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Related party transactions | 12 Months Ended
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Dec. 31, 2024
Related Party Transactions |
Related Party Transactions | Note 26 – Related party transactions The Corporation has had loan transactions with the Corporation’s directors, executive officers, including certain related individuals or organizations, and affiliates, and proposes to continue such transactions in the ordinary course of its business, on substantially the same terms, including interest rates and collateral, as those prevailing for comparable loan transactions with third parties. The activity and balance of all these loans were as follows: (In thousands) Balance at December 31, 2022 $ 125,337 New loans 23,381 Payments (9,731) Other changes, including existing loans to new related parties 7,030 Balance at December 31, 2023 $ 146,017 New loans 10,365 Payments (11,743) Other changes, including existing loans to new related parties (2,422) Balance at December 31, 2024 $ 142,217 New loans and payments include disbursements and collections from existing lines of credit. Certain loans to related parties have participated in the Corporation’s loan mitigation programs that are also available to third parties. From time to time, the Corporation, in the ordinary course of business, also obtains services from related parties that have some association with the Corporation. Management believes the terms of such arrangements are consistent with arrangements entered into with independent third parties. Related party transactions with Evertec, as an affiliate Until August 15, 2022, the Corporation had an investment in Evertec, Inc. (“Evertec”) which provides various processing and information technology services to the Corporation and its subsidiaries and gave BPPR access to the ATH network owned and operated by Evertec. This investment was accounted for under the equity method. The Corporation recorded $ 1.5 million in dividends from its investment in Evertec during the year ended December 31, 2022. On July 1, 2022, BPPR completed its previously announced acquisition of certain assets from Evertec Group, LLC (“Evertec Group”) to service certain BPPR channels, in exchange for shares of Evertec held by BPPR. The transaction was accounted for as a business combination. In connection with this transaction, BPPR also entered into amended and restated service agreements with Evertec Group pursuant to which Evertec Group will continue to provide various information technology and transaction processing services to Popular, BPPR and their respective subsidiaries. As part of the transaction, BPPR and Evertec entered into a revenue sharing structure for BPPR in connection with its merchant acquiring relationship with Evertec. On August 15, 2022, the Corporation completed the sale of its remaining shares of common stock of Evertec, together with the aforementioned business acquisition (the “Evertec Transactions”). As a result, the Corporation discontinued accounting for its proportionate share of Evertec’s income (loss) and changes in stockholder’s equity under the equity method of accounting in the third quarter of 2022. The Corporation recorded a pre-tax gain of $ 257.7 million considering the initial exchange of Evertec shares as well as the sale of the remaining shares. Year ended (In thousands) December 31, 2022 Share of Evertec income and Gain from the Evertec Transactions and related accounting adjustments [1] $ 269,539 Share of other changes in Evertec's stockholders' equity 3,168 Share of Evertec's changes in equity recognized in income and Gain from the Evertec Transaction and related accounting adjustments $ 272,707 [1] The Gain from the Evertec Transactions and related accounting adjustments are reflected within other operating income in the accompanying consolidated financial statements. The Corporation recognized an additional $ 17.3 million as an operating expense in connection with the Evertec Transactions. The following table presents 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 year ended 2022. Items that represent expenses to the Corporation are presented with parenthesis. Year ended (In thousands) December 31, 2022 Category Interest expense on deposits $ (267) Interest expense ATH and credit cards interchange income from services to Evertec 13,955 Other service fees Rental income charged to Evertec 3,258 Net occupancy Fees on services provided by Evertec (128,681) Professional fees Other services provided to Evertec 420 Other operating expenses Total $ (111,315) [1] Includes activity through June 30, 2022. Centro Financiero BHD, S.A. At December 31, 2024, the Corporation had a 15.63 % equity interest in Centro Financiero BHD, S.A. (“BHD”), one of the largest banking and financial services groups in the Dominican Republic. During the year ended December 31, 2024, the Corporation recorded $ 33.0 million in equity pickup, including the impact of changes in the fair value of available for sale securities included as a component of Other Comprehensive Income, from its investment in BHD (December 31, 2023 - $ 40.1 million), which had a carrying amount of $ 239.5 million at December 31, 2024 (December 31, 2023 - $ 225.9 million). The Corporation received $ 19.4 million in cash dividend distributions and $ 2.9 in stock dividends during the year ended December 31, 2024 (December 31, 2023 - $ 14.1 million in cash dividends and $ 2.1 million in stock dividends).

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