Loans

9 Months Ended

Sep. 30, 2017

Note 8 – Loans

Loans acquired in the Westernbank FDIC-assisted transaction, except for lines of credit with revolving privileges, are accounted for by the Corporation in accordance with ASC Subtopic 310-30. Under ASC Subtopic 310-30, the acquired loans were aggregated into pools based on similar characteristics. Each loan pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. The loans which are accounted for under ASC Subtopic 310-30 by the Corporation are not considered non-performing and will continue to have an accretable yield as long as there is a reasonable expectation about the timing and amount of cash flows expected to be collected. The Corporation measures additional losses for this portfolio when it is probable the Corporation will be unable to collect all cash flows expected at acquisition plus additional cash flows expected to be collected arising from changes in estimates after acquisition. Lines of credit with revolving privileges that were acquired as part of the Westernbank FDIC-assisted transaction are accounted for under the guidance of ASC Subtopic 310-20, which requires that any differences between the contractually required loan payment receivable in excess of the Corporation’s initial investment in the loans be accreted into interest income. Loans accounted for under ASC Subtopic 310-20 are placed in non-accrual status when past due in accordance with the Corporation’s non-accruing policy and any accretion of discount is discontinued.

The risks on loans acquired in the FDIC-assisted transaction are significantly different from the risks on loans not covered under the FDIC loss sharing agreements because of the loss protection provided by the FDIC. Accordingly, the Corporation presents loans subject to the loss sharing agreements as “covered loans” in the information below and loans that are not subject to the FDIC loss sharing agreements as “non-covered loans”. The FDIC loss sharing agreements expired on June 30, 2015 for commercial (including construction) and consumer loans, and expires on June 30, 2020 for single-family residential mortgage loans, as explained in Note 10.

For a summary of the accounting policies related to loans, interest recognition and allowance for loan losses refer to Note 2 - Summary of significant accounting policies of the 2016 Form 10-K.

During the quarter and nine months ended September 30, 2017, the Corporation recorded purchases (including repurchases) of mortgage loans amounting to $104 million and $364 million, respectively; consumer loans of $133 million and $283 million, respectively; and leases of $2 million, for the nine months ended September 30, 2017. During the quarter and nine months ended September 30, 2016, the Corporation recorded purchases (including repurchases) of mortgage loans amounting to $118 million and $358 million, respectively; consumer loans of $164 million and commercial loans amounting to $51 million during the nine months ended September 30, 2016.

The Corporation performed whole-loan sales involving approximately $9 million and $63 million of residential mortgage loans during the quarter and nine months ended September 30, 2017, respectively (September 30, 2016 - $13 million and $53 million, respectively). Excluding the bulk sale of Westernbank loans with a carrying value of approximately $100 million, the Corporation sold commercial and construction loans with a carrying value of approximately $38 million and $39 million during the quarter and nine months ended September 30, 2016, respectively. Also, the Corporation securitized approximately $ 86 million and $ 369 million of mortgage loans into Government National Mortgage Association (“GNMA”) mortgage-backed securities during the quarter and nine months ended September 30, 2017, respectively (September 30, 2016 - $ 161 million and $ 465 million, respectively). Furthermore, the Corporation securitized approximately $ 21 million and $ 86 million of mortgage loans into Federal National Mortgage Association (“FNMA”) mortgage-backed securities during the quarter and nine months ended September 30, 2017, respectively (September 30, 2016 - $ 50 million and $ 129 million, respectively). The disruption in our operations over the last 10 days of the quarter impacted the volume of loan sales and securitizations.

Non-covered loans

The following table presents the composition of non-covered loans held-in-portfolio (“HIP”), net of unearned income, by past due status at September 30, 2017 and December 31, 2016, including loans previously covered by the commercial FDIC loss sharing agreements.

