
Transfer to accretable yield		(2,809)		(23,070)		(16,179)		(46,421)
Balance at end of period	$	77,940	$	161,427	$	77,940	$	161,427

Financing Receivable Recorded Investment Nonaccrual Status By Class Of Loans [Table Text Block]

Non-accrual Loans

The following table presents the recorded investment in loansin non-accrual status by class ofloans as of September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year):
Up to the year 2002	$	3,613	$	3,428
Years 2003 and 2004		3,749		1,845
Year 2005		9,117		4,922
Year 2006		7,019		4,418
Years 2007, 2008 and 2009		9,817		4,511
Years 2010, 2011, 2012, 2013 and 2014		6,244		7,818
		39,559		26,942
Non-traditional		3,022		2,311
Loss mitigation program		17,636		18,792
		60,217		48,045
Home equity secured personal loans		125		138
		60,342		48,183
Commercial
Commercial secured by real estate
Middle market		10,608		11,895
Retail		8,942		7,208
		19,550		19,103
Other commercial and industrial
Middle market		628		1,134
Retail		2,112		2,485
Floor plan		-		108
		2,740		3,727
		22,290		22,830
Consumer
Credit cards		408		232
Overdrafts		1		-
Personal lines of credit		35		84
Personal loans		761		485
Cash collateral personal loans		36		4
		1,241		805
Auto and leasing		9,008		5,089
	$	92,881	$	76,907

	September 30,		December 31,
	2014		2013
	(In thousands)
Acquired loans accounted under ASC 310-20
Commercial
Commercial secured by real estate
Retail	$	342	$	956
Floor plan		101		101
		443		1,057
Other commercial and industrial
Corporate		-		97
Retail		455		1,371
Floor plan		121		18
		576		1,486
		1,019		2,543
Consumer
Credit cards		1,326		2,068
Personal loans		76		151
		1,402		2,219
Auto		1,746		1,608
		4,167		6,370
Total non-accrual loans	$	97,048	$	83,277

Impaired Financing Receivables [Table Text Block]

Originated and Other Loans and Leases Held for Investment

The Company's recorded investment in non-covered commercial and mortgage loans categorized as originated and other loans and leases held for investment that were individually evaluated forimpairment and the related allowance for loan and lease losses at September 30, 2014 and December 31, 2013are as follows:

	September 30, 2014
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	5,297	$	4,731	$	1,108	23%
Residential troubled-debt restructuring		97,289		91,692		7,932	9%
Impaired loans with no specific allowance:
Commercial		228,968		221,852		N/A	N/A
Total investment in impaired loans	$	331,554	$	318,275	$	9,040	3%

	December 31, 2013
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance
Commercial	$	6,600	$	5,553	$	1,431	26%
Residential troubled-debt restructuring		89,539		84,494		8,708	10%
Impaired loans with no specific allowance
Commercial		27,914		22,592		N/A	N/A
Total investment in impaired loans	$	124,053	$	112,639	$	10,139	9%

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

The Company's recorded investment in non-covered commercial loans categorized as non-covered acquired loans accounted for under ASC 310-20 that were individually evaluated for impairment and the related allowance for loan and lease losses at September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial		208		208		N/A	N/A
Total investment in impaired loans	$	208	$	208	$	-	0%
	December 31, 2013
	Unpaid		Recorded		Specific
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial		208		208		N/A	N/A
Total investment in impaired loans	$	208	$	208	$	-	0%

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

The Company's recorded investment in non-covered acquired loan pools accounted for under ASC 310-30 and their related allowance for non-covered loan and lease losses at September 30, 2014 and December 31, 2013are as follows

	September 30, 2014
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired non-covered loan pools:
Commercial	$	294,966	$	257,234	$	4,613	2%
Construction		52,367		45,770		5,502	12%
Consumer		42,897		36,463		5	0%
Total investment in impaired non-covered loan pools	$	390,230	$	339,467	$	10,120	3%

	December 31, 2013
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired non-covered loan pools:
Mortgage	$	5,183	$	4,718	$	57	1%
Commercial		48,100		40,411		394	1%
Construction		21,526		17,818		1,319	7%
Consumer		73,043		63,606		361	1%
Auto		379,236		377,316		732	0%
Total investment in impaired non-covered loan pools	$	527,088	$	503,869	$	2,863	1%

The following table presents the interest recognized in non-covered commercial and mortgage loans that were individuallyevaluated for impairment, excluding loans accounted for under ASC 310-30, for the quarters and nine-month periodsended September 30, 2014 and 2013

	Quarter Ended September 30,
	2014				2013
	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
	(In thousands)
Impaired loans with specific allowance
Commercial	$	28	$	5,103	$	5	$	9,039
Residential troubled-debt restructuring		666		91,293		712		82,388
Impaired loans with no specific allowance
Commercial		1,728		89,029		146		28,805
Total interest income from impaired loans	$	2,422	$	185,425	$	863	$	120,232
	Nine-Month Period Ended Ended September 30,
	2014				2013
	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
	(In thousands)
Impaired loans with specific allowance
Commercial	$	83	$	6,187	$	16	$	14,872
Residential troubled-debt restructuring		1,876		89,597		1,942		81,406
Impaired loans with no specific allowance
Commercial		5,185		44,203		438		26,471
Total interest income from impaired loans	$	7,144	$	139,987	$	2,396	$	122,749

Impaired Financing Receivables Covered Loans[Table Text Block]

Covered Loans

The Company's recorded investment in covered loan pools that have recorded impairments and their relatedallowance for covered loan and lease losses as of September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired covered loan pools:
Loans secured by 1-4 family residential properties	$	138,029	$	106,823	$	15,252	14%
Construction and development secured by 1-4 family residential properties		61,562		20,249		8,679	43%
Commercial and other construction		105,542		73,424		37,907	52%
Consumer		8,408		4,844		389	8%
Total investment in impaired covered loan pools	$	313,541	$	205,340	$	62,227	30%

	December 31, 2013
							Coverage
	Unpaid		Recorded		Specific		to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired covered loan pools with specific allowance
Loans secured by 1-4 family residential properties	$	52,142	$	38,179	$	12,495	33%
Construction and development secured by 1-4 family residential properties		66,037		17,304		6,866	40%
Commercial and other construction		209,566		111,946		32,753	29%
Consumer		10,512		5,857		615	11%
Total investment in impaired covered loan pools	$	338,257	$	173,286	$	52,729	30%

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

Modifications

The following tables present the troubled-debt restructurings during the quarters and nine-month periods ended September 30, 2014 and 2013:

	Quarter Ended September 30, 2014
	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	26	$	3,016	5.62%	347	$	2,965	4.22%	393
Commercial	20		200,007	7.25%	3		200,007	7.25%	10
Consumer	6		58	10.00%	61		68	9.66%	55
	Nine-Month Period Ended September 30, 2014
	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	113	$	14,562	5.99%	349	$	14,162	4.21%	389
Commercial	21		200,080	7.25%	3		200,080	7.25%	10
Consumer	13		123	11.77%	66		136	11.48%	62
	Quarter Ended September 30, 2013
	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	21	$	2,887	6.74%	352	$	3,066	6.74%	351
	Nine-Month Period Ended September 30, 2013
	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	102	$	12,828	6.43%	334	$	13,685	5.15%	393
Commercial	2		1,842	8.99%	87		1,842	4.00%	66

The following table presents troubled-debt restructurings for which there was a payment default during the twelve-month periods endedSeptember 30, 2014 and 2013:

	Twelve-Month Period Ended September 30,
	2014			2013
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(Dollars in thousands)
Mortgage	15	$	1,739	30	$	3,097
Consumer	2	$	5	-	$	-

Financing Receivable Credit Quality Indicators [Table Text Block]

As of September 30,2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of gross non-covered originated and other loans and acquiredloans accounted for under ASC 310-20 subject to risk rating by class of loans is as follows:

	September 30, 2014
	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	$	113,976	$	90,006	$	23,970	$	-	$	-	$	-
Institutional		37,177		27,232		9,702		-		-		243
Middle market		144,539		127,640		3,707		-		-		13,192
Retail		161,642		147,034		3,020		2,441		-		9,147
Floor plan		1,666		594		971		101		-		-
Real estate		11,878		11,878		-		-		-		-
		470,878		404,384		41,370		2,542		-		22,582
Other commercial and industrial:
Corporate		60,402		60,402		-		-		-		-
Institutional		482,275		282,293		-		-		-		199,982
Middle market		83,206		77,504		3,144		-		-		2,558
Retail		80,813		76,684		308		2,360		-		1,461
Floor plan		39,661		38,301		1,147		213		-		-
		746,357		535,184		4,599		2,573		-		204,001
Total		1,217,235		939,568		45,969		5,115		-		226,583
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Corporate		3,746		3,746		-		-		-		-
Retail		824		467		-		357		-		-
Floor plan		4,073		4,073		-		-		-		-
		8,643		8,286		-		357		-		-
Other commercial and industrial:
Corporate		2,915		2,915		-		-		-		-
Retail		8,021		7,612		9		400		-		-
Floor plan		7,405		7,405		-		-		-		-
		18,341		17,932		9		400		-		-
Total		26,984		26,218		9		757		-		-
Total	$	1,244,219	$	965,786	$	45,978	$	5,872	$	-	$	226,583

	December 31, 2013
	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	$	54,796	$	54,796	$	-	$	-	$	-	$	-
Institutional		4,050		4,050		-		-		-		-
Middle market		161,583		133,061		16,627		118		-		11,777
Retail		166,642		149,018		2,182		2,258		-		13,184
Floor plan		1,835		1,835		-		-		-		-
Real estate		11,655		11,655		-		-		-		-
		400,561		354,415		18,809		2,376		-		24,961
Other commercial and industrial:
Corporate		32,598		32,598		-		-		-		-
Institutional		536,445		536,445		-		-		-		-
Middle market		58,897		53,868		3,466		198		-		1,365
Retail		61,510		58,742		257		691		-		1,820
Floor plan		37,646		37,350		188		108		-		-
		727,096		719,003		3,911		997		-		3,185
Total		1,127,657		1,073,418		22,720		3,373		-		28,146
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Corporate		10,166		10,166		-		-		-		-
Retail		5,770		4,378		443		949		-		-
Floor plan		2,677		2,576		-		101		-		-
		18,613		17,120		443		1,050		-		-
Other commercial and industrial:
Corporate		9,793		9,696		-		97		-		-
Retail		27,338		26,044		150		1,144		-		-
Floor plan		21,937		21,769		168		-		-		-
		59,068		57,509		318		1,241		-		-
Total		77,681		74,629		761		2,291		-		-
Total	$	1,205,338	$	1,148,047	$	23,481	$	5,664	$	-	$	28,146

	September 30, 2014
	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	$	68,338	$	54,931	$	5,831	$	3,160	$	537	$	999	$	1,888	$	992
Years 2003 and 2004		62,344		49,747		6,309		1,730		221		1,623		1,489		1,225
Year 2005		88,431		66,895		6,451		3,236		831		3,768		3,659		3,591
Year 2006		113,211		90,157		9,821		5,471		1,740		2,479		1,759		1,784
Years 2007, 2008 and 2009		97,063		79,950		2,874		2,774		839		3,181		3,352		4,093
Years 2010, 2011, 2012 2013 and 2014		193,562		180,558		4,088		1,224		106		1,597		1,281		4,708
		622,949		522,238		35,374		17,595		4,274		13,647		13,428		16,393
Non-traditional		37,775		32,886		1,084		783		259		1,047		1,667		49
Loss mitigation program		89,583		9,249		1,665		789		628		1,022		980		75,250
		750,307		564,373		38,123		19,167		5,161		15,716		16,075		91,692
Home equity secured personal loans		733		607		-		-		-		-		126		-
GNMA's buy-back option program		40,066		-		-		-		8,825		18,512		12,729		-
		791,106		564,980		38,123		19,167		13,986		34,228		28,930		91,692
Consumer
Credit cards		17,857		17,022		238		189		140		268		-		-
Overdrafts		340		318		20		2		-		-		-		-
Unsecured personal lines of credit		2,051		1,823		67		132		-		26		3		-
Unsecured personal loans		138,608		135,169		1,586		614		579		22		-		638
Cash collateral personal loans		17,026		16,644		214		132		36		-		-		-
		175,882		170,976		2,125		1,069		755		316		3		638
Auto and Leasing		542,892		475,120		43,537		15,956		5,662		2,617		-		-
		1,509,880		1,211,076		83,785		36,192		20,403		37,161		28,933		92,330
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		43,682		40,053		1,625		678		483		843		-		-
Personal loans		3,602		3,293		160		83		32		34		-		-
		47,284		43,346		1,785		761		515		877		-		-
Auto		210,808		193,762		11,372		4,137		1,209		328		-		-
		258,092		237,108		13,157		4,898		1,724		1,205		-		-
Total	$	1,767,972	$	1,448,184	$	96,942	$	41,090	$	22,127	$	38,366	$	28,933	$	92,330

	December 31, 2013
	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	$	76,512	$	64,743	$	6,594	$	1,634	$	868	$	1,082	$	1,458	$	133
Years 2003 and 2004		65,117		56,283		4,722		1,938		56		1,437		352		329
Year 2005		89,541		74,016		8,414		2,119		1,198		3,037		573		184
Year 2006		120,322		99,243		12,055		4,312		1,148		2,755		515		294
Years 2007, 2008 and 2009		101,150		91,920		3,464		1,104		1,264		2,844		554		-
Years 2010, 2011, 2012 and 2013		149,546		134,577		3,192		1,609		115		974		989		8,090
		602,188		520,782		38,441		12,716		4,649		12,129		4,441		9,030
Non-traditional		42,102		35,168		3,217		1,162		-		1,324		833		398
Loss mitigation program		86,318		7,762		1,376		149		624		312		1,029		75,066
		730,608		563,712		43,034		14,027		5,273		13,765		6,303		84,494
Home equity secured personal loans		736		598		-		-		-		126		12		-
GNMA's buy-back option program		34,921		-		-		-		7,670		14,425		12,826		-
		766,265		564,310		43,034		14,027		12,943		28,316		19,141		84,494
Consumer
Credit cards		15,241		14,555		287		168		118		113		-		-
Overdrafts		372		322		46		4		-		-		-		-
Unsecured personal lines of credit		1,981		1,844		33		38		25		34		7		-
Unsecured personal loans		94,560		92,102		1,272		399		300		39		13		435
Cash collateral personal loans		15,590		15,223		324		43		-		-		-		-
		127,744		124,046		1,962		652		443		186		20		435
Auto and Leasing		379,874		339,817		25,532		9,437		3,397		1,691		-		-
		1,273,883		1,028,173		70,528		24,116		16,783		30,193		19,161		84,929
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		52,199		46,713		2,217		1,200		828		1,241		-		-
Personal loans		3,975		3,681		196		7		60		31		-		-
		56,174		50,394		2,413		1,207		888		1,272		-		-
Auto		301,584		283,825		12,534		3,616		1,095		514		-		-
		357,758		334,219		14,947		4,823		1,983		1,786		-		-
Total	$	1,631,641	$	1,362,392	$	85,475	$	28,939	$	18,766	$	31,979	$	19,161	$	84,929

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Organization, Consolidation and Basis of Presentation

9 Months Ended

Sep. 30, 2014

Nature of Operations and Summary of Significanrt Accounting Policies

Nature Of Operations

NOTE 1 –ORGANIZATION, CONSOLIDATION AND BASIS OF PRESENTATION

Nature of Operations

OFG Bancorp (the “Company”) is a publicly-owned financial holding company incorporated under the laws of the Commonwealth of Puerto Rico. The Companyoperates through various subsidiaries including, a commercial bank, Oriental Bank (or the “Bank”), a securities broker-dealer, Oriental Financial Services Corp. (“Oriental Financial Services”), an insurance agency, Oriental Insurance, Inc. (“Oriental Insurance”) and a retirement plan administrator, Caribbean Pension Consultants, Inc. (“CPC”).Through these subsidiaries and their respective divisions, the Company provides a wide range of banking and financial services such as commercial, consumer and mortgage lending,auto loans,financial planning, insurance sales, money management and investment banking and brokerage services, as well as corporate and individual trust services.On April 25, 2013, the Company changed its corporate name from Oriental Financial Group Inc. to OFG Bancorp.

On April 30, 2010, the Bank acquired certain assets and assumed certain deposits and other liabilities ofEurobank, a Puerto Rico commercial bank, in an FDIC-assisted acquisition.On December 18, 2012, the Company acquired a group of Puerto Rico based entities that includedBanco Bilbao VizcayaArgentaria Puerto Rico (“BBVAPR”), a Puerto Rico commercial bank, as well as a securities broker-dealer and an insurance agency, which is referred toherein as the “BBVAPR Acquisition.” The businesses acquired in these acquisitions have been integrated with the Company's existing business.

Significant Accounting Policies

Recent Accounting Developments

In August 2014, the Financial Accounting Standard Board (“FASB”) issued a new going concern standard, which requires management to assessat each interim and annual reporting period whether substantial doubt exists about the company's ability to continue as a going concern. Substantial doubt exists if it is probable (the same threshold that is used for contingencies) that the company will be unable to meet its obligations as they become due within one year after the date the financial statements are issued or available to be issued (assessment date). Management needs to consider known (and reasonably knowable) events and conditions at the assessment date. For all entities, this standard is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016, with earlier adoption permitted. The adoption of this standard will have no material impact on our financial position or results of operations.

In August 2014, FASB issued new guidance requiring creditors to classify certain foreclosed, government-guaranteed, mortgage loans as receivables. The receivable is measured at the amount expected to be recovered under the guarantee, which is not treated as a separate unit of account.For publicbusiness entities, this guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2014, with earlier adoption permitted if the entity already has adopted Accounting Standards Update (“ASU”) 2014-04. An entity should adopt the amendments in this update using either a prospectivetransition method or a modified retrospective transition method. We are currently evaluating the impact that the adoption of this guidance will have on our financial position and results of operations.

Other than the accounting pronouncements disclosed above, there was no other new accounting pronouncement issued during the third quarter of 2014 that could have a material impact on the Company's financial position, operating results or financials statement disclosures.

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Allowance for Loan and Lease Losses (Tables)

9 Months Ended

Sep. 30, 2014

Loans Receivable [Abstract]

Allowance for Credit Losses on Financing Receivables [Table Text Block]

The composition of the Company's allowance for loan and lease losses at September 30, 2014 and December 31, 2013 was as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Allowance for loans and lease losses on non-covered loans:
Originated and other loans and leases held for investment:
Mortgage	$	18,872	$	19,937
Commercial		9,112		14,897
Consumer		8,709		6,006
Auto and leasing		13,404		7,866
Unallocated		182		375
		50,279		49,081
Acquired loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		270		926
Consumer		1,031		-
Auto		3,159		1,428
		4,460		2,354
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy)
Commercial		10,115		1,713
Consumer		5		418
Auto		-		732
		10,120		2,863
		64,859		54,298
Allowance for loans and lease losses on covered loans:
Loans secured by 1-4 family residential properties		15,252		12,495
Commercial and other construction		46,586		39,619
Consumer		389		615
		62,227		52,729
Total allowance for loan and lease losses	$	127,086	$	107,027

Originated and Other Loans and Leases Held for Investment

The following tables present the activity in our allowance for loan and lease losses and the related recorded investment of the associated loans for our originated and other loans held for investment portfolio by segment for the periods indicated:

	Quarter Ended September 30, 2014
							Auto and
	Mortgage		Commercial		Consumer		Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	19,062	$	12,423	$	7,887	$	11,127	$	139	$	50,638
Charge-offs		(1,563)		(1,081)		(1,585)		(7,393)		-		(11,622)
Recoveries		138		56		66		2,434		-		2,694
Provision (recapture) for non-covered originated and other loan and lease losses		1,235		(2,286)		2,341		7,236		43		8,569
Balance at end of period	$	18,872	$	9,112	$	8,709	$	13,404	$	182	$	50,279
	Nine-Month Period Ended September 30, 2014
							Auto and
	Mortgage		Commercial		Consumer		Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	19,937	$	14,897	$	6,006	$	7,866	$	375	$	49,081
Charge-offs		(3,764)		(2,043)		(3,820)		(17,994)		-		(27,621)
Recoveries		374		269		457		6,094		-		7,194
Provision (recapture) for non-covered originated and other loan and lease losses		2,325		(4,011)		6,066		17,438		(193)		21,625
Balance at end of period	$	18,872	$	9,112	$	8,709	$	13,404	$	182	$	50,279

	September 30, 2014
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on non-covered originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	7,932	$	1,108	$	-	$	-	$	-	$	9,040
Collectively evaluated for impairment		10,940		8,004		8,709		13,404		182		41,239
Total ending allowance balance	$	18,872	$	9,112	$	8,709	$	13,404	$	182	$	50,279
Loans:
Individually evaluated for impairment	$	91,692	$	226,583	$	-	$	-	$	-	$	318,275
Collectively evaluated for impairment		699,414		990,652		175,882		542,892		-		2,408,840
Total ending loan balance	$	791,106	$	1,217,235	$	175,882	$	542,892	$	-	$	2,727,115

	Quarter Ended September 30, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	21,375	$	17,624	$	2,341	$	3,641	$	720	$	45,701
Charge-offs		(1,758)		(2,234)		(465)		(1,305)		-		(5,762)
Recoveries		-		28		37		639		-		704
Provision for non-covered originated and other loan and lease losses		1,374		(703)		2,915		3,143		201		6,930
Balance at end of period	$	20,991	$	14,715	$	4,828	$	6,118	$	921	$	47,573
	Nine-Month Period Ended September 30, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	21,092	$	17,072	$	856	$	533	$	368	$	39,921
Charge-offs		(33,465)		(5,678)		(1,034)		(2,105)		-		(42,282)
Recoveries		-		291		143		855		-		1,289
Provision for non-covered originated and other loan and lease losses		33,364		3,030		4,863		6,835		553		48,645
Balance at end of period	$	20,991	$	14,715	$	4,828	$	6,118	$	921	$	47,573

	December 31, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	8,708	$	1,431	$	-	$	-	$	-	$	10,139
Collectively evaluated for impairment		11,229		13,466		6,006		7,866		375		38,942
Total ending allowance balance	$	19,937	$	14,897	$	6,006	$	7,866	$	375	$	49,081
Loans:
Individually evaluated for impairment	$	84,494	$	28,145	$	-	$	-	$	-	$	112,639
Collectively evaluated for impairment		681,771		1,099,512		127,744		379,874		-		2,288,901
Total ending loans balance	$	766,265	$	1,127,657	$	127,744	$	379,874	$	-	$	2,401,540

Acquired 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 non-covered acquiredloan portfolio, excluding loans accounted for under ASC 310-30, for the periods indicated

	Quarter Ended September 30, 2014
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	464	1	$	338	$	2,642	$	-	$	3,444
Charge-offs		(228)			(1,432)		(1,748)		-		(3,408)
Recoveries		35			139		519		-		693
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-20		(1)			1,986		1,746		-		3,731
Balance at end of period	$	270		$	1,031	$	3,159	$	-	$	4,460
	Nine-Month Period Ended September 30, 2014
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	926	1	$	-	$	1,428	$	-	$	2,354
Charge-offs		(512)			(5,442)		(4,414)		-		(10,368)
Recoveries		65			363		1,504		-		1,932
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-20		(209)			6,110		4,641		-		10,542
Balance at end of period	$	270		$	1,031	$	3,159	$	-	$	4,460

	September 30, 2014
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on non-covered acquired loans accounted for under ASC 310-20:
Ending allowance balance attributable to loans:
Collectively evaluated for impairment		270		1,031		3,159		-		4,460
Total ending allowance balance	$	270	$	1,031	$	3,159	$	-	$	4,460
Loans:
Collectively evaluated for impairment		26,984		47,284		210,808		-		285,076
Total ending loan balance	$	26,984	$	47,284	$	210,808	$	-	$	285,076

	Quarter Ended September 30, 2013
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	924	$ 1	$	-	$	-	$	-	$	924
Charge-offs		-			(1,233)		(1,598)		-		(2,831)
Recoveries		6			88		884		-		978
Provision (recapture)for non-covered acquired loan and lease losses accounted for under ASC 310-20		431			1,145		1,394		-		2,970
Balance at end of period	$	1,361		$	-	$	680	$	-	$	2,041
	Nine-Month Period Ended September 30, 2013
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	-	$ 1	$	-	$	-	$	-	$	-
Charge-offs		(25)			(3,847)		(4,723)		-		(8,595)
Recoveries		6			932		3,000		-		3,938
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-20		1,380			2,915		2,403		-		6,698
Balance at end of period	$	1,361		$	-	$	680	$	-	$	2,041

	December 31, 2013
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on non-covered acquired loans accounted for under ASC 310-20:
Ending allowance balance attributable to loans:
Collectively evaluated for impairment		926		-		1,428		-		2,354
Total ending allowance balance	$	926	$	-	$	1,428	$	-	$	2,354
Loans:
Collectively evaluated for impairment		77,681		56,174		301,584		-		435,439
Total ending loan balance	$	77,681	$	56,174	$	301,584	$	-	$	435,439

The following tables present the activity in our allowance for loan losses and related recorded investment of the associated loans in our non-covered acquiredloan portfolio accounted for under ASC 310-30, for the periods indicated:

	Quarter Ended September 30, 2014
	Mortgage			Commercial			Construction			Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for non-covered loans accounted for under ASC 310-30:
Balance at beginning of period	$	-	1	$	6,216	1	$	-	$ 1	$	62	$	-	$	6,278
Provision(recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-30		-			3,899			-			(57)		-		3,842
Balance at end of period	$	-		$	10,115		$	-		$	5	$	-	$	10,120
	Nine-Month Period Ended September 30, 2014
	Mortgage			Commercial			Construction			Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for non-covered loans accounted for under ASC 310-30:
Balance at beginning of period	$	-	1	$	1,713	1	$	-	1	$	418	$	732	$	2,863
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-30		-			8,402			-			(413)		(732)		7,257
Balance at end of period	$	-		$	10,115		$	-		$	5	$	-	$	10,120

Allowance For Credit Losses On Financing Receivables Covered Loans [Table Text Block]

The changes in the allowance for loan and lease losses on covered loans for the quarters and nine-month periodsended September 30, 2014and 2013 were as follows:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Balance at beginning of the period	$	59,515	$	53,992	$	52,729	$	54,124
Provision for covered loan and lease losses, net		1,115		3,074		4,339		4,956
FDIC shared-loss portion of provision for (recapture of)
covered loan and lease losses, net		1,597		(511)		5,159		(2,525)
Balance at end of the period	$	62,227	$	56,555	$	62,227	$	56,555

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Deposits and Related Interest (Deposits by Components) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Deposits, by Component, Alternative [Abstract]
Noninterest-bearing demand deposit	$ 734,449	$ 744,327
Interest-bearing saving and demand deposits	2,566,952	2,489,971
Individual Retirement Account	314,813	347,262
Retail certificates of deposists	455,286	568,367
Institutional certificates of deposits	328,031	405,224
Total Core Deposits	4,399,531	4,555,151
Brokered Deposists	669,644	828,114
Deposits, Total	$ 5,069,175	$ 5,383,265

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Fair value (Estimated fair value and carrying value) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Assets, Fair Value Disclosure [Abstract]
Available-for-sale Securities	$ 1,273,879		$ 1,588,425
Held to maturity Fair Value	144,217		0
Federal Home Loan Bank (FHLB) stock	21,189		24,450
Other Investments	65		65
Derivative Assets	8,445		20,502
Servicing Assets	13,986		13,801
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	11,414		14,937
Assets,Carrying Value [Abstract]
Total cash and cash equivalents	671,239		621,269	641,576		855,235
Restricted Cash And Cash Equivalents	32,907		82,199
Securities Purchased under Agreements to Resell	0		60,000
Trading Securities	1,687		1,869
Non-covered loans, net of allowance for loan and lease losses	4,528,452		4,615,929
Covered, net	311,693		356,961
FDIC Indemnification Asset	120,619	143,660	189,240	225,582	253,379	302,295
Accrued interest receivable	19,665		18,734
Liabilities,Carrying Value Disclosure [Abstract]
Deposits, Total	5,069,175		5,383,265
Securities Sold under Agreements to Repurchase	1,012,228		1,267,618
Subordinated capital notes	101,190		100,010
Securities Purchased But Not Yet Received	30,057		0	0
Accrued expenses and other liabilities	159,541		144,424
Fair Value, Inputs, Level 1 [Member]
Assets, Fair Value Disclosure [Abstract]
Cash and Cash Equivalents, Fair Value Disclosure	671,239		621,269
Restricted Cash, at Fair Value	32,907		82,199
Assets,Carrying Value [Abstract]
Total cash and cash equivalents	671,239		621,269
Restricted Cash And Cash Equivalents	32,907		82,199
Fair Value, Inputs, Level 2 [Member]
Assets, Fair Value Disclosure [Abstract]
Federal Funds Sold and Securities Borrowed or Purchased under Agreements to Resell, Fair Value Disclosure	0		60,000
Available-for-sale Securities	1,273,879		1,568,745
Held to maturity Fair Value	144,217		0
Federal Home Loan Bank (FHLB) stock	21,189		24,450
Other Investments	65		65
Derivative Assets	2,683		4,072
Receivables, Fair Value Disclosure	11,414		14,937
Liabilities, Fair Value Disclosure [Abstract]
Securities Purchased But Not Received, Fair Value	30,057		0
Assets,Carrying Value [Abstract]
Securities Purchased under Agreements to Resell	0		60,000
Trading Securities	1,687		1,869
Investment securities AFS , carrying value	1,273,879		1,568,745
Investment held for sale, carrying amount	144,305		0
Federal Home Loan Bank Stock at carrying value	21,189		24,450
Other Investment, Carrying Value	65		65
Derivative Assets, carrying value	2,683		4,072
Liabilities,Carrying Value Disclosure [Abstract]
Securities Purchased But Not Yet Received	30,057		0
Derivative liabilities at carrying value	11,414		14,937
Fair Value, Inputs, Level 3 [Member]
Assets, Fair Value Disclosure [Abstract]
Available-for-sale Securities	0		19,680
Non-covered loans, net	4,486,738		4,857,505
Covered loans, net	365,503		459,444
Derivative Assets	5,762		16,430
FDIC Indemnification Asset Fair Value Disclosure	83,995		152,965
Receivables, Fair Value Disclosure	19,665		18,734
Servicing Assets	13,986		13,801
Liabilities, Fair Value Disclosure [Abstract]
Deposits, Fair Value Disclosure	5,053,119		5,409,540
Securities sold under agreements to repurchase	1,058,042		1,323,903
Advances from FHLB	340,043		335,324
Notes Payable Fair Value Disclosure	3,865		3,638
Subordinated capital notes	91,061		99,316
Derivative liabilities	5,588		15,736
Accrued expenses and other liabilities	159,541		144,424
Assets,Carrying Value [Abstract]
Investment securities AFS , carrying value	0		19,680
Non-covered loans, net of allowance for loan and lease losses	4,545,209		4,662,458
Covered, net	311,693		356,961
Derivative Assets, carrying value	5,762		16,430
FDIC Indemnification Asset	120,619		189,240
Accrued interest receivable	19,665		18,734
Servicing assets, carrying value	13,986		13,801
Liabilities,Carrying Value Disclosure [Abstract]
Deposits, Total	5,069,175		5,383,265
Securities Sold under Agreements to Repurchase	1,012,228		1,267,618
Advances from FHLB	334,787		336,143
Term Notes	3,872		3,663
Subordinated capital notes	101,190		100,010
Accrued expenses and other liabilities	159,541		144,424
Derivative liabilities at carrying value	$ 5,588		$ 15,736

