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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Popular Pfd Ser D (MM) | NASDAQ:BPOPZ | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 29.15 | 0 | 01:00:00 |
Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported a net income of $96.2 million for the quarter ended June 30, 2017, compared to a net income of $92.9 million for the quarter ended March 31, 2017.
Mr. Ignacio Alvarez, President and Chief Executive Officer, said: “I am fortunate to step into my new role as CEO at a time when Popular is on a solid footing, as evidenced by our results for the second quarter. Top line revenues were strong, credit quality remained stable and we achieved loan growth in both the United States and Puerto Rico. While we will continue to operate in a challenging environment in the near term, the team is energized and focused. We have more financial and human capital than at any time in our history and are well positioned for the future.”
Earnings Highlights (Unaudited) Quarters ended Six months ended (Dollars in thousands, except per share information) 30-Jun-17 31-Mar-17 30-Jun-16 30-Jun-17 30-Jun-16 Net interest income $374,479 $362,098 $360,551 $736,577 $712,963 Provision for loan losses 49,965 42,057 39,668 92,022 87,608 Provision (reversal) for loan losses - covered loans [1] 2,514 (1,359) 804 1,155 (2,301) Net interest income after provision for loan losses 322,000 321,400 320,079 643,400 627,656 FDIC loss-share expense (475) (8,257) (12,576) (8,732) (15,722) Other non-interest income 117,268 124,126 123,079 241,394 237,855 Other operating expenses 306,835 311,318 309,149 618,153 611,092 Income before income tax 131,958 125,951 121,433 257,909 238,697 Income tax expense 35,732 33,006 32,446 68,738 64,711 Net income $96,226 $92,945 $88,987 $189,171 $173,986 Net income applicable to common stock $95,295 $92,014 $88,056 $187,309 $172,124 Net income per common share - Basic $0.94 $0.89 $0.85 $1.83 $1.67 Net income per common share - Diluted $0.94 $0.89 $0.85 $1.83 $1.67 [1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement.
Net interest income
Net interest income for the quarter ended June 30, 2017 was $374.5 million, compared to $362.1 million for the previous quarter. The impact of having one more day in the quarter had a positive effect in the net interest income of $2.6 million. Net interest margin was 4.02% for the quarter compared to 4.08% for the previous quarter.
The increase of $12.4 million in net interest income was mainly related to the following:
Positive variances:
Negative variances:
BPPR’s net interest income amounted to $319.7 million for the quarter ended June 30, 2017, compared to $310.2 million for the previous quarter. The increase of $9.5 million in net interest income was mainly due to higher income from money market and investment securities resulting from higher volumes and yields, as previously stated. Also, the results for the quarter reflected a higher yield from commercial and consumer loans, as discussed above, resulting mostly from the increase in market rates, which was partially offset by lower income from mortgage loans. The net interest margin for the second quarter was 4.36%, a decline of 10 basis points when compared to 4.46% for the previous quarter. The decrease in net interest margin results from the composition of earning assets, which has shifted towards lower yielding assets resulting from higher balances in Fed Funds, mainly as a result of higher balances of Puerto Rico government deposits. P.R. earning assets yielded 4.69%, compared to 4.81% in the previous quarter, while the cost of interest bearing liabilities was 0.46%, compared to 0.50% in the previous quarter.
Banco Popular North America’s (“BPNA”)’s net interest income was $69.7 million, compared to $67.1 million in the previous quarter, mainly due to higher income resulting mostly from higher volume of commercial loans and investment securities and the positive impact of one more day in the quarter, partially offset by slightly higher deposit costs. Net interest margin increased 2 basis points to 3.54%, compared to 3.52% for the previous quarter, driven by higher yields on interest earning assets. U.S. earning assets yielded 4.30%, compared to 4.28% in the previous quarter, while the cost of interest bearing liabilities was 0.99%, relatively flat when compared to 0.98% in the previous quarter.
Non-interest income
Non-interest income amounted to $116.8 million for the quarter ended June 30, 2017, compared to $115.9 million for the previous quarter. The favorable variance of $0.9 million in non-interest income was primarily driven by:
These positive variances were partially offset by an other-than-temporary impairment charge of $8.3 million on senior Puerto Rico Sales Tax Financing Corporation (“COFINA”) bonds classified as available-for-sale. On May 5, 2017 the federally appointed Puerto Rico Management and Oversight Board filed a Title III bankruptcy petition for COFINA. After the COFINA inclusion under Title III, the U.S. District Court escrowed payments due to COFINA bondholders with the COFINA trustee pending resolution of certain legal disputes, which resulted in the first missed interest payment on the COFINA bonds during June 2017. As such, the Corporation determined the entire unrealized loss on these securities to be other-than-temporary.
Refer to Table B for further details.
Financial Impact of the 2010 FDIC-Assisted Transaction (Unaudited) Quarters ended (In thousands) 30-Jun-17 31-Mar-17 30-Jun-16Income Statement
Interest income on WB loans $37,900 $38,182 $49,794 Total FDIC loss-share expense (475) (8,257) (12,576) Reversal of provision for loan losses- WB loans [1] (417) (499) (7,282) Total revenues less reversal of provision for loan losses $37,842 $30,424 $44,500Balance Sheet
WB loans $1,737,448 $1,808,057 $1,932,062 FDIC loss-share asset 52,583 58,793 214,029 FDIC true-up payment obligation 163,668 160,543 127,876 [1] Includes the elimination of an incremental $6.0 million provision for loan losses related to the inter-company transfer of a loan between BPPR and Popular, Inc., its bank holding company, the impact of which is eliminated in the consolidated results of the Corporation in accordance with U.S. GAAP.See additional details on accounting for the 2010 FDIC-Assisted transaction in Table O.
Operating expenses
Operating expenses amounted to $306.8 million for the second quarter of 2017, a decrease of $4.5 million when compared to the first quarter of 2017. The decrease in operating expenses was driven primarily by:
These decreases were partially offset by:
Non-personnel credit-related costs, which include collections, appraisals, credit related fees and OREO expenses, amounted to $20.4 million for the second quarter of 2017, compared to $16.6 million for the first quarter of 2017. The increase was principally due to higher write-downs on OREO at BPPR.
Full-time equivalent employees were 7,789 as of June 30, 2017, compared to 7,820 as of March 31, 2017.
For a breakdown of operating expenses by category refer to table B.
Income taxes
For the quarter ended June 30, 2017, the Corporation recorded an income tax expense of $35.7 million, compared to $33.0 million for the previous quarter. The increase in the income tax expense is mainly attributed to higher taxable income at BPNA.
The effective income tax rate for the second quarter of 2017 was 27%, compared to 26% for previous quarter. The effective tax rate is impacted by the composition and source of the taxable income.
Credit Quality
The Corporation continued to reflect stable credit quality metrics when compared to the first quarter of 2017. The BPPR segment experienced a decline in inflows to non-performing loans and NPLs balances, while net charge-offs increased quarter-over-quarter. The U.S. operation continued to reflect positive results with strong loan growth and favorable credit quality metrics. The Corporation remains attentive to changes in credit quality trends given the continued challenges in the economic environment in Puerto Rico.
