Popular, Inc. · NASDAQ:BPOP
Popular — Q4 2019 Earnings Presentation
23 slides from Popular's earnings presentation, Jan 28, 2020
Slide 1: Investor Presentation Fourth Quarter 2019
Investor Presentation Fourth 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: 2019 Full Year Highlights
NPLs decreased by $83 million YoY; ratio at 1.90% NCO ratio decreased to 0.96% from 1.13% the previous year Credit Metrics Net income of $671.1 million Net interest margins: Popular, Inc. 4.03%, BPPR 4.30% Earnings Robust capital; Common Equity Tier 1 Capital ratio of 17.8% Tangible book value per s
Slide 4: Q4 2019 Highlights
NPLs decreased by $30 million QoQ; ratio at 1.90% NCO ratio increased to 1.21% from 1.01% the previous quarter Credit Metrics Net income of $166.8 million Net interest margins: Popular, Inc. 3.83%, BPPR 4.08% Earnings Robust capital; Common Equity Tier 1 Capital ratio of 17.8% Tangible book value pe
Slide 5: 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 6: Financial Summary (GAAP)
Financial Summary (GAAP) (Unaudited) (S in thousands) Q4 2019 32019 | Variance Net interest income 467,424 $ 476,991) $ (9,567) Service charges on deposits 41,656 40,969 7 Other service fees 75,559 71,309 4,250 Mortgage banking activities 13,448 10,492 2,956 Adjustments (expense) to indemnity reserv
Slide 7: Capital
Capital Note: Estimated for the current period Robust capital levels; Common Equity Tier 1 of 17.8% Tangible book value per share of $55.10 compared to $53.41 in Q3 2019 Popular regulatory capital does not include: Disallowed portion of ALLL of $158 million Unrealized gain on Evertec equity stake of
Slide 8: Day-1 Impact of Current Expected Credit Losses (CECL)
Day-1 Impact of Current Expected Credit Losses (CECL) 3 4 5 Impact on Allowance for Loan and Lease Losses (“ALLL’’) and NPL Total ALLL as of December 31, 2019 will increase by approximately $320-$350 million or 67-73% Increase led by P.R. mortgage, auto and credit cards loan portfolios Estimated inc
Slide 9: Non-Performing Assets
Non-Performing Assets ($ 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 $26 million QoQ NPLs decreased by $30 million QoQ P.R. NPLs at $499 million, or 2
Slide 10: NPL Inflows
NPL Inflows Total NPL Inflows ($ 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 decreased by $23 million QoQ P.
Slide 11: NCOs and Provision Credit Metrics
NCOs and NCO-to-Loan Ratio ($ 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 ALLL, ALLL-to-NCO and ALLL-to-NPLs Ratios ($ in millions) Additional Credit Metrics NCO ratio at 1.2
Slide 12: Driving Shareholder Value
Driving Shareholder Value Capital Planned Capital Actions for 2020: Repurchase up to $500 million in common stock Increase quarterly dividend to $0.40 per share Redemption of $28 million of 8.25% Series B preferred stock Tangible book value per share of $55.10 Franchise Additional Value Investments
Slide 13: Embracing Puerto Rico
EMBRACING PUERTO RICO Join us in helping rebuild Puerto Rico by making a charitable donation. Popular has reactivated the Embracing Puerto Rico fund, initially created in the aftermath of Hurricane Maria, to provide assistance to communities in the southwestern region of Puerto Rico affected by the
Slide 14: Fourth Quarter 2019 Appendix
Investor Presentation Fourth Quarter 2019 Appendix
Slide 15: Franchise Summary and Corporate Structure
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 December 31, 2019 ¹ Doing business as Popular Selected equity investments EVERTEC and Banco BHD L
Slide 16: 2019 Financial Summary (GAAP)
2019 Financial Summary (GAAP) 16
Slide 17: Net Interest Margin Dynamics
Net Interest Margin Dynamics Q4 2019 net interest margin at 3.83% Loan yield decreased 13 basis points to 6.57% Loan portfolio increased $402 million Total deposit cost decreased 3 basis points to 70 basis points in Q4 2019 Low deposit betas in P.R. Loan Yield, Deposit Cost and NIM Total Loans and D
Slide 18: Municipalities
Municipalities Obligations of municipalities are backed by real and personal property taxes, municipal excise taxes, and/or a percentage of the sales and use tax. Indirect exposure includes loans or securities that are payable by non-governmental entities, but which carry a government guarantee to c
Slide 19: De-Risked Loan Portfolios
De-Risked Loan Portfolios Differences due to rounding ($ 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 20: Business Segments (GAAP)
Business Segments (GAAP) ¹ Non-fully taxable equivalent Differences due to rounding
Slide 21: 2019 Business Segments (GAAP)
2019 Business Segments (GAAP) ¹ Non-fully taxable equivalent 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- 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 23: Fourth Quarter 2019
Investor Presentation Fourth Quarter 2019