September 30, 2017
Puerto Rico

			Past due									Non-covered
		30-59		60-89		90 days		Total				loans HIP
(In thousands)		days		days		or more		past due		Current		Puerto Rico
Commercial multi-family		$	108	$	157	$	1,060	$	1,325	$	145,226	$	146,551
Commercial real estate non-owner occupied			39,076		10,571		34,234		83,881		2,440,914		2,524,795
Commercial real estate owner occupied			24,283		8,107		103,379		135,769		1,536,504		1,672,273
Commercial and industrial			5,708		1,806		45,993		53,507		2,772,485		2,825,992
Construction			-		-		269		269		87,436		87,705
Mortgage			583,383		221,646		856,307		1,661,336		4,154,169		5,815,505
Leasing			12,990		4,543		2,684		20,217		734,664		754,881
Consumer:
	Credit cards		17,523		9,863		20,626		48,012		1,035,234		1,083,246
	Home equity lines of credit		117		243		48		408		5,716		6,124
	Personal		24,363		10,640		20,247		55,250		1,159,081		1,214,331
	Auto		44,331		18,933		12,259		75,523		746,481		822,004
	Other		575		357		16,491		17,423		147,242		164,665
Total		$	752,457	$	286,866	$	1,113,597	$	2,152,920	$	14,965,152	$	17,118,072

September 30, 2017
U.S. mainland
			Past due
		30-59		60-89		90 days		Total				Loans HIP
(In thousands)		days		days		or more		past due		Current		U.S. mainland
Commercial multi-family		$	1,414	$	-	$	-	$	1,414	$	1,179,773	$	1,181,187
Commercial real estate non-owner occupied			-		800		3,074		3,874		1,565,321		1,569,195
Commercial real estate owner occupied			4,350		-		486		4,836		283,948		288,784
Commercial and industrial			960		1,766		94,407		97,133		921,185		1,018,318
Construction			5,243		-		-		5,243		730,377		735,620
Mortgage			2,253		6,193		14,348		22,794		690,936		713,730
Legacy			111		275		3,268		3,654		33,854		37,508
Consumer:
	Credit cards		10		6		13		29		51		80
	Home equity lines of credit		5,993		2,446		11,960		20,399		176,419		196,818
	Personal		2,321		1,750		2,342		6,413		307,430		313,843
	Auto		-		-		-		-		3		3
	Other		-		25		22		47		245		292
Total		$	22,655	$	13,261	$	129,920	$	165,836	$	5,889,542	$	6,055,378

September 30, 2017
Popular, Inc.

			Past due									Non-covered
		30-59		60-89		90 days		Total					loans HIP
(In thousands)		days		days		or more		past due		Current		Popular, Inc.^{[1] [2]}
Commercial multi-family		$	1,522	$	157	$	1,060	$	2,739	$	1,324,999	$	1,327,738
Commercial real estate non-owner occupied			39,076		11,371		37,308		87,755		4,006,235		4,093,990
Commercial real estate owner occupied			28,633		8,107		103,865		140,605		1,820,452		1,961,057
Commercial and industrial			6,668		3,572		140,400		150,640		3,693,670		3,844,310
Construction			5,243		-		269		5,512		817,813		823,325
Mortgage			585,636		227,839		870,655		1,684,130		4,845,105		6,529,235
Leasing			12,990		4,543		2,684		20,217		734,664		754,881
Legacy^[3]			111		275		3,268		3,654		33,854		37,508
Consumer:
	Credit cards		17,533		9,869		20,639		48,041		1,035,285		1,083,326
	Home equity lines of credit		6,110		2,689		12,008		20,807		182,135		202,942
	Personal		26,684		12,390		22,589		61,663		1,466,511		1,528,174
	Auto		44,331		18,933		12,259		75,523		746,484		822,007
	Other		575		382		16,513		17,470		147,487		164,957
Total		$	775,112	$	300,127	$	1,243,517	$	2,318,756	$	20,854,694	$	23,173,450

[1]	Non-covered loans held-in-portfolio are net of $129 million in unearned income and exclude $69 million in loans held-for-sale.
[2]	Includes $7.3 billion pledged to secure credit facilities and public funds that the secured parties are not permitted to sell or repledge the collateral, of which $4.7 billion were pledged at the Federal Home Loan Bank ("FHLB") as collateral for borrowings, $2.2 billion at the Federal Reserve Bank ("FRB") for discount window borrowings and $0.5 billion serve as collateral for public funds.
[3]	The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment.

