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[POPULAR, INC. LOGO]
Exhibit 99(a)
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
October 10, 2000 News Release
POPULAR, INC. EARNINGS FOR THE QUARTER AND NINE-MONTH PERIOD ENDED SEPTEMBER 30,
2000
Popular, Inc. (the Corporation) reported net income of $71.3 million or
$0.51 earnings per common share (EPS) for the third quarter of 2000, compared
with $64.2 million or $0.46 for the same period in 1999. Net earnings for the
second quarter of 2000 were $65.1 million, or $0.46 per common share.
The Corporation's return on assets (ROA) and return on common equity
(ROE) for the third quarter of 2000 were 1.04% and 15.24%, respectively,
compared with 1.06% and 15.23% for the same period in 1999 and 1.01% and 14.43%
for the second quarter of 2000.
For the first nine months of 2000, the Corporation's net earnings
reached $200.6 million, compared with $191.9 million for the same period in
1999. EPS for the first nine months of 2000 and 1999 were $1.43 and $1.37,
respectively. ROA and ROE for the first nine months of 2000 were 1.02% and
14.75%, respectively. For the same period of 1999, these ratios were 1.09% and
15.59%.
The Corporation's results of operations for the quarter ended September
30, 2000, when compared with the same quarter of 1999, reflected an increase of
$10.1 million in net interest income together with an increase of $23.7 million
in other revenues. These improvements were partially offset by rises of $12.6
million in the provision for loan losses, $6.2 million in operating expenses and
$6.8 million in income tax.
The growth in net interest income over the third quarter of 1999 was
primarily due to an increase of $3.0 billion in average earning assets driven
principally by a $2.2 billion increase in the average loan portfolio and $829
million in money market, trading and investment securities. The increase in the
volume of earning assets was funded mainly through a higher average volume of
borrowings and interest-bearing deposits. The net interest yield for the quarter
ended September 30, 2000, was 3.90%,
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2-POPULAR, INC. 2000 THIRD QUARTER RESULTS
compared with 4.24% for the third quarter of 1999. The reduction in the net
interest yield resulted from an increase of 87 basis points in the average cost
of interest bearing liabilities, mostly as a result of a higher interest rate
scenario and a higher proportion of short-term borrowings, partially offset by
an increase of 49 basis points in the average yield on earning assets, mainly in
the commercial loans, money market and investment portfolios. For the second
quarter of 2000 the net interest yield was 4.03%. For the first nine months of
2000, the net interest yield was 4.02%, compared with 4.35% for the same period
of 1999.
The provision for loan losses for the third quarter of 2000 amounted to
$49.7 million compared with $37.1 million for the third quarter of 1999. The
increase resulted from the growth in the loan portfolio, non-performing assets
and net charge-offs. Net charge-offs for the quarter ended September 30, 2000,
were $42.5 million or 1.04% of average loans compared with $31.6 million or
0.89% for the third quarter of 1999, and $38.1 million or 0.97% for the second
quarter of 2000. The increase in net charge-offs when compared to the third
quarter of 1999 was primarily reflected in the commercial portfolio, and was
primarily due to the charge-off of a limited number of commercial loan
relationships. Non-performing assets were $344 million or 2.12% of loans at
September 30, 2000, compared with $333 million or 2.36% at September 30, 1999,
and $380 million or 2.41% at June 30, 2000. The rise in non-performing assets
from September 30, 1999, excluding the non-performing assets of Banco Fiduciario
(BF) as of that date, was mostly reflected in non-performing commercial and
mortgage loans, which grew $33 million and $20 million, respectively. The
decline in non-performing assets since June 30, 2000 was also due to the sale of
the Corporation's ownership interest in BF, which had $64.4 million in
non-performing assets at June 30, 2000. This decline was partly offset by rises
in non-performing mortgage and commercial loans.
