v3.25.1
Debt securities held-to-maturity
 3 Months Ended
Mar. 31, 2025
Held To Maturity Debt Securities  
Schedule of Held-to-maturity Securities [Line Items]  
Investments in debt and marketable equity securities
Note 6 –Debt securities held-to-maturity
The following
 
tables
 
present the
 
amortized cost,
 
allowance for
 
credit
 
losses,
 
gross unrealized
 
gains
 
and losses,
 
approximate
 
fair
value, weighted
 
average yield
 
and contractual
 
maturities of
 
debt securities
 
held-to-maturity at
 
March 31,
 
2025 and
 
December 31,
2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At March 31, 2025
Allowance
Carrying
Value
 
Gross
 
Gross
 
Weighted
Amortized
 
Book
[1]
for Credit
Net of
 
unrealized
unrealized
Fair
 
average
(In thousands)
cost
Value
Losses
Allowance
gains
 
losses
value
yield
U.S. Treasury securities
 
Within 1 year
$
850,742
$
844,252
$
-
$
844,252
$
-
$
3,680
$
840,572
2.45
%
After 1 to 5 years
7,169,044
6,741,917
-
6,741,917
2,506
1,481
6,742,942
1.24
Total U.S. Treasury securities
8,019,786
7,586,169
-
7,586,169
2,506
5,161
7,583,514
1.37
Obligations of Puerto Rico, States and
political subdivisions
Within 1 year
2,540
2,540
11
2,529
10
1
2,538
6.41
After 1 to 5 years
14,798
14,798
69
14,729
36
84
14,681
3.39
After 5 to 10 years
655
655
22
633
21
-
654
5.81
After 10 years
37,082
37,082
5,379
31,703
2,632
2,325
32,010
1.42
Total obligations of Puerto Rico, States and
political subdivisions
55,075
55,075
5,481
49,594
2,699
2,410
49,883
2.23
Collateralized mortgage obligations - federal
agencies
After 10 years
1,514
1,514
-
1,514
-
185
1,329
2.87
Total collateralized mortgage obligations -
federal agencies
1,514
1,514
-
1,514
-
185
1,329
2.87
Securities in wholly owned statutory business
trusts
After 5 to 10 years
5,960
5,960
-
5,960
-
-
5,960
6.33
Total securities in wholly owned statutory
business trusts
5,960
5,960
-
5,960
-
-
5,960
6.33
Total debt securities held-to-maturity [2]
$
8,082,335
$
7,648,718
$
5,481
$
7,643,237
$
5,205
$
7,756
$
7,640,686
1.38
%
[1]
Book value includes $
434
 
million of unrealized loss which remains in Accumulated other comprehensive (loss) income (AOCI) related to certain
securities previously transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.
[2]
Includes $
7.5
 
billion pledged to secure public and trust deposits that the secured parties are not permitted to sell or repledge the collateral.
 
The
Corporation had unpledged held-to-maturities securities with a fair value of $
138.3
 
million that could be used to increase its borrowing facilities.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At December 31, 2024
Allowance
 
Carrying
Value
 
Gross
 
Gross
 
Weighted
 
Amortized
 
Book
[1]
for Credit
Net of
unrealized
unrealized
Fair
 
average
 
(In thousands)
cost
Value
Losses
Allowance
gains
 
losses
value
yield
U.S. Treasury securities
 
Within 1 year
$
599,910
$
599,910
$
-
$
599,910
$
-
$
4,498
$
595,412
2.76
%
After 1 to 5 years
7,572,435
7,093,508
-
7,093,508
-
65,096
7,028,412
1.28
Total U.S. Treasury securities
8,172,345
7,693,418
-
7,693,418
-
69,594
7,623,824
1.39
Obligations of Puerto Rico, States and
political subdivisions
`
Within 1 year
2,440
2,440
5
2,435
3
-
2,438
6.39
After 1 to 5 years
16,454
16,454
80
16,374
47
80
16,341
3.69
After 5 to 10 years
655
655
22
633
20
-
653
5.81
After 10 years
37,633
37,633
5,210
32,423
2,318
2,596
32,145
1.42
Total obligations of Puerto Rico, States and
political subdivisions
57,182
57,182
5,317
51,865
2,388
2,676
51,577
2.34
Collateralized mortgage obligations - federal
agencies
After 10 years
1,518
1,518
-
1,518
-
214
1,304
2.87
Total collateralized mortgage obligations -
federal agencies
1,518
1,518
-
1,518
-
214
1,304
2.87
Securities in wholly owned statutory business
trusts
After 5 to 10 years
5,959
5,959
-
5,959
-
-
5,959
6.33
Total securities in wholly owned statutory
business trusts
5,959
5,959
-
5,959
-
-
5,959
6.33
Total debt securities held-to-maturity [2]
$
8,237,004
$
7,758,077
$
5,317
$
7,752,760
$
2,388
$
72,484
$
7,682,664
1.40
%
[1]
Book value includes $
479
 
