Popular, Inc. (“the Corporation” or “Popular”) (NASDAQ: BPOP)
reported a net loss of $227.1 million for the quarter ended
December 31, 2010, compared with net income of $494.1 million, as
recasted, for the quarter ended September 30, 2010, and a net loss
of $213.2 million for the quarter ended December 31, 2009. For the
year ended December 31, 2010, the Corporation’s net income totaled
$137.4 million, compared with a net loss of $573.9 million for the
same period in 2009. Refer to the accompanying Exhibit A -
Financial Summary for “per common share” information and key
performance ratios.
Mr. Richard L. Carrión, Chairman of the Board and Chief
Executive Officer, stated, “During 2010, we were successful in
strengthening our capital base and our leadership position in the
Puerto Rico market. We also made significant progress in improving
our asset quality.”
Mr. Carrión added, “The important steps that we have taken in
2010 have positioned the Corporation to achieve operational
profitability in 2011.”
Highlights for the quarter ended
December 31, 2010
- Reclassification of approximately $1.0
billion of loans held-in-portfolio to held-for-sale, with a
negative impact in fourth quarter earnings of approximately $186
million. A majority of these loans are expected to be sold in the
first quarter of 2011, and consist principally of non-performing
construction, commercial real estate and land loans in Puerto Rico
and U.S. non-conventional residential mortgage loans. For further
details refer to the sections below and Form 8-K filed with the
Securities and Exchange Commission (SEC) on January 31, 2011.
- Retrospective adjustments were made to
the estimated fair values of assets acquired and liabilities
assumed as part of the Westernbank FDIC-assisted transaction
primarily as a result of reductions in estimated credit losses on
the acquired portfolio. These changes, which are described in a
separate section below, resulted in a recast of the second and
third quarter 2010 results.
- Charges of $34.5 million to
non-interest income were recorded during the quarter ended December
31, 2010 to account for settlements of representation and warranty
arrangements and for increases in indemnity reserves for loans
previously sold with credit recourse provisions;
- Prepayment penalties of $12.1 million
were recognized in other operating expenses associated with the
termination of $183 million in FHLB advances.
- A net charge of $7.5 million was
recorded in the fourth quarter of 2010 to cover the uninsured
portion of the settlement of certain securities class action
lawsuits. For further details refer to the Form 8-K filed with the
Securities and Exchange Commission (SEC) on January 31, 2011.
Overview
- The net loss for the fourth quarter of
2010 was primarily driven by an increase in the provision for loan
losses of $139.4 million, when compared with the quarter ended
September 30, 2010, of which $176 million was derived from the
reclassification of approximately $1.0 billion in loans, mostly
non-accruing loans, from the held-in-portfolio to the held-for-sale
category, at lower of cost or fair value. Excluding the $176
million increase in the provision relating to these
reclassifications, the provision for loan losses declined by $36.6
million in the fourth quarter of 2010, compared with the previous
quarter.As announced earlier this week, Banco Popular de Puerto
Rico (“BPPR”), the Corporation’s principal banking subsidiary,
signed a non-binding letter of intent to sell approximately $500
million (book value) of construction and commercial real estate
loans. The loans are part of a portfolio of approximately $603
million (book value) of construction, commercial real estate and
land loans that were reclassified as loans held-for-sale as of
December 31, 2010. In addition, on December 31, 2010, the
Corporation’s U.S. banking subsidiary, Banco Popular North America
(“BPNA”), reclassified approximately $396 million (book value) of
U.S. non-conventional residential mortgage loans as loans
held-for-sale and is pursuing potential loan sales
alternatives.
- Non-interest income declined by $720.3
million in the fourth quarter of 2010 when compared with the third
quarter. The third quarter results included in non-interest income,
$640.8 million related to the gain from the sale of a majority
interest in EVERTEC. The decline also reflected charges to
indemnity reserves on loans sold and a reduction in processing and
credit and debit card fees because of the exclusion of EVERTEC as a
wholly-owned, consolidated subsidiary of Popular, Inc. commencing
in the fourth quarter of 2010.
- Operating expenses for the quarter
ended December 31, 2010 declined $26.9 million when compared with
the third quarter of 2010, principally because of the exclusion of
EVERTEC as a wholly-owned consolidated subsidiary of Popular,
Inc.
- Income tax benefit amounted to $11.8
million for the quarter ended December 31, 2010, compared with
income tax expense of $102.0 million for the quarter ended
September 30, 2010.
Impact of Retrospective Adjustments on
Westernbank’s Business Combination
During the quarter ended December 31, 2010, retrospective
adjustments were made to the estimated fair values of assets
acquired and liabilities assumed associated with the Westernbank
FDIC-assisted transaction in order to reflect new information
obtained during the measurement period (as defined by ASC Topic
805), about facts and circumstances that existed as of the
acquisition date that, if known, would have affected the
acquisition-date fair value measurements. The retrospective
adjustments were mostly driven by revisions in credit loss
assumptions because of new information that became available. The
revisions principally resulted in a decrease in the estimated
credit losses, thus increasing the fair value of acquired loans and
reducing the FDIC loss share indemnification asset.
As previously reported, the Westernbank FDIC-assisted
transaction involved an acquired loan portfolio of over $8.6
billion in unpaid principal balance. The Corporation initially
recorded provisional amounts for the fair values of the assets
acquired and liabilities assumed in the acquisition of the failed
institution because it could only perform limited due diligence
prior to the acquisition date, principally with respect to the
acquired loans.
Management has made retrospective adjustments to the provisional
amounts during the measurement period and thus, as required by ASC
Topic 805, Popular, Inc. has revised comparative information for
prior periods presented in this report as if the accounting for the
business combination had been completed at the acquisition
date.
The following table depicts the principal changes in fair value
and general explanations of the major changes.
