Exhibit 99.1
Popular, Inc. Announces First Quarter Financial Results
- Net income of $92.9 million for the first quarter of 2017
- Net interest margin of 4.08% in Q1 2017, compared to 4.02% in Q4 2016
- Credit Quality (excluding covered loans):
- Non-performing loans held-in-portfolio (NPLs) increased by $17.7 million from Q4 2016; NPLs to loans ratio stable at 2.5% from Q4 2016;
- Net charge-offs (NCOs) decreased by $20.6 million; NCOs at 0.63% of average loans held-in-portfolio vs. 1.00% in Q4 2016;
- Allowance for loan losses of $516.7 million vs. $510.3 million in Q4 2016; Allowance for loan losses to loans held-in-portfolio at 2.27% vs. 2.24% in Q4 2016;
- Allowance for loan losses to NPLs at 89.8% vs. 91.5% in Q4 2016.
- Common Equity Tier 1 ratio of 16.33%, Common Equity per Share of $50.41 and Tangible Book Value per Share of $43.84 at March 31, 2017
SAN JUAN, Puerto Rico--(BUSINESS WIRE)--April 25, 2017--Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported a net income of $92.9 million for the quarter ended March 31, 2017, compared to net loss of $4.1 million for the quarter ended December 31, 2016. The results for the fourth quarter of 2016 reflect an after-tax charge amounting to $87 million, related to the unfavorable award under the portfolio sales arbitration with the FDIC, as receiver.
Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: “We are pleased to start 2017 generating strong revenues and stable credit quality, despite the challenges in our local market. We also completed a $75 million stock repurchase in the period and remain encouraged by our continued growth in the U.S.”
| Earnings Highlights |
| | | | | | |
| (Unaudited) | | Quarters ended |
| (Dollars in thousands, except per share information) | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 |
| Net interest income | | $362,098 | | $355,405 | | $352,412 |
| Provision for loan losses – non-covered loans | | 42,057 | | 40,924 | | 47,940 |
| Provision (reversal of provision) for loan losses – covered loans [1] | | (1,359) | | 441 | | (3,105) |
| Net interest income after provision for loan losses | | 321,400 | | 314,040 | | 307,577 |
| FDIC loss-share expense | | (8,257) | | (130,334) | | (3,146) |
| Other non-interest income | | 124,126 | | 130,159 | | 114,776 |
| Operating expenses | | 311,318 | | 320,871 | | 301,943 |
| Income (loss) from continuing operations before income tax | | 125,951 | | (7,006) | | 117,264 |
| Income tax expense (benefit) | | 33,006 | | (1,766) | | 32,265 |
| Income (loss) from continuing operations | | 92,945 | | (5,240) | | 84,999 |
| Income from discontinued operations, net of tax | | - | | 1,135 | | - |
| Net income (loss) | | $92,945 | | $(4,105) | | $84,999 |
| Net income (loss) applicable to common stock | | $92,014 | | $(5,036) | | $84,068 |
| Net income (loss) per common share from continuing operations - Basic | | $0.89 | | $(0.06) | | $0.81 |
| Net income (loss) per common share from continuing operations - Diluted | | $0.89 | | $(0.06) | | $0.81 |
| 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 FDIC loss sharing agreement. |
Significant Events
During the quarter ended March 31, 2017, the Corporation completed the previously announced common stock repurchase plan of $75 million, acquiring 1,847,372 shares at a price of $40.60. The plan was completed under a privately negotiated accelerated share repurchase transaction (“ASR”). The Corporation recognized $79.5 million in treasury stock, based on the stock’s spot price, offset by a $4.5 million adjustment to capital surplus resulting from the decline in the Corporation’s stock price during the term of the ASR.
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.
No adjustments are reflected for the first quarter of 2017. The following tables reflect the results of operations for the fourth quarter of 2016, with adjustments to exclude the impact of certain events to arrive at the adjusted net income.
Adjusted Net Income - Reconciliation to GAAP Financial Measures
| (Unaudited) |
| (In thousands) | | 31-Dec-16 |
| | | Pre-tax | | Income tax effect | | | Impact on net income |
| U.S. GAAP Net loss | | | | | | | $(4,105) |
| Non-GAAP Adjustments: | | | | | | | |
| FDIC arbitration award[1] | | 116,833 | | (30,123) | [3] | | 86,710 |
| Other FDIC - LSA adjustments[2] | | 9,874 | | (2,797) | [3] | | 7,077 |
| Income from discontinued operations[4] | | (2,015) | | 880 | | | (1,135) |
| Adjusted net income (Non-GAAP) | | | | | | | $88,547 |
| [1]Represents the arbitration decision denying BPPR's request for reimbursement in certain shared loss claims. |
| [2]Additional adjustments, including prior period recoveries, related to restructured commercial loans to reduce the indemnification asset to its expected realizable value. |
| [3]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%. Other items related to the FDIC loss-sharing agreements are subject to the statutory tax rate of 39%. |
| [4]Represents income from discontinued operations associated with the BPNA reorganization. |
Net interest income
Net interest income for the quarter ended March 31, 2017 was $362.1 million, compared to $355.4 million for the previous quarter. The impact of having two fewer days in the quarter had a negative impact in the net interest income of $4.9 million. Net interest margin was 4.08% for the quarter compared to 4.02% for the previous quarter.
The increase in net interest income was mainly related to:
- Higher income from money market and investment securities by $5.1 million, or 14 basis points, due to higher volume and yields, particularly on U.S. Treasuries and mortgage-backed securities related to purchases during the quarter and the increase in Fed funds rates on December, 2016 and March, 2017;
- Higher income from commercial loans by $2.3 million, or 6 basis points, driven by loan growth in the U.S. and higher yields at BPPR mainly due to the impact on the variable rate portfolio of the increase in market rates in the recent months, partially offset by two fewer days as previously mentioned; and
- Lower interest expense from time deposits by $1.3 million, or 4 basis points, mainly from lower average balances and the impact of an unfavorable adjustment on equity linked deposits at BPPR recorded during the previous quarter.
These positive variances were partially offset by:
- Lower income from consumer loans by $2.1 million driven by lower average balances both at BPPR and BPNA, partially offset by higher yield resulting from variable rate loans and the re-pricing, renewals and acquisitions of consumer loans in a higher interest rate environment; and
- Lower income from the Westernbank (“WB”) loan portfolio by $1.4 million, or 3 basis points, due to normal run-off and as a result of the quarterly recast process.
BPPR’s net interest income amounted to $310.2 million for the quarter ended March 31, 2017, compared to $305.4 million for the previous quarter. The increase of $4.8 million in net interest income was mainly due to higher income from money market and investment securities, higher yield from commercial loans and lower cost of time deposits, as discussed above, partially offset by lower income from WB loans and consumer loans. The net interest margin for the first quarter was 4.46%, an increase of 7 basis points when compared to 4.39% for the previous quarter. The deployment of liquidity in investment securities and the impact of higher rates resulting from recent market rate movements, had a positive impact on the net interest income. P.R. earning assets yielded 4.81%, compared to 4.77% in the previous quarter, while the cost of interest bearing liabilities was 0.50%, compared to 0.54% in the previous quarter.
BPNA’s net interest income was $67.1 million, compared to $65.3 million in the previous quarter mainly due to higher income from commercial and construction loans, partially offset by lower income from lower volume of consumer loans and higher deposit costs. Net interest margin increased 5 basis points to 3.52% compared to 3.47% for the previous quarter driven by higher yields on interest earning assets. U.S. earning assets yielded 4.28%, compared to 4.21% in the previous quarter, while the cost of interest bearing liabilities was 0.98%, compared to 0.96% in the previous quarter.
Non-interest income (loss)
The favorable variance in non-interest income (loss) of $116.0 million, when compared to the fourth quarter of 2016, was primarily driven by:
- Lower FDIC loss-share expense by $122.1 million primarily due to a $116.8 million charge related to the portfolio sales arbitration decision denying BPPR's claims under the commercial loss sharing agreement and $9.9 million in additional adjustments related to restructured commercial loans, both recorded during the fourth quarter of 2016; and
- Higher other operating income by $4.0 million mainly due to higher earnings from investments under the equity method by $3.4 million.
These positive variances were partially offset by:
- Lower other service fees by $9.1 million due to lower insurance commission revenues primarily related to $7.1 million in contingent commissions recorded during the fourth quarter of 2016. Refer to Table F for a breakdown of other service fees; and
- Lower income from mortgage banking activities by $3.1 million due to higher trading account loss by $5.7 million from higher realized losses on closed derivative positions, partially offset by higher net gain on sale of loans by $2.8 million due to higher gains from securitization transactions.
Refer to Table B for further details.
| Financial Impact of the 2010 FDIC-Assisted Transaction | | | | |
| | | | | | | | |
| (Unaudited) | | Quarters ended |
| (In thousands) | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 |
| | | | | | | |
Income Statement | | | | | | |
| Interest income on WB loans | | $38,182 | | $39,642 | | $44,904 |
| Total FDIC loss-share expense | | (8,257) | | (130,334) | | (3,146) |
| Provision (reversal) for loan losses- WB loans | | (499) | | (2,292) | | (356) |
| Total revenues (expenses) less provision (reversal) for loan losses | | $30,424 | | $(88,400) | | $42,114 |
| | | | | | | |
Balance Sheet | | | | | | |
| WB loans | | $1,808,057 | | $1,861,106 | | $2,071,191 |
| FDIC loss-share asset | | 58,793 | | 69,334 | | 219,448 |
| FDIC true-up payment obligation | | 160,543 | | 153,158 | | 120,188 |
See additional details on accounting for the 2010 FDIC-Assisted transaction in Table O.
Operating expenses
Operating expenses amounted to $311.3 million for the first quarter of 2017, a decrease of $9.6 million when compared to the fourth quarter of 2016. The decrease in operating expenses was driven primarily by:
- Lower net occupancy expense by $1.1 million as a result of lower maintenance expense;
- Lower professional fees by $16.4 million mainly due to legal fees related to the FDIC arbitration proceedings incurred during the fourth quarter of 2016, programming, processing and other technology services; and
- Lower business promotion expense by $3.9 million due to lower seasonal advertising expense at BPPR.
