Popular, Inc. Announces Fourth Quarter 2019 Financial Results

 
 



  • Net income of $166.8 million in Q4 2019, compared to net income of $165.3 million in Q3 2019.
  • Net income of $671.1 million for the year 2019, compared to net income and adjusted net income for the year 2018 of $618.2 million and $487.3 million, respectively.
  • Net interest margin of 3.83% in Q4 2019, compared to 4.00% in Q3 2019.
  • Credit Quality:
    • Non-performing loans held-in-portfolio (“NPLs”) decreased by $30.0 million from Q3 2019; NPLs to loans ratio at 1.9% vs. 2.1% in Q3 2019;
    • Net charge-offs (“NCOs”) increased by $14.0 million from Q3 2019; NCOs at 1.21% of average loans held-in-portfolio vs. 1.01% in Q3 2019;
    • Allowance for loan losses to loans held-in-portfolio at 1.74% vs. 1.90% in Q3 2019; and
    • Allowance for loan losses to NPLs at 90.5% vs. 91.9% in Q3 2019.
  • Common Equity Tier 1 ratio of 17.78%, Common Equity per Share of $62.42 and Tangible Book Value per Share of $55.10 at December 31, 2019.
Martes, Enero 28, 2020 8:00 am EST

Dateline:

SAN JUAN, Puerto Rico

Public Company Information:

NASDAQ:
BPOP
PR7331741061

SAN JUAN, Puerto Rico--(BUSINESS WIRE)--Popular, Inc. (the “Corporation,” “Popular,” “we,” “us,” “our”) (NASDAQ:BPOP) reported net income of $166.8 million for the quarter ended December 31, 2019, compared to net income of $165.3 million for the quarter ended September 30, 2019.

Ignacio Alvarez, President and Chief Executive Officer, said: “2019 was an outstanding year during which we achieved record core earnings. During the year, we increased EPS and TBV by 14% and 17%, respectively, and grew our customer base in Puerto Rico by 45,000, reflecting the strength of our franchise.

While we exhibited strong performance throughout the year, the results for the fourth quarter reflected the cumulative impact of the three recent interest rate cuts. The reduction in rates negatively impacted our net interest income and margin for the quarter. However, the fundamentals of our business remained solid with fee income demonstrating continued strength and achieving loan growth in both Puerto Rico and the U.S. We continue to pursue opportunities for expense management and operational efficiencies as we implement additional investments in our people, technology and businesses to position the institution for strong and sustainable long-term results.

We are proud of our accomplishments during 2019 and optimistic about our prospects for 2020. Yet, we are deeply saddened by the seismic events that have impacted the southern part of the island this month, including a magnitude 6.4 earthquake on January 7th. The damage is mainly concentrated in sixteen municipalities in the southern region. Fortunately, none of our employees suffered physical harm and our facilities are in sound condition. We resumed operations on the day following the earthquake and have provided uninterrupted service since then. While the impact on our operations was limited, many residents in the south suffered significant damages to their homes, public schools remain closed and the ensuing aftershocks have made it difficult for people in the region to regain a sense of normalcy.

As we have done in the past, we swiftly responded through our foundation, which has close ties with non-profit organizations and communities in the south, to bring immediate assistance to affected areas. A little more than two years ago Puerto Rico faced, and managed through, Hurricane Maria, an island-wide disaster with different and widespread challenges. Although the scale of these events is not comparable to Maria, we remain attentive to the impact it could have in some sectors of the economy, such as hospitality. The people of Puerto Rico are demonstrating overwhelming solidarity and support and are facing this situation with the resolve to move forward. We will continue working with them, confident that Puerto Rico will once again demonstrate its spirit and its ability to rebuild.”

Significant Events

Common Stock Repurchase Plan

On December 12, 2019, the Corporation completed its previously announced $250 million accelerated share repurchase transaction (“ASR”) with respect to its common stock, a component of its 2019 capital plan. In connection therewith, the Corporation received an initial delivery of 3,500,000 shares of common stock during the first quarter of 2019 and received 1,165,607 additional shares of common stock on December 12, 2019. The final number of shares delivered at settlement was based on the average daily volume weighted average price of its common stock, net of a discount, during the term of the ASR, which amounted to $53.58. The Corporation accounted for the ASR as a treasury stock transaction.

Planned Capital Actions for 2020

On January 9, 2020, the Corporation announced the following actions as part of its capital plan for 2020: (i) an increase in the Corporation’s quarterly common stock dividend from $0.30 per share to $0.40 per share, commencing with the dividend payable in the second quarter of 2020, subject to the approval of the Corporation’s Board of Directors; and (ii) common stock repurchases of up to $500 million.

Redemption of Series B Preferred Stock

On January 24, 2020, the Corporation announced that on February 24, 2020, the Corporation will redeem all outstanding shares of its 8.25% Non-Cumulative Monthly Income Preferred Stock, Series B (“Series B Preferred Stock”). The Series B Preferred Stock will be redeemed at the redemption price of $25.00 per share, plus $0.1375 in accrued and unpaid dividends on each share, for a total payment per share in the amount of $25.1375. 

Earnings Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

Quarters ended

 

Years ended

(Dollars in thousands, except per share information)

31-Dec-19

30-Sep-19

31-Dec-18

 

31-Dec-19

31-Dec-18

Net interest income

$467,424

$476,991

$476,225

 

$1,891,694

$1,734,877

Provision for loan losses

47,224

36,539

42,568

 

165,779

226,342

Provision for loan losses - covered loans [1]

-

-

-

 

-

1,730

Net interest income after provision for loan losses

420,200

440,452

433,657

 

1,725,915

1,506,805

FDIC loss-share income

-

-

-

 

-

94,725

Other non-interest income

152,415

142,712

153,167

 

569,883

557,769

Operating expenses

390,572

376,475

396,455

 

1,477,482

1,421,562

Income before income tax

182,043

206,689

190,369

 

818,316

737,737

Income tax expense

15,258

41,370

83,966

 

147,181

119,579

Net income

$166,785

$165,319

$106,403

 

$671,135

$618,158

Net income applicable to common stock

$165,854

$164,389

$105,472

 

$667,412

$614,435

Net income per common share - basic

$1.72

$1.71

$1.06

 

$6.89

$6.07

Net income per common share - diluted

$1.72

$1.70

$1.05

 

$6.88

$6.06

[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that were covered under the terminated FDIC Shared-Loss Agreements.

Net interest income

Net interest income for the quarter ended December 31, 2019 was $467.4 million, compared to $477.0 million for the previous quarter. Net interest margin was 3.83% for the quarter, compared to 4.00% in the previous quarter.

The decrease of $9.6 million in net interest income is mostly related to the decrease in interest rates that occurred during the third and fourth quarters of 2019, resulting in a quarter-over-quarter reduction of approximately 50 basis points in average Fed Funds and U.S. Treasury Bill rates. These decreases in rates, in combination with the composition of earning assets, are the main drivers of the 17 basis point reduction in net interest margin during the quarter. Average earning assets increased $1.0 billion quarter over quarter mainly in overnight money market investments. These investments, even though accretive to net interest income, have a lower yield when compared to the rest of the earning assets therefore impacting negatively the net interest margin. The most significant variances in the quarter were:

  • Lower income from money market, trading and investments by $6.6 million due to lower yields by 21 basis points mainly related to short-term investments in U.S. Treasury bills and overnight funds at the Federal Reserve. The decrease in yield was partially offset by a higher volume of earning assets; and
  • lower interest income from the commercial loan portfolio by $5.1 million or a 22 basis points decrease in yield, resulting from lower market rates in the adjustable rate portfolio and originations in a declining interest rate environment.

Partially offset by:

  • Lower interest expense on deposits driven by a 5 basis point reduction in interest costs, partially offset by a higher average balance in P.R. public sector and commercial deposits at Banco Popular de Puerto Rico (“BPPR”) and digital channel deposits at Popular Bank (“Popular U.S.” or “PB”).

BPPR’s net interest income amounted to $402.9 million for the quarter ended December 31, 2019, compared to $412.2 million in the previous quarter. Net interest margin for the fourth quarter of 2019 was 4.08%, a decrease of 18 basis points when compared to 4.26% for the previous quarter. The decrease in net interest margin was impacted by a higher average volume of money market investments, which carry a lower yield, a decrease in the yield of the investment portfolio, commercial and consumer loan portfolios resulting from lower market rates, as mentioned above, and a reduction of $1.0 million in the discount amortization of the auto loan portfolio acquired from Wells Fargo in 2018. BPPR’s earning assets yielded 4.62%, compared to 4.83% in the previous quarter, while the cost of interest-bearing deposits was 0.73%, or 4 basis points lower than the 0.77% reported in the previous quarter. Total cost of deposits for the quarter was 0.57%, compared to 0.60% reported in the third quarter of 2019.

Net interest income for PB was $73.6 million, for the quarter ended December 31, 2019, compared to $74.4 million during the previous quarter. The decrease of $0.8 million in net interest income was primarily due to a lower yield on loans, mainly variable rate commercial loans, partially offset by a lower cost of deposits mainly driven by a change in the deposit mix. Net interest margin for the quarter was 3.18%, a reduction of 11 basis points when compared to 3.29% for the previous quarter. Earning assets yielded 4.42%, compared to 4.60% in the previous quarter, while the cost of interest-bearing deposits was 1.55%, compared to 1.63% in the previous quarter. Total cost of deposits for the quarter was 1.34% compared to 1.40% reported in the third quarter.

