SAN JUAN, Puerto Rico--(BUSINESS WIRE)--Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $46.8 million for the quarter ended September 30, 2016, compared to net income of $89.0 million for the quarter ended June 30, 2016.
Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: “The results for the third quarter reflect the strength of our franchise and disciplined approach to risk management. We achieved stable revenue and credit metrics notwithstanding the economic challenges in Puerto Rico and the low interest rate environment.”
Significant Events
As previously announced, on October 3, 2016 the review board issued a final arbitration award denying Banco Popular de Puerto Rico’s request for reimbursement of approximately $55 million in shared loss claims that were the subject of one of the disputes between Banco Popular de Puerto Rico (“BPPR”) and the Federal Deposit Insurance Corporation, as receiver, under the commercial loss share agreement entered into in connection with the Westernbank FDIC-assisted transaction. As a result, for the quarter ended September 30, 2016, Popular recognized a pre-tax charge of approximately $55 million and a corresponding reduction to its FDIC indemnification asset.
Earnings Highlights | ||||||||||||
(Unaudited) | Quarters ended | Nine months ended | ||||||||||
(Dollars in thousands, except per share information) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | 30-Sep-16 | 30-Sep-15 | |||||||
Net interest income | $353,687 | $360,551 | $350,735 | $1,066,650 | $1,056,483 | |||||||
Provision for loan losses | 42,594 | 39,668 | 69,568 | 130,202 | 159,747 | |||||||
Provision (reversal) for loan losses - covered loans [1] | 750 | 804 | (2,890) | (1,551) | 23,200 | |||||||
Net interest income after provision for loan losses | 310,343 | 320,079 | 284,057 | 937,999 | 873,536 | |||||||
FDIC loss-share (expense) income | (61,723) | (12,576) | 1,207 | (77,445) | 24,421 | |||||||
Other non-interest income | 137,701 | 123,079 | 129,902 | 375,556 | 362,682 | |||||||
Goodwill impairment charge | 3,801 | - | - | 3,801 | - | |||||||
Other operating expenses | 319,871 | 309,149 | 306,897 | 930,963 | 982,412 | |||||||
Income from continuing operations before income tax | 62,649 | 121,433 | 108,269 | 301,346 | 278,227 | |||||||
Income tax expense (benefit) | 15,839 | 32,446 | 22,620 | 80,550 | (478,344) | |||||||
Income from continuing operations | 46,810 | 88,987 | 85,649 | 220,796 | 756,571 | |||||||
(Loss) income from discontinued operations, net of tax | - | - | (9) | - | 1,347 | |||||||
Net income | $46,810 | $88,987 | $85,640 | $220,796 | $757,918 | |||||||
Net income applicable to common stock | $45,880 | $88,056 | $84,709 | $218,004 | $755,126 | |||||||
Net income per common share from continuing operations - Basic | $0.44 | $0.85 | $0.82 | $2.11 | $7.33 | |||||||
Net income per common share from continuing operations - Diluted | $0.44 | $0.85 | $0.82 | $2.11 | $7.31 | |||||||
Net income per common share from discontinued operations - Basic | $- | $- | $- | $- | $0.01 | |||||||
Net income per common share from discontinued operations - Diluted | $- | $- | $- | $- | $0.01 | |||||||
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement. |
Adjusted results – Non-GAAP
The Corporation prepared its Consolidated Financial Statement using accounting principles generally accepted in the U.S. (“U.S. GAAP” or the “reported basis”). In addition to analyzing the Corporation’s results on a reported basis, management monitors the “Adjusted net income” of the Corporation and excludes the impact of certain transactions on the results of its operations. Management believes that the “Adjusted net income” provides meaningful information about the underlying performance of the Corporation’s ongoing operations. The “Adjusted net income” is a non-GAAP financial measure.
The following tables reflect the results of operations for the third and second quarters of 2016, with adjustments to exclude the impact of certain events during the third and second quarters of 2016, to arrive at the adjusted net income.
Adjusted Net Income - Reconciliation to GAAP Financial Measures
(Unaudited) | ||||||
(In thousands) | 30-Sep-16 | |||||
Income tax | Impact on | |||||
Pre-tax | effect | net income | ||||
U.S. GAAP Net Income | $46,810 | |||||
Non-GAAP Adjustments: | ||||||
FDIC arbitration award[1] | 54,924 | (10,985) | 43,939 | |||
Goodwill impairment charge[2] | 3,801 | - | 3,801 | |||
Adjusted net income (Non-GAAP) | $94,550 | |||||
[1]Represents the arbitration decision denying BPPR's request for reimbursement in certain shared loss claims. Gains and losses related to assets acquired from Westernbank as part of the FDIC assisted transaction are subject to the capital gains tax rate of 20%. |
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[2]Represents goodwill impairment charge in the Corporation’s securities subsidiary. The securities subsidiary is a limited liability company with a partnership election. Accordingly, its earnings flow through Popular, Inc., holding company, for income tax purposes. Since Popular, Inc. has a full valuation allowance on its deferred tax assets, this results in an effective tax rate of 0%. |
(Unaudited) | ||||||
(In thousands) | 30-Jun-16 | |||||
Income tax | Impact on | |||||
Pre-tax | effect | net income | ||||
U.S. GAAP Net Income | $88,987 | |||||
Non-GAAP Adjustments: | ||||||
Impact of EVERTEC Restatement [1] | 2,173 | - | 2,173 | |||
Bulk Sale of WB loans and OREO [2] | (891) | 347 | (544) | |||
Adjusted Net Income (Non-GAAP) | $90,616 | |||||
[1]Represents Popular Inc.'s proportionate share of the cumulative impact of EVERTEC restatement and other corrective adjustments to its financial statements, as disclosed in EVERTEC's 2015 Annual Report on Form 10K. Due to the preferential tax rate on the income from EVERTEC, the tax effect of this transaction was estimated at approximately $38 thousand. |
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[2]Represents the impact of the bulk sale of Westernbank loans and OREO. Gains and losses related to assets acquired from Westernbank as part of the FDIC assited transaction are subject to the capital gains tax rate of 20%. |
Net interest income
Net interest income for the quarter ended September 30, 2016 was $353.7 million, compared to $360.6 million for the previous quarter. Net interest margin was 4.12% for the quarter compared to 4.33% for the previous quarter. The impact of having one more day in the quarter contributed $2.6 million to the net interest income.
The decrease in net interest income was mainly related to:
- Lower income from the WB loan portfolio by $8.9 million, or 129 basis points, which for the second quarter included the benefit of $2.1 million, or 41 basis points, from the bulk sale. The results were also impacted by lower yields as a result of the quarterly recast process, the successful resolution of certain loans in the second quarter and lower volume of loans, due to the normal portfolio run-off.
- Higher cost of deposits by $1.7 million or 2 basis points mainly in the U.S. associated to increase in money market and time deposits to fund loan growth.
These negative variances were partially offset by:
- Higher income from investment securities by $1.2 million mainly from higher levels of mortgage backed securities both at BPPR and the U.S.
- Higher income from commercial loans by $2.9 million due to higher levels from the U.S. portfolio.
BPPR’s net interest income amounted to $303.7 million for the quarter ended September 30, 2016, compared to $310.4 million for the previous quarter. The decrease of $6.7 million in net interest income was mainly due to lower income from WB loans by $8.9 million as mentioned above, partially offset by higher income from mortgage backed securities and the $2.1 million impact of having one more day in the quarter. Net interest margin declined to 4.49% from 4.71% in the previous quarter mainly driven by lower yields from WB loans, as explained above, and higher volume of overnight investments driven by the increase in Government deposits. Earning assets in P.R. yielded 4.86%, down from 5.08% in the previous quarter, while the cost of interest bearing liabilities remained flat from the previous quarter at 0.53%.
BPNA’s net interest income was $65.3 million, compared to $65.5 million for the previous quarter. The decrease of $0.2 million in the net interest income is mainly driven by higher expense from deposits to fund loan growth and the purchase and reinvestment of investment securities in a lower rate environment. These negative variances were partially offset by higher income from commercial loans due to the growth of this portfolio. Net interest margin decreased 19 basis points to 3.61% compared to 3.80% for the previous quarter driven by the above mentioned variances. U.S. earning assets yielded 4.32%, compared to 4.47% in the previous quarter, while the cost of interest bearing liabilities was 0.94%, compared to 0.87% in the previous quarter.
Non-interest income
Non-interest income was $76.0 million for the third quarter of 2016, a decrease of $34.5 million when compared to the second quarter of 2016. The decrease in non-interest income was driven primarily by higher FDIC loss-share expense by $49.1 million as a result of a $54.9 million charge related to the FDIC arbitration award, partially offset by lower recoveries on assets to be shared with the FDIC in the recovery period.
This decrease was partially offset by:
- Higher other service fees by $2.2 million due to higher life insurance commission revenues;
- Higher net gain on sale of loans by $8.5 million as a result of the sale of a non-accrual public sector credit during the third quarter; and
- Higher other operating income by $5.2 million mainly due to higher aggregated net earnings from investments under the equity method, principally due to the unfavorable adjustment of $2.2 million recorded during the second quarter as a result of the EVERTEC restatement.
Refer to Table B for further details.
Financial Impact of the 2010 FDIC-Assisted Transaction | |||||||||||
(Unaudited) | Quarters ended | Nine months ended | |||||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | 30-Sep-16 | 30-Sep-15 | ||||||
Income Statement |
|||||||||||
Interest income on WB loans | $40,867 | $49,794 | $47,982 | $135,566 | $160,909 | ||||||
Total FDIC loss-share (expense) income | (61,723) | (12,576) | 1,207 | (77,445) | 24,421 | ||||||
Provision (reversal) for loan losses- WB loans | 6,612 | (7,282) | 20,206 | (1,026) | 46,296 | ||||||
Total revenues less provision (reversal) for loan losses | $(27,468) | $44,500 | $28,983 | $59,147 | $139,034 | ||||||
Balance Sheet |
|||||||||||
WB loans | $1,896,099 | $1,932,062 | $2,223,731 | ||||||||
FDIC loss-share asset | 152,467 | 214,029 | 311,946 | ||||||||
FDIC true-up payment obligation | 134,487 | 127,876 | 122,527 |
See additional details on accounting for the 2010 FDIC-Assisted transaction in Table O.
Operating expenses
Operating expenses amounted to $323.7 million for the third quarter of 2016, an increase of $14.5 million when compared to the second quarter of 2016. The increase in operating expenses was driven primarily by:
- Higher personnel cost by $4.5 million mainly due to higher salaries from increased full time equivalent employees, an additional working day in the quarter and higher commission compensation in the insurance and wealth management subsidiaries;
- Higher other taxes by $1.2 million mainly due to higher municipal license and sales tax;
- Higher professional fees by $0.6 million mainly due to higher programming, processing and other technology services by $1.9 million and higher attorney fees by $1.4 million related to the FDIC arbitration proceedings, partially offset by lower credit related expenses and reduced other professional fees from the bulk sale of Westernbank loans and OREO during the second quarter;
- Higher other operating expense by $9.2 million mainly due to higher operational losses at BPPR and BPNA including increased reserves for legal matters, curtailment losses on insured mortgage claims in our mortgage servicing business and higher incidence of credit card fraud losses; and
- A goodwill impairment charge of $3.8 million at the securities subsidiary, recorded as part of the Corporation’s annual goodwill impairment analysis.
