Popular, Inc. (“the Corporation”) (NASDAQ:BPOP) reported a net
loss of $213.2 million for the quarter ended December 31, 2009,
compared with a net loss of $125.0 million for the quarter ended
September 30, 2009, and a net loss of $702.9 million for the
quarter ended December 31, 2008. For the year ended December 31,
2009, the Corporation’s net loss totaled $573.9 million, compared
with a net loss of $1.2 billion for the same period in 2008.
Refer to the accompanying Exhibit A - Financial Summary for “per
common share” information and key performance ratios. Also, refer
to Exhibit B for summarized income statement information by
reportable segment. As indicated in previous filings, in 2008, the
Corporation discontinued the operations of its U.S. mainland-based
subsidiary Popular Financial Holdings (“PFH”), and thus the results
of PFH are presented as part of “Loss from discontinued operations,
net of income tax” in Exhibits A and B.
The following table provides a reconciliation of earnings (loss)
per common share (“EPS”) for the quarters ended December 31, 2009,
September 30, 2009 and December 31, 2008 and for the years ended
December 31, 2009 and 2008:
(In thousands, except per share
information)
4th
Quarter
2009
3rd
Quarter
2009
4th
Quarter
2008
Year
2009
Year
2008
Net loss from continuing operations ($213,227 ) ($121,561 )
($627,707 ) ($553,947 ) ($680,468 ) Net loss from discontinued
operations - (3,427 ) (75,193 ) (19,972 ) (563,435 ) Preferred
stock dividends * - 5,974 * (14,605 ) (39,857 ) (34,815 ) Preferred
stock discount accretion - (1,040 ) (482 ) (4,515 ) (482 )
Favorable impact from exchange of shares of Series A and B
preferred stock for common stock, net of issuance costs - 230,388 -
230,388 - Favorable impact from exchange of Series C preferred
stock for trust preferred securities - 485,280
- 485,280 - Net
(loss) income applicable to common stock ($213,227 )
$595,614 ($717,987 ) $97,377
($1,279,200 ) Average common shares outstanding 639,401,594
425,672,578
281,786,725 408,229,498 281,079,201 Average potential common shares
- - - -
- Average common shares outstanding – assuming
dilution 639,401,594 425,672,578
281,786,725 408,229,498 281,079,201
Basic and diluted (loss) earnings per common share from
continuing operations ($0.33 ) $1.41 ($2.28 ) $0.29 ($2.55 ) Basic
and diluted loss per common share from discontinued operations
- (0.01 ) (0.27 ) (0.05 )
(2.00 ) Total basic and diluted (loss) earnings per common share
($0.33 ) $1.40 ($2.55 ) $0.24
($4.55 ) * Amount presented for the quarter ended
September 30, 2009 represents the reversal of dividends on Series C
preferred stock considered accrued as of June 30, 2009 for EPS
purposes only. These cumulative dividends were not paid as
dividends to the Series C preferred stockholders given the terms of
the exchange for trust preferred securities, which was effected in
August 2009.
The principal items impacting the continuing operations’
financial results for the quarter ended December 31, 2009, when
compared to the quarter ended September 30, 2009, were as
follows:
- Third quarter results included a
gain of $79.3 million on the extinguishment of debt, principally
related to the exchange of trust preferred securities for common
stock; and
- The allowance for loan losses
increased from September 30, 2009 to December 31, 2009 by $54
million. The allowance for loan losses to loans held-in-portfolio
was 5.32% as of December 31, 2009, compared to 4.95% as of
September 30, 2009. The provision for loan losses for the fourth
quarter of 2009 amounted to $352.8 million, compared with $331.1
million for the third quarter of 2009.
Popular, Inc.’s capital ratios continued to exceed all
“well-capitalized” regulatory benchmarks as of December 31,
2009.
“Fourth quarter results reflected elevated pressures in
mortgage-related assets and commercial loans in both the United
States and Puerto Rico. The latter remains entangled in its longest
recession coupled with a depressed construction market. This
environment required us to continue increasing our high reserve
levels during 2009,” said Richard L. Carrión, Chairman of the Board
and Chief Executive Officer of Popular, Inc. Carrión continued,
“While it is possible that we turn the cycle on or about the end of
the year, we continue to work towards improving our U.S.
operations, further strengthening our main market in Puerto Rico
and maintaining our well-capitalized ratios.”
This press release should be read in conjunction with the
accompanying Exhibits A and B which are an integral part of this
release. The discussions that follow pertain to Popular, Inc.’s
continuing operations, unless otherwise indicated.
Net Interest
Income
Net interest income for the fourth quarter of 2009 was $269.3
million, compared with $276.4 million for the third quarter of 2009
and $288.9 million for the fourth quarter of 2008.
The following table summarizes the principal changes in average
earning assets and funding sources and their corresponding yields
and costs for the quarter ended December 31, 2009, compared with
the quarters ended September 30, 2009 and December 31, 2008.
Average balances
Average Yields / Costs
(Dollars in billions)
4th
Quarter
2009
3rd
Quarter
2009
4th
Quarter
2008
4th
Quarter
2009
3rd
Quarter
2009
4th
Quarter
2008
Money market, trading and investment securities $8.7
$9.0 $9.4 3.51 % 3.69 % 4.03 % Loans:
Commercial (a) 14.7 15.0 16.0 4.75 4.85
5.69 Mortgage 4.5 4.5 4.6 6.05 6.15 6.88 Consumer 4.1 4.3 4.7 10.11
9.75 9.92 Lease financing 0.7 0.7 1.1
8.61 8.29 8.11 Total loans
24.0 24.5 26.4 6.02 6.04
6.75 Total earning assets $32.7
$33.5 $35.8 5.35 % 5.41 % 6.04 %
Interest bearing deposits $21.8 $22.4 $24.0 1.92 % 2.11 % 2.85 %
Borrowings 5.3 5.4 7.0 4.90
4.38 4.64 Total interest bearing
liabilities 27.1 27.8 31.0 2.50
2.55 3.25 Non-interest bearing sources
of funds 5.6 5.7 4.8
Total funds $32.7 $33.5
$35.8 2.07 % 2.11 % 2.81 % Net interest spread
2.85 % 2.86
% 2.79 % Net interest yield (b)
3.28 % 3.30 % 3.23 %
(a) Includes commercial
construction loans
(b) Not on a taxable equivalent
basis
The reduction in average earning assets for the quarter ended
December 31, 2009, compared with the quarter ended September 30,
2009 was mostly due to maturities of investment securities along
with a decline in the loan portfolio in part due to the lower loan
origination activity, as well as a higher volume of loans charged
off. As shown in the preceding table, the Corporation also
experienced a decline in average deposits during the fourth quarter
of 2009, principally certificates of deposits, mostly in the U.S.
mainland operations which included the impact of the sale of six
New Jersey bank branches pertaining to Banco Popular North America
("BPNA") in October 2009.
Net interest yield declined slightly for the quarter ended
December 31, 2009 when compared to the quarter ended September 30,
2009, in part due to lower yields in the commercial and mortgage
loan portfolios and in investment securities, and higher costs in
long-term borrowings. The increase in the cost of long-term
borrowings was mainly related to the exchange of Series C preferred
stock for trust preferred securities during the third quarter of
2009. This exchange generated additional interest expense of $9.8
million for the quarter ended December 31, 2009. Partially
offsetting these unfavorable variances was a reduction in the
interest expense for the fourth quarter of 2009 by approximately
$4.4 million on the junior subordinated debentures which were
extinguished as part of the exchange of trust preferred securities
for shares of common stock that occurred during the third quarter
of 2009. Also, there was a reduction in the cost of deposits due to
management’s actions to lower the rates paid on certain deposits,
including certificates of deposit.
