Segment Reporting

6 Months Ended

Jun. 30, 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 4 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 5 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 quarter and six months period ended on June 30, 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 June 30, 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 June 30, 2015
				Banco Popular		Banco Popular		Intersegment
(In thousands)				de Puerto Rico		North America		Eliminations
Net interest income			$	316,085	$	61,932	$	-
Provision (reversal of provision) for loan losses				76,068		(61)		-
Non-interest income				125,735		5,670		125
Amortization of intangibles				2,563		318		-
Depreciation expense				10,103		1,746		-
Other operating expenses				279,887		48,472		-
Income tax expense (benefit)				17,312		(543,833)		-
Net income			$	55,887	$	560,960	$	125
Segment assets			$	29,669,355	$	7,458,709	$	(589,902)


For the quarter ended June 30, 2015
		Reportable
(In thousands)		Segments		Corporate		Eliminations		Total Popular, Inc.
Net interest income (expense)	$	378,017	$	(15,464)	$	-	$	362,553
Provision for loan losses		76,007		227		-		76,234
Non-interest income		131,530		10,483		(1,254)		140,759
Amortization of intangibles		2,881		-		-		2,881
Depreciation expense		11,849		181		-		12,030
Other operating expenses		328,359		20,604		(700)		348,263
Income tax benefit		(526,521)		(6,796)		(216)		(533,533)
Net income (loss)	$	616,972	$	(19,197)	$	(338)	$	597,437
Segment assets	$	36,538,162	$	4,909,006	$	(4,697,055)	$	36,750,113

For the six months ended June 30, 2015
				Banco Popular		Banco Popular		Intersegment
(In thousands)				de Puerto Rico		North America		Eliminations
Net interest income			$	622,696	$	114,033	$	-
Provision (reversal of provision) for loan losses				118,305		(2,263)		-
Non-interest income				229,265		11,836		125
Amortization of intangibles				4,562		423		-
Depreciation expense				20,211		3,363		-
Other operating expenses				507,463		102,957		-
Income tax expense (benefit)				54,761		(542,896)		-
Net income			$	146,659	$	564,285	$	125
Segment assets			$	29,669,355	$	7,458,709	$	(589,902)


For the six months ended June 30, 2015
		Reportable
(In thousands)		Segments		Corporate		Eliminations		Total Popular, Inc.
Net interest income (expense)	$	736,729	$	(30,981)	$	-	$	705,748
Provision for loan losses		116,042		227		-		116,269
Non-interest income		241,226		16,125		(1,357)		255,994
Amortization of intangibles		4,985		-		-		4,985
Depreciation expense		23,574		375		-		23,949
Other operating expenses		610,420		37,592		(1,431)		646,581
Income tax benefit		(488,135)		(12,858)		29		(500,964)
Net income (loss)	$	711,069	$	(40,192)	$	45	$	670,922
Segment assets	$	36,538,162	$	4,909,006		(4,697,055)	$	36,750,113

2014

For the quarter ended June 30, 2014
				Banco Popular		Banco Popular		Intersegment
(In thousands)				de Puerto Rico		North America		Eliminations
Net interest income			$	334,079	$	48,688	$	-
Provision (reversal of provision) for loan losses				86,432		(24,786)		-
Non-interest income				38,505		18,187		-
Amortization of intangibles				1,822		203		-
Depreciation expense				9,824		1,663		-
Other operating expenses				211,206		38,010		-
Income tax (benefit) expense				(7,958)		846		-
Net income			$	71,258	$	50,939	$	-


For the quarter ended June 30, 2014
		Reportable
(In thousands)		Segments		Corporate		Eliminations		Total Popular, Inc.
Net interest income (expense)	$	382,767	$	(442,148)	$	-	$	(59,381)
Provision for loan losses		61,646		32		-		61,678
Non-interest income		56,692		7,348		(1,251)		62,789
Amortization of intangibles		2,025		-		-		2,025
Depreciation expense		11,487		168		-		11,655
Other operating expenses		249,216		13,226		(683)		261,759
Income tax (benefit) expense		(7,112)		3,209		(221)		(4,124)
Net income (loss)	$	122,197	$	(451,435)	$	(347)	$	(329,585)