These increases were partially offset by:
- Lower OREO expenses by $1.7 million mainly due to the loss on the bulk sale of Westernbank OREO during the second quarter, partially offset by higher mortgage OREO write-downs at BPPR; and
- Lower credit and debit card processing, volume, interchange and other expenses by $3.0 million due mainly to earned volume credits.
Non-personnel credit-related costs, which include collections, appraisals, credit related fees, and OREO expenses, amounted to $15.3 million for the third quarter of 2016, compared to $18.0 million for the second quarter of 2016. The decrease was principally due to lower losses on sales of OREO at BPPR.
Full-time equivalent employees were 7,866 as of September 30, 2016, compared to 7,826 as of June 30, 2016.
For a breakdown of operating expenses by category refer to table B.
Income taxes
For the quarter ended September 30, 2016, the Corporation recorded an income tax expense of $15.8 million, compared to $32.4 million for the previous quarter. The decline in the income tax expense is mainly driven by lower taxable income at BPPR. Additionally, in the third quarter BPPR recognized a $4.4 million benefit related to reversal of uncertain tax positions reserves associated with expired statutory provisions.
The effective income tax rate for the third quarter of 2016 was 25%, compared to 27% for the previous quarter. The effective tax rate is impacted by the composition and source of the taxable income.
Credit Quality
The Corporation continued to experience stable credit trends despite challenging economic conditions in Puerto Rico. The shift in the composition and the risk profile of the credit portfolios over the last few years has better positioned the Corporation to operate in the Island’s environment. The Corporation continues to closely monitor changes in credit quality trends and is focused on taking measures to minimize risks. The U.S. operation continued to reflect positive results with strong growth and favorable credit quality metrics.
- Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $5.6 million quarter-over-quarter, mainly driven by lower commercial inflows of $13.5 million, offset by higher mortgage inflows of $7.7 million in the BPPR segment.
- Non-performing loans held-in-portfolio increased slightly by $1.6 million from the second quarter of 2016, mainly driven by higher mortgage NPLs of $7.7 million, offset by lower commercial NPLs of $5.5 million in the BPPR segment. At September 30, 2016, NPLs to total loans held-in-portfolio remained flat at 2.6% quarter-over-quarter.
- Net charge-offs remained flat at $35.1 million quarter over quarter. NCOs in the BPPR segment decreased by $3.3 million mainly driven by a decrease of $7.1 million in the consumer NCOs due to a $7.1 million recovery related to the sale of previously charged-off credit cards and personal loans. BPPR construction NCOs increased by $4.1 million, mostly related to higher recoveries in the previous quarter. NCOs in the BPNA segment increased by $3.0 million, mostly due to higher mortgage NCOs. The ratio of annualized net charge-offs to average non-covered loans held-in-portfolio was 0.63%, flat from the second quarter of 2016. The $7.1 million recovery from consumer loans reduced the NCO ratio by 13 bps. Refer to Table J for further information on net charge-offs and related ratios.
- The allowance for loan losses increased by $7.5 million from the second quarter 2016 to $525.6 million, mostly driven by the $9.4 million reserve increase related to the annual recalibration of the environmental factors adjustment. The general and specific reserves related to non-covered loans totaled $396.5 million and $129.1 million, respectively, at quarter-end, compared with $395.3 million and $122.8 million, respectively, as of June 30, 2016. The ratio of the allowance for loan losses to loans held-in-portfolio was 2.33% in the third quarter of 2016, compared to 2.30% from the previous quarter.
- The ratio of the allowance for loan losses to NPLs held-in-portfolio increased to 90.7%, compared to 89.7% in the previous quarter.
- The provision for loan losses for the third quarter of 2016 amounted to $42.6 million, increasing by $2.9 million from the previous quarter. The provision to net charge-offs ratio was 121.2% in the third quarter 2016, compared to 127.4% in the previous quarter, excluding the recoveries related to the bulk sale of Westernbank loans.
Non-Performing Assets | ||||||
(Unaudited) | ||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | |||
Total non-performing loans held-in-portfolio, excluding covered loans | $579,325 | $577,739 | $634,902 | |||
Non-performing loans held-for-sale | - | 39,544 | 47,681 | |||
Other real estate owned (“OREO”), excluding covered OREO | 184,828 | 177,025 | 155,826 | |||
Total non-performing assets, excluding covered assets | 764,153 | 794,308 | 838,409 | |||
Covered loans and OREO | 41,211 | 41,466 | 39,888 | |||
Total non-performing assets | $805,364 | $835,774 | $878,297 | |||
Net charge-offs for the quarter (excluding covered loans) | $35,140 | $35,401 | $46,302 | |||
Ratios (excluding covered loans): | ||||||
Non-covered loans held-in-portfolio | $22,595,972 | $22,540,661 | $22,498,066 | |||
Non-performing loans held-in-portfolio to loans held-in-portfolio | 2.56% | 2.56% | 2.82% | |||
Allowance for loan losses to loans held-in-portfolio | 2.33 | 2.30 | 2.38 | |||
Allowance for loan losses to non-performing loans, excluding loans held-for-sale | 90.73 | 89.68 | 84.42 | |||
Refer to Table H for additional information. |
Provision for Loan Losses | |||||||||
(Unaudited) | Quarters ended | Nine months ended | |||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | 30-Sep-16 | 30-Sep-15 | ||||
Provision (reversal) for loan losses: | |||||||||
BPPR | $36,281 | $38,351 | $68,755 | $118,503 | $161,197 | ||||
BPNA | 6,313 | 1,317 | 813 | 11,699 | (1,450) | ||||
Total provision for loan losses- non-covered loans | $42,594 | $39,668 | $69,568 | $130,202 | $159,747 | ||||
Provision (reversal) for loan losses - covered loans | 750 | 804 | (2,890) | (1,551) | 23,200 | ||||
Total provision for loan losses | $43,344 | $40,472 | $66,678 | $128,651 | $182,947 |
Credit Quality by Segment | ||||||
(Unaudited) | ||||||
(In thousands) | Quarters ended | |||||
BPPR |
30-Sep-16 |
30-Jun-16 | 30-Sep-15 | |||
Provision for loan losses | $36,281 | $38,351 | $68,755 | |||
Net charge-offs | 32,959 | 36,222 | 47,245 | |||
Total non-performing loans held-in-portfolio, excluding covered loans | 551,238 | 550,632 | 609,469 | |||
Allowance / non-covered loans held-in-portfolio | 2.80% | 2.77% | 2.83% | |||
Quarters ended | ||||||
BPNA | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | |||
Provision for loan losses | $6,313 | $1,317 | $813 | |||
Net charge-offs (recoveries) | 2,181 | (821) | (943) | |||
Total non-performing loans held-in-portfolio | 28,087 | 27,107 | 25,433 | |||
Allowance / non-covered loans held-in-portfolio | 0.78% | 0.72% | 0.68% |
Financial Condition Highlights | ||||||||
(Unaudited) | ||||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | |||||
Money market, trading and investment securities | $11,931,499 | $10,368,794 | $8,321,397 | |||||
Loans not covered under loss-sharing agreements with the FDIC | 22,595,972 | 22,540,661 | 22,498,066 | |||||
Loans covered under loss-sharing agreements with the FDIC | 588,211 | 607,170 | 665,428 | |||||
Total assets | 39,054,296 | 37,606,148 | 35,522,462 | |||||
Deposits | 30,327,045 | 28,737,856 | 26,713,206 | |||||
Borrowings | 2,364,984 | 2,428,752 | 2,753,144 | |||||
Liabilities from discontinued operations | 1,815 | 1,815 | 1,800 | |||||
Total liabilities | 33,673,901 | 32,246,317 | 30,472,826 | |||||
Stockholders’ equity | 5,380,395 | 5,359,831 | 5,049,636 |
Total assets increased by $1.4 billion from the second quarter of 2016 driven by:
- An increase of $1.2 billion in money market investments mainly at BPPR due to an increase in cash balances from deposits;
- An increase of $0.4 billion in investment securities available-for-sale mainly at BPNA due to purchases of mortgage-backed agency pools, partially offset by sales and principal pay-downs; and
- A net increase of $58.5 million in non-covered loans held-in-portfolio mainly driven by growth in the commercial portfolio at BPNA by $138.4 million, partially offset by a decrease in mortgage loans portfolio at BPPR of $73.7 million impacted by lower originations of residential mortgages.
These positive variances were partially offset by a decrease of $61.6 million in the FDIC loss-share asset due mainly to the $54.9 million charge related to review board’s denial of BPPR’s claim in connection with arbitration proceedings with the FDIC.
Total liabilities increased by $1.4 billion from the first quarter of 2016, principally driven by:
- An increase of $1.6 billion in deposits mainly due to increases in deposits from the Puerto Rico government, NOW accounts, and non-interest bearing demand deposits at BPPR. Refer to Table G for additional information on deposits.
Stockholders’ equity increased by approximately $20.6 million from the second quarter of 2016, mainly as a result of net income for the quarter of $46.8 million, partially offset by an unfavorable variance of $14.4 million in unrealized gains on securities available-for-sale, declared dividends of $15.6 million on common stock and $0.9 million in dividends on preferred stock.
Common equity tier-1 ratio (“CET1”), book value per share and tangible book value per share were 16.64%, $51.85 and $44.86, respectively at September 30, 2016 compared to 16.29%, $51.68 and $44.62 at June 30, 2016. Refer to Table A for capital ratios.
Forward-Looking Statements
The information contained in this news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2015, the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016, and our other filings with the Securities and Exchange Commission for a discussion of factors that may cause the Corporation's actual results to differ materially from any future results expressed or implied by such forward-looking statements. Those filings are available on the Corporation’s website (www.popular.com) and on the Securities and Exchange Commission website (www.SEC.gov). The Corporation does not undertake to update or revise any forward-looking statement to reflect events or circumstances that may arise after the date of such statements.
Founded in 1893, Popular, Inc. is the leading banking institution by both assets and deposits in Puerto Rico and ranks among the top 50 U.S. banks by assets. Popular provides retail, mortgage and commercial banking services through its principal banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. In the United States, Popular has established a community-banking franchise providing a broad range of financial services and products with branches in New York, New Jersey and Florida under the name of Popular Community Bank.
An electronic version of this press release can be found at the Corporation’s website: www.popular.com.
Popular will hold a conference call to discuss the financial results today Tuesday, October 25, 2016 at 11:00 a.m. Eastern Time. The call will be broadcast live over the Internet and can be accessed through the investor relations section of the Corporation’s website: www.popular.com.
Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through a dial-in telephone number 1-866-235-1201 or 1-412-902-4127.
A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Thursday, November 24, 2016. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10093046.
