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Segment Reporting
 3 Months Ended
Mar. 31, 2012
Notes to Financial Statements [Abstract]  
Segment Reporting Disclosure [Text Block]

Note 30 – 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, 2012, 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:

2012

For the quarter ended March 31, 2012
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico North America Eliminations
Net interest income$ 290,107$ 74,075$ -
Provision for loan losses  85,857  14,726  -
Non-interest income   113,734  15,456  -
Amortization of intangibles  1,913  680  -
Depreciation expense  9,387  2,029  -
Loss on early extinguishment of debt  69  -  -
Other operating expenses  222,357  61,882  -
Income tax expense  17,353  936  -
Net income $ 66,905$ 9,278$ -
Segment assets$ 28,026,771$ 8,664,824$ (12,300)

For the quarter ended March 31, 2012
  Reportable       
(In thousands) Segments Corporate Eliminations Total Popular, Inc.
Net interest income (loss)$ 364,182$ (26,816)$ 216$ 337,582
Provision for loan losses  100,583  140  -  100,723
Non-interest income  129,190  11,506  (16,788)  123,908
Amortization of intangibles  2,593  -  -  2,593
Depreciation expense  11,416  340  -  11,756
Loss on early extinguishment of debt  69  -  -  69
Other operating expenses  284,239  14,826  (17,316)  281,749
Income tax expense (benefit)  18,289  (2,296)  199  16,192
Net income (loss)$ 76,183$ (28,320)$ 545$ 48,408
Segment assets$ 36,679,295$ 5,342,418$ (4,972,492)$ 37,049,221

2011

For the quarter ended March 31, 2011
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico  North America Eliminations
Net interest income$ 295,445$ 74,814$ -
Provision for loan losses  67,256  8,063  -
Non-interest income   121,727  17,417  -
Amortization of intangibles  1,575  680  -
Depreciation expense  9,632  1,991  -
Loss on early extinguishment of debt  239  -  -
Other operating expenses  188,730  58,227  -
Income tax expense  146,144  938  -
Net income$ 3,596$ 22,332$ -
Segment assets$ 29,452,947$ 8,975,972$ (26,335)

For the quarter ended March 31, 2011
  Reportable       
(In thousands) Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 370,259$ (27,207)$ 307$ 343,359
Provision for loan losses  75,319  -  -  75,319
Non-interest income  139,144  42,242  (17,018)  164,368
Amortization of intangibles  2,255  -  -  2,255
Depreciation expense  11,623  437  -  12,060
Loss on early extinguishment of debt  239  8,000  -  8,239
Other operating expenses  246,957  23,093  (17,555)  252,495
Income tax expense (benefit)  147,082  (158)  303  147,227
Net income (loss)$ 25,928$ (16,337)$ 541$ 10,132
Segment assets$ 38,402,584$ 5,459,100$ (5,031,891)$ 38,829,793

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

 

2012

For the quarter ended March 31, 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 $ 100,196$ 186,258$ 3,649$ 4$ 290,107
Provision for loan losses  13,698  72,159  -  -  85,857
Non-interest income  21,092  66,004  26,664  (26)  113,734
Amortization of intangibles  9  1,708  196  -  1,913
Depreciation expense  4,168  4,979  240  -  9,387
Loss on early extinguishment of debt  69  -  -  -  69
Other operating expenses  61,181  143,847  17,355  (26)  222,357
Income tax expense  9,762  4,301  3,288  2  17,353
Net income $ 32,401$ 25,268$ 9,234$ 2$ 66,905
Segment assets$ 13,853,077$ 19,985,139$ 568,375$ (6,379,820)$ 28,026,771

2011

For the quarter ended March 31, 2011
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 $ 119,560$ 173,470$ 2,374$ 41$ 295,445
Provision for loan losses  27,895  39,361  -  -  67,256
Non-interest income  45,358  54,901  21,523  (55)  121,727
Amortization of intangibles  26  1,394  155  -  1,575
Depreciation expense  4,379  5,016  237  -  9,632
Loss on early extinguishment of debt  239  -  -  -  239
Other operating expenses  54,908  118,227  15,650  (55)  188,730
Income tax expense  76,840  66,844  2,444  16  146,144
Net income (loss)$ 631$ (2,471)$ 5,411$ 25$ 3,596
Segment assets$ 15,607,809$ 21,285,084$ 459,462$ (7,899,408)$ 29,452,947

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

 

2012

For the quarter ended March 31, 2012
Banco Popular North America
(In thousands) Banco Popular North America E-LOAN Eliminations Total Banco Popular North America
Net interest income $ 73,607$ 468$ -$ 74,075
Provision for loan losses  9,396  5,330  -  14,726
Non-interest income   15,292  164  -  15,456
Amortization of intangibles  680  -  -  680
Depreciation expense  2,029  -  -  2,029
Other operating expenses  61,023  859  -  61,882
Income tax expense  936  -  -  936
Net income ( loss)$ 14,835$ (5,557)$ -$ 9,278
Segment assets$ 9,387,896$ 412,726$ (1,135,798)$ 8,664,824
         

2011

For the quarter ended March 31, 2011
Banco Popular North America
        Total Banco
  Banco Popular      Popular North
(In thousands) North America E-LOAN Eliminations America
Net interest income $ 74,300$ 514$ -$ 74,814
Provision for loan losses  605  7,458  -  8,063
Non-interest income   17,374  43  -  17,417
Amortization of intangibles  680  -  -  680
Depreciation expense  1,991  -  -  1,991
Other operating expenses  55,955  2,272  -  58,227
Income tax expense   938  -  -  938
Net income (loss)$ 31,505$ (9,173)$ -$ 22,332
Segment assets$ 9,645,089$ 474,834$ (1,143,951)$ 8,975,972

Geographic Information
  Quarter ended
(In thousands) March 31, 2012 March 31, 2011
Revenues:[1]    
Puerto Rico $ 353,510$ 396,249
United States  83,724  88,404
Other  24,256  23,074
Total consolidated revenues $ 461,490$ 507,727

[1] Total revenues include net interest income, service charges on deposit accounts, other service fees, net gain on sale and valuation adjustments of investment securities, trading account profit, net 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, fair value change in equity appreciation instrument and other operating income.

Selected Balance Sheet Information:
(In thousands) March 31, 2012 December 31, 2011 March 31, 2011
Puerto Rico      
Total assets$ 26,980,854$ 27,410,644$ 28,582,499
Loans  18,482,906  18,594,751  18,723,166
Deposits  19,915,877  20,696,606  19,524,566
United States      
Total assets$ 8,829,183$ 8,708,709$ 9,098,562
Loans  5,707,884  5,845,359  6,483,596
Deposits  6,240,063  6,151,959  6,570,511
Other      
Total assets$ 1,239,184$ 1,229,079$ 1,148,732
Loans  871,268  874,282  769,255
Deposits [1]  1,041,796  1,093,562  1,101,597
[1] Represents deposits from BPPR operations located in the U.S. and British Virgin Islands.