- Net income of $89.0 million and
adjusted net income of $90.6 million for the second quarter of
2016
- Net interest margin of 4.33% or
4.31% on an adjusted basis in Q2 2016, compared to 4.43% in Q1
2016
- Credit Quality (excluding covered
loans):
- Non-performing loans
held-in-portfolio (NPLs) decreased by $21.8 million from Q1 2016;
NPLs to loans ratio at 2.6% vs. 2.7% Q1 2016;
- Net charge-offs (NCOs) decreased by
$7.0 million quarter-over-quarter; NCOs at 0.63% of average loans
held-in-portfolio vs. 0.76% in Q1 2016;
- Allowance for loan losses of $518.1
million vs. $508.4 million in Q1 2016; Allowance for loan losses to
loans held-in-portfolio at 2.30% vs. 2.26% in Q1 2016;
- Allowance for loan losses to NPLs at
89.7% vs. 84.8% in Q1 2016.
- Common Equity Tier 1 ratio of 16.29%
and Tangible Book Value per Share of $44.62 at June 30,
2016
Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP)
reported net income of $89.0 million for the quarter ended June 30,
2016, compared to net income of $85.0 million for the quarter ended
March 31, 2016.
Mr. Richard L. Carrión, Chairman of the Board and Chief
Executive Officer, said: “We are pleased to report another solid
quarter with strong net income, revenue and credit metrics. Also
our U.S. operation delivered significant loan growth while
maintaining strong credit quality. We are hopeful that recent
legislative actions by the U.S. Congress will be a catalyst in
revitalizing Puerto Rico's economy.”
Significant Events
The Corporation’s results for the second quarter of 2016 include
the sale of commercial and construction loans with a carrying value
of approximately $100 million and OREO with a carrying value of $9
million acquired in 2010 from the FDIC as receiver for Westernbank
("WB"). The sale resulted in a net benefit of approximately $8
million from the sale of the loans and a loss of $5.1 million from
the sale of OREO. The Corporation incurred $1.8 million in fees for
professional services directly associated with this transaction.
Refer to additional details on the Adjusted Results Non-GAAP
section on this earnings release.
On May 26, 2016, EVERTEC, Inc., in which the Corporation owns a
15.74% interest, filed its Annual Report on Form 10-K for the year
ended December 31, 2015, which included restated audited results
for the years ended December 31, 2014 and 2013, correcting certain
material errors involved with the accounting for tax positions
taken by EVERTEC in the 2010 tax year and other miscellaneous
accounting adjustments. The Corporation’s proportionate share of
the cumulative impact of EVERTEC's restatement and other corrective
adjustments to its financial statements was approximately $2.2
million and is reflected as part of other non-interest income.
Earnings Highlights (Unaudited)
Quarters ended Six months ended (Dollars in
thousands, except per share information) 30-Jun-16
31-Mar-16 30-Jun-15 30-Jun-16 30-Jun-15 Net
interest income $360,551 $352,412 $362,553 $712,963 $705,748
Provision for loan losses 39,668 47,940 60,468 87,608 90,179
Provision (reversal) for loan losses - covered loans [1]
804 (3,105) 15,766 (2,301) 26,090 Net
interest income after provision for loan losses 320,079 307,577
286,319 627,656 589,479 FDIC loss-share (expense) income (12,576)
(3,146) 19,075 (15,722) 23,214 Other non-interest income 123,079
114,776 121,684 237,855 232,780 Operating expenses
309,149 301,943 363,174 611,092 675,515 Income
from continuing operations before income tax 121,433 117,264 63,904
238,697 169,958 Income tax expense (benefit) 32,446
32,265 (533,533) 64,711 (500,964) Income from
continuing operations 88,987 84,999
597,437 173,986 670,922 Income from discontinued operations,
net of tax - - 15 - 1,356 Net
income $88,987 $84,999 $597,452
$173,986 $672,278 Net income applicable to common stock
$88,056 $84,068 $596,521 $172,124
$670,417 Net income per common share from continuing
operations - Basic $0.85 $0.81 $5.80
$1.67 $6.51 Net income per common share from continuing
operations - Diluted $0.85 $0.81 $5.79
$1.67 $6.49 Net income per common share from discontinued
operations - Basic $- $- $- $-
$0.01 Net income per common share from discontinued operations -
Diluted $- $- $- $- $0.01 [1]
Covered loans represent loans acquired in the Westernbank
FDIC-assisted transaction that are covered under an FDIC
loss-sharing agreement.
Adjusted results – Non-GAAP
The Corporation prepared its Consolidated Financial Statement
using accounting principles generally accepted in the U.S. (“U.S.
GAAP” or the “reported basis”). In addition to analyzing the
Corporation’s results on a reported basis, management monitors the
performance of the Corporation on an “adjusted basis” and excludes
the impact of certain transactions on the results of its
operations. Management believes that the “adjusted basis” provides
meaningful information about the underlying performance of the
Corporation’s ongoing operations. The “adjusted basis” is a
non-GAAP financial measure.
The following tables reflect the results of operations for the
second quarter of 2016 compared to the first quarter of 2016
results, with adjustments to exclude the impact of certain events
during the second quarter of 2016. No adjustments are reflected for
the first quarter of 2016 results.
Reconciliation to GAAP Financial Measures
Quarter ended (Unaudited)
30-Jun-16 (In thousands)
Actual Results
(U.S. GAAP)
Impact of
EVERTEC's
Restatement [2]
Bulk Sale of WB
loans and OREO [3]
Adjusted
Results
(Non-GAAP)
Net interest income $360,551 $- $2,057
$358,494 Provision for loan losses – non-covered loans 39,668 -
(5,445) 45,113 Provision for loan losses – covered loans [1]
804 - - 804 Net interest income after
provision for loan losses 320,079 - 7,502 312,577 Mortgage banking
activities 16,227 - - 16,227 FDIC loss-share (expense) income
(12,576) - 291 (12,867) Other non-interest income
106,852 (2,173) - 109,025 Total non-interest
income 110,503 (2,173) 291
112,385 Personnel costs 116,708 - - 116,708 Net occupancy expenses
21,714 - - 21,714 Equipment expenses 15,261 - - 15,261 Professional
fees 80,625 - 1,812 78,813 Communications 6,012 - - 6,012 Business
promotion 13,705 - - 13,705 Other real estate owned (OREO) expenses
12,980 - 5,090 7,890 Amortization of intangibles 3,097 - - 3,097
Other operating expenses 39,047 - -
39,047 Total operating expenses 309,149
- 6,902 302,247 Income before income tax 121,433
(2,173) 891 122,715 Income tax expense 32,446
- 347 32,099 Net income $88,987
$(2,173) $544 $90,616 [1] Covered loans represent
loans acquired in the Westernbank FDIC-assisted transaction that
are covered under an FDIC loss-sharing agreement. [2]
Represents Popular Inc's. proportionate share of the cumulative
impact of EVERTEC's restatement and other corrective adjustments to
its financial statements, as disclosed in EVERTEC's 2015 Annual
Report on Form 10K. [3] Represent the impact of the bulk
sale of Westernbank loans and OREO.
Quarters ended (Unaudited)
Adjusted Results
Non-GAAP
(In thousands) 30-Jun-16
31-Mar-16 Variance Net interest income $358,494 $352,412
$6,082 Provision for loan losses – non-covered loans 45,113 47,940
(2,827) Provision for loan losses – covered loans [1]
804 (3,105) 3,909 Net interest income after provision
for loan losses 312,577 307,577 5,000 Mortgage banking activities
16,227 10,551 5,676 FDIC loss-share expense (12,867) (3,146)
(9,721) Other non-interest income 109,025
104,225 4,800 Total non-interest income
112,385 111,630 755 Personnel costs 116,708 127,091
(10,383) Net occupancy expenses 21,714 20,430 1,284 Equipment
expenses 15,261 14,548 713 Professional fees 78,813 75,459 3,354
Communications 6,012 6,320 (308) Business promotion 13,705 11,110
2,595 Other real estate owned (OREO) expenses 7,890 9,141 (1,251)
Amortization of intangibles 3,097 3,114 (17) Other operating
expenses 39,047 34,730 4,317 Total
operating expenses 302,247 301,943 304
Income before income tax 122,715 117,264 5,451 Income tax expense
32,099 32,265 (166) Net income
$90,616 $84,999 $5,617 [1] Covered loans
represent loans acquired in the Westernbank FDIC-assisted
transaction that are covered under an FDIC loss-sharing agreement.
Net interest income
Net interest income for the quarter ended June 30, 2016 was
$360.6 million, compared to $352.4 million for the previous
quarter. Net interest margin was 4.33% for the quarter compared to
4.43% for the previous quarter.
On an adjusted basis, the net interest income for the second
quarter of 2016 was $358.5 million and the net interest margin was
4.31%. Refer to the Adjusted Results – Non-GAAP section for
additional information on the adjusted net interest income for the
quarter ended June 30, 2016.
The increase in net interest income was mainly related to:
- Higher income from investment
securities by $1.7 million, due mainly to higher volumes of money
market investments and mortgage-backed securities, partially offset
by lower yields on acquired investments;
- Higher income from consumer loans by
$1.4 million due to higher volume of personal loans related to
acquired loans mainly in the BPNA segment, partially offset by
lower income from credit cards due mainly to the lower volume of
the portfolio; and
- Higher income from the WB loan
portfolio by $4.9 million, which reflects the impact of the bulk
sale transaction. Excluding this transaction, the income from the
WB loans increased by $2.8 million, or 77 basis points due to
higher yields as a result of the quarterly recast process and the
successful resolution of certain loans not related to the bulk
sale.