These decreases were partially offset by:
- Higher personnel cost by $3.2 million mainly due to higher salaries, commission, incentives and other bonuses; and
- Higher other operating expenses by $8.8 million as a result of a write-down of $7.6 million recognized during the first quarter of 2017, related to capitalized software costs for a project which was discontinued by the Corporation.
Non-personnel credit-related costs, which include collections, appraisals, credit related fees, and OREO expenses, amounted to $16.6 million for the first quarter of 2017, compared to $14.8 million for the fourth quarter of 2016. The increase was principally due to higher collections expense at BPPR.
Full-time equivalent employees were 7,820 as of March 31, 2017, compared to 7,828 as of December 31, 2016.
For a breakdown of operating expenses by category refer to table B.
Income taxes
For the quarter ended March 31, 2017, the Corporation recorded an income tax expense of $33.0 million, compared to an income tax benefit of $1.8 million from its continued operations for the previous quarter. The increase in the income tax expense is mainly due to the operating loss at BPPR for the fourth quarter of 2016, driven by the unfavorable FDIC arbitration decision, compared to the taxable income for the current quarter.
The effective income tax rate for the first quarter of 2017 was 26%, compared to 25% for previous quarter. The effective tax rate is impacted by the composition and source of the taxable income.
Credit Quality
Despite the lingering macroeconomic conditions in Puerto Rico, the Corporation continued to reflect stable credit quality metrics when compared to the fourth quarter of 2016. The BPPR segment experienced a decline in net charge-offs, while higher NPLs and inflows to NPLs was driven by a single commercial relationship. The U.S. operation continued to reflect positive results with strong growth and favorable credit quality metrics. The Corporation remains attentive to changes in credit quality trends given the uncertain economic environment in the island.
- Inflows of NPLs held-in-portfolio, excluding consumer loans, increased by $21.7 million quarter-over-quarter, mainly driven by higher inflows in the BPPR commercial portfolio of $16.2 million, mostly due to the addition of a single $24.5 million relationship.
- Total non-performing loans held-in-portfolio increased by $17.7 million from the fourth quarter of 2016, driven by higher BPPR commercial NPLs of $15.8 million driven by a single $24.5 million relationship. At March 31, 2017, NPLs to total loans held-in-portfolio ratio remained at 2.5%, from the fourth quarter of 2016.
- Net charge-offs decreased by $20.6 million from the fourth quarter of 2016. This decrease was mainly related to the following reductions in the BPPR segment: (i) a $7.4 million decrease in mortgage NCOs, (ii) a $6.6 million decrease in the commercial NCOs, as the prior quarter included a $5.9 million charge-off related to a single borrower, and (iii) a $6.2 million decrease in consumer NCOs, mostly credit cards and auto loans. The Corporation’s ratio of annualized net charge-offs to average non-covered loans held-in-portfolio stood at 0.63%, compared to 1.00% in the fourth quarter of 2016. Refer to Table J for further information on net charge-offs and related ratios.
- The allowance for loan losses increased by $6.4 million from the fourth quarter 2016 to $516.7 million, primarily driven by higher reserves for the U.S. taxi medallion portfolio. The general and specific reserves related to non-covered loans totaled $398.6 million and $118.1 million, respectively, at quarter-end, compared with $398.9 million and $111.4 million, respectively, as of December 31, 2016. The ratio of the allowance for loan losses to loans held-in-portfolio was 2.27% in the first quarter of 2017, compared to 2.24% from the previous quarter.
- The ratio of the allowance for loan losses to NPLs held-in-portfolio remained stable at 89.8%, compared to 91.5% in the previous quarter.
- The provision for loan losses for non-covered loans for the first quarter of 2017 increased slightly by $1.1 million quarter-over-quarter to $42.1 million. The provision to net charge-offs ratio was 118.03% in the first quarter of 2017, compared to 72.80% in the previous quarter.
| Non-Performing Assets | | | | | | |
| (Unaudited) | | | | | | |
| (In thousands) | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 |
| Total non-performing loans held-in-portfolio, excluding covered loans | | $575,613 | | $557,915 | | $599,526 |
| Non-performing loans held-for-sale | | - | | - | | 42,743 |
| Other real estate owned (“OREO”), excluding covered OREO | | 185,836 | | 180,445 | | 165,960 |
| Total non-performing assets, excluding covered assets | | 761,449 | | 738,360 | | 808,229 |
| Covered loans and OREO | | 33,866 | | 36,044 | | 39,916 |
| Total non-performing assets | | $795,315 | | $774,404 | | $848,145 |
| Net charge-offs for the quarter (excluding covered loans) | | $35,633 | | $56,216 | | $42,448 |
| |
| | | | | | |
| Ratios (excluding covered loans): | | | | | | |
| Non-covered loans held-in-portfolio | | $22,734,721 | | $22,773,747 | | $22,507,737 |
| Non-performing loans held-in-portfolio to loans held-in-portfolio | | 2.53% | | 2.45% | | 2.66% |
| Allowance for loan losses to loans held-in-portfolio | | 2.27 | | 2.24 | | 2.26 |
| Allowance for loan losses to non-performing loans, excluding loans held-for-sale | | 89.77 | | 91.47 | | 84.80 |
| |
| Refer to Table H for additional information. | | | | | | |
| |
| Provision for Loan Losses |
| | | | | | |
| (Unaudited) | | Quarters ended |
| (In thousands) | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 |
| Provision for loan losses: | | | | | | |
| BPPR | | $31,478 | | $37,357 | | $43,871 |
| BPNA | | 10,579 | | 3,567 | | 4,069 |
| Total provision for loan losses - non-covered loans | | $42,057 | | $40,924 | | $47,940 |
| Provision (reversal) for loan losses - covered loans | | (1,359) | | 441 | | (3,105) |
| Total provision for loan losses | | $40,698 | | $41,365 | | $44,835 |
| |
| Credit Quality by Segment |
| (Unaudited) |
| (In thousands) | | Quarters ended |
| BPPR | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 |
| Provision for loan losses | | $31,478 | | $37,357 | | $43,871 |
| Net charge-offs | | 32,945 | | 53,416 | | 40,647 |
| Total non-performing loans held-in-portfolio, excluding covered loans | | 548,385 | | 532,508 | | 561,612 |
| Allowance / non-covered loans held-in-portfolio | | 2.75% | | 2.73% | | 2.70% |
| | |
| | | Quarters ended |
| BPNA | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 |
| Provision for loan losses | | $10,579 | | $3,567 | | $4,069 |
| Net charge-offs | | 2,688 | | 2,800 | | 1,801 |
| Total non-performing loans held-in-portfolio | | 27,228 | | 25,407 | | 37,914 |
| Allowance / non-covered loans held-in-portfolio | | 0.87% | | 0.75% | | 0.71% |
| |
| Financial Condition Highlights |
| | | | | | | | | |
| (Unaudited) |
| (In thousands) | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 |
| Cash and money market investments | | $3,993,572 | | $3,252,611 | | $2,327,083 |
| Trading and investment securities | | 9,511,124 | | 8,535,530 | | 6,984,354 |
| Loans not covered under loss-sharing agreements with the FDIC | | 22,734,721 | | 22,773,747 | | 22,507,737 |
| Loans covered under loss-sharing agreements with the FDIC | | 551,980 | | 572,878 | | 625,130 |
| Total assets | | 40,259,282 | | 38,661,609 | | 36,147,009 |
| Deposits | | 32,212,579 | | 30,496,224 | | 27,526,593 |
| Borrowings | | 1,993,886 | | 2,055,477 | | 2,349,992 |
| Liabilities from discontinued operations | | - | | - | | 1,815 |
| Total liabilities | | 35,069,069 | | 33,463,652 | | 30,896,709 |
| Stockholders’ equity | | 5,190,213 | | 5,197,957 | | 5,250,300 |
Total assets increased by $1.6 billion from the fourth quarter of 2016 driven by:
- An increase of $0.8 billion in money market investments mainly at BPPR due to the higher liquidity driven by increase in deposits balances; and
- An increase of $1.0 billion in investment securities available-for-sale mainly at BPPR due to purchases of U.S. Treasury securities and mortgage-backed agency pools in anticipation of upcoming maturities.
These positive variances were partially offset by:
- A net decrease of $39.0 million in non-covered loans held-in-portfolio mainly driven by lower balances of residential mortgage and commercial loans at BPPR by $184.6 million, partially offset by growth in the commercial portfolio at BPNA by $151.1 million; and
- A decrease of $33.7 million in other assets mainly driven by the change in deferred taxes and prepaid income taxes by $26.1 million and $11.0 million, respectively, and a decrease in servicing advances by $8.0 million. These unfavorable variances were partially offset by an increase of $19.4 million in guaranteed mortgage loan claims receivable.
Total liabilities increased by $1.6 billion from the fourth quarter of 2016, principally driven by:
- An increase of $1.7 billion in deposits mainly due to an increase in retail demand deposits and deposits from the Puerto Rico public sector at BPPR, and increases in savings and time deposits at BPPR and BPNA. Refer to Table G for additional information on deposits; partially offset by:
- A decrease of $49.3 million in other liabilities mainly driven by a decrease in accrued interest payable of $11.3 million, mainly at Popular, Inc. Holding, and a decline in the amounts payable to the FDIC due to payments of $23.7 million during the first quarter related to the loss sharing agreement.
Stockholders’ equity decreased by approximately $7.7 million from the fourth quarter of 2016, mainly as a result of a net income for the quarter of $92.9 million, offset by declared dividends of $25.6 million on common stock and $0.9 million in dividends on preferred stock, and the impact of the $75 million buy back completed during the quarter. As a result of the ASR transaction, discussed in the Significant Events section, the Corporation recognized $79.5 million in treasury stock, based on the stock’s spot price, offset by a $4.5 million adjustment to capital surplus, resulting from the decline in the Corporation’s stock price during the term of the ASR.
