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):
January
22, 2015
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) |
(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 or former address, 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:4
⃞
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 January 22, 2015 Popular, Inc. issued a news release announcing its unaudited financial results for the quarter ended December 31, 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 January 22, 2015
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: |
January 22, 2015 |
|
By: /s/ Jorge J. García |
Jorge J. García |
|||
Senior Vice President and Corporate Comptroller |
Exhibit 99.1
Popular, Inc. Announces Fourth Quarter Financial Results
SAN JUAN, Puerto Rico--(BUSINESS WIRE)--January 22, 2015--Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $52.9 million for the quarter. Net income for continued operations of $43.8 million and adjusted net income of $80.8 million for the quarter ended December 31, 2014, compared to net income from continuing operations of $32.8 million and adjusted net income of $81.7 million for the quarter ended September 30, 2014.
Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said, "While there were a number of significant transactions that impacted these results, we are satisfied that our top line remains strong and our credit metrics continue to head in the right direction in spite of the challenging economic conditions in our principal market. The sale of our California operations in the period caps a transformational year for the Corporation which included the restructuring of our US operations and the repayment of our TARP funds without issuing additional equity. We continue to focus on improving our operational and financial metrics and are well positioned for an eventual improvement in the Puerto Rico economy."
Earnings Highlights | ||||||||||||||||||||
(Unaudited) | Quarters ended | Years ended | ||||||||||||||||||
(Dollars in thousands, except per share information) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | 31-Dec-14 | 31-Dec-13 | |||||||||||||||
Net interest income | $ | 326,861 | $ | 326,421 | $ | 354,507 | $ | 945,072 | $ | 1,344,574 | ||||||||||
Provision for loan losses – non-covered loans | 51,637 | 68,166 | 49,927 | 223,999 | 536,710 | |||||||||||||||
Provision (reversal of provision) for loan losses – covered loans [1] | (3,646 | ) | 12,463 | 8,907 | 46,135 | 69,396 | ||||||||||||||
Net interest income after provision for loan losses | 278,870 | 245,792 | 295,673 | 674,938 | 738,468 | |||||||||||||||
FDIC loss share expense | (18,693 | ) | (4,864 | ) | (37,164 | ) | (103,024 | ) | (82,051 | ) | ||||||||||
Other non-interest income | 128,588 | 129,194 | 222,440 | 496,070 | 873,064 | |||||||||||||||
Operating expenses | 330,006 | 310,640 | 304,609 | 1,193,684 | 1,221,990 | |||||||||||||||
Income (loss) from continuing operations before income tax | 58,759 | 59,482 | 176,340 | (125,700 | ) | 307,491 | ||||||||||||||
Income tax expense (benefit) | 14,995 | 26,667 | 25,162 | 60,802 | (251,327 | ) | ||||||||||||||
Income (loss) from continuing operations | $ | 43,764 | $ | 32,815 | $ | 151,178 | $ | (186,502 | ) | $ | 558,818 | |||||||||
Income (loss) from discontinued operations, net of tax | $ | 9,086 | $ | 29,758 | $ | 11,853 | $ | (122,980 | ) | $ | 40,509 | |||||||||
Net income (loss) | $ | 52,850 | $ | 62,573 | $ | 163,031 | $ | (309,482 | ) | $ | 599,327 | |||||||||
Net income (loss) applicable to common stock | $ | 51,919 | $ | 61,643 | $ | 162,100 | $ | (313,205 | ) | $ | 595,604 | |||||||||
Net income (loss) per common share from continuing operations - Basic | $ | 0.41 | $ | 0.31 | $ | 1.46 | $ | (1.85 | ) | $ | 5.41 | |||||||||
Net income (loss) per common share from continuing operations - Diluted | $ | 0.41 | $ | 0.31 | $ | 1.46 | $ | (1.85 | ) | $ | 5.39 | |||||||||
Net income (loss) per common share from discontinued operations - Basic | $ | 0.09 | $ | 0.29 | $ | 0.12 | $ | (1.20 | ) | $ | 0.39 | |||||||||
Net income (loss) per common share from discontinued operations - Diluted | $ | 0.09 | $ | 0.29 | $ | 0.11 | $ | (1.20 | ) | $ | 0.39 | |||||||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. | ||||||||||||||||||||
Significant events
The Corporation continues its strategy of relocating certain back office operations of BPNA to Puerto Rico and New York. The Corporation incurred $13.9 million in restructuring charges during the fourth quarter of 2014 and a total of $26.7 million during the year ended December 31, 2014. Additional restructuring charges amounting to approximately $22.0 million are expected to be incurred in the year 2015, comprised of $13.0 million in personnel related costs and $9.0 million in lease cancelations and other restructuring costs.
During the third quarter of 2014, the Corporation 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. As previously disclosed, 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, and approximately $19.0 million were recorded during the fourth quarter of 2014.
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 December 31, 2014.
Quarter ended | ||||||||||||||||
(Unaudited) | 31-Dec-14 | |||||||||||||||
(In thousands) |
Actual Results (US GAAP) |
BPNA Reorganization [2] | Other Adjustments | Adjusted Results (Non-GAAP) | ||||||||||||
Net interest income | $ | 326,861 | $ | (18,591 | ) | $ | - | $ | 345,452 | |||||||
Provision for loan losses – non-covered loans | 51,637 | 878 | - | 50,759 | ||||||||||||
Provision (reversal of provision) for loan losses – covered loans [1] | (3,646 | ) | - | - | (3,646 | ) | ||||||||||
Net interest income (expense) after provision for loan losses | 278,870 | (19,469 | ) | - | 298,339 | |||||||||||
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale | 10,946 | 1,684 | - | 9,262 | ||||||||||||
FDIC loss share expense | (18,693 | ) | - | - | (18,693 | ) | ||||||||||
Other non-interest income | 117,642 | - | - | 117,642 | ||||||||||||
Personnel costs | 110,736 | - |
|
2,974[3] |
107,762 | |||||||||||
Net occupancy expenses | 23,877 |
|
1,895[4] |
21,982 | ||||||||||||
Loss on early extinguishment of debt | 532 | 532 | - | - | ||||||||||||
Restructuring costs | 13,861 | 13,861 | - | - | ||||||||||||
Other operating expenses | 181,000 | - | - | 181,000 | ||||||||||||
Income (loss) from continuing operations before income tax | 58,759 | (32,178 | ) | (4,869 | ) | 95,806 | ||||||||||
Income tax expense | 14,995 | - | - | 14,995 | ||||||||||||
Income (loss) from continuing operations | $ | 43,764 | $ | (32,178 | ) | $ | (4,869 | ) | $ | 80,811 | ||||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. | ||||||||||||||||
[2] Includes loss on the refinancing of structured repos for $18.6 million recorded as interest expense, impact on provision for loan losses related to NPL sales of $878 thousand, gain on bulk sales of NPLs of $1.7 million and restructuring cost of $13.9 million. | ||||||||||||||||
[3] Represents the impact of the compensation package granted upon separation of an officer of the Corporation equal to approximately $3.0 million. | ||||||||||||||||
[4] Represents the net loss on the early cancellation of a lease at BPNA of $1.9 million. | ||||||||||||||||
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 (expense) 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 (expense) income after provision for loan losses | 245,792 | (32,613 | ) | - | - | 278,405 | |||||||||||||
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale | 15,593 | - | - | - | 15,593 | ||||||||||||||
FDIC loss share expense | (4,864 | ) | - | - | 15,046 | (19,910 | ) | ||||||||||||
Other non-interest income | 113,601 | - | - | - | 113,601 | ||||||||||||||
Personnel costs | 104,542 | - | 104,542 | ||||||||||||||||
Net occupancy expenses | 21,203 | - | 21,203 | ||||||||||||||||
Loss on early extinguishment of debt | - | - | - | - | - | ||||||||||||||
Restructuring costs | 8,290 | 8,290 | - | - | - | ||||||||||||||
Other operating expenses | 176,605 | - | - | - | 176,605 | ||||||||||||||
Income (loss) from continuing operations before income tax | 59,482 | (40,903 | ) | - | 15,046 | 85,339 | |||||||||||||
Income tax (benefit) expense | 26,667 | - | 20,048 | 3,009 | 3,610 | ||||||||||||||
Income (loss) from continuing operations | $ | 32,815 | $ | (40,903 | ) | $ | (20,048 | ) | $ | 12,037 | $ | 81,729 | |||||||
[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 and restructuring cost of $8.3 million. | |||||||||||||||||||
[3] 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. | |||||||||||||||||||
Quarters ended | ||||||||||||
(Unaudited) | Adjusted Results Non-GAAP | |||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | Variance | |||||||||
Net interest income | $ | 345,452 | $ | 347,084 | $ | (1,632 | ) | |||||
Provision for loan losses – non-covered loans | 50,759 | 56,216 | (5,457 | ) | ||||||||
Provision (reversal of provision) for loan losses – covered loans [1] | (3,646 | ) | 12,463 | (16,109 | ) | |||||||
Net interest income after provision for loan losses | 298,339 | 278,405 | 19,934 | |||||||||
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale | 9,262 | 15,593 | (6,331 | ) | ||||||||
FDIC loss share expense | (18,693 | ) | (19,910 | ) | 1,217 | |||||||
Other non-interest income | 117,642 | 113,601 | 4,041 | |||||||||
Personnel costs | 107,762 | 104,542 | 3,220 | |||||||||
Net occupancy expenses | 21,982 | 21,203 | 779 | |||||||||
Loss on early extinguishment of debt | - | - | - | |||||||||
Restructuring costs | - | - | - | |||||||||
Other operating expenses | 181,000 | 176,605 | 4,395 | |||||||||
Income from continuing operations before income tax | 95,806 | 85,339 | 10,467 | |||||||||
Income tax expense | 14,995 | 3,610 | 11,385 | |||||||||
Income from continuing operations | $ | 80,811 | $ | 81,729 | $ | (918 | ) | |||||
[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 December 31, 2014, the Corporation had a net interest income of $326.9 million. Excluding the impact of the $18.6 million expense related to the refinancing of structured repos, the adjusted net interest income was $345.5 million compared to an adjusted net interest income of $347.1 million for the previous quarter. Net interest margin was 4.45% for the fourth quarter of 2014. The adjusted net interest margin was 4.70%, compared to an adjusted net interest margin of 4.64% for the third quarter of 2014. While net interest income decreased $1.6 million, the net interest margin reflects an increase of six basis points. The increase in net interest margin is mainly related to:
These positive variances in net interest margin were offset in part by:
BPPR’s net interest margin was 5.15%, a decrease of ten basis points from the previous quarter. Net interest income amounted to $311.2 million for the quarter ended December 31, 2014, compared with $315.7 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 interest income from investment securities, partially offset by higher income from commercial loans.
BPNA earned $31.2 million in net interest income for the quarter ended December 31, 2014. Excluding the impact of the structured repos refinancing, the net interest income was $49.8 million, compared with an adjusted net interest income of $47.1 million in the previous quarter. The net interest margin was 2.40% for the quarter. The adjusted net interest margin, excluding the impact of the structured repos refinancing, for the quarter was 3.82%, compared to an adjusted net interest margin of 3.23% in the previous quarter. The increase in net interest income was mostly the result of a lower cost of borrowings due to the refinancing of structured repos, discussed above, partially offset by lower income from investment securities.
Non-interest income
Non-interest income was $109.9 million for the fourth quarter of 2014, a decrease of $14.4 million when compared with the third quarter. Excluding the $1.7 million impact of the gain on bulk sales of NPLs during the fourth quarter as part of the BPNA reorganization, and the effect of the FDIC indemnity asset amortization adjustment of $15.0 million during the third quarter, non-interest income decreased by $1.1 million when compared to the third quarter of 2014, driven primarily by the following:
These negative variances were partially offset by:
Refer to Table B for further details.
Financial Impact of FDIC-Assisted Transaction | ||||||||||||||||||||
(Unaudited) | Quarters ended | Years ended | ||||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | 31-Dec-14 | 31-Dec-13 | |||||||||||||||
Income Statement |
||||||||||||||||||||
Interest income on covered loans | $ | 61,285 | $ | 68,251 | $ | 86,794 | $ | 293,609 | $ | 300,745 | ||||||||||
Total FDIC loss share expense | (18,693 | ) | (4,864 | ) | (37,164 | ) | (103,024 | ) | (82,051 | ) | ||||||||||
Other non-interest income | - | - | - | - | 593 | |||||||||||||||
Provision for loan losses | (3,646 | ) | 12,463 | 8,907 | 46,135 | 69,396 | ||||||||||||||
Total revenues less provision for loan losses | $ | 46,238 | $ | 50,924 | $ | 40,723 | $ | 144,450 | $ | 149,891 | ||||||||||
Balance Sheet |
||||||||||||||||||||
Loans covered under loss-sharing agreements with FDIC | $ | 2,542,662 | $ | 2,654,263 | $ | 2,984,427 | ||||||||||||||
FDIC loss share asset | 542,454 | 681,106 | 948,608 | |||||||||||||||||
FDIC true-up payment obligation | 129,304 | 126,473 | 127,513 | |||||||||||||||||
See additional details on accounting for FDIC-Assisted transaction in Table O.
Operating expenses
Operating expenses increased by $19.4 million when compared with the third quarter. Excluding the impact of the significant events detailed in the Adjusted Results (Non-GAAP) tables above, operating expenses increased by $8.4 million compared to the third 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 $27.2 million for the fourth quarter of 2014, compared with $25.8 million for the third quarter of 2014. The increase was principally due to higher collections expenses at BPPR.
Full-time equivalent employees (“FTEs”), including discontinued operations, were 7,752 as of December 31, 2014, compared with 7,848 as of September 30, 2014, and 8,059 as of December 31, 2013.
For a breakdown of operating expenses by category refer to table B.
