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Segment Reporting
 3 Months Ended
Mar. 31, 2014
Notes to Financial Statements [Abstract]  
Segment Reporting Disclosure [Text Block]

Note 34 – 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 March 31, 2014, 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 under the name of Popular Community Bank, 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:

2014

For the quarter ended March 31, 2014
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico North America Eliminations
Net interest income$ 327,870$ 73,227$ -
Provision (reversal of provision) for loan losses  79,837  (6,557)  -
Non-interest income   68,089  21,135  -
Amortization of intangibles  1,824  680  -
Depreciation expense  9,498  2,310  -
Other operating expenses  209,839  56,113  -
Income tax expense  29,943  846  -
Net income $ 65,018$ 40,970$ -
Segment assets$ 27,734,350$ 8,792,790$ (13,717)

For the quarter ended March 31, 2014
  Reportable       
(In thousands) Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 401,097$ (28,130)$ -$ 372,967
Provision (reversal of provision) for loan losses  73,280  (208)  -  73,072
Non-interest income  89,224  17,408  (67)  106,565
Amortization of intangibles  2,504  -  -  2,504
Depreciation expense  11,808  157  -  11,965
Other operating expenses  265,952  17,076  (710)  282,318
Income tax expense (benefit)  30,789  (7,776)  251  23,264
Net income (loss)$ 105,988$ (19,971)$ 392$ 86,409
Segment assets$ 36,513,423$ 5,448,958$ (5,218,219)$ 36,744,162

2013

For the quarter ended March 31, 2013
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico  North America Eliminations
Net interest income$ 305,028$ 68,018$ -
Provision for loan losses  221,885  2,011  -
Non-interest income   16,377  10,071  -
Amortization of intangibles  1,788  680  -
Depreciation expense  9,766  2,325  -
Other operating expenses  249,635  54,847  -
Income tax (benefit) expense  (52,865)  936  -
Net (loss) income$ (108,804)$ 17,290$ -

For the quarter ended March 31, 2013
  Reportable       
(In thousands) Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 373,046$ (26,733)$ -$ 346,313
Provision (reversal of provision) for loan losses  223,896  (40)  -  223,856
Non-interest income  26,448  7,672  (63)  34,057
Amortization of intangibles  2,468  -  -  2,468
Depreciation expense  12,091  163  -  12,254
Other operating expenses  304,482  15,172  (678)  318,976
Income tax benefit  (51,929)  (5,133)  185  (56,877)
Net loss$ (91,514)$ (29,223)$ 430$ (120,307)

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

 

2014

For the quarter ended March 31, 2014
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 $ 136,460$ 188,677$ 2,733$ -$ 327,870
Provision for loan losses  31,189  48,648  -  -  79,837
Non-interest income  7,684  37,979  22,444  (18)  68,089
Amortization of intangibles  1  1,709  114  -  1,824
Depreciation expense  3,899  5,312  287  -  9,498
Other operating expenses  56,439  137,601  15,817  (18)  209,839
Income tax expense  18,008  8,828  3,107  -  29,943
Net income $ 34,608$ 24,558$ 5,852$ -$ 65,018
Segment assets$ 10,867,418$ 18,459,906$ 997,506$ (2,590,480)$ 27,734,350

2013

For the quarter ended March 31, 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 $ 113,803$ 189,153$ 2,072$ -$ 305,028
Provision for loan losses  145,773  76,112  -  -  221,885
Non-interest (loss) income  (65,227)  58,218  23,402  (16)  16,377
Amortization of intangibles  1  1,709  78  -  1,788
Depreciation expense  3,976  5,491  299  -  9,766
Other operating expenses  78,833  154,285  16,533  (16)  249,635
Income tax (benefit) expense  (55,651)  678  2,108  -  (52,865)
Net (loss) income $ (124,356)$ 9,096$ 6,456$ -$ (108,804)

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

 

2014

For the quarter ended March 31, 2014
Banco Popular North America
(In thousands) Banco Popular North America E-LOAN Eliminations Total Banco Popular North America
Net interest income $ 72,542$ 685$ -$ 73,227
(Reversal of) provision for loan losses  (6,772)  215  -  (6,557)
Non-interest income  21,026  109  -  21,135
Amortization of intangibles  680  -  -  680
Depreciation expense  2,310  -  -  2,310
Other operating expenses  55,579  534  -  56,113
Income tax expense  846  -  -  846
Net income$ 40,925$ 45$ -$ 40,970
Segment assets$ 9,514,288$ 286,910$ (1,008,408)$ 8,792,790

2013

For the quarter ended March 31, 2013
Banco Popular North America
        Total Banco
  Banco Popular      Popular North
(In thousands) North America E-LOAN Eliminations America
Net interest income $ 67,117$ 901$ -$ 68,018
Provision (reversal of) for loan losses  2,282  (271)  -  2,011
Non-interest income (loss)  11,209  (1,138)  -  10,071
Amortization of intangibles  680  -  -  680
Depreciation expense  2,325  -  -  2,325
Other operating expenses  54,168  679  -  54,847
Income tax expense   936  -  -  936
Net income (loss)$ 17,935$ (645)$ -$ 17,290

Geographic Information
  Quarter ended
(In thousands) March 31, 2014 March 31, 2013
Revenues:[1]    
Puerto Rico $ 357,037$ 285,814
United States  94,812  75,639
Other  27,683  18,917
Total consolidated revenues $ 479,532$ 380,370

[1] Total revenues include net interest income, service charges on deposit accounts, other service fees, mortgage banking activities, net gain (loss) and valuation adjustments on investment securities, trading account (loss) profit, net (loss) gain 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) March 31, 2014 December 31, 2013
Puerto Rico    
Total assets$ 26,584,140$ 25,714,758
Loans  18,006,842  18,107,764
Deposits  20,270,578  19,730,408
United States    
Total assets$ 9,038,539$ 8,897,535
Loans  5,802,969  5,839,115
Deposits  6,055,811  6,007,159
Other    
Total assets$ 1,121,483$ 1,137,040
Loans  766,897  759,840
Deposits [1]  939,262  973,578
[1] Represents deposits from BPPR operations located in the U.S. and British Virgin Islands.