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Condensed consolidating financial information of guarantor and issuers of registered guaranteed securities
 3 Months Ended
Mar. 31, 2017
Disclosure Text Block  
Condensed Consolidating Financial Information of Guarantor and Issuers of Registeres Guranteed Securities

Note 34 – Condensed consolidating financial information of guarantor and issuers of registered guaranteed securities

The following condensed consolidating financial information presents the financial position of Popular, Inc. Holding Company (“PIHC”) (parent only), Popular North America, Inc. (“PNA”) and all other subsidiaries of the Corporation at March 31, 2017 and December 31, 2016, and the results of their operations and cash flows for periods ended March 31, 2017 and 2016.

PNA is an operating, wholly-owned subsidiary of PIHC and is the holding company of its wholly-owned subsidiaries: Equity One, Inc. and Banco Popular North America (“BPNA”), including BPNA’s wholly-owned subsidiaries Popular Equipment Finance, Inc., Popular Insurance Agency, U.S.A., and E-LOAN, Inc.

PIHC fully and unconditionally guarantees all registered debt securities issued by PNA.

Condensed Consolidating Statement of Financial Condition (Unaudited)
At March 31, 2017
All other
Popular Inc.PNAsubsidiaries andEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.eliminationsentriesConsolidated
Assets:
Cash and due from banks$33,766$462$340,239$(34,242)$340,225
Money market investments282,3658,2093,652,982(290,209)3,653,347
Trading account securities, at fair value2,994-48,118(127)50,985
Investment securities available-for-sale, at
fair value--9,197,527-9,197,527
Investment securities held-to-maturity, at
amortized cost--96,326-96,326
Other investment securities, at lower of cost
or realizable value9,8504,492151,944-166,286
Investment in subsidiaries5,581,1761,826,778-(7,407,954)-
Loans held-for-sale, at lower of cost or
fair value--85,309-85,309
Loans held-in-portfolio:
Loans not covered under loss-sharing
agreements with the FDIC1,134-22,857,422-22,858,556
Loans covered under loss-sharing
agreements with the FDIC--551,980-551,980
Less - Unearned income--123,835-123,835
Allowance for loan losses1-544,495-544,496
Total loans held-in-portfolio, net1,133-22,741,072-22,742,205
FDIC loss-share asset--58,793-58,793
Premises and equipment, net2,939-546,056-548,995
Other real estate not covered under loss-
sharing agreements with the FDIC81-185,755-185,836
Other real estate covered under loss-
sharing agreements with the FDIC--29,926-29,926
Accrued income receivable10834127,938(62)128,018
Mortgage servicing assets, at fair value--193,698-193,698
Other assets66,53126,3782,034,382(15,485)2,111,806
Goodwill--627,294-627,294
Other intangible assets553-42,153-42,706
Total assets$5,981,496$1,866,353$40,159,512$(7,748,079)$40,259,282
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing$-$-$7,296,570$(34,242)$7,262,328
Interest bearing--25,240,460(290,209)24,950,251
Total deposits--32,537,030(324,451)32,212,579
Assets sold under agreements to repurchase--434,714-434,714
Other short-term borrowings--1,200-1,200
Notes payable736,121148,518673,333-1,557,972
Other liabilities55,0682,798820,810(16,072)862,604
Total liabilities791,189151,31634,467,087(340,523)35,069,069
Stockholders' equity:
Preferred stock50,160---50,160
Common stock1,041256,307(56,309)1,041
Surplus4,252,8194,111,2075,717,066(9,819,746)4,261,346
Retained earnings (accumulated deficit)1,295,233(2,374,242)236,9692,128,7461,286,706
Treasury stock, at cost(89,034)--(94)(89,128)
Accumulated other comprehensive loss,
net of tax(319,912)(21,930)(317,917)339,847(319,912)
Total stockholders' equity5,190,3071,715,0375,692,425(7,407,556)5,190,213
Total liabilities and stockholders' equity$5,981,496$1,866,353$40,159,512$(7,748,079)$40,259,282

