EX-99.1 2 d211770dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

 

LOGO

Popular, Inc. Announces Third Quarter 2021 Financial Results

 

 

Net income of $248.1 million in Q3 2021, compared to net income of $218.1 million in Q2 2021.

 

 

Net interest margin of 2.77% in Q3 2021, compared to 2.91% in Q2 2021; net interest margin on a taxable equivalent basis of 3.04% in Q3 2021, compared to 3.22% in Q2 2021.

 

 

Credit Quality:

 

   

Non-performing loans held-in-portfolio (“NPLs”) decreased by $52.3 million from Q2 2021; NPLs to loans ratio at 2.2% vs. 2.4% in Q2 2021;

 

   

Net charge-offs (“NCOs”) increased by $10.1 million from Q2 2021; NCOs at 0.12% of average loans held-in-portfolio vs. (0.02%) in Q2 2021;

 

   

Allowance for credit losses (“ACL”) to loans held-in-portfolio at 2.49% vs. 2.70% in Q2 2021; and

 

   

ACL to NPLs at 113.6% vs. 114.7% in Q2 2021.

 

 

Common Equity Tier 1 ratio of 17.36%, Common Equity per Share of $74.66 and Tangible Book Value per Share of $66.01 at September 30, 2021.

SAN JUAN, Puerto Rico — (BUSINESS WIRE) — Popular, Inc. (the “Corporation,” “Popular,” “we,” “us,” “our”) (NASDAQ:BPOP) reported net income of $248.1 million for the quarter ended September 30, 2021, compared to net income of $218.1 million for the quarter ended June 30, 2021.

Ignacio Alvarez, President and Chief Executive Officer, said: “The third quarter was another strong quarter. We achieved net income of $248.1 million, driven by a reserve release of $61 million. The release reflects strong credit quality performance as well as a positive economic outlook. We continued to see higher credit and debit card spending, strong auto and mortgage originations as well as higher deposits. During the quarter we also continued to return capital to our shareholders, completing our $350 million accelerated repurchase program and announcing the redemption of $187 million in high-cost trust preferred securities. On October 15, 2021 we also completed a bolt-on acquisition of a national equipment leasing platform that complements our existing healthcare lending vertical. I am extremely proud of the work our team has accomplished during 2021 as we continue to serve our clients and communities.”

 

1


Significant Events

Financial Highlights

For the third quarter of 2021, the Corporation recorded net income of $248.1 million, compared to a net income of $218.1 million for the previous quarter. The third quarter’s results include a release in the allowance for credit losses of $61.2 million driven by improving credit quality and the improved macroeconomic outlook. Net Interest income was $489.4 million, an increase of $1.6 million compared to the previous quarter, mainly due to higher average earning assets and higher income from the loans issued under the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”), offset in part by a lower discount amortization of purchased credit deteriorated (“PCD”) loans. Net interest margin decreased 14 basis points to 2.77%. Total assets grew by $1.5 billion from the previous quarter, reflecting an increase in deposits across various sectors, principally from the Puerto Rico public sector.

Acquisition of K2 Capital Group LLC

On October 15, 2021, Popular Equipment Finance, LLC (“PEF”), a newly-formed wholly-owned subsidiary of Popular Bank (“PB”), completed the acquisition of certain assets and the assumption of certain liabilities of Minnesota-based K2 Capital Group LLC’s (“K2”) equipment leasing and financing business (the “Acquired Business”). PEF made a payment to K2 at closing of approximately $159 million in cash, representing a premium of approximately $40 million over the book value of K2’s net assets. An additional approximately $29 million in earnout payments could be payable to K2 over the next three years, contingent upon the achievement of certain agreed-upon financial targets during such period.

Specializing in the healthcare industry, the Acquired Business provides a variety of lease products, including operating and capital leases, and also offers private label vendor finance programs to equipment manufacturers and healthcare organizations. The acquisition provides PB with a national equipment leasing platform that complements its existing healthcare lending business.

As part of the transaction, PEF acquired approximately $119 million in net assets that consisted mainly of capital leases. All of K2’s former employees, including its management team, became PEF employees at the closing of the transaction. The transaction will be accounted for as a business combination.

Capital Actions

Accelerated Share Repurchase

On September 9, 2021, the Corporation completed its previously announced accelerated share repurchase program for the repurchase of an aggregate $350 million of Popular’s common stock. Under the terms of the accelerated share repurchase agreement (the “ASR Agreement”), on May 4, 2021, the Corporation made an initial payment of $350 million and received an initial delivery of 3,785,831 shares of Popular’s Common Stock (the “Initial Shares”). The transaction was accounted for as a treasury stock transaction. As a result of the receipt of the Initial Shares, the Corporation recognized in shareholders’ equity approximately $280 million in treasury stock and $70 million as a reduction in capital surplus. Upon the final settlement of the ASR Agreement, the Corporation received an additional 828,965 shares and recognized $61 million as treasury stock with a corresponding increase in its capital surplus account. The Corporation repurchased a total of 4,614,796 shares at an average purchase price of $75.84 under the ASR Agreement.

Redemption of Trust Preferred Securities

On September 30, 2021, the Corporation announced that it had sent a redemption notice to The Bank of New York Mellon, the Property Trustee for Popular Capital Trust I (the “Trust”), to redeem, on November 1, 2021, all outstanding 6.70% Cumulative Monthly Income Trust Preferred Securities (the “Capital Securities”) issued by the Trust (liquidation amount of $25 per security and amounting to $186,663,800 (or $181,063,250 after excluding Popular’s participation in the Trust of $5,600,550) in the aggregate). The redemption price for the Capital Securities will be equal to $25 per security plus accrued and unpaid distributions up to and excluding the redemption date in the amount of $0.139583 per security, for a total payment per security in the amount of $25.139583. Upon redemption, Popular intends to apply for delisting of the Popular Capital Trust I (NASDAQ: BPOPN) from the Nasdaq Global Select Market

 

2


Earnings Highlights

 

(Unaudited)

   Quarters ended      Nine months ended  

(Dollars in thousands, except per share information)

   30-Sep-21     30-Jun-21     30-Sep-20      30-Sep-21     30-Sep-20  

Net interest income

   $ 489,393     $ 487,802     $ 461,021      $ 1,456,307     $ 1,384,997  

Provision for credit losses (benefit)

     (61,173     (17,015     19,138        (160,414     271,318  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income after provision for credit losses (benefit)

     550,566       504,817       441,883        1,616,721       1,113,679  

Other non-interest income

     169,258       154,540       128,767        477,451       367,465  

Operating expenses

     388,168       368,185       361,066        1,131,881       1,081,905  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income before income tax

     331,656       291,172       209,584        962,291       399,239  

Income tax expense

     83,542       73,093       41,168        233,466       68,893  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 248,114     $ 218,079     $ 168,416      $ 728,825     $ 330,346  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income applicable to common stock

   $ 247,761     $ 217,726     $ 168,064      $ 727,766     $ 328,941  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income per common share-basic

   $ 3.09     $ 2.67     $ 2.01      $ 8.89     $ 3.80  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income per common share-diluted

   $ 3.09     $ 2.66     $ 2.00      $ 8.87     $ 3.80  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income on a taxable equivalent basis – Non-GAAP financial measure

Net interest income, on a taxable equivalent basis, is presented with its different components in Table D and E for the quarter and nine months ended September 30, 2021, and comparable periods. Net interest income on a taxable equivalent basis is a non-GAAP financial measure. Management believes that this presentation provides meaningful information since it facilitates the comparison of revenues arising from taxable and tax-exempt sources.

Non-GAAP financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by other companies.

Net interest income for the quarter ended September 30, 2021 was $489.4 million compared to $487.8 million in the previous quarter, an increase of $1.6 million. The total net impact on net interest income of the third quarter having one more day than the second quarter of 2021 is estimated at $3.8 million. Net interest income, on a taxable equivalent basis, for the third quarter of 2021 was $536.3 million, a decrease of $4.9 million when compared to $541.2 million in the second quarter of 2021. The decrease in net interest income on a taxable equivalent is related to lower exempt income mainly from mortgage-backed securities. On a taxable equivalent basis, the total net impact on net interest income of the third quarter having of one more day than the second quarter of 2021 is estimated at $4.1 million.

The net interest margin decreased 14 basis points to 2.77% compared to 2.91% in the previous quarter. The decrease in the net interest margin is due to a higher proportion of money market and investment securities, which carry a low yield, resulting from a higher volume of deposits in the quarter, lower discount amortization of PCD loans, partially offset by higher loan fees related to loans issued under the SBA PPP and a lower cost of deposits. On a taxable equivalent basis, net interest margin for the third quarter of 2021 was 3.04% compared to 3.22% in the second quarter of 2021, a decrease of 18 basis points. The main variances in net interest income on a taxable equivalent basis were:

 

   

Lower interest income from money market investments, trading and investment securities by $7.7 million due to lower volume and yield of mortgage-backed securities, partially offset by a higher volume of lower yielding U.S. Treasury notes

Partially offset by:

 

   

Higher interest income from loans by $1.5 million mainly due to the following:

 

   

Higher interest income from commercial loans driven by higher interest income and fees from PPP loans by $8.1 million and the impact of one more day in the quarter or $1.9 million, offset in part by a lower discount amortization on PCD loans of approximately $9.3 million; and

 

3


   

auto and lease financing continuing its positive trend increasing $147 million in average loan balances and reflecting an increase in interest income of $1.8 million. The decrease in yield of the portfolio is driven by lower amortization on a previously purchased auto loans portfolio Partially offset by:

 

   

Lower interest income from mortgage loans due to lower average volume resulting from continued amortization of the portfolio at Banco Popular de Puerto Rico (“BPPR”); and

 

   

lower interest income from consumer loans, mainly credit cards, due to the reversal last quarter of $1.6 million from the reserve for uncollectible interest.

