UNITED
STATES
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):
October
22, 2014
POPULAR, INC.
(Exact
name of registrant as specified in its charter)
COMMONWEALTH OF PUERTO RICO
|
001-34084
|
66-0667416
|
(State or other jurisdiction of incorporation or organization)
|
(Commission File Number) |
(IRS Employer Identification Number) |
209 MUNOZ RIVERA AVENUE HATO REY, PUERTO RICO |
00918 |
|
(Address of principal executive offices) |
(Zip code) |
(787) 765-9800 |
(Registrant's telephone number, including area code) |
NOT APPLICABLE |
|
(Former name, former address and former fiscal year, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On October 22, 2014 Popular, Inc. issued a news release announcing its unaudited financial results for the quarter ended September 30, 2014, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K. The information furnished pursuant to this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any of the Corporation’s filings under the Securities Act of 1933, as amended, unless otherwise expressly stated in such filing.
Item 9.01. Financial Statements and Exhibits
99.1 Press release dated October 22, 2014
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: |
October 22, 2014 |
|
By: /s/ Jorge J. García |
Jorge J. García |
|||
Senior Vice President and Corporate Comptroller |
Exhibit 99.1
Popular, Inc. Announces Third Quarter Financial Results
SAN JUAN, Puerto Rico--(BUSINESS WIRE)--October 22, 2014--Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported a net income of $62.6 million and adjusted net income of $90.5 million for the quarter ended September 30, 2014, compared to net loss of $511.3 million and adjusted net income of $86.2 million for the quarter ended June 30, 2014.
Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: "In the third quarter Popular reached important milestones, such as the repayment of TARP and continued the restructuring of our U.S. operations, completing the sale of our Illinois and Central Florida operations. These accomplishments come in concert with another period of stable results and credit quality, reflecting our ability to operate successfully even under challenging conditions".
Earnings Highlights | ||||||||||||||||||||
(Unaudited) | Quarters ended | Nine months ended | ||||||||||||||||||
(Dollars in thousands, except per share information) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | 30-Sep-14 | 30-Sep-13 | |||||||||||||||
Net interest income (expense) | $ | 326,421 | $ | (59,381 | ) | $ | 331,012 | $ | 618,211 | $ | 990,067 | |||||||||
Provision for loan losses – non-covered loans | 68,166 | 50,074 | 48,715 | 172,362 | 486,783 | |||||||||||||||
Provision for loan losses – covered loans [1] | 12,463 | 11,604 | 17,433 | 49,781 | 60,489 | |||||||||||||||
Net interest income (expense) after provision for loan losses | 245,792 | (121,059 | ) | 264,864 | 396,068 | 442,795 | ||||||||||||||
FDIC loss share expense | (4,864 | ) | (55,261 | ) | (14,866 | ) | (84,331 | ) | (44,887 | ) | ||||||||||
Other non-interest income | 129,194 | 118,050 | 301,575 | 367,482 | 650,624 | |||||||||||||||
Operating expenses | 310,640 | 275,439 | 308,292 | 863,678 | 917,381 | |||||||||||||||
Income (loss) from continuing operations before income tax | 59,482 | (333,709 | ) | 243,281 | (184,459 | ) | 131,151 | |||||||||||||
Income tax expense (benefit) | 26,667 | (4,124 | ) | 17,768 | 45,807 | (276,489 | ) | |||||||||||||
Income (loss) from continuing operations | $ | 32,815 | $ | (329,585 | ) | $ | 225,513 | $ | (230,266 | ) | $ | 407,640 | ||||||||
Income (loss) from discontinued operations, net of tax | $ | 29,758 | $ | (181,729 | ) | $ | 3,622 | $ | (132,066 | ) | $ | 28,656 | ||||||||
Net income (loss) | $ | 62,573 | $ | (511,314 | ) | $ | 229,135 | $ | (362,332 | ) | $ | 436,296 | ||||||||
Net income (loss) applicable to common stock | $ | 61,643 | $ | (512,245 | ) | $ | 228,204 | $ | (365,124 | ) | $ | 433,504 | ||||||||
Net income (loss) per common share from continuing operations - Basic | $ | 0.31 | $ | (3.21 | ) | $ | 2.18 | $ | (2.27 | ) | $ | 3.94 | ||||||||
Net income (loss) per common share from continuing operations - Diluted | $ | 0.31 | $ | (3.21 | ) | $ | 2.18 | $ | (2.27 | ) | $ | 3.93 | ||||||||
Net income (loss) per common share from discontinued operations - Basic | $ | 0.29 | $ | (1.77 | ) | $ | 0.04 | $ | (1.28 | ) | $ | 0.28 | ||||||||
Net income (loss) per common share from discontinued operations - Diluted | $ | 0.29 | $ | (1.77 | ) | $ | 0.04 | $ | (1.28 | ) | $ | 0.28 | ||||||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. | ||||||||||||||||||||
Significant events
On July 23, 2014, the Corporation also completed the repurchase of the outstanding warrant initially issued to the U.S. Treasury under the TARP Capital Purchase Program in 2008. The warrant represented the right to purchase 2,093,284 shares of the Corporation’s common stock at an exercise price of $67 per share with an original term of 10 years. The Corporation and the U.S. Treasury agreed upon a repurchase price of $3.0 million for the warrant. With the completion of this transaction, the Corporation completed its exit from the TARP Capital Purchase Program.
In connection with the repayment of TARP on July 2, 2014, the Corporation accelerated the related amortization of the discount and deferred costs amounting to $414.1 million, which is reflected as part of interest expense in the consolidated statement of operations, during the second quarter of 2014.
The Corporation continues its strategy of centralizing certain back office operations in Puerto Rico and New York. The Corporation incurred $8.3 million in restructuring charges during the third quarter of 2014. Over the course of the fourth quarter of 2014 and early in 2015, an additional $41 million in restructuring charges are expected to be incurred, comprised of $22 million in severance and retention payments and $19 million in operational set-up costs and lease cancelations. Upon the completion of the regional sales and the centralization of operations in the first half of 2015, annual operating expenses are expected to decrease by approximately $40 million, after the reorganization is complete. This decrease in expenses is expected to offset the reduction in revenues that will result from the sale of the regional operations.
In connection with the restructuring of its U.S. mainland operations, the Corporation is also taking steps to restructure its balance sheet and funding strategies. As part of the strategy, during the third quarter of 2014, the Corporation sold approximately $94.2 million in securities available for sale and refinanced approximately $638 million in long term structured repos in the U.S. with a yield of 4.41% and replaced them with lower cost short-term repos of a similar amount. The fees associated with the refinancing of these repos were $39.7 million, of which $20.7 million were recorded as interest expense during the third quarter of 2014, with remainder to be recorded during the fourth quarter of 2014.
The Corporation also sold or entered into agreements to sell certain of its legacy and classified loans in the U.S. for an aggregate of approximately $220.7 million which resulted in a net loss of approximately $12.0 million in the quarter, which is reflected in the provision for loan losses.
The decision to sell three of its U.S. regional operations resulted in the discontinuance of each of these respective operations. As required by US GAAP, current and prior periods presented in the consolidated statement of operations as well as financial information covering income and expense amounts presented in this earnings release has been retrospectively adjusted for the impact of the discontinued operations for comparative purposes. The consolidated statement of financial condition and related financial information for prior periods included in this earnings release do not reflect the reclassification of BPNA’s assets and liabilities to discontinued operations. Refer to Table P for a detail of the net loss, assets and liabilities from the discontinued operations. Also, refer to Table Q for details of the restructuring charges incurred during the quarter ended September 30, 2014.
The following table reflects the results of operations for the third quarter of 2014, with adjustments to exclude the impact of significant events.
Quarter ended | |||||||||||||||||||
(Unaudited) | 30-Sep-14 | ||||||||||||||||||
(In thousands) | Actual Results (US GAAP) | BPNA Reorganization [2] | Income Tax Adjustments [3] | Indemnification Asset Adjustment [4] | Adjusted Results (Non-GAAP) | ||||||||||||||
Net interest income | $ | 326,421 | $ | (20,663 | ) | $ | - | $ | - | $ | 347,084 | ||||||||
Provision for loan losses – non-covered loans | 68,166 | 11,950 | - | - | 56,216 | ||||||||||||||
Provision for loan losses – covered loans [1] | 12,463 | - | - | - | 12,463 | ||||||||||||||
Net interest income (expense) after provision for loan losses | 245,792 | (32,613 | ) | - | - | 278,405 | |||||||||||||
FDIC loss share expense | (4,864 | ) | - | - | 15,046 | (19,910 | ) | ||||||||||||
Other non-interest income | 129,194 | - | - | - | 129,194 | ||||||||||||||
Restructuring costs | 8,290 | 8,290 | - | - | - | ||||||||||||||
Other operating expenses | 302,350 | - | - | - | 302,350 | ||||||||||||||
Income (loss) from continuing operations before income tax | 59,482 | (40,903 | ) | - | 15,046 | 85,339 | |||||||||||||
Income tax expense | 26,667 | - | 20,048 | 3,009 | 3,610 | ||||||||||||||
Income (loss) from continuing operations | $ | 32,815 | $ | (40,903 | ) | $ | (20,048 | ) | $ | 12,037 | $ | 81,729 | |||||||
Income (loss) from discontinued operations, net of tax | $ | 29,758 | $ | 20,949 | $ | - | $ | - | $ | 8,809 | |||||||||
Net income (loss) | $ | 62,573 | $ | (19,954 | ) | $ | (20,048 | ) | $ | 12,037 | $ | 90,538 | |||||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. | |||||||||||||||||||
[2] Includes losses on bulk sales and reclassifications to loans held-for-sale of classified and legacy loans for an aggregated net loss $12.0 million, loss on the refinancing of structured repos for $20.7 million recorded as interest expense, restructuring cost of $8.3 million and the net gain of $25.8 million on the sale of the Central Florida and Illinois regional operations, which was offset by costs directly associated with the unwinding of the regions subject to the sales for $4.8 million. | |||||||||||||||||||
[3] As disclosed last quarter, on July 1, 2014, the Government of Puerto Rico approved an amendment to the Internal Revenue Code, which, among other things, changed the income tax rate for capital gains from 15% to 20%. As a result, the Corporation recognized an income tax expense of $20.0 million, mainly related to the deferred tax liability associated with the portfolio acquired from Westernbank. | |||||||||||||||||||
[4] The FDIC indemnity asset amortization included a positive adjustment of $15.0 million to reverse the impact of accelerated amortization expense recorded in prior periods. Refer to Non-Interest section for further details. |
Quarter ended | ||||||||||||||||
(Unaudited) | 30-Jun-14 | |||||||||||||||
(In thousands) |
Actual Results |
TARP repayment |
BPNA |
Adjusted Results |
||||||||||||
Net interest (expense) income | $ | (59,381 | ) | $ | (414,068 | ) | $ | - | $ | 354,687 | ||||||
Provision for loan losses – non-covered loans | 50,074 | - | - | 50,074 | ||||||||||||
Provision for loan losses – covered loans [1] | 11,604 | - | - | 11,604 | ||||||||||||
Net interest (expense) income after provision for loan losses | (121,059 | ) | (414,068 | ) | - | 293,009 | ||||||||||
FDIC loss share expense | (55,261 | ) | - | - | (55,261 | ) | ||||||||||
Other non-interest income | 118,050 | - | - | 118,050 | ||||||||||||
Restructuring costs | 4,574 | - | 4,574 | - | ||||||||||||
Other operating expenses | 270,865 | - | - | 270,865 | ||||||||||||
(Loss) income from continuing operations before income tax | (333,709 | ) | (414,068 | ) | (4,574 | ) | 84,933 | |||||||||
Income tax (benefit) expense | (4,124 | ) | (14,524 | ) | - | 10,400 | ||||||||||
(Loss) income from continuing operations | $ | (329,585 | ) | $ | (399,544 | ) | $ | (4,574 | ) | $ | 74,533 | |||||
(Loss) income from discontinued operations, net of tax | $ | (181,729 | ) | $ | - | $ | (193,363 | ) | $ | 11,634 | ||||||
Net (loss) income | $ | (511,314 | ) | $ | (399,544 | ) | $ | (197,937 | ) | $ | 86,167 | |||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. | ||||||||||||||||
[2] Income tax adjustments include a benefit of approximately $23.4 million related to a Closing Agreement with the PR Department of Treasury, completed during the second quarter of 2014 and the negative impact of the deferred tax asset valuation allowance of approximately $8.9 million recorded at the Holding Company, due to the difference in the tax treatment of the interest expense related to the TARP funds and the newly issued $450 million senior notes. Refer to Income taxes section for further details. | ||||||||||||||||
[3] Adjustments included within Loss from discontinued operations include approximately $186.5 million of goodwill impairment charge and $6.9 million in transaction costs, which include severance payment expenses, legal and other professional services, incurred in connection with the agreements to sell the U.S. regional operations. Refer to Table P for a detail of the net loss from discontinued operations. Adjustments within operating expenses are related to restructuring charges incurred in connection with the reorganization of PCB. Refer to Table Q for a detail of restructuring charges. | ||||||||||||||||
Quarters ended | ||||||||||||
(Unaudited) | Adjusted Results Non-GAAP | |||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | Variance | |||||||||
Net interest income | $ | 347,084 | $ | 354,687 | $ | (7,603 | ) | |||||
Provision for loan losses – non-covered loans | 56,216 | 50,074 | 6,142 | |||||||||
Provision for loan losses – covered loans [1] | 12,463 | 11,604 | 859 | |||||||||
Net interest income after provision for loan losses | 278,405 | 293,009 | (14,604 | ) | ||||||||
FDIC loss share expense | (19,910 | ) | (55,261 | ) | 35,351 | |||||||
Other non-interest income | 129,194 | 118,050 | 11,144 | |||||||||
Restructuring costs | - | - | - | |||||||||
Other operating expenses | 302,350 | 270,865 | 31,485 | |||||||||
Income from continuing operations before income tax | 85,339 | 84,933 | 406 | |||||||||
Income tax expense | 3,610 | 10,400 | (6,790 | ) | ||||||||
Income from continuing operations | $ | 81,729 | $ | 74,533 | $ | 7,196 | ||||||
Income from discontinued operations, net of tax | 8,809 | 11,634 | $ | (2,825 | ) | |||||||
Net income (loss) | $ | 90,538 | $ | 86,167 | $ | 4,371 | ||||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. | ||||||||||||
Net interest income
For the quarter ended September 30, 2014, the Corporation had a net interest income of $326.4 million and an adjusted net interest income of $347.1 million, excluding the impact of the $20.7 million expense related to the refinancing of structured repos, compared to a net interest expense of $59.4 million for the previous quarter. Excluding the impact of the accelerated amortization of the discount and deferred costs of $414.1 million associated with the TARP trust preferred securities, net interest income was $354.7 million, for the second quarter of 2014. Net interest margin was 4.36% for the third quarter of 2014, compared to (0.77%) for the previous quarter. Adjusted net interest margin was 4.64%, compared to 4.68% for the second quarter of 2014. The main drivers of the adjusted decrease in the net interest income of $7.6 million, or four basis points, were:
BPPR’s net interest margin was 5.25%, a decrease of twenty five basis points from the previous quarter. Net interest income amounted to $315.7 million for the quarter ended September 30, 2014, compared with $334.0 million for the previous quarter. The decrease in the net interest income was mainly due to the above mentioned decrease in interest income from covered loans and lower volume of commercial loans.
