Income taxes (Tables)

3 Months Ended

Mar. 31, 2021

Components of Deferred Tax Assets and Liabilities

			March 31, 2021
(In thousands)			PR		US		Total
Deferred tax assets:
Tax credits available for carryforward		$	3,003	$	2,781	$	5,784
Net operating loss and other carryforward available			130,535		696,884		827,419
Postretirement and pension benefits			77,832		-		77,832
Deferred loan origination fees			17,041		(3,092)		13,949
Allowance for credit losses			321,981		33,545		355,526
Accelerated depreciation			4,400		6,496		10,896
FDIC-assisted transaction			152,665		-		152,665
Intercompany deferred gains			1,412		-		1,412
Lease liability			21,967		18,844		40,811
Difference in outside basis from pass-through entities			56,932		-		56,932
Other temporary differences			37,968		7,944		45,912
	Total gross deferred tax assets		825,736		763,402		1,589,138
Deferred tax liabilities:
Indefinite-lived intangibles			74,138		43,552		117,690
Unrealized net gain (loss) on trading and available-for-sale securities			39,536		5,027		44,563
Right of use assets			19,883		17,181		37,064
Other temporary differences			51,553		1,332		52,885
	Total gross deferred tax liabilities		185,110		67,092		252,202
Valuation allowance			118,575		415,079		533,654
Net deferred tax asset		$	522,051	$	281,231	$	803,282
			December 31, 2020
(In thousands)			PR		US		Total
Deferred tax assets:
Tax credits available for carryforward		$	3,003	$	5,269	$	8,272
Net operating loss and other carryforward available			124,355		698,842		823,197
Postretirement and pension benefits			80,179		-		80,179
Deferred loan origination fees			12,079		(2,652)		9,427
Allowance for loan losses			373,010		38,606		411,616
Accelerated depreciation			3,439		5,390		8,829
FDIC-assisted transaction			152,665		-		152,665
Intercompany deferred gains			1,728		-		1,728
Lease liability			22,790		18,850		41,640
Difference in outside basis from pass-through entities			61,222		-		61,222
Other temporary differences			38,954		7,344		46,298
	Total gross deferred tax assets		873,424		771,649		1,645,073
Deferred tax liabilities:
Indefinite-lived intangibles			73,305		37,745		111,050
Unrealized net gain (loss) on trading and available-for-sale securities			67,003		8,595		75,598
Right of use assets			20,708		15,510		36,218
Other temporary differences			50,247		1,169		51,416
	Total gross deferred tax liabilities		211,263		63,019		274,282
Valuation allowance			112,871		407,225		520,096
Net deferred tax asset		$	549,290	$	301,405	$	850,695

Reconciliation of Unrecognized Tax Benefits

(In millions)		2021		2020
Balance at January 1	$	14.8	$	16.3
Balance at March 31	$	14.8	$	16.3

PR

Differences Between Income Tax Expense (Benefit) Applicable to Income Before Income Taxes and Amount Computed by Applying the Statutory Tax Rate in Puerto Rico

		Quarters ended
		March 31, 2021				March 31, 2020
(In thousands)		Amount	% of pre-tax income			Amount	% of pre-tax income
Computed income tax expense at statutory rates	$	127,299	38	%	$	14,025	38	%
Net benefit of tax exempt interest income		(34,163)	(10)			(32,896)	(88)
Deferred tax asset valuation allowance		10,321	3			5,538	15
Difference in tax rates due to multiple jurisdictions		(10,948)	(3)			8,875	24
Effect of income subject to preferential tax rate		(3,329)	(1)			(1,900)	(5)
Adjustment due to estimate on the annual effective rate		(10,328)	(3)			9,004	24
State and local taxes		61	-			(555)	(2)
Others		(2,082)	(1)			1,006	2
Income tax expense	$	76,831	23	%	$	3,097	8	%