Popular, Inc. · NASDAQ:BPOP
Popular — Investor Presentation (October 2013)
31 slides from Popular's investor presentation, Oct 28, 2013
Slide 1: October 2013
Exhibit 99.1 October 2013
Slide 2: Franchise Overview
Franchise Overview Founded in 1893, Popular is the leading financial services institution in Puerto Rico with strong market share (38% of Puerto Rico deposits, net of brokered) 288 branches serving customers in Puerto Rico, U.S. Virgin Islands, New York, New Jersey, California, Florida, and Illinois
Slide 3: Popular Has Emerged from the Credit Crisis as a Stronger Institution
Popular Has Emerged from the Credit Crisis as a Stronger Institution Competitive position in Puerto Rico facilitates peer-leading core earnings generation capacity Superior 1 2 Revenue Superior and stable NIM of 4.49% versus peers at 3.26% Generation 3 Strong PPNR / Risk-Weighted Assets of 2.63%, si
Slide 4: Agenda
Agenda Corporate Overview Financial Performance and Developments Macroeconomic Update Consolidated and Regional Financials Conclusion Appendix 3
Slide 5: Corporate Structure and Equity Ownership Stakes
Corporate Structure and Equity Ownership Stakes Assets = $36.1bn U.S. Puerto Rico banking operations operations Banco Popular de Popular North America, Popular Securities, Inc. Popular Insurance, Inc. Puerto Rico Inc. Assets = $26.7bn Banco Popular Popular Auto, Inc. North America Assets = $8.8bn 21
Slide 6: Corporate History
Corporate History Popular Has Derisked its Loan Portfolio While Raising Substantial New Capital Received $935mm in TARP in exchange for senior Issued $1.2bn of common stock Sold additional equity participation preferred stock in EVERTEC IPO Total common equity Impact: Tier 1 common rose Impact: Soli
Slide 7: Diversified Asset Mix and Funding Sources
Diversified Asset Mix and Funding Sources Assets as of September 30, 2013 Liabilities and Equity as of September 30, 2013 Total liabilities: $32bn Total assets: $36bn Total equity: $4bn Proactive Balance Sheet Management Liquid balance sheet with 20% cash and securities Reduced exposure to high loss
Slide 8: Market Leadership in Puerto Rico
Market Leadership in Puerto Rico Popular’s Market Share Trend Puerto Rico Market Share by Category Popular's Popular's Popular / top market market Top competitor competitor Category rank share Institution Share market share Total deposits (net of brokered) 1 38% Santander 12% 3.2x Total loans 1 36%
Slide 9: Agenda
Agenda Corporate Overview Financial Performance and Developments Macroeconomic Update Consolidated and Regional Financials Conclusion Appendix 8
Slide 10: Peer-Leading, Consistent Core Revenue Generation
Peer-Leading, Consistent Core Revenue Generation Net Interest Margin (Non-FTE) Pre-Provision Net Revenue³ / Risk-Weighted Assets Source: SNL Financial for peer data Note: GAAP / Non-GAAP reconciliation in the Appendix 1 Peers include Comerica (CMA), Huntington (HBAN), Zions (ZION), First Niagara (FN
Slide 11: Pro Forma Capital Ratios In-Line with Peers and CCAR Banks
Pro Forma Capital Ratios In-Line with Peers and CCAR Banks Key Capital Adequacy Metrics Excess4 $1.7bn $1.9bn $1.3bn – capital Source: SNL Financial for peer data 1 Peers include Comerica (CMA), Huntington (HBAN), Zions (ZION), First Niagara (FNFG), Synovus (SNV), First Horizon (FHN), City National
Slide 12: Significantly Improved Asset Quality
Significantly Improved Asset Quality Substantial Reduction in NPL Inflows Coupled with Bulk Asset Sales Have Reduced Problem Assets and Boosted Reserve Coverage NPL Inflows (excl. Consumer Loans) ($mm) NPLs / Total Loans 1 Weighted Classified Assets Ratio Reserves / NPLs 1 Excludes covered loans 11
Slide 13: Loan Portfolio Composition
Loan Portfolio Composition De-Risked Loan Portfolio with Reduced Exposure to Historically High Loss Content Overview Loan Composition (Held in Portfolio) Puerto Rico US Total BPPR has derisked its ($mm) Q4 2007 Q3 2013 Q4 2007 Q3 2013 Q4 2007 Q3 2013 Variance commercial loan portfolio by Commercial
Slide 14: Strong Liquidity with Stable Funding Sources
Strong Liquidity with Stable Funding Sources Cash and Securities / Assets Loans / Deposits Noninterest Bearing Deposits / Total Deposits Time Deposits / Total Deposits Maintains 2+ years of cash flow coverage at the holding company 13
Slide 15: Additional Detail on Holding Company Liquidity
Additional Detail on Holding Company Liquidity Overview Approximately $400mm in holding company cash as of September 30, 2013 12-month required debt service is $121mm (including TARP) Maintains 2+ years of cash flow coverage at the holding company Next maturity not until February 2027 In addition, h
Slide 16: Strong Risk Management Culture
Strong Risk Management Culture Board of Director’s Risk Management Committee (RMC) Responsible for overseeing and approving the Corporation’s risk management program Popular has implemented an Enterprise Risk Management (ERM) function within the Risk Management Group Management Committees Reviews cr
Slide 17: Agenda
Agenda Corporate Overview Financial Performance and Developments Macroeconomic Update Consolidated and Regional Financials Conclusion Appendix 16
Slide 18: Puerto Rico's Indebtedness Has Been a Recent Area of Focus
Puerto Rico’s Indebtedness Has Been a Recent Area of Focus Background on Puerto Rico’s Public Debt Mitigating Actions Taken by the Government Puerto Rico has ~$70bn total debt outstanding Fiscal 2014 budget was approved, reducing deficit by Represents ~$14,000 debt per capita and 71% of 36% from $1.
