- Net income of $92.9 million for the
first quarter of 2017
- Net interest margin of 4.08% in Q1
2017, compared to 4.02% in Q4 2016
- Credit Quality (excluding covered
loans):
- Non-performing loans
held-in-portfolio (NPLs) increased by $17.7 million from Q4 2016;
NPLs to loans ratio stable at 2.5% from Q4 2016;
- Net charge-offs (NCOs) decreased by
$20.6 million; NCOs at 0.63% of average loans held-in-portfolio vs.
1.00% in Q4 2016;
- Allowance for loan losses of $516.7
million vs. $510.3 million in Q4 2016; Allowance for loan losses to
loans held-in-portfolio at 2.27% vs. 2.24% in Q4 2016;
- Allowance for loan losses to NPLs at
89.8% vs. 91.5% in Q4 2016.
- Common Equity Tier 1 ratio of
16.33%, Common Equity per Share of $50.41 and Tangible Book Value
per Share of $43.84 at March 31, 2017
Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP)
reported a net income of $92.9 million for the quarter ended March
31, 2017, compared to net loss of $4.1 million for the quarter
ended December 31, 2016. The results for the fourth quarter of 2016
reflect an after-tax charge amounting to $87 million, related to
the unfavorable award under the portfolio sales arbitration with
the FDIC, as receiver.
Mr. Richard L. Carrión, Chairman of the Board and Chief
Executive Officer, said: “We are pleased to start 2017 generating
strong revenues and stable credit quality, despite the challenges
in our local market. We also completed a $75 million stock
repurchase in the period and remain encouraged by our continued
growth in the U.S.”
Earnings Highlights (Unaudited)
Quarters ended (Dollars in thousands, except per share information)
31-Mar-17 31-Dec-16 31-Mar-16 Net interest
income $362,098 $355,405 $352,412 Provision for loan losses –
non-covered loans 42,057 40,924 47,940 Provision (reversal of
provision) for loan losses – covered loans [1] (1,359)
441 (3,105) Net interest income after provision for
loan losses 321,400 314,040 307,577 FDIC loss-share expense (8,257)
(130,334) (3,146) Other non-interest income 124,126 130,159 114,776
Operating expenses 311,318 320,871 301,943
Income (loss) from continuing operations before income tax 125,951
(7,006) 117,264 Income tax expense (benefit) 33,006
(1,766) 32,265 Income (loss) from continuing operations
92,945 (5,240) 84,999 Income from discontinued operations, net of
tax - 1,135 - Net income (loss) $92,945
$(4,105) $84,999 Net income (loss) applicable to
common stock $92,014 $(5,036) $84,068 Net
income (loss) per common share from continuing operations - Basic
$0.89 $(0.06) $0.81 Net income (loss) per
common share from continuing operations - Diluted $0.89
$(0.06) $0.81 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 FDIC loss sharing agreement.
Significant Events
During the quarter ended March 31, 2017, the Corporation
completed the previously announced common stock repurchase plan of
$75 million, acquiring 1,847,372 shares at a price of $40.60. The
plan was completed under a privately negotiated accelerated share
repurchase transaction (“ASR”). The Corporation recognized $79.5
million in treasury stock, based on the stock’s spot price, offset
by a $4.5 million adjustment to capital surplus resulting from the
decline in the Corporation’s stock price during the term of the
ASR.
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
“Adjusted net income” of the Corporation and excludes the impact of
certain transactions on the results of its operations. Management
believes that the “Adjusted net income” provides meaningful
information about the underlying performance of the Corporation’s
ongoing operations. The “Adjusted net income” is a non-GAAP
financial measure.
No adjustments are reflected for the first quarter of 2017. The
following tables reflect the results of operations for the fourth
quarter of 2016, with adjustments to exclude the impact of certain
events to arrive at the adjusted net income.
Adjusted Net Income - Reconciliation to GAAP Financial
Measures
(Unaudited) (In thousands) 31-Dec-16 Pre-tax
Income tax effect Impact on net income
U.S.
GAAP Net loss $(4,105) Non-GAAP
Adjustments: FDIC arbitration award[1] 116,833 (30,123) [3] 86,710
Other FDIC - LSA adjustments[2] 9,874 (2,797) [3] 7,077 Income from
discontinued operations[4] (2,015) 880
(1,135)
Adjusted net income (Non-GAAP)
$88,547 [1]Represents the arbitration decision
denying BPPR's request for reimbursement in certain shared loss
claims. [2]Additional adjustments, including prior period
recoveries, related to restructured commercial loans to reduce the
indemnification asset to its expected realizable value. [3]Gains
and losses related to assets acquired from Westernbank as part of
the FDIC assisted transaction are subject to the capital gains tax
rate of 20%. Other items related to the FDIC loss-sharing
agreements are subject to the statutory tax rate of 39%.
[4]Represents income from discontinued operations associated with
the BPNA reorganization.
Net interest income
Net interest income for the quarter ended March 31, 2017 was
$362.1 million, compared to $355.4 million for the previous
quarter. The impact of having two fewer days in the quarter had a
negative impact in the net interest income of $4.9 million. Net
interest margin was 4.08% for the quarter compared to 4.02% for the
previous quarter.
The increase in net interest income was mainly related to:
- Higher income from money market and
investment securities by $5.1 million, or 14 basis points, due to
higher volume and yields, particularly on U.S. Treasuries and
mortgage-backed securities related to purchases during the quarter
and the increase in Fed funds rates on December, 2016 and March,
2017;
- Higher income from commercial loans by
$2.3 million, or 6 basis points, driven by loan growth in the U.S.
and higher yields at BPPR mainly due to the impact on the variable
rate portfolio of the increase in market rates in the recent
months, partially offset by two fewer days as previously mentioned;
and
- Lower interest expense from time
deposits by $1.3 million, or 4 basis points, mainly from lower
average balances and the impact of an unfavorable adjustment on
equity linked deposits at BPPR recorded during the previous
quarter.
These positive variances were partially offset by:
- Lower income from consumer loans by
$2.1 million driven by lower average balances both at BPPR and
BPNA, partially offset by higher yield resulting from variable rate
loans and the re-pricing, renewals and acquisitions of consumer
loans in a higher interest rate environment; and
- Lower income from the Westernbank
(“WB”) loan portfolio by $1.4 million, or 3 basis points, due to
normal run-off and as a result of the quarterly recast
process.
BPPR’s net interest income amounted to $310.2 million for the
quarter ended March 31, 2017, compared to $305.4 million for the
previous quarter. The increase of $4.8 million in net interest
income was mainly due to higher income from money market and
investment securities, higher yield from commercial loans and lower
cost of time deposits, as discussed above, partially offset by
lower income from WB loans and consumer loans. The net interest
margin for the first quarter was 4.46%, an increase of 7 basis
points when compared to 4.39% for the previous quarter. The
deployment of liquidity in investment securities and the impact of
higher rates resulting from recent market rate movements, had a
positive impact on the net interest income. P.R. earning assets
yielded 4.81%, compared to 4.77% in the previous quarter, while the
cost of interest bearing liabilities was 0.50%, compared to 0.54%
in the previous quarter.
BPNA’s net interest income was $67.1 million, compared to $65.3
million in the previous quarter mainly due to higher income from
commercial and construction loans, partially offset by lower income
from lower volume of consumer loans and higher deposit costs. Net
interest margin increased 5 basis points to 3.52% compared to 3.47%
for the previous quarter driven by higher yields on interest
earning assets. U.S. earning assets yielded 4.28%, compared to
4.21% in the previous quarter, while the cost of interest bearing
liabilities was 0.98%, compared to 0.96% in the previous
quarter.
Non-interest income (loss)
The favorable variance in non-interest income (loss) of $116.0
million, when compared to the fourth quarter of 2016, was primarily
driven by:
- Lower FDIC loss-share expense by $122.1
million primarily due to a $116.8 million charge related to the
portfolio sales arbitration decision denying BPPR's claims under
the commercial loss sharing agreement and $9.9 million in
additional adjustments related to restructured commercial loans,
both recorded during the fourth quarter of 2016; and
- Higher other operating income by $4.0
million mainly due to higher earnings from investments under the
equity method by $3.4 million.
