Popular, Inc. Announces First Quarter Financial Results

  • Net income of $85.0 million for the first quarter of 2016
  • Stable net interest margin of 4.43%, compared to 4.42%, or 4.39% on an adjusted basis, in Q4 2015
  • Credit Quality (excluding covered loans):
    • Non-performing loans held-in-portfolio (NPLs) decreased by $2.3 million from Q4 2015; NPLs to loans ratio remained flat at 2.7% from Q4 2015;
    • Net charge-offs (NCOs) at 0.76% of average loans held-in-portfolio vs. 1.48% in Q4 2015; NCOs decreased by $40.4 million quarter over quarter;
    • Allowance for loan losses of $508.4 million vs. $502.9 million in Q4 2015; Allowance for loan losses to loans held-in-portfolio at 2.26% vs. 2.25% in Q4 2015;

    • Allowance for loan losses to NPLs at 84.8% vs. 83.6% in Q4 2015.

  • Common Equity Tier 1 ratio of 15.79% and Tangible Book Value per Share of $43.55 at March 31, 2016

SAN JUAN, Puerto Rico--()--Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $85.0 million for the quarter ended March 31, 2016, compared to net income of $137.4 million and an adjusted net income of $98.3 million for the quarter ended December 31, 2015.

Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: “Despite the challenging conditions in Puerto Rico we delivered solid results for the quarter reflecting stability in our key revenue, expense and credit metrics. We are pleased that we have been able to maintain and strengthen our leadership position in Puerto Rico and remain encouraged by the continued growth of our U.S. franchise.”

Earnings Highlights      
 
(Unaudited)   Quarters ended
(Dollars in thousands, except per share information)   31-Mar-16   31-Dec-15   31-Mar-15
Net interest income $352,412 $352,500 $343,195
Provision for loan losses – non-covered loans 47,940 57,711 29,711
Provision (reversal of provision) for loan losses – covered loans [1]   (3,105 )   820     10,324
Net interest income after provision for loan losses 307,577 293,969 303,160

FDIC loss share (expense) income

(3,146 ) (4,359 ) 4,139
Other non-interest income 114,776 136,797 111,096
Operating expenses   301,943     305,808     312,342
Income from continuing operations before income tax 117,264 120,599 106,053
Income tax expense (benefit)   32,265     (16,827 )   32,568
Income from continuing operations 84,999 137,426 73,485
Income from discontinued operations, net of tax   -     -     1,341
Net income   $84,999     $137,426     $74,826
Net income applicable to common stock   $84,068     $136,495     $73,896
Net income per common share from continuing operations - Basic   $0.81     $1.32     $0.71
Net income per common share from continuing operations - Diluted   $0.81     $1.32     $0.71
Net income per common share from discontinued operations - Basic   $-     $-     $0.01
Net income per common share from discontinued operations - Diluted   $-     $-     $0.01
 
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreement.
 

Adjusted results – Non GAAP

The Corporation prepared its Consolidated Financial Statement using accounting principles generally accepted in the U.S. (“U.S. GAAP” or the “reported basis”). In addition to analyzing the Corporation’s results on a reported basis, management monitors the performance of the Corporation on an “adjusted basis” and excludes the impact of certain transactions on the results of its operations. Management believes that the “adjusted basis” provides meaningful information about the underlying performance of the Corporation’s ongoing operations. The “adjusted basis” is a non-GAAP financial measure.

The following tables reflect the results of operations for the first quarter of 2016 compared to the results of the fourth quarter of 2015, with adjustments to exclude the impact of certain events during the fourth quarter of 2015. No adjustments are reflected for the first quarter of 2016 results.

 
    Quarters ended
(Unaudited)  

Adjusted Results
Non-GAAP

 
(In thousands)   31-Mar-16   31-Dec-15   Variance
Net interest income $352,412 $350,548 $1,864
Provision for loan losses – non-covered loans 47,940 46,795 1,145
Provision (reversal) for loan losses – covered loans [1]   (3,105 )   820     (3,925 )
Net interest income after provision for loan losses 307,577 302,933 4,644
Mortgage banking activities 10,551 22,597 (12,046 )
FDIC loss-share expense (3,146 ) (4,359 ) 1,213
Other non-interest income   104,225     113,367     (9,142 )
Total non-interest income   111,630     131,605     (19,975 )
Personnel costs 127,091 119,221 7,870
Net occupancy expenses 20,430 20,616 (186 )
Equipment expenses 14,548 16,035 (1,487 )
Professional fees 75,459 77,854 (2,395 )
Communications 6,320 6,759 (439 )
Business promotion 11,110 15,162 (4,052 )
Other real estate owned (OREO) expenses 9,141 9,997 (856 )
Amortization of intangibles 3,114 3,150 (36 )
Other operating expenses   34,730     36,638     (1,908 )
Total operating expenses   301,943     305,432     (3,489 )
Income before income tax   117,264     129,106     (11,842 )
Income tax expense   32,265     30,802     1,463  
Net income   $84,999     $98,304     $(13,305 )

[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss-sharing agreement.

 
    Quarter ended
(Unaudited) 31-Dec-15
(In thousands)   Actual Results (U.S. GAAP)   BPNA Reorganization [2]   Doral Transaction Remeasurement [3]   Bulk Loan Sale [4]   Impairment of Loans Under Proposed Portfolio Sale [5]   Reversal of DTA - U.S. Operations [6]     Adjusted Results (Non-GAAP)
Net interest income $352,500   $-   $1,952   $-   $-   $-   $350,548
Provision for loan losses – non-covered loans 57,711 - - 5,852 5,064 - 46,795
Provision for loan losses – covered loans [1]   820     -     -     -     -     -     820  
Net interest income after provision for loan losses 293,969 - 1,952 (5,852 ) (5,064 ) - 302,933
Mortgage banking activities 23,430 - 833 - - - 22,597
FDIC loss-share expense (4,359 ) - - - - - (4,359 )
Other non-interest income   113,367     -     -     -     -     -     113,367  
Total non-interest income   132,438     -     833     -     -     -     131,605  
Personnel costs 119,221 - - - - - 119,221
Net occupancy expenses 20,616 - - - - - 20,616
Equipment expenses 16,035 - - - - - 16,035
Professional fees 77,854 - - - - - 77,854
Communications 6,759 - - - - - 6,759
Business promotion 15,162 - - - - - 15,162
Other real estate owned (OREO) expenses 9,997 - - - - - 9,997
Amortization of intangibles 2,522 - (628 ) - - - 3,150
Restructuring costs 1,004 1,004 - - - - -
Other operating expenses   36,638     -     -     -     -    

-

    36,638  
Total operating expenses   305,808     1,004     (628 )   -     -     -     305,432  
Income before income tax 120,599 (1,004 ) 3,413 (5,852 ) (5,064 ) - 129,106
Income tax (benefit) expense   (16,827 )   -     731     (2,282 )   (1,975 )   (44,103 )   30,802  
Net income   $137,426     $(1,004 )   $2,682     $(3,570 )   $(3,089 )   $44,103     $98,304  

[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement.

[2] Represents restructuring charges associated with the reorganization of BPNA.

[3] Represents the impact of the fair value adjustments, identified during the remeasurement period as defined by U.S. GAAP, related to the Doral Bank transaction. The remeasurement adjustments impacted the fair value of the loan portfolio, deposit premium and the core deposit intangible, all of which were recorded against goodwill. During the fourth quarter of 2015, the related amortization of the loan discounts, deposit premium and the core deposit intangible were adjusted to reflect the balance as if the revised estimates of fair value were applied as of the Doral Bank transaction date.

[4] Represents the impact of a bulk sale of loans at the BPPR segment, which had a book value of approximately $34.4 million.

[5] Represents additional impairment based on the estimated fair value of loans in the Westernbank transaction, that the Corporation has the intent to sell and are subject to the ongoing arbitration with the FDIC.

[6] Represents the partial reversal of the valuation allowance of a portion of the deferred tax asset at the U.S. operations.

Net interest income

For the quarter ended March 31, 2016, the Corporation had net interest income of $352.4 million, compared to net interest income of $352.5 million, or $350.6 million on an adjusted basis, for the previous quarter. The net interest margin was 4.43% for the quarter, compared to 4.42%, or 4.39% on an adjusted basis for the previous quarter. Refer to the Adjusted Results – Non-GAAP section for additional information on the adjusted net interest income for the quarter ended December 31, 2015. The impact of having one less day in the quarter ended March 31, 2016 compared to the previous quarter lowered net interest income by approximately $2.5 million.