(In thousands) April 30, 2010
As recasted [a]
April 30, 2010
As reported [b]
Change Assets: Loans $8,554,744
$8,554,744 - Less: Discount (3,354,287) (4,293,756) $939,469 [c]
Net loans 5,200,457 4,260,988 939,469 FDIC loss share
indemnification asset 2,337,748 3,322,561 (984,813) [d] Goodwill
86,841 106,230 (19,389) Other assets 649,264 670,419 (21,155) [e]
Total assets $8,274,310 $8,360,198 ($85,888)
Liabilities: Deposits $2,391,635
$2,391,635 - Note issued to the FDIC 5,770,495 5,769,696 $799 [f]
Equity appreciation instrument 52,500 52,500 - Contingent liability
on unfunded loan commitments 45,755 132,442 (86,687) [g] Other
liabilities 13,925 13,925 - Total liabilities $8,274,310
$8,360,198 ($85,888) [a] Amounts reported include
retrospective adjustments during the measurement period (ASC Topic
805) related to the Westernbank FDIC-assisted transaction. [b]
Amounts are presented as reported in prior period Form 10-Qs filed
during 2010. [c] Represents the reduction in management’s best
estimate of fair value mainly driven by lower expected future
credit losses on the acquired loan portfolio based on facts and
circumstances existent as of the acquisition date but known to
management during the measurement period. The main factors that
influenced the revised estimated credit losses included review of
collateral, revised appraised values, and review of borrower’s
payment capacity in more thorough due diligence procedures. [d]
This reduction is directly influenced by the reduction in estimated
future credit losses as they are substantially covered by the FDIC
under the 80% FDIC loss sharing agreements. The FDIC loss share
indemnification asset decreased in a greater proportion than the
reduction in the loan portfolio estimated future credit losses
because of the true-up provision of the loss sharing agreement. As
part of the agreement with the FDIC, the Corporation has agreed to
make a true-up payment to the FDIC in the event losses on the loss
sharing agreements fail to reach expected levels as determined
under the criteria stipulated in the agreements. The true-up
payment represents an estimated liability of $169 million for the
recasted estimates, compared with an estimated liability of $50
million in the original reported estimates. This estimated
liability is accounted for as part of the indemnification asset.
[e] Represents revisions to acquisition date estimated fair values
of other real estate properties based on new appraisals obtained.
[f] Represents an increase in the premium on the note issued to the
FDIC, also influenced by the cash flow streams impacted by the
revised loan payment estimates. [g] Reduction due to revised credit
loss estimates and commitments.
The following table depicts the principal changes in the
statement of operations as a result of the recasting for
retrospective adjustments for the quarters ended June 30, 2010 and
September 30, 2010.
As recasted As reported
As recasted As reported (In thousands)
Qtr
June 2010
Qtr
June 2010
Difference Qtr
Sept 2010
Qtr
Sept 2010
Difference Net interest income $314,595 $278,976 $35,619
$356,778 $386,918 ($30,140) Provision for loan losses
202,258 202,258 - 215,013 215,013 - Net
interest income after
provision for loan losses
112,337 76,718 35,619 141,765 171,905 (30,140) Non-interest income
198,827 215,858 (17,031) 825,894 796,524 29,370 Operating expenses
328,416 328,416 - 371,541 371,547 (6)
(Loss) income before income tax (17,252) (35,840) 18,588 596,118
596,882 (764) Income tax expense 27,238 19,988 7,250
102,032 102,388 (356) Net (loss) income
($44,490) ($55,828) $11,338 $494,086 $494,494
($408)
Reconciliation of net (loss) income per
common share:
The following table provides a reconciliation of net (loss)
income per common share for the quarters ended December 31, 2010,
September 30, 2010, and December 31, 2009 and for the years ended
December 31, 2010 and 2009, including the impact of the
retrospective adjustments previously described:
Quarter ended Year ended
December 31,
September 30,
December 31,
December 31,
December 31,
(In thousands, except per share information)
2010
2010
2009
2010
2009
Net (loss) income from continuing
operations
($227,141) $494,086 ($213,227) $137,401 ($553,947) Net loss from
discontinued operations - - - - (19,972) Preferred stock dividends
(310) - - (310) (39,857) Deemed dividend on preferred stock [1] - -
- (191,667) - Preferred stock discount accretion - - - - (4,515)
Favorable impact from exchange of shares
of Series A and B preferred stock for common stock, net of issuance
costs
- - - - 230,388
Favorable impact from exchange of Series C
preferred stock for trust preferred securities
- - - - 485,280
Net (loss) income applicable to common
stock
($227,451) $494,086 ($213,227)
($54,576) $97,377
Average common shares outstanding
1,021,527,855 1,021,374,014 639,401,594 885,154,040 408,229,498
Average potential dilutive common shares - - -
- -
Average common shares outstanding –
assuming dilution
1,021,527,855 1,021,374,014 639,401,594
885,154,040 408,229,498
Basic and diluted net (loss) income per
common share from continuing operations
($0.22) $0.48 ($0.33) ($0.06) $0.29
Basic and diluted net loss per common
share from discontinued operations
- - - - (0.05)
Total basic and diluted net (loss) income
per common share
($0.22) $0.48 ($0.33) ($0.06)
$0.24
[1] Deemed dividend related to the
issuance of depositary shares and the conversion of the preferred
stock into shares of common stock in the second quarter of
2010.
Net Interest Income
Net interest income for the fourth quarter of 2010 was $354.6
million, compared with $356.8 million for the third quarter of 2010
and $269.3 million for the fourth quarter of 2009.
The following table summarizes the principal changes in average
earning assets and funding sources and their corresponding yields
and costs for the quarters ended December 31, 2010, September 30,
2010 and December 31, 2009.
