10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

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 ☐             Accelerated Filer ý               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:

 43,913,719  common shares ($1.00 par value per share) outstanding as of July 31, 2016

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 (Loss)		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	41
		Note 6 – FDIC Indemnification Asset, True-Up Payment Obligation, and FDIC                                         Shared-Loss Expense	50
		Note 7 – Derivatives	52
		Note 8 – Accrued Interest Receivable and Other Assets	55
		Note 9 – Deposits and Related Interest	56
		Note 10 – Borrowings and Related Interest	57
		Note 11 – Offsetting of  Financial Assets and Liabilities	60
		Note 12 – Related Party Transactions	61
		Note 13 – Income Taxes	62
		Note 14 – Regulatory Capital Requirements	63
		Note 15 – Stockholders’ Equity	65
		Note 16 – Accumulated Other Comprehensive Income	66
		Note 17 – Earnings (Loss) per Common Share	69
		Note 18 – Guarantees	70
		Note 19 – Commitments and Contingencies	71
	Note 20 – Fair Value of Financial Instruments		73
	Note 21 – Business Segments		82
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		85
		Critical Accounting Policies and  Estimates	85
		Overview of Financial Performance:	86
		Selected Financial Data	86
		Financial Highlights of the Second Quarter of 2016	88
		Analysis of Results of Operations	89
		Analysis of Financial Condition	106
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		132
Item 4.	Controls and Procedures		136
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings		137
Item 1A.	Risk Factors		137
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		137
Item 3.	Default upon Senior Securities		137
Item 4.	Mine Safety Disclosures		137
Item 5.	Other Information		137
Item 6.	Exhibits		138
SIGNATURES			139
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:

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

·possible legislative, tax or regulatory changes;

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

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

Puerto Rico;

·competition in the financial services industry;

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

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

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

·the impact of the industry regulations on the Company’s businesses, business practices and cost of operations;

·the performance of the securities markets; and

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

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 JUNE 30, 2016 AND DECEMBER 31, 2015

	June 30,		December 31,
	2016		2015
	(In thousands)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	511,308	$	532,010
Money market investments		5,740		4,699
Total cash and cash equivalents		517,048		536,709
Restricted cash		3,030		3,349
Investments:
Trading securities, at fair value, with amortized cost of $667 (December 31, 2015 - $667)		348		288
Investment securities available-for-sale, at fair value, with amortized cost of $645,298 (December 31, 2015 - $955,646)		664,302		974,609
Investment securities held-to-maturity, at amortized cost, with fair value of $643,530 (December 31, 2015 - $614,679)		635,399		620,189
Federal Home Loan Bank (FHLB) stock, at cost		19,838		20,783
Other investments		3		3
Total investments		1,319,890		1,615,872
Loans:
Mortgage loans held-for-sale, at lower of cost or fair value		18,209		13,614
Loans held for investment, net of allowance for loan and lease losses of $162,216 (December 31, 2015 - $234,131)		4,355,408		4,420,599
Total loans		4,373,617		4,434,213
Other assets:
FDIC indemnification asset		18,426		22,599
Foreclosed real estate		51,220		58,176
Accrued interest receivable		20,009		20,637
Deferred tax asset, net		143,048		145,901
Premises and equipment, net		72,585		74,590
Customers' liability on acceptances		20,984		14,582
Servicing assets		7,932		7,455
Derivative assets		1,926		3,025
Goodwill		86,069		86,069
Other assets		76,812		75,972
Total assets	$	6,712,596	$	7,099,149
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand deposits	$	1,972,743	$	1,862,572
Savings accounts		1,176,169		1,179,229
Time deposits		1,495,142		1,675,950
Total deposits		4,644,054		4,717,751
Borrowings:
Securities sold under agreements to repurchase		626,109		934,691
Advances from FHLB		306,480		332,476
Subordinated capital notes		102,983		102,633
Other borrowings		1,753		1,734
Total borrowings		1,037,325		1,371,534
Other liabilities:
Derivative liabilities		5,413		6,162
Acceptances executed and outstanding		20,984		14,582
Accrued expenses and other liabilities		88,930		92,043
Total liabilities		5,796,706		6,202,072
Commitments and contingencies (See Note 19)
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, 2015 - 1,340,000 shares; 1,380,000 shares; and 960,000 shares)
$25 liquidation value		92,000		92,000
84,000 shares of Series C issued and outstanding (December 31, 2015 - 84,000 shares); $1,000 liquidation value		84,000		84,000
Common stock, $1 par value; 100,000,000 shares authorized; 52,625,869 shares issued:
43,913,719 shares outstanding (December 31, 2015 - 52,625,869; 43,867,909)		52,626		52,626
Additional paid-in capital		540,705		540,512
Legal surplus		73,265		70,435
Retained earnings		162,363		148,886
Treasury stock, at cost, 8,712,150 shares (December 31, 2015 - 8,757,960 shares)		(104,874)		(105,379)
Accumulated other comprehensive income, net of tax of -$456 (December 31, 2015  $1,182)		15,805		13,997
Total stockholders’ equity		915,890		897,077
Total liabilities and stockholders’ equity	$	6,712,596	$	7,099,149
See notes to unaudited consolidated financial statements

1

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE QUARTERS AND SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands, except per share data)				(In thousands, except per share data)
Interest income:
Loans	$	79,675	$	90,504	$	160,827	$	187,987
Mortgage-backed securities		7,220		7,998		16,217		16,587
Investment securities and other		1,013		911		2,170		1,840
Total interest income		87,908		99,413		179,214		206,414
Interest expense:
Deposits		7,367		6,604		14,491		13,708
Securities sold under agreements to repurchase		4,258		7,394		10,358		14,558
Advances from FHLB and other borrowings		2,098		2,248		4,337		4,483
Subordinated capital notes		873		875		1,741		1,738
Total interest expense		14,596		17,121		30,927		34,487
Net interest income		73,312		82,292		148,287		171,927
Provision for loan and lease losses, net		14,445		15,539		28,234		57,732
Net interest income after provision for loan and lease losses		58,867		66,753		120,053		114,195
Non-interest income:
Banking service revenue		10,219		10,212		20,337		20,417
Wealth management revenue		7,041		7,285		13,193		14,440
Mortgage banking activities		1,024		1,862		1,879		3,725
Total banking and financial service revenues		18,284		19,359		35,409		38,582
FDIC shared-loss expense, net		(3,420)		(23,245)		(7,449)		(36,329)
Net gain (loss) on:
Sale of securities		211		-		12,207		2,572
Derivatives		(10)		77		(13)		(13)
Early extinguishment of debt		-		-		(12,000)		-
Other non-interest income (loss)		90		(847)		504		(2,587)
Total non-interest income (loss), net		15,155		(4,656)		28,658		2,225
Non-interest expense:
Compensation and employee benefits		18,531		19,260		38,815		39,440
Professional and service fees		3,511		4,143		7,138		8,324
Occupancy and equipment		8,107		8,883		15,929		17,519
Insurance		3,155		2,251		6,305		4,204
Electronic banking charges		4,947		5,851		10,536		11,218
Information technology expenses		1,606		1,543		3,262		2,997
Advertising, business promotion, and strategic initiatives		1,343		1,558		2,786		3,186
Foreclosure, repossession and other real estate expenses		5,164		10,337		7,971		15,783
Loan servicing and clearing expenses		1,926		2,594		4,007		4,947
Taxes, other than payroll and income taxes		2,330		2,703		5,001		4,182
Communication		581		770		1,400		1,460
Printing, postage, stationary and supplies		600		582		1,325		1,219
Director and investor relations		301		289		579		583
Other		1,723		3,673		3,628		5,707
Total non-interest expense		53,825		64,437		108,682		120,769
Income (loss) before income taxes		20,197		(2,340)		40,029		(4,349)
Income tax expense		5,858		769		11,519		1,748
Net income (loss)		14,339		(3,109)		28,510		(6,097)
Less: dividends on preferred stock		(3,466)		(3,466)		(6,931)		(6,931)
Net income (loss) available to common shareholders	$	10,873	$	(6,575)	$	21,579	$	(13,028)
Earnings (loss) per common share:
Basic	$	0.25	$	(0.15)	$	0.49		(0.29)
Diluted	$	0.25	$	(0.15)	$	0.49		(0.29)
Average common shares outstanding and equivalents		51,095		51,774		51,081		51,876
Cash dividends per share of common stock	$	0.06	$	0.10	$	0.12		0.20
See notes to unaudited consolidated financial statements

2

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE QUARTERS AND SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Net income (loss)	$	14,339	$	(3,109)	$	28,510	$	(6,097)
Other comprehensive income (loss) before tax:
Unrealized gain (loss) on securities available-for-sale		3,719		(12,916)		12,364		(5,541)
Realized gain on investment securities included in net income (loss)		(211)		-		(12,207)		(2,572)
Unrealized gain on cash flow hedges		663		2,016		652		2,071
Other comprehensive income (loss) before taxes		4,171		(10,900)		809		(6,042)
Income tax effect		(650)		877		999		632
Other comprehensive income (loss) after taxes		3,521		(10,023)		1,808		(5,410)
Comprehensive income (loss)	$	17,860	$	(13,132)	$	30,318	$	(11,507)
See notes to unaudited consolidated financial statements

3

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

	Six-Month Period Ended June 30,
	2016		2015
	(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		52,626		52,626
Balance at end of period		52,626		52,626
Additional paid-in capital:
Balance at beginning of period		540,512		539,311
Stock-based compensation expense		698		794
Lapsed restricted stock units		(505)		(436)
Balance at end of period		540,705		539,669
Legal surplus:
Balance at beginning of period		70,435		70,467
Transfer from (to) retained earnings		2,830		(533)
Balance at end of period		73,265		69,934
Retained earnings:
Balance at beginning of period		148,886		181,152
Net income (loss)		28,510		(6,097)
Cash dividends declared on common stock		(5,272)		(8,920)
Cash dividends declared on preferred stock		(6,931)		(6,931)
Transfer (to) from legal surplus		(2,830)		533
Balance at end of period		162,363		159,737
Treasury stock:
Balance at beginning of period		(105,379)		(97,070)
Stock repurchased		-		(4,238)
Lapsed restricted stock units		505		640
Balance at end of period		(104,874)		(100,668)
Accumulated other comprehensive income, net of tax:
Balance at beginning of period		13,997		19,711
Other comprehensive income (loss), net of tax		1,808		(5,410)
Balance at end of period		15,805		14,301
Total stockholders’ equity	$	915,890	$	911,599
See notes to unaudited consolidated financial statements

4

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

	Six-Month Period Ended June 30,
	2016		2015
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	28,510	$	(6,097)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of deferred loan origination fees, net of costs		1,977		1,813
Amortization of fair value premiums, net of discounts, on acquired loans		39		2,766
Amortization of investment securities premiums, net of accretion of discounts		4,356		5,931
Amortization of core deposit and customer relationship intangibles		839		953
Amortization of fair value premiums on acquired deposits		189		478
FDIC shared-loss expense, net		7,449		36,329
Depreciation and amortization of premises and equipment		5,025		5,930
Deferred income tax expense (benefit), net		3,543		(1,316)
Provision for loan and lease losses, net		28,234		57,732
Stock-based compensation		698		794
(Gain) loss on:
Sale of securities		(12,207)		(2,572)
Sale of mortgage loans held-for-sale		(809)		(2,010)
Derivatives		88		(113)
Early extinguishment of debt		12,000		-
Foreclosed real estate		7,287		(706)
Sale of other repossessed assets		(1,235)		3,427
Sale of premises and equipment		13		10
Originations of loans held-for-sale		(90,052)		(111,433)
Proceeds from sale of loans held-for-sale		32,212		46,678
Net (increase) decrease in:
Trading securities		(60)		808
Accrued interest receivable		628		2,091
Servicing assets		(477)		1,216
Other assets		(4,872)		(19,813)
Net increase (decrease) in:
Accrued interest on deposits and borrowings		(373)		(608)
Accrued expenses and other liabilities		8,253		24,219
Net cash provided by operating activities		31,255		46,507
Cash flows from investing activities:
Purchases of:
Investment securities available-for-sale		(302)		(1,671)
Investment securities held-to-maturity		(51,717)		(399,206)
FHLB stock		(8,512)		-
Maturities and redemptions of:
Investment securities available-for-sale		74,208		121,121
Investment securities held-to-maturity		34,304		10,725
FHLB stock		9,457		343
Proceeds from sales of:
Investment securities available-for-sale		300,483		103,831
Foreclosed real estate and other repossessed assets, including write-offs		25,779		34,136
Proceeds from sale of loans held-for-sale		478		-
Premises and equipment		44		10
Mortgage servicing rights		-		5,927
Origination and purchase of loans, excluding loans held-for-sale		(373,927)		(414,725)
Principal repayment of loans, including covered loans		386,477		491,330
Reimbursements from the FDIC on shared-loss agreements		738		31,657
Additions to premises and equipment		(3,077)		(1,838)
Net change in restricted cash		319		2,321
Net cash provided by (used in) investing activities		394,752		(16,039)

5

OFG BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTHS PERIODS ENDED JUNE 30, 2016 AND 2015 – (CONTINUED)

	Six-Month Period Ended June 30,
	2016		2015
	(In thousands)
Cash flows from financing activities:
Net increase (decrease) in:
Deposits		(87,864)		(209,272)
Securities sold under agreements to repurchase		(320,000)		181,129
FHLB advances, federal funds purchased, and other borrowings		(25,951)		(2,845)
Subordinated capital notes		350		525
Exercise of stock options and restricted units lapsed, net		-		204
Purchase of treasury stock		-		(4,238)
Dividends paid on preferred stock		(6,931)		(6,931)
Dividends paid on common stock		(5,272)		(8,932)
Net cash used in financing activities	$	(445,668)	$	(50,360)
Net change in cash and cash equivalents		(19,661)		(19,892)
Cash and cash equivalents at beginning of period		536,709		573,427
Cash and cash equivalents at end of period	$	517,048	$	553,535
Supplemental Cash Flow Disclosure and Schedule of Non-cash Activities:
Interest paid	$	30,454	$	34,403
Income taxes paid	$	3,642	$	6,730
Mortgage loans securitized into mortgage-backed securities	$	53,872	$	61,854
Transfer from loans to foreclosed real estate and other repossessed assets	$	21,865	$	15,390
Reclassification of loans held-for-investment portfolio to held-for-sale portfolio	$	-	$	1,473
Reclassification of loans held-for-sale portfolio to held-for-investment portfolio	$	182	$	156
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 (the “Bank”), a securities broker-dealer, Oriental Financial Services Corp. (“Oriental Financial Services”), an insurance agency, Oriental Insurance, LLC (“Oriental Insurance”) and a retirement plan administrator, Oriental Pension Consultants, Inc. (“OPC”). 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 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 June 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance that will require the earlier recognition of credit losses on loans and other financial instruments based on an expected loss model, replacing the incurred loss model that is currently in use. Under the new guidance, an entity will measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The expected loss model will apply to loans and leases, unfunded lending commitments, held-to-maturity (HTM) debt securities and other debt instruments measured at amortized cost. The impairment model for available-for-sale (AFS) debt securities will require the recognition of credit losses through a valuation allowance when fair value is less than amortized cost, regardless of whether the impairment is considered to be other-than-temporary. The new guidance is effective on January 1, 2020, with early adoption permitted on January 1, 2019. The Company is in the process of evaluating the impact of the provisions of this new accounting guidance. 

In March 2016, the FASB issued new accounting guidance that simplifies certain aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance is effective on January 1, 2017, with early adoption permitted. The Company does not expect the provisions of this new accounting guidance to have a material impact on its consolidated financial position or results of operations.

In February 2016, the FASB issued new accounting guidance that requires substantially all leases to be recorded as assets and liabilities on the balance sheet. This new accounting guidance is effective on January 1, 2019, with early adoption permitted. Upon adoption, the Company will record a right of use asset and a lease payment obligation associated with arrangements previously accounted for as operating leases. The Company is in the process of evaluating the impact of the provisions of this new accounting guidance on its consolidated financial position, but does not expect the new accounting guidance to have a material impact on its consolidated financial position or results of operations.

In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial instruments. The new guidance makes targeted changes to existing GAAP including, among other provisions, requiring certain equity investments to be measured at fair value with changes in fair value reported in earnings and requiring changes in instrument-specific credit risk. The new guidance is effective on January 1, 2018. The Company does not expect the provisions of this new accounting guidance to have a material impact on its consolidated financial position or results of operations.

In May 2014, the FASB issued new accounting guidance to clarify the principles for recognizing revenue from contracts with customers. This new accounting guidance is effective on January 1, 2018. The Company does not expect the provisions of this new accounting guidance to have a material impact on its consolidated financial position or results of operations.

7

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 2 – RESTRICTED CASH

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

	June 30,		December 31,
	2016		2015
	(In thousands)
Cash pledged as collateral to other financial institutions to secure:
Derivatives	$	1,980	$	1,980
Obligations under agreement of loans sold with recourse		1,050		1,369
	$	3,030	$	3,349

At June 30, 2016 and December 31, 2015, the Bank’s international banking entities, Oriental International Bank Inc. (“OIB”) and Oriental Overseas, a division of the Bank, each held unencumbered certificates of deposit in the amount of $300 thousand as the legal reserve required for international banking entities under Puerto Rico law. Each certificate of deposit cannot be withdrawn by OIB or Oriental Overseas without prior written approval of the Office of the Commissioner of Financial Institutions of Puerto Rico.

As part of its derivative activities, the Company has entered into collateral agreements with certain financial counterparties. At June 30, 2016 and December 31, 2015, the Company had delivered $2.0 million of cash as collateral for such derivatives activities.

As part of the BBVA Acquisition, the Company assumed a contract with FNMA which required collateral to guarantee the repurchase, if necessary, of loans sold with recourse. At June 30, 2016 and December 31, 2015, the Company delivered as collateral cash amounting to $1.1 million and $1.4 million, respectively.

The Bank is required by Puerto Rico law to maintain average weekly reserve balances to cover demand deposits. The amount of those minimum average reserve balances for the week that covered June 30, 2016 was $178.1 million (December 31, 2015 - $148.3 million). At June 30, 2016 and December 31, 2015, the Bank complied with such requirement. Cash and due from bank as well as other short-term, highly liquid securities are used to cover the required average reserve balances.

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 June 30, 2016 and December 31, 2015, money market instruments included as part of cash and cash equivalents amounted to $5.7 million and $4.7 million, respectively.

8

OFG BANCORP

NOTES TO 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 June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016
			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	$	402,557	$	14,414	$	-	$	416,971	2.61%
GNMA certificates		109,214		5,064		-		114,278	3.06%
CMOs issued by US government-sponsored agencies		120,238		416		179		120,475	1.87%
Total mortgage-backed securities		632,009		19,894		179		651,724	2.55%
Investment securities
Obligations of US government-sponsored agencies		4,468		34		-		4,502	1.37%
Obligations of Puerto Rico government and             public instrumentalities		6,720		-		872		5,848	5.55%
Other debt securities		2,101		127		-		2,228	2.94%
Total investment securities		13,289		161		872		12,578	3.73%
Total securities available for sale	$	645,298	$	20,055	$	1,051	$	664,302	2.57%
Held-to-maturity
Mortgage-backed securities
FNMA and FHLMC certificates	$	610,384		8,121		-		618,505	2.20%
Investment securities
US Treasury securities		25,015		10		-		25,025	0.49%
Total securities held to maturity		635,399		8,131		-		643,530	2.13%
Total	$	1,280,697	$	28,186	$	1,051	$	1,307,832	2.36%

	December 31, 2015
			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	$	735,363	$	25,791	$	1,509	$	759,645	2.97%
GNMA certificates		57,129		1,366		-		58,495	3.19%
CMOs issued by US government-sponsored agencies		137,787		27		2,741		135,073	1.85%
Total mortgage-backed securities		930,279		27,184		4,250		953,213	2.82%
Investment securities
Obligations of US government-sponsored agencies		5,122		-		29		5,093	1.36%
Obligations of Puerto Rico government and             public instrumentalities		17,801		-		4,070		13,731	6.24%
Other debt securities		2,444		128		-		2,572	2.98%
Total investment securities		25,367		128		4,099		21,396	4.94%
Total securities available-for-sale	$	955,646	$	27,312	$	8,349	$	974,609	2.87%
Held-to-maturity
Mortgage-backed securities
FNMA and FHLMC certificates		595,157		426		5,865		589,718	2.24%
Investment securities
US Treasury securities		25,032		-		71		24,961	0.49%
Total securities held to maturity		620,189		426		5,936		614,679	2.17%
Total	$	1,575,835	$	27,738	$	14,285	$	1,589,288	2.60%

9

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The amortized cost and fair value of the Company’s investment securities at June 30, 2016, 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.

	June 30, 2016
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)				(In thousands)
Mortgage-backed securities
Due from 5 to 10 years
FNMA and FHLMC certificates	$	12,650	$	12,996	$	-	$	-
Total due from 5 to 10 years		12,650		12,996		-		-
Due after 10 years
FNMA and FHLMC certificates		389,907		403,975		610,384		618,505
GNMA certificates		109,214		114,278		-		-
CMOs issued by US government-sponsored agencies		120,238		120,475		-		-
Total due after 10 years		619,359		638,728		610,384		618,505
Total  mortgage-backed securities		632,009		651,724		610,384		618,505
Investment securities
Due from 1 to 5 years
US Treasury securities		-		-		25,015		25,025
Obligations of Puerto Rico government and             public instrumentalities		6,720		5,848		-		-
Total due from 1 to 5 years		6,720		5,848		25,015		25,025
Due from 5 to 10 years
Obligations of US government and sponsored agencies		4,468		4,502		-		-
Other debt securities		2,101		2,228		-		-
Total due from 5 to 10 years		6,569		6,730		-		-
Total  investment securities		13,289		12,578		25,015		25,025
Total securities available-for-sale and held-to-maturity	$	645,298	$	664,302	$	635,399	$	643,530

10

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 six-month period ended June 30, 2016, the Company retained securitized Government National Mortgage Association ("GNMA") pools totaling $54.2 million amortized cost, at a yield of 3.01% from its own originations. Previously, the Company was selling all securitized GNMA pools. The GNMA pools were sold until June 2015. During the six-month period ended June 30, 2015, the Company sold $63.5 million of available-for-sale GNMA certificates as part of its recurring mortgage loan origination and securitization activities. These sales did not realize any gains or losses during such period.

During the six-month period ended June 30, 2016, the Company sold $277.2 million of mortgage-backed securities and $11.1 million of Puerto Rico government bonds, and  recorded a net gain on sale of securities of $12.2 million. Among the 2016 sales, the Company sold all but one of the Puerto Rico government bonds it held. The Company had other-than-temporary impairment charges on such securities sold totaling $1.5 million during the second half of 2015. During the six-month period ended June 30, 2015, the Company sold $101.3 million of mortgage-backed securities and recorded a net gain on sale of securities of $2.6 million. The table below presents the gross realized gains and gross realized losses by category for such periods.

	Six-Month Period Ended June 30, 2016
			Book Value
Description	Sale Price		at Sale		Gross Gains		Gross Losses
	(In thousands)
Sale of securities available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	293,505	$	277,181	$	16,324	$	-
Investment securities
Obligations of Puerto Rico government and             public instrumentalities		6,978		11,095		-		4,117
Total	$	300,483	$	288,276	$	16,324	$	4,117

	Six-Month Period Ended June 30, 2015
			Book Value
Description	Sale Price		at Sale		Gross Gains		Gross Losses
	(In thousands)
Sale of securities available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	40,307	$	37,735	$	2,571	$	-
GNMA certificates		63,524		63,523		1		-
Total	$	103,831	$	101,258	$	2,572	$	-

11

OFG BANCORP

NOTES TO 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 June 30, 2016 and December 31, 2015:

	June 30, 2016
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	54,449	$	179	$	54,270
Obligations of Puerto Rico government and public instrumentalities		6,720		872		5,848
	$	61,169	$	1,051	$	60,118

At June 30, 2016 there were no securities available-for-sale or held-to-maturity in a continuous unrealized loss position for less than twelve months. There were no securities held-to-maturity in a continuous unrealized loss position for twelve months or more.

12

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2015
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico Government and public instrumentalities	$	17,801	$	4,070	$	13,731
CMOs issued by US government-sponsored agencies		103,340		2,410		100,930
	$	121,141	$	6,480	$	114,661
	Less than 12 months
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies		25,736		331		25,405
FNMA and FHLMC certificates		149,480		1,509		147,971
Obligations of US government and sponsored agencies		5,122		29		5,093
Securities held to maturity
FNMA and FHLMC certificates		468,487		5,865		462,622
US Treausury Securities		25,032		71		24,961
	$	673,857	$	7,805	$	666,052
	Total
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies		129,076		2,741		126,335
FNMA and FHLMC certificates		149,480		1,509		147,971
Obligations of Puerto Rico Government and public instrumentalities		17,801		4,070		13,731
Obligations of US government and sponsored agencies		5,122		29		5,093
	$	301,479	$	8,349	$	293,130
Securities held to maturity
FNMA and FHLMC certificates		468,487		5,865		462,622
US Treasury Securities		25,032		71		24,961
	$	794,998	$	14,285	$	780,713

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 the statements of operations with the remaining noncredit-related component recognized in other comprehensive income (loss). 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.

13

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Most of the investments ($54.5 million, amortized cost, or 89%) with an unrealized loss position at June 30, 2016 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 ($6.7 million, amortized cost, or 11%) with an unrealized loss position at June 30, 2016 consist of obligations issued or guaranteed by the government of Puerto Rico and its public instrumentalities. The decline in the market value of this security 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 the government's credit default, a protracted economic recession, sizable government debt-service obligations and structural budget deficits, high unemployment and a shrinking population.

As of June 30, 2016, the Company applied a discounted cash flow analysis to the Puerto Rico government bond 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 a 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 only obligation issued or guaranteed by the government of Puerto Rico and its instrumentalities held at the end of the second quarter of 2016 by the Company was the Puerto Rico Highways and Transportation Authority (“PRHTA”) – Teodoro Moscoso Bridge revenue bond. The pledge income sources of this bond comes from gross revenues from Teodoro Moscoso Bridge operations. Although PRHTA is included in the Puerto Rico Governor's executive order of November 30, 2015 ordering the '"clawback" of certain government revenues,  the toll bridge revenues for the repayment of such bonds were not subject to the “clawback." All other Puerto Rico government securities were sold during the first quarter of 2016. The PRHTA bond with a principal amount of  $6.7 million had an aggregate fair value of $5.8 million at June 30, 2016 (87% of the bond's cost). The discounted cash flow analysis for the investments showed a cumulative default probability at maturity of 10.20%, thus reflecting that it is more likely than not that the bond will not default during its remaining term. Based on this analysis, the Company determined that it is more likely than not that it will recover all interest and principal invested in this Puerto Rico government bond and is, therefore, not required to recognize a credit loss as of June 30, 2016. Also, the Company’s conclusion is based on the assessment of the specific source of repayment of the outstanding bond, which continues to perform. PRHTA started principal repayments on July 1, 2014. All scheduled principal and interest payments to date have been collected. On July 1, 2016, the Company received the scheduled principal payment of $2.0 million. The next payment is due on July 1, 2017. As a result of the aforementioned analysis, no other-than-temporary losses were recorded during the quarter ended June 30, 2016. 

The following table presents a roll-forward of credit-related impairment losses recognized in earnings for the six-month period ended June 30, 2016 and 2015 on available-for-sale securities:

	Six-Month Period Ended June 30,
	2016		2015
Balance at beginning of period	$	1,490	$	-
Reductions for securities sold during the period (realized)		(1,490)		-
Balance at end of period	$	-	$	-

14

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 4 - LOANS 

The Company’s loan portfolio is composed of two segments, loans initially accounted for under the amortized cost method (referred to as "originated and other" loans) and loans acquired (referred to as "acquired" loans). Acquired loans are further segregated between acquired BBVAPR loans and acquired Eurobank loans. Acquired Eurobank loans were purchased subject to loss-sharing agreements with the FDIC. The FDIC loss-share coverage related to commercial and other-non single family acquired Eurobank loans expiredon June 30, 2015. Notwithstanding the expiration of loss share coverage of commercial loans, on July 2, 2015, the Company entered into an agreement with the FDIC pursuant to which the FDIC concurred with a potential sale of a pool of loss-share assets covered under the commercial loss-sharing agreement. Pursuant to such agreement, and as further discussed below, the FDIC agreed to and paid $20 million in loss share coverage with respect to the aggregate loss resulting from any portfolio sale within 120 days of the agreement. This sale was completed on September 28, 2015. Covered loans are no longer a material amount. Therefore, the Company changed its loan disclosures during 2015.

The coverage for the single family residential loans will expire on June 30, 2020. At June 30, 2016, the remaining covered loans, amounting to $65.8 million, net carrying amount ($76.8 million gross amount), are included as part of acquired Eurobank loans under the name "loans secured by 1-4 family residential properties." At December 31, 2015, covered loans amounted to $67.2 million, net carrying amount ($92.3 million gross amount). Interest income recognized for covered loans during the six-month periods ended June 30, 2016 and 2015 was $4.3 million and $28.3 million, respectively. The decrease in interest income recognized for covered loans is due to the expiration of the FDIC loss-share coverage related to commercial and other-non single family residential loans on June 30, 2015.

Effective June 30, 2016, pursuant to supervisory direction, the Company changed the purchase credit impaired policy for all loans accounted for under ASC 310-30 (Loans and Debt Securities Acquired with Deteriorated Credit Quality). Under the revised policy, the Company writes-off the loan’s recorded investment and derecognizes the associated allowance for loan and lease losses for loans that exit the acquired  pools. The revised policy will be implemented prospectively due to the immaterial impact of retrospective adoption. Prior to June 30, 2016, the pool’s carrying value and allowance was determined by discounting expected cash flows at the pool’s effective yield. The allowance for loan and lease losses was maintained until all of the loans in the pool were paid off or charged-off.  The transition to this revised policy on June 30, 2016 resulted in the de-recognition of $8.5 million and $72.2 million in the recorded investment balance and associated allowance for loans that had exited the pools, for acquired BBVAPR loans and acquired Eurobank loans, respectively, with no impact to the provision for loan and lease losses. Refer to Note 5 Allowances for Loan and Lease Losses.

15

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The composition of the Company’s loan portfolio at June 30, 2016 and December 31, 2015 was as follows:

		June 30,		December 31,
	2016		2015
	(In thousands)
Originated and other loans and leases held for investment:
Mortgage	$	741,917	$	757,828
Commercial		1,476,613		1,441,649
Consumer		265,269		242,950
Auto and leasing		712,268		669,163
		3,196,067		3,111,590
Allowance for loan and lease losses on originated and other loans and leases		(112,812)		(112,626)
		3,083,255		2,998,964
Deferred loan costs, net		4,619		4,203
Total originated and other loans loans held for investment, net		3,087,874		3,003,167
Acquired loans:
Acquired BBVAPR loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		4,559		7,457
Consumer		35,194		38,385
Auto		77,118		106,911
		116,871		152,753
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-20		(4,487)		(5,542)
		112,384		147,211
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy) (a)
Mortgage		591,029		608,294
Commercial		246,188		287,311
Construction		76,917		88,180
Consumer		7,331		11,843
Auto		117,038		153,592
		1,038,503		1,149,220
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-30 (b)		(22,801)		(25,785)
		1,015,702		1,123,435
Total acquired BBVAPR loans, net		1,128,086		1,270,646
Acquired Eurobank loans: (a)
Loans secured by 1-4 family residential properties		76,777		92,273
Commercial and construction		83,377		142,377
Consumer		1,410		2,314
Total acquired Eurobank loans		161,564		236,964
Allowance for loan and lease losses on Eurobank loans (b)		(22,116)		(90,178)
Total acquired Eurobank loans, net		139,448		146,786
Total acquired loans, net		1,267,534		1,417,432
Total held for investment, net		4,355,408		4,420,599
Mortgage loans held-for-sale		18,209		13,614
Total loans, net	$	4,373,617	$	4,434,213
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

16

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 June 30, 2016 and December 31, 2015 by class of loans. Mortgage loans past due include delinquent loans in the GNMA buy-back option program. Servicers of loans underlying GNMA mortgage-backed securities must report as their own assets the defaulted loans that they have the option (but not the obligation) to repurchase, even when they elect not to exercise that option.

	June 30, 2016
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	260	$	2,024	$	2,973	$	5,257	$	-	$	48,801	$	54,058	$	227
Years 2003 and 2004		343		3,936		6,201		10,480		65		84,208		94,753		-
Year 2005		-		1,878		3,826		5,704		64		46,293		52,061		-
Year 2006		743		2,243		6,741		9,727		50		64,109		73,886		-
Years 2007, 2008             and 2009		854		1,414		11,793		14,061		-		69,957		84,018		699
Years 2010, 2011, 2012, 2013		498		1,307		9,420		11,225		142		133,384		144,751		416
Years 2014, 2015 and 2016		-		189		901		1,090		62		98,209		99,361		-
		2,698		12,991		41,855		57,544		383		544,961		602,888		1,342
Non-traditional		-		938		5,217		6,155		12		20,028		26,195		-
Loss mitigation program		9,898		6,574		15,738		32,210		3,857		68,014		104,081		3,770
		12,596		20,503		62,810		95,909		4,252		633,003		733,164		5,112
Home equity secured personal loans		-		-		-		-		-		384		384		-
GNMA's buy-back option program		-		-		8,369		8,369		-		-		8,369		-
Total mortgage		12,596		20,503		71,179		104,278		4,252		633,387		741,917		5,112
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		-		230,296		230,296		-
Institutional		-		-		-		-		-		27,838		27,838		-
Middle market		-		125		8,589		8,714		2,255		209,127		220,096		-
Retail		96		1,226		5,871		7,193		3,327		236,171		246,691		-
Floor plan		-		-		-		-		-		2,826		2,826		-
Real estate		-		-		-		-		-		16,079		16,079		-
		96		1,351		14,460		15,907		5,582		722,337		743,826		-
Other commercial and industrial:
Corporate		-		-		-		-		-		140,192		140,192		-
Institutional		-		-		-		-		183,020		193,258		376,278		-
Middle market		2,007		-		-		2,007		1,421		102,112		105,540		-
Retail		896		529		582		2,007		135		74,823		76,965		-
Floor plan		6		38		40		84		-		33,728		33,812		-
		2,909		567		622		4,098		184,576		544,113		732,787		-
Total commercial		3,005		1,918		15,082		20,005		190,158		1,266,450		1,476,613		-

17

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	June 30, 2016
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		459		177		432		1,068		-		23,809		24,877		-
Overdrafts		15		1		-		16		-		204		220		-
Personal lines of credit		42		14		94		150		-		2,281		2,431		-
Personal loans		1,854		1,137		898		3,889		875		216,884		221,648		-
Cash collateral personal loans		63		3		1		67		-		16,026		16,093		-
Total consumer		2,433		1,332		1,425		5,190		875		259,204		265,269		-
Auto and leasing		44,433		19,438		7,322		71,193		15		641,060		712,268		-
Total	$	62,467	$	43,191	$	95,008	$	200,666	$	195,300	$	2,800,101	$	3,196,067	$	5,112

18

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2015
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	80	$	2,217	$	3,889	$	6,186	$	41	$	51,562	$	57,789	$	144
Years 2003 and 2004		251		5,036		5,536		10,823		-		88,623		99,446		-
Year 2005		79		2,553		3,549		6,181		-		48,040		54,221		-
Year 2006		551		2,878		7,934		11,363		176		66,864		78,403		-
Years 2007, 2008             and 2009		170		2,053		14,733		16,956		-		74,590		91,546		526
Years 2010, 2011, 2012, 2013		662		1,673		10,519		12,854		141		137,749		150,744		72
Years 2014 and 2015		-		65		663		728		-		85,128		85,856		-
		1,793		16,475		46,823		65,091		358		552,556		618,005		742
Non-traditional		-		977		5,079		6,056		13		23,483		29,552		-
Loss mitigation program		9,958		6,887		14,930		31,775		5,593		64,548		101,916		3,083
		11,751		24,339		66,832		102,922		5,964		640,587		749,473		3,825
Home equity secured personal loans		-		-		64		64		-		346		410		-
GNMA's buy-back option program		-		-		7,945		7,945		-		-		7,945		-
Total mortgage		11,751		24,339		74,841		110,931		5,964		640,933		757,828		3,825
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		-		227,557		227,557		-
Institutional		213		-		-		213		-		33,594		33,807		-
Middle market		1,174		712		9,113		10,999		1,730		194,219		206,948		-
Retail		686		466		6,921		8,073		1,177		231,840		241,090		-
Floor plan		-		-		-		-		-		2,892		2,892		-
Real estate		-		-		-		-		-		16,662		16,662		-
		2,073		1,178		16,034		19,285		2,907		706,764		728,956		-
Other commercial and industrial:
Corporate		-		-		-		-		-		108,582		108,582		-
Institutional		-		-		-		-		190,290		190,695		380,985		-
Middle market		-		-		-		-		1,565		105,748		107,313		-
Retail		282		639		604		1,525		783		75,489		77,797		-
Floor plan		238		51		39		328		-		37,688		38,016		-
		520		690		643		1,853		192,638		518,202		712,693		-
Total commercial		2,593		1,868		16,677		21,138		195,545		1,224,966		1,441,649		-

19

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2015
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		449		182		369		1,000		-		21,766		22,766		-
Overdrafts		24		-		-		24		-		166		190		-
Personal lines of credit		74		-		45		119		19		2,106		2,244		-
Personal loans		2,078		1,179		627		3,884		414		196,858		201,156		-
Cash collateral personal loans		125		17		2		144		-		16,450		16,594		-
Total consumer		2,750		1,378		1,043		5,171		433		237,346		242,950		-
Auto and leasing		53,566		16,898		8,293		78,757		49		590,357		669,163		-
Total	$	70,660	$	44,483	$	100,854	$	215,997	$	201,991	$	2,693,602	$	3,111,590	$	3,825

During 2015, the Company changed its early delinquency reporting on mortgage loans from one scheduled payment due to two scheduled payments due to be comparable with local peers, except for troubled-debt restructured loans which continue using one scheduled payment due for delinquency reporting. During the quarter ended June 30, 2016, the Company changed its early delinquency reporting on consumer and auto loans from one scheduled payment due to two scheduled payments to report consistently its retail portfolio. The change resulted in a $19 thousand and $5.9 million reduction in early and total delinquency for consumer and auto loans, respectively.

At June 30, 2016 and December 31, 2015, the Company had carrying balances of $327.0 million and $334.6 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. All loans granted to the Puerto Rico government were current at June 30, 2016 and December 31, 2015. As part of a bank syndicate, on November 5, 2015 the Company entered into a Restructuring Support Agreement with a view towards restructuring a line of credit to the Puerto Rico Electric Power Authority ("PREPA") on terms that provide for full repayment of the debt to the Bank. In the third quarter of 2014, 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, which included a financial model to project the future liquidity status of PREPA under various scenarios and its capacity to service its financial obligations, and concluded that PREPA had sufficient cash flows for the repayment of the line of credit. Despite the Company’s analysis showing PREPA’s capacity to repay the line of credit, the Company classified the credit as doubtful, placed its participation in non-accrual and recorded a $24 million provision during the first quarter of 2015. During the fourth quarter of 2015, the Company recorded an additional $29.3 million provision for loan and lease losses on PREPA. Since it was placed in non-accrual, interest payments have been applied to principal.  At June 30, 2016 and December 31, 2015, the allowance for loan and lease losses to PREPA was $53.3 million.

20

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Acquired Loans

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

Acquired BBVAPR Loans

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

Credit cards, retail and commercial revolving lines of credits, floor plans and performing auto loans with FICO scores over 660 acquired at a premium, excluding the acquired Eurobank loan 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. Acquired BBVAPR loans that were accounted for under the provisions of ASC 310-20 are removed from the acquired loan category at the end of the reporting period upon refinancing, renewal or normal re-underwriting.

The following tables present the aging of the recorded investment in gross acquired BBVAPR loans accounted for under ASC 310-20 as of June 30, 2016 and December 31, 2015, by class of loans:

	June 30, 2016
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Retail	$	-	$	-	$	197	$	197	$	-	$	-	$	197	$	-
Floor plan		-		-		446		446		-		2,309		2,755		-
		-		-		643		643		-		2,309		2,952		-
Other commercial and industrial
Retail		37		17		120		174		-		1,426		1,600		-
Floor plan		-		-		7		7		-		-		7		-
		37		17		127		181		-		1,426		1,607		-
		37		17		770		824		-		3,735		4,559		-
Consumer
Credit cards		731		290		704		1,725		-		30,573		32,298		-
Personal loans		116		14		60		190		-		2,706		2,896		-
		847		304		764		1,915		-		33,279		35,194		-
Auto		5,088		2,196		562		7,846		-		69,272		77,118		-
Total	$	5,972	$	2,517	$	2,096	$	10,585	$	-	$	106,286	$	116,871	$	-

21

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2015
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Retail	$	-	$	-	$	228	$	228	$	-	$	-	$	228	$	-
Floor plan		-		-		467		467		-		2,422		2,889		-
		-		-		695		695		-		2,422		3,117		-
Other commercial and industrial
Retail		186		29		178		393		-		3,331		3,724		-
Floor plan		-		-		7		7		-		609		616		-
		186		29		185		400		-		3,940		4,340		-
		186		29		880		1,095		-		6,362		7,457		-
Consumer
Credit cards		930		384		489		1,803		-		33,414		35,217		-
Personal loans		14		29		46		89		-		3,079		3,168		-
		944		413		535		1,892		-		36,493		38,385		-
Auto		7,553		2,279		831		10,663		-		96,248		106,911		-
Total	$	8,683	$	2,721	$	2,246	$	13,650	$	-	$	139,103	$	152,753	$	-

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

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

The carrying amount corresponding to acquired BBVAPR loans with deteriorated credit quality, including those accounted under ASC 310-30 by analogy, in the statements of financial condition at June 30, 2016 and December 31, 2015 is as follows:

	June 30,		December 31,
	2016		2015
		(In thousands)
Contractual required payments receivable (a)	$	1,788,121	$	1,945,098
Less: Non-accretable discount		394,500		434,190
Cash expected to be collected		1,393,621		1,510,908
Less: Accretable yield		355,118		361,688
Carrying amount, gross		1,038,503		1,149,220
Less: allowance for loan and lease losses (b)		22,801		25,785
Carrying amount, net	$	1,015,702	$	1,123,435
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

At June 30, 2016 and December 31, 2015, the Company had $71.6 million and $80.9 million, respectively, in loans granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of its acquired BBVAPR loans accounted for under ASC 310-30.  This entire amount was current at June 30, 2016 and December 31, 2015

22

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

.The following tables describe the accretable yield and non-accretable discount activity of acquired BBVAPR loans accounted for under ASC 310-30 for the quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30, 2016
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	260,557	$	40,102	$	17,156	$	17,587	$	5,261	$	340,663
Accretion		(8,294)		(5,272)		(1,307)		(3,616)		(870)		(19,359)
Change in expected cash flows		-		3,062		(408)		630		(1)		3,283
Transfer from (to) non-accretable discount		31,560		(833)		(193)		(498)		495		30,531
Balance at end of period	$	283,823	$	37,059	$	15,248	$	14,103	$	4,885	$	355,118
Non-Accretable Discount Activity:
Balance at beginning of period	$	370,155	$	10,716	$	7,432	$	21,938	$	18,735	$	428,976
Change in actual and expected losses		(2,442)		(967)		(206)		(315)		(15)		(3,945)
Transfer (to) from accretable yield		(31,560)		833		193		498		(495)		(30,531)
Balance at end of period	$	336,153	$	10,582	$	7,419	$	22,121	$	18,225	$	394,500

	Six-Month Period Ended June 30, 2016
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	268,794	$	45,411	$	19,615	$	21,578	$	6,290	$	361,688
Accretion		(16,601)		(11,111)		(3,176)		(7,827)		(1,808)		(40,523)
Change in expected cash flows		-		3,190		(208)		631		(1)		3,612
Transfer from (to) non-accretable discount		31,630		(431)		(983)		(279)		404		30,341
Balance at end of period	$	283,823	$	37,059	$	15,248	$	14,103	$	4,885	$	355,118
Non-Accretable Discount Activity:
Balance at beginning of period	$	374,772	$	11,781	$	6,764	$	22,039	$	18,834	$	434,190
Change in actual and expected losses		(6,989)		(1,630)		(328)		(197)		(205)		(9,349)
Transfer (to) from accretable yield		(31,630)		431		983		279		(404)		(30,341)
Balance at end of period	$	336,153	$	10,582	$	7,419	$	22,121	$	18,225	$	394,500

23

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Quarter Ended June 30, 2015
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	284,612	$	57,330	$	19,390	$	47,097	$	5,601	$	414,030
Accretion		(8,813)		(9,597)		(2,143)		(6,163)		(1,287)		(28,003)
Change in actual and expected losses		-		23,695		9,867		-		-		33,562
Transfer from (to) non-accretable discount		81		135		(2,501)		(9,403)		4,147		(7,541)
Balance at end of period	$	275,880	$	71,563	$	24,613	$	31,531	$	8,461	$	412,048
Non-Accretable Discount Activity:
Balance at beginning of period	$	392,609	$	15,826	$	3,957	$	14,543	$	23,576	$	450,511
Change in actual and expected losses		(3,421)		(4,921)		536		(256)		(73)		(8,135)
Transfer (to) from accretable yield		(81)		(135)		2,501		9,403		(4,147)		7,541
Balance at end of period	$	389,107	$	10,770	$	6,994	$	23,690	$	19,356	$	449,917

	Six-Month Period Ended June 30, 2015
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	298,364	$	61,196	$	25,829	$	53,998	$	6,559	$	445,946
Accretion		(17,800)		(20,356)		(5,953)		(13,151)		(2,213)		(59,473)
Change in actual and expected losses		-		23,695		9,867		-		-		33,562
Transfer (to) from non-accretable discount		(4,684)		7,028		(5,130)		(9,316)		4,115		(7,987)
Balance at end of period	$	275,880		71,563		24,613		31,531		8,461		412,048
Non-Accretable Discount Activity:
Balance at beginning of period	$	389,839	$	23,069	$	3,486	$	16,215	$	24,018	$	456,627
Change in actual and expected losses		(5,416)		(5,271)		(1,622)		(1,841)		(547)		(14,697)
Transfer from (to) accretable yield		4,684		(7,028)		5,130		9,316		(4,115)		7,987
Balance at end of period	$	389,107	$	10,770	$	6,994	$	23,690	$	19,356	$	449,917

24

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Acquired Eurobank Loans

The carrying amount of acquired Eurobank loans at June 30, 2016 and December 31, 2015 is as follows:

		June 30		December 31
	2016		2015
	(In thousands)
Contractual required payments receivable (a)	$	252,801	$	342,511
Less: Non-accretable discount		11,555		21,156
Cash expected to be collected		241,246		321,355
Less: Accretable yield		79,682		84,391
Carrying amount, gross		161,564		236,964
Less: Allowance for loan and lease losses (b)		22,116		90,178
Carrying amount, net	$	139,448	$	146,786
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

The following tables describe the accretable yield and non-accretable discount activity of acquired Eurobank loans for the quarters and six-months periods ended June 30, 2016 and 2015:

	Quarter Ended June 30, 2016
	Loans Secured by 1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	50,787	$	33,203	$	2,237	$	-	$	-	$	86,227
Accretion		(2,263)		(4,528)		(33)		2		(76)		(6,898)
Change in expected cash flows		(198)		1,619		-		(77)		81		1,425
Transfer from (to) non-accretable discount		10		(1,152)		-		75		(5)		(1,072)
Balance at end of year	$	48,336	$	29,142	$	2,204	$	-	$	-	$	79,682
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,703	$	-	$	-	$	-	$	-	$	12,703
Change in actual and expected losses		(1,138)		(1,152)		-		75		(5)		(2,220)
Transfer from (to) accretable yield		(10)		1,152		-		(75)		5		1,072
Balance at end of period	$	11,555	$	-	$	-	$	-	$	-	$	11,555

25

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Six-Month Period Ended June 30, 2016
	Loans Secured by   1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	51,954	$	26,970	$	2,255	$	-	$	3,213	$	84,392
Accretion		(4,529)		(8,623)		(47)		2		(1,261)		(14,458)
Change in expected cash flows		786		12,712		(23)		(77)		(1,947)		11,451
Transfer from (to) non-accretable discount		125		(1,917)		19		75		(5)		(1,703)
Balance at end of period	$	48,336	$	29,142	$	2,204	$	-	$	-	$	79,682
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,869	$	-	$	-	$	-	$	8,287	$	21,156
Change in actual and expected losses		(1,189)		(1,917)		19		75		(8,292)		(11,304)
Transfer (to) from accretable yield		(125)		1,917		(19)		(75)		5		1,703
Balance at end of period	$	11,555	$	-	$	-	$	-	$	-	$	11,555

26

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Quarter Ended June 30, 2015
	Loans Secured by   1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	58,332	$	33,481	$	20,806	$	1,665	$	2,004	$	116,288
Accretion		(3,276)		(8,047)		(405)		(937)		(93)		(12,758)
Transfer from non-accretable discount		750		2,039		(2,052)		375		(1)		1,111
Balance at end of period	$	55,806	$	27,473	$	18,349	$	1,103	$	1,910	$	104,641
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,557	$	10,493	$	-	$	-	$	9,662	$	32,712
Change in actual and expected losses		(405)		(8,454)		(2,052)		375		67		(10,469)
Transfer to accretable yield		(750)		(2,039)		2,052		(375)		1		(1,111)
Balance at end of period	$	11,402	$	-	$	-	$	-	$	9,730	$	21,132

	Six-Month Period Ended June 30, 2015
	Loans Secured by   1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	47,636	$	37,919	$	20,753	$	2,479	$	1,072	$	109,859
Accretion		(6,794)		(17,902)		(1,024)		(2,329)		(213)		(28,262)
Transfer from (to) non-accretable discount		14,964		7,456		(1,380)		953		1,051		23,044
Balance at end of period	$	55,806	$	27,473	$	18,349	$	1,103	$	1,910	$	104,641
Non-Accretable Discount Activity:
Balance at beginning of period	$	27,348	$	24,464	$	-	$	-	$	10,598	$	62,410
Change in actual and expected cash flows		(982)		(17,008)		(1,380)		953		183		(18,234)
Transfer (to) from accretable yield		(14,964)		(7,456)		1,380		(953)		(1,051)		(23,044)
Balance at end of period	$	11,402	$	-	$	-	$	-	$	9,730	$	21,132

27

OFG BANCORP

NOTES TO 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 June 30, 2016 and December 31, 2015:

	June 30,		December 31,
	2016		2015
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year):
Up to the year 2002	$	2,812	$	3,786
Years 2003 and 2004		6,359		5,737
Year 2005		3,889		3,627
Year 2006		7,135		8,189
Years 2007, 2008 and 2009		11,292		14,625
Years 2010, 2011, 2012, 2013		9,311		10,588
Years 2014, 2015 and 2016		963		663
		41,761		47,215
Non-traditional		5,229		5,092
Loss mitigation program		18,769		20,172
		65,759		72,479
Home equity loans, secured personal loans		-		64
		65,759		72,543
Commercial
Commercial secured by real estate
Middle market		10,969		12,729
Retail		10,352		8,726
		21,321		21,455
Other commercial and industrial
Institutional		183,020		190,290
Middle market		1,421		1,565
Retail		1,966		1,932
Floor plan		40		39
		186,447		193,826
		207,768		215,281
Consumer
Credit cards		432		369
Personal lines of credit		94		100
Personal loans		1,812		1,146
Cash collateral personal loans		1		16
		2,339		1,631
Auto and leasing		7,337		8,418
Total non-accrual originated loans	$	283,203	$	297,873

28

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	June 30,		December 31,
	2016		2015
	(In thousands)
Acquired BBVAPR loans accounted for under ASC 310-20
Commercial
Commercial secured by real estate
Retail	$	197	$	228
Floor plan		446		467
		643		695
Other commercial and industrial
Retail		120		178
Floor plan		7		7
		127		185
		770		880
Consumer
Credit cards		704		489
Personal loans		60		46
		764		535
Auto		562		831
Total non-accrual acquired BBVAPR loans accounted for under ASC 310-20		2,096		2,246
Total non-accrual loans	$	285,299	$	300,119

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

Delinquent residential mortgage loans insured or guaranteed under applicable Federal Housing Administration ("FHA") and U.S. Department of Veterans Affairs ("VA") programs are classified as non-performing loans when they become 90 days or more past due, but are not placed in non-accrual status until they become 18 months or more past due, since they are insured loans. Therefore, these loans are included as non-performing loans but excluded from non-accrual loans.

During the first quarter of 2015, the revolving line of credit to PREPA was classified as non-accrual. At June 30, 2016, this line of credit had an unpaid principal balance of $183.0 million. Since the second quarter of 2015, interest payments have been applied to principal. As of June 30, 2016, the specific reserve for the PREPA line of credit is $53.3 million.

At June 30, 2016 and December 31, 2015, loans whose terms have been extended and which are classified as troubled-debt restructurings that are not included in non-accrual loans amounted to $97.2 million and $93.6 million, respectively, as they are performing under their new terms.

29

OFG BANCORP

NOTES TO 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 $219.4 million and $235.8 million at June 30, 2016 and December 31, 2015, respectively. Impaired commercial loans at June 30, 2016 and December 31, 2015 included the PREPA line of credit with an unpaid principal balance of $183.0 million and $190.3 million, respectively. 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 $56.8 million at June 30, 2016 and $55.9 million at December 31, 2015.  The valuation allowance for impaired commercial loans at June 30, 2016 and December 31, 2015 included $53.3 million of specific allowance for PREPA. The total investment in impaired mortgage loans was $90.9 million and $90.0 million at June 30, 2016 and December 31, 2015, 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 $8.9 million at June 30, 2016 and $9.2 million at December 31, 2015.

Originated and Other Loans and Leases Held for Investment

The Company’s recorded investment in commercial and mortgage loans categorized as originated and other loans and leases held for investment that were individually evaluated for impairment and the related allowance for loan and lease losses at June 30, 2016 and December 31, 2015 are as follows:

	June 30, 2016
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	212,876	$	194,084	$	56,758	29%
Residential impaired and troubled-debt restructuring		99,145		90,948		8,864	10%
Impaired loans with no specific allowance:
Commercial		30,228		23,876		-	0%
Total investment in impaired loans	$	342,249	$	308,908	$	65,622	21%

	December 31, 2015
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	210,718	$	199,366	$	55,947	28%
Residential impaired and troubled-debt restructuring		97,424		89,973		9,233	10%
Impaired loans with no specific allowance
Commercial		42,110		35,928		-	0%
Total investment in impaired loans	$	350,252	$	325,267	$	65,180	20%

30

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Acquired BBVAPR Loans

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

The Company’s recorded investment in acquired BBVAPR commercial loans accounted for under ASC 310-20 that were individually evaluated for impairment and the related allowance for loan and lease losses at June 30, 2016 and December 31, 2015 are as follows:

	June 30, 2016
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial	$	1,450	$	1,433	$	-	0%
Total investment in impaired loans	$	1,450	$	1,433	$	-	0%
	December 31, 2015
	Unpaid		Recorded		Specific
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial	$	486	$	474	$	-	0%
Total investment in impaired loans	$	486	$	474	$	-	0%

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

The Company’s recorded investment in acquired BBVAPR loan pools accounted for under ASC 310-30 that have recorded impairments and their related allowance for loan and lease losses at June 30, 2016 and December 31, 2015 are as follows:

	June 30, 2016
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance: (a)(b)
Mortgage	$	591,029	$	591,056	$	1,585	0%
Commercial		246,142		173,949		11,884	7%
Construction		76,677		56,457		3,979	7%
Auto		117,038		117,043		5,353	5%
Total investment in impaired loan pools	$	1,030,886	$	938,505	$	22,801	2%
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

31

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31 , 2015
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance:
Mortgage	$	608,294	$	608,294	$	1,761	0%
Commercial		287,311		168,107		15,455	9%
Construction		88,180		87,983		5,707	6%
Auto		153,592		153,592		2,862	2%
Total investment in impaired loan pools	$	1,137,377	$	1,017,976	$	25,785	3%

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

Acquired Eurobank Loans

The Company’s recorded investment in acquired Eurobank loan pools that have recorded impairments and their related allowance for loan and lease losses as of June 30, 2016 and December 31, 2015 are as follows:

	June 30, 2016
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance: (a)(b)
Loans secured by 1-4 family residential properties	$	95,755	$	76,777	$	11,016	14%
Commercial and construction		114,932		83,377		11,096	13%
Consumer		1,252		1,410		4	0%
Total investment in impaired loan pools	$	211,939	$	161,564	$	22,116	14%
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

	December 31, 2015
							Coverage
	Unpaid		Recorded		Specific		to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance
Loans secured by 1-4 family residential properties	$	101,444	$	92,273	$	22,570	24%
Commercial and construction		133,148		142,377		67,365	47%
Consumer		6,713		2,314		243	11%
Total investment in impaired loan pools	$	241,305	$	236,964	$	90,178	38%

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

32

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents the interest recognized in commercial and mortgage loans that were individually evaluated for impairment, excluding loans accounted for under ASC 310-30 for the quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30,
	2016				2015
	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
	(In thousands)
Originated and other loans held for investment:
Impaired loans with specific allowance
Commercial	$	75	$	194,759	$	45	$	212,414
Residential troubled-debt restructuring		791		91,007		781		89,041
Impaired loans with no specific allowance
Commercial		149		29,579		316		30,015
		1,015		315,345		1,142		331,470
Acquired loans accounted for under ASC 310-20:
Impaired loans with no specific allowance
Commercial		15		789		11		1,446
Total interest income from impaired loans	$	1,030	$	316,134	$	1,153	$	332,916

	Six-Month Period Ended June 30,
	2016					2015
	Interest Income Recognized		Average Recorded Investment			Interest Income Recognized		Average Recorded Investment
	(In thousands)
Originated and other loans held for investment:
Impaired loans with specific allowance
Commercial	$	150	$	195,777	$	90	$	146,144
Residential troubled-debt restructuring		1,591		90,650		1,563		91,216
Impaired loans with no specific allowance
Commercial		298		31,603		631		95,791
Total interest income from impaired loans	$	2,039	$	318,030	$	2,284	$	333,151
Aquired loans accounted for under SC 310-20:
Impaired loans with no specific allowance
Commercial		30		628		21		1,923
Total interest income from impaired loans	$	2,069	$	318,658	$	2,305	$	335,074

33

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Modifications

The following tables present the troubled-debt restructurings during the quarters and six-month periods ended June 30, 2016 and 2015.

	Quarter Ended June 30, 2016
	Number of contracts	Pre-Modification Outstanding Recorded Investment		Pre-Modification Weighted Average Rate	Pre-Modification Weighted Average Term (in Months)	Post-Modification Outstanding Recorded Investment		Post-Modification Weighted Average Rate	Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	19	$	2,670	5.69%	372	$	2,670	4.54%	494
Commercial	6		668	6.65%	65		668	5.91%	86
Consumer	26		364	12.73%	75		372	10.20%	70
	Six-Month Period Ended June 30, 2016
	Number of contracts	Pre-Modification Outstanding Recorded Investment		Pre-Modification Weighted Average Rate	Pre-Modification Weighted Average Term (in Months)	Post-Modification Outstanding Recorded Investment		Post-Modification Weighted Average Rate	Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	52	$	6,628	5.90%	365	$	7,525	4.73%	493
Commercial	8		1,323	6.73%	53		1,324	6.31%	61
Consumer	47		556	13.27%	75		603	10.56%	71

	Quarter Ended June 30, 2015
	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	39	$	4,455	5.62%	330	$	4,455	4.21%	330
Commercial	1		29	7.25%	44		29	6.50%	60
Consumer	21		250	14.40%	71		259	13.87%	69
Auto	1		64	12.95%	72		65	12.95%	72
	Six-Month Period Ended June 30, 2015
	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	97	$	11,609	4.65%	348	$	11,594	4.13%	349
Commercial	4		4,533	6.83%	80		4,533	7.00%	141
Consumer	32		396	14.50%	72		440	14.25%	68
Auto	1		64	12.95%	72		65	12.95%	72

34

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents troubled-debt restructurings for which there was a payment default during the twelve-month periods ended June 30, 2016 and 2015:

	Twelve-Month Period Ended June 30,
	2016			2015
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(Dollars in thousands)
Mortgage	84	$	9,869	60	$	6,911
Consumer	7	$	134	4	$	72
Auto	1	$	17	-	$	-

Credit Quality Indicators

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

The Company uses the following definitions for risk ratings:

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

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

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

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

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

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

35

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of June 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of gross originated and other loans and BBVAPR acquired loans accounted for under ASC 310-20 subject to risk rating by class of loans is as follows:

	June 30, 2016
	Risk Ratings
											Individually
	Balance				Special						Measured for
	Outstanding		Pass		Mention		Substandard		Doubtful		Impairment
	(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate	$	230,296	$	215,312	$	14,984	$	-	$	-	$	-
Institutional		27,838		26,200		-		-		-		1,638
Middle market		220,096		188,700		17,697		374		-		13,325
Retail		246,691		222,814		7,468		4,128		-		12,281
Floor plan		2,826		2,826		-		-		-		-
Real estate		16,079		16,079		-		-		-		-
		743,826		671,931		40,149		4,502		-		27,244
Other commercial and industrial:
Corporate		140,192		140,192		-		-		-		-
Institutional		376,278		193,258		-		-		-		183,020
Middle market		105,540		95,946		5,142		181		-		4,271
Retail		76,965		71,933		898		979		-		3,155
Floor plan		33,812		28,046		5,415		81		-		270
		732,787		529,375		11,455		1,241		-		190,716
Total		1,476,613		1,201,306		51,604		5,743		-		217,960
Commercial - acquired loans       (under ASC 310-20)
Commercial secured by real estate:
Retail		197		-		-		197		-		-
Floor plan		2,755		953		376		-		-		1,426
		2,952		953		376		197		-		1,426
Other commercial and industrial:
Retail		1,600		1,527		-		73		-		-
Floor plan		7		-		-		-		-		7
		1,607		1,527		-		73		-		7
Total		4,559		2,480		376		270		-		1,433
Total	$	1,481,172	$	1,203,786	$	51,980	$	6,013	$	-	$	219,393

36

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2015
	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	$	227,557	$	212,410	$	15,147	$	-	$	-	$	-
Institutional		33,807		25,907		-		-		-		7,900
Middle market		206,948		181,916		9,697		-		-		15,335
Retail		241,090		217,836		7,936		5,097		-		10,221
Floor plan		2,892		2,892		-		-		-		-
Real estate		16,662		16,662		-		-		-		-
		728,956		657,623		32,780		5,097		-		33,456
Other commercial and industrial:
Corporate		108,582		100,826		-		-		-		7,756
Institutional		380,985		190,695		-		-		-		190,290
Middle market		107,313		97,288		8,052		-		-		1,973
Retail		77,797		73,757		1,076		1,184		-		1,780
Floor plan		38,016		35,862		2,115		-		-		39
		712,693		498,428		11,243		1,184		-		201,838
Total		1,441,649		1,156,051		44,023		6,281		-		235,294
Commercial - acquired loans       (under ASC 310-20)
Commercial secured by real estate:
Retail		228		-		-		228		-		-
Floor plan		2,889		602		1,820		-		-		467
		3,117		602		1,820		228		-		467
Other commercial and industrial:
Retail		3,724		3,637		-		87		-		-
Floor plan		616		609		-		-		-		7
		4,340		4,246		-		87		-		7
Total		7,457		4,848		1,820		315		-		474
Total	$	1,449,106	$	1,160,899	$	45,843	$	6,596	$	-	$	235,768

37

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At June 30, 2016 and December 31, 2015, the Company had outstanding credit facilities of approximately $398.6 million and $415.4 million, respectively, granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities, included within the portfolios of originated and other loans and acquired BBVAPR loans accounted for under ASC 310-30. A substantial portion of the Company’s credit exposure to Puerto Rico’s government consists of collateralized loans or obligations that have a specific source of income or revenues identified for their repayment. Approximately $204 million of these loans are general obligations of municipalities secured by ad valorem taxation, without limitation as to rate or amount, on all taxable property within the issuing municipalities.  The good faith, credit and unlimited taxing power of each issuing municipality are pledged for the payment of its general obligations. 

At June 30, 2016, we had approximately $194.4 million of credit facilities to central government and public corporations of the Commonwealth, including:

·PREPA with an outstanding balance of $183.0 million; and

·The Puerto Rico Housing Finance Authority ("PRHFA") with an outstanding balance of $11.0 million to be repaid from abandoned or unclaimed funds at financial institutions that revert to the government under a Puerto Rico escheat law.

The outstanding balance of credit facilities to central government and public corporations decreased by $10.0 million during the first quarter of 2016 as a result of a partial repayment by PRHFA.

Oriental Bank is part of a four bank syndicate that provided a $550 million revolving line of credit to finance the purchase of fuel for PREPA’s day-to-day power generation activities. Our participation in the line of credit has an unpaid principal balance of $183.0 million as of June 30, 2016. As part of the bank syndicate, the Bank entered into a Restructuring Support Agreement on November 5, 2015 with PREPA and certain other creditors. The Restructuring Support Agreement provides for the restructuring of the fuel line of credit subject to the accomplishment of several milestones, including some milestones that depend on the actions of third parties to the agreement, such as the negotiation of agreements with other creditors and legislative action. The Company expects the restructuring to be completed by the end of 2016. The Company conducted an impairment analysis considering the probability of collection of principal and interest, which included a financial model to project the future liquidity status of PREPA under various scenarios and its capacity to service its financial obligations, and concluded that PREPA had sufficient cash flows for the repayment of the line of credit. Despite the Company’s analysis showing PREPA’s capacity to repay the line of credit, the Company classifies this participation in the substandard risk category and non-accrual and has a $53.3 million allowance for loan and lease losses recorded for this line of credit. Since April 1, 2015, interest payments have been applied to principal.

38

OFG BANCORP

NOTES TO 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 June 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of gross originated and other loans and acquired BBVAPR loans accounted for under ASC 310-20 not subject to risk rating by class of loans is as follows:

	June 30, 2016
	Delinquency
															Individually
	Balance														Measured for
	Outstanding		0-29 days		30-59 days		60-89 days		90-119 days		120-364 days		365+ days		Impairment
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional         (by origination year)
Up to the year 2002	$	54,058	$	48,163	$	259	$	2,023	$	527	$	1,153	$	1,292	$	641
Years 2003 and 2004		94,753		82,651		343		3,936		1,864		1,859		2,312		1,788
Year 2005		52,061		45,538		-		1,878		497		918		2,410		820
Year 2006		73,886		60,860		511		2,244		554		1,603		4,584		3,530
Years 2007, 2008             and 2009		84,018		66,997		703		1,286		569		1,724		8,898		3,841
Years 2010, 2011, 2012             2013		144,751		132,451		407		1,203		182		1,581		5,132		3,795
Years 2014, 2015 and 2016		99,361		98,270		-		189		140		398		364		-
		602,888		534,930		2,223		12,759		4,333		9,236		24,992		14,415
Non-traditional		26,195		20,040		-		938		564		1,999		2,654		-
Loss mitigation program		104,081		18,865		1,692		1,381		940		1,306		3,364		76,533
		733,164		573,835		3,915		15,078		5,837		12,541		31,010		90,948
Home equity secured         personal loans		384		384		-		-		-		-		-		-
GNMA's buy-back         option program		8,369		-		-		-		1,498		3,228		3,643		-
		741,917		574,219		3,915		15,078		7,335		15,769		34,653		90,948
Consumer
Credit cards		24,877		23,809		459		177		214		218		-		-
Overdrafts		220		204		15		1		-		-		-		-
Unsecured personal lines of credit		2,431		2,281		42		14		11		83		-		-
Unsecured personal loans		221,648		217,759		1,854		1,137		898		-		-		-
Cash collateral personal loans		16,093		16,026		63		3		-		1		-		-
		265,269		260,079		2,433		1,332		1,123		302		-		-
Auto and Leasing		712,268		641,075		44,433		19,438		5,492		1,830		-		-
		1,719,454		1,475,373		50,781		35,848		13,950		17,901		34,653		90,948
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		32,298		30,573		731		290		290		414		-		-
Personal loans		2,896		2,707		116		14		26		33		-		-
		35,194		33,280		847		304		316		447		-		-
Auto		77,118		69,272		5,088		2,196		412		150		-		-
		112,312		102,552		5,935		2,500		728		597		-		-
Total	$	1,831,766	$	1,577,925	$	56,716	$	38,348	$	14,678	$	18,498	$	34,653	$	90,948

39

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	December 31, 2015
	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	$	57,789	$	50,912	$	82	$	2,218	$	530	$	1,504	$	1,858	$	685
Years 2003 and 2004		99,446		87,060		251		4,867		1,261		1,353		2,921		1,733
Year 2005		54,221		47,197		79		2,553		292		1,068		2,189		843
Year 2006		78,403		63,659		318		2,878		1,168		1,895		4,871		3,614
Years 2007, 2008             and 2009		91,546		71,439		170		1,665		685		2,972		10,725		3,890
Years 2010, 2011, 2012             2013		150,744		134,945		569		1,611		434		1,982		6,737		4,466
Year 2014 and 2015		85,856		85,128		-		65		148		281		234		-
		618,005		540,340		1,469		15,857		4,518		11,055		29,535		15,231
Non-traditional		29,552		23,497		-		977		552		2,621		1,905		-
Loss mitigation program		101,916		16,031		4,173		1,977		727		1,728		2,538		74,742
		749,473		579,868		5,642		18,811		5,797		15,404		33,978		89,973
Home equity secured         personal loans		410		346		-		-		-		64		-		-
GNMA's buy-back         option program		7,945		-		-		-		1,593		3,578		2,774		-
		757,828		580,214		5,642		18,811		7,390		19,046		36,752		89,973
Consumer
Credit cards		22,766		21,766		449		182		179		190		-		-
Overdrafts		190		166		24		-		-		-		-		-
Unsecured personal lines of credit		2,244		2,125		74		-		17		28		-		-
Unsecured personal loans		201,156		197,339		2,083		1,107		621		6		-		-
Cash collateral personal loans		16,594		16,450		125		17		2		-		-		-
		242,950		237,846		2,755		1,306		819		224		-		-
Auto and Leasing		669,163		590,482		53,549		16,839		5,708		2,585		-		-
		1,669,941		1,408,542		61,946		36,956		13,917		21,855		36,752		89,973
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		35,217		33,414		930		384		186		303		-		-
Personal loans		3,168		3,079		14		29		1		45		-		-
		38,385		36,493		944		413		187		348		-		-
Auto		106,911		96,247		7,553		2,279		623		209		-		-
		145,296		132,740		8,497		2,692		810		557		-		-
Total	$	1,815,237	$	1,541,282	$	70,443	$	39,648	$	14,727	$	22,412	$	36,752	$	89,973

40

OFG BANCORP

NOTES TO 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 June 30, 2016 and December 31, 2015 was as follows:

	June 30,		December 31,
	2016		2015
	(In thousands)
Allowance for loans and lease losses on non-acquired loans:
Originated and other loans and leases held for investment:
Mortgage	$	18,537	$	18,352
Commercial		63,144		64,791
Consumer		11,771		11,197
Auto and leasing		19,259		18,261
Unallocated		101		25
Total allowance for originated and other loans and lease losses		112,812		112,626
Acquired loans:
Acquired BBVAPR loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		21		26
Consumer		3,002		3,429
Auto		1,464		2,087
		4,487		5,542
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy) (a)
Mortgage		1,585		1,762
Commercial		15,863		21,161
Auto		5,353		2,862
		22,801		25,785
Total allowance for acquired BBVAPR loans and lease losses		27,288		31,327
Acquired Eurobank loans: (a)
Loans secured by 1-4 family residential properties		11,016		22,570
Commercial and other construction		11,096		67,365
Consumer		4		243
Total allowance for acquired Eurobank loan and lease losses (a)		22,116		90,178
Total allowance for loan and lease losses (a)	$	162,216	$	234,131
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these 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.

Effective June 30, 2016, pursuant to supervisory direction, the Company revised its purchase credit impaired policy for all loans accounted for under ASC 310-30. Under the revised policy, the Company writes-off the loan’s recorded investment and derecognizes the associated allowance for loan and lease losses for loans that exit the pools. The revised policy will be implemented prospectively due to the immaterial impact of retrospective adoption. Prior to June 30, 2016, the pool’s carrying value and allowance was determined by discounting expected cash flows at the pool’s effective yield. The allowance for loan and lease losses was maintained until all of the loans in the pool were paid off or charged-off.  The transition to this revised policy on June 30, 2016 resulted in the de-

41

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

recognition of $8.5 million and $72.2 million in the recorded investment balance and associated allowance for loans that had exited the pools for acquired BBVAPR loans and acquired Eurobank loans, respectively, with no impact to the provision for loan and lease losses.

