Popular, Inc. Announces Fourth Quarter 2020 Financial Results
Popular, Inc. (NASDAQ:BPOP) reported net income of $176.3 million for Q4 2020, up from $168.4 million in Q3 2020, contributing to a total of $507 million for the year. The results reflect a strong performance despite a $293 million provision for credit losses due to the pandemic. Key drivers included a $10.6 million increase in net interest income, although the net interest margin slightly declined to 3.04%. The company also recorded $144.8 million in non-interest income. Popular Bank's strategic realignment included 11 branch closures, aiming to save $12.3 million annually.
- Net income increased to $176.3 million in Q4 2020, up from $168.4 million in Q3 2020.
- Total net income for 2020 was $507 million despite recognizing $293 million in provision for credit losses.
- Net interest income rose by $10.6 million in Q4 2020.
- Annual operating expense savings of approximately $12.3 million expected from branch realignment.
- Provision for credit losses amounted to $293 million for 2020, reflecting pandemic impacts.
- Net interest margin decreased by 2 basis points to 3.04% in Q4 2020.
- Total non-performing loans held-in-portfolio increased to $737.8 million as of December 31, 2020.
Popular, Inc. (the “Corporation,” “Popular,” “we,” “us,” “our”) (NASDAQ:BPOP) reported net income of
Ignacio Alvarez, President and Chief Executive Officer, said: “2020 was a challenging year, beginning with a series of devastating earthquakes in Southwest Puerto Rico and followed by the unprecedented global pandemic that significantly impacted our lives and economic activity. Notwithstanding these challenges, we were able to generate
We closed 2020 on a high note, generating net income of
I am extremely proud of what we have been able to accomplish in this difficult environment. I am especially proud of our employees for their commitment to serve our customers, whether working on the front lines or adapting quickly to working from home. We are blessed to be part of a team of dedicated colleagues who have met these challenges with courage and resilience. As we continue to witness advances in the medical field, we look forward to 2021 with a renewed sense of commitment and optimism.”
Significant Events
Financial Highlights
For the fourth quarter of 2020, the Corporation recorded net income of
Net interest income for the quarter increased by
Coronavirus (COVID-19) Pandemic
The disruptions related to the COVID-19 pandemic continue to have an impact on the macroeconomic environment and therefore on the financial results of the Corporation. Although certain measures initially imposed in response to the pandemic by the governments of Puerto Rico, the United States and United States Virgin Islands, including lockdowns, business closures, mandatory curfews and limits to public activities, were thereafter gradually relaxed throughout 2020 to allow for the gradual reopening of the economy, certain restrictions remained in place or were reinstated during the fourth quarter of 2020 which resulted in many businesses not being able to operate at their full capacity. The Corporation’s results for the third and fourth quarters of 2020 reflect the benefit of increased economic activity resulting from such reopening and the related improvement in the macroeconomic environment, as well as the impact of the various government stimulus programs launched in response to the pandemic.
As previously disclosed, beginning in March 2020, the Corporation implemented several financial relief programs in response to the pandemic, including loan payment moratoriums, suspensions of foreclosures and other collection activity, as well as waivers of certain fees and service charges. During the third quarter of 2020, the Corporation reinstated the imposition of the fees it elected to waive in connection with such financial relief programs and resumed delinquent loan collection efforts. During 2020, the Corporation had granted loan payment moratoriums to 127,117 eligible retail customers with an aggregate book value of
Loan portfolio affected by COVID-19-related moratoriums |
Total Moratoriums Granted |
Active Moratoriums |
|
|||||||
Loan count |
Book Value (In thousands) |
Percentage by portfolio |
Loan count |
Book Value (In thousands) |
Percentage by portfolio |
|||||
Mortgage |
24,378 |
$ |
2,862,684 |
36.3 |
% |
4,248 |
$ |
442,329 |
5.6 |
% |
Auto loans |
48,819 |
|
790,798 |
25.2 |
% |
- |
|
- |
- |
% |
Lease financing |
10,803 |
|
365,198 |
30.5 |
% |
- |
|
- |
- |
% |
Credit cards |
19,615 |
|
96,045 |
10.4 |
% |
- |
|
- |
- |
% |
Other consumer loans |
23,502 |
|
307,746 |
18.1 |
% |
91 |
|
1,077 |
0.1 |
% |
Commercial |
5,099 |
|
3,880,818 |
26.7 |
% |
20 |
|
61,634 |
0.4 |
% |
Total |
132,216 |
$ |
8,303,289 |
28.3 |
% |
4,359 |
$ |
505,040 |
1.7 |
% |
The delinquency status of loans subject to the Corporation’s payment moratorium programs remains unaltered during the payment deferral period and the Corporation continues to accrue interest income during such term.
The extent to which the pandemic further impacts our business, results of operations and financial condition (including our regulatory capital, liquidity ratios and realizability of deferred tax assets), as well as the operations of our clients, customers, service providers and suppliers, will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic, the speed and strength of economic recovery and actions taken by governmental authorities and other third parties in response thereto.
Popular Bank’s New York Branches Realignment
As previously disclosed, on October 27, 2020, Popular Bank (“PB”), the United States mainland banking subsidiary of the Corporation, authorized and approved a strategic realignment of its New York Metro branch network that will result in eleven (11) branch closures and related staffing reductions. The branch closures are expected to be completed by January 29, 2021.
This strategic realignment, which will allow PB to reduce its operating expenses, leverage resources to enhance its focus on small and medium size businesses, as well as support changing customer behaviors, was approved after an assessment of PB’s current branch network, including its usage, proximity to its other branches and customer needs. PB will maintain in its New York Metro region its largest regional retail network in the mainland US, with twenty-seven (27) branches located throughout Brooklyn, Bronx, Manhattan and Queens, as well as in northern New Jersey.
During the fourth quarter of 2020, the Corporation recorded a total pre-tax charge of approximately
Earnings Highlights |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
Quarters ended |
|
Years ended |
|||
(Dollars in thousands, except per share information) |
31-Dec-20 |
30-Sep-20 |
31-Dec-19 |
|
31-Dec-20 |
31-Dec-19 |
Net interest income |
|
|
|
|
|
|
Provision for credit losses |
21,218 |
19,138 |
47,224 |
|
292,536 |
165,779 |
Net interest income after provision for credit losses |
450,398 |
441,883 |
420,200 |
|
1,564,077 |
1,725,915 |
Other non-interest income |
144,847 |
128,767 |
152,415 |
|
512,312 |
569,883 |
Operating expenses |
375,924 |
361,066 |
390,572 |
|
1,457,829 |
1,477,482 |
Income before income tax |
219,321 |
209,584 |
182,043 |
|
618,560 |
818,316 |
Income tax expense |
43,045 |
41,168 |
15,258 |
|
111,938 |
147,181 |
Net income |
|
|
|
|
|
|
Net income applicable to common stock |
|
|
|
|
|
|
Net income per common share - basic |
|
|
|
|
|
|
Net income per common share - diluted |
|
|
|
|
|
|
Net interest income on a taxable equivalent basis – Non-GAAP financial measure
Net interest income for the quarter ended December 31, 2020 was
The net interest margin decreased 2 basis points to
-
Higher income from money market, trading and investment securities by
$9.7 million as maturities from short-term U.S. Treasury securities were reinvested in higher yielding mortgage-backed securities. Investment securities also reflected an increase of$1.2 billion in average volume resulting from the increase in average deposits of$1.7 billion . The change in the composition of the investment portfolio resulted in a higher yield of 7 basis points;
-
interest income from loans remained flat quarter over quarter but reflected the variances in the respective portfolios, as follows:
-
The repurchase of
$808 million in mortgage loans at the end of the third quarter of 2020 was the main driver of the increase in mortgage loan interest income of$2.8 million and of the decrease of 38 basis points in the portfolio yield, as the yield on these loans is approximately3.53% ;
-
consumer loans, including credit cards decreased
$116 million in average or$3.6 million in interest income; and
-
the combined balance of auto and lease financing increased
$172 million but resulted in a lower yield driven by a lower discount amortization of the portfolio acquired from Wells Fargo in 2018 and a higher amortization of deferred loan origination fees.
-
The repurchase of
The above changes in portfolio composition resulted in a reduction of the total loan yield of 16 basis points when compared to the previous quarter. The Corporation recognized income of
-
lower interest expense on deposits by
$4.2 million , or 4 basis points, due to lower interest cost, mainly at PB.