 

   

Lower interest expense on deposits by $1.1 million resulting from a lower cost by 3 basis points driven by a higher volume of low yielding deposits, reduction of costs in several non-maturity deposit products and renewals of time deposits in a lower interest rate environment. These positive variances in deposit cost were partially offset by higher volume of interest-bearing deposits by $2.8 billion.

The Corporation recognized income of $22.0 million related to loans issued under the SBA PPP program during the third quarter, compared to $13.9 million in the previous quarter. These loans carried a yield of approximately 10.10% during this quarter, including the amortization of fee income received under the SBA PPP program, compared to 4.45% last quarter. At September 30, 2021, the Corporation had unamortized fee income related to the SBA PPP program of $40.0 million and outstanding loan balances of $669.8 million.

Net interest income for the BPPR segment amounted to $419.2 million for the quarter ended September 30, 2021, flat quarter over quarter. The net interest margin for the third quarter of 2021 was 2.75%, a decrease of 16 basis points when compared to 2.91% for the previous quarter. As discussed above, net interest margin was negatively impacted by a higher volume of money market and investment securities, lower amortization of discount on PCD loans, partially offset by higher fees resulting from the forgiveness and amortization of SBA PPP loans of approximately $8.1 million and lower deposit cost. The cost of interest-bearing deposits was 0.17%, compared to 0.18% reported in the second quarter. Total cost of deposits for the quarter was 0.13%, compared to 0.14% reported in the second quarter of 2021.

Net interest income for the PB segment was $80.0 million for the quarter ended September 30, 2021, compared to $78.7 million during the previous quarter. Net interest margin for the quarter was 3.36% higher than the 3.33% the previous quarter. The cost of interest-bearing deposits was 0.56%, compared to 0.60% in the previous quarter, decreasing for the eighth consecutive quarter. Total cost of deposits for the quarter, including demand deposits, was 0.43%, compared to 0.47% reported in the second quarter of 2021.

Non-interest income

Non-interest income increased by $14.8 million to $169.3 million for the quarter ended September 30, 2021, compared to $154.5 million for the quarter ended June 30, 2021. The variance in non-interest income was primarily driven by:

 

   

higher other service fees by $4.1 million mainly due to higher insurance fees by $1.6 million, higher other fees by $1.5 million mostly related to loan syndication activities and higher credit card fees by $0.7 million mainly in interchange income and late fees; and

 

   

higher other operating income by $10.0 million mostly due to a gain of $7.0 million recognized by BPPR as a result of the sale and partial leaseback of two corporate office buildings and higher net earnings from the combined portfolio of investments under the equity method by $3.0 million.

Refer to Table B for further details.

 

4


Operating expenses

Operating expenses for the third quarter of 2021 totaled $388.2 million, an increase of $20.0 million from the second quarter of 2021. The variance in operating expenses was driven primarily by:

 

   

higher personnel cost by $3.4 million due to higher salaries as a result of salary and annual merit increases granted during the quarter;

 

   

higher professional fees by $3.6 million mainly due to higher advisory expenses related to corporate initiatives;

 

   

higher business promotion expense by $1.6 million mainly due to promotional events during the quarter;

 

   

higher FDIC deposit insurance expense by $1.4 million mainly due to higher average total assets;

 

   

lower other real estate owned (OREO) net benefit by $2.6 million mainly due to lower gain on sale of mortgage properties;

 

   

higher credit and debit card processing, volume, interchange and other expenses by $2.0 million mainly due to higher volume of transactions; and

 

   

higher other operating expenses by $4.3 million due to higher printing and supplies cost by $1.1 million and lower gain on sale of repossessed auto units by $1.4 million.

Full-time equivalent employees were 8,342 as of September 30, 2021, compared to 8,439 as of June 30, 2021.

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

Income taxes

For the quarter ended September 30, 2021, the Corporation recorded an income tax expense of $83.5 million, compared to $73.1 million for the previous quarter. The increase in income tax expense was mainly attributable to higher income before tax during the third quarter of 2021 and lower exempt income. The effective tax rate (“ETR”) for the third quarter of 2021 was 25%, flat when compared with the previous quarter. The ETR of the Corporation is impacted by the composition and source of its taxable income.

Credit Quality

During the third quarter of 2021, the Corporation continued to exhibit favorable credit quality and low credit costs. Early delinquencies and NCOs, remained at relatively low levels when compared to the trend for the past 10-years, although higher than the prior quarter. We will continue to closely monitor COVID-19 pandemic related risks and the effects of the receding stimulus on economic conditions and on borrower performance. However, management believes that the improvement over the last few years in the risk profile of the Corporation’s loan portfolios positions Popular to operate successfully under the current environment.

The following presents credit quality results for the third quarter of 2021:

 

   

At September 30, 2021, total non-performing loans held-in-portfolio decreased by $52.3 million from June 30, 2021. BPPR’s NPLs decreased by $47.9 million, driven by lower commercial and mortgage NPLs by $34.3 million and $16.1 million, respectively. The commercial NPLs decrease was mainly due to repayment activity, coupled with charge-offs of $7.6 million related to certain collateral dependent loans, while the mortgage NPLs decrease was due to lower inflows for the quarter. PB’s NPLs decreased by $4.4 million, mostly related to a $5.9 million commercial loan pay-off. At September 30, 2021, the ratio of NPLs to total loans held-in-portfolio was 2.2%, compared to 2.4% in the second quarter of 2021.

 

   

Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $43.7 million quarter-over-quarter. In BPPR, total inflows decreased by $37.0 million, mostly driven by lower commercial inflows of $32.2 million, as the prior quarter included the inflow of a single $32.4 million relationship. Mortgage inflows decreased by $4.8 million from the prior quarter, as inflows continue trending lower than pre-pandemic levels. NPL inflows at PB decreased by $6.6 million during the quarter, mostly due to lower commercial inflows.

 

5


   

NCOs experienced a negative variance of $10.1 million from a net recovery of $1.3 million in the second quarter of 2021 to charge-offs of $8.8 million this quarter. BPPR ‘s NCOs increased by $10.8 million, primarily driven by higher commercial NCOs by $14.2 million partially offset by lower mortgage NCOs by $3.0 million. The increase reflected in the commercial NCOs was mostly driven by two commercial loans with aggregate charge-offs of $7.6 million, combined with the effect of recoveries of $7.9 million in the prior period from the resolution of a non-performing relationship. During the third quarter of 2021, the Corporation’s ratio of annualized net charge-offs to average loans held-in-portfolio was 0.12%, compared to (0.02)% in the second quarter of 2021. Refer to Table M for further information on net charge-offs and related ratios.

 

   

At September 30, 2021, the allowance for credit losses (“ACL”) decreased by $67.2 million, or 8.6%, from the second quarter of 2021 to $718.6 million. The ACL incorporated updated macroeconomic scenarios for Puerto Rico and the United States, which continued to show a positive outlook for the economy. In BPPR, the ACL decreased by $45.1 million mainly driven by changes in the macroeconomic scenarios, particularly certain income-related variables, and credit quality. The allowance for the PB segment decreased by $22.1 million mainly driven by a reduction in the qualitative reserve for commercial real estate loans, also influenced by the changes in the macroeconomic scenarios. The ratio of the allowance for credit losses to loans held-in-portfolio was 2.49% in the third quarter of 2021, compared to 2.70% in the previous quarter. The ratio of the allowance for credit losses to NPLs held-in-portfolio stood at 113.6%, compared to 114.7% 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 optimistic, baseline and pessimistic scenarios. Among the three scenarios used to estimate the ACL, the baseline is assigned the highest probability, followed by the pessimistic scenario given the uncertainties in the economic outlook and downside risk. The current baseline forecast continues to show a favorable economic scenario. The 2021 forecasted GDP growth is at 6.4% for U.S. and 3.8% for P.R., consistent with the previous 2021 forecast of 6.8% and 3.8%, respectively. The forecasted U.S. unemployment rate average for 2021 of 5.5% remained consistent with the previous estimate of 5.4%. In the case of P.R., the forecasted unemployment rate average for 2021 of 8.2% showed a slight improvement when compared to the previous forecast of 8.4%. Average unemployment rate in P.R. is expected to continue declining through 2022, which is now forecasted at 7.2%, improving from the previous forecast of 7.3%.

 

   

The provision for credit losses for the loan portfolios for the third quarter of 2021 reflected a benefit of $58.6 million, compared to a benefit of $17.5 million in the previous quarter, reflecting changes in the macroeconomic outlook, as well as credit quality trend. The provision for the BPPR segment was a benefit of $36.0 million, a favorable variance of $13.5 million compared to the previous quarter, while the provision expense for the PB segment was a benefit of $22.7 million, a favorable variance of $27.6 million from the previous quarter.

 

   

The provision for unfunded commitments for the third quarter of 2021 reflected a benefit of $1.5 million, compared to an expense of $0.4 million during the previous quarter. The provision for credit losses in our investment portfolio was a benefit of $1.0 million, compared to an expense of $0.1 million in the second quarter of 2021. 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.