Popular, Inc. |
Financial Supplement to Third Quarter 2016 Earnings Release |
Table A - Selected Ratios and Other Information |
Table B - Consolidated Statement of Operations |
Table C - Consolidated Statement of Financial Condition |
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER |
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE |
Table F - Mortgage Banking Activities and Other Service Fees |
Table G - Loans and Deposits |
Table H - Non-Performing Assets |
Table I - Activity in Non-Performing Loans |
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios |
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED |
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS |
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS |
Table N - Reconciliation to GAAP Financial Measures |
Table O - Financial Information - Westernbank Loans |
POPULAR, INC. | ||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | ||||||||||
Table A - Selected Ratios and Other Information | ||||||||||
(Unaudited) | ||||||||||
Quarters ended | Nine months ended | |||||||||
30-Sep-16 | 30-Jun-16 | 30-Sep-15 | 30-Sep-16 | 30-Sep-15 | ||||||
Basic EPS from continuing operations | $0.44 | $0.85 | $0.82 | $2.11 | $7.33 | |||||
Basic EPS from discontinued operations | $- | $- | $- | $- | $0.01 | |||||
Total Basic EPS | $0.44 | $0.85 | $0.82 | $2.11 | $7.34 | |||||
Diluted EPS from continuing operations | $0.44 | $0.85 | $0.82 | $2.11 | $7.31 | |||||
Diluted EPS from discontinued operations | $- | $- | $- | $- | $0.01 | |||||
Total Diluted EPS | $0.44 | $0.85 | $0.82 | $2.11 | $7.32 | |||||
Average common shares outstanding | 103,296,443 | 103,245,717 | 102,969,214 | 103,243,851 | 102,923,018 | |||||
Average common shares outstanding - assuming dilution | 103,465,385 | 103,343,486 | 103,150,482 | 103,383,949 | 103,137,762 | |||||
Common shares outstanding at end of period | 103,762,596 | 103,703,041 | 103,556,285 | 103,762,596 | 103,556,285 | |||||
Market value per common share | $38.22 | $29.30 | $30.23 | $38.22 | $30.23 | |||||
Market capitalization - (In millions) | $3,966 | $3,038 | $3,131 | $3,966 | $3,131 | |||||
Return on average assets | 0.49% | 0.96% | 0.95% | 0.79% | 2.89% | |||||
. | . | |||||||||
Return on average common equity | 3.46% | 6.80% | 6.79% | 5.59% | 22.29% | |||||
Net interest margin | 4.12% | 4.33% | 4.39% | 4.29% | 4.50% | |||||
Common equity per share | $51.37 | $51.20 | $48.28 | $51.37 | $48.28 | |||||
Book value per share | $51.85 | $51.68 | $48.76 | $51.85 | $48.76 | |||||
Tangible common book value per common share (non-GAAP) | $44.86 | $44.62 | $42.71 | $44.86 | $42.71 | |||||
Tangible common equity to tangible assets (non-GAAP) | 12.13% | 12.53% | 12.66% | 12.13% | 12.66% | |||||
Tier 1 capital |
16.64% |
16.29% | 16.21% |
16.64% |
16.21% | |||||
Total capital |
19.65% |
19.29% | 18.78% |
19.65% |
18.78% | |||||
Tier 1 leverage |
11.21% |
11.29% | 11.75% |
11.21% |
11.75% | |||||
Common Equity Tier 1 capital |
16.64% |
16.29% | 16.21% |
16.64% |
16.21% |
POPULAR, INC. | |||||||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | |||||||||||||||
Table B - Consolidated Statement of Operations | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarters ended | Variance | Quarter ended | Variance | Nine months ended | |||||||||||
Q3 2016 |
Q3 2016 |
||||||||||||||
(In thousands, except per share information) | 30-Sep-16 | 30-Jun-16 |
vs. Q2 2016 |
30-Sep-15 |
vs. Q3 2015 |
30-Sep-16 | 30-Sep-15 | ||||||||
Interest income: | |||||||||||||||
Loans | $363,550 | $369,721 | $(6,171) | $364,458 | $(908) | $1,096,468 | $1,094,222 | ||||||||
Money market investments | 4,568 | 3,889 | 679 | 2,003 | 2,565 | 11,320 | 5,294 | ||||||||
Investment securities | 37,732 | 36,725 | 1,007 | 31,671 | 6,061 | 110,728 | 93,269 | ||||||||
Trading account securities | 1,449 | 1,875 | (426) | 3,150 | (1,701) | 5,013 | 8,872 | ||||||||
Total interest income | 407,299 | 412,210 | (4,911) | 401,282 | 6,017 | 1,223,529 | 1,201,657 | ||||||||
Interest expense: | |||||||||||||||
Deposits | 32,362 | 30,599 | 1,763 | 28,357 | 4,005 | 92,835 | 80,479 | ||||||||
Short-term borrowings | 2,132 | 2,058 | 74 | 2,222 | (90) | 6,051 | 5,819 | ||||||||
Long-term debt | 19,118 | 19,002 | 116 | 19,968 | (850) | 57,993 | 58,876 | ||||||||
Total interest expense | 53,612 | 51,659 | 1,953 | 50,547 | 3,065 | 156,879 | 145,174 | ||||||||
Net interest income | 353,687 | 360,551 | (6,864) | 350,735 | 2,952 | 1,066,650 | 1,056,483 | ||||||||
Provision for loan losses - non-covered loans | 42,594 | 39,668 | 2,926 | 69,568 | (26,974) | 130,202 | 159,747 | ||||||||
Provision (reversal) for loan losses - covered loans | 750 | 804 | (54) | (2,890) | 3,640 | (1,551) | 23,200 | ||||||||
Net interest income after provision for loan losses | 310,343 | 320,079 | (9,736) | 284,057 | 26,286 | 937,999 | 873,536 | ||||||||
Service charges on deposit accounts | 40,776 | 40,296 | 480 | 40,960 | (184) | 120,934 | 120,115 | ||||||||
Other service fees | 59,169 | 56,945 | 2,224 | 56,115 | 3,054 | 169,496 | 169,162 | ||||||||
Mortgage banking activities | 15,272 | 16,227 | (955) | 24,195 | (8,923) | 42,050 | 58,372 | ||||||||
Net gain and valuation adjustments on investment securities | 349 | 1,583 | (1,234) | 136 | 213 | 1,932 | 141 | ||||||||
Other-than-temporary impairment losses on investment securities | - | (209) | 209 | - | - | (209) | (14,445) | ||||||||
Trading account (loss) profit | (113) | 1,117 | (1,230) | (398) | 285 | 842 | (3,092) | ||||||||
Net gain on sale of loans, including valuation adjustments on loans held-for-sale | 8,549 | - | 8,549 | - | 8,549 | 8,245 | 602 | ||||||||
Adjustments (expense) to indemnity reserves on loans sold | (4,390) | (5,746) | 1,356 | (5,874) | 1,484 | (14,234) | (9,981) | ||||||||
FDIC loss-share (expense) income | (61,723) | (12,576) | (49,147) | 1,207 | (62,930) | (77,445) | 24,421 | ||||||||
Other operating income | 18,089 | 12,866 | 5,223 | 14,768 | 3,321 | 46,500 | 41,808 | ||||||||
Total non-interest income | 75,978 | 110,503 | (34,525) | 131,109 | (55,131) | 298,111 | 387,103 | ||||||||
Operating expenses: | |||||||||||||||
Personnel costs | |||||||||||||||
Salaries | 77,770 | 75,792 | 1,978 | 78,193 | (423) | 230,860 | 227,040 | ||||||||
Commissions, incentives and other bonuses | 18,528 | 16,982 | 1,546 | 18,618 | (90) | 56,279 | 61,290 | ||||||||
Pension, postretirement and medical insurance | 13,413 | 12,279 | 1,134 | 12,578 | 835 | 38,803 | 33,666 | ||||||||
Other personnel costs, including payroll taxes | 11,513 | 11,655 | (142) | 11,474 | 39 | 39,081 | 36,302 | ||||||||
Total personnel costs | 121,224 | 116,708 | 4,516 | 120,863 | 361 | 365,023 | 358,298 | ||||||||
Net occupancy expenses | 21,626 | 21,714 | (88) | 21,277 | 349 | 63,770 | 66,272 | ||||||||
Equipment expenses | 15,922 | 15,261 | 661 | 14,739 | 1,183 | 45,731 | 44,075 | ||||||||
Other taxes | 11,324 | 10,170 | 1,154 | 9,951 | 1,373 | 31,689 | 29,638 | ||||||||
Professional fees | |||||||||||||||
Collections, appraisals and other credit related fees | 4,005 | 4,974 | (969) | 5,049 | (1,044) | 13,479 | 18,660 | ||||||||
Programming, processing and other technology services | 52,174 | 50,232 | 1,942 | 49,134 | 3,040 | 152,270 | 143,700 | ||||||||
Legal fees, excluding collections | 11,428 | 10,009 | 1,419 | 6,624 | 4,804 | 27,691 | 19,401 | ||||||||
Other professional fees | 13,659 | 15,410 | (1,751) | 16,347 | (2,688) | 43,910 | 49,370 | ||||||||
Total professional fees | 81,266 | 80,625 | 641 | 77,154 | 4,112 | 237,350 | 231,131 | ||||||||
Communications | 5,785 | 6,012 | (227) | 6,058 | (273) | 18,117 | 18,387 | ||||||||
Business promotion | 12,726 | 13,705 | (979) | 12,325 | 401 | 37,541 | 36,914 | ||||||||
FDIC deposit insurance | 5,854 | 5,362 | 492 | 7,300 | (1,446) | 18,586 | 22,240 | ||||||||
Other real estate owned (OREO) expenses | 11,295 | 12,980 | (1,685) | 7,686 | 3,609 | 33,416 | 75,571 | ||||||||
Credit and debit card processing, volume, interchange and other expenses | 3,640 | 6,617 | (2,977) | 6,449 | (2,809) | 15,979 | 17,032 | ||||||||
Other operating expenses | |||||||||||||||
Operational losses | 19,609 | 7,146 | 12,463 | 9,648 | 9,961 | 29,416 | 15,572 | ||||||||
All other | 6,503 | 9,752 | (3,249) | 9,454 | (2,951) | 25,037 | 41,377 | ||||||||
Total other operating expenses | 26,112 | 16,898 | 9,214 | 19,102 | 7,010 | 54,453 | 56,949 | ||||||||
Amortization of intangibles | 3,097 | 3,097 | - | 3,512 | (415) | 9,308 | 8,497 | ||||||||
Goodwill impairment charge | 3,801 | - | 3,801 | - | 3,801 | 3,801 | - | ||||||||
Restructuring costs | - | - | - | 481 | (481) | - | 17,408 | ||||||||
Total operating expenses | 323,672 | 309,149 | 14,523 | 306,897 | 16,775 | 934,764 | 982,412 | ||||||||
Income from continuing operations before income tax | 62,649 | 121,433 | (58,784) | 108,269 | (45,620) | 301,346 | 278,227 | ||||||||
Income tax expense (benefit) | 15,839 | 32,446 | (16,607) | 22,620 | (6,781) | 80,550 | (478,344) | ||||||||
Income from continuing operations | 46,810 | 88,987 | (42,177) | 85,649 | (38,839) | 220,796 | 756,571 | ||||||||
(Loss) income from discontinued operations, net of tax | - | - | - | (9) | 9 | - | 1,347 | ||||||||
Net income | $46,810 | $88,987 | $(42,177) | $85,640 | $(38,830) | $220,796 | $757,918 | ||||||||
