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EXHIBIT 99(a)
[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
January 10, 2001 NEWS RELEASE
POPULAR, INC. EARNINGS FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2000
Popular, Inc. (the Corporation) reported net income of $276.1 million
for the year ended December 31, 2000, an increase of $18.5 million or 7.2% over
the net income of $257.6 million obtained in 1999. Earnings per common share
(EPS) for the year were $1.97, compared with $1.84 in 1999. The net income for
2000 represented a return on assets (ROA) of 1.04% and a return on common equity
(ROE) of 15.0%. In 1999, the Corporation reported ROA and ROE of 1.08% and
15.45%, respectively.
Net earnings for the last quarter of 2000 reached $75.5 million or
$0.54 per common share, compared with $65.7 million or $0.47 per common share
for the same quarter of 1999, representing an increase of 14.9%. Net earnings
for the third quarter of 2000, totaled $71.3 million or $0.51 per common share.
The results for the fourth quarter of 2000 represented an ROA of 1.09% and an
ROE of 15.72%, compared with 1.05% and 15.06%, respectively, for the same period
in 1999. For the third quarter of 2000 these ratios were 1.04% and 15.24%.
The Corporation's results of operations for the quarter ended December
31, 2000, reflected increases of $5.9 million in net interest income and $17.5
million in other revenues when compared with the same quarter in 1999. Operating
expenses reflected a reduction of $5.0 million compared with the same quarter in
1999. These favorable variances were partially offset by increases of $11.2
million in income taxes and $6.8 million in the provision for loan losses.
The earnings performance for the year ended, reflects a growth of $29.0
million in net interest income, along with an improvement of $92.2 million in
non-interest revenues, tempered by
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2-POPULAR, INC. 2000 FOURTH QUARTER AND YEAR-END RESULTS
increases of $40.0 million in operating expenses, $45.7 million in the provision
for loan losses and $15.7 million in income taxes, when compared with the same
period in 1999.
The rise in net interest income for the year resulted mainly from the
growth of $2.6 billion in the average volume of earning assets driven primarily
by a $1.9 billion increase in the average loan portfolio, particularly
commercial and mortgage loans, together with an increase of $849 million in
investment and money market securities. The increase in the volume of earning
assets was funded mainly through a higher average volume of short-term
borrowings and interest-bearing deposits. The yield on earning assets for 2000
was 8.64%, compared with 8.32% in 1999. The average cost of interest-bearing
liabilities increased 67 basis points mostly as a result of a higher proportion
of borrowings and a higher interest rate scenario during 2000. The net interest
yield for the year ended December 31, 2000, was 3.96%, compared with 4.28% for
1999. The net interest yield for the last quarter of 2000 was 3.79%, compared
with 3.90% for the quarter ended September 30, 2000, and 4.17% for the last
quarter of 1999.
The provision for loan losses rose to $194.6 million for the year
ended December 31, 2000 from $148.9 million a year earlier, an increase of $45.7
million or 30.7%. The increase resulted from the growth in the loan portfolio,
non-performing loans and net charge-offs. Net charge-offs for the year ended
December 31, 2000, were $180.1 million or 1.14% of average loans, compared with
$124.7 million or 0.90% of average loans for 1999. The increase in net
charge-offs was primarily reflected in the commercial, consumer and lease
financing portfolios, reflecting higher delinquencies in the portfolios as well
as the deterioration of a limited number of commercial loan relationships.
Non-interest income, excluding securities and trading gains, amounted
to $451.7 million for 2000, compared with $373.9 million a year earlier,
resulting in an increase of $77.8 million or 20.8%. This increase was fueled by
a rise of $47.3 million in other service fees, $23.2 million in other operating
income and $7.3 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 higher rental income from
point-of-sale terminals and the sustained growth in the volume of electronic
transactions. Also, credit card fees rose principally due to late payment and
cash advance fees implemented during March in Puerto 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
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3-POPULAR, INC. 2000 FOURTH QUARTER AND YEAR-END RESULTS
income increased mostly as the result of other revenues derived by GM Group,
higher fees generated by the Corporation's investment in Telecomunicaciones de
Puerto Rico, Inc. and the $8.5 million pretax gain realized on the sale of the
credit card operations in the U.S. mainland. Service charges on deposit accounts
increased due to higher activity on commercial accounts, as well as the
implementation of new account and transactional charges in deposit accounts.