 

6


Non-Performing Assets

 

(Unaudited)

                  

(In thousands)

   30-Sep-21     30-Jun-21     30-Sep-20  

Non-performing loans held-in-portfolio

   $ 632,835     $ 685,183     $ 734,368  

Non-performing loans held-for-sale

     —         8,700       4,070  

Other real estate owned (“OREO”)

     76,828       73,272       100,592  
  

 

 

   

 

 

   

 

 

 

Total non-performing assets

   $ 709,663     $ 767,155     $ 839,030  
  

 

 

   

 

 

   

 

 

 

Net charge-offs (recoveries) for the quarter

   $ 8,823     $ (1,291   $ 16,859  
  

 

 

   

 

 

   

 

 

 

Ratios:

      

Loans held-in-portfolio

   $ 28,855,372     $ 29,062,617     $ 29,392,510  

Non-performing loans held-in-portfolio to loans held-in-portfolio

     2.19     2.36     2.50

Allowance for credit losses to loans held-in-portfolio

     2.49       2.70       3.15  

Allowance for credit losses to non-performing loans, excluding loans held-for-sale

     113.55       114.68       126.07  

Refer to Table K for additional information.

Provision for Credit Losses (Benefit) - Loan Portfolios

 

(Unaudited)

   Quarters ended      Nine months ended  

(In thousands)

   30-Sep-21     30-Jun-21     30-Sep-20      30-Sep-21     30-Sep-20  

Provision for credit losses (benefit) - loan portfolios:

           

BPPR

   $ (35,992   $ (22,488   $ 7,682      $ (98,456   $ 181,109  

Popular U.S.

     (22,653     4,988       11,770        (53,468     90,442  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total provision for credit losses (benefit) - loan portfolios

   $ (58,645   $ (17,500   $ 19,452      $ (151,924   $ 271,551  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Credit Quality by Segment

 

(Unaudited)                   

(In thousands)

   Quarters ended  

BPPR

   30-Sep-21     30-Jun-21     30-Sep-20  

Provision for credit losses (benefit) - loan portfolios

   $ (35,992   $ (22,488   $ 7,682  

Net charge-offs (recoveries)

     9,336       (1,483     13,769  

Total non-performing loans held-in-portfolio

     608,871       656,789       693,676  

Allowance / loans held-in-portfolio

     2.92     3.13     3.48

 

     Quarters ended  

Popular U.S.

   30-Sep-21     30-Jun-21     30-Sep-20  

Provision for credit losses (benefit) - loan portfolios

   $ (22,653   $ 4,988     $ 11,770  

Net charge-offs (recoveries)

     (513     192       3,090  

Total non-performing loans held-in-portfolio

     23,964       28,394       40,692  

Allowance / loans held-in-portfolio

     1.32     1.57     2.22

 

7


Financial Condition Highlights

 

(Unaudited)

      

(In thousands)

   30-Sep-21      30-Jun-21      30-Sep-20  

Cash and money market investments

   $ 18,065,211      $ 18,333,650      $ 12,425,126  

Investment securities

     24,697,876        22,647,401        21,478,048  

Loans

     28,855,372        29,062,617        29,392,510  

Total assets

     74,189,163        72,657,293        65,910,369  

Deposits

     66,013,561        64,641,776        56,021,983  

Borrowings

     1,263,413        1,267,545        1,407,424  

Total liabilities

     68,206,192        66,842,679        59,998,284  

Stockholders’ equity

     5,982,971        5,814,614        5,912,085  

Total assets increased by $1.5 billion from the second quarter of 2021, driven by:

 

   

an increase of $2.1 billion in debt securities available-for-sale, mainly due to purchases of U.S. treasury securities, partially offset by paydowns of agency mortgage-backed securities;

partially offset by:

 

   

a decrease of $0.3 billion in cash and money market investments due to purchases of debt securities available-for-sale; and

 

   

a decrease in loans held-in-portfolio by $0.2 billion mainly due to the forgiveness of approximately $0.4 billion in PPP loans during the quarter. Excluding the decrease in the PPP portfolio, loan balances increased by approximately $0.2 billion mainly in the commercial and auto loan portfolios in BPPR.

Total liabilities increased by $1.4 billion from the second quarter of 2021, mainly due to higher Puerto Rico public sector deposits by $0.7 billion and higher retail and commercial demand deposits by $0.5 billion at BPPR.

Stockholders’ equity increased by approximately $168.4 million from the second quarter of 2021, principally due to net income for the quarter of $248.1 million, partially offset by declared dividends of $36.3 million on common stock, $0.3 million in dividends on preferred stock and lower accumulated unrealized gains on debt securities available-for-sale by $47.0 million.

Common equity tier-1 ratio (“CET1”), common equity per share and tangible book value per share were 17.36%, $74.66 and $66.01, respectively, at September 30, 2021, compared to 16.55%, $71.82 and $63.24 at June 30, 2021. Refer to Table A for capital ratios.

 

8


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 (including the appearance of new strains of the virus), 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, 2020, in our Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021, and in our Form 10-Q for the quarter ended September 30, 2021 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 Wednesday, October 20, 2021 at 11:00 a.m. Eastern Time. The call will be open to the public and broadcasted live over the Internet and can be accessed through the Investor Relations section of the Corporation’s website: www.popular.com.

Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through the dial-in telephone number 1-844-200-6205 (Toll Free) or 1-646-904-5544 (Local).

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, November 17, 2021. The replay dial-in is: 1-866-813-9403 or 1-929-458-6194. The replay passcode is 928924.

An electronic version of this press release can be found at the Corporation’s website: www.popular.com.

 

9


Popular, Inc.

Financial Supplement to Third Quarter 2021 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

 

10


POPULAR, INC.

Financial Supplement to Third Quarter 2021 Earnings Release

Table A - Selected Ratios and Other Information

(Unaudited)

     Quarters ended     Nine months ended  
     30-Sep-21     30-Jun-21     30-Sep-20     30-Sep-21     30-Sep-20  

Basic EPS

   $ 3.09     $ 2.67     $ 2.01     $ 8.89     $ 3.80  

Diluted EPS

   $ 3.09     $ 2.66     $ 2.00     $ 8.87     $ 3.80  

Average common shares outstanding

     80,126,166       81,609,435       83,809,272       81,864,634       86,567,680  

Average common shares outstanding - assuming dilution

     80,274,942       81,772,789       83,836,151       82,014,113       86,645,691  

Common shares outstanding at end of period

     79,841,564       80,656,480       84,219,464       79,841,564       84,219,464  

Market value per common share

   $ 77.67     $ 75.05     $ 36.27     $ 77.67     $ 36.27  

Market capitalization - (In millions)

   $ 6,201     $ 6,053     $ 3,055     $ 6,201     $ 3,055  

Return on average assets

     1.34     1.24     1.06     1.39     0.76

Return on average common equity

     17.10     15.43     12.46     17.09     8.21

Net interest margin (non-taxable equivalent basis)

     2.77     2.91     3.06     2.92     3.39

Net interest margin (taxable equivalent basis) -non-GAAP

     3.04     3.22     3.37     3.23     3.72

Common equity per share

   $ 74.66     $ 71.82     $ 69.94     $ 74.66     $ 69.94  

Tangible common book value per common share (non-GAAP) [1]

   $ 66.01     $ 63.24     $ 61.69     $ 66.01     $ 61.69  

Tangible common equity to tangible assets (non-GAAP) [1]

     7.17     7.09     7.97     7.17     7.97

Return on average tangible common equity [1]

     19.44     17.58     14.32     19.46     9.44

Tier 1 capital

     17.43     16.62     16.01     17.43     16.01

Total capital

     19.90     19.09     18.49     19.90     18.49

Tier 1 leverage

     7.38     7.34     7.80     7.38     7.80

Common Equity Tier 1 capital

     17.36     16.55     15.93     17.36     15.93

 

[1]

Refer to Table Q for reconciliation to GAAP financial measures.

 

11


POPULAR, INC.

Financial Supplement to Third Quarter 2021 Earnings Release

Table B - Consolidated Statement of Operations

(Unaudited)

 

     Quarters ended     Variance     Quarter ended     Variance     Nine months ended  
                 Q3 2021           Q3 2021              

(In thousands, except per share information)

   30-Sep-21     30-Jun-21     vs. Q2 2021     30-Sep-20     vs. Q3 2020     30-Sep-21     30-Sep-20  

Interest income:

              

Loans

   $ 435,296     $ 433,781     $ 1,515     $ 431,286     $ 4,010     $ 1,303,726     $ 1,311,402  

Money market investments

     6,914       4,274       2,640       2,773       4,141       14,300       16,788  

Investment securities

     87,952       91,706       (3,754     79,142       8,810       265,348       243,938  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     530,162       529,761       401       513,201       16,961       1,583,374       1,572,128  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense:

              

Deposits

     27,029       28,060       (1,031     37,554       (10,525     85,290       142,435  

Short-term borrowings

     54       62       (8     416       (362     259       2,109  

Long-term debt

     13,686       13,837       (151     14,210       (524     41,518       42,587  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest expense

     40,769       41,959       (1,190     52,180       (11,411     127,067       187,131  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     489,393       487,802       1,591       461,021       28,372       1,456,307       1,384,997  

Provision for credit losses (benefit)

     (61,173     (17,015     (44,158     19,138       (80,311     (160,414     271,318  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for credit losses (benefit)

     550,566       504,817       45,749       441,883       108,683       1,616,721       1,113,679  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Service charges on deposit accounts

     41,312       40,153       1,159       36,849       4,463       121,085       108,671  

Other service fees

     80,445       76,382       4,063       69,879       10,566       227,455       186,736  

Mortgage banking activities

     8,307       7,448       859       (9,526     17,833       33,098       671  

Net gain on sale of debt securities

     23       —         23       41       (18     23       41  

Net (loss) gain, including impairment, on equity securities

     (401     1,565       (1,966     5,150       (5,551     1,585       4,869  

Net profit (loss) on trading account debt securities

     58       (47     105       20       38       (34     593  

Net (loss) gain on sale of loans, including valuation adjustments on loans held-for-sale

