Popular, Inc. (the "Corporation" or "Popular") BPOP reported net income of $74.8 million and adjusted net income of $90.3 million for the quarter ended March 31, 2015, compared to net income of $48.9 million and an adjusted net income of $76.8 million for the quarter ended December 31, 2014.
Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: "We are pleased to report that we started the year on solid footing, with strong results and stable credit metrics, notwithstanding the difficult macroeconomic environment in our principal market, Puerto Rico. We are especially encouraged by the trends we are seeing at Popular Community Bank, which experienced organic commercial loan growth of 6% in the quarter. The acquisition of approximately $2.3 billion of Doral Bank's assets further boosts our position, as it strengthens our Puerto Rico franchise and provides additional momentum to our U.S. operations."
| Earnings Highlights | |||||||||||
| (Unaudited) | Quarters ended | ||||||||||
| (Dollars in thousands, except per share information) | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | ||||||||
| Net interest income | $ | 343,195 | $ | 326,861 | $ | 351,171 | |||||
| Provision for loan losses – non-covered loans | 29,711 | 51,637 | 54,122 | ||||||||
| Provision (reversal of provision) for loan losses – covered loans [1] | 10,324 | (3,646 | ) | 25,714 | |||||||
| Net interest income after provision for loan losses | 303,160 | 278,870 | 271,335 | ||||||||
| FDIC loss share income (expense) | 4,139 | (18,693 | ) | (24,206 | ) | ||||||
| Other non-interest income | 111,096 | 122,057 | 120,238 | ||||||||
| Operating expenses | 312,342 | 330,006 | 277,599 | ||||||||
| Income from continuing operations before income tax | 106,053 | 52,228 | 89,768 | ||||||||
| Income tax expense | 32,568 | 12,472 | 23,264 | ||||||||
| Income from continuing operations | 73,485 | 39,756 | 66,504 | ||||||||
| Income from discontinued operations, net of tax | 1,341 | 9,086 | 19,905 | ||||||||
| Net income | $ | 74,826 | $ | 48,842 | $ | 86,409 | |||||
| Net income applicable to common stock | $ | 73,895 | $ | 47,911 | $ | 85,478 | |||||
| Net income per common share from continuing operations - Basic | $ | 0.71 | $ | 0.38 | $ | 0.64 | |||||
| Net income per common share from continuing operations - Diluted | $ | 0.71 | $ | 0.37 | $ | 0.64 | |||||
| Net income per common share from discontinued operations - Basic | $ | 0.01 | $ | 0.09 | $ | 0.19 | |||||
| Net income per common share from discontinued operations - Diluted | $ | 0.01 | $ | 0.09 | $ | 0.19 | |||||
|
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. |
|||||||||||
Significant events
On February 27, 2015, the Corporation's Puerto Rico banking subsidiary, Banco Popular de Puerto Rico ("BPPR"), in an alliance with co-bidders, including the Corporation's U.S. mainland banking subsidiary, Banco Popular North America, doing business as Popular Community Bank ("PCB"), acquired certain assets and all deposits (other than certain brokered deposits) of Doral Bank ("Doral") from the Federal Deposit Insurance Corporation (FDIC), as receiver (the "Doral Acquisition").
Under the FDIC's bidding format, BPPR was the lead bidder and party to the purchase and assumption agreement with the FDIC covering all assets and deposits acquired by it and its alliance co-bidders. BPPR entered into back to back purchase and assumption agreements with the alliance co-bidders for the transferred assets and deposits. The other co-bidders which formed part of the alliance led by BPPR were First Bank Puerto Rico, Centennial Bank and a vehicle formed by J.C. Flowers III L.P. BPPR has entered into transition service agreements with each of the alliance co-bidders.
After taking into account the transfers to the unaffiliated alliance co-bidders, BPPR and PCB assumed deposits amounting to approximately $2.2 billion and acquired commercial and residential loans amounting to approximately $1.7 billion, substantially all of which were in performing status. Additionally, the acquisition included approximately $0.6 billion in investment securities, cash and other assets. There is no loss-sharing arrangement with the FDIC on the acquired assets.
On February 27, 2015, the FDIC, as receiver for Doral Bank, accepted BPPR's bid for the purchase of the mortgage servicing rights on three pools of residential mortgage loans of approximately $5.0 billion in unpaid principal balance, for a purchase price currently estimated at $48.6 million. The transfers of the mortgage servicing rights are subject to a number of specified closing conditions, including the consent of each of Ginnie Mae, Fannie Mae and Freddie Mac in a form acceptable to BPPR, and other customary closing conditions. On April 23, 2015, BPPR closed the acquisition of approximately $2.7 billion in Ginnie Mae mortgage servicing rights. BPPR is in negotiations for the transfers of the Fannie Mae and Freddie Mac mortgage servicing rights which are expected to be completed during the second quarter of 2015.
As a result of the Doral Acquisition, the Corporation recorded goodwill of approximately $43 million and a core deposit intangible asset of approximately $24 million. Refer to the statement of condition section of this earnings release for a detail of the assets and liabilities of the business acquired from Doral Bank, as part of the FDIC assisted transaction, as of March 31, 2015.
| Quarter ended | ||||||||||||||||
| (Unaudited) | 31-Mar-15 | |||||||||||||||
| (In thousands) |
Actual Results (US GAAP) |
BPNA Reorganization [2] |
Doral Acquisition [3] |
Adjusted Results (Non-GAAP) |
||||||||||||
| Net interest income | $ | 343,195 | $ | - | $ | - | $ | 343,195 | ||||||||
| Provision for loan losses – non-covered loans | 29,711 | - | - | 29,711 | ||||||||||||
| Provision (reversal of provision) for loan losses – covered loans [1] | 10,324 | - | - | 10,324 | ||||||||||||
| Net interest income (expense) after provision for loan losses | 303,160 | - | - | 303,160 | ||||||||||||
| Net loss on sale of loans, including valuation adjustments on loans held-for-sale | (79 | ) | - | - | (79 | ) | ||||||||||
| FDIC loss share income | 4,139 | - | - | 4,139 | ||||||||||||
| Other non-interest income | 111,175 | - | 1,121 | 110,054 | ||||||||||||
| Personnel costs | 116,458 | - | 2,432 | 114,026 | ||||||||||||
| Net occupancy expenses | 21,709 | 643 | 21,066 | |||||||||||||
| Professional fees | 75,528 | - | 6,997 | 68,531 | ||||||||||||
| Restructuring costs | 10,753 | 10,753 | - | - | ||||||||||||
| Other operating expenses | 87,894 | - | - | 87,894 | ||||||||||||
| Income from continuing operations before income tax | 106,053 | (10,753 | ) | (8,951 | ) | 125,757 | ||||||||||
| Income tax expense | 32,568 | - | (2,896 | ) | 35,464 | |||||||||||
| Income from continuing operations | $ | 73,485 | $ | (10,753 | ) | $ | (6,055 | ) | $ | 90,293 | ||||||
| Income from discontinued operations, net of tax | $ | 1,341 | $ | 1,341 | $ | - | $ | - | ||||||||
| Net income | $ | 74,826 | $ | (9,412 | ) | $ | (6,055 | ) | $ | 90,293 | ||||||
| [1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. |
| [2] Represents restructuring charges associated with the reorganization of BPNA. |
| [3] Includes $1.1 million on fees charged for services provided to the alliance co-bidders, including loan servicing and other interim services, personnel costs related to Doral employees retained on a temporary basis and non-recurring incentive compensation for an aggregate of $2.4 million, building rent expense of Doral's administrative offices for $0.6 million and professional and legal fees directly associated with the Doral acquisition for $7.0 million. |
| Quarter ended | |||||||||||||||||
| (Unaudited) | 31-Dec-14 | ||||||||||||||||
| (In thousands) |
Actual Results (US GAAP) |
BPNA Reorganization [2] |
Other Adjustments |
Adjusted Results (Non-GAAP) |
|||||||||||||
| Net interest income | $ | 326,861 | $ | (18,591 | ) | $ | - | $ | 345,452 | ||||||||
| Provision for loan losses – non-covered loans | 51,637 | 878 | - | 50,759 | |||||||||||||
| Reversal of provision for loan losses – covered loans [1] | (3,646 | ) | - | - | (3,646 | ) | |||||||||||
| Net interest income after provision for loan losses | 278,870 | (19,469 | ) | - | 298,339 | ||||||||||||
| Net gain on sale of loans, including valuation adjustments on loans held-for-sale | 10,946 | 1,684 | - | 9,262 | |||||||||||||
| FDIC loss share expense | (18,693 | ) | - | - | (18,693 | ) | |||||||||||
| Other non-interest income | 111,111 | - | - | 111,111 | |||||||||||||
| Personnel costs | 110,736 | - | 2,974[3] | 107,762 | |||||||||||||
| Net occupancy expenses | 23,877 | - | 1,895[4] | 21,982 | |||||||||||||
| Professional fees | 80,383 | - | - | 80,383 | |||||||||||||
| Loss on early extinguishment of debt | 532 | 532 | - | - | |||||||||||||
| Restructuring costs | 13,861 | 13,861 | - | - | |||||||||||||
| Other operating expenses | 100,617 | - | - | 100,617 | |||||||||||||
| Income from continuing operations before income tax | 52,228 | (32,178 | ) | (4,869 | ) | 89,275 | |||||||||||
| Income tax expense | 12,472 | - | - | 12,472 | |||||||||||||
| Income from continuing operations | $ | 39,756 | $ | (32,178 | ) | $ | (4,869 | ) | $ | 76,803 | |||||||
| Income from discontinued operations, net of tax | $ | 9,086 | $ | 9,086 | $ | - | $ | - | |||||||||
| Net income | $ | 48,842 | $ | (23,092 | ) | $ | (4,869 | ) | $ | 76,803 | |||||||
| [1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. |
| [2] Includes loss on the refinancing of structured repos for $18.6 million recorded as interest expense, impact on provision for loan losses related to NPL sales of $878 thousand, gain on bulk sales of NPLs of $1.7 million and restructuring cost of $13.9 million. |
| [3] Represents the impact of the compensation package granted upon separation of an officer of the Corporation equal to approximately $3.0 million. |
| [4] Represents the net loss on the early cancellation of a lease at BPNA of $1.9 million. |
| Quarters ended | ||||||||||||
| (Unaudited) | Adjusted Results Non-GAAP | |||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | Variance | |||||||||
| Net interest income | $ | 343,195 | $ | 345,452 | $ | (2,257 | ) | |||||
| Provision for loan losses – non-covered loans | 29,711 | 50,759 | (21,048 | ) | ||||||||
| Provision (reversal of provision) for loan losses – covered loans [1] | 10,324 | (3,646 | ) | 13,970 | ||||||||
| Net interest income after provision for loan losses | 303,160 | 298,339 | 4,821 | |||||||||
| Net (loss) gain on sale of loans, including valuation adjustments on loans held-for-sale | (79 | ) | 9,262 | (9,341 | ) | |||||||
| FDIC loss share income (expense) | 4,139 | (18,693 | ) | 22,832 | ||||||||
| Other non-interest income | 110,054 | 111,111 | (1,057 | ) | ||||||||
| Personnel costs | 114,026 | 107,762 | 6,264 | |||||||||
| Net occupancy expenses | 21,066 | 21,982 | (916 | ) | ||||||||
| Professional fees | 68,531 | 80,383 | (11,852 | ) | ||||||||
| Other operating expenses | 87,894 | 100,617 | (12,723 | ) | ||||||||
| Income from continuing operations before income tax | 125,757 | 89,275 | 36,482 | |||||||||
| Income tax expense | 35,464 | 12,472 | 22,992 | |||||||||
| Income from continuing operations | $ | 90,293 | $ | 76,803 | $ | 13,490 | ||||||
| Net income | $ | 90,293 | $ | 76,803 | $ | 13,490 | ||||||
| [1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. | ||||||||||||
Net interest income
-
For the quarter ended March 31, 2015, the Corporation had a net
interest income of $343.2 million, compared to an adjusted net
interest income of $345.5 million for the fourth quarter of 2014,
which excludes the impact of the $18.6 million expense related to the
refinancing of structured repos at PCB. The net interest margin was
4.57%, a decrease of 13 basis points from the adjusted previous
quarter's net interest margin. The impact of having two less days in
the quarter ended March 31, 2015 resulted in a reduction of
approximately $4.9 million in net interest income when compared to the
previous quarter.
The decrease of $2.3 million in the adjusted net interest income is mainly related to:- A decrease in income from commercial loans of $1.0 million, or 4 basis points, due to the impact of fewer days in the quarter and lower interest collected on resolution of non-performing loans at BPNA, partially offset by higher volume and yields from Doral Bank.
-
A decrease of $3.9 million, or 17 basis points, on income from
covered loans due to a lower volume of loans as part of the normal
portfolio run-off and lower yields, reflecting the impact of the
quarterly recast process. Refer to Table O for a schedule of the
accretable yield for covered loans accounted for under ASC 310-30.
These negative variances in net interest income were offset in part by: - Higher interest income from construction loans by $2.3 million due to higher volume related to loans acquired from Doral Bank in the US.
- An increase in income from mortgage loans of $1.8 million mostly due to higher volumes in Puerto Rico related to the Doral Acquisition
- The Doral Acquisition on February 27, 2015 added approximately $9.8 million in net interest income for the first quarter of 2015. This was comprised mainly of interest income of $11.0 million from loans and investments with an average yield of 6.50% and interest expense of $1.3 million from deposits with an average yield of 0.91%.