The decrease in net interest income for the fourth quarter of
2009, compared with the same quarter of 2008, was primarily due to
lower average balances of interest-earning assets, principally
loans, due to the sale of most of the lease financing portfolio and
the downsizing or discontinuance of certain loan origination units
in the U.S. mainland operations and lower loan origination activity
due to current market conditions. Also, the reduction in the
average balance of investment securities resulted from the sale of
approximately $3.4 billion in available-for-sale securities, mostly
U.S. agency securities (FHLB notes) during the first quarter of
2009, and subsequent reinvestment of approximately $2.9 billion of
the proceeds, primarily in GNMA mortgage-backed securities. The
Corporation’s deposit volume and borrowings also decreased, which
was associated with deleverage driven by the reduction in the
earning assets they fund. Contributing to the reduction in net
interest income was the decrease by the Federal Reserve (“Fed”) of
the federal funds target rate from 2.00% in September 30, 2008 to
between 0% and 0.25% as of December 31, 2009. This reduction in
short-term market rates impacted the yield of several of the
Corporation’s earning assets during that period, including the
yield on commercial and construction loans with floating or
adjustable rates and floating rate collateralized mortgage
obligations, as well as the yield of newly originated loans in a
declining interest rate environment. On the positive side, the
decrease in rates contributed to the decrease in the cost of
interest-bearing deposits and short-term borrowings. Other factors
impacting negatively the Corporation’s net interest income for the
quarter ended December 31, 2009 when compared with the same quarter
in 2008 were the increase in non-performing loans, the exchange of
Series C preferred stock for trust preferred securities and the
increase in the cost of $350 million in term notes due to credit
rating downgrades in 2009. Offsetting this negative variance was
the reduction in interest expense from the exchange of the
Corporation’s trust preferred securities for common stock.
Credit Quality
The Corporation’s allowance for loan losses increased to $1.3
billion as of December 31, 2009, an increase of $54 million from
September 30, 2009. The Corporation’s allowance for loan losses
represented 5.32% of loans held-in-portfolio as of December 31,
2009, compared with 4.95% as of September 30, 2009 and 3.43% as of
December 31, 2008. As compared to the previous quarter, the
allowance for loan losses increased during the fourth quarter of
2009 despite the decrease of $683 million in loans
held-in-portfolio.
Provision for loan
losses
The provision for loan losses totaled $352.8 million or 118% of
net charge-offs for the quarter ended December 31, 2009, compared
with $331.1 million or 123% of net charge-offs for the quarter
ended September 30, 2009, and $388.8 million or 174% of net
charge-offs for the fourth quarter of 2008. The higher provision
for loan losses for the fourth quarter of 2009 when compared to the
third quarter of the same year was the net result of a $37.9
million increase in the provision related to the U.S. mainland loan
portfolios mainly due to higher reserves and higher net
charge-offs. This was offset by a decrease of $16.2 million in the
Puerto Rico operations primarily attributed to a decrease in
reserves and to lower net charge-offs in construction, consumer,
mortgages, and leases.
The decrease in the provision for loan losses for the quarter
ended December 31, 2009 compared with the same quarter in 2008 was
the result of higher increases in reserves during the fourth
quarter of 2008.
The following table summarizes the changes in the allowance for
loan losses for the periods indicated:
(Dollars in thousands)
4th Quarter2009
3rd Quarter2009
4th Quarter2008
Year
2009
Year
2008
Balance at beginning of period $1,207,401 $1,146,239
$726,480 $882,807 $548,832 Provision for loan
losses 352,771 331,063 388,823
1,405,807 991,384 1,560,172
1,477,302 1,115,303 2,288,614 1,540,216
Net loans charged-off: Commercial 92,938 59,114 64,203 263,266
169,411 Construction 92,642 95,941 62,896 309,925 120,425 Lease
financing 4,470 3,934 5,093 17,482 18,827 Mortgage 30,503 34,322
22,381 120,606 52,878 Consumer 78,415 76,590
69,110 316,131 238,423 Total net charge-offs
298,968 269,901 223,683 1,027,410
599,964 Write-downs related to loans transferred to
loans held-for-sale - - 8,813 - 12,430 Change in allowance for loan
losses from discontinued operations - - -
- (45,015 ) Balance at end of period
$1,261,204 $1,207,401 $882,807 $1,261,204
$882,807
The following table presents annualized net charge-offs to
average loans held-in-portfolio:
4th Quarter2009
3rd Quarter2009
4th Quarter2008
Year
2009
Year
2008
Commercial 2.88 % 1.81 % 1.87 % 2.00 %
1.24 % Construction 20.37 19.45 11.60 15.30 5.81 Lease
financing 2.63 2.23 1.93 2.46 1.72 Mortgage 2.74 3.16 2.01 2.75
1.17 Consumer 7.60 7.18 5.88
7.28 4.95 Total 4.98 %
4.43 % 3.43 % 4.17 % 2.29 %
The increase in commercial loans net charge-offs for the quarter
ended December 31, 2009, compared with the quarter ended September
30, 2009, was attributed to the Banco Popular de Puerto Rico
("BPPR") portfolio with $17.3 million in higher net charge-offs and
the BPNA portfolio with $16.5 million in higher net charge-offs. In
Puerto Rico, the higher level of losses was experienced across
industry sectors, particularly in borrowers with an outstanding
debt below $1 million. The U.S. commercial segments which continue
to report higher net charge-offs were primarily small businesses
and commercial real estate as a result of depressed economic
conditions.
Construction loans net charge-offs in the fourth quarter of 2009
remained at the same high levels experienced in the third quarter
of 2009 both in the BPPR and BPNA reportable segments. These losses
are mainly related to residential development projects. A
significant portion of the construction loans net charge-offs in
the Corporation’s U.S. mainland operations recorded during the
fourth quarter of 2009 were associated with projects located in the
South Florida region. These credits were previously identified as
impaired loans and specific reserves were established in prior
quarters.
The decrease in mortgage loans net charge-offs for the quarter
ended December 31, 2009, compared with the quarter ended September
30, 2009 was related to Puerto Rico’s residential mortgages and the
U.S. mainland non-conventional mortgage business. The Corporation’s
net charge-off ratios for mortgages in Puerto Rico and the U.S.
mainland operations for the quarter ended December 31, 2009 were
0.36% and 7.42%, respectively, compared with 0.72% and 7.51% for
the quarter ended September 30, 2009.
The increase in consumer net charge-offs for the quarter ended
December 31, 2009, compared with the quarter ended September 30,
2009, was primarily associated to E-LOAN’s home equity lines of
credit and second mortgages, offset by a decrease in the BPPR
reportable segment. Consumer net charge-offs trend in the BPPR
reportable segment reported an improvement during the fourth
quarter of 2009 as a result of more active loss mitigation
alternatives and aggressive collection strategies.
Non-performing assets
The following table presents non-performing assets by type and
non-performing loans as a percentage of loans held-in-portfolio
(“HIP”):
(Dollars in thousands)
December 31,
2009
As a
percentage
of loans HIP
by category
September 30,
2009
As a
percentage
of loans HIP
by category
December 31,
2008
As a
percentage
of loans HIP
by category
Commercial $836,728 6.6 % $776,027 5.9
% $464,802 3.4 % Construction 854,937 49.6 768,987
40.9 319,438 14.4 Lease financing 9,655 1.4 10,309 1.5 11,345 1.5
Mortgage 510,847 11.1 484,219 10.6 338,961 7.6 Consumer
64,185 1.6 75,992 1.8
68,263 1.5 Total non-performing
loans 2,276,352 9.6 % 2,115,534 8.7 % 1,202,809 4.7 % Other real
estate 125,483 129,485
89,721 Total
non-performing assets $2,401,835
$2,245,019 $1,292,530
Non-performing assets to total assets 6.91 % 6.30 % 3.32 %
Allowance for loan losses to loans held- in-portfolio 5.32 4.95
3.43
Allowance for loan losses to
non-performing loans
55.40 57.07
73.40
The increases from September 30, 2009 to December 31, 2009 in
non-performing loans were concentrated in portfolios secured by
real estate. As of December 31, 2009, non-performing loans secured
by real estate amounted to $1.3 billion or 14.9% of total loans
secured by real estate in the Puerto Rico operations and $697
million or 10.7%, respectively, in the U.S. mainland operations.
