Popular, Inc. · NASDAQ:BPOP
Popular — Q1 2013 Earnings Presentation
19 slides from Popular's earnings presentation, Apr 18, 2013
Slide 1: Financial Results First Quarter 2013
Exhibit 99.1 Financial Results First Quarter 2013
Slide 2: Forward Looking Statements
Forward Looking Statements 1
Slide 3: Q1 2013 Highlights & Recent Events
Q1 2013 Highlights & Recent Events • Adjusted net income of $60M Earnings Strong margins: Popular, Inc. 4.39%, BPPR 5.18% • Continued improvement across key metrics Excludingbulk saleand coveredloans: Credit NPLsdeclinedby $42M, NCOsdown $20M $58M adjustedprovisionlowest in this credit cycle Total N
Slide 4: NPA Sale Substantially De-risked Balance Sheet
NPA Sale Substantially De-risked Balance Sheet • Pricing: Purchase price: $338M (34% of UPB) Book Value of assets sold: $509M¹ $92M in cash received at closing • Deal structure: Included $392M in commercial and construction NPLs, $108M in residential and commercial OREOs and $9M of other loans Sold
Slide 5: EVERTEC IPO
EVERTEC IPO Transaction • “EVTC” commenced trading on April 12 on NYSE Overview Price highlights significant value of BPOP stake Overall EVERTEC enterprise value of $2.3B, IPO equity value of $1.6B Offering upsized to $505M Sold 8.8M shares and will record after-tax gain of $169M in Q2 Additional •
Slide 6: Addressing Key Areas of Shareholder Focus
Addressing Key Areas of Shareholder Focus Credit • Reducingnon-performingassets(excludingcoveredloans) Total NPAs down by $885M or 42% YoY Total NPLs held in portfolio declined $631M or 38% YoY – NPL declines of $498M in commercial, $66M in mortgage and $43M in legacy Reduced NPL HFS balance to $18M
Slide 7: Financial Summary (unaudited)
Financial Summary (unaudited) Q1 2013 $ in thousands (except per share data) US GAAP Non GAAP Adjusted In thousands, except per share amount Actual NPA Sale Adjusted Q4 2012 Variance Net interest income $345,347 $345,347 $350,411 ($5,064) Service fees & other oper. income 109,018 109,018 150,249² (4
Slide 8: Capital Remains Strong Post-NPA Sale
Capital Remains Strong Post-NPA Sale • Tier 1 Common Equity capital ratio of 12.4% in Q1 exceeds current well-capitalized guideline by $1.7B Capital Ratios % Excess Capital ($ in billions) ** ** *Averages for 30 bank holding Companies with $50 billion or more of total **Excesscapital over “well capi
Slide 9: Asset Sale Strengthens Credit Quality
Asset Sale Strengthens Credit Quality Non-Performing Loans HIP ($M) • Non-performing loans held-in-portfolio are down by $1,637 $1,625 $1,732 $1,738 $1,682 $1,563 $1,550 10.0% $375M or 26% QoQ and $631M or 38% YoY $1,425 8.0% 8.4% 8.4% 8.2% 7.9% 7.9% • NPL to Loans at 4.86% in Q1 13 vs. 6.79% in Q4
Slide 10: NPL Inflows at 3-Year Lows
NPL Inflows at 3-Year Lows Total NPL Inflows ($M) • Total NPL inflows decreased by $60 million QoQ, driven by mortgage NPL inflows, and are at the -46% $397 ($154M) lowest level in three years $333 • $273 $271 Commercial, construction and legacy NPL inflows $279 $231 $257 remained stable at lowest l
Slide 11: Continuous Improvement in Asset Quality
Continuous Improvement in Asset Quality • NCOs include $163.1M related to NPA bulk sale NCO ($M) and NCO-to-HIP Loan Ratio Excluding impact of the sale: 4.66% Decline of $20M vs. Q4 2012 NCO ratio under 2% for fourth consecutive quarter, $163 reaching 2008 levels 2.74% 2.59% 2.64% • Provision increa
Slide 12: Driving Shareholder Value
Driving Shareholder Value Unique franchise in PR provides strong, stable revenue-generating capacity Credit metrics continue to improve NPA sale substantially accelerated de-risking Strong capital position with excess Tier 1 Common Equity of $1.7B After-tax gain of EVERTEC IPO will increase CET1 in
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 = $36.9bn Puerto Rico operations • $37 billion in assets (top 50 bank holding company in the U.S.) Banco Popular de Puerto Rico Popular Securities, Inc. Popula
Slide 15: Consolidated Credit Summary (Excluding Covered Loans)
Consolidated CreditSummary(ExcludingCoveredLoans) Q1 13 vs Q4 12 Q1 13 vs Q1 12 $ in millions Q1 13 Q4 12 Q1 12 Loans Held in Portfolio (HIP) $21,634 $20,984 $650 3.1% $20,479 $1,155 5.7% Performing HFS 183 258 (75) (29.1%) 129 54 41.9% NPL HFS 18 96 (78) -81.3% 232 (214) -92.3% Total Non Covered Lo
Slide 16: PR & US Business
PR & US Business PR US $ in millions (unaudited) Q1 13 Q4 12 Variance Q1 13 Q4 12 Variance Net Interest Income $305 $309 ($4) $68 $68 $0 Non Interest Income 16 90 (74) 10 15 (5) Gross Revenues 321 399 (78) 78 83 (5) Provision (non-covered) 204 78 126 2 8 (6) Provision (covered WB) 18 (3) 21 - - - Pr
Slide 17: Recent PR Government Actions
Recent PR Government Actions • Comprehensive Government Pension Plan Reform was enacted in April 2013. Main elements include: Retirement age increased for some groups of employees Employee contribution to the system will be increased to 10% from 8.275% Activepublicemployeeswill begrantedfuture benef
Slide 18: Popular, Inc. Credit Ratings
Popular, Inc. Credit Ratings • Our senior unsecured ratings have been gradually improving since 2010: Fitch: BB- Stable Outlook (Revised January 2013) Moody’s: B1 Stable Outlook (Revised December 2012) S&P: B+ Stable Outlook (No Change) January 2013: Fitch raised to BB- from B+; outlook revised to s
Slide 19: Financial Results First Quarter 2013
Financial Results First Quarter 2013