LOAN PORTFOLIO (Tables)
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6 Months Ended |
Jun. 30, 2018 |
Loan Portfolio Held for Investment |
| | As of June 30, | | As ofDecember 31, | | | 2018 | | 2017 | (In thousands) | | Residential mortgage loans, mainly secured by first mortgages | $ | 3,238,001 | | $ | 3,290,957 | Commercial loans: | | | | | | Construction loans (1) | | 84,683 | | | 111,397 | Commercial mortgage loans (1)(2) | | 1,533,308 | | | 1,614,972 | Commercial and Industrial loans (3) | | 2,009,049 | | | 2,083,253 | Total commercial loans | | 3,627,040 | | | 3,809,622 | Finance leases | | 283,274 | | | 257,462 | Consumer loans | | 1,491,976 | | | 1,492,435 | Loans held for investment | | 8,640,291 | | | 8,850,476 | Allowance for loan and lease losses | | (222,035) | | | (231,843) | Loans held for investment, net | $ | 8,418,256 | | $ | 8,618,633 | | | | | | | | (1) | During the first quarter of 2018, the Corporation transferred $57.2 million (net of fair value write-downs of $9.7 million) in non-performing loans to held for sale. Loans transferred to held for sale consisted of a $30.0 million non-performing construction loan (net of a $5.1 million fair value write-down) and two non-performing commercial mortgage loans totaling $27.2 million (net of fair value write-downs of $4.6 million). | (2) | During the second quarter of 2018, the Corporation completed the sale of a $10.4 million non-performing commercial mortgage loan that was among the loans transferred to held for sale in the first quarter of 2018. | (3) | As of June 30, 2018 and December 31, 2017, includes $792.0 million and $833.5 million, respectively, of commercial loans that are secured by real estate but are not dependent upon the real estate for repayment. | | | | | | | |
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Loans Held for Investment on Which Accrual of Interest Income had been Discontinued |
Loans held for investment on which accrual of interest income had been discontinued were as follows: | | | | | | | | | | As of | | As of | | June 30, | | December 31, | (In thousands) | 2018 | | 2017 | Non-performing loans: | | | | | | | Residential mortgage | $ | 162,539 | | $ | 178,291 | | Commercial mortgage (1) | | 142,614 | | | 156,493 | | Commercial and Industrial | | 76,887 | | | 85,839 | | Construction: | | | | | | | Land | | 12,926 | | | 15,026 | | Construction-commercial (1) | | - | | | 35,100 | | Construction-residential | | 1,222 | | | 1,987 | | Consumer: | | | | | | | Auto loans | | 12,299 | | | 10,211 | | Finance leases | | 2,032 | | | 1,237 | | Other consumer loans | | 8,622 | | | 5,370 | Total non-performing loans held for investment (2)(3)(4) | $ | 419,141 | | $ | 489,554 | | | | | | | | | | | | | | | | | | | | | | (1) | During the first quarter of 2018, the Corporation transferred $57.2 million (net of fair value write-downs of $9.7 million) in non-performing loans to held for sale. Loans transferred to held for sale consisted of a $30.0 million non-performing construction loan (net of a $5.1 million fair value write-down) and two non-performing commercial mortgage loans totaling $27.2 million (net of fair value write-downs of $4.6 million). | (2) | Excludes $54.5 million and $8.3 million of non-performing loans held for sale as of June 30, 2018 and December 31, 2017, respectively. | | | | | | | | (3) | Amount excludes purchased-credit impaired (“PCI”) loans with a carrying value of approximately $152.2 million and $158.2 million as of June 30, 2018 and December 31, 2017, respectively, primarily mortgage loans acquired from Doral Bank in the first quarter of 2015 and from Doral Financial in the second quarter of 2014, as further discussed below. These loans are not considered non-performing due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using an estimated cash flow analysis. | | | | | | | | (4) | Non-performing loans exclude $393.3 million and $374.7 million of Troubled Debt Restructuring (“TDR”) loans that are in compliance with modified terms and in accrual status as of June 30, 2018 and December 31, 2017, respectively. |
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Corporation's Aging of Loans Held for Investment Portfolio |
The Corporation’s aging of the loans held for investment portfolio is as follows: | | | | | | | | | | Purchased Credit-Impaired Loans | | | | | | | | | | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 days or more Past Due (1)(2)(3) | | Total Past Due | | | | | Total loans held for investment | | 90 days past due and still accruing (1)(2)(3) | As of June 30, 2018 | | | | | | | | | (In thousands) | | | | | | Current | | | Residential mortgage: | | | | | | | | | | | | | | | | | | | | | | | | FHA/VA government-guaranteed loans (2)(3)(4) | $ | - | | $ | 3,810 | | $ | 109,995 | | $ | 113,805 | | $ | - | | $ | 37,698 | | $ | 151,503 | | $ | 109,995 | Other residential mortgage loans (4) | | - | | | 55,861 | | | 177,340 | | | 233,201 | | | 148,025 | | | 2,705,272 | | | 3,086,498 | | | 14,801 | Commercial: | | | | | | | | | | | | | | | | | | | | | | | | Commercial and Industrial loans | | 2,768 | | | 10,261 | | | 77,456 | | | 90,485 | | | - | | | 1,918,564 | | | 2,009,049 | | | 569 | Commercial