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2014

Stockholders' Equity [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

The Company's and the Bank's actual capital amounts and ratios as of September 30, 2014 and December 31, 2013 are as follows:

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio		Amount	Ratio
	(Dollars in thousands)
Company Ratios
As of September 30, 2014
Total capital to risk-weighted assets	$	858,356	17.50%	$	392,465	8.00%	$	490,581	10.00%
Tier 1 capital to risk-weighted assets	$	782,797	15.96%	$	196,233	4.00%	$	294,349	6.00%
Tier 1 capital to average total assets	$	782,797	10.51%	$	297,984	4.00%	$	372,480	5.00%
As of December 31, 2013
Total capital to risk-weighted assets	$	827,459	16.16%	$	409,514	8.00%	$	511,893	10.00%
Tier 1 capital to risk-weighted assets	$	736,106	14.38%	$	204,757	4.00%	$	307,136	6.00%
Tier 1 capital to average total assets	$	736,106	9.06%	$	324,910	4.00%	$	406,138	5.00%

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Bank Ratios
As of September 30, 2014
Total capital to risk-weighted assets	$	813,760	16.66%	$	390,644	8.00%	$	488,305	10.00%
Tier 1 capital to risk-weighted assets	$	738,482	15.12%	$	195,322	4.00%	$	292,983	6.00%
Tier 1 capital to average total assets	$	738,482	9.99%	$	295,673	4.00%	$	369,592	5.00%
As of December 31, 2013
Total capital to risk-weighted assets	$	779,413	15.30%	$	407,637	8.00%	$	509,547	10.00%
Tier 1 capital to risk-weighted assets	$	688,350	13.51%	$	203,819	4.00%	$	305,728	6.00%
Tier 1 capital to average total assets	$	688,350	8.54%	$	322,395	4.00%	$	402,993	5.00%

Schedule of Treasury Stock by Class [Table Text Block]

The following table presents the shares repurchased for each month in the nine-month period ended September 30, 2014, excluding the months of March, April, May, June, Julyand September of 2014, during which no shares were purchased as part of the stock repurchase program:

	Total number of				Dollar amount of
	shares purchased as		Average		shares repurchased
		part of stock	price paid		(excluding
	repurchase programs		per share		commissions paid)
						(In thousands)
Period
January 2014		57,700	$	14.73	$	850
February 2014		649,700		14.66		9,522
August 2014		100		15.50		2
Nine-Month Period Ended September 30, 2014		707,500	$	14.66	$	10,374

The activity in connection with common shares held in treasury by the Company for the nine-month periods ended September 30, 2014 and 2013 is set forth below

	Nine-Month Period Ended September 30,
	2014			2013
		Dollar			Dollar
	Shares	Amount		Shares	Amount
	(In thousands, except shares data)
Beginning of period	7,030,101	$	80,642	7,090,597	$	81,275
Common shares used upon lapse of restricted stock units	(36,294)		(384)	(53,178)		(556)
Common shares repurchased as part of the stock repurchase program	707,500		10,394	-		-
Common shares used to match defined contribution plan, net	-		-	(7,318)		(77)
End of period	7,701,307	$	90,652	7,030,101	$	80,642

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Loans Receivable (Narratives) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Dec. 31, 2013
Accounts Notes And Loans Receivable Line Items
Financing Receivable Modifications Recorded Investment Not Included In Non Accrual	$ 273.6	$ 273.6	$ 66.5
Loans Granted To Puerto Rico Government	458.0	458.0	515.4
Acquired Loans Under ASC 310-30 granted to the Puerto Rico Government	168.7	168.7	180.5
Mortgage held for sale reclassified to mortgage held for investment	25.8	25.8
Line Of Credit Facility Maximum Borrowing Capacity to Puerto Rico Government	647.9	647.9	763.4
Line Of Credit Facility Amount Outstanding to Puerto Rico Government	626.8	626.8	696.0
Credit Facilities Granted to the Puerto Rico Public Corporation	382.1	382.1
Total four bank syndicate revolving line of credit granted to the Government of Puerto Rico	550	550
Unpaid principal balance of the revolving line of credit granted to the Government of Puerto Rico	200.0	200.0
Non-performing residential mortgage loan accounted under ASC 310-30 sold, carrying value	$ 19.7
Extended maturity date of the revolving line of credit granted to the Government of Puerto Rico		Mar. 31, 2015

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FDIC Asset and True-up Payment Obligation (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014
FDIC-Assisted Acquisition [Abstract]
Percent Of Losses Fdic Absorbs	80.00%	80.00%
Percent Of Losses Recoveries Fdic Shares	80.00%	80.00%
Acquisition Date		Apr. 30, 2010
True-Up Payment Description		Also in connection with the FDIC assisted acquisition, the Bank agreed to make a true-up payment, also known as clawback liability or clawback provision, to the FDIC on the date that is 45 days following the last day (such day, the “True-Up Measurement Date”) of the final shared-loss month, or upon the final disposition of all covered assets under the shared-loss agreements in the event losses thereunder fail to reach expected levels. Under the shared-loss agreements, the Bank will pay to the FDIC 50% of the excess, if any, of: (i) 20% of the Intrinsic Loss Estimate of $906.0 million (or $181.2 million) (as determined by the FDIC) less (ii) the sum of: (A) 25% of the asset discount (per bid) (or $227.5 million); plus (B) 25% of the cumulative shared-loss payments (defined as the aggregate of all of the payments made or payable to the Bank minus the aggregate of all of the payments made or payable to the FDIC); plus (C) the sum of the period servicing amounts for every consecutive twelve-month period prior to and ending on the True-Up Measurement Date in respect of each of the shared-loss agreements during which the shared-loss provisions of the applicable shared-loss agreement is in effect (defined as the product of the simple average of the principal amount of shared-loss loans and shared-loss assets at the beginning and end of such period times 1%)
Additional amortization of the FDIC indemnification asset	$ 2.6	$ 7.7
Claimable losses on non-single family residential loans	$ 84.3	$ 84.3

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Consolidated Statements of Financial Condition (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Cash and cash equivalents
Cash and Due from Banks	$ 663,462	$ 614,302
Money market investments	7,777	6,967
Total cash and cash equivalents	671,239	621,269
Restricted Cash	32,907	82,199
Securities purchased under agreements to resell	0	60,000
Investments:
Trading Securities, at fair value	1,687	1,869
Investment securities available-for-sale, at fair value	1,273,879	1,588,425
Investment securities held-to-maturity, at amortized cost	144,305	0
Federal Home Loan Bank (FHLB) stock, at cost	21,189	24,450
Other investments	65	65
Total investments	1,441,125	1,614,809
Loans:
Mortgage loans held-for-sale, at lower of cost or fair value	16,757	46,529
Non-covered loans, net of allowance for loan and lease losses	4,528,452	4,615,929
Covered loans, net of allowance for loan and lease losses	311,693	356,961
Total loans, net	4,856,902	5,019,419
Other asset
FDIC indemnification asset	120,619	189,240
Foreclosed real estate covered under shared-loss agreements with the FDIC	49,814	33,209
Foreclosed real estate not covered under shared-loss agreements with the FDIC	50,750	56,815
Accrued interest receivable	19,665	18,734
Deferred tax asset, net	121,217	137,564
Premises and equipment, net	82,099	82,903
Customers' liability on acceptances	21,077	23,042
Servicing Assets	13,986	13,801
Derivative assets	8,445	20,502
Goodwill	86,069	86,069
Other assets	97,425	98,440
Total assets	7,673,339	8,158,015
Deposits:
Demand deposits	2,132,073	2,138,005
Savings accounts	1,263,115	1,194,567
Tme Deposits	1,673,987	2,050,693
Total deposits	5,069,175	5,383,265
Borrowings:
Securities sold under agreements to repurchase	1,012,228	1,267,618
Advances from FHLB	334,787	336,143
Subordinated capital notes	101,190	100,010
Other borrowings	3,872	3,663
Total borrowings	1,452,077	1,707,434
Securities Purchased But Not Yet Received	30,057	0
Derivative liabilities	11,414	14,937
Acceptances executed and outstanding	21,077	23,042
Accrued expenses and other liabilities	159,541	144,424
Total liabilities	6,743,341	7,273,102
Stockholders' equity:
Preferred Stock	92,000	92,000
Convertible Preferred Stock	84,000	84,000
Common stock	52,761	52,707
Additional paid-in capital	539,522	538,071
Legal surplus	68,437	61,957
Retained earnings	170,519	133,629
Treasury stock, at cost	(90,652)	(80,642)
Accumulated other comprehensive income, net of tax, Total	13,411	3,191
Total stockholders' equity	929,998	884,913
Total liabilities and stockholders' equity	$ 7,673,339	$ 8,158,015

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis 1 [Table Text Block]

Assets and liabilities measured at fair value on a recurring and non-recurring basis, including financial liabilitiesfor which the Company has elected the fair value option, are summarized below:

	September 30, 2014
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	1,273,879	$	-	$	1,273,879
Money market investments		7,777		-		-		7,777
Derivative assets		-		2,683		5,762		8,445
Servicing assets		-		-		13,986		13,986
Derivative liabilities		-		(11,414)		(5,588)		(17,002)
	$	7,777	$	1,265,148	$	14,160	$	1,287,085
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	226,791	$	226,791
Foreclosed real estate		-		-		100,564		100,564
Other repossessed assets		-		-		21,733		21,733
	$	-	$	-	$	349,088	$	349,088

	December 31, 2013
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	1,568,745	$	19,680	$	1,588,425
Securities purchased under agreements to resell		-		60,000		-		60,000
Money market investments		6,967		-		-		6,967
Derivative assets		-		4,072		16,430		20,502
Servicing assets		-		-		13,801		13,801
Derivative liabilities		-		(14,937)		(15,736)		(30,673)
	$	6,967	$	1,617,880	$	34,175	$	1,659,022
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	28,353	$	28,353
Foreclosed real estate		-		-		90,024		90,024
Other repossessed assets		-		-		12,583		12,583
	$	-	$	-	$	130,960	$	130,960

		Quarter Ended September 30, 2014
				Derivative				Derivative
		Other		asset				liability
		debt		(S&P				(S&P
		securities		Purchased		Servicing		Embedded
Level 3 Instruments Only		available-for-sale		Options)		assets		Options)		Total
	(In thousands)
Balance at beginning of period		$	-	$	6,580	$	13,970	$	(6,368)	$	14,182
Gains (losses) included in earnings			-		(818)		-		675		(143)
New instruments acquired			-		-		554		-		554
Principal repayments			-		-		(427)		-		(427)
Amortization			-		-		-		105		105
Changes in fair value of servicing assets			-		-		(111)		-		(111)
Balance at end of period		$	-	$	5,762	$	13,986	$	(5,588)	$	14,160
		Nine-Month Period Ended September 30, 2014
				Derivative				Derivative
		Other		asset				liability
		debt		(S&P				(S&P
		securities		Purchased		Servicing		Embedded
Level 3 Instruments Only		available-for-sale		Options)		assets		Options)		Total
	(In thousands)
Balance at beginning of period		$	19,680	$	16,430	$	13,801	$	(15,736)	$	34,175
Gains (losses) included in earnings			-		(10,668)		-		9,639		(1,029)
Changes in fair value of investment securities available for sale included in other comprehensive income			320		-		-		-		320
New instruments acquired			-		-		1,608		-		1,608
Principal repayments			(20,000)		-		(799)		-		(20,799)
Amortization			-		-		-		509		509
Changes in fair value of servicing assets			-		-		(624)		-		(624)
Balance at end of period		$	-	$	5,762	$	13,986	$	(5,588)	$	14,160

	Quarter Ended September 30, 2013
			Derivative				Derivative
	Other		asset				liability
	debt		(S&P				(S&P
	securities		Purchased			Servicing	Embedded
Level 3 Instruments Only	available-for-sale		Options)			assets	Options)		Total
Balance at beginning of period	$	20,058	$	16,020	$	12,994	$	(15,315)	$	33,757
Gains (losses) included in earnings		-		1,921		-		(1,994)		(73)
Changes in fair value of investment securities available for sale included in other comprehensive income		(552)		-		-		-		(552)
New instruments acquired		-		-		704		-		704
Principal repayments		-		-		(309)		-		(309)
Amortization		-		-		-		110		110
Changes in fair value of servicing assets		-		-		262		-		262
Balance at end of period	$	19,506	$	17,941	$	13,651	$	(17,199)	$	33,899
	Nine-Month Period Ended September 30, 2013
			Derivative					Derivative
	Other		asset					liability
	debt		(S&P					(S&P
	securities		Purchased			Servicing		Embedded
Level 3 Instruments Only	available-for-sale		Options)			assets		Options)		Total
Balance at beginning of period	$	20,012	$	13,233	$	10,795	$	(12,707)	$	31,333
Gains (losses) included in earnings		-		4,708		-		(4,807)		(99)
Changes in fair value of investment securities available for sale included in other comprehensive income		(506)		-		-		-		(506)
New instruments acquired		-		-		2,659		-		2,659
Principal repayments		-		-		(855)		-		(855)
Amortization		-		-		-		315		315
Changes in fair value of servicing assets		-		-		1,052		-		1,052
Balance at end of period	$	19,506	$	17,941	$	13,651	$	(17,199)	$	33,899

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Table Text Block]

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basisusing significant unobservable inputs (Level 3) for the quarters and nine-month periods ended September30, 2014 and 2013:

	September 30, 2014
	Fair Value		Valuation Technique	Unobservable Input	Range
	(In thousands)
Derivative assets (S&P Purchased Options)	$	5,762	Option pricing model	Implied option volatility	25.75%-36.88%
				Counterparty credit risk (based on 5-year credit default swap ("CDS") spread)	66.90% - 69.11%
Servicing assets	$	13,986	Cash flow valuation	Constant prepayment rate	5.60% - 13.28%
				Discount rate	10.00% - 12.00%
Derivative liability (S&P Embedded Options)	$	(5,588)	Option pricing model	Implied option volatility	25.75%-36.88%
				Counterparty credit risk (based on 5-year CDS spread)	66.90% - 69.11%
Collateral dependant impaired loans	$	26,809	Fair value of property or collateral	Appraised value less disposition costs	20.20% - 29.20%
Puerto Rico Electric Power Authority line of credit	$	199,982	Cash flow valuation	Discount rate	7.25
Foreclosed real estate	$	100,564	Fair value of property or collateral	Appraised value less disposition costs	20.20% - 29.20%
Other repossessed assets	$	21,733	Fair value of property or collateral	Appraised value less disposition costs	20.20% - 29.20%

Fair Value By Balance Sheet Grouping [Text Block]

The estimated fair value and carrying value of the Company's financial instruments at September 30, 2014 and December 31, 2013 is as follows:

	September 30,				December 31,
	2014				2013
	Fair		Carrying		Fair		Carrying
	Value		Value		Value		Value
	(In thousands)
Level 1
Financial Assets:
Cash and cash equivalents	$	671,239	$	671,239	$	621,269	$	621,269
Restricted cash		32,907		32,907		82,199		82,199
Level 2
Financial Assets:
Securities purchased under agreements to resell		-		-		60,000		60,000
Trading securities		1,687		1,687		1,869		1,869
Investment securities available-for-sale		1,273,879		1,273,879		1,568,745		1,568,745
Investment securities held-to-maturity		144,217		144,305		-		-
Federal Home Loan Bank (FHLB) stock		21,189		21,189		24,450		24,450
Other investments		65		65		65		65
Derivative assets		2,683		2,683		4,072		4,072
Financial Liabilities:
Securities purchased but not yet received		30,057		30,057		-		-
Derivative liabilities		11,414		11,414		14,937		14,937
Level 3
Financial Assets:
Investment securities available-for-sale		-		-		19,680		19,680
Total loans (including loans held-for-sale)
Non-covered loans, net		4,486,738		4,545,209		4,857,505		4,662,458
Covered loans, net		365,503		311,693		459,444		356,961
Derivative assets		5,762		5,762		16,430		16,430
FDIC indemnification asset		83,995		120,619		152,965		189,240
Accrued interest receivable		19,665		19,665		18,734		18,734
Servicing assets		13,986		13,986		13,801		13,801
Financial Liabilities:
Deposits		5,053,119		5,069,175		5,409,540		5,383,265
Securities sold under agreements to repurchase		1,058,042		1,012,228		1,323,903		1,267,618
Advances from FHLB		340,043		334,787		335,324		336,143
Other borrowings		3,865		3,872		3,638		3,663
Subordinated capital notes		91,061		101,190		99,316		100,010
Accrued expenses and other liabilities		159,541		159,541		144,424		144,424
Derivative liabilities		5,588		5,588		15,736		15,736

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Stockholders Equity (Narratives) (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Sep. 30, 2013
Stock Repurchase Program, Authorized Amount	$ 70,000,000
Treasury Stock, Value, Acquired, Cost Method		10,394,000	0
Stock Repurchase Program Remaining Authorized Repurchase Amount	23,200,000
Stock repurchase program remaining number of shares authorized to be repurchased	1,548,481	1,548,481
SharePrice	$ 14.98	$ 14.98
Preferred Stock [Member]
Issuance Costs Stock	13,600,000	13,600,000
Common Stock [Member]
Issuance Costs Stock	$ 10,100,000	$ 10,100,000

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Fair Value (Investment securities available-for-sale classified as level 3) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Amortized cost of investment securities available-for-sale	$ 1,249,769	$ 1,575,043
Investment securities available-for-sale, at fair value	1,273,879	1,588,425
Available for sale - Weighted Average Yield	2.96%	2.89%
Fair Value, Inputs, Level 3 [Member]
Schedule of Available-for-sale Securities [Line Items]
Investment securities available-for-sale, at fair value	$ 0	$ 19,680

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (USD $) In Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Preferred Stock Issuance Cost [Member]	Common Stock Issuance Cost [Member]	Legal Surplus [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning Balance at Dec. 31, 2012		$ 176,000	$ 52,671	$ 537,453			$ 52,143	$ 70,734	$ (81,275)	$ 55,880
Stock-based compensation expense				1,360
Exercised Stock Options			20	187
Lapsed restricted stock units				(728)					556
Stock Issuance Cost					(16)	(25)
Transfer from retained earnings/transfer to legal surplus							7,724	(7,724)
Net income	78,352							78,352
Cash dividends declared on common stock								(8,219)
Cash dividends declared on preferred stock								(10,396)
Stock purchased	0								0
Stock used to match defined contribution plan									77
Other comprehensive loss, net of tax	(45,048)									(45,048)
Ending Balance at Sep. 30, 2013	879,726	176,000	52,691	538,231			59,867	122,747	(80,642)	10,832
Beginning Balance at Jun. 30, 2013
Exercised Stock Options			20
Net income	19,621
Other comprehensive loss, net of tax	(4,935)
Ending Balance at Sep. 30, 2013	879,726	176,000	52,691
Beginning Balance at Dec. 31, 2013	884,913	176,000	52,707	538,071			61,957	133,629	(80,642)	3,191
Stock-based compensation expense				1,248
Exercised Stock Options			54	589
Lapsed restricted stock units				(386)					384
Stock Issuance Cost					0	0
Transfer from retained earnings/transfer to legal surplus							6,480	(6,480)
Net income	64,588							64,588
Cash dividends declared on common stock								(10,822)
Cash dividends declared on preferred stock								(10,396)
Stock purchased	10,394								(10,394)
Stock used to match defined contribution plan									0
Other comprehensive loss, net of tax	10,220									10,220
Ending Balance at Sep. 30, 2014	929,998	176,000	52,761	539,522			68,437	170,519	(90,652)	13,411
Beginning Balance at Jun. 30, 2014
Exercised Stock Options			54
Net income	19,532
Other comprehensive loss, net of tax	(8,344)
Ending Balance at Sep. 30, 2014	$ 929,998	$ 176,000	$ 52,761

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Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Loans and Leases Receivable, Related Parties [Roll Forward]
Balance	$ 24,151	$ 8,031	$ 18,963	$ 6,055
New loans	319	14,264	14,166	18,498
Repayments and sales	1,174	(3,289)	(7,485)	(5,315)
Credits of persons no longer considered related parties	0	0	0	(232)
Balance	$ 25,644	$ 19,006	$ 25,644	$ 19,006

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Loans Receivable (Accretable yield and non-accretable discount activity of covered loans) (Details) (Acquired Loans In An F D I C Assisted Transaction [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Acquired Loans In An F D I C Assisted Transaction [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	$ 128,061	$ 167,132	$ 162,959	$ 188,008
Accretion Accretable	(20,886)	(21,657)	(69,154)	(65,884)
Transfer from (to) non-accretable discount	2,809	23,070	16,179	46,421
Balance at end of period	109,984	168,545	109,984	168,545
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	85,224	192,259	129,477	237,555
Principal Losses	(4,475)	(7,762)	(35,358)	(29,707)
Transfer (to) from accretable yield	(2,809)	(23,070)	(16,179)	(46,421)
Balance at end of period	$ 77,940	$ 161,427	$ 77,940	$ 161,427

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Stockholders' Equity (Common shares held in treasury, activity) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Stockholders' Equity Note [Abstract]
Beginning of period	7,030,101	7,090,597
Common shares used for exercise of restricted stock units (Shares)	(36,294)	(53,178)
Common shares repurchased as part of the stock repurchase program (Shares)	707,500	0
Common shares used to match defined contribution plan, net	0	(7,318)
End of period	7,701,307	7,030,101
Beginning of period	$ 80,642	$ 81,275
Common shares used for exercise of restricted stock units (Value)	(384)	(556)
Stock purchased under the repurchase program	10,394	0
Common shares used to match defined contribution plan, net (Value)	0	(77)
End of period	$ 90,652	$ 80,642

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Other Assets (Tables)

9 Months Ended

Sep. 30, 2014

Other asset

Schedule of Accrued interest receivable [Table Text Block]

	September 30,		December 31,
	2014		2013
	(In thousands)
Non-covered loans	$	15,260	$	13,378
Investments		4,405		5,356
	$	19,665	$	18,734

Schedule of Other Assets [Table Text Block]

Other assets at September 30, 2014 and December 31, 2013 consist of the following

		September 30,		December 31,
	2014		2013
	(In thousands)
Prepaid expenses	$	18,375	$	15,439
Core deposit and customer relationship intangibles		10,285		11,912
Other repossessed assets		21,733		12,583
Mortgage tax credits		8,706		8,706
Investment in Statutory Trust		1,083		1,083
Accounts receivable and other assets		37,243		48,717
	$	97,425	$	98,440

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Loans Receivable (Troubled debt restructurings, Rolling Twelve Months) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended	15 Months Ended
	Sep. 30, 2014 number	Sep. 30, 2013 number
Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	15	30
Recored Investment	$ 1,739	$ 3,097
Commercial Loan [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	0	0
Recored Investment	0	0
Consumer Loan [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	2	0
Recored Investment	$ 5	$ 0

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2014

Disclosure Text Block Abstract

Comprehensive Income Note Text Block

NOTE 15-ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income, net of income tax, as of September 30, 2014 and December 31, 2013 consisted of:

	September 30,		December 31,
	2014		2013
	(In thousands)
Unrealized gain on securities available-for-sale which are not other-than-temporarily impaired	$	23,995	$	13,267
Income tax effect of unrealized gain on securities available-for-sale		(3,677)		(1,834)
Net unrealized gain on securities available-for-sale which are not other-than-temporarily impaired		20,318		11,433
Unrealized loss on cash flow hedges		(8,717)		(10,907)
Income tax effect of unrealized loss on cash flow hedges		1,810		2,665
Net unrealized loss on cash flow hedges		(6,907)		(8,242)
Accumulated other comprehensive income, net of taxes	$	13,411	$	3,191

The following table presents changes in accumulated other comprehensive income by component, net of taxes, for the quartersand nine-month periods ended September 30, 2014 and 2013

	Quarter Ended September 30,
	2014						2013
	Net unrealized		Net unrealized		Accumulated		Net unrealized		Net unrealized		Accumulated
	gains on		loss on		other		gains on		loss on		other
	securities		cash flow		comprehensive		securities		cash flow		comprehensive
	available-for-sale		hedges		income		available-for-sale		hedges		income
	(In thousands)
Beginning balance	$	29,759	$	(8,004)	$	21,755	$	25,400	$	(9,634)	$	15,766
Other comprehensive income (loss) before reclassifications		(9,452)		(559)		(10,011)		(5,113)		(1,509)		(6,622)
Amounts reclassified out of accumulated other comprehensive income		11		1,656		1,667		37		1,651		1,688
Other comprehensive income (loss)		(9,441)		1,097		(8,344)		(5,076)		142		(4,934)
Ending balance	$	20,318	$	(6,907)	$	13,411	$	20,324	$	(9,492)	$	10,832
	Nine-Month Period Ended September 30,
	2014						2013
	Net unrealized		Net unrealized		Accumulated		Net unrealized		Net unrealized		Accumulated
	gains on		loss on		other		gains on		loss on		other
	securities		cash flow		comprehensive		securities		cash flow		comprehensive
	available-for-sale		hedges		income		available-for-sale		hedges		income
	(In thousands)
Beginning balance	$	11,433	$	(8,242)	$	3,191	$	68,245	$	(12,365)	$	55,880
Other comprehensive income before reclassifications		8,727		(3,584)		5,143		(48,047)		(1,530)		(49,577)
Amounts reclassified out of accumulated other comprehensive income		158		4,919		5,077		126		4,403		4,529
Other comprehensive income (loss)		8,885		1,335		10,220		(47,921)		2,873		(45,048)
Ending balance	$	20,318	$	(6,907)	$	13,411		20,324	$	(9,492)	$	10,832

The following table presents reclassifications out of accumulated other comprehensive income forthe quarters and nine-month periodsended September 30, 2014 and 2013:

	Amount reclassified out of accumulated
	other comprehensive income
		Quarter Ended		Nine-Month Period	Affected Line Item in
		September 30, 2014		Ended September 30, 2014	Consolidated Statement
					of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	1,656	$	4,919	Net interest expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		11		158	Income tax expense
	$	1,667	$	5,077
	Amount reclassified out of accumulated
	other comprehensive income
		Quarter Ended		Nine-Month Period	Affected Line Item in
		September 30, 2013		Ended September 30, 2013	Consolidated Statement
					of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	1,651	$	4,403	Net interest expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		37		126	Income tax expense
	$	1,688	$	4,529

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Deposits and Related Interest (Tables)

9 Months Ended

Sep. 30, 2014

Deposits, by Component, Alternative [Abstract]

Deposits By Component [Table Text Block]

Total deposits as of September 30, 2014 and December 31, 2013consist of the following:

	September 30,		December 31,
	2014		2013
	(In thousands)
Non-interest bearing demand deposits	$	734,449	$	744,327
Interest-bearing savings and demand deposits		2,566,952		2,489,971
Individual retirement accounts		314,813		347,262
Retail certificates of deposit		455,286		568,367
Institutional certificates of deposit		328,031		405,224
Total core deposits		4,399,531		4,555,151
Brokered deposits		669,644		828,114
Total deposits	$	5,069,175	$	5,383,265

Interest Expense Domestic Deposit Liabilities [Table Text Block]

Interest expense for the quartersand nine-month periodsended September 30, 2014 and2013 was as follows:

	Quarter Ended September 30,					Nine-Month Period Ended September 30,
	2014		2013			2014		2013
	(In thousands)
Demand and savings deposits	$	4,003	$	5,596	$	13,834	$	16,994
Certificates of deposit		3,658		5,738		11,970		13,763
	$	7,661	$	11,334	$	25,804	$	30,757

Maturities Of Time Deposits [Table Text Block]

Excluding equity indexed options in the amount of $4.4million, which are used by the Company to manage its exposure to the S&P 500 Index, and also excluding accrued interest of $1.3million and unamortized deposit discount in the amount of $1.1million, the scheduled maturities of certificates of deposit at September 30, 2014are as follows:

	September 30, 2014
	(In thousands)
Within one year:
Three (3) months or less	$	342,429
Over 3 months through 1 year		590,965
		933,394
Over 1 through 2 years		454,186
Over 2 through 3 years		210,567
Over 3 through 4 years		50,067
Over 4 through 5 years		18,926
	$	1,667,140

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Stockholders' Equity (Shares repurchased under the stock repurchase program) (Details) (USD $) In Thousands, except Share data, unless otherwise specified			9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 January 2014 [Member]	Sep. 30, 2014 February 2014 [Member]	Sep. 30, 2014 Third Quarter [Member]	Sep. 30, 2014 August 2014 [Member]
Equity, Class of Treasury Stock [Line Items]
Common shares repurchased as part of the stock repurchase program (Shares)			57,700	649,700	707,500	100
Treasury Stock Acquired, Average Cost Per Share			$ 14.73	$ 14.66	$ 14.66	$ 15.50
Treasury Stock, Value	$ 90,652	$ 80,642	$ 850	$ 9,522	$ 10,374	$ 2

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Guarantees

9 Months Ended

Sep. 30, 2014

Guarantees [Abstract]

Guarantees [Text Block]

NOTE 17 – GUARANTEES

At September 30, 2014, the unamortized balance of the obligations undertaken in issuing the guarantees under standby letters of credit represented a liability of $37.1 million (December 31, 2013 - $38.6 million).

As a result of the BBVAPR Acquisition, the Company assumed a liability for residential mortgage loans sold subject to credit recourse, pursuant to FNMA's residential mortgage loan sales and securitization programs. At September 30, 2014 and December 31, 2013, the unpaid principal balance of residential mortgage loans sold subject to credit recourse was $98.4million and $122.3million, respectively.

The following table shows the changes in the Company's liability for estimated losses from these credit recourse agreements, included in the unaudited consolidated statements of financial condition during the quarters and nine-month periods ended September 30, 2014 and 2013.