BPPR's net interest margin for the quarter was 5.00%, a decrease of 15 basis points from the previous quarter. Net interest income amounted to $306.6 million for the quarter ended March 31, 2015 compared with $311.2 million for the previous quarter. The decrease in the net interest income was mainly due to the above mentioned decrease in interest income from covered and commercial loans mostly due to fewer days in the quarter, partially offset by higher interest income from mortgage loan portfolios, net of related funding. The contribution from the Doral Acquisition to BPPR's net interest income was approximately $5.1 million. Cost of interest bearing deposits in Puerto Rico were flat at 53 basis points, even after the impact of Doral's acquired deposits.
BPNA's net interest margin was 3.82%, compared to 2.40% for the previous quarter, mainly driven by the previously mentioned repo refinancing during the fourth quarter of 2014. Excluding the impact of the repos refinancing, net interest margin was flat when compared to the previous quarter. BPNA's loan portfolio increased by approximately $76 million, excluding the impact of the Doral Acquisition, mainly driven by commercial loans which grew by approximately $107.4 million, or 6%. The net interest income was $52.1 million, compared with $49.8 million for the fourth quarter of 2014, excluding the impact of the previously mentioned repos refinancing. The contribution from the Doral Aquisition to BPNA's net interest income was $4.7 million.
Non-interest income
Non-interest income was $115.2 million for the first quarter of 2015, an increase of $11.9 million when compared with the fourth quarter of 2014. Excluding the $1.1 million in other income related to servicing the Doral Acquisition's co-bidders assets during this quarter and the $1.7 million impact of the gain on bulk sales of NPLs during the fourth quarter of 2014 as part of the BPNA reorganization, non-interest income increased by $12.4 million when compared to the fourth quarter of 2014, driven primarily by the following:
- Favorable variance in the FDIC loss-share expense by $22.8 million driven by a positive variance in the mirror accounting on credit impairment losses by $11.5 million, a positive variance in the fair value of the true-up payment obligation by $7.0 million, and higher mirror accounting on reimbursable expenses by $2.8 million. See additional details about covered portfolio and FDIC indemnity asset in Table O.
- Favorable variance in adjustments to indemnity reserves by $8.8 million due to lower provision on loans previously sold with recouse and the reversal of $3.2 million in the indemnity reserve related to the bulk sale of non-performing assets completed during the first quarter of 2013.
- Higher mortgage banking activities income by $4.1 million mainly due to higher mortgage servicing fees by $2.9 million and a favorable variance in the valuation adjustment on mortgage servicing rights of $1.3 million at the BPPR segment. Refer to Table F for additional details on mortgage banking activities.
These positive variances were partially offset by:
- Unfavorable variance in net gain/(loss) on sale of loans, including valuation adjustments on loans held-for-sale by $9.3 million mostly at BPNA due to individual commercial NPLs sales during the fourth quarter of 2014, as part of workout activities.
- Lower other service fees by $7.5 million mostly at the BPPR segment due to lower contingent insurance commission revenues, which were realized during the fourth quarter of 2014, lower credit card fees and lower fees from the sale and administration of investment products due to lower transaction volumes in the first quarter of 2015. Refer to Table F for a breakdown of other service fees.
- Negative variance in other operating income by $5.0 million mainly due to lower aggregated net earnings from investments accounted under the equity method.
Refer to Table B for further details.
| Financial Impact of FDIC-Assisted Transaction | |||||||||||
| (Unaudited) | Quarters ended | ||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | ||||||||
|
Income Statement |
|||||||||||
| Interest income on covered loans | $ | 57,431 | $ | 61,285 | $ | 81,098 | |||||
| Total FDIC loss share income (expense) | 4,139 | (18,693 | ) | (24,206 | ) | ||||||
| Provision for loan losses | 10,324 | (3,646 | ) | 25,714 | |||||||
| Total revenues less provision for loan losses | $ | 51,246 | $ | 46,238 | $ | 31,178 | |||||
|
Balance Sheet |
|||||||||||
| Loans covered under loss-sharing agreements with FDIC | $ | 2,456,552 | $ | 2,542,662 | $ | 2,870,054 | |||||
| FDIC loss share asset | 409,844 | 542,454 | 833,721 | ||||||||
| FDIC true-up payment obligation | 125,140 | 129,304 | 126,345 | ||||||||
See additional details on accounting for FDIC-Assisted transaction in Table O.
Operating expenses
Operating expenses decreased by $17.7 million when compared with the fourth quarter of 2014. Excluding the impact of the significant events detailed in the Adjusted Results (Non-GAAP) tables above, operating expenses decreased by $19.2 million compared to the fourth quarter of 2014, driven primarily by:
- Lower professional fees by $11.9 million, mainly due to legal fees incurred in connection with the FDIC arbitration proceedings and other corporate matters during the previous quarter.
- Lower other operating taxes by $5.8 million, mainly due to elimination of the Puerto Rico gross tax and lower municipal license tax, partially offset by an increase of personal property tax.
- Lower other operating expenses by $4.5 million, mainly due to lower sundry losses and legal reserves.
- Lower FDIC deposit insurance by $2.9 million, mainly driven by improvements in the asset quality and earnings trends.
- Lower business promotion by $2.7 million, mainly as a result of lower seasonal advertising expense at BPPR.
- Lower net occupancy expense by $0.9 million, mainly at BPNA as a result of lower rent expense.
These decreases were partially offset by:
- Higher personnel cost by $6.3 million, mainly at BPPR due to pension and postretirement expense related to adjustments to the mortality table and discount rate used for actuarial assumptions; higher incentives and salaries and higher social security and unemployment expenses as a portion of these taxes had reached their limit for the fourth quarter of 2014.
- Higher other real estate owned expenses by $3.1 million, mainly at BPPR due to higher property taxes and higher write-downs.
Non-personnel credit-related costs, which include collections, appraisals, credit related fees, and OREO expenses, amounted to $29.0 million for the first quarter of 2015, compared with $27.2 million for the fourth quarter of 2014. The increase was principally due to higher OREO expenses from the covered portfolio at BPPR.
Full-time equivalent employees ("FTEs"), including discontinued operations, were 8,203 as of March 31, 2015, compared with 7,752 as of December 31, 2014, and 8,053 as of March 31, 2014. The increase is due to the Doral Acquisition.
For a breakdown of operating expenses by category refer to table B.
Income taxes
Income tax expense amounted to $32.6 million for first quarter of 2015, or $35.5 million on an adjusted basis, compared to $12.5 million for the previous quarter. The effective income tax rate for the first quarter of 2015, on an adjusted basis, was 28%, compared to 14% for the fourth quarter of 2014. The increase in the effective tax rate was driven by the composition and source of taxable income for the quarter. Refer to earnings highlights section above for a description of adjusted results.
While the current impact on taxable income of the U.S. reorganization and the integration of the Doral Acquisition continue to support a full valuation of the deferred tax asset at the U.S. mainland operations, the incremental earnings expected to be generated after stabilization would be considered additional positive evidence in our analysis that could result in the eventual realization of a portion of this asset.
Credit Quality
The following table presents information on non-performing assets:
| Non-Performing Assets | ||||||||||||
| (Unaudited) | ||||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | |||||||||
| Total non-performing loans held-in-portfolio, excluding covered loans | $ | 664,953 | $ | 630,483 | $ | 635,334 | ||||||
| Non-performing loans held-for-sale | 8,404 | 18,899 | 789 | |||||||||
| Other real estate owned ("OREO"), excluding covered OREO | 128,170 | 135,500 | 136,965 | |||||||||
| Total non-performing assets, excluding covered assets | 801,527 | 784,882 | 773,088 | |||||||||
| Covered loans and OREO | 133,211 | 148,099 | 182,659 | |||||||||
| Total non-performing assets | $ | 934,738 | $ | 932,981 | $ | 955,747 | ||||||
| Net charge-offs for the quarter (excluding covered loans) | $ | 35,886 | $ | 50,187 | $ | 43,246 | ||||||
| Ratios (excluding covered loans): | ||||||||||||
| Non-covered loans held-in-portfolio (1) | $ | 21,012,930 | $ | 19,404,451 | $ | 21,611,777 | ||||||
| Non-performing loans held-in-portfolio to loans held-in-portfolio (1) | 3.16 | % | 3.25 | % | 2.94 | % | ||||||
| Allowance for loan losses to loans held-in-portfolio | 2.46 | 2.68 | 2.51 | |||||||||
| Allowance for loan losses to non-performing loans, excluding loans held-for-sale | 77.63 | 82.43 | 85.40 | |||||||||
| Refer to Table H for additional information. | ||||||||||||
| Provision for Loan Losses | ||||||||||||
| (Unaudited) | Quarters ended | |||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | |||||||||
| Provision (reversal) for loan losses - non-covered loans: | ||||||||||||
| BPPR | $ | 31,913 | $ | 52,206 | $ | 53,915 | ||||||
| BPNA | (2,202 | ) | (569 | ) | 207 | |||||||
| Total provision for loan losses - non-covered loans | 29,711 | 51,637 | 54,122 | |||||||||
| Provision (reversal) for loan losses - covered loans | 10,324 | (3,646 | ) | 25,714 | ||||||||
| Total provision for loan losses | $ | 40,035 | $ | 47,991 | $ | 79,836 | ||||||
Credit Quality
The Corporation maintained stable credit quality during the first quarter of 2015, in spite of the challenging economic conditions that persist in Puerto Rico, reflecting of the improved risk profile of the loan portfolios and the result of strategic initiatives executed by the Corporation over the past several years. These results were impacted by the addition of certain non-performing loans due to the failure and related loan acquisition of Doral Bank. The US region continued to exhibit strong asset quality during the quarter, with low levels of delinquencies and charge-offs.
The credit quality performance for the first quarter of 2015 for the Corporation's non-covered portfolios, including $1.6 billion as of March 31, 2015, of loans acquired in the Doral Acquisition was as follows:
- Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $64.5 million, as the fourth quarter of 2014 included the addition of the previously disclosed $75.0 million public sector borrower. Excluding this impact from the prior quarter, NPLs inflows increased by $10.6 million, mainly due to mortgage inflows related to the addition to NPL status of $16.6 million of loans previously serviced by Doral Bank under a servicing agreement that required Doral to advance principal and interest payments irrespective of borrower delinquencies.
- Non-performing loans held-in-portfolio increased by $34.5 million during the quarter ended March 31, 2015, of which $27.9 million were attributable to Doral Bank's failure and acquisition. BPPR mortgage NPLs includes the aforementioned $16.6 million of loans previously serviced by Doral, and the BPNA segment includes $7.4 million of acquired commercial loans placed in NPL status following the acquisition. At March 31, 2015, NPLs represented 3.2% of total loans held-in-portfolio, compared to 3.3% in December 31, 2014. The decrease was due mainly to the impact of the Doral portfolio on the total loan base.
- Net charge-offs, excluding write-downs/(recoveries), totaled $35.9 million, or an annualized 0.72% of average non-covered loans held-in-portfolio in the first quarter of 2015, compared to $50.2 million, or 1.04%, in the fourth quarter of 2014. The decrease of $14.3 million was primarily driven by a decline of $15.8 million in the BPPR segment, mainly lower commercial NCOs. Refer to Table J for further information on net charge-offs and related ratios.
- The allowance for loan losses remained essentially flat decreasing by $3.5 million from the fourth quarter of 2014, mainly driven by the BPPR commercial portfolio. The general and specific reserves related to non-covered loans totaled $377.2 million and $139.0 million, respectively, at quarter-end, compared with $379.6 million and $140.1 million, respectively, as of December 31, 2014. The ratio of the allowance for loan losses to loans held-in-portfolio decreased to 2.46% in the first quarter of 2015, compared to 2.68% in the previous quarter, mostly due to impact of the Doral portfolio on the total loan base. Excluding Doral Bank portfolio, allowance to loans ratio was 2.66%.
- The ratio of the allowance for loan losses to NPLs held-in-portfolio stood at 77.6%, compared to 82.4% in the previous quarter. Excluding the impact of Doral related NPLs, ALLL to NPLs ratio remained relatively flat at 81.0%.
- The provision for loan losses for the first quarter of 2015 amounted to $29.7 million, a decline of $21.9 million from the previous quarter stemming from lower NCO activity in the BPPR segment, as mentioned above. The provision for the first quarter of 2015 represented 82.8% of net charge-offs.
| Credit Quality by Segment | ||||||||||||
| (Unaudited) | ||||||||||||
| (In thousands) | Quarters ended | |||||||||||
| BPPR | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | |||||||||
| Provision for loan losses | $ | 31,913 | $ | 52,206 | $ | 53,915 | ||||||
| Net charge-offs | 36,772 | 52,523 | 45,950 | |||||||||
| Total non-performing loans held-in-portfolio, excluding covered loans | 638,017 | 611,383 | 532,223 | |||||||||
| Allowance / non-covered loans held-in-portfolio | 2.92 | % | 3.07 | % | 2.72 | % | ||||||
| Quarters ended | ||||||||||||
| BPNA | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | |||||||||
| Provision for loan losses (reversal of provision) - Continuing operations | $ | (2,202 | ) | $ | (569 | ) | $ | 207 | ||||
| Provision for loan losses (reversal of provision) - Discontinued operations | - | - | (6,764 | ) | ||||||||
| Net charge-offs (recoveries) - Continuing operations | (886 | ) | (2,336 | ) | 2,841 | |||||||
| Net charge-offs (recoveries) - Discontinued operations | - | - | (5,545 | ) | ||||||||
| Total non-performing loans held-in-portfolio | 26,936 | 19,100 | 103,111 | |||||||||
| Allowance / non-covered loans held-in-portfolio | 0.72 | % | 0.88 | % | 1.91 | % | ||||||
BPPR Segment
- Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $70.1 million from the fourth quarter of 2014, mostly driven by lower commercial inflows of $85.3 million, primarily associated with the addition of a $75.0 million public sector borrower in the prior quarter. This decrease was in part offset by an increase in the mortgage NPL inflows of $15.4 million from the previous quarter, mainly driven by the addition of $16.6 million of loans previously serviced by Doral, as mentioned above and $2.1 million of acquired loans. Excluding this impact, mortgage NPL inflows decreased by $3.3 million.