These positive variances were partially offset by:
- Lower income from mortgage loans by
$0.8 million mainly from lower volumes at both P.R. and U.S. due to
slower origination activity.
BPPR’s net interest income amounted to $310.4 million for the
quarter ended June 30, 2016, or $308.3 million on an adjusted
basis, compared to $305.4 million for the previous quarter. The
increase of $2.9 million in adjusted net interest income was mainly
due to higher income on investment securities, higher income from
Westernbank loans and lower funding costs from the lower volume of
borrowings and brokered CDs. These positive variances were
partially offset by lower yields from commercial loans mainly due
to lower loan fees and a decrease in interest income on commercial
real estate loans. Net interest margin declined to 4.71%, or 4.67%
on an adjusted basis, from 4.87% in the previous quarter mainly
driven by lower yields on investment securities and commercial
loans, as explained above. Earning assets in P.R. yielded 5.04%
down from 5.27% in the previous quarter related to the above
mentioned higher overnight investment balances, while the cost of
interest bearing liabilities was 0.53%, compared to 0.57% in the
previous quarter, mainly from lower cost of time deposits.
BPNA’s net interest income was $65.5 million, compared to $62.3
million for the previous quarter. The increase of $3.2 million in
the net interest income is mainly driven by strong growth of the
commercial portfolio and consumer loans acquired and the higher
volume of the investment portfolio. Lower income from mortgage
loans and higher interest expense on deposits to fund the loan
growth partially offset the positive variances. Net interest margin
was 3.80% compared to 3.70% for the previous quarter. The increase
of 10 basis points was mainly driven by the change in the
composition of earning assets. U.S. earning assets yielded 4.47%,
compared to 4.36% in the previous quarter, while the cost of
interest bearing liabilities remained relatively flat at 0.87%,
from 0.85% in the previous quarter.
Non-interest income
Non-interest income was $110.5 million for the second quarter of
2016, a decrease of $1.1 million when compared to the first quarter
of 2016. The decrease in non-interest income was driven primarily
by the following:
- Unfavorable variance in adjustments to
indemnity reserves by $1.6 million due to an increase of $2.5
million in the reserve related to the residential mortgage loans
bulk sale completed during 2013, partially offset by a lower
provision for loans previously sold with credit recourse;
- Higher FDIC loss-share expense by $9.4
million due to an unfavorable change in the true-up payment
obligation of $7.2 million due to the fair value adjustment of this
liability mainly as a result of the improvement in Popular’s credit
spreads and higher recoveries on assets to be shared with the FDIC
in the recovery period by $3.3 million, partially offset by a
benefit of $0.3 million related to the bulk sale of Westernbank
loans; and
- Lower other operating income by $2.7
million principally due to the unfavorable adjustment of $2.2
million resulting from the EVERTEC restatement detailed in the
Adjusted Results Non-GAAP section above.
These decreases were partially offset by:
- Higher other service fees by $3.6
million mainly in the BPPR segment due to an increase in insurance
fees related to renewals and business production, higher credit
card merchant fees, investment management fees, and trust fees
related to trustee and retirement plan services. Refer to Table F
for a breakdown of other service fees;
- Higher income from mortgage banking
activities by $5.7 million due to a favorable variance in fair
value adjustments of mortgage servicing rights by $4.1 million and
higher net gain on sale of loans by $1.4 million mostly due to
higher volume from mortgage securitization transactions at
BPPR;
- Higher net gain on investment
securities by $1.6 million related to the redemption of an
investment at the Corporate segment; and
- Higher trading account profit by $1.3
million principally resulting from favorable fair value adjustments
of P.R. municipal bonds.
Excluding the impact of the transactions detailed in the
Adjusted Results Non-GAAP tables above, non-interest income
increased by $0.8 million when compared to the first quarter of
2016.
Refer to Table B for further details.
Financial Impact of the 2010 FDIC-Assisted Transaction
(Unaudited) Quarters ended Six
months ended (In thousands) 30-Jun-16
31-Mar-16 30-Jun-15 30-Jun-16 30-Jun-15
Income
Statement
Interest income on WB loans $49,794 $44,904 $55,335 $94,698
$112,766 Total FDIC loss-share (expense) income (12,576) (3,146)
19,075 (15,722) 23,214 Provision (reversal) for loan losses- WB
loans (7,282) (356)
15,766 (7,638) 26,090 Total revenues
less provision (reversal) for loan losses $44,500
$42,114 $58,644 $86,614
$109,890
Balance
Sheet
WB loans $1,932,062 $2,071,191 $2,284,955 FDIC loss-share asset
214,029 219,448 392,947 FDIC true-up payment obligation
127,876 120,188 121,469
See additional details on accounting for
the 2010 FDIC-Assisted transaction in Table O.
Operating expenses
Operating expenses amounted to $309.1 million for the second
quarter of 2016, an increase of $7.2 million when compared to the
first quarter of 2016. The increase in operating expenses was
driven primarily by:
- Higher professional fees by $5.2
million mainly at BPPR due to higher legal fees and, the impact of
the bulk sale of Westernbank loans and OREO which increased
professional fees by $1.8 million;
- Higher business promotion by $2.6
million mostly due to higher seasonal advertising expense and
credit card reward program expense;
- Higher OREO expenses by $3.8 million
mainly due to the loss on the bulk sale of Westernbank OREO
amounting to $5.1 million, partially offset by lower write-downs;
and
- Higher other operating expense by $5.5
million mainly due to higher sundry losses at BPPR and BPNA.
These increases were partially offset by:
- Lower personnel cost by $10.4 million
mainly due to the grant of employee restricted stock and
performance shares awarded during the first quarter of 2016, lower
salaries and incentive compensation and lower unemployment and
social security tax.
Excluding the impact of the transactions detailed in the
Adjusted Results Non-GAAP tables above, operating expenses
increased by $0.3 million compared to the first quarter of
2016.
Non-personnel credit-related costs, which include collections,
appraisals, credit related fees, and OREO expenses, amounted to
$18.0 million for the second quarter of 2016, compared to $13.6
million for the first quarter of 2016. The increase was principally
due to a loss on the bulk sale of Westernbank OREO at BPPR
amounting to $5.1 million. Excluding the impact of the sale, the
decrease of $0.7 million was mainly due to lower commercial,
construction and mortgage OREO write-downs at BPPR.
Full-time equivalent employees were 7,826 as of June 30, 2016,
compared to 7,812 as of March 31, 2016.
For a breakdown of operating expenses by category refer to table
B.
Income taxes
For the quarter ended June 30, 2016, the Corporation recorded an
income tax expense of $32.4 million, compared to $32.3 million for
the previous quarter. On an adjusted basis, the income tax expense
for the second quarter of 2016 was $32.1 million.
The effective income tax rate for the second quarter of 2016 was
27%, or 26% on an adjusted basis, compared to 28% for the previous
quarter. The effective tax rate is impacted by the composition and
source of the taxable income.
Credit Quality
The Corporation continued to experience stable credit trends
despite the economic conditions in Puerto Rico. The shift in the
risk profile of the credit portfolios over the last few years has
better positioned the Corporation to operate in the Island’s
complex environment. The Corporation continues to closely monitor
changes in credit quality trends and is focused on taking measures
to minimize risks. The U.S. operation continued to reflect positive
results with strong growth and solid credit quality metrics.
- Inflows of NPLs held-in-portfolio,
excluding consumer loans, decreased by $8.6 million
quarter-over-quarter, mainly driven by lower inflows in the BPNA
segment, as the prior quarter included the addition of a $10.5
million commercial relationship that was paid-off during the second
quarter of 2016.
- Non-performing loans held-in-portfolio
decreased by $21.8 million from the first quarter of 2016, mainly
driven by lower commercial NPLs in the BPPR and BPNA segments of
$10.1 million and $12.0 million, respectively. This reduction was
mainly prompted by repayment activity, most significantly by the
abovementioned $10.5 million relationship at BPNA which was
paid-off during the quarter. At June 30, 2016, NPLs to total loans
held-in-portfolio was 2.6% compared to 2.7% in the prior
quarter.
- Net charge-offs decreased by $7.0
million during the second quarter of 2016, excluding the recoveries
of $5.4 million resulting from the bulk sale of WB loans. The
ratio of net charge-offs to average non-covered loans
held-in-portfolio decreased to 0.63% on an annualized basis from
0.76% in the first quarter of 2016. Refer to Table J for further
information on net charge-offs and related ratios.
- The allowance for loan losses increased
by $9.7 million from the first quarter 2016 to $518.1 million. The
general and specific reserves related to non-covered loans totaled
$395.3 million and $122.8 million, respectively, at quarter-end,
compared with $384.4 million and $124.0 million, respectively, as
of March 31, 2016. The ratio of the allowance for loan losses to
loans held-in-portfolio was 2.30% in the second quarter of 2016,
compared to 2.26% from the previous quarter.
- The ratio of the allowance for loan
losses to NPLs held-in-portfolio stood at 89.7%, compared to 84.8%
in the previous quarter.
- The provision for loan losses for the
second quarter of 2016 amounted to $39.7 million, decreasing by
$8.3 million from the previous quarter. Excluding the recoveries
related to the bulk sale of Westernbank loans, the adjusted
provision for loan losses for the second quarter of 2016 was $45.1
million, a decline of $2.8 million from the previous quarter. The
provision to net charge-offs ratio was 127.4%, compared to 112.9%
in the first quarter of 2016.