Condensed Consolidating Statement of Financial Condition (Unaudited)
At December 31, 2016
All other
Popular, Inc.PNAsubsidiaries andEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.eliminationsentriesConsolidated
Assets:
Cash and due from banks$47,783$591$362,101$(48,081)$362,394
Money market investments252,34713,2632,891,670(267,063)2,890,217
Trading account securities, at fair value2,640-57,297(132)59,805
Investment securities available-for-sale, at
fair value--8,209,806-8,209,806
Investment securities held-to-maturity, at
amortized cost--98,101-98,101
Other investment securities, at lower of cost
or realizable value9,8504,492153,476-167,818
Investment in subsidiaries5,609,6111,818,127-(7,427,738)-
Loans held-for-sale, at lower of cost or
fair value--88,821-88,821
Loans held-in-portfolio:
Loans not covered under loss-sharing
agreements with the FDIC1,142-22,894,030-22,895,172
Loans covered under loss-sharing
agreements with the FDIC--572,878-572,878
Less - Unearned income--121,425-121,425
Allowance for loan losses2-540,649-540,651
Total loans held-in-portfolio, net1,140-22,804,834-22,805,974
FDIC loss-share asset--69,334-69,334
Premises and equipment, net3,067-540,914-543,981
Other real estate not covered under loss-sharing
agreements with the FDIC81-180,364-180,445
Other real estate covered under loss-sharing
agreements with the FDIC--32,128-32,128
Accrued income receivable112138137,882(90)138,042
Mortgage servicing assets, at fair value--196,889-196,889
Other assets61,77025,1462,073,562(14,968)2,145,510
Goodwill--627,294-627,294
Other intangible assets553-44,497-45,050
Total assets$5,988,954$1,861,757$38,568,970$(7,758,072)$38,661,609
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing$-$-$7,028,524$(48,081)$6,980,443
Interest bearing--23,782,844(267,063)23,515,781
Total deposits--30,811,368(315,144)30,496,224
Assets sold under agreements to repurchase--479,425-479,425
Other short-term borrowings--1,200-1,200
Notes payable735,600148,512690,740-1,574,852
Other liabilities55,3096,034865,861(15,253)911,951
Total liabilities790,909154,54632,848,594(330,397)33,463,652
Stockholders' equity:
Preferred stock50,160---50,160
Common stock1,040256,307(56,309)1,040
Surplus4,246,4954,111,2075,717,066(9,819,746)4,255,022
Retained earnings (accumulated deficit)1,228,834(2,382,049)264,9442,108,5781,220,307
Treasury stock, at cost(8,198)--(88)(8,286)
Accumulated other comprehensive loss,
net of tax(320,286)(21,949)(317,941)339,890(320,286)
Total stockholders' equity5,198,0451,707,2115,720,376(7,427,675)5,197,957
Total liabilities and stockholders' equity$5,988,954$1,861,757$38,568,970$(7,758,072)$38,661,609

