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Popular, Inc. Reports Net Income Of $83.9 Million For The Fourth Quarter And $245.3 Million For The Year Ended December 31, 2012

Stocks in this article: BPOP

Popular, Inc. (“the Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $83.9 million for the quarter ended December 31, 2012, compared with net income of $47.2 million for the quarter ended September 30, 2012.

Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: “Our fourth quarter results reflect the strength of our core businesses and market positions, significant further declines in non-performing loans and increases in our already strong capital ratios. In 2013, we remain focused on driving value through further progress on all these fronts and continuing to increase our strategic and financial flexibility.”

Significant events for the quarter ended December 31, 2012

  • During the month of December 2012, the Corporation received a $24.2 million cash dividend from its investment in EVERTEC’s parent company. Also, the Corporation recorded pre-tax income of approximately $31.6 million related to its proportionate share of a tax benefit from a tax grant received by EVERTEC from the Puerto Rico Government. The Corporation’s equity investment balance in the entity stands at $73.9 million as of year-end. The Corporation’s participation interest in the entity was 48.5% as of December 31, 2012.
Earnings Highlights              
    Quarters ended Years ended
(Dollars in thousands, except per share information)   31-Dec-12   30-Sep-12   31-Dec-11 31-Dec-12   31-Dec-11
Net interest income $ 350,411 $ 343,426 $ 344,780 $ 1,372,619 $ 1,431,992
Provision for loan losses – non-covered loans 86,256 83,589 123,908 334,102 430,085
Provision for loan losses – covered loans [1]   (3,445)   22,619   55,900 74,839   145,635
Net interest income after provision for loan losses 267,600 237,218 164,972 963,678 856,272
FDIC loss share (expense) income (36,824) (6,707) 17,447 (56,211) 66,791
Other non-interest income 169,825 122,416 131,912 522,553 493,486
Operating expenses   296,747   290,355   311,093 1,211,148   1,150,297
Income before income tax 103,854 62,572 3,238 218,872 266,252
Income tax expense (benefit)   19,914   15,384   263 (26,403)   114,927
Net income   $ 83,940   $ 47,188   $ 2,975 $ 245,275   $ 151,325
Net income applicable to common stock   $ 83,009   $ 46,257   $ 2,044 $ 241,552   $ 147,602
Net income per common share - basic and diluted [2]   $ 0.81   $ 0.45   $ 0.02 $ 2.35   $ 1.44
 
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.
 
[2] Per share data has been adjusted to retroactively reflect the 1-for-10 reverse stock split effected on May 29, 2012.

Financial Impact of FDIC-Assisted Transaction
 
      Quarters ended   Years ended
(In thousands)   31-Dec-12   30-Sep-12   31-Dec-11 31-Dec-12   31-Dec-11
         

Income Statement

Interest income on covered loans $ 76,998 $ 70,584 $ 88,424 $ 301,441 $ 412,678
Total FDIC loss share (expense) income (36,824) (6,707) 17,447 (56,211) 66,791
Other non-interest income 281 310 1,092 1,211 12,810
Provision for loan losses   (3,445)   22,619   55,900 74,839   145,635
Total revenues less provision for loan losses   $ 43,900   $ 41,568   $ 51,063 $ 171,602   $ 346,644
 

Balance Sheet

Loans covered under loss-sharing agreements with FDIC $ 3,755,972 $ 3,903,867 $ 4,348,703
FDIC loss share asset 1,399,098 1,559,057 1,915,128
FDIC true-up payment obligation   111,519   103,189   98,340

See additional details on accounting for FDIC-Assisted transaction in Table O.

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