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Fair value measurement (Tables)

9 Months Ended

Sep. 30, 2012

Schedule Of Fair Value Assets And Liabilities Measured On Recurring Basis Table Text Block

At September 30, 2012

(In thousands)	Level 1		Level 2		Level 3		Total

RECURRING FAIR VALUE MEASUREMENTS

Assets
Investment securities available-for-sale:
U.S. Treasury securities	$	-	$	37,707	$	-	$	37,707
Obligations of U.S. Government sponsored entities		-		1,064,967		-		1,064,967
Obligations of Puerto Rico, States and political subdivisions		-		50,004		-		50,004
Collateralized mortgage obligations - federal agencies		-		2,217,042		-		2,217,042
Collateralized mortgage obligations - private label		-		38,913		-		38,913
Mortgage-backed securities		-		1,672,117		7,143		1,679,260
Equity securities		3,941		3,589		-		7,530
Other		-		24,878		-		24,878
Total investment securities available-for-sale	$	3,941	$	5,109,217	$	7,143	$	5,120,301

Trading account securities, excluding derivatives:
Obligations of Puerto Rico, States and political subdivisions	$	-	$	17,584	$	-	$	17,584
Collateralized mortgage obligations		-		708		2,634		3,342
Mortgage-backed securities - federal agencies		-		175,522		12,569		188,091
Other		-		15,509		2,390		17,899
Total trading account securities	$	-	$	209,323	$	17,593	$	226,916
Mortgage servicing rights	$	-	$	-	$	158,367	$	158,367
Derivatives		-		49,881		-		49,881
Total assets measured at fair value on a recurring basis	$	3,941	$	5,368,421	$	183,103	$	5,555,465
Liabilities
Derivatives	$	-	$	(56,629)	$	-	$	(56,629)
Contingent consideration		-		-		(103,688)		(103,688)
Total liabilities measured at fair value on a recurring basis	$	-	$	(56,629)	$	(103,688)	$	(160,317)

At December 31, 2011

(In thousands)	Level 1		Level 2		Level 3		Total

RECURRING FAIR VALUE MEASUREMENTS

Assets
Investment securities available-for-sale:
U.S. Treasury securities	$	-	$	38,668	$	-	$	38,668
Obligations of U.S. Government sponsored entities		-		985,546		-		985,546
Obligations of Puerto Rico, States and political subdivisions		-		58,728		-		58,728
Collateralized mortgage obligations - federal agencies		-		1,697,642		-		1,697,642
Collateralized mortgage obligations - private label		-		57,792		-		57,792
Mortgage-backed securities		-		2,132,134		7,435		2,139,569
Equity securities		3,465		3,451		-		6,916
Other		-		24,962		-		24,962
Total investment securities available-for-sale	$	3,465	$	4,998,923	$	7,435	$	5,009,823

Trading account securities, excluding derivatives:
Obligations of Puerto Rico, States and political subdivisions	$	-	$	90,332	$	-	$	90,332
Collateralized mortgage obligations		-		737		2,808		3,545
Mortgage-backed securities - federal agencies		-		303,428		21,777		325,205
Other		-		13,212		4,036		17,248
Total trading account securities	$	-	$	407,709	$	28,621	$	436,330
Mortgage servicing rights	$	-	$	-	$	151,323	$	151,323
Derivatives		-		61,887		-		61,887
Total assets measured at fair value on a recurring basis	$	3,465	$	5,468,519	$	187,379	$	5,659,363
Liabilities
Derivatives	$	-	$	(66,700)	$	-	$	(66,700)
Contingent consideration		-		-		(99,762)		(99,762)
Total liabilities measured at fair value on a recurring basis	$	-	$	(66,700)	$	(99,762)	$	(166,462)

Fair Value Assets Measured On Nonrecurring Basis Text Block

Nine months ended September 30, 2012

(In thousands)	Level 1		Level 2		Level 3		Total

NONRECURRING FAIR VALUE MEASUREMENTS
Assets										Write-downs
Loans^[1]	$	-	$	-	$	11,887	$	11,887	$	(12,206)
Loans held-for-sale^[2]		-		-		102,092		102,092		(41,706)
Other real estate owned^[3]		-		-		93,560		93,560		(25,795)
Other foreclosed assets^[3]		-		-		120		120		(303)
Long-lived assets held-for-sale^[4]		-		-		-		-		(123)
Total assets measured at fair value on a nonrecurring basis	$	-	$	-	$	207,659	$	207,659	$	(80,133)