Non-interest income

Non-interest income increased by $9.7 million to $152.4 million for the quarter ended December 31, 2019, compared to $142.7 million for the quarter ended September 30, 2019. The increase in non-interest income was primarily driven by:

  • Higher other services by $4.3 million, mainly at the BPPR segment, due to higher insurance fees by $3.0 million principally resulting from $4.2 million in contingent insurance commissions recognized during the fourth quarter and higher debit and credit card fees by $1.0 million as a result of higher interchange fees due to higher transactional volumes;
  • higher income from mortgage banking activities by $3.0 million mainly due to the lower unfavorable fair value adjustments on mortgage servicing rights (“MSRs”) by $3.3 million due to lower estimated prepayments, partially offset by a decrease in projected late fee income; and
  • a favorable variance in adjustments to indemnity reserves on previously sold loans of $4.7 million mainly due to lower provision related to loans previously sold with credit recourse.

These variances were partially offset by:

  • Lower other operating income by $2.8 million principally due to lower net earnings from the combined portfolio of investments under the equity method by $1.7 million and lower modification fees received for the successful completion of loss mitigation alternatives by $1.5 million.

Refer to Table B for further details.

Operating expenses

Operating expenses for the fourth quarter of 2019 totaled $390.6 million, an increase of $14.1 million when compared to the third quarter of 2019. The increase in operating expenses was driven primarily by:

  • Higher personnel cost by $10.6 million due to higher commissions and annual incentives and an increase in headcount;
  • higher professional fees by $4.6 million, mainly due to higher advisory expenses by $3.5 million related to Corporate initiatives, and higher audit and tax services by $1.2 million mainly related to work on new accounting pronouncements;
  • higher business promotion by $4.8 million due to higher advertising expense by $1.7 million, which includes seasonal initiatives, an increase of $0.9 million in donations and higher customer reward program expense by $0.6 million;
  • higher credit and debit card processing volume, interchange and other expenses by $1.0 million; and
  • higher FDIC insurance expense by $2.2 million, mainly due to the small bank assessment credit received at Popular Bank during the third quarter of 2019.

These increases were partially offset by:

  • Lower other operating expenses by $9.5 million due to lower operational losses by $5.9 million, including legal contingency reserves and a $2.6 million loss related to an undeveloped corporate site which was placed for sale during the third quarter of 2019.

Full-time equivalent employees were 8,560 as of December 31, 2019, compared to 8,457 as of September 30, 2019.

For a breakdown of operating expenses by category refer to Table B.

Income taxes

For the quarter ended December 31, 2019, the Corporation recorded an income tax expense of $15.3 million, compared to $41.4 million for the previous quarter. During the fourth quarter of 2019, the Corporation recorded a tax benefit of approximately $18 million related to the revision of the amount of exempt income earned in prior years, that resulted in the amendment of income tax returns for BPPR for the years 2015 to 2017. During the third quarter of 2019 a tax benefit of $4.1 million was recorded related to revisions to the amount of exempt income for the current year. The effective tax rate (“ETR”) for the fourth quarter of 2019 was 8%. Excluding the exempt income adjustment discussed above, the ETR for the quarter would have been 18%.

The ETR of the Corporation is impacted by the composition and source of its taxable income. For the year 2020, the Corporation expects its consolidated effective tax rate to be within a range of 19% to 21%.

Credit Quality

During the fourth quarter of 2019, the Corporation’s credit quality metrics continued to show favorable trends. The credit metrics of our BPPR operations reflected lower non-performing loans, lower NPL inflows and stable NCOs. The U.S. operations net charge-offs increase was related to the taxi medallion portfolio. The Corporation continues to be attentive to the performance of its portfolios and related credit metrics. The following presents credit quality results for the fourth quarter of 2019:

  • Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $22.9 million quarter-over-quarter, as the prior quarter included the impact of $24.6 million of certain troubled debt restructured commercial real estate loans at BPPR.
  • Total non-performing loans held-in-portfolio decreased by $30.0 million from the third quarter of 2019. The BPPR segment NPLs decreased by $21.6 million with reductions in the commercial and mortgage NPLs of $19.1 million and $12.3 million, respectively. This reduction was in part offset by higher consumer NPLs by $9.1 million, mostly related to auto loans. The PB segment NPLs decreased by $8.4 million mostly due to a construction loan sold during the quarter. At December 31, 2019, the ratio of NPLs to total loans held-in-portfolio was 1.9% compared to 2.1% in the third quarter of 2019.
  • NCOs increased by $14.0 million from the third quarter of 2019, primarily driven by higher PB commercial NCOs of $15.5 million, mostly related to the taxi medallion loan portfolio which had a carrying value of $19.1 million at December 31, 2019. The BPPR NCOs remained stable quarter-over-quarter. The Corporation’s ratio of annualized net charge-offs to average loans held-in-portfolio was 1.21%, compared to 1.01% in the third quarter of 2019. Refer to Table J for further information on net charge-offs and related ratios.
  • The allowance for loan and lease losses (“ALLL”) decreased by $34.7 million from the third quarter of 2019 to $477.7 million. The BPPR segment ALLL decreased by $18.1 million, principally driven by lower reserves for the commercial portfolio, in part offset by higher reserves for the auto loans portfolio. PB’s ALLL decreased by $16.5 million driven by taxi medallion portfolio charge-offs.
  • The general and specific reserves totaled $392.5 million and $85.2 million, respectively, at quarter-end, compared with $416.5 million and $95.8 million, respectively, as of September 30, 2019. The ratio of the allowance for loan losses to loans held-in-portfolio was 1.74% in the fourth quarter of 2019, compared to 1.90% in the previous quarter. The ratio of the allowance for loan losses to NPLs held-in-portfolio stood at 90.5% compared to 91.9% in the previous quarter.
  • The provision for loan losses for the fourth quarter of 2019 increased by $10.7 million from the prior quarter. The provision for the BPPR and PB segments increased by $6.4 million and $4.3 million, respectively. The provision to net charge-offs ratio was 57.7% in the fourth quarter of 2019, compared to 53.9% in the previous quarter.

Non-Performing Assets

 

 

 

 

 

(Unaudited)

 

 

 

 

 

(In thousands)

31-Dec-19

 

30-Sep-19

 

31-Dec-18

Total non-performing loans held-in-portfolio

$527,841

 

$557,792

 

$611,087

Other real estate owned (“OREO”)

122,072

 

117,928

 

136,705

Total non-performing assets

$649,913

 

$675,720

 

$747,792

Net charge-offs for the quarter

$81,881

 

$67,840

 

$106,938

 

 

 

 

 

 

 

Ratios:

 

 

 

 

 

Loans held-in-portfolio

$27,406,873

 

$27,007,975

 

$26,507,889

Non-performing loans held-in-portfolio to loans held-in-portfolio

1.93%

 

2.07%

 

2.31%

Allowance for loan losses to loans held-in-portfolio

1.74

 

1.90

 

2.15

Allowance for loan losses to non-performing loans, excluding loans held-for-sale

90.50

 

91.86

 

93.17

Refer to Table H for additional information.

 

 

 

 

 

Provision for Loan Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Quarters ended

 

Years ended

(In thousands)

 

31-Dec-19

 

30-Sep-19

 

31-Dec-18

 

31-Dec-19

31-Dec-18

Provision for loan losses:

 

 

 

 

 

 

 

 

 

BPPR

 

$40,843

 

$34,479

 

$43,461

 

$135,751

$196,461

Popular U.S.

 

6,381

 

2,060

 

(893)

 

30,028

29,881

Total provision for loan losses - non-covered loans

 

$47,224

 

$36,539

 

$42,568

 

$165,779

$226,342

Provision for loan losses - covered loans

 

-

 

-

 

-

 

-

1,730

Total provision for loan losses

 

$47,224

 

$36,539

 

$42,568

 

$165,779

$228,072

Credit Quality by Segment

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

(In thousands)

Quarters ended

 

BPPR

 

31-Dec-19

 

30-Sep-19

 

31-Dec-18

 

Provision for loan losses

 

$40,843

 

 

$34,479

 

 

$43,461

 

 

Net charge-offs

 

58,962

 

 

59,900

 

 

96,479

 

 

Total non-performing loans held-in-portfolio

499,200

 

 

520,773

 

 

568,098

 

 

Allowance / loans held-in-portfolio

2.14

%

 

2.26

%

 

2.55

%

 

 

 

 

 

 

 

 

 

 

Quarters ended

 

Popular U.S.

 

31-Dec-19

 

30-Sep-19

 

31-Dec-18

 

Provision for loan losses

 

$6,381

 

 

$2,060

 

 

$(893

)

 

Net charge-offs

 

22,919

 

 

7,940

 

 

10,459

 

 

Total non-performing loans held-in-portfolio

 

28,641

 

 

37,019

 

 

42,989

 

 

Allowance / loans held-in-portfolio

0.62

%

 

0.87

%

 

0.94

%

 

Preliminary impact estimate of the adoption of the current expected credit loss model (“CECL”)

CECL became effective on January 1, 2020. Based on its preliminary analysis and the information currently available, the Corporation has estimated an increase in its allowance for loan and lease losses ranging from $320 million to $350 million, or 67% to 73%. This increase is driven by the Puerto Rico mortgage, auto and credit cards loans portfolio. This increase will be reflected as a decrease to the opening balance of retained earnings, net of income taxes, except for approximately $14 million related to loans currently accounted under the Accounting Standards Codification (“ASC”) Subtopic 310-30, which would result in a reclassification between balance sheet accounts. Based on the Corporation’s preliminary estimates, the day-one impact of the adoption of CECL would result in a reduction in Tangible Book Value of approximately $2, or 4%.