Allowance for Originated and Other Loan and Lease Losses Held for Investment

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

	Quarter Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for originated and other loans:
Balance at beginning of period	$	18,784	$	64,206	$	11,414	$	18,716	$	118	$	113,238
Charge-offs		(1,374)		(833)		(2,811)		(8,100)		-		(13,118)
Recoveries		36		228		133		3,243		-		3,640
Provision (recapture) for originated and              other loans and lease losses		1,091		(457)		3,035		5,400		(17)		9,052
Balance at end of period	$	18,537	$	63,144	$	11,771	$	19,259	$	101	$	112,812

	Six-Month Period Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for originated and other loans:
Balance at beginning of period	$	18,352	$	64,791	$	11,197	$	18,261	$	25	$	112,626
Charge-offs		(3,036)		(1,844)		(5,138)		(16,462)		-		(26,480)
Recoveries		181		316		235		6,222		-		6,954
Provision (recapture) for loan and lease losses		3,040		(119)		5,477		11,238		76		19,712
Balance at end of period	$	18,537	$	63,144	$	11,771	$	19,259	$	101	$	112,812

	June 30, 2016
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on originated and other loans:
Ending allowance balance attributable       to loans:
Individually evaluated for impairment	$	8,864	$	56,758	$	-	$	-	$	-	$	65,622
Collectively evaluated for impairment		9,673		6,386		11,771		19,259		101		47,190
Total ending allowance balance	$	18,537	$	63,144	$	11,771	$	19,259	$	101	$	112,812
Loans:
Individually evaluated for impairment	$	90,948	$	217,960	$	-	$	-	$	-	$	308,908
Collectively evaluated for impairment		650,969		1,258,653		265,269		712,268		-		2,887,159
Total ending loan balance	$	741,917	$	1,476,613	$	265,269	$	712,268	$	-	$	3,196,067

42

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Quarter Ended June 30, 2015
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for originated and other loans:
Balance at beginning of period	$	18,086	$	33,123	$	9,405	$	15,762	$	383	$	76,759
Charge-offs		(1,356)		(497)		(2,309)		(7,662)		-		(11,824)
Recoveries		67		219		390		3,425		-		4,101
Provision for originated and             other loans and lease losses		1,279		1,934		2,978		3,539		223		9,953
Balance at end of period	$	18,076	$	34,779	$	10,464	$	15,064	$	606	$	78,989

	Six-Month Period Ended June 30, 2015
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for originated and other loans:
Balance at beginning of year	$	19,679	$	8,432	$	9,072	$	14,255	$	1	$	51,439
Charge-offs		(2,770)		(1,489)		(3,985)		(15,798)		-		(24,042)
Recoveries		67		309		543		6,809		-		7,728
Provision for loan and lease losses		1,100		27,527		4,834		9,798		605		43,864
Balance at end of year	$	18,076	$	34,779	$	10,464	$	15,064	$	606	$	78,989

	December 31, 2015
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on originated and other loans:
Ending allowance balance attributable       to loans:
Individually evaluated for impairment	$	9,233	$	55,947	$	-	$	-	$	-	$	65,180
Collectively evaluated for impairment		9,119		8,844		11,197		18,261		25		47,446
Total ending allowance balance	$	18,352	$	64,791	$	11,197	$	18,261	$	25	$	112,626
Loans:
Individually evaluated for impairment	$	89,973	$	235,294	$	-	$	-	$	-	$	325,267
Collectively evaluated for impairment		667,855		1,206,355		242,950		669,163		-		2,786,323
Total ending loan balance	$	757,828	$	1,441,649	$	242,950	$	669,163	$	-	$	3,111,590

43

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Allowance for BBVAPR Acquired Loan Losses

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

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

	Quarter Ended June 30, 2016
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses     for acquired BBVAPR loans      accounted for under ASC 310-20:
Balance at beginning of period	$	23	$	3,243	$	1,727	$	-	$	4,993
Charge-offs		(12)		(1,013)		(571)		-		(1,596)
Recoveries		8		88		446		-		542
Provision (recapture) for acquired BBVAPR           loan and lease losses accounted for           under ASC 310-20		2		684		(138)		-		548
Balance at end of period	$	21	$	3,002	$	1,464	$	-	$	4,487

	Six-Month Period Ended June 30, 2016
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses     for acquired BBVAPR loans      accounted for under ASC 310-20:
Balance at beginning of year	$	26	$	3,429	$	2,087	$	-	$	5,542
Charge-offs		(19)		(1,825)		(1,308)		-		(3,152)
Recoveries		40		169		1,044		-		1,253
Provision (recapture) for acquired BBVAPR           loan and lease losses accounted for           under ASC 310-20		(26)		1,229		(359)		-		844
Balance at end of year	$	21	$	3,002	$	1,464	$	-	$	4,487

	June 30, 2016
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses   for acquired BBVAPR loans    accounted for under ASC 310-20:
Ending allowance balance attributable       to loans:
Collectively evaluated for impairment	$	21	$	3,002	$	1,464	$	-	$	4,487
Total ending allowance balance	$	21	$	3,002	$	1,464	$	-	$	4,487
Loans:
Individually evaluated for impairment	$	1,433	$	-	$	-	$	-	$	1,433
Collectively evaluated for impairment		3,126		35,194		77,118		-		115,438
Total ending loan balance	$	4,559	$	35,194	$	77,118	$	-	$	116,871

44

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Quarter Ended June 30, 2015
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses     for acquired BBVAPR loans      accounted for under ASC 310-20:
Balance at beginning of period	$	49	$	1,885	$	3,516	$	-	$	5,450
Charge-offs		(16)		(1,303)		(1,038)		-		(2,357)
Recoveries		7		429		502		-		938
Provision (recapture) for acquired             loan and lease losses accounted for             under ASC 310-20		14		1,605		(121)		-		1,498
Balance at end of period	$	54	$	2,616	$	2,859	$	-	$	5,529

	Six-Month Period Ended June 30, 2015
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses     for acquired BBVAPR loans      accounted for under ASC 310-20:
Balance at beginning of year	$	65	$	1,211	$	3,321	$	-	$	4,597
Charge-offs		(16)		(2,686)		(2,304)		-		(5,006)
Recoveries		17		563		1,072		-		1,652
Provision (recapture) for acquired             loan and lease losses accounted for             under ASC 310-20		(12)		3,528		770		-		4,286
Balance at end of period	$	54	$	2,616	$	2,859	$	-	$	5,529

	December 31, 2015
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses     for acquired BBVAPR loans      accounted for under ASC 310-20:
Ending allowance balance attributable       to loans:
Collectively evaluated for impairment	$	26	$	3,429	$	2,087	$	-	$	5,542
Total ending allowance balance	$	26	$	3,429	$	2,087	$	-	$	5,542
Loans:
Individually evaluated for impairment	$	474	$	-	$	-	$	-	$	474
Collectively evaluated for impairment		6,983		38,385		106,911		-		152,279
Total ending loan balance	$	7,457	$	38,385	$	106,911	$	-	$	152,753

45

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

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

	Quarter Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30:
Balance at beginning of period	$	1,762	$	20,430	$	-	$	5,555	$	27,747
(Recapture) provision for BBVAPR loans and             lease losses accounted for             under ASC 310-30		(163)		3,977		-		-		3,814
Loan pools fully charged-off		(14)		-		-		(202)		(216)
Allowance de-recognition (a)		-		(8,544)		-		-		(8,544)
Balance at end of period	$	1,585	$	15,863	$	-	$	5,353	$	22,801
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.
	Six-Month Period Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30:
Balance at beginning of period	$	1,678	$	21,245	$	-	$	2,862	$	25,785
(Recapture) provision for BBVAPR loans             and lease losses accounted for             under ASC 310-30		(79)		3,228		-		2,693		5,842
Loan pools fully charged-off		(14)		(66)		-		(202)		(282)
Allowance de-recognition (a)		-		(8,544)		-		-		(8,544)
Balance at end of period	$	1,585	$	15,863	$	-	$	5,353	$	22,801
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

46

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Quarter Ended June 30, 2015
	Mortgage		Commercial		Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30:
Balance at beginning of period	$	473	$	13,687	$	6	$	-	$	14,166
Provision for acquired BBVAPR loans and lease losses accounted for under ASC 310-30		-		1,253		78		2,862		4,193
Balance at end of period	$	473	$	14,940	$	84	$	2,862	$	18,359
	Six-Month Period Ended June 30, 2015
	Mortgage		Commercial		Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30:
Balance at beginning of period	$	-	$	13,476	$	5	$	-	$	13,481
Provision for acquired BBVAPR loans and lease losses accounted for under ASC 310-30		473		1,464		79		2,862		4,878
Balance at end of period	$	473	$	14,940	$	84	$	2,862	$	18,359

47

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Allowance for Acquired Eurobank Loan Losses

For loans accounted for under ASC 310-30, as part of the evaluation of actual versus expected cash flows, the Company assesses on a quarterly basis the credit quality of these loans based on delinquency, severity factors and risk ratings, among other assumptions.  Migration and credit quality trends are assessed at the pool level, by comparing information from the latest evaluation period through the end of the reporting period.

The changes in the allowance for loan and lease losses on acquired Eurobank loans for the quarters and six-month periods ended June 30, 2016 and 2015 were as follows:

	Quarter Ended June 30, 2016
	Loans Secured by   1-4 Family Residential Properties		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for acquired Eurobank loans:
Balance at beginning of period	$	23,961	$	68,089	$	243	$	-	$	92,293
Provision (recapture) for acquired Eurobank loans and             lease losses, net		237		801		(7)		-		1,031
FDIC shared-loss portion of provision for covered             loan and lease losses, net		951		-		-		-		951
Allowance de-recognition (a)		(14,133)		(57,794)		(232)		-		(72,159)
Balance at end of period	$	11,016	$	11,096	$	4	$	-	$	22,116
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.
	Six-Month Period Ended June 30, 2016
	Loans Secured by   1-4 Family Residential Properties		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for acquired Eurobank loans:
Balance at beginning of period	$	22,570	$	67,365	$	243	$	-	$	90,178
Provision (recapture) for acquired Eurobank loans and             lease losses, net		184		1,659		(7)		-		1,836
FDIC shared-loss portion of provision for covered             loan and lease losses, net		2,395		-		-		-		2,395
Loan pools fully charged-off		-		(134)		-		-		(134)
Allowance de-recognition (a)		(14,133)		(57,794)		(232)		-		(72,159)
Balance at end of year	$	11,016	$	11,096	$	4	$	-	$	22,116
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

48

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Quarter Ended June 30, 2015
	Mortgage		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for acquired Eurobank loans:
Balance at beginning of period	$	17,340	$	52,922	$	389	$	-	$	70,651
Provision (recapture) for Eurobank loans and lease losses, net		148		(253)		-		-		(105)
FDIC shared-loss portion of provision for covered             loan and lease losses, net		105		801		-		-		906
Balance at end of period	$	17,593	$	53,470	$	389	$	-	$	71,452
	Six-Month Period Ended June 30, 2015
	Mortgage		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for Eurobank loans:
Balance at beginning of year	$	15,522	$	48,334	$	389	$	-	$	64,245
Provision for Eurobank loans and lease losses, net		1,966		2,738		-		-		4,704
FDIC shared-loss portion of provision for covered             loan and lease losses, net		105		2,398		-		-		2,503
Balance at end of year	$	17,593	$	53,470	$	389	$	-	$	71,452

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

The FDIC loss sharing obligation, related to commercial and other-non single family acquired Eurobank loans expired on June 30, 2015. The coverage for the single family residential loans will expire on June 30, 2020. The remaining covered loans are included as part of acquired Eurobank loans under the name "loans secured by 1-4 family residential properties." At June 30, 2016 and December 31, 2015, allowance for loan losses on loans covered by the FDIC shared-loss agreement amounted to $11.0 million and $22.6 million, respectively. The provision for covered loan and lease losses for the quarters ended June 30, 2016 and 2015 was $237 thousand and a recapture of $105 thousand, respectively.  The provision for covered loan and lease losses for the six-month periods ended June 30, 2016 and 2015 was $184 thousand and $4.7 million, respectively.

49

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 6- FDIC INDEMNIFICATION ASSET, TRUE-UP PAYMENT OBLIGATION, AND FDIC SHARED-LOSS EXPENSE

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 end of the quarter of the acquisition. The coverage under the commercial shared-loss agreement expired on June 30, 2015. 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 six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
FDIC indemnification asset:
Balance at beginning of period	$	20,923	$	75,221	$	22,599	$	97,378
Shared-loss agreements reimbursements from the FDIC		(332)		(24,387)		(737)		(38,087)
Increase in expected credit losses to be       covered under shared-loss agreements, net		951		906		2,395		2,503
FDIC indemnification asset expense		(1,405)		(22,512)		(4,269)		(34,733)
Incurred expenses to be reimbursed under shared-loss agreements		(1,711)		(6,524)		(1,562)		(4,357)
Balance at end of period	$	18,426	$	22,704	$	18,426	$	22,704
True-up payment obligation:
Balance at beginning of period	$	25,235	$	22,844	$	24,658	$	21,981
Change in true-up payment obligation		537		733		1,114		1,596
Balance at end of period	$	25,772	$	23,577	$	25,772	$	23,577

The FDIC shared-loss expense bears an inverse relationship with a change in the yield of covered loan 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 account.

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.

50

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The FDIC loss-share coverage for the commercial loans was in effect until June 30, 2015. Accordingly, the Company amortized the remaining portion of the FDIC indemnification asset attributable to non-single family loans at the close of the second quarter of 2015. At June 30, 2016 and December 31, 2015, the FDIC indemnification asset reflects only the balance for single family residential mortgage loans.

The Company has owed payments to the FDIC for the recovery of prior claims for commercial loans. At June 30, 2016, the liability for these payments amounted to $1.1 million and is recorded in other liabilities in the consolidated statements of financial condition until cash is paid to the FDIC. There was no liability at June 30, 2015. 

The FDIC indemnification asset expense decreased to $1.4 million for the quarter ended June 30, 2016 when compared to $22.5 million for the same period in 2015. The expense of $4.3 million for the six-month period ended June 30, 2016 represented a decrease of $30.5 million when compared to $34.7 million for the same period in 2015.  The decrease during the period was principally driven by the expiration of the FDIC loss-share coverage for commercial loans and other non-single family residential loans. 

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 estimated liability is included within accrued expenses and other liabilities in the unaudited consolidated statements of financial condition.

This true-up payment obligation may increase if actual and expected losses decline. The Company measures the true-up payment obligation at fair value. The changes in fair value are included as a change in true-up payment obligation within the 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 June 30, 2016 and December 31, 2015:

		June 30,		December 31,
	2016		2015
	(In thousands)
Carrying amount (fair value)	$	25,772	$	24,658
Undiscounted amount	$	33,782	$	34,956

In connection with the FDIC-assisted acquisition, the Company recognized an FDIC shared-loss expense, net, in the unaudited consolidated statements of operations, which consists of the following for the quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
FDIC indemnification asset expense	$	1,405	$	22,512	$	4,269	$	34,733
Change in true-up payment obligation		537		733		1,114		1,596
Reimbursement to FDIC for recoveries		1,478		-		2,066		-
Total FDIC shared-loss expense, net	$	3,420	$	23,245	$	7,449	$	36,329

NOTE 7 — DERIVATIVES

51

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents the Company’s derivative assets and liabilities at June 30, 2016 and December 31, 2015:

	June 30,		December 31,
	2016		2015
	(In thousands)
Derivative assets:
Options tied to S&P 500 Index	$	187	$	1,170
Interest rate swaps not designated as hedges		1,703		1,819
Interest rate caps		36		32
Other		-		4
	$	1,926	$	3,025
Derivative liabilities:
Interest rate swaps designated as cash flow hedges	$	3,656	$	4,307
Interest rate swaps not designated as hedges		1,703		1,819
Interest rate caps		36		32
Other		18		4
	$	5,413	$	6,162

52

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 the cash flow hedges is recognized in other comprehensive income (loss) and is subsequently reclassified into operations 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 (loss) related to these interest rate swaps to operations in the next twelve months.

The following table shows a summary of these swaps and their terms at June 30, 2016:

	Notional		Fixed	Variable	Trade	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date	Date
	(In thousands)
Interest Rate Swaps	$	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
		37,290	2.4210%	1-Month LIBOR	07/03/13	07/03/13	08/01/23
	$	237,290

An accumulated unrealized loss of $3.7 million and $4.3 million was recognized in accumulated other comprehensive income related to the valuation of these swaps at June 30, 2016 and December 31, 2015, respectively, and the related liability is being reflected in the accompanying unaudited consolidated statements of financial condition.

At June 30, 2016 and December 31, 2015, interest rate swaps not designated as hedging instruments that were offered to clients represented an asset of $1.7 million and $1.8 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 June 30, 2016 and December 31, 2015, interest rate swaps not designated as hedging instruments that are the mirror-images of the derivatives offered to clients represented a liability of $1.7 million and $1.8 million, respectively, and were included as part of derivative liabilities in the unaudited consolidated statements of financial condition.

53

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table shows a summary of these interest rate swaps not designated as hedging instruments and their terms at June 30, 2016:

	Notional		Fixed	Variable	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date
	(In thousands)
Interest Rate Swaps - Derivatives Offered to Clients	$	3,682	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,182
Interest Rate Swaps - Mirror Image Derivatives	$	3,682	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,182

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 June 30, 2016 and December 31, 2015, the purchased options used to manage exposure to the S&P 500 Index on stock indexed deposits represented an asset of $187 thousand (notional amount of $425 thousand) and $1.2 million (notional amount of $3.4 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 $181 thousand (notional amount of $411 thousand) and $1.1 million (notional amount of $3.2 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. As of June 30, 2016 and December 31, 2015, the outstanding total notional amount of interest rate caps was $124.5 million and $109.8 million, respectively. At June 30, 2016 and December 31, 2015, the interest rate caps sold to clients represented a liability of $36 thousand and $32 thousand, respectively, and were included as part of derivative liabilities in the unaudited consolidated statements of financial condition. At June 30, 2016 and December 31, 2015, the interest rate caps purchased as mirror-images represented an asset of $36 thousand and $32 thousand, respectively, and were included as part of derivative assets in the unaudited consolidated statements of financial condition.

54

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 8 — ACCRUED INTEREST RECEIVABLE ANDOTHER ASSETS

Accrued interest receivable at June 30, 2016 and December 31, 2015 consists of the following:

	June 30,		December 31,
	2016		2015
	(In thousands)
Loans, excluding acquired loans	$	16,545	$	16,020
Investments		3,464		4,617
	$	20,009	$	20,637

Other assets at June 30, 2016 and December 31, 2015 consist of the following:

	June 30,		December 31,
	2016		2015
	(In thousands)
Prepaid expenses		16,332		11,762
Other repossessed assets		3,866		6,226
Core deposit and customer relationship intangibles		6,999		7,838
Mortgage tax credits		6,277		6,277
Investment in Statutory Trust		1,083		1,083
Accounts receivable and other assets		42,255		42,786
	$	76,812	$	75,972

Prepaid expenses amounting to $16.3 million and $11.8 million at June 30, 2016 and December 31, 2015, respectively, include prepaid municipal, property and income taxes aggregating to $11.2 million and $7.0 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 June 30, 2016 and December 31, 2015 this core deposit intangible amounted to $4.8 million and $5.3 million, respectively. In addition, the Company recorded a customer relationship intangible representing the value of customer relationships acquired with the acquisition of the securities broker-dealer and insurance agency in the BBVAPR Acquisition. At June 30, 2016 and December 31, 2015 this customer relationship intangible amounted to $2.2 million and $2.5 million, respectively.

Other repossessed assets totaled $3.9 million at June 30, 2016 and $6.2 million at December 31, 2015, include repossessed automobiles amounting to $3.7 million and $5.5 million, respectively, which are recorded at their net realizable value.

At June 30, 2016 and December 31, 2015, mortgage tax credits for the Company totaled $6.3 million for both periods. These tax credits do not have an expiration date.

55

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 9— DEPOSITS AND RELATED INTEREST

Total deposits, including related accrued interest payable, as of June 30, 2016 and December 31, 2015 consists of the following:

		June 30,		December 31,
	2016		2015
	(In thousands)
Non-interest bearing demand deposits	$	917,260	$	762,009
Interest-bearing savings and demand deposits		2,165,907		2,208,180
Individual retirement accounts		269,189		268,799
Retail certificates of deposit		525,979		441,998
Institutional certificates of deposit		204,074		253,791
Total core deposits		4,082,409		3,934,777
Brokered deposits		561,645		782,974
Total deposits	$	4,644,054	$	4,717,751

Brokered deposits include $495.9 million in certificates of deposits and $65.7 million in money market accounts at June 30, 2016, and $711.4 million in certificates of deposits and $71.6 million in money market accounts at December 31, 2015.

The weighted average interest rate of the Company’s deposits was 0.63% and 0.57% at June 30, 2016 and December 31, 2015, respectively. Interest expense for the quarters and six-month periods ended June 30, 2016 and 2015 was as follows:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Demand and savings deposits	$	3,184	$	3,100	$	6,026	$	6,482
Certificates of deposit		4,183		3,504		8,465		7,226
	$	7,367	$	6,604	$	14,491	$	13,708

At June 30, 2016 and December 31, 2015, demand and interest-bearing deposits and certificates of deposit included deposits of the Puerto Rico Cash & Money Market Fund, Inc., which amounted to $104.4 million and $103.7 million, respectively, with a weighted average rate of 0.77% for both periods, and were collateralized with investment securities with a fair value of $84.7 million and $81.6 million, respectively.

At June 30, 2016 and December 31, 2015, time deposits in denominations of $250 thousand or higher, excluding accrued interest and unamortized discounts, amounted to $340.9 million and $376.8 million, respectively. Such amounts include public fund time deposits from various Puerto Rico government municipalities, agencies, and corporations of $9.2 million and $7.6 million at a weighted average rate of 0.55% and 0.49% at June 30, 2016 and December 31, 2015, respectively.

At June 30, 2016 and December 31, 2015, total public fund deposits from various Puerto Rico government municipalities, agencies, and corporations amounted to $88.4 million and $99.0 million, respectively. These public funds were collateralized with commercial loans amounting to $410.9 million at June 30, 2016 and December 31, 2015.

56

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Excluding equity indexed options in the amount of $181 thousand, which are used by the Company to manage its exposure to the S&P 500 Index, and also excluding accrued interest of $1.8 million and unamortized deposit discount in the amount of $150 thousand, the scheduled maturities of certificates of deposit at June 30, 2016 and December 31, 2015 are as follows:

	June 30, 2016		December 31, 2015
	(In thousands)
Within one year:
Three (3) months or less	$	225,512	$	474,051
Over 3 months through 1 year		518,304		501,551
		743,816		975,602
Over 1 through 2 years		513,092		454,906
Over 2 through 3 years		155,666		176,406
Over 3 through 4 years		36,059		32,396
Over 4 through 5 years		44,340		33,715
	$	1,492,973	$	1,673,025

The table of scheduled maturities of certificates of deposits above includes brokered-deposits and individual retirement accounts.

The aggregate amount of overdrafts in demand deposit accounts that were reclassified to loans amounted to $569 thousand as of June 30, 2016 and $1.5 million as of December 31, 2015.

NOTE 10 — BORROWINGS AND RELATED INTEREST

Securities Sold under Agreements to Repurchase

At June 30, 2016, 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 June 30, 2016 and December 31, 2015, securities sold under agreements to repurchase (classified by counterparty), excluding accrued interest in the amount of $1.6 million and $2.2 million, respectively, were as follows:

	June 30,				December 31,
	2016				2015
			Fair Value of				Fair Value of
	Borrowing		Underlying		Borrowing		Underlying
	Balance		Collateral		Balance		Collateral
	(In thousands)
JP Morgan Chase Bank NA	$	222,500	$	231,586	$	262,500	$	283,483
Credit Suisse Securities (USA) LLC		402,000		437,103		670,000		737,887
Total	$	624,500	$	668,689	$	932,500	$	1,021,370

57

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table shows a summary of the Company’s repurchase agreements and their terms, excluding accrued interest in the amount of $1.6 million, at June 30, 2016:

			Weighted-
	Borrowing		Average		Maturity
Year of Maturity	Balance		Coupon	Settlement Date	Date
	(In thousands)
2016	$	170,000	1.500%	12/6/2012	12/8/2016
2017		232,000	4.780%	3/2/2007	3/2/2017
2018		222,500	1.420%	12/10/2012	4/29/2018
	$	624,500	2.690%

The Company's repurchase agreement in the original amount of $500 million with an original term of ten years, maturing on March 2, 2017, was modified in February 2016 to terminate, before maturity, $268.0 million of this repurchase agreement at a cost of $12.0 million, included as a loss on early extinguishment of debt in the unaudited statements of operations.  The remaining balance of this repurchase agreement was $232.0 million at June 30, 2016.

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 June 30, 2016 and December 31, 2015. There was no cash collateral at June 30, 2016 and December 31, 2015.

	June 30, 2016
					Market Value of Underlying Collateral
			Weighted		FNMA and				US Treasury
	Repurchase		Average		FHLMC		GNMA		Treasury
	Liability		Rate		Certificates		Certificates		Notes		Total
	(Dollars in thousands)
Over 90 days	$	624,500		2.69%	$	646,889	$	1,579	$	20,221	$	668,689
	December 31, 2015
					Market Value of Underlying Collateral
			Weighted		FNMA and				US Treasury
	Repurchase		Average		FHLMC		GNMA		Treasury
	Liability		Rate		Certificates		Certificates		Notes		Total
	(Dollars in thousands)
Less than 90 days	$	30,000		0.70%	$	31,961	$	-	$	-	$	31,961
Over 90 days		902,500		3.18%		974,698		2,131		12,580		989,409
Total	$	932,500		3.10%	$	1,006,659	$	2,131	$	12,580	$	1,021,370

58

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 June 30, 2016 and December 31, 2015, these advances were secured by mortgage and commercial loans amounting to $1.5 billion and $1.3 billion, respectively. Also, at June 30, 2016 and December 31, 2015, the Company had an additional borrowing capacity with the FHLB-NY of $895.0 million and $770.6 million, respectively. At June 30, 2016 and December 31, 2015, the weighted average remaining maturity of FHLB’s advances was 5.4 months and 6.3 months, respectively. The original terms of these advances ranges between one month and seven years, and the FHLB-NY does not have the right to exercise put options at par on any advances outstanding as of June 30, 2016.

The following table shows a summary of these advances and their terms, excluding accrued interest in the amount of $336 thousand, at June 30, 2016:

			Weighted-
		Borrowing	Average		Maturity
Year of Maturity		Balance	Coupon	Settlement Date	Date
		(In thousands)
2016	$	50,000	0.56%	6/10/2016	7/11/2016
		100,000	0.59%	6/16/2016	7/18/2016
		25,000	0.60%	6/24/2016	7/25/2016
		25,000	0.57%	6/30/2016	7/29/2016
		37,290	0.63%	6/1/2016	7/1/2016
		237,290
2017		4,150	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		9,704	2.59%	7/19/2013	7/20/2020
	$	306,144	0.95%

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 $103.0 million and $102.6 million at June 30, 2016 and December 31, 2015, respectively.

Under the requirements of Puerto Rico Banking Act, the Bank must establish a redemption fund for the subordinated capital notes, which will mature on September 29, 2016, by transferring from undivided profits pre-established amounts as follows:

	Redemption fund
	(In thousands)
Redemption fund at June 30, 2016	$	67,000
	$	67,000

59

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Other borrowings

Other borrowings, presented in the unaudited consolidated statements of financial condition amounted to $1.8 million and $1.7 million at June 30, 2016 and December 31, 2015, respectively, which mainly consists of unsecured fixed-rate borrowings.

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 June 30, 2016 and December 31, 2015:

June 30, 2016

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

$

1,926

$

-

$

1,926

$

2,009

$

-

$

(83)

December 31, 2015

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

$

3,025

$

-

$

3,025

$

2,000

$

-

$

1,025

60

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

June 30, 2016
							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	$	5,594	$	-	$	5,594	$	-	$	1,980	$	3,614
Securities sold under agreements to repurchase		624,500		-		624,500		668,689		-		(44,189)
Total	$	630,094	$	-	$	630,094	$	668,689	$	1,980	$	(40,575)
December 31, 2015
							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	$	7,257	$	-	$	7,257	$	-	$	1,980	$	5,277
Securities sold under agreements to repurchase		932,500		-		932,500		1,021,370		-		(88,870)
Total	$	939,757	$	-	$	939,757	$	1,021,370	$	1,980	$	(83,593)

NOTE 12 — RELATED PARTY TRANSACTIONS

The Bank grants loans to its directors, executive officers and 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. The activity and balance of these loans for the quarters and six-month periods ended June 30, 2016 and  2015 was as follows:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Balance at the beginning of year	$	31,134	$	27,508	$	31,475	$	27,011
New loans and disbursements		1,596		6,457		1,799		10,312
Repayments		(2,034)		(647)		(2,578)		(4,005)
Balance at the end of period	$	30,696	$	33,318	$	30,696	$	33,318

61

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 13 — INCOME TAXES

On May 26, 2016, Law 54 of 2016 was enacted to repeal the Value Added Tax (VAT) approved in 2015.  Although this law was vetoed by the Governor, the Puerto Rico's Senate and House of Representatives were able to override the veto.  As a result, the current Sales and Use Tax (SUT) remains in effect, with a rate of 11.5% on most transactions and a rate of 4% for business to business transactions and designated professional services.

At June 30, 2016 and December 31, 2015, the Company’s net deferred tax asset amounted to $143.0 million and $145.9 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 deferred tax asset, net of the existing valuation allowances recorded at June 30, 2016 and December 31, 2015. 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 carry forward period are reduced.

At June 30, 2016 and December 31, 2015, Oriental International Bank Inc. (“OIB”), the Bank’s international banking entity subsidiary, had $126 thousand and $141 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 quarter ended June 30, 2016 and 2015, $8 thousand and $12 thousand, respectively, related to this residual tax effect from OIB was reclassified from accumulated other comprehensive income (loss) into income tax provision. During the six-month period ended June 30, 2016 and 2015, $16 thousand and $22 thousand, respectively, related to this residual tax effect from OIB was reclassified from accumulated other comprehensive income (loss) into 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 was $2.3 million at June 30, 2016 and $2.2 million at December 31, 2015. The Company had accrued $81 thousand at June 30, 2016 and $175 thousand at December 31, 2015 for the payment of interest and penalties relating to unrecognized tax benefits.

Income tax expense for the quarters ended June 30, 2016 and 2015 was $5.9 million and $769 thousand, respectively. Income tax expense for the six-month periods ended June 30, 2016 and 2015 was $11.5 million and $1.7 million, respectively.

62

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 14 — REGULATORY CAPITAL REQUIREMENTS

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, 2015 for the Company and the Bank (subject to certain phase-in periods through January 1, 2019) and that replaced their general risk-based capital rules, advanced approaches rule, market risk rule, and leverage rules. Among other matters, the new capital rules: (i) introduce a new capital measure called “Common Equity Tier 1” (“CET1”) and related regulatory capital ratio of CET1 to risk-weighted assets; (ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting certain revised requirements; (iii) mandate that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital; and (iv) expand the scope of the deductions from and adjustments to capital as compared to prior regulations. The new capital rules prescribe a new standardized approach for risk weightings that expand the risk-weighting categories from the current four Basel I-derived categories (0%, 20%, 50% and 100%) to a larger and more risk-sensitive number of categories, depending on the nature of the assets, and resulting in higher risk weights for a variety of asset classes.

Pursuant to the new capital rules, the minimum capital ratios requirements as of January 1, 2015 are as follows:

             4.5% CET1 to risk-weighted assets;

             6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets;

             8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets; and

             4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known  

             as the “leverage ratio”).

As of June 30, 2016 and December 31, 2015, the Company and the Bank met all capital adequacy requirements to which they are subject. As of June 30, 2016 and December 31, 2015, the Bank is “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” an institution must maintain minimum CET1 risk-based, Tier 1 risk-based, total risk-based, and Tier 1 leverage ratios as set forth in the tables presented below.

The New Capital Rules also introduce a new 2.5% “capital conservation buffer”, composed entirely of CET1, on top of the three minimum risk-weighted asset ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET1 to risk-weighted assets above the minimum but below the capital conservation buffer will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. Thus, when fully phased-in on January 1, 2019, the Company and the Bank will be required to maintain such an additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios of (i) CET1 to risk-weighted assets of at least 7%, (ii) Tier 1 capital to risk-weighted assets of at least 8.5%, and (iii) Total capital to risk-weighted assets of at least 10.5%. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and increase by 0.625% on each subsequent January 1, until it reaches 2.5% on January 1, 2019. At June 30, 2016 the Company and the Bank met the capital buffer requirement.

63

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company’s and the Bank’s actual capital amounts and ratios as of June 30, 2016 and December 31, 2015 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 June 30, 2016
Total capital to risk-weighted assets	$	849,147	18.00%	$	377,323	8.00%	$	471,653	10.00%
Tier 1 capital to risk-weighted assets	$	788,349	16.71%	$	282,992	6.00%	$	377,323	8.00%
Common equity tier 1 capital to risk-weighted assets	$	596,080	12.64%	$	212,244	4.50%	$	306,575	6.50%
Tier 1 capital to average total assets	$	788,349	11.92%	$	264,633	4.00%	$	330,791	5.00%
As of December 31, 2015
Total capital to risk-weighted assets	$	846,748	17.29%	$	391,723	8.00%	$	489,654	10.00%
Tier 1 capital to risk-weighted assets	$	782,912	15.99%	$	293,792	6.00%	$	391,723	8.00%
Common equity tier 1 capital to risk-weighted assets	$	594,482	12.14%	$	220,344	4.50%	$	318,275	6.50%
Tier 1 capital to average total assets	$	782,912	11.18%	$	280,009	4.00%	$	350,011	5.00%

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Bank Ratios
As of June 30, 2016
Total capital to risk-weighted assets	$	830,002	17.62%	$	376,874	8.00%	$	471,093	10.00%
Tier 1 capital to risk-weighted assets	$	769,424	16.33%	$	282,656	6.00%	$	376,874	8.00%
Common equity tier 1 capital to risk-weighted assets	$	769,424	16.33%	$	211,992	4.50%	$	306,210	6.50%
Tier 1 capital to average total assets	$	769,424	11.68%	$	263,464	4.00%	$	329,330	5.00%
As of December 31, 2015
Total capital to risk-weighted assets	$	815,458	16.70%	$	390,688	8.00%	$	488,360	10.00%
Tier 1 capital to risk-weighted assets	$	751,886	15.40%	$	293,016	6.00%	$	390,688	8.00%
Common equity tier 1 capital to risk-weighted assets	$	751,886	15.40%	$	219,762	4.50%	$	317,434	6.50%
Tier 1 capital to average total assets	$	751,886	10.80%	$	278,399	4.00%	$	347,999	5.00%

64

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 15 – STOCKHOLDERS’ EQUITY

    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 June 30, 2016 and December 31, 2015 accumulated issuance costs charged against additional paid-in capital amounted to $13.6 million and $10.1 million for preferred and common stock, respectively.

Legal Surplus

The Puerto Rico Banking Act requires that a minimum of 10% of the Bank’s net income for the year be transferred to a reserve fund until such fund (legal surplus) equals the total paid-in capital on common and preferred stock. At June 30, 2016 and December 31, 2015,the Bank’s legal surplus amounted to $73.3 million and $70.4 million, respectively. The amount transferred to the legal surplus account is not available for the payment of dividends to shareholders.

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 $7.7 million of authority remains. The shares of common stock repurchased are to be held by the Company as treasury shares. There were no repurchases during the six-month period ended June 30, 2016. During the six-month period ended June 30, 2015, the Company purchased 303,985 shares under this program for a total of $4.2 million at an average price of $13.90 per share.

The number of shares that may yet be purchased under the $70 million program is estimated at 931,428 and was calculated by dividing the remaining balance of $7.7 million by $8.30 (closing price of the Company common stock at June 30, 2016). The Company did not purchase any shares of its common stock during the six-month period ended June 30, 2016 and 2015, other than through its publicly announced stock purchase program.

The activity in connection with common shares held in treasury by the Company for the six-month periods ended June 30, 2016 and 2015 is set forth below:

	Six-Month Period Ended June 30
	2016			2015
		Dollar			Dollar
	Shares	Amount		Shares	Amount
	(In thousands, except shares data)
Beginning of period	8,757,960	$	105,379	8,012,254	$	97,070
Common shares used upon lapse of restricted stock units	(45,810)		(505)	(58,279)		(640)
Common shares repurchased as part of the stock repurchase program	-		-	303,985		4,238
End of period	8,712,150	$	104,874	8,257,960	$	100,668

65

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 16 - ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income, net of income tax, as of June 30, 2016 and December 31, 2015 consisted of:

	June 30,		December 31,
	2016		2015
	(In thousands)
Unrealized gain on securities available-for-sale which are not     other-than-temporarily impaired	$	19,004	$	22,044
Unrealized gain on securities available-for-sale which are     other-than-temporarily impaired		-		(3,196)
Income tax effect of unrealized gain on securities available-for-sale		(919)		(1,924)
Net unrealized gain on securities available-for-sale which are not         other-than-temporarily impaired, net of tax		18,085		16,924
Unrealized loss on cash flow hedges		(3,655)		(4,307)
Income tax effect of unrealized loss on cash flow hedges		1,375		1,380
Net unrealized loss on cash flow hedges		(2,280)		(2,927)
Accumulated other comprehensive income, net of taxes	$	15,805	$	13,997

66

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents changes in accumulated other comprehensive income by component, net of taxes, for the quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30,
	2016						2015
	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	$	15,089	$	(2,805)	$	12,284	$	30,214	$	(5,890)	$	24,324
Other comprehensive income (loss) before reclassifications		3,060		(949)		2,111		(11,523)		(180)		(11,703)
Amounts reclassified out of accumulated other comprehensive (loss) income		(64)		1,474		1,410		141		1,539		1,680
Other comprehensive income (loss)		2,996		525		3,521		(11,382)		1,359		(10,023)
Ending balance	$	18,085	$	(2,280)	$	15,805	$	18,832	$	(4,531)	$	14,301
	Six-Month Period Ended June 30,
	2016						2015
	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	$	16,924	$	(2,927)	$	13,997	$	25,764	$	(6,053)	$	19,711
Other comprehensive (loss) before reclassifications		(1,266)		(2,406)		(3,672)		(7,212)		(1,549)		(8,761)
Amounts reclassified out of accumulated other comprehensive income (loss)		2,427		3,053		5,480		280		3,071		3,351
Other comprehensive income (loss)		1,161		647		1,808		(6,932)		1,522		(5,410)
Ending balance	$	18,085	$	(2,280)	$	15,805	$	18,832	$	(4,531)	$	14,301

67

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents reclassifications out of accumulated other comprehensive income for the quarters and six-month periods ended June 30, 2016 and 2015:

	Amount reclassified out of accumulated
	other comprehensive income				Affected Line Item in
	Quarter Ended June 30,				Consolidated Statement
		2016		2015	of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	1,354	$	1,614	Net interest expense
Tax effect from increase in capital gains tax rate		120		(75)	Income tax expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		8		12	Income tax expense
Tax effect from increase in capital gains tax rate		(72)		129	Income tax expense
	$	1,410	$	1,680
	Amount reclassified out of accumulated
	other comprehensive income				Affected Line Item in
	Six-Month Period Ended June 30,				Consolidated Statement
		2016		2015	of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	2,804	$	3,220	Net interest expense
Tax effect from increase in capital gains tax rate		249		(149)	Income tax expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		16		22	Income tax expense
Other-than-temporary impairment losses on available for sale securities realized during the period		2,557		-
Tax effect from increase in capital gains tax rate		(146)		258	Income tax expense
	$	5,480	$	3,351

68

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 17 – EARNINGS (LOSS) PER COMMON SHARE

The calculation of earnings (loss) per common share for the quarters and six-month periods ended June 30, 2016 and 2015 is as follows:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands, except per share data)				(In thousands, except per share data)
Net income (loss)	$	14,339	$	(3,109)	$	28,510	$	(6,097)
Less: Dividends on preferred stock
Non-convertible preferred stock (Series A, B, and D)		(1,629)		(1,628)		(3,256)		(3,256)
Convertible preferred stock (Series C)		(1,837)		(1,838)		(3,675)		(3,675)
Income (loss) available to common shareholders	$	10,873	$	(6,575)	$	21,579	$	(13,028)
Effect of assumed conversion of the convertible preferred stock		1,837		1,838		3,675		3,675
Income (loss) available to common shareholders assuming conversion	$	12,710	$	(4,737)	$	25,254	$	(9,353)
Weighted average common shares and share equivalents:
Average common shares outstanding		43,914		44,505		43,906		44,569
Effect of dilutive securities:
Average potential common shares-options		43		110		37		148
Average potential common shares-assuming conversion of convertible preferred stock		7,138		7,159		7,138		7,159
Total weighted average common shares outstanding and equivalents		51,095		51,774		51,081		51,876
Earnings (loss) per common share - basic	$	0.25	$	(0.15)	$	0.49	$	(0.29)
Earnings (loss) per common share - diluted	$	0.25	$	(0.15)	$	0.49	$	(0.29)

In computing diluted earnings (loss) per common share, the 84,000 shares of convertible preferred stock, which remain outstanding at June 30, 2016, with a conversion rate, subject to certain conditions, of 86.4225 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 (loss) per common share, the dividends declared during the quarters ended June 30, 2016 and 2015 on the convertible preferred stock were added back as income available to common shareholders.

For the quarters ended June 30, 2016 and 2015, weighted-average stock options with an anti-dilutive effect on earnings (loss) per share not included in the calculation amounted to 957,743 and 566,025, respectively   For the six-month periods ended June 30, 2016 and 2015, weighted-average stock options with an anti-dilutive effect on earnings (loss) per share not included in the calculation amounted to $957,783 and $457,467, respectively.

NOTE 18 – GUARANTEES

At June 30, 2016, the unamortized balance of the obligations undertaken in issuing the guarantees under standby letters of credit represented a liability of $2.3 million (December 31, 2015 - $14.7 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 June 30, 2016 and December 31, 2015, the unpaid principal balance of residential mortgage loans sold subject to credit recourse was $21.1 million and $22.4 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 six-month periods ended June 30, 2016 and 2015.

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Balance at beginning of period	$	181	$	487	$	439	$	927
Net (charge-offs/terminations) recoveries		(19)		(198)		(277)		(638)
Balance at end of period	$	162	$	289	$	162	$	289

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. The recourse obligation will be fully extinguished before the end of 2017.

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 six-month period ended June 30, 2016, the Company repurchased approximately $83 thousand and $288 thousand, respectively of unpaid principal balance in mortgage loans subject to the credit recourse provisions.  During the quarter and six-month period ended June 30, 2015, the Company repurchased approximately $1.2 million and $3.4 million, respectively 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 June 30, 2016, the Company’s liability for estimated credit losses related to loans sold with credit recourse amounted to $162 thousand (December 31, 2015– $439 thousand).

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 that 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. During the quarter and six-month period ended June 30, 2016, the Company repurchased $817 thousand and $2.3 million, respectively, of unpaid principal balance in mortgage loans, excluding mortgage loans subject to credit recourse provisions referred to above.During the quarter and six-month period ended June 30, 2015, the Company repurchased $2.7 million and $11.7 million, respectively, of unpaid principal balance in mortgage loans, excluding mortgage loans subject to credit recourse provisions referred to above.

During the quarter and six-month period ended June 30, 2016, the Company recognized $92 thousand and $111 thousand, respectively, in losses from the repurchase of residential mortgage loans sold subject to credit recourse, and $329 thousand and $830 thousand, respectively, in losses from the repurchase of residential mortgage loans as a result of breaches of the customary representations and warranties. During the quarter and six-month period ended June 30, 2015, the Company recognized $476 thousand and $583 thousand, respectively, in losses from the repurchase of residential mortgage loans sold subject to credit recourse, and $742 thousand and $1.5 million, respectively, in losses from the repurchase of residential mortgage loans as a result of breaches of the customary representations and warranties.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 June 30, 2016, the Company serviced $726.6 million 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 June 30, 2016, the outstanding balance of funds advanced by the Company under such mortgage loan servicing agreements was approximately $339 thousand (December 31, 2015 - $301 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.

NOTE 19— 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 June 30, 2016 and December 31, 2015 were as follows:

		June 30,		December 31,
	2016		2015
	(In thousands)
Commitments to extend credit	$	461,054	$	456,720
Commercial letters of credit		1,556		1,508

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 June 30, 2016 and December 31, 2015, 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 $667 thousand at both June 30, 2016 and December 31, 2015.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 June 30, 2016 and December 31, 2015, is as follows:

		June 30,		December 31,
	2016		2015
	(In thousands)
Standby letters of credit and financial guarantees	$	4,756	$	14,656
Loans sold with recourse		21,064		22,374

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 June 30, 2016 and 2015, amounted to $2.3 million for both periods.  For the six-month periods ended June 30, 2016 and 2015, rent expense amounted to $4.4 million and $4.7 million, respectively, and is included in the “occupancy and equipment” caption in the unaudited consolidated statements of operations. Future rental commitments under leases in effect at June 30, 2016 exclusive of taxes, insurance, and maintenance expenses payable by the Company, are summarized as follows:

	Minimum Rent
Year Ending December 31,	(In thousands)
2016	$	4,732
2017		6,850
2018		6,428
2019		6,387
2020		5,660
Thereafter		12,500
	$	42,557

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NOTES TO 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 20 - 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 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.

Money market investments

The fair value of money market investments is based on the carrying amounts reflected in the unaudited 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 Interactive Data Corporation (“IDC”), an independent, well-recognized pricing company. 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 June 30, 2016 and December 31, 2015, the Company did not have investment securities classified as Level 3.

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.

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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.

Impaired Loans

Impaired loans are carried at the present value of expected future cash flows using the loan’s existing rate in a discounted cash flow calculation, or the fair value of the collateral if the loan is collateral-dependent. Expected cash flows are based on internal inputs reflecting expected default rates on contractual cash flows. This method of estimating fair value does not incorporate the exit-price concept of fair value described in Accounting Standards Codification (“ASC”) 820-10 and would generally result in a higher value than the exit-price approach. For loans measured using the estimated fair value of collateral less costs to sell, fair value is generally determined 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 less disposition costs. 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 automobiles. 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Assets and liabilities measured at fair value on a recurring and non-recurring basis are summarized below:

	June 30, 2016
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	664,302	$	-	$	664,302
Trading securities		-		348		-		348
Money market investments		5,740		-		-		5,740
Derivative assets		-		1,739		187		1,926
Servicing assets		-		-		7,932		7,932
Derivative liabilities		-		(5,413)		(181)		(5,594)
	$	5,740	$	660,976	$	7,938	$	674,654
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	219,393	$	219,393
Foreclosed real estate		-		-		51,220		51,220
Other repossessed assets		-		-		3,866		3,866
	$	-	$	-	$	274,479	$	274,479

	December 31, 2015
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	974,609	$	-	$	974,609
Trading securities		-		288		-		288
Money market investments		4,699		-		-		4,699
Derivative assets		-		1,855		1,170		3,025
Servicing assets		-		-		7,455		7,455
Derivative liabilities		-		(6,162)		(1,095)		(7,257)
	$	4,699	$	970,590	$	7,530	$	982,819
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	235,767	$	235,767
Foreclosed real estate		-		-		58,176		58,176
Other repossessed assets		-		-		6,226		6,226
	$	-	$	-	$	300,169	$	300,169

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NOTES TO 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 six-month periods ended June 30, 2016 and  2015:

	Quarter Ended June 30, 2016
	Derivative				Derivative
	asset				liability
	(S&P				(S&P
	Purchased			Servicing	Embedded
Level 3 Instruments Only	Options)			assets	Options)		Total
Balance at beginning of period	$	772	$	7,819	$	(746)	$	7,845
Gains (losses) included in earnings		(585)		-		557		(28)
New instruments acquired		-		717		-		717
Principal repayments		-		(121)		-		(121)
Amortization		-		-		8		8
Changes in fair value of servicing assets		-		(483)		-		(483)
Balance at end of period	$	187	$	7,932	$	(181)	$	7,938
	Six-Month Period Ended June 30, 2016
	Derivative					Derivative
	asset					liability
	(S&P					(S&P
	Purchased			Servicing		Embedded
Level 3 Instruments Only	Options)			assets		Options)		Total
Balance at beginning of period	$	1,171	$	7,455	$	(1,095)	$	7,531
Gains (losses) included in earnings		(984)		-		886		(98)
New instruments acquired		-		1,275		-		1,275
Principal repayments		-		(225)		-		(225)
Amortization		-		-		28		28
Changes in fair value of servicing assets		-		(573)		-		(573)
Balance at end of period	$	187	$	7,932	$	(181)	$	7,938
	Quarter Ended June 30, 2015
	Derivative					Derivative
	asset					liability
	(S&P					(S&P
	Purchased			Servicing		Embedded
Level 3 Instruments Only	Options)			assets		Options)		Total
Balance at beginning of period	$	3,734	$	12,164	$	(3,617)	$	12,281
(Losses) included in earnings		(1,596)		-		1,517		(79)
Sale of mortgage servicing rights held-for-sale		-		(6,985)		-		(6,985)
Changes due to payments on loans		-		(313)		-		(313)
New instruments acquired		-		1,529		-		1,529
Changes in fair value related to price of MSRs held for sale		-		(835)		-		(835)
Amortization		-		-		56		56
Changes in fair value of servicing assets		-		231		-		231
Balance at end of period	$	2,138	$	5,791	$	(2,044)	$	5,885

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Six-Month Period Ended June 30, 2015
		Derivative				Derivative
		asset				liability
		(S&P				(S&P
		Purchased		Servicing		Embedded
Level 3 Instruments Only		Options)		assets		Options)		Total
Balance at beginning of period		$	5,555	$	13,992	$	(5,477)	$	14,070
(Losses) gains included in earnings			(3,417)		-		3,299		(118)
Sale of mortgage servicing rights held-for-sale			-		(6,985)		-		(6,985)
Changes due to payments on loans			-		(732)		-		(732)
New instruments acquired			-		2,060		-		2,060
Amortization			-		-		134		134
Changes in fair value related to price of MSRs held for sale			-		(2,716)		-		(2,716)
Changes in fair value of servicing assets			-		172		-		172
Balance at end of period		$	2,138	$	5,791	$	(2,044)	$	5,885

During the quarters and six-month periods ended June 30, 2016 and 2015, there were purchases and sales of assets and liabilities measured at fair value on a recurring basis. There were no transfers into or out of Level 1 and Level 2 fair value measurements during such periods.

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NOTES TO 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 June 30, 2016:

	June 30, 2016
	Fair Value		Valuation Technique	Unobservable Input	Range
	(In thousands)
Derivative assets (S&P     Purchased Options)	$	187	Option pricing model	Implied option volatility	41.87%
				Counterparty credit risk     (based on 5-year credit     default swap ("CDS")     spread)	79.96%-89.03%
Servicing assets	$	7,932	Cash flow valuation	Constant prepayment rate	4.41% - 11.40%
				Discount rate	10.00% - 12.00%
Derivative liability (S&P     Embedded Options)	$	(181)	Option pricing model	Implied option volatility	41.87%
				Counterparty credit risk (based on 5-year CDS spread)	79.96%-89.03%
Collateral dependant     impaired loans	$	28,558	Fair value of property     or collateral	Appraised value less disposition costs	29.20% - 43.20%
Puerto Rico Electric Power    Authority line of credit, net	$	183,020	Cash flow valuation	Discount rate	7.25%
Other non-collateral dependant  impaired loans	$	7,814	Cash flow valuation	Discount rate	4.25%-10.50%
Foreclosed real estate	$	51,220	Fair value of property     or collateral	Appraised value less disposition costs	29.20% - 43.20%
Other repossessed assets	$	3,866	Fair value of property     or collateral	Appraised value less disposition costs	29.20% - 43.20%

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NOTES TO 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 CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The estimated fair value and carrying value of the Company’s financial instruments at June 30, 2016 and December 31, 2015 is as follows:

	June 30,				December 31,
	2016				2015
	Fair		Carrying		Fair		Carrying
	Value		Value		Value		Value
	(In thousands)
Level 1
Financial Assets:
Cash and cash equivalents	$	517,048	$	517,048	$	536,709	$	536,709
Restricted cash		3,030		3,030		3,349		3,349
Level 2
Financial Assets:
Trading securities		348		348		288		288
Investment securities available-for-sale		664,302		664,302		974,609		974,609
Investment securities held-to-maturity		643,530		635,399		614,679		620,189
Federal Home Loan Bank (FHLB) stock		19,838		19,838		20,783		20,783
Other investments		3		3		3		3
Derivative assets		1,739		1,739		1,855		1,855
Financial Liabilities:
Derivative liabilities		5,413		5,413		6,162		6,162
Level 3
Financial Assets:
Total loans (including loans held-for-sale)		4,163,769		4,373,617		4,101,219		4,434,213
Derivative assets		187		187		1,170		1,170
FDIC indemnification asset		11,064		18,426		17,786		22,599
Accrued interest receivable		20,009		20,009		20,637		20,637
Servicing assets		7,932		7,932		7,455		7,455
Accounts receivable and other assets		42,243		42,243		42,786		42,786
Financial Liabilities:
Deposits		4,633,864		4,643,873		4,705,878		4,715,764
Securities sold under agreements to repurchase		630,933		626,109		955,859		934,691
Advances from FHLB		308,583		306,480		335,812		332,476
Other borrowings		2,599		1,753		2,593		1,734
Subordinated capital notes		98,944		102,983		94,940		102,633
Accrued expenses and other liabilities		88,930		88,930		92,935		92,935
Derivative liabilities embedded in deposits		181		181		1,095		1,095

80

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following methods and assumptions were used to estimate the fair values of significant financial instruments at June 30, 2016 and December 31, 2015:

•     Cash and cash equivalents (including money market investments and time deposits with other banks), restricted cash, accrued interest receivable, accounts receivable and other assets 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 and other investments, is based on quoted market prices, when available or prices provided from contracted pricing providers, 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 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 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 asset 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 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. Non-performing loans have been valued at the carrying amounts.

•     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, other borrowings, 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.

81

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 21 – 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 OPC. 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 retirement 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.

82

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Following are the results of operations and the selected financial information by operating segment for the quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30, 2016
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	79,675	$	16	$	8,217	$	87,908	$	-	$	87,908
Interest expense		(7,300)		-		(7,296)		(14,596)		-		(14,596)
Net interest income		72,375		16		921		73,312		-		73,312
Provision for loan and lease losses		(14,445)		-		-		(14,445)		-		(14,445)
Non-interest income		8,214		6,910		31		15,155		-		15,155
Non-interest expenses		(47,098)		(4,908)		(1,820)		(53,826)		-		(53,825)
Intersegment revenue		389		-		49		438		(438)		-
Intersegment expenses		(49)		(286)		(103)		(438)		438		-
Income before income taxes	$	19,386	$	1,732	$	(922)	$	20,196	$	-	$	20,197
Total assets	$	5,829,987	$	19,054	$	1,800,838	$	7,649,879	$	(937,283)	$	6,712,596
	Quarter Ended June 30, 2015
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	90,504	$	24	$	8,885	$	99,413	$	-	$	99,413
Interest expense		(7,110)		-		(10,011)		(17,121)		-		(17,121)
Net interest income		83,394		24		(1,126)		82,292		-		82,292
Provision for loan and  lease losses		(15,539)		-		-		(15,539)		-		(15,539)
Non-interest (loss) income		(11,713)		6,893		164		(4,656)		-		(4,656)
Non-interest expenses		(56,844)		(6,733)		(860)		(64,437)		-		(64,437)
Intersegment revenue		163		-		61		224		(224)		-
Intersegment expenses		(61)		(87)		(76)		(224)		224		-
(Loss) income before income taxes	$	(600)	$	97	$	(1,837)	$	(2,340)	$	-	$	(2,340)
Total assets	$	6,153,663	$	21,157	$	2,136,293	$	8,311,113	$	(912,788)	$	7,398,325

83

OFG BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Six-Month Period Ended June 30, 2016
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	160,827	$	34	$	18,353	$	179,214	$	-	$	179,214
Interest expense		(14,107)		-		(16,820)		(30,927)		-		(30,927)
Net interest income		146,720		34		1,533		148,287		-		148,287
Provision for loan and lease losses		(28,234)		-		-		(28,234)		-		(28,234)
Non-interest income (loss)		16,009		12,930		(281)		28,658		-		28,658
Non-interest expenses		(97,786)		(7,853)		(3,043)		(108,682)		-		(108,682)
Intersegment revenue		787		-		149		936		(936)		-
Intersegment expenses		(149)		(577)		(210)		(936)		936		-
Income (loss) before income taxes	$	37,347	$	4,534	$	(1,852)	$	40,029	$	-	$	40,029
	Six-Month Period Ended June 30, 2015
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	187,986	$	47	$	18,381	$	206,414	$	-	$	206,414
Interest expense		(14,564)		-		(19,923)		(34,487)		-		(34,487)
Net interest income		173,422		47		(1,542)		171,927		-		171,927
Provision for loan and  lease losses		(57,732)		-		-		(57,732)		-		(57,732)
Non-interest income (loss)		(13,962)		13,903		2,284		2,225		-		2,225
Non-interest expenses		(106,156)		(11,524)		(3,089)		(120,769)		-		(120,769)
Intersegment revenue		707		-		160		866		(866)		-
Intersegment expenses		(159)		(518)		(189)		(866)		866		-
(Loss) income before income taxes	$	(3,880)	$	1,908	$	(2,376)	$	(4,349)	$	-	$	(4,349)

84

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 Form 10-K for the year ended December 31, 2015 (the “2015 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 48 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.

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 2015 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 2015 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:

• Loans and lease receivables

• 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 Committee of our Board of Directors. Effective June 30, 2016, pursuant to supervisory direction, the Company changed the purchase credit impaired policy for all loans accounted for under ASC 310-30. Under the revised policy, the Company writes-off the loan’s recorded investment and derecognizes the associated allowance for loan and lease losses for loans that exit the pools. The revised policy implementation is performed prospectively due to the immaterial impact for retrospective adoption. Prior to June 30, 2016, the pool’s carrying value and allowance was determined by discount expected cash flows at the pool’s effective yield. The allowance for loan and lease losses was maintained until all of the loans in the pool were paid off or charged-off.  The transition to this revised policy on June 30, 2016 resulted in the de-recognition of loans recorded investment balance and associated allowance for loans that had exited the pools, with no impact to provision for loan and lease losses. Other than this change, there have been no material changes in the methods used to formulate these critical accounting estimates from those discussed in our 2015 Form 10-K.

85

OVERVIEW OF FINANCIAL PERFORMANCE

SELECTED FINANCIAL DATA
	Quarter Ended June 30,					Six-Month Period Ended June 30,
					Variance					Variance
	2016		2015		%	2016		2015		%
EARNINGS DATA:	(In thousands, except per share data)
Interest income	$	87,908	$	99,413	-11.6%	$	179,214	$	206,414	-13.2%
Interest expense		14,596		17,121	-14.7%		30,927		34,487	-10.3%
Net interest income		73,312		82,292	-10.9%		148,287		171,927	-13.8%
Provision for loan and lease losses		14,445		15,539	-7.0%		28,234		57,732	-51.1%
Net interest income after provision for loan             and lease losses		58,867		66,753	-11.8%		120,053		114,195	5.1%
Non-interest income (loss)		15,155		(4,656)	425.5%		28,658		2,225	1188.0%
Non-interest expenses		53,825		64,437	-16.5%		108,682		120,769	-10.0%
Income (loss) before taxes		20,197		(2,340)	963.1%		40,029		(4,349)	1020.4%
Income tax expense		5,858		769	661.8%		11,519		1,748	559.0%
Net income (loss)		14,339		(3,109)	561.2%		28,510		(6,097)	567.6%
Less: dividends on preferred stock		(3,466)		(3,466)	0.0%		(6,931)		(6,931)	0.0%
Income (loss) available to common shareholders	$	10,873	$	(6,575)	265.4%	$	21,579	$	(13,028)	265.6%
PER SHARE DATA:
Basic	$	0.25	$	(0.15)	267.6%	$	0.49	$	(0.29)	268.1%
Diluted	$	0.25	$	(0.15)	267.6%	$	0.49	$	(0.29)	268.1%
Average common shares outstanding		43,914		44,505	-1.3%		43,906		44,569	-1.5%
Average common shares outstanding and equivalents		51,095		51,774	-1.3%		51,081		51,876	-1.5%
Cash dividends declared per common share	$	0.06	$	0.10	-40.3%	$	0.12	$	0.20	-40.3%
Cash dividends declared on common shares	$	2,639	$	4,457	-40.8%	$	5,272	$	8,920	-40.9%
PERFORMANCE RATIOS:
Return on average assets (ROA)		0.85%		-0.17%	598.7%		0.83%		-0.17%	588.2%
Return on average tangible common equity		6.70%		-3.93%	270.4%		6.69%		-3.84%	274.1%
Return on average common equity (ROE)		5.86%		-3.44%	270.2%		5.85%		-3.37%	273.5%
Equity-to-assets ratio		13.64%		12.32%	10.7%		13.64%		12.32%	10.7%
Efficiency ratio		58.76%		63.39%	-7.3%		59.16%		57.37%	3.1%
Interest rate spread		4.55%		4.68%	-2.8%		4.60%		4.91%	-6.3%
Interest rate margin		4.65%		4.92%	-5.5%		4.68%		5.14%	-8.9%

86

SELECTED FINANCIAL DATA - (Continued)
	June 30,		December 31,		Variance
	2016		2015		%
PERIOD END BALANCES AND CAPITAL RATIOS:	(In thousands, except per share data)
Investments and loans
Investment securities	$	1,319,890	$	1,615,872	-18.3%
Loans and leases , net		4,373,617		4,434,213	-1.4%
Total investments and loans	$	5,693,507	$	6,050,085	-5.9%
Deposits and borrowings
Deposits	$	4,644,054	$	4,717,751	-1.6%
Securities sold under agreements to repurchase		626,109		934,691	-33.0%
Other borrowings		411,216		436,843	-5.9%
Total deposits and borrowings	$	5,681,379	$	6,089,285	-6.7%
Stockholders’ equity
Preferred stock	$	176,000	$	176,000	0.0%
Common stock		52,626		52,626	0.0%
Additional paid-in capital		540,705		540,512	0.0%
Legal surplus		73,265		70,435	4.0%
Retained earnings		162,363		148,886	9.1%
Treasury stock, at cost		(104,874)		(105,379)	0.5%
Accumulated other comprehensive income		15,805		13,997	12.9%
Total stockholders' equity	$	915,890	$	897,077	2.1%
Per share data
Book value per common share	$	17.08	$	16.67	2.5%
Tangible book value per common share	$	14.96	$	14.53	3.0%
Market price at end of period	$	8.30	$	7.32	13.4%
Capital ratios
Leverage capital		11.92%		11.18%	6.6%
Common equity Tier 1 capital		12.64%		12.14%	4.1%
Tier 1 risk-based capital		16.71%		15.99%	4.5%
Total risk-based capital		18.00%		17.29%	4.1%
Financial assets managed
Trust assets managed	$	2,779,612	$	2,691,423	3.3%
Broker-dealer assets gathered	$	2,387,445	$	2,374,709	0.5%

87

FINANCIAL HIGHLIGHTS OF THE SECOND QUARTER OF 2016

•Net income available to shareholders was in line with the preceding quarter and surpassed the year ago quarter. The Company generated $10.9 million, or $0.25 per share fully diluted, compared to $10.7 million, or $0.24, in the preceding quarter. In the year ago quarter, the Company reported a net loss of $6.6 million, or ($0.15) per share, primarily due to non-recurring charges.

•Oriental Bank’s overall performance continued strong. New loan generation at $237.8 million grew 5.1% from the preceding quarter, with increased activity in auto, mortgage, and consumer loans. Banking and wealth management fee revenues increased 6.8% from the preceding quarter.

•Credit quality continued its positive trajectory. Net charge-offs (excluding acquired loans) declined to 1.21% from 1.30% in the first quarter. Early and total delinquency rates dropped from the previous and year-ago quarters. Non-performing loan rates fell to the lowest level in the last five quarters.

•Costs remained under control. The efficiency ratio improved to 58.76%, the best level in the last five quarters.

•Total Puerto Rico government related exposure continued to decline. Balances fell approximately 1.0%, to $405.3 million during the second quarter. In addition, Puerto Rico Electric Power Authority (PREPA) continued to make significant progress toward final implementation of its Restructuring Support Agreement by the end of 2016.

•Net Interest Margin (NIM) remained relatively level, at 4.65% compared to 4.92% in the year-ago quarter.

•Capital continued to build. Tangible book value per common share increased to $14.96 from $14.53. Tangible common equity (TCE) ratio increased to 9.92% from 9.10% in December 31, 2015.

88

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 six-month periods ended June 30, 2016 and 2015:

TABLE 1 - QUARTERLY ANALYSIS OF NET INTEREST INCOME AND CHANGES DUE TO VOLUME/RATE
FOR THE QUARTERS ENDED JUNE 30, 2016 AND 2015
	Interest				Average rate		Average balance
	June		June		June	June	June		June
	2016		2015		2016	2015	2016		2015
	(Dollars in thousands)
A - NORMAL SPREAD
Interest-earning assets:
Investments:
Investment securities	$	7,621	$	8,587	2.33%	2.33%	$	1,311,468	$	1,476,867
Interest bearing cash and money market investments		612		322	0.48%	0.27%		512,916		483,507
Total investments		8,233		8,909	1.81%	1.84%		1,824,384		1,960,374
Non-acquired loans
Mortgage		9,851		9,698	5.31%	4.97%		743,516		782,753
Commercial		15,824		14,375	4.43%	4.32%		1,433,944		1,333,276
Consumer		6,548		4,953	10.68%	10.32%		246,003		192,572
Auto and leasing		16,885		15,213	9.59%	9.86%		706,107		618,746
Total non-acquired loans		49,108		44,239	6.29%	6.06%		3,129,570		2,927,347
Acquired loans:
Acquired BBVAPR
Mortgage		8,294		8,813	5.52%	5.57%		602,184		634,794
Commercial		6,572		11,770	7.69%	9.49%		342,752		497,422
Consumer		3,173		3,445	18.19%	16.91%		69,949		81,713
Auto		5,605		9,479	10.44%	10.23%		215,321		371,494
Total acquired BBVAPR loans		23,644		33,507	7.71%	8.48%		1,230,206		1,585,423
Acquired Eurobank		6,923		12,758	19.29%	21.74%		144,001		235,375
Total loans		79,675		90,504	7.10%	7.65%		4,503,777		4,748,145
Total interest earning assets		87,908		99,413	5.57%	5.94%		6,328,161		6,708,519

Interest-bearing liabilities:
Deposits:
NOW Accounts	$	1,518	$	1,073	0.51%	0.38%	$	1,195,895	$	1,144,931
Savings and money market		1,308		1,662	0.48%	0.51%		1,103,808		1,300,001
Individual retirement accounts		464		600	0.69%	0.85%		269,417		283,587
Retail certificates of deposits		1,474		1,326	1.26%	1.31%		468,750		405,302
Total core deposits		4,764		4,661	0.63%	0.60%		3,037,870		3,133,821
Institutional deposits		620		698	1.02%	1.00%		243,592		280,930
Brokered deposits		1,816		1,085	1.19%	0.76%		612,137		571,950
Total wholesale deposits		2,436		1,783	1.14%	0.84%		855,729		852,880
		7,200		6,444	0.74%	0.65%		3,893,599		3,986,701
Non-interest bearing deposits		-		-	0.00%	0.00%		810,177	$	773,479
Deposits fair value premium amortization		(91)		(132)	0.00%	0.00%		-		-
Core deposit intangible amortization		258		292	0.00%	0.00%		-		-
Total deposits		7,367		6,604	0.63%	0.56%		4,703,776		4,760,180
Borrowings:
Securities sold under agreements to repurchase		4,258		7,394	2.72%	2.91%		627,693		1,020,077
Advances from FHLB and other borrowings		2,098		2,248	2.65%	2.62%		317,191		344,088
Subordinated capital notes		873		875	3.40%	3.44%		102,869		101,938
Total borrowings		7,229		10,517	2.77%	2.88%		1,047,753		1,466,103
Total interest bearing liabilities		14,596		17,121	1.02%	1.10%		5,751,529		6,226,283
Net interest income / spread	$	73,312	$	82,292	4.55%	4.84%
Interest rate margin					4.65%	4.92%
Excess of average interest-earning assets over     average interest-bearing liabilities							$	576,632	$	482,236
Average interest-earning assets to average     interest-bearing liabilities ratio								110.03%		107.75%

89

B - CHANGES IN NET INTEREST INCOME DUE TO:
	Volume		Rate		Total
	(In thousands)
Interest Income:
Investments	$	(618)	$	(58)	$	(676)
Loans		(9,404)		(1,424)		(10,828)
Total interest income		(10,022)		(1,482)		(11,504)
Interest Expense:
Deposits		(78)		840		762
Repurchase agreements		(2,844)		(292)		(3,136)
Other borrowings		(182)		30		(152)
Total interest  expense		(3,104)		578		(2,526)
Net Interest Income	$	(6,918)	$	(2,060)	$	(8,978)
	Interest					Average rate		Average balance
	June		June			June	June	June		June
	2016		2015			2016	2015	2016		2015
	(Dollars in thousands)
C - TAX EQUIVALENT SPREAD
(GAAP to Non-GAAP)
Interest-earning assets (GAAP)	$	87,908	$	99,413		5.57%	5.94%	$	6,328,161	$	6,708,519
Tax equivalent adjustment		1,422		3,811		0.09%	0.23%		-		-
Interest-earning assets - tax equivalent		89,330		103,224		5.66%	6.18%		6,328,161		6,708,519
Interest-bearing liabilities (GAAP)		14,596		17,121		1.02%	1.10%		5,751,529		6,226,283
Tax equivalent net interest income / spread		74,734		86,103		4.64%	5.08%		576,632		482,236
Tax equivalent interest rate margin						4.74%	5.15%

90

TABLE 1 - YEAR-TO-DATE ANALYSIS OF NET INTEREST INCOME AND CHANGES DUE TO VOLUME/RATE
FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015
	Interest				Average rate		Average balance
	June		June		June	June	June		June
	2016		2015		2016	2015	2016		2015
	(Dollars in thousands)
A - NORMAL SPREAD
Interest-earning assets:
Investments:
Investment securities	$	17,129	$	17,782	2.49%	2.54%	$	1,380,798	$	1,411,107
Interest bearing cash and money market investments		1,258		645	0.50%	0.25%		507,817		523,649
Total investments		18,387		18,427	1.95%	1.92%		1,888,615		1,934,756
Non-acquired loans
Mortgage		19,456		19,908	5.20%	5.11%		749,904		785,029
Commercial		31,238		31,329	4.38%	4.85%		1,429,638		1,301,367
Consumer		12,734		9,538	10.63%	10.28%		240,251		187,049
Auto and leasing		33,595		29,747	9.69%	9.89%		695,071		606,819
Total non-acquired loans		97,023		90,522	6.25%	6.34%		3,114,864		2,880,264
Acquired loans:
Acquired BBVAPR
Mortgage		16,601		17,800	5.57%	5.59%		597,212		642,063
Commercial		14,268		26,342	8.73%	10.34%		327,810		513,950
Consumer		6,276		6,634	18.20%	15.64%		69,164		85,541
Auto		12,175		18,426	11.52%	8.65%		211,986		429,619
Total acquired BBVAPR loans		49,320		69,202	8.20%	8.35%		1,206,172		1,671,173
Acquired Eurobank		14,484		28,263	20.37%	22.35%		142,578		255,053
Total loans		160,827		187,987	7.23%	7.89%		4,463,613		4,806,490
Total interest earning assets		179,214		206,414	5.66%	6.17%		6,352,228		6,741,246

Interest-bearing liabilities:
Deposits:
NOW Accounts		2,600		2,354	0.44%	0.39%		1,173,975		1,202,621
Savings and money market		2,706		3,396	0.49%	0.52%		1,109,680		1,307,141
Individual retirement accounts		966		1,371	0.72%	0.95%		268,238		289,877
Retail certificates of deposits		2,813		2,733	1.27%	1.32%		443,371		416,608
Total core deposits		9,085		9,854	0.61%	0.61%		2,995,264		3,216,247
Institutional deposits		1,274		1,497	1.00%	1.11%		256,699		272,991
Brokered deposits		3,804		2,251	1.13%	0.77%		673,231		586,986
Total wholesale deposits		5,078		3,748	1.10%	0.87%		929,930		859,977
		14,163		13,602	0.72%	0.67%		3,925,194		4,076,224
Non-interest bearing deposits		-		-	0.00%	0.00%		792,564		762,122
Deposits fair value premium amortization		(189)		(479)	0.00%	0.00%		-		-
Core deposit intangible amortization		517		585	0.00%	0.00%		-		-
Total deposits		14,491		13,708	0.62%	0.57%		4,717,758		4,838,346
Borrowings:
Securities sold under agreements to repurchase		10,358		14,558	2.91%	3.00%		713,653		979,950
Advances from FHLB and other borrowings		4,337		4,483	2.66%	2.65%		327,278		340,709
Subordinated capital notes		1,741		1,738	3.40%	3.44%		102,782		101,808
Total borrowings		16,436		20,779	2.88%	2.95%		1,143,713		1,422,467
Total interest bearing liabilities		30,927		34,487	1.06%	1.11%		5,861,471		6,260,813
Net interest income / spread	$	148,287	$	171,927	4.60%	5.06%
Interest rate margin					4.68%	5.14%
Excess of average interest-earning assets     over average interest-bearing liabilities							$	490,758	$	480,434
Average interest-earning assets to average     interest-bearing liabilities ratio								108.37%		107.67%

91

B - CHANGES IN NET INTEREST INCOME DUE TO:
	Volume		Rate		Total
	(In thousands)
Interest Income:
Investments	$	(439)	$	399	$	(40)
Loans		(20,548)		(6,610)		(27,158)
Total interest income		(20,987)		(6,211)		(27,198)
Interest Expense:
Deposits		(342)		1,125		783
Repurchase agreements		(3,956)		(246)		(4,202)
Other borrowings		(175)		35		(140)
Total interest  expense		(4,473)		914		(3,559)
Net Interest Income	$	(16,514)	$	(7,125)	$	(23,639)
	Interest					Average rate		Average balance
	June		June			June	June	June		June
	2016		2015			2016	2015	2016		2015
	(Dollars in thousands)
C - TAX EQUIVALENT SPREAD
(Non-GAAP to GAAP)
Interest-earning assets (GAAP)	$	179,214	$	206,414		5.66%	6.17%	$	6,352,229	$	6,741,247
Tax equivalent adjustment		2,588		20,756		0.08%	0.62%		-		-
Interest-earning assets - tax equivalent		181,802		227,170		5.74%	6.80%		6,352,229		6,741,247
Interest-bearing liabilities (GAAP)		30,927		34,487		1.06%	1.11%		5,861,471		6,260,813
Tax equivalent net interest income / spread		150,875		192,683		4.68%	5.69%		490,758		480,434
Tax equivalent interest rate margin						4.76%	5.76%

92

Net Interest Income

Net interest income is a function of the difference between rates earned on the Company’s interest-earning assets and rates paid on its interest-bearing liabilities (interest rate spread) and the relative amounts of its interest earning assets and interest-bearing liabilities (interest rate margin). The Company constantly monitors the composition and re-pricing of its assets and liabilities to maintain its net interest income at adequate levels.

Comparison of quarters ended June 30, 2016 and 2015

Table 1 above shows the 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 ended June 30, 2016 and 2015.

Net interest income of $73.3 million decreased 10.9% compared with $82.3 million reported in the second quarter of 2015, primarily reflecting a decrease of 12.0% in interest income from loans.

Interest rate spread decreased 29 basis points from 4.84% to 4.55%. This decrease is mainly due to the net effect of a 37 basis points decrease in the average yield of interest-earning assets from 5.94% to 5.57%.

Interest income decreased to $87.9 million from $99.4 million in the second quarter of 2016. Such decrease reflects decreases of $10.0 million and $1.5 million in the volume and interest rate, respectively, of interest-earning assets. Interest income from investments decreased 7.6% to $8.2 million, reflecting decreases in volume and interest rate of $618 thousand and $58 thousand, respectively. Interest income from loans decreased 12.0% to $79.7 million, reflecting a decrease in volume and interest rate of $9.4 million and $1.4 million, respectively, primarily due to lower acquired loan balances and yields. Our loan portfolio is transitioning as originated loans with normal yields grow at a slower pace than higher-yielding acquired loans decrease due to repayments and maturities.

Originated loans interest income increased 11.0% to $49.1 million as average balances grew 6.9% and yields increased 23 basis points to 6.29%. Acquired BBVAPR loans interest income declined 29.4% to $23.7 million as average balances declined 22.4% and yields decreased 76 basis points to 7.71%. Acquired Eurobank loans interest income fell 45.9% to $6.9 million as average balances declined 38.8% and yields decreased 253 basis points to 19.29%.

The average balance of total interest-earning assets was $6.328 billion, a decrease of 5.7% from the same period in 2015. The decrease in average balance of interest-earning assets was mainly attributable to a decrease of 5.1% in average loans, and a decrease of 6.9% in average investments. The decrease in average loans is mostly related to the bulk sale on September 28, 2015, of a portion of covered non-performing commercial loans amounting to $197.1 million unpaid principal balance or UPB ($100.0 million carrying amount), the de-risking of the government exposures, and to the repayment and maturities of acquired loans.

Interest expense decreased 14.8% to $14.6 million, primarily because of a $3.1 million decrease in the volume of interest-bearing liabilities, partially offset by an increase of $578 thousand in interest rate. The decrease in interest-bearing liabilities is mostly due to the decrease in repurchase agreements volume of $2.8 million. The decrease in repurchase agreement volume reflects a partial unwinding of repurchase agreements during the first quarter of 2016 amounting to $268.0 million, which carried a cost of 4.78%. The cost of deposits before fair value amortization and core deposit intangible amortization increased 9 basis points to 0.74% for the second quarter of 2016, compared to 0.65% for the second quarter of 2015. The cost of borrowings decreased 11 basis points to 2.77% from 2.88%.

93

Comparison of six-month periods ended June 30, 2016 and 2015

Table 1 above also shows the 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 six-month periods ended June 30, 2016 and 2015. Net interest income of $148.3 million decreased 13.8% compared with $171.9 million reported during the same period in 2015, reflecting a decrease of 14.4% in interest income from loans.

Interest rate spread decreased 46 basis points from 5.06% to 4.60%. This decrease is mainly due to the net effect of a 51 basis point decrease in the average yield of interest-earning assets from 6.17% to 5.66%.

Interest income decreased to $179.2 million from $206.4 million in the same period in 2015. Such decrease reflects decreases of $21.0 million and $6.2 million in the volume and interest rate, respectively, of interest-earning assets. Interest income from loans decreased 14.4% to $160.8 million, reflecting a decrease in volume and interest rate of $20.5 million and $6.6 million, respectively, primarily due to lower acquired loan balances and yields. Our loan portfolio is transitioning as originated loans with normal yields grow at a slower pace than higher-yielding acquired loans decrease due to repayments and maturities.

Originated loans interest income increased 7.2% to $97.0 million as average balances grew 8.1% and yields decreased 9 basis points to 6.25%. During the first quarter of 2015, the revolving line of credit to PREPA was classified as non-accrual. Starting with the second quarter of 2015, quarterly interest payments of $3.6 million have been applied to principal.