For the six months ended June 30, 2014
				Banco Popular		Banco Popular		Intersegment
(In thousands)				de Puerto Rico		North America		Eliminations
Net interest income			$	661,949	$	100,119	$	-
Provision (reversal of provision) for loan losses				166,269		(24,579)		-
Non-interest income				106,594		28,789		-
Amortization of intangibles				3,646		405		-
Depreciation expense				19,322		3,384		-
Other operating expenses				421,045		76,002		-
Income tax expense				21,985		1,692		-
Net income			$	136,276	$	72,004	$	-


For the six months ended June 30, 2014
		Reportable
(In thousands)		Segments		Corporate		Eliminations		Total Popular, Inc.
Net interest income (expense)	$	762,068	$	(470,278)	$	-	$	291,790
Provision (reversal of provision) for loan losses		141,690		(176)		-		141,514
Non-interest income		135,383		24,756		(1,318)		158,821
Amortization of intangibles		4,051		-		-		4,051
Depreciation expense		22,706		325		-		23,031
Other operating expenses		497,047		30,302		(1,393)		525,956
Income tax expense (benefit)		23,677		(4,567)		30		19,140
Net income (loss)	$	208,280	$	(471,406)	$	45	$	(263,081)

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

2015

For the quarter ended June 30, 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	$	119,205	$	194,737	$	2,143	$	-	$	316,085
Provision for loan losses		66,792		9,276		-		-		76,068
Non-interest income		35,992		66,436		23,407		(100)		125,735
Amortization of intangibles		(23)		1,912		674		-		2,563
Depreciation expense		4,703		5,104		296		-		10,103
Other operating expenses		101,717		160,871		17,399		(100)		279,887
Income tax (benefit) expense		(13,395)		27,530		3,177		-		17,312
Net (loss) income	$	(4,597)	$	56,480	$	4,004	$	-	$	55,887
Segment assets	$	10,038,389	$	19,853,299	$	744,519	$	(966,852)	$	29,669,355

For the six months ended June 30, 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	$	237,680	$	380,989	$	4,023	$	4	$	622,696
Provision for loan losses		63,236		55,069		-		-		118,305
Non-interest income		63,142		122,440		43,878		(195)		229,265
Amortization of intangibles		6		3,684		872		-		4,562
Depreciation expense		9,023		10,616		572		-		20,211
Other operating expenses		167,573		305,939		34,146		(195)		507,463
Income tax expense		12,658		37,308		4,795		-		54,761
Net income	$	48,326	$	90,813	$	7,516	$	4	$	146,659
Segment assets	$	10,038,389	$	19,853,299	$	744,519	$	(966,852)	$	29,669,355

2014

For the quarter ended June 30, 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	$	139,906	$	192,019	$	2,154	$	-	$	334,079
Provision for loan losses		76,879		9,553		-		-		86,432
Non-interest (expense) income		(14,141)		28,415		24,249		(18)		38,505
Amortization of intangibles		1		1,709		112		-		1,822
Depreciation expense		4,124		5,418		282		-		9,824
Other operating expenses		58,326		136,619		16,279		(18)		211,206
Income tax (benefit) expense		(16,090)		4,774		3,358		-		(7,958)
Net income	$	2,525	$	62,361	$	6,372	$	-	$	71,258

For the six months ended June 30, 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	$	276,366	$	380,696	$	4,887	$	-	$	661,949
Provision for loan losses		108,068		58,201		-		-		166,269
Non-interest (expense) income		(6,457)		66,394		46,693		(36)		106,594
Amortization of intangibles		2		3,418		226		-		3,646
Depreciation expense		8,023		10,730		569		-		19,322
Other operating expenses		114,765		274,220		32,096		(36)		421,045
Income tax expense		1,918		13,602		6,465		-		21,985
Net income	$	37,133	$	86,919	$	12,224	$	-	$	136,276