These figures compare to $1.3 billion or 14.0% in Puerto Rico and
$572 million or 8.7% in the U.S. mainland operations as of
September 30, 2009. Commercial non-performing loans increased by
$51.2 million in the U.S. mainland primarily in commercial real
estate, and by $9.4 million in the BPPR reportable segment mainly
in construction related businesses. The construction portfolio
reported increases in non-performing loans during the fourth
quarter of 2009 mostly related to BPNA’s construction loans,
particularly in the New York region. The construction loans in
non-performing status are primarily residential real estate
construction loans which have been adversely impacted by general
market conditions, decreases in property values, oversupply in
certain areas, and reduced absorption rates. The higher level of
non-performing residential mortgage loans was principally
attributed to Puerto Rico’s residential mortgage portfolio and
BPNA’s non-conventional mortgage business. Deteriorating economic
conditions have impacted the mortgage delinquency rates and have
increased pressure in home prices. The decrease in consumer
non-performing loans was mainly attributed to E-LOAN’s home equity
lines of credit and second mortgages, which reported improvements
in delinquency levels during the fourth quarter of 2009.
In terms of reserves, the total allowance for loan losses to
non-performing loans from continuing operations was 55.40% as of
December 31, 2009, compared to 57.07% as of September 30, 2009,
after considering an increase in non-performing loans of
approximately $161 million during the fourth quarter of 2009.
The Corporation’s commercial loan portfolio secured by
commercial real estate (“CRE”), excluding construction loans,
amounted to $7.5 billion as of December 31, 2009, of which $3.4
billion was secured with owner occupied properties, compared to
$7.4 billion and $3.4 billion, respectively, as of September 30,
2009. CRE non-performing loans amounted to $557 million, or 7.41%
of CRE loans as of December 31, 2009 compared to $474 million, or
6.45% as of September 30, 2009. The CRE non-performing loans ratios
for the Corporation’s Puerto Rico and U.S. mainland operations were
8.29% and 6.39%, respectively, as of December 31, 2009, compared
with 7.93% and 4.73%, respectively, as of September 30, 2009.
Allowance for Loan
Losses
The following table sets forth information concerning the
composition of the Corporation's allowance for loan losses (“ALLL”)
as of December 31, 2009 and September 30, 2009 by loan category and
by whether the allowance and related provisions were calculated
individually pursuant to the requirements for specific impairment
or through a general valuation allowance:
AS OF DECEMBER 31, 2009 (Dollars in thousands)
Commercial Construction Lease
Financing Mortgage Consumer
Total Specific ALLL $108,769 $162,907 -
$52,211 - $323,887 Impaired loans 645,513
841,361 - 186,747 - 1,673,621 Specific ALLL to impaired loans
16.85 % 19.36 % - 27.96 %
- 19.35 % General ALLL $328,940 $178,412 $18,558
$102,400 $309,007 $937,317 Loans held-in-portfolio, excluding
impaired loans 12,018,546 883,013 675,629 4,416,499 4,045,806
22,039,493 General ALLL to loans held-in-portfolio, excluding
impaired loans 2.74 % 20.20 % 2.75 %
2.32 % 7.64 % 4.25 % Total ALLL $437,709 $341,319
$18,558 $154,611 $309,007 $1,261,204 Total loans held-in-portfolio
12,664,059 1,724,374 675,629 4,603,246 4,045,806 23,713,114 ALLL to
loans held-in-portfolio 3.46 % 19.79 % 2.75 %
3.36 % 7.64 % 5.32 %
AS OF
SEPTEMBER 30, 2009 (Dollars in thousands)
Commercial Construction Lease
Financing Mortgage Consumer
Total Specific ALLL $106,701 $171,031 -
$35,492 - $313,224 Impaired loans $619,544
$751,976 - $167,863 - $1,539,383 Specific ALLL to impaired loans
17.22 % 22.74 % - 21.14 %
- 20.35 % General ALLL $266,563 $168,309 $24,609
$108,848 $325,848 $894,177 Loans held-in-portfolio, excluding
impaired loans $12,456,324 $1,130,093 $699,350 $4,379,509
$4,191,410 $22,856,686 General ALLL to loans held-in-portfolio,
excluding impaired loans 2.14 % 14.89 % 3.52 %
2.49 % 7.77 % 3.91 % Total ALLL $373,264
$339,340 $24,609 $144,340 $325,848 $1,207,401 Total loans
held-in-portfolio $13,075,868 $1,882,069 $699,350 $4,547,372
$4,194,410 $24,396,069 ALLL to loans held-in-portfolio 2.85
% 18.03 % 3.52 % 3.17 % 7.77 %
4.95 %
The increase in the allowance for loan losses from September 30,
2009 to December 31, 2009 was primarily attributable to increased
reserves for commercial loans. The commercial sector continued
reporting deteriorating results which reflected higher
non-performing loans and net charge-offs. The total allowance for
loan losses for construction loans increased by approximately $2
million from September 30, 2009 to December 31, 2009 after
charging-off $92.6 million in the fourth quarter of 2009 and
considering a portfolio reduction of $158 million. The allowance
for loan losses to construction loans held-in-portfolio was 19.79%
as of December 31, 2009 compared with 18.03% as of September 30,
2009. The construction loans portfolio maintains the highest
allowance coverage due to the continued deterioration of the
economic and housing market conditions in Puerto Rico, and also in
the U.S. mainland. The most significant specific reserves for
impaired loans during the fourth quarter of 2009 pertain to
particular construction borrowers. The Corporation also recorded
higher reserves to cover inherent losses in the BPNA
non-conventional mortgage and the E-LOAN home equity lines of
credit portfolios. Losses related to loans individually evaluated
for impairment are considered in the computation of general
reserves.
The Corporation’s recorded investment in commercial,
construction and mortgage loans that were considered impaired and
the related allowance for loan losses as of December 31, 2009,
September 30, 2009, and December 31, 2008 were:
December
31, 2009 September 30, 2009 December 31, 2008
(In millions)
Recorded Investment
Allowance for
loan losses
Recorded Investment
Allowance for
loan losses
Recorded Investment
Allowance for
loan losses
Impaired loans: Allowance for loan losses
required $1,263.3 $323.9 $1,134.5 $313.2 $664.9 $194.7 No allowance
for loan losses required 410.3 - 404.9
- 232.7 - Total impaired loans $1,673.6
$323.9 $1,539.4 $313.2 $897.6 $194.7
The following table sets forth an analysis of the activity in
the specific reserves for impaired loans for the quarters ended
December 31, 2009 and September 30, 2009:
For the quarter ended December 31, 2009
(In thousands) Commercial Loans Construction Loans
Mortgage Loans Total Specific ALLL as of October 1,
2009 $106,701 $171,031 $35,492 $313,224
Provision for impaired loans 45,370 84,155 25,188 154,713 Less: Net
charge-offs 43,302 92,279 8,469 144,050
Specific ALLL as of December 31, 2009 $108,769
$162,907 $52,211 $323,887
For the quarter ended September 30, 2009 (In thousands)
Commercial Loans Construction Loans Mortgage
Loans Total Specific ALLL as of July 1, 2009 $85,608
$197,898 $29,584 $313,090 Provision for impaired
loans 44,800 68,541 12,183 125,524 Less: Net charge-offs
23,707 95,408 6,275 125,390 Specific ALLL as
of September 30, 2009 $106,701 $171,031
$35,492 $313,224
The Corporation’s specific allowance for loan losses as of
December 31, 2009 increased by $11 million when compared to the
previous quarter after recording approximately $144 million in
charge-offs, of which $92 million pertained to the construction
loans portfolio, principally from the BPPR reportable segment.
Given the existing adverse economic conditions, it is likely
that the Corporation will continue to experience heightened credit
losses, high levels of non-performing assets and significant levels
of provision for loan losses.
