XML 92 R46.htm IDEA: XBRL DOCUMENT v3.20.4
Segment Reporting
 12 Months Ended
Dec. 31, 2020
Disclosure Text Block  
Segment Reporting Note 36 – Segment reporting

The Corporation’s corporate structure consists of two reportable segments – Banco Popular de Puerto Rico and Popular U.S. 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, 2020, 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 Risk Services, and Popular Life Re. Most of the services that are provided by these subsidiaries generate profits based on fee income.

Popular U.S.:

Popular U.S. reportable segment consists of the banking operations of Popular Bank (PB) and Popular Insurance Agency, U.S.A. PB operates through a retail branch network in the U.S. mainland under the name of Popular. Popular Insurance Agency, U.S.A. offers investment and insurance services across the PB 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, León.

 

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, 2020

 

 

 

 

Banco Popular

 

 

 

Intersegment

(In thousands)

 

 

 

de Puerto Rico

 

Popular U.S.

 

Eliminations

Net interest income

 

 

$

1,593,599

$

302,517

$

11

Provision for credit losses

 

 

 

210,955

 

81,486

 

-

Non-interest income

 

 

 

445,893

 

24,285

 

(553)

Amortization of intangibles

 

 

 

5,634

 

665

 

-

Depreciation expense

 

 

 

47,890

 

9,558

 

-

Other operating expenses

 

 

 

1,169,816

 

228,406

 

(544)

Income tax expense

 

 

 

106,211

 

7,411

 

-

Net income (loss)

 

 

$

498,986

$

(724)

$

2

Segment assets

 

 

$

55,353,626

$

10,255,954

$

(33,935)

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

Reportable

 

 

 

 

 

Total

(In thousands)

 

Segments

 

Corporate

 

Eliminations

 

Popular, Inc.

Net interest income (expense)

$

1,896,127

$

(39,514)

$

-

$

1,856,613

Provision for credit losses

 

292,441

 

95

 

-

 

292,536

Non-interest income

 

469,625

 

46,442

 

(3,755)

 

512,312

Amortization of intangibles

 

6,299

 

98

 

-

 

6,397

Depreciation expense

 

57,448

 

1,004

 

-

 

58,452

Other operating expenses

 

1,397,678

 

(1,212)

 

(3,486)

 

1,392,980

Income tax expense (benefit)

 

113,622

 

(1,560)

 

(124)

 

111,938

Net income

$

498,264

$

8,503

$

(145)

$

506,622

Segment assets

$

65,575,645

$

5,214,439

$

(4,864,084)

$

65,926,000

December 31, 2019

 

 

 

 

Banco Popular

 

 

 

Intersegment

(In thousands)

 

 

 

de Puerto Rico

 

Popular U.S.

 

Eliminations

Net interest income

 

 

$

1,633,950

$

295,470

$

(51)

Provision for credit losses

 

 

 

135,495

 

30,028

 

-

Non-interest income

 

 

 

506,739

 

23,160

 

(561)

Amortization of intangibles

 

 

 

8,610

 

664

 

-

Depreciation expense

 

 

 

49,058

 

8,263

 

-

Other operating expenses

 

 

 

1,208,458

 

205,219

 

(547)

Income tax expense

 

 

 

129,145

 

19,164

 

-

Net income

 

 

$

609,923

$

55,292

$

(65)

Segment assets

 

 

$

41,756,864

$

10,056,316

$

(18,576)

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

Reportable

 

 

 

 

 

Total

(In thousands)

 

Segments

 

Corporate

 

Eliminations

 

Popular, Inc.

Net interest income (expense)

$

1,929,369

$

(37,675)

$

-

$

1,891,694

Provision for credit losses

 

165,523

 

256

 

-

 

165,779

Non-interest income

 

529,338

 

43,901

 

(3,356)

 

569,883

Amortization of intangibles

 

9,274

 

96

 

-

 

9,370

Depreciation expense

 

57,321

 

746

 

-

 

58,067

Other operating expenses

 

1,413,130

 

55

 

(3,140)

 

1,410,045

Income tax expense (benefit)

 

148,309

 

(1,041)

 

(87)

 

147,181

Net income

$

665,150

$

6,114

$

(129)

$

671,135

Segment assets

$

51,794,604

$

5,228,276

$

(4,907,556)

$

52,115,324

December 31, 2018

 

 

 

 

Banco Popular

 

 

 

Intersegment

(In thousands)

 

 

 

de Puerto Rico

 

Popular U.S.

