Popular, Inc. · NASDAQ:BPOP
Popular — Investor Presentation (February 2007)
25 slides from Popular's investor presentation, Feb 27, 2007
Slide 1: Investor Presentation As of December 31, 2006
Investor Presentation As of December 31, 2006
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Statements contained in this Presentation that are not based on current or historical fact are forward-looking in nature. Such forward-looking statements are based on current plans, estimates and expectations and are made pursuant to the Private Securities Litigation Refor
Slide 3: Popular at a Glance
POPULAR AT A GLANCE Founded in 1893 Diversified financial services and transaction processing company. Operations in Puerto Rico, the Caribbean, the mainland United States and Central America. 24th largest U.S. bank holding company in assets (as of 12/31/06). Popular, Inc. and its related subsidiari
Slide 4: Popular's Strategic Objectives
POPULAR'S STRATEGIC OBJECTIVES Continue to deliver best in class returns to our shareholders Puerto Rico Strengthen our competitive position in our main market by offering the best and most complete financial services in an efficient and convenient manner. Our services will respond to the needs of a
Slide 5: Puerto Rico Highlights 2005
PUERTO RICO HIGHLIGHTS 2005 Source: Government Development Bank of Puerto Rico and Bloomberg Professional System *Finance, insurance, and real estate
Slide 6: Puerto Rico Economic Update
PUERTO RICO Economic Update Source: Planning Board of Puerto Rico Puerto Rico is currently in recession. Consumers have been affected by deteriorating confidence, higher oil prices and taxes, and a difficult political environment. The Puerto Rico Government's fiscal situation is still not definitive
Slide 7: Banco Popular de Puerto Rico
BANCO POPULAR DE PUERTO RICO Leading Market Share 9/30/06 22.74% in loans* 33.50% in deposits** As of 12/31/06: $24.3 billion in assets $14.8 billion in deposits 4,778 employees * Net of unearned income ** Excludes brokered deposits Leading financial institution on the island with 192 local branches
Slide 8: Non-Banking Subsidiaries as of 12/31/06 Puerto Rico
Non-Banking Subsidiaries as of 12/31/06 PUERTO RICO FORTRESS YTD 2006 Revenues - $24.5 MM 1 Office & presence at some BPPR branches 164 Employees YTD 2006 Originations - $1,497 Million $1,360 Million in Total Assets 32 Mortgage Centers 450 Employees YTD 2006 Deals - $5.7 Billion $4.2 Billion Assets
Slide 9: United States Mainland Operations
UNITED STATES MAINLAND OPERATIONS US Distribution System: Banco Popular North America: 142 branches in NY, CA, TX, NJ, FL and IL; Popular Financial Holdings : 159 offices in 24 states. Popular Leasing USA: 12 offices in 11 states. offices in 11 states. offices in 11 states. offices in 11 states. off
Slide 10: Popular North America as of 12/31/06
POPULAR NORTH AMERICA as of 12/31/06 Non-Banking Operations Banking Operations California $3.2B Total Assets 50 Branches 351 Employees Florida $1.9B Total Assets 19 Branches 318 Employees Texas $1.4B Total Assets 7 Branches 115 Employees Illinois $1.9B Total Assets 20 Branches 521 Employees New York
Slide 11: Processing Strategy
PROCESSING STRATEGY Build EVERTEC into a full service 3rd party provider with a dominant presence in the Caribbean basin and significant penetration of the small business merchant processing and U.S. community banking niches. Expand Popular's 20 years of experience in ATH/POS Networks to Central Ame
Slide 12: Net Income Growth