Net income applicable to common stock | $45,880 | $88,056 | $(42,176) | $84,709 | $(38,829) | $218,004 | $755,126 | ||||||||
Net income per common share - basic: | |||||||||||||||
Net income from continuing operations | $0.44 | $0.85 | $(0.41) | $0.82 | $(0.38) | $2.11 | $7.33 | ||||||||
Net income from discontinued operations | - | - | - | - | - | - | 0.01 | ||||||||
Net income per common share - basic | $0.44 | $0.85 | $(0.41) | $0.82 | $(0.38) | $2.11 | $7.34 | ||||||||
Net income per common share - diluted: | |||||||||||||||
Net income from continuing operations | $0.44 | $0.85 | $(0.41) | $0.82 | $(0.38) | $2.11 | $7.31 | ||||||||
Net income from discontinued operations | - | - | - | - | - | - | 0.01 | ||||||||
Net income per common share - diluted | $0.44 | $0.85 | $(0.41) | $0.82 | $(0.38) | $2.11 | $7.32 | ||||||||
Dividends Declared per Common Share | $0.15 | $0.15 | $- | $0.15 | $- | $0.45 | $0.15 |
Popular, Inc. | ||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | ||||||||||
Table C - Consolidated Statement of Financial Condition | ||||||||||
(Unaudited) | ||||||||||
Variance | ||||||||||
Q3 2016 vs. | ||||||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | Q2 2016 | ||||||
Assets: | ||||||||||
Cash and due from banks | $350,545 | $365,308 | $320,555 | $(14,763) | ||||||
Money market investments | 3,963,495 | 2,785,500 | 2,408,571 | 1,177,995 | ||||||
Trading account securities, at fair value | 72,584 | 72,530 | 137,943 | 54 | ||||||
Investment securities available-for-sale, at fair value | 7,628,656 | 7,242,676 | 5,500,931 | 385,980 | ||||||
Investment securities held-to-maturity, at amortized cost | 97,973 | 99,525 | 100,295 | (1,552) | ||||||
Other investment securities, at lower of cost or realizable value | 168,791 | 168,563 | 173,657 | 228 | ||||||
Loans held-for-sale, at lower of cost or fair value | 72,076 | 122,338 | 171,019 | (50,262) | ||||||
Loans held-in-portfolio: | ||||||||||
Loans not covered under loss-sharing agreements with the FDIC | 22,714,358 | 22,655,877 | 22,601,271 | 58,481 | ||||||
Loans covered under loss-sharing agreements with the FDIC | 588,211 | 607,170 | 665,428 | (18,959) | ||||||
Less: Unearned income | 118,386 | 115,216 | 103,205 | 3,170 | ||||||
Allowance for loan losses | 555,855 | 548,720 | 570,514 | 7,135 | ||||||
Total loans held-in-portfolio, net | 22,628,328 | 22,599,111 | 22,592,980 | 29,217 | ||||||
FDIC loss-share asset | 152,467 | 214,029 | 311,946 | (61,562) | ||||||
Premises and equipment, net | 537,975 | 535,865 | 495,103 | 2,110 | ||||||
Other real estate not covered under loss-sharing agreements with the FDIC | 184,828 | 177,025 | 155,826 | 7,803 | ||||||
Other real estate covered under loss-sharing agreements with the FDIC | 37,414 | 37,984 | 35,701 | (570) | ||||||
Accrued income receivable | 119,691 | 120,979 | 118,044 | (1,288) | ||||||
Mortgage servicing assets, at fair value | 200,354 | 203,577 | 210,851 | (3,223) | ||||||
Other assets | 2,163,939 | 2,179,060 | 2,212,722 | (15,121) | ||||||
Goodwill | 627,294 | 631,095 | 504,925 | (3,801) | ||||||
Other intangible assets | 47,886 | 50,983 | 71,393 | (3,097) | ||||||
Total assets | $39,054,296 | $37,606,148 | $35,522,462 | $1,448,148 | ||||||
Liabilities and Stockholders’ Equity: | ||||||||||
Liabilities: | ||||||||||
Deposits: | ||||||||||
Non-interest bearing | $6,950,287 | $6,531,108 | $6,070,719 | $419,179 | ||||||
Interest bearing | 23,376,758 | 22,206,748 | 20,642,487 | 1,170,010 | ||||||
Total deposits | 30,327,045 | 28,737,856 | 26,713,206 | 1,589,189 | ||||||
Federal funds purchased and assets sold under agreements to repurchase | 765,251 | 821,604 | 1,085,765 | (56,353) | ||||||
Other short-term borrowings | 1,200 | 31,200 | 1,200 | (30,000) | ||||||
Notes payable | 1,598,533 | 1,575,948 | 1,666,179 | 22,585 | ||||||
Other liabilities | 980,057 | 1,077,894 | 1,004,676 | (97,837) | ||||||
Liabilities from discontinued operations | 1,815 | 1,815 | 1,800 | - | ||||||
Total liabilities | 33,673,901 | 32,246,317 | 30,472,826 | 1,427,584 | ||||||
Stockholders’ equity: | ||||||||||
Preferred stock | 50,160 | 50,160 | 50,160 | - | ||||||
Common stock | 1,040 | 1,039 | 1,037 | 1 | ||||||
Surplus | 4,234,842 | 4,232,835 | 4,200,805 | 2,007 | ||||||
Retained earnings | 1,259,295 | 1,228,979 | 993,309 | 30,316 | ||||||
Treasury stock | (7,647) | (7,570) | (5,869) | (77) | ||||||
Accumulated other comprehensive loss | (157,295) | (145,612) | (189,806) | (11,683) | ||||||
Total stockholders’ equity | 5,380,395 | 5,359,831 | 5,049,636 | 20,564 | ||||||
Total liabilities and stockholders’ equity | $39,054,296 | $37,606,148 | $35,522,462 | $1,448,148 |
Popular, Inc. | |||||||||||||||||||||||||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | |||||||||||||||||||||||||||||||||
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER | |||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
Quarter ended | Quarter ended | Quarter ended | Variance | Variance | |||||||||||||||||||||||||||||
30-Sep-16 | 30-Jun-16 | 30-Sep-15 | Q3 2016 vs. Q2 2016 | Q3 2016 vs. Q3 2015 | |||||||||||||||||||||||||||||
($ amounts in | |||||||||||||||||||||||||||||||||
millions; yields not |
|
|
|
|
|
||||||||||||||||||||||||||||
on a taxable | Average | Income / |
Yield / |
Average | Income / |
Yield / |
Average | Income / |
Yield / |
Average | Income / |
Yield / |
Average | Income / |
Yield / |
||||||||||||||||||
equivalent basis) | balance | Expense | Rate | balance | Expense | Rate | balance | Expense | Rate | balance | Expense | Rate | balance | Expense | Rate | ||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||||||||||||||
Money market, trading and investment securities | $11,159 | $43.7 | 1.57 | % | $10,286 | $42.5 | 1.65 | % | $8,667 | $36.8 | 1.70 | % | $873 | $1.2 | (0.08) | % | $2,492 | $6.9 | (0.13) | % | |||||||||||||
Loans not covered under loss-sharing agreements with the FDIC: | |||||||||||||||||||||||||||||||||
Commercial | 9,269 | 113.8 | 4.88 | 9,150 | 110.9 | 4.88 | 8,769 | 109.6 | 4.96 | 119 | 2.9 | - | 500 | 4.2 | (0.08) | ||||||||||||||||||
Construction | 739 | 10.1 | 5.44 | 723 | 9.7 | 5.43 | 681 | 10.8 | 6.30 | 16 | 0.4 | 0.01 | 58 | (0.7) | (0.86) | ||||||||||||||||||
Mortgage | 6,637 | 88.3 | 5.32 | 6,743 | 88.9 | 5.27 | 7,072 | 88.8 | 5.02 | (106) | (0.6) | 0.05 | (435) | (0.5) | 0.30 | ||||||||||||||||||
Consumer | 3,847 | 99.3 | 10.27 | 3,865 | 99.4 | 10.34 | 3,811 | 97.2 | 10.12 | (18) | (0.1) | (0.07) | 36 | 2.1 | 0.15 | ||||||||||||||||||
Lease financing | 669 | 11.2 | 6.72 | 651 | 11.0 | 6.73 | 594 | 10.0 | 6.75 | 18 | 0.2 | (0.01) | 75 | 1.2 | (0.03) | ||||||||||||||||||
Total loans (excluding WB loans) | 21,161 | 322.7 | 6.08 | 21,132 | 319.9 | 6.08 | 20,927 | 316.4 | 6.02 | 29 | 2.8 | - | 234 | 6.3 | 0.06 | ||||||||||||||||||
WB loans | 1,881 | 40.9 | 8.65 | 2,013 | 49.8 | 9.94 | 2,221 | 48.0 | 8.59 | (132) | (8.9) | (1.29) | (340) | (7.1) | 0.06 | ||||||||||||||||||
Total loans | 23,042 | 363.6 | 6.29 | 23,145 | 369.7 | 6.41 | 23,148 | 364.4 | 6.26 | (103) | (6.1) | (0.12) | (106) | (0.8) | 0.03 | ||||||||||||||||||
Total interest earning assets | 34,201 | $407.3 | 4.75 | % | 33,431 | $412.2 | 4.95 | % | 31,815 | $401.2 | 5.02 | % | 770 | ($4.9) | (0.20) | % | 2,386 | $6.1 | (0.27) | % | |||||||||||||
Allowance for loan losses | (553) | (539) | (559) | (14) | 6 | ||||||||||||||||||||||||||||
Other non-interest earning assets | 4,443 | 4,479 | 4,584 | (36) | (141) | ||||||||||||||||||||||||||||
Total average assets | $38,091 | $37,371 | $35,840 | $720 | $2,251 | ||||||||||||||||||||||||||||
Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||||||
Interest bearing deposits: | |||||||||||||||||||||||||||||||||
NOW and money market | $7,326 | $7.0 | 0.38 | % | $7,023 | $6.6 | 0.38 | % | $5,742 | $4.9 | 0.34 | % | $303 | $0.4 | - | % | $1,584 | $2.1 | 0.04 | % | |||||||||||||
Savings | 7,550 | 4.6 | 0.24 | 7,487 | 4.4 | 0.24 | 7,055 | 4.1 | 0.23 | 63 | 0.2 | - | 495 | 0.5 | 0.01 | ||||||||||||||||||
Time deposits | 7,859 | 20.7 | 1.05 | 7,866 | 19.6 | 1.00 | 8,158 | 19.4 | 0.94 | (7) | 1.1 | 0.05 | (299) | 1.3 | 0.11 | ||||||||||||||||||
Total interest bearing deposits | 22,735 | 32.3 | 0.57 | 22,376 | 30.6 | 0.55 | 20,955 | 28.4 | 0.54 | 359 | 1.7 | 0.02 | 1,780 | 3.9 | 0.03 | ||||||||||||||||||
Borrowings | 2,398 | 21.3 | 3.55 | 2,307 | 21.0 | 3.67 | 2,861 | 22.1 | 3.09 | 91 | 0.3 | (0.12) |
(463) |
(0.8) | 0.46 | ||||||||||||||||||
Total interest bearing liabilities | 25,133 | 53.6 | 0.85 | 24,683 | 51.6 | 0.84 | 23,816 | 50.5 | 0.84 | 450 | 2.0 | 0.01 | 1,317 | 3.1 | 0.01 | ||||||||||||||||||
Net interest spread | 3.90 | % | 4.11 | % | 4.18 | % | (0.21) | % | (0.28) | % | |||||||||||||||||||||||
Non-interest bearing deposits | 6,676 | 6,481 | 6,144 | 195 | 532 | ||||||||||||||||||||||||||||
Other liabilities | 955 | 943 | 876 | 12 | 79 | ||||||||||||||||||||||||||||
Liabilities from discontinued operations | 2 | 2 | 2 | - | - | ||||||||||||||||||||||||||||
Stockholders' equity | 5,325 | 5,262 | 5,002 | 63 | 323 | ||||||||||||||||||||||||||||
Total average liabilities and stockholders' equity | $38,091 | $37,371 | $35,840 | $720 | $2,251 | ||||||||||||||||||||||||||||
Net interest income / margin non-taxable equivalent basis | $353.7 | 4.12 | % | $360.6 | 4.33 | % | $350.7 | 4.39 | % | ($6.9) | (0.21) | % | $3.0 | (0.27) | % |
Popular, Inc. | |||||||||||||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | |||||||||||||||||||||