These positive variances were partially offset by:
- Lower other service fees by $9.1
million due to lower insurance commission revenues primarily
related to $7.1 million in contingent commissions recorded during
the fourth quarter of 2016. Refer to Table F for a breakdown of
other service fees; and
- Lower income from mortgage banking
activities by $3.1 million due to higher trading account loss by
$5.7 million from higher realized losses on closed derivative
positions, partially offset by higher net gain on sale of loans by
$2.8 million due to higher gains from securitization
transactions.
Refer to Table B for further details.
Financial Impact of the 2010 FDIC-Assisted Transaction
(Unaudited) Quarters ended (In
thousands) 31-Mar-17 31-Dec-16 31-Mar-16
Income
Statement
Interest income on WB loans $38,182 $39,642 $44,904 Total FDIC
loss-share expense (8,257) (130,334) (3,146) Provision (reversal)
for loan losses- WB loans (499) (2,292) (356)
Total revenues (expenses) less provision (reversal) for loan losses
$30,424 $(88,400) $42,114
Balance
Sheet
WB loans $1,808,057 $1,861,106 $2,071,191 FDIC loss-share asset
58,793 69,334 219,448 FDIC true-up payment obligation
160,543 153,158 120,188
See additional details on accounting for the 2010 FDIC-Assisted
transaction in Table O.
Operating expenses
Operating expenses amounted to $311.3 million for the first
quarter of 2017, a decrease of $9.6 million when compared to the
fourth quarter of 2016. The decrease in operating expenses was
driven primarily by:
- Lower net occupancy expense by $1.1
million as a result of lower maintenance expense;
- Lower professional fees by $16.4
million mainly due to legal fees related to the FDIC arbitration
proceedings incurred during the fourth quarter of 2016,
programming, processing and other technology services; and
- Lower business promotion expense by
$3.9 million due to lower seasonal advertising expense at
BPPR.
These decreases were partially offset by:
- Higher personnel cost by $3.2 million
mainly due to higher salaries, commission, incentives and other
bonuses; and
- Higher other operating expenses by $8.8
million as a result of a write-down of $7.6 million recognized
during the first quarter of 2017, related to capitalized software
costs for a project which was discontinued by the Corporation.
Non-personnel credit-related costs, which include collections,
appraisals, credit related fees, and OREO expenses, amounted to
$16.6 million for the first quarter of 2017, compared to $14.8
million for the fourth quarter of 2016. The increase was
principally due to higher collections expense at BPPR.
Full-time equivalent employees were 7,820 as of March 31, 2017,
compared to 7,828 as of December 31, 2016.
For a breakdown of operating expenses by category refer to table
B.
Income taxes
For the quarter ended March 31, 2017, the Corporation recorded
an income tax expense of $33.0 million, compared to an income tax
benefit of $1.8 million from its continued operations for the
previous quarter. The increase in the income tax expense is mainly
due to the operating loss at BPPR for the fourth quarter of 2016,
driven by the unfavorable FDIC arbitration decision, compared to
the taxable income for the current quarter.
The effective income tax rate for the first quarter of 2017 was
26%, compared to 25% for previous quarter. The effective tax rate
is impacted by the composition and source of the taxable
income.
Credit Quality
Despite the lingering macroeconomic conditions in Puerto Rico,
the Corporation continued to reflect stable credit quality metrics
when compared to the fourth quarter of 2016. The BPPR segment
experienced a decline in net charge-offs, while higher NPLs and
inflows to NPLs was driven by a single commercial relationship. The
U.S. operation continued to reflect positive results with strong
growth and favorable credit quality metrics. The Corporation
remains attentive to changes in credit quality trends given the
uncertain economic environment in the island.
- Inflows of NPLs held-in-portfolio,
excluding consumer loans, increased by $21.7 million
quarter-over-quarter, mainly driven by higher inflows in the BPPR
commercial portfolio of $16.2 million, mostly due to the addition
of a single $24.5 million relationship.
- Total non-performing loans
held-in-portfolio increased by $17.7 million from the fourth
quarter of 2016, driven by higher BPPR commercial NPLs of $15.8
million driven by a single $24.5 million relationship. At March 31,
2017, NPLs to total loans held-in-portfolio ratio remained at 2.5%,
from the fourth quarter of 2016.
- Net charge-offs decreased by $20.6
million from the fourth quarter of 2016. This decrease was mainly
related to the following reductions in the BPPR segment: (i) a $7.4
million decrease in mortgage NCOs, (ii) a $6.6 million decrease in
the commercial NCOs, as the prior quarter included a $5.9 million
charge-off related to a single borrower, and (iii) a $6.2 million
decrease in consumer NCOs, mostly credit cards and auto loans. The
Corporation’s ratio of annualized net charge-offs to average
non-covered loans held-in-portfolio stood at 0.63%, compared to
1.00% in the fourth quarter of 2016. Refer to Table J for further
information on net charge-offs and related ratios.
- The allowance for loan losses increased
by $6.4 million from the fourth quarter 2016 to $516.7 million,
primarily driven by higher reserves for the U.S. taxi medallion
portfolio. The general and specific reserves related to non-covered
loans totaled $398.6 million and $118.1 million, respectively, at
quarter-end, compared with $398.9 million and $111.4 million,
respectively, as of December 31, 2016. The ratio of the allowance
for loan losses to loans held-in-portfolio was 2.27% in the first
quarter of 2017, compared to 2.24% from the previous quarter.
- The ratio of the allowance for loan
losses to NPLs held-in-portfolio remained stable at 89.8%, compared
to 91.5% in the previous quarter.
- The provision for loan losses for
non-covered loans for the first quarter of 2017 increased slightly
by $1.1 million quarter-over-quarter to $42.1 million. The
provision to net charge-offs ratio was 118.03% in the first quarter
of 2017, compared to 72.80% in the previous quarter.
Non-Performing Assets (Unaudited)
(In thousands)
31-Mar-17 31-Dec-16 31-Mar-16 Total non-performing
loans held-in-portfolio, excluding covered loans $575,613 $557,915
$599,526 Non-performing loans held-for-sale - - 42,743 Other real
estate owned (“OREO”), excluding covered OREO 185,836
180,445 165,960 Total non-performing assets, excluding
covered assets 761,449 738,360 808,229 Covered loans and OREO
33,866 36,044 39,916 Total non-performing
assets $795,315 $774,404 $848,145 Net
charge-offs for the quarter (excluding covered loans)
$35,633 $56,216 $42,448 Ratios
(excluding covered loans):
Non-covered loans held-in-portfolio $22,734,721 $22,773,747
$22,507,737 Non-performing loans held-in-portfolio to loans
held-in-portfolio 2.53% 2.45% 2.66% Allowance for loan losses to
loans held-in-portfolio 2.27 2.24 2.26 Allowance for loan losses to
non-performing loans, excluding loans held-for-sale 89.77
91.47 84.80 Refer to Table H for additional
information.