The increase of $1.8 million in the adjusted net interest income is mainly related to:

  • Higher income from investment securities by $3.9 million, or 12 basis points, due mainly to higher volumes of mortgage backed securities, partially offset by lower volume of money market investments and trading securities, as part of the Corporation’s investment strategy.
  • Higher income from commercial loans by $3.2 million, or 20 basis points, mainly due to higher yields at BPPR due to the impact of the change in the prime rate for variable rate loans and higher loan prepayment fees coupled with U.S. commercial and consumer loans portfolio growth. The impact in the interest income from commercial loans of one less day in the quarter is approximately $1.2 million.

These positive variances in net interest income were offset in part by:

  • Lower income from Westernbank loans (“WB loans”) by $3.0 million, or 6 basis points, due mainly to lower balances as the portfolio continues its expected run-off.
  • Higher interest expense on deposits by $1.5 million, or 3 basis points, principally due to higher balances and cost of time deposits mainly in the U.S. to fund loan growth and the re-pricing of individual retirement accounts at BPPR, partially offset by a lower volume of brokered CDs.

BPPR’s net interest income amounted to $305.4 million for the quarter ended March 31, 2016, compared to $305.1 million for the previous quarter. The adjusted net interest income for the previous quarter was $304.3 million. The increase of $1.1 million in the adjusted net interest income was mainly due to higher income on investment securities and higher yield on commercial loans, partially offset by lower income from covered loans and higher cost of deposits, as discussed above. The impact of having one less day in the quarter in P.R. is a lower net interest income of approximately $2 million. Net interest margin increased to 4.87% from 4.82% in the previous quarter, or 4.80% on an adjusted basis, mainly driven by higher yields on commercial loans as explained above. Earning assets in P.R. yielded 5.27% up from 5.20% in the last quarter of 2015 while the cost of interest bearing liabilities was relatively flat at 0.57% compared to 0.56% in the previous quarter.

BPNA’s net interest income was $62.3 million, compared to $62.9 million for the previous quarter. The adjusted net interest income for the previous quarter was $61.7 million. The increase of $0.6 million in the adjusted net interest income is mainly driven by higher volume from the commercial and consumer loan portfolios, partially offset by higher interest expense on deposits, as discussed above. Net interest margin was 3.70% compared to 3.86% for the previous quarter. The adjusted net interest margin for the previous quarter was 3.79%. The decrease of 9 basis points is related to a lower yield on construction loans and higher cost of deposits. U.S. earning assets yielded 4.36%, flat when compared to the previous quarter, while interest bearing liabilities increased by 8 basis points to 0.85%.

Non-interest income

Non-interest income was $111.6 million for the first quarter of 2016, a decrease of $20.8 million when compared with the fourth quarter of 2015. Excluding the impact of the transaction detailed in the Adjusted Results Non-GAAP tables above, non-interest income decreased by $20.0 million when compared to the fourth quarter of 2015, driven primarily by the following:

  • Lower other service fees by $13.5 million mainly due to lower insurance fees by $11.0 million as a result of annual contingent insurance commission revenues recorded during fourth quarter of 2015, including approximately $3.7 million from the portfolio acquired from the Doral insurance agency. Refer to Table F for a breakdown of other service fees.
  • Lower income from mortgage banking activities by $12.0 million due to higher unfavorable fair value adjustments on mortgage servicing rights by $6.4 million, lower net gain on sale of loans by $4.1 million mostly due to lower volume from mortgage securitization transactions, and higher trading account loss by $2.6 million from higher realized losses on closed derivative positions.

These decreases were partially offset by:

  • Favorable variance in adjustments to indemnity reserves by $4.5 million mostly due to lower provision for loans previously sold with credit recourse due to lower estimated losses and a lower portfolio balance.
  • Lower FDIC loss share expense by $1.2 million mainly due to lower recoveries on assets to be shared with the FDIC under the recovery period by $5.9 million, offset by an unfavorable change in the fair value of the true-up payment obligation.

Refer to Table B for further details.

   
Financial Impact of the 2010 FDIC-Assisted Transaction
 
(Unaudited)   Quarters ended
(In thousands)   31-Mar-16   31-Dec-15   31-Mar-15
 

Income Statement

Interest income on WB loans $44,904 $47,870 $57,431

Total FDIC loss-share (expense) income

(3,146 ) (4,359 ) 4,139
Provision (reversal) for loan losses- WB loans   (356 )   7,817     10,324
Total revenues less provision (reversal) for loan losses   $42,114     $35,694     $51,246
 

Balance Sheet

WB loans $2,071,191 $2,113,440 $2,520,535
FDIC loss-share asset 219,448 310,221 409,844
FDIC true-up payment obligation   120,188     119,745     125,140
 

See additional details on accounting for the 2010 FDIC-Assisted transaction in Table O.

Operating expenses

Operating expenses amounted to $301.9 million for the first quarter of 2016, a decline of $3.9 million when compared with the fourth quarter of 2015. Excluding the impact of the transactions detailed in the Adjusted Results Non-GAAP tables above, operating expenses decreased by $3.5 million compared to the fourth quarter of 2015, driven primarily by:

  • Lower business promotion expenses by $4.1 million mainly at BPPR due to lower seasonal advertising expense and lower credit card rewards program expenses.
  • Lower other operating expenses by $3.8 million mainly due to lower sundry losses from mortgage servicing activities at BPPR.
  • Lower professional fees expense by $2.4 million mainly at BPPR due to lower legal, application processing, hosting and other technology related services expenses.
  • Lower equipment expense by $1.5 million mainly due to lower software and maintenance expenses at BPPR.

These decreases were partially offset by:

  • Higher personnel cost by $7.9 million mainly due to the grant of employee restricted stock and performance shares awards during the quarter, higher unemployment and social security tax, higher medical plan expense and higher pension cost due to changes in actuarial assumptions.

Non-personnel credit-related costs, which include collections, appraisals, credit related fees, and OREO expenses, amounted to $13.6 million for the first quarter of 2016, compared with $14.4 million for the fourth quarter of 2015. The decrease was principally due to lower mortgage OREO write-downs at BPPR.

Full-time equivalent employees were 7,812 as of March 31, 2016, compared with 7,810 as of December 31, 2015.

For a breakdown of operating expenses by category refer to table B.

Income taxes

For the quarter ended March 31, 2016, the Corporation recorded an income tax expense of $32.3 million, compared to a benefit of $16.8 million for the previous quarter. During the fourth quarter of 2015, the Corporation recorded a partial reversal of the valuation allowance on its deferred tax assets from the U.S. operations for approximately $44.1 million. On an adjusted basis, the income tax expense for the fourth quarter of 2015 was $30.8 million.

The effective income tax rate for the first quarter of 2016 was 28%, compared to 24% on an adjusted basis, for the previous quarter. The effective tax rate is impacted by the composition and source of the taxable income. For the first quarter 2016, after taking effect for the partial deferred tax asset valuation reversal recorded in 2015, the effective tax rate for the U.S. operations was approximately 47%.

Credit Quality

The Corporation continued to exhibit a stable credit performance despite a challenging operating environment in Puerto Rico. The Corporation continues to be attentive to changes in credit quality trends and is focused on taking measures to minimize risks. The U.S. operation continued to reflect strong credit quality with low level of charge-offs and non-performing loans.

  • Inflows of NPLs held-in-portfolio, excluding consumer loans, increased by $8.9 million quarter over quarter, mainly driven by a $10.5 million commercial borrower in the BPNA segment. In the BPPR segment, inflows decreased by $2.5 million driven by lower mortgage inflows of $6.5 million, offset by an increase of $3.9 million in the commercial NPL inflows.
  • Non-performing loans held-in-portfolio decreased by $2.3 million from the fourth quarter of 2015, mainly driven by lower mortgage NPLs of $16.6 million, offset by higher commercial NPLs of $15.8 million. Mortgage NPLs decrease was mostly driven by improvements in the BPPR mortgage portfolio due to the improved collections efforts. This decrease was offset in part by an increase in commercial NPLs mainly driven by the abovementioned $10.5 million relationship at BPNA. At March 31, 2016, NPLs to total loans held-in-portfolio remained flat at 2.7% from December 31, 2015.
  • Net charge-offs decreased by $40.4 million during the first quarter of 2016, as the prior quarter included $31.1 million in charge-offs related to commercial relationships that had been reserved in prior quarters. Excluding this impact, the $9.3 million reduction was mostly related to lower impairment on the Westernbank loans. The ratio of net charge-offs to average non-covered loans held-in-portfolio decreased to 0.76% on an annualized basis from 1.48% in the fourth quarter of 2015. Excluding the effect of commercial relationships reserved in prior quarters, the net charge-off ratio decreased to 0.76% from 0.93% in the prior quarter driven by lower commercial losses in the BPPR segment. Refer to Table J for further information on net charge-offs and related ratios.
  • The allowance for loan losses increased by $5.5 million from the fourth quarter 2015 to $508.4 million. The general and specific reserves related to non-covered loans totaled $384.4 million and $124.0 million, respectively, at quarter-end, compared with $384.8 million and $118.1 million, respectively, as of December 31, 2015. The ratio of the allowance for loan losses to loans held-in-portfolio was 2.26% in the first quarter of 2016, compared to 2.25% from the previous quarter.
  • The ratio of the allowance for loan losses to NPLs held-in-portfolio stood at 84.8%, compared to 83.6% in the previous quarter.
  • The provision for loan losses for the first quarter of 2016 amounted to $47.9 million, decreasing by $9.8 million from the previous quarter. The provision for the fourth quarter of 2015 included $5.8 million provision impact related to the bulk sale of commercial loans and a $5.1 million impairment on the Westernbank loans that the Corporation has the intent to sell. Compared to an adjusted provision of $46.8 million in the fourth quarter of 2015, the provision for the first quarter remained stable, increasing slightly by $1.1 million. The provision to net charge-offs ratio was 112.9% compared to 69.6% in the fourth quarter of 2015. The fourth quarter included the previously mentioned $31.1 million in charge-offs of previously reserved commercial loans. Excluding this impact from the total net charge-offs base, the provision for the fourth quarter represented 90.3% of net charge-offs.