Average Balances Average Yields /
Costs (Dollars in billions) 4th
Quarter 2010
3rd
Quarter 2010
4th
Quarter 2009
4th
Quarter
2010
3rd
Quarter
2010
4th
Quarter
2009
Money market, trading and investment securities $7.7 $8.2 $8.7
3.22% 3.21% 3.51% Loans: Commercial (a) 12.7 13.0 14.7 4.77 4.81
4.75 Mortgage 4.7 4.6 4.5 5.91 5.94 6.05 Consumer 3.7 3.8 4.1 10.43
10.45 10.11 Lease financing 0.6 0.6 0.7 8.94 8.74 8.61 Total loans,
excluding covered loans 21.7 22.0 24.0 6.10 6.14 6.02 Covered loans
(b) 5.0 5.0 - 8.84 9.15 - Total earning assets $34.4 $35.2 $32.7
5.86% 5.89% 5.35% Interest bearing deposits $22.1 $22.2
$21.8 2.10% 2.22% 1.92% Borrowings 7.2 8.7 5.3 3.94 3.57 4.90 Total
interest bearing liabilities 29.3 30.9 27.1 2.06 2.11 2.50
Non-interest bearing sources of funds 5.1 4.3 5.6 - - - Total funds
$34.4 $35.2 $32.7 1.76% 1.86% 2.07% Net interest spread
3.80% 3.78% 2.85% Net interest yield (c)
4.10% 4.03% 3.28%
(a) Includes commercial construction
loans
(b) Covered loans represent loans acquired
in the Westernbank FDIC-assisted transaction which are covered
under loss sharing agreements with the Federal Deposit Insurance
Corporation (FDIC)
(c) Not on a taxable equivalent basis
Credit Quality
As of December 31, 2010, excluding FDIC covered loans, the
Corporation’s allowance for loan losses decreased to $793 million
or 3.83% of the loans held-in-portfolio compared to $1.2 billion or
5.62% as of September 30, 2010, and $1.3 billion or 5.32% as of
December 31, 2009. This represents a reduction of $451 million when
compared to September 30, 2010, mainly driven by the credit actions
taken by the Corporation during the fourth quarter of 2010. Certain
credit-related events occurred during the fourth quarter of 2010:
(1) the reclassification to loans held-for-sale of approximately
$603 million (book value) in Puerto Rico construction and
commercial real estate loans, and approximately $396 million (book
value) of U.S. non-conventional mortgages, and (2) charge-offs of
approximately $210 million of impaired commercial and construction
loans, as a result of charging-off collateral dependent loans more
promptly. This change in loss recognition for impaired loans is
mainly a timing issue that is consistent with regulatory guidelines
in the current economic environment. These charge-offs had no
impact on the results of operations since the impaired amounts were
reserved in prior periods.
The loans acquired in the Westernbank FDIC-assisted transaction
were recognized at fair value as of the April 30, 2010 acquisition
date, which included the impact of expected credit losses and thus,
no allowance for loan losses was recorded at such date. Based on
management’s assessment of the Westernbank-acquired loan portfolio
as of December 31, 2010, management concluded that there was no
need to record an allowance for loan losses as of year-end.
Provision for Loan Losses
The provision for loan losses totaled $354.4 million or 74% of
net charge-offs for the quarter ended December 31, 2010, compared
to $215.0 million or 87% of net charge-offs for the quarter ended
September 30, 2010, and $352.8 million or 118% for the quarter
ended December 31, 2009. The higher provision for loan losses for
the fourth quarter of 2010, compared with the third quarter of
2010, reflects the incremental effect of the $176 million charge to
provide for the difference between the book value and the estimated
fair value of the portfolios transferred to loans
held-for-sale.
When compared with the fourth quarter of 2009, the provision for
loan losses for the fourth quarter of 2010 slightly increased by
$1.6 million, also as a result of the impact of the aforementioned
transfer to loans held-for-sale.
The following table summarizes the changes in the allowance for
loan losses for the periods indicated:
Quarters ended Years ended (In thousands) December 31, 2010
September 30, 2010 December 31, 2009 December 31, 2010 December 31,
2009 Balance as of the beginning of the period $1,243,994
$1,277,016 $1,207,401 $1,261,204 $882,807 Provision for loan losses
354,409 215,013 352,771 1,011,880 1,405,807 1,598,403
1,492,029 1,560,172 2,273,084 2,288,614 Net charge-offs: Commercial
187,746 100,295 92,938 438,296 263,266 Construction 219,547 70,446
92,642 394,987 309,925 Lease financing 1,423 1,979 4,470 10,427
17,482 Mortgage 18,765 22,490 30,503 94,779 120,606 Consumer 50,490
52,825 78,415 214,163 316,131 Total net charge-offs 477,971 248,035
298,968 1,152,652 1,027,410
Write-downs related to loans transferred
to loans held-for-sale
327,207 - - 327,207 - Balance as of the end of the period $793,225
$1,243,994 $1,261,204 $793,225 $1,261,204 Note: There was no
further credit deterioration requiring an allowance for loan losses
related to the loans acquired in the Westernbank FDIC-assisted
transaction from September 30, 2010 to December 31, 2010.
Commercial and construction loan net charge-offs experienced an
increase of approximately $87.5 million and $149.1 million,
respectively, during the quarter ended December 31, 2010, when
compared with the third quarter of 2010. This increase was mainly
attributed to the Corporation’s decision to promptly charge-off
previously reserved impaired amounts of collateral dependent loans
both in Puerto Rico and the U.S. mainland. Charge-offs for
commercial and construction loans of approximately $108 million and
$102 million, respectively, were recorded during the fourth quarter
of 2010 as a result of this decision.
Excluding the effect of the above mentioned charge-offs, as of
December 31, 2010, the commercial and construction loan net
charge-offs reflected a decrease of $20.5 million and an increase
of $47.1 million, respectively, when compared with the quarter
ended September 30, 2010. Both variances were primarily related to
the BPPR reportable segment. The decrease observed in the Puerto
Rico commercial loan net charge-offs was mainly associated to
higher net charge-offs recorded during the third quarter of 2010
due to updated appraisals. With respect to the Puerto Rico
construction loans, the net charge-offs for the quarter ended
December 31, 2010 were principally driven by certain construction
impaired loans, which had been fully reserved in prior periods.
