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Condensed consolidating financial information of guarantor and issuers of registered guaranteed securities
 3 Months Ended
Mar. 31, 2019
Disclosure Text Block  
Condensed Consolidating Financial Information of Guarantor and Issuers of Registeres Guranteed Securities

Note 35 – 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, 2019 and December 31, 2018, and the results of their operations and cash flows for periods ended March 31, 2019 and 2018.

PNA is an operating, wholly-owned subsidiary of PIHC and is the holding company of its wholly-owned subsidiaries: Equity One, Inc. and Popular Bank (“PB”), including PB’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, 2019
All other
Popular Inc.PNAsubsidiaries andEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.eliminationsentriesConsolidated
Assets:
Cash and due from banks$19,856$-$376,565$(19,863)$376,558
Money market investments131,47612,2684,813,658(143,268)4,814,134
Trading account debt securities, at fair value--39,217-39,217
Debt securities available-for-sale, at
fair value--13,542,695-13,542,695
Debt securities held-to-maturity, at
amortized cost8,7262,83587,894-99,455
Equity securities9,06720149,619(199)158,507
Investment in subsidiaries5,784,0521,735,151-(7,519,203)-
Loans held-for-sale, at lower of cost or
fair value--43,985-43,985
Loans held-in-portfolio32,427-26,769,9055,95526,808,287
Less - Unearned income--160,579-160,579
Allowance for loan losses261-550,367-550,628
Total loans held-in-portfolio, net32,166-26,058,9595,95526,097,080
Premises and equipment, net3,394-554,123-557,517
Other real estate146-125,332-125,478
Accrued income receivable38418162,441(46)162,797
Mortgage servicing assets, at fair value--167,813-167,813
Other assets87,30426,9281,707,403(21,907)1,799,728
Goodwill--671,123(1)671,122
Other intangible assets6,536-17,985-24,521
Total assets$6,083,107$1,777,220$48,518,812$(7,698,532)$48,680,607
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing$-$-$9,065,967$(19,863)$9,046,104
Interest bearing--31,977,002(143,268)31,833,734
Total deposits--41,042,969(163,131)40,879,838
Assets sold under agreements to repurchase--200,871-200,871
Other short-term borrowings--42-42
Notes payable585,16894,070497,250-1,176,488
Other liabilities57,7461,639946,433(22,510)983,308
Total liabilities642,91495,70942,687,565(185,641)43,240,547
Stockholders' equity:
Preferred stock50,160---50,160
Common stock1,043256,307(56,309)1,043
Surplus4,304,5124,173,0215,790,610(9,955,103)4,313,040
Retained earnings (accumulated deficit)1,803,172(2,464,720)304,5522,151,6401,794,644
Treasury stock, at cost(394,715)--(133)(394,848)
Accumulated other comprehensive loss,
net of tax(323,979)(26,792)(320,222)347,014(323,979)
Total stockholders' equity5,440,1931,681,5115,831,247(7,512,891)5,440,060
Total liabilities and stockholders' equity$6,083,107$1,777,220$48,518,812$(7,698,532)$48,680,607