Income taxes
Income tax expense amounted to $15.0 million for the fourth quarter of 2014, compared to $26.7 million, or $3.6 million on an adjusted basis, for the previous quarter. The effective income tax rate for the fourth quarter of 2014, on an adjusted basis, was 16%. Refer to earnings highlights section above for a description of adjusted results.
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.
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) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | |||||||||
Total non-performing loans held-in-portfolio, excluding covered loans | $ | 625,338 | $ | 621,945 | $ | 597,948 | ||||||
Non-performing loans held-for-sale | 18,899 | 19,728 | 1,092 | |||||||||
Other real estate owned (“OREO”), excluding covered OREO | 135,500 | 135,256 | 135,501 | |||||||||
Total non-performing assets, excluding covered assets | 779,737 | 776,929 | 734,541 | |||||||||
Covered loans and OREO |
148,099 |
166,533 | 197,388 | |||||||||
Total non-performing assets | $ |
927,836 |
$ | 943,462 | $ | 931,929 | ||||||
Net charge-offs for the quarter (excluding covered loans) | $ | 50,187 | $ | 40,469 | $ | 35,366 | ||||||
Ratios (excluding covered loans): | ||||||||||||
Non-covered loans held-in-portfolio (1) | $ | 19,404,451 | $ | 19,359,216 | $ | 21,611,866 | ||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio (1) | 3.22 | % | 3.21 | % | 2.77 | % | ||||||
Allowance for loan losses to loans held-in-portfolio | 2.68 | 2.69 | 2.49 | |||||||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale | 83.11 | 83.88 | 90.05 | |||||||||
[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 $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 | Years ended | |||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | 31-Dec-14 | 31-Dec-13 | ||||||||||||||
Provision (reversal) for loan losses - non-covered loans: | |||||||||||||||||||
BPPR | $ | 52,206 | $ | 61,868 | $ | 62,658 | $ | 242,849 | $ | 547,886 | |||||||||
BPNA | (569 | ) | 6,298 | (12,731 | ) | (18,850 | ) | (11,176 | ) | ||||||||||
Total provision for loan losses - non-covered loans | 51,637 | 68,166 | 49,927 | 223,999 | 536,710 | ||||||||||||||
Provision for loan losses - covered loans | (3,646 | ) | 12,463 | 8,907 | 46,135 | 69,396 | |||||||||||||
Total provision for loan losses | $ | 47,991 | $ | 80,629 | $ | 58,834 | $ | 270,134 | $ | 606,106 | |||||||||
Credit Quality
The Corporation’s credit quality trends during the fourth quarter of 2014 were stable with the US regions exhibiting continued improvements and the Puerto Rico region remaining in line with the prior quarter. The BPNA segment continued to reflect strong performance led by the improved risk profile of its loan portfolios, further strengthened by the sale of certain non-performing and legacy assets. Notwithstanding, Puerto Rico’s fiscal and economic conditions continue to present a challenging operating environment.
The following presents credit quality performance for the fourth quarter of 2014 for the Corporation’s non-covered portfolios:
Credit Quality by Segment | ||||||||||||
(Unaudited) | ||||||||||||
(In thousands) | Quarters ended | |||||||||||
BPPR | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | |||||||||
Provision for loan losses | $ | 52,206 | $ | 61,868 | $ | 62,658 | ||||||
Net charge-offs | 52,523 | 38,682 |
|
35,256 |
||||||||
Total non-performing loans held-in-portfolio, excluding covered loans | 606,238 | 592,229 | 447,255 | |||||||||
Allowance / non-covered loans held-in-portfolio | 3.07 | % | 3.09 | % | 2.69 | % | ||||||
Quarters ended | ||||||||||||
BPNA | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | |||||||||
Provision for loan losses (reversal of provision) - Continuing operations | $ | (569 | ) | $ | 6,298 | $ | (12,731 | ) | ||||
Provision for loan losses (reversal of provision) - Discontinued operations | - | - | (2,198 | ) | ||||||||
Net charge-offs (recoveries) - Continuing operations | (2,336 | ) | 1,787 | (603 | ) | |||||||
Net charge-offs (recoveries) - Discontinued operations | - | - | 713 | |||||||||
Total non-performing loans held-in-portfolio | 19,100 | 29,716 | 150,693 | |||||||||
Allowance / non-covered loans held-in-portfolio | 0.88 | % | 0.91 | % | 1.95 | % | ||||||
BPPR Segment
BPNA Segment
Financial Condition Highlights | |||||||||
(Unaudited) | |||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | ||||||
Money market, trading and investment securities | $ | 7,475,232 | $ | 7,200,291 | $ | 6,815,244 | |||
Loans not covered under loss sharing agreements with the FDIC | 19,404,451 | 19,359,216 | 21,611,866 | ||||||
Loans covered under loss sharing agreements with the FDIC | 2,542,662 | 2,654,263 | 2,984,427 | ||||||
Assets from discontinued operations | - | 1,129,053 | - | ||||||
Total assets | 33,094,172 | 34,099,095 | 35,749,333 | ||||||
Deposits | 24,807,535 | 24,466,105 | 26,711,145 | ||||||
Borrowings | 3,004,685 | 3,375,485 | 3,645,246 | ||||||
Liabilities from discontinued operations | 5,064 | 1,106,762 | - | ||||||
Total liabilities | 28,822,782 | 29,800,703 | 31,123,183 | ||||||
Stockholders’ equity | 4,271,390 | 4,298,392 | 4,626,150 | ||||||
Total assets decreased by $1.0 billion from the third quarter of 2014, driven by:
These decreases were partially offset by:
Total liabilities decreased by $1.0 billion from the third quarter of 2014, driven by:
These decreases were partially offset by:
Stockholders’ equity decreased by $27.0 million from the third quarter of 2014, mainly as a result of an increase of $79.8 million in accumulated other comprehensive loss, which was partially offset by net income for the quarter of $52.9 million. The other comprehensive loss includes an increase of approximately $103.0 million in the adjustment of pension and post retirement plans, net of tax, which was partially offset by an increase in unrealized gains from securities available for sale of $25.3 million. Refer to Table A for capital ratios.
The following table presents the preliminary regulatory capital ratios based on the current Basel I regulatory capital framework and under the Basel III Transitional Capital Rules for non-advanced approach banking organizations in effect as of January 1, 2015.
Ratios as of December 31, 2014 | Basel I | Basel III | Variance | ||||||
Tier 1 risk-based capital |
18.17 |
% |
16.90 |
% |
(1.27) |
% | |||
Total risk-based capital |
19.45 |
% |
19.58 |
% |
0.13 |
% | |||
Tier 1 leverage |
11.96 |
% |
11.78 |
% | (0.18) | % | |||
Common equity tier 1 ratio |
15.92 |
% |
16.51 |
% |
0.59 |
% | |||
The reduction of 127 basis points in Tier 1 risk-based capital under Basel III relates mainly to the impact of the phase-out provisions of the New Capital Rules on the Corporation’s $427 million in trust preferred securities. Under Basel III, only 25% of the outstanding balance of these securities is allowed as Tier 1, with the remaining balance included in Total risk-based capital.
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 and Florida.
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 Thursday, January 22, 2015, at 10:00 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 Friday, January 30, 2015. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10058189.
Popular, Inc. |
Financial Supplement to Fourth 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 |
Table R - Adjusted Consolidated Statement of Operations for the Year Ended December 31, 2014 (Non-GAAP) |
POPULAR, INC. | ||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||||||||||||
Table A - Selected Ratios and Other Information | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Quarters ended | Years ended | |||||||||||||||||||
31-Dec-14 | 30-Sep-14 | 31-Dec-13 | 31-Dec-14 | 31-Dec-13 | ||||||||||||||||
Basic EPS from continuing operations | $ | 0.41 | $ | 0.31 | $ | 1.46 | $ | (1.85 | ) | $ | 5.41 | |||||||||
Basic EPS from discontinued operations | $ | 0.09 | $ | 0.29 | $ | 0.12 | $ | (1.20 | ) | $ | 0.39 | |||||||||
Total Basic EPS | $ | 0.50 | $ | 0.60 | $ | 1.58 | $ | (3.05 | ) | $ | 5.80 | |||||||||
Diluted EPS from continuing operations | $ | 0.41 | $ | 0.31 | $ | 1.46 | $ | (1.85 | ) | $ | 5.39 | |||||||||
Diluted EPS from discontinued operations | $ | 0.09 | $ | 0.29 | $ | 0.11 | $ | (1.20 | ) | $ | 0.39 | |||||||||
Total Diluted EPS | $ | 0.50 | $ | 0.60 | $ | 1.57 | $ | (3.05 | ) | $ | 5.78 | |||||||||
Average common shares outstanding | 102,859,416 | 102,953,328 | 102,774,144 | 102,848,792 | 102,693,685 | |||||||||||||||
Average common shares outstanding - assuming dilution |
103,166,349 |
103,152,916 | 103,081,417 | 102,848,792 | 103,061,475 | |||||||||||||||
Common shares outstanding at end of period | 103,476,847 | 103,448,206 | 103,397,699 | 103,476,847 | 103,397,699 | |||||||||||||||
Market value per common share | $ | 34.05 | $ | 29.44 | $ | 28.73 | $ | 34.05 | $ | 28.73 | ||||||||||
Market capitalization - (In millions) | $ | 3,523 | $ | 3,046 | $ | 2,971 | $ | 3,523 | $ | 2,971 | ||||||||||
Return on average assets | 0.63 | % | 0.71 | % | 1.79 | % | (0.88 | )% | 1.65 | % | ||||||||||
Return on average common equity | 4.78 | % | 5.75 | % | 14.59 | % | (6.95 | )% | 14.43 | % | ||||||||||
Net interest margin [2] | 4.70 | % | 4.64 | % | 4.75 | % | 4.67 | % | 4.52 | % | ||||||||||
Common equity per share | $ | 40.79 | $ | 41.07 | $ | 44.26 | $ | 40.79 | $ | 44.26 | ||||||||||
Tangible common book value per common share (non-GAAP) [1] | $ | 35.93 | $ | 36.24 | $ | 37.56 | $ | 35.93 | $ | 37.56 | ||||||||||
Tangible common equity to tangible assets (non-GAAP) [1] | 11.41 | % | 11.16 | % | 11.08 | % | 11.41 | % | 11.08 | % | ||||||||||
Tier 1 risk-based capital [3] |
18.17 |
% | 16.86 | % | 19.15 | % |
18.17 |
% | 19.15 | % | ||||||||||
Total risk-based capital [3] |
19.45 |
% | 18.14 | % | 20.42 | % |
19.45 |
% | 20.42 | % | ||||||||||
Tier 1 leverage [3] | 11.96 | % | 11.14 | % | 12.85 | % | 11.96 | % | 12.85 | % | ||||||||||
Tier 1 common equity to risk-weighted assets (non-GAAP) [1] [3] |
15.92 |
% | 14.74 | % | 14.83 | % |
15.92 |
% | 14.83 | % | ||||||||||
[1] Refer to Table N for Non-GAAP reconciliations. | ||||||||||||||||||||
[2] Not on a taxable equivalent basis. For the quarter ended December 31, 2014 and September 30, 2014, excludes the impact of $18.6 million and $20.7 million fees, respectively, related to repos refinancing. US GAAP Net interest margin was 4.45% for the fourth quarter, compared to 4.36% for the previous quarter. For the year ended December 31, 2014, excludes the impact of $39.2 million and $414.1 million, respectively, related to repos refinancing and the accelerated amortization of the TARP discount. The US GAAP Net interest margin was 3.16% for the year ended December 31, 2014. Refer to Tables D & E for reconciliation. | ||||||||||||||||||||
[3] Capital ratios for the current quarter are preliminary. | ||||||||||||||||||||
POPULAR, INC. | ||||||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||||||||||||||||||||
Table B - Consolidated Statement of Operations | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Quarters ended | Variance | Quarter ended | Variance | Years ended | ||||||||||||||||||||||||
(In thousands, except per share information) | 31-Dec-14 | 30-Sep-14 |
Q4 2014 vs. Q3 2014 |
31-Dec-13 |
Q4 2014 vs. Q4 2013 |
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||
Loans | $ | 357,570 | $ | 362,592 | $ | (5,022 | ) | $ | 384,015 | $ | (26,445 | ) | $ | 1,478,750 | $ | 1,481,096 | ||||||||||||
