| Item 2.02. | Results of Operations and Financial Condition |
On October 28, 2020, Popular, Inc. (the “Corporation”) issued a press release announcing its unaudited financial results for the quarter ended September 30, 2020, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished pursuant to this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any of the Corporation’s filings under the Securities Act of 1933, as amended, unless otherwise expressly stated in such filing.
| Item 2.05. | Costs Associated with Exit or Disposal Activities. |
On October 27, 2020, Popular Bank (the “Bank”), the United States mainland banking subsidiary of the Corporation, authorized and approved a strategic realignment of the Bank’s New York Metro branch network that will result in eleven (11) branch closures across the New York Metro region and related branch and support staff reductions. The branch closures are expected to be completed, subject to applicable regulatory requirements, by January 29, 2021.
This strategic realignment, which will allow the Bank to reduce its operating expenses, leverage resources to enhance its focus on small and medium size businesses and support changing customer behavior, was approved after an assessment of the Bank’s current branch network, including its usage, and proximity to other branches of the Bank, as well as customer needs. The Bank will maintain twenty-seven (27) branches in its New York Metro region, located throughout Brooklyn, Bronx, Manhattan and Queens, as well as in northern New Jersey.
As a result of the Bank’s closure of the eleven (11) New York Metro region branches, the Corporation expects to record a total pre-tax charge of approximately $24.5 million, of which $23.1 million is expected to be recognized during the fourth quarter of 2020. This aggregate pre-tax charge includes approximately $2.4 million in costs associated with severance and related benefit costs for the 83 impacted employees and charges of approximately $20.0 million associated with the impairment of right-of-use assets related to the abandonment of real property leases. Severance and related benefit costs are expected to be paid during 2021, while costs related to each abandoned real property lease are expected be paid the earlier of (i) the termination date of each such lease and (ii) the end of each such lease’s original term. The Corporation anticipates annual operating expense savings of approximately $13 million as a result of this strategic realignment. These estimates could change as the Corporation’s plan evolves and becomes finalized.
| Item 2.06. | Material Impairments. |
The information contained in Item 2.05 of this Current Report on Form 8-K is incorporated into this Item 2.06 by reference.
| Item 7.01. | Regulation FD Disclosure. |
The Corporation is furnishing information regarding its conference call to discuss its financial results for the quarter ended September 30, 2020. A copy of the presentation to be used by the Corporation on the conference call is attached to this Current Report on Form 8-K as Exhibit 99.2.
On October 28, 2020, the Corporation issued a press release announcing Popular Bank’s New York Metro branch network strategic realignment. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.3.
The information furnished pursuant to this Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.2 and 99.3, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any of the Corporation’s filings under the Securities Act of 1933, as amended, unless otherwise expressly stated in such filing.
