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Segment reporting
 9 Months Ended
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.