SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 8, 1999
Date of Amendment: July 15, 1999
POPULAR, INC.
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(Exact name of registrant as specified in its charter)
COMMONWEALTH OF PUERTO RICO NO. 0-13818 NO. 66-0416582
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (787) 765-9800
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On July 8, 1999, Popular, Inc. (the "Corporation") announced in a news
release its operational results for the quarter and six-month period ended June
30, 1999. A copy of the Corporation's release was filed on Form 8-K on July 9,
1999. This copy contained certain typographical errors made by the Corporation's
external legal counsel who provided the EDGAR service for this filing.
Accordingly, a corrected copy of the news release is attached hereto as Exhibit
99(a) and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99(a) Corrected news release, dated July 8, 1999, announcing the
Corporation's consolidated earnings for the quarter and six-month period ended
June 30, 1999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Popular, Inc.
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(Registrant)
Date: July 15, 1999 By: /s/ Amilcar L. Jordan
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Name: Amilcar L. Jordan, Esq.
Title: Senior Vice President and Comptroller
<PAGE>
Exhibit Index
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Exhibit Number Description
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99(a) News release, dated July 8, 1999
[POPULAR, INC. LOGO]
For additional information contact:
Mr. Jorge A. Junquera
Senior Executive Vice President
Or visit our web site at http://www.popularinc.com
Telephone (787) 754-1685
July 8, 1999 News Release
POPULAR, INC. EARNINGS FOR THE QUARTER AND SIX-MONTH PERIOD ENDED JUNE 30,1999
Popular, Inc. (the Corporation) announced net income of $64.0 million for
the second quarter of 1999, an increase of $6.5 million or 11.3% over the $57.5
million reported for the second quarter of 1998. Earnings per common share (EPS)
for the quarter were $0.46, a 12.2% increase over the $0.41 reported for the
same period a year earlier. Average shares outstanding used in the above
computations were 135,496,891 for the second quarter of 1999 and 135,497,786 for
the same quarter of 1998. Net earnings for the first quarter of 1999 were $63.7
million, or $0.45 per common share, based on 135,709,287 average shares then
outstanding.
The Corporation's return on assets (ROA) and return on common equity (ROE)
for the second quarter of 1999 were 1.08% and 15.53%, respectively, compared
with 1.16% and 15.50% for the same period in 1998 and 1.14% and 16.03% for the
first quarter of 1999.
For the first six months of 1999, the Corporation's net earnings reached
$127.6 million, compared with $112.3 million for the same period in 1998. EPS
for the first six months of 1999 were $0.91 compared with $0.80 for the same
period of 1998. ROA and ROE for the first six months of 1999 were 1.11% and
15.78%, respectively. For the same period of 1998, these ratios were 1.15% and
15.43%.
The Corporation's results of operations for the quarter ended June 30,
1999, when compared with the same quarter of 1998, reflected an increase of
$24.5 million in net interest income coupled with an increase of $14.0 million
in other revenues. These improvements were partially offset by rises of $3.1
million in the provision for loan losses and $30.2 million in operating
expenses.
Net interest income for the second quarter of 1999 amounted to $238.9
million, an increase
<PAGE>
2 - POPULAR, INC. 1999 SECOND QUARTER RESULTS
of 11.4% over the same period in 1998. The growth in net interest income over
the second quarter of 1998, was primarily due to an increase of $3.8 billion in
average earning assets driven principally by a $2.1 billion increase in the loan
portfolio together with an increase of $1.7 billion in investment and money
market securities. The acquisitions made after the second quarter of 1998, the
Corporation's growth and a higher volume of arbitrage activities in the
investment portfolio accounted for the increase in average earning assets. The
net interest yield for the quarter ended June 30, 1999 was 4.24%, compared with
4.57% for the second quarter of 1998. For the first quarter of 1999 the net
interest yield was 4.39%. For the first six months of 1999, the net interest
yield was 4.31%, compared with 4.61% for the same period of 1998.