Nine months ended September 30, 2011

(In thousands)	Level 1		Level 2		Level 3		Total

NONRECURRING FAIR VALUE MEASUREMENTS
Assets										Write-downs
Loans^[1]	$	-	$	-	$	109,694	$	109,694	$	(17,181)
Loans held-for-sale^[2]		-		-		84,368		84,368		(29,197)
Other real estate owned^[3]		-		-		23,735		23,735		(12,008)
Other foreclosed assets^[3]		-		-		109		109		(590)
Total assets measured at fair value on a nonrecurring basis	$	-	$	-	$	217,906	$	217,906	$	(58,976)

Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation Text Block

	Quarter ended September 30, 2012
		MBS						Other
		classified		CMOs				securities
		as investment		classified		MBS		classified
		securities		as trading		classified as		as trading		Mortgage
		available-		account		trading account		account		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		securities		securities		rights		assets		consideration		liabilities
Balance at June 30, 2012		$	7,382	$	2,855	$	17,705	$	2,356	$	155,711	$	186,009	$	(101,013)	$	(101,013)
Gains (losses) included in earnings			(2)		(3)		(230)		(22)		(2,426)		(2,683)		(2,986)		(2,986)
Gains (losses) included in OCI			(137)		-		-		-		-		(137)		-		-
Purchases			-		-		80		56		5,238		5,374		-		-
Sales			-		-		(4,286)		-		(103)		(4,389)		-		-
Settlements			(100)		(218)		(700)		-		(53)		(1,071)		311		311
Balance at September 30, 2012		$	7,143	$	2,634	$	12,569	$	2,390	$	158,367	$	183,103	$	(103,688)	$	(103,688)
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at September 30, 2012	$	-	$	(4)	$	(81)	$	35	$	5,548	$	5,498	$	(2,991)	$	(2,991)

	Nine months ended September 30, 2012
		MBS						Other
		classified		CMOs				securities
		as investment		classified		MBS		classified
		securities		as trading		classified as		as trading		Mortgage
		available-		account		trading account		account		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		securities		securities		rights		assets		consideration		liabilities
Balance at January 1, 2012		$	7,435	$	2,808	$	21,777	$	4,036	$	151,323	$	187,379	$	(99,762)	$	(99,762)
Gains (losses) included in earnings			(5)		54		747		27		(7,217)		(6,394)		(4,237)		(4,237)
Gains (losses) included in OCI			63		-		-		-		-		63		-		-
Purchases			-		607		6,393		2,116		14,462		23,578		-		-
Sales			-		(251)		(9,741)		(1,834)		(103)		(11,929)		-		-
Settlements			(350)		(584)		(1,396)		(1,955)		(98)		(4,383)		311		311
Transfers into Level 3			-		-		2,405		-		-		2,405		-		-
Transfers out of Level 3			-		-		(7,616)		-		-		(7,616)		-		-
Balance at September 30, 2012		$	7,143	$	2,634	$	12,569	$	2,390	$	158,367	$	183,103	$	(103,688)	$	(103,688)
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at September 30, 2012	$	-	$	47	$	(173)	$	(340)	$	11,067	$	10,601	$	(4,753)	$	(4,753)

	Quarter ended September 30, 2011
		MBS						Other
		classified		CMOs				securities
		as investment		classified		MBS		classified
		securities		as trading		classified as		as trading		Mortgage
		available-		account		trading account		account		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		securities		securities		rights		assets		consideration		liabilities
Balance at June 30, 2011		$	7,634	$	2,638	$	27,079	$	3,571	$	162,619	$	203,541	$	(95,940)	$	(95,940)
Gains (losses) included in earnings			(2)		30		(154)		(115)		(10,124)		(10,365)		(1,657)		(1,657)
Gains (losses) included in OCI			(40)		-		-		-		-		(40)		-		-
Initial fair value on acquisition			-		-		-		-		-		-		(827)		(827)
Purchases			-		18		757		2,065		4,750		7,590		-		-
Sales			-		(20)		(4,676)		(1,430)		-		(6,126)		-		-
Settlements			(100)		(95)		(529)		-		(19)		(743)		-		-
Balance at September 30, 2011		$	7,492	$	2,571	$	22,477	$	4,091	$	157,226	$	193,857	$	(98,424)	$	(98,424)
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at September 30, 2011	$	-	$	20	$	(47)	$	(115)	$	(6,024)	$	(6,166)	$	(1,657)	$	(1,657)

