EX-99.1 2 d621814dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Popular, Inc. Announces First Quarter 2022 Financial Results

 

 

Net income of $211.7 million in Q1 2022, compared to net income of $206.1 million in Q4 2021.

 

 

Net interest margin of 2.75% in Q1 2022, compared to 2.78% in Q4 2021; net interest margin on a taxable equivalent basis of 3.05% in Q1 2022, compared to 3.02% in Q4 2021.

 

 

Credit Quality:

 

   

Non-performing loans held-in-portfolio (“NPLs”) decreased by $28.0 million from Q4 2021; NPLs to loans ratio at 1.8% vs. 1.9% in Q4 2021;

 

   

Net charge-offs (“NCOs”) were $3.8 million, compared to a net recovery of $7.9 million in Q4 2021; NCOs at 0.05% of average loans held-in-portfolio vs. (0.11%) in Q4 2021;

 

   

Allowance for credit losses (“ACL”) to loans held-in-portfolio at 2.29% vs. 2.38% in Q4 2021; and

 

   

ACL to NPLs at 130.4% vs. 126.9% in Q4 2021.

 

 

Common Equity Tier 1 ratio of 16.26%, Common Equity per Share of $60.78 and Tangible Book Value per Share of $51.16 at March 31, 2022.

SAN JUAN, Puerto Rico — (BUSINESS WIRE) — Popular, Inc. (the “Corporation,” “Popular,” “we,” “us,” “our”) (NASDAQ:BPOP) reported net income of $211.7 million for the quarter ended March 31, 2022, compared to net income of $206.1 million for the quarter ended December 31, 2021.

Ignacio Alvarez, President and Chief Executive Officer, said: “We had a solid quarter with net income of $212 million, building on the momentum of our record 2021 results. We saw broad-based loan growth, across geographies and most business lines, while maintaining strong asset quality metrics. Net charge-offs were five basis points for the quarter. We continued to see deposit growth from our private sector clients. Our deposit franchise in Puerto Rico will be an even greater source of strength as interest rates rise as expected. Our capital ratios remained strong, allowing us to continue to return capital to our shareholders and increase our common stock dividend. Going forward, we remain optimistic about the economic outlook, yet cognizant of the possible challenges to the macroeconomic environment resulting from the war in Ukraine, inflation and the evolving health situation.

I am thankful to our team who have continued to perform at a high level and deliver results under a myriad of changing conditions. Finally, our thoughts and prayers are with the people of Ukraine as they suffer the horrible consequences of the war.”

 

1


Earnings Highlights

 

(Unaudited)

   Quarters ended  

(Dollars in thousands, except per share information)

   31-Mar-22     31-Dec-21     31-Mar-21  

Net interest income

   $ 494,312     $ 501,283     $ 479,112  

Provision for credit losses (benefit)

     (15,500     (33,050     (82,226
  

 

 

   

 

 

   

 

 

 

Net interest income after provision for credit losses (benefit)

     509,812       534,333       561,338  

Other non-interest income

     154,692       164,677       153,653  

Operating expenses

     402,339       417,394       375,528  
  

 

 

   

 

 

   

 

 

 

Income before income tax

     262,165       281,616       339,463  

Income tax expense

     50,479       75,552       76,831  
  

 

 

   

 

 

   

 

 

 

Net income

   $ 211,686     $ 206,064     $ 262,632  
  

 

 

   

 

 

   

 

 

 

Net income applicable to common stock

   $ 211,333     $ 205,711     $ 262,279  
  

 

 

   

 

 

   

 

 

 

Net income per common share - Basic

   $ 2.69     $ 2.59     $ 3.13  
  

 

 

   

 

 

   

 

 

 

Net income per common share - Diluted

   $ 2.69     $ 2.58     $ 3.12  
  

 

 

   

 

 

   

 

 

 

 

2


Significant Events

Entry into Asset Purchase Agreement with Evertec; Renegotiation and Extension of Commercial Agreements

On February 24, 2022, the Corporation and Banco Popular de Puerto Rico (“BPPR”), entered into an Asset Purchase Agreement (the “Purchase Agreement”), with Evertec, Inc. (“EVERTEC”) and Evertec Group, LLC, a wholly owned subsidiary of EVERTEC (“EVERTEC Group”), pursuant to which BPPR will purchase from EVERTEC Group certain information technology and related assets currently used by EVERTEC to service certain of BPPR’s key channels (the “Acquired Assets”) under the Amended and Restated Master Service Agreement (the “MSA”), dated September 30, 2010, among the Corporation, BPPR and EVERTEC. In connection with the purchase of the Acquired Assets, BPPR will assume certain liabilities relating to the Acquired Assets (together with the purchase of the Acquired Assets, the “Transaction”). The Transaction is expected to close on or about June 30, 2022, subject to the satisfaction of certain closing conditions.

In connection with the consummation of the Transaction (the “Closing”), the Corporation will transfer to EVERTEC Group, as consideration for the Transaction, shares of EVERTEC’s common stock (“EVERTEC Common Stock”) having an aggregate value of approximately $197 million, subject to certain purchase price adjustments, based on a price per share of $42.84, which value was determined at the time of entering into the Purchase Agreement. As a result of this transfer, the Corporation expects that its percentage ownership of the outstanding shares of EVERTEC Common Stock will be reduced from its current level, which is approximately 16.2%, to approximately 10.5% immediately following the Closing. As part of the transaction, the Corporation has also agreed to reduce its voting interest in EVERTEC below 4.5%, whether through selling shares of EVERTEC common stock or a conversion of such shares into non-voting preferred stock. The Corporation expects to sell down its stake in EVERTEC below 4.5% following the closing and intends to return to shareholders, via common stock repurchases, the after-tax gains resulting from such sale, subject to the receipt of regulatory approvals.

Additionally, as part of the Closing, the Corporation and BPPR will also enter with EVERTEC into, among other commercial agreements, a Second Amended and Restated Master Services Agreement (the “Second A&R MSA”), pursuant to which EVERTEC Group will continue to provide various key information technology and various transaction processing services to the Corporation, BPPR and their respective subsidiaries, which services are provided under the currently effective MSA.

Capital Actions

On March 1, 2022 the Corporation announced that on February 28, 2022 it entered into an accelerated share repurchase agreement (the “ASR Agreement”) to repurchase an aggregate of $400 million of Popular’s common stock. Popular previously disclosed in a press release on January 12, 2022 its plan to repurchase up to $500 million of its common stock as part of its planned capital actions for 2022.

Under the terms of the ASR Agreement, on March 2, 2022 the Corporation made an initial payment of $400 million and received an initial delivery of 3,483,942 shares of Popular’s Common Stock (the “Initial Shares”).

The transaction was accounted for as a treasury stock transaction. Furthermore, as a result of the receipt of the Initial Shares, the Corporation recognized in shareholders’ equity approximately $320 million in treasury stock and $80 million as a reduction of capital surplus. Upon the final settlement of the ASR Agreement, the Corporation expects to further adjust its treasury stock and capital surplus accounts to reflect the final delivery or receipt of cash or shares, which will depend on the volume-weighted average price of the Corporation’s common stock during the term of the ASR Agreement, less a discount. The final settlement of the ASR Agreement is expected to occur no later than the third quarter of 2022.

Popular expects to execute during the remainder of the year, in the open market or in privately negotiated transactions, the remaining $100 million in common stock repurchases contemplated as part of the Corporation’s 2022 capital actions announced in January 2022. The timing and exact amount of such additional repurchases will be subject to various factors, including market conditions and the Corporation’s capital position and financial performance.

On February 23, 2022, the Corporation’s Board of Directors approved a quarterly cash dividend of $0.55 per share, an increase from the previous $0.45 per share quarterly dividend, on its outstanding common stock. The dividend was paid on April 1, 2022 to shareholders of record at the close of business on March 15, 2022.

 

3


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 for the quarter ended March 31, 2022, 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 March 31, 2022 was $494.3 million compared to $501.3 million in the previous quarter, a decrease of $7.0 million. Net interest income, on a taxable equivalent basis, for the first quarter of 2022 was $548.1 million, an increase of $4.2 million when compared to $543.9 million in the last quarter of 2021. The increase in the taxable equivalent adjustment results from BPPR’s higher volume of tax-free investment securities in Puerto Rico.