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Nine months ended | Nine months ended | ||||||||||||||||||||
30-Sep-16 | 30-Sep-15 | Variance | |||||||||||||||||||
Average | Income / | Yield / | Average | Income / | Yield / | Average | Income / | Yield / | |||||||||||||
($ amounts in millions; yields not on a taxable equivalent basis) | balance | Expense | Rate | balance | Expense | Rate | balance | Expense | Rate | ||||||||||||
Assets: | |||||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||
Money market, trading and investment securities | $10,136 | $127.0 | 1.67 | % | $8,340 | $107.4 | 1.72 | % | $1,796 | $19.6 | (0.05) | % | |||||||||
Loans not covered under loss-sharing agreements with the FDIC: | |||||||||||||||||||||
Commercial | 9,126 | 335.3 | 4.91 | 8,627 | 318.5 | 4.93 | 499 | 16.8 | (0.02) | ||||||||||||
Construction | 722 | 29.1 | 5.39 | 600 | 27.1 | 6.05 | 122 | 2.0 | (0.66) | ||||||||||||
Mortgage | 6,736 | 266.9 | 5.28 | 6,989 | 267.9 | 5.11 | (253) | (1.0) | 0.17 | ||||||||||||
Consumer | 3,839 | 296.7 | 10.32 | 3,826 | 289.8 | 10.13 | 13 | 6.9 | 0.19 | ||||||||||||
Lease financing | 650 | 32.9 | 6.74 | 582 | 30.1 | 6.89 | 68 | 2.8 | (0.15) | ||||||||||||
Total loans (excluding WB loans) | 21,073 | 960.9 | 6.09 | 20,624 | 933.4 | 6.05 | 449 | 27.5 | 0.04 | ||||||||||||
WB loans | 1,984 | 135.6 | 9.12 | 2,392 | 160.9 | 8.99 | (408) | (25.3) | 0.13 | ||||||||||||
Total loans | 23,057 | 1,096.5 | 6.35 | 23,016 | 1,094.3 | 6.35 | 41 | 2.2 | - | ||||||||||||
Total interest earning assets | 33,193 | $1,223.5 | 4.92 | % | 31,356 | $1,201.7 | 5.12 | % | 1,837 | $21.8 | (0.20) | % | |||||||||
Allowance for loan losses | (542) | (589) | 47 | ||||||||||||||||||
Other non-interest earning assets | 4,469 | 4,288 | 181 | ||||||||||||||||||
Total average assets | $37,120 | $35,055 | $2,065 | ||||||||||||||||||
Liabilities and Stockholders' Equity: | |||||||||||||||||||||
Interest bearing deposits: | |||||||||||||||||||||
NOW and money market | $6,689 | $19.2 | 0.38 | % | $5,413 | $14.0 | 0.35 | % | $1,276 | $5.2 | 0.03 | % | |||||||||
Savings | 7,438 | 13.3 | 0.24 | 6,996 | 12.1 | 0.23 | 442 | 1.2 | 0.01 | ||||||||||||
Time deposits | 7,928 | 60.3 | 1.02 | 8,146 | 54.4 | 0.89 | (218) | 5.9 | 0.13 | ||||||||||||
Total interest bearing deposits | 22,055 | 92.8 | 0.56 | 20,555 | 80.5 | 0.52 | 1,500 | 12.3 | 0.04 | ||||||||||||
Borrowings | 2,382 | 64.0 | 3.59 | 2,865 | 64.7 | 3.01 | (483) | (0.7) | 0.58 | ||||||||||||
Total interest bearing liabilities | 24,437 | 156.8 | 0.86 | 23,420 | 145.2 | 0.83 | 1,017 | 11.6 | 0.03 | ||||||||||||
Net interest spread | 4.06 | % | 4.29 | % | (0.23) | % | |||||||||||||||
Non-interest bearing deposits | 6,484 | 6,113 | 371 | ||||||||||||||||||
Other liabilities | 937 | 942 | (5) | ||||||||||||||||||
Liabilities from discontinued operations | 2 | 2 | - | ||||||||||||||||||
Stockholders' equity | 5,260 | 4,578 | 682 | ||||||||||||||||||
Total average liabilities and stockholders' equity | $37,120 | $35,055 | $2,065 | ||||||||||||||||||
Net interest income / margin non-taxable equivalent basis | $1,066.7 | 4.29 | % | $1,056.5 | 4.50 | % | $10.2 | (0.21) | % |
Popular, Inc. | |||||||||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | |||||||||||||||||
Table F - Mortgage Banking Activities and Other Service Fees | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Mortgage Banking Activities | Variance | ||||||||||||||||
Quarters ended | Q3 2016 vs. | Q3 2016 vs. | Nine months ended | Variance | |||||||||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | Q2 2016 | Q3 2015 | 30-Sep-16 | 30-Sep-15 | 2016 vs. 2015 | |||||||||
Mortgage servicing fees, net of fair value adjustments: | |||||||||||||||||
Mortgage servicing fees | $14,520 | $14,675 | $17,020 | $(155) | $(2,500) | $43,997 | $43,957 | $40 | |||||||||
Mortgage servicing rights fair value adjustments | (6,062) | (4,340) | 1,038 | (1,722) | (7,100) | (18,879) | (5,808) | (13,071) | |||||||||
Total mortgage servicing fees, net of fair value adjustments | 8,458 | 10,335 | 18,058 | (1,877) | (9,600) | 25,118 | 38,149 | (13,031) | |||||||||
Net gain on sale of loans, including valuation on loans held-for-sale | 8,857 | 8,474 | 9,698 | 383 | (841) | 24,441 | 24,999 | (558) | |||||||||
Trading account (loss) profit: | |||||||||||||||||
Unrealized (losses) gains on outstanding derivative positions | 95 | (59) | (69) | 154 | 164 | (44) | (10) | (34) | |||||||||
Realized (losses) gains on closed derivative positions | (2,138) | (2,523) | (3,492) | 385 | 1,354 | (7,465) | (4,766) | (2,699) | |||||||||
Total trading account (loss) profit | (2,043) | (2,582) | (3,561) | 539 | 1,518 | (7,509) | (4,776) | (2,733) | |||||||||
Total mortgage banking activities | $15,272 | $16,227 | $24,195 | $(955) | $(8,923) | $42,050 | $58,372 | $(16,322) |
Other Service Fees | Variance | ||||||||||||||||
Quarters ended | Q3 2016 vs. | Q3 2016 vs. | Nine months ended | Variance | |||||||||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | Q2 2016 | Q3 2015 | 30-Sep-16 | 30-Sep-15 | 2016 vs. 2015 | |||||||||
Other service fees: | |||||||||||||||||
Debit card fees | $11,483 | $11,382 | $11,288 | $101 | $195 | $34,153 | $34,408 | $(255) | |||||||||
Insurance fees | 15,943 | 13,885 | 14,517 | 2,058 | 1,426 | 42,678 | 40,163 | 2,515 | |||||||||
Credit card fees | 17,644 | 17,700 | 16,879 | (56) | 765 | 52,202 | 50,639 | 1,563 | |||||||||
Sale and administration of investment products | 5,542 | 5,417 | 5,737 | 125 | (195) | 15,798 | 18,269 | (2,471) | |||||||||
Trust fees | 4,968 | 4,827 | 4,403 | 141 | 565 | 14,029 | 13,919 | 110 | |||||||||
Other fees | 3,589 | 3,734 | 3,291 | (145) | 298 | 10,636 | 11,764 | (1,128) | |||||||||
Total other service fees | $59,169 | $56,945 | $56,115 | $2,224 | $3,054 | $169,496 | $169,162 | $334 |
Popular, Inc. | ||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | ||||||||||
Table G - Loans and Deposits | ||||||||||
(Unaudited) | ||||||||||
Loans - Ending Balances | ||||||||||
Variance | ||||||||||
Q3 2016 vs. |
Q3 2016 vs. |
|||||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | Q2 2016 |
Q3 2015 |
|||||
Loans not covered under FDIC loss-sharing agreements: | ||||||||||
Commercial | $10,537,191 | $10,359,815 | $10,130,424 | $177,376 | $406,767 | |||||
Construction | 731,352 | 717,332 | 692,492 | 14,020 | 38,860 | |||||
Legacy [1] | 47,914 | 49,709 | 67,974 | (1,795) | (20,060) | |||||
Lease financing | 682,810 | 664,094 | 606,927 | 18,716 | 75,883 | |||||
Mortgage | 6,774,497 | 6,864,118 | 7,165,479 | (89,621) | (390,982) | |||||
Consumer | 3,822,208 | 3,885,593 | 3,834,770 | (63,385) | (12,562) | |||||
Total non-covered loans held-in-portfolio | $22,595,972 | $22,540,661 | $22,498,066 | $55,311 | $97,906 | |||||
Loans covered under FDIC loss-sharing agreements | 588,211 | 607,170 | 665,428 | (18,959) | (77,217) | |||||
Total loans held-in-portfolio | $23,184,183 | $23,147,831 | $23,163,494 | $36,352 | $20,689 | |||||
Loans held-for-sale: | ||||||||||
Commercial | $- | $39,544 | $47,447 | $(39,544) | $(47,447) | |||||
Construction | - | - | 10 | - | (10) | |||||
Mortgage | 72,076 | 82,794 | 123,562 | (10,718) | (51,486) | |||||
Total loans held-for-sale | $72,076 | $122,338 | $171,019 | $(50,262) | $(98,943) | |||||
Total loans | $23,256,259 | $23,270,169 | $23,334,513 | $(13,910) | $(78,254) | |||||
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment. | ||||||||||
Deposits - Ending Balances | ||||||||||
Variance | ||||||||||
Q3 2016 vs. |
Q3 2016 vs. |
|||||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | Q2 2016 |
Q3 2015 |
|||||
Demand deposits [1] | $9,161,839 | $8,106,291 | $7,027,672 | $1,055,548 | $2,134,167 | |||||
Savings, NOW and money market deposits (non-brokered) | 12,872,072 | 12,289,793 | 11,178,357 | 582,279 | 1,693,715 | |||||
Savings, NOW and money market deposits (brokered) | 391,128 | 387,026 | 405,903 | 4,102 | (14,775) | |||||
Time deposits (non-brokered) | 7,619,232 | 7,570,673 | 6,870,816 | 48,559 | 748,416 | |||||
Time deposits (brokered CDs) | 282,774 | 384,073 | 1,230,458 | (101,299) | (947,684) | |||||
Total deposits | $30,327,045 | $28,737,856 | $26,713,206 | $1,589,189 | $3,613,839 | |||||
[1] Includes interest and non-interest bearing demand deposits. |
Popular, Inc. | |||||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | |||||||||||||
Table H - Non-Performing Assets | |||||||||||||
(Unaudited) | |||||||||||||
Variance | |||||||||||||
As a % of | As a % of | As a % of | |||||||||||
loans HIP by |
loans HIP by |
loans HIP by |
Q3 2016 vs. |
Q3 2016 vs. |
|||||||||
(Dollars in thousands) | 30-Sep-16 | category | 30-Jun-16 | category | 30-Sep-15 | category |
Q2 2016 |
Q3 2015 |
|||||
Non-accrual loans: | |||||||||||||
Commercial | $170,571 | 1.6 | % | $175,615 | 1.7 | % | $239,397 | 2.4 | % | $(5,044) | $(68,826) | ||
Construction | - | - | 2,523 | 0.4 | 3,605 | 0.5 | (2,523) | (3,605) | |||||
Legacy [1] | 3,450 | 7.2 | 3,839 | 7.7 | 4,059 | 6.0 | (389) | (609) | |||||
Lease financing | 2,878 | 0.4 | 3,019 | 0.5 | 3,091 | 0.5 | (141) | (213) | |||||
Mortgage | 345,776 | 5.1 | 338,048 | 4.9 | 343,410 | 4.8 | 7,728 | 2,366 | |||||
Consumer | 56,650 | 1.5 | 54,695 | 1.4 | 41,340 | 1.1 | 1,955 | 15,310 | |||||
Total non-performing loans held-in- | |||||||||||||
