9. Popular, Inc.
of Hato Rey, Puerto Rico, closed at $14.27 Monday, returning 29% year-to-date, after dropping 56% last year.
The shares trade for just under half their June 30 tangible book value, and for six times the consensus 2013 earnings EPS of $2.40. The consensus 2012 EPS estimate is $2.06.
For the 12-month period ended June 30, Popular's ROA was 0.39%, while the company's ROE was 3.65%.
The company owes $935 million in bailout funds received in December 2008 through the Troubled Assets Relief Program, or TARP.
Popular reported second-quarter net income applicable to common stock of $64.8 million, increasing from $47.5 million in the first quarter, but declining from $109.8 million during the second quarter of 2011.
The main factor in the sequential improvement and year-over-year decline in earnings was Federal Deposit Insurance Corporation loss-share coverage of assets acquired from the failed Westernbank Puerto Rico in April 2010. Popular reported $2.3 million in loss-share income for the first quarter, compared to loss-sharing expenses of $15.3 million in the previous quarter, and loss-share income of $38.7 million a year earlier.
The company's provision for loan losses on loan balances not covered by loss-sharing agreements declined to $81.7 million in the second quarter, from $82.5 million in the first quarter, and $95.7 million in the second quarter of 2011.
Morgan Stanley analyst Ken Zerbe rates Popular "Overweight," and said in July that the company's "core EPS of $0.32 was surprisingly close to our expectations of $0.33 (although reported results, as usual, were rather messy)," and said that a key point for the second quarter was "better credit experience, including lower [nonperforming assets] NPAs and a provision [for loan losses] expense that was much less than expected."
Zerbe said that "credit is the one issue that really matters for BPOP."
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