Net interest margin for the quarter was 2.75% compared to 2.78% in the last quarter of 2021. On a taxable equivalent basis, net interest margin for the first quarter of 2022 was 3.05% compared to 3.02% in the fourth quarter of 2021. The main variances in net interest income on a taxable equivalent basis were:

 

   

higher interest income from money markets, trading and investment securities by $18.4 million resulting from a higher volume by $540 million, in turn driven by an increase in the average U.S. Treasury portfolio by $4.2 billion, partially offset by lower volume of money market investments by $3.1 billion and higher yields by 17 basis points driven by higher market rates and the composition of the portfolio; and

 

   

higher interest income from consumer loans mainly driven by a higher average volume in both P.R. and the U.S.

partially offset by:

 

   

lower interest income from commercial loans by $16.5 million resulting from lower income form loans under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) by $12.6 million, lower interest income from the repayment of purchased credit deteriorated (“PCD”) loans and the impact of 2 fewer days in the quarter or approximately $4.1 million. This negative effect was offset in part by an increase of $346 million in the average volume of commercial loans, at both P.R. and the U.S segments, for a $4.4 million benefit;

 

   

a decrease in auto and lease financing income of $1.6 million mainly driven by two fewer days in the quarter when compared to the prior quarter, partially offset by higher loan volume by $62 million.

The Corporation recognized income of $10.6 million related to loans issued under the SBA PPP, compared to $23.2 million in the previous quarter. These loans carried a yield of approximately 17.01% in this quarter, including the amortization of fees received under the program, compared to 17.86% last quarter. This portfolio of loans issued under the SBA PPP declined by $141 million in BPPR to a balance of $114 million and declined by $39 million in Popular Bank (“PB” or “Popular U.S.”) to a balance of $59 million. On March 31, 2022, the portfolio at BPPR and PB had a remaining aggregate balance of unamortized fees of $8.1 million.

Net interest income for the BPPR segment amounted to $415.2 million for the first quarter of 2022, compared to $425.9 million for the fourth quarter of 2021. Net interest margin for the first quarter of 2022 was 2.67% a decrease of 6 basis points when compared to 2.73% for the previous quarter. As discussed above, net interest margin was negatively impacted by lower SBA PPP income and lower payment of PCD loans, partially offset by the positive impact of higher investment securities balances. The cost of interest-bearing and total deposits remained unchanged from the previous quarter at 0.16% and 0.12%, respectively.

Net interest income for PB was $86.5 million for the quarter ended March 31, 2022, compared to $83.2 million during the previous quarter. Net interest margin for the quarter was 3.56% compared to 3.47% the previous quarter. The increase in net interest income results mainly from a higher volume of commercial and consumer loans. The lower cost on deposits also resulted in a benefit to PB’s net interest margin. The cost of interest-bearing deposits was 0.46% or 6 basis points lower than the 0.52% reported in the last quarter of 2021, while the total cost of deposits, including demand deposits, was 0.36%, compared to 0.40% in the previous quarter.

 

4


Non-interest income

Non-interest income decreased by $10.0 million to $154.7 million for the quarter ended March 31, 2022, compared to $164.7 million for the quarter ended December 31, 2021. The variance in non-interest income was primarily driven by:

 

   

lower other service fees by $6.7 million, mainly due to lower insurance fees by $3.7 million principally resulting from contingent insurance commissions that are typically recognized during the fourth quarter and lower credit card fees by $2.0 million mainly in interchange income due to seasonal purchasing activity in the previous quarter; and

 

   

lower income from mortgage banking activities by $4.2 million mainly due to a loss on sale of loans and securitization activities of $1.5 million, compared to a gain of $5.4 in the previous quarter due to a lower volume of transactions and lower market rates, partially offset by higher realized gains on closed derivative positions by $3.4 million;

partially offset by:

 

   

higher other operating income by $4.9 million mainly due to higher earnings from the portfolio of equity method investments and higher income from the sale of auto rental units.

Refer to Table B for further details.

Operating expenses

Operating expenses for the first quarter of 2022 totaled $402.3 million, a decrease of $15.1 million when compared to the fourth quarter of 2021. The variance in operating expenses was driven primarily by:

 

   

lower net occupancy expenses by $2.0 million due to lower rent and electricity expenses;

 

   

lower business promotion expenses by $10.8 million mainly due to lower advertising and promotion expenses by $5.7 million a result of seasonal activities during the fourth quarter of 2021, lower donations by $2.8 million and lower credit cards rewards expense as a result of transactional volumes by $1.7 million;

 

   

lower other operating expenses by $11.4 million due to the effect during the previous quarter of an impairment charge on undeveloped properties by $5.0 million and lower sundry losses by $5.0 million mainly related to the termination of a white label credit card contract during prior quarter; and

 

   

lower amortization of intangibles by $5.2 million due to an impairment write-down of a trademark during the fourth quarter of 2021.

partially offset by:

 

   

higher personnel cost by $6.5 million mainly due to higher performance shares and restricted stock expenses by $6.3 million; higher payroll taxes by $5.1 million; partially offset by $3.1 million in lower incentives related to the profit-sharing plan which is tied to the Corporation’s financial performance;

 

   

higher professional fees by $3.4 million mainly due to higher advisory expenses related to corporate initiatives; and

 

   

higher credit and debit card processing and other expenses by $3.8 million due in part to lower volume incentives.

Full-time equivalent employees were 8,492 as of March 31, 2022, compared to 8,351 as of December 31, 2021.

 

5


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

Income taxes

For the quarter ended March 31, 2022, the Corporation recorded an income tax expense of $50.5 million, compared to $75.6 million for the previous quarter. The decrease in income tax expense was mainly attributable to lower income before tax and higher exempt income during the first quarter of 2022. The effective tax rate (“ETR”) for the first quarter of 2022 was 19.3%, compared to 27% in the fourth quarter of 2021. The ETR of the Corporation is impacted by the composition and source of its taxable income. The Corporation expects its ETR for the year 2022 to be within a range from 18% to 20%.

Credit Quality

During the first quarter of 2022, the Corporation continued to exhibit strong credit quality trends and low credit costs with low level of NCOs and decreasing NPLs. We continue to closely monitor changes on borrower performance and in the pace of economic recovery, given the rising interest rate environment and geopolitical uncertainty. 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 first quarter of 2022:

 

 

At March 31, 2022, total non-performing loans held-in-portfolio decreased by $28.0 million from December 31, 2021. BPPR’s NPLs decreased by $27.5 million, mostly driven by lower mortgage NPLs by $27.3 million. The mortgage NPLs decrease was mainly due to the combined effects of collection efforts, increased foreclosure activity and the sustained low levels of early delinquency compared with pre-pandemic trends. PB’s NPLs remained flat quarter-over-quarter. At March 31, 2022, the ratio of NPLs to total loans held-in-portfolio was 1.8%, compared to 1.9% in the fourth quarter of 2021.

 

 

Inflows of NPLs held-in-portfolio, excluding consumer loans, remained flat quarter-over-quarter. In BPPR, total inflows increased by $5.3 million, mostly driven by higher commercial and mortgage inflows of $3.8 million and $2.0 million, respectively. Mortgage inflows continued trending lower than pre-pandemic levels. NPL inflows at PB decreased by $4.9 million during the quarter, mostly driven by a decrease of $7.2 million in mortgage inflows, as the prior quarter included the impact of loans that did not resume payment after the end of COVID-19-related payment deferral periods.

 

 

NCOs amounted to $3.8 million, an unfavorable variance of $11.7 million when compared to the fourth quarter. BPPR‘s NCOs increased by $13.1 million, as the prior quarter included recoveries from the resolution of certain commercial non-performing loans. During the first quarter of 2022, the Corporation’s ratio of annualized net charge-offs to average loans held-in-portfolio was 0.05%, compared to (0.11%) in the fourth quarter of 2021. Refer to Table M for further information on net charge-offs and related ratios.

 

 

At March 31, 2022, the ACL decreased by $17.6 million, or 2.5%, from the fourth quarter of 2021 to $677.8 million. The ACL incorporated updated macroeconomic scenarios for Puerto Rico and the United States. Given that any one economic outlook is inherently uncertain, the Corporation leverages multiple scenarios to estimate its ACL. The baseline scenario continues to be assigned the highest probability, followed by the pessimistic scenario.

 

 

The current baseline forecast continues to show a favorable economic scenario. 2022 annualized GDP growth of 3.5% and 3.7% is expected for Puerto Rico and United States, respectively. This represents a reduction for both Puerto Rico and United States since last quarter’s GDP growth forecast was 4.0% and 4.6%, respectively. Changes in assumptions related to fiscal stimulus and higher energy prices contributed to the reduction. The 2022 average unemployment rate is forecasted at 7.3% and 3.6% for Puerto Rico and United States, respectively. This is consistent with previous expectations for both regions. Puerto Rico’s unemployment rate forecast benefits from the Bureau of Labor Statistics (“BLS”) revisions that show a stronger than expected labor market.

 

 

In BPPR, the ACL decreased by $17.6 million, mainly driven by reductions in qualitative reserves due to substantial improvements in employment levels in Puerto Rico. Recent updates by the BLS show that employment levels in Puerto Rico have already surpassed pre-pandemic levels. This contributed to a lower commercial, mortgage and consumer loans ACL. The decrease in qualitative reserves was partially offset by the impact of higher loan volumes and changes in the macroeconomic scenario. The ACL for the PB segment remained flat quarter-over-quarter as higher loan volumes in both the commercial real estate and consumer portfolios offset reductions in qualitative reserves. The ratio of the allowance for credit losses to loans held-in-portfolio was 2.29% in the first quarter of 2022, compared to 2.38% in the previous quarter. The ratio of the allowance for credit losses to NPLs held-in-portfolio stood at 130.4%, compared to 126.9% in the previous quarter.