	Nine months ended September 30, 2011
		MBS						Other
		classified		CMOs				securities
		as investment		classified		MBS		classified
		securities		as trading		classified as		as trading		Mortgage
		available-		account		trading account		account		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		securities		securities		rights		assets		consideration		liabilities
Balance at January 1, 2011		$	7,759	$	2,746	$	20,238	$	2,810	$	166,907	$	200,460	$	(92,994)	$	(92,994)
Gains (losses) included in earnings			(5)		31		5		445		(26,373)		(25,897)		(4,741)		(4,741)
Gains (losses) included in OCI			(38)		-		-		-		-		(38)		-		-
Initial fair value on acquisition			-		-		-		-		-		-		(689)		(689)
Purchases			-		414		10,977		2,989		16,902		31,282		-		-
Sales			-		(336)		(7,463)		(2,106)		-		(9,905)		-		-
Settlements			(224)		(284)		(1,280)		(47)		(210)		(2,045)		-		-
Balance at September 30, 2011		$	7,492	$	2,571	$	22,477	$	4,091	$	157,226	$	193,857	$	(98,424)	$	(98,424)
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at September 30, 2011	$	-	$	18	$	42	$	710	$	(13,876)	$	(13,106)	$	(4,741)	$	(4,741)

Fair Value Assets And Liabilities Measured On Recurring Basis Gain Loss Included In Earnings Text Block

	Quarter ended September 30, 2012				Nine months ended September 30, 2012
			Changes in unrealized				Changes in unrealized
	Total gains		gains (losses) relating to		Total gains		gains (losses) relating to
	(losses) included		assets still held at		(losses) included		assets still held at
(In thousands)	in earnings		reporting date		in earnings		reporting date
Interest income	$	(2)	$	-	$	(5)	$	-
FDIC loss share (expense) income		(2,991)		(2,991)		(4,849)		(4,849)
Other service fees		(2,426)		5,548		(7,217)		11,067
Trading account (loss) profit		(255)		(50)		828		(466)
Other operating income (loss)		5		-		612		96
Total	$	(5,669)	$	2,507	$	(10,631)	$	5,848

	Quarter ended September 30, 2011				Nine months ended September 30, 2011
			Changes in unrealized				Changes in unrealized
	Total gains		gains (losses) relating to		Total gains		gains (losses) relating to
	(losses) included		assets still held at		(losses) included		assets still held at
(In thousands)	in earnings		reporting date		in earnings		reporting date
Interest income	$	(2)	$	-	$	(5)	$	-
FDIC loss share (expense) income		(1,640)		(1,640)		(4,684)		(4,684)
Other service fees		(10,124)		(6,024)		(26,373)		(13,876)
Trading account (loss) profit		(239)		(142)		481		770
Other operating income (loss)		(17)		(17)		(57)		(57)
Total	$	(12,022)	$	(7,823)	$	(30,638)	$	(17,847)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Table Text Block]

			Fair Value at			Weighted
			September 30,	Valuation	Unobservable	Average
(In thousands)			2012	Technique	Inputs	(Range)
Collateralized				Discounted	Weighted average life	2.7 years (0.4 - 6.7 years)
	mortgage			cash flow	Yield	3.7% (0.8% - 4.7%)
	obligations - trading	$	2,634	model	Constant prepayment rate	23.4% (18.0% - 28.8%)
Other - trading				Discounted	Weighted average life	5.7	years
				cash flow	Yield	12.8	%
		$	1,245	model	Constant prepayment rate	9.0	%
Mortgage servicing				Discounted	Prepayment speed	8.7% (2.1% - 26.5%)
	rights			cash flow	Weighted average life	11.5 years (3.8 - 47.3 years)
		$	158,367	model	Discount rate	12.0% (10.0 - 15.5%)
Contingent				Discounted	Credit loss rate on covered loans	23.2% (0.0% - 100.0%)
	consideration			cash flow	Risk premium component
		$	(103,688)	model	of discount rate	5.3	%
Loans held-in-portfolio				External	Haircut applied on
		$	11,887	Appraisal	external appraisals	19.9% (5.0% - 30.0%)
Loans held-for-sale				Discounted
				cash flow	Weighted average life	2.0	years
		$	102,092	model	Net loss rate	49.6%
Other real estate owned				External	Haircut applied on
		$	93,560	Appraisal	external appraisals	22.9% (5.0% - 40.0%)

- Definition

Tabular disclosure of the total amount of gains or losses for the period which are included in earnings or resulted in a change to net assets which gains or losses have arisen from the use of significant unobservable inputs (Level 3) to measure the fair value of assets and liabilities. Such gains or losses are attributable to the change in unrealized gains or losses relating to those assets and liabilities so valued which are still held at the reporting date and which change are also considered for disclosure; it may be expected that a description of where those unrealized gains or losses are reported in the statement of income or the statement of financial position would also be disclosed.

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- Definition

Tabular disclosure of assets and liabilities by class, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). The disclosures that may be required or desired include: (a) the fair value measurements recorded during the period and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income, and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issuances, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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