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FAIR VALUE (Tables)
 12 Months Ended
Dec. 31, 2016
Assets and Liabilities Measured at Fair Value on Recurring Basis [Table Text Block]
Assets and liabilities measured at fair value on a recurring basis are summarized below:
As of December 31, 2016As of December 31, 2015
Fair Value Measurements Using Fair Value Measurements Using
(In thousands)Level 1Level 2Level 3Assets/Liabilities at Fair ValueLevel 1Level 2Level 3Assets/Liabilities at Fair Value
Assets:
Securities available for sale :
Equity securities$408$-$-$408$-$-$-$-
U.S. Treasury Securities7,509--7,5097,497--7,497
Noncallable U.S. agency debt-356,919-356,919-315,467-315,467
Callable U.S. agency debt and MBS-1,469,463-1,469,463-1,509,807-1,509,807
Puerto Rico government obligations-24,7072,12126,828-26,3271,89028,217
Private label MBS--20,69320,693--25,30725,307
Other investments--100100--100100
Derivatives, included in assets:
Purchased interest rate cap agreements-554-554-806-806
Liabilities:
Derivatives, included in liabilities:
Written interest rate cap agreement-552-552-798-798
Forward contracts-201-201-123-123
Schedule of Changes in Fair Value [Table Text Block]
The table below presents a reconciliation of the beginning and ending balances of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2016, 2015, and 2014:
201620152014
Level 3 Instruments Only Securities Available for Sale (1)Securities Available for Sale (1)Securities Available for Sale (1)
(In thousands)
Beginning balance$27,297$36,212$43,292
Total gain (losses) (realized/unrealized):
Included in earnings(387)(628)(388)
Included in other comprehensive income1,5861,6232,404
Purchases-1005,123
Sales--(4,855)
Principal repayments and amortization(5,582)(10,010)(9,364)
Ending balance$22,914$27,297$36,212
___________________
(1) Amounts mostly related to private label mortgage-backed securities.
Impairment or Valuation Adjustments were Recorded for Assets Recognized at Fair Value [Table Text Block]
Carrying value as of December 31, 2016(Losses) recorded for the Year Ended December 31, 2016
Level 1Level 2Level 3
(In thousands)
Loans receivable (1)$-$-$442,081$(49,884)
OREO (2)--137,681(7,873)
Mortgage servicing rights (3)--26,244(325)
(1)Consists mainly of impaired commercial and construction loans. The impairment was generally measured based on the fair value of the collateral. The fair value was derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g., absorption rates), which are not market observable.
(2)The fair value was derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the properties (e.g., absorption rates and net operating income of income producing properties) that are not market observable. Losses were related to market valuation adjustments after the transfer of the loans to the OREO portfolio.
(3)Fair value adjustments to mortgage servicing rights were mainly due to assumptions associated with mortgage prepayment rates. The Corporation carries its mortgage servicing rights at the lower of cost or market, measured at fair value on a non-recurring basis. Assumptions for the value of mortgage servicing rights include: Prepayment rate 6.12%, Discount rate 11.19%.

As of December 31, 2015, impairment or valuation adjustments were recorded for assets recognized at fair value on a non-recurring basis as shown in the following table:
Carrying value as of December 31, 2015(Losses) Gain recorded for the Year Ended December 31, 2015
Level 1Level 2Level 3
(In thousands)
Loans receivable (1)$-$-$303,095$(27,245)
OREO (2)--146,801(10,494)
Mortgage servicing rights (3)--24,282(228)
Loans Held For Sale (4)--8,135338
(1)Consists mainly of impaired commercial and construction loans. The impairment was generally measured based on the fair value of the collateral. The fair value was derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g., absorption rates), which are not market observable.
(2) The fair value was derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the properties (e.g., absorption rates and net operating income of income producing properties) that are not market observable. Losses were related to market valuation adjustments after the transfer of the loans to the OREO portfolio.
(3) Fair value adjustments to the mortgage servicing rights were mainly due to assumptions associated with mortgage prepayments rates. The Corporation carries its mortgage servicing rights at the lower of cost or market, measured at fair value on a non-recurring basis. Assumptions for the value of mortgage servicing rights include: Prepayment rate 9.07%, Discount rate 10.65%.
(4) The value of these loans was derived from external appraisals, adjusted for specific characteristics of the loans.