Money market investments | 1,113 | 1,007 | 106 | 832 | 281 | 4,224 | 3,464 | |||||||||||||||||||||
Investment securities | 30,361 | 33,154 | (2,793 | ) | 34,317 | (3,956 | ) | 132,631 | 141,807 | |||||||||||||||||||
Trading account securities | 2,891 | 4,446 | (1,555 | ) | 5,361 | (2,470 | ) | 17,938 | 21,573 | |||||||||||||||||||
Total interest income | 391,935 | 401,199 | (9,264 | ) | 424,525 | (32,590 | ) | 1,633,543 | 1,647,940 | |||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Deposits | 25,473 | 26,533 | (1,060 | ) | 28,681 | (3,208 | ) | 105,087 | 124,857 | |||||||||||||||||||
Short-term borrowings | 20,489 | 28,955 | (8,466 | ) | 9,319 | 11,170 | 67,376 | 38,430 | ||||||||||||||||||||
Long-term debt | 19,112 | 19,290 | (178 | ) | 32,018 | (12,906 | ) | 516,008 | 140,079 | |||||||||||||||||||
Total interest expense | 65,074 | 74,778 | (9,704 | ) | 70,018 | (4,944 | ) | 688,471 | 303,366 | |||||||||||||||||||
Net interest income (expense) | 326,861 | 326,421 | 440 | 354,507 | (27,646 | ) | 945,072 | 1,344,574 | ||||||||||||||||||||
Provision for loan losses - non-covered loans | 51,637 | 68,166 | (16,529 | ) | 49,927 | 1,710 | 223,999 | 536,710 | ||||||||||||||||||||
Provision (recovery of provision) for loan losses - covered loans | (3,646 | ) | 12,463 | (16,109 | ) | 8,907 | (12,553 | ) | 46,135 | 69,396 | ||||||||||||||||||
Net interest income (expense) after provision for loan losses | 278,870 | 245,792 | 33,078 | 295,673 | (16,803 | ) | 674,938 | 738,468 | ||||||||||||||||||||
Service charges on deposit accounts | 39,456 | 40,585 | (1,129 | ) | 39,814 | (358 | ) | 158,637 | 162,870 | |||||||||||||||||||
Other service fees | 61,140 | 54,839 | 6,301 | 60,087 | 1,053 | 225,265 | 229,351 | |||||||||||||||||||||
Mortgage banking activities | 8,747 | 14,402 | (5,655 | ) | 14,387 | (5,640 | ) | 30,615 | 71,657 | |||||||||||||||||||
Net (loss) gain and valuation adjustments on investment securities | 893 | (1,763 | ) | 2,656 | 2,110 | (1,217 | ) | (870 | ) | 7,966 | ||||||||||||||||||
Trading account profit (loss) | 586 | 740 | (154 | ) | (1,547 | ) | 2,133 | 4,358 | (13,483 | ) | ||||||||||||||||||
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale | 10,946 | 15,593 | (4,647 | ) | 3,346 | 7,600 | 40,591 | (52,708 | ) | |||||||||||||||||||
Adjustments (expense) to indemnity reserves on loans sold | (6,817 | ) | (9,480 | ) | 2,663 | (6,892 | ) | 75 | (34,098 | ) | (37,054 | ) | ||||||||||||||||
FDIC loss share (expense) income | (18,693 | ) | (4,864 | ) | (13,829 | ) | (37,164 | ) | 18,471 | (103,024 | ) | (82,051 | ) | |||||||||||||||
Other operating income | 13,637 | 14,278 | (641 | ) | 111,135 | (97,498 | ) | 71,572 | 504,465 | |||||||||||||||||||
Total non-interest income | 109,895 | 124,330 | (14,435 | ) | 185,276 | (75,381 | ) | 393,046 | 791,013 | |||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Personnel costs | ||||||||||||||||||||||||||||
Salaries | 71,899 | 71,166 | 733 | 69,391 | 2,508 | 281,252 | 276,072 | |||||||||||||||||||||
Commissions, incentives and other bonuses | 18,439 | 14,738 | 3,701 | 13,523 | 4,916 | 59,138 | 57,060 | |||||||||||||||||||||
Pension, postretirement and medical insurance | 6,901 | 9,282 | (2,381 | ) | 13,138 | (6,237 | ) | 32,416 | 55,106 | |||||||||||||||||||
Other personnel costs, including payroll taxes | 13,497 | 9,356 | 4,141 | 10,353 | 3,144 | 45,873 | 40,459 | |||||||||||||||||||||
Total personnel costs | 110,736 | 104,542 | 6,194 | 106,405 | 4,331 | 418,679 | 428,697 | |||||||||||||||||||||
Net occupancy expenses | 23,877 | 21,203 | 2,674 | 23,714 | 163 | 86,707 | 86,651 | |||||||||||||||||||||
Equipment expenses | 13,091 | 12,370 | 721 | 11,536 | 1,555 | 48,917 | 46,028 | |||||||||||||||||||||
Other taxes | 14,343 | 15,369 | (1,026 | ) | 13,595 | 748 | 56,918 | 58,028 | ||||||||||||||||||||
Professional fees | 80,383 | 67,649 | 12,734 | 74,138 | 6,245 | 282,055 | 278,127 | |||||||||||||||||||||
Communications | 6,119 | 6,455 | (336 | ) | 6,149 | (30 | ) | 25,684 | 25,385 | |||||||||||||||||||
Business promotion | 13,530 | 13,062 | 468 | 16,702 | (3,172 | ) | 54,016 | 59,453 | ||||||||||||||||||||
FDIC deposit insurance | 9,338 | 9,511 | (173 | ) | 14,672 | (5,334 | ) | 40,307 | 56,728 | |||||||||||||||||||
Loss on early extinguishment of debt | 532 | - | 532 | - | 532 | 532 | 3,388 | |||||||||||||||||||||
Other real estate owned (OREO) expenses | 20,016 | 19,745 | 271 | 9,502 | 10,514 | 49,611 | 79,658 | |||||||||||||||||||||
Credit and debit card processing, volume, interchange and other expenses | 5,093 | 5,659 | (566 | ) | 5,284 | (191 | ) | 21,588 | 19,901 | |||||||||||||||||||
Other operating expenses | 17,004 | 24,759 | (7,755 | ) | 20,910 | (3,906 | ) | 73,785 | 71,975 | |||||||||||||||||||
Amortization of intangibles | 2,083 | 2,026 | 57 | 2,002 | 81 | 8,160 | 7,971 | |||||||||||||||||||||
Restructuring costs | 13,861 | 8,290 | 5,571 | - | 13,861 | 26,725 | - | |||||||||||||||||||||
Total operating expenses | 330,006 | 310,640 | 19,366 | 304,609 | 25,397 | 1,193,684 | 1,221,990 | |||||||||||||||||||||
Income (loss) from continuing operations before income tax | 58,759 | 59,482 | (723 | ) | 176,340 | (117,581 | ) | (125,700 | ) | 307,491 | ||||||||||||||||||
Income tax expense (benefit) | 14,995 | 26,667 | (11,672 | ) | 25,162 | (10,167 | ) | 60,802 | (251,327 | ) | ||||||||||||||||||
Income (loss) from continuing operations | 43,764 | 32,815 | 10,949 | 151,178 | (107,414 | ) | (186,502 | ) | 558,818 | |||||||||||||||||||
Income (loss) from discontinued operations, net of tax | 9,086 | 29,758 | (20,672 | ) | 11,853 | (2,767 | ) | (122,980 | ) | 40,509 | ||||||||||||||||||
Net income (loss) | $ | 52,850 | $ | 62,573 | $ | (9,723 | ) | $ | 163,031 | $ | (110,181 | ) | $ | (309,482 | ) | $ | 599,327 | |||||||||||
Net income (loss) applicable to common stock | $ | 51,919 | $ | 61,643 | $ | (9,724 | ) | $ | 162,100 | $ | (110,181 | ) | $ | (313,205 | ) | $ | 595,604 | |||||||||||
Net income (loss) per common share - basic: | ||||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 0.41 | $ | 0.31 | $ | 0.10 | $ | 1.46 | $ | (1.05 | ) | $ | (1.85 | ) | $ | 5.41 | ||||||||||||
Net income (loss) from discontinued operations | $ | 0.09 | $ | 0.29 | $ | (0.20 | ) | $ | 0.12 | $ | (0.03 | ) | $ | (1.20 | ) | $ | 0.39 | |||||||||||
Net income (loss) per common share - basic | $ | 0.50 | $ | 0.60 | $ | (0.10 | ) | $ | 1.58 | $ | (1.08 | ) | $ | (3.05 | ) | $ | 5.80 | |||||||||||
Net income (loss) per common share - diluted: | ||||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 0.41 | $ | 0.31 | $ | 0.10 | $ | 1.46 | $ | (1.05 | ) | $ | (1.85 | ) | $ | 5.39 | ||||||||||||
Net income (loss) from discontinued operations | $ | 0.09 | $ | 0.29 | $ | (0.20 | ) | $ | 0.11 | $ | (0.02 | ) | $ | (1.20 | ) | $ | 0.39 | |||||||||||
Net income (loss) per common share - diluted | $ | 0.50 | $ | 0.60 | $ | (0.10 | ) | $ | 1.57 | $ | (1.07 | ) | $ | (3.05 | ) | $ | 5.78 | |||||||||||
Popular, Inc. | ||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||||||||
Table C - Consolidated Statement of Financial Condition | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Variance | ||||||||||||||||
Q4 2014 vs. | ||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | Q3 2014 | ||||||||||||
Assets: | ||||||||||||||||
Cash and due from banks | $ | 447,011 | $ | 321,914 | $ | 423,211 | $ | 125,097 | ||||||||
Money market investments | 1,756,470 | 1,053,121 | 858,453 | 703,349 | ||||||||||||
Trading account securities, at fair value | 138,527 | 145,343 | 339,743 | (6,816 | ) | |||||||||||
Investment securities available-for-sale, at fair value | 5,315,159 | 5,727,766 | 5,294,800 | (412,607 | ) | |||||||||||
Investment securities held-to-maturity, at amortized cost | 103,170 | 112,893 | 140,496 | (9,723 | ) | |||||||||||
Other investment securities, at lower of cost or realizable value | 161,906 | 161,168 | 181,752 | 738 | ||||||||||||
Loans held-for-sale, at lower of cost or fair value | 106,104 | 178,008 | 110,426 | (71,904 | ) | |||||||||||
Loans held-in-portfolio: | ||||||||||||||||
Loans not covered under loss sharing agreements with the FDIC | 19,498,286 | 19,450,677 | 21,704,010 | 47,609 | ||||||||||||
Loans covered under loss sharing agreements with the FDIC | 2,542,662 | 2,654,263 | 2,984,427 | (111,601 | ) | |||||||||||
Less: Unearned income | 93,835 | 91,461 | 92,144 | 2,374 | ||||||||||||
Allowance for loan losses | 601,792 | 611,375 | 640,555 | (9,583 | ) | |||||||||||
Total loans held-in-portfolio, net | 21,345,321 | 21,402,104 | 23,955,738 | (56,783 | ) | |||||||||||
FDIC loss share asset | 542,454 | 681,106 | 948,608 | (138,652 | ) | |||||||||||
Premises and equipment, net | 494,581 | 497,111 | 519,516 | (2,530 | ) | |||||||||||
Other real estate not covered under loss sharing agreements with the FDIC | 135,500 | 135,256 | 135,501 | 244 | ||||||||||||
Other real estate covered under loss sharing agreements with the FDIC | 130,266 | 151,382 | 168,007 | (21,116 | ) | |||||||||||
Accrued income receivable | 121,818 | 116,746 | 131,536 | 5,072 | ||||||||||||
Mortgage servicing assets, at fair value | 148,694 | 152,282 | 161,099 | (3,588 | ) | |||||||||||
Other assets | 1,643,920 | 1,634,819 | 1,687,558 | 9,101 | ||||||||||||
Goodwill | 465,676 | 461,246 | 647,757 | 4,430 | ||||||||||||
Other intangible assets | 37,595 | 37,777 | 45,132 | (182 | ) | |||||||||||
Assets from discontinued operations | - | 1,129,053 | - | (1,129,053 | ) | |||||||||||
Total assets | $ | 33,094,172 | $ | 34,099,095 | $ | 35,749,333 | $ | (1,004,923 | ) | |||||||
Liabilities and Stockholders’ Equity: | ||||||||||||||||
Liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
Non-interest bearing | $ | 5,783,748 | $ | 5,521,415 | $ | 5,922,682 | $ | 262,333 | ||||||||
Interest bearing | 19,023,787 | 18,944,690 | 20,788,463 | 79,097 | ||||||||||||
Total deposits | 24,807,535 | 24,466,105 | 26,711,145 | 341,430 | ||||||||||||
Federal funds purchased and assets sold under agreements to repurchase | 1,271,657 | 1,650,712 | 1,659,292 | (379,055 | ) | |||||||||||
Other short-term borrowings | 21,200 | 1,200 | 401,200 | 20,000 | ||||||||||||
Notes payable | 1,711,828 | 1,723,573 | 1,584,754 | (11,745 | ) | |||||||||||
Other liabilities | 1,005,498 | 852,351 | 766,792 | 153,147 | ||||||||||||
Liabilities from discontinued operations | 5,064 | 1,106,762 | - | (1,101,698 | ) | |||||||||||
Total liabilities | 28,822,782 | 29,800,703 | 31,123,183 | (977,921 | ) | |||||||||||
Stockholders’ equity: | ||||||||||||||||
Preferred stock | 50,160 | 50,160 | 50,160 | - | ||||||||||||
Common stock | 1,036 | 1,036 | 1,034 | - | ||||||||||||
Surplus | 4,196,458 | 4,171,890 | 4,170,152 | 24,568 | ||||||||||||
Retained earnings | 257,725 | 229,306 | 594,430 | 28,419 | ||||||||||||
Treasury stock | (4,117 | ) | (3,933 | ) | (881 | ) | (184 | ) | ||||||||
Accumulated other comprehensive loss | (229,872 | ) | (150,067 | ) | (188,745 | ) | (79,805 | ) | ||||||||
Total stockholders’ equity | 4,271,390 | 4,298,392 | 4,626,150 | (27,002 | ) | |||||||||||
Total liabilities and stockholders’ equity | $ | 33,094,172 | $ | 34,099,095 | $ | 35,749,333 | $ | (1,004,923 | ) | |||||||
Popular, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarter ended | Quarter ended | Quarter ended | Variance | Variance | ||||||||||||||||||||||||||||||||||||||||||||||||