Common equity tier-1 ratio (“CET1”), common equity per share and tangible book value per share were 16.33%, $50.41 and $43.84, respectively at March 31, 2017 compared to 16.47%, $50.08 and $43.12 at December 31, 2016. 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. Forward-looking statements are not historical facts, but instead represent only management’s beliefs regarding future events and current expectations, many of which, by their nature, are inherently uncertain and outside of the control of the Corporation. It is possible that the Corporation’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated or implied in these forward-looking statements. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2016, and our other filings with the Securities and Exchange Commission for a discussion of some of the risks and important factors that could 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 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 Tuesday, April 25, 2017 at 11:00 a.m. Eastern Time. The call will be open to the public and broadcasted 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 Thursday, May 25, 2017. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10103705.
An electronic version of this press release can be found at the Corporation’s website: www.popular.com.
Popular, Inc. |
Financial Supplement to First 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 - Intentionally Left Blank (Consolidated Average Balances and Yield / Rate Analysis - YTD) |
| |
| Table F - Mortgage Banking Activities & 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 Covered Loans |
| |
| POPULAR, INC. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table A - Selected Ratios and Other Information |
| (Unaudited) |
| | | | | | |
| | | |
| | Quarters ended |
| | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 |
| Basic EPS from continuing operations | | $0.89 | | $(0.06) | | $0.81 |
| Basic EPS from discontinued operations | | $- | | $0.01 | | $- |
| Total Basic EPS | | $0.89 | | $(0.05) | | $0.81 |
| Diluted EPS from continuing operations | | $0.89 | | $(0.06) | | $0.81 |
| Diluted EPS from discontinued operations | | $- | | $0.01 | | $- |
| Total Diluted EPS | | $0.89 | | $(0.05) | | $0.81 |
| Average common shares outstanding | | 102,932,989 | | 103,368,820 | | 103,188,815 |
| Average common shares outstanding - assuming dilution | | 103,113,895 | | 103,368,820 | | 103,269,813 |
| Common shares outstanding at end of period | | 101,956,740 | | 103,790,932 | | 103,670,005 |
| | | | | | |
| Market value per common share | | $40.73 | | $43.82 | | $28.61 |
| | | | | | |
| Market capitalization - (In millions) | | $4,153 | | $4,548 | | $2,966 |
| | | | | | |
| Return on average assets | | 0.95% | | (0.04%) | | 0.95% |
| | . | | . | | |
| Return on average common equity | | 7.13% | | (0.38%) | | 6.58% |
| | | | | | |
| Net interest margin | | 4.08% | | 4.02% | | 4.43% |
| | | | | | |
| Common equity per share | | $50.41 | | $49.60 | | $50.16 |
| | | | | | |
| Tangible common book value per common share (non-GAAP) | | $43.84 | | $43.12 | | $43.55 |
| | | | | | |
| Tangible common equity to tangible assets (non-GAAP) | | 11.29% | | 11.78% | | 12.73% |
| | | | | | |
| Tier 1 capital | | 16.33% | | 16.47% | | 15.79% |
| | | | | | |
| Total capital | | 19.33% | | 19.46% | | 18.78% |
| | | | | | |
| Tier 1 leverage | | 10.61% | | 10.91% | | 11.46% |
| | | | | | |
| Common Equity Tier 1 capital | | 16.33% | | 16.47% | | 15.79% |
| |
| POPULAR, INC. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table B - Consolidated Statement of Operations |
| (Unaudited) |
| | Quarters ended | | Variance | | Quarter ended | | Variance |
| (In thousands, except per share information) | | 31-Mar-17 | | 31-Dec-16 | | Q1 2017 vs. Q4 2016 | | 31-Mar-16 | | Q1 2017 vs. Q1 2016 |
| Interest income: | | | | | | | | | | |
| Loans | | $363,136 | | $363,252 | | $(116) | | $363,197 | | $(61) |
| Money market investments | | 6,573 | | 5,108 | | 1,465 | | 2,863 | | 3,710 |
| Investment securities | | 44,886 | | 41,283 | | 3,603 | | 36,271 | | 8,615 |
| Trading account securities | | 1,400 | | 1,401 | | (1) | | 1,689 | | (289) |
| Total interest income | | 415,995 | | 411,044 | | 4,951 | | 404,020 | | 11,975 |
| Interest expense: | | | | | | | | | | |
| Deposits | | 33,757 | | 34,742 | | (985) | | 29,874 | | 3,883 |
| Short-term borrowings | | 1,095 | | 1,761 | | (666) | | 1,861 | | (766) |
| Long-term debt | | 19,045 | | 19,136 | | (91) | | 19,873 | | (828) |
| Total interest expense | | 53,897 | | 55,639 | | (1,742) | | 51,608 | | 2,289 |
| Net interest income | | 362,098 | | 355,405 | | 6,693 | | 352,412 | | 9,686 |
| Provision for loan losses - non-covered loans | | 42,057 | | 40,924 | | 1,133 | | 47,940 | | (5,883) |
| Provision (reversal) for loan losses - covered loans | | (1,359) | | 441 | | (1,800) | | (3,105) | | 1,746 |
| Net interest income after provision for loan losses | | 321,400 | | 314,040 | | 7,360 | | 307,577 | | 13,823 |
| Service charges on deposit accounts | | 39,536 | | 39,902 | | (366) | | 39,862 | | (326) |
| Other service fees | | 56,175 | | 65,274 | | (9,099) | | 53,382 | | 2,793 |
| Mortgage banking activities | | 11,369 | | 14,488 | | (3,119) | | 10,551 | | 818 |
| Net gain and valuation adjustments on investment securities | | 162 | | 30 | | 132 | | - | | 162 |
| Trading account loss | | (278) | | (1,627) | | 1,349 | | (162) | | (116) |
| Net loss on sale of loans, including valuation adjustments on loans held-for-sale | | - | | - | | - | | (304) | | 304 |
| Adjustments (expense) to indemnity reserves on loans sold | | (1,966) | | (3,051) | | 1,085 | | (4,098) | | 2,132 |
| FDIC loss-share expense | | (8,257) | | (130,334) | | 122,077 | | (3,146) | | (5,111) |
| Other operating income | | 19,128 | | 15,143 | | 3,985 | | 15,545 | | 3,583 |
| Total non-interest income (expense) | | 115,869 | | (175) | | 116,044 | | 111,630 | | 4,239 |
| Operating expenses: | | | | | | | | | | |
| Personnel costs | | | | | | | | | | |
| Salaries | | 78,376 | | 77,275 | | 1,101 | | 77,298 | | 1,078 |
| Commissions, incentives and other bonuses | | 20,078 | | 17,405 | | 2,673 | | 20,769 | | (691) |
| Pension, postretirement and medical insurance | | 11,244 | | 12,481 | | (1,237) | | 13,111 | | (1,867) |
| Other personnel costs, including payroll taxes | | 15,909 | | 15,292 | | 617 | | 15,913 | | (4) |
| Total personnel costs | | 125,607 | | 122,453 | | 3,154 | | 127,091 | | (1,484) |
| Net occupancy expenses | | 20,776 | | 21,883 | | (1,107) | | 20,430 | | 346 |
| Equipment expenses | | 15,970 | | 16,494 | | (524) | | 14,548 | | 1,422 |
| Other taxes | | 10,969 | | 10,615 | | 354 | | 10,195 | | 774 |
| Professional fees | | | | | | | | | | |
| Collections, appraisals and other credit related fees | | 3,823 | | 1,128 | | 2,695 | | 4,500 | | (677) |
| Programming, processing and other technology services | | 48,091 | | 53,196 | | (5,105) | | 49,864 | | (1,773) |
| Legal fees, excluding collections | | 3,296 | | 14,702 | | (11,406) | | 6,254 | | (2,958) |
| Other professional fees | | 14,040 | | 16,667 | | (2,627) | | 14,841 | | (801) |
| Total professional fees | | 69,250 | | 85,693 | | (16,443) | | 75,459 | | (6,209) |
| Communications | | 5,949 | | 5,780 | | 169 | | 6,320 | | (371) |
| Business promotion | | 11,576 | | 15,473 | | (3,897) | | 11,110 | | 466 |
| FDIC deposit insurance | | 6,493 | | 5,926 | | 567 | | 7,370 | | (877) |
| Other real estate owned (OREO) expenses | | 12,818 | | 13,703 | | (885) | | 9,141 | | 3,677 |
| Credit and debit card processing, volume, interchange and other expenses | | 5,532 | | 4,817 | | 715 | | 5,722 | | (190) |
| Other operating expenses | | | | | | | | | | |
| Operational losses | | 7,536 | | 6,579 | | 957 | | 2,661 | | 4,875 |
| All other | | 16,497 | | 8,619 | | 7,878 | | 8,782 | | 7,715 |
| Total other operating expenses | | 24,033 | | 15,198 | | 8,835 | | 11,443 | | 12,590 |
| Amortization of intangibles | | 2,345 | | 2,836 | | (491) | | 3,114 | | (769) |
| Total operating expenses | | 311,318 | | 320,871 | | (9,553) | | 301,943 | | 9,375 |
| Income (loss) from continuing operations before income tax | | 125,951 | | (7,006) | | 132,957 | | 117,264 | | 8,687 |
