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
26, 2016 |
POPULAR, INC.
(Exact
name of registrant as specified in its charter)
COMMONWEALTH OF PUERTO |
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|
RICO |
001-34084 |
66-0667416 |
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(State or other jurisdiction of incorporation or organization) |
(Commission File |
(IRS Employer Identification |
209 MUNOZ RIVERA AVENUE |
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(Address of principal executive offices) | (Zip code) |
(787) 765-9800 |
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(Registrant's telephone number, including area code) |
NOT APPLICABLE |
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(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, 26, 2016 Popular, Inc. issued a news release announcing its unaudited financial results for the quarter ended June 30, 2016, 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 26, 2016
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. |
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(Registrant) |
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Date: | July 26, 2016 |
By: /s/ Jorge J. García |
Jorge J. García |
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Senior Vice President and Corporate Comptroller |
Exhibit 99.1
Popular, Inc. Announces Second Quarter Financial Results
SAN JUAN, Puerto Rico--(BUSINESS WIRE)--July 26, 2016--Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $89.0 million for the quarter ended June 30, 2016, compared to net income of $85.0 million for the quarter ended March 31, 2016.
Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: “We are pleased to report another solid quarter with strong net income, revenue and credit metrics. Also our U.S. operation delivered significant loan growth while maintaining strong credit quality. We are hopeful that recent legislative actions by the U.S. Congress will be a catalyst in revitalizing Puerto Rico's economy.”
Significant Events
The Corporation’s results for the second quarter of 2016 include the sale of commercial and construction loans with a carrying value of approximately $100 million and OREO with a carrying value of $9 million acquired in 2010 from the FDIC as receiver for Westernbank ("WB"). The sale resulted in a net benefit of approximately $8 million from the sale of the loans and a loss of $5.1 million from the sale of OREO. The Corporation incurred $1.8 million in fees for professional services directly associated with this transaction. Refer to additional details on the Adjusted Results Non-GAAP section on this earnings release.
On May 26, 2016, EVERTEC, Inc., in which the Corporation owns a 15.74% interest, filed its Annual Report on Form 10-K for the year ended December 31, 2015, which included restated audited results for the years ended December 31, 2014 and 2013, correcting certain material errors involved with the accounting for tax positions taken by EVERTEC in the 2010 tax year and other miscellaneous accounting adjustments. The Corporation’s proportionate share of the cumulative impact of EVERTEC's restatement and other corrective adjustments to its financial statements was approximately $2.2 million and is reflected as part of other non-interest income.
Earnings Highlights | ||||||||||||||||||
(Unaudited) | Quarters ended | Six months ended | ||||||||||||||||
(Dollars in thousands, except per share information) | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | 30-Jun-16 | 30-Jun-15 | |||||||||||||
Net interest income | $360,551 | $352,412 | $362,553 | $712,963 | $705,748 | |||||||||||||
Provision for loan losses | 39,668 | 47,940 | 60,468 | 87,608 | 90,179 | |||||||||||||
Provision (reversal) for loan losses - covered loans [1] | 804 | (3,105) | 15,766 | (2,301) | 26,090 | |||||||||||||
Net interest income after provision for loan losses | 320,079 | 307,577 | 286,319 | 627,656 | 589,479 | |||||||||||||
FDIC loss-share (expense) income | (12,576) | (3,146) | 19,075 | (15,722) | 23,214 | |||||||||||||
Other non-interest income | 123,079 | 114,776 | 121,684 | 237,855 | 232,780 | |||||||||||||
Operating expenses | 309,149 | 301,943 | 363,174 | 611,092 | 675,515 | |||||||||||||
Income from continuing operations before income tax | 121,433 | 117,264 | 63,904 | 238,697 | 169,958 | |||||||||||||
Income tax expense (benefit) | 32,446 | 32,265 | (533,533) | 64,711 | (500,964) | |||||||||||||
Income from continuing operations | 88,987 | 84,999 | 597,437 | 173,986 | 670,922 | |||||||||||||
Income from discontinued operations, net of tax | - | - | 15 | - | 1,356 | |||||||||||||
Net income | $88,987 | $84,999 | $597,452 | $173,986 | $672,278 | |||||||||||||
Net income applicable to common stock | $88,056 | $84,068 | $596,521 | $172,124 | $670,417 | |||||||||||||
Net income per common share from continuing operations - Basic | $0.85 | $0.81 | $5.80 | $1.67 | $6.51 | |||||||||||||
Net income per common share from continuing operations - Diluted | $0.85 | $0.81 | $5.79 | $1.67 | $6.49 | |||||||||||||
Net income per common share from discontinued operations - Basic | $- | $- | $- | $- | $0.01 | |||||||||||||
Net income per common share from discontinued operations - Diluted | $- | $- | $- | $- | $0.01 | |||||||||||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement. | ||||||||||||||||||
Adjusted results – Non-GAAP
The Corporation prepared its Consolidated Financial Statement using accounting principles generally accepted in the U.S. (“U.S. GAAP” or the “reported basis”). In addition to analyzing the Corporation’s results on a reported basis, management monitors the performance of the Corporation on an “adjusted basis” and excludes the impact of certain transactions on the results of its operations. Management believes that the “adjusted basis” provides meaningful information about the underlying performance of the Corporation’s ongoing operations. The “adjusted basis” is a non-GAAP financial measure.
The following tables reflect the results of operations for the second quarter of 2016 compared to the first quarter of 2016 results, with adjustments to exclude the impact of certain events during the second quarter of 2016. No adjustments are reflected for the first quarter of 2016 results.
Reconciliation to GAAP Financial Measures
Quarter ended | ||||||||||
(Unaudited) | 30-Jun-16 | |||||||||
(In thousands) |
Actual Results (U.S. GAAP) |
Impact of EVERTEC's Restatement [2] |
Bulk Sale of WB loans and OREO [3] |
Adjusted Results (Non-GAAP) |
||||||
Net interest income | $360,551 | $- | $2,057 | $358,494 | ||||||
Provision for loan losses – non-covered loans | 39,668 | - | (5,445) | 45,113 | ||||||
Provision for loan losses – covered loans [1] | 804 | - | - | 804 | ||||||
Net interest income after provision for loan losses | 320,079 | - | 7,502 | 312,577 | ||||||
Mortgage banking activities | 16,227 | - | - | 16,227 | ||||||
FDIC loss-share (expense) income | (12,576) | - | 291 | (12,867) | ||||||
Other non-interest income | 106,852 | (2,173) | - | 109,025 | ||||||
Total non-interest income | 110,503 | (2,173) | 291 | 112,385 | ||||||
Personnel costs | 116,708 | - | - | 116,708 | ||||||
Net occupancy expenses | 21,714 | - | - | 21,714 | ||||||
Equipment expenses | 15,261 | - | - | 15,261 | ||||||
Professional fees | 80,625 | - | 1,812 | 78,813 | ||||||
Communications | 6,012 | - | - | 6,012 | ||||||
Business promotion | 13,705 | - | - | 13,705 | ||||||
Other real estate owned (OREO) expenses | 12,980 | - | 5,090 | 7,890 | ||||||
Amortization of intangibles | 3,097 | - | - | 3,097 | ||||||
Other operating expenses | 39,047 | - | - | 39,047 | ||||||
Total operating expenses | 309,149 | - | 6,902 | 302,247 | ||||||
Income before income tax | 121,433 | (2,173) | 891 | 122,715 | ||||||
Income tax expense | 32,446 | - | 347 | 32,099 | ||||||
Net income | $88,987 | $(2,173) | $544 | $90,616 | ||||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement. | ||||||||||
[2] Represents Popular Inc's. proportionate share of the cumulative impact of EVERTEC's restatement and other corrective adjustments to its financial statements, as disclosed in EVERTEC's 2015 Annual Report on Form 10K. | ||||||||||
[3] Represent the impact of the bulk sale of Westernbank loans and OREO. | ||||||||||
Quarters ended | ||||||||
(Unaudited) |
Adjusted Results Non-GAAP |
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(In thousands) | 30-Jun-16 | 31-Mar-16 | Variance | |||||
Net interest income | $358,494 | $352,412 | $6,082 | |||||
Provision for loan losses – non-covered loans | 45,113 | 47,940 | (2,827) | |||||
Provision for loan losses – covered loans [1] | 804 | (3,105) | 3,909 | |||||
Net interest income after provision for loan losses | 312,577 | 307,577 | 5,000 | |||||
Mortgage banking activities | 16,227 | 10,551 | 5,676 | |||||
FDIC loss-share expense | (12,867) | (3,146) | (9,721) | |||||
Other non-interest income | 109,025 | 104,225 | 4,800 | |||||
Total non-interest income | 112,385 | 111,630 | 755 | |||||
Personnel costs | 116,708 | 127,091 | (10,383) | |||||
Net occupancy expenses | 21,714 | 20,430 | 1,284 | |||||
Equipment expenses | 15,261 | 14,548 | 713 | |||||
Professional fees | 78,813 | 75,459 | 3,354 | |||||
Communications | 6,012 | 6,320 | (308) | |||||
Business promotion | 13,705 | 11,110 | 2,595 | |||||
Other real estate owned (OREO) expenses | 7,890 | 9,141 | (1,251) | |||||
Amortization of intangibles | 3,097 | 3,114 | (17) | |||||
Other operating expenses | 39,047 | 34,730 | 4,317 | |||||
Total operating expenses | 302,247 | 301,943 | 304 | |||||
Income before income tax | 122,715 | 117,264 | 5,451 | |||||
Income tax expense | 32,099 | 32,265 | (166) | |||||
Net income | $90,616 | $84,999 | $5,617 | |||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement. | ||||||||
Net interest income
Net interest income for the quarter ended June 30, 2016 was $360.6 million, compared to $352.4 million for the previous quarter. Net interest margin was 4.33% for the quarter compared to 4.43% for the previous quarter.
On an adjusted basis, the net interest income for the second quarter of 2016 was $358.5 million and the net interest margin was 4.31%. Refer to the Adjusted Results – Non-GAAP section for additional information on the adjusted net interest income for the quarter ended June 30, 2016.
The increase in net interest income was mainly related to:
These positive variances were partially offset by:
BPPR’s net interest income amounted to $310.4 million for the quarter ended June 30, 2016, or $308.3 million on an adjusted basis, compared to $305.4 million for the previous quarter. The increase of $2.9 million in adjusted net interest income was mainly due to higher income on investment securities, higher income from Westernbank loans and lower funding costs from the lower volume of borrowings and brokered CDs. These positive variances were partially offset by lower yields from commercial loans mainly due to lower loan fees and a decrease in interest income on commercial real estate loans. Net interest margin declined to 4.71%, or 4.67% on an adjusted basis, from 4.87% in the previous quarter mainly driven by lower yields on investment securities and commercial loans, as explained above. Earning assets in P.R. yielded 5.04% down from 5.27% in the previous quarter related to the above mentioned higher overnight investment balances, while the cost of interest bearing liabilities was 0.53%, compared to 0.57% in the previous quarter, mainly from lower cost of time deposits.