BPNA earned $26.4 million in net interest income for the quarter ended September 30, 2014. Excluding the impact of the repos refinancing, the net interest income was $47.1 million, compared with $48.7 million in the previous quarter. Net interest margin was 1.82% for the quarter. The adjusted net interest margin for the quarter was 3.23%, compared to 3.25% in the previous quarter. The decrease in net interest income was mostly the result of a lower volume of mortgage loans due to portfolio amortization and lower yield on commercial loans.
Non-interest income
Non-interest income was $124.3 million for the third quarter of 2014, an increase of $61.5 million when compared with the second quarter. The FDIC indemnity asset amortization for the third quarter of 2014 included a benefit of approximately $15.0 million to reverse the impact of accelerated amortization expense recorded in prior periods. This amount will be recognized as expense over the remaining portion of the Loss Sharing Agreement that expires in the quarter ending June 30, 2015. Excluding this impact, non-interest income increased by $46.5 million compared to the second quarter of 2014, driven primarily by the following items:
These positive variances were partially offset by:
Refer to Table B for further details.
Financial Impact of FDIC-Assisted Transaction | ||||||||||||||||||||
(Unaudited) | Quarters ended | Nine months ended | ||||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | 30-Sep-14 | 30-Sep-13 | |||||||||||||||
Income Statement |
||||||||||||||||||||
Interest income on covered loans | $ | 68,251 | $ | 82,975 | $ | 71,631 | $ | 232,324 | $ | 213,952 | ||||||||||
Total FDIC loss share expense | (4,864 | ) | (55,261 | ) | (14,866 | ) | (84,331 | ) | (44,887 | ) | ||||||||||
Other non-interest income | - | - | 109 | - | 593 | |||||||||||||||
Provision for loan losses | 12,463 | 11,604 | 17,433 | 49,781 | 60,489 | |||||||||||||||
Total revenues less provision for loan losses | $ | 50,924 | $ | 16,110 | $ | 39,441 | $ | 98,212 | $ | 109,169 | ||||||||||
Balance Sheet |
||||||||||||||||||||
Loans covered under loss-sharing agreements with FDIC | $ | 2,654,263 | $ | 2,736,102 | $ | 3,076,009 | ||||||||||||||
FDIC loss share asset | 681,106 | 751,553 | 1,324,711 | |||||||||||||||||
FDIC true-up payment obligation | 126,473 | 127,551 | 124,092 |
See additional details on accounting for FDIC-Assisted transaction in Table O.
Operating expenses
Operating expenses increased by $35.2 million when compared with the second quarter of 2014. Excluding the impact of the significant events related to the BPNA reorganization, operating expenses increased by $31.5 million compared to the second quarter of 2014, driven primarily by:
These increases were partially offset by:
Non-personnel credit-related costs, which include collections, appraisals, credit related fees, and OREO expenses, amounted to $25.8 million for the third quarter of 2014, compared with $10.1 million for the second quarter of 2014. The increase was principally due to higher losses on sales of OREO’s and higher write-downs on mortgage and commercial properties at BPPR, discussed above.
Full-time equivalent employees (“FTEs”), including discontinued operations, were 7,848 as of September 30, 2014, compared with 8,032 as of June 30, 2014, and 8,094 as of September 30, 2013.
For a breakdown of operating expenses by category refer to table B.
Income taxes
Income tax expense amounted to $26.7 million for the third quarter of 2014, compared to a benefit of $4.1 million for the previous quarter.
On July 1, 2014, the Government of Puerto Rico approved an amendment to the Internal Revenue Code, which, among other things, changed the income tax rate for capital gains from 15% to 20%. As a result, the Corporation recognized an income tax expense of approximately $20.0 million during the third quarter of 2014, mainly related to the deferred tax liability associated with the portfolio acquired from Westernbank. On an adjusted basis, the income tax provision amounted to $3.6 million, compared to $10.4 million for the previous quarter.
During the third quarter of 2014, the Corporation recorded a favorable adjustment of approximately $6.1 million in connection with filing its tax returns for the year 2013. Also, the Corporation reversed approximately $3.6 million of reserves for uncertain tax positions due to the expiration of the statute of limitations in the Puerto Rico operations. Excluding these adjustments, the adjusted income tax expense would have been $13.3 million, for an effective tax rate of approximately 16% on the adjusted pre-tax income.
Credit Quality
The following table presents non-performing assets information:
Non-Performing Assets | ||||||||||||
(Unaudited) | ||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | |||||||||
Total non-performing loans held-in-portfolio, excluding covered loans | $ | 621,945 | $ | 639,735 | $ | 617,573 | ||||||
Non-performing loans held-for-sale | 19,728 | 4,426 | 2,099 | |||||||||
Other real estate owned (“OREO”), excluding covered OREO | 135,256 | 139,420 | 135,502 | |||||||||
Total non-performing assets, excluding covered assets | 776,929 | 783,581 | 755,174 | |||||||||
Covered loans and OREO | 166,533 | 171,955 | 190,554 | |||||||||
Total non-performing assets | $ | 943,462 | $ | 955,536 | $ | 945,728 | ||||||
Net charge-offs for the quarter (excluding covered loans) | $ | 40,469 | $ | 46,201 | $ | 57,892 | ||||||
Ratios (excluding covered loans): | ||||||||||||
Non-covered loans held-in-portfolio (1) | $ | 19,359,216 | $ | 19,635,224 | $ | 21,427,183 | ||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio (1) | 3.21 | % | 3.26 | % | 2.88 | % | ||||||
Allowance for loan losses to loans held-in-portfolio | 2.69 | 2.68 | 2.46 | |||||||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale | 83.88 | 82.26 | 85.19 | |||||||||
[1] During the quarter ended June 30, 2014 approximately $1.8 billion in loans held-in-portfolio were reclassified to the discontinued operations, of which $9.5 million were in non-performing status as of June 30, 2014 and $48 thousand were in non-performing status as of September 30, 2014. | ||||||||||||
Refer to Table H for additional information. | ||||||||||||
Provision for Loan Losses | ||||||||||||||||||
(Unaudited) | Quarters ended | Nine months ended | ||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | 30-Sep-14 | 30-Sep-13 | |||||||||||||
Provision (reversal) for loan losses - non-covered loans: | ||||||||||||||||||
BPPR | $ | 61,868 | $ | 74,860 | $ | 50,475 | $ | 190,643 | $ | 485,228 | ||||||||
BPNA | 6,298 | (24,786 | ) | (1,760 | ) | (18,281 | ) | 1,555 | ||||||||||
Total provision for loan losses - non-covered loans | 68,166 | 50,074 | 48,715 | 172,362 | 486,783 | |||||||||||||
Provision for loan losses - covered loans | 12,463 | 11,604 | 17,433 | 49,781 | 60,489 | |||||||||||||
Total provision for loan losses | $ | 80,629 | $ | 61,678 | $ | 66,148 | $ | 222,143 | $ | 547,272 | ||||||||
Credit Quality
The Corporation’s asset quality generally continued to improve during the third quarter of 2014, as evidenced by declines in both non-performing loans (“NPLs”) and net charge-offs (“NCOs”). The BPNA segment continued to reflect strong credit quality led by the improved risk profile of its loan portfolios, further strengthened by the divesture and reclassification to discontinued operations of its regional operations in California, Illinois and Central Florida as well as certain legacy and classified assets. In the BPPR segment, stable trends continued during the quarter, but the Corporation continues to monitor potential risks associated with Puerto Rico’s economic and fiscal conditions.
The following presents credit quality performance for the third quarter of 2014 for the Corporation’s non-covered portfolios. Unless otherwise noted, all credit metrics for the third quarter of 2014 are from continuing operations.
Credit Quality by Segment | ||||||||||||
(Unaudited) | ||||||||||||
(In thousands) | Quarters ended | |||||||||||
BPPR | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | |||||||||
Provision for loan losses | $ | 61,868 | $ | 74,860 | $ | 50,475 | ||||||
Net charge-offs | 38,682 | 43,335 |
44,678 |
[1] |
||||||||
Total non-performing loans held-in-portfolio, excluding covered loans | 592,229 | 573,806 | 441,253 | |||||||||
Allowance / non-covered loans held-in-portfolio | 3.09 | % | 2.94 | % | 2.55 | % | ||||||
Quarters ended | ||||||||||||
BPNA | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | |||||||||
Provision for loan losses (reversal of provision) - Continuing operations | $ | 6,298 | $ | (24,786 | ) | $ | (1,760 | ) | ||||
Provision for loan losses (reversal of provision) - Discontinued operations | - | - | 6,515 | |||||||||
Net charge-offs (recoveries) - Continuing operations | 1,787 | 2,866 | 7,183 | |||||||||
Net charge-offs (recoveries) - Discontinued operations | - | - | 6,031 | |||||||||
Total non-performing loans held-in-portfolio | 29,716 | 65,929 | 176,320 | |||||||||
Allowance / non-covered loans held-in-portfolio | 0.91 | % | 1.59 | % | 2.20 | % | ||||||
BPPR Segment
BPNA Segment
Financial Condition Highlights | |||||||||
(Unaudited) | |||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | ||||||
Money market, trading and investment securities | $ | 7,200,291 | $ | 7,949,164 | $ | 6,776,473 | |||
Loans not covered under loss sharing agreements with the FDIC | 19,359,216 | 19,635,224 | 21,427,183 | ||||||
Loans covered under loss sharing agreements with the FDIC | 2,654,263 | 2,736,102 | 3,076,009 | ||||||
Assets from discontinued operations | 1,129,053 | 1,828,382 | - | ||||||
Total assets | 34,099,095 | 36,587,902 | 36,052,116 | ||||||
Deposits | 24,466,105 | 24,901,152 | 26,395,054 | ||||||
Borrowings | 3,375,485 | 4,465,965 | 4,164,104 | ||||||
Liabilities from discontinued operations | 1,106,762 | 2,079,742 | - | ||||||
Total liabilities | 29,800,703 | 32,327,461 | 31,658,231 | ||||||
Stockholders’ equity | 4,298,392 | 4,260,441 | 4,393,885 | ||||||
Total assets decreased by $2.5 billion from the second quarter of 2014, driven by:
These decreases were partially offset by:
Total liabilities decreased by $2.5 billion from the second quarter of 2014, driven by:
Stockholders’ equity increased by $37.9 million from the second quarter of 2014, mainly as a result of the net income for the quarter of $62.6 million, partially offset by an increase of $19.8 million in net unrealized loss on investment securities available-for-sale. Refer to Table G for capital ratios.
Refer to Table C for the Statements of Financial Condition.
Forward-Looking Statements
The information included in this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in forward-looking statements. Factors that might cause such a difference include, but are not limited to (i) the rate of growth in the economy and employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) the fiscal and monetary policies of the federal government and its agencies; (iv) changes in federal bank regulatory and supervisory policies, including required levels of capital and the impact of proposed capital standards on our capital ratios; (v) the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our businesses, business practices and cost of operations; (vi) regulatory approvals that may be necessary to undertake certain actions or consummate strategic transactions such as acquisitions and dispositions; (vii) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate markets in Puerto Rico and the other markets in which borrowers are located; (viii) the performance of the stock and bond markets; (ix) competition in the financial services industry; (x) additional Federal Deposit Insurance Corporation assessments; and (xi) possible legislative, tax or regulatory changes. For a discussion of such factors and certain risks and uncertainties to which the Corporation is subject, see the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, as well as its filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, the Corporation assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.
Founded in 1893, Popular, Inc. is the leading banking institution by both assets and deposits in Puerto Rico and ranks among the top 50 U.S. banks by assets. In the United States, Popular has established a community-banking franchise providing a broad range of financial services and products with branches in New York, New Jersey, Florida and California.
An electronic version of this press release can be found at the Corporation’s website: www.popular.com.
Popular will hold a conference call to discuss the financial results today Wednesday, October 22, 2014 at 10:30 a.m. Eastern Standard Time. The call will be broadcast live over the Internet and can be accessed through the investor relations section of the Corporation’s website: www.popular.com.
Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through a dial-in telephone number 1-866-235-1201 or 1-412-902-4127.
A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Thursday, October 30, 2014. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10052964.