Non-Performing Assets (Unaudited) (In thousands) 30-Jun-17 31-Mar-17 30-Jun-16 Total non-performing loans held-in-portfolio, excluding covered loans $547,129 $575,613 $577,739 Non-performing loans held-for-sale - - 39,544 Other real estate owned (“OREO”), excluding covered OREO 181,096 185,836 177,025 Total non-performing assets, excluding covered assets 728,225 761,449 794,308 Covered loans and OREO 29,376 33,866 41,466 Total non-performing assets $757,601 $795,315 $835,774 Net charge-offs for the quarter (excluding covered loans) $57,484 $35,633 $35,401 Ratios (excluding covered loans): Non-covered loans held-in-portfolio $22,918,271 $22,734,721 $22,540,661 Non-performing loans held-in-portfolio to loans held-in-portfolio 2.39% 2.53% 2.56% Allowance for loan losses to loans held-in-portfolio 2.22 2.27 2.30 Allowance for loan losses to non-performing loans, excluding loans held-for-sale 93.07 89.77 89.68 Refer to Table H for additional information. Provision for Loan Losses (Unaudited) Quarters ended Six months ended (In thousands) 30-Jun-17 31-Mar-17 30-Jun-16 30-Jun-17 30-Jun-16 Provision for loan losses: BPPR [1] $42,173 $31,478 $38,351 $73,651 $82,222 BPNA 7,792 10,579 1,317 18,371 5,386 Total provision for loan losses - non-covered loans $49,965 $42,057 $39,668 $92,022 $87,608 Provision (reversal) for loan losses - covered loans 2,514 (1,359) 804 1,155 (2,301) Total provision for loan losses $52,479 $40,698 $40,472 $93,177 $85,307 [1] Includes the elimination of an incremental $6.0 million provision for loan losses related to the inter-company transfer of a loan between BPPR and Popular, Inc., its bank holding company, the impact of which is eliminated in the consolidated results of the Corporation in accordance with U.S. GAAP. Credit Quality by Segment (Unaudited) (In thousands) Quarters ended BPPR 30-Jun-17 31-Mar-17 30-Jun-16 Provision for loan losses [1] $42,173 $31,478 $38,351 Net charge-offs [1] 54,255 32,945 36,222 Total non-performing loans held-in-portfolio, excluding covered loans 517,382 548,385 550,632 Allowance / non-covered loans held-in-portfolio 2.66% 2.75% 2.77% [1] Includes the elimination of an incremental $6.0 million provision for loan losses and corresponding charge-off related to the inter-company transfer of a loan between BPPR and Popular, Inc., its bank holding company, the impact of which is eliminated in the consolidated results of the Corporation in accordance with U.S. GAAP.
Quarters ended BPNA 30-Jun-17 31-Mar-17 30-Jun-16 Provision for loan losses $7,792 $10,579 $1,317 Net charge-offs (recoveries) 3,229 2,688 (821) Total non-performing loans held-in-portfolio 29,747 27,228 27,107 Allowance / non-covered loans held-in-portfolio 0.94% 0.87% 0.72% Financial Condition Highlights (Unaudited) (In thousands) 30-Jun-17 31-Mar-17 30-Jun-16 Cash and money market investments $4,625,318 $3,993,572 $3,150,808 Trading and investment securities 9,726,158 9,511,124 7,583,294 Loans not covered under loss-sharing agreements with the FDIC 22,918,271 22,734,721 22,540,661 Loans covered under loss-sharing agreements with the FDIC 536,341 551,980 607,170 Total assets 41,242,669 40,259,282 37,606,148 Deposits 33,122,033 32,212,579 28,737,856 Borrowings 1,968,419 1,993,886 2,428,752 Liabilities from discontinued operations - - 1,815 Total liabilities 35,964,624 35,069,069 32,246,317 Stockholders’ equity 5,278,045 5,190,213 5,359,831
Total assets increased by $1.0 billion from the first quarter of 2017, driven by:
Total liabilities increased by $0.9 billion from the first quarter of 2017, principally driven by an increase of $0.9 billion in deposits mainly due to an increase in demand deposits from the Puerto Rico public sector at BPPR. Refer to Table G for additional information on deposits.
Stockholders’ equity increased by approximately $87.8 million from the first quarter of 2017, mainly as a result of net income for the quarter of $96.2 million, offset by declared dividends of $25.5 million on common stock and $0.9 million in dividends on preferred stock, and lower unrealized losses on available-for-sale securities by $15.3 million partially due to the reclassification to earnings of the entire unrealized loss of the COFINA bonds which was deemed to be other-than-temporary.
Common equity tier-1 ratio (“CET1”), common equity per share and tangible book value per share were 16.69%, $51.26 and $44.71, respectively at June 30, 2017, compared to 16.34%, $50.41 and $43.84 at March 31, 2017. Refer to Table A for capital ratios.
Cautionary Note Regarding Forward-Looking Statements
The information contained in this press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements may relate to Popular, Inc’s (the “Corporation”, “we”, “us”, “our”) financial condition, results of operations, plans, objectives, future performance and business, including, but not limited to, statements with respect to the adequacy of the allowance for loan losses, delinquency trends, market risk and the impact of interest rate changes, capital market conditions, capital adequacy and liquidity, the anticipated impacts of our acquisition of certain assets and deposits and the effect of legal proceedings and new accounting standards on the Corporation’s financial condition and results of operations. All statements contained herein that are not clearly historical in nature are forward-looking, and the words “anticipate”, “believe”, “continues”, “expect”, “estimate”, “intend”, “project” and similar expressions and future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may” or similar expressions are generally intended to identify forward-looking statements.
Forward-looking statements are not guarantees of future performance are based on management’s current expectations and, by their nature, involve certain risks, uncertainties, estimates and assumptions by management that are difficult to predict. Various factors, some of which are beyond the Corporation’s control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2016, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, and our other filings with the Securities and Exchange Commission for a discussion of some of the risks and important factors that could cause such differences and otherwise affect the Corporation’s future results and financial condition. Those filings are available on the Corporation’s website (www.popular.com) and on the Securities and Exchange Commission website (www.SEC.gov). The Corporation does not undertake to update or revise any forward-looking statement to reflect occurrences or unanticipated events or circumstances that may arise after the date of such statements.
Founded in 1893, Popular, Inc. is the leading banking institution by both assets and deposits in Puerto Rico and ranks among the top 50 U.S. banks by assets. Popular provides retail, mortgage and commercial banking services through its principal banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. In the United States, Popular has established a community-banking franchise providing a broad range of financial services and products with branches in New York, New Jersey and Florida under the name of Popular Community Bank.
Conference Call
Popular will hold a conference call to discuss its financial results today Wednesday, July 26, 2017 at 11:00 a.m. Eastern Time. The call will be open to the public and 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. [There is no charge to access the call.]
A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Friday, August 25, 2017. The replay dial-in is: 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10109994.
An electronic version of this press release can be found at the Corporation’s website: www.popular.com.
Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table A - Selected Ratios and Other Information Table B - Consolidated Statement of Operations Table C - Consolidated Statement of Financial Condition Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER Table E - 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 LoansPOPULAR, INC. Financial Supplement to Second Quarter 2017 Earnings Release Table A - Selected Ratios and Other Information (Unaudited) Quarters ended Six months ended 30-Jun-17 31-Mar-17 30-Jun-16 30-Jun-17 30-Jun-16 Basic EPS $0.94 $0.89 $0.85 $1.83 $1.67 Diluted EPS $0.94 $0.89 $0.85 $1.83 $1.67 Average common shares outstanding 101,601,552 102,932,989 103,245,717 102,263,593 103,217,266 Average common shares outstanding - assuming dilution 101,708,703 103,113,895 103,343,486 102,387,246 103,297,707 Common shares outstanding at end of period 101,986,758 101,956,740 103,703,041 101,986,758 103,703,041 Market value per common share $41.71 $40.73 $29.30 $41.71 $29.30 Market capitalization - (In millions) $4,254 $4,153 $3,038 $4,254 $3,038 Return on average assets 0.94% 0.95% 0.96% 0.95% 0.96% . . Return on average common equity 7.24% 7.13% 6.80% 7.19% 6.69% Net interest margin 4.02% 4.08% 4.31% 4.05% 4.38% Common equity per share $51.26 $50.41 $51.20 $51.26 $51.20 Tangible common book value per common share (non-GAAP) $44.71 $43.84 $44.62 $44.71 $44.62 Tangible common equity to tangible assets (non-GAAP) 11.24% 11.29% 12.53% 11.24% 12.53% Tier 1 capital 16.69% 16.34% 16.29% 16.69% 16.29% Total capital 19.67% 19.34% 19.29% 19.67% 19.29% Tier 1 leverage 10.48% 10.61% 11.29% 10.48% 11.29% Common Equity Tier 1 capital 16.69% 16.34% 16.29% 16.69% 16.29%
POPULAR, INC. Financial Supplement to Second Quarter 2017 Earnings Release Table B - Consolidated Statement of Operations (Unaudited) Quarters ended Variance Quarter ended Variance Six months ended (In thousands, except per share information) 30-Jun-17 31-Mar-17
Q2 2017
vs. Q1 2017
30-Jun-16Q2 2017
vs. Q2 2016
30-Jun-17 30-Jun-16 Interest income: Loans $367,669 $363,136 $4,533 $369,721 $(2,052) $730,805 $732,918 Money market investments 11,131 6,573 4,558 3,889 7,242 17,704 6,752 Investment securities 48,537 44,886 3,651 36,725 11,812 93,423 72,996 Trading account securities 1,396 1,400 (4) 1,875 (479) 2,796 3,564 Total interest income 428,733 415,995 12,738 412,210 16,523 844,728 816,230 Interest expense: Deposits 34,092 33,757 335 30,599 3,493 67,849 60,473 Short-term borrowings 1,115 1,095 20 2,058 (943) 2,210 3,919 Long-term debt 19,047 19,045 2 19,002 45 38,092 38,875 Total interest expense 54,254 53,897 357 51,659 2,595 108,151 103,267 Net interest income 374,479 362,098 12,381 360,551 13,928 736,577 712,963 Provision for loan losses - non-covered loans 49,965 42,057 7,908 39,668 10,297 92,022 87,608 Provision (reversal) for loan losses - covered loans 2,514 (1,359) 3,873 804 1,710 1,155 (2,301) Net interest income after provision for loan losses 322,000 321,400 600 320,079 1,921 643,400 627,656 Service charges on deposit accounts 41,073 39,536 1,537 40,296 777 80,609 80,158 Other service fees 59,168 56,175 2,993 56,945 2,223 115,343 110,327 Mortgage banking activities 10,741 11,369 (628) 16,227 (5,486) 22,110 26,778 Net gain and valuation adjustments on investment securities 19 162 (143) 1,583 (1,564) 181 1,583 Other-than-temporary impairment losses on investment securities (8,299) - (8,299) (209) (8,090) (8,299) (209) Trading account (loss) profit (655) (278) (377) 1,117 (1,772) (933) 955 Net loss on sale of loans, including valuation adjustments on loans held-for-sale - - - - - - (304) Adjustments (expense) to indemnity reserves on loans sold (2,930) (1,966) (964) (5,746) 2,816 (4,896) (9,844) FDIC loss-share expense (475) (8,257) 7,782 (12,576) 12,101 (8,732) (15,722) Other operating income 18,151 19,128 (977) 12,866 5,285 37,279 28,411 Total non-interest income 116,793 115,869 924 110,503 6,290 232,662 222,133 Operating expenses: Personnel costs Salaries 77,703 78,376 (673) 75,792 1,911 156,079 153,090 Commissions, incentives and other bonuses 18,295 20,078 (1,783) 16,982 1,313 38,373 37,751 Pension, postretirement and medical insurance 12,590 11,244 1,346 12,279 311 23,834 25,390 Other personnel costs, including payroll taxes 10,227 15,909 (5,682) 11,655 (1,428) 26,136 27,568 Total personnel costs 118,815 125,607 (6,792) 116,708 2,107 244,422 243,799 Net occupancy expenses 22,265 20,776 1,489 21,714 551 43,041 42,144 Equipment expenses 16,250 15,970 280 15,261 989 32,220 29,809 Other taxes 10,740 10,969 (229) 10,170 570 21,709 20,365 Professional fees Collections, appraisals and other credit related fees 3,779 3,823 (44) 4,974 (1,195) 7,602 9,474 Programming, processing and other technology services 51,569 48,091 3,478 50,232 1,337 99,660 100,096 Legal fees, excluding collections 2,314 3,296 (982) 10,009 (7,695) 5,610 16,263 Other professional fees 15,272 14,040 1,232 15,410 (138) 29,312 30,251 Total professional fees 72,934 69,250 3,684 80,625 (7,691) 142,184 156,084 Communications 5,899 5,949 (50) 6,012 (113) 11,848 12,332 Business promotion 13,366 11,576 1,790 13,705 (339) 24,942 24,815 FDIC deposit insurance 6,172 6,493 (321) 5,362 810 12,665 12,732 Other real estate owned (OREO) expenses 16,670 12,818 3,852 12,980 3,690 29,488 22,121 Credit and debit card processing, volume, interchange and other expenses 6,441 5,532 909 6,617 (176) 11,973 12,339 Other operating expenses Operational losses 7,215 7,536 (321) 7,146 69 14,751 9,807 All other 7,724 16,497 (8,773) 9,752 (2,028) 24,221 18,534 Total other operating expenses 14,939 24,033 (9,094) 16,898 (1,959) 38,972 28,341 Amortization of intangibles 2,344 2,345 (1) 3,097 (753) 4,689 6,211 Total operating expenses 306,835 311,318 (4,483) 309,149 (2,314) 618,153 611,092 Income before income tax 131,958 125,951 6,007 121,433 10,525 257,909 238,697 Income tax expense 35,732 33,006 2,726 32,446 3,286 68,738 64,711 Net income $96,226 $92,945 $3,281 $88,987 $7,239 $189,171 $173,986 Net income applicable to common stock $95,295 $92,014 $3,281 $88,056 $7,239 $187,309 $172,124 Net income per common share - basic $0.94 $0.89 $0.05 $0.85 $0.09 $1.83 $1.67 Net income per common share - diluted $0.94 $0.89 $0.05 $0.85 $0.09 $1.83 $1.67 Dividends Declared per Common Share $0.25 $0.25 $- $0.15 $0.10 $0.50 $0.30Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table C - Consolidated Statement of Financial Condition (Unaudited) Variance Q2 2017 vs. (In thousands) 30-Jun-17 31-Mar-17 30-Jun-16 Q1 2017 Assets: Cash and due from banks $405,688 $340,225 $365,308 $65,463 Money market investments 4,219,630 3,653,347 2,785,500 566,283 Trading account securities, at fair value 50,293 50,985 72,530 (692) Investment securities available-for-sale, at fair value 9,409,402 9,197,527 7,242,676 211,875 Investment securities held-to-maturity, at amortized cost 96,286 96,326 99,525 (40) Other investment securities, at lower of cost or realizable value 170,177 166,286 168,563 3,891 Loans held-for-sale, at lower of cost or fair value 69,797 85,309 122,338 (15,512) Loans held-in-portfolio: Loans not covered under loss-sharing agreements