	Quarter Ended September 30,					Nine-Month Period Ended September 30,
	2014		2013			2014		2013
	(In thousands)
Balance at beginning of period	$	1,310	$	2,460	$	1,955	$	2,460
Net charge-offs/terminations		(232)		-		(877)		-
Balance at end of period	$	1,078	$	2,460	$	1,078	$	2,460

The estimated losses to be absorbed under the credit recourse arrangements were recorded as a liability when the credit recoursewas assumed, and are updated on a quarterly basis. The expected loss, which represents the amount expected to be lost on a given loan, considers the probability of default and loss severity. The probability of default represents the probability that a loan in good standing would become 120 days delinquent, in which case the Company is obligated to repurchase the loan. At September 30,2014,$68.4 million or 70% of the recourse obligation will be extinguished during the next two years.

If a borrower defaults, pursuant to the credit recourse provided, the Company is required to repurchase the loan or reimburse the third party investor for the incurred loss. The maximum potential amount of future payments that the Company would be required to make under the recourse arrangements is equivalent to the total outstanding balance of the residential mortgage loans serviced with recourse and interest, if applicable. During the quarter andnine-month period ended September 30, 2014, the Company repurchased approximately $1.9million and $5.6millionof unpaid principal balance in mortgage loans subject to the credit recourse provisions. If a borrower defaults, the Company has rights to the underlying collateral securing the mortgage loan. The Company suffers losses on these mortgage loans when the proceeds from a foreclosure sale of the collateral property are less than the outstanding principal balance of the loan, any uncollected interest advanced, and the costs of holding and disposing the related property. At September 30, 2014 and December 31, 2013, the Company's liability for estimated credit losses related to loans sold with credit recourse amounted to $1.1 million (December 31, 2013 – $2.0 million).

When the Company sells or securitizes mortgage loans, it generally makes customary representations and warranties regarding the characteristics of the loans sold. The Company's mortgage operations division groups conforming mortgage loans into pools which are exchanged for FNMA and GNMA mortgage-backed securities, which are generally sold to private investors, or are sold directly to FNMA or other private investors for cash. As required under such mortgage backed securities programs, quality review procedures are performed by the Company to ensure that asset guideline qualifications are met. To the extent the loans do not meet specified characteristics, the Company may be required to repurchase such loans or indemnify for losses and bear any subsequent loss related to the loans. Repurchases during the quarter andnine-month period ended September 30, 2014 under the Company's representation and warranty arrangements, excluding mortgage loans subject to credit recourse provisions referred to above,approximated $4.1 million and$9.2million, respectively, in unpaid principal balance. A substantial amount of these loans are reinstated to performing status or have mortgage insurance, and thus the ultimate losses on the loans are not deemed significant.

During the quarterand nine-month period ended September 30, 2014, the Company recognized $115thousand and $261thousandin losses from the repurchase of residential mortgage loans sold subject to credit recourse,and $979 thousandand$1.9million in losses from the repurchase of residential mortgage loans as a result of breaches of the customary representations and warranties. During the quarter and nine-month period ended September 30, 2013, the Company did not recognized any losses from the repurchase of residential mortgage loans sold subject to credit recourse,but for the nine-month period ended September 30, 2013, recognized$477thousand in losses from the repurchase of residential mortgage loans as a result of breaches of the customary representations and warranties.

Servicing agreements relating to the mortgage-backed securities programs of FNMA and GNMA, and to mortgage loans sold or serviced to certain other investors, including the Federal Home Loan Mortgage Corporation (“FHLMC”), require the Company to advance funds to make scheduled payments of principal, interest, taxes and insurance, if such payments have not been received from the borrowers. At September 30, 2014, the Company serviced $1.2billion in mortgage loans for third-parties. The Company generally recovers funds advanced pursuant to these arrangements from the mortgage owner, from liquidation proceeds when the mortgage loan is foreclosed or, in the case of FHA/VA loans, under the applicable FHA and VA insurance and guarantees programs. However, in the meantime, the Company must absorb the cost of the funds it advances during the time the advance is outstanding. The Company must also bear the costs of attempting to collect on delinquent and defaulted mortgage loans. In addition, if a defaulted loan is not cured, the mortgage loan would be canceled as part of the foreclosure proceedings and the Company would not receive any future servicing income with respect to that loan. At September 30, 2014, the outstanding balance of funds advanced by the Company under such mortgage loan servicing agreements was approximately $319thousand (December 31, 2013 - $243thousand). To the extent the mortgage loans underlying the Company's servicing portfolio experience increased delinquencies, the Company would be required to dedicate additional cash resources to comply with its obligation to advance funds as well as incur additional administrative costs related to increases in collection efforts.

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Allowance for Loan and Lease Losses (Composition of the Company's allowance for loan and lease losses) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	$ 64,859		$ 54,298
Loans And Leases Receivable Allowance, Covered	62,227	59,515	52,729	56,555	53,992	54,124
Loans And Leases Receivable Allowance Covered and Not Covered	127,086		107,027
Non Covered Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	64,859		54,298
Originated Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	50,279		49,081
Originated Loans [Member] | Residential Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	18,872		19,937
Originated Loans [Member] | Commercial Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	9,112		14,897
Originated Loans [Member] | Consumer Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	8,709		6,006
Originated Loans [Member] | Auto and Leasing Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	13,404		7,866
Originated Loans [Member] | Unallocated Financing Receivables
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	182		375
Non-covered acquired loans accounted for under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	4,460		2,354
Non-covered acquired loans accounted for under ASC 310-20 | Commercial Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	270		926
Non-covered acquired loans accounted for under ASC 310-20 | Consumer Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	1,031		0
Non-covered acquired loans accounted for under ASC 310-20 | Auto and Leasing Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	3,159		1,428
Accounted for under ASC 310-30 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	10,120		2,863
Accounted for under ASC 310-30 [Member] | Commercial Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	10,115		1,713
Accounted for under ASC 310-30 [Member] | Consumer Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	5		418
Accounted for under ASC 310-30 [Member] | Automobile Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, non covered	0		732
Acquired Loans In An F D I C Assisted Transaction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans And Leases Receivable Allowance, Covered	62,227		52,729
Acquired Loans In An F D I C Assisted Transaction [Member] | Consumer Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans And Leases Receivable Allowance, Covered	389		615
Acquired Loans In An F D I C Assisted Transaction [Member] | Loans Secured by multi-family properties [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans And Leases Receivable Allowance, Covered	15,252		12,495
Acquired Loans In An F D I C Assisted Transaction [Member] | Commercial and Other Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans And Leases Receivable Allowance, Covered	$ 46,586		$ 39,619

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Commitments (Summarized credit-related financial instruments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Commitments and Contingencies [Abstract]
Commitments To Extend Credit	$ 476,523	$ 520,269
Commercial letters credit	1,193	1,096
Standby letters of credit and financial guarantees	37,145	38,577
Loans sold with recourse	98,433	122,291
Commitments To Sell Or Securitize Mortgage Loans	$ 34,650	$ 80,307

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net income	$ 64,588	$ 78,352
Adjustments to reconcile net income to net cash provied by (used in) operating activities:
Amortization of deferred loan origination fees, net of costs	2,065	733
Amortization of discount to fair value of acquired loan	9,914	8,239
Amortization of investment securities premiums, net of accretion of discounts	1,048	17,116
Amortization of core deposit and customer relationship intangibles	1,627	1,932
Amortization of fair value premium of acquired deposits	4,349	12,032
FDIC Loss Share (Expense) Income	53,776	48,801
Depreciation and amortization of premises and equipment	7,415	7,703
Deferred income taxes, net	20,418	(18,816)
Provision for covered and non-covered loan and lease losses, net	43,763	60,300
Stock-based compensation	1,248	1,360
(Gain) loss on:
Sale of securities	(4,366)	0
Sale of mortgage loans held for sale	(3,891)	(2,009)
Gain on sale of derivatives and on sale of TBA	584	224
Early extinguishment of debt	0	(1,061)
Foreclosed real estate	9,185	5,321
Sale of other repossessed asset	4,506	1,813
Sale of premises and equipment	(11)	0
Originations of loans held-for-sale	(130,547)	(239,804)
Proceeds from sale of loans held-for-sale	72,211	125,245
Net (increase) decrease in:
Trading securities	182	(1,629)
Accrued interest receivable	(931)	(4,802)
Servicing Assets	(185)	(2,856)
Other assets	8,538	15,984
Net increase (decrease) in:
Accrued interest on deposits and borrowings	(1,811)	(1,658)
Accrued expenses and other liabilities	(3,099)	13,937
Net cash used in operating activities	160,576	126,457
Purchases of:
Investment securities available-for-sale	(219,027)	(32,874)
Investment securities held-to-maturity	(115,396)
FHLB stock	(84,375)	(32,562)
Maturities and Redemptions of [Abstract]
Investment securities available-for-sale	429,939	477,610
Investments securities held-to-maturity	1,045	0
FHLB Stock	87,636	46,503
Proceeds from sale of:
Investment securities available for sale	189,249	120,526
Foreclosed real estate and other repossessed assets	33,915	44,754
Proceeds From Sale Of Loans Held For Investment	9,378	0
Premises and equipment	25	896
Origination and purchase of loans, excluding loans held-for-sale	(545,776)	(911,443)
Principal repayment of loans, including covered loans	561,479	806,676
Reimbursements from the FDIC on shared-loss agreements	31,537	32,732
Additions to premises and equipment	(6,626)	(6,747)
Net change in securities purchased under agreements to resell	60,000	(5,000)
Net change in restricted cash	49,292	(2,517)
Net cash provided by investing activities	482,295	538,554
Net increase (decrease) in:
Deposits	(306,917)	(96,552)
Short Term Borrowings	0	(92,210)
Securities sold under agreements to repurchase	(255,000)	(427,931)
FHLB advances, federal funds purchased, and other borrowings	(1,142)	(199,731)
Subordinated capital notes	1,180	(45,491)
Exercise of stock options and restricted units lapsed, net	641	207
Purchase of treasury stock	(10,394)	0
Termination of derivative instruments	0	1,483
Dividends paid on preferred stock	(10,396)	(10,226)
Dividends paid on common stock	(10,873)	(8,219)
Other financing activities	0	0
Net cash used in financing activities	(592,901)	(878,670)
Net change in cash and cash equivalents	49,970	(213,659)
Cash and cash equivalents at beginning of period	621,269	855,235
Cash and cash equivalents at end of period	671,239	641,576
Supplemental Cash Flow Disclosure and Schedule of Non-cash Activities:
Interest paid	63,082	64,272
Income Taxes Paid	1,839	378
Mortgage loans securitized into mortgage-backed securities	71,466	117,687
Securities Purchased But Not Yet Received	30,057	0
Transfer from loans to foreclosed real estate and other repossessed assets	67,296	65,716
Reclassification of loans held-for-investment portfolio to held-for-sale portfolio	5,268	42,289
Reclassification of loans held-for-sale portfolio to investment portfolio	25,801	0
Securities sold but not yet delivered	$ 0	$ 0

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Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) (USD $)	3 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Amortized cost of trading securities	$ 2,419,000	$ 2,448,000
Amortized cost of investment securities available-for-sale	1,249,769,000	1,575,043,000
Fair value of held to maturity securities	144,217,000	0
Allowance for loan and lease losses, non-covered	64,859,000	54,298,000
Allowance for loan and lease losses, covered	62,227,000	52,729,000
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, liquidation value	25	25
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	52,761,295	52,707,023
Common stock, shares outstanding	45,059,988	45,676,922
Treasury stock, at cost, shares	7,701,307	7,030,101
Tax effect on accumulated other comprehensive income (loss)	1,867,000	(831,000)
Series A Preferred Stock
Preferred stock, shares outstanding	1,340,000	1,340,000
Series B Preferred Stock
Preferred stock, shares outstanding	1,380,000	1,380,000
Series C Convertible Preferred Stock
Preferred stock, shares outstanding	84,000	84,000
Preferred stock, liquidation value	$ 1,000	$ 1,000
Series D Preferred Stock Member
Preferred stock, shares outstanding	960,000	960,000

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Borrowings

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Borrowings

NOTE 10— BORROWINGS

Securities Sold under Agreements to Repurchase

At September30, 2014, securities underlying agreements to repurchase were delivered to, and are being held by, the counterparties with whom the repurchase agreements were transacted. The counterparties have agreed to resell to the Company the same or similar securities at the maturity of these agreements.

At September 30, 2014and December 31, 2013, securities sold under agreements to repurchase (classified by counterparty), excluding accrued interest in the amount of $2.2millionand $2.6million, respectively,were as follows:

	September 30,				December 31,
	2014				2013
			Fair Value of				Fair Value of
	Borrowing		Underlying		Borrowing		Underlying
	Balance		Collateral		Balance		Collateral
	(In thousands)
JP Morgan Chase Bank NA		255,000		259,039		255,000		273,250
Credit Suisse Securities (USA) LLC		755,000		842,183		755,000		864,232
Deutsche Bank		-		-		255,000		272,053
Total	$	1,010,000	$	1,101,222	$	1,265,000	$	1,409,535

The following table shows a summary of the Company's repurchase agreements and their terms, excluding accrued interest in the amount of $2.2 million, at September 30, 2014:

			Weighted-
	Borrowing		Average		Maturity
Year of Maturity	Balance		Coupon	Settlement Date	Date
	(In thousands)
2014	$	85,000	0.675%	12/3/2012	12/3/2014
2015		255,000	0.840%	12/10/2012	6/13/2015
2016		170,000	1.500%	12/6/2012	12/8/2016
2017		500,000	4.780%	3/2/2007	3/2/2017
	$	1,010,000	2.831%

The following table presents therepurchase liabilityassociated with the repurchase agreement transactions (excluding accrued interest)by maturity. Also, it includes the carrying value and approximate market value of collateral (excluding accrued interest) at September 30, 2014 and December 31, 2013. The information excludes repurchase agreement transactions which were collateralized with securities or cash, or securities purchased under agreements to resell.

	September 30, 2014
					Market Value of Underlying Collateral
									CMOs		Obligations
			Weighted		FNMA and				issued by US		of US
	Repurchase		Average		FHLMC		GNMA		Government		Government
	Liability		Rate		Certificates		Certificates		Sponsored Agencies		Sponsored Agencies		Total
	(Dollars in thousands)
Less than 90 days		85,000		0.68%		95,420		2,061		-		-		97,481
Over 90 days		925,000		2.83%		1,003,070		671		-		-		1,003,741
Total	$	1,010,000		2.89%	$	1,098,490	$	2,732	$	-	$	-	$	1,101,222

	December 31, 2013
					Market Value of Underlying Collateral
									CMOs		Obligations
			Weighted		FNMA and				issued by US		of US
	Repurchase		Average		FHLMC		GNMA		Government		Government
	Liability		Rate		Certificates		Certificates		Sponsored Agencies		Sponsored Agencies		Total
	(Dollars in thousands)
Within 30 days	$	255,000		0.50%	$	216,201	$	-	$	48,923	$	6,929	$	272,053
Over 90 days		1,010,000		2.89%		1,018,632		3,000		45,100		3,720		1,070,452
Total	$	1,265,000		2.41%	$	1,234,833	$	3,000	$	94,023	$	10,649	$	1,342,505

Advances from the Federal Home Loan Bank of New York

Advances are received from the Federal Home Loan Bank of New York (the “FHLB-NY”) under an agreement whereby the Company is required to maintain a minimum amount of qualifying collateral with a fair value of at least 110% of the outstanding advances. At September 30, 2014 and December 31, 2013, these advances were secured by mortgage and commercial loans amounting to $1.2 billionand $1.3billion, respectively. Also, at September 30, 2014 and December 31, 2013, the Company had an additional borrowing capacity with the FHLB-NY of $653.5million and $674.2 million, respectively. At September 30, 2014 and December 31, 2013, the weighted average remaining maturity of FHLB's advances was 9.4months and11.3months, respectively.The original terms of these advances range between one dayand seven years, and the FHLB-NY does not have the right to exercise put options at par on any advances outstanding as of September 30, 2014.

The following table shows a summary of these advances and their terms, excluding accrued interest in the amount of $330thousand,at September 30, 2014:

			Weighted-
		Borrowing	Average		Maturity
Year of Maturity		Balance	Coupon	Settlement Date	Date
		(In thousands)
2014	$	25,000	0.36%	9/4/2014	10/6/2014
		50,000	0.37%	9/10/2014	10/10/2014
		100,000	0.36%	9/16/2014	10/16/2014
		25,000	0.32%	9/24/2014	10/24/2014
		25,000	0.30%	9/30/2014	10/30/2014
		39,641	0.37%	9/2/2014	10/1/2014
		264,641
2017		4,558	1.24%	4/3/2012	4/3/2017
2018		30,000	2.19%	1/16/2013	1/16/2018
		25,000	2.18%	1/16/2013	1/16/2018
		55,000
2020		10,259	2.59%	7/19/2013	7/20/2020
	$	334,458	0.74%

All of the advances referred to above with maturity dates up to the date of this report were renewed as one-month short-term advances.

Subordinated Capital Notes

Subordinated capital notes amounted to $101.2 million at September 30, 2014 and $100.0 million at December 31, 2013.

Under the requirements of Puerto Rico Banking Act, the Bank must establish a redemption fund for the subordinated capital notes by transferring from undivided profits pre-established amounts as follows:

	Redemption fund
	(In thousands)
Redemption fund - September 30, 2014	$	53,600
2014		1,675
2015		6,700
2016		5,025
	$	67,000

Other borrowings

Other borrowings, presented in the unaudited consolidated statement of financial condition amounted to $3.9 million and $3.7 millionat September 30,2014and December 31, 2013, respectively, which mainly consists of unsecured fixed-rate borrowings and term notes tied to the appreciation of theS&P index. For both periods, the unsecured fixed rate borrowings amounted to $1.7 million at a fixed rate of 3.0%. The term notes tied to the S&P index amounted to $1.0million at both September 30,2014 and December 31, 2013with an index appreciation of $1.1 millionand$957 thousand, respectively.

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Earnings Per Common Share (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Stock Conversion Rate	85.2719		85.2719
Weighted average stock anti dilutive effect excluded from calculation of earnings per share	397,766	196,425	325,994	233,775

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Offsetting Arrangement (Liabilities Offsetting) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Offsetting Liabilities [Line Items]
Gross amount of Recognized Liabilities	$ 1,027,001	$ 1,295,672
Gross amount Offset in the Statement of Financial Condition	0	0
Net Amount of Liabilities Presented in the Statement of Financial Condition	1,027,001	1,295,672
Financial Instruments	1,101,222	1,277,919
Cash Collateral Provided	27,480	69,378
Net Amount	(101,701)	(51,625)
Derivative Financial Instruments, Liabilities [Member]
Offsetting Liabilities [Line Items]
Gross amount of Recognized Liabilities	17,001	30,672
Gross amount Offset in the Statement of Financial Condition	0	0
Net Amount of Liabilities Presented in the Statement of Financial Condition	17,001	30,672
Financial Instruments	0	0
Cash Collateral Provided	2,980	2,349
Net Amount	14,021	28,323
Securities Loaned or Sold under Agreements to Repurchase
Offsetting Liabilities [Line Items]
Gross amount of Recognized Liabilities	1,010,000	1,265,000
Gross amount Offset in the Statement of Financial Condition	0	0
Net Amount of Liabilities Presented in the Statement of Financial Condition	1,010,000	1,265,000
Financial Instruments	1,101,222	1,277,919
Cash Collateral Provided	24,500	67,029
Net Amount	$ (115,722)	$ (79,948)

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Borrowings (Redemption Fund) (Details) (Redemption Fund [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2014
Redemption Fund [Member]
Debt Instrument [Line Items]
Redemption fund - September 30, 2014	$ 53,600
2014	1,675
2015	6,700
2016	5,025
Total	$ 67,000

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 31, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	OFG BANCORP
Entity Central Index Key	0001030469
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		44,678,475

XML

Offset of Assets/Liabilities

9 Months Ended

Sep. 30, 2014

Offsetting [Abstract]

Balance sheet Offsetting [Text Block]

NOTE 11 – OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES

The Company's derivatives are subject to agreements which allow a right of set-off with each respectivecounterparty. In addition, the Company's securities purchased under agreements to resell and securities sold under agreements to repurchase have a right of set-off with the respective counterparty under the supplemental terms of the master repurchase agreements. In an event of default, each party has a right of set-off against the other party for amounts owed in the related agreements and any other amount or obligation owed in respect of any other agreement or transaction between them. Security collateral posted to open and maintain a master netting agreement with a counterparty, in the form of cash and securities, may from time to time be segregated in an account at a third-party custodian pursuant to a an account control agreement.

The following table presents the potential effect of rights of set-off associated with the Company's recognized financial assets and liabilities at September 30, 2014 and December 31, 2013:

September 30, 2014
							Gross Amounts Not Offset in the Statement of Financial Condition
			Gross Amounts		Net Amount of
			Offset in the		Assets Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Assets		Condition		Condition		Instruments		Received		Amount
	(In thousands)
Derivatives	$	8,445	$	-	$	8,445	$	2,003	$	-	$	6,442
Total	$	8,445	$	-	$	8,445	$	2,003	$	-	$	6,442
December 31, 2013
							Gross Amounts Not Offset in the Statement of Financial Condition
			Gross Amounts		Net amount of
			Offset in the		Assets Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Assets		Condition		Condition		Instruments		Received		Amount
	(In thousands)
Derivatives	$	20,502	$	-	$	20,502	$	2,450	$	6,780	$	11,272
Securities purchased under agreements to resell		60,000		-		60,000		64,587		-		(4,587)
Total	$	80,502	$	-	$	80,502	$	67,037	$	6,780	$	6,685

September 30, 2014
							Gross Amounts Not Offset in the Statement of Financial Condition
					Net Amount of
			Gross Amounts		Liabilities
			Offset in the		Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Liabilities		Condition		Condition		Instruments		Provided		Amount
					(In thousands)
Derivatives	$	17,001	$	-	$	17,001	$	-	$	2,980	$	14,021
Securities sold under agreements to repurchase		1,010,000		-		1,010,000		1,101,222		24,500		(115,722)
Total	$	1,027,001	$	-	$	1,027,001	$	1,101,222	$	27,480	$	(101,701)
December 31, 2013
							Gross Amounts Not Offset in the Statement of Financial Condition
					Net Amount of
			Gross Amounts		Liabilities
			Offset in the		Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Liabilities		Condition		Condition		Instruments		Provided		Amount
	(In thousands)
Derivatives	$	30,672	$	-	$	30,672	$	-	$	2,349	$	28,323
Securities sold under agreements to repurchase		1,265,000		-		1,265,000		1,277,919		67,029		(79,948)
Total	$	1,295,672	$	-	$	1,295,672	$	1,277,919	$	69,378	$	(51,625)

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Accrued Interest Receivable and Other Assets (Accrued Interest)(Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Accounts Receivable Net Abstract
Accrued Interest Receivable On Non Covered Loans	$ 15,260	$ 13,378
Accrued Investment Income Receivable	4,405	5,356
Total Interest Receivable	$ 19,665	$ 18,734

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Borrowings (Advances from the Federal Home Loan Bank) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2014
Advances From Federal Home Loan Banks [Line Items]
FHLB, Weighted Average Interest Rate	0.74%
Federal Home Loan Bank Advances [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	$ 334,458
Federal Home Loan Bank Advances [Member] | April 3 2017 [Member] | Four Million [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	4,558
FHLB, Weighted Average Interest Rate	1.24%
Settlement Date	Apr. 03, 2012
Maturity Date	Apr. 03, 2017
Federal Home Loan Bank Advances [Member] | January 16, 2018 [Member] | Twenty Five Millions [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	25,000
FHLB, Weighted Average Interest Rate	2.18%
Settlement Date	Jan. 16, 2013
Maturity Date	Jan. 16, 2018
Federal Home Loan Bank Advances [Member] | January 16, 2018 [Member] | Thirty Million [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	30,000
FHLB, Weighted Average Interest Rate	2.19%
Settlement Date	Jan. 16, 2013
Maturity Date	Jan. 16, 2018
Federal Home Loan Bank Advances [Member] | July 20, 2020 [Member] | Ten Million [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	10,259
FHLB, Weighted Average Interest Rate	2.59%
Settlement Date	Jul. 19, 2013
Maturity Date	Jul. 20, 2020
Federal Loan Home Bank Advances Short Term Period Matured [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	264,641
Federal Loan Home Bank Advances Short Term Period Matured [Member] | October 6, 2014 [Member] | Twenty Five Millions [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	25,000
FHLB, Weighted Average Interest Rate	0.36%
Settlement Date	Sep. 04, 2014
Maturity Date	Oct. 06, 2014
Federal Loan Home Bank Advances Short Term Period Matured [Member] | October 10, 2014 [Member] | Fifty Millions [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	50,000
FHLB, Weighted Average Interest Rate	0.37%
Settlement Date	Sep. 10, 2014
Maturity Date	Oct. 10, 2014
Federal Loan Home Bank Advances Short Term Period Matured [Member] | October 16, 2014 [Member] | One Hundred Millions [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	100,000
FHLB, Weighted Average Interest Rate	0.36%
Settlement Date	Sep. 16, 2014
Maturity Date	Oct. 16, 2014
Federal Loan Home Bank Advances Short Term Period Matured [Member] | October 24, 2014 [Member] | Twenty Five Millions [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	25,000
FHLB, Weighted Average Interest Rate	0.32%
Settlement Date	Sep. 24, 2014
Maturity Date	Oct. 24, 2014
Federal Loan Home Bank Advances Short Term Period Matured [Member] | October 30, 2014 [Member] | Twenty Five Millions [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	25,000
FHLB, Weighted Average Interest Rate	0.30%
Settlement Date	Sep. 30, 2014
Maturity Date	Oct. 30, 2014
Federal Loan Home Bank Advances Short Term Period Matured [Member] | October 1, 2014 [Member] | Fourty Million [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowed fund	$ 39,641
FHLB, Weighted Average Interest Rate	0.37%
Settlement Date	Sep. 02, 2014
Maturity Date	Oct. 01, 2014

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Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Interest income:
Non-covered loans	$ 87,662	$ 87,655	$ 260,969	$ 259,567
Covered loans	20,886	21,657	69,153	65,884
Total interest income from loans	108,548	109,312	330,122	325,451
Mortgage-backed securities	10,842	9,662	35,243	29,559
Investment securities and other	911	2,127	3,910	6,564
Total interest income	120,301	121,101	369,275	361,574
Interest expense:
Deposits	7,661	11,334	25,804	30,757
Securities sold under agreements to repurchase	7,453	7,211	22,238	21,569
Advances from FHLB and other borrowings	2,314	2,321	6,896	6,275
Subordinated capital notes	1,002	1,144	2,990	3,973
Total interest expense	18,430	22,010	57,928	62,574
Net interest income	101,871	99,091	311,347	299,000
Provision for Non Covered Loan and Lease Losses	16,142	9,900	39,424	55,343
Provision for Covered Loan and Lease Losses	1,115	3,074	4,339	4,957
Total provision for loan and lease losses	17,257	12,974	43,763	60,300
Net interest income after provision for loan and lease losses	84,614	86,117	267,584	238,700
Non-interest income:
Banking service revenues	9,753	12,146	30,305	36,491
Wealth management revenue	7,113	7,394	21,316	23,084
Mortgage banking activities	2,097	2,334	5,346	9,299
Total Banking and Financial Service Revenues	18,963	21,874	56,967	68,874
FDIC shared-loss expense, net [Abstract]
FDIC indemnification asset expense	(16,059)	(15,198)	(51,180)	(46,623)
Change in true-up payment obligation expense	(875)	(767)	(2,596)	(2,178)
FDIC shared-loss expense, net	(16,934)	(15,965)	(53,776)	(48,801)
Net gain (loss) on:
Sale of securities	0	0	4,366	0
Derivatives	7	(811)	(463)	(1,746)
Early extinguishment of debt	0	0	0	1,061
Other non-interest income	455	(1,775)	1,133	575
Total non-interest income, net	2,491	3,323	8,227	19,963
Non-interest expense:
Compensation and employee benefits	18,592	22,590	61,086	69,927
Professional and service fees	3,807	4,409	11,525	16,262
Occupancy and equipment	8,770	8,270	25,684	25,552
Insurance	2,099	1,828	6,506	7,229
Electronic banking charges	4,637	3,694	14,085	11,458
Information technology related expenses	1,289	2,729	4,589	7,708
Advertising, business promotion, and strategic initiatives	1,825	1,471	5,274	4,550
Merger and restructuring charges	0	2,252	0	13,060
Foreclosure, repossession and other real estate expenses	7,842	5,703	20,783	12,603
Loan servicing and clearing expenses	1,870	2,133	5,598	5,493
Taxes, other than payroll and income taxes	3,494	4,024	11,005	11,778
Communication	820	782	2,590	2,481
Printing, postage, stationary and supplies	620	824	1,820	2,841
Director and investors relations	250	230	794	843
Other	3,660	2,295	9,488	6,749
Total non-interest expense	59,575	63,234	180,827	198,534
Income before income taxes	27,530	26,206	94,984	60,129
Income tax expense (benefit)	7,998	6,585	30,396	(18,223)
Net income	19,532	19,621	64,588	78,352
Dividends on preferred stock	(3,465)	(3,465)	(10,396)	(10,396)
Income available to common shareholders	$ 16,067	$ 16,156	$ 54,192	$ 67,956
Earnings per common share:
Basic	$ 0.36	$ 0.35	$ 1.20	$ 1.49
Diluted	$ 0.34	$ 0.34	$ 1.14	$ 1.39
Average common shares outstanding and equivalents	52,362	53,322	52,440	53,053
Cash dividends per share of common stock	$ 0.08	$ 0.06	$ 0.24	$ 0.18

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Allowance for Loan and Lease Losses

9 Months Ended

Sep. 30, 2014

Loans Receivable [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 September 30, 2014 and December 31, 2013 was as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Allowance for loans and lease losses on non-covered loans:
Originated and other loans and leases held for investment:
Mortgage	$	18,872	$	19,937
Commercial		9,112		14,897
Consumer		8,709		6,006
Auto and leasing		13,404		7,866
Unallocated		182		375
		50,279		49,081
Acquired loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		270		926
Consumer		1,031		-
Auto		3,159		1,428
		4,460		2,354
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy)
Commercial		10,115		1,713
Consumer		5		418
Auto		-		732
		10,120		2,863
		64,859		54,298
Allowance for loans and lease losses on covered loans:
Loans secured by 1-4 family residential properties		15,252		12,495
Commercial and other construction		46,586		39,619
Consumer		389		615
		62,227		52,729
Total allowance for loan and lease losses	$	127,086	$	107,027

Non-Covered Loans

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. While 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 loans 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 acquisition. As part of the Company's continuous enhancement to the allowance for loan and lease losses methodology, during the quarter ended March 31, 2014, an assessment of the look-back period and historical loss factor was performed for auto and leasing and consumer loan portfolios based on the trends observed and their relation with the economic cycle as of the period ended March31, 2014. Same analysis was performed for the commercial portfolio during the quarter ended June 30, 2014.  As a result, the look-back period was changed to 24 months from the previously determined 12 months for auto and leasing and consumer.  For the commercial portfolio, a look back period of 12 months was maintained.  In addition, during the quarter ended June 30, 2014, an assessment of environmental factors was performed for commercial, auto, and consumer portfolios. As a result, the environmental factors continue to reflect our assessment of the impact to our portfolio, taking into consideration the current evolution of the portfolio and expected impact, due to recent economic developments, changes in values of collateral and delinquencies, among others. These changes in the allowance for loan and lease losses' look-back period for the consumer and auto and leasing portfolios, and economic factors for the commercial, auto, and consumer portfolios are considered a change in accounting estimate as per ASC 250-10 provisions, where adjustments should be made prospectively.