As of December 31, 2014, impairment or valuation adjustments were recorded for assets recognized at fair value on a nonrecurring basis as shown in the following table:
Carrying value as of December 31, 2014(Losses) recorded for the Year Ended December 31, 2014
Level 1Level 2Level 3
(In thousands)
Loans receivable (1)$-$-$446,816$(43,318)
OREO (2)--124,003(9,656)
Mortgage servicing rights (3)--22,838(228)
Loans Held For Sale (4)--54,641-
(1)Consists mainly of impaired commercial and construction loans. The impairment was generally measured based on the fair value of the collateral. The fair value was derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g., absorption rates), which are not market observable.
(2)The fair value was derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the properties (e.g., absorption rates and net operating income of income producing properties) that are not market observable. Losses were related to market valuation adjustments after the transfer of the loans to the OREO portfolio.
(3)Fair value adjustments to the mortgage servicing rights were mainly due to assumptions associated with mortgage prepayments rates. The Corporation carries its mortgage servicing rights at the lower of cost or market, measured at fair value on a non-recurring basis. Assumptions for the value of mortgage servicing rights include: Prepayment rate 9.74%, Discount rate 10.60%.
(4)The value of these loans was derived from external appraisals, adjusted for specific characteristics of the loans.
Estimated Fair Value and Carrying Value of Financial Instruments [Table Text Block]
The following tables present the carrying value and the estimated fair value of financial instruments as of December 31, 2016 and 2015:
Total Carrying Amount in Statement of Financial Condition December 31, 2016Fair Value Estimate December 31, 2016Level 1Level 2Level 3
(In thousands)
Assets:
Cash and due from banks and money
market investments$299,685$299,685$299,685$-$-
Investment securities available
for sale1,881,9201,881,9207,9171,851,08922,914
Investment securities held to maturity156,190132,759--132,759
Other equity securities42,99242,992-42,992-
Loans held for sale50,00652,707-42,9219,786
Loans, held for investment8,886,873
Less: allowance for loan and lease losses(205,603)
Loans held for investment, net of
allowance$8,681,2708,455,104--8,455,104
Derivatives, included in assets554554-554-
Liabilities:
Deposits8,831,2058,838,606-8,838,606-
Securities sold under agreements to
repurchase300,000335,840-335,840-
Advances from FHLB670,000669,687-669,687-
Other borrowings216,187171,374--171,374
Derivatives, included in liabilities753753-753-

Total Carrying Amount in Statement of Financial Condition December 31, 2015Fair Value Estimate December 31, 2015Level 1Level 2Level 3
(In thousands)
Assets:
Cash and due from banks and money
market investments$752,458$752,458$752,458$-$-
Investment securities available
for sale1,886,3951,886,3957,4971,851,60127,297
Investment securities held-to-maturity161,483131,544--131,544
Other equity securities32,16932,169-32,169-
Loans held for sale35,86936,844-28,7098,135
Loans held for investment9,112,382
Less: allowance for loan and lease
losses(240,710)
Loans held for investment, net of
allowance$8,871,6728,768,152--8,768,152
Derivatives, included in assets806806-806-
Liabilities:
Deposits9,338,1249,334,073-9,334,073-
Securities sold under agreements to
repurchase700,000752,048-752,048-
Advances from FHLB455,000453,182-453,182-
Other borrowings226,492142,846--142,846
Derivatives, included in liabilities921921-921-
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]
Qualitative information regarding the fair value measurements for Level 3 financial instruments are as follows:
December 31, 2016
MethodInputs
LoansIncome, Market, Comparable Sales, Discounted Cash FlowsExternal appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors
OREOIncome, Market, Comparable Sales, Discounted Cash FlowsExternal appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors
Mortgage servicing rightsDiscounted Cash FlowsWeighted-average prepayment rate of 6.12%; weighted average discount rate of 11.19%
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]
The table below presents qualitative information for significant assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2016:
December 31, 2016
(In thousands)Fair ValueValuation TechniqueUnobservable InputRange
Investment securities available for sale:
Private label MBS$20,693Discounted cash flowsDiscount rate14.1%
Prepayment rate6.5% -22.5% (Weighted Average 13.8%)
Projected Cumulative Loss Rate0.2% - 8.6% (Weighted Average 4%)
Puerto Rico government obligations2,121Discounted cash flowsPrepayment rate3.00%
Schedule Of Changes In Unrealized Gains Losses [Table Text Block]
The table below summarizes changes in unrealized gains and losses recorded in earnings for the years ended December 31, 2016, 2015, and 2014 for Level 3 assets and liabilities that are still held at the end of each year:
Changes in Unrealized Losses (Year Ended December 31, 2016)Changes in Unrealized Losses (Year Ended December 31, 2015)Changes in Unrealized Losses (Year Ended December 31, 2014)
Level 3 Instruments Only Securities Available for Sale Securities Available for SaleSecurities Available for Sale
(In thousands)
Changes in unrealized losses relating to assets
still held at reporting date:
Net impairment losses on available-for-sale investment
securities (credit component)$(387)$(628)$(388)