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Segment Reporting
 9 Months Ended
Sep. 30, 2013
Notes to Financial Statements [Abstract]  
Segment Reporting Disclosure [Text Block]

Note 33 – Segment reporting

The Corporation's corporate structure consists of two reportable segments – Banco Popular de Puerto Rico and Banco Popular North America.

Management determined the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. The segments were determined based on the organizational structure, which focuses primarily on the markets the segments serve, as well as on the products and services offered by the segments.

Banco Popular de Puerto Rico:

Given that Banco Popular de Puerto Rico constitutes a significant portion of the Corporation's results of operations and total assets at September 30, 2013, additional disclosures are provided for the business areas included in this reportable segment, as described below:

  • Commercial banking represents the Corporation's banking operations conducted at BPPR, which are targeted mainly to corporate, small and middle size businesses. It includes aspects of the lending and depository businesses, as well as other finance and advisory services. BPPR allocates funds across business areas based on duration matched transfer pricing at market rates. This area also incorporates income related with the investment of excess funds, as well as a proportionate share of the investment function of BPPR.
  • Consumer and retail banking represents the branch banking operations of BPPR which focus on retail clients. It includes the consumer lending business operations of BPPR, as well as the lending operations of Popular Auto and Popular Mortgage. Popular Auto focuses on auto and lease financing, while Popular Mortgage focuses principally on residential mortgage loan originations. The consumer and retail banking area also incorporates income related with the investment of excess funds from the branch network, as well as a proportionate share of the investment function of BPPR.
  • Other financial services include the trust and asset management service units of BPPR, the brokerage and investment banking operations of Popular Securities, and the insurance agency and reinsurance businesses of Popular Insurance, Popular Insurance V.I., Popular Risk Services, and Popular Life Re. Most of the services that are provided by these subsidiaries generate profits based on fee income.

Banco Popular North America:

Banco Popular North America's reportable segment consists of the banking operations of BPNA, E-LOAN, Popular Equipment Finance, Inc. and Popular Insurance Agency, U.S.A. BPNA operates through a retail branch network in the U.S. mainland, while E-LOAN supports BPNA's deposit gathering through its online platform. All direct lending activities at E-LOAN were ceased during the fourth quarter of 2008. Popular Equipment Finance, Inc. also holds a running-off loan portfolio as this subsidiary ceased originating loans during 2009. Popular Insurance Agency, U.S.A. offers investment and insurance services across the BPNA branch network.

The Corporate group consists primarily of the holding companies: Popular, Inc., Popular North America, Popular International Bank and certain of the Corporation's investments accounted for under the equity method, including EVERTEC and Centro Financiero BHD, S.A. The Corporate group also includes the expenses of certain corporate areas that are identified as critical to the organization: Finance, Risk Management and Legal.

The accounting policies of the individual operating segments are the same as those of the Corporation. Transactions between reportable segments are primarily conducted at market rates, resulting in profits that are eliminated for reporting consolidated results of operations.

The tables that follow present the results of operations and total assets by reportable segments:

2013

For the quarter ended September 30, 2013
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico North America Eliminations
Net interest income$ 309,946$ 73,179$ -
Provision for loan losses  67,856  4,755  -
Non-interest income   90,995  16,433  -
Amortization of intangibles  1,788  680  -
Depreciation expense  9,630  2,258  -
Other operating expenses  232,612  55,800  -
Income tax expense  26,407  937  -
Net income $ 62,648$ 25,182$ -
Segment assets$ 27,090,255$ 8,782,020$ (11,904)

For the quarter ended September 30, 2013
  Reportable       
(In thousands) Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 383,125$ (28,919)$ -$ 354,206
Provision for loan losses  72,611  52  -  72,663
Non-interest income  107,428  184,583  (52)  291,959
Amortization of intangibles  2,468  -  -  2,468
Depreciation expense  11,888  159  -  12,047
Loss on early extinguishment of debt  -  3,388  -  3,388
Other operating expenses  288,412  20,983  (699)  308,696
Income tax expense (benefit)  27,344  (9,799)  223  17,768
Net income$ 87,830$ 140,881$ 424$ 229,135
Segment assets$ 35,860,371$ 5,361,877$ (5,170,132)$ 36,052,116

For the nine months ended September 30, 2013
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico North America Eliminations
Net interest income$ 929,722$ 209,032$ -
Provision for loan losses  545,685  210  -
Non-interest income   210,703  39,257  -
Amortization of intangibles  5,363  2,040  -
Depreciation expense  29,702  6,870  -
Other operating expenses  707,973  163,145  -
Income tax (benefit) expense  (262,224)  2,809  -
Net income $ 113,926$ 73,215$ -

For the nine months ended September 30, 2013
  Reportable      
(In thousands)  Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 1,138,754$ (82,516)$ -$ 1,056,238
Provision for loan losses  545,895  32  -  545,927
Non-interest income  249,960  370,869  (1,450)  619,379
Amortization of intangibles  7,403  -  -  7,403
Depreciation expense  36,572  484  -  37,056
Loss on early extinguishment of debt  -  3,388  -  3,388
Other operating expenses  871,118  52,985  (2,067)  922,036
Income tax benefit  (259,415)  (17,190)  116  (276,489)
Net income$ 187,141$ 248,654$ 501$ 436,296

