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Fair value measurement (Tables)

3 Months Ended

Mar. 31, 2014

Schedule Of Fair Value Assets And Liabilities Measured On Recurring Basis Table Text Block

At March 31, 2014

(In thousands)	Level 1		Level 2		Level 3		Total

RECURRING FAIR VALUE MEASUREMENTS

Assets
Investment securities available-for-sale:
U.S. Treasury securities	$	-	$	28,090	$	-	$	28,090
Obligations of U.S. Government sponsored entities		-		2,185,139		-		2,185,139
Obligations of Puerto Rico, States and political subdivisions		-		68,628		-		68,628
Collateralized mortgage obligations - federal agencies		-		2,388,607		-		2,388,607
Collateralized mortgage obligations - private label		-		313		-		313
Mortgage-backed securities		-		1,075,551		6,379		1,081,930
Equity securities		410		3,799		-		4,209
Other		-		11,974		-		11,974
Total investment securities available-for-sale	$	410	$	5,762,101	$	6,379	$	5,768,890

Trading account securities, excluding derivatives:
Obligations of Puerto Rico, States and political subdivisions	$	-	$	8,166	$	-	$	8,166
Collateralized mortgage obligations		-		375		1,561		1,936
Mortgage-backed securities - federal agencies		-		323,812		8,301		332,113
Other		-		15,317		1,715		17,032
Total trading account securities	$	-	$	347,670	$	11,577	$	359,247
Mortgage servicing rights	$	-	$	-	$	156,529	$	156,529
Derivatives		-		28,998		-		28,998
Total assets measured at fair value on a recurring basis	$	410	$	6,138,769	$	174,485	$	6,313,664
Liabilities
Derivatives	$	-	$	(25,714)	$	-	$	(25,714)
Contingent consideration		-		-		(126,345)		(126,345)
Total liabilities measured at fair value on a recurring basis	$	-	$	(25,714)	$	(126,345)	$	(152,059)

At December 31, 2013

(In thousands)	Level 1		Level 2		Level 3		Total

RECURRING FAIR VALUE MEASUREMENTS

Assets
Investment securities available-for-sale:
U.S. Treasury securities	$	-	$	28,482	$	-	$	28,482
Obligations of U.S. Government sponsored entities		-		1,629,205		-		1,629,205
Obligations of Puerto Rico, States and political subdivisions		-		66,377		-		66,377
Collateralized mortgage obligations - federal agencies		-		2,418,296		-		2,418,296
Collateralized mortgage obligations - private label		-		513		-		513
Mortgage-backed securities		-		1,129,118		6,523		1,135,641
Equity securities		412		3,704		-		4,116
Other		-		12,170		-		12,170
Total investment securities available-for-sale	$	412	$	5,287,865	$	6,523	$	5,294,800

Trading account securities, excluding derivatives:
Obligations of Puerto Rico, States and political subdivisions	$	-	$	7,586	$	-	$	7,586
Collateralized mortgage obligations		-		426		1,423		1,849
Mortgage-backed securities - federal agencies		-		302,952		9,799		312,751
Other		-		15,545		1,929		17,474
Total trading account securities	$	-	$	326,509	$	13,151	$	339,660
Mortgage servicing rights	$	-	$	-	$	161,099	$	161,099
Derivatives		-		34,793		-		34,793
Total assets measured at fair value on a recurring basis	$	412	$	5,649,167	$	180,773	$	5,830,352
Liabilities
Derivatives	$	-	$	(32,378)	$	-	$	(32,378)
Contingent consideration		-		-		(128,299)		(128,299)
Total liabilities measured at fair value on a recurring basis	$	-	$	(32,378)	$	(128,299)	$	(160,677)

Fair Value Measurements, Nonrecurring [Table Text Block]

Quarter ended March 31, 2014

(In thousands)	Level 1		Level 2		Level 3		Total

NONRECURRING FAIR VALUE MEASUREMENTS
Assets										Write-downs
Loans^[1]	$	-	$	-	$	66,189	$	66,189	$	(11,680)
Loans held-for-sale^[2]		-		-		-		-		(2,176)
Other real estate owned^[3]		-		-		17,295		17,295		(5,598)
Other foreclosed assets^[3]		-		-		533		533		(271)
Total assets measured at fair value on a nonrecurring basis	$	-	$	-	$	84,017	$	84,017	$	(19,725)

Quarter ended March 31, 2013

(In thousands)	Level 1		Level 2		Level 3		Total

NONRECURRING FAIR VALUE MEASUREMENTS
Assets										Write-downs
Loans^[1]	$	-	$	-	$	16,740	$	16,740	$	(10,675)
Loans held-for-sale^[2]		-		-		-		-		(2,176)
Other real estate owned^[3]		-		15,645		18,757		34,402		(15,665)
Other foreclosed assets^[3]		-		-		113		113		(56)
Total assets measured at fair value on a nonrecurring basis	$	-	$	15,645	$	35,610	$	51,255	$	(28,572)