31-Dec-14 | 30-Sep-14 | 31-Dec-13 | Q4 2014 vs. Q3 2014 | Q4 2014 vs. Q4 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 | $ | 7,220 | $ | 34.4 | 1.90 | % | $ | 7,501 | $ | 38.6 | 2.06 | % | $ | 7,038 | $ | 40.5 | 2.30 | % | ($281 | ) | ($4.2 | ) | (0.16 | )% | $ | 182 | ($6.1 | ) | (0.40 | )% | ||||||||||||||||||||||
Loans not covered under loss sharing agreements with the FDIC: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 8,219 | 101.9 | 4.92 | 8,239 | 99.6 | 4.80 | 8,356 | 100.7 | 4.78 | (20 | ) | 2.3 | 0.12 | (137 | ) | 1.2 | 0.14 | |||||||||||||||||||||||||||||||||||
Construction | 233 | 3.8 | 6.41 | 201 | 2.5 | 4.86 | 285 | 4.4 | 6.15 | 32 | 1.3 | 1.55 | (52 | ) | (0.6 | ) | 0.26 | |||||||||||||||||||||||||||||||||||
Mortgage | 6,538 | 84.1 | 5.15 | 6,646 | 84.0 | 5.05 | 6,688 | 87.1 | 5.21 | (108 | ) | 0.1 | 0.10 | (150 | ) | (3.0 | ) | (0.06 | ) | |||||||||||||||||||||||||||||||||
Consumer | 3,884 | 96.6 | 9.86 | 3,905 | 98.4 | 10.00 | 3,742 | 94.5 | 10.02 | (21 | ) | (1.8 | ) | (0.14 | ) | 142 | 2.1 | (0.16 | ) | |||||||||||||||||||||||||||||||||
Lease financing | 555 | 9.9 | 7.11 | 545 | 9.8 | 7.20 | 538 | 10.5 | 7.79 | 10 | 0.1 | (0.09 | ) | 17 | (0.6 | ) | (0.68 | ) | ||||||||||||||||||||||||||||||||||
Total loans not covered under loss sharing agreements with the FDIC | 19,429 | 296.3 | 6.07 | 19,536 | 294.3 | 5.99 | 19,609 | 297.2 | 6.03 | (107 | ) | 2.0 | 0.08 | (180 | ) | (0.9 | ) | 0.04 | ||||||||||||||||||||||||||||||||||
Loans covered under loss sharing agreements with the FDIC | 2,615 | 61.3 | 9.31 | 2,727 | 68.3 | 9.95 | 3,017 | 86.8 | 11.43 | (112 | ) | (7.0 | ) | (0.64 | ) | (402 | ) | (25.5 | ) | (2.12 | ) | |||||||||||||||||||||||||||||||
Total loans | 22,044 | 357.6 | 6.45 | 22,263 | 362.6 | 6.48 | 22,626 | 384.0 | 6.75 | (219 | ) | (5.0 | ) | (0.03 | ) | (582 | ) | (26.4 | ) | (0.30 | ) | |||||||||||||||||||||||||||||||
Total interest earning assets | 29,264 | $ | 392.0 | 5.33 | % | 29,764 | $ | 401.2 | 5.36 | % | 29,664 | $ | 424.5 | 5.69 | % | (500 | ) | ($9.2 | ) | (0.03 | )% | (400 | ) | ($32.5 | ) | (0.36 | )% | |||||||||||||||||||||||||
Allowance for loan losses | (618 | ) | (629 | ) | (602 | ) | 11 | (16 | ) | |||||||||||||||||||||||||||||||||||||||||||
Other non-interest earning assets | 4,171 | 4,416 | 4,997 | (245 | ) | (826 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Assets from discontinued operations | 491 | 1,473 | 1,976 | (982 | ) | (1,485 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Total average assets | $ | 33,308 | $ | 35,024 | $ | 36,035 | $ | (1,716 | ) | $ | (2,727 | ) | ||||||||||||||||||||||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
NOW and money market | $ | 4,788 | $ | 4.0 | 0.33 | % | $ | 4,876 | $ | 3.9 | 0.32 | % | $ | 4,629 | $ | 3.7 | 0.32 | % | $ | (88 | ) | $ | 0.1 | 0.01 | % | $ | 159 | $ | 0.3 | 0.01 | % | |||||||||||||||||||||
Savings | 6,788 | 3.8 | 0.22 | 6,740 | 3.7 | 0.22 | 6,663 | 3.7 | 0.22 | 48 | 0.1 | - | 125 | 0.1 | - | |||||||||||||||||||||||||||||||||||||
Time deposits | 7,409 | 17.7 | 0.95 | 7,569 | 18.9 | 0.99 | 7,790 | 21.3 | 1.08 | (160 | ) | (1.2 | ) | (0.04 | ) | (381 | ) | (3.6 | ) | (0.13 | ) | |||||||||||||||||||||||||||||||
Total interest bearing deposits | 18,985 | 25.5 | 0.53 | 19,185 | 26.5 | 0.55 | 19,082 | 28.7 | 0.60 | (200 | ) | (1.0 | ) | (0.02 | ) | (97 | ) | (3.2 | ) | (0.07 | ) | |||||||||||||||||||||||||||||||
Borrowings[1] | 2,992 | 21.0 | 2.80 | 3,591 | 27.6 | 3.06 | 3,794 | 41.3 | 4.35 | (599 | ) | (6.6 | ) | (0.26 | ) | (802 | ) | (20.3 | ) | (1.55 | ) | |||||||||||||||||||||||||||||||
Total interest bearing liabilities | 21,977 | 46.5 | 0.84 | 22,776 | 54.1 | 0.94 | 22,876 | 70.0 | 1.22 | (799 | ) | (7.6 | ) | (0.10 | ) | (899 | ) | (23.5 | ) | (0.38 | ) | |||||||||||||||||||||||||||||||
Net interest spread | 4.49 | % | 4.42 | % | 4.47 | % | 0.07 | % | 0.02 | % | ||||||||||||||||||||||||||||||||||||||||||
Non-interest bearing deposits | 5,636 | 5,464 | 5,468 | 172 | 168 | |||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 849 | 860 | 1,039 | (11 | ) | (190 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Liabilities from discontinued operations | 486 | 1,618 |
2,193 |
(1,132 | ) |
(1,707 |
) | |||||||||||||||||||||||||||||||||||||||||||||
Stockholders' equity | 4,360 | 4,306 |
4,459 |
54 |
(99 |
) |
||||||||||||||||||||||||||||||||||||||||||||||
Total average liabilities and stockholders' equity | $ | 33,308 | $ | 35,024 | $ | 36,035 | $ | (1,716 | ) | $ | (2,727 | ) | ||||||||||||||||||||||||||||||||||||||||
Adjusted net interest income / margin non-taxable equivalent basis | $ | 345.5 | 4.70 | % | $ | 347.1 | 4.64 | % | $ | 354.5 | 4.75 | % | ($1.6 | ) | 0.06 | % | ($9.0 | ) | (0.05 | )% | ||||||||||||||||||||||||||||||||
Impact of fees related to repos refinancing | $ | 18.6 | $ | 20.7 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (expense)/margin non-taxable equivalent basis | $ | 326.9 | 4.45 | % | $ | 326.4 | 4.36 | % | $ | 354.5 | 4.75 | % | ||||||||||||||||||||||||||||||||||||||||
(1) Borrowing expense for the fourth and third quarters, including the fees related to repos refinancing, was 5.27% and 5.34%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Popular, Inc. | |||||||||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | |||||||||||||||||||||||||||||||
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE | |||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||
Year ended | Year ended | ||||||||||||||||||||||||||||||
31-Dec-14 | 31-Dec-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 | $ | 7,530 | $ | 154.8 | 2.06 | % | $ | 6,941 | $ | 166.8 | 2.40 | % | $ | 589 | ($12.0 | ) | (0.34 | )% | |||||||||||||
Loans not covered under loss sharing agreements with the FDIC: | |||||||||||||||||||||||||||||||
Commercial | 8,347 | 404.4 | 4.85 | 8,284 | 399.3 | 4.82 | 63 | 5.1 | 0.03 | ||||||||||||||||||||||
Construction | 199 | 13.5 | 6.78 | 319 | 15.1 | 4.73 | (120 | ) | (1.6 | ) | 2.05 | ||||||||||||||||||||
Mortgage | 6,641 | 340.4 | 5.12 | 6,688 | 343.3 | 5.13 | (47 | ) | (2.9 | ) | (0.01 | ) | |||||||||||||||||||
Consumer | 3,861 | 386.7 | 10.01 | 3,741 | 379.2 | 10.13 | 120 | 7.5 | (0.12 | ) | |||||||||||||||||||||
Lease financing | 548 | 40.1 | 7.33 | 540 | 43.5 | 8.07 | 8 | (3.4 | ) | (0.74 | ) | ||||||||||||||||||||
Total loans not covered under loss sharing agreements with the FDIC | 19,596 | 1,185.1 | 6.05 | 19,572 | 1,180.4 | 6.03 | 24 | 4.7 | 0.02 | ||||||||||||||||||||||
Loans covered under loss sharing agreements with the FDIC | 2,771 | 293.6 | 10.60 | 3,228 | 300.7 | 9.32 | (457 | ) | (7.1 | ) | 1.28 | ||||||||||||||||||||
Total loans | 22,367 | 1,478.7 | 6.61 | 22,800 | 1,481.1 | 6.50 | (433 | ) | (2.4 | ) | 0.11 | ||||||||||||||||||||
Total interest earning assets | 29,897 | $ | 1,633.5 | 5.46 | % | 29,741 | $ | 1,647.9 | 5.54 | % | 156 | ($14.4 | ) | (0.08 | )% | ||||||||||||||||
Allowance for loan losses | (623 | ) | (610 | ) | (13 | ) | |||||||||||||||||||||||||
Other non-interest earning assets | 4,466 | 5,139 | (673 | ) | |||||||||||||||||||||||||||
Assets from discontinued operations | 1,442 | 1,997 | (555 | ) | |||||||||||||||||||||||||||
Total average assets | $ | 35,182 | $ | 36,267 | ($1,085 | ) | |||||||||||||||||||||||||
Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||||
Interest bearing deposits: | |||||||||||||||||||||||||||||||
NOW and money market | $ | 4,824 | $ | 15.5 | 0.32 | % | $ | 4,658 | $ | 15.7 | 0.34 | % | $ | 166 | ($0.2 | ) | (0.02 | )% | |||||||||||||
Savings | 6,733 | 14.7 | 0.22 | 6,585 | 15.4 | 0.23 | 148 | (0.7 | ) | (0.01 | ) | ||||||||||||||||||||
Time deposits | 7,556 | 74.9 | 0.99 | 7,957 | 93.8 | 1.18 | (401 | ) | (18.9 | ) | (0.19 | ) | |||||||||||||||||||
Total interest bearing deposits | 19,113 | 105.1 | 0.55 | 19,200 | 124.9 | 0.65 | (87 | ) | (19.8 | ) | (0.10 | ) | |||||||||||||||||||
Borrowings [1] | 3,514 | 130.0 | 3.70 | 4,292 | 178.5 | 4.16 | (778 | ) | (48.5 | ) | (0.46 | ) | |||||||||||||||||||
Total interest bearing liabilities | 22,627 | 235.1 | 1.04 | 23,492 | 303.4 | 1.29 | (865 | ) | (68.3 | ) | (0.25 | ) | |||||||||||||||||||
Net interest spread | 4.42 | % | 4.25 | % | 0.17 | % | |||||||||||||||||||||||||
Non-interest bearing deposits | 5,534 | 5,371 | 163 | ||||||||||||||||||||||||||||
Other liabilities | 879 | 1,019 | (140 | ) | |||||||||||||||||||||||||||
Liabilities from discontinued operations | 1,586 |
2,209 |
(623 |
) | |||||||||||||||||||||||||||
Stockholders' equity | 4,556 |
4,176 |
380 |
||||||||||||||||||||||||||||
Total average liabilities and stockholders' equity | $ | 35,182 | $ | 36,267 | ($1,085 | ) | |||||||||||||||||||||||||
Adjusted net interest income / margin non-taxable equivalent basis | $ | 1,398.4 | 4.67 | % | $ | 1,344.5 | 4.52 | % | $ | 53.9 | 0.15 | % | |||||||||||||||||||
Impact of fees related to repos refinancing | $ | 39.2 | |||||||||||||||||||||||||||||
Accelerated amortization of TARP discount and related deferred costs | 414.1 | ||||||||||||||||||||||||||||||
Net interest income/margin non-taxable equivalent basis | $ | 945.1 | 3.16 | % | |||||||||||||||||||||||||||
(1) Borrowing expense including the fees related to repos refinancing and the impact of the accelerated TARP amortization was 16.60%. | |||||||||||||||||||||||||||||||
Popular, Inc. | ||||||||||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||||||||||||||||||||||||
Table F - Mortgage Banking Activities and Other Service Fees | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
Mortgage Banking Activities |
Variance |
|||||||||||||||||||||||||||||||
Quarters ended | Q4 2014 vs. | Q4 2014 vs. | Years ended | Variance | ||||||||||||||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | Q3 2014 | Q4 2013 | 31-Dec-14 | 31-Dec-13 | 2014 vs. 2013 | ||||||||||||||||||||||||
Mortgage servicing fees, net of fair value adjustments: | ||||||||||||||||||||||||||||||||
Mortgage servicing fees | $ | 9,364 | $ | 11,091 | $ | 11,366 | $ | (1,727 | ) | $ | (2,002 | ) | $ | 41,761 | $ | 45,465 | $ | (3,704 | ) | |||||||||||||
Mortgage servicing rights fair value adjustments | (6,259 | ) | (2,588 | ) | (4,541 | ) | (3,671 | ) | (1,718 | ) | (24,683 | ) | (11,403 | ) | (13,280 | ) | ||||||||||||||||
Total mortgage servicing fees, net of fair value adjustments | 3,105 | 8,503 | 6,825 | (5,398 | ) | (3,720 | ) | 17,078 | 34,062 | (16,984 | ) | |||||||||||||||||||||
Net gain on sale of loans, including valuation on loans held-for-sale | 8,382 | 7,466 | 9,751 | 916 | (1,369 | ) | 31,213 | 26,719 | 4,494 | |||||||||||||||||||||||
Trading account (loss) profit: | ||||||||||||||||||||||||||||||||
Unrealized (losses) gains on outstanding derivative positions | (1 | ) | 13 | 1,011 | (14 | ) | (1,012 | ) | (726 | ) | 746 | (1,472 | ) | |||||||||||||||||||
Realized (losses) gains on closed derivative positions | (2,739 | ) | (1,580 | ) | (3,200 | ) | (1,159 | ) | 461 | (16,950 | ) | 10,130 | (27,080 | ) | ||||||||||||||||||
Total trading account (loss) profit | (2,740 | ) | (1,567 | ) | (2,189 | ) | (1,173 | ) | (551 | ) | (17,676 | ) | 10,876 | (28,552 | ) | |||||||||||||||||
Total mortgage banking activities | $ | 8,747 | $ | 14,402 | $ | 14,387 | $ | (5,655 | ) | $ | (5,640 | ) | $ | 30,615 | $ | 71,657 | $ | (41,042 | ) | |||||||||||||
Other Service Fees | Variance | ||||||||||||||||||||||||||
Quarters ended | Q4 2014 vs. | Q4 2014 vs. | Years ended | Variance | |||||||||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | Q3 2014 | Q4 2013 | 31-Dec-14 | 31-Dec-13 | 2014 vs. 2013 | |||||||||||||||||||
Other service fees: | |||||||||||||||||||||||||||
