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Condensed consolidating financial information of guarantor and issuers of registered guaranteed securities
 6 Months Ended
Jun. 30, 2019
Disclosure Text Block  
Condensed Consolidating Financial Information of Guarantor and Issuers of Registeres Guranteed Securities Note 35 – Condensed consolidating financial information of guarantor and issuers of registered guaranteed securities

The following condensed consolidating financial information presents the financial position of Popular, Inc. Holding Company (“PIHC”) (parent only), Popular North America, Inc. (“PNA”) and all other subsidiaries of the Corporation at June 30, 2019 and December 31, 2018, and the results of their operations and cash flows for periods ended June 30, 2019 and 2018.

 

PNA is an operating, 100% owned subsidiary of PIHC and is the holding company of its wholly-owned subsidiaries: Equity One, Inc. and Popular Bank (“PB”), including PB’s wholly-owned subsidiaries Popular Equipment Finance, Inc., Popular Insurance Agency, U.S.A., and E-LOAN, Inc.

 

PIHC fully and unconditionally guarantees all registered debt securities issued by PNA.

Condensed Consolidating Statement of Financial Condition (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2019

 

 

 

 

 

 

 

All other

 

 

 

 

 

 

 

Popular Inc.

PNA

 

subsidiaries and

 

Elimination

 

Popular, Inc.

(In thousands)

 

Holding Co.

Holding Co.

 

eliminations

 

entries

 

Consolidated

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

78,578

$

-

 

$

392,050

 

$

(78,925)

 

$

391,703

Money market investments

 

 

101,428

 

12,245

 

 

3,171,688

 

 

(113,245)

 

 

3,172,116

Trading account debt securities, at fair value

 

 

-

 

-

 

 

35,623

 

 

-

 

 

35,623

Debt securities available-for-sale, at fair value

 

 

-

 

-

 

 

16,734,722

 

 

-

 

 

16,734,722

Debt securities held-to-maturity, at amortized cost

 

 

8,726

 

2,835

 

 

88,038

 

 

-

 

 

99,599

Equity securities

 

 

9,653

 

20

 

 

158,663

 

 

(182)

 

 

168,154

Investment in subsidiaries

 

 

6,040,200

 

1,767,382

 

 

-

 

 

(7,807,582)

 

 

-

Loans held-for-sale, at lower of cost or fair value

 

 

-

 

-

 

 

54,028

 

 

-

 

 

54,028

Loans held-in-portfolio

 

 

32,293

 

-

 

 

27,133,219

 

 

5,955

 

 

27,171,467

 

Less - Unearned income

 

 

-

 

-

 

 

165,722

 

 

-

 

 

165,722

 

Allowance for loan losses

 

 

414

 

-

 

 

543,252

 

 

-

 

 

543,666

 

Total loans held-in-portfolio, net

 

 

31,879

 

-

 

 

26,424,245

 

 

5,955

 

 

26,462,079

Premises and equipment, net

 

 

3,651

 

-

 

 

550,963

 

 

-

 

 

554,614

Other real estate

 

 

146

 

-

 

 

118,705

 

 

-

 

 

118,851

Accrued income receivable

 

 

329

 

116

 

 

170,531

 

 

(90)

 

 

170,886

Mortgage servicing assets, at fair value

 

 

-

 

-

 

 

153,021

 

 

-

 

 

153,021

Other assets

 

 

90,780

 

27,727

 

 

1,711,633

 

 

(23,315)

 

 

1,806,825

Goodwill

 

 

-

 

-

 

 

671,123

 

 

(1)

 

 

671,122

Other intangible assets

 

 

6,512

 

-

 

 

17,366

 

 

-

 

 

23,878

Total assets

 

$

6,371,882

$

1,810,325

 

$

50,452,399

 

$

(8,017,385)

 

$

50,617,221

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing

 

$

-

$

-

 

$

9,034,229

 

$

(78,925)

 

$

8,955,304

 

Interest bearing

 

 

-

 

-

 

 

33,217,778

 

 

(113,245)

 

 

33,104,533

 

Total deposits

 

 

-

 

-

 

 

42,252,007

 

 

(192,170)

 

 

42,059,837

Assets sold under agreements to repurchase

 

 

-

 

-

 

 

233,091

 

 

-

 

 

233,091

Other short-term borrowings

 

 

-

 

-

 

 

160,000

 

 

-

 

 

160,000

Notes payable

 

 

585,485

 

94,077

 

 

532,017

 

 

-

 

 

1,211,579

Other liabilities

 

 

66,634

 

3,191

 

 

1,186,483

 

 

(23,428)

 

 

1,232,880

Total liabilities

 

 

652,119

 

97,268

 

 

44,363,598

 

 

(215,598)

 

 

44,897,387

Stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

50,160

 

-

 

 

-

 

 

-

 

 

50,160

Common stock

 

 

1,044

 

2

 

 

56,307

 

 

(56,309)

 

 

1,044

Surplus

 

 

4,307,520

 

4,173,070

 

 

5,791,073

 

 

(9,955,438)

 

 

4,316,225

Retained earnings (accumulated deficit)

 

 

1,944,353

 

(2,454,515)

 

 

427,708

 

 

2,018,280

 

 

1,935,826

Treasury stock, at cost

 

 

(392,101)

 

-

 

 

-

 

 

(107)

 

 

(392,208)

Accumulated other comprehensive loss,net of tax

 

 

(191,213)

 

(5,500)

 

 

(186,287)

 

 

191,787

 

 

(191,213)

Total stockholders' equity

 

 

5,719,763

 

1,713,057

 

 

6,088,801

 

 

(7,801,787)

 

 

5,719,834

Total liabilities and stockholders' equity

 

$

6,371,882

$

1,810,325

 

$

50,452,399

 

$

(8,017,385)

 

$

50,617,221

Condensed Consolidating Statement of Financial Condition (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2018

 

 

 

 

 

 

All other

 

 

 

 

 

 

 

Popular, Inc.