The provision for loan losses for the second quarter of 1999 amounted to
$36.6 million compared with $33.5 million for the second quarter of 1998. The
increase resulted from the growth in the loan portfolio, non-performing assets
and net charge-offs. Net charge-offs for the quarter ended June 30, 1999, were
$31.2 million or 0.91% of average loans compared with $27.2 million or 0.94% for
the second quarter of 1998, and $25.9 million or 0.78% for the first quarter of
1999. As a percentage of average loans, net charge-offs were 0.85% and 0.95% for
the six-month periods ended on June 30, 1999 and 1998, respectively. The
increase in net charge-offs for the quarter was primarily reflected in the
commercial loan category. Non-performing assets were $311 million or 2.24% of
loans at June 30, 1999, compared with $225 million or 1.91%, at the end of the
second quarter of 1998, and $299 million or 2.22% at March 31, 1999. The rise in
non-performing assets from June 30, 1998 was reflected in non-performing
commercial, mortgage and consumer loans.
Non-interest income, excluding securities and trading gains, grew $18.7
million or 27.3%, from $68.5 million for the second quarter of 1998 to $87.2
million for the same period in 1999. The growth in non-interest income was led
by an increase of $10.9 million in other service fees, $4.2 million in service
charges on deposit accounts, and $3.6 million in other operating income. Other
service fees amounted to $39.7 million for the three-month period ended June 30,
1999, compared with $28.8 million for the same period a year earlier. This
increase is mostly attributed to the expansion of the Corporation's operations
in the U.S. due to the acquisitions made during the latter part of 1998, and the
growth of the retail financial services business. Check cashing fees and credit
card fees and discounts increased $3.4 million each. Also, fees related to the
sale and administration
<PAGE>
3 - POPULAR, INC. 1999 SECOND QUARTER RESULTS
of investment products and debit card fees showed increases when compared to the
second quarter last year. Service charges on deposit accounts increased due to
higher activity on commercial and retail accounts and a higher volume of
deposits. The increase in other operating income is mainly due to higher gains
on sale of mortgage loans, increased revenues from the daily rental business and
fees generated from the Corporation's joint venture in Puerto Rico's local
telephone company.
Personnel costs increased $12.0 million as compared with the second
quarter of 1998. Most of the increase resulted from increased employment levels
due to the Corporation's continued growth and expansion, outside Puerto Rico,
and annual merit increases.
Other operating expenses increased $18.2 million, reaching $110.6 million
for the second quarter of 1999. This increase was mostly reflected in
professional fees, business promotion, equipment expenses and net occupancy
expenses. Professional fees reflected higher consulting fees, technical support
fees and conversion costs related to business expansion and reorganization of
the U.S. operations. The increase in business promotion is mainly due to
aggressive marketing efforts to expand the mortgage banking business in Puerto
Rico and to penetrate the Hispanic market in the U.S. The increase in equipment
expenses resulted from the Corporation's business and geographic expansion and
expenditures associated with new technology and systems enhancements. Net
occupancy expenses also reflected the Corporation's growth and expansion.
The Corporations total assets at June 30, 1999, amounted to $23.7 billion,
compared with $20.0 billion at June 30, 1998. Total assets at March 31, 1999,
were $23.2 billion. The Corporation's earning assets reached $22.1 billion at
June 30, 1999, compared with $18.7 billion and $21.6 billion at June 30, 1998
and March 31, 1999, respectively.
Total loans were $13.9 billion at June 30, 1999 or $2.1 billion more than
the level at June 30, 1998 and $429 million over March 31, 1999. Commercial
loans accounted for the largest growth since June 30, 1998, increasing $1.4
billion. The growth mostly resulted from the acquisitions made after the second
quarter of 1998, the Corporation's expansion in the U.S. and marketing efforts
directed to the retail and middle market.
The allowance for loan losses at June 30, 1999, amounted to $283 million
or 2.03% of loans compared with $224 million or 1.91% at June 30, 1998, and $277
million or 2.06% at March 31, 1999. At June 30, 1999, the allowance for loan
losses as a percentage of non-performing assets was
<PAGE>
4 - POPULAR, INC. 1999 SECOND QUARTER RESULTS
90.8% compared with 99.8% at June 30, 1998 and 92.8% at March 31, 1999. The
reduction in the allowance coverage ratios is attributed to the inclusion of $34
million of non-performing assets of the subsidiary bank acquired in the
Dominican Republic and the increase in non-performing mortgage loans, which due
to their secured nature have a low loss experience.