Non-Performing Assets
(Unaudited) (In
thousands) 30-Jun-16 31-Mar-16
30-Jun-15 Total non-performing loans held-in-portfolio, excluding
covered loans $577,739 $599,526 $575,997 Non-performing loans
held-for-sale 39,544 42,743 50,875 Other real estate owned
(“OREO”), excluding covered OREO 177,025
165,960 142,255 Total non-performing assets, excluding
covered assets 794,308 808,229 769,127 Covered loans and OREO
41,466 39,916 37,367 Total
non-performing assets $835,774 $848,145
$806,494 Net charge-offs for the quarter (excluding covered loans)
$35,401 $42,448 $46,442
Ratios (excluding covered loans):
Non-covered loans held-in-portfolio
$22,540,661 $22,507,737 $22,435,145 Non-performing loans
held-in-portfolio to loans held-in-portfolio 2.56% 2.66% 2.57%
Allowance for loan losses to loans held-in-portfolio 2.30 2.26 2.29
Allowance for loan losses to non-performing loans, excluding loans
held-for-sale 89.68 84.80 89.02
Refer to Table H for additional information.
Provision
for Loan Losses
(Unaudited) Quarters ended Six months ended (In
thousands) 30-Jun-16 31-Mar-16
30-Jun-15 30-Jun-16 30-Jun-15 Provision (reversal) for loan losses:
BPPR $38,351 $43,871 $60,529 $82,222 $92,442 BPNA
1,317 4,069 (61) 5,386 (2,263) Total provision for
loan losses- non-covered loans $39,668 $47,940
$60,468 $87,608 $90,179 Provision (reversal) for loan
losses - covered loans 804 (3,105)
15,766 (2,301) 26,090 Total provision for loan losses
$40,472 $44,835 $76,234 $85,307 $116,269
Credit Quality by Segment
(Unaudited) (In thousands) Quarters ended
BPPR
30-Jun-16 31-Mar-16 30-Jun-15 Provision for
loan losses $38,351 $43,871 $60,529 Net charge-offs 36,222 40,647
45,146 Total non-performing loans held-in-portfolio, excluding
covered loans 550,632 561,612 541,767 Allowance / non-covered loans
held-in-portfolio 2.77% 2.70% 2.69%
Quarters ended
BPNA
30-Jun-16 31-Mar-16 30-Jun-15 Provision (reversal)
for loan losses $1,317 $4,069 $(61) Net charge-offs (recoveries)
(821) 1,801 1,296 Total non-performing loans held-in-portfolio
27,107 37,914 34,230 Allowance / non-covered loans
held-in-portfolio 0.72% 0.71% 0.66%
Financial Condition Highlights
(Unaudited) (In thousands)
30-Jun-16 31-Mar-16 30-Jun-15 Money market,
trading and investment securities $10,368,794 $8,901,814 $9,248,978
Loans not covered under loss-sharing agreements with the FDIC
22,540,661 22,507,737 22,435,145 Loans covered under loss-sharing
agreements with the FDIC 607,170 625,130 689,650 Total assets
37,606,148 36,147,009 36,741,250 Deposits 28,737,856 27,526,593
27,750,694 Borrowings 2,428,752 2,349,992 3,017,609 Liabilities
from discontinued operations 1,815 1,815 1,754 Total liabilities
32,246,317 30,896,709 31,791,597 Stockholders’ equity
5,359,831 5,250,300 4,949,653
Total assets increased by $1.5 billion from the first quarter of
2016 driven by:
- An increase of $0.9 billion in money
market investments mainly at BPPR due to an increase in cash
balances from deposits;
- An increase of $0.6 billion in
investment securities available-for-sale mainly at BPPR due to
purchases of U.S. Treasury securities and mortgage-backed agency
pools, partially offset by sales and principal pay-downs; and
- A net increase of $32.9 million in
non-covered loans held-in-portfolio mainly at BPNA by $231.3
million driven by growth in the commercial loan portfolio,
partially offset by a decrease of $198.4 million at BPPR due to the
bulk sale of WB loans with a carrying value of approximately $100
million and to lower originations of residential mortgages.
Total liabilities increased by $1.3 billion from the first
quarter of 2016, principally driven by:
- An increase of $1.2 billion in deposits
mainly due to increases in government deposit accounts, NOW
accounts, and non-brokered time deposits at BPPR. Refer to Table G
for additional information on deposits.
Stockholders’ equity increased by approximately $109.5 million
from the first quarter of 2016, mainly as a result of net income
for the quarter of $89.0 million and a favorable variance of $35.0
million in unrealized gains on securities available-for-sale,
partially offset by payments of dividends of $15.6 million on
common stock and $0.9 million in dividends on preferred stock.
Common equity tier-1 ratio (“CET1”) and tangible book value per
share were 16.29% and $44.62, respectively at June 30, 2016
compared to 15.79% and $43.55 at March 31, 2016. Refer to Table A
for capital ratios.
Forward-Looking
Statements
The information contained in this news release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on management’s current expectations and are
subject to risks and uncertainties. Please refer to our Annual
Report on Form 10-K for the year ended December 31, 2015, the
Quarterly Report on Form 10-Q for the quarter ended March 31, 2016
and our other filings with the Securities and Exchange Commission
for a discussion of factors that may cause the Corporation's actual
results to differ materially from any future results expressed or
implied by such forward-looking statements. Those filings are
available on the Corporation’s website (www.popular.com) and on the
Securities and Exchange Commission website (www.SEC.gov). The
Corporation does not undertake to update or revise any
forward-looking statement to reflect events or circumstances that
may arise after the date of such statements.
Founded in 1893, Popular, Inc. is the leading banking
institution by both assets and deposits in Puerto Rico and ranks
among the top 50 U.S. banks by assets. Popular provides retail,
mortgage and commercial banking services through its principal
banking subsidiary, Banco Popular de Puerto Rico, as well as auto
and equipment leasing and financing, investment banking,
broker-dealer and insurance services through specialized
subsidiaries. In the United States, Popular has established a
community-banking franchise providing a broad range of financial
services and products with branches in New York, New Jersey and
Florida under the name of Popular Community Bank.
An electronic version of this press release can be found at the
Corporation’s website: www.popular.com.
Popular will hold a conference call to discuss the financial
results today Tuesday, July 26, 2016 at 11:00 a.m. Eastern Daylight
Time. The call will be broadcast 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 a dial-in
telephone number 1-866-235-1201 or 1-412-902-4127.
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, August 26, 2016. The replay dial in
is 1-877-344-7529 or 1-412-317-0088. The replay passcode is
10088193.
Popular, Inc. Financial Supplement to Second
Quarter 2016 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 - U.S. MAINLAND
OPERATIONS Table N - Reconciliation to GAAP Financial
Measures Table O - Financial Information - Westernbank Loans
POPULAR, INC. Financial Supplement to
Second Quarter 2016 Earnings Release Table A - Selected
Ratios and Other Information (Unaudited)
Quarters ended Six months ended
30-Jun-16 31-Mar-16 30-Jun-15 30-Jun-16
30-Jun-15 Basic EPS from continuing operations $0.85 $0.81
$5.80 $1.67 $6.51 Basic EPS from discontinued operations $-
$- $- $- $0.01 Total Basic EPS $0.85 $0.81 $5.80 $1.67 $6.52
Diluted EPS from continuing operations $0.85 $0.81 $5.79
$1.67 $6.49 Diluted EPS from discontinued operations $- $-
$- $- $0.01 Total Diluted EPS $0.85 $0.81 $5.79 $1.67 $6.50
Average common shares outstanding 103,245,717 103,188,815
102,859,591 103,217,266 102,899,537 Average common shares
outstanding - assuming dilution 103,343,486 103,269,813 103,102,718
103,297,707 103,113,280 Common shares outstanding at end of
period 103,703,041 103,670,005 103,503,014 103,703,041 103,503,014
Market value per common share $29.30 $28.61 $28.86 $29.30
$28.86 Market capitalization - (In millions) $3,038 $2,966
$2,987 $3,038 $2,987 Return on average assets 0.96% 0.95%
6.74% 0.96% 3.91% . . Return on average common equity 6.80% 6.58%
54.93% 6.69% 31.34% Net interest margin [1] 4.31% 4.43%
4.54% 4.37% 4.56% Common equity per share $51.20 $50.16
$47.34 $51.20 $47.34 Tangible common book value per common
share (non-GAAP) $44.62 $43.55 $41.73 $44.62 $41.73 Tangible
common equity to tangible assets (non-GAAP) 12.53% 12.73% 11.94%
12.53% 11.94% Tier 1 capital 16.29% 15.79% 15.93% 16.29%
15.93% Total capital 19.29% 18.78% 18.50% 19.29% 18.50%
Tier 1 leverage 11.29% 11.46% 11.59% 11.29% 11.59%
Common Equity Tier 1 capital 16.29% 15.79%
15.93% 16.29% 15.93% [1] Not on a
taxable equivalent basis. For the quarter ended June 30, 2016
excludes the impact of the WB loans bulk sale. Refer to Table D for
reconciliation.