Excluding the effect of the abovementioned credit-related
events, total net charge-offs at the BPNA reportable segment for
the quarter ended December 31, 2010 remained relatively unchanged
when compared to the quarter ended September 30, 2010, at $95.6
million and $96.1 million, respectively. Commercial loan net
charge-offs at the BPNA reportable segment decreased by
approximately $1.3 million, while the construction loan net
charge-offs reflected an increase of $7.3 million.
The $3.7 million decrease in mortgage loan net charge-offs for
the quarter ended December 31, 2010, compared with the quarter
ended September 30, 2010, was mainly related to the U.S. mainland
non-conventional mortgage business. The BPPR reportable segment
reported an increase in mortgage loan net charge-offs of
approximately $2.1 million when compared to the previous quarter.
The mortgage business has continued to be negatively impacted by
the recessionary economic conditions in Puerto Rico as evidenced by
the increased levels of non-performing mortgage loans. However, the
underwriting criteria and high reinstatement experience associated
with the mortgage loans in Puerto Rico have helped to maintain
losses at manageable levels. The Corporation’s mortgage loan
annualized net charge-off to average mortgage loans
held-in-portfolio in Puerto Rico and the U.S. mainland operations
for the quarter ended December 31, 2010 were 0.86% and 3.61%,
respectively, compared with 0.63% and 5.21% for the quarter ended
September 30, 2010.
The $2.3 million decrease in consumer loan net charge-offs for
the quarter ended December 31, 2010, compared with the quarter
ended September 30, 2010, was primarily associated with the
consumer loan portfolios in the Puerto Rico operations. Most
consumer loan portfolios both in Puerto Rico and the U.S. mainland
have continued to reflect favorable credit trends.
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”):
As a percentage
As a percentage
As a percentage
December 31,
of loans HIP
September 30,
of loans HIP
December 31,
of loans HIP
(Dollars in thousands)
2010
by category (2)
2010
by category (2)
2009
by category
Commercial $725,027 6.4% $784,304 6.7% $836,728 6.6% Construction
238,554 47.6 818,186 62.9 854,937 49.6 Lease financing 5,937 1.0
6,478 1.1 9,655 1.4 Mortgage 542,033 12.0 669,175 14.1 510,847 11.1
Consumer 60,302 1.6 65,906 1.8 64,185 1.6
Total non-performing loans held-
in-portfolio, excluding covered loans
1,571,853 7.6% 2,344,049 10.6% 2,276,352 9.6% Non-performing loans
held-for-sale 671,757 - -
Other real estate owned (“OREO”),
excluding covered OREO
161,496 168,823 125,483
Total non-performing assets, excluding
covered assets
$2,405,106 $2,512,872 $2,401,835 Covered loans
and OREO (1) 83,539 110,047 - Total
non-performing assets $2,488,645 $2,622,919
$2,401,835
Excluding covered loans and covered OREO
Non-performing assets to total assets
7.11% 7.04% 6.91%
Allowance for loan losses to loans
held-in-portfolio
3.83 5.62 5.32
Allowance for loan losses to
non-performing loans, excluding loans held-for-sale
50.46 53.07 55.40
Including covered loans
and covered OREO
Non-performing assets to total assets
6.43% 6.44% 6.91%
Allowance for loan losses to loans
held-in-portfolio
3.10
4.59
5.32
Allowance for loan losses to
non-performing loans, excluding held-for-sale
47.92 50.69 55.40
(1) The amount consists of $26 million in
non-performing covered loans accounted for under ASC Subtopic
310-20 and $58 million in covered OREO as of December 31, 2010, and
$54 million and $56 million, respectively, as of September 30,
2010. It excludes covered loans accounted for under ASC Subtopic
310-30 as they are considered to be performing due to the
application of the accretion method, in which these loans will
accrete interest income over the remaining life of the loans using
estimated cash flow analyses.
(2) Loans held-in-portfolio used in the
computation exclude $4.8 billion in covered loans as of December
31, 2010 and $5.0 billion as of September 30, 2010.
Non-performing assets - Non-covered loan
portfolio
The Corporation’s non-performing loans held-in-portfolio
declined significantly from September 30, 2010 to December 31, 2010
as a result of the previously mentioned credit-related events that
occurred during the fourth quarter of 2010. Total non-performing
loans held-in-portfolio, excluding loans covered under loss sharing
agreements with the FDIC, decreased by $772 million from $2.3
billion as of September 30, 2010 to $1.6 billion as of December 31,
2010, mainly related to the reclassification and charge-offs of
certain loan portfolios to loans held-for-sale. Compared to
September 30, 2010, the Corporation’s total non-performing loans
held-in-portfolio as percentage of total loans held-in-portfolio
improved from 10.6% to 7.6% as of December 31, 2010. Non-performing
loans held-for-sale amounted to $672 million as of December 31,
2010.
Most of the loans transferred to held-for-sale were commercial
and construction loans based in Puerto Rico, where non-performing
loans held-in-portfolio decreased by approximately $552 million. A
significant amount of the reduction in non-performing loans came
from the Puerto Rico construction loan portfolio, which after the
reclassification now carries a balance of approximately $168
million, down 81% from the previous quarter. In the U.S.
operations, the loans held-in-portfolio in non-performing status
declined by $220 million, primarily related to the non-conventional
mortgage loans that were reclassified to held-for-sale.
As of December 31, 2010, the non-performing mortgage loans at
the BPPR reportable segment increased by $37 million. Weak economic
conditions in Puerto Rico continued to adversely impact mortgage
delinquency rates. At the consolidated level, the consumer loans in
non-performing status decreased by approximately $6 million. This
positive variance is a reflection of stable credit performance
experienced in both Puerto Rico and the U.S. mainland consumer
portfolios. Lease financing non-performing loans as of December 31,
2010 reported a slight decrease as compared to the previous
quarter. Refer to the Balance Sheet Comments section of this news
release for a breakdown of the loan portfolio by major loan
categories.