     —         (73     73       (2,198     2,198       (73     981  

Adjustments (expense) to indemnity reserves on loans sold

     2,038       1,668       370       4,183       (2,145     3,008       (1,770

Other operating income

     37,476       27,444       10,032       24,369       13,107       91,304       66,673  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest income

     169,258       154,540       14,718       128,767       40,491       477,451       367,465  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

              

Personnel costs

              

Salaries

     95,185       90,294       4,891       91,891       3,294       274,814       278,116  

Commissions, incentives and other bonuses

     25,892       26,374       (482     17,849       8,043       85,484       59,183  

Pension, postretirement and medical insurance

     13,893       13,289       604       10,639       3,254       38,106       31,669  

Other personnel costs, including payroll taxes

     22,677       24,247       (1,570     15,562       7,115       72,926       52,970  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total personnel costs

     157,647       154,204       3,443       135,941       21,706       471,330       421,938  

Net occupancy expenses

     24,896       24,562       334       25,907       (1,011     75,471       76,552  

Equipment expenses

     22,537       22,805       (268     24,088       (1,551     66,917       66,537  

Other taxes

     14,459       13,205       1,254       13,918       541       41,623       40,922  

Professional fees

              

Collections, appraisals and other credit related fees

     3,166       3,486       (320     2,862       304       9,972       9,640  

Programming, processing and other technology services

     69,221       67,152       2,069       64,876       4,345       202,739       187,082  

Legal fees, excluding collections

     2,535       2,367       168       2,707       (172     7,267       7,877  

Other professional fees

     29,787       28,148       1,639       26,029       3,758       85,832       85,493  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total professional fees

     104,709       101,153       3,556       96,474       8,235       305,810       290,092  

Communications

     6,133       6,005       128       5,694       439       18,971       17,222  

Business promotion

     18,116       16,511       1,605       14,664       3,452       47,148       41,142  

FDIC deposit insurance

     7,181       5,742       1,439       6,568       613       18,891       16,988  

Other real estate owned (OREO) (income) expenses

     (1,722     (4,299     2,577       (1,615     (107     (10,554     520  

Credit and debit card processing, volume, interchange and other expenses

     12,960       10,917       2,043       11,744       1,216       36,331       31,899  

Other operating expenses

              

 

12


Operational losses

     7,147        6,528        619       8,837        (1,690     21,571        21,339  

All other

     13,322        9,597        3,725       17,770        (4,448     35,283        51,409  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total other operating expenses

     20,469        16,125        4,344       26,607        (6,138     56,854        72,748  

Amortization of intangibles

     783        1,255        (472     1,076        (293     3,089        5,345  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total operating expenses

     388,168        368,185        19,983       361,066        27,102       1,131,881        1,081,905  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Income before income tax

     331,656        291,172        40,484       209,584        122,072       962,291        399,239  

Income tax expense

     83,542        73,093        10,449       41,168        42,374       233,466        68,893  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net income

   $ 248,114      $ 218,079      $ 30,035     $ 168,416      $ 79,698     $ 728,825      $ 330,346  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net income applicable to common stock

   $ 247,761      $ 217,726      $ 30,035     $ 168,064      $ 79,697     $ 727,766      $ 328,941  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net income per common share - basic

   $ 3.09      $ 2.67      $ 0.42     $ 2.01      $ 1.08     $ 8.89      $ 3.80  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net income per common share - diluted

   $ 3.09      $ 2.66      $ 0.43     $ 2.00      $ 1.09     $ 8.87      $ 3.80  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Dividends Declared per Common Share

   $ 0.45      $ 0.45      $ —       $ 0.40      $ 0.05     $ 1.30      $ 1.20  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

13


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table C - Consolidated Statement of Financial Condition

(Unaudited)

 

                       Variance  
                       Q3 2021 vs.  

(In thousands)

   30-Sep-21     30-Jun-21     30-Sep-20     Q2 2021  

Assets:

        

Cash and due from banks

   $ 538,973     $ 530,849     $ 565,202     $ 8,124  

Money market investments

     17,526,238       17,802,801       11,859,924       (276,563

Trading account debt securities, at fair value

     36,064       35,931       33,053       133  

Debt securities available-for-sale, at fair value

     24,391,226       22,335,167       21,177,839       2,056,059  

Debt securities held-to-maturity, at amortized cost

     85,655       88,801       93,163       (3,146

Less: Allowance for credit losses

     9,222       10,214       12,421       (992
  

 

 

   

 

 

   

 

 

   

 

 

 

Total debt securities held-to-maturity, net

     76,433       78,587       80,742       (2,154
  

 

 

   

 

 

   

 

 

   

 

 

 

Equity securities

     184,931       187,502       173,993       (2,571

Loans held-for-sale, at lower of cost or fair value

     91,313       85,315       102,760       5,998  

Loans held-in-portfolio

     29,089,241       29,286,225       29,586,348       (196,984

Less: Unearned income

     233,869       223,608       193,838       10,261  

Allowance for credit losses

     718,575       785,790       925,850       (67,215
  

 

 

   

 

 

   

 

 

   

 

 

 

Total loans held-in-portfolio, net

     28,136,797       28,276,827       28,466,660       (140,030
  

 

 

   

 

 

   

 

 

   

 

 

 

Premises and equipment, net

     487,526       486,443       510,473       1,083  

Other real estate

     76,828       73,272       100,592       3,556  

Accrued income receivable

     200,649       203,419       204,233       (2,770

Mortgage servicing rights, at fair value

     116,567       119,467       123,552       (2,900

Other assets

     1,634,839       1,750,151       1,816,706       (115,312

Goodwill

     671,122       671,122       671,122       —    

Other intangible assets

     19,657       20,440       23,518       (783
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 74,189,163     $ 72,657,293     $ 65,910,369     $ 1,531,870  
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity:

        

Liabilities:

        

Deposits:

        

Non-interest bearing

   $ 15,147,567     $ 14,920,887     $ 13,546,432     $ 226,680  

Interest bearing

     50,865,994       49,720,889       42,475,551       1,145,105  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     66,013,561       64,641,776       56,021,983       1,371,785  
  

 

 

   

 

 

   

 

 

   

 

 

 

Assets sold under agreements to repurchase

     86,470       90,925       106,028       (4,455

Other short-term borrowings

     —         —         100,000       —    

Notes payable

     1,176,943       1,176,620       1,201,396       323  

Other liabilities

     929,218       933,358       2,568,877       (4,140
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     68,206,192       66,842,679       59,998,284       1,363,513  
  

 

 

   

 

 

   

 

 

   

 

 

 

Stockholders’ equity:

        

Preferred stock

     22,143       22,143       22,143       —    

Common stock

     1,046       1,045       1,045       1  

Surplus

     4,569,641       4,506,659       4,521,689       62,982  

Retained earnings

     2,882,340       2,670,885       2,168,153       211,455  

Treasury stock

     (1,352,104     (1,290,427     (1,016,361     (61,677

Accumulated other comprehensive (loss) income, net of tax

     (140,095     (95,691     215,416       (44,404
  

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     5,982,971       5,814,614       5,912,085       168,357  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 74,189,163     $ 72,657,293     $ 65,910,369     $ 1,531,870  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

14


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table D - Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - QUARTER

(Unaudited)

 

    Quarters ended     Variance  
    30-Sep-21     30-Jun-21     30-Sep-20     Q3 2021 vs. Q2 2021     Q3 2021 vs. Q3 2020  

($ 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

  $ 41,279     $ 129.8       1.25   $ 38,136     $ 137.5       1.44   $ 31,337     $ 117.5       1.49   $ 3,143     ($ 7.7     (0.19 )%    $ 9,942     $ 12.3       (0.24 )% 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loans:

 

Commercial

    13,265       179.2       5.36       13,539       176.9       5.24       13,669       170.1       4.95       (274     2.3       0.12       (404     9.1       0.41  

Construction

    854       11.6       5.40       858       11.6       5.43       930       13.3       5.67       (4     —         (0.03     (76     (1.7     (0.27

Mortgage

    7,652       97.8       5.11       7,765       99.4       5.12       7,094       95.8       5.40       (113     (1.6     (0.01     558       2.0       (0.29

Consumer

    2,435       67.7       11.03       2,431       68.7       11.34       2,722       76.7       11.21       4       (1.0     (0.31     (287     (9.0     (0.18

Auto

    3,372       71.2       8.37       3,280       70.1       8.58       3,006       68.6       9.08       92       1.1       (0.21     366       2.6       (0.71

Lease financing

    1,317       19.7       5.99       1,262       19.0       6.01       1,122       17.1       6.08       55       0.7       (0.02     195       2.6       (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

    28,895       447.2       6.15       29,135       445.7       6.13       28,543       441.6       6.16       (240     1.5       0.02       352       5.6       (0.01
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest earning assets

  $ 70,174     $ 577.0       3.27   $ 67,271     $ 583.2       3.47   $ 59,880     $ 559.1       3.72   $ 2,903     $ (6.2     (0.20 )%    $ 10,294     $ 17.9       (0.45 )% 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for credit losses - loan portfolio

    (778         (801         (923         23           145      

Allowance for credit losses - investment securities

    (10         (10         (13         —             3      

Other non-interest earning assets

    3,901           3,906           4,176           (5         (275    
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

     

Total average assets

  $ 73,287         $ 70,366         $ 63,120         $ 2,921         $ 10,167      
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

     

Liabilities and Stockholders’ Equity:

 

Interest bearing deposits:

                             

NOW and money market

  $ 27,773     $ 7.9       0.11   $ 25,102     $ 8.0       0.13   $ 21,225     $ 9.1       0.17   $ 2,671     $ (0.1     (0.02 )%    $ 6,548     $ (1.2     (0.06 )% 

