INVESTMENT SECURITIES (Tables)

9 Months Ended

Sep. 30, 2020

Other Than Temporary Impairment Credit Losses Recognized In Earnings [Line Items]

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

The tables below present qualitative information for significant assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of September 30, 2020 and December 31, 2019:
	September 30, 2020
	Fair Value		Valuation Technique	Unobservable Input	Range		Weighted Average
(Dollars in thousands)					Minimum	Maximum
Investment securities available-for-sale:
Private label MBS	$	8,839	Discounted cash flows	Discount rate	12.4%	12.4%	12.4%
				Prepayment rate	2.6%	13.7%	10.9%
				Projected cumulative loss rate	2.4%	26.3%	11.8%
Puerto Rico government obligations		2,907	Discounted cash flows	Discount rate	8.5%	8.5%	8.5%
				Projected cumulative loss rate	13.4%	13.4%	13.4%

	December 31, 2019
	Fair Value		Valuation Technique	Unobservable Input	Range		Weighted Average
(Dollars in thousands)					Minimum	Maximum
Investment securities available-for-sale:
Private label MBS	$	11,116	Discounted cash flows	Discount rate	13.7%	13.7%	13.7%
				Prepayment rate	6.8%	10.3%	7.9%
				Projected cumulative loss rate	0.0%	7.4%	2.8%
Puerto Rico government obligations		2,974	Discounted cash flows	Discount rate	6.9%	6.9%	6.9%
				Prepayment rate	3.0%	3.0%	3.0%

Debt Securities, Available-for-sale, Allowance for Credit Loss [Table Text Block]

The following table presents a rollforward by major security type for the quarter and nine-month period ended September 30, 2020 of the ACL on debt securities available-for-sale:

	Quarter Ended September 30, 2020
	Private label MBS		Puerto Rico Government Obligations		Total
(In thousands)
Beginning Balance	$	1,323	$	308	$	1,631
Additions for securities for which no previous expected credit
losses were recognized (provision for credit losses)		-		-		-
Addition for securities for which previous expected credit losses
were recognized (provision for credit losses)		-		-		-
Net charge-offs		(245)		-		(245)
	$	1,078	$	308	$	1,386
	Nine-Month Period Ended September 30, 2020
	Private label MBS		Puerto Rico Government Obligations		Total
(In thousands)
Beginning Balance	$	-	$	-	$	-
Additions for securities for which no previous expected credit
losses were recognized (provision for credit losses)		-		308		308
Addition for securities for which previous expected credit losses
were recognized (provision for credit losses)		1,323		-		1,323
Net charge-offs		(245)		-		(245)

$ 1,078 $ 308 $ 1,386

Debt Securities, Held-to-maturity, Allowance for Credit Loss [Table Text Block]

The following table presents the activity in the ACL for debt securities held to maturity by major security type for the quarter and nine-month period ended September 30, 2020:

	Puerto Rico Municipal Bonds
	Quarter Ended		Nine-Month Period Ended
	September 30, 2020		September 30, 2020
(In thousands)
Beginning Balance	$	9,268	$	-
Impact of adopting ASC 326		-		8,134
Initial allowance on PCD debt securities		1,269		1,269
Provision for credit losses		(361)		773
	$	10,176	$	10,176

Debt Securities Held To Maturity Purchase With Credit Deterioration [Table Text Block]

The following table reconciles the difference between the purchase price of the PCD held-to-maturity debt securities acquired in the BSPR acquisition and the par value:

(In thousands)
	Puerto Rico Municipal Bonds
Purchase price of debt securities at acquisition (initial fair value)	$	55,532
Allowance for credit losses at acquisition		1,269
Non-credit discount at acquisition		10,281
Par value of acquired debt securities at acquisition	$	67,082

Debt Securities, Held-to-maturity, Credit Quality Indicator [Table Text Block]

The following table summarizes the amortized cost of debt securities held-to-maturity as of September 30, 2020 and December 31, 2019, aggregated by credit quality indicator:

	Held to Maturity
	Puerto Rico Municipal Bonds
	September 30,		December 31
(In thousands)	2020		2019
Risk Ratings:
Pass	$	189,156	$	138,675
Criticized:
Special Mention		-		-
Substandard		-		-
Doubtful		-		-
Loss		-		-
Total	$	189,156	$	138,675

Available for sale Securities [Member]

Other Than Temporary Impairment Credit Losses Recognized In Earnings [Line Items]

Investments Classified by Contractual Maturity Date [Table Text Block]

The amortized cost, gross unrealized gains and losses recorded in OCI, allowance for credit losses, estimated fair value, and weighted-average yield of investment securities available for sale by contractual maturities as of September 30, 2020 were as follows:

		September 30, 2020
		Amortized cost						Allowance for Credit Losses		Fair value
				Gross Unrealized								Weighted-
				gains		losses						average yield%
(Dollars in thousands)
U.S. Treasury securities:
	Due within one year	$	7,493	$	38	$	-	$	-	$	7,531	1.65
U.S. government-sponsored
agencies' obligations:
Due within one year			34,442		402		-		-		34,844	1.82
After 1 to 5 years			544,175		813		958		-		544,030	0.80
After 5 to 10 years			117,940		671		181		-		118,430	1.41
After 10 years			21,820		-		144		-		21,676	0.65
Puerto Rico government obligations:
After 5 to 10 years			4,000		16		-		-		4,016	5.12
After 10 years (1)			4,043		-		828		308		2,907	6.97
United States and Puerto Rico
government obligations			733,913		1,940		2,111		308		733,434	1.01
MBS:
Freddie Mac (“FHLMC”) certificates:
Due within one year			83		8		-		-		91	4.86
After 5 to 10 years			66,337		2,939		-		-		69,276	2.15
After 10 years			579,684		12,331		139		-		591,876	1.73
			646,104		15,278		139		-		661,243	1.77
Ginnie Mae (“GNMA”) certificates:
Due within one year			2		-		-		-		2	2.89
After 1 to 5 years			29,736		1,141		-		-		30,877	2.92
After 5 to 10 years			44,804		121		107		-		44,818	0.61
After 10 years			690,171		13,154		330		-		702,995	1.52
			764,713		14,416		437		-		778,692	1.52
Fannie Mae (“FNMA”) certificates:
After 1 to 5 years			24,823		1,159		-		-		25,982	2.80
After 5 to 10 years			114,332		5,882		-		-		120,214	2.12
After 10 years			709,800		19,848		399		-		729,249	1.95
			848,955		26,889		399		-		875,445	2.00
Collateralized mortgage obligations
issued or guaranteed by the FHLMC,					`
FNMA and GNMA:
After 1 to 5 years			581		-		1		-		580	0.82
After 5 to 10 years			20,055		123		-		-		20,178	0.80
After 10 years			214,437		1,375		224		-		215,588	1.87
			235,073		1,498		225		-		236,346	1.77
Private label:
After 10 years			13,547		-		3,630		1,078		8,839	2.22
Total MBS			2,508,392		58,081		4,830		1,078		2,560,565	1.77
Other
After 1 to 5 years			650		-		-		-		650	2.94
Total investment securities
available for sale		$	3,242,955	$	60,021	$	6,941	$	1,386	$	3,294,649	1.60

The amortized cost, gross unrealized gains and losses recorded in OCI, estimated fair value, and weighted-average yield of investment securities available for sale by contractual maturities as of December 31, 2019 were as follows:

		December 31, 2019
		Amortized cost		Gross Unrealized				Fair value
										Weighted-
				gains		losses				average yield%
(Dollars in thousands)
U.S. Treasury securities:
	After 1 to 5 years	$	7,478	$	1	$	-	$	7,479	1.65
U.S. government-sponsored agencies' obligations:
	Due within one year		93,299		103		106		93,296	1.67
	After 1 to 5 years		142,513		676		52		143,137	2.12
	After 5 to 10 years		63,764		165		150		63,779	2.33
	After 10 years		24,624		-		116		24,508	2.00
Puerto Rico government obligations:
	After 5 to 10 years		4,000		348		-		4,348	5.12
	After 10 years (1)		4,166		-		1,192		2,974	6.97
United States and Puerto Rico government
obligations			339,844		1,293		1,616		339,521	2.11
MBS:
FHLMC certificates:
	After 5 to 10 years		81,418		589		228		81,779	2.16
	After 10 years		424,316		3,873		758		427,431	2.50
			505,734		4,462		986		509,210	2.44
GNMA certificates:
	After 1 to 5 years		4,357		45		-		4,402	3.26
	After 5 to 10 years		42,303		607		-		42,910	2.77
	After 10 years		258,944		7,126		500		265,570	3.03
			305,604		7,778		500		312,882	3.00
FNMA certificates:
	After 1 to 5 years		19,779		415		3		20,191	2.79
	After 5 to 10 years		140,599		1,257		641		141,215	2.14
	After 10 years		700,213		9,006		1,208		708,011	2.58
			860,591		10,678		1,852		869,417	2.51
Collateralized mortgage obligations issued or
	guaranteed by the FHLMC, FNMA
	and GNMA:
	After 1 to 5 years		608		-		1		607	2.43
	After 10 years		80,130		362		220		80,272	2.76
			80,738		362		221		80,879	2.75
Private label:
	After 10 years		15,997		-		4,881		11,116	3.90
Total MBS			1,768,664		23,280		8,440		1,783,504	2.60
Other
	After 1 to 5 years		500		-		-		500	2.95
Total investment securities
	available for sale	$	2,109,008	$	24,573	$	10,056	$	2,123,525	2.52

Schedule Of Unrealized Loss On Investments [Table Text Block]

The following tables show the Corporation’s available-for-sale investment securities fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of September 30, 2020 and December 31, 2019. The tables also include debt securities for which an ACL was recorded as of September 30, 2020 or a credit loss was charged against the amortized cost basis of the debt security prior to the adoption of ASC 326 on January 1, 2020.