 

6


 

The provision for credit losses for the loan portfolios for the first quarter of 2022 reflected a benefit of $14.4 million, compared to a benefit of $31.4 million in the previous quarter, reflecting the previously mentioned changes in the allowance for credit losses. The provision for the BPPR segment was a benefit of $12.7 million, compared to a benefit of $30.6 million in the previous quarter, while the provision for the PB segment was a benefit of $1.7 million, compared to a benefit of $0.9 million in the previous quarter.

 

 

The provision for unfunded commitments for the first quarter of 2022 reflected a benefit of $0.8 million, compared to a benefit of $0.5 million in the previous quarter. The provision for credit losses in our investment portfolio was a benefit of $0.3 million, compared to a benefit of $1.1 million in the fourth 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.

Non-Performing Assets

 

(Unaudited)

     

(In thousands)

  31-Mar-22     31-Dec-21     31-Mar-21  

Non-performing loans held-in-portfolio

  $ 519,921     $ 547,877     $ 698,142  

Non-performing loans held-for-sale

    —         —         3,549  

Other real estate owned (“OREO”)

    90,567       85,077       72,060  
 

 

 

   

 

 

   

 

 

 

Total non-performing assets

  $ 610,488     $ 632,954     $ 773,751  
 

 

 

   

 

 

   

 

 

 

Net charge-offs (recoveries) for the quarter

  $ 3,781     $ (7,881   $ 21,030  
 

 

 

   

 

 

   

 

 

 

 

Ratios:

                 

Loans held-in-portfolio

  $ 29,588,190     $ 29,240,557     $ 29,131,628  

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

    1.76     1.87     2.40

Allowance for credit losses to loans held-in-portfolio

    2.29       2.38       2.75  

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

    130.36       126.92       114.70  
 

 

 

   

 

 

   

 

 

 

Refer to Table K for additional information.

Provision for Credit Losses (Benefit) - Loan Portfolios

 

(Unaudited)

  Quarters ended  

(In thousands)

  31-Mar-22     31-Dec-21     31-Mar-21  

Provision for credit losses (benefit) - loan portfolios:

     

BPPR

  $ (12,661   $ (30,562   $ (39,976

Popular U.S.

          (1,744                (859            (35,803
 

 

 

   

 

 

   

 

 

 

Total provision for credit losses (benefit) - loan portfolios

  $ (14,405   $ (31,421   $ (75,779
 

 

 

   

 

 

   

 

 

 

 

7


Credit Quality by Segment

 

                                                              

(Unaudited)

(In thousands)

  Quarters ended  

BPPR

  31-Mar-22     31-Dec-21     31-Mar-21  

Provision for credit losses (benefit) - loan portfolios

  $ (12,661   $ (30,562   $ (39,976

Net charge-offs (recoveries)

    5,502       (7,615     19,474  

Total non-performing loans held-in-portfolio

     486,816        514,289        665,978  

Allowance / loans held-in-portfolio

    2.74     2.85     3.20

Allowance / non-performing loans held-in-portfolio

    118.45     115.53     102.35
 

 

 

   

 

 

   

 

 

 

 

                                                              
    Quarters ended  

Popular U.S.

  31-Mar-22     31-Dec-21     31-Mar-21  

Provision for credit losses (benefit) - loan portfolios

  $ (1,744   $ (859   $ (35,803

Net charge-offs (recoveries)

    (1,721     (266     1,556  

Total non-performing loans held-in-portfolio

    33,105       33,588       32,164  

Allowance / loans held-in-portfolio

    1.18     1.21     1.53

Allowance / non-performing loans held-in-portfolio

    305.64     301.31     370.42
 

 

 

   

 

 

   

 

 

 

Financial Condition Highlights

 

                                                              

(Unaudited)

 

 

 

(In thousands)

  31-Mar-22     31-Dec-21     31-Mar-21  

Cash and money market investments

  $ 10,508,840     $ 17,965,152     $ 12,064,592  

Investment securities

    26,658,289       25,267,418       23,076,488  

Loans

    29,588,190       29,240,557       29,131,628  

Total assets

    69,525,082       75,097,899       66,870,268  

Deposits

    62,862,295          67,005,088          58,742,801  

Borrowings

    1,060,706       1,155,166       1,311,064     

Total liabilities

    64,853,836       69,128,502       60,972,709  

Stockholders’ equity

    4,671,246       5,969,397       5,897,559  
 

 

 

   

 

 

   

 

 

 

 

8


Total assets decreased by $5.6 billion from the fourth quarter of 2021, driven by:

 

   

a decrease of $7.5 billion in money market investments, mainly due to lower Puerto Rico public sector deposits and purchases of U.S. Treasury securities;

partially offset by:

 

   

an increase of $1.4 billion in debt securities available-for-sale, mainly due to purchases of U.S. Treasury securities, offset in part by maturities and paydowns of U.S. Treasury and agency mortgage-backed securities; and

 

   

an increase in loans held-in-portfolio by $0.4 billion, mainly due to loan growth in the commercial portfolios in both Puerto Rico and the U.S. (mainly in the health care sector at PB) and construction portfolios, and purchases of third-party lending consumer loans, partially offset by a decrease in the mortgage portfolio, mainly due to loan payoffs and amortizations.

Total liabilities decreased by $4.3 billion from the fourth quarter of 2021, driven by:

 

   

a decrease of $4.1 billion in deposits, mainly due to lower Puerto Rico public sector deposits by $5.5 billion at BPPR as a result of the payments made by Puerto Rico pursuant to the Plan of Adjustment for Puerto Rico under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”); and

 

   

a decrease in borrowings of $94 million, mainly due to the maturity during this quarter of $75 million in short-term borrowings.

Stockholders’ equity decreased by $1.3 billion from the fourth quarter of 2021, principally due to an increase in accumulated unrealized losses on debt securities available-for-sale by $1.1 billion due to a decline in fair value of fixed-rate debt securities as a result of the rising interest rate environment, the impact of the $400 million ASR and declared quarterly common stock dividends, partially offset by the net income of $211.7 million for the quarter.

Common equity tier-1 ratio (“CET1”), common equity per share and tangible book value per share were 16.26%, $60.78 and $51.16, respectively, at March 31, 2022, compared to 17.42%, $74.48 and $65.26 at December 31, 2021. Refer to Table A for capital ratios.

 

9


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, 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. Other factors include the length of time necessary for Popular to consummate the Transaction; the ability to satisfy the conditions to the closing thereof; the receipt of any regulatory approvals necessary to effect the Transaction and the contemplated return to shareholders of net gains resulting from a sale of EVERTEC shares effected in connection with the consummation of the Transaction; the ability to successfully transition and integrate the assets acquired as part of the Transaction, related operations, employees and third party contractors; unexpected costs, including, without limitation, costs due to exposure to any unrecorded liabilities or issues not identified during due diligence investigation of the Transaction or that are not subject to indemnification or reimbursement by EVERTEC; risks that Popular may be affected by operational and other risks arising from the acquisition of the acquired assets or by adverse effects on relationships with customers, employees and service providers and business and other risks arising from the extension of Popular’s current commercial agreements with EVERTEC. 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, 2021, and in our Form 10-Q for the quarter ended March 31, 2022 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 Tuesday, April 26, 2022 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). The dial-in access code is 659646.

A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Tuesday, May 24, 2022. The replay dial-in is: 1-866-813-9403 or 1-929-458-6194. The replay passcode is 408334.

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

 

10


Popular, Inc.

Financial Supplement to First Quarter 2022 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 [Left Blank]

Table F - Mortgage Banking Activities & 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

 

11


POPULAR, INC.

Financial Supplement to First Quarter 2022 Earnings Release

Table A - Selected Ratios and Other Information

(Unaudited)

 

     Quarters ended  
     31-Mar-22     31-Dec-21     31-Mar-21  

Basic EPS

   $ 2.69     $ 2.59     $ 3.13  

Diluted EPS

   $ 2.69     $ 2.58     $ 3.12  

Average common shares outstanding

     78,443,706       79,477,823       83,899,769  

Average common shares outstanding - assuming dilution

     78,595,463       79,652,836       84,051,935  

Common shares outstanding at end of period

     76,487,523       79,851,169       84,379,180  

Market value per common share

   $ 81.74     $ 82.04     $ 70.32  

Market capitalization - (In millions)

   $ 6,252     $ 6,551     $ 5,934  

Return on average assets

     1.14     1.09     1.61

Return on average common equity

     14.38     13.74     18.76

Net interest margin (non-taxable equivalent basis)

     2.75     2.78     3.07

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

     3.05     3.02     3.39

Common equity per share

   $ 60.78     $ 74.48     $ 69.63  

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

   $ 51.16     $ 65.26     $ 61.42  

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

     5.69     7.01     7.83

Return on average tangible common equity [1]

     16.40     15.66     21.37

Tier 1 capital

     16.33     17.49     17.15

Total capital

     18.19     19.35     19.62

Tier 1 leverage

     6.98     7.41     8.06

Common Equity Tier 1 capital

     16.26     17.42     17.08
  

 

 

   

 

 

   

 

 

 

 

[1]

Refer to Table Q for reconciliation to GAAP financial measures.