Savings

    15,621       6.4       0.16       15,384       6.9       0.18       13,103       8.3       0.25       237       (0.5     (0.02     2,518       (1.9     (0.09

Time deposits

    6,957       12.7       0.73       7,104       13.2       0.74       7,810       20.2       1.03       (147     (0.5     (0.01     (853     (7.5     (0.30
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits

    50,351       27.0       0.21       47,590       28.1       0.24       42,138       37.6       0.35       2,761       (1.1     (0.03     8,213       (10.6     (0.14

Borrowings

    1,284       13.7       4.28       1,316       13.9       4.24       1,358       14.6       4.31       (32     (0.2     0.04       (74     (0.9     (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing liabilities

    51,635       40.7       0.31       48,906       42.0       0.34       43,496       52.2       0.48       2,729       (1.3     (0.03     8,139       (11.5     (0.17
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest spread

        2.96         3.13         3.24         (0.17 )%          (0.28 )% 
     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

 

Non-interest bearing deposits

    14,955           14,920           12,806           35           2,149      

Other liabilities

    927           857           1,435           70           (508    

Stockholders’ equity

    5,770           5,683           5,383           87           387      
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

     

Total average liabilities and stockholders’ equity

  $ 73,287         $ 70,366         $ 63,120         $ 2,921         $ 10,167      
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

     

Net interest income / margin on a taxable equivalent basis (Non-GAAP)

 

  $ 536.3       3.04     $ 541.2       3.22     $ 506.9       3.37     ($ 4.9     (0.18 )%      $ 29.4       (0.33 )% 

Taxable equivalent adjustment

 

    46.9           53.4           45.8           (6.5         1.1    
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

   

Net interest income / margin non-taxable equivalent basis (GAAP)

 

  $ 489.4       2.77     $ 487.8       2.91     $ 461.0       3.06     $ 1.6       (0.14 )%      $ 28.3       (0.29 )% 
 

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

 

 

15


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table E - Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - YEAR-TO-DATE

(Unaudited)

     Nine months ended                    
     30-Sep-21     30-Sep-20     Variance  

($ amounts in millions)

   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

   $ 37,751     $ 399.8        1.42   $ 26,497     $ 364.7        1.84   $ 11,254     $ 35.1       (0.42 )% 
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Loans:

                    

Commercial

     13,475       535.1        5.32       13,122       522.1        5.31       353       13.0       0.01  

Construction

     874       35.1        5.39       909       39.6        5.83       (35     (4.5     (0.44

Mortgage

     7,761       295.6        5.08       7,054       281.2        5.32       707       14.4       (0.24

Consumer

     2,460       206.9        11.24       2,916       248.9        11.43       (456     (42.0     (0.19

Auto

     3,285       209.5        8.55       2,985       202.4        9.06       300       7.1       (0.51

Lease financing

     1,265       57.1        6.01       1,092       49.5        6.04       173       7.6       (0.03
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

     29,120       1,339.3        6.16       28,078       1,343.7        6.39       1,042       (4.4     (0.23
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total interest earning assets

   $ 66,871     $ 1,739.1        3.48   $ 54,575     $ 1,708.4        4.18   $ 12,296     $ 30.7       (0.70 )% 
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for credit losses - loan portfolio

     (822          (886          64      

Allowance for credit losses - investment securities

     (10          (13          3      

Other non-interest earning assets

     3,900            4,100            (200    
  

 

 

        

 

 

        

 

 

     

Total average assets

   $ 69,939          $ 57,776          $ 12,163      
  

 

 

        

 

 

        

 

 

     

Liabilities and Stockholders’ Equity:

                    

Interest bearing deposits:

                    

NOW and money market

   $ 25,201     $ 24.2        0.13   $ 18,956     $ 45.9        0.32   $ 6,245     ($ 21.7     (0.19 )% 

Savings

     15,127       20.3        0.18       11,899       30.2        0.34       3,228       (9.9     (0.16

Time deposits

     7,108       40.8        0.77       8,076       66.3        1.10       (968     (25.5     (0.33
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits

     47,436       85.3        0.24       38,931       142.4        0.49       8,505       (57.1     (0.25

Borrowings

     1,315       41.8        4.25       1,340       44.7        4.45       (25     (2.9     (0.20
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing liabilities

     48,751       127.1        0.35       40,271       187.1        0.62       8,480       (60.0     (0.27
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net interest spread

          3.13          3.56         (0.43 )% 
       

 

 

        

 

 

       

 

 

 

Non-interest bearing deposits

     14,428            10,945            3,483      

Other liabilities

     1,044            1,180            (136    

Stockholders’ equity

     5,716            5,380            336      
  

 

 

        

 

 

        

 

 

     

Total average liabilities and stockholders’ equity

   $ 69,939          $ 57,776          $ 12,163      
  

 

 

        

 

 

        

 

 

     

Net interest income / margin on a taxable equivalent basis (Non-GAAP)

     $ 1,612.0        3.23     $ 1,521.3        3.72     $ 90.7       (0.49 )% 

Taxable equivalent adjustment

       155.7            136.3            19.4    
    

 

 

        

 

 

        

 

 

   

Net interest income / margin non-taxable equivalent basis (GAAP)

     $ 1,456.3        2.92     $ 1,385.0        3.39     $ 71.3       (0.47 )% 
 

 

 

    

 

 

     

 

 

    

 

 

     

 

 

   

 

 

 

 

16


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table F - Mortgage Banking Activities and Other Service Fees

(Unaudited)

Mortgage Banking Activities

 

     Quarters ended     Variance     Nine months ended     Variance  

(In thousands)

   30-Sep-21     30-Jun-21     30-Sep-20     Q3 2021
vs.Q2 2021
    Q3 2021
vs.Q3 2020
    30-Sep-21     30-Sep-20     2021 vs.
2020
 

Mortgage servicing fees, net of fair value adjustments:

                

Mortgage servicing fees

   $ 9,376     $ 9,522     $ 12,966     $ (146   $ (3,590   $ 28,613     $ 32,992     $ (4,379

Mortgage servicing rights fair value adjustments

     (5,979     (6,239     (20,491     260       14,512       (11,706     (33,360     21,654  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total mortgage servicing fees, net of fair value adjustments

     3,397       3,283       (7,525     114       10,922       16,907       (368     17,275  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net gain on sale of loans, including valuation on loans held-for-sale

     6,084       5,197       10,916       887       (4,832     16,256       20,389       (4,133
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Trading account (loss) profit:

                

Unrealized losses on outstanding derivative positions

     —         —         (4     —         4       —         (4     4  

Realized (losses) gains on closed derivative positions

     (1,004     (866     (1,958     (138     954       632       (8,391     9,023  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total trading account (loss) profit

     (1,004     (866     (1,962     (138     958       632       (8,395     9,027  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Losses on repurchased loans, including interest advances

     (170     (166     (10,955     (4     10,785       (697     (10,955     10,258  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total mortgage banking activities

   $ 8,307     $ 7,448     $ (9,526   $ 859     $ 17,833     $ 33,098     $ 671     $ 32,427  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other Service Fees

 

     Quarters ended      Variance      Nine months ended      Variance  

(In thousands)

   30-Sep-21      30-Jun-21      30-Sep-20      Q3 2021
vs.Q2 2021
    Q3 2021
vs.Q3 2020
     30-Sep-21      30-Sep-20      2021 vs.
2020
 

Other service fees:

                      

Debit card fees

   $ 12,210      $ 12,458      $ 11,123      $ (248   $ 1,087      $ 36,245      $ 28,442      $ 7,803  

Insurance fees

     14,385        12,773        13,941        1,612       444        39,986        38,211        1,775  

Credit card fees

     33,409        32,726        27,077        683       6,332        94,826        68,025        26,801  

Sale and administration of investment products

     6,216        5,970        5,094        246       1,122        17,726        16,267        1,459  

Trust fees

     6,453        6,165        4,886        288       1,567        18,460        15,692        2,768  

Other fees

     7,772        6,290        7,758        1,482       14        20,212        20,099        113  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total other service fees

   $ 80,445      $ 76,382      $ 69,879      $ 4,063     $ 10,566      $ 227,455      $ 186,736      $ 40,719  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

 

17


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table G - Loans and Deposits

(Unaudited)

Loans - Ending Balances

 

                          Variance  

(In thousands)

   30-Sep-21      30-Jun-21      30-Sep-20      Q3 2021
vs.Q2 2021
    Q3 2021
vs.Q3 2020
 

Loans held-in-portfolio:

 

          

Commercial

   $ 13,303,671      $ 13,437,932      $ 13,620,069      $ (134,261   $ (316,398

Construction

     801,040        865,113        943,747        (64,073     (142,707

Lease financing

     1,348,679        1,297,928        1,153,108        50,751       195,571  

Mortgage

     7,539,152        7,678,478        7,924,441        (139,326     (385,289

Auto

     3,376,694        3,289,027        3,045,453        87,667       331,241  

Consumer

     2,486,136        2,494,139        2,705,692        (8,003     (219,556
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total loans held-in-portfolio

   $ 28,855,372      $ 29,062,617      $ 29,392,510      $ (207,245   $ (537,138
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Loans held-for-sale:

             

Commercial

   $ —        $ 1,700      $ 4,070      $ (1,700   $ (4,070

Construction

     —          7,000        —          (7,000     —    

Mortgage

     91,313        76,615        98,690        14,698       (7,377
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total loans held-for-sale

   $ 91,313      $ 85,315      $ 102,760      $ 5,998     $ (11,447
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total loans

   $ 28,946,685      $ 29,147,932      $ 29,495,270      $ (201,247   $ (548,585
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Deposits - Ending Balances

 

                          Variance  

(In thousands)

   30-Sep-21      30-Jun-21      30-Sep-20      Q3 2021 vs. Q2
2021
    Q3 2021 vs. Q3
2020
 

Demand deposits [1]

   $ 25,495,481      $ 24,497,918      $ 22,929,040      $ 997,563     $ 2,566,441  

Savings, NOW and money market deposits (non-brokered)

     32,867,805        32,452,829        24,696,244        414,976       8,171,561  

Savings, NOW and money market deposits (brokered)

     718,155        683,021        551,770        35,134       166,385  

Time deposits (non-brokered)

     6,906,509        6,979,349        7,664,361        (72,840     (757,852

Time deposits (brokered CDs)

     25,611        28,659        180,568        (3,048     (154,957
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total deposits

   $ 66,013,561      $ 64,641,776      $ 56,021,983      $ 1,371,785     $ 9,991,578  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

[1]

Includes interest and non-interest bearing demand deposits.