Popular, Inc. |
Financial Supplement to Third Quarter 2014 Earnings Release |
Table A - Selected Ratios and Other Information |
Table B - Consolidated Statement of Operations |
Table C - Consolidated Statement of Financial Condition |
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER |
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE |
Table F - Mortgage Banking Activities and Other Service Fees |
Table G - Loans and Deposits |
Table H - Non-Performing Assets |
Table I - Activity in Non-Performing Loans |
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios |
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED |
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS |
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS |
Table N - Reconciliation to GAAP Financial Measures |
Table O - Financial Information - Westernbank Covered Loans |
Table P - Financial Information from Discontinued Operations |
Table Q - Restructuring Charges |
POPULAR, INC. | ||||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | ||||||||||||||||||||
Table A - Selected Ratios and Other Information | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Quarters ended | Nine months ended | |||||||||||||||||||
30-Sep-14 | 30-Jun-14 | 30-Sep-13 | 30-Sep-14 | 30-Sep-13 | ||||||||||||||||
Basic EPS from continuing operations | $ | 0.31 | $ | (3.21 | ) | $ | 2.18 | $ | (2.27 | ) | $ | 3.94 | ||||||||
Basic EPS from discontinued operations | $ | 0.29 | $ | (1.77 | ) | $ | 0.04 | $ | (1.28 | ) | $ | 0.28 | ||||||||
Total Basic EPS | $ | 0.60 | $ | (4.98 | ) | $ | 2.22 | $ | (3.55 | ) | $ | 4.22 | ||||||||
Diluted EPS from continuing operations | $ | 0.31 | $ | (3.21 | ) | $ | 2.18 | $ | (2.27 | ) | $ | 3.93 | ||||||||
Diluted EPS from discontinued operations | $ | 0.29 | $ | (1.77 | ) | $ | 0.04 | $ | (1.28 | ) | $ | 0.28 | ||||||||
Total Diluted EPS | $ | 0.60 | $ | (4.98 | ) | $ | 2.22 | $ | (3.55 | ) | $ | 4.21 | ||||||||
Average common shares outstanding | 102,953,328 | 102,781,438 | 102,714,262 | 102,845,402 | 102,666,570 | |||||||||||||||
Average common shares outstanding - assuming dilution | 103,152,916 | 102,781,438 | 103,017,443 | 102,845,402 | 103,014,674 | |||||||||||||||
Common shares outstanding at end of period | 103,448,206 | 103,472,979 | 103,327,146 | 103,448,206 | 103,327,146 | |||||||||||||||
Market value per common share | $ | 29.44 | $ | 34.18 | $ | 26.25 | $ | 29.44 | $ | 26.25 | ||||||||||
Market capitalization - (In millions) | $ | 3,046 | $ | 3,537 | $ | 2,712 | $ | 3,046 | $ | 2,712 | ||||||||||
Return on average assets | 0.71 | % | (5.66 | )% | 2.51 | % | (1.35 | )% | 1.60 | % | ||||||||||
Return on average common equity | 5.75 | % | (43.04 | )% | 21.64 | % | (10.68 | )% | 14.38 | % | ||||||||||
Net interest margin [2] | 4.64 | % | 4.68 | % | 4.46 | % | 4.67 | % | 4.44 | % | ||||||||||
Common equity per share | $ | 41.07 | $ | 40.69 | $ | 42.04 | $ | 41.07 | $ | 42.04 | ||||||||||
Tangible common book value per common share (non-GAAP) [1] | $ | 36.24 | $ | 35.84 | $ | 35.32 | $ | 36.24 | $ | 35.32 | ||||||||||
Tangible common equity to tangible assets (non-GAAP) [1] | 11.16 | % | 10.28 | % | 10.32 | % | 11.16 | % | 10.32 | % | ||||||||||
Tier 1 risk-based capital [3] | 16.93 | % | 19.23 | % | 18.54 | % | 16.93 | % | 18.54 | % | ||||||||||
Total risk-based capital [3] | 18.20 | % | 20.69 | % | 19.82 | % | 18.20 | % | 19.82 | % | ||||||||||
Tier 1 leverage [3] | 11.14 | % | 13.07 | % | 12.26 | % | 11.14 | % | 12.26 | % | ||||||||||
Tier 1 common equity to risk-weighted assets (non-GAAP) [1] [3] | 14.79 | % | 13.51 | % | 14.20 | % | 14.79 | % | 14.20 | % | ||||||||||
[1] Refer to Table N for Non-GAAP reconciliations. | ||||||||||||||||||||
[2] Not on a taxable equivalent basis. For the quarter ended September 30, 2014, excludes the impact of the $20.7 million fees related to repos refinancing. For the quarter ended June 30, 2014, excludes the impact of the $414.1 million TARP discount amortization. US GAAP Net interest margin was 4.36% for the third quarter, compared to (0.77)% for the previous quarter. Refer to Tables D & E for reconciliation. | ||||||||||||||||||||
[3] Capital ratios for the current quarter are estimated. | ||||||||||||||||||||
POPULAR, INC. | ||||||||||||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | ||||||||||||||||||||||||||||
Table B - Consolidated Statement of Operations | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Quarters ended | Variance | Quarter ended | Variance | Nine months ended | ||||||||||||||||||||||||
(In thousands, except per share information) | 30-Sep-14 | 30-Jun-14 |
Q3 2014 |
30-Sep-13 |
Q3 2014 |
30-Sep-14 | 30-Sep-13 | |||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||
Loans | $ | 362,592 | $ | 380,986 | $ | (18,394 | ) | $ | 366,267 | $ | (3,675 | ) | $ | 1,121,180 | $ | 1,097,081 | ||||||||||||
Money market investments | 1,007 | 1,131 | (124 | ) | 848 | 159 | 3,111 | 2,632 | ||||||||||||||||||||
Investment securities | 33,154 | 33,989 | (835 | ) | 33,561 | (407 | ) | 102,270 | 107,490 | |||||||||||||||||||
Trading account securities | 4,446 | 5,344 | (898 | ) | 5,242 | (796 | ) | 15,047 | 16,212 | |||||||||||||||||||
Total interest income | 401,199 | 421,450 | (20,251 | ) | 405,918 | (4,719 | ) | 1,241,608 | 1,223,415 | |||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Deposits | 26,533 | 26,223 | 310 | 29,115 | (2,582 | ) | 79,614 | 96,176 | ||||||||||||||||||||
Short-term borrowings | 28,955 | 8,892 | 20,063 | 9,563 | 19,392 | 46,887 | 29,111 | |||||||||||||||||||||
Long-term debt | 19,290 | 445,716 | (426,426 | ) | 36,228 | (16,938 | ) | 496,896 | 108,061 | |||||||||||||||||||
Total interest expense | 74,778 | 480,831 | (406,053 | ) | 74,906 | (128 | ) | 623,397 | 233,348 | |||||||||||||||||||
Net interest income (expense) | 326,421 | (59,381 | ) | 385,802 | 331,012 | (4,591 | ) | 618,211 | 990,067 | |||||||||||||||||||
Provision for loan losses - non-covered loans | 68,166 | 50,074 | 18,092 | 48,715 | 19,451 | 172,362 | 486,783 | |||||||||||||||||||||
Provision for loan losses - covered loans | 12,463 | 11,604 | 859 | 17,433 | (4,970 | ) | 49,781 | 60,489 | ||||||||||||||||||||
Net interest income (expense) after provision for loan losses | 245,792 | (121,059 | ) | 366,851 | 264,864 | (19,072 | ) | 396,068 | 442,795 | |||||||||||||||||||
Service charges on deposit accounts | 40,585 | 39,237 | 1,348 | 40,517 | 68 | 119,181 | 123,056 | |||||||||||||||||||||
Other service fees | 54,839 | 56,468 | (1,629 | ) | 57,041 | (2,202 | ) | 164,125 | 169,264 | |||||||||||||||||||
Mortgage banking activities | 14,402 | 3,788 | 10,614 | 18,892 | (4,490 | ) | 21,868 | 57,270 | ||||||||||||||||||||
Net (loss) gain and valuation adjustments on investment securities | (1,763 | ) | - | (1,763 | ) | - | (1,763 | ) | (1,763 | ) | 5,856 | |||||||||||||||||
Trading account profit (loss) | 740 | 1,055 | (315 | ) | (6,607 | ) | 7,347 | 3,772 | (11,936 | ) | ||||||||||||||||||
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale | 15,593 | 9,659 | 5,934 | 2,374 | 13,219 | 29,645 | (56,054 | ) | ||||||||||||||||||||
Adjustments (expense) to indemnity reserves on loans sold | (9,480 | ) | (7,454 | ) | (2,026 | ) | (2,387 | ) | (7,093 | ) | (27,281 | ) | (30,162 | ) | ||||||||||||||
FDIC loss share (expense) income | (4,864 | ) | (55,261 | ) | 50,397 | (14,866 | ) | 10,002 | (84,331 | ) | (44,887 | ) | ||||||||||||||||
Other operating income | 14,278 | 15,297 | (1,019 | ) | 191,745 | (177,467 | ) | 57,935 | 393,330 | |||||||||||||||||||
Total non-interest income | 124,330 | 62,789 | 61,541 | 286,709 | (162,379 | ) | 283,151 | 605,737 | ||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Personnel costs | ||||||||||||||||||||||||||||
Salaries | 71,166 | 69,149 | 2,017 | 70,474 | 692 | 209,353 | 206,681 | |||||||||||||||||||||
Commissions, incentives and other bonuses | 14,738 | 12,862 | 1,876 | 14,060 | 678 | 40,699 | 43,537 | |||||||||||||||||||||
Pension, postretirement and medical insurance | 9,282 | 7,532 | 1,750 | 13,744 | (4,462 | ) | 25,515 | 41,968 | ||||||||||||||||||||
Other personnel costs, including payroll taxes | 9,356 | 9,557 | (201 | ) | 10,074 | (718 | ) | 32,376 | 30,106 | |||||||||||||||||||
Total personnel costs | 104,542 | 99,100 | 5,442 | 108,352 | (3,810 | ) | 307,943 | 322,292 | ||||||||||||||||||||
Net occupancy expenses | 21,203 | 20,267 | 936 | 21,386 | (183 | ) | 62,830 | 62,937 | ||||||||||||||||||||
Equipment expenses | 12,370 | 12,044 | 326 | 11,387 | 983 | 35,826 | 34,492 | |||||||||||||||||||||
Other taxes | 15,369 | 13,543 | 1,826 | 17,680 | (2,311 | ) | 42,575 | 44,433 | ||||||||||||||||||||
Professional fees | 67,649 | 67,024 | 625 | 69,237 | (1,588 | ) | 201,672 | 203,989 | ||||||||||||||||||||
Communications | 6,455 | 6,425 | 30 | 6,290 | 165 | 19,565 | 19,236 | |||||||||||||||||||||
Business promotion | 13,062 | 16,038 | (2,976 | ) | 14,809 | (1,747 | ) | 40,486 | 42,751 | |||||||||||||||||||
FDIC deposit insurance | 9,511 | 10,480 | (969 | ) | 15,143 | (5,632 | ) | 30,969 | 42,056 | |||||||||||||||||||
Loss on early extinguishment of debt | - | - | - | 3,388 | (3,388 | ) | - | 3,388 | ||||||||||||||||||||
Other real estate owned (OREO) expenses | 19,745 | 3,410 | 16,335 | 16,632 | 3,113 | 29,595 | 70,156 | |||||||||||||||||||||
Credit and debit card processing, volume, interchange and other expenses | 5,659 | 5,640 | 19 | 4,816 | 843 | 16,495 | 14,617 | |||||||||||||||||||||
Other operating expenses | 24,759 | 14,869 | 9,890 | 17,182 | 7,577 | 56,781 | 51,065 | |||||||||||||||||||||
Amortization of intangibles | 2,026 | 2,025 | 1 | 1,990 | 36 | 6,077 | 5,969 | |||||||||||||||||||||
Restructuring costs | 8,290 | 4,574 | 3,716 | - | 8,290 | 12,864 | - | |||||||||||||||||||||
Total operating expenses | 310,640 | 275,439 | 35,201 | 308,292 | 2,348 | 863,678 | 917,381 | |||||||||||||||||||||
Income (loss) from continuing operations before income tax | 59,482 | (333,709 | ) | 393,191 | 243,281 | (183,799 | ) | (184,459 | ) | 131,151 | ||||||||||||||||||
Income tax expense (benefit) | 26,667 | (4,124 | ) | 30,791 | 17,768 | 8,899 | 45,807 | (276,489 | ) | |||||||||||||||||||
Income (loss) from continuing operations | 32,815 | (329,585 | ) | 362,400 | 225,513 | (192,698 | ) | (230,266 | ) | 407,640 | ||||||||||||||||||
Income (loss) from discontinued operations, net of tax | 29,758 | (181,729 | ) | 211,487 | 3,622 | 26,136 | (132,066 | ) | 28,656 | |||||||||||||||||||
Net income (loss) | $ | 62,573 | $ | (511,314 | ) | $ | 573,887 | $ | 229,135 | $ | (166,562 | ) | $ | (362,332 | ) | $ | 436,296 | |||||||||||
Net income (loss) applicable to common stock | $ | 61,643 | $ | (512,245 | ) | $ | 573,888 | $ | 228,204 | $ | (166,561 | ) | $ | (365,124 | ) | $ | 433,504 | |||||||||||
Net income (loss) per common share - basic: | ||||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 0.31 | $ | (3.21 | ) | $ | 3.52 | $ | 2.18 | $ | (1.87 | ) | $ | (2.27 | ) | $ | 3.94 | |||||||||||
Net income (loss) from discontinued operations | $ | 0.29 | $ | (1.77 | ) | $ | 2.06 | $ | 0.04 | $ | 0.25 | $ | (1.28 | ) | $ | 0.28 | ||||||||||||
Net income (loss) per common share - basic | $ | 0.60 | $ | (4.98 | ) | $ | 5.58 | $ | 2.22 | $ | (1.62 | ) | $ | (3.55 | ) | $ | 4.22 | |||||||||||
Net income (loss) per common share - diluted: | ||||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 0.31 | $ | (3.21 | ) | $ | 3.52 | $ | 2.18 | $ | (1.87 | ) | $ | (2.27 | ) | $ | 3.93 | |||||||||||
Net income (loss) from discontinued operations | $ | 0.29 | $ | (1.77 | ) | $ | 2.06 | $ | 0.04 | $ | 0.25 | $ | (1.28 | ) | $ | 0.28 | ||||||||||||
Net income (loss) per common share - diluted | $ | 0.60 | $ | (4.98 | ) | $ | 5.58 | $ | 2.22 | $ | (1.62 | ) | $ | (3.55 | ) | $ | 4.21 | |||||||||||
Popular, Inc. | ||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | ||||||||||||||||
Table C - Consolidated Statement of Financial Condition | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Variance | ||||||||||||||||