- Total non-performing loans held-in-portfolio increased by $26.6 million from the fourth quarter of 2014, mainly driven by higher mortgage NPLs of $24.5 million. Mortgage NPLs include the above mentioned $16.6 million impact of loans previously serviced by Doral. At March 31, 2015, NPLs to total loans held-in-portfolio was unchanged at 3.8%, compared to the fourth quarter of 2014.
- Net charge-offs were $36.8 million, decreasing by $15.8 million from the fourth quarter of 2014, reflecting lower NCOs in all portfolios, including commercial, construction and consumer NCOs by $9.1 million, $2.6 million and $2.3 million, respectively. The ratio of net charge-offs to average loans held-in-portfolio decreased to 0.92% on an annualized basis from 1.33% in the previous quarter.
- The allowance for loan losses was $484.3 million, a decrease of $4.9 million from the fourth quarter of 2014. The allowance for loan losses was 2.9% of loans held-in-portfolio, compared to 3.1% in the previous quarter. The ratio of the allowance for loan losses to NPLs held-in-portfolio stood at 75.9%, compared to 80.0% in the previous quarter. Excluding the impact of Doral related NPLs, ALLL to NPLs ratio remained relatively flat at 78.4%.
- The provision for loan losses for the first quarter of 2015 amounted to $31.9 million, decreasing by $20.3 million from the previous quarter, predominantly driven by the aforementioned decline in NCO activity. The provision for the first quarter represented 86.8% of net charge-offs.
BPNA Segment
- Total NPLs held-in-portfolio increased by $7.8 million of which $7.4 million were related to commercial loans acquired in the Doral Acquisition. NPL to total loans held-in-portfolio was 0.61%, compared to 0.55% in the fourth quarter of 2014. Excluding Doral loans that were placed in NPL status following the acquisition, NPL to loans ratio was 0.54%.
- Net charge-offs, excluding write-downs related to loans transfered to held for sale amounted to recoveries of $0.9 million, compared to recoveries of $2.3 million in the fourth quarter of 2014. The ratio of net charge-offs to average loans held-in-portfolio was a recovery of 9 basis points on an annualized basis, compared to a recovery of 27 basis points in the previous quarter.
- The allowance for loan losses increased slightly to $31.9 million from $30.6 million in the previous quarter, mainly due to loan growth. The allowance for loan losses as a percentage of loans held-in-portfolio decreased to 0.72% from 0.88% in the previous quarter. The ratio of allowance for loan losses to NPLs held-in-portfolio stood at 118.6%, compared to 160.1% in the previous quarter. The decrease in allowance coverage ratios was mainly related to the impact of the Doral portfolio. Excluding Doral, the previously referred ratios stood at 0.90% and 167.1%, respectively.
- The provision for loan losses in the first quarter of 2015 amounted to a provision release of $2.2 million, primarily due to a $2.7 million recovery from bulk loan sales.
| Financial Condition Highlights | |||||||||
| (Unaudited) | |||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | ||||||
| Money market, trading and investment securities | $ | 8,254,845 | $ | 7,541,148 | $ | 8,056,145 | |||
| Loans not covered under loss sharing agreements with the FDIC | 21,012,930 | 19,404,451 | 21,611,777 | ||||||
| Loans covered under loss sharing agreements with the FDIC | 2,456,552 | 2,542,662 | 2,870,054 | ||||||
| Total assets | 35,624,840 | 33,096,695 | 36,744,162 | ||||||
| Deposits | 27,273,689 | 24,807,535 | 27,265,651 | ||||||
| Borrowings | 2,891,156 | 3,004,685 | 3,715,821 | ||||||
| Liabilities from discontinued operations | 1,930 | 5,064 | - | ||||||
| Total liabilities | 31,247,720 | 28,829,313 | 31,998,415 | ||||||
| Stockholders' equity | 4,377,120 | 4,267,382 | 4,745,747 | ||||||
| Impact of Assets and Liabilities Acquired from Doral Bank at March 31, 2015 | ||||||
| (Unaudited) | ||||||
| (In thousands) | 31-Mar-15 | (1) | ||||
| Cash and due from banks | $ | 111,492 | ||||
| Investment securities available-for-sale | 170,340 | |||||
| Loans held-for-sale | 24,483 | |||||
| Loans held-in-portfolio | 1,641,930 | |||||
| Premises and equipment, net | 2,559 | |||||
| Other real estate | 1,007 | |||||
| Accrued income receivable | 9,017 | |||||
| Other assets | 183,114 | |||||
| Goodwill | 42,634 | |||||
| Other intangible assets | 23,376 | |||||
| Total assets | $ | 2,209,952 | ||||
| Deposits | $ | 2,026,835 | ||||
| Other liabilities | 72,538 | |||||
| Total liabilities | $ | 2,099,373 | ||||
| Net assets | $ | 110,579 | ||||
| (1) These balances are preliminary and are subject to customary purchase accounting adjustments. | ||||||
Excluding approximately $2.2 billion in assets acquired from Doral Bank, total assets increased by $318 million from the fourth quarter of 2014, driven by:
- An increase of $485 million in money market investments due mostly to increases in liquidity at BPPR of $256 million and BPNA of $229 million.
-
An increase of $63 million in investment securities available-for-sale
mainly due to a $125 million increase at BPPR mostly from MBS and
government securities, which were partially offset by a decrease of
$62 million at BPNA due to sales of agency securities and CMOs.
These increases were partially offset by:
- A decrease of $133 million in the FDIC loss share asset mainly due to amortization, collections from the FDIC and recoveries on covered assets subject to reimbursement to the FDIC. Refer to Table O for the activity in the carrying amount of the FDIC indemnity asset
- A decrease of $86 million in loans covered under loss sharing agreements with the FDIC due to the normal run-off of the portfolio.
Excluding approximately $2.1 billion in liabilities acquired from Doral, total liabilities increased by $319 million from the fourth quarter of 2014, driven by:
-
An increase of $439 million in deposits from both BPPR and BPNA. Refer
to Table G for additional information on deposits.
offset by:
- A decrease of $139 million in federal funds purchased and assets sold under agreements to repurchase, largely at BPNA by $215 million, which was partially offset by an increase at BPPR of $76 million.
Stockholders' equity increased by $110 million from the fourth quarter of 2014, mainly as a result of net income for the quarter of $75 million, and a decrease in accumulated other comprehensive loss of $35 million.
Common equity tier-1 ratio and tangible book value per share were 15.82% and $36.33, respectively, at March 31, 2015 compared to 15.89% and $35.89 at December 31, 2014. Refer to Table A for capital ratios.
Forward-Looking Statements
The information included in this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in forward-looking statements. Factors that might cause such a difference include, but are not limited to (i) the rate of growth in the economy and employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) the fiscal and monetary policies of the federal government and its agencies; (iv) changes in federal bank regulatory and supervisory policies, including required levels of capital and the impact of proposed capital standards on our capital ratios; (v) the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our businesses, business practices and cost of operations; (vi) regulatory approvals that may be necessary to undertake certain actions or consummate strategic transactions such as acquisitions and dispositions; (vii) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate markets in Puerto Rico and the other markets in which borrowers are located; (viii) the performance of the stock and bond markets; (ix) competition in the financial services industry; (x) additional Federal Deposit Insurance Corporation assessments; (xi) possible legislative, tax or regulatory changes; and (xii) risks related to the Doral Acquisition, including (a) our ability to maintain customer relationships, including managing any potential customer confusion caused by the alliance structure, (b) risks associated with the limited amount of diligence able to be conducted by a buyer in an FDIC transaction and (c) difficulties in converting or integrating the Doral branches or difficulties in providing transition support to alliance co-bidders. For a discussion of such factors and certain risks and uncertainties to which the Corporation is subject, see the Corporation's Annual Report on Form 10-K for the year ended December 31, 2014, as well as its filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, the Corporation assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.
Founded in 1893, Popular, Inc. is the leading banking institution by both assets and deposits in Puerto Rico and ranks among the top 50 U.S. banks by assets. 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.
An electronic version of this press release can be found at the Corporation's website: www.popular.com.
Popular will hold a conference call to discuss the financial results today Monday, April 27, 2015 at 10:00 a.m. Eastern Standard Time. The call will be broadcast live over the Internet and can be accessed through the investor relations section of the Corporation's website: www.popular.com.
Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through a dial-in telephone number 1-866-235-1201 or 1-412-902-4127.
A replay of the webcast will be archived in Popular's website. A telephone replay will be available one hour after the end of the conference call through Tuesday, May 5, 2015. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10062799.
|
Popular, Inc. |
| Financial Supplement to First Quarter 2015 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 |
| Table P - Restructuring Charges |
| POPULAR, INC. | ||||||
| Financial Supplement to First Quarter 2015 Earnings Release | ||||||
| Table A - Selected Ratios and Other Information | ||||||
| (Unaudited) | ||||||
| Quarters ended | ||||||
| 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | ||||
| Basic EPS from continuing operations | $ 0.71 | $ 0.38 | $ 0.64 | |||
| Basic EPS from discontinued operations | $ 0.01 | $ 0.09 | $ 0.19 | |||
| Total Basic EPS | $ 0.72 | $ 0.47 | $ 0.83 | |||
| Diluted EPS from continuing operations | $ 0.71 | $ 0.37 | $ 0.64 | |||
| Diluted EPS from discontinued operations | $ 0.01 | $ 0.09 | $ 0.19 | |||
| Total Diluted EPS | $ 0.72 | $ 0.46 | $ 0.83 | |||
| Average common shares outstanding | 102,939,928 | 102,859,416 | 102,799,752 | |||
| Average common shares outstanding - assuming dilution | 103,136,309 | 103,166,349 | 103,198,102 | |||
| Common shares outstanding at end of period | 103,486,927 | 103,476,847 | 103,455,535 | |||
| Market value per common share | $34.39 | $34.05 | $30.99 | |||
| Market capitalization - (In millions) | $3,559 | $3,523 | $3,206 | |||
| Return on average assets | 0.90% | 0.58% | 0.97% | |||
| . | ||||||
| Return on average common equity | 7.02% | 4.41% | 7.39% | |||
|
Net interest margin [1] |
4.57% | 4.70% | 4.70% | |||
| Common equity per share | $41.81 | $40.76 | $45.39 | |||
|
Tangible common book value per common share (non-GAAP) |
$36.33 | $35.89 | $38.71 | |||
|
Tangible common equity to tangible assets (non-GAAP) |
10.72% | 11.39% | 11.11% | |||
|