 

18


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table H - Loan Delinquency - Puerto Rico Operations

(Unaudited)

 

30-Sep-21

 

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

  $ 392     $ —       $ 396     $ 788     $ 149,639     $ 150,427     $ 396     $ —    

Commercial real estate:

               

Non-owner occupied

    661       17,383       60,143       78,187       2,268,441       2,346,628       60,143       —    

Owner occupied

    2,719       614       71,863       75,196       1,394,503       1,469,699       71,863       —    

Commercial and industrial

    1,641       576       51,456       53,673       3,618,266       3,671,939       50,992       464  

Construction

    —         —         14,877       14,877       112,602       127,479       14,877       —    

Mortgage

    197,955       76,345       896,208       1,170,508       5,204,541       6,375,049       354,555       541,653  

Leasing

    8,193       1,969       2,542       12,704       1,335,975       1,348,679       2,542       —    

Consumer:

               

Credit cards

    5,211       3,667       7,558       16,436       870,139       886,575       —         7,558  

Home equity lines of credit

    46       —         —         46       3,507       3,553       —         —    

Personal

    9,329       5,954       21,646       36,929       1,238,448       1,275,377       21,646       —    

Auto

    52,486       11,663       17,345       81,494       3,295,200       3,376,694       17,345       —    

Other

    393       76       14,621       15,090       108,492       123,582       14,512       109  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 279,026     $ 118,247     $ 1,158,655     $ 1,555,928     $ 19,599,753     $ 21,155,681     $ 608,871     $ 549,784  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

30-Jun-21

 

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

  $ 128     $ —       $ 397     $ 525     $ 151,258     $ 151,783     $ 397     $ —    

Commercial real estate:

               

Non-owner occupied

    32,749       —         72,378       105,127       1,888,302       1,993,429       72,378       —    

Owner occupied

    3,995       604       79,808       84,407       1,380,022       1,464,429       79,808       —    

Commercial and industrial

    2,314       682       65,727       68,723       3,952,675       4,021,398       65,120       607  

Construction

    —         3,080       14,877       17,957       124,990       142,947       14,877       —    

Mortgage

    164,779       73,492       995,175       1,233,446       5,281,711       6,515,157       370,653       624,522  

Leasing

    6,054       2,103       2,286       10,443       1,287,485       1,297,928       2,286       —    

Consumer:

               

Credit cards

    4,371       2,826       8,021       15,218       864,912       880,130       —         8,021  

Home equity lines of credit

    —         —         —         —         3,489       3,489       —         —    

Personal

    9,405       4,444       23,861       37,710       1,227,582       1,265,292       23,861       —    

Auto

    39,032       7,405       13,286       59,723       3,229,304       3,289,027       13,286       —    

Other

    214       97       14,288       14,599       108,427       123,026       14,123       165  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 263,041     $ 94,733     $ 1,290,104     $ 1,647,878     $ 19,500,157     $ 21,148,035     $ 656,789     $ 633,315  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

19


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

  $ 264     $ —       $ (1   $ 263     $ (1,619   $ (1,356   $ (1   $ —    

Commercial real estate:

               

Non-owner occupied

    (32,088     17,383       (12,235     (26,940     380,139       353,199       (12,235     —    

Owner occupied

    (1,276     10       (7,945     (9,211     14,481       5,270       (7,945     —    

Commercial and industrial

    (673     (106     (14,271     (15,050     (334,409     (349,459     (14,128     (143

Construction

    —         (3,080     —         (3,080     (12,388     (15,468     —         —    

Mortgage

    33,176       2,853       (98,967     (62,938     (77,170     (140,108     (16,098     (82,869

Leasing

    2,139       (134     256       2,261       48,490       50,751       256       —    

Consumer:

               

Credit cards

    840       841       (463     1,218       5,227       6,445       —         (463

Home equity lines of credit

    46       —         —         46       18       64       —         —    

Personal

    (76     1,510       (2,215     (781     10,866       10,085       (2,215     —    

Auto

    13,454       4,258       4,059       21,771       65,896       87,667       4,059       —    

Other

    179       (21     333       491       65       556       389       (56
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 15,985     $ 23,514     $ (131,449   $ (91,950   $ 99,596     $ 7,646     $ (47,918   $ (83,531
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

20


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table I - Loan Delinquency - Popular U.S. Operations

(Unaudited)

 

September 30, 2021

 

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

  $ —       $ 22,171     $ —       $ 22,171     $ 1,709,508     $ 1,731,679     $ —       $ —    

Commercial real estate:

               

Non-owner occupied

    2,569       4,632       374       7,575       2,029,514       2,037,089       374       —    

Owner occupied

    1,158       —         986       2,144       343,430       345,574       986       —    

Commercial and industrial

    804       1       1,428       2,233       1,548,403       1,550,636       1,427       1  

Construction

    14,978       —         —         14,978       658,583       673,561       —         —    

Mortgage

    1,369       2,833       14,488       18,690       1,145,413       1,164,103       14,488       —    

Consumer:

               

Credit cards

    —         —         —         —         26       26       —         —    

Home equity lines of credit

    690       76       5,941       6,707       73,042       79,749       5,941       —    

Personal

    588       544       748       1,880       111,598       113,478       748       —    

Other

    16       —         —         16       3,780       3,796       —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 22,172     $ 30,257     $ 23,965     $ 76,394     $ 7,623,297     $ 7,699,691     $ 23,964     $ 1  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

June 30, 2021

 

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

  $ —       $ —       $ 5,949     $ 5,949     $ 1,733,104     $ 1,739,053     $ 5,949     $ —    

Commercial real estate:

               

Non-owner occupied

    —         —         374       374       2,131,860       2,132,234       374       —    

Owner occupied

    907       639       193       1,739       338,445       340,184       193       —    

Commercial and industrial

    3,070       509       1,346       4,925       1,590,497       1,595,422       1,346       —    

Construction

    —         —         —         —         722,166       722,166       —         —    

Mortgage

    2,498       5,005       13,323       20,826       1,142,495       1,163,321       13,323       —    

Consumer:

               

Credit cards

    —         —         —         —         31       31       —         —    

Home equity lines of credit

    501       210       6,377       7,088       74,850       81,938       6,377       —    

Personal

    572       579       832       1,983       135,014       136,997       832       —    

Other

    —         —         —         —         3,236       3,236       —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 7,548     $ 6,942     $ 28,394     $ 42,884     $ 7,871,698     $ 7,914,582     $ 28,394     $ —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

21


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

  $ —       $ 22,171     $ (5,949   $ 16,222     $ (23,596   $ (7,374   $ (5,949   $ —    

Commercial real estate:

               

Non-owner occupied

    2,569       4,632       —         7,201       (102,346     (95,145     —         —    

Owner occupied

    251       (639     793       405       4,985       5,390       793       —    

Commercial and industrial

    (2,266     (508     82       (2,692     (42,094     (44,786     81       1  

Construction

    14,978       —         —         14,978       (63,583     (48,605     —         —    

Mortgage

    (1,129     (2,172     1,165       (2,136     2,918       782       1,165       —    

Consumer:

               

Credit cards

    —         —         —         —         (5     (5     —         —    

Home equity lines of credit

    189       (134     (436     (381     (1,808     (2,189     (436     —    

Personal

    16       (35     (84     (103     (23,416     (23,519     (84     —    

Other

    16       —         —         16       544       560       —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 14,624     $ 23,315     $ (4,429   $ 33,510     $ (248,401   $ (214,891   $ (4,430   $ 1  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

22


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table J - Loan Delinquency - Consolidated

(Unaudited)

 

30-Sep-21

 

Popular, Inc.

 
    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

  $ 392     $ 22,171     $ 396     $ 22,959     $ 1,859,147     $ 1,882,106     $ 396     $ —    

Commercial real estate:

               

Non-owner occupied

    3,230       22,015       60,517       85,762       4,297,955       4,383,717       60,517       —    

Owner occupied

    3,877       614       72,849       77,340       1,737,933       1,815,273       72,849       —    

Commercial and industrial

    2,445       577       52,884       55,906       5,166,669       5,222,575       52,419       465  

Construction

    14,978       —         14,877       29,855       771,185       801,040       14,877       —    

Mortgage

    199,324       79,178       910,696       1,189,198       6,349,954       7,539,152       369,043       541,653  

Leasing

    8,193       1,969       2,542       12,704       1,335,975       1,348,679       2,542       —    

Consumer:

               

Credit cards

    5,211       3,667       7,558       16,436       870,165       886,601       —         7,558  

Home equity lines of credit

    736       76       5,941       6,753       76,549       83,302       5,941       —    

Personal

    9,917       6,498       22,394       38,809       1,350,046       1,388,855       22,394       —    

Auto

    52,486       11,663       17,345       81,494       3,295,200       3,376,694       17,345       —    

Other

    409       76       14,621       15,106       112,272       127,378       14,512       109  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 301,198     $ 148,504     $ 1,182,620     $ 1,632,322     $ 27,223,050     $ 28,855,372     $ 632,835     $ 549,785  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

30-Jun-21

 

Popular, Inc.

