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):
July
24, 2015
POPULAR,
INC.
(Exact
name of registrant as specified in its charter)
COMMONWEALTH OF PUERTO |
001-34084 |
66-0667416 |
(State or other jurisdiction of |
(Commission File Number) |
(IRS Employer Identification |
209 MUNOZ RIVERA AVENUE HATO REY, PUERTO RICO |
00918 |
|
(Address of principal executive offices) |
(Zip code) |
(787) 765-9800 |
(Registrant's telephone number, including area code) |
NOT APPLICABLE |
|
(Former name, former address and former fiscal year, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On July 24, 2015 Popular, Inc. issued a news release announcing its unaudited financial results for the quarter ended June 30, 2015, 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 July 24, 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: |
July 24, 2015 |
By: /s/ Jorge J. García |
Jorge J. García |
||
Senior Vice President and Corporate Comptroller |
Exhibit 99.1
Popular, Inc. Announces Second Quarter Financial Results
SAN JUAN, Puerto Rico--(BUSINESS WIRE)--July 24, 2015--Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $597.5 million and adjusted net income of $90.1 million for the quarter ended June 30, 2015, compared to net income of $74.8 million and an adjusted net income of $90.3 million for the quarter ended March 31, 2015.
Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said, "Despite a difficult operating environment in our home market, we are pleased to report stable credit metrics and earnings results. We are also encouraged by recent organic growth in our US business as well as the successful integration of the Doral transactions and the continued strength of our Puerto Rico franchise."
Earnings Highlights | ||||||||||||||
(Unaudited) | Quarters ended | Six months ended | ||||||||||||
(Dollars in thousands, except per share information) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | 30-Jun-15 | 30-Jun-14 | |||||||||
Net interest income (expense) | $362,553 | $343,195 | $(59,381 | ) | $705,748 | $291,790 | ||||||||
Provision for loan losses – non-covered loans | 60,468 | 29,711 | 50,074 | 90,179 | 104,196 | |||||||||
Provision for loan losses – covered loans [1] | 15,766 | 10,324 | 11,604 | 26,090 | 37,318 | |||||||||
Net interest income (expense) after provision for loan losses | 286,319 | 303,160 | (121,059 | ) | 589,479 | 150,276 | ||||||||
FDIC loss share income (expense) | 19,075 | 4,139 | (55,261 | ) | 23,214 | (79,467 | ) | |||||||
Other non-interest income | 121,684 | 111,096 | 118,050 | 232,780 | 238,288 | |||||||||
Operating expenses | 363,174 | 312,342 | 275,439 | 675,515 | 553,038 | |||||||||
Income (loss) from continuing operations before income tax | 63,904 | 106,053 | (333,709 | ) | 169,958 | (243,941 | ) | |||||||
Income tax (benefit) expense | (533,533 | ) | 32,568 | (4,124 | ) | (500,964 | ) | 19,140 | ||||||
Income (loss) from continuing operations | 597,437 | 73,485 | (329,585 | ) | 670,922 | (263,081 | ) | |||||||
Income (loss) from discontinued operations, net of tax | 15 | 1,341 | (181,729 | ) | 1,356 | (161,824 | ) | |||||||
Net income (loss) | $597,452 | $74,826 | $(511,314 | ) | $672,278 | $(424,905 | ) | |||||||
Net income (loss) applicable to common stock | $596,521 | $73,896 | $(512,245 | ) | $670,417 | $(426,767 | ) | |||||||
Net income (loss) per common share from continuing operations - Basic | $5.80 | $0.71 | $(3.21 | ) | $6.51 | $(2.58 | ) | |||||||
Net income (loss) per common share from continuing operations - Diluted | $5.79 | $0.71 | $(3.21 | ) | $6.49 | $(2.58 | ) | |||||||
Net income (loss) per common share from discontinued operations - Basic | - | $0.01 | $(1.77 | ) | $0.01 | $(1.57 | ) | |||||||
Net income (loss) per common share from discontinued operations - Diluted | - | $0.01 | $(1.77 | ) | $0.01 | $(1.57 | ) | |||||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss sharing agreement. | ||||||||||||||
Significant Events
The increase in the net deferred tax asset did not have a material impact on regulatory capital. However, it increased the tangible book value per common share by $5.27.
The following tables reflect the results of operations for the second and first quarters of 2015, with adjustments to exclude the impact of significant events.
Quarter ended | |||||||||||||||||||||||
(Unaudited) | 30-Jun-15 | ||||||||||||||||||||||
(In thousands) |
Actual Results (US GAAP) |
BPNA Reorganization [2] | Doral Acquisition [3] | OTTI [4] | Reversal DTA - BPNA [5] | Loss on Bulk Sale of Covered OREOs [6] | Adjustment to FDIC Indemnification Asset [7] | Adjusted Results (Non-GAAP) | |||||||||||||||
Net interest income | $362,553 | $- | $- | $- | $- | $- | $- | $362,553 | |||||||||||||||
Provision for loan losses – non-covered loans | 60,468 | - | - | - | - | - | - | 60,468 | |||||||||||||||
Provision for loan losses – covered loans [1] | 15,766 | - | - | - | - | - | - | 15,766 | |||||||||||||||
Net interest income after provision for loan losses | 286,319 | - | - | - | - | - | - | 286,319 | |||||||||||||||
Net (loss) and valuation adjustments on investment securities | (14,440 | ) | - | - | (14,445 | ) | - | - | - | 5 | |||||||||||||
FDIC loss share income | 19,075 | - | - | - | - | 17,566 | (10,887 | ) | 12,396 | ||||||||||||||
Other non-interest income | 136,124 | - | 961 | - | - | - | - | 135,163 | |||||||||||||||
Total non-interest income | 140,759 | - | 961 | (14,445 | ) | - | 17,566 | (10,887 | ) | 147,564 | |||||||||||||
Personnel costs | 120,977 | - | 3,865 | - | - | - | - | 117,112 | |||||||||||||||
Net occupancy expenses | 23,286 | - | 2,309 | - | - | - | - | 20,977 | |||||||||||||||
Equipment expenses | 15,925 | - | 725 | - | - | - | - | 15,200 | |||||||||||||||
Professional fees | 78,449 | - | 4,885 | - | - | - | - | 73,564 | |||||||||||||||
Communications | 6,153 | - | 70 | - | - | - | - | 6,083 | |||||||||||||||
Business promotion | 13,776 | - | 401 | - | - | - | - | 13,375 | |||||||||||||||
Other real estate owned (OREO) expenses | 44,816 | - | - | - | - | 21,957 | - | 22,859 | |||||||||||||||
Restructuring costs | 6,174 | 6,174 | - | - | - | - | - | - | |||||||||||||||
Other operating expenses | 53,618 | - | 509 | - | - | - | - | 53,109 | |||||||||||||||
Total operating expenses | 363,174 | 6,174 | 12,764 | - | - | 21,957 | - | 322,279 | |||||||||||||||
Income from continuing operations before income tax | 63,904 | (6,174 | ) | (11,803 | ) | (14,445 | ) | - | (4,391 | ) | (10,887 | ) | 111,604 | ||||||||||
Income tax (benefit) expense | (533,533 | ) | - | (3,744 | ) | (2,486 | ) | (544,927 | ) | (1,712 | ) | (2,177 | ) | 21,513 | |||||||||
Income from continuing operations | $597,437 | $(6,174 | ) | $(8,059 | ) | $(11,959 | ) | $544,927 | $(2,679 | ) | $(8,710 | ) | $90,091 | ||||||||||
Income from discontinued operations, net of tax | $15 | $15 | $- | $- | $- | $- | $- | $- | |||||||||||||||
Net income | $597,452 | $(6,159 | ) | $(8,059 | ) | $(11,959 | ) | $544,927 | $(2,679 | ) | $(8,710 | ) | $90,091 | ||||||||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss sharing agreement. | |||||||||||||||||||||||
[2] Represents restructuring charges associated with the reorganization of BPNA. | |||||||||||||||||||||||
[3] Includes approximately $1.0 million of fees charged for services provided to the alliance co-bidders, including loan servicing and other interim services, personnel costs related to former Doral Bank employees retained on a temporary basis and incentive compensation for an aggregate of $3.9 million, building rent expense of Doral Bank’s administrative offices for $2.3 million, professional fees and business promotion expenses directly associated with the Doral Acquisition and systems conversion for $5.3 million and other expenses, including equipment and communications, of $1.3 million. |
|||||||||||||||||||||||
[4] Represents an other than temporary impairment (“OTTI”) recorded on Puerto Rico government investment securities available- for- sale. These securities had an amortized cost of approximately $41.1 million and a market value of $26.6 million. Based on the fiscal and economic situation in Puerto Rico, together with the government’s recent announcements regarding its ability to pay its debt, the Corporation determined that the unrealized loss, a portion of which had been in an unrealized loss for a period exceeding twelve months, was other than temporary. | |||||||||||||||||||||||
[5] Represents the partial reversal of the valuation allowance of a portion of the deferred tax asset amounting to approximately $1.2 billion, at the U.S. operations. Refer to additional details on the Income Taxes section of this earnings release. | |||||||||||||||||||||||
[6] Represents the loss on a bulk sale of covered OREOs completed in the second quarter and the related mirror accounting of the 80% reimbursable from the FDIC. | |||||||||||||||||||||||
[7] The quarter’s negative amortization of the FDIC’s Indemnification Asset included a $10.9 million expense related to losses incurred by the corporation that were not claimed to the FDIC before the expiration of the loss-share portion of the agreement on June 30, 2015, and that are not subject to the ongoing arbitrations. |
|||||||||||||||||||||||
Quarter ended | ||||||||||
(Unaudited) | 31-Mar-15 | |||||||||
(In thousands) | Actual Results (US GAAP) | BPNA Reorganization [2] | Doral Acquisition [3] | Adjusted Results (Non-GAAP) | ||||||
Net interest income | $343,195 | $- | $- | $343,195 | ||||||
Provision for loan losses – non-covered loans | 29,711 | - | - | 29,711 | ||||||
Provision for loan losses – covered loans [1] | 10,324 | - | - | 10,324 | ||||||
Net interest income after provision for loan losses | 303,160 | - | - | 303,160 | ||||||
FDIC loss share income | 4,139 | - | - | 4,139 | ||||||
Other non-interest income | 111,096 | - | 1,121 | 109,975 | ||||||
Total non-interest income | 115,235 | - | 1,121 | 114,114 | ||||||
Personnel costs | 116,458 | - | 2,432 | 114,026 | ||||||
Net occupancy expenses | 21,709 | - | 643 | 21,066 | ||||||
Equipment expenses | 13,411 | - | - | 13,411 | ||||||
Professional fees | 75,528 | - | 6,997 | 68,531 | ||||||
Communications | 6,176 | - | - | 6,176 | ||||||
Business promotion | 10,813 | - | - | 10,813 | ||||||
Other real estate owned (OREO) expenses | 23,069 | - | - | 23,069 | ||||||
Restructuring costs | 10,753 | 10,753 | - | - | ||||||
Other operating expenses | 34,425 | - | - | 34,425 | ||||||
Total operating expenses | 312,342 | 10,753 | 10,072 | 291,517 | ||||||
Income from continuing operations before income tax | 106,053 | (10,753 | ) | (8,951 | ) | 125,757 | ||||
Income tax expense | 32,568 | - | (2,896 | ) | 35,464 | |||||
Income from continuing operations | $73,485 | $(10,753 | ) | $(6,055 | ) | $90,293 | ||||
Income from discontinued operations, net of tax | $1,341 | $1,341 | $- | $- | ||||||
Net income | $74,826 | $(9,412 | ) | $(6,055 | ) | $90,293 | ||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss sharing agreement. | ||||||||||
[2] Represents restructuring charges associated with the reorganization of BPNA. | ||||||||||
[3] Includes $1.1 million of fees charged for services provided to the alliance co-bidders, including loan servicing and other interim services, personnel costs related to former Doral Bank employees retained on a temporary basis and incentive compensation for an aggregate of $2.4 million, building rent expense of Doral Bank’s administrative offices for $0.6 million and professional and legal fees directly associated with the Doral Bank acquisition for $7.0 million. |
||||||||||
Quarters ended | |||||||
(Unaudited) | Adjusted Results Non-GAAP | ||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | Variance | ||||
Net interest income | $362,553 | $343,195 | $19,358 | ||||
Provision for loan losses – non-covered loans | 60,468 | 29,711 | 30,757 | ||||
Provision for loan losses – covered loans [1] | 15,766 | 10,324 | 5,442 | ||||
Net interest income after provision for loan losses | 286,319 | 303,160 | (16,841 | ) | |||
Net (loss) and valuation adjustments on investment securities | 5 | - | 5 | ||||
FDIC loss share income (expense) | 12,396 | 4,139 | 8,257 | ||||
Other non-interest income | 135,163 | 109,975 | 25,188 | ||||
Total non-interest income | 147,564 | 114,114 | 33,450 | ||||
Personnel costs | 117,112 | 114,026 | 3,086 | ||||
Net occupancy expenses | 20,977 | 21,066 | (89 | ) | |||
Equipment expenses | 15,200 | 13,411 | 1,789 | ||||
Professional fees | 73,564 | 68,531 | 5,033 | ||||
Communications | 6,083 | 6,176 | (93 | ) | |||
Business promotion | 13,375 | 10,813 | 2,562 | ||||
Other real estate owned (OREO) expenses | 22,859 | 23,069 | (210 | ) | |||
Other operating expenses | 53,109 | 34,425 | 18,684 | ||||
Total operating expenses | 322,279 | 291,517 | 30,762 | ||||
Income from continuing operations before income tax | 111,604 | 125,757 | (14,153 | ) | |||
Income tax expense | 21,513 | 35,464 | (13,951 | ) | |||
Income from continuing operations | $90,091 | $90,293 | $(202 | ) | |||
Net income | $90,091 | $90,293 | $(202 | ) | |||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss sharing agreement. | |||||||
Net interest income
The increase of $19.4 million in the net interest income is mainly related to:
These positive variances in net interest income were offset in part by:
BPPR’s net interest income amounted to $316.1 million for the quarter ended June 30, 2015, compared with $306.6 million for the previous quarter. The increase in net interest income was mainly due to higher average volume of interest earning assets from the Doral Acquisition, an increase in mortgage backed securities and higher yields on mortgage loans. This increase was partially offset by lower income from covered loans as part of the portfolio run-off. Net interest margin for the quarter was 4.92%, a decrease of 8 basis points from the previous quarter. The decline in yield was attributed to lower yields mostly related to the investment portfolio’s asset mix. Cost of interest bearing deposits in Puerto Rico was relatively flat at 52 basis points.