Tier 1 capital [2] |
16.19% |
18.13% | 19.35% | |||
|
|
||||||
|
Total capital [2] |
18.79% |
19.41% | 20.62% | |||
|
Tier 1 leverage [2] |
11.84% |
11.94% | 13.07% | |||
|
Common equity Tier 1 capital [2] [3] |
15.82% |
15.89% | 15.07% | |||
|
[1] Not on a taxable equivalent basis. For the quarter ended December 31, 2014, excludes the impact of $18.6 million fees, related to repos refinancing. US GAAP Net interest margin was 4.45% for the fourth quarter. Refer to Tables D for reconciliation. |
|
[2] Ratios for the quarter ending March 31, 2015 were calculated based on Basel III Rules, while ratios for the previous periods were calculated based on the then applicable Basel I rules. |
| [3] Capital ratios for the current quarter are preliminary. |
| POPULAR, INC. | ||||||||||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | ||||||||||||||||||||
| Table B - Consolidated Statement of Operations | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Quarters ended | Variance | Quarter ended | Variance | |||||||||||||||||
| (In thousands, except per share information) | 31-Mar-15 | 31-Dec-14 |
Q1 2015 vs. Q4 2014 |
31-Mar-14 |
Q1 2015 vs. Q1 2014 |
|||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans | $ | 355,631 | $ | 357,570 | $ | (1,939 | ) | $ | 377,602 | $ | (21,971 | ) | ||||||||
| Money market investments | 1,446 | 1,113 | 333 | 973 | 473 | |||||||||||||||
| Investment securities | 30,301 | 30,361 | (60 | ) | 35,127 | (4,826 | ) | |||||||||||||
| Trading account securities | 2,696 | 2,891 | (195 | ) | 5,257 | (2,561 | ) | |||||||||||||
| Total interest income | 390,074 | 391,935 | (1,861 | ) | 418,959 | (28,885 | ) | |||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 25,864 | 25,473 | 391 | 26,858 | (994 | ) | ||||||||||||||
| Short-term borrowings | 1,734 | 20,489 | (18,755 | ) | 9,040 | (7,306 | ) | |||||||||||||
| Long-term debt | 19,281 | 19,112 | 169 | 31,890 | (12,609 | ) | ||||||||||||||
| Total interest expense | 46,879 | 65,074 | (18,195 | ) | 67,788 | (20,909 | ) | |||||||||||||
| Net interest income | 343,195 | 326,861 | 16,334 | 351,171 | (7,976 | ) | ||||||||||||||
| Provision for loan losses - non-covered loans | 29,711 | 51,637 | (21,926 | ) | 54,122 | (24,411 | ) | |||||||||||||
| Provision (recovery of provision) for loan losses - covered loans | 10,324 | (3,646 | ) | 13,970 | 25,714 | (15,390 | ) | |||||||||||||
| Net interest income after provision for loan losses | 303,160 | 278,870 | 24,290 | 271,335 | 31,825 | |||||||||||||||
| Service charges on deposit accounts | 39,017 | 39,456 | (439 | ) | 39,359 | (342 | ) | |||||||||||||
| Other service fees | 53,626 | 61,140 | (7,514 | ) | 52,818 | 808 | ||||||||||||||
| Mortgage banking activities | 12,852 | 8,747 | 4,105 | 3,678 | 9,174 | |||||||||||||||
| Net gain (loss) and valuation adjustments on investment securities | - | 893 | (893 | ) | - | - | ||||||||||||||
| Trading account profit (loss) | 414 | 586 | (172 | ) | 1,977 | (1,563 | ) | |||||||||||||
| Net (loss) gain on sale of loans, including valuation adjustments on loans held-for-sale | (79 | ) | 10,946 | (11,025 | ) | 4,393 | (4,472 | ) | ||||||||||||
| Adjustments (expense) to indemnity reserves on loans sold | (4,526 | ) | (13,348 | ) | 8,822 | (10,347 | ) | 5,821 | ||||||||||||
| FDIC loss share income (expense) | 4,139 | (18,693 | ) | 22,832 | (24,206 | ) | 28,345 | |||||||||||||
| Other operating income | 9,792 | 13,637 | (3,845 | ) | 28,360 | (18,568 | ) | |||||||||||||
| Total non-interest income | 115,235 | 103,364 | 11,871 | 96,032 | 19,203 | |||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Personnel costs | ||||||||||||||||||||
| Salaries | 72,394 | 71,899 | 495 | 69,038 | 3,356 | |||||||||||||||
| Commissions, incentives and other bonuses | 18,458 | 18,439 | 19 | 13,099 | 5,359 | |||||||||||||||
| Pension, postretirement and medical insurance | 12,013 | 6,901 | 5,112 | 8,701 | 3,312 | |||||||||||||||
| Other personnel costs, including payroll taxes | 13,593 | 13,497 | 96 | 13,463 | 130 | |||||||||||||||
| Total personnel costs | 116,458 | 110,736 | 5,722 | 104,301 | 12,157 | |||||||||||||||
| Net occupancy expenses | 21,709 | 23,877 | (2,168 | ) | 21,360 | 349 | ||||||||||||||
| Equipment expenses | 13,411 | 13,091 | 320 | 11,412 | 1,999 | |||||||||||||||
| Other taxes | 8,574 | 14,343 | (5,769 | ) | 13,663 | (5,089 | ) | |||||||||||||
| Professional fees | 75,528 | 80,383 | (4,855 | ) | 66,999 | 8,529 | ||||||||||||||
| Communications | 6,176 | 6,119 | 57 | 6,685 | (509 | ) | ||||||||||||||
| Business promotion | 10,813 | 13,530 | (2,717 | ) | 11,386 | (573 | ) | |||||||||||||
| FDIC deposit insurance | 6,398 | 9,338 | (2,940 | ) | 10,978 | (4,580 | ) | |||||||||||||
| Loss on early extinguishment of debt | - | 532 | (532 | ) | - | - | ||||||||||||||
| Other real estate owned (OREO) expenses | 23,069 | 20,016 | 3,053 | 6,440 | 16,629 | |||||||||||||||
| Credit and debit card processing, volume, interchange and other expenses | 4,821 | 5,093 | (272 | ) | 5,196 | (375 | ) | |||||||||||||
| Other operating expenses | 12,528 | 17,004 | (4,476 | ) | 17,153 | (4,625 | ) | |||||||||||||
| Amortization of intangibles | 2,104 | 2,083 | 21 | 2,026 | 78 | |||||||||||||||
| Restructuring costs | 10,753 | 13,861 | (3,108 | ) | - | 10,753 | ||||||||||||||
| Total operating expenses | 312,342 | 330,006 | (17,664 | ) | 277,599 | 34,743 | ||||||||||||||
| Income from continuing operations before income tax | 106,053 | 52,228 | 53,825 | 89,768 | 16,285 | |||||||||||||||
| Income tax expense | 32,568 | 12,472 | 20,096 | 23,264 | 9,304 | |||||||||||||||
| Income from continuing operations | 73,485 | 39,756 | 33,729 | 66,504 | 6,981 | |||||||||||||||
| Income from discontinued operations, net of tax | 1,341 | 9,086 | (7,745 | ) | 19,905 | (18,564 | ) | |||||||||||||
| Net income | $ | 74,826 | $ | 48,842 | $ | 25,984 | $ | 86,409 | $ | (11,583 | ) | |||||||||
| Net income applicable to common stock | $ | 73,895 | $ | 47,911 | $ | 25,984 | $ | 85,478 | $ | (11,583 | ) | |||||||||
| Net income per common share - basic: | ||||||||||||||||||||
| Net income from continuing operations | $ | 0.71 | $ | 0.38 | $ | 0.33 | $ | 0.64 | $ | 0.07 | ||||||||||
| Net income from discontinued operations | $ | 0.01 | $ | 0.09 | $ | (0.08 | ) | $ | 0.19 | $ | (0.18 | ) | ||||||||
| Net income per common share - basic | $ | 0.72 | $ | 0.47 | $ | 0.25 | $ | 0.83 | $ | (0.11 | ) | |||||||||
| Net income per common share - diluted: | ||||||||||||||||||||
| Net income from continuing operations | $ | 0.71 | $ | 0.37 | $ | 0.34 | $ | 0.64 | $ | 0.07 | ||||||||||
| Net income from discontinued operations | $ | 0.01 | $ | 0.09 | $ | (0.08 | ) | $ | 0.19 | $ | (0.18 | ) | ||||||||
| Net income per common share - diluted | $ | 0.72 | $ | 0.46 | $ | 0.26 | $ | 0.83 | $ | (0.11 | ) | |||||||||
| Popular, Inc. | ||||||||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | ||||||||||||||||||
| Table C - Consolidated Statement of Financial Condition | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Variance | ||||||||||||||||||
| Q1 2015 vs. | ||||||||||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | Q4 2014 | ||||||||||||||
| Assets: | ||||||||||||||||||
| Cash and due from banks | $ | 495,776 | $ | 381,095 | $ | 387,917 | $ | 114,681 | ||||||||||
| Money market investments | 2,307,215 | 1,822,386 | 1,622,433 | 484,829 | ||||||||||||||
| Trading account securities, at fair value | 134,294 | 138,527 | 359,247 | (4,233 | ) | |||||||||||||
| Investment securities available-for-sale, at fair value | 5,548,703 | 5,315,159 | 5,768,890 | 233,544 | ||||||||||||||
| Investment securities held-to-maturity, at amortized cost | 101,595 | 103,170 | 139,019 | (1,575 | ) | |||||||||||||
| Other investment securities, at lower of cost or realizable value | 163,038 | 161,906 | 166,556 | 1,132 | ||||||||||||||
| Loans held-for-sale, at lower of cost or fair value | 160,602 | 106,104 | 94,877 | 54,498 | ||||||||||||||
| Loans held-in-portfolio: | ||||||||||||||||||
| Loans not covered under loss sharing agreements with the FDIC | 21,110,147 | 19,498,286 | 21,703,050 | 1,611,861 | ||||||||||||||
| Loans covered under loss sharing agreements with the FDIC | 2,456,552 | 2,542,662 | 2,870,054 | (86,110 | ) | |||||||||||||
| Less: Unearned income | 97,217 | 93,835 | 91,273 | 3,382 | ||||||||||||||
| Allowance for loan losses | 588,697 | 601,792 | 640,348 | (13,095 | ) | |||||||||||||
| Total loans held-in-portfolio, net | 22,880,785 | 21,345,321 | 23,841,483 | 1,535,464 | ||||||||||||||
| FDIC loss share asset | 409,844 | 542,454 | 833,721 | (132,610 | ) | |||||||||||||
| Premises and equipment, net | 492,291 | 494,581 | 513,855 | (2,290 | ) | |||||||||||||
| Other real estate not covered under loss sharing agreements with the FDIC | 128,170 | 135,500 | 136,965 | (7,330 | ) | |||||||||||||
| Other real estate covered under loss sharing agreements with the FDIC | 113,557 | 130,266 | 158,747 | (16,709 | ) | |||||||||||||
| Accrued income receivable | 129,639 | 121,818 | 125,895 | 7,821 | ||||||||||||||
| Mortgage servicing assets, at fair value | 149,024 | 148,694 | 156,529 | 330 | ||||||||||||||
| Other assets | 1,842,934 | 1,646,443 | 1,747,646 | 196,491 | ||||||||||||||
| Goodwill | 508,310 | 465,676 | 647,757 | 42,634 | ||||||||||||||
| Other intangible assets | 59,063 | 37,595 | 42,625 | 21,468 | ||||||||||||||
| Total assets | $ | 35,624,840 | $ | 33,096,695 | $ | 36,744,162 | $ | 2,528,145 | ||||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||
| Deposits: | ||||||||||||||||||
| Non-interest bearing | $ | 6,285,202 | $ | 5,783,748 | $ | 6,326,596 | $ | 501,454 | ||||||||||
| Interest bearing | 20,988,487 | 19,023,787 | 20,939,055 | 1,964,700 | ||||||||||||||
| Total deposits | 27,273,689 | 24,807,535 | 27,265,651 | 2,466,154 | ||||||||||||||
| Federal funds purchased and assets sold under agreements to repurchase | 1,132,643 | 1,271,657 | 2,208,213 | (139,014 | ) | |||||||||||||
| Other short-term borrowings | 1,200 | 21,200 | 1,200 | (20,000 | ) | |||||||||||||
| Notes payable | 1,757,313 | 1,711,828 | 1,506,408 | 45,485 | ||||||||||||||
| Other liabilities | 1,080,945 | 1,012,029 | 1,016,943 | 68,916 | ||||||||||||||
| Liabilities from discontinued operations | 1,930 | 5,064 | - | (3,134 | ) | |||||||||||||
| Total liabilities | 31,247,720 | 28,829,313 | 31,998,415 | 2,418,407 | ||||||||||||||
| Stockholders' equity: | ||||||||||||||||||
| Preferred stock | 50,160 | 50,160 | 50,160 | - | ||||||||||||||
| Common stock | 1,037 | 1,036 | 1,035 | 1 | ||||||||||||||
| Surplus | 4,197,932 | 4,196,458 | 4,171,817 | 1,474 | ||||||||||||||
| Retained earnings | 327,613 | 253,717 | 679,908 | 73,896 | ||||||||||||||
| Treasury stock | (5,222 | ) | (4,117 | ) | (898 | ) | (1,105 | ) | ||||||||||
| Accumulated other comprehensive loss | (194,400 | ) | (229,872 | ) | (156,275 | ) | 35,472 | |||||||||||
| Total stockholders' equity | 4,377,120 | 4,267,382 | 4,745,747 | 109,738 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 35,624,840 | $ | 33,096,695 | $ | 36,744,162 | $ | 2,528,145 | ||||||||||