Non-interest
Income
Non-interest income from continuing operations totaled $175.9
million for the quarter ended December 31, 2009 compared with
$160.0 million for the quarter ended September 30, 2009 and $141.5
million for the quarter ended December 31, 2008.
The variance in non-interest income for the quarter ended
December 31, 2009 compared with the quarter ended September 30,
2009 was principally due to lower indemnity reserve requirements on
certain former sales agreements in the U.S. mainland operations
based on recent analyses which consider volume of claims and loss
experience. The positive variance in non-interest income was also
impacted by lower other-than-temporary impairments on investment
securities, which were mostly related to equity securities
available-for-sale and tax credit investments classified as other
investment securities.
The increase in non-interest income for the quarter ended
December 31, 2009 compared with the same quarter in 2008 was
principally due to the recording during the quarter ended December
31, 2008 of unfavorable “lower of cost or fair value” adjustments
related to loans reclassified to held-for-sale primarily related to
a lease portfolio of the U.S. mainland operations sold in the first
quarter of 2009 and impairments on investments accounted under the
equity method. These favorable variances were partially offset by
higher unfavorable adjustments in the fair value of mortgage
servicing rights in the Puerto Rico operations.
Operating
Expenses
Operating expenses totaled $298.8 million for the quarter ended
December 31, 2009, an increase of $78.2 million, compared with
$220.6 million for the third quarter of 2009. Operating expenses
for the quarter ended December 31, 2008 totaled $360.2 million.
The increase in operating expenses for the quarter ended
December 31, 2009 when compared with the third quarter of 2009 was
principally due to the recognition during the quarter ended
September 30, 2009 of an $80.3 million gain on the extinguishment
of debt specifically related to the exchange of the trust preferred
securities for common stock. Offsetting this variance was a $9.3
million decrease in personnel costs, mainly related to
salaries.
The decrease of $61.4 million in operating expenses for the
quarter ended December 31, 2009 when compared with the same quarter
of the previous year was principally due to lower personnel costs
and net occupancy expenses by $27.7 million and $8.9 million,
respectively, principally due to downsizing of the U.S. operations
and restructuring costs recorded in the fourth quarter of 2008 upon
announcement of the BPNA restructuring plan. Also, financial
results of the fourth quarter of 2008 included $10.9 million of the
partial impairment of E-LOAN’s trademark.
Operating expenses for the year ended December 31, 2009 totaled
$1.15 billion, compared to $1.34 billion in 2008. While both
figures include non-recurring items, they also reflect the impact
of a series of expense-reduction initiatives undertaken during
2009. These include the sale or closing of non-performing
businesses and the consolidation of branches in the United States
and Puerto Rico (a net reduction of 46 branches) and the
implementation of cost-cutting measures such as the reduction in
salaries of executive officers, hiring freeze and the suspension of
matching contributions to retirement plans. The total number of
employees went from 10,670 to 9,400, a decline of 12%.
Income Taxes
Income tax expense amounted to $6.9 million for the quarter
ended December 31, 2009, compared with an income tax expense of
$6.3 million for the quarter ended September 30, 2009 and income
tax expense of $309.1 million for the quarter ended December 31,
2008.
The variance in income tax from continuing operations for the
fourth quarter of 2009 when compared to the same quarter in 2008
was primarily due to the recognition during the fourth quarter of
2008 of a valuation allowance on the Corporation’s deferred tax
asset related to the U.S. mainland operations that had a negative
impact on income tax expense.
Balance Sheet
Comments:
The accompanying Exhibit A provides information on principal
categories of the Corporation’s balance sheet as of December 31,
2009, September 30, 2009 and December 31, 2008, and the following
sections provide more detailed information.
Investment
securities
The Corporation’s portfolio of investment securities
available-for-sale and held-to-maturity totaled $6.9 billion as of
December 31, 2009, compared with $7.2 billion as of September 30,
2009 and $8.2 billion as of December 31, 2008. The Corporation
holds investment securities primarily for liquidity, yield
enhancement and interest rate risk management. The portfolio
primarily consists of very liquid, high quality securities. The
decline in the Corporation’s available-for-sale and
held-to-maturity investment portfolios from December 31, 2008 to
the end of 2009 was mainly associated with maturities of securities
and the sale of $3.4 billion of investment securities
available-for-sale, principally U.S. agency securities (FHLB
notes), of which $2.9 billion were re-invested, primarily in GNMA
mortgage-backed securities.
Loans
A breakdown of the Corporation’s total loan portfolio for the
continuing operations at period-end, which represents the principal
category of earning assets, follows:
(In billions) December 31, 2009
September 30, 2009 Variance December 31, 2008
Variance Commercial $12.7 $13.1
($0.4 ) $13.7 ($1.0 ) Construction 1.7 1.9 (0.2 ) 2.2 (0.5 )
Mortgage 4.7 4.6 0.1 4.6 0.1 Consumer 4.0 4.2 (0.2 ) 4.7 (0.7 )
Lease financing 0.7 0.7 - 1.1
(0.4 ) Total loans $23.8 $24.5 ($0.7 )
$26.3 (2.5 )
The reduction in commercial and construction loans between
September 30, 2009 and December 31, 2009 was principally due to the
increased level of charge-offs, slow loan origination activity
associated with a continued recession in Puerto Rico, and credit
markets continuing to be tight. Also, the decrease in the
commercial loan portfolio was associated with the Corporation’s
decision to exit or downsize certain business lines at BPNA and a
significant repayment of a government related credit in the BPPR
reportable segment.
The decline in the consumer loan portfolio from the end of the
third quarter of 2009 to December 31, 2009 was mainly related to
run-off of existing portfolios originated by Popular Finance,
E-LOAN or exited lines of businesses at the BPNA operations, as
well as the reduction caused by the consumer loans net charge-offs
recorded during the fourth quarter of 2009 and lower volume of auto
loans.
The reductions in various loan categories from December 31, 2008
to the end of 2009 are mainly associated with the same factors
described above. The reduction in the lease financing portfolio as
of December 31, 2009 compared to the same date of the previous year
was the result of loan sales by Popular Equipment Finance, a
subsidiary of BPNA, principally during the first quarter of
2009.
Deposits
A breakdown of the Corporation’s deposits at period-end
follows:
(In billions) December 31, 2009
September 30, 2009 Variance December 31, 2008
Variance Demand * $5.1 $4.9 $0.2
$4.9 $0.2 Savings 9.6 9.5 0.1 9.6 - Time 11.2 12.0
(0.8 ) 13.1 (1.9 ) Total deposits $25.9
$26.4 (0.5 ) $27.6 ($1.7 ) * Includes
non-interest and interest bearing demand deposits
Brokered certificates of deposit, which are included as time
deposits, amounted to $2.7 billion as of December 31, 2009 compared
with $2.8 billion as of September 30, 2009 and $3.1 billion as of
December 31, 2008.
In October 2009, the Corporation completed the sale of six New
Jersey bank branches pertaining to BPNA with approximately $225
million in total deposits.
The decrease in time deposits from September 30, 2009 to
December 31, 2009 occurred principally in the Corporation’s U.S.
mainland operations in part due to deleveraging strategies,
including the closure, sale and consolidation of branches, as well
as a gradual reduction in the pricing of deposits, including
internet deposits. The banking operations in Puerto Rico also
experienced a decline in time deposits, but the decline was offset
by increases in demand deposits and savings accounts. The decrease
in time deposits from December 31, 2008 to the same date in 2009
was reflected in both the Corporation’s U.S. mainland and Puerto
Rico banking operations. This reduction was also associated to the
factors described in the previous paragraph as well as the
deleveraging of the Corporation’s balance sheet mostly due to lower
balances of loans and investment securities from December 31, 2008
to the same date in 2009. Also, there was a reduction in brokered
certificates of deposit.