As part of the adoption of CECL, the Corporation has made the election to break the existing pools of purchased credit impaired (“PCI”) loans previously accounted for under the ASC Subtopic 310-30 guidance. These loans will be accounted for on an individual loan basis under the purchased credit deteriorated loans (“PCD”) accounting methodology under CECL. Following existing accounting guidance, PCI loans have been excluded from non-performing status. Upon transition to the individual loan measurement, these loans will no longer be excluded from non-performing status, resulting in an increase of $283 million in reported NPLs during the first quarter of 2020. This increase includes $156 million in loans currently over 90 days past due and $127 million in loans that are not delinquent in their payment terms but would be reported as non-performing due to other credit quality considerations.

The Corporation expects to continue to be well capitalized under the Basel III regulatory framework after the adoption of CECL. The Corporation will avail itself of the option to phase in over a period of three years the day-one effects on regulatory capital arising from the adoption of CECL. Considering the phase-in period provided by the regulatory framework, the estimated decrease of the Common Equity Tier One and Total Capital ratios would be of approximately 25bps.

 

Financial Condition Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

(In thousands)

31-Dec-19

 

30-Sep-19

 

31-Dec-18

Cash and money market investments

$3,650,597

 

$5,670,645

 

$4,565,083

Investment securities

17,946,343

 

16,773,578

 

13,595,130

Loans

27,406,873

 

27,007,975

 

26,507,889

Total assets

52,115,324

 

52,480,415

 

47,604,577

Deposits

43,758,606

 

44,166,195

 

39,710,039

Borrowings

1,294,986

 

1,379,767

 

1,537,673

Total liabilities

46,098,545

 

46,571,967

 

42,169,520

Stockholders’ equity

6,016,779

 

5,908,448

 

5,435,057

Total assets decreased by $0.4 billion from the third quarter of 2019, driven by:

  • A decrease of $2.0 billion in cash and money market investments, mainly due to purchases of U.S. Treasury securities.

Partially offset by:

  • An increase of $1.2 billion in debt securities available-for-sale mainly due to purchases of U.S. Treasury securities, partially offset by maturities and paydowns of mortgage-backed securities; and
  • an increase of $0.4 billion in loans held-in-portfolio due to growth of commercial loans, auto loans and leases, and credit cards at the BPPR segment as a result of the acquisition detailed below, coupled with an increase at PB across its commercial, construction and mortgage loan portfolios.

Total liabilities decreased by $0.5 billion from the third quarter of 2019, mainly due to:

  • A decrease of $0.4 billion in deposits, mainly from the Puerto Rico public sector at BPPR; and
  • A decrease of $0.1 billion in notes payable due to maturities of Federal Home Loan Bank advances at PB.

Stockholders’ equity increased by approximately $108.3 million from the third quarter of 2019, principally due to net income for the quarter of $166.8 million, partially offset by lower unrealized gains on debt securities available-for-sale by $16.9 million, the pension and postretirement benefit plan adjustment of $13.7 million and declared dividends of $29.0 million on common stock and $0.9 million in dividends on preferred stock.

Common equity tier-1 ratio (“CET1”), common equity per share and tangible book value per share were 17.78%, $62.42 and $55.10, respectively, at December 31, 2019, compared to 17.46%, $60.57 and $53.41 at September 30, 2019. Refer to Table A for capital ratios.

Acquisition of credit cards portfolio

On December 31, 2019, BPPR acquired, in an all cash transaction, a credit card portfolio with an aggregate principal amount of $74 million for approximately $78 million. Additionally, BPPR has acquired the rights to issue the JetBlue co-branded loyalty credit card program in Puerto Rico. BPPR plans on launching the new credit card product during the second half of 2020. The acquired credit card portfolio will continue to be serviced by the seller on an interim basis until the system conversion is completed.

Refer to Table C for the Statements of Financial Condition.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation those about Popular’s 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 and regulatory proceedings and new accounting standards on the Corporation’s financial condition and results of operations. 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, 2018, our Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, and in our Form 10-K for the year ended December 31, 2019 to be filed with the Securities and Exchange Commission. 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.

About Popular, Inc.

Popular, Inc. is the leading financial institution in Puerto Rico, by both assets and deposits, and ranks among the top 50 U.S. bank holding companies by assets. Founded in 1893, Banco Popular de Puerto Rico, Popular’s principal subsidiary, provides retail, mortgage and commercial banking services in Puerto Rico and the U.S. Virgin Islands. Popular also offers in Puerto Rico auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. In the mainland United States, Popular provides retail, mortgage and commercial banking services through its New York-chartered banking subsidiary, Popular Bank, which has branches located in New York, New Jersey and Florida.

Conference Call

Popular will hold a conference call to discuss its financial results today Tuesday, January 28, 2020 at 10:00 a.m. Eastern Time. The call will be open to the public and broadcasted 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 the dial-in telephone number 1-866-235-1201 or 1-412-902-4127. There is no charge to access the call.

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, February 28, 2020. The replay dial-in is: 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10137877.

An electronic version of this press release can be found at the Corporation’s website: www.popular.com.

 

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 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 - POPULAR U.S. OPERATIONS

 

Table N - Reconciliation to GAAP Financial Measures

 

Table P - Adjusted Net Income for the Quarter and Year Ended December 31, 2018 (Non-GAAP)

POPULAR, INC.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table A - Selected Ratios and Other Information

(Unaudited)

 

 

 

 

 

Quarters ended

Years ended

 

31-Dec-19

30-Sep-19

31-Dec-18

31-Dec-19

31-Dec-18

Basic EPS

$1.72

$1.71

$1.06

$6.89

$6.07

Diluted EPS

$1.72

$1.70

$1.05

$6.88

$6.06

Average common shares outstanding

96,183,126

96,357,117

99,933,184

96,848,835

101,142,258

Average common shares outstanding - assuming dilution

96,330,785

96,478,327

100,114,358

96,997,800

101,308,643

Common shares outstanding at end of period

95,589,629

96,714,664

99,942,845

95,589,629

99,942,845

Market value per common share

$58.75

$54.08

$47.22

$58.75

$47.22

Market capitalization - (In millions)

$5,616

$5,230

$4,719

$5,616

$4,719

Return on average assets

1.27%

1.29%

0.88%

1.33%

1.33%

Return on average common equity

11.27%

11.44%

7.57%

11.78%

11.39%

Net interest margin

3.83%

4.00%

4.25%

4.03%

4.01%

Common equity per share

$62.42

$60.57

$53.88

$62.42

$53.88

Tangible common book value per common share (non-GAAP) [1]

$55.10

$53.41

$46.90

$55.10

$46.90

Tangible common equity to tangible assets (non-GAAP) [1]

10.24%

9.97%

9.99%

10.24%

9.99%

Average return on tangible common equity [1]

12.79%

13.00%

8.70%

13.43%

13.03%

Tier 1 capital

17.78%

17.46%

16.90%

17.78%

16.90%

Total capital

20.34%

20.05%

19.54%

20.34%

19.54%

Tier 1 leverage

10.05%

9.87%

9.88%

10.05%

9.88%

Common Equity Tier 1 capital

17.78%

17.46%

16.90%

17.78%

16.90%

[1] Refer to Table N for reconciliation to GAAP financial measures.

POPULAR, INC.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table B - Consolidated Statement of Operations

(Unaudited)

 

 

Quarters ended

Variance

Quarter ended

Variance

Years ended

 

 

 

 

Q4 2019

 

Q4 2019

 

 

(In thousands, except per share information)

31-Dec-19

30-Sep-19

vs. Q3 2019

31-Dec-18

vs. Q4 2018

31-Dec-19

31-Dec-18

Interest income:

 

 

 

 

 

 

 

 

Loans

$447,736

$453,315

$(5,579)

$455,238

$(7,502)

$1,802,968

$1,645,736

 

Money market investments

18,950

19,119

(169)

25,030

(6,080)

89,823

111,288

 

Investment securities

93,183

99,542

(6,359)

79,287

13,896

368,002

264,824

 

Total interest income

559,869

571,976

(12,107)

559,555

314

2,260,793

2,021,848

Interest expense:

 

 

 

 

 

 

 

 

Deposits

76,823

78,760

(1,937)

65,215

11,608

304,858

204,265

 

Short-term borrowings

1,272

1,572

(300)

1,823

(551)

6,100

7,210

 

Long-term debt

14,350

14,653

(303)

16,292

(1,942)

58,141

75,496

 

Total interest expense

92,445

94,985

(2,540)

83,330

9,115

369,099

286,971

Net interest income

467,424

476,991

(9,567)

476,225

(8,801)

1,891,694

1,734,877

Provision for loan losses - non-covered loans

47,224

36,539

10,685

42,568

4,656

165,779

226,342

Provision for loan losses - covered loans

-

-

-

-

-

-

1,730

Net interest income after provision for loan losses

420,200

440,452

(20,252)

433,657

(13,457)

1,725,915

1,506,805

Service charges on deposit accounts

41,656

40,969

687

38,973

2,683

160,933

150,677

Other service fees

75,559

71,309

4,250

70,226

5,333

285,206

258,020

Mortgage banking activities

13,448

10,492

2,956

19,394

(5,946)

32,093

52,802

Net loss on sale of debt securities

-

(20)

20

-

-

(20)

-

Net gain (loss), including impairment, on equity securities

332

213

119

(2,039)

2,371

2,506

(2,081)

