Popular, Inc. Provides Unaudited Preliminary Financial Results for the Quarter Ended March 31, 2010
April 12 2010 - 4:22PM
Business Wire
Popular, Inc. (“the Corporation”) (NASDAQ: BPOP) announced today
a preliminary net loss of approximately $85 million for the quarter
ended March 31, 2010, compared with a net loss of
$213.2 million for the quarter ended December 31, 2009
and a net loss of $52.5 million for the quarter ended
March 31, 2009. The principal items impacting the
Corporation’s unaudited preliminary financial results for the
quarter ended March 31, 2010, when compared with the quarters
ended December 31, 2009 and March 31, 2009, were as
follows:
- Net interest income for the
first quarter of 2010 is estimated at approximately $269 million,
compared with net interest income of $269.3 million for the quarter
ended December 31, 2009 and $272.5 million for the quarter
ended March 31, 2009. The net interest margin is estimated at
3.43% for the quarter ended March 31, 2010, compared with 3.28% for
the quarter ended December 31, 2009 and 3.07% for the quarter ended
March 31, 2009. Average earning assets for the quarter ended March
31, 2010 are estimated at approximately $31.5 billion, compared
with $32.7 billion for the quarter ended December 31, 2009 and
$35.6 billion for the quarter ended March 31, 2009.
- The provision for loan losses
for the first quarter of 2010 is expected to be approximately $240
million or 107% of net charge-offs, compared with $352.8 million or
118% of net charge-offs for the quarter ended December 31,
2009 and $372.5 million or 188% of net charge-offs for the quarter
ended March 31, 2009. The ratio of allowance for loan losses
to loans held-in-portfolio is estimated to be approximately 5.53%
at March 31, 2010, compared with 5.32% at December 31,
2009 and 4.19% at March 31, 2009.The decrease in the provision for
loan losses for the quarter ended March 31, 2010 compared with the
quarter ended December 31, 2009 reflects lower estimated net
charge-offs by approximately $75 million, mainly in the Puerto
Rico construction and commercial loan portfolios, and in the United
States mainland home equity lines of credit portfolio, combined
with higher reserve provisioning during the fourth quarter of 2009,
particularly for the commercial loan sector. Also, the decrease in
the estimated provision for loan losses for the first quarter of
2010 compared with the fourth quarter of 2009 relates to a
reduction of approximately $635 million in loans held-in-portfolio,
principally in the U.S. mainland. The reduction in loans
held-in-portfolio is mostly reflected in the commercial,
construction and consumer loan portfolios, which is in part
influenced by lower loan origination activities in credit markets
that continue to be tight and loan portfolios running-off in
certain business areas that the Corporation exited during 2008 and
2009. Furthermore, the reduction in the loan portfolio relates to
an estimated $224 million in loans charged-off during the quarter
ended March 31, 2010.
- Non-interest income for the
first quarter of 2010 is expected to be approximately $158 million,
compared with non-interest income of $175.9 million for the quarter
ended December 31, 2009 and $334.7 million for the quarter
ended March 31, 2009. The decrease in non-interest income for
the quarter ended March 31, 2010 when compared with the same
quarter in 2009 is mostly driven by gains on the sale of investment
securities of $182.7 million in the first quarter of 2009
associated with the sale of $3.4 billion of investment securities
by Banco Popular de Puerto Rico. The non-interest income for the
first quarter of 2010 was reduced by an estimated charge of
approximately $16 million to increase the loss indemnity reserve
for mortgage loans that had been previously sold with credit
recourse by the Corporation’s Puerto Rico operations.
- Operating expenses for the first
quarter of 2010 are estimated at approximately $281 million,
compared with operating expenses of $298.8 million for the quarter
ended December 31, 2009 and $304.2 million for the quarter
ended March 31, 2009. The decrease in operating expenses for
the first quarter of 2010 compared with the fourth quarter of 2009
is principally associated with lower business promotion,
professional fees and valuation adjustments on other real estate
properties, among other factors.
The unaudited preliminary financial results presented above are
subject to the completion of the Corporation’s financial closing
procedures. Those procedures have not been completed. Accordingly,
these results may change and those changes may be material.
The Corporation expects to report its first quarter 2010
financial results on or about April 21, 2010. The news release
including those results will include further discussion of the
Corporation’s financial results, as well as information regarding
financial condition, credit quality, capital ratios and segment
reporting information.
Forward-Looking
Statements:
The information included in this news release contains certain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements,
including the Corporation’s unaudited preliminary financial results
for the quarter ended March 31, 2010, 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, 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. is the leading banking
institution by both assets and deposits in Puerto Rico and ranks
38th 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 provides
processing technology services 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.
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