Acquired BBVAPR loans interest income declined 28.7% to $49.3 million as average balances declined 27.8% and yields decreased 15 basis points to 8.20%. Acquired Eurobank loans interest income fell 48.8% to $14.5 million as average balances declined 44.1% and yields decreased 201 basis points to 20.37%. Interest income from investments remained at $18.4 million, reflecting a decrease in volume of $439 thousand, partially offset by an increase of $399 thousand in interest rate.The average balance of total interest-earning assets was $6.352 billion, a decrease of 5.8% from the same period in 2015. The decrease in average balance of interest-earning assets was mainly attributable to a decrease of 5.1% in average loans. The decrease in average loans is mostly related to the bulk sale on September 28, 2015, of a portion of covered non-performing commercial loans amounting to $197.1 million unpaid principal balance or UPB ($100.0 million carrying amount).

Interest expense decreased 10.3% to $30.9 million, primarily because of a $4.5 million decrease in the volume of interest-bearing liabilities and an increase of $914 thousand in deposit interest rate. The decrease in interest-bearing liabilities is mostly due to the decrease in repurchase agreements volume of $4.0 million and a decrease in deposit volume of $342 thousand which was offset by an increase in deposit interest rate of $1.1 million. The decrease in repurchase agreement volume reflects a partial unwinding of repurchase agreements during the first quarter of 2016 amounting to $268.0 million, which carried a cost of 4.78%. The cost of deposits before fair value amortization and core deposit intangible amortization slightly increased 5 basis point to 0.72%, compared to 0.67% for the same period in 2015. The cost of borrowings decreased 7 basis points to 2.88% from 2.95%.

94

TABLE 2 - NON-INTEREST INCOME SUMMARY
	Quarter Ended June 30,					Six-Month Period Ended June 30,
	2016		2015		Variance	2016		2015		Variance
	(Dollars in thousands)
Banking service revenue	$	10,219	$	10,212	0.1%	$	20,337	$	20,417	-0.4%
Wealth management revenue		7,041		7,285	-3.3%		13,193		14,440	-8.6%
Mortgage banking activities		1,024		1,862	-45.0%		1,879		3,725	-49.6%
Total banking and financial service revenue		18,284		19,359	-5.6%		35,409		38,582	-8.2%
FDIC shared-loss expense, net		(3,420)		(23,245)	85.3%		(7,449)		(36,329)	79.5%
Net gain (loss) on:
Sale of securities available for sale		211		-	100.0%		12,207		2,572	374.6%
Derivatives		(10)		77	-113.0%		(13)		(13)	0.0%
Early extinguishment of debt		-		-	0.0%		(12,000)		-	-100.0%
Other non-interest income (loss)		90		(847)	110.6%		504		(2,587)	119.5%
		(3,129)		(24,015)	87.0%		(6,751)		(36,357)	81.4%
Total non-interest income (loss), net	$	15,155	$	(4,656)	425.5%	$	28,658	$	2,225	1188.0%

Non-Interest Income, net

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, trading and other transactions.

Comparison of quarters ended June 30, 2016 and 2015

As shown in Table 2 above, the Company recorded non-interest income, net, in the amount of $15.2 million, compared to a $4.7 million non-interest loss for the same period in 2015, an increase of  $19.8 million.

Banking service revenue, which consists primarily of fees generated by deposit accounts, electronic banking services, and customer services, remained at $10.2 million, as compared to the same period in 2015. Electronic banking fees increased from higher transactions in debit cards and point-of-sale (POS) as portfolio and merchant amounts increased, offset by lower overdraft fees, mostly in commercial checking accounts, and a decrease in international service fees.

Wealth management revenue, which consists of commissions and fees from fiduciary activities, and securities brokerage and insurance activities, decreased 3.3% to $7.0 million, compared to $7.3 million for the same period in 2015. Such decrease reflects a reduction in some securities brokerage activities and a reduction in fees from the IRA portfolio. Client trading volumes in our broker-dealer subsidiary continued to fall due to general investor uncertainty in the Puerto Rico market.

Income generated from mortgage banking activities decreased 45.0% to $1.0 million, compared to $1.9 million for the same period in 2015. The decrease in mortgage banking activities was mostly due to a decrease in servicing income of $1.1 million, as the Company sold part of its mortgage servicing asset during the second quarter of 2015. In addition, mortgage banking activities were affected by foregone gains on sales as a result of the Company retaining securitized GNMA pools, more than offset by a decrease in losses from repurchased loans.

The net FDIC shared-loss expense decreased to $3.4 million as compared to $23.2 million for the second quarter of 2015, primarily from the expiration of the FDIC commercial loss share coverage at June 30, 2015. The decrease is also related to 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).

95

Other non-interest income increased $937 thousand, as the second quarter of 2015 included the recognition of an $835 thousand loss in the valuation of the mortgage servicing asset sold during the period.

Comparison of six-month periods ended June 30, 2016 and 2015

The Company recorded non-interest income, net in the amount of $28.7 million, compared to $2.2 million for the same period in 2015, an increase of 1,188.0%, or $26.4 million.

Banking service revenue, which consists primarily of fees generated by deposit accounts, electronic banking services, and customer services, slightly decreased 0.4% to $20.3 million from $20.4 million for the same period in 2015.

Wealth management revenue, which consists of commissions and fees from fiduciary activities, and securities brokerage and insurance activities, decreased 8.6% to $13.2 million, compared to $14.4 million for the same period in 2015. Such decrease reflects a reduction in some securities brokerage activities and a reduction in fees from the IRA portfolio.

Income generated from mortgage banking activities decreased 49.6% to $1.9 million, compared to $3.7 million for the same period in 2015. The decrease in mortgage banking activities was mostly due to a decrease in servicing income of $1.6 million, as the Company sold part of its mortgage servicing asset during the second quarter of 2015. In addition, mortgage banking activities were affected by foregone gains on sales, which decreased $1.4 million, as a result of the Company retaining securitized GNMA pools,  partially offset by a decrease of $1.1 million in losses from repurchased loans.

The net FDIC shared-loss expense decreased to $7.4 million as compared to $36.3 million for the same period in 2015, primarily from the expiration of the FDIC commercial loss share coverage at June 30, 2015. The decrease is also related to 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 six-month period ended June 30, 2016, the Company capitalized on favorable market conditions to partially unwind a high-rate repurchase agreement amounting to $268.0 million at a cost of $12 million, included as a loss on early extinguishment of debt in the unaudited statements of operations. In addition, the Company sold $277.2 million in mortgage backed securities and $11.1 million in Puerto Rico government bonds. As a result, the Company recorded a net gain on sale of securities of $12.2 million, compared to $2.6 million for the same period in 2015.

Other non-interest income increased $3.1 million, as the same period of 2015 included the recognition of a $2.7 million loss in the sale  of the mortgage servicing asset.

96

TABLE 3 - NON-INTEREST EXPENSES SUMMARY
	Quarter Ended June 30,					Six-Month Period Ended June 30,
	2016		2015		Variance %	2016		2015		Variance %
	(Dollars in thousands)
Compensation and employee benefits	$	18,531	$	19,260	-3.8%	$	38,815	$	39,440	-1.6%
Professional and service fees		3,511		4,143	-15.3%		7,138		8,324	-14.2%
Occupancy and equipment		8,107		8,883	-8.7%		15,929		17,519	-9.1%
Insurance		3,155		2,251	40.2%		6,305		4,204	50.0%
Electronic banking charges		4,947		5,851	-15.5%		10,536		11,218	-6.1%
Information technology expenses		1,606		1,543	4.1%		3,262		2,997	8.8%
Advertising, business promotion, and strategic initiatives		1,343		1,558	-13.8%		2,786		3,186	-12.6%
Foreclosure, repossession and other real estate expenses		5,164		10,337	-50.0%		7,971		15,783	-49.5%
Loan servicing and clearing expenses		1,926		2,594	-25.8%		4,007		4,947	-19.0%
Taxes, other than payroll and income taxes		2,330		2,703	-13.8%		5,001		4,182	19.6%
Communication		581		770	-24.5%		1,400		1,460	-4.1%
Printing, postage, stationery and supplies		600		582	3.1%		1,325		1,219	8.7%
Director and investor relations		301		289	4.2%		579		583	-0.7%
Other operating expenses		1,723		3,673	-53.1%		3,628		5,707	-36.4%
Total non-interest expenses	$	53,825	$	64,437	-16.5%	$	108,682	$	120,769	-10.0%
Relevant ratios and data:
Efficiency ratio		58.76%		47.89%			59.16%		57.37%
Compensation and benefits to         non-interest expense		34.43%		29.89%			35.71%		32.66%
Compensation to average total assets owned		1.09%		1.05%			1.13%		1.07%
Average number of employees		1,451		1,509			1,460		1,509
Average compensation per employee	$	12.8	$	12.8		$	26.6	$	26.1
Average loan balance per average employee	$	3,104	$	3,147		$	3,057	$	3,185

97

Non-Interest Expenses

Comparison of quarters ended June 30, 2016 and 2015

Non-interest expense for the second quarter of 2016 was $53.8 million, representing a decrease of 16.5% compared to $64.4 million in the same quarter of the previous year.

Foreclosure, repossession and other real estate expenses decreased 50.0% to $5.2 million, as compared to $10.3 million in the same period for the previous year, primarily as a result of the bulk sale of non-performing assets in the third quarter of 2015. The second quarter of 2015 included a $2.9 million increase in other real estate owned and other mortgage properties markdowns, as part of 2015 de-risking efforts. In addition, the second quarter of 2015 included a loss of $1.3 million on the sale of repossessed assets, contrasting with 2016 which included a gain of $512 thousand, mainly due to efficiencies in the selling process.

Electronic banking charges decreased $904 thousand to $4.9 million mostly due the termination of a profit sharing agreement with a vendor which resulted in a reduction of $300 thousand of the aforementioned expenses, and also affected by a reduction of $418 thousand in debit card billing fees mainly due to a decrease in service charge from Master Card.

Occupancy and equipment decreased 8.7%, or $776 thousand, to $8.1 million, reflecting a reduction of $678 thousand in depreciation of leasehold improvements, as a result of the closing of seven branches during the year 2015.

Compensation and employee benefits decreased 3.8%, or $729 thousand, to $18.5 million, mostly due to the decrease in average employees.

Other operating expenses for the second quarter of 2015 included a $2.1 million payment required by the broker-dealer's regulator.

The decreases in the foregoing non-interest expenses were partially offset by increase in insurance expense of 40.2% to $3.2 million, as compared to $2.3 million in the same period of 2015, mainly due to an increase in the FDIC Savings Association Insurance Fund (“SAIF”) premium.

The efficiency ratio was 58.76% compared to 47.89% for the same period in 2015. The efficiency ratio measures how much of the Company’s revenues 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, 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 (losses) that are excluded from the efficiency ratio computation for the quarter ended June 30, 2016 amounted to losses of $3.1 million, compared to losses of $24.0 million for the quarter ended June 30, 2015.

Comparison of six-month periods ended June 30, 2016 and 2015

Non-interest expense for the six-month period ended June 30, 2016 was $108.7 million, representing a decrease of 10.0% compared to $120.8 million in the same period of the previous year.

Foreclosure, repossession and other real estate expenses decreased 49.5% to $8.0 million, as compared to $15.8 million in the same period for the previous year, primarily as a result of the bulk sale of non-performing assets in the third quarter of 2015. The six-month period ended June 30, 2015 included a $3.0 million increase in other real estate owned and other mortgage properties markdowns, as part of 2015 de-risking efforts. In addition, the six-month period ended June 30, 2015 included a loss of $3.4 million on the sale of repossessed assets, contrasting with 2016 which included a gain of $1.2 million, mainly due to efficiencies in the selling process.

Occupancy and equipment decreased 9.1% to $15.9 million, reflecting decreases in rent and depreciation expenses from the closing of seven branches during the year 2015.

Professional and service fees decreased 14.2%, or $1.2 million, to $7.1 million, mostly due to lower legal expenses from strategic initiatives to reduce costs,  lower collection services due to in-house collection efforts, and lower consulting fees due to non-recurring expenses in 2015.

98

Other operating expenses for the six-month period ended June 30, 2015 included a $2.1 million payment required by the broker-dealer's regulator.

The decreases in the foregoing non-interest expenses were partially offset by increases in insurance expense and taxes, other than payroll and income taxes.

Insurance expense increased 50.0% to $6.3 million, as compared to $4.2 million in the same period of 2015, mainly due to an increase in the SAIF premium.

Taxes, other than payroll and income taxes increased 19.6% to $5.0 million from $4.2 million for the same period in 2015. The six-month period ended June 30, 2015 included a $1.2 million adjustment from the local gross receipt tax that was repealed for taxable years commencing after December 31, 2014, which reduced the expense in such period.

The efficiency ratio was 59.16% compared to 57.37% for the same period in 2015. The efficiency ratio measures how much of the Company’s revenues 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 los1es, 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 for the six-month period ended June 30, 2016 amounted to losses of $6.8 million, compared to losses of $36.4 million for the six-month period ended June 30, 2015.

     Provision for Loan and Lease Losses

Comparison of quarters ended June 30, 2016 and 2015

Provision for loan and lease losses decreased 7.0%, or $1.1 million, to $14.4 million. 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 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 originated and other loan and lease losses decreased 9.1%, or $901 thousand, to $9.1 million from $10.0 million when compared with the same period in 2015. Commercial provision decreased $2.4 million to a recapture of $457 thousand, compared to $1.9 million provision for the same quarter in 2015. Mortgage provision decreased $188 thousand to $1.1 million, compared to $1.3 million for the same quarter in 2015. Decreases were partially offset by an increase in auto and leasing provision of $1.9 million to $5.4 million, from $3.5 million for the same quarter of 2015. Consumer provision increased $57 thousand to $3.0 million, compared with the same period in 2015.

Total charge-offs on originated and other loans increased 10.9% to $13.1 million, as compared to $11.8 million for the same quarter in 2015. Consumer charge-offs increased $502 thousand to $2.8 million. Mortgage charge-offs remained at $1.4 million for both quarters. Auto and leasing charge-offs increased $438 thousand to $8.1 million. Commercial charge-offs increased $336 thousand to $833 thousand. Total recoveries on originated and other loans decreased from $4.1 million to $3.6 million. As a result, the recoveries to charge-offs ratio decreased from 34.68% to 27.74%. Net credit losses increased $1.8 million to $9.5 million, representing 1.21% of average originated and other loans outstanding versus 1.06% for the same quarter in 2015, annualized.

Provision for acquired loan and lease losses decreased 3.5%, or $193 thousand, to $5.4 million from $5.6 million when compared with the same period in 2015. Provision for acquired BBVAPR loan and lease losses decreased $1.3 million to $4.4 million from $5.7 million, when compared to the same period in 2015. Provision for acquired Eurobank loan and lease losses increased $1.1 million from a recapture of $105 thousand to a provision of $1.0 million.

99

Comparison of six-month periods ended June 30, 2016 and 2015

Provision for loan and lease losses decreased 51.1%, or $29.5 million, to $28.2 million as a result of a $24.0 million provision for loan and lease losses related to the PREPA line of credit recorded during the first quarter of 2015.

Based on an analysis of the credit quality and the composition of the Company’s loan portfolio, management determined that the provision for the period 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 originated and other loan and lease losses decreased 55.1%, or $24.2 million, to $19.7 million from $43.9 million when compared with the same period in 2015. During the first quarter of 2015, the Company changed to non-accrual status the PREPA line of credit and recorded a $24.0 million provision for loan and lease losses related thereto. During the fourth quarter of 2015, the Company recorded an additional $29.3 million provision for loan and lease losses on PREPA. Management determined that no additional provision was required on the PREPA line of credit during the six-month period ended June 30, 2016.

Total charge-offs on originated and other loans increased 10.1% to $26.5 million, as compared to $24.0 million for the same period in 2015. Consumer charge-offs increased $1.2 million to $5.1 million. Mortgage charge-offs increased $266 thousand to $3.0 million. Auto and leasing charge-offs increased $664 thousand to $16.5 million. Commercial charge-offs increased $355 thousand to $1.8 million. Total recoveries on originated and other loans decreased from $7.7 million to $7.0 million. As a result, the recoveries to charge-offs ratio decreased from 32.14% to 26.26%. Net credit losses increased $3.2 million to $19.5 million, representing 1.25% of average originated and other loans outstanding versus 1.13% for the same period in 2015, annualized.

Provision for acquired loan and lease losses decreased 38.5%, or $5.3 million, to $8.5 million from $13.9 million when compared with the same period in 2015. Provision for acquired BBVAPR loan and lease losses decreased $2.5 million to $6.7 million from $9.2 million, when compared to the same period in 2015. Provision for acquired Eurobank loan and lease losses decreased $2.9 million from $4.7 million to $1.8 million. Such decrease reflects an additional provision of $3.5 million in the first quarter of 2015 related to the commercial shared-loss coverage with the FDIC that ended on June 30, 2015.

Income Taxes

Comparison of quarters ended June 30, 2016 and 2015

Income tax expense was $5.9 million, compared to $769 thousand for the same period in 2015. Income tax expense reflects the net income before income taxes of $20.2 million for the second quarter of 2016, compared to a net loss before income taxes of $2.3 million for the year-ago quarter.

Comparison of six-month periods ended June 30, 2016 and 2015

Income tax expense was $11.5 million, compared to $1.7 million for the same period in 2015. Income tax expense reflects the net income before income taxes of $40.0 million for the six-month period of 2016, compared to a net loss before income taxes of $4.4 million for the year-ago period.

100

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.  Following are the results of operations and the selected financial information by operating segment for the quarters and six-month periods ended June 30, 2016 and 2015.

	Quarter Ended June 30, 2016
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	79,675	$	16	$	8,217	$	87,908	$	-	$	87,908
Interest expense		(7,300)		-		(7,296)		(14,596)		-		(14,596)
Net interest income		72,375		16		921		73,312		-		73,312
Provision for loan and lease losses		(14,445)		-		-		(14,445)		-		(14,445)
Non-interest income		8,214		6,910		31		15,155		-		15,155
Non-interest expenses		(47,098)		(4,908)		(1,820)		(53,826)		-		(53,825)
Intersegment revenue		389		-		49		438		(438)		-
Intersegment expenses		(49)		(286)		(103)		(438)		438		-
Income before income taxes	$	19,386	$	1,732	$	(922)	$	20,196	$	-	$	20,197
Total assets	$	5,829,987	$	19,054	$	1,800,838	$	7,649,879	$	(937,283)	$	6,712,596
	Quarter Ended June 30, 2015
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	90,504	$	24	$	8,885	$	99,413	$	-	$	99,413
Interest expense		(7,110)		-		(10,011)		(17,121)		-		(17,121)
Net interest income		83,394		24		(1,126)		82,292		-		82,292
Provision for loan and  lease losses		(15,539)		-		-		(15,539)		-		(15,539)
Non-interest (loss) income		(11,713)		6,893		164		(4,656)		-		(4,656)
Non-interest expenses		(56,844)		(6,733)		(860)		(64,437)		-		(64,437)
Intersegment revenue		163		-		61		224		(224)		-
Intersegment expenses		(61)		(87)		(76)		(224)		224		-
(Loss) income before income taxes	$	(600)	$	97	$	(1,837)	$	(2,340)	$	-	$	(2,340)
Total assets	$	6,153,663	$	21,157	$	2,136,293	$	8,311,113	$	(912,788)	$	7,398,325

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	Six-Month Period Ended June 30, 2016
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	160,827	$	34	$	18,353	$	179,214	$	-	$	179,214
Interest expense		(14,107)		-		(16,820)		(30,927)		-		(30,927)
Net interest income		146,720		34		1,533		148,287		-		148,287
Provision for loan and lease losses		(28,234)		-		-		(28,234)		-		(28,234)
Non-interest income (loss)		16,009		12,930		(281)		28,658		-		28,658
Non-interest expenses		(97,786)		(7,853)		(3,043)		(108,682)		-		(108,682)
Intersegment revenue		787		-		149		936		(936)		-
Intersegment expenses		(149)		(577)		(210)		(936)		936		-
Income (loss) before income taxes	$	37,347	$	4,534	$	(1,852)	$	40,029	$	-	$	40,029
	Six-Month Period Ended June 30, 2015
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	187,986	$	47	$	18,381	$	206,414	$	-	$	206,414
Interest expense		(14,564)		-		(19,923)		(34,487)		-		(34,487)
Net interest income		173,422		47		(1,542)		171,927		-		171,927
Provision for loan and  lease losses		(57,732)		-		-		(57,732)		-		(57,732)
Non-interest income (loss)		(13,962)		13,903		2,284		2,225		-		2,225
Non-interest expenses		(106,156)		(11,524)		(3,089)		(120,769)		-		(120,769)
Intersegment revenue		707		-		160		866		(866)		-
Intersegment expenses		(159)		(518)		(189)		(866)		866		-
(Loss) income before income taxes	$	(3,880)	$	1,908	$	(2,376)	$	(4,349)	$	-	$	(4,349)

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Comparison of quarters ended June 30, 2016 and 2015

Banking

Net interest income of the Company’s Banking segment decreased $11.0 million for 2016, or 13.2%, reflecting a decrease in interest income from loans of $10.8 million, or 12.0%, to $79.7 million. Such decrease is comprised of $9.4 million and $1.4 million in volume and  interest rate, respectively, of loans, primarily due to lower acquired loan balances and yields. Our loan portfolio is transitioning as originated loans with normal yields grow at a slower pace than higher-yielding acquired loans decrease due to repayments and maturities.

Originated loan interest income increased 11.0% to $49.1 million as average balances grew 6.9% and yields increased 23 basis points to 6.29%. Acquired BBVAPR loans interest income declined 29.4% to $23.7 million as average balances declined 22.4% and yields decreased 76 basis points to 7.71%. Acquired Eurobank loans interest income fell 45.9% to $6.9 million as average balances declined 38.8% and yields decreased 253 basis points to 19.29%. The average balance of loans was $4.504 billion, a decrease of 5.1% from the same period in 2015,  mostly related to the bulk sale on September 28, 2015, of a portion of covered non-performing commercial loans amounting to $197.1 million unpaid principal balance or UPB ($100.0 million carrying amount), the de-risking of the government exposures, and to the repayment and maturities of acquired loans.

Provision for loan and lease losses decreased 7.0% to $14.4 million. Provision for originated and other loan and lease losses decreased 9.1%, or $901 thousand, to $9.1 million from $10.0 million when compared with the same period in 2015. Commercial provision decreased $2.4 million to a recapture of $457 thousand, compared to $1.9 million provision for the same quarter in 2015. Mortgage provision decreased $188 thousand to $1.1 million, compared to $1.3 million for the same quarter in 2015. Decreases were partially offset by an increase in auto and leasing provision of $1.9 million to $5.4 million, from $3.5 million for the same quarter of 2015. Consumer provision increased $57 thousand to $3.0 million, compared with the same period in 2015. Provision for acquired loan and lease losses decreased 3.5%, or $193 thousand, to $5.4 million from $5.6 million when compared with the same period in 2015. Provision for acquired BBVAPR loan and lease losses decreased $1.3 million to $4.4 million from $5.7 million, when compared to the same period in 2015. Provision for acquired Eurobank loan and lease losses increased $1.1 million from a recapture of $105 thousand to a provision of $1.0 million.

Non-interest income, net, is affected by the level of mortgage banking activities and 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. Non-interest income increased $19.9 million to $8.2 million, from a loss of $11.7 million during the same quarter in 2015, mostly due to the decrease in FDIC shared-loss expense. The net FDIC shared-loss expense decreased to $3.4 million as compared to $23.2 million for the second quarter of 2015, primarily from the expiration of the FDIC commercial loss share coverage at June 30, 2015.

Non-interest expense of $47.1 million decreased 17.1% when compared to the second quarter of 2015, primarily reflecting a decrease in foreclosure, repossession and other real estate expenses of 50.0% to $5.2 million, as compared to $10.3 million in the same period for the previous year. The second quarter of 2015 included a $2.9 million increase in other real estate owned and other mortgage properties markdowns, as part of 2015 de-risking efforts. In addition, the second quarter of 2015 included a loss of $1.3 million on the sale of repossessed assets, contrasting with 2016 which included a gain of $512 thousand, mainly due to efficiencies in the selling process. In addition, electronic banking charges decreased $904 thousand to $4.9 million mostly due the termination of a profit sharing agreement with a vendor which resulted in a reduction of $300 thousand of the aforementioned expenses, and also affected by a reduction of $418 thousand in debit card billing fees mainly due to a decrease in service charge from Master Card.

103

Wealth Management

Wealth management revenue, which consists of commissions and fees from fiduciary activities, and securities brokerage and insurance activities, remained at $6.9 million for both quarters.

Non-interest expenses decreased by 27.1% to $4.9 million, due to a payment of $2.1 million required by the broker-dealer's regulator during the second quarter of 2015.

Treasury

Treasury revenue, which consists of the Company's asset/liability management activities, such as purchase and sale of investment securities, interest rate risk management, derivatives, and borrowings, increased to a loss of $920 thousand, compared to a loss of $1.8 million in the second quarter of 2015. This increase is mostly due to a decrease of 27.1%, or $2.7 million, in interest expense on borrowings, partially offset by a decrease of $666 thousand, or 7.5%, in interest income from investment securities and by an increase of $1.0 million in non-interest expenses, due to an increase in the SAIF premium to brokered deposits.

The decrease in interest income from investments reflects decreases in volume and interest rate of $618 thousand and $58 thousand, respectively. The decrease in interest expense on borrowings is mostly due to the decrease in repurchase agreements volume of $2.8 million. Both were affected by a partial unwinding of a high-rate repurchase agreements amounting to $268.0 million, which carried a cost of 4.78%, and a sale of $272.1 million mortgage backed securities and $11.1 million Puerto Rico government bonds during the first quarter of 2016.

Comparison of six-month periods ended June 30, 2016 and 2015

Banking

Net interest income of the Company’s Banking segment decreased $26.7 million for 2016, or 15.4%, reflecting a decrease in interest income from loans of $27.2 million, or 14.4%, to $160.8 million. Such decrease reflects decreases of $20.5 million and a $6.6 million in volume and  interest rate, respectively, of loans, primarily due to lower acquired loan balances and yields. Our loan portfolio is transitioning as originated loans with normal yields grow at a slower pace than higher-yielding acquired loans fall due to repayments and maturities.

Originated loans interest income increased 7.2% to $97.0 million as average balances grew 8.1% and yields decreased 9 basis points to 6.25%.Acquired BBVAPR loans interest income declined 28.7% to $49.3 million as average balances declined 27.8% and yields decreased 15 basis points to 8.20%. Acquired Eurobank loans interest income fell 48.8% to $14.5 million as average balances declined 44.1% and yields decreased 201 basis points to 20.37%. The average balance of loans was $4.464 billion, a decrease of 7.1% from the same period in 2015,  mostly related to the bulk sale on September 28, 2015, of a portion of covered non-performing commercial loans amounting to $197.1 million unpaid principal balance or UPB ($100.0 million carrying amount), the de-risking of the government exposures, and to the repayment and maturities of acquired loans.

Provision for loan and lease losses decreased 51.1%, or $29.5 million, to $28.2 million.  Provision for originated and other loan and lease losses decreased 55.1%, or $24.2 million, to $19.7 million when compared with the same period in 2015. During the first quarter of 2015, the Company changed to non-accrual status the PREPA line of credit and recorded a $24.0 million provision for loan and lease losses related thereto. Provision for acquired loan and lease losses decreased 38.5%, or $5.3 million, to $8.5 million from $13.9 million when compared with the same period in 2015. Provision for acquired BBVAPR loan and lease losses decreased $2.5 million to $6.7 million from $9.2 million, when compared to the same period in 2015. Provision for acquired Eurobank loan and lease losses decreased $2.9 million from $4.7 million to $1.8 million. Such decrease reflects an additional provision of $3.5 million in the first quarter of 2015 related to the commercial shared-loss coverage with the FDIC that ended on June 30, 2015.

Non-interest income, net, is affected by the level of mortgage banking activities and 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. Non-interest income increased $30.0 million to $16.0 million, from a loss of $14.0 million during the same period in 2015, mostly due to the decrease in FDIC shared-loss expense. The net FDIC shared-loss expense decreased to $7.4 million as compared to $36.3 million for the second quarter of 2015, primarily from the expiration of the FDIC commercial loss share coverage at June 30, 2015.

104

Non-interest expense of $97.8 million decreased 7.9% when compared to the same period in 2015, primarily reflecting a decrease in foreclosure, repossession and other real estate expenses of 49.5% to $8.0 million, as compared to $15.8 million in the same period for the previous year. The second quarter of 2015 included a $3.0 million increase in other real estate owned and other mortgage properties markdowns, as part of 2015 de-risking efforts. In addition, the second quarter of 2015 included a loss of $3.4 million on the sale of repossessed assets, contrasting with 2016 which included a gain of $1.2 million, mainly due to efficiencies in the selling process. In addition, professional and service fees decreased 14.2%, or $1.2 million, to $7.1 million, mostly due to lower legal expenses from strategic initiatives to reduce costs, lower collection services due to in-house collection efforts, and lower consulting fees due to non-recurrent expenses in 2015. These decreases were partially offset by an increase in insurance expense of 26.0% to $5.3 million, as compared to $4.2 million in the same period of 2015, mainly due to an increase in the SAIF premium.

Wealth Management

Wealth management revenue, which consists of commissions and fees from fiduciary activities, and securities brokerage and insurance activities, decreased 7% to $12.9 million. Such decrease reflects a reduction in some securities brokerage activities and a reduction in fees from the IRA portfolio.

Non-interest expenses decreased by 31.9% to $7.9 million, due to a payment of $2.1 million required by the broker-dealer's regulator during the second quarter of 2015.

Treasury

Treasury revenue, which consists of the Company's asset/liability management activities, such as purchase and sale of investment securities, interest rate risk management, derivatives, and borrowings, increased to a loss of $1.9 million, compared to a loss of $2.4 million in the second quarter of 2015. This increase is mostly due to a decrease of 15.6%, or $3.1 million, in interest expense on borrowings. These decreases were partially offset by a decrease of $2.6 million in non-interest income.

The decrease in interest expense on borrowings is mostly due to the decrease in repurchase agreements volume of $4.0 million, affected by a partial unwinding of a high-rate repurchase agreements amounting to $268.0 million, which carried a cost of 4.78% during the first quarter of 2016.

During the six-month period ended June 30, 2015, the Company sold $63.5 million mortgage-backed securities and recorded a net gain on sale of securities of $2.6 million. During the six-month period ended June 30, 2016, the Company capitalized on favorable market conditions to partially unwind a high-rate repurchase agreement amounting to $268.0 million, at a cost of $12.0 million, and sell $272.1 million in mortgage backed securities and $11.1 million in Puerto Rico government bonds, at a net gain on sale of securities of $12.0 million.

105

ANALYSIS OF FINANCIAL CONDITION

Assets Owned

At June 30, 2016, the Company’s total assets amounted to $6.713 billion representing a decrease of 5.4% when compared to $7.099 billion at December 31, 2015. This reduction is mainly due to a decrease in the investment portfolio. The investment portfolio decreased $296.0 million from $1.616 billion at December 31, 2015 to $1.320 billion, mainly from the sale of $277.2 million in mortgage backed securities and $11.1 million in Puerto Rico government bonds during the first half of 2016. As a result, at June 30, 2016, loans represented 77% of total interest-earning assets while investments represented 23%, compared to 73% and 27%, respectively, at December 31, 2015.

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 June 30, 2016, the Company’s loan portfolio decreased by 1.4% to $4.374 billion compared to $4.434 billion at December 31, 2015, primarily due to lower acquired loan balances. Our loan portfolio is transitioning as originated loans grow at a slower pace than acquired loans decrease, due to repayments and maturities. At June 30, 2016, the originated loan portfolio increased $86.1 million, or 2.8%, the acquired BBVAPR loan portfolio decreased $143.9 million, or 11.2%, and the acquired Eurobank loan portfolio decreased $7.3 million, or 5.0%, from December 31, 2015.

Financial Assets Managed

The Company’s financial assets 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 individual retirement accounts ("IRA"s) and manages 401(k) and Keogh retirement plans and custodian and corporate trust accounts, while the retirement plan administration subsidiary, OPC, manages private retirement plans. At June 30, 2016, total assets managed by the Company’s trust division and OPC amounted to $2.780 billion, compared to $2.691 billion at December 31, 2015. 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 management wrap-fee programs. At June 30, 2016, total assets gathered by Oriental Financial Services from its customer investment accounts increased to $2.387 billion, compared to $2.375 billion at December 31, 2015. Changes in trust and broker-dealer related assets primarily reflect changes in portfolio balances and differences in market values.

106

Goodwill

Goodwill recorded in connection with the BBVAPR Acquisition and the FDIC-assisted Eurobank acquisition is not amortized to expense, but is tested at least annually for impairment. A quantitative annual impairment test is not required if, based on a qualitative analysis, the Company determines that the existence of events and circumstances indicate that it is more likely than not that goodwill is not impaired. The Company completes its annual goodwill impairment test as of October 31 of each year.  The Company tests for impairment by first allocating its goodwill and other assets and liabilities, as necessary, to defined reporting units. A fair value is then determined for each reporting unit. If the fair values of the reporting units exceed their book values, no write-down of the recorded goodwill is necessary. If the fair values are less than the book values, an additional valuation procedure is necessary to assess the proper carrying value of the goodwill.

Reporting unit valuation is inherently subjective, with a number of factors based on assumptions and management judgments or estimates. Actual values may differ significantly from such estimates. Among these are future growth rates for the reporting units, selection of comparable market transactions, discount rates and earnings capitalization rates. Changes in assumptions and results due to economic conditions, industry factors, and reporting unit performance and cash flow projections could result in different assessments of the fair values of reporting units and could result in impairment charges. If an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount, an interim impairment test is required.   

Relevant events and circumstances for evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount may include macroeconomic conditions (such as a further deterioration of the Puerto Rico economy or the liquidity for Puerto Rico securities or loans secured by assets in Puerto Rico), adverse changes in legal factors or in the business climate, adverse actions by a regulator, unanticipated competition, the loss of key employees, or similar events. The Company’s loan portfolio, which is the largest component of its interest-earning assets, is concentrated in Puerto Rico and is directly affected by adverse local economic and fiscal conditions. Such conditions have generally affected the market demand for non-conforming loans secured by assets in Puerto Rico and, therefore, affect the valuation of the Company’s assets. 

As of June 30, 2016, the Company had $86.1 million of goodwill allocated as follows: $84.1 million to the Banking unit and $2.0 million to the Wealth Management unit. During the last quarter of 2015, based on its annual goodwill impairment test, the Company determined that the Banking unit failed step one of the two-step impairment test and that Wealth Management unit passed such step. As a result of step one, the Banking unit’s adjusted net book value exceed its fair value by approximately $263.1 million, or 29.6%. Accordingly, the Company proceeded to perform step two of the analysis. Based on the results of step two, the Company determined that the carrying value of the goodwill allocated to the Banking unit was not impaired as of the valuation date. During the six-month period ended June 30, 2016, the Company performed an assessment of events or circumstances that could trigger reductions in the book value of the goodwill. Based on this assessment, no events were identified that triggered changes in the book value of goodwill at June 30, 2016.

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TABLE 4 - ASSETS SUMMARY AND COMPOSITION
	June 30,		December 31,		Variance
	2016		2015		%
	(Dollars in thousands)
Investments:
FNMA and FHLMC certificates	$	1,027,355	$	1,354,802	-24.2%
Obligations of US government-sponsored agencies		4,502		5,093	-11.6%
US Treasury securities		25,015		25,032	-0.1%
CMOs issued by US government-sponsored agencies		120,475		135,073	-10.8%
GNMA certificates		114,278		58,495	95.4%
Puerto Rico government and public instrumentalities		5,848		13,731	-57.4%
FHLB stock		19,838		20,783	-4.5%
Other debt securities		2,228		2,572	-13.4%
Other investments		351		291	20.6%
Total investments		1,319,890		1,615,872	-18.3%
Loans		4,373,617		4,434,213	-1.4%
Total securities and loans		5,693,507		6,050,085	-5.9%
Other assets:
Cash and due from banks (including restricted cash)		514,338		535,359	-3.9%
Money market investments		5,740		4,699	22.2%
FDIC indemnification asset		18,426		22,599	-18.5%
Foreclosed real estate		51,220		58,176	-12.0%
Accrued interest receivable		20,009		20,637	-3.0%
Deferred tax asset, net		143,048		145,901	-2.0%
Premises and equipment, net		72,585		74,590	-2.7%
Servicing assets		7,932		7,455	6.4%
Derivative assets		1,926		3,025	-36.3%
Goodwill		86,069		86,069	0.0%
Other assets and customers' liability on acceptances		97,796		90,554	8.0%
Total other assets		1,019,089		1,049,064	-2.9%
Total assets	$	6,712,596	$	7,099,149	-5.4%
Investments portfolio composition:
FNMA and FHLMC certificates		77.9%		83.9%
Obligations of US government-sponsored agencies		0.3%		0.3%
US Treasury securities		1.9%		1.5%
CMOs issued by US government-sponsored agencies		9.1%		8.4%
GNMA certificates		8.7%		3.6%
Puerto Rico government and public instrumentalities		0.4%		0.8%
FHLB stock		1.5%		1.3%
Other debt securities and other investments		0.2%		0.2%
		100.0%		100.0%

108

TABLE 5 — LOANS RECEIVABLE COMPOSITION
		June 30,		December 31,	Variance
	2016		2015		%
	(In thousands)
Originated and other loans and leases held for investment:
Mortgage	$	741,917	$	757,828	-2.1%
Commercial		1,476,613		1,441,649	2.4%
Consumer		265,269		242,950	9.2%
Auto and leasing		712,268		669,163	6.4%
		3,196,067		3,111,590	2.7%
Allowance for loan and lease losses on originated and other loans and leases		(112,812)		(112,626)	-0.2%
		3,083,255		2,998,964	2.8%
Deferred loan costs, net		4,619		4,203	9.9%
Total originated and other loans loans held for investment, net		3,087,874		3,003,167	2.8%
Acquired loans:
Acquired BBVAPR loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		4,559		7,457	-38.9%
Consumer		35,194		38,385	-8.3%
Auto		77,118		106,911	-27.9%
		116,871		152,753	-23.5%
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-20		(4,487)		(5,542)	19.0%
		112,384		147,211	-23.7%
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy) (a)
Mortgage		591,029		608,294	-2.8%
Commercial		246,188		287,311	-14.3%
Construction		76,917		88,180	-12.8%
Consumer		7,331		11,843	-38.1%
Auto		117,038		153,592	-23.8%
		1,038,503		1,149,220	-9.6%
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-30 (b)		(22,801)		(25,785)	11.6%
		1,015,702		1,123,435	-9.6%
Total acquired BBVAPR loans, net		1,128,086		1,270,646	-11.2%
Acquired Eurobank loans: (a)
Loans secured by 1-4 family residential properties		76,777		92,273	-16.8%
Commercial and construction		83,377		142,377	-41.4%
Consumer		1,410		2,314	-39.1%
		161,564		236,964	-31.8%
Allowance for loan and lease losses on Eurobank loans (b)		(22,116)		(90,178)	75.5%
Total acquired Eurobank loans, net		139,448		146,786	-5.0%
Total acquired loans, net		1,267,534		1,417,432	-10.6%
Total held for investment, net		4,355,408		4,420,599	-1.5%
Mortgage loans held for sale		18,209		13,614	33.8%
Total loans, net	$	4,373,617	$	4,434,213	-1.4%
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

109

The Company’s loan portfolio is composed of two segments, loans initially accounted for under the amortized cost method (referred as "originated and other" loans) and loans acquired (referred as "acquired" loans). Acquired loans are further segregated between acquired BBVAPR loans and acquired Eurobank loans. Acquired Eurobank loans were purchased subject to loss-sharing agreements with the FDIC. The FDIC loss-sharing coverage, related to acquired Eurobank commercial loans expired on June 30, 2015. Notwithstanding the expiration of loss-share coverage of commercial loans, on July 2, 2015, the Company entered into an agreement with the FDIC pursuant to which the FDIC concurred with a potential sale of a pool of loss-share assets covered under the commercial loss-share agreement. Pursuant to such agreement, the FDIC agreed to pay up to $20 million in loss-share coverage with respect to the aggregate loss resulting from any portfolio sale within 120 days of the agreement. This sale was completed on September 28, 2015. The coverage for the single-family residential loans will expire on June 30, 2020. At June 30, 2016, the remaining covered loans amounting to $57.1 million, net carrying amount, are included as part of acquired Eurobank loans under the name "loans secured by 1-4 family residential properties." At December 31, 2015, covered loans amounted to $59.6 million, net carrying amount, and also included under the name "loans secured by 1-4 family residential properties." Covered loans are no longer a material amount. Therefore, the Company changed its loan disclosures during 2015.

As shown in Table 5 above, total loans, net, amounted to $4.374 billion at June 30, 2016 and $4.434 billion at December 31, 2015. The Company’s originated and other loans held-for-investment portfolio composition and trends were as follows:

·Mortgage loan portfolio amounted to $741.9 million (23.2% of the gross originated loan portfolio) compared to $757.8 million (24.4% of the gross originated loan portfolio) at December 31, 2015. Mortgage loan production totaled $57.6 million and $106.0 million for the quarter and six-month period ended June 30, 2016, which represents a decrease of 11.1% and 16.3%, from $64.8 million and $126.5 million, respectively. Mortgage loans included delinquent loans in the GNMA buy-back option program amounting to $8.4 million and $7.9 million at June 30, 2016 and December 31, 2015, 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 $1.477 billion (46.2% of the gross originated loan portfolio) compared to $1.442 billion (46.3% of the gross originated loan portfolio) at December 31, 2015. Commercial loan production decreased 45.0% and 29.4% to $66.3 million and $145.5 million for the quarter and six-month period ended June 30, 2016, from $120.5 million and $206.2 million for the same periods in 2015.

·Consumer loan portfolio amounted to $265.3 million (8.3% of the gross originated loan portfolio) compared to $243.0 million (7.8% of the gross originated loan portfolio) at December 31, 2015. Consumer loan production decreased 0.7% and increased 11.9% to $39.6 million and $73.8 million for the quarter and six-month period ended June 30, 2016, respectively, from $39.8 million and $66.0 million for the same periods in 2015.

·Auto and leasing portfolio amounted to $712.3 million (22.3% of the gross originated loan portfolio) compared to $669.2 million (21.5% of the gross originated loan portfolio) at December 31, 2015. Auto and leasing production increased by 20.9% and 8.8% to $74.4 million and $138.7 million for the quarter and six-month period ended June 30, 2016, respectively, compared to $61.5 million and $127.5 million for the same periods in 2015.

110

TABLE 6 — HIGHER RISK RESIDENTIAL MORTGAGE LOANS
	June 30, 2016
	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	$	11,044	$	231	2.09%	$	12,154	$	735	6.05%	$	86,238	$	1,794	2.08%
90 - 119 days		140		7	5.00%		564		40	7.09%		1,655		111	6.71%
120 - 179 days		35		-	0.00%		396		37	9.34%		904		70	7.74%
180 - 364 days		88		-	0.00%		1,359		125	9.20%		3,011		138	4.58%
365+ days		527		113	21.44%		1,297		350	26.99%		9,697		758	7.82%
Total	$	11,834	$	351	2.97%	$	15,770	$	1,287	8.16%	$	101,505	$	2,871	2.83%
Percentage of total loans excluding     acquired loans accounted for under ASC 310-30		0.36%					0.48%					3.06%
Refinanced or Modified Loans:
Amount	$	2,067	$	202	9.77%	$	195	$	17	8.72%	$	20,116	$	1,449	7.20%
Percentage of Higher-Risk Loan     Category		17.47%					1.24%					19.82%
Loan-to-Value Ratio:
Under 70%	$	7,474	$	213	2.85%	$	934	$	56	6.00%	$	-	$	-	-
70% - 79%		2,327		102	4.38%		2,404		166	6.91%		-		-	-
80% - 89%		126		13	10.32%		4,937		421	8.53%		-		-	-
90% and over		1,907		24	1.26%		7,495		644	8.59%		101,505		2,871	2.83%
	$	11,834	$	352	2.97%	$	15,770	$	1,287	8.16%	$	101,505	$	2,871	2.83%
* Loans may be included in more than one higher-risk loan category and excludes acquired residential mortgage loans.

111

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
June 30, 2016
						Maturity
Loans and Securities:		Carrying Value		Less than 1 Year		1 to 3 Years		More than 3 Years	Comments
	(In thousands)
Central government	$	10,926	$	-	$	-	$	10,926		Repayment sources include abandoned and unclaimed funds escheated to the Commonwealth
Public corporations		183,396		183,396		-		-		Includes $183.0 million PREPA loan, which has $53.3 million allowance for loan and lease losses
Municipalities		204,270		187		48,184		155,899		Repayment from property taxes
Investment securities		6,720		-		6,720		-		Remaining position is PRHTA security issued for P3 Project Teodoro Moscoso Bridge operated by private companies that have the payment obligation
Total	$	405,312	$	183,583	$	54,904	$	166,825

Some highlights follow regarding the data included above:

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

·45% of loans and securities balances mature in 12-months or less.

·Deposits from municipalities, central government and other government entities totaled $88.4 million at June 30, 2016.

112

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. At June 30, 2016, the Company’s allowance for loan and lease losses amounted to $162.2 million, a $71.9 million decrease from $234.1 million at December 31, 2015, mainly related to the de-recognition of a portion of the allowance for credit impaired loans due to a revision in policy.

Effective June 30, 2016, pursuant to supervisory direction, the Company revised the purchase credit impaired policy for all loans accounted for under ASC 310-30. Under the revised policy, the Company writes-off the loan’s recorded investment and derecognizes the associated allowance for loan and lease losses for loans that exit the pools. The revised policy implementation is performed prospectively due to the immaterial impact for retrospective adoption. Prior to June 30, 2016, the pool’s carrying value and allowance was determined by discount expected cash flows at the pool’s effective yield. The allowance for loan and lease losses was maintained until all of the loans in the pool were paid off or charged-off.  The transition to this revised policy on June 30, 2016 resulted in the de-recognition of loans recorded investment balance and associated allowance for loans and lease losses that had exited the pools with no impact to provision for loan and lease 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.

At June 30, 2016, $112.8 million of the allowance corresponded to originated and other loans held for investment, or 3.53% of total originated and other loans held for investment, compared to $112.6 million, or 3.62% of total originated and other loans held for investment, at December 31, 2015. The allowance slightly increased as a result of a $19.7 million provision for loan and lease losses and $7.0 million of recoveries, which were partially offset by charge-offs of $26.5 million during the six-month period ended June 30, 2016. The allowance for residential mortgage loans increased by 1.0% (or $185 thousand), when compared with the balances recorded at December 31, 2015. The allowance for consumer loans and auto and leases increased by 5.1% (or $574 thousand) and 5.5% (or $998 thousand), respectively, when compared with the balances recorded at December 31, 2015. The allowance for commercial loans decreased 2.5% (or 1.7 million), when compared with the balances recorded at December 31, 2015.

Allowance for loan and lease losses recorded for acquired BBVAPR loans accounted for under the provisions of ASC 310-20 at June 30, 2016 was $4.5 million compared to $5.5 million at December 31, 2015, a 19.0% decrease. The allowance decreased as a result of $3.2 million in charge-offs, which were partially offset by a $844 thousand provision for loan and lease losses and $1.3 million of recoveries during the six-month period ended June 30, 2016. The allowance for commercial loans decreased by 19.2% (or $5 thousand), when compared with the balance recorded at December 31, 2015. The allowance for consumer loans decreased by 12.5% (or $427 thousand) and auto loans decreased by 29.9% (or $623 thousand), respectively, when compared with the balances recorded at December 31, 2015, due to the normal amortization of credit discount of these acquired loans.

Allowance for loan and lease losses recorded for acquired BBVAPR loans accounted for under ASC-310-30 at June 30, 2016 was $22.8 million as compared to $25.8 million at December 31, 2015. The allowance decreased as a result of $8.5 million in allowance de-recognition from revised purchased credit impaired loan policy and by loan pools fully charged-off of $282 thousand, partially offset by a $5.8 million provision for loan and lease losses during the six-month period ended June 30, 2016.

Allowance for loan and lease losses recorded for acquired Eurobank loans at June 30, 2016 was $22.1 million as compared to $90.2 million at December 31, 2015. The allowance decreased as a result of $72.2 million in allowance de-recognition from revised purchased credit impaired loan policy and by $134 thousand in loan pools fully charged-off, partially offset by a $1.8 million provision for loan and lease losses and by $2.4 million for the FDIC shared-loss portion of provision for covered loan and lease losses. The allowance for loan and lease losses on acquired Eurobank loans is accounted for under the provisions of ASC 310-30. 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.

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.

113

Non-performing Assets

The Company’s non-performing assets include non-performing loans and foreclosed real estate (see Tables 11 and 12). At June 30, 2016 and December 31, 2015, the Company had $285.3 million and $300.1 million, respectively, of non-accrual loans, including acquired BBVAPR loans accounted for under ASC 310-20 (loans with revolving feature and/or acquired at a premium). At June 30, 2016 and December 31, 2015, loans whose terms have been extended and which are classified as troubled-debt restructuring that are not included in non-performing assets amounted to $97.2 million and $93.6 million, respectively.

Oriental Bank is part of a four bank syndicate that provided a $550 million revolving line of credit to finance the purchase of fuel for PREPA’s day-to-day power generation activities. Our participation in the line of credit has an unpaid principal balance of $183.0 million as of June 30, 2016. As part of the bank syndicate, the Bank entered into a Restructuring Support Agreement on November 5, 2015 with PREPA and certain other creditors. The Restructuring Support Agreement provides for the restructuring of the fuel line of credit subject to the accomplishment of several milestones, including some milestones that depend on the actions of third parties to the agreement, such as the negotiation of agreements with other creditors and legislative action. The Company expects the restructuring to be completed by the end of 2016. The Company conducted an impairment analysis considering the probability of collection of principal and interest, which included a financial model to project the future liquidity status of PREPA under various scenarios and its capacity to service its financial obligations, and concluded that PREPA had sufficient cash flows for the repayment of the line of credit. Despite the Company’s analysis showing PREPA’s capacity to repay the line of credit, the Company classifies this participation in the substandard risk category and non-accrual status and has a $53.3 million allowance for loan and lease losses recorded for this line of credit. Since April 1, 2015, interest payments have been applied to principal.

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

Acquired loans 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 these loans when it is probable that all cash flows expected at acquisition will not be collected.

At June 30, 2016, the Company’s non-performing assets decreased by 6.0% to $345.8 million (6.22% of total assets, excluding acquired loans with deteriorated credit quality) from $367.8 million (6.31% of total assets, excluding acquired loans with deteriorated credit quality) at December 31, 2015. The Company does not expect non-performing loans to result in significantly higher losses. At June 30, 2016, the allowance for originated loan and lease losses to non-performing loans coverage ratio was 38.85% (37.15% at December 31, 2015).

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.

114

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 June 30, 2016, the Company’s originated non-performing mortgage loans totaled $72.9 million (24.9% of the Company’s non-performing loans), a 6.3% decrease from $77.9 million (25.5% of the Company’s non-performing loans) at December 31, 2015. Non-performing loans in this category are 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 June 30, 2016, the Company’s originated non-performing commercial loans amounted to $207.8 million (71.0% of the Company’s non-performing loans), a 3.5% decrease from $215.3 million at December 31, 2015 (70.5% of the Company’s non-performing loans). Most of this portfolio is collateralized by commercial real estate properties. At June 30, 2016 and December 31, 2015, the PREPA line of credit had an outstanding principal balance of $183.0 million and $190.3 million, respectively.

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 June 30, 2016, the Company’s originated non-performing consumer loans totaled $2.3 million (0.8% of the Company’s non-performing loans), a 43.4% increase from $1.6 million (0.5% of the Company’s non-performing loans) at December 31, 2015.

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 June 30, 2016, the Company’s originated non-performing auto loans and leases amounted to $7.3 million (2.5% of the Company’s total non-performing loans), a decrease of 12.8% from $8.4 million at December 31, 2015 (2.8% of the Company’s total non-performing loans).

·Acquired BBVAPR 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 June 30, 2016, the Company’s acquired non-performing commercial lines of credit accounted for under ASC 310-20 amounted to $770 thousand (0.3% of the Company’s non-performing loans), a 12.5% decrease from $880 thousand at December 31, 2015 (0.3% 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 June 30, 2016, the Company’s acquired non-performing consumer lines of credit and credit cards accounted for under ASC 310-20 totaled $764 thousand (0.3% of the Company’s non-performing loans), a 42.8% increase from $535 thousand at December 31, 2015 (0.2% 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 June 30, 2016, the Company’s acquired non-performing auto loans accounted for under ASC 310-20 totaled $562 thousand (0.2% of the Company’s non-performing loans), a 32.4% decrease from $831 thousand at December 31, 2015 (0.2% of the Company’s non-performing loans).

115

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, PRHFA, (“Puerto Rico Housing Finance Authority”), 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.

In order to apply for any of the loan modification programs, if the borrower is active in Chapter 13 bankruptcy, they must request an authorization from the bankruptcy trustee to allow for the loan modification.  Borrowers with discharged Chapter 7 bankruptcies may also apply. Loans in these programs are evaluated by designated underwriters for troubled-debt restructuring classification if the Company grants a concession for legal or economic reasons due to the debtor’s financial difficulties.

116

TABLE 8 — ALLOWANCE FOR LOAN AND LEASE LOSSES BREAKDOWN
	June 30,		December 31,
	2016		2015		Variance %
	(Dollars in thousands)
Originated and other loans held for investment
Allowance balance:
Mortgage	$	18,537	$	18,352	1.0%
Commercial		63,144		64,791	-2.5%
Consumer		11,771		11,197	5.1%
Auto and leasing		19,259		18,261	5.5%
Unallocated allowance		101		25	304.0%
Total allowance balance	$	112,812	$	112,626	0.2%
Allowance composition:
Mortgage		16.4%		16.3%	0.6%
Commercial		56.0%		57.5%	-2.6%
Consumer		10.4%		9.9%	5.1%
Auto and leasing		17.1%		16.2%	5.6%
Unallocated allowance		0.1%		0.1%	0.0%
		100.0%		100.0%
Allowance coverage ratio at end of period applicable to:
Mortgage		2.50%		2.42%	3.3%
Commercial		4.28%		4.49%	-4.7%
Consumer		4.44%		4.61%	-3.7%
Auto and leasing		2.70%		2.73%	-1.1%
Total allowance to total originated loans		3.53%		3.62%	-2.5%
Allowance coverage ratio to non-performing loans:
Mortgage		25.41%		23.57%	7.8%
Commercial		30.39%		30.10%	1.0%
Consumer		503.25%		686.51%	-26.7%
Auto and leasing		262.49%		216.93%	21.0%
Total		38.85%		37.15%	4.6%
Acquired BBVAPR loans accounted for under ASC 310-20
Allowance balance:
Commercial	$	21	$	26	-19.2%
Consumer		3,002		3,429	-12.5%
Auto		1,464		2,087	-29.9%
Total allowance balance	$	4,487	$	5,542	-19.0%
Allowance composition:
Commercial		0.5%		0.5%	0.0%
Consumer		66.9%		61.9%	8.1%
Auto		32.6%		37.6%	-13.3%
		100.0%		100.0%
Allowance coverage ratio at end of period applicable to:
Commercial		0.46%		0.35%	31.4%
Consumer		8.53%		8.93%	-4.5%
Auto		1.90%		1.95%	-2.6%
Total allowance to total acquired loans		3.84%		3.63%	5.8%
Allowance coverage ratio to non-performing loans:
Commercial		2.73%		2.95%	-7.5%
Consumer		392.93%		640.93%	-38.7%
Auto		260.50%		251.14%	3.7%
Total		214.07%		246.75%	-13.2%

117

TABLE 8 — ALLOWANCE FOR LOAN AND LEASE LOSSES BREAKDOWN (CONTINUED)
		June 30		December 31,
		2016	2015		Variance %
	(Dollars in thousands)
Acquired BBVAPR loans accounted for under ASC 310-30
Allowance balance:
Mortgage	$	1,585	$	1,762	-10.0%
Commercial		15,863		21,161	-25.0%
Auto		5,353		2,862	87.0%
Total allowance balance (a)	$	22,801	$	25,785	-11.6%
Allowance composition:
Mortgage		7.0%		6.8%	2.9%
Commercial		69.6%		82.1%	-15.2%
Auto		23.4%		11.1%	110.8%
		100.0%		100.0%
Acquired Eurobank loans accounted for under ASC 310-30
Allowance balance:
Mortgage	$	11,016	$	22,570	-51.2%
Commercial		11,096		67,365	-83.5%
Consumer		4		243	-98.4%
Total allowance balance (a)	$	22,116	$	90,178	-75.5%
Allowance composition:
Mortgage		49.8%		25.0%	99.2%
Commercial		50.2%		74.7%	-32.8%
Consumer		0.0%		0.3%	-100.0%
		100.0%		100.0%
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

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TABLE 9 — ALLOWANCE FOR LOAN AND LEASE LOSSES SUMMARY
	Quarter Ended  June 30,					Six-Month Period Ended June 30,
					Variance					Variance
	2016		2015		%	2016		2015		%
	(Dollars in thousands)					(Dollars in thousands)
Originated and other loans:
Balance at beginning of period	$	113,238	$	76,759	47.5%	$	112,626	$	51,439	119.0%
Provision for loan and lease losses		9,052		9,953	-9.1%		19,712		43,864	-55.1%
Charge-offs		(13,118)		(11,824)	10.9%		(26,480)		(24,042)	10.1%
Recoveries		3,640		4,101	-11.2%		6,954		7,728	-10.0%
Balance at end of period	$	112,812	$	78,989	42.8%	$	112,812	$	78,989	42.8%
Acquired loans:
BBVAPR loans
Acquired loans accounted for    under ASC 310-20:
Balance at beginning of period	$	4,993	$	5,450	-8.4%	$	5,542	$	4,597	20.6%
Provision for loan and lease losses		548		1,498	-63.4%		844		4,286	-80.3%
Charge-offs		(1,596)		(2,357)	-32.3%		(3,152)		(5,006)	-37.0%
Recoveries		542		938	-42.2%		1,253		1,652	-24.2%
Balance at end of period	$	4,487	$	5,529	-18.8%	$	4,487	$	5,529	-18.8%
Acquired loans accounted for    under ASC 310-30:
Balance at beginning of period	$	27,747	$	14,166	95.9%	$	25,785	$	13,481	91.3%
Provision for loan and lease losses		3,814		4,193	-9.0%		5,842		4,878	19.8%
Loan pools fully charged off		(216)		-	-100.0%		(282)		-	-100.0%
Allowance de-recognition (a)		(8,544)		-	-100.0%		(8,544)		-	0.0%
Balance at end of period	$	22,801	$	18,359	24.2%	$	22,801	$	18,359	24.2%
Eurobank loans
Balance at beginning of period	$	92,293	$	70,651	30.6%	$	90,178	$	64,245	40.4%
Provision (recapture) for loan and lease losses		1,031		(105)	-1081.9%		1,836		4,704	-61.0%
FDIC shared-loss portion on        provision for covered loan        and lease losses		951		906	5.0%		2,395		2,503	-4.3%
Loan pools fully charged off		-		-	0.0%		(134)		-	-100.0%
Allowance de-recognition (a)		(72,159)		-	-100.0%		(72,159)		-	-100.0%
Balance at end of period	$	22,116	$	71,452	-69.0%	$	22,116	$	71,452	-69.0%
Allowance for loans and lease losses on originated       and other loans to:
Total originated loans		3.53%		2.67%	32.2%		3.53%		2.67%	32.2%
Non-performing originated loans		38.85%		25.59%	51.8%		38.85%		25.59%	51.8%
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		3.84%		2.87%	33.8%		3.84%		2.87%	33.8%
Non-performing acquired loans         accounted for under ASC 310-20		214.07%		162.67%	31.6%		214.07%		162.67%	31.6%
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

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TABLE 10 — NET CREDIT LOSSES STATISTICS ON LOAN AND LEASES, EXCLUDING LOANS ACCOUNTED FOR UNDER ASC 310-30
	Quarter Ended June 30,					Six-Month Period Ended June 30,
					Variance					Variance
	2016		2015		%	2016		2015		%
	(Dollar in thousands)
Originated and other loans and leases:
Mortgage
Charge-offs	$	(1,374)	$	(1,356)	1.3%	$	(3,036)	$	(2,770)	9.6%
Recoveries		36		67	-46.3%		181		67	170.1%
Total		(1,338)		(1,289)	3.8%		(2,855)		(2,703)	5.6%
Commercial
Charge-offs		(833)		(497)	67.6%		(1,844)		(1,489)	23.8%
Recoveries		228		219	4.1%		316		309	2.3%
Total		(605)		(278)	117.6%		(1,528)		(1,180)	29.5%
Consumer
Charge-offs		(2,811)		(2,309)	21.7%		(5,138)	$	(3,985)	28.9%
Recoveries		133		390	-65.9%		235		543	-56.7%
Total		(2,678)		(1,919)	39.6%		(4,903)		(3,442)	42.4%
Auto
Charge-offs		(8,100)		(7,662)	5.7%		(16,462)	$	(15,798)	4.2%
Recoveries		3,243		3,425	-5.3%		6,222		6,809	-8.6%
Total		(4,857)		(4,237)	14.6%		(10,240)		(8,989)	13.9%
Net credit losses
Total charge-offs		(13,118)		(11,824)	10.9%		(26,480)		(24,042)	10.1%
Total recoveries		3,640		4,101	-11.2%		6,954		7,728	-10.0%
Total	$	(9,478)	$	(7,723)	22.7%	$	(19,526)	$	(16,314)	19.7%
Net credit losses to average     loans outstanding:
Mortgage		0.72%		0.66%	9.1%		0.76%		0.69%	10.1%
Commercial		0.17%		0.08%	112.5%		0.21%		0.18%	16.7%
Consumer		4.35%		3.99%	9.0%		4.08%		3.68%	10.9%
Auto		2.75%		2.74%	0.4%		2.95%		2.96%	-0.3%
Total		1.21%		1.06%	14.2%		1.25%		1.13%	10.6%
Recoveries to charge-offs		27.75%		34.68%	-20.0%		26.26%		32.14%	-18.3%
Average originated loans:
Mortgage	$	743,516	$	782,753	-5.0%	$	749,904	$	785,029	-4.5%
Commercial		1,433,944		1,333,276	7.6%		1,429,638		1,301,367	9.9%
Consumer		246,003		192,572	27.7%		240,251		187,049	28.4%
Auto		706,107		618,746	14.1%		695,071		606,819	14.5%
Total	$	3,129,570	$	2,927,347	6.9%	$	3,114,864	$	2,880,264	8.1%

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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 June 30						Six-Month Period Ended June 30
					Variance					Variance
	2016		2015		%	2016		2015		%
	(Dollars in thousands)
Acquired loans accounted for under ASC 310-20:
Commercial
Charge-offs	$	(12)	$	(16)	-25.0%	$	(19)	$	(16)	18.8%
Recoveries		8		7	14.3%		40		17	135.3%
Total		(4)		(9)	-55.6%		21		1	2000.0%
Consumer
Charge-offs		(1,013)		(1,303)	-22.3%		(1,825)		(2,686)	-32.1%
Recoveries		88		429	-79.5%		169		563	-70.0%
Total		(925)		(874)	5.8%		(1,656)		(2,123)	-22.0%
Auto
Charge-offs		(571)		(1,038)	-45.0%		(1,308)		(2,304)	-43.2%
Recoveries		446		502	-11.2%		1,044		1,072	-2.6%
Total		(125)		(536)	-76.7%		(264)		(1,232)	-78.6%
Net credit losses
Total charge-offs		(1,596)		(2,357)	-32.3%		(3,152)		(5,006)	-37.0%
Total recoveries		542		938	-42.2%		1,253		1,652	-24.2%
Total	$	(1,054)	$	(1,419)	-25.7%	$	(1,899)	$	(3,354)	-43.4%
Net credit losses to average     loans outstanding:
Commercial		2.77%		5.10%	-45.7%		-7.13%		-0.19%	3652.6%
Consumer		6.19%		5.70%	8.7%		5.51%		6.80%	-19.0%
Auto		0.63%		1.26%	-50.3%		0.62%		1.14%	-46.2%
Total		3.01%		2.45%	23.0%		2.59%		2.41%	7.8%
Recoveries to charge-offs		33.96%		39.80%	-14.7%		39.75%		33.00%	20.5%
Average loans accounted for under ASC 310-20:
Commercial	$	577	$	706	-18.3%	$	589	$	1,039	-43.3%
Consumer		59,785		61,382	-2.6%		60,087		62,425	-3.7%
Auto		79,603		169,644	-53.1%		85,815		215,454	-60.2%
Total	$	139,965	$	231,732	-39.6%	$	146,491	$	278,918	-47.5%

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TABLE 11 — NON-PERFORMING ASSETS
	June 30,		December 31,		Variance
	2016		2015		(%)
	(Dollars in thousands)
Non-performing assets:
Non-accruing loans
Troubled-Debt Restructuring loans	$	208,978	$	217,691	-4.0%
Other loans		76,321		82,429	-7.4%
Accruing loans
Troubled-Debt Restructuring loans		5,640		4,240	33.0%
Other loans		1,548		1,091	41.9%
Total non-performing loans	$	292,487	$	305,451	-4.2%
Foreclosed real estate not covered under the         shared-loss agreements with the FDIC		49,484		56,304	-12.1%
Other repossessed assets		3,866		6,034	-35.9%
	$	345,837	$	367,789	-6.0%
Non-performing assets to total assets, excluding covered assets and acquired loans with deteriorated credit quality (including those by analogy)		6.22%		6.31%	-1.4%
Non-performing assets to total capital		37.76%		41.00%	-7.9%

	Quarter Ended June 30, 2016				Six-Month Period Ended June 30, 2016
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Interest that would have been recorded in the period if the     loans had not been classified as non-accruing loans	$	984	$	890	$	1,821	$	1,597

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TABLE 12 — NON-PERFORMING LOANS
		June 30		December 31,	Variance
	2016		2015		%
	(Dollars in thousands)
Non-performing loans:
Originated and other loans held for investment
Mortgage	$	72,947	$	77,875	-6.3%
Commercial		207,768		215,281	-3.5%
Consumer		2,339		1,631	43.4%
Auto and leasing		7,337		8,418	-12.8%
		290,391		303,205	-4.2%
Acquired loans accounted for under ASC 310-20 (Loans with         revolving feature and/or acquired at a premium)
Commercial		770		880	-12.5%
Consumer		764		535	42.8%
Auto		562		831	-32.4%
		2,096		2,246	-6.7%
Total	$	292,487	$	305,451	-4.2%
Non-performing loans composition percentages:
Originated loans
Mortgage		24.9%		25.5%
Commercial		71.0%		70.5%
Consumer		0.8%		0.5%
Auto and leasing		2.5%		2.8%
Acquired loans accounted for under ASC 310-20 (Loans with         revolving feature and/or acquired at a premium)
Commercial		0.3%		0.3%
Consumer		0.3%		0.2%
Auto		0.2%		0.2%
Total		100.0%		100.0%
Non-performing loans to:
Total loans, excluding loans accounted for         under ASC 310-30 (including those by analogy)		8.83%		9.36%	-5.7%
Total assets, excluding loans accounted for         under ASC 310-30 (including those by analogy)		5.26%		5.24%	0.4%
Total capital		31.93%		34.05%	-6.2%
Non-performing loans with partial charge-offs to:
Total loans, excluding loans accounted for         under ASC 310-30 (including those by analogy)		0.72%		1.15%	-37.4%
Non-performing loans		8.19%		12.25%	-33.1%
Other non-performing loans ratios:
Charge-off rate on non-performing loans to non-performing loans         on which charge-offs have been taken		63.73%		61.15%	4.2%
Allowance for loan and lease losses to non-performing         loans on which no charge-offs have been taken		46.01%		44.09%	4.4%

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FDIC Indemnification Asset

The Company recorded the FDIC indemnification asset, measured separately from the covered loans, as part of the Eurobank FDIC-assisted transaction. Based on the accounting guidance in ASC Topic 805, at each reporting date subsequent to the initial recording of the indemnification asset, the Company measures the indemnification asset on the same basis as the covered loans and assesses its collectability. The amount to be ultimately collected for the indemnification asset is dependent upon the performance of the underlying covered assets, the passage of time, claims submitted to the FDIC and the Corporation’s compliance with the terms of the loss sharing agreements. Refer to Note 6 to the unaudited consolidated financial statements for additional information on the FDIC loss share agreements.

The FDIC loss share coverage for the commercial loans and other non-single family loans was in effect until June 30, 2015. The coverage for the single family residential loans will expire on June 30, 2020. Accordingly, the Company amortized the remaining portion of the FDIC indemnification asset attributable to non-single family loans at the close of the second quarter of 2015. At June 30, 2016, the FDIC indemnification asset only reflects the balance for single family residential mortgage loans.

TABLE 13 - ACTIVITY OF FDIC INDEMNIFICATION ASSET
	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
FDIC indemnification asset:
Balance at beginning of period	$	20,923	$	75,221	$	22,599	$	97,378
Shared-loss agreements reimbursements from the FDIC		(332)		(24,387)		(737)		(38,087)
Increase in expected credit losses to be       covered under shared-loss agreements, net		951		906		2,395		2,503
FDIC indemnification asset expense		(1,405)		(22,512)		(4,269)		(34,733)
Incurred expenses to be reimbursed under shared-loss agreements		(1,711)		(6,524)		(1,562)		(4,357)
Balance at end of period	$	18,426	$	22,704	$	18,426	$	22,704

TABLE 14 - ACTIVITY IN THE REMAINING FDIC INDEMNIFICATION ASSET DISCOUNT
	Quarter Ended June 30,				Six-month period ended June 30,
	2016		2015		2016		2015
	(In thousands)
Balance at beginning of period	$	10,026	$	4,755	$	4,814	$	4,755
Amortization of negative discount		(1,405)		(22,531)		(4,270)		(22,531)
Impact of lower projected losses		2,444		27,733		10,521		27,733
Balance at end of period	$	11,065	$	9,957	$	11,065	$	9,957

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TABLE 15 - LIABILITIES SUMMARY AND COMPOSITION
		June 30,		December 31,
	2016		2015		Variance %
	(Dollars in thousands)
Deposits:
Non-interest bearing deposits	$	917,260	$	762,009	20.4%
NOW accounts		1,055,461		1,100,541	-4.1%
Savings and money market accounts		1,176,168		1,179,229	-0.3%
Certificates of deposit		1,493,303		1,674,431	-10.8%
Total deposits		4,642,192		4,716,210	-1.6%
Accrued interest payable		1,862		1,541	20.8%
Total deposits and accrued interest payable		4,644,054		4,717,751	-1.6%
Borrowings:
Securities sold under agreements to repurchase		626,109		934,691	-33.0%
Advances from FHLB		306,480		332,476	-7.8%
Subordinated capital notes		102,983		102,633	0.3%
Other term notes		1,753		1,734	1.1%
Total borrowings		1,037,325		1,371,534	-24.4%
Total deposits and borrowings		5,681,379		6,089,285	-6.7%
Other Liabilities:
Derivative liabilities		5,413		6,162	-12.2%
Acceptances outstanding		20,984		14,582	43.9%
Other liabilities		88,930		92,043	-3.4%
Total liabilities	$	5,796,706	$	6,202,072	-6.5%
Deposits portfolio composition percentages:
Non-interest bearing deposits		19.8%		16.2%
NOW accounts		22.7%		23.3%
Savings and money market accounts		25.3%		25.0%
Certificates of deposit		32.2%		35.5%
		100.0%		100.0%
Borrowings portfolio composition percentages:
Securities sold under agreements to repurchase		60.4%		68.2%
Advances from FHLB		29.5%		24.2%
Other term notes		0.2%		0.1%
Subordinated capital notes		9.9%		7.5%
		100.0%		100.0%
Securities sold under agreements to repurchase (excluding accrued interest)
Amount outstanding at period-end	$	624,500	$	932,500
Daily average outstanding balance	$	713,653	$	1,012,756
Maximum outstanding balance at any month-end	$	902,500	$	1,158,945

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Liabilities and Funding Sources

As shown in Table 15 above, at June 30, 2016, the Company’s total liabilities were $5.797 billion, 6.5% less than the $6.202 billion reported at December 31, 2015. Deposits and borrowings, the Company’s funding sources, amounted to $5.681 billion at June 30, 2016 versus $6.089 billion at December 31, 2015, a 6.7% decrease.

At June 30, 2016, deposits represented 82% and borrowings represented 18% of interest-bearing liabilities. At June 30, 2016, deposits, the largest category of the Company’s interest-bearing liabilities, were $4.644 billion, a decrease of 1.6% from $4.718 billion at December 31, 2015. Demand and savings deposits increased 3.8% to $3.083 billion, time deposits, excluding brokered deposits, increased 3.6% to $999.2 million, and brokered deposits decreased 28.3% to $561.6 million, as part of our efforts to reduce the cost of deposits, which averaged 0.62% at June 30, 2016 compared to 0.59% at December 31, 2015.

Borrowings consist mainly of repurchase agreements, FHLB-NY advances and subordinated capital notes. At June 30, 2016, borrowings amounted to $1.037 billion, representing a decrease of 24.4% when compared with the $1.372 billion reported at December 31, 2015. Repurchase agreements at June 30, 2016 decreased $308.6 million to $626.1 million from $934.7 million at December 31, 2015, as the Company partially unwound $268.0 million in repurchase agreements at a cost of $12.0 million during the first quarter of 2016.

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 decreased $26.0 million to $306.5 million at June 30, 2016, as they reached maturity and were not renewed. The remaining advances mature from July 2016 through 2020.

Stockholders’ Equity

At June 30, 2016, the Company’s total stockholders’ equity was $915.9 million, a 2.1% increase when compared to $897.1 million at December 31, 2015. This increase in stockholders’ equity reflects increases in retained earnings of $13.5 million,  in legal surplus of $2.8 million, and in accumulated comprehensive income of $1.8 million, which in turn reflects the realized gains on available-for-sale securities for the six-month period ended June 30, 2016. Book value per share was $17.08 at June 30, 2016 compared to $16.67 at December 31, 2015.

From December 31, 2015 to June 30, 2016, tangible common equity to total assets increased to 9.79% from 8.98%, Tier 1 Leverage capital ratio increased to 11.92% from 11.18%, Common Equity Tier 1 capital ratio increased to 12.64% from $12.14%, Tier 1 Risk-Based capital ratio increased to 16.71% from 15.99%, and Total Risk-Based capital ratio increased to 18.00% from 17.29%.

New Capital Rules to Implement Basel III Capital Requirements

In July 2013, the Board of Governors of the Federal Reserve System (the “Board”), the Office of the Comptroller of the Currency (the “OCC”) and the FDIC (together with the Board and the OCC, the “Agencies”) approved new rules (“New Capital Rules”) to establish a revised comprehensive regulatory capital framework for all U.S. banking organizations. The New Capital Rules generally implement the Basel Committee on Banking Supervision’s (the “Basel Committee”) December 2010 final capital framework referred to as “Basel III” for strengthening international capital standards. The New Capital Rules substantially revise the risk-based capital requirements applicable to bank holding companies and their depository institution subsidiaries, including the Company and the Bank, as compared to the previous U.S. general risk-based capital rules. The New Capital Rules revise the definitions and the components of regulatory capital, as well as address other issues affecting the numerator in banking institutions’ regulatory capital ratios. The New Capital Rules also address asset risk weights and other matters affecting the denominator in banking institutions’ regulatory capital ratios and replace the existing general risk-weighting approach, which was derived from the Basel Committee’s 1988 “Basel I” capital accords, with a more risk-sensitive approach based, in part, on the “standardized approach” in the Basel Committee’s 2004 “Basel II” capital accords. In addition, the New Capital Rules implement certain provisions of Dodd-Frank Act, including the requirements of Section 939A to remove references to credit ratings from the federal agencies’ rules. The New Capital Rules became effective for the Company and the Bank on January 1, 2015, subject to phase-in periods for certain of their components and other provisions. Among other matters, the New Capital Rules: (i) introduce a new capital measure called “Common Equity Tier 1” (“CET1”) and related regulatory capital ratio of CET1 to risk-weighted assets; (ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting certain revised requirements; (iii) mandate that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital; and (iv) expand the scope of the deductions from and adjustments to capital as compared to existing regulations. Under the New Capital Rules, for most banking organizations, including

126

the Company, the most common form of Additional Tier 1 capital is noncumulative perpetual preferred stock and the most common form of Tier 2 capital is subordinated notes and a portion of the allocation for loan and lease losses, in each case, subject to the New Capital Rules’ specific requirements.