2012

For the quarter ended September 30, 2012
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico  North America Eliminations
Net interest income$ 301,016$ 69,598$ -
Provision for loan losses  92,439  13,851  -
Non-interest income   113,378  11,481  -
Amortization of intangibles  1,801  680  -
Depreciation expense  9,368  2,000  -
Loss on early extinguishment of debt  43  -  -
Other operating expenses  220,430  54,942  -
Income tax expense  17,090  937  -
Net income$ 73,223$ 8,669$ -

For the quarter ended September 30, 2012
  Reportable       
(In thousands) Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 370,614$ (26,337)$ 162$ 344,439
Provision (reversal of provision) for loan losses  106,290  (82)  -  106,208
Non-interest income  124,859  7,089  (574)  131,374
Amortization of intangibles  2,481  -  -  2,481
Depreciation expense  11,368  303  -  11,671
Loss on early extinguishment of debt  43  -  -  43
Other operating expenses  275,372  18,653  (1,187)  292,838
Income tax expense (benefit)  18,027  (2,851)  208  15,384
Net income (loss)$ 81,892$ (35,271)$ 567$ 47,188

For the nine months ended September 30, 2012
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico North America  Eliminations
Net interest income$ 889,954$ 213,228$ -
Provision for loan losses  281,986  43,877  -
Non-interest income   311,333  42,187  -
Amortization of intangibles  5,565  2,040  -
Depreciation expense  27,992  6,017  -
Loss on early extinguishment of debt  25,184  -  -
Other operating expenses  673,747  172,127  -
Income tax (benefit) expense  (39,281)  2,809  -
Net income$ 226,094$ 28,545$ -

For the nine months ended September 30, 2012
  Reportable      
(In thousands)  Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 1,103,182$ (78,453)$ 487$ 1,025,216
Provision for loan losses  325,863  267  -  326,130
Non-interest income  353,520  29,079  (1,867)  380,732
Amortization of intangibles  7,605  -  -  7,605
Depreciation expense  34,009  944  -  34,953
Loss on early extinguishment of debt  25,184  -  -  25,184
Other operating expenses  845,874  53,684  (2,500)  897,058
Income tax benefit  (36,472)  (10,108)  263  (46,317)
Net income (loss)$ 254,639$ (94,161)$ 857$ 161,335

Additional disclosures with respect to the Banco Popular de Puerto Rico reportable segment are as follows:

 

2013

For the quarter ended September 30, 2013
Banco Popular de Puerto Rico
    Consumer Other   Total Banco
  Commercial   and Retail  Financial   Popular de
(In thousands) Banking  Banking  Services Eliminations  Puerto Rico
Net interest income $ 122,706$ 184,522$ 2,718$ -$ 309,946
Provision for loan losses  6,898  60,958  -  -  67,856
Non-interest income  10,231  61,736  19,044  (16)  90,995
Amortization of intangibles  1  1,708  79  -  1,788
Depreciation expense  4,066  5,260  304  -  9,630
Other operating expenses  75,088  140,933  16,607  (16)  232,612
Income tax expense  19,411  5,701  1,295  -  26,407
Net income $ 27,473$ 31,698$ 3,477$ -$ 62,648
Segment assets$ 11,168,478$ 18,089,472$ 652,664$ (2,820,359)$ 27,090,255

For the nine months ended September 30, 2013
Banco Popular de Puerto Rico
    Consumer  Other    Total Banco
  Commercial and Retail  Financial    Popular de
(In thousands)  Banking Banking Services Eliminations Puerto Rico
Net interest income $ 355,225$ 567,223$ 7,274$ -$ 929,722
Provision for loan losses  146,510  399,175  -  -  545,685
Non-interest (expense) income  (35,253)  176,172  69,835  (51)  210,703
Amortization of intangibles  3  5,127  233  -  5,363
Depreciation expense  12,906  15,874  922  -  29,702
Other operating expenses  222,384  434,810  50,830  (51)  707,973
Income tax (benefit) expense  (73,123)  (196,194)  7,093  -  (262,224)
Net income $ 11,292$ 84,603$ 18,031$ -$ 113,926

2012

For the quarter ended September 30, 2012
Banco Popular de Puerto Rico
    Consumer  Other    Total Banco
  Commercial  and Retail  Financial    Popular de
(In thousands) Banking Banking Services Eliminations Puerto Rico
Net interest income $ 102,548$ 195,952$ 2,516$ -$ 301,016
Provision for loan losses  55,300  37,139  -  -  92,439
Non-interest income  13,496  74,111  25,809  (38)  113,378
Amortization of intangibles  2  1,708  91  -  1,801
Depreciation expense  4,238  4,886  244  -  9,368
Loss on early extinguishment of debt  43  -  -  -  43
Other operating expenses  69,040  135,179  16,249  (38)  220,430
Income tax (benefit) expense  (6,007)  20,119  2,978  -  17,090
Net (loss) income $ (6,572)$ 71,032$ 8,763$ -$ 73,223