Total deposits grew to $13.9 billion at June 30, 1999, from $12.1 billion
at June 30, 1998. Most of the growth was realized in savings and demand
deposits, which increased $784 million and $706 million, respectively. At March
31, 1999, total deposits amounted to $13.6 billion.
Borrowed funds, including subordinated notes and capital securities,
amounted to $7.7 billion at June 30, 1999 compared with $6.0 billion at June 30,
1998, and $7.4 billion at March 31, 1999.
At June 30, 1999, stockholders' equity totaled $1.65 billion compared with
$1.59 billion at the same date last year. Stockholders' equity was $1.70 billion
at March 31, 1999.
During the second quarter of 1999, the Corporation repurchased a total of
1,089,700 shares of its common stock under the stock repurchase program
approved by its Board of Directors on May 8, 1997. The Corporation may continue
repurchasing its common stock if market conditions so warrant.
The market value of the Corporation's common stock at June 30, 1999 was
$30.31 per share, compared with $33.25 at June 30, 1998 and $30.88 at March 31,
1999. The Corporation's market capitalization at June 30, 1999, was $4.1
billion, compared with $4.5 billion at June 30, 1998, and $4.2 billion at March
31, 1999. At June 30, 1999, the Corporation's common stock had a book value per
share of $11.51.
The Corporation's common and preferred stocks are traded on the National
Association of Securities Dealers Automated Quotation (NASDAQ) National Market
System under the symbols BPOP and BPOPP, respectively.
* * *
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<TABLE>
<CAPTION>
POPULAR, INC.
FINANCIAL SUMMARY
(in thousands, except per share data)
Quarter ended
June 30 Second
------------------------------ Quarter -------------
1999 - 1998 First
Percent Quarter
1999 1998 Variance 1999
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SUMMARY OF OPERATIONS
<S> <C> <C> <C> <C>
Interest income ................... $453,401 $402,865 12.54% $444,195
Interest expense .................. 214,550 188,473 13.84 207,956
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Net interest income ............... 238,851 214,392 11.41 236,239
Provision for loan losses ......... 36,631 33,524 9.27 35,771
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Net interest income after provision
for loan losses 202,220 180,868 11.81 200,468
Other operating income ............ 87,222 68,526 27.28 86,889
Gain on sale of securities ........ 286 3,049 450
Trading account profit (loss) ..... (582) 1,311 (282)
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Total other income ................ 86,926 72,886 19.26 87,057
Salaries and benefits ............. 88,556 76,393 15.92 89,716
Profit sharing .................... 6,084 6,264 (2.87) 6,320
Amortization of intangibles ....... 7,586 6,849 7,620
Other operating expenses .......... 102,991 85,539 20.40 98,235
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Total operating expenses .......... 205,217 175,045 17.24 201,891
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Income before income tax and
minority interest ................. 83,929 78,709 6.63 85,634
Income tax ........................ 20,334 21,248 -4.30 22,402
Net losses of minority interest ... 382 432
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Net income ........................ $63,977 $57,461 11.34 $63,664
=============================================================
Net income applicable to common
stock ............................. $61,889 $55,374 11.77 $61,577
=============================================================
Earnings per common share:
Net income ........................ $0.46 $0.41 12.20 $0.45
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Average common shares outstanding . 135,496,891 135,497,786 135,709,287
Common shares outstanding at end
of period ......................... 134,698,572 135,497,786 135,709,287
SELECTED AVERAGE BALANCES
Total assets ...................... $23,655,275 $19,934,644 18.66 $22,695,779
Loans ............................. 13,691,097 11,615,054 17.87 13,211,405
Earning assets .................... 22,525,626 18,769,875 20.01 21,542,123
Deposits .......................... 13,816,195 12,196,131 13.28 13,578,244
Interest-bearing liabilities ...... 18,391,158 15,488,018 18.74 17,607,155
Stockholders' equity .............. 1,698,197 1,533,035 10.77 1,659,015
SELECTED FINANCIAL DATA AT
PERIOD-END
Total assets ...................... $23,678,625 $19,997,636 18.41 $23,174,075
Loans ............................. 13,887,392 11,753,213 18.16 13,458,245
Earnings assets ................... 22,119,958 18,725,774 18.13 21,626,534
Deposits .......................... 13,915,390 12,102,594 14.98 13,576,672
Interest-bearing liabilities ...... 18,304,858 15,467,420 18.34 18,058,536
Stockholders' equity .............. 1,650,682 1,593,693 3.58 1,704,482
PERFORMANCE RATIOS
Net interest yield* ............... 4.24% 4.57% 4.39%
Return on assets .................. 1.08 1.16 1.14
Return on common equity ........... 15.53 15.50 16.03
<PAGE>
CREDIT QUALITY DATA
Nonperforming assets .............. $311,331 $224,521 38.66 $298,589
Net loans charged-off ............. 31,157 27,187 14.60 25,904
Allowance for loan losses ......... 282,590 224,045 26.13 277,116
Non performing assets to total
assets ............................ 1.31% 1.12% 1.29%
Allowance for losses to loans ..... 2.03 1.91 2.06
<FN>
* Not on a taxable equivalent basis
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
POPULAR, INC.