mortgage loans (4) | | - | | | 2,401 | | | 145,760 | | | 148,161 | | | 4,217 | | | 1,380,930 | | | 1,533,308 | | | 3,146 | Construction: | | | | | | | | | | | | | | | | | | | | | | | | Land (4) | | - | | | 68 | | | 18,836 | | | 18,904 | | | - | | | 6,135 | | | 25,039 | | | 5,910 | Construction-commercial | | - | | | - | | | 1,013 | | | 1,013 | | | - | | | 52,806 | | | 53,819 | | | 1,013 | Construction-residential (4) | | - | | | - | | | 1,222 | | | 1,222 | | | - | | | 4,603 | | | 5,825 | | | - | Consumer: | | | | | | | | | | | | | | | | | | | | | | | | Auto loans | | 32,527 | | | 6,906 | | | 12,299 | | | 51,732 | | | - | | | 804,224 | | | 855,956 | | | - | Finance leases | | 5,777 | | | 1,404 | | | 2,032 | | | 9,213 | | | - | | | 274,061 | | | 283,274 | | | - | Other consumer loans | | 8,112 | | | 5,039 | | | 14,649 | | | 27,800 | | | - | | | 608,220 | | | 636,020 | | | 6,027 | Total loans held for investment | $ | 49,184 | | $ | 85,750 | | $ | 560,602 | | $ | 695,536 | | $ | 152,242 | | $ | 7,792,513 | | $ | 8,640,291 | | $ | 141,461 | _____________ | | | | | | | | | | | | | | | | | | | | | | | | (1) | Includes non-performing loans and accruing loans that are contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days. | (2) | It is the Corporationʼs policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA that are over 15 months delinquent, and are no longer accruing interest as of June 30, 2018. | (3) | As of June 30, 2018, includes $78.7 million of defaulted loans collateralizing GNMA securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans. | (4) | According to the Corporationʼs delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears on two or more monthly payments. FHA/VA government-guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans, construction-residential loans and construction-commercial loans past due 30-59 days as of June 30, 2018 amounted to $6.8 million, $112.0 million, $3.0 million, $0.4 million, $0.3 million and $0.6 million, respectively. | | |
As of December 31, 2017 | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 days or more Past Due (1)(2)(3) | | | | | | | | | | | Total loans held for investment | | 90 days past due and still accruing (1)(2)(3) | (In thousands) | | | | | Total Past Due | | | Purchased Credit- Impaired Loans | | | Current | | | Residential mortgage: | | | | | | | | | | | | | | | | | | | | | | | | FHA/VA government-guaranteed loans (2) (3) (4) | $ | - | | $ | 6,792 | | $ | 102,815 | | $ | 109,607 | | $ | - | | $ | 29,332 | | $ | 138,939 | | $ | 102,815 | Other residential mortgage loans (4) | | - | | | 92,502 | | | 193,750 | | | 286,252 | | | 153,991 | | | 2,711,775 | | | 3,152,018 | | | 15,459 | Commercial: | | | | | | | | | | | | | | | | | | | | | | | | Commercial and Industrial loans | | 8,971 | | | 576 | | | 88,156 | | | 97,703 | | | - | | | 1,985,550 | | | 2,083,253 | | | 2,317 | Commercial mortgage loans (4) | | - | | | 7,525 | | | 163,180 | | | 170,705 | | | 4,183 | | | 1,440,084 | | | 1,614,972 | | | 6,687 | Construction: | | | | | | | | | | | | | | | | | | | | | | | | Land (4) | | - | | | 124 | | | 15,177 | | | 15,301 | | | - | | | 11,630 | | | 26,931 | | | 151 | Construction-commercial | | - | | | - | | | 35,100 | | | 35,100 | | | - | | | 41,456 | | | 76,556 | | | - | Construction-residential | | - | | | 95 | | | 1,987 | | | 2,082 | | | - | | | 5,828 | | | 7,910 | | | - | Consumer: | | | | | | | | | | | | | | | | | | | | | | | | Auto loans | | 57,560 | | | 23,783 | | | 10,211 | | | 91,554 | | | - | | | 752,777 | | | 844,331 | | | - | Finance leases | | 10,549 | | | 3,484 | | | 1,237 | | | 15,270 | | | - | | | 242,192 | | | 257,462 | | | - | Other consumer loans | | 10,776 | | | 5,052 | | | 9,361 | | | 25,189 | | | - | | | 622,915 | | | 648,104 | | | 3,991 | Total loans held for investment | $ | 87,856 | | $ | 139,933 | | $ | 620,974 | | $ | 848,763 | | $ | 158,174 | | $ | 7,843,539 | | $ | 8,850,476 | | $ | 131,420 | ____________ | | | | | | | | | | | | | | | | | | | | | | | | (1) | Includes non-performing loans and accruing loans that are contractually delinquent 90 days or more (i.e. FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days. | (2) | It is the Corporationʼs policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $29.9 million of residential mortgage loans insured by the FHA or guaranteed by the VA that are over 15 months delinquent, and are no longer accruing interest as of December 31, 2017. | (3) | As of December 31, 2017, includes $62.1 million of defaulted loans collateralizing GNMA securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans. | (4) | According to the Corporationʼs delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears on two or more monthly payments. FHA/VA government-guaranteed loans, other residential mortgage loans, commercial mortgage loans, and land loans past due 30-59 days as of December 31, 2017 amounted to $6.0 million, $224.0 million, $9.0 million, and $2.5 million, respectively. | | |
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Corporation's Credit Quality Indicators by Loan |
