Popular reports $1.4M net loss in 4Q16
Popular Inc. reported a net loss of $4.1 million for the quarter ended Dec. 31, 2016, compared to net income of $46.8 million for the quarter ended Sept. 30, 2016.
The results for the fourth quarter of 2016 reflect an after-tax charge amounting to $87 million, related to the unfavorable award under the portfolio sales arbitration with the Federal Deposit Insurance Corp, the bank stated Tuesday.
“Despite the impact of the adverse FDIC arbitrations, during 2016 we demonstrated the strength of our franchise by generating strong revenues and improving credit quality,” said Popular Inc. Chairman Richard Carrión.
“We also continued to achieve strong loan growth in our U.S. business. As we announced today, we are pleased that the progress made during 2016 allowed us to increase our quarterly common stock dividend from $0.15 to $0.25 and establish a $75 million common stock repurchase program,” he said.
The company’s Board of Directors approved a quarterly cash dividend of $0.25 per share for the second quarter of 2017 on its outstanding common stock. The dividend will be payable on April 3, 2017 to shareholders of record at the close of business on Mar. 17, 2017. Future quarterly dividends will be subject to the Board of Directors’ approval at the customary times those dividends are declared, the bank said.
As previously announced and as reported by this media outlet, BPPR has filed statements of claim requesting that a review board determine certain matters relating to the loss-share claims under its commercial loss share agreement with the FDIC, as receiver for the defunct Westernbank, including with respect to the FDIC’s refusal to concur in certain of BPPR’s portfolio sales under the commercial loss share agreement, for which BPPR was seeking damages in the amount of $88.5 million plus interest.
On Dec. 12, 2016, the review board in the arbitration issued an award denying BPPR’s claim. As a result, for the quarter ending Dec. 31, 2016, the corporation recognized a pre-tax charge of $116.8 million in connection with unreimbursed losses considered in the arbitration, the related adjustment to the true-up obligation owed to the FDIC at the end of the loss-share agreements in 2020 and recoveries previously incorporated in the net damages claimed in the arbitration.