 

12


POPULAR, INC.

Financial Supplement to First Quarter 2022 Earnings Release

Table B - Consolidated Statement of Operations

(Unaudited)

 

     Quarters ended     Variance     Quarter ended     Variance  
                 Q1 2022           Q1 2022  

(In thousands, except per share information)

   31-Mar-22     31-Dec-21     vs. Q4 2021     31-Mar-21     vs. Q1 2021  

Interest income:

          

Loans

   $ 426,791     $ 444,101     $ (17,310   $ 434,649     $ (7,858

Money market investments

     6,464       6,847       (383     3,112       3,352  

Investment securities

     96,466       88,315       8,151       85,690       10,776  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     529,721       539,263       (9,542     523,451       6,270  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense:

          

Deposits

     24,783       26,331       (1,548     30,201       (5,418

Short-term borrowings

     80       60       20       143       (63

Long-term debt

     10,546       11,589       (1,043     13,995       (3,449
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest expense

     35,409       37,980       (2,571     44,339       (8,930
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     494,312       501,283       (6,971     479,112       15,200  

Provision for credit losses (benefit)

     (15,500     (33,050     17,550       (82,226     66,726  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for credit losses (benefit)

     509,812       534,333       (24,521     561,338       (51,526
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Service charges on deposit accounts

     40,713       41,613       (900     39,620       1,093  

Other service fees

     77,134       83,793       (6,659     70,628       6,506  

Mortgage banking activities

     12,865       17,035       (4,170     17,343       (4,478

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

     (2,094     (1,454     (640     421       (2,515

Net loss on trading account debt securities

     (723     (355     (368     (45     (678

Adjustments (expense) to indemnity reserves on loans sold

     (745     1,398       (2,143     (698     (47

Other operating income

     27,542       22,647       4,895       26,384       1,158  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest income

     154,692       164,677       (9,985     153,653       1,039  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

          

Personnel costs

          

Salaries

     98,673       96,830       1,843       89,335       9,338  

Commissions, incentives and other bonuses

     31,339       27,611       3,728       33,218       (1,879

Pension, postretirement and medical insurance

     12,783       13,971       (1,188     10,924       1,859  

Other personnel costs, including payroll taxes

     24,201       22,060       2,141       26,002       (1,801
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total personnel costs

     166,996       160,472       6,524       159,479       7,517  

Net occupancy expenses

     24,723       26,755       (2,032     26,013       (1,290

Equipment expenses

     23,479       25,180       (1,701     21,575       1,904  

Other taxes

     15,715       15,160       555       13,959       1,756  

Professional fees

          

Collections, appraisals and other credit related fees

     2,226       3,227       (1,001     3,320       (1,094

Programming, processing and other technology services

     69,374       69,647       (273     66,366       3,008  

Legal fees, excluding collections

     3,954       3,445       509       2,365       1,589  

Other professional fees

     32,943       28,736       4,207       27,897       5,046  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total professional fees

     108,497       105,055       3,442       99,948       8,549  

Communications

     6,147       6,263       (116     6,833       (686

Business promotion

     15,083       25,833       (10,750     12,521       2,562  

FDIC deposit insurance

     7,372       6,688       684       5,968       1,404  

Other real estate owned (OREO) income

     (2,713     (3,860     1,147       (4,533     1,820  

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

     12,509       8,757       3,752       12,454       55  

Other operating expenses

          

Operational losses

     11,825       16,820       (4,995     7,896       3,929  

All other

     11,815       18,226       (6,411     12,364       (549
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other operating expenses

     23,640       35,046       (11,406     20,260       3,380  

Amortization of intangibles

     891       6,045       (5,154     1,051       (160
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     402,339       417,394       (15,055     375,528       26,811  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax

     262,165       281,616       (19,451     339,463       (77,298

Income tax expense

     50,479       75,552       (25,073     76,831       (26,352
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 211,686     $ 206,064     $ 5,622     $ 262,632     $ (50,946
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income applicable to common stock

   $ 211,333     $ 205,711     $ 5,622     $ 262,279     $ (50,946
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share - basic

   $ 2.69     $ 2.59     $ 0.10     $ 3.13     $ (0.44
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share - diluted

   $ 2.69     $ 2.58     $ 0.11     $ 3.12     $ (0.43
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Dividends Declared per Common Share

   $ 0.55     $ 0.45     $ 0.10     $ 0.40     $ 0.15  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

13


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

Table C - Consolidated Statement of Financial Condition

(Unaudited)

 

                      

Variance

Q1 2022 vs.

 

(In thousands)

   31-Mar-22     31-Dec-21     31-Mar-21     Q4 2021  

Assets:

        

Cash and due from banks

   $ 439,148     $ 428,433     $ 495,915     $ 10,715  

Money market investments

     10,069,692       17,536,719       11,568,677       (7,467,027

Trading account debt securities, at fair value

     36,042       29,711       36,504       6,331  

Debt securities available-for-sale, at fair value

     26,359,915       24,968,269       22,771,609       1,391,646  

Debt securities held-to-maturity, at amortized cost

     75,984       79,461       89,725       (3,477

Less: Allowance for credit losses

     7,844       8,096       10,096       (252
  

 

 

   

 

 

   

 

 

   

 

 

 

Total debt securities held-to-maturity, net

     68,140       71,365       79,629       (3,225
  

 

 

   

 

 

   

 

 

   

 

 

 

Equity securities

     186,348       189,977       178,650       (3,629

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

     55,150       59,168       84,214       (4,018

Loans held-in-portfolio

     29,856,356       29,506,225       29,344,620       350,131  

Less: Unearned income

     268,166       265,668       212,992       2,498  

Allowance for credit losses

     677,792       695,366       800,797       (17,574
  

 

 

   

 

 

   

 

 

   

 

 

 

Total loans held-in-portfolio, net

     28,910,398       28,545,191       28,330,831       365,207  
  

 

 

   

 

 

   

 

 

   

 

 

 

Premises and equipment, net

     488,390       494,240       508,023       (5,850

Other real estate

     90,567       85,077       72,060       5,490  

Accrued income receivable

     204,466       203,096       215,993       1,370  

Mortgage servicing rights, at fair value

     125,358       121,570       122,543       3,788  

Other assets

     1,755,847       1,628,571       1,713,083       127,276  

Goodwill

     720,293       720,293       671,122       —    

Other intangible assets

     15,328       16,219       21,415       (891
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 69,525,082     $ 75,097,899     $ 66,870,268     $ (5,572,817
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity:

        

Liabilities:

        

Deposits:

        

Non-interest bearing

   $ 16,096,666     $ 15,684,482     $ 14,263,548     $ 412,184  

Interest bearing

     46,765,629       51,320,606       44,479,253       (4,554,977
  

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     62,862,295       67,005,088       58,742,801       (4,142,793
  

 

 

   

 

 

   

 

 

   

 

 

 

Assets sold under agreements to repurchase

     72,819       91,603       86,834       (18,784

Other short-term borrowings

     —         75,000       —         (75,000

Notes payable

     987,887       988,563       1,224,230       (676

Other liabilities

     930,835       968,248       918,844       (37,413
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     64,853,836       69,128,502       60,972,709       (4,274,666
  

 

 

   

 

 

   

 

 

   

 

 

 

Stockholders’ equity:

        

Preferred stock

     22,143       22,143       22,143       —    

Common stock

     1,046       1,046       1,045       —    

Surplus

     4,571,111       4,650,182       4,571,919       (79,071

Retained earnings

     3,143,004       2,973,745       2,489,453       169,259  

Treasury stock

     (1,668,820     (1,352,650     (1,012,263     (316,170

Accumulated other comprehensive loss, net of tax

     (1,397,238     (325,069     (174,738     (1,072,169
  

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     4,671,246       5,969,397       5,897,559       (1,298,151
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 69,525,082     $ 75,097,899     $ 66,870,268     $ (5,572,817
  

 

 

   

 

 

   

 

 

   

 

 

 

 

14


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

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

(Unaudited)

 

    Quarters ended     Variance  
    31-Mar-22     31-Dec-21     31-Mar-21     Q1 2022 vs. Q4 2021     Q1 2022 vs. Q1 2021  

