EX-99.1 2 d203637dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Popular, Inc. Announces Second Quarter 2022 Financial Results

 

   

Net income of $211.4 million in Q2 2022, compared to net income of $211.7 million in Q1 2022.

 

   

Net interest margin of 3.09% in Q2 2022, compared to 2.75% in Q1 2022; net interest margin on a taxable equivalent basis of 3.45% in Q2 2022, compared to 3.05% in Q1 2022.

 

   

Credit Quality:

 

   

Non-performing loans held-in-portfolio (“NPLs”) decreased by $42.0 million from Q1 2022; NPLs to loans ratio at 1.6% vs. 1.8% in Q1 2022;

 

   

Net charge-offs (“NCOs”) increased by $2.3 million from Q1 2022; annualized NCOs at 0.08% of average loans held-in-portfolio vs. 0.05% in Q1 2022;

 

   

Allowance for credit losses (“ACL”) to loans held-in-portfolio at 2.24% vs. 2.29% in Q1 2022; and

 

   

ACL to NPLs at 142.7% vs. 130.4% in Q1 2022.

 

   

Common Equity Tier 1 ratio of 16.39%, Common Equity per Share of $55.78 and Tangible Book Value per Share of $46.18 at June 30, 2022.

SAN JUAN, Puerto Rico — (BUSINESS WIRE) — Popular, Inc. (the “Corporation,” “Popular,” “we,” “us,” “our”) (NASDAQ:BPOP) reported net income of $211.4 million for the quarter ended June 30, 2022, compared to net income of $211.7 million for the quarter ended March 31, 2022.

Ignacio Alvarez, President and Chief Executive Officer, said: “We are very pleased with our results for the second quarter. We earned $211.4 million in net income, with increases in both net interest income and non-interest income as compared to the first quarter. Our net interest income increased by $39.6 million to $533.9 million, driven by improved margin and growth in our loan and investment portfolios. Loan growth was broad based with balances increasing in all categories, except mortgage. The increase in our net interest margin reflects higher interest rates and the strength of our deposit franchise. Consumer spending remained resilient during the quarter and deposit balances continued to grow. Credit quality remained strong with net charge offs at near record lows, and we continued to reduce our non-performing loans. Our liquidity and capital positions remain strong which provide us the flexibility to continue to invest for growth in the future while we continue returning capital to our shareholders.

While we are vigilant regarding the possible negative impacts of record inflation, higher interest rates and the war in Ukraine, we are still seeing growth in the U.S. and P.R. with a historically strong employment market and healthy consumer deposit and spending levels. In Puerto Rico we continue to benefit from the stimulative impact of federal disaster relief spending. We are confident in our ability to continue to deliver results for our shareholders at the same time as we invest in our people, businesses and communities.”

 

1


Significant Events

Acquisition of Key Customer Channels and Amendments to Commercial Contracts with Evertec

On July 1, 2022, the Corporation’s wholly owned subsidiary, Banco Popular de Puerto Rico (“BPPR”) completed its previously announced acquisition of certain assets and assumption of certain liabilities used by Evertec Group, LLC (“Evertec Group”), a wholly owned subsidiary of Evertec, Inc. (“Evertec”) (NYSE: EVTC), to service certain BPPR channels.

As a result of the closing of the transaction, BPPR acquired from Evertec Group certain critical channels, including BPPR’s retail and business digital banking and commercial cash management applications. BPPR also entered into amended and restated service agreements with Evertec Group pursuant to which Evertec Group will continue to provide various information technology and transaction processing services to Popular, BPPR and their respective subsidiaries.

Under the amended service agreements, Popular will have greater optionality to develop and enhance technology platforms and more flexibility to select service vendors, as Evertec Group will no longer have exclusive rights to provide certain of Popular’s technology services. This is expected to improve Popular’s ability to meet its customer needs in a timely manner. In addition, the amended service agreements are projected to reduce service costs as a result of discounted pricing and lowered caps on contractual pricing escalators tied to the Consumer Price Index. As part of the transaction, BPPR also strengthened its relationship with Evertec in the payments business, including through the incorporation of a revenue sharing structure for BPPR in connection with its merchant acquiring relationship with Evertec.

As consideration for the transaction, BPPR delivered to Evertec Group 4,589,169 shares of Evertec common stock valued at closing at $169 million (based on Evertec’s stock price on June 30, 2022 of $36.88), resulting in an after-tax gain of approximately $112 million.

In terms of capital, the transaction results in a negative impact of approximately $55 million in Popular’s tangible book value as a result of the net effect of the after-tax gain of the Evertec shares used as consideration for the transaction (approximately $112 million), minus approximately $167 million in goodwill and other intangible assets recognized by the Corporation in connection with the transaction and the effect of purchase accounting-related adjustments.

As a result of the transfer of the shares used as consideration for the transaction, Popular’s ownership stake in Evertec was reduced from approximately 16.3% to approximately 10.6% at the closing of the transaction. In connection with the transaction, Popular has agreed to further reduce its voting interest in Evertec to no more than 4.5%, whether through selling shares of Evertec common stock or a conversion of such shares into non-voting preferred stock within 90 days of the closing of the transaction. Popular expects to sell down its stake in Evertec to no more than 4.5%, subject to market conditions, and intends to return to shareholders, via common stock repurchases, any after-tax gains resulting from such sale, subject to the receipt of regulatory approvals.

Completion of Accelerated Share Repurchase

On July 12, 2022, the Corporation completed its previously announced accelerated share repurchase program for the repurchase of an aggregate $400 million of Popular’s common stock. Under the terms of the accelerated share repurchase agreement (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. 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 in capital surplus. Upon the final settlement of the ASR Agreement, the Corporation received an additional 1,582,922 shares of common stock and recognized approximately $120 million as treasury stock with a corresponding increase in its capital surplus account. The Corporation repurchased a total of 5,066,864 shares at an average purchase price of $78.9443 under the ASR Agreement.

 

2


Earnings Highlights

 

(Unaudited)

   Quarters ended     Six months ended  

(Dollars in thousands, except per share information)

   30-Jun-22      31-Mar-22     30-Jun-21     30-Jun-22     30-Jun-21  

Net interest income

   $ 533,862      $ 494,312     $ 487,802     $ 1,028,174     $ 966,914  

Provision for credit losses (benefit)

     9,362        (15,500     (17,015     (6,138     (99,241
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for credit losses (benefit)

     524,500        509,812       504,817       1,034,312       1,066,155  

Other non-interest income

     157,411        154,692       154,540       312,103       308,193  

Operating expenses

     406,278        402,339       368,185       808,617       743,713  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax

     275,633        262,165       291,172       537,798       630,635  

Income tax expense

     64,212        50,479       73,093       114,691       149,924  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 211,421      $ 211,686     $ 218,079     $ 423,107     $ 480,711  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net income applicable to common stock

   $ 211,068      $ 211,333     $ 217,726     $ 422,401     $ 480,005  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share-basic

   $ 2.77      $ 2.69     $ 2.67     $ 5.46     $ 5.80  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share-diluted

   $ 2.77      $ 2.69     $ 2.66     $ 5.46     $ 5.79  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

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

Net interest income, on a taxable equivalent basis, is presented with its different components in Table D and E for the quarter and year ended June 30, 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 June 30, 2022 was $533.9 million, compared to $494.3 million in the previous quarter, an increase of $39.6 million. Net interest income, on a taxable equivalent basis, for the second quarter of 2022 was $595.5 million compared to $548.1 million in the first quarter of 2022, or an increase of $47.4 million.

Net interest margin for the quarter increased 34 basis points to 3.09% from 2.75% in the first quarter of 2022. On a taxable equivalent basis, net interest margin for the second quarter of 2022 was 3.45%, compared to 3.05% in the prior quarter. The improved net interest margin is driven by a higher interest rate environment that resulted in higher yields on variable rate assets, as well as new originations and investments, partially offset by an increase in funding costs. The composition of earning assets in the second quarter of the year also impacted the net interest margin positively as a higher proportion of earning assets was concentrated in loan portfolios. The main variances in net interest income on a taxable equivalent basis were:

 

   

higher interest income from money market, trading and investment securities by $30.9 million, resulting from higher yield of the portfolio by 44 basis points driven by the increase in the interest on excess funds at the Federal Reserve and higher yield of the investment portfolio. The latter increase is mainly due to the maturity of U.S. Treasury Bills held in the available-for-sale securities portfolio and further re-investment on longer-term tax-exempt U.S. Treasury notes;

 

   

higher interest income from commercial loans by $10.9 million due to higher average volume of loans by $486 million in a higher rate environment, partially offset by lower average volume and income of loans under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) by $116 million and $5.5 million, respectively. Both BPPR and Popular Bank (“PB” or “Popular U.S.”) experienced growth in commercial loans despite the anticipated cancellation of PPP loans. Quarter-over-quarter, the Corporation’s loan portfolio increased by $654 million, in average, reflecting increases across all major loan segments except mortgages, including loan growth of $351 million in BPPR. Furthermore, one more day in the quarter resulted in approximately $1.9 million increase in interest income; and

 

3


   

higher interest income from consumer loans, mainly driven by higher average volume by $116 million and increase in the yield of the portfolio by 14 basis points; both banks contributed to the increase in consumer loans;

partially offset by:

 

   

higher interest expense on deposits by $3.0 million due to the increase in rates, partially offset by the decrease in average deposit balances driven by Puerto Rico government deposits due to the closing of the Commonwealth of Puerto Rico’s Plan of Adjustment at the end of the first quarter.