Provision for Loan Losses
(Unaudited) Quarters ended (In thousands)
31-Mar-17 31-Dec-16 31-Mar-16 Provision for loan
losses: BPPR $31,478 $37,357 $43,871 BPNA 10,579
3,567 4,069 Total provision for loan losses - non-covered
loans $42,057 $40,924 $47,940 Provision
(reversal) for loan losses - covered loans (1,359)
441 (3,105) Total provision for loan losses $40,698
$41,365 $44,835
Credit Quality by
Segment (Unaudited) (In thousands)
Quarters ended
BPPR 31-Mar-17 31-Dec-16 31-Mar-16
Provision for loan losses $31,478 $37,357 $43,871 Net
charge-offs 32,945 53,416 40,647 Total non-performing loans
held-in-portfolio, excluding covered loans 548,385 532,508 561,612
Allowance / non-covered loans held-in-portfolio 2.75%
2.73% 2.70%
Quarters ended
BPNA 31-Mar-17 31-Dec-16 31-Mar-16
Provision for loan losses $10,579 $3,567 $4,069 Net charge-offs
2,688 2,800 1,801 Total non-performing loans held-in-portfolio
27,228 25,407 37,914 Allowance / non-covered loans
held-in-portfolio 0.87% 0.75% 0.71%
Financial Condition Highlights
(Unaudited) (In thousands) 31-Mar-17 31-Dec-16
31-Mar-16 Cash and money market investments $3,993,572
$3,252,611 $2,327,083 Trading and investment securities 9,511,124
8,535,530 6,984,354 Loans not covered under loss-sharing agreements
with the FDIC 22,734,721 22,773,747 22,507,737 Loans covered under
loss-sharing agreements with the FDIC 551,980 572,878 625,130 Total
assets 40,259,282 38,661,609 36,147,009 Deposits 32,212,579
30,496,224 27,526,593 Borrowings 1,993,886 2,055,477 2,349,992
Liabilities from discontinued operations - - 1,815 Total
liabilities 35,069,069 33,463,652 30,896,709 Stockholders’ equity
5,190,213 5,197,957 5,250,300
Total assets increased by $1.6 billion from the fourth quarter
of 2016 driven by:
- An increase of $0.8 billion in money
market investments mainly at BPPR due to the higher liquidity
driven by increase in deposits balances; and
- An increase of $1.0 billion in
investment securities available-for-sale mainly at BPPR due to
purchases of U.S. Treasury securities and mortgage-backed agency
pools in anticipation of upcoming maturities.
These positive variances were partially offset by:
- A net decrease of $39.0 million in
non-covered loans held-in-portfolio mainly driven by lower balances
of residential mortgage and commercial loans at BPPR by $184.6
million, partially offset by growth in the commercial portfolio at
BPNA by $151.1 million; and
- A decrease of $33.7 million in other
assets mainly driven by the change in deferred taxes and prepaid
income taxes by $26.1 million and $11.0 million, respectively, and
a decrease in servicing advances by $8.0 million. These unfavorable
variances were partially offset by an increase of $19.4 million in
guaranteed mortgage loan claims receivable.
Total liabilities increased by $1.6 billion from the fourth
quarter of 2016, principally driven by:
- An increase of $1.7 billion in deposits
mainly due to an increase in retail demand deposits and deposits
from the Puerto Rico public sector at BPPR, and increases in
savings and time deposits at BPPR and BPNA. Refer to Table G for
additional information on deposits; partially offset by:
- A decrease of $49.3 million in other
liabilities mainly driven by a decrease in accrued interest payable
of $11.3 million, mainly at Popular, Inc. Holding, and a decline in
the amounts payable to the FDIC due to payments of $23.7 million
during the first quarter related to the loss sharing
agreement.
Stockholders’ equity decreased by approximately $7.7 million
from the fourth quarter of 2016, mainly as a result of a net income
for the quarter of $92.9 million, offset by declared dividends of
$25.6 million on common stock and $0.9 million in dividends on
preferred stock, and the impact of the $75 million buy back
completed during the quarter. As a result of the ASR transaction,
discussed in the Significant Events section, the Corporation
recognized $79.5 million in treasury stock, based on the stock’s
spot price, offset by a $4.5 million adjustment to capital surplus,
resulting from the decline in the Corporation’s stock price during
the term of the ASR.
Common equity tier-1 ratio (“CET1”), common equity per share and
tangible book value per share were 16.33%, $50.41 and $43.84,
respectively at March 31, 2017 compared to 16.47%, $50.08 and
$43.12 at December 31, 2016. Refer to Table A for capital
ratios.
Cautionary Note Regarding
Forward-Looking Statements
The information contained in this press release contains
“forward-looking statements” within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are not historical facts, but instead represent only
management’s beliefs regarding future events and current
expectations, many of which, by their nature, are inherently
uncertain and outside of the control of the Corporation. It is
possible that the Corporation’s actual results and financial
condition may differ, possibly materially, from the anticipated
results and financial condition indicated or implied in these
forward-looking statements. Please refer to our Annual Report on
Form 10-K for the year ended December 31, 2016, and our other
filings with the Securities and Exchange Commission for a
discussion of some of the risks and important factors that could
affect the Corporation’s future results and financial condition.
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.
Conference Call
Popular will hold a conference call to discuss its financial
results today Tuesday, April 25, 2017 at 11:00 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 a 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 Thursday, May 25, 2017. The replay dial in
is 1-877-344-7529 or 1-412-317-0088. The replay passcode is
10103705.
An electronic version of this press release can be found at the
Corporation’s website: www.popular.com.
Popular, Inc.
Financial Supplement to First Quarter
2017 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 - Intentionally Left Blank (Consolidated Average
Balances and Yield / Rate Analysis - YTD) Table F - Mortgage
Banking Activities & 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 Covered Loans
POPULAR, INC. Financial Supplement to First Quarter 2017
Earnings Release Table A - Selected Ratios and Other
Information (Unaudited)
Quarters ended 31-Mar-17
31-Dec-16 31-Mar-16 Basic EPS from continuing operations
$0.89 $(0.06) $0.81 Basic EPS from discontinued operations $- $0.01
$- Total Basic EPS $0.89 $(0.05) $0.81 Diluted EPS from continuing
operations $0.89 $(0.06) $0.81 Diluted EPS from discontinued
operations $- $0.01 $- Total Diluted EPS $0.89 $(0.05) $0.81
Average common shares outstanding 102,932,989 103,368,820
103,188,815 Average common shares outstanding - assuming dilution
103,113,895 103,368,820 103,269,813 Common shares outstanding at
end of period 101,956,740 103,790,932 103,670,005 Market
value per common share $40.73 $43.82 $28.61 Market
capitalization - (In millions) $4,153 $4,548 $2,966 Return
on average assets 0.95% (0.04%) 0.95% . . Return on average common
equity 7.13% (0.38%) 6.58% Net interest margin 4.08% 4.02%
4.43% Common equity per share $50.41 $49.60 $50.16
Tangible common book value per common share (non-GAAP) $43.84
$43.12 $43.55 Tangible common equity to tangible assets
(non-GAAP) 11.29% 11.78% 12.73% Tier 1 capital
16.33%
16.47% 15.79% Total capital
19.33%
19.46% 18.78% Tier 1 leverage 10.61% 10.91% 11.46%
Common Equity Tier 1 capital
16.33%
16.47% 15.79%
POPULAR, INC.
Financial Supplement to First Quarter 2017 Earnings Release
Table B - Consolidated Statement of Operations
(Unaudited) Quarters ended Variance
Quarter ended Variance (In thousands, except per share
information) 31-Mar-17 31-Dec-16 Q1 2017 vs.