Pursuant to the New Capital Rules, the minimum capital ratios as of January 1, 2015 are as follows:

•4.5% CET1 to risk-weighted assets;

•6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets;

•8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets; and

•4% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”).

The New Capital Rules also introduce a new 2.5% “capital conservation buffer”, composed entirely of CET1, on top of the three minimum risk-weighted asset ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET1 to risk-weighted assets above the minimum but below the capital conservation buffer will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. Thus, when fully phased-in on January 1, 2019, the Company and the Bank will be required to maintain an additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios of (i) CET1 to risk-weighted assets of at least 7%, (ii) Tier 1 capital to risk-weighted assets of at least 8.5%, and (iii) Total capital to risk-weighted assets of at least 10.5%.

The New Capital Rules provide for a number of deductions from and adjustments to CET1. These include, for example, the requirement that mortgage servicing rights, deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such items, in the aggregate, exceed 15% of CET1.

In addition (as noted above), under the previous general risk-based capital rules, the effects of AOCI items included in shareholders’ equity (for example, mark-to-market adjustments to the value of securities held in the available for sale portfolio) under U.S. GAAP are reversed for the purposes of determining regulatory capital ratios. Pursuant to the New Capital Rules, the effects of certain AOCI items are not excluded; however, non-advanced approach banking organizations may make a one-time permanent election to continue to exclude these items. The Company and the Bank made the election to continue to exclude these items in order to avoid significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of their securities portfolio, concurrently with the first filing of the Company’s and Oriental Bank’s periodic regulatory reports in the beginning of 2015. The New Capital Rules also preclude certain hybrid securities, such as trust preferred securities, from inclusion in bank holding companies’ Tier 1 capital, subject to phase-out, in the case of bank holding companies that had $15 billion or more in total consolidated assets as of December 31, 2009. Therefore, the Company is permitted to continue to include its existing trust preferred securities as Tier 1 capital.

Implementation of the deductions and other adjustments to CET1 began on January 1, 2015 and will be phased-in over a 4-year period (beginning at 40% on January 1, 2015 and an additional 20% per year thereafter). The implementation of the capital conservation buffer will begin on January 1, 2016 at the 0.625% level and increase by 0.625% on each subsequent January 1, until it reaches 2.5% on January 1, 2019.

With respect to the Bank, the New Capital Rules revise the “prompt corrective action” (“PCA”) regulations adopted pursuant to Section 38 of the Federal Deposit Insurance Act by: (i) introducing a CET1 ratio requirement at each PCA category (other than critically undercapitalized), with the required CET1 ratio being 6.5% for well-capitalized status; (ii) increasing the minimum Tier 1 capital ratio requirement for each category, with the minimum Tier 1 capital ratio for well-capitalized status being 8% (as compared to the current 6%); and (iii) eliminating the current provision that provides that a bank with a composite supervisory rating of 1 may have a 3% leverage ratio and still be adequately capitalized. The New Capital Rules do not change the total risk-based capital requirement for any PCA category.

The New Capital Rules prescribe a new standardized approach for risk weightings that expand the risk-weighting categories from the current four Basel I-derived categories (0%, 20%, 50% and 100%) to a larger and more risk-sensitive number of categories, depending on the nature of the assets, and resulting in higher risk weights for a variety of asset classes.

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The following are the consolidated capital ratios of the Company under the New Capital Rules at June 30, 2016 and December 31, 2015:

TABLE 16 — CAPITAL, DIVIDENDS AND STOCK DATA
		June 30,		December 31,
					Variance
	2016		2015		%
	(Dollars in thousands, except per share data)
Capital data:
Stockholders’ equity	$	915,890	$	897,077	2.1%
Regulatory Capital Ratios data:
Common equity tier 1 capital ratio		12.64%		12.14%	4.1%
Minimum common equity tier 1 capital ratio required		4.50%		4.50%	0.0%
Actual common equity tier 1 capital	$	596,080	$	594,482	0.3%
Minimum common equity tier 1 capital required	$	212,244	$	220,344	-3.7%
Excess over regulatory requirement	$	383,836	$	374,138	2.6%
Risk-weighted assets	$	4,716,534	$	4,896,539	-3.7%
Tier 1 risk-based capital ratio		16.71%		15.99%	4.5%
Minimum tier 1 risk-based capital ratio required		6.00%		6.00%
Actual tier 1 risk-based capital	$	788,349	$	782,912	0.7%
Minimum tier 1 risk-based capital required	$	282,992	$	293,792	-3.7%
Excess over regulatory requirement	$	505,357	$	489,120	3.3%
Risk-weighted assets	$	4,716,534	$	4,896,539	-3.7%
Total risk-based capital ratio		18.00%		17.29%	4.1%
Minimum total risk-based capital ratio required		8.00%		8.00%
Actual total risk-based capital	$	849,147	$	846,748	0.3%
Minimum total risk-based capital required	$	377,323	$	391,723	-3.7%
Excess over regulatory requirement	$	471,824	$	455,025	3.7%
Risk-weighted assets	$	4,716,534	$	4,896,539	-3.7%
Leverage capital ratio		11.92%		11.18%	6.6%
Actual tier 1 capital	$	788,349	$	782,912	0.7%
Minimum tier 1 capital required	$	264,633	$	280,009	-5.5%
Excess over regulatory requirement	$	523,716	$	502,903	4.1%
Tangible common equity to total assets		9.79%		8.98%	9.0%
Tangible common equity to risk-weighted assets		13.93%		13.02%	7.0%
Total equity to total assets		13.64%		12.64%	7.9%
Total equity to risk-weighted assets		19.42%		18.32%	6.0%
Stock data:
Outstanding common shares		43,913,719		43,867,909	0.1%
Book value per common share	$	17.08	$	16.67	2.5%
Tangible book value per common share	$	14.96	$	14.53	3.0%
Market price at end of period	$	8.30	$	7.32	13.4%
Market capitalization at end of period	$	364,484	$	321,113	13.5%

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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 June 30, 2016 and December 31, 2015:

		June 30,		December 31,
	2016		2015
	(In thousands, except share or per share information)
Total stockholders' equity	$	915,890	$	897,077
Preferred stock		(176,000)		(176,000)
Preferred stock issuance costs		10,130		10,130
Goodwill		(86,069)		(86,069)
Core deposit intangible		(4,777)		(5,294)
Customer relationship intangible		(2,222)		(2,544)
Total tangible common equity	$	656,952	$	637,300
Total assets		6,712,596		7,099,149
Goodwill		(86,069)		(86,069)
Core deposit intangible		(4,777)		(5,294)
Customer relationship intangible		(2,222)		(2,544)
Total tangible assets	$	6,619,528	$	7,005,242
Tangible common equity to tangible assets		9.92%		9.10%
Common shares outstanding at end of period		43,913,719		43,867,909
Tangible book value per common share	$	14.96	$	14.53

The tangible common equity ratio and tangible book value per common share are non-GAAP measures and, unlike Tier 1 capital and Common Equity Tier 1 capital, are not codified in the federal banking regulations. 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.

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 following table presents the Company’s capital adequacy information under the New Capital Rules:

	June 30,		December 31,
	2016		2015
	(Dollars in thousands)
Risk-based capital:
Common equity tier 1 capital	$	596,080		594,482
Additional tier 1 capital		192,269		188,430
Tier 1 capital		788,349	$	782,912
Additional Tier 2 capital		60,798		63,836
Total risk-based capital	$	849,147	$	846,748
Risk-weighted assets:
Balance sheet items	$	4,585,289	$	4,742,113
Off-balance sheet items		131,245		154,426
Total risk-weighted assets	$	4,716,534	$	4,896,539
Ratios:
Common equity tier 1 capital (minimum required - 4.5%)		12.64%		12.14%
Tier 1 capital (minimum required - 6%)		16.71%		15.99%
Total capital (minimum required - 8%)		18.00%		17.29%
Leverage ratio		11.92%		11.18%
Equity to assets		13.64%		12.64%
Tangible common equity to assets		9.79%		8.98%

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 June 30, 2016 and December 31, 2015:

	June 30,		December 31,		Variance
	2016		2015		%
	(Dollars in thousands)
Oriental Bank Regulatory Capital Ratios:
Common Equity Tier 1 Capital to Risk-Weighted Assets		16.33%		15.40%	6.1%
Actual common equity tier 1 capital	$	769,424	$	751,886	2.3%
Minimum capital requirement (4.5%)	$	211,992	$	219,762	-3.5%
Minimum to be well capitalized (6.5%)	$	306,210	$	317,434	-3.5%
Tier 1 Capital to Risk-Weighted Assets		16.33%		15.40%	6.1%
Actual tier 1 risk-based capital	$	769,424	$	751,886	2.3%
Minimum capital requirement (6%)	$	282,656	$	293,016	-3.5%
Minimum to be well capitalized (8%)	$	376,874	$	390,688	-3.5%
Total Capital to Risk-Weighted Assets		17.62%		16.70%	5.5%
Actual total risk-based capital	$	830,002	$	815,458	1.8%
Minimum capital requirement (8%)	$	376,874	$	390,688	-3.5%
Minimum to be well capitalized (10%)	$	471,093	$	488,360	-3.5%
Total Tier 1 Capital to Average Total Assets		11.68%		10.80%	8.2%
Actual tier 1 capital	$	769,424	$	751,886	2.3%
Minimum capital requirement (4%)	$	263,464	$	278,399	-5.4%
Minimum to be well capitalized (5%)	$	329,330	$	347,999	-5.4%

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The Company’s common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “OFG.” At June 30, 2016 and December 31, 2015, the Company’s market capitalization for its outstanding common stock was $364.5 million ($8.30 per share) and $321.1 million ($7.32 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
2016
June 30, 2016	$	9.14	$	6.32	$	0.06
March 31, 2016	$	7.32	$	4.77	$	0.06
2015
December 31, 2015	$	10.52	$	6.39	$	0.06
September 30, 2015	$	10.20	$	6.63	$	0.10
June 30, 2015	$	17.04	$	10.67	$	0.10
March 31, 2015	$	17.70	$	14.88	$	0.10
2014
December 31, 2014	$	16.76	$	14.35	$	0.10
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

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 $7.7 million of authority remains. The shares of common stock repurchased are to be held by the Company as treasury shares. There were no repurchases during the first half  of 2016 and 2015. The number of shares that may yet be purchased under the $70 million program is estimated at 931,428 and was calculated by dividing the remaining balance of $7.7 million by $8.30 (closing price of the Company common stock at June 30, 2016). 

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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”) and implemented by management through the adoption of a risk management program, which is overseen and monitored by the Chief Risk Officer and the Risk Management 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 risk to 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 executing 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 quarterly 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 five-year time horizon, assuming certain gradual upward and downward interest rate movements, achieved during a twelve-month period. Instantaneous interest rate movements are also modeled. 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  June 30, 2016  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	$	4,275	1.62%	$	3,259	1.23%
+ 100 Basis points	$	2,346	0.89%	$	1,841	0.69%
- 50 Basis points	$	(845)	-0.32%	$	(624)	-0.23%

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 June 30, 2016 .

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 $3.7 million (notional amount of $237.3 million) was recognized at June 30, 2016 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 June 30, 2016, interest rate swaps offered to clients not designated as hedging instruments represented a derivative asset of $1.7 million (notional amounts of $16.2 million), and the mirror-image interest rate swaps in which the Company entered into represented a derivative liability of $1.7 million (notional amounts of $16.2 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 June 30, 2016, 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 $187 thousand (notional amounts of $425 thousand) and the options sold to customers embedded in the certificates of deposit represented a liability of $181 thousand (notional amount of $411 thousand).

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 June 30, 2016, the Company had $237.3 million in interest rate swaps at an average rate of 2.6% designated as cash flow hedges for $237.3 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 ten years, due to a shrinking population, a protracted economic recession, a housing sector that remains under pressure, the Puerto Rico government’s fiscal and liquidity crisis, and the recent credit or payment defaults on certain Puerto Rico government bonds, with additional defaults expected if the Puerto Rico government is unable to restructure its debts and/or access the capital markets to place new debt or refinance its upcoming maturities.  Also, the Company’s banking subsidiary has an outstanding $183.0 million credit facility to PREPA that is classified on non-accrual status, which now stands at $129.7 million, net of allowances. The Company recorded a $53.3 million loss provision for such credit facility in 2015.

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.

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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.

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 external 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 June 30, 2016, the Company had $624.5 million in repurchase agreements, excluding accrued interest, and $561.6 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.

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 June 30, 2016, the Company had approximately $517.0 million in unrestricted cash and cash equivalents, $546.5 million in investment securities that are not pledged as collateral, and $895.0 million in borrowing capacity at the FHLB-NY 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.

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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 Chief Compliance Officer who reports to the CEO and the BSA Officer who reports to the Chief Risk Officer. The Chief Compliance Officer is responsible for the oversight of regulatory compliance and implementation of a company-wide compliance program, except for the Bank Secrecy Act/Anti-Money Laundering compliance program, which is overseen and implemented by the BSA Officer.

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 June 30, 2016, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

136

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

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, 2015. 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.

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

None

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.     MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.     OTHER INFORMATION

None.

137

ITEM 6.     EXHIBITS 

Exhibit No.Description of Document:

10       Employment Agreement between the Company and José R. Fernández.

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 June 30, 2016, 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.

138

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: August 5, 2016
	José Rafael Fernández
	President and Chief Executive Officer
By:	/s/ Ganesh Kumar	Date: August 5, 2016
	Ganesh Kumar
	Executive Vice President and Chief Financial Officer
By:	/s/ Maritza Arizmendi	Date: August 5, 2016
	Maritza Arizmendi
	Senior Vice President and Chief Accounting Officer

139

EX-10

 

EXHIBIT 10

EMPLOYMENT AGREEMENT

BETWEEN

OFG BANCORP

AND

JOSÉ RAFAEL FERNÁNDEZ

This Employment Agreement (the “Agreement”) is made and entered into as of the 1^st day of July 2016 , by and between OFG BANCORP, a financial holding company that has its principal office in San Juan, Puerto Rico (the “Company”), and JOSÉ RAFAEL FERNÁNDEZ (the “President and CEO” or “Mr. Fernández”).

WITNESSETH:

WHEREAS, Mr. Fernández has been an executive officer of the Company since June 1991, is presently the Company’s President, Chief Executive Officer, and Vice Chairman of the Board of Directors, and the retention of his services for and on behalf of the Company is of material importance to the preservation and enhancement of the value of the Company's business;

WHEREAS, the Company and the President and CEO wish to enter into this Agreement and intend that this Agreement shall become effective on July 1, 2016 (the “Effective Date”), and replace the Employment Agreement, dated August 22, 2013 (the “2013 Employment Agreement”), between the Company and the President and CEO, which is now in effect;

NOW THEREFORE, in consideration of the mutual covenants herein set forth, the Company and the President and CEO do hereby agree as follows:

1.TERM OF EMPLOYMENT

1.1 The Company hereby employs Mr. Fernández as its President and Chief Executive Officer, and Mr. Fernández hereby accepts said employment and agrees to render such services to the Company on the terms and conditions set forth in this Agreement for a term of three (3) years commencing on the Effective Date and terminating on June 30, 2019, unless further extended or sooner terminated in accordance with the terms and conditions herein set forth.

Unless written notice of non-renewal is given by either party not less than one hundred twenty (120) days in advance of the expiration of the term, this Agreement will be automatically extended for one (1) additional year.  Unless otherwise agreed to in writing by Mr. Fernández and the Company, and except in the event of a termination for just cause pursuant to Section 6.1 hereof or a removal or bar from office pursuant to Section 6.5 hereof, Mr. Fernández shall remain as an employee of the Company after the

expiration of the term of this Agreement and shall be entitled to all the rights and benefits of an employee under the laws of the Commonwealth of Puerto Rico.

1.2 During the term of this Agreement, the President and CEO shall devote his best efforts to performing such services for the Company as may be consistent with his title of President and Chief Executive Officer and those which from time to time may be assigned to him by the Company’s Board of Directors (the “Board of Directors”).

1.3 The services of the President and CEO to the Company shall be rendered principally in the Commonwealth of Puerto Rico, but he shall do such traveling on behalf of the Company as may be reasonably required by his duties.

1.4 The President and CEO shall report directly to the Board of Directors and shall have overall responsibility for all of the business and affairs of the Company, including making all determinations concerning hiring, dismissal and compensation for all classes of employees of the Company (exception in the case of the Head of the Company’s Internal Audit Department), which determinations shall be in accordance with the policies for such hiring, dismissal and compensation established by the Compensation Committee of the Board of Directors (the “Compensation Committee”) from time to time and in accordance with applicable laws, rules and regulations, including the applicable regulations of the Federal Deposit Insurance Corporation (the “FDIC”), the Board of Governors of the Federal Reserve System (the “FRB”), the Securities and Exchange Commission (“SEC”), and the Office of the Commissioner of Financial Institutions of Puerto Rico (the “OCFI”).

1.5 The President and CEO shall continue to occupy his position as Vice Chairperson of the Board of Directors.  Furthermore, during the term of this Agreement and any extension thereof, and in any election of directors in which his term as a member of the Board of Directors will expire, the Board of Directors shall nominate and recommend to the Company’s stockholders the election of Mr. Fernández to the Board of Directors and, if elected, the Board of Directors shall appoint him as its Vice Chairperson. It is further provided that in the event that Mr. Julian S. Inclán ceases, for any reason, to be the Chairperson of the Board of Directors, the Board of Directors shall appoint Mr. Fernández as its Chairperson. It is understood and agreed that the Board’s commitment to appoint Mr. Fernández Chairperson as set forth above shall be in effect only while this Agreement is in effect, and that this provision does not establish an acquired right to such appointment in favor of Mr. Fernández following the termination of this Agreement. 

2.COMPETITIVE ACTIVITIES

2.1 The President and CEO agrees that during the term of this Agreement, except with the express written consent of the Board of Directors, he will not, directly or indirectly, engage or participate in, become a director of, or render advisory or other services for, or in connection with, or become interested in, or make financial investment in any firm, corporation, business entity or business enterprise; provided, however, that the President and CEO shall not thereby be precluded or prohibited from owning passive investments including investments in the securities of other financial institutions, so long as such ownership does not require him to devote substantial time to management or control of the business or activities in which he has invested.

2.2 The President and CEO agrees and acknowledges that during the time that he is employed by the Company, he will maintain an intimate knowledge of the activities and affairs of the Company including trade secrets and other confidential matters.  As a result, and also because of the special, unique, and extraordinary services that the President and CEO is capable of performing for the Company or one of its competitors, the President and CEO recognizes that the services to be rendered by him hereunder are of a character giving them a peculiar value, the loss of which cannot be adequately or reasonably compensated for by damages.  Therefore, if during the time he is employed by the Company, the President and CEO renders services to a competitor of the Company other than as authorized pursuant to Section 2.1 hereof, the Company shall be entitled to immediate injunctive or other equitable relief to restrain the President and CEO from rendering his services to the competitor of the Company, in addition to any other remedies to which the Company may be entitled under law; provided, however, that the right to such injunctive or other equitable relief shall not survive the termination of the President and CEO’s employment with the Company.

3.COMPENSATION AND REIMBURSEMENT OF EXPENSES

3.1 Compensation. 

(a)The Company will compensate and pay the President and CEO an annual base salary of eight hundred sixty-five thousand dollars ($865,000) equivalent to seventy two thousand eighty three dollars and thirty three cents ($72,083.33) per month for his services to the Company during the term of this Agreement.

(b)Not later than March 31 of each contract year, the Compensation Committee shall evaluate and determine the amount of any increase to the President and CEO’s annual base salary. Any increases to the President and CEO’s annual base salary determined by the Compensation Committee shall be effective on January  1 of the then running contract year and the increased annual base salary shall become the President and CEO’s new contractual annual base salary.

3.2 Bonus.  The Company shall set for the President and CEO an annual target bonus of one hundred  percent ( 100%) of his annual base salary as may be earned by him under the Company’s non-equity incentive bonus plan (the “Incentive Bonus”).  The bonus shall be due and payable on or before March 31 of each contract year of this Agreement commencing with the bonus corresponding to calendar year 2016 due and payable on or before March 31, 2017.

3.3 Expense Allowance. During the term of this Agreement and any extension thereof, the Company shall provide the President and CEO an annual expense allowance (the “Expense Allowance”)in the amount of eighty five thousand dollars ($85,000) from which the President and CEO shall pay his (i) car-related expenses; (ii) membership expenses for social, business or professional organizations (all such membership(s) shall be maintained in the name of the President and CEO); and (iii) any other expenses which, in his judgment, are reasonably appropriate for the performance of his duties under this Agreement.

3.4 Reimbursement of Expenses.  Not less frequently than monthly, the Company shall pay for or reimburse the President and CEO for all reasonable travel and other expenses incurred by the President and CEO in the performance of his duties under this Agreement, including, without limiting the generality of the foregoing, the Expense Allowance provided for in Section 3.3 above.

3.5 Life Insurance.  The Company shall renew for an additional ten (10) year term the existing ten (10) year term life insurance policy in the sum of three million dollars ($3,000,000) covering the life of the President and CEO and having as its beneficiary the spouse and heirs of Mr. Fernández; provided, that the President and CEO may designate in writing from to time any other person or entity as its beneficiary.    For as long as the President and CEO is employed by the Company, all premiums and costs associated with such term life insurance policy  shall be for the account of the Company.

3.6 Vacation.  The President and CEO shall be entitled to twenty-five (25) days of paid vacation each year during the term of this Agreement.

4.DISABILITY

4.1 If the President and CEO shall become physically or mentally disabled or incapacitated to the extent that he is unable to perform his duties under this Agreement, and so long as such disability continues, the President and CEO shall, subject to the provisions of Section 6.2 and 6.3 hereof, and for a period not to exceed the remaining term of this Agreement, continue to receive his full compensation, as set forth in Section 3 hereof, including an annual cash bonus equal to the annual cash bonus paid to him in the last fiscal year prior to his disability or incapacitation.

4.2 There shall be deducted from the amounts paid to the President and CEO hereunder during any period of disability or incapacitation, as described in Section 4.1 hereof, any amounts actually paid to the President and CEO pursuant to any disability insurance or other similar program(s) which the Company has instituted or may institute on behalf of its employees for the purpose of providing compensation in the event of disability.

5.ADDITIONAL COMPENSATION AND BENEFITS

5.1 During the term of this Agreement, the President and CEO will be entitled to participate in, and receive the benefits of, any equity-based compensation plan, profit sharing plan, or other plans, benefits and privileges given to employees and executives of the Company or its subsidiaries and affiliates which may now exist or come into existence hereinafter, to the extent commensurate with his then duties and responsibilities, as fixed by the Compensation Committee, and, to the extent that the President and CEO is otherwise eligible and qualifies, to so participate in, and receive such benefits or privileges.  The Company shall not make any changes in such plans, benefits or privileges which would adversely affect the President and CEO’s rights or benefits there under, unless such change or changes are made pursuant to a program applicable to all executives of the Company and does not result in a proportionately greater adverse change in the rights of or benefits to the President and CEO as compared to any executive officer of the Company.  Nothing paid to the President and CEO under any plan or arrangement presently in effect or made available in the future shall be deemed in lieu of the annual base salary, Incentive Bonus, Special Bonus, Expense Allowance and term life insurance payable or provided to the President and CEO pursuant to Sections 3.1, 3.2, 3.3 and 3.5 hereof.

5.2     (a) In consideration for agreeing to renew his employment with the Company for a period of three years, Mr. Fernández  will be paid a special bonus in the amount of $850,000 payable upon the expiration of the term of this Agreement(the “Special Bonus”). If Mr. Fernández employment is terminated for any reason before the expiration of the term of this Agreement he will be paid a prorated portion of the Special Bonus computed through the effective date of the termination of his employment.

(b) The Compensation Committee shall consider in each contract year of this Agreement granting the President and CEO additional incentive compensation under the Company’s equity-based compensation plan based on his performance scorecard, as approved by the Compensation Committee, up to an annual amount equal to eighty five percent (85%) of his annual base salary. The incentive compensation grants to the President and CEO shall be made on or before March 31 of each contract year of this Agreement commencing with the year 2017. As long as he is in compliance with the requirements of the Company’s Stock Ownership Policy, with respect to any incentive compensation award granted to him by the Compensation Committee, the President and CEO shall have the option of electing to receive the award in deferred cash equivalents. 

(c) Restrictions on the restricted stock units granted to the President and CEO hereunder will expire on the third anniversary of the award or earlier in the event of a Change of Control of the Company, as defined in the Change in Control Compensation Agreement between the Company and the President and CEO, dated December 5, 2004, as amended (the “Change in Control Compensation Agreement”), or if the President and CEO dies or becomes disabled.

6.TERMINATION

6.1 The Board of Directors shall have the right, at any time upon prior written Notice of Termination (as defined in Section 6.8(b) hereof), to terminate the President and CEO’s employment hereunder for just cause or in connection with a removal or bar from office pursuant to Section 6.5 hereof.  For purposes of this Agreement, the term “termination for just cause” shall mean termination because of the willful and continued failure of the President and CEO to perform his duties under this Agreement, or the willful engaging by the President and CEO in illegal conduct or gross misconduct materially injurious to the Company as determined by a court of competent jurisdiction or a federal or state regulatory agency having jurisdiction over the Company.  For purposes of this paragraph, no act, or failure to act, on the part of the President and CEO shall be considered “willful” unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the best interest of the Company; provided, however, that any act or omission to act by the President and CEO in reliance upon an opinion of counsel to the Company or counsel to the President and CEO shall not be deemed to be willful.

6.2 In the event the President and CEO’s employment is terminated for just cause pursuant to Section 6.1 hereof or he is removed or barred from office pursuant to Section 6.5 hereof, the President and CEO shall have no right to compensation or other benefits for any period after such date of termination.  If the President and CEO is terminated by the Company other than for just cause pursuant to Section 6.1 hereof, other than in connection with a removal or bar from office pursuant to Section 6.5 hereof, and other than in connection with a Change of Control of the Company, as defined in the Change in Control Compensation Agreement, the

President and CEO’s right to compensation and other benefits under this Agreement shall be as set forth in Sections 6.8(c) and (d) hereof.

6.3 The President and CEO shall have the right, upon prior written Notice of Termination of not less than thirty (30) days, to terminate his employment hereunder.  In such event, the President and CEO shall have the right, as of the date of termination, to receive all accrued compensation and other benefits provided for in this Agreement; provided, however, that if the President and CEO terminates his employment hereunder for “good reason” pursuant to Section 6.8(a) hereof he shall be entitled to receive the severance payment provided for in Section 6.8(c) hereof.  If the President and CEO provides a Notice of Termination for good reason, the date of termination shall be the date on which the Notice of Termination is given to the Company.

6.4 If the President and CEO is suspended from office and/or temporarily prohibited from participating in the conduct of the Company’s affairs pursuant to a notice served under the Federal Deposit Insurance Act (“FDIA”), the Federal Reserve Act (“FRA”), the Bank Holding Company Act of 1956 (the “BHCA”), the Securities Exchange Act of 1934 (the “SEA”), or the Puerto Rico Banking Act (the “PRBA”), each as amended from time to time, the Company’s obligations under this Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Company shall:  (i) pay the President and CEO all the compensation withheld while contractual obligations were suspended, and (ii) reinstate in whole or in part, as applicable, any of the Company’s obligations which were suspended.

6.5 If the President and CEO is removed from office and/or permanently prohibited from participating in the conduct of the Company’s affairs by an order issued under the FDIA, the FRA, the BHCA, the SEA, or the PRBA all obligations of the Company under this Agreement shall terminate, as of the effective date of the order, but the rights of the President and CEO to compensation earned as of the date of termination shall not be affected.

6.6 If the Company is in default, as defined to mean an adjudication or other official determination of a court of competent jurisdiction or other public authority pursuant to which a conservator, receiver or other legal custodian is appointed for the Company for the purpose of liquidation, all obligations under this Agreement shall terminate as of the date of default, but the rights of the President and CEO to compensation and benefits accrued as of the date of termination shall not be affected.

6.7 In the event that the President and CEO is terminated in a manner which violates the provisions of Section 6.1 hereof, as determined by a court of competent jurisdiction, the President and CEO shall be entitled to reimbursement for all reasonable costs, including attorneys’ fees, in challenging such termination.  Such reimbursement shall be in addition to all rights to which the President and CEO is otherwise entitled under this Agreement.

6.8     (a) The President and CEO may terminate his employment hereunder for good reason.  For purposes of this Agreement, the term “good reason” shall mean (i) a failure by the Company to comply with any material provision of this Agreement, which failure has not been cured within ten (10) days after a notice of such noncompliance has been given by the President and CEO to the Company; (ii) any purported termination of the President and CEO’s employment hereunder which is not effected pursuant to a Notice of Termination (and for purposes of this Agreement no such purported termination shall be effective); (iii) any reduction in the

President and CEO’s compensation and fringe benefits, including a reduction in his Incentive Bonus  opportunity, or Special Bonus, without his written consent; (iv) failure to nominate the President and CEO for reelection as a member of the Board of Directors and, if elected, failure to appoint him as Vice Chairman or Chairman of the Board of Directors as herein provided; (v) a material diminution in his positions, duties and authorities as President and Chief Executive Officer of the Company; (vi) if President and CEO is not the President and Chief Executive Officer of the ultimate parent entity resulting from a Change of Control of the Company, as defined in the Change in Control Compensation Agreement; (vii) a change in reporting structure so that the President and CEO reports to someone other than the Board of Directors, or (viii) the failure of any successor to all or substantially all of the Company’s assets to assume this Agreement whether in writing or by operation of law.

(b) Any termination of the President and CEO’s employment by the Company or by the President and CEO shall be communicated by a written Notice of Termination to the other party hereto.  For purposes of this Agreement, the term “Notice of Termination” shall mean a dated notice which shall (i) indicate the specific termination provision in the Agreement relied upon; (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the President and CEO’s employment under the provision so indicated; (iii) specify a date of termination, which shall be not less than thirty (30) nor more than ninety (90) days after such Notice of Termination is given, except in the case of the Company’s termination of the President and CEO’s employment for just cause pursuant to Section 6.1 hereof or in connection with a removal or bar from office pursuant to Section 6.5 hereof, in which case the Notice of Termination may specify a date of termination as of the date such Notice of Termination is given; and (iv) be given in the manner specified in Section 9.1 hereof.

(c) In the event that:  (i) the President and CEO shall terminate his employment for good reason as defined in Section 6.8(a) hereof, or (ii) if the President and CEO is terminated by the Company other than for just cause pursuant to Section 6.1 hereof, other than in connection with a removal or bar from office pursuant to Section 6.5 hereof, and other than in connection with a Change of Control of the Company, as defined in the Change in Control Compensation Agreement, then in lieu of any further compensation to the President and CEO for periods subsequent to the date of termination, the Company shall pay as severance to the President and CEO (subject to the approval of the FDIC, if required) an amount equal to the product of (A) the aggregate annual compensation paid to or payable by the Company and any of its subsidiaries to the President and CEO during the year in which the termination of the President and CEO’s employment occurs, which amount shall include the President and CEO’s (i) annual base salary, (ii) Incentive Bonus  (equal to the average aggregate cash bonuses paid to the President and CEO in the last two fiscal years prior to the date of termination of employment), (iii)  Expense Allowance, and (iv) equity awards or its equivalent(equal to the average of the aggregate grant date fair value of the equity awards granted to the President and CEO in the last two fiscal years prior to the date of termination of employment, multiplied by (B) 3.00, such payment to be made in a lump sum on or before the fifth day following the date of termination.

(d) Unless the President and CEO’s employment is terminated for just cause pursuant to Section 6.1 hereof, or in connection with a removal or bar from office pursuant to Section 6.5 hereof, or in connection with a Change of Control of the Company, as defined in the Change in Control Compensation Agreement, the Company shall maintain in full force and effect (subject to the approval of the FDIC, if required), for the continued benefit of the President and CEO for the balance of the term of this

Agreement (as such term may have been extended as provided herein), all employee benefit plans and programs in which the President and CEO was entitled to participate immediately prior to the date of termination, provided that the President and CEO’s continued participation is possible under the general terms and provisions of such plans and programs, and, further provided, that the Company shall not be obligated to continue the payment of health benefits if the President and CEO receives equal or greater health benefits under the medical plan of a subsequent employer.

(e) The President and CEO shall not be required to mitigate the amount of any payment provided for in paragraphs (c) and (d) of this Section 6.8 by seeking other employment or otherwise.

7.INDEMNIFICATION

7.l The Company shall indemnify the President and CEO to the fullest extent authorized by applicable federal and Commonwealth of Puerto Rico laws and regulations, with respect to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) that the President and CEO is a party or is threatened to made a party by reason of the fact that he is or was the President and Chief Executive Officer of the Company or that he is or was a member of the Board of Directors, or is or was serving at the written request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other  enterprise, against costs and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a matter he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, provided that the Company shall not be liable for any amounts which may be due to the President and CEO in connection with a settlement of any action, suit or proceeding effected without its prior written consent or any action, suit or proceeding initiated by the President and CEO seeking indemnification hereunder without its prior written consent.  The provisions of this Section 7.1 shall also extend the conjugal partnership of the President and CEO and his spouse and to the President and CEO’s spouse, when applicable, and shall survive the termination of this Agreement.

8. SUCCESSORS OF THE PARTIES

8.1 This Agreement shall inure to the benefit of and be binding upon the President and CEO, and, to the extent applicable, his assigns, executors, and personal representatives and the Company, its successors, and assigns, including, without limitation, any person, partnership, or corporation which may acquire all or substantially all of the Company’s assets and business, or with or into which the Company may be consolidated or merged, and this provision shall apply in the event of any subsequent merger, consolidation, or transfer.

8.2 This Agreement is personal to each of the parties hereto and neither party may assign or delegate any of his or its rights or obligations hereunder without first obtaining the written consent of the other party.

9. NOTICES

9.1 All notices required by this Agreement to be given by one party to the other shall be in writing and shall be deemed to have been delivered either:

(a) When personally delivered to the office of the Secretary of the Company at his regular corporate office, or the President and CEO in person; or

(b) Five days after depositing such notice in the United States mails, certified mail with return receipt requested and postage prepaid to:

(i)         José Rafael Fernández

(at the address of record in his employment

file with the Company)

(ii)        OFG Bancorp

P.O. Box 195115

San Juan, Puerto Rico 00919-5115

Attention:  Chairman–Compensation Committee

or such other address as either party may designate to the other by notice in writing in accordance with the terms hereof.

10. AMENDMENTS OR ADDITIONS

10.1 No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties.  The prior approval by a two-thirds affirmative vote of the full Board of Directors shall be required in order for the Company to authorize any amendments or additions to this Agreement, to give any consent or waivers of provisions of this Agreement, or to take any other action under this Agreement including any termination of the employment of the President and CEO with or without just cause under Section 6.1 hereof.

11. MISCELLANEOUS

11.1 No course of conduct between the Company and President and CEO to exercise any right or power given under this Agreement shall: (i) impair the subsequent exercise of any right or power, or (ii) be construed to be a waiver of any default or any acquiescence in or consent to the curing of any default while any other default shall continue to exist, or be construed to be a waiver of such continuing default or of any other right or power that shall theretofore have arisen; and, every power and remedy granted by law and by this Agreement to any party hereto may be exercised from time to time, and as often as may be deemed expedient. All such rights and powers shall be cumulative to the fullest extent permitted by law.

11.2 The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

11.3 This Agreement shall be governed in all respects and be interpreted by and under the laws of the Commonwealth of Puerto Rico, except to the extent that such law may be preempted by applicable federal law, including applicable regulations, opinions or orders duly issued by the FDIC, the FRB or the SEC (“Federal Law”), in which event this Agreement shall be governed and be interpreted by and under Federal Law.  Venue for the litigation of any and all matters arising under or in connection with this Agreement shall be laid in the United States District Court for the District of Puerto Rico, in the case of federal jurisdiction, and in the Court of First Instance, Superior Part of San Juan, of the Commonwealth of Puerto Rico, in the case of state court jurisdiction.

11.4 Notwithstanding anything to the contrary herein contained, the payment or obligation to pay any monies or granting of any rights or privileges to the President and CEO as provided in this Agreement shall not be in lieu or derogation of the rights and privileges that the President and CEO now has under any plan orbenefit presently outstanding.

11.5 As used herein, the term “Company” shall include all of the Company’s subsidiaries.

11.6 This Agreement constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and, as of the Effective Date, supersedes all prior agreements and understandings, whether written or oral, relating to such subject matter.

11.7 This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same agreement.

11.8 The heading of each section or paragraph of this Agreement is for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.

IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement in San Juan, Puerto Rico, as of the date first above written.

PRESIDENT AND CEO

/s/ José Rafael Fernandez  

José Rafael Fernández

OFG BANCORP

By:        Compensation Committee of the

Board of Directors

By:         /s/ Jorge Colón Gerena

Jorge Colón Gerena

Chairman – Compensation Committee

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: August 5, 2016

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: August 5, 2016

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 June 30, 2016, 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 5th day of August, 2016.

                                                                                                                      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 June 30, 2016, 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 5th day of August, 2016.

By:         /s/ Ganesh Kumar

               Ganesh Kumar

Executive Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 29, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	OFG BANCORP
Entity Central Index Key	0001030469
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		43,913,719

XML

Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Cash and cash equivalents
Cash and Due from Banks	$ 511,308	$ 532,010
Money market investments	5,740	4,699
Total cash and cash equivalents	517,048	536,709
Restricted Cash	3,030	3,349
Investments:
Trading Securities, at fair value	348	288
Investment securities available-for-sale, at fair value	664,302	974,609
Investment securities held-to-maturity, at amortized cost	635,399	620,189
Federal Home Loan Bank (FHLB) stock, at cost	19,838	20,783
Other investments	3	3
Total investments	1,319,890	1,615,872
Loans:
Mortgage loans held-for-sale	18,209	13,614
Loans held for investment, net	4,355,408	4,420,599
Total loans, net	4,373,617	4,434,213
Other asset
FDIC indemnification asset	18,426	22,599
Foreclosed real estate not covered under shared-loss agreements with the FDIC	51,220	58,176
Accrued interest receivable	20,009	20,637
Deferred tax asset, net	143,048	145,901
Premises and equipment, net	72,585	74,590
Customers' liability on acceptances	20,984	14,582
Servicing Assets	7,932	7,455
Derivative assets	1,926	3,025
Goodwill	86,069	86,069
Other assets	76,812	75,972
Total assets	6,712,596	7,099,149
Deposits:
Demand deposits	1,972,743	1,862,572
Savings accounts	1,176,169	1,179,229
Tme Deposits	1,495,142	1,675,950
Total deposits	4,644,054	4,717,751
Borrowings:
Securities Sold under Agreements to Repurchase	626,109	934,691
Advances from FHLB	306,480	332,476
Subordinated capital notes	102,983	102,633
Other borrowings	1,753	1,734
Total borrowings	1,037,325	1,371,534
Derivative liabilities	5,413	6,162
Acceptances executed and outstanding	20,984	14,582
Accrued expenses and other liabilities	88,930	92,043
Total liabilities	5,796,706	6,202,072
Stockholders' equity:
Preferred Stock	92,000	92,000
Convertible Preferred Stock	84,000	84,000
Common stock	52,626	52,626
Additional paid-in capital	540,705	540,512
Legal surplus	73,265	70,435
Retained earnings	162,363	148,886
Treasury stock, at cost	(104,874)	(105,379)
Accumulated other comprehensive income, net of tax, Total	15,805	13,997
Total stockholders' equity	915,890	897,077
Total liabilities and stockholders' equity	$ 6,712,596	$ 7,099,149

XML

Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Amortized cost of trading securities	$ 667,000	$ 667,000
Amortized cost of investment securities available-for-sale	645,298,000	955,646,000
Fair value of held to maturity securities	643,530,000	614,679,000
Allowance for loan and lease losses	$ 162,216,000	$ 234,131,000
Preferred stock, shares authorized	10,000,000	10,000,000
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	52,625,869	52,625,869
Common stock, shares outstanding	43,913,719	43,867,909
Treasury stock, at cost, shares	8,712,150	8,757,960
Tax effect on accumulated other comprehensive income (loss)	$ (456,000)	$ 1,182,000
Series A Preferred Stock
Preferred stock, shares issued	1,340,000	1,340,000
Preferred stock, liquidation value	$ 25	$ 25
Series B Preferred Stock
Preferred stock, shares issued	1,380,000	1,380,000
Preferred stock, liquidation value	$ 25	$ 25
Series C Convertible Preferred Stock
Preferred stock, shares issued	84,000	84,000
Preferred stock, liquidation value	$ 1,000	$ 1,000
Series D Preferred Stock Member
Preferred stock, shares issued	960,000	960,000
Preferred stock, liquidation value	$ 25	$ 25

XML

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest income:
Total interest income from loans	$ 79,675	$ 90,504	$ 160,827	$ 187,987
Mortgage-backed securities	7,220	7,998	16,217	16,587
Investment securities and other	1,013	911	2,170	1,840
Total interest income	87,908	99,413	179,214	206,414
Interest expense:
Deposits	7,367	6,604	14,491	13,708
Securities sold under agreements to repurchase	4,258	7,394	10,358	14,558
Advances from FHLB and other borrowings	2,098	2,248	4,337	4,483
Subordinated capital notes	873	875	1,741	1,738
Total interest expense	14,596	17,121	30,927	34,487
Net interest income	73,312	82,292	148,287	171,927
Provision for Loan, Lease, and Other Losses	14,445	15,539	28,234	57,732
Net interest income after provision for loan and lease losses	58,867	66,753	120,053	114,195
Non-interest income:
Banking service revenues	10,219	10,212	20,337	20,417
Wealth management revenue	7,041	7,285	13,193	14,440
Mortgage banking activities	1,024	1,862	1,879	3,725
Total Banking and Financial Service Revenues	18,284	19,359	35,409	38,582
FDIC shared-loss expense, net [Abstract]
FDIC shared-loss expense, net	(3,420)	(23,245)	(7,449)	(36,329)
Net gain (loss) on:
Sale of securities	211	0	12,207	2,572
Derivatives	(10)	77	(13)	(13)
Early extinguishment of debt	0	0	(12,000)	0
Other non-interest (loss) income	90	(847)	504	(2,587)
Total non-interest income, net	15,155	(4,656)	28,658	2,225
Non-interest expense:
Compensation and employee benefits	18,531	19,260	38,815	39,440
Professional and service fees	3,511	4,143	7,138	8,324
Occupancy and equipment	8,107	8,883	15,929	17,519
Insurance	3,155	2,251	6,305	4,204
Electronic banking charges	4,947	5,851	10,536	11,218
Information technology related expenses	1,606	1,543	3,262	2,997
Advertising, business promotion, and strategic initiatives	1,343	1,558	2,786	3,186
Foreclosure, repossession and other real estate expenses	5,164	10,337	7,971	15,783
Loan servicing and clearing expenses	1,926	2,594	4,007	4,947
Taxes, other than payroll and income taxes	2,330	2,703	5,001	4,182
Communication	581	770	1,400	1,460
Printing, postage, stationary and supplies	600	582	1,325	1,219
Director and investors relations	301	289	579	583
Other	1,723	3,673	3,628	5,707
Total non-interest expense	53,825	64,437	108,682	120,769
Income before income taxes	20,197	(2,340)	40,029	(4,349)
Income tax expense (benefit)	5,858	769	11,519	1,748
Net (loss) income	14,339	(3,109)	28,510	(6,097)
Dividends on preferred stock	(3,466)	(3,466)	(6,931)	(6,931)
Income (loss) available to common shareholders	$ 10,873	$ (6,575)	$ 21,579	$ (13,028)
Earnings (loss) per common share:
Basic	$ 0.25	$ (0.15)	$ 0.49	$ (0.29)
Diluted	$ 0.25	$ (0.15)	$ 0.49	$ (0.29)
Average common shares outstanding and equivalents	51,095	51,774	51,081	51,876
Cash dividends per share of common stock	$ 0.06	$ 0.1	$ 0.12	$ 0.2

XML

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net (loss) income	$ 14,339	$ (3,109)	$ 28,510	$ (6,097)
Other comprehensive income (loss) before tax:
Unrealized gain (loss) on securities available-for-sale	3,719	(12,916)	12,364	(5,541)
Realized gain on investment securities included in net income	(211)	0	(12,207)	(2,572)
Unrealized gain (loss) on cash flow hedges	663	2,016	652	2,071
Other comprehensive income (loss) before taxes	4,171	(10,900)	809	(6,042)
Income tax effect	(650)	877	999	632
Other Comprehensive Income (Loss) After taxes	3,521	(10,023)	1,808	(5,410)
Comprehensive income (loss)	$ 17,860	$ (13,132)	$ 30,318	$ (11,507)

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Legal Surplus [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning Balance at Dec. 31, 2014		$ 176,000	$ 52,626	$ 539,311	$ 70,467	$ 181,152	$ (97,070)	$ 19,711
Stock-based compensation expense				794
Lapsed restricted stock units				(436)			640
Transfer from retained earnings/transfer to legal surplus					(533)	533
Net (loss) income	$ (6,097)					(6,097)
Cash dividends declared on common stock						(8,920)
Cash dividends declared on preferred stock						(6,931)
Stock purchased	4,238						4,238
Other comprehensive loss, net of tax	(5,410)							(5,410)
Ending Balance at Jun. 30, 2015	911,599	176,000	52,626	539,669	69,934	159,737	(100,668)	14,301
Beginning Balance at Dec. 31, 2014		176,000	52,626	539,311	70,467	181,152	(97,070)	19,711
Net (loss) income	28,510
Ending Balance at Dec. 31, 2015	897,077	176,000	52,626	540,512	70,435	148,886	(105,379)	13,997
Stock-based compensation expense				698
Lapsed restricted stock units				(505)			505
Transfer from retained earnings/transfer to legal surplus					2,830	(2,830)
Net (loss) income	28,510					28,510
Cash dividends declared on common stock						(5,272)
Cash dividends declared on preferred stock						(6,931)
Stock purchased	0
Other comprehensive loss, net of tax	1,808							1,808
Ending Balance at Jun. 30, 2016	$ 915,890	$ 176,000	$ 52,626	$ 540,705	$ 73,265	$ 162,363	$ (104,874)	$ 15,805

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net (loss) income	$ 28,510	$ (6,097)
Adjustments to reconcile net income to net cash provied by (used in) operating activities:
Amortization of deferred loan origination fees, net of costs	1,977	1,813
Amortization of fair value premiums, net of discounts, on acquired loans	39	2,766
Amortization of investment securities premiums, net of accretion of discounts	4,356	5,931
Amortization of core deposit and customer relationship intangibles	839	953
Amortization of fair value premium of acquired deposits	189	478
FDIC Loss Share Expense	7,449	36,329
Depreciation and amortization of premises and equipment	5,025	5,930
Deferred income taxes, net	3,543	(1,316)
Provision for loan and lease losses, net	28,234	57,732
Stock-based compensation	698	794
(Gain) loss on:
Sale of securities	(12,207)	(2,572)
Sale of mortgage loans held for sale	(809)	(2,010)
Gain on sale of derivatives and on sale of TBA	88	(113)
Early extinguishment of debt	12,000	0
Foreclosed real estate	7,287	(706)
Sale of other repossessed asset	(1,235)	3,427
Sale of premises and equipment	13	10
Originations of loans held-for-sale	(90,052)	(111,433)
Proceeds from sale of loans held-for-sale	32,212	46,678
Net (increase) decrease in:
Trading securities	(60)	808
Accrued interest receivable	628	2,091
Servicing Assets	(477)	1,216
Other assets	(4,872)	(19,813)
Net increase (decrease) in:
Accrued interest on deposits and borrowings	(373)	(608)
Accrued expenses and other liabilities	8,253	24,219
Net cash provided by (used in) operating activities	31,255	46,507
Purchases of:
Investment securities available-for-sale	(302)	(1,671)
Investment securities held-to-maturity	(51,717)	(399,206)
FHLB stock	(8,512)	0
Maturities and Redemptions of [Abstract]
Investment securities available-for-sale	74,208	121,121
Investments securities held-to-maturity	34,304	10,725
FHLB Stock	9,457	343
Proceeds from sale of:
Investment securities available for sale	300,483	103,831
Foreclosed real estate and other repossessed assets, including write-offs	25,779	34,136
Proceeds From Sale And Collection of Loans Held for Sale	478	0
Premises and equipment	44	10
Proceeds From Sale Of Mortgage Servicing Rights MSR	0	5,927
Origination and purchase of loans, excluding loans held-for-sale	(373,927)	(414,725)
Principal repayment of loans, including covered loans	386,477	491,330
Reimbursements from the FDIC on shared-loss agreements	738	31,657
Additions to premises and equipment	(3,077)	(1,838)
Net change in restricted cash	(319)	(2,321)
Net cash provided by investing activities	394,752	(16,039)
Net increase (decrease) in:
Deposits	(87,864)	(209,272)
Securities sold under agreements to repurchase	(320,000)	181,129
FHLB advances, federal funds purchased, and other borrowings	(25,951)	(2,845)
Subordinated capital notes	350	525
Exercise of stock options and restricted units lapsed, net	0	204
Purchase of treasury stock	0	(4,238)
Dividends paid on preferred stock	(6,931)	(6,931)
Dividends paid on common stock	(5,272)	(8,932)
Net cash used in financing activities	(445,668)	(50,360)
Net change in cash and cash equivalents	(19,661)	(19,892)
Cash and cash equivalents at beginning of period	536,709	573,427
Cash and cash equivalents at end of period	517,048	553,535
Supplemental Cash Flow Disclosure and Schedule of Non-cash Activities:
Interest paid	30,454	34,403
Income Taxes Paid	3,642	6,730
Mortgage loans securitized into mortgage-backed securities	53,872	61,854
Transfer from loans to foreclosed real estate and other repossessed assets	21,865	15,390
Reclassification of loans held-for-investment portfolio to held-for-sale portfolio	0	1,473
Reclassification of loans held-for-sale portfolio to investment portfolio	$ 182	$ 156

XML

Organization, Consolidation and Basis of Presentation

6 Months Ended

Jun. 30, 2016

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 Company operates through various subsidiaries including, a commercial bank, Oriental Bank (the “Bank”), a securities broker-dealer, Oriental Financial Services Corp. (“Oriental Financial Services”), an insurance agency, Oriental Insurance, LLC (“Oriental Insurance”) and a retirement plan administrator, Oriental Pension Consultants, Inc. (“OPC”). 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 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 VizcayaArgentaria 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.

Significant Accounting Policies

Recent Accounting Developments

In June 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance that will require the earlier recognition of credit losses on loans and other financial instruments based on an expected loss model, replacing the incurred loss model that is currently in use. Under the new guidance, an entity will measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The expected loss model will apply to loans and leases, unfunded lending commitments, held-to-maturity (HTM) debt securities and other debt instruments measured at amortized cost. The impairment model for available-for-sale (AFS) debt securities will require the recognition of credit losses through a valuation allowance when fair value is less than amortized cost, regardless of whether the impairment is considered to be other-than-temporary. The new guidance is effective on January 1, 2020, with early adoption permitted on January 1, 2019. The Company is in the process of evaluating the impact of the provisions of this new accounting guidance.

In March 2016, the FASB issued new accounting guidance that simplifies certain aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance is effective on January 1, 2017, with early adoption permitted. The Company does not expect the provisions of this new accounting guidance to have a material impact on its consolidated financial position or results of operations.

In February 2016, the FASB issued new accounting guidance that requires substantially all leases to be recorded as assets and liabilities on the balance sheet. This new accounting guidance is effective on January 1, 2019, with early adoption permitted. Upon adoption, the Company will record a right of use asset and a lease payment obligation associated with arrangements previously accounted for as operating leases. The Company is in the process of evaluating the impact of the provisions of this new accounting guidance on its consolidated financial position, but does not expect the new accounting guidance to have a material impact on its consolidated financial position or results of operations.

In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial instruments. The new guidance makes targeted changes to existing GAAP including, among other provisions, requiring certain equity investments to be measured at fair value with changes in fair value reported in earnings and requiring changes in instrument-specific credit risk. The new guidance is effective on January 1, 2018. The Company does not expect the provisions of this new accounting guidance to have a material impact on its consolidated financial position or results of operations.

In May 2014, the FASB issued new accounting guidance to clarify the principles for recognizing revenue from contracts with customers. This new accounting guidance is effective on January 1, 2018. The Company does not expect the provisions of this new accounting guidance to have a material impact on its consolidated financial position or results of operations.

XML

Resticted Cash

6 Months Ended

Jun. 30, 2016

Restricted Cash And Investments Abstract

Resticted Cash Disclosure

NOTE 2–RESTRICTED CASH

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

	June 30,		December 31,
	2016		2015
	(In thousands)
Cash pledged as collateral to other financial institutions to secure:
Derivatives	$	1,980	$	1,980
Obligations under agreement of loans sold with recourse		1,050		1,369
	$	3,030	$	3,349

At June 30, 2016 and December 31, 2015, the Bank’s international banking entities, Oriental International Bank Inc. (“OIB”) and Oriental Overseas, a division of the Bank, each held unencumbered certificates of deposit in the amount of $300 thousand as the legal reserve required for international banking entities under Puerto Rico law. Each certificate of deposit cannot be withdrawn by OIB or Oriental Overseas without prior written approval of the Office of the Commissioner of Financial Institutions of Puerto Rico.

As part of its derivative activities, the Company has entered into collateral agreements with certain financial counterparties. At June 30, 2016 and December 31, 2015, the Company had delivered $2.0 million of cash as collateral for such derivatives activities.

As part of the BBVA Acquisition, the Company assumed a contract with FNMA which required collateral to guarantee the repurchase, if necessary, of loans sold with recourse. AtJune 30, 2016 and December 31, 2015, the Company delivered as collateral cash amounting to $1.1 million and $1.4 million, respectively.

The Bank is required by Puerto Rico law to maintain average weekly reserve balances to cover demand deposits. The amount of those minimum average reserve balances for the week that covered June 30, 2016 was $178.1million (December 31, 2015 - $148.3million). At June 30, 2016 and December 31, 2015, the Bank complied with such requirement. Cash and due from bank as well as other short-term, highly liquid securities are used to cover the required average reserve balances.

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Investment Securities

6 Months Ended

Jun. 30, 2016

Investments [Abstract]

Securities Purchased Under Agreements To Resell And 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 June 30, 2016 and December 31, 2015, money market instruments included as part of cash and cash equivalents amounted to $5.7 million and $4.7 million, respectively.

Investment Securities

The amortized cost, gross unrealized gains and losses, fair value, and weighted average yield of the securitiesowned by the Company at June 30, 2016 and December 31, 2015were as follows:

	June 30, 2016
			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	$	402,557	$	14,414	$	-	$	416,971	2.61%
GNMA certificates		109,214		5,064		-		114,278	3.06%
CMOs issued by US government-sponsored agencies		120,238		416		179		120,475	1.87%
Total mortgage-backed securities		632,009		19,894		179		651,724	2.55%
Investment securities
Obligations of US government-sponsored agencies		4,468		34		-		4,502	1.37%
Obligations of Puerto Rico government and public instrumentalities		6,720		-		872		5,848	5.55%
Other debt securities		2,101		127		-		2,228	2.94%
Total investment securities		13,289		161		872		12,578	3.73%
Total securities available for sale	$	645,298	$	20,055	$	1,051	$	664,302	2.57%
Held-to-maturity
Mortgage-backed securities
FNMA and FHLMC certificates	$	610,384		8,121		-		618,505	2.20%
Investment securities
US Treasury securities		25,015		10		-		25,025	0.49%
Total securities held to maturity		635,399		8,131		-		643,530	2.13%
Total	$	1,280,697	$	28,186	$	1,051	$	1,307,832	2.36%

	December 31, 2015
			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	$	735,363	$	25,791	$	1,509	$	759,645	2.97%
GNMA certificates		57,129		1,366		-		58,495	3.19%
CMOs issued by US government-sponsored agencies		137,787		27		2,741		135,073	1.85%
Total mortgage-backed securities		930,279		27,184		4,250		953,213	2.82%
Investment securities
Obligations of US government-sponsored agencies		5,122		-		29		5,093	1.36%
Obligations of Puerto Rico government and public instrumentalities		17,801		-		4,070		13,731	6.24%
Other debt securities		2,444		128		-		2,572	2.98%
Total investment securities		25,367		128		4,099		21,396	4.94%
Total securities available-for-sale	$	955,646	$	27,312	$	8,349	$	974,609	2.87%
Held-to-maturity
Mortgage-backed securities
FNMA and FHLMC certificates		595,157		426		5,865		589,718	2.24%
Investment securities
US Treasury securities		25,032		-		71		24,961	0.49%
Total securities held to maturity		620,189		426		5,936		614,679	2.17%
Total	$	1,575,835	$	27,738	$	14,285	$	1,589,288	2.60%

The amortized cost and fair value of the Company’s investment securities at June 30, 2016, 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.

	June 30, 2016
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)				(In thousands)
Mortgage-backed securities
Due from 5 to 10 years
FNMA and FHLMC certificates	$	12,650	$	12,996	$	-	$	-
Total due from 5 to 10 years		12,650		12,996		-		-
Due after 10 years
FNMA and FHLMC certificates		389,907		403,975		610,384		618,505
GNMA certificates		109,214		114,278		-		-
CMOs issued by US government-sponsored agencies		120,238		120,475		-		-
Total due after 10 years		619,359		638,728		610,384		618,505
Total mortgage-backed securities		632,009		651,724		610,384		618,505
Investment securities
Due from 1 to 5 years
US Treasury securities		-		-		25,015		25,025
Obligations of Puerto Rico government and public instrumentalities		6,720		5,848		-		-
Total due from 1 to 5 years		6,720		5,848		25,015		25,025
Due from 5 to 10 years
Obligations of US government and sponsored agencies		4,468		4,502		-		-
Other debt securities		2,101		2,228		-		-
Total due from 5 to 10 years		6,569		6,730		-		-
Total investment securities		13,289		12,578		25,015		25,025
Total securities available-for-sale and held-to-maturity	$	645,298	$	664,302	$	635,399	$	643,530

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 six-month period endedJune 30, 2016, the Company retained securitized Government National Mortgage Association ("GNMA") pools totaling $54.2 million amortized cost, at a yield of 3.01% from its own originations. Previously, the Company was selling all securitized GNMA pools. The GNMA pools were sold until June 2015. During the six-month period ended June 30, 2015, the Company sold $63.5 million of available-for-sale GNMA certificates as part of its recurring mortgage loan origination and securitization activities. These sales did not realize any gains or losses during such period.

During the six-month period ended June 30, 2016, the Company sold $277.2 million of mortgage-backed securities and $11.1 million of Puerto Rico government bonds, and recorded a net gain on sale of securities of $12.2 million. Among the 2016 sales, the Company sold all but one of the Puerto Rico government bonds it held. The Company had other-than-temporary impairment charges on such securities sold totaling $1.5 million during the second half of 2015. During thesix-month period ended June 30, 2015,the Company sold $101.3 million of mortgage-backed securities and recorded a net gain on sale of securities of $2.6 million. The table below presents the gross realized gains and gross realized losses by category for such periods.

	Six-Month Period Ended June 30, 2016
			Book Value
Description	Sale Price		at Sale		Gross Gains		Gross Losses
	(In thousands)
Sale of securities available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	293,505	$	277,181	$	16,324	$	-
Investment securities
Obligations of Puerto Rico government and public instrumentalities		6,978		11,095		-		4,117
Total	$	300,483	$	288,276	$	16,324	$	4,117

	Six-Month Period Ended June 30, 2015
			Book Value
Description	Sale Price		at Sale		Gross Gains		Gross Losses
	(In thousands)
Sale of securities available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	40,307	$	37,735	$	2,571	$	-
GNMA certificates		63,524		63,523		1		-
Total	$	103,831	$	101,258	$	2,572	$	-

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 June 30, 2016 and December 31, 2015:

	June 30, 2016
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	54,449	$	179	$	54,270
Obligations of Puerto Rico government and public instrumentalities		6,720		872		5,848
	$	61,169	$	1,051	$	60,118

At June 30, 2016 there were no securities available-for-sale or held-to-maturity in a continuous unrealized loss position for less than twelve months.There were no securities held-to-maturity in a continuous unrealized loss position for twelve months or more.

	December 31, 2015
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico Government and public instrumentalities	$	17,801	$	4,070	$	13,731
CMOs issued by US government-sponsored agencies		103,340		2,410		100,930
	$	121,141	$	6,480	$	114,661
	Less than 12 months
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies		25,736		331		25,405
FNMA and FHLMC certificates		149,480		1,509		147,971
Obligations of US government and sponsored agencies		5,122		29		5,093
Securities held to maturity
FNMA and FHLMC certificates		468,487		5,865		462,622
US Treausury Securities		25,032		71		24,961
	$	673,857	$	7,805	$	666,052
	Total
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies		129,076		2,741		126,335
FNMA and FHLMC certificates		149,480		1,509		147,971
Obligations of Puerto Rico Government and public instrumentalities		17,801		4,070		13,731
Obligations of US government and sponsored agencies		5,122		29		5,093
	$	301,479	$	8,349	$	293,130
Securities held to maturity
FNMA and FHLMC certificates		468,487		5,865		462,622
US Treasury Securities		25,032		71		24,961
	$	794,998	$	14,285	$	780,713

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 the statements of operations with the remaining noncredit-related component recognized in other comprehensive income (loss). 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 investments ($54.5million, amortized cost, or 89%) with an unrealized loss position at June 30, 2016 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 ($6.7 million, amortized cost, or 11%) with an unrealized loss position at June 30, 2016 consist of obligations issued or guaranteed by the government of Puerto Rico and its publicinstrumentalities. The decline in the market value of this security 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 the government's credit default, a protracted economic recession, sizable government debt-service obligations and structural budget deficits, high unemployment and a shrinking population.

As of June 30, 2016, the Company applied a discounted cash flow analysis to the Puerto Rico government bond 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 a 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 only obligation issued or guaranteed by the government of Puerto Rico and its instrumentalities held at the end of the second quarter of 2016 by the Company was the Puerto Rico Highwaysand Transportation Authority (“PRHTA”) – TeodoroMoscoso Bridge revenue bond.The pledge income sources of this bond comes from gross revenues from TeodoroMoscoso Bridge operations. Although PRHTA is included in the Puerto Rico Governor's executive order of November 30, 2015 ordering the '"clawback" of certain government revenues, the toll bridge revenues for the repayment of such bonds were not subject to the “clawback." All other Puerto Rico government securities were sold during the first quarter of 2016. The PRHTA bond with a principal amount of $6.7 million had an aggregate fair value of $5.8 million at June 30, 2016 (87% of thebond's cost). The discounted cash flow analysis for the investments showed a cumulative default probability at maturity of 10.20%, thus reflecting that it is more likely than not that the bond will not default during its remaining term. Based on this analysis, the Company determined that it is more likely than not that it will recover all interest and principal invested in this Puerto Rico government bond and is, therefore, not required to recognize a credit loss as of June 30, 2016. Also, the Company’s conclusion is based on the assessment of the specific source of repayment of the outstanding bond, which continues to perform. PRHTA started principal repayments on July 1, 2014. All scheduled principal and interest payments to date have been collected. On July 1, 2016, the Company received the scheduled principal payment of $2.0 million. The next payment is due on July 1, 2017. As a result of the aforementioned analysis, no other-than-temporary losses were recorded during the quarter ended June 30, 2016.

The following table presents a roll-forward of credit-related impairment losses recognized in earnings for the six-month period ended June 30, 2016 and 2015 on available-for-sale securities:

	Six-Month Period Ended June 30,
	2016		2015
Balance at beginning of period	$	1,490	$	-
Reductions for securities sold during the period (realized)		(1,490)		-
Balance at end of period	$	-	$	-

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Loans Receivable

6 Months Ended

Jun. 30, 2016

Loans Receivable [Abstract]

LOANS RECEIVABLE

NOTE 4- LOANS

The Company’s loan portfolio is composed of two segments, loans initially accounted for under the amortized cost method (referred to as "originated and other" loans) and loans acquired (referred to as "acquired" loans). Acquired loans are further segregated between acquired BBVAPR loans and acquired Eurobank loans. Acquired Eurobank loans were purchased subject to loss-sharing agreements with the FDIC. The FDIC loss-share coverage related to commercial and other-non single family acquired Eurobank loans expiredon June 30, 2015.Notwithstanding the expiration of loss share coverage of commercial loans, on July 2, 2015, the Company entered into an agreement with the FDIC pursuant to which the FDIC concurred with a potential sale of a pool of loss-share assets covered under the commercial loss-sharing agreement. Pursuant to such agreement, and as further discussed below, the FDIC agreed to and paid $20 million in loss share coverage with respect to the aggregate loss resulting from any portfolio sale within 120 days of the agreement. This sale was completed on September 28, 2015.Covered loans are no longer a material amount. Therefore, the Company changed its loan disclosures during 2015.

The coverage for the single family residential loans will expire on June 30, 2020. At June 30, 2016, the remaining covered loans, amounting to $65.8 million, net carrying amount ($76.8 million gross amount), are included as part of acquired Eurobank loans under the name "loans secured by 1-4 family residential properties." At December 31, 2015, covered loans amounted to $67.2 million, net carrying amount ($92.3 million gross amount). Interest income recognized for covered loans during the six-month periods endedJune 30, 2016 and 2015was $4.3 million and $28.3million, respectively. The decrease in interest income recognized for covered loans is due to the expiration of the FDIC loss-share coverage related to commercial and other-non single family residential loans on June 30, 2015.

Effective June 30, 2016, pursuant to supervisory direction, the Company changed the purchase credit impaired policy for all loans accounted for under ASC 310-30 (Loans and Debt Securities Acquired with Deteriorated Credit Quality). Under the revised policy, the Company writes-off the loan’s recorded investment and derecognizes the associated allowance for loan and lease losses for loans that exit the acquired pools. The revised policy will be implemented prospectively due to the immaterial impact of retrospective adoption. Prior to June 30, 2016, the pool’s carrying value and allowance was determined by discounting expected cash flows at the pool’s effective yield. The allowance for loan and lease losses was maintained until all of the loans in the pool were paid off or charged-off. The transition to this revised policy on June 30, 2016 resulted in the de-recognition of $8.5 million and $72.2 million in the recorded investment balance and associated allowance for loans that had exited the pools, for acquired BBVAPR loans and acquired Eurobank loans, respectively, with no impact to the provision for loan and lease losses. Refer to Note 5 Allowances for Loan and Lease Losses.

The composition of the Company’s loan portfolio at June 30, 2016 and December 31, 2015was as follows

		June 30,		December 31,
	2016		2015
	(In thousands)
Originated and other loans and leases held for investment:
Mortgage	$	741,917	$	757,828
Commercial		1,476,613		1,441,649
Consumer		265,269		242,950
Auto and leasing		712,268		669,163
		3,196,067		3,111,590
Allowance for loan and lease losses on originated and other loans and leases		(112,812)		(112,626)
		3,083,255		2,998,964
Deferred loan costs, net		4,619		4,203
Total originated and other loans loans held for investment, net		3,087,874		3,003,167
Acquired loans:
Acquired BBVAPR loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		4,559		7,457
Consumer		35,194		38,385
Auto		77,118		106,911
		116,871		152,753
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-20		(4,487)		(5,542)
		112,384		147,211
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy) (a)
Mortgage		591,029		608,294
Commercial		246,188		287,311
Construction		76,917		88,180
Consumer		7,331		11,843
Auto		117,038		153,592
		1,038,503		1,149,220
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-30 (b)		(22,801)		(25,785)
		1,015,702		1,123,435
Total acquired BBVAPR loans, net		1,128,086		1,270,646
Acquired Eurobank loans: (a)
Loans secured by 1-4 family residential properties		76,777		92,273
Commercial and construction		83,377		142,377
Consumer		1,410		2,314
Total acquired Eurobank loans		161,564		236,964
Allowance for loan and lease losses on Eurobank loans (b)		(22,116)		(90,178)
Total acquired Eurobank loans, net		139,448		146,786
Total acquired loans, net		1,267,534		1,417,432
Total held for investment, net		4,355,408		4,420,599
Mortgage loans held-for-sale		18,209		13,614
Total loans, net	$	4,373,617	$	4,434,213
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these 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, 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 June 30, 2016 and December 31, 2015by class ofloans. Mortgage loans past due include delinquent loans in the GNMA buy-back option program. Servicers of loans underlying GNMA mortgage-backed securities must report as their own assets the defaulted loans that they have the option (but not the obligation) to repurchase, even when they elect not to exercise that option.

	June 30, 2016
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	260	$	2,024	$	2,973	$	5,257	$	-	$	48,801	$	54,058	$	227
Years 2003 and 2004		343		3,936		6,201		10,480		65		84,208		94,753		-
Year 2005		-		1,878		3,826		5,704		64		46,293		52,061		-
Year 2006		743		2,243		6,741		9,727		50		64,109		73,886		-
Years 2007, 2008 and 2009		854		1,414		11,793		14,061		-		69,957		84,018		699
Years 2010, 2011, 2012, 2013		498		1,307		9,420		11,225		142		133,384		144,751		416
Years 2014, 2015 and 2016		-		189		901		1,090		62		98,209		99,361		-
		2,698		12,991		41,855		57,544		383		544,961		602,888		1,342
Non-traditional		-		938		5,217		6,155		12		20,028		26,195		-
Loss mitigation program		9,898		6,574		15,738		32,210		3,857		68,014		104,081		3,770
		12,596		20,503		62,810		95,909		4,252		633,003		733,164		5,112
Home equity secured personal loans		-		-		-		-		-		384		384		-
GNMA's buy-back option program		-		-		8,369		8,369		-		-		8,369		-
Total mortgage		12,596		20,503		71,179		104,278		4,252		633,387		741,917		5,112
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		-		230,296		230,296		-
Institutional		-		-		-		-		-		27,838		27,838		-
Middle market		-		125		8,589		8,714		2,255		209,127		220,096		-
Retail		96		1,226		5,871		7,193		3,327		236,171		246,691		-
Floor plan		-		-		-		-		-		2,826		2,826		-
Real estate		-		-		-		-		-		16,079		16,079		-
		96		1,351		14,460		15,907		5,582		722,337		743,826		-
Other commercial and industrial:
Corporate		-		-		-		-		-		140,192		140,192		-
Institutional		-		-		-		-		183,020		193,258		376,278		-
Middle market		2,007		-		-		2,007		1,421		102,112		105,540		-
Retail		896		529		582		2,007		135		74,823		76,965		-
Floor plan		6		38		40		84		-		33,728		33,812		-
		2,909		567		622		4,098		184,576		544,113		732,787		-
Total commercial		3,005		1,918		15,082		20,005		190,158		1,266,450		1,476,613		-

	June 30, 2016
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		459		177		432		1,068		-		23,809		24,877		-
Overdrafts		15		1		-		16		-		204		220		-
Personal lines of credit		42		14		94		150		-		2,281		2,431		-
Personal loans		1,854		1,137		898		3,889		875		216,884		221,648		-
Cash collateral personal loans		63		3		1		67		-		16,026		16,093		-
Total consumer		2,433		1,332		1,425		5,190		875		259,204		265,269		-
Auto and leasing		44,433		19,438		7,322		71,193		15		641,060		712,268		-
Total	$	62,467	$	43,191	$	95,008	$	200,666	$	195,300	$	2,800,101	$	3,196,067	$	5,112

	December 31, 2015
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	80	$	2,217	$	3,889	$	6,186	$	41	$	51,562	$	57,789	$	144
Years 2003 and 2004		251		5,036		5,536		10,823		-		88,623		99,446		-
Year 2005		79		2,553		3,549		6,181		-		48,040		54,221		-
Year 2006		551		2,878		7,934		11,363		176		66,864		78,403		-
Years 2007, 2008 and 2009		170		2,053		14,733		16,956		-		74,590		91,546		526
Years 2010, 2011, 2012, 2013		662		1,673		10,519		12,854		141		137,749		150,744		72
Years 2014 and 2015		-		65		663		728		-		85,128		85,856		-
		1,793		16,475		46,823		65,091		358		552,556		618,005		742
Non-traditional		-		977		5,079		6,056		13		23,483		29,552		-
Loss mitigation program		9,958		6,887		14,930		31,775		5,593		64,548		101,916		3,083
		11,751		24,339		66,832		102,922		5,964		640,587		749,473		3,825
Home equity secured personal loans		-		-		64		64		-		346		410		-
GNMA's buy-back option program		-		-		7,945		7,945		-		-		7,945		-
Total mortgage		11,751		24,339		74,841		110,931		5,964		640,933		757,828		3,825
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		-		227,557		227,557		-
Institutional		213		-		-		213		-		33,594		33,807		-
Middle market		1,174		712		9,113		10,999		1,730		194,219		206,948		-
Retail		686		466		6,921		8,073		1,177		231,840		241,090		-
Floor plan		-		-		-		-		-		2,892		2,892		-
Real estate		-		-		-		-		-		16,662		16,662		-
		2,073		1,178		16,034		19,285		2,907		706,764		728,956		-
Other commercial and industrial:
Corporate		-		-		-		-		-		108,582		108,582		-
Institutional		-		-		-		-		190,290		190,695		380,985		-
Middle market		-		-		-		-		1,565		105,748		107,313		-
Retail		282		639		604		1,525		783		75,489		77,797		-
Floor plan		238		51		39		328		-		37,688		38,016		-
		520		690		643		1,853		192,638		518,202		712,693		-
Total commercial		2,593		1,868		16,677		21,138		195,545		1,224,966		1,441,649		-

	December 31, 2015
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		449		182		369		1,000		-		21,766		22,766		-
Overdrafts		24		-		-		24		-		166		190		-
Personal lines of credit		74		-		45		119		19		2,106		2,244		-
Personal loans		2,078		1,179		627		3,884		414		196,858		201,156		-
Cash collateral personal loans		125		17		2		144		-		16,450		16,594		-
Total consumer		2,750		1,378		1,043		5,171		433		237,346		242,950		-
Auto and leasing		53,566		16,898		8,293		78,757		49		590,357		669,163		-
Total	$	70,660	$	44,483	$	100,854	$	215,997	$	201,991	$	2,693,602	$	3,111,590	$	3,825

During 2015, the Company changed its early delinquency reporting on mortgage loans from one scheduled payment due to two scheduled payments due to be comparable with local peers, except for troubled-debt restructured loans which continue using one scheduled payment due for delinquency reporting. During the quarter ended June 30, 2016, the Company changed its early delinquency reporting on consumer and auto loans from one scheduled payment due to two scheduled payments to report consistently its retail portfolio. The change resulted in a $19 thousand and $5.9million reduction in early and total delinquency for consumer and auto loans, respectively.

At June 30, 2016 and December 31, 2015, the Company had carrying balances of $327.0 million and $334.6million, respectively, in loans granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of the institutional commercial loan segment. All loans granted to the Puerto Rico government were current at June 30, 2016 and December 31, 2015. As part of a bank syndicate, on November 5, 2015 the Company entered into a Restructuring Support Agreement with a view towards restructuring a line of credit to the Puerto Rico Electric Power Authority ("PREPA") on terms that provide for full repayment of the debt to the Bank. In the third quarter of 2014, 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, which included a financial model to project the future liquidity status of PREPA under various scenarios and its capacity to service its financial obligations, and concluded that PREPA had sufficient cash flows for the repayment of the line of credit. Despite the Company’s analysis showing PREPA’s capacity to repay the line of credit, the Company classified the credit as doubtful, placed its participation in non-accrual and recorded a $24 million provision during the first quarter of 2015. During the fourth quarter of 2015, the Company recorded an additional $29.3 million provision for loan and lease losses on PREPA. Since it was placed in non-accrual, interest payments have been applied to principal. At June 30, 2016 and December 31, 2015, the allowance for loan and lease losses to PREPA was $53.3 million.

Acquired Loans

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

Acquired BBVAPR Loans

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

Credit cards, retail and commercial revolving lines of credits, floor plans and performing auto loans with FICO scores over 660 acquired at a premium, excluding the acquired Eurobank loan 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. Acquired BBVAPR loans that were accounted for under the provisions of ASC 310-20 are removed from the acquired loan categoryat the end of the reporting period upon refinancing, renewal or normal re-underwriting.