BPNA’s net interest income was $65.5 million, compared to $62.3 million for the previous quarter. The increase of $3.2 million in the net interest income is mainly driven by strong growth of the commercial portfolio and consumer loans acquired and the higher volume of the investment portfolio. Lower income from mortgage loans and higher interest expense on deposits to fund the loan growth partially offset the positive variances. Net interest margin was 3.80% compared to 3.70% for the previous quarter. The increase of 10 basis points was mainly driven by the change in the composition of earning assets. U.S. earning assets yielded 4.47%, compared to 4.36% in the previous quarter, while the cost of interest bearing liabilities remained relatively flat at 0.87%, from 0.85% in the previous quarter.
Non-interest income
Non-interest income was $110.5 million for the second quarter of 2016, a decrease of $1.1 million when compared to the first quarter of 2016. The decrease in non-interest income was driven primarily by the following:
These decreases were partially offset by:
Excluding the impact of the transactions detailed in the Adjusted Results Non-GAAP tables above, non-interest income increased by $0.8 million when compared to the first quarter of 2016.
Refer to Table B for further details.
Financial Impact of the 2010 FDIC-Assisted Transaction | ||||||||||||||||
(Unaudited) | Quarters ended | Six months ended | ||||||||||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | 30-Jun-16 | 30-Jun-15 | |||||||||||
Income Statement |
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Interest income on WB loans | $49,794 | $44,904 | $55,335 | $94,698 | $112,766 | |||||||||||
Total FDIC loss-share (expense) income | (12,576) | (3,146) | 19,075 | (15,722) | 23,214 | |||||||||||
Provision (reversal) for loan losses- WB loans | (7,282) | (356) | 15,766 | (7,638) | 26,090 | |||||||||||
Total revenues less provision (reversal) for loan losses | $44,500 | $42,114 | $58,644 | $86,614 | $109,890 | |||||||||||
Balance Sheet |
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WB loans | $1,932,062 | $2,071,191 | $2,284,955 | |||||||||||||
FDIC loss-share asset | 214,029 | 219,448 | 392,947 | |||||||||||||
FDIC true-up payment obligation | 127,876 | 120,188 | 121,469 | |||||||||||||
See additional details on accounting for the 2010 FDIC-Assisted transaction in Table O. |
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Operating expenses
Operating expenses amounted to $309.1 million for the second quarter of 2016, an increase of $7.2 million when compared to the first quarter of 2016. The increase in operating expenses was driven primarily by:
These increases were partially offset by:
Excluding the impact of the transactions detailed in the Adjusted Results Non-GAAP tables above, operating expenses increased by $0.3 million compared to the first quarter of 2016.
Non-personnel credit-related costs, which include collections, appraisals, credit related fees, and OREO expenses, amounted to $18.0 million for the second quarter of 2016, compared to $13.6 million for the first quarter of 2016. The increase was principally due to a loss on the bulk sale of Westernbank OREO at BPPR amounting to $5.1 million. Excluding the impact of the sale, the decrease of $0.7 million was mainly due to lower commercial, construction and mortgage OREO write-downs at BPPR.
Full-time equivalent employees were 7,826 as of June 30, 2016, compared to 7,812 as of March 31, 2016.
For a breakdown of operating expenses by category refer to table B.
Income taxes
For the quarter ended June 30, 2016, the Corporation recorded an income tax expense of $32.4 million, compared to $32.3 million for the previous quarter. On an adjusted basis, the income tax expense for the second quarter of 2016 was $32.1 million.
The effective income tax rate for the second quarter of 2016 was 27%, or 26% on an adjusted basis, compared to 28% for the previous quarter. The effective tax rate is impacted by the composition and source of the taxable income.
Credit Quality
The Corporation continued to experience stable credit trends despite the economic conditions in Puerto Rico. The shift in the risk profile of the credit portfolios over the last few years has better positioned the Corporation to operate in the Island’s complex environment. The Corporation continues to closely monitor changes in credit quality trends and is focused on taking measures to minimize risks. The U.S. operation continued to reflect positive results with strong growth and solid credit quality metrics.
Non-Performing Assets | |||||||
(Unaudited) | |||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | ||||
Total non-performing loans held-in-portfolio, excluding covered loans | $577,739 | $599,526 | $575,997 | ||||
Non-performing loans held-for-sale | 39,544 | 42,743 | 50,875 | ||||
Other real estate owned (“OREO”), excluding covered OREO | 177,025 | 165,960 | 142,255 | ||||
Total non-performing assets, excluding covered assets | 794,308 | 808,229 | 769,127 | ||||
Covered loans and OREO | 41,466 | 39,916 | 37,367 | ||||
Total non-performing assets | $835,774 | $848,145 | $806,494 | ||||
Net charge-offs for the quarter (excluding covered loans) | $35,401 | $42,448 | $46,442 | ||||
Ratios (excluding covered loans): | |||||||
Non-covered loans held-in-portfolio | $22,540,661 | $22,507,737 | $22,435,145 | ||||
Non-performing loans held-in-portfolio to loans held-in-portfolio | 2.56% | 2.66% | 2.57% | ||||
Allowance for loan losses to loans held-in-portfolio | 2.30 | 2.26 | 2.29 | ||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale | 89.68 | 84.80 | 89.02 | ||||
Refer to Table H for additional information. | |||||||
Provision for Loan Losses | ||||||||||
(Unaudited) | Quarters ended | Six months ended | ||||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | 30-Jun-16 | 30-Jun-15 | |||||
Provision (reversal) for loan losses: | ||||||||||
BPPR | $38,351 | $43,871 | $60,529 | $82,222 | $92,442 | |||||
BPNA | 1,317 | 4,069 | (61) | 5,386 | (2,263) | |||||
Total provision for loan losses- non-covered loans | $39,668 | $47,940 | $60,468 | $87,608 | $90,179 | |||||
Provision (reversal) for loan losses - covered loans | 804 | (3,105) | 15,766 | (2,301) | 26,090 | |||||
Total provision for loan losses | $40,472 | $44,835 | $76,234 | $85,307 | $116,269 |
Credit Quality by Segment | |||||||
(Unaudited) | |||||||
(In thousands) | Quarters ended | ||||||
BPPR | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | ||||
Provision for loan losses | $38,351 | $43,871 | $60,529 | ||||
Net charge-offs | 36,222 | 40,647 | 45,146 | ||||
Total non-performing loans held-in-portfolio, excluding covered loans | 550,632 | 561,612 | 541,767 | ||||
Allowance / non-covered loans held-in-portfolio | 2.77% | 2.70% | 2.69% | ||||
Quarters ended | |||||||
BPNA | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | ||||
Provision (reversal) for loan losses | $1,317 | $4,069 | $(61) | ||||
Net charge-offs (recoveries) | (821) | 1,801 | 1,296 | ||||
Total non-performing loans held-in-portfolio | 27,107 | 37,914 | 34,230 | ||||
Allowance / non-covered loans held-in-portfolio | 0.72% | 0.71% | 0.66% | ||||
Financial Condition Highlights | ||||||||
(Unaudited) | ||||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | |||||
Money market, trading and investment securities | $10,368,794 | $8,901,814 | $9,248,978 | |||||
Loans not covered under loss-sharing agreements with the FDIC | 22,540,661 | 22,507,737 | 22,435,145 | |||||
Loans covered under loss-sharing agreements with the FDIC | 607,170 | 625,130 | 689,650 | |||||
Total assets | 37,606,148 | 36,147,009 | 36,741,250 | |||||
Deposits | 28,737,856 | 27,526,593 | 27,750,694 | |||||
Borrowings | 2,428,752 | 2,349,992 | 3,017,609 | |||||
Liabilities from discontinued operations | 1,815 | 1,815 | 1,754 | |||||
Total liabilities | 32,246,317 | 30,896,709 | 31,791,597 | |||||
Stockholders’ equity | 5,359,831 | 5,250,300 | 4,949,653 | |||||
Total assets increased by $1.5 billion from the first quarter of 2016 driven by:
Total liabilities increased by $1.3 billion from the first quarter of 2016, principally driven by:
Stockholders’ equity increased by approximately $109.5 million from the first quarter of 2016, mainly as a result of net income for the quarter of $89.0 million and a favorable variance of $35.0 million in unrealized gains on securities available-for-sale, partially offset by payments of dividends of $15.6 million on common stock and $0.9 million in dividends on preferred stock.
Common equity tier-1 ratio (“CET1”) and tangible book value per share were 16.29% and $44.62, respectively at June 30, 2016 compared to 15.79% and $43.55 at March 31, 2016. Refer to Table A for capital ratios.
Forward-Looking Statements
The information contained in this news release contains 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. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2015, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 and our other filings with the Securities and Exchange Commission for a discussion of factors that may cause the Corporation's actual results to differ materially from any future results expressed or implied by such forward-looking statements. Those filings are available on the Corporation’s website (www.popular.com) and on the Securities and Exchange Commission website (www.SEC.gov). The Corporation does not undertake to update or revise any forward-looking statement to reflect events or circumstances that may arise 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. Popular provides retail, mortgage and commercial banking services through its principal banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. 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 under the name of Popular Community Bank.
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 Tuesday, July 26, 2016 at 11:00 a.m. Eastern Daylight Time. The call will be broadcast live over the Internet and can be accessed through the investor relations section of the Corporation’s website: www.popular.com.
Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through a dial-in telephone number 1-866-235-1201 or 1-412-902-4127.
A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Friday, August 26, 2016. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10088193.