Condensed Consolidating Statement of Financial Condition (Unaudited)
At December 31, 2018
All other
Popular, Inc.PNAsubsidiaries andEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.eliminationsentriesConsolidated
Assets:
Cash and due from banks$68,022$-$394,035$(68,022)$394,035
Money market investments176,25615,2884,170,792(191,288)4,171,048
Trading account debt securities, at fair value--37,787-37,787
Debt securities available-for-sale, at
fair value--13,300,184-13,300,184
Debt securities held-to-maturity, at
amortized cost8,7262,83590,014-101,575
Equity securities6,69320149,012(141)155,584
Investment in subsidiaries5,704,1191,700,082-(7,404,201)-
Loans held-for-sale, at lower of cost or
fair value--51,422-51,422
Loans held-in-portfolio32,678-26,625,0805,95526,663,713
Less - Unearned income--155,824-155,824
Allowance for loan losses155-569,193-569,348
Total loans held-in-portfolio, net32,523-25,900,0635,95525,938,541
Premises and equipment, net3,394-566,414-569,808
Other real estate146-136,559-136,705
Accrued income receivable284116165,767(145)166,022
Mortgage servicing assets, at fair value--169,777-169,777
Other assets76,07327,6391,626,119(15,697)1,714,134
Goodwill--671,123(1)671,122
Other intangible assets6,559-20,274-26,833
Total assets$6,082,795$1,745,980$47,449,342$(7,673,540)$47,604,577
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing$-$-$9,217,058$(68,022)$9,149,036
Interest bearing--30,752,291(191,288)30,561,003
Total deposits--39,969,349(259,310)39,710,039
Assets sold under agreements to repurchase--281,529-281,529
Other short-term borrowings--42-42
Notes payable584,85194,063577,188-1,256,102
Other liabilities62,7993,287871,733(16,011)921,808
Total liabilities647,65097,35041,699,841(275,321)42,169,520
Stockholders' equity:
Preferred stock50,160---50,160
Common stock1,043256,307(56,309)1,043
Surplus4,357,0794,172,9835,790,324(9,954,780)4,365,606
Retained earnings (accumulated deficit)1,660,258(2,479,503)327,7132,143,2631,651,731
Treasury stock, at cost(205,421)--(88)(205,509)
Accumulated other comprehensive loss,
net of tax(427,974)(44,852)(424,843)469,695(427,974)
Total stockholders' equity5,435,1451,648,6305,749,501(7,398,219)5,435,057
Total liabilities and stockholders' equity$6,082,795$1,745,980$47,449,342$(7,673,540)$47,604,577

Condensed Consolidating Statement of Operations (Unaudited)
Quarter ended March 31, 2019
All other
Popular, Inc.PNAsubsidiaries andEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.eliminationsentriesConsolidated
Interest and dividend income:
Dividend income from subsidiaries$202,300$-$-$(202,300)$-
Loans588-447,125-447,713
Money market investments1,1225129,220(1,173)29,220
Investment securities1544680,836-81,036
Total interest and dividend income204,16497557,181(203,473)557,969
Interest expense:
Deposits--71,999(1,173)70,826
Short-term borrowings--1,600-1,600
Long-term debt9,6321,5573,391-14,580
Total interest expense9,6321,55776,990(1,173)87,006
Net interest income (expense) 194,532(1,460)480,191(202,300)470,963
Provision for loan losses106-41,719-41,825
Net interest income (expense)
after provision for loan losses194,426(1,460)438,472(202,300)429,138
Service charges on deposit accounts--38,691-38,691
Other service fees1-64,406(100)64,307
Mortgage banking activities--9,926-9,926
Net gain, including impairment on equity securities587-859(13)1,433
Net profit on trading account debt securities--260-260
Adjustments (expense) to indemnity reserves
on loans sold--(93)-(93)
Other operating income (expense)5,169(1,267)18,015(11)21,906
Total non-interest income (expense)5,757(1,267)132,064(124)136,430
Operating expenses:
Personnel costs18,327-124,790-143,117
Net occupancy expenses1,047-22,535(45)23,537
Equipment expenses672119,032-19,705
Other taxes62-11,600-11,662
Professional fees2,6892784,850(100)87,466
Communications114-5,735-5,849
Business promotion782-13,892-14,674
FDIC deposit insurance--4,806-4,806
Other real estate owned (OREO) expenses --2,677-2,677
Other operating expenses(21,339)1353,512(571)31,615
Amortization of intangibles24-2,288-2,312
Total operating expenses2,37841345,717(716)347,420
Income (loss) before income tax and equity in
(losses) earnings of subsidiaries197,805(2,768)224,819(201,708)218,148
Income tax (benefit) expense -(581)50,58621850,223
Income (loss) before equity in (losses) earnings of
subsidiaries197,805(2,187)174,233(201,926)167,925
Equity in undistributed (losses) earnings of
subsidiaries(29,880)12,145-17,735-
Net income$167,925$9,958$174,233$(184,191)$167,925
Comprehensive income, net of tax$271,920$28,018$278,854$(306,872)$271,920