The Corporation recognized income of $5.1 million related to loans issued under the SBA PPP, compared to $10.6 million in the previous quarter. These loans carried a yield of approximately 15.04% in the quarter, including the amortization of fees received under the program, compared to 17.01% in the first quarter of 2022. This portfolio of loans issued under the SBA PPP declined by $68 million in BPPR to a balance of $46 million and declined by $16 million in PB to a balance of $43 million. On June 30, 2022, the SBA PPP portfolio at BPPR and PB had a remaining aggregate balance of unamortized fees of $3.3 million.

Net interest income for the BPPR segment amounted to $447.8 million for the second quarter of 2022, compared to $415.2 million for the first quarter of 2022. Net interest margin for the second and first quarters of 2022 was 3.02% and 2.67%, respectively, an improvement of 35 basis points quarter-over-quarter. As discussed above, the net interest margin was impacted by higher volume and yield on investments and loans, partially offset by lower SBA PPP income. The cost of interest-bearing deposits was 0.19%, increasing 3 basis points from the first quarter of 2022. Total deposit cost for the quarter also increased by 2 basis points to 0.14%.

Net interest income for PB was $93.4 million for the quarter ended June 30, 2022, compared to $86.5 million during the previous quarter. Net interest margin for the quarter was 3.76%, an increase of 20 basis points from the 3.56% reported in the first quarter. The increase in net interest income results mostly from a higher volume of commercial and consumer loans, partially offset by higher costs on deposit driven by the change in market rates. The cost of interest-bearing deposits was 0.54%, increasing 8 basis points from the 0.46% reported in the first quarter of 2022, while the total cost of deposits, including demand deposits, was 0.42%, an increase of 6 basis points when compared to 0.36% in the previous quarter.

Non-interest income

Non-interest income increased by $2.7 million to $157.4 million for the quarter ended June 30, 2022, compared to $154.7 million for the quarter ended March 31, 2022. The variance in non-interest income was primarily driven by:

 

   

higher other service fees by $4.3 million due to higher credit card fees by $4.5 million mainly in interchange income and higher debit card fees, partially offset by lower insurance fees;

partially offset by:

 

   

higher losses on equity securities by $2.0 million mainly related to securities held for deferred benefit plans, which have an offsetting positive variance in personnel costs; and

 

   

lower other operating income by $3.1 million mainly due to lower earnings from the portfolio of equity method investments and lower income from the sale of auto rental units.

 

4


Refer to Table B for further details.

Operating expenses

Operating expenses for the second quarter of 2022 totaled $406.3 million, an increase of $3.9 million when compared to the first quarter of 2022. The variance in operating expenses was driven primarily by:

 

   

higher personnel cost by $1.8 million mainly due to higher incentives related to the profit-sharing plan which is tied to the Corporation’s financial performance, and higher salaries; partially offset by lower performance shares and restricted stock expenses;

 

   

higher professional fees by $6.4 million mainly due to higher programming, processing and other technology services due to higher processing and service charges; and

 

   

higher business promotion expenses by $6.3 million mainly due to higher credit cards rewards expense by $3.9 million as a result of transactional volumes.

partially offset by:

 

   

lower other real estate owned (OREO) expenses by $5.1 million mainly due to higher gain on sale on mortgage and commercial properties; and

 

   

lower other operating expenses by $6.3 million mainly as result of lower legal reserves.

Full-time equivalent employees were 8,615 as of June 30, 2022, compared to 8,492 as of March 31, 2022.

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

Income taxes

For the quarter ended June 30, 2022, the Corporation recorded an income tax expense of $64.2 million, compared to $50.5 million for the previous quarter. The increase in income tax expense was mainly attributable to higher income before tax and lower exempt income during the second quarter of 2022. The effective tax rate (“ETR”) for the second quarter of 2022 was 23%, compared to 19% for the previous quarter. 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 17% to 20%. This range includes the impact of the recently closed Evertec transaction and the effect of the expected reduction in Popular’s voting interest in Evertec through the sale of its holdings of common stock or a conversion of such shares to non-voting preferred stock, either of which would trigger mark-to-market accounting on any remaining stake in Evertec.

Credit Quality

During the second quarter of 2022, the Corporation continued to show strong credit quality trends and low credit costs with low levels of NCOs and decreasing NPLs. We continue to closely monitor changes in the macroeconomic environment and on borrower performance, given potential economic headwinds, rising interest rates 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 second quarter of 2022:

 

   

At June 30, 2022, total non-performing loans held-in-portfolio decreased by $42.0 million from March 31, 2022. BPPR’s NPLs decreased by $42.0 million, mostly driven by lower commercial and mortgage NPLs by $21.3 million and $21.9 million, respectively. The mortgage NPLs decrease was mainly due to the combined effects of collection efforts, increased foreclosure activity and sustained low levels of early delinquency compared with pre-pandemic trends. PB’s NPLs remained flat quarter-over-quarter. At June 30, 2022, the ratio of NPLs to total loans held-in-portfolio was 1.6%, compared to 1.8% in the first quarter of 2022.

 

   

Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $5.2 million quarter-over-quarter. In BPPR, total inflows decreased by $6.0 million, mostly driven by lower commercial and mortgage inflows of $4.5 million and $1.5 million, respectively. Mortgage inflows continued trending lower than pre-pandemic levels. NPL inflows at PB remained essentially flat quarter-over-quarter.

 

5


   

NCOs amounted to $6.1 million, an unfavorable variance of $2.3 million when compared to the first quarter of 2022. PB’s NCOs reflected an unfavorable variance of $2.5 million, as the prior quarter was a net recovery of $1.7 million. BPPR‘s NCOs were $5.3 million, flat quarter-over-quarter. During the second quarter of 2022, the Corporation’s ratio of annualized net charge-offs to average loans held-in-portfolio was 0.08%, compared to 0.05% in the first quarter of 2022. Refer to Table M for further information on net charge-offs and related ratios.

 

   

At June 30, 2022, the ACL increased by $4.0 million, or 0.6%, from the first quarter of 2022 to $681.8 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. Annualized 2022 GDP growth of 2.8% is expected for both Puerto Rico and United States, compared to 3.5% and 3.7%, respectively, in the previous quarter. Changes in assumptions related to fiscal stimulus, higher energy prices and tighter financial market conditions contributed to the reduction. The 2022 average unemployment rate is forecasted at 6.9% and 3.5% for Puerto Rico and United States, respectively, improving from 7.3% and 3.6%, respectively, in the previous forecast. Puerto Rico’s unemployment rate forecast benefits from the Bureau of Labor Statistics (“BLS”) revisions that showed a stronger than expected labor market.

 

   

In BPPR, the ACL increased by $4.0 million, mainly driven by higher loan volumes and changes in the macroeconomic scenarios. The ACL for the PB segment remained flat quarter-over-quarter as higher loan volumes in the commercial real estate and consumer portfolios offset reductions in qualitative reserves and favorable credit quality. The Corporation’s ratio of the allowance for credit losses to loans held-in-portfolio was 2.24% in the second quarter of 2022, compared to 2.29% in the previous quarter. The ratio of the allowance for credit losses to NPLs held-in-portfolio stood at 142.7%, compared to 130.4% in the previous quarter.

 

   

The provision for credit losses for the loan portfolios for the second quarter of 2022 was an expense of $9.9 million, compared to a benefit of $14.4 million in the previous quarter, reflecting the previously mentioned changes in the allowance for credit losses. The provision for the BPPR segment was an expense of $9.1 million, compared to a benefit of $12.7 million in the previous quarter, while the provision for the PB segment was an expense of $0.7 million, compared to a benefit of $1.7 million in the previous quarter.

