Income taxes (Tables)

6 Months Ended

Jun. 30, 2021

Components of Deferred Tax Assets and Liabilities

			June 30, 2021
(In thousands)			PR		US		Total
Deferred tax assets:
Tax credits available for carryforward		$	3,003	$	2,781	$	5,784
Net operating loss and other carryforward available			131,938		690,284		822,222
Postretirement and pension benefits			75,555		-		75,555
Deferred loan origination fees			20,174		(3,570)		16,604
Allowance for credit losses			270,124		39,463		309,587
Accelerated depreciation			4,400		7,283		11,683
FDIC-assisted transaction			152,665		-		152,665
Intercompany deferred gains			1,782		-		1,782
Lease liability			21,554		25,042		46,596
Difference in outside basis from pass-through entities			61,140		-		61,140
Other temporary differences			39,801		8,335		48,136
	Total gross deferred tax assets		782,136		769,618		1,551,754
Deferred tax liabilities:
Indefinite-lived intangibles			74,970		49,933		124,903
Unrealized net gain (loss) on trading and available-for-sale securities			43,406		6,776		50,182
Right of use assets			19,466		21,314		40,780
Other temporary differences			51,885		1,507		53,392
	Total gross deferred tax liabilities		189,727		79,530		269,257
Valuation allowance			121,614		416,119		537,733
Net deferred tax asset		$	470,795	$	273,969	$	744,764
			December 31, 2020
(In thousands)			PR		US		Total
Deferred tax assets:
Tax credits available for carryforward		$	3,003	$	5,269	$	8,272
Net operating loss and other carryforward available			124,355		698,842		823,197
Postretirement and pension benefits			80,179		-		80,179
Deferred loan origination fees			12,079		(2,652)		9,427
Allowance for credit losses			373,010		38,606		411,616
Accelerated depreciation			3,439		5,390		8,829
FDIC-assisted transaction			152,665		-		152,665
Intercompany deferred gains			1,728		-		1,728
Lease liability			22,790		18,850		41,640
Difference in outside basis from pass-through entities			61,222		-		61,222
Other temporary differences			38,954		7,344		46,298
	Total gross deferred tax assets		873,424		771,649		1,645,073
Deferred tax liabilities:
Indefinite-lived intangibles			73,305		37,745		111,050
Unrealized net gain (loss) on trading and available-for-sale securities			67,003		8,595		75,598
Right of use assets			20,708		15,510		36,218
Other temporary differences			50,247		1,169		51,416
	Total gross deferred tax liabilities		211,263		63,019		274,282
Valuation allowance			112,871		407,225		520,096
Net deferred tax asset		$	549,290	$	301,405	$	850,695

Reconciliation of Unrecognized Tax Benefits

(In millions)		2021		2020
Balance at January 1	$	14.8	$	16.3
Balance at March 31	$	14.8	$	16.3
Balance at June 30	$	14.8	$	16.3

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, 2021				June 30, 2020
(In thousands)		Amount	% of pre-tax income			Amount	% of pre-tax income
Computed income tax expense at statutory rates	$	109,189	38	%	$	57,096	38	%
Net benefit of tax exempt interest income		(36,840)	(13)			(29,424)	(19)
Deferred tax asset valuation allowance		5,832	2			2,610	2
Difference in tax rates due to multiple jurisdictions		(4,881)	(2)			(4,210)	(3)
Effect of income subject to preferential tax rate		(1,405)	(1)			(2,727)	(2)
Adjustment due to estimate on the annual effective rate		(405)	-			(2,153)	(2)
State and local taxes		2,530	1			2,614	2
Others		(927)	-			822	-
Income tax expense	$	73,093	25	%	$	24,628	16	%

		Six months ended
		June 30, 2021				June 30, 2020
(In thousands)		Amount	% of pre-tax income			Amount	% of pre-tax income
Computed income tax expense at statutory rates	$	236,488	38	%	$	71,121	38	%
Net benefit of tax exempt interest income		(71,003)	(11)			(62,320)	(33)
Deferred tax asset valuation allowance		16,153	3			8,148	4
Difference in tax rates due to multiple jurisdictions		(15,829)	(3)			4,665	2
Effect of income subject to preferential tax rate		(4,734)	(1)			(4,627)	(2)
Adjustment due to estimate on the annual effective rate		(10,733)	(2)			6,851	4
State and local taxes		2,591	-			2,059	1
Others		(3,009)	-			1,828	1
Income tax expense	$	149,924	24	%	$	27,725	15	%