Condensed Consolidating Statement of Operations (Unaudited)
Quarter ended March 31, 2018
All other
Popular, Inc.PNAsubsidiaries andEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.eliminationsentriesConsolidated
Interest and dividend income:
Dividend income from subsidiaries$25,000$-$-$(25,000)$-
Loans525-373,065(6)373,584
Money market investments842122,285(843)22,285
Investment securities1478156,981-57,209
Total interest and dividend income26,51482452,331(25,849)453,078
Interest expense:
Deposits--39,531(843)38,688
Short-term borrowings-62,013(6)2,013
Long-term debt13,1182,6923,520-19,330
Total interest expense13,1182,69845,064(849)60,031
Net interest income (expense)13,396(2,616)407,267(25,000)393,047
Provision for loan losses- non-covered loans(21)-69,354-69,333
Provision for loan losses- covered loans--1,730-1,730
Net interest income (expense) after provision for
loan losses13,417(2,616)336,183(25,000)321,984
Service charges on deposit accounts--36,455-36,455
Other service fees--60,847(245)60,602
Mortgage banking activities--12,068-12,068
Net (loss) gain, including impairment on equity securities(42)-(584)(20)(646)
Net (loss) profit on trading account debt securities--(198)-(198)
Adjustments (expense) to indemnity reserves
on loans sold--(2,926)-(2,926)
FDIC loss-share expense--(8,027)-(8,027)
Other operating income3,74575111,687(14)16,169
Total non-interest income3,703751109,322(279)113,497
Operating expenses:
Personnel costs14,911-110,941-125,852
Net occupancy expenses990-21,812-22,802
Equipment expenses508116,697-17,206
Other taxes41110,860-10,902
Professional fees3,6443179,555(245)82,985
Communications112-5,794-5,906
Business promotion398-11,611-12,009
FDIC deposit insurance--6,920-6,920
Other real estate owned (OREO) expenses --6,131-6,131
Other operating expenses(18,164)1447,720(606)28,964
Amortization of intangibles--2,325-2,325
Total operating expenses2,44047320,366(851)322,002
Income (loss) before income tax and equity
in earnings (losses) of subsidiaries14,680(1,912)125,139(24,428)113,479
Income tax benefit-54321,38123122,155
Income (loss) before equity in earnings (losses)
of subsidiaries14,680(2,455)103,758(24,659)91,324
Equity in undistributed earnings (losses) of subsidiaries76,64415,852-(92,496)-
Net income (loss)$91,324$13,397$103,758$(117,155)$91,324
Comprehensive loss, net of tax$(20,862)$(8,785)$(9,094)$17,879$(20,862)