Q4 2016 31-Mar-16 Q1 2017 vs. Q1 2016 Interest
income: Loans $363,136 $363,252 $(116) $363,197 $(61) Money
market investments 6,573 5,108 1,465 2,863 3,710 Investment
securities 44,886 41,283 3,603 36,271 8,615 Trading account
securities 1,400 1,401 (1) 1,689
(289) Total interest income 415,995 411,044
4,951 404,020 11,975 Interest expense: Deposits
33,757 34,742 (985) 29,874 3,883 Short-term borrowings 1,095 1,761
(666) 1,861 (766) Long-term debt 19,045 19,136
(91) 19,873 (828) Total interest expense
53,897 55,639 (1,742) 51,608 2,289 Net
interest income 362,098 355,405 6,693 352,412 9,686 Provision for
loan losses - non-covered loans 42,057 40,924 1,133 47,940 (5,883)
Provision (reversal) for loan losses - covered loans (1,359)
441 (1,800) (3,105) 1,746 Net interest
income after provision for loan losses 321,400
314,040 7,360 307,577 13,823 Service charges
on deposit accounts 39,536 39,902 (366) 39,862 (326) Other service
fees 56,175 65,274 (9,099) 53,382 2,793 Mortgage banking activities
11,369 14,488 (3,119) 10,551 818 Net gain and valuation adjustments
on investment securities 162 30 132 - 162 Trading account loss
(278) (1,627) 1,349 (162) (116) Net loss on sale of loans,
including valuation adjustments on loans held-for-sale - - - (304)
304 Adjustments (expense) to indemnity reserves on loans sold
(1,966) (3,051) 1,085 (4,098) 2,132 FDIC loss-share expense (8,257)
(130,334) 122,077 (3,146) (5,111) Other operating income
19,128 15,143 3,985 15,545 3,583 Total
non-interest income (expense) 115,869 (175)
116,044 111,630 4,239 Operating expenses: Personnel
costs Salaries 78,376 77,275 1,101 77,298 1,078 Commissions,
incentives and other bonuses 20,078 17,405 2,673 20,769 (691)
Pension, postretirement and medical insurance 11,244 12,481 (1,237)
13,111 (1,867) Other personnel costs, including payroll taxes
15,909 15,292 617 15,913 (4)
Total personnel costs 125,607 122,453 3,154 127,091 (1,484) Net
occupancy expenses 20,776 21,883 (1,107) 20,430 346 Equipment
expenses 15,970 16,494 (524) 14,548 1,422 Other taxes 10,969 10,615
354 10,195 774 Professional fees Collections, appraisals and other
credit related fees 3,823 1,128 2,695 4,500 (677) Programming,
processing and other technology services 48,091 53,196 (5,105)
49,864 (1,773) Legal fees, excluding collections 3,296 14,702
(11,406) 6,254 (2,958) Other professional fees 14,040
16,667 (2,627) 14,841 (801) Total professional
fees 69,250 85,693 (16,443) 75,459 (6,209) Communications 5,949
5,780 169 6,320 (371) Business promotion 11,576 15,473 (3,897)
11,110 466 FDIC deposit insurance 6,493 5,926 567 7,370 (877) Other
real estate owned (OREO) expenses 12,818 13,703 (885) 9,141 3,677
Credit and debit card processing, volume, interchange and other
expenses 5,532 4,817 715 5,722 (190) Other operating expenses
Operational losses 7,536 6,579 957 2,661 4,875 All other
16,497 8,619 7,878 8,782 7,715 Total
other operating expenses 24,033 15,198 8,835 11,443 12,590
Amortization of intangibles 2,345 2,836 (491)
3,114 (769) Total operating expenses 311,318
320,871 (9,553) 301,943 9,375 Income
(loss) from continuing operations before income tax 125,951 (7,006)
132,957 117,264 8,687 Income tax expense (benefit) 33,006
(1,766) 34,772 32,265 741 Income (loss)
from continuing operations 92,945 (5,240) 98,185 84,999 7,946
Income from discontinued operations, net of tax -
1,135 (1,135) - -
Net income (loss)
$92,945 $(4,105) $97,050 $84,999
$7,946
Net income (loss) applicable to common stock
$92,014 $(5,036) $97,050 $84,068 $7,946
Net income (loss) per common share - basic: Net income
(loss) from continuing operations $0.89 $(0.06) $0.95 $0.81 $0.08
Net income from discontinued operations - 0.01
(0.01) - - Net income (loss) per common share - basic
$0.89 $(0.05) $0.94 $0.81 $0.08
Net income (loss) per common share - diluted: Net income
(loss) from continuing operations $0.89 $(0.06) $0.95 $0.81 $0.08
Net income from discontinued operations - 0.01
(0.01) - - Net income (loss) per common share -
diluted $0.89 $(0.05) $0.94 $0.81
$0.08
Dividends Declared per Common Share
$0.25 $0.15 $0.10 $0.15 $0.10
Popular, Inc. Financial Supplement to First Quarter 2017
Earnings Release Table C - Consolidated Statement of
Financial Condition (Unaudited)
Variance Q1 2017 vs. (In thousands) 31-Mar-17
31-Dec-16 31-Mar-16 Q4 2016 Assets: Cash and due from
banks $340,225 $362,394 $409,623 $(22,169) Money market investments
3,653,347 2,890,217 1,917,460 763,130 Trading account securities,
at fair value 50,985 59,805 71,284 (8,820) Investment securities
available-for-sale, at fair value 9,197,527 8,209,806 6,649,830
987,721 Investment securities held-to-maturity, at amortized cost
96,326 98,101 99,216 (1,775) Other investment securities, at lower
of cost or realizable value 166,286 167,818 164,024 (1,532) Loans
held-for-sale, at lower of cost or fair value 85,309 88,821 125,315
(3,512) Loans held-in-portfolio: Loans not covered under
loss-sharing agreements with the FDIC 22,858,556 22,895,172
22,618,488 (36,616) Loans covered under loss-sharing agreements
with the FDIC 551,980 572,878 625,130 (20,898) Less: Unearned
income 123,835 121,425 110,751 2,410 Allowance for loan losses
544,496 540,651 538,472 3,845 Total
loans held-in-portfolio, net 22,742,205 22,805,974
22,594,395 (63,769) FDIC loss-share asset 58,793
69,334 219,448 (10,541) Premises and equipment, net 548,995 543,981
527,493 5,014 Other real estate not covered under loss-sharing
agreements with the FDIC 185,836 180,445 165,960 5,391 Other real
estate covered under loss-sharing agreements with the FDIC 29,926
32,128 36,397 (2,202) Accrued income receivable 128,018 138,042
120,308 (10,024) Mortgage servicing assets, at fair value 193,698
196,889 205,051 (3,191) Other assets 2,111,806 2,145,510 2,156,030
(33,704) Goodwill 627,294 627,294 631,095 - Other intangible assets
42,706 45,050 54,080 (2,344) Total
assets $40,259,282 $38,661,609 $36,147,009
$1,597,673 Liabilities and Stockholders’ Equity:
Liabilities: Deposits: Non-interest bearing $7,262,328 $6,980,443
$6,384,093 $281,885 Interest bearing 24,950,251
23,515,781 21,142,500 1,434,470 Total deposits
32,212,579 30,496,224 27,526,593 1,716,355
Federal funds purchased and assets sold under agreements to
repurchase 434,714 479,425 760,154 (44,711) Other short-term
borrowings 1,200 1,200 6,370 - Notes payable 1,557,972 1,574,852
1,583,468 (16,880) Other liabilities 862,604 911,951 1,018,309
(49,347) Liabilities from discontinued operations - -
1,815 - Total liabilities 35,069,069
33,463,652 30,896,709 1,605,417 Stockholders’ equity:
Preferred stock 50,160 50,160 50,160 - Common stock 1,041 1,040
