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Fair value measurement (Tables)

6 Months Ended

Jun. 30, 2018

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

At June 30, 2018

(In thousands)	Level 1		Level 2		Level 3		Total

RECURRING FAIR VALUE MEASUREMENTS

Assets
Debt securities available-for-sale:
U.S. Treasury securities	$	552,388	$	4,424,577	$	-	$	4,976,965
Obligations of U.S. Government sponsored entities		-		531,876		-		531,876
Obligations of Puerto Rico, States and political subdivisions		-		6,643		-		6,643
Collateralized mortgage obligations - federal agencies		-		809,669		-		809,669
Mortgage-backed securities		-		4,214,912		1,264		4,216,176
Other		-		681		-		681
Total debt securities available-for-sale	$	552,388	$	9,988,358	$	1,264	$	10,542,010

Trading account debt securities, excluding derivatives:
U.S. Treasury securities	$	4,956	$	-	$	-	$	4,956
Obligations of Puerto Rico, States and political subdivisions		-		180		-		180
Collateralized mortgage obligations		-		50		670		720
Mortgage-backed securities		-		32,256		43		32,299
Other		-		2,976		506		3,482
Total trading account debt securities, excluding derivatives	$	4,956	$	35,462	$	1,219	$	41,637
Equity securities	$	-	$	12,798	$	-	$	12,798
Mortgage servicing rights		-		-		164,025		164,025
Derivatives		-		15,763		-		15,763
Total assets measured at fair value on a recurring basis	$	557,344	$	10,052,381	$	166,508	$	10,776,233
Liabilities
Derivatives	$	-	$	(14,223)	$	-	$	(14,223)
Total liabilities measured at fair value on a recurring basis	$	-	$	(14,223)	$	-	$	(14,223)

At December 31, 2017

(In thousands)	Level 1		Level 2		Level 3		Total

RECURRING FAIR VALUE MEASUREMENTS

Assets
Debt securities available-for-sale:
U.S. Treasury securities	$	503,385	$	3,424,779	$	-	$	3,928,164
Obligations of U.S. Government sponsored entities		-		608,933		-		608,933
Obligations of Puerto Rico, States and political subdivisions		-		6,609		-		6,609
Collateralized mortgage obligations - federal agencies		-		943,753		-		943,753
Mortgage-backed securities		-		4,687,374		1,288		4,688,662
Other		-		802		-		802
Total debt securities available-for-sale	$	503,385	$	9,672,250	$	1,288	$	10,176,923

Trading account debt securities, excluding derivatives:
U.S. Treasury securities	$	261	$	-	$	-	$	261
Obligations of Puerto Rico, States and political subdivisions		-		159		-		159
Collateralized mortgage obligations		-		-		529		529
Mortgage-backed securities		-		29,237		43		29,280
Other		-		2,988		529		3,517
Total trading account debt securities, excluding derivatives	$	261	$	32,384	$	1,101	$	33,746
Equity securities	$	-	$	11,076	$	-	$	11,076
Mortgage servicing rights		-		-		168,031		168,031
Derivatives		-		16,719		-		16,719
Total assets measured at fair value on a recurring basis	$	503,646	$	9,732,429	$	170,420	$	10,406,495
Liabilities
Derivatives	$	-	$	(14,431)	$	-	$	(14,431)
Contingent consideration		-		-		(164,858)		(164,858)
Total liabilities measured at fair value on a recurring basis	$	-	$	(14,431)	$	(164,858)	$	(179,289)

Fair Value Measurements, Nonrecurring [Table Text Block]

Six months ended June 30, 2018

(In thousands)		Level 1		Level 2		Level 3		Total

NONRECURRING FAIR VALUE MEASUREMENTS
Assets											Write-downs
	Loans^[1]	$	-	$	-	$	84,075	$	84,075	$	(18,767)
	Other real estate owned^[2]		-		-		33,457		33,457		(6,967)
	Other foreclosed assets^[2]		-		-		2,597		2,597		(970)
Total assets measured at fair value on a nonrecurring basis		$	-	$	-	$	120,129	$	120,129	$	(26,704)

Six moths ended June 30, 2017

(In thousands)		Level 1		Level 2		Level 3		Total

NONRECURRING FAIR VALUE MEASUREMENTS
Assets											Write-downs
	Loans^[1]	$	-	$	-	$	61,328	$	61,328	$	(16,546)
	Other real estate owned^[2]		-		-		110,676		110,676		(14,760)
	Other foreclosed assets^[2]		-		-		1,682		1,682		(185)
Total assets measured at fair value on a nonrecurring basis		$	-	$	-	$	173,686	$	173,686	$	(31,491)

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Quarter ended June 30, 2018
		MBS		CMOs				Other
		classified		classified				securities
		as debt		as trading		MBS		classified
		securities		account		classified as		as trading		Mortgage
		available-		debt		trading account		account debt		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		debt securities		securities		rights		assets		consideration^[1]		liabilities
Balance at March 31, 2018		$	1,263	$	488	$	43	$	519	$	166,281	$	168,594	$	(170,970)	$	(170,970)
Gains (losses) included in earnings			-		6		-		(13)		(4,622)		(4,629)		-		-
Gains (losses) included in OCI			1		-		-		-		-		1		-		-
Additions			-		237		-		-		2,366		2,603		-		-
Settlements			-		(61)		-		-		-		(61)		170,970		170,970
Balance at June 30, 2018		$	1,264	$	670	$	43	$	506	$	164,025	$	166,508	$	-	$	-
Changes in unrealized gains
	(losses) included in earnings relating to assets still held
	at June 30, 2018	$	-	$	6	$	-	$	6	$	-	$	12	$	-	$	-
[1] Effective May 22, 2018, the Corporation entered into a Termination Agreement with the FDIC to terminate the Corporation’s loss share arrangement ahead of their contractual maturities. Refer to Note 9 for additional information.