Net profit (loss) on trading account debt securities

17

295

(278)

91

(74)

994

(208)

Net gain on sale of loans, including valuation adjustments on loans held-for-sale

-

-

-

33

(33)

-

33

Adjustments (expense) to indemnity reserves on loans sold

1,321

(3,411)

4,732

(6,477)

7,798

(343)

(12,959)

FDIC loss-share income

-

-

-

-

-

-

94,725

Other operating income

20,082

22,865

(2,783)

32,966

(12,884)

88,514

111,485

 

Total non-interest income

152,415

142,712

9,703

153,167

(752)

569,883

652,494

Operating expenses:

 

 

 

 

 

 

 

Personnel costs

 

 

 

 

 

 

 

 

Salaries

91,161

90,016

1,145

86,569

4,592

351,788

326,509

 

Commissions, incentives and other bonuses

27,007

22,360

4,647

23,315

3,692

97,764

90,000

 

Pension, postretirement and medical insurance

11,281

10,356

925

11,698

(417)

41,804

39,660

 

Other personnel costs, including payroll taxes

28,878

24,950

3,928

51,465

(22,587)

99,269

106,819

 

Total personnel costs

158,327

147,682

10,645

173,047

(14,720)

590,625

562,988

Net occupancy expenses

24,908

24,595

313

24,500

408

96,339

88,329

Equipment expenses

21,591

21,596

(5)

18,504

3,087

84,215

71,788

Other taxes

13,386

14,028

(642)

12,583

803

51,653

46,284

Professional fees

 

 

 

 

 

 

 

 

Collections, appraisals and other credit related fees

3,704

4,131

(427)

4,043

(339)

16,300

14,700

 

Programming, processing and other technology services

63,029

63,092

(63)

55,089

7,940

247,332

216,128

 

Legal fees, excluding collections

2,527

2,415

112

4,118

(1,591)

12,877

19,072

 

Other professional fees

33,876

28,923

4,953

25,846

8,030

107,902

99,944

 

Total professional fees

103,136

98,561

4,575

89,096

14,040

384,411

349,844

Communications

5,765

5,881

(116)

5,765

-

23,450

23,107

Business promotion

23,214

18,365

4,849

21,653

1,561

75,372

65,918

FDIC deposit insurance

5,172

2,923

2,249

5,223

(51)

18,179

27,757

 

Loss on early extinguishment of debt

-

-

-

12,522

(12,522)

-

12,522

 

Other real estate owned (OREO) expense (recovery)

569

(185)

754

2,310

(1,741)

4,298

23,338

 

Credit and debit card processing, volume, interchange

 

 

 

 

 

 

 

 

and other expenses

10,486

9,450

1,036

4,790

5,696

38,059

27,979

Other operating expenses

 

 

 

 

 

 

 

 

Operational losses

2,916

8,832

(5,916)

9,103

(6,187)

21,414

35,798

 

All other

18,814

22,348

(3,534)

15,006

3,808

80,097

76,584

 

Total other operating expenses

21,730

31,180

(9,450)

24,109

(2,379)

101,511

112,382

Amortization of intangibles

2,288

2,399

(111)

2,353

(65)

9,370

9,326

 

Total operating expenses

390,572

376,475

14,097

396,455

(5,883)

1,477,482

1,421,562

Income before income tax

182,043

206,689

(24,646)

190,369

(8,326)

818,316

737,737

Income tax expense

15,258

41,370

(26,112)

83,966

(68,708)

147,181

119,579

Net income

$166,785

$165,319

$1,466

$106,403

$60,382

$671,135

$618,158

Net income applicable to common stock

$165,854

$164,389

$1,465

$105,472

$60,382

$667,412

$614,435

Net income per common share - basic

$1.72

$1.71

$0.01

$1.06

$0.66

$6.89

$6.07

Net income per common share - diluted

$1.72

$1.70

$0.02

$1.05

$0.67

$6.88

$6.06

Dividends Declared per Common Share

$0.30

$0.30

$-

$0.25

$0.05

$1.20

$1.00

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table C - Consolidated Statement of Financial Condition

(Unaudited)

 

 

 

 

 

 

Variance

 

 

 

 

 

 

Q4 2019 vs.

(In thousands)

31-Dec-19

30-Sep-19

31-Dec-18

Q3 2019

Assets:

 

 

 

 

Cash and due from banks

$388,311

$502,060

$394,035

$(113,749)

Money market investments

3,262,286

5,168,585

4,171,048

(1,906,299)

Trading account debt securities, at fair value

40,321

36,303

37,787

4,018

Debt securities available-for-sale, at fair value

17,648,473

16,479,110

13,300,184

1,169,363

Debt securities held-to-maturity, at amortized cost

97,662

97,707

101,575

(45)

Equity securities

159,887

160,458

155,584

(571)

Loans held-for-sale, at lower of cost or fair value

59,203

56,370

51,422

2,833

Loans held-in-portfolio

27,587,856

27,181,241

26,663,713

406,615

 

 

Less: Unearned income

180,983

173,266

155,824

7,717

 

 

Allowance for loan losses

477,708

512,365

569,348

(34,657)

 

 

Total loans held-in-portfolio, net

26,929,165

26,495,610

25,938,541

433,555

Premises and equipment, net

556,650

547,063

569,808

9,587

Other real estate

122,072

117,928

136,705

4,144

Accrued income receivable

180,871

164,778

166,022

16,093

Mortgage servicing assets, at fair value

150,906

150,652

169,777

254

Other assets

1,819,615

1,811,190

1,714,134

8,425

Goodwill

671,122

671,122

671,122

-

Other intangible assets

28,780

21,479

26,833

7,301

Total assets

$52,115,324

$52,480,415

$47,604,577

$(365,091)

Liabilities and Stockholders’ Equity:

 

 

 

 

Liabilities:

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Non-interest bearing

$9,160,173

$8,771,970

$9,149,036

$388,203

 

 

Interest bearing

34,598,433

35,394,225

30,561,003

(795,792)

 

 

Total deposits

43,758,606

44,166,195

39,710,039

(407,589)

Assets sold under agreements to repurchase

193,378

213,097

281,529

(19,719)

Other short-term borrowings

-

-

42

-

Notes payable

1,101,608

1,166,670

1,256,102

(65,062)

Other liabilities

1,044,953

1,026,005

921,808

18,948

Total liabilities

46,098,545

46,571,967

42,169,520

(473,422)

Stockholders’ equity:

 

 

 

 

Preferred stock

50,160

50,160

50,160

-

Common stock

1,044

1,044

1,043

-

Surplus

4,447,412

4,317,556

4,365,606

129,856

Retained earnings

2,147,915

2,071,198

1,651,731

76,717

Treasury stock

(459,814)

(392,630)

(205,509)

(67,184)

Accumulated other comprehensive loss, net of tax

(169,938)

(138,880)

(427,974)

(31,058)

 

 

Total stockholders’ equity

6,016,779

5,908,448

5,435,057

108,331

Total liabilities and stockholders’ equity

$52,115,324

$52,480,415

$47,604,577

$(365,091)

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters ended

 

Variance

 

 

 

 

31-Dec-19

 

30-Sep-19

 

31-Dec-18

 

Q4 2019 vs. Q3 2019

 

Q4 2019 vs. Q4 2018

 

($ 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

$21,465

$112.1

2.08

%

$20,617

$118.7

2.29

%

$18,278

$104.3

2.27

%

$848

($6.6)

(0.21)

%

$3,187

$7.8

(0.19)

%

 

Loans not covered under loss sharing agreements with the FDIC:

 

 

Commercial

12,276

173.9

5.62

 

12,167

179.0

5.84

 

11,967

182.1

6.04

 

109

(5.1)

(0.22)

 

309

(8.2)

(0.42)

 

 

 

Construction

781

12.3

6.27

 

809

13.3

6.50

 

905

15.2

6.65

 

(28)

(1.0)

(0.23)

 

(124)

(2.9)

(0.38)

 

 

 

Mortgage

7,109

90.9

5.11

 

7,127

91.2

5.12

 

7,149

90.1

5.04

 

(18)

(0.3)

(0.01)

 

(40)

0.8

0.07

 

 

 

Consumer

2,942

86.2

11.62

 

2,918

86.5

11.76

 

2,815

85.0

11.98

 

24

(0.3)

(0.14)

 

127

1.2

(0.36)

 

 

 

Auto

2,935

68.7

9.28

 

2,867

68.2

9.44

 

2,588

69.2

10.60

 

68

0.5

(0.16)

 

347

(0.5)

(1.32)

 

 

 

Lease financing

1,038

15.7

6.06

 

1,004

15.1

6.03

 

913

13.6

5.97

 

34

0.6

0.03

 

125

2.1

0.09

 

 

Total loans

27,081

447.7

6.57

 

26,892

453.3

6.70

 

26,337

455.2

6.87

 

189

(5.6)

(0.13)

 

744

(7.5)

(0.30)

 

 

Total interest earning assets

$48,546

$559.8

4.59

%

$47,509

$572.0

4.79

%

$44,615

$559.5

4.99

%

$1,037

(12.2)

(0.20)

%

$3,931

$0.3

(0.40)

%

 

 

Allowance for loan losses

(515)

 

 

 

(532)

 

 

 

(621)

 

 

 

17

 

 

 

106

 

 

 

 

 

Other non-interest earning assets

3,943

 

 

 

3,964

 

 

 

3,925

 

 

 

(21)

 

 

 

18

 

 

 

 

Total average assets

$51,974

 

 

 

$50,941

 

