Segment reporting

12 Months Ended

Dec. 31, 2022

Segment reporting disclosure

Segment Reporting

Note 37 – 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: 

The Banco Popular de Puerto Rico reportable segment includes commercial, consumer and retail banking operations conducted at

BPPR, including U.S. based activities conducted through its New York Branch. It also includes the lending operations of Popular

Auto and Popular Mortgage. Other financial services within the BPPR segment include the trust service units of BPPR, asset

management services of Popular Asset Management, the brokerage and investment banking operations of Popular Securities, and

the insurance agency and reinsurance businesses of Popular Insurance, Popular Risk Services, Popular Life Re, and Popular Re.

Popular U.S.: 

Popular U.S. reportable segment consists of the banking operations of Popular Bank (PB), Popular Insurance Agency, U.S.A., and

PEF. PB operates through a retail branch network in the U.S. mainland under the name of Popular, and equipment leasing and

financing services through PEF. 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, until August 15, 2022, 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, 2022

Banco Popular 

Intersegment 

(In thousands)

de Puerto Rico

Popular U.S.

Eliminations

Net interest income

$

1,823,517

$

372,988

$

3

Provision for credit losses

70,304

12,452

-

Non-interest income 

680,276

31,958

(547)

Amortization of intangibles

1,937

1,338

-

Goodwill impairment charge

-

9,000

-

Depreciation expense

47,003

6,919

-

Other operating expenses

1,454,187

230,136

(543)

Income tax expense

148,351

(25,205)

-

Net income

$

782,011

$

170,306

$

(1)

Segment assets

$

56,190,260

$

11,558,280

$

(421,781)

 December 31, 2022

Reportable

Total

(In thousands)

 Segments

Corporate

Eliminations

Popular, Inc.

Net interest income (expense)

$

2,196,508

$

(29,149)

$

-

$

2,167,359

Provision for credit losses

82,756

274

-

83,030

Non-interest income

711,687

189,835

(4,460)

897,062

Amortization of intangibles

3,275

-

-

3,275

Goodwill impairment charge

9,000

-

-

9,000

Depreciation expense

53,922

1,185

-

55,107

Other operating expenses

1,683,780

80

(4,822)

1,679,038

Income tax expense

123,146

9,074

110

132,330

Net income

$

952,316

$

150,073

$

252

$

1,102,641

Segment assets

$

67,326,759

$

5,390,122

$

(5,078,964)

$

67,637,917

December 31, 2021

Banco Popular 

Intersegment

(In thousands)

de Puerto Rico

Popular U.S.

 Eliminations

Net interest income

$

1,674,589

$

321,154

$

6

Provision for credit losses (benefit)

(136,352)

(56,897)

-

Non-interest income 

565,310

24,518

(548)

Amortization of intangibles

2,813

665

-

Depreciation expense

46,539

7,415

-

Other operating expenses

1,285,959

203,892

(544)

Income tax expense

253,479

56,538

-

Net income

$

787,461

$

134,059

$

2

Segment assets

$

64,336,681

$

10,399,066

$

(31,528)

 December 31, 2021

Reportable

Total

(In thousands)

 Segments

Corporate

Eliminations

Popular, Inc.

Net interest income (expense)

$

1,995,749

$

(38,159)

$

-

$

1,957,590

Provision for credit losses (benefit)

(193,249)

(215)

-

(193,464)

Non-interest income

589,280

56,535

(3,687)

642,128

Amortization of intangibles

3,478

5,656

-

9,134

Depreciation expense

53,954

1,150

-

55,104

Other operating expenses

1,489,307

(545)

(3,725)

1,485,037

Income tax expense (benefit)

310,017

(1,085)

86

309,018

Net income

$

921,522

$

13,415

$

(48)

$

934,889

Segment assets

$

74,704,219

$

5,458,718

$

(5,065,038)

$

75,097,899

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

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 co-branded credit cards offerings and commercial lending activities. BPPR’s commercial

lending activities in the U.S., through its New York Branch, include periodic loan participations with PB. During the year ended

December 31, 2022, BPPR participated in loans originated by PB totaling $

184

 million (2021 - $

35

 million). At December 31, 2022,

total assets for the BPPR segment related to its operations in the United States amounted to $

1.2

 billion (2021 - $

589

 million).

During the year ended December 31, 2022, the BPPR segment generated approximately $

67.8

 million (2021 - $

50.6

 million, 2020 -

$

55.3

 million) in revenues from its operations in the United States, including net interest income, service charges on deposit

accounts and other service fees. In the Virgin Islands, the BPPR segment offers banking products, including loans and deposits.

The BPPR segment generated $

46.6

 million in revenues (2021 - $

45.4

 million, 2020 - $

44.2

 million) from its operations in the U.S.

and British Virgin Islands.

(In thousands)

2022

2021

2020

Revenues:

[1]

Puerto Rico 

$

2,505,988

$

2,136,481

$

1,921,207

United States

480,545

390,201

376,529

Other

77,888

73,036

71,189

Total consolidated revenues

$

3,064,421

$

2,599,718

$

2,368,925

[1]

Total revenues include net interest income, service charges on deposit accounts, other service fees, mortgage banking activities, net gain on sale

of debt securities, net gain, including impairment on equity securities, net (loss) profit on trading account debt securities , net (loss) gain on sale of

loans, including valuation adjustments on loans held-for-sale, adjustments to indemnity reserves on loans sold, and other operating income.

Selected Balance Sheet Information

(In thousands)

2022

2021

2020

Puerto Rico

Total assets

$

53,541,427

$

63,221,282

$

54,143,954

Loans

20,884,442

19,770,118

20,413,112

Deposits

51,138,790

57,211,608

47,586,880

United States

Total assets

$

12,718,775

$

10,986,055

$

10,878,030

Loans

10,643,964

8,903,493

8,396,983

Deposits

8,182,702

7,777,232

7,672,549

Other

Total assets

$

1,377,715

$

890,562

$

904,016

Loans

554,744

626,115

674,556

Deposits

[1]

1,905,735

2,016,248

1,606,911

[1]

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