 

   

The provision for unfunded commitments for the second quarter of 2022 was a benefit of $0.2 million, compared to a benefit of $0.8 million in the previous quarter. The provision for credit losses in our investment portfolio was a benefit of $0.3 million flat from the first quarter of 2022. The provision for unfunded loan commitments, provision for credit losses on our loan and lease portfolios and provision for credit losses on our investment portfolio are aggregated and presented in the provision for credit losses caption in our Statement of Operations

 

6


Non-Performing Assets

 

(Unaudited)

                  

(In thousands)

   30-Jun-22     31-Mar-22     30-Jun-21  

Non-performing loans held-in-portfolio

   $ 477,924     $ 519,921     $ 685,183  

Non-performing loans held-for-sale

     —         —         8,700  

Other real estate owned (“OREO”)

     92,137       90,567       73,272  
  

 

 

   

 

 

   

 

 

 

Total non-performing assets

   $ 570,061     $ 610,488     $ 767,155  
  

 

 

   

 

 

   

 

 

 

Net charge-offs (recoveries) for the quarter

   $ 6,073     $ 3,781     $ (1,291
  

 

 

   

 

 

   

 

 

 

Ratios:

                  

Loans held-in-portfolio

   $ 30,370,936     $ 29,588,190     $ 29,062,617  

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

     1.57     1.76     2.36

Allowance for credit losses to loans held-in-portfolio

     2.24       2.29       2.70  

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

     142.65       130.36       114.68  
  

 

 

   

 

 

   

 

 

 

Refer to Table K for additional information.

      

Provision for Credit Losses (Benefit) - Loan Portfolios

 

(Unaudited)

   Quarters ended     Six months ended  

(In thousands)

   30-Jun-22      31-Mar-22     30-Jun-21     30-Jun-22     30-Jun-21  

Provision for credit losses (benefit) - loan portfolios:

           

BPPR

   $ 9,128      $ (12,661   $ (22,488   $ (3,533   $ (62,464

Popular U.S.

     733        (1,744     4,988       (1,011     (30,815
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total provision for credit losses (benefit) - loan portfolios

   $ 9,861      $ (14,405   $ (17,500   $ (4,544   $ (93,279
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

7


Credit Quality by Segment

 

(Unaudited)                   

(In thousands)

   Quarters ended  

BPPR

   30-Jun-22     31-Mar-22     30-Jun-21  

Provision for credit losses (benefit) - loan portfolios

   $ 9,128     $ (12,661   $ (22,488

Net charge-offs (recoveries)

     5,332       5,502       (1,483

Total non-performing loans held-in-portfolio

     444,831       486,816       656,789  

Allowance / loans held-in-portfolio

     2.70     2.74     3.13

Allowance / non-performing loans held-in-portfolio

     130.52     118.45     100.77

 

     Quarters ended  

Popular U.S.

   30-Jun-22     31-Mar-22     30-Jun-21  

Provision for credit losses (benefit) - loan portfolios

   $ 733     $ (1,744   $ 4,988  

Net charge-offs (recoveries)

     741       (1,721     192  

Total non-performing loans held-in-portfolio

     33,093       33,105       28,394  

Allowance / loans held-in-portfolio

     1.14     1.18     1.57

Allowance / non-performing loans held-in-portfolio

     305.72     305.64     436.49

Financial Condition Highlights

 

(Unaudited)

      

(In thousands)

   30-Jun-22      31-Mar-22      30-Jun-21  

Cash and money market investments

   $ 10,215,946      $ 10,508,840      $ 18,333,650  

Investment securities

     28,138,453        26,658,289        22,647,401  

Loans

     30,370,936        29,588,190        29,062,617  

Total assets

     71,501,931        69,525,082        72,657,293  

Deposits

     65,327,664        62,862,295        64,641,776  

Borrowings

     959,135        1,060,706        1,267,545  

Total liabilities

     67,208,582        64,853,836        66,842,679  

Stockholders’ equity

     4,293,349        4,671,246        5,814,614  

 

8


Total assets increased by $2.0 billion from the first quarter of 2022, driven by:

 

   

an increase in debt securities held-to-maturity of $1.6 billion due to the purchase of U.S. Treasuries; and

 

   

an increase in loans held-in-portfolio of $0.8 billion mainly due to commercial loans growth at both BPPR and PB and an increase in consumer loans, mainly at BPPR, including auto loans, credit cards and other consumer loans;

partially offset by:

 

   

a decrease of $0.4 billion in money market investments, in part due to the purchase of U.S. Treasury securities;

Total liabilities increased by $2.4 billion from the first quarter of 2022, driven by:

 

   

an increase of $2.5 billion in deposits, mainly in Puerto Rico public sector as well as private demand deposit and savings accounts;

partially offset by:

 

   

a decrease in borrowings of $99.7 million, mainly due to the maturity during this quarter of $100 million in borrowings at PB.

Stockholders’ equity decreased by $377.9 million from the first quarter of 2022, principally due to an increase in accumulated unrealized losses on debt securities available-for-sale by $563.4 million due to a decline in the fair value of fixed-rate debt securities as a result of the rising interest rate environment, and to dividends, partially offset by the net income of $211.4 million for the quarter.

Common equity tier-1 ratio (“CET1”), common equity per share and tangible book value per share were 16.39%, $55.78 and $46.18, respectively, at June 30, 2022, compared to 16.26%, $60.78 and $51.16 at March 31, 2022. 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 regarding Popular’s acquisition of certain assets and assumption of certain liabilities from EVERTEC and the transactions described in this press release (the “Transaction”) and 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 Popular’s 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; operational risks that may affect Popular 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, in our Form 10-Q for the quarter ended March 31, 2022 and in our Form 10-Q for the quarter ended June 30, 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 Thursday, July 28, 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 a dial-in telephone number 1-844-200-6205 (Toll Free) or 1-646-904-5544 (Local). The dial-in access code is 491702.

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 Thursday, August 25, 2022. The replay dial in is: 1-866-813-9403 or 1-929-458-6194. The replay passcode is 436694.

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

 

10


Popular, Inc.

Financial Supplement to Second 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

Table F - Mortgage Banking Activities and Other Service Fees

Table G - Loans and Deposits

Table H - Loan Delinquency - PUERTO RICO OPERATIONS

Table I - Loan Delinquency - POPULAR U.S. OPERATIONS

Table J - Loan Delinquency - CONSOLIDATED

Table K - Non-Performing Assets

Table L - Activity in Non-Performing Loans

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

Table N - Allowance for Credit Losses - Loan Portfolios - CONSOLIDATED

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

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

Table Q - Reconciliation to GAAP Financial Measures

 

11


POPULAR, INC.

Financial Supplement to Second Quarter 2022 Earnings Release

Table A - Selected Ratios and Other Information

(Unaudited)

 

     Quarters ended     Six months ended  
     30-Jun-22     31-Mar-22     30-Jun-21     30-Jun-22     30-Jun-21  

Basic EPS

   $ 2.77     $ 2.69     $ 2.67     $ 5.46     $ 5.80  

Diluted EPS

   $ 2.77     $ 2.69     $ 2.66     $ 5.46     $ 5.79  

Average common shares outstanding

     76,171,784       78,443,706       81,609,435       77,301,469       82,748,275  

Average common shares outstanding - assuming dilution

     76,286,883       78,595,463       81,772,789       77,426,274       82,888,378  

Common shares outstanding at end of period

     76,576,397       76,487,523       80,656,480       76,576,397       80,656,480  

Market value per common share

   $ 76.93     $ 81.74     $ 75.05     $ 76.93     $ 75.05  

Market capitalization - (In millions)

   $ 5,891     $ 6,252     $ 6,053     $ 5,891     $ 6,053  

Return on average assets

     1.17     1.14     1.24     1.15     1.42

Return on average common equity

     14.58     14.38     15.43     14.48     17.08

Net interest margin (non-taxable equivalent basis)

     3.09     2.75     2.91     2.92     2.99

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

     3.45     3.05     3.22     3.24     3.31

Common equity per share

   $ 55.78     $ 60.78     $ 71.82     $ 55.78     $ 71.82  

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

   $ 46.18     $ 51.16     $ 63.24     $ 46.18     $ 63.24  

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

     5.00     5.69     7.09     5.00     7.09

Return on average tangible common equity [1]

     16.70     16.40     17.58     16.55     19.46

Tier 1 capital

     16.46     16.33     16.62     16.46     16.62

Total capital

     18.29     18.19     19.09     18.29     19.09

Tier 1 leverage

     7.56     6.98     7.34     7.56     7.34

Common Equity Tier 1 capital

     16.39     16.26     16.55     16.39     16.55

 

[1]

Refer to Table Q for reconciliation to GAAP financial measures.

 

12


POPULAR, INC.