($ 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

  $ 43,304     $ 144.8       1.35   $ 42,764     $ 126.4       1.18   $ 33,756     $ 127.8       1.52   $ 540     $ 18.4       0.17   $ 9,548     $ 17.0       (0.17 )% 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loans:

                             

Commercial

    13,741       172.1       5.08       13,395       188.6       5.59       13,624       179.0       5.33       346       (16.5     (0.51     117       (6.9     (0.25

Construction

    726       9.8       5.45       777       10.7       5.46       911       11.9       5.30       (51     (0.9     (0.01     (185     (2.1     0.15  

Mortgage

    7,388       96.8       5.24       7,504       96.4       5.14       7,869       98.4       5.00       (116     0.4       0.10       (481     (1.6     0.24  

Consumer

    2,538       70.0       11.19       2,471       68.1       10.93       2,513       70.4       11.36       67       1.9       0.26       25       (0.4     (0.17

Auto

    3,460       69.3       8.12       3,432       71.3       8.24       3,203       68.2       8.63       28       (2.0     (0.12     257       1.1       (0.51

Lease financing

    1,393       20.7       5.95       1,359       20.3       5.97       1,215       18.4       6.04       34       0.4       (0.02     178       2.3       (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

    29,246       438.7       6.06       28,938       455.4       6.26       29,335       446.3       6.15       308       (16.7     (0.20     (89     (7.6     (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest earning assets

  $ 72,550     $ 583.5       3.25   $ 71,702     $ 581.8       3.23   $ 63,091     $ 574.1       3.67   $ 848     $ 1.7       0.02   $ 9,459     $ 9.4       (0.42 )% 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for credit losses - loan portfolio

    (695         (719         (890         24           195      

Allowance for credit losses - investment securities

    (8         (9         (10         1           2      

Other non-interest earning assets

    3,782           3,844           3,895           (62         (113    
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

     

Total average assets

  $ 75,629         $ 74,818         $ 66,086         $ 811         $ 9,543      
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

     

Liabilities and Stockholders’ Equity:

                             

Interest bearing deposits:

                             

NOW and money market

  $ 28,289     $ 7.3       0.10   $ 28,205     $ 7.7       0.11   $ 22,674     $ 8.3       0.15   $ 84     $ (0.4     (0.01 )%    $ 5,615     $ (1.0     (0.05 )% 

Savings

    16,434       6.6       0.16       16,324       6.8       0.17       14,364       7.0       0.20       110       (0.2     (0.01     2,070       (0.4     (0.04

Time deposits

    6,737       10.9       0.66       6,793       11.8       0.69       7,265       14.9       0.83       (56     (0.9     (0.03     (528     (4.0     (0.17
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits

    51,460       24.8       0.20       51,322       26.3       0.20       44,303       30.2       0.31       138       (1.5     —         7,157       (5.4     (0.11

Borrowings

    1,105       10.6       3.87       1,163       11.6       4.01       1,344       14.1       4.23       (58     (1.0     (0.14     (239     (3.5     (0.36
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing liabilities

    52,565       35.4       0.27       52,485       37.9       0.29       45,647       44.3       0.39       80       (2.5     (0.02     6,918       (8.9     (0.12
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest spread

        2.98         2.94         3.28         0.04         (0.30 )% 
     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

 

Non-interest bearing deposits

    16,142           15,455           13,394           687           2,748      

Other liabilities

    939           917           1,351           22           (412    

Stockholders’ equity

    5,983           5,961           5,694           22           289      
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

     

Total average liabilities and stockholders’ equity

  $ 75,629         $ 74,818         $ 66,086         $ 811         $ 9,543      
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

     

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

    $ 548.1       3.05     $ 543.9       3.02     $ 529.8       3.39     $ 4.2       0.03     $ 18.3       (0.34 )% 

Taxable equivalent adjustment

      53.8           42.6           50.7           11.2           3.1    
   

 

 

       

 

 

       

 

 

       

 

 

       

 

 

   

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

    $ 494.3       2.75     $ 501.3       2.78     $ 479.1       3.07     ($ 7.0     (0.03 )%      $ 15.2       (0.32 )% 
   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

 

 

15


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

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

[THIS PAGE INTENTIONALLY LEFT BLANK]

 

16


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

Table F - Mortgage Banking Activities and Other Service Fees

(Unaudited)

Mortgage Banking Activities

 

     Quarters ended     Variance  

(In thousands)

   31-Mar-22     31-Dec-21     31-Mar-21     Q1 2022
vs.Q4 2021
    Q1 2022
vs.Q1 2021
 

Mortgage servicing fees, net of fair value adjustments:

          

Mortgage servicing fees

   $ 9,323     $ 9,492     $ 9,715     $ (169   $ (392

Mortgage servicing rights fair value adjustments

     1,088       1,500       512       (412     576  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total mortgage servicing fees, net of fair value adjustments

     10,411       10,992       10,227       (581     184  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     (1,534     5,428       4,975       (6,962     (6,509
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Trading account profit:

          

Unrealized gains on outstanding derivative positions

     2       —         —         2       2  

Realized gains on closed derivative positions

     4,135       691       2,502       3,444       1,633  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total trading account profit

     4,137       691       2,502       3,446       1,635  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Losses on repurchased loans, including interest advances

     (149     (76     (361     (73     212  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total mortgage banking activities

   $ 12,865     $ 17,035     $ 17,343     $ (4,170   $ (4,478
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other Service Fees    

 

     Quarters ended     Variance  

(In thousands)

   31-Mar-22     31-Dec-21     31-Mar-21     Q1 2022
vs.Q4 2021
    Q1 2022
vs.Q1 2021
 

Other service fees:

          

Debit card fees

   $ 11,779     $ 12,392     $ 11,577     $ (613   $ 202  

Insurance fees

     14,156       17,848       12,828       (3,692     1,328  

Credit card fees

     33,642       35,649       28,691       (2,007     4,951  

Sale and administration of investment products

     5,791       5,908       5,540       (117     251  

Trust fees

     5,927       5,858       5,842       69       85  

Other fees

     5,839        6,138        6,150        (299     (311
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other service fees

   $ 77,134     $ 83,793     $ 70,628     $ (6,659   $ 6,506  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

17


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

Table G - Loans and Deposits

(Unaudited)

Loans - Ending Balances

 

                          Variance  

(In thousands)

   31-Mar-22      31-Dec-21      31-Mar-21      Q1 2022 vs.Q4
2021
    Q1 2022 vs.Q1
2021
 

Loans held-in-portfolio:

 

          

Commercial

   $ 14,028,246      $ 13,732,701      $ 13,442,486      $ 295,545     $ 585,760  

Construction

     744,783        716,220        907,736        28,563       (162,953

Leasing

     1,426,122        1,381,319        1,244,956        44,803       181,166  

Mortgage

     7,326,346        7,427,196        7,808,852        (100,850     (482,506

Auto

     3,430,162        3,412,187        3,203,137        17,975       227,025  

Consumer

     2,632,531        2,570,934        2,524,461        61,597       108,070  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total loans held-in-portfolio

   $ 29,588,190      $ 29,240,557      $ 29,131,628      $ 347,633     $ 456,562  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Loans held-for-sale:

             

Commercial

   $ —        $ —        $ 3,549      $ —       $ (3,549

Mortgage

     55,150        59,168        80,665        (4,018     (25,515
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total loans held-for-sale

   $ 55,150      $ 59,168      $ 84,214      $ (4,018   $ (29,064
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total loans

   $ 29,643,340      $ 29,299,725      $ 29,215,842      $    343,615     $    427,498  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Deposits - Ending Balances

 

                          Variance  

(In thousands)

   31-Mar-22      31-Dec-21      31-Mar-21      Q1 2022 vs. Q4
2021
    Q1 2022 vs.Q1
2021
 

Demand deposits [1]

   $ 25,684,715      $ 25,889,732      $ 23,450,312      $ (205,017   $ 2,234,403  

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

     29,318,333        33,674,134        27,356,136        (4,355,801     1,962,197  

Savings, NOW and money market deposits (brokered)

     768,558        729,073        679,832        39,485       88,726  

Time deposits (non-brokered)

     6,964,848        6,685,938        7,143,221        278,910       (178,373

Time deposits (brokered CDs)

     125,841        26,211        113,300        99,630       12,541  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total deposits

   $ 62,862,295      $ 67,005,088      $ 58,742,801      $ (4,142,793   $ 4,119,494  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

[1]

Includes interest and non-interest bearing demand deposits.