The Corporation’s credit quality indicators by loan type as of June 30, 2018 and December 31, 2017 are summarized below: | | | | | | | | | | | | | | | | | | | Commercial Credit Exposure - Credit Risk Profile Based on Creditworthiness Category: | | | Substandard | | Doubtful | | Loss | | Total Adversely Classified (1) | | Total Portfolio | June 30, 2018 | | | | | (In thousands) | | | Commercial mortgage | $ | 291,045 | | $ | - | | $ | - | | $ | 291,045 | | $ | 1,533,308 | Construction: | | | | | | | | | | | | | | | Land | | 14,350 | | | - | | | - | | | 14,350 | | | 25,039 | Construction - commercial | | - | | | - | | | - | | | - | | | 53,819 | Construction - residential | | 1,222 | | | - | | | - | | | 1,222 | | | 5,825 | Commercial and Industrial | | 123,855 | | | 5,072 | | | 341 | | | 129,268 | | | 2,009,049 | | | | | | | | | | | | | | | | | | | Commercial Credit Exposure - Credit Risk Profile Based on Creditworthiness Category: | | | Substandard | | Doubtful | | Loss | | Total Adversely Classified (1) | | Total Portfolio | December 31, 2017 | | | | | (In thousands) | | | Commercial mortgage | $ | 257,503 | | $ | 4,166 | | $ | - | | $ | 261,669 | | $ | 1,614,972 | Construction: | | | | | | | | | | | | | | | Land | | 15,971 | | | 490 | | | - | | | 16,461 | | | 26,931 | Construction - commercial | | 35,100 | | | - | | | - | | | 35,100 | | | 76,556 | Construction - residential | | 1,987 | | | - | | | - | | | 1,987 | | | 7,910 | Commercial and Industrial | | 154,416 | | | 3,854 | | | 676 | | | 158,946 | | | 2,083,253 | _________ | | | | | | | | | | | | | | | (1) | Excludes non-performing loans held for sale of $54.5 million ($16.8 million commercial mortgage, $30.0 million construction-commercial, and $7.7 million construction-land) and $8.3 million (construction-land) as of June 30, 2018 and December 31, 2017, respectively. |
| | Consumer Credit Exposure - Credit Risk Profile Based on Payment Activity | | | Residential Real Estate | | Consumer | June 30, 2018 | FHA/VA/ Guaranteed (1) | | Other residential loans | | Auto | | Finance Leases | | Other Consumer | (In thousands) | | | Performing | $ | 151,503 | | $ | 2,775,934 | | $ | 843,657 | | $ | 281,242 | | $ | 627,398 | Purchased Credit-Impaired (2) | | - | | | 148,025 | | | - | | | - | | | - | Non-performing | | - | | | 162,539 | | | 12,299 | | | 2,032 | | | 8,622 | Total | $ | 151,503 | | $ | 3,086,498 | | $ | 855,956 | | $ | 283,274 | | $ | 636,020 | | | | | | | | | | | | | | | | | (1) | It is the Corporationʼs policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as 90 days past-due loans and still accruing as opposed to non-performing loans since the principal repayment is insured. This balance includes $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 15 months delinquent, and are no longer accruing interest as of June 30, 2018. | | | | | | | | | | | | | | | | | (2) | PCI loans are excluded from non-performing statistics due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Consumer Credit Exposure - Credit Risk Profile Based on Payment Activity | | | | Residential Real Estate | | Consumer | December 31, 2017 | FHA/VA/ Guaranteed (1) | | Other residential loans | | Auto | | Finance Leases | | Other Consumer | (In thousands) | | | Performing | $ | 138,939 | | $ | 2,819,736 | | $ | 834,120 | | $ | 256,225 | | $ | 642,734 | Purchased Credit-Impaired (2) | | - | | | 153,991 | | | - | | | - | | | - | Non-performing | | - | | | 178,291 | | | 10,211 | | | 1,237 | | | 5,370 | Total | $ | 138,939 | | $ | 3,152,018 | | $ | 844,331 | | $ | 257,462 | | $ | 648,104 | | | | | | | | | | | | | | | | | (1) | It is the Corporationʼs policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as 90 days past-due loans and still accruing as opposed to non-performing loans since the principal repayment is insured. This balance includes $29.9 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 15 months delinquent, and are no longer accruing interest as of December 31, 2017. | | | | | | | | | | | | | | | | | (2) | PCI loans are excluded from non-performing statistics due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. |
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Impaired Loans |
Impaired Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Quarter Ended | | Six-Month Period Ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2018 | | Recorded Investment | | Unpaid Principal Balance | | Related Specific Allowance | | Year-To-Date Average Recorded Investment | | Interest Income Recognized on Accrual Basis | | Interest Income Recognized on Cash Basis | | Interest Income Recognized on Accrual Basis | | Interest Income Recognized on Cash Basis | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | As of June 30, 2018 | | | | | | | | | | | | | | | | | | | | | | | | With no related specific allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | FHA/VA-Guaranteed loans | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | Other residential mortgage loans | | 121,396 | | | 163,583 | | | - | | | 123,058 | | | 788 | | | 193 | | | 1,529 | | | 351 | Commercial: | | | | | | | | | | | | | | | | | | | | | | | | Commercial mortgage loans | | 58,992 | | | 100,247 | | | - | | | 62,892 | | | 119 | | | 41 | | | 201 | | | 78 | Commercial and Industrial loans | | 43,566 | | | 60,380 | | | - | | | 45,086 | | | 496 | | | 8 | | | 920 | | | 20 | Consumer: | | | | | | | | | | | | | | | | | | | | | | | | Auto loans | | 326 | | | 326 | | | - | | | 342 | | | 4 | | | - | | | 5 | | | - | Other consumer loans | | 2,454 | | | 2,801 | | | - | | | 2,639 | | | 35 | | | 9 | | | 72 | | | 21 | | $ | 226,734 | | $ | 327,337 | | $ | - | | $ | 234,017 | | $ | 1,442 | | $ | 251 | | $ | 2,727 | | $ | 470 | With a related specific allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | FHA/VA-Guaranteed loans | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | Other residential mortgage loans | | 287,689 | | | 312,868 | | | 19,804 | | | 290,079 | | | 3,570 | | | 178 | | | 7,089 | | | 473 | Commercial: | | | | | | | | | | | | | | | | | | | | | | | | Commercial mortgage loans | | 116,583 | | | 127,995 | | | 12,204 | | | 119,058 | | | 737 | | | 307 | | | 1,397 | | | 354 | Commercial and Industrial loans | | 67,805 | | | 80,850 | | | 10,592 | | | 69,293 | | | 128 | | | 8 | | | 253 | | | 24 | Construction: | | | | | | | | | | | | | | | | | | | | | | | | Land | | 11,009 | | | 19,868 | | | 1,022 | | | 11,522 | | | 23 | | | 7 | | | 47 | | | 15 | Construction-residential | | 252 | | | 355 | | | 39 | | | 252 | | | - | | | - | | | - | | | - | Consumer: | | | | | | | | | | | | | | | | | | | | | | | | Auto loans | | 19,367 | | | 19,367 | | | 3,697 | | | 20,484 | | | 385 | | | - | | | 779 | | | - | Finance leases | | 1,594 | | | 1,594 | | | 162 | | | 1,754 | | | 28 | | | - | | | 59 | | | - | Other consumer loans | | 9,101 | | | 9,584 | | | 1,994 | | | 9,434 | | | 241 | | | 25 | | | 489 | | | 53 | | $ | 513,400 | | $ | 572,481 | | $ | 49,514 | | $ | 521,876 | | $ | 5,112 | | $ | 525 | | $ | 10,113 | | $ | 919 | Total: | | | | | | | | | | | | | | | | | | | | | | | | FHA/VA-Guaranteed loans | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | Other residential mortgage loans | | 409,085 | | | 476,451 | | | 19,804 | | | 413,137 | | | 4,358 | | | 371 | | | 8,618 | | | 824 | Commercial: | | | | | | | | | | | | | | | | | | | | | | | | Commercial mortgage loans | | 175,575 | | | 228,242 | | | 12,204 | | | 181,950 | | | 856 | | | 348 | | | 1,598 | | | 432 | Commercial and Industrial loans | | 111,371 | | | 141,230 | | | 10,592 | | | 114,379 | | | 624 | | | 16 | | | 1,173 | | | 44 | Construction: | | | | | | | | | | | | | | | | | | | | | | | | Land | | 11,009 | | | 19,868 | | | 1,022 | | | 11,522 | | | 23 | | | 7 | | | 47 | | | 15 | Construction-commercial | | - | | | - | | | - | | | - | | | - | | | - | | | - | | | - | Construction-residential | | 252 | | | 355 | | | 39 | | | 252 | | | - | | | - | | | - | | | - | Consumer: | | | | | | | | | | | | | | | | | | | | | | | | Auto loans | | 19,693 | | | 19,693 | | | 3,697 | | | 20,826 | | | 389 | | | - | | | 784 | | | - | Finance leases | | 1,594 | | | 1,594 | | | 162 | | | 1,754 | | | 28 | | | - | | | 59 | | | - | Other consumer loans | | 11,555 | | | 12,385 | | | 1,994 | | | 12,073 | | | 276 | | | 34 | | | 561 | | | 74 | | $ | 740,134 | | $ | 899,818 | | $ | 49,514 | | $ | 755,893 | | $ | 6,554 | | $ | 776 | | $ | 12,840 | | $ | 1,389 | |
Impaired Loans | | | | | | | | | | | | | | | | | | | Recorded Investment | | Unpaid Principal Balance | | Related Specific Allowance | | Year-To-Date Average Recorded Investment | (In thousands) | | | | | | | | | | | | As of December 31, 2017 | | | | | | | | | | | | With no related specific allowance recorded: | | | | | | | | | | | | FHA/VA-Guaranteed loans | $ | - | | $ | - | | $ | - | | $ | - | Other residential mortgage loans | | 116,818 | | | 154,048 | | | - | | | 120,241 | Commercial: | | | | | | | | | | | | Commercial mortgage loans | | 65,100 | | | 100,612 | | | - | | | 86,563 | Commercial and Industrial loans | | 28,292 | | | 31,254 | | | - | | | 28,567 | Construction: | | | | | | | | | | | | Land | | 48 | | | 49 | | | - | | | 48 | Consumer: | | | | | | | | | | | | Auto loans | | 267 | | | 267 | | | - | | | 290 | Other consumer loans | | 2,521 | | | 3,688 | | | - | | | 2,745 | | $ | 213,046 | | $ | 289,918 | | $ | - | | $ | 238,454 | With a related specific allowance recorded: | | | | | | | | | | | | FHA/VA-Guaranteed loans | $ | - | | $ | - | | $ | - | | $ | - | Other residential mortgage loans | | 316,616 | | | 349,284 | | | 22,086 | | | 318,606 | Commercial: | | | | | | | | | | | | Commercial mortgage loans | | 87,814 | | | 124,084 | | | 9,783 | | | 93,720 | Commercial and Industrial loans | | 90,008 | | | 112,005 | | | 12,359 | | | 92,666 | Construction: | | | | | | | | | | | | Land | | 11,865 | | | 19,973 | | | 1,402 | | | 14,126 | Construction-commercial | | 35,101 | | | 38,595 | | | 560 | | | 35,996 | Construction-residential | | 252 | | | 355 | | | 55 | | | 252 | Consumer: | | | | | | | | | | | | Auto loans | | 22,338 | | | 22,338 | | | 3,665 | | | 24,328 | Finance leases | | 2,184 | | | 2,184 | | | 104 | | | 2,428 | Other consumer loans | | 11,084 | | | 11,830 | | | 1,396 | | | 11,579 | | $ | 577,262 | | $ | 680,648 | | $ | 51,410 | | $ | 593,701 | Total: | | | | | | | | | | | | FHA/VA-Guaranteed loans | $ | - | | $ | - | | $ | - | | $ | - | Other residential mortgage loans | | 433,434 | | | 503,332 | | | 22,086 | | | 438,847 | Commercial: | | | | | | | | | | | | Commercial