| Popular, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter ended | Quarter ended | Quarter ended | Variance | Variance | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | Q1 2015 vs. Q4 2014 | Q1 2015 vs. Q1 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ 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 | $ | 7,767 | $ | 34.4 | 1.78 | % | $ | 7,220 | $ | 34.4 | 1.90 | % | $ | 7,566 | $ | 41.4 | 2.19 | % | $ | 547 | $ | 0.0 | (0.12 | )% | $ | 201 | ($7.0 | ) | (0.41 | ) | % | ||||||||||||||||||||||||
| Loans not covered under loss sharing agreements with the FDIC: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | 8,383 | 100.9 | 4.88 | 8,219 | 101.9 | 4.92 | 8,487 | 100.7 | 4.81 | 164 | (1.0 | ) | (0.04 | ) | (104 | ) | 0.2 | 0.07 | |||||||||||||||||||||||||||||||||||||
| Construction | 435 | 6.1 | 5.67 | 233 | 3.8 | 6.41 | 186 | 4.8 | 10.54 | 202 | 2.3 | (0.74 | ) | 249 | 1.3 | (4.87 | ) | ||||||||||||||||||||||||||||||||||||||
| Mortgage | 6,733 | 85.9 | 5.10 | 6,538 | 84.1 | 5.15 | 6,691 | 86.9 | 5.20 | 195 | 1.8 | (0.05 | ) | 42 | (1.0 | ) | (0.10 | ) | |||||||||||||||||||||||||||||||||||||
| Consumer | 3,845 | 95.4 | 10.07 | 3,884 | 96.6 | 9.86 | 3,761 | 93.8 | 10.12 | (39 | ) | (1.2 | ) | 0.21 | 84 | 1.6 | (0.05 | ) | |||||||||||||||||||||||||||||||||||||
| Lease financing | 569 | 10.0 | 7.01 | 555 | 9.9 | 7.11 | 544 | 10.3 | 7.57 | 14 | 0.1 | (0.10 | ) | 25 | (0.3 | ) | (0.56 | ) | |||||||||||||||||||||||||||||||||||||
| Total loans not covered under loss sharing agreements with the FDIC | 19,965 | 298.3 | 6.03 | 19,429 | 296.3 | 6.07 | 19,669 | 296.5 | 6.09 | 536 | 2.0 | (0.04 | ) | 296 | 1.8 | (0.06 | ) | ||||||||||||||||||||||||||||||||||||||
| Loans covered under loss sharing agreements with the FDIC | 2,540 | 57.4 | 9.14 | 2,615 | 61.3 | 9.31 | 2,934 | 81.1 | 11.18 | (75 | ) | (3.9 | ) | (0.17 | ) | (394 | ) | (23.7 | ) | (2.04 | ) | ||||||||||||||||||||||||||||||||||
| Total loans | 22,505 | 355.7 | 6.38 | 22,044 | 357.6 | 6.45 | 22,603 | 377.6 | 6.75 | 461 | (1.9 | ) | (0.07 | ) | (98 | ) | (21.9 | ) | (0.37 | ) | |||||||||||||||||||||||||||||||||||
| Total interest earning assets | 30,272 | $ | 390.1 | 5.20 | % | 29,264 | $ | 392.0 | 5.33 | % | 30,169 | $ | 419.0 | 5.61 | % | 1,008 | ($1.9 | ) | (0.13 | )% | 103 | ($28.9 | ) | (0.41 | ) | % | |||||||||||||||||||||||||||||
| Allowance for loan losses | (609 | ) | (618 | ) | (617 | ) | 9 | 8 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other non-interest earning assets | 4,143 | 4,171 | 4,689 | (28 | ) | (546 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Assets from discontinued operations | - | 491 | 1,955 | (491 | ) | (1,955 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total average assets | $ | 33,806 | $ | 33,308 | $ | 36,196 | $ | 498 | $ | (2,390 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest bearing deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOW and money market | $ | 4,983 | $ | 4.2 | 0.34 | % | $ | 4,788 | $ | 4.0 | 0.33 | % | $ | 4,736 | $ | 3.8 | 0.32 | % | $ | 195 | $ | 0.2 | 0.01 | % | $ | 247 | $ | 0.4 | 0.02 | % | |||||||||||||||||||||||||
| Savings | 6,892 | 3.9 | 0.23 | 6,788 | 3.8 | 0.22 | 6,691 | 3.6 | 0.22 | 104 | 0.1 | 0.01 | 201 | 0.3 | 0.01 | ||||||||||||||||||||||||||||||||||||||||
| Time deposits | 7,747 | 17.8 | 0.93 | 7,409 | 17.7 | 0.95 | 7,538 | 19.5 | 1.05 | 338 | 0.1 | (0.02 | ) | 209 | (1.7 | ) | (0.12 | ) | |||||||||||||||||||||||||||||||||||||
| Total interest bearing deposits | 19,622 | 25.9 | 0.53 | 18,985 | 25.5 | 0.53 | 18,965 | 26.9 | 0.57 | 637 | 0.4 | - | 657 | (1.0 | ) | (0.04 | ) | ||||||||||||||||||||||||||||||||||||||
| Borrowings[1] | 2,877 | 21.0 | 2.93 | 2,992 | 21.0 | 2.80 | 3,868 | 40.9 | 4.25 | (115 | ) | - | 0.13 | (991 | ) | (19.9 | ) | (1.32 | ) | ||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | 22,499 | 46.9 | 0.84 | 21,977 | 46.5 | 0.84 | 22,833 | 67.8 | 1.20 | 522 | 0.4 | - | (334 | ) | (20.9 | ) | (0.36 | ) | |||||||||||||||||||||||||||||||||||||
| Net interest spread | 4.36 | % | 4.49 | % | 4.41 | % | (0.13 | )% | (0.05 | ) | % | ||||||||||||||||||||||||||||||||||||||||||||
| Non-interest bearing deposits | 5,963 | 5,636 | 5,584 | 327 | 379 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 1,021 | 849 | 894 | 172 | 127 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities from discontinued operations | 3 | 486 | 2,146 | (483 | ) | (2,143 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' equity | 4,320 | 4,360 | 4,739 | (40 | ) | (419 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total average liabilities and stockholders' equity | $ | 33,806 | $ | 33,308 | $ | 36,196 | $ | 498 | $ | (2,390 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted net interest income / margin non-taxable equivalent basis | $ | 343.2 | 4.57 | % | $ | 345.5 | 4.70 | % | $ | 351.2 | 4.70 | % | ($2.3 | ) | (0.13 | )% | ($8.0 | ) | (0.13 | ) | % | ||||||||||||||||||||||||||||||||||
| Impact of fees related to repos refinancing | $ | 18.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income (expense)/margin non-taxable equivalent basis | $ | 343.2 | 4.57 | % | $ | 326.9 | 4.45 | % | $ | 351.2 | 4.70 | % | |||||||||||||||||||||||||||||||||||||||||||
| (1) Borrowing cost for the fourth quarter of 2014, including the fees related to repo restructuring, was 5.27%. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Popular, Inc. |
| Financial Supplement to First Quarter 2015 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 2015 Earnings Release |
| Table F - Mortgage Banking Activities and Other Service Fees |
| (Unaudited) |
| Mortgage Banking Activities | Variance | ||||||||||||||||||||
| Quarters ended | Q1 2015 vs. | Q1 2015 vs. | |||||||||||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | Q4 2014 | Q1 2014 | ||||||||||||||||
| Mortgage servicing fees, net of fair value adjustments: | |||||||||||||||||||||
| Mortgage servicing fees | $ | 12,248 | $ | 9,364 | $ | 10,748 | $ | 2,884 | $ | 1,500 | |||||||||||
| Mortgage servicing rights fair value adjustments | (4,929 | ) | (6,259 | ) | (8,096 | ) | 1,330 | 3,167 | |||||||||||||
| Total mortgage servicing fees, net of fair value adjustments | 7,319 | 3,105 | 2,652 | 4,214 | 4,667 | ||||||||||||||||
| Net gain on sale of loans, including valuation on loans held-for-sale | 7,280 | 8,382 | 7,176 | (1,102 | ) | 104 | |||||||||||||||
| Trading account (loss) profit: | |||||||||||||||||||||
| Unrealized gains (losses) on outstanding derivative positions | 17 | (1 | ) | (760 | ) | 18 | 777 | ||||||||||||||
| Realized (losses) on closed derivative positions | (1,764 | ) | (2,739 | ) | (5,390 | ) | 975 | 3,626 | |||||||||||||
| Total trading account (loss) | (1,747 | ) | (2,740 | ) | (6,150 | ) | 993 | 4,403 | |||||||||||||
| Total mortgage banking activities | $ | 12,852 | $ | 8,747 | $ | 3,678 | $ | 4,105 | $ | 9,174 | |||||||||||
| Other Service Fees | Variance | ||||||||||||||||||||
| Quarters ended | Q1 2015 vs. | Q1 2015 vs. | |||||||||||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | Q4 2014 | Q1 2014 | ||||||||||||||||
| Other service fees: | |||||||||||||||||||||
| Debit card fees | $ | 11,125 | $ | 10,929 | $ | 10,544 | $ | 196 | $ | 581 | |||||||||||
| Insurance fees | 12,041 | 17,711 | 11,719 | (5,670 | ) | 322 | |||||||||||||||
| Credit card fees | 16,149 | 17,493 | 16,083 | (1,344 | ) | 66 | |||||||||||||||
| Sale and administration of investment products | 5,930 | 7,193 | 6,457 | (1,263 | ) | (527 | ) | ||||||||||||||
| Trust fees | 4,602 | 4,469 | 4,463 | 133 | 139 | ||||||||||||||||
| Other fees | 3,779 | 3,345 | 3,552 | 434 | 227 | ||||||||||||||||
| Total other service fees | $ | 53,626 | $ | 61,140 | $ | 52,818 | $ | (7,514 | ) | $ | 808 | ||||||||||
| Popular, Inc. | |||||||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | |||||||||||||||||
| Table G - Loans and Deposits | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Loans - Ending Balances | |||||||||||||||||
| Variance | |||||||||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 |
Q1 2015 vs. Q4 2014 |
Q1 2015 vs. Q1 2014 |
||||||||||||
| Loans not covered under FDIC loss sharing agreements: | |||||||||||||||||
| Commercial | $ | 8,653,561 | $ | 8,134,267 | $ | 10,014,721 | $ | 519,294 | $ | (1,361,160 | ) | ||||||
| Construction | 690,728 | 251,820 | 176,766 | 438,908 | 513,962 | ||||||||||||
| Legacy [1] | 77,675 | 80,818 | 197,164 | (3,143 | ) | (119,489 | ) | ||||||||||
| Lease financing | 581,119 | 564,389 | 546,880 | 16,730 | 34,239 | ||||||||||||
| Mortgage | 7,189,227 | 6,502,886 | 6,669,376 | 686,341 | 519,851 | ||||||||||||
| Consumer | 3,820,620 | 3,870,271 | 4,006,870 | (49,651 | ) | (186,250 | ) | ||||||||||
| Total non-covered loans held-in-portfolio | $ | 21,012,930 | $ | 19,404,451 | $ | 21,611,777 | $ | 1,608,479 | $ | (598,847 | ) | ||||||
| Loans covered under FDIC loss sharing agreements | 2,456,552 | 2,542,662 | 2,870,054 | (86,110 | ) | (413,502 | ) | ||||||||||
| Total loans held-in-portfolio | $ | 23,469,482 | $ | 21,947,113 | $ | 24,481,831 | $ | 1,522,369 | $ | (1,012,349 | ) | ||||||
| Loans held-for-sale: | |||||||||||||||||
| Commercial | $ | 8,240 | $ | 309 | $ | - | $ | 7,931 | $ | 8,240 | |||||||
| Legacy [1] | - | 319 | - | (319 | ) | - | |||||||||||
| Mortgage | 152,362 | 100,166 | 94,877 | 52,196 | 57,485 | ||||||||||||
| Consumer | - | 5,310 | - | (5,310 | ) | - | |||||||||||
| Total loans held-for-sale | $ | 160,602 | $ | 106,104 | $ | 94,877 | $ | 54,498 | $ | 65,725 | |||||||
| Total loans | $ | 23,630,084 | $ | 22,053,217 | $ | 24,576,708 | $ | 1,576,867 | $ | (946,624 | ) | ||||||
| [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-15 | 31-Dec-14 | 31-Mar-14 |
Q1 2015 vs. Q4 2014 |
Q1 2015 vs. Q1 2014 |
||||||||||||
| Demand deposits [1] | $ | 7,163,635 | $ | 6,606,060 | $ | 7,020,844 | $ | 557,575 | $ | 142,791 | |||||||
| Savings, NOW and money market deposits (non-brokered) | 10,932,870 | 10,320,782 | 11,420,642 | 612,088 | (487,772 | ) | |||||||||||
| Savings, NOW and money market deposits (brokered) | 409,113 | 406,248 | 581,562 | 2,865 | (172,449 | ) | |||||||||||
| Time deposits (non-brokered) | 7,243,414 | 5,960,401 | 6,474,430 | 1,283,013 | 768,984 | ||||||||||||
| Time deposits (brokered CDs) | 1,524,657 | 1,514,044 | 1,768,173 | 10,613 | (243,516 | ) | |||||||||||
| Total deposits | $ | 27,273,689 | $ | 24,807,535 | $ | 27,265,651 | $ | 2,466,154 | $ | 8,038 | |||||||
| [1] Includes interest and non-interest bearing demand deposits. | |||||||||||||||||
| Popular, Inc. | ||||||||||||||||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | ||||||||||||||||||||||||||
| Table H - Non-Performing Assets | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Variance | ||||||||||||||||||||||||||
| (Dollars in thousands) | 31-Mar-15 |
As a % of loans HIP by category |
31-Dec-14 |
As a % of loans HIP by category |
31-Mar-14 |
As a % of loans HIP by category |
Q1 2015 vs. Q4 2014 |
Q1 2015 vs. Q1 2014 |
||||||||||||||||||
| Non-accrual loans: | ||||||||||||||||||||||||||
| Commercial | $ | 274,438 | 3.2 | % | $ | 260,225 | 3.2 | % | $ | 306,929 | 3.1 | % | $ | 14,213 | $ | (32,491 | ) | |||||||||
| Construction | 13,214 | 1.9 | 13,812 | 5.5 | 22,464 | 12.7 | (598 | ) | (9,250 | ) | ||||||||||||||||
| Legacy [1] | 2,288 | 2.9 | 1,545 | 1.9 | 11,608 | 5.9 | 743 | (9,320 | ) | |||||||||||||||||
| Lease financing | 2,506 | 0.4 | 3,102 | 0.5 | 3,050 | 0.6 | (596 | ) | (544 | ) | ||||||||||||||||
