XML 257 R51.htm IDEA: XBRL DOCUMENT v2.4.0.6
Segment Reporting
 12 Months Ended
Dec. 31, 2012
Notes to Financial Statements [Abstract]  
Segment Reporting Disclosure [Text Block]

Note 41 – 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 December 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. Effective December 31, 2012, Popular Mortgage, which was a wholly-owned subsidiary of BPPR prior to that date, was merged with and into BPPR as part of an internal reorganization. The Corporation's mortgage origination business will continue to be conducted under the brand name Popular Mortgage.
  • 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:

December 31, 2012
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico North America Eliminations
Net interest income$ 1,198,541$ 281,686$ -
Provision for loan losses  356,496  52,041  -
Non-interest income   402,086  56,864  -
Amortization of intangibles  7,351  2,721  -
Depreciation expense  37,321  8,157  -
Loss on early extinguishment of debt  25,196  -  -
Other operating expenses  903,677  225,893  -
Income tax (benefit) expense  (20,245)  3,745  -
Net income $ 290,831$ 45,993$ -
Segment assets$ 27,600,235$ 8,651,790$ (31,792)
       

December 31, 2012
  Reportable      
(In thousands)  Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 1,480,227$ (108,222)$ 614$ 1,372,619
Provision for loan losses  408,537  404  -  408,941
Non-interest income  458,950  77,912  (70,520)  466,342
Amortization of intangibles  10,072  -  -  10,072
Depreciation expense  45,478  1,258  -  46,736
Loss on early extinguishment of debt  25,196  -  -  25,196
Other operating expenses  1,129,570  69,863  (70,289)  1,129,144
Income tax benefit  (16,500)  (9,945)  42  (26,403)
Net income (loss)$ 336,824$ (91,890)$ 341$ 245,275
Segment assets$ 36,220,233$ 5,308,327$ (5,021,025)$ 36,507,535
         

December 31, 2011
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico North America  Eliminations
Net interest income$ 1,240,700$ 295,602$ -
Provision for loan losses  487,238  88,482  -
Non-interest income   488,459  74,896  -
Amortization of intangibles  6,933  2,721  -
Depreciation expense  37,180  7,665  -
Loss on early extinguishment of debt  693  -  -
Other operating expenses  845,821  237,967  -
Income tax expense  119,819  3,745  -
Net income$ 231,475$ 29,918$ -
Segment assets$ 28,423,064$ 8,581,209$ (26,447)

December 31, 2011
  Reportable      
(In thousands)  Segments Corporate Eliminations Total Popular, Inc.
Net interest income (expense)$ 1,536,302$ (105,267)$ 957$ 1,431,992
Provision for loan losses  575,720  -  -  575,720
Non-interest income  563,355  66,473  (69,551)  560,277
Amortization of intangibles  9,654  -  -  9,654
Depreciation expense  44,845  1,601  -  46,446
Loss on early extinguishment of debt  693  8,000  -  8,693
Other operating expenses  1,083,788  71,586  (69,870)  1,085,504
Income tax expense (benefit)  123,564  (9,145)  508  114,927
Net income (loss)$ 261,393$ (110,836)$ 768$ 151,325
Segment assets$ 36,977,826$ 5,348,638$ (4,978,032)$ 37,348,432

December 31, 2010
  Banco Popular  Banco Popular  Intersegment
(In thousands) de Puerto Rico North America  Eliminations
Net interest income$ 1,095,932$ 309,985$ -
Provision for loan losses  609,630  402,250  -
Non-interest income   448,301  54,570  -
Amortization of intangibles  5,449  3,181  -
Depreciation expense  38,364  9,109  -
Loss on early extinguishment of debt  1,171  21,866  -
Other operating expenses  815,947  264,110  -
Income tax expense  27,120  4,318  -
Net income (loss)$ 46,552$ (340,279)$ -
Segment assets$ 29,429,358$ 8,973,984$ (28,662)

December 31, 2010
  Reportable      
(In thousands)  Segments Corporate Eliminations Total Popular, Inc.
Net interest income (loss)$ 1,405,917$ (111,747)$ 695$ 1,294,865
Provision for loan losses  1,011,880  -  -  1,011,880
Non-interest income  502,871  912,555  (127,233)  1,288,193
Amortization of intangibles  8,630  543  -  9,173
Depreciation expense  47,473  11,388  -  58,861
Loss on early extinguishment of debt  23,037  15,750  -  38,787
Other operating expenses  1,080,057  263,270  (124,601)  1,218,726
Income tax expense   31,438  76,995  (203)  108,230
Net (loss) income$ (293,727)$ 432,862$ (1,734)$ 137,401
Segment assets$ 38,374,680$ 5,583,501$ (5,143,183)$ 38,814,998

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

 

December 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 $ 423,798$ 762,857$ 11,882$ 4$ 1,198,541
Provision for loan losses  149,597  206,899  -  -  356,496
Non-interest income  20,095  269,190  112,949  (148)  402,086
Amortization of intangibles  13  6,833  505  -  7,351
Depreciation expense  16,840  19,522  959  -  37,321
Loss on early extinguishment of debt  8,037  17,159  -  -  25,196
Other operating expenses  279,358  555,797  68,670  (148)  903,677
Income tax (benefit) expense  (33,068)  (1,460)  14,281  2  (20,245)
Net income $ 23,116$ 227,297$ 40,416$ 2$ 290,831
Segment assets$ 12,770,793$ 19,668,009$ 632,676$ (5,471,243)$ 27,600,235