Originated and Other Loans and Leases Held for Investment

The following tables present the activity in our allowance for loan and lease losses and the related recorded investment of the associated loans for our originated and other loans held for investment portfolio by segment for the periods indicated:

	Quarter Ended September 30, 2014
							Auto and
	Mortgage		Commercial		Consumer		Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	19,062	$	12,423	$	7,887	$	11,127	$	139	$	50,638
Charge-offs		(1,563)		(1,081)		(1,585)		(7,393)		-		(11,622)
Recoveries		138		56		66		2,434		-		2,694
Provision (recapture) for non-covered originated and other loan and lease losses		1,235		(2,286)		2,341		7,236		43		8,569
Balance at end of period	$	18,872	$	9,112	$	8,709	$	13,404	$	182	$	50,279
	Nine-Month Period Ended September 30, 2014
							Auto and
	Mortgage		Commercial		Consumer		Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	19,937	$	14,897	$	6,006	$	7,866	$	375	$	49,081
Charge-offs		(3,764)		(2,043)		(3,820)		(17,994)		-		(27,621)
Recoveries		374		269		457		6,094		-		7,194
Provision (recapture) for non-covered originated and other loan and lease losses		2,325		(4,011)		6,066		17,438		(193)		21,625
Balance at end of period	$	18,872	$	9,112	$	8,709	$	13,404	$	182	$	50,279

	September 30, 2014
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on non-covered originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	7,932	$	1,108	$	-	$	-	$	-	$	9,040
Collectively evaluated for impairment		10,940		8,004		8,709		13,404		182		41,239
Total ending allowance balance	$	18,872	$	9,112	$	8,709	$	13,404	$	182	$	50,279
Loans:
Individually evaluated for impairment	$	91,692	$	226,583	$	-	$	-	$	-	$	318,275
Collectively evaluated for impairment		699,414		990,652		175,882		542,892		-		2,408,840
Total ending loan balance	$	791,106	$	1,217,235	$	175,882	$	542,892	$	-	$	2,727,115

	Quarter Ended September 30, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	21,375	$	17,624	$	2,341	$	3,641	$	720	$	45,701
Charge-offs		(1,758)		(2,234)		(465)		(1,305)		-		(5,762)
Recoveries		-		28		37		639		-		704
Provision for non-covered originated and other loan and lease losses		1,374		(703)		2,915		3,143		201		6,930
Balance at end of period	$	20,991	$	14,715	$	4,828	$	6,118	$	921	$	47,573
	Nine-Month Period Ended September 30, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	21,092	$	17,072	$	856	$	533	$	368	$	39,921
Charge-offs		(33,465)		(5,678)		(1,034)		(2,105)		-		(42,282)
Recoveries		-		291		143		855		-		1,289
Provision for non-covered originated and other loan and lease losses		33,364		3,030		4,863		6,835		553		48,645
Balance at end of period	$	20,991	$	14,715	$	4,828	$	6,118	$	921	$	47,573

	December 31, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	8,708	$	1,431	$	-	$	-	$	-	$	10,139
Collectively evaluated for impairment		11,229		13,466		6,006		7,866		375		38,942
Total ending allowance balance	$	19,937	$	14,897	$	6,006	$	7,866	$	375	$	49,081
Loans:
Individually evaluated for impairment	$	84,494	$	28,145	$	-	$	-	$	-	$	112,639
Collectively evaluated for impairment		681,771		1,099,512		127,744		379,874		-		2,288,901
Total ending loans balance	$	766,265	$	1,127,657	$	127,744	$	379,874	$	-	$	2,401,540

Acquired 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 non-covered acquiredloan portfolio, excluding loans accounted for under ASC 310-30, for the periods indicated:

	Quarter Ended September 30, 2014
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	464	1	$	338	$	2,642	$	-	$	3,444
Charge-offs		(228)			(1,432)		(1,748)		-		(3,408)
Recoveries		35			139		519		-		693
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-20		(1)			1,986		1,746		-		3,731
Balance at end of period	$	270		$	1,031	$	3,159	$	-	$	4,460
	Nine-Month Period Ended September 30, 2014
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	926	1	$	-	$	1,428	$	-	$	2,354
Charge-offs		(512)			(5,442)		(4,414)		-		(10,368)
Recoveries		65			363		1,504		-		1,932
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-20		(209)			6,110		4,641		-		10,542
Balance at end of period	$	270		$	1,031	$	3,159	$	-	$	4,460

	September 30, 2014
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on non-covered acquired loans accounted for under ASC 310-20:
Ending allowance balance attributable to loans:
Collectively evaluated for impairment		270		1,031		3,159		-		4,460
Total ending allowance balance	$	270	$	1,031	$	3,159	$	-	$	4,460
Loans:
Collectively evaluated for impairment		26,984		47,284		210,808		-		285,076
Total ending loan balance	$	26,984	$	47,284	$	210,808	$	-	$	285,076

	Quarter Ended September 30, 2013
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	924	$ 1	$	-	$	-	$	-	$	924
Charge-offs		-			(1,233)		(1,598)		-		(2,831)
Recoveries		6			88		884		-		978
Provision (recapture)for non-covered acquired loan and lease losses accounted for under ASC 310-20		431			1,145		1,394		-		2,970
Balance at end of period	$	1,361		$	-	$	680	$	-	$	2,041
	Nine-Month Period Ended September 30, 2013
	Commercial			Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	-	$ 1	$	-	$	-	$	-	$	-
Charge-offs		(25)			(3,847)		(4,723)		-		(8,595)
Recoveries		6			932		3,000		-		3,938
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-20		1,380			2,915		2,403		-		6,698
Balance at end of period	$	1,361		$	-	$	680	$	-	$	2,041

	December 31, 2013
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on non-covered acquired loans accounted for under ASC 310-20:
Ending allowance balance attributable to loans:
Collectively evaluated for impairment		926		-		1,428		-		2,354
Total ending allowance balance	$	926	$	-	$	1,428	$	-	$	2,354
Loans:
Collectively evaluated for impairment		77,681		56,174		301,584		-		435,439
Total ending loan balance	$	77,681	$	56,174	$	301,584	$	-	$	435,439

Acquired 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 associated loans in our non-covered acquiredloan portfolio accounted for under ASC 310-30, for the periods indicated:

	Quarter Ended September 30, 2014
	Mortgage			Commercial			Construction			Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for non-covered loans accounted for under ASC 310-30:
Balance at beginning of period	$	-	1	$	6,216	1	$	-	$ 1	$	62	$	-	$	6,278
Provision(recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-30		-			3,899			-			(57)		-		3,842
Balance at end of period	$	-		$	10,115		$	-		$	5	$	-	$	10,120
	Nine-Month Period Ended September 30, 2014
	Mortgage			Commercial			Construction			Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for non-covered loans accounted for under ASC 310-30:
Balance at beginning of period	$	-	1	$	1,713	1	$	-	1	$	418	$	732	$	2,863
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-30		-			8,402			-			(413)		(732)		7,257
Balance at end of period	$	-		$	10,115		$	-		$	5	$	-	$	10,120

Non-covered acquired loans accounted for under ASC 310-30 were recognized at fair value as of December 18, 2012, which included the impact of expected credit losses, and therefore, no allowance for credit losses was recorded during the nine-month period ended September 30, 2013.

Covered Loans

For covered loans, 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 covered loans for the quarters and nine-month periodsended September 30, 2014and 2013 were as follows:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Balance at beginning of the period	$	59,515	$	53,992	$	52,729	$	54,124
Provision for covered loan and lease losses, net		1,115		3,074		4,339		4,956
FDIC shared-loss portion of provision for (recapture of)
covered loan and lease losses, net		1,597		(511)		5,159		(2,525)
Balance at end of the period	$	62,227	$	56,555	$	62,227	$	56,555

FDIC shared-loss portion of provision for (recapture of) covered loans and lease losses net,represents the credit impairment losses to be covered under the FDIC loss-share agreement which is increasing (decreasing) the FDIC loss-share indemnification asset.

Net provision for covered loans includes both additional reserves and reserve releases for different pools. The pools for which there were releases are also subject to a reduction to the FDIC shared-loss indemnification asset because of lower expected losses which are recognized as recaptures.

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Loans Receivable

9 Months Ended

Sep. 30, 2014

Loans Receivable [Abstract]

LOANS RECEIVABLE

NOTE 4- LOANS

The Company's loan portfolio is composed of covered loans and non-covered loans. Covered loans are subject to loss sharing agreements with the FDIC and non-covered loans are not subject to FDIC loss sharing agreements.The risks of covered loans are different from the risks of non-covered loans because of the loss protection provided by the FDIC to covered loans. Loans acquired in the BBVAPR Acquisition are included as non-covered loans in theunaudited consolidated statements of financial condition. Non-covered loans are further subdivided between originated and other loans, acquired loans accounted for under ASC 310-20 (loans with revolving feature and/or acquired at a premium),and acquired loans accounted for under ASC 310-30 (loans acquired with deteriorated credit quality, including those by analogy).

The composition of the Company's loan portfolio at September 30, 2014 and December 31,2013 was as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Non-covered loans:
Originated and other loans and leases held for investment:
Mortgage	$	791,106	$	766,265
Commercial		1,217,235		1,127,657
Consumer		175,882		127,744
Auto and leasing		542,892		379,874
		2,727,115		2,401,540
Acquired loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		26,984		77,681
Consumer		47,284		56,174
Auto		210,808		301,584
		285,076		435,439
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy)
Mortgage		670,188		717,904
Commercial		485,444		545,117
Construction		108,694		126,427
Consumer		36,470		63,620
Auto		276,749		379,145
		1,577,545		1,832,213
		4,589,736		4,669,192
Deferred loan cost , net		3,575		1,035
Loans receivable		4,593,311		4,670,227
Allowance for loan and lease losses on non-covered loans		(64,859)		(54,298)
Loans receivable, net		4,528,452		4,615,929
Mortgage loans held-for-sale		16,757		46,529
Total non-covered loans, net		4,545,209		4,662,458
Covered loans:
Loans secured by 1-4 family residential properties		121,658		121,748
Construction and development secured by 1-4 family residential properties		18,947		17,304
Commercial and other construction		228,410		264,249
Consumer		4,905		6,119
Leasing		-		270
Total covered loans		373,920		409,690
Allowance for loan and lease losses on covered loans		(62,227)		(52,729)
Total covered loans, net		311,693		356,961
Total loans, net	$	4,856,902	$	5,019,419

During the nine-month period ended September 30, 2014, the Company reclassified $25.8millionin mortgage loans held-for-sale to held-for-investment

Non-covered Loans

Originated and Other Loans and Leases Held for Investment

The Company's originated and other loans held for investment areencompassed within four portfolio segments: mortgage, commercial, consumer, andauto and leasing.

The following tables present the aging of the recorded investment in gross originated and other loans held for investment as of September 30,2014 and December 31, 2013 by class ofloans. Mortgage loans past due included 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.

	September 30, 2014
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	5,996	$	3,283	$	3,424	$	12,703	$	55,635	$	68,338	$	141
Years 2003 and 2004		6,679		1,730		3,471		11,880		50,464		62,344		-
Year 2005		7,368		3,295		8,258		18,921		69,510		88,431		89
Year 2006		10,274		5,678		6,041		21,993		91,218		113,211		114
Years 2007, 2008 and 2009		3,285		3,095		7,647		14,027		83,036		97,063		59
Years 2010, 2011, 2012, 2013 and 2014		4,938		1,368		5,706		12,012		181,550		193,562		509
		38,540		18,449		34,547		91,536		531,413		622,949		912
Non-traditional		1,084		783		3,022		4,889		32,886		37,775		-
Loss mitigation program		10,022		7,358		14,625		32,005		57,578		89,583		5,773
		49,646		26,590		52,194		128,430		621,877		750,307		6,685
Home equity secured personal loans		-		-		126		126		607		733		-
GNMA's buy-back option program		-		-		40,066		40,066		-		40,066		-
		49,646		26,590		92,386		168,622		622,484		791,106		6,685
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		113,976		113,976		-
Institutional		-		-		-		-		37,177		37,177		-
Middle market		-		1,071		638		1,709		142,830		144,539		-
Retail		1,164		129		7,258		8,551		153,091		161,642		-
Floor plan		-		-		-		-		1,666		1,666		-
Real estate		-		-		-		-		11,878		11,878		-
		1,164		1,200		7,896		10,260		460,618		470,878		-
Other commercial and industrial:
Corporate		-		-		-		-		60,402		60,402		-
Institutional		-		-		-		-		482,277		482,277		-
Middle market		-		-		628		628		82,577		83,205		-
Retail		267		144		809		1,220		79,592		80,812		-
Floor plan		-		-		-		-		39,661		39,661		-
		267		144		1,437		1,848		744,509		746,357		-
		1,431		1,344		9,333		12,108		1,205,127		1,217,235		-

	September 30, 2014
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		238		189		408		835		17,022		17,857		-
Overdrafts		20		2		1		23		317		340		-
Personal lines of credit		67		132		29		228		1,823		2,051		-
Personal loans		1,666		627		604		2,897		135,711		138,608		-
Cash collateral personal loans		214		132		36		382		16,644		17,026		-
		2,205		1,082		1,078		4,365		171,517		175,882		-
Auto and leasing		43,537		15,956		8,279		67,772		475,120		542,892		-
Total	$	96,819	$	44,972	$	111,076	$	252,867	$	2,474,248	$	2,727,115	$	6,685

	December 31, 2013
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	6,697	$	1,635	$	3,408	$	11,740	$	64,772	$	76,512	$	79
Years 2003 and 2004		4,722		2,163		1,845		8,730		56,387		65,117		-
Year 2005		8,527		2,119		4,808		15,454		74,087		89,541		-
Year 2006		12,055		4,312		4,418		20,785		99,537		120,322		-
Years 2007, 2008 and 2009		3,464		1,104		4,663		9,231		91,919		101,150		152
Years 2010, 2011, 2012 and 2013		3,923		1,609		4,453		9,985		139,561		149,546		459
		39,388		12,942		23,595		75,925		526,263		602,188		690
Non-traditional		3,217		1,162		2,311		6,690		35,412		42,102		-
Loss mitigation program		9,759		5,560		13,191		28,510		57,808		86,318		2,185
		52,364		19,664		39,097		111,125		619,483		730,608		2,875
Home equity secured personal loans		-		-		138		138		598		736		-
GNMA's buy-back option program		-		-		34,921		34,921		-		34,921		-
		52,364		19,664		74,156		146,184		620,081		766,265		2,875
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		54,796		54,796		-
Institutional		-		-		-		-		4,050		4,050		-
Middle market		1,356		-		10,294		11,650		149,933		161,583		-
Retail		4,253		1,015		3,190		8,458		158,184		166,642		-
Floor plan		-		-		-		-		1,835		1,835		-
Real estate		-		-		-		-		11,655		11,655		-
		5,609		1,015		13,484		20,108		380,453		400,561		-
Other commercial and industrial:
Corporate		236		-		-		236		32,362		32,598		-
Institutional		-		-		-		-		536,445		536,445		-
Middle market		-		299		1,134		1,433		57,464		58,897		-
Retail		1,830		552		539		2,921		58,589		61,510		-
Floor plan		39		-		-		39		37,607		37,646		-
		2,105		851		1,673		4,629		722,467		727,096		-
		7,714		1,866		15,157		24,737		1,102,920		1,127,657		-

	December 31, 2013
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		287		168		232		687		14,554		15,241		-
Overdrafts		46		4		-		50		322		372		-
Personal lines of credit		33		38		66		137		1,844		1,981		-
Personal loans		1,324		399		352		2,075		92,485		94,560		-
Cash collateral personal loans		324		43		-		367		15,223		15,590		-
		2,014		652		650		3,316		124,428		127,744		-
Auto and leasing		25,531		9,437		5,089		40,057		339,817		379,874		-
Total	$	87,623	$	31,619	$	95,052	$	214,294	$	2,187,246	$	2,401,540	$	2,875

At September 30, 2014, the increase in delinquencies in the consumer and the auto and leasing portfolios compared to December 31, 2013 is mainly attributed to the fact that non-performing loans of acquired non-covered loan portfolio were accounted for under ASC 310-30. Such portfolios are increasing as new originations are ramping up the balances outstanding.More than a year from the BBVAPR Acquisition, those portfolios are beginning to reflect normal delinquency levels as seasoned portfolios. At September 30, 2014, the increase in delinquencies in the mortgage portfolio compared to December 31, 2013 is mainly attributed to Puerto Rico's prolonged recession.

At September 30, 2014 and December 31, 2013, the Company had $458.0 million and $515.4 million, respectively, in loans granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of the institutional commercial loan segment. This entire amount was current at September 30, 2014.

Acquired 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 premiumas part of the non-covered portfolio 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. Loans acquired in the non-covered portfolio that were accounted for under the provisions of ASC 310-20 are removed from the acquired loan categoryat the end of the reporting periodupon refinancing, renewal or normal re-underwriting.

The following tables present the aging of the recorded investment in gross acquired loans accounted for under ASC 310-20 as ofSeptember 30,2014 and December 31, 2013, by class ofloans:

	September 30, 2014
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Corporate	$	-	$	-	$	-	$	-	$	3,746	$	3,746	$	-
Retail		-		-		342		342		482		824		-
Floor plan		-		-		101		101		3,972		4,073		-
		-		-		443		443		8,200		8,643		-
Other commercial and industrial
Corporate		-		-		-		-		2,915		2,915		-
Retail		169		73		451		693		7,328		8,021		-
Floor plan		97		40		108		245		7,160		7,405		-
		266		113		559		938		17,403		18,341		-
		266		113		1,002		1,381		25,603		26,984		-
Consumer
Credit cards		1,625		678		1,328		3,631		40,051		43,682		-
Personal loans		160		83		66		309		3,293		3,602		-
		1,785		761		1,394		3,940		43,344		47,284		-
Auto		11,372		4,137		1,537		17,046		193,762		210,808		-
Total	$	13,423	$	5,011	$	3,933	$	22,367	$	262,709	$	285,076	$	-

	December 31, 2013
													Loans 90+
													Days Past
													Due and
	30-59 Days		60-89 Days		90+ Days		Total Past						Still
	Past Due		Past Due		Past Due		Due		Current		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Corporate	$	-	$	-	$	-	$	-	$	10,166	$	10,166	$	-
Retail		431		331		868		1,630		4,140		5,770		-
Floor plan		-		-		101		101		2,576		2,677		-
		431		331		969		1,731		16,882		18,613		-
Other commercial and industrial
Corporate		14		83		-		97		9,696		9,793		-
Retail		1,717		1,418		659		3,794		23,544		27,338		-
Floor plan		35		193		18		246		21,691		21,937		-
		1,766		1,694		677		4,137		54,931		59,068		-
		2,197		2,025		1,646		5,868		71,813		77,681		-
Consumer
Credit cards		2,217		1,200		2,068		5,485		46,714		52,199		-
Personal loans		196		7		91		294		3,681		3,975		-
		2,413		1,207		2,159		5,779		50,395		56,174		-
Auto		12,534		3,616		1,608		17,758		283,826		301,584		-
Total	$	17,144	$	6,848	$	5,413	$	29,405	$	406,034	$	435,439	$	-

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

Acquired loans that are part of the non-covered portfolio, 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 non-covered loans acquired with deteriorated credit quality, including those accounted under ASC 310-30 by analogy, in the statements of financial condition at September 30,2014 and December 31, 2013 is as follows:

	September 30,	December 31,
	2014	2013
	(In thousands)
Contractual required payments receivable	$ 2,505,662	$ 2,929,353
Less: Non-accretable discount	523,987	579,587
Cash expected to be collected	1,981,675	2,349,766
Less: Accretable yield	404,130	517,553
Carrying amount, gross	1,577,545	1,832,213
Less: allowance for loan and lease losses	10,120	2,863
Carrying amount, net	$ 1,567,425	$ 1,829,350

During the quarter ended September 30, 2014, the Company sold non-performing residential mortgage loans that were accounted for under ASC 310-30 with acarrying amount of $19.7million.Nogain orloss was realized in the transaction in accordance to ASC 310-30 accounting.

At September 30, 2014 and December 31, 2013, the Company had $168.7million and $180.5 million, respectively, in loans granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of its non-covered acquired loans accounted for under ASC 310-30. This entire amount was current at September 30, 2014.

The following tables describe the accretable yield and non-accretable discount activity of acquired loans accounted for under ASC 310-30 for the quartersand nine-month periods ended September 30, 2014 and 2013

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Accretable Yield Activity
Balance at beginning of period	$	444,606	$	561,485	$	517,553	$	655,833
Accretion		(38,340)		(48,352)		(118,323)		(150,447)
Transfer from (to) non-accretable discount		(2,136)		6,010		4,900		13,757
Balance at end of period	$	404,130	$	519,143	$	404,130	$	519,143
	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Non-Accretable Discount Activity
Balance at beginning of period	$	554,724	$	686,231	$	579,587	$	714,462
Principal losses		(32,873)		(44,301)		(50,700)		(64,785)
Transfer from (to) accretable yield		2,136		(6,010)		(4,900)		(13,757)
Balance at end of period	$	523,987	$	635,920	$	523,987	$	635,920

Covered Loans

The carrying amount of covered loans at September 30, 2014 and December 31, 2013is as follows:

	September 30,		December 31,
	2014		2013
	(In thousands)
Contractual required payments receivable	$	561,844	$	702,126
Less: Non-accretable discount		77,940		129,477
Cash expected to be collected		483,904		572,649
Less: Accretable yield		109,984		162,959
Carrying amount, gross		373,920		409,690
Less: Allowance for covered loan and lease losses		62,227		52,729
Carrying amount, net	$	311,693	$	356,961

The following tables describe the accretable yield and non-accretable discount activity of covered loans for the quartersand nine-month periods ended September 30, 2014 and2013:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Accretable Yield Activity
Balance at beginning of period	$	128,061	$	167,132	$	162,959	$	188,008
Accretion		(20,886)		(21,657)		(69,154)		(65,884)
Transfer from non-accretable discount		2,809		23,070		16,179		46,421
Balance at end of period	$	109,984	$	168,545	$	109,984	$	168,545
	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2013		2013		2014		2013
	(In thousands)
Non-Accretable Discount Activity
Balance at beginning of period	$	85,224	$	192,259	$	129,477	$	237,555
Principal losses		(4,475)		(7,762)		(35,358)		(29,707)
Transfer to accretable yield		(2,809)		(23,070)		(16,179)		(46,421)
Balance at end of period	$	77,940	$	161,427	$	77,940	$	161,427

Non-accrual Loans

The following table presents the recorded investment in loansin non-accrual status by class ofloans as of September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year):
Up to the year 2002	$	3,613	$	3,428
Years 2003 and 2004		3,749		1,845
Year 2005		9,117		4,922
Year 2006		7,019		4,418
Years 2007, 2008 and 2009		9,817		4,511
Years 2010, 2011, 2012, 2013 and 2014		6,244		7,818
		39,559		26,942
Non-traditional		3,022		2,311
Loss mitigation program		17,636		18,792
		60,217		48,045
Home equity secured personal loans		125		138
		60,342		48,183
Commercial
Commercial secured by real estate
Middle market		10,608		11,895
Retail		8,942		7,208
		19,550		19,103
Other commercial and industrial
Middle market		628		1,134
Retail		2,112		2,485
Floor plan		-		108
		2,740		3,727
		22,290		22,830
Consumer
Credit cards		408		232
Overdrafts		1		-
Personal lines of credit		35		84
Personal loans		761		485
Cash collateral personal loans		36		4
		1,241		805
Auto and leasing		9,008		5,089
	$	92,881	$	76,907

	September 30,		December 31,
	2014		2013
	(In thousands)
Acquired loans accounted under ASC 310-20
Commercial
Commercial secured by real estate
Retail	$	342	$	956
Floor plan		101		101
		443		1,057
Other commercial and industrial
Corporate		-		97
Retail		455		1,371
Floor plan		121		18
		576		1,486
		1,019		2,543
Consumer
Credit cards		1,326		2,068
Personal loans		76		151
		1,402		2,219
Auto		1,746		1,608
		4,167		6,370
Total non-accrual loans	$	97,048	$	83,277

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.

Delinquent residential mortgage loans insured or guaranteed under applicable FHA and VA programs are placed in non-accrual when they become18 months or more past due, since they are insured loans.

AtSeptember30, 2014 and December 31, 2013, loanswhose terms have been extended and which are classified as troubled-debt restructurings that are not included in non-accrual loans amounted to $273.6 million and$66.5 million,respectively, as they are performing under their new terms. During the quarter ended September 30, 2014, the revolving line of credit to finance the purchase of fuel for the day to day power generation activities of the Puerto Rico Electric Power Authority (“PREPA”) was classified substandard and a troubled-debt restructuring.Based on our analysis, the loan is being maintained in accrual status requiring no impairment.At September 30, 2014 this line of credit had an unpaid principal balance of $200.0 million.

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 was $226.8million and $28.4million at September 30, 2014 and December 31, 2013,respectively. Impaired commercial loans at September 30, 2014 included the PREPA line of credit with an unpaid principal balance of $200.0 million.The impaired 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 valuation allowance for impaired commercial loans amounted to $1.1million and $1.4 millionatSeptember 30, 2014 and December 31, 2013, respectively. The total investment in impaired mortgage loans was $91.7 million and $84.5 million at September 30, 2014 and December 31, 2013, respectively. Impairment on mortgage loans assessed as troubled-debt restructurings was measured using the present value of cash flows. The valuation allowance for impaired mortgage loans amounted to approximately $7.9 million and $8.7 million at September 30, 2014 and December 31,2013, respectively.

Originated and Other Loans and Leases Held for Investment

The Company's recorded investment in non-covered commercial and mortgage loans categorized as originated and other loans and leases held for investment that were individually evaluated forimpairment and the related allowance for loan and lease losses at September 30, 2014 and December 31, 2013are as follows:

	September 30, 2014
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	5,297	$	4,731	$	1,108	23%
Residential troubled-debt restructuring		97,289		91,692		7,932	9%
Impaired loans with no specific allowance:
Commercial		228,968		221,852		N/A	N/A
Total investment in impaired loans	$	331,554	$	318,275	$	9,040	3%

	December 31, 2013
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance
Commercial	$	6,600	$	5,553	$	1,431	26%
Residential troubled-debt restructuring		89,539		84,494		8,708	10%
Impaired loans with no specific allowance
Commercial		27,914		22,592		N/A	N/A
Total investment in impaired loans	$	124,053	$	112,639	$	10,139	9%

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

The Company's recorded investment in non-covered commercial loans categorized as non-covered acquired loans accounted for under ASC 310-20 that were individually evaluated for impairment and the related allowance for loan and lease losses at September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial		208		208		N/A	N/A
Total investment in impaired loans	$	208	$	208	$	-	0%
	December 31, 2013
	Unpaid		Recorded		Specific
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial		208		208		N/A	N/A
Total investment in impaired loans	$	208	$	208	$	-	0%

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

The Company's recorded investment in non-covered acquired loan pools accounted for under ASC 310-30 and their related allowance for non-covered loan and lease losses at September 30, 2014 and December 31, 2013are as follows:

	September 30, 2014
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired non-covered loan pools:
Commercial	$	294,966	$	257,234	$	4,613	2%
Construction		52,367		45,770		5,502	12%
Consumer		42,897		36,463		5	0%
Total investment in impaired non-covered loan pools	$	390,230	$	339,467	$	10,120	3%

	December 31, 2013
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired non-covered loan pools:
Mortgage	$	5,183	$	4,718	$	57	1%
Commercial		48,100		40,411		394	1%
Construction		21,526		17,818		1,319	7%
Consumer		73,043		63,606		361	1%
Auto		379,236		377,316		732	0%
Total investment in impaired non-covered loan pools	$	527,088	$	503,869	$	2,863	1%

The following table presents the interest recognized in non-covered commercial and mortgage loans that were individuallyevaluated for impairment, excluding loans accounted for under ASC 310-30, for the quarters and nine-month periodsended September 30, 2014 and 2013:

	Quarter Ended September 30,
	2014				2013
	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
	(In thousands)
Impaired loans with specific allowance
Commercial	$	28	$	5,103	$	5	$	9,039
Residential troubled-debt restructuring		666		91,293		712		82,388
Impaired loans with no specific allowance
Commercial		1,728		89,029		146		28,805
Total interest income from impaired loans	$	2,422	$	185,425	$	863	$	120,232
	Nine-Month Period Ended Ended September 30,
	2014				2013
	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
	(In thousands)
Impaired loans with specific allowance
Commercial	$	83	$	6,187	$	16	$	14,872
Residential troubled-debt restructuring		1,876		89,597		1,942		81,406
Impaired loans with no specific allowance
Commercial		5,185		44,203		438		26,471
Total interest income from impaired loans	$	7,144	$	139,987	$	2,396	$	122,749

Covered Loans

The Company's recorded investment in covered loan pools that have recorded impairments and their relatedallowance for covered loan and lease losses as of September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired covered loan pools:
Loans secured by 1-4 family residential properties	$	138,029	$	106,823	$	15,252	14%
Construction and development secured by 1-4 family residential properties		61,562		20,249		8,679	43%
Commercial and other construction		105,542		73,424		37,907	52%
Consumer		8,408		4,844		389	8%
Total investment in impaired covered loan pools	$	313,541	$	205,340	$	62,227	30%

	December 31, 2013
							Coverage
	Unpaid		Recorded		Specific		to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired covered loan pools with specific allowance
Loans secured by 1-4 family residential properties	$	52,142	$	38,179	$	12,495	33%
Construction and development secured by 1-4 family residential properties		66,037		17,304		6,866	40%
Commercial and other construction		209,566		111,946		32,753	29%
Consumer		10,512		5,857		615	11%
Total investment in impaired covered loan pools	$	338,257	$	173,286	$	52,729	30%

Modifications

The following tables present the troubled-debt restructurings during the quarters and nine-month periods ended September 30, 2014 and 2013:

	Quarter Ended September 30, 2014
	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	26	$	3,016	5.62%	347	$	2,965	4.22%	393
Commercial	20		200,007	7.25%	3		200,007	7.25%	10
Consumer	6		58	10.00%	61		68	9.66%	55
	Nine-Month Period Ended September 30, 2014
	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	113	$	14,562	5.99%	349	$	14,162	4.21%	389
Commercial	21		200,080	7.25%	3		200,080	7.25%	10
Consumer	13		123	11.77%	66		136	11.48%	62
	Quarter Ended September 30, 2013
	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	21	$	2,887	6.74%	352	$	3,066	6.74%	351
	Nine-Month Period Ended September 30, 2013
	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	102	$	12,828	6.43%	334	$	13,685	5.15%	393
Commercial	2		1,842	8.99%	87		1,842	4.00%	66

The following table presents troubled-debt restructurings for which there was a payment default during the twelve-month periods endedSeptember 30, 2014 and 2013:

	Twelve-Month Period Ended September 30,
	2014			2013
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(Dollars in thousands)
Mortgage	15	$	1,739	30	$	3,097
Consumer	2	$	5	-	$	-

Credit Quality Indicators

The Company categorizes non-covered originated and other loans and acquired loans accounted for under ASC 310-20 into risk categories based on relevant information about the ability ofborrowers to service their debt, such as economic conditions, portfolio risk characteristics, prior lossexperience,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 financialposition, minimal operating risk, profitability, liquidity and capitalization better than industry standards.

