Slide 1: 2016 Annual Stress Test Disclosure
2016 Annual Stress Test Disclosure Severely Adverse Scenario October 2016 POPULAR
Slide 2: Forward Looking Statements
Forward Looking Statements The information included in this presentation contains certain 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 are subject to risks an
Slide 3: Index
Index Page 3 8 13 2016 Supervisory Severely Adverse Scenario Results Risk Methodologies Macroeconomic Scenario POPULAR
Slide 4: Overview
Overview 3 Popular, Inc. (“Popular” or the “Corporation”) is the leading financial services provider in Puerto Rico (“P.R.”) and ranks among the 50 largest bank holding companies by assets in the United States (“U.S.”), with consolidated assets of $37.6 billion as of June 30, 2016. Popular operates
Slide 5: Capital and RWA Projections
Capital and RWA Projections (Severely Adverse Scenario) Projected stressed capital ratios Common Equity Tier 1 Capital 16.21% 12.56% 12.56% 6.50% Tier 1 Risk-Based Capital 16.21% 12.78% 12.78% 8.00% Total Risk-Based Capital 18.78% 15.97% 15.97% 10.00% Tier 1 Leverage 11.82% 9.34% 9.34% 5.00% Common
Slide 6: Profit & Loss Projections
Profit & Loss Projections (Severely Adverse Scenario) 5 Nine-quarter cumulative provision for loan and lease losses, PPNR, and net income (Q1 2016-Q1 2018) 9-Qtr Cumulative Impact Percentage of Average Assets1 Pre-Provision Net Revenue (PPNR)2 $1,003 3.0% Loan Loss Provision 1,724 Realized Gains (Lo
Slide 7: 2016 DFAST Pro Forma Capital Ratio Key Drivers
2016 DFAST Pro Forma Capital Ratio Key Drivers 6 Popular Common Equity Tier 1 ratio under Supervisory Severely Adverse Scenario Popular Tier 1 leverage ratio under Supervisory Severely Adverse Scenario BPPR Common Equity Tier 1 ratio under Supervisory Severely Adverse Scenario BPPR Tier 1 leverage r
Slide 8: Index
Index 2015 Supervisory Severely Adverse Scenario Results 3 Page Risk Methodologies 8 Macroeconomic Scenario 13 POPULAR
Slide 9: Key Risks Captured in Stress Test Projections
Key Risks Captured in Stress Test Projections 8 Credit Risk Potential for default or loss resulting from an obligor’s failure to meet its contractual obligation to the Corporation or any of its subsidiaries, or failure otherwise to perform as agreed. Credit risk arises from all activities where succ
Slide 10: Model and Risk Components Captured in Stress Test
Model and Risk Components Captured in Stress Test 9 Interest Rate Risk Market Risk Liquidity Risk Operational, Compliance, Legal and Regulatory Risks Credit Risk Scenario specific interest rates were derived to complement the key interest rates provided by the Federal Reserve. These interest rate sc
Slide 11: Model and Risk Components Captured in Stress Test
Model and Risk Components Captured in Stress Test 10 Risks embedded in earnings – Gains/losses on securities, Trading securities, Equity investments, OREO, HFS loans losses Purpose Estimate future impairment and/or valuation losses impacting the capital base for other assets positions (i.e., non- lo
Slide 12: Model and Risk Components Captured in Stress Test
Model and Risk Components Captured in Stress Test 11 Risks embedded in earnings – Operational losses Purpose Estimated operational losses expected in each quarter under varying macroeconomic conditions. Methodology • Losses related to operational risk events are a component of PPNR and include losse
Slide 13: Index
Index 2015 Supervisory Severely Adverse Scenario Results 3 Page Risk Methodologies 8 Macroeconomic Scenario 13 POPULAR
Slide 14: 2016 DFAST Annual Supervisory Severely Adverse Scenario
2016 DFAST Annual Supervisory Severely Adverse Scenario 13 The Supervisory Severely Adverse Scenario, as provided by the Federal Reserve, reflects a substantial weakening in global economic activity. The economic variables provided show large reductions in asset prices and increases in unemployment
Slide 15: 2016 Annual Stress Test Disclosure
2016 Annual Stress Test Disclosure Severely Adverse Scenario October 2016 POPULAR