Borrowings and
capital
The accompanying Exhibit A also provides information on
borrowings and stockholders’ equity as of December 31, 2009,
September 30, 2009 and December 31, 2008.
The Corporation’s borrowings amounted to $5.3 billion as of
December 31, 2009, compared with $5.5 billion as of September 30,
2009 and $6.9 billion as of December 31, 2008. As a result of the
decline in earning assets, the Corporation is deleveraging its
balance sheet through a reduction in borrowings, principally
repurchase agreements, accompanied by a decrease in notes payable
mainly due to the maturity of unsecured senior debt of Popular
North America.
Stockholders’ equity totaled $2.5 billion as of December 31,
2009, compared with $2.7 billion as of September 30, 2009 and $3.3
billion as of December 31, 2008. The decrease in stockholders’
equity from September 30, 2009 to December 31, 2009 is mainly
related to the net loss of $213.2 million recorded during the
fourth quarter of 2009.
Below is a summary of the Corporation’s regulatory capital
ratios as of December 31, 2009 and September 30, 2009.
December 31,
2009
September 30,
2009
Minimum
required
Tier 1 risk-based capital
9.81% 10.23% 4.00% Total risk-based capital 11.13% 11.53% 8.00%
Tier 1 leverage 7.50% 7.93% 3.00% - 4.00%
Rules adopted by the federal banking agencies provide that a
depository institution will be deemed to be well capitalized if it
maintains a leverage ratio of at least 5%, a Tier 1 risk-based
capital ratio of at least 6% and a total risk-based capital ratio
of at least 10%.
The Corporation’s Tier 1 common equity to risk-weighted assets
ratio was 6.39% as of December 31, 2009 and 6.88% as of September
30, 2009.
Regulatory capital requirements for banking institutions are
based on Tier 1 and Total capital, which include both common stock
and certain qualifying preferred stock.
Reconciliation of Non-GAAP
Financial Measure:
The table below presents a reconciliation of Tier 1 common
equity to common stockholders’ equity. Ratios calculated based upon
Tier 1 common equity have become a focus of regulators and
investors, and management believes ratios based on Tier 1 common
equity assist investors in analyzing the Corporation’s capital
position. In connection with the Supervisory Capital Assessment
Program (“SCAP”), the Federal Reserve began supplementing its
assessment of the capital adequacy of a bank holding company based
on a variation of Tier 1 capital, known as Tier 1 common equity.
Because Tier 1 common equity is not formally defined by GAAP or,
unlike Tier 1 capital, codified in the federal banking regulations,
this measure is considered to be a non-GAAP financial measure.
Non-GAAP financial measures have inherent limitations, are not
required to be uniformly applied and are not audited. To mitigate
these limitations, the Corporation has procedures in place to
calculate these measures using the appropriate GAAP or regulatory
components. Although these non-GAAP financial measures are
frequently used by stakeholders in the evaluation of a company,
they have limitations as analytical tools, and should not be
considered in isolation, or as a substitute for analyses of results
as reported under GAAP.
The following table provides a reconciliation of common
stockholders’ equity (GAAP) to Tier 1 common equity (non-GAAP):
(In thousands)
December 31,
2009
September 30,
2009
Common stockholders’ equity $2,488,657 $2,692,296
Less: Unrealized gains on
available for sale securities,
net of tax (1)
(91,068 ) (121,735 ) Less: Disallowed deferred tax assets (2)
(179,655 ) (195,894 ) Less: Intangible assets: Goodwill (604,349 )
(606,508 ) Other disallowed intangibles (18,056 ) (21,873 ) Less:
Aggregate adjusted carrying value of all non-financial equity
investments (2,343 ) (2,362 ) Add: Pension liability adjustment,
net of tax and accumulated net gains (losses) on cash flow hedges
(3) 78,488 119,007 Total Tier 1 common
equity $1,671,674 $1,862,931
(1) In accordance with regulatory
risk-based capital guidelines, Tier 1 capital excludes net
unrealized gains (losses) on available-for-sale debt securities and
net unrealized gains on available-for-sale equity securities with
readily determinable fair values. In arriving at Tier 1 capital,
institutions are required to deduct net unrealized losses on
available-for-sale equity securities with readily determinable fair
values, net of tax.
(2) Approximately $186 million of
the Corporation’s $364 million of net deferred tax assets as of
December 31, 2009 ($167 million and $381 million, respectively as
of September 30, 2009), were included without limitation in
regulatory capital pursuant to the risk-based capital guidelines,
while approximately $180 million of such assets as of December 31,
2009 ($196 million as of September 30, 2009) exceeded the
limitation imposed by these guidelines and, as “disallowed deferred
tax assets,” were deducted in arriving at Tier 1 capital. The
remaining $2 million of the Corporation’s other net deferred tax
assets as of December 31, 2009 ($18 million as of September 30,
2009) represented primarily the following items (a) the deferred
tax effects of unrealized gains and losses on available-for-sale
debt securities, which are permitted to be excluded prior to
deriving the amount of net deferred tax assets subject to
limitation under the guidelines; (b) the deferred tax asset
corresponding to the pension liability adjustment recorded as part
of accumulated other comprehensive income; and (c) the deferred tax
liability associated with goodwill and other intangibles.
(3) The Federal Reserve Bank has
granted interim capital relief for the impact of pension liability
adjustment.
Forward-Looking
Statements:
The information included in this press release may contain
certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements
are based on management’s current expectations and involve certain
risks and uncertainties that may cause actual results to differ
materially from those expressed in forward-looking statements.
Factors that might cause such a difference include, but are not
limited to (i) the rate of declining growth in the economy and
employment levels, as well as general business and economic
conditions; (ii) changes in interest rates, as well as the
magnitude of such changes; (iii) the fiscal and monetary policies
of the federal government and its agencies; (iv) changes in federal
bank regulatory and supervisory policies, including required levels
of capital; (v) the relative strength or weakness of the consumer
and commercial credit sectors and of the real estate markets in
Puerto Rico and the other markets in which borrowers are located;
(vi) the performance of the stock and bond markets; (vii)
competition in the financial services industry; (viii) possible
legislative, tax or regulatory changes; and (ix) difficulties in
combining the operations of acquired entities. For a discussion of
such factors and certain risks and uncertainties to which the
Corporation is subject, see the Corporation’s Annual Report on Form
10-K for the year ended December 31, 2008 and its Form 10-Q for the
quarter and nine months ended September 30, 2009 as well as its
filings with the U.S. Securities and Exchange Commission. Other
than to the extent required by applicable law, including the
requirements of applicable securities laws, the Corporation assumes
no obligation to update any forward-looking statements to reflect
occurrences or unanticipated events or circumstances after the date
of such statements.
* * *
Founded in 1893, Popular, Inc. (NASDAQ: BPOP) is the No. 1
banking institution by both assets and deposits in Puerto Rico and
ranks 35th by assets among U.S. banks. 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, Illinois, Florida and California.
Popular also continues to expand its expertise in processing
technology through its subsidiary EVERTEC, which processes
approximately 1.1 billion transactions annually in the Caribbean
and Latin America.
* * *
An electronic version of this press release can be found at the
Corporation’s website, www.popular.com.