| Income tax expense (benefit) | | 33,006 | | (1,766) | | 34,772 | | 32,265 | | 741 |
| Income (loss) from continuing operations | | 92,945 | | (5,240) | | 98,185 | | 84,999 | | 7,946 |
| Income from discontinued operations, net of tax | | - | | 1,135 | | (1,135) | | - | | - |
| Net income (loss) | | $92,945 | | $(4,105) | | $97,050 | | $84,999 | | $7,946 |
| Net income (loss) applicable to common stock | | $92,014 | | $(5,036) | | $97,050 | | $84,068 | | $7,946 |
| Net income (loss) per common share - basic: | | | | | | | | | | |
| Net income (loss) from continuing operations | | $0.89 | | $(0.06) | | $0.95 | | $0.81 | | $0.08 |
| Net income from discontinued operations | | - | | 0.01 | | (0.01) | | - | | - |
| Net income (loss) per common share - basic | | $0.89 | | $(0.05) | | $0.94 | | $0.81 | | $0.08 |
| Net income (loss) per common share - diluted: | | | | | | | | | | |
| Net income (loss) from continuing operations | | $0.89 | | $(0.06) | | $0.95 | | $0.81 | | $0.08 |
| Net income from discontinued operations | | - | | 0.01 | | (0.01) | | - | | - |
| Net income (loss) per common share - diluted | | $0.89 | | $(0.05) | | $0.94 | | $0.81 | | $0.08 |
| Dividends Declared per Common Share | | $0.25 | | $0.15 | | $0.10 | | $0.15 | | $0.10 |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table C - Consolidated Statement of Financial Condition |
| (Unaudited) |
| | | | | | | | Variance |
| | | | | | | | Q1 2017 vs. |
| (In thousands) | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 | | Q4 2016 |
| Assets: | | | | | | | | |
| Cash and due from banks | | $340,225 | | $362,394 | | $409,623 | | $(22,169) |
| Money market investments | | 3,653,347 | | 2,890,217 | | 1,917,460 | | 763,130 |
| Trading account securities, at fair value | | 50,985 | | 59,805 | | 71,284 | | (8,820) |
| Investment securities available-for-sale, at fair value | | 9,197,527 | | 8,209,806 | | 6,649,830 | | 987,721 |
| Investment securities held-to-maturity, at amortized cost | | 96,326 | | 98,101 | | 99,216 | | (1,775) |
| Other investment securities, at lower of cost or realizable value | | 166,286 | | 167,818 | | 164,024 | | (1,532) |
| Loans held-for-sale, at lower of cost or fair value | | 85,309 | | 88,821 | | 125,315 | | (3,512) |
| Loans held-in-portfolio: | | | | | | | | |
| Loans not covered under loss-sharing agreements with the FDIC | | 22,858,556 | | 22,895,172 | | 22,618,488 | | (36,616) |
| Loans covered under loss-sharing agreements with the FDIC | | 551,980 | | 572,878 | | 625,130 | | (20,898) |
| Less: Unearned income | | 123,835 | | 121,425 | | 110,751 | | 2,410 |
| Allowance for loan losses | | 544,496 | | 540,651 | | 538,472 | | 3,845 |
| Total loans held-in-portfolio, net | | 22,742,205 | | 22,805,974 | | 22,594,395 | | (63,769) |
| FDIC loss-share asset | | 58,793 | | 69,334 | | 219,448 | | (10,541) |
| Premises and equipment, net | | 548,995 | | 543,981 | | 527,493 | | 5,014 |
| Other real estate not covered under loss-sharing agreements with the FDIC | | 185,836 | | 180,445 | | 165,960 | | 5,391 |
| Other real estate covered under loss-sharing agreements with the FDIC | | 29,926 | | 32,128 | | 36,397 | | (2,202) |
| Accrued income receivable | | 128,018 | | 138,042 | | 120,308 | | (10,024) |
| Mortgage servicing assets, at fair value | | 193,698 | | 196,889 | | 205,051 | | (3,191) |
| Other assets | | 2,111,806 | | 2,145,510 | | 2,156,030 | | (33,704) |
| Goodwill | | 627,294 | | 627,294 | | 631,095 | | - |
| Other intangible assets | | 42,706 | | 45,050 | | 54,080 | | (2,344) |
| Total assets | | $40,259,282 | | $38,661,609 | | $36,147,009 | | $1,597,673 |
| Liabilities and Stockholders’ Equity: | | | | | | | | |
| Liabilities: | | | | | | | | |
| Deposits: | | | | | | | | |
| Non-interest bearing | | $7,262,328 | | $6,980,443 | | $6,384,093 | | $281,885 |
| Interest bearing | | 24,950,251 | | 23,515,781 | | 21,142,500 | | 1,434,470 |
| Total deposits | | 32,212,579 | | 30,496,224 | | 27,526,593 | | 1,716,355 |
| Federal funds purchased and assets sold under agreements to repurchase | | 434,714 | | 479,425 | | 760,154 | | (44,711) |
| Other short-term borrowings | | 1,200 | | 1,200 | | 6,370 | | - |
| Notes payable | | 1,557,972 | | 1,574,852 | | 1,583,468 | | (16,880) |
| Other liabilities | | 862,604 | | 911,951 | | 1,018,309 | | (49,347) |
| Liabilities from discontinued operations | | - | | - | | 1,815 | | - |
| Total liabilities | | 35,069,069 | | 33,463,652 | | 30,896,709 | | 1,605,417 |
| Stockholders’ equity: | | | | | | | | |
| Preferred stock | | 50,160 | | 50,160 | | 50,160 | | - |
| Common stock | | 1,041 | | 1,040 | | 1,039 | | 1 |
| Surplus | | 4,261,346 | | 4,255,022 | | 4,231,233 | | 6,324 |
| Retained earnings | | 1,286,706 | | 1,220,307 | | 1,156,476 | | 66,399 |
| Treasury stock | | (89,128) | | (8,286) | | (6,858) | | (80,842) |
| Accumulated other comprehensive loss | | (319,912) | | (320,286) | | (181,750) | | 374 |
| Total stockholders’ equity | | 5,190,213 | | 5,197,957 | | 5,250,300 | | (7,744) |
| Total liabilities and stockholders’ equity | | $40,259,282 | | $38,661,609 | | $36,147,009 | | $1,597,673 |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER |
| (Unaudited) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Quarter ended | | | Quarter ended | | | Quarter ended | | | Variance | | | Variance | |
| | 31-Mar-17 | | | 31-Dec-16 | | | 31-Mar-16 | | | Q1 2017 vs. Q4 2016 | | | Q1 2017 vs. Q1 2016 | |
| ($ amounts in millions; yields not on a taxable equivalent basis) | | Average balance | | Income / Expense | | Yield / Rate | | | Average balance | | Income / Expense | | Yield / Rate | | | Average balance | | Income / Expense | | Yield / Rate | | | Average balance | | Income / Expense | | Yield / Rate | | | Average balance | | Income / Expense | | Yield / Rate | |
| Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Money market, trading and investment securities | | $12,423 | | $52.9 | | 1.71 | % | | $12,185 | | $47.8 | | 1.57 | % | | $8,951 | | $40.8 | | 1.83 | % | | $238 | | $5.1 | | 0.14 | % | | $3,472 | | $12.1 | | (0.12) | % |
| Loans not covered under loss-sharing agreements with the FDIC: |
| Commercial | | 9,704 | | 118.8 | | 4.97 | | | 9,435 | | 116.5 | | 4.91 | | | 8,957 | | 110.6 | | 4.97 | | | 269 | | 2.3 | | 0.06 | | | 747 | | 8.2 | | - | |
| Construction | | 821 | | 10.9 | | 5.41 | | | 737 | | 9.9 | | 5.36 | | | 704 | | 9.3 | | 5.30 | | | 84 | | 1.0 | | 0.05 | | | 117 | | 1.6 | | 0.11 | |
| Mortgage | | 6,606 | | 88.4 | | 5.35 | | | 6,598 | | 88.5 | | 5.37 | | | 6,830 | | 89.7 | | 5.25 | | | 8 | | (0.1) | | (0.02) | | | (224) | | (1.3) | | 0.10 | |
| Consumer | | 3,704 | | 95.2 | | 10.43 | | | 3,774 | | 97.3 | | 10.26 | | | 3,807 | | 98.0 | | 10.35 | | | (70) | | (2.1) | | 0.17 | | | (103) | | (2.8) | | 0.08 | |
| Lease financing | | 708 | | 11.6 | | 6.54 | | | 688 | | 11.4 | | 6.64 | | | 630 | | 10.7 | | 6.78 | | | 20 | | 0.2 | | (0.10) | | | 78 | | 0.9 | | (0.24) | |
| Total loans (excluding WB loans) | | 21,543 | | 324.9 | | 6.09 | | | 21,232 | | 323.6 | | 6.07 | | | 20,928 | | 318.3 | | 6.11 | | | 311 | | 1.3 | | 0.02 | | | 615 | | 6.6 | | (0.02) | |
| WB loans | | 1,810 | | 38.2 | | 8.53 | | | 1,845 | | 39.6 | | 8.56 | | | 2,058 | | 44.9 | | 8.76 | | | (35) | | (1.4) | | (0.03) | | | (248) | | (6.7) | | (0.23) | |
| Total loans | | 23,353 | | 363.1 | | 6.28 | | | 23,077 | | 363.2 | | 6.27 | | | 22,986 | | 363.2 | | 6.34 | | | 276 | | (0.1) | | 0.01 | | | 367 | | (0.1) | | (0.06) | |
| Total interest earning assets | | 35,776 | | $416.0 | | 4.69 | % | | 35,262 | | $411.0 | | 4.65 | % | | 31,937 | | $404.0 | | 5.08 | % | | 514 | | $5.0 | | 0.04 | % | | 3,839 | | $12.0 | | (0.39) | % |
| Allowance for loan losses | | (542) | | | | | | | (562) | | | | | | | (536) | | | | | | | 20 | | | | | | | (6) | | | | | |
| Other non-interest earning assets | | 4,312 | | | | | | | 4,386 | | | | | | | 4,491 | | | | | | | (74) | | | | | | | (179) | | | | | |
| Total average assets | | $39,546 | | | | | | | $39,086 | | | | | | | $35,892 | | | | | | | $460 | | | | | | | $3,654 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity: | | |
