Popular, Inc. · NASDAQ:BPOP
Popular — Q4 2016 Earnings Presentation
24 slides from Popular's earnings presentation, Jan 24, 2017
Slide 1: Investor Presentation Fourth Quarter 2016
Investor Presentation Fourth Quarter 2016 Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only management’s beliefs regarding future events and current expe
Slide 3: 2016 Full Year Highlights
1 See slide 17 for reconciliation to GAAP figures 2016 Full Year Highlights NPLs decreased by $44 million YoY; ratio at 2.5% NPL inflows, excluding consumer loans, down by $15 million YoY NCO ratio of 0.76% compared to 0.98% last year Credit (excluding covered loans) Net income of $217 million; Adju
Slide 4: Continued strengthening deposit franchise
Continued strengthening deposit franchise Total deposits rose $2.3 billion or 10% from 2015 Non-public sector deposits grew $784 million Market Leadership One million customers are enrolled in online banking; 200+ thousand new enrollments in 2016 Approximately 700 thousand active online retail custo
Slide 5: Q4 2016 Highlights
Q4 2016 Highlights NPAs decreased by $31 million QoQ; NPL ratio stable at 2.5% NPL inflows, excluding consumer loans, decreased $10 million QoQ NCO ratio increased from previous quarter to 1.0% Credit (excluding covered loans) Net loss of $4.1 million; Adjusted net income of $88.5 million1 Net inter
Slide 6: P.R. Public Sector Exposure
P.R. Public Sector Exposure Our direct exposure to the P.R. Government, instrumentalities, and municipalities is $584 million, of which approximately $529 million is outstanding. The outstanding balance increased by $5 million from the prior quarter. Exposure to P.R. Government securities consists m
Slide 7: Financial Summary (GAAP)
Financial Summary (GAAP) (Unaudited) (Sin thousands) 04 2016 Q3 2016 Variance Net interest income $ 355,405 | $ 353,687 | $1,718 FDIC loss-share expense (130,334) (61,723)| (68,611) Other non-i i 130,159 137,701 (7,542) Gross revenues 355,230 429,665 (74,435) Provision for loan losses ~ non-covered
Slide 8: GAAP Reconciliation
GAAP Reconciliation Refer to the Significant Events slide in the Appendix for additional information of the above mentioned transactions impacting the quarter’s results (Unaudited) ($ in thousands) Pre-tax Impact on net income U.S. GAAP Net loss (4,105) $ Non-GAAP Adjustments: FDIC arbitration award
Slide 9: Capital
Capital Note: Capital ratios for the current quarter are preliminary Strong 2016 DFAST results Popular’s capital levels remain robust with Common Equity Tier 1 of 16.5% Increased quarterly common stock dividend to $0.25 per share Authorized common stock repurchase program of $75 million Popular, Inc
Slide 10: Non-Performing Assets
Non-Performing Assets Highlights NPAs, including covered loans, decreased by $31 million QoQ NPLs, excluding covered loans, decreased by $21 million QoQ P.R. NPLs at $533 million, or 3.1% of loans, down by $19 million, mainly driven by lower mortgage and commercial NPLs of $13 million and $7 million
Slide 11: NPL Inflows
NPL Inflows Total NPL Inflows ($ in millions) Highlights Total NPL inflows down by $10 million QoQ P.R. commercial inflows, including construction, up by $3 million P.R. mortgage inflows down by $11 million U.S. mortgage inflows down by $2 million Excludes consumer loans Metrics exclude covered loan
Slide 12: NCOs and Provision Credit Metrics
NCOs and NCO-to-Loan Ratio ($ in millions) Provision and Provision-to-NCO Ratio ($ in millions) Additional Credit Metrics Highlights Net charge offs (NCOs) increased by $21 million from Q3 2016. Excluding a $7 million recovery related to the sale of previously charged-off loans in Q3 2016, NCOs incr
Slide 13: Driving Shareholder Value
Driving Shareholder Value Capital Increased capital return Robust capital with Common Equity Tier 1 Capital of 16.5% Earnings Unique franchise in P.R. generating strong and stable revenue Continued loan growth in the U.S. Additional Value EVTC ownership and Banco BHD León stake
Slide 14: Appendix Fourth Quarter 2016
APPENDIX Investor Presentation Fourth Quarter 2016
Slide 15: Who We Are – Popular, Inc.
