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Segment reporting | 9 Months Ended
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Sep. 30, 2022
Segment reporting disclosure |
Segment Reporting | Note 33 – 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:
2022
For the quarter ended September 30, 2022
|  |  |  | Banco Popular |  |  |  | Intersegment
(In thousands) |  |  |  | de Puerto Rico |  | Popular U.S. |  | Eliminations
Net interest income |  |  | $ | 488,123 | $ | 98,874 | $ | 1
Provision for credit losses |  |  |  | 29,813 |  | 10,011 |  | -
Non-interest income |  |  |  | 262,587 |  | 15,203 |  | (137)
Amortization of intangibles |  |  |  | 484 |  | 311 |  | -
Goodwill impairment charge |  |  |  | - |  | 9,000 |  | -
Depreciation expense |  |  |  | 11,862 |  | 1,693 |  | -
Other operating expenses |  |  |  | 396,655 |  | 57,127 |  | (135)
Income tax expense |  |  |  | 48,209 |  | 10,628 |  | -
Net income |  |  | $ | 263,687 | $ | 25,307 | $ | (1)
Segment assets |  |  | $ | 59,640,784 | $ | 11,106,409 | $ | (319,999)
For the quarter ended September 30, 2022
|  | Reportable |  |  |  |  |  |
(In thousands) |  | Segments |  | Corporate |  | Eliminations |  | Total Popular, Inc.
Net interest income (expense) | $ | 586,998 | $ | (7,379) | $ | - | $ | 579,619
Provision for credit losses (benefit) |  | 39,824 |  | (187) |  | - |  | 39,637
Non-interest income |  | 277,653 |  | 148,228 |  | 613 |  | 426,494
Amortization of intangibles |  | 795 |  | - |  | - |  | 795
Goodwill impairment charge |  | 9,000 |  | - |  | - |  | 9,000
Depreciation expense |  | 13,555 |  | 298 |  | - |  | 13,853
Other operating expenses |  | 453,647 |  | (46) |  | (1,154) |  | 452,447
Income tax expense |  | 58,837 |  | 8,469 |  | 680 |  | 67,986
Net income | $ | 288,993 | $ | 132,315 | $ | 1,087 | $ | 422,395
Segment assets | $ | 70,427,194 | $ | 5,341,051 | $ | (5,038,570) | $ | 70,729,675
For the nine months ended September 30, 2022
|  |  |  | Banco Popular |  |  |  | Intersegment
(In thousands) |  |  |  | de Puerto Rico |  | Popular U.S. |  | Eliminations
Net interest income |  |  | $ | 1,351,086 | $ | 278,825 | $ | 3
Provision for credit losses |  |  |  | 24,941 |  | 8,580 |  | -
Non-interest income |  |  |  | 542,826 |  | 26,076 |  | (410)
Amortization of intangibles |  |  |  | 1,453 |  | 1,028 |  | -
Goodwill impairment charge |  |  |  | - |  | 9,000 |  | -
Depreciation expense |  |  |  | 35,054 |  | 5,272 |  | -
Other operating expenses |  |  |  | 1,069,512 |  | 166,677 |  | (407)
Income tax expense |  |  |  | 141,113 |  | 33,917 |  | -
Net income |  |  | $ | 621,839 | $ | 80,427 | $ | -
Segment assets |  |  | $ | 59,640,784 | $ | 11,106,409 | $ | (319,999)
For the nine months ended September 30, 2022
|  | Reportable |  |  |  |  |  | Total
(In thousands) |  | Segments |  | Corporate |  | Eliminations |  | Popular, Inc.
Net interest income (expense) | $ | 1,629,914 | $ | (22,121) | $ | - | $ | 1,607,793
Provision for credit losses (benefit) |  | 33,521 |  | (22) |  | - |  | 33,499
Non-interest income |  | 568,492 |  | 174,060 |  | (3,955) |  | 738,597
Amortization of intangibles |  | 2,481 |  | - |  | - |  | 2,481
Goodwill impairment charge |  | 9,000 |  | - |  | - |  | 9,000
Depreciation expense |  | 40,326 |  | 881 |  | - |  | 41,207
Other operating expenses |  | 1,235,782 |  | (149) |  | (3,609) |  | 1,232,024
Income tax expense |  | 175,030 |  | 7,802 |  | (155) |  | 182,677
Net income | $ | 702,266 | $ | 143,427 | $ | (191) | $ | 845,502
Segment assets | $ | 70,427,194 | $ | 5,341,051 | $ | (5,038,570) | $ | 70,729,675
2021
For the quarter ended September 30, 2021
|  |  |  | Banco Popular |  |  |  | Intersegment
(In thousands) |  |  |  | de Puerto Rico |  | Popular U.S. |  | Eliminations
Net interest income |  |  | $ | 419,166 | $ | 80,038 | $ | 2
Provision for credit losses (benefit) |  |  |  | (37,022) |  | (23,937) |  | -
Non-interest income |  |  |  | 146,139 |  | 6,150 |  | (136)
Amortization of intangibles |  |  |  | 617 |  | 166 |  | -
Depreciation expense |  |  |  | 11,164 |  | 1,516 |  | -
Other operating expenses |  |  |  | 324,171 |  | 50,694 |  | (136)
Income tax expense |  |  |  | 65,357 |  | 18,139 |  | -
Net income |  |  | $ | 201,018 | $ | 39,610 | $ | 2
Segment assets |  |  | $ | 63,476,269 | $ | 10,338,333 | $ | (23,074)
For the quarter ended September 30, 2021
|  | Reportable |  |  |  |  |  |
(In thousands) |  | Segments |  | Corporate |  | Eliminations |  | Total Popular, Inc.