| Interest bearing deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW and money market | | $8,516 | | $8.5 | | 0.41 | % | | $8,007 | | $8.3 | | 0.41 | % | | $5,712 | | $5.6 | | 0.39 | % | | $509 | | $0.2 | | - | % | | $2,804 | | $2.9 | | 0.02 | % |
| Savings | | 8,041 | | 4.9 | | 0.25 | | | 7,796 | | 4.7 | | 0.24 | | | 7,275 | | 4.3 | | 0.23 | | | 245 | | 0.2 | | 0.01 | | | 766 | | 0.6 | | 0.02 | |
| Time deposits | | 7,756 | | 20.4 | | 1.06 | | | 7,858 | | 21.7 | | 1.10 | | | 8,058 | | 20.0 | | 1.00 | | | (102) | | (1.3) | | (0.04) | | | (302) | | 0.4 | | 0.06 | |
| Total interest bearing deposits | | 24,313 | | 33.8 | | 0.56 | | | 23,661 | | 34.7 | | 0.58 | | | 21,045 | | 29.9 | | 0.57 | | | 652 | | (0.9) | | (0.02) | | | 3,268 | | 3.9 | | (0.01) | |
| Borrowings | | 2,025 | | 20.1 | | 4.00 | | | 2,212 | | 20.9 | | 3.78 | | | 2,441 | | 21.7 | | 3.58 | | | (187) | | (0.8) | | 0.22 | | | (416) | | (1.6) | | 0.42 | |
| Total interest bearing liabilities | | 26,338 | | 53.9 | | 0.83 | | | 25,873 | | 55.6 | | 0.86 | | | 23,486 | | 51.6 | | 0.88 | | | 465 | | (1.7) | | (0.03) | | | 2,852 | | 2.3 | | (0.05) | |
| Net interest spread | | | | | | 3.86 | % | | | | | | 3.79 | % | | | | | | 4.20 | % | | | | | | 0.07 | % | | | | | | (0.34) | % |
| Non-interest bearing deposits | | 7,027 | | | | | | | 6,976 | | | | | | | 6,293 | | | | | | | 51 | | | | | | | 734 | | | | | |
| Other liabilities | | 896 | | | | | | | 901 | | | | | | | 920 | | | | | | | (5) | | | | | | | (24) | | | | | |
| Liabilities from discontinued operations | | - | | | | | | | 2 | | | | | | | 2 | | | | | | | (2) | | | | | | | (2) | | | | | |
| Stockholders' equity | | 5,285 | | | | | | | 5,334 | | | | | | | 5,191 | | | | | | | (49) | | | | | | | 94 | | | | | |
| Total average liabilities and stockholders' equity | | $39,546 | | | | | | | $39,086 | | | | | | | $35,892 | | | | | | | $460 | | | | | | | $3,654 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income / margin non-taxable equivalent basis | | | | $362.1 | | 4.08 | % | | | | $355.4 | | 4.02 | % | | | | $352.4 | | 4.43 | % | | | | $6.7 | | 0.06 | % | | | | $9.7 | | (0.35) | % |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE |
[THIS PAGE INTENTIONALLY LEFT BLANK]
| | | | | | | | | | |
| Popular, Inc. | | | | | | | | | | |
| Financial Supplement to First Quarter 2017 Earnings Release | | |
| Table F - Mortgage Banking Activities and Other Service Fees | | |
| (Unaudited) | | | | | | | | | | |
| | | | | | | | | | |
| Mortgage Banking Activities | | | | | | | | Variance |
| | Quarters ended | | Q1 2017
vs. | | Q1 2017
vs. |
| (In thousands) | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 | | Q4 2016 | | Q1 2016 |
| Mortgage servicing fees, net of fair value adjustments: | | | | | | | | | | |
| Mortgage servicing fees | | $13,452 | | $14,211 | | $14,802 | | $(759) | | $(1,350) |
| Mortgage servicing rights fair value adjustments | | (5,954) | | (6,457) | | (8,477) | | 503 | | 2,523 |
| Total mortgage servicing fees, net of fair value adjustments | | 7,498 | | 7,754 | | 6,325 | | (256) | | 1,173 |
| Net gain on sale of loans, including valuation on loans held-for-sale | | 5,381 | | 2,535 | | 7,110 | | 2,846 | | (1,729) |
| Trading account (loss) profit: | | | | | | | | | | |
| Unrealized gains (losses) on outstanding derivative positions | | (40) | | 43 | | (80) | | (83) | | 40 |
| Realized (losses) gains on closed derivative positions | | (1,470) | | 4,156 | | (2,804) | | (5,626) | | 1,334 |
| Total trading account (loss) profit | | (1,510) | | 4,199 | | (2,884) | | (5,709) | | 1,374 |
| Total mortgage banking activities | | $11,369 | | $14,488 | | $10,551 | | $(3,119) | | $818 |
| | | | | | | | | | |
| Other Service Fees | | | | | | | | Variance |
| | Quarters ended | | Q1 2017 vs. | | Q1 2017 vs. |
| (In thousands) | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 | | Q4 2016 | | Q1 2016 |
| Other service fees: | | | | | | | | | | |
| Debit card fees | | $11,543 | | $12,088 | | $11,287 | | $(545) | | $256 |
| Insurance fees | | 12,805 | | 20,804 | | 12,850 | | (7,999) | | (45) |
| Credit card fees | | 18,276 | | 18,324 | | 16,858 | | (48) | | 1,418 |
| Sale and administration of investment products | | 5,082 | | 5,652 | | 4,839 | | (570) | | 243 |
| Trust fees | | 4,955 | | 4,782 | | 4,235 | | 173 | | 720 |
| Other fees | | 3,514 | | 3,624 | | 3,313 | | (110) | | 201 |
| Total other service fees | | $56,175 | | $65,274 | | $53,382 | | $(9,099) | | $2,793 |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table G - Loans and Deposits |
| (Unaudited) |
| | | | | | | | | | |
| Loans - Ending Balances | | | | | | | | | | |
| | | | | | | | Variance |
| (In thousands) | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 | | Q1 2017 vs. Q4 2016 | | Q1 2017 vs. Q1 2016 |
| Loans not covered under FDIC loss-sharing agreements: | | | | | | | | |
| Commercial | | $10,811,700 | | $10,798,507 | | $10,228,389 | | $13,193 | | $583,311 |
| Construction | | 831,305 | | 776,300 | | 734,858 | | 55,005 | | 96,447 |
| Legacy [1] | | 40,688 | | 45,293 | | 61,044 | | (4,605) | | (20,356) |
| Lease financing | | 719,643 | | 702,893 | | 643,142 | | 16,750 | | 76,501 |
| Mortgage | | 6,627,987 | | 6,696,361 | | 6,979,201 | | (68,374) | | (351,214) |
| Consumer | | 3,703,398 | | 3,754,393 | | 3,861,103 | | (50,995) | | (157,705) |
| Total non-covered loans held-in-portfolio | | $22,734,721 | | $22,773,747 | | $22,507,737 | | $(39,026) | | $226,984 |
| Loans covered under FDIC loss-sharing agreements | | 551,980 | | 572,878 | | 625,130 | | (20,898) | | (73,150) |
| Total loans held-in-portfolio | | $23,286,701 | | $23,346,625 | | $23,132,867 | | $(59,924) | | $153,834 |
| Loans held-for-sale: | | | | | | | | | | |
| Commercial | | $- | | $- | | $42,771 | | $- | | $(42,771) |
| Construction | | - | | - | | 2 | | - | | (2) |
| Mortgage | | 85,309 | | 88,821 | | 82,542 | | (3,512) | | 2,767 |
| Total loans held-for-sale | | $85,309 | | $88,821 | | $125,315 | | $(3,512) | | $(40,006) |
| Total loans | | $23,372,010 | | $23,435,446 | | $23,258,182 | | $(63,436) | | $113,828 |
| [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) | | 31-Mar-17 | | 31-Dec-16 | | 31-Mar-16 | | Q1 2017 vs. Q4 2016 | | Q1 2017 vs.Q1 2016 |
| Demand deposits [1] | | $10,136,435 | | $9,053,897 | | $7,324,982 | | $1,082,538 | | $2,811,453 |
| Savings, NOW and money market deposits (non-brokered) | | 13,939,838 | | 13,327,298 | | 11,940,103 | | 612,540 | | 1,999,735 |
| Savings, NOW and money market deposits (brokered) | | 423,339 | | 405,487 | | 383,745 | | 17,852 | | 39,594 |
| Time deposits (non-brokered) | | 7,508,726 | | 7,486,717 | | 7,348,132 | | 22,009 | | 160,594 |
| Time deposits (brokered CDs) | | 204,241 | | 222,825 | | 529,631 | | (18,584) | | (325,390) |
| Total deposits | | $32,212,579 | | $30,496,224 | | $27,526,593 | | $1,716,355 | | $4,685,986 |
| [1] Includes interest and non-interest bearing demand deposits. |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table H - Non-Performing Assets |
| (Unaudited) |
| | | | | | | | | | | | | | | | | Variance |
| (Dollars in thousands) | | 31-Mar-17 | | As a % of
loans HIP by
category | | | 31-Dec-16 | | As a % of
loans HIP by
category | | | 31-Mar-16 | | As a % of
loans HIP by
category | | | Q1 2017 vs. Q4 2016 | | Q1 2017 vs. Q1 2016 |
| Non-accrual loans: | | | | | | | | | | | | | | | | | | | |
| Commercial | | $179,241 | | 1.7 | % | | $163,348 | | 1.5 | % | | $197,631 | | 1.9 | % | | $15,893 | | $(18,390) |
| Construction | | - | | - | | | - | | - | | | 3,941 | | 0.5 | | | - | | (3,941) |
| Legacy [1] | | 3,335 | | 8.2 | | | 3,337 | | 7.4 | | | 4,046 | | 6.6 | | | (2) | | (711) |
| Lease financing | | 2,444 | | 0.3 | | | 3,062 | | 0.4 | | | 3,419 | | 0.5 | | | (618) | | (975) |
| Mortgage | | 331,339 | | 5.0 | | | 329,907 | | 4.9 | | | 334,907 | | 4.8 | | | 1,432 | | (3,568) |
| Consumer | | 59,254 | | 1.6 | | | 58,261 | | 1.6 | | | 55,582 | | 1.4 | | | 993 | | 3,672 |
| Total non-performing loans held-in- | | | | | | | | | | | | | | | | | | | |
| portfolio, excluding covered loans | | 575,613 | | 2.5 | % | | 557,915 | | 2.5 | % | | 599,526 | | 2.7 | % | | 17,698 | | (23,913) |
| Non-performing loans held-for-sale [2] | | - | | | | | - | | | | | 42,743 | | | | | - | | (42,743) |
| Other real estate owned (“OREO”), | | | | | | | | | | | | | | | | | | | |