| Mortgage | 328,615 | 4.6 | 304,913 | 4.7 | 252,021 | 3.8 | 23,702 | 76,594 | ||||||||||||||||||
| Consumer | 43,892 | 1.1 | 46,886 | 1.2 | 39,262 | 1.0 | (2,994 | ) | 4,630 | |||||||||||||||||
| Total non-performing loans held-in- | ||||||||||||||||||||||||||
| portfolio, excluding covered loans | 664,953 | 3.2 | % | 630,483 | 3.3 | % | 635,334 | 2.9 | % | 34,470 | 29,619 | |||||||||||||||
| Non-performing loans held-for-sale [2] | 8,404 | 18,899 | 789 | (10,495 | ) | 7,615 | ||||||||||||||||||||
| Other real estate owned ("OREO"), | ||||||||||||||||||||||||||
| excluding covered OREO | 128,170 | 135,500 | 136,965 | (7,330 | ) | (8,795 | ) | |||||||||||||||||||
| Total non-performing assets, | ||||||||||||||||||||||||||
| excluding covered assets | 801,527 | 784,882 | 773,088 | 16,645 | 28,439 | |||||||||||||||||||||
| Covered loans and OREO | 133,211 | 148,099 | 182,659 | (14,888 | ) | (49,448 | ) | |||||||||||||||||||
| Total non-performing assets | $ | 934,738 | $ | 932,981 | $ | 955,747 | $ | 1,757 | $ | (21,009 | ) | |||||||||||||||
| Accruing loans past due 90 days or more [3] | $ | 454,681 | $ | 447,990 | $ | 409,460 | $ | 6,691 | $ | 45,221 | ||||||||||||||||
| Ratios excluding covered loans: | ||||||||||||||||||||||||||
| Non-performing loans held-in-portfolio | ||||||||||||||||||||||||||
| to loans held-in-portfolio | 3.16 | % | 3.25 | % | 2.94 | % | ||||||||||||||||||||
| Allowance for loan losses to loans | ||||||||||||||||||||||||||
| held-in-portfolio | 2.46 | 2.68 | 2.51 | |||||||||||||||||||||||
| Allowance for loan losses to | ||||||||||||||||||||||||||
| non-performing loans, excluding loans | ||||||||||||||||||||||||||
| held-for-sale | 77.63 | 82.43 | 85.40 | |||||||||||||||||||||||
| Ratios including covered loans: | ||||||||||||||||||||||||||
| Non-performing assets to total assets | 2.62 | % | 2.82 | % | 2.60 | % | ||||||||||||||||||||
| Non-performing loans held-in-portfolio | ||||||||||||||||||||||||||
| to loans held-in-portfolio | 2.92 | 2.95 | 2.69 | |||||||||||||||||||||||
| Allowance for loan losses to loans | ||||||||||||||||||||||||||
| held-in-portfolio | 2.51 | 2.74 | 2.62 | |||||||||||||||||||||||
| Allowance for loan losses to non-performing | ||||||||||||||||||||||||||
| loans, excluding loans held-for-sale | 85.99 | 92.82 | 97.13 | |||||||||||||||||||||||
| [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] Non-performing loans held-for-sale as of March 31, 2015 consisted of $225 thousand in mortgage loans and $8.2 million in commercial loans (December 31, 2014 - $14.0 million in mortgage loans, $309 thousand in commercial loans and $4.5 million in consumer loans; March 31, 2014 - $789 thousand in mortgage loans). |
| [3] It is the Corporation's policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to non-performing since the principal repayment is insured. These balances include $134 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of March 31, 2015 (December 31, 2014 - $125 million; March 31, 2014 - $117 million). Furthermore, the Corporation has approximately $69 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, 2014 - $66 million; March 31, 2014 - $52 million). |
| Popular, Inc. | |||||||||||||||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | |||||||||||||||||||||||||
| Table I - Activity in Non-Performing Loans | |||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||
| Commercial loans held-in-portfolio: | |||||||||||||||||||||||||
| Quarter ended | Quarter ended | ||||||||||||||||||||||||
| 31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||
| (In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||||||||||||||
| Beginning balance NPLs | $ | 257,910 | $ | 2,315 | $ | 260,225 | $ | 244,425 | $ | 7,906 | $ | 252,331 | |||||||||||||
| Plus: | |||||||||||||||||||||||||
| New non-performing loans[1] | 27,426 | 8,030 | 35,456 | 112,769 | 1,245 | 114,014 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||
| Non-performing loans transferred to OREO | (1,069 | ) | - | (1,069 | ) | (2,072 | ) | - | (2,072 | ) | |||||||||||||||
| Non-performing loans charged-off | (8,375 | ) | (426 | ) | (8,801 | ) | (17,492 | ) | (1,298 | ) | (18,790 | ) | |||||||||||||
| Loans returned to accrual status / loan collections | (11,261 | ) | (112 | ) | (11,373 | ) | (79,720 | ) | (2,895 | ) | (82,615 | ) | |||||||||||||
| Loans transferred to held-for-sale | - | - | - | - | (3,025 | ) | (3,025 | ) | |||||||||||||||||
| Non-performing loans transferred from (to) discontinued operations | - | - | - | - | 382 | 382 | |||||||||||||||||||
| Ending balance NPLs | $ | 264,631 | $ | 9,807 | $ | 274,438 | $ | 257,910 | $ | 2,315 | $ | 260,225 | |||||||||||||
|
[1] New non-performing loans includes $1.2 million at BPPR and $7.4 million at BPNA from Doral Acquisition. |
|||||||||||||||||||||||||
| Construction loans held-in-portfolio: | |||||||||||||||||||||||||
| Quarter ended | Quarter ended | ||||||||||||||||||||||||
| 31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||
| (In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||||||||||||||
| Beginning balance NPLs | $ | 13,812 | $ | - | $ | 13,812 | $ | 19,148 | $ | - | $ | 19,148 | |||||||||||||
| Plus: | |||||||||||||||||||||||||
| New non-performing loans | 456 | - | 456 | 573 | - | 573 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||
| Non-performing loans charged-off | - | - | - | (244 | ) | - | (244 | ) | |||||||||||||||||
| Loans returned to accrual status / loan collections | (1,054 | ) | - | (1,054 | ) | (5,665 | ) | - | (5,665 | ) | |||||||||||||||
| Ending balance NPLs | $ | 13,214 | $ | - | $ | 13,214 | $ | 13,812 | $ | - | $ | 13,812 | |||||||||||||
| Mortgage loans held-in-portfolio: | |||||||||||||||||||||||||
| Quarter ended | Quarter ended | ||||||||||||||||||||||||
| 31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||
| (In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||||||||||||||
| Beginning balance NPLs | $ | 295,629 | $ | 9,284 | $ | 304,913 | $ | 283,433 | $ | 11,692 | $ | 295,125 | |||||||||||||
| Plus: | |||||||||||||||||||||||||
| New non-performing loans[1] | 107,385 | 6,232 | 113,617 | 91,977 | 8,159 | 100,136 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||
| Non-performing loans transferred to OREO | (4,845 | ) | - | (4,845 | ) | (1,051 | ) | - | (1,051 | ) | |||||||||||||||
| Non-performing loans charged-off | (8,158 | ) | (123 | ) | (8,281 | ) | (8,951 | ) | (96 | ) | (9,047 | ) | |||||||||||||
| Loans returned to accrual status / loan collections | (69,857 | ) | (8,970 | ) | (78,827 | ) | (69,779 | ) | (4,309 | ) | (74,088 | ) | |||||||||||||
| Loans transferred to held-for-sale | - | 2,038 | 2,038 | - | (6,162 | ) | (6,162 | ) | |||||||||||||||||
| Ending balance NPLs | $ | 320,154 | $ | 8,461 | $ | 328,615 | $ | 295,629 | $ | 9,284 | $ | 304,913 | |||||||||||||
|
[1] New non-performing loans includes $16.6 million of loans previously serviced by Doral. |
|||||||||||||||||||||||||
| Legacy loans held-in-portfolio: | |||||||||||||||||||||||||
| Quarter ended | Quarter ended | ||||||||||||||||||||||||
| 31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||
| (In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||||||||||||||
| Beginning balance NPLs | $ | - | $ | 1,545 | $ | 1,545 | $ | - | $ | 5,648 | $ | 5,648 | |||||||||||||
| Plus: | |||||||||||||||||||||||||
| New non-performing loans | - | 1,000 | 1,000 | - | 213 | 213 | |||||||||||||||||||
| Advances on existing non-performing loans | - | 33 | 33 | - | 97 | 97 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||
| Non-performing loans charged-off | - | (141 | ) | (141 | ) | - | (744 | ) | (744 | ) | |||||||||||||||
| Loans returned to accrual status / loan collections | - | (149 | ) | (149 | ) | - | (2,791 | ) | (2,791 | ) | |||||||||||||||
| Loans transferred to held-for-sale | - | - | - | - | (878 | ) | (878 | ) | |||||||||||||||||
| Ending balance NPLs | $ | - | $ | 2,288 | $ | 2,288 | $ | - | $ | 1,545 | $ | 1,545 | |||||||||||||
| Total non-performing loans held-in-portfolio (excluding consumer loans): | |||||||||||||||||||||||||
| Quarter ended | Quarter ended | ||||||||||||||||||||||||
| 31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||
| (In thousands) | BPPR | BPNA | Popular, Inc. | BPPR | BPNA | Popular, Inc. | |||||||||||||||||||
| Beginning balance NPLs | $ | 567,351 | $ | 13,144 | $ | 580,495 | $ | 547,006 | $ | 25,246 | $ | 572,252 | |||||||||||||
| Plus: | |||||||||||||||||||||||||
| New non-performing loans | 135,267 | 15,262 | 150,529 | 205,319 | 9,617 | 214,936 | |||||||||||||||||||
| Advances on existing non-performing loans | - | 33 | 33 | - | 97 | 97 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||
| Non-performing loans transferred to OREO | (5,914 | ) | - | (5,914 | ) | (3,123 | ) | - | (3,123 | ) | |||||||||||||||
| Non-performing loans charged-off | (16,533 | ) | (690 | ) | (17,223 | ) | (26,687 | ) | (2,138 | ) | (28,825 | ) | |||||||||||||
| Loans returned to accrual status / loan collections | (82,172 | ) | (9,231 | ) | (91,403 | ) | (155,164 | ) | (9,995 | ) | (165,159 | ) | |||||||||||||
| Loans transferred to held-for-sale | - | 2,038 | 2,038 | - | (10,065 | ) | (10,065 | ) | |||||||||||||||||
| Non-performing loans transferred from (to) discontinued operations | - | - | - | - | 382 | 382 | |||||||||||||||||||
| Ending balance NPLs | $ | 597,999 | $ | 20,556 | $ | 618,555 | $ | 567,351 | $ | 13,144 | $ | 580,495 | |||||||||||||
| Popular, Inc. | |||||||||||||||||||||||||||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | |||||||||||||||||||||||||||||||||||||
| Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios | |||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||
| Quarter ended | Quarter ended | Quarter ended | |||||||||||||||||||||||||||||||||||
| 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | |||||||||||||||||||||||||||||||||||
| (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 | $ | 519,719 | $ | 82,073 | $ | 601,792 | $ | 521,687 | $ | 89,688 | $ | 611,375 | $ | 538,463 | $ | 102,092 | $ | 640,555 | |||||||||||||||||||
| Provision for loan losses - Continuing operations | 29,711 | 10,324 | 40,035 | 51,637 | (3,646 | ) | 47,991 | 54,122 | 25,714 | 79,836 | |||||||||||||||||||||||||||
| Provision (reversal of provision) for loan losses - Discontinued operations | - | - | - | - | - | - | (6,764 | ) | - | (6,764 | ) | ||||||||||||||||||||||||||
| 549,430 | 92,397 | 641,827 | 573,324 | 86,042 | 659,366 | 585,821 | 127,806 | 713,627 | |||||||||||||||||||||||||||||
| Net loans charged-off (recovered): | |||||||||||||||||||||||||||||||||||||
| BPPR | |||||||||||||||||||||||||||||||||||||
| Commercial | 4,802 | 11,599 | 16,401 | 13,890 | 3,230 | 17,120 | 15,173 | 7,648 | 22,821 | ||||||||||||||||||||||||||||
| Construction | (2,925 | ) | 5,771 | 2,846 | (279 | ) | (1,172 | ) | (1,451 | ) | (1,378 | ) | 21,092 | 19,714 | |||||||||||||||||||||||
| Lease financing | 769 | - | 769 | 751 | (6 | ) | 745 | 656 | - | 656 | |||||||||||||||||||||||||||
| Mortgage | 10,473 | 3,281 | 13,754 | 12,228 | 2,725 | 14,953 | 8,516 | 1,656 | 10,172 | ||||||||||||||||||||||||||||
| Consumer | 23,653 | (727 | ) | 22,926 | 25,933 | (808 | ) | 25,125 | 22,983 | (363 | ) | 22,620 | |||||||||||||||||||||||||