portfolio, excluding covered loans | 579,325 | 2.6 | % | 577,739 | 2.6 | % | 634,902 | 2.8 | % | 1,586 | (55,577) | ||
Non-performing loans held-for-sale [2] | - | 39,544 | 47,681 | (39,544) | (47,681) | ||||||||
Other real estate owned (“OREO”), | |||||||||||||
excluding covered OREO | 184,828 | 177,025 | 155,826 | 7,803 | 29,002 | ||||||||
Total non-performing assets, | |||||||||||||
excluding covered assets | 764,153 | 794,308 | 838,409 | (30,155) | (74,256) | ||||||||
Covered loans and OREO | 41,211 | 41,466 | 39,888 | (255) | 1,323 | ||||||||
Total non-performing assets | $805,364 | $835,774 | $878,297 | $(30,410) | $(72,933) | ||||||||
Accruing loans past due 90 days or more [3] | $418,652 | $413,319 | $443,497 | $5,333 | $(24,845) | ||||||||
Ratios excluding covered loans: | |||||||||||||
Non-performing loans held-in-portfolio | |||||||||||||
to loans held-in-portfolio | 2.56 | % | 2.56 | % | 2.82 | % | |||||||
Allowance for loan losses to loans | |||||||||||||
held-in-portfolio | 2.33 | 2.30 | 2.38 | ||||||||||
Allowance for loan losses to | |||||||||||||
non-performing loans, excluding loans | |||||||||||||
held-for-sale | 90.73 | 89.68 | 84.42 | ||||||||||
Ratios including covered loans: | |||||||||||||
Non-performing assets to total assets | 2.06 | % | 2.22 | % | 2.47 | % | |||||||
Non-performing loans held-in-portfolio | |||||||||||||
to loans held-in-portfolio | 2.52 | 2.51 | 2.76 | ||||||||||
Allowance for loan losses to loans | |||||||||||||
held-in-portfolio | 2.40 | 2.37 | 2.46 | ||||||||||
Allowance for loan losses to non-performing | |||||||||||||
loans, excluding loans held-for-sale | 95.32 | 94.41 | 89.97 | ||||||||||
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment. | |||||||||||||
[2] There were no non-performing loans held-for-sale as of September 30, 2016 (June 30, 2016 - $40 million in commercial loans; September 30, 2015 - $47 million in commercial loans, $10 million in construction loans and $224 thousand in mortgage loans.) | |||||||||||||
[3] It is the Corporation’s policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to non-performing since the principal repayment is insured. These balances include $174 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of September 30, 2016 (June 30, 2016 - $149 million; September 30, 2015 - $159 million). Furthermore, the Corporation has approximately $72 million in reverse mortgage loans which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation's policy to exclude these balances from non-performing assets (June 30, 2016 - $63 million; September 30, 2015 - $71 million). |
Popular, Inc. | |||||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | |||||||||||||
Table I - Activity in Non-Performing Loans | |||||||||||||
(Unaudited) | |||||||||||||
Commercial loans held-in-portfolio: | |||||||||||||
Quarter ended | Quarter ended | ||||||||||||
30-Sep-16 | 30-Jun-16 | ||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||
Beginning balance NPLs | $172,584 | $3,031 | $175,615 | $182,639 | $14,992 | $197,631 | |||||||
Plus: | |||||||||||||
New non-performing loans | 12,520 | 1,609 | 14,129 | 26,029 | 2,254 | 28,283 | |||||||
Advances on existing non-performing loans | - | 164 | 164 | - | 8 | 8 | |||||||
Reclassification from construction loans to commercial loans | 2,436 | - | 2,436 | - | - | - | |||||||
Less: | |||||||||||||
Non-performing loans transferred to OREO | (2,223) | - | (2,223) | (1,815) | - | (1,815) | |||||||
Non-performing loans charged-off | (7,918) | (141) | (8,059) | (15,219) | (254) | (15,473) | |||||||
Loans returned to accrual status / loan collections | (10,352) | (1,139) | (11,491) | (19,050) | (13,969) | (33,019) | |||||||
Ending balance NPLs | $167,047 | $3,524 | $170,571 | $172,584 | $3,031 | $175,615 | |||||||
Construction loans held-in-portfolio: | |||||||||||||
Quarter ended | Quarter ended | ||||||||||||
30-Sep-16 | 30-Jun-16 | ||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||
Beginning balance NPLs | $2,423 | $100 | $2,523 | $3,270 | $671 | $3,941 | |||||||
Plus: | |||||||||||||
New non-performing loans | 1,150 | - | 1,150 | 186 | - | 186 | |||||||
Less: | |||||||||||||
Non-performing loans charged-off | (985) | - | (985) | (8) | - | (8) | |||||||
Loans returned to accrual status / loan collections | (152) | (100) | (252) | (1,025) | (571) | (1,596) | |||||||
Reclassification from construction loans to commercial loans | (2,436) | - | (2,436) | - | - | - | |||||||
Ending balance NPLs | $- | $- | $- | $2,423 | $100 | $2,523 | |||||||
Mortgage loans held-in-portfolio: | |||||||||||||
Quarter ended | Quarter ended | ||||||||||||
30-Sep-16 | 30-Jun-16 | ||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||
Beginning balance NPLs | $323,658 | $14,390 | $338,048 | $322,838 | $12,069 | $334,907 | |||||||
Plus: | |||||||||||||
New non-performing loans | 87,340 | 6,715 | 94,055 | 79,688 | 6,532 | 86,220 | |||||||
Less: | |||||||||||||
Non-performing loans transferred to OREO | (14,398) | (384) | (14,782) | (12,521) | (445) | (12,966) | |||||||
Non-performing loans charged-off | (9,481) | (1,994) | (11,475) | (10,648) | (130) | (10,778) | |||||||
Loans returned to accrual status / loan collections | (55,773) | (4,297) | (60,070) | (55,699) | (3,636) | (59,335) | |||||||
Ending balance NPLs | $331,346 | $14,430 | $345,776 | $323,658 | $14,390 | $338,048 |
Legacy loans held-in-portfolio: | |||||||||||||
Quarter ended | Quarter ended | ||||||||||||
30-Sep-16 | 30-Jun-16 | ||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||
Beginning balance NPLs | $- | $3,839 | $3,839 | $- | $4,046 | $4,046 | |||||||
Plus: | |||||||||||||
New non-performing loans | - | 45 | 45 | - | 552 | 552 | |||||||
Advances on existing non-performing loans | - | 135 | 135 | - | - | - | |||||||
Less: | |||||||||||||
Non-performing loans transferred to OREO | - | (44) | (44) | - | - | - | |||||||
Non-performing loans charged-off | - | (146) | (146) | - | (54) | (54) | |||||||
Loans returned to accrual status / loan collections | - | (379) | (379) | - | (705) | (705) | |||||||
Ending balance NPLs | $- | $3,450 | $3,450 | $- | $3,839 | $3,839 | |||||||
Total non-performing loans held-in-portfolio (excluding consumer and covered loans): | |||||||||||||
Quarter ended | Quarter ended | ||||||||||||
30-Sep-16 | 30-Jun-16 | ||||||||||||
(In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||
Beginning balance NPLs | $498,665 | $21,360 | $520,025 | $508,747 | $31,778 | $540,525 | |||||||
Plus: | |||||||||||||
New non-performing loans | 101,010 | 8,369 | 109,379 | 105,903 | 9,338 | 115,241 | |||||||
Advances on existing non-performing loans | - | 299 | 299 | - | 8 | 8 | |||||||
Reclassification from construction loans to commercial loans | 2,436 | - | 2,436 | - | - | - | |||||||
Less: | |||||||||||||
Non-performing loans transferred to OREO | (16,621) | (428) | (17,049) | (14,336) | (445) | (14,781) | |||||||
Non-performing loans charged-off | (18,384) | (2,281) | (20,665) | (25,875) | (438) | (26,313) | |||||||
Loans returned to accrual status / loan collections | (66,277) | (5,915) | (72,192) | (75,774) | (18,881) | (94,655) | |||||||
Reclassification from construction loans to commercial loans | (2,436) | - | (2,436) | - | - | - | |||||||
Ending balance NPLs | $498,393 | $21,404 | $519,797 | $498,665 | $21,360 | $520,025 |
Popular, Inc. | |||||||||||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | |||||||||||||||||||
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Quarter ended | Quarter ended | Quarter ended | |||||||||||||||||
30-Sep-16 | 30-Jun-16 | 30-Sep-15 | |||||||||||||||||
Non-covered |
Covered | Non-covered | Covered |
Non-covered |
Covered | ||||||||||||||
(Dollars in thousands) | loans | loans | Total | loans | loans | Total | loans | loans | Total | ||||||||||
Balance at beginning of period | $518,139 | $30,581 | $548,720 | $508,427 | $30,045 | $538,472 | $512,739 | $38,074 | $550,813 | ||||||||||
Provision (reversal of provision) for loan losses | 42,594 | 750 | 43,344 | 39,668 | 804 | 40,472 | 69,568 | (2,890) | 66,678 | ||||||||||
560,733 | 31,331 | 592,064 | 548,095 | 30,849 | 578,944 | 582,307 | 35,184 | 617,491 | |||||||||||
Net loans charged-off (recovered): | |||||||||||||||||||
BPPR | |||||||||||||||||||
Commercial | 3,199 | - | 3,199 | 5,647 | - | 5,647 | 9,172 | - | 9,172 | ||||||||||
Construction | 886 | - | 886 | (3,226) | - | (3,226) | (2,648) | - | (2,648) | ||||||||||
Lease financing | 816 | - | 816 | 434 | - | 434 | 894 | - | 894 | ||||||||||
Mortgage | 15,237 | 661 | 15,898 | 13,464 | 699 | 14,163 | 15,524 | 601 | 16,125 | ||||||||||
Consumer | 12,821 | 408 | 13,229 | 19,903 | (431) | 19,472 | 24,303 | 74 | 24,377 | ||||||||||
Total BPPR | 32,959 | 1,069 | 34,028 | 36,222 | 268 | 36,490 | 47,245 | 675 | 47,920 | ||||||||||
BPNA | |||||||||||||||||||
Commercial | (1,173) | - | (1,173) | (1,265) | - | (1,265) | (1,959) | - | (1,959) | ||||||||||
Legacy [1] | (520) | - | (520) | (893) | - | (893) | (603) | - | (603) | ||||||||||
Mortgage | 1,942 | - | 1,942 | 16 | - | 16 | 787 | - | 787 | ||||||||||
Consumer | 1,932 | - | 1,932 | 1,321 | - | 1,321 | 832 | - | 832 | ||||||||||
Total BPNA | 2,181 | - | 2,181 | (821) | - | (821) | (943) | - | (943) | ||||||||||
Total loans charged-off - Popular, Inc. | 35,140 | 1,069 | 36,209 | 35,401 | 268 | 35,669 | 46,302 | 675 | 46,977 | ||||||||||