Popular, Inc. |
Financial Supplement to Second Quarter 2016 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 |
POPULAR, INC. | ||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | ||||||||||||
Table A - Selected Ratios and Other Information | ||||||||||||
(Unaudited) | ||||||||||||
Quarters ended | Six months ended | |||||||||||
30-Jun-16 | 31-Mar-16 | 30-Jun-15 | 30-Jun-16 | 30-Jun-15 | ||||||||
Basic EPS from continuing operations | $0.85 | $0.81 | $5.80 | $1.67 | $6.51 | |||||||
Basic EPS from discontinued operations | $- | $- | $- | $- | $0.01 | |||||||
Total Basic EPS | $0.85 | $0.81 | $5.80 | $1.67 | $6.52 | |||||||
Diluted EPS from continuing operations | $0.85 | $0.81 | $5.79 | $1.67 | $6.49 | |||||||
Diluted EPS from discontinued operations | $- | $- | $- | $- | $0.01 | |||||||
Total Diluted EPS | $0.85 | $0.81 | $5.79 | $1.67 | $6.50 | |||||||
Average common shares outstanding | 103,245,717 | 103,188,815 | 102,859,591 | 103,217,266 | 102,899,537 | |||||||
Average common shares outstanding - assuming dilution | 103,343,486 | 103,269,813 | 103,102,718 | 103,297,707 | 103,113,280 | |||||||
Common shares outstanding at end of period | 103,703,041 | 103,670,005 | 103,503,014 | 103,703,041 | 103,503,014 | |||||||
Market value per common share | $29.30 | $28.61 | $28.86 | $29.30 | $28.86 | |||||||
Market capitalization - (In millions) | $3,038 | $2,966 | $2,987 | $3,038 | $2,987 | |||||||
Return on average assets | 0.96% | 0.95% | 6.74% | 0.96% | 3.91% | |||||||
. | . | |||||||||||
Return on average common equity | 6.80% | 6.58% | 54.93% | 6.69% | 31.34% | |||||||
Net interest margin [1] | 4.31% | 4.43% | 4.54% | 4.37% | 4.56% | |||||||
Common equity per share | $51.20 | $50.16 | $47.34 | $51.20 | $47.34 | |||||||
Tangible common book value per common share (non-GAAP) | $44.62 | $43.55 | $41.73 | $44.62 | $41.73 | |||||||
Tangible common equity to tangible assets (non-GAAP) | 12.53% | 12.73% | 11.94% | 12.53% | 11.94% | |||||||
Tier 1 capital | 16.29% | 15.79% | 15.93% | 16.29% | 15.93% | |||||||
Total capital | 19.29% | 18.78% | 18.50% | 19.29% | 18.50% | |||||||
Tier 1 leverage | 11.29% | 11.46% | 11.59% | 11.29% | 11.59% | |||||||
Common Equity Tier 1 capital | 16.29% | 15.79% | 15.93% | 16.29% | 15.93% | |||||||
[1] Not on a taxable equivalent basis. For the quarter ended June 30, 2016 excludes the impact of the WB loans bulk sale. Refer to Table D for reconciliation. |
POPULAR, INC. | |||||||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | |||||||||||||||||
Table B - Consolidated Statement of Operations | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Quarters ended | Variance | Quarter ended | Variance | Six months ended | |||||||||||||
(In thousands, except per share information) | 30-Jun-16 | 31-Mar-16 |
Q2 2016 vs. Q1 2016 |
30-Jun-15 |
Q2 2016 vs. Q2 2015 |
30-Jun-16 | 30-Jun-15 | ||||||||||
Interest income: | |||||||||||||||||
Loans | $369,721 | $363,197 | $6,524 | $374,133 | $(4,412) | $732,918 | $729,764 | ||||||||||
Money market investments | 3,889 | 2,863 | 1,026 | 1,845 | 2,044 | 6,752 | 3,291 | ||||||||||
Investment securities | 36,725 | 36,271 | 454 | 31,297 | 5,428 | 72,996 | 61,598 | ||||||||||
Trading account securities | 1,875 | 1,689 | 186 | 3,026 | (1,151) | 3,564 | 5,722 | ||||||||||
Total interest income | 412,210 | 404,020 | 8,190 | 410,301 | 1,909 | 816,230 | 800,375 | ||||||||||
Interest expense: | |||||||||||||||||
Deposits | 30,599 | 29,874 | 725 | 26,258 | 4,341 | 60,473 | 52,122 | ||||||||||
Short-term borrowings | 2,058 | 1,861 | 197 | 1,863 | 195 | 3,919 | 3,597 | ||||||||||
Long-term debt | 19,002 | 19,873 | (871) | 19,627 | (625) | 38,875 | 38,908 | ||||||||||
Total interest expense | 51,659 | 51,608 | 51 | 47,748 | 3,911 | 103,267 | 94,627 | ||||||||||
Net interest income | 360,551 | 352,412 | 8,139 | 362,553 | (2,002) | 712,963 | 705,748 | ||||||||||
Provision for loan losses - non-covered loans | 39,668 | 47,940 | (8,272) | 60,468 | (20,800) | 87,608 | 90,179 | ||||||||||
Provision (reversal) for loan losses - covered loans | 804 | (3,105) | 3,909 | 15,766 | (14,962) | (2,301) | 26,090 | ||||||||||
Net interest income after provision for loan losses | 320,079 | 307,577 | 12,502 | 286,319 | 33,760 | 627,656 | 589,479 | ||||||||||
Service charges on deposit accounts | 40,296 | 39,862 | 434 | 40,138 | 158 | 80,158 | 79,155 | ||||||||||
Other service fees | 56,945 | 53,382 | 3,563 | 59,421 | (2,476) | 110,327 | 113,047 | ||||||||||
Mortgage banking activities | 16,227 | 10,551 | 5,676 | 21,325 | (5,098) | 26,778 | 34,177 | ||||||||||
Net gain and valuation adjustments on investment securities | 1,583 | - | 1,583 | 5 | 1,578 | 1,583 | 5 | ||||||||||
Other-than-temporary impairment losses on investment securities | (209) | - | (209) | (14,445) | 14,236 | (209) | (14,445) | ||||||||||
Trading account profit (loss) | 1,117 | (162) | 1,279 | (3,108) | 4,225 | 955 | (2,694) | ||||||||||
Net (loss) gain on sale of loans, including valuation adjustments on loans held-for-sale | - | (304) | 304 | 681 | (681) | (304) | 602 | ||||||||||
Adjustments (expense) to indemnity reserves on loans sold | (5,746) | (4,098) | (1,648) | 419 | (6,165) | (9,844) | (4,107) | ||||||||||
FDIC loss-share (expense) income | (12,576) | (3,146) | (9,430) | 19,075 | (31,651) | (15,722) | 23,214 | ||||||||||
Other operating income | 12,866 | 15,545 | (2,679) | 17,248 | (4,382) | 28,411 | 27,040 | ||||||||||
Total non-interest income | 110,503 | 111,630 | (1,127) | 140,759 | (30,256) | 222,133 | 255,994 | ||||||||||
Operating expenses: | |||||||||||||||||
Personnel costs | |||||||||||||||||
Salaries | 75,792 | 77,298 | (1,506) | 76,453 | (661) | 153,090 | 148,847 | ||||||||||
Commissions, incentives and other bonuses | 16,982 | 20,769 | (3,787) | 24,214 | (7,232) | 37,751 | 42,672 | ||||||||||
Pension, postretirement and medical insurance | 12,279 | 13,111 | (832) | 9,075 | 3,204 | 25,390 | 21,088 | ||||||||||
Other personnel costs, including payroll taxes | 11,655 | 15,913 | (4,258) | 11,235 | 420 | 27,568 | 24,828 | ||||||||||
Total personnel costs | 116,708 | 127,091 | (10,383) | 120,977 | (4,269) | 243,799 | 237,435 | ||||||||||
Net occupancy expenses | 21,714 | 20,430 | 1,284 | 23,286 | (1,572) | 42,144 | 44,995 | ||||||||||
Equipment expenses | 15,261 | 14,548 | 713 | 15,925 | (664) | 29,809 | 29,336 | ||||||||||
Other taxes | 10,170 | 10,195 | (25) | 11,113 | (943) | 20,365 | 19,687 | ||||||||||
Professional fees | 80,625 | 75,459 | 5,166 | 78,449 | 2,176 | 156,084 | 153,977 | ||||||||||
Communications | 6,012 | 6,320 | (308) | 6,153 | (141) | 12,332 | 12,329 | ||||||||||
Business promotion | 13,705 | 11,110 | 2,595 | 13,776 | (71) | 24,815 | 24,589 | ||||||||||
FDIC deposit insurance | 5,362 | 7,370 | (2,008) | 8,542 | (3,180) | 12,732 | 14,940 | ||||||||||
Other real estate owned (OREO) expenses | 12,980 | 9,141 | 3,839 | 44,816 | (31,836) | 22,121 | 67,885 | ||||||||||
Credit and debit card processing, volume, interchange and other expenses | 6,617 | 5,722 | 895 | 5,762 | 855 | 12,339 | 10,583 | ||||||||||
Other operating expenses | 16,898 | 11,443 | 5,455 | 25,320 | (8,422) | 28,341 | 37,847 | ||||||||||
Amortization of intangibles | 3,097 | 3,114 | (17) | 2,881 | 216 | 6,211 | 4,985 | ||||||||||
Restructuring costs | - | - | - | 6,174 | (6,174) | - | 16,927 | ||||||||||
Total operating expenses | 309,149 | 301,943 | 7,206 | 363,174 | (54,025) | 611,092 | 675,515 | ||||||||||
Income from continuing operations before income tax | 121,433 | 117,264 | 4,169 | 63,904 | 57,529 | 238,697 | 169,958 | ||||||||||
Income tax expense (benefit) | 32,446 | 32,265 | 181 | (533,533) | 565,979 | 64,711 | (500,964) | ||||||||||
Income from continuing operations | 88,987 | 84,999 | 3,988 | 597,437 | (508,450) | 173,986 | 670,922 | ||||||||||
Income from discontinued operations, net of tax | - | - | - | 15 | (15) | - | 1,356 | ||||||||||
Net income | $88,987 | $84,999 | $3,988 | $597,452 | $(508,465) | $173,986 | $672,278 | ||||||||||
Net income applicable to common stock | $88,056 | $84,068 | $3,988 | $596,521 | $(508,465) | $172,124 | $670,417 | ||||||||||
Net income per common share - basic: | |||||||||||||||||
Net income from continuing operations | $0.85 | $0.81 | $0.04 | $5.80 | $(4.95) | $1.67 | $6.51 | ||||||||||
Net income from discontinued operations | - | - | - | - | - | - | 0.01 | ||||||||||
Net income per common share - basic | $0.85 | $0.81 | $0.04 | $5.80 | $(4.95) | $1.67 | $6.52 | ||||||||||
Net income per common share - diluted: | |||||||||||||||||
Net income from continuing operations | $0.85 | $0.81 | $0.04 | $5.79 | $(4.94) | $1.67 | $6.49 | ||||||||||
Net income from discontinued operations | - | - | - | - | - | - | 0.01 | ||||||||||
Net income per common share - diluted | $0.85 | $0.81 | $0.04 | $5.79 | $(4.94) | $1.67 | $6.50 | ||||||||||
Dividends Declared per Common Share | $0.15 | $0.15 | $- | $- | $0.15 | $0.30 | $- |
Popular, Inc. | ||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | ||||||||||||