 

18


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

Table H - Loan Delinquency - Puerto Rico Operations

(Unaudited)    

 

31-Mar-22

 

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

   $ 2,130      $ 189      $ 274      $ 2,593      $ 160,648      $ 163,241      $ 274      $ —    

Commercial real estate:

                         

Non-owner occupied

     3,646        93        20,627        24,366        2,536,174        2,560,540        20,627        —    

Owner occupied

     4,024        50        49,732        53,806        1,396,696        1,450,502        49,732        —    

Commercial and industrial

     1,218        169        48,167        49,554        3,333,918        3,383,472        47,149        1,018  

Construction

     715        —          —          715        126,610        127,325        —          —    

Mortgage

     182,397        79,374        736,338        998,109        5,125,554        6,123,663        306,560        429,778  

Leasing

     9,819        2,446        3,766        16,031        1,410,091        1,426,122        3,766        —    

Consumer:

                         

Credit cards

     5,817        3,728        9,049        18,594        896,966        915,560        —          9,049  

Home equity lines of credit

     —          —          23        23        3,093        3,116        —          23  

Personal

     10,215        6,184        19,157        35,556        1,267,920        1,303,476        19,157        —    

Auto

     51,497        11,353        27,514        90,364        3,339,798        3,430,162        27,514        —    

Other

     537        37        12,184        12,758        112,322        125,080        12,037        147  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 272,015      $ 103,623      $ 926,831      $ 1,302,469      $ 19,709,790      $ 21,012,259      $ 486,816      $ 440,015  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

31-Dec-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

   $ 314      $ —        $ 272      $ 586      $ 154,183      $ 154,769      $ 272      $ —    

Commercial real estate:

                         

Non-owner occupied

     2,399        136        20,716        23,251        2,266,672        2,289,923        20,716        —    

Owner occupied

     3,329        278        54,335        57,942        1,365,787        1,423,729        54,335        —    

Commercial and industrial

     3,438        1,727        45,242        50,407        3,478,041        3,528,448        44,724        518  

Construction

     —          —          485        485        86,626        87,111        485        —    

Mortgage

     217,830        81,754        805,245        1,104,829        5,147,037        6,251,866        333,887        471,358  

Leasing

     9,240        2,037        3,102        14,379        1,366,940        1,381,319        3,102        —    

Consumer:

                         

Credit cards

     5,768        3,520        8,577        17,865        901,986        919,851        —          8,577  

Home equity lines of credit

     46        —          23        69        3,502        3,571        —          23  

Personal

     10,027        6,072        21,235        37,334        1,250,726        1,288,060        21,235        —    

Auto

     59,128        15,019        23,085        97,232        3,314,955        3,412,187        23,085        —    

Other

     432        714        12,621        13,767        110,781        124,548        12,448        173  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 311,951      $ 111,257      $ 994,938      $ 1,418,146      $ 19,447,236      $ 20,865,382      $ 514,289      $ 480,649  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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

   $ 1,816     $ 189     $ 2     $ 2,007     $ 6,465     $ 8,472     $ 2     $ —    

Commercial real estate:

                  

Non-owner occupied

     1,247       (43     (89     1,115       269,502       270,617       (89     —    

Owner occupied

     695       (228     (4,603     (4,136     30,909       26,773       (4,603     —    

Commercial and industrial

     (2,220     (1,558     2,925       (853     (144,123     (144,976     2,425       500  

Construction

     715       —         (485     230       39,984       40,214       (485     —    

Mortgage

     (35,433     (2,380     (68,907     (106,720     (21,483     (128,203     (27,327     (41,580

Leasing

     579       409       664       1,652       43,151       44,803       664       —    

Consumer:

                  

Credit cards

     49       208       472       729       (5,020     (4,291     —         472  

Home equity lines of credit

     (46     —         —         (46     (409     (455     —         —    

Personal

     188       112       (2,078     (1,778     17,194       15,416       (2,078     —    

Auto

     (7,631     (3,666     4,429       (6,868     24,843       17,975       4,429       —    

Other

     105       (677     (437     (1,009     1,541       532       (411     (26
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $   (39,936   $    (7,634   $   (68,107   $   (115,677   $      262,554     $      146,877     $   (27,473   $   (40,634
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

20


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

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

(Unaudited)

 

31-Mar-22

 

Popular U.S.

 
     Past due                    Past due 90 days or more  

(In thousands)

   30-59
days
     60-89
days
     90 days
or more
     Total past
due
     Current      Loans HIP      Non-accrual
loans
     Accruing
loans
 

Commercial multi-family

   $ —        $ —        $ —        $ —        $ 1,865,623      $ 1,865,623      $ —        $ —    

Commercial real estate:

                       

Non-owner occupied

     902        740        374        2,016        1,391,874        1,393,890        374        —    

Owner occupied

     6,385        —          677        7,062        1,398,580        1,405,642        677        —    

Commercial and industrial

     10,925        602        4,891        16,418        1,788,918        1,805,336        4,352        539  

Construction

     —          —          —          —          617,458        617,458        —          —    

Mortgage

     13,006        1,069        21,826        35,901        1,166,782        1,202,683        21,826        —    

Consumer:

                       

Credit cards

     —          —          —          —          26        26        —          —    

Home equity lines of credit

     259        15        5,248        5,522        68,437        73,959        5,248        —    

Personal

     739        558        627        1,924        203,381        205,305        627        —    

Other

     —          1        1        2        6,007        6,009        1        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 32,216      $ 2,985      $ 33,644      $ 68,845      $ 8,507,086      $ 8,575,931      $ 33,105      $ 539  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

31-Dec-21

 

Popular U.S.

 
     Past due                    Past due 90 days or more  

(In thousands)

   30-59
days
     60-89
days
     90 days
or more
     Total past
due
     Current      Loans HIP      Non-accrual
loans
     Accruing
loans
 

Commercial multi-family

   $ 3,826      $ —        $ —        $ 3,826      $ 1,804,035      $ 1,807,861      $ —        $ —    

Commercial real estate:

                       

Non-owner occupied

     5,721        683        622        7,026        2,316,441        2,323,467        622        —    

Owner occupied

     1,095        —          1,013        2,108        392,265        394,373        1,013        —    

Commercial and industrial

     9,410        2,680        4,015        16,105        1,794,026        1,810,131        3,897        118  

Construction

     —          —          —          —          629,109        629,109        —          —    

Mortgage

     11,711        2,573        21,969        36,253        1,139,077        1,175,330        21,969        —    

Consumer:

                       

Credit cards

     —          —          —          —          10        10        —          —    

Home equity lines of credit

     71        34        5,406        5,511        69,780        75,291        5,406        —    

Personal

     863        574        681        2,118        152,827        154,945        681        —    

Other

     —          —          —          —          4,658        4,658        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 32,697      $ 6,544      $ 33,706      $ 72,947      $ 8,302,228      $ 8,375,175      $ 33,588      $ 118  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

21


Variance

 
     Past due                 Past due 90 days or more  

(In thousands)

   30-59
days
    60-89
days
    90 days
or more
    Total
past due
    Current     Loans HIP     Non-accrual
loans
    Accruing
loans
 

Commercial multi-family

   $ (3,826   $ —       $ —       $ (3,826   $ 61,588     $ 57,762     $ —       $ —    

Commercial real estate:

                

Non-owner occupied

     (4,819     57       (248     (5,010     (924,567     (929,577     (248     —    

Owner occupied

     5,290       —         (336     4,954       1,006,315       1,011,269       (336     —    

Commercial and industrial

     1,515       (2,078     876       313       (5,108     (4,795     455       421  

Construction

     —         —         —         —         (11,651     (11,651     —         —    

Mortgage

     1,295       (1,504     (143     (352     27,705       27,353       (143     —    

Consumer:

                

Credit cards

     —         —         —         —         16       16       —         —    

Home equity lines of credit

     188       (19     (158     11       (1,343     (1,332     (158     —    

Personal

     (124     (16     (54     (194     50,554       50,360       (54     —    

Other

     —         1       1       2       1,349       1,351       1       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ (481   $ (3,559   $ (62   $ (4,102   $ 204,858     $ 200,756     $ (483   $ 421  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

22


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

Table J - Loan Delinquency - Consolidated

(Unaudited)

 

31-Mar-22

 

Popular, Inc.

 
     Past due                    Past due 90 days or more  

(In thousands)

   30-59
days
     60-89
days
     90 days
or more
     Total
past due
     Current      Loans HIP      Non-accrual
loans
     Accruing
loans
 

Commercial multi-family

   $ 2,130      $ 189      $ 274      $ 2,593      $ 2,026,271      $ 2,028,864      $ 274      $ —    

Commercial real estate:

                       

Non-owner occupied

     4,548        833        21,001        26,382        3,928,048        3,954,430        21,001        —    

Owner occupied

     10,409        50        50,409        60,868        2,795,276        2,856,144        50,409        —    

Commercial and industrial

     12,143        771        53,058        65,972        5,122,836        5,188,808        51,501        1,557  

Construction

     715        —          —          715        744,068        744,783        —          —    

Mortgage

     195,403        80,443        758,164        1,034,010        6,292,336        7,326,346        328,386        429,778  

Leasing

     9,819        2,446        3,766        16,031        1,410,091        1,426,122        3,766        —    

Consumer:

                       

Credit cards

     5,817        3,728        9,049        18,594        896,992        915,586        —          9,049  

Home equity lines of credit

     259        15        5,271        5,545        71,530        77,075        5,248        23  

Personal

     10,954        6,742        19,784        37,480        1,471,301        1,508,781        19,784        —    

Auto

     51,497        11,353        27,514        90,364        3,339,798        3,430,162        27,514        —    

Other

     537        38        12,185        12,760        118,329        131,089        12,038        147  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 304,231      $ 106,608      $ 960,475      $ 1,371,314      $ 28,216,876      $ 29,588,190      $ 519,921      $ 440,554  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

31-Dec-21

 

Popular, Inc.