PNA

 

subsidiaries and

 

Elimination

 

Popular, Inc.

(In thousands)

 

Holding Co.

Holding Co.

 

eliminations

 

entries

 

Consolidated

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

68,022

$

-

 

$

394,035

 

$

(68,022)

 

$

394,035

Money market investments

 

 

176,256

 

15,288

 

 

4,170,792

 

 

(191,288)

 

 

4,171,048

Trading account debt securities, at fair value

 

 

-

 

-

 

 

37,787

 

 

-

 

 

37,787

Debt securities available-for-sale, at fair value

 

 

-

 

-

 

 

13,300,184

 

 

-

 

 

13,300,184

Debt securities held-to-maturity, at amortized cost

 

 

8,726

 

2,835

 

 

90,014

 

 

-

 

 

101,575

Equity securities

 

 

6,693

 

20

 

 

149,012

 

 

(141)

 

 

155,584

Investment in subsidiaries

 

 

5,704,119

 

1,700,082

 

 

-

 

 

(7,404,201)

 

 

-

Loans held-for-sale, at lower of cost or fair value

 

 

-

 

-

 

 

51,422

 

 

-

 

 

51,422

Loans held-in-portfolio

 

 

32,678

 

-

 

 

26,625,080

 

 

5,955

 

 

26,663,713

 

Less - Unearned income

 

 

-

 

-

 

 

155,824

 

 

-

 

 

155,824

 

Allowance for loan losses

 

 

155

 

-

 

 

569,193

 

 

-

 

 

569,348

 

Total loans held-in-portfolio, net

 

 

32,523

 

-

 

 

25,900,063

 

 

5,955

 

 

25,938,541

Premises and equipment, net

 

 

3,394

 

-

 

 

566,414

 

 

-

 

 

569,808

Other real estate

 

 

146

 

-

 

 

136,559

 

 

-

 

 

136,705

Accrued income receivable

 

 

284

 

116

 

 

165,767

 

 

(145)

 

 

166,022

Mortgage servicing assets, at fair value

 

 

-

 

-

 

 

169,777

 

 

-

 

 

169,777

Other assets

 

 

76,073

 

27,639

 

 

1,626,119

 

 

(15,697)

 

 

1,714,134

Goodwill

 

 

-

 

-

 

 

671,123

 

 

(1)

 

 

671,122

Other intangible assets

 

 

6,559

 

-

 

 

20,274

 

 

-

 

 

26,833

Total assets

 

$

6,082,795

$

1,745,980

 

$

47,449,342

 

$

(7,673,540)

 

$

47,604,577

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing

 

$

-

$

-

 

$

9,217,058

 

$

(68,022)

 

$

9,149,036

 

Interest bearing

 

 

-

 

-

 

 

30,752,291

 

 

(191,288)

 

 

30,561,003

 

Total deposits

 

 

-

 

-

 

 

39,969,349

 

 

(259,310)

 

 

39,710,039

Assets sold under agreements to repurchase

 

 

-

 

-

 

 

281,529

 

 

-

 

 

281,529

Other short-term borrowings

 

 

-

 

-

 

 

42

 

 

-

 

 

42

Notes payable

 

 

584,851

 

94,063

 

 

577,188

 

 

-

 

 

1,256,102

Other liabilities

 

 

62,799

 

3,287

 

 

871,733

 

 

(16,011)

 

 

921,808

Total liabilities

 

 

647,650

 

97,350

 

 

41,699,841

 

 

(275,321)

 

 

42,169,520

Stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

50,160

 

-

 

 

-

 

 

-

 

 

50,160

Common stock

 

 

1,043

 

2

 

 

56,307

 

 

(56,309)

 

 

1,043

Surplus

 

 

4,357,079

 

4,172,983

 

 

5,790,324

 

 

(9,954,780)

 

 

4,365,606

Retained earnings (accumulated deficit)

 

 

1,660,258

 

(2,479,503)

 

 

327,713

 

 

2,143,263

 

 

1,651,731

Treasury stock, at cost

 

 

(205,421)

 

-

 

 

-

 

 

(88)

 

 

(205,509)

Accumulated other comprehensive loss,net of tax

 

 

(427,974)

 

(44,852)

 

 

(424,843)

 

 

469,695

 

 

(427,974)

Total stockholders' equity

 

 

5,435,145

 

1,648,630

 

 

5,749,501

 

 

(7,398,219)

 

 

5,435,057

Total liabilities and stockholders' equity

 

$

6,082,795

$

1,745,980

 

$

47,449,342

 

$

(7,673,540)

 

$

47,604,577

Condensed Consolidating Statement of Operations (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended June 30, 2019

 

 

 

 

 

 

 

 

All other

 

 

 

 

 

 

 

 

 

Popular, Inc.

PNA

subsidiaries and

Elimination

Popular, Inc.

(In thousands)

 

Holding Co.