Table C - Consolidated Statement of Financial Condition | ||||||||||||
(Unaudited) | ||||||||||||
Variance | ||||||||||||
Q2 2016 vs. | ||||||||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | Q1 2016 | ||||||||
Assets: | ||||||||||||
Cash and due from banks | $365,308 | $409,623 | $557,248 | $(44,315) | ||||||||
Money market investments | 2,785,500 | 1,917,460 | 3,254,939 | 868,040 | ||||||||
Trading account securities, at fair value | 72,530 | 71,284 | 141,595 | 1,246 | ||||||||
Investment securities available-for-sale, at fair value | 7,242,676 | 6,649,830 | 5,585,078 | 592,846 | ||||||||
Investment securities held-to-maturity, at amortized cost | 99,525 | 99,216 | 101,861 | 309 | ||||||||
Other investment securities, at lower of cost or realizable value | 168,563 | 164,024 | 165,505 | 4,539 | ||||||||
Loans held-for-sale, at lower of cost or fair value | 122,338 | 125,315 | 202,287 | (2,977) | ||||||||
Loans held-in-portfolio: | ||||||||||||
Loans not covered under loss-sharing agreements with the FDIC | 22,655,877 | 22,618,488 | 22,535,008 | 37,389 | ||||||||
Loans covered under loss-sharing agreements with the FDIC | 607,170 | 625,130 | 689,650 | (17,960) | ||||||||
Less: Unearned income | 115,216 | 110,751 | 99,863 | 4,465 | ||||||||
Allowance for loan losses | 548,720 | 538,472 | 550,813 | 10,248 | ||||||||
Total loans held-in-portfolio, net | 22,599,111 | 22,594,395 | 22,573,982 | 4,716 | ||||||||
FDIC loss-share asset | 214,029 | 219,448 | 392,947 | (5,419) | ||||||||
Premises and equipment, net | 535,865 | 527,493 | 497,078 | 8,372 | ||||||||
Other real estate not covered under loss-sharing agreements with the FDIC | 177,025 | 165,960 | 142,255 | 11,065 | ||||||||
Other real estate covered under loss-sharing agreements with the FDIC | 37,984 | 36,397 | 33,504 | 1,587 | ||||||||
Accrued income receivable | 120,979 | 120,308 | 130,281 | 671 | ||||||||
Mortgage servicing assets, at fair value | 203,577 | 205,051 | 206,357 | (1,474) | ||||||||
Other assets | 2,179,060 | 2,156,030 | 2,176,044 | 23,030 | ||||||||
Goodwill | 631,095 | 631,095 | 505,435 | - | ||||||||
Other intangible assets | 50,983 | 54,080 | 74,854 | (3,097) | ||||||||
Total assets | $37,606,148 | $36,147,009 | $36,741,250 | $1,459,139 | ||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||
Liabilities: | ||||||||||||
Deposits: | ||||||||||||
Non-interest bearing | $6,531,108 | $6,384,093 | $6,305,986 | $147,015 | ||||||||
Interest bearing | 22,206,748 | 21,142,500 | 21,444,708 | 1,064,248 | ||||||||
Total deposits | 28,737,856 | 27,526,593 | 27,750,694 | 1,211,263 | ||||||||
Federal funds purchased and assets sold under agreements to repurchase | 821,604 | 760,154 | 1,121,244 | 61,450 | ||||||||
Other short-term borrowings | 31,200 | 6,370 | 101,200 | 24,830 | ||||||||
Notes payable | 1,575,948 | 1,583,468 | 1,795,165 | (7,520) | ||||||||
Other liabilities | 1,077,894 | 1,018,309 | 1,021,540 | 59,585 | ||||||||
Liabilities from discontinued operations | 1,815 | 1,815 | 1,754 | - | ||||||||
Total liabilities | 32,246,317 | 30,896,709 | 31,791,597 | 1,349,608 | ||||||||
Stockholders’ equity: | ||||||||||||
Preferred stock | 50,160 | 50,160 | 50,160 | - | ||||||||
Common stock | 1,039 | 1,039 | 1,037 | - | ||||||||
Surplus | 4,232,835 | 4,231,233 | 4,199,165 | 1,602 | ||||||||
Retained earnings | 1,228,979 | 1,156,476 | 924,134 | 72,503 | ||||||||
Treasury stock | (7,570) | (6,858) | (5,812) | (712) | ||||||||
Accumulated other comprehensive loss | (145,612) | (181,750) | (219,031) | 36,138 | ||||||||
Total stockholders’ equity | 5,359,831 | 5,250,300 | 4,949,653 | 109,531 | ||||||||
Total liabilities and stockholders’ equity | $37,606,148 | $36,147,009 | $36,741,250 | $1,459,139 |
Popular, Inc. | ||||||||||||||||||||||||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | ||||||||||||||||||||||||||||||||||
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER | ||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||
Quarter ended | Quarter ended | Quarter ended | Variance | Variance | ||||||||||||||||||||||||||||||
30-Jun-16 | 31-Mar-16 | 30-Jun-15 | Q2 2016 vs. Q1 2016 | Q2 2016 vs. Q2 2015 | ||||||||||||||||||||||||||||||
($ amounts in millions; yields not on a taxable equivalent basis) | Average balance |
Income / Expense |
Yield / Rate |
Average balance |
Income / Expense |
Yield / Rate |
Average balance |
Income / Expense |
Yield / Rate |
Average balance |
Income / Expense |
Yield / Rate |
Average balance |
Income / Expense |
Yield / Rate |
|||||||||||||||||||
Assets: |
|
|||||||||||||||||||||||||||||||||
Interest earning assets: | ||||||||||||||||||||||||||||||||||
Money market, trading and investment securities | $10,286 | $42.5 | 1.65 | % | $8,951 | $40.8 | 1.83 | % | $8,575 | $36.2 | 1.69 | % | $1,335 | $1.7 | (0.18) | % | $1,711 | $6.3 | (0.04) | % | ||||||||||||||
Loans not covered under loss-sharing agreements with the FDIC: | ||||||||||||||||||||||||||||||||||
Commercial | 9,150 | 110.9 | 4.88 | 8,957 | 110.6 | 4.97 | 8,776 | 108.0 | 4.93 | 193 | 0.3 | (0.09) | 374 | 2.9 | (0.05) | |||||||||||||||||||
Construction | 723 | 9.7 | 5.43 | 704 | 9.3 | 5.30 | 682 | 10.2 | 6.02 | 19 | 0.4 | 0.13 | 41 | (0.5) | (0.59) | |||||||||||||||||||
Mortgage | 6,743 | 88.9 | 5.27 | 6,830 | 89.7 | 5.25 | 7,175 | 93.4 | 5.21 | (87) | (0.8) | 0.02 | (432) | (4.5) | 0.06 | |||||||||||||||||||
Consumer | 3,865 | 99.4 | 10.34 | 3,807 | 98.0 | 10.35 | 3,823 | 97.1 | 10.19 | 58 | 1.4 | (0.01) | 42 | 2.3 | 0.15 | |||||||||||||||||||
Lease financing | 651 | 11.0 | 6.73 | 630 | 10.7 | 6.78 | 583 | 10.1 | 6.93 | 21 | 0.3 | (0.05) | 68 | 0.9 | (0.20) | |||||||||||||||||||
Total loans (excluding WB loans) | 21,132 | 319.9 | 6.08 | 20,928 | 318.3 | 6.11 | 21,039 | 318.8 | 6.07 | 204 | 1.6 | (0.03) | 93 | 1.1 | 0.01 | |||||||||||||||||||
WB loans[1] | 2,013 | 47.7 | 9.53 | 2,058 | 44.9 | 8.76 | 2,350 | 55.3 | 9.44 | (45) | 2.8 | 0.77 | (337) | (7.6) | 0.09 | |||||||||||||||||||
Total loans | 23,145 | 367.6 | 6.38 | 22,986 | 363.2 | 6.34 | 23,389 | 374.1 | 6.41 | 159 | 4.4 | 0.04 | (244) | (6.5) | (0.03) | |||||||||||||||||||
Total interest earning assets | 33,431 | $410.1 | 4.93 | % | 31,937 | $404.0 | 5.08 | % | 31,964 | $410.3 | 5.14 | % | 1,494 | $6.1 | (0.15) | % | 1,467 | ($0.2) | (0.21) | % | ||||||||||||||
Allowance for loan losses | (539) | (536) | (599) | (3) | 60 | |||||||||||||||||||||||||||||
Other non-interest earning assets | 4,479 | 4,491 | 4,212 | (12) | 267 | |||||||||||||||||||||||||||||
Total average assets | $37,371 | $35,892 | $35,577 | $1,479 | $1,794 | |||||||||||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||||||||||||||
NOW and money market | $7,023 | $6.6 | 0.38 | % | $5,712 | $5.6 | 0.39 | % | $5,507 | $4.9 | 0.36 | % | $1,311 | $1.0 | (0.01) | % | $1,516 | $1.7 | 0.02 | % | ||||||||||||||
Savings | 7,487 | 4.4 | 0.24 | 7,275 | 4.3 | 0.23 | 7,040 | 4.1 | 0.23 | 212 | 0.1 | 0.01 | 447 | 0.3 | 0.01 | |||||||||||||||||||
Time deposits | 7,866 | 19.6 | 1.00 | 8,058 | 20.0 | 1.00 | 8,530 | 17.2 | 0.81 | (192) | (0.4) | - | (664) | 2.4 | 0.19 | |||||||||||||||||||
Total interest bearing deposits | 22,376 | 30.6 | 0.55 | 21,045 | 29.9 | 0.57 | 21,077 | 26.2 | 0.50 | 1,331 | 0.7 | (0.02) | 1,299 | 4.4 | 0.05 | |||||||||||||||||||
Borrowings | 2,307 | 21.0 | 3.67 | 2,441 | 21.7 | 3.58 | 2,855 | 21.5 | 3.01 | (134) | (0.7) | 0.09 | (548) | (0.5) | 0.66 | |||||||||||||||||||
Total interest bearing liabilities | 24,683 | 51.6 | 0.84 | 23,486 | 51.6 | 0.88 | 23,932 | 47.7 | 0.80 | 1,197 | - | (0.04) | 751 | 3.9 | 0.04 | |||||||||||||||||||
Net interest spread | 4.09 | % | 4.20 | % | 4.34 | % | (0.11) | % | (0.25) | % | ||||||||||||||||||||||||
Non-interest bearing deposits | 6,481 | 6,293 | 6,247 | 188 | 234 | |||||||||||||||||||||||||||||
Other liabilities | 943 | 920 | 991 | 23 | (48) | |||||||||||||||||||||||||||||
Liabilities from discontinued operations | 2 | 2 | 2 | - | - | |||||||||||||||||||||||||||||
Stockholders' equity | 5,262 | 5,191 | 4,405 | 71 | 857 | |||||||||||||||||||||||||||||
Total average liabilities and stockholders' equity | $37,371 | $35,892 | $35,577 | $1,479 | $1,794 | |||||||||||||||||||||||||||||
Adjusted net interest income / margin non-taxable equivalent basis | $358.5 | 4.31 | % | $352.4 | 4.43 | % | $362.6 | 4.54 | % | $6.1 | (0.12) | % | ($4.1) | (0.23) | % | |||||||||||||||||||
Impact of WB loan and OREO bulk sale | 2.1 | - | - | 2.1 | 2.1 | |||||||||||||||||||||||||||||
Net interest income / margin non-taxable equivalent basis | $360.6 | 4.33 | % | $352.4 | 4.43 | % | $362.6 | 4.54 | % | $8.2 | (0.10) | % | ($2.0) | (0.21) | % | |||||||||||||||||||
[1] Including the impact of the WB loans bulk sale, the yield for WB loans would have been 9.94%. | ||||||||||||||||||||||||||||||||||
Popular, Inc. | ||||||||||||||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | ||||||||||||||||||||||||
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Six months ended | Six months ended | |||||||||||||||||||||||