Gains on sale of investment securities available-for-sale amounted to
$11.2 million for the year 2000, compared with $0.6 million for 1999. In the
first quarter of 2000 the Corporation exercised its conversion right and
exchanged its investment in preferred stock of a financial corporation in Puerto
Rico for common stock of the same entity, resulting in a $13.4 million gain. The
Corporation had trading profits of $2.2 million in 2000, compared with trading
losses of $1.6 million the year before.
Operating expenses for 2000 reached $877.5 million, compared with
$837.5 million in 1999. The rise of $40.0 million or 4.8% was primarily
reflected in equipment, personnel, net occupancy and other operating expenses.
These increases are directly related to the growth of the Corporation's business
activities, development of new products and services and the costs associated
with the continued enhancement of existing products, technological capabilities
and delivery channels.
The Corporation's total assets at December 31, 2000, reached $28.1
billion, representing an increase of $2.6 billion or 10.2% compared with $25.5
billion a year earlier. Total assets at September 30, 2000, were $27.2 billion.
Earning assets reached $26.3 billion at December 31, 2000, compared with $23.8
billion at December 31, 1999, and $25.6 billion at September 30, 2000. Total
loans amounted to $16.1 billion at December 31, 2000, compared with $14.9
billion a year earlier. Mortgage loans grew by $709 million since December 31,
1999, followed by commercial loans with a rise of $368 million. Total loans
reached $16.2 billion at September 30, 2000. The decrease in loans since last
quarter resulted from the sale of approximately $293 million in mortgage loans
by Banco Popular de Puerto Rico and a $190 million securitization performed by
Equity One in the last quarter of 2000.
The allowance for loan losses as of December 31, 2000, amounted to $291
million or 1.81% of loans compared with $292 million or 1.96% a year earlier.
The decrease in the ratio of allowance to loans resulted mostly from the sale of
Banco Fiduciario (BF), which had a higher ratio of allowance to total loans to
cover potential losses. As of September 30, 2000, the allowance for loan
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4-POPULAR, INC. 2000 FOURTH QUARTER AND YEAR-END RESULTS
losses totaled $295 million or 1.82% of loans. At December 31, 2000, the
allowance for loan losses as a percentage of non-performing assets was 83.85%
compared with 89.54% at December 31, 1999, and 85.85% at September 30, 2000.
Non-performing assets were $347 million or 2.16% of loans at December
31, 2000, compared with $326 million or 2.19%, at the same date in 1999. The
rise in non-performing assets from December 31, 1999, was mostly reflected in
non-performing commercial and mortgage loans, which grew $52 million and $30
million, respectively, excluding the non-performing assets of BF as of that
date. BF had $65 million in non-performing assets as of the end of 1999. The
Corporation's policy is to place commercial loans on non-accrual status when
payments of principal or interest are delinquent 60 days. The industry practice
for most U.S. banks is to place commercial loans in non-accrual status when
payments of principal or interests are delinquent 90 days. Lease financing,
conventional mortgage and close-end consumer loans are placed on non-accrual
status when payments are delinquent 90 days.
Total deposits were $14.8 billion at December 31, 2000, compared with
$14.2 billion at December 31, 1999, an increase of $0.6 billion or 4.5%.
Interest-bearing deposits increased $0.8 billion or 7.5%, mostly in certificates
of deposit. The growth in deposits since December 31, 1999 was also impacted by
the sale of BF, which had $295 million in total deposits at December 31, 1999.
At September 30, 2000, total deposits were $14.6 billion.
Borrowed funds, including subordinated notes and capital securities,
amounted to $10.8 billion at December 31, 2000, compared with $9.2 billion at
the same date a year earlier. At September 30, 2000, borrowed funds totaled
$10.4 billion. Borrowed funds were used primarily to finance loan growth and
investment portfolio opportunities.
At December 31, 2000, stockholders' equity was $1.99 billion, compared
with $1.66 billion at December 31, 1999. Stockholders' equity was $1.84 billion
at September 30, 2000. Unrealized gains on securities available-for-sale, net of
deferred taxes, amounted to $4 million at December 31, 2000, compared with net
unrealized losses of $139 million a year ago.
The market value of the Corporation's common stock at December 31,
2000, was $26.31 per share, compared with $27.94 at December 31, 1999. The
Corporation's market capitalization at December 31, 2000, was $3.6 billion,
compared with $3.8 billion at December 31, 1999. At December 31, 2000, the
Corporation's common stock had a book value per share of $13.92.