POPULAR, INC. Financial Supplement
to Second Quarter 2016 Earnings Release Table B -
Consolidated Statement of Operations (Unaudited)
Quarters ended Variance Quarter ended
Variance Six months ended (In thousands, except per
share information) 30-Jun-16 31-Mar-16
Q2 2016
vs. Q1 2016
30-Jun-15
Q2 2016
vs. Q2 2015
30-Jun-16 30-Jun-15 Interest income:
Loans $369,721 $363,197 $6,524 $374,133 $(4,412) $732,918 $729,764
Money market investments 3,889 2,863 1,026 1,845 2,044 6,752 3,291
Investment securities 36,725 36,271 454 31,297 5,428 72,996 61,598
Trading account securities 1,875 1,689
186 3,026 (1,151) 3,564 5,722
Total interest income 412,210 404,020
8,190 410,301 1,909 816,230
800,375 Interest expense: Deposits 30,599 29,874 725 26,258 4,341
60,473 52,122 Short-term borrowings 2,058 1,861 197 1,863 195 3,919
3,597 Long-term debt 19,002 19,873
(871) 19,627 (625) 38,875 38,908
Total interest expense 51,659 51,608
51 47,748 3,911 103,267 94,627
Net interest income 360,551 352,412 8,139 362,553 (2,002) 712,963
705,748 Provision for loan losses - non-covered loans 39,668 47,940
(8,272) 60,468 (20,800) 87,608 90,179 Provision (reversal) for loan
losses - covered loans 804 (3,105)
3,909 15,766 (14,962) (2,301) 26,090
Net interest income after provision for loan losses
320,079 307,577 12,502 286,319 33,760
627,656 589,479 Service charges on deposit accounts
40,296 39,862 434 40,138 158 80,158 79,155 Other service fees
56,945 53,382 3,563 59,421 (2,476) 110,327 113,047 Mortgage banking
activities 16,227 10,551 5,676 21,325 (5,098) 26,778 34,177 Net
gain and valuation adjustments on investment securities 1,583 -
1,583 5 1,578 1,583 5 Other-than-temporary impairment losses on
investment securities (209) - (209) (14,445) 14,236 (209) (14,445)
Trading account profit (loss) 1,117 (162) 1,279 (3,108) 4,225 955
(2,694) Net (loss) gain on sale of loans, including valuation
adjustments on loans held-for-sale - (304) 304 681 (681) (304) 602
Adjustments (expense) to indemnity reserves on loans sold (5,746)
(4,098) (1,648) 419 (6,165) (9,844) (4,107) FDIC loss-share
(expense) income (12,576) (3,146) (9,430) 19,075 (31,651) (15,722)
23,214 Other operating income 12,866 15,545
(2,679) 17,248 (4,382) 28,411
27,040 Total non-interest income 110,503
111,630 (1,127) 140,759 (30,256)
222,133 255,994 Operating expenses: Personnel costs Salaries
75,792 77,298 (1,506) 76,453 (661) 153,090 148,847 Commissions,
incentives and other bonuses 16,982 20,769 (3,787) 24,214 (7,232)
37,751 42,672 Pension, postretirement and medical insurance 12,279
13,111 (832) 9,075 3,204 25,390 21,088 Other personnel
costs, including payroll taxes 11,655 15,913
(4,258) 11,235 420 27,568 24,828
Total personnel costs 116,708 127,091 (10,383) 120,977 (4,269)
243,799 237,435 Net occupancy expenses 21,714 20,430 1,284 23,286
(1,572) 42,144 44,995 Equipment expenses 15,261 14,548 713 15,925
(664) 29,809 29,336 Other taxes 10,170 10,195 (25) 11,113 (943)
20,365 19,687 Professional fees 80,625 75,459 5,166 78,449 2,176
156,084 153,977 Communications 6,012 6,320 (308) 6,153 (141) 12,332
12,329 Business promotion 13,705 11,110 2,595 13,776 (71) 24,815
24,589 FDIC deposit insurance 5,362 7,370 (2,008) 8,542 (3,180)
12,732 14,940 Other real estate owned (OREO) expenses 12,980 9,141
3,839 44,816 (31,836) 22,121 67,885 Credit and debit card
processing, volume, interchange and other expenses 6,617 5,722 895
5,762 855 12,339 10,583 Other operating expenses 16,898 11,443
5,455 25,320 (8,422) 28,341 37,847 Amortization of intangibles
3,097 3,114 (17) 2,881 216 6,211 4,985 Restructuring costs
- - - 6,174 (6,174) -
16,927 Total operating expenses 309,149
301,943 7,206 363,174 (54,025)
611,092 675,515 Income from continuing operations before
income tax 121,433 117,264 4,169 63,904 57,529 238,697 169,958
Income tax expense (benefit) 32,446 32,265
181 (533,533) 565,979 64,711
(500,964) Income from continuing operations 88,987 84,999 3,988
597,437 (508,450) 173,986 670,922 Income from discontinued
operations, net of tax - - - 15
(15) - 1,356
Net income
$88,987 $84,999 $3,988 $597,452
$(508,465) $173,986 $672,278
Net income applicable
to common stock $88,056 $84,068
$3,988 $596,521 $(508,465) $172,124
$670,417
Net income per common share - basic: Net income
from continuing operations $0.85 $0.81 $0.04 $5.80 $(4.95) $1.67
$6.51 Net income from discontinued operations
- - - - - - 0.01
Net income per common share - basic $0.85
$0.81 $0.04 $5.80 $(4.95) $1.67
$6.52
Net income per common share - diluted: Net income from
continuing operations $0.85 $0.81 $0.04 $5.79 $(4.94) $1.67 $6.49
Net income from discontinued operations -
- - - - - 0.01 Net
income per common share - diluted $0.85 $0.81
$0.04 $5.79 $(4.94) $1.67 $6.50
Dividends Declared per Common Share $0.15
$0.15 $- $- $0.15 $0.30
$-
Popular, Inc. Financial Supplement to Second
Quarter 2016 Earnings Release Table C - Consolidated
Statement of Financial Condition (Unaudited)
Variance Q2 2016 vs. (In
thousands) 30-Jun-16 31-Mar-16
30-Jun-15 Q1 2016 Assets: Cash and due from banks $365,308
$409,623 $557,248 $(44,315) Money market investments 2,785,500
1,917,460 3,254,939 868,040 Trading account securities, at fair
value 72,530 71,284 141,595 1,246 Investment securities
available-for-sale, at fair value 7,242,676 6,649,830 5,585,078
592,846 Investment securities held-to-maturity, at amortized cost
99,525 99,216 101,861 309 Other investment securities, at lower of
cost or realizable value 168,563 164,024 165,505 4,539 Loans
held-for-sale, at lower of cost or fair value 122,338 125,315
202,287 (2,977) Loans held-in-portfolio: Loans not covered under
loss-sharing agreements with the FDIC 22,655,877 22,618,488
22,535,008 37,389 Loans covered under loss-sharing agreements with
the FDIC 607,170 625,130 689,650 (17,960) Less: Unearned income
115,216 110,751 99,863 4,465 Allowance for loan
losses 548,720 538,472 550,813
10,248 Total loans held-in-portfolio, net
22,599,111 22,594,395 22,573,982 4,716
FDIC loss-share asset 214,029 219,448 392,947 (5,419) Premises and
equipment, net 535,865 527,493 497,078 8,372 Other real estate not
covered under loss-sharing agreements with the FDIC 177,025 165,960
142,255 11,065 Other real estate covered under loss-sharing
agreements with the FDIC 37,984 36,397 33,504 1,587 Accrued income
receivable 120,979 120,308 130,281 671 Mortgage servicing assets,
at fair value 203,577 205,051 206,357 (1,474) Other assets
2,179,060 2,156,030 2,176,044 23,030 Goodwill 631,095 631,095
505,435 - Other intangible assets 50,983
54,080 74,854 (3,097) Total assets
$37,606,148 $36,147,009 $36,741,250 $1,459,139
Liabilities and Stockholders’ Equity: Liabilities: Deposits:
Non-interest bearing $6,531,108 $6,384,093 $6,305,986 $147,015
Interest bearing 22,206,748
21,142,500 21,444,708 1,064,248 Total
deposits 28,737,856 27,526,593
27,750,694 1,211,263 Federal funds purchased and assets sold
under agreements to repurchase 821,604 760,154 1,121,244 61,450
Other short-term borrowings 31,200 6,370 101,200 24,830 Notes
payable 1,575,948 1,583,468 1,795,165 (7,520) Other liabilities
1,077,894 1,018,309 1,021,540 59,585 Liabilities from discontinued
operations 1,815 1,815 1,754 -
Total liabilities 32,246,317 30,896,709
31,791,597 1,349,608 Stockholders’ equity: Preferred stock
50,160 50,160 50,160 - Common stock 1,039 1,039 1,037 - Surplus
4,232,835 4,231,233 4,199,165 1,602 Retained earnings 1,228,979
1,156,476 924,134 72,503 Treasury stock (7,570) (6,858) (5,812)
(712) Accumulated other comprehensive loss (145,612)
(181,750) (219,031) 36,138 Total
stockholders’ equity 5,359,831 5,250,300
4,949,653 109,531 Total liabilities and stockholders’
equity $37,606,148 $36,147,009
$36,741,250 $1,459,139
Popular, Inc.