December 31, 2016
Puerto Rico

			Past due									Non-covered
			30-59		60-89		90 days	Total				loans HIP
(In thousands)			days		days		or more	past due		Current		Puerto Rico
Commercial multi-family		$	232	$	-	$	664	$	896	$	173,644	$	174,540
Commercial real estate non-owner occupied			98,604		4,785		51,435		154,824		2,409,461		2,564,285
Commercial real estate owner occupied			12,967		5,014		112,997		130,978		1,660,497		1,791,475
Commercial and industrial			19,156		2,638		32,147		53,941		2,617,976		2,671,917
Construction			-		-		1,668		1,668		83,890		85,558
Mortgage			289,635		136,558		801,251		1,227,444		4,689,056		5,916,500
Leasing			6,619		1,356		3,062		11,037		691,856		702,893
Consumer:
	Credit cards		11,646		8,752		18,725		39,123		1,061,484		1,100,607
	Home equity lines of credit		-		65		185		250		8,101		8,351
	Personal		12,148		7,918		20,686		40,752		1,109,425		1,150,177
	Auto		32,441		7,217		12,320		51,978		774,614		826,592
	Other		1,259		294		19,311		20,864		154,665		175,529
Total		$	484,707	$	174,597	$	1,074,451	$	1,733,755	$	15,434,669	$	17,168,424

December 31, 2016
U.S. mainland
			Past due
			30-59		60-89		90 days		Total				Loans HIP
(In thousands)			days		days		or more		past due		Current		U.S. mainland
Commercial multi-family		$	5,952	$	-	$	206	$	6,158	$	1,058,138	$	1,064,296
Commercial real estate non-owner occupied			1,992		379		1,195		3,566		1,353,750		1,357,316
Commercial real estate owner occupied			2,116		540		472		3,128		240,617		243,745
Commercial and industrial			960		610		101,257		102,827		828,106		930,933
Construction			-		-		-		-		690,742		690,742
Mortgage			15,974		5,272		11,713		32,959		746,902		779,861
Legacy			833		346		3,337		4,516		40,777		45,293
Consumer:
	Credit cards		8		28		30		66		92		158
	Home equity lines of credit		2,908		1,055		4,762		8,725		243,450		252,175
	Personal		2,547		1,675		1,864		6,086		234,521		240,607
	Auto		-		-		-		-		9		9
	Other		-		-		8		8		180		188
Total		$	33,290	$	9,905	$	124,844	$	168,039	$	5,437,284	$	5,605,323

December 31, 2016
Popular, Inc.

			Past due									Non-covered
			30-59		60-89		90 days		Total			loans HIP
(In thousands)			days		days		or more		past due	Current		Popular, Inc.^{[1] [2]}
Commercial multi-family		$	6,184	$	-	$	870	$	7,054	$	1,231,782	$	1,238,836
Commercial real estate non-owner occupied			100,596		5,164		52,630		158,390		3,763,211		3,921,601
Commercial real estate owner occupied			15,083		5,554		113,469		134,106		1,901,114		2,035,220
Commercial and industrial			20,116		3,248		133,404		156,768		3,446,082		3,602,850
Construction			-		-		1,668		1,668		774,632		776,300
Mortgage			305,609		141,830		812,964		1,260,403		5,435,958		6,696,361
Leasing			6,619		1,356		3,062		11,037		691,856		702,893
Legacy^[3]			833		346		3,337		4,516		40,777		45,293
Consumer:
	Credit cards		11,654		8,780		18,755		39,189		1,061,576		1,100,765
	Home equity lines of credit		2,908		1,120		4,947		8,975		251,551		260,526
	Personal		14,695		9,593		22,550		46,838		1,343,946		1,390,784
	Auto		32,441		7,217		12,320		51,978		774,623		826,601
	Other		1,259		294		19,319		20,872		154,845		175,717
Total		$	517,997	$	184,502	$	1,199,295	$	1,901,794	$	20,871,953	$	22,773,747

[1]	Non-covered loans held-in-portfolio are net of $121 million in unearned income and exclude $89 million in loans held-for-sale.
[2]	Includes $7.3 billion pledged to secure credit facilities and public funds that the secured parties are not permitted to sell or repledge the collateral, of which $4.5 billion were pledged at the FHLB as collateral for borrowings, $2.3 billion at the FRB for discount window borrowings and $0.5 billion serve as collateral for public funds.
[3]	The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment.