Q3 2014 vs. | ||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | Q2 2014 | ||||||||||||
Assets: | ||||||||||||||||
Cash and due from banks | $ | 321,914 | $ | 362,572 | $ | 368,590 | $ | (40,658 | ) | |||||||
Money market investments | 1,053,121 | 1,666,944 | 961,788 | (613,823 | ) | |||||||||||
Trading account securities, at fair value | 145,343 | 345,823 | 338,848 | (200,480 | ) | |||||||||||
Investment securities available-for-sale, at fair value | 5,727,766 | 5,653,992 | 5,136,618 | 73,774 | ||||||||||||
Investment securities held-to-maturity, at amortized cost | 112,893 | 114,280 | 140,355 | (1,387 | ) | |||||||||||
Other investment securities, at lower of cost or realizable value | 161,168 | 168,125 | 198,864 | (6,957 | ) | |||||||||||
Loans held-for-sale, at lower of cost or fair value | 178,008 | 97,010 | 124,532 | 80,998 | ||||||||||||
Loans held-in-portfolio: | ||||||||||||||||
Loans not covered under loss sharing agreements with the FDIC | 19,450,677 | 19,726,234 | 21,520,054 | (275,557 | ) | |||||||||||
Loans covered under loss sharing agreements with the FDIC | 2,654,263 | 2,736,102 | 3,076,009 | (81,839 | ) | |||||||||||
Less: Unearned income | 91,461 | 91,010 | 92,871 | 451 | ||||||||||||
Allowance for loan losses | 611,375 | 624,911 | 642,928 | (13,536 | ) | |||||||||||
Total loans held-in-portfolio, net | 21,402,104 | 21,746,415 | 23,860,264 | (344,311 | ) | |||||||||||
FDIC loss share asset | 681,106 | 751,553 | 1,324,711 | (70,447 | ) | |||||||||||
Premises and equipment, net | 497,111 | 492,382 | 519,623 | 4,729 | ||||||||||||
Other real estate not covered under loss sharing agreements with the FDIC | 135,256 | 139,420 | 135,502 | (4,164 | ) | |||||||||||
Other real estate covered under loss sharing agreements with the FDIC | 151,382 | 155,805 | 159,968 | (4,423 | ) | |||||||||||
Accrued income receivable | 116,746 | 119,520 | 122,881 | (2,774 | ) | |||||||||||
Mortgage servicing assets, at fair value | 152,282 | 151,951 | 161,445 | 331 | ||||||||||||
Other assets | 1,634,819 | 2,292,360 | 1,803,478 | (657,541 | ) | |||||||||||
Goodwill | 461,246 | 461,246 | 647,757 | - | ||||||||||||
Other intangible assets | 37,777 | 40,122 | 46,892 | (2,345 | ) | |||||||||||
Assets from discontinued operations | 1,129,053 | 1,828,382 | - | (699,329 | ) | |||||||||||
Total assets | $ | 34,099,095 | $ | 36,587,902 | $ | 36,052,116 | $ | (2,488,807 | ) | |||||||
Liabilities and Stockholders’ Equity: | ||||||||||||||||
Liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
Non-interest bearing | $ | 5,521,415 | $ | 5,666,685 | $ | 5,762,554 | $ | (145,270 | ) | |||||||
Interest bearing | 18,944,690 | 19,234,467 | 20,632,500 | (289,777 | ) | |||||||||||
Total deposits | 24,466,105 | 24,901,152 | 26,395,054 | (435,047 | ) | |||||||||||
Federal funds purchased and assets sold under agreements to repurchase | 1,650,712 | 2,074,676 | 1,793,208 | (423,964 | ) | |||||||||||
Other short-term borrowings | 1,200 | 31,200 | 826,200 | (30,000 | ) | |||||||||||
Notes payable | 1,723,573 | 2,360,089 | 1,544,696 | (636,516 | ) | |||||||||||
Other liabilities | 852,351 | 880,602 | 1,099,073 | (28,251 | ) | |||||||||||
Liabilities from discontinued operations | 1,106,762 | 2,079,742 | - | (972,980 | ) | |||||||||||
Total liabilities | 29,800,703 | 32,327,461 | 31,658,231 | (2,526,758 | ) | |||||||||||
Stockholders’ equity: | ||||||||||||||||
Preferred stock | 50,160 | 50,160 | 50,160 | - | ||||||||||||
Common stock | 1,036 | 1,035 | 1,034 | 1 | ||||||||||||
Surplus | 4,171,890 | 4,173,616 | 4,155,244 | (1,726 | ) | |||||||||||
Retained earnings | 229,306 | 167,663 | 445,330 | 61,643 | ||||||||||||
Treasury stock | (3,933 | ) | (1,742 | ) | (877 | ) | (2,191 | ) | ||||||||
Accumulated other comprehensive loss | (150,067 | ) | (130,291 | ) | (257,006 | ) | (19,776 | ) | ||||||||
Total stockholders’ equity | 4,298,392 | 4,260,441 | 4,393,885 | 37,951 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 34,099,095 | $ | 36,587,902 | $ | 36,052,116 | $ | (2,488,807 | ) |
Popular, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarter ended | Quarter ended | Quarter ended | Variance | Variance | ||||||||||||||||||||||||||||||||||||||||||||||||||||
30-Sep-14 | 30-Jun-14 | 30-Sep-13 | Q3 2014 vs. Q2 2014 | Q3 2014 vs. Q3 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
($ amounts in millions; yields not on a taxable equivalent basis) | Average balance | Income / Expense | Yield / Rate | Average balance | Income / Expense | Yield / Rate | Average balance | Income / Expense | Yield / Rate | Average balance | Income / Expense | Yield / Rate | Average balance | Income / Expense | Yield / Rate | |||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest earning assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Money market, trading and investment securities | $ | 7,501 | $ | 38.6 | 2.06 | % | $ | 7,839 | $ | 40.4 | 2.07 | % | $ | 6,813 | $ | 39.7 | 2.32 | % | ($338 | ) | ($1.8 | ) | (0.01 | ) | % | $ | 688 | ($1.1 | ) | (0.26 | ) | % | ||||||||||||||||||||||||
Loans not covered under loss sharing agreements with the FDIC: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 8,239 | 99.6 | 4.80 | 8,446 | 102.2 | 4.86 | 8,332 | 102.6 | 4.88 | (207 | ) | (2.6 | ) | (0.06 | ) | (93 | ) | (3.0 | ) | (0.08 | ) | |||||||||||||||||||||||||||||||||||
Construction | 201 | 2.5 | 4.86 | 175 | 2.4 | 5.55 | 313 | 3.7 | 4.68 | 26 | 0.1 | (0.69 | ) | (112 | ) | (1.2 | ) | 0.18 | ||||||||||||||||||||||||||||||||||||||
Mortgage | 6,646 | 84.0 | 5.05 | 6,691 | 85.3 | 5.10 | 6,633 | 81.7 | 4.93 | (45 | ) | (1.3 | ) | (0.05 | ) | 13 | 2.3 | 0.12 | ||||||||||||||||||||||||||||||||||||||
Consumer | 3,905 | 98.4 | 10.00 | 3,894 | 97.9 | 10.08 | 3,776 | 95.7 | 10.06 | 11 | 0.5 | (0.08 | ) | 129 | 2.7 | (0.06 | ) | |||||||||||||||||||||||||||||||||||||||
Lease financing | 545 | 9.8 | 7.20 | 546 | 10.2 | 7.43 | 537 | 10.9 | 8.08 | (1 | ) | (0.4 | ) | (0.23 | ) | 8 | (1.1 | ) | (0.88 | ) | ||||||||||||||||||||||||||||||||||||
Total loans not covered under loss sharing agreements with the FDIC | 19,536 | 294.3 | 5.99 | 19,752 | 298.0 | 6.05 | 19,591 | 294.6 | 5.98 | (216 | ) | (3.7 | ) | (0.06 | ) | (55 | ) | (0.3 | ) | 0.01 | ||||||||||||||||||||||||||||||||||||
Loans covered under loss sharing agreements with the FDIC | 2,727 | 68.3 | 9.95 | 2,811 | 83.0 | 11.83 | 3,119 | 71.6 | 9.13 | (84 | ) | (14.7 | ) | (1.88 | ) | (392 | ) | (3.3 | ) | 0.82 | ||||||||||||||||||||||||||||||||||||
Total loans | 22,263 | 362.6 | 6.48 | 22,563 | 381.0 | 6.77 | 22,710 | 366.2 | 6.41 | (300 | ) | (18.4 | ) | (0.29 | ) | (447 | ) | (3.6 | ) | 0.07 | ||||||||||||||||||||||||||||||||||||
Total interest earning assets | 29,764 | $ | 401.2 | 5.36 | % | 30,402 | $ | 421.4 | 5.56 | % | 29,523 | $ | 405.9 | 5.47 | % | (638 | ) | ($20.2 | ) | (0.20 | ) | % | 241 | ($4.7 | ) | (0.11 | ) | % | ||||||||||||||||||||||||||||
Allowance for loan losses | (629 | ) | (627 | ) | (603 | ) | (2 | ) | (26 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Other non-interest earning assets | 4,416 | 4,598 | 5,275 | (182 | ) | (859 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Assets from discontinued operations | 1,473 | 1,863 | 1,979 | (390 | ) | (506 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Total average assets | $ | 35,024 | $ | 36,236 | $ | 36,174 | $ | (1,212 | ) | $ | (1,150 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOW and money market | $ | 4,876 | $ | 3.9 | 0.32 | % | $ | 4,897 | $ | 3.8 | 0.32 | % | $ | 4,671 | $ | 3.4 | 0.29 | % | $ | (21 | ) | $ | 0.1 | - | % | $ | 205 | $ | 0.5 | 0.03 | % | |||||||||||||||||||||||||
Savings | 6,740 | 3.7 | 0.22 | 6,713 | 3.6 | 0.22 | 6,615 | 3.5 | 0.21 | 27 | 0.1 | - | 125 | 0.2 | 0.01 | |||||||||||||||||||||||||||||||||||||||||
Time deposits | 7,569 | 18.9 | 0.99 | 7,709 | 18.8 | 0.98 | 7,701 | 22.2 | 1.14 | (140 | ) | 0.1 | 0.01 | (132 | ) | (3.3 | ) | (0.15 | ) | |||||||||||||||||||||||||||||||||||||
Total interest bearing deposits | 19,185 | 26.5 | 0.55 | 19,319 | 26.2 | 0.54 | 18,987 | 29.1 | 0.61 | (134 | ) | 0.3 | 0.01 | 198 | (2.6 | ) | (0.06 | ) | ||||||||||||||||||||||||||||||||||||||
Borrowings[1] | 3,591 | 27.6 | 3.06 | 3,614 | 40.5 | 4.49 | 4,403 | 45.8 | 4.15 | (23 | ) | (12.9 | ) | (1.43 | ) | (812 | ) | (18.2 | ) | (1.09 | ) | |||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 22,776 | 54.1 | 0.94 | 22,933 | 66.7 | 1.17 | 23,390 | 74.9 | 1.28 | (157 | ) | (12.6 | ) | (0.23 | ) | (614 | ) | (20.8 | ) | (0.34 | ) | |||||||||||||||||||||||||||||||||||
Net interest spread | 4.42 | % | 4.39 | % | 4.19 | % | 0.03 | % | 0.23 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Non-interest bearing deposits | 5,464 | 5,451 | 5,386 | 13 | 78 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 860 | 915 | 963 | (55 | ) | (103 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities from discontinued operations | 1,618 | 2,113 | 2,200 | (495 | ) | (582 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' equity | 4,306 | 4,824 | 4,235 | (518 | ) | 71 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total average liabilities and stockholders' equity | $ | 35,024 | $ | 36,236 | $ | 36,174 | $ | (1,212 | ) | $ | (1,150 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted net interest income / margin non-taxable equivalent basis | $ | 347.1 | 4.64 | % | $ | 354.7 | 4.68 | % | $ | 331.0 | 4.46 | % | ($7.6 | ) | (0.04 | ) | % | $ | 16.1 | 0.18 | % | |||||||||||||||||||||||||||||||||||
Impact of fees related to repos refinancing | $ | 20.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accelerated amortization TARP discount and related deferred costs | - | $ | 414.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (expense)/margin non-taxable equivalent basis | $ | 326.4 | 4.36 | % | ($59.4 | ) | (0.77 | ) | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1) Borrowing expense for the third quarter, including the fees related to repos refinancing, was 5.34%, while borrowing expense including the impact of the accelerated TARP amortization in the second quarter was 50.31%. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Popular, Inc. | ||||||||||||||||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | ||||||||||||||||||||||||||||||||
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
Nine months ended | Nine months ended | |||||||||||||||||||||||||||||||
30-Sep-14 | 30-Sep-13 | Variance | ||||||||||||||||||||||||||||||
Average | Income / | Yield / | Average | Income / | Yield / | Average | Income / | Yield / | ||||||||||||||||||||||||
($ amounts in millions; yields not on a taxable equivalent basis) | balance | Expense | Rate | balance | Expense | Rate | balance | Expense | Rate | |||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Interest earning assets: | ||||||||||||||||||||||||||||||||
Money market, trading and investment securities | $ | 7,635 | $ | 120.4 | 2.10 | % | $ | 6,908 | $ | 126.3 | 2.44 | % | $ | 727 | ($5.9 | ) | (0.34 | ) | % | |||||||||||||
Loans not covered under loss sharing agreements with the FDIC: | ||||||||||||||||||||||||||||||||
Commercial | 8,390 | 302.6 | 4.82 | 8,260 | 298.5 | 4.83 | 130 | 4.1 | (0.01 | ) | ||||||||||||||||||||||
Construction | 187 | 9.7 | 6.93 | 330 | 10.7 | 4.34 | (143 | ) | (1.0 | ) | 2.59 | |||||||||||||||||||||
Mortgage | 6,676 | 256.2 | 5.12 | 6,688 | 256.2 | 5.11 | (12 | ) | - | 0.01 | ||||||||||||||||||||||
Consumer | 3,854 | 290.1 | 10.07 | 3,741 | 284.6 | 10.17 | 113 | 5.5 | (0.10 | ) | ||||||||||||||||||||||
Lease financing | 545 | 30.3 | 7.40 | 541 | 33.1 | 8.16 | 4 | (2.8 | ) | (0.76 | ) | |||||||||||||||||||||
Total loans not covered under loss sharing agreements with the FDIC | 19,652 | 888.9 | 6.04 | 19,560 | 883.1 | 6.03 | 92 | 5.8 | 0.01 | |||||||||||||||||||||||
Loans covered under loss sharing agreements with the FDIC | 2,823 | 232.3 | 11.00 | 3,299 | 214.0 | 8.67 | (476 | ) | 18.3 | 2.33 | ||||||||||||||||||||||
