Popular submits application to repay $935M TARP funds
Popular Inc., parent company of Banco Popular de Puerto Rico, has filed its application to repay the $935 million it owes the U.S. government through the Troubled Asset Relief Program, bank CEO Richard Carrión said Wednesday upon discussing third quarter financial results.
“While we are hopeful our application will be approved, we cannot speculate on the timing or the conditionality, if any, of an approval,” Carrión said during an earnings call. Approval would have to come from the Federal Reserve, which regulates the bank.
“As our ongoing dialogue with our regulator is confidential, we are also not in a position to expand on the details of our application or the specific funding plan for our repayment at this time. We are, nevertheless, confident that we are closer to a resolution of our TARP participation in a manner that will be positive for our shareholders,” he added.
Popular Inc. took part in the federal government’s bailout program in December 2008, when Puerto Rico was navigating through the second year of a recession that is still ongoing.
But now, the bank is seeing positive results in several key areas that have elevated profits, including its sale of a portion of its stake in EVERTEC, which resulted in an after-tax gain of $167.8 million for Popular.
On Wednesday, Popular Inc. reported net income of $229.1 million for the quarter ended Sept. 30, net interest margin of 4.49 percent in the third quarter, vs. 4.46 percent in the same year-ago quarter, and adjusted net income of $61.3 million,
“We continue to generate strong revenues from our core businesses with a net interest margin and capital levels above peer averages. Credit metrics continue to improve, reaching new lows despite the sluggish environment on the island,” he said.
Still, during the call he said Popular is “more confident in the island’s fiscal outlook than we were six months ago, given recent government actions,” including pension reform and the deficit reduction.
“We recognize that in the short term, measures to improve the government’s fiscal health may decelerate the pace of Puerto Rico’s economic improvement, though we continue to believe they are positive reforms for the long-term strength of the economy,” he said.
“While we have operated in a weak economy for most of the past seven years, the strong revenues generated by our Puerto Rico banks have produced positive earnings in each of those years,” Carrión said.
To review Popular’s full quarterly report, please click here.