Holding Co.

eliminations

entries

Consolidated

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend income from subsidiaries

 

$

52,000

 

$

-

 

$

-

 

$

(52,000)

 

$

-

 

Loans

 

 

497

 

 

-

 

 

453,707

 

 

-

 

 

454,204

 

Money market investments

 

 

618

 

 

55

 

 

22,533

 

 

(672)

 

 

22,534

 

Investment securities

 

 

159

 

 

47

 

 

94,035

 

 

-

 

 

94,241

 

Total interest and dividend income

 

 

53,274

 

 

102

 

 

570,275

 

 

(52,672)

 

 

570,979

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

-

 

 

-

 

 

79,121

 

 

(672)

 

 

78,449

 

Short-term borrowings

 

 

-

 

 

-

 

 

1,656

 

 

-

 

 

1,656

 

Long-term debt

 

 

9,632

 

 

1,558

 

 

3,368

 

 

-

 

 

14,558

 

Total interest expense

 

 

9,632

 

 

1,558

 

 

84,145

 

 

(672)

 

 

94,663

Net interest income (expense)

 

 

43,642

 

 

(1,456)

 

 

486,130

 

 

(52,000)

 

 

476,316

Provision for loan losses

 

 

153

 

 

-

 

 

40,038

 

 

-

 

 

40,191

Net interest income (expense) after provision for loan losses

 

 

43,489

 

 

(1,456)

 

 

446,092

 

 

(52,000)

 

 

436,125

Service charges on deposit accounts

 

 

-

 

 

-

 

 

39,617

 

 

-

 

 

39,617

Other service fees

 

 

1

 

 

-

 

 

75,766

 

 

(1,736)

 

 

74,031

Mortgage banking activities

 

 

-

 

 

-

 

 

(1,773)

 

 

-

 

 

(1,773)

Net gain, including impairment on equity securities

 

 

283

 

 

-

 

 

254

 

 

(9)

 

 

528

Net profit on trading account debt securities

 

 

-

 

 

-

 

 

422

 

 

-

 

 

422

Adjustments to indemnity reserves on loans sold

 

 

-

 

 

-

 

 

1,840

 

 

-

 

 

1,840

Other operating income

 

 

3,636

 

 

633

 

 

19,401

 

 

(9)

 

 

23,661

 

Total non-interest income

 

 

3,920

 

 

633

 

 

135,527

 

 

(1,754)

 

 

138,326

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

14,376

 

 

-

 

 

127,123

 

 

-

 

 

141,499

Net occupancy expenses

 

 

1,178

 

 

-

 

 

22,119

 

 

2

 

 

23,299

Equipment expenses

 

 

1,027

 

 

1

 

 

20,295

 

 

-

 

 

21,323

Other taxes

 

 

62

 

 

1

 

 

12,514

 

 

-

 

 

12,577

Professional fees

 

 

4,721

 

 

28

 

 

90,728

 

 

(229)

 

 

95,248

Communications

 

 

219

 

 

-

 

 

5,736

 

 

-

 

 

5,955

Business promotion

 

 

899

 

 

-

 

 

18,220

 

 

-

 

 

19,119

FDIC deposit insurance

 

 

-

 

 

-

 

 

5,278

 

 

-

 

 

5,278

Other real estate owned (OREO) expenses

 

 

-

 

 

-

 

 

1,237

 

 

-

 

 

1,237

Other operating expenses

 

 

(24,453)

 

 

16

 

 

60,193

 

 

(647)

 

 

35,109

Amortization of intangibles

 

 

25

 

 

-

 

 

2,346

 

 

-

 

 

2,371

 

Total operating expenses

 

 

(1,946)

 

 

46

 

 

365,789

 

 

(874)

 

 

363,015

Income (loss) before income tax and equity in (losses) earnings of subsidiaries

 

 

49,355

 

 

(869)

 

 

215,830

 

 

(52,880)

 

 

211,436

Income tax (benefit) expense

 

 

-

 

 

(183)

 

 

40,852

 

 

(339)

 

 

40,330

Income (loss) before equity in (losses) earnings of subsidiaries

 

 

49,355

 

 

(686)

 

 

174,978

 

 

(52,541)

 

 

171,106

Equity in undistributed earnings of subsidiaries

 

 

121,751

 

 

10,893

 

 

-

 

 

(132,644)

 

 

-

Net income

 

$

171,106

 

$

10,207

 

$

174,978

 

$

(185,185)

 

$

171,106

Comprehensive income, net of tax

 

$

303,872

 

$

31,499

 

$

308,913

 

$

(340,412)

 

$

303,872

Condensed Consolidating Statement of Operations (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2019

 

 

 

 

 

 

 

 

All other

 

 

 

 

 

 

 

 

 

Popular, Inc.

PNA

subsidiaries and

Elimination

Popular, Inc.

(In thousands)

 

Holding Co.

Holding Co.

eliminations

entries

Consolidated

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend income from subsidiaries

 

$

254,300

 

$

-

 

$

-

 

$

(254,300)

 

$

-

 

Loans

 

 

1,085

 

 

-

 

 

900,832

 

 

-

 

 

901,917

 

Money market investments

 

 

1,740

 

 

106

 

 

51,753

 

 

(1,845)

 

 

51,754

 

Investment securities

 

 

313

 

 

93

 

 

174,871

 

 

-

 

 

175,277

 

Total interest and dividend income

 

 

257,438

 

 

199

 

 

1,127,456

 

 

(256,145)

 

 

1,128,948

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

-

 

 

-

 

 

151,120

 

 

(1,845)

 

 

149,275

 

Short-term borrowings

 

 

-

 

 

-

 

 

3,256

 

 

-

 

 

3,256

 

Long-term debt

 

 

19,264

 

 

3,115

 

 

6,759

 

 

-

 

 

29,138

 

Total interest expense

 

 

19,264

 

 

3,115

 

 

161,135

 

 

(1,845)

 

 

181,669

Net interest income (expense)

 

