 Investor Presentation First Quarter 2018 Exhibit 99.1 |
 This presentation contains “forward-looking statements” within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995, including without limitation those about Popular, Inc.’s (the “Corporation,” “Popular,” “us,” “our,”) business, financial condition, results of operations, plans, objectives, and future performance. These statements are not guarantees
of future performance, are based on management’s current
expectations and, by their nature, involve risks, uncertainties,
estimates and assumptions. Potential factors, some of which are beyond the
Corporation’s control, could cause actual results to differ
materially from those expressed in, or implied by, such forward-looking statements. Risks and uncertainties include without limitation the effect of competitive and economic factors, and our reaction to those factors, the adequacy of the
allowance for loan losses, delinquency trends, market risk and the impact of
interest rate changes, capital market conditions, capital
adequacy and liquidity, the effect of legal proceedings and new accounting standards on the Corporation’s financial condition and results of operations, the impact of Hurricanes Irma and Maria on us, the length of time and the receipt of any
regulatory approvals necessary to consummate our acquisition and
assumption of certain assets and liabilities related to Wells
Fargo’s auto finance business in Puerto Rico, as well as the ability to successfully transition and integrate the business, unexpected costs, including, without limitation, costs due to exposure to any unrecorded liabilities or issues not
identified during due diligence investigation of the business or
that are not subject to indemnification or reimbursement, and risks that the business may suffer as a result of the transaction, including due to adverse effects on relationships with customers,
employees and service providers. All statements contained herein that are
not clearly historical in nature, are forward- looking, and
the words “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” “project” and similar expressions,
and future or conditional verbs such as “will,” “would,”
“should,” “could,” “might,” “can,” “may” or similar expressions, are generally intended to identify forward-looking statements. More information on the risks and important factors that could affect the Corporation’s future results and financial condition
is included in our Annual Report on Form 10-K for the year
ended December 31, 2017 and in our Form 10-Q for the quarter
ended March 31, 2018 to be filed with the SEC. Our filings are available on the Corporation’s website (www.popular.com) and on the Securities and Exchange Commission website (www.sec.gov). The Corporation assumes no
obligation to update or revise any forward-looking statements
or information which speak as of their respective dates. Cautionary
Note Regarding Forward-Looking Statements 2
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 • NPLs increased by $56 million QoQ; ratio at 2.5% • NCO ratio decreased to 0.90% from 1.61% in previous quarter Credit (excluding covered loans) • Net income of $91.3 million • Strong margins: Popular, Inc. 3.89%, BPPR 4.14% Earnings • Robust capital; Common Equity Tier 1 Capital ratio of 16.8% • Tangible book value per share of $42.61 compared to $43.02 in Q4 2017 Capital • Deposit growth in P.R. of $1.7 billion QoQ; deposit cost up by 2 basis
points • U.S. commercial loan growth of $138 million or 3% QoQ • Agreement to acquire Wells Fargo’s auto finance business in P.R. • Popular now operates under a single brand through all its regions, including the U.S. Quarter Events Q1 2018 Highlights 3 |
 Financial Summary (GAAP)
