Popular, Inc. (Holding company only) financial information

12 Months Ended

Dec. 31, 2018

Note 40 - 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, 2018 and 2017, and the results of its operations and cash flows for the years ended December 31, 2018

Condensed Statements of Condition
		December 31,
(In thousands)		2018		2017
ASSETS
Cash and due from banks (includes $68,022 due from bank subsidiary (2017 - $47,663))	$	68,022	$	47,663
Money market investments		176,256		246,457
Debt securities held-to-maturity, at amortized cost (includes $8,726 in common
securities from statutory trusts (2017 - $8,726))		8,726		8,726
Equity securities, at lower of cost or realizable value^[1]		6,693		5,109
Investment in BPPR and subsidiaries, at equity		3,813,640		3,727,383
Investment in Popular North America and subsidiaries, at equity		1,648,577		1,534,640
Investment in other non-bank subsidiaries, at equity		241,902		232,387
Other loans		32,678		33,221
Less - Allowance for loan losses		155		266
Premises and equipment		3,394		3,365
Investment in equity method investees		62,781		49,777
Other assets (includes $1,355 due from subsidiaries and affiliate (2017 - $1,096))		20,281		18,025
Total assets	$	6,082,795	$	5,906,487

LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable	$	584,851	$	737,685
Other liabilities (includes $3,110 due to subsidiaries and affiliate (2017 - $2,033))		62,799		64,813
Stockholders’ equity		5,435,145		5,103,989
Total liabilities and stockholders’ equity	$	6,082,795	$	5,906,487
[1] Refer to Note 20 to the consolidated financial statements for information on the statutory trusts.

Condensed Statements of Operations
			Years ended December 31,
(In thousands)			2018		2017		2016
Income:
	Dividends from subsidiaries	$	453,200	$	211,500	$	102,300
	Interest income (includes $6,121 due from subsidiaries and affiliates (2017 - $3,183;
	2016 - $1,965))		8,366		4,238		2,141
	Earnings from investments in equity method investees		15,498		11,761		12,352
	Other operating income		253		86		-
	Net (loss) gain, including impairment, on equity securities		(777)		-		1,767
	Net gain on trading account debt securities		-		266		90
Total income			476,540		227,851		118,650
Expenses:
	Interest expense		51,218		52,470		52,470
	Provision (reversal) for loan losses		(251)		403		(35)
	Loss on early extinguishment of debt		12,522		-		-
	Operating expenses (includes expenses for services provided by subsidiaries and affiliate
	of $10,511 (2017 - $8,225 ; 2016 - $8,160)), net of reimbursement by subsidiaries for
	services provided by parent of $90,807 (2017 - $76,720 ; 2016 - $74,573)		3,656		(1,773)		(4,208)
Total expenses			67,145		51,100		48,227
Income before income taxes and equity in undistributed
	earnings of subsidiaries		409,395		176,751		70,423
Income tax expense			-		-		19
Income before equity in undistributed earnings of subsidiaries			409,395		176,751		70,404
Equity in undistributed earnings (losses) of subsidiaries			208,763		(69,070)		145,152
Income from continuing operations			618,158		107,681		215,556
Equity in undistributed earnings of discontinued operations			-		-		1,135
Net income		$	618,158	$	107,681	$	216,691
Comprehensive income, net of tax		$	540,836	$	77,315	$	153,291

Condensed Statements of Cash Flows
				Years ended December 31,
(In thousands)				2018		2017		2016
Cash flows from operating activities:
Net income			$	618,158	$	107,681	$	216,691
Adjustments to reconcile net income to net cash provided by
	operating activities:
	Equity in (earnings) losses of subsidiaries,
		net of dividends or distributions		(208,763)		69,070		(146,287)
	Provision (reversal) for loan losses			(251)		403		(35)
	Amortization of intangibles			41		-		-
	Net accretion of discounts and amortization of premiums and deferred fees			2,022		2,086		2,087
	Share-based compensation			7,441		-		-
	Earnings from investments under the equity method, net of dividends or distributions			(14,333)		(7,765)		(7,572)
	Deferred income tax expense			-		-		19
	Loss on early extinguishment of debt			12,522		-		-
	Net (increase) decrease in:
		Equity securities		(1,583)		(1,346)		(524)
		Other assets		344		8,696		(190)
	Net (decrease) increase in:
		Interest payable		(10,288)		-		-
		Other liabilities		8,059		3,230		(3,854)
Total adjustments				(204,789)		74,374		(156,356)
Net cash provided by operating activities				413,369		182,055		60,335
Cash flows from investing activities:
	Net decrease in money market investments			70,000		6,000		10,008
	Capital contribution to subsidiaries			(87,000)		(5,955)		-
	Net repayments on other loans			536		181		35
	Return of capital from equity method investments			-		-		315
	Return of capital from wholly owned subsidiaries			13,000		22,400		14,000
	Acquisition of loans portfolio			-		(31,909)		-
	Acquisition of trademark			-		(5,560)		-
	Acquisition of premises and equipment			(1,099)		(965)		(953)
	Proceeds from sale of:
		Premises and equipment		293		23		56
		Foreclosed assets		-		38		434
Net cash (used in) provided by investing activities				(4,270)		(15,747)		23,895
Cash flows from financing activities:
	Payments of notes payable			(448,518)		-		-
	Payments of debt extinguishment			(12,522)		-		-
	Proceeds from issuance of notes payable			293,819		-		-
	Proceeds from issuance of common stock			11,653		7,016		7,437
	Dividends paid			(105,441)		(95,910)		(65,932)
	Net payments for repurchase of common stock			(125,731)		(75,668)		(475)
	Payments related to tax withholding for
		share-based compensation		(2,201)		(1,756)		(1,623)
Net cash used in financing activities				(388,941)		(166,318)		(60,593)
Net increase (decrease) in cash and due from banks, and restricted cash				20,158		(10)		23,637
Cash and due from banks, and restricted cash at beginning of period				48,120		48,130		24,493
Cash and due from banks, and restricted cash at end of period			$	68,278	$	48,120	$	48,130

Popular, Inc. (parent company only) received dividend distributions from its direct equity method investees amounting to $1.2 million for the year ended December 31, 2018 (2017 - $3.5 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 20 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, 2018:

Year		(In thousands)
2019	$	-
2020		-
2021		-
2022		-
2023		294,039
Later years		290,812
No stated maturity		-
Total	$	584,851