Financial Supplement to Second Quarter 2016 Earnings Release
Table D - Consolidated Average Balances and Yield / Rate
Analysis - QUARTER (Unaudited)
Quarter ended Quarter ended Quarter ended Variance Variance
30-Jun-16 31-Mar-16 30-Jun-15 Q2 2016 vs. Q1 2016 Q2 2016 vs. Q2
2015 ($ 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 $10,286 $42.5 1.65 % $8,951 $40.8
1.83 % $8,575 $36.2 1.69 % $1,335 $1.7
(0.18) % $1,711 $6.3 (0.04) % Loans not
covered under loss-sharing agreements with the FDIC: Commercial
9,150 110.9 4.88 8,957 110.6 4.97 8,776 108.0 4.93 193 0.3 (0.09)
374 2.9 (0.05) Construction 723 9.7 5.43 704 9.3 5.30 682 10.2 6.02
19 0.4 0.13 41 (0.5) (0.59) Mortgage 6,743 88.9 5.27 6,830 89.7
5.25 7,175 93.4 5.21 (87) (0.8) 0.02 (432) (4.5) 0.06 Consumer
3,865 99.4 10.34 3,807 98.0 10.35 3,823 97.1 10.19 58 1.4 (0.01) 42
2.3 0.15 Lease financing 651 11.0 6.73 630
10.7 6.78 583 10.1 6.93 21 0.3
(0.05) 68 0.9 (0.20) Total loans (excluding WB loans)
21,132 319.9 6.08 20,928 318.3 6.11 21,039 318.8 6.07 204 1.6
(0.03) 93 1.1 0.01 WB loans[1] 2,013 47.7 9.53 2,058
44.9 8.76 2,350 55.3 9.44 (45)
2.8 0.77 (337) (7.6) 0.09 Total loans 23,145
367.6 6.38 22,986 363.2 6.34 23,389
374.1 6.41 159 4.4 0.04 (244)
(6.5) (0.03) Total interest earning assets 33,431
$410.1 4.93 % 31,937 $404.0 5.08 % 31,964
$410.3 5.14 % 1,494 $6.1 (0.15) % 1,467
($0.2) (0.21) % Allowance for loan losses (539) (536)
(599) (3) 60 Other non-interest earning assets 4,479 4,491 4,212
(12) 267 Total average assets $37,371 $35,892 $35,577 $1,479 $1,794
Liabilities and Stockholders' Equity: Interest bearing
deposits: NOW and money market $7,023 $6.6 0.38 % $5,712 $5.6 0.39
% $5,507 $4.9 0.36 % $1,311 $1.0 (0.01) % $1,516 $1.7 0.02 %
Savings 7,487 4.4 0.24 7,275 4.3 0.23 7,040 4.1 0.23 212 0.1 0.01
447 0.3 0.01 Time deposits 7,866 19.6 1.00 8,058
20.0 1.00 8,530 17.2 0.81 (192)
(0.4) - (664) 2.4 0.19 Total interest bearing
deposits 22,376 30.6 0.55 21,045 29.9 0.57 21,077 26.2 0.50 1,331
0.7 (0.02) 1,299 4.4 0.05 Borrowings 2,307 21.0 3.67
2,441 21.7 3.58 2,855 21.5 3.01 (134)
(0.7) 0.09 (548) (0.5) 0.66 Total
interest bearing liabilities 24,683 51.6 0.84 23,486
51.6 0.88 23,932 47.7 0.80 1,197
- (0.04) 751 3.9 0.04 Net interest spread 4.09
% 4.20 % 4.34 % (0.11) % (0.25) % Non-interest bearing deposits
6,481 6,293 6,247 188 234 Other liabilities 943 920 991 23 (48)
Liabilities from discontinued operations 2 2 2 - - Stockholders'
equity 5,262 5,191 4,405 71 857 Total average liabilities and
stockholders' equity $37,371 $35,892 $35,577 $1,479 $1,794
Adjusted net interest income / margin non-taxable equivalent basis
$358.5 4.31 % $352.4 4.43 % $362.6 4.54 % $6.1
(0.12) % ($4.1) (0.23) % Impact of WB loan and OREO
bulk sale 2.1 - - 2.1 2.1 Net interest income / margin non-taxable
equivalent basis $360.6 4.33 % $352.4 4.43 % $362.6
4.54 % $8.2 (0.10) % ($2.0) (0.21) %
[1] Including the impact of the WB loans bulk sale, the yield for
WB loans would have been 9.94%.
Popular, Inc.
Financial Supplement to Second Quarter 2016 Earnings Release
Table E - Consolidated Average Balances and Yield / Rate
Analysis - YEAR-TO-DATE (Unaudited)
Six
months ended Six months ended 30-Jun-16 30-Jun-15 Variance Average
Income / Yield / Average Income / Yield / Average Income / Yield /
($ 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 $9,619 $83.3 1.73 % $8,173 $70.6
1.73 % $1,446 $12.7 - % Loans not covered
under loss-sharing agreements with the FDIC: Commercial 9,054 221.6
4.92 8,581 208.8 4.91 473 12.8 0.01 Construction 713 19.0 5.37 559
16.3 5.89 154 2.7 (0.52) Mortgage 6,786 178.6 5.26 6,955 179.3 5.15
(169) (0.7) 0.11 Consumer 3,836 197.4 10.35 3,834 192.5 10.13 2 4.9
0.22 Lease financing 641 21.6 6.75 576 20.0
6.97 65 1.6 (0.22) Total loans (excluding WB
loans) 21,030 638.2 6.09 20,505 616.9 6.05 525 21.3 0.04 WB
loans[1] 2,035 92.7 9.14 2,445 112.8
9.29 (410) (20.1) (0.15) Total loans 23,065
730.9 6.36 22,950 729.7 6.40 115 1.2
(0.04) Total interest earning assets 32,684 $814.2
5.00 % 31,123 $800.3 5.17 % 1,561 $13.9
(0.17) % Allowance for loan losses (538) (604) 66 Other
non-interest earning assets 4,484 4,177 307 Total average assets
$36,630 $34,696 $1,934 Liabilities and Stockholders' Equity:
Interest bearing deposits: NOW and money market $6,367 $12.2 0.39 %
$5,246 $9.1 0.35 % $1,121 $3.1 0.04 % Savings 7,381 8.7 0.24 6,966
8.0 0.23 415 0.7 0.01 Time deposits 7,962 39.6 1.00
8,141 35.0 0.87 (179) 4.6 0.13 Total
interest bearing deposits 21,710 60.5 0.56 20,353 52.1 0.52 1,357
8.4 0.04 Borrowings 2,374 42.8 3.61 2,866 42.5
2.97 (492) 0.3 0.64 Total interest bearing
liabilities 24,084 103.3 0.86 23,219 94.6
0.82 865 8.7 0.04 Net interest spread 4.14 %
4.35 % (0.21) % Non-interest bearing deposits 6,387 6,106 281 Other
liabilities 930 1,006 (76) Liabilities from discontinued operations
2 2 - Stockholders' equity 5,227 4,363 864 Total average
liabilities and stockholders' equity $36,630 $34,696 $1,934
Adjusted net interest income / margin non-taxable equivalent basis
$710.9 4.37 % $705.7 4.56 % $5.2 (0.19) %
Impact of WB loan and OREO bulk sale 2.1 - 2.1 Net interest income
/ margin non-taxable equivalent basis $713.0 4.38 % $705.7
4.56 % $7.3 (0.18) % [1] Including the impact
of the WB loans bulk sale, the yield for WB loans would have been
9.34%.
Popular, Inc. Financial Supplement to Second
Quarter 2016 Earnings Release Table F - Mortgage Banking
Activities and Other Service Fees (Unaudited)
Mortgage Banking Activities Variance Quarters ended Q2 2016
vs. Q2 2016 vs. Six months ended Variance (In thousands)
30-Jun-16 31-Mar-16 30-Jun-15 Q1 2016
Q2 2015 30-Jun-16 30-Jun-15 2016 vs.
2015 Mortgage servicing fees, net of fair value adjustments:
Mortgage servicing fees $14,675 $14,802 $14,689 $(127) $(14)
$29,477 $26,937 $2,540 Mortgage servicing rights fair value
adjustments (4,340) (8,477) (1,917)
4,137 (2,423) (12,817) (6,846)
(5,971) Total mortgage servicing fees, net of fair value
adjustments 10,335 6,325 12,772
4,010 (2,437) 16,660 20,091 (3,431) Net
gain on sale of loans, including valuation on loans held-for-sale
8,474 7,110 8,022 1,364
452 15,584 15,302 282 Trading account (loss)
profit: Unrealized (losses) gains on outstanding derivative
positions (59) (80) 42 21 (101) (139) 59 (198) Realized
(losses) gains on closed derivative positions (2,523)
(2,804) 489 281 (3,012) (5,327)
(1,275) (4,052) Total trading account (loss) profit
(2,582) (2,884) 531 302
(3,113) (5,466) (1,216) (4,250) Total mortgage
banking activities $16,227 $10,551
$21,325 $5,676 $(5,098) $26,778 $34,177
$(7,399)
Other Service Fees Variance
Quarters ended Q2 2016 vs. Q2 2016 vs. Six months ended Variance
(In thousands) 30-Jun-16 31-Mar-16
30-Jun-15 Q1 2016 Q2 2015 30-Jun-16
30-Jun-15 2016 vs. 2015 Other service fees: Debit card fees
$11,382 $11,287 $11,995 $95 $(613) $22,669 $23,120 $(451) Insurance
fees 13,885 12,850 13,606 1,035 279 26,735 25,647 1,088 Credit card
fees 17,700 16,858 17,611 842 89 34,558 33,760 798 Sale and
administration of investment products 5,417 4,839 6,601 578 (1,184)
10,256 12,531 (2,275) Trust fees 4,827 4,235 4,914 592 (87) 9,063
9,516 (453) Other fees 3,734 3,313
4,694 421 (960) 7,046 8,473
(1,427) Total other service fees $56,945
$53,382 $59,421 $3,563 $(2,476)
$110,327 $113,047 $(2,720)
Popular, Inc. Financial
Supplement to Second Quarter 2016 Earnings Release Table G -
Loans and Deposits (Unaudited) Loans - Ending
Balances Variance (In thousands) 30-Jun-16
31-Mar-16 30-Jun-15 Q2 2016 vs. Q1 2016 Q2
2016 vs. Q2 2015 Loans not covered under FDIC loss-sharing
agreements: Commercial $10,359,815 $10,228,389 $10,004,716 $131,426
$355,099 Construction 717,332 734,858 696,010 (17,526) 21,322
Legacy [1] 49,709 61,044 72,502 (11,335) (22,793) Lease financing
664,094 643,142 592,816 20,952 71,278 Mortgage 6,864,118 6,979,201
7,225,823 (115,083) (361,705) Consumer 3,885,593
3,861,103 3,843,278 24,490 42,315 Total
non-covered loans held-in-portfolio $22,540,661 $22,507,737
$22,435,145 $32,924 $105,516 Loans covered under FDIC loss-sharing
agreements 607,170 625,130 689,650
(17,960) (82,480) Total loans held-in-portfolio
$23,147,831 $23,132,867 $23,124,795
$14,964 $23,036 Loans held-for-sale: Commercial
$39,544 $42,771 $48,969 $(3,227) $(9,425) Construction - 2 1,681
(2) (1,681) Mortgage 82,794 82,542
151,637 252 (68,843) Total loans held-for-sale
$122,338 $125,315 $202,287 $(2,977)
$(79,949) Total loans $23,270,169
$23,258,182 $23,327,082 $11,987 $(56,913) [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 BPNA segment.