Net (write-downs) recoveries [2] | - | - | - | 5,445 | - | 5,445 | - | - | - | ||||||||||
Balance at end of period | $525,593 | $30,262 | $555,855 | $518,139 | $30,581 | $548,720 | $536,005 | $34,509 | $570,514 | ||||||||||
POPULAR, INC. | |||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 0.63 | % | 0.63 | % | 0.63 | % | 0.62 | % | 0.83 | % | 0.82 | % | |||||||
Provision for loan losses to net charge-offs [3] | 1.21 | x | 1.20 | x | 1.27 | x | 1.29 | x | 1.50 | x | 1.42 | x | |||||||
BPPR | |||||||||||||||||||
Annualized net charge-offs to average loans held-in-portfolio | 0.77 | % | 0.77 | % | 0.83 | % | 0.81 | % | 1.07 | % | 1.04 | % | |||||||
Provision for loan losses to net charge-offs [3] | 1.10 | x | 1.09 | x | 1.21 | x | 1.22 | x | 1.46 | x | 1.37 | x | |||||||
BPNA | |||||||||||||||||||
Annualized net charge-offs (recoveries) to average loans held-in-portfolio | 0.17 | % | (0.06) | % | (0.08) | % | |||||||||||||
Provision for loan losses to net charge-offs (recoveries) | 2.89 | (1.60) | N.M. | ||||||||||||||||
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment. | |||||||||||||||||||
[2] Net write-downs are related to loans sold or reclassified to held-for-sale. | |||||||||||||||||||
[3] Excluding provision for loan losses and net (write-downs) recoveries related to loans sold or reclassified to held-for-sale. | |||||||||||||||||||
N.M. - Not meaningful. |
Popular, Inc. | ||||||||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | ||||||||||||||||
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED | ||||||||||||||||
(Unaudited) | ||||||||||||||||
30-Sep-16 | ||||||||||||||||
Lease | ||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy [2] | Mortgage | financing | Consumer |
Total [3] |
|
||||||||
Specific ALLL | $58,527 | $- | $- | $45,557 | $540 | $24,433 | $129,057 | |||||||||
Impaired loans | [1] | $328,868 | $- | $- | $496,868 | $1,899 | $110,929 | $938,564 | ||||||||
Specific ALLL to impaired loans | [1] | 17.80 | % | - | % | - | % | 9.17 | % | 28.44 | % | 22.03 | % | 13.75 | % | |
General ALLL | $165,639 | $9,942 | $1,682 | $93,971 | $7,375 | $117,927 | $396,536 | |||||||||
Loans held-in-portfolio, excluding impaired loans | [1] | $10,208,312 | $731,352 | $47,914 | $6,277,639 | $680,911 | $3,711,280 | $21,657,408 | ||||||||
General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 1.62 | % | 1.36 | % | 3.51 | % | 1.50 | % | 1.08 | % | 3.18 | % | 1.83 | % | |
Total ALLL | $224,166 | $9,942 | $1,682 | $139,528 | $7,915 | $142,360 | $525,593 | |||||||||
Total non-covered loans held-in-portfolio | [1] | $10,537,180 | $731,352 | $47,914 | $6,774,507 | $682,810 | $3,822,209 | $22,595,972 | ||||||||
ALLL to loans held-in-portfolio | [1] | 2.13 | % | 1.36 | % | 3.51 | % | 2.06 | % | 1.16 | % | 3.72 | % | 2.33 | % | |
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. | ||||||||||||||||
[2] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment. | ||||||||||||||||
[3] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of September 30, 2016 the general allowance on the covered loans amounted to $30.3 million. | ||||||||||||||||
30-Jun-16 | ||||||||||||||||
Lease | ||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy [2] | Mortgage | financing | Consumer |
Total [3] |
|
||||||||
Specific ALLL | $53,350 | $116 | $- | $43,909 | $548 | $24,898 | $122,821 | |||||||||
Impaired loans | [1] | $335,881 | $1,036 | $- | $484,725 | $2,110 | $111,610 | $935,362 | ||||||||
Specific ALLL to impaired loans | [1] | 15.88 | % | 11.20 | % | - | % | 9.06 | % | 25.97 | % | 22.31 | % | 13.13 | % | |
General ALLL | $156,331 | $10,949 | $1,852 | $97,577 | $9,546 | $119,063 | $395,318 | |||||||||
Loans held-in-portfolio, excluding impaired loans | [1] | $10,023,934 | $716,296 | $49,709 | $6,379,393 | $661,984 | $3,773,983 | $21,605,299 | ||||||||
General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 1.56 | % | 1.53 | % | 3.73 | % | 1.53 | % | 1.44 | % | 3.15 | % | 1.83 | % | |
Total ALLL | $209,681 | $11,065 | $1,852 | $141,486 | $10,094 | $143,961 | $518,139 | |||||||||
Total non-covered loans held-in-portfolio | [1] | $10,359,815 | $717,332 | $49,709 | $6,864,118 | $664,094 | $3,885,593 | $22,540,661 | ||||||||
ALLL to loans held-in-portfolio | [1] | 2.02 | % | 1.54 | % | 3.73 | % | 2.06 | % | 1.52 | % | 3.70 | % | 2.30 | % | |
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. | ||||||||||||||||
[2] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment. | ||||||||||||||||
[3] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of June 30, 2016 the general allowance on the covered loans amounted to $30.6 million. | ||||||||||||||||
Variance | ||||||||||||||||
Lease | ||||||||||||||||
(Dollars in thousands) | Commercial | Construction | Legacy | Mortgage | financing | Consumer | Total | |||||||||
Specific ALLL | $5,177 | $(116) | $- | $1,648 | $(8) | $(465) | $6,236 | |||||||||
Impaired loans | $(7,013) | $(1,036) | $- | $12,143 | $(211) | $(681) | $3,202 | |||||||||
General ALLL | $9,308 | $(1,007) | $(170) | $(3,606) | $(2,171) | $(1,136) | $1,218 | |||||||||
Loans held-in-portfolio, excluding impaired loans | $184,378 | $15,056 | $(1,795) | $(101,754) | $18,927 | $(62,703) | $52,109 | |||||||||
Total ALLL | $14,485 | $(1,123) | $(170) | $(1,958) | $(2,179) | $(1,601) | $7,454 | |||||||||
Total non-covered loans held-in-portfolio | $177,365 | $14,020 | $(1,795) | $(89,611) | $18,716 | $(63,384) | $55,311 |
Popular, Inc. | |||||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | |||||||||||||
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS | |||||||||||||
(Unaudited) | |||||||||||||
30-Sep-16 | |||||||||||||
Puerto Rico | |||||||||||||
Lease | |||||||||||||
(In thousands) | Commercial | Construction | Mortgage | financing | Consumer | Total | |||||||
Allowance for credit losses: | |||||||||||||
Specific ALLL non-covered loans | $58,527 | $- | $43,567 | $540 | $23,708 | $126,342 | |||||||
General ALLL non-covered loans | 151,847 | 2,114 | 91,761 | 7,375 | 104,604 | 357,701 | |||||||
ALLL - non-covered loans | 210,374 | 2,114 | 135,328 | 7,915 | 128,312 | 484,043 | |||||||
Specific ALLL covered loans | - | - | - | - | - | - | |||||||
General ALLL covered loans | - | - | 30,135 | - | 127 | 30,262 | |||||||
ALLL - covered loans | - | - | 30,135 | - | 127 | 30,262 | |||||||
Total ALLL | $210,374 | $2,114 | $165,463 | $7,915 | $128,439 | $514,305 | |||||||
Loans held-in-portfolio: | |||||||||||||
Impaired non-covered loans | $328,868 | $- | $487,972 | $1,899 | $108,341 | $927,080 | |||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 6,925,290 | 81,054 | 5,476,876 | 680,911 | 3,185,490 | 16,349,621 | |||||||
Non-covered loans held-in-portfolio | 7,254,158 | 81,054 | 5,964,848 | 682,810 | 3,293,831 | 17,276,701 | |||||||
Impaired covered loans | - | - | - | - | - | - | |||||||
Covered loans held-in-portfolio, excluding impaired loans | - | - | 571,349 | - | 16,862 | 588,211 | |||||||
Covered loans held-in-portfolio | - | - | 571,349 | - | 16,862 | 588,211 | |||||||
Total loans held-in-portfolio | $7,254,158 | $81,054 | $6,536,197 | $682,810 | $3,310,693 | $17,864,912 | |||||||
30-Jun-16 | |||||||||||||
Puerto Rico | |||||||||||||
Lease | |||||||||||||
(In thousands) | Commercial | Construction | Mortgage | financing | Consumer | Total | |||||||
Allowance for credit losses: | |||||||||||||
Specific ALLL non-covered loans | $53,350 | $116 | $42,106 | $548 | $24,167 | $120,287 | |||||||
General ALLL non-covered loans | 146,477 | 3,489 | 94,618 | 9,546 | 106,304 | 360,434 | |||||||
ALLL - non-covered loans | 199,827 | 3,605 | 136,724 | 10,094 | 130,471 | 480,721 | |||||||
Specific ALLL covered loans | - | - | - | - | - | - | |||||||
General ALLL covered loans | - | - | 29,951 | - | 630 | 30,581 | |||||||
ALLL - covered loans | - | - | 29,951 | - | 630 | 30,581 | |||||||
Total ALLL | $199,827 | $3,605 | $166,675 | $10,094 | $131,101 | $511,302 | |||||||
Loans held-in-portfolio: | |||||||||||||
Impaired non-covered loans | $335,881 | $1,036 | $476,161 | $2,110 | $109,130 | $924,318 | |||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 6,881,171 | 102,606 | 5,544,401 | 661,984 | 3,212,552 | 16,402,714 | |||||||
Non-covered loans held-in-portfolio | 7,217,052 | 103,642 | 6,020,562 | 664,094 | 3,321,682 | 17,327,032 | |||||||
Impaired covered loans | - | - | - | - | - | - | |||||||
Covered loans held-in-portfolio, excluding impaired loans | - | - | 589,256 | - | 17,914 | 607,170 | |||||||
Covered loans held-in-portfolio | - | - | 589,256 | - | 17,914 | 607,170 | |||||||
Total loans held-in-portfolio | $7,217,052 | $103,642 | $6,609,818 | $664,094 | $3,339,596 | $17,934,202 | |||||||
Variance | |||||||||||||
Lease | |||||||||||||
(In thousands) | Commercial | Construction | Mortgage | financing | Consumer | Total | |||||||
Allowance for credit losses: | |||||||||||||
Specific ALLL non-covered loans | $5,177 | $(116) | $1,461 | $(8) | $(459) | $6,055 | |||||||
General ALLL non-covered loans | 5,370 | (1,375) | (2,857) | (2,171) | (1,700) | (2,733) | |||||||
ALLL - non-covered loans | 10,547 | (1,491) | (1,396) | (2,179) | (2,159) | 3,322 | |||||||
Specific ALLL covered loans | - | - | - | - | - | - | |||||||
General ALLL covered loans | - | - | 184 | - | (503) | (319) | |||||||
ALLL - covered loans | - | - | 184 | - | (503) | (319) | |||||||