Special Mention: Loans classified as “special mention” have a potential weakness that deservesmanagement's close attention. If left uncorrected, these potential weaknesses may result in deterioration ofthe 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 worthand paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a welldefinedweakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by thedistinct 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 assubstandard, with the added characteristic that the weaknesses make collection or liquidation in full, on thebasis 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 continuanceas bankable assets is not warranted. This classification does not mean that the asset has absolutely norecovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthlessloan 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 areconsidered to be pass rated loans.

As of September 30,2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of gross non-covered originated and other loans and acquiredloans accounted for under ASC 310-20 subject to risk rating by class of loans is as follows:

	September 30, 2014
	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	$	113,976	$	90,006	$	23,970	$	-	$	-	$	-
Institutional		37,177		27,232		9,702		-		-		243
Middle market		144,539		127,640		3,707		-		-		13,192
Retail		161,642		147,034		3,020		2,441		-		9,147
Floor plan		1,666		594		971		101		-		-
Real estate		11,878		11,878		-		-		-		-
		470,878		404,384		41,370		2,542		-		22,582
Other commercial and industrial:
Corporate		60,402		60,402		-		-		-		-
Institutional		482,275		282,293		-		-		-		199,982
Middle market		83,206		77,504		3,144		-		-		2,558
Retail		80,813		76,684		308		2,360		-		1,461
Floor plan		39,661		38,301		1,147		213		-		-
		746,357		535,184		4,599		2,573		-		204,001
Total		1,217,235		939,568		45,969		5,115		-		226,583
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Corporate		3,746		3,746		-		-		-		-
Retail		824		467		-		357		-		-
Floor plan		4,073		4,073		-		-		-		-
		8,643		8,286		-		357		-		-
Other commercial and industrial:
Corporate		2,915		2,915		-		-		-		-
Retail		8,021		7,612		9		400		-		-
Floor plan		7,405		7,405		-		-		-		-
		18,341		17,932		9		400		-		-
Total		26,984		26,218		9		757		-		-
Total	$	1,244,219	$	965,786	$	45,978	$	5,872	$	-	$	226,583

	December 31, 2013
	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	$	54,796	$	54,796	$	-	$	-	$	-	$	-
Institutional		4,050		4,050		-		-		-		-
Middle market		161,583		133,061		16,627		118		-		11,777
Retail		166,642		149,018		2,182		2,258		-		13,184
Floor plan		1,835		1,835		-		-		-		-
Real estate		11,655		11,655		-		-		-		-
		400,561		354,415		18,809		2,376		-		24,961
Other commercial and industrial:
Corporate		32,598		32,598		-		-		-		-
Institutional		536,445		536,445		-		-		-		-
Middle market		58,897		53,868		3,466		198		-		1,365
Retail		61,510		58,742		257		691		-		1,820
Floor plan		37,646		37,350		188		108		-		-
		727,096		719,003		3,911		997		-		3,185
Total		1,127,657		1,073,418		22,720		3,373		-		28,146
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Corporate		10,166		10,166		-		-		-		-
Retail		5,770		4,378		443		949		-		-
Floor plan		2,677		2,576		-		101		-		-
		18,613		17,120		443		1,050		-		-
Other commercial and industrial:
Corporate		9,793		9,696		-		97		-		-
Retail		27,338		26,044		150		1,144		-		-
Floor plan		21,937		21,769		168		-		-		-
		59,068		57,509		318		1,241		-		-
Total		77,681		74,629		761		2,291		-		-
Total	$	1,205,338	$	1,148,047	$	23,481	$	5,664	$	-	$	28,146

All loans individually measured for impairment are classified as substandard as of September 30, 2014.

At September 30, 2014 and December 31, 2013, we had approximately $647.9million and $763.4 million, respectively,of credit facilities granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities, of which $626.8million and $696.0 million, respectively, were outstanding as of such dates.A substantial portion of our credit exposure to the government of Puerto Rico consists of collateralized loans or obligations that have a specific source of income or revenues identified for its repayment. Some of these obligations consist of senior and subordinated loans to public corporations that obtain revenues from rates charged for services,such as water and electric power utilities. Public corporations have varying degrees of independence from the central government and many have received appropriations or are due other payments from it. We also have loans to various municipalities for which the good faith, credit and unlimited taxing power of the applicable municipality has been pledged to their repayment.These municipalities are required by law to levy special property taxes in such amounts as shall be required for the payment of all their general obligation bonds and notes. Another portion of these loans consists of special obligations of various municipalities that are payable from the basic real and personal property taxes collected within such municipalities.The good faith and credit obligations of the municipalities have a first lien on the basic property taxes.

In the second quarter of 2014, the government enacted the Puerto Rico Public Corporation Debt Enforcement and Recovery Act (the “Recovery Act”), which establishes procedures for the adjustment of certain public corporations' debts. The Recovery Act states in its preamble that it further promotes the central government's public policy objectives of no longer providing financial support to public corporations and promoting their economic independence. The Recovery Act, which is without precedent and is being challenged in federal court on constitutional grounds, has increased the level of uncertainty as to the rights of the affected public corporation's creditors.As of September 30, 2014, we had approximately $382.1 million of credit facilities granted to public corporations authorized to initiate proceedings under the Recovery Act.

Oriental Bank is part of a four bank syndicate providing a $550 million dollar revolving line of credit to finance the purchase of fuel for the day to day power generation activities of PREPA, a public corporation authorized to seek relief under the Recovery Act. The Bank's participation in the line of credit has an unpaid principal balance of $200.0 million as of September 30, 2014. The Company, as part of the bank syndicate, agreed during the quarter to extend its credit facility with PREPA to March 31, 2015. In connection with such extension, PREPA appointed a Chief Restructuring Officer to work alongside the Executive Director to develop, organize and manage a financial and operational restructuring of PREPA subject to the approval of PREPA's Board. PREPA also committed to delivering a comprehensive business plan by December 15, 2014 and a full debt restructuring plan by March 2, 2015. After the extension, the Company classified the credit as substandard and a troubled-debt restructuring. The Company conducted an impairment analysis considering the probability of collection of principal and interest. Based on the experience and knowledge of the borrower, independent scenarios were developed to assess the collectability of the Company's current credit exposure to PREPA. Such scenarios project very probable outcomes based on a conservative set of assumptions related to PREPA's ability for future cash flow generation. The Company concluded that the loan should be maintained in accrual status requiring no impairment.

For residential and consumer loan classes, the Company evaluates credit quality based on the delinquency status of the loan. As of September 30, 2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of non-covered gross originated and other loans and acquired loans accounted for under ASC 310-20 not subject to risk rating by class of loans is as follows:

	September 30, 2014
	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	$	68,338	$	54,931	$	5,831	$	3,160	$	537	$	999	$	1,888	$	992
Years 2003 and 2004		62,344		49,747		6,309		1,730		221		1,623		1,489		1,225
Year 2005		88,431		66,895		6,451		3,236		831		3,768		3,659		3,591
Year 2006		113,211		90,157		9,821		5,471		1,740		2,479		1,759		1,784
Years 2007, 2008 and 2009		97,063		79,950		2,874		2,774		839		3,181		3,352		4,093
Years 2010, 2011, 2012 2013 and 2014		193,562		180,558		4,088		1,224		106		1,597		1,281		4,708
		622,949		522,238		35,374		17,595		4,274		13,647		13,428		16,393
Non-traditional		37,775		32,886		1,084		783		259		1,047		1,667		49
Loss mitigation program		89,583		9,249		1,665		789		628		1,022		980		75,250
		750,307		564,373		38,123		19,167		5,161		15,716		16,075		91,692
Home equity secured personal loans		733		607		-		-		-		-		126		-
GNMA's buy-back option program		40,066		-		-		-		8,825		18,512		12,729		-
		791,106		564,980		38,123		19,167		13,986		34,228		28,930		91,692
Consumer
Credit cards		17,857		17,022		238		189		140		268		-		-
Overdrafts		340		318		20		2		-		-		-		-
Unsecured personal lines of credit		2,051		1,823		67		132		-		26		3		-
Unsecured personal loans		138,608		135,169		1,586		614		579		22		-		638
Cash collateral personal loans		17,026		16,644		214		132		36		-		-		-
		175,882		170,976		2,125		1,069		755		316		3		638
Auto and Leasing		542,892		475,120		43,537		15,956		5,662		2,617		-		-
		1,509,880		1,211,076		83,785		36,192		20,403		37,161		28,933		92,330
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		43,682		40,053		1,625		678		483		843		-		-
Personal loans		3,602		3,293		160		83		32		34		-		-
		47,284		43,346		1,785		761		515		877		-		-
Auto		210,808		193,762		11,372		4,137		1,209		328		-		-
		258,092		237,108		13,157		4,898		1,724		1,205		-		-
Total	$	1,767,972	$	1,448,184	$	96,942	$	41,090	$	22,127	$	38,366	$	28,933	$	92,330

	December 31, 2013
	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	$	76,512	$	64,743	$	6,594	$	1,634	$	868	$	1,082	$	1,458	$	133
Years 2003 and 2004		65,117		56,283		4,722		1,938		56		1,437		352		329
Year 2005		89,541		74,016		8,414		2,119		1,198		3,037		573		184
Year 2006		120,322		99,243		12,055		4,312		1,148		2,755		515		294
Years 2007, 2008 and 2009		101,150		91,920		3,464		1,104		1,264		2,844		554		-
Years 2010, 2011, 2012 and 2013		149,546		134,577		3,192		1,609		115		974		989		8,090
		602,188		520,782		38,441		12,716		4,649		12,129		4,441		9,030
Non-traditional		42,102		35,168		3,217		1,162		-		1,324		833		398
Loss mitigation program		86,318		7,762		1,376		149		624		312		1,029		75,066
		730,608		563,712		43,034		14,027		5,273		13,765		6,303		84,494
Home equity secured personal loans		736		598		-		-		-		126		12		-
GNMA's buy-back option program		34,921		-		-		-		7,670		14,425		12,826		-
		766,265		564,310		43,034		14,027		12,943		28,316		19,141		84,494
Consumer
Credit cards		15,241		14,555		287		168		118		113		-		-
Overdrafts		372		322		46		4		-		-		-		-
Unsecured personal lines of credit		1,981		1,844		33		38		25		34		7		-
Unsecured personal loans		94,560		92,102		1,272		399		300		39		13		435
Cash collateral personal loans		15,590		15,223		324		43		-		-		-		-
		127,744		124,046		1,962		652		443		186		20		435
Auto and Leasing		379,874		339,817		25,532		9,437		3,397		1,691		-		-
		1,273,883		1,028,173		70,528		24,116		16,783		30,193		19,161		84,929
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		52,199		46,713		2,217		1,200		828		1,241		-		-
Personal loans		3,975		3,681		196		7		60		31		-		-
		56,174		50,394		2,413		1,207		888		1,272		-		-
Auto		301,584		283,825		12,534		3,616		1,095		514		-		-
		357,758		334,219		14,947		4,823		1,983		1,786		-		-
Total	$	1,631,641	$	1,362,392	$	85,475	$	28,939	$	18,766	$	31,979	$	19,161	$	84,929

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share Text Block

NOTE 16 – EARNINGS PER COMMON SHARE

The calculation of earnings per common share for the quartersand nine-month periods ended September 30, 2014and 2013 is as

	Quarter ended September 30 ,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands, except per share data)
Net income	$	19,532	$	19,621	$	64,588	$	78,352
Less: Dividends on preferred stock
Non-convertible preferred stock (Series A, B, and D)		(1,627)		(1,628)		(4,882)		(4,884)
Convertible preferred stock (Series C)		(1,838)		(1,837)		(5,514)		(5,512)
Income available to common shareholders	$	16,067	$	16,156	$	54,192	$	67,956
Effect of assumed conversion of the convertible ' ' preferred stock		1,838		1,837		5,514		5,512
Income available to common shareholders assuming conversion	$	17,905	$	17,993	$	59,706	$	73,468
Weighted average common shares and share equivalents:
Average common shares outstanding		45,055		45,927		45,131		45,717
Effect of dilutive securities:
Average potential common shares-options		160		257		162		198
Average potential common shares-assuming ' ' conversion of convertible preferred stock		7,147		7,138		7,147		7,138
Total weighted average common shares ' 'outstanding and equivalents		52,362		53,322		52,440		53,053
Earnings per common share - basic	$	0.36	$	0.35	$	1.20	$	1.49
Earnings per common share - diluted	$	0.34	$	0.34	$	1.14	$	1.39

In computing diluted earnings per common share, the 84,000 shares of convertible preferred stock, which remain outstanding at September30, 2014, with a conversion rate, subject to certain conditions,of 85.2719shares of common stock per share, were included as average potential common shares from the date they were issued and outstanding. Moreover, in computing diluted earnings per common share, the dividends declared during the quarters ended September 30, 2014 and 2013 on the convertible preferred stock were added back as income available to common shareholders.

For the quartersended September 30, 2014 and 2013, weighted-average stock options with an anti-dilutive effect on earnings per share not included in the calculation amounted to 397,766 and196,425, respectively. For the nine-month periods ended September 30, 2014 and 2013, weighted-average stock options with an anti-dilutive effect on earnings per share not included in the calculation amounted to 325,994and 233,775, respectively.

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Related Party Transactions

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 12—RELATED PARTY TRANSACTIONS

The Bank grants loans to its directors, executive officers and to certain related individuals or organizations in the ordinary course of business. These loans are offered at the same terms as loans to unrelated third parties. As of September 30, 2014 and December 31,2013, these loanbalances amounted to $25.6 million and $19.0 million, respectively.The activity and balance of these loans for the quarters and nine-month periods endedSeptember 30, 2014and 2013were as follows:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Balance at the beginning of year	$	24,151	$	8,031	$	18,963	$	6,055
New loans		319		14,264		14,166		18,498
Repayments and sales		1,174		(3,289)		(7,485)		(5,315)
Credits of persons no longer considered related parties		-		-		-		(232)
Balance at the end of year	$	25,644	$	19,006	$	25,644	$	19,006

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Deposits and Related Interest (Interest expense) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Interest Expense Domestic Deposit Liabilities [Abstract]
Demand and saving deposits	$ 4,003	$ 5,596	$ 13,834	$ 16,994
Certificates of Deposits	3,658	5,738	11,970	13,763
Total	$ 7,661	$ 11,334	$ 25,804	$ 30,757

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Other Assets

9 Months Ended

Sep. 30, 2014

Accrued Interest Receivable And Other Assets [Abstract]

Other Assets Disclosure [Text Block]

NOTE 8—ACCRUED INTEREST RECEIVABLE ANDOTHER ASSETS

Accrued interest receivable at September 30, 2014 and December 31, 2013 consists of the following:

	September 30,		December 31,
	2014		2013
	(In thousands)
Non-covered loans	$	15,260	$	13,378
Investments		4,405		5,356
	$	19,665	$	18,734

Other assets at September 30, 2014 and December 31, 2013 consist of the following:

		September 30,		December 31,
	2014		2013
	(In thousands)
Prepaid expenses	$	18,375	$	15,439
Core deposit and customer relationship intangibles		10,285		11,912
Other repossessed assets		21,733		12,583
Mortgage tax credits		8,706		8,706
Investment in Statutory Trust		1,083		1,083
Accounts receivable and other assets		37,243		48,717
	$	97,425	$	98,440

Prepaid expenses amounting to $18.4 million and $15.4 million at September 30, 2014 and December 31, 2013, respectively, include prepaid municipal, property and income taxes aggregating to $12.8million and $8.6million, respectively.

In connection with the FDIC-assisted acquisition and the BBVAPR Acquisition, the Company recorded a core deposit intangible representing the value of checking and savings deposits acquired. At September 30, 2014 and December 31, 2013, this core deposit intangible amounted to $6.8million and $7.8million, respectively. In addition, the Company recorded a customer relationship intangible amounting to $5.0 million representing the value of customer relationships acquired with the acquisition of the securities broker-dealer and insurance agency in the BBVAPR Acquisition as of December 31, 2012. At September 30, 2014 and December 31, 2013, this customer relationship intangible amounted to $3.5million and $4.1million, respectively.

Other repossessed assets totaled $21.7 million and $12.6 million atSeptember 30, 2014 and December 31, 2013, respectively, include repossessed automobilesamounting to $21.0millionand $12.3million, respectively, which are recorded at their net realizable value.

At bothSeptember 30, 2014 and December 31, 2013, tax credits for the Companytotaled$8.7 million.These tax credits do not have an expiration date.

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Loans Receivable (Investment in non-covered loans on non-accrual status) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Non Covered Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 97,048	$ 83,277
Non-covered originated loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	92,881	76,907
Non-covered originated loans [Member] | Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	60,342	48,183
Non-covered originated loans [Member] | Traditional loan
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	39,559	26,942
Non-covered originated loans [Member] | Originated Up To The Year 2002 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	3,613	3,428
Non-covered originated loans [Member] | Originated In The Years 2003 And 2004 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	3,749	1,845
Non-covered originated loans [Member] | Originated In The Year 2005 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	9,117	4,922
Non-covered originated loans [Member] | Originated In The Year 2006 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	7,019	4,418
Non-covered originated loans [Member] | Originated In The Years 2007 2008 And 2009 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	9,817	4,511
Non-covered originated loans [Member] | Originated In The Years 2010 2011 2012 2013 And 2014 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	6,244	7,818
Non-covered originated loans [Member] | NonTraditional Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	3,022	2,311
Non-covered originated loans [Member] | Loss Mitigation Program [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	17,636	18,792
Non-covered originated loans [Member] | Home equity secured personal loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	125	138
Non-covered originated loans [Member] | Commercial Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	22,290	22,830
Non-covered originated loans [Member] | Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	19,550	19,103
Non-covered originated loans [Member] | Middle Market Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	10,608	11,895
Non-covered originated loans [Member] | Retail Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	8,942	7,208
Non-covered originated loans [Member] | Other Commercial and Industrial[Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	2,740	3,727
Non-covered originated loans [Member] | Middle Market Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	628	1,134
Non-covered originated loans [Member] | Retail Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	2,112	2,485
Non-covered originated loans [Member] | Floor Plan Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	0	108
Non-covered originated loans [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,241	805
Non-covered originated loans [Member] | Credit Cards [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	408	232
Non-covered originated loans [Member] | Overdrafts [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1	0
Non-covered originated loans [Member] | Unsecured personal lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	35	84
Non-covered originated loans [Member] | Unsecured personal loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	761	485
Non-covered originated loans [Member] | Cash collateral personal loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	36	4
Non-covered originated loans [Member] | Auto and Leasing loans receivable
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	9,008	5,089
Accounted for under ASC 310-20 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	4,167	6,370
Accounted for under ASC 310-20 [Member] | Commercial Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,019	2,543
Accounted for under ASC 310-20 [Member] | Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	443	1,057
Accounted for under ASC 310-20 [Member] | Retail Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	342	956
Accounted for under ASC 310-20 [Member] | Floor Plan Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	101	101
Accounted for under ASC 310-20 [Member] | Other Commercial and Industrial[Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	576	1,486
Accounted for under ASC 310-20 [Member] | Corporate Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	0	97
Accounted for under ASC 310-20 [Member] | Retail Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	455	1,371
Accounted for under ASC 310-20 [Member] | Floor Plan Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	121	18
Accounted for under ASC 310-20 [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,402	2,219
Accounted for under ASC 310-20 [Member] | Credit Cards [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,326	2,068
Accounted for under ASC 310-20 [Member] | Unsecured personal loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	76	151
Accounted for under ASC 310-20 [Member] | Auto and Leasing loans receivable
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 1,746	$ 1,608

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Fair Value (Assets and liabilities on recurring and non-recurring basis) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	$ 1,273,879	$ 1,588,425
Money Market Funds, at Carrying Value	7,777	6,967
Derivative Assets	8,445	20,502
Servicing Assets	13,986	13,801
Derivative liabilities	(11,414)	(14,937)
Other repossessed assets	21,733	12,583
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	1,273,879	1,568,745
Securities purchased under agreements to resell	0	60,000
Derivative Assets	2,683	4,072
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	19,680
Derivative Assets	5,762	16,430
Servicing Assets	13,986	13,801
Derivative liabilities	(5,588)	(15,736)
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	1,273,879	1,588,425
Securities purchased under agreements to resell	0	60,000
Money Market Funds, at Carrying Value	7,777	6,967
Derivative Assets	8,445	20,502
Servicing Assets	13,986	13,801
Derivative liabilities	(17,002)	(30,673)
Total	1,287,085	1,659,022
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Securities purchased under agreements to resell	0	0
Money Market Funds, at Carrying Value	7,777	6,967
Derivative Assets	0	0
Servicing Assets	0	0
Derivative liabilities	0	0
Total	7,777	6,967
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	1,273,879	1,568,745
Securities purchased under agreements to resell	0	60,000
Money Market Funds, at Carrying Value	0	0
Derivative Assets	2,683	4,072
Servicing Assets	0	0
Derivative liabilities	(11,414)	(14,937)
Total	1,265,148	1,617,880
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	19,680
Securities purchased under agreements to resell	0	0
Money Market Funds, at Carrying Value	0	0
Derivative Assets	5,762	16,430
Servicing Assets	13,986	13,801
Derivative liabilities	(5,588)	(15,736)
Total	14,160	34,175
Fair Value, Measurements, Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Commercial Loan	226,791	28,353
Foreclosed real estate	100,564	90,024
Other repossessed assets	21,733	12,583
Total	349,088	130,960
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Commercial Loan	0	0
Foreclosed real estate	0	0
Other repossessed assets	0	0
Total	0	0
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Commercial Loan	0	0
Foreclosed real estate	0	0
Other repossessed assets	0	0
Total	0	0
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Commercial Loan	226,791	28,353
Foreclosed real estate	100,564	90,024
Other repossessed assets	21,733	12,583
Total	$ 349,088	$ 130,960

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FDIC Asset and True-up Payment Obligation

9 Months Ended

Sep. 30, 2014

Banking and Thrift [Abstract]

FDIC Indemnification Asset and True-up Payment Obligation [Text Block]

NOTE 6- FDIC INDEMNIFICATION ASSET AND TRUE-UP PAYMENT OBLIGATION

In connection with the FDIC assisted acquisition, the Bank and the FDIC entered into shared-loss agreements pursuant to which the FDICcovers a substantial portion of any losses on loans (and related unfunded loan commitments), foreclosed real estate and other repossessed properties covered by the agreements.

The acquired loans, foreclosed real estate, and other repossessed properties subject to the shared-loss agreements are collectively referred to as “covered assets.” Under the terms of the shared-loss agreements, the FDIC absorbs80% of losses and shares in 80% of loss recoveries on covered assets. The term of the shared-loss agreementcovering single family residential mortgage loans is ten years with respect to losses and loss recoveries, while theterm of the shared-loss agreement covering commercial loans is five years with respect to losses and eight yearswith respect to loss recoveries, from the April 30, 2010 acquisition date. The shared-loss agreements also provide for certain costs directly related to the collection and preservation of covered assets to be reimbursed at an 80% level. The FDIC indemnification asset represents the portion of estimated losses covered by the shared-loss agreements between the Bank and the FDIC.

The following table presents the activity in the FDIC indemnification assetand true-up payment obligation for the quartersand nine month periods ended September 30, 2014 and 2013:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2014		2013		2014		2013
	(In thousands)
FDIC indemnification asset:
Balance at beginning of period	$	143,660	$	253,379	$	189,240	$	302,295
Shared-loss agreements reimbursements from the FDIC		(12,837)		(14,036)		(31,537)		(32,732)
Increase (decrease) in expected credit losses to be covered under shared-loss agreements, net		1,597		(510)		5,159		(2,525)
FDIC indemnification asset expense		(16,059)		(15,198)		(51,180)		(46,623)
Incurred expenses to be reimbursed under shared-loss agreements		4,258		1,947		8,937		5,167
Balance at end of period	$	120,619	$	225,582	$	120,619	$	225,582
True-up payment obligation:
Balance at beginning of period	$	20,231	$	16,907	$	18,510	$	15,496
Change in true-up payment obligation		875		767		2,596		2,178
Balance at end of period	$	21,106	$	17,674	$	21,106	$	17,674

The FDIC shared- loss expense bears an inverse relationship with a change in the yield of covered pools in accordance with ASC 310-30. ASC 310-30 dictates that such pools should be subject to increases in their yield when the present value of the expected cash flows is higher than the pool's carrying balance. When the increases in cash flow expectations are driven by reductions in the expected credit losses, the Bank recognizes that such losses are no longer expected to be collected from the FDIC. Accordingly, the Bank reduces the FDIC indemnification asset by amortizing the reduction in expected collections throughout the remaining life of the underlying pools. This amortization is recognized in the FDICshared-loss expense.

The underlying factors that caused an increase in the expected cash flows and resulting reduction in projected losses are derived from the pool-level cash flow forecasts. Credit loss assumptions used to develop each pool-level cash flow forecast are based on the behavior of defaults, recoveries and losses of the corresponding pool of covered loans.

The FDIC indemnification assetexpense of $16.1 million and $51.2 million for the quarter and nine-month periodended September 30, 2014increased when comparedto $15.2 millionand $46.6million for the same periods in 2013. These changes were caused by the ongoing evaluation of expected cash flows of the covered loan portfolio, which resulted in reduced projected losses expected to be collected from the FDIC and the improved accretable yield on the covered loans. Forecasted losses show a decreasing trend during the nine-month period endedSeptember 30, 2014 as compared to the projections in 2013.The reduction in claimable losses amortizes the FDIC indemnification asset through theshorter of the life of the shared loss agreement or the loan holding period. This amortization is net of the accretion of the discount recorded to reflect the expected claimable loss at its net present value. During the quarterand nine-month period ended September 30, 2014, the net amortization included $2.6 million and $7.7million of additional amortization of the FDIC indemnification asset from stepped up cost recoveries on certain construction, commercial, and leasing loan pools. Additional amortization of the FDIC indemnification asset may be recorded, should the Company continue to experience reduced expected losses. The majority of the FDIC indemnification asset, $84.3million, is recorded for projected claimable losses on non-single family residential loans whose loss share period ends in the second quarter of 2015, although the period during which recoveries are shared extends for an additional three-years.

Also in connection with the FDIC assisted acquisition, the Bank agreed to make a true-up payment, also known as clawback liability or clawback provision, to the FDIC on the date that is 45 days following the last day (such day, the “True-Up Measurement Date”) of the final shared-loss month, or upon the final disposition of all covered assets under the shared-loss agreements in the event losses thereunder fail to reach expected levels. Under the shared-loss agreements, the Bank will pay to the FDIC 50% of the excess, if any, of: (i) 20% of the Intrinsic Loss Estimate of $906.0 million (or $181.2 million) (as determined by the FDIC) less (ii) the sum of: (A) 25% of the asset discount (per bid) (or $227.5 million); plus (B) 25% of the cumulative shared-loss payments (defined as the aggregate of all of the payments made or payable to the Bank minus the aggregate of all of the payments made or payable to the FDIC); plus (C) the sum of the period servicing amounts for every consecutive twelve-month period prior to and ending on the True-Up Measurement Date in respect of each of the shared-loss agreements during which the shared-loss provisions of the applicable shared-loss agreement is in effect (defined as the product of the simple average of the principal amount of shared-loss loans and shared-loss assets at the beginning and end of such period times 1%). The true-up payment represents an estimated liability of $21.1million and $18.5million, net of discount, as of September 30, 2014 and December 31, 2013, respectively. The estimated liability is included within accrued expenses and other liabilities in the unaudited consolidated statements of financial condition.

The true-up payment obligation, also known as clawback liability, may increase if actual and expected losses decline. The Company measures the true-up payment obligation at fair value. During the quarter and nine-month period ended September 30, 2014, the fair value of the true-up payment obligation increased by $875 thousand and $2.6 million, respectively, compared toincreases of $767 thousand and $2.2 million for the same periods in 2013. These changes in fair value are included as change in true-up payment obligation within FDIC shared-loss expense, netin the unaudited consolidated statements of operations.

The following table provides the fair value and the undiscounted amount of the true-up payment obligation at September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
	(In thousands)
Carrying amount (fair value)	$	21,106	$	18,510
Undiscounted amount	$	40,638	$	40,199

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Derivative Activities

9 Months Ended

Sep. 30, 2014

Derivative Activities [Abstract]

Derivative Acitivities

NOTE 7— DERIVATIVES

The following table presents the Company's derivative assets and liabilities at September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
	(In thousands)
Derivative assets:
Options tied to S&P 500 Index	$	5,762	$	16,430
Interest rate swaps designated as cash flow hedges		-		850
Interest rate swaps not designated as hedges		2,451		2,861
Interest rate caps		224		319
Other		8		42
	$	8,445	$	20,502
Derivative liabilities:
Interest rate swaps designated as cash flow hedges		8,717		11,757
Interest rate swaps not designated as hedges		2,451		2,861
Interest rate caps		224		319
Other		22		-
	$	11,414	$	14,937

Interest Rate Swaps

The Company enters into interest rate swap contracts to hedge the variability of future interest cash flows offorecasted wholesale borrowings attributable to changes in a predetermined variable index rate. The interest rate swaps effectively fix the Company's interest paymentson an amount of forecasted interest expense attributable to the variable index rate corresponding to the swapnotional stated rate. These swaps are designated as cash flow hedges for the forecastedwholesale borrowing transactions,are properly documented as such, and therefore, qualify for cash flow hedgeaccounting. Any gain or loss associated with the effective portion of our cash flow hedges was recognized in other comprehensive income and is subsequently reclassified into earnings in the period during which the hedged forecasted transactions affect earnings. Changes in the fair value of these derivatives are recorded in accumulated other comprehensive income to the extent there is no significant ineffectiveness in the cash flow hedging relationships. Currently, the Company does not expect to reclassify any amount included in other comprehensive income related to these interest rate swaps to earnings in the next twelve months.

