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Related party transactions | 3 Months Ended
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Mar. 31, 2019
Related Party Transactions |
Related Party Transactions | Note 23 – Related party transactions The Corporation considers its equity method investees as related parties. The following provides information on transactions with equity method investees considered related parties. EVERTEC The Corporation has an investment in EVERTEC, Inc. (“EVERTEC”), which provides various processing and information technology services to the Corporation and its subsidiaries and gives BPPR access to the ATH network owned and operated by EVERTEC. As of March 31, 2019, the Corporation held 11,654,803 share s of EVERTEC, an ownership stake of 16.13%. The Corporation continues to have significant influence over EVERTEC. Accordingly, the investment in EVERTEC is accounted for under the equity method and is evaluated for impairment if events or circumstances indicate that a decrease in value of the inves tment has occurred that is other than temporary. The Corporation received $ 0.6 million in dividend distributions during the quarter ended March 31, 2019, from its investments in EVERTEC’s holding company. During the quarter March 31, 2018, there were no dividend distributions received by the Corporation. The Corporation’s equity in EVERTEC is presented in the table which follows and is included as part of “other a ssets” in the Consolidated S tatement s of Financial C ondition.
(In thousands) |  | March 31, 2019 |  |  | December 31, 2018
Equity investment in EVERTEC | $ | 64,573 |  | $ | 60,591
The Corporation had the following financial condition balances outstanding with EVERTEC at March 31, 2019 and December 31, 2018. Items that represent liabilities to the Corporation are presented with parenthesis.
(In thousands) | March 31, 2019 | December 31, 2018
Accounts receivable (Other assets) | $ | 6,577 | $ | 6,829
Deposits |  | (25,666) |  | (28,606)
Accounts payable (Other liabilities) |  | (8,391) |  | (3,671)
Net total | $ | (27,480) | $ | (25,448)
The Corporation’s proportionate share of income from EVERTEC is included in other operating income in the consolidated statements of operations. The following table presents the Corporation’s proportionate share of EVERTEC’s income and changes in stockhold ers’ equity for the quarters ended March 31, 2019 and 2018.
|  | Quarters ended March 31,
(In thousands) |  | 2019 |  |  | 2018
Share of income from investment in EVERTEC | $ | 4,297 |  | $ | 3,704
Share of other changes in EVERTEC's stockholders' equity |  | 895 |  |  | 129
Share of EVERTEC's changes in equity recognized in income | $ | 5,192 |  | $ | 3,833
The following table present s the impact of transactions and service payments between the Corporation and EVERTEC (as an affiliate) and their impact on the results of operations for the quarters ended March 31, 2019 and 2018. Items that represent expenses to the Corporati on are presented with parenthesis.
| Quarters ended March 31, |
(In thousands) | 2019 | 2018 | Category
Interest expense on deposits | $ | (17) | $ | (11) | Interest expense
ATH and credit cards interchange income from services to EVERTEC |  | 8,219 |  | 7,982 | Other service fees
Rental income charged to EVERTEC |  | 1,796 |  | 1,765 | Net occupancy
Processing fees on services provided by EVERTEC |  | (53,862) |  | (45,558) | Professional fees
Other services provided to EVERTEC |  | 276 |  | 314 | Other operating expenses
Total | $ | (43,588) | $ | (35,508) |
PRLP 2011 Holdings, LLC and PR Asset Portfolio 2013-1 International, LLC As indicated in Note 22 to the Consolidated Financial Statements, the Corporation holds a 24.9% equity interest in PRLP 2011 Holdings, LLC and PR Asset Portfolio 2013-1 International, LLC. The Corporation’s equity in PRLP 2011 Holdings, LLC and PR Asset Portfolio 2013-1 International, LLC is presented in the table which follows and is included as part of “other assets” in the Consolidated S tatement s of Financial C ondition.
|  | PRLP 2011 Holdings, LLC |  | PR Asset Portfolio 2013-1 International, LLC
(In thousands) |  | March 31, 2019 |  | December 31, 2018 |  | March 31, 2019 |  | December 31, 2018
Equity investment | $ | 6,349 | $ | 6,469 | $ | 4,749 | $ | 5,794
The Corporation held deposits from these entities, as follows:
| PRLP 2011 Holdings, LLC |  | PR Asset Portfolio 2013-1 International, LLC
(In thousands) | March 31, 2019 | December 31, 2018 |  | March 31, 2019 | December 31, 2018
Deposits (non-interest bearing) | $ | 1,258 | $ | 2,566 |  | $ | 10,497 | $ | 7,994
The Corporation’s proportionate share of income or loss from these entities is presented in the following table and is included in oth er operating income in the Consolidated Statements of O perations.