Deposits - Ending Balances Variance (In
thousands) 30-Jun-16 31-Mar-16
30-Jun-15 Q2 2016 vs. Q1 2016 Q2 2016 vs.Q2 2015
Demand deposits [1] $8,106,291 $7,324,982 $7,262,176 $781,309
$844,115 Savings, NOW and money market deposits
(non-brokered) 12,289,793 11,940,103 11,177,288 349,690 1,112,505
Savings, NOW and money market deposits (brokered) 387,026 383,745
468,973 3,281 (81,947) Time deposits (non-brokered) 7,570,673
7,348,132 7,367,256 222,541 203,417 Time deposits (brokered CDs)
384,073 529,631 1,475,001
(145,558) (1,090,928) Total deposits
$28,737,856 $27,526,593 $27,750,694 $1,211,263
$987,162 [1] Includes interest and non-interest bearing
demand deposits.
Popular, Inc. Financial Supplement to
Second Quarter 2016 Earnings Release Table H -
Non-Performing Assets (Unaudited)
Variance (Dollars in thousands)
30-Jun-16
As a % of
loans HIP by
category
31-Mar-16
As a % of
loans HIP by
category
30-Jun-15
As a % of
loans HIP by
category
Q2 2016 vs. Q1 2016 Q2 2016 vs. Q2 2015
Non-accrual loans: Commercial $175,615 1.7 % $197,631 1.9 %
$190,294 1.9 % $(22,016) $(14,679) Construction 2,523 0.4 3,941 0.5
5,427 0.8 (1,418) (2,904) Legacy [1] 3,839 7.7 4,046 6.6 4,686 6.5
(207) (847) Lease financing 3,019 0.5 3,419 0.5 2,328 0.4 (400) 691
Mortgage 338,048 4.9 334,907 4.8 330,821 4.6 3,141 7,227 Consumer
54,695 1.4 55,582 1.4
42,441 1.1 (887) 12,254
Total non-performing loans held-in-
portfolio, excluding covered loans
577,739 2.6 % 599,526 2.7 % 575,997 2.6 % (21,787) 1,742
Non-performing loans held-for-sale [2] 39,544 42,743 50,875 (3,199)
(11,331)
Other real estate owned (“OREO”),
excluding covered OREO
177,025 165,960
142,255 11,065
34,770
Total non-performing assets, excluding
covered assets
794,308 808,229 769,127 (13,921) 25,181 Covered loans and OREO
41,466 39,916
37,367 1,550 4,099
Total non-performing assets $835,774
$848,145 $806,494
$(12,371) $29,280 Accruing loans past due 90
days or more [3] $413,319
$426,437 $435,775
$(13,118) $(22,456)
Ratios excluding covered
loans:
Non-performing loans held-in-portfolio to
loans held-in-portfolio
2.56 % 2.66 % 2.57 %
Allowance for loan losses to loans
held-in-portfolio
2.30 2.26 2.29 Allowance for loan losses to
non-performing loans, excluding loans
held-for-sale
89.68 84.80
89.02
Ratios including covered loans: Non-performing assets to
total assets 2.22 % 2.35 % 2.20 %
Non-performing loans held-in-portfolio to
loans held-in-portfolio
2.51 2.61 2.51
Allowance for loan losses to loans
held-in-portfolio
2.37 2.33 2.38
Allowance for loan losses to
non-performing loans, excluding loans held-for-sale
94.41 89.29
94.99 [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 BPNA segment. [2] Non-performing
loans held-for-sale as of June 30, 2016 consisted of $40 million in
commercial loans (March 31, 2016 - $42.7 million in commercial
loans and $2 thousand in construction loans; June 30, 2015 - $49
million in commercial loans, $2 million in construction loans and
$225 thousand in mortgage loans.) [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 balances include $149 million
of residential mortgage loans insured by FHA or guaranteed by the
VA that are no longer accruing interest as of June 30, 2016 (March
31, 2016 - $161 million; June 30, 2015 - $133 million).
Furthermore, the Corporation has approximately $63 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 (March 31, 2016 - $68 million; June 30,
2015 - $72 million).
Popular, Inc.
Financial Supplement to Second Quarter 2016 Earnings Release
Table I - Activity in Non-Performing Loans
(Unaudited)
Commercial loans held-in-portfolio: Quarter ended
Quarter ended 30-Jun-16 31-Mar-16 (In thousands)
BPPR BPNA Popular, Inc. BPPR
BPNA Popular, Inc. Beginning balance NPLs $182,639 $14,992
$197,631 $177,902 $3,914 $181,816 Plus: New non-performing loans
26,029 2,254 28,283 21,657 15,064 36,721 Advances on existing
non-performing loans - 8 8 - 1 1 Less: Non-performing loans
transferred to OREO (1,815) - (1,815) (1,103) - (1,103)
Non-performing loans charged-off (15,219) (254) (15,473) (4,949)
(381) (5,330) Loans returned to accrual status / loan collections
(19,050) (13,969) (33,019)
(10,868) (3,606) (14,474) Ending balance NPLs
$172,584 $3,031 $175,615 $182,639
$14,992 $197,631
Construction loans
held-in-portfolio: Quarter ended Quarter ended 30-Jun-16
31-Mar-16 (In thousands) BPPR BPNA
Popular, Inc. BPPR BPNA Popular, Inc.
Beginning balance NPLs $3,270 $671 $3,941 $3,550 $- $3,550 Plus:
New non-performing loans 186 - 186 207 671 878 Less: Non-performing
loans transferred to OREO - - - (304) - (304) Non-performing loans
charged-off (8) - (8) (110) - (110) Loans returned to accrual
status / loan collections (1,025) (571)
(1,596) (73) - (73) Ending balance NPLs
$2,423 $100 $2,523 $3,270 $671
$3,941
Mortgage loans held-in-portfolio:
Quarter ended Quarter ended 30-Jun-16 31-Mar-16 (In
thousands) BPPR BPNA Popular, Inc.
BPPR BPNA Popular, Inc. Beginning balance NPLs
$322,838 $12,069 $334,907 $337,933 $13,538 $351,471 Plus: New
non-performing loans 79,688 6,532 86,220 78,679 6,920 85,599 Less:
Non-performing loans transferred to OREO (12,521) (445) (12,966)
(9,226) - (9,226) Non-performing loans charged-off (10,648) (130)
(10,778) (10,889) (276) (11,165) Loans returned to accrual status /
loan collections (55,699) (3,636)
(59,335) (73,659) (8,113) (81,772) Ending
balance NPLs $323,658 $14,390 $338,048
$322,838 $12,069 $334,907
Legacy loans
held-in-portfolio: Quarter ended Quarter ended 30-Jun-16
31-Mar-16 (In thousands) BPPR BPNA
Popular, Inc. BPPR BPNA Popular, Inc.