Debit card fees | $ | 10,929 | $ | 10,673 | $ | 10,785 | $ | 256 | $ | 144 | $ | 43,146 | $ | 41,912 | $ | 1,234 | |||||||||||
Insurance fees | 17,711 | 12,322 | 16,743 | 5,389 | 968 | 54,158 | 52,309 | 1,849 | |||||||||||||||||||
Credit card fees | 17,493 | 17,078 | 17,174 | 415 | 319 | 67,639 | 65,727 | 1,912 | |||||||||||||||||||
Sale and administration of investment products | 7,193 | 6,605 | 7,331 | 588 | (138 | ) | 27,711 | 35,272 | (7,561 | ) | |||||||||||||||||
Trust fees | 4,469 | 4,711 | 4,525 | (242 | ) | (56 | ) | 18,209 | 17,285 | 924 | |||||||||||||||||
Other fees | 3,345 | 3,450 | 3,529 | (105 | ) | (184 | ) | 14,402 | 16,846 | (2,444 | ) | ||||||||||||||||
Total other service fees | $ | 61,140 | $ | 54,839 | $ | 60,087 | $ | 6,301 | $ | 1,053 | $ | 225,265 | $ | 229,351 | $ | (4,086 | ) | ||||||||||
Popular, Inc. | |||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | |||||||||||||||||
Table G - Loans and Deposits | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Loans - Ending Balances | |||||||||||||||||
Variance | |||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 |
Q4 2014 vs. |
Q4 2014 vs. |
||||||||||||
Loans not covered under FDIC loss sharing agreements: | |||||||||||||||||
Commercial | $ | 8,134,267 | $ | 8,058,714 | $ | 10,037,184 | $ | 75,553 | $ | (1,902,917 | ) | ||||||
Construction | 251,820 | 211,850 | 206,084 | 39,970 | 45,736 | ||||||||||||
Legacy [1] | 80,818 | 91,015 | 211,135 | (10,197 | ) | (130,317 | ) | ||||||||||
Lease financing | 564,389 | 550,514 | 543,761 | 13,875 | 20,628 | ||||||||||||
Mortgage | 6,502,886 | 6,555,337 | 6,681,476 | (52,451 | ) | (178,590 | ) | ||||||||||
Consumer | 3,870,271 | 3,891,786 | 3,932,226 | (21,515 | ) | (61,955 | ) | ||||||||||
Total non-covered loans held-in-portfolio | $ | 19,404,451 | $ | 19,359,216 | $ | 21,611,866 | $ | 45,235 | $ | (2,207,415 | ) | ||||||
Loans covered under FDIC loss sharing agreements | 2,542,662 | 2,654,263 | 2,984,427 | (111,601 | ) | (441,765 | ) | ||||||||||
Total loans held-in-portfolio | $ | 21,947,113 | $ | 22,013,479 | $ | 24,596,293 | $ | (66,366 | ) | $ | (2,649,180 | ) | |||||
Loans held-for-sale: | |||||||||||||||||
Commercial | $ | 309 | $ | 33,658 | $ | 603 | $ | (33,349 | ) | $ | (294 | ) | |||||
Legacy [1] | 319 | 31,823 | - | (31,504 | ) | 319 | |||||||||||
Mortgage | 100,166 | 106,832 | 109,823 | (6,666 | ) | (9,657 | ) | ||||||||||
Consumer | 5,310 | 5,695 | - | (385 | ) | 5,310 | |||||||||||
Total loans held-for-sale | $ | 106,104 | $ | 178,008 | $ | 110,426 | $ | (71,904 | ) | $ | (4,322 | ) | |||||
Total loans | $ | 22,053,217 | $ | 22,191,487 | $ | 24,706,719 | $ | (138,270 | ) | $ | (2,653,502 | ) | |||||
[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 are presented as part of “Assets from discontinued operations” in the Consolidated Statement of Financial Condition. | |||||||||||||||||
Deposits - Ending Balances | |||||||||||||||||
Variance | |||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 |
Q4 2014 vs. |
Q4 2014 vs. |
||||||||||||
Demand deposits [1] | $ | 6,606,060 | $ | 6,326,220 | $ | 6,590,963 | $ | 279,840 | $ | 15,097 | |||||||
Savings, NOW and money market deposits (non-brokered) | 10,320,782 | 10,251,602 | 11,255,309 | 69,180 | (934,527 | ) | |||||||||||
Savings, NOW and money market deposits (brokered) | 406,248 | 386,573 | 553,521 | 19,675 | (147,273 | ) | |||||||||||
Time deposits (non-brokered) | 5,960,401 | 5,636,443 | 6,478,103 | 323,958 | (517,702 | ) | |||||||||||
Time deposits (brokered CDs) | 1,514,044 | 1,865,267 | 1,833,249 | (351,223 | ) | (319,205 | ) | ||||||||||
Total deposits | $ | 24,807,535 | $ | 24,466,105 | $ | 26,711,145 | $ | 341,430 | $ | (1,903,610 | ) | ||||||
[1] Includes interest and non-interest demand bearing deposits. | |||||||||||||||||
Note: Deposits from discontinued operations as of September 30, 2014 are presented as part of “Liabilities from discontinued operations” in the Consolidated Statement of Financial Condition. | |||||||||||||||||
Popular, Inc. | |||||||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | |||||||||||||||||||||||||||||
Table H - Non-Performing Assets | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Variance | |||||||||||||||||||||||||||||
(Dollars in thousands) | 31-Dec-14 | As a % of loans HIP by category | 30-Sep-14 | As a % of loans HIP by category | 31-Dec-13 | As a % of loans HIP by category |
Q4 2014 vs. |
Q4 2014 vs. |
|||||||||||||||||||||
Non-accrual loans: | |||||||||||||||||||||||||||||
Commercial | $ | 259,527 | 3.2 | % | $ | 252,331 | 3.1 | % | $ | 279,053 | 2.8 | % | $ | 7,196 | $ | (19,526 | ) | ||||||||||||
Construction | 13,812 | 5.5 | 19,148 | 9.0 | 23,771 | 11.5 | (5,336 | ) | (9,959 | ) | |||||||||||||||||||
Legacy [1] | 1,545 | 1.9 | 5,648 | 6.2 | 15,050 | 7.1 | (4,103 | ) | (13,505 | ) | |||||||||||||||||||
Lease financing | 3,102 | 0.5 | 3,168 | 0.6 | 3,495 | 0.6 | (66 | ) | (393 | ) | |||||||||||||||||||
Mortgage | 300,466 | 4.6 | 295,125 | 4.5 | 232,681 | 3.5 | 5,341 | 67,785 | |||||||||||||||||||||
Consumer | 46,886 | 1.2 | 46,525 | 1.2 | 43,898 | 1.1 | 361 | 2,988 | |||||||||||||||||||||
Total non-performing loans held-in-portfolio, excluding covered loans [2] |
625,338 | 3.2 | % | 621,945 | 3.2 | % | 597,948 | 2.8 | % | 3,393 | 27,390 | ||||||||||||||||||
Non-performing loans held-for-sale [3] | 18,899 | 19,728 | 1,092 | (829 | ) | 17,807 | |||||||||||||||||||||||
Other real estate owned (“OREO”), excluding covered OREO |
135,500 | 135,256 | 135,501 | 244 | (1 | ) | |||||||||||||||||||||||
Total non-performing assets, excluding covered assets |
779,737 | 776,929 | 734,541 | 2,808 | 45,196 | ||||||||||||||||||||||||
Covered loans and OREO |
148,099 |
166,533 | 197,388 |
(18,434 |
) |
(49,289 |
) | ||||||||||||||||||||||
Total non-performing assets | $ |
927,836 |
$ | 943,462 | $ | 931,929 | $ |
(15,626 |
) | $ |
(4,093 |
) | |||||||||||||||||
Accruing loans past due 90 days or more [4] | $ | 447,990 | $ | 426,459 | $ | 418,028 | $ | 21,531 | $ | 29,962 | |||||||||||||||||||
Ratios excluding covered loans: | |||||||||||||||||||||||||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio |
3.22 |
% |
|
3.21 |
% |
|
2.77 |
% |
|
||||||||||||||||||||
Allowance for loan losses to loans held-in-portfolio |
2.68 | 2.69 | 2.49 | ||||||||||||||||||||||||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale |
83.11 | 83.88 | 90.05 | ||||||||||||||||||||||||||
Ratios including covered loans: | |||||||||||||||||||||||||||||
Non-performing assets to total assets |
2.80 |
% |
|
2.77 |
% |
|
2.61 |
% |
|
||||||||||||||||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio |
2.93 | 2.89 | 2.55 | ||||||||||||||||||||||||||
Allowance for loan losses to loans held-in-portfolio |
2.74 | 2.78 | 2.60 | ||||||||||||||||||||||||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale |
93.57 |
95.96 | 102.11 | ||||||||||||||||||||||||||
[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 in discontinued operations as of September 30, 2014. | |||||||||||||||||||||||||||||
[3] Non-performing loans held-for-sale as of December 31, 2014, consisted of $14.0 million in mortgage loans, $309 thousand in commercial loans and $4.5 million in consumer loans (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; December 31, 2013 - $603 thousand in legacy loans and $489 thousand 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 non-performing 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 December 31, 2014 (September 30, 2014 - $125 million; December 31, 2013 - $115 million). | |||||||||||||||||||||||||||||
Popular, Inc. | ||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||||||||||||||||
Table I - Activity in Non-Performing Loans | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Commercial loans held-in-portfolio: | ||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||
31-Dec-14 | 30-Sep-14 | |||||||||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||||||||
Beginning balance NPLs | $ | 244,425 | $ | 7,906 | $ | 252,331 | $ | 253,552 | $ | 24,581 | $ | 278,133 | ||||||||||||
Plus: | ||||||||||||||||||||||||
New non-performing loans | 112,071 | 1,245 | 113,316 | 23,410 | 4,541 | 27,951 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Non-performing loans transferred to OREO | (2,072 | ) | - | (2,072 | ) | (2,706 | ) | - | (2,706 | ) | ||||||||||||||
Non-performing loans charged-off | (17,492 | ) | (1,298 | ) | (18,790 | ) | (10,085 | ) | (3,103 | ) | (13,188 | ) | ||||||||||||
Loans returned to accrual status / loan collections | (79,720 | ) | (2,895 | ) | (82,615 | ) | (19,746 | ) | (2,649 | ) | (22,395 | ) | ||||||||||||
Loans transferred to held-for-sale | - | (3,025 | ) | (3,025 | ) | - | (22,967 | ) | (22,967 | ) | ||||||||||||||
Non-performing loans transferred from (to) discontinued operations | - | 382 | 382 | - | 7,503 | 7,503 | ||||||||||||||||||
Ending balance NPLs | $ | 257,212 | $ | 2,315 | $ | 259,527 | $ | 244,425 | $ | 7,906 | $ | 252,331 | ||||||||||||
Construction loans held-in-portfolio: | ||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||
31-Dec-14 | 30-Sep-14 | |||||||||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||||||||
Beginning balance NPLs | $ | 19,148 | $ | - | $ | 19,148 | $ | 21,456 | $ | - | $ | 21,456 | ||||||||||||
Plus: | ||||||||||||||||||||||||
New non-performing loans | 573 | - | 573 | - | - | - | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Non-performing loans charged-off | (244 | ) | - | (244 | ) | (985 | ) | - | (985 | ) | ||||||||||||||
Loans returned to accrual status / loan collections | (5,665 | ) | - | (5,665 | ) | (1,323 | ) | - | (1,323 | ) | ||||||||||||||
Ending balance NPLs | $ | 13,812 | $ | - | $ | 13,812 | $ | 19,148 | $ | - | $ | 19,148 | ||||||||||||
Mortgage loans held-in-portfolio: | ||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||
31-Dec-14 | 30-Sep-14 | |||||||||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||||||||
Beginning balance NPLs | $ | 283,433 | $ | 11,692 | $ | 295,125 | $ | 262,356 | $ | 23,964 | $ | 286,320 | ||||||||||||
Plus: | ||||||||||||||||||||||||
New non-performing loans | 88,983 | 8,159 | 97,142 | 95,207 | 2,802 | 98,009 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Non-performing loans transferred to OREO | (1,051 | ) | - | (1,051 | ) | (3,062 | ) | (870 | ) | (3,932 | ) | |||||||||||||
Non-performing loans charged-off | (8,951 | ) | (96 | ) | (9,047 | ) | (11,309 | ) | (395 | ) | (11,704 | ) | ||||||||||||
Loans returned to accrual status / loan collections | (71,232 | ) | (4,309 | ) | (75,541 | ) | (53,003 | ) | (686 | ) | (53,689 | ) | ||||||||||||
Loans transferred to held-for-sale | - | (6,162 | ) | (6,162 | ) | - | (13,123 | ) | (13,123 | ) | ||||||||||||||
Reclassification to consumer loans | - | - | - | (6,756 | ) | - | (6,756 | ) | ||||||||||||||||
Ending balance NPLs | $ | 291,182 | $ | 9,284 | $ | 300,466 | $ | 283,433 | $ | 11,692 | $ | 295,125 | ||||||||||||
Legacy loans held-in-portfolio: | ||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||
31-Dec-14 | 30-Sep-14 | |||||||||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||||||||
Beginning balance NPLs | $ | - | $ | 5,648 | $ | 5,648 | $ | - | $ | 8,323 | $ | 8,323 | ||||||||||||
Plus: | ||||||||||||||||||||||||
New non-performing loans | - | 213 | 213 | - | 1,852 | 1,852 | ||||||||||||||||||
Advances on existing non-performing loans | - | 97 | 97 | - | 149 | 149 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Non-performing loans transferred to OREO | - | - | - | - | (189 | ) | (189 | ) | ||||||||||||||||