BPNA’s net interest income was $61.9 million, compared with $52.1 million for the previous quarter. The increase in the net interest income is mainly driven by commercial and construction loan origination as well as the impact of the Doral Acquisition. The contribution from the Doral Acquisition to BPNA’s net interest income was $14.6 million. Net interest margin was 4.03%, compared to 3.82% for the previous quarter, an increase of 21 basis points mostly due to a lower cost of interest bearing deposits by 11 basis points and higher yield from commercial loans.
Non-interest income
Non-interest income was $140.8 million for the second quarter of 2015, an increase of $25.5 million when compared with the first quarter of 2015. Excluding the impact of the significant events detailed in the Adjusted Results (Non-GAAP) tables above, non-interest income increased by $33.5 million when compared to the first quarter of 2015, driven primarily by the following:
The results for the second quarter of 2015 include an other than temporary impairment charge on its portfolio of Puerto Rico government investment securities available-for-sale of $14.4 million. These securities had an amortized cost of approximately $41.1 million and a market value of $26.6 million. Based on the fiscal and economic situation in Puerto Rico, together with the government’s recent announcements regarding its ability to pay its debt, the Corporation determined that the unrealized loss, a portion of which had been in an unrealized loss for a period exceeding twelve months, was other than temporary.
Refer to Table B for further details.
Financial Impact of FDIC-Assisted Transaction | |||||||
(Unaudited) | Quarters ended | ||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | ||||
Income Statement |
|||||||
Interest income on covered loans | $55,335 | $57,431 | $82,975 | ||||
Total FDIC loss share income (expense) | 19,074 | 4,139 | (55,261 | ) | |||
Provision for loan losses | 15,766 | 10,324 | 11,604 | ||||
Total revenues less provision for loan losses | $58,643 | $51,246 | $16,110 | ||||
Balance Sheet |
|||||||
Loans covered under loss-sharing agreements with FDIC | $689,650 | $2,456,552 | $2,736,102 | ||||
FDIC loss share asset | 392,947 | 409,844 | 751,553 | ||||
FDIC true-up payment obligation | 121,469 | 125,140 | 127,551 | ||||
See additional details on accounting for FDIC-Assisted transaction in Table O.
Operating expenses
Operating expenses increased by $50.8 million when compared with the first quarter of 2015. Excluding the impact of the significant events detailed in the Adjusted Results (Non-GAAP) tables above, operating expenses increased by $30.8 million compared to the first quarter of 2015, driven primarily by:
Non-personnel credit-related costs, which include collections, appraisals, credit related fees, and OREO expenses, amounted to $52.5 million for the second quarter of 2015, compared with $29.0 million for the first quarter of 2015. The increase was principally due to the loss on the bulk sale of covered OREO at BPPR. Excluding the impact on the sale, the increase of $1.6 million was mainly due to write-downs of OREO.
Full-time equivalent employees, including discontinued operations, were 7,980 as of June 30, 2015, compared with 8,203 as of March 31, 2015, and 8,032 as of June 30, 2014.
For a breakdown of operating expenses by category refer to table B.
Income taxes
For the quarter ended June 30, 2015, the Corporation recorded an income tax benefit of $533.5 million, compared to an income tax expense of $32.6 million for the previous quarter. On an adjusted basis, the income tax expense for the second quarter of 2015 was of $21.5 million, compared to $35.5 million for the previous quarter.
During the quarter ended June 30, 2015, the Corporation recorded a partial reversal of the valuation allowance on its deferred tax assets from the U.S. operations for approximately $544.9 million. The Corporation concluded that it is more likely than not that a portion of the total of $1.2 billion on deferred tax assets at the U.S. operations, comprised mainly of net operating losses (“NOLs”) will be realized. The Corporation based its determination on its estimated earnings for the remaining carryforward period – eighteen years beginning with the 2016 fiscal year – available to utilize the deferred tax asset to reduce its income tax obligations.
The recent historical level of book income adjusted by permanent differences, together with the estimated earnings after the reorganization of the U.S. operations and additional estimated earnings from the Doral Acquisition were objective positive evidence considered by the Corporation. As of June 30, 2015, the U.S. operations are not in a three year cumulative loss position, taking into account taxable income, exclusive of reversing temporary differences (“adjusted book income”). An evaluation of the realization of the deferred tax asset will continue to be performed each quarter.
The increase in the net deferred tax asset did not have a material impact on regulatory capital. However, it increased the tangible book value per common share by $5.27.
The effective income tax rate for the second quarter of 2015, on an adjusted basis, was 19%, compared to 28% for the previous quarter. The decrease in the effective tax rate was driven by the composition and source of taxable income for the quarter. The impact of the reversal of the valuation allowance for the 2015 fiscal year is reflected in the effective tax rate of this year, effectively reducing the income tax expense by the benefit of the reversal each quarter of this year.
As discussed above, the effective tax rate is impacted by the composition and source of the taxable income. In 2016, the Corporation expects that the effective tax rate for the U.S. operations will be approximate 44%. Adjusting to an effective tax rate of 44% for the U.S. operations, and assuming the same earnings composition of this quarter, the adjusted effective income tax rate for the Corporation’s consolidated results for the second quarter of 2015 would have been 26%.
Credit Quality
As noted in the Significant Events section of this press release, the shared-loss arrangement under the commercial loss share agreement with the FDIC related to the loans acquired from Westernbank as part of the FDIC assisted transaction in 2010 expired on June 30, 2015. Accordingly, approximately $1.5 billion in loans and $15.3 million in OREO’s have been reclassified as “non-covered” in the accompanying statement of financial condition as of June 30, 2015, because they are no longer subject to the shared-loss payments by the FDIC. However, included in these balances are approximately $248.7 million of loans that are subject to the resolution of several arbitration proceedings currently ongoing with the FDIC related primarily to (i) the FDIC’s denial of reimbursements for certain charge-offs claimed by BPPR with respect to certain loans and the treatment of those loans as “shared-loss assets” under the commercial loss share agreement; and (ii) the denial by the FDIC of portfolio sale proposals submitted by BPPR pursuant to the applicable commercial shared loss agreement provision governing portfolio sales. Until the disputes described above are finally resolved, the terms of the commercial loss share agreement will remain in effect with respect to any such items under dispute. As of June 30, 2015, losses amounting to $141.3 million related to these assets are reflected in the FDIC indemnification asset as a receivable from the FDIC.
Loans and OREO’s that remain covered under the terms of the single-family loss share agreement continue to be presented as covered assets in the accompanying tables and credit metrics as of June 30, 2015.
The reclassification to non-covered of the non-single family loans and foreclosed assets that were previously covered under the shared-loss arrangement with the FDIC, a bulk sale of covered OREO’s, and the impact of the classification to held-for-sale of certain non-performing loans as detailed below, impacted credit metrics for the second quarter of 2015. Excluding the effect of these events, the underlying credit quality of the loan portfolios remained generally stable, in spite of the challenging economic conditions that persist in Puerto Rico. The Corporation continued to pursue strategic opportunities intended to reduce non-performing assets and continue improving the overall risk profile of its loan portfolios.
The following table presents non-performing assets information:
Non-Performing Assets | |||||||||
(Unaudited) | |||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | ||||||
Total non-performing loans held-in-portfolio, excluding covered loans | $575,997 | $664,953 | $639,735 | ||||||
Non-performing loans held-for-sale | 50,875 | 8,404 | 4,426 | ||||||
Other real estate owned (“OREO”), excluding covered OREO | 142,255 | 128,170 | 139,420 | ||||||
Total non-performing assets, excluding covered assets | 769,127 | 801,527 | 783,581 | ||||||
Covered loans and OREO | 37,367 | 133,211 | 171,955 | ||||||
Total non-performing assets | $806,494 | $934,738 | $955,536 | ||||||
Net charge-offs for the quarter (excluding covered loans) | $46,442 | $35,886 | $46,201 | ||||||
Ratios (excluding covered loans): | |||||||||
Non-covered loans held-in-portfolio | $22,435,145 | $21,012,930 | $19,635,224 | ||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio | 2.57 | % | 3.16 | % | 3.26 | % | |||
Allowance for loan losses to loans held-in-portfolio | 2.29 | 2.46 | 2.68 | ||||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale | 89.02 | 77.63 | 82.26 | ||||||
Refer to Table H for additional information. | |||||||||
Provision for Loan Losses | |||||||||||||||
(Unaudited) | Quarters ended | Six months ended | |||||||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | 30-Jun-15 | 30-Jun-14 | ||||||||||
Provision (reversal) for loan losses - non-covered loans: | |||||||||||||||
BPPR | $60,529 | $31,913 | $74,860 | $92,442 | $128,775 | ||||||||||
BPNA | (61 | ) | (2,202 | ) | (24,786 | ) | (2,263 | ) | (24,579 | ) | |||||
Total provision for loan losses - non-covered loans | 60,468 | 29,711 | 50,074 | 90,179 | 104,196 | ||||||||||
Provision for loan losses - covered loans | 15,766 | 10,324 | 11,604 | 26,090 | 37,318 | ||||||||||
Total provision for loan losses | $76,234 | $40,035 | $61,678 | $116,269 | $141,514 | ||||||||||
The following presents credit quality performance for the second quarter of 2015 for the Corporation’s non-covered portfolios, including loans transferred from covered to non-covered status upon the expiration of the shared-loss arrangement under the commercial loss share agreement with the FDIC.
Credit Quality by Segment | |||||||||
(Unaudited) | |||||||||
(In thousands) | Quarters ended | ||||||||
BPPR | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | ||||||
Provision for loan losses | $60,529 | $31,913 | $74,860 | ||||||
Net charge-offs | 45,146 | 36,772 | 43,335 | ||||||
Total non-performing loans held-in-portfolio, excluding covered loans | 541,767 | 638,017 | 573,806 | ||||||
Allowance / non-covered loans held-in-portfolio | 2.69 | % | 2.92 | % | 2.94 | % | |||
Quarters ended | |||||||||
BPNA | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | ||||||
Provision for loan losses (reversal of provision) | $(61 | ) | $(2,202 | ) | $(24,786 | ) | |||
Net charge-offs (recoveries) | 1,296 | (886 | ) | 2,866 | |||||
Total non-performing loans held-in-portfolio | 34,230 | 26,936 | 65,929 | ||||||
Allowance / non-covered loans held-in-portfolio | 0.66 | % | 0.72 | % | 1.59 | % | |||
BPPR Segment
BPNA Segment
|
|
|||||
Financial Condition Highlights |
||||||
(Unaudited) | ||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | |||
Money market, trading and investment securities | $9,248,978 | $8,254,845 | $7,949,164 | |||
Loans not covered under loss sharing agreements with the FDIC | 22,435,145 | 21,012,930 | 19,635,224 | |||
Loans covered under loss sharing agreements with the FDIC | 689,650 | 2,456,552 | 2,736,102 | |||
Assets from discontinued operations | - | - | 1,828,382 | |||
Total assets | 36,750,113 | 35,624,840 | 36,587,902 | |||
Deposits | 27,750,694 | 27,273,689 | 24,901,152 | |||
Borrowings | 3,026,472 | 2,891,156 | 4,465,965 | |||
Liabilities from discontinued operations | 1,754 | 1,930 | 2,079,742 | |||
Total liabilities | 31,800,460 | 31,247,720 | 32,327,461 | |||
Stockholders’ equity | 4,949,653 | 4,377,120 | 4,260,441 | |||
Total assets increased by $1.1 billion from the first quarter of 2015. The reclassification to non-covered of the non-single family loans and foreclosed assets that were previously covered under the shared-loss arrangement of the commercial loss share agreement that expired on June 30, 2015, impacted the variance in quarter over quarter loan and foreclosed asset balances. Excluding the reclassification of $1.5 billion of loans formerly covered under loss sharing agreements, loans held in portfolio not covered under loss sharing agreements decreased by $90 million, mainly at BPPR by $202 million due mostly to the reclassification of a public sector loan of approximately $75 million to held-for-sale and payments received from loans in the public sector, partially offset by an increase of $112 million at BPNA mostly from growth in the commercial loans portfolio. These increases were partially offset by decreases in covered loans, before the reclassification, by $252 million due to the normal run-off and resolution of the portfolio.