The following tables present the aging of the recorded investment in gross acquired BBVAPR loans accounted for under ASC 310-20 as of June 30, 2016 and December 31, 2015,by class ofloans:

	June 30, 2016
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Retail	$	-	$	-	$	197	$	197	$	-	$	-	$	197	$	-
Floor plan		-		-		446		446		-		2,309		2,755		-
		-		-		643		643		-		2,309		2,952		-
Other commercial and industrial
Retail		37		17		120		174		-		1,426		1,600		-
Floor plan		-		-		7		7		-		-		7		-
		37		17		127		181		-		1,426		1,607		-
		37		17		770		824		-		3,735		4,559		-
Consumer
Credit cards		731		290		704		1,725		-		30,573		32,298		-
Personal loans		116		14		60		190		-		2,706		2,896		-
		847		304		764		1,915		-		33,279		35,194		-
Auto		5,088		2,196		562		7,846		-		69,272		77,118		-
Total	$	5,972	$	2,517	$	2,096	$	10,585	$	-	$	106,286	$	116,871	$	-

	December 31, 2015
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Retail	$	-	$	-	$	228	$	228	$	-	$	-	$	228	$	-
Floor plan		-		-		467		467		-		2,422		2,889		-
		-		-		695		695		-		2,422		3,117		-
Other commercial and industrial
Retail		186		29		178		393		-		3,331		3,724		-
Floor plan		-		-		7		7		-		609		616		-
		186		29		185		400		-		3,940		4,340		-
		186		29		880		1,095		-		6,362		7,457		-
Consumer
Credit cards		930		384		489		1,803		-		33,414		35,217		-
Personal loans		14		29		46		89		-		3,079		3,168		-
		944		413		535		1,892		-		36,493		38,385		-
Auto		7,553		2,279		831		10,663		-		96,248		106,911		-
Total	$	8,683	$	2,721	$	2,246	$	13,650	$	-	$	139,103	$	152,753	$	-

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

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

The carrying amount corresponding to acquired BBVAPR loans with deteriorated credit quality, including those accounted under ASC 310-30 by analogy, in the statements of financial condition at June 30, 2016 and December 31, 2015is as follows:

	June 30,		December 31,
	2016		2015
		(In thousands)
Contractual required payments receivable (a)	$	1,788,121	$	1,945,098
Less: Non-accretable discount		394,500		434,190
Cash expected to be collected		1,393,621		1,510,908
Less: Accretable yield		355,118		361,688
Carrying amount, gross		1,038,503		1,149,220
Less: allowance for loan and lease losses (b)		22,801		25,785
Carrying amount, net	$	1,015,702	$	1,123,435
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

At June 30, 2016 and December 31, 2015, the Company had $71.6million and $80.9 million, respectively, in loans granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of its acquired BBVAPR loans accounted for under ASC 310-30. This entire amount was current at June 30, 2016 and December 31, 2015

.The following tables describe the accretable yield and non-accretable discount activity of acquired BBVAPR loans accounted for under ASC 310-30 for the

	Quarter Ended June 30, 2016
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	260,557	$	40,102	$	17,156	$	17,587	$	5,261	$	340,663
Accretion		(8,294)		(5,272)		(1,307)		(3,616)		(870)		(19,359)
Change in expected cash flows		-		3,062		(408)		630		(1)		3,283
Transfer from (to) non-accretable discount		31,560		(833)		(193)		(498)		495		30,531
Balance at end of period	$	283,823	$	37,059	$	15,248	$	14,103	$	4,885	$	355,118
Non-Accretable Discount Activity:
Balance at beginning of period	$	370,155	$	10,716	$	7,432	$	21,938	$	18,735	$	428,976
Change in actual and expected losses		(2,442)		(967)		(206)		(315)		(15)		(3,945)
Transfer (to) from accretable yield		(31,560)		833		193		498		(495)		(30,531)
Balance at end of period	$	336,153	$	10,582	$	7,419	$	22,121	$	18,225	$	394,500

	Six-Month Period Ended June 30, 2016
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	268,794	$	45,411	$	19,615	$	21,578	$	6,290	$	361,688
Accretion		(16,601)		(11,111)		(3,176)		(7,827)		(1,808)		(40,523)
Change in expected cash flows		-		3,190		(208)		631		(1)		3,612
Transfer from (to) non-accretable discount		31,630		(431)		(983)		(279)		404		30,341
Balance at end of period	$	283,823	$	37,059	$	15,248	$	14,103	$	4,885	$	355,118
Non-Accretable Discount Activity:
Balance at beginning of period	$	374,772	$	11,781	$	6,764	$	22,039	$	18,834	$	434,190
Change in actual and expected losses		(6,989)		(1,630)		(328)		(197)		(205)		(9,349)
Transfer (to) from accretable yield		(31,630)		431		983		279		(404)		(30,341)
Balance at end of period	$	336,153	$	10,582	$	7,419	$	22,121	$	18,225	$	394,500

	Quarter Ended June 30, 2015
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	284,612	$	57,330	$	19,390	$	47,097	$	5,601	$	414,030
Accretion		(8,813)		(9,597)		(2,143)		(6,163)		(1,287)		(28,003)
Change in actual and expected losses		-		23,695		9,867		-		-		33,562
Transfer from (to) non-accretable discount		81		135		(2,501)		(9,403)		4,147		(7,541)
Balance at end of period	$	275,880	$	71,563	$	24,613	$	31,531	$	8,461	$	412,048
Non-Accretable Discount Activity:
Balance at beginning of period	$	392,609	$	15,826	$	3,957	$	14,543	$	23,576	$	450,511
Change in actual and expected losses		(3,421)		(4,921)		536		(256)		(73)		(8,135)
Transfer (to) from accretable yield		(81)		(135)		2,501		9,403		(4,147)		7,541
Balance at end of period	$	389,107	$	10,770	$	6,994	$	23,690	$	19,356	$	449,917

	Six-Month Period Ended June 30, 2015
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	298,364	$	61,196	$	25,829	$	53,998	$	6,559	$	445,946
Accretion		(17,800)		(20,356)		(5,953)		(13,151)		(2,213)		(59,473)
Change in actual and expected losses		-		23,695		9,867		-		-		33,562
Transfer (to) from non-accretable discount		(4,684)		7,028		(5,130)		(9,316)		4,115		(7,987)
Balance at end of period	$	275,880		71,563		24,613		31,531		8,461		412,048
Non-Accretable Discount Activity:
Balance at beginning of period	$	389,839	$	23,069	$	3,486	$	16,215	$	24,018	$	456,627
Change in actual and expected losses		(5,416)		(5,271)		(1,622)		(1,841)		(547)		(14,697)
Transfer from (to) accretable yield		4,684		(7,028)		5,130		9,316		(4,115)		7,987
Balance at end of period	$	389,107	$	10,770	$	6,994	$	23,690	$	19,356	$	449,917

Acquired Eurobank Loans

The carrying amount of acquired Eurobank loans at June 30, 2016 and December 31, 2015is as follows:

		June 30		December 31
	2016		2015
	(In thousands)
Contractual required payments receivable (a)	$	252,801	$	342,511
Less: Non-accretable discount		11,555		21,156
Cash expected to be collected		241,246		321,355
Less: Accretable yield		79,682		84,391
Carrying amount, gross		161,564		236,964
Less: Allowance for loan and lease losses (b)		22,116		90,178
Carrying amount, net	$	139,448	$	146,786
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

The following tables describe the accretable yield and non-accretable discount activity of acquired Eurobank loans for the quarters and six-months periods ended June 30, 2016 and 2015:

	Quarter Ended June 30, 2016
	Loans Secured by 1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	50,787	$	33,203	$	2,237	$	-	$	-	$	86,227
Accretion		(2,263)		(4,528)		(33)		2		(76)		(6,898)
Change in expected cash flows		(198)		1,619		-		(77)		81		1,425
Transfer from (to) non-accretable discount		10		(1,152)		-		75		(5)		(1,072)
Balance at end of year	$	48,336	$	29,142	$	2,204	$	-	$	-	$	79,682
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,703	$	-	$	-	$	-	$	-	$	12,703
Change in actual and expected losses		(1,138)		(1,152)		-		75		(5)		(2,220)
Transfer from (to) accretable yield		(10)		1,152		-		(75)		5		1,072
Balance at end of period	$	11,555	$	-	$	-	$	-	$	-	$	11,555

	Six-Month Period Ended June 30, 2016
	Loans Secured by 1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	51,954	$	26,970	$	2,255	$	-	$	3,213	$	84,392
Accretion		(4,529)		(8,623)		(47)		2		(1,261)		(14,458)
Change in expected cash flows		786		12,712		(23)		(77)		(1,947)		11,451
Transfer from (to) non-accretable discount		125		(1,917)		19		75		(5)		(1,703)
Balance at end of period	$	48,336	$	29,142	$	2,204	$	-	$	-	$	79,682
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,869	$	-	$	-	$	-	$	8,287	$	21,156
Change in actual and expected losses		(1,189)		(1,917)		19		75		(8,292)		(11,304)
Transfer (to) from accretable yield		(125)		1,917		(19)		(75)		5		1,703
Balance at end of period	$	11,555	$	-	$	-	$	-	$	-	$	11,555

	Quarter Ended June 30, 2015
	Loans Secured by 1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	58,332	$	33,481	$	20,806	$	1,665	$	2,004	$	116,288
Accretion		(3,276)		(8,047)		(405)		(937)		(93)		(12,758)
Transfer from non-accretable discount		750		2,039		(2,052)		375		(1)		1,111
Balance at end of period	$	55,806	$	27,473	$	18,349	$	1,103	$	1,910	$	104,641
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,557	$	10,493	$	-	$	-	$	9,662	$	32,712
Change in actual and expected losses		(405)		(8,454)		(2,052)		375		67		(10,469)
Transfer to accretable yield		(750)		(2,039)		2,052		(375)		1		(1,111)
Balance at end of period	$	11,402	$	-	$	-	$	-	$	9,730	$	21,132

	Six-Month Period Ended June 30, 2015
	Loans Secured by 1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	47,636	$	37,919	$	20,753	$	2,479	$	1,072	$	109,859
Accretion		(6,794)		(17,902)		(1,024)		(2,329)		(213)		(28,262)
Transfer from (to) non-accretable discount		14,964		7,456		(1,380)		953		1,051		23,044
Balance at end of period	$	55,806	$	27,473	$	18,349	$	1,103	$	1,910	$	104,641
Non-Accretable Discount Activity:
Balance at beginning of period	$	27,348	$	24,464	$	-	$	-	$	10,598	$	62,410
Change in actual and expected cash flows		(982)		(17,008)		(1,380)		953		183		(18,234)
Transfer (to) from accretable yield		(14,964)		(7,456)		1,380		(953)		(1,051)		(23,044)
Balance at end of period	$	11,402	$	-	$	-	$	-	$	9,730	$	21,132

Non-accrual Loans

The following table presents the recorded investment in loans in non-accrual status by class ofloans as of June 30, 2016 and December 31, 2015:

	June 30,		December 31,
	2016		2015
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year):
Up to the year 2002	$	2,812	$	3,786
Years 2003 and 2004		6,359		5,737
Year 2005		3,889		3,627
Year 2006		7,135		8,189
Years 2007, 2008 and 2009		11,292		14,625
Years 2010, 2011, 2012, 2013		9,311		10,588
Years 2014, 2015 and 2016		963		663
		41,761		47,215
Non-traditional		5,229		5,092
Loss mitigation program		18,769		20,172
		65,759		72,479
Home equity loans, secured personal loans		-		64
		65,759		72,543
Commercial
Commercial secured by real estate
Middle market		10,969		12,729
Retail		10,352		8,726
		21,321		21,455
Other commercial and industrial
Institutional		183,020		190,290
Middle market		1,421		1,565
Retail		1,966		1,932
Floor plan		40		39
		186,447		193,826
		207,768		215,281
Consumer
Credit cards		432		369
Personal lines of credit		94		100
Personal loans		1,812		1,146
Cash collateral personal loans		1		16
		2,339		1,631
Auto and leasing		7,337		8,418
Total non-accrual originated loans	$	283,203	$	297,873

	June 30,		December 31,
	2016		2015
	(In thousands)
Acquired BBVAPR loans accounted for under ASC 310-20
Commercial
Commercial secured by real estate
Retail	$	197	$	228
Floor plan		446		467
		643		695
Other commercial and industrial
Retail		120		178
Floor plan		7		7
		127		185
		770		880
Consumer
Credit cards		704		489
Personal loans		60		46
		764		535
Auto		562		831
Total non-accrual acquired BBVAPR loans accounted for under ASC 310-20		2,096		2,246
Total non-accrual loans	$	285,299	$	300,119

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

Delinquent residential mortgage loans insured or guaranteed under applicable Federal Housing Administration ("FHA") and U.S. Department of Veterans Affairs ("VA") programs are classified as non-performing loans when they become 90 days or more past due, but are not placed in non-accrual status until they become 18 months or more past due, since they are insured loans. Therefore, these loans are included as non-performing loans but excluded from non-accrual loans.

During the first quarter of 2015, the revolving line of credit to PREPA was classified as non-accrual. At June 30, 2016, this line of credit had an unpaid principal balance of $183.0million. Since the second quarter of 2015, interest payments have beenapplied to principal. As of June 30, 2016, the specific reserve for the PREPA line of credit is$53.3 million.

AtJune 30, 2016 and December 31, 2015, loans whose terms have been extended and which are classified as troubled-debt restructurings that are not included in non-accrual loans amounted to $97.2 million and $93.6 million, respectively, as they are performing under their new terms.

Impaired Loans

The Company evaluates all loans, some individually and others as homogeneous groups, for purposes of determining impairment. The total investment in impaired commercial loans was $219.4 million and $235.8million at June 30, 2016 and December 31, 2015, respectively. Impaired commercial loans at June 30, 2016 and December 31, 2015 included the PREPA line of credit with an unpaid principal balance of $183.0 million and $190.3million, respectively. 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 $56.8 million at June 30, 2016 and $55.9 million at December 31, 2015. The valuation allowance for impaired commercial loans at June 30, 2016 and December 31, 2015included $53.3 million of specific allowance for PREPA. The total investment in impaired mortgage loans was $90.9 million and $90.0 million at June 30, 2016 and December 31, 2015, 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 $8.9 millionat June 30, 2016and $9.2 million at December 31, 2015.

Originated and Other Loans and Leases Held for Investment

The Company’s recorded investment in commercial and mortgage loans categorized as originated and other loans and leases held for investment that were individually evaluated for impairment and the related allowance for loan and lease losses at June 30, 2016 and December 31, 2015are as follows:

	June 30, 2016
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	212,876	$	194,084	$	56,758	29%
Residential impaired and troubled-debt restructuring		99,145		90,948		8,864	10%
Impaired loans with no specific allowance:
Commercial		30,228		23,876		-	0%
Total investment in impaired loans	$	342,249	$	308,908	$	65,622	21%

	December 31, 2015
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	210,718	$	199,366	$	55,947	28%
Residential impaired and troubled-debt restructuring		97,424		89,973		9,233	10%
Impaired loans with no specific allowance
Commercial		42,110		35,928		-	0%
Total investment in impaired loans	$	350,252	$	325,267	$	65,180	20%

Acquired BBVAPR Loans

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

The Company’s recorded investment inacquired BBVAPR commercial loans accounted for under ASC 310-20 that were individually evaluated for impairment and the related allowance for loan and lease losses at June 30, 2016 and December 31, 2015are as follows:

	June 30, 2016
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial	$	1,450	$	1,433	$	-	0%
Total investment in impaired loans	$	1,450	$	1,433	$	-	0%
	December 31, 2015
	Unpaid		Recorded		Specific
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial	$	486	$	474	$	-	0%
Total investment in impaired loans	$	486	$	474	$	-	0%

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

The Company’s recorded investment in acquired BBVAPR loan pools accounted for under ASC 310-30 that have recorded impairments and their related allowance for loan and lease losses at June 30, 2016 and December 31, 2015are as follows:

	June 30, 2016
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance: (a)(b)
Mortgage	$	591,029	$	591,056	$	1,585	0%
Commercial		246,142		173,949		11,884	7%
Construction		76,677		56,457		3,979	7%
Auto		117,038		117,043		5,353	5%
Total investment in impaired loan pools	$	1,030,886	$	938,505	$	22,801	2%
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

	December 31 , 2015
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance:
Mortgage	$	608,294	$	608,294	$	1,761	0%
Commercial		287,311		168,107		15,455	9%
Construction		88,180		87,983		5,707	6%
Auto		153,592		153,592		2,862	2%
Total investment in impaired loan pools	$	1,137,377	$	1,017,976	$	25,785	3%

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

Acquired Eurobank Loans

The Company’s recorded investment in acquired Eurobank loan pools that have recorded impairments and their related allowance for loan and lease losses as ofJune 30, 2016 and December 31, 2015are as follows:

	June 30, 2016
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance: (a)(b)
Loans secured by 1-4 family residential properties	$	95,755	$	76,777	$	11,016	14%
Commercial and construction		114,932		83,377		11,096	13%
Consumer		1,252		1,410		4	0%
Total investment in impaired loan pools	$	211,939	$	161,564	$	22,116	14%
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

	December 31, 2015
							Coverage
	Unpaid		Recorded		Specific		to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance
Loans secured by 1-4 family residential properties	$	101,444	$	92,273	$	22,570	24%
Commercial and construction		133,148		142,377		67,365	47%
Consumer		6,713		2,314		243	11%
Total investment in impaired loan pools	$	241,305	$	236,964	$	90,178	38%

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

The following table presents the interest recognized in commercial and mortgage loans that were individually evaluated for impairment, excluding loans accounted for under ASC 310-30 for the quarters and six-month periods endedJune 30, 2016 and 2015:

	Quarter Ended June 30,
	2016				2015
	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
	(In thousands)
Originated and other loans held for investment:
Impaired loans with specific allowance
Commercial	$	75	$	194,759	$	45	$	212,414
Residential troubled-debt restructuring		791		91,007		781		89,041
Impaired loans with no specific allowance
Commercial		149		29,579		316		30,015
		1,015		315,345		1,142		331,470
Acquired loans accounted for under ASC 310-20:
Impaired loans with no specific allowance
Commercial		15		789		11		1,446
Total interest income from impaired loans	$	1,030	$	316,134	$	1,153	$	332,916

	Six-Month Period Ended June 30,
	2016					2015
	Interest Income Recognized		Average Recorded Investment			Interest Income Recognized		Average Recorded Investment
	(In thousands)
Originated and other loans held for investment:
Impaired loans with specific allowance
Commercial	$	150	$	195,777	$	90	$	146,144
Residential troubled-debt restructuring		1,591		90,650		1,563		91,216
Impaired loans with no specific allowance
Commercial		298		31,603		631		95,791
Total interest income from impaired loans	$	2,039	$	318,030	$	2,284	$	333,151
Aquired loans accounted for under SC 310-20:
Impaired loans with no specific allowance
Commercial		30		628		21		1,923
Total interest income from impaired loans	$	2,069	$	318,658	$	2,305	$	335,074

Modifications

The following tables present the troubled-debt restructurings during the

	Quarter Ended June 30, 2016
	Number of contracts	Pre-Modification Outstanding Recorded Investment		Pre-Modification Weighted Average Rate	Pre-Modification Weighted Average Term (in Months)	Post-Modification Outstanding Recorded Investment		Post-Modification Weighted Average Rate	Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	19	$	2,670	5.69%	372	$	2,670	4.54%	494
Commercial	6		668	6.65%	65		668	5.91%	86
Consumer	26		364	12.73%	75		372	10.20%	70
	Six-Month Period Ended June 30, 2016
	Number of contracts	Pre-Modification Outstanding Recorded Investment		Pre-Modification Weighted Average Rate	Pre-Modification Weighted Average Term (in Months)	Post-Modification Outstanding Recorded Investment		Post-Modification Weighted Average Rate	Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	52	$	6,628	5.90%	365	$	7,525	4.73%	493
Commercial	8		1,323	6.73%	53		1,324	6.31%	61
Consumer	47		556	13.27%	75		603	10.56%	71

	Quarter Ended June 30, 2015
	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	39	$	4,455	5.62%	330	$	4,455	4.21%	330
Commercial	1		29	7.25%	44		29	6.50%	60
Consumer	21		250	14.40%	71		259	13.87%	69
Auto	1		64	12.95%	72		65	12.95%	72
	Six-Month Period Ended June 30, 2015
	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	97	$	11,609	4.65%	348	$	11,594	4.13%	349
Commercial	4		4,533	6.83%	80		4,533	7.00%	141
Consumer	32		396	14.50%	72		440	14.25%	68
Auto	1		64	12.95%	72		65	12.95%	72

The following table presents troubled-debt restructurings for which there was a payment default during the twelve-month periods ended June 30, 2016 and 2015:

	Twelve-Month Period Ended June 30,
	2016			2015
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(Dollars in thousands)
Mortgage	84	$	9,869	60	$	6,911
Consumer	7	$	134	4	$	72
Auto	1	$	17	-	$	-

Credit Quality Indicators

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

The Company uses the following definitions for risk ratings:

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

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

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

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

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

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

As of June 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of gross originated and other loans and BBVAPR acquired loans accounted for under ASC 310-20 subject to risk rating by class of loans is as follows:

	June 30, 2016
	Risk Ratings
											Individually
	Balance				Special						Measured for
	Outstanding		Pass		Mention		Substandard		Doubtful		Impairment
	(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate	$	230,296	$	215,312	$	14,984	$	-	$	-	$	-
Institutional		27,838		26,200		-		-		-		1,638
Middle market		220,096		188,700		17,697		374		-		13,325
Retail		246,691		222,814		7,468		4,128		-		12,281
Floor plan		2,826		2,826		-		-		-		-
Real estate		16,079		16,079		-		-		-		-
		743,826		671,931		40,149		4,502		-		27,244
Other commercial and industrial:
Corporate		140,192		140,192		-		-		-		-
Institutional		376,278		193,258		-		-		-		183,020
Middle market		105,540		95,946		5,142		181		-		4,271
Retail		76,965		71,933		898		979		-		3,155
Floor plan		33,812		28,046		5,415		81		-		270
		732,787		529,375		11,455		1,241		-		190,716
Total		1,476,613		1,201,306		51,604		5,743		-		217,960
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Retail		197		-		-		197		-		-
Floor plan		2,755		953		376		-		-		1,426
		2,952		953		376		197		-		1,426
Other commercial and industrial:
Retail		1,600		1,527		-		73		-		-
Floor plan		7		-		-		-		-		7
		1,607		1,527		-		73		-		7
Total		4,559		2,480		376		270		-		1,433
Total	$	1,481,172	$	1,203,786	$	51,980	$	6,013	$	-	$	219,393

	December 31, 2015
	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	$	227,557	$	212,410	$	15,147	$	-	$	-	$	-
Institutional		33,807		25,907		-		-		-		7,900
Middle market		206,948		181,916		9,697		-		-		15,335
Retail		241,090		217,836		7,936		5,097		-		10,221
Floor plan		2,892		2,892		-		-		-		-
Real estate		16,662		16,662		-		-		-		-
		728,956		657,623		32,780		5,097		-		33,456
Other commercial and industrial:
Corporate		108,582		100,826		-		-		-		7,756
Institutional		380,985		190,695		-		-		-		190,290
Middle market		107,313		97,288		8,052		-		-		1,973
Retail		77,797		73,757		1,076		1,184		-		1,780
Floor plan		38,016		35,862		2,115		-		-		39
		712,693		498,428		11,243		1,184		-		201,838
Total		1,441,649		1,156,051		44,023		6,281		-		235,294
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Retail		228		-		-		228		-		-
Floor plan		2,889		602		1,820		-		-		467
		3,117		602		1,820		228		-		467
Other commercial and industrial:
Retail		3,724		3,637		-		87		-		-
Floor plan		616		609		-		-		-		7
		4,340		4,246		-		87		-		7
Total		7,457		4,848		1,820		315		-		474
Total	$	1,449,106	$	1,160,899	$	45,843	$	6,596	$	-	$	235,768

At June 30, 2016 and December 31, 2015, the Companyhad outstanding credit facilities of approximately $398.6million and $415.4million, respectively, granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities, included within the portfolios of originated and other loans and acquired BBVAPR loans accounted for under ASC 310-30. A substantial portion of the Company’s credit exposure to Puerto Rico’s government consists of collateralized loans or obligations that have a specific source of income or revenues identified for their repayment. Approximately $204 million of these loans are general obligations of municipalities secured by ad valorem taxation, without limitation as to rate or amount, on all taxable property within the issuing municipalities. The good faith, credit and unlimited taxing power of each issuing municipality are pledged for the payment of its general obligations.

At June 30, 2016, we had approximately $194.4 million of credit facilities to central government and public corporations of the Commonwealth, including:

• PREPA with an outstanding balance of $183.0 million; and
• The Puerto Rico Housing Finance Authority ("PRHFA") with an outstanding balance of $11.0million to be repaid from abandoned or unclaimed funds at financial institutions that revert to the government under a Puerto Rico escheat law.

The outstanding balance of credit facilities to central government and public corporations decreased by $10.0 million during the first quarter of 2016 as a result of a partial repayment by PRHFA.

Oriental Bank is part of a four bank syndicate that provided a $550 million revolving line of credit to finance the purchase of fuel for PREPA’s day-to-day power generation activities. Our participation in the line of credit has an unpaid principal balance of $183.0 million as ofJune 30, 2016. As part of the bank syndicate, the Bank entered into a Restructuring Support Agreement on November 5, 2015 with PREPA and certain other creditors. The Restructuring Support Agreement provides for the restructuring of the fuel line of credit subject to the accomplishment of several milestones, including some milestones that depend on the actions of third parties to the agreement, such as the negotiation of agreements with other creditors and legislative action. The Company expects the restructuring to be completed by the end of 2016. The Company conducted an impairment analysis considering the probability of collection of principal and interest, which included a financial model to project the future liquidity status of PREPA under various scenarios and its capacity to service its financial obligations, and concluded that PREPA had sufficient cash flows for the repayment of the line of credit. Despite the Company’s analysis showing PREPA’s capacity to repay the line of credit, the Company classifies this participation in the substandard risk category and non-accrual and has a $53.3 million allowance for loan and lease losses recorded for this line of credit. Since April 1, 2015, interest payments have been applied to principal.

For residential and consumer loan classes, the Company evaluates credit quality based on the delinquency status of the loan. As of June 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of gross originated and other loans and acquiredBBVAPR loans accounted for under ASC 310-20 not subject to risk rating by class of loans is as follows:

	June 30, 2016
	Delinquency
															Individually
	Balance														Measured for
	Outstanding		0-29 days		30-59 days		60-89 days		90-119 days		120-364 days		365+ days		Impairment
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year)
Up to the year 2002	$	54,058	$	48,163	$	259	$	2,023	$	527	$	1,153	$	1,292	$	641
Years 2003 and 2004		94,753		82,651		343		3,936		1,864		1,859		2,312		1,788
Year 2005		52,061		45,538		-		1,878		497		918		2,410		820
Year 2006		73,886		60,860		511		2,244		554		1,603		4,584		3,530
Years 2007, 2008 and 2009		84,018		66,997		703		1,286		569		1,724		8,898		3,841
Years 2010, 2011, 2012 2013		144,751		132,451		407		1,203		182		1,581		5,132		3,795
Years 2014, 2015 and 2016		99,361		98,270		-		189		140		398		364		-
		602,888		534,930		2,223		12,759		4,333		9,236		24,992		14,415
Non-traditional		26,195		20,040		-		938		564		1,999		2,654		-
Loss mitigation program		104,081		18,865		1,692		1,381		940		1,306		3,364		76,533
		733,164		573,835		3,915		15,078		5,837		12,541		31,010		90,948
Home equity secured personal loans		384		384		-		-		-		-		-		-
GNMA's buy-back option program		8,369		-		-		-		1,498		3,228		3,643		-
		741,917		574,219		3,915		15,078		7,335		15,769		34,653		90,948
Consumer
Credit cards		24,877		23,809		459		177		214		218		-		-
Overdrafts		220		204		15		1		-		-		-		-
Unsecured personal lines of credit		2,431		2,281		42		14		11		83		-		-
Unsecured personal loans		221,648		217,759		1,854		1,137		898		-		-		-
Cash collateral personal loans		16,093		16,026		63		3		-		1		-		-
		265,269		260,079		2,433		1,332		1,123		302		-		-
Auto and Leasing		712,268		641,075		44,433		19,438		5,492		1,830		-		-
		1,719,454		1,475,373		50,781		35,848		13,950		17,901		34,653		90,948
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		32,298		30,573		731		290		290		414		-		-
Personal loans		2,896		2,707		116		14		26		33		-		-
		35,194		33,280		847		304		316		447		-		-
Auto		77,118		69,272		5,088		2,196		412		150		-		-
		112,312		102,552		5,935		2,500		728		597		-		-
Total	$	1,831,766	$	1,577,925	$	56,716	$	38,348	$	14,678	$	18,498	$	34,653	$	90,948

	December 31, 2015
	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	$	57,789	$	50,912	$	82	$	2,218	$	530	$	1,504	$	1,858	$	685
Years 2003 and 2004		99,446		87,060		251		4,867		1,261		1,353		2,921		1,733
Year 2005		54,221		47,197		79		2,553		292		1,068		2,189		843
Year 2006		78,403		63,659		318		2,878		1,168		1,895		4,871		3,614
Years 2007, 2008 and 2009		91,546		71,439		170		1,665		685		2,972		10,725		3,890
Years 2010, 2011, 2012 2013		150,744		134,945		569		1,611		434		1,982		6,737		4,466
Year 2014 and 2015		85,856		85,128		-		65		148		281		234		-
		618,005		540,340		1,469		15,857		4,518		11,055		29,535		15,231
Non-traditional		29,552		23,497		-		977		552		2,621		1,905		-
Loss mitigation program		101,916		16,031		4,173		1,977		727		1,728		2,538		74,742
		749,473		579,868		5,642		18,811		5,797		15,404		33,978		89,973
Home equity secured personal loans		410		346		-		-		-		64		-		-
GNMA's buy-back option program		7,945		-		-		-		1,593		3,578		2,774		-
		757,828		580,214		5,642		18,811		7,390		19,046		36,752		89,973
Consumer
Credit cards		22,766		21,766		449		182		179		190		-		-
Overdrafts		190		166		24		-		-		-		-		-
Unsecured personal lines of credit		2,244		2,125		74		-		17		28		-		-
Unsecured personal loans		201,156		197,339		2,083		1,107		621		6		-		-
Cash collateral personal loans		16,594		16,450		125		17		2		-		-		-
		242,950		237,846		2,755		1,306		819		224		-		-
Auto and Leasing		669,163		590,482		53,549		16,839		5,708		2,585		-		-
		1,669,941		1,408,542		61,946		36,956		13,917		21,855		36,752		89,973
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		35,217		33,414		930		384		186		303		-		-
Personal loans		3,168		3,079		14		29		1		45		-		-
		38,385		36,493		944		413		187		348		-		-
Auto		106,911		96,247		7,553		2,279		623		209		-		-
		145,296		132,740		8,497		2,692		810		557		-		-
Total	$	1,815,237	$	1,541,282	$	70,443	$	39,648	$	14,727	$	22,412	$	36,752	$	89,973

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Allowance for Loan and Lease Losses

3 Months Ended

6 Months Ended

Jun. 30, 2015

Jun. 30, 2016

Loans Receivable [Abstract]

Allowance For Credit Losses Text Block

	Six-Month Period Ended June 30, 2016
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Balance at beginning of year	$	26	$	3,429	$	2,087	$	-	$	5,542
Charge-offs		(19)		(1,825)		(1,308)		-		(3,152)
Recoveries		40		169		1,044		-		1,253
Provision (recapture) for acquired BBVAPR loan and lease losses accounted for under ASC 310-20		(26)		1,229		(359)		-		844
Balance at end of year	$	21	$	3,002	$	1,464	$	-	$	4,487

	Six-Month Period Ended June 30, 2015
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Balance at beginning of year	$	65	$	1,211	$	3,321	$	-	$	4,597
Charge-offs		(16)		(2,686)		(2,304)		-		(5,006)
Recoveries		17		563		1,072		-		1,652
Provision (recapture) for acquired loan and lease losses accounted for under ASC 310-20		(12)		3,528		770		-		4,286
Balance at end of period	$	54	$	2,616	$	2,859	$	-	$	5,529

NOTE 5 – ALLOWANCE FOR LOAN AND LEASE LOSSES

The composition of the Company’s allowance for loan and lease losses at June 30, 2016 and December 31, 2015was as follows:

	June 30,		December 31,
	2016		2015
	(In thousands)
Allowance for loans and lease losses on non-acquired loans:
Originated and other loans and leases held for investment:
Mortgage	$	18,537	$	18,352
Commercial		63,144		64,791
Consumer		11,771		11,197
Auto and leasing		19,259		18,261
Unallocated		101		25
Total allowance for originated and other loans and lease losses		112,812		112,626
Acquired loans:
Acquired BBVAPR loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		21		26
Consumer		3,002		3,429
Auto		1,464		2,087
		4,487		5,542
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy) (a)
Mortgage		1,585		1,762
Commercial		15,863		21,161
Auto		5,353		2,862
		22,801		25,785
Total allowance for acquired BBVAPR loans and lease losses		27,288		31,327
Acquired Eurobank loans: (a)
Loans secured by 1-4 family residential properties		11,016		22,570
Commercial and other construction		11,096		67,365
Consumer		4		243
Total allowance for acquired Eurobank loan and lease losses (a)		22,116		90,178
Total allowance for loan and lease losses (a)	$	162,216	$	234,131
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these 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.

Effective June 30, 2016, pursuant to supervisory direction, the Company revised its purchase credit impaired policy for all loans accounted for under ASC 310-30. Under the revised policy, the Company writes-off the loan’s recorded investment and derecognizes the associated allowance for loan and lease losses for loans that exit the pools. The revised policy will be implemented prospectively due to the immaterial impact of retrospective adoption. Prior to June 30, 2016, the pool’s carrying value and allowance was determined by discounting expected cash flows at the pool’s effective yield. The allowance for loan and lease losses was maintained until all of the loans in the pool were paid off or charged-off. The transition to this revised policy on June 30, 2016 resulted in the de-recognition of $8.5 million and $72.2 million in the recorded investment balance and associated allowance for loans that had exited the pools for acquired BBVAPR loans and acquired Eurobank loans, respectively, with no impact to the provision for loan and lease losses.

Allowance for Originated and Other Loan and Lease Losses Held for Investment

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

	Quarter Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for originated and other loans:
Balance at beginning of period	$	18,784	$	64,206	$	11,414	$	18,716	$	118	$	113,238
Charge-offs		(1,374)		(833)		(2,811)		(8,100)		-		(13,118)
Recoveries		36		228		133		3,243		-		3,640
Provision (recapture) for originated and other loans and lease losses		1,091		(457)		3,035		5,400		(17)		9,052
Balance at end of period	$	18,537	$	63,144	$	11,771	$	19,259	$	101	$	112,812

	Six-Month Period Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for originated and other loans:
Balance at beginning of period	$	18,352	$	64,791	$	11,197	$	18,261	$	25	$	112,626
Charge-offs		(3,036)		(1,844)		(5,138)		(16,462)		-		(26,480)
Recoveries		181		316		235		6,222		-		6,954
Provision (recapture) for loan and lease losses		3,040		(119)		5,477		11,238		76		19,712
Balance at end of period	$	18,537	$	63,144	$	11,771	$	19,259	$	101	$	112,812

	June 30, 2016
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	8,864	$	56,758	$	-	$	-	$	-	$	65,622
Collectively evaluated for impairment		9,673		6,386		11,771		19,259		101		47,190
Total ending allowance balance	$	18,537	$	63,144	$	11,771	$	19,259	$	101	$	112,812
Loans:
Individually evaluated for impairment	$	90,948	$	217,960	$	-	$	-	$	-	$	308,908
Collectively evaluated for impairment		650,969		1,258,653		265,269		712,268		-		2,887,159
Total ending loan balance	$	741,917	$	1,476,613	$	265,269	$	712,268	$	-	$	3,196,067

	Quarter Ended June 30, 2015
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for originated and other loans:
Balance at beginning of period	$	18,086	$	33,123	$	9,405	$	15,762	$	383	$	76,759
Charge-offs		(1,356)		(497)		(2,309)		(7,662)		-		(11,824)
Recoveries		67		219		390		3,425		-		4,101
Provision for originated and other loans and lease losses		1,279		1,934		2,978		3,539		223		9,953
Balance at end of period	$	18,076	$	34,779	$	10,464	$	15,064	$	606	$	78,989

	December 31, 2015
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	9,233	$	55,947	$	-	$	-	$	-	$	65,180
Collectively evaluated for impairment		9,119		8,844		11,197		18,261		25		47,446
Total ending allowance balance	$	18,352	$	64,791	$	11,197	$	18,261	$	25	$	112,626
Loans:
Individually evaluated for impairment	$	89,973	$	235,294	$	-	$	-	$	-	$	325,267
Collectively evaluated for impairment		667,855		1,206,355		242,950		669,163		-		2,786,323
Total ending loan balance	$	757,828	$	1,441,649	$	242,950	$	669,163	$	-	$	3,111,590

Allowance for BBVAPR Acquired Loan Losses

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

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

	Quarter Ended June 30, 2016
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Balance at beginning of period	$	23	$	3,243	$	1,727	$	-	$	4,993
Charge-offs		(12)		(1,013)		(571)		-		(1,596)
Recoveries		8		88		446		-		542
Provision (recapture) for acquired BBVAPR loan and lease losses accounted for under ASC 310-20		2		684		(138)		-		548
Balance at end of period	$	21	$	3,002	$	1,464	$	-	$	4,487

	June 30, 2016
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	$	21	$	3,002	$	1,464	$	-	$	4,487
Total ending allowance balance	$	21	$	3,002	$	1,464	$	-	$	4,487
Loans:
Individually evaluated for impairment	$	1,433	$	-	$	-	$	-	$	1,433
Collectively evaluated for impairment		3,126		35,194		77,118		-		115,438
Total ending loan balance	$	4,559	$	35,194	$	77,118	$	-	$	116,871

	Quarter Ended June 30, 2015
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Balance at beginning of period	$	49	$	1,885	$	3,516	$	-	$	5,450
Charge-offs		(16)		(1,303)		(1,038)		-		(2,357)
Recoveries		7		429		502		-		938
Provision (recapture) for acquired loan and lease losses accounted for under ASC 310-20		14		1,605		(121)		-		1,498
Balance at end of period	$	54	$	2,616	$	2,859	$	-	$	5,529

	December 31, 2015
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	$	26	$	3,429	$	2,087	$	-	$	5,542
Total ending allowance balance	$	26	$	3,429	$	2,087	$	-	$	5,542
Loans:
Individually evaluated for impairment	$	474	$	-	$	-	$	-	$	474
Collectively evaluated for impairment		6,983		38,385		106,911		-		152,279
Total ending loan balance	$	7,457	$	38,385	$	106,911	$	-	$	152,753

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

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

	Quarter Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30:
Balance at beginning of period	$	1,762	$	20,430	$	-	$	5,555	$	27,747
(Recapture) provision for BBVAPR loans and lease losses accounted for under ASC 310-30		(163)		3,977		-		-		3,814
Loan pools fully charged-off		(14)		-		-		(202)		(216)
Allowance de-recognition (a)		-		(8,544)		-		-		(8,544)
Balance at end of period	$	1,585	$	15,863	$	-	$	5,353	$	22,801
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.
	Six-Month Period Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30:
Balance at beginning of period	$	1,678	$	21,245	$	-	$	2,862	$	25,785
(Recapture) provision for BBVAPR loans and lease losses accounted for under ASC 310-30		(79)		3,228		-		2,693		5,842
Loan pools fully charged-off		(14)		(66)		-		(202)		(282)
Allowance de-recognition (a)		-		(8,544)		-		-		(8,544)
Balance at end of period	$	1,585	$	15,863	$	-	$	5,353	$	22,801
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

Allowance for Acquired Eurobank Loan Losses

For loans accounted for under ASC 310-30, as part of the evaluation of actual versus expected cash flows, the Company assesses on a quarterly basis the credit quality of these loans based on delinquency, severity factors and risk ratings, among other assumptions. Migration and credit quality trends are assessed at the pool level, by comparing information from the latest evaluation period through the end of the reporting period.

The changes in the allowance for loan and lease losses on acquired Eurobank loansfor the quarters and six-month periods endedJune 30, 2016 and 2015 were as follows:

	Quarter Ended June 30, 2016
	Loans Secured by 1-4 Family Residential Properties		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for acquired Eurobank loans:
Balance at beginning of period	$	23,961	$	68,089	$	243	$	-	$	92,293
Provision (recapture) for acquired Eurobank loans and lease losses, net		237		801		(7)		-		1,031
FDIC shared-loss portion of provision for covered loan and lease losses, net		951		-		-		-		951
Allowance de-recognition (a)		(14,133)		(57,794)		(232)		-		(72,159)
Balance at end of period	$	11,016	$	11,096	$	4	$	-	$	22,116
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.
	Six-Month Period Ended June 30, 2016
	Loans Secured by 1-4 Family Residential Properties		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for acquired Eurobank loans:
Balance at beginning of period	$	22,570	$	67,365	$	243	$	-	$	90,178
Provision (recapture) for acquired Eurobank loans and lease losses, net		184		1,659		(7)		-		1,836
FDIC shared-loss portion of provision for covered loan and lease losses, net		2,395		-		-		-		2,395
Loan pools fully charged-off		-		(134)		-		-		(134)
Allowance de-recognition (a)		(14,133)		(57,794)		(232)		-		(72,159)
Balance at end of year	$	11,016	$	11,096	$	4	$	-	$	22,116
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

	Quarter Ended June 30, 2015
	Mortgage		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for acquired Eurobank loans:
Balance at beginning of period	$	17,340	$	52,922	$	389	$	-	$	70,651
Provision (recapture) for Eurobank loans and lease losses, net		148		(253)		-		-		(105)
FDIC shared-loss portion of provision for covered loan and lease losses, net		105		801		-		-		906
Balance at end of period	$	17,593	$	53,470	$	389	$	-	$	71,452
	Six-Month Period Ended June 30, 2015
	Mortgage		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for Eurobank loans:
Balance at beginning of year	$	15,522	$	48,334	$	389	$	-	$	64,245
Provision for Eurobank loans and lease losses, net		1,966		2,738		-		-		4,704
FDIC shared-loss portion of provision for covered loan and lease losses, net		105		2,398		-		-		2,503
Balance at end of year	$	17,593	$	53,470	$	389	$	-	$	71,452

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

The FDIC loss sharing obligation, related to commercial and other-non single family acquired Eurobank loans expired on June 30, 2015. The coverage for the single family residential loans will expire on June 30, 2020. The remaining covered loans are included as part of acquired Eurobank loans under the name "loans secured by 1-4 family residential properties." At June 30, 2016 and December 31, 2015, allowance for loan losses on loans covered by the FDIC shared-loss agreement amounted to $11.0million and $22.6 million, respectively. The provision for covered loan and lease losses for the quarters ended June 30, 2016 and 2015was $237 thousand and a recapture of $105thousand, respectively.

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FDIC Indemnification Asset and True-up Payment Obligation

6 Months Ended

Jun. 30, 2016

Banking and Thrift [Abstract]

FDIC Indemnification Asset and True-up Payment Obligation [Text Block]

NOTE 6- FDIC INDEMNIFICATION ASSET, TRUE-UP PAYMENT OBLIGATION, AND FDIC SHARED-LOSS EXPENSE

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 end of the quarter of the acquisition. The coverage under the commercial shared-loss agreement expired on June 30, 2015. 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 six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
FDIC indemnification asset:
Balance at beginning of period	$	20,923	$	75,221	$	22,599	$	97,378
Shared-loss agreements reimbursements from the FDIC		(332)		(24,387)		(737)		(38,087)
Increase in expected credit losses to be covered under shared-loss agreements, net		951		906		2,395		2,503
FDIC indemnification asset expense		(1,405)		(22,512)		(4,269)		(34,733)
Incurred expenses to be reimbursed under shared-loss agreements		(1,711)		(6,524)		(1,562)		(4,357)
Balance at end of period	$	18,426	$	22,704	$	18,426	$	22,704
True-up payment obligation:
Balance at beginning of period	$	25,235	$	22,844	$	24,658	$	21,981
Change in true-up payment obligation		537		733		1,114		1,596
Balance at end of period	$	25,772	$	23,577	$	25,772	$	23,577

The FDIC shared-loss expense bears an inverse relationship with a change in the yield of covered loan 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 account.

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 loss-share coverage for the commercial loans was in effect until June 30, 2015. Accordingly, the Company amortized the remaining portion of the FDIC indemnification asset attributable to non-single family loans at the close of the second quarter of 2015. At June 30, 2016 and December 31, 2015, the FDIC indemnification asset reflects only the balance for single family residential mortgage loans.

The Company has owed payments to the FDIC for the recovery of prior claims for commercial loans. At June 30, 2016, the liability for these payments amounted to $1.1 million and is recorded in other liabilities in the consolidated statements of financial condition until cash is paid to the FDIC. There was no liability at June 30, 2015.

The FDIC indemnification asset expense decreased to $1.4 million for the quarter ended June 30, 2016when compared to $22.5 million for the same period in 2015. The expense of $4.3 million for the six-month period ended June 30, 2016 represented a decrease of $30.5 million when compared to $34.7 million for the same period in 2015. The decrease during the period was principally driven by the expiration of the FDIC loss-share coverage for commercial loans and other non-single family residential loans.

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 estimated liability is included within accrued expenses and other liabilities in the unaudited consolidated statements of financial condition.

This true-up payment obligation may increase if actual and expected losses decline. The Company measures the true-up payment obligation at fair value. The changes in fair value are included as a change in true-up payment obligation within the 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 June 30, 2016 and December 31, 2015:

		June 30,		December 31,
	2016		2015
	(In thousands)
Carrying amount (fair value)	$	25,772	$	24,658
Undiscounted amount	$	33,782	$	34,956

In connection with the FDIC-assisted acquisition, the Company recognized an FDIC shared-loss expense, net, in the unaudited consolidated statements of operations, which consists of the following for the quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
FDIC indemnification asset expense	$	1,405	$	22,512	$	4,269	$	34,733
Change in true-up payment obligation		537		733		1,114		1,596
Reimbursement to FDIC for recoveries		1,478		-		2,066		-
Total FDIC shared-loss expense, net	$	3,420	$	23,245	$	7,449	$	36,329

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Derivative Activities

6 Months Ended

Jun. 30, 2016

Derivative Activities [Abstract]

Derivative Acitivities

NOTE 7— DERIVATIVES

The following table presents the Company’s derivative assets and liabilities at June 30, 2016 and December 31, 2015:

	June 30,		December 31,
	2016		2015
	(In thousands)
Derivative assets:
Options tied to S&P 500 Index	$	187	$	1,170
Interest rate swaps not designated as hedges		1,703		1,819
Interest rate caps		36		32
Other		-		4
	$	1,926	$	3,025
Derivative liabilities:
Interest rate swaps designated as cash flow hedges	$	3,656	$	4,307
Interest rate swaps not designated as hedges		1,703		1,819
Interest rate caps		36		32
Other		18		4
	$	5,413	$	6,162

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 the cash flow hedges is recognized in other comprehensive income (loss) and is subsequently reclassified into operations 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 (loss) related to these interest rate swaps to operations in the next twelve months.

The following table shows a summary of these swaps and their terms at June 30, 2016:

	Notional		Fixed	Variable	Trade	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date	Date
	(In thousands)
Interest Rate Swaps	$	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
		37,290	2.4210%	1-Month LIBOR	07/03/13	07/03/13	08/01/23
	$	237,290

An accumulated unrealized loss of $3.7 millionand $4.3million was recognized in accumulated other comprehensive income related to the valuation of these swaps at June 30, 2016 and December 31, 2015, respectively, and the related liability is being reflected in the accompanying unaudited consolidated statements of financial condition.

At June 30, 2016 and December 31, 2015, interest rate swaps not designated as hedging instruments that were offered to clients represented an asset of $1.7 million and $1.8 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 June 30, 2016 and December 31, 2015, interest rate swaps not designated as hedging instruments that are the mirror-images of the derivatives offered to clients represented a liability of $1.7 million and $1.8 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 June 30, 2016:

	Notional		Fixed	Variable	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date
	(In thousands)
Interest Rate Swaps - Derivatives Offered to Clients	$	3,682	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,182
Interest Rate Swaps - Mirror Image Derivatives	$	3,682	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,182

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 June 30, 2016 and December 31, 2015, the purchased options used to manage exposure to the S&P 500 Index on stock indexed deposits represented an asset of $187 thousand (notional amount of $425 thousand) and $1.2 million (notional amount of $3.4million), 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 $181thousand (notional amount of $411 thousand) and $1.1million (notional amount of $3.2 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. As of June 30, 2016 and December 31, 2015, the outstanding total notional amount of interest rate caps was $124.5 million and $109.8 million, respectively. At June 30, 2016 and December 31, 2015, the interest rate caps sold to clients represented a liability of $36thousand and $32 thousand, respectively, and were included as part of derivative liabilities in the unaudited consolidated statements of financial condition. At June 30, 2016 and December 31, 2015, the interest rate caps purchased as mirror-images represented an asset of $36 thousand and $32 thousand, respectively, and were included as part of derivative assets in the unaudited consolidated statements of financial condition.

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Accrued Interest Receivable and Other Assets

6 Months Ended

Jun. 30, 2016

Accrued Interest Receivable And Other Assets [Abstract]

Other Assets Disclosure [Text Block]

NOTE 8—ACCRUED INTEREST RECEIVABLE ANDOTHER ASSETS

Accrued interest receivable at June 30, 2016 and December 31, 2015consists of the following:

	June 30,		December 31,
	2016		2015
	(In thousands)
Loans, excluding acquired loans	$	16,545	$	16,020
Investments		3,464		4,617
	$	20,009	$	20,637

Other assets atJune 30, 2016 and December 31, 2015consist of the following:

	June 30,		December 31,
	2016		2015
	(In thousands)
Prepaid expenses		16,332		11,762
Other repossessed assets		3,866		6,226
Core deposit and customer relationship intangibles		6,999		7,838
Mortgage tax credits		6,277		6,277
Investment in Statutory Trust		1,083		1,083
Accounts receivable and other assets		42,255		42,786
	$	76,812	$	75,972

Prepaid expenses amounting to $16.3 million and $11.8 million atJune 30, 2016 and December 31, 2015, respectively, include prepaid municipal, property and income taxes aggregating to $11.2 million and $7.0 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 June 30, 2016 and December 31, 2015 this core deposit intangible amounted to $4.8 million and $5.3million, respectively. In addition, the Company recorded a customer relationship intangible representing the value of customer relationships acquired with the acquisition of the securities broker-dealer and insurance agency in the BBVAPR Acquisition. At June 30, 2016 and December 31, 2015 this customer relationship intangible amounted to $2.2million and $2.5million, respectively.

Other repossessed assets totaled $3.9 million atJune 30, 2016and $6.2 million at December 31, 2015, include repossessed automobiles amounting to $3.7 million and $5.5 million, respectively, which are recorded at their net realizable value.

At June 30, 2016 and December 31, 2015, mortgage tax credits for the Company totaled $6.3 million for both periods. These tax credits do not have an expiration date.

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Deposits and Related Interest

6 Months Ended

Jun. 30, 2016

Deposits and Related Interest [Abstract]

Deposit and Related Interest

NOTE 9— DEPOSITS AND RELATED INTEREST

Total deposits, including related accrued interest payable, as of June 30, 2016 and December 31, 2015consists of the following:

		June 30,		December 31,
	2016		2015
	(In thousands)
Non-interest bearing demand deposits	$	917,260	$	762,009
Interest-bearing savings and demand deposits		2,165,907		2,208,180
Individual retirement accounts		269,189		268,799
Retail certificates of deposit		525,979		441,998
Institutional certificates of deposit		204,074		253,791
Total core deposits		4,082,409		3,934,777
Brokered deposits		561,645		782,974
Total deposits	$	4,644,054	$	4,717,751

Brokered deposits include $495.9 million in certificates of deposits and $65.7 million in money market accounts at June 30, 2016, and $711.4million in certificates of deposits and $71.6million in money market accounts at December 31, 2015.

The weighted average interest rate of the Company’s deposits was 0.63% and 0.57% atJune 30, 2016 and December 31, 2015, respectively. Interest expense for the quarters and six-month periods ended June 30, 2016 and 2015 was as follows:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Demand and savings deposits	$	3,184	$	3,100	$	6,026	$	6,482
Certificates of deposit		4,183		3,504		8,465		7,226
	$	7,367	$	6,604	$	14,491	$	13,708

At June 30, 2016 and December 31, 2015, demand and interest-bearing deposits and certificates of deposit included deposits of the Puerto Rico Cash & Money Market Fund, Inc., which amounted to $104.4 million and $103.7 million, respectively, with a weighted average rate of 0.77%for both periods, andwere collateralized with investment securities with a fair value of $84.7 million and $81.6 million, respectively.

At June 30, 2016 and December 31, 2015, time deposits in denominations of $250 thousand or higher, excluding accrued interest and unamortized discounts, amounted to $340.9million and $376.8 million, respectively. Such amounts include public fund time deposits from various Puerto Rico government municipalities, agencies, and corporations of $9.2 million and $7.6 millionat a weighted average rate of 0.55% and 0.49% at June 30, 2016 and December 31, 2015, respectively.

At June 30, 2016and December 31, 2015, total public fund deposits from various Puerto Rico government municipalities, agencies, and corporationsamounted to $88.4 million and $99.0million, respectively. These public funds were collateralized with commercial loans amounting to $410.9 million atJune 30, 2016 and December 31, 2015.

Excluding equity indexed options in the amount of $181thousand, which are used by the Company to manage its exposure to the S&P 500 Index, and also excluding accrued interest of $1.8million and unamortized deposit discount in the amount of $150 thousand, the scheduled maturities of certificates of deposit at June 30, 2016 and December 31, 2015are as follows:

	June 30, 2016		December 31, 2015
	(In thousands)
Within one year:
Three (3) months or less	$	225,512	$	474,051
Over 3 months through 1 year		518,304		501,551
		743,816		975,602
Over 1 through 2 years		513,092		454,906
Over 2 through 3 years		155,666		176,406
Over 3 through 4 years		36,059		32,396
Over 4 through 5 years		44,340		33,715
	$	1,492,973	$	1,673,025

The table of scheduled maturities of certificates of depositsabove includes brokered-deposits and individual retirement accounts.

The aggregate amount of overdrafts in demand deposit accounts that were reclassified to loans amounted to $569thousandas of June 30, 2016and $1.5 million as of December 31, 2015.

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Borrowings

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Borrowings

NOTE 10— BORROWINGS AND RELATED INTEREST

Securities Sold under Agreements to Repurchase

At June 30, 2016, 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 June 30, 2016 and December 31, 2015, securities sold under agreements to repurchase (classified by counterparty), excluding accrued interest in the amount of $1.6 million and $2.2 million, respectively,were as follows:

	June 30,				December 31,
	2016				2015
			Fair Value of				Fair Value of
	Borrowing		Underlying		Borrowing		Underlying
	Balance		Collateral		Balance		Collateral
	(In thousands)
JP Morgan Chase Bank NA	$	222,500	$	231,586	$	262,500	$	283,483
Credit Suisse Securities (USA) LLC		402,000		437,103		670,000		737,887
Total	$	624,500	$	668,689	$	932,500	$	1,021,370

The following table shows a summary of the Company’s repurchase agreements and their terms, excluding accrued interest in the amount of $1.6 million, atJune 30, 2016:

			Weighted-
	Borrowing		Average		Maturity
Year of Maturity	Balance		Coupon	Settlement Date	Date
	(In thousands)
2016	$	170,000	1.500%	12/6/2012	12/8/2016
2017		232,000	4.780%	3/2/2007	3/2/2017
2018		222,500	1.420%	12/10/2012	4/29/2018
	$	624,500	2.690%

The Company's repurchase agreement in the original amount of $500 million with an original term of ten years, maturing on March 2, 2017, was modified in February 2016 to terminate, before maturity, $268.0million of this repurchase agreement at a cost of $12.0 million, included as a loss on early extinguishment of debt in the unaudited statements of operations. The remaining balance of this repurchase agreement was $232.0 million at June 30, 2016.

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 June 30, 2016 and December 31, 2015. There was no cash collateral at June 30, 2016 and December 31, 2015.

	June 30, 2016
					Market Value of Underlying Collateral
			Weighted		FNMA and				US Treasury
	Repurchase		Average		FHLMC		GNMA		Treasury
	Liability		Rate		Certificates		Certificates		Notes		Total
	(Dollars in thousands)
Over 90 days	$	624,500		2.69%	$	646,889	$	1,579	$	20,221	$	668,689
	December 31, 2015
					Market Value of Underlying Collateral
			Weighted		FNMA and				US Treasury
	Repurchase		Average		FHLMC		GNMA		Treasury
	Liability		Rate		Certificates		Certificates		Notes		Total
	(Dollars in thousands)
Less than 90 days	$	30,000		0.70%	$	31,961	$	-	$	-	$	31,961
Over 90 days		902,500		3.18%		974,698		2,131		12,580		989,409
Total	$	932,500		3.10%	$	1,006,659	$	2,131	$	12,580	$	1,021,370

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 June 30, 2016 and December 31, 2015, these advances were secured by mortgage and commercial loans amounting to $1.5 billion and $1.3billion, respectively. Also, at June 30, 2016 and December 31, 2015, the Company had an additional borrowing capacity with the FHLB-NY of $895.0 million and $770.6million, respectively. At June 30, 2016 and December 31, 2015, the weighted average remaining maturity of FHLB’s advances was5.4 months and 6.3months, respectively. The original terms of these advances ranges between one month and seven years, and the FHLB-NY does not have the right to exercise put options at par on any advances outstanding as ofJune 30, 2016.

The following table shows a summary of these advances and their terms, excluding accrued interest in the amount of $336 thousand, at June 30, 2016:

			Weighted-
		Borrowing	Average		Maturity
Year of Maturity		Balance	Coupon	Settlement Date	Date
		(In thousands)
2016	$	50,000	0.56%	6/10/2016	7/11/2016
		100,000	0.59%	6/16/2016	7/18/2016
		25,000	0.60%	6/24/2016	7/25/2016
		25,000	0.57%	6/30/2016	7/29/2016
		37,290	0.63%	6/1/2016	7/1/2016
		237,290
2017		4,150	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		9,704	2.59%	7/19/2013	7/20/2020
	$	306,144	0.95%

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 $103.0 million and $102.6 million at June 30, 2016 and December 31, 2015, respectively.

Under the requirements of Puerto Rico Banking Act, the Bank must establish a redemption fund for the subordinated capital notes, which will mature on September 29, 2016, by transferring from undivided profits pre-established amounts as follows:

	Redemption fund
	(In thousands)
Redemption fund at June 30, 2016	$	67,000
	$	67,000

Other borrowings

Other borrowings, presented in the unaudited consolidated statements of financial condition amounted to $1.8 million and $1.7 million at June 30, 2016and December 31, 2015, respectively, which mainly consists of unsecured fixed-rate borrowings.

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Offset of Assets/Liabilities

6 Months Ended

Jun. 30, 2016

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 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 June 30, 2016 and December 31, 2015:

June 30, 2016

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

$

1,926

$

-

$

1,926

$

2,009

$

-

$

(83)

December 31, 2015

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

$

3,025

$

-

$

3,025

$

2,000

$

-

$

1,025

June 30, 2016
							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	$	5,594	$	-	$	5,594	$	-	$	1,980	$	3,614
Securities sold under agreements to repurchase		624,500		-		624,500		668,689		-		(44,189)
Total	$	630,094	$	-	$	630,094	$	668,689	$	1,980	$	(40,575)
December 31, 2015
							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	$	7,257	$	-	$	7,257	$	-	$	1,980	$	5,277
Securities sold under agreements to repurchase		932,500		-		932,500		1,021,370		-		(88,870)
Total	$	939,757	$	-	$	939,757	$	1,021,370	$	1,980	$	(83,593)

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Related Party Transactions

6 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 12—RELATED PARTY TRANSACTIONS

The Bank grants loans to its directors, executive officers and 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.The activity and balance of these loans for the quarters and six-month periods endedJune 30, 2016 and 2015was as follows:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Balance at the beginning of year	$	31,134	$	27,508	$	31,475	$	27,011
New loans and disbursements		1,596		6,457		1,799		10,312
Repayments		(2,034)		(647)		(2,578)		(4,005)
Balance at the end of period	$	30,696	$	33,318	$	30,696	$	33,318

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Income Taxes

6 Months Ended

Jun. 30, 2016

Income Taxes [Abstract]

Income Taxes

NOTE 13 — INCOME TAXES

On May 26, 2016, Law 54 of 2016 was enacted to repeal the Value Added Tax (VAT) approved in 2015. Although this law was vetoed by the Governor, the Puerto Rico's Senate and House of Representatives were able to override the veto. As a result, the current Sales and Use Tax (SUT) remains in effect, with a rate of 11.5% on most transactions and a rate of 4% for business to business transactions and designated professional services.

At June 30, 2016 and December 31, 2015, the Company’s net deferred tax asset amounted to $143.0 million and $145.9 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 deferred tax asset, net of the existing valuation allowances recorded at June 30, 2016 and December 31, 2015. 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 carry forward period are reduced.

At June 30, 2016 and December 31, 2015, Oriental International Bank Inc. (“OIB”), the Bank’s international banking entity subsidiary, had $126 thousand and $141 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 quarter ended June 30, 2016 and 2015, $8thousand and $12 thousand, respectively, related to this residual tax effect from OIB was reclassified from accumulated other comprehensive income (loss) into income tax provision. During the six-month period ended June 30, 2016 and 2015, $16 thousand and $22 thousand, respectively, related to this residual tax effect from OIB was reclassified from accumulated other comprehensive income (loss) into 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 was $2.3million at June 30, 2016 and$2.2 million atDecember 31, 2015. The Company had accrued $81 thousand at June 30, 2016 and $175 thousand at December 31, 2015 for the payment of interest and penalties relating to unrecognized tax benefits.

Income tax expense for the quarters ended June 30, 2016 and 2015was $5.9 million and $769 thousand, respectively. Income tax expense for the six-month periods ended June 30, 2016 and 2015 was $11.5 million and $1.7 million, respectively.

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Regulatory Capital Requirements

6 Months Ended

Jun. 30, 2016

Regulatory Capital Requirements Abstract

Regulatory Capital Requirements Under Banking Regulations Text Block

NOTE 14— REGULATORY CAPITAL REQUIREMENTS

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, 2015 for the Company and the Bank (subject to certain phase-in periods through January 1, 2019) and that replaced their general risk-based capital rules, advanced approaches rule, market risk rule, and leverage rules. Among other matters, the new capital rules: (i) introduce a new capital measure called “Common Equity Tier 1” (“CET1”) and related regulatory capital ratio of CET1 to risk-weighted assets; (ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting certain revised requirements; (iii) mandate that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital; and (iv) expand the scope of the deductions from and adjustments to capital as compared to prior regulations. The new capital rules prescribe a new standardized approach for risk weightings that expand the risk-weighting categories from the current four Basel I-derived categories (0%, 20%, 50% and 100%) to a larger and more risk-sensitive number of categories, depending on the nature of the assets, and resulting in higher risk weights for a variety of asset classes.

Pursuant to the new capital rules, the minimum capital ratios requirements as of January 1, 2015 are as follows:

4.5% CET1 to risk-weighted assets;

6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets;

8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets; and

4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known

as the “leverage ratio”).

As of June 30, 2016 and December 31, 2015, the Company and the Bank met all capital adequacy requirements to which they are subject. As of June 30, 2016 and December 31, 2015, the Bank is “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” an institution must maintain minimum CET1 risk-based, Tier 1 risk-based, total risk-based, and Tier 1 leverage ratios as set forth in the tables presented below.

The New Capital Rules also introduce a new 2.5% “capital conservation buffer”, composed entirely of CET1, on top of the three minimum risk-weighted asset ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET1 to risk-weighted assets above the minimum but below the capital conservation buffer will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. Thus, when fully phased-in on January 1, 2019, the Company and the Bank will be required to maintain such an additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios of (i) CET1 to risk-weighted assets of at least 7%, (ii) Tier 1 capital to risk-weighted assets of at least 8.5%, and (iii) Total capital to risk-weighted assets of at least 10.5%. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and increase by 0.625% on each subsequent January 1, until it reaches 2.5% on January 1, 2019. At June 30, 2016 the Company and the Bank met the capital buffer requirement.

The Company’s and the Bank’s actual capital amounts and ratios as of June 30, 2016 and December 31, 2015are as follows:

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio		Amount	Ratio
	(Dollars in thousands)
Company Ratios
As of June 30, 2016
Total capital to risk-weighted assets	$	849,147	18.00%	$	377,323	8.00%	$	471,653	10.00%
Tier 1 capital to risk-weighted assets	$	788,349	16.71%	$	282,992	6.00%	$	377,323	8.00%
Common equity tier 1 capital to risk-weighted assets	$	596,080	12.64%	$	212,244	4.50%	$	306,575	6.50%
Tier 1 capital to average total assets	$	788,349	11.92%	$	264,633	4.00%	$	330,791	5.00%
As of December 31, 2015
Total capital to risk-weighted assets	$	846,748	17.29%	$	391,723	8.00%	$	489,654	10.00%
Tier 1 capital to risk-weighted assets	$	782,912	15.99%	$	293,792	6.00%	$	391,723	8.00%
Common equity tier 1 capital to risk-weighted assets	$	594,482	12.14%	$	220,344	4.50%	$	318,275	6.50%
Tier 1 capital to average total assets	$	782,912	11.18%	$	280,009	4.00%	$	350,011	5.00%

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Bank Ratios
As of June 30, 2016
Total capital to risk-weighted assets	$	830,002	17.62%	$	376,874	8.00%	$	471,093	10.00%
Tier 1 capital to risk-weighted assets	$	769,424	16.33%	$	282,656	6.00%	$	376,874	8.00%
Common equity tier 1 capital to risk-weighted assets	$	769,424	16.33%	$	211,992	4.50%	$	306,210	6.50%
Tier 1 capital to average total assets	$	769,424	11.68%	$	263,464	4.00%	$	329,330	5.00%
As of December 31, 2015
Total capital to risk-weighted assets	$	815,458	16.70%	$	390,688	8.00%	$	488,360	10.00%
Tier 1 capital to risk-weighted assets	$	751,886	15.40%	$	293,016	6.00%	$	390,688	8.00%
Common equity tier 1 capital to risk-weighted assets	$	751,886	15.40%	$	219,762	4.50%	$	317,434	6.50%
Tier 1 capital to average total assets	$	751,886	10.80%	$	278,399	4.00%	$	347,999	5.00%

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Stockholders' Equity

6 Months Ended

Jun. 30, 2016

Stockholders' Equity [Abstract]

Stockholders' equity

NOTE 15 – STOCKHOLDERS’ EQUITY

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 June 30, 2016 and December 31, 2015accumulated issuance costs charged against additional paid-in capital amounted to $13.6 million and $10.1 million for preferred and common stock, respectively.

Legal Surplus

The Puerto Rico Banking Act requires that a minimum of 10% of the Bank’s net incomefor the year be transferred to a reserve fund until such fund (legal surplus) equals the total paid-in capital on common and preferred stock. At June 30, 2016 and December 31, 2015,the Bank’s legal surplus amounted to $73.3million and $70.4million, respectively. The amount transferred to the legal surplus account is not available for the payment of dividends to shareholders.

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 $7.7 million of authority remains. The shares of common stock repurchased are to be held by the Company as treasury shares. There were no repurchases during the six-month period ended June 30, 2016. During the six-month period ended June 30, 2015, the Company purchased 303,985 shares under this program for a total of $4.2 million at an average price of $13.90per share.

The number of shares that may yet be purchased under the $70 million program is estimated at 931,428 and was calculated by dividing the remaining balance of $7.7 million by $8.30 (closing price of the Company common stock at June 30, 2016). The Company did not purchase any shares of its common stock during the six-month period ended June 30, 2016 and 2015, other than through its publicly announced stock purchase program.

The activity in connection with common shares held in treasury by the Company for the six-month periods ended June 30, 2016 and 2015 is set forth below:

	Six-Month Period Ended June 30
	2016			2015
		Dollar			Dollar
	Shares	Amount		Shares	Amount
	(In thousands, except shares data)
Beginning of period	8,757,960	$	105,379	8,012,254	$	97,070
Common shares used upon lapse of restricted stock units	(45,810)		(505)	(58,279)		(640)
Common shares repurchased as part of the stock repurchase program	-		-	303,985		4,238
End of period	8,712,150	$	104,874	8,257,960	$	100,668

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2016

Disclosure Text Block Abstract

Comprehensive Income Note Text Block

NOTE 16-ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income, net of income tax, as of June 30, 2016 and December 31, 2015consistedof:

	June 30,		December 31,
	2016		2015
	(In thousands)
Unrealized gain on securities available-for-sale which are not other-than-temporarily impaired	$	19,004	$	22,044
Unrealized gain on securities available-for-sale which are other-than-temporarily impaired		-		(3,196)
Income tax effect of unrealized gain on securities available-for-sale		(919)		(1,924)
Net unrealized gain on securities available-for-sale which are not other-than-temporarily impaired, net of tax		18,085		16,924
Unrealized loss on cash flow hedges		(3,655)		(4,307)
Income tax effect of unrealized loss on cash flow hedges		1,375		1,380
Net unrealized loss on cash flow hedges		(2,280)		(2,927)
Accumulated other comprehensive income, net of taxes	$	15,805	$	13,997

The following table presents changes in accumulated other comprehensive income by component, net of taxes, for the quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30,
	2016						2015
	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	$	15,089	$	(2,805)	$	12,284	$	30,214	$	(5,890)	$	24,324
Other comprehensive income (loss) before reclassifications		3,060		(949)		2,111		(11,523)		(180)		(11,703)
Amounts reclassified out of accumulated other comprehensive (loss) income		(64)		1,474		1,410		141		1,539		1,680
Other comprehensive income (loss)		2,996		525		3,521		(11,382)		1,359		(10,023)
Ending balance	$	18,085	$	(2,280)	$	15,805	$	18,832	$	(4,531)	$	14,301
	Six-Month Period Ended June 30,
	2016						2015
	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	$	16,924	$	(2,927)	$	13,997	$	25,764	$	(6,053)	$	19,711
Other comprehensive (loss) before reclassifications		(1,266)		(2,406)		(3,672)		(7,212)		(1,549)		(8,761)
Amounts reclassified out of accumulated other comprehensive income (loss)		2,427		3,053		5,480		280		3,071		3,351
Other comprehensive income (loss)		1,161		647		1,808		(6,932)		1,522		(5,410)
Ending balance	$	18,085	$	(2,280)	$	15,805	$	18,832	$	(4,531)	$	14,301

The following table presents reclassifications out of accumulated other comprehensive income for the quarters and six-month periods ended June 30, 2016 and 2015:

	Amount reclassified out of accumulated
	other comprehensive income				Affected Line Item in
	Quarter Ended June 30,				Consolidated Statement
		2016		2015	of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	1,354	$	1,614	Net interest expense
Tax effect from increase in capital gains tax rate		120		(75)	Income tax expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		8		12	Income tax expense
Tax effect from increase in capital gains tax rate		(72)		129	Income tax expense
	$	1,410	$	1,680
	Amount reclassified out of accumulated
	other comprehensive income				Affected Line Item in
	Six-Month Period Ended June 30,				Consolidated Statement
		2016		2015	of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	2,804	$	3,220	Net interest expense
Tax effect from increase in capital gains tax rate		249		(149)	Income tax expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		16		22	Income tax expense
Other-than-temporary impairment losses on available for sale securities realized during the period		2,557		-
Tax effect from increase in capital gains tax rate		(146)		258	Income tax expense
	$	5,480	$	3,351

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share Text Block

NOTE 17 –EARNINGS (LOSS) PER COMMON SHARE

The calculation of earnings (loss) per common share for the quarters and six-month periods ended June 30, 2016 and 2015is as follows:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands, except per share data)				(In thousands, except per share data)
Net income (loss)	$	14,339	$	(3,109)	$	28,510	$	(6,097)
Less: Dividends on preferred stock
Non-convertible preferred stock (Series A, B, and D)		(1,629)		(1,628)		(3,256)		(3,256)
Convertible preferred stock (Series C)		(1,837)		(1,838)		(3,675)		(3,675)
Income (loss) available to common shareholders	$	10,873	$	(6,575)	$	21,579	$	(13,028)
Effect of assumed conversion of the convertible preferred stock		1,837		1,838		3,675		3,675
Income (loss) available to common shareholders assuming conversion	$	12,710	$	(4,737)	$	25,254	$	(9,353)
Weighted average common shares and share equivalents:
Average common shares outstanding		43,914		44,505		43,906		44,569
Effect of dilutive securities:
Average potential common shares-options		43		110		37		148
Average potential common shares-assuming conversion of convertible preferred stock		7,138		7,159		7,138		7,159
Total weighted average common shares outstanding and equivalents		51,095		51,774		51,081		51,876
Earnings (loss) per common share - basic	$	0.25	$	(0.15)	$	0.49	$	(0.29)
Earnings (loss) per common share - diluted	$	0.25	$	(0.15)	$	0.49	$	(0.29)

In computing diluted earnings (loss) per common share, the 84,000 shares of convertible preferred stock, which remain outstanding at June 30, 2016, with a conversion rate, subject to certain conditions, of 86.4225 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 (loss) per common share, the dividends declared during the quarters ended June 30, 2016 and 2015on the convertible preferred stock were added back as income available to common shareholders.

For the quarters ended June 30, 2016 and 2015, weighted-average stock options with an anti-dilutive effect onearnings (loss) per share not included in the calculation amounted to 957,743 and566,025, respectively

For the six-month periods ended June 30, 2016 and 2015, weighted-average stock options with an anti-dilutive effect on earnings (loss) per share not included in the calculation amounted to $957,783and $457,467, respectively.

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Guarantees

6 Months Ended

Jun. 30, 2016

Guarantees [Abstract]

Guarantees [Text Block]

NOTE 18 – GUARANTEES

At June 30, 2016, the unamortized balance of the obligations undertaken in issuing the guarantees under standby letters of credit represented a liability of $2.3 million (December 31, 2015 - $14.7 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 June 30, 2016 and December 31, 2015, the unpaid principal balance of residential mortgage loans sold subject to credit recourse was $21.1 million and $22.4million, 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 six-month periods ended June 30, 2016 and 2015.

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Balance at beginning of period	$	181	$	487	$	439	$	927
Net (charge-offs/terminations) recoveries		(19)		(198)		(277)		(638)
Balance at end of period	$	162	$	289	$	162	$	289

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. The recourse obligation will be fully extinguished before the end of 2017.

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 six-month period ended June 30, 2016, the Company repurchased approximately $83 thousand and $288 thousand, respectively of unpaid principal balance in mortgage loans subject to the credit recourse provisions.During the quarter and six-month period ended June 30, 2015, the Company repurchased approximately $1.2 millionand $3.4million, respectively 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 June 30, 2016, the Company’s liability for estimated credit losses related to loans sold with credit recourse amounted to $162 thousand (December 31, 2015– $439 thousand).

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 securitiesthat 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. During the quarter and six-month period ended June 30, 2016, the Company repurchased $817thousand and $2.3 million, respectively, of unpaid principal balance in mortgage loans, excluding mortgage loans subject to credit recourse provisions referred to above.During the quarter and six-month period ended June 30, 2015, the Company repurchased $2.7 million and $11.7 million, respectively, of unpaid principal balance in mortgage loans, excluding mortgage loans subject to credit recourse provisions referred to above.

During the quarter and six-month period ended June 30, 2016, the Company recognized $92 thousand and $111 thousand, respectively, in losses from the repurchase of residential mortgage loans sold subject to credit recourse, and $329 thousand and $830 thousand, respectively, in losses from the repurchase of residential mortgage loans as a result of breaches of the customary representations and warranties. During the quarter and six-month period ended June 30, 2015, the Company recognized $476 thousand and $583 thousand, respectively, in losses from the repurchase of residential mortgage loans sold subject to credit recourse, and $742 thousand and $1.5 million, respectively, 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 June 30, 2016, the Company serviced $726.6 million 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 June 30, 2016, the outstanding balance of funds advanced by the Company under such mortgage loan servicing agreements was approximately $339 thousand (December 31, 2015 - $301 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.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies [Abstract]

Commitments

NOTE 19—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 June 30, 2016 and December 31, 2015were as follows:

		June 30,		December 31,
	2016		2015
	(In thousands)
Commitments to extend credit	$	461,054	$	456,720
Commercial letters of credit		1,556		1,508

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 June 30, 2016 and December 31, 2015, 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 $667 thousand at both June 30, 2016 and December 31, 2015.