 

 

$47,919

 

 

 

$1,033

 

 

 

$4,055

 

 

 

Liabilities and Stockholders' Equity:

 

Interest bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market

$16,312

$36.0

0.88

%

$15,958

$37.7

0.94

%

$13,848

$30.4

0.87

%

$354

$(1.7)

(0.06)

%

$2,464

$5.6

0.01

%

 

 

Savings

10,830

13.3

0.49

 

10,241

11.8

0.46

 

9,728

9.9

0.40

 

589

1.5

0.03

 

1,102

3.4

0.09

 

 

 

Time deposits

7,749

27.5

1.41

 

7,829

29.3

1.48

 

7,419

24.9

1.33

 

(80)

(1.8)

(0.07)

 

330

2.6

0.08

 

 

 

Total interest-bearing deposits

34,891

76.8

0.87

 

34,028

78.8

0.92

 

30,995

65.2

0.83

 

863

(2.0)

(0.05)

 

3,896

11.6

0.04

 

 

Borrowings

1,345

15.6

4.65

 

1,440

16.2

4.51

 

1,658

18.1

4.38

 

(95)

(0.6)

0.14

 

(313)

(2.5)

0.27

 

 

 

Total interest-bearing liabilities

36,236

92.4

1.01

 

35,468

95.0

1.06

 

32,653

83.3

1.01

 

768

(2.6)

(0.05)

 

3,583

9.1

-

 

 

 

Net interest spread

 

 

3.58

%

 

 

3.73

%

 

 

3.98

%

 

 

(0.15)

%

 

 

(0.40)

%

 

Non-interest bearing deposits

8,894

 

 

 

8,794

 

 

 

8,895

 

 

 

100

 

 

 

(1)

 

 

 

 

Other liabilities

957

 

 

 

926

 

 

 

799

 

 

 

31

 

 

 

158

 

 

 

 

Stockholders' equity

5,887

 

 

 

5,753

 

 

 

5,572

 

 

 

134

 

 

 

315

 

 

 

 

 

Total average liabilities and stockholders' equity

$51,974

 

 

 

$50,941

 

 

 

$47,919

 

 

 

$1,033

 

 

 

$4,055

 

 

 

Net interest income / margin non-taxable equivalent basis

$467.4

3.83

%

 

$477.0

4.00

%

 

$476.2

4.25

%

 

($9.6)

(0.17)

%

 

($8.8)

(0.42)

%

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE

(Unaudited)

 

 

 

Years ended

 

 

 

 

 

 

 

 

31-Dec-19

 

31-Dec-18

 

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

$20,138

$457.8

2.27

%

$18,212

$376.1

2.07

%

$1,926

$81.7

0.20

%

 

Loans not covered under loss-sharing agreements with the FDIC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

12,172

712.9

5.86

 

11,698

686.4

5.87

 

474

26.5

(0.01)

 

 

 

Construction

801

52.8

6.59

 

915

58.3

6.37

 

(114)

(5.5)

0.22

 

 

 

Mortgage

7,121

364.4

5.12

 

7,119

360.4

5.06

 

2

4.0

0.06

 

 

 

Consumer

2,885

340.8

11.81

 

2,847

327.9

11.52

 

38

12.9

0.29

 

 

 

Auto

2,839

272.2

9.59

 

1,617

160.9

9.95

 

1,222

111.3

(0.36)

 

 

 

Lease financing

989

59.9

6.06

 

867

51.9

5.98

 

122

8.0

0.08

 

 

Total loans

26,807

1,803.0

6.73

 

25,063

1,645.8

6.57

 

1,744

157.2

0.16

 

 

Total interest earning assets

$46,945

$2,260.8

4.82

%

$43,275

$2,021.9

4.67

%

$3,670

$238.9

0.15

%

 

 

Allowance for loan losses

(544)

 

 

 

(635)

 

 

 

91

 

 

 

 

 

Other non-interest earning assets

3,940

 

 

 

3,999

 

 

 

(59)

 

 

 

 

Total average assets

$50,341

 

 

 

$46,639

 

 

 

$3,702

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market

$15,326

$146.7

0.96

%

$12,688

$80.7

0.64

%

$2,638

$66.0

0.32

%

 

 

Savings

10,249

45.5

0.44

 

9,439

31.9

0.34

 

810

13.6

0.10

 

 

 

Time deposits

7,770

112.7

1.45

 

7,570

91.7

1.21

 

200

21.0

0.24

 

 

 

Total interest-bearing deposits

33,345

304.9

0.91

 

29,697

204.3

0.69

 

3,648

100.6

0.22

 

 

Borrowings

1,425

64.2

4.51

 

1,879

82.7

4.40

 

(454)

(18.5)

0.11

 

 

 

Total interest-bearing liabilities

34,770

369.1

1.06

 

31,576

287.0

0.91

 

3,194

82.1

0.15

 

 

 

Net interest spread

 

 

3.76

%

 

 

3.76

%

 

 

-

%

 

Non-interest bearing deposits

8,873

 

 

 

8,790

 

 

 

83

 

 

 

 

Other liabilities

984

 

 

 

831

 

 

 

153

 

 

 

 

Stockholders' equity

5,714

 

 

 

5,442

 

 

 

272

 

 

 

 

 

Total average liabilities and stockholders' equity

$50,341

 

 

 

$46,639

 

 

 

$3,702

 

 

 

Net interest income / margin non-taxable equivalent basis

 

$1,891.7

4.03

%

 

$1,734.9

4.01

%

 

$156.8

0.02

%

Popular, Inc.

 

 

 

 

 

 

 

 

 

Financial Supplement to Fourth Quarter 2019 Earnings Release

 

 

 

 

Table F - Mortgage Banking Activities and Other Service Fees

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Banking Activities

 

 

 

 

 

 

 

 

 

 

 

Quarters ended

Variance

Years ended

Variance

(In thousands)

 

31-Dec-19

30-Sep-19

31-Dec-18

Q4 2019
vs.Q3 2019

Q4 2019
vs.Q4 2018

31-Dec-19

31-Dec-18

2019 vs.
2018

Mortgage servicing fees, net of fair value adjustments:

 

 

 

 

 

 

 

 

 

 

Mortgage servicing fees

 

$11,552

$11,797

$12,327

$(245)

$(775)

$46,952

$49,532

$(2,580)

 

Mortgage servicing rights fair value adjustments

 

(1,577)

(4,842)

4,646

3,265

(6,223)

(27,430)

(8,477)

(18,953)

Total mortgage servicing fees, net of fair value adjustments

 

9,975

6,955

16,973

3,020

(6,998)

19,522

41,055

(21,533)

Net gain on sale of loans, including valuation on loans held-for-sale

 

4,164

5,421

2,893

(1,257)

1,271

18,817

9,424

9,393

Trading account (loss) profit:

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on outstanding derivative positions

 

-

227

(122)

(227)

122

-

(253)

253

 

Realized (losses) gains on closed derivative positions

 

(691)

(2,111)

(350)

1,420

(341)

(6,246)

2,576

(8,822)

Total trading account (loss) profit

 

(691)

(1,884)

(472)

1,193

(219)

(6,246)

2,323

(8,569)

Total mortgage banking activities

 

$13,448

$10,492

$19,394

$2,956

$(5,946)

$32,093

$52,802

$(20,709)

 

 

 

 

 

 

 

 

 

 

 

Other Service Fees

 

 

 

 

 

 

 

 

 

 

 

Quarters ended

Variance

Years ended

Variance

(In thousands)

 

31-Dec-19

30-Sep-19

31-Dec-18

Q4 2019
vs.Q3 2019

Q4 2019
vs.Q4 2018

31-Dec-19

31-Dec-18

2019 vs.
2018

Other service fees:

 

 

 

 

 

 

 

 

 

 

Debit card fees

 

$12,219

$11,719

$11,868

$500

$351

$47,142

$46,174

$968

 

Insurance fees

 

17,574

14,608

14,362

2,966

3,212

62,226

54,030

8,196

 

Credit card fees

 

26,155

25,625

23,827

530

2,328

98,860

89,693

9,167

 

Sale and administration of investment products

 

6,367

5,714

5,824

653

543

23,072

21,895

1,177

 

Trust fees

 

5,263

5,193

4,677

70

586

20,694

19,880

814

 

Other fees

 

7,981

8,450

9,668

(469)

(1,687)

33,212

26,348

6,864

Total other service fees

 

$75,559

$71,309

$70,226

$4,250

$5,333

$285,206

$258,020

$27,186

Popular, Inc.

 

 

 

 

 

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table G - Loans and Deposits

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Loans - Ending Balances

 

 

 

 

 

 

 

 

 

Variance

(In thousands)

31-Dec-19

30-Sep-19

31-Dec-18

Q4 2019 vs.Q3
2019

Q4 2019 vs.Q4
2018

Loans held-in-portfolio:

 

 

 

 

Commercial

$12,312,751

$12,208,449

$12,043,019

$104,302

$269,732

Construction

831,092

754,056

779,449

77,036

51,643

Legacy [1]

22,105

23,192

25,949

(1,087)

(3,844)

Lease financing

1,059,507

1,022,484

934,773

37,023

124,734

Mortgage

7,183,532

7,168,619

7,235,258

14,913

(51,726)

Auto

2,917,522

2,847,758

2,608,785

69,764

308,737

Consumer

3,080,364

2,983,417

2,880,656

96,947

199,708

Total loans held-in-portfolio

$27,406,873

$27,007,975

$26,507,889

$398,898

$898,984

Loans held-for-sale:

 

 

 

 

 

Mortgage

59,203

56,370

51,422

2,833

7,781

Total loans held-for-sale

$59,203

$56,370

$51,422

$2,833

$7,781

Total loans

$27,466,076

$27,064,345

$26,559,311

$401,731

$906,765

[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 Popular U.S. segment.

