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Related party transactions
 3 Months Ended
Mar. 31, 2014
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]

Note 24 – Related party transactions with affiliated company / joint venture

EVERTEC

 

The Corporation has an investment in EVERTEC, Inc. (“EVERTEC”), which provides various processing and information technology services to the Corporation and its subsidiaries and gives BPPR access to the ATH network owned and operated by EVERTEC. As of March 31, 2014, the Corporation's stake in EVERTEC is of 14.9%. The investment in EVERTEC is accounted for under the equity method and is evaluated for impairment if events or circumstances indicate that a decrease in value of the investment has occurred that is other than temporary. Refer to Note 31 “Related party transactions” to the consolidated financial statements included in the Corporation's 2013 Annual Report for details.

 

The Corporation received $ 1.2 million in dividend distributions during the quarter ended March 31, 2014 from its investments in EVERTEC's holding company and none during the quarter ended March 31, 2013. The Corporation's equity in EVERTEC is presented in the table which follows and is included as part of “other assets” in the consolidated statements of financial condition.

(In thousands) March 31, 2014   December 31, 2013
Equity investment in EVERTEC$ 20,467 $ 19,931

The Corporation had the following financial condition balances outstanding with EVERTEC at March 31, 2014 and December 31, 2013. Items that represent liabilities to the Corporation are presented with parenthesis.

(In thousands)March 31, 2014 December 31, 2013
Accounts receivable (Other assets)  6,595  8,634
Deposits  (16,422)  (14,289)
Accounts payable (Other liabilities)  (16,016)  (15,862)
Net total$ (25,843)$ (21,517)

The Corporation's proportionate share of income or loss from EVERTEC is included in other operating income in the consolidated statements of operations. The following table presents the Corporation's proportionate share of EVERTEC's income (loss) and changes in stockholders' equity for the quarters ended March 31, 2014 and 2013.

  Quarter ended March 31,
(In thousands) 2014  2013
Share of income from investment in EVERTEC$ 2,779 $ 1,106
Share of other changes in EVERTEC's stockholders' equity  238   (1,654)
Share of EVERTEC's changes in equity recognized in income$ 3,017 $ (548)

The following tables present the impact of transactions and service payments between the Corporation and EVERTEC (as an affiliate) and their impact on the results of operations for the quarters ended March 31, 2014 and 2013. Items that represent expenses to the Corporation are presented with parenthesis.

 Quarter ended 
(In thousands)March 31, 2014March 31, 2013Category
Interest income on loan to EVERTEC$ -$ 853Interest income
Interest income on investment securities issued by EVERTEC  -  963Interest income
Interest expense on deposits  (20)  (27)Interest expense
ATH and credit cards interchange income from services to EVERTEC  6,419  6,025Other service fees
Rental income charged to EVERTEC  1,677  1,681Net occupancy
Processing fees on services provided by EVERTEC  (38,762)  (37,876)Professional fees
Other services provided to EVERTEC  221  204Other operating expenses
Total$ (30,465)$ (28,177) 

EVERTEC has a letter of credit issued by BPPR, for an amount of $3.6 million at March 31, 2014 and December 31, 2013. The Corporation also agreed to maintain outstanding this letter of credit for a 5-year period which expires on September 30, 2015. EVERTEC and the Corporation entered into a Reimbursement Agreement, in which EVERTEC will reimburse the Corporation for any losses incurred by the Corporation in connection with the performance bonds and the letter of credit. Possible losses resulting from these agreements are considered insignificant.

During the second quarter of 2013, the Corporation discontinued the elimination of its proportionate ownership share of intercompany transactions with EVERTEC from their respective revenue and expense categories to reflect them as an equity pick-up adjustment in other operating income. The consolidated statements of operations for all period presented have been adjusted to reflect this change. This change had no impact on the Corporation's net income and did not have a material effect on its consolidated financial statements. The following tables present the impact of the change in the Corporation's results for all comparative prior periods presented.

