Slide 1: Financial Results Second Quarter 2012
Exhibit 99.1 Financial Results Second Quarter 2012
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: Q2 2012 Highlights
Q2 2012 Highlights • We remain on track in executing our strategy • Improve credit • Buildour assetportfolio andmaintainstrongtop linerevenue • Optimize operating expenses • Continue improvements at BPNA • We made progress on various elements of this strategy in Q2 2012 • Improvements in our credit
Slide 4: Q2 2012 Highlights
Q2 2012 Highlights • NPLs lower by $120 million to 7.56% of total loans IMPROVED CREDIT • Charge-offs lower by 9% to $98 million • PR commercial and construction NPL inflows lower by $28 million or 30% • Acquired $500 million of high quality loan to partially offset weak loan demand TOP LINE • NII i
Slide 5: Financial Results (Unaudited)
Financial Results (Unaudited) $ in thousands (except per share data) Q2 2012 Q1 2012 Variance Net interest income $341,200 $337,582 $3,618 Service fees & other oper. income 119,576 129,710 (10,134) (Loss) Gain on sale of investments, loans & trading (28,427) 9,453 (37,880) Total revenues before FDIC
Slide 6: Significant Quarterly Variances
Significant Quarterly Variances Variance vs. Comments $ in thousands Q1' 12 • $6.7 million due to MSRs valuation variance • $6.5 million lower income from investments accounted for under the Service fees & other (10,134) equity method operating income • Partially offset by $1.7 million higher credit
Slide 7: Consolidated Credit Summary (Excluding Covered Loans)
Consolidated Credit Summary (Excluding Covered Loans) Continued credit quality improvements in key metrics: • NPLs declined by $120 million, down 7% from Q1 2012 • NCOs declined for the third consecutive quarter to $98 million Q2 12 vs Q1 12 Q2 12 vs Q2 11 $ in millions Q2 12 Q1 12 % Q2 11 % Loans H
Slide 8: Credit Quality Overview (Non Covered Loans)
Credit Quality Overview (Non Covered Loans) Non-Performing Loans ($M) • NPLs declinedby $120 million, down 7% from Q1 2012 and 33% from Q3 2010 peak; lowest levels since Q1 2009. Significant variances to peak levels are as follows: Construction $739M or 90% Consumer $31M or 47% Mortgage $36M or 5% C
Slide 9: Credit Quality Overview (Non Covered)
Credit Quality Overview (Non Covered) OREO and NPL HFS (SM) NPL HFS decrease driven mainly by bulk sales completed during Q4 2010 and Q3 2011 OREO increase driven mainly by the PR mortgage loan portfolio Over the last year and half, PR mortgage OREO disposition has averaged 81% of the UPB at default
Slide 10: Credit Quality Overview PR – Mortgage Loan Portfolio
Credit Quality OverviewPR – Mortgage Loan Portfolio AVG 90+ DPD Excluding repurchases from mortgage 30 DPD% 90 DPD% NCO % PORTFOLIO (avg.) recourse obligation, credit trends improving $ in millions since 2010 2007 $2,349 12.1% $121 5.2% 0.1% • Increase NCOs driven by change in charge- 2008 2,394 15.
Slide 11: FDIC-Assisted Acquisition Day 1 Assumptions
FDIC-Assisted Acquisition Day 1 Assumptions Covered loans accounted for under ASC 310-30 Day 1 Assumptions (Dollars in Millions) Balances Covered Loan Balances $ 4,909.6 Indemnity Asset 2,425.9 Clawback Payable (88.2) Total Expected Net Revenue Accretable Yield 1,538.1 Accretion of Indemnity Asset 2
Slide 12: FDIC-Assisted Acquisition is performing better than expected…
FDIC-Assisted Acquisition is performing better than expected… Covered loans accounted for under ASC 310-30 Revised net revenue expected to be $2.03 billion exceeding day 1 assumptions by $362.5 million Day 1 expected net revenues ($1,669.7) (Dollars in Millions) Net Revenue Impact Day 1 Actual/Revis
Slide 13: Conclusion
Conclusion 2012 Strategy • Further improve credit-risk profile • Continue to add low-risk assets • Continue efficiency efforts • Continue improvement at BPNA Robust capital position continues to improve Revenue-generating capacity remains strong but headwinds are still present • Economy in Puerto Ri
Slide 14: Appendix
Appendix
Slide 15: P.R. Economic Overview
P.R. Economic Overview • Official forecast calls for first positive GNP growth since 2005. Forecast is +0.9% (fiscal 2012) and +1.1% (fiscal 2013) • In the last severalquarters,indicatorssuchasretail and auto sales,home sales,cement salesandsales& usetax among others have improved • Unemployment rat
Slide 16: Who We Are – Popular, Inc.
