Popular, Inc. · NASDAQ:BPOP
Popular — Q3 2019 Earnings Presentation
19 slides from Popular's earnings presentation, Oct 23, 2019
Slide 1: Investor Presentation Third Quarter 2019
Investor Presentation Third Quarter 2019 Exhibit 99.2
Slide 2: Cautionary Note Regarding Forward-Looking Statements
This presentation contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, are based on the current expectations of Popular, Inc.’s (the “Corporation”) management and, by their na
Slide 3: Q3 2019 Highlights
NPLs decreased by $7 million QoQ; ratio at 2.1% NCO ratio increased to 1.01% from 0.71% the previous quarter Credit Metrics Net income of $165.3 million Net interest margins: Popular, Inc. 4.00%, BPPR 4.26% Earnings Robust capital; Common Equity Tier 1 Capital ratio of 17.5% Tangible book value per
Slide 4: Puerto Rico – Key Indicators
Puerto Rico – Key Indicators 1. Source: P.R. Statistics Institute based on U.S. Bureau of Transportation Statistics (data represents the net movement of passengers of domestic flights departing and arriving at the SJU International Airport); 2. Source: U.S. Bureau of Labor Statistics (Household Surv
Slide 5: Financial Summary (GAAP)
Financial Summary (GAAP) (Unaudited) 03 2019 02.2019 Variance (S in thousands) Net interest income 476,991| $ 476,316| $ 675 Service charges on deposits 40,969 39,617 1,352 Other service fees 71,309 74,031 (2,722) Mortgage banking activities 10,492 (4,773), 12,265 Adjustments (expense) to indemnity
Slide 6: Net Interest Margin Dynamics
Net Interest Margin Dynamics Q3 2019 net interest margin at 4.00% Loan yield decreased 11 basis points to 6.70% Stable loan portfolio Low deposit betas in P.R. Total deposit cost decreased 2 basis points to 73 basis points in Q3 2019 Loan Yield, Deposit Cost and NIM Total Loans and Deposits ($ in bi
Slide 7: Capital
Capital Note: Estimated for the current period Robust capital levels; Common Equity Tier 1 of 17.5% Tangible book value per share of $53.41 compared to $51.44 in Q2 2019 Popular regulatory capital does not include: Disallowed portion of ALLL of $209 million Unrealized gain on Evertec equity stake of
Slide 8: Estimate of Current Expected Credit Losses (CECL) Impact on ALLL
Estimate of Current Expected Credit Losses (CECL) 3 4 5 Impact on Allowance for Loan and Lease Losses (“ALLL’’) ALLL as of June 30, 2019 would have increased by approximately $360-$400 million or 85-95% Increase led by P.R. mortgage, auto and credit cards loan portfolios Impact on Capital Tangible b
Slide 9: Non-Performing Assets
Non-Performing Assets ($ in millions) Non-Performing Assets Beginning in Q2 2018 figures include loans previously classified as covered Differences due to rounding Non-Performing Loans ($ in millions) NPAs decreased by $7 million QoQ NPLs decreased by $7 million QoQ P.R. NPLs at $521 million, or 2.6
Slide 10: NPL Inflows
NPL Inflows Total NPL Inflows ($ in millions) Mortgage NPL Inflows ($ in millions) Commercial, Construction and Legacy NPL Inflows ($ in millions) Beginning in Q2 2018 figures include loans previously classified as covered Differences due to rounding Total NPL inflows increased by $40 million QoQ P.
Slide 11: NCOs, Provision and ALLL Ratios
NCOs and NCO-to-Loan Ratio ($ in millions) Provision and Provision-to-NCO Ratio ($ in millions) Beginning in Q2 2018 figures include loans previously classified as covered Differences due to rounding ALLL, ALLL-to-NCO and ALLL-to-NPLs Ratios ($ in millions) Additional Credit Metrics NCO ratio at 1.0
Slide 12: Driving Shareholder Value
Driving Shareholder Value Capital Robust capital with Common Equity Tier 1 Capital of 17.5% Tangible book value per share of $53.41 Franchise Additional Value Investments in Evertec and Banco BHD León Puerto Rico Uniquely poised to take advantage of improving economic backdrop in Puerto Rico Leading
Slide 13: Third Quarter 2019 Appendix
Investor Presentation Third Quarter 2019 Appendix
Slide 14: Franchise Summary
Franchise Summary Corporate Structure Assets = $42 billion Assets = $10 billion Puerto Rico Operations United States Operations Assets = $52 billion Corporate Structure – Popular, Inc. Information as of September 30, 2019 ¹ Doing business as Popular Selected equity investments EVERTEC and Banco BHD
Slide 15: Municipalities
Municipalities Obligations of municipalities are backed by real and personal property taxes, municipal excise taxes, and/or a percentage of the sales and use tax. 75% of our total exposure is to four large municipalities in the San Juan metro area. Indirect exposure includes loans or securities that
Slide 16: De-Risked Loan Portfolios
De-Risked Loan Portfolios Differences due to rounding ($ in millions) 1 Small and Medium Enterprise 2 NCOs distribution represents the percentage allocation of net charge-offs from Q1 2008 through Q1 2019 per each loan category, excluding net charge-offs from previously covered loans up to Q2 2015.
Slide 17: Business Segments (GAAP)
Business Segments (GAAP) ¹ Non-fully taxable equivalent Differences due to rounding
Slide 18: Popular, Inc. Credit Ratings
Popular, Inc. Credit Ratings Our senior unsecured ratings have remained stable Moody’s B1 Stable Outlook Fitch BB Stable Outlook S&P BB- Positive Outlook February Moody’s changes outlook to stable from negative April S&P upgrades to BB- from B+ revised outlook to stable 2017 February S&P placed BPOP
Slide 19: Third Quarter 2019
Investor Presentation Third Quarter 2019