	Six months ended June 30, 2018
		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^[1]		liabilities
Balance at January 1, 2018		$	1,288	$	529	$	43	$	529	$	168,031	$	170,420	$	(164,858)	$	(164,858)
Gains (losses) included in earnings			-		6		-		(23)		(8,929)		(8,946)		(6,112)		(6,112)
Gains (losses) included in OCI			2		-		-		-		-		2		-		-
Additions			-		253		-		-		4,923		5,176		-		-
Settlements			(26)		(118)		-		-		-		(144)		170,970		170,970
Balance at June 30, 2018		$	1,264	$	670	$	43	$	506	$	164,025	$	166,508	$	-	$	-
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at June 30, 2018	$	-	$	6	$	-	$	11	$	-	$	17	$	-	$	-
[1] Effective May 22, 2018, the Corporation entered into a Termination Agreement with the FDIC to terminate the Corporation’s loss share arrangement ahead of their contractual maturities. Refer to Note 9 for additional information.

	Quarter ended June 30, 2017
		MBS		CMOs				Other
		classified		classified		MBS		securities
		as debt		as trading		classified as		classified
		securities		account		trading		as trading		Mortgage
		available-		debt		account debt		account debt		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		securities		securities		rights		assets		consideration		liabilities
Balance at March 31, 2017		$	1,289	$	1,061	$	4,345	$	583	$	193,698	$	200,976	$	(160,543)	$	(160,543)
Gains (losses) included in earnings			-		(1)		(4)		(26)		(8,046)		(8,077)		(3,125)		(3,125)
Additions			-		8		168		-		3,076		3,252		-		-
Sales			-		(160)		-		-		-		(160)		-		-
Settlements			-		(50)		(175)		-		-		(225)		-		-
Balance at June 30, 2017		$	1,289	$	858	$	4,334	$	557	$	188,728	$	195,766	$	(163,668)	$	(163,668)
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at June 30, 2017	$	-	$	(2)	$	4	$	12	$	(2,899)	$	(2,885)	$	(3,125)	$	(3,125)

	Six months ended June 30, 2017
		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, 2017		$	1,392	$	1,321	$	4,755	$	602	$	196,889	$	204,959	$	(153,158)	$	(153,158)
Gains (losses) included in earnings			-		(5)		(47)		(45)		(14,000)		(14,097)		(10,510)		(10,510)
Gains (losses) included in OCI			10		-		-		-		-		10		-		-
Additions			-		8		332		-		5,839		6,179		-		-
Sales			-		(365)		(156)		-		-		(521)		-		-
Settlements			(25)		(101)		(550)		-		-		(676)		-		-
Transfers out of Level 3			(88)		-		-		-		-		(88)		-		-
Balance at June 30, 2017		$	1,289	$	858	$	4,334	$	557	$	188,728	$	195,766	$	(163,668)	$	(163,668)
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at June 30, 2017	$	-	$	(6)	$	(23)	$	21	$	(3,622)	$	(3,630)	$	(10,510)	$	(10,510)

Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Table Text Block]

	Quarter ended June 30, 2018				Six months ended June 30, 2018
			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
FDIC loss share expense	$	-	$	-	$	(6,112)	$	-
Mortgage banking activities		(4,622)		-		(8,929)		-
Trading account profit (loss)		(7)		12		(17)		17
Total	$	(4,629)	$	12	$	(15,058)	$	17

	Quarter ended June 30, 2017				Six months ended June 30, 2017
			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
FDIC loss share expense	$	(3,125)	$	(3,125)	$	(10,510)	$	(10,510)
Mortgage banking activities		(8,046)		(2,899)		(14,000)		(3,622)
Trading account profit (loss)		(31)		14		(97)		(8)
Total	$	(11,202)	$	(6,010)	$	(24,607)	$	(14,140)

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

		Fair value
		at June 30,
(In thousands)		2018	Valuation technique	Unobservable inputs	Weighted average (range)
CMO's - trading	$	670	Discounted cash flow model	Weighted average life	2.0 years (1.4 - 2.2 years)
				Yield	3.8% (3.7% - 4.2%)
				Prepayment speed	19.3% (16.6% - 21.4%)
Other - trading	$	506	Discounted cash flow model	Weighted average life	5.2	years
				Yield	12.2	%
				Prepayment speed	10.8	%
Mortgage servicing rights	$	164,025	Discounted cash flow model	Prepayment speed	4.7% (0.2% - 15.9%)
				Weighted average life	7.1 years (0.1 - 16.6 years)
				Discount rate	11.2% (9.5% - 15.0%)
Loans held-in-portfolio	$	76,984 ^[1]	External appraisal	Haircut applied on
				external appraisals	12.1% (10.0%-15.0%)
Other real estate owned	$	30,053 ^[2]	External appraisal	Haircut applied on
				external appraisals	23.7% (15.0% - 30.0%)