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, 2010, September 30, 2010, and December 31, 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.
December 31, 2010 (Dollars in thousands) Commercial
Construction Lease Financing Mortgage
Consumer Total Specific ALLL $8,550 $216
- $5,004 - $13,770 Impaired loans (1)
462,379 214,911 - 121,209 - 798,499 Specific ALLL to impaired loans
(1) 1.85% 0.10% - 4.13% -
1.72% General ALLL $453,841 $47,508 $13,153 $65,866 $199,087
$779,455 Loans held-in-portfolio, excluding impaired loans (1)
10,973,811 243,235 602,993 4,403,513 3,705,984 19,929,536 General
ALLL to loans held-in-portfolio, excluding impaired loans (1)
4.14% 19.53% 2.18% 1.50% 5.37%
3.91% Total ALLL $462,391 $47,724 $13,153 $70,870 $199,087
$793,225 Total loans held-in-portfolio (1) 11,436,190 458,146
602,993 4,524,722 3,705,984 20,728,035 ALLL to loans
held-in-portfolio (1) 4.04% 10.42% 2.18%
1.57% 5.37% 3.83% (1) Excludes covered loans
from the Westernbank FDIC-assisted transaction.
September 30, 2010 (Dollars in thousands) Commercial
Construction Lease Financing Mortgage Consumer
Total Specific ALLL $107,318 $182,134 -
$62,039 - $351,491 Impaired loans (1) 621,557
794,716 - 309,840 - 1,726,113 Specific ALLL to impaired loans (1)
17.27% 22.92% - 20.02% -
20.36% General ALLL $405,053 $125,454 $14,302 $112,641 $235,053
$892,503 Loans held-in-portfolio, excluding impaired loans (1)
11,097,570 505,213 613,560 4,440,227 3,758,743 20,415,313 General
ALLL to loans held-in-portfolio, excluding impaired loans (1)
3.65% 24.83% 2.33% 2.54% 6.25%
4.37% Total ALLL $512,371 $307,588 $14,302 $174,680 $235,053
$1,243,994 Total loans held-in-portfolio (1) 11,719,127 1,299,929
613,560 4,750,067 3,758,743 22,141,426 ALLL to loans
held-in-portfolio (1) 4.37% 23.66% 2.33%
3.68% 6.25% 5.62% (1) Excludes covered loans
from the Westernbank FDIC-assisted transaction.
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
12,018,546 883,012 675,629 4,416,498 4,045,807 22,039,492 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 1,724,373
675,629 4,603,245 4,045,807 23,713,113 ALLL to loans
held-in-portfolio 3.46% 19.79% 2.75%
3.36% 7.64% 5.32%
As compared to the previous quarter, the allowance for loan
losses as of December 31, 2010 decreased by approximately $451
million from 5.63% to 3.83% as a percentage of loans
held-in-portfolio. This decrease considers reductions in the
Corporation’s general and specific reserves of approximately $113
million and $338 million, respectively. As previously discussed,
the reduction in the allowance for loan losses as of the end of
2010 was primarily attributed to the previously mentioned credit
actions that were taken during the fourth quarter of 2010.
The decrease in the allowance for loan losses for the commercial
and construction loan portfolios as of December 31, 2010 was mainly
related to the reclassifications to loans held-for-sale in Puerto
Rico, and the change to more promptly charge-off the impaired
portions in collateral dependent loans at both reportable segments.
As compared to September 30, 2010, the decline in the allowance for
loan losses for mortgage loans was triggered by the transfer to
loans held-for-sale of all U.S. non-conventional mortgages in
non-performing status, all troubled debt restructures, and all
mortgage loan modifications in process related to this portfolio.
The Corporation retained non-conventional mortgage loans that were
current and not more than 90 days past due. The reduction in the
allowance for loan losses for the consumer loan portfolio continues
to be driven by more stable performance trends in certain
portfolios combined with portfolio reductions both in the Puerto
Rico and the U.S. mainland operations.
The Corporation’s recorded investment in commercial,
construction and mortgage loans that were individually evaluated
for impairment and their specific allowances declined from
September 30, 2010 to December 31, 2010 due to the charge-offs and
loan reclassifications to loans held-for-sale during the fourth
quarter. Since the loans held for sale are recorded at lower of
cost or fair value, they did not require a specific allowance as of
December 31, 2010.
Non-interest Income
Non-interest income totaled $105.6 million for the quarter ended
December 31, 2010, compared with $825.9 million for the quarter
ended September 30, 2010 and $175.9 million for the quarter ended
December 31, 2009.
The decrease of $720.3 million in non-interest income for the
quarter ended December 31, 2010, compared with the quarter ended
September 30, 2010, was principally due to the gain on the sale of
a majority interest in EVERTEC during the third quarter of 2010.
Also influencing the variance in non-interest income were charges
to indemnity reserves on loans sold and lower revenues from
EVERTEC, which is currently an investment accounted for under the
equity method commencing in the fourth quarter of 2010.
The decrease of $70.3 million in non-interest income for the
quarter ended December 31, 2010, compared with the same quarter in
2009, was also influenced by the impact of the increase in
indemnity reserves on loans sold or settlements of such
arrangements and lower revenues related to the EVERTEC operations,
partially offset by lower unfavorable valuation adjustments on
mortgage servicing rights and a favorable impact from the change in
value of the equity appreciation instrument from the Westernbank
FDIC-assisted transaction.
Operating Expenses
Operating expenses totaled $344.7 million for the quarter ended
December 31, 2010, compared with $371.5 million for the quarter
ended September 30, 2010 and $298.8 million for the quarter ended
December 31, 2009.