The level of delinquencies as of September 30, 2017 was impacted by the disruptions caused by Hurricanes Irma and Maria. The Corporation’s payment channels, collection efforts and loss mitigation operations were interrupted and mostly unavailable for the last 10 days of the quarter.

The following tables present non-covered loans held-in-portfolio by loan class that are in non-performing status or are accruing interest but are past due 90 days or more at September 30, 2017 and December 31, 2016. Accruing loans past due 90 days or more consist primarily of credit cards, Federal Housing Administration (“FHA”) / U.S. Department of Veterans Affairs (“VA”) and other insured mortgage loans, and delinquent mortgage loans which are included in the Corporation’s financial statements pursuant to GNMA’s 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.

At September 30, 2017
			Puerto Rico				U.S. mainland				Popular, Inc.

				Accruing loans				Accruing loans				Accruing loans
		Non-accrual		past-due 90		Non-accrual		past-due 90			Non-accrual	past-due 90
(In thousands)		loans		days or more [1]		loans		days or more [1]			loans	days or more [1]
Commercial multi-family		$	1,060	$	-	$	-	$	-	$	1,060	$	-
Commercial real estate non-owner occupied			23,028		-		3,074		-		26,102		-
Commercial real estate owner occupied			90,346		-		486		-		90,832		-
Commercial and industrial			45,609		384		1,749		-		47,358		384
Construction			99		-		-		-		99		-
Mortgage^[3]			337,967		443,377		14,348		-		352,315		443,377
Leasing			2,684		-		-		-		2,684		-
Legacy			-		-		3,268		-		3,268		-
Consumer:
	Credit cards		-		20,626		13		-		13		20,626
	Home equity lines of credit		-		48		11,960		-		11,960		48
	Personal		19,738		77		2,342		-		22,080		77
	Auto		12,259		-		-		-		12,259		-
	Other		15,876		615		22		-		15,898		615
Total^[2]		$	548,666	$	465,127	$	37,262	$	-	$	585,928	$	465,127

[1] Non-covered loans of $192 million accounted for under ASC Subtopic 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 analysis.

[2] For purposes of this table non-performing loans exclude non-performing loans held-for-sale.

[3] It is the Corporation’s policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to non-performing since the principal repayment is insured. These balances include $157 million of residential mortgage loans in Puerto Rico insured by FHA or guaranteed by the VA that are no longer accruing interest as of September 30, 2017. Furthermore, the Corporation has approximately $57 million in reverse mortgage loans in Puerto Rico which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation’s policy to exclude these balances from non-performing assets.

At December 31, 2016
			Puerto Rico				U.S. mainland				Popular, Inc.

				Accruing loans				Accruing loans				Accruing loans
		Non-accrual		past-due 90		Non-accrual		past-due 90			Non-accrual	past-due 90
(In thousands)		loans		days or more [1]		loans		days or more [1]			loans	days or more [1]
Commercial multi-family		$	664	$	-	$	206	$	-	$	870	$	-
Commercial real estate non-owner occupied			24,611		-		1,195		-		25,806		-
Commercial real estate owner occupied			102,771		-		472		-		103,243		-
Commercial and industrial			31,609		538		1,820		-		33,429		538
Mortgage^[3]			318,194		406,583		11,713		-		329,907		406,583
Leasing			3,062		-		-		-		3,062		-
Legacy			-		-		3,337		-		3,337		-
Consumer:
	Credit cards		-		18,725		30		-		30		18,725
	Home equity lines of credit		-		185		4,762		-		4,762		185
	Personal		20,553		34		1,864		-		22,417		34
	Auto		12,320		-		-		-		12,320		-
	Other		18,724		587		8		-		18,732		587
Total^[2]		$	532,508	$	426,652	$	25,407	$	-	$	557,915	$	426,652

[1] Non-covered loans by $215 million accounted for under ASC Subtopic 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 analysis.

