BankingFeaturedFinancial District

Popular Inc. reports $280M in 2Q18 net income; announces stock repurchase plan

Popular Inc. reported a net income of $280 million and an adjusted net income of $121.3 million for the second quarter ended June 30, 2018, compared to a net income of $91.3 million for the quarter ended March 31, 2018.

“We are very pleased with the results for the second quarter. In addition to achieving a successful termination of our shared-loss agreements with the FDIC, we produced excellent financial results,” said Popular Inc. President Ignacio Álvarez.

On May 22, 2018, Banco Popular de Puerto Rico, Popular’s Puerto Rico banking subsidiary, entered into a Termination Agreement with the Federal Deposit Insurance Corporation to end all Shared-Loss Agreements in connection with the acquisition of certain assets and assumption of certain liabilities of Westernbank Puerto Rico through an FDIC-assisted transaction in 2010.

As a result of the Termination Agreement, assets that were covered by the Shared-Loss Agreements, including covered loans in the amount of approximately $514.6 million and covered real estate owned assets in the amount of approximately $15.3 million as of March 31, 2018, were reclassified as non-covered.

As of March 31, 2018, the corporation had an FDIC Loss Share Asset in its financial statements of $44.5 million related to the covered assets.

During a call with analysts, Álvarez said positive results for the quarter have been “primarily driven by strong top line revenue growth in our Puerto Rico franchise, where the economy continues to recover from the impact of Hurricane María,” he said.

Debit and credit card activity after the storm was severely impacted by power and telecom service interruption. However, for the second quarter, the dollar volume of the bank’s clients’ transaction exceeded the second quarter 2017 by 17 percent, reflected in higher fee income, he said.

Looking ahead, Álvarez said Popular is ready to close the acquisition of Wells Fargo’s auto loan business in Puerto Rico in the third quarter, which will contribute favorably to our earnings in the second half of the year.

On February 14, 2018, Popular announced that Banco Popular agreed to acquire certain assets and liabilities related to Wells Fargo’s auto finance business in Puerto Rico. On May 31, 2018 Popular filed a notice with the Board of Governors of the Federal Reserve System so that Popular Auto, LLC, BPPR’s direct, wholly-owned subsidiary, be permitted to consummate the transaction.

On July 5, 2018, Popular announced the completion of such regulatory clearance process. Popular also announced that the parties have agreed to close the transaction on Aug. 1, 2018.

Popular announces $125M common stock repurchase plan
Right before it announced its earnings, Popular announced plans for a common stock repurchase of up to $125 million.

Common stock repurchases may be executed in the open market or in privately negotiated transactions. As for when the transaction will take place, Popular officials stated that the timing will be subject to various factors, including the company’s capital position, financial performance and market conditions.

Author Details
This story was written by our staff based on a press release.

Can we count on you?

As recent events have shown us, independent and responsible journalism is more important than ever. That’s why your support is very necessary to ensure that we will be around for a while!

We want to stay true to our mission of delivering quality journalism…for that, we count on your support. Every contribution, big or small, is greatly appreciated!

Use the PayPal button below and contribute today!


Comment here