 

238,174

 

 

(2,916)

 

 

966,321

 

 

(254,300)

 

 

947,279

Provision for loan losses

 

 

259

 

 

-

 

 

81,757

 

 

-

 

 

82,016

Net interest income (expense) after provision for loan losses

 

 

237,915

 

 

(2,916)

 

 

884,564

 

 

(254,300)

 

 

865,263

Service charges on deposit accounts

 

 

-

 

 

-

 

 

78,308

 

 

-

 

 

78,308

Other service fees

 

 

2

 

 

-

 

 

140,172

 

 

(1,836)

 

 

138,338

Mortgage banking activities

 

 

-

 

 

-

 

 

8,153

 

 

-

 

 

8,153

Net gain, including impairment on equity securities

 

 

870

 

 

-

 

 

1,113

 

 

(22)

 

 

1,961

Net gain on trading account debt securities

 

 

-

 

 

-

 

 

682

 

 

-

 

 

682

Adjustments to indemnity reserves on loans sold

 

 

-

 

 

-

 

 

1,747

 

 

-

 

 

1,747

Other operating income (expense)

 

 

8,805

 

 

(634)

 

 

37,416

 

 

(20)

 

 

45,567

 

Total non-interest income (expense)

 

 

9,677

 

 

(634)

 

 

267,591

 

 

(1,878)

 

 

274,756

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

32,703

 

 

-

 

 

251,913

 

 

-

 

 

284,616

Net occupancy expenses

 

 

2,225

 

 

-

 

 

44,654

 

 

(43)

 

 

46,836

Equipment expenses

 

 

1,699

 

 

2

 

 

39,327

 

 

-

 

 

41,028

Other taxes

 

 

124

 

 

1

 

 

24,114

 

 

-

 

 

24,239

Professional fees

 

 

7,410

 

 

55

 

 

175,578

 

 

(329)

 

 

182,714

Communications

 

 

333

 

 

-

 

 

11,471

 

 

-

 

 

11,804

Business promotion

 

 

1,681

 

 

-

 

 

32,112

 

 

-

 

 

33,793

FDIC deposit insurance

 

 

-

 

 

-

 

 

10,084

 

 

-

 

 

10,084

Other real estate owned (OREO) expenses

 

 

-

 

 

-

 

 

3,914

 

 

-

 

 

3,914

Other operating expenses

 

 

(45,792)

 

 

29

 

 

113,705

 

 

(1,218)

 

 

66,724

Amortization of intangibles

 

 

49

 

 

-

 

 

4,634

 

 

-

 

 

4,683

 

Total operating expenses

 

 

432

 

 

87

 

 

711,506

 

 

(1,590)

 

 

710,435

Income (loss) before income tax and equity in earnings of subsidiaries

 

 

247,160

 

 

(3,637)

 

 

440,649

 

 

(254,588)

 

 

429,584

Income tax (benefit) expense

 

 

-

 

 

(764)

 

 

91,438

 

 

(121)

 

 

90,553

Income (loss) before equity in earnings of subsidiaries

 

 

247,160

 

 

(2,873)

 

 

349,211

 

 

(254,467)

 

 

339,031

Equity in undistributed earnings of subsidiaries

 

 

91,871

 

 

23,038

 

 

-

 

 

(114,909)

 

 

-

Net income

 

$

339,031

 

$

20,165

 

$

349,211

 

$

(369,376)

 

$

339,031

Comprehensive income, net of tax

 

$

575,792

 

$

59,517

 

$

587,767

 

$

(647,284)

 

$

575,792

Condensed Consolidating Statement of Operations (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended June 30, 2018

 

 

 

 

 

 

 

 

All other

 

 

 

 

 

 

 

 

Popular, Inc.

PNA

subsidiaries and

Elimination

Popular, Inc.

(In thousands)

Holding Co.

Holding Co.

eliminations

entries

Consolidated

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend income from subsidiaries

 

$

325,000

 

$

-

 

$

-

 

$

(325,000)

 

$

-

 

Loans

 

 

539

 

 

-

 

 

385,759

 

 

(21)

 

 

386,277

 

Money market investments

 

 

996

 

 

1

 

 

36,391

 

 

(996)

 

 

36,392

 

Investment securities

 

 

150

 

 

80

 

 

57,951

 

 

-

 

 

58,181

 

Total interest and dividend income

 

 

326,685

 

 

81

 

 

480,101

 

 

(326,017)

 

 

480,850

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

-

 

 

-

 

 

46,224

 

 

(996)

 

 

45,228

 

Short-term borrowings

 

 

-

 

 

21

 

 

1,752

 

 

(21)

 

 

1,752

 

Long-term debt

 

 

13,117

 

 

2,691

 

 

3,926

 

 

-

 

 

19,734

 

Total interest expense

 

 

13,117

 

 

2,712

 

 

51,902

 

 

(1,017)

 

 

66,714

Net interest income (expense)

 

 

313,568

 

 

(2,631)

 

 

428,199

 

 

(325,000)

 

 

414,136

Provision (reversal) for loan losses

 

 

(20)

 

 

-

 

 

60,074

 

 

-

 

 

60,054

Net interest income (expense) after provision for loan losses

 

 

313,588

 

 

(2,631)

 

 

368,125

 

 

(325,000)

 

 

354,082

Service charges on deposit accounts

 

 

-

 

 

-

 

 

37,102

 

 

-

 

 

37,102

Other service fees

 

 

-

 

 

-

 

 

64,024

 

 

(1,148)

 

 

62,876

Mortgage banking activities

 

 

-

 

 

-

 

 

10,071

 

 