Who We Are –Popular, Inc. Franchise Summary Corporate Structure • Financial services company • Headquartered in San Juan, Puerto Rico Assets = $36.6.bn Puerto Rico operations • $37 billion in assets (top 50 bank holding company in the U.S.) Banco Popular de Puerto Rico Popular Securities, Inc. Popul
Slide 17: P.R. Franchise Value Built Over Years
P.R. Franchise Value Built Over 118 Years • Indisputable, sustained market leadership Market Share Trend (20002012) – Total Deposits (Net of Brokered) Total Loans Source: Puerto Rico Office of the Commissioner of Financial Institutions Category Market Position as of Market Share Top Competitor Q1 20
Slide 18: PR & US Business
PR & US Business PR US $ in millions (Unaudited) Q2 12 Q1 12 Variance Q2 12 Q1 12 Variance Net Interest Income $298 $290 $8 $70 $74 ($4) Non Interest Income 85 114 (29) 15 16 (1) Gross Revenues 383 404 (21) 85 90 (5) Provision (non-covered) 66 68 (2) 15 15 0 Provision (covered WB) 38 18 20 - - - Pro
Slide 19: Loan Portfolio Composition
Loan Portfolio Composition- (Held in Portfolio- Q2 2012) Puerto Rico US Q2 2009 Q2 2012 Total % of %of total ($ in millions) Q2 2009 Q2 2012 Q2 2009Q2 2012 Q2 2009 Q2 2012 total HIP HIP Construction 1,317 202 272 48 1,589 250 6% 1% Commercial 7,229 6,163 4,495 3,440 11,724 9,603 47% 39% Leasing 653
Slide 20: Consolidated Credit Summary (Excluding Covered Loans)
Consolidated Credit Summary (Excluding Covered Loans) Continued credit quality improvements in key metrics: • NPLs declined by $120 million, down 7% from Q1 2012 • NCOs declined for the third consecutive quarter to $98 million Q2 12 vs Q1 12 Q2 12 vs Q2 11 $ in millions Q2 12 Q1 12 % Q2 11 % Loans H
Slide 21: Coverage Ratio
Coverage Ratio The Reserve to NPL coverage ratio of 42% does not take into account the high percentage of individually analyzed loans and lifetime charge-offs Total NPLs $ in millions $1,562 Individually Analyzed Collectively Analyzed $763 $799 1 1 CoverageRatio(CR) : 5% CoverageRatio(CR): 79% 2 35%
Slide 22: FDIC-Assisted Acquisition detail:
FDIC-Assisted Acquisition detail: Covered loans accounted for under ASC 310-30 Revenue Impact Balance Sheet Impact (Dollars in Millions) Day 1 Assumptions Balances Day 1 Accretable Yield $ 1,538.1 Covered Loan Balances $ 4,909.6 Amortization of Indemnity Asset 212.8 Provision Expense (embedded in ab
Slide 23: Credit Ratings Update
Credit Ratings Update • Our senior unsecured ratings have been gradually improving since 2010: Moody’s: Ba1 Negative Outlook S&P: B+ Stable Outlook Fitch: B+ Positive Outlook • April 2012: Moody’s placing most of the PR banks under review with the possibility of downgrades, due to the state of the P
Slide 24: Financial Results Second Quarter 2012
Financial Results Second Quarter 2012