Basis of presentation (Policies)

12 Months Ended

Dec. 31, 2024

Basis of presentation [Abstract]

Income taxes

Tax impact on Intercompany Distributions

The net income for the year ended December 31, 2024 included $

22.9

 million of expenses, of which $

16.5

 million was reflected in

income tax expense and $

6.4

 million was 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 corresponded 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

$

52.2

 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.

Income taxes

The Corporation recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been

recognized in the Corporation’s financial statements or tax returns. Deferred income tax assets and liabilities are determined for

differences between financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the

future. The computation is based on enacted tax laws and rates applicable to periods in which the temporary differences are

expected to be recovered or settled. 

The guidance for income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance if,

based on the available evidence, it is more likely than not (defined as a likelihood of more than 50 percent) that such assets will not

be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically by the

Corporation based on the more likely than not realization threshold criterion. In the assessment for a valuation allowance,

appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. This

assessment considers, among others, all sources of taxable income available to realize the deferred tax asset, including the future

reversal of existing temporary differences, the future taxable income exclusive of reversing temporary differences and carryforwards,

taxable income in carryback years and tax-planning strategies. In making such assessments, significant weight is given to evidence

that can be objectively verified. 

The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been

recognized in the Corporation’s financial statements or tax returns and future profitability. The Corporation’s accounting for deferred

tax consequences represents management’s best estimate of those future events. 

Positions taken in the Corporation’s tax returns may be subject to challenge by the taxing authorities upon examination. Uncertain

tax positions are initially recognized in the financial statements when it is more likely than not (greater than 50%) that the position

will be sustained upon examination by the tax authorities, assuming full knowledge of the position and all relevant facts. The amount

of unrecognized tax benefit may increase or decrease in the future for various reasons including adding amounts for current tax year

positions,

expiration of open income tax returns due to the statute of limitations, changes in management’s judgment about the level

of uncertainty, including addition or elimination of uncertain tax positions, status of examinations, litigation, settlements with tax

authorities and legislative activity.

The Corporation accounts for the taxes collected from customers and remitted to governmental authorities on a net basis (excluded

from revenues).

Income tax expense or benefit for the year is allocated among continuing operations, discontinued operations, and other

comprehensive income (loss), as applicable. The amount allocated to continuing operations is the tax effect of the pre-tax income or

loss from continuing operations that occurred during the year, plus or minus income tax effects of (a) changes in circumstances that

cause a change in judgment about the realization of deferred tax assets in future years, (b) changes in tax laws or rates, (c)

changes in tax status, and (d) tax-deductible dividends paid to stockholders, subject to certain exceptions.