     
Non-Performing Assets
 
(Unaudited)            
(In thousands)   31-Mar-16   31-Dec-15   31-Mar-15
Total non-performing loans held-in-portfolio, excluding covered loans $599,526 $601,799 $664,953
Non-performing loans held-for-sale 42,743 45,169 8,404
Other real estate owned (“OREO”), excluding covered OREO   165,960     155,231     128,170  
Total non-performing assets, excluding covered assets 808,229 802,199 801,527
Covered loans and OREO   39,916     40,571     133,211  
Total non-performing assets   $848,145     $842,770     $934,738  
Net charge-offs for the quarter (excluding covered loans)   $42,448     $82,870     $35,886  
 
 
Ratios (excluding covered loans):            
Non-covered loans held-in-portfolio $22,507,737 $22,346,115 $21,012,930
Non-performing loans held-in-portfolio to loans held-in-portfolio 2.66 % 2.69 % 3.16 %
Allowance for loan losses to loans held-in-portfolio 2.26 2.25 2.46
Allowance for loan losses to non-performing loans, excluding loans held-for-sale   84.80     83.57     77.63  
 
Refer to Table H for additional information.
 
     
Provision for Loan Losses
 
(Unaudited)   Quarters ended
(In thousands)   31-Mar-16   31-Dec-15   31-Mar-15
Provision (reversal) for loan losses:
BPPR $43,871 $55,635 $31,913
BPNA   4,069     2,076   (2,202 )
Total provision for loan losses- non-covered loans   $47,940     $57,711   $29,711  
Provision (reversal) for loan losses - covered loans   (3,105 )   820   10,324  
Total provision for loan losses   $44,835     $58,531   $40,035  
 

     
Credit Quality by Segment
 
(Unaudited)
(In thousands)   Quarters ended
BPPR   31-Mar-16   31-Dec-15   31-Mar-15
Provision for loan losses $43,871 $55,635 $31,913
Net charge-offs 40,647 82,011 36,772
Total non-performing loans held-in-portfolio, excluding covered loans 561,612 574,834 638,017
Allowance / non-covered loans held-in-portfolio   2.70 %   2.67 %   2.92 %
 
    Quarters ended
BPNA   31-Mar-16   31-Dec-15   31-Mar-15
Provision (reversal) for loan losses $4,069 $2,076 $(2,202 )
Net charge-offs (recoveries) 1,801 859 (886 )
Total non-performing loans held-in-portfolio 37,914 26,965 26,936
Allowance / non-covered loans held-in-portfolio   0.71 %   0.69 %   0.72 %
 
     
Financial Condition Highlights
 
(Unaudited)    
(In thousands)   31-Mar-16   31-Dec-15   31-Mar-15
Money market, trading and investment securities $8,901,814 $8,587,894 $8,254,845
Loans not covered under loss-sharing agreements with the FDIC 22,507,737 22,346,115 21,012,930
Loans covered under loss-sharing agreements with the FDIC 625,130 646,115 2,456,552
Total assets 36,147,009 35,761,733 35,615,447
Deposits 27,526,593 27,209,723 27,273,689
Borrowings 2,349,992 2,425,853 2,881,763
Liabilities from discontinued operations 1,815 1,815 1,930
Total liabilities 30,896,709 30,656,409 31,238,327
Stockholders’ equity   5,250,300   5,105,324   4,377,120
 

Total assets increased by $385.3 million from the fourth quarter of 2015 driven by:

  • An increase of $313.9 million in money market, trading and investment securities mainly at BPPR by $362.7 million mostly due to purchases of mortgage-backed agency pools and U.S. Treasury securities, partially offset by a decrease at BPNA of $48.9 million mainly due to lower balances with the Federal Reserve Bank; and
  • An increase of $161.6 million in non-covered loans held in portfolio mainly at BPNA by $206.8 million, driven by growth in the commercial and consumer loan portfolios, which includes consumer loan portfolio purchases of $85.7 million, partially offset by a decrease of $45.2 million at BPPR mainly due to lower originations of credit cards and residential mortgages.

These increases were partially offset by:

  • A decrease of approximately $90.8 million in the FDIC Loss Share Asset mainly due to collections from the FDIC of $88.6 million.

Total liabilities increased by $240.3 million from the fourth quarter of 2015, driven by:

  • An increase of $316.9 million in deposits mainly at BPPR by $189.1 million largely due to increases in government deposit accounts and at BPNA by $127.8 million mainly from money market accounts and time deposits growth. Refer to Table G for additional information on deposits.

This increase was partially offset by:

  • A decrease of $79.0 million in notes payable mainly due to maturities of advances from the Federal Home Loan Bank (“FHLB”).

Stockholders’ equity increased by approximately $145.0 million from the fourth quarter of 2015, mainly as a result of net income for the quarter of $85.0 million, a favorable variance of $73.4 million in unrealized gains on securities available-for-sale, partially offset by payments of dividends of $15.5 million on common stock of $0.15 per share and $0.9 million in dividends on preferred stock.

Common equity tier-1 ratio ("CET1") and tangible book value per share were 15.79% and $43.55, respectively, at March 31, 2016 compared to 16.21% and $42.18 at December 31, 2015. The major drivers of the decrease of 42 basis points in the CET1 ratio were the anticipated phase-in provisions of Basel III, including the complete phase out of the trust preferred securities from Tier 1 capital and additional exclusion of DTA balances from CET1, that were effective on January 1, 2016. Refer to Table A for capital ratios.

Forward-Looking Statements

The information contained in this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that may cause the Corporation's actual results to differ materially from any future results expressed or implied by such forward-looking statements. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2015 and our other filings with the SEC for a discussion of those factors that could impact our future results. Other than to the extent required by applicable law, the Corporation undertakes no obligation to publicly update or revise any forward-looking statement to reflect 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. Popular provides retail, mortgage and commercial banking services through its principal banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. In the United States, Popular has established a community-banking franchise providing a broad range of financial services and products with branches in New York, New Jersey and Florida under the name of Popular Community Bank.

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 25, 2016 at 11:00 a.m. Eastern Daylight 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 Wednesday, May 25, 2016. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10083310.

 
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
 
Table A - Selected Ratios and Other Information
 
Table B - Consolidated Statement of Operations
 
Table C - Consolidated Statement of Financial Condition
 
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER
 
Table E - Intentionally Left Blank (Consolidated Average Balances and Yield / Rate Analysis - YTD)
 
Table F - Mortgage Banking Activities & Other Service Fees
 
Table G - Loans and Deposits
 
Table H - Non-Performing Assets
 
Table I - Activity in Non-Performing Loans
 
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios
 
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED
 
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS
 
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS
 
Table N - Reconciliation to GAAP Financial Measures
 
Table O - Financial Information - Westernbank Covered Loans
 

 
POPULAR, INC.
Financial Supplement to First Quarter 2016 Earnings Release
Table A - Selected Ratios and Other Information
(Unaudited)
     
     
Quarters ended
    31-Mar-16   31-Dec-15   31-Mar-15
Basic EPS from continuing operations $0.81 $1.32 $0.71
Basic EPS from discontinued operations $- $- $0.01
Total Basic EPS $0.81 $1.32 $0.72
Diluted EPS from continuing operations $0.81 $1.32 $0.71
Diluted EPS from discontinued operations $- $- $0.01
Total Diluted EPS $0.81 $1.32 $0.72
Average common shares outstanding 103,188,815 103,098,249 102,939,928
Average common shares outstanding - assuming dilution 103,269,813 103,259,503 103,136,309
Common shares outstanding at end of period 103,670,005 103,618,976 103,486,927
 
Market value per common share $28.61 $28.34 $34.39
 
Market capitalization - (In millions) $2,966 $2,937 $3,559
 
Return on average assets 0.95% 1.53% 0.90%
. .
Return on average common equity 6.58% 10.77% 7.02%
 
Net interest margin [1] 4.43% 4.39% 4.57%
 
Common equity per share $50.16 $48.79 $41.81
 
Tangible common book value per common share (non-GAAP) $43.55 $42.18 $36.33
 
Tangible common equity to tangible assets (non-GAAP) 12.73% 12.46% 10.73%
 
Tier 1 capital

15.79%

16.21% 16.11%
 
Total capital

18.78%

18.78% 18.71%
 
Tier 1 leverage

11.46%

11.82% 11.80%
 

Common Equity Tier 1 capital

 

15.79%

  16.21%   15.74%

[1] Not on a taxable equivalent basis. For the quarter ended December 31, 2015 excludes the impact of $1.9 million of Doral fair value remeasurement adjustment. U.S. GAAP net interest margin was 4.42% for the quarter ended December 31, 2015. Refer to Table D for reconciliation.