Condensed Consolidating Statement of Operations (Unaudited)
Quarter ended March 31, 2017
All other
Popular, Inc.PNAsubsidiaries andEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.eliminationsentriesConsolidated
Interest and dividend income:
Dividend income from subsidiaries$129,000$-$-$(129,000)$-
Loans15-363,121-363,136
Money market investments481216,572(501)6,573
Investment securities1428044,664-44,886
Trading account securities--1,400-1,400
Total interest and dividend income129,638101415,757(129,501)415,995
Interest expense:
Deposits--34,258(501)33,757
Short-term borrowings--1,095-1,095
Long-term debt13,1182,6923,235-19,045
Total interest expense13,1182,69238,588(501)53,897
Net interest income (expense) 116,520(2,591)377,169(129,000)362,098
Provision for loan losses- non-covered loans--42,057-42,057
Provision (reversal) for loan losses- covered loans--(1,359)-(1,359)
Net interest income (expense)
after provision for loan losses116,520(2,591)336,471(129,000)321,400
Service charges on deposit accounts--39,536-39,536
Other service fees--56,258(83)56,175
Mortgage banking activities--11,369-11,369
Net gain on sale of investment securities--162-162
Trading account loss(120)-(169)11(278)
Adjustments (expense) to indemnity reserves
on loans sold--(1,966)-(1,966)
FDIC loss-share expense--(8,257)-(8,257)
Other operating income 4,65580913,670(6)19,128
Total non-interest income4,535809110,603(78)115,869
Operating expenses:
Personnel costs13,814-111,793-125,607
Net occupancy expenses914-19,862-20,776
Equipment expenses582-15,388-15,970
Other taxes46-10,923-10,969
Professional fees2,513(525)67,345(83)69,250
Communications152-5,797-5,949
Business promotion419-11,157-11,576
FDIC deposit insurance--6,493-6,493
Other real estate owned (OREO) expenses --12,818-12,818
Other operating expenses(18,790)1348,888(546)29,565
Amortization of intangibles--2,345-2,345
Total operating expenses(350)(512)312,809(629)311,318
Income (loss) before income tax and equity in
(losses) earnings of subsidiaries121,405(1,270)134,265(128,449)125,951
Income tax (benefit) expense-(445)33,24021133,006
Income (loss) before equity in (losses) earnings of
subsidiaries121,405(825)101,025(128,660)92,945
Equity in undistributed (losses) earnings of
subsidiaries(28,460)8,633-19,827-
Net Income$92,945$7,808$101,025$(108,833)$92,945
Comprehensive income, net of tax$93,319$7,827$101,049$(108,876)$93,319

Condensed Consolidating Statement of Operations (Unaudited)
Quarter ended March 31, 2016
All other
Popular, Inc.PNAsubsidiaries andEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.eliminationsentriesConsolidated
Interest and dividend income:
Dividend income from subsidiaries$29,700$-$-$(29,700)$-
Loans19-363,178-363,197
Money market investments255212,863(276)2,863
Investment securities2388035,953-36,271
Trading account securities--1,689-1,689
Total interest and dividend income30,212101403,683(29,976)404,020
Interest expense:
Deposits--30,150(276)29,874
Short-term borrowings--1,861-1,861
Long-term debt13,1172,6934,063-19,873
Total interest expense13,1172,69336,074(276)51,608
Net interest income (expense)17,095(2,592)367,609(29,700)352,412
Provision (reversal) for loan losses- non-covered loans(34)-47,974-47,940
Provision (reversal) for loan losses- covered loans--(3,105)-(3,105)
Net interest income (expense) after provision for
loan losses17,129(2,592)322,740(29,700)307,577
Service charges on deposit accounts--39,862-39,862
Other service fees--53,439(57)53,382
Mortgage banking activities--10,551-10,551
Trading account profit (loss)24-(186)-(162)
Net loss on sale of loans, including valuation
adjustments on loans held-for-sale--(304)-(304)
Adjustments (expense) to indemnity reserves
on loans sold--(4,098)-(4,098)
FDIC loss-share expense--(3,146)-(3,146)
Other operating income (loss)3,256(1,303)13,599(7)15,545
Total non-interest income (expense)3,280(1,303)109,717(64)111,630
Operating expenses:
Personnel costs15,421-111,670-127,091
Net occupancy expenses916-19,514-20,430
Equipment expenses445-14,103-14,548
Other taxes47-10,148-10,195
Professional fees2,8813072,605(57)75,459
Communications137-6,183-6,320
Business promotion465-10,645-11,110
FDIC deposit insurance--7,370-7,370
Other real estate owned (OREO) expenses --9,141-9,141
Other operating expenses(20,428)3938,106(552)17,165
Amortization of intangibles--3,114-3,114
Total operating expenses(116)69302,599(609)301,943
Income (loss) before income tax and equity in earnings
of subsidiaries20,525(3,964)129,858(29,155)117,264
Income tax expense (benefit)3(1,387)33,43621332,265
Income (loss) before equity in earnings of subsidiaries20,522(2,577)96,422(29,368)84,999
Equity in undistributed earnings of subsidiaries64,4778,923-(73,400)-
Net Income $84,999$6,346$96,422$(102,768)$84,999
Comprehensive income, net of tax$160,135$27,295$172,035$(199,330)$160,135