Total loans | 22,475 | 1,121.2 | 6.66 | 22,859 | 1,097.1 | 6.41 | (384 | ) | 24.1 | 0.25 | ||||||||||||||||||||||
Total interest earning assets | 30,110 | $ | 1,241.6 | 5.51 | % | 29,767 | $ | 1,223.4 | 5.49 | % | 343 | $ | 18.2 | 0.02 | % | |||||||||||||||||
Allowance for loan losses | (624 | ) | (613 | ) | (11 | ) | ||||||||||||||||||||||||||
Other non-interest earning assets | 4,566 | 5,186 | (620 | ) | ||||||||||||||||||||||||||||
Assets from discontinued operations | 1,762 | 2,005 | (243 | ) | ||||||||||||||||||||||||||||
Total average assets | $ | 35,814 | $ | 36,345 | ($531 | ) | ||||||||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||||||||||||
NOW and money market | $ | 4,837 | $ | 11.5 | 0.32 | % | $ | 4,668 | $ | 12.0 | 0.34 | % | $ | 169 | ($0.5 | ) | (0.02 | ) | % | |||||||||||||
Savings | 6,715 | 10.9 | 0.22 | 6,559 | 11.7 | 0.24 | 156 | (0.8 | ) | (0.02 | ) | |||||||||||||||||||||
Time deposits | 7,605 | 57.2 | 1.01 | 8,013 | 72.5 | 1.21 | (408 | ) | (15.3 | ) | (0.20 | ) | ||||||||||||||||||||
Total interest bearing deposits | 19,157 | 79.6 | 0.56 | 19,240 | 96.2 | 0.67 | (83 | ) | (16.6 | ) | (0.11 | ) | ||||||||||||||||||||
Borrowings [1] | 3,690 | 109.0 | 3.94 | 4,459 | 137.1 | 4.10 | (769 | ) | (28.1 | ) | (0.16 | ) | ||||||||||||||||||||
Total interest bearing liabilities | 22,847 | 188.6 | 1.10 | 23,699 | 233.3 | 1.31 | (852 | ) | (44.7 | ) | (0.21 | ) | ||||||||||||||||||||
Net interest spread | 4.41 | % | 4.18 | % | 0.23 | % | ||||||||||||||||||||||||||
Non-interest bearing deposits | 5,499 | 5,339 | 160 | |||||||||||||||||||||||||||||
Other liabilities | 889 | 1,012 | (123 | ) | ||||||||||||||||||||||||||||
Liabilities from discontinued operations | 1,957 | 2,214 | (257 | ) | ||||||||||||||||||||||||||||
Stockholders' equity | 4,622 | 4,081 | 541 | |||||||||||||||||||||||||||||
Total average liabilities and stockholders' equity | $ | 35,814 | $ | 36,345 | ($531 | ) | ||||||||||||||||||||||||||
Adjusted net interest income / margin non-taxable equivalent basis | $ | 1,053.0 | 4.67 | % | $ | 990.1 | 4.44 | % | $ | 62.9 | 0.23 | % | ||||||||||||||||||||
Impact of fees related to repos refinancing | $ | 20.7 | ||||||||||||||||||||||||||||||
Accelerated amortization of TARP discount and related deferred costs | 414.1 | |||||||||||||||||||||||||||||||
Net interest income/margin non-taxable equivalent basis | $ | 618.2 | 2.75 | % | ||||||||||||||||||||||||||||
(1) Borrowing expense including the fees related to repos refinancing and the impact of the accelerated TARP amortization was 19.65%. | ||||||||||||||||||||||||||||||||
Popular, Inc. | ||||||||||||||||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | ||||||||||||||||||||||||||||||||
Table F - Mortgage Banking Activities and Other Service Fees | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
Mortgage Banking Activities | Variance | |||||||||||||||||||||||||||||||
Quarters ended | Q3 2014 vs. | Q3 2014 vs. | Nine months ended | Variance | ||||||||||||||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | Q2 2014 | Q3 2013 | 30-Sep-14 | 30-Sep-13 | 2014 vs. 2013 | ||||||||||||||||||||||||
Mortgage servicing fees, net of fair value adjustments: | ||||||||||||||||||||||||||||||||
Mortgage servicing fees | $ | 11,091 | $ | 10,558 | $ | 11,543 | $ | 533 | $ | (452 | ) | $ | 32,397 | $ | 34,099 | $ | (1,702 | ) | ||||||||||||||
Mortgage servicing rights fair value adjustments | (2,588 | ) | (7,740 | ) | 3,879 | 5,152 | (6,467 | ) | (18,424 | ) | (6,862 | ) | (11,562 | ) | ||||||||||||||||||
Total mortgage servicing fees, net of fair value adjustments | 8,503 | 2,818 | 15,422 | 5,685 | (6,919 | ) | 13,973 | 27,237 | (13,264 | ) | ||||||||||||||||||||||
Net gain on sale of loans, including valuation on loans held-for-sale | 7,466 | 8,189 | 3,559 | (723 | ) | 3,907 | 22,831 | 16,968 | 5,863 | |||||||||||||||||||||||
Trading account (loss) profit: | ||||||||||||||||||||||||||||||||
Unrealized gains (losses) on outstanding derivative positions | 13 | 22 | (865 | ) | (9 | ) | 878 | (725 | ) | (265 | ) | (460 | ) | |||||||||||||||||||
Realized (losses) gains on closed derivative positions | (1,580 | ) | (7,241 | ) | 776 | 5,661 | (2,356 | ) | (14,211 | ) | 13,330 | (27,541 | ) | |||||||||||||||||||
Total trading account (loss) profit | (1,567 | ) | (7,219 | ) | (89 | ) | 5,652 | (1,478 | ) | (14,936 | ) | 13,065 | (28,001 | ) | ||||||||||||||||||
Total mortgage banking activities | $ | 14,402 | $ | 3,788 | $ | 18,892 | $ | 10,614 | $ | (4,490 | ) | $ | 21,868 | $ | 57,270 | $ | (35,402 | ) | ||||||||||||||
Other Service Fees | Variance | ||||||||||||||||||||||||||
Quarters ended | Q3 2014 vs. | Q3 2014 vs. | Nine months ended | Variance | |||||||||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | Q2 2014 | Q3 2013 | 30-Sep-14 | 30-Sep-13 | 2014 vs. 2013 | |||||||||||||||||||
Other service fees: | |||||||||||||||||||||||||||
Debit card fees | $ | 10,673 | $ | 11,000 | $ | 10,667 | $ | (327 | ) | $ | 6 | $ | 32,217 | $ | 31,127 | $ | 1,090 | ||||||||||
Insurance fees | 12,322 | 12,406 | 12,409 | (84 | ) | (87 | ) | 36,447 | 35,566 | 881 | |||||||||||||||||
Credit card fees | 17,078 | 16,985 | 16,734 | 93 | 344 | 50,146 | 48,553 | 1,593 | |||||||||||||||||||
Sale and administration of investment products | 6,605 | 7,456 | 8,981 | (851 | ) | (2,376 | ) | 20,518 | 27,941 | (7,423 | ) | ||||||||||||||||
Trust fees | 4,711 | 4,566 | 4,148 | 145 | 563 | 13,740 | 12,760 | 980 | |||||||||||||||||||
Other fees | 3,450 | 4,055 | 4,102 | (605 | ) | (652 | ) | 11,057 | 13,317 | (2,260 | ) | ||||||||||||||||
Total other service fees | $ | 54,839 | $ | 56,468 | $ | 57,041 | $ | (1,629 | ) | $ | (2,202 | ) | $ | 164,125 | $ | 169,264 | $ | (5,139 | ) | ||||||||
Popular, Inc. | |||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | |||||||||||||||||
Table G - Loans and Deposits | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Loans - Ending Balances | |||||||||||||||||
Variance | |||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 |
Q3 2014 vs. |
Q3 2014 vs. |
||||||||||||
Loans not covered under FDIC loss sharing agreements: | |||||||||||||||||
Commercial | $ | 8,058,714 | $ | 8,155,547 | $ | 9,845,477 | $ | (96,833 | ) | $ | (1,786,763 | ) | |||||
Construction | 211,850 | 179,059 | 293,220 | 32,791 | (81,370 | ) | |||||||||||
Legacy [1] | 91,015 | 162,941 | 235,645 | (71,926 | ) | (144,630 | ) | ||||||||||
Lease financing | 550,514 | 546,868 | 539,290 | 3,646 | 11,224 | ||||||||||||
Mortgage | 6,555,337 | 6,664,448 | 6,613,133 | (109,111 | ) | (57,796 | ) | ||||||||||
Consumer | 3,891,786 | 3,926,361 | 3,900,418 | (34,575 | ) | (8,632 | ) | ||||||||||
Total non-covered loans held-in-portfolio | $ | 19,359,216 | $ | 19,635,224 | $ | 21,427,183 | $ | (276,008 | ) | $ | (2,067,967 | ) | |||||
Loans covered under FDIC loss sharing agreements | 2,654,263 | 2,736,102 | 3,076,009 | (81,839 | ) | (421,746 | ) | ||||||||||
Total loans held-in-portfolio | $ | 22,013,479 | $ | 22,371,326 | $ | 24,503,192 | $ | (357,847 | ) | $ | (2,489,713 | ) | |||||
Loans held-for-sale: | |||||||||||||||||
Commercial | $ | 33,658 | $ | 2,895 | $ | - | $ | 30,763 | $ | 33,658 | |||||||
Construction | - | 949 | - | (949 | ) | - | |||||||||||
Legacy [1] | 31,823 | - | 1,680 | 31,823 | 30,143 | ||||||||||||
Mortgage | 106,832 | 93,166 | 122,852 | 13,666 | (16,020 | ) | |||||||||||
Consumer | 5,695 | - | - | 5,695 | 5,695 | ||||||||||||
Total loans held-for-sale | $ | 178,008 | $ | 97,010 | $ | 124,532 | $ | 80,998 | $ | 53,476 | |||||||
Total loans | $ | 22,191,487 | $ | 22,468,336 | $ | 24,627,724 | $ | (276,849 | ) | $ | (2,436,237 | ) | |||||
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment. | |||||||||||||||||
Note: Loans from discontinued operations as of September 30,2014 and June 30, 2014 are presented as part of “Assets from discontinued operations” in the Consolidated Statement of Financial Condition. | |||||||||||||||||
Deposits - Ending Balances | |||||||||||||||||
Variance | |||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 |
Q3 2014 vs. |
Q3 2014 vs. |
||||||||||||
Demand deposits [1] | $ | 6,326,220 | $ | 6,412,632 | $ | 6,410,458 | $ | (86,412 | ) | $ | (84,238 | ) | |||||
Savings, NOW and money market deposits (non-brokered) | 10,251,602 | 10,276,715 | 11,335,441 | (25,113 | ) | (1,083,839 | ) | ||||||||||
Savings, NOW and money market deposits (brokered) | 386,573 | 543,032 | 552,053 | (156,459 | ) | (165,480 | ) | ||||||||||
Time deposits (non-brokered) | 5,636,443 | 5,790,324 | 6,181,676 | (153,881 | ) | (545,233 | ) | ||||||||||
Time deposits (brokered CDs) | 1,865,267 | 1,878,449 | 1,915,426 | (13,182 | ) | (50,159 | ) | ||||||||||
Total deposits | $ | 24,466,105 | $ | 24,901,152 | $ | 26,395,054 | $ | (435,047 | ) | $ | (1,928,949 | ) | |||||
[1] Includes interest and non-interest demand bearing deposits. | |||||||||||||||||
Note: Deposits from discontinued operations as of September 30, 2014 and June 30, 2014 are presented as part of “Liabilities from discontinued operations” in the Consolidated Statement of Financial Condition. |
Popular, Inc. | |||||||||||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | |||||||||||||||||||||||||||
Table H - Non-Performing Assets | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Variance | |||||||||||||||||||||||||||
(Dollars in thousands) | 30-Sep-14 |
As a % of |
30-Jun-14 |
As a % of |
30-Sep-13 |
As a % of |
Q3 2014 vs. |
Q3 2014 vs. |
|||||||||||||||||||
Non-accrual loans: | |||||||||||||||||||||||||||
Commercial | $ | 252,331 | 3.1 | % | $ | 278,133 | 3.4 | % | $ | 316,040 | 3.2 | % | $ | (25,802 | ) | $ | (63,709 | ) | |||||||||
Construction | 19,148 | 9.0 | 21,456 | 12.0 | 28,782 | 9.8 | (2,308 | ) | (9,634 | ) | |||||||||||||||||
Legacy [1] | 5,648 | 6.2 | 8,323 | 5.1 | 24,206 | 10.3 | (2,675 | ) | (18,558 | ) | |||||||||||||||||
Lease financing | 3,168 | 0.6 | 2,873 | 0.5 | 3,716 | 0.7 | 295 | (548 | ) | ||||||||||||||||||
Mortgage | 295,125 | 4.5 | 286,320 | 4.3 | 203,208 | 3.1 | 8,805 | 91,917 | |||||||||||||||||||
Consumer | 46,525 | 1.2 | 42,630 | 1.1 | 41,621 | 1.1 | 3,895 | 4,904 | |||||||||||||||||||
Total non-performing loans held-in- portfolio, excluding covered loans [2] |
621,945 | 3.2 | % | 639,735 | 3.3 | % | 617,573 | 2.9 | % | (17,790 | ) | 4,372 | |||||||||||||||
Non-performing loans held-for-sale [3] | 19,728 | 4,426 | 2,099 | 15,302 | 17,629 | ||||||||||||||||||||||
Other real estate owned (“OREO”), excluding covered OREO |
135,256 | 139,420 | 135,502 | (4,164 | ) | (246 | ) | ||||||||||||||||||||
Total non-performing assets, excluding covered assets |
776,929 | 783,581 | 755,174 | (6,652 | ) | 21,755 | |||||||||||||||||||||
Covered loans and OREO | 166,533 | 171,955 | 190,554 | (5,422 | ) | (24,021 | ) | ||||||||||||||||||||
Total non-performing assets | $ | 943,462 | $ | 955,536 | $ | 945,728 | $ | (12,074 | ) | $ | (2,266 | ) | |||||||||||||||
Accruing loans past due 90 days or more [4] | $ | 426,459 | $ | 420,251 | $ | 414,189 | $ | 6,208 | $ | 12,270 | |||||||||||||||||
Ratios excluding covered loans: | |||||||||||||||||||||||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio |
3.21 | % | 3.26 | % | 2.88 | % | |||||||||||||||||||||
Allowance for loan losses to loans held-in-portfolio |
2.69 | 2.68 | 2.46 | ||||||||||||||||||||||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale |
83.88 | 82.26 | 85.19 | ||||||||||||||||||||||||
Ratios including covered loans: | |||||||||||||||||||||||||||
Non-performing assets to total assets | 2.77 | % | 2.61 | % | 2.62 | % | |||||||||||||||||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio |
2.89 | 2.93 | 2.64 | ||||||||||||||||||||||||
Allowance for loan losses to loans held-in-portfolio |
2.78 | 2.79 | 2.62 | ||||||||||||||||||||||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale |
95.96 | 95.28 | 99.53 | ||||||||||||||||||||||||
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment. | |||||||||||||||||||||||||||