million of unrealized loss which remains in Accumulated other comprehensive (loss) income (AOCI)
 
related to certain
securities transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.
[2]
Includes $
7.6
 
billion pledged to secure public and trust deposits that the secured parties are not permitted to sell or repledge the collateral.
 
The
Corporation had unpledged held-to-maturities securities with a fair value of
 
$
139.9
 
million that could be used to increase its borrowing facilities.
Debt securities not due on a single contractual maturity date, such as
 
collateralized mortgage obligations, are classified in the period
of final
 
contractual maturity.
 
The expected
 
maturities of
 
collateralized mortgage
 
obligations and
 
certain other
 
securities may
 
differ
from their contractual maturities because they may be subject to prepayments or may be called by the issuer.
Credit Quality Indicators
The following describes the
 
credit quality indicators by
 
major security type that
 
the Corporation considers to
 
develop the estimate of
the allowance for credit losses for investment securities held-to-maturity.
As discussed in
 
Note 2 of
 
the 2024 Form
 
10-K, U.S. Treasury
 
securities carry
 
an explicit guarantee
 
from the U.S.
 
Government are
highly rated by
 
major rating agencies
 
and have a long
 
history of no credit
 
losses. Accordingly,
 
the Corporation applies
 
a zero-credit
loss assumption and no allowance for credit losses (“ACL”) for these securities has been established.
At March 31,
 
2025 and December
 
31, 2024, the
 
“Obligations of Puerto
 
Rico, States and
 
political subdivisions” classified
 
as held-to-
maturity,
 
includes
 
securities
 
issued
 
by
 
municipalities
 
of
 
Puerto
 
Rico
 
that
 
are
 
generally
 
not
 
rated
 
by
 
a
 
credit
 
rating
 
agency.
 
This
includes $
11
 
million of general and special
 
obligation bonds issued by three
 
municipalities of Puerto Rico,
 
that are payable primarily
from
 
certain
 
property
 
taxes
 
imposed
 
by
 
the
 
issuing
 
municipality
 
(December
 
31,
 
2024
 
-
 
$
13
 
million).
 
In
 
the
 
case
 
of
 
general
obligations, they
 
also benefit
 
from a
 
pledge of
 
the full
 
faith, credit
 
and unlimited
 
taxing power
 
of the
 
issuing municipality,
 
which is
required by law to levy property
 
taxes in an amount sufficient
 
for the payment of debt service
 
on such general obligation bonds.
 
The
Corporation performs periodic
 
credit quality reviews
 
of these securities
 
and internally assigns
 
standardized credit risk
 
ratings based
on its evaluation.
 
The Corporation considers
 
these ratings in
 
its estimate to
 
develop the allowance
 
for credit losses
 
associated with
these
 
securities.
 
For
 
the
 
definitions
 
of
 
the
 
obligor
 
risk
 
ratings,
 
refer
 
to
 
the
 
Credit
 
Quality
 
section
 
of
 
Note
 
8
 
to
 
the
 
Consolidated
Financial Statements.
The
 
following
 
presents
 
the
 
amortized
 
cost
 
basis
 
of
 
securities
 
held
 
by
 
the
 
Corporation
 
issued
 
by
 
municipalities
 
of
 
Puerto
 
Rico
aggregated by the internally assigned standardized credit risk rating:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At March 31, 2025
At December 31, 2024
(In thousands)
Securities issued by Puerto Rico municipalities
Watch
$
1,555
$
1,555
Pass
9,525
11,060
Total
$
11,080
$
12,615
At
 
March
 
31,
 
2025,
 
the
 
portfolio
 
of
 
“Obligations
 
of
 
Puerto
 
Rico,
 
States
 
and
 
political
 
subdivisions”
 
also
 
includes
 
$
37
 
million
 
in
securities
 
issued
 
by
 
the
 
Puerto
 
Rico
 
Housing
 
Finance
 
Authority
 
(“HFA”),
 
a
 
government
 
instrumentality,
 
for
 
which
 
the
 
underlying
source of payment is second mortgage loans in Puerto Rico residential
 
properties (not the government), but for which HFA,
 
provides
a guarantee
 
in the
 
event of
 
default and
 
upon the
 
satisfaction of
 
certain other
 
conditions (December
 
31, 2024
 
- $
38
 
million). These
securities are not rated by a credit rating agency.
 