Condensed Consolidating Statement of Cash Flows

Quarter ended March 31, 2019
All other
Popular, Inc.PNAsubsidiariesEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.and eliminationsentriesConsolidated
Cash flows from operating activities:
Net income$167,925$9,958$174,233$(184,191)$167,925
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Equity in earnings of subsidiaries,
net of dividends or distributions29,880(12,145)-(17,735)-
Provision for loan losses 106-41,719-41,825
Amortization of intangibles24-2,288-2,312
Depreciation and amortization of premises and
equipment188-14,107-14,295
Net accretion of discounts and amortization
of premiums and deferred fees 3167(39,136)-(38,813)
Share-based compensation5,369-1,561-6,930
Fair value adjustments on mortgage servicing rights--3,825-3,825
Adjustments (expense) to indemnity reserves on
loans sold--93-93
Earnings from investments under the
equity method, net of dividends or distributions(4,587)1,267(5,707)-(9,027)
Deferred income tax (benefit) expense-(581)46,15921845,796
Loss (gain) on:
Disposition of premises and equipment and other
productive assets40-(2,305)-(2,265)
Sale of loans, including valuation adjustments on
loans held for sale and mortgage banking activities--(4,058)-(4,058)
Sale of foreclosed assets, including write-downs--(3,772)-(3,772)
Acquisitions of loans held-for-sale--(44,748)-(44,748)
Proceeds from sale of loans held-for-sale--13,802-13,802
Net originations on loans held-for-sale--(53,231)-(53,231)
Net decrease (increase) in:
Trading debt securities--105,838-105,838
Equity securities(2,374)-(1,988)-(4,362)
Accrued income receivable(99)973,326(100)3,224
Other assets(1,337)2624,0285,99228,709
Net (decrease) increase in:
Interest payable(4,594)(1,551)(870)100(6,915)
Pension and other postretirement benefits
obligations--5,297-5,297
Other liabilities(9,019)(98)(84,870)(6,598)(100,585)
Total adjustments13,913(12,978)21,358(18,123)4,170
Net cash provided by (used in) operating activities181,838(3,020)195,591(202,314)172,095
Cash flows from investing activities:
Net decrease (increase) in money market investments 45,0003,020(643,117)(48,020)(643,117)
Purchases of investment securities:
Available-for-sale--(3,123,508)-(3,123,508)
Equity--(1,297)58(1,239)
Proceeds from calls, paydowns, maturities and
redemptions of investment securities:
Available-for-sale--3,006,779-3,006,779
Held-to-maturity--2,587-2,587
Proceeds from sale of investment securities:
Equity--2,679-2,679
Net repayments (disbursements) on loans 252-(79,221)-(78,969)
Proceeds from sale of loans--7,806-7,806
Acquisition of loan portfolios --(129,875)-(129,875)
Return of capital from equity method investments--1,371-1,371
Acquisition of premises and equipment(231)-(19,207)-(19,438)
Proceeds from sale of:
Premises and equipment and other productive assets3-5,972-5,975
Foreclosed assets--26,119-26,119
Net cash provided by (used in) investing activities45,0243,020(942,912)(47,962)(942,830)
Cash flows from financing activities:
Net increase (decrease) in:
Deposits--1,073,52696,1801,169,706
Assets sold under agreements to repurchase--(80,659)-(80,659)
Other short-term borrowings--1-1
Payments of notes payable --(59,526)-(59,526)
Principal payments of finance leases--(439)-(439)
Proceeds from issuance of common stock3,981-(1,005)-2,976
Dividends paid to parent company--(202,300)202,300-
Dividends paid(25,713)---(25,713)
Net payments for repurchase of common stock(250,271)-2(45)(250,314)
Payments related to tax withholding for
share-based compensation(2,805)---(2,805)
Net cash (used in) provided by financing activities(274,808)-729,600298,435753,227
Net decrease in cash and due from banks, and restricted cash(47,946)-(17,721)48,159(17,508)
Cash and due from banks, and restricted cash at beginning of period68,278-402,995(68,022)403,251
Cash and due from banks, and restricted cash at end of period$20,332$-$385,274$(19,863)$385,743