Financial Supplement to Second Quarter 2022 Earnings Release

Table B - Consolidated Statement of Operations

(Unaudited)

 

     Quarters ended     Variance     Quarter ended     Variance     Six months ended  
                 Q2 2022           Q2 2022              

(In thousands, except per share information)

   30-Jun-22     31-Mar-22     vs. Q1 2022     30-Jun-21     vs. Q2 2021     30-Jun-22     30-Jun-21  

Interest income:

              

Loans

   $ 446,245     $ 426,791     $ 19,454     $ 433,781     $ 12,464     $ 873,036     $ 868,430  

Money market investments

     23,742       6,464       17,278       4,274       19,468       30,206       7,386  

Investment securities

     101,774       96,466       5,308       91,706       10,068       198,240       177,396  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     571,761       529,721       42,040       529,761       42,000       1,101,482       1,053,212  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense:

              

Deposits

     27,827       24,783       3,044       28,060       (233     52,610       58,261  

Short-term borrowings

     248       80       168       62       186       328       205  

Long-term debt

     9,824       10,546       (722     13,837       (4,013     20,370       27,832  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest expense

     37,899       35,409       2,490       41,959       (4,060     73,308       86,298  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     533,862       494,312       39,550       487,802       46,060       1,028,174       966,914  

Provision for credit losses (benefit)

     9,362       (15,500     24,862       (17,015     26,377       (6,138     (99,241
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for credit losses (benefit)

     524,500       509,812       14,688       504,817       19,683       1,034,312       1,066,155  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Service charges on deposit accounts

     41,809       40,713       1,096       40,153       1,656       82,522       79,773  

Other service fees

     81,451       77,134       4,317       76,382       5,069       158,585       147,010  

Mortgage banking activities

     13,575       12,865       710       7,448       6,127       26,440       24,791  

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

     (4,109     (2,094     (2,015     1,565       (5,674     (6,203     1,986  

Net loss on trading account debt securities

     51       (723     774       (47     98       (672     (92

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

     —         —         —         (73     73       —         (73

Adjustments (expense) to indemnity reserves on loans sold

     170       (745     915       1,668       (1,498     (575     970  

Other operating income

     24,464       27,542       (3,078     27,444       (2,980     52,006       53,828  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest income

     157,411       154,692       2,719       154,540       2,871       312,103       308,193  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

              

Personnel costs

              

Salaries

     101,847       98,673       3,174       90,294       11,553       200,520       179,629  

Commissions, incentives and other bonuses

     29,787       31,339       (1,552     26,374       3,413       61,126       59,592  

Pension, postretirement and medical insurance

     13,730       12,783       947       13,289       441       26,513       24,213  

Other personnel costs, including payroll taxes

     23,424       24,201       (777     24,247       (823     47,625       50,249  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total personnel costs

     168,788       166,996       1,792       154,204       14,584       335,784       313,683  

Net occupancy expenses

     26,214       24,723       1,491       24,562       1,652       50,937       50,575  

Equipment expenses

     25,088       23,479       1,609       22,805       2,283       48,567       44,380  

Other taxes

     15,780       15,715       65       13,205       2,575       31,495       27,164  

Professional fees

              

Collections, appraisals and other credit related fees

     2,802       2,226       576       3,486       (684     5,028       6,806  

Programming, processing and other technology services

     73,305       69,374       3,931       67,152       6,153       142,679       133,518  

Legal fees, excluding collections

     3,091       3,954       (863     2,367       724       7,045       4,732  

Other professional fees

     35,674       32,943       2,731       28,148       7,526       68,617       56,045  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total professional fees

     114,872       108,497       6,375       101,153       13,719       223,369       201,101  

Communications

     5,993       6,147       (154     6,005       (12     12,140       12,838  

Business promotion

     21,353       15,083       6,270       16,511       4,842       36,436       29,032  

FDIC deposit insurance

     6,463       7,372       (909     5,742       721       13,835       11,710  

Other real estate owned (OREO) income

     (7,806     (2,713     (5,093     (4,299     (3,507     (10,519     (8,832

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

     11,375       12,509       (1,134     10,917       458       23,884       23,371  

Other operating expenses

              

Operational losses

     4,061       11,825       (7,764     6,528       (2,467     15,886       14,424  

All other

     13,302       11,815       1,487       9,597       3,705       25,117       21,961  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other operating expenses

     17,363       23,640       (6,277     16,125       1,238       41,003       36,385  

Amortization of intangibles

     795       891       (96     1,255       (460     1,686       2,306  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     406,278       402,339       3,939       368,185       38,093       808,617       743,713  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax

     275,633       262,165       13,468       291,172       (15,539     537,798       630,635  

Income tax expense

     64,212       50,479       13,733       73,093       (8,881     114,691       149,924  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 211,421     $ 211,686     $ (265   $ 218,079     $ (6,658   $ 423,107     $ 480,711  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income applicable to common stock

   $ 211,068     $ 211,333     $ (265   $ 217,726     $ (6,658   $ 422,401     $ 480,005  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share - basic

   $ 2.77     $ 2.69     $ 0.08     $ 2.67     $ 0.10     $ 5.46     $ 5.80  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share - diluted

   $ 2.77     $ 2.69     $ 0.08     $ 2.66     $ 0.11     $ 5.46     $ 5.79  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Dividends Declared per Common Share

   $ 0.55     $ 0.55     $ —       $ 0.45     $ 0.10     $ 1.10     $ 0.85  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

13


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

Table C - Consolidated Statement of Financial Condition

(Unaudited)

 

                       Variance  
                       Q2 2022 vs.  

(In thousands)

   30-Jun-22     31-Mar-22     30-Jun-21     Q1 2022  

Assets:

        

Cash and due from banks

   $ 528,590     $ 439,148     $ 530,849     $ 89,442  

Money market investments

     9,687,356       10,069,692       17,802,801       (382,336

Trading account debt securities, at fair value

     32,317       36,042       35,931       (3,725

Debt securities available-for-sale, at fair value

     26,266,251       26,359,915       22,335,167       (93,664

Debt securities held-to-maturity, at amortized cost

     1,664,015       75,984       88,801       1,588,031  

Less: Allowance for credit losses

     7,495       7,844       10,214       (349
  

 

 

   

 

 

   

 

 

   

 

 

 

Total debt securities held-to-maturity, net

     1,656,520       68,140       78,587       1,588,380  
  

 

 

   

 

 

   

 

 

   

 

 

 

Equity securities

     175,870       186,348       187,502       (10,478

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

     28,546       55,150       85,315       (26,604

Loans held-in-portfolio

     30,643,443       29,856,356       29,286,225       787,087  

Less: Unearned income

     272,507       268,166       223,608       4,341  

Allowance for credit losses

     681,750       677,792       785,790       3,958  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total loans held-in-portfolio, net

     29,689,186       28,910,398       28,276,827       778,788  
  

 

 

   

 

 

   

 

 

   

 

 

 

Premises and equipment, net

     490,152       488,390       486,443       1,762  

Other real estate

     92,137       90,567       73,272       1,570  

Accrued income receivable

     216,780       204,466       203,419       12,314  

Mortgage servicing rights, at fair value

     129,877       125,358       119,467       4,519  

Other assets

     1,773,523       1,755,847       1,750,151       17,676  

Goodwill

     720,293       720,293       671,122       —    

Other intangible assets

     14,533       15,328       20,440       (795
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 71,501,931     $ 69,525,082     $ 72,657,293     $ 1,976,849  
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity:

        

Liabilities:

        

Deposits:

        

Non-interest bearing

   $ 16,663,259     $ 16,096,666     $ 14,920,887     $ 566,593  

Interest bearing

     48,664,405       46,765,629       49,720,889       1,898,776  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     65,327,664       62,862,295       64,641,776       2,465,369  
  

 

 

   

 

 

   

 

 

   

 

 

 

Assets sold under agreements to repurchase

     70,925       72,819       90,925       (1,894

Notes payable

     888,210       987,887       1,176,620       (99,677

Other liabilities

     921,783       930,835       933,358       (9,052
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     67,208,582       64,853,836       66,842,679       2,354,746  
  

 

 

   

 

 

   

 

 

   

 

 

 

Stockholders’ equity:

        

Preferred stock

     22,143       22,143       22,143       —    

Common stock

     1,046       1,046       1,045       —    

Surplus

     4,576,478       4,571,111       4,506,659       5,367  

Retained earnings

     3,311,951       3,143,004       2,670,885       168,947  

Treasury stock

     (1,665,253     (1,668,820     (1,290,427     3,567  

Accumulated other comprehensive loss, net of tax

     (1,953,016     (1,397,238     (95,691     (555,778
  

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     4,293,349       4,671,246       5,814,614       (377,897
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 71,501,931     $ 69,525,082     $ 72,657,293     $ 1,976,849  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

14


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

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

(Unaudited)