Other variances for the quarter included:
These increases were partially offset by:
Total liabilities increased by $553 million from the first quarter of 2015, driven by:
These increases were partially offset by:
Stockholders’ equity increased by $572 million from the first quarter of 2015, mainly as a result of net income for the quarter of $597 million, partially offset by an increase in accumulated other comprehensive loss of $25 million.
Common equity tier-1 ratio and tangible book value per share were 15.61% and $41.75, respectively, at June 30, 2015, compared to 15.74% and $36.33 at March 31, 2015. Refer to Table A for capital ratios.
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 forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that may cause the Corporation's actual results to differ materially from any future results expressed or implied by such forward-looking statements. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2014, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 and our other filings with the SEC for a discussion of those factors that could impact our future results. Other than to the extent required by applicable law, the Corporation undertakes no obligation to publicly update or revise any forward-looking statement to reflect 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 Friday, July 24, 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 Monday, August 24, 2015. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10068380.
Popular, Inc. |
Financial Supplement to Second Quarter 2015 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 Loans |
Table P - Restructuring Charges |
POPULAR, INC. | |||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | |||||||||||||||
Table A - Selected Ratios and Other Information | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarters ended | Six months ended | ||||||||||||||
30-Jun-15 | 31-Mar-15 | 30-Jun-14 | 30-Jun-15 | 30-Jun-14 | |||||||||||
Basic EPS from continuing operations | $5.80 | $0.71 | $(3.21 | ) | $6.51 | $(2.58 | ) | ||||||||
Basic EPS from discontinued operations | $- | $0.01 | $(1.77 | ) | $0.01 | $(1.57 | ) | ||||||||
Total Basic EPS | $5.80 | $0.72 | $(4.98 | ) | $6.52 | $(4.15 | ) | ||||||||
Diluted EPS from continuing operations | $5.79 | $0.71 | $(3.21 | ) | $6.49 | $(2.58 | ) | ||||||||
Diluted EPS from discontinued operations | $- | $0.01 | $(1.77 | ) | $0.01 | $(1.57 | ) | ||||||||
Total Diluted EPS | $5.79 | $0.72 | $(4.98 | ) | $6.50 | $(4.15 | ) | ||||||||
Average common shares outstanding | 102,860,134 | 102,939,928 | 102,781,438 | 102,899,810 | 102,790,545 | ||||||||||
Average common shares outstanding - assuming dilution | 103,103,261 | 103,136,309 | 102,781,438 | 103,113,553 | 102,790,545 | ||||||||||
Common shares outstanding at end of period | 103,503,912 | 103,486,927 | 103,472,979 | 103,503,912 | 103,472,979 | ||||||||||
Market value per common share | $28.86 | $34.39 | $34.18 | $28.86 | $34.18 | ||||||||||
Market capitalization - (In millions) | $2,987 | $3,559 | $3,537 | $2,987 | $3,537 | ||||||||||
Return on average assets | 6.74 | % | 0.90 | % | (5.66 | )% | 3.91 | % | (2.37 | )% | |||||
|
|||||||||||||||
Return on average common equity | 54.93 | % | 7.02 | % | (43.04 | )% | 31.34 | % | (18.19 | )% | |||||
Net interest margin [1] | 4.54 | % | 4.57 | % | 4.68 | % | 4.56 | % | 4.69 | % | |||||
Common equity per share | $47.34 | $41.81 | $40.69 | $47.34 | $40.69 | ||||||||||
Tangible common book value per common share (non-GAAP) | $41.75 | $36.33 | $35.84 | $41.75 | $35.84 | ||||||||||
Tangible common equity to tangible assets (non-GAAP) | 11.95 | % | 10.72 | % | 10.28 | % | 11.95 | % | 10.28 | % | |||||
Tier 1 capital [2] [3] |
15.61 |
% | 16.11 | % | 19.23 | % |
15.61 |
% | 19.23 | % | |||||
Total capital [2] [3] |
18.14 |
% | 18.71 | % | 20.69 | % |
18.14 |
% | 20.69 | % | |||||
Tier 1 leverage [2] [3] |
11.55 |
% | 11.80 | % | 13.07 | % |
11.55 |
% | 13.07 | % | |||||
Common equity to Tier 1 capital [2] [3] |
15.61 |
% |
15.74 |
% | 13.51 | % |
15.61 |
% | 13.51 | % | |||||
[1] Not on a taxable equivalent basis. | |||||||||||||||
[2] Ratios for the quarters ending June 30, 2015, and March 31, 2015, were calculated based on Basel III Rules, while ratios for the previous periods were calculated based on the then applicable Basel I rules. |
|||||||||||||||
[3] Capital ratios for the current quarter are preliminary. | |||||||||||||||
|
|||||||||||||||||||||
POPULAR, INC. | |||||||||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | |||||||||||||||||||||
Table B - Consolidated Statement of Operations | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Quarters ended | Variance | Quarter ended | Variance | Six months ended | |||||||||||||||||
(In thousands, | Q2 2015 | Q2 2015 | |||||||||||||||||||
except per share | vs. | vs. | |||||||||||||||||||
information) | 30-Jun-15 | 31-Mar-15 | Q1 2015 | 30-Jun-14 | Q2 2014 | 30-Jun-15 | 30-Jun-14 | ||||||||||||||
Interest income: | |||||||||||||||||||||
Loans | $374,133 | $355,631 | $18,502 | $380,986 | $(6,853 | ) | $729,764 | $758,588 | |||||||||||||
Money market investments | 1,845 | 1,446 | 399 | 1,131 | 714 | 3,291 | 2,104 | ||||||||||||||
Investment securities | 31,297 | 30,301 | 996 | 33,989 | (2,692 | ) | 61,598 | 69,116 | |||||||||||||
Trading account securities | 3,026 | 2,696 | 330 | 5,344 | (2,318 | ) | 5,722 | 10,601 | |||||||||||||
Total interest income | 410,301 | 390,074 | 20,227 | 421,450 | (11,149 | ) | 800,375 | 840,409 | |||||||||||||
Interest expense: | |||||||||||||||||||||
Deposits | 26,258 | 25,864 | 394 | 26,223 | 35 | 52,122 | 53,081 | ||||||||||||||
Short-term borrowings | 1,863 | 1,734 | 129 | 8,892 | (7,029 | ) | 3,597 | 17,932 | |||||||||||||
Long-term debt | 19,627 | 19,281 | 346 | 445,716 | (426,089 | ) | 38,908 | 477,606 | |||||||||||||
Total interest expense | 47,748 | 46,879 | 869 | 480,831 | (433,083 | ) | 94,627 | 548,619 | |||||||||||||
Net interest income | 362,553 | 343,195 | 19,358 | (59,381 | ) | 421,934 | 705,748 | 291,790 | |||||||||||||
Provision for loan losses - non-covered loans | 60,468 | 29,711 | 30,757 | 50,074 | 10,394 | 90,179 | 104,196 | ||||||||||||||
Provision for loan losses - covered loans | 15,766 | 10,324 | 5,442 | 11,604 | 4,162 | 26,090 | 37,318 | ||||||||||||||
Net interest income (loss) after provision for loan losses | 286,319 | 303,160 | (16,841 | ) | (121,059 | ) | 407,378 | 589,479 | 150,276 | ||||||||||||
Service charges on deposit accounts | 40,138 | 39,017 | 1,121 | 39,237 | 901 | 79,155 | 78,596 | ||||||||||||||
Other service fees | 59,421 | 53,626 | 5,795 | 56,468 | 2,953 | 113,047 | 109,286 | ||||||||||||||
Mortgage banking activities | 21,325 | 12,852 | 8,473 | 3,788 | 17,537 | 34,177 | 7,466 | ||||||||||||||
Net (loss) and valuation adjustments on investment securities | (14,440 | ) | - | (14,440 | ) | - | (14,440 | ) | (14,440 | ) | - | ||||||||||
Trading account (loss) profit | (3,108 | ) | 414 | (3,522 | ) | 1,055 | (4,163 | ) | (2,694 | ) | 3,032 | ||||||||||
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale | 681 | (79 | ) | 760 | 9,659 | (8,978 | ) | 602 | 14,052 | ||||||||||||
Adjustments (expense) to indemnity reserves on loans sold | 419 | (4,526 | ) | 4,945 | (7,454 | ) | 7,873 | (4,107 | ) | (17,801 | ) | ||||||||||
FDIC loss share income (expense) | 19,075 | 4,139 | 14,936 | (55,261 | ) | 74,336 | 23,214 | (79,467 | ) | ||||||||||||
Other operating income | 17,248 | 9,792 | 7,456 | 15,297 | 1,951 | 27,040 | 43,657 | ||||||||||||||
Total non-interest income | 140,759 | 115,235 | 25,524 | 62,789 | 77,970 | 255,994 | 158,821 | ||||||||||||||
Operating expenses: | |||||||||||||||||||||
Personnel costs | |||||||||||||||||||||
Salaries | 76,453 | 72,394 | 4,059 | 69,149 | 7,304 | 148,847 | 138,187 | ||||||||||||||
Commissions, incentives and other bonuses | 24,214 | 18,458 | 5,756 | 12,105 | 12,109 | 42,672 | 25,961 | ||||||||||||||
Pension, postretirement and medical insurance | 9,075 | 12,013 | (2,938 | ) | 7,533 | 1,542 | 21,088 | 16,233 | |||||||||||||
Other personnel costs, including payroll taxes | 11,235 | 13,593 | (2,358 | ) | 10,313 | 922 | 24,828 | 23,020 | |||||||||||||
Total personnel costs | 120,977 | 116,458 | 4,519 | 99,100 | 21,877 | 237,435 | 203,401 | ||||||||||||||
Net occupancy expenses | 23,286 | 21,709 | 1,577 | 20,267 | 3,019 | 44,995 | 41,627 | ||||||||||||||
Equipment expenses | 15,925 | 13,411 | 2,514 | 12,044 | 3,881 | 29,336 | 23,456 | ||||||||||||||
Other taxes | 11,113 | 8,574 | 2,539 | 13,543 | (2,430 | ) | 19,687 | 27,206 | |||||||||||||
Professional fees | 78,449 | 75,528 | 2,921 | 67,024 | 11,425 | 153,977 | 134,023 | ||||||||||||||
Communications | 6,153 | 6,176 | (23 | ) | 6,425 | (272 | ) | 12,329 | 13,110 | ||||||||||||
Business promotion | 13,776 | 10,813 | 2,963 | 16,038 | (2,262 | ) | 24,589 | 27,424 | |||||||||||||
FDIC deposit insurance | 8,542 | 6,398 | 2,144 | 10,480 | (1,938 | ) | 14,940 | 21,458 | |||||||||||||
Other real estate owned (OREO) expenses | 44,816 | 23,069 | 21,747 | 3,410 | 41,406 | 67,885 | 9,850 | ||||||||||||||
Credit and debit card processing, volume, interchange and other expenses | 5,762 | 4,821 | 941 | 5,640 | 122 | 10,583 | 10,836 | ||||||||||||||
Other operating expenses | 25,320 | 12,528 | 12,792 | 14,869 | 10,451 | 37,847 | 32,022 | ||||||||||||||
Amortization of intangibles | 2,881 | 2,104 | 777 | 2,025 | 856 | 4,985 | 4,051 | ||||||||||||||
Restructuring costs | 6,174 | 10,753 | (4,579 | ) | 4,574 | 1,600 | 16,927 | 4,574 | |||||||||||||
Total operating expenses | 363,174 | 312,342 | 50,832 | 275,439 | 87,735 | 675,515 | 553,038 | ||||||||||||||
Income (loss) from continuing operations before income tax | 63,904 | 106,053 | (42,149 | ) | (333,709 | ) | 397,613 | 169,958 | (243,941 | ) | |||||||||||
Income tax (benefit) expense | (533,533 | ) | 32,568 | (566,101 | ) | (4,124 | ) | (529,409 | ) | (500,964 | ) | 19,140 | |||||||||
Income (loss) from continuing operations | 597,437 | 73,485 | 523,952 | (329,585 | ) | 927,022 | 670,922 | (263,081 | ) | ||||||||||||
Income (loss) from discontinued operations, net of tax | 15 | 1,341 | (1,326 | ) | (181,729 | ) | 181,744 | 1,356 | (161,824 | ) | |||||||||||