Beginning balance NPLs $- $4,046 $4,046 $- $3,649 $3,649 Plus: New
non-performing loans - 552 552 - 604 604 Advances on existing
non-performing loans - - - - 2 2 Less: Non-performing loans
charged-off - (54) (54) - - - Loans returned to accrual status /
loan collections - (705) (705) -
(209) (209) Ending balance NPLs $-
$3,839 $3,839 $- $4,046 $4,046
Total non-performing loans held-in-portfolio (excluding
consumer and covered loans): Quarter ended Quarter ended
30-Jun-16 31-Mar-16 (In thousands) BPPR
BPNA Popular, Inc. BPPR BPNA Popular,
Inc. Beginning balance NPLs $508,747 $31,778 $540,525 $519,385
$21,101 $540,486 Plus: New non-performing loans 105,903 9,338
115,241 100,543 23,259 123,802 Advances on existing non-performing
loans - 8 8 - 3 3 Less: Non-performing loans transferred to OREO
(14,336) (445) (14,781) (10,633) - (10,633) Non-performing loans
charged-off (25,875) (438) (26,313) (15,948) (657) (16,605) Loans
returned to accrual status / loan collections
(75,774) (18,881) (94,655) (84,600)
(11,928) (96,528) Ending balance NPLs $498,665
$21,360 $520,025 $508,747 $31,778
$540,525
Popular, Inc. Financial
Supplement to Second Quarter 2016 Earnings Release Table J -
Allowance for Credit Losses, Net Charge-offs and Related Ratios
(Unaudited)
Quarter ended Quarter ended Quarter ended
30-Jun-16 31-Mar-16 30-Jun-15 (Dollars in
thousands) Non-covered loans Covered loans
Total Non-covered loans Covered loans
Total Non-covered loans Covered loans Total
Balance at beginning of period $508,427 $30,045 $538,472
$502,935 $34,176 $537,111 $516,224 $72,473 $588,697 Provision
(reversal of provision) for loan losses 39,668
804 40,472 47,940 (3,105) 44,835
60,468 15,766 76,234
548,095 30,849 578,944 550,875 31,071
581,946 576,692 88,239 664,931
Net loans charged-off (recovered): BPPR Commercial 5,647 - 5,647
2,704 - 2,704 17,059 19,833 36,892 Construction (3,226) - (3,226)
311 - 311 1,721 14,615 16,336 Lease financing 434 - 434 1,638 -
1,638 973 - 973 Mortgage 13,464 699 14,163 14,696 996 15,692 10,739
178 10,917 Consumer 19,903 (431) 19,472
21,298 30 21,328 14,654 679
15,333 Total BPPR 36,222 268
36,490 40,647 1,026 41,673 45,146
35,305 80,451 BPNA Commercial (1,265) -
(1,265) 205 - 205 (879) - (879) Legacy [1] (893) - (893) (247) -
(247) 30 - 30 Mortgage 16 - 16 230 - 230 176 - 176 Consumer
1,321 - 1,321 1,613 -
1,613 1,969 - 1,969 Total BPNA
(821) - (821) 1,801 -
1,801 1,296 - 1,296 Total loans
charged-off - Popular, Inc. 35,401 268
35,669 42,448 1,026 43,474 46,442
35,305 81,747 Balance transferred from covered
to non-covered loans - - - -
- - 13,037 (13,037) - Net
(write-downs) recoveries [2] 5,445 -
5,445 - - - (30,548) (1,823)
(32,371) Balance at end of period
$518,139 $30,581 $548,720 $508,427
$30,045 $538,472 $512,739 $38,074
$550,813 POPULAR, INC. Annualized net charge-offs to
average loans held-in-portfolio 0.63 % 0.62 % 0.76 % 0.76 % 0.89 %
1.41 % Provision for loan losses to net charge-offs [3] 1.27 x 1.29
x 1.13 x 1.03 x 1.28 x 0.92 x BPPR Annualized net
charge-offs to average loans held-in-portfolio 0.83 % 0.81 % 0.93 %
0.92 % 1.10 % 1.71 % Provision for loan losses to net charge-offs
[3] 1.21 x 1.22 x 1.08 x 0.98 x 1.32 x 0.94 x BPNA
Annualized net charge-offs (recoveries) to average loans
held-in-portfolio (0.06) % 0.15 % 0.12 % Provision for loan losses
to net charge-offs (recoveries)
(1.60) 2.26
N.M. [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 BPNA segment. [2] Net write-downs are related to loans
sold or reclassified to held-for-sale. [3] Excluding provision for
loan losses and net (write-downs) recoveries related to loans sold
or reclassified to held-for-sale. N.M. - Not meaningful.
Popular, Inc. Financial Supplement to Second
Quarter 2016 Earnings Release Table K - Allowance for Loan
Losses - Breakdown of General and Specific Reserves -
CONSOLIDATED (Unaudited)
30-Jun-16 (Dollars
in thousands) Commercial Construction
Legacy [2] Mortgage Lease financing
Consumer Total[3] Specific ALLL $53,350 $116 $- $43,909 $548
$24,898 $122,821 Impaired loans [1] $335,881 $1,036 $- $484,725
$2,110 $111,610 $935,362 Specific ALLL to impaired loans
[1] 15.88 % 11.20 % - % 9.06 % 25.97 % 22.31 % 13.13 %
General ALLL $156,331 $10,949 $1,852 $97,577 $9,546 $119,063
$395,318 Loans held-in-portfolio, excluding impaired loans [1]
$10,023,934 $716,296 $49,709 $6,379,393 $661,984 $3,773,983
$21,605,299 General ALLL to loans held-in-portfolio, excluding
impaired loans [1] 1.56 % 1.53 % 3.73 % 1.53 % 1.44 %
3.15 % 1.83 % Total ALLL $209,681 $11,065 $1,852 $141,486 $10,094
$143,961 $518,139 Total non-covered loans held-in-portfolio [1]
$10,359,815 $717,332 $49,709 $6,864,118 $664,094 $3,885,593
$22,540,661 ALLL to loans held-in-portfolio [1] 2.02
% 1.54 % 3.73 % 2.06 % 1.52 % 3.70 % 2.30 % [1] Excludes covered
loans acquired on the Westernbank FDIC-assisted transaction. [2]
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 BPNA reportable segment. [3] Excludes
covered loans acquired on the Westernbank FDIC-assisted
transaction. As of June 30, 2016 the general allowance on the
covered loans amounted to $30.6 million.
31-Mar-16 (Dollars in
thousands) Commercial Construction
Legacy [2] Mortgage Lease financing
Consumer Total[3] Specific ALLL $55,098 $172 $- $43,252 $608
$24,907 $124,037 Impaired loans [1] $338,980 $2,020 $- $479,092
$2,391 $112,167 $934,650 Specific ALLL to impaired loans
[1] 16.25 % 8.51 % - % 9.03 % 25.43 % 22.21 % 13.27 %
General ALLL $152,079 $8,804 $2,484 $86,347 $10,427 $124,249
$384,390 Loans held-in-portfolio, excluding impaired loans [1]
$9,889,409 $732,838 $61,044 $6,500,109 $640,751 $3,748,936
$21,573,087 General ALLL to loans held-in-portfolio, excluding
impaired loans [1] 1.54 % 1.20 % 4.07 % 1.33 % 1.63 %
3.31 % 1.78 % Total ALLL $207,177 $8,976 $2,484 $129,599 $11,035
$149,156 $508,427 Total non-covered loans held-in-portfolio [1]
$10,228,389 $734,858 $61,044 $6,979,201 $643,142 $3,861,103
$22,507,737 ALLL to loans held-in-portfolio [1] 2.03
% 1.22 % 4.07 % 1.86 % 1.72 % 3.86 % 2.26 % [1] Excludes covered
loans acquired on the Westernbank FDIC-assisted transaction. [2]
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 BPNA reportable segment. [3] Excludes
covered loans acquired on the Westernbank FDIC-assisted
transaction. As of March 31, 2016 the general allowance on the
covered loans amounted to $30.0 million.
Variance (Dollars in
thousands) Commercial Construction
Legacy Mortgage Lease financing
Consumer Total Specific ALLL $(1,748) $(56) $- $657
$(60) $(9) $(1,216) Impaired loans $(3,099)
$(984) $- $5,633 $(281) $(557)
$712 General ALLL $4,252 $2,145 $(632) $11,230 $(881)
$(5,186) $10,928 Loans held-in-portfolio, excluding impaired loans
$134,525 $(16,542) $(11,335)
$(120,716) $21,233 $25,047 $32,212
Total ALLL $2,504 $2,089 $(632) $11,887 $(941) $(5,195)
$9,712 Total non-covered loans held-in-portfolio
$131,426 $(17,526) $(11,335) $(115,083)
$20,952 $24,490 $32,924
Popular, Inc. Financial Supplement to Second Quarter 2016
Earnings Release Table L - Allowance for Loan Losses -
Breakdown of General and Specific Reserves - PUERTO RICO
OPERATIONS (Unaudited)
30-Jun-16 Puerto Rico (In thousands)
Commercial Construction Mortgage
Lease financing Consumer Total
Allowance for
credit losses: Specific ALLL non-covered loans $53,350 $116
$42,106 $548 $24,167 $120,287 General ALLL non-covered loans
146,477 3,489 94,618 9,546
106,304 360,434 ALLL - non-covered loans
199,827 3,605 136,724 10,094
130,471 480,721 Specific ALLL covered loans - - - - - -
General ALLL covered loans - -
29,951 - 630 30,581 ALLL - covered loans
- - 29,951 - 630
30,581 Total ALLL $199,827 $3,605
$166,675 $10,094 $131,101 $511,302
Loans
held-in-portfolio: Impaired non-covered loans $335,881 $1,036
$476,161 $2,110 $109,130 $924,318 Non-covered loans
held-in-portfolio, excluding impaired loans 6,881,171
102,606 5,544,401 661,984 3,212,552
16,402,714 Non-covered loans held-in-portfolio
7,217,052 103,642 6,020,562 664,094
3,321,682 17,327,032 Impaired covered loans - - - - - -
Covered loans held-in-portfolio, excluding impaired loans
- - 589,256 - 17,914
607,170 Covered loans held-in-portfolio -
- 589,256 - 17,914 607,170 Total
loans held-in-portfolio $7,217,052 $103,642
$6,609,818 $664,094 $3,339,596
$17,934,202 31-Mar-16 Puerto Rico (In thousands)
Commercial Construction Mortgage
Lease financing Consumer Total
Allowance for
credit losses: Specific ALLL non-covered loans $55,098 $172
$41,660 $608 $24,326 $121,864 General ALLL non-covered loans
142,492 4,065 82,840 10,427
111,459 351,283 ALLL - non-covered loans
197,590 4,237 124,500 11,035
135,785 473,147 Specific ALLL covered loans - - - - - -
General ALLL covered loans - -
29,822 - 223 30,045 ALLL - covered loans
- - 29,822 - 223
30,045 Total ALLL $197,590 $4,237
$154,322 $11,035 $136,008 $503,192
Loans
held-in-portfolio: Impaired non-covered loans $338,980 $2,020
$471,183 $2,391 $109,920 $924,494 Non-covered loans
held-in-portfolio, excluding impaired loans 7,029,311
103,124 5,628,576 640,751 3,199,171
16,600,933 Non-covered loans held-in-portfolio
7,368,291 105,144 6,099,759 643,142
3,309,091 17,525,427 Impaired covered loans - - - - - -
Covered loans held-in-portfolio, excluding impaired loans
- - 606,711 - 18,419
625,130 Covered loans held-in-portfolio -
- 606,711 - 18,419 625,130 Total
loans held-in-portfolio $7,368,291 $105,144
$6,706,470 $643,142 $3,327,510
$18,150,557
Variance
(In thousands) Commercial Construction
Mortgage Lease financing Consumer Total
Allowance for credit losses: Specific ALLL non-covered loans
$(1,748) $(56) $446 $(60) $(159) $(1,577) General ALLL
non-covered loans 3,985 (576) 11,778
(881) (5,155) 9,151 ALLL - non-covered loans
2,237 (632) 12,224 (941)
(5,314) 7,574 Specific ALLL covered loans - - - - - -
General ALLL covered loans - - 129
- 407 536 ALLL - covered loans -
- 129 - 407 536 Total ALLL
$2,237 $(632) $12,353 $(941)
$(4,907) $8,110
Loans held-in-portfolio:
Impaired non-covered loans $(3,099) $(984) $4,978 $(281) $(790)
$(176) Non-covered loans held-in-portfolio, excluding
impaired loans (148,140) (518) (84,175)
21,233 13,381 (198,219) Non-covered loans
held-in-portfolio (151,239) (1,502)
(79,197) 20,952 12,591 (198,395) Impaired
covered loans - - - - - - Covered loans held-in-portfolio,
excluding impaired loans - - (17,455)
- (505) (17,960) Covered loans
held-in-portfolio - - (17,455) -
(505) (17,960) Total loans held-in-portfolio
$(151,239) $(1,502) $(96,652) $20,952
$12,086 $(216,355)
Popular, Inc.
