Popular Inc. reported a net income of $140.6 million for the third quarter ended Sept. 30, 2018, compared to a net income of $279.8 million and an adjusted net income of $121.3 million for the second quarter ended June 30, 2018.
“We delivered solid results for the quarter, as we continued to build on the positive momentum created during the first half of the year,” said Popular Inc. CEO Ignacio Álvarez.
Popular Inc. had a busy third quarter, with the closing of its acquisition of Wells Fargo’s auto finance business in Puerto Rico, known as Reliable Auto. Subsidiary Popular Auto acquired approximately $1.6 billion in retail auto loans and $341 million in primarily auto-related commercial loans.
Wells Fargo retained approximately $398 million in retail auto loans as part of the transaction and has entered into a loan servicing agreement with Popular Auto with respect to such loans.
“For the quarter, Reliable contributed approximately $12 million of net income,” Álvarez said during a call with analysts to discuss the results. “We’re happy to have brought onboard a seasoned and talented team as part of this transaction. The transition has been smooth, and we are excited about the prospects of our combined auto business.”
Also during the quarter, Popular Inc. entered into a $125 million accelerated share repurchase transaction and, in connection, received an initial delivery of 2,000,000 shares, which was accounted for as a treasury stock transaction. Meanwhile, on Sept. 7, 2018, Popular North America Inc., a wholly-owned subsidiary of the corporation, completed the redemption of all outstanding 8.327 percent Capital Securities, Series A issued by BanPonce Trust I.
Popular Inc. also issued $300 million aggregate principal amount of 6.125 percent Senior Notes due 2023 in an underwritten public offering pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission.
During the call, Álvarez also discussed the status of its operation in Puerto Rico, a year after Hurricane María.
“While saddened by the loss of lives and massive property damage that affected so many people, we’re extremely proud of how we have recovered despite these many obstacles,” he said.
“In addition to strong financial results, we have accomplished important milestones, such as the termination of our loss share agreement, the acquisition of Reliable and the execution of several important capital actions,” said Álvarez.
“Our franchise in Puerto Rico is in a unique position to take advantage of opportunities that we are seeing as well as to effectively manage challenges that inevitably will arise. Our growth initiatives in the United States have good traction, and we expect to see further progress,” he added.