1 See slide 13 for Q4 2017 adjusted Non-GAAP results 4 (Unaudited) ($ in thousands) Q1 2018 Q4 2017 Net interest income 393,047 $ 387,216 $ 5,831 $ Service charges on deposits 36,455 33,827 2,628 Other service fees 60,602 48,443 12,159 Mortgage banking activities 12,068 (1,853) 13,921 Adjustments (expense) to indemnity reserves on loans sold (2,926) (11,075) 8,149 FDIC loss-share (expense) income (8,027) 2,614 (10,641) Other non-interest income 15,325 14,175 1,150 Gross revenues 506,544 473,347 33,197 Provision for loan losses – non-covered loans 69,333 70,001 (668) Provision for loan losses – covered loans 1,730 1,487 243 Total provision for loan losses 71,063 71,488 (425) Net revenues 435,481 401,859 33,622 Personnel costs 125,852 118,305 7,547 Professional fees 82,985 79,532 3,453 Business promotion 12,009 18,287 (6,278) OREO expenses 6,131 7,328 (1,197) Other operating expenses 95,025 98,503 (3,478) Total operating expenses 322,002 321,955 47 Income from continuing operations before income tax 113,479 79,904 33,575 Income tax expense 22,155 182,058 (159,903) Net income (loss) 91,324 $
(102,154) $ 193,478 $ Variance 1 |
 5 Popular, Inc. (%) • Popular’s capital levels remain robust with Common Equity Tier 1 of 16.8% • Tangible book value per share of $42.61 compared to $43.02 in Q4 2017 Capital Note: Capital ratios for the current quarter are preliminary 16.3 16.3 19.2 10.0 16.8 16.8 19.8 10.0 Common Equity Tier 1 Capital Tier 1 Risk-Based Capital Total Risk-Based Capital Tier 1 Leverage Q4 2017 Q1 2018 |
 6 Municipalities Obligations of municipalities are backed by real and personal property taxes, municipal excise taxes, and/or a percentage of the sales and use tax. Indirect exposure includes loans or securities that are payable by non-governmental entities, but which carry a government guarantee to cover any shortfall in collateral in the event of borrower default. Majority are single-family mortgage related. Indirect Exposure The Corporation has no direct exposure to debt of the P.R. central government or its public corporations. Our
direct exposure to P.R. municipalities is $481 million, down by $2 million from
the prior quarter. P.R. Public Sector Exposure
Outstanding P.R. government exposure
($ in millions)
Loans Securities Total Municipalities 434 $
47 $ 481 $
Indirect Exposure
331 $
51 $ 382 $ |
 7 Highlights • NPAs, including covered loans, increased by $36 million QoQ • NPLs, excluding covered loans, increased by $56 million QoQ P.R. NPLs at $574 million, or 3.2% of loans, up by $62 million, driven by higher mortgage NPLs of $51 million, primarily due to a number of customers still being evaluated for post-moratorium payments options U.S. NPLs at $33 million, or 0.5% of loans, down by $6 million QoQ, mainly driven by mortgage and commercial NPLs • OREOs down by $20 million QoQ, related to sales activity and reduced foreclosure activity due to moratorium Non-Performing Assets (including covered assets)
($ in millions)
Non-Performing Assets
Differences due to rounding
Non-Performing Loans (excluding covered loans) ($ in
millions) 788
852 1,293 2,402 2,489 2,365 2,002 932 933 843 774 795 758 743 779 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 NPLs OREO NPL HFS NPAs/Total Assets 771 1,203 2,276 1,572 1,738 1,425 598 630 602 558 576 547 586 551 607 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Mortgage Commercial & Construction Other NPL/Loans (HIP) |
 8 NPL Inflows Total NPL Inflows ($ in millions) Mortgage NPL Inflows ($ in millions) Commercial, Construction and Legacy NPL Inflows ($ in millions) Metrics exclude covered loans. Differences due to rounding Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 U.S. Inflows P.R. Inflows Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 U.S. Inflows P.R. Inflows Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 U.S. Inflows P.R. Inflows Doral Inflows Highlights • Total NPL inflows up by $98 million QoQ P.R. mortgage inflows up by $106 million QoQ, prompted by the end of the payment moratorium P.R. commercial down by $4 million QoQ U.S. inflows down by $5 million QoQ |