 
POPULAR, INC.
Financial Supplement to First Quarter 2016 Earnings Release
Table B - Consolidated Statement of Operations
(Unaudited)
  Quarters ended   Variance   Quarter ended   Variance
(In thousands, except per share information)   31-Mar-16   31-Dec-15  

Q1 2016
vs. Q4 2015

  31-Mar-15  

Q1 2016
vs. Q1 2015

Interest income:  
Loans $363,197 $364,484 $(1,287 ) $355,631 $7,566
Money market investments 2,863 1,949 914 1,446 1,417
Investment securities 36,271 32,795 3,476 30,301 5,970
Trading account securities   1,689     2,129     (440 )   2,696     (1,007 )
Total interest income   404,020     401,357     2,663     390,074     13,946  
Interest expense:
Deposits 29,874 27,054 2,820 25,864 4,010
Short-term borrowings 1,861 1,693 168 1,734 127
Long-term debt   19,873     20,110     (237 )   19,281     592  
Total interest expense   51,608     48,857     2,751     46,879     4,729  
Net interest income 352,412 352,500 (88 ) 343,195 9,217
Provision for loan losses - non-covered loans 47,940 57,711 (9,771 ) 29,711 18,229
Provision (reversal) for loan losses - covered loans   (3,105 )   820     (3,925 )   10,324     (13,429 )
Net interest income after provision for loan losses   307,577     293,969     13,608     303,160     4,417  
Service charges on deposit accounts 39,862 39,993 (131 ) 39,017 845
Other service fees 53,382 66,928 (13,546 ) 53,626 (244 )
Mortgage banking activities 10,551 23,430 (12,879 ) 12,852 (2,301 )
Trading account (loss) profit (162 ) (1,631 ) 1,469 414 (576 )
Net loss on sale of loans, including valuation adjustments on loans held-for-sale (304 ) (60 ) (244 ) (79 ) (225 )
Adjustments (expense) to indemnity reserves on loans sold (4,098 ) (8,647 ) 4,549 (4,526 ) 428
FDIC loss-share (expense) income (3,146 ) (4,359 ) 1,213 4,139 (7,285 )
Other operating income   15,545     16,784     (1,239 )   9,792     5,753  
Total non-interest income   111,630     132,438     (20,808 )   115,235     (3,605 )
Operating expenses:
Personnel costs
Salaries 77,298 77,578 (280 ) 72,394 4,904
Commissions, incentives and other bonuses 20,769 18,015 2,754 18,458 2,311
Pension, postretirement and medical insurance 13,111 10,393 2,718 12,013 1,098
Other personnel costs, including payroll taxes   15,913     13,235     2,678     13,593     2,320  
Total personnel costs 127,091 119,221 7,870 116,458 10,633
Net occupancy expenses 20,430 20,616 (186 ) 21,709 (1,279 )
Equipment expenses 14,548 16,035 (1,487 ) 13,411 1,137
Other taxes 10,195 10,159 36 8,574 1,621
Professional fees 75,459 77,854 (2,395 ) 75,528 (69 )
Communications 6,320 6,759 (439 ) 6,176 144
Business promotion 11,110 15,162 (4,052 ) 10,813 297
FDIC deposit insurance 7,370 5,386 1,984 6,398 972
Other real estate owned (OREO) expenses 9,141 9,997 (856 ) 23,069 (13,928 )
Credit and debit card processing, volume, interchange and other expenses 5,722 5,822 (100 ) 4,821 901
Other operating expenses 11,443 15,271 (3,828 ) 12,528 (1,085 )
Amortization of intangibles 3,114 2,522 592 2,104 1,010
Restructuring costs   -     1,004     (1,004 )   10,753     (10,753 )
Total operating expenses   301,943     305,808     (3,865 )   312,342     (10,399 )
Income from continuing operations before income tax 117,264 120,599 (3,335 ) 106,053 11,211
Income tax expense (benefit)   32,265     (16,827 )   49,092     32,568     (303 )
Income from continuing operations 84,999 137,426 (52,427 ) 73,485 11,514
Income from discontinued operations, net of tax   -     -     -     1,341     (1,341 )
Net income   $84,999     $137,426     $(52,427 )   $74,826     $10,173  
Net income applicable to common stock   $84,068     $136,495     $(52,427 )   $73,896     $10,172  
Net income per common share - basic:
Net income from continuing operations $0.81 $1.32 $(0.51 ) $0.71 $0.10
Net income from discontinued operations   -     -     -     0.01     (0.01 )
Net income per common share - basic   $0.81     $1.32     $(0.51 )   $0.72     $0.09  
Net income per common share - diluted:
Net income from continuing operations $0.81 $1.32 $(0.51 ) $0.71 $0.10
Net income from discontinued operations   -     -     -     0.01     (0.01 )
Net income per common share - diluted   $0.81     $1.32     $(0.51 )   $0.72     $0.09  
Dividends Declared per Common Share   $0.15     $0.15     $-     $-     $0.15  
 

 
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table C - Consolidated Statement of Financial Condition
(Unaudited)
        Variance
Q1 2016 vs.
(In thousands)   31-Mar-16   31-Dec-15   31-Mar-15   Q4 2015
Assets:
Cash and due from banks $409,623 $363,674 $495,776 $45,949
Money market investments 1,917,460 2,180,092 2,307,215 (262,632 )
Trading account securities, at fair value 71,284 71,659 134,294 (375 )
Investment securities available-for-sale, at fair value 6,649,830 6,062,992 5,548,703 586,838
Investment securities held-to-maturity, at amortized cost 99,216 100,903 101,595 (1,687 )
Other investment securities, at lower of cost or realizable value 164,024 172,248 163,038 (8,224 )
Loans held-for-sale, at lower of cost or fair value 125,315 137,000 160,602 (11,685 )
Loans held-in-portfolio:
Loans not covered under loss-sharing agreements with the FDIC 22,618,488 22,453,813 21,110,147 164,675
Loans covered under loss-sharing agreements with the FDIC 625,130 646,115 2,456,552 (20,985 )
Less: Unearned income 110,751 107,698 97,217 3,053
Allowance for loan losses   538,472     537,111     588,697     1,361  
Total loans held-in-portfolio, net   22,594,395     22,455,119     22,880,785     139,276  
FDIC loss-share asset 219,448 310,221 409,844 (90,773 )
Premises and equipment, net 527,493 502,611 492,291 24,882
Other real estate not covered under loss-sharing agreements with the FDIC 165,960 155,231 128,170 10,729
Other real estate covered under loss-sharing agreements with the FDIC 36,397 36,685 113,557 (288 )
Accrued income receivable 120,308 124,234 129,639 (3,926 )
Mortgage servicing assets, at fair value 205,051 211,405 149,024 (6,354 )
Other assets 2,156,030 2,193,162 1,834,031 (37,132 )
Goodwill 631,095 626,388 507,820 4,707
Other intangible assets   54,080     58,109     59,063     (4,029 )
Total assets   $36,147,009     $35,761,733     $35,615,447     $385,276  
Liabilities and Stockholders’ Equity:
Liabilities:
Deposits:
Non-interest bearing $6,384,093 $6,401,515 $6,285,202 $(17,422 )
Interest bearing   21,142,500     20,808,208     20,988,487     334,292  
Total deposits   27,526,593     27,209,723     27,273,689     316,870  
Federal funds purchased and assets sold under agreements to repurchase 760,154 762,145 1,132,643 (1,991 )
Other short-term borrowings 6,370 1,200 1,200 5,170
Notes payable 1,583,468 1,662,508 1,747,920 (79,040 )
Other liabilities 1,018,309 1,019,018 1,080,945 (709 )
Liabilities from discontinued operations   1,815     1,815     1,930     -  
Total liabilities   30,896,709     30,656,409     31,238,327     240,300  
Stockholders’ equity:
Preferred stock 50,160 50,160 50,160 -
Common stock 1,039 1,038 1,037 1
Surplus 4,231,233 4,229,156 4,197,932 2,077
Retained earnings 1,156,476 1,087,957 327,613 68,519
Treasury stock (6,858 ) (6,101 ) (5,222 ) (757 )
Accumulated other comprehensive loss   (181,750 )   (256,886 )   (194,400 )   75,136  
Total stockholders’ equity   5,250,300     5,105,324     4,377,120     144,976  
Total liabilities and stockholders’ equity   $36,147,009     $35,761,733     $35,615,447     $385,276  
 