mortgage loans | | 152,914 | | | 224,696 | | | 9,783 | | | 180,283 | Commercial and Industrial loans | | 118,300 | | | 143,259 | | | 12,359 | | | 121,233 | Construction: | | | | | | | | | | | | Land | | 11,913 | | | 20,022 | | | 1,402 | | | 14,174 | Construction-commercial | | 35,101 | | | 38,595 | | | 560 | | | 35,996 | Construction-residential | | 252 | | | 355 | | | 55 | | | 252 | Consumer: | | | | | | | | | | | | Auto loans | | 22,605 | | | 22,605 | | | 3,665 | | | 24,618 | Finance leases | | 2,184 | | | 2,184 | | | 104 | | | 2,428 | Other consumer loans | | 13,605 | | | 15,518 | | | 1,396 | | | 14,324 | | $ | 790,308 | | $ | 970,566 | | $ | 51,410 | | $ | 832,155 | | | | | | | | | | | | | Interest income of approximately $6.8 million ($6.3 million on an accrual basis and $0.5 million on a cash basis) and $13.6 million ($12.4 million on an accrual basis and $1.2 million on a cash basis) was recognized on impaired loans for the second quarter and six-month period ended June 30, 2017, respectively. |
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Activity for Impaired loans |
The following tables show the activity for impaired loans and the related specific reserve for the quarters and six-month periods ended June 30, 2018 and 2017: | | | | | | | | | | | | | | Quarter Ended | | Six-Month Period Ended | | | | | | | June 30, | | June 30, | | | | 2018 | | | 2017 | | | 2018 | | | 2017 | (In thousands) | | | | | | | | | | | | | | | Impaired Loans: | | | | | | | | | | | | | | | Balance at beginning of period | | | | $ | 746,280 | | $ | 807,198 | | $ | 790,308 | | $ | 887,905 | Loans determined impaired during the period | | | | | 34,273 | | | 18,976 | | | 95,681 | | | 38,604 | Charge-offs (1)(2) | | | | | (13,207) | | | (43,083) | | | (30,420) | | | (60,487) | Loans sold, net of charge-offs | | | | | - | | | - | | | (4,121) | | | (53,245) | Increases to existing impaired loans | | | | | 77 | | | 698 | | | 7,075 | | | 1,239 | Foreclosures | | | | | (7,777) | | | (21,233) | | | (19,452) | | | (30,690) | Loans no longer considered impaired | | | | | (2,433) | | | (1,890) | | | (3,940) | | | (2,782) | Loans transferred to held for sale | | | | | - | | | - | | | (57,213) | | | - | Paid in full or partial payments | | | | | (17,079) | | | (25,041) | | | (37,784) | | | (44,919) | Balance at end of period | | | | $ | 740,134 | | $ | 735,625 | | $ | 740,134 | | $ | 735,625 | | | | | | | | | | | | | | | | | | (1) | For the six-month period ended June 30, 2018 includes charge-offs totaling $9.7 million associated with the $57.2 million in non-performing loans transferred to held for sale. | (2) | For the six-month period ended June 30, 2017 includes a charge-off of $10.7 million related to the sale of the PREPA credit line as further discussed below. |
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Activity for Specific Reserve |
| | | | | | | | | | | | | | | | | | | | Quarter Ended | | Six-Month Period Ended | | | | | | June 30, | | June 30, | | 2018 | 2017 | | 2018 | 2017 | (In thousands) | | | | | | | | | | | | | | | | Specific Reserve: | | | | | | | | | | | | | | | Balance at beginning of period | | | | $ | 56,930 | | $ | 66,311 | | $ | 51,410 | | | 64,421 | Provision for loan losses | | | | | 5,753 | | | 17,563 | | | 28,456 | | | 36,195 | Net charge-offs | | | | | (13,169) | | | (43,080) | | | (30,352) | | | (59,822) | Balance at end of period | | | | $ | 49,514 | | $ | 40,794 | | $ | 49,514 | | $ | 40,794 | | | | | | | | | | | | | | | | |
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Carrying Value of Acquired Loans |
The carrying amounts of PCI loans were as follows: | | | As of | | June 30, | | December 31, | | 2018 | | 2017 | (In thousands) | | | | | | Residential mortgage loans | $ | 148,025 | | $ | 153,991 | Commercial mortgage loans | | 4,217 | | | 4,183 | Total PCI loans | $ | 152,242 | | $ | 158,174 | Allowance for loan losses | | (11,354) | | | (11,251) | Total PCI loans, net of allowance for loan losses | $ | 140,888 | | $ | 146,923 | | | | | | | |
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Accretable Yield |
Changes in the accretable yield of PCI loans for the quarters and six-month periods ended June 30, 2018 and 2017 were as follows: | | | | | | | | | | | | | | Quarter Ended | | Six-Month Period Ended | | June 30, | | June 30, | | June 30, | | June 30, | | 2018 | | 2017 | | 2018 | | 2017 | (In thousands) | | | | | | | | | | | | Balance at beginning of period | $ | 101,059 | | $ | 113,665 | | $ | 103,682 | | $ | 116,462 | Accretion recognized in earnings | | (2,570) | | | (2,724) | | | (5,193) | | | (5,521) | Reclassification (to) from non-accretable | | - | | | (1,970) | | | - | | | (1,970) | Balance at end of period | $ | 98,489 | | $ | 108,971 | | $ | 98,489 | | $ | 108,971 | | | | | | | | | | | | |
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Selected Information on TDRs Includes Recorded Investment by Loan Class and Modification Type |