The following table shows a summary of these swaps and their terms at September 30, 2014:

	Notional		Fixed	Variable	Trade	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date	Date
	(In thousands)
Interest Rate Swaps	$	25,000	2.4365%	1-Month LIBOR	05/05/11	05/04/12	05/04/16
		25,000	2.6200%	1-Month LIBOR	05/05/11	07/24/12	07/24/16
		25,000	2.6350%	1-Month LIBOR	05/05/11	07/30/12	07/30/16
		50,000	2.6590%	1-Month LIBOR	05/05/11	08/10/12	08/10/16
		100,000	2.6750%	1-Month LIBOR	05/05/11	08/16/12	08/16/16
		39,641	2.4210%	1-Month LIBOR	07/03/13	07/03/13	08/01/23
	$	264,641

An unrealized loss of $8.7million was recognized in accumulated other comprehensive income related to the valuation of these swaps at September 30, 2014, and the related asset and liability are being reflected in the accompanying unaudited consolidated statements of financial condition.

At September 30, 2014 and December 31, 2013, interest rate swaps not designated as hedging instruments that were offered to clients represented an asset of $2.5million and $2.9 million, respectively,and were included as part of derivative assets in the unaudited consolidated statements of financial position.The credit risk to these clients stemming from these derivatives, if any, is not material. At September30, 2014 and December 31, 2013, interest rate swaps not designated as hedging instruments that are the mirror-images of the derivatives offered to clients represented a liability of $2.5 million and $2.9 million, respectively, and were included as part of derivative liabilities in the unaudited consolidated statements of financial condition.

The following table shows a summary of these interest rate swaps not designated as hedging instruments and their terms at September30, 2014:

	Notional		Fixed	Variable	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date
	(In thousands)
Interest Rate Swaps - Derivatives Offered to Clients	$	4,003	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,503
Interest Rate Swaps - Mirror Image Derivatives	$	4,003	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,503

Options Tied to Standard & Poor's 500 Stock Market Index

The Companyhas offered its customers certificates of deposit with an option tied to the performance of the S&P 500 Index. The Company uses option agreements with major broker-dealers to manage its exposure to changes in this index. Under the terms of the option agreements, the Company receives the average increase in the month-end value of the index in exchange for a fixed premium. The changes in fair value of the option agreements used to manage the exposure in the stock market in the certificates of deposit are recorded in earnings. At September 30, 2014 andDecember 31, 2013, the purchased options used to manage exposure to the S&P 500 Index on stock indexed deposits represented an asset of $5.8 million (notional amount of $12.0million) and $16.4 million (notional amount of $28.0million), respectively, and the options sold to customers embedded in the certificates of deposit and recorded as deposits in the unauditedconsolidated statements of financial condition, represented a liability of $5.6million (notional amount of $11.6million) and $15.7million (notional amount of $26.9million), respectively.

Interest rate caps

The Companyhas entered into interest rate cap transactionswith various clients with floating-rate debt who wish to protect their financial results against increases in interest rates. In these cases, theCompanysimultaneously enters into mirror-image interest rate cap transactions with financial counterparties. None of these cap transactions qualify for hedge accounting, and therefore, they are marked to market through earnings.The outstanding total notional amount of interest rate caps was $110.0 million at September30, 2014 and $94.0million atDecember 31, 2013. At September 30, 2014 and December 31, 2013, the interest rate caps sold to clients represented a liability of $224thousand and $319 thousand, respectively, and were included as part of derivative liabilities in the unaudited consolidated statements of financial condition. At September30, 2014 and December 31, 2013, the interest rate caps purchased as mirror-images represented an asset of $224 thousand and $319 thousand, respectively, and were included as part of derivative assets in the unaudited consolidated statements of financial condition.

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Deposits and Related Interest

9 Months Ended

Sep. 30, 2014

Deposits and Related Interest [Abstract]

Deposit and Related Interest

NOTE 9— DEPOSITS AND RELATED INTEREST

Total deposits as of September 30, 2014 and December 31, 2013consist of the following:

	September 30,		December 31,
	2014		2013
	(In thousands)
Non-interest bearing demand deposits	$	734,449	$	744,327
Interest-bearing savings and demand deposits		2,566,952		2,489,971
Individual retirement accounts		314,813		347,262
Retail certificates of deposit		455,286		568,367
Institutional certificates of deposit		328,031		405,224
Total core deposits		4,399,531		4,555,151
Brokered deposits		669,644		828,114
Total deposits	$	5,069,175	$	5,383,265

Brokered deposits include $575.8million in certificates of deposits and $93.7million in money market accounts at September 30, 2014, and $729.8 millionin certificates of deposits and $98.3 million in money market accounts at December 31, 2013.

The weighted average interest rate of the Company's deposits was 0.75% at September 30, 2014and 0.73% at December 31, 2013, inclusive of non-interest bearing deposits of$734.4million and $744.3 million, respectively.Interest expense for the quartersand nine-month periodsended September 30, 2014 and2013 was as follows:

	Quarter Ended September 30,					Nine-Month Period Ended September 30,
	2014		2013			2014		2013
	(In thousands)
Demand and savings deposits	$	4,003	$	5,596	$	13,834	$	16,994
Certificates of deposit		3,658		5,738		11,970		13,763
	$	7,661	$	11,334	$	25,804	$	30,757

At September 30, 2014 and December 31,2013, demand and interest-bearing deposits and certificates of depositincluded deposits of Puerto Rico Cash & Money Market Fund, Inc.,which amounted to $108.9 million and $93.1 million, respectively, with a weighted average rate of 0.78% in both years,and were collateralized with investment securities with a fair value of $83.4million and$67.5 million, respectively.

At September 30, 2014 and December 31, 2013, time deposits in denominations of $100 thousand or higher, excluding accrued interest and unamortized discounts, amounted to $681.6million and $845.8 million, including public fund time deposits from various Puerto Rico government municipalities, agencies, and corporationsof $20.8million and $26.7million, respectively, at a weighted average rate of 0.53% atSeptember 30, 2014 and0.32% atDecember 31, 2013.

At September 30, 2014 and December 31, 2013, total public fund deposits from various Puerto Rico government municipalities, agencies, and corporationsamounted to $359.2million and $328.6 million, respectively. These public fundswere collateralized with commercial loans amounting to $416.0million atSeptember 30, 2014, and with investment securities with a fair value of$97.8 million and commercial loans amounting to $549.0million at December 31, 2013.

Excluding equity indexed options in the amount of $4.4million, which are used by the Company to manage its exposure to the S&P 500 Index, and also excluding accrued interest of $1.3million and unamortized deposit discount in the amount of $1.1million, the scheduled maturities of certificates of deposit at September 30, 2014are as follows:

	September 30, 2014
	(In thousands)
Within one year:
Three (3) months or less	$	342,429
Over 3 months through 1 year		590,965
		933,394
Over 1 through 2 years		454,186
Over 2 through 3 years		210,567
Over 3 through 4 years		50,067
Over 4 through 5 years		18,926
	$	1,667,140

The table of scheduled maturities of certificates of depositsabove includes brokered deposits.

The aggregate amount of overdrafts in demand deposit accounts that were reclassified to loans amounted to $890thousand and $1.8million as of September 30, 2014 and December 31, 2013, respectively.

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Loans Receivable (TDR Pre/Post Modifications) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014 number	Sep. 30, 2013 number	Sep. 30, 2014 number	Sep. 30, 2013 number	Dec. 31, 2012 number
Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts	26	21	113	102	187
Financing Receivable Modifications Pre Modification Recorded Investment	$ 3,016	$ 2,887	$ 14,562	$ 12,828	$ 24,722
Pre Modification Weighted Average Rate	5.62%	6.74%	5.99%	6.43%	6.74%
Pre Modification Weighted Average Term	347 months	352 months	349 months	334 months	319 months
Financing Receivable Modifications Post Modification Recorded Investment	2,965	3,066	14,162	13,685	26,620
Post Modification Weighted Average Rate	4.22%	6.74%	4.21%	5.15%	5.52%
Post Modification Weighted Average Term	393 months	351 months	389 months	393 months	385 months
Commercial Loan [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts	20	0	21	2	17
Financing Receivable Modifications Pre Modification Recorded Investment	200,007	0	200,080	1,842	15,642
Pre Modification Weighted Average Rate	7.25%	0.00%	7.25%	8.99%	4.03%
Pre Modification Weighted Average Term	3 months	0 months	3 months	87 months	68 months
Financing Receivable Modifications Post Modification Recorded Investment	200,007	0	200,080	1,842	12,413
Post Modification Weighted Average Rate	7.25%	0.00%	7.25%	4.00%	3.59%
Post Modification Weighted Average Term	10 months	0 months	10 months	66 months	75 months
Consumer Loan [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts	6	0	13	0
Financing Receivable Modifications Pre Modification Recorded Investment	58	0	123	0
Pre Modification Weighted Average Rate	10.00%	0.00%	11.77%	0.00%
Pre Modification Weighted Average Term	61 months	0 months	66 months	0 months
Financing Receivable Modifications Post Modification Recorded Investment	$ 68	$ 0	$ 136	$ 0
Post Modification Weighted Average Rate	9.66%	0.00%	11.48%	0.00%
Post Modification Weighted Average Term	55 months	0 months	62 months	0 months

XML

Deposits and Related Interest (Maturities of Time Deposits) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014
Maturities of Time Deposits [Abstract]
Time Deposit Maturities Less Than Three Month	$ 342,429
Time Deposit Maturities Three To Twelve Month	590,965
Total Time deposits	933,394
Time Deposit Maturities, Year Two	454,186
Time Deposit Maturities, Year Three	210,567
Time Deposit Maturities, Year Four	50,067
Time Deposit Maturities, Year Five	18,926
Certificates of deposit	$ 1,667,140

XML

Loans Receivable (Credit Quality Indicator of non-covered loans) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 4,589,736	$ 4,669,192
Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,727,115	2,401,540
Doubtful	0
Financing Receivable, Individually Evaluated for Impairment	318,275	112,639
Commercial Secured [Member] | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	470,878	400,561
Pass	404,384	354,415
Special Mention	41,370	18,809
Substandard	2,542	2,376
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	22,582	24,961
Commercial Secured [Member] | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	8,643	18,613
Pass	8,286	17,120
Special Mention	0	443
Substandard	357	1,050
Doubtful		0
Financing Receivable, Individually Evaluated for Impairment	0	0
Corporate | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	113,976	54,796
Pass	90,006	54,796
Special Mention	23,970	0
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Corporate | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,746	10,166
Pass	3,746	10,166
Special Mention	0	0
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Institutional | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	37,177	4,050
Pass	27,232	4,050
Special Mention	9,702	0
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	243	0
Institutional | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0
Pass	0
Special Mention	0
Substandard	0
Doubtful	0
Financing Receivable, Individually Evaluated for Impairment	0
Middle Market | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	144,539	161,583
Pass	127,640	133,061
Special Mention	3,707	16,627
Substandard	0	118
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	13,192	11,777
Middle Market | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0
Pass	0
Special Mention	0
Substandard	0
Doubtful	0
Financing Receivable, Individually Evaluated for Impairment	0
Retail | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	161,642	166,642
Pass	147,034	149,018
Special Mention	3,020	2,182
Substandard	2,441	2,258
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	9,147	13,184
Retail | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	824	5,770
Pass	467	4,378
Special Mention	0	443
Substandard	357	949
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Floor Plan | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,666	1,835
Pass	594	1,835
Special Mention	971	0
Substandard	101	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Floor Plan | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,073	2,677
Pass	4,073	2,576
Special Mention	0	0
Substandard	0	101
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Real Estate | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	11,878	11,655
Pass	11,878	11,655
Special Mention	0	0
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Real Estate | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0
Pass	0
Special Mention	0
Substandard	0
Doubtful	0
Financing Receivable, Individually Evaluated for Impairment	0
Other commercial and industrial [Member] | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	746,357	727,096
Pass	535,184	719,003
Special Mention	4,599	3,911
Substandard	2,573	997
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	204,001	3,185
Other commercial and industrial [Member] | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	18,341	59,068
Pass	17,932	57,509
Special Mention	9	318
Substandard	400	1,241
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Corporate | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	60,402	32,598
Pass	60,402	32,598
Special Mention	0	0
Substandard	0	0
Doubtful		0
Financing Receivable, Individually Evaluated for Impairment	0	0
Corporate | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,915	9,793
Pass	2,915	9,696
Special Mention	0	0
Substandard	0	97
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Institutional | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	482,275	536,445
Pass	282,293	536,445
Special Mention	0	0
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	199,982	0
Institutional | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0
Pass	0
Special Mention	0
Substandard	0
Doubtful	0
Financing Receivable, Individually Evaluated for Impairment	0
Middle Market | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	83,206	58,897
Pass	77,504	53,868
Special Mention	3,144	3,466
Substandard	0	198
Doubtful		0
Financing Receivable, Individually Evaluated for Impairment	2,558	1,365
Middle Market | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0
Pass	0
Special Mention	0
Substandard	0
Doubtful	0
Financing Receivable, Individually Evaluated for Impairment	0
Retail | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	80,813	61,510
Pass	76,684	58,742
Special Mention	308	257
Substandard	2,360	691
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	1,461	1,820
Retail | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	8,021	27,338
Pass	7,612	26,044
Special Mention	9	150
Substandard	400	1,144
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Floor Plan | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	39,661	37,646
Pass	38,301	37,350
Special Mention	1,147	188
Substandard	213	108
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Floor Plan | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	7,405	21,937
Pass	7,405	21,769
Special Mention	0	168
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Commercial and Industrial | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Doubtful	0
Total Commercial subject to risk rating [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,244,219	1,205,338
Pass	965,786	1,148,047
Special Mention	45,978	23,481
Substandard	5,872	5,664
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	226,583	28,146
Total Commercial subject to risk rating [Member] | Non-covered originated loans [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,217,235	1,127,657
Pass	939,568	1,073,418
Special Mention	45,969	22,720
Substandard	5,115	3,373
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	226,583	28,146
Total Commercial subject to risk rating [Member] | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	26,984	77,681
Pass	26,218	74,629
Special Mention	9	761
Substandard	757	2,291
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	$ 0	$ 0

XML

Accumulated Other Comprehensive Income (Reclassifications out of other comprehensive income) (Details) (Reclassification out of Accumulated Other Comprehensive Income [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Interest Rate Contract	$ 1,656	$ 1,651	$ 4,919	$ 4,403
Tax Effect Reclassified From Accumulated OCI Into Income Tax Provision	11	37	158	126
Total	$ 1,667	$ 1,688	$ 5,077	$ 4,529

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Loans Receivable (Recorded Investment in Covered Loan Pools) (Details) (USD $) In Thousands, unless otherwise specified							3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2014 Covered Loan [Member]	Dec. 31, 2013 Covered Loan [Member]	Sep. 30, 2014 Loans Secured by 1-4 properties Covered Loan [Member]	Dec. 31, 2013 Loans Secured by 1-4 properties Covered Loan [Member]	Sep. 30, 2014 Construction and development secured by multi-family properties [Member] Covered Loan [Member]	Dec. 31, 2013 Construction and development secured by multi-family properties [Member] Covered Loan [Member]	Sep. 30, 2014 Other Commercial and Industrial[Member] Covered Loan [Member]	Dec. 31, 2013 Other Commercial and Industrial[Member] Covered Loan [Member]	Sep. 30, 2014 Consumer Loan [Member] Covered Loan [Member]	Dec. 31, 2013 Consumer Loan [Member] Covered Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal							$ 313,541	$ 338,257	$ 138,029	$ 52,142	$ 61,562	$ 66,037	$ 105,542	$ 209,566	$ 8,408	$ 10,512
Recorded Investment							205,340	173,286	106,823	38,179	20,249	17,304	73,424	111,946	4,844	5,857
Allowance for loan and lease losses, covered	$ 62,227	$ 59,515	$ 52,729	$ 56,555	$ 53,992	$ 54,124	$ 62,227	$ 52,729	$ 15,252	$ 12,495	$ 8,679	$ 6,866	$ 37,907	$ 32,753	$ 389	$ 615
Coverage							30.00%	30.00%	14.00%	33.00%	43.00%	40.00%	52.00%	29.00%	8.00%	11.00%

XML

Offsetting Arrangements (Assets Offsetting) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Offsetting Assets [Line Items]
Gross Amount of Recognized Assets	$ 8,445	$ 80,502
Gross amounts Offset in the Statement of Financial Condition	0	0
Net Amount of Assets in Statement of Financial Condition	8,445	80,502
Financial Instruments	2,003	67,037
Cash Collateral Received	0	6,780
Net Amount	6,442	6,685
Derivative
Offsetting Assets [Line Items]
Gross Amount of Recognized Assets	8,445	20,502
Gross amounts Offset in the Statement of Financial Condition	0	0
Net Amount of Assets in Statement of Financial Condition	8,445	20,502
Financial Instruments	2,003	2,450
Cash Collateral Received	0	6,780
Net Amount	6,442	11,272
Federal Funds Sold and Securities Borrowed or Purchased under Agreements to Resell
Offsetting Assets [Line Items]
Gross Amount of Recognized Assets		60,000
Gross amounts Offset in the Statement of Financial Condition		0
Net Amount of Assets in Statement of Financial Condition		60,000
Financial Instruments		64,587
Cash Collateral Received		0
Net Amount		$ (4,587)

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Derivative Activities (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instrument Detail [Abstract]

Schedule Of Derivative Instruments Text Block

The following table presents the Company's derivative assets and liabilities at September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
	(In thousands)
Derivative assets:
Options tied to S&P 500 Index	$	5,762	$	16,430
Interest rate swaps designated as cash flow hedges		-		850
Interest rate swaps not designated as hedges		2,451		2,861
Interest rate caps		224		319
Other		8		42
	$	8,445	$	20,502
Derivative liabilities:
Interest rate swaps designated as cash flow hedges		8,717		11,757
Interest rate swaps not designated as hedges		2,451		2,861
Interest rate caps		224		319
Other		22		-
	$	11,414	$	14,937

The following table shows a summary of these swaps and their terms at September 30, 2014:

	Notional		Fixed	Variable	Trade	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date	Date
	(In thousands)
Interest Rate Swaps	$	25,000	2.4365%	1-Month LIBOR	05/05/11	05/04/12	05/04/16
		25,000	2.6200%	1-Month LIBOR	05/05/11	07/24/12	07/24/16
		25,000	2.6350%	1-Month LIBOR	05/05/11	07/30/12	07/30/16
		50,000	2.6590%	1-Month LIBOR	05/05/11	08/10/12	08/10/16
		100,000	2.6750%	1-Month LIBOR	05/05/11	08/16/12	08/16/16
		39,641	2.4210%	1-Month LIBOR	07/03/13	07/03/13	08/01/23
	$	264,641

	Notional		Fixed	Variable	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date
	(In thousands)
Interest Rate Swaps - Derivatives Offered to Clients	$	4,003	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,503
Interest Rate Swaps - Mirror Image Derivatives	$	4,003	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,503

XML

Investment Securities (Gross realize gains and losses by category) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Schedule of Available-for-sale Securities [Line Items]
Sale Price	$ 189,249
Book Value	184,883
Available-for-sale Securities, Gross Realized Gains	4,366
Available-for-sale Securities, Gross Realized Losses	0
Collateralized Mortgage Backed Securities [Member] | FNMA and FHLMC [Member]
Schedule of Available-for-sale Securities [Line Items]
Sale Price	115,158
Book Value	110,792
Available-for-sale Securities, Gross Realized Gains	4,366
Available-for-sale Securities, Gross Realized Losses	0
Collateralized Mortgage Backed Securities [Member] | GNMA [Member]
Schedule of Available-for-sale Securities [Line Items]
Sale Price	74,091
Book Value	74,091
Available-for-sale Securities, Gross Realized Gains	0
Available-for-sale Securities, Gross Realized Losses	$ 0

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Stockholders' Equity

9 Months Ended

Sep. 30, 2014

Stockholders' Equity [Abstract]

Stockholders' equity

NOTE 14— STOCKHOLDERS' EQUITY

RegulatoryCapital Requirements

The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirementsadministered by federal and Puerto Rico banking agencies. Failure to meet minimum capital requirements can initiate certainmandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a directmaterial effect on the Company's financial statements. Under capital adequacy guidelines and theregulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Pursuant to the Dodd-Frank Act, federal banking regulatorshave adopted new capital rules thatbecame effective January 1, 2014 for advanced approaches banking organizations and will become effective January 1,2015 for all other covered organizations (subject to certain phase-in periods through January 1, 2019) and that will replace their general risk-based capital rules, advanced approaches rule, market risk rule, and leverage rules.Quantitative measures established by regulation to ensure capital adequacy currently require the Company and the Bank tomaintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined inthe regulations) to risk-weighted assets (as defined in the regulations) and of Tier 1 capital to average total assets (asdefined in the regulations). As of September 30, 2014 and December 31, 2013, the Company and the Bank met all capital adequacy requirements to which they are subject. As of September30, 2014 and December 31, 2013, the Bank is“well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “wellcapitalized,” an institution must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratiosas set forth in the tables presented below.

The Company's and the Bank's actual capital amounts and ratios as of September 30, 2014 and December 31, 2013 are as follows

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio		Amount	Ratio
	(Dollars in thousands)
Company Ratios
As of September 30, 2014
Total capital to risk-weighted assets	$	858,356	17.50%	$	392,465	8.00%	$	490,581	10.00%
Tier 1 capital to risk-weighted assets	$	782,797	15.96%	$	196,233	4.00%	$	294,349	6.00%
Tier 1 capital to average total assets	$	782,797	10.51%	$	297,984	4.00%	$	372,480	5.00%
As of December 31, 2013
Total capital to risk-weighted assets	$	827,459	16.16%	$	409,514	8.00%	$	511,893	10.00%
Tier 1 capital to risk-weighted assets	$	736,106	14.38%	$	204,757	4.00%	$	307,136	6.00%
Tier 1 capital to average total assets	$	736,106	9.06%	$	324,910	4.00%	$	406,138	5.00%

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Bank Ratios
As of September 30, 2014
Total capital to risk-weighted assets	$	813,760	16.66%	$	390,644	8.00%	$	488,305	10.00%
Tier 1 capital to risk-weighted assets	$	738,482	15.12%	$	195,322	4.00%	$	292,983	6.00%
Tier 1 capital to average total assets	$	738,482	9.99%	$	295,673	4.00%	$	369,592	5.00%
As of December 31, 2013
Total capital to risk-weighted assets	$	779,413	15.30%	$	407,637	8.00%	$	509,547	10.00%
Tier 1 capital to risk-weighted assets	$	688,350	13.51%	$	203,819	4.00%	$	305,728	6.00%
Tier 1 capital to average total assets	$	688,350	8.54%	$	322,395	4.00%	$	402,993	5.00%

Additional Paid-in Capital

Additional paid-in capital represents contributed capital in excess of par value of common and preferred stock net of the costs of issuance. As of September 30, 2014, accumulated issuance costs charged against additional paid in capital amounted to $10.1 million and $13.6 million for preferred and common stock, respectively.

Treasury Stock

Under the Company's current stock repurchase program it is authorized to purchase in the open market up to $70 million of its outstanding shares of common stock, of which approximately $23.2 million of authority remains. The shares of common stock repurchased are to be held by the Company as treasury shares. During the nine-month period ended September 30, 2014, the Company purchased 707,500 shares under this program for a total of $10.4 million, at an average price of $14.66 per share. There were no repurchases during 2013.

The following table presents the shares repurchased for each month in the nine-month period ended September 30, 2014, excluding the months of March, April, May, June, Julyand September of 2014, during which no shares were purchased as part of the stock repurchase program:

	Total number of				Dollar amount of
	shares purchased as		Average		shares repurchased
		part of stock	price paid		(excluding
	repurchase programs		per share		commissions paid)
						(In thousands)
Period
January 2014		57,700	$	14.73	$	850
February 2014		649,700		14.66		9,522
August 2014		100		15.50		2
Nine-Month Period Ended September 30, 2014		707,500	$	14.66	$	10,374

The number of shares that may yet be purchased under the $70 million program is estimated at 1,548,481and was calculated by dividing the remaining balance of $23.2million by $14.98(closing price of the Company common stock at September 30, 2014). The Company did not purchase any shares of its common stock other than through its publicly announced stock repurchase program during the nine-months ended September 30, 2014.

The activity in connection with common shares held in treasury by the Company for the nine-month periods ended September 30, 2014 and 2013 is set forth below:

	Nine-Month Period Ended September 30,
	2014			2013
		Dollar			Dollar
	Shares	Amount		Shares	Amount
	(In thousands, except shares data)
Beginning of period	7,030,101	$	80,642	7,090,597	$	81,275
Common shares used upon lapse of restricted stock units	(36,294)		(384)	(53,178)		(556)
Common shares repurchased as part of the stock repurchase program	707,500		10,394	-		-
Common shares used to match defined contribution plan, net	-		-	(7,318)		(77)
End of period	7,701,307	$	90,652	7,030,101	$	80,642

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Segment Reporting (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Total interest income	$ 120,301	$ 121,101	$ 369,275	$ 361,574
Interest expense	(18,430)	(22,010)	(57,928)	(62,574)
Net interest income	101,871	99,091	311,347	299,000
Provision For Non Covered Loan And Lease Losses.	(16,142)	(9,900)	(39,424)	(55,343)
Provision for Covered Loan and Lease Losses, net	(1,115)	(3,074)	(4,339)	(4,957)
Total non-interest income (loss), net	2,491	3,323	8,227	19,963
Non-interest expenses	(59,575)	(63,234)	(180,827)	(198,534)
Total assets	7,673,339		7,673,339		8,158,015
Banking [Member]
Segment Reporting Information [Line Items]
Total interest income	108,548	109,311	330,148	325,432
Interest expense	(7,892)	(10,994)	(26,235)	(31,490)
Net interest income	100,656	98,317	303,913	293,942
Provision For Non Covered Loan And Lease Losses.	(16,142)	(9,900)	(39,424)	(55,343)
Provision for Covered Loan and Lease Losses, net	(1,115)	(3,074)	(4,339)	(4,957)
Total non-interest income (loss), net	(3,242)	(3,960)	(14,845)	(7,151)
Non-interest expenses	(53,669)	(52,615)	(156,867)	(168,119)
Intersegment revenues	431	562	1,410	1,524
Intersegment expenses	(290)	0	(290)	0
Income (loss) before Income Taxes, Parent	26,629	29,330	89,558	59,896
Total assets	6,494,141	6,542,840	6,494,141	6,542,840
Financial Services
Segment Reporting Information [Line Items]
Total interest income	44	95	132	277
Interest expense	0	0	0	0
Net interest income	44	95	132	277
Provision For Non Covered Loan And Lease Losses.	0	0	0	0
Provision for Covered Loan and Lease Losses, net	0	0	0	0
Total non-interest income (loss), net	6,208	7,114	20,232	22,915
Non-interest expenses	(4,483)	(6,168)	(15,629)	(18,945)
Intersegment revenues	0	0	0	0
Intersegment expenses	(330)	(461)	(1,089)	(1,247)
Income (loss) before Income Taxes, Parent	1,439	580	3,646	3,000
Total assets	26,800	40,994	26,800	40,994
Treasury [Member]
Segment Reporting Information [Line Items]
Total interest income	11,709	11,695	38,995	35,865
Interest expense	(10,538)	(11,016)	(31,693)	(31,084)
Net interest income	1,171	679	7,302	4,781
Provision For Non Covered Loan And Lease Losses.	0	0	0	0
Provision for Covered Loan and Lease Losses, net	0	0	0	0
Total non-interest income (loss), net	(475)	169	2,840	4,199
Non-interest expenses	(1,423)	(4,451)	(8,331)	(11,470)
Intersegment revenues	290	0	290	0
Intersegment expenses	(101)	(101)	(321)	(277)
Income (loss) before Income Taxes, Parent	(538)	(3,704)	1,780	(2,767)
Total assets	2,098,341	2,691,621	2,098,341	2,691,621
Major Segment [Member]
Segment Reporting Information [Line Items]
Total interest income	120,301	121,101	369,275	361,574
Interest expense	(18,430)	(22,010)	(57,928)	(62,574)
Net interest income	101,871	99,091	311,347	299,000
Provision For Non Covered Loan And Lease Losses.	(16,142)	(9,900)	(39,424)	(55,343)
Provision for Covered Loan and Lease Losses, net	(1,115)	(3,074)	(4,339)	(4,957)
Total non-interest income (loss), net	2,491	3,323	8,227	19,963
Non-interest expenses	(59,575)	(63,234)	(180,827)	(198,534)
Intersegment revenues	721	562	1,700	1,524
Intersegment expenses	(721)	(562)	(1,700)	(1,524)
Income (loss) before Income Taxes, Parent	27,530	26,206	94,984	60,129
Total assets	8,619,282	9,275,455	8,619,282	9,275,455
Intersegment Elimination [Member]
Segment Reporting Information [Line Items]
Total interest income	0	0	0	0
Interest expense	0	0	0	0
Net interest income	0	0	0	0
Provision For Non Covered Loan And Lease Losses.	0	0	0	0
Provision for Covered Loan and Lease Losses, net	0	0	0	0
Total non-interest income (loss), net	0	0	0	0
Non-interest expenses	0	0	0	0
Intersegment revenues	(721)	(562)	(1,700)	(1,524)
Intersegment expenses	721	562	1,700	1,524
Income (loss) before Income Taxes, Parent	0	0	0	0
Total assets	(945,943)	(895,230)	(945,943)	(895,230)
Consolidated Total [Member]
Segment Reporting Information [Line Items]
Total assets		$ 8,435,934		$ 8,435,934

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Fair Value

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value

NOTE 19- FAIR VALUEOF FINANCIAL INSTRUMENTS

The Company follows the fair value measurement framework under GAAP.

Fair Value Measurement

The fair value measurement framework defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This framework also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs previously described that may be used to measure fair value.

Money market investments

The fair value of money market investments is based on the carrying amounts reflected in the consolidated statements of financial condition as these are reasonable estimates of fair value given the short-term nature of the instruments.