Net interest income for the Banco Popular de Puerto Rico (“BPPR”) segment amounted to
Net interest income for PB was
Non-interest income
Non-interest income increased by
-
higher service charges on deposit accounts by
$2.3 million , mainly in the BPPR segment, due to higher non-sufficient funds and ACH return fees;
-
higher other service fees by
$1.3 million , principally at the BPPR segment, due to higher credit card fees by$0.9 million , mainly in interchange income resulting from higher transactional volumes, and higher trust fees by$0.6 million ;
-
higher income from mortgage banking activities by
$19.3 million mainly due to the impact during the third quarter of 2020 of the bulk loan repurchase completed by BPPR from its GNMA, FNMA and FHLMC servicing portfolio which resulted in a$8.8 million negative fair value adjustment to its mortgage servicing rights (“MSRs”), a$10.5 million loss in interest advances related to GNMA loans, offset by$3.4 million in fees recognized in connection with the bulk loan repurchase; and
-
a favorable variance in net gain (loss) on sale of loans, including valuation adjustments, of
$2.5 million mainly due to a$2.0 million negative adjustment recognized during the third quarter of 2020 on the held-for-sale taxi medallion portfolio at PB;
partially offset by:
-
a decrease in net gain, including impairment, on equity securities of
$3.7 million mainly related to a$4.1 million gain on sale of certain equity securities at PB during the third quarter of 2020;
-
an unfavorable variance in adjustments to indemnity reserves on previously sold loans of
$2.0 million in part due to a recourse reserve release of$5.1 million related to the bulk loan repurchase from FNMA and FHLMC during the third quarter of 2020; and
-
lower other operating income by
$3.8 million mainly due to lower net earnings from the combined portfolio of investments under the equity method by$4.2 million .
Refer to Table B for further details.
Operating expenses
Operating expenses for the fourth quarter of 2020 totaled
-
Higher personnel cost by
$6.3 million due to$2.1 million in severance expense related to PB’s branch initiative, higher pension and postretirement expense by$1.8 million related mainly to higher retirement savings plan expense due to an additional by-weekly payroll, and seasonal compensation in BPPR and higher incentive compensation accrual of$2.5 million ;
-
higher net occupancy expense by
$16.9 million due to$19.0 million in costs related to the termination of real property leases associated with PB’s New York branch optimization initiative, including the impairment of the right-of-use assets;
-
higher professional fees by
$7.6 million mainly due to higher advisory expenses by$5.0 million related to corporate initiatives and higher processing and technology services by$1.6 million ; and
-
higher business promotion expenses by
$1.8 million due to higher seasonal advertising expense by$2.2 million .
Partially offset by:
-
Lower other real estate owned expenses by
$2.4 million due to higher gain on sale of foreclosed mortgage properties; and
-
lower other operating expenses by
$15.6 million mainly due to the reclassification of$10.0 million in provision for unfunded commitments from the other expenses line to the provision for credit losses caption. Additionally, operational losses were lower by$3.8 million due to lower legal reserves partially offset by$2.1 million in impairment losses on leasehold improvements associated with PB’s New York branch optimization initiative.
Full-time equivalent employees were 8,522 as of December 31, 2020, compared to 8,514 as of September 30, 2020.
For a breakdown of operating expenses by category refer to Table B.
Income taxes
For the quarter ended December 31, 2020, the Corporation recorded an income tax expense of
Credit Quality
Overall, the Corporation’s credit quality remained stable during the fourth quarter of 2020. The financial relief granted to eligible borrowers in response to the COVID-19 pandemic, comprised mainly of payment deferrals of up to six months, largely ended during the third quarter of 2020. Management continues to closely follow macroeconomic conditions and although the outlook indicates improvements, the full effects of the pandemic and the pace of the recovery remains uncertain. The improvement over the last few years in the risk profile of the Corporation’s loan portfolios positions Popular to operate successfully under the ongoing challenging environment. We will continue to carefully monitor the exposure of the portfolios to the COVID-19 pandemic related risks, changes in the economic outlook of the regions in which Popular operates and how delinquencies and NCOs evolve.
The following presents credit quality results for the fourth quarter of 2020:
-
At December 31, 2020, total non-performing loans held-in-portfolio increased by
$3.4 million from September 30, 2020. BPPR’s NPLs increased by$6.7 million , driven by higher mortgage NPLs by$44.3 million , in part offset by a decrease of$37.9 million in the commercial NPLs. The increase in mortgage NPLs is due to the delinquency progression after the expiration of the payment moratorium. Excluding the increase of$133 million in NPLs related to the adoption of CECL related to purchase credit deteriorated loans, NPLs have decreased by$2.6 million from December 31, 2019, before the impact of the COVID-19 pandemic. Excluding government guaranteed loans,94% of the COVID-19 residential loans deferrals remain current. The decrease in commercial NPLs was mostly related to impairment charge-offs from previously reserved collateral dependent loans. PB’s NPLs decreased by$3.3 million due to a previously reserved construction loan that was partially charged-off during the quarter. At December 31, 2020, the ratio of NPLs to total loans held-in-portfolio remained flat at2.5% when compared to the third quarter of 2020. -
Inflows of NPLs held-in-portfolio, excluding consumer loans, increased by
$1.7 million quarter-over-quarter. In BPPR, total inflows increased by$18.6 million driven by a mortgage inflow increase of$48.9 million , due to delinquency progression at the expiration of the moratorium period. The NPL inflows at PB decreased by$16.9 million mostly due to lower commercial inflows by$12.4 million . -
NCOs increased by
$25.2 million from the third quarter of 2020. BPPR ‘s NCOs increased by$27.4 million , primarily driven by higher commercial NCOs by$19.1 million , mostly related to previously reserved commercial loans. Consumer and mortgage loan NCOs increased by$4.8 million and$2.6 million , respectively, during the fourth quarter of 2020. This quarter, the Corporation’s ratio of annualized net charge-offs to average loans held-in-portfolio was0.58% , compared to0.24% in the third quarter of 2020. Refer to Table M for further information on net charge-offs and related ratios. -
At December 31, 2020, the allowance for credit losses (“ACL”) reflected a decrease of
$29.6 million from the third quarter of 2020 to$896.3 million . The ACL incorporates an updated economic outlook based on Moody’s Analytics forecasts for the United States and Puerto Rico. The updated economic outlook is more favorable than previous forecasts. This improvement prompted decreases in reserve levels that were partially offset with qualitative reserves aimed at addressing specific risks. Higher net charge-offs during the quarter also contributed to the reduction in ACL. The allowance for the BPPR and PB segments each decreased by$14.8 million , mostly concentrated in the consumer portfolios influenced by the improvements in the macroeconomic scenarios and lower volumes. The ratio of the allowance for credit losses to loans held-in-portfolio was3.05% in the fourth quarter of 2020, compared to3.15% in the previous quarter. The ratio of the allowance for credit losses to NPLs held-in-portfolio stood at121.5% , compared to126.1% in the previous quarter. -
Given that any one economic outlook is inherently uncertain, the Corporation leverages multiple scenarios to estimate its ACL. The ACL is estimated by weighting the outputs of Moody’s Analytics’ S1 (optimistic), Baseline, and S3 (pessimistic) scenarios. Among the three scenarios used to estimate the ACL, the Baseline is assigned the highest probability, followed by the S3 scenario given the uncertainties in the economic outlook and downside risk. The current baseline scenario shows improvement in both 2021 GDP growth and unemployment when compared to previous estimates. The 2021 forecasted GDP growth is now
4.1% for U.S. and mid2% for PR, with higher growth in 2022. This compares favorably with the previous 2021 forecast of3.5% for U.S. and2.1% for PR. The US and PR forecasted unemployment rate average for 2021 is now closer to7% and8% , respectively. This is an improvement over the previous estimates of8.4% for the U.S. and11.3% for PR. -
The provision for credit losses for the loans portfolios for the fourth quarter of 2020 decreased by
$8.7 million from the prior quarter, mostly due to the improvements in the macroeconomic scenarios. The provision for the BPPR segment increased by$17.1 million , due to higher NCOs during the quarter, while the provision for the PB segment decreased by$25.7 million . The provision to net charge-offs ratio was25.6% in the fourth quarter of 2020, compared to115.4% in the previous quarter. -
During the quarter the Corporation reclassified
$10.0 million of the expense for unfunded loan commitments from other operating expenses to the provision for credit loss caption. During the fourth quarter of 2020, we also recognized an additional expense of$2.6 million related to the unfunded loan commitments reserve, compared to$6.6 million during the previous quarter. Additionally, during the fourth quarter of 2020 we recorded a reduction to the reserve for credit losses in our investment portfolio of$2.2 million , compared to$0.3 million in the third quarter of 2020. The provision for unfunded loan commitments, provision for credit losses on our loan and lease portfolios and provision for credit losses on our investment portfolio are aggregated and presented in the provision for credit losses caption in our Statement of Operations.