30-Jun-16 | 30-Jun-15 | Variance | ||||||||||||||||||||||
Average | Income / | Yield / | Average | Income / | Yield / | Average | Income / | Yield / | ||||||||||||||||
($ amounts in millions; yields not on a taxable equivalent basis) | balance | Expense | Rate | balance | Expense | Rate | balance | Expense | Rate | |||||||||||||||
Assets: | ||||||||||||||||||||||||
Interest earning assets: | ||||||||||||||||||||||||
Money market, trading and investment securities | $9,619 | $83.3 | 1.73 | % | $8,173 | $70.6 | 1.73 | % | $1,446 | $12.7 | - | % | ||||||||||||
Loans not covered under loss-sharing agreements with the FDIC: | ||||||||||||||||||||||||
Commercial | 9,054 | 221.6 | 4.92 | 8,581 | 208.8 | 4.91 | 473 | 12.8 | 0.01 | |||||||||||||||
Construction | 713 | 19.0 | 5.37 | 559 | 16.3 | 5.89 | 154 | 2.7 | (0.52) | |||||||||||||||
Mortgage | 6,786 | 178.6 | 5.26 | 6,955 | 179.3 | 5.15 | (169) | (0.7) | 0.11 | |||||||||||||||
Consumer | 3,836 | 197.4 | 10.35 | 3,834 | 192.5 | 10.13 | 2 | 4.9 | 0.22 | |||||||||||||||
Lease financing | 641 | 21.6 | 6.75 | 576 | 20.0 | 6.97 | 65 | 1.6 | (0.22) | |||||||||||||||
Total loans (excluding WB loans) | 21,030 | 638.2 | 6.09 | 20,505 | 616.9 | 6.05 | 525 | 21.3 | 0.04 | |||||||||||||||
WB loans[1] | 2,035 | 92.7 | 9.14 | 2,445 | 112.8 | 9.29 | (410) | (20.1) | (0.15) | |||||||||||||||
Total loans | 23,065 | 730.9 | 6.36 | 22,950 | 729.7 | 6.40 | 115 | 1.2 | (0.04) | |||||||||||||||
Total interest earning assets | 32,684 | $814.2 | 5.00 | % | 31,123 | $800.3 | 5.17 | % | 1,561 | $13.9 | (0.17) | % | ||||||||||||
Allowance for loan losses | (538) | (604) | 66 | |||||||||||||||||||||
Other non-interest earning assets | 4,484 | 4,177 | 307 | |||||||||||||||||||||
Total average assets | $36,630 | $34,696 | $1,934 | |||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||||
NOW and money market | $6,367 | $12.2 | 0.39 | % | $5,246 | $9.1 | 0.35 | % | $1,121 | $3.1 | 0.04 | % | ||||||||||||
Savings | 7,381 | 8.7 | 0.24 | 6,966 | 8.0 | 0.23 | 415 | 0.7 | 0.01 | |||||||||||||||
Time deposits | 7,962 | 39.6 | 1.00 | 8,141 | 35.0 | 0.87 | (179) | 4.6 | 0.13 | |||||||||||||||
Total interest bearing deposits | 21,710 | 60.5 | 0.56 | 20,353 | 52.1 | 0.52 | 1,357 | 8.4 | 0.04 | |||||||||||||||
Borrowings | 2,374 | 42.8 | 3.61 | 2,866 | 42.5 | 2.97 | (492) | 0.3 | 0.64 | |||||||||||||||
Total interest bearing liabilities | 24,084 | 103.3 | 0.86 | 23,219 | 94.6 | 0.82 | 865 | 8.7 | 0.04 | |||||||||||||||
Net interest spread | 4.14 | % | 4.35 | % | (0.21) | % | ||||||||||||||||||
Non-interest bearing deposits | 6,387 | 6,106 | 281 | |||||||||||||||||||||
Other liabilities | 930 | 1,006 | (76) | |||||||||||||||||||||
Liabilities from discontinued operations | 2 | 2 | - | |||||||||||||||||||||
Stockholders' equity | 5,227 | 4,363 | 864 | |||||||||||||||||||||
Total average liabilities and stockholders' equity | $36,630 | $34,696 | $1,934 | |||||||||||||||||||||
Adjusted net interest income / margin non-taxable equivalent basis | $710.9 | 4.37 | % | $705.7 | 4.56 | % | $5.2 | (0.19) | % | |||||||||||||||
Impact of WB loan and OREO bulk sale | 2.1 | - | 2.1 | |||||||||||||||||||||
Net interest income / margin non-taxable equivalent basis | $713.0 | 4.38 | % | $705.7 | 4.56 | % | $7.3 | (0.18) | % | |||||||||||||||
[1] Including the impact of the WB loans bulk sale, the yield for WB loans would have been 9.34%. |
Popular, Inc. | |||||||||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | |||||||||||||||||||
Table F - Mortgage Banking Activities and Other Service Fees | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Mortgage Banking Activities | Variance | ||||||||||||||||||
Quarters ended | Q2 2016 vs. | Q2 2016 vs. | Six months ended | Variance | |||||||||||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | Q1 2016 | Q2 2015 | 30-Jun-16 | 30-Jun-15 | 2016 vs. 2015 | |||||||||||
Mortgage servicing fees, net of fair value adjustments: | |||||||||||||||||||
Mortgage servicing fees | $14,675 | $14,802 | $14,689 | $(127) | $(14) | $29,477 | $26,937 | $2,540 | |||||||||||
Mortgage servicing rights fair value adjustments | (4,340) | (8,477) | (1,917) | 4,137 | (2,423) | (12,817) | (6,846) | (5,971) | |||||||||||
Total mortgage servicing fees, net of fair value adjustments | 10,335 | 6,325 | 12,772 | 4,010 | (2,437) | 16,660 | 20,091 | (3,431) | |||||||||||
Net gain on sale of loans, including valuation on loans held-for-sale | 8,474 | 7,110 | 8,022 | 1,364 | 452 | 15,584 | 15,302 | 282 | |||||||||||
Trading account (loss) profit: | |||||||||||||||||||
Unrealized (losses) gains on outstanding derivative positions | (59) | (80) | 42 | 21 | (101) | (139) | 59 | (198) | |||||||||||
Realized (losses) gains on closed derivative positions | (2,523) | (2,804) | 489 | 281 | (3,012) | (5,327) | (1,275) | (4,052) | |||||||||||
Total trading account (loss) profit | (2,582) | (2,884) | 531 | 302 | (3,113) | (5,466) | (1,216) | (4,250) | |||||||||||
Total mortgage banking activities | $16,227 | $10,551 | $21,325 | $5,676 | $(5,098) | $26,778 | $34,177 | $(7,399) | |||||||||||
Other Service Fees | Variance | ||||||||||||||||||
Quarters ended | Q2 2016 vs. | Q2 2016 vs. | Six months ended | Variance | |||||||||||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | Q1 2016 | Q2 2015 | 30-Jun-16 | 30-Jun-15 | 2016 vs. 2015 | |||||||||||
Other service fees: | |||||||||||||||||||
Debit card fees | $11,382 | $11,287 | $11,995 | $95 | $(613) | $22,669 | $23,120 | $(451) | |||||||||||
Insurance fees | 13,885 | 12,850 | 13,606 | 1,035 | 279 | 26,735 | 25,647 | 1,088 | |||||||||||
Credit card fees | 17,700 | 16,858 | 17,611 | 842 | 89 | 34,558 | 33,760 | 798 | |||||||||||
Sale and administration of investment products | 5,417 | 4,839 | 6,601 | 578 | (1,184) | 10,256 | 12,531 | (2,275) | |||||||||||
Trust fees | 4,827 | 4,235 | 4,914 | 592 | (87) | 9,063 | 9,516 | (453) | |||||||||||
Other fees | 3,734 | 3,313 | 4,694 | 421 | (960) | 7,046 | 8,473 | (1,427) | |||||||||||
Total other service fees | $56,945 | $53,382 | $59,421 | $3,563 | $(2,476) | $110,327 | $113,047 | $(2,720) | |||||||||||
Popular, Inc. | ||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | ||||||||||||
Table G - Loans and Deposits | ||||||||||||
(Unaudited) | ||||||||||||
Loans - Ending Balances | ||||||||||||
Variance | ||||||||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | Q2 2016 vs. Q1 2016 | Q2 2016 vs. Q2 2015 | |||||||
Loans not covered under FDIC loss-sharing agreements: | ||||||||||||
Commercial | $10,359,815 | $10,228,389 | $10,004,716 | $131,426 | $355,099 | |||||||
Construction | 717,332 | 734,858 | 696,010 | (17,526) | 21,322 | |||||||
Legacy [1] | 49,709 | 61,044 | 72,502 | (11,335) | (22,793) | |||||||
Lease financing | 664,094 | 643,142 | 592,816 | 20,952 | 71,278 | |||||||
Mortgage | 6,864,118 | 6,979,201 | 7,225,823 | (115,083) | (361,705) | |||||||
Consumer | 3,885,593 | 3,861,103 | 3,843,278 | 24,490 | 42,315 | |||||||
Total non-covered loans held-in-portfolio | $22,540,661 | $22,507,737 | $22,435,145 | $32,924 | $105,516 | |||||||
Loans covered under FDIC loss-sharing agreements | 607,170 | 625,130 | 689,650 | (17,960) | (82,480) | |||||||
Total loans held-in-portfolio | $23,147,831 | $23,132,867 | $23,124,795 | $14,964 | $23,036 | |||||||
Loans held-for-sale: | ||||||||||||
Commercial | $39,544 | $42,771 | $48,969 | $(3,227) | $(9,425) | |||||||
Construction | - | 2 | 1,681 | (2) | (1,681) | |||||||
Mortgage | 82,794 | 82,542 | 151,637 | 252 | (68,843) | |||||||
Total loans held-for-sale | $122,338 | $125,315 | $202,287 | $(2,977) | $(79,949) | |||||||
Total loans | $23,270,169 | $23,258,182 | $23,327,082 | $11,987 | $(56,913) | |||||||
[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-16 | 31-Mar-16 | 30-Jun-15 | Q2 2016 vs. Q1 2016 | Q2 2016 vs.Q2 2015 | |||||||
Demand deposits [1] | $8,106,291 | $7,324,982 | $7,262,176 | $781,309 | $844,115 | |||||||
Savings, NOW and money market deposits (non-brokered) | 12,289,793 | 11,940,103 | 11,177,288 | 349,690 | 1,112,505 | |||||||
Savings, NOW and money market deposits (brokered) | 387,026 | 383,745 | 468,973 | 3,281 | (81,947) | |||||||
Time deposits (non-brokered) | 7,570,673 | 7,348,132 | 7,367,256 | 222,541 | 203,417 | |||||||
Time deposits (brokered CDs) | 384,073 | 529,631 | 1,475,001 | (145,558) | (1,090,928) | |||||||
Total deposits | $28,737,856 | $27,526,593 | $27,750,694 | $1,211,263 | $987,162 | |||||||
[1] Includes interest and non-interest bearing demand deposits. |
Popular, Inc. | |||||||||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | |||||||||||||||||||
Table H - Non-Performing Assets | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Variance | |||||||||||||||||||
(Dollars in thousands) | 30-Jun-16 |
As a % of loans HIP by category |
31-Mar-16 |
As a % of loans HIP by category |
30-Jun-15 |
As a % of loans HIP by category |
Q2 2016 vs. Q1 2016 | Q2 2016 vs. Q2 2015 | |||||||||||