Net interest income (expense) | $ | 499,206 | $ | (9,813) | $ | - | $ | 489,393
Provision for credit losses (benefit) |  | (60,959) |  | (214) |  | - |  | (61,173)
Non-interest income |  | 152,153 |  | 17,251 |  | (146) |  | 169,258
Amortization of intangibles |  | 783 |  | - |  | - |  | 783
Depreciation expense |  | 12,680 |  | 328 |  | - |  | 13,008
Other operating expenses |  | 374,729 |  | 615 |  | (967) |  | 374,377
Income tax expense (benefit) |  | 83,496 |  | (279) |  | 325 |  | 83,542
Net income | $ | 240,630 | $ | 6,988 | $ | 496 | $ | 248,114
Segment assets | $ | 73,791,528 | $ | 5,378,819 | $ | (4,981,184) | $ | 74,189,163
For the nine months ended September 30, 2021
|  |  |  | Banco Popular |  |  |  | Intersegment
(In thousands) |  |  |  | de Puerto Rico |  | Popular U.S. |  | Eliminations
Net interest income |  |  | $ | 1,248,689 | $ | 237,950 | $ | 5
Provision for credit losses (benefit) |  |  |  | (104,425) |  | (55,801) |  | -
Non-interest income |  |  |  | 417,399 |  | 17,083 |  | (411)
Amortization of intangibles |  |  |  | 2,338 |  | 499 |  | -
Depreciation expense |  |  |  | 35,115 |  | 5,441 |  | -
Other operating expenses |  |  |  | 938,754 |  | 152,421 |  | (408)
Income tax expense |  |  |  | 187,784 |  | 46,337 |  | -
Net income |  |  | $ | 606,522 | $ | 106,136 | $ | 2
Segment assets |  |  | $ | 63,476,269 | $ | 10,338,333 | $ | (23,074)
For the nine months ended September 30, 2021
|  | Reportable |  |  |  |  |  | Total
(In thousands) |  | Segments |  | Corporate |  | Eliminations |  | Popular, Inc.
Net interest income (expense) | $ | 1,486,644 | $ | (30,337) | $ | - | $ | 1,456,307
Provision for credit losses (benefit) |  | (160,226) |  | (188) |  | - |  | (160,414)
Non-interest income |  | 434,071 |  | 45,675 |  | (2,295) |  | 477,451
Amortization of intangibles |  | 2,837 |  | 252 |  | - |  | 3,089
Depreciation expense |  | 40,556 |  | 860 |  | - |  | 41,416
Other operating expenses |  | 1,090,767 |  | (567) |  | (2,824) |  | 1,087,376
Income tax expense (benefit) |  | 234,121 |  | (925) |  | 270 |  | 233,466
Net income | $ | 712,660 | $ | 15,906 | $ | 259 | $ | 728,825
Segment assets | $ | 73,791,528 | $ | 5,378,819 | $ | (4,981,184) | $ | 74,189,163
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 quarter and nine months ended September 30, 2022, BPPR participated in loans originated by PB totaling $69 million and $160 million respectively, while there were no such participations for the quarter and nine months ended September 30, 2021. At September 30, 2022, total assets for the BPPR segment related to its operations in the United States amounted to $1.0 billion (December 31, 2021 - $589 million). During the nine months period ended September 30, 2022, the BPPR segment generated approximately $45.0 million (2021 - $38.1 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 $34.6 million in revenues (2021 - $34.7 million) from its operations in the U.S. and British Virgin Islands.
Geographic Information |  |  |  |
|  |  | Quarter ended |  | Nine months ended
(In thousands) |  | September 30, 2022 |  | September 30, 2021 |  | September 30, 2022 |  | September 30, 2021
Revenues:[1] |  |  |  |  |  |  |  |
Puerto Rico | $ | 852,149 | $ | 542,178 | $ | 1,940,457 | $ | 1,590,030
United States |  | 133,071 |  | 97,331 |  | 347,614 |  | 288,619
Other |  | 20,893 |  | 19,142 |  | 58,319 |  | 55,109
Total consolidated revenues | $ | 1,006,113 | $ | 658,651 | $ | 2,346,390 | $ | 1,933,758
[1] | Total revenues include net interest income, service charges on deposit accounts, other service fees, mortgage banking activities, net (loss) gain, including impairment on equity securities, net (loss) gain on trading account debt securities, net loss on sale of loans, including valuation adjustment on loans held-for-sale, adjustments to indemnity reserves on loans sold, and other operating income.
Selected Balance Sheet Information:
(In thousands) |  | September 30, 2022 |  | December 31, 2021
Puerto Rico |  |  |  |
| Total assets | $ | 57,192,527 | $ | 63,221,282
| Loans |  | 20,760,831 |  | 19,770,118
| Deposits |  | 54,769,845 |  | 57,211,608
United States |  |  |  |
| Total assets | $ | 12,153,357 | $ | 10,986,055
| Loans |  | 10,204,303 |  | 8,903,493
| Deposits |  | 8,016,775 |  | 7,777,232
Other |  |  |  |
| Total assets | $ | 1,383,791 | $ | 890,562
| Loans |  | 566,119 |  | 626,115
| Deposits[1] |  | 2,032,707 |  | 2,016,248
[1] | Represents deposits from BPPR operations located in the U.S. and British Virgin Islands.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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