[2] For purposes of this table non-performing loans exclude non-performing loans held-for-sale.

[3] It is the Corporation’s policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to non-performing since the principal repayment is insured. These balances include $181 million of residential mortgage loans in Puerto Rico insured by FHA or guaranteed by the VA that are no longer accruing interest as of December 31, 2016. Furthermore, the Corporation has approximately $68 million in reverse mortgage loans in Puerto Rico which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation’s policy to exclude these balances from non-performing assets.

Covered loans

The following tables present the composition of loans by past due status at September 30, 2017 and December 31, 2016 for covered loans held-in-portfolio. The information considers covered loans accounted for under ASC Subtopic 310-20 and ASC Subtopic 310-30.

September 30, 2017

			Past due
		30-59		60-89		90 days		Total				Covered
(In thousands)		days		days		or more		past due		Current		loans HIP [1]
Mortgage		$	47,726	$	16,104	$	60,973	$	124,803	$	385,408	$	510,211
Consumer			1,503		442		1,004		2,949		11,694		14,643
Total covered loans		$	49,229	$	16,546	$	61,977	$	127,752	$	397,102	$	524,854
[1]	Includes $296 million pledged to secure credit facilities at the FHLB which are not permitted to sell or repledge the collateral.

December 31, 2016

			Past due
			30-59	60-89		90 days		Total				Covered
(In thousands)			days	days		or more		past due			Current	loans HIP [1]
Mortgage		$	25,506	$	12,904	$	69,856	$	108,266	$	448,304	$	556,570
Consumer			751		245		1,074		2,070		14,238		16,308
Total covered loans		$	26,257	$	13,149	$	70,930	$	110,336	$	462,542	$	572,878
[1]	Includes $337 million pledged to secure credit facilities at the FHLB which are not permitted to sell or repledge the collateral.

The following table presents covered loans in non-performing status and accruing loans past-due 90 days or more by loan class at September 30, 2017 and December 31, 2016.

	September 30, 2017				December 31, 2016

	Non-accrual		Accruing loans past		Non-accrual		Accruing loans past
(In thousands)	loans		due 90 days or more		loans		due 90 days or more
Mortgage	$	3,210	$	-	$	3,794	$	-
Consumer		196		-		121		-
Total^[1]	$	3,406	$	-	$	3,915	$	-

[1] Covered loans accounted for under ASC Subtopic 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.

The Corporation accounts for lines of credit with revolving privileges under the accounting guidance of ASC Subtopic 310-20, which requires that any differences between the contractually required loans payment receivable in excess of the initial investment in the loans be accreted into interest income over the life of the loans, if the loan is accruing interest. Covered loans accounted for under ASC Subtopic 310-20 amounted to $10 million at September 30, 2017 (December 31, 2016 - $10 million).

Loans acquired with deteriorated credit quality accounted for under ASC 310-30

The following provides information of loans acquired with evidence of credit deterioration as of the acquisition date, accounted for under the guidance of ASC 310-30.

Loans acquired from Westernbank as part of an FDIC-assisted transaction

The carrying amount of the Westernbank loans consisted of loans determined to be impaired at the time of acquisition, which are accounted for in accordance with ASC Subtopic 310-30 (“credit impaired loans”), and loans that were considered to be performing at the acquisition date, accounted for by analogy to ASC Subtopic 310-30 (“non-credit impaired loans”), as detailed in the following table.