-

 

 

10,071

Net gain, including impairment on equity securities

 

 

46

 

 

-

 

 

198

 

 

(10)

 

 

234

Net profit on trading account debt securities

 

 

-

 

 

-

 

 

21

 

 

-

 

 

21

Adjustments (expense) to indemnity reserves on loans sold

 

 

-

 

 

-

 

 

(527)

 

 

-

 

 

(527)

FDIC loss-share income

 

 

-

 

 

-

 

 

102,752

 

 

-

 

 

102,752

Other operating income (expense)

 

 

3,751

 

 

(355)

 

 

18,895

 

 

(11)

 

 

22,280

 

Total non-interest income (expense)

 

 

3,797

 

 

(355)

 

 

232,536

 

 

(1,169)

 

 

234,809

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

12,651

 

 

-

 

 

111,681

 

 

-

 

 

124,332

Net occupancy expenses

 

 

1,107

 

 

-

 

 

21,318

 

 

-

 

 

22,425

Equipment expenses

 

 

1,036

 

 

1

 

 

16,738

 

 

-

 

 

17,775

Other taxes

 

 

56

 

 

-

 

 

10,820

 

 

-

 

 

10,876

Professional fees

 

 

5,712

 

 

77

 

 

88,192

 

 

(78)

 

 

93,903

Communications

 

 

124

 

 

-

 

 

5,258

 

 

-

 

 

5,382

Business promotion

 

 

405

 

 

-

 

 

16,373

 

 

-

 

 

16,778

FDIC deposit insurance

 

 

-

 

 

-

 

 

7,004

 

 

-

 

 

7,004

Other real estate owned (OREO) expenses

 

 

-

 

 

-

 

 

6,947

 

 

-

 

 

6,947

Other operating expenses

 

 

(22,588)

 

 

40

 

 

53,069

 

 

(599)

 

 

29,922

Amortization of intangibles

 

 

-

 

 

-

 

 

2,324

 

 

-

 

 

2,324

 

Total operating expenses

 

 

(1,497)

 

 

118

 

 

339,724

 

 

(677)

 

 

337,668

Income (loss) before income tax and equity in earnings (losses) of subsidiaries

 

 

318,882

 

 

(3,104)

 

 

260,937

 

 

(325,492)

 

 

251,223

Income tax expense (benefit)

 

 

-

 

 

349

 

 

(28,721)

 

 

(188)

 

 

(28,560)

Income (loss) before equity in earnings (losses) of subsidiaries

 

 

318,882

 

 

(3,453)

 

 

289,658

 

 

(325,304)

 

 

279,783

Equity in undistributed (losses) earnings of subsidiaries

 

 

(39,099)

 

 

10,198

 

 

-

 

 

28,901

 

 

-

Net income

 

$

279,783

 

$

6,745

 

$

289,658

 

$

(296,403)

 

$

279,783

Comprehensive income, net of tax

 

$

245,829

 

$

770

 

$

256,093

 

$

(256,863)

 

$

245,829

Condensed Consolidating Statement of Operations (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2018

 

 

 

 

 

 

 

 

All other

 

 

 

 

 

 

 

 

 

Popular, Inc.

PNA

subsidiaries and

Elimination

Popular, Inc.

(In thousands)

 

Holding Co.

Holding Co.

eliminations

entries

Consolidated

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend income from subsidiaries

 

$

350,000

 

$

-

 

$

-

 

$

(350,000)

 

$

-

 

Loans

 

 

1,064

 

 

-

 

 

758,824

 

 

(27)

 

 

759,861

 

Money market investments

 

 

1,838

 

 

2

 

 

58,676

 

 

(1,839)

 

 

58,677

 

Investment securities

 

 

297

 

 

161

 

 

114,932

 

 

-

 

 

115,390

 

Total interest and dividend income

 

 

353,199

 

 

163

 

 

932,432

 

 

(351,866)

 

 

933,928

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

-

 

 

-

 

 

85,755

 

 

(1,839)

 

 

83,916

 

Short-term borrowings

 

 

-

 

 

27

 

 

3,765

 

 

(27)

 

 

3,765

 

Long-term debt

 

 

26,235

 

 

5,383

 

 

7,446

 

 

-

 

 

39,064

 

Total interest expense

 

 

26,235

 

 

5,410

 

 

96,966

 

 

(1,866)

 

 

126,745

Net interest income (expense)

 

 

326,964

 

 

(5,247)

 

 

835,466

 

 

(350,000)

 

 

807,183

Provision (reversal) for loan losses- non-covered loans

 

 

(41)

 

 

-

 

 

129,428

 

 

-

 

 

129,387

Provision for loan losses- covered loans

 

 

-

 

 

-

 

 

1,730

 

 

-

 

 

1,730

Net interest income (expense) after provision for loan losses

 

 

327,005

 

 

(5,247)

 

 

704,308

 

 

(350,000)

 

 

676,066

Service charges on deposit accounts

 

 

-

 

 

-

 

 

73,557

 

 

-

 

 

73,557

Other service fees

 

 

-

 

 

-

 

 

124,871

 

 

(1,393)

 

 

123,478

Mortgage banking activities

 

 

-

 

 

-

 

 

22,139

 

 

-

 

 

22,139

Net gain (loss), including impairment on equity securities

 

 

4

 

 

-

 

 

(386)

 

 

(30)

 

 

(412)

Net loss on trading account debt securities

 

 

-

 

 

-

 

 

(177)

 

 

-

 

 

(177)

Adjustments (expense) to indemnity reserves on loans sold

 

 

-

 

 

-

 

 

(3,453)

 