Non-Performing Assets |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
(In thousands) |
31-Dec-20 |
|
30-Sep-20 |
|
31-Dec-19 |
Total non-performing loans held-in-portfolio |
|
|
|
|
|
Non-performing loans held-for-sale |
2,738 |
|
4,070 |
|
- |
Other real estate owned (“OREO”) |
83,146 |
|
100,592 |
|
122,072 |
Total non-performing assets |
|
|
|
|
|
Net charge-offs for the quarter |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
Ratios: |
|
|
|
|
|
Loans held-in-portfolio |
|
|
|
|
|
Non-performing loans held-in-portfolio to loans held-in-portfolio |
|
|
|
|
|
Allowance for credit losses to loans held-in-portfolio |
3.05 |
|
3.15 |
|
1.74 |
Allowance for credit losses to non-performing loans, excluding loans held-for-sale |
121.48 |
|
126.07 |
|
90.50 |
Refer to Table K for additional information. |
|
|
|
|
|
Provision for Credit Losses - Loan Portfolios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
Quarters ended |
|
Years ended |
|||||
(In thousands) |
|
31-Dec-20 |
|
30-Sep-20 |
|
31-Dec-19 |
|
31-Dec-20 |
31-Dec-19 |
Provision for credit losses - loan portfolios: |
|
|
|
|
|
|
|
|
|
BPPR |
|
|
|
|
|
|
|
|
|
Popular U.S. |
|
(13,971) |
|
11,770 |
|
6,381 |
|
76,471 |
30,028 |
Total provision for credit losses - loan portfolios |
|
|
|
|
|
|
|
|
|
Credit Quality by Segment |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
(In thousands) |
|
Quarters ended |
||||
BPPR |
|
31-Dec-20 |
|
30-Sep-20 |
|
31-Dec-19 |
Provision for credit losses - loan portfolios |
|
|
|
|
|
|
Net charge-offs |
|
41,217 |
|
13,769 |
|
58,962 |
Total non-performing loans held-in-portfolio |
700,377 |
|
693,676 |
|
499,200 |
|
Allowance / loans held-in-portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters ended |
||||
Popular U.S. |
|
31-Dec-20 |
|
30-Sep-20 |
|
31-Dec-19 |
Provision for credit losses - loan portfolios |
|
|
|
|
|
|
Net charge-offs |
|
861 |
|
3,090 |
|
22,919 |
Total non-performing loans held-in-portfolio |
|
37,397 |
|
40,692 |
|
28,641 |
Allowance / loans held-in-portfolio |
|
|
|
|
|
|
Financial Condition Highlights |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
||||
(In thousands) |
31-Dec-20 |
|
30-Sep-20 |
|
31-Dec-19 |
Cash and money market investments |
|
|
|
|
|
Investment securities |
21,864,184 |
|
21,478,048 |
|
17,946,343 |
Loans |
29,385,196 |
|
29,392,510 |
|
27,406,873 |
Total assets |
65,926,000 |
|
65,910,369 |
|
52,115,324 |
Deposits |
56,866,340 |
|
56,021,983 |
|
43,758,606 |
Borrowings |
1,346,284 |
|
1,407,424 |
|
1,294,986 |
Total liabilities |
59,897,313 |
|
59,998,284 |
|
46,098,545 |
Stockholders’ equity |
6,028,687 |
|
5,912,085 |
|
6,016,779 |
Total assets increased by
-
an increase of
$383.3 million in debt securities available-for-sale mainly due to purchases of U.S. agency mortgage-backed securities, partially offset by maturities and paydowns of U.S. Treasury securities;
partially offset by:
-
a decrease of
$293.2 million in cash and money market investments, mainly due to purchases of debt-securities available-for-sale; and
-
a decrease of
$79.7 million in other assets.
Total liabilities decreased by
-
a decrease of
$884.2 million in other liabilities mainly due to a decrease of$764.2 million in unsettled purchases of debt securities and a reduction in the liability for GNMA loans sold with a repurchase option of$104.2 million ; and
-
a decrease in other short-term borrowings by
$100.0 million due to maturities of FHLB advances at PB;
partially offset by:
-
an increase of
$844.4 million in deposits, of which$494 million are related to Puerto Rico public sector deposits and$534 million are related to retail and commercial demand and savings accounts at BPPR.
Stockholders’ equity increased by approximately
Common equity tier-1 ratio (“CET1”), common equity per share and tangible book value per share were
Refer to Table C for the Statements of Financial Condition.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation those about Popular’s business, financial condition, results of operations, plans, objectives and future performance. These statements are not guarantees of future performance, are based on management’s current expectations and, by their nature, involve risks, uncertainties, estimates and assumptions. Potential factors, some of which are beyond the Corporation’s control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. Risks and uncertainties include without limitation the effect of competitive and economic factors, and our reaction to those factors, the adequacy of the allowance for loan losses, delinquency trends, market risk and the impact of interest rate changes, capital market conditions, capital adequacy and liquidity, the effect of legal and regulatory proceedings (including as a result of any participation in and execution of government programs related to the COVID-19 pandemic), new accounting standards on the Corporation’s financial condition and results of operations, the scope and duration of the COVID-19 pandemic, actions taken by governmental authorities in response thereto, and the direct and indirect impact of the pandemic on Popular, our customers, service providers and third parties. All statements contained herein that are not clearly historical in nature, are forward-looking, and the words “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” “project” and similar expressions, and future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, are generally intended to identify forward-looking statements.
More information on the risks and important factors that could affect the Corporation’s future results and financial condition is included in our Annual Report on Form 10-K for the year ended December 31, 2019, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020, and September 30, 2020, and in our Annual Report on Form 10-K for the year ended December 31, 2020 to be filed with the Securities and Exchange Commission. Our filings are available on the Corporation’s website (www.popular.com) and on the Securities and Exchange Commission website (www.sec.gov). The Corporation assumes no obligation to update or revise any forward-looking statements or information which speak as of their respective dates.
About Popular, Inc.
Popular, Inc. (NASDAQ: BPOP) is the leading financial institution in Puerto Rico, by both assets and deposits, and ranks among the top 50 U.S. bank holding companies by assets. Founded in 1893, Banco Popular de Puerto Rico, Popular’s principal subsidiary, provides retail, mortgage and commercial banking services in Puerto Rico and the U.S. Virgin Islands. Popular also offers in Puerto Rico auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. In the mainland United States, Popular provides retail, mortgage and commercial banking services through its New York-chartered banking subsidiary, Popular Bank, which has branches located in New York, New Jersey and Florida.
Conference Call
Popular will hold a conference call to discuss its financial results today Thursday, January 28, 2021 at 10:00 a.m. Eastern Time. The call will be open to the public and broadcasted live over the Internet and can be accessed through the Investor Relations section of the Corporation’s website: www.popular.com.
Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through the dial-in telephone number 1-866-235-1201 or 1-412-902-4127. There is no charge to access the call.
A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Sunday, February 28, 2021. The replay dial-in is: 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10150838.
An electronic version of this press release can be found at the Corporation’s website: www.popular.com.
