Popular, Inc. · NASDAQ:BPOP
Popular — Q3 2013 Earnings Presentation
21 slides from Popular's earnings presentation, Oct 23, 2013
Slide 1: Financial Results Third Quarter 2013
Exhibit 99.1 Financial Results Third Quarter 2013
Slide 2: 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
Slide 3: Highlights & Q3 2013 Results
Highlights & Q3 2013 Results • Reported net income of $229.1 million Earnings • Adjusted net income of $61.3 million • Strong margins: Popular, Inc. 4.49%, BPPR 5.26% • Continued improvement across key metrics reaching new lows in the Credit credit cycle and returning to pre-crisis levels • NPLs are
Slide 4: TARP & Capital
TARP & Capital • Robust capital (T1CE ratio of 14.2%), $2.1 billion in excess of 5% CCAR target requirement • Derisked balance sheet and enhanced risk management strengthens the company’s position for the most shareholder-friendly exit from TARP • Submitted an application to repay TARP in full subje
Slide 5: Financial Summary (unaudited)
FinancialSummary (unaudited) • Pre-tax Q3 variance to Q2 of $28 million driven mostly by FDIC loss share accounting and higher covered OREO expenses Q3 2013 Q2 2013 See appendix for Non-GAAP to GAAP reconciliation Non GAAP Non GAAP Adjusted In thousands Adjusted Adjusted Variance Net interest income
Slide 6: Capital
Capital • Tier 1 Common Equity capital ratio of 14.2% exceeds current CCAR target requirement of 5% by $2.1 billion • We expect to remain “well-capitalized” under the recently announced Basel III rules issued by the Federal Reserve Capital Ratios % Excess Capital ($ in billions) BPOP Q3 2013 CCAR &
Slide 7: De-risked Loan Portfolios
De-risked Loan Portfolios • PR has derisked its commercial loan Loan Composition (Held-in Portfolio) portfolio by reducing its exposure in Puerto Rico US Total asset classes with historically high loss $ in millions Q4 2007 Q3 2013 Q4 2007 Q3 2013 Q4 2007 Q3 2013 Variance content Commercial $7,774 $
Slide 8: Credit Improvement Accelerated by Bulk Sales
Credit Improvement Accelerated by Bulk Sales Non-Performing Assets ($M) • Non-performing assets declined by $49 million, or 5%, QoQ and $1.2 billion, or 55%, YoY $2,539 $2,623 $2,402 $2,448 • Improvements accelerated by NPA bulk sales $2,489 $2,245 $2,314 $2,277 $2,254 $2,084 $2,311 completed during
Slide 9: Steady Improvements in NPL Inflows
Steady Improvements in NPL Inflows • Total NPL inflows decreased by $24 million, or Total NPL Inflows ($M) 13% QoQ, and down by 83% from peak levels in Q2 2009 • Commercial NPL inflows in Puerto Rico $397 $333 decreased by $20 million, or 33% QoQ, reaching $271 $273 $279 the lowest level in the cred
Slide 10: Continued Progress in Asset Quality
Continued Progress in Asset Quality • NCOs for Q3 2013 are down by $21 million QoQ NCO ($M) and NCO-to-HIP Loan Ratio Commercial NCOs down by $19 million, or 48% 5.16% NCO ratio stands at 1.08%, under 2% for six 4.66% consecutive quarters NCO ratio fell to the lowest level since Q3 2007 • PLLL remai
Slide 11: PR Government Exposure
PR Government 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 • Loans to the Government of Puerto Rico and Public Cor
Slide 12: Driving Shareholder Value
Driving Shareholder Value • Robust capital with excess Tier 1 Common Equity of $2.1 billion and Capital significantly improved asset quality move us closer to TARP exit in the most shareholder-friendly fashion • Application for TARP repayment was submitted • Unique franchise in PR provides strong, s
Slide 13: Appendix
APPENDIX
Slide 14: Who We Are – Popular, Inc.
Who We Are – Popular, Inc. Franchise Summary Corporate Structure • Financial services company • Headquartered in San Juan, Puerto Rico Assets = $36.1bn Puerto Rico operations • $36 billion in assets (top 50 bank holding company in the U.S.) Banco Popular de Puerto Rico Popular Securities, Inc. Popul
Slide 15: GAAP Reconciliation Q3 2013
GAAP Reconciliation Q3 2013 Q3 2013 US GAAP Non GAAP In thousands, except per share amount Actual EVERTEC's SPO Adjusted Net interest income $354,206 $354,206 Non interest income 306,825 175,867 130,958 Total revenues before FDIC income (expense) 661,031 175,867 485,164 FDIC loss-share income (expen
Slide 16: GAAP Reconciliation Q2 2013
GAAP Reconciliation Q2 2013 Q2 2013 Non US GAAP GAAP EVERTEC's Income Tax Actual NPL Sale Adjustment Adjusted In thousands, except per share amount IPO [2][3] Net interest income $355,719 $1,502 $354,217 Service fees & other oper. income 290,874 (3,047) 162,091 131,830 Gain (loss) on sale of investm
Slide 17: Financial Summary: non personnel expenses & taxes (unaudited)
Financial Summary: non personnel expenses & taxes (unaudited) Q3 2013 Q2 2013 See appendix for Non-GAAP to GAAP reconciliation Non GAAP Non GAAP Adjusted In thousands Adjusted Adjusted Variance Net occupancy expense $ 24,711 $ 24,108 $ 603 Equipment expenses 11,768 11,843 (75) Other operating taxes
Slide 18: Consolidated Credit Summary (Excluding Covered Loans)
Consolidated Credit Summary (ExcludingCovered Loans) $ in millions Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Loans Held in Portfolio (HIP) $21,427 $21,522 $21,634 $20,984 $20,754 Performing HFS 123 180 183 258 228 NPL HFS 2 11 18 96 109 Total Non Covered Loans 21,552 21,713 21,835 21,338 21,091 Non-performing l
Slide 19: PR & US Business
PR & US Business PR US $ in millions (unaudited) Q3 13 Q2 13 Variance Q3 13 Q2 13 Variance Net Interest Income $310 $315 ($5) $73 $68 $5 Non Interest Income 91 103 (12) 17 13 4 Gross Revenues 401 418 (17) 90 81 9 Provision (non-covered) 51 231 (180) 5 (7) 12 Provision (covered WB) 17 25 (8) - - - Pr
Slide 20: Popular, Inc. Credit Ratings
Popular, Inc. Credit Ratings • Our senior unsecured ratings have been gradually improving since 2010: • Moody’s: B1 Negative Outlook (Revised October 2013) • Fitch: BB- Stable Outlook (Revised January 2013) • S&P: B+ Stable Outlook (Revised December 2011) • October 2013: Moody’s revised outlook to n
Slide 21: Financial Results Third Quarter 2013
Financial Results Third Quarter 2013