 
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER
(Unaudited)
                                   
Quarter ended Quarter ended Quarter ended Variance Variance
31-Mar-16 31-Dec-15 31-Mar-15 Q1 2016 vs. Q4 2015 Q1 2016 vs. Q1 2015
($ 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 $8,951     $40.8   1.83 % $8,602     $36.9   1.71 % $7,767     $34.4   1.78 % $349     $3.9     0.12

%

 

$1,184     $6.4     0.05

%

 

Loans not covered under loss-sharing agreements with the FDIC:
Commercial 8,957 110.6 4.97 8,936 107.4 4.77 8,383 100.9 4.88 21 3.2 0.20 574 9.7 0.09
Construction 704 9.3 5.30 662 9.8 5.88 435 6.1 5.67 42 (0.5 ) (0.58 ) 269 3.2 (0.37 )
Mortgage 6,830 89.7 5.25 6,947 90.6 5.22 6,733 85.9 5.10 (117 ) (0.9 ) 0.03 97 3.8 0.15
Consumer 3,807 98.0 10.35 3,819 97.6 10.13 3,845 95.4 10.07 (12 ) 0.4 0.22 (38 ) 2.6 0.28
Lease financing 630     10.7   6.78 611     10.6   6.97 569     10.0   7.01 19     0.1     (0.19 ) 61     0.7     (0.23 )
Total loans (excluding WB loans) 20,928 318.3 6.11 20,975 316.0 5.99 19,965 298.3 6.03 (47 ) 2.3 0.12 963 20.0 0.08
WB loans 2,058     44.9   8.76 2,156     47.9   8.82 2,540     57.4   9.14 (98 )   (3.0 )   (0.06 ) (482 )   (12.5 )   (0.38 )
Total loans 22,986     363.2   6.34 23,131     363.9   6.26 22,505     355.7   6.38 (145 )   (0.7 )   0.08   481     7.5     (0.04 )
Total interest earning assets 31,937     $404.0   5.08 % 31,733     $400.8   5.02 % 30,272     $390.1   5.20 % 204     $3.2     0.06

%

 

1,665     $13.9     (0.12 ) %
Allowance for loan losses (536 ) (573 ) (609 ) 37 73
Other non-interest earning assets 4,491   4,416   4,143   75   348  
Total average assets $35,892   $35,576   $33,806   $316   $2,086  
 
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market $5,712 $5.6 0.39 % $5,547 $5.1 0.36 % $4,983 $4.2 0.34 % $165 $0.5 0.03

%

 

$729 $1.4 0.05

%

 

Savings 7,275 4.3 0.23 7,119 4.1 0.23 6,892 3.9 0.23 156 0.2 - 383 0.4 -
Time deposits 8,058     20.0   1.00 8,192     19.2   0.93 7,747     17.8   0.93 (134 )   0.8     0.07   311     2.2     0.07  
Total interest bearing deposits 21,045 29.9 0.57 20,858 28.4 0.54 19,622 25.9 0.53 187 1.5 0.03 1,423 4.0 0.04
Borrowings 2,441     21.7   3.58 2,439     21.8   3.57 2,877     21.0   2.93 2     (0.1 )   0.01   (436 )   0.7     0.65  
Total interest bearing liabilities 23,486     51.6   0.88 23,297     50.2   0.86 22,499     46.9   0.84 189     1.4     0.02   987     4.7     0.04  
Net interest spread 4.20 % 4.16 % 4.36 % 0.04

%

 

(0.16 ) %
Non-interest bearing deposits 6,293 6,246 5,963 47 330
Other liabilities 920 953 1,021 (33 ) (101 )
Liabilities from discontinued operations 2 2 3 - (1 )
Stockholders' equity 5,191   5,078   4,320   113   871  
Total average liabilities and stockholders' equity $35,892   $35,576   $33,806   $316   $2,086  
 
Adjusted net interest income / margin non-taxable equivalent basis $352.4   4.43 % $350.6   4.39 % $343.2   4.57 % $1.8     0.04

%

 

$9.2     (0.14 ) %
Doral fair value remeasurement adjustment - 1.9 - (1.9 ) -
Net interest income / margin non-taxable equivalent basis $352.4   4.43 % $352.5   4.42 % $343.2   4.57 % ($0.1 )   0.01

%

 

$9.2     (0.14 ) %
 

Popular, Inc.
Financial Supplement to First Quarter 2016 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 2016 Earnings Release
Table F - Mortgage Banking Activities and Other Service Fees
(Unaudited)
 
Mortgage Banking Activities Variance
Quarters ended Q1 2016 vs. Q1 2016 vs.
(In thousands)     31-Mar-16   31-Dec-15   31-Mar-15   Q4 2015   Q1 2015
Mortgage servicing fees, net of fair value adjustments:
Mortgage servicing fees $14,802 $15,504 $12,248 $(702 ) $2,554
Mortgage servicing rights fair value adjustments     (8,477 )   (2,096 )   (4,929 )   (6,381 )   (3,548 )
Total mortgage servicing fees, net of fair value adjustments     6,325     13,408     7,319     (7,083 )   (994 )
Net gain on sale of loans, including valuation on loans held-for-sale     7,110     10,337     7,280     (3,227 )   (170 )
Trading account loss:
Unrealized (losses) gains on outstanding derivative positions (80 ) 27 17 (107 ) (97 )
Realized losses on closed derivative positions     (2,804 )   (342 )   (1,764 )   (2,462 )   (1,040 )
Total trading account loss     (2,884 )   (315 )   (1,747 )   (2,569 )   (1,137 )
Total mortgage banking activities     $10,551     $23,430     $12,852     $(12,879 )   $(2,301 )
 
         
Other Service Fees Variance
Quarters ended Q1 2016 vs. Q1 2016 vs.
(In thousands)   31-Mar-16   31-Dec-15   31-Mar-15   Q4 2015   Q1 2015
Other service fees:
Debit card fees $11,287 $11,768 $11,125 $(481 ) $162
Insurance fees 12,850 23,813 12,041 (10,963 ) 809
Credit card fees 16,858 17,528 16,149 (670 ) 709
Sale and administration of investment products 4,839 5,578 5,930 (739 ) (1,091 )
Trust fees 4,235 4,947 4,602 (712 ) (367 )
Other fees   3,313   3,294   3,779   19     (466 )
Total other service fees   $53,382   $66,928   $53,626   $(13,546 )   $(244 )
 

         
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table G - Loans and Deposits
(Unaudited)
 
Loans - Ending Balances
Variance
(In thousands)   31-Mar-16   31-Dec-15   31-Mar-15  

Q1 2016 vs.
Q4 2015

 

Q1 2016 vs.
Q1 2015

Loans not covered under FDIC loss-sharing agreements:
Commercial $10,228,389 $10,099,163 $8,653,561 $129,226 $1,574,828
Construction 734,858 681,106 690,728 53,752 44,130
Legacy [1] 61,044 64,436 77,675 (3,392 ) (16,631 )
Lease financing 643,142 627,650 581,119 15,492 62,023
Mortgage 6,979,201 7,036,081 7,189,227 (56,880 ) (210,026 )
Consumer   3,861,103   3,837,679   3,820,620   23,424     40,483  
Total non-covered loans held-in-portfolio $22,507,737 $22,346,115 $21,012,930 $161,622 $1,494,807
Loans covered under FDIC loss-sharing agreements   625,130   646,115   2,456,552   (20,985 )   (1,831,422 )
Total loans held-in-portfolio   $23,132,867   $22,992,230   $23,469,482   $140,637     $(336,615 )
Loans held-for-sale:
Commercial $42,771 $45,074 $8,240 $(2,303 ) $34,531
Construction 2 95 - (93 ) 2
Mortgage   82,542   91,831   152,362   (9,289 )   (69,820 )
Total loans held-for-sale   $125,315   $137,000   $160,602   $(11,685 )   $(35,287 )
Total loans   $23,258,182   $23,129,230   $23,630,084   $128,952     $(371,902 )

[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-16   31-Dec-15   31-Mar-15   Q1 2016 vs. Q4 2015   Q1 2016 vs.Q1 2015
Demand deposits [1] $7,324,982 $7,221,238 $7,163,635 $103,744 $161,347
Savings, NOW and money market deposits (non-brokered) 11,940,103 11,440,693 10,932,870 499,410 1,007,233
Savings, NOW and money market deposits (brokered) 383,745 382,424 409,113 1,321 (25,368 )
Time deposits (non-brokered) 7,348,132 7,274,157 7,243,414 73,975 104,718
Time deposits (brokered CDs)   529,631   891,211   1,524,657   (361,580 )   (995,026 )
Total deposits   $27,526,593   $27,209,723   $27,273,689   $316,870     $252,904  
[1] Includes interest and non-interest bearing demand deposits.
 

Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table H - Non-Performing Assets
(Unaudited)
              Variance
As a % of As a % of As a % of  

loans

loans

loans

HIP by

HIP by

HIP by

Q1 2016 vs. Q1 2016 vs.
(Dollars in thousands)   31-Mar-16     category     31-Dec-15     category     31-Mar-15     category     Q4 2015   Q1 2015
Non-accrual loans:
Commercial $197,631 1.9 % $181,816 1.8 % $274,438 3.2 % $15,815 $(76,807 )
Construction 3,941 0.5 3,550 0.5 13,214 1.9 391 (9,273 )
Legacy [1] 4,046 6.6 3,649 5.7 2,288 2.9 397 1,758
Lease financing 3,419 0.5 3,009 0.5 2,506 0.4 410 913
Mortgage 334,907 4.8 351,471 5.0 328,615 4.6 (16,564 ) 6,292
Consumer   55,582     1.4     58,304     1.5     43,892     1.1     (2,722 )   11,690  
Total non-performing loans held-
in-portfolio, excluding covered
loans 599,526 2.7 % 601,799 2.7 % 664,953 3.2 % (2,273 ) (65,427 )

Non-performing loans

held-for-sale [2] 42,743 45,169 8,404 (2,426 ) 34,339
Other real estate owned
(“OREO”), excluding covered
OREO   165,960           155,231           128,170           10,729     37,790  
Total non-performing assets,
excluding covered assets 808,229 802,199 801,527 6,030 6,702
Covered loans and OREO   39,916           40,571           133,211           (655 )   (93,295 )
Total non-performing assets   $848,145           $842,770           $934,738           $5,375     $(86,593 )
Accruing loans past due 90 days or
more [3]   $426,437           $446,725           $451,035           $(20,288 )   $(24,598 )
Ratios excluding covered loans:
Non-performing loans held-in-
portfolio to loans held-in-
portfolio 2.66 % 2.69 % 3.16 %
Allowance for loan losses to
loans held-in-portfolio 2.26 2.25 2.46
Allowance for loan losses to
non-performing loans,
excluding loans held-for-sale   84.80           83.57           77.63                
Ratios including covered loans:
Non-performing assets to total
assets 2.35 % 2.36 % 2.62 %
Non-performing loans held-in-
portfolio to loans held-in-
portfolio 2.61 2.63 2.92
Allowance for loan losses to
loans held-in-portfolio 2.33 2.34 2.51
Allowance for loan losses to
non-performing loans, excluding
loans held-for-sale   89.29           88.68           85.99                

[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, 2016 consisted of $42.7 million in commercial loans and $2 thousand in construction loans (December 31, 2015 - $45 million in commercial loans and $95 thousand in construction loans; March 31, 2015 - $225 thousand in mortgage loans and $8.2 million in commercial loans.)

[3] It is the Corporation’s policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to non-performing since the principal repayment is insured. These balances include $161 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of March 31, 2016 (December 31, 2015 - $164 million; March 31, 2015 - $134 million). Furthermore, the Corporation has approximately $68 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, 2015 - $70 million; March 31, 2015 - $69 million).

 
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table I - Activity in Non-Performing Loans
(Unaudited)
             
Commercial loans held-in-portfolio:
Quarter ended Quarter ended
31-Mar-16   31-Dec-15
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning balance NPLs $177,902 $3,914 $181,816 $235,895 $3,502 $239,397
Plus:
New non-performing loans 21,657 15,064 36,721 17,771 3,339 21,110
Advances on existing non-performing loans - 1 1 - - -
Less:
Non-performing loans transferred to OREO (1,103 ) - (1,103 ) (852 ) - (852 )
Non-performing loans charged-off (4,949 ) (381 ) (5,330 ) (44,423 ) (232 ) (44,655 )
Loans returned to accrual status / loan collections (10,868 ) (3,606 ) (14,474 ) (9,144 ) (2,222 ) (11,366 )
Loans transferred to held-for-sale - - - - (473 ) (473 )
  Non-performing loans sold   -     -     -     (21,345 )   -     (21,345 )
Ending balance NPLs   $182,639     $14,992     $197,631     $177,902     $3,914     $181,816  
 
Construction loans held-in-portfolio:
Quarter ended Quarter ended
31-Mar-16   31-Dec-15
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning balance NPLs $3,550 $- $3,550 $3,605 $- $3,605
Plus:
New non-performing loans 207 671 878 30 1,106 1,136
Less:
Non-performing loans transferred to OREO (304 ) - (304 ) - - -
Non-performing loans charged-off (110 ) - (110 ) (47 ) - (47 )
  Loans returned to accrual status / loan collections   (73 )   -     (73 )   (38 )   (1,106 )   (1,144 )
Ending balance NPLs   $3,270     $671     $3,941     $3,550     $-     $3,550  
 
Mortgage loans held-in-portfolio:
Quarter ended Quarter ended
31-Mar-16   31-Dec-15
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning balance NPLs $337,933 $13,538 $351,471 $331,022 $12,388 $343,410
Plus:
New non-performing loans 78,679 6,920 85,599 85,208 7,208 92,416
Less:
Non-performing loans transferred to OREO (9,226 ) - (9,226 ) (8,860 ) (452 ) (9,312 )
Non-performing loans charged-off (10,889 ) (276 ) (11,165 ) (9,142 ) (300 ) (9,442 )
  Loans returned to accrual status / loan collections   (73,659 )   (8,113 )   (81,772 )   (60,295 )   (5,306 )   (65,601 )
Ending balance NPLs   $322,838     $12,069     $334,907     $337,933     $13,538     $351,471  
 
Legacy loans held-in-portfolio:
Quarter ended Quarter ended
31-Mar-16   31-Dec-15
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning balance NPLs $- $3,649 $3,649 $- $4,059 $4,059
Plus:
New non-performing loans - 604 604 - 247 247
Advances on existing non-performing loans - 2 2 - 9 9
Less:
Non-performing loans charged-off - - - - (151 ) (151 )
  Loans returned to accrual status / loan collections   -     (209 )   (209 )   -     (515 )   (515 )
Ending balance NPLs   $-     $4,046     $4,046     $-     $3,649     $3,649  
 
Total non-performing loans held-in-portfolio (excluding consumer and covered loans):
Quarter ended Quarter ended
31-Mar-16   31-Dec-15
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning balance NPLs $519,385 $21,101 $540,486 $570,522 $19,949 $590,471
Plus:
New non-performing loans 100,543 23,259 123,802 103,009 11,900 114,909
Advances on existing non-performing loans - 3 3 - 9 9
Less:
Non-performing loans transferred to OREO (10,633 ) - (10,633 ) (9,712 ) (452 ) (10,164 )
Non-performing loans charged-off (15,948 ) (657 ) (16,605 ) (53,612 ) (683 ) (54,295 )
Loans returned to accrual status / loan collections (84,600 ) (11,928 ) (96,528 ) (69,477 ) (9,149 ) (78,626 )
Loans transferred to held-for-sale - - - - (473 ) (473 )
  Non-performing loans sold   -     -     -     (21,345 )   -     (21,345 )
Ending balance NPLs   $508,747     $31,778     $540,525     $519,385     $21,101     $540,486  
 

 
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios
(Unaudited)
       
 
Quarter ended Quarter ended Quarter ended
    31-Mar-16   31-Dec-15   31-Mar-15  
(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 $502,935 $34,176 $537,111 $536,005 $34,509 $570,514 $519,719 $82,073 $601,792
Provision (reversal of
provision) for loan losses   47,940     (3,105 )   44,835     57,711     820     58,531     29,711     10,324     40,035    
    550,875     31,071     581,946     593,716     35,329     629,045     549,430     92,397     641,827    
Net loans charged-off (recovered):
BPPR
Commercial 2,704 - 2,704 42,857 - 42,857 4,802 11,599 16,401
Construction 311 - 311 2,966 - 2,966 (2,925 ) 5,771 2,846
Lease financing 1,638 - 1,638 667 - 667 769 - 769
Mortgage 14,696 996 15,692 14,255 1,168 15,423 10,473 3,281 13,754
Consumer   21,298     30     21,328     21,266     (15 )   21,251     23,653     (727 )   22,926  
Total BPPR   40,647     1,026     41,673     82,011     1,153     83,164     36,772     19,924     56,696  
 