Popular, Inc. |
Financial Supplement to Fourth Quarter 2020 Earnings Release |
|
Table A - Selected Ratios and Other Information |
|
Table B - Consolidated Statement of Operations |
|
Table C - Consolidated Statement of Financial Condition |
|
Table D - Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - QUARTER |
|
Table E - Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - YEAR-TO-DATE |
|
Table F - Mortgage Banking Activities and Other Service Fees |
|
Table G - Loans and Deposits |
|
Table H - Loan Delinquency - PUERTO RICO OPERATIONS |
|
Table I - Loan Delinquency - POPULAR U.S. OPERATIONS |
|
Table J - Loan Delinquency - CONSOLIDATED |
|
Table K - Non-Performing Assets |
|
Table L - Activity in Non-Performing Loans |
|
Table M - Allowance for Credit Losses, Net Charge-offs and Related Ratios |
|
Table N - Allowance for Credit Losses - Loan Portfolios - CONSOLIDATED |
|
Table O - Allowance for Credit Losses - Loan Portfolios - PUERTO RICO OPERATIONS |
|
Table P - Allowance for Credit Losses - Loan Portfolios - POPULAR U.S. OPERATIONS |
|
Table Q - Reconciliation to GAAP Financial Measures |
POPULAR, INC. |
|||||
Financial Supplement to Fourth Quarter 2020 Earnings Release |
|||||
Table A - Selected Ratios and Other Information |
|||||
(Unaudited) |
|||||
|
|
|
|
||
|
Quarters ended |
Years ended |
|||
|
31-Dec-20 |
30-Sep-20 |
31-Dec-19 |
31-Dec-20 |
31-Dec-19 |
Basic EPS |
|
|
|
|
|
Diluted EPS |
|
|
|
|
|
Average common shares outstanding |
83,841,343 |
83,809,272 |
96,183,126 |
85,882,371 |
96,848,835 |
Average common shares outstanding - assuming dilution |
83,940,412 |
83,836,151 |
96,330,785 |
85,975,259 |
96,997,800 |
Common shares outstanding at end of period |
84,244,235 |
84,219,464 |
95,589,629 |
84,244,235 |
95,589,629 |
Market value per common share |
|
|
|
|
|
Market capitalization - (In millions) |
|
|
|
|
|
Return on average assets |
|
|
|
|
|
Return on average common equity |
|
|
|
|
|
Net interest margin (non-taxable equivalent basis) |
|
|
|
|
|
Net interest margin (taxable equivalent basis) -non-GAAP |
|
|
|
|
|
Common equity per share |
|
|
|
|
|
Tangible common book value per common share (non-GAAP) [1] |
|
|
|
|
|
Tangible common equity to tangible assets (non-GAAP) [1] |
|
|
|
|
|
Return on average tangible common equity [1] |
|
|
|
|
|
Tier 1 capital |
|
|
|
|
|
Total capital |
|
|
|
|
|
Tier 1 leverage |
|
|
|
|
|
Common Equity Tier 1 capital |
|
|
|
|
|
[1] Refer to Table Q for reconciliation to GAAP financial measures. |
|||||
POPULAR, INC. |
|||||||
Financial Supplement to Fourth Quarter 2020 Earnings Release |
|||||||
Table B - Consolidated Statement of Operations |
|||||||
(Unaudited) |
|||||||
|
Quarters ended |
Variance |
Quarter ended |
Variance |
Years ended |
||
|
|
|
Q4 2020 |
|
Q4 2020 |
|
|
(In thousands, except per share information) |
31-Dec-20 |
30-Sep-20 |
vs. Q3 2020 |
31-Dec-19 |
vs. Q4 2019 |
31-Dec-20 |
31-Dec-19 |
Interest income: |
|
|
|
|
|
|
|
Loans |
|
|
|
|
|
|
|
Money market investments |
2,933 |
2,773 |
160 |
18,950 |
(16,017) |
19,721 |
89,823 |
Investment securities |
85,502 |
79,142 |
6,360 |
93,183 |
(7,681) |
329,440 |
368,002 |
Total interest income |
519,423 |
513,201 |
6,222 |
559,869 |
(40,446) |
2,091,551 |
2,260,793 |
Interest expense: |
|
|
|
|
|
|
|
Deposits |
33,420 |
37,554 |
(4,134) |
76,823 |
(43,403) |
175,855 |
304,858 |
Short-term borrowings |
348 |
416 |
(68) |
1,272 |
(924) |
2,457 |
6,100 |
Long-term debt |
14,039 |
14,210 |
(171) |
14,350 |
(311) |
56,626 |
58,141 |
Total interest expense |
47,807 |
52,180 |
(4,373) |
92,445 |
(44,638) |
234,938 |
369,099 |
Net interest income |
471,616 |
461,021 |
10,595 |
467,424 |
4,192 |
1,856,613 |
1,891,694 |
Provision for credit losses |
21,218 |
19,138 |
2,080 |
47,224 |
(26,006) |
292,536 |
165,779 |
Net interest income after provision for credit losses |
450,398 |
441,883 |
8,515 |
420,200 |
30,198 |
1,564,077 |
1,725,915 |
Service charges on deposit accounts |
39,152 |
36,849 |
2,303 |
41,656 |
(2,504) |
147,823 |
160,933 |
Other service fees |
71,156 |
69,879 |
1,277 |
75,559 |
(4,403) |
257,892 |
285,206 |
Mortgage banking activities |
9,730 |
(9,526) |
19,256 |
13,448 |
(3,718) |
10,401 |
32,093 |
Net gain (loss) on sale of debt securities |
- |
41 |
(41) |
- |
- |
41 |
(20) |
Net gain, including impairment, on equity securities |
1,410 |
5,150 |
(3,740) |
332 |
1,078 |
6,279 |
2,506 |
Net profit on trading account debt securities |
440 |
20 |
420 |
17 |
423 |
1,033 |
994 |
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale |
253 |
(2,198) |
2,451 |
- |
253 |
1,234 |
- |
Adjustments (expense) to indemnity reserves on loans sold |
2,160 |
4,183 |
(2,023) |
1,321 |
839 |
390 |
(343) |
Other operating income |
20,546 |
24,369 |
(3,823) |
20,082 |
464 |
87,219 |
88,514 |
Total non-interest income |
144,847 |
128,767 |
16,080 |
152,415 |
(7,568) |
512,312 |
569,883 |
Operating expenses: |
|
|
|
|
|
|
|
Personnel costs |
|
|
|
|
|
|
|
Salaries |
92,063 |
91,891 |
172 |
91,161 |
902 |
370,179 |
351,788 |
Commissions, incentives and other bonuses |
19,399 |
17,849 |
1,550 |
27,007 |
(7,608) |
78,582 |
97,764 |
Pension, postretirement and medical insurance |
12,454 |
10,639 |
1,815 |
11,281 |
1,173 |
44,123 |
41,804 |
Other personnel costs, including payroll taxes |
18,351 |
15,562 |
2,789 |
28,878 |
(10,527) |
71,321 |
99,269 |
Total personnel costs |
142,267 |
135,941 |
6,326 |
158,327 |
(16,060) |
564,205 |
590,625 |
Net occupancy expenses |
42,793 |
25,907 |
16,886 |
24,908 |
17,885 |
119,345 |
96,339 |
Equipment expenses |
22,395 |
24,088 |
(1,693) |
21,591 |
804 |
88,932 |
84,215 |
Other taxes |
13,532 |
13,918 |
(386) |
13,386 |
146 |
54,454 |
51,653 |
Professional fees |
|
|
|
|
|
|
|
Collections, appraisals and other credit related fees |
2,948 |
2,862 |
86 |
3,704 |
(756) |
12,588 |
16,300 |
Programming, processing and other technology services |
66,483 |
64,876 |
1,607 |
63,029 |
3,454 |
253,565 |
247,332 |
Legal fees, excluding collections |
2,734 |
2,707 |
27 |
2,527 |
207 |
10,611 |
12,877 |
Other professional fees |
31,865 |
26,029 |
5,836 |
33,876 |
(2,011) |
117,358 |
107,902 |