 

     Quarters ended     Variance  
     30-Jun-22     31-Mar-22     30-Jun-21     Q2 2022 vs. Q1 2022     Q2 2022 vs. Q2 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

   $ 39,326     $ 175.7        1.79   $ 43,304     $ 144.8        1.35   $ 38,136     $ 137.5        1.44   ($ 3,978   $ 30.9       0.44   $ 1,190     $ 38.2       0.35

Loans:

 

Commercial

     14,227       183.0        5.16       13,741       172.1        5.08       13,539       176.9        5.24       486       10.9       0.08       688       6.1       (0.08

Construction

     781       11.1        5.71       726       9.8        5.45       858       11.6        5.43       55       1.3       0.26       (77     (0.5     0.28  

Mortgage

     7,294       97.1        5.33       7,388       96.8        5.24       7,765       99.4        5.12       (94     0.3       0.09       (471     (2.3     0.21  

Consumer

     2,654       75.0        11.33       2,538       70.0        11.19       2,431       68.7        11.34       116       5.0       0.14       223       6.3       (0.01

Auto

     3,499       70.1        8.04       3,460       69.3        8.12       3,280       70.1        8.58       39       0.8       (0.08     219       —         (0.54

Lease financing

     1,445       21.4        5.91       1,393       20.7        5.95       1,262       19.0        6.01       52       0.7       (0.04     183       2.4       (0.10
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

     29,900       457.7        6.14       29,246       438.7        6.06       29,135       445.7        6.13       654       19.0       0.08       765       12.0       0.01  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest earning assets

   $ 69,226     $ 633.4        3.67   $ 72,550     $ 583.5        3.25   $ 67,271     $ 583.2        3.47   $ (3,324   $ 49.9       0.42   $ 1,955     $ 50.2       0.20
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for credit losses - loan portfolio

     (682          (695          (801          13           119      

Allowance for credit losses - investment securities

     (8          (8          (10          —             2      

Other non-interest earning assets

     3,787            3,782            3,906            5           (119    
  

 

 

        

 

 

        

 

 

        

 

 

       

 

 

     

Total average assets

   $ 72,323          $ 75,629          $ 70,366          $ (3,306       $ 1,957      
  

 

 

        

 

 

        

 

 

        

 

 

       

 

 

     

Liabilities and Stockholders’ Equity:

 

Interest bearing deposits:

                                 

NOW and money market

   $ 24,897     $ 8.3        0.13   $ 28,289     $ 7.3        0.10   $ 25,102     $ 8.0        0.13   $ (3,392   $ 1.0       0.03   $ (205   $ 0.3       -

Savings

     16,363       6.9        0.17       16,434       6.6        0.16       15,384       6.9        0.18       (71     0.3       0.01       979       —         (0.01

Time deposits

     7,044       12.6        0.72       6,737       10.9        0.66       7,104       13.2        0.74       307       1.7       0.06       (60     (0.6     (0.02
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits

     48,304       27.8        0.23       51,460       24.8        0.20       47,590       28.1        0.24       (3,156     3.0       0.03       714       (0.3     (0.01

Borrowings

     1,043       10.1        3.87       1,105       10.6        3.87       1,316       13.9        4.24       (62     (0.5     —         (273     (3.8     (0.37
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing liabilities

     49,347       37.9        0.31       52,565       35.4        0.27       48,906       42.0        0.34       (3,218     2.5       0.04       441       (4.1     (0.03
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest spread

          3.36          2.98          3.13         0.38         0.23
       

 

 

        

 

 

        

 

 

       

 

 

       

 

 

 

Non-interest bearing deposits

     16,254            16,142            14,920            112           1,334      

Other liabilities

     894            939            857            (45         37      

Stockholders’ equity

     5,828            5,983            5,683            (155         145      
  

 

 

        

 

 

        

 

 

        

 

 

       

 

 

     

Total average liabilities and stockholders’ equity

   $ 72,323          $ 75,629          $ 70,366          $ (3,306       $ 1,957      
  

 

 

        

 

 

        

 

 

        

 

 

       

 

 

     

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

 

  $ 595.5        3.45     $ 548.1        3.05     $ 541.2        3.22     $ 47.4       0.40     $ 54.3       0.23

Taxable equivalent adjustment

 

    61.6            53.8            53.4            7.8           8.2    
    

 

 

        

 

 

        

 

 

        

 

 

       

 

 

   

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

 

  $ 533.9        3.09     $ 494.3        2.75     $ 487.8        2.91     $ 39.6       0.34     $ 46.1       0.18
    

 

 

    

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

   

 

 

     

 

 

   

 

 

 

 

15


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

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

(Unaudited)

 

     Six months ended                    
     30-Jun-22     30-Jun-21     Variance  
     Average     Income /      Yield /     Average     Income /      Yield /     Average     Income /     Yield /  

($ amounts in millions)

   balance     Expense      Rate     balance     Expense      Rate     balance     Expense     Rate  

Assets:

                    

Interest earning assets:

                    

Money market, trading and investment securities

   $ 41,304     $ 320.6        1.56   $ 35,958     $ 267.0        1.49   $ 5,346     $ 53.6       0.07
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Loans:

                    

Commercial

     13,987       355.2        5.12       13,582       355.9        5.30       405       (0.7     (0.18

Construction

     754       20.9        5.58       884       23.5        5.38       (130     (2.6     0.20  

Mortgage

     7,341       193.9        5.28       7,816       197.8        5.06       (475     (3.9     0.22  

Consumer

     2,595       145.0        11.27       2,472       139.1        11.35       123       5.9       (0.08

Auto

     3,480       139.4        8.08       3,241       138.3        8.63       239       1.1       (0.55

Lease financing

     1,419       42.0        5.93       1,239       37.3        6.02       180       4.7       (0.09
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

     29,576       896.4        6.10       29,234       891.9        6.15       342       4.5       (0.05
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total interest earning assets

   $ 70,880     $ 1,217.0        3.45   $ 65,192     $ 1,158.9        3.58   $ 5,688     $ 58.1       (0.13 )% 
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for credit losses - loan portfolio

     (689          (845          156      

Allowance for credit losses - investment securities

     (8          (10          2      

Other non-interest earning assets

     3,779            3,900            (121    
  

 

 

        

 

 

        

 

 

     

Total average assets

   $ 73,962          $ 68,237          $ 5,725      
  

 

 

        

 

 

        

 

 

     

Liabilities and Stockholders’ Equity:

                    

Interest bearing deposits:

                    

NOW and money market

   $ 26,584     $ 15.6        0.12   $ 23,895     $ 16.2        0.14   $ 2,689     ($ 0.6     (0.02 )% 

Savings

     16,399       13.5        0.17       14,876       14.0        0.19       1,523       (0.5     (0.02

Time deposits

     6,891       23.5        0.69       7,184       28.1        0.79       (293     (4.6     (0.10
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits

     49,874       52.6        0.21       45,955       58.3        0.26       3,919       (5.7     (0.05

Borrowings

     1,074       20.7        3.88       1,330       28.0        4.24       (256     (7.3     (0.36
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing liabilities

     50,948       73.3        0.29       47,285       86.3        0.37       3,663       (13.0     (0.08
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net interest spread

          3.16          3.21         (0.05 )% 
       

 

 

        

 

 

       

 

 

 

Non-interest bearing deposits

     16,198            14,161            2,037      

Other liabilities

     911            1,103            (192    

Stockholders’ equity

     5,905            5,688            217      
  

 

 

        

 

 

        

 

 

     

Total average liabilities and stockholders’ equity

   $ 73,962          $ 68,237          $ 5,725      
  

 

 

        

 

 

        

 

 

     

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

 

  $ 1,143.7        3.24     $ 1,072.6        3.31     $ 71.1       (0.07 )% 

Taxable equivalent adjustment

 

    115.5            105.7            9.8    
    

 

 

        

 

 

        

 

 

   

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

 

  $ 1,028.2        2.92     $ 966.9        2.99     $ 61.3       (0.07 )% 
    

 

 

    

 

 

     

 

 

    

 

 

     

 

 

   

 

 

 

 

16


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

Table F - Mortgage Banking Activities and Other Service Fees

(Unaudited)

 

Mortgage Banking Activities                 
     Quarters ended     Variance     Six months ended     Variance  

(In thousands)

   30-Jun-22     31-Mar-22     30-Jun-21     Q2 2022
vs.Q1 2022
    Q2 2022
vs.Q2 2021
    30-Jun-22     30-Jun-21     2022 vs.
2021
 

Mortgage servicing fees, net of fair value adjustments:

                

Mortgage servicing fees

   $ 9,186     $ 9,323     $ 9,522     $ (137   $ (336   $ 18,509     $ 19,237     $ (728