BPNA
Commercial 205 - 205 (525 ) - (525 ) (479 ) - (479 )
Legacy [1] (247 ) - (247 ) (359 ) - (359 ) (1,828 ) - (1,828 )
Mortgage 230 - 230 162 - 162 154 - 154
Consumer   1,613     -     1,613     1,581     -     1,581     1,267     -     1,267    
Total BPNA   1,801     -     1,801     859     -     859     (886 )   -     (886 )  
Total loans charged-off - Popular, Inc.   42,448     1,026     43,474     82,870     1,153     84,023     35,886     19,924     55,810    
Net (write-downs) recoveries [2]   -     -     -     (7,911 )   -     (7,911 )   2,680     -     2,680    
Balance at end of period   $508,427     $30,045     $538,472     $502,935     $34,176     $537,111     $516,224     $72,473     $588,697    
 
POPULAR, INC.
Annualized net charge-offs
to average loans held-in-
portfolio 0.76 % 0.76 % 1.48 % 1.46 % 0.72 % 1.00 %
Provision for loan losses
to net charge-offs [3] 1.13 x 1.03 x 0.70 x 0.70 x 0.83 x 0.72 x
 
BPPR
Annualized net charge-offs
to average loans held-in-
portfolio 0.93 % 0.92 % 1.86 % 1.82 % 0.92 % 1.22 %
Provision for loan losses
to net charge-offs [3] 1.08 x 0.98 x 0.68 x 0.68 x 0.87 x 0.74 x
 
BPNA
Annualized net charge-offs
(recoveries) to average
loans held-in-portfolio 0.15 % 0.07 % (0.09) %
Provision for loan losses
to net charge-offs           2.26           2.42           N.M.  

 

[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment.

[2] Net write-downs are related to loans sold or reclassified to held-for-sale.

[3] Excluding provision for loan losses and net write-down related to loans sold or reclassified to held-for-sale.

N.M. - Not meaningful.

 
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED
(Unaudited)
               
                                   
31-Mar-16
(Dollars in thousands)       Commercial     Construction   Legacy [3]   Mortgage   Lease financing   Consumer  

Total [2]

Specific ALLL $55,098 $172 $- $43,252 $608 $24,907 $124,037
Impaired loans [1] $338,980 $2,020 $- $479,092 $2,391 $112,167 $934,650
Specific ALLL to impaired loans   [1]   16.25 %   8.51 %   - %   9.03 %   25.43 %   22.21 %   13.27 %
General ALLL $152,079 $8,804 $2,484 $86,347 $10,427 $124,249 $384,390
Loans held-in-portfolio, excluding impaired loans [1] $9,889,409 $732,838 $61,044 $6,500,109 $640,751 $3,748,936 $21,573,087
General ALLL to loans held-in-portfolio, excluding impaired loans   [1]   1.54 %   1.20 %   4.07 %   1.33 %   1.63 %   3.31 %   1.78 %
Total ALLL $207,177 $8,976 $2,484 $129,599 $11,035 $149,156 $508,427
Total non-covered loans held-in-portfolio [1] $10,228,389 $734,858 $61,044 $6,979,201 $643,142 $3,861,103 $22,507,737
ALLL to loans held-in-portfolio   [1]   2.03 %   1.22 %   4.07 %   1.86 %   1.72 %   3.86 %   2.26 %
[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, 2016 the general allowance on the covered loans amounted to $30.0 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-15
(Dollars in thousands)       Commercial     Construction   Legacy [3]   Mortgage   Lease financing   Consumer  

Total [2]

Specific ALLL $49,243 $264 $- $44,029 $573 $23,963 $118,072
Impaired loans [1] $337,133 $2,481 $- $471,932 $2,404 $111,836 $925,786
Specific ALLL to impaired loans   [1]   14.61 %   10.64 %   - %   9.33 %   23.84 %   21.43 %   12.75 %
General ALLL $147,590 $8,605 $2,687 $89,283 $10,420 $126,278 $384,863
Loans held-in-portfolio, excluding impaired loans [1] $9,762,030 $678,625 $64,436 $6,564,149 $625,246 $3,725,843 $21,420,329
General ALLL to loans held-in-portfolio, excluding impaired loans   [1]   1.51 %   1.27 %   4.17 %   1.36 %   1.67 %   3.39 %   1.80 %
Total ALLL $196,833 $8,869 $2,687 $133,312 $10,993 $150,241 $502,935
Total non-covered loans held-in-portfolio [1] $10,099,163 $681,106 $64,436 $7,036,081 $627,650 $3,837,679 $22,346,115
ALLL to loans held-in-portfolio   [1]   1.95 %   1.30 %   4.17 %   1.89 %   1.75 %   3.91 %   2.25 %
[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, 2015 the general allowance on the covered loans amounted to $34.2 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.

                                   
Variance
(Dollars in thousands)       Commercial     Construction   Legacy   Mortgage   Lease financing   Consumer   Total
Specific ALLL $5,855 $(92 ) $- $(777 ) $35 $944 $5,965
Impaired loans       $1,847     $(461 )   $-     $7,160     $(13 )   $331     $8,864  
General ALLL $4,489 $199 $(203 ) $(2,936 ) $7 $(2,029 ) $(473 )
Loans held-in-portfolio, excluding impaired loans       $127,379     $54,213     $(3,392 )   $(64,040 )   $15,505     $23,093     $152,758  
Total ALLL $10,344 $107 $(203 ) $(3,713 ) $42 $(1,085 ) $5,492
Total non-covered loans held-in-portfolio       $129,226     $53,752     $(3,392 )   $(56,880 )   $15,492     $23,424     $161,622  
 

 
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS
(Unaudited)
           
31-Mar-16
Puerto Rico
(In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total
Allowance for credit losses:
Specific ALLL non-covered loans $55,098 $172 $41,660 $608 $24,326 $121,864
General ALLL non-covered loans   142,492     4,065     82,840     10,427     111,459     351,283  
ALLL - non-covered loans   197,590     4,237     124,500     11,035     135,785     473,147  
Specific ALLL covered loans - - - - - -
General ALLL covered loans   -     -     29,822     -     223     30,045  
ALLL - covered loans   -     -     29,822     -     223     30,045  
Total ALLL   $197,590     $4,237     $154,322     $11,035     $136,008     $503,192  
Loans held-in-portfolio:
Impaired non-covered loans $338,980 $2,020 $471,183 $2,391 $109,920 $924,494
Non-covered loans held-in-portfolio, excluding impaired loans   7,029,311     103,124     5,628,576     640,751     3,199,171     16,600,933  
Non-covered loans held-in-portfolio   7,368,291     105,144     6,099,759     643,142     3,309,091     17,525,427  
Impaired covered loans - - - - - -
Covered loans held-in-portfolio, excluding impaired loans   -     -     606,711     -     18,419     625,130  
Covered loans held-in-portfolio   -     -     606,711     -     18,419     625,130  
Total loans held-in-portfolio   $7,368,291     $105,144     $6,706,470     $643,142     $3,327,510     $18,150,557  
 
 
31-Dec-15
Puerto Rico
(In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total
Allowance for credit losses:
Specific ALLL non-covered loans $49,243 $264 $42,965 $573 $23,478 $116,523
General ALLL non-covered loans   137,682     4,693     85,362     10,420     115,243     353,400  
ALLL - non-covered loans   186,925     4,957     128,327     10,993     138,721     469,923  
Specific ALLL covered loans - - - - - -
General ALLL covered loans   -     -     33,967     -     209     34,176  
ALLL - covered loans   -     -     33,967     -     209     34,176  
Total ALLL   $186,925     $4,957     $162,294     $10,993     $138,930     $504,099  
Loans held-in-portfolio:
Impaired non-covered loans $337,133 $2,481 $465,117 $2,404 $109,660 $916,795
Non-covered loans held-in-portfolio, excluding impaired loans   7,031,086     98,467     5,662,374     625,246     3,236,642     16,653,815  
Non-covered loans held-in-portfolio   7,368,219     100,948     6,127,491     627,650     3,346,302     17,570,610  
Impaired covered loans - - - - - -
Covered loans held-in-portfolio, excluding impaired loans   -     -     627,102     -     19,013     646,115  
Covered loans held-in-portfolio   -     -     627,102     -     19,013     646,115  
Total loans held-in-portfolio   $7,368,219     $100,948     $6,754,593     $627,650     $3,365,315     $18,216,725  
 