Total professional fees |
104,030 |
96,474 |
7,556 |
103,136 |
894 |
394,122 |
384,411 |
Communications |
6,274 |
5,694 |
580 |
5,765 |
509 |
23,496 |
23,450 |
Business promotion |
16,466 |
14,664 |
1,802 |
23,214 |
(6,748) |
57,608 |
75,372 |
FDIC deposit insurance |
6,880 |
6,568 |
312 |
5,172 |
1,708 |
23,868 |
18,179 |
Other real estate owned (OREO) (income) expenses |
(4,000) |
(1,615) |
(2,385) |
569 |
(4,569) |
(3,480) |
4,298 |
Credit and debit card processing, volume, interchange and other expenses |
13,209 |
11,744 |
1,465 |
10,486 |
2,723 |
45,108 |
38,059 |
Other operating expenses |
|
|
|
|
|
|
|
Operational losses |
4,992 |
8,837 |
(3,845) |
2,916 |
2,076 |
26,331 |
21,414 |
All other |
6,034 |
17,770 |
(11,736) |
18,814 |
(12,780) |
57,443 |
80,097 |
Total other operating expenses |
11,026 |
26,607 |
(15,581) |
21,730 |
(10,704) |
83,774 |
101,511 |
Amortization of intangibles |
1,052 |
1,076 |
(24) |
2,288 |
(1,236) |
6,397 |
9,370 |
Total operating expenses |
375,924 |
361,066 |
14,858 |
390,572 |
(14,648) |
1,457,829 |
1,477,482 |
Income before income tax |
219,321 |
209,584 |
9,737 |
182,043 |
37,278 |
618,560 |
818,316 |
Income tax expense |
43,045 |
41,168 |
1,877 |
15,258 |
27,787 |
111,938 |
147,181 |
Net income |
|
|
|
|
|
|
|
Net income applicable to common stock |
|
|
|
|
|
|
|
Net income per common share - basic |
|
|
|
|
|
|
|
Net income per common share - diluted |
|
|
|
|
|
|
|
Dividends Declared per Common Share |
|
|
$- |
|
|
|
|
Popular, Inc. |
||||||
Financial Supplement to Fourth Quarter 2020 Earnings Release |
||||||
Table C - Consolidated Statement of Financial Condition |
||||||
(Unaudited) |
||||||
|
|
|
|
|
|
Variance |
|
|
|
|
|
|
Q4 2020 vs. |
(In thousands) |
31-Dec-20 |
30-Sep-20 |
31-Dec-19 |
Q3 2020 |
||
Assets: |
|
|
|
|
||
Cash and due from banks |
|
|
|
|
||
Money market investments |
11,640,880 |
11,859,924 |
3,262,286 |
(219,044) |
||
Trading account debt securities, at fair value |
36,674 |
33,053 |
40,321 |
3,621 |
||
Debt securities available-for-sale, at fair value |
21,561,152 |
21,177,839 |
17,648,473 |
383,313 |
||
Debt securities held-to-maturity, at amortized cost |
92,621 |
93,163 |
97,662 |
(542) |
||
|
|
Less: Allowance for credit losses |
10,261 |
12,421 |
- |
(2,160) |
|
|
Total debt securities held-to-maturity, net |
82,360 |
80,742 |
97,662 |
1,618 |
Equity securities |
173,737 |
173,993 |
159,887 |
(256) |
||
Loans held-for-sale, at lower of cost or fair value |
99,455 |
102,760 |
59,203 |
(3,305) |
||
Loans held-in-portfolio |
29,588,430 |
29,586,348 |
27,587,856 |
2,082 |
||
|
|
Less: Unearned income |
203,234 |
193,838 |
180,983 |
9,396 |
|
|
Allowance for credit losses |
896,250 |
925,850 |
477,708 |
(29,600) |
|
|
Total loans held-in-portfolio, net |
28,488,946 |
28,466,660 |
26,929,165 |
22,286 |
Premises and equipment, net |
510,241 |
510,473 |
556,650 |
(232) |
||
Other real estate |
83,146 |
100,592 |
122,072 |
(17,446) |
||
Accrued income receivable |
209,320 |
204,233 |
180,871 |
5,087 |
||
Mortgage servicing rights, at fair value |
118,395 |
123,552 |
150,906 |
(5,157) |
||
Other assets |
1,737,041 |
1,816,706 |
1,819,615 |
(79,665) |
||
Goodwill |
671,122 |
671,122 |
671,122 |
- |
||
Other intangible assets |
22,466 |
23,518 |
28,780 |
(1,052) |
||
Total assets |
|
|
|
|
||
Liabilities and Stockholders’ Equity: |
|
|
|
|
||
Liabilities: |
|
|
|
|
||
|
Deposits: |
|
|
|
|
|
|
|
Non-interest bearing |
|
|
|
|
|
|
Interest bearing |
43,737,641 |
42,475,551 |
34,598,433 |
1,262,090 |
|
|
Total deposits |
56,866,340 |
56,021,983 |
43,758,606 |
844,357 |
Assets sold under agreements to repurchase |
121,303 |
106,028 |
193,378 |
15,275 |
||
Other short-term borrowings |
- |
100,000 |
- |
(100,000) |
||
Notes payable |
1,224,981 |
1,201,396 |
1,101,608 |
23,585 |
||
Other liabilities |
1,684,689 |
2,568,877 |
1,044,953 |
(884,188) |
||
Total liabilities |
59,897,313 |
59,998,284 |
46,098,545 |
(100,971) |
||
Stockholders’ equity: |
|
|
|
|
||
Preferred stock |
22,143 |
22,143 |
50,160 |
- |
||
Common stock |
1,045 |
1,045 |
1,044 |
- |
||
Surplus |
4,571,534 |
4,521,689 |
4,447,412 |
49,845 |
||
Retained earnings |
2,260,928 |
2,168,153 |
2,147,915 |
92,775 |
||
Treasury stock |
(1,016,954) |
(1,016,361) |
(459,814) |
(593) |
||
Accumulated other comprehensive income (loss), net of tax |
189,991 |
215,416 |
(169,938) |
(25,425) |
||
|
|
Total stockholders’ equity |
6,028,687 |
5,912,085 |
6,016,779 |
116,602 |
Total liabilities and stockholders’ equity |
|
|
|
|
||
Popular, Inc. |
||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2020 Earnings Release |
||||||||||||||||||||||
Table D - Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - QUARTER |
||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters ended |
|
Variance |
|
||||||||||||||||
|
|
|
31-Dec-20 |
|
30-Sep-20 |
|
31-Dec-19 |
|
Q4 2020 vs. Q3 2020 |
|
Q4 2020 vs. Q4 2019 |
|
||||||||||
($ amounts in millions) |
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 |
|
|
1.56 |
% |
|
|
1.49 |
% |
|
|
2.71 |
% |
|
|
0.07 |
% |
|
( |
(1.15) |
% |
|
|
Loans: |
|||||||||||||||||||||
|
|
Commercial |
13,610 |
170.2 |
4.98 |
|
13,669 |
170.1 |
4.95 |
|
12,276 |
181.3 |
5.86 |
|
(59) |
0.1 |
0.03 |
|
1,334 |
(11.1) |
(0.88) |
|
|
|
Construction |
928 |
12.8 |
5.48 |
|
930 |
13.3 |
5.67 |
|
781 |
12.3 |
6.27 |
|
(2) |
(0.5) |
(0.19) |
|
147 |
0.5 |
(0.79) |
|
|
|
Mortgage |
7,856 |
98.6 |
5.02 |
|
7,094 |
95.8 |
5.40 |
|
7,109 |
95.2 |
5.36 |
|
762 |
2.8 |
(0.38) |
|
747 |
3.4 |
(0.34) |
|
|
|
Consumer |
2,606 |
73.1 |
11.16 |
|
2,722 |
76.7 |
11.21 |
|
2,942 |
86.2 |
11.62 |
|
(116) |
(3.6) |
(0.05) |
|
(336) |
(13.1) |
(0.46) |
|
|
|
Auto |
3,130 |
68.8 |
8.74 |
|
3,006 |
68.6 |
9.08 |
|
2,935 |
68.7 |
9.28 |
|
124 |
0.2 |
(0.34) |
|
195 |
0.1 |
(0.54) |
|
|
|
Lease financing |
1,170 |
17.8 |
6.07 |
|
1,122 |
17.1 |
6.08 |
|
1,038 |
15.7 |
6.06 |
|
48 |
0.7 |
(0.01) |
|
132 |
2.1 |
0.01 |
|
|
Total loans |
29,300 |
441.3 |
6.00 |
|
28,543 |
441.6 |
6.16 |
|
27,081 |
459.4 |
6.75 |
|
757 |
(0.3) |
(0.16) |
|
2,219 |
(18.1) |
(0.75) |
|
|
|
Total interest earning assets |
|
|
3.66 |
% |
|