 

Eliminations

Net interest income

 

 

$

1,482,178

$

304,576

$

(2)

Provision for credit losses

 

 

 

198,442

 

29,881

 

-

Non-interest income

 

 

 

592,938

 

19,988

 

(560)

Amortization of intangibles

 

 

 

8,620

 

665

 

-

Depreciation expense

 

 

 

43,504

 

9,053

 

-

Other operating expenses

 

 

 

1,073,012

 

182,154

 

(546)

Income tax expense

 

 

 

121,195

 

25,294

 

-

Net income

 

 

$

630,343

$

77,517

$

(16)

Segment assets

 

 

$

38,037,696

$

9,381,636

$

(114,923)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

Reportable

 

 

 

 

 

Total

(In thousands)

 

Segments

 

Corporate

 

Eliminations

 

Popular, Inc.

Net interest income (expense)

$

1,786,752

$

(51,875)

$

-

$

1,734,877

Provision (reversal) for credit losses

 

228,323

 

(251)

 

-

 

228,072

Non-interest income

 

612,366

 

42,914

 

(2,786)

 

652,494

Amortization of intangibles

 

9,285

 

41

 

-

 

9,326

Depreciation expense

 

52,557

 

743

 

-

 

53,300

Loss on early extinguishment of debt

 

-

 

12,522

 

-

 

12,522

Other operating expenses

 

1,254,620

 

94,640

 

(2,846)

 

1,346,414

Income tax expense (benefit)

 

146,489

 

(26,947)

 

37

 

119,579

Net income (loss)

$

707,844

$

(89,709)

$

23

$

618,158

Segment assets

$

47,304,409

$

5,099,491

$

(4,799,323)

$

47,604,577

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

December 31, 2020

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

$

653,091

$

927,165

$

13,343

$

-

$

1,593,599

Provision for credit losses

 

47,905

 

163,050

 

-

 

-

 

210,955

Non-interest income

 

100,329

 

249,464

 

97,443

 

(1,343)

 

445,893

Amortization of intangibles

 

197

 

3,609

 

1,828

 

-

 

5,634

Depreciation expense

 

20,488

 

26,746

 

656

 

-

 

47,890

Other operating expenses

 

303,534

 

782,521

 

85,122

 

(1,361)

 

1,169,816

Income tax expense (benefit)

 

104,617

 

(5,934)

 

7,528

 

-

 

106,211

Net income

$

276,679

$

206,637

$

15,652

$

18

$

498,986

Segment assets

$

49,806,766

$

29,000,270

$

2,218,444

$

(25,671,854)

$

55,353,626

 

December 31, 2019

 

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

$

619,926

$

1,009,196

$

4,828

$

-

$

1,633,950

Provision (reversal) for credit losses

 

(46,099)

 

181,594

 

-

 

-

 

135,495

Non-interest income

 

99,758

 

303,268

 

106,218

 

(2,505)

 

506,739

Amortization of intangibles

 

195

 

4,294

 

4,121

 

-

 

8,610

Depreciation expense

 

20,024

 

28,411

 

623

 

-

 

49,058

Other operating expenses

 

309,762

 

835,582

 

65,631

 

(2,517)

 

1,208,458

Income tax expense

 

104,636

 

11,999

 

12,510

 

-

 

129,145

Net income

$

331,166

$

250,584

$

28,161

$

12

$

609,923

Segment assets

$

34,340,842

$

23,976,004

$

380,557

$

(16,940,539)

$

41,756,864

December 31, 2018

Banco Popular de Puerto Rico

 

 

 

 

 

Consumer

 

Other

 

Eliminations

 

Total Banco

 

 

 

Commercial

 

and Retail

 

Financial

 

and Other

 

Popular de

(In thousands)

 