                         
Variance
(In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total
Allowance for credit losses:
Specific ALLL non-covered loans $5,855 $(92 ) $(1,305 ) $35 $848 $5,341
General ALLL non-covered loans   4,810     (628 )   (2,522 )   7     (3,784 )   (2,117 )
ALLL - non-covered loans   10,665     (720 )   (3,827 )   42     (2,936 )   3,224  
Specific ALLL covered loans - - - - - -
General ALLL covered loans   -     -     (4,145 )   -     14     (4,131 )
ALLL - covered loans   -     -     (4,145 )   -     14     (4,131 )
Total ALLL   $10,665     $(720 )   $(7,972 )   $42     $(2,922 )   $(907 )
Loans held-in-portfolio:
Impaired non-covered loans $1,847 $(461 ) $6,066 $(13 ) $260 $7,699
Non-covered loans held-in-portfolio, excluding impaired loans   (1,775 )   4,657     (33,798 )   15,505     (37,471 )   (52,882 )
Non-covered loans held-in-portfolio   72     4,196     (27,732 )   15,492     (37,211 )   (45,183 )
Impaired covered loans - - - - - -
Covered loans held-in-portfolio, excluding impaired loans   -     -     (20,391 )   -     (594 )   (20,985 )
Covered loans held-in-portfolio   -     -     (20,391 )   -     (594 )   (20,985 )
Total loans held-in-portfolio   $72     $4,196     $(48,123 )   $15,492     $(37,805 )   $(66,168 )
 

 
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS
(Unaudited)
             
31-Mar-16
U.S. Mainland
(In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total
Allowance for credit losses:
Specific ALLL $- $- $- $1,592 $581 $2,173
  General ALLL   9,587     4,739   2,484     3,507     12,790   33,107
Total ALLL   $9,587     $4,739   $2,484     $5,099     $13,371   $35,280
Loans held-in-portfolio:
Impaired loans $- $- $- $7,909 $2,247 $10,156
  Loans held-in-portfolio, excluding impaired loans   2,860,098     629,714   61,044     871,533     549,765   4,972,154
Total loans held-in-portfolio   $2,860,098     $629,714   $61,044     $879,442     $552,012   $4,982,310
 
 
31-Dec-15
U.S. Mainland
(In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total
Allowance for credit losses:
Specific ALLL $- $- $- $1,064 $485 $1,549
  General ALLL   9,908     3,912   2,687     3,921     11,035   31,463
Total ALLL   $9,908     $3,912   $2,687     $4,985     $11,520   $33,012
Loans held-in-portfolio:
Impaired loans $- $- $- $6,815 $2,176 $8,991
  Loans held-in-portfolio, excluding impaired loans   2,730,944     580,158   64,436     901,775     489,201   4,766,514
Total loans held-in-portfolio   $2,730,944     $580,158   $64,436     $908,590     $491,377   $4,775,505
 
                           
Variance
(In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total
Allowance for credit losses:
Specific ALLL $- $- $- $528 $96 $624
  General ALLL   (321 )   827   (203 )   (414 )   1,755   1,644
Total ALLL   $(321 )   $827   $(203 )   $114     $1,851   $2,268
Loans held-in-portfolio:
Impaired loans $- $- $- $1,094 $71 $1,165
  Loans held-in-portfolio, excluding impaired loans   129,154     49,556   (3,392 )   (30,242 )   60,564   205,640
Total loans held-in-portfolio   $129,154     $49,556   $(3,392 )   $(29,148 )   $60,635   $206,805
 

     
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table N - Reconciliation to GAAP Financial Measures
(Unaudited)
 
 
(In thousands, except share or per share information)   31-Mar-16   31-Dec-15   31-Mar-15
Total stockholders’ equity $5,250,300 $5,105,324 $4,377,120
Less: Preferred stock (50,160 ) (50,160 ) (50,160 )
Less: Goodwill (631,095 ) (626,388 ) (507,820 )
Less: Other intangibles   (54,080 )   (58,109 )   (59,063 )
Total tangible common equity   $4,514,965     $4,370,667     $3,760,077  
Total assets $36,147,009 $35,761,733 $35,615,447
Less: Goodwill (631,095 ) (626,388 ) (507,820 )
Less: Other intangibles   (54,080 )   (58,109 )   (59,063 )
Total tangible assets   $35,461,834     $35,077,236     $35,048,564  
Tangible common equity to tangible assets 12.73 % 12.46 % 10.73 %
Common shares outstanding at end of period 103,670,005 103,618,976 103,486,927
Tangible book value per common share   $43.55     $42.18     $36.33  
 

     
Popular, Inc.
Financial Supplement to First Quarter 2016 Earnings Release
Table O - Financial Information - Westernbank Loans
(Unaudited)
 
 
Revenues
Quarters ended
(In thousands)   31-Mar-16   31-Dec-15   Variance
Interest income on WB loans   $44,904     $47,870     $(2,966 )
FDIC loss-share expense:
Amortization of indemnification asset (4,042 ) (3,926 ) (116 )
80% mirror accounting on credit impairment losses (reversal) [1] (2,093 ) (52 ) (2,041 )
80% mirror accounting on reimbursable expenses 3,950 2,654 1,296

80% mirror accounting on recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC

(645 ) (6,014 ) 5,369
Change in true-up payment obligation (443 ) 2,782 (3,225 )
Other   127     197     (70 )
Total FDIC loss-share expense   (3,146 )   (4,359 )   1,213  
Total revenues   41,758     43,511     (1,753 )
Provision (reversal) for loan losses- WB loans   (356 )   7,817     (8,173 )
Total revenues less provision (reversal) for loan losses   $42,114     $35,694     $6,420  

[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 [2]
(In thousands)   [1] 31-Mar-16   31-Dec-15   Variance
Professional fees $3,316 $6,315 $(2,999 )
OREO expenses 2,205 1,911 294
Other operating expenses   1,971     2,603     (632 )
Total operating expenses   $7,492     $10,829     $(3,337 )

[1] Includes expenses related to loans subject, and not subject, to the FDIC loss-sharing agreement.

[2] Expense reimbursements from the FDIC may be recorded with a time lag, since these are claimed upon the event of loss or charge-off of the loans which may occur in a subsequent period.

 
 
Quarterly average assets
Quarters ended
(In millions)   31-Mar-16   31-Dec-15   Variance
Loans $2,058 $2,156 $(98 )
FDIC loss-share asset   233     303     (70 )
 

 
Activity in the carrying amount and accretable yield of loans accounted for under ASC 310-30
       
Quarters ended
      31-Mar-16   31-Dec-15
(In thousands)   Accretable yield   Carrying amount of loans   Accretable yield   Carrying amount of loans
Beginning balance $1,112,458   $1,974,501 $1,145,449 $2,076,012
Accretion

(43,533

)

43,533

(46,582 ) 46,582
Changes in expected cash flows 59,883 - 13,591 -
Collections / charge-offs   -     (82,593 )   -     (148,093 )
Ending balance

1,128,808

1,935,441

1,112,458 1,974,501
  Allowance for loan losses - ASC 310-30 loans   -     (62,967 )   -     (63,563 )
Ending balance, net of allowance for loan losses  

$1,128,808

   

$1,872,474

    $1,112,458     $1,910,938  
The carrying amount of loans acquired from Westernbank and accounted for under ASC 310-30 which remain subject to
the loss-sharing agreement with the FDIC amounted to approximately $615 million as of March 31, 2016 and $636
million as of December 31, 2015.
 
 
 
 
Activity in the carrying amount of the FDIC indemnity asset
 
Quarters ended
(In thousands)       31-Mar-16       31-Dec-15
Balance at beginning of period $310,221 $311,946
Amortization (4,042 ) (3,926 )
Credit impairment losses (reversal) to be covered under loss-sharing agreements (2,093 ) (52 )
Reimbursable expenses to be covered under loss-sharing agreements 3,950 2,654
Net payments from FDIC under loss-sharing agreements (88,588 ) (2,560 )
Other adjustments attributable to FDIC loss-sharing agreements       -         2,159  
Balance at end of period       $219,448         $310,221  
 
 
Activity in the remaining FDIC loss-share asset amortization
 
Quarters ended
(In thousands)       31-Mar-16       31-Dec-15
Balance at beginning of period $26,100 $27,367
Amortization (4,042 ) (3,926 )
Impact of lower projected losses       3,147         2,659  
Balance at end of period       $25,205         $26,100  
 

Contacts

Popular, Inc.
Investor Relations:
Brett Scheiner, 212-417-6721
Investor Relations Officer
BScheiner@BPOP.com
or
Media Relations:
Teruca Rullán, 787-281-5170
Mobile: 917-679-3596
Senior Vice President, Corporate Communications

Contacts

Popular, Inc.
Investor Relations:
Brett Scheiner, 212-417-6721
Investor Relations Officer
BScheiner@BPOP.com
or
Media Relations:
Teruca Rullán, 787-281-5170
Mobile: 917-679-3596
Senior Vice President, Corporate Communications