with the FDIC 23,046,078 22,858,556 22,655,877 187,522 Loans covered under loss-sharing agreements with the FDIC 536,341 551,980 607,170 (15,639) Less: Unearned income 127,807 123,835 115,216 3,972 Allowance for loan losses 540,014 544,496 548,720 (4,482) Total loans held-in-portfolio, net 22,914,598 22,742,205 22,599,111 172,393 FDIC loss-share asset 52,583 58,793 214,029 (6,210) Premises and equipment, net 546,986 548,995 535,865 (2,009) Other real estate not covered under loss-sharing agreements with the FDIC 181,096 185,836 177,025 (4,740) Other real estate covered under loss-sharing agreements with the FDIC 25,350 29,926 37,984 (4,576) Accrued income receivable 136,104 128,018 120,979 8,086 Mortgage servicing assets, at fair value 188,728 193,698 203,577 (4,970) Other assets 2,108,296 2,111,806 2,179,060 (3,510) Goodwill 627,294 627,294 631,095 - Other intangible assets 40,361 42,706 50,983 (2,345) Total assets $41,242,669 $40,259,282 $37,606,148 $983,387 Liabilities and Stockholders’ Equity: Liabilities: Deposits: Non-interest bearing $7,481,732 $7,262,328 $6,531,108 $219,404 Interest bearing 25,640,301 24,950,251 22,206,748 690,050 Total deposits 33,122,033 32,212,579 28,737,856 909,454 Federal funds purchased and assets sold under agreements to repurchase 406,385 434,714 821,604 (28,329) Other short-term borrowings 1,200 1,200 31,200 - Notes payable 1,560,834 1,557,972 1,575,948 2,862 Other liabilities 874,172 862,604 1,077,894 11,568 Liabilities from discontinued operations - - 1,815 - Total liabilities 35,964,624 35,069,069 32,246,317 895,555 Stockholders’ equity: Preferred stock 50,160 50,160 50,160 - Common stock 1,041 1,041 1,039 - Surplus 4,263,370 4,261,346 4,232,835 2,024 Retained earnings 1,356,504 1,286,706 1,228,979 69,798 Treasury stock (90,087) (89,128) (7,570) (959) Accumulated other comprehensive loss (302,943) (319,912) (145,612) 16,969 Total stockholders’ equity 5,278,045 5,190,213 5,359,831 87,832 Total liabilities and stockholders’ equity $41,242,669 $40,259,282 $37,606,148 $983,387
Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER (Unaudited) Quarter ended Quarter ended Quarter ended Variance Variance 30-Jun-17 31-Mar-17 30-Jun-16 Q2 2017 vs. Q1 2017 Q2 2017 vs. Q2 2016
($ amounts in millions; yields
not on a taxable equivalent basis)
Average balanceIncome /
Expense
Yield /
Rate
Average balanceIncome /
Expense
Yield /
Rate
Average balanceIncome /
Expense
Yield /
Rate
Average balanceIncome /
Expense
Yield /
Rate
Average balanceIncome /
Expense
Yield /
Rate
Assets: Interest earning assets: Money market, trading and investment securities $14,018 $61.1 1.74 % $12,423 $52.9 1.71 % $10,286 $42.5 1.65 % $1,595 $8.2 0.03%
$3,732 $18.6 0.09 % Loans not covered under loss-sharing agreements with the FDIC: Commercial 9,815 122.2 5.00 9,704 118.8 4.97 9,150 110.9 4.88 111 3.4 0.03 665 11.3 0.12 Construction 812 11.2 5.54 821 10.9 5.41 723 9.7 5.43 (9) 0.3 0.13 89 1.5 0.11 Mortgage 6,518 87.3 5.36 6,606 88.4 5.35 6,743 88.9 5.27 (88) (1.1) 0.01 (225) (1.6) 0.09 Consumer 3,698 97.2 10.55 3,704 95.2 10.43 3,865 99.4 10.34 (6) 2.0 0.12 (167) (2.2) 0.21 Lease financing 727 11.8 6.48 708 11.6 6.54 651 11.0 6.73 19 0.2 (0.06) 76 0.8 (0.25) Total loans (excluding WB loans) 21,570 329.8 6.13 21,543 324.9 6.09 21,132 319.9 6.08 27 4.9 0.04 438 9.9 0.05 WB loans 1,740 37.9 8.73 1,810 38.2 8.53 2,013 49.8 9.94 (70) (0.3) 0.20 (273) (11.9) (1.21) Total loans 23,309 367.7 6.32 23,353 363.1 6.28 23,145 369.7 6.41 (44) 4.6 0.04 164 (2.0) (0.09) Total interest earning assets $37,327 $428.7 4.60 % $35,776 $416.0 4.69
%
$33,431 $412.2 4.95 % $1,551 $12.7 (0.09)
%
$3,896 $16.5 (0.35) % Allowance for loan losses (537) (542) (539) 5 2 Other non-interest earning assets 4,282 4,312 4,479 (30) (197) Total average assets $41,071 $39,546 $37,371 $1,525 $3,700 Liabilities and Stockholders' Equity: Interest bearing deposits: NOW and money market $9,941 $8.9 0.36 % $8,516 $8.6 0.41
%
$7,023 $6.6 0.38 % $1,425 $0.3 (0.05)
%
$2,918 $2.3 (0.02) % Savings 8,134 5.0 0.24 8,041 4.9 0.25 7,487 4.4 0.24 93 0.1 (0.01) 647 0.6 - Time deposits 7,661 20.2 1.06 7,756 20.3 1.06 7,866 19.6 1.00 (95) (0.1) - (205) 0.6 0.06 Total interest bearing deposits 25,736 34.1 0.53 24,313 33.8 0.56 22,376 30.6 0.55 1,423 0.3 (0.03) 3,360 3.5 (0.02) Borrowings 1,936 20.2 4.18 2,025 20.1 4.00 2,307 21.0 3.67 (89) 0.1 0.18 (371) (0.8) 0.51 Total interest bearing liabilities 27,672 54.3 0.79 26,338 53.9 0.83 24,683 51.6 0.84 1,334 0.4 (0.04) 2,989 2.7 (0.05) Net interest spread 3.81 % 3.86
%
4.11 % (0.05)
%
(0.30) % Non-interest bearing deposits 7,204 7,027 6,481 177 723 Other liabilities 869 896 943 (27) (74) Liabilities from discontinued operations - - 2 - (2) Stockholders' equity 5,326 5,285 5,262 41 64 Total average liabilities and stockholders' equity $41,071 $39,546 $37,371 $1,525 $3,700
Net interest income / margin non-
taxable equivalent basis
$374.5 4.02 % $362.1 4.08%
$360.6 4.33 % $12.4 (0.06)
%
$13.9 (0.31) %
Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE (Unaudited) Six months ended Six months ended 30-Jun-17 30-Jun-16 Variance Average Income / Yield / Average Income / Yield / Average Income / Yield / ($ 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 $13,225 $113.9 1.73 % $9,619 $83.3 1.73 % $3,606 $30.6 - % Loans not covered under loss-sharing agreements with the FDIC: Commercial 9,760 241.1 4.98 9,054 221.6 4.92 706 19.5 0.06 Construction 816 22.2 5.47 713 19.0 5.37 103 3.2 0.10 Mortgage 6,562 175.7 5.35 6,786 178.6 5.26 (224) (2.9) 0.09 Consumer 3,701 192.5 10.49 3,836 197.4 10.35 (135) (4.9) 0.14 Lease financing 718 23.4 6.51 641 21.6 6.75 77 1.8 (0.24) Total loans (excluding WB loans) 21,556 654.7 6.11 21,030 638.2 6.09 526 16.5 0.02 WB loans 1,775 76.1 8.63 2,035 94.8 9.34 (260) (18.7) (0.71) Total loans 23,331 730.8 6.30 23,065 733.0 6.38 266 (2.2) (0.08) Total interest earning assets $36,555 $844.7 4.65 % $32,684 $816.3 5.01 % $3,871 $28.4 (0.36) % Allowance for loan losses (539) (538) (1) Other non-interest earning assets 4,297 4,484 (187) Total average assets $40,313 $36,630 $3,683 Liabilities and Stockholders' Equity: Interest bearing deposits: NOW and money market $9,232 $17.4 0.38 % $6,367 $12.2 0.39 % $2,865 $5.2 (0.01) % Savings 8,088 9.9 0.25 7,381 8.7 0.24 707 1.2 0.01 Time deposits 7,708 40.6 1.06 7,962 39.6 1.00 (254) 1.0 0.06 Total interest bearing deposits 25,028 67.8 0.55 21,710 60.5 0.56 3,318 7.3 (0.01) Borrowings 1,980 40.3 4.08 2,374 42.8 3.61 (394) (2.5) 0.47 Total interest bearing liabilities 27,008 108.2 0.81 24,084 103.3 0.86 2,924 4.9 (0.05) Net interest spread 3.84 % 4.15 % (0.31) % Non-interest bearing deposits 7,116 6,387 729 Other liabilities 883 930 (47) Liabilities from discontinued operations - 2 (2) Stockholders' equity 5,306 5,227 79 Total average liabilities and stockholders' equity $40,313 $36,630 $3,683 Net interest income / margin non-taxable equivalent basis $736.6 4.05 % $713.0 4.38 % $23.6 (0.33) %
Financial Supplement to Second Quarter 2017 Earnings Release Table F - Mortgage Banking Activities and Other Service Fees (Unaudited) Mortgage Banking Activities Variance Quarters ended
Q2 2017
vs.