The
 
Corporation
 
assesses
 
the
 
credit
 
risk
 
associated
 
with
 
these
 
securities
 
by
 
evaluating
 
the
 
refreshed
 
FICO
 
scores
 
of
 
a
representative
 
sample
 
of
 
the
 
underlying
 
borrowers.
 
As
 
of
 
March
 
31,
 
2025,
 
the
 
average
 
refreshed
 
FICO
 
score
 
for
 
the
 
sample,
comprised
 
of
73
%
 
of
 
the
 
nominal
 
value
 
of
 
the
 
securities,
 
used
 
for
 
the
 
loss
 
estimate
 
was
 
of
674
 
(compared
 
to
72
%
 
and
674
,
respectively,
 
at December
 
31, 2024).
 
The loss
 
estimates for
 
this portfolio
 
was based
 
on the
 
methodology established
 
under CECL
for
 
similar
 
loan
 
obligations.
 
The
 
Corporation
 
does
 
not
 
consider
 
the
 
government
 
guarantee
 
when
 
estimating
 
the
 
credit
 
losses
associated with this portfolio.
A
deterioration
 
of
 
the
 
Puerto
 
Rico
 
economy
 
or
 
of
 
the
 
fiscal
 
health
 
of
 
the
 
Government
 
of
 
Puerto
 
Rico
 
and/or
 
its
 
instrumentalities
(including
 
if any
 
of the
 
issuing
 
municipalities
 
become subject
 
to a
 
debt restructuring
 
proceeding under
 
the Puerto
 
Rico Oversight
Management and Economic Stability Act (“PROMESA”) could adversely affect the value
 
of these securities, resulting in losses to the
Corporation.
 
Refer
 
to
 
Note
 
20
to
 
the
 
Consolidated
 
Financial
 
Statements
in
 
this
 
Form
 
10-Q
for
 
additional
 
information
 
on
 
the
 
Corporation’s
exposure to the Puerto Rico Government.
At
 
March
 
31,
 
2025
 
and
 
December
 
31,
 
2024,
 
the
 
portfolio
 
of
 
“Obligations
 
of
 
Puerto
 
Rico,
 
States
 
and
 
political
 
subdivisions”
 
also
includes $
6.9
 
million in
 
securities issued
 
by the
 
HFA
 
for which
 
the underlying
 
source of
 
payment is
 
U.S. Treasury
 
securities. The
Corporation applies
 
a
zero
-credit loss
 
assumption for these
 
securities, and no
 
ACL has
 
been established for
 
these securities
 
given
that U.S. Treasury
 
securities carry
 
an explicit guarantee
 
from the U.S.
 
Government, are
 
highly rated
 
by major
 
rating agencies,
 
and
have a long history of no credit losses. Refer to Note 2 to the Consolidated Financial Statements for further details.
Delinquency status
At March 31, 2025 and December 31, 2024, there were
no
 
securities held-to-maturity in past due or non-performing status.
Allowance for credit losses on debt securities held-to-maturity
The following table
 
provides the activity
 
in the allowance
 
for credit losses
 
related to debt securities
 
held-to-maturity by security
 
type
at
 
March 31, 2025 and March 31, 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the quarters ended March 31,
 
2025
2024
(In thousands)
Obligations of Puerto Rico, States and political subdivisions
Allowance for credit losses:
Beginning balance
$
5,317
$
5,780
Provision for credit losses (benefit)
164
(49)
Securities charged-off
-
-
Recoveries
-
-
Ending balance
$
5,481
$
5,731
The
 
allowance
 
for
 
credit
 
losses
 
for
 
the
 
Obligations
 
of
 
Puerto
 
Rico,
 
States
 
and
 
political
 
subdivisions
 
includes
 
$
0.3
 
million
 
for
securities issued by
 
municipalities of Puerto
 
Rico, and $
5.2
 
million for bonds
 
issued by the
 
Puerto Rico HFA,
 
which are secured
 
by
second mortgage loans
 
on Puerto Rico
 
residential properties (compared
 
to $
0.1
 
million and $
5.2
 
million, respectively,
 
at December
31, 2024).