EXHIBIT A POPULAR, INC. Financial
Summary (Unaudited)
Quarter ended 4th Quarter
Quarter ended
4th Quarter 2009 December 31, 2009 vs 2008 September 30, vs
3rd Quarter 2009
2009 2008 $ Variance
2009 $ Variance
Summary of Operations --- (In thousands,
except share information) Interest income
$440,296 $541,542 ($101,246 ) $454,463 ($14,167 ) Interest
expense
170,978 252,676 (81,698
) 178,074 (7,096 ) Net interest income
269,318 288,866 (19,548 ) 276,389 (7,071 ) Provision for
loan losses
352,771 388,823
(36,052 ) 331,063 21,708 Net interest
income after provision for loan losses
(83,453 )
(99,957 ) 16,504 (54,674 ) (28,779 ) Net (loss) gain on sale
and valuation adjustments of investment securities
(1,246
) 286 (1,532 ) (9,059 ) 7,813 Trading account profit
8,499 5,098 3,401 7,579 920 Gain (loss) on sale of loans,
including adjustments to indemnity reserves, and valuation
adjustments on loans held-for-sale
934 (19,678 ) 20,612
(8,728 ) 9,662 Other non-interest income
167,700
155,791 11,909 170,252
(2,552 ) Total non-interest income
175,887
141,497 34,390 160,044 15,843 Personnel costs
121,219
148,950 (27,731 ) 130,547 (9,328 ) Loss (gain) on early
extinguishment of debt
1,004 - 1,004 (79,304 ) 80,308 Other
operating expenses
176,531 211,230
(34,699 ) 169,357 7,174 Total
operating expenses
298,754 360,180
(61,426 ) 220,600 78,154 Loss
from continuing operations before income tax
(206,320
) (318,640 ) 112,320 (115,230 ) (91,090 ) Income tax expense
6,907 309,067 (302,160 )
6,331 576 Loss from continuing operations, net
of income tax
(213,227 ) (627,707 ) 414,480 (121,561
) (91,666 ) Loss from discontinued operations, net of income tax
- (75,193 ) 75,193 (3,427
) 3,427 Net loss
($213,227 )
($702,900 ) $489,673 ($124,988 )
($88,239 ) Net (loss) income applicable to common stock (1)
($213,227 ) ($717,987 ) $504,760
$595,614 ($808,841 ) Earnings (losses)
per common share: (1) Basic and diluted earnings (losses) per
common share from continuing operations
($0.33
) ($2.28 )
$1.41 Basic and diluted losses per common share
from discontinued operations
- ($0.27
) ($0.01 ) Basic and diluted
earnings (losses) per common share - Total
($0.33 )
($2.55 ) $1.40
Dividends declared per common share
- $0.08
- Average common shares outstanding
639,401,594 281,786,725 425,672,578 Average common shares
outstanding - assuming dilution
639,401,594 281,786,725
425,672,578 Common shares outstanding at end of period
639,540,105 282,004,713 639,541,515
Market value
per common share $2.26 $5.16 $2.83
Book value per
common share $3.89 $6.33 $4.21
Market
Capitalization --- (In millions) $1,445 $1,455 $1,810
Selected Average Balances --- (In millions) Total
assets
$35,025 $39,531 ($4,506 ) $35,813 ($788 )
Stockholders' equity
2,530 3,114 (584 ) 2,771 (241 )
Selected Financial Data at Period-End --- (In millions)
Total assets
$34,736 $38,883 ($4,147 ) $35,638 ($902 ) Loans
(2)
23,804 26,276 (2,472 ) 24,472 (668 ) Earning assets (2)
32,341 36,154 (3,813 ) 33,398 (1,057 ) Deposits
25,925 27,550 (1,625 ) 26,383 (458 ) Borrowings
5,289
6,943 (1,654 ) 5,461 (172 ) Interest bearing liabilities
26,718 30,200 (3,482 ) 27,562 (844 ) Stockholders' equity
2,539 3,268 (729 ) 2,742 (203 )
Performance
Ratios Net interest yield from continuing operations (3)
3.28 % 3.23 % 3.30 % Return on assets
(2.42
) (7.07 ) (1.38 ) Return on common equity
(34.12
) (123.03 ) (26.24 )
Credit Quality Data ---
(Dollars in millions) Non-performing loans (4)
$2,276.4
$1,202.8 $1,073.6 $2,115.5 $160.9 Non-performing loans to loans
held-in-portfolio
9.60 % 4.67 % 8.67 % Allowance for
loan losses to non-performing loans
55.40 73.40 57.07
Allowance for loan losses to loans held-in-portfolio
5.32
3.43 4.95 (1) Refer to table included in press
release for a reconciliation of earnings (losses) per common share.
(2) Includes $7 million in loans from discontinued operations as of
December 31, 2008. (3) Not on a taxable equivalent basis. (4)
Non-performing loans ("NPL") exclude $3 million in NPL from
discontinued operations as of December 31, 2008. Notes:
Certain reclassifications have been made to prior periods to
conform with this quarter presentation.
EXHIBIT A
(CONTINUED) POPULAR, INC.
Financial Summary (Unaudited)
For the year ended December 31,
2009
2008 $ Variance
Summary of Operations --- (In thousands,
except share information) Interest income
$1,854,997 $2,274,123 ($419,126 ) Interest expense
753,744 994,919 (241,175 )
Net interest income
1,101,253 1,279,204 (177,951 )
Provision for loan losses
1,405,807 991,384
414,423 Net interest income after
provision for loan losses
(304,554 ) 287,820 (592,374
) Net gain on sale and valuation adjustments of investment
securities
219,546 69,716 149,830 Trading account profit
39,740 43,645 (3,905 ) (Loss) gain on sale of loans,
including adjustments to indemnity reserves, and valuation
adjustments on loans held-for-sale
(35,060 ) 6,018
(41,078 ) Other non-interest income
672,275
710,595 (38,320 ) Total non-interest income
896,501 829,974 66,527 Personnel costs
533,263
608,465 (75,202 ) Gain on early extinguishment of debt
(78,300 ) - (78,300 ) Other operating expenses
699,233 728,263 (29,030 )
Total operating expenses
1,154,196 1,336,728
(182,532 ) Loss from continuing operations
before income tax
(562,249 ) (218,934 ) (343,315 )
Income tax (benefit) expense
(8,302 ) 461,534
(469,836 ) Loss from continuing operations,
net of income tax
(553,947 ) (680,468 ) 126,521 Loss
from discontinued operations, net of income tax
(19,972
) (563,435 ) 543,463 Net loss
($573,919 ) ($1,243,903 ) $669,984
Net income (loss) applicable to common stock (1)
$97,377 ($1,279,200 ) $1,376,577
Earnings (losses) per common share: (1) Basic and diluted
earnings (losses) per common share from continuing operations
$0.29 ($2.55
) Basic and diluted losses per common share from
discontinued operations
($0.05
) ($2.00 )
Basic and diluted earnings (losses) per common share - Total
$0.24 ($4.55
) Dividends declared per common share
$0.02 $0.48
Average common shares outstanding
408,229,498
281,079,201 Average common shares outstanding - assuming dilution
408,229,498 281,079,201 Common shares outstanding at end of
period
639,540,105 282,004,713
Market value per
common share $2.26 $5.16
Book value per common
share $3.89 $6.33
Market Capitalization ---
(In millions) $1,445 $1,455
Selected Average
Balances --- (In millions) Total assets
$36,569 $40,924
($4,355 ) Stockholders' equity
2,852 3,358 (506 )
Performance Ratios Net interest yield from continuing
operations (2)
3.23 % 3.55 % Return on assets
(1.57 ) (3.04 ) Return on common equity
(32.95
) (44.47 )
Credit Quality Data --- (Dollars in
millions) Non-performing loans (3)
$2,276.4 $1,202.8
$1,073.6 Non-performing loans to loans held-in-portfolio
9.60 % 4.67 % Allowance for loan losses to
non-performing loans
55.40 73.40 Allowance for loan losses
to loans held-in-portfolio
5.32 3.43 (1) Refer
to table included in press release for a reconciliation of earnings
(losses) per common share. (2) Not on a taxable equivalent basis.
(3) Non-performing loans ("NPL") exclude $3 million in NPL from
discontinued operations as of December 31, 2008. Notes:
Certain reclassifications have been made to prior periods to
conform with this quarter presentation.
EXHIBIT B POPULAR, INC.