Slide 19: Popular's Exposure to the Puerto Rican Government
Popular’s Exposure to the Puerto Rican Government Popular’s Exposure Our current exposure to the PR government and its instrumentalities is $1.4 billion, of which $1.2 billion is outstanding Of the amount outstanding, $951 million consists of loans and $204 million is securities Direct Exposure Loan
Slide 20: Agenda
Agenda Corporate Overview Financial Performance and Developments Macroeconomic Update Consolidated and Regional Financials Conclusion Appendix 19
Slide 21: Financial Overview of Popular, Inc.
Financial Overview of Popular, Inc. Financial Highlights Year ending Quarter ending 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 9/30/13 Balance sheet Total assets $47,404 $44,411 $38,883 $34,736 $38,815 $37,348 $36,508 $36,052 Gross loans 32,737 29,911 26,269 23,804 26,459 25,314
Slide 22: Regional Information
Regional Information Banco Popular de Puerto Rico Banco Popular North America ($mm) 2008 2009 2010 2011 2012 2013¹ ($mm) 2008 2009 2010 2011 2012 2013¹ Assets $25,522 $23,271 $28,977 $27,941 $27,204 $26,680 Assets $12,426 $10,847 $8,974 $8,581 $8,652 $8,782 Net Net $200 $125 $17 $180 $237 $84 ($552)
Slide 23: Financial Overview of Banco Popular de Puerto Rico
Financial Overview of Banco Popular de Puerto Rico Financial Highlights Year ending Quarter ending 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 9/30/13 Balance sheet Total assets $25,020 $26,742 $25,522 $23,271 $28,977 $27,941 $27,204 $26,680 Gross loans 15,433 16,551 16,013 15,118
Slide 24: Financial Overview of Banco Popular North America
Financial Overview of Banco Popular North America Financial Highlights Year ending Quarter ending 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 9/30/13 Balance sheet Total assets $12,244 $13,358 $12,426 $10,847 $8,974 $8,581 $8,652 $8,782 Gross loans 8,787 10,288 10,244 8,677 6,922
Slide 25: Agenda
Agenda Corporate Overview Financial Performance and Developments Macroeconomic Update Consolidated and Regional Financials Conclusion Appendix 24
Slide 26: Conclusions
Conclusions Popular Popular has emerged from the crisis as a strongly-capitalized institution with materially improved asset quality It has a dominating franchise in its home market, which provides a solid base of PPNR and profitability The management team has considerable experience with a deep ben
Slide 27: Popular, Inc. Credit Ratings
Popular, Inc. Credit Ratings Credit Ratings Agency Rating Outlook Date of last BHC action Moody’s B1 Negative October 2013 Fitch BB- Stable January 2013 S&P B+ Stable July 2011 Popular’s Senior Unsecured Ratings Have Gradually Improved Since 2010 October 2013: Moody’s revised outlook to negative Jan
Slide 28: Agenda
Agenda Corporate Overview Financial Performance and Developments Macroeconomic Update Consolidated and Regional Financials Conclusion Appendix 27
Slide 29: GAAP / Non-GAAP Reconciliation – Popular, Inc.
GAAP / Non-GAAP Reconciliation – Popular, Inc. Popular, Inc. Nine months ended ($ in millions) 2008 Y 2009 Y 2010 Y 2011 Y 2012Y 9/30/13 Net (loss) income ($680) ($554) $146 $150 $244 $436 Income tax expense (benefit) 462 (8) 101 115 (25) (276) Provision for loan losses (PLL) 991 1,406 1,012 576 409
Slide 30: GAAP / Non-GAAP Reconciliation – Banco Popular de Puerto Rico
GAAP / Non-GAAP Reconciliation – Banco Popular de Puerto Rico Banco Popular de Puerto Rico Nine months ended ($ in millions) 2008 Y 2009 Y 2010 Y 2011 Y 2012Y 9/30/13 Net income $200 $125 $24 $181 $237 $84 Income tax (benefit) expense 0 (20) 2 100 (40) (277) Provision for loan losses (PLL) 519 624 6
Slide 31: Forward Looking Statements
Forward Looking Statements The information contained in this presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and involve risks and uncertaintie