Mortgage servicing rights fair value adjustments

     2,257       1,088       (6,239     1,169       8,496       3,345       (5,727     9,072  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total mortgage servicing fees, net of fair value adjustments

     11,443       10,411       3,283       1,032       8,160       21,854       13,510       8,344  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     36       (1,534     5,197       1,570       (5,161     (1,498     10,172       (11,670
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Trading account profit (loss):

                

Unrealized (losses) gains on outstanding derivative positions

     (2     2       —         (4     (2     —         —         —    

Realized gains (losses) on closed derivative positions

     2,430       4,135       (866     (1,705     3,296       6,565       1,636       4,929  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total trading account profit (loss)

     2,428       4,137       (866     (1,709     3,294       6,565       1,636       4,929  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Losses on repurchased loans, including interest advances

     (332     (149     (166     (183     (166     (481     (527     46  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total mortgage banking activities

   $ 13,575     $ 12,865     $ 7,448     $ 710     $ 6,127     $ 26,440     $ 24,791     $ 1,649  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Other Service Fees                      
     Quarters ended      Variance     Six months ended      Variance  

(In thousands)

   30-Jun-22      31-Mar-22      30-Jun-21      Q2 2022
vs.Q1 2022
    Q2 2022
vs.Q2 2021
    30-Jun-22      30-Jun-21      2022 vs.
2021
 

Other service fees:

                     

Debit card fees

   $ 12,882      $ 11,779      $ 12,458      $ 1,103     $ 424     $ 24,661      $ 24,035      $ 626  

Insurance fees

     12,017        14,156        12,773        (2,139     (756     26,173        25,601        572  

Credit card fees

     38,155        33,642        32,726        4,513       5,429       71,797        61,417        10,380  

Sale and administration of investment products

     6,017        5,791        5,970        226       47       11,808        11,510        298  

Trust fees

     6,143        5,927        6,165        216       (22     12,070        12,007        63  

Other fees

     6,237        5,839        6,290        398       (53     12,076        12,440        (364
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Total other service fees

   $ 81,451      $ 77,134      $ 76,382      $ 4,317     $ 5,069     $ 158,585      $ 147,010      $ 11,575  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

 

17


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

Table G - Loans and Deposits

(Unaudited)

Loans - Ending Balances

 

                          Variance  

(In thousands)

   30-Jun-22      31-Mar-22      30-Jun-21      Q2 2022 vs.Q1
2022
    Q2 2022 vs.Q2
2021
 

Loans held-in-portfolio:

 

          

Commercial

   $ 14,545,301      $ 14,028,246      $ 13,437,932      $ 517,055     $ 1,107,369  

Construction

     790,920        744,783        865,113        46,137       (74,193

Leasing

     1,480,222        1,426,122        1,297,928        54,100       182,294  

Mortgage

     7,261,955        7,326,346        7,678,478        (64,391     (416,523

Auto

     3,489,976        3,430,162        3,289,027        59,814       200,949  

Consumer

     2,802,562        2,632,531        2,494,139        170,031       308,423  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total loans held-in-portfolio

   $ 30,370,936      $ 29,588,190      $ 29,062,617      $ 782,746     $ 1,308,319  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Loans held-for-sale:

             

Commercial

   $ —        $ —        $ 1,700      $ —       $ (1,700

Construction

     —          —          7,000        —         (7,000

Mortgage

     28,546        55,150        76,615        (26,604     (48,069
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total loans held-for-sale

   $ 28,546      $ 55,150      $ 85,315      $ (26,604   $ (56,769
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total loans

   $ 30,399,482      $ 29,643,340      $ 29,147,932      $ 756,142     $ 1,251,550  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Deposits - Ending Balances

 

                          Variance  

(In thousands)

   30-Jun-22      31-Mar-22      30-Jun-21      Q2 2022 vs. Q1
2022
    Q2 2022 vs.Q2
2021
 

Demand deposits [1]

   $ 27,798,243      $ 25,684,715      $ 24,497,918      $ 2,113,528     $ 3,300,325  

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

     29,672,655        29,318,333        32,452,829        354,322       (2,780,174

Savings, NOW and money market deposits (brokered)

     761,244        768,558        683,021        (7,314     78,223  

Time deposits (non-brokered)

     6,896,786        6,964,848        6,979,349        (68,062     (82,563

Time deposits (brokered CDs)

     198,736        125,841        28,659        72,895       170,077  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total deposits

   $ 65,327,664      $ 62,862,295      $ 64,641,776      $ 2,465,369     $ 685,888  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

[1]

Includes interest and non-interest bearing demand deposits.

 

18


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

Table H - Loan Delinquency - Puerto Rico Operations

(Unaudited)

 

30-Jun-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

   $ 1,992      $ —        $ 254      $ 2,246      $ 234,308      $ 236,554      $ 254      $ —    

Commercial real estate:

                       

Non-owner occupied

     1,379        110        20,435        21,924        2,630,194        2,652,118        20,435        —    

Owner occupied

     4,894        2,860        32,155        39,909        1,366,840        1,406,749        32,155        —    

Commercial and industrial

     2,534        1,526        44,176        48,236        3,472,447        3,520,683        43,649        527  

Construction

     498        —          —          498        161,864        162,362        —          —    

Mortgage

     211,483        82,898        681,757        976,138        5,065,785        6,041,923        284,670        397,087  

Leasing

     9,970        2,164        4,665        16,799        1,463,423        1,480,222        4,665        —    

Consumer:

                       

Credit cards

     5,785        4,142        8,896        18,823        947,876        966,699        —          8,896  

Home equity lines of credit

     —          —          —          —          3,122        3,122        —          —    

Personal

     11,216        6,043        19,045        36,304        1,351,796        1,388,100        19,045        —    

Auto

     56,577        13,815        28,045        98,437        3,391,539        3,489,976        28,045        —    

Other

     242        131        12,125        12,498        120,651        133,149        11,913        212  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 306,570      $ 113,689      $ 851,553      $ 1,271,812      $ 20,209,845      $ 21,481,657      $ 444,831      $ 406,722  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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

   $ (138   $ (189   $ (20   $ (347   $ 73,660     $ 73,313     $ (20   $ —    

Commercial real estate:

                

Non-owner occupied

     (2,267     17       (192     (2,442     94,020       91,578       (192     —    

Owner occupied

     870       2,810       (17,577     (13,897     (29,856     (43,753     (17,577     —    

Commercial and industrial

     1,316       1,357       (3,991     (1,318     138,529       137,211       (3,500     (491

Construction

     (217     —         —         (217     35,254       35,037       —         —    

Mortgage

     29,086       3,524       (54,581     (21,971     (59,769     (81,740     (21,890     (32,691

Leasing

     151       (282     899       768       53,332       54,100       899       —    

Consumer:

                

Credit cards

     (32     414       (153     229       50,910       51,139       —         (153

Home equity lines of credit

     —         —         (23     (23     29       6       —         (23

Personal

     1,001       (141     (112     748       83,876       84,624       (112     —    

Auto

     5,080       2,462       531       8,073       51,741       59,814       531       —    

Other

     (295     94       (59     (260     8,329       8,069       (124     65  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 34,555     $ 10,066     $ (75,278   $ (30,657   $ 500,055     $ 469,398     $ (41,985   $ (33,293
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

20


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

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

(Unaudited)

 

30-Jun-22

 

Popular U.S.

 
     Past due                    Past due 90 days or more  
     30-59      60-89      90 days      Total                    Non-accrual      Accruing  

(In thousands)

   days      days      or more      past due      Current      Loans HIP      loans      loans  

Commercial multi-family

   $ —        $ 187      $ 280      $ 467      $ 1,895,352      $ 1,895,819      $ 280      $ —    

Commercial real estate:

                       

Non-owner occupied

     288        —          —          288        1,467,935        1,468,223        —          —    

Owner occupied

     144        —          1,416        1,560        1,465,252        1,466,812        1,416        —    

Commercial and industrial

     9,278        2,037        6,326        17,641        1,880,702        1,898,343        5,750        576  

Construction

     —          7,000        —          7,000        621,558        628,558        —          —    

Mortgage

     1,561        3,587        20,192        25,340        1,194,692        1,220,032        20,192        —    

Consumer:

                       

Credit cards

     —          —          —          —          47        47        —          —    

Home equity lines of credit

     303        16        4,705        5,024        66,431        71,455        4,705        —    

Personal

     755        470        749        1,974        232,339        234,313        749        —    

Other

     —          13        1        14        5,663        5,677        1        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 12,329      $ 13,310      $ 33,669      $ 59,308      $ 8,829,971      $ 8,889,279      $ 33,093      $ 576  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

31-Mar-22

 

Popular U.S.

