-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VnZYNKboi3IaMENQ0h04WZBnuF8x8e0Esd3P6GKvbaO7ZZoN4OiV4HOo1YqJftQW I3FFC/X2Lwd67DVAHUVayw== 0000950144-98-008320.txt : 19980714 0000950144-98-008320.hdr.sgml : 19980714 ACCESSION NUMBER: 0000950144-98-008320 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980709 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980713 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: POPULAR INC CENTRAL INDEX KEY: 0000763901 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 660416582 STATE OF INCORPORATION: PR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-13818 FILM NUMBER: 98665250 BUSINESS ADDRESS: STREET 1: 209 MUNOZ RIVERA AVE STREET 2: POPULAR CENTER BUILDING CITY: HATO REY STATE: PR ZIP: 00918 BUSINESS PHONE: 8097659800 MAIL ADDRESS: STREET 1: P.O. BOX 362708 CITY: SAN JUAN STATE: PR ZIP: 00936-2708 FORMER COMPANY: FORMER CONFORMED NAME: BANPONCE CORP DATE OF NAME CHANGE: 19920703 8-K 1 POPULAR, INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 9, 1998 POPULAR, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) COMMONWEALTH OF PUERTO RICO NO. 0-13818 NO. 66-0416582 - ---------------------------------------------- ----------- ------------------ (State or other jurisdiction of incorporation) (Commission (IRS Employer File Number) Identification No.)
209 MUNOZ RIVERA AVENUE HATO REY, PUERTO RICO 00918 - ---------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (787) 765-9800 -------------- --------------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 5. Other Events On July 9, 1998, Popular, Inc. (the "Corporation") announced by way of a news release, its operational results for the quarter and six-month period ended June 30, 1998. A copy of the Corporation's release, dated July 9, 1998, is attached hereto as Exhibit 99(a) and is hereby incorporated by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits 99(a) News release, dated July 9, 1998, announcing the Corporation and subsidiaries earnings for the quarter and six-month period ended June 30, 1998. 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. POPULAR. INC. ---------------- (Registrant) Date: July 10 1998 By: /s/ Amilcar L. Jordan ------------- ------------------------------------------ Name: Amilcar L. Jordan, Esq. Title: Senior Vice President and Comptroller EX-99.(A) 2 NEWS RELEASE, DATED JULY 9, 1998 1 EXHIBIT 99(a) [POPULAR LETTERHEAD] For additional information contact: Mr. Jorge A. Junquera Senior Executive Vice President Telephone (787) 754-1685 July 9, 1998 News Release POPULAR, INC. EARNINGS FOR THE QUARTER AND SIX-MONTH PERIOD ENDED JUNE 30, 1998 Popular, Inc. (the Corporation) announced net income of $57.5 million for the second quarter of 1998, an increase of $6.4 million or 12.5% over the $51.1 million reported for the second quarter of 1997. Earnings per common share (EPS) for the quarter, after adjusting for the stock split in the form of a dividend of one share for each share outstanding effective on July l, 1998, were $0.41 per common share, a 10.7% increase over the $0.37 per common share reported for the same period a year earlier. Average shares outstanding used in the above computations were 135,497,786 for the second quarter of 1998 and 132,700,596 for the same quarter of 1997. Net earnings for the first quarter of 1998 were $54.8 million, or $0.39 per common share, based on 135,435,096 average shares then outstanding. The Corporation's return on assets (ROA) and return on common equity (ROE) for the second quarter of 1998 were 1.16% and 15.50%, respectively, compared with 1.16% and 16.07% for the same period in 1997 and 1.14% and 15.36% for the first quarter of 1998. For the first six months of 1998, the Corporation's net earnings reaches $112.3 million, compared with $100.6 million for the same period in 1997. EPS for the first six months of 1998, were $0.80 compared with $0.73 for the same period of 1997. ROA and ROE for the first six months of 1998 were 1.15% and 15.43%, respectively. For the same period of 1997, these ratios were 1.17% and 16.20%. On April 23, 1998, the Board of Directors authorized a two-for-one common stock split the form of a dividend, bringing total outstanding shares to 135,497,786. The new shares were distributed on July 1, 1998, to shareholders of record as of June 12, 1998. As mentioned above, all per share data included herein has been adjusted to reflect the stock split. The Corporation's results of