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 June 30, 2016 and December 31, 2015, is as follows:

		June 30,		December 31,
	2016		2015
	(In thousands)
Standby letters of credit and financial guarantees	$	4,756	$	14,656
Loans sold with recourse		21,064		22,374

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 June 30, 2016 and 2015, amounted to $2.3 million for both periods. For the six-month periods ended June 30, 2016 and 2015, rent expense amounted to $4.4 million and $4.7 million, respectively, and is included in the “occupancy and equipment” caption in the unaudited consolidated statements of operations.Future rental commitments under leases in effect atJune 30, 2016exclusive of taxes, insurance, and maintenance expenses payable by the Company, are summarized as follows:

	Minimum Rent
Year Ending December 31,	(In thousands)
2016	$	4,732
2017		6,850
2018		6,428
2019		6,387
2020		5,660
Thereafter		12,500
	$	42,557

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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Fair Value

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value

NOTE 20- 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 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.

Money market investments

The fair value of money market investments is based on the carrying amounts reflected in the unaudited 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 Interactive Data Corporation (“IDC”), an independent, well-recognized pricing company. 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 June 30, 2016 and December 31, 2015, the Company did not have investment securities classified as Level 3.

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.

Impaired Loans

Impaired loans are carried at the present value of expected future cash flows using the loan’s existing rate in a discounted cash flow calculation, or the fair value of the collateral if the loan is collateral-dependent. Expected cash flows are based on internal inputs reflecting expected default rates on contractual cash flows. This method of estimating fair value does not incorporate the exit-price concept of fair value described in Accounting Standards Codification (“ASC”) 820-10 and would generally result in a higher value than the exit-price approach. For loans measured using the estimated fair value of collateral less costs to sell, fair value is generally determined 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 less disposition costs. 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 automobiles. 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 are summarized below:

	June 30, 2016
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	664,302	$	-	$	664,302
Trading securities		-		348		-		348
Money market investments		5,740		-		-		5,740
Derivative assets		-		1,739		187		1,926
Servicing assets		-		-		7,932		7,932
Derivative liabilities		-		(5,413)		(181)		(5,594)
	$	5,740	$	660,976	$	7,938	$	674,654
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	219,393	$	219,393
Foreclosed real estate		-		-		51,220		51,220
Other repossessed assets		-		-		3,866		3,866
	$	-	$	-	$	274,479	$	274,479

	December 31, 2015
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	974,609	$	-	$	974,609
Trading securities		-		288		-		288
Money market investments		4,699		-		-		4,699
Derivative assets		-		1,855		1,170		3,025
Servicing assets		-		-		7,455		7,455
Derivative liabilities		-		(6,162)		(1,095)		(7,257)
	$	4,699	$	970,590	$	7,530	$	982,819
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	235,767	$	235,767
Foreclosed real estate		-		-		58,176		58,176
Other repossessed assets		-		-		6,226		6,226
	$	-	$	-	$	300,169	$	300,169

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 six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30, 2016
	Derivative				Derivative
	asset				liability
	(S&P				(S&P
	Purchased			Servicing	Embedded
Level 3 Instruments Only	Options)			assets	Options)		Total
Balance at beginning of period	$	772	$	7,819	$	(746)	$	7,845
Gains (losses) included in earnings		(585)		-		557		(28)
New instruments acquired		-		717		-		717
Principal repayments		-		(121)		-		(121)
Amortization		-		-		8		8
Changes in fair value of servicing assets		-		(483)		-		(483)
Balance at end of period	$	187	$	7,932	$	(181)	$	7,938
	Six-Month Period Ended June 30, 2016
	Derivative					Derivative
	asset					liability
	(S&P					(S&P
	Purchased			Servicing		Embedded
Level 3 Instruments Only	Options)			assets		Options)		Total
Balance at beginning of period	$	1,171	$	7,455	$	(1,095)	$	7,531
Gains (losses) included in earnings		(984)		-		886		(98)
New instruments acquired		-		1,275		-		1,275
Principal repayments		-		(225)		-		(225)
Amortization		-		-		28		28
Changes in fair value of servicing assets		-		(573)		-		(573)
Balance at end of period	$	187	$	7,932	$	(181)	$	7,938
	Quarter Ended June 30, 2015
	Derivative					Derivative
	asset					liability
	(S&P					(S&P
	Purchased			Servicing		Embedded
Level 3 Instruments Only	Options)			assets		Options)		Total
Balance at beginning of period	$	3,734	$	12,164	$	(3,617)	$	12,281
(Losses) included in earnings		(1,596)		-		1,517		(79)
Sale of mortgage servicing rights held-for-sale		-		(6,985)		-		(6,985)
Changes due to payments on loans		-		(313)		-		(313)
New instruments acquired		-		1,529		-		1,529
Changes in fair value related to price of MSRs held for sale		-		(835)		-		(835)
Amortization		-		-		56		56
Changes in fair value of servicing assets		-		231		-		231
Balance at end of period	$	2,138	$	5,791	$	(2,044)	$	5,885

During the quarters and six-month periods ended June 30, 2016 and 2015, there were purchases and sales of assets and liabilities measured at fair value on a recurring basis. There were no transfers into or 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 basis using significant unobservable inputs (Level 3) at June 30, 2016:

	June 30, 2016
	Fair Value		Valuation Technique	Unobservable Input	Range
	(In thousands)
Derivative assets (S&P Purchased Options)	$	187	Option pricing model	Implied option volatility	41.87%
				Counterparty credit risk (based on 5-year credit default swap ("CDS") spread)	79.96%-89.03%
Servicing assets	$	7,932	Cash flow valuation	Constant prepayment rate	4.41% - 11.40%
				Discount rate	10.00% - 12.00%
Derivative liability (S&P Embedded Options)	$	(181)	Option pricing model	Implied option volatility	41.87%
				Counterparty credit risk (based on 5-year CDS spread)	79.96%-89.03%
Collateral dependant impaired loans	$	28,558	Fair value of property or collateral	Appraised value less disposition costs	29.20% - 43.20%
Puerto Rico Electric Power Authority line of credit, net	$	183,020	Cash flow valuation	Discount rate	7.25%
Other non-collateral dependant impaired loans	$	7,814	Cash flow valuation	Discount rate	4.25%-10.50%
Foreclosed real estate	$	51,220	Fair value of property or collateral	Appraised value less disposition costs	29.20% - 43.20%
Other repossessed assets	$	3,866	Fair value of property or collateral	Appraised value less disposition costs	29.20% - 43.20%

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 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.

The estimated fair value and carrying value of the Company’s financial instruments atJune 30, 2016 and December 31, 2015is as follows:

	June 30,				December 31,
	2016				2015
	Fair		Carrying		Fair		Carrying
	Value		Value		Value		Value
	(In thousands)
Level 1
Financial Assets:
Cash and cash equivalents	$	517,048	$	517,048	$	536,709	$	536,709
Restricted cash		3,030		3,030		3,349		3,349
Level 2
Financial Assets:
Trading securities		348		348		288		288
Investment securities available-for-sale		664,302		664,302		974,609		974,609
Investment securities held-to-maturity		643,530		635,399		614,679		620,189
Federal Home Loan Bank (FHLB) stock		19,838		19,838		20,783		20,783
Other investments		3		3		3		3
Derivative assets		1,739		1,739		1,855		1,855
Financial Liabilities:
Derivative liabilities		5,413		5,413		6,162		6,162
Level 3
Financial Assets:
Total loans (including loans held-for-sale)		4,163,769		4,373,617		4,101,219		4,434,213
Derivative assets		187		187		1,170		1,170
FDIC indemnification asset		11,064		18,426		17,786		22,599
Accrued interest receivable		20,009		20,009		20,637		20,637
Servicing assets		7,932		7,932		7,455		7,455
Accounts receivable and other assets		42,243		42,243		42,786		42,786
Financial Liabilities:
Deposits		4,633,864		4,643,873		4,705,878		4,715,764
Securities sold under agreements to repurchase		630,933		626,109		955,859		934,691
Advances from FHLB		308,583		306,480		335,812		332,476
Other borrowings		2,599		1,753		2,593		1,734
Subordinated capital notes		98,944		102,983		94,940		102,633
Accrued expenses and other liabilities		88,930		88,930		92,935		92,935
Derivative liabilities embedded in deposits		181		181		1,095		1,095

The following methods and assumptions were used to estimate the fair values of significant financial instruments at June 30, 2016 and December 31, 2015:

•Cash and cash equivalents (including money market investments and time deposits with other banks), restricted cash, accrued interest receivable, accounts receivable and other assets 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 and other investments, is based on quoted market prices, when available or prices provided from contracted pricing providers, 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 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 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 asset 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 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.Non-performing loans have been valued at the carrying amounts.

•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, other borrowings, 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.

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Business Segment

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Reporting

NOTE 21– 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 OPC. 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 retirement 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 quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30, 2016
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	79,675	$	16	$	8,217	$	87,908	$	-	$	87,908
Interest expense		(7,300)		-		(7,296)		(14,596)		-		(14,596)
Net interest income		72,375		16		921		73,312		-		73,312
Provision for loan and lease losses		(14,445)		-		-		(14,445)		-		(14,445)
Non-interest income		8,214		6,910		31		15,155		-		15,155
Non-interest expenses		(47,098)		(4,908)		(1,820)		(53,826)		-		(53,825)
Intersegment revenue		389		-		49		438		(438)		-
Intersegment expenses		(49)		(286)		(103)		(438)		438		-
Income before income taxes	$	19,386	$	1,732	$	(922)	$	20,196	$	-	$	20,197
Total assets	$	5,829,987	$	19,054	$	1,800,838	$	7,649,879	$	(937,283)	$	6,712,596
	Quarter Ended June 30, 2015
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	90,504	$	24	$	8,885	$	99,413	$	-	$	99,413
Interest expense		(7,110)		-		(10,011)		(17,121)		-		(17,121)
Net interest income		83,394		24		(1,126)		82,292		-		82,292
Provision for loan and lease losses		(15,539)		-		-		(15,539)		-		(15,539)
Non-interest (loss) income		(11,713)		6,893		164		(4,656)		-		(4,656)
Non-interest expenses		(56,844)		(6,733)		(860)		(64,437)		-		(64,437)
Intersegment revenue		163		-		61		224		(224)		-
Intersegment expenses		(61)		(87)		(76)		(224)		224		-
(Loss) income before income taxes	$	(600)	$	97	$	(1,837)	$	(2,340)	$	-	$	(2,340)
Total assets	$	6,153,663	$	21,157	$	2,136,293	$	8,311,113	$	(912,788)	$	7,398,325

	Six-Month Period Ended June 30, 2016
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	160,827	$	34	$	18,353	$	179,214	$	-	$	179,214
Interest expense		(14,107)		-		(16,820)		(30,927)		-		(30,927)
Net interest income		146,720		34		1,533		148,287		-		148,287
Provision for loan and lease losses		(28,234)		-		-		(28,234)		-		(28,234)
Non-interest income (loss)		16,009		12,930		(281)		28,658		-		28,658
Non-interest expenses		(97,786)		(7,853)		(3,043)		(108,682)		-		(108,682)
Intersegment revenue		787		-		149		936		(936)		-
Intersegment expenses		(149)		(577)		(210)		(936)		936		-
Income (loss) before income taxes	$	37,347	$	4,534	$	(1,852)	$	40,029	$	-	$	40,029
	Six-Month Period Ended June 30, 2015
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	187,986	$	47	$	18,381	$	206,414	$	-	$	206,414
Interest expense		(14,564)		-		(19,923)		(34,487)		-		(34,487)
Net interest income		173,422		47		(1,542)		171,927		-		171,927
Provision for loan and lease losses		(57,732)		-		-		(57,732)		-		(57,732)
Non-interest income (loss)		(13,962)		13,903		2,284		2,225		-		2,225
Non-interest expenses		(106,156)		(11,524)		(3,089)		(120,769)		-		(120,769)
Intersegment revenue		707		-		160		866		(866)		-
Intersegment expenses		(159)		(518)		(189)		(866)		866		-
(Loss) income before income taxes	$	(3,880)	$	1,908	$	(2,376)	$	(4,349)	$	-	$	(4,349)

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Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

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 (the “Bank”), a securities broker-dealer, Oriental Financial Services Corp. (“Oriental Financial Services”), an insurance agency, Oriental Insurance, LLC (“Oriental Insurance”) and a retirement plan administrator, Oriental Pension Consultants, Inc. (“OPC”). 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 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 VizcayaArgentaria 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.

New Accounting Pronouncements Policy [Policy Text Block]

Recent Accounting Developments

In June 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance that will require the earlier recognition of credit losses on loans and other financial instruments based on an expected loss model, replacing the incurred loss model that is currently in use. Under the new guidance, an entity will measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The expected loss model will apply to loans and leases, unfunded lending commitments, held-to-maturity (HTM) debt securities and other debt instruments measured at amortized cost. The impairment model for available-for-sale (AFS) debt securities will require the recognition of credit losses through a valuation allowance when fair value is less than amortized cost, regardless of whether the impairment is considered to be other-than-temporary. The new guidance is effective on January 1, 2020, with early adoption permitted on January 1, 2019. The Company is in the process of evaluating the impact of the provisions of this new accounting guidance.

In March 2016, the FASB issued new accounting guidance that simplifies certain aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance is effective on January 1, 2017, with early adoption permitted. The Company does not expect the provisions of this new accounting guidance to have a material impact on its consolidated financial position or results of operations.

In February 2016, the FASB issued new accounting guidance that requires substantially all leases to be recorded as assets and liabilities on the balance sheet. This new accounting guidance is effective on January 1, 2019, with early adoption permitted. Upon adoption, the Company will record a right of use asset and a lease payment obligation associated with arrangements previously accounted for as operating leases. The Company is in the process of evaluating the impact of the provisions of this new accounting guidance on its consolidated financial position, but does not expect the new accounting guidance to have a material impact on its consolidated financial position or results of operations.

In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial instruments. The new guidance makes targeted changes to existing GAAP including, among other provisions, requiring certain equity investments to be measured at fair value with changes in fair value reported in earnings and requiring changes in instrument-specific credit risk. The new guidance is effective on January 1, 2018. The Company does not expect the provisions of this new accounting guidance to have a material impact on its consolidated financial position or results of operations.

In May 2014, the FASB issued new accounting guidance to clarify the principles for recognizing revenue from contracts with customers. This new accounting guidance is effective on January 1, 2018. The Company does not expect the provisions of this new accounting guidance to have a material impact on its consolidated financial position or results of operations.

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Restricted Cash (Tables)

6 Months Ended

Jun. 30, 2016

Restricted Cash And Investments Abstract

Restricted Cash Components and Its Secured Investments

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

	June 30,		December 31,
	2016		2015
	(In thousands)
Cash pledged as collateral to other financial institutions to secure:
Derivatives	$	1,980	$	1,980
Obligations under agreement of loans sold with recourse		1,050		1,369
	$	3,030	$	3,349

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Investments Securities (Tables)

6 Months Ended

Jun. 30, 2016

Investments [Abstract]

Investment Table Text Block

The amortized cost, gross unrealized gains and losses, fair value, and weighted average yield of the securitiesowned by the Company at June 30, 2016 and December 31, 2015were as follows:

	June 30, 2016
			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	$	402,557	$	14,414	$	-	$	416,971	2.61%
GNMA certificates		109,214		5,064		-		114,278	3.06%
CMOs issued by US government-sponsored agencies		120,238		416		179		120,475	1.87%
Total mortgage-backed securities		632,009		19,894		179		651,724	2.55%
Investment securities
Obligations of US government-sponsored agencies		4,468		34		-		4,502	1.37%
Obligations of Puerto Rico government and public instrumentalities		6,720		-		872		5,848	5.55%
Other debt securities		2,101		127		-		2,228	2.94%
Total investment securities		13,289		161		872		12,578	3.73%
Total securities available for sale	$	645,298	$	20,055	$	1,051	$	664,302	2.57%
Held-to-maturity
Mortgage-backed securities
FNMA and FHLMC certificates	$	610,384		8,121		-		618,505	2.20%
Investment securities
US Treasury securities		25,015		10		-		25,025	0.49%
Total securities held to maturity		635,399		8,131		-		643,530	2.13%
Total	$	1,280,697	$	28,186	$	1,051	$	1,307,832	2.36%

	December 31, 2015
			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	$	735,363	$	25,791	$	1,509	$	759,645	2.97%
GNMA certificates		57,129		1,366		-		58,495	3.19%
CMOs issued by US government-sponsored agencies		137,787		27		2,741		135,073	1.85%
Total mortgage-backed securities		930,279		27,184		4,250		953,213	2.82%
Investment securities
Obligations of US government-sponsored agencies		5,122		-		29		5,093	1.36%
Obligations of Puerto Rico government and public instrumentalities		17,801		-		4,070		13,731	6.24%
Other debt securities		2,444		128		-		2,572	2.98%
Total investment securities		25,367		128		4,099		21,396	4.94%
Total securities available-for-sale	$	955,646	$	27,312	$	8,349	$	974,609	2.87%
Held-to-maturity
Mortgage-backed securities
FNMA and FHLMC certificates		595,157		426		5,865		589,718	2.24%
Investment securities
US Treasury securities		25,032		-		71		24,961	0.49%
Total securities held to maturity		620,189		426		5,936		614,679	2.17%
Total	$	1,575,835	$	27,738	$	14,285	$	1,589,288	2.60%

The amortized cost and fair value of the Company’s investment securities at June 30, 2016, by contractual maturity, are shown in the next table.

	June 30, 2016
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)				(In thousands)
Mortgage-backed securities
Due from 5 to 10 years
FNMA and FHLMC certificates	$	12,650	$	12,996	$	-	$	-
Total due from 5 to 10 years		12,650		12,996		-		-
Due after 10 years
FNMA and FHLMC certificates		389,907		403,975		610,384		618,505
GNMA certificates		109,214		114,278		-		-
CMOs issued by US government-sponsored agencies		120,238		120,475		-		-
Total due after 10 years		619,359		638,728		610,384		618,505
Total mortgage-backed securities		632,009		651,724		610,384		618,505
Investment securities
Due from 1 to 5 years
US Treasury securities		-		-		25,015		25,025
Obligations of Puerto Rico government and public instrumentalities		6,720		5,848		-		-
Total due from 1 to 5 years		6,720		5,848		25,015		25,025
Due from 5 to 10 years
Obligations of US government and sponsored agencies		4,468		4,502		-		-
Other debt securities		2,101		2,228		-		-
Total due from 5 to 10 years		6,569		6,730		-		-
Total investment securities		13,289		12,578		25,015		25,025
Total securities available-for-sale and held-to-maturity	$	645,298	$	664,302	$	635,399	$	643,530

Realized Gain Loss On Investments Table Text Block

	Six-Month Period Ended June 30, 2016
			Book Value
Description	Sale Price		at Sale		Gross Gains		Gross Losses
	(In thousands)
Sale of securities available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	293,505	$	277,181	$	16,324	$	-
Investment securities
Obligations of Puerto Rico government and public instrumentalities		6,978		11,095		-		4,117
Total	$	300,483	$	288,276	$	16,324	$	4,117

	Six-Month Period Ended June 30, 2015
			Book Value
Description	Sale Price		at Sale		Gross Gains		Gross Losses
	(In thousands)
Sale of securities available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates	$	40,307	$	37,735	$	2,571	$	-
GNMA certificates		63,524		63,523		1		-
Total	$	103,831	$	101,258	$	2,572	$	-

Unrealized Gain Loss On Investments Table Text Block

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

	June 30, 2016
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies	$	54,449	$	179	$	54,270
Obligations of Puerto Rico government and public instrumentalities		6,720		872		5,848
	$	61,169	$	1,051	$	60,118

	December 31, 2015
	12 months or more
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
Obligations of Puerto Rico Government and public instrumentalities	$	17,801	$	4,070	$	13,731
CMOs issued by US government-sponsored agencies		103,340		2,410		100,930
	$	121,141	$	6,480	$	114,661
	Less than 12 months
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies		25,736		331		25,405
FNMA and FHLMC certificates		149,480		1,509		147,971
Obligations of US government and sponsored agencies		5,122		29		5,093
Securities held to maturity
FNMA and FHLMC certificates		468,487		5,865		462,622
US Treausury Securities		25,032		71		24,961
	$	673,857	$	7,805	$	666,052
	Total
	Amortized		Unrealized		Fair
	Cost		Loss		Value
	(In thousands)
Securities available-for-sale
CMOs issued by US government-sponsored agencies		129,076		2,741		126,335
FNMA and FHLMC certificates		149,480		1,509		147,971
Obligations of Puerto Rico Government and public instrumentalities		17,801		4,070		13,731
Obligations of US government and sponsored agencies		5,122		29		5,093
	$	301,479	$	8,349	$	293,130
Securities held to maturity
FNMA and FHLMC certificates		468,487		5,865		462,622
US Treasury Securities		25,032		71		24,961
	$	794,998	$	14,285	$	780,713

Other Than Temporary Impairment Credit Losses Recognized In Earnings

	Six-Month Period Ended June 30,
	2016		2015
Balance at beginning of period	$	1,490	$	-
Reductions for securities sold during the period (realized)		(1,490)		-
Balance at end of period	$	-	$	-

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Loans Receivable (Tables)

6 Months Ended

Jun. 30, 2016

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 June 30, 2016 and December 31, 2015was as follows:

		June 30,		December 31,
	2016		2015
	(In thousands)
Originated and other loans and leases held for investment:
Mortgage	$	741,917	$	757,828
Commercial		1,476,613		1,441,649
Consumer		265,269		242,950
Auto and leasing		712,268		669,163
		3,196,067		3,111,590
Allowance for loan and lease losses on originated and other loans and leases		(112,812)		(112,626)
		3,083,255		2,998,964
Deferred loan costs, net		4,619		4,203
Total originated and other loans loans held for investment, net		3,087,874		3,003,167
Acquired loans:
Acquired BBVAPR loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		4,559		7,457
Consumer		35,194		38,385
Auto		77,118		106,911
		116,871		152,753
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-20		(4,487)		(5,542)
		112,384		147,211
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy) (a)
Mortgage		591,029		608,294
Commercial		246,188		287,311
Construction		76,917		88,180
Consumer		7,331		11,843
Auto		117,038		153,592
		1,038,503		1,149,220
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-30 (b)		(22,801)		(25,785)
		1,015,702		1,123,435
Total acquired BBVAPR loans, net		1,128,086		1,270,646
Acquired Eurobank loans: (a)
Loans secured by 1-4 family residential properties		76,777		92,273
Commercial and construction		83,377		142,377
Consumer		1,410		2,314
Total acquired Eurobank loans		161,564		236,964
Allowance for loan and lease losses on Eurobank loans (b)		(22,116)		(90,178)
Total acquired Eurobank loans, net		139,448		146,786
Total acquired loans, net		1,267,534		1,417,432
Total held for investment, net		4,355,408		4,420,599
Mortgage loans held-for-sale		18,209		13,614
Total loans, net	$	4,373,617	$	4,434,213
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

^[1],[2]

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 June 30, 2016 and December 31, 2015by class ofloans. Mortgage loans past due include delinquent loans in the GNMA buy-back option program. Servicers of loans underlying GNMA mortgage-backed securities must report as their own assets the defaulted loans that they have the option (but not the obligation) to repurchase, even when they elect not to exercise that option

	June 30, 2016
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	260	$	2,024	$	2,973	$	5,257	$	-	$	48,801	$	54,058	$	227
Years 2003 and 2004		343		3,936		6,201		10,480		65		84,208		94,753		-
Year 2005		-		1,878		3,826		5,704		64		46,293		52,061		-
Year 2006		743		2,243		6,741		9,727		50		64,109		73,886		-
Years 2007, 2008 and 2009		854		1,414		11,793		14,061		-		69,957		84,018		699
Years 2010, 2011, 2012, 2013		498		1,307		9,420		11,225		142		133,384		144,751		416
Years 2014, 2015 and 2016		-		189		901		1,090		62		98,209		99,361		-
		2,698		12,991		41,855		57,544		383		544,961		602,888		1,342
Non-traditional		-		938		5,217		6,155		12		20,028		26,195		-
Loss mitigation program		9,898		6,574		15,738		32,210		3,857		68,014		104,081		3,770
		12,596		20,503		62,810		95,909		4,252		633,003		733,164		5,112
Home equity secured personal loans		-		-		-		-		-		384		384		-
GNMA's buy-back option program		-		-		8,369		8,369		-		-		8,369		-
Total mortgage		12,596		20,503		71,179		104,278		4,252		633,387		741,917		5,112
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		-		230,296		230,296		-
Institutional		-		-		-		-		-		27,838		27,838		-
Middle market		-		125		8,589		8,714		2,255		209,127		220,096		-
Retail		96		1,226		5,871		7,193		3,327		236,171		246,691		-
Floor plan		-		-		-		-		-		2,826		2,826		-
Real estate		-		-		-		-		-		16,079		16,079		-
		96		1,351		14,460		15,907		5,582		722,337		743,826		-
Other commercial and industrial:
Corporate		-		-		-		-		-		140,192		140,192		-
Institutional		-		-		-		-		183,020		193,258		376,278		-
Middle market		2,007		-		-		2,007		1,421		102,112		105,540		-
Retail		896		529		582		2,007		135		74,823		76,965		-
Floor plan		6		38		40		84		-		33,728		33,812		-
		2,909		567		622		4,098		184,576		544,113		732,787		-
Total commercial		3,005		1,918		15,082		20,005		190,158		1,266,450		1,476,613		-

	June 30, 2016
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		459		177		432		1,068		-		23,809		24,877		-
Overdrafts		15		1		-		16		-		204		220		-
Personal lines of credit		42		14		94		150		-		2,281		2,431		-
Personal loans		1,854		1,137		898		3,889		875		216,884		221,648		-
Cash collateral personal loans		63		3		1		67		-		16,026		16,093		-
Total consumer		2,433		1,332		1,425		5,190		875		259,204		265,269		-
Auto and leasing		44,433		19,438		7,322		71,193		15		641,060		712,268		-
Total	$	62,467	$	43,191	$	95,008	$	200,666	$	195,300	$	2,800,101	$	3,196,067	$	5,112

	December 31, 2015
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	80	$	2,217	$	3,889	$	6,186	$	41	$	51,562	$	57,789	$	144
Years 2003 and 2004		251		5,036		5,536		10,823		-		88,623		99,446		-
Year 2005		79		2,553		3,549		6,181		-		48,040		54,221		-
Year 2006		551		2,878		7,934		11,363		176		66,864		78,403		-
Years 2007, 2008 and 2009		170		2,053		14,733		16,956		-		74,590		91,546		526
Years 2010, 2011, 2012, 2013		662		1,673		10,519		12,854		141		137,749		150,744		72
Years 2014 and 2015		-		65		663		728		-		85,128		85,856		-
		1,793		16,475		46,823		65,091		358		552,556		618,005		742
Non-traditional		-		977		5,079		6,056		13		23,483		29,552		-
Loss mitigation program		9,958		6,887		14,930		31,775		5,593		64,548		101,916		3,083
		11,751		24,339		66,832		102,922		5,964		640,587		749,473		3,825
Home equity secured personal loans		-		-		64		64		-		346		410		-
GNMA's buy-back option program		-		-		7,945		7,945		-		-		7,945		-
Total mortgage		11,751		24,339		74,841		110,931		5,964		640,933		757,828		3,825
Commercial
Commercial secured by real estate:
Corporate		-		-		-		-		-		227,557		227,557		-
Institutional		213		-		-		213		-		33,594		33,807		-
Middle market		1,174		712		9,113		10,999		1,730		194,219		206,948		-
Retail		686		466		6,921		8,073		1,177		231,840		241,090		-
Floor plan		-		-		-		-		-		2,892		2,892		-
Real estate		-		-		-		-		-		16,662		16,662		-
		2,073		1,178		16,034		19,285		2,907		706,764		728,956		-
Other commercial and industrial:
Corporate		-		-		-		-		-		108,582		108,582		-
Institutional		-		-		-		-		190,290		190,695		380,985		-
Middle market		-		-		-		-		1,565		105,748		107,313		-
Retail		282		639		604		1,525		783		75,489		77,797		-
Floor plan		238		51		39		328		-		37,688		38,016		-
		520		690		643		1,853		192,638		518,202		712,693		-
Total commercial		2,593		1,868		16,677		21,138		195,545		1,224,966		1,441,649		-

	December 31, 2015
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Consumer
Credit cards		449		182		369		1,000		-		21,766		22,766		-
Overdrafts		24		-		-		24		-		166		190		-
Personal lines of credit		74		-		45		119		19		2,106		2,244		-
Personal loans		2,078		1,179		627		3,884		414		196,858		201,156		-
Cash collateral personal loans		125		17		2		144		-		16,450		16,594		-
Total consumer		2,750		1,378		1,043		5,171		433		237,346		242,950		-
Auto and leasing		53,566		16,898		8,293		78,757		49		590,357		669,163		-
Total	$	70,660	$	44,483	$	100,854	$	215,997	$	201,991	$	2,693,602	$	3,111,590	$	3,825

The following tables present the aging of the recorded investment in gross acquired BBVAPR loans accounted for under ASC 310-20 as of June 30, 2016 and December 31, 2015,by class ofloans:

	June 30, 2016
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Retail	$	-	$	-	$	197	$	197	$	-	$	-	$	197	$	-
Floor plan		-		-		446		446		-		2,309		2,755		-
		-		-		643		643		-		2,309		2,952		-
Other commercial and industrial
Retail		37		17		120		174		-		1,426		1,600		-
Floor plan		-		-		7		7		-		-		7		-
		37		17		127		181		-		1,426		1,607		-
		37		17		770		824		-		3,735		4,559		-
Consumer
Credit cards		731		290		704		1,725		-		30,573		32,298		-
Personal loans		116		14		60		190		-		2,706		2,896		-
		847		304		764		1,915		-		33,279		35,194		-
Auto		5,088		2,196		562		7,846		-		69,272		77,118		-
Total	$	5,972	$	2,517	$	2,096	$	10,585	$	-	$	106,286	$	116,871	$	-

	December 31, 2015
															Loans 90+
															Days Past
									Current						Due and
	30-59 Days		60-89 Days		90+ Days		Total Past		in Non-		Current				Still
	Past Due		Past Due		Past Due		Due		Accrual		Accruing		Total Loans		Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Retail	$	-	$	-	$	228	$	228	$	-	$	-	$	228	$	-
Floor plan		-		-		467		467		-		2,422		2,889		-
		-		-		695		695		-		2,422		3,117		-
Other commercial and industrial
Retail		186		29		178		393		-		3,331		3,724		-
Floor plan		-		-		7		7		-		609		616		-
		186		29		185		400		-		3,940		4,340		-
		186		29		880		1,095		-		6,362		7,457		-
Consumer
Credit cards		930		384		489		1,803		-		33,414		35,217		-
Personal loans		14		29		46		89		-		3,079		3,168		-
		944		413		535		1,892		-		36,493		38,385		-
Auto		7,553		2,279		831		10,663		-		96,248		106,911		-
Total	$	8,683	$	2,721	$	2,246	$	13,650	$	-	$	139,103	$	152,753	$	-

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

The carrying amount corresponding to acquired BBVAPR loans with deteriorated credit quality, including those accounted under ASC 310-30 by analogy, in the statements of financial condition at June 30, 2016 and December 31, 2015is as follows:

	June 30,		December 31,
	2016		2015
		(In thousands)
Contractual required payments receivable (a)	$	1,788,121	$	1,945,098
Less: Non-accretable discount		394,500		434,190
Cash expected to be collected		1,393,621		1,510,908
Less: Accretable yield		355,118		361,688
Carrying amount, gross		1,038,503		1,149,220
Less: allowance for loan and lease losses (b)		22,801		25,785
Carrying amount, net	$	1,015,702	$	1,123,435
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

Accretable Yield for Acquired Loans [Table Text Block]

The following tables describe the accretable yield and non-accretable discount activity of acquired BBVAPR loans accounted for under ASC 310-30 for the

	Quarter Ended June 30, 2016
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	260,557	$	40,102	$	17,156	$	17,587	$	5,261	$	340,663
Accretion		(8,294)		(5,272)		(1,307)		(3,616)		(870)		(19,359)
Change in expected cash flows		-		3,062		(408)		630		(1)		3,283
Transfer from (to) non-accretable discount		31,560		(833)		(193)		(498)		495		30,531
Balance at end of period	$	283,823	$	37,059	$	15,248	$	14,103	$	4,885	$	355,118
Non-Accretable Discount Activity:
Balance at beginning of period	$	370,155	$	10,716	$	7,432	$	21,938	$	18,735	$	428,976
Change in actual and expected losses		(2,442)		(967)		(206)		(315)		(15)		(3,945)
Transfer (to) from accretable yield		(31,560)		833		193		498		(495)		(30,531)
Balance at end of period	$	336,153	$	10,582	$	7,419	$	22,121	$	18,225	$	394,500

	Six-Month Period Ended June 30, 2016
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	268,794	$	45,411	$	19,615	$	21,578	$	6,290	$	361,688
Accretion		(16,601)		(11,111)		(3,176)		(7,827)		(1,808)		(40,523)
Change in expected cash flows		-		3,190		(208)		631		(1)		3,612
Transfer from (to) non-accretable discount		31,630		(431)		(983)		(279)		404		30,341
Balance at end of period	$	283,823	$	37,059	$	15,248	$	14,103	$	4,885	$	355,118
Non-Accretable Discount Activity:
Balance at beginning of period	$	374,772	$	11,781	$	6,764	$	22,039	$	18,834	$	434,190
Change in actual and expected losses		(6,989)		(1,630)		(328)		(197)		(205)		(9,349)
Transfer (to) from accretable yield		(31,630)		431		983		279		(404)		(30,341)
Balance at end of period	$	336,153	$	10,582	$	7,419	$	22,121	$	18,225	$	394,500

	Quarter Ended June 30, 2015
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	284,612	$	57,330	$	19,390	$	47,097	$	5,601	$	414,030
Accretion		(8,813)		(9,597)		(2,143)		(6,163)		(1,287)		(28,003)
Change in actual and expected losses		-		23,695		9,867		-		-		33,562
Transfer from (to) non-accretable discount		81		135		(2,501)		(9,403)		4,147		(7,541)
Balance at end of period	$	275,880	$	71,563	$	24,613	$	31,531	$	8,461	$	412,048
Non-Accretable Discount Activity:
Balance at beginning of period	$	392,609	$	15,826	$	3,957	$	14,543	$	23,576	$	450,511
Change in actual and expected losses		(3,421)		(4,921)		536		(256)		(73)		(8,135)
Transfer (to) from accretable yield		(81)		(135)		2,501		9,403		(4,147)		7,541
Balance at end of period	$	389,107	$	10,770	$	6,994	$	23,690	$	19,356	$	449,917

	Six-Month Period Ended June 30, 2015
	Mortgage		Commercial		Construction		Auto		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	298,364	$	61,196	$	25,829	$	53,998	$	6,559	$	445,946
Accretion		(17,800)		(20,356)		(5,953)		(13,151)		(2,213)		(59,473)
Change in actual and expected losses		-		23,695		9,867		-		-		33,562
Transfer (to) from non-accretable discount		(4,684)		7,028		(5,130)		(9,316)		4,115		(7,987)
Balance at end of period	$	275,880		71,563		24,613		31,531		8,461		412,048
Non-Accretable Discount Activity:
Balance at beginning of period	$	389,839	$	23,069	$	3,486	$	16,215	$	24,018	$	456,627
Change in actual and expected losses		(5,416)		(5,271)		(1,622)		(1,841)		(547)		(14,697)
Transfer from (to) accretable yield		4,684		(7,028)		5,130		9,316		(4,115)		7,987
Balance at end of period	$	389,107	$	10,770	$	6,994	$	23,690	$	19,356	$	449,917

Eurobank loans carrying amount [Table Text Block]

Acquired Eurobank Loans

The carrying amount of acquired Eurobank loans at June 30, 2016 and December 31, 2015is as follows:

		June 30		December 31
	2016		2015
	(In thousands)
Contractual required payments receivable (a)	$	252,801	$	342,511
Less: Non-accretable discount		11,555		21,156
Cash expected to be collected		241,246		321,355
Less: Accretable yield		79,682		84,391
Carrying amount, gross		161,564		236,964
Less: Allowance for loan and lease losses (b)		22,116		90,178
Carrying amount, net	$	139,448	$	146,786
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

Accretable Yield for Acquired Eurobank Loans [Table Text Block]

The following tables describe the accretable yield and non-accretable discount activity of acquired Eurobank loans for the quarters and six-months periods ended June 30, 2016 and 2015:

	Quarter Ended June 30, 2016
	Loans Secured by 1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	50,787	$	33,203	$	2,237	$	-	$	-	$	86,227
Accretion		(2,263)		(4,528)		(33)		2		(76)		(6,898)
Change in expected cash flows		(198)		1,619		-		(77)		81		1,425
Transfer from (to) non-accretable discount		10		(1,152)		-		75		(5)		(1,072)
Balance at end of year	$	48,336	$	29,142	$	2,204	$	-	$	-	$	79,682
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,703	$	-	$	-	$	-	$	-	$	12,703
Change in actual and expected losses		(1,138)		(1,152)		-		75		(5)		(2,220)
Transfer from (to) accretable yield		(10)		1,152		-		(75)		5		1,072
Balance at end of period	$	11,555	$	-	$	-	$	-	$	-	$	11,555

	Six-Month Period Ended June 30, 2016
	Loans Secured by 1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	51,954	$	26,970	$	2,255	$	-	$	3,213	$	84,392
Accretion		(4,529)		(8,623)		(47)		2		(1,261)		(14,458)
Change in expected cash flows		786		12,712		(23)		(77)		(1,947)		11,451
Transfer from (to) non-accretable discount		125		(1,917)		19		75		(5)		(1,703)
Balance at end of period	$	48,336	$	29,142	$	2,204	$	-	$	-	$	79,682
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,869	$	-	$	-	$	-	$	8,287	$	21,156
Change in actual and expected losses		(1,189)		(1,917)		19		75		(8,292)		(11,304)
Transfer (to) from accretable yield		(125)		1,917		(19)		(75)		5		1,703
Balance at end of period	$	11,555	$	-	$	-	$	-	$	-	$	11,555

	Quarter Ended June 30, 2015
	Loans Secured by 1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	58,332	$	33,481	$	20,806	$	1,665	$	2,004	$	116,288
Accretion		(3,276)		(8,047)		(405)		(937)		(93)		(12,758)
Transfer from non-accretable discount		750		2,039		(2,052)		375		(1)		1,111
Balance at end of period	$	55,806	$	27,473	$	18,349	$	1,103	$	1,910	$	104,641
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,557	$	10,493	$	-	$	-	$	9,662	$	32,712
Change in actual and expected losses		(405)		(8,454)		(2,052)		375		67		(10,469)
Transfer to accretable yield		(750)		(2,039)		2,052		(375)		1		(1,111)
Balance at end of period	$	11,402	$	-	$	-	$	-	$	9,730	$	21,132

	Six-Month Period Ended June 30, 2015
	Loans Secured by 1-4 Family Residential Properties		Commercial and Other Construction		Construction & Development Secured by 1-4 Family Residential Properties		Leasing		Consumer		Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	47,636	$	37,919	$	20,753	$	2,479	$	1,072	$	109,859
Accretion		(6,794)		(17,902)		(1,024)		(2,329)		(213)		(28,262)
Transfer from (to) non-accretable discount		14,964		7,456		(1,380)		953		1,051		23,044
Balance at end of period	$	55,806	$	27,473	$	18,349	$	1,103	$	1,910	$	104,641
Non-Accretable Discount Activity:
Balance at beginning of period	$	27,348	$	24,464	$	-	$	-	$	10,598	$	62,410
Change in actual and expected cash flows		(982)		(17,008)		(1,380)		953		183		(18,234)
Transfer (to) from accretable yield		(14,964)		(7,456)		1,380		(953)		(1,051)		(23,044)
Balance at end of period	$	11,402	$	-	$	-	$	-	$	9,730	$	21,132

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

Non-accrual Loans

The following table presents the recorded investment in loans in non-accrual status by class ofloans as of June 30, 2016 and December 31, 2015:

	June 30,		December 31,
	2016		2015
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year):
Up to the year 2002	$	2,812	$	3,786
Years 2003 and 2004		6,359		5,737
Year 2005		3,889		3,627
Year 2006		7,135		8,189
Years 2007, 2008 and 2009		11,292		14,625
Years 2010, 2011, 2012, 2013		9,311		10,588
Years 2014, 2015 and 2016		963		663
		41,761		47,215
Non-traditional		5,229		5,092
Loss mitigation program		18,769		20,172
		65,759		72,479
Home equity loans, secured personal loans		-		64
		65,759		72,543
Commercial
Commercial secured by real estate
Middle market		10,969		12,729
Retail		10,352		8,726
		21,321		21,455
Other commercial and industrial
Institutional		183,020		190,290
Middle market		1,421		1,565
Retail		1,966		1,932
Floor plan		40		39
		186,447		193,826
		207,768		215,281
Consumer
Credit cards		432		369
Personal lines of credit		94		100
Personal loans		1,812		1,146
Cash collateral personal loans		1		16
		2,339		1,631
Auto and leasing		7,337		8,418
Total non-accrual originated loans	$	283,203	$	297,873

	June 30,		December 31,
	2016		2015
	(In thousands)
Acquired BBVAPR loans accounted for under ASC 310-20
Commercial
Commercial secured by real estate
Retail	$	197	$	228
Floor plan		446		467
		643		695
Other commercial and industrial
Retail		120		178
Floor plan		7		7
		127		185
		770		880
Consumer
Credit cards		704		489
Personal loans		60		46
		764		535
Auto		562		831
Total non-accrual acquired BBVAPR loans accounted for under ASC 310-20		2,096		2,246
Total non-accrual loans	$	285,299	$	300,119

Impaired Financing Receivables [Table Text Block]

Originated and Other Loans and Leases Held for Investment

The Company’s recorded investment in commercial and mortgage loans categorized as originated and other loans and leases held for investment that were individually evaluated for impairment and the related allowance for loan and lease losses at June 30, 2016 and December 31, 2015are as follows:

	June 30, 2016
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	212,876	$	194,084	$	56,758	29%
Residential impaired and troubled-debt restructuring		99,145		90,948		8,864	10%
Impaired loans with no specific allowance:
Commercial		30,228		23,876		-	0%
Total investment in impaired loans	$	342,249	$	308,908	$	65,622	21%

	December 31, 2015
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	210,718	$	199,366	$	55,947	28%
Residential impaired and troubled-debt restructuring		97,424		89,973		9,233	10%
Impaired loans with no specific allowance
Commercial		42,110		35,928		-	0%
Total investment in impaired loans	$	350,252	$	325,267	$	65,180	20%

Acquired BBVAPR Loans

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

The Company’s recorded investment inacquired BBVAPR commercial loans accounted for under ASC 310-20 that were individually evaluated for impairment and the related allowance for loan and lease losses at June 30, 2016 and December 31, 2015are as follows:

	June 30, 2016
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial	$	1,450	$	1,433	$	-	0%
Total investment in impaired loans	$	1,450	$	1,433	$	-	0%
	December 31, 2015
	Unpaid		Recorded		Specific
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial	$	486	$	474	$	-	0%
Total investment in impaired loans	$	486	$	474	$	-	0%

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

The Company’s recorded investment in acquired BBVAPR loan pools accounted for under ASC 310-30 that have recorded impairments and their related allowance for loan and lease losses at June 30, 2016 and December 31, 2015are as follows

	June 30, 2016
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance: (a)(b)
Mortgage	$	591,029	$	591,056	$	1,585	0%
Commercial		246,142		173,949		11,884	7%
Construction		76,677		56,457		3,979	7%
Auto		117,038		117,043		5,353	5%
Total investment in impaired loan pools	$	1,030,886	$	938,505	$	22,801	2%
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

	December 31 , 2015
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance:
Mortgage	$	608,294	$	608,294	$	1,761	0%
Commercial		287,311		168,107		15,455	9%
Construction		88,180		87,983		5,707	6%
Auto		153,592		153,592		2,862	2%
Total investment in impaired loan pools	$	1,137,377	$	1,017,976	$	25,785	3%

Acquired Eurobank Loans

The Company’s recorded investment in acquired Eurobank loan pools that have recorded impairments and their related allowance for loan and lease losses as ofJune 30, 2016 and December 31, 2015are as follows:

	June 30, 2016
							Coverage
	Unpaid		Recorded				to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance: (a)(b)
Loans secured by 1-4 family residential properties	$	95,755	$	76,777	$	11,016	14%
Commercial and construction		114,932		83,377		11,096	13%
Consumer		1,252		1,410		4	0%
Total investment in impaired loan pools	$	211,939	$	161,564	$	22,116	14%
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

	December 31, 2015
							Coverage
	Unpaid		Recorded		Specific		to Recorded
	Principal		Investment		Allowance		Investment
	(In thousands)
Impaired loan pools with specific allowance
Loans secured by 1-4 family residential properties	$	101,444	$	92,273	$	22,570	24%
Commercial and construction		133,148		142,377		67,365	47%
Consumer		6,713		2,314		243	11%
Total investment in impaired loan pools	$	241,305	$	236,964	$	90,178	38%

Impaired Financing Receivables Loans, excluding ASC 310-30 [Table Text Block]

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

The following table presents the interest recognized in commercial and mortgage loans that were individually evaluated for impairment, excluding loans accounted for under ASC 310-30 for the quarters and six-month periods endedJune 30, 2016 and 2015:

	Quarter Ended June 30,
	2016				2015
	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
	(In thousands)
Originated and other loans held for investment:
Impaired loans with specific allowance
Commercial	$	75	$	194,759	$	45	$	212,414
Residential troubled-debt restructuring		791		91,007		781		89,041
Impaired loans with no specific allowance
Commercial		149		29,579		316		30,015
		1,015		315,345		1,142		331,470
Acquired loans accounted for under ASC 310-20:
Impaired loans with no specific allowance
Commercial		15		789		11		1,446
Total interest income from impaired loans	$	1,030	$	316,134	$	1,153	$	332,916

	Six-Month Period Ended June 30,
	2016					2015
	Interest Income Recognized		Average Recorded Investment			Interest Income Recognized		Average Recorded Investment
	(In thousands)
Originated and other loans held for investment:
Impaired loans with specific allowance
Commercial	$	150	$	195,777	$	90	$	146,144
Residential troubled-debt restructuring		1,591		90,650		1,563		91,216
Impaired loans with no specific allowance
Commercial		298		31,603		631		95,791
Total interest income from impaired loans	$	2,039	$	318,030	$	2,284	$	333,151
Aquired loans accounted for under SC 310-20:
Impaired loans with no specific allowance
Commercial		30		628		21		1,923
Total interest income from impaired loans	$	2,069	$	318,658	$	2,305	$	335,074

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

Modifications

The following tables present the troubled-debt restructurings during the

	Quarter Ended June 30, 2016
	Number of contracts	Pre-Modification Outstanding Recorded Investment		Pre-Modification Weighted Average Rate	Pre-Modification Weighted Average Term (in Months)	Post-Modification Outstanding Recorded Investment		Post-Modification Weighted Average Rate	Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	19	$	2,670	5.69%	372	$	2,670	4.54%	494
Commercial	6		668	6.65%	65		668	5.91%	86
Consumer	26		364	12.73%	75		372	10.20%	70
	Six-Month Period Ended June 30, 2016
	Number of contracts	Pre-Modification Outstanding Recorded Investment		Pre-Modification Weighted Average Rate	Pre-Modification Weighted Average Term (in Months)	Post-Modification Outstanding Recorded Investment		Post-Modification Weighted Average Rate	Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	52	$	6,628	5.90%	365	$	7,525	4.73%	493
Commercial	8		1,323	6.73%	53		1,324	6.31%	61
Consumer	47		556	13.27%	75		603	10.56%	71

	Quarter Ended June 30, 2015
	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	39	$	4,455	5.62%	330	$	4,455	4.21%	330
Commercial	1		29	7.25%	44		29	6.50%	60
Consumer	21		250	14.40%	71		259	13.87%	69
Auto	1		64	12.95%	72		65	12.95%	72
	Six-Month Period Ended June 30, 2015
	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	97	$	11,609	4.65%	348	$	11,594	4.13%	349
Commercial	4		4,533	6.83%	80		4,533	7.00%	141
Consumer	32		396	14.50%	72		440	14.25%	68
Auto	1		64	12.95%	72		65	12.95%	72

The following table presents troubled-debt restructurings for which there was a payment default during the twelve-month periods ended June 30, 2016 and 2015:

	Twelve-Month Period Ended June 30,
	2016			2015
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(Dollars in thousands)
Mortgage	84	$	9,869	60	$	6,911
Consumer	7	$	134	4	$	72
Auto	1	$	17	-	$	-

Financing Receivable Credit Quality Indicators [Table Text Block]

As of June 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of gross originated and other loans and BBVAPR acquired loans accounted for under ASC 310-20 subject to risk rating by class of loans is as follows:

	June 30, 2016
	Risk Ratings
											Individually
	Balance				Special						Measured for
	Outstanding		Pass		Mention		Substandard		Doubtful		Impairment
	(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate	$	230,296	$	215,312	$	14,984	$	-	$	-	$	-
Institutional		27,838		26,200		-		-		-		1,638
Middle market		220,096		188,700		17,697		374		-		13,325
Retail		246,691		222,814		7,468		4,128		-		12,281
Floor plan		2,826		2,826		-		-		-		-
Real estate		16,079		16,079		-		-		-		-
		743,826		671,931		40,149		4,502		-		27,244
Other commercial and industrial:
Corporate		140,192		140,192		-		-		-		-
Institutional		376,278		193,258		-		-		-		183,020
Middle market		105,540		95,946		5,142		181		-		4,271
Retail		76,965		71,933		898		979		-		3,155
Floor plan		33,812		28,046		5,415		81		-		270
		732,787		529,375		11,455		1,241		-		190,716
Total		1,476,613		1,201,306		51,604		5,743		-		217,960
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Retail		197		-		-		197		-		-
Floor plan		2,755		953		376		-		-		1,426
		2,952		953		376		197		-		1,426
Other commercial and industrial:
Retail		1,600		1,527		-		73		-		-
Floor plan		7		-		-		-		-		7
		1,607		1,527		-		73		-		7
Total		4,559		2,480		376		270		-		1,433
Total	$	1,481,172	$	1,203,786	$	51,980	$	6,013	$	-	$	219,393

	December 31, 2015
	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	$	227,557	$	212,410	$	15,147	$	-	$	-	$	-
Institutional		33,807		25,907		-		-		-		7,900
Middle market		206,948		181,916		9,697		-		-		15,335
Retail		241,090		217,836		7,936		5,097		-		10,221
Floor plan		2,892		2,892		-		-		-		-
Real estate		16,662		16,662		-		-		-		-
		728,956		657,623		32,780		5,097		-		33,456
Other commercial and industrial:
Corporate		108,582		100,826		-		-		-		7,756
Institutional		380,985		190,695		-		-		-		190,290
Middle market		107,313		97,288		8,052		-		-		1,973
Retail		77,797		73,757		1,076		1,184		-		1,780
Floor plan		38,016		35,862		2,115		-		-		39
		712,693		498,428		11,243		1,184		-		201,838
Total		1,441,649		1,156,051		44,023		6,281		-		235,294
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Retail		228		-		-		228		-		-
Floor plan		2,889		602		1,820		-		-		467
		3,117		602		1,820		228		-		467
Other commercial and industrial:
Retail		3,724		3,637		-		87		-		-
Floor plan		616		609		-		-		-		7
		4,340		4,246		-		87		-		7
Total		7,457		4,848		1,820		315		-		474
Total	$	1,449,106	$	1,160,899	$	45,843	$	6,596	$	-	$	235,768

For residential and consumer loan classes, the Company evaluates credit quality based on the delinquency status of the loan. As of June 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of gross originated and other loans and acquiredBBVAPR loans accounted for under ASC 310-20 not subject to risk rating by class of loans is as follows:

	June 30, 2016
	Delinquency
															Individually
	Balance														Measured for
	Outstanding		0-29 days		30-59 days		60-89 days		90-119 days		120-364 days		365+ days		Impairment
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year)
Up to the year 2002	$	54,058	$	48,163	$	259	$	2,023	$	527	$	1,153	$	1,292	$	641
Years 2003 and 2004		94,753		82,651		343		3,936		1,864		1,859		2,312		1,788
Year 2005		52,061		45,538		-		1,878		497		918		2,410		820
Year 2006		73,886		60,860		511		2,244		554		1,603		4,584		3,530
Years 2007, 2008 and 2009		84,018		66,997		703		1,286		569		1,724		8,898		3,841
Years 2010, 2011, 2012 2013		144,751		132,451		407		1,203		182		1,581		5,132		3,795
Years 2014, 2015 and 2016		99,361		98,270		-		189		140		398		364		-
		602,888		534,930		2,223		12,759		4,333		9,236		24,992		14,415
Non-traditional		26,195		20,040		-		938		564		1,999		2,654		-
Loss mitigation program		104,081		18,865		1,692		1,381		940		1,306		3,364		76,533
		733,164		573,835		3,915		15,078		5,837		12,541		31,010		90,948
Home equity secured personal loans		384		384		-		-		-		-		-		-
GNMA's buy-back option program		8,369		-		-		-		1,498		3,228		3,643		-
		741,917		574,219		3,915		15,078		7,335		15,769		34,653		90,948
Consumer
Credit cards		24,877		23,809		459		177		214		218		-		-
Overdrafts		220		204		15		1		-		-		-		-
Unsecured personal lines of credit		2,431		2,281		42		14		11		83		-		-
Unsecured personal loans		221,648		217,759		1,854		1,137		898		-		-		-
Cash collateral personal loans		16,093		16,026		63		3		-		1		-		-
		265,269		260,079		2,433		1,332		1,123		302		-		-
Auto and Leasing		712,268		641,075		44,433		19,438		5,492		1,830		-		-
		1,719,454		1,475,373		50,781		35,848		13,950		17,901		34,653		90,948
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		32,298		30,573		731		290		290		414		-		-
Personal loans		2,896		2,707		116		14		26		33		-		-
		35,194		33,280		847		304		316		447		-		-
Auto		77,118		69,272		5,088		2,196		412		150		-		-
		112,312		102,552		5,935		2,500		728		597		-		-
Total	$	1,831,766	$	1,577,925	$	56,716	$	38,348	$	14,678	$	18,498	$	34,653	$	90,948

	December 31, 2015
	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	$	57,789	$	50,912	$	82	$	2,218	$	530	$	1,504	$	1,858	$	685
Years 2003 and 2004		99,446		87,060		251		4,867		1,261		1,353		2,921		1,733
Year 2005		54,221		47,197		79		2,553		292		1,068		2,189		843
Year 2006		78,403		63,659		318		2,878		1,168		1,895		4,871		3,614
Years 2007, 2008 and 2009		91,546		71,439		170		1,665		685		2,972		10,725		3,890
Years 2010, 2011, 2012 2013		150,744		134,945		569		1,611		434		1,982		6,737		4,466
Year 2014 and 2015		85,856		85,128		-		65		148		281		234		-
		618,005		540,340		1,469		15,857		4,518		11,055		29,535		15,231
Non-traditional		29,552		23,497		-		977		552		2,621		1,905		-
Loss mitigation program		101,916		16,031		4,173		1,977		727		1,728		2,538		74,742
		749,473		579,868		5,642		18,811		5,797		15,404		33,978		89,973
Home equity secured personal loans		410		346		-		-		-		64		-		-
GNMA's buy-back option program		7,945		-		-		-		1,593		3,578		2,774		-
		757,828		580,214		5,642		18,811		7,390		19,046		36,752		89,973
Consumer
Credit cards		22,766		21,766		449		182		179		190		-		-
Overdrafts		190		166		24		-		-		-		-		-
Unsecured personal lines of credit		2,244		2,125		74		-		17		28		-		-
Unsecured personal loans		201,156		197,339		2,083		1,107		621		6		-		-
Cash collateral personal loans		16,594		16,450		125		17		2		-		-		-
		242,950		237,846		2,755		1,306		819		224		-		-
Auto and Leasing		669,163		590,482		53,549		16,839		5,708		2,585		-		-
		1,669,941		1,408,542		61,946		36,956		13,917		21,855		36,752		89,973
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		35,217		33,414		930		384		186		303		-		-
Personal loans		3,168		3,079		14		29		1		45		-		-
		38,385		36,493		944		413		187		348		-		-
Auto		106,911		96,247		7,553		2,279		623		209		-		-
		145,296		132,740		8,497		2,692		810		557		-		-
Total	$	1,815,237	$	1,541,282	$	70,443	$	39,648	$	14,727	$	22,412	$	36,752	$	89,973

[1] (a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans.

[2] (b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

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Allowance for Loan and Lease Losses (Tables)

3 Months Ended

6 Months Ended

Jun. 30, 2015

Jun. 30, 2016

Loans Receivable [Abstract]

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

	Six-Month Period Ended June 30, 2016
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Balance at beginning of year	$	26	$	3,429	$	2,087	$	-	$	5,542
Charge-offs		(19)		(1,825)		(1,308)		-		(3,152)
Recoveries		40		169		1,044		-		1,253
Provision (recapture) for acquired BBVAPR loan and lease losses accounted for under ASC 310-20		(26)		1,229		(359)		-		844
Balance at end of year	$	21	$	3,002	$	1,464	$	-	$	4,487

	Six-Month Period Ended June 30, 2015
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Balance at beginning of year	$	65	$	1,211	$	3,321	$	-	$	4,597
Charge-offs		(16)		(2,686)		(2,304)		-		(5,006)
Recoveries		17		563		1,072		-		1,652
Provision (recapture) for acquired loan and lease losses accounted for under ASC 310-20		(12)		3,528		770		-		4,286
Balance at end of period	$	54	$	2,616	$	2,859	$	-	$	5,529

The composition of the Company’s allowance for loan and lease losses at June 30, 2016 and December 31, 2015was as follows:

	June 30,		December 31,
	2016		2015
	(In thousands)
Allowance for loans and lease losses on non-acquired loans:
Originated and other loans and leases held for investment:
Mortgage	$	18,537	$	18,352
Commercial		63,144		64,791
Consumer		11,771		11,197
Auto and leasing		19,259		18,261
Unallocated		101		25
Total allowance for originated and other loans and lease losses		112,812		112,626
Acquired loans:
Acquired BBVAPR loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		21		26
Consumer		3,002		3,429
Auto		1,464		2,087
		4,487		5,542
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy) (a)
Mortgage		1,585		1,762
Commercial		15,863		21,161
Auto		5,353		2,862
		22,801		25,785
Total allowance for acquired BBVAPR loans and lease losses		27,288		31,327
Acquired Eurobank loans: (a)
Loans secured by 1-4 family residential properties		11,016		22,570
Commercial and other construction		11,096		67,365
Consumer		4		243
Total allowance for acquired Eurobank loan and lease losses (a)		22,116		90,178
Total allowance for loan and lease losses (a)	$	162,216	$	234,131
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

Allowance for Originated and Other Loan and Lease Losses Held for Investment

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

	Quarter Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for originated and other loans:
Balance at beginning of period	$	18,784	$	64,206	$	11,414	$	18,716	$	118	$	113,238
Charge-offs		(1,374)		(833)		(2,811)		(8,100)		-		(13,118)
Recoveries		36		228		133		3,243		-		3,640
Provision (recapture) for originated and other loans and lease losses		1,091		(457)		3,035		5,400		(17)		9,052
Balance at end of period	$	18,537	$	63,144	$	11,771	$	19,259	$	101	$	112,812

	Six-Month Period Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for originated and other loans:
Balance at beginning of period	$	18,352	$	64,791	$	11,197	$	18,261	$	25	$	112,626
Charge-offs		(3,036)		(1,844)		(5,138)		(16,462)		-		(26,480)
Recoveries		181		316		235		6,222		-		6,954
Provision (recapture) for loan and lease losses		3,040		(119)		5,477		11,238		76		19,712
Balance at end of period	$	18,537	$	63,144	$	11,771	$	19,259	$	101	$	112,812

	June 30, 2016
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	8,864	$	56,758	$	-	$	-	$	-	$	65,622
Collectively evaluated for impairment		9,673		6,386		11,771		19,259		101		47,190
Total ending allowance balance	$	18,537	$	63,144	$	11,771	$	19,259	$	101	$	112,812
Loans:
Individually evaluated for impairment	$	90,948	$	217,960	$	-	$	-	$	-	$	308,908
Collectively evaluated for impairment		650,969		1,258,653		265,269		712,268		-		2,887,159
Total ending loan balance	$	741,917	$	1,476,613	$	265,269	$	712,268	$	-	$	3,196,067

	Quarter Ended June 30, 2015
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for originated and other loans:
Balance at beginning of period	$	18,086	$	33,123	$	9,405	$	15,762	$	383	$	76,759
Charge-offs		(1,356)		(497)		(2,309)		(7,662)		-		(11,824)
Recoveries		67		219		390		3,425		-		4,101
Provision for originated and other loans and lease losses		1,279		1,934		2,978		3,539		223		9,953
Balance at end of period	$	18,076	$	34,779	$	10,464	$	15,064	$	606	$	78,989

	December 31, 2015
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	9,233	$	55,947	$	-	$	-	$	-	$	65,180
Collectively evaluated for impairment		9,119		8,844		11,197		18,261		25		47,446
Total ending allowance balance	$	18,352	$	64,791	$	11,197	$	18,261	$	25	$	112,626
Loans:
Individually evaluated for impairment	$	89,973	$	235,294	$	-	$	-	$	-	$	325,267
Collectively evaluated for impairment		667,855		1,206,355		242,950		669,163		-		2,786,323
Total ending loan balance	$	757,828	$	1,441,649	$	242,950	$	669,163	$	-	$	3,111,590

Allowance for BBVAPR Acquired Loan Losses

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

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

	Quarter Ended June 30, 2016
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Balance at beginning of period	$	23	$	3,243	$	1,727	$	-	$	4,993
Charge-offs		(12)		(1,013)		(571)		-		(1,596)
Recoveries		8		88		446		-		542
Provision (recapture) for acquired BBVAPR loan and lease losses accounted for under ASC 310-20		2		684		(138)		-		548
Balance at end of period	$	21	$	3,002	$	1,464	$	-	$	4,487

	June 30, 2016
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	$	21	$	3,002	$	1,464	$	-	$	4,487
Total ending allowance balance	$	21	$	3,002	$	1,464	$	-	$	4,487
Loans:
Individually evaluated for impairment	$	1,433	$	-	$	-	$	-	$	1,433
Collectively evaluated for impairment		3,126		35,194		77,118		-		115,438
Total ending loan balance	$	4,559	$	35,194	$	77,118	$	-	$	116,871

	Quarter Ended June 30, 2015
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Balance at beginning of period	$	49	$	1,885	$	3,516	$	-	$	5,450
Charge-offs		(16)		(1,303)		(1,038)		-		(2,357)
Recoveries		7		429		502		-		938
Provision (recapture) for acquired loan and lease losses accounted for under ASC 310-20		14		1,605		(121)		-		1,498
Balance at end of period	$	54	$	2,616	$	2,859	$	-	$	5,529

	December 31, 2015
	Commercial		Consumer		Auto		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-20:
Ending allowance balance attributable to loans:
Collectively evaluated for impairment	$	26	$	3,429	$	2,087	$	-	$	5,542
Total ending allowance balance	$	26	$	3,429	$	2,087	$	-	$	5,542
Loans:
Individually evaluated for impairment	$	474	$	-	$	-	$	-	$	474
Collectively evaluated for impairment		6,983		38,385		106,911		-		152,279
Total ending loan balance	$	7,457	$	38,385	$	106,911	$	-	$	152,753

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

	Quarter Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30:
Balance at beginning of period	$	1,762	$	20,430	$	-	$	5,555	$	27,747
(Recapture) provision for BBVAPR loans and lease losses accounted for under ASC 310-30		(163)		3,977		-		-		3,814
Loan pools fully charged-off		(14)		-		-		(202)		(216)
Allowance de-recognition (a)		-		(8,544)		-		-		(8,544)
Balance at end of period	$	1,585	$	15,863	$	-	$	5,353	$	22,801
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.
	Six-Month Period Ended June 30, 2016
	Mortgage		Commercial		Consumer		Auto		Total
	(In thousands)
Allowance for loan and lease losses for acquired BBVAPR loans accounted for under ASC 310-30:
Balance at beginning of period	$	1,678	$	21,245	$	-	$	2,862	$	25,785
(Recapture) provision for BBVAPR loans and lease losses accounted for under ASC 310-30		(79)		3,228		-		2,693		5,842
Loan pools fully charged-off		(14)		(66)		-		(202)		(282)
Allowance de-recognition (a)		-		(8,544)		-		-		(8,544)
Balance at end of period	$	1,585	$	15,863	$	-	$	5,353	$	22,801
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

The changes in the allowance for loan and lease losses on acquired Eurobank loansfor the quarters and six-month periods endedJune 30, 2016 and 2015 were as follows:

	Quarter Ended June 30, 2016
	Loans Secured by 1-4 Family Residential Properties		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for acquired Eurobank loans:
Balance at beginning of period	$	23,961	$	68,089	$	243	$	-	$	92,293
Provision (recapture) for acquired Eurobank loans and lease losses, net		237		801		(7)		-		1,031
FDIC shared-loss portion of provision for covered loan and lease losses, net		951		-		-		-		951
Allowance de-recognition (a)		(14,133)		(57,794)		(232)		-		(72,159)
Balance at end of period	$	11,016	$	11,096	$	4	$	-	$	22,116
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.
	Six-Month Period Ended June 30, 2016
	Loans Secured by 1-4 Family Residential Properties		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for acquired Eurobank loans:
Balance at beginning of period	$	22,570	$	67,365	$	243	$	-	$	90,178
Provision (recapture) for acquired Eurobank loans and lease losses, net		184		1,659		(7)		-		1,836
FDIC shared-loss portion of provision for covered loan and lease losses, net		2,395		-		-		-		2,395
Loan pools fully charged-off		-		(134)		-		-		(134)
Allowance de-recognition (a)		(14,133)		(57,794)		(232)		-		(72,159)
Balance at end of year	$	11,016	$	11,096	$	4	$	-	$	22,116
(a) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized on June 30, 2016 due to the revision in the derecognition policy for these loans.

	Quarter Ended June 30, 2015
	Mortgage		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for acquired Eurobank loans:
Balance at beginning of period	$	17,340	$	52,922	$	389	$	-	$	70,651
Provision (recapture) for Eurobank loans and lease losses, net		148		(253)		-		-		(105)
FDIC shared-loss portion of provision for covered loan and lease losses, net		105		801		-		-		906
Balance at end of period	$	17,593	$	53,470	$	389	$	-	$	71,452
	Six-Month Period Ended June 30, 2015
	Mortgage		Commercial and Construction		Consumer		Leasing		Total
	(In thousands)
Allowance for loan and lease losses for Eurobank loans:
Balance at beginning of year	$	15,522	$	48,334	$	389	$	-	$	64,245
Provision for Eurobank loans and lease losses, net		1,966		2,738		-		-		4,704
FDIC shared-loss portion of provision for covered loan and lease losses, net		105		2,398		-		-		2,503
Balance at end of year	$	17,593	$	53,470	$	389	$	-	$	71,452

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FDIC Indemnification and True-up Payment Obligation (Tables)

6 Months Ended

Jun. 30, 2016

Banking and Thrift [Abstract]

FDIC Indemnification Asset and True-Up Payment Obligation Roll Forward

The following table presents the activity in the FDIC indemnification asset and true-up payment obligation for the quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
FDIC indemnification asset:
Balance at beginning of period	$	20,923	$	75,221	$	22,599	$	97,378
Shared-loss agreements reimbursements from the FDIC		(332)		(24,387)		(737)		(38,087)
Increase in expected credit losses to be covered under shared-loss agreements, net		951		906		2,395		2,503
FDIC indemnification asset expense		(1,405)		(22,512)		(4,269)		(34,733)
Incurred expenses to be reimbursed under shared-loss agreements		(1,711)		(6,524)		(1,562)		(4,357)
Balance at end of period	$	18,426	$	22,704	$	18,426	$	22,704
True-up payment obligation:
Balance at beginning of period	$	25,235	$	22,844	$	24,658	$	21,981
Change in true-up payment obligation		537		733		1,114		1,596
Balance at end of period	$	25,772	$	23,577	$	25,772	$	23,577

Schedule Of Business Acquisitions By Acquisition Contingent Consideration Text Block

		June 30,		December 31,
	2016		2015
	(In thousands)
Carrying amount (fair value)	$	25,772	$	24,658
Undiscounted amount	$	33,782	$	34,956

FDIC Indemnification Asset Expense [Table Text block]

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
FDIC indemnification asset expense	$	1,405	$	22,512	$	4,269	$	34,733
Change in true-up payment obligation		537		733		1,114		1,596
Reimbursement to FDIC for recoveries		1,478		-		2,066		-
Total FDIC shared-loss expense, net	$	3,420	$	23,245	$	7,449	$	36,329

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Derivative Activities (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instrument Detail [Abstract]

Schedule Of Derivative Instruments Text Block

The following table presents the Company’s derivative assets and liabilities at June 30, 2016 and December 31, 2015:

	June 30,		December 31,
	2016		2015
	(In thousands)
Derivative assets:
Options tied to S&P 500 Index	$	187	$	1,170
Interest rate swaps not designated as hedges		1,703		1,819
Interest rate caps		36		32
Other		-		4
	$	1,926	$	3,025
Derivative liabilities:
Interest rate swaps designated as cash flow hedges	$	3,656	$	4,307
Interest rate swaps not designated as hedges		1,703		1,819
Interest rate caps		36		32
Other		18		4
	$	5,413	$	6,162

The following table shows a summary of these swaps and their terms at June 30, 2016:

	Notional		Fixed	Variable	Trade	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date	Date
	(In thousands)
Interest Rate Swaps	$	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
		37,290	2.4210%	1-Month LIBOR	07/03/13	07/03/13	08/01/23
	$	237,290

	Notional		Fixed	Variable	Settlement	Maturity
Type	Amount		Rate	Rate Index	Date	Date
	(In thousands)
Interest Rate Swaps - Derivatives Offered to Clients	$	3,682	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,182
Interest Rate Swaps - Mirror Image Derivatives	$	3,682	5.1300%	1-Month LIBOR	07/03/06	07/03/16
		12,500	5.5050%	1-Month LIBOR	04/11/09	04/11/19
	$	16,182

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Other Assets (Tables)

6 Months Ended

Jun. 30, 2016

Other asset

Schedule of Accrued interest receivable [Table Text Block]

	June 30,		December 31,
	2016		2015
	(In thousands)
Loans, excluding acquired loans	$	16,545	$	16,020
Investments		3,464		4,617
	$	20,009	$	20,637

Schedule of Other Assets [Table Text Block]

Other assets atJune 30, 2016 and December 31, 2015consist of the following

	June 30,		December 31,
	2016		2015
	(In thousands)
Prepaid expenses		16,332		11,762
Other repossessed assets		3,866		6,226
Core deposit and customer relationship intangibles		6,999		7,838
Mortgage tax credits		6,277		6,277
Investment in Statutory Trust		1,083		1,083
Accounts receivable and other assets		42,255		42,786
	$	76,812	$	75,972

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Deposits and Related Interest (Tables)

6 Months Ended

Jun. 30, 2016

Deposits, by Component, Alternative [Abstract]

Deposits By Component [Table Text Block]

Total deposits, including related accrued interest payable, as of June 30, 2016 and December 31, 2015consists of the following:

		June 30,		December 31,
	2016		2015
	(In thousands)
Non-interest bearing demand deposits	$	917,260	$	762,009
Interest-bearing savings and demand deposits		2,165,907		2,208,180
Individual retirement accounts		269,189		268,799
Retail certificates of deposit		525,979		441,998
Institutional certificates of deposit		204,074		253,791
Total core deposits		4,082,409		3,934,777
Brokered deposits		561,645		782,974
Total deposits	$	4,644,054	$	4,717,751

Interest Expense Domestic Deposit Liabilities [Table Text Block]

Interest expense for the quarters and six-month periods ended June 30, 2016 and 2015 was as follows:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Demand and savings deposits	$	3,184	$	3,100	$	6,026	$	6,482
Certificates of deposit		4,183		3,504		8,465		7,226
	$	7,367	$	6,604	$	14,491	$	13,708

Maturities Of Time Deposits [Table Text Block]

Excluding equity indexed options in the amount of $181thousand, which are used by the Company to manage its exposure to the S&P 500 Index, and also excluding accrued interest of $1.8million and unamortized deposit discount in the amount of $150 thousand, the scheduled maturities of certificates of deposit at June 30, 2016 and December 31, 2015are as follows:

	June 30, 2016		December 31, 2015
	(In thousands)
Within one year:
Three (3) months or less	$	225,512	$	474,051
Over 3 months through 1 year		518,304		501,551
		743,816		975,602
Over 1 through 2 years		513,092		454,906
Over 2 through 3 years		155,666		176,406
Over 3 through 4 years		36,059		32,396
Over 4 through 5 years		44,340		33,715
	$	1,492,973	$	1,673,025

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Borrowings (Tables)

6 Months Ended

Jun. 30, 2016

Debt Instruments [Abstract]

Schedule Of Repurchase Agreement Counterparty [Table Text Block]

At June 30, 2016 and December 31, 2015, securities sold under agreements to repurchase (classified by counterparty), excluding accrued interest in the amount of $1.6 million and $2.2 million, respectively,were as follows:

	June 30,				December 31,
	2016				2015
			Fair Value of				Fair Value of
	Borrowing		Underlying		Borrowing		Underlying
	Balance		Collateral		Balance		Collateral
	(In thousands)
JP Morgan Chase Bank NA	$	222,500	$	231,586	$	262,500	$	283,483
Credit Suisse Securities (USA) LLC		402,000		437,103		670,000		737,887
Total	$	624,500	$	668,689	$	932,500	$	1,021,370

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 $1.6 million, atJune 30, 2016:

			Weighted-
	Borrowing		Average		Maturity
Year of Maturity	Balance		Coupon	Settlement Date	Date
	(In thousands)
2016	$	170,000	1.500%	12/6/2012	12/8/2016
2017		232,000	4.780%	3/2/2007	3/2/2017
2018		222,500	1.420%	12/10/2012	4/29/2018
	$	624,500	2.690%

Schedule of Repurchase Agreements [Table]

	June 30, 2016
					Market Value of Underlying Collateral
			Weighted		FNMA and				US Treasury
	Repurchase		Average		FHLMC		GNMA		Treasury
	Liability		Rate		Certificates		Certificates		Notes		Total
	(Dollars in thousands)
Over 90 days	$	624,500		2.69%	$	646,889	$	1,579	$	20,221	$	668,689
	December 31, 2015
					Market Value of Underlying Collateral
			Weighted		FNMA and				US Treasury
	Repurchase		Average		FHLMC		GNMA		Treasury
	Liability		Rate		Certificates		Certificates		Notes		Total
	(Dollars in thousands)
Less than 90 days	$	30,000		0.70%	$	31,961	$	-	$	-	$	31,961
Over 90 days		902,500		3.18%		974,698		2,131		12,580		989,409
Total	$	932,500		3.10%	$	1,006,659	$	2,131	$	12,580	$	1,021,370

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 $336 thousand, at June 30, 2016:

			Weighted-
		Borrowing	Average		Maturity
Year of Maturity		Balance	Coupon	Settlement Date	Date
		(In thousands)
2016	$	50,000	0.56%	6/10/2016	7/11/2016
		100,000	0.59%	6/16/2016	7/18/2016
		25,000	0.60%	6/24/2016	7/25/2016
		25,000	0.57%	6/30/2016	7/29/2016
		37,290	0.63%	6/1/2016	7/1/2016
		237,290
2017		4,150	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		9,704	2.59%	7/19/2013	7/20/2020
	$	306,144	0.95%

Redemtion Funds [Table Text Block]

	Redemption fund
	(In thousands)
Redemption fund at June 30, 2016	$	67,000
	$	67,000

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Offset of Assets/Liabilities (Tables)

6 Months Ended

Jun. 30, 2016

Offsetting [Abstract]

Offsetting Assets [Table Text Block]

June 30, 2016

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

$

1,926

$

-

$

1,926

$

2,009

$

-

$

(83)

December 31, 2015

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

$

3,025

$

-

$

3,025

$

2,000

$

-

$

1,025

Offsetting Liabilities [Table Text Block]

June 30, 2016
							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	$	5,594	$	-	$	5,594	$	-	$	1,980	$	3,614
Securities sold under agreements to repurchase		624,500		-		624,500		668,689		-		(44,189)
Total	$	630,094	$	-	$	630,094	$	668,689	$	1,980	$	(40,575)
December 31, 2015
							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	$	7,257	$	-	$	7,257	$	-	$	1,980	$	5,277
Securities sold under agreements to repurchase		932,500		-		932,500		1,021,370		-		(88,870)
Total	$	939,757	$	-	$	939,757	$	1,021,370	$	1,980	$	(83,593)

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Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

The activity and balance of these loans for the quarters and six-month periods endedJune 30, 2016 and 2015was as follows:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Balance at the beginning of year	$	31,134	$	27,508	$	31,475	$	27,011
New loans and disbursements		1,596		6,457		1,799		10,312
Repayments		(2,034)		(647)		(2,578)		(4,005)
Balance at the end of period	$	30,696	$	33,318	$	30,696	$	33,318

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Regulatory Capital Requirements (Tables)

6 Months Ended

Jun. 30, 2016

Regulatory Capital Requirements 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 June 30, 2016 and December 31, 2015are as follows:

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio		Amount	Ratio
	(Dollars in thousands)
Company Ratios
As of June 30, 2016
Total capital to risk-weighted assets	$	849,147	18.00%	$	377,323	8.00%	$	471,653	10.00%
Tier 1 capital to risk-weighted assets	$	788,349	16.71%	$	282,992	6.00%	$	377,323	8.00%
Common equity tier 1 capital to risk-weighted assets	$	596,080	12.64%	$	212,244	4.50%	$	306,575	6.50%
Tier 1 capital to average total assets	$	788,349	11.92%	$	264,633	4.00%	$	330,791	5.00%
As of December 31, 2015
Total capital to risk-weighted assets	$	846,748	17.29%	$	391,723	8.00%	$	489,654	10.00%
Tier 1 capital to risk-weighted assets	$	782,912	15.99%	$	293,792	6.00%	$	391,723	8.00%
Common equity tier 1 capital to risk-weighted assets	$	594,482	12.14%	$	220,344	4.50%	$	318,275	6.50%
Tier 1 capital to average total assets	$	782,912	11.18%	$	280,009	4.00%	$	350,011	5.00%

				Minimum Capital			Minimum to be Well
	Actual			Requirement			Capitalized
	Amount		Ratio	Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Bank Ratios
As of June 30, 2016
Total capital to risk-weighted assets	$	830,002	17.62%	$	376,874	8.00%	$	471,093	10.00%
Tier 1 capital to risk-weighted assets	$	769,424	16.33%	$	282,656	6.00%	$	376,874	8.00%
Common equity tier 1 capital to risk-weighted assets	$	769,424	16.33%	$	211,992	4.50%	$	306,210	6.50%
Tier 1 capital to average total assets	$	769,424	11.68%	$	263,464	4.00%	$	329,330	5.00%
As of December 31, 2015
Total capital to risk-weighted assets	$	815,458	16.70%	$	390,688	8.00%	$	488,360	10.00%
Tier 1 capital to risk-weighted assets	$	751,886	15.40%	$	293,016	6.00%	$	390,688	8.00%
Common equity tier 1 capital to risk-weighted assets	$	751,886	15.40%	$	219,762	4.50%	$	317,434	6.50%
Tier 1 capital to average total assets	$	751,886	10.80%	$	278,399	4.00%	$	347,999	5.00%

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2016

Stockholders' Equity [Abstract]

Schedule of Treasury Stock by Class [Table Text Block]

The activity in connection with common shares held in treasury by the Company for the six-month periods ended June 30, 2016 and 2015 is set forth below

	Six-Month Period Ended June 30
	2016			2015
		Dollar			Dollar
	Shares	Amount		Shares	Amount
	(In thousands, except shares data)
Beginning of period	8,757,960	$	105,379	8,012,254	$	97,070
Common shares used upon lapse of restricted stock units	(45,810)		(505)	(58,279)		(640)
Common shares repurchased as part of the stock repurchase program	-		-	303,985		4,238
End of period	8,712,150	$	104,874	8,257,960	$	100,668

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2016

Disclosure Text Block Abstract

Schedule of Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income, net of income tax, as of June 30, 2016 and December 31, 2015consistedof:

	June 30,		December 31,
	2016		2015
	(In thousands)
Unrealized gain on securities available-for-sale which are not other-than-temporarily impaired	$	19,004	$	22,044
Unrealized gain on securities available-for-sale which are other-than-temporarily impaired		-		(3,196)
Income tax effect of unrealized gain on securities available-for-sale		(919)		(1,924)
Net unrealized gain on securities available-for-sale which are not other-than-temporarily impaired, net of tax		18,085		16,924
Unrealized loss on cash flow hedges		(3,655)		(4,307)
Income tax effect of unrealized loss on cash flow hedges		1,375		1,380
Net unrealized loss on cash flow hedges		(2,280)		(2,927)
Accumulated other comprehensive income, net of taxes	$	15,805	$	13,997

The following table presents changes in accumulated other comprehensive income by component, net of taxes, for the quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30,
	2016						2015
	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	$	15,089	$	(2,805)	$	12,284	$	30,214	$	(5,890)	$	24,324
Other comprehensive income (loss) before reclassifications		3,060		(949)		2,111		(11,523)		(180)		(11,703)
Amounts reclassified out of accumulated other comprehensive (loss) income		(64)		1,474		1,410		141		1,539		1,680
Other comprehensive income (loss)		2,996		525		3,521		(11,382)		1,359		(10,023)
Ending balance	$	18,085	$	(2,280)	$	15,805	$	18,832	$	(4,531)	$	14,301
	Six-Month Period Ended June 30,
	2016						2015
	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	$	16,924	$	(2,927)	$	13,997	$	25,764	$	(6,053)	$	19,711
Other comprehensive (loss) before reclassifications		(1,266)		(2,406)		(3,672)		(7,212)		(1,549)		(8,761)
Amounts reclassified out of accumulated other comprehensive income (loss)		2,427		3,053		5,480		280		3,071		3,351
Other comprehensive income (loss)		1,161		647		1,808		(6,932)		1,522		(5,410)
Ending balance	$	18,085	$	(2,280)	$	15,805	$	18,832	$	(4,531)	$	14,301

Reclassification out of Accumulated Other Comprehensive Income [Table text block]

The following table presents reclassifications out of accumulated other comprehensive income for the quarters and six-month periods ended June 30, 2016 and 2015:

	Amount reclassified out of accumulated
	other comprehensive income				Affected Line Item in
	Quarter Ended June 30,				Consolidated Statement
		2016		2015	of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	1,354	$	1,614	Net interest expense
Tax effect from increase in capital gains tax rate		120		(75)	Income tax expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		8		12	Income tax expense
Tax effect from increase in capital gains tax rate		(72)		129	Income tax expense
	$	1,410	$	1,680
	Amount reclassified out of accumulated
	other comprehensive income				Affected Line Item in
	Six-Month Period Ended June 30,				Consolidated Statement
		2016		2015	of Operations
	(In thousands)
Cash flow hedges:
Interest-rate contracts	$	2,804	$	3,220	Net interest expense
Tax effect from increase in capital gains tax rate		249		(149)	Income tax expense
Available-for-sale securities:
Residual tax effect from OIB's change in applicable tax rate		16		22	Income tax expense
Other-than-temporary impairment losses on available for sale securities realized during the period		2,557		-
Tax effect from increase in capital gains tax rate		(146)		258	Income tax expense
	$	5,480	$	3,351

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Earning Per Common Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

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

NOTE 17 –EARNINGS (LOSS) PER COMMON SHARE

The calculation of earnings (loss) per common share for the quarters and six-month periods ended June 30, 2016 and 2015is as follows:

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands, except per share data)				(In thousands, except per share data)
Net income (loss)	$	14,339	$	(3,109)	$	28,510	$	(6,097)
Less: Dividends on preferred stock
Non-convertible preferred stock (Series A, B, and D)		(1,629)		(1,628)		(3,256)		(3,256)
Convertible preferred stock (Series C)		(1,837)		(1,838)		(3,675)		(3,675)
Income (loss) available to common shareholders	$	10,873	$	(6,575)	$	21,579	$	(13,028)
Effect of assumed conversion of the convertible preferred stock		1,837		1,838		3,675		3,675
Income (loss) available to common shareholders assuming conversion	$	12,710	$	(4,737)	$	25,254	$	(9,353)
Weighted average common shares and share equivalents:
Average common shares outstanding		43,914		44,505		43,906		44,569
Effect of dilutive securities:
Average potential common shares-options		43		110		37		148
Average potential common shares-assuming conversion of convertible preferred stock		7,138		7,159		7,138		7,159
Total weighted average common shares outstanding and equivalents		51,095		51,774		51,081		51,876
Earnings (loss) per common share - basic	$	0.25	$	(0.15)	$	0.49	$	(0.29)
Earnings (loss) per common share - diluted	$	0.25	$	(0.15)	$	0.49	$	(0.29)

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Guarantees (Tables)

6 Months Ended

Jun. 30, 2016

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 six-month periods ended June 30, 2016 and 2015.