Net income (loss) | $597,452 | $74,826 | $522,626 | $(511,314 | ) | $1,108,766 | $672,278 | $(424,905 | ) | ||||||||||||
Net income (loss) applicable to common stock | $596,521 | $73,896 | $522,625 | $(512,245 | ) | $1,108,766 | $670,417 | $(426,767 | ) | ||||||||||||
Net income (loss) per common share - basic: | |||||||||||||||||||||
Net income (loss) from continuing operations | $5.80 | $0.71 | $5.09 | $(3.21 | ) | $9.01 | $6.51 | $(2.58 | ) | ||||||||||||
Net income (loss) from discontinued operations | - | $0.01 | $(0.01 | ) | $(1.77 | ) | $1.77 | $0.01 | $(1.57 | ) | |||||||||||
Net income (loss) per common share - basic | $5.80 | $0.72 | $5.08 | $(4.98 | ) | $10.78 | $6.52 | $(4.15 | ) | ||||||||||||
Net income (loss) per common share - diluted: | |||||||||||||||||||||
Net income (loss) from continuing operations | $5.79 | $0.71 | $5.08 | $(3.21 | ) | $9.00 | $6.49 | $(2.58 | ) | ||||||||||||
Net income (loss) from discontinued operations | - | $0.01 | $(0.01 | ) | $(1.77 | ) | $1.77 | $0.01 | $(1.57 | ) | |||||||||||
Net income (loss) per common share - diluted | $5.79 | $0.72 | $5.07 | $(4.98 | ) | $10.77 | $6.50 | $(4.15 | ) | ||||||||||||
|
||||||||||||
Popular, Inc. | ||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | ||||||||||||
Table C - Consolidated Statement of Financial Condition | ||||||||||||
(Unaudited) | ||||||||||||
Variance | ||||||||||||
Q2 2015 vs. | ||||||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | Q1 2015 | ||||||||
Assets: | ||||||||||||
Cash and due from banks | $557,248 | $495,776 | $362,572 | $61,472 | ||||||||
Money market investments | 3,254,939 | 2,307,215 | 1,666,944 | 947,724 | ||||||||
Trading account securities, at fair value | 141,595 | 134,294 | 345,823 | 7,301 | ||||||||
Investment securities available-for-sale, at fair value | 5,585,078 | 5,548,703 | 5,653,992 | 36,375 | ||||||||
Investment securities held-to-maturity, at amortized cost | 101,861 | 101,595 | 114,280 | 266 | ||||||||
Other investment securities, at lower of cost or realizable value | 165,505 | 163,038 | 168,125 | 2,467 | ||||||||
Loans held-for-sale, at lower of cost or fair value | 202,287 | 160,602 | 97,010 | 41,685 | ||||||||
Loans held-in-portfolio: | ||||||||||||
Loans not covered under loss sharing agreements with the FDIC | 22,535,008 | 21,110,147 | 19,726,234 | 1,424,861 | ||||||||
Loans covered under loss sharing agreements with the FDIC | 689,650 | 2,456,552 | 2,736,102 | (1,766,902 | ) | |||||||
Less: Unearned income | 99,863 | 97,217 | 91,010 | 2,646 | ||||||||
Allowance for loan losses | 550,813 | 588,697 | 624,911 | (37,884 | ) | |||||||
Total loans held-in-portfolio, net | 22,573,982 | 22,880,785 | 21,746,415 | (306,803 | ) | |||||||
FDIC loss share asset | 392,947 | 409,844 | 751,553 | (16,897 | ) | |||||||
Premises and equipment, net | 497,078 | 492,291 | 492,382 | 4,787 | ||||||||
Other real estate not covered under loss sharing agreements with the FDIC | 142,255 | 128,170 | 139,420 | 14,085 | ||||||||
Other real estate covered under loss sharing agreements with the FDIC | 33,504 | 113,557 | 155,805 | (80,053 | ) | |||||||
Accrued income receivable | 130,281 | 129,639 | 119,520 | 642 | ||||||||
Mortgage servicing assets, at fair value | 206,357 | 149,024 | 151,951 | 57,333 | ||||||||
Other assets | 2,186,883 | 1,842,934 | 2,292,360 | 343,949 | ||||||||
Goodwill | 505,578 | 508,310 | 461,246 | (2,732 | ) | |||||||
Other intangible assets | 72,735 | 59,063 | 40,122 | 13,672 | ||||||||
Assets from discontinued operations | - | - | 1,828,382 | - | ||||||||
Total assets | $36,750,113 | $35,624,840 | $36,587,902 | $1,125,273 | ||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||
Liabilities: | ||||||||||||
Deposits: | ||||||||||||
Non-interest bearing | $6,305,986 | $6,285,202 | $5,666,685 | $20,784 | ||||||||
Interest bearing | 21,444,708 | 20,988,487 | 19,234,467 | 456,221 | ||||||||
Total deposits | 27,750,694 | 27,273,689 | 24,901,152 | 477,005 | ||||||||
Federal funds purchased and assets sold under agreements to repurchase | 1,121,244 | 1,132,643 | 2,074,676 | (11,399 | ) | |||||||
Other short-term borrowings | 101,200 | 1,200 | 31,200 | 100,000 | ||||||||
Notes payable | 1,804,028 | 1,757,313 | 2,360,089 | 46,715 | ||||||||
Other liabilities | 1,021,540 | 1,080,945 | 880,602 | (59,405 | ) | |||||||
Liabilities from discontinued operations | 1,754 | 1,930 | 2,079,742 | (176 | ) | |||||||
Total liabilities | 31,800,460 | 31,247,720 | 32,327,461 | 552,740 | ||||||||
Stockholders’ equity: | ||||||||||||
Preferred stock | 50,160 | 50,160 | 50,160 | - | ||||||||
Common stock | 1,037 | 1,037 | 1,035 | - | ||||||||
Surplus | 4,199,165 | 4,197,932 | 4,173,616 | 1,233 | ||||||||
Retained earnings | 924,134 | 327,613 | 167,663 | 596,521 | ||||||||
Treasury stock | (5,812 | ) | (5,222 | ) | (1,742 | ) | (590 | ) | ||||
Accumulated other comprehensive loss | (219,031 | ) | (194,400 | ) | (130,291 | ) | (24,631 | ) | ||||
Total stockholders’ equity | 4,949,653 | 4,377,120 | 4,260,441 | 572,533 | ||||||||
Total liabilities and stockholders’ equity | $36,750,113 | $35,624,840 | $36,587,902 | $1,125,273 | ||||||||
Popular, Inc. | |||||||||||||||||||||||||||||||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | |||||||||||||||||||||||||||||||||||||||||||
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER | |||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||
($ amounts in |
Quarter ended | Quarter ended | Quarter ended | Variance | Variance | ||||||||||||||||||||||||||||||||||||||
millions; yields |
30-Jun-15 | 31-Mar-15 | 30-Jun-14 | Q2 2015 vs. Q1 2015 | Q2 2015 vs. Q2 2014 | ||||||||||||||||||||||||||||||||||||||
not on a taxable | Average | Income / | Yield / | Average | Income / | Yield / | Average | Income / | Yield / | Average | Income / | Yield / | Average | Income / | Yield / | ||||||||||||||||||||||||||||
equivalent basis) | balance | Expense | Rate | balance | Expense | Rate | balance | Expense | Rate | balance | Expense | Rate | balance | Expense | Rate | ||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||||||||||||||||||||||||
Money market, trading and investment securities | $8,575 | $36.2 | 1.69 | % | $7,767 | $34.4 | 1.78 | % | $7,839 | $40.4 | 2.07 | % | $808 | $1.8 | (0.09 | )% | $736 | ($4.2 | ) | (0.38 |
)% |
||||||||||||||||||||||
Loans not covered under loss sharing agreements with the FDIC: | |||||||||||||||||||||||||||||||||||||||||||
Commercial | 8,776 | 108.0 | 4.93 | 8,383 | 100.9 | 4.88 | 8,446 | 102.2 | 4.86 | 393 | 7.1 | 0.05 | 330 | 5.8 | 0.07 | ||||||||||||||||||||||||||||
Construction | 682 | 10.2 | 6.02 | 435 | 6.1 | 5.67 | 175 | 2.4 | 5.55 | 247 | 4.1 | 0.35 | 507 | 7.8 | 0.47 | ||||||||||||||||||||||||||||
Mortgage | 7,175 | 93.4 | 5.21 | 6,733 | 85.9 | 5.10 | 6,691 | 85.3 | 5.10 | 442 | 7.5 | 0.11 | 484 | 8.1 | 0.11 | ||||||||||||||||||||||||||||
Consumer | 3,823 | 97.1 | 10.19 | 3,845 | 95.4 | 10.07 | 3,894 | 97.9 | 10.08 | (22 | ) | 1.7 | 0.12 | (71 | ) | (0.8 | ) | 0.11 | |||||||||||||||||||||||||
Lease financing | 583 | 10.1 | 6.93 | 569 | 10.0 | 7.01 | 546 | 10.2 | 7.43 | 14 | 0.1 | (0.08 | ) | 37 | (0.1 | ) | (0.50 | ) | |||||||||||||||||||||||||
Total loans not covered under loss sharing agreements with the FDIC | 21,039 | 318.8 | 6.07 | 19,965 | 298.3 | 6.03 | 19,752 | 298.0 | 6.05 | 1,074 | 20.5 | 0.04 | 1,287 | 20.8 | 0.02 | ||||||||||||||||||||||||||||
Loans covered under loss sharing agreements with the FDIC | 2,350 | 55.3 | 9.44 | 2,540 | 57.4 | 9.14 | 2,811 | 83.0 | 11.83 | (190 | ) | (2.1 | ) | 0.30 | (461 | ) | (27.7 | ) | (2.39 | ) | |||||||||||||||||||||||
Total loans | 23,389 | 374.1 | 6.41 | 22,505 | 355.7 | 6.38 | 22,563 | 381.0 | 6.77 | 884 | 18.4 | 0.03 | 826 | (6.9 | ) | (0.36 | ) | ||||||||||||||||||||||||||
Total interest earning assets | 31,964 | $410.3 | 5.14 | % | 30,272 | $390.1 | 5.20 | % | 30,402 | $421.4 | 5.56 | % | 1,692 | $20.2 | (0.06 | )% | 1,562 | ($11.1 | ) | (0.42 |
)% |
||||||||||||||||||||||
Allowance for loan losses | (599 | ) | (609 | ) | (627 | ) | 10 | 28 | |||||||||||||||||||||||||||||||||||
Other non-interest earning assets | 4,212 | 4,143 | 4,598 | 69 | (386 | ) | |||||||||||||||||||||||||||||||||||||
Assets from discontinued operations | - | - | 1,863 | - | (1,863 | ) | |||||||||||||||||||||||||||||||||||||
Total average assets | $35,577 | $33,806 | $36,236 | $1,771 | $(659 | ) | |||||||||||||||||||||||||||||||||||||
Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||||||||||||||||
Interest bearing deposits: | |||||||||||||||||||||||||||||||||||||||||||
NOW and money market | $5,507 | $4.9 | 0.36 | % | $4,983 | $4.2 | 0.34 | % | $4,897 | $3.8 | 0.32 | % | $524 | $0.7 | 0.02 | % | $610 | $1.1 | 0.04 |
% |
|||||||||||||||||||||||
Savings | 7,040 | 4.1 | 0.23 | 6,892 | 3.9 | 0.23 | 6,713 | 3.6 | 0.22 | 148 | 0.2 | - | 327 | 0.5 | 0.01 | ||||||||||||||||||||||||||||
Time deposits | 8,530 | 17.2 | 0.81 | 7,747 | 17.8 | 0.93 | 7,709 | 18.8 | 0.98 | 783 | (0.6 | ) | (0.12 | ) | 821 | (1.6 | ) | (0.17 | ) | ||||||||||||||||||||||||
Total interest bearing deposits | 21,077 | 26.2 | 0.50 | 19,622 | 25.9 | 0.53 | 19,319 | 26.2 | 0.54 | 1,455 | 0.3 | (0.03 | ) | 1,758 | - | (0.04 | ) | ||||||||||||||||||||||||||
Borrowings [1] |
2,855 | 21.5 | 3.01 | 2,877 | 21.0 | 2.93 | 3,614 | 40.5 | 4.49 | (22 | ) | 0.5 | 0.08 | (759 | ) | (19.0 | ) | (1.48 | ) | ||||||||||||||||||||||||
Total interest bearing liabilities | 23,932 | 47.7 | 0.80 | 22,499 | 46.9 | 0.84 | 22,933 | 66.7 | 1.17 | 1,433 | 0.8 | (0.04 | ) | 999 | (19.0 | ) | (0.37 | ) | |||||||||||||||||||||||||
Net interest spread | 4.34 | % | 4.36 | % | 4.39 | % | (0.02 | )% | (0.05 |
)% |
|||||||||||||||||||||||||||||||||
Non-interest bearing deposits | 6,247 | 5,963 | 5,451 | 284 | 796 | ||||||||||||||||||||||||||||||||||||||
Other liabilities | 991 | 1,021 | 915 | (30 | ) | 76 | |||||||||||||||||||||||||||||||||||||
Liabilities from discontinued operations | 2 | 3 | 2,113 | (1 | ) | (2,111 | ) | ||||||||||||||||||||||||||||||||||||
Stockholders' equity | 4,405 | 4,320 | 4,824 | 85 | (419 | ) | |||||||||||||||||||||||||||||||||||||
Total average liabilities and stockholders' equity | $35,577 | $33,806 | $36,236 | $1,771 | $(659 | ) | |||||||||||||||||||||||||||||||||||||