Deposits - Ending Balances

 

 

 

 

 

 

 

 

Variance

(In thousands)

31-Dec-19

30-Sep-19

31-Dec-18

Q4 2019 vs. Q3
2019

Q4 2019 vs.Q4
2018

Demand deposits [1]

$16,566,145

$19,191,657

$16,077,023

$(2,625,512)

$489,122

Savings, NOW and money market deposits (non-brokered)

19,169,899

16,778,332

15,616,247

2,391,567

3,553,652

Savings, NOW and money market deposits (brokered)

347,765

400,049

400,004

(52,284)

(52,239)

Time deposits (non-brokered)

7,546,621

7,614,393

7,500,544

(67,772)

46,077

Time deposits (brokered CDs)

128,176

181,764

116,221

(53,588)

11,955

Total deposits

$43,758,606

$44,166,195

$39,710,039

$(407,589)

$4,048,567

[1] Includes interest and non-interest bearing demand deposits.

 

 

 

 

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table H - Non-Performing Assets

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Variance

(Dollars in thousands)

31-Dec-19

As a % of
loans HIP by
category

 

30-Sep-19

As a % of
loans HIP by
category

 

31-Dec-18

As a % of
loans HIP by
category

 

Q4 2019 vs.
Q3 2019

Q4 2019 vs.
Q4 2018

Non-accrual loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial

$150,760

1.2

%

$169,697

1.4

%

$184,026

1.5

%

$(18,937)

$(33,266)

Construction

145

-

 

10,334

1.4

 

13,848

1.8

 

(10,189)

(13,703)

Legacy [1]

1,999

9.0

 

2,318

10.0

 

2,627

10.1

 

(319)

(628)

Lease financing

3,657

0.3

 

2,733

0.3

 

3,313

0.4

 

924

344

Mortgage

294,799

4.1

 

305,542

4.3

 

334,598

4.6

 

(10,743)

(39,799)

Auto

31,148

1.1

 

22,954

0.8

 

24,050

0.9

 

8,194

7,098

Consumer

45,333

1.5

 

44,214

1.5

 

48,625

1.7

 

1,119

(3,292)

Total non-performing loans held-in-portfolio

527,841

1.9

%

557,792

2.1

%

611,087

2.3

%

(29,951)

(83,246)

Other real estate owned (“OREO”)

122,072

 

 

117,928

 

 

136,705

 

 

4,144

(14,633)

Total non-performing assets [2]

$649,913

 

 

$675,720

 

 

$747,792

 

 

$(25,807)

$(97,879)

Accruing loans past due 90 days or more [3] [4]

$460,133

 

 

$476,814

 

 

$612,543

 

 

$(16,681)

$(152,410)

Ratios:

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets to total assets

1.25

%

 

1.29

%

 

1.57

%

 

 

 

Non-performing loans held-in-portfolio to loans held-in-portfolio

1.93

 

 

2.07

 

 

2.31

 

 

 

 

Allowance for loan losses to loans held-in-portfolio

1.74

 

 

1.90

 

 

2.15

 

 

 

 

Allowance for loan losses to non-performing loans, excluding loans held-for-sale

90.50

 

 

91.86

 

 

93.17

 

 

 

 

[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 Popular U.S. segment.

[2] There were no non-performing loans held-for-sale as of December 31, 2019, September 30, 2019 and December 31, 2018.

[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 include loans rebooked, which were previously pooled into GNMA securities amounting to $103 million (September 30, 2019 - $99 million; December 31, 2018 - $134 million). Under the GNMA program, issuers such as BPPR have the option but not the obligation to repurchase loans that are 90 days or more past due. For accounting purposes, these loans subject to the repurchase option are required to be reflected on the financial statements of BPPR with an offsetting liability. These balances include $213 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of December 31, 2019 (September 30, 2019 - $241 million; December 31, 2018 - $283 million). Furthermore, the Corporation has approximately $65 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 (September 30, 2019 - $65 million; December 31, 2018 - $69 million).

[4] The carrying value of loans accounted for under ASC Subtopic 310-30 that are contractually 90 days or more past due was $153 million at December 31, 2019 (September 30, 2019 - $189 million; December 31, 2018 - $216 million). This amount is excluded from the above table as the loans’ accretable yield interest recognition is independent from the underlying contractual loan delinquency status.

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table I - Activity in Non-Performing Loans

(Unaudited)

 

 

 

 

 

 

 

 

Commercial loans held-in-portfolio:

 

 

Quarter ended

Quarter ended

 

 

31-Dec-19

30-Sep-19

(In thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance NPLs

$166,366

$3,331

$169,697

$149,139

$6,209

$155,348

Plus:

 

 

 

 

 

 

 

New non-performing loans

14,650

248

14,898

43,650

734

44,384

 

Advances on existing non-performing loans

-

80

80

-

-

-

Less:

 

 

 

 

 

 

 

Non-performing loans transferred to OREO

(4,009)

-

(4,009)

(972)

-

(972)

 

Non-performing loans charged-off

(10,708)

(42)

(10,750)

(2,005)

(1,302)

(3,307)

 

Loans returned to accrual status / loan collections

(14,207)

(112)

(14,319)

(23,446)

(2,310)

(25,756)

 

Non-performing loans sold

(4,837)

-

(4,837)

-

-

-

Ending balance NPLs

$147,255

$3,505

$150,760

$166,366

$3,331

$169,697

 

 

 

 

 

 

 

 

Construction loans held-in-portfolio:

 

 

Quarter ended

Quarter ended

 

 

31-Dec-19

30-Sep-19

(In thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance NPLs

$274

$10,060

$10,334

$1,788

$12,060

$13,848

Plus:

 

 

 

 

 

 

 

Advances on existing non-performing loans

-

-

-

-

215

215

Less:

 

 

 

 

 

 

 

Non-performing loans charged-off

-

-

-

-

(2,215)

(2,215)

 

Loans returned to accrual status / loan collections

(155)

-

(155)

(1,514)

-

(1,514)

 

Non-performing loans sold

-

(10,034)

(10,034)

-

-

-

Ending balance NPLs

$119

$26

$145

$274

$10,060

$10,334

 

 

 

 

 

 

 

 

Mortgage loans held-in-portfolio:

 

 

Quarter ended

Quarter ended

 

 

31-Dec-19

30-Sep-19

(In thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance NPLs

$296,025

$9,517

$305,542

$309,046

$9,350

$318,396

Plus:

 

 

 

 

 

 

 

New non-performing loans

55,379

4,923

60,302

50,260

3,306

53,566

 

Advances on existing non-performing loans

-

39

39

-

37

37

Less:

 

 

 

 

 

 

 

Non-performing loans transferred to OREO

(7,988)

(111)

(8,099)

(6,741)

(197)

(6,938)

 

Non-performing loans charged-off

(4,800)

-

(4,800)

(8,733)

-

(8,733)

 

Loans returned to accrual status / loan collections

(54,908)

(3,277)

(58,185)

(47,807)

(2,979)

(50,786)

Ending balance NPLs

$283,708

$11,091

$294,799

$296,025

$9,517

$305,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-performing loans held-in-portfolio (excluding consumer):

 

 

Quarter ended

Quarter ended

 

 

31-Dec-19

30-Sep-19

(In thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance NPLs

$462,665

$25,226

$487,891

$459,973

$30,088

$490,061

Plus:

 

 

 

 

 

 

 

New non-performing loans

70,029

5,171

75,200

93,910

4,040

97,950

 

Advances on existing non-performing loans

-

121

121

-

290

290

Less:

 

 

 

 

 

 

 

Non-performing loans transferred to OREO

(11,997)

(111)

(12,108)

(7,713)

(197)

(7,910)

 

Non-performing loans charged-off

(15,508)

(42)

(15,550)

(10,738)

(3,514)

(14,252)

 

Loans returned to accrual status / loan collections

(69,270)

(3,710)

(72,980)

(72,767)

(5,481)

(78,248)

 

Non-performing loans sold

(4,837)

(10,034)

(14,871)

-

-

-

Ending balance NPLs [1]

$431,082

$16,621

$447,703

$462,665

$25,226

$487,891

[1] Includes $2.0 million of NPLs related to the legacy portfolio as of December 31, 2019 (September 30, 2019 - $2.3 million).

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended

 

Quarter ended

 

Quarter ended

 

 

 

 

31-Dec-19

 

30-Sep-19

 

31-Dec-18

 

 

 

(Dollars in thousands)

Total

 

Total

 

Total

 

 

 

Balance at beginning of period

$512,365

 

$543,666

 

$633,718

 

 

 

Provision for loan losses

47,224

 

36,539

 

42,568

 

 

 

 

559,589

 

580,205

 

676,286

 

 

 

Net loans charged-off (recovered):

 

 

 

 

 

 

 

 

BPPR

 

 

 

 

 

 

 

 

Commercial

7,301

 

10,632

 

51,659

 

 

 

Construction

(48)

 

(2,986)

 

(720)

 

 

 

Lease financing

2,768

 

3,453

 

1,323

 

 

 

Mortgage

8,770

 

12,689

 

18,041

 

 

 

Consumer

40,171

 

36,112

 

26,176

 

 

 

Total BPPR

58,962

 

59,900

 

96,479

 

 

 

 

 

 

 

 

 

 

 

 

Popular U.S.