operations for the quarter ended June 30, 1998, when compared with the same quarter of 1997, reflected an increase of $23.8 million in net interest income coupled 2 2 - POPULAR, INC. 1998 SECOND QUARTER RESULTS with an increase of $16.7 million in other revenues. These improvements were partially tempered by rises of $8.1 million in the provision for loan losses, $23.0 million in operating expenses and $3.0 million in income taxes. Net interest income for the second quarter of 1998 amounted to $214.4 million, an increase of 12.5% over the same period in 1997. The growth in net interest income was primarily due to loan growth, particularly in commercial loans, and to higher levels in the investment portfolio. The acquisitions made on April 30, and May 31, 1997, in Florida and Illinois, respectively, together with the acquisition of Roig Commercial Bank (RCB) on June 30, 1997, accounted for most of the increase in average earning assets. The net interest yield for the quarter ended June 30, 1998, was 4.57%, compared with 4.56% for the second quarter of 1997. For the first quarter of 1998 the net interest yield was 4.66%. For the first six months of 1998, the net interest yield was 4.59%, compared with 4.54% for the same period of 1997. The provision for loan losses for the second quarter of 1998 amounted to $33.5 million compared with $25.4 million for the second quarter of 1997. The increase resulted from the growth in the loan portfolio, non-performing assets and net charge-offs. Net charge-offs for the quarter ended June 30, 1998, were $27.2 million or 0.94% of average loans compared with $22.9 million or 0.90% for the second quarter of 1997, and $27.5 million or 0.96% for the first quarter of 1998. As a percentage of average loans, net charge-offs were 0.95% and 0.82% for the six-month periods ended on June 30, 1998 and 1997, respectively. The increase in net charge-offs was primarily reflected in the consumer loan category, particularly personal loans, and is mostly related to higher delinquency levels and bankruptcies in both the U.S. and Puerto Rico. Non-performing assets were $222 million or 1.89% of loans at June 30, 1998, compared with $211 million or 1.94%, at the end of the second quarter of 1997, and $213 million or 1.85% at March 31, 1998. The rise in non-performing assets from June 30, 1997, was mainly reflected in non-performing consumer loans and other real estate owned, partially offset by a reduction in non-performing commercial loans. As reported before, the Corporation reports non-performing assets on a more conservative basis than most U.S. banks. The standard industry practice is to place non-performing commercial loans on non-accrual status when payments of principal or interest are delinquent 90 days. However, the Corporation's policy is to place commercial loans on non-accrual status when payments of principal 3 3 - POPULAR, INC. 1998 SECOND QUARTER RESULTS or interest are delinquent 60 days. Lease financing, conventional mortgage and closed-end consumer loans are placed on non-accrual status when payments are delinquent 90 days. Total non-interest income grew $16.7 million or 29.6%, from $56.2 million for the second quarter of 1997 to $72.9 million for the same period in 1998. The growth in non-interest income was led by an increase of $7.1 million in other revenues, $4.0 million in other service fees, and $3.3 million in service charges on deposit accounts. There was an increase in other operating income resulting from the recording during the second quarter of 1997, of a loss of $3.6 million in the market value of a real property which was finally sold later in 1997, and higher gains on loans sold for the quarter ended June 30, 1998. Other service fees amounted to $28.8 million for the three-month period ended June 30, 1998, compared with $24.8 million for the same period a year earlier, reflecting a rise of $1.5 million in credit card fees and discounts due to increased merchant activity and card usage. Debit card fees rose $0.7 million principally as a result of the sustained growth in the volume of transactions at point-of-sale (POS) terminals, while fees related to the sale and administration of investment products rose $0.8 million mainly as a result of the fees earned by the retail division of Popular Securities, which started operations at the end of the second quarter of 1997. Service charges on deposit accounts increased due to higher activity on commercial and retail