Non-accrual loans: | |||||||||||||||||||
Commercial | $175,615 | 1.7 | % | $197,631 | 1.9 | % | $190,294 | 1.9 | % | $(22,016) | $(14,679) | ||||||||
Construction | 2,523 | 0.4 | 3,941 | 0.5 | 5,427 | 0.8 | (1,418) | (2,904) | |||||||||||
Legacy [1] | 3,839 | 7.7 | 4,046 | 6.6 | 4,686 | 6.5 | (207) | (847) | |||||||||||
Lease financing | 3,019 | 0.5 | 3,419 | 0.5 | 2,328 | 0.4 | (400) | 691 | |||||||||||
Mortgage | 338,048 | 4.9 | 334,907 | 4.8 | 330,821 | 4.6 | 3,141 | 7,227 | |||||||||||
Consumer | 54,695 | 1.4 | 55,582 | 1.4 | 42,441 | 1.1 | (887) | 12,254 | |||||||||||
Total non-performing loans held-in- portfolio, excluding covered loans |
577,739 | 2.6 | % | 599,526 | 2.7 | % | 575,997 | 2.6 | % | (21,787) | 1,742 | ||||||||
Non-performing loans held-for-sale [2] | 39,544 | 42,743 | 50,875 | (3,199) | (11,331) | ||||||||||||||
Other real estate owned (“OREO”), excluding covered OREO |
177,025 | 165,960 | 142,255 | 11,065 | 34,770 | ||||||||||||||
Total non-performing assets, excluding covered assets |
794,308 | 808,229 | 769,127 | (13,921) | 25,181 | ||||||||||||||
Covered loans and OREO | 41,466 | 39,916 | 37,367 | 1,550 | 4,099 | ||||||||||||||
Total non-performing assets | $835,774 | $848,145 | $806,494 | $(12,371) | $29,280 | ||||||||||||||
Accruing loans past due 90 days or more [3] | $413,319 | $426,437 | $435,775 | $(13,118) | $(22,456) | ||||||||||||||
Ratios excluding covered loans: | |||||||||||||||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio |
2.56 | % | 2.66 | % | 2.57 | % | |||||||||||||
Allowance for loan losses to loans held-in-portfolio |
2.30 | 2.26 | 2.29 | ||||||||||||||||
Allowance for loan losses to | |||||||||||||||||||
non-performing loans, excluding loans held-for-sale |
89.68 | 84.80 | 89.02 | ||||||||||||||||
Ratios including covered loans: | |||||||||||||||||||
Non-performing assets to total assets | 2.22 | % | 2.35 | % | 2.20 | % | |||||||||||||
Non-performing loans held-in-portfolio to loans held-in-portfolio |
2.51 | 2.61 | 2.51 | ||||||||||||||||
Allowance for loan losses to loans held-in-portfolio |
2.37 | 2.33 | 2.38 | ||||||||||||||||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale |
94.41 | 89.29 | 94.99 | ||||||||||||||||
[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, 2016 consisted of $40 million in commercial loans (March 31, 2016 - $42.7 million in commercial loans and $2 thousand in construction loans; June 30, 2015 - $49 million in commercial loans, $2 million in construction loans and $225 thousand in mortgage 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 $149 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of June 30, 2016 (March 31, 2016 - $161 million; June 30, 2015 - $133 million). Furthermore, the Corporation has approximately $63 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, 2016 - $68 million; June 30, 2015 - $72 million). | |||||||||||||||||||
Popular, Inc. | |||||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | |||||||||||||||
Table I - Activity in Non-Performing Loans | |||||||||||||||
(Unaudited) | |||||||||||||||
Commercial loans held-in-portfolio: | |||||||||||||||
Quarter ended | Quarter ended | ||||||||||||||
30-Jun-16 | 31-Mar-16 | ||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||||
Beginning balance NPLs | $182,639 | $14,992 | $197,631 | $177,902 | $3,914 | $181,816 | |||||||||
Plus: | |||||||||||||||
New non-performing loans | 26,029 | 2,254 | 28,283 | 21,657 | 15,064 | 36,721 | |||||||||
Advances on existing non-performing loans | - | 8 | 8 | - | 1 | 1 | |||||||||
Less: | |||||||||||||||
Non-performing loans transferred to OREO | (1,815) | - | (1,815) | (1,103) | - | (1,103) | |||||||||
Non-performing loans charged-off | (15,219) | (254) | (15,473) | (4,949) | (381) | (5,330) | |||||||||
Loans returned to accrual status / loan collections | (19,050) | (13,969) | (33,019) | (10,868) | (3,606) | (14,474) | |||||||||
Ending balance NPLs | $172,584 | $3,031 | $175,615 | $182,639 | $14,992 | $197,631 | |||||||||
Construction loans held-in-portfolio: | |||||||||||||||
Quarter ended | Quarter ended | ||||||||||||||
30-Jun-16 | 31-Mar-16 | ||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||||
Beginning balance NPLs | $3,270 | $671 | $3,941 | $3,550 | $- | $3,550 | |||||||||
Plus: | |||||||||||||||
New non-performing loans | 186 | - | 186 | 207 | 671 | 878 | |||||||||
Less: | |||||||||||||||
Non-performing loans transferred to OREO | - | - | - | (304) | - | (304) | |||||||||
Non-performing loans charged-off | (8) | - | (8) | (110) | - | (110) | |||||||||
Loans returned to accrual status / loan collections | (1,025) | (571) | (1,596) | (73) | - | (73) | |||||||||
Ending balance NPLs | $2,423 | $100 | $2,523 | $3,270 | $671 | $3,941 | |||||||||
Mortgage loans held-in-portfolio: | |||||||||||||||
Quarter ended | Quarter ended | ||||||||||||||
30-Jun-16 | 31-Mar-16 | ||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||||
Beginning balance NPLs | $322,838 | $12,069 | $334,907 | $337,933 | $13,538 | $351,471 | |||||||||
Plus: | |||||||||||||||
New non-performing loans | 79,688 | 6,532 | 86,220 | 78,679 | 6,920 | 85,599 | |||||||||
Less: | |||||||||||||||
Non-performing loans transferred to OREO | (12,521) | (445) | (12,966) | (9,226) | - | (9,226) | |||||||||
Non-performing loans charged-off | (10,648) | (130) | (10,778) | (10,889) | (276) | (11,165) | |||||||||
Loans returned to accrual status / loan collections | (55,699) | (3,636) | (59,335) | (73,659) | (8,113) | (81,772) | |||||||||
Ending balance NPLs | $323,658 | $14,390 | $338,048 | $322,838 | $12,069 | $334,907 |
Legacy loans held-in-portfolio: | |||||||||||||||
Quarter ended | Quarter ended | ||||||||||||||
30-Jun-16 | 31-Mar-16 | ||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||||
Beginning balance NPLs | $- | $4,046 | $4,046 | $- | $3,649 | $3,649 | |||||||||
Plus: | |||||||||||||||
New non-performing loans | - | 552 | 552 | - | 604 | 604 | |||||||||
Advances on existing non-performing loans | - | - | - | - | 2 | 2 | |||||||||
Less: | |||||||||||||||
Non-performing loans charged-off | - | (54) | (54) | - | - | - | |||||||||
Loans returned to accrual status / loan collections | - | (705) | (705) | - | (209) | (209) | |||||||||
Ending balance NPLs | $- | $3,839 | $3,839 | $- | $4,046 | $4,046 | |||||||||
Total non-performing loans held-in-portfolio (excluding consumer and covered loans): | |||||||||||||||
Quarter ended | Quarter ended | ||||||||||||||
30-Jun-16 | 31-Mar-16 | ||||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||||
Beginning balance NPLs | $508,747 | $31,778 | $540,525 | $519,385 | $21,101 | $540,486 | |||||||||
Plus: | |||||||||||||||
New non-performing loans | 105,903 | 9,338 | 115,241 | 100,543 | 23,259 | 123,802 | |||||||||
Advances on existing non-performing loans | - | 8 | 8 | - | 3 | 3 | |||||||||
Less: | |||||||||||||||
Non-performing loans transferred to OREO | (14,336) | (445) | (14,781) | (10,633) | - | (10,633) | |||||||||
Non-performing loans charged-off | (25,875) | (438) | (26,313) | (15,948) | (657) | (16,605) | |||||||||
Loans returned to accrual status / loan collections | (75,774) | (18,881) | (94,655) | (84,600) | (11,928) | (96,528) | |||||||||
Ending balance NPLs | $498,665 | $21,360 | $520,025 | $508,747 | $31,778 | $540,525 | |||||||||
Popular, Inc. | ||||||||||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | ||||||||||||||||||||
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Quarter ended | Quarter ended | Quarter ended | ||||||||||||||||||
30-Jun-16 | 31-Mar-16 | 30-Jun-15 | ||||||||||||||||||
(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 | $508,427 | $30,045 | $538,472 | $502,935 | $34,176 | $537,111 | $516,224 | $72,473 | $588,697 | |||||||||||
Provision (reversal of provision) for loan losses | 39,668 | 804 | 40,472 | 47,940 | (3,105) | 44,835 | 60,468 | 15,766 | 76,234 | |||||||||||
548,095 | 30,849 | 578,944 | 550,875 | 31,071 | 581,946 | 576,692 | 88,239 | 664,931 | ||||||||||||
Net loans charged-off (recovered): | ||||||||||||||||||||
BPPR | ||||||||||||||||||||
Commercial | 5,647 | - | 5,647 | 2,704 | - | 2,704 | 17,059 | 19,833 | 36,892 | |||||||||||
Construction | (3,226) | - | (3,226) | 311 | - | 311 | 1,721 | 14,615 | 16,336 | |||||||||||
Lease financing | 434 | - | 434 | 1,638 | - | 1,638 | 973 | - | 973 | |||||||||||
Mortgage | 13,464 | 699 | 14,163 | 14,696 | 996 | 15,692 | 10,739 | 178 | 10,917 | |||||||||||
Consumer | 19,903 | (431) | 19,472 | 21,298 | 30 | 21,328 | 14,654 | 679 | 15,333 | |||||||||||
Total BPPR | 36,222 | 268 | 36,490 | 40,647 | 1,026 | 41,673 | 45,146 | 35,305 | 80,451 | |||||||||||
BPNA | ||||||||||||||||||||
Commercial | (1,265) | - | (1,265) | 205 | - | 205 | (879) | - | (879) | |||||||||||
Legacy [1] | (893) | - | (893) | (247) | - | (247) | 30 | - | 30 | |||||||||||
Mortgage | 16 | - | 16 | 230 | - | 230 | 176 | - | 176 | |||||||||||
Consumer | 1,321 | - | 1,321 | 1,613 | - | 1,613 | 1,969 | - | 1,969 | |||||||||||