Non-interest income, excluding securities and trading gains, grew $22.9
million or 23.5%, reaching $120.6 million for the third quarter of 2000,
compared with $97.7 million for the same period in 1999. These revenues totaled
$108.3 million in the second quarter of this year. The growth in non-interest
income was led by an increase of $13.8 million in other service fees, $6.5
million in other operating income and $2.6 million in service charges on deposit
accounts. The increase in other service fees is mostly attributed to processing
fees generated by GM Group and to a rise in debit card fees mainly as a result
of the growing volume of point-of-sale terminals and transactions. Also, credit
card fees rose principally due to late payment and cash advance fees implemented
during March in Puerto
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3-POPULAR, INC. 2000 THIRD QUARTER RESULTS
Rico. Moreover, the growth of the Corporation's retail financial services
business as well as the commission income derived from the recently created
subsidiary Popular Insurance contributed to the growth in other service fees.
Other income increased mostly as the result of the gain realized on the sale of
the credit card operations in the U.S. mainland, as well as the gain on the sale
of our ownership interest in BF. Service charges on deposit accounts increased
due to higher activity on commercial accounts, as well as the implementation of
new charges in deposit accounts.
Operating expenses for the third quarter of 2000 increased $6.2 million
or 2.9%, reaching $220.9 million for the third quarter of 2000. This increase
was mostly reflected in equipment, net occupancy and other operating expenses.
The rise in equipment expenses was mostly attributed to the expansion of the
electronic delivery capabilities through the acquisition of additional
point-of-sale terminals and automated teller machines. The increase in net
occupancy resulted mostly from the Corporation's business and geographic
expansion. Furthermore, other operating expenses grew primarily due to increases
in interchange and processing expenses on credit cards. When compared to the
second quarter of 2000, the Corporation experienced a slight increase of $1.5
million or 0.7% in operating expenses, of which $1.1 million were incurred by
the subsidiary Popular Insurance, which began operations on July 1, 2000.
The Corporation's total assets at September 30, 2000, amounted to $27.2
billion, compared with $24.3 billion at September 30, 1999. Total assets at June
30, 2000, were $26.5 billion. The Corporation's earning assets reached $25.6
billion at September 30, 2000, compared with $22.5 billion and $24.7 billion at
September 30, 1999, and June 30, 2000, respectively.
Total loans were $16.2 billion at September 30, 2000 or $2.1 billion
more than the level at September 30, 1999, and $463 million over June 30, 2000.
Commercial and mortgage loans accounted for the largest growth since September
30, 1999, increasing $817 million and $1.1 billion, respectively. These
portfolios rose $93 million and $371 million, respectively, when compared with
June 30, 2000.
The allowance for loan losses at September 30, 2000, amounted to $295
million or 1.82% of loans compared with $288 million or 2.05% at September 30,
1999, and $306 million or 1.94% at June 30, 2000. The decrease since June 30,
2000, resulted mostly from the sale of BF, which had a higher ratio of allowance
to cover potential losses. At September 30, 2000, the allowance for loan losses
as a percentage of non-performing assets was 85.8% compared with 86.6% at
September 30, 1999, and 80.3% at June 30, 2000.
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4-POPULAR, INC. 2000 THIRD QUARTER RESULTS
Total deposits grew to $14.6 billion at September 30, 2000, from $13.8
billion at September 30, 1999. Time deposits grew $809 million. At June 30,
2000, total deposits amounted to $14.5 billion. The moderate growth in deposits
since June 30, 2000, was also impacted by the sale of BF, which had $293 million
in total deposits at June 30, 2000.
Borrowed funds, including subordinated notes and capital securities,
amounted to $10.4 billion at September 30, 2000, compared with $8.4 billion at
September 30, 1999, and $9.8 billion at June 30, 2000.
At September 30, 2000, stockholders' equity totaled $1.84 billion
compared with $1.68 billion at the same date last year. These figures include
unrealized losses on securities available-for-sale, net of deferred taxes, of
$100 million as of September 30, 2000, compared with unrealized losses of $83
million as of the same date last year. Stockholders' equity was $1.74 billion at
June 30, 2000.