|
3.72 |
% |
|
|
4.96 |
% |
|
|
(0.06) |
% |
|
|
(1.30) |
% |
|
|
|
Allowance for credit losses - loan portfolio |
(930) |
|
|
|
(923) |
|
|
|
(515) |
|
|
|
(7) |
|
|
|
(415) |
|
|
|
|
|
Allowance for credit losses - investment securities |
(12) |
|
|
|
(13) |
|
|
|
- |
|
|
|
1 |
|
|
|
(12) |
|
|
|
|
|
Other non-interest earning assets |
4,054 |
|
|
|
4,176 |
|
|
|
3,943 |
|
|
|
(122) |
|
|
|
111 |
|
|
|
|
Total average assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity: |
||||||||||||||||||||||
|
Interest bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market |
|
|
0.16 |
% |
|
|
0.17 |
% |
|
|
0.88 |
% |
|
|
(0.01) |
% |
|
|
(0.72) |
% |
|
|
Savings |
13,890 |
7.5 |
0.22 |
|
13,103 |
8.3 |
0.25 |
|
10,830 |
13.3 |
0.49 |
|
787 |
(0.8) |
(0.03) |
|
3,060 |
(5.8) |
(0.27) |
|
|
|
Time deposits |
7,656 |
17.2 |
0.89 |
|
7,810 |
20.2 |
1.03 |
|
7,749 |
27.5 |
1.41 |
|
(154) |
(3.0) |
(0.14) |
|
(93) |
(10.3) |
(0.52) |
|
|
|
Total interest-bearing deposits |
43,375 |
33.4 |
0.31 |
|
42,138 |
37.6 |
0.35 |
|
34,891 |
76.8 |
0.87 |
|
1,237 |
(4.2) |
(0.04) |
|
8,484 |
(43.4) |
(0.56) |
|
|
Borrowings |
1,354 |
14.4 |
4.26 |
|
1,358 |
14.6 |
4.31 |
|
1,345 |
15.6 |
4.65 |
|
(4) |
(0.2) |
(0.05) |
|
9 |
(1.2) |
(0.39) |
|
|
|
|
Total interest-bearing liabilities |
44,729 |
47.8 |
0.43 |
|
43,496 |
52.2 |
0.48 |
|
36,236 |
92.4 |
1.01 |
|
1,233 |
(4.4) |
(0.05) |
|
8,493 |
(44.6) |
(0.58) |
|
|
|
Net interest spread |
|
|
3.23 |
% |
|
|
3.24 |
% |
|
|
3.95 |
% |
|
|
(0.01) |
% |
|
|
(0.72) |
% |
|
Non-interest bearing deposits |
13,303 |
|
|
|
12,806 |
|
|
|
8,894 |
|
|
|
497 |
|
|
|
4,409 |
|
|
|
|
|
Other liabilities |
1,393 |
|
|
|
1,435 |
|
|
|
957 |
|
|
|
(42) |
|
|
|
436 |
|
|
|
|
|
Stockholders' equity |
5,541 |
|
|
|
5,383 |
|
|
|
5,887 |
|
|
|
158 |
|
|
|
(346) |
|
|
|
|
|
|
Total average liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income / margin on a taxable equivalent basis (Non-GAAP) |
|
3.35 |
% |
|
|
3.37 |
% |
|
|
4.20 |
% |
|
|
(0.02) |
% |
|
|
(0.85) |
% |
|||
Taxable equivalent adjustment |
49.1 |
|
|
|
45.8 |
|
|
|
45.9 |
|
|
|
3.3 |
|
|
|
3.2 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income / margin non-taxable equivalent basis (GAAP) |
|
3.04 |
% |
|
|
3.06 |
% |
|
|
3.83 |
% |
|
|
(0.02) |
% |
|
|
(0.79) |
% |
|||
Popular, Inc. |
||||||||||||||
Financial Supplement to Fourth Quarter 2020 Earnings Release |
||||||||||||||
Table E - Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - YEAR-TO-DATE |
||||||||||||||
(Unaudited) |
||||||||||||||
|
|
|
Years ended |
|
|
|
|
|
||||||
|
|
|
31-Dec-20 |
|
31-Dec-19 |
|
Variance |
|
||||||
|
|
|
Average |
Income / |
Yield / |
|
Average |
Income / |
Yield / |
|
Average |
Income / |
Yield / |
|
($ amounts in millions) |
balance |
Expense |
Rate |
|
balance |
Expense |
Rate |
|
balance |
Expense |
Rate |
|
||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Money market, trading and investment securities |
|
|
1.76 |
% |
|
|
2.96 |
% |
|
( |
(1.20) |
% |
|
|
Loans not covered under loss-sharing agreements with the FDIC: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
13,245 |
692.4 |
5.23 |
|
12,171 |
743.7 |
6.11 |
|
1,074 |
(51.3) |
(0.88) |
|
|
|
Construction |
913 |
52.4 |
5.74 |
|
801 |
52.8 |
6.59 |
|
112 |
(0.4) |
(0.85) |
|
|
|
Mortgage |
7,255 |
379.8 |
5.23 |
|
7,121 |
381.5 |
5.36 |
|
134 |
(1.7) |
(0.13) |
|
|
|
Consumer |
2,839 |
322.0 |
11.34 |
|
2,885 |
340.8 |
11.81 |
|
(46) |
(18.8) |
(0.47) |
|
|
|
Auto |
3,021 |
271.2 |
8.97 |
|
2,839 |
272.2 |
9.59 |
|
182 |
(1.0) |
(0.62) |
|
|
|
Lease financing |
1,112 |
67.2 |
6.05 |
|
989 |
59.9 |
6.06 |
|
123 |
7.3 |
(0.01) |
|
|
Total loans |
28,385 |
1,785.0 |
6.29 |
|
26,806 |
1,850.9 |
6.90 |
|
1,579 |
(65.9) |
(0.61) |
|
|
|
Total interest earning assets |
|
|
4.04 |
% |
|
|
5.21 |
% |
|
( |
(1.17) |
% |
|
|
|
Allowance for credit losses - loan portfolio |
(897) |
|
|
|
(544) |
|
|
|
(353) |
|
|
|
|
|
Allowance for credit losses - investment securities |
(13) |
|
|
|
- |
|
|
|
(13) |
|
|
|
|
|
Other non-interest earning assets |
4,089 |
|
|
|
3,940 |
|
|
|
149 |
|
|
|
|
Total average assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Interest bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market |
|
|
0.28 |
% |
|
|
0.96 |
% |
|
( |
(0.68) |
% |
|
|
Savings |
12,399 |
37.8 |
0.30 |
|
10,249 |
45.5 |
0.44 |
|
2,150 |
(7.7) |
(0.14) |
|
|
|
Time deposits |
7,971 |
83.4 |
1.05 |
|
7,770 |
112.7 |
1.45 |
|
201 |
(29.3) |
(0.40) |
|
|
|
Total interest-bearing deposits |
40,048 |
175.9 |
0.44 |
|
33,345 |
304.9 |
0.91 |
|
6,703 |
(129.0) |
(0.47) |
|
|
Borrowings |
1,344 |
59.1 |
4.40 |
|
1,425 |
64.2 |
4.51 |
|
(81) |
(5.1) |
(0.11) |
|
|
|
|
Total interest-bearing liabilities |
41,392 |
235.0 |
0.57 |
|
34,770 |
369.1 |
1.06 |
|
6,622 |
(134.1) |
(0.49) |
|
|
|
Net interest spread |
|
|
3.47 |
% |
|
|
4.15 |
% |
|
|
(0.68) |
% |
|
Non-interest bearing deposits |
11,538 |
|
|
|
8,873 |
|
|
|
2,665 |
|
|
|
|
|
Other liabilities |
1,234 |
|
|
|
984 |
|
|
|
250 |
|
|
|
|
|
Stockholders' equity |
5,420 |
|
|
|
5,714 |
|
|
|
(294) |
|
|
|
|
|
|
Total average liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income / margin on a taxable equivalent basis (Non-GAAP) |
|
3.62 |
% |
|
|
4.43 |
% |
|
( |
(0.81) |
% |
|||
Taxable equivalent adjustment |
185.4 |
|
|
|
186.8 |
|
|
|
(1.4) |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income / margin non-taxable equivalent basis (GAAP) |
|
3.29 |
% |
|
|
4.03 |
% |
|
( |
(0.74) |
% |
|||
Popular, Inc. |
|
|
|
|
|
|
|
|
|
Financial Supplement to Fourth Quarter 2020 Earnings Release |
|
|
|
|
|||||
Table F - Mortgage Banking Activities and Other Service Fees |
|
|
|
|
|||||
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Banking Activities |
|
|
|
|
|
|
|
|
|
|
Quarters ended |
Variance |
Years ended |
Variance |
|||||
(In thousands) |
31-Dec-20 |
30-Sep-20 |
31-Dec-19 |
Q4 2020
|
Q4 2020
|
31-Dec-20 |
31-Dec-19 |
2020 vs. 2019 |
|
Mortgage servicing fees, net of fair value adjustments: |
|
|
|
|
|
|
|
|
|
|
Mortgage servicing fees |
|
|
|
|
|
|
|
|
|
Mortgage servicing rights fair value adjustments |
