Popular, Inc. · NASDAQ:BPOP
Popular — Q1 2020 Earnings Presentation
23 slides from Popular's earnings presentation, Apr 30, 2020
Slide 1: Investor Presentation First Quarter 2020
Investor Presentation First Quarter 2020 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: Puerto Rico – Key Indicators
Puerto Rico – Key Indicators Unemployment Total employment: 1.9% lower in February 2020 than December 20193 Unemployment rate: 8.8% in February 2020, up from 8.5% in December 20193 Economy Strict mandated lockdown from March 15 through May 3, 2020 80% of GDP sectors impacted2 Economic cost (Mar. 16-
Slide 4: COVID-19 Response: Three-Pronged Strategy
COVID-19 Response: Three-Pronged Strategy Our Customers Our People Our Communities Providing essential banking services while protecting the health of our customers and employees 70% of our branches in operation; emphasis on drive through Wide array of digital services; more flexible limits Waived c
Slide 5: COVID-19 Response: Customer Support
COVID-19 Response: Customer Support 5 Payment Relief (in thousands) Additional Customer Support Paycheck Protection Program (PPP) Submitted more than $1.2 billion in loans, representing more than 15,000 small and medium sized businesses To date, more than $819 million confirmed approved by SBA Grant
Slide 6: Q1 2020 Highlights
NPLs increased by $278 million due to CECL Excluding CECL impact, NPLs decreased $27 million QoQ; ratio at 2.8% NCO ratio decreased to 0.91% from 1.21% the previous quarter Credit Metrics Net income of $34.3 million Net interest margins: Popular, Inc. 3.94%, BPPR 4.22% Quarter provision for credit l
Slide 7: Financial Summary
Financial Summary (Unaudited) (S in thousands) Qi 2020 Q4 2019 Net interest income 473,095 467,424 $ 5,671 Service charges on depo: 41,659 41,656 3 Other service fees 64,773 75,559 | (10,786) Mortgage banking activities 6,420 13,448 (7,028) Adjustments (expense) to indemnity reserves on loans sold (
Slide 8: Capital
Capital Note: Estimated for the current period Differences due to rounding Robust capital levels; Common Equity Tier 1 of 15.8% Tangible book value per share of $56.17 compared to $55.10 in Q4 2019 Capital actions: Executed $500 million Accelerated Share Repurchase (ASR) Redeemed $28 million of 8.25
Slide 9: De-Risked Loan Portfolios
De-Risked Loan Portfolios 1 Small and Medium Enterprise 2 NCOs distribution represents the percentage allocation of net charge-offs from Q1 2008 through Q1 2020 per each loan category, excluding net charge-offs from previously covered loans up to Q2 2015. The Corporation has de-risked its loan portf
Slide 10: COVID-19 Sensitive Segments
COVID-19 Sensitive Segments Health Care Facilities Non-Essential Retail Construction Hotels Non-Food Wholesale Arts and Entertainment Restaurant and Food Services P.R.: Mostly shopping centers (60%) and auto retail (32%). Large portion of shopping centers owned by long term, financially strong princ
Slide 11: Non-Performing Assets
Non-Performing Assets ($ in millions) Non-Performing Assets NPAs increased by $253 million QoQ NPLs increased by $241 million QoQ P.R. NPLs at $736 million, or 3.6% of loans, up by $237 million, driven by: CECL implementation impact of $260 million Excluding this impact, NPLs decreased by $23 millio
Slide 12: NPL Inflows
NPL Inflows Total NPL Inflows ($ 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 NPL inflows exclude CECL Day 1 transition impact
Slide 13: NCOs and Provision Additional Credit Metrics
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 Additional Credit Metrics NCO ratio at 0.91% vs. 1.21% in Q4 2019. NCOs decrease of $19 million was
Slide 14: CECL Allowance for Credit Losses
Implemented CECL on 1/1/2020 (Day 1). Day 1 Increase - 66% increase over Incurred Loss ACL distributed as follows: Commercial $89 million, Consumer $130 million, and Mortgage $96 million. $63 million of NCOs, of which $53 million are consumer loans. Portfolio Changes – Includes net impact of origina
Slide 15: Driving Shareholder Value
Driving Shareholder Value Capital Capital Actions for 2020: Executed $500 million Accelerated Share Repurchase (ASR) Redeemed $28 million of 8.25% Series B Preferred Stock Increased quarterly common stock dividend to $0.40 per share Franchise Additional Value Investments in Evertec and Banco BHD Leó
Slide 16: First Quarter 2020 Appendix
Investor Presentation First Quarter 2020 Appendix
Slide 17: Franchise Summary and Corporate Structure
Franchise Summary Corporate Structure Assets = $42 billion Assets = $10 billion Puerto Rico Operations United States Operations Assets = $53 billion Corporate Structure – Popular, Inc. Information as of March 31, 2020 ¹ Doing business as Popular Selected equity investments EVERTEC and Banco BHD León
Slide 18: Net Interest Margin Dynamics
Net Interest Margin Dynamics Q1 2020 FTE1 net interest margin at 4.34% FTE Loan yield increased 4 basis points to 6.79% QoQ Loan portfolio increased $284 million in Q1 2020 Total deposit cost decreased 13 basis points QoQ to 57 basis points Low deposit betas in P.R. Loan Yield, Deposit Cost and NIM
Slide 19: 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. Indirect exposure includes loans or securities that are payable by non-governmental entities, but which carry a government guarantee to c
Slide 20: FICO Mix of Consumer Originations
FICO Mix of Consumer Originations
Slide 21: Business Segments
Business Segments Differences due to rounding
Slide 22: 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- Stable 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 o
Slide 23: First Quarter 2020
Investor Presentation First Quarter 2020