Total BPNA | (821) | - | (821) | 1,801 | - | 1,801 | 1,296 | - | 1,296 | |||||||||||
Total loans charged-off - Popular, Inc. | 35,401 | 268 | 35,669 | 42,448 | 1,026 | 43,474 | 46,442 | 35,305 | 81,747 | |||||||||||
Balance transferred from covered to non-covered loans | - | - | - | - | - | - | 13,037 | (13,037) | - | |||||||||||
Net (write-downs) recoveries [2] | 5,445 | - | 5,445 | - | - | - | (30,548) | (1,823) | (32,371) | |||||||||||
Balance at end of period | $518,139 | $30,581 | $548,720 | $508,427 | $30,045 | $538,472 | $512,739 | $38,074 | $550,813 | |||||||||||
POPULAR, INC. | ||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 0.63 | % | 0.62 | % | 0.76 | % | 0.76 | % | 0.89 | % | 1.41 | % | ||||||||
Provision for loan losses to net charge-offs [3] | 1.27 | x | 1.29 | x | 1.13 | x | 1.03 | x | 1.28 | x | 0.92 | x | ||||||||
BPPR | ||||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 0.83 | % | 0.81 | % | 0.93 | % | 0.92 | % | 1.10 | % | 1.71 | % | ||||||||
Provision for loan losses to net charge-offs [3] | 1.21 | x | 1.22 | x | 1.08 | x | 0.98 | x | 1.32 | x | 0.94 | x | ||||||||
BPNA | ||||||||||||||||||||
Annualized net charge-offs (recoveries) to average loans held-in-portfolio | (0.06) | % | 0.15 | % | 0.12 | % | ||||||||||||||
Provision for loan losses to net charge-offs (recoveries) | (1.60) | 2.26 | 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] Net write-downs are related to loans sold or reclassified to held-for-sale. | ||||||||||||||||||||
[3] Excluding provision for loan losses and net (write-downs) recoveries related to loans sold or reclassified to held-for-sale. | ||||||||||||||||||||
N.M. - Not meaningful. | ||||||||||||||||||||
Popular, Inc. | |||||||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | |||||||||||||||||
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED | |||||||||||||||||
(Unaudited) | |||||||||||||||||
30-Jun-16 | |||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy [2] | Mortgage | Lease financing | Consumer | Total[3] | ||||||||||
Specific ALLL | $53,350 | $116 | $- | $43,909 | $548 | $24,898 | $122,821 | ||||||||||
Impaired loans | [1] | $335,881 | $1,036 | $- | $484,725 | $2,110 | $111,610 | $935,362 | |||||||||
Specific ALLL to impaired loans | [1] | 15.88 | % | 11.20 | % | - | % | 9.06 | % | 25.97 | % | 22.31 | % | 13.13 | % | ||
General ALLL | $156,331 | $10,949 | $1,852 | $97,577 | $9,546 | $119,063 | $395,318 | ||||||||||
Loans held-in-portfolio, excluding impaired loans | [1] | $10,023,934 | $716,296 | $49,709 | $6,379,393 | $661,984 | $3,773,983 | $21,605,299 | |||||||||
General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 1.56 | % | 1.53 | % | 3.73 | % | 1.53 | % | 1.44 | % | 3.15 | % | 1.83 | % | ||
Total ALLL | $209,681 | $11,065 | $1,852 | $141,486 | $10,094 | $143,961 | $518,139 | ||||||||||
Total non-covered loans held-in-portfolio | [1] | $10,359,815 | $717,332 | $49,709 | $6,864,118 | $664,094 | $3,885,593 | $22,540,661 | |||||||||
ALLL to loans held-in-portfolio | [1] | 2.02 | % | 1.54 | % | 3.73 | % | 2.06 | % | 1.52 | % | 3.70 | % | 2.30 | % | ||
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. | |||||||||||||||||
[2] 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. | |||||||||||||||||
[3] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of June 30, 2016 the general allowance on the covered loans amounted to $30.6 million. | |||||||||||||||||
31-Mar-16 | |||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy [2] | Mortgage | Lease financing | Consumer | Total[3] | ||||||||||
Specific ALLL | $55,098 | $172 | $- | $43,252 | $608 | $24,907 | $124,037 | ||||||||||
Impaired loans | [1] | $338,980 | $2,020 | $- | $479,092 | $2,391 | $112,167 | $934,650 | |||||||||
Specific ALLL to impaired loans | [1] | 16.25 | % | 8.51 | % | - | % | 9.03 | % | 25.43 | % | 22.21 | % | 13.27 | % | ||
General ALLL | $152,079 | $8,804 | $2,484 | $86,347 | $10,427 | $124,249 | $384,390 | ||||||||||
Loans held-in-portfolio, excluding impaired loans | [1] | $9,889,409 | $732,838 | $61,044 | $6,500,109 | $640,751 | $3,748,936 | $21,573,087 | |||||||||
General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 1.54 | % | 1.20 | % | 4.07 | % | 1.33 | % | 1.63 | % | 3.31 | % | 1.78 | % | ||
Total ALLL | $207,177 | $8,976 | $2,484 | $129,599 | $11,035 | $149,156 | $508,427 | ||||||||||
Total non-covered loans held-in-portfolio | [1] | $10,228,389 | $734,858 | $61,044 | $6,979,201 | $643,142 | $3,861,103 | $22,507,737 | |||||||||
ALLL to loans held-in-portfolio | [1] | 2.03 | % | 1.22 | % | 4.07 | % | 1.86 | % | 1.72 | % | 3.86 | % | 2.26 | % | ||
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. | |||||||||||||||||
[2] 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. | |||||||||||||||||
[3] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of March 31, 2016 the general allowance on the covered loans amounted to $30.0 million. | |||||||||||||||||
Variance | |||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy | Mortgage | Lease financing | Consumer | Total | ||||||||||
Specific ALLL | $(1,748) | $(56) | $- | $657 | $(60) | $(9) | $(1,216) | ||||||||||
Impaired loans | $(3,099) | $(984) | $- | $5,633 | $(281) | $(557) | $712 | ||||||||||
General ALLL | $4,252 | $2,145 | $(632) | $11,230 | $(881) | $(5,186) | $10,928 | ||||||||||
Loans held-in-portfolio, excluding impaired loans | $134,525 | $(16,542) | $(11,335) | $(120,716) | $21,233 | $25,047 | $32,212 | ||||||||||
Total ALLL | $2,504 | $2,089 | $(632) | $11,887 | $(941) | $(5,195) | $9,712 | ||||||||||
Total non-covered loans held-in-portfolio | $131,426 | $(17,526) | $(11,335) | $(115,083) | $20,952 | $24,490 | $32,924 | ||||||||||
Popular, Inc. | |||||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | |||||||||||||||
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS | |||||||||||||||
(Unaudited) | |||||||||||||||
30-Jun-16 | |||||||||||||||
Puerto Rico | |||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | |||||||||
Allowance for credit losses: | |||||||||||||||
Specific ALLL non-covered loans | $53,350 | $116 | $42,106 | $548 | $24,167 | $120,287 | |||||||||
General ALLL non-covered loans | 146,477 | 3,489 | 94,618 | 9,546 | 106,304 | 360,434 | |||||||||
ALLL - non-covered loans | 199,827 | 3,605 | 136,724 | 10,094 | 130,471 | 480,721 | |||||||||
Specific ALLL covered loans | - | - | - | - | - | - | |||||||||
General ALLL covered loans | - | - | 29,951 | - | 630 | 30,581 | |||||||||
ALLL - covered loans | - | - | 29,951 | - | 630 | 30,581 | |||||||||
Total ALLL | $199,827 | $3,605 | $166,675 | $10,094 | $131,101 | $511,302 | |||||||||
Loans held-in-portfolio: | |||||||||||||||
Impaired non-covered loans | $335,881 | $1,036 | $476,161 | $2,110 | $109,130 | $924,318 | |||||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 6,881,171 | 102,606 | 5,544,401 | 661,984 | 3,212,552 | 16,402,714 | |||||||||
Non-covered loans held-in-portfolio | 7,217,052 | 103,642 | 6,020,562 | 664,094 | 3,321,682 | 17,327,032 | |||||||||
Impaired covered loans | - | - | - | - | - | - | |||||||||
Covered loans held-in-portfolio, excluding impaired loans | - | - | 589,256 | - | 17,914 | 607,170 | |||||||||
Covered loans held-in-portfolio | - | - | 589,256 | - | 17,914 | 607,170 | |||||||||
Total loans held-in-portfolio | $7,217,052 | $103,642 | $6,609,818 | $664,094 | $3,339,596 | $17,934,202 | |||||||||
31-Mar-16 | |||||||||||||||
Puerto Rico | |||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | |||||||||
Allowance for credit losses: | |||||||||||||||
Specific ALLL non-covered loans | $55,098 | $172 | $41,660 | $608 | $24,326 | $121,864 | |||||||||
General ALLL non-covered loans | 142,492 | 4,065 | 82,840 | 10,427 | 111,459 | 351,283 | |||||||||
ALLL - non-covered loans | 197,590 | 4,237 | 124,500 | 11,035 | 135,785 | 473,147 | |||||||||
Specific ALLL covered loans | - | - | - | - | - | - | |||||||||
General ALLL covered loans | - | - | 29,822 | - | 223 | 30,045 | |||||||||
ALLL - covered loans | - | - | 29,822 | - | 223 | 30,045 | |||||||||
Total ALLL | $197,590 | $4,237 | $154,322 | $11,035 | $136,008 | $503,192 | |||||||||
Loans held-in-portfolio: | |||||||||||||||
Impaired non-covered loans | $338,980 | $2,020 | $471,183 | $2,391 | $109,920 | $924,494 | |||||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 7,029,311 | 103,124 | 5,628,576 | 640,751 | 3,199,171 | 16,600,933 | |||||||||
Non-covered loans held-in-portfolio | 7,368,291 | 105,144 | 6,099,759 | 643,142 | 3,309,091 | 17,525,427 | |||||||||
Impaired covered loans | - | - | - | - | - | - | |||||||||
Covered loans held-in-portfolio, excluding impaired loans | - | - | 606,711 | - | 18,419 | 625,130 | |||||||||
Covered loans held-in-portfolio | - | - | 606,711 | - | 18,419 | 625,130 | |||||||||
Total loans held-in-portfolio | $7,368,291 | $105,144 | $6,706,470 | $643,142 | $3,327,510 | $18,150,557 | |||||||||
Variance | |||||||||||||||
(In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | |||||||||