accounts and a higher volume of deposits. Personnel costs increased $8.2 million as compared with the second quarter of 1997. Most of the increase was due to the acquisitions made since the second quarter of 1997 and annual merit increases. Full-time equivalents (FTE) amounted to 9,148 at the end of this quarter, up 366 from 8,782 FTEs at the same date in 1997. Other operating expenses increased $14.8 million, reaching $92.4 million for the second quarter of 1998. This increase was mostly reflected in net occupancy expenses, professional fees, amortization of intangibles and equipment expenses. Net occupancy expenses grew $3.0 million, due in part to the sale of the income-producing real property previously mentioned and the Corporation's growth and expansion. Professional fees rose $2.9 million reflection higher consulting and technical support fees for business expansion and costs incurred in relation to the Coporation's action plan to address the Year 2000 Issue. Amortization of intangibles increased $2.0 million, mostly related to the premiums paid on the operations acquired during the second quarter of 1997. 4 4 - POPULAR, INC. 1998 SECOND QUARTER RESULTS The increase in equipment expenses resulted from the Corporation's business and geographic expansion and expenditures associated with new technology and systems enhancements. The Corporation's total assets at June 30, 1998, amounted to $20.0 billion, compared with $19.1 billion at June 30, 1997. Total assets at March 31, 1998, were also $20.0 billion. The Corporation's earning assets reached $18.7 billion at June 30, 1998, compared with $17.8 billion and $18.7 billion at June 30, 1997 and March 31, 1998, respectively. Total loans were $11.8 billion at June 30, 1998, or $844 million more than the June 30, 1997 level of $10.9 billion and $210 million over the March 31, 1998 level of $11.5 billion. Commercial loans accounted for the largest growth since June 30, 1997, increasing $500 million. The growth mostly resulted from marketing efforts directed to the retail and middle market and the Corporation's expansion in the U.S. The allowance for loan losses at June 30, 1998, amounted to $224 million or 1.91% of loans. This amount compares with $207 million or 1.89% at June 30, 1997, and $218 million or 1.89% at March 31, 1998. At June 30, 1998, the allowance for loan losses as a percentage of non-performing assets was 100.8% compared with 97.9% at June 30, 1997, and 102.0% at March 31, 1998. The Corporation has consistently increased its allowance for loan losses to keep pace with the loan growth, the level of charge-offs and the increase in non-performing loans. Total deposits grew to $12.l billion at June 30, 1998, from $11.4 billion at June 30, 1997. Most of the growth was realized in savings and time deposits, which increased $268 million and $339 million, respectively. At March 31, 1998, total deposits amounted to $12.0 billion. Total deposits in Puerto Rico, the Corporation's principal place of business, increased to $8.7 billion at June 30, 1998, from $8.6 billion at March 31, 1998, notwithstanding the decrease of $62 million in 936 deposits. Borrowed funds, including subordinated notes and capital securities, amounted to $5.9 billion at June 30, 1998 and 1997,compared with $6.1 billion at March 31, 1998. At June 30, 1998, stockholders' equily totaled $1.59 billion, compared with $1.42 billion at the same date last year. Stockholders' equity was $1.55 billion at March 31, 1998. Unrealized holding gains on securities available-for-sale, net of deferred taxes, amounted to $42.3 million at June 30, 1998, compared with $6.3 million and $37.1 million at June 30, 1997 and March 31, 1998, 5 5 - POPULAR, INC. 1998 SECOND QUARTER RESULTS respectively. The market value of the Corporation's common stock at June 30, 1998, atter considering the stock split in the form of a dividend, was $33.25 per share, compared with $20.19 at June 30, 1997, and $29.34 at March 31, 1998. The Corporation's market capitalization at June 30, 1998, was $4.5 billion, compared with $2.8 billion at June 30, 1997, and $4.0 billion at March 31, 1998. At June 30, 1998, the Corporation's common stock had a book value per share of $11.02. * * * 6 POPULAR, INC. FINANCIAL SUMMARY (In thousands, except per share data)