	September 30, 2017						December 31, 2016

	Carrying amount						Carrying amount
(In thousands)		Non-credit impaired loans		Credit impaired loans		Total		Non-credit impaired loans		Credit impaired loans		Total
Commercial real estate	$	902,908	$	14,491	$	917,399	$	985,181	$	14,440	$	999,621
Commercial and industrial		86,795		-		86,795		103,476		-		103,476
Construction		-		170		170		-		1,668		1,668
Mortgage		544,745		21,592		566,337		587,949		25,781		613,730
Consumer		17,075		771		17,846		18,775		1,059		19,834
Carrying amount [1]		1,551,523		37,024		1,588,547		1,695,381		42,948		1,738,329
Allowance for loan losses		(61,034)		(6,066)		(67,100)		(61,855)		(7,022)		(68,877)
Carrying amount, net of allowance	$	1,490,489	$	30,958	$	1,521,447	$	1,633,526	$	35,926	$	1,669,452
[1] The carrying amount of loans acquired from Westernbank and accounted for under ASC 310-30 which remains subject to the loss sharing agreement with the FDIC amounted to approximately $515 million as of September 30, 2017 and $563 million as of December 31, 2016.

The outstanding principal balance of Westernbank loans accounted pursuant to ASC Subtopic 310-30, amounted to $1.9 billion at September 30, 2017 (December 31, 2016 - $2.1 billion). At September 30, 2017, none of the acquired loans from the Westernbank FDIC-assisted transaction accounted for under ASC Subtopic 310-30 were considered non-performing loans. Therefore, interest income, through accretion of the difference between the carrying amount of the loans and the expected cash flows, was recognized on all acquired loans.

Changes in the carrying amount and the accretable yield for the Westernbank loans accounted pursuant to the ASC Subtopic 310-30, for the quarters and nine months ended September 30, 2017 and 2016, were as follows:

	Activity in the accretable yield
	Westernbank loans ASC 310-30
	For the quarters ended
	September 30, 2017						September 30, 2016
		Non-credit		Credit				Non-credit		Credit
(In thousands)		impaired loans		impaired loans		Total		impaired loans		impaired loans		Total
Beginning balance	$	936,204	$	6,464	$	942,668	$	1,061,971	$	9,709	$	1,071,680
Accretion		(34,064)		(726)		(34,790)		(38,597)		(993)		(39,590)
Change in expected cash flows		1,842		(391)		1,451		6,992		(390)		6,602
Ending balance	$	903,982	$	5,347	$	909,329	$	1,030,366	$	8,326	$	1,038,692

	Activity in the accretable yield
	Westernbank loans ASC 310-30
	For the nine months ended
	September 30, 2017						September 30, 2016
		Non-credit		Credit				Non-credit		Credit
		impaired		impaired				impaired		impaired
(In thousands)		loans		loans		Total		loans		loans		Total
Beginning balance	$	1,001,908	$	8,179	$	1,010,087	$	1,105,732	$	6,726	$	1,112,458
Accretion		(105,759)		(2,411)		(108,170)		(125,734)		(5,865)		(131,599)
Change in expected cash flows		7,833		(421)		7,412		50,368		7,465		57,833
Ending balance	$	903,982	$	5,347	$	909,329	$	1,030,366	$	8,326	$	1,038,692

		Carrying amount of Westernbank loans accounted for pursuant to ASC 310-30
		For the quarters ended
		September 30, 2017						September 30, 2016
			Non-credit		Credit				Non-credit		Credit
(In thousands)			impaired loans		impaired loans		Total		impaired loans		impaired loans		Total
Beginning balance		$	1,579,196	$	38,591	$	1,617,787	$	1,754,613	$	45,330	$	1,799,943
Accretion			34,064		726		34,790		38,597		993		39,590
Collections / loan sales / charge-offs			(61,737)		(2,293)		(64,030)		(69,030)		(2,964)		(71,994)
Ending balance^[1]		$	1,551,523	$	37,024	$	1,588,547	$	1,724,180	$	43,359	$	1,767,539
	Allowance for loan losses
	ASC 310-30 Westernbank loans		(61,034)		(6,066)		(67,100)		(62,114)		(7,457)		(69,571)
Ending balance, net of ALLL		$	1,490,489	$	30,958	$	1,521,447	$	1,662,066	$	35,902	$	1,697,968
[1]	The carrying amount of loans acquired from Westernbank and accounted for under ASC 310-30 which remain subject to the loss sharing agreement with the FDIC amounted to approximately $ 515 million as of September 30, 2017 (September 30, 2016- $578 million).