[2] Total non-performing loans held-in-portfolio, excluding covered loans, excludes $48 thousand and $9.5 million, respectively, in discontinued operations as of September 30, 2014 and June 30, 2014. | |||||||||||||||||||||||||||
[3] Non-performing loans held-for-sale as of September 30, 2014 consisted of $14.7 million in mortgage loans, $427 thousand in commercial loans and $4.6 million in consumer loans and $10 thousand in legacy loans (June 30, 2014 - $582 thousand in mortgage loans, $3 million in commercial loans and $1 million in construction loans; September 30, 2013 - $1.7 million in legacy loans and $0.4 million in mortgage loans). | |||||||||||||||||||||||||||
[4] It is the Corporation’s policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to nonperforming since the principal repayment is insured. These balances include $125 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of September 30, 2014 (June 30, 2014 - $124 million; September 30, 2013 - $113 million). | |||||||||||||||||||||||||||
Popular, Inc. | ||||||||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | ||||||||||||||||||||||||
Table I - Activity in Non-Performing Loans | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Commercial loans held-in-portfolio: | ||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||
30-Sep-14 | 30-Jun-14 | |||||||||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||||||||
Beginning balance NPLs | $ |
253,552 |
$ | 24,581 | $ |
278,133 |
$ | 245,931 | $ | 60,998 | $ | 306,929 | ||||||||||||
Plus: | ||||||||||||||||||||||||
New non-performing loans | 23,410 | 4,541 | 27,951 | 30,068 | 7,726 | 37,794 | ||||||||||||||||||
Advances on existing non-performing loans | - | - | - | - | 951 | 951 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Non-performing loans transferred to OREO | (2,706 | ) | - | (2,706 | ) | (4,103 | ) | - | (4,103 | ) | ||||||||||||||
Non-performing loans charged-off | (10,085 | ) | (3,103 | ) | (13,188 | ) | (14,377 | ) | (5,470 | ) | (19,847 | ) | ||||||||||||
Loans returned to accrual status / loan collections |
(19,746 |
) | (2,649 | ) |
(22,395 |
) | (3,967 | ) | (15,475 | ) | (19,442 | ) | ||||||||||||
Loans transferred to held-for-sale | - | (22,967 | ) | (22,967 | ) | - | (16,130 | ) | (16,130 | ) | ||||||||||||||
Non-performing loans transferred from (to) discontinued operations |
- | 7,503 | 7,503 | - | (8,019 | ) | (8,019 | ) | ||||||||||||||||
Ending balance NPLs | $ | 244,425 | $ | 7,906 | $ | 252,331 | $ | 253,552 | $ | 24,581 | $ | 278,133 | ||||||||||||
Construction loans held-in-portfolio: | ||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||
30-Sep-14 | 30-Jun-14 | |||||||||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||||||||
Beginning balance NPLs | $ | 21,456 | $ | - | $ | 21,456 | $ | 22,464 | $ | - | $ | 22,464 | ||||||||||||
Plus: | ||||||||||||||||||||||||
New non-performing loans | - | - | - | 952 | - | 952 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Non-performing loans charged-off | (985 | ) | - | (985 | ) | (42 | ) | - | (42 | ) | ||||||||||||||
Loans returned to accrual status / loan collections | (1,323 | ) | - | (1,323 | ) | (1,918 | ) | - | (1,918 | ) | ||||||||||||||
Ending balance NPLs | $ | 19,148 | $ | - | $ | 19,148 | $ | 21,456 | $ | - | $ | 21,456 | ||||||||||||
Mortgage loans held-in-portfolio: | ||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||
30-Sep-14 | 30-Jun-14 | |||||||||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||||||||
Beginning balance NPLs | $ |
262,356 |
$ |
23,964 |
$ |
286,320 |
$ | 229,801 | $ | 22,220 | $ | 252,021 | ||||||||||||
Plus: | ||||||||||||||||||||||||
New non-performing loans | 95,207 | 2,802 | 98,009 | 105,113 | 4,677 | 109,790 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Non-performing loans transferred to OREO | (3,062 | ) | (870 | ) | (3,932 | ) | (2,845 | ) | (661 | ) | (3,506 | ) | ||||||||||||
Non-performing loans charged-off | (11,309 | ) | (395 | ) | (11,704 | ) | (8,266 | ) | (649 | ) | (8,915 | ) | ||||||||||||
Loans returned to accrual status / loan collections |
(53,003 |
) |
(686 |
) |
(53,689 |
) | (61,447 | ) | (1,623 | ) | (63,070 | ) | ||||||||||||
Loans transferred to held-for-sale | - | (13,123 | ) | (13,123 | ) | - | - | - | ||||||||||||||||
Reclassification to consumer loans | (6,756 | ) | - | (6,756 | ) | - | - | - | ||||||||||||||||
Ending balance NPLs | $ | 283,433 | $ | 11,692 | $ | 295,125 | $ | 262,356 | $ | 23,964 | $ | 286,320 | ||||||||||||
Legacy loans held-in-portfolio: | ||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||
30-Sep-14 | 30-Jun-14 | |||||||||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||||||||
Beginning balance NPLs | $ | - | $ | 8,323 | $ | 8,323 | $ | - | $ | 11,608 | $ | 11,608 | ||||||||||||
Plus: | ||||||||||||||||||||||||
New non-performing loans | - | 1,852 | 1,852 | - | 2,201 | 2,201 | ||||||||||||||||||
Advances on existing non-performing loans | - | 149 | 149 | - | 49 | 49 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Non-performing loans transferred to OREO | - | (189 | ) | (189 | ) | - | - | - | ||||||||||||||||
Non-performing loans charged-off | - | (2,109 | ) | (2,109 | ) | - | (816 | ) | (816 | ) | ||||||||||||||
Loans returned to accrual status / loan collections | - | (975 | ) | (975 | ) | - | (2,227 | ) | (2,227 | ) | ||||||||||||||
Loans transferred to held-for-sale | - | (2,529 | ) | (2,529 | ) | - | (1,272 | ) | (1,272 | ) | ||||||||||||||
Non-performing loans transferred from (to) discontinued operations |
- | 1,126 | 1,126 | - | (1,220 | ) | (1,220 | ) | ||||||||||||||||
Ending balance NPLs | $ | - | $ | 5,648 | $ | 5,648 | $ | - | $ | 8,323 | $ | 8,323 |
Total non-performing loans held-in-portfolio (excluding consumer loans): | ||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||
30-Sep-14 | 30-Jun-14 | |||||||||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||||||||
Beginning balance NPLs | $ |
537,364 |
$ |
56,868 |
$ |
594,232 |
$ | 498,196 | $ | 94,826 | $ | 593,022 | ||||||||||||
Plus: | ||||||||||||||||||||||||
New non-performing loans | 118,617 | 9,195 | 127,812 | 136,133 | 14,604 | 150,737 | ||||||||||||||||||
Advances on existing non-performing loans | - | 149 | 149 | - | 1,000 | 1,000 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Non-performing loans transferred to OREO | (5,768 | ) | (1,059 | ) | (6,827 | ) | (6,948 | ) | (661 | ) | (7,609 | ) | ||||||||||||
Non-performing loans charged-off | (22,379 | ) | (5,607 | ) | (27,986 | ) | (22,685 | ) | (6,935 | ) | (29,620 | ) | ||||||||||||
Loans returned to accrual status / loan collections |
(74,072 |
) |
(4,310 |
) |
(78,382 |
) | (67,332 | ) | (19,325 | ) | (86,657 | ) | ||||||||||||
Loans transferred to held-for-sale | - | (38,619 | ) | (38,619 | ) | - | (17,402 | ) | (17,402 | ) | ||||||||||||||
Non-performing loans transferred from (to) discontinued operations |
- | 8,629 | 8,629 | - | (9,239 | ) | (9,239 | ) | ||||||||||||||||
Reclassification to consumer loans | (6,756 | ) | - | (6,756 | ) | - | - | - | ||||||||||||||||
Ending balance NPLs | $ | 547,006 | $ | 25,246 | $ | 572,252 | $ | 537,364 | $ | 56,868 | $ | 594,232 | ||||||||||||
Popular, Inc. | ||||||||||||||||||||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | ||||||||||||||||||||||||||||||||||||
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios | ||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
Quarter ended | Quarter ended | Quarter ended | ||||||||||||||||||||||||||||||||||
30-Sep-14 | 30-Jun-14 | 30-Sep-13 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
Non-covered |
Covered |
Total |
Non-covered |
Covered |
Total |
Non-covered |
Covered |
Total | |||||||||||||||||||||||||||
Balance at beginning of period | $ | 526,246 | $ | 98,665 | $ | 624,911 | $ | 542,575 | $ | 97,773 | $ | 640,348 | $ | 528,762 | $ | 106,457 | $ | 635,219 | ||||||||||||||||||
Provision for loan losses - Continuing operations | 68,166 | 12,463 | 80,629 | 50,074 | 11,604 | 61,678 | 48,715 | 17,433 | 66,148 | |||||||||||||||||||||||||||
Provision for loan losses - Discontinued operations | - | - | - | - | - | - | 6,515 | - | 6,515 | |||||||||||||||||||||||||||
594,412 | 111,128 | 705,540 | 592,649 | 109,377 | 702,026 | 583,992 | 123,890 | 707,882 | ||||||||||||||||||||||||||||
Net loans charged-off (recovered): | ||||||||||||||||||||||||||||||||||||
BPPR | ||||||||||||||||||||||||||||||||||||
Commercial | 1,011 | 16,590 | 17,601 | 9,309 | 5,438 | 14,747 | 16,145 | 2,533 | 18,678 | |||||||||||||||||||||||||||
Construction | (1,237 | ) | 4,066 | 2,829 | (615 | ) | 3,700 | 3,085 | (4,906 | ) | 2,893 | (2,013 | ) | |||||||||||||||||||||||
Lease financing | 1,410 | (1 | ) | 1,409 | 1,144 | 1 | 1,145 | 470 | - | 470 | ||||||||||||||||||||||||||
Mortgage | 13,330 | 1,809 | 15,139 | 9,926 | 2,251 | 12,177 | 11,393 | 1,579 | 12,972 | |||||||||||||||||||||||||||
Consumer | 24,168 | (1,024 | ) | 23,144 | 23,571 | (678 | ) | 22,893 | 21,576 | 57 | 21,633 | |||||||||||||||||||||||||
Total BPPR | 38,682 | 21,440 | 60,122 | 43,335 | 10,712 | 54,047 | 44,678 | 7,062 | 51,740 | |||||||||||||||||||||||||||
BPNA | ||||||||||||||||||||||||||||||||||||
Commercial | (893 | ) | - | (893 | ) | 910 | - | 910 | (484 | ) | - | (484 | ) | |||||||||||||||||||||||
Construction | (59 | ) | - | (59 | ) | - | - | - | - | - | - | |||||||||||||||||||||||||
Legacy [1] | 221 | - | 221 | (1,205 | ) | - | (1,205 | ) | 2,319 | - | 2,319 | |||||||||||||||||||||||||
Mortgage | 26 | - | 26 | 393 | - | 393 | 1,335 | - | 1,335 | |||||||||||||||||||||||||||
Consumer | 2,492 | - | 2,492 | 2,768 | - | 2,768 | 4,013 | - | 4,013 | |||||||||||||||||||||||||||
Discontinued operations | - | - | - | - | - | - | 6,031 | - | 6,031 | |||||||||||||||||||||||||||
Total BPNA | 1,787 | - | 1,787 | 2,866 | - | 2,866 | 13,214 | - | 13,214 | |||||||||||||||||||||||||||
Total loans charged-off (recovered) - Popular, Inc. | 40,469 | 21,440 | 61,909 | 46,201 | 10,712 | 56,913 | 57,892 | 7,062 | 64,954 | |||||||||||||||||||||||||||
Net write-downs | (32,256 | ) | - | (32,256 | ) | - | - | - | - | - | - | |||||||||||||||||||||||||
Net write-downs related to loans transferred to discontinued operations | - | - | - | (20,202 | ) | - | (20,202 | ) | - | - | - | |||||||||||||||||||||||||
Balance at end of period | $ | 521,687 | $ | 89,688 | $ | 611,375 | $ | 526,246 | $ | 98,665 | $ | 624,911 | $ | 526,100 | $ | 116,828 | $ | 642,928 | ||||||||||||||||||
POPULAR, INC. | ||||||||||||||||||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 0.83 | % | 1.12 | % | 0.94 | % | 1.01 | % | 1.08 | % | 1.06 | % | ||||||||||||||||||||||||
Provision for loan losses to net charge-offs [2] | 1.39 | x | 1.11 | x | 1.08 | x | 1.08 | x | 0.95 | x | 1.12 | x | ||||||||||||||||||||||||
BPPR | ||||||||||||||||||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 0.98 | % | 1.30 | % | 1.09 | % | 1.16 | % | 1.15 | % | 1.11 | % | ||||||||||||||||||||||||
Provision for loan losses to net charge-offs [2] |
1.60 |
x |
1.24 |
x | 1.73 | x | 1.60 | x | 1.13 | x | 1.31 | x | ||||||||||||||||||||||||
BPNA | ||||||||||||||||||||||||||||||||||||
Annualized net charge-offs (recoveries) to average loans held-in-portfolio | 0.19 | % | 0.30 | % | 0.91 | % | ||||||||||||||||||||||||||||||
Provision for loan losses to net charge-offs | N.M. | N.M. | 0.36 | x | ||||||||||||||||||||||||||||||||
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment. | ||||||||||||||||||||||||||||||||||||
[2] Excluding provision for loan losses and net write-down related to the BPNA legacy and classified asset sales during the quarter ended September 30, 2014. |
||||||||||||||||||||||||||||||||||||
N.M. - Not meaningful. | ||||||||||||||||||||||||||||||||||||
Popular, Inc. | ||||||||||||||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | ||||||||||||||||||||||||||||||
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy [3] | Mortgage |
Lease |
Consumer | Total | [2] | ||||||||||||||||||||||