|  | PRLP 2011 Holdings, LLC |  | PR Asset Portfolio 2013-1 International, LLC
|  | Quarters ended March 31,
(In thousands) |  | 2019 |  | 2018 |  |  | 2019 |  | 2018
Share of (loss) income from the equity investment | $ | (120) | $ | (259) |  | $ | 296 | $ | (5,356)
During the quarter ended March 31, 2019, the Corporation received $ 1.3 million in capital distributions from its investment in PR Asset Portfolio 2013-1 International, LLC.There were no transactions between the Corporation and PRLP 2011 Holdings, LLC during the quarters ended March 31, 2019 and 2018. Centro Financiero BHD León At March 31, 2019, the Corporation had a 15.84% equity interest in Centro Financiero BHD Le ó n, S.A. (“BHD Le ó n”), one of the largest banking and financial services groups in the Dominican Republic. During the quarter ended March 31, 2019, the Corporation recorded $ 5.5 million in earnings from its investment in BHD Le ó n (March 31, 2018 - $ 8.5 million), which had a carrying amount of $ 148.6 million at March 31, 2019 (December 31, 2018 - $ 143.5 million). On December 2017, BPPR extended a credit facility of $ 40 million to BHD León. This credit facility was repaid during the quarter ended March 31, 2018. There were no dividend distributions received by the Corporation from its investment in BHD León, during the quarters ended March 31, 2019 and 2018. On June 30, 2017, BPPR extended an $8 million credit facility to Grupo Financiero Leon, S.A. Panamá (“GFL”), a shareholder of BHD León with an outstanding balance of $8 million at March 31, 2018. The sources of repayment for this loan were the dividends to be received by GFL from its investment in BHD Le ó n. BPPR’s credit facility rank ed pari passu with another $8 million credit fa cility extended to GFL by BHD International Panama, an affiliate of BHD Le ó n. This credit facility was repaid during the quarter ended June 30, 2018. Investment Companies The Corporation provides advisory services to several investment companies registered under the Puerto Rico Investment Companies Act in exchange for a fee. The Corporation also provides administrative, custody and transfer agency services to these investment companies. These fees are calculated at an annual rate of the average n et assets of the investment company, as defined in each agreement. Due to its advisory role, the Corporation considers these investment companies as related parties. For the quarter ended March 31, 2019 administrative fees charged to these investment companies amounted to $ 1.5 million (March 31, 2018 - $ 1.7 million) and waived fees amounted to $ 0.5 million (March 31, 2018 - $ 0.5 million), for a net fee of $ 1.0 million (March 31, 2018 - $ 1.2 million). The Corporation, through its subsidiary B PPR, has also entered into certain uncommitted credit facilities with th o se investment companies. As of March 31, 2019, the available lines of credit facilities amounted to $ 330 million (December 31, 2018 - $ 330 million). The aggregate sum of all outstanding balances under all credit facilities that may be made available by BPPR, from time to time, to those investment companies for which BPPR acts as investment advisor or co-investment advisor, shall never exceed the lesser of $200 million or 10% of BPPR’s capital. At March 31, 2019 there was no outstanding balance for these credit facilities. Other related party transactions On August 2018, BPPR acquired certa in assets and assumed certain liabilities of Reliable Financial Services and Reliable Finance Holding Company, Puerto Rico-based subsidiaries of Wells Fargo & Company engaged in the auto finance business in Puerto Rico. Refer to Note 4 for additional information on this transaction. As part of the acquisition transaction, the Corporation entered into an agreement with Reliable Financial Services to sublease the space necessary to continue the acquired operations. Reliable Financial Services’ lease agre ement is with the entity in which the Corporation’s Executive Chairman and his family members hold an ownership interest. During the quarter ended March 31, 2019, the Corporation paid to Reliable Financial Services approximately $0.4 million under the subl ease. The lease expired as of April 30, 2019.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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