Selected information on TDR loans held for investment that includes the recorded investment by loan class and modification type is summarized in the following tables. This information reflects all TDRs held for investment: | | | | | | | | June 30, 2018 | | Interest rate below market | | Maturity or term extension | | Combination of reduction in interest rate and extension of maturity | | Forgiveness of principal and/or interest | | Forbearance Agreement | | Other (1) | | Total | (In thousands) | | | | | | | | | | | | | | | | | | | | | Troubled Debt Restructurings: | | | | | | | | | | | | | | | | | | | | | Non-FHA/VA Residential Mortgage loans | $ | 23,972 | | $ | 8,481 | | $ | 249,820 | | $ | - | | $ | 158 | | $ | 60,423 | | $ | 342,854 | Commercial Mortgage loans | | 5,594 | | | 31,646 | | | 35,499 | | | - | | | 1,970 | | | 9,572 | | | 84,281 | Commercial and Industrial loans | | 1,239 | | | 20,221 | | | 14,562 | | | - | | | 4,534 | | | 51,113 | | | 91,669 | Construction loans: | | | | | | | | | | | | | | | | | | | | - | Land | | 17 | | | 3,697 | | | 2,149 | | | - | | | - | | | 381 | | | 6,244 | Construction-commercial (2) | | - | | | - | | | - | | | - | | | - | | | - | | | - | Construction-residential | | - | | | - | | | - | | | - | | | - | | | 217 | | | 217 | Consumer loans - Auto | | - | | | 1,746 | | | 11,666 | | | - | | | - | | | 6,280 | | | 19,692 | Finance leases | | - | | | 158 | | | 1,436 | | | - | | | - | | | - | | | 1,594 | Consumer loans - Other | | 1,178 | | | 1,612 | | | 5,932 | | | 216 | | | - | | | 1,707 | | | 10,645 | Total Troubled Debt Restructurings | $ | 32,000 | | $ | 67,561 | | $ | 321,064 | | $ | 216 | | $ | 6,662 | | $ | 129,693 | | $ | 557,196 | | | | | | | | | | | | | | | | | | | | | | | (1) | Other concessions granted by the Corporation included deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation, or a combination of the concessions listed in the table. | (2) | Excludes TDRs held for sale amounting to $30.0 million as of June 30, 2018. | | |
| | | | | | | | | | | | | | | | | | | | | | | | December 31, 2017 | | Interest rate below market | | Maturity or term extension | | Combination of reduction in interest rate and extension of maturity | | Forgiveness of principal and/or interest | | Forbearance Agreement | | Other (1) | | Total | (In thousands) | | | | | | | | | | | | | | | | | | | | | Troubled Debt Restructurings: | | | | | | | | | | | | | | | | | | | | | Non-FHA/VA Residential Mortgage loans | $ | 25,964 | | $ | 8,318 | | $ | 267,578 | | $ | - | | $ | - | | $ | 62,070 | | $ | 363,930 | Commercial Mortgage loans | | 6,563 | | | 2,094 | | | 31,870 | | | - | | | - | | | 10,285 | | | 50,812 | Commercial and Industrial loans | | 2,510 | | | 20,648 | | | 16,049 | | | - | | | 6,623 | | | 48,282 | | | 94,112 | Construction loans: | | | | | | | | | | | | | | | | | | | | | Land | | 18 | | | 3,941 | | | 2,186 | | | - | | | - | | | 331 | | | 6,476 | Construction-commercial | | - | | | - | | | - | | | 35,100 | | | - | | | - | | | 35,100 | Construction-residential | | - | | | - | | | - | | | - | | | - | | | 217 | | | 217 | Consumer loans - Auto | | - | | | 1,347 | | | 14,233 | | | - | | | - | | | 7,025 | | | 22,605 | Finance leases | | - | | | 238 | | | 1,946 | | | - | | | - | | | - | | | 2,184 | Consumer loans - Other | | 892 | | | 2,097 | | | 6,891 | | | 217 | | | - | | | 1,686 | | | 11,783 | Total Troubled Debt Restructurings | $ | 35,947 | | $ | 38,683 | | $ | 340,753 | | $ | 35,317 | | $ | 6,623 | | $ | 129,896 | | $ | 587,219 | | | | | | | | | | | | | | | | | | | | | | | (1) | Other concessions granted by the Corporation included deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation or a combination of the concessions listed in the table. | | | | | | | | | | | | | | | | | | | | | | |
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Corporation's TDR Activity |
| The following table presents the Corporationʼs TDR loans held for investment activity: | | | | | | | | | | | | | | | | | | | | | | Quarter Ended | | Six-Month Period Ended | | June 30, | | June 30, | | | | | 2018 | | 2017 | | 2018 | | 2017 | (In thousands) | | | | | | | | | | | | | | | | Beginning balance of TDRs | | $ | 572,376 | | | $ | 602,364 | | $ | 587,219 | | | $ | 647,048 | New TDRs | | | 13,228 | | | | 13,368 | | | 56,647 | | | | 54,267 | Increases to existing TDRs | | | 75 | | | | 330 | | | 6,846 | | | | 754 | Charge-offs post modification (1)(2) | | | (8,616) | | | | (9,365) | | | (17,787) | | | | (24,027) | Sales, net of charge-offs | | | - | | | | - | | | - | | | | (53,245) | Foreclosures | | | (3,759) | | | | (16,150) | | | (10,802) | | | | (20,521) | TDR transferred to held for sale, net of charge-off | | | - | | | | - | | | (30,000) | | | | - | Paid-off and partial payments | | | (16,108) | | | | (22,004) | | | (34,927) | | | | (35,733) | Ending balance of TDRs | | $ | 557,196 | | | $ | 568,543 | | $ | 557,196 | | | $ | 568,543 | | | | | | | | | | (1) | The six-month period ended June 30, 2018 includes a charge-off of $5.1 million associated with a $30.0 million construction loan transferred to held for sale. | (2) | The six-month period ended June 30, 2017 includes a charge-off of $10.7 million related to the sale of the PREPA credit line. |
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Breakdown Between Accrual and Nonaccrual Status of TDRs |