 9 NCOs and NCO-to-Loan Ratio ($ in millions) Provision and Provision-to-NCO Ratio ($ in millions) Highlights • Net charge-offs (NCOs) decreased by $41 million Q1 2018 includes $8 million related to the U.S. taxi medallion portfolio compared to $32 million in Q4 2017 NCO ratio at 0.90% vs. 1.61% in Q4 2017 • Allowance for loan and lease losses (ALLL) increased by $17 million QoQ P.R. ALLL increased by $15 million, mostly driven by a single commercial borrower, in part offset by a downward adjustment of $8 million to the estimated losses associated with Hurricane María ALLL-to-Loans ratio at 2.52% vs. 2.43% in Q4 2017 ALLL-to-NPL ratio at 100% vs. 107% in Q4 2017 • Provision remained essentially flat at $69 million from Q4 2017 Provision-to-NCO ratio of 132% compared to 75% in Q4 2017 Metrics exclude covered loans. Differences due to rounding ALLL, ALLL-to-NCO and ALLL-to-NPL Ratios ($ in millions) Additional Credit Metrics 360% Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 ALLL ALLL/NCO ALLL/NPL 70 83% 132% Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 PLLL Loan Sales PLLL PLLL/NCO -3 -5 0.72% Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 NCO Loan Sales Write-downs/(recoveries) NCO% 0.90% 31 8 |
 10 Driving Shareholder Value Capital • Robust capital with Common Equity Tier 1 Capital of 16.8% • Tangible book value per share of $42.61 Earnings • Unique franchise in P.R. continues to generate strong revenue and significant deposit growth • Continued loan growth in the U.S. Additional Value • Investment in Evertec and Banco BHD León |
 Investor Presentation First Quarter 2018 Appendix |
 12 Franchise Summary Corporate Structure Assets = $36 billion Assets = $9 billion Assets = $46 billion Corporate Structure – Popular, Inc. Information as of March 31, 2018 ¹ Doing business as Popular Selected equity investments EVERTEC and Banco BHD León under Corporate segment and joint ventures under BPPR segment
• Transaction processing, business processes outsourcing • 16.10% stake • Adjusted EBITDA of $37 million for the quarter ended December 31, 2017 • Dominican Republic bank • 15.84% stake • 2017 net income of $164 million PRLP 2011 Holdings, LLC • Construction and commercial loans vehicle • 24.9% stake PR Asset Portfolio 2013-1 International, LLC • Construction, commercial loans and OREOs vehicle • 24.9% stake Industry Financial services Headquarters San Juan, Puerto Rico Assets $46 billion (among top 50 BHCs in the U.S.) Loans $25 billion Deposits $37 billion Banking branches 165 in Puerto Rico, 51 in the U.S. and 9 in the Virgin Islands NASDAQ ticker symbol BPOP Market Cap $4 billion Banco Popular de Puerto Rico Popular Auto, LLC Popular Securities LLC Popular’s Insurance Subsidaries Popular North America, Inc. Holding Companies (Including Equity Investments) Puerto Rico Operations United States Operations 1 Popular Bank |
 GAAP Reconciliation
13 (Unaudited) ($ in thousands) Pre-tax Impact on net loss U.S. GAAP Net loss (102,154) $ Non-GAAP Adjustments: Impact of the Tax Cut and Jobs Act 1 - 168,358 168,358 Adjusted net income (Non-GAAP) 66,204 $ Q4 2017 Income tax effect 1 On December 22, 2017, the Tax Cut and Jobs Act ("the Act") was signed into law by the President of the United
States. The Act, among other things, reduced the maximum federal corporate tax rate
from 35% to 21%. The adjustment reduced the DTA related to the
Corporation's U.S. operations as a result of a lower realizable benefit at the lower tax rate. |
  De-Risked Loan Portfolios
• The Corporation has de-risked its loan portfolios by reducing its exposure to asset classes with historically high loss content • The P.R. commercial portfolio reductions include: Commercial portfolio, including construction, has decreased from 55% of total loans held-in- portfolio to 41% Construction portfolio is down by 92% since Q4 2007 SME lending is down by 53% from Q4 2007 • Collateralized exposure now represents a larger portion of consumer loan portfolio • Unsecured loan credit quality has improved as overall FICO scores have increased 14 Differences due to rounding (Excluding covered loans) ($ in millions) Highlights 1 Small and Medium Enterprise 2 NCOs distribution represents the percentage allocation of net charge-offs from Q1 2008 through Q1 2018 per each loan category,
excluding net charge-offs from previously covered loans up to
Q2 2015. $ in millions