		Carrying amount of Westernbank loans accounted for pursuant to ASC 310-30
		For the nine months ended
		September 30, 2017						September 30, 2016
			Non-credit		Credit				Non-credit		Credit
			impaired		impaired				impaired		impaired
(In thousands)			loans		loans		Total		loans		loans		Total
Beginning balance		$	1,695,381	$	42,948	$	1,738,329	$	1,898,146	$	76,355	$	1,974,501
Accretion			105,759		2,411		108,170		125,734		5,865		131,599
Collections / loan sales / charge-offs^[1]			(249,617)		(8,335)		(257,952)		(299,700)		(38,861)		(338,561)
Ending balance^[2]		$	1,551,523	$	37,024	$	1,588,547	$	1,724,180	$	43,359	$	1,767,539
Allowance for loan losses
	ASC 310-30 Westernbank loans		(61,034)		(6,066)		(67,100)		(62,114)		(7,457)		(69,571)
Ending balance, net of ALLL		$	1,490,489	$	30,958	$	1,521,447	$	1,662,066	$	35,902	$	1,697,968
[1]	For the nine months ended September 30, 2016, includes the impact of the bulk sale of loans with a carrying value of approximately $99 million.
[2]	The carrying amount of loans acquired from Westernbank and accounted for under ASC 310-30 which remain subject to the loss sharing agreement with the FDIC amounted to approximately $515 million as of September 30, 2017 (September 30, 2016- $578 million).

Other loans acquired with deteriorated credit quality

The outstanding principal balance of other acquired loans accounted pursuant to ASC Subtopic 310-30, amounted to $598 million at September 30, 2017 (December 31, 2016 - $700 million). At September 30, 2017, none of the other acquired loans accounted under ASC Subtopic 310-30 were considered non-performing loans. Therefore, interest income, through accretion of the difference between the carrying amount of the loans and the expected cash flows, was recognized on all acquired loans.

Changes in the carrying amount and the accretable yield for the other acquired loans accounted pursuant to the ASC Subtopic 310-30, for the quarters and nine months ended September 30, 2017 and 2016 were as follows:



Activity in the accretable yield - other acquired loans ASC 310-30
	For the quarter ended			For the quarter ended
(In thousands)		September 30, 2017		September 30, 2016
Beginning balance		$	303,004	$	272,609
Additions			2,882		3,809
Accretion			(7,945)		(8,689)
Change in expected cash flows			(7,926)		8,672
Ending balance		$	290,015	$	276,401


Activity in the accretable yield - other acquired loans ASC 310-30
	For the nine months ended			For the nine months ended
(In thousands)		September 30, 2017		September 30, 2016
Beginning balance		$	278,896	$	221,128
Additions			8,737		12,320
Accretion			(25,203)		(25,974)
Change in expected cash flows			27,585		68,927
Ending balance		$	290,015	$	276,401

Carrying amount of other acquired loans accounted for pursuant to ASC 310-30
		For the quarter ended		For the quarter ended
(In thousands)		September 30, 2017		September 30, 2016
Beginning balance		$	550,877		562,745
Additions			4,792		8,349
Accretion			7,945		8,689
Collections and charge-offs			(18,215)		(17,861)
Ending balance		$	545,399	$	561,922
	Allowance for loan losses ASC 310-30 other acquired loans		(70,930)		(18,550)
Ending balance, net of ALLL		$	474,469	$	543,372


Carrying amount of other acquired loans accounted for pursuant to ASC 310-30
	For the nine months ended			For the nine months ended
(In thousands)		September 30, 2017		September 30, 2016
Beginning balance		$	562,695	$	564,050
Purchase accounting adjustments related to the Doral Bank Transaction (Refer to Note 15)			-		(4,707)
Additions			14,671		26,754
Accretion			25,203		25,974
Collections and charge-offs			(57,170)		(50,149)
Ending balance		$	545,399	$	561,922
	Allowance for loan losses ASC 310-30 other acquired loans		(70,930)		(18,550)
Ending balance, net of ALLL		$	474,469	$	543,372

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details