The market value of the Corporation's common stock at September 30,
2000, was $27.06 per share, compared with $27.75 at September 30, 1999 and
$19.06 at June 30, 2000. The Corporation's market capitalization at September
30, 2000, was $3.7 billion, compared with $3.8 billion at September 30, 1999,
and $2.6 billion at June 30, 2000. At September 30, 2000, the Corporation's
common stock had a book value per share of $12.77.
During this quarter the Corporation completed the sale of its equity
investment in Banco Fiduciario and its credit card portfolio in the U.S.
mainland. As part of a merger agreement between BF and another local financial
institution in the Dominican Republic, the Corporation sold its ownership in BF
on August 23, 2000. The Corporation retained an option that allows it to acquire
a minority interest in the merged financial institution. Furthermore, during
this quarter the Corporation sold its credit card operations in the United
States effective August 21, 2000. The agency agreement signed with the buyer,
Metris Companies, Inc., enables the Corporation to continue offering credit
cards, particularly in the Hispanic market.
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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POPULAR, INC.
FINANCIAL SUMMARY
(In thousands, except per share data)
<TABLE>
<CAPTION>
Quarter ended Third
September 30 Quarter -------------
---------------------------------- 2000-1999 Second
Percent Quarter
2000 1999 Variance 2000
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Interest income .............................. $ 561,174 $ 468,532 19.77% $ 524,774
Interest expense ............................. 312,318 229,740 35.94 278,858
------------- ------------- ------------- -------------
Net interest income .......................... 248,856 238,792 4.21 245,916
Provision for loan losses .................... 49,666 37,080 33.94 48,719
------------- ------------- ------------- -------------
Net interest income after provision
for loan losses ............................ 199,190 201,712 (1.25) 197,197
Other operating income ....................... 120,628 97,682 23.49 108,263
Gain on sale of securities ................... 147 39 276.92 329
Trading account profit (loss) ................ (50) (698) 693
------------- ------------- ------------- -------------
Total other income ........................... 120,725 97,023 24.43 109,285
Salaries and benefits ........................ 95,182 93,905 1.36 92,642
Profit sharing ............................... 5,197 5,485 (5.25) 5,569
Amortization of intangibles .................. 8,829 8,113 8.83 8,537
Other operating expenses ..................... 111,695 107,201 4.19 112,624
------------- ------------- ------------- -------------
Total operating expenses ..................... 220,903 214,704 2.89 219,372
------------- ------------- ------------- -------------
Income before income tax and minority interest 99,012 84,031 17.83 87,110
Income tax ................................... 27,662 20,887 32.44 21,684
Net (earnings) losses of minority interest ... (58) 1,066 (303)
------------- ------------- ------------- -------------
Net income ................................... $ 71,292 $ 64,210 11.03 $ 65,123
============= ============= ============= =============
Net income applicable to common stock ........ $ 69,205 $ 62,123 11.40 $ 63,036
============= ============= ============= =============
Earnings per common share:
Net income .................................. $ 0.51 $ 0.46 $ 0.46
============= ============= ============= =============
Average common shares outstanding ............ 135,971,955 135,379,215 135,878,677
Common shares outstanding at end of period ... 135,893,857 135,700,258 135,865,104
SELECTED AVERAGE BALANCES
Total assets ................................. $ 27,271,400 $ 24,115,319 13.09 $ 25,972,365
Loans ........................................ 16,309,112 14,131,607 15.41 15,681,239
Earning assets ............................... 25,553,248 22,546,498 13.34 24,337,038
Deposits ..................................... 14,769,823 13,801,855 7.01 14,421,873