Non-performing loans charged-off | - | (744 | ) | (744 | ) | - | (2,109 | ) | (2,109 | ) | ||||||||||||||
Loans returned to accrual status / loan collections | - | (2,791 | ) | (2,791 | ) | - | (975 | ) | (975 | ) | ||||||||||||||
Loans transferred to held-for-sale | - | (878 | ) | (878 | ) | - | (2,529 | ) | (2,529 | ) | ||||||||||||||
Non-performing loans transferred from (to) discontinued operations | - | - | - | - | 1,126 | 1,126 | ||||||||||||||||||
Ending balance NPLs | $ | - | $ | 1,545 | $ | 1,545 | $ | - | $ | 5,648 | $ | 5,648 | ||||||||||||
Total non-performing loans held-in-portfolio (excluding consumer loans): | ||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||
31-Dec-14 | 30-Sep-14 | |||||||||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||||||||
Beginning balance NPLs | $ | 547,006 | $ | 25,246 | $ | 572,252 | $ | 537,364 | $ | 56,868 | $ | 594,232 | ||||||||||||
Plus: | ||||||||||||||||||||||||
New non-performing loans | 201,627 | 9,617 | 211,244 | 118,617 | 9,195 | 127,812 | ||||||||||||||||||
Advances on existing non-performing loans | - | 97 | 97 | - | 149 | 149 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Non-performing loans transferred to OREO | (3,123 | ) | - | (3,123 | ) | (5,768 | ) | (1,059 | ) | (6,827 | ) | |||||||||||||
Non-performing loans charged-off | (26,687 | ) | (2,138 | ) | (28,825 | ) | (22,379 | ) | (5,607 | ) | (27,986 | ) | ||||||||||||
Loans returned to accrual status / loan collections | (156,617 | ) | (9,995 | ) | (166,612 | ) | (74,072 | ) | (4,310 | ) | (78,382 | ) | ||||||||||||
Loans transferred to held-for-sale | - | (10,065 | ) | (10,065 | ) | - | (38,619 | ) | (38,619 | ) | ||||||||||||||
Non-performing loans transferred from (to) discontinued operations | - | 382 | 382 | - | 8,629 | 8,629 | ||||||||||||||||||
Reclassification to consumer loans | - | - | - | (6,756 | ) | - | (6,756 | ) | ||||||||||||||||
Ending balance NPLs | $ | 562,206 | $ | 13,144 | $ | 575,350 | $ | 547,006 | $ | 25,246 | $ | 572,252 | ||||||||||||
Popular, Inc. | ||||||||||||||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||||||||||||||||||||||||||||
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios | ||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
Quarter ended | Quarter ended | Quarter ended | ||||||||||||||||||||||||||||||||||
31-Dec-14 | 30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Non-covered loans | Covered loans | Total | Non-covered loans | Covered loans | Total | Non-covered loans | Covered loans | Total | |||||||||||||||||||||||||||
Balance at beginning of period | $ | 521,687 | $ | 89,688 | $ | 611,375 | $ | 526,246 | $ | 98,665 | $ | 624,911 | $ | 526,100 | $ | 116,828 | $ | 642,928 | ||||||||||||||||||
Provision for loan losses - Continuing operations | 51,637 | (3,646 | ) | 47,991 | 68,166 | 12,463 | 80,629 | 49,927 | 8,907 | 58,834 | ||||||||||||||||||||||||||
Provision for loan losses - Discontinued operations | - | - | - | - | - | - | (2,198 | ) | - | (2,198 | ) | |||||||||||||||||||||||||
573,324 | 86,042 | 659,366 | 594,412 | 111,128 | 705,540 | 573,829 | 125,735 | 699,564 | ||||||||||||||||||||||||||||
Net loans charged-off (recovered): | ||||||||||||||||||||||||||||||||||||
BPPR | ||||||||||||||||||||||||||||||||||||
Commercial |
13,890 |
3,230 |
17,120 |
1,011 | 16,590 | 17,601 | 15,177 | 13,433 | 28,610 | |||||||||||||||||||||||||||
Construction |
(279 |
) | (1,172 | ) |
(1,451 |
) | (1,237 | ) | 4,066 | 2,829 | (1,796 | ) | 6,067 | 4,271 | ||||||||||||||||||||||
Lease financing |
751 |
(6 | ) |
745 |
1,410 | (1 | ) | 1,409 | 838 | - | 838 | |||||||||||||||||||||||||
Mortgage | 12,228 | 2,725 | 14,953 | 13,330 | 1,809 | 15,139 | 6,981 | 4,729 | 11,710 | |||||||||||||||||||||||||||
Consumer | 25,933 | (808 | ) | 25,125 | 24,168 | (1,024 | ) | 23,144 | 14,056 | (586 | ) | 13,470 | ||||||||||||||||||||||||
Total BPPR | 52,523 | 3,969 | 56,492 | 38,682 | 21,440 | 60,122 | 35,256 | 23,643 | 58,899 | |||||||||||||||||||||||||||
BPNA | ||||||||||||||||||||||||||||||||||||
Commercial | (900 | ) | - | (900 | ) | (893 | ) | - | (893 | ) | 1,089 | - | 1,089 | |||||||||||||||||||||||
Construction | (2 | ) | - | (2 | ) | (59 | ) | - | (59 | ) | - | - | - | |||||||||||||||||||||||
Legacy [1] | (3,877 | ) | - | (3,877 | ) | 221 | - | 221 | (5,817 | ) | - | (5,817 | ) | |||||||||||||||||||||||
Mortgage | (93 | ) | - | (93 | ) | 26 | - | 26 | 660 | - | 660 | |||||||||||||||||||||||||
Consumer | 2,536 | - | 2,536 | 2,492 | - | 2,492 | 3,465 | - | 3,465 | |||||||||||||||||||||||||||
Discontinued operations | - | - | - | - | - | - | 713 | - | 713 | |||||||||||||||||||||||||||
Total BPNA | (2,336 | ) | - | (2,336 | ) | 1,787 | - | 1,787 | 110 | - | 110 | |||||||||||||||||||||||||
Total loans charged-off (recovered) - Popular, Inc. | 50,187 | 3,969 | 54,156 | 40,469 | 21,440 | 61,909 | 35,366 | 23,643 | 59,009 | |||||||||||||||||||||||||||
Net write-downs [3] | (3,418 | ) | - | (3,418 | ) | (32,256 | ) | - | (32,256 | ) | - | - | - | |||||||||||||||||||||||
Net write-downs related to loans transferred to discontinued operations | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Balance at end of period | $ | 519,719 | $ | 82,073 | $ | 601,792 | $ | 521,687 | $ | 89,688 | $ | 611,375 | $ | 538,463 | $ | 102,092 | $ | 640,555 | ||||||||||||||||||
POPULAR, INC. | ||||||||||||||||||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 1.04 | % | 0.99 | % | 0.83 | % | 1.12 | % | 0.66 | % | 0.97 | % | ||||||||||||||||||||||||
Provision for loan losses to net charge-offs [2] |
|
0.99x |
|
0.85x |
|
1.39x |
|
1.11x |
|
1.35x |
|
0.96x |
||||||||||||||||||||||||
BPPR | ||||||||||||||||||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 1.33 | % | 1.22 | % | 0.98 | % | 1.30 | % | 0.90 | % | 1.26 | % | ||||||||||||||||||||||||
Provision for loan losses to net charge-offs [2] |
|
0.99x |
|
0.86x |
|
1.60x |
|
1.24x |
|
1.78x |
|
1.22x |
||||||||||||||||||||||||
BPNA | ||||||||||||||||||||||||||||||||||||
Annualized net charge-offs (recoveries) to average loans held-in-portfolio | (0.27 | )% | 0.19 | % | 0.01 | % | ||||||||||||||||||||||||||||||
Provision for loan losses to net charge-offs |
|
N.M. |
|
N.M. |
|
(135.72)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 loans sold or reclassified to held-for-sale during the quarter ended December 31, 2014 and September 30, 2014. | ||||||||||||||||||||||||||||||||||||
[3] Net write-downs for the quarters ended December 31, 2014 and September 30, 2014 are related to loans sold or reclassified to held-for-sale. |
||||||||||||||||||||||||||||||||||||
N.M. - Not meaningful. | ||||||||||||||||||||||||||||||||||||
Year ended | Year ended | ||||||||||||||||||||||
(Dollars in thousands) | 31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||
Non-covered loans | Covered loans | Total | Non-covered loans | Covered loans | Total | ||||||||||||||||||
Balance at beginning of period | $ | 538,463 | $ | 102,092 | $ | 640,555 | $ | 621,701 | $ | 108,906 | $ | 730,607 | |||||||||||
Provision for loan losses - Continuing operations | 223,999 | 46,135 | 270,134 | 536,710 | 69,396 | 606,106 | |||||||||||||||||
Provision for loan losses - Discontinued operations | (6,764 | ) | - | (6,764 | ) | (3,543 | ) | - | (3,543 | ) | |||||||||||||
755,698 | 148,227 | 903,925 | 1,154,868 | 178,302 | 1,333,170 | ||||||||||||||||||
Net loans charged-off (recovered): | |||||||||||||||||||||||
BPPR | |||||||||||||||||||||||
Commercial |
39,382 |
32,906 |
72,288 |
85,601 | 27,607 | 113,208 | |||||||||||||||||
Construction |
(3,509 |
) | 27,686 |
24,177 |
(8,642 | ) | 34,108 | 25,466 | |||||||||||||||
Lease financing |
3,961 |
(7 | ) |
3,954 |
3,506 | - | 3,506 | ||||||||||||||||
Mortgage | 44,000 | 8,442 | 52,442 | 47,736 | 10,614 | 58,350 | |||||||||||||||||
Consumer | 96,655 | (2,873 | ) | 93,782 | 75,560 | 3,881 | 79,441 | ||||||||||||||||
Total BPPR | 180,489 | 66,154 | 246,643 | 203,761 | 76,210 | 279,971 | |||||||||||||||||
BPNA | |||||||||||||||||||||||
Commercial | 1,105 | - | 1,105 | 9,184 | - | 9,184 | |||||||||||||||||
Construction | (237 | ) | - | (237 | ) | - | - | - | |||||||||||||||
Legacy [1] | (9,070 | ) | - | (9,070 | ) | (3,897 | ) | - | (3,897 | ) | |||||||||||||
Mortgage | 1,196 | - | 1,196 | 7,803 | - | 7,803 | |||||||||||||||||
Consumer | 12,165 | - | 12,165 | 18,004 | - | 18,004 | |||||||||||||||||
Discontinued operations | (5,545 | ) | - | (5,545 | ) | 18,905 | - | 18,905 | |||||||||||||||
Total BPNA | (386 | ) | - | (386 | ) | 49,999 | - | 49,999 | |||||||||||||||
Total loans charged-off (recovered) - Popular, Inc. | 180,103 | 66,154 | 246,257 | 253,760 | 76,210 | 329,970 | |||||||||||||||||
Net write-downs [3] | (35,674 | ) | - | (35,674 | ) | (362,645 | ) | - | (362,645 | ) | |||||||||||||
Net write-downs related to loans transferred to discontinued operations | (20,202 | ) | - | (20,202 | ) | - | - | - | |||||||||||||||
Balance at end of period | $ | 519,719 | $ | 82,073 | $ | 601,792 | $ | 538,463 | $ | 102,092 | $ | 640,555 | |||||||||||
POPULAR, INC. | |||||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 0.92 | % | 1.10 | % | 1.19 | % | 1.34 | % | |||||||||||||||
Provision for loan losses to net charge-offs [2] |
|
1.17x |
|
1.04x |
|
0.85x |
|
0.86x |
|||||||||||||||
BPPR | |||||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 1.14 | % | 1.33 | % | 1.30 | % | 1.49 | % | |||||||||||||||
Provision for loan losses to net charge-offs [2] |
|
1.38x |
|
1.20x |
|
1.13x |
|
1.07x |
|||||||||||||||
BPNA | |||||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | (0.01 | )% | 0.87 | % | |||||||||||||||||||
Provision (reversal) for loan losses to net charge-offs |
|
102.57x |
|
(0.29)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 loans sold or reclassified to held-for-sale during the quarter ended December 31, 2014 and December 31, 2013. |
|||||||||||||||||||||||
[3] Net write-downs for the year ended December 31, 2014 and 2013 are related to loans sold or reclassified to held-for-sale. |
|||||||||||||||||||||||
Popular, Inc. | |||||||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | |||||||||||||||||||||||||||||
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy [3] | Mortgage | Lease financing | Consumer |
Total [2] |
||||||||||||||||||||||
Specific ALLL | $ | 64,736 | $ | 363 | $ | - | $ | 46,111 | $ | 770 | $ | 28,161 | $ | 140,141 | |||||||||||||||
Impaired loans | [1] | $ | 357,161 | $ | 13,268 | $ | - | $ | 435,824 | $ | 3,023 | $ | 117,732 | $ | 927,008 | ||||||||||||||
Specific ALLL to impaired loans | [1] | 18.13 | % | 2.74 | % | - | % | 10.58 | % | 25.47 | % | 23.92 | % | 15.12 | % | ||||||||||||||
General ALLL | $ | 146,501 | $ | 6,307 | $ | 2,944 | $ | 77,211 | $ | 6,361 | $ | 140,254 | $ | 379,578 | |||||||||||||||
Loans held-in-portfolio, excluding impaired loans | [1] | $ | 7,777,106 | $ | 238,552 | $ | 80,818 | $ | 6,067,062 | $ | 561,366 | $ | 3,752,539 | $ | 18,477,443 | ||||||||||||||
General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 1.88 | % | 2.64 | % | 3.64 | % | 1.27 | % | 1.13 | % | 3.74 | % | 2.05 | % | ||||||||||||||
Total ALLL | $ | 211,237 | $ | 6,670 | $ | 2,944 | $ | 123,322 | $ | 7,131 | $ | 168,415 | $ | 519,719 | |||||||||||||||
Total non-covered loans held-in-portfolio | [1] | $ | 8,134,267 | $ | 251,820 | $ | 80,818 | $ | 6,502,886 | $ | 564,389 | $ | 3,870,271 | $ | 19,404,451 | ||||||||||||||