Condensed Consolidating Statement of Cash Flows (Unaudited)

Quarter ended March 31, 2017
All other
Popular, Inc.PNAsubsidiariesEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.and eliminationsentriesConsolidated
Cash flows from operating activities:
Net income $92,945$7,808$101,025$(108,833)$92,945
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Equity in losses (earnings) of subsidiaries,
net of dividends or distributions28,460(8,633)-(19,827)-
Provision for loan losses --40,698-40,698
Amortization of intangibles--2,345-2,345
Depreciation and amortization of premises and
equipment163-11,636-11,799
Net accretion of discounts and amortization
of premiums and deferred fees 5217(6,991)-(6,463)
Fair value adjustments on mortgage servicing rights--5,954-5,954
FDIC loss-share expense--8,257-8,257
Adjustments (expense) to indemnity reserves on
loans sold--1,966-1,966
Earnings from investments under the
equity method(4,652)(809)(5,418)-(10,879)
Deferred income tax (benefit) expense-(445)25,29521025,060
(Gain) loss on:
Disposition of premises and equipment and other
productive assets(17)-6,483-6,466
Sale and valuation adjustments of investment
securities --(162)-(162)
Sale of loans, including valuation adjustments on
loans held for sale and mortgage banking activities--(5,381)-(5,381)
Sale of foreclosed assets, including write-downs--4,512-4,512
Acquisitions of loans held-for-sale--(73,043)-(73,043)
Proceeds from sale of loans held-for-sale--29,364-29,364
Net originations on loans held-for-sale--(123,336)-(123,336)
Net (increase) decrease in:
Trading securities(355)-177,514(6)177,153
Accrued income receivable51049,943(28)10,024
Other assets(256)2213,08830713,161
Net (decrease) increase in:
Interest payable(7,875)(2,685)(749)28(11,281)
Pension and other postretirement benefits
obligations--331-331
Other liabilities(2,413)(551)(9,844)(846)(13,654)
Total adjustments13,581(12,990)112,462(20,162)92,891
Net cash provided by (used in) operating activities106,526(5,182)213,487(128,995)185,836
Cash flows from investing activities:
Net (increase) decrease in money market investments (30,018)5,053(761,312)23,147(763,130)
Purchases of investment securities:
Available-for-sale--(1,216,880)-(1,216,880)
Other--(225)-(225)
Proceeds from calls, paydowns, maturities and
redemptions of investment securities:
Available-for-sale--222,677-222,677
Held-to-maturity--2,184-2,184
Proceeds from sale of investment securities:
Available for sale--381-381
Other--1,757-1,757
Net repayments on loans 7-99,299-99,306
Acquisition of loan portfolios --(109,098)-(109,098)
Net payments from FDIC under loss-sharing
agreements--(23,574)-(23,574)
Return of capital from equity method investments500-3,362-3,862
Acquisition of premises and equipment(39)-(18,607)-(18,646)
Proceeds from sale of:
Premises and equipment and other productive assets18-2,993-3,011
Foreclosed assets--27,547-27,547
Net cash (used in) provided by investing activities(29,532)5,053(1,769,496)23,147(1,770,828)
Cash flows from financing activities:
Net increase (decrease) in:
Deposits--1,725,266(9,308)1,715,958
Assets sold under agreements to repurchase--(44,711)-(44,711)
Payments of notes payable --(17,408)-(17,408)
Proceeds from issuance of common stock1,806---1,806
Dividends paid to parent company--(129,000)129,000-
Dividends paid(16,499)---(16,499)
Net payments for repurchase of common stock(75,599)--(5)(75,604)
Payments related to tax withholding for
share-based compensation(719)---(719)
Net cash (used in) provided by financing activities(91,011)-1,534,147119,6871,562,823
Net (decrease) increase in cash and due from banks(14,017)(129)(21,862)13,839(22,169)
Cash and due from banks at beginning of period47,783591362,101(48,081)362,394
Cash and due from banks at end of period$33,766$462$340,239$(34,242)$340,225
During the quarter ended March 31, 2017 there have not been any cash flows associated with discontinued operations.