Ten-Year CAGR (1996 - 2006): 14.07%** Five-Year CAGR (2001 - 2006): 3.27% Net Income Growth ($ Millions) *Include securities net gains of $15.3M, $52.1M & $4.4M, respectively. **13.79% excluding securities gain. * * *
Slide 13: Segment Reporting - Net Income
Segment Reporting - Net Income 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 BPPR 83690 95807 85217 93867 83305 103750 85864 94528 90339 82356 79219 70594 BPNA 10878 12738 18052 18171 19234 19009 20279 32947 21315 20660 19448 32913 EVERTEC 4618 3902 3037 2633 4420 5810 4252
Slide 14: Financial Performance
(1) Non-interest expense divided by net interest income plus non-interest income (Excludes gain/losses on sale and valuation adjustments of securities and non-recurring income such as gain on the sale of real estate). (2) Taxable equivalent Financial Performance
Slide 15: Loan Portfolio
Total Loans as of 12/31/06: $32.7 billion (69% of total assets as of 12/31/06) 5 year CAGR 2001-2006: 12.45% 3 year CAGR 2003-2006: 13.06% Loan Portfolio ($ millions)
Slide 16: Increasing Non-Interest Income
Increasing Non-Interest Income ($ in millions) * Excludes gain on sale of investment securities and valuation adjustment. Total Non-Interest Income for 2006: $805.1* million 5 Year CAGR 2001 - 2006: 10.37% 3 Year CAGR 2003 - 2006: 13.21%
Slide 17: Asset Quality
Asset Quality (1) In 2004, 2005 & 2006, residential mortgages represented 64%, 59% and 59% of NPA, respectively. (2) Excludes loans held for sale. Recalculating Credit Quality Ratios Excluding Residential Mortgages and FASB 114 Assets
Slide 18: Interest Only Strips and Mortgage Servicing Rights
Interest Only Strips ("IO's") and Mortgage Servicing Rights ("MSR's") For the fourth quarter of 2006, the Corporation made one securitization that was accounted for as secured borrowing. Balances of IO's and MSR's for the following periods were: ($ thousands) 12/31/05 12/31/06 IO's $64,542 $88,735 M
Slide 19: Diversified Funding Sources
Diversified Funding Sources Total Funding Composition Total=$46.6 Billion Total=$24.4 Billion Deposit Composition Raised $1.2B deposits thru E-Loan channel during Q4 06.
Slide 20: Strong Capital Position
Strong Capital Position 12/31/06 Leverage Tier 1 Total Capital 8.06 5.00 10.00 6.00 7.95 6.63 5.70 * Peer figures as of 9/30/06 Tangible Common Equity 10.61 11.86 8.05 Average TCE of A rated institutions (Fitch)
Slide 21: Reported Historical EPS
REPORTED HISTORICAL EPS 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0.67 0.75 0.83 0.92 0.99 1.09 1.31 1.51 1.74 1.77 1.2 1.15 (US $) Ten-Year CAGR: 6.35% Projected Long-Term Growth of 7.00% vs. Peer Median of 8.06% * Based on IBES consensus estimates 12/31/07 ** Years 2003-2006 excl
Slide 22: Historical P/E
Historical P/E 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 BPOP's P/E 12.59 16.5 20.61 15.18 13.56 12.87 12.95 12.71 16.11 10.79 13.7 BPOP's P/E as a % of Peer Avg. 0.87 0.78 1.08 1.04 0.91 0.78 0.92 0.8 1.04 0.78 0.97 P/E % of Peer Avg.
Slide 23: Historical P/B
Historical P/B 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 BPOP's P/B 1.9187 2.3878 2.866 2.4278 1.8897 1.825 1.8568 2.3214 2.6341 1.789 1.45 BPOP's P/B as a % of Peer Avg. 0.802157258 0.707412455 0.947884541 0.997350313 0.848264485 0.815760949 0.94777005 1.053720978 1.164268824 0.8785973
Slide 24: Areas of Emphasis For 2007
Areas of Emphasis For 2007 Reorganize the U.S. business to increase efficiency & profitability funding Operations Credit quality in P.R. Continue cost containment initiatives in the P.R. businesses
Slide 25: Popular
Hy) POPULAR. Investor Presentation