1,039 1 Surplus 4,261,346 4,255,022 4,231,233 6,324 Retained
earnings 1,286,706 1,220,307 1,156,476 66,399 Treasury stock
(89,128) (8,286) (6,858) (80,842) Accumulated other comprehensive
loss (319,912) (320,286) (181,750) 374
Total stockholders’ equity 5,190,213 5,197,957
5,250,300 (7,744) Total liabilities and stockholders’ equity
$40,259,282 $38,661,609 $36,147,009
$1,597,673
Popular, Inc. Financial Supplement to
First Quarter 2017 Earnings Release Table D - Consolidated
Average Balances and Yield / Rate Analysis - QUARTER
(Unaudited)
Quarter
ended Quarter ended Quarter ended Variance Variance 31-Mar-17
31-Dec-16 31-Mar-16 Q1 2017 vs. Q4 2016 Q1 2017 vs. Q1 2016 ($
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 $12,423
$52.9 1.71 % $12,185 $47.8 1.57 %
$8,951 $40.8 1.83 % $238 $5.1 0.14 %
$3,472 $12.1 (0.12) % Loans not covered under
loss-sharing agreements with the FDIC: Commercial 9,704 118.8 4.97
9,435 116.5 4.91 8,957 110.6 4.97 269 2.3 0.06 747 8.2 -
Construction 821 10.9 5.41 737 9.9 5.36 704 9.3 5.30 84 1.0 0.05
117 1.6 0.11 Mortgage 6,606 88.4 5.35 6,598 88.5 5.37 6,830 89.7
5.25 8 (0.1) (0.02) (224) (1.3) 0.10 Consumer 3,704 95.2 10.43
3,774 97.3 10.26 3,807 98.0 10.35 (70) (2.1) 0.17 (103) (2.8) 0.08
Lease financing 708 11.6 6.54 688 11.4
6.64 630 10.7 6.78 20 0.2 (0.10) 78
0.9 (0.24) Total loans (excluding WB loans) 21,543
324.9 6.09 21,232 323.6 6.07 20,928 318.3 6.11 311 1.3 0.02 615 6.6
(0.02) WB loans 1,810 38.2 8.53 1,845 39.6
8.56 2,058 44.9 8.76 (35) (1.4)
(0.03) (248) (6.7) (0.23) Total loans 23,353
363.1 6.28 23,077 363.2 6.27 22,986
363.2 6.34 276 (0.1) 0.01 367 (0.1)
(0.06) Total interest earning assets 35,776 $416.0
4.69 % 35,262 $411.0 4.65 % 31,937
$404.0 5.08 % 514 $5.0 0.04 % 3,839
$12.0 (0.39) % Allowance for loan losses (542) (562) (536)
20 (6) Other non-interest earning assets 4,312 4,386 4,491 (74)
(179) Total average assets $39,546 $39,086 $35,892 $460 $3,654
Liabilities and Stockholders' Equity: Interest bearing
deposits: NOW and money market $8,516
$8.5
0.41 % $8,007 $8.3 0.41 % $5,712 $5.6 0.39 % $509
$0.2
- % $2,804
$2.9
0.02 % Savings 8,041 4.9 0.25 7,796 4.7 0.24 7,275 4.3 0.23 245 0.2
0.01 766 0.6 0.02 Time deposits 7,756
20.4
1.06 7,858 21.7 1.10 8,058 20.0
1.00 (102)
(1.3)
(0.04) (302)
0.4
0.06 Total interest bearing deposits 24,313 33.8 0.56 23,661
34.7 0.58 21,045 29.9 0.57 652 (0.9) (0.02) 3,268 3.9 (0.01)
Borrowings 2,025 20.1 4.00 2,212 20.9
3.78 2,441 21.7 3.58 (187) (0.8) 0.22
(416) (1.6) 0.42 Total interest bearing liabilities
26,338 53.9 0.83 25,873 55.6 0.86
23,486 51.6 0.88 465 (1.7) (0.03) 2,852
2.3 (0.05) Net interest spread 3.86 % 3.79 % 4.20 %
0.07 % (0.34) % Non-interest bearing deposits 7,027 6,976 6,293 51
734 Other liabilities 896 901 920 (5) (24) Liabilities from
discontinued operations - 2 2 (2) (2) Stockholders' equity 5,285
5,334 5,191 (49) 94 Total average liabilities and stockholders'
equity $39,546 $39,086 $35,892 $460 $3,654 Net interest
income / margin non-taxable equivalent basis $362.1 4.08 %
$355.4 4.02 % $352.4 4.43 % $6.7 0.06 % $9.7
(0.35) %
Popular, Inc. Financial Supplement
to First Quarter 2017 Earnings Release Table E -
Consolidated Average Balances and Yield / Rate Analysis -
YEAR-TO-DATE
[THIS PAGE INTENTIONALLY LEFT BLANK]
Popular, Inc.
Financial Supplement to First Quarter 2017 Earnings Release
Table F - Mortgage Banking Activities and Other Service Fees
(Unaudited) Mortgage Banking Activities
Variance Quarters ended
Q1 2017vs.
Q1 2017vs.
(In thousands) 31-Mar-17 31-Dec-16 31-Mar-16
Q4 2016 Q1 2016 Mortgage servicing fees, net of fair
value adjustments: Mortgage servicing fees $13,452 $14,211 $14,802
$(759) $(1,350) Mortgage servicing rights fair value adjustments
(5,954) (6,457) (8,477) 503
2,523 Total mortgage servicing fees, net of fair value adjustments
7,498 7,754 6,325 (256) 1,173
Net gain on sale of loans, including valuation on loans
held-for-sale 5,381 2,535 7,110 2,846
(1,729) Trading account (loss) profit: Unrealized gains
(losses) on outstanding derivative positions (40) 43 (80) (83) 40
Realized (losses) gains on closed derivative positions
(1,470) 4,156 (2,804) (5,626) 1,334
Total trading account (loss) profit (1,510) 4,199
(2,884) (5,709) 1,374 Total mortgage banking
activities $11,369 $14,488 $10,551
$(3,119) $818
Other Service Fees Variance
Quarters ended Q1 2017 vs. Q1 2017 vs. (In thousands)
31-Mar-17 31-Dec-16 31-Mar-16 Q4 2016 Q1 2016 Other service fees:
Debit card fees $11,543 $12,088 $11,287 $(545) $256 Insurance fees
12,805 20,804 12,850 (7,999) (45) Credit card fees 18,276 18,324
16,858 (48) 1,418 Sale and administration of investment products
5,082 5,652 4,839 (570) 243 Trust fees 4,955 4,782 4,235 173 720
Other fees 3,514 3,624 3,313 (110)
201 Total other service fees $56,175 $65,274
$53,382 $(9,099) $2,793
Popular,
Inc. Financial Supplement to First Quarter 2017 Earnings
Release Table G - Loans and Deposits (Unaudited)
Loans - Ending Balances
Variance (In thousands) 31-Mar-17 31-Dec-16
31-Mar-16 Q1 2017 vs. Q4 2016 Q1 2017 vs. Q1 2016
Loans not covered under FDIC loss-sharing agreements: Commercial
$10,811,700 $10,798,507 $10,228,389 $13,193 $583,311 Construction
831,305 776,300 734,858 55,005 96,447 Legacy [1] 40,688 45,293
61,044 (4,605) (20,356) Lease financing 719,643 702,893 643,142
16,750 76,501 Mortgage 6,627,987 6,696,361 6,979,201 (68,374)
(351,214) Consumer 3,703,398 3,754,393
3,861,103 (50,995) (157,705) Total non-covered loans
held-in-portfolio $22,734,721 $22,773,747 $22,507,737 $(39,026)
$226,984 Loans covered under FDIC loss-sharing agreements
551,980 572,878 625,130 (20,898)
(73,150) Total loans held-in-portfolio $23,286,701
$23,346,625 $23,132,867 $(59,924) $153,834
Loans held-for-sale: Commercial $- $- $42,771 $- $(42,771)
Construction - - 2 - (2) Mortgage 85,309 88,821
82,542 (3,512) 2,767 Total loans held-for-sale
$85,309 $88,821 $125,315 $(3,512)
$(40,006) Total loans $23,372,010 $23,435,446
$23,258,182 $(63,436) $113,828 [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) 31-Mar-17 31-Dec-16
31-Mar-16 Q1 2017 vs. Q4 2016 Q1 2017 vs.Q1 2016
Demand deposits [1] $10,136,435 $9,053,897 $7,324,982 $1,082,538
$2,811,453 Savings, NOW and money market deposits (non-brokered)
13,939,838 13,327,298 11,940,103 612,540 1,999,735 Savings, NOW and
money market deposits (brokered) 423,339 405,487 383,745 17,852
39,594 Time deposits (non-brokered) 7,508,726 7,486,717 7,348,132
22,009 160,594 Time deposits (brokered CDs) 204,241
222,825 529,631 (18,584) (325,390) Total
deposits $32,212,579 $30,496,224 $27,526,593
$1,716,355 $4,685,986 [1] Includes interest and
non-interest bearing demand deposits.
Popular, Inc.