 

-

 

 

(3,453)

FDIC loss-share income

 

 

-

 

 

-

 

 

94,725

 

 

-

 

 

94,725

Other operating income

 

 

7,496

 

 

396

 

 

30,582

 

 

(25)

 

 

38,449

 

Total non-interest income

 

 

7,500

 

 

396

 

 

341,858

 

 

(1,448)

 

 

348,306

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

27,562

 

 

-

 

 

222,622

 

 

-

 

 

250,184

Net occupancy expenses

 

 

2,097

 

 

-

 

 

43,130

 

 

-

 

 

45,227

Equipment expenses

 

 

1,544

 

 

2

 

 

33,435

 

 

-

 

 

34,981

Other taxes

 

 

97

 

 

1

 

 

21,680

 

 

-

 

 

21,778

Professional fees

 

 

9,356

 

 

108

 

 

167,747

 

 

(323)

 

 

176,888

Communications

 

 

236

 

 

-

 

 

11,052

 

 

-

 

 

11,288

Business promotion

 

 

803

 

 

-

 

 

27,984

 

 

-

 

 

28,787

FDIC deposit insurance

 

 

-

 

 

-

 

 

13,924

 

 

-

 

 

13,924

Other real estate owned (OREO) expenses

 

 

-

 

 

-

 

 

13,078

 

 

-

 

 

13,078

Other operating expenses

 

 

(40,752)

 

 

54

 

 

100,789

 

 

(1,205)

 

 

58,886

Amortization of intangibles

 

 

-

 

 

-

 

 

4,649

 

 

-

 

 

4,649

 

Total operating expenses

 

 

943

 

 

165

 

 

660,090

 

 

(1,528)

 

 

659,670

Income (loss) before income tax and equity in earnings of subsidiaries

 

 

333,562

 

 

(5,016)

 

 

386,076

 

 

(349,920)

 

 

364,702

Income tax expense (benefit)

 

 

-

 

 

892

 

 

(7,340)

 

 

43

 

 

(6,405)

Income (loss) before equity in earnings of subsidiaries

 

 

333,562

 

 

(5,908)

 

 

393,416

 

 

(349,963)

 

 

371,107

Equity in undistributed earnings of subsidiaries

 

 

37,545

 

 

26,050

 

 

-

 

 

(63,595)

 

 

-

Net income

 

$

371,107

 

$

20,142

 

$

393,416

 

$

(413,558)

 

$

371,107

Comprehensive income (loss), net of tax

 

$

224,967

 

$

(8,015)

 

$

246,999

 

$

(238,984)

 

$

224,967

Condensed Consolidating Statement of Cash Flows

 

 

 

 

 

 

Six months ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

All other

 

 

 

 

 

 

 

 

 

 

Popular, Inc.

 

PNA

 

subsidiaries

 

Elimination

 

Popular, Inc.

(In thousands)

 

Holding Co.

 

Holding Co.

 

and eliminations

 

entries

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net income

$

339,031

$

20,165

$

349,211

$

(369,376)

$

339,031

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Equity in earnings of subsidiaries, net of dividends or distributions

 

(91,871)

 

(23,038)

 

-

 

114,909

 

-

 

Provision for loan losses

 

259

 

-

 

81,757

 

-

 

82,016

 

Amortization of intangibles

 

49

 

-

 

4,634

 

-

 

4,683

 

Depreciation and amortization of premises and equipment

 

373

 

-

 

28,351

 

-

 

28,724

 

Net accretion of discounts and amortization of premiums and deferred fees

 

624

 

13

 

(82,690)

 

-

 

(82,053)

 

Share-based compensation

 

6,925

 

-

 

3,483

 

-

 

10,408

 

Fair value adjustments on mortgage servicing rights

 

-

 

-

 

21,011

 

-

 

21,011

 

Adjustments to indemnity reserves on loans sold

 

-

 

-

 

(1,747)

 

-

 

(1,747)

 

Earnings from investments under the equity method, net of dividends or distributions

 

(7,640)

 

634

 

(251)

 

-

 

(7,257)

 

Deferred income tax (benefit) expense

 

-

 

(764)

 

75,968

 

(121)

 

75,083

 

Loss (gain) on:

 

 

 

 

 

 

 

 

 

 

 

 

 

Disposition of premises and equipment and other productive assets

 

39

 

-

 

(4,180)

 

-

 

(4,141)

 

 

 

Sale of loans, including valuation adjustments on loans held for sale and mortgage banking activities

 

-

 

-

 

(5,939)

 

-

 

(5,939)

 

 

 

Sale of foreclosed assets, including write-downs

 

-

 

-

 

(9,826)

 

-

 

(9,826)

 

Acquisitions of loans held-for-sale

 

-

 

-

 

(103,233)

 

-

 

(103,233)

 

Proceeds from sale of loans held-for-sale

 

-

 

-

 

31,063

 

-

 

31,063

 

Net originations on loans held-for-sale

 

-

 

-

 

(125,707)

 

-

 

(125,707)

 

Net decrease (increase) in:

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading debt securities

 

-

 

-

 

215,569

 

-

 

215,569

 

 

 

Equity securities

 

(2,960)

 

-

 

(2,951)

 

-

 

(5,911)

 

 

 

Accrued income receivable

 

(45)

 

-

 

(4,764)

 

(55)

 

(4,864)

 

 

 

Other assets

 

81

 

42

 

(11,425)

 

7,739

 

(3,563)

 

Net increase (decrease) in:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest payable

 

-

 

-

 

858

 

55

 

913

 

 

 

Pension and other postretirement benefits obligations

 

-

 

