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Popular, Inc. Announces Fourth Quarter Financial Results

Stocks in this article: BPOP

Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $163.0 million for the quarter ended December 31, 2013, compared to net income of $229.1 million for the quarter ended September 30, 2013.

Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: “The earnings for the fourth quarter demonstrate how the strength of our franchise continues to produce positive results even in a challenging operating environment. Over the last few years, we have executed a number of strategic initiatives that have improved our operational and financial metrics and will position us to further increase profitability once the economy in Puerto Rico begins to improve.”

Earnings Highlights                      
(Unaudited)
    Quarters ended     Years ended
(Dollars in thousands, except per share information)   31-Dec-13   30-Sep-13   31-Dec-12     31-Dec-13   31-Dec-12
Net interest income $ 376,342 $ 354,206 $ 351,417 $ 1,432,580 $ 1,376,633
Provision for loan losses – non-covered loans 47,729 55,230 86,256 533,167 334,102
Provision (reversal) for loan losses – covered loans [1]   8,907   17,433   (3,445)     69,396   74,839
Net interest income after provision for loan losses 319,706 281,543 268,606 830,017 967,692
FDIC loss share expense (37,164) (14,866) (36,824) (82,051) (56,211)
Other non-interest income 228,354 306,825 187,304 892,620 587,423
Operating expenses   322,703   326,599   315,232     1,292,586   1,280,032
Income before income tax 188,193 246,903 103,854 348,000 218,872
Income tax expense (benefit)   25,162   17,768   19,914     (251,327)   (26,403)
Net income   $ 163,031   $ 229,135   $ 83,940     $ 599,327   $ 245,275
Net income applicable to common stock   $ 162,100   $ 228,204   $ 83,009     $ 595,604   $ 241,552
Net income per common share - basic   $ 1.58   $ 2.22   $ 0.81       $ 5.80   $ 2.36
Net income per common share - diluted   $ 1.57   $ 2.22   $ 0.81       $ 5.78   $ 2.35
 
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.

Recent significant events

  • On December 13, 2013, the Corporation completed the sale of 5,800,000 shares of common stock of EVERTEC, resulting in an after-tax gain of $99.4 million. The shares were sold to the public as part of an underwritten public offering of 15,233,273 shares of EVERTEC’s common stock at a price of $20.60 per share. The selling stockholders included an affiliate of Apollo Global Management, LLC (“Apollo”), Popular, Inc., and certain officers and employees of EVERTEC. Apollo sold 9,205,743 shares of EVERTEC, with the offering. Following the sale, Popular retained a stake of 14.9% in EVERTEC.

As part of the transaction, EVERTEC repurchased from the underwriters 3,690,036 shares of its common stock being sold by the selling stockholders in the offering, resulting in a reduction in its capital of approximately $75.0 million. Popular’s share of approximately $11.0 million was reflected as a reduction in its investment in EVERTEC.

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