	Quarter Ended June 30,				Six-Month Period Ended June 30,
	2016		2015		2016		2015
	(In thousands)				(In thousands)
Balance at beginning of period	$	181	$	487	$	439	$	927
Net (charge-offs/terminations) recoveries		(19)		(198)		(277)		(638)
Balance at end of period	$	162	$	289	$	162	$	289

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies [Abstract]

Schedule Of Line Of Credit Facilities Text Block

Credit-related financial instruments at June 30, 2016 and December 31, 2015were as follows:

		June 30,		December 31,
	2016		2015
	(In thousands)
Commitments to extend credit	$	461,054	$	456,720
Commercial letters of credit		1,556		1,508

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 June 30, 2016 and December 31, 2015, is as follows:

		June 30,		December 31,
	2016		2015
	(In thousands)
Standby letters of credit and financial guarantees	$	4,756	$	14,656
Loans sold with recourse		21,064		22,374

Contractual Obligation Fiscal Year Maturity Schedule [Table Text Block]

	Minimum Rent
Year Ending December 31,	(In thousands)
2016	$	4,732
2017		6,850
2018		6,428
2019		6,387
2020		5,660
Thereafter		12,500
	$	42,557

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2016

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 are summarized below:

	June 30, 2016
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	664,302	$	-	$	664,302
Trading securities		-		348		-		348
Money market investments		5,740		-		-		5,740
Derivative assets		-		1,739		187		1,926
Servicing assets		-		-		7,932		7,932
Derivative liabilities		-		(5,413)		(181)		(5,594)
	$	5,740	$	660,976	$	7,938	$	674,654
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	219,393	$	219,393
Foreclosed real estate		-		-		51,220		51,220
Other repossessed assets		-		-		3,866		3,866
	$	-	$	-	$	274,479	$	274,479

	December 31, 2015
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	-	$	974,609	$	-	$	974,609
Trading securities		-		288		-		288
Money market investments		4,699		-		-		4,699
Derivative assets		-		1,855		1,170		3,025
Servicing assets		-		-		7,455		7,455
Derivative liabilities		-		(6,162)		(1,095)		(7,257)
	$	4,699	$	970,590	$	7,530	$	982,819
Non-recurring fair value measurements:
Impaired commercial loans	$	-	$	-	$	235,767	$	235,767
Foreclosed real estate		-		-		58,176		58,176
Other repossessed assets		-		-		6,226		6,226
	$	-	$	-	$	300,169	$	300,169

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 six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30, 2016
	Derivative				Derivative
	asset				liability
	(S&P				(S&P
	Purchased			Servicing	Embedded
Level 3 Instruments Only	Options)			assets	Options)		Total
Balance at beginning of period	$	772	$	7,819	$	(746)	$	7,845
Gains (losses) included in earnings		(585)		-		557		(28)
New instruments acquired		-		717		-		717
Principal repayments		-		(121)		-		(121)
Amortization		-		-		8		8
Changes in fair value of servicing assets		-		(483)		-		(483)
Balance at end of period	$	187	$	7,932	$	(181)	$	7,938
	Six-Month Period Ended June 30, 2016
	Derivative					Derivative
	asset					liability
	(S&P					(S&P
	Purchased			Servicing		Embedded
Level 3 Instruments Only	Options)			assets		Options)		Total
Balance at beginning of period	$	1,171	$	7,455	$	(1,095)	$	7,531
Gains (losses) included in earnings		(984)		-		886		(98)
New instruments acquired		-		1,275		-		1,275
Principal repayments		-		(225)		-		(225)
Amortization		-		-		28		28
Changes in fair value of servicing assets		-		(573)		-		(573)
Balance at end of period	$	187	$	7,932	$	(181)	$	7,938
	Quarter Ended June 30, 2015
	Derivative					Derivative
	asset					liability
	(S&P					(S&P
	Purchased			Servicing		Embedded
Level 3 Instruments Only	Options)			assets		Options)		Total
Balance at beginning of period	$	3,734	$	12,164	$	(3,617)	$	12,281
(Losses) included in earnings		(1,596)		-		1,517		(79)
Sale of mortgage servicing rights held-for-sale		-		(6,985)		-		(6,985)
Changes due to payments on loans		-		(313)		-		(313)
New instruments acquired		-		1,529		-		1,529
Changes in fair value related to price of MSRs held for sale		-		(835)		-		(835)
Amortization		-		-		56		56
Changes in fair value of servicing assets		-		231		-		231
Balance at end of period	$	2,138	$	5,791	$	(2,044)	$	5,885

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Table Text Block]

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 June 30, 2016:

	June 30, 2016
	Fair Value		Valuation Technique	Unobservable Input	Range
	(In thousands)
Derivative assets (S&P Purchased Options)	$	187	Option pricing model	Implied option volatility	41.87%
				Counterparty credit risk (based on 5-year credit default swap ("CDS") spread)	79.96%-89.03%
Servicing assets	$	7,932	Cash flow valuation	Constant prepayment rate	4.41% - 11.40%
				Discount rate	10.00% - 12.00%
Derivative liability (S&P Embedded Options)	$	(181)	Option pricing model	Implied option volatility	41.87%
				Counterparty credit risk (based on 5-year CDS spread)	79.96%-89.03%
Collateral dependant impaired loans	$	28,558	Fair value of property or collateral	Appraised value less disposition costs	29.20% - 43.20%
Puerto Rico Electric Power Authority line of credit, net	$	183,020	Cash flow valuation	Discount rate	7.25%
Other non-collateral dependant impaired loans	$	7,814	Cash flow valuation	Discount rate	4.25%-10.50%
Foreclosed real estate	$	51,220	Fair value of property or collateral	Appraised value less disposition costs	29.20% - 43.20%
Other repossessed assets	$	3,866	Fair value of property or collateral	Appraised value less disposition costs	29.20% - 43.20%

Fair Value By Balance Sheet Grouping [Text Block]

The estimated fair value and carrying value of the Company’s financial instruments atJune 30, 2016 and December 31, 2015is as follows:

	June 30,				December 31,
	2016				2015
	Fair		Carrying		Fair		Carrying
	Value		Value		Value		Value
	(In thousands)
Level 1
Financial Assets:
Cash and cash equivalents	$	517,048	$	517,048	$	536,709	$	536,709
Restricted cash		3,030		3,030		3,349		3,349
Level 2
Financial Assets:
Trading securities		348		348		288		288
Investment securities available-for-sale		664,302		664,302		974,609		974,609
Investment securities held-to-maturity		643,530		635,399		614,679		620,189
Federal Home Loan Bank (FHLB) stock		19,838		19,838		20,783		20,783
Other investments		3		3		3		3
Derivative assets		1,739		1,739		1,855		1,855
Financial Liabilities:
Derivative liabilities		5,413		5,413		6,162		6,162
Level 3
Financial Assets:
Total loans (including loans held-for-sale)		4,163,769		4,373,617		4,101,219		4,434,213
Derivative assets		187		187		1,170		1,170
FDIC indemnification asset		11,064		18,426		17,786		22,599
Accrued interest receivable		20,009		20,009		20,637		20,637
Servicing assets		7,932		7,932		7,455		7,455
Accounts receivable and other assets		42,243		42,243		42,786		42,786
Financial Liabilities:
Deposits		4,633,864		4,643,873		4,705,878		4,715,764
Securities sold under agreements to repurchase		630,933		626,109		955,859		934,691
Advances from FHLB		308,583		306,480		335,812		332,476
Other borrowings		2,599		1,753		2,593		1,734
Subordinated capital notes		98,944		102,983		94,940		102,633
Accrued expenses and other liabilities		88,930		88,930		92,935		92,935
Derivative liabilities embedded in deposits		181		181		1,095		1,095

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Business Segments (Tables)

6 Months Ended

Jun. 30, 2016

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 quarters and six-month periods ended June 30, 2016 and 2015:

	Quarter Ended June 30, 2016
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	79,675	$	16	$	8,217	$	87,908	$	-	$	87,908
Interest expense		(7,300)		-		(7,296)		(14,596)		-		(14,596)
Net interest income		72,375		16		921		73,312		-		73,312
Provision for loan and lease losses		(14,445)		-		-		(14,445)		-		(14,445)
Non-interest income		8,214		6,910		31		15,155		-		15,155
Non-interest expenses		(47,098)		(4,908)		(1,820)		(53,826)		-		(53,825)
Intersegment revenue		389		-		49		438		(438)		-
Intersegment expenses		(49)		(286)		(103)		(438)		438		-
Income before income taxes	$	19,386	$	1,732	$	(922)	$	20,196	$	-	$	20,197
Total assets	$	5,829,987	$	19,054	$	1,800,838	$	7,649,879	$	(937,283)	$	6,712,596
	Quarter Ended June 30, 2015
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	90,504	$	24	$	8,885	$	99,413	$	-	$	99,413
Interest expense		(7,110)		-		(10,011)		(17,121)		-		(17,121)
Net interest income		83,394		24		(1,126)		82,292		-		82,292
Provision for loan and lease losses		(15,539)		-		-		(15,539)		-		(15,539)
Non-interest (loss) income		(11,713)		6,893		164		(4,656)		-		(4,656)
Non-interest expenses		(56,844)		(6,733)		(860)		(64,437)		-		(64,437)
Intersegment revenue		163		-		61		224		(224)		-
Intersegment expenses		(61)		(87)		(76)		(224)		224		-
(Loss) income before income taxes	$	(600)	$	97	$	(1,837)	$	(2,340)	$	-	$	(2,340)
Total assets	$	6,153,663	$	21,157	$	2,136,293	$	8,311,113	$	(912,788)	$	7,398,325

	Six-Month Period Ended June 30, 2016
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	160,827	$	34	$	18,353	$	179,214	$	-	$	179,214
Interest expense		(14,107)		-		(16,820)		(30,927)		-		(30,927)
Net interest income		146,720		34		1,533		148,287		-		148,287
Provision for loan and lease losses		(28,234)		-		-		(28,234)		-		(28,234)
Non-interest income (loss)		16,009		12,930		(281)		28,658		-		28,658
Non-interest expenses		(97,786)		(7,853)		(3,043)		(108,682)		-		(108,682)
Intersegment revenue		787		-		149		936		(936)		-
Intersegment expenses		(149)		(577)		(210)		(936)		936		-
Income (loss) before income taxes	$	37,347	$	4,534	$	(1,852)	$	40,029	$	-	$	40,029
	Six-Month Period Ended June 30, 2015
			Wealth				Total Major				Consolidated
	Banking		Management		Treasury		Segments		Eliminations		Total
	(In thousands)
Interest income	$	187,986	$	47	$	18,381	$	206,414	$	-	$	206,414
Interest expense		(14,564)		-		(19,923)		(34,487)		-		(34,487)
Net interest income		173,422		47		(1,542)		171,927		-		171,927
Provision for loan and lease losses		(57,732)		-		-		(57,732)		-		(57,732)
Non-interest income (loss)		(13,962)		13,903		2,284		2,225		-		2,225
Non-interest expenses		(106,156)		(11,524)		(3,089)		(120,769)		-		(120,769)
Intersegment revenue		707		-		160		866		(866)		-
Intersegment expenses		(159)		(518)		(189)		(866)		866		-
(Loss) income before income taxes	$	(3,880)	$	1,908	$	(2,376)	$	(4,349)	$	-	$	(4,349)

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Restricted Cash (Narrative) (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Restricted Cash And Cash Equivalents Items Line Items
Certificates Of Deposits Oriental International Banking and Oriental Overseas	$ 300,000	$ 300,000
Reserve required by local Goverment	178,100,000	148,300,000
Deposit pledged as collateral	3,030,000	3,349,000
Derivative
Restricted Cash And Cash Equivalents Items Line Items
Deposit pledged as collateral	1,980,000	1,980,000
Residential Loans Sold with Recourse [Member]
Restricted Cash And Cash Equivalents Items Line Items
Deposit pledged as collateral	$ 1,050,000	$ 1,369,000

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Restricted Cash (Composition) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Restricted Cash And Cash Equivalents Items Line Items
Deposit pledged as collateral	$ 3,030	$ 3,349
Derivatives
Restricted Cash And Cash Equivalents Items Line Items
Deposit pledged as collateral	1,980	1,980
Obligations under agreements of loans sold with recourse
Restricted Cash And Cash Equivalents Items Line Items
Deposit pledged as collateral	$ 1,050	$ 1,369

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Investment Securities (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
Investments Guaranteed by US Treasury and Sponsored Agencies in Unrealized Loss on Position	$ 54,500		$ 54,500
Investments Guaranteed by Puerto Rico Government and its Political Subdivisions in Unrealized Loss On Position	$ 6,700		$ 6,700
Investments Guaranteed By Us Treasury And Sponsored Agencies in Unrealized Loss Position Percentage To Total Investment in Unrealized Loss Position	89.00%		89.00%
Investments Guaranteed By Puerto Rico Government and Its Political Subdivisions in Unrealized Loss Position Percentage To Total Investment in Unrealized Loss Position	11.00%		11.00%
Money market investments	$ 5,740		$ 5,740		$ 4,699
Securitized GNMA pools, amortized cost	$ 54,200		$ 54,200
Securitized GNMA pool, yield	3.01%		3.01%
Schedule of Available-for-sale Securities [Line Items]
Gain (Loss) on Sale of Securities, Net	$ 211	$ 0	$ 12,207	$ 2,572
Other Than Temporary Impairment Credit Losses Recognized In Earnings Credit Losses On Debt Securities Held	0	$ 0	0	0	$ 1,490	$ 0
Investments Guaranteed By Local Government And Its Political Subdivisions In Unrealized Loss On Position with Default Probability Principal	6,700		6,700
Investments Guaranteed By Local Government And Its Political Subdivisions In Unrealized Loss On Position with Cumulative Default Probability Fair Value	$ 5,800		$ 5,800
Investments Guaranteed By Local Government And Its Political Subdivisions In Unrealized Loss Position Fair Vaue Percentage to Total Cost	87.00%		87.00%
Investments Guaranteed By Local Government And Its Political Subdivisions In Unrealized Loss Position With Cumulative Default Percentage at Maturity	10.20%		10.20%
Government Investment with Default Probability Payment Received	$ 2,000		$ 2,000
Collateralized Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Book Value			288,276	101,258
Collateralized Mortgage Backed Securities [Member] | FNMA and FHLMC [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Book Value			277,181	37,735
Collateralized Mortgage Backed Securities [Member] | Government National Mortgage Association Certificates and Obligations (GNMA) [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Book Value			$ 11,095	$ 63,523

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Investment Securities (Investment securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 645,298	$ 955,646
Available-for-sale Securities, Gross Unrealized Gains	20,055	27,312
Available-for-sale Securities, Gross Unrealized Losses	1,051	8,349
Available-for-sale Securities	$ 664,302	$ 974,609
Available for sale - Weighted Average Yield	2.57%	2.87%
Held-to-maturity, Amortized cost	$ 635,399	$ 620,189
Held to maturity Securities Unrecognized Gains	8,131	426
Held-to-maturity Securities, Unrecognized Loss	0	5,936
Held to maturity Fair Value	$ 643,530	$ 614,679
Held to maturity - Weighted Average Yield	2.13%	0.0217%
Total Securities - Amortized Cost	$ 1,280,697	$ 1,575,835
Total Securities Gross Unrealized Gains	28,186	27,738
Total Securities Gross Unrealized Losses	1,051	14,285
Total Securities Fair Value	$ 1,307,832	$ 1,589,288
Marketable Securities Weighted Average Yield	2.36%	2.60%
Collateralized Mortgage Backed Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 632,009	$ 930,279
Available-for-sale Securities, Gross Unrealized Gains	19,894	27,184
Available-for-sale Securities, Gross Unrealized Losses	179	4,250
Available-for-sale Securities	$ 651,724	$ 953,213
Available for sale - Weighted Average Yield	2.55%	2.82%
Held-to-maturity, Amortized cost	$ 610,384	$ 595,157
Held to maturity Securities Unrecognized Gains	8,121	426
Held-to-maturity Securities, Unrecognized Loss	0	5,865
Held to maturity Fair Value	$ 618,505	$ 589,718
Held to maturity - Weighted Average Yield	2.20%	0.0224%
Collateralized Mortgage Backed Securities [Member] | FNMA and FHLMC [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 402,557	$ 735,363
Available-for-sale Securities, Gross Unrealized Gains	14,414	25,791
Available-for-sale Securities, Gross Unrealized Losses	0	1,509
Available-for-sale Securities	$ 416,971	$ 759,645
Available for sale - Weighted Average Yield	2.61%	2.97%
Held-to-maturity, Amortized cost	$ 610,384	$ 595,157
Held to maturity Securities Unrecognized Gains	8,121	426
Held-to-maturity Securities, Unrecognized Loss	0	5,865
Held to maturity Fair Value	$ 618,505	$ 589,718
Held to maturity - Weighted Average Yield	2.20%	2.24%
Collateralized Mortgage Backed Securities [Member] | GNMA [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 109,214	$ 57,129
Available-for-sale Securities, Gross Unrealized Gains	5,064	1,366
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available-for-sale Securities	$ 114,278	$ 58,495
Available for sale - Weighted Average Yield	3.06%	3.19%
Collateralized Mortgage Backed Securities [Member] | CMO's [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 120,238	$ 137,787
Available-for-sale Securities, Gross Unrealized Gains	416	27
Available-for-sale Securities, Gross Unrealized Losses	179	2,741
Available-for-sale Securities	$ 120,475	$ 135,073
Available for sale - Weighted Average Yield	1.87%	1.85%
Securities Investment [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 13,289	$ 25,367
Available-for-sale Securities, Gross Unrealized Gains	161	128
Available-for-sale Securities, Gross Unrealized Losses	872	4,099
Available-for-sale Securities	$ 12,578	$ 21,396
Available for sale - Weighted Average Yield	3.73%	4.94%
Held-to-maturity, Amortized cost		$ 25,032
Held to maturity Securities Unrecognized Gains	$ 10	0
Held-to-maturity Securities, Unrecognized Loss	0	71
Held to maturity Fair Value	$ 25,025	$ 24,961
Held to maturity - Weighted Average Yield	0.49%	0.0049%
Securities Investment [Member] | US Treasury Securities [Member]
Schedule of Investments [Line Items]
Held-to-maturity, Amortized cost	$ 25,015	$ 25,032
Held to maturity Securities Unrecognized Gains	10	0
Held-to-maturity Securities, Unrecognized Loss	0	71
Held to maturity Fair Value	$ 25,025	$ 24,961
Held to maturity - Weighted Average Yield	0.49%	0.0049%
Securities Investment [Member] | Obligation of US Government sponsored agencies at loss [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 4,468	$ 5,122
Available-for-sale Securities, Gross Unrealized Gains	34	0
Available-for-sale Securities, Gross Unrealized Losses	0	29
Available-for-sale Securities	$ 4,502	$ 5,093
Available for sale - Weighted Average Yield	1.37%	1.36%
Securities Investment [Member] | Obligation of Puerto Rico Government and political subdivisions [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 6,720	$ 17,801
Available-for-sale Securities, Gross Unrealized Gains	0	0
Available-for-sale Securities, Gross Unrealized Losses	872	4,070
Available-for-sale Securities	$ 5,848	$ 13,731
Available for sale - Weighted Average Yield	5.55%	6.24%
Securities Investment [Member] | Other Debt Obligations [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 2,101	$ 2,444
Available-for-sale Securities, Gross Unrealized Gains	127	128
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available-for-sale Securities	$ 2,228	$ 2,572
Available for sale - Weighted Average Yield	2.94%	2.98%

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Investment Securities (Investment securities by contractual maturity) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Investments [Line Items]
Available for sale Amortized Cost	$ 645,298	$ 955,646
Available-for-sale Securities	664,302	974,609
Held-to-maturity, Amortized cost	635,399	620,189
Held to maturity Fair Value	643,530	614,679
Collateralized Mortgage Backed Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	632,009	930,279
Available-for-sale Securities	651,724	953,213
Held-to-maturity, Amortized cost	610,384	595,157
Held to maturity Fair Value	618,505	589,718
Collateralized Mortgage Backed Securities [Member] | FNMA and FHLMC [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	402,557	735,363
Available-for-sale Securities	416,971	759,645
Held-to-maturity, Amortized cost	610,384	595,157
Held to maturity Fair Value	618,505	589,718
Collateralized Mortgage Backed Securities [Member] | GNMA [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	109,214	57,129
Available-for-sale Securities	114,278	58,495
Collateralized Mortgage Backed Securities [Member] | CMO's [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	120,238	137,787
Available-for-sale Securities	120,475	135,073
Collateralized Mortgage Backed Securities [Member] | Maturities Due From Five To Ten Years [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	12,650
Available-for-sale Securities	12,996
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	12,650
Available-for-sale Securities	12,996
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	619,359
Available-for-sale Securities	638,728
Held-to-maturity, Amortized cost	610,384
Held to maturity Fair Value	618,505
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	389,907
Available-for-sale Securities	403,975
Held-to-maturity, Amortized cost	610,384
Held to maturity Fair Value	618,505
Collateralized Mortgage Backed Securities [Member] | Maturities Due After Ten Years [Member] | GNMA [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	109,214
Available-for-sale Securities	114,278
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	120,238
Available-for-sale Securities	120,475
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Investment Securities
Schedule of Investments [Line Items]
Available for sale Amortized Cost	13,289	25,367
Available-for-sale Securities	12,578	21,396
Held-to-maturity, Amortized cost		25,032
Held to maturity Fair Value	25,025	24,961
Investment Securities | US Treasury Securities [Member]
Schedule of Investments [Line Items]
Held-to-maturity, Amortized cost	25,015	25,032
Held to maturity Fair Value	25,025	24,961
Investment Securities | Obligation of US Government sponsored agencies at loss [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	4,468	5,122
Available-for-sale Securities	4,502	5,093
Investment Securities | Obligation of Puerto Rico Government and political subdivisions [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	6,720	17,801
Available-for-sale Securities	5,848	13,731
Investment Securities | Other Debt Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	2,101	2,444
Available-for-sale Securities	2,228	$ 2,572
Investment Securities | Maturities Due From One To Five Years [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	6,720
Available-for-sale Securities	5,848
Held-to-maturity, Amortized cost	25,015
Held to maturity Fair Value	25,025
Investment Securities | Maturities Due From One To Five Years [Member] | US Treasury Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	0
Available-for-sale Securities	0
Held-to-maturity, Amortized cost	25,015
Held to maturity Fair Value	25,025
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	6,720
Available-for-sale Securities	5,848
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	6,569
Available-for-sale Securities	6,730
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	4,468
Available-for-sale Securities	4,502
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	0
Investment Securities | Maturities Due From Five To Ten Years [Member] | Other Debt Securities [Member]
Schedule of Investments [Line Items]
Available for sale Amortized Cost	2,101
Available-for-sale Securities	2,228
Held-to-maturity, Amortized cost	0
Held to maturity Fair Value	$ 0

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Investment Securities (Gross realize gains and losses by category) (Details) - Collateralized Mortgage Backed Securities [Member] - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Schedule of Available-for-sale Securities [Line Items]
Sale Price	$ 300,483	$ 103,831
Book Value	288,276	101,258
Available-for-sale Securities, Gross Realized Gains	16,324	2,572
Available-for-sale Securities, Gross Realized Losses	4,117	0
FNMA and FHLMC [Member]
Schedule of Available-for-sale Securities [Line Items]
Sale Price	293,505	40,307
Book Value	277,181	37,735
Available-for-sale Securities, Gross Realized Gains	16,324	2,571
Available-for-sale Securities, Gross Realized Losses	0	0
GNMA [Member]
Schedule of Available-for-sale Securities [Line Items]
Sale Price	6,978	63,524
Book Value	11,095	63,523
Available-for-sale Securities, Gross Realized Gains	0	1
Available-for-sale Securities, Gross Realized Losses	$ 4,117	$ 0

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Investment Securities (Gains and losses by category) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Available For Sale Securities Continuous Unrealized Loss Position Amortized Cost [Abstract]
Available for sale - Amortized cost - less than 12 month		$ 180,338
Available for sale - Amortized cost - more than 12 month	$ 61,169	121,141
Total Available for Sale Amortization cost	61,169	301,479
Available For Sale Securities Continuous Unrealized Loss Position Aggregate Losses [Abstract]
Available for sale - Unrealized Loss - less than 12 month		1,869
Available for sale - Unrealized Loss - more than 12 month	1,051	6,480
Total Available for Sale Unrealized Loss	1,051	8,349
Available For Sale Securities Continuous Unrealized Loss Position Fair Value [Abstract]
Available for sale - Fair Value - less than 12 month		178,469
Available-for-sale, Fair Value - more than 12 month	60,118	114,661
Total Available for Sale Fair Value	60,118	293,130
Continuous Unrealized Loss Position Amortized Cost [Abstract]
Held to Maturity - Amortized cost - less than 12 month		493,519
Held to Maturity - Amortized Cost		493,519
Held To Maturity Securities, Continuous Unrealized Loss Position Aggregate Losses [Abstract]
Held to Maturity- Unrealized Loss - more than 12 month		5,936
Held to Maturity- Unrealized Loss		5,936
Held To Maturity Securities Continuous Unrealized Loss Position Fair Value [Abstract]
Held-to-Maturity - Fair Value - less than 12 Month		487,583
Held to Maturity - Fair Value		487,583
Investment Securities Continuous Unrealized Loss Position [Abstract]
Investment Securities - Amortized Cost - less than 12 month		673,857
Investment Securities - Amortized Cost - more than 12 month	61,169	121,141
Investment Securities - Amortized Cost	61,169	794,998	$ 61,169
Investment Securities - Unrealized Position - less than 12 month		7,805
Investment Securities - Unrealized Position - more than 12 month	1,051	6,480
Investment Securities - Unrealized Loss	1,051	14,285
Investment Securities - Fair Value - less than 12 month		666,052
Investment Securities - Fair Value - more than 12 month	60,118	114,661
Investment Securities - Fair Value	60,118	780,713	$ 60,118
CMO's issued by us government sponsored agencies at loss
Available For Sale Securities Continuous Unrealized Loss Position Amortized Cost [Abstract]
Available for sale - Amortized cost - less than 12 month		25,736
Available for sale - Amortized cost - more than 12 month	54,449	103,340
Total Available for Sale Amortization cost	54,449	129,076
Available For Sale Securities Continuous Unrealized Loss Position Aggregate Losses [Abstract]
Available for sale - Unrealized Loss - less than 12 month		331
Available for sale - Unrealized Loss - more than 12 month	179	2,410
Total Available for Sale Unrealized Loss	179	2,741
Available For Sale Securities Continuous Unrealized Loss Position Fair Value [Abstract]
Available for sale - Fair Value - less than 12 month		25,405
Available-for-sale, Fair Value - more than 12 month	54,270	100,930
Total Available for Sale Fair Value	54,270	126,335
Obligation of Puerto Rico Government and public instrumentalities at loss
Available For Sale Securities Continuous Unrealized Loss Position Amortized Cost [Abstract]
Available for sale - Amortized cost - more than 12 month	6,720	17,801
Total Available for Sale Amortization cost	6,720	17,801
Available For Sale Securities Continuous Unrealized Loss Position Aggregate Losses [Abstract]
Available for sale - Unrealized Loss - more than 12 month	872	4,070
Total Available for Sale Unrealized Loss	872	4,070
Available For Sale Securities Continuous Unrealized Loss Position Fair Value [Abstract]
Available-for-sale, Fair Value - more than 12 month	5,848	13,731
Total Available for Sale Fair Value	$ 5,848	13,731
FNMA and FHLMC [Member]
Available For Sale Securities Continuous Unrealized Loss Position Amortized Cost [Abstract]
Available for sale - Amortized cost - less than 12 month		149,480
Total Available for Sale Amortization cost		149,480
Available For Sale Securities Continuous Unrealized Loss Position Aggregate Losses [Abstract]
Available for sale - Unrealized Loss - less than 12 month		1,509
Total Available for Sale Unrealized Loss		1,509
Available For Sale Securities Continuous Unrealized Loss Position Fair Value [Abstract]
Available for sale - Fair Value - less than 12 month		147,971
Total Available for Sale Fair Value		147,971
Continuous Unrealized Loss Position Amortized Cost [Abstract]
Held to Maturity - Amortized cost - less than 12 month		468,487
Held to Maturity - Amortized Cost		468,487
Held To Maturity Securities, Continuous Unrealized Loss Position Aggregate Losses [Abstract]
Held to Maturity- Unrealized Loss - more than 12 month		5,865
Held to Maturity- Unrealized Loss		5,865
Held To Maturity Securities Continuous Unrealized Loss Position Fair Value [Abstract]
Held-to-Maturity - Fair Value - less than 12 Month		462,622
Held to Maturity - Fair Value		462,622
Obligation of US Government sponsored agencies at loss [Member]
Available For Sale Securities Continuous Unrealized Loss Position Amortized Cost [Abstract]
Available for sale - Amortized cost - less than 12 month		5,122
Total Available for Sale Amortization cost		5,122
Available For Sale Securities Continuous Unrealized Loss Position Aggregate Losses [Abstract]
Available for sale - Unrealized Loss - less than 12 month		29
Total Available for Sale Unrealized Loss		29
Available For Sale Securities Continuous Unrealized Loss Position Fair Value [Abstract]
Available for sale - Fair Value - less than 12 month		5,093
US Treasury Securities at loss
Continuous Unrealized Loss Position Amortized Cost [Abstract]
Held to Maturity - Amortized cost - less than 12 month		25,032
Held to Maturity - Amortized Cost		25,032
Held To Maturity Securities, Continuous Unrealized Loss Position Aggregate Losses [Abstract]
Held to Maturity- Unrealized Loss - more than 12 month		71
Held to Maturity- Unrealized Loss		71
Held To Maturity Securities Continuous Unrealized Loss Position Fair Value [Abstract]
Held-to-Maturity - Fair Value - less than 12 Month		24,961
Held to Maturity - Fair Value		$ 24,961

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Investment Securities (Other-than-temporarily Impaired Securities) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2015	Jun. 30, 2016	Jun. 30, 2015
Other Than Temporary Impairment Credit Losses Recognized In Earnings Roll Forward
Begging Balance	$ 0	$ 1,490	$ 0
Reduction from Securities Solddurinf the period	$ 0	(1,490)	0
Ending Balance		$ 0	$ 0

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Loans Receivable (Narratives) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2015	Mar. 31, 2015	Jun. 30, 2016	Jun. 30, 2015
Accounts Notes And Loans Receivable Line Items
Financing Receivable Modifications Recorded Investment Not Included In Non Accrual	$ 93,600,000		$ 97,200,000
Originated Loans Granted To Puerto Rico Government	334,600,000		327,000,000
Acquired Loans Under ASC 310-30 granted to the Puerto Rico Government	80,900,000		71,600,000
Loans And Leases Receivable Gross Carrying Amount Covered	92,300,000		76,800,000
Loans And Leases Receivable Net Reported Amount Covered	67,200,000		65,800,000
Line Of Credit Facility Maximum Borrowing Capacity to Puerto Rico Government	415,400,000		398,600,000
Credit Facilities Granted to the Puerto Rico Public Corporation			194,400,000
Total four bank syndicate revolving line of credit granted to the Government of Puerto Rico			550,000,000
Unpaid principal balance of the revolving line of credit granted to the Government of Puerto Rico	190,300,000		183,000,000
Provision for Local Government Line of Credit	29,300,000	$ 24,000,000
Allowance for Local Government Line of Credit			53,300,000
General obligations debt of municipalities secured			204,000,000
Puerto Rico Housing Finance Authority credit facilities			11,000,000
Impaired Commercial Loans	235,800,000		219,400,000
Allowance for impaired commercial loans	55,900,000		56,800,000
Impaired Mortgage Loans	90,000,000		90,900,000
Allowance For Impaired Mortgage Loans	$ 9,200,000		8,900,000
State Housing Finance Authority credit facilities change in amount			10,000,000
Interest Income Recognized for Covered Loans			4,300,000	$ 28,300,000
Change In Consumer Loans Delinquency Due To The Use Of Two Schedule Payments			19,000
Change In Auto Loans Delinquency Due To The Use Of Two Schedule Payments			5,900,000
Allowance de-recognition due to change in policy from acquired BBVAPR loans			8,500,000
Allowance de-recognition due to change in policy from loans acquired Eurobank loans			$ 72,200,000

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Loans Receivable (Composition of loan portfolio) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	$ 4,513,005	$ 4,650,527
Allowance for loan and lease losses	(162,216)	(234,131)
Loans, net of allowance for loan and lease losses, excluding loans held-for-sale.	4,350,789	4,416,396
Deferred loan cost (fees), net	4,619	4,203
Loans receivable net of deferred loan cost (fees)	4,355,408	4,420,599
Mortgage loans held-for-sale	18,209	13,614
Total loans, net	4,373,617	4,434,213
Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	116,871	7,457
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Commercial Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	4,559	7,457
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Consumer Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	35,194	38,385
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Auto Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	77,118
Originated Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	3,196,067	3,111,590
Allowance for loan and lease losses	(112,812)	(112,626)
Loans, net of allowance for loan and lease losses, excluding loans held-for-sale.	3,083,255	2,998,964
Deferred loan cost (fees), net	4,619	4,203
Loans receivable net of deferred loan cost (fees)	3,087,874	3,003,167
Total loans, net	3,087,874	3,003,167
Originated Loan [Member] | Mortgage Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	741,917	757,828
Allowance for loan and lease losses	(18,537)	(18,352)
Originated Loan [Member] | Commercial Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	1,476,613	1,441,649
Allowance for loan and lease losses	(63,144)	(64,791)
Originated Loan [Member] | Consumer Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	265,269	242,950
Allowance for loan and lease losses	(11,771)	(11,197)
Originated Loan [Member] | Auto and Leasing [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	712,268	669,163
Allowance for loan and lease losses	(19,259)	(18,261)
Acquired loans [Member] | Acquired BBVAPR loans [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	1,155,374	1,301,973
Allowance for loan and lease losses	(27,288)	(31,327)
Loans, net of allowance for loan and lease losses, excluding loans held-for-sale.	1,128,086	1,270,646
Acquired loans [Member] | Acquired BBVAPR loans [Member] | Mortgage Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	591,029	608,294
Allowance for loan and lease losses	(1,585)	(1,762)
Acquired loans [Member] | Acquired BBVAPR loans [Member] | Commercial Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	250,747	294,768
Allowance for loan and lease losses	(15,884)	(21,187)
Acquired loans [Member] | Acquired BBVAPR loans [Member] | Consumer Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	42,525	50,228
Allowance for loan and lease losses	(3,002)	(3,429)
Acquired loans [Member] | Acquired BBVAPR loans [Member] | Auto Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	194,156	260,503
Allowance for loan and lease losses	(6,817)	(4,949)
Acquired loans [Member] | Acquired BBVAPR loans [Member] | Construction Loans [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	76,917	88,180
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	116,871	152,753
Allowance for loan and lease losses	(4,487)	(5,542)
Loans, net of allowance for loan and lease losses, excluding loans held-for-sale.	112,384	147,211
Loans receivable net of deferred loan cost (fees)	112,384	147,211
Total loans, net	112,384	147,211
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Commercial Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	4,559	7,457
Allowance for loan and lease losses	(21)	(26)
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Consumer Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	35,194	38,385
Allowance for loan and lease losses	(3,002)	(3,429)
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Auto Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	77,118	106,911
Allowance for loan and lease losses	(1,464)	(2,087)
Acquired loans [Member] | Acquired BBVAPR Accounted under ASC 310-30 [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	1,038,503	1,149,220
Allowance for loan and lease losses	(22,801)	(25,785)
Loans, net of allowance for loan and lease losses, excluding loans held-for-sale.	1,015,702	1,123,435
Loans receivable net of deferred loan cost (fees)	1,015,702	1,123,435
Total loans, net	1,015,702	1,123,435
Acquired loans [Member] | Acquired BBVAPR Accounted under ASC 310-30 [Member] | Mortgage Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	591,029	608,294
Allowance for loan and lease losses	(1,585)	(1,762)
Acquired loans [Member] | Acquired BBVAPR Accounted under ASC 310-30 [Member] | Commercial Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	246,188	287,311
Allowance for loan and lease losses	(15,863)	(21,161)
Acquired loans [Member] | Acquired BBVAPR Accounted under ASC 310-30 [Member] | Consumer Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	7,331	11,843
Acquired loans [Member] | Acquired BBVAPR Accounted under ASC 310-30 [Member] | Auto Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	117,038	153,592
Allowance for loan and lease losses	(5,353)	(2,862)
Acquired loans [Member] | Acquired BBVAPR Accounted under ASC 310-30 [Member] | Construction Loans [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	76,917	88,180
Acquired loans [Member] | Eurobank Acquired Loans
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	161,564	236,964
Allowance for loan and lease losses	(22,116)	(90,178)
Loans, net of allowance for loan and lease losses, excluding loans held-for-sale.	139,448	146,786
Loans receivable net of deferred loan cost (fees)	139,448	146,786
Total loans, net	139,448	146,786
Acquired loans [Member] | Eurobank Acquired Loans | Commercial Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	83,377	142,377
Acquired loans [Member] | Eurobank Acquired Loans | Consumer Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	1,410	2,314
Allowance for loan and lease losses	(4)	(243)
Acquired loans [Member] | Eurobank Acquired Loans | Loans secured by 1-4 family residential properties, covered [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount	76,777	92,273
Allowance for loan and lease losses	(11,016)	(22,570)
Acquired loans [Member] | Eurobank Acquired Loans | Commercial and Other Construction Loan [Member]
Loans And Leases Receivable Net Reported Amount Covered And Not Covered [Abstract]
Allowance for loan and lease losses	$ (11,096)	$ (67,365)

XML

Loans Receivable (Aging of recorded investment in gross loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 4,513,005	$ 4,650,527
Originated Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	62,467	70,660
60 - 89 Days Past Due	43,191	44,483
Greater than 90 Days Past Due	95,008	100,854
Total Past Due	200,666	215,997
Current but Non-Accrual Loans	195,300	201,991
Current	2,800,101	2,693,602
Total Loans	3,196,067	3,111,590
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	5,112	3,825
Originated Loan [Member] | Mortgage Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	12,596	11,751
60 - 89 Days Past Due	20,503	24,339
Greater than 90 Days Past Due	71,179	74,841
Total Past Due	104,278	110,931
Current but Non-Accrual Loans	4,252	5,964
Current	633,387	640,933
Total Loans	741,917	757,828
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	5,112	3,825
Originated Loan [Member] | Traditional loan
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	2,698	1,793
60 - 89 Days Past Due	12,991	16,475
Greater than 90 Days Past Due	41,855	46,823
Total Past Due	57,544	65,091
Current but Non-Accrual Loans	383	358
Current	544,961	552,556
Total Loans	602,888	618,005
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	1,342	742
Originated Loan [Member] | Originated Up To The Year 2002 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	260	80
60 - 89 Days Past Due	2,024	2,217
Greater than 90 Days Past Due	2,973	3,889
Total Past Due	5,257	6,186
Current but Non-Accrual Loans	0	41
Current	48,801	51,562
Total Loans	54,058	57,789
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	227	144
Originated Loan [Member] | Originated In The Years 2003 And 2004 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	343	251
60 - 89 Days Past Due	3,936	5,036
Greater than 90 Days Past Due	6,201	5,536
Total Past Due	10,480	10,823
Current but Non-Accrual Loans	65	0
Current	84,208	88,623
Total Loans	94,753	99,446
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Originated In The Year 2005 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	79
60 - 89 Days Past Due	1,878	2,553
Greater than 90 Days Past Due	3,826	3,549
Total Past Due	5,704	6,181
Current but Non-Accrual Loans	64	0
Current	46,293	48,040
Total Loans	52,061	54,221
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Originated In The Year 2006 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	743	551
60 - 89 Days Past Due	2,243	2,878
Greater than 90 Days Past Due	6,741	7,934
Total Past Due	9,727	11,363
Current but Non-Accrual Loans	50	176
Current	64,109	66,864
Total Loans	73,886	78,403
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Originated In The Years 2007 2008 And 2009 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	854	170
60 - 89 Days Past Due	1,414	2,053
Greater than 90 Days Past Due	11,793	14,733
Total Past Due	14,061	16,956
Current but Non-Accrual Loans	0	0
Current	69,957	74,590
Total Loans	84,018	91,546
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	699	526
Originated Loan [Member] | Originated In The Years 2010 2011 2012 2013 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	498	662
60 - 89 Days Past Due	1,307	1,673
Greater than 90 Days Past Due	9,420	10,519
Total Past Due	11,225	12,854
Current but Non-Accrual Loans	142	141
Current	133,384	137,749
Total Loans	144,751	150,744
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	416	72
Originated Loan [Member] | Originated In Years 2014, 2015 and 2016 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	189	65
Greater than 90 Days Past Due	901	663
Total Past Due	1,090	728
Current but Non-Accrual Loans	62	0
Current	98,209	85,128
Total Loans	99,361	85,856
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | NonTraditional Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	938	977
Greater than 90 Days Past Due	5,217	5,079
Total Past Due	6,155	6,056
Current but Non-Accrual Loans	12	13
Current	20,028	23,483
Total Loans	26,195	29,552
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Loss Mitigation Program [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	9,898	9,958
60 - 89 Days Past Due	6,574	6,887
Greater than 90 Days Past Due	15,738	14,930
Total Past Due	32,210	31,775
Current but Non-Accrual Loans	3,857	5,593
Current	68,014	64,548
Total Loans	104,081	101,916
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	3,770	3,083
Originated Loan [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
Greater than 90 Days Past Due	0	64
Total Past Due	0	64
Current but Non-Accrual Loans	0	0
Current	384	346
Total Loans	384	410
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [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
Greater than 90 Days Past Due	8,369	7,945
Total Past Due	8,369	7,945
Current but Non-Accrual Loans	0	0
Current	0	0
Total Loans	8,369	7,945
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Commercial Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	3,005	2,593
60 - 89 Days Past Due	1,918	1,868
Greater than 90 Days Past Due	15,082	16,677
Total Past Due	20,005	21,138
Current but Non-Accrual Loans	190,158	195,545
Current	1,266,450	1,224,966
Total Loans	1,476,613	1,441,649
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	96	2,073
60 - 89 Days Past Due	1,351	1,178
Greater than 90 Days Past Due	14,460	16,034
Total Past Due	15,907	19,285
Current but Non-Accrual Loans	5,582	2,907
Current	722,337	706,764
Total Loans	743,826	728,956
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [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
Greater than 90 Days Past Due	0	0
Total Past Due	0	0
Current but Non-Accrual Loans	0	0
Current	230,296	227,557
Total Loans	230,296	227,557
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Institutional Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	213
60 - 89 Days Past Due	0	0
Greater than 90 Days Past Due	0	0
Total Past Due	0	213
Current but Non-Accrual Loans	0	0
Current	27,838	33,594
Total Loans	27,838	33,807
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Middle Market Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	1,174
60 - 89 Days Past Due	125	712
Greater than 90 Days Past Due	8,589	9,113
Total Past Due	8,714	10,999
Current but Non-Accrual Loans	2,255	1,730
Current	209,127	194,219
Total Loans	220,096	206,948
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Retail Commercial Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	96	686
60 - 89 Days Past Due	1,226	466
Greater than 90 Days Past Due	5,871	6,921
Total Past Due	7,193	8,073
Current but Non-Accrual Loans	3,327	1,177
Current	236,171	231,840
Total Loans	246,691	241,090
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [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
Greater than 90 Days Past Due	0	0
Total Past Due	0	0
Current but Non-Accrual Loans	0	0
Current	2,826	2,892
Total Loans	2,826	2,892
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [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
Greater than 90 Days Past Due	0	0
Total Past Due	0	0
Current but Non-Accrual Loans	0	0
Current	16,079	16,662
Total Loans	16,079	16,662
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Other Commercial and Industrial[Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	2,909	520
60 - 89 Days Past Due	567	690
Greater than 90 Days Past Due	622	643
Total Past Due	4,098	1,853
Current but Non-Accrual Loans	184,576	192,638
Current	544,113	518,202
Total Loans	732,787	712,693
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Corporate Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
Greater than 90 Days Past Due	0	0
Total Past Due	0	0
Current but Non-Accrual Loans	0	0
Current	140,192	108,582
Total Loans	140,192	108,582
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Institutional Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
Greater than 90 Days Past Due	0	0
Total Past Due	0	0
Current but Non-Accrual Loans	183,020	190,290
Current	193,258	190,695
Total Loans	376,278	380,985
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Middle Market Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	2,007	0
60 - 89 Days Past Due	0	0
Greater than 90 Days Past Due	0	0
Total Past Due	2,007	0
Current but Non-Accrual Loans	1,421	1,565
Current	102,112	105,748
Total Loans	105,540	107,313
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Retail Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	896	282
60 - 89 Days Past Due	529	639
Greater than 90 Days Past Due	582	604
Total Past Due	2,007	1,525
Current but Non-Accrual Loans	135	783
Current	74,823	75,489
Total Loans	76,965	77,797
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Floor Plan Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	6	238
60 - 89 Days Past Due	38	51
Greater than 90 Days Past Due	40	39
Total Past Due	84	328
Current but Non-Accrual Loans	0	0
Current	33,728	37,688
Total Loans	33,812	38,016
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	2,433	2,750
60 - 89 Days Past Due	1,332	1,378
Greater than 90 Days Past Due	1,425	1,043
Total Past Due	5,190	5,171
Current but Non-Accrual Loans	875	433
Current	259,204	237,346
Total Loans	265,269	242,950
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Credit Cards [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	459	449
60 - 89 Days Past Due	177	182
Greater than 90 Days Past Due	432	369
Total Past Due	1,068	1,000
Current but Non-Accrual Loans	0	0
Current	23,809	21,766
Total Loans	24,877	22,766
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	15	24
60 - 89 Days Past Due	1	0
Greater than 90 Days Past Due	0	0
Total Past Due	16	24
Current but Non-Accrual Loans	0	0
Current	204	166
Total Loans	220	190
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Unsecured personal lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	42	74
60 - 89 Days Past Due	14	0
Greater than 90 Days Past Due	94	45
Total Past Due	150	119
Current but Non-Accrual Loans	0	19
Current	2,281	2,106
Total Loans	2,431	2,244
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Unsecured personal loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	1,854	2,078
60 - 89 Days Past Due	1,137	1,179
Greater than 90 Days Past Due	898	627
Total Past Due	3,889	3,884
Current but Non-Accrual Loans	875	414
Current	216,884	196,858
Total Loans	221,648	201,156
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Cash collateral personal loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	63	125
60 - 89 Days Past Due	3	17
Greater than 90 Days Past Due	1	2
Total Past Due	67	144
Current but Non-Accrual Loans	0	0
Current	16,026	16,450
Total Loans	16,093	16,594
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Originated Loan [Member] | Auto and Leasing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	44,433	53,566
60 - 89 Days Past Due	19,438	16,898
Greater than 90 Days Past Due	7,322	8,293
Total Past Due	71,193	78,757
Current but Non-Accrual Loans	15	49
Current	641,060	590,357
Total Loans	712,268	669,163
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	5,972	8,683
60 - 89 Days Past Due	2,517	2,721
Greater than 90 Days Past Due	2,096	2,246
Total Past Due	10,585	13,650
Current but Non-Accrual Loans	0	0
Current	106,286	139,103
Total Loans	116,871	152,753
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Commercial Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	37	186
60 - 89 Days Past Due	17	29
Greater than 90 Days Past Due	770	880
Total Past Due	824	1,095
Current but Non-Accrual Loans	0	0
Current	3,735	6,362
Total Loans	4,559	7,457
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | 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
Greater than 90 Days Past Due	643	695
Total Past Due	643	695
Current but Non-Accrual Loans	0	0
Current	2,309	2,422
Total Loans	2,952	3,117
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Retail 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
Greater than 90 Days Past Due	197	228
Total Past Due	197	228
Current but Non-Accrual Loans	0	0
Current	0	0
Total Loans	197	228
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [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
Greater than 90 Days Past Due	446	467
Total Past Due	446	467
Current but Non-Accrual Loans	0	0
Current	2,309	2,422
Total Loans	2,755	2,889
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Other Commercial and Industrial[Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	37	186
60 - 89 Days Past Due	17	29
Greater than 90 Days Past Due	127	185
Total Past Due	181	400
Current but Non-Accrual Loans	0	0
Current	1,426	3,940
Total Loans	1,607	4,340
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Retail Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	37	186
60 - 89 Days Past Due	17	29
Greater than 90 Days Past Due	120	178
Total Past Due	174	393
Current but Non-Accrual Loans	0	0
Current	1,426	3,331
Total Loans	1,600	3,724
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Floor Plan Other Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
Greater than 90 Days Past Due	7	7
Total Past Due	7	7
Current but Non-Accrual Loans	0	0
Current	0	609
Total Loans	7	616
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	847	944
60 - 89 Days Past Due	304	413
Greater than 90 Days Past Due	764	535
Total Past Due	1,915	1,892
Current but Non-Accrual Loans	0	0
Current	33,279	36,493
Total Loans	35,194	38,385
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Credit Cards [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	731	930
60 - 89 Days Past Due	290	384
Greater than 90 Days Past Due	704	489
Total Past Due	1,725	1,803
Current but Non-Accrual Loans	0	0
Current	30,573	33,414
Total Loans	32,298	35,217
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Unsecured personal loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	116	14
60 - 89 Days Past Due	14	29
Greater than 90 Days Past Due	60	46
Total Past Due	190	89
Current but Non-Accrual Loans	0	0
Current	2,706	3,079
Total Loans	2,896	3,168
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	0	0
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Auto Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30 - 59 Days Past Due	5,088	7,553
60 - 89 Days Past Due	2,196	2,279
Greater than 90 Days Past Due	562	831
Total Past Due	7,846	10,663
Current but Non-Accrual Loans	0	0
Current	69,272	96,248
Total Loans	77,118	106,911
Financing Receivable Recorded Investment 90 Days Past Due And Stil lAccruing	$ 0	$ 0

XML

Loans Receivable (BBVAPR Acquired Loan 310-30 carrying amounts) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts Notes And Loans Receivable Line Items
Financing Receivable Acquired With Deteriorated Credit Quality	$ 1,788,121	$ 1,945,098
Non-acretable discount	394,500	434,190
Cash expected to be collected	1,393,621	1,510,908
Accretable Yield	355,118	361,688
Carrying amount, gross	1,038,503	1,149,220
Allowance for loan and lease losses	22,801	25,785
Carrying amount, net	$ 1,015,702	$ 1,123,435

XML

Loans Receivable (Accretable yield and non-accretable discount activity) (Details) - Acquired under ASC 310-30 Non-Covered Loans [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	$ 340,663	$ 414,030	$ 361,688	$ 445,946
Accretion Accretable	19,359	28,003	40,523	59,473
Change in expected cash flow	3,283	33,562	3,612	33,562
Transfer from (to) non-accretable discount	30,531	(7,541)	30,341	(7,987)
Balance at end of period	355,118	412,048	355,118	412,048
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	428,976	450,511	394,500	456,627
Change in actual and expected losses	(3,945)	(8,135)	(9,349)	(14,697)
Transfer (to) from accretable yield	(30,531)	7,541	(30,341)	7,987
Balance at end of period	394,500	449,917	394,500	449,917
Mortgage Loan [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	260,557	284,612	268,794	298,364
Accretion Accretable	8,294	8,813	16,601	17,800
Change in expected cash flow	0	0	0	0
Transfer from (to) non-accretable discount	31,560	81	31,630	(4,684)
Balance at end of period	283,823	275,880	283,823	275,880
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	370,155	392,609	336,153	389,839
Change in actual and expected losses	(2,442)	(3,421)	(6,989)	(5,416)
Transfer (to) from accretable yield	(31,560)	(81)	(31,630)	4,684
Balance at end of period	336,153	389,107	336,153	389,107
Commercial Loan [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	40,102	57,330	45,411	61,196
Accretion Accretable	5,272	9,597	11,111	20,356
Change in expected cash flow	3,062	23,695	3,190	23,695
Transfer from (to) non-accretable discount	(833)	135	(431)	7,028
Balance at end of period	37,059	71,563	37,059	71,563
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	10,716	15,826	10,582	23,069
Change in actual and expected losses	(967)	(4,921)	(1,630)	(5,271)
Transfer (to) from accretable yield	833	(135)	431	(7,028)
Balance at end of period	10,582	10,770	10,582	10,770
Construction Loans [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	17,156	19,390	19,615	25,829
Accretion Accretable	1,307	2,143	3,176	5,953
Change in expected cash flow	(408)	9,867	(208)	9,867
Transfer from (to) non-accretable discount	(193)	(2,501)	(983)	(5,130)
Balance at end of period	15,248	24,613	15,248	24,613
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	7,432	3,957	7,419	3,486
Change in actual and expected losses	(206)	536	(328)	(1,622)
Transfer (to) from accretable yield	193	2,501	983	5,130
Balance at end of period	7,419	6,994	7,419	6,994
Auto Loan [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	17,587	47,097	21,578	53,998
Accretion Accretable	3,616	6,163	7,827	13,151
Change in expected cash flow	630	0	631	0
Transfer from (to) non-accretable discount	(498)	(9,403)	(279)	(9,316)
Balance at end of period	14,103	31,531	14,103	31,531
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	21,938	14,543	22,121	16,215
Change in actual and expected losses	(315)	(256)	(197)	(1,841)
Transfer (to) from accretable yield	498	9,403	279	9,316
Balance at end of period	22,121	23,690	22,121	23,690
Consumer Loan [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	5,261	5,601	6,290	6,559
Accretion Accretable	870	1,287	1,808	2,213
Change in expected cash flow	(1)	0	(1)	0
Transfer from (to) non-accretable discount	495	4,147	404	4,115
Balance at end of period	4,885	8,461	4,885	8,461
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	18,735	23,576	18,225	24,018
Change in actual and expected losses	(15)	(73)	(205)	(547)
Transfer (to) from accretable yield	(495)	(4,147)	(404)	(4,115)
Balance at end of period	$ 18,225	$ 19,356	$ 18,225	$ 19,356

XML

Loans Receivable (Eurobank Acquired Loan carrying amounts) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts Notes And Loans Receivable Line Items
Financing Receivable Acquired With Deteriorated Credit Quality	$ 1,788,121	$ 1,945,098
Non-acretable discount	394,500	434,190
Cash expected to be collected	1,393,621	1,510,908
Accretable Yield	355,118	361,688
Carrying amount, gross	1,038,503	1,149,220
Carrying amount, net	1,015,702	1,123,435
Eurobank Acquired Loans
Accounts Notes And Loans Receivable Line Items
Financing Receivable Acquired With Deteriorated Credit Quality	252,801	342,511
Non-acretable discount	11,555	21,156
Cash expected to be collected	241,246	321,355
Accretable Yield	79,682	84,391
Carrying amount, gross	161,564	236,964
Financing Receivable, Allowance for Credit Losses	22,116	90,178
Carrying amount, net	$ 139,448	$ 146,786

XML

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	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	$ 86,227	$ 116,288	$ 84,392	$ 109,859
Accretion Accretable	6,898	12,758	14,458	28,262
Change in expected cash flow	1,425		11,451	0
Transfer from (to) non-accretable discount	(1,072)	1,111	(1,703)	23,044
Balance at end of period	79,682	104,641	79,682	104,641
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	12,703	32,712	21,156	62,410
Change in actual and expected losses	(2,220)	(10,469)	(11,304)	(18,234)
Transfer (to) from accretable yield	1,072	(1,111)	1,703	(23,044)
Balance at end of period	11,555	21,132	11,555	21,132
Mortgage
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	50,787	58,332	51,954	47,636
Accretion Accretable	2,263	3,276	4,529	6,794
Change in expected cash flow	(198)		786	0
Transfer from (to) non-accretable discount	10	750	125	14,964
Balance at end of period	48,336	55,806	48,336	55,806
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	12,703	12,557	12,869	27,348
Change in actual and expected losses	(1,138)	(405)	(1,189)	(982)
Transfer (to) from accretable yield	(10)	(750)	(125)	(14,964)
Balance at end of period	11,555	11,402	11,555	11,402
Commercial and Other Construction Loan [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	33,203	33,481	26,970	37,919
Accretion Accretable	4,528	8,047	8,623	17,902
Change in expected cash flow	1,619		12,712	0
Transfer from (to) non-accretable discount	(1,152)	2,039	(1,917)	7,456
Balance at end of period	29,142	27,473	29,142	27,473
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	0	10,493	0	24,464
Change in actual and expected losses	(1,152)	(8,454)	(1,917)	(17,008)
Transfer (to) from accretable yield	1,152	(2,039)	1,917	(7,456)
Balance at end of period	0	0	0	0
Construction and development secured by family properties [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	2,237	20,806	2,255	20,753
Accretion Accretable	33	405	47	1,024
Change in expected cash flow	0		(23)	0
Transfer from (to) non-accretable discount	0	(2,052)	19	(1,380)
Balance at end of period	2,204	18,349	2,204	18,349
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	0	0	0	0
Change in actual and expected losses	0	(2,052)	19	(1,380)
Transfer (to) from accretable yield	0	2,052	(19)	1,380
Balance at end of period	0	0	0	0
Auto and Leasing [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	0	1,665	0	2,479
Accretion Accretable	2	937	2	2,329
Change in expected cash flow	(77)		(77)	0
Transfer from (to) non-accretable discount	75	375	75	953
Balance at end of period	0	1,103	0	1,103
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	0	0	0	0
Change in actual and expected losses	75	375	75	953
Transfer (to) from accretable yield	(75)	(375)	(75)	(953)
Balance at end of period	0	0	0	0
Consumer Loan [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	0	2,004	3,213	1,072
Accretion Accretable	76	93	1,261	213
Change in expected cash flow	81		(1,947)	0
Transfer from (to) non-accretable discount	(5)	(1)	(5)	1,051
Balance at end of period	0	1,910	0	1,910
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non Accretable Discount Movement Schedule [Roll Forward]
Balance at beginning of period	0	9,662	8,287	10,598
Change in actual and expected losses	(5)	67	(8,292)	183
Transfer (to) from accretable yield	5	1	5	(1,051)
Balance at end of period	$ 0	$ 9,730	$ 0	$ 9,730

XML

Loans Receivable (Investment in loans on non-accrual status) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 285,299	$ 300,119
Originated Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	283,203	297,873
Originated Loan [Member] | Mortgage Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	65,759	72,479
Originated Loan [Member] | Traditional loan
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	41,761	47,215
Originated Loan [Member] | Originated Up To The Year 2002 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	2,812	3,786
Originated Loan [Member] | Originated In The Years 2003 And 2004 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	6,359	5,737
Originated Loan [Member] | Originated In The Year 2005 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	3,889	3,627
Originated Loan [Member] | Originated In The Year 2006 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	7,135	8,189
Originated Loan [Member] | Originated In The Years 2007 2008 And 2009 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	11,292	14,625
Originated Loan [Member] | Originated In The Years 2010 2011 2012 2013 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	9,311	10,588
Originated Loan [Member] | Originated In Years 2014, 2015 and 2016 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	963	663
Originated Loan [Member] | NonTraditional Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	5,229	5,092
Originated Loan [Member] | Loss Mitigation Program [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	18,769	20,172
Originated Loan [Member] | Home equity secured personal loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	0	64
Originated Loan [Member] | Commercial Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	207,768	215,281
Originated Loan [Member] | Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	21,321	21,455
Originated Loan [Member] | Middle Market Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	10,969	12,729
Originated Loan [Member] | Retail Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	10,352	8,726
Originated Loan [Member] | Other Commercial and Industrial[Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	186,447	193,826
Originated Loan [Member] | Corporate
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	183,020	190,290
Originated Loan [Member] | Middle Market Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,421	1,565
Originated Loan [Member] | Retail Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,966	1,932
Originated Loan [Member] | Floor Plan Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	40	39
Originated Loan [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	2,339	1,631
Originated Loan [Member] | Credit Cards [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	432	369
Originated Loan [Member] | Unsecured personal lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	94	100
Originated Loan [Member] | Unsecured personal loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,812	1,146
Originated Loan [Member] | Cash collateral personal loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1	16
Originated Loan [Member] | Auto and Leasing [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	7,337	8,418
Most recent acquired loans accounted for under ASC 310-20 [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	2,096	2,246
Most recent acquired loans accounted for under ASC 310-20 [Member] | Commercial Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	770	880
Most recent acquired loans accounted for under ASC 310-20 [Member] | Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	643	695
Most recent acquired loans accounted for under ASC 310-20 [Member] | Retail Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	197	228
Most recent acquired loans accounted for under ASC 310-20 [Member] | Floor Plan Commercial Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	446	467
Most recent acquired loans accounted for under ASC 310-20 [Member] | Other Commercial and Industrial[Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	127	185
Most recent acquired loans accounted for under ASC 310-20 [Member] | Retail Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	120	178
Most recent acquired loans accounted for under ASC 310-20 [Member] | Floor Plan Other Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	7	7
Most recent acquired loans accounted for under ASC 310-20 [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	764	535
Most recent acquired loans accounted for under ASC 310-20 [Member] | Credit Cards [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	704	489
Most recent acquired loans accounted for under ASC 310-20 [Member] | Unsecured personal loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	60	46
Most recent acquired loans accounted for under ASC 310-20 [Member] | Auto Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 562	$ 831

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Loans Receivable (Recorded Investment in loans individually evaluated for impairment) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Impaired [Line Items]
Allowance for loan and lease losses	$ 162,216	$ 234,131
Originated Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	342,249	350,252
Recorded Investment	308,908	325,267
Allowance for loan and lease losses	$ 65,622	$ 65,180
Coverage	21.00%	20.00%
Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 1,450	$ 486
Recorded Investment	1,433	474
Acquired BBVAPR Accounted under ASC 310-30 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	1,030,886	1,137,377
Recorded Investment	938,505	1,017,976
Allowance for loan and lease losses	$ 22,801	$ 25,785
Coverage	2.00%	3.00%
Eurobank Acquired Loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 211,939	$ 241,305
Recorded Investment	161,564	236,964
Allowance for loan and lease losses	$ 22,116	$ 90,178
Coverage	14.00%	38.00%
Commercial impaired loans with specific allowance [Member] | Originated Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 212,876	$ 210,718
Recorded Investment	194,084	199,366
Allowance for loan and lease losses	$ 56,758	$ 55,947
Coverage	29.00%	28.00%
Residential troubled-debt restructuring impaired loans with specific allowance [Member] | Originated Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 99,145	$ 97,424
Recorded Investment	90,948	89,973
Allowance for loan and lease losses	$ 8,864	$ 9,233
Coverage	10.00%	10.00%
Commercial impaired loans with no specific allowance financing receivable | Originated Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 30,228	$ 42,110
Recorded Investment	23,876	35,928
Commercial impaired loans with no specific allowance financing receivable | Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	1,450	486
Recorded Investment	1,433	474
Mortgage impaired loan pool [Member] | Acquired BBVAPR Accounted under ASC 310-30 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	591,029	608,294
Recorded Investment	591,056	608,294
Allowance for loan and lease losses	$ 1,585	$ 1,761
Coverage	0.00%	0.00%
Commercial impaired loan pool [Member] | Acquired BBVAPR Accounted under ASC 310-30 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 246,142	$ 287,311
Recorded Investment	173,949	168,107
Allowance for loan and lease losses	$ 11,884	$ 15,455
Coverage	7.00%	9.00%
Construction impaired loan pool [Member] | Acquired BBVAPR Accounted under ASC 310-30 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 76,677	$ 88,180
Recorded Investment	56,457	87,983
Allowance for loan and lease losses	$ 3,979	$ 5,707
Coverage	7.00%	6.00%
Auto impaired loan pool. | Acquired BBVAPR Accounted under ASC 310-30 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 117,038	$ 153,592
Recorded Investment	117,043	153,592
Allowance for loan and lease losses	$ 5,353	$ 2,862
Coverage	5.00%	2.00%
Consumer impaired loan pool. | Eurobank Acquired Loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 1,252	$ 6,713
Recorded Investment	1,410	2,314
Allowance for loan and lease losses	$ 4	$ 243
Coverage	0.00%	11.00%
Loans secured by 1-4 family residential properties, covered [Member] | Eurobank Acquired Loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 95,755	$ 101,444
Recorded Investment	76,777	92,273
Allowance for loan and lease losses	$ 11,016	$ 22,570
Coverage	14.00%	24.00%
Commercial and Other Construction Loan [Member] | Eurobank Acquired Loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal	$ 114,932	$ 133,148
Recorded Investment	83,377	142,377
Allowance for loan and lease losses	$ 11,096	$ 67,365
Coverage	13.00%	47.00%

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Loans Receivable (Interest Income Recognized in loans individually evaluated for impairment) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Impaired Financing Receivable Interest Income Accrual Method [Abstract]
Total Interest Income	$ 1,030	$ 1,153	$ 2,069	$ 2,305
Impaired Financing Receivable Average Recorded Investment [Abstract]
Total Average Recorded Investment	316,134	332,916	318,658	335,074
Commercial Loan [Member] | Originated Loans [Member]
Impaired Financing Receivable Interest Income Accrual Method [Abstract]
Impaired Financing Receivable With Related Allowance Interest Income Accrual Method	75	45	150	90
Impaired Financing Receivable With No Related Allowance Interest Income Accrual Method	149	316	298	631
Impaired Financing Receivable Average Recorded Investment [Abstract]
Impaired Financing Receivable With Related Allowance Average Recorded Investment	194,759	212,414	195,777	146,144
Impaired Financing Receivable With No Related Allowance Average Recorded Investment	29,579	30,015	31,603	95,791
Commercial Loan [Member] | Most recent acquired loans accounted for under ASC 310-20 [Member]
Impaired Financing Receivable Interest Income Accrual Method [Abstract]
Impaired Financing Receivable With No Related Allowance Interest Income Accrual Method	15	11	30	21
Impaired Financing Receivable Average Recorded Investment [Abstract]
Impaired Financing Receivable With No Related Allowance Average Recorded Investment	789	1,446	628	1,923
Troubled Debt Restructuring [Member] | Originated Loans [Member]
Impaired Financing Receivable Interest Income Accrual Method [Abstract]
Impaired Financing Receivable With Related Allowance Interest Income Accrual Method	791	781	1,591	1,563
Impaired Financing Receivable Average Recorded Investment [Abstract]
Impaired Financing Receivable With Related Allowance Average Recorded Investment	$ 91,007	$ 89,041	$ 90,650	$ 91,216