| Total BPPR | 36,772 | 19,924 | 56,696 | 52,523 | 3,969 | 56,492 | 45,950 | 30,033 | 75,983 | ||||||||||||||||||||||||||||
| BPNA | |||||||||||||||||||||||||||||||||||||
| Commercial | (479 | ) | - | (479 | ) | (900 | ) | - | (900 | ) | 1,987 | - | 1,987 | ||||||||||||||||||||||||
| Construction | - | - | - | (2 | ) | - | (2 | ) | (176 | ) | - | (176 | ) | ||||||||||||||||||||||||
| Legacy [1] | (1,828 | ) | - | (1,828 | ) | (3,877 | ) | - | (3,877 | ) | (4,209 | ) | - | (4,209 | ) | ||||||||||||||||||||||
| Mortgage | 154 | - | 154 | (93 | ) | - | (93 | ) | 870 | - | 870 | ||||||||||||||||||||||||||
| Consumer | 1,267 | - | 1,267 | 2,536 | - | 2,536 | 4,369 | - | 4,369 | ||||||||||||||||||||||||||||
| Discontinued operations | - | - | - | - | - | - | (5,545 | ) | - | (5,545 | ) | ||||||||||||||||||||||||||
| Total BPNA | (886 | ) | - | (886 | ) | (2,336 | ) | - | (2,336 | ) | (2,704 | ) | - | (2,704 | ) | ||||||||||||||||||||||
| Total loans charged-off (recovered) - Popular, Inc. | 35,886 | 19,924 | 55,810 | 50,187 | 3,969 | 54,156 | 43,246 | 30,033 | 73,279 | ||||||||||||||||||||||||||||
| Net recoveries (write-downs) [3] | 2,680 | - | 2,680 | (3,418 | ) | - | (3,418 | ) | - | - | - | ||||||||||||||||||||||||||
| Balance at end of period | $ | 516,224 | $ | 72,473 | $ | 588,697 | $ | 519,719 | $ | 82,073 | $ | 601,792 | $ | 542,575 | $ | 97,773 | $ | 640,348 | |||||||||||||||||||
| POPULAR, INC. | |||||||||||||||||||||||||||||||||||||
| Annualized net charge-offs to average loans held-in-portfolio | 0.72 | % | 1.00 | % | 1.04 | % | 0.99 | % | 0.80 | % | 1.20 | % | |||||||||||||||||||||||||
| Provision for loan losses to net charge-offs [2] | 0.83 | x | 0.72 | x | 0.99 | x | 0.85 | x | 1.10 | x | 1.00 | x | |||||||||||||||||||||||||
| BPPR | |||||||||||||||||||||||||||||||||||||
| Annualized net charge-offs to average loans held-in-portfolio | 0.92 | % | 1.22 | % | 1.33 | % | 1.22 | % | 1.16 | % | 1.62 | % | |||||||||||||||||||||||||
| Provision for loan losses to net charge-offs [2] | 0.87 | x | 0.74 | x | 0.99 | x | 0.86 | x | 1.17 | x | 1.05 | x | |||||||||||||||||||||||||
| BPNA | |||||||||||||||||||||||||||||||||||||
| Annualized net charge-offs (recoveries) to average loans held-in-portfolio | (0.09 | ) | % | (0.27 | ) | % | (0.19 | ) | % | ||||||||||||||||||||||||||||
| Provision for loan losses to net charge-offs | N.M. | N.M. | N.M. | 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] Excluding provision for loan losses and net write-down related to loans sold or reclassified to held-for-sale during the quarter ended December 31, 2014. |
|
[3] Net write-downs for the quarter ended March 31, 2015 and December 31, 2014 are related to loans sold or reclassified to held-for-sale. |
| N.M. - Not meaningful. |
| Popular, Inc. | |||||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | |||||||||||||||
| Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED | |||||||||||||||
| (Unaudited) | |||||||||||||||
| 31-Mar-15 | |||||||||||||||
| (Dollars in thousands) | Commercial | Construction | Legacy [3] | Mortgage |
Lease financing |
Consumer | Total | [2] | |||||||
| Specific ALLL | $ 69,946 | $ 158 | $ - | $ 42,570 | $ 687 | $ 25,604 | $ 138,965 | ||||||||
| Impaired loans | [1] | $ 417,377 | $ 9,838 | $ - | $ 450,612 | $ 2,924 | $ 116,464 | $ 997,215 | |||||||
| Specific ALLL to impaired loans | [1] | 16.76 | % | 1.61 | % | - | % | 9.45 | % | 23.50 | % | 21.98 | % | 13.94 | % |
| General ALLL | $ 135,946 | $ 3,286 | $ 2,962 | $ 86,271 | $ 6,521 | $ 142,273 | $ 377,259 | ||||||||
| Loans held-in-portfolio, excluding impaired loans | [1] | $ 8,236,184 | $ 680,890 | $ 77,675 | $ 6,738,615 | $ 578,195 | $ 3,704,156 | $ 20,015,715 | |||||||
| General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 1.65 | % | 0.48 | % | 3.81 | % | 1.28 | % | 1.13 | % | 3.84 | % | 1.88 | % |
| Total ALLL | $ 205,892 | $ 3,444 | $ 2,962 | $ 128,841 | $ 7,208 | $ 167,877 | $ 516,224 | ||||||||
| Total non-covered loans held-in-portfolio | [1] | $ 8,653,561 | $ 690,728 | $ 77,675 | $ 7,189,227 | $ 581,119 | $ 3,820,620 | $ 21,012,930 | |||||||
| ALLL to loans held-in-portfolio | [1] | 2.38 | % | 0.50 | % | 3.81 | % | 1.79 | % | 1.24 | % | 4.39 | % | 2.46 | % |
| [1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. | |||||||||||||||
| [2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of March 31, 2015 the general allowance on the covered loans amounted to $71.0 million, while the specific reserve amounted to $1.5 million. | |||||||||||||||
| [3] 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. | |||||||||||||||
| 31-Dec-14 | |||||||||||||||
| (Dollars in thousands) | Commercial | Construction | Legacy [3] | Mortgage |
Lease financing |
Consumer | Total | [2] | |||||||
| Specific ALLL | $ 64,736 | $ 363 | $ - | $ 46,111 | $ 770 | $ 28,161 | $ 140,141 | ||||||||
| Impaired loans | [1] | $ 357,161 | $ 13,268 | $ - | $ 435,824 | $ 3,023 | $ 117,732 | $ 927,008 | |||||||
| Specific ALLL to impaired loans | [1] | 18.13 | % | 2.74 | % | - | % | 10.58 | % | 25.47 | % | 23.92 | % | 15.12 | % |
| General ALLL | $ 146,501 | $ 6,307 | $ 2,944 | $ 77,211 | $ 6,361 | $ 140,254 | $ 379,578 | ||||||||
| Loans held-in-portfolio, excluding impaired loans | [1] | $ 7,777,106 | $ 238,552 | $ 80,818 | $ 6,067,062 | $ 561,366 | $ 3,752,539 | $ 18,477,443 | |||||||
| General ALLL to loans held-in-portfolio, excluding impaired loans | [1] | 1.88 | % | 2.64 | % | 3.64 | % | 1.27 | % | 1.13 | % | 3.74 | % | 2.05 | % |
| Total ALLL | $ 211,237 | $ 6,670 | $ 2,944 | $ 123,322 | $ 7,131 | $ 168,415 | $ 519,719 | ||||||||
| Total non-covered loans held-in-portfolio | [1] | $ 8,134,267 | $ 251,820 | $ 80,818 | $ 6,502,886 | $ 564,389 | $ 3,870,271 | $ 19,404,451 | |||||||
| ALLL to loans held-in-portfolio | [1] | 2.60 | % | 2.65 | % | 3.64 | % | 1.90 | % | 1.26 | % | 4.35 | % | 2.68 | % |
| [1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. | |||||||||||||||
| [2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of December 31, 2014 the general allowance on the covered loans amounted to $82.1 million, while the specific reserve amounted to $5 thousand. | |||||||||||||||
| [3] 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. | |||||||||||||||
| Variance | |||||||||||||||
| (Dollars in thousands) | Commercial | Construction | Legacy | Mortgage | Lease financing | Consumer | Total | ||||||||
| Specific ALLL | $ 5,210 | $ (205) | $ - | $ (3,541) | $ (83) | $ (2,557) | $ (1,176) | ||||||||
| Impaired loans | $ 60,216 | $ (3,430) | $ - | $ 14,788 | $ (99) | $ (1,268) | $ 70,207 | ||||||||
| General ALLL | $ (10,555) | $ (3,021) | $ 18 | $ 9,060 | $ 160 | $ 2,019 | $ (2,319) | ||||||||
| Loans held-in-portfolio, excluding impaired loans | $ 459,078 | $ 442,338 | $ (3,143) | $ 671,553 | $ 16,829 | $ (48,383) | $ 1,538,272 | ||||||||
| Total ALLL | $ (5,345) | $ (3,226) | $ 18 | $ 5,519 | $ 77 | $ (538) | $ (3,495) | ||||||||
| Total non-covered loans held-in-portfolio | $ 519,294 | $ 438,908 | $ (3,143) | $ 686,341 | $ 16,730 | $ (49,651) | $ 1,608,479 | ||||||||
| Popular, Inc. | |||||||||||||||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | |||||||||||||||||||||||||
| Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS | |||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||
| 31-Mar-15 | |||||||||||||||||||||||||
| Puerto Rico | |||||||||||||||||||||||||
| (In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | |||||||||||||||||||
| Allowance for credit losses: | |||||||||||||||||||||||||
| Specific ALLL non-covered loans | $ | 69,946 | $ | 158 | $ | 42,229 | $ | 687 | $ | 25,223 | $ | 138,243 | |||||||||||||
| General ALLL non-covered loans | 125,520 | 1,437 | 84,350 | 6,521 | 128,205 | 346,033 | |||||||||||||||||||
| ALLL - non-covered loans | 195,466 | 1,595 | 126,579 | 7,208 | 153,428 | 484,276 | |||||||||||||||||||
| Specific ALLL covered loans | 1,473 | - | - | - | - | 1,473 | |||||||||||||||||||
| General ALLL covered loans | 19,794 | 7,707 | 40,469 | - | 3,030 | 71,000 | |||||||||||||||||||
| ALLL - covered loans | 21,267 | 7,707 | 40,469 | - | 3,030 | 72,473 | |||||||||||||||||||
| Total ALLL | $ | 216,733 | $ | 9,302 | $ | 167,048 | $ | 7,208 | $ | 156,458 | $ | 556,749 | |||||||||||||
| Loans held-in-portfolio: | |||||||||||||||||||||||||
| Impaired non-covered loans | $ | 417,377 | $ | 9,838 | $ | 445,506 | $ | 2,924 | $ | 114,416 | $ | 990,061 | |||||||||||||
| Non-covered loans held-in-portfolio, excluding impaired loans | 5,984,132 | 88,868 | 5,725,741 | 578,195 | 3,237,790 | 15,614,726 | |||||||||||||||||||
| Non-covered loans held-in-portfolio | 6,401,509 | 98,706 | 6,171,247 | 581,119 | 3,352,206 | 16,604,787 | |||||||||||||||||||
| Impaired covered loans | 8,394 | 2,336 | - | - | - | 10,730 | |||||||||||||||||||
| Covered loans held-in-portfolio, excluding impaired loans | 1,562,753 | 55,489 | 795,477 | - | 32,103 | 2,445,822 | |||||||||||||||||||
| Covered loans held-in-portfolio | 1,571,147 | 57,825 | 795,477 | - | 32,103 | 2,456,552 | |||||||||||||||||||
| Total loans held-in-portfolio | $ | 7,972,656 | $ | 156,531 | $ | 6,966,724 | $ | 581,119 | $ | 3,384,309 | $ | 19,061,339 | |||||||||||||
| 31-Dec-14 | |||||||||||||||||||||||||
| Puerto Rico | |||||||||||||||||||||||||
| (In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | |||||||||||||||||||
| Allowance for credit losses: | |||||||||||||||||||||||||
| Specific ALLL non-covered loans | $ | 64,736 | $ | 363 | $ | 45,838 | $ | 770 | $ | 27,796 | $ | 139,503 | |||||||||||||
| General ALLL non-covered loans | 136,853 | 5,120 | 75,022 | 6,361 | 126,276 | 349,632 | |||||||||||||||||||
| ALLL - non-covered loans | 201,589 | 5,483 | 120,860 | 7,131 | 154,072 | 489,135 | |||||||||||||||||||
| Specific ALLL covered loans | 5 | - | - | - | - | 5 | |||||||||||||||||||
| General ALLL covered loans | 30,866 | 7,202 | 40,948 | - | 3,052 | 82,068 | |||||||||||||||||||
| ALLL - covered loans | 30,871 | 7,202 | 40,948 | - | 3,052 | 82,073 | |||||||||||||||||||
| Total ALLL | $ | 232,460 | $ | 12,685 | $ | 161,808 | $ | 7,131 | $ | 157,124 | $ | 571,208 | |||||||||||||
| Loans held-in-portfolio: | |||||||||||||||||||||||||
| Impaired non-covered loans | $ | 356,911 | $ | 13,268 | $ | 431,569 | $ | 3,023 | $ | 115,759 | $ | 920,530 | |||||||||||||
| Non-covered loans held-in-portfolio, excluding impaired loans | 6,017,892 | 146,116 | 5,018,932 | 561,366 | 3,273,278 | 15,017,584 | |||||||||||||||||||
| Non-covered loans held-in-portfolio | 6,374,803 | 159,384 | 5,450,501 | 564,389 | 3,389,037 | 15,938,114 | |||||||||||||||||||
| Impaired covered loans | 4,487 | 2,419 | - | - | - | 6,906 | |||||||||||||||||||
| Covered loans held-in-portfolio, excluding impaired loans | 1,610,294 | 67,917 | 822,986 | - | 34,559 | 2,535,756 | |||||||||||||||||||
| Covered loans held-in-portfolio | 1,614,781 | 70,336 | 822,986 | - | 34,559 | 2,542,662 | |||||||||||||||||||
| Total loans held-in-portfolio | $ | 7,989,584 | $ | 229,720 | $ | 6,273,487 | $ | 564,389 | $ | 3,423,596 | $ | 18,480,776 | |||||||||||||
| Variance | |||||||||||||||||||||||||
| (In thousands) | Commercial | Construction | Mortgage | Lease financing | Consumer | Total | |||||||||||||||||||
| Allowance for credit losses: | |||||||||||||||||||||||||