Financial Summary - Segment Reporting (Unaudited)
Quarter ended December 31, 2009 BPPR
BPNA EVERTEC
Intersegment
Eliminations
Total
Reportable
Segments
Summary of Operations --- (In thousands) Net interest
income (expense) $216,044 $80,540 ($274 ) $0 $296,310 Provision for
loan losses 137,189 215,582 -
- 352,771 Net interest income
after provision for loan losses 78,855 (135,042 ) (274 ) - (56,461
) Net (loss) gain on sale and valuation adjustments of
investment securities 10 (484 ) - - (474 ) Trading account profit
8,499 - - - 8,499 Gain (loss) on sale of loans, including
adjustments to indemnity reserves, and valuation adjustments on
loans held-for-sale 208 (6,666 ) - - (6,458 ) Other non-interest
income (service charges on deposits, other service fees and other)
117,870 21,489 63,877
(37,015 ) 166,221 Total non-interest income
126,587 14,339 63,877 (37,015 ) 167,788 Personnel costs
75,617 21,884 19,261 (354 ) 116,408 Loss on early extinguishment of
debt 1,004 - - - 1,004 Other operating expenses 129,340
44,852 25,763 (36,619 )
163,336 Total operating expenses 205,961
66,736 45,024 (36,973 ) 280,748 Income
(loss) from continuing operations, before income tax (519 )
(187,439 ) 18,579 (42 ) (169,421 ) Income tax expense (benefit)
5,341 (19,204 ) 7,247 (17 )
(6,633 ) Income (loss) from continuing operations, net of
income tax (5,860 ) (168,235 ) 11,332 (25 ) (162,788 ) Loss from
discontinued operations, net of income tax - -
- - - Net income
(loss) ($5,860 ) ($168,235 ) $11,332
($25 ) ($162,788 )
Quarter ended
December 31, 2009
Corporate
Eliminations Popular, Inc. Summary
of Operations --- (In thousands) Net interest income
(expense) ($27,188 ) $196 $269,318 Provision for loan losses -
- 352,771 Net interest
income after provision for loan losses (27,188 ) 196 (83,453 )
Net (loss) gain on sale and valuation adjustments of
investment securities (772 ) - (1,246 ) Trading account profit - -
8,499 Gain (loss) on sale of loans, including adjustments to
indemnity reserves, and valuation adjustments on loans
held-for-sale 7,392 - 934 Other non-interest income (service
charges on deposits, other service fees and other) 3,846
(2,367 ) 167,700 Total non-interest
income 10,466 (2,367 ) 175,887 Personnel costs 4,811 -
121,219 Loss on early extinguishment of debt - - 1,004 Other
operating expenses 14,942 (1,747 ) 176,531
Total operating expenses 19,753 (1,747
) 298,754 Income (loss) from continuing
operations, before income tax (36,475 ) (424 ) (206,320 ) Income
tax expense (benefit) 13,758 (218 ) 6,907
Income (loss) from continuing operations, net of income tax
(50,233 ) (206 ) (213,227 ) Loss from discontinued operations, net
of income tax - - - Net
income (loss) ($50,233 ) ($206 ) ($213,227 )
EXHIBIT B (CONTINUED)
POPULAR, INC. Financial Summary - Segment
Reporting (Unaudited) Quarter ended December 31,
2008 BPPR BPNA EVERTEC
Intersegment
Eliminations
Total
Reportable
Segments
Summary of Operations --- (In thousands) Net interest
income (expense) $232,959 $74,292 ($120 ) $0 $307,131 Provision for
loan losses 179,894 208,929 -
- 388,823 Net interest income
after provision for loan losses 53,065 (134,637 ) (120 ) - (81,692
) Net gain (loss) on sale and valuation adjustments of
investment securities 290 (4 ) - - 286 Trading account profit 5,098
- - - 5,098 Gain (loss) on sale of loans, including adjustments to
indemnity reserves, and valuation adjustments on loans
held-for-sale 613 (20,291 ) - - (19,678 ) Other non-interest income
(service charges on deposits, other service fees and other) 131,597
25,718 64,336 (38,019 )
183,632 Total non-interest income 137,598
5,423 64,336 (38,019 ) 169,338 Personnel costs 71,842 48,010
22,933 (426 ) 142,359 Other operating expenses 124,543
90,959 26,012 (37,304 )
204,210 Total operating expenses 196,385
138,969 48,945 (37,730 )
346,569 Income (loss) from continuing operations,
before income tax (5,722 ) (268,183 ) 15,271 (289 ) (258,923 )
Income tax expense (benefit) (18,142 ) 81,320
5,367 (113 ) 68,432 Income (loss) from
continuing operations, net of income tax 12,420 (349,503 ) 9,904
(176 ) (327,355 ) Loss from discontinued operations, net of income
tax - - - -
- Net income (loss) $12,420 ($349,503 )
$9,904 ($176 ) ($327,355 )
Quarter ended December 31, 2008
Corporate Eliminations and Discontinued
Operations Popular, Inc. Summary of Operations
--- (In thousands) Net interest income (expense)
($18,531 ) $266 $288,866 Provision for loan losses -
388,823 Net interest income after
provision for loan losses (18,531 ) 266 (99,957 ) Net (loss)
gain on sale and valuation adjustments of investment securities - -
286 Trading account profit - - 5,098 Gain (loss) on sale of loans,
including adjustments to indemnity reserves, and valuation
adjustments on loans held-for-sale - - (19,678 ) Other non-interest
income (service charges on deposits, other service fees and other)
(25,379 ) (2,462 ) 155,791 Total
non-interest (loss) income (25,379 ) (2,462 ) 141,497
Personnel costs 6,591 - 148,950 Other operating expenses 8,822
(1,802 ) 211,230 Total operating
expenses 15,413 (1,802 ) 360,180
Income (loss) from continuing operations, before income tax (59,323
) (394 ) (318,640 ) Income tax expense (benefit) 218,992
21,643 309,067 Income (loss) from
continuing operations, net of income tax (278,315 ) (22,037 )
(627,707 ) Loss from discontinued operations, net of income tax -
(75,193 ) (75,193 ) Net income (loss)
($278,315 ) ($97,230 ) ($702,900 )
EXHIBIT B (CONTINUED)
POPULAR, INC. Financial Summary - Segment Reporting
(Unaudited) Quarter ended September 30, 2009
BPPR BPNA EVERTEC
Intersegment
Eliminations
Total
Reportable
Segments
Summary of Operations --- (In thousands) Net interest
income (expense) $217,859 $77,588 ($304 ) $0 $295,143 Provision for
loan losses 153,350 177,713 -
- 331,063 Net interest income
after provision for loan losses 64,509 (100,125 ) (304 ) - (35,920
) Net (loss) gain on sale and valuation adjustments of
investment securities (311 ) (5,173 ) - - (5,484 ) Trading account
profit 7,579 - - - 7,579 Gain (loss) on sale of loans, including
adjustments to indemnity reserves, and valuation adjustments on
loans held-for-sale 593 (9,321 ) - - (8,728 ) Other non-interest
income (service charges on deposits, other service fees and other)
122,512 20,889 62,269
(36,160 ) 169,510 Total non-interest income
130,373 6,395 62,269 (36,160 ) 162,877 Personnel costs
73,876 27,287 20,978 (64 ) 122,077 Loss (gain) on early
extinguishment of debt 955 - - - 955 Other operating expenses
128,948 46,347 23,807
(36,170 ) 162,932 Total operating expenses
203,779 73,634 44,785
(36,234 ) 285,964 Income (loss) from
continuing operations, before income tax (8,897 ) (167,364 ) 17,180
74 (159,007 ) Income tax expense (benefit) 1,883
2,553 6,341 31 10,808
Income (loss) from continuing operations, net of income tax
(10,780 ) (169,917 ) 10,839 43 (169,815 ) Loss from discontinued
operations, net of income tax - - -
- - Net income (loss)
($10,780 ) ($169,917 ) $10,839 $43
($169,815 )
Quarter ended
September 30, 2009 Corporate Eliminations and
Discontinued Operations Popular, Inc. Summary
of Operations --- (In thousands) Net interest income
(expense) ($19,037 ) $283 $276,389 Provision for loan losses -
- 331,063 Net interest
income after provision for loan losses (19,037 ) 283 (54,674 )
Net (loss) gain on sale and valuation adjustments of
investment securities (1,517 ) (2,058 ) (9,059 ) Trading account
profit - - 7,579 Gain (loss) on sale of loans, including
adjustments to indemnity reserves, and valuation adjustments on
loans held-for-sale - - (8,728 ) Other non-interest income (service
charges on deposits, other service fees and other) 6,918
(6,176 ) 170,252 Total non-interest
income 5,401 (8,234 ) 160,044 Personnel costs 9,488 (1,018 )
130,547 Loss (gain) on early extinguishment of debt (78,337 )
(1,922 ) (79,304 ) Other operating expenses 8,061
(1,636 ) 169,357 Total operating expenses
(60,788 ) (4,576 ) 220,600 Income
(loss) from continuing operations, before income tax 47,152 (3,375
) (115,230 ) Income tax expense (benefit) (5,171 ) 694
6,331 Income (loss) from continuing
operations, net of income tax 52,323 (4,069 ) (121,561 ) Loss from
discontinued operations, net of income tax - (3,427 )
(3,427 ) Net income (loss) $52,323
($7,496 ) ($124,988 )
EXHIBIT B (CONTINUED) POPULAR, INC.