-

 

10,399

 

-

 

10,399

 

 

 

Other liabilities

 

(4,883)

 

(95)

 

(112,867)

 

(7,472)

 

(125,317)

Total adjustments

 

(99,049)

 

(23,208)

 

7,513

 

115,055

 

311

Net cash provided by (used in) operating activities

 

239,982

 

(3,043)

 

356,724

 

(254,321)

 

339,342

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Net decrease in money market investments

 

75,000

 

3,043

 

997,694

 

(78,043)

 

997,694

 

Purchases of investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

-

 

-

 

(9,684,912)

 

-

 

(9,684,912)

 

 

 

Equity

 

-

 

-

 

(12,747)

 

41

 

(12,706)

 

Proceeds from calls, paydowns, maturities and redemptions of investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

-

 

-

 

6,789,265

 

-

 

6,789,265

 

 

 

Held-to-maturity

 

-

 

-

 

2,980

 

-

 

2,980

 

Proceeds from sale of investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

-

 

-

 

6,047

 

-

 

6,047

 

Net repayments (disbursements) on loans

 

394

 

-

 

(324,461)

 

-

 

(324,067)

 

Proceeds from sale of loans

 

-

 

-

 

29,943

 

-

 

29,943

 

Acquisition of loan portfolios

 

-

 

-

 

(312,752)

 

-

 

(312,752)

 

Payments to acquire other intangible

 

-

 

-

 

(793)

 

-

 

(793)

 

Return of capital from equity method investments

 

-

 

-

 

1,397

 

-

 

1,397

 

Acquisition of premises and equipment

 

(671)

 

-

 

(37,255)

 

-

 

(37,926)

 

Proceeds from sale of:

 

 

 

 

 

 

 

 

 

 

 

 

 

Premises and equipment and other productive assets

 

3

 

-

 

14,812

 

-

 

14,815

 

 

 

Foreclosed assets

 

-

 

-

 

59,304

 

-

 

59,304

Net cash provided by (used in) investing activities

 

74,726

 

3,043

 

(2,471,478)

 

(78,002)

 

(2,471,711)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in:

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

-

 

-

 

2,281,355

 

67,140

 

2,348,495

 

 

 

Assets sold under agreements to repurchase

 

-

 

-

 

(48,439)

 

-

 

(48,439)

 

 

 

Other short-term borrowings

 

-

 

-

 

159,959

 

-

 

159,959

 

Payments of notes payable

 

-

 

-

 

(99,758)

 

-

 

(99,758)

 

Principal payments of finance leases

 

-

 

-

 

(837)

 

-

 

(837)

 

Proceeds from issuance of notes payable

 

-

 

-

 

75,000

 

-

 

75,000

 

Proceeds from issuance of common stock

 

6,121

 

-

 

(1,471)

 

-

 

4,650

 

Dividends paid to parent company

 

-

 

-

 

(254,300)

 

254,300

 

-

 

Dividends paid

 

(55,631)

 

-

 

-

 

-

 

(55,631)

 

Net payments for repurchase of common stock

 

(250,393)

 

-

 

3

 

(20)

 

(250,410)

 

Payments related to tax withholding for share-based compensation

 

(4,077)

 

-

 

(152)

 

-

 

(4,229)

Net cash (used in) provided by financing activities

 

(303,980)

 

-

 

2,111,360

 

321,420

 

2,128,800

Net decrease in cash and due from banks, and restricted cash

 

10,728

 

-

 

(3,394)

 

(10,903)

 

(3,569)

Cash and due from banks, and restricted cash at beginning of period

 

68,278

 

-

 

402,995

 

(68,022)

 

403,251

Cash and due from banks, and restricted cash at end of period

$

79,006

$

-

$

399,601

$

(78,925)

$

399,682

Condensed Consolidating Statement of Cash Flows (Unaudited)

 

 

 

 

 

 

Six months ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

All other

 

 

 

 

 

 

 

 

 

 

Popular, Inc.

 

PNA

 

subsidiaries

 

Elimination

 

Popular, Inc.

(In thousands)

 

Holding Co.

 

Holding Co.

 

and eliminations

 

entries

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net income

$

371,107

$

20,142

$

393,416

$

(413,558)

$

371,107

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

Equity in earnings of subsidiaries, net of dividends or distributions

 

(37,545)

 

(26,050)

 

-

 

63,595

 

-

 

Dividends receivable from subsidiaries

 

(300,000)

 

-

 

-

 

300,000

 

-

 

Provision (reversal) for loan losses

 

(41)

 

-

 

131,158

 

-

 

131,117

 

Amortization of intangibles

 

-

 

-

 

4,649

 

-

 

4,649

 

Depreciation and amortization of premises and equipment

 

360

 

-

 

25,215

 

-

 

25,575

 

Net accretion of discounts and amortization of premiums and deferred fees

 

1,043

 

14

 

(16,303)

 

-

 

(15,246)

 

Share-based compensation

 

3,711

 

-

 

1,734

 

-

 

5,445

 

Impairment losses on long-lived assets

 

-

 

-

 

272

 

-

 

272

 

Fair value adjustments on mortgage servicing rights

 

-

 

-

 

8,929

 

-

 

8,929

 

FDIC loss-share income

 

-

 

-

 

(94,725)

 

-

 

(94,725)

 

Adjustments to indemnity reserves on loans sold

 

-

 

-

 

3,453

 

-

 

3,453

 

Earnings from investments under the equity method, net of dividends or distributions

 

(7,497)

 

(396)

 

2,493

 

-

 

(5,400)

 

Deferred income tax benefit

 

-

 