For the nine months ended September 30, 2012
Banco Popular de Puerto Rico
    Consumer Other    Total Banco
  Commercial   and Retail  Financial   Popular de
(In thousands) Banking Banking  Services Eliminations Puerto Rico
Net interest income $ 312,201$ 568,154$ 9,595$ 4$ 889,954
Provision for loan losses  111,723  170,263  -  -  281,986
Non-interest income  32,130  196,228  83,079  (104)  311,333
Amortization of intangibles  12  5,126  427  -  5,565
Depreciation expense  12,610  14,662  720  -  27,992
Loss on early extinguishment of debt  7,905  17,279  -  -  25,184
Other operating expenses  204,289  418,323  51,239  (104)  673,747
Income tax (benefit) expense  (26,397)  (23,240)  10,354  2  (39,281)
Net income $ 34,189$ 161,969$ 29,934$ 2$ 226,094

Additional disclosures with respect to the Banco Popular North America reportable segments are as follows:

 

2013

For the quarter ended September 30, 2013
Banco Popular North America
(In thousands) Banco Popular North America E-LOAN Eliminations Total Banco Popular North America
Net interest income $ 72,459$ 720$ -$ 73,179
Provision (reversal of provision) for loan losses  6,486  (1,731)  -  4,755
Non-interest income  14,576  1,857  -  16,433
Amortization of intangibles  680  -  -  680
Depreciation expense  2,258  -  -  2,258
Other operating expenses  55,191  609  -  55,800
Income tax expense  937  -  -  937
Net income$ 21,483$ 3,699$ -$ 25,182
Segment assets$ 9,513,077$ 327,231$ (1,058,288)$ 8,782,020

For the nine months ended September 30, 2013
Banco Popular North America
  Banco Popular      Total Banco Popular North
(In thousands) North America E-LOAN Eliminations America
Net interest income $ 206,664$ 2,368$ -$ 209,032
(Reversal of provision) provision for loan losses  (2,561)  2,771  -  210
Non-interest income  39,098  159  -  39,257
Amortization of intangibles  2,040  -  -  2,040
Depreciation expense  6,870  -  -  6,870
Other operating expenses  161,268  1,877  -  163,145
Income tax expense  2,809  -  -  2,809
Net income (loss)$ 75,336$ (2,121)$ -$ 73,215

2012

For the quarter ended September 30, 2012
Banco Popular North America
        Total Banco
  Banco Popular      Popular North
(In thousands) North America E-LOAN Eliminations America
Net interest income $ 68,639$ 959$ -$ 69,598
Provision for loan losses  8,294  5,557  -  13,851
Non-interest income   9,470  2,011  -  11,481
Amortization of intangibles  680  -  -  680
Depreciation expense  2,000  -  -  2,000
Other operating expenses  54,430  512  -  54,942
Income tax expense   937  -  -  937
Net income (loss)$ 11,768$ (3,099)$ -$ 8,669

For the nine months ended September 30, 2012
Banco Popular North America
        Total Banco
  Banco Popular      Popular North
(In thousands) North America E-LOAN Eliminations  America
Net interest income $ 210,705$ 2,523$ -$ 213,228
Provision for loan losses  31,180  12,697  -  43,877
Non-interest income  39,207  2,980  -  42,187
Amortization of intangibles  2,040  -  -  2,040
Depreciation expense  6,017  -  -  6,017
Other operating expenses  169,976  2,151  -  172,127
Income tax expense   2,809  -  -  2,809
Net income (loss)$ 37,890$ (9,345)$ -$ 28,545

Geographic Information     
  Quarter ended Nine months ended
(In thousands) September 30, 2013 September 30, 2012 September 30, 2013 September 30, 2012
Revenues:[1]        
Puerto Rico $ 540,721$ 377,032$ 1,378,361$ 1,094,076
United States  85,948  74,248  237,768  238,490
Other  19,496  24,533  59,488  73,382
Total consolidated revenues $ 646,165$ 475,813$ 1,675,617$ 1,405,948

[1] Total revenues include net interest income, service charges on deposit accounts, other service fees, mortgage banking activities, net gain (loss) and valuation adjustments of investment securities, trading account profit (loss), net gain (loss) on sale of loans and valuation adjustments on loans held-for-sale, adjustments to indemnity reserves on loans sold, FDIC loss share expense (income) and other operating income.

Selected Balance Sheet Information:
(In thousands) September 30, 2013 December 31, 2012
Puerto Rico    
Total assets$ 25,912,067$ 26,582,248
Loans  17,948,824  18,484,977
Deposits  19,406,949  19,984,830
United States    
Total assets$ 9,013,477$ 8,816,143
Loans  5,924,406  5,852,705
Deposits  6,036,980  6,049,168
Other    
Total assets$ 1,126,572$ 1,109,144
Loans  754,494  755,950
Deposits [1]  951,125  966,615
[1] Represents deposits from BPPR operations located in the U.S. and British Virgin Islands.