Financial Summary - Segment Reporting (Unaudited)
Year ended December 31, 2009 BPPR BPNA
EVERTEC
Intersegment
Eliminations
Total
Reportable
Segments
Summary of Operations --- (In thousands) Net interest
income (expense) $866,971 $315,469 ($1,059 ) - $1,181,381 Provision
for loan losses 623,532 782,275 -
- 1,405,807 Net interest
income after provision for loan losses 243,439 (466,806 ) (1,059 )
- (224,426 ) Net (loss) gain on sale and valuation
adjustments of investment securities 227,319 (5,657 ) 7,869 -
229,531 Trading account profit 39,740 - - - 39,740 Gain (loss) on
sale of loans, including adjustments to indemnity reserves, and
valuation adjustments on loans held-for-sale 8,028 (50,480 ) - -
(42,452 ) Other non-interest income (service charges on deposits,
other service fees and other) 478,127 86,368
250,287 ($146,310 ) 668,472
Total non-interest income 753,214 30,231 258,156 (146,310 )
895,291 Personnel costs 302,451 117,448 83,236 (895 )
502,240 Loss (gain) on early extinguishment of debt 1,959 - - -
1,959 Other operating expenses 515,677 196,730
98,071 (145,203 ) 665,275
Total operating expenses 820,087 314,178
181,307 (146,098 ) 1,169,474
Income (loss) from continuing operations, before income tax
176,566 (750,753 ) 75,790 (212 ) (498,609 ) Income tax expense
(benefit) 6,565 (24,896 ) 25,653
(84 ) 7,238 Income (loss) from continuing operations,
net of income tax 170,001 (725,857 ) 50,137 (128 ) (505,847 ) Loss
from discontinued operations, net of income tax - -
- - - Net
income (loss) $170,001 ($725,857 ) $50,137
($128 ) ($505,847 )
Year ended December 31, 2009 Corporate
Eliminations and Discontinued Operations Popular,
Inc. Summary of Operations --- (In thousands) Net
interest income (expense) ($81,140 ) $1,012 $1,101,253 Provision
for loan losses - - 1,405,807
Net interest income after provision for loan losses (81,140
) 1,012 (304,554 ) Net (loss) gain on sale and valuation
adjustments of investment securities (7,927 ) (2,058 ) 219,546
Trading account profit - - 39,740 Gain (loss) on sale of loans,
including adjustments to indemnity reserves, and valuation
adjustments on loans held-for-sale 7,392 - (35,060 ) Other
non-interest income (service charges on deposits, other service
fees and other) 15,800 (11,997 ) 672,275
Total non-interest income 15,265 (14,055 ) 896,501
Personnel costs 32,041 (1,018 ) 533,263 Loss (gain) on early
extinguishment of debt (78,337 ) (1,922 ) (78,300 ) Other operating
expenses 40,846 (6,888 ) 699,233
Total operating expenses (5,450 ) (9,828 ) 1,154,196
Income (loss) from continuing operations, before
income tax (60,425 ) (3,215 ) (562,249 ) Income tax expense
(benefit) (16,231 ) 691 (8,302 ) Income (loss)
from continuing operations, net of income tax (44,194 ) (3,906 )
(553,947 ) Loss from discontinued operations, net of income tax -
(19,972 ) (19,972 ) Net income (loss)
($44,194 ) ($23,878 ) ($573,919 )
EXHIBIT B (CONTINUED)
POPULAR, INC. Financial Summary - Segment Reporting
(Unaudited) Year ended December 31, 2008 BPPR
BPNA EVERTEC
Intersegment
Eliminations
Total
Reportable
Segments
Summary of Operations --- (In thousands) Net interest
income (expense) $959,215 $351,519 ($723 ) - $1,310,011 Provision
for loan losses 519,045 472,299 -
- 991,344 Net interest
income after provision for loan losses 440,170 (120,780 ) (723 ) -
318,667 Net (loss) gain on sale and valuation adjustments of
investment securities 70,497 685 7,681 - 78,863 Trading account
profit 43,645 - - - 43,645 Gain (loss) on sale of loans, including
adjustments to indemnity reserves, and valuation adjustments on
loans held-for-sale 2,054 3,964 - - 6,018 Other non-interest income
(service charges on deposits, other service fees and other) 504,489
136,357 255,577 ($150,620
) 745,803 Total non-interest income 620,685
141,006 263,258 (150,620 ) 874,329 Personnel costs 307,410
182,526 93,180 (2,418 ) 580,698 Loss (gain) on early extinguishment
of debt - - - - - Other operating expenses 492,943
247,868 106,261 (146,794 )
700,278 Total operating expenses 800,353
430,394 199,441 (149,212 )
1,280,976 Income (loss) from continuing
operations, before income tax 260,502 (410,168 ) 63,094 (1,408 )
(87,980 ) Income tax expense (benefit) 21,375 114,670
19,450 (549 ) 154,946
Income (loss) from continuing operations, net of income tax 239,127
(524,838 ) 43,644 (859 ) (242,926 ) Loss from discontinued
operations, net of income tax - - -
- - Net income (loss)
$239,127 ($524,838 ) $43,644
($859 ) ($242,926 )
Year ended
December 31, 2008 Corporate Eliminations and
Discontinued Operations Popular, Inc. Summary
of Operations --- (In thousands) Net interest income
(expense) ($32,013 ) $1,206 $1,279,204 Provision for loan losses 40
- 991,384 Net interest
income after provision for loan losses (32,053 ) 1,206 287,820
Net (loss) gain on sale and valuation adjustments of
investment securities (9,147 ) - 69,716 Trading account profit - -
43,645 Gain (loss) on sale of loans, including adjustments to
indemnity reserves, and valuation adjustments on loans
held-for-sale (1,349 ) 1,349 6,018 Other non-interest income
(service charges on deposits, other service fees and other) (22,134
) (13,074 ) 710,595 Total non-interest
income (32,630 ) (11,725 ) 829,974 Personnel costs 29,849
(2,082 ) 608,465 Loss (gain) on early extinguishment of debt - - -
Other operating expenses 35,250 (7,265 )
728,263 Total operating expenses 65,099
(9,347 ) 1,336,728 Income (loss) from
continuing operations, before income tax (129,782 ) (1,172 )
(218,934 ) Income tax expense (benefit) 305,619 969
461,534 Income (loss) from continuing
operations, net of income tax (435,401 ) (2,141 ) (680,468 ) Loss
from discontinued operations, net of income tax -
(563,435 ) (563,435 ) Net income (loss) ($435,401 )
($565,576 ) ($1,243,903 )
Popular (NASDAQ:BPOP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Popular (NASDAQ:BPOP)
Historical Stock Chart
From Jul 2023 to Jul 2024