The decrease of $26.9 million in operating expenses for the
fourth quarter of 2010, compared with the third quarter of 2010,
resulted from several factors, such as lower operating expenses
from EVERTEC, which in the third quarter of 2010 included
approximately $25 million in transaction costs related to the
EVERTEC sale transaction. Operating expenses for the quarter ended
December 31, 2010, included $12.1 million in prepayment penalties
because of the cancellation of FHLB advances. In the third quarter
of 2010, the Corporation also incurred $25.5 million prepayment
penalties on the repurchase of $175 million in term notes in July
2010 and on the cancellation of $180 million of FHLB advances and
$54 million in public fund certificates of deposit as part of
BPNA’s deployment of excess liquidity and as part of a strategy to
increase margin in future periods. The results of the fourth
quarter of 2010 also included $7.5 million to cover the uninsured
portion of the settlement for certain securities class action
lawsuits.
Operating expenses for the quarter ended December 31, 2010
increased by $45.9 million compared with the same quarter of the
previous year. This increase was influenced by the prepayment
penalties on the cancellation of debt as well as the accrual
related to the class action lawsuits. Also, there were higher other
real estate expenses and higher charges to increase the reserve for
unfunded lending commitments.
Income Taxes
Income tax benefit amounted to $11.8 million for the quarter
ended December 31, 2010, compared with an income tax expense of
$102.0 million for the quarter ended September 30, 2010 and income
tax expense of $6.9 million for the quarter ended December 31,
2009.
The variance in income tax for the fourth quarter of 2010 when
compared with the third quarter of 2010 was mainly due to a loss
before tax in the Puerto Rico operations for the fourth quarter of
2010. Also, the third quarter results included the tax impact of
the gain on the sale of the 51% interest in EVERTEC.
Balance Sheet Comments:
The accompanying Exhibit A provides information on the principal
categories of the Corporation’s balance sheet as of December 31,
2010, September 30, 2010 and December 31, 2009, and the following
sections provide more detailed information.
The Corporation’s portfolio of investment securities
available-for-sale and held-to-maturity totaled $5.4 billion as of
December 31, 2010, $6.0 billion as of September 30, 2010 and $6.9
billion as of December 31, 2009. The decline in investment
securities was primarily related to sales, maturities and
prepayments on securities. The proceeds from these activities were
not fully reinvested as part of a strategy to deleverage the
balance sheet, including making prepayments on the note issued to
the FDIC as part of the Westernbank-assisted transaction.
Loans
The following table provides a breakdown of the Corporation’s
loan portfolio as of period-end. The loans acquired in the
Westernbank FDIC-assisted transaction which are subject to the loss
sharing agreements are presented as covered loans in a separate
loan category in the table below.
(In billions) December 31, 2010 September 30, 2010
Variance December 31, 2009 Variance
Non-covered loans held-in-portfolio:
Commercial $11.4 $11.7 ($0.3) $12.7 ($1.3) Construction 0.5
1.3 (0.8) 1.7 (1.2) Mortgage 4.5 4.7 (0.2) 4.7 (0.2) Consumer 3.7
3.8 (0.1) 4.0 (0.3) Lease Financing 0.6 0.6 -
0.7 (0.1) Total non-covered loans held-in-portfolio
$20.7 $22.1 (1.4) $23.8 ($3.1) Covered loans under FDIC loss
sharing agreements 4.8 5.0 (0.2) - 4.8 Loans held-for-sale 1.0
- 1.0 - 1.0 Total loans $26.5
$27.1 ($0.6) $23.8 $2.7
The reduction in commercial and construction loans
held-in-portfolio was principally due to the previously mentioned
reclassifications to loans held-for-sale. Also, the decrease in the
commercial loan portfolio was associated with the Corporation’s
decision to exit or downsize certain business lines at BPNA, which
portfolios are currently in a run-off mode. The decline in the
consumer loan portfolio was mainly related to run-off of existing
portfolios, principally exited lines of businesses at the BPNA
operations, including E-LOAN, the impact of consumer loan net
charge-offs and a decline in the BPPR reportable segment auto loan
portfolio. The decline in mortgage loans was also related to the
transfers to held-for-sale, partially offset by an increase in
mortgage loans in the BPPR reportable segment.
Deposits
A breakdown of the Corporation’s deposits as of period-end
follows:
(In billions) December 31, 2010 September 30, 2010
Variance December 31, 2009 Variance
Demand * $5.5 $6.0 ($0.5) $5.1 $0.4 Savings
10.4 10.3 0.1 9.6 0.8 Time 10.9 11.4 (0.5)
11.2 (0.3) Total deposits $26.8 $27.7 ($0.9)
$25.9 $0.9 * Includes non-interest and interest
bearing demand deposits
Brokered certificates of deposit, which are included as time
deposits, amounted to $2.3 billion as of December 31, 2010 compared
with $2.5 billion as of September 30, 2010 and $2.7 billion as of
December 31, 2009.
The decrease in demand deposits from September 30, 2010 to
December 31, 2010 was principally related to a decrease in deposits
in trust held on a short-term basis principally for payment of
government bonds. The decrease in time deposits was principally due
to a reduction in retail certificates of deposit and brokered
certificates of deposit.
The increase in demand and savings deposits from December 31,
2009 to the same date in 2010 included the impact of deposits
assumed as part of the Westernbank FDIC-assisted transaction. The
decrease in time deposits was due to a reduction in BPNA of
approximately $0.8 billion in non-brokered time deposits, as well
as a decline of $0.4 billion in brokered certificates of deposit,
partially offset by increases in BPPR of $0.9 billion in
non-brokered time deposits, influenced in part by deposits assumed
in the Westernbank FDIC-assisted transaction.
Borrowings and capital
The accompanying Exhibit A also provides information on
borrowings and stockholders’ equity as of December 31, 2010,
September 30, 2010, and December 31, 2009.
