v3.26.1
FAIR VALUE (Tables)
 3 Months Ended
Mar. 31, 2026
FAIR VALUE [Abstract]  
Assets and Liabilities Measured at Fair Value on Recurring Basis [Table Text Block]
Assets and liabilities measured at fair value on a recurring basis are summarized below as of
the indicated dates:
As of March 31, 2026
As of December 31, 2025
Fair Value Measurements Using
Fair Value Measurements Using
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
(In thousands)
Assets:
Available-for-sale debt securities:
U.S. Treasury securities
$
497,254
$
-
$
-
$
497,254
$
497,342
$
-
$
-
$
497,342
Noncallable U.S. agencies debt securities
-
277,130
-
277,130
-
336,849
-
336,849
Callable U.S. agencies debt securities
-
562,787
-
562,787
-
566,263
-
566,263
MBS
-
3,326,804
3,113
(1)
3,329,917
-
3,148,692
3,266
(1)
3,151,958
Puerto Rico government obligation
-
-
1,609
1,609
-
-
1,620
1,620
Equity securities
5,005
-
-
5,005
5,024
-
-
5,024
Derivative assets
-
350
-
350
-
345
-
345
Liabilities:
Derivative liabilities
-
162
-
162
-
200
-
200
(1) Related to private label MBS.
Fair Value of Assets and Liabilities Measured on Recurring Basis [Table Text Block]
The
table
below
presents
a
reconciliation
of
the
beginning
and
ending
balances
of
all
assets
measured
at
fair
value
on
a
recurring basis using significant unobservable inputs (Level 3) for the
quarters ended March 31, 2026 and 2025:
Quarter Ended March 31,
2026
2025
Level 3 Instruments Only
Securities Available
for Sale
(1)
Securities Available
for Sale
(1)
(In thousands)
Beginning balance
$
4,886
$
6,815
Total gain (losses):
Included in other comprehensive income (unrealized)
182
46
Included in earnings (unrealized)
(2)
(88)
5
Principal repayments and amortization
(258)
(233)
Ending balance
$
4,722
$
6,633
(1)
Amounts mostly related to private label MBS.
(2)
Changes in unrealized (losses) gains included in earnings were
recognized within provision for credit losses - expense
and relate to assets still held as of the reporting date.
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]
The
tables
below
present
quantitative
information
for
significant
assets
measured
at
fair
value
on
a
recurring
basis
using
significant unobservable inputs (Level 3) as of the indicated dates:
March 31, 2026
Fair Value
Valuation Technique
Unobservable Input
Range
Weighted
Average
Minimum
Maximum
(Dollars in thousands)
Available-for-sale
debt securities:
Private label MBS
$
3,113
Discounted cash flows
Discount rate
16.2%
16.2%
16.2%
Prepayment rate
1.6%
8.0%
2.5%
Projected cumulative loss rate
0.1%
12.5%
6.8%
Puerto Rico government obligation
$
1,609
Discounted cash flows
Discount rate
10.8%
10.8%
10.8%
Projected cumulative loss rate
23.6%
23.6%
23.6%
December 31, 2025
Fair Value
Valuation Technique
Unobservable Input
Range
Weighted
Average
Minimum
Maximum
(Dollars in thousands)
Available-for-sale
debt securities:
Private label MBS
$
3,266
Discounted cash flows
Discount rate
15.9%
15.9%
15.9%
Prepayment rate
1.6%
8.0%
3.1%
Projected cumulative loss rate
0.1%
11.4%
5.5%
Puerto Rico government obligation
$
1,620
Discounted cash flows
Discount rate
10.8%
10.8%
10.8%
Projected cumulative loss rate
24.0%
24.0%
24.0%
Impairment of Valuation Adjustments were Recorded for Assets Recognized at Fair Value [Table Text Block]
For the quarters ended March 31, 2026 and 2025, the Corporation recorded
losses or valuation adjustments for assets recognized at
fair value on a non-recurring basis and still held at the respective reporting dates,
as shown in the following table:
Carrying value as of March 31,
Related to losses recorded for the Quarter Ended
March 31,
2026
2025
2026
2025
(In thousands)
Level 3:
Loans receivable
(1)
$
3,970
$
4,647
$
(436)
$
(164)
OREO
(2)
119
335
(6)
(24)
(1)
Consists mainly of
collateral dependent
commercial and construction
loans. The
Corporation generally
measured losses
based on the
fair value of
the collateral.
The Corporation derived
the fair values from
external appraisals that
took into consideration
prices in observed
transactions involving similar
assets in similar
locations but adjusted
for specific characteristics
and
assumptions of the
collateral (e.g., absorption rates),
which are not market observable.