| Specific ALLL non-covered loans | $ | 5,210 | $ | (205 | ) | $ | (3,609 | ) | $ | (83 | ) | $ | (2,573 | ) | $ | (1,260 | ) | ||||||||
| General ALLL non-covered loans | (11,333 | ) | (3,683 | ) | 9,328 | 160 | 1,929 | (3,599 | ) | ||||||||||||||||
| ALLL - non-covered loans | (6,123 | ) | (3,888 | ) | 5,719 | 77 | (644 | ) | (4,859 | ) | |||||||||||||||
| Specific ALLL covered loans | 1,468 | - | - | - | - | 1,468 | |||||||||||||||||||
| General ALLL covered loans | (11,072 | ) | 505 | (479 | ) | - | (22 | ) | (11,068 | ) | |||||||||||||||
| ALLL - covered loans | (9,604 | ) | 505 | (479 | ) | - | (22 | ) | (9,600 | ) | |||||||||||||||
| Total ALLL | $ | (15,727 | ) | $ | (3,383 | ) | $ | 5,240 | $ | 77 | $ | (666 | ) | $ | (14,459 | ) | |||||||||
| Loans held-in-portfolio: | |||||||||||||||||||||||||
| Impaired non-covered loans | $ | 60,466 | $ | (3,430 | ) | $ | 13,937 | $ | (99 | ) | $ | (1,343 | ) | $ | 69,531 | ||||||||||
| Non-covered loans held-in-portfolio, excluding impaired loans | (33,760 | ) | (57,248 | ) | 706,809 | 16,829 | (35,488 | ) | 597,142 | ||||||||||||||||
| Non-covered loans held-in-portfolio | 26,706 | (60,678 | ) | 720,746 | 16,730 | (36,831 | ) | 666,673 | |||||||||||||||||
| Impaired covered loans | 3,907 | (83 | ) | - | - | - | 3,824 | ||||||||||||||||||
| Covered loans held-in-portfolio, excluding impaired loans | (47,541 | ) | (12,428 | ) | (27,509 | ) | - | (2,456 | ) | (89,934 | ) | ||||||||||||||
| Covered loans held-in-portfolio | (43,634 | ) | (12,511 | ) | (27,509 | ) | - | (2,456 | ) | (86,110 | ) | ||||||||||||||
| Total loans held-in-portfolio | $ | (16,928 | ) | $ | (73,189 | ) | $ | 693,237 | $ | 16,730 | $ | (39,287 | ) | $ | 580,563 | ||||||||||
| Popular, Inc. | |||||||||||||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | |||||||||||||||||||||||
| Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| 31-Mar-15 | |||||||||||||||||||||||
| U.S. Mainland | |||||||||||||||||||||||
| (In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||||||||||
| Allowance for credit losses: | |||||||||||||||||||||||
| Specific ALLL | $ | - | $ | - | $ | - | $ | 341 | $ | 381 | $ | 722 | |||||||||||
| General ALLL | 10,426 | 1,849 | 2,962 | 1,921 | 14,068 | 31,226 | |||||||||||||||||
| Total ALLL | $ | 10,426 | $ | 1,849 | $ | 2,962 | $ | 2,262 | $ | 14,449 | $ | 31,948 | |||||||||||
| Loans held-in-portfolio: | |||||||||||||||||||||||
| Impaired loans | $ | - | $ | - | $ | - | $ | 5,106 | $ | 2,048 | $ | 7,154 | |||||||||||
| Loans held-in-portfolio, excluding impaired loans | 2,252,052 | 592,022 | 77,675 | 1,012,874 | 466,366 | 4,400,989 | |||||||||||||||||
| Total loans held-in-portfolio | $ | 2,252,052 | $ | 592,022 | $ | 77,675 | $ | 1,017,980 | $ | 468,414 | $ | 4,408,143 | |||||||||||
| 31-Dec-14 | |||||||||||||||||||||||
| U.S. Mainland | |||||||||||||||||||||||
| (In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||||||||||
| Allowance for credit losses: | |||||||||||||||||||||||
| Specific ALLL | $ | - | $ | - | $ | - | $ | 273 | $ | 365 | $ | 638 | |||||||||||
| General ALLL | 9,648 | 1,187 | 2,944 | 2,189 | 13,978 | 29,946 | |||||||||||||||||
| Total ALLL | $ | 9,648 | $ | 1,187 | $ | 2,944 | $ | 2,462 | $ | 14,343 | $ | 30,584 | |||||||||||
| Loans held-in-portfolio: | |||||||||||||||||||||||
| Impaired loans | $ | 250 | $ | - | $ | - | $ | 4,255 | $ | 1,973 | $ | 6,478 | |||||||||||
| Loans held-in-portfolio, excluding impaired loans | 1,759,214 | 92,436 | 80,818 | 1,048,130 | 479,261 | 3,459,859 | |||||||||||||||||
| Total loans held-in-portfolio | $ | 1,759,464 | $ | 92,436 | $ | 80,818 | $ | 1,052,385 | $ | 481,234 | $ | 3,466,337 | |||||||||||
| Variance | |||||||||||||||||||||||
| (In thousands) | Commercial | Construction | Legacy | Mortgage | Consumer | Total | |||||||||||||||||
| Allowance for credit losses: | |||||||||||||||||||||||
| Specific ALLL | $ | - | $ | - | $ | - | $ | 68 | $ | 16 | $ | 84 | |||||||||||
| General ALLL | 778 | 662 | 18 | (268 | ) | 90 | 1,280 | ||||||||||||||||
| Total ALLL | $ | 778 | $ | 662 | $ | 18 | $ | (200 | ) | $ | 106 | $ | 1,364 | ||||||||||
| Loans held-in-portfolio: | |||||||||||||||||||||||
| Impaired loans | $ | (250 | ) | $ | - | $ | - | $ | 851 | $ | 75 | $ | 676 | ||||||||||
| Loans held-in-portfolio, excluding impaired loans | 492,838 | 499,586 | (3,143 | ) | (35,256 | ) | (12,895 | ) | 941,130 | ||||||||||||||
| Total loans held-in-portfolio | $ | 492,588 | $ | 499,586 | $ | (3,143 | ) | $ | (34,405 | ) | $ | (12,820 | ) | $ | 941,806 | ||||||||
| Popular, Inc. | |||||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | |||||||||||||
| Table N - Reconciliation to GAAP Financial Measures | |||||||||||||
| (Unaudited) | |||||||||||||
| (In thousands, except share or per share information) | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | ||||||||||
| Total stockholders' equity | $ | 4,377,120 | $ | 4,267,382 | $ | 4,745,747 | |||||||
| Less: Preferred stock | (50,160 | ) | (50,160 | ) | (50,160 | ) | |||||||
| Less: Goodwill | (508,310 | ) | (465,676 | ) | (647,757 | ) | |||||||
| Less: Other intangibles | (59,063 | ) | (37,595 | ) | (42,625 | ) | |||||||
| Total tangible common equity | $ | 3,759,587 | $ | 3,713,951 | $ | 4,005,205 | |||||||
| Total assets | $ | 35,624,840 | $ | 33,096,695 | $ | 36,744,162 | |||||||
| Less: Goodwill | (508,310 | ) | (465,676 | ) | (647,757 | ) | |||||||
| Less: Other intangibles | (59,063 | ) | (37,595 | ) | (42,625 | ) | |||||||
| Total tangible assets | $ | 35,057,467 | $ | 32,593,424 | $ | 36,053,780 | |||||||
| Tangible common equity to tangible assets | 10.72 | % | 11.39 | % | 11.11 | % | |||||||
| Common shares outstanding at end of period | 103,486,927 | 103,476,847 | 103,455,535 | ||||||||||
| Tangible book value per common share | $ | 36.33 | $ | 35.89 | $ | 38.71 | |||||||
| Popular, Inc. | ||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | ||||||||||
| Table O - Financial Information - Westernbank Covered Loans | ||||||||||
| (Unaudited) | ||||||||||
| Revenues | ||||||||||
| Quarters ended | ||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | Variance | |||||||
| Interest income on covered loans | $ | 57,431 | $ | 61,285 | $ | (3,854 | ) | |||
| FDIC loss share income (expense): | ||||||||||
| Amortization of indemnification asset | (27,316 | ) | (28,948 | ) | 1,632 | |||||
| 80% mirror accounting on credit impairment losses [1] | 8,246 | (3,287 | ) | 11,533 | ||||||
| 80% mirror accounting on reimbursable expenses | 21,545 | 18,742 | 2,803 | |||||||
| 80% mirror accounting on recoveries on covered assets, including rental income on OREOs, | ||||||||||
| subject to reimbursement to the FDIC | (2,619 | ) | (2,542 | ) | (77 | ) | ||||
| Change in true-up payment obligation | 4,164 | (2,831 | ) | 6,995 | ||||||
| Other | 119 | 173 | (54 | ) | ||||||
| Total FDIC loss share income (expense) | 4,139 | (18,693 | ) | 22,832 | ||||||
| Total revenues | 61,570 | 42,592 | 18,978 | |||||||
| Provision for loan losses | 10,324 | (3,646 | ) | 13,970 | ||||||
| Total revenues less provision for loan losses | $ | 51,246 | $ | 46,238 | $ | 5,008 | ||||
| [1] | Reductions in expected cash flows for ASC 310-30 loans, which may impact the provision for loan losses, may consider reductions in both principal and interest cash flow expectations. The amount covered under the FDIC loss sharing agreements for interest not collected from borrowers is limited under the agreements (approximately 90 days); accordingly, these amounts are not subject fully to the 80% mirror accounting. | |||||||||
| Non-personnel operating expenses | ||||||||||
| Quarters ended | ||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | Variance | |||||||
| Professional fees | $ | 3,225 | $ | 7,167 | $ | (3,942 | ) | |||
| OREO expenses | 13,823 | 13,116 | 707 | |||||||
| Other operating expenses | 2,461 | 2,668 | (207 | ) | ||||||
| Total operating expenses | $ | 19,509 | $ | 22,951 | $ | (3,442 | ) | |||
| 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-15 | 31-Dec-14 | Variance | |||||||
| Covered loans | $ | 2,540 | $ | 2,615 | $ | (75 | ) | |||
| FDIC loss share asset | 429 | 616 | (187 | ) | ||||||
| Activity in the carrying amount and accretable yield of covered loans accounted for under ASC 310-30 | |||||||||||||||||
| Quarters ended | |||||||||||||||||
| 31-Mar-15 | 31-Dec-14 | ||||||||||||||||
| (In thousands) | Accretable yield |
Carrying amount of loans |
Accretable yield |
Carrying amount of loans |
|||||||||||||
| Beginning balance | $ | 1,271,337 | $ | 2,444,172 | $ | 1,312,521 | $ | 2,528,433 | |||||||||
| Accretion | (55,697 | ) | 55,697 | (59,474 | ) | 59,474 | |||||||||||
| Changes in expected cash flows | 43,308 | - | 18,290 | - | |||||||||||||
| Collections / charge-offs | - | (132,773 | ) | - | (143,735 | ) | |||||||||||
| Ending balance | 1,258,948 | 2,367,096 | 1,271,337 | 2,444,172 | |||||||||||||
| Allowance for loan losses - ASC 310-30 covered loans | - | (68,386 | ) | - | (78,846 | ) | |||||||||||
| Ending balance, net of allowance for loan losses | $ | 1,258,948 | $ | 2,298,710 | $ | 1,271,337 | $ | 2,365,326 | |||||||||
| Activity in the carrying amount of the FDIC indemnity asset | |||||||||||||||||
| Quarters ended | |||||||||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | |||||||||||||||
| Balance at beginning of period | $ | 542,454 | $ | 636,331 | |||||||||||||
| Amortization | (27,316 | ) | (28,948 | ) | |||||||||||||
| Credit impairment losses to be covered under loss sharing agreements | 8,246 | (3,287 | ) | ||||||||||||||
| Reimbursable expenses to be covered under loss sharing agreements | 21,545 | 18,742 | |||||||||||||||
| Net payments from FDIC under loss sharing agreements | (132,265 | ) | (77,697 | ) | |||||||||||||
| Other adjustments attributable to FDIC loss sharing agreements | (2,820 | ) | (2,687 | ) | |||||||||||||
| Balance at end of period | 409,844 | 542,454 | |||||||||||||||
| Activity in the remaining FDIC loss share asset amortization | |||||||||||||||||
| Quarters ended | |||||||||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | |||||||||||||||
| Balance at beginning of period | $ | 53,095 | $ | 66,562 | |||||||||||||
| Amortization | (27,316 | ) | (28,948 | ) | |||||||||||||
| Impact of lower projected losses | 12,908 | 15,481 | |||||||||||||||
| Balance at end of period | $ | 38,687 | $ | 53,095 | |||||||||||||
| POPULAR, INC. | ||||||||||
| Financial Supplement to First Quarter 2015 Earnings Release | ||||||||||
| Table P - Restructuring Charges | ||||||||||
| (Unaudited) | ||||||||||
| Restructuring Charges | ||||||||||
| Quarters ended | ||||||||||
| (In thousands) | 31-Mar-15 | 31-Dec-14 | Variance | |||||||
| Personnel costs | $ | 9,366 | $ | 7,692 | $ | 1,674 | ||||
| Net occupancy expenses | 386 | 3,482 | (3,096) | |||||||
| Equipment expenses | 158 | 126 | 32 | |||||||
| Professional fees | 466 | 1,254 | (788) | |||||||
| Other operating expenses | 377 | 1,307 | (930) | |||||||
| Total restructuring costs | $ | 10,753 | $ | 13,861 | $ | (3,108) | ||||
Popular, Inc.
Investor Relations:
Brett Scheiner,
212-417-6721
Investor Relations Officer
or
Media
Relations:
Teruca Rullán, 787-281-5170
Mobile: 917-679-3596
Senior
Vice President, Corporate Communications
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