FINANCIAL SUMMARY
(in thousands, except per share data) (continued . . .)
For the six month ended
June 30
---------------------------------------------------
Percent
1999 1998 Variance
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SUMMARY OF OPERATIONS
<S> <C> <C> <C>
Interest income ................... $897,596 $799,232 12.31%
Interest expense .................. 422,506 372,136 13.54
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Net interest income ............... 475,090 427,096 11.24
Provision for loan losses ......... 72,402 67,089 7.92
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Net interest income after provision
for loan losses 402,688 360,007 11.86
Other operating income ............ 174,111 134,939 29.03
Gain on sale of securities ........ 736 3,917
Trading account profit (loss) ..... (864) 1,981
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Total other income ................ 173,983 140,837 23.54
Salaries and benefits ............. 178,272 154,104 15.68
Profit sharing .................... 12,404 11,947 3.83
Amortization of intangibles ....... 15,206 13,633
Other operating expenses .......... 201,226 167,740 19.96
---------------------------------------------------
Total operating expenses .......... 407,108 347,424 17.18
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Income before income tax and
minority interest ................. 169,563 153,420 10.52
Income tax ........................ 42,736 41,164 3.82
Net losses of minority interest ... 814
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Net income ........................ $127,641 $112,256 13.71
===================================================
Net income applicable to common
stock ............................. $123,466 $108,081 14.23
===================================================
Earnings per common share:
Net income ........................ $0.91 $0.80 13.75
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Average common shares outstanding . 135,602,502 135,466,614
Common shares outstanding at end
of period ......................... 134,698,572 135,497,786
SELECTED AVERAGE BALANCES
Total assets ...................... $23,178,177 $19,711,518 17.59
Loans ............................. 13,452,576 11,541,256 16.56
Earning assets .................... 22,036,591 18,556,618 18.75
Deposits .......................... 13,697,877 12,001,807 14.13
Interest-bearing liabilities ...... 18,001,322 15,336,151 17.38
Stockholders' equity .............. 1,678,159 1,512,723 10.94
SELECTED FINANCIAL DATA AT
PERIOD-END
Total assets ...................... $23,678,625 $19,997,636 18.41
Loans ............................. 13,887,392 11,753,213 18.16
Earnings assets ................... 22,119,958 18,725,774 18.13
Deposits .......................... 13,915,390 12,102,594 14.98
Interest-bearing liabilities ...... 18,304,858 15,467,420 18.34
Stockholders' equity .............. 1,650,682 1,593,693 3.58
PERFORMANCE RATIOS
Net interest yield* ............... 4.31% 4.61%
Return on assets .................. 1.11 1.15
Return on common equity ........... 15.78 15.43
<PAGE>
CREDIT QUALITY DATA
Nonperforming assets .............. $311,331 $224,521
Net loans charged-off ............. 57,061 54,695
Allowance for loan losses ......... 282,590 224,045
Non performing assets to total
assets ............................ 1.31% 1.12%
Allowance for losses to loans ..... 2.03 1.91
<FN>
* Not on a taxable equivalent basis
</FN>
</TABLE>