 
     Past due                    Past due 90 days or more  

(In thousands)

   30-59
days
     60-89
days
     90 days
or more
     Total
past due
     Current      Loans HIP      Non-accrual
loans
     Accruing
loans
 

Commercial multi-family

   $ 4,140      $ —        $ 272      $ 4,412      $ 1,958,218      $ 1,962,630      $ 272      $ —    

Commercial real estate:

                       

Non-owner occupied

     8,120        819        21,338        30,277        4,583,113        4,613,390        21,338        —    

Owner occupied

     4,424        278        55,348        60,050        1,758,052        1,818,102        55,348        —    

Commercial and industrial

     12,848        4,407        49,257        66,512        5,272,067        5,338,579        48,621        636  

Construction

     —          —          485        485        715,735        716,220        485        —    

Mortgage

     229,541        84,327        827,214        1,141,082        6,286,114        7,427,196        355,856        471,358  

Leasing

     9,240        2,037        3,102        14,379        1,366,940        1,381,319        3,102        —    

Consumer:

                       

Credit cards

     5,768        3,520        8,577        17,865        901,996        919,861        —          8,577  

Home equity lines of credit

     117        34        5,429        5,580        73,282        78,862        5,406        23  

Personal

     10,890        6,646        21,916        39,452        1,403,553        1,443,005        21,916        —    

Auto

     59,128        15,019        23,085        97,232        3,314,955        3,412,187        23,085        —    

Other

     432        714        12,621        13,767        115,439        129,206        12,448        173  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 344,648      $ 117,801      $ 1,028,644      $ 1,491,093      $ 27,749,464      $ 29,240,557      $ 547,877      $ 480,767  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

23


Variance

 
     Past due                 Past due 90 days or more  

(In thousands)

   30-59
days
    60-89
days
    90 days
or more
    Total
past due
    Current     Loans HIP     Non-accrual
loans
    Accruing
loans
 

Commercial multi-family

   $ (2,010   $ 189     $ 2     $ (1,819   $ 68,053     $ 66,234     $ 2     $ —    

Commercial real estate:

                

Non-owner occupied

     (3,572     14       (337     (3,895     (655,065     (658,960     (337     —    

Owner occupied

     5,985       (228     (4,939     818       1,037,224       1,038,042       (4,939     —    

Commercial and industrial

     (705     (3,636     3,801       (540     (149,231     (149,771     2,880       921  

Construction

     715       —         (485     230       28,333       28,563       (485     —    

Mortgage

     (34,138     (3,884     (69,050     (107,072     6,222       (100,850     (27,470     (41,580

Leasing

     579       409       664       1,652       43,151       44,803       664       —    

Consumer:

                

Credit cards

     49       208       472       729       (5,004     (4,275     —         472  

Home equity lines of credit

     142       (19     (158     (35     (1,752     (1,787     (158     —    

Personal

     64       96       (2,132     (1,972     67,748       65,776       (2,132     —    

Auto

     (7,631     (3,666     4,429       (6,868     24,843       17,975       4,429       —    

Other

     105       (676     (436     (1,007     2,890       1,883       (410     (26
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ (40,417   $ (11,193   $ (68,169   $ (119,779   $ 467,412     $ 347,633     $ (27,956   $ (40,213
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

24


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

Table K - Non-Performing Assets

(Unaudited)

 

                                        Variance  

(Dollars in thousands)

  31-Mar-22     As a % of
loans HIP by
category
    31-Dec-21     As a % of
loans HIP by
category
    31-Mar-21     As a % of
loans HIP by
category
    Q1 2022 vs.
Q4 2021
    Q1 2022 vs.
Q1 2021
 

Non-accrual loans:

               

Commercial

  $ 123,185       0.9   $ 125,579       0.9   $ 202,770       1.5   $ (2,394   $ (79,585

Construction

    —         —         485       0.1       22,400       2.5       (485     (22,400

Leasing

    3,766       0.3       3,102       0.2       3,040       0.2       664       726  

Mortgage

    328,386       4.5       355,856       4.8       405,574       5.2       (27,470     (77,188

Auto

    27,514       0.8       23,085       0.7       15,405       0.5       4,429       12,109  

Consumer

    37,070       1.4       39,770       1.5       48,953       1.9       (2,700     (11,883
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing loans held-in-portfolio

    519,921       1.8     547,877       1.9     698,142       2.4     (27,956     (178,221

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

    —           —           3,549         —         (3,549

Other real estate owned (“OREO”)

    90,567         85,077         72,060         5,490       18,507  
 

 

 

     

 

 

     

 

 

     

 

 

   

 

 

 

Total non-performing assets

  $ 610,488       $ 632,954       $ 773,751       $ (22,466   $ (163,263
 

 

 

     

 

 

     

 

 

     

 

 

   

 

 

 

Accruing loans past due 90 days or more [2]

  $ 440,554       $ 480,767       $ 832,756       $ (40,213   $ (392,202
 

 

 

     

 

 

     

 

 

     

 

 

   

 

 

 

Ratios:

               

Non-performing assets to total assets

    0.88       0.84       1.16      

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

    1.76         1.87         2.40        

Allowance for credit losses to loans held-in-portfolio

    2.29         2.38         2.75        

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

    130.36         126.92         114.70        
 

 

 

     

 

 

     

 

 

       

 

[1]

There were no non-performing loans held-for-sale as of March 31, 2022 and December 31, 2021 (March 31, 2021 - $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 $13 million at March 31, 2022, related to the rebooking of loans previously pooled into GNMA securities, in which the Corporation had a buy-back option as further described below (December 31, 2021 - $13 million; March 31, 2021 - $29 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. These balances include $266 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of March 31, 2022 (December 31, 2021 - $304 million; March 31, 2021 - $341 million). Furthermore, the Corporation has approximately $45 million in reverse mortgage loans which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation’s policy to exclude these balances from non-performing assets (December 31, 2021 - $50 million; March 31, 2021 - $58 million).

 

25


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

Table L - Activity in Non-Performing Loans

(Unaudited)

Commercial loans held-in-portfolio:

 

     Quarter ended
31-Mar-22
    Quarter ended
31-Dec-21
 

(In thousands)

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

Beginning balance NPLs

   $ 120,047     $ 5,532     $ 125,579     $ 183,394     $ 2,787     $ 186,181  

Plus:

            

New non-performing loans

     6,127       2,999       9,126       2,297       3,208       5,505  

Advances on existing non-performing loans

     —         2,505       2,505       —         35       35  

Less:

            

Non-performing loans transferred to OREO

     (3,052     —         (3,052     (996     —         (996

Non-performing loans charged-off

     (256     (73     (329     (2,412     (66     (2,478

Loans returned to accrual status / loan collections

     (5,084     (5,560     (10,644     (62,236     (432     (62,668
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ 117,782     $ 5,403     $ 123,185     $ 120,047     $ 5,532     $ 125,579  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Construction loans held-in-portfolio:

 

     Quarter ended
31-Mar-22
    Quarter ended
31-Dec-21
 

(In thousands)

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

Beginning balance NPLs

   $ 485     $ —       $ 485     $ 14,877     $ —       $ 14,877  

Plus:

            

New non-performing loans

     —         —         —         481       —         481  

Less:

            

Loans returned to accrual status / loan collections

     (485     —         (485     (14,873     —         (14,873
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ —       $ —       $ —       $ 485     $ —       $ 485  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Mortgage loans held-in-portfolio:

 

     Quarter ended
31-Mar-22
    Quarter ended
31-Dec-21
 

(In thousands)

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

Beginning balance NPLs

   $ 333,887     $ 21,969     $ 355,856     $ 354,555     $ 14,488     $ 369,043  

Plus:

            

New non-performing loans

     38,193       4,800       42,993       36,210       12,084       48,294  

Advances on existing non-performing loans

     —         134       134       —         14       14  

Less:

            