The adjustment applied to
appraisals was
3
% for the quarter
ended March 31, 2026
and
22
% for the
quarter ended March 31, 2025.
(2)
The Corporation
derived the
fair values
from appraisals
that took
into consideration
prices in
observed transactions
involving similar
assets in
similar locations
but adjusted
for specific
characteristics and assumptions of
the properties (e.g., absorption
rates and net operating
income of income producing
properties), which are
not market observable. Losses
were related to
market valuation adjustments
after the transfer
of the loans
to the OREO
portfolio. The
adjustment applied to
appraisals was
16
% for the
quarter ended March
31, 2026, and
from
2
% to
24
% for the quarter ended March 31, 2025.
Estimated Fair Value and Carrying Value of Financial Instruments [Table Text Block]
The
following
tables
present
the
carrying
value,
estimated
fair
value
and
estimated
fair
value
level
of
the
hierarchy
of
financial
instruments as of the indicated dates:
Total Carrying Amount
in Statement of
Financial Condition as
of March 31, 2026
Fair Value Estimate as
of
March 31, 2026
Level 1
Level 2
Level 3
(In thousands)
Assets:
Cash and due from banks and money market investments (amortized
cost)
$
550,899
$
550,899
$
550,899
$
-
$
-
Available-for-sale debt
securities (fair value)
4,668,697
4,668,697
497,254
4,166,721
4,722
Held-to-maturity debt securities:
Held-to-maturity debt securities (amortized cost)
257,522
Less: ACL on held-to-maturity debt securities
(641)
Held-to-maturity debt securities, net of ACL
$
256,881
253,485
-
171,353
82,132
Equity securities (amortized cost)
41,427
41,427
-
41,427
(1)
-
Other equity securities (fair value)
5,005
5,005
5,005
-
-
Loans held for sale (lower of cost or market)
12,805
13,006
-
13,006
-
Loans held for investment:
Loans held for investment (amortized cost)
13,091,077
Less: ACL for loans and finance leases
(245,060)
Loans held for investment, net of ACL
$
12,846,017
12,773,439
-
-
12,773,439
MSRs (amortized cost)
22,880
40,485
-
-
40,485
Derivative assets (fair value) (2)
350
350
-
350
-
Liabilities:
Deposits (amortized cost)
$
16,595,821
$
16,600,047
$
-
$
16,600,047
$
-
Short-term advances from the FHLB (amortized cost)
90,000
90,001
-
90,001
-
Long-term advances from the FHLB (amortized cost)
200,000
201,168
-
201,168
-
Derivative liabilities (fair value) (2)
162
162
-
162
-
(1) Includes FHLB stock with a carrying value of $
24.7
million, which is considered restricted.
(2) Includes interest rate swap agreements, forward contracts, and interest rate lock commitments.
Total Carrying Amount
in Statement of
Financial Condition as
of December 31, 2025
Fair Value Estimate as
of
December 31, 2025
Level 1
Level 2
Level 3
(In thousands)
Assets:
Cash and due from banks and money market investments (amortized
cost)
$
658,599
$
658,599
$
658,599
$
-
$
-
Available-for-sale debt
securities (fair value)
4,554,032
4,554,032
497,342
4,051,804
4,886
Held-to-maturity debt securities:
Held-to-maturity debt securities (amortized cost)
265,296
Less: ACL on held-to-maturity debt securities
(733)
Held-to-maturity debt securities, net of ACL
$
264,563
262,055
-
178,815
83,240
Equity securities (amortized cost)
39,729
39,729
-
39,729
(1)
-
Other equity securities (fair value)
5,024
5,024
5,024
-
-
Loans held for sale (lower of cost or market)
16,697
16,996
-
16,996
-
Loans held for investment:
Loans held for investment (amortized cost)
13,125,356
Less: ACL for loans and finance leases
(249,037)
Loans held for investment, net of ACL
$
12,876,319
12,806,115
-
-
12,806,115
MSRs (amortized cost)
23,288
40,874
-
-
40,874
Derivative assets (fair value) (2)
345
345
-
345
-
Liabilities:
Deposits (amortized cost)
$
16,670,143
$
16,675,488
$
-
$
16,675,488
$
-
Long-term advances from the FHLB (amortized cost)
290,000
292,581
-
292,581
-
Derivative liabilities (fair value) (2)
200
200
-
200
-
(1) Includes FHLB stock with a carrying value of $
24.7
million, which is considered restricted.
(2) Includes interest rate swap agreements, forward contracts, and interest rate lock commitments.