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

2015

For the quarter ended June 30, 2015
Banco Popular North America
(In thousands)		Banco Popular North America		E-LOAN		Eliminations		Total Banco Popular North America
Net interest income	$	61,277	$	655	$	-	$	61,932
Provision (reversal for provision) for loan losses		1,156		(1,217)		-		(61)
Non-interest income (expense)		5,711		(41)		-		5,670
Amortization of intangibles		318		-		-		318
Depreciation expense		1,746		-		-		1,746
Other operating expenses		47,682		790		-		48,472
Income tax (benefit)		(341,394)		(202,439)		-		(543,833)
Net income	$	357,480	$	203,480	$	-	$	560,960
Segment assets	$	7,975,328	$	430,028	$	(946,647)	$	7,458,709

For the six months ended June 30, 2015
Banco Popular North America
		Banco Popular						Total Banco Popular North
(In thousands)		North America		E-LOAN		Eliminations		America
Net interest income	$	112,718	$	1,315	$	-	$	114,033
Reversal of provision for loan losses		(499)		(1,764)		-		(2,263)
Non-interest income		11,523		313		-		11,836
Amortization of intangibles		423		-		-		423
Depreciation expense		3,363		-		-		3,363
Other operating expenses		101,595		1,362		-		102,957
Income tax benefit		(340,457)		(202,439)		-		(542,896)
Net income	$	359,816	$	204,469	$	-	$	564,285
Segment assets	$	7,975,328	$	430,028	$	(946,647)	$	7,458,709

2014

For the quarter ended June 30, 2014
Banco Popular North America
								Total Banco
		Banco Popular						Popular North
(In thousands)		North America		E-LOAN		Eliminations		America
Net interest income	$	47,966	$	722	$	-	$	48,688
Reversal of provision for loan losses		(21,759)		(3,027)		-		(24,786)
Non-interest income		16,772		1,415		-		18,187
Amortization of intangibles		203		-		-		203
Depreciation expense		1,663		-		-		1,663
Other operating expenses		37,339		671		-		38,010
Income tax expense		846		-		-		846
Net income	$	46,446	$	4,493	$	-	$	50,939

For the six months ended June 30, 2014
Banco Popular North America
								Total Banco
		Banco Popular						Popular North
(In thousands)		North America		E-LOAN		Eliminations		America
Net interest income	$	98,712	$	1,407	$	-	$	100,119
Reversal of provision for loan losses		(21,767)		(2,812)		-		(24,579)
Non-interest income		27,265		1,524		-		28,789
Amortization of intangibles		405		-		-		405
Depreciation expense		3,384		-		-		3,384
Other operating expenses		74,797		1,205		-		76,002
Income tax expense		1,692		-		-		1,692
Net income	$	67,466	$	4,538	$	-	$	72,004

Geographic Information
		Quarter ended				Six months ended
(in thousands)		June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
Revenues:
Puerto Rico	$	415,972	$	(80,277)	$	801,026	$	276,760
United States		67,235		64,992		123,945		127,475
Other		20,105		18,693		36,771		46,376
Total consolidated revenues	$	503,312	$	3,408	$	961,742	$	450,611

[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)		June 30, 2015		December 31, 2014
Puerto Rico
Total assets	$	28,299,519	$	26,276,561
Loans		17,931,326		17,704,170
Deposits		21,581,425		20,365,445
United States
Total assets	$	7,322,694	$	5,689,604
Loans		4,619,403		3,568,564
Deposits		5,111,236		3,442,084
Other
Total assets	$	1,127,900	$	1,130,530
Loans		776,353		780,483
Deposits ^[1]		1,058,033		1,000,006
[1] Represents deposits from BPPR operations located in the U.S. and British Virgin Islands.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 34

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 41

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 33

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 32

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 26

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 35

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 40

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 42

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 10

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 29

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 31

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 30

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

+ Details