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Segment Reporting
 3 Months Ended
Mar. 31, 2015
Notes to Financial Statements [Abstract]  
Segment Reporting Disclosure [Text Block]

Note 38 – Segment reporting

The Corporation's corporate structure consists of two reportable segments – Banco Popular de Puerto Rico and Banco Popular North America. These reportable segments pertain only to the continuing operations of Popular, Inc. As previously indicated in Note 5 to the consolidated financial statements, the regional operations in California, Illinois and Central Florida were classified as discontinued operations in the second quarter of 2014, and the assets and liabilities of these regions were subsequently sold during the third and fourth quarters of 2014.

As indicated in Note 4 to the consolidated financial statements, Business Combination, on February 27, 2015, Banco Popular de Puerto Rico, in an alliance with co-bidders, including BPNA, acquired certain assets and all deposits of Doral Bank from the FDIC as receiver. The financial results for the first quarter of 2015 of both reportable segments include the results from the operations acquired as part of the Doral Bank transaction.

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, 2015, 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:

2015

For the quarter ended March 31, 2015
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico North America Eliminations
Net interest income$ 306,611$ 52,101$ -
Provision for loan losses  42,237  (2,202)  -
Non-interest income   103,529  6,167  -
Amortization of intangibles  1,998  106  -
Depreciation expense  10,108  1,617  -
Other operating expenses  227,576  54,484  -
Income tax expense  37,448  937  -
Net income (loss)$ 90,773$ 3,326$ -
Segment assets$ 28,803,521$ 6,717,758$ (128,481)

For the quarter ended March 31, 2015
  Reportable       
(In thousands) Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 358,712$ (15,517)$ -$ 343,195
Provision (reversal of provision) for loan losses  40,035  -  -  40,035
Non-interest income  109,696  5,643  (104)  115,235
Amortization of intangibles  2,104  -  -  2,104
Depreciation expense  11,725  194  -  11,919
Other operating expenses  282,061  16,990  (732)  298,319
Income tax expense (benefit)  38,385  (6,062)  245  32,568
Net income (loss)$ 94,098$ (20,996)$ 383$ 73,485
Segment assets$ 35,392,798$ 4,905,585$ (4,673,543)$ 35,624,840

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$ 51,431$ -
Provision (reversal of provision) for loan losses  79,837  207  -
Non-interest income   68,089  10,602  -
Amortization of intangibles  1,824  202  -
Depreciation expense  9,498  1,721  -
Other operating expenses  209,839  37,992  -
Income tax expense  29,943  846  -
Net income$ 65,018$ 21,065$ -

For the quarter ended March 31, 2014
  Reportable       
(In thousands) Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 379,301$ (28,130)$ -$ 351,171
Provision for loan losses  80,044  (208)  -  79,836
Non-interest income  78,691  17,408  (67)  96,032
Amortization of intangibles  2,026  -  -  2,026
Depreciation expense  11,219  157  -  11,376
Other operating expenses  247,831  17,076  (710)  264,197
Income tax expense (benefit)  30,789  (7,776)  251  23,264
Net income$ 86,083$ (19,971)$ 392$ 66,504

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

 

2015

For the quarter ended March 31, 2015
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 $ 118,475$ 186,252$ 1,880$ 4$ 306,611
Provision for loan losses  (3,556)  45,793  -  -  42,237
Non-interest (expense) income  27,150  56,004  20,470  (95)  103,529
Amortization of intangibles  29  1,772  197  -  1,998
Depreciation expense  4,320  5,512  276  -  10,108
Other operating expenses  65,856  145,068  16,747  (95)  227,576
Income tax expense  26,053  9,778  1,617  -  37,448
Net income $ 52,923$ 34,333$ 3,513$ 4$ 90,773
Segment assets$ 10,056,505$ 20,053,145$ 486,998$ (1,793,127)$ 28,803,521

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

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

 

2015

For the quarter ended March 31, 2015
Banco Popular North America
(In thousands) Banco Popular North America E-LOAN Eliminations Total Banco Popular North America
Net interest income $ 51,441$ 660$ -$ 52,101
Provision for loan losses  (1,655)  (547)  -  (2,202)
Non-interest income  5,813  354  -  6,167
Amortization of intangibles  106  -  -  106
Depreciation expense  1,617  -  -  1,617
Other operating expenses  53,912  572  -  54,484
Income tax expense  937  -  -  937
Net (loss) income$ 2,337$ 989$ -$ 3,326
Segment assets$ 7,432,512$ 241,561$ (956,315)$ 6,717,758

2014

For the quarter ended March 31, 2014
Banco Popular North America
        Total Banco
  Banco Popular      Popular North
(In thousands) North America E-LOAN Eliminations America
Net interest income $ 50,746$ 685$ -$ 51,431
Reversal of provision for loan losses  (8)  215  -  207
Non-interest income  10,493  109  -  10,602
Amortization of intangibles  202  -  -  202
Depreciation expense  1,721  -  -  1,721
Other operating expenses  37,458  534  -  37,992
Income tax expense   846  -  -  846
Net income$ 21,020$ 45$ -$ 21,065

Geographic Information
  Quarter ended
(In thousands) March 31, 2015 March 31, 2014
Revenues:[1]    
Puerto Rico $ 385,054$ 357,037
United States  56,710  62,483
Other  16,666  27,683
Total consolidated revenues $ 458,430$ 447,203

[1] Total revenues include net interest income (expense), 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, 2015 December 31, 2014
Puerto Rico    
Total assets$ 27,646,641$ 26,276,561
Loans  18,349,897  17,704,170
Deposits  21,395,931  20,365,445
United States    
Total assets$ 6,850,262$ 5,689,604
Loans  4,504,157  3,568,564
Deposits  4,836,699  3,442,084
Other    
Total assets$ 1,127,937$ 1,130,530
Loans  776,030  780,483
Deposits [1]  1,041,059  1,000,006
[1] Represents deposits from BPPR operations located in the U.S. and British Virgin Islands.