ALLL to loans held-in-portfolio | [1] | 2.60 | % | 2.65 | % | 3.64 | % | 1.90 | % | 1.26 | % | 4.35 | % | 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 December 31, 2014 the general allowance on the covered loans amounted to $82.1 million, while the specific reserve amounted to $5 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-Sep-14 | |||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy [3] | Mortgage | Lease financing | Consumer |
Total [2] |
||||||||||||||||||||||
Specific ALLL | $ | 64,750 | $ | 133 | $ | - | $ | 38,207 | $ | 698 | $ | 28,166 | $ | 131,954 | |||||||||||||||
Impaired loans | [1] | $ | 373,501 | $ | 18,894 | $ | 2,311 | $ | 431,720 | $ | 2,709 | $ | 116,830 | $ | 945,965 | ||||||||||||||
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 | $ | 6,123,617 | $ | 547,805 | $ | 3,774,956 | $ | 18,413,251 | ||||||||||||||
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. |
Variance | ||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy | Mortgage | Lease financing | Consumer | Total | |||||||||||||||||||||
Specific ALLL | $ | (14 | ) | $ | 230 | $ | - | $ | 7,904 | $ | 72 | $ | (5 | ) | $ | 8,187 | ||||||||||||
Impaired loans | $ | (16,340 | ) | $ | (5,626 | ) | $ | (2,311 | ) | $ | 4,104 | $ | 314 | $ | 902 | $ | (18,957 | ) | ||||||||||
General ALLL | $ | (5,180 | ) | $ | (68 | ) | $ | (1,057 | ) | $ | (6,103 | ) | $ | (312 | ) | $ | 2,565 | $ | (10,155 | ) | ||||||||
Loans held-in-portfolio, excluding impaired loans | $ | 91,893 | $ | 45,596 | $ | (7,886 | ) | $ | (56,555 | ) | $ | 13,561 | $ | (22,417 | ) | $ | 64,192 | |||||||||||
Total ALLL | $ | (5,194 | ) | $ | 162 | $ | (1,057 | ) | $ | 1,801 | $ | (240 | ) | $ | 2,560 | $ | (1,968 | ) | ||||||||||
Total non-covered loans held-in-portfolio | $ | 75,553 | $ | 39,970 | $ | (10,197 | ) | $ | (52,451 | ) | $ | 13,875 | $ | (21,515 | ) | $ | 45,235 | |||||||||||
Popular, Inc. | ||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||||||||||||||||
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Puerto Rico | ||||||||||||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | ||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||
Specific ALLL non-covered loans | $ | 64,736 | $ | 363 | $ | 45,838 | $ | 770 | $ | 27,796 | $ | 139,503 | ||||||||||||
General ALLL non-covered loans | 136,853 | 5,120 | 75,022 | 6,361 | 126,276 | 349,632 | ||||||||||||||||||
ALLL - non-covered loans | 201,589 | 5,483 | 120,860 | 7,131 | 154,072 | 489,135 | ||||||||||||||||||
Specific ALLL covered loans | 5 | - | - | - | - | 5 | ||||||||||||||||||
General ALLL covered loans | 30,866 | 7,202 | 40,948 | - | 3,052 | 82,068 | ||||||||||||||||||
ALLL - covered loans | 30,871 | 7,202 | 40,948 | - | 3,052 | 82,073 | ||||||||||||||||||
Total ALLL | $ | 232,460 | $ | 12,685 | $ | 161,808 | $ | 7,131 | $ | 157,124 | $ | 571,208 | ||||||||||||
Loans held-in-portfolio: | ||||||||||||||||||||||||
Impaired non-covered loans | $ | 356,911 | $ | 13,268 | $ | 431,569 | $ | 3,023 | $ | 115,759 | $ | 920,530 | ||||||||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 6,017,892 | 146,116 | 5,018,932 | 561,366 | 3,273,278 | 15,017,584 | ||||||||||||||||||
Non-covered loans held-in-portfolio | 6,374,803 | 159,384 | 5,450,501 | 564,389 | 3,389,037 | 15,938,114 | ||||||||||||||||||
Impaired covered loans | 4,487 | 2,419 | - | - | - | 6,906 | ||||||||||||||||||
Covered loans held-in-portfolio, excluding impaired loans | 1,610,294 | 67,917 | 822,986 | - | 34,559 | 2,535,756 | ||||||||||||||||||
Covered loans held-in-portfolio | 1,614,781 | 70,336 | 822,986 | - | 34,559 | 2,542,662 | ||||||||||||||||||
Total loans held-in-portfolio | $ | 7,989,584 | $ | 229,720 | $ | 6,273,487 | $ | 564,389 | $ | 3,423,596 | $ | 18,480,776 | ||||||||||||
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 | ||||||||||||
Variance | ||||||||||||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | ||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||
Specific ALLL non-covered loans | $ | (14 | ) | $ | 230 | $ | 8,347 | $ | 72 | $ | 73 | $ | 8,708 | |||||||||||
General ALLL non-covered loans | (4,053 | ) | (414 | ) | (6,706 | ) | (312 | ) | 2,460 | (9,025 | ) | |||||||||||||
ALLL - non-covered loans | (4,067 | ) | (184 | ) | 1,641 | (240 | ) | 2,533 | (317 | ) | ||||||||||||||
Specific ALLL covered loans | 1 | - | - | - | - | 1 | ||||||||||||||||||
General ALLL covered loans | (5,545 | ) | 9 | (1,576 | ) | - | (504 | ) | (7,616 | ) | ||||||||||||||
ALLL - covered loans | (5,544 | ) | 9 | (1,576 | ) | - | (504 | ) | (7,615 | ) | ||||||||||||||
Total ALLL | $ | (9,611 | ) | $ | (175 | ) | $ | 65 | $ | (240 | ) | $ | 2,029 | $ | (7,932 | ) | ||||||||
Loans held-in-portfolio: | ||||||||||||||||||||||||
Impaired non-covered loans | $ | (16,138 | ) | $ | (5,626 | ) | $ | 7,233 | $ | 314 | $ | 909 | $ | (13,308 | ) | |||||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 121,219 | 16,227 | (9,854 | ) | 13,561 | (13,214 | ) | 127,939 | ||||||||||||||||
Non-covered loans held-in-portfolio | 105,081 | 10,601 | (2,621 | ) | 13,875 | (12,305 | ) | 114,631 | ||||||||||||||||
Impaired covered loans | 1,722 | - | - | - | - | 1,722 | ||||||||||||||||||
Covered loans held-in-portfolio, excluding impaired loans | (83,592 | ) | (4,132 | ) | (23,486 | ) | - | (2,113 | ) | (113,323 | ) | |||||||||||||
Covered loans held-in-portfolio | (81,870 | ) | (4,132 | ) | (23,486 | ) | - | (2,113 | ) | (111,601 | ) | |||||||||||||
Total loans held-in-portfolio | $ | 23,211 | $ | 6,469 | $ | (26,107 | ) | $ | 13,875 | $ | (14,418 | ) | $ | 3,030 | ||||||||||
Popular, Inc. | |||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | |||||||||||||||||||||||
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||
U.S. Mainland | |||||||||||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||
Specific ALLL | $ | - | $ | - | $ | - | $ | 273 | $ | 365 | $ | 638 | |||||||||||
General ALLL | 9,648 | 1,187 | 2,944 | 2,189 | 13,978 | 29,946 | |||||||||||||||||
Total ALLL | $ | 9,648 | $ | 1,187 | $ | 2,944 | $ | 2,462 | $ | 14,343 | $ | 30,584 | |||||||||||
Loans held-in-portfolio: | |||||||||||||||||||||||
Impaired loans | $ | 250 | $ | - | $ | - | $ | 4,255 | $ | 1,973 | $ | 6,478 | |||||||||||
Loans held-in-portfolio, excluding impaired loans | 1,759,214 | 92,436 | 80,818 | 1,048,130 | 479,261 | 3,459,859 | |||||||||||||||||
Total loans held-in-portfolio | $ | 1,759,464 | $ | 92,436 | $ | 80,818 | $ | 1,052,385 | $ | 481,234 | $ | 3,466,337 | |||||||||||
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 | $ | 7,384 | $ | 1,980 | $ | 12,127 | |||||||||||
Loans held-in-portfolio, excluding impaired loans | 1,788,540 | 63,067 | 88,704 | 1,094,831 | 488,464 | 3,523,606 | |||||||||||||||||
Total loans held-in-portfolio | $ | 1,788,992 | $ | 63,067 | $ | 91,015 | $ | 1,102,215 | $ | 490,444 | $ | 3,535,733 | |||||||||||
Variance | |||||||||||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||
Specific ALLL | $ | - | $ | - | $ | - | $ | (443 | ) | $ | (78 | ) | $ | (521 | ) | ||||||||
General ALLL | (1,127 | ) | 346 | (1,057 | ) | 603 | 105 | (1,130 | ) | ||||||||||||||
Total ALLL | $ | (1,127 | ) | $ | 346 | $ | (1,057 | ) | $ | 160 | $ | 27 | $ | (1,651 | ) | ||||||||
Loans held-in-portfolio: | |||||||||||||||||||||||
Impaired loans | $ | (202 | ) | $ | - | $ | (2,311 | ) | $ | (3,129 | ) | $ | (7 | ) | $ | (5,649 | ) | ||||||
Loans held-in-portfolio, excluding impaired loans | (29,326 | ) | 29,369 | (7,886 | ) | (46,701 | ) | (9,203 | ) | (63,747 | ) | ||||||||||||
Total loans held-in-portfolio | $ | (29,528 | ) | $ | 29,369 | $ | (10,197 | ) | $ | (49,830 | ) | $ | (9,210 | ) | $ | (69,396 | ) | ||||||
Popular, Inc. | ||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||||
Table N - Reconciliation to GAAP Financial Measures | ||||||||||||
(Unaudited) | ||||||||||||
(In thousands, except share or per share information) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | |||||||||
Total stockholders’ equity | $ | 4,271,390 | $ | 4,298,392 | $ | 4,626,150 | ||||||
Less: Preferred stock | (50,160 | ) | (50,160 | ) | (50,160 | ) | ||||||
Less: Goodwill | (465,676 | ) | (461,246 | ) | (647,757 | ) | ||||||
Less: Other intangibles | (37,595 | ) | (37,777 | ) | (45,132 | ) | ||||||
Total tangible common equity | $ | 3,717,959 | $ | 3,749,209 | $ | 3,883,101 | ||||||
Total assets | $ | 33,094,172 | $ | 34,099,095 | $ | 35,749,333 | ||||||
Less: Goodwill | (465,676 | ) | (461,246 | ) | (647,757 | ) | ||||||
Less: Other intangibles | (37,595 | ) | (37,777 | ) | (45,132 | ) | ||||||
Total tangible assets | $ | 32,590,901 | $ | 33,600,072 | $ | 35,056,444 | ||||||
Tangible common equity to tangible assets | 11.41 | % | 11.16 | % | 11.08 | % | ||||||
Common shares outstanding at end of period | 103,476,847 | 103,448,206 | 103,397,699 | |||||||||
Tangible book value per common share | $ | 35.93 | $ | 36.24 | $ | 37.56 | ||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | |||||||||
Common stockholders’ equity | $ | 4,221,230 | $ | 4,248,232 | $ | 4,575,990 | ||||||
Less: Unrealized losses (gains) on available-for-sale securities, net of tax[1] | (8,465 | ) | 16,787 | 48,344 | ||||||||
Less: Disallowed deferred tax assets[2] | (589,518 | ) | (618,141 | ) | (626,570 | ) | ||||||
Less: Disallowed goodwill and other intangible assets, net of deferred tax liability | (447,770 | ) | (444,759 | ) | (643,185 | ) | ||||||
Less: Aggregate adjusted carrying value of all non-financial equity investments | (1,299 | ) | (1,462 | ) | (1,442 | ) | ||||||
Add: Adjustment of pension and postretirement benefit plans and unrealized gains (losses) on cash flow hedges, net of tax[3] |
205,505 | 102,279 | 104,302 | |||||||||
Total Tier 1 common equity | $ | 3,379,683 | $ | 3,302,936 | $ | 3,457,439 | ||||||
Tier 1 common equity to risk-weighted assets |
15.92 |
% | 14.74 | % | 14.83 | % | ||||||
[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 $162 million of the Corporation’s $810 million of net deferred tax assets included as “Other assets” in the consolidated statement of financial condition at December 31, 2014 (September 30, 2014 - $147 million and $758 million, respectively; December 31, 2013 - $167 million and $762 million, respectively), were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $590 million of such assets at December 31, 2014 (September 30, 2014 - $618 million; December 31, 2013 - $627 million) exceeded the limitation imposed by these guidelines and, as “disallowed deferred tax assets”, were deducted in arriving at Tier 1 capital. The remaining $58 million of the Corporation’s other net deferred tax assets at December 31, 2014 (September 30, 2014 - $(7) million; December 31, 2013 - $(32) 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 Fourth Quarter 2014 Earnings Release | ||||||||||||
Table O - Financial Information - Westernbank Covered Loans | ||||||||||||
(Unaudited) | ||||||||||||
Revenues | ||||||||||||
Quarters ended | ||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | Variance | |||||||||
Interest income on covered loans | $ | 61,285 | $ | 68,251 | $ | (6,966 | ) | |||||
FDIC loss share expense: | ||||||||||||
Amortization of indemnification asset | (28,948 | ) | (42,524 | ) | 13,576 | |||||||
Reversal of accelerated amortization in prior periods | - | 15,046 | (15,046 | ) | ||||||||
80% mirror accounting on credit impairment losses [1] | (3,287 | ) | 9,863 | (13,150 | ) | |||||||
80% mirror accounting on reimbursable expenses | 18,742 | 15,545 | 3,197 | |||||||||