Interest-bearing liabilities ................. 21,820,924 18,889,394 15.52 20,564,987
Stockholders' equity ......................... 1,906,610 1,717,865 10.99 1,857,501
SELECTED FINANCIAL DATA AT PERIOD-END
Total assets ................................. $ 27,230,263 $ 24,275,583 12.17 $ 26,451,246
Loans ........................................ 16,237,687 14,097,081 15.18 15,774,604
Earning assets ............................... 25,637,474 22,522,258 13.83 24,677,648
Deposits ..................................... 14,557,878 13,770,048 5.72 14,460,454
Interest-bearing liabilities ................. 22,003,024 19,162,322 14.82 21,212,448
Stockholders' equity ......................... 1,835,733 1,677,322 9.44 1,736,890
PERFORMANCE RATIOS
Net interest yield* .......................... 3.90% 4.24% 4.03%
Return on assets ............................. 1.04 1.06 1.01
Return on common equity ...................... 15.24 15.23 14.43
CREDIT QUALITY DATA
Non-performing assets ........................ $ 343,836 $ 333,169 3.20 $ 380,478
Net loans charged-off ........................ 42,546 31,613 34.58 38,116
Allowance for loan losses .................... 295,177 288,382 2.36 305,526
Non-performing assets to total assets ........ 1.26% 1.37% 1.44%
Allowance for losses to loans ................ 1.82 2.05 1.94
</TABLE>
* Not on a taxable equivalent basis
5
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POPULAR, INC.
FINANCIAL SUMMARY
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the period ended
September 30,
----------------------------------------------------
Percent
2000 1999 Variance
------------- ------------- ----------
<S> <C> <C> <C>
SUMMARY OF OPERATIONS
Interest income $ 1,591,749 $ 1,366,128 16.52%
Interest expense 854,737 652,247 31.04
------------- ------------- ------
Net interest income 737,012 713,881 3.24
Provision for loan losses 148,398 109,482 35.55
------------- ------------- ------
Net interest income after provision
for loan losses 588,614 604,399 (2.61)
Other operating income 330,537 271,793 21.61
Gain on sale of securities 13,740 775
Trading account profit (loss) 1,460 (1,561)
------------- ------------- ------
Total other income 345,737 271,007 27.57
Salaries and benefits 286,917 272,177 5.42
Profit sharing 14,897 17,888 (16.72)
Amortization of intangibles 25,958 23,319 11.32
Other operating expenses 339,008 308,428 9.91
------------- ------------- ------
Total operating expenses 666,780 621,812 7.23
------------- ------------- ------
Income before income tax and minority interest 267,571 253,594 5.51
Income tax 68,103 63,623 7.04
Net losses of minority interest 1,136 1,880
------------- ------------- ------
Net income $ 200,604 $ 191,851 4.56
============= ============= ======
Net income applicable to common stock $ 194,342 $ 185,589 4.72
============= ============= ======
Earnings per common share:
Net income $ 1.43 $ 1.37 4.38
------------- ------------- ------
Average common shares outstanding 135,871,832 135,525,400
Common shares outstanding at end of period 135,893,857 135,700,258
SELECTED AVERAGE BALANCES
Total assets........................................ $ 26,240,525 $ 23,493,991 11.69
Loans............................................... 15,674,947 13,674,777 14.63
Earning assets...................................... 24,552,597 21,970,368 11.75
Deposits............................................ 14,447,585 13,732,917 5.20
Interest-bearing liabilities........................ 20,832,100 18,296,484 13.86
Stockholders' equity................................ 1,859,882 1,691,540 9.95
PERFORMANCE RATIOS
Net interest yield *................................ 4.02% 4.35%
Return on assets.................................... 1.02 1.09
Return on common equity............................. 14.75 15.59
CREDIT QUALITY DATA
Non-performing assets............................... $ 343,836 $ 333,169 3.20
Net loans charged-off............................... 129,243 88,674 45.75
Allowance for loan losses........................... 295,177 288,382 2.36
Non-performing assets to total assets............... 1.26% 1.37%
Allowance for losses to loans....................... 1.82 2.05
</TABLE>
* Not on a taxable equivalent basis
6