Banking

 

Banking

 

Services

 

Adjustments [1]

 

Puerto Rico

Net interest income

$

584,293

$

892,735

$

5,201

$

(51)

$

1,482,178

Provision for credit losses

 

105,604

 

92,838

 

-

 

-

 

198,442

Non-interest income

 

84,762

 

311,775

 

95,199

 

101,202

 

592,938

Amortization of intangibles

 

208

 

4,275

 

4,137

 

-

 

8,620

Depreciation expense

 

17,668

 

25,222

 

614

 

-

 

43,504

Other operating expenses

 

276,158

 

718,990

 

71,344

 

6,520

 

1,073,012

Income tax expense

 

76,255

 

100,925

 

7,903

 

(63,888)

 

121,195

Net income

$

193,162

$

262,260

$

16,402

$

158,519

$

630,343

Segment assets

$

27,712,852

$

22,712,950

$

376,992

$

(12,765,098)

$

38,037,696

[1]

Includes the impact of the Termination Agreement with the FDIC and the Tax Closing Agreement entered into in connection with the FDIC transaction. These transactions resulted in a gain of $102.8 million reported in the non-interest income line, other operating expenses of $8.1 million and a net tax benefit of $63.9 million. Refer to Note 34 to the Consolidated Financial Statements for additional information.

Geographic Information

 

The following information presents selected financial information based on the geographic location where the Corporation conducts its business. The banking operations of BPPR are primarily based in Puerto Rico, where it has the largest retail banking franchise. BPPR also conducts banking operations in the U.S. Virgin Islands, the British Virgin Islands and New York. BPPR’s banking operations in the United States include E-loan, an online platform used to offer personal loans, co-branded credit cards offerings and an online deposit gathering platform. In the Virgin Islands, the BPPR segment offers banking products, including loans and deposits. During the year ended December 31, 2020, the BPPR segment generated approximately $55.3 million (2019 - $55.7 million, 2018 - $37.6 million) in revenues from its operations in the United States, including net interest income, service charges on deposit accounts and other service fees. In addition, the BPPR segment generated $44.2 million in revenues (2019 - $47.6 million, 2018 - $48.8 million) from its operations in the U.S. and British Virgin Islands. At December 31, 2020, total assets for the BPPR segment related to its operations in the United States amounted to $627 million (2019 - $635 million).

(In thousands)

 

2020

 

2019

 

2018

 

Revenues:[1]

 

 

 

 

 

 

 

 

Puerto Rico

$

1,921,207

$

2,016,089

$

1,953,671

 

 

United States

 

376,529

 

371,368

 

357,680

 

 

Other

 

71,189

 

74,120

 

76,020

 

Total consolidated revenues

$

2,368,925

$

2,461,577

$

2,387,371

 

[1]

Total revenues include net interest income, service charges on deposit accounts, other service fees, mortgage banking activities, net gain (loss) on sale of debt securities, net gain (loss), including impairment on equity securities, net profit (loss) on trading account debt securities, net gain on sale of loans, including valuation adjustments on loans held-for-sale, adjustments (expense) to indemnity reserves on loans sold, FDIC loss-share income and other operating income.

Selected Balance Sheet Information

(In thousands)

 

2020

 

2019

 

2018

Puerto Rico

 

 

 

 

 

 

 

Total assets

$

54,143,954

$

40,544,255

$

36,863,930

 

Loans

 

20,413,112

 

18,989,286

 

18,837,742

 

Deposits

 

47,586,880

 

34,664,243

 

31,237,529

United States

 

 

 

 

 

 

 

Total assets

$

10,878,030

$

10,693,536

$

9,847,944

 

Loans

 

8,396,983

 

7,819,187

 

7,034,075

 

Deposits

 

7,672,549

 

7,664,792

 

6,878,599

Other

 

 

 

 

 

 

 

Total assets

$

904,016

$

877,533

$

892,703

 

Loans

 

674,556

 

657,603

 

687,494

 

Deposits [1]

 

1,606,911

 

1,429,571

 

1,593,911

[1]

Represents deposits from BPPR operations located in the U.S. and British Virgin Islands.