The Corporation’s borrowings amounted to $6.9 billion as of
December 31, 2010, compared with $7.7 billion as of September 30,
2010 and $5.3 billion as of December 31, 2009. The decrease in
borrowings from September 30, 2010 to December 31, 2010 was mostly
related to a reduction of $0.8 billion in the note issued to the
FDIC, which has a carrying amount of $2.5 billion as of December
31, 2010 compared with $3.3 billion as of September 30, 2010. This
decrease was principally due to a prepayment of $540 million and
the impact of payments of principal from loan collections submitted
to the FDIC as part of the note agreement during the quarter. The
decline from September 30, 2010 was also influenced by the
previously mentioned cancellation of FHLB advances. The increase in
borrowings from December 31, 2009 to the same date in 2010 was also
related to the issuance of the note payable to the FDIC, partially
offset by a reduction in repurchase agreements and term notes.
Stockholders’ equity totaled $3.8 billion as of December 31,
2010, compared with $4.1 billion as of September 30, 2010 and $2.5
billion as of December 31, 2009. The decrease in stockholders’
equity from September 30, 2010 to December 31, 2010 was principally
due to the impact to earnings of the reclassification to loans
held-for-sale. The increase in stockholders’ equity from December
31, 2009 to the same date in 2010 was mostly influenced by the gain
on the EVERTEC transaction and the issuance of depositary shares
and conversion to common stock during the second quarter of 2010,
partially offset by the lower of cost or market impact of the loan
reclassification.
Popular, Inc.’s capital ratios continued to exceed all
“well-capitalized” regulatory benchmarks as of December 31, 2010.
Below is a summary of the Corporation’s estimated regulatory
capital ratios as of December 31, 2010 and September 30, 2010.
December 31, 2010
September 30, 2010
Minimum required
Tier 1 risk-based capital
14.54% 15.03% 4.00% Total risk-based capital 15.82%
16.32% 8.00% Tier 1 leverage 9.72% 10.10% 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 tangible common equity amounted to $3.0
billion as of December 31, 2010 compared to $3.4 billion as of
September 30, 2010. The Corporation’s Tier 1 common equity to
risk-weighted assets ratio was 10.96% as of December 31, 2010 and
11.56% as of September 30, 2010.
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
Measures:
The tables below present a reconciliation of tangible common
equity to total stockholders’ equity and 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. 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 total
stockholders’ equity to tangible common equity:
(In thousands)
December 31, 2010
September 30, 2010
Total stockholders’ equity $3,805,884 $4,120,131
Less: Preferred stock (50,160) (50,160) Less: Goodwill (647,387)
(645,944) Less: Other intangibles (58,695) (60,438)
Total tangible common equity $3,049,642 $3,363,589
The following table provides a reconciliation of common
stockholders’ equity (GAAP) to Tier 1 common equity (non-GAAP):
December 31,
September 30,
(In thousands)
2010
2010
Common stockholders’ equity $3,755,724 $4,069,971 Less: Unrealized
gains on available for sale securities, net of tax (1) (159,700)
(195,564) Less: Disallowed deferred tax assets (2) (231,475)
(220,683) Less: Intangible assets: Goodwill (647,387) (645,944)
Other disallowed intangibles (26,749) (30,045) Less: Aggregate
adjusted carrying value of all non-financial equity investments
(1,538) (1,590) Add: Pension liability adjustment, net of tax and
accumulated net gains (losses) on cash flow hedges (3)
124,157 74,301 Total Tier 1 common equity $2,813,032
$3,050,446
(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 $144 million of the
Corporation’s $385 million of net deferred tax assets as of
December 31, 2010 ($134 million and $330 million, respectively as
of September 30, 2010), were included without limitation in
regulatory capital pursuant to the risk-based capital guidelines,
while approximately $231 million of such assets as of December 31,
2010 ($221 million as of September 30, 2010) exceeded the
limitation imposed by these guidelines and, as “disallowed deferred
tax assets,” were deducted in arriving at Tier 1 capital. The
remaining $10 million of the Corporation’s other net deferred tax
assets as of December 31, 2010 ($25 million as of September 30,
2010) 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 news release contains 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, 2009 and the Form 10-Qs for
the quarters ended March 31, 2010, June 30, 2010 and September 30,
2010, 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
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.
An electronic version of this press release can be found at the
Corporation’s website, www.popular.com.