Second FOR THE SIX MONTHS ENDED 1998 1997 Quarter JUNE 30 ------------------------- ----------- 1998-1997 ----------------------------------- SECOND First Second Percent Percent QUARTER Quarter Quarter Variance 1998 1997 Variance ------------------------------------------------------------------------------------- SUMMARY OF OPERATIONS Interest income $ 402,864 $ 396,368 $ 359,005 12.22% $ 799,232 $ 693,270 15.28% Interest expense 188,472 183,664 168,399 11.92 372,136 322,020 15.56 ----------------------------------------------------------------------------------- Net interest income 214,392 212,704 190,606 12.48 427,096 371,250 15.04 Provision for loan losses 33,524 33,565 25,413 31.92 67,089 49,100 36.64 ----------------------------------------------------------------------------------- Net interest income after provision for loan losses 180,868 179,139 165,193 9.49 360,007 322,150 11.75 Other operating income 68,526 66,415 54,124 26.61 134,941 109,606 23.11 Gain (loss) on sale of securities 3,049 867 1,286 3,916 (374) Trading account profit 1,311 669 817 1,980 1,250 ----------------------------------------------------------------------------------- Total other income 72,886 67,951 56,227 29.63 140,837 110,482 27.48 Salaries and benefits 76,393 77,711 67,651 12.92 154,104 132,696 16.13 Profit sharing 6,264 5,683 6,788 - 7.72 11,947 13,228 - 9.68 Amortization of intangibles 6,849 6,784 4,841 41.48 13,633 9,279 46.92 Other operating expenses 85,539 82,202 72,766 17.55 167,741 138,968 20.70 ----------------------------------------------------------------------------------- Total operating expenses 175,045 172,380 152,046 15.13 347,425 294,171 18.10 ----------------------------------------------------------------------------------- Income before income tax 78,709 74,710 69,374 13.46 153,419 138,461 10.80 Income tax 21,248 19,915 18,283 16.22 41,163 37,831 8.81 ----------------------------------------------------------------------------------- Net income $ 57,461 $ 54,795 $ 51,091 12.47 $ 112,256 $ 100,630 11.55 =================================================================================== Net income applicable to common stock $ 55,374 $ 52,708 $ 49,003 13.00 $ 108,081 $ 96,455 12.05 =================================================================================== Earnings per common share: Net income $ 0.41 $ 0.39 $ 0.37 10.67 $ 0.80 $ 0.73 9.60 ----------- ----------- ----------- ----- ----------- ----------- ----- Average common shares outstanding* 135,497,786 135,435,096 132,700,596 135,466,614 132,499,878 Common shares outstanding at end of period* 135,497,786 135,435,096 136,472,096 135,497,786 136,472,096
* Restated to reflect the stock split in the form of a dividend of one share for each share outstanding effective on July 1, 1998. 6 7 POPULAR, INC. FINANCIAL SUMMARY (In thousands)
Second FOR THE SIX MONTHS ENDED 1998 1997 Quarter JUNE 30, --------------------------------------------- 1998-1997 -------------------------------------- Second First Second Percent Percent Quarter Quarter Quarter Variance 1998 1997 Variance ---------------------------------------------------------------------------------------------------- SELECTED AVERAGE BALANCES Total assets $19,934,645 $19,485,912 $17,624,817 13.11 $19,711,518 $17,272,791 14.12 Loans 11,615,054 11,466,638 10,164,122 14.28 11,541,256 9,972,014 15.74 Earning assets 18,769,875 18,340,991 16,728,780 12.20 18,556,618 16,294,637 13.88 Interest-bearing liabilities 15,338,018 15,032,597 13,746,479 11.58 15,186,151 13,448,432 12.92 Stockholders' equity 1,533,036 1,492,184 1,322,946 15.88 1,512,723 1,301,369 16.24 PERFORMANCE RATIOS Net interest yield* 4.57% 4.66% 4.56% 4.59% 4.54% Return on assets 1.16 1.14 1.16 1.15 1.17 Return on common equity 15.50 15.36 16.07 15.43 16.20 CREDIT QUALITY DATA Nonperforming assets $ 222,258 $ 213,366 $ 211,228 5.22 $ 222,258 $ 211,228 5.22 Net loans charged-off 27,186 27,508 22,886 18.79 54,694 40,787 34.10 Allowance for loan losses 224,045 217,708 206,719 8.38 224,045 206,719 8.38 Nonperforming assets to total assets 1.11% 1.07% 1.10% 1.11% 1.10% Allowance for losses to loans 1.91 1.89 1.89 1.91 1.89 SELECTED FINANCIAL DATA AT PERIOD-END Total assets $19,997,636 $20,018,220 $19,997.636 $19,145,844 4.45 Loans.................... 11,753,213 11,543,169 11,753,213 10,909,365 7.74 Earning assets........... 18,725,774 18,748,873 18,725,774 17,771,069 5.37 Interest-bearing liabilities............. 15,467,424 15,619,792 15,467,424 14,850,507 4.15 Stockholders' equity..... 1,593,693 1,546,238 1,593,683 1,424,130 11.91
*Not on a taxable equivalent basis 7 -----END PRIVACY-ENHANCED MESSAGE-----