Specific ALLL | $ | 64,750 | $ | 133 | $ | - | $ | 38,207 | $ | 698 | $ | 28,166 | $ | 131,954 | ||||||||||||||||
Impaired loans | [1] | $ | 373,501 | $ | 18,894 | $ | 2,311 | $ | 431,806 | $ | 2,709 | $ | 116,830 | $ | 946,051 | |||||||||||||||
Specific ALLL to impaired loans | [1] | 17.34 | % | 0.70 | % | - | % | 8.85 | % | 25.77 | % | 24.11 | % | 13.95 | % | |||||||||||||||
General ALLL | $ | 151,681 | $ | 6,375 | $ | 4,001 | $ | 83,314 | $ | 6,673 | $ | 137,689 | $ | 389,733 | ||||||||||||||||
Loans held-in-portfolio, excluding impaired loans | [1] | $ | 7,685,213 | $ | 192,956 | $ | 88,704 | $ | 6,123,531 | $ | 547,805 | $ | 3,774,956 | $ | 18,413,165 | |||||||||||||||
General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 1.97 | % | 3.30 | % | 4.51 | % | 1.36 | % | 1.22 | % | 3.65 | % | 2.12 | % | |||||||||||||||
Total ALLL | $ | 216,431 | $ | 6,508 | $ | 4,001 | $ | 121,521 | $ | 7,371 | $ | 165,855 | $ | 521,687 | ||||||||||||||||
Total non-covered loans held-in-portfolio | [1] | $ | 8,058,714 | $ | 211,850 | $ | 91,015 | $ | 6,555,337 | $ | 550,514 | $ | 3,891,786 | $ | 19,359,216 | |||||||||||||||
ALLL to loans held-in-portfolio | [1] | 2.69 | % | 3.07 | % | 4.40 | % | 1.85 | % |
1.34 |
% | 4.26 | % | 2.69 | % | |||||||||||||||
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. | ||||||||||||||||||||||||||||||
[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of September 30, 2014 the general allowance on the covered loans amounted to $89.7 million, while the specific reserve amounted to $4 thousand. | ||||||||||||||||||||||||||||||
[3] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment. | ||||||||||||||||||||||||||||||
30-Jun-14 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy [3] | Mortgage |
Lease |
Consumer | Total | [2] | ||||||||||||||||||||||
Specific ALLL | $ | 36,597 | $ | 883 | $ | - | $ | 53,815 | $ | 688 | $ | 29,043 | $ | 121,026 | ||||||||||||||||
Impaired loans | [1] | $ | 317,746 | $ | 21,094 | $ | 2,536 | $ | 466,243 | $ | 2,653 | $ | 122,106 | $ | 932,378 | |||||||||||||||
Specific ALLL to impaired loans | [1] | 11.52 | % | 4.19 | % | - | % | 11.54 | % | 25.93 | % | 23.79 | % | 12.98 | % | |||||||||||||||
General ALLL | $ | 165,912 | $ | 4,459 | $ | 9,343 | $ | 84,113 | $ | 5,271 | $ | 136,122 | $ | 405,220 | ||||||||||||||||
Loans held-in-portfolio, excluding impaired loans | [1] | $ | 7,837,801 | $ | 157,965 | $ | 160,405 | $ | 6,198,205 | $ | 544,215 | $ | 3,804,255 | $ | 18,702,846 | |||||||||||||||
General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 2.12 | % | 2.82 | % | 5.82 | % | 1.36 | % | 0.97 | % | 3.58 | % | 2.17 | % | |||||||||||||||
Total ALLL | $ | 202,509 | $ | 5,342 | $ | 9,343 | $ | 137,928 | $ | 5,959 | $ | 165,165 | $ | 526,246 | ||||||||||||||||
Total non-covered loans held-in-portfolio | [1] | $ | 8,155,547 | $ | 179,059 | $ | 162,941 | $ | 6,664,448 | $ | 546,868 | $ | 3,926,361 | $ | 19,635,224 | |||||||||||||||
ALLL to loans held-in-portfolio | [1] | 2.48 | % | 2.98 | % | 5.73 | % | 2.07 | % | 1.09 | % | 4.21 | % | 2.68 | % | |||||||||||||||
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. | ||||||||||||||||||||||||||||||
[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of June 30, 2014 the general allowance on the covered loans amounted to $98.7 million, while the specific reserve amounted to $8 thousand. | ||||||||||||||||||||||||||||||
[3] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment. |
Variance | |||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy | Mortgage | Lease financing | Consumer | Total | ||||||||||||||||||||
Specific ALLL | $ | 28,153 | $ | (750 | ) | $ | - | $ | (15,608 | ) | $ | 10 | $ | (877 | ) | $ | 10,928 | ||||||||||
Impaired loans | $ | 55,755 | $ | (2,200 | ) | $ | (225 | ) | $ | (34,437 | ) | $ | 56 | $ | (5,276 | ) | $ | 13,673 | |||||||||
General ALLL | $ | (14,231 | ) | $ | 1,916 | $ | (5,342 | ) | $ | (799 | ) | $ | 1,402 | $ | 1,567 | $ | (15,487 | ) | |||||||||
Loans held-in-portfolio, excluding impaired loans | $ | (152,588 | ) | $ | 34,991 | $ | (71,701 | ) | $ | (74,674 | ) | $ | 3,590 | $ | (29,299 | ) | $ | (289,681 | ) | ||||||||
Total ALLL | $ | 13,922 | $ | 1,166 | $ | (5,342 | ) | $ | (16,407 | ) | $ | 1,412 | $ | 690 | $ | (4,559 | ) | ||||||||||
Total non-covered loans held-in-portfolio | $ | (96,833 | ) | $ | 32,791 | $ | (71,926 | ) | $ | (109,111 | ) | $ | 3,646 | $ | (34,575 | ) | $ | (276,008 | ) | ||||||||
Popular, Inc. | |||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | |||||||||||||||||||
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
30-Sep-14 | |||||||||||||||||||
Puerto Rico | |||||||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | |||||||||||||
Allowance for credit losses: | |||||||||||||||||||
Specific ALLL non-covered loans | $ | 64,750 | $ | 133 | $ | 37,491 | $ | 698 | $ | 27,723 | $ | 130,795 | |||||||
General ALLL non-covered loans | 140,906 | 5,534 | 81,728 | 6,673 | 123,816 | 358,657 | |||||||||||||
ALLL - non-covered loans | 205,656 | 5,667 | 119,219 | 7,371 | 151,539 | 489,452 | |||||||||||||
Specific ALLL covered loans | 4 | - | - | - | - | 4 | |||||||||||||
General ALLL covered loans | 36,411 | 7,193 | 42,524 | - | 3,556 | 89,684 | |||||||||||||
ALLL - covered loans | 36,415 | 7,193 | 42,524 | - | 3,556 | 89,688 | |||||||||||||
Total ALLL | $ | 242,071 | $ | 12,860 | $ | 161,743 | $ | 7,371 | $ | 155,095 | $ | 579,140 | |||||||
Loans held-in-portfolio: | |||||||||||||||||||
Impaired non-covered loans | $ | 373,049 | $ | 18,894 | $ | 424,336 | $ | 2,709 | $ | 114,850 | $ | 933,838 | |||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 5,896,673 | 129,889 | 5,028,786 | 547,805 | 3,286,492 | 14,889,645 | |||||||||||||
Non-covered loans held-in-portfolio | 6,269,722 | 148,783 | 5,453,122 | 550,514 | 3,401,342 | 15,823,483 | |||||||||||||
Impaired covered loans | 2,765 | 2,419 | - | - | - | 5,184 | |||||||||||||
Covered loans held-in-portfolio, excluding impaired loans | 1,693,886 | 72,049 | 846,472 | - | 36,672 | 2,649,079 | |||||||||||||
Covered loans held-in-portfolio | 1,696,651 | 74,468 | 846,472 | - | 36,672 | 2,654,263 | |||||||||||||
Total loans held-in-portfolio | $ | 7,966,373 | $ | 223,251 | $ | 6,299,594 | $ | 550,514 | $ | 3,438,014 | $ | 18,477,746 |
30-Jun-14 | |||||||||||||||||||||||
Puerto Rico | |||||||||||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | |||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||
Specific ALLL non-covered loans | $ | 36,597 | $ | 883 | $ | 39,341 | $ | 688 | $ | 28,458 | $ | 105,967 | |||||||||||
General ALLL non-covered loans | 147,638 | 4,308 | 81,058 | 5,271 | 122,024 | 360,299 | |||||||||||||||||
ALLL - non-covered loans | 184,235 | 5,191 | 120,399 | 5,959 | 150,482 | 466,266 | |||||||||||||||||
Specific ALLL covered loans | 8 | - | - | - | - | 8 | |||||||||||||||||
General ALLL covered loans | 46,685 | 8,996 | 38,941 | - | 4,035 | 98,657 | |||||||||||||||||
ALLL - covered loans | 46,693 | 8,996 | 38,941 | - | 4,035 | 98,665 | |||||||||||||||||
Total ALLL | $ | 230,928 | $ | 14,187 | $ | 159,340 | $ | 5,959 | $ | 154,517 | $ | 564,931 | |||||||||||
Loans held-in-portfolio: | |||||||||||||||||||||||
Impaired non-covered loans | $ | 307,762 | $ | 21,094 | $ | 414,636 | $ | 2,653 | $ | 119,604 | $ | 865,749 | |||||||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 5,991,218 | 114,589 | 5,043,936 | 544,215 | 3,296,245 | 14,990,203 | |||||||||||||||||
Non-covered loans held-in-portfolio | 6,298,980 | 135,683 | 5,458,572 | 546,868 | 3,415,849 | 15,855,952 | |||||||||||||||||
Impaired covered loans | 2,823 | 2,419 | - | - | - | 5,242 | |||||||||||||||||
Covered loans held-in-portfolio, excluding impaired loans | 1,743,144 | 80,344 | 867,075 | - | 40,297 | 2,730,860 | |||||||||||||||||
Covered loans held-in-portfolio | 1,745,967 | 82,763 | 867,075 | - | 40,297 | 2,736,102 | |||||||||||||||||
Total loans held-in-portfolio | $ | 8,044,947 | $ | 218,446 | $ | 6,325,647 | $ | 546,868 | $ | 3,456,146 | $ | 18,592,054 | |||||||||||
Variance | |||||||||||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | |||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||
Specific ALLL non-covered loans | $ | 28,153 | $ | (750 | ) | $ | (1,850 | ) | $ | 10 | $ | (735 | ) | $ | 24,828 | ||||||||
General ALLL non-covered loans | (6,732 | ) | 1,226 | 670 | 1,402 | 1,792 | (1,642 | ) | |||||||||||||||
ALLL - non-covered loans | 21,421 | 476 | (1,180 | ) | 1,412 | 1,057 | 23,186 | ||||||||||||||||
Specific ALLL covered loans | (4 | ) | - | - | - | - | (4 | ) | |||||||||||||||
General ALLL covered loans | (10,274 | ) | (1,803 | ) | 3,583 | - | (479 | ) | (8,973 | ) | |||||||||||||
ALLL - covered loans | (10,278 | ) | (1,803 | ) | 3,583 | - | (479 | ) | (8,977 | ) | |||||||||||||
Total ALLL | $ | 11,143 | $ | (1,327 | ) | $ | 2,403 | $ | 1,412 | $ | 578 | $ | 14,209 | ||||||||||
Loans held-in-portfolio: | |||||||||||||||||||||||
Impaired non-covered loans | $ | 65,287 | $ | (2,200 | ) | $ | 9,700 | $ | 56 | $ | (4,754 | ) | $ | 68,089 | |||||||||
Non-covered loans held-in-portfolio, excluding impaired loans | (94,545 | ) | 15,300 | (15,150 | ) | 3,590 | (9,753 | ) | (100,558 | ) | |||||||||||||
Non-covered loans held-in-portfolio | (29,258 | ) | 13,100 | (5,450 | ) | 3,646 | (14,507 | ) | (32,469 | ) | |||||||||||||
Impaired covered loans | (58 | ) | - | - | - | - | (58 | ) | |||||||||||||||
Covered loans held-in-portfolio, excluding impaired loans | (49,258 | ) | (8,295 | ) | (20,603 | ) | - | (3,625 | ) | (81,781 | ) | ||||||||||||
Covered loans held-in-portfolio | (49,316 | ) | (8,295 | ) | (20,603 | ) | - | (3,625 | ) | (81,839 | ) | ||||||||||||
Total loans held-in-portfolio | $ | (78,574 | ) | $ | 4,805 | $ | (26,053 | ) | $ | 3,646 | $ | (18,132 | ) | $ | (114,308 | ) |
Popular, Inc. | |||||||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | |||||||||||||||||||||||
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
30-Sep-14 | |||||||||||||||||||||||
U.S. Mainland | |||||||||||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||
Specific ALLL | $ | - | $ | - | $ | - | $ | 716 | $ | 443 | $ | 1,159 | |||||||||||
General ALLL | 10,775 | 841 | 4,001 | 1,586 | 13,873 | 31,076 | |||||||||||||||||
Total ALLL | $ | 10,775 | $ | 841 | $ | 4,001 | $ | 2,302 | $ | 14,316 | $ | 32,235 | |||||||||||
Loans held-in-portfolio: | |||||||||||||||||||||||
Impaired loans | $ | 452 | $ | - | $ | 2,311 | $ | 7,470 | $ | 1,980 | $ | 12,213 | |||||||||||
Loans held-in-portfolio, excluding impaired loans | 1,788,540 | 63,067 | 88,704 | 1,094,745 | 488,464 | 3,523,520 | |||||||||||||||||
Total loans held-in-portfolio | $ | 1,788,992 | $ | 63,067 | $ | 91,015 | $ | 1,102,215 | $ | 490,444 | $ | 3,535,733 | |||||||||||
30-Jun-14 | |||||||||||||||||||||||
U.S. Mainland | |||||||||||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||
Specific ALLL | $ | - | $ | - | $ | - | $ | 14,474 | $ | 585 | $ | 15,059 | |||||||||||
General ALLL | 18,274 | 151 | 9,343 | 3,055 | 14,098 | 44,921 | |||||||||||||||||
Total ALLL | $ | 18,274 | $ | 151 | $ | 9,343 | $ | 17,529 | $ | 14,683 | $ | 59,980 | |||||||||||
Loans held-in-portfolio: | |||||||||||||||||||||||
Impaired loans | $ | 9,984 | $ | - | $ | 2,536 | $ | 51,607 | $ | 2,502 | $ | 66,629 | |||||||||||
Loans held-in-portfolio, excluding impaired loans | 1,846,583 | 43,376 | 160,405 | 1,154,269 | 508,010 | 3,712,643 | |||||||||||||||||
Total loans held-in-portfolio | $ | 1,856,567 | $ | 43,376 | $ | 162,941 | $ | 1,205,876 | $ | 510,512 | $ | 3,779,272 | |||||||||||
Variance | |||||||||||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||
Specific ALLL | $ | - | $ | - | $ | - | $ | (13,758 | ) | $ | (142 | ) | $ | (13,900 | ) | ||||||||
General ALLL | (7,499 | ) | 690 | (5,342 | ) | (1,469 | ) | (225 | ) | (13,845 | ) | ||||||||||||
Total ALLL | $ | (7,499 | ) | $ | 690 | $ | (5,342 | ) | $ | (15,227 | ) | $ | (367 | ) | $ | (27,745 | ) | ||||||
Loans held-in-portfolio: | |||||||||||||||||||||||
