Popular, Inc. (Holding company only) financial information

12 Months Ended

Dec. 31, 2017

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, 2017 and 2016, and the results of its operations and cash flows for each of the three years in the period ended December 31, 2017.

Condensed Statements of Condition
		December 31,
(In thousands)		2017		2016
ASSETS
Cash and due from banks (includes $47,663 due from bank subsidiary (2016 - $47,614))	$	47,663	$	47,783
Money market investments		246,457		252,347
Trading account securities		3,985		2,640
Other investment securities, at lower of cost or realizable value (includes $8,725 in common
securities from statutory trusts (2016 - $8,725))^[1]		9,850		9,850
Investment in BPPR and subsidiaries, at equity		3,727,383		3,658,451
Investment in Popular North America and subsidiaries, at equity		1,534,640		1,707,167
Investment in other non-bank subsidiaries, at equity		232,387		243,993
Other loans		33,221		1,142
Less - Allowance for loan losses		266		2
Premises and equipment		3,365		3,067
Investment in equity method investees		49,777		51,259
Other assets (includes $1,096 due from subsidiaries and affiliate (2016 - $936))		18,025		11,257
Total assets	$	5,906,487	$	5,988,954

LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable	$	737,685	$	735,600
Other liabilities (includes $2,033 due to subsidiaries and affiliate (2016 - $2,574))		64,813		55,309
Stockholders’ equity		5,103,989		5,198,045
Total liabilities and stockholders’ equity	$	5,906,487	$	5,988,954
[1] Refer to Note 22 to the consolidated financial statements for information on the statutory trusts.

Condensed Statements of Operations
			Years ended December 31,
(In thousands)			2017		2016		2015
Income:
	Dividends from subsidiaries	$	211,500	$	102,300	$	41,350
	Interest income (includes $3,183 due from subsidiaries and affiliates (2016 - $1,965;
	2015 - $1,188))		4,238		2,141		1,332
	Earnings from investments in equity method investees		11,761		12,352		13,710
	Other operating income		86		-		-
	Gain on sale and valuation adjustment of investment securities		-		1,767		-
	Trading account profit (loss)		266		90		(187)
Total income			227,851		118,650		56,205
Expenses:
	Interest expense		52,470		52,470		52,470
	Provision (reversal of provision) for loan losses		403		(35)		35
	Operating expenses (includes expenses for services provided by subsidiaries and affiliate
	of $8,225 (2016 - $8,160 ; 2015 - $7,309)), net of reimbursement by subsidiaries for
	services provided by parent of $76,720 (2016 - $74,573 ; 2015 - $74,799)		(1,773)		(4,208)		(1,293)
Total expenses			51,100		48,227		51,212
Income before income taxes and equity in undistributed
	earnings of subsidiaries		176,751		70,423		4,993
Income tax expense (benefit)			-		19		(186)
Income before equity in undistributed earnings of subsidiaries			176,751		70,404		5,179
Equity in undistributed (losses) earnings of subsidiaries			(69,070)		145,152		888,818
Income from continuing operations			107,681		215,556		893,997
Equity in undistributed earnings of discontinued operations			-		1,135		1,347
Net income		$	107,681	$	216,691	$	895,344
Comprehensive income, net of tax		$	77,315	$	153,291	$	868,330

Condensed Statements of Cash Flows
				Years ended December 31,
(In thousands)				2017		2016		2015
Cash flows from operating activities:
Net income			$	107,681	$	216,691	$	895,344
Adjustments to reconcile net income to net cash provided by (used in)
	operating activities:
	Equity in undistributed earnings of subsidiaries,
		net of dividends or distributions		69,070		(146,287)		(890,165)
	Provision (reversal) for loan losses			403		(35)		35
	Net accretion of discounts and amortization of premiums and deferred fees			2,086		2,087		2
	Earnings from investments under the equity method			(11,761)		(12,352)		(13,710)
	Deferred income tax (benefit) expense			-		19		(186)
	Gain on:
		Sale and valuation adjustments of investment securities		-		(1,767)		-
	Net (increase) decrease in:
		Trading securities		(1,345)		(620)		(380)
		Other assets		12,191		4,473		8,781
	Net increase (decrease) in:
		Other liabilities		3,230		(3,854)		(5,622)
Total adjustments				73,874		(158,336)		(901,245)
Net cash provided by (used in) operating activities				181,555		58,355		(5,901)
Cash flows from investing activities:
	Net decrease (increase) in money market investments			5,890		9,857		(242,457)
	Proceeds from sale of investment securities:
		Available-for-sale		-		278		-
		Other		-		1,583		-
	Capital contribution to subsidiaries			(5,955)		-		-
	Net decrease in advances to subsidiaries and affiliates			-		-		53,769
	Net repayments on other loans			181		35		24
	Return of capital from equity method investments			500		433		11,500
	Return of capital from wholly owned subsidiaries			22,400		14,000		203,000
	Acquisition of loans portfolio			(31,909)		-		-
	Acquisition of trademark			(5,560)		-		-
	Acquisition of premises and equipment			(965)		(953)		(1,079)
	Proceeds from sale of:
		Premises and equipment		23		56		9
		Foreclosed assets		38		434		-
Net cash (used in) provided by investing activities				(15,357)		25,723		24,766
Cash flows from financing activities:
	Proceeds from issuance of common stock			7,016		7,437		6,226
	Dividends paid			(95,910)		(65,932)		(19,257)
	Net payments for repurchase of common stock			(75,668)		(475)		(1,021)
	Payments related to tax withholding for
		share-based compensation		(1,756)		(1,623)		(963)
Net cash used in financing activities				(166,318)		(60,593)		(15,015)
Net (decrease) increase in cash and due from banks				(120)		23,485		3,850
Cash and due from banks at beginning of period				47,783		24,298		20,448
Cash and due from banks at end of period			$	47,663	$	47,783	$	24,298

Popular, Inc. (parent company only) received dividend distributions from its direct equity method investees amounting to $3.5 million for the year ended December 31, 2017 (2016 - $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 22 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, 2017:

Year		(In thousands)
2018	$	-
2019		446,873
2020		-
2021		-
2022		-
Later years		290,812
No stated maturity		-
Total	$	737,685

- 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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