Financial Supplement to First Quarter 2017 Earnings Release
Table H - Non-Performing Assets (Unaudited)
Variance (Dollars in
thousands) 31-Mar-17
As a % ofloans HIP bycategory
31-Dec-16
As a % ofloans HIP bycategory
31-Mar-16
As a % ofloans HIP bycategory
Q1 2017 vs. Q4 2016 Q1 2017 vs. Q1 2016
Non-accrual loans: Commercial $179,241 1.7 % $163,348 1.5 %
$197,631 1.9 % $15,893 $(18,390) Construction - - - - 3,941 0.5 -
(3,941) Legacy [1] 3,335 8.2 3,337 7.4 4,046 6.6 (2) (711) Lease
financing 2,444 0.3 3,062 0.4 3,419 0.5 (618) (975) Mortgage
331,339 5.0 329,907 4.9 334,907 4.8 1,432 (3,568) Consumer
59,254 1.6 58,261 1.6
55,582 1.4 993 3,672 Total
non-performing loans held-in- portfolio, excluding covered loans
575,613 2.5 % 557,915 2.5 % 599,526 2.7 % 17,698 (23,913)
Non-performing loans held-for-sale [2] - - 42,743 - (42,743) Other
real estate owned (“OREO”), excluding covered OREO 185,836
180,445
165,960 5,391 19,876 Total
non-performing assets, excluding covered assets 761,449 738,360
808,229 23,089 (46,780) Covered loans and OREO 33,866
36,044 39,916
(2,178) (6,050) Total
non-performing assets $795,315
$774,404 $848,145
$20,911 $(52,830) Accruing loans past due 90 days or
more [3] $408,346 $426,652
$426,437
$(18,306) $(18,091)
Ratios excluding covered loans:
Non-performing loans held-in-portfolio to loans held-in-portfolio
2.53 % 2.45 % 2.66 % Allowance for loan losses to loans
held-in-portfolio 2.27 2.24 2.26 Allowance for loan losses to
non-performing loans, excluding loans held-for-sale 89.77
91.47 84.80
Ratios
including covered loans: Non-performing assets to total assets
1.98 % 2.00 % 2.35 % Non-performing loans held-in-portfolio to
loans held-in-portfolio 2.49 2.41 2.61 Allowance for loan losses to
loans held-in-portfolio 2.34 2.32 2.33 Allowance for loan losses to
non-performing loans, excluding loans held-for-sale 93.95
96.23 89.29
[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] There were no non-performing
loans held-for-sale as of March 31, 2017 and December 31, 2016
(March 31, 2016 - $42.7 million in commercial loans and $2 thousand
in construction 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 $173 million of residential mortgage loans
insured by FHA or guaranteed by the VA that are no longer accruing
interest as of March 31, 2017 (December 31, 2016 - $181 million;
March 31, 2016 - $161 million). Furthermore, the Corporation has
approximately $58.6 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
(December 31, 2016 - $68 million; March 31, 2016 - $68 million).
Popular, Inc. Financial Supplement to First
Quarter 2017 Earnings Release Table I - Activity in
Non-Performing Loans (Unaudited)
Commercial loans held-in-portfolio:
Quarter ended Quarter ended 31-Mar-17 31-Dec-16 (In
thousands) BPPR BPNA Popular, Inc. BPPR
BPNA Popular, Inc. Beginning balance NPLs $159,655
$3,693 $163,348 $167,047 $3,524 $170,571 Plus: New non-performing
loans 33,600 1,355 34,955 17,409 1,615 19,024 Advances on existing
non-performing loans - - - - 5 5 Less: Non-performing loans
transferred to OREO (3,510) - (3,510) (1,559) - (1,559)
Non-performing loans charged-off (5,153) (46) (5,199) (12,925) (35)
(12,960) Loans returned to accrual status / loan collections
(9,115) (1,238) (10,353) (10,317)
(1,416) (11,733) Ending balance NPLs $175,477
$3,764 $179,241 $159,655 $3,693
$163,348
Mortgage loans held-in-portfolio:
Quarter ended Quarter ended 31-Mar-17 31-Dec-16 (In
thousands) BPPR BPNA Popular, Inc. BPPR
BPNA Popular, Inc. Beginning balance NPLs $318,194
$11,713 $329,907 $331,346 $14,430 $345,776 Plus: New non-performing
loans 82,149 4,753 86,902 76,278 4,835 81,113 Less: Non-performing
loans transferred to OREO (11,256) (46) (11,302) (7,791) (315)
(8,106) Non-performing loans charged-off (9,428) (69) (9,497)
(16,404) 240 (16,164) Loans returned to accrual status / loan
collections (60,209) (4,462) (64,671)
(65,235) (7,477) (72,712) Ending balance NPLs
$319,450 $11,889 $331,339 $318,194
$11,713 $329,907
Legacy loans
held-in-portfolio: Quarter ended Quarter ended 31-Mar-17
31-Dec-16 (In thousands) BPPR BPNA Popular,
Inc. BPPR BPNA Popular, Inc. Beginning balance
NPLs $- $3,337 $3,337 $- $3,450 $3,450 Plus: New non-performing
loans - - - - 17 17 Advances on existing non-performing loans - 47
47 - 7 7 Less: Non-performing loans charged-off - (2) (2) - (89)
(89) Loans returned to accrual status / loan collections -
(47) (47) - (48) (48) Ending
balance NPLs $- $3,335 $3,335 $-
$3,337 $3,337
Total non-performing loans held-in-portfolio (excluding consumer
and covered loans): Quarter ended Quarter ended 31-Mar-17
31-Dec-16 (In thousands) BPPR BPNA
Popular, Inc. BPPR BPNA Popular, Inc.
Beginning balance NPLs $477,849 $18,743 $496,592 $498,393 $21,404
$519,797 Plus: New non-performing loans 115,749 6,108 121,857
93,687 6,467 100,154 Advances on existing non-performing loans - 47
47 - 12 12 Less: Non-performing loans transferred to OREO (14,766)
(46) (14,812) (9,350) (315) (9,665) Non-performing loans
charged-off (14,581) (117) (14,698) (29,329) 116 (29,213) Loans
returned to accrual status / loan collections (69,324)
(5,747) (75,071) (75,552) (8,941)
(84,493) Ending balance NPLs $494,927 $18,988
$513,915 $477,849 $18,743 $496,592
Popular, Inc. Financial Supplement to First
Quarter 2017 Earnings Release Table J - Allowance for Credit
Losses, Net Charge-offs and Related Ratios (Unaudited)
Quarter ended Quarter ended Quarter
ended 31-Mar-17 31-Dec-16
31-Mar-16 (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 $510,301 $30,350
$540,651 $525,593 $30,262 $555,855 $502,935 $34,176 $537,111
Provision (reversal) for loan losses 42,057
(1,359) 40,698 40,924 441
41,365 47,940 (3,105)
44,835 552,358
28,991 581,349 566,517
30,703 597,220 550,875
31,071 581,946 Net loans charged-off
(recovered): BPPR Commercial 2,638 - 2,638 9,205 - 9,205 2,704 -
2,704 Construction (144) - (144) 8 - 8 311 - 311 Lease financing
813 - 813 1,000 - 1,000 1,638 - 1,638 Mortgage 13,555 1,128 14,683
20,919 360 21,279 14,696 996 15,692 Consumer 16,083
92 16,175 22,284
(7) 22,277 21,298 30
21,328 Total BPPR 32,945 1,220
34,165 53,416 353
53,769 40,647 1,026
41,673 BPNA Commercial (463) - (463) (1,080) -
(1,080) 205 - 205 Legacy [1] (488) - (488) (253) - (253) (247) -
(247) Mortgage (104) - (104) (255) - (255) 230 - 230 Consumer
3,743 - 3,743
4,388 - 4,388 1,613
- 1,613 Total BPNA 2,688
- 2,688 2,800
- 2,800 1,801 -
1,801 Total loans charged-off - Popular, Inc.
35,633 1,220 36,853
56,216 353 56,569
42,448 1,026 43,474 Balance at
end of period $516,725 $27,771
$544,496 $510,301 $30,350
$540,651 $508,427 $30,045
$538,472 POPULAR, INC. Annualized net charge-offs to
average loans held-in-portfolio 0.63 % 0.63 % 1.00 % 0.98 % 0.76 %
0.76 % Provision for loan losses to net charge-offs 1.18 x 1.10 x
0.73 x 0.73 x 1.13 x 1.03 x BPPR Annualized net charge-offs
to average loans held-in-portfolio 0.77 % 0.78 % 1.25 % 1.22 % 0.93
% 0.92 % Provision for loan losses to net charge-offs 0.96 x 0.88 x
0.70 x 0.70 x 1.08 x 0.98 x BPNA Annualized net charge-offs
to average loans held-in-portfolio 0.19 % 0.21 % 0.15 % Provision
for loan losses to net charge-offs
3.94 x
1.27 x
2.26 x [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.