Condensed Consolidating Statement of Cash Flows (Unaudited)

Quarter ended March 31, 2016
All other
Popular, Inc.PNAsubsidiariesEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.and eliminationsentriesConsolidated
Cash flows from operating activities:
Net income$84,999$6,346$96,422$(102,768)$84,999
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Equity in earnings of subsidiaries,
net of dividends or distributions(64,477)(8,923)-73,400-
Provision (reversal) for loan losses (34)-44,869-44,835
Amortization of intangibles--3,114-3,114
Depreciation and amortization of premises and
equipment177-11,530-11,707
Net accretion of discounts and amortization
of premiums and deferred fees 5218(11,687)-(11,158)
Fair value adjustments on mortgage servicing rights--8,477-8,477
FDIC loss-share income--3,146-3,146
Adjustments (expense) to indemnity reserves on
loans sold--4,098-4,098
(Earnings) losses from investments under the
equity method(3,256)1,303(5,136)-(7,089)
Deferred income tax expense (benefit)3(1,387)24,38921323,218
(Gain) loss on:
Disposition of premises and equipment and
other productive assets--(1,946)-(1,946)
Sale of loans, including valuation adjustments on
loans held for sale and mortgage banking activities--(7,101)-(7,101)
Sale of foreclosed assets, including write-downs--2,802-2,802
Acquisitions of loans held-for-sale--(66,451)-(66,451)
Proceeds from sale of loans held-for-sale--22,253-22,253
Net originations on loans held-for-sale--(110,528)-(110,528)
Net (increase) decrease in:
Trading securities(101)-176,699-176,598
Accrued income receivable12793,842(7)3,926
Other assets12122,194(1,220)20,996
Net (decrease) increase in:
Interest payable(7,875)(2,685)(1,708)7(12,261)
Pension and other postretirement benefits
obligations--1,536-1,536
Other liabilities(4,622)(382)(12,681)675(17,010)
Total adjustments(79,651)(11,966)111,71173,06893,162
Net cash provided by (used in) operating activities5,348(5,620)208,133(29,700)178,161
Cash flows from investing activities:
Net decrease in money market investments 6,9525,412262,679(12,411)262,632
Purchases of investment securities:
Available-for-sale--(742,859)-(742,859)
Other--(59,786)-(59,786)
Proceeds from calls, paydowns, maturities and
redemptions of investment securities:
Available-for-sale--239,399-239,399
Held-to-maturity--2,108-2,108
Other--41,664-41,664
Proceeds from sale of investment securities:
Other--26,346-26,346
Net repayments on loans 8-13,327-13,335
Proceeds from sale of loans--1,128-1,128
Acquisition of loan portfolios --(212,798)-(212,798)
Net payments from FDIC under loss-sharing
agreements--88,588-88,588
Return of capital from equity method investments-206--206
Acquisition of premises and equipment(398)-(38,421)-(38,819)
Proceeds from sale of:
Premises and equipment and other productive assets46-5,046-5,092
Foreclosed assets--14,513-14,513
Net cash provided by (used in) investing activities6,6085,618(359,066)(12,411)(359,251)
Cash flows from financing activities:
Net increase (decrease) in:
Deposits--302,71815,832318,550
Federal funds purchased and assets sold
under agreements to repurchase--(1,991)-(1,991)
Other short-term borrowings--5,170-5,170
Payments of notes payable --(108,452)-(108,452)
Proceeds from issuance of notes payable--28,883-28,883
Proceeds from issuance of common stock2,109---2,109
Dividends paid to parent company--(29,700)29,700-
Dividends paid(16,473)---(16,473)
Net payments for repurchase of common stock(77)---(77)
Payments related to tax withholding for
share-based compensation(680)---(680)
Net cash (used in) provided by financing activities(15,121)-196,62845,532227,039
Net (decrease) increase in cash and due from banks(3,165)(2)45,6953,42145,949
Cash and due from banks at beginning of period24,298600363,620(24,844)363,674
Cash and due from banks at end of period$21,133$598$409,315$(21,423)$409,623
During the quarter ended March 31, 2016 there have not been any cash flows associated with discontinued operations.