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Loans Receivable (TDR Pre/Post Modifications) (Details) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2016 USD ($) number	Jun. 30, 2015 USD ($) number	Mar. 31, 2015 USD ($) number	Jun. 30, 2016 USD ($) number	Jun. 30, 2015
Mortgage Loan [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts | number	19	39	97	52
Financing Receivable Modifications Pre Modification Recorded Investment	$ 2,670	$ 4,455	$ 11,609	$ 6,628
Pre Modification Weighted Average Rate	5.69%	5.62%	4.65%	5.90%
Pre Modification Weighted Average Term	372 months	330 months		365 months	348 months
Financing Receivable Modifications Post Modification Recorded Investment	$ 2,670	$ 4,455	$ 11,594	$ 7,525
Post Modification Weighted Average Rate	4.54%	4.21%	4.13%	4.73%
Post Modification Weighted Average Term	494 months	330 months		493 months	349 months
Commercial Loan [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts | number	6	1	4	8
Financing Receivable Modifications Pre Modification Recorded Investment	$ 668	$ 29	$ 4,533	$ 1,323
Pre Modification Weighted Average Rate	6.65%	7.25%	6.83%	6.73%
Pre Modification Weighted Average Term	65 months	44 months		53 months
Financing Receivable Modifications Post Modification Recorded Investment	$ 668	$ 29	$ 4,533	$ 1,324
Post Modification Weighted Average Rate	5.91%	6.50%	7.00%	6.31%
Post Modification Weighted Average Term	86 months	60 months		61 months	141 months
Consumer Loan [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts | number	26	21	32	47
Financing Receivable Modifications Pre Modification Recorded Investment	$ 364	$ 250	$ 396	$ 556
Pre Modification Weighted Average Rate	12.73%	14.40%	14.50%	13.27%
Pre Modification Weighted Average Term	75 months	71 months		75 months	72 months
Financing Receivable Modifications Post Modification Recorded Investment	$ 372	$ 259	$ 440	$ 603
Post Modification Weighted Average Rate	10.20%	13.87%	14.25%	10.56%
Post Modification Weighted Average Term	70 months	69 months		71 months	68 months

XML

Loans Receivable (Troubled debt restructurings, Rolling Twelve Months) (Details) $ in Thousands	12 Months Ended
	Jun. 30, 2016 USD ($) number	Jun. 30, 2015 USD ($) number
Mortgage Loan [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | number	84	60
Recored Investment | $	$ 9,869	$ 6,911
Consumer Loan [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | number	7	4
Recored Investment | $	$ 134	$ 72
Auto [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | number	1	0
Recored Investment | $	$ 17	$ 0

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Loans Receivable (Credit Quality Indicator of loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 4,513,005	$ 4,650,527
Financing Receivable, Individually Evaluated for Impairment	219,393	235,767
Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,196,067	3,111,590
Doubtful	0
Financing Receivable, Individually Evaluated for Impairment	308,908	325,267
Commercial Secured [Member] | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	743,826	728,956
Pass	671,931	657,623
Special Mention	40,149	32,780
Substandard	4,502	5,097
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	27,244	33,456
Commercial Secured [Member] | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,952	3,117
Pass	953	602
Special Mention	376	1,820
Substandard	197	228
Doubtful		0
Financing Receivable, Individually Evaluated for Impairment	1,426	467
Corporate | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	230,296	227,557
Pass	215,312	212,410
Special Mention	14,984	15,147
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Institutional | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	27,838	33,807
Pass	26,200	25,907
Special Mention	0	0
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	1,638	7,900
Middle Market | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	220,096	206,948
Pass	188,700	181,916
Special Mention	17,697	9,697
Substandard	374	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	13,325	15,335
Retail | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	246,691	241,090
Pass	222,814	217,836
Special Mention	7,468	7,936
Substandard	4,128	5,097
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	12,281	10,221
Retail | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	197	228
Pass	0	0
Special Mention	0	0
Substandard	197	228
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Floor Plan | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,826	2,892
Pass	2,826	2,892
Special Mention	0	0
Substandard	0	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	2,755	2,889
Pass	953	602
Special Mention	376	1,820
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	1,426	467
Real Estate | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	16,079	16,662
Pass	16,079	16,662
Special Mention	0	0
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Other commercial and industrial [Member] | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	732,787	712,693
Pass	529,375	498,428
Special Mention	11,455	11,243
Substandard	1,241	1,184
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	190,716	201,838
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	1,607	4,340
Pass	1,527	4,246
Special Mention	0	0
Substandard	73	87
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	7	7
Corporate | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	140,192	108,582
Pass	140,192	100,826
Special Mention	0	0
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	7,756
Institutional | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	376,278	380,985
Pass	193,258	190,695
Special Mention	0	0
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	183,020	190,290
Middle Market | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	105,540	107,313
Pass	95,946	97,288
Special Mention	5,142	8,052
Substandard	181	0
Doubtful		0
Financing Receivable, Individually Evaluated for Impairment	4,271	1,973
Retail | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	76,965	77,797
Pass	71,933	73,757
Special Mention	898	1,076
Substandard	979	1,184
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	3,155	1,780
Retail | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,600	3,724
Pass	1,527	3,637
Special Mention	0	0
Substandard	73	87
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
Floor Plan | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	33,812	38,016
Pass	28,046	35,862
Special Mention	5,415	2,115
Substandard	81	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	270	39
Floor Plan | Commercial Acquired loans (under ASC 310-20) [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	7	616
Pass	0	609
Special Mention	0	0
Substandard	0	0
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	7	7
Commercial and Construction | 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	1,481,172	1,449,106
Pass	1,203,786	1,160,899
Special Mention	51,980	45,843
Substandard	6,013	6,596
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	219,393	235,768
Total Commercial subject to risk rating [Member] | Originated Loan [Member]
Credit Quality Indicators [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,476,613	1,441,649
Pass	1,201,306	1,156,051
Special Mention	51,604	44,023
Substandard	5,743	6,281
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	217,960	235,294
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	4,559	7,457
Pass	2,480	4,848
Special Mention	376	1,820
Substandard	270	315
Doubtful	0	0
Financing Receivable, Individually Evaluated for Impairment	$ 1,433	$ 474

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Loans Receivable (Risk category of gross loans not subject to risk rating ) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 4,513,005	$ 4,650,527
Financing Receivable, Individually Evaluated for Impairment	219,393	235,767
Loans, Not Subject To Risk Ratings [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,831,766	1,815,237
0 - 29 Days Past Due	1,577,925	1,541,282
30 - 59 Days Past Due	56,716	70,443
60 - 89 Days Past Due	38,348	39,648
90-119 Days Past Due	14,678	14,727
120 - 364 Days Past Due	18,498	22,412
365+ Days Past Due	34,653	36,752
Financing Receivable, Individually Evaluated for Impairment	90,948	89,973
Originated loans, not subject to risk rating [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,719,454	1,669,941
0 - 29 Days Past Due	1,475,373	1,408,542
30 - 59 Days Past Due	50,781	61,946
60 - 89 Days Past Due	35,848	36,956
90-119 Days Past Due	13,950	13,917
120 - 364 Days Past Due	17,901	21,855
365+ Days Past Due	34,653	36,752
Financing Receivable, Individually Evaluated for Impairment	90,948	89,973
Originated loans, not subject to risk rating [Member] | Mortgage Loan [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	741,917	757,828
0 - 29 Days Past Due	574,219	580,214
30 - 59 Days Past Due	3,915	5,642
60 - 89 Days Past Due	15,078	18,811
90-119 Days Past Due	7,335	7,390
120 - 364 Days Past Due	15,769	19,046
365+ Days Past Due	34,653	36,752
Financing Receivable, Individually Evaluated for Impairment	90,948	89,973
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	602,888	618,005
0 - 29 Days Past Due	534,930	540,340
30 - 59 Days Past Due	2,223	1,469
60 - 89 Days Past Due	12,759	15,857
90-119 Days Past Due	4,333	4,518
120 - 364 Days Past Due	9,236	11,055
365+ Days Past Due	24,992	29,535
Financing Receivable, Individually Evaluated for Impairment	14,415	15,231
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	54,058	57,789
0 - 29 Days Past Due	48,163	50,912
30 - 59 Days Past Due	259	82
60 - 89 Days Past Due	2,023	2,218
90-119 Days Past Due	527	530
120 - 364 Days Past Due	1,153	1,504
365+ Days Past Due	1,292	1,858
Financing Receivable, Individually Evaluated for Impairment	641	685
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	94,753	99,446
0 - 29 Days Past Due	82,651	87,060
30 - 59 Days Past Due	343	251
60 - 89 Days Past Due	3,936	4,867
90-119 Days Past Due	1,864	1,261
120 - 364 Days Past Due	1,859	1,353
365+ Days Past Due	2,312	2,921
Financing Receivable, Individually Evaluated for Impairment	1,788	1,733
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	52,061	54,221
0 - 29 Days Past Due	45,538	47,197
30 - 59 Days Past Due	0	79
60 - 89 Days Past Due	1,878	2,553
90-119 Days Past Due	497	292
120 - 364 Days Past Due	918	1,068
365+ Days Past Due	2,410	2,189
Financing Receivable, Individually Evaluated for Impairment	820	843
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	73,886	78,403
0 - 29 Days Past Due	60,860	63,659
30 - 59 Days Past Due	511	318
60 - 89 Days Past Due	2,244	2,878
90-119 Days Past Due	554	1,168
120 - 364 Days Past Due	1,603	1,895
365+ Days Past Due	4,584	4,871
Financing Receivable, Individually Evaluated for Impairment	3,530	3,614
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	84,018	91,546
0 - 29 Days Past Due	66,997	71,439
30 - 59 Days Past Due	703	170
60 - 89 Days Past Due	1,286	1,665
90-119 Days Past Due	569	685
120 - 364 Days Past Due	1,724	2,972
365+ Days Past Due	8,898	10,725
Financing Receivable, Individually Evaluated for Impairment	3,841	3,890
Originated loans, not subject to risk rating [Member] | Originated In The Years 2010 2011 2012 2013 [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	144,751	150,744
0 - 29 Days Past Due	132,451	134,945
30 - 59 Days Past Due	407	569
60 - 89 Days Past Due	1,203	1,611
90-119 Days Past Due	182	434
120 - 364 Days Past Due	1,581	1,982
365+ Days Past Due	5,132	6,737
Financing Receivable, Individually Evaluated for Impairment	3,795	4,466
Originated loans, not subject to risk rating [Member] | Originated In Years 2014, 2015 and 2016 [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	99,361	85,856
0 - 29 Days Past Due	98,270	85,128
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	189	65
90-119 Days Past Due	140	148
120 - 364 Days Past Due	398	281
365+ Days Past Due	364	234
Financing Receivable, Individually Evaluated for Impairment	0	0
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	26,195	29,552
0 - 29 Days Past Due	20,040	23,497
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	938	977
90-119 Days Past Due	564	552
120 - 364 Days Past Due	1,999	2,621
365+ Days Past Due	2,654	1,905
Financing Receivable, Individually Evaluated for Impairment	0	0
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	104,081	101,916
0 - 29 Days Past Due	18,865	16,031
30 - 59 Days Past Due	1,692	4,173
60 - 89 Days Past Due	1,381	1,977
90-119 Days Past Due	940	727
120 - 364 Days Past Due	1,306	1,728
365+ Days Past Due	3,364	2,538
Financing Receivable, Individually Evaluated for Impairment	76,533	74,742
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	384	410
0 - 29 Days Past Due	384	346
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	64
365+ Days Past Due	0	0
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	8,369	7,945
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	1,498	1,593
120 - 364 Days Past Due	3,228	3,578
365+ Days Past Due	3,643	2,774
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	265,269	242,950
0 - 29 Days Past Due	260,079	237,846
30 - 59 Days Past Due	2,433	2,755
60 - 89 Days Past Due	1,332	1,306
90-119 Days Past Due	1,123	819
120 - 364 Days Past Due	302	224
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
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	24,877	22,766
0 - 29 Days Past Due	23,809	21,766
30 - 59 Days Past Due	459	449
60 - 89 Days Past Due	177	182
90-119 Days Past Due	214	179
120 - 364 Days Past Due	218	190
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	220	190
0 - 29 Days Past Due	204	166
30 - 59 Days Past Due	15	24
60 - 89 Days Past Due	1	0
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	2,431	2,244
0 - 29 Days Past Due	2,281	2,125
30 - 59 Days Past Due	42	74
60 - 89 Days Past Due	14	0
90-119 Days Past Due	11	17
120 - 364 Days Past Due	83	28
365+ Days Past Due	0	0
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	221,648	201,156
0 - 29 Days Past Due	217,759	197,339
30 - 59 Days Past Due	1,854	2,083
60 - 89 Days Past Due	1,137	1,107
90-119 Days Past Due	898	621
120 - 364 Days Past Due	0	6
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	0	0
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	16,093	16,594
0 - 29 Days Past Due	16,026	16,450
30 - 59 Days Past Due	63	125
60 - 89 Days Past Due	3	17
90-119 Days Past Due	0	2
120 - 364 Days Past Due	1	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 [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	712,268	669,163
0 - 29 Days Past Due	641,075	590,482
30 - 59 Days Past Due	44,433	53,549
60 - 89 Days Past Due	19,438	16,839
90-119 Days Past Due	5,492	5,708
120 - 364 Days Past Due	1,830	2,585
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	112,312	145,296
0 - 29 Days Past Due	102,552	132,740
30 - 59 Days Past Due	5,935	8,497
60 - 89 Days Past Due	2,500	2,692
90-119 Days Past Due	728	810
120 - 364 Days Past Due	597	557
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	35,194	38,385
0 - 29 Days Past Due	33,280	36,493
30 - 59 Days Past Due	847	944
60 - 89 Days Past Due	304	413
90-119 Days Past Due	316	187
120 - 364 Days Past Due	447	348
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	32,298	35,217
0 - 29 Days Past Due	30,573	33,414
30 - 59 Days Past Due	731	930
60 - 89 Days Past Due	290	384
90-119 Days Past Due	290	186
120 - 364 Days Past Due	414	303
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	2,896	3,168
0 - 29 Days Past Due	2,707	3,079
30 - 59 Days Past Due	116	14
60 - 89 Days Past Due	14	29
90-119 Days Past Due	26	1
120 - 364 Days Past Due	33	45
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] | Auto Loan [Member]
Not Subject To Risk Rating [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	77,118	106,911
0 - 29 Days Past Due	69,272	96,247
30 - 59 Days Past Due	5,088	7,553
60 - 89 Days Past Due	2,196	2,279
90-119 Days Past Due	412	623
120 - 364 Days Past Due	150	209
365+ Days Past Due	0	0
Financing Receivable, Individually Evaluated for Impairment	$ 0	$ 0

XML

Allowance for Loan and Lease Losses (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Loans And Leases Receivable Allowance, Covered	$ 11,000,000		$ 11,000,000		$ 22,600,000
Provision (recapture) for Loan Losses, Covered	$ 237,000	$ (105,000)	184,000	$ 4,700,000
Allowance de-recognition due to change in policy from most recent acquisition			8,500,000
Allowance de-recognition due to change in policy from loans acquired acquisition			$ 72,200,000

XML

Allowance for Loan and Lease Losses (Composition of the Company's allowance for loan and lease losses) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	$ 162,216	$ 234,131
Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	112,812	112,626
Originated Loan [Member] | Mortgage Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	18,537	18,352
Originated Loan [Member] | Commercial Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	63,144	64,791
Originated Loan [Member] | Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	11,771	11,197
Originated Loan [Member] | Auto and Leasing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	19,259	18,261
Originated Loan [Member] | Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	101	25
Acquired loans [Member] | Acquired BBVAPR loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	27,288	31,327
Acquired loans [Member] | Acquired BBVAPR loans [Member] | Mortgage Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	1,585	1,762
Acquired loans [Member] | Acquired BBVAPR loans [Member] | Commercial Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	15,884	21,187
Acquired loans [Member] | Acquired BBVAPR loans [Member] | Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	3,002	3,429
Acquired loans [Member] | Acquired BBVAPR loans [Member] | Auto Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	6,817	4,949
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	4,487	5,542
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Commercial Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	21	26
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	3,002	3,429
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Auto Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	1,464	2,087
Acquired loans [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	22,801	25,785
Acquired loans [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member] | Mortgage Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	1,585	1,762
Acquired loans [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member] | Commercial Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	15,863	21,161
Acquired loans [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member] | Auto Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	5,353	2,862
Acquired loans [Member] | Eurobank Acquired Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	22,116	90,178
Acquired loans [Member] | Eurobank Acquired Loans | Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	4	243
Acquired loans [Member] | Eurobank Acquired Loans | Loans secured by 1-4 family residential properties, covered [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	11,016	22,570
Acquired loans [Member] | Eurobank Acquired Loans | Commercial and Other Construction Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	$ 11,096	$ 67,365

XML

Allowance for Loan and Lease Losses (Allowance for loan and lease losses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Provision For Loan And Lease Losses	$ 14,445	$ 15,539	$ 28,234	$ 57,732
Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period			5,542
Balance at end of period	4,487		4,487
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Commercial Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period			26
Balance at end of period	21		21
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period			3,429
Balance at end of period	3,002		3,002
Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Unallocated Financing Receivables
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period			0
Balance at end of period	0		0
Acquired BBVAPR accounted under ASC 310-30 [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at end of period	22,801		22,801
Acquired BBVAPR accounted under ASC 310-30 [Member] | Mortgage Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at end of period	1,585		1,585
Acquired BBVAPR accounted under ASC 310-30 [Member] | Commercial Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at end of period	15,863		15,863
Acquired BBVAPR accounted under ASC 310-30 [Member] | Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at end of period	0		0
Acquired BBVAPR accounted under ASC 310-30 [Member] | Auto Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at end of period	5,353		5,353
Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	113,238	76,759	112,626	51,439
Charge-offs	13,118	11,824	26,480	24,042
Recoveries	3,640	4,101	6,954	7,728
Provision For Loan And Lease Losses	9,052	9,953	19,712	43,864
Balance at end of period	112,812	78,989	112,812	78,989
Originated Loan [Member] | Mortgage Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	18,784	18,086	18,352	19,679
Charge-offs	1,374	1,356	3,036	2,770
Recoveries	36	67	181	67
Provision For Loan And Lease Losses	1,091	1,279	3,040	1,100
Balance at end of period	18,537	18,076	18,537	18,076
Originated Loan [Member] | Commercial Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	64,206	33,123	64,791	8,432
Charge-offs	833	497	1,844	1,489
Recoveries	228	219	316	309
Provision For Loan And Lease Losses	(457)	1,934	(119)	27,527
Balance at end of period	63,144	34,779	63,144	34,779
Originated Loan [Member] | Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	11,414	9,405	11,197	9,072
Charge-offs	2,811	2,309	5,138	3,985
Recoveries	133	390	235	543
Provision For Loan And Lease Losses	3,035	2,978	5,477	4,834
Balance at end of period	11,771	10,464	11,771	10,464
Originated Loan [Member] | Leasing
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	18,716	15,762	18,261	14,255
Charge-offs	8,100	7,662	16,462	15,798
Recoveries	3,243	3,425	6,222	6,809
Provision For Loan And Lease Losses	5,400	3,539	11,238	9,798
Balance at end of period	19,259	15,064	19,259	15,064
Originated Loan [Member] | Unallocated Financing Receivables
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	118	383	25	1
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision For Loan And Lease Losses	(17)	223	76	605
Balance at end of period	101	606	101	606
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	4,993	5,450	5,542	4,597
Charge-offs	1,596	2,357	3,152	5,006
Recoveries	542	938	1,253	1,652
Provision For Loan And Lease Losses	548	1,498	844	4,286
Balance at end of period	4,487	5,529	4,487	5,529
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Commercial Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	23	49	26	65
Charge-offs	12	16	19	16
Recoveries	8	7	40	17
Provision For Loan And Lease Losses	2	14	(26)	(12)
Balance at end of period	21	54	21	54
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	3,243	1,885	3,429	1,211
Charge-offs	1,013	1,303	1,825	2,686
Recoveries	88	429	169	563
Provision For Loan And Lease Losses	684	1,605	1,229	3,528
Balance at end of period	3,002	2,616	3,002	2,616
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Auto Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	1,727	3,516	2,087	3,321
Charge-offs	571	1,038	1,308	2,304
Recoveries	446	502	1,044	1,072
Provision For Loan And Lease Losses	(138)	(121)	(359)	770
Balance at end of period	1,464	2,859	1,464	2,859
Acquired loans [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member] | Unallocated Financing Receivables
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 Loan And Lease Losses	0	0	0	0
Balance at end of period	0	0	0	0
Acquired loans [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	27,747	14,166	25,785	13,481
Charge-offs	216		282
Provision For Loan And Lease Losses	3,814	4,193	5,842	4,878
Allowance de-recognition from new policy	(8,544)		(8,544)
Balance at end of period	22,801	18,359	22,801	18,359
Acquired loans [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member] | Mortgage Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	1,762	473	1,678	0
Charge-offs	14		14
Provision For Loan And Lease Losses	(163)	0	(79)	473
Allowance de-recognition from new policy	0		0
Balance at end of period	1,585	473	1,585	473
Acquired loans [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member] | Commercial Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	20,430	13,687	21,245	13,476
Charge-offs	0		66
Provision For Loan And Lease Losses	3,977	1,253	3,228	1,464
Allowance de-recognition from new policy	(8,544)		(8,544)
Balance at end of period	15,863	14,940	15,863	14,940
Acquired loans [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member] | Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	0	6	0	5
Charge-offs	0		0
Provision For Loan And Lease Losses	0	78	0	79
Allowance de-recognition from new policy	0		0
Balance at end of period	0	84	0	84
Acquired loans [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member] | Auto Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	5,555	0	2,862	0
Charge-offs	202		202
Provision For Loan And Lease Losses	0	2,862	2,693	2,862
Allowance de-recognition from new policy	0		0
Balance at end of period	$ 5,353	$ 2,862	$ 5,353	$ 2,862

XML

Allowance for Loan and Lease Losses (Gross Loan and Allowance for loan and lease losses) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	$ 219,393		$ 235,767
Loans and Leases Receivable, Gross, Carrying Amount	4,513,005		4,650,527
Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	4,487		5,542	$ 5,529
Financing Receivable, Allowance for Credit Losses	4,487		5,542
Financing Receivable, Individually Evaluated for Impairment	1,433		474
Financing Receivable, Collectively Evaluated for Impairment	115,438		6,983
Loans and Leases Receivable, Gross, Carrying Amount	116,871		7,457
Acquired BBVAPR accounted under ASC 310-30 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses	22,801
Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	65,622		65,180
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	47,190		47,446
Financing Receivable, Allowance for Credit Losses	112,812	$ 113,238	112,626	78,989	$ 76,759	$ 51,439
Financing Receivable, Individually Evaluated for Impairment	308,908		325,267
Financing Receivable, Collectively Evaluated for Impairment	2,887,159		2,786,323
Loans and Leases Receivable, Gross, Carrying Amount	3,196,067		3,111,590
Mortgage Loan [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses	1,585
Mortgage Loan [Member] | Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	8,864		9,233
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	9,673		9,119
Financing Receivable, Allowance for Credit Losses	18,537	18,784	18,352	18,076	18,086	19,679
Financing Receivable, Individually Evaluated for Impairment	90,948		89,973
Financing Receivable, Collectively Evaluated for Impairment	650,969		667,855
Loans and Leases Receivable, Gross, Carrying Amount	741,917		757,828
Commercial Loan [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	21		26	54
Financing Receivable, Allowance for Credit Losses	21		26
Financing Receivable, Individually Evaluated for Impairment	1,433		474
Financing Receivable, Collectively Evaluated for Impairment	3,126		6,983
Loans and Leases Receivable, Gross, Carrying Amount	4,559		7,457
Commercial Loan [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses	15,863
Commercial Loan [Member] | Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable Allowance For Credit Losses Individually Evaluated For Impairment1	56,758		55,947
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	6,386		8,844
Financing Receivable, Allowance for Credit Losses	63,144	64,206	64,791	34,779	33,123	8,432
Financing Receivable, Individually Evaluated for Impairment	217,960		235,294
Financing Receivable, Collectively Evaluated for Impairment	1,258,653		1,206,355
Loans and Leases Receivable, Gross, Carrying Amount	1,476,613		1,441,649
Consumer Loan [Member] | Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	3,002		3,429	2,616
Financing Receivable, Allowance for Credit Losses	3,002		3,429
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	35,194		38,385
Loans and Leases Receivable, Gross, Carrying Amount	35,194		38,385
Consumer Loan [Member] | Acquired BBVAPR accounted under ASC 310-30 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses	0
Consumer Loan [Member] | Originated Loan [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	11,771		11,197
Financing Receivable, Allowance for Credit Losses	11,771	11,414	11,197	10,464	9,405	9,072
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	265,269		242,950
Loans and Leases Receivable, Gross, Carrying Amount	265,269		242,950
Auotomobile Loans Portfolio Segment | Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	1,464		2,087	2,859
Financing Receivable, Allowance for Credit Losses	1,464		2,087
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	77,118		106,911
Loans and Leases Receivable, Gross, Carrying Amount	77,118		106,911
Auto and Leasing [Member] | Originated Loan [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	19,259		18,261
Financing Receivable, Allowance for Credit Losses	19,259	18,716	18,261	15,064	15,762	14,255
Financing Receivable, Individually Evaluated for Impairment	0		0
Financing Receivable, Collectively Evaluated for Impairment	712,268		669,163
Loans and Leases Receivable, Gross, Carrying Amount	712,268		669,163
Unallocated Financing Receivables | Acquired BBVAPR Accounted for under ASC 310-20 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	0		0	0
Financing Receivable, Allowance for Credit Losses	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 | Originated Loan [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	101		25
Financing Receivable, Allowance for Credit Losses	101	$ 118	25	$ 606	$ 383	$ 1
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

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Allowance for Loan and Lease Losses (Allowance for Acquired Eurobank Loan and Lease Losses) (Details) - Eurobank Acquired Loans - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Jun. 30, 2015
Loan Receivable Type
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	$ 92,293	$ 90,178
Provision for loan and lease losses, net	1,031	1,836
Charge-offs		134
FDIC shared-loss portion of provision for (recapture of) loan and lease losses, net	951	2,395
Allowance de-recognition from new policy	(72,159)	(72,159)
Balance at end of period	22,116	22,116	$ 71,452
Mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	23,961	22,570
Provision for loan and lease losses, net	237	184
Charge-offs		0
FDIC shared-loss portion of provision for (recapture of) loan and lease losses, net	951	2,395
Allowance de-recognition from new policy	(14,133)	(14,133)
Balance at end of period	11,016	11,016	17,593
Commercial and Construction
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	68,089	67,365
Provision for loan and lease losses, net	801	1,659
Charge-offs		134
FDIC shared-loss portion of provision for (recapture of) loan and lease losses, net	0	0
Allowance de-recognition from new policy	(57,794)	(57,794)
Balance at end of period	11,096	11,096	53,470
Consumer Loan [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	243	243
Provision for loan and lease losses, net	(7)	(7)
Charge-offs		0
FDIC shared-loss portion of provision for (recapture of) loan and lease losses, net	0	0
Allowance de-recognition from new policy	(232)	(232)
Balance at end of period	4	4	389
Leasing
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	0	0
Provision for loan and lease losses, net	0	0
Charge-offs		0
FDIC shared-loss portion of provision for (recapture of) loan and lease losses, net	0	0
Allowance de-recognition from new policy	0	0
Balance at end of period	$ 0	$ 0	$ 0

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FDIC Indemnification Indemnification Asset and True-up Payment Obligation (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
FDIC-Assisted Acquisition [Abstract]
Percent Of Losses Fdic Absorbs	80.00%		80.00%
Percent Of Losses Recoveries Fdic Shares	80.00%		80.00%
FDIC Assisted Transaction 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%). The estimated liability is included within accrued expenses and other liabilities in the unaudited consolidated statements of financial condition. This true-up payment obligation may increase if actual and expected losses decline. The Company measures the true-up payment obligation at fair value. The changes in fair value are included as a change in true-up payment obligation within the FDIC shared-loss expense, net, in the unaudited consolidated statements of operations.
FDIC Owed Payment			$ 1,100
FDIC indemnification asset, expense	$ 1,405	$ 22,512	$ 4,269	$ 34,733

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FDIC Indemnification Asset and True-up Payment Obligation (FDIC Indemnification Asset Roll Forward) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
FDIC Indemnification Asset [Roll Forward]
Balance	$ 20,923	$ 75,221	$ 22,599	$ 97,378
Indemnification agreements reimbursements from FDIC	(332)	(24,387)	(737)	(38,087)
Shared-loss agreements reimbursements expected from the FDIC	951	906	2,395	2,503
FDIC indemnification asset, expense	(1,405)	(22,512)	(4,269)	(34,733)
Incurred expenses to be reimbursed under shared-loss agreements	(1,711)	(6,524)	(1,562)	(4,357)
Balance	18,426	22,704	18,426	22,704
True-up payment obligation [Roll Forward]
Balance	25,235	22,844	24,658	21,981
Change in true-up payment obligation expense	537	733	1,114	1,596
Balance	$ 25,772	$ 23,577	$ 25,772	$ 23,577

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FDIC Indemnification Asset and True-up Payment Obligation (Fair value and the undiscounted amount of the true-up payment obligation) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
FDIC-Assisted Acquisition [Abstract]
Business Combination Contingent Consideration Liability	$ 25,772	$ 24,658
Business Combination Contingent Consideration Potential Cash Payment	$ 33,782	$ 34,956

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FDIC Indemnification Asset and True-up Payment Obligation (FDIC Indemnification Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Fdic Shared Loss Expense [Abstract]
FDIC indemnification asset, expense	$ (1,405)	$ (22,512)	$ (4,269)	$ (34,733)
Change in true-up payment obligation expense	(537)	(733)	(1,114)	(1,596)
Reimbursement to FDIC for recoveries	(1,478)	0	(2,066)	0
FDIC shared-loss expense, net	$ (3,420)	$ (23,245)	$ (7,449)	$ (36,329)

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Premises and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Property Plant And Equipment Line Items
Total Premises and Equipment, net	$ 72,585	$ 74,590

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Servicing Assets (Narratives) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Servicing Assets At Fair Value Line Items
Servicing Asset at Fair Value, Amount	$ 7,932		$ 7,455
Proceeds from the sale of Mortgage Servicing Rights	$ 0	$ 5,927

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Servicing Assets (Changes in serving rights at fair value) (Details) $ in Thousands	Jun. 30, 2016 USD ($)
Servicing Asset At Fair Value Amount Roll Forward
Fair value	$ 7,455
Fair value	$ 7,932

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Derivative Activities (Narratives) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Schedule Of Trading Securities And Other Trading Assets [Line Items]
Unrealized Gain Loss On Derivatives	$ 3,700,000	$ 4,300,000
Notional Amount Purchased Option	425,000	3,400,000
Embedded Derivative, Fair Value of Embedded Derivative Liability	181,000	1,100,000
Derivative Assets	1,926,000	3,025,000
Derivative Liabilities	5,413,000	6,162,000
Notional Amount Embedded Option	411,000	3,200,000
Interest Rate Cap [Member]
Schedule Of Trading Securities And Other Trading Assets [Line Items]
Derivative Assets	36,000	32,000
Derivative Liabilities	36,000	32,000
Derivative, Notional Amount	124,500,000	109,800,000
Options tied to Standard & Poor 500 Stock Market Index [Member]
Schedule Of Trading Securities And Other Trading Assets [Line Items]
Derivative Assets	187,000	1,170,000
Designated as Hedging Instrument [Member]
Schedule Of Trading Securities And Other Trading Assets [Line Items]
Derivative Liabilities	3,656,000	4,307,000
Not Designated as Hedging Instrument [Member]
Schedule Of Trading Securities And Other Trading Assets [Line Items]
Derivative Assets	1,703,000	1,819,000
Derivative Liabilities	1,703,000	1,819,000
Other derivative
Schedule Of Trading Securities And Other Trading Assets [Line Items]
Derivative Assets	0	4,000
Derivative Liabilities	$ 18,000	$ 4,000

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Derivative Activities (Derivative Assets and Liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Derivative Assets (Liabilities) at Fair Value
Derivative Assets	$ 1,926	$ 3,025
Derivative Liabilities	5,413	6,162
Options tied to Standard & Poor 500 Stock Market Index [Member]
Derivative Assets (Liabilities) at Fair Value
Derivative Assets	187	1,170
Designated as Hedging Instrument [Member]
Derivative Assets (Liabilities) at Fair Value
Derivative Liabilities	3,656	4,307
Not Designated as Hedging Instrument [Member]
Derivative Assets (Liabilities) at Fair Value
Derivative Assets	1,703	1,819
Derivative Liabilities	1,703	1,819
Interest Rate Cap [Member]
Derivative Assets (Liabilities) at Fair Value
Derivative Assets	36	32
Derivative Liabilities	36	32
Other derivative
Derivative Assets (Liabilities) at Fair Value
Derivative Assets	0	4
Derivative Liabilities	$ 18	$ 4

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Derivative Activities (Interest rate swap and their term) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Interest rate swap designated as cash flow hedges
Derivative [Line Items]
Notional Amount	$ 237,290
Interest rate swap designated as cash flow hedges | Rate 2.6200% [Member]
Derivative [Line Items]
Notional 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]
Notional 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]
Notional 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]
Notional 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]
Notional Amount	$ 37,290
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]
Notional Amount	$ 16,182
Interest rate swaps not designated as hedges - offered to clients
Derivative [Line Items]
Notional Amount	$ 16,182

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Derivative Activities (Interest rate swap not designated as hedging instruments and their term) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Derivatives Offered to Clients [Member]
Derivative [Line Items]
Notional derivative not designated as an hedging instrument.	$ 16,182
Derivatives Offered to Clients [Member] | Rate 5.13% [Member]
Derivative [Line Items]
Notional derivative not designated as an hedging instrument.	$ 3,682
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]
Notional derivative not designated as an hedging instrument.	$ 12,500
Fixed rate	5.505%
Settlement Date	Apr. 11, 2009
Maturity Date	Apr. 11, 2019
Mirror Image Derivatives [Member]
Derivative [Line Items]
Notional derivative not designated as an hedging instrument.	$ 16,182
Mirror Image Derivatives [Member] | Rate 5.13% [Member]
Derivative [Line Items]
Notional derivative not designated as an hedging instrument.	$ 3,682
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]
Notional derivative not designated as an hedging instrument.	$ 12,500
Fixed rate	5.505%
Settlement Date	Apr. 11, 2009
Maturity Date	Apr. 11, 2019

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Accrued Interest and Other Assets (Narratives) (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Other assets [Line Items]
Other prepaid expenses	$ 16,332,000	$ 11,762,000
Prepaid Taxes	11,200,000	7,000,000
Other repossessed assets	3,866,000	6,226,000
Repossessed auto	3,700,000	5,500,000
Mortgage tax credits	6,277,000	6,277,000
CoreDepositsMember | Eurobank [Member]
Other assets [Line Items]
Other Intangible Assets	4,800,000	5,300,000
Customer Relationships [Member]
Other assets [Line Items]
Other Intangible Assets	$ 2,200,000	$ 2,500,000

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Accrued Interest Receivable and Other Assets (Accrued Interest)(Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts Receivable Net Abstract
Accrued Interest Receivable On Non Acquired Loans	$ 16,545	$ 16,020
Accrued Investment Income Receivable	3,464	4,617
Total Interest Receivable	$ 20,009	$ 20,637

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Accrued Interest and Other Assets (Other assets) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Other asset
Other prepaid expenses	$ 16,332	$ 11,762
Other repossessed assets	3,866	6,226
Core deposit intangible and customer relationship intangibles	6,999	7,838
Mortgage tax credits	6,277	6,277
Investment in Statutory Trust	1,083	1,083
Accounts receivable and other assets	42,255	42,786
Other assets	$ 76,812	$ 75,972

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Deposits and Related Interest (Narratives) (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Deposits [Abstract]
Weighted Average Rate Domestic Deposit	0.63%	0.57%
Puerto Rico Cash & Money Market Fund Deposits	$ 104,400,000	$ 103,700,000
Puerto Rico Cash & Money Market Fund Deposits Weighted Average Rate	0.77%	0.77%
Puerto Rico Cash & Money Market Fund Deposits Collateral	$ 84,700,000	$ 81,600,000
Time Deposits, $250,000 or More	340,900,000	376,800,000
Public Fund Time Deposits, $250,000 or more	$ 9,200,000	$ 7,600,000
Public Fund Time Deposits Weighted Average Rate, $250,000 or more	0.55%	0.49%
Public funds deposit	$ 88,400,000	$ 99,000,000
Public Fund Collateral Investments	410,900,000	410,900,000
Accrued Interest, Time Deposits	1,800,000
Unamortized deposit discounts	150,000
Bank Overdrafts	569,000	1,500,000
Brokered Certificates of Deposits	495,900,000	711,400,000
Brokered Money Market Deposit	65,700,000	$ 71,600,000
Equity indexed option	$ 181,000

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Deposits and Related Interest (Deposits by Components) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Deposits, by Component, Alternative [Abstract]
Noninterest-bearing demand deposit	$ 917,260	$ 762,009
Interest-bearing saving and demand deposits	2,165,907	2,208,180
Individual Retirement Account	269,189	268,799
Retail certificates of deposists	525,979	441,998
Institutional certificates of deposits	204,074	253,791
Total Core Deposits	4,082,409	3,934,777
Brokered Deposists	561,645	782,974
Deposits, Total	$ 4,644,054	$ 4,717,751

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Deposits and Related Interest (Interest expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest Expense Domestic Deposit Liabilities [Abstract]
Demand and saving deposits	$ 3,184	$ 3,100	$ 6,026	$ 6,482
Certificates of Deposits	4,183	3,504	8,465	7,226
Total	$ 7,367	$ 6,604	$ 14,491	$ 13,708

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Deposits and Related Interest (Maturities of Time Deposits) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Maturities of Time Deposits [Abstract]
Time Deposit Maturities Less Than Three Month	$ 225,512	$ 474,051
Time Deposit Maturities Three To Twelve Month	518,304	501,551
Total Time deposits	743,816	975,602
Time Deposit Maturities, Year Two	513,092	454,906
Time Deposit Maturities, Year Three	155,666	176,406
Time Deposit Maturities, Year Four	36,059	32,396
Time Deposit Maturities, Year Five	44,340	33,715
Certificates of deposit	$ 1,492,973	$ 1,673,025

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Borrowings (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Debt Instrument [Line Items]
New Repurchase Agreement Debt Amount du to Unwind	$ 232,000		$ 232,000
Other borrowings	1,753		1,753		$ 1,734
Subordinated Debt	102,983		102,983		102,633
Gains Losses On Extinguishment Of Debt	0	$ 0	(12,000)	$ 0
Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Loans Receivable, Gross, Commercial, Mortgage	1,500,000		1,500,000		1,300,000
Additional Borrowing Capacity	895,000		$ 895,000		$ 770,600
Weighted average period remaining maturity of FHLB advances			5.4 months		6.3 months
Interest Payable	336		$ 336
Repurchase agreement
Debt Instrument [Line Items]
Interest Payable	1,600		1,600		$ 2,200
Extinguished Debt	268,000		268,000
Total Of Debt Matured Under Repurchased Agreement	$ 500,000		$ 500,000

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Borrowings (Securities Sold Under Agreement to Repurchase by Counterparties) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Borrowings	$ 1,037,325	$ 1,371,534
Securities Sold under Agreements to Repurchase [Member]
Debt Instrument [Line Items]
Borrowings	624,500	932,500
Fair Value of Underlying Collateral	668,689	1,021,370
Securities Sold under Agreements to Repurchase [Member] | Jp Morgan Chase Bank Na [Member]
Debt Instrument [Line Items]
Borrowings	222,500	262,500
Fair Value of Underlying Collateral	231,586	283,483
Securities Sold under Agreements to Repurchase [Member] | Credit Suisse Securities LLC [Member]
Debt Instrument [Line Items]
Borrowings	402,000	670,000
Fair Value of Underlying Collateral	$ 437,103	$ 737,887

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Borrowings (Repurchase Agreements) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Borrowing Balance	$ 1,037,325	$ 1,371,534
Securities Sold under Agreements to Repurchase [Member]
Debt Instrument [Line Items]
Borrowing Balance	$ 624,500	$ 932,500
Weighted Average Coupon	2.69%
Securities Sold under Agreements to Repurchase [Member] | Due date: 12 08 2016 [Member]
Debt Instrument [Line Items]
Borrowing Balance	$ 170,000
Weighted Average Coupon	1.50%
Settlement Date	Dec. 06, 2012
Investment Repurchase Agreement, Repurchase Date	Dec. 08, 2016
Securities Sold under Agreements to Repurchase [Member] | Due date: 03 02 2017 [Member]
Debt Instrument [Line Items]
Borrowing Balance	$ 232,000
Weighted Average Coupon	4.78%
Settlement Date	Mar. 02, 2007
Investment Repurchase Agreement, Repurchase Date	Mar. 02, 2017
Securities Sold under Agreements to Repurchase [Member] | Due Date: 04 29 2018 [Member]
Debt Instrument [Line Items]
Borrowing Balance	$ 222,500
Weighted Average Coupon	1.42%
Settlement Date	Dec. 10, 2012
Investment Repurchase Agreement, Repurchase Date	Apr. 29, 2018

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Borrowings (Repurchase Transaction Liability and Market Value of its Underlying Collateral) (Details) - Securities Sold under Agreements to Repurchase [Member] - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Assets Sold Under Agreements To Repurchase Line Items
Assets Sold Under Agreements To Repurchase Repurchase Liability		$ 932,500,000
Assets Sold Under Agreements To Repurchase Interest Rate		3.10%
Market value of underlying collateral of a repurchase agreement		$ 1,021,370,000
FNMA and FHLMC [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement		1,006,659,000
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		2,131,000
US Treasury Securities [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement		12,580,000
Mturity less than 90 Days Member
Assets Sold Under Agreements To Repurchase Line Items
Assets Sold Under Agreements To Repurchase Repurchase Liability		$ 30,000,000
Assets Sold Under Agreements To Repurchase Interest Rate		0.70%
Market value of underlying collateral of a repurchase agreement		$ 31,961,000
Mturity less than 90 Days Member | FNMA and FHLMC [Member]
Assets Sold Under Agreements To Repurchase Line Items
Assets Sold Under Agreements To Repurchase Interest Rate		0.70%
Market value of underlying collateral of a repurchase agreement		$ 31,961,000
Maturity over 90 days
Assets Sold Under Agreements To Repurchase Line Items
Assets Sold Under Agreements To Repurchase Repurchase Liability	$ 624,500,000	$ 902,500,000
Assets Sold Under Agreements To Repurchase Interest Rate	2.69%	3.18%
Market value of underlying collateral of a repurchase agreement	$ 668,689,000	$ 989,409,000
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	646,889,000	974,698,000
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	1,579,000	2,131,000
Maturity over 90 days | US Treasury Securities [Member]
Assets Sold Under Agreements To Repurchase Line Items
Market value of underlying collateral of a repurchase agreement	$ 20,221,000	$ 12,580,000

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Borrowings (Advances from the Federal Home Loan Bank) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Advances From Federal Home Loan Banks [Line Items]
Borrowings	$ 1,037,325	$ 1,371,534
Federal Home Loan Bank Advances [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowings	$ 306,144
FHLB, Weighted Average Interest Rate	0.95%
Federal Home Loan Bank Advances [Member] | July 11, 2016 [Member] | Fifty Millions [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowings	$ 50,000
FHLB, Weighted Average Interest Rate	0.56%
Settlement Date	Jun. 10, 2016
Maturity Date	Jul. 11, 2016
Federal Home Loan Bank Advances [Member] | July 18, 2016 [Member] | One Hundred Millions [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowings	$ 100,000
FHLB, Weighted Average Interest Rate	0.59%
Settlement Date	Jun. 16, 2016
Maturity Date	Jul. 18, 2016
Federal Home Loan Bank Advances [Member] | July 25, 2016 [Member] | Twenty Five Millions [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowings	$ 25,000
FHLB, Weighted Average Interest Rate	0.60%
Settlement Date	Jun. 24, 2016
Maturity Date	Jul. 25, 2016
Federal Home Loan Bank Advances [Member] | July 29, 2016 [Member] | Twenty Five Millions [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowings	$ 25,000
FHLB, Weighted Average Interest Rate	0.57%
Settlement Date	Jun. 30, 2016
Maturity Date	Jul. 29, 2016
Federal Home Loan Bank Advances [Member] | July 01, 2016 [Member] | Thirty Seven Million [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowings	$ 37,290
FHLB, Weighted Average Interest Rate	0.63%
Settlement Date	Jun. 01, 2016
Maturity Date	Jul. 01, 2016
Federal Home Loan Bank Advances [Member] | April 3, 2017 [Member] | Four Million [Member]
Advances From Federal Home Loan Banks [Line Items]
Borrowings	$ 4,150
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]
Borrowings	$ 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]
Borrowings	$ 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]
Borrowings	$ 9,704
FHLB, Weighted Average Interest Rate	2.59%
Settlement Date	Jul. 19, 2013
Maturity Date	Jul. 20, 2020

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Borrowings (Redemption Fund) (Details) - Redemption Fund [Member] $ in Thousands	Jun. 30, 2016 USD ($)
Debt Instrument [Line Items]
Redemption fund - June 30, 2016	$ 67,000
Total	$ 67,000

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Offsetting Arrangements (Assets Offsetting) (Details) - Derivative - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Offsetting Assets [Line Items]
Gross Amount of Recognized Assets	$ 1,926	$ 3,025
Gross amounts Offset in the Statement of Financial Condition	0	0
Net Amount of Assets in Statement of Financial Condition	1,926	3,025
Financial Instruments	2,009	2,000
Cash Collateral Received	0	0
Net Amount	$ (83)	$ 1,025

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Offsetting Arrangement (Liabilities Offsetting) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Offsetting Liabilities [Line Items]
Gross amount of Recognized Liabilities	$ 630,094	$ 939,757
Gross amount Offset in the Statement of Financial Condition	0	0
Net Amount of Liabilities Presented in the Statement of Financial Condition	630,094	939,757
Financial Instruments	668,689	1,021,370
Cash Collateral Provided	1,980	1,980
Net Amount	(40,575)	(83,593)
Derivative Financial Instruments, Liabilities [Member]
Offsetting Liabilities [Line Items]
Gross amount of Recognized Liabilities	5,594	7,257
Gross amount Offset in the Statement of Financial Condition	0	0
Net Amount of Liabilities Presented in the Statement of Financial Condition	5,594	7,257
Financial Instruments	0	0
Cash Collateral Provided	1,980	1,980
Net Amount	3,614	5,277
Securities Loaned or Sold under Agreements to Repurchase
Offsetting Liabilities [Line Items]
Gross amount of Recognized Liabilities	624,500	932,500
Gross amount Offset in the Statement of Financial Condition	0	0
Net Amount of Liabilities Presented in the Statement of Financial Condition	624,500	932,500
Financial Instruments	668,689	1,021,370
Cash Collateral Provided	0	0
Net Amount	$ (44,189)	$ (88,870)

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Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Loans and Leases Receivable, Related Parties [Roll Forward]
Balance	$ 31,134	$ 27,508	$ 31,475	$ 27,011
New loans	1,596	6,457	1,799	10,312
Repayments and sales	(2,034)	(647)	(2,578)	(4,005)
Balance	$ 30,696	$ 33,318	$ 30,696	$ 33,318

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Income Taxes (Narratives) (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Income Taxes [Abstract]
Unrecognized Tax Benefits, Interest on Income Taxes Accrued	$ 81,000		$ 81,000		$ 175,000
Deferred Tax Assets, Net	143,048,000		143,048,000		145,901,000
OtherComprehensiveIncomeLossTax			(456,000)		1,182,000
Income Tax Expense (Benefit)	5,858,000	$ 769,000	11,519,000	$ 1,748,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	2,300,000		2,300,000		2,200,000
Residual tax effect from OIB's change in applicable tax rate AFS	$ 8,000	$ 12,000	16,000	$ 22,000
International Banking Entity [Member]
OtherComprehensiveIncomeLossTax			$ 126,000		$ 141,000

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Income Taxes (Components of income tax expense (benefit)) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
ComponentsOfIncomeTaxExpenseBenefitContinuingOperationsAbstract
Deferred Income Tax Expense (Benefit)			$ 3,543	$ (1,316)
Income Tax Expense (Benefit)	$ 5,858	$ 769	$ 11,519	$ 1,748

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Income taxes (Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
IncomeTaxExpenseBenefitContinuingOperationsIncomeTaxReconciliationAbstract
Total Income Tax Expense (Benefit)	$ 5,858	$ 769	$ 11,519	$ 1,748

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Income Taxes (Components of Deferred Tax Assets) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Components Of Deferred Tax Liabilities Abstract
Deferred Tax Assets, Net	$ 143,048	$ 145,901

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Regulatory Capital Requirements (Group's and the Bank's actual capital amounts and ratios) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Group [Member]
Capital [Abstract]
Actual - Total capital	$ 849,147	$ 846,748
Actual - Tier 1 capital	788,349	782,912
Actual -Common equity tier 1 capital	596,080	594,482
Actual - Tier 1 leverage capital	788,349	782,912
Minimum Capital - Total Capital	377,323	391,723
Minimum capital - Tier 1 capital	282,992	293,792
Minimum capital - Common equity tier 1 capital	212,244	220,344
Minimum capital - Tier 1 leverage capital	264,633	280,009
Minimum to be well capitalized - Total Capital	471,653	489,654
Minimum to be well capitalized - Tier 1 capital	377,323	391,723
Minimum to be well capitalized - Common equity tier 1 capital	306,575	318,275
Minimum to be well capitalized - Tier 1 leverage	$ 330,791	$ 350,011
Risk Based Ratios [Abstract]
Capital to Risk Weighted Assets	18.00%	17.29%
Tier One Risk Based Capital to Risk Weighted Assets	16.71%	15.99%
Common Equity Tier OneTo Risk Weighted Assets	12.64%	12.14%
Tier One Leverage Capital to Average Assets	11.92%	11.18%
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	6.00%	6.00%
Common Equity Tier One Required For Capital Adequacy To Risk Weighted Assets	4.50%	4.50%
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	8.00%	8.00%
Tier One Risk Common Equity Tier One Required To Be Well Capitalized To Risk Weighted Assets	6.50%	6.50%
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	5.00%	5.00%
Bank [Member]
Capital [Abstract]
Actual - Total capital	$ 830,002	$ 815,458
Actual - Tier 1 capital	769,424	751,886
Actual -Common equity tier 1 capital	769,424	751,886
Actual - Tier 1 leverage capital	769,424	751,886
Minimum Capital - Total Capital	376,874	390,688
Minimum capital - Tier 1 capital	282,656	293,016
Minimum capital - Common equity tier 1 capital	211,992	219,762
Minimum capital - Tier 1 leverage capital	263,464	278,399
Minimum to be well capitalized - Total Capital	471,093	488,360
Minimum to be well capitalized - Tier 1 capital	376,874	390,688
Minimum to be well capitalized - Common equity tier 1 capital	306,210	317,434
Minimum to be well capitalized - Tier 1 leverage	$ 329,330	$ 347,999
Risk Based Ratios [Abstract]
Capital to Risk Weighted Assets	17.62%	16.70%
Tier One Risk Based Capital to Risk Weighted Assets	16.33%	15.40%
Common Equity Tier OneTo Risk Weighted Assets	16.33%	15.40%
Tier One Leverage Capital to Average Assets	11.68%	10.80%
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	6.00%	6.00%
Common Equity Tier One Required For Capital Adequacy To Risk Weighted Assets	4.50%	4.50%
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	8.00%	8.00%
Tier One Risk Common Equity Tier One Required To Be Well Capitalized To Risk Weighted Assets	6.50%	6.50%
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	5.00%	5.00%

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Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Equity, Class of Treasury Stock [Line Items]
Stock Repurchase Program Authorized Amount1		$ 70,000
Total number of shares purchased	303,985		303,985
Treasury Stock Acquired, Average Cost Per Share	$ 13.9
Treasury Stock, Value, Acquired, Cost Method	$ 4,200	0	$ 4,238
Stock Repurchase Program Remaining Authorized Repurchase Amount1		$ 7,700
Stock repurchase program remaining number of shares authorized to be repurchased		931,428
SharePrice		$ 8.3
Preferred Stock Issue Costs				$ 13,600
Common Stock Issuance Cost		$ 10,100
legal surplus		73,300		70,400
Preferred Stock [Member]
Equity, Class of Treasury Stock [Line Items]
Preferred Stock Issue Costs		$ 13,600
Common Stock [Member]
Equity, Class of Treasury Stock [Line Items]
Common Stock Issuance Cost				$ 10,100

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Stockholders' Equity (Shares repurchased under the stock repurchase program) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015
Equity, Class of Treasury Stock [Line Items]
Common shares repurchased as part of the stock repurchase program (Shares)	303,985
Treasury Stock Acquired, Average Cost Per Share	$ 13.9
Treasury Stock, Value		$ 104,874	$ 105,379

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Stockholders' Equity (Common shares held in treasury, activity) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Stockholders' Equity Note [Abstract]
Beginning of period		8,757,960	8,012,254
Common shares used for exercise of restricted stock units (Shares)		(45,810)	(58,279,000)
Common shares repurchased as part of the stock repurchase program (Shares)		0	303,985
Reclassification from common stock (shares)		0
End of period	8,257,960	8,712,150	8,257,960
Beginning of period		$ 105,379	$ 97,070
Common shares used for exercise of restricted stock units (Value)		(505)	(640)
Stock purchased under the repurchase program	$ 4,200	0	4,238
End of period	$ 100,668	$ 104,874	$ 100,668

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Accumulated Other Comprehensive Income (Accumulated Comprehensive Income, net of income tax) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Accumulated Other Comprehensive Income [Line Items]
Accumulated other comprehensive income, net of tax, Total	$ 15,805	$ 13,997
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income [Line Items]
Accumulated other comprehensive income, net of tax, Total	15,805	13,997
AccumulatedOtherThanTemporaryImpairmentMember
Accumulated Other Comprehensive Income [Line Items]
Unrealized gain on securities available-for-sale which are not other-than-temporarily impaired	19,004	22,044
Unrealized loss on securities available-for-sale which are other-than-temporarily impaired	0	(3,196)
Income tax effect of unrealized gain on securities available-for-sale	(919)	(1,924)
Net unrealized gain on securities available for sale wich are not other than temporarily impaired	18,085	16,924
Accumulated Net Gain Loss From Designated Or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income [Line Items]
Unrealized loss on cash flow hedges	(3,655)	(4,307)
Income tax effect of unrealized loss on cash flow hedges	1,375	1,380
Net unrealized (loss) income on cash flow hedges	$ (2,280)	$ (2,927)

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Accumulated Other Comprehensive Income (Changes in Other Comprehensive Income by Components) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net unrealized gains on securities available for sale
Accumulated Other Comprehensive Income [Line Items]
Beginning balance	$ 15,089	$ 30,214	$ 16,924	$ 25,764
Other Comprehensive Income Loss Before Reclassifications Net Of Tax	3,060	(11,523)	(1,266)	(7,212)
Reclassification Out Of Accumulated Other Comprehensive Income	(64)	141	2,427	280
Other Comprehensive Income (Loss) Other Net Of Tax	2,996	(11,382)	1,161	(6,932)
Ending balance	18,085	18,832	18,085	18,832
Net unrealized loss on cash flow hedges
Accumulated Other Comprehensive Income [Line Items]
Beginning balance	(2,805)	(5,890)	(2,927)	(6,053)
Other Comprehensive Income Loss Before Reclassifications Net Of Tax	(949)	(180)	(2,406)	(1,549)
Reclassification Out Of Accumulated Other Comprehensive Income	1,474	1,539	3,053	3,071
Other Comprehensive Income (Loss) Other Net Of Tax	525	1,359	647	1,522
Ending balance	(2,280)	(4,531)	(2,280)	(4,531)
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income [Line Items]
Beginning balance	12,284	24,324	13,997	19,711
Other Comprehensive Income Loss Before Reclassifications Net Of Tax	2,111	(11,703)	(3,672)	(8,761)
Reclassification Out Of Accumulated Other Comprehensive Income	1,410	1,680	5,480	3,351
Other Comprehensive Income (Loss) Other Net Of Tax	3,521	(10,023)	1,808	(5,410)
Ending balance	$ 15,805	$ 14,301	$ 15,805	$ 14,301

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Accumulated Other Comprehensive Income (Reclassifications out of other comprehensive income) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Residual tax effect from OIB's change in applicable tax rate AFS	$ 8,000	$ 12,000	$ 16,000	$ 22,000
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Interest Rate Contract	1,354,000	1,614,000	2,804,000	3,220,000
Tax effect from increase in capital gains tax rate, Cash flow hedges	120,000	(75,000)	249,000	(149,000)
Other Than Temporary Impairment on securities			2,557,000
Residual tax effect from OIB's change in applicable tax rate AFS	8,000	12,000	16,000	22,000
Tax effect from increase in capital gains tax rate AFS	(72,000)	129,000	(146,000)	258,000
Total	$ 1,410,000	$ 1,680,000	$ 5,480,000	$ 3,351,000

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Earnings Per Common Share (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Earnings Per Share [Abstract]
Stock Conversion Rate	86.4225		86.4225
Weighted average stock anti dilutive effect excluded from calculation of earnings per share	957,743	566,025	957,783	457,467
Convertible Preferred Stock	$ 84,000		$ 84,000		$ 84,000

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Earnings Per Common Share (Earnings per common share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Earnings Per Share [Abstract]
Net (loss) income	$ 14,339	$ 14,339	$ (3,109)	$ 28,510	$ (6,097)	$ 28,510	$ (6,097)
Non-Convertible Preferred Stock Dividend (Series A,B and D)	(1,629)		(1,628)	(3,256)	(3,256)
Convertible Preferred Stock Dividend (Series C)	(1,837)		(1,838)	(3,675)	(3,675)
Income available to common shareholders	10,873		(6,575)	21,579	(13,028)
Effect of assumed conversion of convertible preferred stock	1,837		1,838	3,675	3,675
Income available to common sharesholders assuming conversion	$ 12,710		$ (4,737)	$ 25,254	$ (9,353)
Average common shares outstanding	43,914		44,505	43,906	44,569
Average potential common shares options	43		110	37	148
Average potential common shares convertible preferred stock	7,138		7,159	7,138	7,159
Average common shares outstanding and equivalents	51,095		51,774	51,081	51,876
Earnings per common share - basic	$ 0.25		$ (0.15)	$ 0.49	$ (0.29)
Earnings per common share - diluted	$ 0.25		$ (0.15)	$ 0.49	$ (0.29)

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Guarantees (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Guarantee Obligations [Line Items]
Acquired standby letters of credit and financial guarantees	$ 2,300,000		$ 2,300,000		$ 14,700,000
Unpaid principal balance of residential subject loans subject to credit recourse	21,100,000		21,100,000		22,400,000
Liability for estimated credit losses to loans sold with credit recourse	162,000		162,000		439,000
Repurchased loans not subject to credit recourse provision	817,000	$ 2,700,000	2,300,000	$ 11,700,000
Losses from repurchased loans subject to credit recourse	92,000	476,000	111,000	583,000
Losses On Repurchased Loan Not Subject To Credit Recourse	329,000	742,000	830,000	1,500,000
Serviced mortgage loans for third parties	726,600,000		726,600,000
Funds Advanced To Investors Under Servicing Agreements	339,000		339,000		$ 301,000
Loan with recourse [Member]
Guarantee Obligations [Line Items]
Repurchased GNMA	$ 83,000	$ 1,200,000	$ 288,000	$ 3,400,000

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Guarantees (Changes in liabilty of estimated loss from credit recourse agreement) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Movement In Guaranteed Benefit Liability Gross Roll Forward
Balance at beginning of the period	$ 181,000	$ 487,000	$ 439,000	$ 927,000
Net charge-off/terminations	(19,000)	(198,000)	(277,000)	(638,000)
Balance at the end of the period	$ 162,000	$ 289,000	$ 162,000	$ 289,000

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Commitments (Narratives) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Commitments and Contingencies [Abstract]
Rent Expenses	$ 2,300	$ 2,300	$ 4,400	$ 4,700
Line of credit reserve	$ 667		$ 667		$ 667

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Commitments (Summarized credit-related financial instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Commitments and Contingencies [Abstract]
Commitments To Extend Credit	$ 461,054	$ 456,720
Commercial letters credit	1,556	1,508
Standby letters of credit and financial guarantees	4,756	14,656
Loans sold with recourse	$ 21,064	$ 22,374

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Commitments (Future rental commitments under leases) (Details) $ in Thousands	Jun. 30, 2016 USD ($)
Operating Leases, Future Minimum Payments Due [Abstract]
2016	$ 4,732
2017	6,850
2018	6,428
2019	6,387
2020	5,660
Thereafter	12,500
Total	$ 42,557

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Fair Value (Assets and liabilities on recurring and non-recurring basis) (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	$ 664,302,000	$ 974,609,000
Trading Securities	348,000	288,000
Money Market Funds, at Carrying Value	5,740,000	4,699,000
Derivative Assets	1,926,000	3,025,000
Servicing Assets	7,932,000	7,455,000
Derivative liabilities	(5,413,000)	(6,162,000)
Impaired Commercial Loan	219,393,000	235,767,000
Foreclosed real estate	51,220,000	58,176,000
Other repossessed assets	3,866,000	6,226,000
Total	274,479,000	300,169,000
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
Trading Securities		0
Money Market Funds, at Carrying Value	5,740,000	4,699,000
Derivative Assets	0	0
Servicing Assets	0	0
Derivative liabilities		0
Impaired Commercial Loan	0	0
Foreclosed real estate	0	0
Other repossessed assets	0	0
Total	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	664,302,000	974,609,000
Trading Securities	348,000	288,000
Money Market Funds, at Carrying Value	0	0
Derivative Assets	1,739,000	1,855,000
Servicing Assets	0	0
Derivative liabilities	(5,413,000)	(6,162,000)
Impaired Commercial Loan	0	0
Foreclosed real estate	0	0
Other repossessed assets	0	0
Total	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Trading Securities		0
Money Market Funds, at Carrying Value	0	0
Derivative Assets	187,000	1,170,000
Servicing Assets	7,932,000	7,455,000
Impaired Commercial Loan	219,393,000	235,767,000
Foreclosed real estate	51,220,000	58,176,000
Other repossessed assets	3,866,000	6,226,000
Total	274,479,000	300,169,000
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	664,302,000	974,609,000
Trading Securities	348,000	288,000
Money Market Funds, at Carrying Value	5,740,000	4,699,000
Derivative Assets	1,926,000	3,025,000
Servicing Assets	7,932,000	7,455,000
Derivative liabilities	(5,594,000)	(7,257,000)
Total	674,654,000	982,819,000
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
Trading Securities	0	0
Money Market Funds, at Carrying Value	5,740,000	4,699,000
Derivative Assets	0	0
Servicing Assets	0	0
Derivative liabilities	0	0
Total	5,740,000	4,699,000
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	664,302,000	974,609,000
Trading Securities	348,000	288,000
Money Market Funds, at Carrying Value	0	0
Derivative Assets	1,739,000	1,855,000
Servicing Assets	0	0
Derivative liabilities	(5,413,000)	(6,162,000)
Total	660,976,000	970,590,000
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	0
Trading Securities	0	0
Money Market Funds, at Carrying Value	0	0
Derivative Assets	187,000	1,170,000
Servicing Assets	7,932,000	7,455,000
Derivative liabilities	(181,000)	(1,095,000)
Total	7,938,000	7,530,000
Fair Value, Measurements, Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Commercial Loan	219,393,000	235,767,000
Foreclosed real estate	51,220,000	58,176,000
Other repossessed assets	3,866,000	6,226,000
Total	274,479,000	300,169,000
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
Other repossessed assets	0	0
Total	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	219,393,000	235,767,000
Foreclosed real estate	51,220,000	58,176,000
Other repossessed assets	3,866,000	6,226,000
Total	$ 274,479,000	$ 300,169,000

XML

Fair Value (Reconciliation of assets and liabilities using significant unobservable inputs (Level 3)) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance	$ 7,845,000	$ 12,281,000	$ 7,531,000	$ 14,070,000
Gains (losses) included in earnings	(28,000)	(79,000)	(98,000)	(118,000)
Sale of mortgage servicng rights		(6,985,000)		(6,985,000)
New instruments acquired	717,000	1,529,000	1,275,000	2,060,000
Change due to payments on loans	(121,000)	(313,000)	(225,000)	(732,000)
Amortization	8,000	56,000	28,000	134,000
Changes in fair value related to pricr of MSRs held for sale		(835,000)		(2,716,000)
Changes in fair value of servicing assets	(483,000)	231,000	(573,000)	172,000
Balance	7,938,000	5,885,000	7,938,000	5,885,000
Derivative Financial Instruments, Assets [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance	772,000	3,734,000	1,171,000	5,555,000
Gains (losses) included in earnings	(585,000)	(1,596,000)	(984,000)	(3,417,000)
Sale of mortgage servicng rights		0		0
New instruments acquired	0	0	0	0
Change due to payments on loans	0	0	0	0
Amortization	0	0	0	0
Changes in fair value related to pricr of MSRs held for sale		0		0
Changes in fair value of servicing assets	0	0	0	0
Balance	187,000	2,138,000	187,000	2,138,000
Servicing Assets [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance	7,819,000	12,164,000	7,455,000	13,992,000
Gains (losses) included in earnings	0	0	0	0
Sale of mortgage servicng rights		(6,985,000)		(6,985,000)
New instruments acquired	717,000	1,529,000	1,275,000	2,060,000
Change due to payments on loans	(121,000)	(313,000)	(225,000)	(732,000)
Amortization	0	0	0	0
Changes in fair value related to pricr of MSRs held for sale		(835,000)		(2,716,000)
Changes in fair value of servicing assets	(483,000)	231,000	(573,000)	172,000
Balance	7,932,000	5,791,000	7,932,000	5,791,000
Derivative Financial Instruments, Liabilities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance	(746,000)	(3,617,000)	(1,095,000)	(5,477,000)
Gains (losses) included in earnings	557,000	1,517,000	886,000	3,299,000
Sale of mortgage servicng rights		0		0
New instruments acquired	0	0	0	0
Change due to payments on loans	0	0	0	0
Amortization	8,000	56,000	28,000	134,000
Changes in fair value related to pricr of MSRs held for sale		0		0
Changes in fair value of servicing assets	0	0	0	0
Balance	$ (181,000)	$ (2,044,000)	$ (181,000)	$ (2,044,000)

XML

Fair Value (Qualitative information for assets and liabilities) (Details) - Fair Value, Inputs, Level 3 [Member] $ in Thousands	3 Months Ended
	Jun. 30, 2016 USD ($)
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value assets and liabilities measured on reccurring basis	$ 187
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
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	41.87%
Counterparty credit risk (based on 5-year CDS spread)	79.96%
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	41.87%
Counterparty credit risk (based on 5-year CDS spread)	89.03%
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	$ 7,932
Valuation Technique	Cash flow valuation
Servicing Assets [Member] | Cash Flow Valuation Technique [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Constant prepayment rate	4.41%
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	11.40%
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	$ (181)
Valuation Technique	Option pricing model
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	41.87%
Counterparty credit risk (based on 5-year CDS spread)	79.96%
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	41.87%
Counterparty credit risk (based on 5-year CDS spread)	89.03%
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	$ 28,558
Valuation Technique	Fair value of property or collateral
Collateral dependant impaired loan | Fair value of property or collateral [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	29.20%
Collateral dependant impaired loan | Fair value of property or collateral [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	43.20%
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	$ 183,020
Puerto Rico Electric Power Authority loan | Cash Flow Valuation Technique [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Discount rate	7.25%
Puerto Rico Electric Power Authority loan | Cash Flow Valuation Technique [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Discount rate	7.25%
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
Other non-collateral dependant impaired loans [Member] | Cash Flow Valuation Technique [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value assets and liabilities measured on reccurring basis	$ 7,814
Valuation Technique	Cash flow valuation
Other non-collateral dependant impaired loans [Member] | Cash Flow Valuation Technique [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Discount rate	4.25%
Other non-collateral dependant impaired loans [Member] | Cash Flow Valuation Technique [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Discount rate	10.50%
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	$ 51,220
Valuation Technique	Fair value of property or collateral
Foreclosed real estate [Member] | Fair value of property or collateral [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	29.20%
Foreclosed real estate [Member] | Fair value of property or collateral [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	43.20%
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	$ 3,866
Valuation Technique	Fair value of property or collateral
Other repossessed assets [Member] | Fair value of property or collateral [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	29.20%
Other repossessed assets [Member] | Fair value of property or collateral [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Appraised value	43.20%

XML

Fair value (Estimated fair value and carrying value) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Assets, Fair Value Disclosure [Abstract]
Trading Securities	$ 348		$ 288
Available-for-sale Securities	664,302		974,609
Held to maturity Fair Value	643,530		614,679
Federal Home Loan Bank (FHLB) stock	19,838		20,783
Other Investments	3		3
Derivative Assets	1,926		3,025
Servicing Assets	7,932		7,455
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	5,413		6,162
Assets,Carrying Value [Abstract]
Total cash and cash equivalents	517,048		536,709	$ 553,535		$ 573,427
Restricted Cash And Cash Equivalents	3,030		3,349
Trading Securities	348		288
Investment securities AFS , carrying value	664,302		974,609
Loans, net of allowance for loan and lease losses	4,350,789		4,416,396
Carrying amount, net	1,015,702		1,123,435
FDIC Indemnification Asset	18,426	$ 20,923	22,599	$ 22,704	$ 75,221	$ 97,378
Accrued interest receivable	20,009		20,637
Liabilities,Carrying Value Disclosure [Abstract]
Deposits, Total	4,644,054		4,717,751
Securities Sold under Agreements to Repurchase	626,109		934,691
Subordinated capital notes	102,983		102,633
Accrued expenses and other liabilities	88,930		92,043
Derivative liabilities at carrying value	5,413		6,162
Fair Value, Inputs, Level 1 [Member]
Assets, Fair Value Disclosure [Abstract]
Cash and Cash Equivalents, Fair Value Disclosure	517,048		536,709
Restricted Cash, at Fair Value	3,030		3,349
Available-for-sale Securities	0		0
Derivative Assets	0		0
Servicing Assets	0		0
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities			0
Assets,Carrying Value [Abstract]
Restricted Cash And Cash Equivalents	3,030		3,349
Trading Securities			0
Fair Value, Inputs, Level 2 [Member]
Assets, Fair Value Disclosure [Abstract]
Trading Securities	348		288
Available-for-sale Securities	664,302		974,609
Held to maturity Fair Value	643,530		614,679
Federal Home Loan Bank (FHLB) stock	19,838		20,783
Other Investments	3		3
Derivative Assets	1,739		1,855
Receivables, Fair Value Disclosure			20,637
Servicing Assets	0		0
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	5,413		6,162
Assets,Carrying Value [Abstract]
Trading Securities	348		288
Investment securities AFS , carrying value	664,302		974,609
Investment held for sale, carrying amount	635,399		620,189
Federal Home Loan Bank Stock at carrying value	19,838		20,783
Other Investment, Carrying Value	3		3
Derivative Assets, carrying value	1,739		1,855
Liabilities,Carrying Value Disclosure [Abstract]
Derivative liabilities at carrying value	5,413		6,162
Fair Value, Inputs, Level 3 [Member]
Assets, Fair Value Disclosure [Abstract]
Available-for-sale Securities	0		0
Non-covered loans, net	4,163,769		4,101,219
Derivative Assets	187		1,170
FDIC Indemnification Asset Fair Value Disclosure	11,064		17,786
Receivables, Fair Value Disclosure	20,009		20,637
Servicing Assets	7,932		7,455
Liabilities, Fair Value Disclosure [Abstract]
Deposits, Fair Value Disclosure	4,633,864		4,705,878
Securities sold under agreements to repurchase	630,933		955,859
Advances from FHLB	308,583		335,812
Notes Payable Fair Value Disclosure	2,599		2,593
Subordinated capital notes	98,944		94,940
Accrued expenses and other liabilities	88,930		92,935
Assets,Carrying Value [Abstract]
Trading Securities			0
Loans, net of allowance for loan and lease losses	4,373,617		4,434,213
Derivative Assets, carrying value	187		1,170
FDIC Indemnification Asset	18,426		22,599
Accrued interest receivable	20,009		20,637
Servicing assets, carrying value	7,932		7,455
Liabilities,Carrying Value Disclosure [Abstract]
Deposits, Total	4,643,873		4,715,764
Securities Sold under Agreements to Repurchase	626,109		934,691
Advances from FHLB	306,480		332,476
Term Notes	1,753		1,734
Subordinated capital notes	102,983		102,633
Accrued expenses and other liabilities	88,930		92,935
Derivative liabilities at carrying value	$ 181		$ 1,095

XML

Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Total interest income	$ 87,908	$ 99,413	$ 179,214	$ 206,414
Interest expense	(14,596)	(17,121)	(30,927)	(34,487)
Net interest income	73,312	82,292	148,287	171,927
Provision for Loan and Lease Losses, net	(14,445)	(15,539)	(28,234)	(57,732)
Total non-interest income (loss), net	15,155	(4,656)	28,658	2,225
Non-interest expenses	(53,825)	(64,437)	(108,682)	(120,769)
Intersegment revenues	0	0	0	0
Intersegment expenses	0	0	0	0
Income (loss) before Income Taxes, Parent	20,197	(2,340)	40,029	(4,349)
Total assets	6,712,596		6,712,596		$ 7,099,149
Banking [Member]
Segment Reporting Information [Line Items]
Total interest income	79,675	90,504	160,827	187,986
Interest expense	(7,300)	(7,110)	(14,107)	(14,564)
Net interest income	72,375	83,394	146,720	173,422
Provision for Loan and Lease Losses, net	(14,445)	(15,539)	(28,234)	(57,732)
Total non-interest income (loss), net	8,214	(11,713)	16,009	(13,962)
Non-interest expenses	(47,098)	(56,844)	(97,786)	(106,156)
Intersegment revenues	389	163	787	707
Intersegment expenses	(49)	(61)	(149)	(159)
Income (loss) before Income Taxes, Parent	19,386	(600)	37,347	(3,880)
Total assets	5,829,987	6,153,663	5,829,987	6,153,663
Financial Services
Segment Reporting Information [Line Items]
Total interest income	16	24	34	47
Interest expense	0	0	0	0
Net interest income	16	24	34	47
Provision for Loan and Lease Losses, net	0	0	0	0
Total non-interest income (loss), net	6,910	6,893	12,930	13,903
Non-interest expenses	(4,908)	(6,733)	(7,853)	(11,524)
Intersegment revenues	0	0	0	0
Intersegment expenses	(286)	(87)	(577)	(518)
Income (loss) before Income Taxes, Parent	1,732	97	4,534	1,908
Total assets	19,054	21,157	19,054	21,157
Treasury [Member]
Segment Reporting Information [Line Items]
Total interest income	8,217	8,885	18,353	18,381
Interest expense	(7,296)	(10,011)	(16,820)	(19,923)
Net interest income	921	(1,126)	1,533	(1,542)
Provision for Loan and Lease Losses, net	0	0	0	0
Total non-interest income (loss), net	31	164	(281)	2,284
Non-interest expenses	(1,820)	(860)	(3,043)	(3,089)
Intersegment revenues	49	61	149	160
Intersegment expenses	(103)	(76)	(210)	(189)
Income (loss) before Income Taxes, Parent	(922)	(1,837)	(1,852)	(2,376)
Total assets	1,800,838	2,136,293	1,800,838	2,136,293
Major Segment [Member]
Segment Reporting Information [Line Items]
Total interest income	87,908	99,413	179,214	206,414
Interest expense	(14,596)	(17,121)	(30,927)	(34,487)
Net interest income	73,312	82,292	148,287	171,927
Provision for Loan and Lease Losses, net	(14,445)	(15,539)	(28,234)	(57,732)
Total non-interest income (loss), net	15,155	(4,656)	28,658	2,225
Non-interest expenses	(53,826)	(64,437)	(108,682)	(120,769)
Intersegment revenues	438	224	936	866
Intersegment expenses	(438)	(224)	(936)	(866)
Income (loss) before Income Taxes, Parent	20,196	(2,340)	40,029	(4,349)
Total assets	7,649,879	8,311,113	7,649,879	8,311,113
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 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	(438)	(224)	(936)	(866)
Intersegment expenses	438	224	936	866
Income (loss) before Income Taxes, Parent	0	0	0	0
Total assets	(937,283)	(912,788)	(937,283)	(912,788)
Consolidated Total [Member]
Segment Reporting Information [Line Items]
Total interest income		99,413	179,214	206,414
Interest expense		(17,121)	(30,927)	(34,487)
Net interest income		82,292	148,287	171,927
Provision for Loan and Lease Losses, net		(15,539)	(28,234)	(57,732)
Total non-interest income (loss), net		(4,656)	28,658	2,225
Non-interest expenses		(64,437)	(108,682)	(120,769)
Intersegment revenues		0	0	0
Intersegment expenses		0	0	0
Income (loss) before Income Taxes, Parent		(2,340)	40,029	(4,349)
Total assets	$ 6,712,596	$ 7,398,325	$ 6,712,596	$ 7,398,325