Who We Are – Popular, Inc. Franchise Information as of December 31, 2016 ¹ Doing business as Popular Community Bank Summary Corporate Structure Assets = $39 billion Assets = $30 billion Assets = $9 billion Puerto Rico Operations United States Operations Selected equity investments EVERTEC and Banco
Slide 16: De-Risked Loan Portfolios
De-Risked Loan Portfolios The Corporation has de-risked its loan portfolios by reducing its exposure to asset classes with historically high loss content The P.R. commercial portfolio reductions include: Commercial portfolio, including construction, has decreased from 55% of total loans held-in-port
Slide 17: Earnings Release-Financial Highlights
Earnings Release-Financial Highlights (Unaudited) ($ in thousands) Q4 2016 Significant events Net interest income 355,405 $ Non-interest income (175) Includes the charge of $116.8 million related to the FDIC arbitration award and $9.9 million additional adjustments, including prior period recoveries
Slide 18: GAAP Reconciliation YTD - 2016
GAAP Reconciliation YTD - 2016 (Unaudited) ($ in thousands) Pre-tax Impact on net income U.S. GAAP Net income 216,691 $ Non-GAAP Adjustments: Impact of EVERTEC Restatement 1 2,173 - 2,173 Bulk Sale of WB loans and OREO 2 (891) 347 4 (544) FDIC arbitration award 3 171,757 (41,108) 4 130,649 Goodwill
Slide 19: GAAP Reconciliation YTD - 2015
GAAP Reconciliation YTD - 2015 (Unaudited) ($ in thousands) Pre-tax Impact on net income U.S. GAAP Net income 895,344 $ Non-GAAP Adjustments: BPNA Reorganization 1 17,065 - 17,065 Doral Transaction 2 25,576 (7,690) 17,886 OTTI 3 14,445 (2,486) 11,959 Reversal DTA - PNA 4 - (589,030) (589,030) Loss o
Slide 20: Business Segments (GAAP)
Business Segments (GAAP) ¹ Non-fully taxable equivalent
Slide 21: Consolidated Credit Summary (Excluding Covered Loans)
Consolidated Credit Summary (Excluding Covered Loans) $ in millions Q4 16 Q3 16 Q2 16 Q1 16 Q4 15 Loans Held in Portfolio (HIP) $22,774 $22,596 $22,541 $22,508 $22,346 Performing HFS 89 72 83 83 92 NPL HFS - - 40 43 45 Total Non Covered Loans 22,863 $ 22,668 $ 22,663 $ 22,633 $ 22,483 $ Non-performi
Slide 22: FDIC Loss Share Asset
FDIC Loss Share Asset Composition of FDIC Loss Share Asset $798 "i $800 (Sin millions) sna $700 $636 $600 $542 $500 $400 $10 5393 $32 gai $300 819 guy $200 3152 $100 = > commercial-$6 $ 7 Singlefamily-$63 FDICLSA FDICISA FDICISA FDICLSAFDICISAFDICISA_FDICLSAFDICISA FDICISA FDICLSAFDICISA._FDICISA y
Slide 23: Popular, Inc. Credit Ratings
Popular, Inc. Credit Ratings Our senior unsecured ratings have remained stable Moody’s B2 Negative Fitch BB- Stable Outlook S&P B+ Positive January Fitch raised to BB- from B+; outlook stable October Moody’s revised outlook to negative February Moody's placed BPOP on review for downgrade May Moody’s
Slide 24: Fourth Quarter 2016
Investor Presentation Fourth Quarter 2016