Total ALLL | $10,547 | $(1,491) | $(1,212) | $(2,179) | $(2,662) | $3,003 | |||||||
Loans held-in-portfolio: | |||||||||||||
Impaired non-covered loans | $(7,013) | $(1,036) | $11,811 | $(211) | $(789) | $2,762 | |||||||
Non-covered loans held-in-portfolio, excluding impaired loans | 44,119 | (21,552) | (67,525) | 18,927 | (27,062) | (53,093) | |||||||
Non-covered loans held-in-portfolio | 37,106 | (22,588) | (55,714) | 18,716 | (27,851) | (50,331) | |||||||
Impaired covered loans | - | - | - | - | - | - | |||||||
Covered loans held-in-portfolio, excluding impaired loans | - | - | (17,907) | - | (1,052) | (18,959) | |||||||
Covered loans held-in-portfolio | - | - | (17,907) | - | (1,052) | (18,959) | |||||||
Total loans held-in-portfolio | $37,106 | $(22,588) | $(73,621) | $18,716 | $(28,903) | $(69,290) |
Popular, Inc. | |||||||||||||
Financial Supplement to Third Quarter 2016 Earnings Release | |||||||||||||
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS | |||||||||||||
(Unaudited) | |||||||||||||
30-Sep-16 | |||||||||||||
U.S. Mainland | |||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||
Allowance for credit losses: | |||||||||||||
Specific ALLL | $- | $- | $- | $1,990 | $725 | $2,715 | |||||||
General ALLL | 13,792 | 7,828 | 1,682 | 2,210 | 13,323 | 38,835 | |||||||
Total ALLL | $13,792 | $7,828 | $1,682 | $4,200 | $14,048 | $41,550 | |||||||
Loans held-in-portfolio: | |||||||||||||
Impaired loans | $- | $- | $- | $8,896 | $2,588 | $11,484 | |||||||
Loans held-in-portfolio, excluding impaired loans | 3,283,022 | 650,298 | 47,914 | 800,763 | 525,790 | 5,307,787 | |||||||
Total loans held-in-portfolio | $3,283,022 | $650,298 | $47,914 | $809,659 | $528,378 | $5,319,271 | |||||||
30-Jun-16 | |||||||||||||
U.S. Mainland | |||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||
Allowance for credit losses: | |||||||||||||
Specific ALLL | $- | $- | $- | $1,803 | $731 | $2,534 | |||||||
General ALLL | 9,854 | 7,460 | 1,852 | 2,959 | 12,759 | 34,884 | |||||||
Total ALLL | $9,854 | $7,460 | $1,852 | $4,762 | $13,490 | $37,418 | |||||||
Loans held-in-portfolio: | |||||||||||||
Impaired loans | $- | $- | $- | $8,564 | $2,480 | $11,044 | |||||||
Loans held-in-portfolio, excluding impaired loans | 3,142,763 | 613,690 | 49,709 | 834,992 | 561,431 | 5,202,585 | |||||||
Total loans held-in-portfolio | $3,142,763 | $613,690 | $49,709 | $843,556 | $563,911 | $5,213,629 | |||||||
Variance | |||||||||||||
(In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||
Allowance for credit losses: | |||||||||||||
Specific ALLL | $- | $- | $- | $187 | $(6) | $181 | |||||||
General ALLL | 3,938 | 368 | (170) | (749) | 564 | 3,951 | |||||||
Total ALLL | $3,938 | $368 | $(170) | $(562) | $558 | $4,132 | |||||||
Loans held-in-portfolio: | |||||||||||||
Impaired loans | $- | $- | $- | $332 | $108 | $440 | |||||||
Loans held-in-portfolio, excluding impaired loans | 140,259 | 36,608 | (1,795) | (34,229) | (35,641) | 105,202 | |||||||
Total loans held-in-portfolio | $140,259 | $36,608 | $(1,795) | $(33,897) | $(35,533) | $105,642 |
Popular, Inc. | ||||||
Financial Supplement to Third Quarter 2016 Earnings Release | ||||||
Table N - Reconciliation to GAAP Financial Measures | ||||||
(Unaudited) | ||||||
(In thousands, except share or per share information) | 30-Sep-16 | 30-Jun-16 | 30-Sep-15 | |||
Total stockholders’ equity | $5,380,395 | $5,359,831 | $5,049,636 | |||
Common shares outstanding at end of period | 103,762,596 | 103,703,041 | 103,556,285 | |||
Book value per common share | $51.85 | $51.68 | $48.76 | |||
Total stockholders’ equity | $5,380,395 | $5,359,831 | $5,049,636 | |||
Less: Preferred stock | (50,160) | (50,160) | (50,160) | |||
Less: Goodwill | (627,294) | (631,095) | (504,925) | |||
Less: Other intangibles | (47,886) | (50,983) | (71,393) | |||
Total tangible common equity | $4,655,055 | $4,627,593 | $4,423,158 | |||
Total assets | $39,054,296 | $37,606,148 | $35,522,462 | |||
Less: Goodwill | (627,294) | (631,095) | (504,925) | |||
Less: Other intangibles | (47,886) | (50,983) | (71,393) | |||
Total tangible assets | $38,379,116 | $36,924,070 | $34,946,144 | |||
Tangible common equity to tangible assets | 12.13% | 12.53% | 12.66% | |||
Common shares outstanding at end of period | 103,762,596 | 103,703,041 | 103,556,285 | |||
Tangible book value per common share | $44.86 | $44.62 | $42.71 |
Popular, Inc. | |||||||
Financial Supplement to Third Quarter 2016 Earnings Release | |||||||
Table O - Financial Information - Westernbank Loans | |||||||
(Unaudited) | |||||||
Revenues | |||||||
Quarters ended | |||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | Variance | ||||
Interest income on WB loans | $40,867 | $49,794 | $(8,927) | ||||
FDIC loss-share expense: | |||||||
Amortization of indemnification asset | (1,259) | (4,036) | 2,777 | ||||
80% mirror accounting on credit impairment losses (reversal) [1] | 659 | 475 | 184 | ||||
80% mirror accounting on reimbursable expenses | 853 | 2,235 | (1,382) | ||||
80% mirror accounting on recoveries on covered assets, including rental income on OREOs, | |||||||
subject to reimbursement to the FDIC | (522) | (3,956) | 3,434 | ||||
Change in true-up payment obligation | (6,611) | (7,688) | 1,077 | ||||
Arbitration award expense | (54,924) | - | (54,924) | ||||
Other | 81 | 394 | (313) | ||||
Total FDIC loss-share expense | (61,723) | (12,576) | (49,147) | ||||
Total revenues (expense) | (20,856) | 37,218 | (58,074) | ||||
Provision (reversal) for loan losses- WB loans | 6,612 | (7,282) | 13,894 | ||||
Total revenues (expense) less provision (reversal) for loan losses | $(27,468) | $44,500 | $(71,968) | ||||
[1] | Reductions in expected cash flows for ASC 310-30 loans, which may impact the provision for loan losses, may consider reductions in both principal and interest cash flow expectations. The amount covered under the FDIC loss-sharing agreements for interest not collected from borrowers is limited under the agreements (approximately 90 days); accordingly, these amounts are not subject fully to the 80% mirror accounting. | ||||||
Non-personnel operating expenses | |||||||
Quarters ended [2] | |||||||
(In thousands) | [1] 30-Sep-16 | 30-Jun-16 | Variance | ||||
Professional fees | $4,501 | $5,991 | $(1,490) | ||||
OREO expenses | 2,702 | 6,389 | (3,687) | ||||
Other operating expenses | 1,738 | 1,924 | (186) | ||||
Total operating expenses | $8,941 | $14,304 | $(5,363) | ||||
[1] | Includes expenses related to loans subject, and not subject, to the FDIC loss-sharing agreement. | ||||||
[2] | Expense reimbursements from the FDIC may be recorded with a time lag, since these are claimed upon the event of loss or charge-off of the loans which may occur in a subsequent period. | ||||||
Quarterly average assets | |||||||
Quarters ended | |||||||
(In millions) | 30-Sep-16 | 30-Jun-16 | Variance | ||||
Loans | $1,881 | $2,013 | $(132) | ||||
FDIC loss-share asset | 192 | 211 | (19) |
Activity in the carrying amount and accretable yield of loans accounted for under ASC 310-30 | |||||||||
Quarters ended | |||||||||
30-Sep-16 | 30-Jun-16 | ||||||||
Carrying amount |
Carrying amount |
||||||||
(In thousands) |
Accretable yield |
of loans |
Accretable yield |
of loans |
|||||
Beginning balance | $1,071,680 | $1,799,943 | $1,128,808 | $1,935,441 | |||||
Accretion | (39,590) | 39,590 | (48,476) | 48,476 | |||||
Changes in expected cash flows | 6,602 | - | (8,652) | - | |||||
Collections / loan sales / charge-offs [2] | - | (71,994) | - | (183,974) | |||||
Ending balance | 1,038,692 | 1,767,539 | 1,071,680 | 1,799,943 | |||||
Allowance for loan losses - ASC 310-30 loans | - | (69,571) | - | (66,995) | |||||
Ending balance, net of allowance for loan losses | $1,038,692 | $1,697,968 | $1,071,680 | $1,732,948 | |||||
[1] The carrying amount of loans acquired from Westernbank and
accounted for under ASC 310-30 which remain subject to the
loss-sharing agreement with the FDIC amounted to approximately $578
million as of September 30, 2016 and $597 million as of June 30,
2016.
[2] For the quarter ended June 30, 2016, includes the impact of the bulk sale of loans with a carrying value of approximately $99 million. |
|||||||||
Activity in the carrying amount of the FDIC indemnity asset | |||||||||
Quarters ended | |||||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | |||||||
Balance at beginning of period | $214,029 | $219,448 | |||||||
Amortization | (1,259) | (4,036) | |||||||
Credit impairment losses (reversal) to be covered under loss-sharing agreements | 659 | 475 | |||||||
Reimbursable expenses to be covered under loss-sharing agreements | 853 | 2,235 | |||||||
Recoveries on covered assets | - | (4,093) | |||||||
Net payments from FDIC under loss-sharing agreements | (6,819) | - | |||||||
Arbitration award expense | (54,924) | - | |||||||
Other adjustments attributable to FDIC loss-sharing agreements | (72) | - | |||||||
Balance at end of period | $152,467 | $214,029 | |||||||
Activity in the remaining FDIC loss-share asset amortization | |||||||||
Quarters ended | |||||||||
(In thousands) | 30-Sep-16 | 30-Jun-16 | |||||||
Balance at beginning of period | $23,191 | $25,205 | |||||||
Amortization | (1,259) | (4,036) | |||||||
Impact of change in projected losses | (14,627) | 2,022 | |||||||
Balance at end of period | $7,305 | $23,191 |