(8,695) |
(20,491) |
(1,577) |
11,796 |
(7,118) |
(42,055) |
(27,430) |
(14,625) |
Total mortgage servicing fees, net of fair value adjustments |
1,547 |
(7,525) |
9,975 |
9,072 |
(8,428) |
1,179 |
19,522 |
(18,343) |
|
Net gain on sale of loans, including valuation on loans held-for-sale |
10,826 |
10,916 |
4,164 |
(90) |
6,662 |
31,215 |
18,817 |
12,398 |
|
Trading account (loss) profit: |
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) on outstanding derivative positions |
4 |
(4) |
- |
8 |
4 |
- |
- |
- |
|
Realized losses on closed derivative positions |
(2,195) |
(1,958) |
(691) |
(237) |
(1,504) |
(10,586) |
(6,246) |
(4,340) |
Total trading account loss |
(2,191) |
(1,962) |
(691) |
(229) |
(1,500) |
(10,586) |
(6,246) |
(4,340) |
|
Losses on repurchased loans, including interest advances[1] |
(452) |
(10,955) |
- |
10,503 |
(452) |
(11,407) |
- |
(11,407) |
|
Total mortgage banking activities |
|
|
|
|
|
|
|
|
|
[1] The Corporation, from time to time, repurchases delinquent loans from its GNMA servicing portfolio, in compliance with Guarantor guidelines, and may incur in losses related to previously advanced interest on delinquent loans. During the quarter ended September 30, 2020 the Corporation repurchased |
|||||||||
|
|
|
|
|
|
|
|
|
|
Other Service Fees |
|
|
|
|
|
|
|
|
|
|
Quarters ended |
Variance |
Years ended |
Variance |
|||||
(In thousands) |
31-Dec-20 |
30-Sep-20 |
31-Dec-19 |
Q4 2020
|
Q4 2020
|
31-Dec-20 |
31-Dec-19 |
2020 vs. 2019 |
|
Other service fees: |
|
|
|
|
|
|
|
|
|
|
Debit card fees |
|
|
|
|
|
|
|
|
|
Insurance fees |
13,803 |
13,941 |
17,574 |
(138) |
(3,771) |
52,014 |
62,226 |
(10,212) |
|
Credit card fees |
27,986 |
27,077 |
26,155 |
909 |
1,831 |
96,011 |
98,860 |
(2,849) |
|
Sale and administration of investment products |
5,488 |
5,094 |
6,367 |
394 |
(879) |
21,755 |
23,072 |
(1,317) |
|
Trust fees |
5,499 |
4,886 |
5,263 |
613 |
236 |
21,191 |
20,694 |
497 |
|
Other fees |
7,170 |
7,758 |
7,981 |
(588) |
(811) |
27,269 |
33,212 |
(5,943) |
Total other service fees |
|
|
|
|
|
|
|
|
|
Popular, Inc. |
|
|
|
|
|
Financial Supplement to Fourth Quarter 2020 Earnings Release |
|||||
Table G - Loans and Deposits |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Loans - Ending Balances |
|
|
|
|
|
|
|
|
|
Variance |
|
(In thousands) |
31-Dec-20 |
30-Sep-20 |
31-Dec-19 |
Q4 2020
|
Q4 2020
|
Loans held-in-portfolio: |
|
|
|
|
|
Commercial |
|
|
|
|
|
Construction |
918,765 |
936,274 |
831,092 |
(17,509) |
87,673 |
Legacy [1] |
15,473 |
16,168 |
22,105 |
(695) |
(6,632) |
Lease financing |
1,197,661 |
1,153,108 |
1,059,507 |
44,553 |
138,154 |
Mortgage |
7,890,680 |
7,924,441 |
7,183,532 |
(33,761) |
707,148 |
Auto |
3,132,228 |
3,045,453 |
2,917,522 |
86,775 |
214,706 |
Consumer |
2,624,109 |
2,705,692 |
3,080,364 |
(81,583) |
(456,255) |
Total loans held-in-portfolio |
|
|
|
|
|
Loans held-for-sale: |
|
|
|
|
|
Commercial |
|
|
$- |
|
|
Mortgage |
96,717 |
98,690 |
59,203 |
(1,973) |
37,514 |
Total loans held-for-sale |
|
|
|
|
|
Total loans |
|
|
|
|
|
[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 Popular U.S. segment. |
|||||
Deposits - Ending Balances |
|
|
|
|
|
|
|
|
|
Variance |
|
(In thousands) |
31-Dec-20 |
30-Sep-20 |
31-Dec-19 |
Q4 2020
|
Q4 2020
|
Demand deposits [1] |
|
|
|
|
|
Savings, NOW and money market deposits (non-brokered) |
26,390,565 |
24,696,244 |
19,169,899 |
1,694,321 |
7,220,666 |
Savings, NOW and money market deposits (brokered) |
635,198 |
551,770 |
347,765 |
83,428 |
287,433 |
Time deposits (non-brokered) |
7,130,749 |
7,664,361 |
7,546,621 |
(533,612) |
(415,872) |
Time deposits (brokered CDs) |
177,099 |
180,568 |
128,176 |
(3,469) |
48,923 |
Total deposits |
|
|
|
|
|
[1] Includes interest and non-interest bearing demand deposits. |
|
|
|
|
|
Popular, Inc. |
|||||||||||||||||||||||||
Financial Supplement to Fourth Quarter 2020 Earnings Release |
|||||||||||||||||||||||||
Table H - Loan Delinquency - Puerto Rico Operations |
|||||||||||||||||||||||||
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
31-Dec-20 |
|||||||||||||||||||||||||
Puerto Rico |
|||||||||||||||||||||||||
|
|
|
Past due |
|
|
|
|
|
|
|
Past due 90 days or more |
||||||||||||||
|
|
30-59 |
|
60-89 |
|
90 days |
|
Total |
|
|
|
|
|
|
Non-accrual |
|
Accruing |
||||||||
(In thousands) |
days |
|
days |
|
or more |
|
past due |
|
Current |
|
Loans HIP |
|
|
loans |
|
loans |
|||||||||
Commercial multi-family |
$ |
796 |
|
$ |
- |
|
$ |
505 |
|
$ |
1,301 |
|
$ |
150,979 |
|
$ |
152,280 |
|
|
$ |
505 |
|
$ |
- |
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-owner occupied |
|
2,189 |
|
|
3,503 |
|
|
77,137 |
|
|
82,829 |
|
|
1,924,504 |
|
|
2,007,333 |
|
|
|
77,137 |
|
|
- |
|
Owner occupied |
|
8,270 |
|
|
1,218 |
|
|
92,001 |
|
|
101,489 |
|
|
1,497,406 |
|
|
1,598,895 |
|
|
|
92,001 |
|
|
- |
Commercial and industrial |
|
10,223 |
|
|
775 |
|
|
35,012 |
|
|
46,010 |
|
|
4,183,098 |
|
|
4,229,108 |
|
|
|
34,449 |
|
|
563 |
|
Construction |
|
- |
|
|
- |
|
|
21,497 |
|
|
21,497 |
|
|
135,609 |
|
|
157,106 |
|
|
|
21,497 |
|
|
- |
|
Mortgage |
|
195,602 |
|
|
87,726 |
|
|
1,428,824 |
|
|
1,712,152 |
|
|
5,057,991 |
|
|
6,770,143 |
|
|
|
414,343 |
|
|
1,014,481 |
|
Leasing |
|
9,141 |
|
|
1,427 |
|
|
3,441 |
|
|
14,009 |
|
|
1,183,652 |
|
|
1,197,661 |
|
|
|
3,441 |
|
|
- |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit cards |
|
6,550 |
|
|
4,619 |
|
|
12,798 |
|
|
23,967 |
|
|
895,968 |
|
|
919,935 |
|
|
|
- |
|
|
12,798 |
|
Home equity lines of credit |
|
184 |
|
|
- |
|
|
48 |
|
|
232 |
|
|
3,947 |
|
|
4,179 |
|
|
|
- |
|
|
48 |
|
Personal |
|
11,255 |
|
|
8,097 |
|
|
26,387 |
|
|
45,739 |
|
|
1,232,008 |
|
|
1,277,747 |
|
|
|
26,387 |
|
|
- |
|
Auto |
|
53,186 |
|
|
12,696 |
|
|
15,736 |
|
|
81,618 |
|
|
3,050,610 |
|
|
3,132,228 |
|
|
|
15,736 |
|
|
- |
|
Other |
|
304 |
|
|
483 |
|
|
15,052 |
|
|
15,839 |
|
|
110,826 |
|
|
126,665 |
|
|
|
14,881 |
|
|
171 |
Total |
$ |
297,700 |
|
$ |
120,544 |
|
$ |
1,728,438 |
|
$ |
2,146,682 |
|
$ |
19,426,598 |
|
$ |
21,573,280 |
|
|
$ |
700,377 |
|
$ |
1,028,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-Sep-20 |