Condensed Consolidating Statement of Cash Flows

Quarter ended March 31, 2018
All other
Popular, Inc.PNAsubsidiariesEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.and eliminationsentriesConsolidated
Cash flows from operating activities:
Net income$91,324$13,397$103,758$(117,155)$91,324
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Equity in earnings of subsidiaries,
net of dividends or distributions(76,644)(15,852)-92,496-
Provision for loan losses (21)-71,084-71,063
Amortization of intangibles--2,325-2,325
Depreciation and amortization of premises and
equipment187-12,649-12,836
Net accretion of discounts and amortization
of premiums and deferred fees 5217(7,534)-(7,006)
Share-based compensation2,361-751-3,112
Impairment losses on long-lived assets--272-272
Fair value adjustments on mortgage servicing rights--4,307-4,307
FDIC loss-share expense--8,027-8,027
Adjustments (expense) to indemnity reserves on
loans sold--2,926-2,926
Earnings from investments under the
equity method, net of dividends or distributions(3,745)(751)(2,874)-(7,370)
Deferred income tax (benefit) expense -(282)10,80923110,758
(Gain) loss on:
Disposition of premises and equipment and
other productive assets(5)-(67)-(72)
Proceeds from insurance claims--(258)-(258)
Sale of loans, including valuation adjustments on
loans held for sale and mortgage banking activities--(1,116)-(1,116)
Sale of foreclosed assets, including write-downs--(99)-(99)
Acquisitions of loans held-for-sale--(47,335)-(47,335)
Proceeds from sale of loans held-for-sale--12,036-12,036
Net originations on loans held-for-sale--(48,375)-(48,375)
Net decrease (increase) in:
Trading debt securities--94,099(101)93,998
Equity securities(443)-313-(130)
Accrued income receivable(34)8156,4233456,504
Other assets(2,287)2837,77375836,272
Net (decrease) increase in:
Interest payable(7,875)(2,680)(25)(34)(10,614)
Pension and other postretirement benefits
obligations--1,225-1,225
Other liabilities(3,434)3(89,748)(1,350)(94,529)
Total adjustments(91,419)(19,446)117,58892,03498,757
Net cash (used in) provided by operating activities(95)(6,049)221,346(25,121)190,081
Cash flows from investing activities:
Net decrease (increase) in money market investments 29,0001,748(1,728,858)(30,748)(1,728,858)
Purchases of investment securities:
Available-for-sale--(1,311,382)-(1,311,382)
Equity--(9,853)123(9,730)
Proceeds from calls, paydowns, maturities and
redemptions of investment securities:
Available-for-sale--1,016,203-1,016,203
Held-to-maturity--2,639-2,639
Proceeds from sale of investment securities:
Equity--9,745-9,745
Net (disbursements) repayments on loans (4,168)-93,3494,30193,482
Acquisition of loan portfolios --(161,295)-(161,295)
Net payments (to) from FDIC under loss-sharing
agreements--(1,263)-(1,263)
Capital contribution to subsidiary(10,000)--10,000-
Acquisition of premises and equipment(143)-(12,903)-(13,046)
Proceeds from insurance claims--258-258
Proceeds from sale of:
Premises and equipment and other productive assets--3,033-3,033
Foreclosed assets--25,746-25,746
Net cash provided by (used in) investing activities14,6891,748(2,074,581)(16,324)(2,074,468)
Cash flows from financing activities:
Net increase (decrease) in:
Deposits--1,638,95339,0761,678,029
Assets sold under agreements to repurchase--(10,860)-(10,860)
Other short-term borrowings-4,30189,992(4,301)89,992
Payments of notes payable --(12,680)-(12,680)
Proceeds from issuance of notes payable--40,000-40,000
Proceeds from issuance of common stock4,712---4,712
Dividends paid to parent company--(25,000)25,000-
Dividends paid(26,138)---(26,138)
Net payments for repurchase of common stock(191)--(2)(193)
Return of capital to parent company--10,000(10,000)-
Payments related to tax withholding for
share-based compensation(1,223)---(1,223)
Net cash (used in) provided by financing activities(22,840)4,3011,730,40549,7731,761,639
Net decrease in cash and due from banks,
and restricted cash(8,246)-(122,830)8,328(122,748)
Cash and due from banks, and restricted cash at beginning
of period48,120462412,225(48,178)412,629
Cash and due from banks, and restricted cash
at end of period$39,874$462$289,395$(39,850)$289,881