 

 

 

 

 

 

 

 

Commercial

19,150

 

3,633

 

1,081

 

 

 

Construction

-

 

2,215

 

5,806

 

 

 

Legacy [1]

(110)

 

(297)

 

(739)

 

 

 

Mortgage

(6)

 

(18)

 

(82)

 

 

 

Consumer

3,885

 

2,407

 

4,393

 

 

 

Total Popular U.S.

22,919

 

7,940

 

10,459

 

 

 

Total loans charged-off - Popular, Inc.

81,881

 

67,840

 

106,938

 

 

 

Balance at end of period

$477,708

 

$512,365

 

$569,348

 

 

 

 

 

 

 

 

 

 

 

 

POPULAR, INC.

 

 

 

 

 

 

 

 

Annualized net charge-offs to average loans held-in-portfolio

1.21

%

1.01

%

1.63

%

 

 

Provision for loan losses to net charge-offs

57.67

%

53.86

%

39.81

%

 

 

BPPR

 

 

 

 

 

 

 

 

Annualized net charge-offs to average loans held-in-portfolio

1.18

%

1.21

%

1.96

%

 

 

Provision for loan losses to net charge-offs

69.27

%

57.56

%

45.05

%

 

 

Popular U.S.

 

 

 

 

 

 

 

 

Annualized net charge-offs to average loans held-in-portfolio

1.29

%

0.45

%

0.63

%

 

 

Provision for loan losses to net charge-offs

27.84

%

25.94

%

(8.54)

%

 

 

[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 Popular U.S. segment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended

 

Year ended

 

(Dollars in thousands)

31-Dec-19

 

31-Dec-18

 

 

Total

 

Non-covered
loans

 

Covered
loans

 

Total

 

Balance at beginning of period

$569,348

 

$590,182

 

$33,244

 

$623,426

 

Provision for loan losses

165,779

 

226,342

 

1,730

 

228,072

 

 

735,127

 

816,524

 

34,974

 

851,498

 

Net loans charged-off (recovered):

 

 

 

 

 

 

 

 

BPPR

 

 

 

 

 

 

 

 

Commercial

34,711

 

65,931

 

-

 

65,931

 

Construction

(3,105)

 

(1,354)

 

-

 

(1,354)

 

Lease financing

9,337

 

6,030

 

-

 

6,030

 

Mortgage

41,355

 

64,822

 

1,364

 

66,186

 

Consumer

127,960

 

105,588

 

-

 

105,588

 

Total BPPR

210,258

 

241,017

 

1,364

 

242,381

 

 

 

 

 

 

 

 

 

 

Popular U.S.

 

 

 

 

 

 

 

 

Commercial

31,408

 

19,784

 

-

 

19,784

 

Construction

2,207

 

5,806

 

-

 

5,806

 

Legacy [1]

(1,399)

 

(2,032)

 

-

 

(2,032)

 

Mortgage

435

 

(371)

 

-

 

(371)

 

Consumer

14,510

 

16,582

 

-

 

16,582

 

Total Popular U.S.

47,161

 

39,769

 

-

 

39,769

 

Total loans charged-off - Popular, Inc.

257,419

 

280,786

 

1,364

 

282,150

 

Balance transferred from covered to non-covered loans

-

 

33,610

 

(33,610)

 

-

 

Balance at end of period

$477,708

 

$569,348

 

$-

 

$569,348

 

 

 

 

 

 

 

 

 

 

POPULAR, INC.

 

 

 

 

 

 

 

 

Annualized net charge-offs to average loans held-in-portfolio

0.96

%

1.13

%

 

 

1.13

%

Provision for loan losses to net charge-offs

64.40

%

80.61

%

 

 

80.83

%

 

 

 

 

 

 

 

 

 

BPPR

 

 

 

 

 

 

 

 

Annualized net charge-offs to average loans held-in-portfolio

1.06

%

1.31

%

 

 

1.31

%

Provision for loan losses to net charge-offs

64.56

%

81.51

%

 

 

81.77

%

 

 

 

 

 

 

 

 

 

Popular U.S.

 

 

 

 

 

 

 

 

Annualized net charge-offs to average loans held-in-portfolio

0.68

%

 

 

 

 

0.61

%

Provision for loan losses to net charge-offs

63.67

%

 

 

 

 

75.14

%

[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 Popular U.S. segment.

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31-Dec-19

(Dollars in thousands)

 

Commercial

 

Construction

 

Legacy [1]

 

Mortgage

 

Lease financing

 

Consumer

 

Total

 

Specific ALLL

 

$20,533

 

$6

 

$-

 

$42,804

 

$61

 

$21,822

 

$85,226

 

Impaired loans

 

$399,549

 

$119

 

$-

 

$531,855

 

$507

 

$100,791

 

$1,032,821

 

Specific ALLL to impaired loans

 

5.14

%

5.04

%

-

%

8.05

%

12.03

%

21.65

%

8.25

%

General ALLL

 

$126,519

 

$4,772

 

$630

 

$78,304

 

$10,707

 

$171,550

 

$392,482

 

Loans held-in-portfolio, excluding impaired loans

 

$11,913,202

 

$830,973

 

$22,105

 

$6,651,677

 

$1,059,000

 

$5,897,095

 

$26,374,052

 

General ALLL to loans held-in-portfolio, excluding impaired loans

 

1.06

%

0.57

%

2.85

%

1.18

%

1.01

%

2.91

%

1.49

%

Total ALLL

 

$147,052

 

$4,778

 

$630

 

$121,108

 

$10,768

 

$193,372

 

$477,708

 

Total loans held-in-portfolio

 

$12,312,751

 

$831,092

 

$22,105

 

$7,183,532

 

$1,059,507

 

$5,997,886

 

$27,406,873

 

ALLL to loans held-in-portfolio

 

1.19

%

0.57

%

2.85

%

1.69

%

1.02

%

3.22

%

1.74

%

[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 Popular U.S. reportable segment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-Sep-19

(Dollars in thousands)

 

Commercial

 

Construction

 

Legacy [1]

 

Mortgage

 

Lease financing

 

Consumer

 

Total

 

Specific ALLL

 

$30,130

 

$57

 

$-

 

$42,868

 

$71

 

$22,720

 

$95,846

 

Impaired loans

 

$409,221

 

$10,334

 

$-

 

$533,317

 

$624

 

$105,117

 

$1,058,613

 

Specific ALLL to impaired loans

 

7.36

%

0.55

%

-

%

8.04

%

11.38

%

21.61

%

9.05

%

General ALLL

 

$160,591

 

$8,507

 

$791

 

$83,759

 

$7,122

 

$155,749

 

$416,519

 

Loans held-in-portfolio, excluding impaired loans

 

$11,799,228

 

$743,722

 

$23,192

 

$6,635,302

 

$1,021,860

 

$5,726,058

 

$25,949,362

 

General ALLL to loans held-in-portfolio, excluding impaired loans

 

1.36

%

1.14

%

3.41

%

1.26

%

0.70

%

2.72

%

1.61

%

Total ALLL

 

$190,721

 

$8,564

 

$791

 

$126,627

 

$7,193

 

$178,469

 

$512,365

 

Total loans held-in-portfolio

 

$12,208,449

 

$754,056

 

$23,192

 

$7,168,619

 

$1,022,484

 

$5,831,175

 

$27,007,975

 

ALLL to loans held-in-portfolio

 

1.56

%

1.14

%

3.41

%

1.77

%

0.70

%

3.06

%

1.90

%

[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 Popular U.S. reportable segment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variance

(Dollars in thousands)

 

Commercial

 

Construction

 

Legacy

 

Mortgage

 

Lease financing

 

Consumer

 

Total

 

Specific ALLL

 

$(9,597)

 

$(51)

 

$-

 

$(64)

 

$(10)

 

$(898)

 

$(10,620)

 

Impaired loans

 

$(9,672)

 

$(10,215)

 

$-

 

$(1,462)

 

$(117)

 

$(4,326)

 

$(25,792)

 

General ALLL

 

$(34,072)

 

$(3,735)

 

$(161)

 

$(5,455)

 

$3,585

 

$15,801

 

$(24,037)

 

Loans held-in-portfolio, excluding impaired loans

 

$113,974

 

$87,251

 

$(1,087)

 

$16,375

 

$37,140

 

$171,037

 

$424,690

 

Total ALLL

 

$(43,669)

 

$(3,786)

 

$(161)

 

$(5,519)

 

$3,575

 

$14,903

 

$(34,657)

 

Total loans held-in-portfolio

 

$104,302

 

$77,036

 

$(1,087)

 

$14,913

 

$37,023

 

$166,711

 

$398,898

 

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

31-Dec-19

Puerto Rico

(In thousands)

Commercial

Construction

Mortgage

Lease financing

Consumer

Total

Allowance for credit losses:

 

 

 

 

 

 

 

Specific ALLL

$20,533

$6

$40,596

$61

$20,259

$81,455

 

General ALLL

110,530

568

75,685

10,707

153,706

351,196

Total ALLL

$131,063

$574

$116,281

$10,768

$173,965

$432,651

Loans held-in-portfolio:

 

 

 

 

 

 

 

Impaired loans

$397,452

$119

$522,469

$507

$91,157

$1,011,704

 

Loans held-in-portfolio, excluding impaired loans

6,863,678

137,351

5,644,279

1,059,000

5,464,220

19,168,528

Total loans held-in-portfolio

$7,261,130

$137,470

$6,166,748

$1,059,507

$5,555,377

$20,180,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-Sep-19

Puerto Rico

(In thousands)