|||||||||||||||||||||||||
Puerto Rico |
|||||||||||||||||||||||||
|
|
|
Past due |
|
|
|
|
|
|
|
Past due 90 days or more |
||||||||||||||
|
|
30-59 |
|
60-89 |
|
90 days |
|
Total |
|
|
|
|
|
|
Non-accrual |
|
Accruing |
||||||||
(In thousands) |
days |
|
days |
|
or more |
|
past due |
|
Current |
|
Loans HIP |
|
|
loans |
|
loans |
|||||||||
Commercial multi-family |
$ |
3,480 |
|
$ |
129 |
|
$ |
1,400 |
|
$ |
5,009 |
|
$ |
139,169 |
|
$ |
144,178 |
|
|
$ |
1,400 |
|
$ |
- |
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-owner occupied |
|
19,523 |
|
|
2,014 |
|
|
98,811 |
|
|
120,348 |
|
|
1,950,794 |
|
|
2,071,142 |
|
|
|
98,811 |
|
|
- |
|
Owner occupied |
|
10,187 |
|
|
4,223 |
|
|
97,453 |
|
|
111,863 |
|
|
1,458,412 |
|
|
1,570,275 |
|
|
|
97,453 |
|
|
- |
Commercial and industrial |
|
6,809 |
|
|
6,376 |
|
|
45,013 |
|
|
58,198 |
|
|
4,233,554 |
|
|
4,291,752 |
|
|
|
44,320 |
|
|
693 |
|
Construction |
|
4,895 |
|
|
- |
|
|
21,514 |
|
|
26,409 |
|
|
169,656 |
|
|
196,065 |
|
|
|
21,514 |
|
|
- |
|
Mortgage |
|
336,824 |
|
|
59,386 |
|
|
1,567,504 |
|
|
1,963,714 |
|
|
4,863,266 |
|
|
6,826,980 |
|
|
|
370,060 |
|
|
1,197,444 |
|
Leasing |
|
8,254 |
|
|
2,450 |
|
|
3,217 |
|
|
13,921 |
|
|
1,139,187 |
|
|
1,153,108 |
|
|
|
3,217 |
|
|
- |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit cards |
|
6,125 |
|
|
6,305 |
|
|
14,505 |
|
|
26,935 |
|
|
904,604 |
|
|
931,539 |
|
|
|
- |
|
|
14,505 |
|
Home equity lines of credit |
|
181 |
|
|
- |
|
|
58 |
|
|
239 |
|
|
4,075 |
|
|
4,314 |
|
|
|
- |
|
|
58 |
|
Personal |
|
13,166 |
|
|
7,569 |
|
|
29,343 |
|
|
50,078 |
|
|
1,255,707 |
|
|
1,305,785 |
|
|
|
29,343 |
|
|
- |
|
Auto |
|
39,887 |
|
|
10,377 |
|
|
13,454 |
|
|
63,718 |
|
|
2,981,735 |
|
|
3,045,453 |
|
|
|
13,454 |
|
|
- |
|
Other |
|
190 |
|
|
1,224 |
|
|
14,348 |
|
|
15,762 |
|
|
108,290 |
|
|
124,052 |
|
|
|
14,104 |
|
|
244 |
Total |
$ |
449,521 |
|
$ |
100,053 |
|
$ |
1,906,620 |
|
$ |
2,456,194 |
|
$ |
19,208,449 |
|
$ |
21,664,643 |
|
|
$ |
693,676 |
|
$ |
1,212,944 |
|
Variance |
|||||||||||||||||||||||||
|
|
|
Past due |
|
|
|
|
|
|
|
Past due 90 days or more |
||||||||||||||
|
|
30-59 |
|
60-89 |
|
90 days |
|
Total |
|
|
|
|
|
|
Non-accrual |
|
Accruing |
||||||||
(In thousands) |
days |
|
days |
|
or more |
|
past due |
|
Current |
|
Loans HIP |
|
|
loans |
|
loans |
|||||||||
Commercial multi-family |
$ |
(2,684) |
|
$ |
(129) |
|
$ |
(895) |
|
$ |
(3,708) |
|
$ |
11,810 |
|
$ |
8,102 |
|
|
$ |
(895) |
|
$ |
- |
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-owner occupied |
|
(17,334) |
|
|
1,489 |
|
|
(21,674) |
|
|
(37,519) |
|
|
(26,290) |
|
|
(63,809) |
|
|
|
(21,674) |
|
|
- |
|
Owner occupied |
|
(1,917) |
|
|
(3,005) |
|
|
(5,452) |
|
|
(10,374) |
|
|
38,994 |
|
|
28,620 |
|
|
|
(5,452) |
|
|
- |
Commercial and industrial |
|
3,414 |
|
|
(5,601) |
|
|
(10,001) |
|
|
(12,188) |
|
|
(50,456) |
|
|
(62,644) |
|
|
|
(9,871) |
|
|
(130) |
|
Construction |
|
(4,895) |
|
|
- |
|
|
(17) |
|
|
(4,912) |
|
|
(34,047) |
|
|
(38,959) |
|
|
|
(17) |
|
|
- |
|
Mortgage |
|
(141,222) |
|
|
28,340 |
|
|
(138,680) |
|
|
(251,562) |
|
|
194,725 |
|
|
(56,837) |
|
|
|
44,283 |
|
|
(182,963)[1] |
|
Leasing |
|
887 |
|
|
(1,023) |
|
|
224 |
|
|
88 |
|
|
44,465 |
|
|
44,553 |
|
|
|
224 |
|
|
- |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit cards |
|
425 |
|
|
(1,686) |
|
|
(1,707) |
|
|
(2,968) |
|
|
(8,636) |
|
|
(11,604) |
|
|
|
- |
|
|
(1,707) |
|
Home equity lines of credit |
|
3 |
|
|
- |
|
|
(10) |
|
|
(7) |
|
|
(128) |
|
|
(135) |
|
|
|
- |
|
|
(10) |
|
Personal |
|
(1,911) |
|
|
528 |
|
|
(2,956) |
|
|
(4,339) |
|
|
(23,699) |
|
|
(28,038) |
|
|
|
(2,956) |
|
|
- |
|
Auto |
|
13,299 |
|
|
2,319 |
|
|
2,282 |
|
|
17,900 |
|
|
68,875 |
|
|
86,775 |
|
|
|
2,282 |
|
|
- |
|
Other |
|
114 |
|
|
(741) |
|
|
704 |
|
|
77 |
|
|
2,536 |
|
|
2,613 |
|
|
|
777 |
|
|
(73) |
Total |
$ |
(151,821) |
|
$ |
20,491 |
|
$ |
(178,182) |
|
$ |
(309,512) |
|
$ |
218,149 |
|
$ |
(91,363) |
|
|
$ |
6,701 |
|
$ |
(184,883) |
|
[1] |
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 include |
||||||||||||||||||||||||
Popular, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Supplement to Fourth Quarter 2020 Earnings Release |
|||||||||||||||||||||||||
Table I - Loan Delinquency - Popular U.S. Operations |
|||||||||||||||||||||||||
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2020 |
|||||||||||||||||||||||||
Popular U.S. |
|||||||||||||||||||||||||
|
|
|
Past due |
|
|
|
|
|
|
|
Past due 90 days or more |
||||||||||||||
|
|
30-59 |
|
60-89 |
|
90 days |
|
Total |
|
|
|
|
|
|
Non-accrual |
|
Accruing |
||||||||
(In thousands) |
days |
|
days |
|
or more |
|
past due |
|
Current |
|
Loans HIP |
|
|
loans |
|
loans |
|||||||||
Commercial multi-family |
$ |
5,273 |
|
$ |
- |
|
$ |
1,894 |
|
$ |
7,167 |
|
$ |
1,736,544 |
|
$ |
1,743,711 |
|
|
$ |
1,894 |
|
$ |
- |
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-owner occupied |
|
924 |
|
|
3,640 |
|
|
669 |
|
|
5,233 |
|
|
1,988,577 |
|
|
1,993,810 |
|
|
|
669 |
|
|
- |
|
Owner occupied |
|
191 |
|
|
650 |
|
|
334 |
|
|
1,175 |
|
|
343,205 |
|
|
344,380 |
|
|
|
334 |
|
|
- |
Commercial and industrial |
|
1,112 |
|
|
65 |
|
|
1,580 |
|
|
2,757 |
|
|
1,534,006 |
|
|
1,536,763 |
|
|
|
1,580 |
|
|
- |
|
Construction |
|
21,312 |
|
|
- |
|
|
7,560 |
|
|
28,872 |
|
|
732,787 |
|
|
761,659 |
|
|
|
7,560 |
|
|
- |
|
Mortgage |
|
33,422 |
|
|
15,464 |
|
|
14,864 |
|
|
63,750 |
|
|
1,056,787 |
|
|
1,120,537 |
|
|
|
14,864 |
|
|
- |
|
Legacy |
|
5 |
|
|
7 |
|
|
1,511 |
|
|
1,523 |
|
|
13,950 |
|
|
15,473 |
|
|
|
1,511 |
|
|
- |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit cards |
|
- |
|
|
- |
|
|
3 |
|
|
3 |
|
|
28 |
|
|
31 |
|
|
|
- |
|
|
3 |
|
Home equity lines of credit |
|
236 |
|
|
342 | |||||||||||||||||||
FAQ
What was Popular, Inc. net income for Q4 2020?
What is the net interest income for Popular, Inc. in Q4 2020?
How did the COVID-19 pandemic affect Popular, Inc.'s financial results?
What strategic actions did Popular Bank take in Q4 2020?
What were the annual operating expense savings expected from the branch realignment?