(933)

 

(140,176)

 

43

 

(141,066)

 

(Gain) loss on:

 

 

 

 

 

 

 

 

 

 

 

 

 

Disposition of premises and equipment and other productive assets

 

(5)

 

-

 

(675)

 

-

 

(680)

 

 

 

Sale of loans, including valuation adjustments on loans held for sale and mortgage banking activities

 

-

 

-

 

(3,602)

 

-

 

(3,602)

 

 

 

Sale of foreclosed assets, including write-downs

 

-

 

-

 

566

 

-

 

566

 

Acquisitions of loans held-for-sale

 

-

 

-

 

(112,687)

 

-

 

(112,687)

 

Proceeds from sale of loans held-for-sale

 

-

 

-

 

29,519

 

-

 

29,519

 

Net originations on loans held-for-sale

 

-

 

-

 

(112,975)

 

-

 

(112,975)

 

Net decrease (increase) in:

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading debt securities

 

-

 

-

 

219,005

 

(101)

 

218,904

 

 

 

Equity securities

 

(739)

 

-

 

(385)

 

-

 

(1,124)

 

 

 

Accrued income receivable

 

(187)

 

-

 

48,250

 

189

 

48,252

 

 

 

Other assets

 

(847)

 

44

 

189,494

 

849

 

189,540

 

Net increase (decrease) in:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest payable

 

-

 

25

 

214

 

(189)

 

50

 

 

 

Pension and other postretirement benefits obligations

 

-

 

-

 

2,363

 

-

 

2,363

 

 

 

Other liabilities

 

(2,082)

 

1,006

 

(179,060)

 

(958)

 

(181,094)

Total adjustments

 

(343,829)

 

(26,290)

 

6,726

 

363,428

 

35

Net cash provided by (used in) operating activities

 

27,278

 

(6,148)

 

400,142

 

(50,130)

 

371,142

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Net decrease (increase) in money market investments

 

35,000

 

888

 

(3,371,774)

 

(35,888)

 

(3,371,774)

 

Purchases of investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

-

 

-

 

(2,767,257)

 

-

 

(2,767,257)

 

 

 

Equity

 

-

 

-

 

(11,309)

 

133

 

(11,176)

 

Proceeds from calls, paydowns, maturities and redemptions of investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

-

 

-

 

2,291,230

 

-

 

2,291,230

 

 

 

Held-to-maturity

 

-

 

-

 

3,030

 

-

 

3,030

 

Proceeds from sale of investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

-

 

-

 

18,387

 

-

 

18,387

 

Net (disbursements) repayments on loans

 

(4,040)

 

-

 

61,629

 

4,301

 

61,890

 

Acquisition of loan portfolios

 

-

 

-

 

(326,503)

 

-

 

(326,503)

 

Net payments (to) from FDIC under loss-sharing agreements

 

-

 

-

 

(25,012)

 

-

 

(25,012)

 

Return of capital from equity method investments

 

-

 

497

 

1,022

 

-

 

1,519

 

Capital contribution to subsidiary

 

(10,000)

 

-

 

-

 

10,000

 

-

 

Return of capital from wholly-owned subsidiaries

 

13,000

 

-

 

-

 

(13,000)

 

-

 

Acquisition of premises and equipment

 

(405)

 

-

 

(31,285)

 

-

 

(31,690)

 

Proceeds from insurance claims

 

-

 

-

 

720

 

-

 

720

 

Proceeds from sale of:

 

 

 

 

 

 

 

 

 

 

 

 

 

Premises and equipment and other productive assets

 

9

 

-

 

5,213

 

-

 

5,222

 

 

 

Foreclosed assets

 

-

 

-

 

59,497

 

-

 

59,497

Net cash provided by (used in) investing activities

 

33,564

 

1,385

 

(4,092,412)

 

(34,454)

 

(4,091,917)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in:

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

-

 

-

 

3,899,404

 

21,629

 

3,921,033

 

 

 

Assets sold under agreements to repurchase

 

-

 

-

 

(84,010)

 

-

 

(84,010)

 

 

 

Other short-term borrowings

 

-

 

4,301

 

(95,008)

 

(4,301)

 

(95,008)

 

Payments of notes payable

 

-

 

-

 

(115,749)

 

-

 

(115,749)

 

Proceeds from issuance of notes payable

 

-

 

-

 

140,000

 

-

 

140,000

 

Proceeds from issuance of common stock

 

9,007

 

-

 

(189)

 

-

 

8,818

 

Dividends paid to parent company

 

-

 

-

 

(50,000)

 

50,000

 

-

 

Dividends paid

 

(52,617)

 

-

 

-

 

-

 

(52,617)

 

Net payments for repurchase of common stock

 

(267)

 

-

 

-

 

(3)

 

(270)

 

Return of capital to parent company

 

-

 

-

 

(13,000)

 

13,000

 

-

 

Capital contribution from parent

 

-

 

-

 

10,000

 

(10,000)

 

-

 

Payments related to tax withholding for share-based compensation

 

(2,162)

 

-

 

-

 

-

 

(2,162)

Net cash (used in) provided by financing activities

 

(46,039)

 

4,301

 

3,691,448

 

70,325

 

3,720,035

Net increase (decrease) in cash and due from banks, and restricted cash

 

14,803

 

(462)

 

(822)

 

(14,259)

 

(740)

Cash and due from banks, and restricted cash at beginning of period

 

48,120

 

462

 

412,225

 

(48,178)

 

412,629

Cash and due from banks, and restricted cash at end of period

$

62,923

$

-

$

411,403

$

(62,437)

$

411,889