 
    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

  $ 128     $ —       $ 6,346     $ 6,474     $ 1,884,362     $ 1,890,836     $ 6,346     $ —    

Commercial real estate:

               

Non-owner occupied

    32,749       —         72,752       105,501       4,020,162       4,125,663       72,752       —    

Owner occupied

    4,902       1,243       80,001       86,146       1,718,467       1,804,613       80,001       —    

Commercial and industrial

    5,384       1,191       67,073       73,648       5,543,172       5,616,820       66,466       607  

Construction

    —         3,080       14,877       17,957       847,156       865,113       14,877       —    

Mortgage

    167,277       78,497       1,008,498       1,254,272       6,424,206       7,678,478       383,976       624,522  

Leasing

    6,054       2,103       2,286       10,443       1,287,485       1,297,928       2,286       —    

Consumer:

               

Credit cards

    4,371       2,826       8,021       15,218       864,943       880,161       —         8,021  

Home equity lines of credit

    501       210       6,377       7,088       78,339       85,427       6,377       —    

Personal

    9,977       5,023       24,693       39,693       1,362,596       1,402,289       24,693       —    

Auto

    39,032       7,405       13,286       59,723       3,229,304       3,289,027       13,286       —    

Other

    214       97       14,288       14,599       111,663       126,262       14,123       165  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 270,589     $ 101,675     $ 1,318,498     $ 1,690,762     $ 27,371,855     $ 29,062,617     $ 685,183     $ 633,315  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

23


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

  $ 264     $ 22,171     $ (5,950   $ 16,485     $ (25,215   $ (8,730   $ (5,950   $ —    

Commercial real estate:

               

Non-owner occupied

    (29,519     22,015       (12,235     (19,739     277,793       258,054       (12,235     —    

Owner occupied

    (1,025     (629     (7,152     (8,806     19,466       10,660       (7,152     —    

Commercial and industrial

    (2,939     (614     (14,189     (17,742     (376,503     (394,245     (14,047     (142

Construction

    14,978       (3,080     —         11,898       (75,971     (64,073     —         —    

Mortgage

    32,047       681       (97,802     (65,074     (74,252     (139,326     (14,933     (82,869

Leasing

    2,139       (134     256       2,261       48,490       50,751       256       —    

Consumer:

               

Credit cards

    840       841       (463     1,218       5,222       6,440       —         (463

Home equity lines of credit

    235       (134     (436     (335     (1,790     (2,125     (436     —    

Personal

    (60     1,475       (2,299     (884     (12,550     (13,434     (2,299     —    

Auto

    13,454       4,258       4,059       21,771       65,896       87,667       4,059       —    

Other

    195       (21     333       507       609       1,116       389       (56
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 30,609     $ 46,829     $ (135,878   $ (58,440   $ (148,805   $ (207,245   $ (52,348   $ (83,530
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

24


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table K - Non-Performing Assets

(Unaudited)

 

                                        Variance  

(Dollars in thousands)

  30-Sep-21     As a % of
loans HIP by
category
    30-Jun-21     As a % of
loans HIP by
category
    30-Sep-20     As a % of
loans HIP by
category
    Q3 2021 vs.
Q2 2021
    Q3 2021 vs.
Q3 2020
 

Non-accrual loans:

               

Commercial

  $ 186,181       1.4   $ 225,565       1.7   $ 249,738       1.8   $ (39,384   $ (63,557

Construction

    14,877       1.9       14,877       1.7       30,583       3.2       —         (15,706

Lease financing

    2,542       0.2       2,286       0.2       3,217       0.3       256       (675

Mortgage

    369,043       4.9       383,976       5.0       384,544       4.9       (14,933     (15,501

Auto

    17,345       0.5       13,286       0.4       13,454       0.4       4,059       3,891  

Consumer

    42,847       1.7       45,193       1.8       52,832       2.0       (2,346     (9,985
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing loans held-in-portfolio

    632,835       2.2     685,183       2.4     734,368       2.5     (52,348     (101,533

Non-performing loans held-for-sale [1]

    —           8,700         4,070         (8,700     (4,070

Other real estate owned (“OREO”)

    76,828         73,272         100,592         3,556       (23,764
 

 

 

     

 

 

     

 

 

     

 

 

   

 

 

 

Total non-performing assets

  $ 709,663       $ 767,155       $ 839,030       $ (57,492   $ (129,367
 

 

 

     

 

 

     

 

 

     

 

 

   

 

 

 

Accruing loans past due 90 days or more [2]

  $ 549,785       $ 633,315       $ 1,212,947       $ (83,530   $ (663,162
 

 

 

     

 

 

     

 

 

     

 

 

   

 

 

 

Ratios:

               

Non-performing assets to total assets

    0.96       1.06       1.27      

Non-performing loans held-in-portfolio to loans held-in-portfolio

    2.19         2.36         2.50        

Allowance for credit losses to loans held-in-portfolio

    2.49         2.70         3.15        

Allowance for credit losses to non-performing loans, excluding loans held-for-sale

    113.55         114.68         126.07        

 

[1]

There were no non-performing loans held-for-sale as of September 30, 2021 (June 30, 2021 - $7 million in construction loans and $2 million commercial loans; September 30, 2020 - $4 million in commercial loans).

[2]

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. The balance of these loans includes $12 million at September 30, 2021, related to the rebooking of loans previously pooled into GNMA securities, in which the Corporation had a buy-back option as further described below (June 30, 2021 - $15 million; September 30, 2020 - $161 million). Under the GNMA program, issuers such as BPPR have the option but not the obligation to repurchase loans that are 90 days or more past due. For accounting purposes, these loans subject to the repurchase option are required to be reflected (rebooked) on the financial statements of BPPR with an offsetting liability. While the borrowers for our serviced GNMA portfolio benefited from the moratorium, the delinquency status of these loans continued to be reported to GNMA without considering the moratorium. These balances include $350 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of September 30, 2021 (June 30, 2021 - $363 million; September 30, 2020 - $318 million). Furthermore, the Corporation has approximately $53 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 (June 30, 2021 - $56 million; September 30, 2020 - $60 million).

 

25


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table L - Activity in Non-Performing Loans

(Unaudited)

Commercial loans held-in-portfolio:

 

                                                                                                                             
     Quarter ended
30-Sep-21
    Quarter ended
30-Jun-21
 

(In thousands)

   BPPR     Popular U.S.     Popular, Inc.     BPPR     Popular U.S.     Popular, Inc.  

Beginning balance NPLs

   $ 217,703     $ 7,862     $ 225,565     $ 200,863     $ 1,907     $ 202,770  

Plus:

            

New non-performing loans

     7,454       1,039       8,493       39,657       7,570       47,227  

Advances on existing non-performing loans

     —         10       10       —         1       1  

Less:

            

Non-performing loans transferred to OREO

     (2,069     —         (2,069     (2,346     —         (2,346

Non-performing loans charged-off

     (8,617     —         (8,617     (1,515     (624     (2,139

Loans returned to accrual status / loan collections

     (31,077     (6,124     (37,201     (18,956     (992     (19,948
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ 183,394     $ 2,787     $ 186,181     $ 217,703     $ 7,862     $ 225,565  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Construction loans held-in-portfolio:

 

 

     Quarter ended
30-Sep-21
    Quarter ended
30-Jun-21
 

(In thousands)

   BPPR     Popular U.S.     Popular, Inc.     BPPR     Popular U.S.     Popular, Inc.  

Beginning balance NPLs

   $ 14,877     $ —       $ 14,877     $ 14,877     $ 7,523     $ 22,400  

Less:

            

Non-performing loans charged-off

     —         —         —         —         (523     (523

Loans transferred to held-for-sale

     —         —         —         —         (7,000     (7,000
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ 14,877     $ —       $ 14,877     $ 14,877     $ —       $ 14,877  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Mortgage loans held-in-portfolio:

 

 

     Quarter ended
30-Sep-21
    Quarter ended
30-Jun-21
 

(In thousands)

   BPPR     Popular U.S.     Popular, Inc.     BPPR     Popular U.S.     Popular, Inc.  

Beginning balance NPLs

   $ 370,653     $ 13,323     $ 383,976     $ 390,781     $ 14,793     $ 405,574  

Plus:

            

New non-performing loans

     38,606       4,662       43,268       43,432       4,774       48,206  

Advances on existing non-performing loans

     —         2       2       —         11       11  

Less:

            

Non-performing loans transferred to OREO

     (8,984     —         (8,984     (8,257     —         (8,257

Non-performing loans charged-off

     (1,023     —         (1,023     (4,297     —         (4,297

Loans returned to accrual status / loan collections

     (44,697     (3,499     (48,196     (51,006     (6,255     (57,261
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ 354,555     $ 14,488     $ 369,043     $ 370,653     $ 13,323     $ 383,976  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

26


Total non-performing loans held-in-portfolio (excluding consumer):

 

                                                                                                                             
     Quarter ended
30-Sep-21
    Quarter ended
30-Jun-21
 

(In thousands)

   BPPR     Popular U.S.     Popular, Inc.     BPPR     Popular U.S.     Popular, Inc.  