Non-performing loans transferred to OREO

     (10,344     (85     (10,429     (7,116     —         (7,116

Non-performing loans charged-off

     (467     —         (467     (366     (26     (392

Loans returned to accrual status / loan collections

     (54,709     (4,992     (59,701     (49,396     (4,591     (53,987
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ 306,560     $ 21,826     $ 328,386     $ 333,887     $ 21,969     $ 355,856  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

26


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

 

     Quarter ended     Quarter ended  
     31-Mar-22     31-Dec-21  

(In thousands)

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

Beginning balance NPLs

   $ 454,419     $ 27,501     $ 481,920     $ 552,826     $ 17,275     $ 570,101  

Plus:

            

New non-performing loans

     44,320       7,799       52,119       38,988       15,292       54,280  

Advances on existing non-performing loans

     —         2,639       2,639       —         49       49  

Less:

            

Non-performing loans transferred to OREO

     (13,396     (85     (13,481     (8,112     —         (8,112

Non-performing loans charged-off

     (723     (73     (796     (2,778     (92     (2,870

Loans returned to accrual status / loan collections

     (60,278     (10,552     (70,830     (126,505     (5,023     (131,528
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ 424,342     $ 27,229     $ 451,571     $ 454,419     $ 27,501     $ 481,920  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

27


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

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

(Unaudited)

 

     Quarters ended  

(Dollars in thousands)

   31-Mar-22     31-Dec-21     31-Mar-21  

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

   $ 695,366     $ 718,575     $ 896,250  

Provision for credit losses (benefit)

     (14,405     (31,421     (75,779

Initial allowance for credit losses - PCD Loans

     612       331       1,356  
  

 

 

   

 

 

   

 

 

 
     681,573       687,485       821,827  
  

 

 

   

 

 

   

 

 

 

Net loans charged-off (recovered):

      

BPPR

      

Commercial

     (4,230     (11,346     (1,434

Construction

     (416     (1,518     5,917  

Lease financing

     (434     564       118  

Mortgage

     (2,992     (4,398     8,303  

Consumer

     13,574       9,083       6,570  
  

 

 

   

 

 

   

 

 

 

Total BPPR

     5,502       (7,615     19,474  
  

 

 

   

 

 

   

 

 

 

Popular U.S.

      

Commercial

     (627     (387     16  

Construction

     (1,128     (213     —    

Mortgage

     (20     569       (80

Consumer

     54       (235     1,620  
  

 

 

   

 

 

   

 

 

 

Total Popular U.S.

     (1,721     (266     1,556  
  

 

 

   

 

 

   

 

 

 

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

     3,781       (7,881     21,030  
  

 

 

   

 

 

   

 

 

 

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

   $ 677,792     $ 695,366     $ 800,797  
  

 

 

   

 

 

   

 

 

 

Balance at beginning of period - unfunded commitments

   $ 7,897     $ 8,400     $ 15,851  

Provision for credit losses (benefit)

     (843     (503     (6,282
  

 

 

   

 

 

   

 

 

 

Balance at end of period - unfunded commitments [1]

   $ 7,054     $ 7,897     $ 9,569  
  

 

 

   

 

 

   

 

 

 

POPULAR, INC.

      

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

     0.05     (0.11 )%      0.29

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

     (380.98 )%      N.M.       (360.34 )% 

BPPR

      

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

     0.11     (0.15 )%      0.36

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

     (230.12 )%      N.M.       (205.28 )% 

Popular U.S.

      

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

     (0.08 )%      (0.01 )%      0.08

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

     101.34     N.M.       N.M.  
  

 

 

   

 

 

   

 

 

 

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 First Quarter 2022 Earnings Release

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

(Unaudited)

 

31-Mar-22

 

(Dollars in thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

Total ACL

   $ 204,643     $ 6,539     $ 149,206     $ 18,398     $ 299,006     $ 677,792  

Total loans held-in-portfolio

   $ 14,028,246     $ 744,783     $ 7,326,346     $ 1,426,122     $ 6,062,693     $ 29,588,190   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     1.46     0.88     2.04     1.29     4.93     2.29
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

31-Dec-21

 

(Dollars in thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

Total ACL

   $ 215,805     $ 6,363     $ 154,478     $ 17,578     $ 301,142     $ 695,366  

Total loans held-in-portfolio

   $ 13,732,701     $ 716,220     $ 7,427,196     $ 1,381,319     $ 5,983,121     $ 29,240,557  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     1.57     0.89     2.08     1.27     5.03     2.38
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Variance

 

(Dollars in thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

Total ACL

   $ (11,162 )      $ 176     $ (5,272 )      $ 820     $ (2,136 )      $ (17,574

Total loans held-in-portfolio

   $      295,545         $   28,563        $   (100,850 )      $      44,803        $     79,572          $      347,633     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

29


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

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

(Unaudited)

 

31-Mar-22

 

Puerto Rico

 

(In thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

ACL

   $ 145,471     $ 2,414     $ 131,362     $ 18,398     $ 278,966     $ 576,611  

Loans held-in-portfolio

   $ 7,557,755     $ 127,325     $ 6,123,663     $ 1,426,122     $ 5,777,394     $ 21,012,259  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     1.92     1.90     2.15     1.29     4.83     2.74
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

31-Dec-21

 

Puerto Rico

 

(In thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

ACL

   $ 151,928     $ 1,641     $ 138,286     $ 17,578     $ 284,729     $ 594,162  

Loans held-in-portfolio

   $ 7,396,869     $ 87,111     $ 6,251,866     $ 1,381,319     $ 5,748,217     $ 20,865,382  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     2.05     1.88     2.21     1.27     4.95     2.85
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Variance

 

(In thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

ACL

   $ (6,457 )      $ 773     $ (6,924 )      $ 820     $ (5,763   $ (17,551

Loans held-in-portfolio

   $     160,886         $   40,214        $   (128,203 )      $      44,803        $     29,177         $      146,877     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

30


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

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

(Unaudited)

 

31-Mar-22

 

Popular U.S.

 

(In thousands)

  Commercial     Construction     Mortgage     Consumer     Total  

ACL

  $ 59,172     $ 4,125     $ 17,844     $ 20,040     $ 101,181  

Loans held-in-portfolio

  $ 6,470,491     $ 617,458     $ 1,202,683     $ 285,299     $ 8,575,931   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

    0.91     0.67     1.48     7.02     1.18
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

31-Dec-21

 

Popular U.S.

 

(In thousands)

  Commercial     Construction     Mortgage     Consumer     Total  

ACL

  $ 63,877     $ 4,722     $ 16,192     $ 16,413     $ 101,204  

Loans held-in-portfolio

  $ 6,335,832     $ 629,109     $ 1,175,330     $ 234,904     $ 8,375,175  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

    1.01     0.75     1.38     6.99     1.21
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Variance

 

(In thousands)

  Commercial     Construction     Mortgage     Consumer     Total  

ACL

  $ (4,705 )      $ (597 )      $ 1,652     $ 3,627       $ (23

Loans held-in-portfolio

  $    134,659         $   (11,651 )      $      27,353        $     50,395       $    200,756     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

31


Popular, Inc.

Financial Supplement to First Quarter 2022 Earnings Release

Table Q - Reconciliation to GAAP Financial Measures

(Unaudited)

 

(In thousands, except share or per share information)

   31-Mar-22     31-Dec-21     31-Mar-21  

Total stockholders’ equity

   $ 4,671,246     $ 5,969,397     $ 5,897,559  

Less: Preferred stock

     (22,143     (22,143     (22,143

Less: Goodwill

     (720,293     (720,293     (671,122

Less: Other intangibles

     (15,328     (16,219     (21,415
  

 

 

   

 

 

   

 

 

 

Total tangible common equity

   $ 3,913,482     $ 5,210,742     $ 5,182,879  
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 69,525,082     $ 75,097,899     $ 66,870,268  

Less: Goodwill

     (720,293     (720,293     (671,122

Less: Other intangibles

     (15,328     (16,219     (21,415
  

 

 

   

 

 

   

 

 

 

Total tangible assets

   $ 68,789,461     $ 74,361,387     $ 66,177,731  
  

 

 

   

 

 

   

 

 

 

Tangible common equity to tangible assets

     5.69     7.01     7.83

Common shares outstanding at end of period

     76,487,523       79,851,169       84,379,180  

Tangible book value per common share

   $ 51.16     $ 65.26     $ 61.42  
  

 

 

   

 

 

   

 

 

 

 

     Quarterly average  

Total stockholders’ equity [1]

   $ 5,983,309     $ 5,961,214     $ 5,693,672  

Less: Preferred Stock

     (22,143     (22,143     (22,143

Less: Goodwill

     (720,292     (706,184     (671,121

Less: Other intangibles

     (15,881     (19,889     (22,104
  

 

 

   

 

 

   

 

 

 

Total tangible equity

   $   5,224,993     $   5,212,998     $   4,978,304  

Return on average tangible common equity

     16.40     15.66     21.37
  

 

 

   

 

 

   

 

 

 

 

[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

 

32