Popular, Inc. Financial Supplement to First Quarter 2017
Earnings Release Table K - Allowance for Loan Losses -
Breakdown of General and Specific Reserves - CONSOLIDATED
(Unaudited)
31-Mar-17 (Dollars in thousands)
Commercial Construction
Legacy [2] Mortgage Lease financing
Consumer Total [3] Specific ALLL
$51,276 $- $- $43,264 $522 $23,010 $118,072 Impaired loans [1]
$348,823 $- $- $510,568 $1,803 $109,016 $970,210 Specific ALLL to
impaired loans [1] 14.70 % - % - % 8.47
% 28.95 % 21.11 % 12.17 % General ALLL
$157,408 $9,997 $1,166 $105,955 $7,375 $116,752 $398,653 Loans
held-in-portfolio, excluding impaired loans [1] $10,462,877
$831,305 $40,688 $6,117,419 $717,840 $3,594,382 $21,764,511 General
ALLL to loans held-in-portfolio, excluding impaired loans [1]
1.50 % 1.20 % 2.87 % 1.73 % 1.03
% 3.25 % 1.83 % Total ALLL $208,684 $9,997 $1,166
$149,219 $7,897 $139,762 $516,725 Total non-covered loans
held-in-portfolio [1] $10,811,700 $831,305 $40,688 $6,627,987
$719,643 $3,703,398 $22,734,721 ALLL to loans held-in-portfolio [1]
1.93 % 1.20 % 2.87 % 2.25 % 1.10
% 3.77 % 2.27 % [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, 2017 the general allowance on the covered loans amounted to
$27.8 million.
31-Dec-16 (Dollars
in thousands) Commercial Construction
Legacy [2] Mortgage Lease
financing Consumer Total [3] Specific
ALLL $42,375 $- $- $44,610 $535 $23,857 $111,377 Impaired loans [1]
$338,422 $- $- $506,364 $1,817 $109,454 $956,057 Specific ALLL to
impaired loans [1] 12.52 % - % - % 8.81
% 29.44 % 21.80 % 11.65 % General ALLL
$160,279 $9,525 $1,343 $103,324 $7,127 $117,326 $398,924 Loans
held-in-portfolio, excluding impaired loans [1] $10,460,085
$776,300 $45,293 $6,189,997 $701,076 $3,644,939 $21,817,690 General
ALLL to loans held-in-portfolio, excluding impaired loans [1]
1.53 % 1.23 % 2.97 % 1.67 % 1.02
% 3.22 % 1.83 % Total ALLL $202,654 $9,525 $1,343
$147,934 $7,662 $141,183 $510,301 Total non-covered loans
held-in-portfolio [1] $10,798,507 $776,300 $45,293 $6,696,361
$702,893 $3,754,393 $22,773,747 ALLL to loans held-in-portfolio [1]
1.88 % 1.23 % 2.97 % 2.21 % 1.09
% 3.76 % 2.24 % [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
December 31, 2016 the general allowance on the covered loans
amounted to $30.4 million.
Variance (Dollars in thousands) Commercial
Construction Legacy Mortgage
Lease financing Consumer
Total Specific ALLL $8,901 $- $- $(1,346) $(13) $(847)
$6,695 Impaired loans $10,401 $-
$- $4,204 $(14)
$(438) $14,153 General ALLL $(2,871) $472
$(177) $2,631 $248 $(574) $(271) Loans held-in-portfolio, excluding
impaired loans $2,792 $55,005
$(4,605) $(72,578) $16,764
$(50,557) $(53,179) Total ALLL
$6,030 $472 $(177) $1,285 $235 $(1,421) $6,424 Total non-covered
loans held-in-portfolio $13,193 $55,005
$(4,605) $(68,374)
$16,750 $(50,995) $(39,026)
Popular, Inc. Financial Supplement to First
Quarter 2017 Earnings Release Table L - Allowance for Loan
Losses - Breakdown of General and Specific Reserves - PUERTO RICO
OPERATIONS (Unaudited)
31-Mar-17 Puerto Rico (In thousands)
Commercial Construction Mortgage Lease
financing Consumer Total
Allowance for credit
losses: Specific ALLL non-covered loans $51,276 $- $41,067 $522
$22,331 $115,196 General ALLL non-covered loans 136,355
1,961 103,870 7,375 101,760
351,321 ALLL - non-covered loans 187,631 1,961
144,937 7,897 124,091 466,517 Specific ALLL
covered loans - - - - - - General ALLL covered loans -
- 27,341 - 430 27,771 ALLL -
covered loans - - 27,341 - 430
27,771 Total ALLL $187,631 $1,961
$172,278 $7,897 $124,521 $494,288
Loans
held-in-portfolio: Impaired non-covered loans $348,823 $-
$501,647 $1,803 $106,236 $958,509 Non-covered loans
held-in-portfolio, excluding impaired loans 6,715,507
95,459 5,368,071 717,840 3,120,843
16,017,720 Non-covered loans held-in-portfolio 7,064,330
95,459 5,869,718 719,643 3,227,079
16,976,229 Impaired covered loans - - - - - - Covered loans
held-in-portfolio, excluding impaired loans - -
536,287 - 15,693 551,980 Covered loans
held-in-portfolio - - 536,287 -
15,693 551,980 Total loans held-in-portfolio
$7,064,330 $95,459 $6,406,005 $719,643
$3,242,772 $17,528,209 31-Dec-16 Puerto Rico
(In thousands) Commercial Construction
Mortgage Lease financing Consumer Total
Allowance for credit losses: Specific ALLL non-covered loans
$42,375 $- $42,428 $535 $23,185 $108,523 General ALLL non-covered
loans 147,311 1,353 100,892 7,127
102,778 359,461 ALLL - non-covered loans
189,686 1,353 143,320 7,662 125,963
467,984 Specific ALLL covered loans - - - - - - General ALLL
covered loans - - 30,159 - 191
30,350 ALLL - covered loans - - 30,159
- 191 30,350 Total ALLL $189,686
$1,353 $173,479 $7,662 $126,154
$498,334
Loans held-in-portfolio: Impaired non-covered loans
$338,422 $- $497,488 $1,817 $106,615 $944,342 Non-covered loans
held-in-portfolio, excluding impaired loans 6,863,795
85,558 5,419,012 701,076 3,154,641
16,224,082 Non-covered loans held-in-portfolio 7,202,217
85,558 5,916,500 702,893 3,261,256
17,168,424 Impaired covered loans - - - - - - Covered loans
held-in-portfolio, excluding impaired loans - -
556,570 - 16,308 572,878 Covered loans
held-in-portfolio - - 556,570 -
16,308 572,878 Total loans held-in-portfolio
$7,202,217 $85,558 $6,473,070 $702,893
$3,277,564 $17,741,302
Variance (In thousands) Commercial Construction
Mortgage Lease financing Consumer Total
Allowance for credit losses: Specific ALLL non-covered loans
$8,901 $- $(1,361) $(13) $(854) $6,673 General ALLL non-covered
loans (10,956) 608 2,978 248
(1,018) (8,140) ALLL - non-covered loans (2,055)
608 1,617 235 (1,872) (1,467)
Specific ALLL covered loans - - - - - - General ALLL covered loans
- - (2,818) - 239 (2,579)
ALLL - covered loans - - (2,818) -
239 (2,579) Total ALLL $(2,055) $608
$(1,201) $235 $(1,633) $(4,046)
Loans held-in-portfolio: Impaired non-covered loans $10,401
$- $4,159 $(14) $(379) $14,167 Non-covered loans held-in-portfolio,
excluding impaired loans (148,288) 9,901
(50,941) 16,764 (33,798) (206,362) Non-covered
loans held-in-portfolio (137,887) 9,901
(46,782) 16,750 (34,177) (192,195) Impaired
covered loans - - - - - - Covered loans held-in-portfolio,
excluding impaired loans - - (20,283) -
(615) (20,898) Covered loans held-in-portfolio
- - (20,283) - (615) (20,898)
Total loans held-in-portfolio $(137,887) $9,901
$(67,065) $16,750 $(34,792) $(213,093)
Popular, Inc. Financial Supplement to First
Quarter 2017 Earnings Release Table M - Allowance for Loan
Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND
OPERATIONS (Unaudited)
31-Mar-17 U.S. Mainland (In thousands)
Commercial Construction Legacy Mortgage