	As of September 30, 2020
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
(In thousands)
Debt securities:
Puerto Rico-government obligations	$	-	$	-	$	2,907	$	828	$	2,907	$	828
U.S. Treasury and U.S. government
agenciesʼ obligations		242,648		1,131		20,985		152		263,633		1,283
MBS:
FNMA		147,286		399		-		-		147,286		399
FHLMC		96,439		139		-		-		96,439		139
GNMA		122,052		437		-		-		122,052		437
Collateralized mortgage obligations
issued or guaranteed by the
FHLMC, FNMA and GNMA		80,135		139		10,023		86		90,158		225
Private label MBS		-		-		8,839		3,630		8,839		3,630
	$	688,560	$	2,245	$	42,754	$	4,696	$	731,314	$	6,941
	As of December 31, 2019
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
(In thousands)
Debt securities:
Puerto Rico-government obligations	$	-	$	-	$	2,974	$	1,192	$	2,974	$	1,192
U.S. Treasury and U.S. government
agenciesʼ obligations		45,073		172		99,764		252		144,837		424
MBS:
FNMA		58,668		499		173,708		1,353		232,376		1,852
FHLMC		74,134		270		63,864		716		137,998		986
GNMA		79,145		472		7,203		28		86,348		500
Collateralized mortgage obligations
issued or guaranteed by the
FHLMC, FNMA and GNMA		21,873		221		-		-		21,873		221
Private label MBS		-		-		11,116		4,881		11,116		4,881
	$	278,893	$	1,634	$	358,629	$	8,422	$	637,522	$	10,056

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

Significant assumptions in the valuation of the private label MBS were as follows:

	As of			As of
	September 30, 2020			December 31, 2019
	Weighted	Range		Weighted	Range
	Average	Minimum	Maximum	Average	Minimum	Maximum
Discount rate	12.4%	12.4%	12.4%	13.7%	13.7%	13.7%
Prepayment rate	10.9%	2.6%	13.7%	7.9%	6.8%	10.3%
Projected Cumulative Loss Rate	11.8%	2.4%	26.3%	2.8%	0.0%	7.4%

Other than Temporary Impairment, Credit Losses Recognized in Earnings [Table Text Block]

During the third quarter and first nine months of 2019, the Corporation recorded OTTI losses on available-for-sale debt securities as follows:

		Quarter Ended		Nine-Month Period Ended
		September 30,		September 30,
		2019		2019
(In thousands)
Total OTTI losses		$	(557)	$	(557)
Portion of OTTI recognized in OCI			60		60
Net impairment losses recognized in earnings (1)		$	(497)	$	(497)
(1)	Prior to the adoption of CECL on January 1, 2020, credit-related impairment recognized in earnings was reported as part of net gain (loss) on investment securities in the consolidated statements of income rather than as a provision for credit losses.

Held-to-maturity Securities [Member]

Other Than Temporary Impairment Credit Losses Recognized In Earnings [Line Items]

Investments Classified by Contractual Maturity Date [Table Text Block]

The amortized cost, gross unrecognized gains and losses, estimated fair value, ACL, weighted-average yield and contractual maturities of investment securities held to maturity as of September 30, 2020 and December 31, 2019 were as follows:

		September 30, 2020
		Amortized cost						Fair value		Allowance for Credit Losses
				Gross Unrecognized
(Dollars in thousands)				Gains		Losses						Weighted- average yield%
Puerto Rico municipal bonds:
	Due within one year	$	550	$	-	$	26	$	524	$	133	5.41
	After 1 to 5 years		17,203		-		611		16,592		375	3.11
	After 5 to 10 years		88,224		-		5,387		82,837		3,773	4.68
	After 10 years		83,179		-		16,158		67,021		5,895	3.62
Total investment securities
	held to maturity	$	189,156	$	-	$	22,182	$	166,974	$	10,176	4.07

		December 31, 2019
		Amortized cost						Fair value
				Gross Unrecognized
(Dollars in thousands)				Gains		Losses				Weighted- average yield%
Puerto Rico municipal bonds:
	Due within one year	$	321	$	-	$	6	$	315	5.84
	After 1 to 5 years		8,264		-		736		7,528	5.18
	After 5 to 10 years		56,511		-		8,646		47,865	5.77
	After 10 years		73,579		-		18,913		54,666	5.44
Total investment securities
	held to maturity	$	138,675	$	-	$	28,301	$	110,374	5.56

Schedule Of Unrealized Loss On Investments [Table Text Block]

The following tables show the Corporation’s held-to-maturity investments’ fair value and gross unrecognized losses, aggregated by investment category and length of time that individual securities had been in a continuous unrecognized loss position, as of September 30, 2020 and December 31, 2019, including debt securities for which an ACL was recorded as of September 30, 2020:

	As of September 30, 2020
	Less than 12 months				12 months or more				Total
			Unrecognized				Unrecognized				Unrecognized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
		(In thousands)
Debt securities:
Puerto Rico municipal bonds	$	55,643	$	1,269	$	111,331	$	20,913	$	166,974	$	22,182
	As of December 31, 2019
	Less than 12 months				12 months or more				Total
			Unrecognized				Unrecognized				Unrecognized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
		(In thousands)
Debt securities:
Puerto Rico municipal bonds	$	-	$	-	$	110,374	$	28,301	$	110,374	$	28,301