The following table provides a breakdown of the TDR loans held for investment by those in accrual and nonaccrual status: | | | | | | | | | | | | | As of June 30, 2018 | | | | | | | | | | | | | Accrual | | Nonaccrual (1) | | Total TDRs | (In thousands) | | | | | | | | | Non-FHA/VA Residential Mortgage loans | $ | 270,358 | | $ | 72,496 | | $ | 342,854 | Commercial Mortgage loans | | 54,354 | | | 29,927 | | | 84,281 | Commercial and Industrial loans | | 43,478 | | | 48,191 | | | 91,669 | Construction loans: | | | | | | | | | Land | | 1,091 | | | 5,153 | | | 6,244 | Construction-commercial (2) | | - | | | - | | | - | Construction-residential | | - | | | 217 | | | 217 | Consumer loans - Auto | 13,345 | | | 6,347 | | | 19,692 | Finance leases | 1,334 | | | 260 | | | 1,594 | Consumer loans - Other | | 9,321 | | | 1,324 | | | 10,645 | Total Troubled Debt Restructurings | $ | 393,281 | | $ | 163,915 | | $ | 557,196 | | | | | | | | | | | (1) | Included in non-accrual loans are $51.7 million in loans that are performing under the terms of the restructuring agreement but are reported in nonaccrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and are deemed fully collectible. | (2) | Excludes a $30.0 million non-performing construction loans transferred to held for sale during the first quarter of 2018. |
| | | | | | | | | | | As of December 31, 2017 | | | | | | | | | | | | | Accrual | | Nonaccrual (1) | | Total TDRs | (In thousands) | | | | | | | | | Non- FHA/VA Residential Mortgage loans | $ | 280,729 | | $ | 83,201 | | $ | 363,930 | Commercial Mortgage loans | | 23,329 | | | 27,483 | | | 50,812 | Commercial and Industrial loans | | 41,536 | | | 52,576 | | | 94,112 | Construction loans: | | | | | | | | | Land | | 1,291 | | | 5,185 | | | 6,476 | Construction-commercial | | - | | | 35,100 | | | 35,100 | Construction-residential | | - | | | 217 | | | 217 | Consumer loans - Auto | | 15,548 | | | 7,057 | | | 22,605 | Finance leases | | 1,968 | | | 216 | | | 2,184 | Consumer loans - Other | | 10,294 | | | 1,489 | | | 11,783 | Total Troubled Debt Restructurings | $ | 374,695 | | $ | 212,524 | | $ | 587,219 | | | | | | | | | | | (1) | Included in non-accrual loans are $88.6 million in loans that are performing under the terms of the restructuring agreement but are reported in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and are deemed fully collectible. |
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Schedule Of Troubled Debt Restructurings Table [Text Block] |
| Quarter Ended June 30, 2018 | | Number of contracts | | Pre-modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | (Dollars in thousands) | | | | | | | | Troubled Debt Restructurings: | | | | | | | | Non-FHA/VA Residential Mortgage loans | 19 | | $ | 2,034 | | $ | 1,934 | Commercial Mortgage loans | 2 | | | 5,765 | | | 5,765 | Commercial and Industrial loans | 3 | | | 3,453 | | | 3,128 | Construction loans: | | | | | | | | Land | 1 | | | 97 | | | 97 | Consumer loans - Auto | 76 | | | 1,245 | | | 1,239 | Consumer loans - Other | 231 | | | 1,034 | | | 1,065 | Total Troubled Debt Restructurings | 332 | | $ | 13,628 | | $ | 13,228 | | | | | | | | | | Six-Month Period Ended June 30, 2018 | | Number of contracts | | Pre-modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | (Dollars in thousands) | | | | | | | | Troubled Debt Restructurings: | | | | | | | | Non-FHA/VA Residential Mortgage loans | 43 | | $ | 4,642 | | $ | 4,548 | Commercial Mortgage loans | 5 | | | 42,511 | | | 42,523 | Commercial and Industrial loans | 6 | | | 6,050 | | | 5,710 | Construction loans: | | | | | | | | Land | 1 | | | 97 | | | 97 | Consumer loans - Auto | 121 | | | 1,925 | | | 1,919 | Consumer loans - Other | 367 | | | 1,819 | | | 1,850 | Total Troubled Debt Restructurings | 543 | | $ | 57,044 | | $ | 56,647 | | | | | | | | | | | | | | | | |
| Quarter Ended June 30, 2017 | | Number of contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | (Dollars in thousands) | | | | | | | | Troubled Debt Restructurings: | | | | | | | | Non-FHA/VA Residential Mortgage loans | 48 | | $ | 9,577 | | $ | 9,483 | Commercial Mortgage loans | 2 | | | 267 | | | 267 | Commercial and Industrial loans | 2 | | | 326 | | | 326 | Consumer loans - Auto | 122 | | | 1,926 | | | 1,926 | Finance leases | 14 | | | 362 | | | 362 | Consumer loans - Other | 193 | | | 991 | | | 1,004 | Total Troubled Debt Restructurings | 381 | | $ | 13,449 | | $ | 13,368 | | | | | | | | | | | | | | | | | | Six-Month Period Ended June 30, 2017 | | Number of contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | (Dollars in thousands) | | | | | | | | Troubled Debt Restructurings: | | | | | | | | Non-FHA/VA Residential Mortgage loans | 88 | | $ | 14,227 | | $ | 13,991 | Commercial Mortgage loans | 8 | | | 22,705 | | | 22,465 | Commercial and Industrial loans | 5 | | | 11,074 | | | 11,074 | Construction loans: | | | | | | | | Land | 1 | | | 25 | | | 28 | Consumer loans - Auto | 274 | | | 4,173 | | | 4,173 | Finance leases | 22 | | | 548 | | | 548 | Consumer loans - Other | 403 | | | 1,960 | | | 1,988 | Total Troubled Debt Restructurings | 801 | | $ | 54,712 | | $ | 54,267 | | |
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Loan Modifications Considered Troubled Debt Restructurings Defaulted |
