Subsequent events

6 Months Ended

Jun. 30, 2018

Disclosure Text Block

Subsequent Events

Note 34 ─ Subsequent events

Acquisition of Wells Fargo’s Auto Finance Business in Puerto Rico 

On August 1, 2018, Popular Auto, LLC (“Popular Auto”), Banco Popular de Puerto Rico’s auto finance subsidiary, completed the previously announced acquisition of certain assets and the assumption of certain liabilities related to Wells Fargo & Company’s (“Wells Fargo”) auto finance business in Puerto Rico (“Reliable”).

Popular Auto acquired approximately $1.6 billion in retail auto loans and $360 million in primarily auto-related commercial loans. Reliable will continue operating as a Division of Popular Auto in parallel with Popular Auto’s existing operations for a period of time after closing to provide continuity of service to Reliable customers while allowing Popular to assess best practices before completing the integration of the two operations. Substantially all Reliable employees have received and accepted offers of employment from Popular Auto.

Wells Fargo retained approximately $385 million in retail auto loans as part of the transaction and has entered into a loan servicing agreement with Popular Auto with respect to such loans.

The Corporation will account for this transaction as a business combination under U.S. GAAP, in accordance with ASC 805.

Redemption of Trust Preferred Securities

On August 6, 2018, Popular North America, Inc. delivered a redemption notice to the Property Trustee for BanPonce Trust I, which will result in the redemption of its $52,865,000 liquidation amount of 8.327% Capital Securities, Series A ($1,000 liquidation amount per security), CUSIP No. 066915AA7 (being all of its 8.327% Capital Securities, Series A outstanding), on September 7, 2018. The redemption price of each security will be equal to 100% of the liquidation amount of the securities plus accumulated and unpaid distributions up to and excluding the redemption date.