Adjusted net interest income / margin non-taxable equivalent basis | $362.6 | 4.54 | % | $343.2 | 4.57 | % | $354.7 | 4.68 | % | $19.4 | (0.03 | )% | $7.9 | (0.14 |
)% |
||||||||||||||||||||||||||||
Accelerated amortization TARP discount and related deferred costs | 414.1 | ||||||||||||||||||||||||||||||||||||||||||
Net interest income / margin non-taxable equivalent basis | ($59.4 | ) | (0.77 | )% | |||||||||||||||||||||||||||||||||||||||
(1) Including the impact of the accelerated amortization, the total cost of borrowings for the second quarter 2014 would have been 50.31%. | |||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
Popular, Inc. | |||||||||||||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | |||||||||||||||||||||||||
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
|
Six months ended | Six months ended | |||||||||||||||||||||||
($ amounts in millions; |
30-Jun-15 | 30-Jun-14 | Variance | ||||||||||||||||||||||
yields not on a taxable |
Average | Income / | Yield / | Average | Income / | Yield / | Average | Income / | Yield / | ||||||||||||||||
equivalent basis) | balance | Expense | Rate | balance | Expense | Rate | balance | Expense | Rate | ||||||||||||||||
Assets: | |||||||||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||||||
Money market, trading and investment securities | $8,173 | $70.6 | 1.73 | % | $7,703 | $81.8 | 2.13 | % | $470 | ($11.2 | ) | (0.40 | )% | ||||||||||||
Loans not covered under loss sharing agreements with the FDIC: | |||||||||||||||||||||||||
Commercial | 8,581 | 208.8 | 4.91 | 8,467 | 202.8 | 4.83 | 114 | 6.0 | 0.08 | ||||||||||||||||
Construction | 559 | 16.3 | 5.89 | 180 | 7.3 | 8.11 | 379 | 9.0 | (2.22 | ) | |||||||||||||||
Mortgage | 6,955 | 179.3 | 5.15 | 6,691 | 172.2 | 5.15 | 264 | 7.1 | - | ||||||||||||||||
Consumer | 3,834 | 192.5 | 10.13 | 3,828 | 191.7 | 10.10 | 6 | 0.8 | 0.03 | ||||||||||||||||
Lease financing | 576 | 20.0 | 6.97 | 545 | 20.5 | 7.50 | 31 | (0.5 | ) | (0.53 | ) | ||||||||||||||
Total loans not covered under loss sharing agreements with the FDIC | 20,505 | 616.9 | 6.05 | 19,711 | 594.5 | 6.07 | 794 | 22.4 | (0.02 | ) | |||||||||||||||
Loans covered under loss sharing agreements with the FDIC | 2,445 | 112.8 | 9.29 | 2,872 | 164.1 | 11.50 | (427 | ) | (51.3 | ) | (2.21 | ) | |||||||||||||
Total loans | 22,950 | 729.7 | 6.40 | 22,583 | 758.6 | 6.76 | 367 | (28.9 | ) | (0.36 | ) | ||||||||||||||
Total interest earning assets | 31,123 | $800.3 | 5.17 | % | 30,286 | $840.4 | 5.58 | % | 837 | ($40.1 | ) | (0.41 | )% | ||||||||||||
Allowance for loan losses | (604 | ) | (622 | ) | 18 | ||||||||||||||||||||
Other non-interest earning assets | 4,177 | 4,643 | (466 | ) | |||||||||||||||||||||
Assets from discontinued operations | - | 1,909 | (1,909 | ) | |||||||||||||||||||||
Total average assets | $34,696 | $36,216 | ($1,520 | ) | |||||||||||||||||||||
Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||
Interest bearing deposits: | |||||||||||||||||||||||||
NOW and money market | $5,246 | $9.1 | 0.35 | % | $4,817 | $7.6 | 0.32 | % | $429 | $1.5 | 0.03 | % | |||||||||||||
Savings | 6,966 | 8.0 | 0.23 | 6,702 | 7.2 | 0.22 | 264 | 0.8 | 0.01 | ||||||||||||||||
Time deposits | 8,141 | 35.0 | 0.87 | 7,624 | 38.3 | 1.01 | 517 | (3.3 | ) | (0.14 | ) | ||||||||||||||
Total interest bearing deposits | 20,353 | 52.1 | 0.52 | 19,143 | 53.1 | 0.56 | 1,210 | (1.0 | ) | (0.04 | ) | ||||||||||||||
Borrowings [1] | 2,866 | 42.5 | 2.97 | 3,740 | 81.4 | 4.37 | (874 | ) | (38.9 | ) | (1.40 | ) | |||||||||||||
Total interest bearing liabilities | 23,219 | 94.6 | 0.82 | 22,883 | 134.5 | 1.18 | 336 | (39.9 | ) | (0.36 | ) | ||||||||||||||
Net interest spread | 4.35 | % | 4.40 | % | (0.05 | )% | |||||||||||||||||||
Non-interest bearing deposits | 6,106 | 5,517 | 589 | ||||||||||||||||||||||
Other liabilities | 1,006 | 905 | 101 | ||||||||||||||||||||||
Liabilities from discontinued operations | 2 | 2,129 | (2,127 | ) | |||||||||||||||||||||
Stockholders' equity | 4,363 | 4,782 | (419 | ) | |||||||||||||||||||||
Total average liabilities and stockholders' equity | $34,696 | $36,216 | ($1,520 | ) | |||||||||||||||||||||
Adjusted net interest income / margin non-taxable equivalent basis | $705.7 | 4.56 | % | $705.9 | 4.69 | % | ($0.2 | ) | (0.13 | )% | |||||||||||||||
Accelerated amortization of TARP discount and related deferred costs | - | 414.1 | (414.1 | ) | |||||||||||||||||||||
Net interest income/margin non-taxable equivalent basis | $705.7 | 4.56 | % | $291.8 | 1.95 | % | $413.9 | 2.61 | % | ||||||||||||||||
(1) Including the impact of the accelerated amortization, the total cost of borrowings for the second quarter 2014 would have been 26.51%. | |||||||||||||||||||||||||
|
|
||||||||||||||||||||||
Popular, Inc. | |||||||||||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | |||||||||||||||||||||||
Table F - Mortgage Banking Activities and Other Service Fees | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Mortgage Banking Activities |
|||||||||||||||||||||||
|
Variance | ||||||||||||||||||||||
Quarters ended | Q2 2015 vs. | Q2 2015 vs. | Six months ended | Variance | |||||||||||||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | Q1 2015 | Q2 2014 | 30-Jun-15 | 30-Jun-14 | 2015 vs. 2014 | |||||||||||||||
Mortgage servicing fees, net of fair value adjustments: | |||||||||||||||||||||||
Mortgage servicing fees | $14,689 | $12,248 | $10,558 | $2,441 | $4,131 | $26,937 | $21,306 | $5,631 | |||||||||||||||
Mortgage servicing rights fair value adjustments | (1,917 | ) | (4,929 | ) | (7,740 | ) | 3,012 | 5,823 | (6,846 | ) | (15,836 | ) | 8,990 | ||||||||||
Total mortgage servicing fees, net of fair value adjustments | 12,772 | 7,319 | 2,818 | 5,453 | 9,954 | 20,091 | 5,470 | 14,621 | |||||||||||||||
Net gain on sale of loans, including valuation on loans held-for-sale | 8,022 | 7,280 | 8,189 | 742 | (167 | ) | 15,302 | 15,365 | (63 | ) | |||||||||||||
Trading account profit (loss): | |||||||||||||||||||||||
Unrealized gains (losses) on outstanding derivative positions | 42 | 17 | 22 | 25 | 20 | 59 | (738 | ) | 797 | ||||||||||||||
Realized gains (losses) on closed derivative positions | 489 | (1,764 | ) | (7,241 | ) | 2,253 | 7,730 | (1,275 | ) | (12,631 | ) | 11,356 | |||||||||||
Total trading account profit (loss) | 531 | (1,747 | ) | (7,219 | ) | 2,278 | 7,750 | (1,216 | ) | (13,369 | ) | 12,153 | |||||||||||
Total mortgage banking activities | $21,325 | $12,852 | $3,788 | $8,473 | $17,537 | $34,177 | $7,466 | $26,711 | |||||||||||||||
|
||||||||||||||||||
Other Service Fees |
||||||||||||||||||
|
Variance | |||||||||||||||||
Quarters ended | Q2 2015 vs. | Q2 2015 vs. | Six months ended | Variance | ||||||||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | Q1 2015 | Q2 2014 | 30-Jun-15 | 30-Jun-14 | 2015 vs. 2014 | ||||||||||
Other service fees: | ||||||||||||||||||
Debit card fees | $11,995 | $11,125 | $11,000 | $870 | $995 | $23,120 | $21,544 | $1,576 | ||||||||||
Insurance fees | 13,606 | 12,041 | 12,406 | 1,565 | 1,200 | 25,647 | 24,125 | 1,522 | ||||||||||
Credit card fees | 17,611 | 16,149 | 16,985 | 1,462 | 626 | 33,760 | 33,068 | 692 | ||||||||||
Sale and administration of investment products | 6,601 | 5,930 | 7,456 | 671 | (855 | ) | 12,531 | 13,913 | (1,382 | ) | ||||||||
Trust fees | 4,914 | 4,602 | 4,566 | 312 | 348 | 9,516 | 9,029 | 487 | ||||||||||
Other fees | 4,694 | 3,779 | 4,055 | 915 | 639 | 8,473 | 7,607 | 866 | ||||||||||
Total other service fees | $59,421 | $53,626 | $56,468 | $5,795 | $2,953 | $113,047 | $109,286 | $3,761 | ||||||||||
|
|
|||||||||||
Popular, Inc. | ||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | ||||||||||||
Table G - Loans and Deposits | ||||||||||||
(Unaudited) | ||||||||||||
Loans - Ending Balances | ||||||||||||
Variance | ||||||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | Q2 2015 vs. Q1 2015 | Q2 2015 vs. Q2 2014 | |||||||
Loans not covered under FDIC loss sharing agreements: | ||||||||||||
Commercial | $10,004,716 | $8,653,561 | $8,155,547 | $1,351,155 | $1,849,169 | |||||||
Construction | 696,010 | 690,728 | 179,059 | 5,282 | 516,951 | |||||||
Legacy [1] | 72,502 | 77,675 | 162,941 | (5,173 | ) | (90,439 | ) | |||||
Lease financing | 592,816 | 581,119 | 546,868 | 11,697 | 45,948 | |||||||
Mortgage | 7,225,823 | 7,189,227 | 6,664,448 | 36,596 | 561,375 | |||||||
Consumer | 3,843,278 | 3,820,620 | 3,926,361 | 22,658 | (83,083 | ) | ||||||
Total non-covered loans held-in-portfolio | $22,435,145 | $21,012,930 | $19,635,224 | $1,422,215 | $2,799,921 | |||||||
Loans covered under FDIC loss sharing agreements | 689,650 | 2,456,552 | 2,736,102 | (1,766,902 | ) | (2,046,452 | ) | |||||
Total loans held-in-portfolio | $23,124,795 | $23,469,482 | $22,371,326 | $(344,687 | ) | $753,469 | ||||||
Loans held-for-sale: | ||||||||||||
Commercial | $48,969 | $8,240 | $2,895 | $40,729 | $46,074 | |||||||
Construction | 1,681 | - | 949 | 1,681 | 732 | |||||||
Mortgage | 151,637 | 152,362 | 93,166 | (725 | ) | 58,471 | ||||||
Total loans held-for-sale | $202,287 | $160,602 | $97,010 | $41,685 | $105,277 | |||||||
Total loans | $23,327,082 | $23,630,084 | $22,468,336 | $(303,002 | ) | $858,746 | ||||||
[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. | ||||||||||||
Deposits - Ending Balances | ||||||||||||
Variance | ||||||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | Q2 2015 vs. Q1 2015 | Q2 2015 vs. Q2 2014 | |||||||
Demand deposits [1] | $7,262,176 | $7,163,635 | $6,412,632 | $98,541 | $849,544 | |||||||
Savings, NOW and money market deposits (non-brokered) | 11,177,288 | 10,932,870 | 10,276,715 | 244,418 | 900,573 | |||||||
Savings, NOW and money market deposits (brokered) | 468,973 | 409,113 | 543,032 | 59,860 | (74,059 | ) | ||||||
Time deposits (non-brokered) | 7,367,256 | 7,243,414 | 5,790,324 | 123,842 | 1,576,932 | |||||||
Time deposits (brokered CDs) | 1,475,001 | 1,524,657 | 1,878,449 | (49,656 | ) | (403,448 | ) | |||||
Total deposits | $27,750,694 | $27,273,689 | $24,901,152 | $477,005 | $2,849,542 | |||||||
[1] Includes interest and non-interest bearing demand deposits. | ||||||||||||
|
||||||||||||||||||||||||
Popular, Inc. | ||||||||||||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | ||||||||||||||||||||||||
Table H - Non-Performing Assets | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Variance | ||||||||||||||||||||||||