Impaired loans | $ | (9,532 | ) | $ | - | $ | (225 | ) | $ | (44,137 | ) | $ | (522 | ) | $ | (54,416 | ) | ||||||
Loans held-in-portfolio, excluding impaired loans | (58,043 | ) | 19,691 | (71,701 | ) | (59,524 | ) | (19,546 | ) | (189,123 | ) | ||||||||||||
Total loans held-in-portfolio | $ | (67,575 | ) | $ | 19,691 | $ | (71,926 | ) | $ | (103,661 | ) | $ | (20,068 | ) | $ | (243,539 | ) | ||||||
Popular, Inc. | |||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | |||||||||||||
Table N - Reconciliation to GAAP Financial Measures | |||||||||||||
(Unaudited) | |||||||||||||
(In thousands, except share or per share information) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | ||||||||||
Total stockholders’ equity | $ | 4,298,392 | $ | 4,260,441 | $ | 4,393,885 | |||||||
Less: Preferred stock | (50,160 | ) | (50,160 | ) | (50,160 | ) | |||||||
Less: Goodwill | (461,246 | ) | (461,246 | ) | (647,757 | ) | |||||||
Less: Other intangibles | (37,777 | ) | (40,122 | ) | (46,892 | ) | |||||||
Total tangible common equity | $ | 3,749,209 | $ | 3,708,913 | $ | 3,649,076 | |||||||
Total assets | $ | 34,099,095 | $ | 36,587,902 | $ | 36,052,116 | |||||||
Less: Goodwill | (461,246 | ) | (461,246 | ) | (647,757 | ) | |||||||
Less: Other intangibles | (37,777 | ) | (40,122 | ) | (46,892 | ) | |||||||
Total tangible assets | $ | 33,600,072 | $ | 36,086,534 | $ | 35,357,467 | |||||||
Tangible common equity to tangible assets | 11.16 | % | 10.28 | % | 10.32 | % | |||||||
Common shares outstanding at end of period | 103,448,206 | 103,472,979 | 103,327,146 | ||||||||||
Tangible book value per common share | $ | 36.24 | $ | 35.84 | $ | 35.32 | |||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | ||||||||||
Common stockholders’ equity | $ | 4,248,232 | $ | 4,210,281 | $ | 4,343,725 | |||||||
Less: Unrealized losses (gains) on available-for-sale securities, net of tax[1] | 16,787 | (4,071 | ) | 5,514 | |||||||||
Less: Disallowed deferred tax assets[2] | (618,141 | ) | (636,081 | ) | (643,716 | ) | |||||||
Less: Disallowed goodwill and other intangible assets, net of deferred tax liability | (444,759 | ) | (447,182 | ) | (646,464 | ) | |||||||
Less: Aggregate adjusted carrying value of all non-financial equity investments | (1,462 | ) | (1,381 | ) | (1,398 | ) | |||||||
Add: Adjustment of pension and postretirement benefit plans and unrealized gains | |||||||||||||
(losses) on cash flow hedges, net of tax[3] | 102,279 | 103,263 | 216,274 | ||||||||||
Total Tier 1 common equity | $ | 3,302,936 | $ | 3,224,829 | $ | 3,273,935 | |||||||
Tier 1 common equity to risk-weighted assets | 14.79 | % | 13.51 | % | 14.20 | % | |||||||
[1] In accordance with regulatory risk-based capital guidelines, Tier 1 capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values. In arriving at Tier 1 capital, institutions are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax. | |||||||||||||
[2] Approximately $147 million of the Corporation’s $758 million of net deferred tax assets included as “Other assets” in the consolidated statement of financial condition at September 30, 2014 (June 30, 2014 - $159 million and $789 million, respectively; September 30, 2013 - $160 million and $844 million, respectively), were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $618 million of such assets at September 30, 2014 (June 30, 2014 - $636 million; September 30, 2013 - $644 million) exceeded the limitation imposed by these guidelines and, as “disallowed deferred tax assets”, were deducted in arriving at Tier 1 capital. The remaining $(7) million of the Corporation’s other net deferred tax assets at September 30, 2014 (June 30, 2014 - $(6) million; September 30, 2013 - $40 million) represented primarily the following items: (a) the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines; (b) the deferred tax asset corresponding to the pension liability adjustment recorded as part of accumulated other comprehensive income; and (c) the deferred tax liabilities associated with goodwill and other intangibles. |
|||||||||||||
[3] The Federal Reserve Bank has granted interim capital relief for the impact of pension liability adjustment. | |||||||||||||
Popular, Inc. | ||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | ||||||||||||
Table O - Financial Information - Westernbank Covered Loans | ||||||||||||
(Unaudited) | ||||||||||||
Revenues | ||||||||||||
Quarters ended | ||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | Variance | |||||||||
Interest income on covered loans | $ | 68,251 | $ | 82,975 | $ | (14,724 | ) | |||||
FDIC loss share expense: | ||||||||||||
Amortization of indemnification asset | (42,524 | ) | (72,095 | ) | 29,571 | |||||||
Reversal of accelerated amortization in prior periods | 15,046 | - | 15,046 | |||||||||
80% mirror accounting on credit impairment losses [1] | 9,863 | 10,372 | (509 | ) | ||||||||
80% mirror accounting on reimbursable expenses | 15,545 | 11,085 | 4,460 | |||||||||
80% mirror accounting on recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC |
(2,633 | ) | (3,557 | ) | 924 | |||||||
Change in true-up payment obligation | 1,078 | (1,206 | ) | 2,284 | ||||||||
Other | (1,239 | ) | 140 | (1,379 | ) | |||||||
Total FDIC loss share expense | (4,864 | ) | (55,261 | ) | 50,397 | |||||||
Total revenues | 63,387 | 27,714 | 35,673 | |||||||||
Provision for loan losses | 12,463 | 11,604 | 859 | |||||||||
Total revenues less provision for loan losses | $ | 50,924 | $ | 16,110 | $ | 34,814 | ||||||
[1]Reductions in expected cash flows for ASC 310-30 loans, which may impact the provision for loan losses, may consider reductions in both principal and interest cash flow expectations. The amount covered under the FDIC loss sharing agreements for interest not collected from borrowers is limited under the agreements (approximately 90 days); accordingly, these amounts are not subject fully to the 80% mirror accounting. | ||||||||||||
Non-personnel operating expenses | ||||||||||||
Quarters ended | ||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | Variance | |||||||||
Professional fees | $ | 5,164 | $ | 4,726 | $ | 438 | ||||||
OREO expenses | 11,661 | 5,249 | 6,412 | |||||||||
Other operating expenses | 3,160 | 2,868 | 292 | |||||||||
Total operating expenses | $ | 19,985 | $ | 12,843 | $ | 7,142 | ||||||
Expense reimbursements from the FDIC may be recorded with a time lag, since these are claimed upon the event of loss or charge-off of the loans which may occur in a subsequent period. | ||||||||||||
Quarterly average assets | ||||||||||||
Quarters ended | ||||||||||||
(In millions) | 30-Sep-14 | 30-Jun-14 | Variance | |||||||||
Covered loans | $ | 2,727 | $ | 2,811 | $ | (84 | ) | |||||
FDIC loss share asset | 687 | 792 | (105 | ) |
Activity in the carrying amount and accretable yield of covered loans accounted for under ASC 310-30 | ||||||||||||||||
Quarters ended | ||||||||||||||||
30-Sep-14 | 30-Jun-14 | |||||||||||||||
(In thousands) | Accretable yield | Carrying amount of loans | Accretable yield | Carrying amount of loans | ||||||||||||
Beginning balance | $ | 1,280,758 | $ | 2,610,664 | $ | 1,218,212 | $ | 2,733,122 | ||||||||
Accretion | (66,017 | ) | 66,017 | (79,863 | ) | 79,863 | ||||||||||
Changes in expected cash flows | 97,780 | - | 142,409 | - | ||||||||||||
Collections / charge-offs | - | (148,248 | ) | - | (202,321 | ) | ||||||||||
Ending balance | 1,312,521 | 2,528,433 | 1,280,758 | 2,610,664 | ||||||||||||
Allowance for loan losses - ASC 310-30 covered loans | - | (85,640 | ) | - | (90,892 | ) | ||||||||||
Ending balance, net of allowance for loan losses | $ | 1,312,521 | $ | 2,442,793 | $ | 1,280,758 | $ | 2,519,772 | ||||||||
Activity in the carrying amount of the FDIC indemnity asset | ||||||||||||||||
Quarters ended | ||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | ||||||||||||||
Balance at beginning of period | $ | 751,553 | $ | 833,721 | ||||||||||||
Amortization | (42,524 | ) | (72,095 | ) | ||||||||||||
Reversal of accelerated amortization in prior periods | 15,046 | - | ||||||||||||||
Credit impairment losses to be covered under loss sharing agreements | 9,863 | 10,372 | ||||||||||||||
Reimbursable expenses to be covered under loss sharing agreements | 15,545 | 11,085 | ||||||||||||||
Net payments to (from) FDIC under loss sharing agreements | (73,106 | ) | (31,530 | ) | ||||||||||||
Other adjustments attributable to FDIC loss sharing agreements | 4,729 | - | ||||||||||||||
Balance at end of period | $ | 681,106 | $ | 751,553 | ||||||||||||
Activity in the remaining FDIC loss share asset amortization | ||||||||||||||||
Quarters ended | ||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | ||||||||||||||
Balance at beginning of period | $ | 105,939 | $ | 71,634 | ||||||||||||
Amortization | (42,524 | ) | (72,095 | ) | ||||||||||||
Impact of lower projected losses | 3,147 | 106,400 | ||||||||||||||
Balance at end of period | $ | 66,562 | $ | 105,939 | ||||||||||||
POPULAR, INC. | |||||||||||||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | |||||||||||||||||||
Table P - Financial Information from Discontinued Operations | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Assets and Liabilities from Discontinued Operations | |||||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | Variance | ||||||||||||||||
Cash | $ | 9,500 | $ | 18,923 | $ | (9,423 | ) | ||||||||||||
Loans held-for-sale | 1,099,673 | 1,783,998 | (684,325 | ) | |||||||||||||||
Premises and equipment, net | 8,596 | 17,553 | (8,957 | ) | |||||||||||||||
Other assets | 11,284 | 7,908 | 3,376 | ||||||||||||||||
Total assets | $ | 1,129,053 | $ | 1,828,382 | $ | (699,329 | ) | ||||||||||||
Deposits | $ | 1,089,046 | $ | 2,058,309 | $ | (969,263 | ) | ||||||||||||
Short-term borrowings | - | 2,998 | (2,998 | ) | |||||||||||||||
Other liabilities | 17,716 | 18,435 | (719 | ) | |||||||||||||||
Total liabilities | $ | 1,106,762 | $ | 2,079,742 | $ | (972,980 | ) | ||||||||||||
Net assets (liabilities) | $ | 22,291 | $ | (251,360 | ) | $ | 273,651 | ||||||||||||
Components of Net Income (Loss) from Discontinued Operations | |||||||||||||||||||
Quarters ended | Nine months ended | ||||||||||||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | 30-Sep-13 | 30-Sep-14 | 30-Sep-13 | ||||||||||||||
Net interest income | $ | 16,022 | $ | 19,092 | $ | 23,195 | $ | 56,911 | $ | 66,172 | |||||||||
Provision (reversal) for loan losses | - | - | 6,515 | (6,764 | ) | (1,345 | ) | ||||||||||||
Gain on sale of regions | 25,775 | - | - | 25,775 | - | ||||||||||||||
Other non-interest income | 6,567 | 9,388 | 5,250 | 26,488 | 13,642 | ||||||||||||||
Personnel costs | 11,941 | 12,117 | 8,487 | 32,910 | 25,215 | ||||||||||||||
Net occupancy expenses | (1,305 | ) | 2,845 | 3,325 | 5,871 | 9,355 | |||||||||||||
Professional fees | 4,916 | 5,903 | 2,802 | 13,612 | 8,511 | ||||||||||||||
Goodwill impairment charge | - | 186,511 | - | 186,511 | - | ||||||||||||||
Other operating expenses | 3,054 | 2,833 | 3,694 | 9,100 | 9,422 | ||||||||||||||
Net income (loss) from discontinued operations | $ | 29,758 | $ | (181,729 | ) | $ | 3,622 | $ | (132,066 | ) | $ | 28,656 | |||||||
POPULAR, INC. | |||||||||
Financial Supplement to Third Quarter 2014 Earnings Release | |||||||||
Table Q - Restructuring Charges | |||||||||
(Unaudited) | |||||||||
Restructuring Charges | |||||||||
Quarters ended | |||||||||
(In thousands) | 30-Sep-14 | 30-Jun-14 | Variance | ||||||
Personnel costs | $ | 6,194 | $ | 3,630 | $ | 2,564 | |||
Net occupancy expenses | 152 | 271 | (119 | ) | |||||
Equipment expenses | 141 | 190 | (49 | ) | |||||
Professional fees | 1,431 | 448 | 983 | ||||||
Communications | 14 | - | 14 | ||||||
Other operating expenses | 358 | 35 | 323 | ||||||
Total restructuring costs | $ | 8,290 | $ | 4,574 | $ | 3,716 |
CONTACT:
Popular, Inc.
Investor Relations:
Brett
Scheiner, 212-417-6721
Investor Relations Officer
or
Media
Relations:
Teruca Rullán, 787-281-5170
Mobile:
917-679-3596
Senior Vice President, Corporate Communications