  Quarter ended March 31,
(In thousands) 2014 2013
Share of EVERTEC's changes in equity recognized in income$ 3,017$ (548)
Intra-company eliminations considered in other operating income (detailed in next table)  (4,539)  (13,660)
Share of EVERTEC's changes in equity, net of eliminations$ (1,522)$ (14,208)

  March 31, 2014 March 31, 2013 
(In thousands)As currently reportedImpact of eliminations Amounts net of eliminations As currently reportedImpact of eliminations Amounts net of eliminationsCategory
Interest income on loan to EVERTEC$ -$ -$ -$ 853$ (413)$ 440Interest income
Interest income on investment securities issued by EVERTEC  -  -  -  963  (467)  496Interest income
Interest expense on deposits  (20)  3  (17)  (27)  13  (14)Interest expense
ATH and credit cards interchange income from services to EVERTEC  6,419  (956)  5,463  6,025  (2,921)  3,104Other service fees
Rental income charged to EVERTEC  1,677  (250)  1,427  1,681  (815)  866Net occupancy
Processing fees on services provided by EVERTEC  (38,762)  5,775  (32,987)  (37,876)  18,362  (19,514)Professional fees
Other services provided to EVERTEC  221  (33)  188  204  (99)  105Other operating expenses
Total$ (30,465)$ 4,539$ (25,926)$ (28,177)$ 13,660$ (14,517) 

PRLP 2011 Holdings, LLC

As indicated in Note 23 to the consolidated financial statements, the Corporation holds a 24.9% equity interest in PRLP 2011 Holdings, LLC and currently provides certain financing to the joint venture as well as holds certain deposits from the entity.

The Corporation's equity in PRLP 2011 Holdings, LLC is presented in the table which follows and is included as part of “other assets” in the consolidated statements of financial condition.

 

(In thousands) March 31, 2014  December 31, 2013
Equity investment in PRLP 2011 Holdings, LLC $ 24,851 $ 26,596

The Corporation had the following financial condition balances outstanding with PRLP 2011 Holdings, LLC at March 31, 2014 and December 31, 2013.

(In thousands)March 31, 2014December 31, 2013
Loans$ 15,482$ 19,647
Accrued interest receivable  53  65
Deposits (non-interest bearing)  (9,427)  (3,621)
Net total$ 6,108$ 16,091

The Corporation's proportionate share of income or loss from PRLP 2011 Holdings, LLC is included in other operating income in the consolidated statements of operations. The following table presents the Corporation's proportionate share of income (loss) from PRLP 2011 Holdings, LLC for the quarters ended March 31, 2014 and 2013.

   Quarter ended March 31,
(In thousands) 2014  2013
Share of (loss) income from the equity investment in PRLP 2011 Holdings, LLC $ (1,746) $ 1,996

The following table presents transactions between the Corporation and PRLP 2011 Holdings, LLC and their impact on the Corporation's results of operations for the quarters ended March 31, 2014 and 2013.

   Quarter ended March 31, 
(In thousands)20142013Category
Interest income on loan to PRLP 2011 Holdings, LLC$ 172$ 397Interest income

PR Asset Portfolio 2013-1 International, LLC

 

As indicated in Note 23 to the consolidated financial statements, effective March 2013 the Corporation holds a 24.9% equity interest in PR Asset Portfolio 2013-1 International, LLC and currently provides certain financing to the joint venture as well as holds certain deposits from the entity.

 

The Corporation's equity in PR Asset Portfolio 2013-1 International, LLC is presented in the table which follows and is included as part of “other assets” in the consolidated statements of financial condition.

(In thousands) March 31, 2014   December 31, 2013
Equity investment in PR Asset Portfolio 2013-1 International, LLC$ 31,809 $ 30,478

The Corporation had the following financial condition balances outstanding with PR Asset Portfolio 2013-1 International, LLC, at March 31, 2014 and December 31, 2013.

(In thousands)March 31, 2014December 31, 2013
Loans$ 149,185$ 160,283
Accrued interest receivable  417  436
Deposits  (31,357)  (20,808)
Net total$ 118,245$ 139,911

The Corporation's proportionate share of income or loss from PR Asset Portfolio 2013-1 International, LLC is included in other operating income in the consolidated statements of operations. The following table presents the Corporation's proportionate share of income (loss) from PR Asset Portfolio 2013-1 International, LLC for quarter ended March 31, 2014.

  Quarter ended
(In thousands)March 31, 2014
Share of income from the equity investment in PR Asset Portfolio 2013-1 International, LLC $ 1,288

The following table presents transactions between the Corporation and PR Asset Portfolio 2013-1 International, LLC and their impact on the Corporation's results of operations for the quarter ended March 31, 2014.

 Quarter ended  
(In thousands) March 31, 2014Category
Interest income on loan to PR Asset Portfolio 2013-1 International, LLC$ 1,262Interest income
Servicing fee paid by PR Asset Portfolio 2013-1 International, LLC  70Other service fees
Total$ 1,332