 
     Past due                    Past due 90 days or more  
     30-59      60-89      90 days      Total                    Non-accrual      Accruing  

(In thousands)

   days      days      or more      past due      Current      Loans HIP      loans      loans  

Commercial multi-family

   $ —        $ —        $ —        $ —        $ 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  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

21


Variance

 
     Past due                 Past due 90 days or more  
     30-59     60-89     90 days     Total                 Non-accrual     Accruing  

(In thousands)

   days     days     or more     past due     Current     Loans HIP     loans     loans  

Commercial multi-family

   $ —       $ 187     $ 280     $ 467     $ 29,729     $ 30,196     $ 280     $ —    

Commercial real estate:

                

Non-owner occupied

     (614     (740     (374     (1,728     76,061       74,333       (374     —    

Owner occupied

     (6,241     —         739       (5,502     66,672       61,170       739       —    

Commercial and industrial

     (1,647     1,435       1,435       1,223       91,784       93,007       1,398       37  

Construction

     —         7,000       —         7,000       4,100       11,100       —         —    

Mortgage

     (11,445     2,518       (1,634     (10,561     27,910       17,349       (1,634     —    

Consumer:

                

Credit cards

     —         —         —         —         21       21       —         —    

Home equity lines of credit

     44       1       (543     (498     (2,006     (2,504     (543     —    

Personal

     16       (88     122       50       28,958       29,008       122       —    

Other

     —         12       —         12       (344     (332     —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ (19,887   $ 10,325     $ 25     $ (9,537   $ 322,885     $ 313,348     $ (12   $ 37  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

22


Popular, Inc.    

Financial Supplement to Second Quarter 2022 Earnings Release    

Table J - Loan Delinquency - Consolidated    

(Unaudited)    

 

30-Jun-22  
Popular, Inc.  
     Past due                         Past due 90 days or more  
     30-59      60-89      90 days      Total                         Non-accrual      Accruing  

(In thousands)

   days      days      or more      past due      Current      Loans HIP           loans      loans  

Commercial multi-family

   $ 1,992      $ 187      $ 534      $ 2,713      $ 2,129,660      $ 2,132,373          $ 534      $ —    

Commercial real estate:

                           

Non-owner occupied

     1,667        110        20,435        22,212        4,098,129        4,120,341            20,435        —    

Owner occupied

     5,038        2,860        33,571        41,469        2,832,092        2,873,561            33,571        —    

Commercial and industrial

     11,812        3,563        50,502        65,877        5,353,149        5,419,026            49,399        1,103  

Construction

     498        7,000        —          7,498        783,422        790,920            —          —    

Mortgage

     213,044        86,485        701,949        1,001,478        6,260,477        7,261,955            304,862        397,087  

Leasing

     9,970        2,164        4,665        16,799        1,463,423        1,480,222            4,665        —    

Consumer:

                           

Credit cards

     5,785        4,142        8,896        18,823        947,923        966,746            —          8,896  

Home equity lines of credit

     303        16        4,705        5,024        69,553        74,577            4,705        —    

Personal

     11,971        6,513        19,794        38,278        1,584,135        1,622,413            19,794        —    

Auto

     56,577        13,815        28,045        98,437        3,391,539        3,489,976            28,045        —    

Other

     242        144        12,126        12,512        126,314        138,826            11,914        212  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

Total

   $ 318,899      $ 126,999      $ 885,222      $ 1,331,120      $ 29,039,816      $ 30,370,936          $ 477,924      $ 407,298  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 
31-Mar-22  
Popular, Inc.  
     Past due                         Past due 90 days or more  
     30-59      60-89      90 days      Total                         Non-accrual      Accruing  

(In thousands)

   days      days      or more      past due      Current      Loans HIP           loans      loans  

Commercial multi-family

   $ 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  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

 

23


Variance  
     Past due                       Past due 90 days or more  
     30-59     60-89     90 days     Total                       Non-accrual     Accruing  

(In thousands)

   days     days     or more     past due     Current     Loans HIP           loans     loans  

Commercial multi-family

   $ (138   $ (2   $ 260     $ 120     $ 103,389     $ 103,509          $ 260     $ —    

Commercial real estate:

                     

Non-owner occupied

     (2,881     (723     (566     (4,170     170,081       165,911            (566     —    

Owner occupied

     (5,371     2,810       (16,838     (19,399     36,816       17,417            (16,838     —    

Commercial and industrial

     (331     2,792       (2,556     (95     230,313       230,218            (2,102     (454

Construction

     (217     7,000       —         6,783       39,354       46,137            —         —    

Mortgage

     17,641       6,042       (56,215     (32,532     (31,859     (64,391          (23,524     (32,691

Leasing

     151       (282     899       768       53,332       54,100            899       —    

Consumer:

                     

Credit cards

     (32     414       (153     229       50,931       51,160            —         (153

Home equity lines of credit

     44       1       (566     (521     (1,977     (2,498          (543     (23

Personal

     1,017       (229     10       798       112,834       113,632            10       —    

Auto

     5,080       2,462       531       8,073       51,741       59,814            531       —    

Other

     (295     106       (59     (248     7,985       7,737            (124     65  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

        

 

 

   

 

 

 

Total

   $ 14,668     $ 20,391     $ (75,253   $ (40,194   $ 822,940     $ 782,746          $ (41,997   $ (33,256
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

        

 

 

   

 

 

 

 

24


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

Table K - Non-Performing Assets

(Unaudited)

 

                                         Variance  

(Dollars in thousands)

   30-Jun-22     As a % of
loans HIP by
category
    31-Mar-22     As a % of
loans HIP by
category
    30-Jun-21     As a % of
loans HIP by
category
    Q2 2022 vs.
Q1 2022
    Q2 2022 vs.
Q2 2021
 

Non-accrual loans:

                

Commercial

   $ 103,939       0.7   $ 123,185       0.9   $ 225,565       1.7   $ (19,246   $ (121,626

Construction

     —         —         —         —         14,877       1.7       —         (14,877

Leasing

     4,665       0.3       3,766       0.3       2,286       0.2       899       2,379  

Mortgage

     304,862       4.2       328,386       4.5       383,976       5.0       (23,524     (79,114

Auto

     28,045       0.8       27,514       0.8       13,286       0.4       531       14,759  

Consumer

     36,413       1.3       37,070       1.4       45,193       1.8       (657     (8,780
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing loans held-in-portfolio

     477,924       1.6     519,921       1.8     685,183       2.4     (41,997     (207,259

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

     —           —           8,700         —         (8,700

Other real estate owned (“OREO”)

     92,137         90,567         73,272         1,570       18,865  
  

 

 

     

 

 

     

 

 

     

 

 

   

 

 

 

Total non-performing assets

   $ 570,061       $ 610,488       $ 767,155       $ (40,427   $ (197,094
  

 

 

     

 

 

     

 

 

     

 

 

   

 

 

 

Accruing loans past due 90 days or more [2]

   $ 407,298       $ 440,554       $ 633,315       $ (33,256   $ (226,017
  

 

 

     

 

 

     

 

 

     

 

 

   

 

 

 

Ratios:

                

Non-performing assets to total assets

     0.80       0.88       1.06      

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

     1.57         1.76         2.36        

Allowance for credit losses to loans held-in-portfolio

     2.24         2.29         2.70        

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

     142.65         130.36         114.68        

 

[1]

There were no non-performing loans held-for-sale as of June 30, 2022 and March 31, 2022 (June 30, 2021 - $7 million in construction loans and $2 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 $11 million at June 30, 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 (March 31, 2022 - $13 million; June 30, 2021 - $15 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 $237 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of June 30, 2022 (March 31, 2022 - $266 million; June 30, 2021 - $363 million). Furthermore, the Corporation has approximately $43 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 (March 31, 2022 - $45 million; June 30, 2021 - $56 million).