December 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 $ 501,946$ 727,050$ 11,600$ 104$ 1,240,700
Provision for loan losses  356,905  130,333  -  -  487,238
Non-interest income  173,764  209,100  105,632  (37)  488,459
Amortization of intangibles  103  6,175  655  -  6,933
Depreciation expense  16,928  19,297  955  -  37,180
Loss on early extinguishment of debt  693  -  -  -  693
Other operating expenses  257,830  523,423  64,759  (191)  845,821
Income tax expense  38,332  67,678  13,707  102  119,819
Net income $ 4,919$ 189,244$ 37,156$ 156$ 231,475
Segment assets$ 13,643,862$ 20,035,526$ 1,225,247$ (6,481,571)$ 28,423,064

December 31, 2010
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 $ 443,242$ 643,076$ 9,392$ 222$ 1,095,932
Provision for loan losses  464,214  145,416  -  -  609,630
Non-interest income  133,674  211,242  103,552  (167)  448,301
Amortization of intangibles  558  4,313  578  -  5,449
Depreciation expense  16,760  20,464  1,140  -  38,364
Loss on early extinguishment of debt  1,171  -  -  -  1,171
Other operating expenses  272,755  477,859  65,619  (286)  815,947
Income tax (benefit) expense  (68,791)  79,206  16,575  130  27,120
Net (loss) income $ (109,751)$ 127,060$ 29,032$ 211$ 46,552
Segment assets$ 15,625,030$ 21,483,403$ 462,771$ (8,141,846)$ 29,429,358

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

 

December 31, 2012
Banco Popular North America
  Banco Popular      Total Banco Popular North
(In thousands) North America E-LOAN Eliminations America
Net interest income $ 278,228$ 3,458$ -$ 281,686
Provision for loan losses  36,841  15,200  -  52,041
Non-interest income   53,749  3,115  -  56,864
Amortization of intangibles  2,721  -  -  2,721
Depreciation expense  8,157  -  -  8,157
Other operating expenses  223,069  2,824  -  225,893
Income tax expense  3,745  -  -  3,745
Net income (loss)$ 57,444$ (11,451)$ -$ 45,993
Segment assets$ 9,378,779$ 367,362$ (1,094,351)$ 8,651,790

December 31, 2011
Banco Popular North America
        Total Banco
  Banco Popular      Popular North
(In thousands) North America E-LOAN Eliminations  America
Net interest income $ 294,224$ 1,378$ -$ 295,602
Provision for loan losses  61,753  26,729  -  88,482
Non-interest income  69,269  5,627  -  74,896
Amortization of intangibles  2,721  -  -  2,721
Depreciation expense  7,665  -  -  7,665
Other operating expenses  229,998  7,969  -  237,967
Income tax expense   3,745  -  -  3,745
Net income (loss)$ 57,611$ (27,693)$ -$ 29,918
Segment assets$ 9,289,507$ 418,436$ (1,126,734)$ 8,581,209

December 31, 2010
Banco Popular North America
        Total Banco
  Banco Popular      Popular North
(In thousands) North America E-LOAN Eliminations  America
Net interest income $ 305,893$ 4,148$ (56)$ 309,985
Provision for loan losses  400,077  2,173  -  402,250
Non-interest income (loss)  73,032  (18,462)  -  54,570
Amortization of intangibles  3,181  -  -  3,181
Depreciation expense  8,539  570  -  9,109
Loss on early extinguishment of debt  21,866  -  -  21,866
Other operating expenses  256,855  7,255  -  264,110
Income tax expense   1,589  2,729  -  4,318
Net loss$ (313,182)$ (27,041)$ (56)$ (340,279)
Segment assets$ 9,632,188$ 490,845$ (1,149,049)$ 8,973,984

Geographic Information    
     
(In thousands) 2012 2011 2010 
Revenues:[1]       
Puerto Rico $ 1,423,912$ 1,551,518$ 2,138,629 
United States  316,906  347,460  339,664 
Other  98,143  93,291  104,765 
Total consolidated revenues $ 1,838,961$ 1,992,269$ 2,583,058 

[1] Total revenues include net interest income, service charges on deposit accounts, other service fees, net (loss) gain on sale and valuation adjustments of investment securities, trading account (loss) 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, gain on sale of processing and technology business and other operating income.

Selected Balance Sheet Information
(In thousands) 2012 2011 2010
Puerto Rico      
Total assets$ 26,582,248$ 27,410,644$ 28,556,279
Loans  18,484,977  18,594,751  18,729,654
Deposits  19,984,830  20,696,606  19,149,753
United States      
Total assets$ 8,816,143$ 8,708,709$ 9,087,737
Loans  5,852,705  5,845,359  6,978,007
Deposits  6,049,168  6,151,959  6,566,710
Other      
Total assets$ 1,109,144$ 1,229,079$ 1,170,982
Loans  755,950  874,282  751,194
Deposits [1]  966,615  1,093,562  1,045,737
[1] Represents deposits from BPPR operations located in the US and British Virgin Islands.