Consumer Total
Allowance for credit losses: Specific
ALLL $- $- $- $2,197 $679 $2,876 General ALLL 21,053
8,036 1,166 2,085 14,992 47,332 Total
ALLL $21,053 $8,036 $1,166 $4,282
$15,671 $50,208
Loans held-in-portfolio:
Impaired loans $- $- $- $8,921 $2,780 $11,701 Loans
held-in-portfolio, excluding impaired loans 3,747,370
735,846 40,688 749,348 473,539
5,746,791 Total loans held-in-portfolio $3,747,370
$735,846 $40,688 $758,269 $476,319
$5,758,492 31-Dec-16 U.S. Mainland (In thousands)
Commercial Construction Legacy Mortgage
Consumer Total
Allowance for credit losses:
Specific ALLL $- $- $- $2,182 $672 $2,854 General ALLL
12,968 8,172 1,343 2,432 14,548
39,463 Total ALLL $12,968 $8,172 $1,343
$4,614 $15,220 $42,317
Loans
held-in-portfolio: Impaired loans $- $- $- $8,876 $2,839
$11,715 Loans held-in-portfolio, excluding impaired loans
3,596,290 690,742 45,293 770,985
490,298 5,593,608 Total loans held-in-portfolio
$3,596,290 $690,742 $45,293 $779,861
$493,137 $5,605,323
Variance (In thousands) Commercial Construction
Legacy Mortgage Consumer Total
Allowance for credit losses: Specific ALLL $- $- $- $15 $7
$22 General ALLL 8,085 (136) (177)
(347) 444 7,869 Total ALLL $8,085
$(136) $(177) $(332) $451 $7,891
Loans held-in-portfolio: Impaired loans $- $- $- $45 $(59)
$(14)
Loans held-in-portfolio, excluding
impaired loans
151,080 45,104 (4,605) (21,637)
(16,759) 153,183 Total loans held-in-portfolio
$151,080 $45,104 $(4,605) $(21,592)
$(16,818) $153,169
Popular, Inc. Financial
Supplement to First Quarter 2017 Earnings Release Table N -
Reconciliation to GAAP Financial Measures (Unaudited)
(In thousands, except share or
per share information) 31-Mar-17 31-Dec-16
31-Mar-16 Total stockholders’ equity
$5,190,213 $5,197,957 $5,250,300 Less: Preferred stock
(50,160) (50,160) (50,160) $5,140,053
$5,147,797 $5,200,140 Common shares outstanding at end of period
101,956,740 103,790,932 103,670,005 Common equity per share
$50.41 $49.60 $50.16 Total
stockholders’ equity $5,190,213 $5,197,957 $5,250,300 Less:
Preferred stock (50,160) (50,160) (50,160) Less: Goodwill (627,294)
(627,294) (631,095) Less: Other intangibles (42,706)
(45,050) (54,080) Total tangible common
equity $4,470,053 $4,475,453
$4,514,965 Total assets $40,259,282 $38,661,609 $36,147,009
Less: Goodwill (627,294) (627,294) (631,095) Less: Other
intangibles (42,706) (45,050)
(54,080) Total tangible assets $39,589,282
$37,989,265 $35,461,834 Tangible common
equity to tangible assets 11.29 % 11.78 % 12.73 % Common shares
outstanding at end of period 101,956,740 103,790,932 103,670,005
Tangible book value per common share $43.84
$43.12 $43.55
Popular,
Inc. Financial Supplement to First Quarter 2017 Earnings
Release Table O - Financial Information - Westernbank
Loans (Unaudited) Revenues
(Expenses) Quarters ended (In thousands) 31-Mar-17
31-Dec-16 Variance Interest income on WB loans
$38,182 $39,642 $(1,460) FDIC loss-share expense:
Amortization of indemnification asset (776) (864) 88 80% mirror
accounting on credit impairment losses (reversal) [1] 148 720 (572)
80% mirror accounting on reimbursable expenses 921 1,395 (474)
80% mirror accounting on recoveries on
covered assets, including rental income on OREOs, subject to
reimbursement to the FDIC
4,833 (26,215) 31,048 Change in true-up payment obligation
(7,385)
(18,671)
11,286
Arbitration decision charge - (81,273) 81,273 Other
(5,998)
(5,426)
(572)
Total FDIC loss-share expense (8,257) (130,334)
122,077 Total income (expense) 29,925 (90,692)
120,617 Provision (reversal) for loan losses- WB loans
(499) (2,292) 1,793 Total income (expense)
less provision (reversal) for loan losses $30,424
$(88,400) $118,824
[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
agreement for interest not collected from borrowers is limited
under the agreement (approximately 90 days); accordingly, these
amounts are not subject fully to the 80% mirror accounting.
Non-personnel operating expenses Quarters
ended [1][2] (In thousands) 31-Mar-17 31-Dec-16
Variance Professional fees $(2,635) $6,936 $(9,571) OREO
expenses 3,033 2,766 267 Other operating expenses 1,615
1,619 (4) Total operating expenses $2,013
$11,321 $(9,308) [1] Includes expenses related to
loans subject, and not subject, to the FDIC loss-sharing
agreements.
[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) 31-Mar-17 31-Dec-16 Variance Loans
$1,810 $1,845 $(35) FDIC loss-share asset 44 126
(82)
Activity in the carrying amount and
accretable yield of loans accounted for under ASC 310-30
Quarters ended 31-Mar-17
31-Dec-16 (In thousands) Accretable yield Carrying
amount of loans Accretable yield Carrying amount of
loans Beginning balance $1,010,087 $1,738,329 $1,038,692
$1,767,539 Accretion (36,892) 36,892 (38,149) 38,149 Changes in
expected cash flows 8,011 - 9,544 - Collections / loan sales /
charge-offs - (86,321) - (67,359)
Ending balance [1] 981,206 1,688,900 1,010,087 1,738,329 Allowance
for loan losses - ASC 310-30 loans - (66,544)
- (68,877) Ending balance, net of allowance for loan losses
$981,206 $1,622,356 $1,010,087
$1,669,452 [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 $542 million as of March 31, 2017 and $563 million as
of December 31, 2016.
Activity in the carrying amount of
the FDIC indemnity asset Quarters ended (In thousands)
31-Mar-17 31-Dec-16
Balance at beginning of period $69,334 $152,467 Amortization (776)
(864) Credit impairment losses (reversal) to be covered under
loss-sharing agreements 148 720 Reimbursable expenses to be covered
under loss-sharing agreements 921 1,395 Net payments from FDIC
under loss-sharing agreements - (3,111) Arbitration decision charge
- (81,273) Other adjustments attributable to FDIC loss-sharing
agreements (5,550) -
Balance at end of period 64,077
69,334 Balance due to the FDIC for recoveries on covered
assets [1] (5,284)
(27,578) Net balance of indemnity asset and amounts due from the
FDIC $58,793 $41,756
[1] Balance due to the FDIC for recoveries
on covered assets for the quarter ended December 31, 2016 amounting
to $27.6 million was included in other liabilities in the
accompanying consolidated statement of condition.
Activity in the remaining FDIC loss-share asset
amortization Quarters ended (In thousands)
31-Mar-17 31-Dec-16 Balance at
beginning of period $4,812 $7,305 Amortization (776) (864) Impact
of change in projected losses (107)
(1,629) Balance at end of period
$3,929 $4,812
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170425005305/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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