(Dollars in thousands) | 30-Jun-15 | As a % of loans HIP by category | 31-Mar-15 | As a % of loans HIP by category | 30-Jun-14 | As a % of loans HIP by category | Q2 2015 vs. Q1 2015 | Q2 2015 vs. Q2 2014 | ||||||||||||||||
Non-accrual loans: | ||||||||||||||||||||||||
Commercial | $190,294 | 1.9 | % | $274,438 | 3.2 | % | $278,133 | 3.4 | % | $(84,144 | ) | $(87,839 | ) | |||||||||||
Construction | 5,427 | 0.8 | 13,214 | 1.9 | 21,456 | 12.0 | (7,787 | ) | (16,029 | ) | ||||||||||||||
Legacy [1] | 4,686 | 6.5 | 2,288 | 2.9 | 8,323 | 5.1 | 2,398 | (3,637 | ) | |||||||||||||||
Lease financing | 2,328 | 0.4 | 2,506 | 0.4 | 2,873 | 0.5 | (178 | ) | (545 | ) | ||||||||||||||
Mortgage | 330,821 | 4.6 | 328,615 | 4.6 | 286,320 | 4.3 | 2,206 | 44,501 | ||||||||||||||||
Consumer | 42,441 | 1.1 | 43,892 | 1.1 | 42,630 | 1.1 | (1,451 | ) | (189 | ) | ||||||||||||||
Total non-performing loans held-in-portfolio, excluding covered loans |
575,997 | 2.6 | % | 664,953 | 3.2 | % | 639,735 | 3.3 | % | (88,956 | ) | (63,738 | ) | |||||||||||
Non-performing loans held-for-sale [2] | 50,875 | 8,404 | 4,426 | 42,471 | 46,449 | |||||||||||||||||||
Other real estate owned (“OREO”), excluding covered OREO |
142,255 | 128,170 | 139,420 | 14,085 | 2,835 | |||||||||||||||||||
Total non-performing assets, excluding covered assets |
769,127 | 801,527 | 783,581 | (32,400 | ) | (14,454 | ) | |||||||||||||||||
Covered loans and OREO | 37,367 | 133,211 | 171,955 | (95,844 | ) | (134,588 | ) | |||||||||||||||||
Total non-performing assets | $806,494 | $934,738 | $955,536 | $(128,244 | ) | $(149,042 | ) | |||||||||||||||||
Accruing loans past due 90 days or more [3] |
$432,677 |
$451,035 | $420,251 |
$(18,358 |
) |
$12,426 |
||||||||||||||||||
Ratios excluding covered loans: | ||||||||||||||||||||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio |
2.57 |
% |
|
3.16 |
% |
|
3.26 |
% |
|
|||||||||||||||
Allowance for loan losses to loans held-in-portfolio |
2.29 | 2.46 | 2.68 | |||||||||||||||||||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale |
89.02 | 77.63 | 82.26 | |||||||||||||||||||||
Ratios including covered loans: | ||||||||||||||||||||||||
Non-performing assets to total assets |
2.19 |
% |
|
2.62 |
% |
|
2.61 |
% |
|
|||||||||||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio |
2.51 | 2.92 | 2.93 | |||||||||||||||||||||
Allowance for loan losses to loans held-in-portfolio |
2.38 | 2.51 | 2.79 | |||||||||||||||||||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale |
94.99 | 85.99 | 95.28 | |||||||||||||||||||||
[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] Non-performing loans held-for-sale as of June 30, 2015 consisted of $49 million in commercial loans, $2 million in construction loans and $225 thousand in mortgage loans (March 31, 2015 - $225 thousand in mortgage loans and $8.2 million in commercial loans; June 30, 2014 - $582 thousand in mortgage loans, $3 million in commercial loans and $1 million in construction loans). | ||||||||||||||||||||||||
[3] 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 $133 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of June 30, 2015 (March 31, 2015 - $134 million; June 30, 2014 - $124 million). Furthermore, the Corporation has approximately $71.5 million in reverse mortgage loans which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation's policy to exclude these balances from non-performing assets (March 31, 2015 - $69 million; June 30, 2014 - $60 million). | ||||||||||||||||||||||||
Popular, Inc. | ||||||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | ||||||||||||||||||
Table I - Activity in Non-Performing Loans | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Commercial loans held-in-portfolio: | ||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||
30-Jun-15 | 31-Mar-15 | |||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||
Beginning balance NPLs | $264,631 | $9,807 | $274,438 | $257,910 | $2,315 | $260,225 | ||||||||||||
Plus: | ||||||||||||||||||
New non-performing loans[1] | 17,092 | 1,386 | 18,478 | 27,426 | 8,030 | 35,456 | ||||||||||||
Advances on existing non-performing loans | - | 383 | 383 | - | - | - | ||||||||||||
Reclass from covered loans | 7,395 | - | 7,395 | - | - | - | ||||||||||||
Less: | ||||||||||||||||||
Non-performing loans transferred to OREO | (3,568 | ) | - | (3,568 | ) | (1,069 | ) | - | (1,069 | ) | ||||||||
Non-performing loans charged-off | (51,804 | ) | (399 | ) | (52,203 | ) | (8,375 | ) | (426 | ) | (8,801 | ) | ||||||
Loans returned to accrual status / loan collections | (9,351 | ) | (282 | ) | (9,633 | ) | (11,261 | ) | (112 | ) | (11,373 | ) | ||||||
Loans transferred to held-for-sale | (44,996 | ) | - | (44,996 | ) | - | - | - | ||||||||||
Ending balance NPLs | $179,399 | $10,895 | $190,294 | $264,631 | $9,807 | $274,438 | ||||||||||||
[1] For the quarter ended March 31, 2015, new non-performing loans includes $1.2 million at BPPR and $7.4 million at BPNA from Doral Acquisition. |
||||||||||||||||||
Construction loans held-in-portfolio: | ||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||
30-Jun-15 | 31-Mar-15 | |||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||
Beginning balance NPLs | $13,214 | $- | $13,214 | $13,812 | $- | $13,812 | ||||||||||||
Plus: | ||||||||||||||||||
New non-performing loans | - | 671 | 671 | 456 | - | 456 | ||||||||||||
Reclass from covered loans | 112 | - | 112 | - | - | - | ||||||||||||
Less: | ||||||||||||||||||
Non-performing loans transferred to OREO | (2,194 | ) | - | (2,194 | ) | - | - | - | ||||||||||
Loans returned to accrual status / loan collections | (6,376 | ) | - | (6,376 | ) | (1,054 | ) | - | (1,054 | ) | ||||||||
Ending balance NPLs | $4,756 | $671 | $5,427 | $13,214 | $- | $13,214 | ||||||||||||
Mortgage loans held-in-portfolio: | ||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||
30-Jun-15 | 31-Mar-15 | |||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||
Beginning balance NPLs | $320,154 | $8,461 | $328,615 | $295,629 | $9,284 | $304,913 | ||||||||||||
Plus: | ||||||||||||||||||
New non-performing loans[1] | 85,555 | 11,857 | 97,412 | 107,385 | 6,232 | 113,617 | ||||||||||||
Reclass from covered loans | 568 | - | 568 | - | - | - | ||||||||||||
Less: | ||||||||||||||||||
Non-performing loans transferred to OREO | (6,103 | ) | (314 | ) | (6,417 | ) | (4,845 | ) | - | (4,845 | ) | |||||||
Non-performing loans charged-off | (7,998 | ) | (319 | ) | (8,317 | ) | (8,158 | ) | (123 | ) | (8,281 | ) | ||||||
Loans returned to accrual status / loan collections | (73,403 | ) | (7,637 | ) | (81,040 | ) | (69,857 | ) | (8,970 | ) | (78,827 | ) | ||||||
Loans transferred to held-for-sale | - | - | - | - | 2,038 | 2,038 | ||||||||||||
Ending balance NPLs | $318,773 | $12,048 | $330,821 | $320,154 | $8,461 | $328,615 | ||||||||||||
[1] For the quarter ended March 31, 2015 new non-performing loans includes $16.6 million of loans previously serviced by Doral. | ||||||||||||||||||
Legacy loans held-in-portfolio: | ||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||
30-Jun-15 | 31-Mar-15 | |||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||
Beginning balance NPLs | $- | $2,288 | $2,288 | $- | $1,545 | $1,545 | ||||||||||||
Plus: | ||||||||||||||||||
New non-performing loans | - | 3,077 | 3,077 | - | 1,000 | 1,000 | ||||||||||||
Advances on existing non-performing loans | - | 14 | 14 | - | 33 | 33 | ||||||||||||
Less: | ||||||||||||||||||
Non-performing loans charged-off | - | (433 | ) | (433 | ) | - | (141 | ) | (141 | ) | ||||||||
Loans returned to accrual status / loan collections | - | (260 | ) | (260 | ) | - | (149 | ) | (149 | ) | ||||||||
Ending balance NPLs | $- | $4,686 | $4,686 | $- | $2,288 | $2,288 | ||||||||||||
Total non-performing loans held-in-portfolio (excluding consumer loans): | ||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||
30-Jun-15 | 31-Mar-15 | |||||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | ||||||||||||
Beginning balance NPLs | $597,999 | $20,556 | $618,555 | $567,351 | $13,144 | $580,495 | ||||||||||||
Plus: | ||||||||||||||||||
New non-performing loans | 102,647 | 16,991 | 119,638 | 135,267 | 15,262 | 150,529 | ||||||||||||
Advances on existing non-performing loans | - | 397 | 397 | - | 33 | 33 | ||||||||||||
Reclass from covered loans | 8,075 | - | 8,075 | - | - | - | ||||||||||||
Less: | ||||||||||||||||||
Non-performing loans transferred to OREO | (11,865 | ) | (314 | ) | (12,179 | ) | (5,914 | ) | - | (5,914 | ) | |||||||
Non-performing loans charged-off | (59,802 | ) | (1,151 | ) | (60,953 | ) | (16,533 | ) | (690 | ) | (17,223 | ) | ||||||
Loans returned to accrual status / loan collections | (89,130 | ) | (8,179 | ) | (97,309 | ) | (82,172 | ) | (9,231 | ) | (91,403 | ) | ||||||
Loans transferred to held-for-sale | (44,996 | ) | - | (44,996 | ) | - | 2,038 | 2,038 | ||||||||||
Ending balance NPLs | $502,928 | $28,300 | $531,228 | $597,999 | $20,556 | $618,555 | ||||||||||||
Popular, Inc. | |||||||||||||||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | |||||||||||||||||||||||||||
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Quarter ended | Quarter ended | Quarter ended | |||||||||||||||||||||||||
30-Jun-15 | 31-Mar-15 | 30-Jun-14 | |||||||||||||||||||||||||
(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 | $516,224 | $72,473 | $588,697 | $519,719 | $82,073 | $601,792 | $542,575 | $97,773 | $640,348 | ||||||||||||||||||
Provision for loan losses - Continuing operations | 60,468 | 15,766 | 76,234 | 29,711 | 10,324 | 40,035 | 50,074 | 11,604 | 61,678 | ||||||||||||||||||
576,692 | 88,239 | 664,931 | 549,430 | 92,397 | 641,827 | 592,649 | 109,377 | 702,026 | |||||||||||||||||||
Net loans charged-off (recovered): | |||||||||||||||||||||||||||
BPPR | |||||||||||||||||||||||||||
Commercial | 17,059 | 19,833 | 36,892 | 4,802 | 11,599 | 16,401 | 9,309 | 5,438 | 14,747 | ||||||||||||||||||
Construction | 1,721 | 14,615 | 16,336 | (2,925 | ) | 5,771 | 2,846 | (615 | ) | 3,700 | 3,085 | ||||||||||||||||
Lease financing | 973 | - | 973 | 769 | - | 769 | 1,144 | 1 | 1,145 | ||||||||||||||||||
Mortgage | 10,739 | 178 | 10,917 | 10,473 | 3,281 | 13,754 | 9,926 | 2,251 | 12,177 | ||||||||||||||||||
