Popular, Inc. (Holding company only) financial information

12 Months Ended

Dec. 31, 2016

Note 43 - Popular, Inc. (holding company only) financial information

The following condensed financial information presents the financial position of Popular, Inc. Holding Company only at December 31, 2016 and 2015, and the results of its operations and cash flows for each of the three years in the period ended December 31, 2016.

Condensed Statements of Condition
		December 31,
(In thousands)		2016		2015
ASSETS
Cash and due from banks (includes $47,614 due from bank subsidiary (2015 - $24,124))	$	47,783	$	24,298
Money market investments		252,347		262,204
Trading account securities		2,640		2,020
Investment securities available-for-sale, at fair value		-		216
Other investment securities, at lower of cost or realizable value (includes $8,725 in common
securities from statutory trusts (2015 - $8,725))^[1]		9,850		9,850
Investment in BPPR and subsidiaries, at equity		3,658,451		3,598,393
Investment in Popular North America and subsidiaries, at equity		1,707,167		1,687,104
Investment in other non-bank subsidiaries, at equity		243,993		253,828
Other loans		1,142		1,176
Less - Allowance for loan losses		2		3
Premises and equipment		3,067		2,823
Investment in equity method investees		51,259		45,262
Other assets (includes $936 due from subsidiaries and affiliate (2015 - $1,667))		11,257		10,817
Total assets	$	5,988,954	$	5,897,988

LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable	$	735,600	$	733,516
Other liabilities (includes $2,574 due to subsidiaries and affiliate (2015 - $1,133))		55,309		59,148
Stockholders’ equity		5,198,045		5,105,324
Total liabilities and stockholders’ equity	$	5,988,954	$	5,897,988
[1] Refer to Note 23 to the consolidated financial statements for information on the statutory trusts.

Condensed Statements of Operations
			Years ended December 31,
(In thousands)			2016		2015		2014
Income:
	Dividends from subsidiaries	$	102,300	$	41,350	$	-
	Interest income (includes $1,965 due from subsidiaries and affiliates (2015 - $1,188;
	2014 - $1,829))		2,141		1,332		1,931
	Earnings from investments in equity method investees		12,352		13,710		12,291
	Gain on sale and valuation adjustment of investment securities		1,767		-		-
	Trading account profit (loss)		90		(187)		(40)
Total income			118,650		56,205		14,182
Expenses:
	Interest expense		52,470		52,470		492,657
	Provision (reversal of provision) for loan losses		(35)		35		(200)
	Operating expenses (includes expenses for services provided by subsidiaries and affiliate
	of $8,160 (2015 - $7,309 ; 2014 - $6,882)), net of reimbursement by subsidiaries for
	services provided by parent of $74,573 (2015 - $74,799 ; 2014 - $67,021)		(4,208)		(1,293)		1,633
Total expenses			48,227		51,212		494,090
Income (loss) before income taxes and equity in undistributed
	earnings of subsidiaries		70,423		4,993		(479,908)
Income tax expense (benefit)			19		(186)		5,580
Income (loss) before equity in undistributed earnings of subsidiaries			70,404		5,179		(485,488)
Equity in undistributed earnings of subsidiaries			145,152		888,818		294,978
Income (loss) from continuing operations			215,556		893,997		(190,510)
Equity in undistributed earnings (losses) of discontinued operations			1,135		1,347		(122,980)
Net income (loss)		$	216,691	$	895,344	$	(313,490)
Comprehensive income (loss), net of tax		$	153,291	$	868,330	$	(354,617)

Condensed Statements of Cash Flows
				Years ended December 31,
(In thousands)				2016		2015		2014
Cash flows from operating activities:
Net income (loss)			$	216,691	$	895,344	$	(313,490)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
	operating activities:
	Equity in undistributed earnings of subsidiaries
		and dividends from subsidiaries		(146,287)		(890,165)		(171,998)
	Provision (reversal) for loan losses			(35)		35		(200)
	Net accretion of discounts and amortization of premiums and deferred fees			2,087		2		404,461
	Earnings from investments under the equity method			(12,352)		(13,710)		(12,291)
	Deferred income tax expense (benefit)			19		(186)		8,203
		Sale and valuation adjustments of investment securities		(1,767)		-		-
	Net (increase) decrease in:
		Trading securities		(620)		(380)		(288)
		Other assets		4,473		8,781		4,736
	Net increase (decrease) in:
		Interest payable		-		-		7,066
		Other liabilities		(3,854)		(5,622)		(180)
Total adjustments				(158,336)		(901,245)		239,509
Net cash provided by (used in) operating activities				58,355		(5,901)		(73,981)
Cash flows from investing activities:
	Net decrease (increase) in money market investments			9,857		(242,457)		(1,026)
	Proceeds from calls, paydowns, maturities and redemptions of investment securities:
		Other		-		-		1,000
	Proceeds from sale of investment securities:
		Available-for-sale		278		-		-
		Other		1,583		-		-
	Capital contribution to subsidiaries			-		-		(100,000)
	Net decrease in advances to subsidiaries and affiliates			-		53,769		465,731
	Net repayments (originations) on other loans			35		24		(279)
	Return of capital from equity method investments			433		11,500		-
	Return of capital from wholly owned subsidiaries			14,000		203,000		210,000
	Acquisition of premises and equipment			(953)		(1,079)		(1,075)
	Proceeds from sale of:
		Premises and equipment		56		9		48
		Foreclosed assets		434		-		-
Net cash provided by investing activities				25,723		24,766		574,399
Cash flows from financing activities:
	Payments of notes payable and subordinated notes			-		-		(936,000)
	Proceeds from issuance of notes payable			-		-		450,000
	Proceeds from issuance of common stock			7,437		6,226		5,394
	Dividends paid			(65,932)		(19,257)		(3,723)
	Repurchase of TARP-related warrants			-		-		(3,000)
	Net payments for repurchase of common stock			(2,098)		(1,984)		(3,236)
Net cash used in financing activities				(60,593)		(15,015)		(490,565)
Net increase in cash and due from banks				23,485		3,850		9,853
Cash and due from banks at beginning of period				24,298		20,448		10,595
Cash and due from banks at end of period			$	47,783	$	24,298	$	20,448

Popular, Inc. (parent company only) received dividend distributions from its direct equity method investees amounting to $4.7 million for the year ended December 31, 2016 (2015 - $4.7 million).

Notes payable include junior subordinated debentures issued by the Corporation that are associated to capital securities issued by the Popular Capital Trust I, Popular Capital Trust II and Popular Capital Trust III and medium-term notes. Refer to Note 23 for a description of significant provisions related to these junior subordinated debentures. The following table presents the aggregate amounts by contractual maturities of notes payable at December 31, 2016:

Year		(In thousands)
2017	$	-
2018		-
2019		444,788
2020		-
2021		-
Later years		290,812
No stated maturity		-
Total	$	735,600

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

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