Q4 2007 Q1 2018 Q4 2007 Q1 2018 Q4 2007 Q1 2018 Variance Commercial $7,774 $7,123 $4,515 $4,346 $12,288 $11,469 ($820) Consumer 3,552 3,329 1,698 463 5,249 3,792 (1,457) Mortgage 2,933 6,356 3,139 709 6,071 7,065 993 Construction 1,231 94 237 800 1,468 893 (575) Leases 814 838 - - 814 838 24 Legacy - - 2,130 31 2,130 31 (2,099) Total $16,304 $17,740 $11,718 $6,348 $28,021 $24,088 ($3,933) P.R. U.S. Total Loan Composition (Held-in Portfolio) 1 NCOs ($mm) (%) ($mm) (%) ($mm) (%) Distribution 2 CRE SME 1 $2,938 33% $1,713 24% ($1,225) -42% 26% C&I SME 1 2,287 25% 730 10% (1,557) -68% 29% C&I Corp 1,592 18% 2,092 29% 500 31% 6% Construction 1,231 14% 94 1% (1,137) -92% 33% CRE Corp 892 10% 2,436 34% 1,544 173% 5% Multifamily 64 1% 151 2% 87 136% 1% Total $9,004 $7,217 ($1,787) -20% 100% P.R. Commercial & Construction Distribution Q4 2007 Q1 2018 Variance |
 15 Business Segments (GAAP) ¹ Non-fully taxable equivalent (Unaudited) ($ in millions) Financial Results Q1 2018 Q4 2017 Variance Q1 2018 Q4 2017 Variance Net interest income 332 $ 329 $ 3 $ 75 $ 73 $ 2 $ Non-interest income 97 74 23 4 5 (1) Gross revenues 429 403 26 79 78 1 Provision for loan losses – non-covered loans 57 53 4 13 17 (4) Provision for loan losses – covered loans 2 1 1 - - - Total provision for loan losses 59 54 5 13 17 (4) Operating expenses 253 257 (4) 47 49 (2) Income before income tax 117 92 25 19 12 7 Income tax expense 26 16 10 1 178 (177) Net income (loss) 91 $ 76 $ 15 $ 18 $ (166) $ 184 $ ($ in millions) Balance Sheet Highlights Total assets 36,244 $ 34,844 $ 1,400 $ 9,227 $ 9,168 $ 59 $ Total loans 18,293 18,688 (395) 6,348 6,215 133 Total deposits 30,776 29,072 1,704 6,628 6,691 (63) Asset Quality (including covered assets) Q1 2018 Q4 2017 Variance Q1 2018 Q4 2017 Variance Non-performing loans held-in-portfolio / Total loans 3.15% 2.75% 0.40% 0.52% 0.64% (0.12)% Non-performing assets / Total assets 2.05% 2.01% 0.04% 0.39% 0.45% (0.06)% Allowance for loan losses / Total loans 3.10% 2.95% 0.15% 1.16% 1.16% 0.00% Net interest margin¹ 4.14% 4.21% -0.07% 3.61% 3.46% 0.15% BPPR Popular U.S. Q1 2018 Q4 2017 Variance Q1 2018 Q4 2017 Variance |
 Consolidated Credit Summary (Excluding Covered Loans)
16 Differences due to rounding $ in millions Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Loans Held in Portfolio (HIP) $24,088 $24,293 $23,173 $22,918 $22,735 Performing HFS $78 $132 $69 $70 $85 NPL HFS $0 $0 $0 $0 $0 Total Non Covered Loans 24,166 $ 24,425 $ 23,242 $ 22,988 $ 22,820 $ Non-performing loans (NPLs) $607 $551 $586 $547 $576 Commercial $158 $165 $165 $167 $179 Construction $4 $0 $0 $0 $0 Legacy $3 $3 $3 $3 $3 Mortgage $370 $322 $352 $319 $331 Consumer $68 $58 $62 $56 $59 Leases $4 $3 $3 $2 $2 NPLs HIP to loans HIP 2.52% 2.27% 2.53% 2.39% 2.53% Net charge-offs (NCOs) $53 $94 $53 $57 $36 Commercial $11 $39 $4 $11 $2 Construction ($0) $0 ($0) ($2) ($0) Legacy ($0) ($1) ($0) ($0) ($0) Mortgage $13 $24 $17 $21 $13 Consumer $27 $28 $31 $26 $20 Leases $2 $3 $1 $1 $1 NCOs to average loans HIP 0.90% 1.61% 0.92% 1.01% 0.63% Provision for loan losses (PLL) $69 $70 $158 $50 $42 PLL to average loans HIP 1.18% 1.21% 2.75% 0.88% 0.74% PLL to NCOs 1.32x 0.75x 2.97x 0.87x 1.18x Allowance for loan losses (ALL) $607 $590 $614 $509 $517 ALL to loans HIP 2.52% 2.43% 2.65% 2.22% 2.27% ALL to NPLs HIP 100.03% 107.12% 104.77% 93.07% 89.77% |
 Popular, Inc. Credit Ratings
17 Our senior unsecured ratings have remained stable Moody’s B2 Stable Outlook Fitch BB- Negative Outlook S&P BB- Negative Outlook 2017 2014 2015 2016 February Moody’s changes outlook to stable from negative April S&P upgrades to BB- from B+ revised outlook to stable February S&P placed BPOP on credit watch negative due to the general economic environment in Puerto Rico February Moody's placed BPOP on review for downgrade May Moody’s downgraded BPOP to B2; outlook negative May Moody’s, as part of a recalibration of their bank rating model, upgraded BPOP from B2 to B1 with a stable outlook July On 7/10 S&P affirmed BPOP’s rating while maintaining a negative outlook March Moody’s placed BPOP on review for possible upgrade due to a change in their bank rating methodology September Moody’s downgraded BPOP to B2; outlook negative April S&P revised outlook to positive October Fitch and S&P change outlook to negative from stable |
 Investor Presentation First Quarter 2018 |