Consumer | 14,654 | 679 | 15,333 | 23,653 | (727 | ) | 22,926 | 23,571 | (678 | ) | 22,893 | ||||||||||||||||
Total BPPR | 45,146 | 35,305 | 80,451 | 36,772 | 19,924 | 56,696 | 43,335 | 10,712 | 54,047 | ||||||||||||||||||
BPNA | |||||||||||||||||||||||||||
Commercial | (879 | ) | - | (879 | ) | (479 | ) | - | (479 | ) | 910 | - | 910 | ||||||||||||||
Legacy [1] | 30 | - | 30 | (1,828 | ) | - | (1,828 | ) | (1,205 | ) | - | (1,205 | ) | ||||||||||||||
Mortgage | 176 | - | 176 | 154 | - | 154 | 393 | - | 393 | ||||||||||||||||||
Consumer | 1,969 | - | 1,969 | 1,267 | - | 1,267 | 2,768 | - | 2,768 | ||||||||||||||||||
Total BPNA | 1,296 | - | 1,296 | (886 | ) | - | (886 | ) | 2,866 | - | 2,866 | ||||||||||||||||
Total loans charged-off - Popular, Inc. | 46,442 | 35,305 | 81,747 | 35,886 | 19,924 | 55,810 | 46,201 | 10,712 | 56,913 | ||||||||||||||||||
Balance transferred from covered to non-covered loans [4] | 13,037 | (13,037 | ) | - | - | - | - | - | - | - | |||||||||||||||||
Net (write-downs) recoveries [3] | (30,548 | ) | (1,823 | ) | (32,371 | ) | 2,680 | - | 2,680 | - | - | - | |||||||||||||||
Net write-downs related to loans transferred to discontinued operations | - | - | - | - | - | - | (20,202 | ) | - | (20,202 | ) | ||||||||||||||||
Balance at end of period | $512,739 | $38,074 | $550,813 | $516,224 | $72,473 | $588,697 | $526,246 | $98,665 | $624,911 | ||||||||||||||||||
POPULAR, INC. | |||||||||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 0.89 | % | 1.41 | % | 0.72 | % | 1.00 | % | 0.94 | % | 1.01 | % | |||||||||||||||
Provision for loan losses to net charge-offs [2] | 1.28x | 0.92x | 0.83x | 0.72x | 1.08x | 1.08x | |||||||||||||||||||||
BPPR | |||||||||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 1.10 | % | 1.71 | % | 0.92 | % | 1.22 | % | 1.09 | % | 1.16 | % | |||||||||||||||
Provision for loan losses to net charge-offs [2] | 1.32x | 0.94x | 0.87x | 0.74x | 1.73x | 1.60x | |||||||||||||||||||||
BPNA | |||||||||||||||||||||||||||
Annualized net charge-offs (recoveries) to average loans held-in-portfolio | 0.12 | % | (0.09 | )% | 0.30 | % | |||||||||||||||||||||
Provision for loan losses to net charge-offs | N.M. | N.M. | N.M. | ||||||||||||||||||||||||
[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. | |||||||||||||||||||||||||||
[3] Net write-downs are related to loans sold or reclassified to held-for-sale. | |||||||||||||||||||||||||||
[4] Represents the transfer of covered to non-covered loans at June 30, 2015. | |||||||||||||||||||||||||||
N.M. - Not meaningful. | |||||||||||||||||||||||||||
Popular, Inc. | |||||||||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | |||||||||||||||||||||
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
30-Jun-15 | |||||||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy [3] | Mortgage | Lease financing | Consumer |
Total [2] |
||||||||||||||
Specific ALLL | $68,456 | $725 | $34 | $44,162 | $607 | $25,027 | $139,011 | ||||||||||||||
Impaired loans | [1] | $337,577 | $3,627 | $1,357 | $455,834 | $2,554 | $114,877 | $915,826 | |||||||||||||
Specific ALLL to impaired loans | [1] | 20.28 | % | 19.99 | % |
2.51 |
% | 9.69 | % | 23.77 | % | 21.79 | % | 15.18 | % | ||||||
General ALLL | $147,264 | $8,262 | $3,281 | $85,785 | $8,553 | $120,583 | $373,728 | ||||||||||||||
Loans held-in-portfolio, excluding impaired loans | [1] | $9,667,139 | $692,383 | $71,145 | $6,769,989 | $590,262 | $3,728,401 | $21,519,319 | |||||||||||||
General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 1.52 | % | 1.19 | % | 4.61 | % | 1.27 | % | 1.45 | % | 3.23 | % | 1.74 | % | ||||||
Total ALLL | $215,720 | $8,987 | $3,315 | $129,947 | $9,160 | $145,610 | $512,739 | ||||||||||||||
Total non-covered loans held-in-portfolio | [1] | $10,004,716 | $696,010 | $72,502 | $7,225,823 | $592,816 | $3,843,278 | $22,435,145 | |||||||||||||
ALLL to loans held-in-portfolio | [1] | 2.16 | % | 1.29 | % | 4.57 | % | 1.80 | % | 1.55 | % | 3.79 | % | 2.29 | % | ||||||
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. | |||||||||||||||||||||
[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of June 30, 2015 the general allowance on the covered loans amounted to $38.1 million. | |||||||||||||||||||||
[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. | |||||||||||||||||||||
31-Mar-15 | |||||||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy [3] | Mortgage | Lease financing | Consumer |
Total [2] |
||||||||||||||
Specific ALLL | $69,946 | $158 | $- | $42,570 | $687 | $25,604 | $138,965 | ||||||||||||||
Impaired loans | [1] | $417,377 | $9,838 | $- | $450,612 | $2,924 | $116,464 | $997,215 | |||||||||||||
Specific ALLL to impaired loans | [1] | 16.76 | % | 1.61 | % | - | % | 9.45 | % | 23.50 | % | 21.98 | % | 13.94 | % | ||||||
General ALLL | $135,946 | $3,286 | $2,962 | $86,271 | $6,521 | $142,273 | $377,259 | ||||||||||||||
Loans held-in-portfolio, excluding impaired loans | [1] | $8,236,184 | $680,890 | $77,675 | $6,738,615 | $578,195 | $3,704,156 | $20,015,715 | |||||||||||||
General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 1.65 | % | 0.48 | % | 3.81 | % | 1.28 | % | 1.13 | % | 3.84 | % | 1.88 | % | ||||||
Total ALLL | $205,892 | $3,444 | $2,962 | $128,841 | $7,208 | $167,877 | $516,224 | ||||||||||||||
Total non-covered loans held-in-portfolio | [1] | $8,653,561 | $690,728 | $77,675 | $7,189,227 | $581,119 | $3,820,620 | $21,012,930 | |||||||||||||
ALLL to loans held-in-portfolio | [1] | 2.38 | % | 0.50 | % | 3.81 | % | 1.79 | % | 1.24 | % | 4.39 | % | 2.46 | % | ||||||
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. | |||||||||||||||||||||
[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of March 31, 2015 the general allowance on the covered loans amounted to $71.0 million, while the specific reserve amounted to $1.5 million. | |||||||||||||||||||||
[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 | $(1,490 | ) | $567 | $34 | $1,592 | $(80 | ) | $(577 | ) | $46 | |||||||||||
Impaired loans | $(79,800 | ) | $(6,211 | ) | $1,357 | $5,222 | $(370 | ) | $(1,587 | ) | $(81,389 | ) | |||||||||
General ALLL | $11,318 | $4,976 | $319 | $(486 | ) | $2,032 | $(21,690 | ) | $(3,531 | ) | |||||||||||
Loans held-in-portfolio, excluding impaired loans | $1,430,955 | $11,493 | $(6,530 | ) | $31,374 | $12,067 | $24,245 | $1,503,604 | |||||||||||||
Total ALLL | $9,828 | $5,543 | $353 | $1,106 | $1,952 | $(22,267 | ) | $(3,485 | ) | ||||||||||||
Total non-covered loans held-in-portfolio | $1,351,155 | $5,282 | $(5,173 | ) | $36,596 | $11,697 | $22,658 | $1,422,215 | |||||||||||||
Popular, Inc. | ||||||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | ||||||||||||||||||
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
30-Jun-15 | ||||||||||||||||||
Puerto Rico | ||||||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | ||||||||||||
Allowance for credit losses: | ||||||||||||||||||
Specific ALLL non-covered loans | $68,456 | $725 | $43,749 | $607 | $24,615 | $138,152 | ||||||||||||
General ALLL non-covered loans | 138,639 | 5,833 | 82,428 | 8,553 | 109,095 | 344,548 | ||||||||||||
ALLL - non-covered loans | 207,095 | 6,558 | 126,177 | 9,160 | 133,710 | 482,700 | ||||||||||||
Specific ALLL covered loans | - | - | - | - | - | - | ||||||||||||
General ALLL covered loans | - | - | 37,815 | - | 259 | 38,074 | ||||||||||||
ALLL - covered loans | - | - | 37,815 | - | 259 | 38,074 | ||||||||||||
Total ALLL | $207,095 | $6,558 | $163,992 | $9,160 | $133,969 | $520,774 | ||||||||||||
Loans held-in-portfolio: | ||||||||||||||||||
Impaired non-covered loans | $337,577 | $3,627 | $450,789 | $2,554 | $112,733 | $907,280 | ||||||||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 7,231,433 | 109,819 | 5,793,594 | 590,262 | 3,282,292 | 17,007,400 | ||||||||||||
Non-covered loans held-in-portfolio | 7,569,010 | 113,446 | 6,244,383 | 592,816 | 3,395,025 | 17,914,680 | ||||||||||||
Impaired covered loans | - | - | - | - | - | - | ||||||||||||
Covered loans held-in-portfolio, excluding impaired loans | 3 | - | 671,074 | - | 18,573 | 689,650 | ||||||||||||
Covered loans held-in-portfolio | 3 | - | 671,074 | - | 18,573 | 689,650 | ||||||||||||
Total loans held-in-portfolio | $7,569,013 | $113,446 | $6,915,457 | $592,816 | $3,413,598 | $18,604,330 | ||||||||||||
31-Mar-15 | ||||||||||||||||||
Puerto Rico | ||||||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | ||||||||||||
Allowance for credit losses: | ||||||||||||||||||
Specific ALLL non-covered loans | $69,946 | $158 | $42,229 | $687 | $25,223 | $138,243 | ||||||||||||
General ALLL non-covered loans | 125,520 | 1,437 | 84,350 | 6,521 | 128,205 | 346,033 | ||||||||||||
ALLL - non-covered loans | 195,466 | 1,595 | 126,579 | 7,208 | 153,428 | 484,276 | ||||||||||||
Specific ALLL covered loans | 1,473 | - | - | - | - | 1,473 | ||||||||||||
General ALLL covered loans | 19,794 | 7,707 | 40,469 | - | 3,030 | 71,000 | ||||||||||||
ALLL - covered loans | 21,267 | 7,707 | 40,469 | - | 3,030 | 72,473 | ||||||||||||
Total ALLL | $216,733 | $9,302 | $167,048 | $7,208 | $156,458 | $556,749 | ||||||||||||
Loans held-in-portfolio: | ||||||||||||||||||
Impaired non-covered loans | $417,377 | $9,838 | $445,506 | $2,924 | $114,416 | $990,061 | ||||||||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 5,984,132 | 88,868 | 5,725,741 | 578,195 | 3,237,790 | 15,614,726 | ||||||||||||
Non-covered loans held-in-portfolio | 6,401,509 | 98,706 | 6,171,247 | 581,119 | 3,352,206 | 16,604,787 | ||||||||||||
Impaired covered loans | 8,394 | 2,336 | - | - | - | 10,730 | ||||||||||||
Covered loans held-in-portfolio, excluding impaired loans | 1,562,753 | 55,489 | 795,477 | - | 32,103 | 2,445,822 | ||||||||||||
Covered loans held-in-portfolio | 1,571,147 | 57,825 | 795,477 | - | 32,103 | 2,456,552 | ||||||||||||
Total loans held-in-portfolio | $7,972,656 | $156,531 | $6,966,724 | $581,119 | $3,384,309 | $19,061,339 | ||||||||||||
Variance | ||||||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | ||||||||||||
Allowance for credit losses: | ||||||||||||||||||
Specific ALLL non-covered loans | $(1,490 | ) | $567 | $1,520 | $(80 | ) | $(608 | ) | $(91 | ) | ||||||||
General ALLL non-covered loans | 13,119 | 4,396 | (1,922 | ) | 2,032 | (19,110 | ) | (1,485 | ) | |||||||||