Q2 2017
vs.
Six months ended Variance (In thousands) 30-Jun-17 31-Mar-17 30-Jun-16 Q1 2017 Q2 2016 30-Jun-17 30-Jun-162017 vs.
2016
Mortgage servicing fees, net of fair value adjustments: Mortgage servicing fees $13,021 $13,452 $14,675 $(431) $(1,654) $26,473 $29,477 $(3,004) Mortgage servicing rights fair value adjustments (8,046) (5,954) (4,340) (2,092) (3,706) (14,000) (12,817) (1,183) Total mortgage servicing fees, net of fair value adjustments 4,975 7,498 10,335 (2,523) (5,360) 12,473 16,660 (4,187) Net gain on sale of loans, including valuation on loans held-for-sale 7,250 5,381 8,474 1,869 (1,224) 12,631 15,584 (2,953) Trading account loss: Unrealized gains (losses) on outstanding derivative positions 83 (40) (59) 123 142 43 (139) 182 Realized losses on closed derivative positions (1,567) (1,470) (2,523) (97) 956 (3,037) (5,327) 2,290 Total trading account loss (1,484) (1,510) (2,582) 26 1,098 (2,994) (5,466) 2,472 Total mortgage banking activities $10,741 $11,369 $16,227 $(628) $(5,486) $22,110 $26,778 $(4,668) Other Service Fees Variance Quarters endedQ2 2017
vs.
Q2 2017
vs.
Six months ended Variance (In thousands) 30-Jun-17 31-Mar-17 30-Jun-16 Q1 2017 Q2 2016 30-Jun-17 30-Jun-16 2017 vs. 2016 Other service fees: Debit card fees $11,576 $11,543 $11,382 $33 $194 $23,119 $22,669 $450 Insurance fees 13,529 12,805 13,885 724 (356) 26,334 26,735 (401) Credit card fees 19,305 18,276 17,700 1,029 1,605 37,581 34,558 3,023 Sale and administration of investment products 5,799 5,082 5,417 717 382 10,881 10,256 625 Trust fees 4,903 4,955 4,827 (52) 76 9,858 9,063 795 Other fees 4,056 3,514 3,734 542 322 7,570 7,046 524 Total other service fees $59,168 $56,175 $56,945 $2,993 $2,223 $115,343 $110,327 $5,016Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table G - Loans and Deposits (Unaudited) Loans - Ending Balances Variance (In thousands) 30-Jun-17 31-Mar-17 30-Jun-16
Q2 2017 vs.
Q1 2017
Q2 2017 vs.
Q2 2016
Loans not covered under FDIC loss-sharing agreements: Commercial $11,047,359 $10,811,700 $10,359,815 $235,659 $687,544 Construction 784,389 831,305 717,332 (46,916) 67,057 Legacy [1] 39,067 40,688 49,709 (1,621) (10,642) Lease financing 743,603 719,643 664,094 23,960 79,509 Mortgage 6,552,796 6,627,987 6,864,118 (75,191) (311,322) Consumer 3,751,057 3,703,398 3,885,593 47,659 (134,536) Total non-covered loans held-in-portfolio $22,918,271 $22,734,721 $22,540,661 $183,550 $377,610 Loans covered under FDIC loss-sharing agreements 536,341 551,980 607,170 (15,639) (70,829) Total loans held-in-portfolio $23,454,612 $23,286,701 $23,147,831 $167,911 $306,781 Loans held-for-sale: Commercial $- $- $39,544 $- $(39,544) Mortgage 69,797 85,309 82,794 (15,512) (12,997) Total loans held-for-sale $69,797 $85,309 $122,338 $(15,512) $(52,541) Total loans $23,524,409 $23,372,010 $23,270,169 $152,399 $254,240 [1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment. Deposits - Ending Balances Variance (In thousands) 30-Jun-17 31-Mar-17 30-Jun-16 Q2 2017 vs. Q1 2017 Q2 2017 vs.Q2 2016 Demand deposits [1] $11,194,860 $10,136,435 $8,106,291 $1,058,425 $3,088,569 Savings, NOW and money market deposits (non-brokered) 13,946,680 13,939,838 12,289,793 6,842 1,656,887 Savings, NOW and money market deposits (brokered) 424,303 423,339 387,026 964 37,277 Time deposits (non-brokered) 7,361,587 7,508,726 7,570,673 (147,139) (209,086) Time deposits (brokered CDs) 194,603 204,241 384,073 (9,638) (189,470) Total deposits $33,122,033 $32,212,579 $28,737,856 $909,454 $4,384,177 [1] Includes interest and non-interest bearing demand deposits.
Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table H - Non-Performing Assets (Unaudited) Variance (Dollars in thousands) 30-Jun-17
As a % of
loans HIP by
category
31-Mar-17As a % of
loans HIP by
category
30-Jun-16As a % of
loans HIP by
category
Q2 2017 vs.
Q1 2017
Q2 2017 vs.