 

25


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

Table L - Activity in Non-Performing Loans

(Unaudited)

 

Commercial loans held-in-portfolio:

 
     Quarter ended     Quarter ended  
     30-Jun-22     31-Mar-22  

(In thousands)

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

Beginning balance NPLs

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

Plus:

            

New non-performing loans

     1,666       7,325       8,991       6,127       2,999       9,126  

Advances on existing non-performing loans

     —         1       1       —         2,505       2,505  

Less:

            

Non-performing loans transferred to OREO

     (914     —         (914     (3,052     —         (3,052

Non-performing loans charged-off

     (951     (89     (1,040     (256     (73     (329

Loans returned to accrual status / loan collections

     (21,090     (5,194     (26,284     (5,084     (5,560     (10,644
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ 96,493     $ 7,446     $ 103,939     $ 117,782     $ 5,403     $ 123,185  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Construction loans held-in-portfolio:

 
     Quarter ended     Quarter ended  
     30-Jun-22     31-Mar-22  

(In thousands)

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

Beginning balance NPLs

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

Less:

            

Loans returned to accrual status / loan collections

     —         —         —         (485     —         (485
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ —       $ —       $ —       $ —       $ —       $ —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Mortgage loans held-in-portfolio:

 
     Quarter ended     Quarter ended  
     30-Jun-22     31-Mar-22  

(In thousands)

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

Beginning balance NPLs

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

Plus:

            

New non-performing loans

     36,665       3,793       40,458       38,193       4,800       42,993  

Advances on existing non-performing loans

     —         110       110       —         134       134  

Less:

            

Non-performing loans transferred to OREO

     (10,627     —         (10,627     (10,344     (85     (10,429

Non-performing loans charged-off

     (295     (127     (422     (467     —         (467

Loans returned to accrual status / loan collections

     (47,633     (5,410     (53,043     (54,709     (4,992     (59,701
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ 284,670     $ 20,192     $ 304,862     $ 306,560     $ 21,826     $ 328,386  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

26


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

 
     Quarter ended     Quarter ended  
     30-Jun-22     31-Mar-22  

(In thousands)

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

Beginning balance NPLs

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

Plus:

            

New non-performing loans

     38,331       11,118       49,449       44,320       7,799       52,119  

Advances on existing non-performing loans

     —         111       111       —         2,639       2,639  

Less:

            

Non-performing loans transferred to OREO

     (11,541     —         (11,541     (13,396     (85     (13,481

Non-performing loans charged-off

     (1,246     (216     (1,462     (723     (73     (796

Loans returned to accrual status / loan collections

     (68,723     (10,604     (79,327     (60,278     (10,552     (70,830
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance NPLs

   $ 381,163     $ 27,638     $ 408,801     $ 424,342     $ 27,229     $ 451,571  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

27


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

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

(Unaudited)

 

     Quarters ended  

(Dollars in thousands)

   30-Jun-22     31-Mar-22     30-Jun-21  

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

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

Provision for credit losses (benefit)

     9,861       (14,405     (17,500

Initial allowance for credit losses - PCD Loans

     170       612       1,202  
  

 

 

   

 

 

   

 

 

 
     687,823       681,573       784,499  
  

 

 

   

 

 

   

 

 

 

Net loans charged-off (recovered):

      

BPPR

      

Commercial

     (3,412     (4,230     (9,877

Construction

     (395     (416     (479

Lease financing

     667       (434     393  

Mortgage

     (4,451     (2,992     935  

Consumer

     12,923       13,574       7,545  
  

 

 

   

 

 

   

 

 

 

Total BPPR

     5,332       5,502       (1,483
  

 

 

   

 

 

   

 

 

 

Popular U.S.

      

Commercial

     137       (627     (413

Construction

     (4     (1,128     93  

Mortgage

     63       (20     (423

Consumer

     545       54       935  
  

 

 

   

 

 

   

 

 

 

Total Popular U.S.

     741       (1,721     192  
  

 

 

   

 

 

   

 

 

 

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

     6,073       3,781       (1,291
  

 

 

   

 

 

   

 

 

 

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

   $ 681,750     $ 677,792     $ 785,790  
  

 

 

   

 

 

   

 

 

 

Balance at beginning of period - unfunded commitments

   $ 7,054     $ 7,897     $ 9,569  

Provision for credit losses (benefit)

     (150     (843     367  
  

 

 

   

 

 

   

 

 

 

Balance at end of period - unfunded commitments [1]

   $ 6,904     $ 7,054     $ 9,936  
  

 

 

   

 

 

   

 

 

 

POPULAR, INC.

      

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

     0.08     0.05     (0.02 )% 

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

     162.37     (380.98 )%      N.M.  

BPPR

      

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

     0.10     0.11     (0.03 )% 

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

     171.19     (230.12 )%      N.M.  

Popular U.S.

      

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

     0.03     (0.08 )%      0.01

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

     98.92     101.34     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 Second Quarter 2022 Earnings Release

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

(Unaudited)

 

30-Jun-22

 

(Dollars in thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

Total ACL

   $ 209,630     $ 6,913     $ 148,305     $ 19,037     $ 297,865     $ 681,750  

Total loans held-in-portfolio

   $ 14,545,301     $ 790,920     $ 7,261,955     $ 1,480,222     $ 6,292,538     $ 30,370,936  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     1.44     0.87     2.04     1.29     4.73     2.24
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Variance

 

(Dollars in thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

Total ACL

   $ 4,987     $ 374     $ (901   $ 639     $ (1,141   $ 3,958  

Total loans held-in-portfolio

   $ 517,055     $ 46,137     $ (64,391   $ 54,100     $ 229,845     $ 782,746  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

29


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

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

(Unaudited)

 

30-Jun-22

 

Puerto Rico

 

(In thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

ACL

   $ 153,547     $ 3,074     $ 130,030     $ 19,037     $ 274,889     $ 580,577  

Loans held-in-portfolio

   $ 7,816,104     $ 162,362     $ 6,041,923     $ 1,480,222     $ 5,981,046     $ 21,481,657  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     1.96     1.89     2.15     1.29     4.60     2.70
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Variance

 

(In thousands)

   Commercial     Construction     Mortgage     Lease
financing
    Consumer     Total  

ACL

   $ 8,076     $ 660     $ (1,332   $ 639     $ (4,077   $ 3,966  

Loans held-in-portfolio

   $ 258,349     $ 35,037     $ (81,740   $ 54,100     $ 203,652     $ 469,398  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

30


Popular, Inc.

Financial Supplement to Second Quarter 2022 Earnings Release

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

(Unaudited)

 

30-Jun-22

 

Popular U.S.

 

(In thousands)

   Commercial     Construction     Mortgage     Consumer     Total  

ACL

   $ 56,083     $ 3,839     $ 18,275     $ 22,976     $ 101,173  

Loans held-in-portfolio

   $ 6,729,197     $ 628,558     $ 1,220,032     $ 311,492     $ 8,889,279  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACL to loans held-in-portfolio

     0.83     0.61     1.50     7.38     1.14
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Variance

 

(In thousands)

   Commercial     Construction     Mortgage     Consumer     Total  

ACL

   $ (3,089   $ (286   $ 431     $ 2,936     $ (8

Loans held-in-portfolio

   $ 258,706     $ 11,100     $ 17,349     $ 26,193     $ 313,348  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

31


Popular, Inc.    

Financial Supplement to Second Quarter 2022 Earnings Release

Table Q - Reconciliation to GAAP Financial Measures

(Unaudited)    

 

(In thousands, except share or per share information)

   30-Jun-22     31-Mar-22     30-Jun-21  

Total stockholders’ equity

   $ 4,293,349     $ 4,671,246     $ 5,814,614  

Less: Preferred stock

     (22,143     (22,143     (22,143

Less: Goodwill

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

Less: Other intangibles

     (14,533     (15,328     (20,440
  

 

 

   

 

 

   

 

 

 

Total tangible common equity

   $ 3,536,380     $ 3,913,482     $ 5,100,909  
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 71,501,931     $ 69,525,082     $ 72,657,293  

Less: Goodwill

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

Less: Other intangibles

     (14,533     (15,328     (20,440
  

 

 

   

 

 

   

 

 

 

Total tangible assets

   $ 70,767,105     $ 68,789,461     $ 71,965,731  
  

 

 

   

 

 

   

 

 

 

Tangible common equity to tangible assets

     5.00     5.69     7.09

Common shares outstanding at end of period

     76,576,397       76,487,523       80,656,480  

Tangible book value per common share

   $ 46.18     $ 51.16     $ 63.24  
  

 

 

   

 

 

   

 

 

 

 

   Quarterly average  

Total stockholders’ equity [1]

   $ 5,827,666     $ 5,983,309     $ 5,683,325  

Less: Preferred Stock

     (22,143     (22,143     (22,143

Less: Goodwill

     (720,292     (720,292     (671,121

Less: Other intangibles

     (15,043     (15,881     (21,350
  

 

 

   

 

 

   

 

 

 

Total tangible equity

   $ 5,070,188     $ 5,224,993     $ 4,968,711  

Return on average tangible common equity

     16.70     16.40     17.58
  

 

 

   

 

 

   

 

 

 

 

[1]

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

CONTACTS:

Popular, Inc.

Investor Relations:

Paul J. Cardillo, 212-417-6721

Investor Relations Officer

pcardillo@popular.com

or

Media Relations:

MC González Noguera, 917-804-5253

Executive Vice President and Chief Communications & Public Affairs Officer

mc.gonzalez@popular.com

 

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