Income taxes (Tables)

6 Months Ended

Jun. 30, 2022

Components of Deferred Tax Assets and Liabilities

			June 30, 2022
(In thousands)			PR		US		Total
Deferred tax assets:
Tax credits available for carryforward		$	261	$	2,781	$	3,042
Net operating loss and other carryforward available			119,891		652,204		772,095
Postretirement and pension benefits			52,779		-		52,779
Deferred loan origination fees/cost			21		-		21
Allowance for credit losses			233,382		31,025		264,407
Accelerated depreciation			5,246		7,268		12,514
FDIC-assisted transaction			152,665		-		152,665
Intercompany deferred gains			2,477		-		2,477
Lease liability			30,152		21,967		52,119
Unrealized net gain on trading and available-for-sale securities			196,221		16,138		212,359
Difference in outside basis from pass-through entities			46,112		-		46,112
Other temporary differences			33,701		8,291		41,992
	Total gross deferred tax assets		872,908		739,674		1,612,582
Deferred tax liabilities:
Indefinite-lived intangibles			78,300		52,874		131,174
Right of use assets			27,927		18,499		46,426
Deferred loan origination fees/cost			1,431		3,661		5,092
Other temporary differences			43,044		1,530		44,574
	Total gross deferred tax liabilities		150,702		76,564		227,266
Valuation allowance			134,495		434,471		568,966
Net deferred tax asset		$	587,711	$	228,639	$	816,350
			December 31, 2021
(In thousands)			PR		US		Total
Deferred tax assets:
Tax credits available for carryforward		$	261	$	2,781	$	3,042
Net operating loss and other carryforward available			112,331		665,164		777,495
Postretirement and pension benefits			57,002		-		57,002
Deferred loan origination fees/cost			2,788		-		2,788
Allowance for credit losses			233,500		31,872		265,372
Deferred gains			1,642		-		1,642
Accelerated depreciation			5,246		7,422		12,668
FDIC-assisted transaction			152,665		-		152,665
Lease liability			31,211		23,894		55,105
Difference in outside basis from pass-through entities			54,781		-		54,781
Other temporary differences			38,512		8,418		46,930
	Total gross deferred tax assets		689,939		739,551		1,429,490
Deferred tax liabilities:
Indefinite-lived intangibles			76,635		51,150		127,785
Unrealized net gain (loss) on trading and available-for-sale securities			4,329		2,817		7,146
Right of use assets			29,025		20,282		49,307
Deferred loan origination fees/cost			-		3,567		3,567
Other temporary differences			43,856		1,530		45,386
	Total gross deferred tax liabilities		153,845		79,346		233,191
Valuation allowance			128,557		410,970		539,527
Net deferred tax asset		$	407,537	$	249,235	$	656,772

Reconciliation of Unrecognized Tax Benefits

(In millions)		2022		2021
Balance at January 1	$	3.5	$	14.8
Balance at March 31	$	3.5	$	14.8
Balance at June 30	$	3.5	$	14.8

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
		June 30, 2022				June 30, 2021
(In thousands)		Amount	% of pre-tax income			Amount	% of pre-tax income
Computed income tax expense at statutory rates	$	103,362	38	%	$	109,189	38	%
Net benefit of tax exempt interest income		(41,336)	(15)			(36,840)	(13)
Deferred tax asset valuation allowance		2,047	-			5,832	2
Difference in tax rates due to multiple jurisdictions		(6,817)	(3)			(4,881)	(2)
Effect of income subject to preferential tax rate		(3,097)	(1)			(1,405)	(1)
Adjustment due to estimate on the annual effective rate		6,939	3			(405)	-
State and local taxes		3,566	1			2,530	1
Others		(452)	-			(927)	-
Income tax expense	$	64,212	23	%	$	73,093	25	%

		Six months ended
		June 30, 2022				June 30, 2021
(In thousands)		Amount	% of pre-tax income			Amount	% of pre-tax income
Computed income tax expense at statutory rates	$	201,674	38	%	$	236,488	38	%
Net benefit of tax exempt interest income		(77,825)	(15)			(71,003)	(11)
Deferred tax asset valuation allowance		5,938	1			16,153	3
Difference in tax rates due to multiple jurisdictions		(13,310)	(3)			(15,829)	(3)
Effect of income subject to preferential tax rate		(7,042)	(1)			(4,734)	(1)
Adjustment due to estimate on the annual effective rate		559	-			(10,733)	(2)
State and local taxes		7,231	1			2,591	-
Others		(2,534)	-			(3,009)	-
Income tax expense	$	114,691	21	%	$	149,924	24	%