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Basis of presentation
 3 Months Ended
Mar. 31, 2024
Basis of presentation [Abstract]  
Basis of presentation
Note 2 – Basis of Presentation
 
Basis of Presentation
The (unaudited) interim Consolidated Financial Statements are, in the opinion of management, a fair statement of the results
 
for the
periods reported
 
and include
 
all necessary
 
adjustments, all
 
of a
 
normal recurring
 
nature, for
 
a fair
 
statement of
 
such results.
 
The
consolidated statement of financial
 
condition presented as of
 
December 31, 2023 was
 
derived from audited Consolidated Financial
Statements of the Corporation for the year ended
 
December 31, 2023.
Certain
 
information
 
and
 
notes
 
to
 
the
 
financial
 
statements
 
disclosures
 
which
 
would
 
normally
 
be
 
included
 
in
 
financial
 
statements
prepared in
 
accordance
 
with Accounting
 
Principles
 
Generally Accepted
 
in
 
the
 
United
 
States
 
of
 
America
 
(US
 
GAAP), have
 
been
condensed or omitted from the unaudited financial statements pursuant
 
to the rules and regulations of the
 
Securities and Exchange
Commission.
 
Accordingly,
 
these
 
financial
 
statements
 
should
 
be
 
read
 
in
 
conjunction
 
with
 
the
 
audited
 
Consolidated
 
Financial
Statements of
 
the Corporation
 
for the
 
year ended
 
December 31,
 
2023,
 
included in
 
the 2023
 
Form 10-K.
 
Operating results
 
for the
interim periods disclosed herein are not necessarily
 
indicative of the results that may be expected
 
for a full year or any future period.
 
Tax impact on Intercompany Distributions
The net
 
income for
 
the quarter
 
ended March
 
31, 2024,
 
included $
22.9
 
million of
 
expenses, of
 
which $
16.5
 
million is
 
reflected in
income tax expense and $
6.4
 
million is reflected in other operating expenses, related to an out-of-period adjustment associated with
the Corporation’s U.S. subsidiary’s non-payment of taxes on certain intercompany distributions
 
to the Bank Holding Company (BHC)
in Puerto
 
Rico, a
 
foreign corporation
 
for U.S.
 
tax purposes.
 
The adjustment
 
corrected errors
 
for income
 
tax expense
 
that should
have been recognized of $
5.5
 
million and $
5.4
 
million in the years 2023 and 2022, respectively,
 
and an aggregate of $
5.6
 
million, in
the years prior to 2022. The $
6.4
 
million recognized as other operating expense corresponded to interest due
 
up to March 31, 2024
on the related late payment of the withholding tax, of which approximately $
3.0
 
million correspond to years prior to 2022. As a result
of
 
this
 
adjustment, the
 
deferred tax
 
asset related
 
to
 
NOL of
 
the BHC
 
and
 
its
 
related valuation
 
allowance was
 
reduced by
 
$
53.7
million. The
 
Corporation evaluated the
 
impact of
 
the out-of-period
 
adjustment and
 
concluded it
 
was not
 
material to
 
any previously
issued
 
interim or
 
annual consolidated
 
financial statements
 
and the
 
adjustment is
 
not expected
 
to
 
be material
 
to
 
the year
 
ending
December 31, 2024.
 
Use of Estimates in the Preparation of Financial Statements
The preparation of financial
 
statements in conformity with
 
accounting principles generally accepted in
 
the United States
 
of America
requires management to make
 
estimates and assumptions that
 
affect the reported
 
amounts of assets and
 
liabilities and contingent
assets
 
and
 
liabilities
 
at
 
the
 
date
 
of
 
the
 
financial
 
statements,
 
and
 
the
 
reported
 
amounts
 
of
 
revenues
 
and
 
expenses
 
during
 
the
reporting period. Actual results could differ from those estimates.