Investment securities

The fair value of investment securities is based on quoted market prices, when available, or market prices provided by recognized broker-dealers. Such securities are classified as level 1 or level 2 depending on the basis for determining fair value. If listed prices or quotes are not available, fair value is based upon externally developed models that use both observable and unobservable inputs depending on the market activity of the instrument, and such securities are classified as level 3. At December 31, 2013, the Company held two securities categorized as other debt that are classified as Level 3. At September 30, 2014, the Company did not have securities classified as Level 3. The estimated fair value of the other debt securities was determined by using a third-party model to calculate the present value of projected future cash flows. The assumptions are highly uncertain and include primarily market discount rates, current spreads, and an indicative pricing.

Securities purchased under agreements to resell

The fair value of securities purchased under agreements to resellis based on the carrying amounts reflected in the consolidated statements of financial condition as these are reasonable estimates of fair value given the short-term nature of the instruments.

Derivative instruments

The fair value of the interest rate swapsis largely a function of the financial market's expectations regarding the future direction of interest rates. Accordingly, current market values are not necessarily indicative of the future impact of derivative instruments on earnings. This will depend, for the most part, on the shape of the yield curve, the level of interest rates, as well as the expectations for rates in the future. The fair value of most of these derivative instruments is based on observable market parameters, which include discounting the instruments' cash flows using the U.S. dollar LIBOR-based discount rates, and also applying yield curves that account for the industry sector and the credit rating of the counterparty and/or the Company.

Certain other derivative instruments with limited market activity are valued using externally developed models that consider unobservable market parameters. Based on their valuation methodology, derivative instruments are classified as Level 2 or Level 3. The Company has offered its customers certificates of deposit with an option tied to the performance of the S&P Index and uses equity indexed option agreements with major broker-dealers to manage its exposure to changes in this index. Their fair value is obtained through the use of an external based valuation that was thoroughly evaluated and adopted by management as its measurement tool for these options. The payoff of these options is linked to the average value of the S&P Index on a specific set of dates during the life of the option. The methodology uses an average rate option or a cash-settled option whose payoff is based on the difference between the expected average value of the S&P Index during the remaining life of the option and the strike price at inception. The assumptions, which are uncertain and require a degree of judgment, include primarily S&P Index volatility, forward interest rate projections, estimated index dividend payout, and leverage.

Servicing assets

Servicing assets do not trade in an active market with readily observable prices. Servicing assets are priced using a discounted cash flow model. The valuation model considers servicing fees, portfolio characteristics, prepayment assumptions, delinquency rates, late charges, other ancillary revenues, cost to service and other economic factors. Due to the unobservable nature of certain valuation inputs, the servicing rights are classified as Level 3.

Loans receivable considered impaired that are collateral dependent

The impairment is measured based on the fair value of the collateral, which is derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations, in accordance with the provisions of ASC 310-10-35. Currently, the associated loans considered impaired are classified as Level 3.

Foreclosed real estate

Foreclosed real estate includes real estate properties securing residential mortgage and commercial loans. The fair value of foreclosed real estate may be determined using an external appraisal, broker price option or an internal valuation. These foreclosed assets are classified as Level 3 given certain internal adjustments that may be made to external appraisals

Other repossessedassets

Other repossessed assets include repossessed automobile loans and leases. The fair value of the repossessed automobiles may be determined using internal valuation and an external appraisal. These repossessed assets are classified as Level 3 given certain internal adjustments that may be made to external appraisals.

Assets and liabilities measured at fair value on a recurring and non-recurring basis, including financial liabilitiesfor which the Company has elected the fair value option, are summarized below:

	September 30, 2014
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	1,273,879	$	-	$	1,273,879
Money market investments		7,777		-		-		7,777
Derivative assets		-		2,683		5,762		8,445
Servicing assets		-		-		13,986		13,986
Derivative liabilities		-		(11,414)		(5,588)		(17,002)
	$	7,777	$	1,265,148	$	14,160	$	1,287,085
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	226,791	$	226,791
Foreclosed real estate		-		-		100,564		100,564
Other repossessed assets		-		-		21,733		21,733
	$	-	$	-	$	349,088	$	349,088

	December 31, 2013
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	1,568,745	$	19,680	$	1,588,425
Securities purchased under agreements to resell		-		60,000		-		60,000
Money market investments		6,967		-		-		6,967
Derivative assets		-		4,072		16,430		20,502
Servicing assets		-		-		13,801		13,801
Derivative liabilities		-		(14,937)		(15,736)		(30,673)
	$	6,967	$	1,617,880	$	34,175	$	1,659,022
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	28,353	$	28,353
Foreclosed real estate		-		-		90,024		90,024
Other repossessed assets		-		-		12,583		12,583
	$	-	$	-	$	130,960	$	130,960

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basisusing significant unobservable inputs (Level 3) for the quarters and nine-month periods ended September30, 2014 and 2013:

		Quarter Ended September 30, 2014
				Derivative				Derivative
		Other		asset				liability
		debt		(S&P				(S&P
		securities		Purchased		Servicing		Embedded
Level 3 Instruments Only		available-for-sale		Options)		assets		Options)		Total
	(In thousands)
Balance at beginning of period		$	-	$	6,580	$	13,970	$	(6,368)	$	14,182
Gains (losses) included in earnings			-		(818)		-		675		(143)
New instruments acquired			-		-		554		-		554
Principal repayments			-		-		(427)		-		(427)
Amortization			-		-		-		105		105
Changes in fair value of servicing assets			-		-		(111)		-		(111)
Balance at end of period		$	-	$	5,762	$	13,986	$	(5,588)	$	14,160
		Nine-Month Period Ended September 30, 2014
				Derivative				Derivative
		Other		asset				liability
		debt		(S&P				(S&P
		securities		Purchased		Servicing		Embedded
Level 3 Instruments Only		available-for-sale		Options)		assets		Options)		Total
	(In thousands)
Balance at beginning of period		$	19,680	$	16,430	$	13,801	$	(15,736)	$	34,175
Gains (losses) included in earnings			-		(10,668)		-		9,639		(1,029)
Changes in fair value of investment securities available for sale included in other comprehensive income			320		-		-		-		320
New instruments acquired			-		-		1,608		-		1,608
Principal repayments			(20,000)		-		(799)		-		(20,799)
Amortization			-		-		-		509		509
Changes in fair value of servicing assets			-		-		(624)		-		(624)
Balance at end of period		$	-	$	5,762	$	13,986	$	(5,588)	$	14,160

	Quarter Ended September 30, 2013
			Derivative				Derivative
	Other		asset				liability
	debt		(S&P				(S&P
	securities		Purchased			Servicing	Embedded
Level 3 Instruments Only	available-for-sale		Options)			assets	Options)		Total
Balance at beginning of period	$	20,058	$	16,020	$	12,994	$	(15,315)	$	33,757
Gains (losses) included in earnings		-		1,921		-		(1,994)		(73)
Changes in fair value of investment securities available for sale included in other comprehensive income		(552)		-		-		-		(552)
New instruments acquired		-		-		704		-		704
Principal repayments		-		-		(309)		-		(309)
Amortization		-		-		-		110		110
Changes in fair value of servicing assets		-		-		262		-		262
Balance at end of period	$	19,506	$	17,941	$	13,651	$	(17,199)	$	33,899
	Nine-Month Period Ended September 30, 2013
			Derivative					Derivative
	Other		asset					liability
	debt		(S&P					(S&P
	securities		Purchased			Servicing		Embedded
Level 3 Instruments Only	available-for-sale		Options)			assets		Options)		Total
Balance at beginning of period	$	20,012	$	13,233	$	10,795	$	(12,707)	$	31,333
Gains (losses) included in earnings		-		4,708		-		(4,807)		(99)
Changes in fair value of investment securities available for sale included in other comprehensive income		(506)		-		-		-		(506)
New instruments acquired		-		-		2,659		-		2,659
Principal repayments		-		-		(855)		-		(855)
Amortization		-		-		-		315		315
Changes in fair value of servicing assets		-		-		1,052		-		1,052
Balance at end of period	$	19,506	$	17,941	$	13,651	$	(17,199)	$	33,899

During the quartersand thenine-month periods ended September 30, 2014 and 2013, there were purchases and sales of assets and liabilities measured at fair value on a recurring basis. There were no transfers into and out of Level 1 and Level 2 fair value measurements during such periods.

The table below presents quantitative information for all assets and liabilities measured at fair value on a recurring and non-recurring basisusing significant unobservable inputs (Level 3) atSeptember 30, 2014:

	September 30, 2014
	Fair Value		Valuation Technique	Unobservable Input	Range
	(In thousands)
Derivative assets (S&P Purchased Options)	$	5,762	Option pricing model	Implied option volatility	25.75%-36.88%
				Counterparty credit risk (based on 5-year credit default swap ("CDS") spread)	66.90% - 69.11%
Servicing assets	$	13,986	Cash flow valuation	Constant prepayment rate	5.60% - 13.28%
				Discount rate	10.00% - 12.00%
Derivative liability (S&P Embedded Options)	$	(5,588)	Option pricing model	Implied option volatility	25.75%-36.88%
				Counterparty credit risk (based on 5-year CDS spread)	66.90% - 69.11%
Collateral dependant impaired loans	$	26,809	Fair value of property or collateral	Appraised value less disposition costs	20.20% - 29.20%
Puerto Rico Electric Power Authority line of credit	$	199,982	Cash flow valuation	Discount rate	7.25
Foreclosed real estate	$	100,564	Fair value of property or collateral	Appraised value less disposition costs	20.20% - 29.20%
Other repossessed assets	$	21,733	Fair value of property or collateral	Appraised value less disposition costs	20.20% - 29.20%

Information about Sensitivity to Changes in Significant Unobservable Inputs

Other debt securities – The significant unobservable inputs used in the fair value measurement of one of the Company's other debt securities are indicative comparable pricing, option adjusted spread (“OAS”), yield to maturity, and spread to maturity. Significant changes in any of those inputs in isolation would result in a significantly different fair value measurement. Generally, a change in the assumption used for indicative comparable pricing is accompanied by a directionally opposite change in the assumption used for OAS and a directionally, although not equally proportional, opposite change in the assumptions used for yield to maturity and spread to maturity.

Derivative asset (S&P Purchased Options) – The significant unobservable inputs used in the fair value measurement of the Company's derivative assets related to S&P purchased options are implied option volatility and counterparty credit risk. Significant changes in any of those inputs in isolation would result in a significantly different fair value measurement. Generally, a change in the assumption used for implied option volatility is not necessarily accompanied by directionally similar or opposite changes in the assumption used for counterparty credit risk.

Servicing assets – The significant unobservable inputs used in the fair value measurement of the Company's servicing assets are constant prepayment rates and discount rates. Changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or offset the sensitivities. Mortgage banking activities, a component of total banking and financial servicerevenue in the consolidated statements of operations, include the changes from period to period in the fair value of the mortgage loan servicing rights, which may result from changes in the valuation model inputs or assumptions (principally reflecting changes in discount rates and prepayment speed assumptions) and other changes, including changes due to collection/realization of expected cash flows.

Derivative liability (S&P Embedded Options) – The significant unobservable inputs used in the fair value measurement of theCompany's derivative liability related to S&P purchased options are implied option volatility and counterparty credit risk. Significant changes in any of those inputs in isolation would result in a significantly different fair value measurement. Generally, a change in the assumption used for implied option volatility is not necessarily accompanied by directionally similar or opposite changes in the assumption used for counterparty credit risk.

Fair Value of Financial Instruments

The information about the estimated fair value of financial instruments required by GAAP is presented hereunder. The aggregate fair value amounts presented do not necessarily represent management's estimate of the underlying value of the Company.

The estimated fair value is subjective in nature, involves uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could affect these fair value estimates. The fair value estimates do not take into consideration the value of future business and the value of assets and liabilities that are not financial instruments. Other significant tangible and intangible assets that are not considered financial instruments are the value of long-term customer relationships of retail deposits, and premises and equipment.

The estimated fair value and carrying value of the Company's financial instruments at September 30, 2014 and December 31, 2013 is as follows:

	September 30,				December 31,
	2014				2013
	Fair		Carrying		Fair		Carrying
	Value		Value		Value		Value
	(In thousands)
Level 1
Financial Assets:
Cash and cash equivalents	$	671,239	$	671,239	$	621,269	$	621,269
Restricted cash		32,907		32,907		82,199		82,199
Level 2
Financial Assets:
Securities purchased under agreements to resell		-		-		60,000		60,000
Trading securities		1,687		1,687		1,869		1,869
Investment securities available-for-sale		1,273,879		1,273,879		1,568,745		1,568,745
Investment securities held-to-maturity		144,217		144,305		-		-
Federal Home Loan Bank (FHLB) stock		21,189		21,189		24,450		24,450
Other investments		65		65		65		65
Derivative assets		2,683		2,683		4,072		4,072
Financial Liabilities:
Securities purchased but not yet received		30,057		30,057		-		-
Derivative liabilities		11,414		11,414		14,937		14,937
Level 3
Financial Assets:
Investment securities available-for-sale		-		-		19,680		19,680
Total loans (including loans held-for-sale)
Non-covered loans, net		4,486,738		4,545,209		4,857,505		4,662,458
Covered loans, net		365,503		311,693		459,444		356,961
Derivative assets		5,762		5,762		16,430		16,430
FDIC indemnification asset		83,995		120,619		152,965		189,240
Accrued interest receivable		19,665		19,665		18,734		18,734
Servicing assets		13,986		13,986		13,801		13,801
Financial Liabilities:
Deposits		5,053,119		5,069,175		5,409,540		5,383,265
Securities sold under agreements to repurchase		1,058,042		1,012,228		1,323,903		1,267,618
Advances from FHLB		340,043		334,787		335,324		336,143
Other borrowings		3,865		3,872		3,638		3,663
Subordinated capital notes		91,061		101,190		99,316		100,010
Accrued expenses and other liabilities		159,541		159,541		144,424		144,424
Derivative liabilities		5,588		5,588		15,736		15,736

The following methods and assumptions were used to estimate the fair values of significant financial instruments at September 30, 2014 and December 31, 2013:

•Cash and cash equivalents (including money market investments and time deposits with other banks), restricted cash, accrued interest receivable, securities purchased under agreements to resell, securities purchased but not yet received, andaccrued expenses and other liabilities have been valued at the carrying amounts reflected in the consolidated statements of financial condition as these are reasonable estimates of fair value given the short-term nature of the instruments.

•Investments in FHLB-NY stock are valued at their redemption value.

•The fair value of investment securities, including trading securities, is based on quoted market prices, when available, or market prices provided by recognized broker-dealers. If listed prices or quotes are not available, fair value is based upon externally developed models that use both observable and unobservable inputs depending on the market activity of the instrument. The estimated fair value of the structured credit investments is determined by using a third-party cash flow valuation model to calculate the present value of projected future cash flows. The assumptions used which are highly uncertain and require a high degree of judgment, include primarily market discount rates, current spreads, duration, leverage, default, home price depreciation, and loss rates. The assumptions used are drawn from a wide array of data sources, including the performance of the collateral underlying each deal. The external-based valuation, which is obtained at least on a quarterly basis, is analyzed and its assumptions are evaluated and incorporated in either an internal-based valuation model when deemed necessary, or compared to counterparties' prices and agreed by management.

•The fair value of the FDIC indemnification asset represents the present value of the net estimated cash payments expected to be received from the FDIC for future losses on covered assets based on the credit assumptions on estimated cash flows for each covered asset pool and the loss sharing percentages. The ultimate collectability of the FDIC indemnification asset is dependent upon the performance of the underlying covered loans, the passage of time and claims paid by the FDIC which are impacted by the Bank's adherence to certain guidelines established by the FDIC.

•The fair value of servicing assets is estimated by using a cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration actual and expected loan prepayment rates, discount rates, servicing costs, and other economic factors, which are determined based on current market conditions.

•The fair values of the derivative instruments are provided by valuation experts and counterparties. Certain derivatives with limited market activity are valued using externally developed models that consider unobservable market parameters. The Company has offered its customers certificates of deposit with an option tied to the performance of the S&P Index, and uses equity indexed option agreements with major broker-dealers to manage its exposure to changes in this index. Their fair value is obtained through the use of an external based valuation that was thoroughly evaluated and adopted by management as its measurement tool for these options. The payoff of these options is linked to the average value of the S&P Index on a specific set of dates during the life of the option. The methodology uses an average rate option or a cash-settled option whose payoff is based on the difference between the expected average value of the S&P Index during the remaining life of the option and the strike price at inception. The assumptions, which are uncertain and require a degree of judgment, include primarily S&P Index volatility, forward interest rate projections, estimated index dividend payout, and leverage.

•Fair value of derivative liabilities, which include interest rate swaps and forward-settlement swaps, are based on the net discounted value of the contractual projected cash flows of both the pay-fixed receive-variable legs of the contracts. The projected cash flows are based on the forward yield curve, and discounted using current estimated market rates.

•The fair value of the covered and non-covered loan portfolio (including loans held-for-sale) is estimated by segregating by type, such as mortgage, commercial, consumer, auto andleasing. Each loan segment is further segmented into fixed and adjustable interest rates and by performing and non-performing categories. The fair value of performing loans is calculated by discounting contractual cash flows, adjusted for prepayment estimates (voluntary and involuntary), if any, using estimated current market discount rates that reflect the credit and interest rate risk inherent in the loan. This fair value is not currently an indication of an exit price as that type of assumption could result in a different fair value estimate.

•The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is based on the discounted value of the contractual cash flows, using estimated current market discount rates for deposits of similar remaining maturities.

•The fair value of long-term borrowings, which include securities sold under agreements to repurchase, advances from FHLB-NY,term notes,and subordinated capital notes, is based on the discounted value of the contractual cash flows using current estimated market discount rates for borrowings with similar terms, remaining maturities and put dates.

•The fair value of commitments to extend credit and unused lines of credit is based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standings.

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Income Taxes (Narratives) (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Income Taxes [Abstract]
Unrecognized Tax Benefits, Interest on Income Taxes Accrued	$ 2,600,000		$ 2,600,000		$ 4,000,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	430,000		430,000		1,200,000
Additional income tax contingency	1,000,000		1,000,000
Statement [Line Items]
OtherComprehensiveIncomeLossTax	1,867,000				(831,000)
International Banking Entity [Member]
Statement [Line Items]
OtherComprehensiveIncomeLossTax	198,000				356,000
Other Comprehensive Income Loss Reclassification Adjustment From AOCIF or Sale Of Securities Tax	$ 11,000	$ 36,000	$ 158,000	$ 126,000
IBE Tax Rate			0.00%

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Investment Securities (Investment securities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 1,249,769	$ 1,575,043
Available-for-sale Securities, Gross Unrealized Gains	37,106	34,096
Available-for-sale Securities, Gross Unrealized Losses	12,996	20,714
Available-for-sale Securities	1,273,879	1,588,425
Available for sale - Weighted Average Yield	2.96%	2.89%
Held-to-maturity, Amortized cost	144,305
Held to maturity Securities Unrecognized Gains	82
Held-to-maturity Securities, Unrecognized Loss	170
Held to maturity Fair Value	144,217	0
Held to maturity - Weighted Average Yield	1.95%
Total Securities - Amortized Cost	1,394,074
Total Securities Gross Unrealized Gains	37,188
Total Securities Gross Unrealized Losses	13,166
Total Securities Fair Value	1,418,096
Marketable Securities Weighted Average Yield	2.86%
Collateralized Mortgage Backed Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	1,217,686	1,419,117
Available-for-sale Securities, Gross Unrealized Gains	36,968	33,929
Available-for-sale Securities, Gross Unrealized Losses	7,493	13,507
Available-for-sale Securities	1,247,161	1,439,539
Available for sale - Weighted Average Yield	2.93%	2.76%
Held-to-maturity, Amortized cost	144,305
Held to maturity Fair Value	144,217
Collateralized Mortgage Backed Securities [Member] | FNMA and FHLMC [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	1,023,303	1,190,910
Available-for-sale Securities, Gross Unrealized Gains	36,414	33,089
Available-for-sale Securities, Gross Unrealized Losses	3,082	6,669
Available-for-sale Securities	1,056,635	1,217,330
Available for sale - Weighted Average Yield	3.13%	2.93%
Held-to-maturity, Amortized cost	144,305
Held to maturity Securities Unrecognized Gains	82
Held-to-maturity Securities, Unrecognized Loss	170
Held to maturity Fair Value	144,217
Held to maturity - Weighted Average Yield	1.95%
Collateralized Mortgage Backed Securities [Member] | GNMA [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	5,241	7,406
Available-for-sale Securities, Gross Unrealized Gains	348	433
Available-for-sale Securities, Gross Unrealized Losses	21	24
Available-for-sale Securities	5,568	7,815
Available for sale - Weighted Average Yield	4.92%	4.92%
Collateralized Mortgage Backed Securities [Member] | CMO's [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	189,142	220,801
Available-for-sale Securities, Gross Unrealized Gains	206	407
Available-for-sale Securities, Gross Unrealized Losses	4,390	6,814
Available-for-sale Securities	184,958	214,394
Available for sale - Weighted Average Yield	1.80%	1.78%
Securities Investment [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	32,083	155,926
Available-for-sale Securities, Gross Unrealized Gains	138	167
Available-for-sale Securities, Gross Unrealized Losses	5,503	7,207
Available-for-sale Securities	26,718	148,886
Available for sale - Weighted Average Yield	4.15%	2.99%
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Securities Investment [Member] | US Treasury Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	0
Available-for-sale Securities, Gross Unrealized Gains	0
Available-for-sale Securities, Gross Unrealized Losses	0
Available-for-sale Securities	0
Available for sale - Weighted Average Yield	0.00%
Securities Investment [Member] | Obligation of US Government sponsored agencies at loss [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	7,795	10,691
Available-for-sale Securities, Gross Unrealized Gains	0	0
Available-for-sale Securities, Gross Unrealized Losses	34	42
Available-for-sale Securities	7,761	10,649
Available for sale - Weighted Average Yield	1.32%	1.21%
Securities Investment [Member] | Obligation of Puerto Rico Government and political subdivisions [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	20,915	121,035
Available-for-sale Securities, Gross Unrealized Gains	0	0
Available-for-sale Securities, Gross Unrealized Losses	5,469	6,845
Available-for-sale Securities	15,446	114,190
Available for sale - Weighted Average Yield	5.41%	4.38%
Securities Investment [Member] | Other Debt Obligations [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	3,373	24,200
Available-for-sale Securities, Gross Unrealized Gains	138	167
Available-for-sale Securities, Gross Unrealized Losses	0	320
Available-for-sale Securities	$ 3,511	$ 24,047
Available for sale - Weighted Average Yield	2.91%	3.46%

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Guarantees (Narrative) (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Guarantee Obligations [Line Items]
Qualitative And Quantitative Information Assets Or Liabilities For Transferors Continuing Involvement In Securitization Or Asset backed Financing Arrangement Principal Amounts Outstanding	$ 98,400,000	$ 98,400,000		$ 122,300,000
Repurchased Loan not subject to credit recourse	1,900,000	5,600,000
Repurchase loan subject to credit recourse	115,000	261,000
Gain (Loss) On Repurchase Loan Not Subject To Credit Recourse	979,000	1,900,000	477,000
Funds Advanced To Investors Under Servicing Agreements	319,000	319,000		243,000
Two Years Or Less Recourse Obligation Termination Amount	68,400,000	68,400,000
Percentage of Future Extinguished Recourse Obligation Terminated in Two Years Or Less	70.00%	70.00%
Serviced mortgage loans for third parties	1,200,000,000	1,200,000,000
Loan with recourse [Member]
Guarantee Obligations [Line Items]
Repurchase loan subject to credit recourse	$ 4,100,000	$ 9,200,000

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2014

Disclosure Text Block Abstract

Schedule of Accumulated Other Comprehensive Income (Loss)

	September 30,		December 31,
	2014		2013
	(In thousands)
Unrealized gain on securities available-for-sale which are not other-than-temporarily impaired	$	23,995	$	13,267
Income tax effect of unrealized gain on securities available-for-sale		(3,677)		(1,834)
Net unrealized gain on securities available-for-sale which are not other-than-temporarily impaired		20,318		11,433
Unrealized loss on cash flow hedges		(8,717)		(10,907)
Income tax effect of unrealized loss on cash flow hedges		1,810		2,665
Net unrealized loss on cash flow hedges		(6,907)		(8,242)
Accumulated other comprehensive income, net of taxes	$	13,411	$	3,191

	Quarter Ended September 30,
	2014						2013
	Net unrealized		Net unrealized		Accumulated		Net unrealized		Net unrealized		Accumulated
	gains on		loss on		other		gains on		loss on		other
	securities		cash flow		comprehensive		securities		cash flow		comprehensive
	available-for-sale		hedges		income		available-for-sale		hedges		income
	(In thousands)
Beginning balance	$	29,759	$	(8,004)	$	21,755	$	25,400	$	(9,634)	$	15,766
Other comprehensive income (loss) before reclassifications		(9,452)		(559)		(10,011)		(5,113)		(1,509)		(6,622)
Amounts reclassified out of accumulated other comprehensive income		11		1,656		1,667		37		1,651		1,688
Other comprehensive income (loss)		(9,441)		1,097		(8,344)		(5,076)		142		(4,934)
Ending balance	$	20,318	$	(6,907)	$	13,411	$	20,324	$	(9,492)	$	10,832
	Nine-Month Period Ended September 30,
	2014						2013
	Net unrealized		Net unrealized		Accumulated		Net unrealized		Net unrealized		Accumulated
	gains on		loss on		other		gains on		loss on		other
	securities		cash flow		comprehensive		securities		cash flow		comprehensive
	available-for-sale		hedges		income		available-for-sale		hedges		income
	(In thousands)
Beginning balance	$	11,433	$	(8,242)	$	3,191	$	68,245	$	(12,365)	$	55,880
Other comprehensive income before reclassifications		8,727		(3,584)		5,143		(48,047)		(1,530)		(49,577)
Amounts reclassified out of accumulated other comprehensive income		158		4,919		5,077		126		4,403		4,529
Other comprehensive income (loss)		8,885		1,335		10,220		(47,921)		2,873		(45,048)
Ending balance	$	20,318	$	(6,907)	$	13,411		20,324	$	(9,492)	$	10,832

Reclassification out of Accumulated Other Comprehensive Income [Table text block]

The following table presents reclassifications out of accumulated other comprehensive income forthe quarters and nine-month periodsended September 30, 2014 and 2013:

	Amount reclassified out of accumulated
	other comprehensive income
		Quarter Ended		Nine-Month Period	Affected Line Item in
		September 30, 2014		Ended September 30, 2014	Consolidated Statement
					of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	1,656	$	4,919	Net interest expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		11		158	Income tax expense
	$	1,667	$	5,077
	Amount reclassified out of accumulated
	other comprehensive income
		Quarter Ended		Nine-Month Period	Affected Line Item in
		September 30, 2013		Ended September 30, 2013	Consolidated Statement
					of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	1,651	$	4,403	Net interest expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		37		126	Income tax expense
	$	1,688	$	4,529

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Commitments (Narratives) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Commitments and Contingencies [Abstract]
Rent Expenses	$ 2,400,000	$ 2,500,000	$ 7,300,000	$ 7,700,000
Line of credit reserve	$ 900,000		$ 900,000		$ 900,000

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Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net income	$ 19,532	$ 19,621	$ 64,588	$ 78,352
Other comprehensive income (loss) before tax:
Unrealized gain (loss) on securities available-for-sale	(9,410)	(5,779)	15,094	(52,346)
Realized gain on investment securities included in net income	0	0	(4,366)	0
Unrealized gain (loss) on cash flow hedges	1,798	233	2,189	4,711
Other comprehensive income (loss) before taxes	(7,612)	(5,546)	12,917	(47,635)
Income tax effect	(732)	611	(2,697)	2,587
Other Comprehensive Income (Loss) After taxes	(8,344)	(4,935)	10,220	(45,048)
Comprehensive income	$ 11,188	$ 14,686	$ 74,808	$ 33,304

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Borrowings (Repurchase Agreements) (Details) (Securities Sold under Agreements to Repurchase [Member], USD $) In Thousands, unless otherwise specified			3 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Due date: 12 3 2014 [Member]	Sep. 30, 2014 Due date: 6 13 2015 [Member]	Sep. 30, 2014 Due date: 12 8 2016 [Member]	Sep. 30, 2014 Due date: 3 2 2017 [Member]
Debt Instrument [Line Items]
Borrowing Balance	$ 1,010,000	$ 1,265,000	$ 85,000	$ 255,000	$ 170,000	$ 500,000
Weighted Average Coupon	2.831%		0.675%	0.84%	1.50%	4.78%
Settlement Date			Dec. 03, 2012	Dec. 10, 2012	Dec. 06, 2012	Mar. 02, 2007
Investment Repurchase Agreement, Repurchase Date			Dec. 03, 2014	Jun. 13, 2015	Dec. 08, 2016	Mar. 02, 2017

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Investments Securities

9 Months Ended

Sep. 30, 2014

Investments [Abstract]

Investments Securities

NOTE 3–INVESTMENT SECURITIES

Money Market Investments

The Company considers as cash equivalents all money market instruments that are not pledged and that havematurities of three months or less at the date of acquisition. At September 30, 2014 and December 31, 2013, money market instruments included as part of cash and cash equivalents amounted to $7.8million and $7.0 million,respectively.

Securities Purchased Under Agreements to Resell

Securities purchased under agreements to resell consist of short-term investmentsand are carried at the amounts at which the assets will be subsequently resold as specified in the respective agreements. AtDecember 31, 2013, securities purchased under agreements to resell amounted to $60.0 million.At September 30, 2014, there were no securities purchased under agreements to resell.

The amounts advanced under those agreements are reflected as assets in the consolidated statements of financial condition. It is the Company's policy to take possession of securities purchased under agreements to resell. Agreements with third parties specify the Company's right to request additional collateral based on its monitoring of the fair value of the underlying securities on a daily basis.The fair value of the collateral securities held by the Company on these transactions as ofDecember 31, 2013was approximately $64.6million.

