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Related party transactions | 9 Months Ended
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Sep. 30, 2021
Related Party Transactions |
Related Party Transactions | Note 22 – 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 September 30, 2021, the Corporation held 11,654,803 shares of EVERTEC, representing an ownership stake of 16.19%. 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 investment has occurred that is other than temporary. The Corporation recorded $1.7 million in dividends distributions during the nine months ended September 30, 2021 from its investments in EVERTEC (September 30, 2020 - $1.7 million). The Corporation’s equity in EVERTEC is presented in the table which follows and is included as part of “other assets” in the Consolidated Statements of Financial Condition.
(In thousands) |  | September 30, 2021 |  |  | December 31, 2020
Equity investment in EVERTEC | $ | 104,850 |  | $ | 86,158
The Corporation had the following financial condition balances outstanding with EVERTEC at September 30, 2021 and December 31, 2020. Items that represent liabilities to the Corporation are presented with parenthesis.
(In thousands) | September 30, 2021 | December 31, 2020
Accounts receivable (Other assets) | $ | 7,641 | $ | 5,678
Deposits |  | (144,130) |  | (125,361)
Accounts payable (Other liabilities) |  | (2,738) |  | (2,395)
Net total | $ | (139,227) | $ | (122,078)
The Corporation’s proportionate share of income or loss 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 (loss) and changes in stockholders’ equity for the quarters and nine months ended September 30, 2021 and 2020.
|  | Quarter ended |  |  | Nine months ended
(In thousands) |  | September 30, 2021 |  |  | September 30, 2021
Share of income from the investment in EVERTEC | $ | 5,709 |  | $ | 19,426
Share of other changes in EVERTEC's stockholders' equity |  | 610 |  |  | 1,009
Share of EVERTEC's changes in equity recognized in income | $ | 6,319 |  | $ | 20,435
|  | Quarter ended |  |  | Nine months ended
(In thousands) |  | September 30, 2020 |  |  | September 30, 2020
Share of income from the investment in EVERTEC | $ | 5,586 |  | $ | 11,696
Share of other changes in EVERTEC's stockholders' equity |  | 1,135 |  |  | 1,804
Share of EVERTEC's changes in equity recognized in income | $ | 6,721 |  | $ | 13,500
The following tables present the transactions and service payments between the Corporation and EVERTEC (as an affiliate) and their impact on the results of operations for the quarters and nine months ended September 30, 2021 and 2020. Items that represent expenses to the Corporation are presented with parenthesis.
|  | Quarter ended | Nine months ended |
(In thousands) | September 30, 2021 | September 30, 2021 | Category
Interest expense on deposits |  | $ | (103) |  | $ | (267) | Interest expense
ATH and credit cards interchange income from services to EVERTEC |  |  | 6,849 |  |  | 20,278 | Other service fees
Rental income charged to EVERTEC |  |  | 1,973 |  |  | 4,915 | Net occupancy
Processing fees on services provided by EVERTEC |  |  | (62,421) |  |  | (183,302) | Professional fees
Other services provided to EVERTEC |  |  | 214 |  |  | 554 | Other operating expenses
Total |  | $ | (53,488) |  | $ | (157,822) |
|  | Quarter ended | Nine months ended |
(In thousands) |  | September 30, 2020 | September 30, 2020 | Category
Interest expense on deposits |  | $ | (71) |  | $ | (228) | Interest expense
ATH and credit cards interchange income from services to EVERTEC |  |  | 6,153 |  |  | 16,172 | Other service fees
Rental income charged to EVERTEC |  |  | 1,758 |  |  | 5,293 | Net occupancy
Processing fees on services provided by EVERTEC |  |  | (57,372) |  |  | (164,373) | Professional fees
Other services provided to EVERTEC |  |  | 253 |  |  | 794 | Other operating expenses
Total |  | $ | (49,279) |  | $ | (142,342) |
Centro Financiero BHD León At September 30, 2021, the Corporation had a 15.84% equity interest in Centro Financiero BHD León, S.A. (“BHD León”), one of the largest banking and financial services groups in the Dominican Republic. During the nine months ended September 30, 2021, the Corporation recorded $20.4 million in earnings from its investment in BHD León (September 30, 2020 - $21.4 million), which had a carrying amount of $172.1 million at September 30, 2021 (December 31, 2020 - $147.2 million). The Corporation received $4.3 million in dividends distributions during the nine months ended September 30, 2021 from its investment in BHD León (September 30, 2020 - $13.2 million). Investment Companies The Corporation, through its subsidiary Popular Asset Management LLC (“PAM”), provides advisory services to several investment companies registered under the Investment Company Act of 1940 in exchange for a fee. The Corporation, through its subsidiary BPPR, also provides administrative, custody and transfer agency services to these investment companies. These fees are calculated at an annual rate of the average net 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 nine months ended September 30, 2021 administrative fees charged to these investment companies amounted to $3.4 million (September 30, 2020 - $4.8 million) and waived fees amounted to $1.3 million (September 30, 2020 - $2.1 million), for a net fee of $2.1 million (September 30, 2020 - $2.7 million). The Corporation, through its subsidiary BPPR, has also entered into certain uncommitted credit facilities with those investment companies. The available lines of credit facilities amounted to $275 million at December 31, 2020, with no balance outstanding, and at September 30, 2021 these were in the process of renewal after they had reached their maturity date. The aggregate sum of all outstanding balances under all credit facilities that could be made available by BPPR, from time to time, to those investment companies for which PAM acts as investment advisor or co-investment advisor, shall never exceed the lesser of $200 million or 10% of BPPR’s capital.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864 + Details
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