Beginning balance NPLs

   $ 603,233     $ 21,185     $ 624,418     $ 606,521     $ 24,223     $ 630,744  
Plus:             

New non-performing loans

     46,060       5,701       51,761       83,089       12,344       95,433  

Advances on existing non-performing loans

     —         12       12       —         12       12  
Less:             

Non-performing loans transferred to OREO

     (11,053     —         (11,053     (10,603     —         (10,603

Non-performing loans charged-off

     (9,640     —         (9,640     (5,812     (1,147     (6,959

Loans returned to accrual status / loan collections

     (75,774     (9,623     (85,397     (69,962     (7,247     (77,209

Loans transferred to held-for-sale

     —         —         —         —         (7,000     (7,000
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ 552,826     $ 17,275     $ 570,101     $ 603,233     $ 21,185     $ 624,418  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

27


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table M - Allowance for Credit Losses, Net Charge-offs and Related Ratios

(Unaudited)

 

     Quarters ended  

(Dollars in thousands)

   30-Sep-21     30-Jun-21     30-Sep-20  

Balance at beginning of period - loans held-in-portfolio

   $ 785,790     $ 800,797     $ 918,434  

Provision for credit losses (benefit)

     (58,645     (17,500     19,452  

Initial allowance for credit losses - PCD Loans

     253       1,202       4,823  
  

 

 

   

 

 

   

 

 

 
     727,398       784,499       942,709  
  

 

 

   

 

 

   

 

 

 

Net loans charged-off (recovered):

      

BPPR

      

Commercial

     4,357       (9,877     (1,959

Construction

     (2,223     (479     (156

Lease financing

     304       393       (329

Mortgage

     (2,111     935       1,964  

Consumer

     9,009       7,545       14,249  
  

 

 

   

 

 

   

 

 

 

Total BPPR

     9,336       (1,483     13,769  
  

 

 

   

 

 

   

 

 

 

Popular U.S.

      

Commercial

     (463     (413     309  

Construction

     —         93       —    

Mortgage

     (48     (423     (5

Consumer

     (2     935       2,786  
  

 

 

   

 

 

   

 

 

 

Total Popular U.S.

     (513     192       3,090  
  

 

 

   

 

 

   

 

 

 

Total loans charged-off (recovered) - Popular, Inc.

     8,823       (1,291     16,859  
  

 

 

   

 

 

   

 

 

 

Balance at end of period - loans held-in-portfolio

   $ 718,575     $ 785,790     $ 925,850  
  

 

 

   

 

 

   

 

 

 

Balance at beginning of period - unfunded commitments

   $ 9,936     $ 9,569     $ 6,717  

Provision for credit losses (benefit)

     (1,536     367       6,578  
  

 

 

   

 

 

   

 

 

 

Balance at end of period - unfunded commitments [1]

   $ 8,400     $ 9,936     $ 13,295  
  

 

 

   

 

 

   

 

 

 

POPULAR, INC.

      

Annualized net charge-offs (recoveries) to average loans held-in-portfolio

     0.12     (0.02 )%      0.24

Provision for credit losses (benefit) - loan portfolios to net charge-offs

     N.M.       N.M.       115.38

BPPR

      

Annualized net charge-offs (recoveries) to average loans held-in-portfolio

     0.18     (0.03 )%      0.26

Provision for credit losses (benefit) - loan portfolios to net charge-offs

     N.M.       N.M.       55.79

Popular U.S.

      

Annualized net charge-offs to average loans held-in-portfolio

     (0.03 )%      0.01     0.16

Provision for credit losses (benefit) - loan portfolios to net charge-offs

     N.M.       N.M.       380.91

N.M. - Not meaningful.

[1]

Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

 

28


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table N - Allowance for Credit Losses “ACL”- Loan Portfolios - CONSOLIDATED

(Unaudited)

 

                                                                                                                                         

30-Sep-21

 

(Dollars in thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

Total ACL

   $ 234,814     $ 9,850     $ 170,378     $ 11,634     $ 291,899     $ 718,575  

Total loans held-in-portfolio

   $ 13,303,671     $ 801,040     $ 7,539,152     $ 1,348,679     $ 5,862,830     $ 28,855,372  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     1.77     1.23     2.26     0.86     4.98     2.49
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

30-Jun-21

 

(Dollars in thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

Total ACL

   $ 271,144     $ 11,256     $ 182,619     $ 17,551     $ 303,220     $ 785,790  

Total loans held-in-portfolio

   $ 13,437,932     $ 865,113     $ 7,678,478     $ 1,297,928     $ 5,783,166     $ 29,062,617  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     2.02     1.30     2.38     1.35     5.24     2.70
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Variance

 

(Dollars in thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

Total ACL

   $ (36,330   $ (1,406   $ (12,241   $ (5,917   $ (11,321   $ (67,215

Total loans held-in-portfolio

   $ (134,261   $ (64,073   $ (139,326   $ 50,751     $ 79,664     $ (207,245
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

29


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table O - Allowance for Credit Losses “ACL”- Loan Portfolios - PUERTO RICO OPERATIONS

(Unaudited)

 

30-Sep-21

 

Puerto Rico

 

(In thousands)

   Commercial     Construction     Mortgage     Lease financing     Consumer     Total  

ACL

   $ 168,504     $ 1,911     $ 155,062     $ 11,634     $ 279,667     $ 616,778  

Loans held-in-portfolio

   $ 7,638,693     $ 127,479     $ 6,375,049     $ 1,348,679     $ 5,665,781     $ 21,155,681  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     2.21     1.50     2.43     0.86     4.94     2.92
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

30-Jun-21

 

Puerto Rico

 

(In thousands)

   Commercial     Construction     Mortgage     Lease financing     Consumer     Total  

ACL

   $ 186,784     $ 1,220     $ 166,808     $ 17,551     $ 289,490     $ 661,853  

Loans held-in-portfolio

   $ 7,631,039     $ 142,947     $ 6,515,157     $ 1,297,928     $ 5,560,964     $ 21,148,035  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     2.45     0.85     2.56     1.35     5.21     3.13
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Variance

 

(In thousands)

   Commercial     Construction     Mortgage     Lease financing     Consumer     Total  

ACL

   $ (18,280   $ 691     $ (11,746   $ (5,917   $ (9,823   $ (45,075

Loans held-in-portfolio

   $ 7,654     $ (15,468   $ (140,108   $ 50,751     $ 104,817     $ 7,646  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

30


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table P - Allowance for Credit Losses “ACL”- Loan Portfolios - POPULAR U.S. OPERATIONS

(Unaudited)

 

30-Sep-21

 

Popular U.S.

 

(In thousands)

   Commercial     Construction     Mortgage     Consumer     Total  

ACL

   $ 66,310     $ 7,939     $ 15,316     $ 12,232     $ 101,797  

Loans held-in-portfolio

   $ 5,664,978     $ 673,561     $ 1,164,103     $ 197,049     $ 7,699,691  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     1.17     1.18     1.32     6.21     1.32
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

30-Jun-21

 

Popular U.S.

 

(In thousands)

   Commercial     Construction     Mortgage     Consumer     Total  

ACL

   $ 84,360     $ 10,036     $ 15,811     $ 13,730     $ 123,937  

Loans held-in-portfolio

   $ 5,806,893     $ 722,166     $ 1,163,321     $ 222,202     $ 7,914,582  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     1.45     1.39     1.36     6.18     1.57
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Variance

 

(In thousands)

   Commercial     Construction     Mortgage     Consumer     Total  

ACL

   $ (18,050   $ (2,097   $ (495   $ (1,498   $ (22,140

Loans held-in-portfolio

   $ (141,915   $ (48,605   $ 782     $ (25,153   $ (214,891

 

31


Popular, Inc.

Financial Supplement to Third Quarter 2021 Earnings Release

Table Q - Reconciliation to GAAP Financial Measures

(Unaudited)

 

(In thousands, except share or per share information)

   30-Sep-21     30-Jun-21     30-Sep-20  

Total stockholders’ equity

   $ 5,982,971     $ 5,814,614     $ 5,912,085  

Less: Preferred stock

     (22,143     (22,143     (22,143

Less: Goodwill

     (671,122     (671,122     (671,122

Less: Other intangibles

     (19,657     (20,440     (23,518
  

 

 

   

 

 

   

 

 

 

Total tangible common equity

   $ 5,270,049     $ 5,100,909     $ 5,195,302  
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 74,189,163     $ 72,657,293     $ 65,910,369  

Less: Goodwill

     (671,122     (671,122     (671,122

Less: Other intangibles

     (19,657     (20,440     (23,518
  

 

 

   

 

 

   

 

 

 

Total tangible assets

   $ 73,498,384     $ 71,965,731     $ 65,215,729  
  

 

 

   

 

 

   

 

 

 

Tangible common equity to tangible assets

     7.17     7.09     7.97

Common shares outstanding at end of period

     79,841,564       80,656,480       84,219,464  

Tangible book value per common share

   $ 66.01     $ 63.24     $ 61.69  
  

 

 

   

 

 

   

 

 

 
     Quarterly average  

Total stockholders’ equity [1]

   $ 5,769,545     $ 5,683,325     $ 5,383,126  

Less: Preferred Stock

     (22,143     (22,143     (22,143

Less: Goodwill

     (671,121     (671,121     (671,121

Less: Other intangibles

     (20,132     (21,350     (24,161
  

 

 

   

 

 

   

 

 

 

Total tangible equity

   $ 5,056,149     $ 4,968,711     $ 4,665,701  

Return on average tangible common equity

     19.44     17.58     14.32
  

 

 

   

 

 

   

 

 

 

 

[1]

Average balances exclude unrealized gains or losses on debt securities available-for-sale.

CONTACTS:

Popular, Inc.

Investor Relations:

Paul J. Cardillo, 212-417-6721

Investor Relations Officer

pcardillo@popular.com

or

Media Relations:

MC González Noguera, 917-804-5253

Executive Vice President and Chief Communications & Public Affairs Officer

mc.gonzalez@popular.com

 

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