Exhibit A follows
EXHIBIT A POPULAR, INC. Financial
Summary (Unaudited)
Quarter ended 4th Quarter Quarter ended 4th Quarter
2010 December 31, 2010 vs 2009 September 30, vs 3rd Quarter 2010
2010 2009 $ Variance 2010 $ Variance
Summary of Operations ---
(In thousands, except share information) Interest income
$ 507,199 $ 440,296 $ 66,903 $ 521,435 ($14,236 ) Interest expense
152,624 170,978 (18,354 )
164,657 (12,033 )
Net interest income
354,575 269,318 85,257 356,778 (2,203 ) Provision for loan losses
354,409 352,771 1,638
215,013 139,396 Net interest income
(expense) after provision for loan losses 166 (83,453 ) 83,619
141,765 (141,599 ) Net (loss) gain on sale and valuation
adjustments of investment securities (218 ) (1,246 ) 1,028 3,732
(3,950 ) Trading account profit 8,303 8,499 (196 ) 5,860 2,443
(Loss) gain on sale of loans, including adjustments to indemnity
reserves, and valuation adjustments on loans held-for-sale (33,033
) 934 (33,967 ) (1,573 ) (31,460 ) FDIC loss share expense (3,046 )
- (3,046 ) (7,668 ) 4,622 Fair value change in equity appreciation
instrument 7,520 - 7,520 10,641 (3,121 ) Gain on sale of processing
and technology business - - - 640,802 (640,802 ) Other non-interest
income 126,080 167,700 (41,620 )
174,100 (48,020 ) Total non-interest income
105,606 175,887 (70,281 ) 825,894 (720,288 ) Personnel costs
114,029 121,219 (7,190 ) 141,205 (27,176 ) Loss on early
extinguishment of debt 12,361 1,004 11,357 25,448 (13,087 ) Other
operating expenses 218,287 176,531
41,756 204,888 13,399
Total operating expenses 344,677 298,754
45,923 371,541 (26,864 )
(Loss) income from continuing operations before income tax (238,905
) (206,320 ) (32,585 ) 596,118 (835,023 ) Income tax (benefit)
expense (11,764 ) 6,907 (18,671 )
102,032 (113,796 ) (Loss) Income from
continuing operations, net of income tax (227,141 ) (213,227 )
(13,914 ) 494,086 (721,227 ) Loss from discontinued operations, net
of income tax - - -
- - Net (loss) income ($227,141
) ($213,227 ) ($13,914 ) $ 494,086 ($721,227 )
Net (loss) income applicable to common stock (1)
($227,451 ) ($213,227 ) ($14,224 ) $ 494,086
($721,537 ) Net (loss) income per common share: (1) Basic
and diluted per common share from continuing operations
($0.22 ) ($0.33
) $ 0.48 Basic and
diluted per common share from discontinued operations - - - Basic
and diluted per common share - Total
($0.22
) ($0.33 )
$ 0.48 Average common
shares outstanding 1,021,527,855 639,401,594 1,021,374,014 Average
common shares outstanding - assuming dilution 1,021,527,855
639,401,594 1,021,374,014 Common shares outstanding at end of
period 1,022,727,802 639,540,105 1,022,686,418
Market
value per common share $ 3.14 $ 2.26 $ 2.90
Book value per
common share $ 3.67 $ 3.89 $ 3.98
Market
Capitalization --- (In millions) $ 3,211 $ 1,445 $ 2,966
Selected Average Balances --- (In millions) Total assets $
39,337 $ 35,025 $ 4,312 $ 40,185 ($848 ) Stockholders' equity 3,884
2,530 1,354 3,493 391
Selected Financial Data at
Period-End --- (In millions) Total assets $ 38,720 $ 34,736 $
3,984 $ 40,725 ($2,005 ) Loans 26,459 23,804 2,655 27,210 (751 )
Earning assets 33,508 32,341 1,167 35,831 (2,323 ) Deposits 26,762
25,925 837 27,740 (978 ) Borrowings 6,947 5,289 1,658 7,695 (748 )
Interest bearing liabilities 28,770 26,718 2,052 30,063 (1,293 )
Stockholders' equity 3,806 2,539 1,267 4,120 (314 )
Performance Ratios Net interest yield from continuing
operations (2) 4.10 % 3.28 % 4.03 % Return on assets (2.29 ) (2.42
) 4.88 Return on common equity (23.51 ) (34.12 ) 56.94
(1) Refer to the table included in the press release
for a reconciliation of net income (loss) per common share. (2) Not
on a taxable equivalent basis. Note: 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, 2010 2009 $ Variance
Summary of Operations --- (In
thousands, except share information) Interest income $
1,948,246 $ 1,854,997 $ 93,249 Interest expense 653,381
753,744 (100,363 ) Net interest
income 1,294,865 1,101,253 193,612 Provision for loan losses
1,011,880 1,405,807 (393,927 )
Net interest income (expense) after provision for loan losses
282,985 (304,554 ) 587,539 Net gain on sale and valuation
adjustments of investment securities 3,992 219,546 (215,554 )
Trading account profit 16,404 39,740 (23,336 ) Loss on sale of
loans, including adjustments to indemnity reserves, and valuation
adjustments on loans held-for-sale (56,139 ) (35,060 ) (21,079 )
FDIC loss share expense (25,751 ) - (25,751 ) Fair value change in
equity appreciation instrument 42,555 - 42,555 Gain on sale of
processing and technology business 640,802 - 640,802 Other
non-interest income 666,330 672,275
(5,945 ) Total non-interest income 1,288,193 896,501
391,692 Personnel costs 514,198 533,263 (19,065 ) Loss
(gain) on early extinguishment of debt 38,787 (78,300 ) 117,087
Other operating expenses 772,562 699,233
73,329 Total operating expenses
1,325,547 1,154,196 171,351
Income (loss) from continuing operations before income tax
245,631 (562,249 ) 807,880 Income tax expense (benefit)
108,230 (8,302 ) 116,532 Income
(loss) from continuing operations, net of income tax 137,401
(553,947 ) 691,348 Loss from discontinued operations, net of income
tax - (19,972 ) 19,972
Net income (loss) $ 137,401 ($573,919 ) $ 711,320
Net (loss) income applicable to common stock (1)
($54,576 ) $ 97,377 ($151,953 ) Net
income (loss) per common share: (1) Basic and diluted per common
share from continuing operations
($0.06
) $ 0.29 Basic and
diluted per common share from discontinued operations -
($0.05 ) Basic and diluted per common
share - Total
($0.06 )
$ 0.24 Dividends declared
per common share -
$ 0.02
Average common shares outstanding 885,154,040 408,229,498 Average
common shares outstanding - assuming dilution 885,154,040
408,229,498 Common shares outstanding at end of period
1,022,727,802 639,540,105
Market value per common
share $ 3.14 $ 2.26
Book value per common share $ 3.67 $
3.89
Market Capitalization --- (In millions) $ 3,211
$ 1,445
Selected Average Balances --- (In millions)
Total assets $ 38,319 $ 36,569 $ 1,750 Stockholders' equity 3,259
2,852 407
Performance Ratios Net interest yield from
continuing operations (2) 3.79 % 3.23 % Return on assets 0.36 (1.57
) Return on common equity 4.37 (32.95 ) (1)
Refer to the table included in the press release for a
reconciliation of net income (loss) per common share. (2) Not on a
taxable equivalent basis. Note: Certain reclassifications
have been made to prior periods to conform with this quarter
presentation.
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