| excluding covered OREO | | 185,836 | | | | | 180,445 | | | | | 165,960 | | | | | 5,391 | | 19,876 |
| Total non-performing assets, | | | | | | | | | | | | | | | | | | | |
| excluding covered assets | | 761,449 | | | | | 738,360 | | | | | 808,229 | | | | | 23,089 | | (46,780) |
| Covered loans and OREO | | 33,866 | | | | | 36,044 | | | | | 39,916 | | | | | (2,178) | | (6,050) |
| Total non-performing assets | | $795,315 | | | | | $774,404 | | | | | $848,145 | | | | | $20,911 | | $(52,830) |
| Accruing loans past due 90 days or more [3] | | $408,346 | | | | | $426,652 | | | | | $426,437 | | | | | $(18,306) | | $(18,091) |
| Ratios excluding covered loans: | | | | | | | | | | | | | | | | | | | |
| Non-performing loans held-in-portfolio | | | | | | | | | | | | | | | | | | | |
| to loans held-in-portfolio | | 2.53 | | % | | | 2.45 | | % | | | 2.66 | | % | | | | | |
| Allowance for loan losses to loans | | | | | | | | | | | | | | | | | | | |
| held-in-portfolio | | 2.27 | | | | | 2.24 | | | | | 2.26 | | | | | | | |
| Allowance for loan losses to | | | | | | | | | | | | | | | | | | | |
| non-performing loans, excluding loans | | | | | | | | | | | | | | | | | | | |
| held-for-sale | | 89.77 | | | | | 91.47 | | | | | 84.80 | | | | | | | |
| Ratios including covered loans: | | | | | | | | | | | | | | | | | | | |
| Non-performing assets to total assets | | 1.98 | | % | | | 2.00 | | % | | | 2.35 | | % | | | | | |
| Non-performing loans held-in-portfolio | | | | | | | | | | | | | | | | | | | |
| to loans held-in-portfolio | | 2.49 | | | | | 2.41 | | | | | 2.61 | | | | | | | |
| Allowance for loan losses to loans | | | | | | | | | | | | | | | | | | | |
| held-in-portfolio | | 2.34 | | | | | 2.32 | | | | | 2.33 | | | | | | | |
| Allowance for loan losses to non-performing | | | | | | | | | | | | | | | | | | | |
| loans, excluding loans held-for-sale | | 93.95 | | | | | 96.23 | | | | | 89.29 | | | | | | | |
| [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 March 31, 2017 and December 31, 2016 (March 31, 2016 - $42.7 million in commercial loans and $2 thousand in construction 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 $173 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of March 31, 2017 (December 31, 2016 - $181 million; March 31, 2016 - $161 million). Furthermore, the Corporation has approximately $58.6 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 (December 31, 2016 - $68 million; March 31, 2016 - $68 million). |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table I - Activity in Non-Performing Loans |
| (Unaudited) |
| | | | | | | | | | | | |
| Commercial loans held-in-portfolio: |
| | Quarter ended | | Quarter ended |
| | 31-Mar-17 | | 31-Dec-16 |
| (In thousands) | | BPPR | | BPNA | | Popular, Inc. | | BPPR | | BPNA | | Popular, Inc. |
| Beginning balance NPLs | | $159,655 | | $3,693 | | $163,348 | | $167,047 | | $3,524 | | $170,571 |
| Plus: | | | | | | | | | | | | |
| New non-performing loans | | 33,600 | | 1,355 | | 34,955 | | 17,409 | | 1,615 | | 19,024 |
| Advances on existing non-performing loans | | - | | - | | - | | - | | 5 | | 5 |
| Less: | | | | | | | | | | | | |
| Non-performing loans transferred to OREO | | (3,510) | | - | | (3,510) | | (1,559) | | - | | (1,559) |
| Non-performing loans charged-off | | (5,153) | | (46) | | (5,199) | | (12,925) | | (35) | | (12,960) |
| Loans returned to accrual status / loan collections | | (9,115) | | (1,238) | | (10,353) | | (10,317) | | (1,416) | | (11,733) |
| Ending balance NPLs | | $175,477 | | $3,764 | | $179,241 | | $159,655 | | $3,693 | | $163,348 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Mortgage loans held-in-portfolio: |
| | Quarter ended | | Quarter ended |
| | 31-Mar-17 | | 31-Dec-16 |
| (In thousands) | | BPPR | | BPNA | | Popular, Inc. | | BPPR | | BPNA | | Popular, Inc. |
| Beginning balance NPLs | | $318,194 | | $11,713 | | $329,907 | | $331,346 | | $14,430 | | $345,776 |
| Plus: | | | | | | | | | | | | |
| New non-performing loans | | 82,149 | | 4,753 | | 86,902 | | 76,278 | | 4,835 | | 81,113 |
| Less: | | | | | | | | | | | | |
| Non-performing loans transferred to OREO | | (11,256) | | (46) | | (11,302) | | (7,791) | | (315) | | (8,106) |
| Non-performing loans charged-off | | (9,428) | | (69) | | (9,497) | | (16,404) | | 240 | | (16,164) |
| Loans returned to accrual status / loan collections | | (60,209) | | (4,462) | | (64,671) | | (65,235) | | (7,477) | | (72,712) |
| Ending balance NPLs | | $319,450 | | $11,889 | | $331,339 | | $318,194 | | $11,713 | | $329,907 |
| | | | | | | | | | | | |
| Legacy loans held-in-portfolio: |
| | Quarter ended | | Quarter ended |
| | 31-Mar-17 | | 31-Dec-16 |
| (In thousands) | | BPPR | | BPNA | | Popular, Inc. | | BPPR | | BPNA | | Popular, Inc. |
| Beginning balance NPLs | | $- | | $3,337 | | $3,337 | | $- | | $3,450 | | $3,450 |
| Plus: | | | | | | | | | | | | |
| New non-performing loans | | - | | - | | - | | - | | 17 | | 17 |
| Advances on existing non-performing loans | | - | | 47 | | 47 | | - | | 7 | | 7 |
| Less: | | | | | | | | | | | | |
| Non-performing loans charged-off | | - | | (2) | | (2) | | - | | (89) | | (89) |
| Loans returned to accrual status / loan collections | | - | | (47) | | (47) | | - | | (48) | | (48) |
| Ending balance NPLs | | $- | | $3,335 | | $3,335 | | $- | | $3,337 | | $3,337 |
| | | | | | | | | | | | |
| Total non-performing loans held-in-portfolio (excluding consumer and covered loans): |
| | Quarter ended | | Quarter ended |
| | 31-Mar-17 | | 31-Dec-16 |
| (In thousands) | | BPPR | | BPNA | | Popular, Inc. | | BPPR | | BPNA | | Popular, Inc. |
| Beginning balance NPLs | | $477,849 | | $18,743 | | $496,592 | | $498,393 | | $21,404 | | $519,797 |
| Plus: | | | | | | | | | | | | |
| New non-performing loans | | 115,749 | | 6,108 | | 121,857 | | 93,687 | | 6,467 | | 100,154 |
| Advances on existing non-performing loans | | - | | 47 | | 47 | | - | | 12 | | 12 |
| Less: | | | | | | | | | | | | |
| Non-performing loans transferred to OREO | | (14,766) | | (46) | | (14,812) | | (9,350) | | (315) | | (9,665) |
| Non-performing loans charged-off | | (14,581) | | (117) | | (14,698) | | (29,329) | | 116 | | (29,213) |
| Loans returned to accrual status / loan collections | | (69,324) | | (5,747) | | (75,071) | | (75,552) | | (8,941) | | (84,493) |
| Ending balance NPLs | | $494,927 | | $18,988 | | $513,915 | | $477,849 | | $18,743 | | $496,592 |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios |
| (Unaudited) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Quarter ended | | | Quarter ended | | | Quarter ended | |
| | | 31-Mar-17 | | | 31-Dec-16 | | | 31-Mar-16 | |
| (Dollars in thousands) | | Non-covered loans | | | Covered loans | | | Total | | | Non-covered loans | | | Covered loans | | | Total | | | Non-covered loans | | | Covered loans | | | Total | |
| Balance at beginning of period | | $510,301 | | | $30,350 | | | $540,651 | | | $525,593 | | | $30,262 | | | $555,855 | | | $502,935 | | | $34,176 | | | $537,111 | |
| Provision (reversal) for loan losses | | 42,057 | | | (1,359) | | | 40,698 | | | 40,924 | | | 441 | | | 41,365 | | | 47,940 | | | (3,105) | | | 44,835 | |
| | | 552,358 | | | 28,991 | | | 581,349 | | | 566,517 | | | 30,703 | | | 597,220 | | | 550,875 | | | 31,071 | | | 581,946 | |
| Net loans charged-off (recovered): | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| BPPR | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | 2,638 | | | - | | | 2,638 | | | 9,205 | | | - | | | 9,205 | | | 2,704 | | | - | | | 2,704 | |
| Construction | | (144) | | | - | | | (144) | | | 8 | | | - | | | 8 | | | 311 | | | - | | | 311 | |
| Lease financing | | 813 | | | - | | | 813 | | | 1,000 | | | - | | | 1,000 | | | 1,638 | | | - | | | 1,638 | |
| Mortgage | | 13,555 | | | 1,128 | | | 14,683 | | | 20,919 | | | 360 | | | 21,279 | | | 14,696 | | | 996 | | | 15,692 | |
| Consumer | | 16,083 | | | 92 | | | 16,175 | | | 22,284 | | | (7) | | | 22,277 | | | 21,298 | | | 30 | | | 21,328 | |
| Total BPPR | | 32,945 | | | 1,220 | | | 34,165 | | | 53,416 | | | 353 | | | 53,769 | | | 40,647 | | | 1,026 | | | 41,673 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| BPNA | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | (463) | | | - | | | (463) | | | (1,080) | | | - | | | (1,080) | | | 205 | | | - | | | 205 | |