Financial Supplement to Second Quarter 2016 Earnings Release
Table M - Allowance for Loan Losses - Breakdown of General and
Specific Reserves - U.S. MAINLAND OPERATIONS (Unaudited)
30-Jun-16
U.S. Mainland (In thousands) Commercial
Construction Legacy Mortgage Consumer
Total
Allowance for credit losses: Specific ALLL $- $- $-
$1,803 $731 $2,534 General ALLL 9,854
7,460 1,852 2,959 12,759 34,884 Total
ALLL $9,854 $7,460 $1,852 $4,762
$13,490 $37,418
Loans held-in-portfolio:
Impaired loans $- $- $- $8,564 $2,480 $11,044 Loans
held-in-portfolio, excluding impaired loans 3,142,763
613,690 49,709 834,992 561,431
5,202,585 Total loans held-in-portfolio $3,142,763
$613,690 $49,709 $843,556 $563,911
$5,213,629 31-Mar-16 U.S. Mainland (In
thousands) Commercial Construction
Legacy Mortgage Consumer Total
Allowance
for credit losses: Specific ALLL $- $- $- $1,592 $581 $2,173
General ALLL 9,587 4,739 2,484
3,507 12,790 33,107 Total ALLL
$9,587 $4,739 $2,484 $5,099 $13,371
$35,280
Loans held-in-portfolio: Impaired loans $- $-
$- $7,909 $2,247 $10,156 Loans held-in-portfolio, excluding
impaired loans 2,860,098 629,714 61,044
871,533 549,765 4,972,154 Total loans
held-in-portfolio $2,860,098 $629,714
$61,044 $879,442 $552,012 $4,982,310
Variance (In thousands)
Commercial Construction Legacy
Mortgage Consumer Total
Allowance for credit
losses: Specific ALLL $- $- $- $211 $150 $361 General
ALLL 267 2,721 (632) (548)
(31) 1,777 Total ALLL $267
$2,721 $(632) $(337) $119 $2,138
Loans held-in-portfolio: Impaired loans $- $- $- $655 $233
$888 Loans held-in-portfolio, excluding impaired loans
282,665 (16,024) (11,335)
(36,541) 11,666 230,431 Total loans held-in-portfolio
$282,665 $(16,024) $(11,335)
$(35,886) $11,899 $231,319
Popular,
Inc. Financial Supplement to Second Quarter 2016 Earnings
Release Table N - Reconciliation to GAAP Financial
Measures (Unaudited) (In thousands, except
share or per share information) 30-Jun-16
31-Mar-16 30-Jun-15 Total stockholders’ equity
$5,359,831 $5,250,300 $4,949,653 Less: Preferred stock (50,160)
(50,160) (50,160) Less: Goodwill (631,095) (631,095) (505,435)
Less: Other intangibles (50,983) (54,080)
(74,854) Total tangible common equity
$4,627,593 $4,514,965 $4,319,204 Total assets
$37,606,148 $36,147,009 $36,741,250 Less: Goodwill (631,095)
(631,095) (505,435) Less: Other intangibles (50,983)
(54,080) (74,854) Total tangible assets
$36,924,070 $35,461,834 $36,160,961
Tangible common equity to tangible assets 12.53 % 12.73 % 11.94 %
Common shares outstanding at end of period 103,703,041 103,670,005
103,503,014 Tangible book value per common share
$44.62 $43.55 $41.73
Popular, Inc. Financial Supplement to
Second Quarter 2016 Earnings Release Table O - Financial
Information - Westernbank Loans (Unaudited)
Revenues Quarters ended (In thousands)
30-Jun-16 31-Mar-16 Variance Interest income on WB
loans $49,794 $44,904 $4,890 FDIC
loss-share expense: Amortization of indemnification asset (4,036)
(4,042) 6 80% mirror accounting on credit impairment losses
(reversal) [1] 475 (2,093) 2,568 80% mirror accounting on
reimbursable expenses 2,235 3,950 (1,715)
80% mirror accounting on recoveries on
covered assets, including rental income on OREOs, subject to
reimbursement to the FDIC
(3,956) (645) (3,311) Change in true-up payment obligation (7,688)
(443) (7,245) Other 394 127 267
Total FDIC loss-share expense (12,576) (3,146)
(9,430) Total revenues 37,218 41,758
(4,540) Provision (reversal) for loan losses- WB loans
(7,282) (356) (6,926) Total revenues
less provision (reversal) for loan losses $44,500
$42,114 $2,386
[1]
Reductions in expected cash flows for ASC 310-30 loans, which may
impact the provision for loan losses, may consider reductions in
both principal and interest cash flow expectations. The amount
covered under the FDIC loss-sharing agreements for interest not
collected from borrowers is limited under the agreements
(approximately 90 days); accordingly, these amounts are not subject
fully to the 80% mirror accounting.
Non-personnel
operating expenses Quarters ended [2] (In thousands)
[1] 30-Jun-16 31-Mar-16 Variance Professional
fees $5,991 $3,316 $2,675 OREO expenses 6,389 2,205 4,184 Other
operating expenses 1,924 1,971 (47)
Total operating expenses $14,304 $7,492
$6,812
[1]
Includes expenses related to loans subject, and not subject, to the
FDIC loss-sharing agreement.
[2]
Expense reimbursements from the FDIC may be recorded with a time
lag, since these are claimed upon the event of loss or charge-off
of the loans which may occur in a subsequent period.
Quarterly average assets Quarters ended (In millions)
30-Jun-16 31-Mar-16 Variance Loans $2,013
$2,058 $(45) FDIC loss-share asset 211 233
(22)
Activity
in the carrying amount and accretable yield of loans accounted for
under ASC 310-30 Quarters ended
30-Jun-16 31-Mar-16 (In thousands)
Accretable yield Carrying amount of loans Accretable
yield Carrying amount of loans Beginning balance $1,128,808
$1,935,441 $1,112,458 $1,974,501 Accretion (48,476) 48,476 (43,533)
43,533 Changes in expected cash flows (8,652) - 59,883 -
Collections / loan sales / charge-offs [2] -
(183,974) - (82,593) Ending balance 1,071,680
1,799,943 1,128,808 1,935,441 Allowance for loan losses -
ASC 310-30 loans - (66,995) -
(62,967) Ending balance, net of allowance for loan losses
$1,071,680 $1,732,948 $1,128,808
$1,872,474 [1] The carrying amount of loans acquired from
Westernbank and accounted for under ASC 310-30 which remain subject
to the loss-sharing agreement with the FDIC amounted to
approximately $597 million as of June 30, 2016 and $615 million as
of March 31, 2016.
[2] For the quarter ended June 30, 2016,
includes the impact of the bulk sale of loans with a carrying value
of approximately $99 million.
Activity in the carrying amount of
the FDIC indemnity asset Quarters ended (In thousands)
30-Jun-16
31-Mar-16 Balance at beginning of period $219,448 $310,221
Amortization (4,036) (4,042) Credit impairment losses (reversal) to
be covered under loss-sharing agreements 475 (2,093) Reimbursable
expenses to be covered under loss-sharing agreements 2,235 3,950
Recoveries on covered assets (4,093) - Net payments from FDIC under
loss-sharing agreements -
(88,588) Balance at end of period
$214,029 $219,448
Activity in the remaining FDIC loss-share asset amortization
Quarters ended (In thousands)
30-Jun-16 31-Mar-16 Balance at beginning of
period $25,205 $26,100 Amortization (4,036) (4,042) Impact of lower
projected losses 2,022
3,147 Balance at end of period
$23,191 $25,205
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160726005069/en/
Popular, Inc.Investor Relations:Brett Scheiner,
212-417-6721Investor Relations OfficerBScheiner@BPOP.comorMedia
Relations:Teruca Rullán, 787-281-5170Mobile: 917-679-3596Senior
Vice President, Corporate Communications
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