Commercial

Construction

Mortgage

Lease financing

Consumer

Total

Allowance for credit losses:

 

 

 

 

 

 

 

Specific ALLL

$30,130

$57

$40,483

$71

$21,009

$91,750

 

General ALLL

131,429

1,009

81,252

7,122

138,208

359,020

Total ALLL

$161,559

$1,066

$121,735

$7,193

$159,217

$450,770

Loans held-in-portfolio:

 

 

 

 

 

 

 

Impaired

$407,124

$274

$523,876

$624

$95,356

$1,027,254

 

Loans held-in-portfolio, excluding impaired loans

6,761,529

123,798

5,711,700

1,021,860

5,286,441

18,905,328

Total loans held-in-portfolio

$7,168,653

$124,072

$6,235,576

$1,022,484

$5,381,797

$19,932,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variance

(In thousands)

Commercial

Construction

Mortgage

Lease financing

Consumer

Total

Allowance for credit losses:

 

 

 

 

 

 

 

Specific ALLL

$(9,597)

$(51)

$113

$(10)

$(750)

$(10,295)

 

General ALLL

(20,899)

(441)

(5,567)

3,585

15,498

(7,824)

Total ALLL

$(30,496)

$(492)

$(5,454)

$3,575

$14,748

$(18,119)

Loans held-in-portfolio:

 

 

 

 

 

 

 

Impaired

$(9,672)

$(155)

$(1,407)

$(117)

$(4,199)

$(15,550)

 

Loans held-in-portfolio, excluding impaired loans

102,149

13,553

(67,421)

37,140

177,779

263,200

Total loans held-in-portfolio

$92,477

$13,398

$(68,828)

$37,023

$173,580

$247,650

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - POPULAR U.S. OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

31-Dec-19

Popular U.S.

(In thousands)

Commercial

Construction

Legacy

Mortgage

Consumer

Total

Allowance for credit losses:

 

 

 

 

 

 

 

Specific ALLL

$-

$-

$-

$2,208

$1,563

$3,771

 

General ALLL

15,989

4,204

630

2,619

17,844

41,286

Total ALLL

$15,989

$4,204

$630

$4,827

$19,407

$45,057

Loans held-in-portfolio:

 

 

 

 

 

 

 

Impaired loans

$2,097

$-

$-

$9,386

$9,634

$21,117

 

Loans held-in-portfolio, excluding impaired loans

5,049,524

693,622

22,105

1,007,398

432,875

7,205,524

Total loans held-in-portfolio

$5,051,621

$693,622

$22,105

$1,016,784

$442,509

$7,226,641

 

 

 

 

 

 

 

 

 

30-Sep-19

Popular U.S.

(In thousands)

Commercial

Construction

Legacy

Mortgage

Consumer

Total

Allowance for credit losses:

 

 

 

 

 

 

 

Specific ALLL

$-

$-

$-

$2,385

$1,711

$4,096

 

General ALLL

29,162

7,498

791

2,507

17,541

57,499

Total ALLL

$29,162

$7,498

$791

$4,892

$19,252

$61,595

Loans held-in-portfolio:

 

 

 

 

 

 

 

Impaired loans

$2,097

$10,060

$-

$9,441

$9,761

$31,359

 

Loans held-in-portfolio, excluding impaired loans

5,037,699

619,924

23,192

923,602

439,617

7,044,034

Total loans held-in-portfolio

$5,039,796

$629,984

$23,192

$933,043

$449,378

$7,075,393

 

 

 

 

 

 

 

 

 

Variance

(In thousands)

Commercial

Construction

Legacy

Mortgage

Consumer

Total

Allowance for credit losses:

 

 

 

 

 

 

 

Specific ALLL

$-

$-

$-

$(177)

$(148)

$(325)

 

General ALLL

(13,173)

(3,294)

(161)

112

303

(16,213)

Total ALLL

$(13,173)

$(3,294)

$(161)

$(65)

$155

$(16,538)

Loans held-in-portfolio:

 

 

 

 

 

 

 

Impaired loans

$-

$(10,060)

$-

$(55)

$(127)

$(10,242)

 

Loans held-in-portfolio, excluding impaired loans

11,825

73,698

(1,087)

83,796

(6,742)

161,490

Total loans held-in-portfolio

$11,825

$63,638

$(1,087)

$83,741

$(6,869)

$151,248

Popular, Inc.

 

 

 

 

 

 

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table N - Reconciliation to GAAP Financial Measures

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except share or per share information)

31-Dec-19

 

30-Sep-19

 

31-Dec-18

 

Total stockholders’ equity

$6,016,779

 

$5,908,448

 

$5,435,057

 

Less: Preferred stock

(50,160)

 

(50,160)

 

(50,160)

 

Less: Goodwill

(671,122)

 

(671,122)

 

(671,122)

 

Less: Other intangibles

(28,780)

 

(21,479)

 

(26,833)

 

Total tangible common equity

$5,266,717

 

$5,165,687

 

$4,686,942

 

Total assets

$52,115,324

 

$52,480,415

 

$47,604,577

 

Less: Goodwill

(671,122)

 

(671,122)

 

(671,122)

 

Less: Other intangibles

(28,780)

 

(21,479)

 

(26,833)

 

Total tangible assets

$51,415,422

 

$51,787,814

 

$46,906,622

 

Tangible common equity to tangible assets

10.24

%

9.97

%

9.99

%

Common shares outstanding at end of period

95,589,629

 

96,714,664

 

99,942,845

 

Tangible book value per common share

$55.10

 

$53.41

 

$46.90

 

 

 

 

 

 

 

 

 

Quarterly average

 

Total stockholders’ equity

$5,887,125

 

$5,753,047

 

$5,574,503

 

Less: Preferred Stock

(50,160)

 

(50,160)

 

(50,160)

 

Less: Goodwill

(671,121)

 

(663,499)

 

(684,507)

 

Less: Other intangibles

(20,674)

 

(22,957)

 

(28,282)

 

Total tangible equity

$5,145,170

 

$5,016,431

 

$4,811,554

 

Average return on tangible common equity

12.79

%

13.00

%

8.70

%

 

 

 

 

 

 

 

 

Year-to-date average

 

Total stockholders’ equity

$5,713,517

 

 

 

$5,444,152

 

Less: Preferred Stock

(50,160)

 

 

 

(50,160)

 

Less: Goodwill

(669,200)

 

 

 

(646,905)

 

Less: Other intangibles

(23,563)

 

 

 

(31,480)

 

Total tangible equity

$4,970,594

 

 

 

$4,715,607

 

Average return on tangible common equity

13.43

%

 

 

13.03

%

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table P - Adjusted Net Income for the Quarter and Year Ended December 31, 2018 (Non-GAAP)

(Unaudited)

 

Quarter ended

 

31-Dec-18

(In thousands)

Pre-tax

Income tax
effect

Impact on net
income

U.S. GAAP Net income

 

 

$106,403

Non-GAAP Adjustments:

 

 

 

Impact of Law Act No.257[1]

-

27,686

27,686

Adjusted net income (Non-GAAP)

 

 

$134,089

[1]On December 10, 2018, the Governor of Puerto Rico signed into law Act No.257 of 2018, which amended the Puerto Rico Internal Revenue Code, to among other things, reduce the Puerto Rico corporate tax rate from 39% to 37.5%. The resulting adjustments reduced the DTA related to the Corporation's P.R. operations as a result of a lower realizable benefit at the lower tax rate.

 

 

Year ended

 

31-Dec-18

(In thousands)

Pre-tax

Income tax
effect

Impact on net
income

U.S. GAAP Net income

 

 

$618,158

Non-GAAP Adjustments:

 

 

 

Termination of FDIC Shared-Loss Agreements[1]

(94,633)

45,059

(49,574)

Tax Closing Agreement[2]

-

(108,946)

(108,946)

Impact of Law Act No.257[3]

-

27,686

27,686

Adjusted net income (Non-GAAP)

 

 

$487,324

[1]On May 22, 2018, BPPR entered into a Termination Agreement with the FDIC to terminate all Shared-Loss Agreements in connection with the acquisition of certain assets and assumptions of certain liabilities of Westernbank Puerto Rico in 2010. As a result, BPPR recognized a pre-tax gain of $94.6 million, net of the related professional and advisory fees of $8.1 million associated with the Termination Agreement.

[2]Represents the impact of the Termination Agreement on income taxes. In June 2012, the Corporation entered into a Tax Closing Agreement with the Puerto Rico Department of the Treasury to clarify the tax treatment related to the loans acquired in the FDIC Transaction in accordance with the provisions of the Puerto Rico Tax Code. Based on the provisions of this Tax Closing Agreement, the Corporation recognized a net income tax benefit of $108.9 million during the second quarter of 2018.

[3]On December 10, 2018, the Governor of Puerto Rico signed into law Act No.257 of 2018, which amended the Puerto Rico Internal Revenue Code, to among other things, reduce the Puerto Rico corporate tax rate from 39% to 37.5%. The resulting adjustments reduced the DTA related to the Corporation’s P.R. operations as a result of a lower realizable benefit at the lower tax rate.

 

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Contact:

Popular, Inc.
Investor Relations:
Paul Cardillo, 212-417-6721
Senior Vice President, Investor Relations Officer
or
Media Relations:
Teruca Rullán, 787-281-5170 or 917-679-3596 (mobile)
Senior Vice President, Corporate Communications

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