Q2 2016
Non-accrual loans: Commercial $166,864 1.5 % $179,241 1.7 % $175,615 1.7 % $(12,377) $(8,751) Construction - - - - 2,523 0.4 - (2,523) Legacy [1] 3,360 8.6 3,335 8.2 3,839 7.7 25 (479) Lease financing 2,065 0.3 2,444 0.3 3,019 0.5 (379) (954) Mortgage 318,922 4.9 331,339 5.0 338,048 4.9 (12,417) (19,126) Consumer 55,918 1.5 59,254 1.6 54,695 1.4 (3,336) 1,223 Total non-performing loans held-in- portfolio, excluding covered loans 547,129 2.4 % 575,613 2.5 % 577,739 2.6 % (28,484) (30,610) Non-performing loans held-for-sale [2] - - 39,544 - (39,544) Other real estate owned (“OREO”), excluding covered OREO 181,096 185,836 177,025 (4,740) 4,071 Total non-performing assets, excluding covered assets 728,225 761,449 794,308 (33,224) (66,083) Covered loans and OREO 29,376 33,866 41,466 (4,490) (12,090) Total non-performing assets $757,601 $795,315 $835,774 $(37,714) $(78,173) Accruing loans past due 90 days or more [3] $391,569 $408,346 $413,319 $(16,777) $(21,750) Ratios excluding covered loans: Non-performing loans held-in-portfolio to loans held-in-portfolio 2.39 % 2.53 % 2.56 % Allowance for loan losses to loans held-in-portfolio 2.22 2.27 2.30 Allowance for loan losses to non-performing loans, excluding loans held-for-sale 93.07 89.77 89.68 Ratios including covered loans: Non-performing assets to total assets 1.84 % 1.98 % 2.22 % Non-performing loans held-in-portfolio to loans held-in-portfolio 2.35 2.49 2.51 Allowance for loan losses to loans held-in-portfolio 2.30 2.34 2.37 Allowance for loan losses to non-performing loans, excluding loans held-for-sale 97.98 93.95 94.41 [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 June 30, 2017 and March 31, 2017 (June 30, 2016 - $40 million in commercial 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 $160 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of June 30, 2017 (March 31, 2017 - $173 million; June 30, 2016 - $149 million). Furthermore, the Corporation has approximately $56.6 million in reverse mortgage loans which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation's policy to exclude these balances from non-performing assets (March 31, 2017 - $58.6 million; June 30, 2016 - $62.8 million).Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table I - Activity in Non-Performing Loans (Unaudited) Commercial loans held-in-portfolio: Quarter ended Quarter ended 30-Jun-17 31-Mar-17 (In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc. Beginning balance NPLs $175,477 $3,764 $179,241 $159,655 $3,693 $163,348 Plus: New non-performing loans 13,809 1,027 14,836 33,600 1,355 34,955 Advances on existing non-performing loans - 4 4 - - - Less: Non-performing loans transferred to OREO (2,442) - (2,442) (3,510) - (3,510) Non-performing loans charged-off (19,184) (22) (19,206) (5,153) (46) (5,199) Loans returned to accrual status / loan collections (4,797) (772) (5,569) (9,115) (1,238) (10,353) Ending balance NPLs $162,863 $4,001 $166,864 $175,477 $3,764 $179,241 Mortgage loans held-in-portfolio: Quarter ended Quarter ended 30-Jun-17 31-Mar-17 (In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc. Beginning balance NPLs $319,450 $11,889 $331,339 $318,194 $11,713 $329,907 Plus: New non-performing loans 81,582 4,990 86,572 82,149 4,753 86,902 Less: Non-performing loans transferred to OREO (12,229) - (12,229) (11,256) (46) (11,302) Non-performing loans charged-off (14,123) (580) (14,703) (9,428) (69) (9,497) Loans returned to accrual status / loan collections (68,038) (4,019) (72,057) (60,209) (4,462) (64,671) Ending balance NPLs $306,642 $12,280 $318,922 $319,450 $11,889 $331,339 Legacy loans held-in-portfolio: Quarter ended Quarter ended 30-Jun-17 31-Mar-17 (In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc. Beginning balance NPLs $- $3,335 $3,335 $- $3,337 $3,337 Plus: New non-performing loans - 114 114 - - - Advances on existing non-performing loans - 8 8 - 47 47 Less: Non-performing loans charged-off - (11) (11) - (2) (2) Loans returned to accrual status / loan collections - (86) (86) - (47) (47) Ending balance NPLs $- $3,360 $3,360 $- $3,335 $3,335 Total non-performing loans held-in-portfolio (excluding consumer and covered loans): Quarter ended Quarter ended 30-Jun-17 31-Mar-17 (In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc. Beginning balance NPLs $494,927 $18,988 $513,915 $477,849 $18,743 $496,592 Plus: New non-performing loans 95,391 6,131 101,522 115,749 6,108 121,857 Advances on existing non-performing loans - 12 12 - 47 47 Less: Non-performing loans transferred to OREO (14,671) - (14,671) (14,766) (46) (14,812) Non-performing loans charged-off (33,307) (613) (33,920) (14,581) (117) (14,698) Loans returned to accrual status / loan collections (72,835) (4,877) (77,712) (69,324) (5,747) (75,071) Ending balance NPLs $469,505 $19,641 $489,146 $494,927 $18,988 $513,915
Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios (Unaudited) Quarter ended Quarter ended Quarter ended 30-Jun-17 31-Mar-17 30-Jun-16 (Dollars in thousands)
Non-covered
loans
Covered
loans
TotalNon-covered
loans
Covered
loans
TotalNon-covered
loans
Covered
loans
Total Balance at beginning of period $516,725 $27,771 $544,496 $510,301 $30,350 $540,651 $508,427 $30,045 $538,472 Provision (reversal) for loan losses 49,965 2,514 52,479 42,057 (1,359) 40,698 39,668 804 40,472 566,690 30,285 596,975 552,358 28,991 581,349 548,095 30,849 578,944 Net loans charged-off (recovered): BPPR Commercial [4] 11,745 - 11,745 2,638 - 2,638 5,647 - 5,647 Construction (2,370) - (2,370) (144) - (144) (3,226) - (3,226) Lease financing 1,438 - 1,438 813 - 813 434 - 434 Mortgage 20,753 (538) 20,215 13,555 1,128 14,683 13,464 699 14,163 Consumer 22,689 15 22,704 16,083 92 16,175 19,903 (431) 19,472 Total BPPR 54,255 (523) 53,732 32,945 1,220 34,165 36,222 268 36,490 BPNA Commercial (643) - (643) (463) - (463) (1,265) - (1,265) Legacy [1] (298) - (298) (488) - (488) (893) - (893) Mortgage 462 - 462 (104) - (104) 16 - 16 Consumer 3,708 - 3,708 3,743 - 3,743 1,321 - 1,321 Total BPNA 3,229 - 3,229 2,688 - 2,688 (821) - (821) Total loans charged-off - Popular, Inc. 57,484 (523) 56,961 35,633 1,220 36,853 35,401 268 35,669 Net recoveries [2] - - - - - - 5,445 - 5,445 Balance at end of period $509,206 $30,808 $540,014 $516,725 $27,771 $544,496 $518,139 $30,581 $548,720 POPULAR, INC. Annualized net charge-offs to average loans held-in-portfolio 1.01 % 0.98 % 0.63 % 0.63 % 0.63 % 0.62 % Provision for loan losses to net charge-offs [3] 0.87 x 0.92 x 1.18 x 1.10 x 1.27 x 1.29 x BPPR Annualized net charge-offs to average loans held-in-portfolio 1.28 % 1.23 % 0.77 % 0.78 % 0.83 % 0.81 % Provision for loan losses to net charge-offs [3] 0.78 x 0.83 x 0.96 x 0.88 x 1.21 x 1.22 x BPNA Annualized net charge-offs (recoveries) to average loans held-in-portfolio 0.22 % 0.19 % (0.06) % Provision for loan losses to net charge-offs (recoveries) 2.41 x 3.94 x (1.60) x [1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment. [2] Net recoveries are related to loans sold or reclassified to held-for-sale. [3] Excluding provision for loan losses and net recoveries related to loans sold. [4] Includes the elimination of an incremental $6.0 million charge-off related to the inter-company transfer of a loan between BPPR and Popular, Inc., its bank holding company, the impact of which is eliminated in the consolidated results of the Corporation in accordance with U.S. GAAP.Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED (Unaudited) 30-Jun-17 (Dollars in thousands) Commercial Construction Legacy [2] Mortgage Lease financing Consumer Total [3] Specific ALLL $41,982 $- $- $50,148 $487 $22,693 $115,310 Impaired loans [1] $333,936 $- $- $514,140 $1,668 $107,027 $956,771 Specific ALLL to impaired loans [1] 12.57 % - % - % 9.75 % 29.20 % 21.20 % 12.05 % General ALLL $160,526 $8,001 $993 $101,840 $7,516 $115,020 $393,896 Loans held-in-portfolio, excluding impaired loans [1] $10,713,423 $784,389 $39,067 $6,038,656 $741,935 $3,644,030 $21,961,500 General ALLL to loans held-in-portfolio, excluding impaired loans [1] 1.50 % 1.02 % 2.54 % 1.69 % 1.01 % 3.16 % 1.79 % Total ALLL $202,508 $8,001 $993 $151,988 $8,003 $137,713 $509,206 Total non-covered loans held-in-portfolio [1] $11,047,359 $784,389 $39,067 $6,552,796 $743,603 $3,751,057 $22,918,271 ALLL to loans held-in-portfolio [1] 1.83 % 1.02 % 2.54 % 2.32 % 1.08 % 3.67 % 2.22 % [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, 2017 the general allowance on the covered loans amounted to $30.8 million. 31-Mar-17 (Dollars in thousands) Commercial Construction Legacy [2] Mortgage Lease financing Consumer Total [3] Specific ALLL $51,276 $- $- $43,264 $522 $23,010 $118,072 Impaired loans [1] $348,823 $- $- $510,568 $1,803 $109,016 $970,210 Specific ALLL to impaired loans [1] 14.70 % - % - % 8.47 % 28.95 % 21.11 % 12.17 % General ALLL $157,408 $9,997 $1,166 $105,955 $7,375 $116,752 $398,653 Loans held-in-portfolio, excluding impaired loans [1] $10,462,877 $831,305 $40,688 $6,117,419 $717,840 $3,594,382 $21,764,511 General ALLL to loans held-in-portfolio, excluding impaired loans [1] 1.50 % 1.20 % 2.87 % 1.73 % 1.03 % 3.25 % 1.83 % Total ALLL $208,684 $9,997 $1,166 $149,219 $7,897 $139,762 $516,725 Total non-covered loans held-in-portfolio [1] $10,811,700 $831,305 $40,688 $6,627,987 $719,643 $3,703,398 $22,734,721 ALLL to loans held-in-portfolio [1] 1.93 % 1.20 % 2.87 % 2.25 % 1.10 % 3.77 % 2.27 % [1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. [2] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment. [3] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of March 31, 2017 the general allowance on the covered loans amounted to $27.8 million. Variance (Dollars in thousands) Commercial Construction Legacy Mortgage Lease financing Consumer Total Specific ALLL $(9,294) $- $- $6,884 $(35) $(317) $(2,762) Impaired loans $(14,887) $- $- $3,572 $(135) $(1,989) $(13,439) General ALLL $3,118 $(1,996) $(173) $(4,115) $141 $(1,732) $(4,757) Loans held-in-portfolio, excluding impaired loans $250,546 $(46,916) $(1,621) $(78,763) $24,095 $49,648 $196,989 Total ALLL $(6,176) $(1,996) $(173) $2,769 $106 $(2,049) $(7,519) Total non-covered loans held-in-portfolio $235,659 $(46,916) $(1,621) $(75,191) $23,960 $47,659 $183,550
Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS (Unaudited) 30-Jun-17 Puerto Rico (In thousands) Commercial Construction Mortgage Lease financing Consumer Total Allowance for credit losses: Specific ALLL non-covered loans $41,982 $- $47,954 $487 $21,999 $112,422 General ALLL non-covered loans 132,207 1,473 99,912 7,516 100,905 342,013 ALLL - non-covered loans 174,189 1,473 147,866 8,003 122,904 454,435 Specific ALLL covered loans - - - - - - General ALLL covered loans - - 30,284 - 524 30,808 ALLL - covered loans - - 30,284 - 524 30,808 Total ALLL $174,189 $1,473 $178,150 $8,003 $123,428 $485,243 Loans held-in-portfolio: Impaired non-covered loans $333,936 $- $505,244 $1,668 $103,798 $944,646 Non-covered loans held-in-portfolio, excluding impaired loans 6,822,150 96,904 5,313,039 741,935 3,157,991 16,132,019 Non-covered loans held-in-portfolio 7,156,086 96,904 5,818,283 743,603 3,261,789 17,076,665 Impaired covered loans - - - - - - Covered loans held-in-portfolio, excluding impaired loans - - 521,066 - 15,275 536,341 Covered loans held-in-portfolio - - 521,066 - 15,275 536,341 Total loans held-in-portfolio $7,156,086 $96,904 $6,339,349 $743,603 $3,277,064 $17,613,006 31-Mar-17 Puerto Rico (In thousands) Commercial Construction Mortgage Lease financing Consumer Total Allowance for credit losses: Specific ALLL non-covered loans $51,276 $- $41,067 $522 $22,331 $115,196 General ALLL non-covered loans 136,355 1,961 103,870 7,375 101,760 351,321 ALLL - non-covered loans 187,631 1,961 144,937 7,897 124,091 466,517 Specific ALLL covered loans - - - - - - General ALLL covered loans - - 27,341 - 430 27,771 ALLL - covered loans - - 27,341 - 430 27,771 Total ALLL $187,631 $1,961 $172,278 $7,897 $124,521 $494,288 Loans held-in-portfolio: Impaired non-covered loans $348,823 $- $501,647 $1,803 $106,236 $958,509 Non-covered loans held-in-portfolio, excluding impaired loans 6,715,507 95,459 5,368,071 717,840 3,120,843 16,017,720 Non-covered loans held-in-portfolio 7,064,330 95,459 5,869,718 719,643 3,227,079 16,976,229 Impaired covered loans - - - - - - Covered loans held-in-portfolio, excluding impaired loans - - 536,287 - 15,693 551,980 Covered loans held-in-portfolio - - 536,287 - 15,693 551,980 Total loans held-in-portfolio $7,064,330 $95,459 $6,406,005 $719,643 $3,242,772 $17,528,209 Variance (In thousands) Commercial Construction Mortgage Lease financing Consumer Total Allowance for credit losses: Specific ALLL non-covered loans $(9,294) $- $6,887 $(35) $(332) $(2,774) General ALLL non-covered loans (4,148) (488) (3,958) 141 (855) (9,308) ALLL - non-covered loans (13,442) (488) 2,929 106 (1,187) (12,082) Specific ALLL covered loans - - - - - - General ALLL covered loans - - 2,943 - 94 3,037 ALLL - covered loans - - 2,943 - 94 3,037 Total ALLL $(13,442) $(488) $5,872 $106 $(1,093) $(9,045) Loans held-in-portfolio: Impaired non-covered loans $(14,887) $- $3,597 $(135) $(2,438) $(13,863) Non-covered loans held-in-portfolio, excluding impaired loans 106,643 1,445 (55,032) 24,095 37,148 114,299 Non-covered loans held-in-portfolio 91,756 1,445 (51,435) 23,960 34,710 100,436 Impaired covered loans - - - - - - Covered loans held-in-portfolio, excluding impaired loans - - (15,221) - (418) (15,639) Covered loans held-in-portfolio - - (15,221) - (418) (15,639) Total loans held-in-portfolio $91,756 $1,445 $(66,656) $23,960 $34,292 $84,797
Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS (Unaudited) 30-Jun-17 U.S. Mainland (In thousands) Commercial Construction Legacy Mortgage Consumer Total Allowance for credit losses: Specific ALLL $- $- $- $2,194 $694 $2,888 General ALLL 28,319 6,528 993 1,928 14,115 51,883 Total ALLL $28,319 $6,528 $993 $4,122 $14,809 $54,771 Loans held-in-portfolio: Impaired loans $- $- $- $8,896 $3,229 $12,125 Loans held-in-portfolio, excluding impaired loans 3,891,273 687,485 39,067 725,617 486,039 5,829,481 Total loans held-in-portfolio $3,891,273 $687,485 $39,067 $734,513 $489,268 $5,841,606 31-Mar-17 U.S. Mainland (In thousands) Commercial Construction Legacy Mortgage Consumer Total Allowance for credit losses: Specific ALLL $- $- $- $2,197 $679 $2,876 General ALLL 21,053 8,036 1,166 2,085 14,992 47,332 Total ALLL $21,053 $8,036 $1,166 $4,282 $15,671 $50,208 Loans held-in-portfolio: Impaired loans $- $- $- $8,921 $2,780 $11,701 Loans held-in-portfolio, excluding impaired loans 3,747,370 735,846 40,688 749,348 473,539 5,746,791 Total loans held-in-portfolio $3,747,370 $735,846 $40,688 $758,269 $476,319 $5,758,492 Variance (In thousands) Commercial Construction Legacy Mortgage Consumer Total Allowance for credit losses: Specific ALLL $- $- $- $(3) $15 $12 General ALLL 7,266 (1,508) (173) (157) (877) 4,551 Total ALLL $7,266 $(1,508) $(173) $(160) $(862) $4,563 Loans held-in-portfolio: Impaired loans $- $- $- $(25) $449 $424 Loans held-in-portfolio, excluding impaired loans 143,903 (48,361) (1,621) (23,731) 12,500 82,690 Total loans held-in-portfolio $143,903 $(48,361) $(1,621) $(23,756) $12,949 $83,114
Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table N - Reconciliation to GAAP Financial Measures (Unaudited) (In thousands, except share or per share information) 30-Jun-17 31-Mar-17 30-Jun-16 Total stockholders’ equity $5,278,045 $5,190,213 $5,359,831 Less: Preferred stock (50,160) (50,160) (50,160) $5,227,885 $5,140,053 $5,309,671 Common shares outstanding at end of period 101,986,758 101,956,740 103,703,041 Common equity per share $51.26 $50.41 $51.20 Total stockholders’ equity $5,278,045 $5,190,213 $5,359,831 Less: Preferred stock (50,160) (50,160) (50,160) Less: Goodwill (627,294) (627,294) (631,095) Less: Other intangibles (40,361) (42,706) (50,983) Total tangible common equity $4,560,230 $4,470,053 $4,627,593 Total assets $41,242,669 $40,259,282 $37,606,148 Less: Goodwill (627,294) (627,294) (631,095) Less: Other intangibles (40,361) (42,706) (50,983) Total tangible assets $40,575,014 $39,589,282 $36,924,070 Tangible common equity to tangible assets 11.24 % 11.29 % 12.53 % Common shares outstanding at end of period 101,986,758 101,956,740 103,703,041 Tangible book value per common share $44.71 $43.84 $44.62
Popular, Inc. Financial Supplement to Second Quarter 2017 Earnings Release Table O - Financial Information - Westernbank Loans (Unaudited) Revenues (Expenses) Quarters ended (In thousands) 30-Jun-17 31-Mar-17 Variance Interest income on WB loans $37,900 $38,182 $(282) FDIC loss-share expense: Accretion (amortization) of indemnification asset 147 (776) 923 80% mirror accounting on credit impairment losses [1] 2,126 148 1,978 80% mirror accounting on reimbursable expenses 723 921 (198) 80% mirror accounting on recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC (400) 4,833 (5,233) Change in true-up payment obligation (3,125) (7,385) 4,260 Other 54 (5,998) 6,052 Total FDIC loss-share expense (475) (8,257) 7,782 Total income 37,425 29,925 7,500 Reversal of provision for loan losses- WB loans [2] (417) (499) 82 Total income less reversal of provision for loan losses $37,842 $30,424 $7,418 [1] Reductions in expected cash flows for ASC 310-30 loans, which may impact the provision for loan losses, may consider reductions in both principal and interest cash flow expectations. The amount covered under the FDIC loss-sharing agreement for interest not collected from borrowers is limited under the agreement (approximately 90 days); accordingly, these amounts are not subject fully to the 80% mirror accounting. [2] Includes the elimination of an incremental $6.0 million provision for loan losses related to the inter-company transfer of a loan between BPPR and Popular, Inc., its bank holding company, the impact of which is eliminated in the consolidated results of the Corporation in accordance with U.S. GAAP. Non-personnel operating expenses Quarters ended [1][2] (In thousands) 30-Jun-17 31-Mar-17 Variance Professional fees $735 $(2,635) $3,370 OREO expenses 3,166 3,033 133 Other operating expenses 1,685 1,615 70 Total operating expenses $5,586 $2,013 $3,573 [1] Includes expenses related to loans subject, and not subject, to the FDIC loss-sharing agreements. [2] Expense reimbursements from the FDIC may be recorded with a time lag, since these are claimed upon the event of loss or charge-off of the loans which may occur in a subsequent period. Quarterly average assets Quarters ended (In millions) 30-Jun-17 31-Mar-17 Variance Loans $1,740 $1,810 $(70) FDIC loss-share asset 54 44 10 Activity in the carrying amount and accretable yield of loans accounted for under ASC 310-30 Quarters ended 30-Jun-17 31-Mar-17 (In thousands) Accretable yield
Carrying amount
of loans
Accretable yield
Carrying amount
of loans
Beginning balance $981,206 $1,688,900 $1,010,087 $1,738,329 Accretion (amortization) (36,488) 36,488 (36,892) 36,892 Changes in expected cash flows (2,050) - 8,011 - Collections / loan sales / charge-offs - (107,601) - (86,321) Ending balance[1] 942,668 1,617,787 981,206 1,688,900 Allowance for loan losses - ASC 310-30 loans - (65,674) - (66,544) Ending balance, net of allowance for loan losses $942,668 $1,552,114 $981,206 $1,622,356 [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 $526 million as of June 30, 2017 and $542 million as of March 31, 2017. Activity in the carrying amount of the FDIC indemnity asset Quarters ended (In thousands) 30-Jun-17 31-Mar-17 Balance at beginning of period $64,077 $69,334 Accretion (amortization) 147 (776) Credit impairment losses to be covered under loss-sharing agreements 2,126 148 Reimbursable expenses to be covered under loss-sharing agreements 723 921 Net payments from FDIC under loss-sharing agreements (14,003) - Other adjustments attributable to FDIC loss-sharing agreements - (5,550) Balance at end of period 53,070 64,077 Balance due to the FDIC for recoveries on covered assets (487) (5,284) Net balance of indemnity asset and amounts due from the FDIC $52,583 $58,793 Activity in the remaining FDIC loss-share asset accretion (amortization) Quarters ended (In thousands) 30-Jun-17 31-Mar-17 Balance at beginning of period [1] $3,929 $4,812 Accretion (amortization) [2] 147 (776) Impact of change in projected losses (4,801) (107) Balance at end of period $(725) $3,929 [1] Positive balance represents negative discount (debit to assets), while a negative balance represents a discount (credit to assets). [2] Amortization results in a negative impact to non-interest income, while accretion results in a positive impact to non-interest income, particularly FDIC loss-share expense.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170726005036/en/
Popular, Inc.Investor Relations:Brett Scheiner, 212-417-6721Investor Relations OfficerBScheiner@BPOP.comorMedia Relations:Teruca Rullán, 787-281-5170Mobile: 917-679-3596Senior Vice President, Corporate Communications
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