Allowance for credit losses: | |||||||||||||||
Specific ALLL non-covered loans | $(1,748) | $(56) | $446 | $(60) | $(159) | $(1,577) | |||||||||
General ALLL non-covered loans | 3,985 | (576) | 11,778 | (881) | (5,155) | 9,151 | |||||||||
ALLL - non-covered loans | 2,237 | (632) | 12,224 | (941) | (5,314) | 7,574 | |||||||||
Specific ALLL covered loans | - | - | - | - | - | - | |||||||||
General ALLL covered loans | - | - | 129 | - | 407 | 536 | |||||||||
ALLL - covered loans | - | - | 129 | - | 407 | 536 | |||||||||
Total ALLL | $2,237 | $(632) | $12,353 | $(941) | $(4,907) | $8,110 | |||||||||
Loans held-in-portfolio: | |||||||||||||||
Impaired non-covered loans | $(3,099) | $(984) | $4,978 | $(281) | $(790) | $(176) | |||||||||
Non-covered loans held-in-portfolio, excluding impaired loans | (148,140) | (518) | (84,175) | 21,233 | 13,381 | (198,219) | |||||||||
Non-covered loans held-in-portfolio | (151,239) | (1,502) | (79,197) | 20,952 | 12,591 | (198,395) | |||||||||
Impaired covered loans | - | - | - | - | - | - | |||||||||
Covered loans held-in-portfolio, excluding impaired loans | - | - | (17,455) | - | (505) | (17,960) | |||||||||
Covered loans held-in-portfolio | - | - | (17,455) | - | (505) | (17,960) | |||||||||
Total loans held-in-portfolio | $(151,239) | $(1,502) | $(96,652) | $20,952 | $12,086 | $(216,355) | |||||||||
Popular, Inc. | |||||||||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | |||||||||||||||
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS | |||||||||||||||
(Unaudited) | |||||||||||||||
30-Jun-16 | |||||||||||||||
U.S. Mainland | |||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||
Allowance for credit losses: | |||||||||||||||
Specific ALLL | $- | $- | $- | $1,803 | $731 | $2,534 | |||||||||
General ALLL | 9,854 | 7,460 | 1,852 | 2,959 | 12,759 | 34,884 | |||||||||
Total ALLL | $9,854 | $7,460 | $1,852 | $4,762 | $13,490 | $37,418 | |||||||||
Loans held-in-portfolio: | |||||||||||||||
Impaired loans | $- | $- | $- | $8,564 | $2,480 | $11,044 | |||||||||
Loans held-in-portfolio, excluding impaired loans | 3,142,763 | 613,690 | 49,709 | 834,992 | 561,431 | 5,202,585 | |||||||||
Total loans held-in-portfolio | $3,142,763 | $613,690 | $49,709 | $843,556 | $563,911 | $5,213,629 | |||||||||
31-Mar-16 | |||||||||||||||
U.S. Mainland | |||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||
Allowance for credit losses: | |||||||||||||||
Specific ALLL | $- | $- | $- | $1,592 | $581 | $2,173 | |||||||||
General ALLL | 9,587 | 4,739 | 2,484 | 3,507 | 12,790 | 33,107 | |||||||||
Total ALLL | $9,587 | $4,739 | $2,484 | $5,099 | $13,371 | $35,280 | |||||||||
Loans held-in-portfolio: | |||||||||||||||
Impaired loans | $- | $- | $- | $7,909 | $2,247 | $10,156 | |||||||||
Loans held-in-portfolio, excluding impaired loans | 2,860,098 | 629,714 | 61,044 | 871,533 | 549,765 | 4,972,154 | |||||||||
Total loans held-in-portfolio | $2,860,098 | $629,714 | $61,044 | $879,442 | $552,012 | $4,982,310 | |||||||||
Variance | |||||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||
Allowance for credit losses: | |||||||||||||||
Specific ALLL | $- | $- | $- | $211 | $150 | $361 | |||||||||
General ALLL | 267 | 2,721 | (632) | (548) | (31) | 1,777 | |||||||||
Total ALLL | $267 | $2,721 | $(632) | $(337) | $119 | $2,138 | |||||||||
Loans held-in-portfolio: | |||||||||||||||
Impaired loans | $- | $- | $- | $655 | $233 | $888 | |||||||||
Loans held-in-portfolio, excluding impaired loans | 282,665 | (16,024) | (11,335) | (36,541) | 11,666 | 230,431 | |||||||||
Total loans held-in-portfolio | $282,665 | $(16,024) | $(11,335) | $(35,886) | $11,899 | $231,319 |
Popular, Inc. | ||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | ||||||||
Table N - Reconciliation to GAAP Financial Measures | ||||||||
(Unaudited) | ||||||||
(In thousands, except share or per share information) | 30-Jun-16 | 31-Mar-16 | 30-Jun-15 | |||||
Total stockholders’ equity | $5,359,831 | $5,250,300 | $4,949,653 | |||||
Less: Preferred stock | (50,160) | (50,160) | (50,160) | |||||
Less: Goodwill | (631,095) | (631,095) | (505,435) | |||||
Less: Other intangibles | (50,983) | (54,080) | (74,854) | |||||
Total tangible common equity | $4,627,593 | $4,514,965 | $4,319,204 | |||||
Total assets | $37,606,148 | $36,147,009 | $36,741,250 | |||||
Less: Goodwill | (631,095) | (631,095) | (505,435) | |||||
Less: Other intangibles | (50,983) | (54,080) | (74,854) | |||||
Total tangible assets | $36,924,070 | $35,461,834 | $36,160,961 | |||||
Tangible common equity to tangible assets | 12.53 | % | 12.73 | % | 11.94 | % | ||
Common shares outstanding at end of period | 103,703,041 | 103,670,005 | 103,503,014 | |||||
Tangible book value per common share | $44.62 | $43.55 | $41.73 | |||||
Popular, Inc. | |||||||||
Financial Supplement to Second Quarter 2016 Earnings Release | |||||||||
Table O - Financial Information - Westernbank Loans | |||||||||
(Unaudited) | |||||||||
Revenues | |||||||||
Quarters ended | |||||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | Variance | ||||||
Interest income on WB loans | $49,794 | $44,904 | $4,890 | ||||||
FDIC loss-share expense: | |||||||||
Amortization of indemnification asset | (4,036) | (4,042) | 6 | ||||||
80% mirror accounting on credit impairment losses (reversal) [1] | 475 | (2,093) | 2,568 | ||||||
80% mirror accounting on reimbursable expenses | 2,235 | 3,950 | (1,715) | ||||||
80% mirror accounting on recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC |
(3,956) | (645) | (3,311) | ||||||
Change in true-up payment obligation | (7,688) | (443) | (7,245) | ||||||
Other | 394 | 127 | 267 | ||||||
Total FDIC loss-share expense | (12,576) | (3,146) | (9,430) | ||||||
Total revenues | 37,218 | 41,758 | (4,540) | ||||||
Provision (reversal) for loan losses- WB loans | (7,282) | (356) | (6,926) | ||||||
Total revenues less provision (reversal) for loan losses | $44,500 | $42,114 | $2,386 | ||||||
[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 [2] | |||||||||
(In thousands) | [1] 30-Jun-16 | 31-Mar-16 | Variance | ||||||
Professional fees | $5,991 | $3,316 | $2,675 | ||||||
OREO expenses | 6,389 | 2,205 | 4,184 | ||||||
Other operating expenses | 1,924 | 1,971 | (47) | ||||||
Total operating expenses | $14,304 | $7,492 | $6,812 | ||||||
[1] |
Includes expenses related to loans subject, and not subject, to the FDIC loss-sharing agreement. | ||||||||
[2] |
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-16 | 31-Mar-16 | Variance | ||||||
Loans | $2,013 | $2,058 | $(45) | ||||||
FDIC loss-share asset | 211 | 233 | (22) |
Activity in the carrying amount and accretable yield of loans accounted for under ASC 310-30 | |||||||||||
Quarters ended | |||||||||||
30-Jun-16 | 31-Mar-16 | ||||||||||
(In thousands) | Accretable yield | Carrying amount of loans | Accretable yield | Carrying amount of loans | |||||||
Beginning balance | $1,128,808 | $1,935,441 | $1,112,458 | $1,974,501 | |||||||
Accretion | (48,476) | 48,476 | (43,533) | 43,533 | |||||||
Changes in expected cash flows | (8,652) | - | 59,883 | - | |||||||
Collections / loan sales / charge-offs [2] | - | (183,974) | - | (82,593) | |||||||
Ending balance | 1,071,680 | 1,799,943 | 1,128,808 | 1,935,441 | |||||||
Allowance for loan losses - ASC 310-30 loans | - | (66,995) | - | (62,967) | |||||||
Ending balance, net of allowance for loan losses | $1,071,680 | $1,732,948 | $1,128,808 | $1,872,474 | |||||||
[1] 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 $597
million as of June 30, 2016 and $615 million as of March 31, 2016.
[2] For the quarter ended June 30, 2016, includes the impact of the bulk sale of loans with a carrying value of approximately $99 million. |
|||||||||||
Activity in the carrying amount of the FDIC indemnity asset | |||||||||||
Quarters ended | |||||||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | |||||||||
Balance at beginning of period | $219,448 | $310,221 | |||||||||
Amortization | (4,036) | (4,042) | |||||||||
Credit impairment losses (reversal) to be covered under loss-sharing agreements | 475 | (2,093) | |||||||||
Reimbursable expenses to be covered under loss-sharing agreements | 2,235 | 3,950 | |||||||||
Recoveries on covered assets | (4,093) | - | |||||||||
Net payments from FDIC under loss-sharing agreements | - | (88,588) | |||||||||
Balance at end of period | $214,029 | $219,448 | |||||||||
Activity in the remaining FDIC loss-share asset amortization | |||||||||||
Quarters ended | |||||||||||
(In thousands) | 30-Jun-16 | 31-Mar-16 | |||||||||
Balance at beginning of period | $25,205 | $26,100 | |||||||||
Amortization | (4,036) | (4,042) | |||||||||
Impact of lower projected losses | 2,022 | 3,147 | |||||||||
Balance at end of period | $23,191 | $25,205 |
CONTACT:
Popular, Inc.
Investor Relations:
Brett
Scheiner, 212-417-6721
Investor Relations Officer
BScheiner@BPOP.com
or
Media
Relations:
Teruca Rullán, 787-281-5170
Mobile:
917-679-3596
Senior Vice President, Corporate Communications