ALLL - non-covered loans | 11,629 | 4,963 | (402 | ) | 1,952 | (19,718 | ) | (1,576 | ) | |||||||||
Specific ALLL covered loans | (1,473 | ) | - | - | - | - | (1,473 | ) | ||||||||||
General ALLL covered loans | (19,794 | ) | (7,707 | ) | (2,654 | ) | - | (2,771 | ) | (32,926 | ) | |||||||
ALLL - covered loans | (21,267 | ) | (7,707 | ) | (2,654 | ) | - | (2,771 | ) | (34,399 | ) | |||||||
Total ALLL | $(9,638 | ) | $(2,744 | ) | $(3,056 | ) | $1,952 | $(22,489 | ) | $(35,975 | ) | |||||||
Loans held-in-portfolio: | ||||||||||||||||||
Impaired non-covered loans | $(79,800 | ) | $(6,211 | ) | $5,283 | $(370 | ) | $(1,683 | ) | $(82,781 | ) | |||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 1,247,301 | 20,951 | 67,853 | 12,067 | 44,502 | 1,392,674 | ||||||||||||
Non-covered loans held-in-portfolio | 1,167,501 | 14,740 | 73,136 | 11,697 | 42,819 | 1,309,893 | ||||||||||||
Impaired covered loans | (8,394 | ) | (2,336 | ) | - | - | - | (10,730 | ) | |||||||||
Covered loans held-in-portfolio, excluding impaired loans | (1,562,750 | ) | (55,489 | ) | (124,403 | ) | - | (13,530 | ) | (1,756,172 | ) | |||||||
Covered loans held-in-portfolio | (1,571,144 | ) | (57,825 | ) | (124,403 | ) | - | (13,530 | ) | (1,766,902 | ) | |||||||
Total loans held-in-portfolio | $(403,643 | ) | $(43,085 | ) | $(51,267 | ) | $11,697 | $29,289 | $(457,009 | ) | ||||||||
Popular, Inc. | ||||||||||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | ||||||||||||||||||
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
30-Jun-15 | ||||||||||||||||||
U.S. Mainland | ||||||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | ||||||||||||
Allowance for credit losses: | ||||||||||||||||||
Specific ALLL | $- | $- | $34 | $413 | $412 | $859 | ||||||||||||
General ALLL | 8,625 | 2,429 | 3,281 | 3,357 | 11,488 | 29,180 | ||||||||||||
Total ALLL | $8,625 | $2,429 | $3,315 | $3,770 | $11,900 | $30,039 | ||||||||||||
Loans held-in-portfolio: | ||||||||||||||||||
Impaired loans | $- | $- | $1,357 | $5,045 | $2,144 | $8,546 | ||||||||||||
Loans held-in-portfolio, excluding impaired loans | 2,435,706 | 582,564 | 71,145 | 976,395 | 446,109 | 4,511,919 | ||||||||||||
Total loans held-in-portfolio | $2,435,706 | $582,564 | $72,502 | $981,440 | $448,253 | $4,520,465 | ||||||||||||
31-Mar-15 | ||||||||||||||||||
U.S. Mainland | ||||||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | ||||||||||||
Allowance for credit losses: | ||||||||||||||||||
Specific ALLL | $- | $- | $- | $341 | $381 | $722 | ||||||||||||
General ALLL | 10,426 | 1,849 | 2,962 | 1,921 | 14,068 | 31,226 | ||||||||||||
Total ALLL | $10,426 | $1,849 | $2,962 | $2,262 | $14,449 | $31,948 | ||||||||||||
Loans held-in-portfolio: | ||||||||||||||||||
Impaired loans | $- | $- | $- | $5,106 | $2,048 | $7,154 | ||||||||||||
Loans held-in-portfolio, excluding impaired loans | 2,252,052 | 592,022 | 77,675 | 1,012,874 | 466,366 | 4,400,989 | ||||||||||||
Total loans held-in-portfolio | $2,252,052 | $592,022 | $77,675 | $1,017,980 | $468,414 | $4,408,143 | ||||||||||||
Variance | ||||||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | ||||||||||||
Allowance for credit losses: | ||||||||||||||||||
Specific ALLL | $- | $- | $34 | $72 | $31 | $137 | ||||||||||||
General ALLL | (1,801 | ) | 580 | 319 | 1,436 | (2,580 | ) | (2,046 | ) | |||||||||
Total ALLL | $(1,801 | ) | $580 | $353 | $1,508 | $(2,549 | ) | $(1,909 | ) | |||||||||
Loans held-in-portfolio: | ||||||||||||||||||
Impaired loans | $- | $- | $1,357 | $(61 | ) | $96 | $1,392 | |||||||||||
Loans held-in-portfolio, excluding impaired loans | 183,654 | (9,458 | ) | (6,530 | ) | (36,479 | ) | (20,257 | ) | 110,930 | ||||||||
Total loans held-in-portfolio | $183,654 | $(9,458 | ) | $(5,173 | ) | $(36,540 | ) | $(20,161 | ) | $112,322 | ||||||||
Popular, Inc. | |||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | |||||||||
Table N - Reconciliation to GAAP Financial Measures | |||||||||
(Unaudited) | |||||||||
(In thousands, except share or per share information) | 30-Jun-15 | 31-Mar-15 | 30-Jun-14 | ||||||
Total stockholders’ equity | $4,949,653 | $4,377,120 | $4,260,441 | ||||||
Less: Preferred stock | (50,160 | ) | (50,160 | ) | (50,160 | ) | |||
Less: Goodwill | (505,578 | ) | (508,310 | ) | (461,246 | ) | |||
Less: Other intangibles | (72,735 | ) | (59,063 | ) | (40,122 | ) | |||
Total tangible common equity | $4,321,180 | $3,759,587 | $3,708,913 | ||||||
Total assets | $36,750,113 | $35,624,840 | $36,587,902 | ||||||
Less: Goodwill | (505,578 | ) | (508,310 | ) | (461,246 | ) | |||
Less: Other intangibles | (72,735 | ) | (59,063 | ) | (40,122 | ) | |||
Total tangible assets | $36,171,800 | $35,057,467 | $36,086,534 | ||||||
Tangible common equity to tangible assets | 11.95 | % | 10.72 | % | 10.28 | % | |||
Common shares outstanding at end of period | 103,503,912 | 103,486,927 | 103,472,979 | ||||||
Tangible book value per common share | $41.75 | $36.33 | $35.84 | ||||||
Popular, Inc. | |||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | |||||||||
Table O - Financial Information - Westernbank Loans | |||||||||
(Unaudited) | |||||||||
Revenues | |||||||||
Quarters ended | |||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | Variance | ||||||
Interest income on covered loans | $55,335 | $57,431 | $(2,096 | ) | |||||
FDIC loss share income (expense): | |||||||||
Amortization of indemnification asset | (31,065 | ) | (27,316 | ) | (3,749 | ) | |||
80% mirror accounting on credit impairment losses [1] | 7,647 | 8,246 | (599 | ) | |||||
80% mirror accounting on reimbursable expenses | 42,730 | 21,545 | 21,185 | ||||||
80% mirror accounting on recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC |
(5,203 | ) | (2,619 | ) | (2,584 | ) | |||
Change in true-up payment obligation | 3,672 | 4,164 | (492 | ) | |||||
Other | 1,293 | 119 | 1,174 | ||||||
Total FDIC loss share income (expense) | 19,074 | 4,139 | 14,935 | ||||||
Total revenues | 74,409 | 61,570 | 12,839 | ||||||
Provision for loan losses | 15,766 | 10,324 | 5,442 | ||||||
Total revenues less provision for loan losses | $58,643 | $51,246 | $7,397 | ||||||
[1] Reductions in expected cash flows for ASC 310-30 loans, which may impact the provision for loan losses, may consider reductions in both principal and interest cash flow expectations. The amount covered under the FDIC loss sharing agreements for interest not collected from borrowers is limited under the agreements (approximately 90 days); accordingly, these amounts are not subject fully to the 80% mirror accounting. |
|||||||||
Non-personnel operating expenses | |||||||||
Quarters ended | |||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | Variance | ||||||
Professional fees | $5,701 | $3,225 | $2,476 | ||||||
OREO expenses | 34,262 | 13,823 | 20,439 | ||||||
Other operating expenses | 10,125 | 2,461 | 7,664 | ||||||
Total operating expenses | $50,088 | $19,509 | $30,579 | ||||||
Expense reimbursements from the FDIC may be recorded with a time lag, since these are claimed upon the event of loss or charge-off of the loans which may occur in a subsequent period. | |||||||||
Quarterly average assets | |||||||||
Quarters ended | |||||||||
(In millions) | 30-Jun-15 | 31-Mar-15 | Variance | ||||||
Loans | $2,350 | $2,540 | $(190 | ) | |||||
FDIC loss share asset | 391 | 429 | (38 | ) | |||||
Activity in the carrying amount and accretable yield of loans accounted for under ASC 310-30 | ||||||||||||
Quarters ended | ||||||||||||
30-Jun-15 | 31-Mar-15 | |||||||||||
(In thousands) | Accretable yield | Carrying amount of loans | Accretable yield | Carrying amount of loans | ||||||||
Beginning balance | $1,258,948 | $2,367,096 | $1,271,337 | $2,444,172 | ||||||||
Accretion | (53,994 | ) | 53,994 | (55,697 | ) | 55,697 | ||||||
Changes in expected cash flows | 40,970 | - | 43,308 | - | ||||||||
Collections / charge-offs | - | (284,012 | ) | - | (132,773 | ) | ||||||
Ending balance | 1,245,924 | 2,137,078 | 1,258,948 | 2,367,096 | ||||||||
Allowance for loan losses - ASC 310-30 loans | - | (47,049 | ) | - | (68,386 | ) | ||||||
Ending balance, net of allowance for loan losses | $1,245,924 | $2,090,029 | $1,258,948 | $2,298,710 | ||||||||
The carrying amount of loans acquired from Westernbank and accounted for under ASC 310-30 which remain subject to the loss sharing agreement with the FDIC amounted to approximately $680 million as of June 30, 2015. | ||||||||||||
Activity in the carrying amount of the FDIC indemnity asset | ||||||||||||
Quarters ended | ||||||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | ||||||||||
Balance at beginning of period | $409,844 | $542,454 | ||||||||||
Amortization | (31,065 | ) | (27,316 | ) | ||||||||
Credit impairment losses to be covered under loss sharing agreements | 7,647 | 8,246 | ||||||||||
Reimbursable expenses to be covered under loss sharing agreements | 42,730 | 21,545 | ||||||||||
Net payments from FDIC under loss sharing agreements | (32,158 | ) | (132,265 | ) | ||||||||
Other adjustments attributable to FDIC loss sharing agreements | (4,051 | ) | (2,820 | ) | ||||||||
Balance at end of period |
$392,947 |
$409,844 |
||||||||||
Activity in the remaining FDIC loss share asset amortization | ||||||||||||
Quarters ended | ||||||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | ||||||||||
Balance at beginning of period | $38,687 | $53,095 | ||||||||||
Amortization | (31,065 | ) | (27,316 | ) | ||||||||
Impact of lower projected losses | 20,871 | 12,908 | ||||||||||
Balance at end of period | $28,493 | $38,687 | ||||||||||
POPULAR, INC. | ||||||||||
Financial Supplement to Second Quarter 2015 Earnings Release | ||||||||||
Table P - Restructuring Charges | ||||||||||
(Unaudited) | ||||||||||
Restructuring Charges | ||||||||||
Quarters ended | ||||||||||
(In thousands) | 30-Jun-15 | 31-Mar-15 | Variance | |||||||
Personnel costs | $ | 2,866 | $ | 9,366 | $ | (6,500 | ) | |||
Net occupancy expenses | 2,660 | 386 | 2,274 | |||||||
Equipment expenses | 66 | 158 | (92 | ) | ||||||
Professional fees | 315 | 466 | (151 | ) | ||||||
Other operating expenses | 267 | 377 | (110 | ) | ||||||
Total restructuring costs | $ | 6,174 | $ | 10,753 | $ | (4,579 | ) |
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