80% mirror accounting on recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC |
(2,542 | ) | (2,633 | ) | 91 | |||||||
Change in true-up payment obligation | (2,831 | ) | 1,078 | (3,909 | ) | |||||||
Other | 173 | (1,239 | ) | 1,412 | ||||||||
Total FDIC loss share expense | (18,693 | ) | (4,864 | ) | (13,829 | ) | ||||||
Total revenues | 42,592 | 63,387 | (20,795 | ) | ||||||||
Provision for loan losses | (3,646 | ) | 12,463 | (16,109 | ) | |||||||
Total revenues less provision for loan losses | $ | 46,238 | $ | 50,924 | $ | (4,686 | ) | |||||
[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) | 31-Dec-14 | 30-Sep-14 | Variance | |||||||||
Professional fees | $ | 7,167 | $ | 5,164 | $ | 2,003 | ||||||
OREO expenses | 13,116 | 11,661 | 1,455 | |||||||||
Other operating expenses | 2,668 | 3,160 | (492 | ) | ||||||||
Total operating expenses | $ | 22,951 | $ | 19,985 | $ | 2,966 | ||||||
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) | 31-Dec-14 | 30-Sep-14 | Variance | |||||||||
Covered loans | $ | 2,615 | $ | 2,727 | $ | (112 | ) | |||||
FDIC loss share asset | 616 | 687 | (71 | ) | ||||||||
Activity in the carrying amount and accretable yield of covered loans accounted for under ASC 310-30 | ||||||||||||||||
Quarters ended | ||||||||||||||||
31-Dec-14 | 30-Sep-14 | |||||||||||||||
(In thousands) | Accretable yield | Carrying amount of loans | Accretable yield | Carrying amount of loans | ||||||||||||
Beginning balance | $ | 1,312,521 | $ | 2,528,433 | $ | 1,280,758 | $ | 2,610,664 | ||||||||
Accretion | (59,474 | ) | 59,474 | (66,017 | ) | 66,017 | ||||||||||
Changes in expected cash flows | 18,290 | - | 97,780 | - | ||||||||||||
Collections / charge-offs | - | (143,735 | ) | - | (148,248 | ) | ||||||||||
Ending balance | 1,271,337 | 2,444,172 | 1,312,521 | 2,528,433 | ||||||||||||
Allowance for loan losses - ASC 310-30 covered loans | - | (78,846 | ) | - | (85,640 | ) | ||||||||||
Ending balance, net of allowance for loan losses | $ | 1,271,337 | $ | 2,365,326 | $ | 1,312,521 | $ | 2,442,793 | ||||||||
Activity in the carrying amount of the FDIC indemnity asset | ||||||||||||||||
Quarters ended | ||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | ||||||||||||||
Balance at beginning of period | $ | 681,106 | $ | 751,553 | ||||||||||||
Amortization | (28,948 | ) | (42,524 | ) | ||||||||||||
Reversal of accelerated amortization in prior periods | - | 15,046 | ||||||||||||||
Credit impairment losses to be covered under loss sharing agreements | (3,287 | ) | 9,863 | |||||||||||||
Reimbursable expenses to be covered under loss sharing agreements | 18,742 | 15,545 | ||||||||||||||
Payments from FDIC under loss sharing agreements | (83,434 | ) | (73,106 | ) | ||||||||||||
Recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC | 7,527 | 4,729 | ||||||||||||||
Balance at end of period | 591,706 | 681,106 | ||||||||||||||
Balance due to the FDIC for recoveries on covered assets | (49,252 | ) | (44,775 | ) | ||||||||||||
Net balance of indemnity asset and amounts due from the FDIC | $ | 542,454 | $ | 636,331 | ||||||||||||
Activity in the remaining FDIC loss share asset amortization | ||||||||||||||||
Quarters ended | ||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | ||||||||||||||
Balance at beginning of period | $ | 66,562 | $ | 105,939 | ||||||||||||
Amortization | (28,948 | ) | (42,524 | ) | ||||||||||||
Impact of lower projected losses | 15,481 | 3,147 | ||||||||||||||
Balance at end of period | $ | 53,095 | $ | 66,562 | ||||||||||||
POPULAR, INC. | ||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||||||||||||
Table P - Financial Information from Discontinued Operations | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Assets and Liabilities from Discontinued Operations | ||||||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | Variance | |||||||||||||||||
Cash | $ | - | $ | 9,500 | $ | (9,500 | ) | |||||||||||||
Loans held-for-sale | - | 1,099,673 | (1,099,673 | ) | ||||||||||||||||
Premises and equipment, net | - | 8,596 | (8,596 | ) | ||||||||||||||||
Other assets | - | 11,284 | (11,284 | ) | ||||||||||||||||
Total assets | $ | - | $ | 1,129,053 | $ | (1,129,053 | ) | |||||||||||||
Deposits | $ | - | $ | 1,089,046 | $ | (1,089,046 | ) | |||||||||||||
Other liabilities | 5,064 | 17,716 | (12,652 | ) | ||||||||||||||||
Total liabilities | $ | 5,064 | $ | 1,106,762 | $ | (1,101,698 | ) | |||||||||||||
Net (liabilities) assets | $ | (5,064 | ) | $ | 22,291 | $ | (27,355 | ) | ||||||||||||
Components of Net Income (Loss) from Discontinued Operations | ||||||||||||||||||||
Quarters ended | Years ended | |||||||||||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | 31-Dec-14 | 31-Dec-13 | |||||||||||||||
Net interest income | $ | 4,441 | $ | 16,022 | $ | 21,834 | $ | 61,352 | $ | 88,006 | ||||||||||
Provision (reversal) for loan losses | - | - | (2,198 | ) | (6,764 | ) | (3,543 | ) | ||||||||||||
Net gain on sale of regions | 8,054 | 25,775 | - | 33,829 | - | |||||||||||||||
Other non-interest income | 1,335 | 6,567 | 5,914 | 27,823 | 19,556 | |||||||||||||||
Total non-interest income | 9,389 | 32,342 | 5,914 | 61,652 | 19,556 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Personnel costs | 3,765 | 11,941 | 7,955 | 36,675 | 33,170 | |||||||||||||||
Net occupancy expenses | (2,785 | ) | (1,305 | ) | 3,325 | 3,086 | 12,680 | |||||||||||||
Professional fees | 2,030 | 4,916 | 2,642 | 15,642 | 11,153 | |||||||||||||||
Goodwill impairment charge | - | - | - | 186,511 | - | |||||||||||||||
Other operating expenses | 1,734 | 3,054 | 4,171 | 10,834 | 13,593 | |||||||||||||||
Total operating expenses | 4,744 | 18,606 | 18,093 | 252,748 | 70,596 | |||||||||||||||
Net income (loss) from discontinued operations | $ | 9,086 | $ | 29,758 | $ | 11,853 | $ | (122,980 | ) | $ | 40,509 | |||||||||
POPULAR, INC. | ||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | ||||||||||
Table Q - Restructuring Charges | ||||||||||
(Unaudited) | ||||||||||
Restructuring Charges | ||||||||||
Quarters ended | ||||||||||
(In thousands) | 31-Dec-14 | 30-Sep-14 | Variance | |||||||
Personnel costs | $ | 7,692 | $ | 6,194 | $ | 1,498 | ||||
Net occupancy expenses | 3,482 | 152 | 3,330 | |||||||
Equipment expenses | 126 | 141 | (15 | ) | ||||||
Professional fees | 1,254 | 1,431 | (177 | ) | ||||||
Communications | 128 | 14 | 114 | |||||||
Other operating expenses | 1,179 | 358 | 821 | |||||||
Total restructuring costs | $ | 13,861 | $ | 8,290 | $ | 5,571 | ||||
Popular, Inc. | |||||||||||||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2014 Earnings Release | |||||||||||||||||||||||||||||||||||
Table R - Adjusted Consolidated Statement of Operations for the Year Ended December 31, 2014 (Non-GAAP) | |||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Year ended | |||||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||||
2nd QTR | 3rd QTR | 4th QTR | |||||||||||||||||||||||||||||||||
(In thousands) | Actual Results (US GAAP) | TARP repayment discount amortization and Income Tax adjustments [2] | BPNA Reorganization [3] | BPNA Reorganization [3] | Income Tax Adjustments [4] | Indemnification Assets Adjustment [5] | BPNA Reorganization [3] | Other Adjustments | Adjusted Results (Non-GAAP) | ||||||||||||||||||||||||||
Net interest income | $ | 945,072 | $ | (414,068 | ) | $ | - | $ | (20,663 | ) | $ | - | $ | - | $ | (18,591 | ) | $ | - | $ | 1,398,394 | ||||||||||||||
Provision for loan losses – non-covered loans | 223,999 | - | - | 11,950 | - | - | 878 | - | 211,171 | ||||||||||||||||||||||||||
Provision for loan losses – covered loans [1] | 46,135 | - | - | - | - | - | - | - | 46,135 | ||||||||||||||||||||||||||
Net interest income after provision for loan losses | 674,938 | (414,068 | ) | - | (32,613 | ) | - | - | (19,469 | ) | - | 1,141,088 | |||||||||||||||||||||||
Service charges on deposit accounts and other service fees | 383,902 | - | - | - | - | - | - | - | 383,902 | ||||||||||||||||||||||||||
Mortgage banking activities | 30,615 | - | - | - | - | - | - | - | 30,615 | ||||||||||||||||||||||||||
Net loss and valuation adjustments on investments securities | (870 | ) | - | - | - | - | - | - | - | (870 | ) | ||||||||||||||||||||||||
Trading account profit | 4,358 | - | - | - | - | - | - | - | 4,358 | ||||||||||||||||||||||||||
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale | 40,591 | - | - | - | - | - | 1,684 | - | 38,907 | ||||||||||||||||||||||||||
Adjustments (expense) to indemnity reserves on loans sold | (34,098 | ) | - | - | - | - | - | - | - | (34,098 | ) | ||||||||||||||||||||||||
FDIC loss share expense | (103,024 | ) | - | - | - | - | 12,492 | - | - | (115,516 | ) | ||||||||||||||||||||||||
Other non-interest income | 71,572 | - | - | - | - | - | - | - | 71,572 | ||||||||||||||||||||||||||
Total non-interest income | 393,046 | - | - | - | - | 12,492 | 1,684 | - | 378,870 | ||||||||||||||||||||||||||
Personnel costs | 418,679 | - | - | - | - | - | - | 2,974[6] | 415,705 | ||||||||||||||||||||||||||
Net occupancy expenses | 86,707 | - | - | - | - | - | - | 1,895[7] | 84,812 | ||||||||||||||||||||||||||
Other taxes | 56,918 | - | - | - | - | - | - | - | 56,918 | ||||||||||||||||||||||||||
Loss on early extinguishment of debt | 532 | - | - | - | - | - | 532 | - | - | ||||||||||||||||||||||||||
Professional fees | 282,055 | - | - | - | - | - | - | - | 282,055 | ||||||||||||||||||||||||||
OREO expense | 49,611 | - | - | - | - | - | - | - | 49,611 | ||||||||||||||||||||||||||
Restructuring costs | 26,725 | - | 4,574 | 8,290 | - | - | 13,861 | - | - | ||||||||||||||||||||||||||
Other operating expenses | 272,457 | - | - | - | - | - | - | - | 272,457 | ||||||||||||||||||||||||||
Total operating expenses | 1,193,684 | - | 4,574 | 8,290 | - | - | 14,393 | 4,869 | 1,161,558 | ||||||||||||||||||||||||||
(Loss) income from continuing operations before income tax | (125,700 | ) | (414,068 | ) | (4,574 | ) | (40,903 | ) | - | 12,492 | (32,178 | ) | (4,869 | ) | 358,400 | ||||||||||||||||||||
Income tax expense (benefit) | 60,802 | (15,393 | ) | - | - | 20,048 | 2,498 | - | - | 53,649 | |||||||||||||||||||||||||
(Loss) income from continuing operations | $ | (186,502 | ) | $ | (398,675 | ) | $ | (4,574 | ) | $ | (40,903 | ) | $ | (20,048 | ) | $ | 9,994 | $ | (32,178 | ) | $ | (4,869 | ) | $ | 304,751 | ||||||||||
[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 $8.0 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. | |||||||||||||||||||||||||||||||||||
[3] Includes the aggregated impact of $39.8 million refinancing fees of structured repos, net loss of $11.1 million in bulk loan sales and $26.7 million in restructuring incurred in connection with the reorganization of PCB. |
|||||||||||||||||||||||||||||||||||
[4] On July 1, 2014, the Government of Puerto Rico approved an amendment to the Internal Revenue Code, which, among 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. | |||||||||||||||||||||||||||||||||||
[5] The FDIC indemnity assets amortization included a positive adjustment of $12.5 million to reverse the impact of accelerated amortization expense recorded in prior periods. |
|||||||||||||||||||||||||||||||||||
[6] Represents the impact of the compensation package granted upon separation of an officer of the Corporation equal to approximately $3.0 million. | |||||||||||||||||||||||||||||||||||
[7] Represents the net loss on the early cancellation of a lease at BPNA of $1.9 million. |
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