| Legacy [1] | | (488) | | | - | | | (488) | | | (253) | | | - | | | (253) | | | (247) | | | - | | | (247) | |
| Mortgage | | (104) | | | - | | | (104) | | | (255) | | | - | | | (255) | | | 230 | | | - | | | 230 | |
| Consumer | | 3,743 | | | - | | | 3,743 | | | 4,388 | | | - | | | 4,388 | | | 1,613 | | | - | | | 1,613 | |
| Total BPNA | | 2,688 | | | - | | | 2,688 | | | 2,800 | | | - | | | 2,800 | | | 1,801 | | | - | | | 1,801 | |
| Total loans charged-off - Popular, Inc. | | 35,633 | | | 1,220 | | | 36,853 | | | 56,216 | | | 353 | | | 56,569 | | | 42,448 | | | 1,026 | | | 43,474 | |
| Balance at end of period | | $516,725 | | | $27,771 | | | $544,496 | | | $510,301 | | | $30,350 | | | $540,651 | | | $508,427 | | | $30,045 | | | $538,472 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| POPULAR, INC. | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annualized net charge-offs to average loans held-in-portfolio | | 0.63 | % | | | | | 0.63 | % | | 1.00 | % | | | | | 0.98 | % | | 0.76 | % | | | | | 0.76 | % |
| Provision for loan losses to net charge-offs | | 1.18 | x | | | | | 1.10 | x | | 0.73 | x | | | | | 0.73 | x | | 1.13 | x | | | | | 1.03 | x |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| BPPR | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annualized net charge-offs to average loans held-in-portfolio | | 0.77 | % | | | | | 0.78 | % | | 1.25 | % | | | | | 1.22 | % | | 0.93 | % | | | | | 0.92 | % |
| Provision for loan losses to net charge-offs | | 0.96 | x | | | | | 0.88 | x | | 0.70 | x | | | | | 0.70 | x | | 1.08 | x | | | | | 0.98 | x |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| BPNA | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annualized net charge-offs to average loans held-in-portfolio | | | | | | | | 0.19 | % | | | | | | | | 0.21 | % | | | | | | | | 0.15 | % |
| Provision for loan losses to net charge-offs | | | | | | | | 3.94 | x | | | | | | | | 1.27 | x | | | | | | | | 2.26 | 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. |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED |
| (Unaudited) |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| 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. |
| | | | | | | | | | | | | | | | | | | | | | | |
| 31-Dec-16 |
| (Dollars in thousands) | | | Commercial | | | Construction | | | Legacy [2] | | | Mortgage | | | Lease financing | | | Consumer | | | Total | [3] |
| Specific ALLL | | | $42,375 | | | $- | | | $- | | | $44,610 | | | $535 | | | $23,857 | | | $111,377 | |
| Impaired loans | [1] | | $338,422 | | | $- | | | $- | | | $506,364 | | | $1,817 | | | $109,454 | | | $956,057 | |
| Specific ALLL to impaired loans | [1] | | 12.52 | % | | - | % | | - | % | | 8.81 | % | | 29.44 | % | | 21.80 | % | | 11.65 | % |
| General ALLL | | | $160,279 | | | $9,525 | | | $1,343 | | | $103,324 | | | $7,127 | | | $117,326 | | | $398,924 | |
| Loans held-in-portfolio, excluding impaired loans | [1] | | $10,460,085 | | | $776,300 | | | $45,293 | | | $6,189,997 | | | $701,076 | | | $3,644,939 | | | $21,817,690 | |
| General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | | 1.53 | % | | 1.23 | % | | 2.97 | % | | 1.67 | % | | 1.02 | % | | 3.22 | % | | 1.83 | % |
| Total ALLL | | | $202,654 | | | $9,525 | | | $1,343 | | | $147,934 | | | $7,662 | | | $141,183 | | | $510,301 | |
| Total non-covered loans held-in-portfolio | [1] | | $10,798,507 | | | $776,300 | | | $45,293 | | | $6,696,361 | | | $702,893 | | | $3,754,393 | | | $22,773,747 | |
| ALLL to loans held-in-portfolio | [1] | | 1.88 | % | | 1.23 | % | | 2.97 | % | | 2.21 | % | | 1.09 | % | | 3.76 | % | | 2.24 | % |
| [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 December 31, 2016 the general allowance on the covered loans amounted to $30.4 million. |
| | | | | | | | | | | | | | | | | | | | | | | |
| Variance |
| (Dollars in thousands) | | | Commercial | | | Construction | | | Legacy | | | Mortgage | | | Lease financing | | | Consumer | | | Total | |
| Specific ALLL | | | $8,901 | | | $- | | | $- | | | $(1,346) | | | $(13) | | | $(847) | | | $6,695 | |
| Impaired loans | | | $10,401 | | | $- | | | $- | | | $4,204 | | | $(14) | | | $(438) | | | $14,153 | |
| General ALLL | | | $(2,871) | | | $472 | | | $(177) | | | $2,631 | | | $248 | | | $(574) | | | $(271) | |
| Loans held-in-portfolio, excluding impaired loans | | | $2,792 | | | $55,005 | | | $(4,605) | | | $(72,578) | | | $16,764 | | | $(50,557) | | | $(53,179) | |
| Total ALLL | | | $6,030 | | | $472 | | | $(177) | | | $1,285 | | | $235 | | | $(1,421) | | | $6,424 | |
| Total non-covered loans held-in-portfolio | | | $13,193 | | | $55,005 | | | $(4,605) | | | $(68,374) | | | $16,750 | | | $(50,995) | | | $(39,026) | |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS |
| (Unaudited) |
| | | | | | | | | | | | |
| 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 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| 31-Dec-16 |
| Puerto Rico |
| (In thousands) | | Commercial | | Construction | | Mortgage | | Lease financing | | Consumer | | Total |
| Allowance for credit losses: | | | | | | | | | | | | |
| Specific ALLL non-covered loans | | $42,375 | | $- | | $42,428 | | $535 | | $23,185 | | $108,523 |
| General ALLL non-covered loans | | 147,311 | | 1,353 | | 100,892 | | 7,127 | | 102,778 | | 359,461 |
| ALLL - non-covered loans | | 189,686 | | 1,353 | | 143,320 | | 7,662 | | 125,963 | | 467,984 |
| Specific ALLL covered loans | | - | | - | | - | | - | | - | | - |
| General ALLL covered loans | | - | | - | | 30,159 | | - | | 191 | | 30,350 |
| ALLL - covered loans | | - | | - | | 30,159 | | - | | 191 | | 30,350 |
| Total ALLL | | $189,686 | | $1,353 | | $173,479 | | $7,662 | | $126,154 | | $498,334 |
| Loans held-in-portfolio: | | | | | | | | | | | | |
| Impaired non-covered loans | | $338,422 | | $- | | $497,488 | | $1,817 | | $106,615 | | $944,342 |
| Non-covered loans held-in-portfolio, excluding impaired loans | | 6,863,795 | | 85,558 | | 5,419,012 | | 701,076 | | 3,154,641 | | 16,224,082 |
| Non-covered loans held-in-portfolio | | 7,202,217 | | 85,558 | | 5,916,500 | | 702,893 | | 3,261,256 | | 17,168,424 |
| Impaired covered loans | | - | | - | | - | | - | | - | | - |
| Covered loans held-in-portfolio, excluding impaired loans | | - | | - | | 556,570 | | - | | 16,308 | | 572,878 |
| Covered loans held-in-portfolio | | - | | - | | 556,570 | | - | | 16,308 | | 572,878 |
| Total loans held-in-portfolio | | $7,202,217 | | $85,558 | | $6,473,070 | | $702,893 | | $3,277,564 | | $17,741,302 |
| | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Variance |
| (In thousands) | | Commercial | | Construction | | Mortgage | | Lease financing | | Consumer | | Total |
| Allowance for credit losses: | | | | | | | | | | | | |
| Specific ALLL non-covered loans | | $8,901 | | $- | | $(1,361) | | $(13) | | $(854) | | $6,673 |
| General ALLL non-covered loans | | (10,956) | | 608 | | 2,978 | | 248 | | (1,018) | | (8,140) |
| ALLL - non-covered loans | | (2,055) | | 608 | | 1,617 | | 235 | | (1,872) | | (1,467) |
| Specific ALLL covered loans | | - | | - | | - | | - | | - | | - |
| General ALLL covered loans | | - | | - | | (2,818) | | - | | 239 | | (2,579) |
| ALLL - covered loans | | - | | - | | (2,818) | | - | | 239 | | (2,579) |
| Total ALLL | | $(2,055) | | $608 | | $(1,201) | | $235 | | $(1,633) | | $(4,046) |
| Loans held-in-portfolio: | | | | | | | | | | | | |
| Impaired non-covered loans | | $10,401 | | $- | | $4,159 | | $(14) | | $(379) | | $14,167 |
| Non-covered loans held-in-portfolio, excluding impaired loans | | (148,288) | | 9,901 | | (50,941) | | 16,764 | | (33,798) | | (206,362) |
| Non-covered loans held-in-portfolio | | (137,887) | | 9,901 | | (46,782) | | 16,750 | | (34,177) | | (192,195) |
| Impaired covered loans | | - | | - | | - | | - | | - | | - |
| Covered loans held-in-portfolio, excluding impaired loans | | - | | - | | (20,283) | | - | | (615) | | (20,898) |
| Covered loans held-in-portfolio | | - | | - | | (20,283) | | - | | (615) | | (20,898) |
| Total loans held-in-portfolio | | $(137,887) | | $9,901 | | $(67,065) | | $16,750 | | $(34,792) | | $(213,093) |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS |
| (Unaudited) |
| | | | | | | | | | | | |
| 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 |
| |
| | | | | | | | | | | | |
| 31-Dec-16 |
| U.S. Mainland |
| (In thousands) | | Commercial | | Construction | | Legacy | | Mortgage | | Consumer | | Total |
| Allowance for credit losses: | | | | | | | | | | | | |
| Specific ALLL | | $- | | $- | | $- | | $2,182 | | $672 | | $2,854 |
| General ALLL | | 12,968 | | 8,172 | | 1,343 | | 2,432 | | 14,548 | | 39,463 |
| Total ALLL | | $12,968 | | $8,172 | | $1,343 | | $4,614 | | $15,220 | | $42,317 |
| Loans held-in-portfolio: | | | | | | | | | | | | |
| Impaired loans | | $- | | $- | | $- | | $8,876 | | $2,839 | | $11,715 |
| Loans held-in-portfolio, excluding impaired loans | | 3,596,290 | | 690,742 | | 45,293 | | 770,985 | | 490,298 | | 5,593,608 |
| Total loans held-in-portfolio | | $3,596,290 | | $690,742 | | $45,293 | | $779,861 | | $493,137 | | $5,605,323 |
| |
| | | | | | | | | | | | | |
| Variance |
| (In thousands) | | Commercial | | Construction | | Legacy | | Mortgage | | Consumer | | Total |
| Allowance for credit losses: | | | | | | | | | | | | |
| Specific ALLL | | $- | | $- | | $- | | $15 | | $7 | | $22 |
| General ALLL | | 8,085 | | (136) | | (177) | | (347) | | 444 | | 7,869 |
| Total ALLL | | $8,085 | | $(136) | | $(177) | | $(332) | | $451 | | $7,891 |
| Loans held-in-portfolio: | | | | | | | | | | | | |
| Impaired loans | | $- | | $- | | $- | | $45 | | $(59) | | $(14) |
Loans held-in-portfolio, excluding impaired loans | | 151,080 | | 45,104 | | (4,605) | | (21,637) | | (16,759) | | 153,183 |
| Total loans held-in-portfolio | | $151,080 | | $45,104 | | $(4,605) | | $(21,592) | | $(16,818) | | $153,169 |
| |
| Popular, Inc. |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table N - Reconciliation to GAAP Financial Measures |
| (Unaudited) | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| (In thousands, except share or per share information) | | 31-Mar-17 | | | 31-Dec-16 | | | 31-Mar-16 | |
| Total stockholders’ equity | | $5,190,213 | | | $5,197,957 | | | $5,250,300 | |
| Less: Preferred stock | | (50,160) | | | (50,160) | | | (50,160) | |
| | $5,140,053 | | | $5,147,797 | | | $5,200,140 | |
| Common shares outstanding at end of period | | 101,956,740 | | | 103,790,932 | | | 103,670,005 | |
| Common equity per share | | $50.41 | | | $49.60 | | | $50.16 | |
| | | | | | | | | |
| Total stockholders’ equity | | $5,190,213 | | | $5,197,957 | | | $5,250,300 | |
| Less: Preferred stock | | (50,160) | | | (50,160) | | | (50,160) | |
| Less: Goodwill | | (627,294) | | | (627,294) | | | (631,095) | |
| Less: Other intangibles | | (42,706) | | | (45,050) | | | (54,080) | |
| Total tangible common equity | | $4,470,053 | | | $4,475,453 | | | $4,514,965 | |
| Total assets | | $40,259,282 | | | $38,661,609 | | | $36,147,009 | |
| Less: Goodwill | | (627,294) | | | (627,294) | | | (631,095) | |
| Less: Other intangibles | | (42,706) | | | (45,050) | | | (54,080) | |
| Total tangible assets | | $39,589,282 | | | $37,989,265 | | | $35,461,834 | |
| Tangible common equity to tangible assets | | 11.29 | % | | 11.78 | % | | 12.73 | % |
| Common shares outstanding at end of period | | 101,956,740 | | | 103,790,932 | | | 103,670,005 | |
| Tangible book value per common share | | $43.84 | | | $43.12 | | | $43.55 | |
| | | | | | |
| Popular, Inc. | | | | | | |
| Financial Supplement to First Quarter 2017 Earnings Release |
| Table O - Financial Information - Westernbank Loans |
| (Unaudited) | | | | | | |
| | | | | | | | |
| | | | | | | |
| Revenues (Expenses) | | | | | | |
| | | Quarters ended | | |
| (In thousands) | | 31-Mar-17 | | 31-Dec-16 | | Variance |
| Interest income on WB loans | | $38,182 | | $39,642 | | $(1,460) |
| FDIC loss-share expense: | | | | | | |
| Amortization of indemnification asset | | (776) | | (864) | | 88 |
| 80% mirror accounting on credit impairment losses (reversal) [1] | | 148 | | 720 | | (572) |
| 80% mirror accounting on reimbursable expenses | | 921 | | 1,395 | | (474) |
80% mirror accounting on recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC | | 4,833 | | (26,215) | | 31,048 |
| Change in true-up payment obligation | | (7,385) | | (18,671) | | 11,286 |
| Arbitration decision charge | | - | | (81,273) | | 81,273 |
| Other | | (5,998) | | (5,426) | | (572) |
| Total FDIC loss-share expense | | (8,257) | | (130,334) | | 122,077 |
| Total income (expense) | | 29,925 | | (90,692) | | 120,617 |
| Provision (reversal) for loan losses- WB loans | | (499) | | (2,292) | | 1,793 |
| Total income (expense) less provision (reversal) for loan losses | | $30,424 | | $(88,400) | | $118,824 |
[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. |
| | | | | | | |
| | | | | | | |
| Non-personnel operating expenses | | | | | | |
| | | Quarters ended [1][2] | | |
| (In thousands) | | 31-Mar-17 | | 31-Dec-16 | | Variance |
| Professional fees | | $(2,635) | | $6,936 | | $(9,571) |
| OREO expenses | | 3,033 | | 2,766 | | 267 |
| Other operating expenses | | 1,615 | | 1,619 | | (4) |
| Total operating expenses | | $2,013 | | $11,321 | | $(9,308) |
| [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) | | 31-Mar-17 | | 31-Dec-16 | | Variance |
| Loans | | $1,810 | | $1,845 | | $(35) |
| FDIC loss-share asset | | 44 | | 126 | | (82) |
| |
| Activity in the carrying amount and accretable yield of loans accounted for under ASC 310-30 |
| | | | | | |
| | Quarters ended |
| | | 31-Mar-17 | | 31-Dec-16 |
| (In thousands) | | Accretable yield | | Carrying amount of loans | | Accretable yield | | Carrying amount of loans |
| Beginning balance | | $1,010,087 | | $1,738,329 | | $1,038,692 | | $1,767,539 |
| Accretion | | (36,892) | | 36,892 | | (38,149) | | 38,149 |
| Changes in expected cash flows | | 8,011 | | - | | 9,544 | | - |
| Collections / loan sales / charge-offs | | - | | (86,321) | | - | | (67,359) |
| Ending balance [1] | | 981,206 | | 1,688,900 | | 1,010,087 | | 1,738,329 |
| Allowance for loan losses - ASC 310-30 loans | | - | | (66,544) | | - | | (68,877) |
| Ending balance, net of allowance for loan losses | | $981,206 | | $1,622,356 | | $1,010,087 | | $1,669,452 |
| [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 $542 million as of March 31, 2017 and $563 million as of December 31, 2016. |
| | | | | | | | |
| Activity in the carrying amount of the FDIC indemnity asset |
| | | | | | | | |
| | | | Quarters ended |
| (In thousands) | | | | 31-Mar-17 | | | | 31-Dec-16 |
| Balance at beginning of period | | | | $69,334 | | | | $152,467 |
| Amortization | | | | (776) | | | | (864) |
| Credit impairment losses (reversal) to be covered under loss-sharing agreements | | | | 148 | | | | 720 |
| Reimbursable expenses to be covered under loss-sharing agreements | | | | 921 | | | | 1,395 |
| Net payments from FDIC under loss-sharing agreements | | | | - | | | | (3,111) |
| Arbitration decision charge | | | | - | | | | (81,273) |
| Other adjustments attributable to FDIC loss-sharing agreements | | | | (5,550) | | | | - |
| Balance at end of period | | | | 64,077 | | | | 69,334 |
| Balance due to the FDIC for recoveries on covered assets [1] | | | | (5,284) | | | | (27,578) |
| Net balance of indemnity asset and amounts due from the FDIC | | | | $58,793 | | | | $41,756 |
[1] Balance due to the FDIC for recoveries on covered assets for the quarter ended December 31, 2016 amounting to $27.6 million was included in other liabilities in the accompanying consolidated statement of condition. |
| | | | | | | | |
| Activity in the remaining FDIC loss-share asset amortization |
| | | | | | | | |
| | | | Quarters ended |
| (In thousands) | | | | 31-Mar-17 | | | | 31-Dec-16 |
| Balance at beginning of period | | | | $4,812 | | | | $7,305 |
| Amortization | | | | (776) | | | | (864) |
| Impact of change in projected losses | | | | (107) | | | | (1,629) |
| Balance at end of period | | | | $3,929 | | | | $4,812 |
CONTACT:
Popular, Inc.
Investor Relations:
Brett Scheiner, 212-417-6721
Investor Relations Officer
BScheiner@BPOP.com
or
Media Relations:
Teruca Rullán, 787-281-5170
Mobile: 917-679-3596
Senior Vice President, Corporate Communications