Investment Securities

The amortized cost, gross unrealized gains and losses, fair value, and weighted average yield of the securitiesowned by the Company at September 30, 2014 and December 31, 2013 were as follows:

	September 30, 2014
			Gross		Gross				Weighted
	Amortized		Unrealized		Unrealized		Fair		Average
	Cost		Gains		Losses		Value		Yield
	(In thousands)
Available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	1,023,303	$	36,414	$	3,082	$	1,056,635	3.13%
GNMA certificates		5,241		348		21		5,568	4.92%
CMOs issued by US government-sponsored agencies		189,142		206		4,390		184,958	1.80%
Total mortgage-backed securities		1,217,686		36,968		7,493		1,247,161	2.93%
Investment securities
Obligations of US government-sponsored agencies		7,795		-		34		7,761	1.32%
Obligations of Puerto Rico government and political subdivisions		20,915		-		5,469		15,446	5.41%
Other debt securities		3,373		138		-		3,511	2.91%
Total investment securities		32,083		138		5,503		26,718	4.15%
Total securities available for sale	$	1,249,769	$	37,106	$	12,996	$	1,273,879	2.96%
Held-to-maturity
Mortgage-backed securities
FNMA and FHLMC certificates		144,305		82		170		144,217	1.95%
Total	$	1,394,074	$	37,188	$	13,166	$	1,418,096	2.86%

	December 31, 2013
			Gross		Gross				Weighted
	Amortized		Unrealized		Unrealized		Fair		Average
	Cost		Gains		Losses		Value		Yield
	(In thousands)
Available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	1,190,910	$	33,089	$	6,669	$	1,217,330	2.93%
GNMA certificates		7,406		433		24		7,815	4.92%
CMOs issued by US government-sponsored agencies		220,801		407		6,814		214,394	1.78%
Total mortgage-backed securities		1,419,117		33,929		13,507		1,439,539	2.76%
Investment securities
Obligations of US government-sponsored agencies		10,691		-		42		10,649	1.21%
Obligations of Puerto Rico government and political subdivisions		121,035		-		6,845		114,190	4.38%
Other debt securities		24,200		167		320		24,047	3.46%
Total investment securities		155,926		167		7,207		148,886	2.99%
Total securities available-for-sale	$	1,575,043	$	34,096	$	20,714	$	1,588,425	2.89%

The amortized cost and fair value of the Company's investment securities at September30, 2014, by contractual maturity, are shown in the next table. Securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period of final contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2014
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)				(In thousands)
Mortgage-backed securities
Due after 5 to 10 years
FNMA and FHLMC certificates	$	22,896	$	23,243	$	-	$	-
Total due after 5 to 10 years		22,896		23,243		-		-
Due after 10 years
FNMA and FHLMC certificates		1,000,407		1,033,392		144,305		144,217
GNMA certificates		5,241		5,568		-		-
CMOs issued by US government-sponsored agencies		189,142		184,958		-		-
Total due after 10 years		1,194,790		1,223,918		144,305		144,217
Total mortgage-backed securities		1,217,686		1,247,161		144,305		144,217
Investment securities
Due from 1 to 5 years
Obligations of Puerto Rico government and political subdivisions		10,450		8,628		-		-
Total due from 1 to 5 years		10,450		8,628		-		-
Due after 5 to 10 years
Obligations of US government and sponsored agencies		7,795		7,761		-		-
Total due after 5 to 10 years		7,795		7,761		-		-
Due after 10 years
Obligations of Puerto Rico government and political subdivisions		10,465		6,818		-		-
Other debt securities		3,373		3,511		-		-
Total due after 10 years		13,838		10,329		-		-
Total investment securities		32,083		26,718		-		-
Total securities available-for-sale	$	1,249,769	$	1,273,879	$	144,305	$	144,217

At December 31, 2013, obligations of the Puerto Rico government and its political subdivisions included a $98.7 million principal amount, LIBORfloating ratebond with a maturity date of July 1, 2024, that was subject to mandatory tender for purchase by the end of the third year anniversary of the closing date, which was June 1, 2014. The bond was also subject to optional demand tender for purchase upon the occurrence and continuance of certain events, including (among others) the withdrawal, suspension or reduction below investment grade of the credit rating on any general obligation of the Commonwealth by any of the three major rating agencies. This bond was repaid by the issuer on March 17, 2014.

The Company, as part of its asset/liability management, may purchase U.S. Treasury securities and U.S. government-sponsored agency discount notes close to their maturities as alternatives to cash deposits at correspondent banks or as a short term vehicle to reinvest the proceeds of sale transactions until investment securities with attractive yields can be purchased.During the nine-month period ended September 30, 2014, the Company sold $74.1 million of available-for-sale Government National Mortgage Association (“GNMA”) certificates that were sold as part of its recurring mortgage loan origination and securitization activities. These sales did not realize any gains or losses during such period.

In addition, during the nine-month period ended September 30, 2014, the Company sold $110.8 millionof available-for-sale FNMA and FHLMC certificatesbecause the Company believed that gains could be realized and that there were good opportunities to invest the proceeds in other investment securities with attractive yields and terms that would allow the Company to continue protecting its net interest margin. The Company recorded a net gain on sale of these securities of $4.4 million. The table below presents the gross realized gains by category for such period. There was no realized gain or loss for the nine-month period ended September 30, 2013.

	Nine-Month Period Ended September 30, 2014
			Book Value		Gross		Gross
Description	Sale Price		at Sale		Gains		Losses
	(In thousands)
Sale of securities available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	115,158	$	110,792	$	4,366	$	-
GNMA certificates		74,091		74,091		-		-
Total	$	189,249	$	184,883	$	4,366	$	-

The following tables show the Company's gross unrealized losses and fair value of investment securities available-for-sale and held-to-maturity, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position at September 30, 2014 and December 31, 2013:

	September 30, 2014
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	149,957	$	4,242	$	145,716
FNMA and FHLMC certificates		183,479		3,049		180,430
Obligations of Puerto Rico government and political subdivisions		20,915		5,469		15,446
GNMA certificates		197		22		176
	$	354,548	$	12,782	$	341,768
	Less than 12 months
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	15,746	$	148	$	15,598
FNMA and FHLMC certificates		26,220		33		26,187
Obligations of US government and sponsored agencies		7,796		34		7,761
Securities held-to-maturity
FNMA and FHLMC Certificates		95,598		170		95,428
	$	145,359	$	385	$	144,974
	Total
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	165,703	$	4,390	$	161,314
FNMA and FHLMC certificates		209,699		3,082		206,617
Obligations of Puerto Rico government and political subdivisions		20,915		5,469		15,446
Obligations of US government and sponsored agencies		7,796		34		7,761
GNMA certificates		197		22		176
		404,309		12,996		391,314
Securities held-to-maturity
FNMA and FHLMC Certificates		95,598		170		95,428
	$	499,907	$	13,166	$	486,742

	December 31, 2013
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico government and political subdivisions	$	20,845	$	5,470	$	15,375
CMOs issued by US government-sponsored agencies		2,559		237		2,322
GNMA certificates		81		11		70
	$	23,485	$	5,718	$	17,767
	Less than 12 months
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico government and political subdivisions	$	100,190	$	1,375	$	98,815
CMOs issued by US government-sponsored agencies		182,661		6,577		176,084
GNMA certificates		122		13		109
FNMA and FHLMC certificates		220,913		6,669		214,244
Obligations of US government and sponsored agencies		10,691		42		10,649
Other debt securities		20,000		320		19,680
	$	534,577	$	14,996	$	519,581
	Total
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico government and political subdivisions	$	121,035	$	6,845	$	114,190
CMOs issued by US government-sponsored agencies		185,220		6,814		178,406
GNMA certificates		203		24		179
FNMA and FHLMC certificates		220,913		6,669		214,244
Obligations of US government and sponsored agencies		10,691		42		10,649
Other debt securities		20,000		320		19,680
	$	558,062	$	20,714	$	537,348

The Company performs valuations of the investment securities on a monthly basis. Moreover, the Company conducts quarterly reviews to identify and evaluate each investment in an unrealized loss position for other-than-temporary impairment. Any portion of a decline in value associated with credit loss is recognized in income with the remaining noncredit-related component recognized in other comprehensive income. A credit loss is determined by assessing whether the amortized cost basis of the security will be recovered by comparing the present value of cash flows expected to be collected from the security, discounted at the rate equal to the yield used to accrete current and prospective beneficial interest for the security. The shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is considered to be the “credit loss.” Other-than-temporary impairment analysis is based on estimates that depend on market conditions and are subject to further change over time. In addition, while the Company believes that the methodology used to value these exposures is reasonable, the methodology is subject to continuing refinement, including those made as a result of market developments. Consequently, it is reasonably possible that changes in estimates or conditions could result in the need to recognize additional other-than-temporary impairment charges in the future.

Most of the investment ($479.0million or 96%)with an unrealized loss position at September 30, 2014consist of securities issued or guaranteed by the U.S. Treasury or U.S. government-sponsored agencies, all of which are highly liquid securities that have a large and efficient secondary market.Their aggregate losses and their variability from period to period are the result of changes in market conditions, and not due to the repayment capacity or creditworthiness of the issuers or guarantors of such securities.

The remaining investments ($20.9 million or 4%)with an unrealized loss position at September 30, 2014consist of obligations issued or guaranteed by the government of Puerto Rico and its political subdivisions or instrumentalities. The recent decline in the market value of these securities is mainly attributed to an increase in volatility as a result of changes in market conditions that reflect the significant economic and fiscal challenges that Puerto Rico is facing, including a protracted economic recession, sizable government debt-service obligations and structural budget deficits, high unemployment and a shrinking population. Moreover, uncertainty in regards to the impact of the recently enacted Public Corporation Debt Enforcement and Recovery Act (the “Recovery Act”) and the related subsequent negative rating decisions taken by the credit rating agencies has affected the market value of these securities.

As of September 30, 2014, the Company applied a discounted cash flow analysis to the Puerto Rico government bonds to calculate the cash flows expected to be collected and determine if any portion of the decline in market value of these investments was considered an other-than-temporary impairment. The analysis derives an estimate of value based on the present value of risk-adjusted future cash flows of the underlying investments, and included the following components:

• The contractual future cash flows of the bonds are projected based on the key terms as set forth in the official statements for each investment. Such key terms include among others the interest rate, amortization schedule, if any, and maturity date.
• The risk-adjusted cash flows are calculated based on monthly default probability and recovery rate assumptions based on the credit rating of each investment. Constant monthly default rates are assumed throughout the life of the bonds which are based on the respective security's credit rating as of the date of the analysis.
• The adjusted future cash flows are then discounted at the original effective yield of each investment based on the purchase price and expected risk-adjusted future cash flows as of the purchase date of each investment.

The discounted cash flow analysis for the investments showed at maturity in the range of 2.509% to 15.340%, thus reflecting that it is more likely than not that the bonds will not default at all during their remaining terms (range between 84.660% and 97.491%). Based on this analysis, the Company determined that it is more likely than not that it will recover all interest and principal invested in the Puerto Rico government bonds and is therefore not required to recognize a credit loss as of September 30, 2014.

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Loans Receivable (Covered Loan carrying amounts) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Accounts Notes And Loans Receivable Line Items
Financing Receivable Acquired With Deteriorated Credit Quality	$ 2,505,662		$ 2,929,353
Non-acretable discount	523,987		579,587
Cash expected to be collected	1,981,675		2,349,766
Accretable Yield	404,130		517,553
Carrying amount, gross	1,577,545		1,832,213
Loans And Leases Receivable Allowance, Covered	62,227	59,515	52,729	56,555	53,992	54,124
Covered, net	311,693		356,961
Acquired Loans In An F D I C Assisted Transaction [Member]
Accounts Notes And Loans Receivable Line Items
Financing Receivable Acquired With Deteriorated Credit Quality	561,844		702,126
Non-acretable discount	77,940		129,477
Cash expected to be collected	483,904		572,649
Accretable Yield	109,984		162,959
Carrying amount, gross	$ 373,920		$ 409,690

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Deposits and Related Interest (Narratives) (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Deposits [Abstract]
Weighted Average Rate Domestic Deposit	0.75%	0.73%
Puerto Rico Cash & Money Market Fund Deposits	$ 108,900,000	$ 93,100,000
Puerto Rico Cash & Money Market Fund Deposits Weighted Average Rate	0.78%	0.78%
Puerto Rico Cash & Money Market Fund Deposits Collateral	83,400,000	67,500,000
Time Deposits, $100,000 or More	681,600,000	845,800,000
Public Fund Time Deposits, $100,000 or more	20,800,000	26,700,000
Public Fund Time Deposits Weighted Average Rate, $100,000 or more	0.53%	0.32%
Public funds deposit	359,200,000	328,600,000
Public Fund Collateral Investments		97,800,000
Public Fund Time Deposits Collateral Commercial Loans	416,000,000	549,000,000
Accrued Interest, Time Deposits	1,300,000
Unamortized deposit discounts	1,100,000
Bank Overdrafts	890,000	1,800,000
Brokered Certificates of Deposits	575,800,000	729,800,000
Brokered Money Market Deposit	93,700,000	98,300,000
Equity indexed option	$ 4,400,000

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Guarantees (Changes in liabilty of estimated loss from credit recourse agreement) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Movement In Guaranteed Benefit Liability Gross Roll Forward
Balance at beginning of the period	$ 1,310	$ 2,460	$ 1,955	$ 2,460
Additions from acquisition	0	0	0	0
Net charge-off/terminations	(232)	0	(877)	0
Balance at the end of the period	$ 1,078	$ 2,460	$ 1,078	$ 2,460

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Allowance for Loan and Lease Losses (Allowance for loan and lease losses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Provision for Non Covered Loan and Lease Losses	$ 16,142	$ 9,900	$ 39,424	$ 55,343
Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	3,444	924	2,354	0
Charge-offs	(3,408)	(2,831)	(10,368)	(8,595)
Recoveries	693	978	1,932	3,938
Provision for Non Covered Loan and Lease Losses	3,731	2,970	10,542	6,698
Balance at end of period	4,460	2,041	4,460	2,041
Most recent acquired loans accounted under ASC 310-30
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	6,278		2,863
Provision for Non Covered Loan and Lease Losses	3,842		7,257
Balance at end of period	10,120		10,120
Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	50,638	45,701	49,081	39,921
Charge-offs	(11,622)	(5,762)	(27,621)	(42,282)
Recoveries	2,694	704	7,194	1,289
Provision for Non Covered Loan and Lease Losses	8,569	6,930	21,625	48,645
Balance at end of period	50,279	47,573	50,279	47,573
Residential Portfolio Segment | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at end of period		680		680
Residential Portfolio Segment | Most recent acquired loans accounted under ASC 310-30
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	0		0
Provision for Non Covered Loan and Lease Losses	0		0
Balance at end of period	0		0
Residential Portfolio Segment | Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	19,062	21,375	19,937	21,092
Charge-offs	(1,563)	(1,758)	(3,764)	(33,465)
Recoveries	138	0	374	0
Provision for Non Covered Loan and Lease Losses	1,235	1,374	2,325	33,364
Balance at end of period	18,872	20,991	18,872	20,991
Commercial Portfolio Segment | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	464	924	926	0
Charge-offs	(228)	0	(512)	(25)
Recoveries	35	6	65	6
Provision for Non Covered Loan and Lease Losses	(1)	431	(209)	1,380
Balance at end of period	270	1,361	270	1,361
Commercial Portfolio Segment | Most recent acquired loans accounted under ASC 310-30
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	6,216		1,713
Provision for Non Covered Loan and Lease Losses	3,899		8,402
Balance at end of period	10,115		10,115
Commercial Portfolio Segment | Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	12,423	17,624	14,897	17,072
Charge-offs	(1,081)	(2,234)	(2,043)	(5,678)
Recoveries	56	28	269	291
Provision for Non Covered Loan and Lease Losses	(2,286)	(703)	(4,011)	3,030
Balance at end of period	9,112	14,715	9,112	14,715
Consumer Portfolio Segment | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	338	0	0	0
Charge-offs	(1,432)	(1,233)	(5,442)	(3,847)
Recoveries	139	88	363	932
Provision for Non Covered Loan and Lease Losses	1,986	1,145	6,110	2,915
Balance at end of period	1,031	0	1,031	0
Consumer Portfolio Segment | Most recent acquired loans accounted under ASC 310-30
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	62		418
Provision for Non Covered Loan and Lease Losses	(57)		(413)
Balance at end of period	5		5
Consumer Portfolio Segment | Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	7,887	2,341	6,006	856
Charge-offs	(1,585)	(465)	(3,820)	(1,034)
Recoveries	66	37	457	143
Provision for Non Covered Loan and Lease Losses	2,341	2,915	6,066	4,863
Balance at end of period	8,709	4,828	8,709	4,828
Auto Portfolio Segment | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	2,642	0	1,428	0
Charge-offs	(1,748)	(1,598)	(4,414)	(4,723)
Recoveries	519	884	1,504	3,000
Provision for Non Covered Loan and Lease Losses	1,746	1,394	4,641	2,403
Balance at end of period	3,159	680	3,159	680
Auto Portfolio Segment | Most recent acquired loans accounted under ASC 310-30
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	0		732
Provision for Non Covered Loan and Lease Losses	0		(732)
Balance at end of period	0		0
Auto and Leasing Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at end of period	13,404		13,404
Auto and Leasing Portfolio Segment | Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	11,127	3,641	7,866	533
Charge-offs	(7,393)	(1,305)	(17,994)	(2,105)
Recoveries	2,434	639	6,094	855
Provision for Non Covered Loan and Lease Losses	7,236	3,143	17,438	6,835
Balance at end of period	13,404	6,118	13,404	6,118
Unallocated Financing Receivables | Non-covered acquired loans accounted under ASC 310-20
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	0	0	0	0
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision for Non Covered Loan and Lease Losses	0	0	0	0
Balance at end of period	0	0	0	0
Unallocated Financing Receivables | Non-covered originated loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	139	720	375	368
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision for Non Covered Loan and Lease Losses	43	201	(193)	553
Balance at end of period	182	921	182	921
Construction Portfolio Segment | Most recent acquired loans accounted under ASC 310-30
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	0		0
Provision for Non Covered Loan and Lease Losses	0		0
Balance at end of period	$ 0		$ 0

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Segment Reporting

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Reporting

NOTE 20–BUSINESSSEGMENTS

The Company segregates its businesses into the following major reportable segments of business: Banking, Wealth Management, and Treasury. Management established the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. Other factors such as the Company's organization, nature of its products, distribution channels and economic characteristics of the products were also considered in the determination of the reportable segments. The Company measures the performance of these reportable segments based on pre-established goals of different financial parameters such as net income, net interest income, loan production, and fees generated. The Company's methodology for allocating non-interest expenses among segments is based on several factors such as revenue, employee headcount, occupied space, dedicated services or time, among others. These factors are reviewed on a periodical basis and may change if the conditions warrant.

Banking includes the Bank's branches and traditional banking products such as deposits and commercial, consumer and mortgage loans. Mortgage banking activities are carried out by the Bank's mortgage banking division, whose principal activity is to originate mortgage loans for the Company's own portfolio. As part of its mortgage banking activities, the Company may sell loans directly into the secondary market or securitize conforming loans into mortgage-backed securities.

Wealth Managementis comprised of the Bank's trust division, Oriental Financial Services, Oriental Insurance, and CPC. The core operations of this segment are financial planning, money management and investment banking, brokerage services, insurance sales activity, corporate and individual trust and retirement services, as well as pension plan administration services.

The Treasury segment encompasses all of the Company's asset/liability management activities, such as purchases and sales of investment securities, interest rate risk management, derivatives, and borrowings. Intersegment sales and transfers, if any, are accounted for as if the sales or transfers were to third parties, that is, at current market prices.

Following are the results of operations and the selected financial information by operating segment for the quartersand nine-month periodsendedSeptember 30, 2014and 2013:

	Quarter Ended September 30, 2014
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	108,548	$	44	$	11,709	$	120,301	$	-	$	120,301
Interest expense		(7,892)		-		(10,538)		(18,430)		-		(18,430)
Net interest income		100,656		44		1,171		101,871		-		101,871
Provision for non-covered loan and lease losses		(16,142)		-		-		(16,142)		-		(16,142)
Provision for covered loan and lease losses		(1,115)		-		-		(1,115)		-		(1,115)
Non-interest income (loss)		(3,242)		6,208		(475)		2,491		-		2,491
Non-interest expenses		(53,669)		(4,483)		(1,423)		(59,575)		-		(59,575)
Intersegment revenue		431		-		290		721		(721)		-
Intersegment expenses		(290)		(330)		(101)		(721)		721		-
Income before income taxes	$	26,629	$	1,439	$	(538)	$	27,530	$	-	$	27,530
Total assets	$	6,494,141	$	26,800	$	2,098,341	$	8,619,282		(945,943)	$	7,673,339
	Quarter Ended September 30, 2013
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	109,311	$	95	$	11,695	$	121,101	$	-	$	121,101
Interest expense		(10,994)		-		(11,016)		(22,010)		-		(22,010)
Net interest income		98,317		95		679		99,091		-		99,091
Provision for non-covered loan and lease losses		(9,900)		-		-		(9,900)		-		(9,900)
Provision for covered loan and lease losses		(3,074)		-		-		(3,074)		-		(3,074)
Non-interest income (loss)		(3,960)		7,114		169		3,323		-		3,323
Non-interest expenses		(52,615)		(6,168)		(4,451)		(63,234)		-		(63,234)
Intersegment revenue		562		-		-		562		(562)		-
Intersegment expenses		-		(461)		(101)		(562)		562		-
Income before income taxes	$	29,330	$	580	$	(3,704)	$	26,206	$	-	$	26,206
Total assets	$	6,542,840	$	40,994	$	2,691,621	$	9,275,455	$	(895,230)	$	8,380,225

	Nine-Month Period Ended September 30, 2014
			Wealth					Total Major				Consolidated
	Banking		Management			Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	330,148	$	132		$	38,995	$	369,275	$	-	$	369,275
Interest expense		(26,235)		-			(31,693)		(57,928)		-		(57,928)
Net interest income		303,913		132			7,302		311,347		-		311,347
Provision for non-covered loan and lease losses		(39,424)		-			-		(39,424)		-		(39,424)
Provision for covered loan and lease losses, net		(4,339)		-			-		(4,339)		-		(4,339)
Non-interest income(loss)		(14,845)		20,232			2,840		8,227		-		8,227
Non-interest expenses		(156,867)		(15,629)			(8,331)		(180,827)		-		(180,827)
Intersegment revenue		1,410		-			290		1,700		(1,700)		-
Intersegment expenses		(290)		(1,089)	$		(321)		(1,700)		1,700		-
Income before income taxes	$	89,558	$	3,646			1,780	$	94,984	$	-	$	94,984
	Nine-Month Period Ended September 30, 2013
			Wealth					Total Major				Consolidated
	Banking		Management			Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	325,432	$	277		$	35,865	$	361,574	$	-	$	361,574
Interest expense		(31,490)		-			(31,084)		(62,574)		-		(62,574)
Net interest income		293,942		277			4,781		299,000		-		299,000
Provision for non-covered loan and lease losses		(55,343)		-			-		(55,343)		-		(55,343)
Provision for covered loan and lease losses, net		(4,957)		-			-		(4,957)		-		(4,957)
Non-interest income(loss)		(7,151)		22,915			4,199		19,963		-		19,963
Non-interest expenses		(168,119)		(18,945)			(11,470)		(198,534)		-		(198,534)
Intersegment revenue		1,524		-			-		1,524		(1,524)		-
Intersegment expenses		-		(1,247)			(277)		(1,524)		1,524		-
Income (loss) before income taxes	$	59,896	$	3,000		$	(2,767)	$	60,129	$	-	$	60,129

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FDIC Asset and True-up Payment Obligation (Fair value and the undiscounted amount of the true-up payment obligation) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
FDIC-Assisted Acquisition [Abstract]
Business Combination Contingent Consideration Liability	$ 21,106	$ 18,510
Business Combination Contingent Consideration Potential Cash Payment	$ 40,638	$ 40,199

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Offset of Assets/Liabilities (Tables)

9 Months Ended

Sep. 30, 2014

Offsetting [Abstract]

Offsetting Assets [Table Text Block]

September 30, 2014
							Gross Amounts Not Offset in the Statement of Financial Condition
			Gross Amounts		Net Amount of
			Offset in the		Assets Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Assets		Condition		Condition		Instruments		Received		Amount
	(In thousands)
Derivatives	$	8,445	$	-	$	8,445	$	2,003	$	-	$	6,442
Total	$	8,445	$	-	$	8,445	$	2,003	$	-	$	6,442
December 31, 2013
							Gross Amounts Not Offset in the Statement of Financial Condition
			Gross Amounts		Net amount of
			Offset in the		Assets Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Assets		Condition		Condition		Instruments		Received		Amount
	(In thousands)
Derivatives	$	20,502	$	-	$	20,502	$	2,450	$	6,780	$	11,272
Securities purchased under agreements to resell		60,000		-		60,000		64,587		-		(4,587)
Total	$	80,502	$	-	$	80,502	$	67,037	$	6,780	$	6,685

Offsetting Liabilities [Table Text Block]

September 30, 2014
							Gross Amounts Not Offset in the Statement of Financial Condition
					Net Amount of
			Gross Amounts		Liabilities
			Offset in the		Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Liabilities		Condition		Condition		Instruments		Provided		Amount
					(In thousands)
Derivatives	$	17,001	$	-	$	17,001	$	-	$	2,980	$	14,021
Securities sold under agreements to repurchase		1,010,000		-		1,010,000		1,101,222		24,500		(115,722)
Total	$	1,027,001	$	-	$	1,027,001	$	1,101,222	$	27,480	$	(101,701)
December 31, 2013
							Gross Amounts Not Offset in the Statement of Financial Condition
					Net Amount of
			Gross Amounts		Liabilities
			Offset in the		Presented
	Gross Amount		Statement of		in Statement				Cash
	of Recognized		Financial		of Financial		Financial		Collateral		Net
	Liabilities		Condition		Condition		Instruments		Provided		Amount
	(In thousands)
Derivatives	$	30,672	$	-	$	30,672	$	-	$	2,349	$	28,323
Securities sold under agreements to repurchase		1,265,000		-		1,265,000		1,277,919		67,029		(79,948)
Total	$	1,295,672	$	-	$	1,295,672	$	1,277,919	$	69,378	$	(51,625)

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Taxes [Abstract]

Income Taxes

NOTE 13— INCOME TAXES

On July 1st, 2014 the Governor signed Act No. 77-2014, known as “Ley de Ajustes al SistemaContributivo” (Act of Adjustments to the Tax System). The main purpose of the Act is to increase government collections in order to alleviate the structural deficit. The most relevant provisions of the Act, as applicable to the Company, and effective for transactions held after June 30, 2014 are as follows: (1) the capital tax rate was increased from 15% to 20% and (2) for an asset to be considered long term capital asset, the holding period must be over a year, which before was defined with a holding period of over six months.

Other provisions applicable to tax years commencing after December 31, 2013 is the additional tax on gross income (“patentenacional”) is defined as a separate tax, rather than a component of the Alternative Minimum Tax (AMT) for non-financial institutions and, therefore is not longer accounted for under the provisions of ASC 740. For financial institutions, the additional tax on gross income remained mostly unaltered at a tax rate of 1% of its gross income of a taxable year, of which fifty percent (50%) may be claimed as a credit against the financial institution's applicable income tax of that year.

At September 30, 2014 and December 31, 2013, the Company's net deferred tax asset amounted to $121.2 million and $137.6 million, respectively. In assessing the realizability of the deferred tax asset, management considers whether it is more likely than not that some portion or the entire deferred tax asset will not be realized. The ultimate realization of the deferred tax asset is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.  Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.  Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax asset are deductible, management believes it is more likely than not that the Company will realize the entire deferred tax asset, net of the existing valuation allowances recorded at September 30, 2014 and December 31, 2013. The amount of the deferred tax asset that is considered realizable could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

At September 30, 2014 and December 31, 2013, Oriental International Bank Inc. (“OIB”), the Bank's international banking entity subsidiary, had $198 thousand and $356 thousand, respectively, in income tax effect of unrecognized gain on available-for-sale securities included in other comprehensive income. Following the change in OIB's applicable tax rate from 5% to 0% as a result of a Puerto Rico law adopted in 2011, this remaining tax balance will flow through income as these securities are repaid or sold in future periods. During the quarters ended September 30, 2014 and 2013, $11 thousand and $36 thousand, respectively, related to this residual tax effect from OIB was reclassified from accumulated other comprehensive income into income tax provision. During the nine-month periods ended September 30, 2014 and 2013, $158 thousand and $126 thousand, respectively, related to the residual effect from OIB was reclassified from accumulated other comprehensive income to income tax provision.

The Company classifies unrecognized tax benefits in income taxes payable. These gross unrecognized tax benefits would affect the effective tax rate if realized. The balance of unrecognized tax benefits at September 30, 2014was $2.6 million (December 31, 2013 - $4.0 million). The Company had accrued $430 thousand at September 30, 2014 (December 31, 2013 - $1.2million) for the payment of interest and penalties relating to unrecognized tax benefits. Also, during this quarter the Company recorded a reversal of an income tax contingency of $1.0 million as a result of reviewing the positions of certain unrecognized tax benefits at the Bank.

Income tax expense was $8.0 million for the quarter ended September 30, 2014, compared to $6.6 million for the same period in 2013. Effective July 1, 2014, capital gains tax rate was increased from 15% to 20% as explained above.

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Accumulated Other Comprehensive Income (Changes in Other Comprehensive Income by Components) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net unrealized gains on securities available for sale
Changes in components of Accumulated Other comprehensive Income
Beginning balance	$ 29,759	$ 25,400	$ 11,433	$ 68,245
Other Comprehensive Income Loss Before Reclassifications Net Of Tax	(9,452)	(5,113)	8,727	(48,047)
Reclassification Out Of Accumulated Other Comprehensive Income	11	37	158	126
Other Comprehensive Income (Loss) Other Net Of Tax	(9,441)	(5,076)	8,885	(47,921)
Ending balance	20,318	20,324	20,318	20,324
Net unrealized loss on cash flow hedges
Changes in components of Accumulated Other comprehensive Income
Beginning balance	(8,004)	(9,634)	(8,242)	(12,365)
Other Comprehensive Income Loss Before Reclassifications Net Of Tax	(559)	(1,509)	(3,584)	(1,530)
Reclassification Out Of Accumulated Other Comprehensive Income	1,656	1,651	4,919	4,403
Other Comprehensive Income (Loss) Other Net Of Tax	1,097	142	1,335	2,873
Ending balance	(6,907)	(9,492)	(6,907)	(9,492)
Accumulated Other Comprehensive Income (Loss) [Member]
Changes in components of Accumulated Other comprehensive Income
Beginning balance	21,755	15,766	3,191	55,880
Other Comprehensive Income Loss Before Reclassifications Net Of Tax	(10,011)	(6,622)	5,143	(49,577)
Reclassification Out Of Accumulated Other Comprehensive Income	1,667	1,688	5,077	4,529
Other Comprehensive Income (Loss) Other Net Of Tax	(8,344)	(4,934)	10,220	(45,048)
Ending balance	$ 13,411	$ 10,832	$ 13,411	$ 10,832