| Quarter Ended June 30, | | 2018 | | 2017 | | Number of contracts | | Recorded Investment | | Number of contracts | | Recorded Investment | (Dollars in thousands) | | | | | | | | | | Non-FHA/VA Residential Mortgage loans | 6 | | $ | 681 | | 19 | | $ | 2,614 | Consumer loans - Auto | 31 | | | 514 | | 5 | | | 69 | Consumer loans - Other | 28 | | | 100 | | 29 | | | 103 | Total | 65 | | $ | 1,295 | | 53 | | $ | 2,786 |
| Six-Month Period Ended June 30, | | 2018 | | 2017 | | Number of contracts | | Recorded Investment | | Number of contracts | | Recorded Investment | (Dollars in thousands) | | | | | | | | | | Non-FHA/VA Residential Mortgage loans | 10 | | $ | 1,068 | | 22 | | $ | 2,891 | Commercial Mortgage loans | - | | | - | | 1 | | | 57 | Consumer loans - Auto | 33 | | | 537 | | 9 | | | 130 | Consumer loans - Other | 39 | | | 154 | | 46 | | | 164 | Finance leases | 1 | | | 22 | | - | | | - | Total | 83 | | $ | 1,781 | | 78 | | $ | 3,242 |
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Loan Restructuring and Effect on Allowance for Loan and Lease Losses |
| June 30, 2018 | | | June 30, 2017 | (In thousands) | | | | | | Principal balance deemed collectible at end of period | $ | 64,559 | | $ | 36,141 | Amount charged off | $ | 1,137 | | $ | - | Charges to the provision for loan losses | $ | 1,902 | | $ | 388 | Allowance for loan losses at end of period | $ | 4,611 | | $ | 5,529 | |
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Past Due Purchased Credit Impaired Table [Text Block] |
The following tables present PCI loans by past due status as of June 30, 2018 and December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of June 30, 2018 | 30-59 Days | | 60-89 Days | | 90 days or more | | Total Past Due | | | | | Total PCI loans | | | | | | | | Current | | | (In thousands) | | | | | | | | | | | | | | | | | | | | Residential mortgage loans | $ | - | | $ | 8,588 | | $ | 27,024 | | $ | 35,612 | | | $ | 112,413 | | $ | 148,025 | | Commercial mortgage loans | | - | | | - | | | 3,252 | | | 3,252 | | | | 965 | | | 4,217 | | Total (1) | $ | - | | $ | 8,588 | | $ | 30,276 | | $ | 38,864 | | | $ | 113,378 | | $ | 152,242 | | _____________ | | | | | | | | | | | | | | | | | | | | (1) | According to the Corporationʼs delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage and commercial mortgage loans are considered past due when the borrower is in arrears two or more monthly payments. PCI residential mortgage loans past due 30-59 days as of June 30, 2018 amounted to $11.7 million. No PCI commercial mortgage loan was 30-59 days past due as of June 30, 2018. | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2017 | 30-59 Days | | 60-89 Days | | 90 days or more | | Total Past Due | | | | | Total PCI loans | | | | | | | | Current | | | (In thousands) | | | | | | | | | | | | | | | | | | | | Residential mortgage loans | $ | - | | $ | 16,600 | | $ | 26,471 | | $ | 43,071 | | | $ | 110,920 | | $ | 153,991 | | Commercial mortgage loans | | - | | | 355 | | | 2,834 | | | 3,189 | | | | 994 | | | 4,183 | | Total (1) | $ | - | | $ | 16,955 | | $ | 29,305 | | $ | 46,260 | | | $ | 111,914 | | $ | 158,174 | | | | | | | | | | | | | | | | | | | | | | | (1) | According to the Corporationʼs delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage and commercial mortgage loans are considered past due when the borrower is in arrears two or more monthly payments. PCI residential mortgage loans and commercial mortgage loans past due 30-59 days as of December 31, 2017 amounted to $28.1 million and $0.2 million, respectively. | | |
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Changes In Carrying Amount Of Purchased Credit Impaired Loans Table [Text Block] |
| | | | | | | | | | | | | | Changes in the carrying amount of loans accounted for pursuant to ASC 310-30 were as follows: | | | | Quarter Ended | | Six-Month Period Ended | | | | June 30, 2018 | | June 30, 2017 | | June 30, 2018 | | June 30, 2017 | (In thousands) | | | | | | | | | | | | | Balance at beginning of period | $ | 155,281 | | $ | 163,100 | | $ | 158,174 | | $ | 165,818 | Accretion | | 2,570 | | | 2,724 | | | 5,193 | | | 5,521 | Collections | | (4,359) | | | (4,509) | | | (7,755) | | | (9,102) | Foreclosures | | (1,250) | | | (947) | | | (3,370) | | | (1,869) | Ending balance | $ | 152,242 | | $ | 160,368 | | $ | 152,242 | | $ | 160,368 | Allowance for loan losses | | (11,354) | | | (9,446) | | | (11,354) | | | (9,446) | Ending balance, net of allowance for loan losses | $ | 140,888 | | $ | 150,922 | | $ | 140,888 | | $ | 150,922 | | | | | | | | | | | | | | |
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Allowance For Credit Losses On Purchased Credit Impaired Loans Table [Text Block] |
Changes in the allowance for loan losses related to PCI loans were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Quarter Ended | | Six-Month Period Ended | | | | June 30, 2018 | | June 30, 2017 | | June 30, 2018 | | June 30, 2017 | (In thousands) | | | Balance at beginning of period | $ | 11,251 | | $ | 6,857 | | $ | 11,251 | | $ | 6,857 | Provision for loan losses | | 103 | | | 2,589 | | | 103 | | | 2,589 | Balance at the end of period | | $ | 11,354 | | $ | 9,446 | | $ | 11,354 | | $ | 9,446 |
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