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Quarter ended March 31, 2014
		MBS						Other
		classified		CMOs				securities
		as investment		classified		MBS		classified
		securities		as trading		classified as		as trading		Mortgage
		available-		account		trading account		account		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		securities		securities		rights		assets		consideration		liabilities
Balance at January 1, 2014		$	6,523	$	1,423	$	9,799	$	1,929	$	161,099	$	180,773	$	(128,299)	$	(128,299)
Gains (losses) included in earnings			(2)		(10)		(39)		(214)		(8,096)		(8,361)		1,168		1,168
Gains (losses) included in OCI			(42)		-		-		-		-		(42)		-		-
Purchases			-		263		150		-		3,528		3,941		-		-
Sales			-		-		(1,109)		-		-		(1,109)		-		-
Settlements			(100)		(115)		(500)		-		(2)		(717)		786		786
Balance at March 31, 2014		$	6,379	$	1,561	$	8,301	$	1,715	$	156,529	$	174,485	$	(126,345)	$	(126,345)
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at March 31, 2014	$	-	$	(6)	$	(25)	$	(136)	$	(3,023)	$	(3,190)	$	1,168	$	1,168

	Quarter ended March 31, 2013
		MBS						Other
		classified		CMOs				securities
		as investment		classified		MBS		classified
		securities		as trading		classified as		as trading		Mortgage
		available-		account		trading account		account		servicing		Total		Contingent		Total
(In thousands)		for-sale		securities		securities		securities		rights		assets		consideration		liabilities
Balance at January 1, 2013		$	7,070	$	2,499	$	11,818	$	2,240	$	154,430	$	178,057	$	(112,002)	$	(112,002)
Gains (losses) included in earnings			(1)		3		(92)		(96)		(5,615)		(5,801)		(6,775)		(6,775)
Gains (losses) included in OCI			(1)		-		-		-		-		(1)		-		-
Purchases			-		5		27		-		5,147		5,179		-		-
Sales			-		(375)		-		-		-		(375)		-		-
Settlements			(25)		(107)		(817)		-		(13)		(962)		-		-
Balance at March 31, 2013		$	7,043	$	2,025	$	10,936	$	2,144	$	153,949	$	176,097	$	(118,777)	$	(118,777)
Changes in unrealized gains
	(losses) included in earnings
	relating to assets still held
	at March 31, 2013	$	-	$	2	$	(30)	$	(55)	$	1,443	$	1,360	$	(6,775)	$	(6,775)

Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Table Text Block]

	Quarter ended March 31, 2014				Quarter ended March 31, 2013
				Changes in unrealized to				Changes in unrealized to
		Total gains		gains (losses) relating		Total gains		gains (losses) relating
		(losses) included		assets still held at		(losses) included		assets still held at
(In thousands)		in earnings		reporting date		in earnings		reporting date

Interest income	$	(2)	$	0	$	(1)	$	0
FDIC loss share (expense) income		1,168		1,168		(6,775)		(6,775)
Other service fees		(8,096)		(3,023)		(5,615)		1,443
Trading account loss		(263)		(167)		(185)		(83)
Total	$	(7,193)	$	(2,022)	$	(12,576)	$	(5,415)

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

		Fair value
		at March 31,
(In thousands)		2014	Valuation technique	Unobservable inputs	Weighted average (range)
CMO's - trading	$	1,561	Discounted cash flow model	Weighted average life	2.2 years (0.8 - 5.2 years)
				Yield	3.9% (1.5% - 4.7%)
				Constant prepayment rate	24.3% (19.5% - 27.6%)
Other - trading	$	868	Discounted cash flow model	Weighted average life	5.6	years
				Yield	12.1	%
				Constant prepayment rate	10.8	%
Mortgage servicing rights	$	156,529	Discounted cash flow model	Prepayment speed	8.4% (5.7% - 24.2%)
				Weighted average life	12.0 years (4.1 - 18.3 years)
				Discount rate	11.4% (9.5% - 15.1%)
Contingent consideration	$	(126,345)	Discounted cash flow model	Credit loss rate on covered loans	12.8% (0.0% - 100.0%)
				Risk premium component
				of discount rate	3.3	%
Loans held-in-portfolio	$	66,189^[1]	External appraisal	Haircut applied on
				external appraisals	22.9% (10.0% - 35.0%)
Other real estate owned	$	4,769^[2]	External appraisal	Haircut applied on
				external appraisals	3.2% (5.0% -10.0%)

- Definition

Tabular disclosure of the amount of gains or losses for the period included in earnings or resulted in a change to net assets, have arisen from the use of significant unobservable inputs (level 3) to measure the fair value of assets, liabilities, and financial instruments classified in shareholders' equity.

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- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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