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5-POPULAR, INC. 2000 FOURTH QUARTER AND YEAR-END RESULTS
The Corporation's common and preferred stocks are traded on the
National Association of Securities Dealers Automated Quotation (NASDAQ) National
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
December 31 Fourth
------------------------------- Quarter -------------
2000-1999 Third
Percent Quarter
2000 1999 Variance 2000
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<S> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Interest income $ 558,408 $ 485,542 15.01% $ 561,174
Interest expense 312,659 245,686 27.26 312,318
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Net interest income 245,749 239,856 2.46 248,856
Provision for loan losses 46,242 39,466 17.17 49,666
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Net interest income after provision
for loan losses 199,507 200,390 (0.44) 199,190
Other operating income 121,130 102,068 18.68 120,629
Gain on sale of securities (2,539) (137) 147
Trading account profit (loss) 770 (21) (50)
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Total other income 119,361 101,910 17.12 120,726
Salaries and benefits 88,346 90,639 (2.53) 95,182
Profit sharing 4,016 5,993 (32.99) 5,197
Amortization of intangibles 8,600 8,469 1.55 8,829
Other operating expenses 109,729 110,569 (0.76) 111,696
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Total operating expenses 210,691 215,670 (2.31) 220,904
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Income before income tax and minority interest 108,177 86,630 24.87 99,012
Income tax 32,694 21,497 52.09 27,662
Net (earnings) losses of minority interest 16 574 (58)
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Net income $ 75,499 $ 65,707 14.90 $ 71,292
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Net income applicable to common stock $ 73,411 $ 63,618 15.39 $ 69,205
================================================================
Earnings per common share:
Net income $ 0.54 $ 0.47 $ 0.51
Average common shares outstanding 136,013,633 135,764,373 135,971,955
Common shares outstanding at end of period 135,998,617 135,654,292 135,893,857
SELECTED AVERAGE BALANCES
Total assets ................................. $ 27,551,174 $ 24,733,330 11.39 $ 27,271,400
Loans ........................................ 16,201,221 14,573,443 11.17 16,309,112
Earning assets ............................... 25,929,544 23,059,778 12.44 25,553,248
Deposits ..................................... 14,690,694 13,964,695 5.20 14,769,823
Interest-bearing liabilities ................. 22,115,055 19,387,914 14.07 21,820,924
Stockholders' equity ......................... 1,957,918 1,775,856 10.25 1,906,610
SELECTED FINANCIAL DATA AT PERIOD-END
Total assets ................................. $ 28,062,408 $ 25,460,539 10.22 $ 27,230,263
Loans ........................................ 16,057,344 14,907,754 7.71 16,237,687
Earning assets ............................... 26,344,789 23,754,620 10.90 25,637,474
Deposits ..................................... 14,810,004 14,173,715 4.49 14,557,878
Interest-bearing liabilities ................. 22,485,358 20,043,234 12.18 22,003,023
Stockholders' equity ......................... 1,993,644 1,660,986 20.03 1,835,734
PERFORMANCE RATIOS
Net interest yield * ......................... 3.79% 4.17% 3.90%
Return on assets ............................. 1.09 1.05 1.04
Return on common equity ...................... 15.72 15.06 15.24
CREDIT QUALITY DATA
Non-performing assets ........................ $ 346,650 $ 326,113 6.30 $ 343,836
Net loans charged-off ........................ 50,884 36,028 41.23 42,547
Allowance for loan losses .................... 290,653 292,010 (0.46) 295,177
Non-performing assets to total assets ........ 1.24% 1.28% 1.26%
Allowance for losses to loans ................ 1.81 1.96 1.82
</TABLE>
* Not on a taxable equivalent basis
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POPULAR, INC.
FINANCIAL SUMMARY
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the period ended
December 31,
---------------------------------------------
Percent
2000 1999 Variance
---------------------------------------------
SUMMARY OF OPERATIONS
<S> <C> <C> <C>
Interest income $ 2,150,157 $ 1,851,670 16.12%
Interest expense 1,167,396 897,932 30.01
---------------------------------------------
Net interest income 982,761 953,738 3.04
Provision for loan losses 194,640 148,948 30.68
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Net interest income after provision
for loan losses 788,121 804,790 (2.07)
Other operating income 451,667 373,860 20.81
Gain on sale of securities 11,201 638
Trading account profit (loss) 2,230 (1,582)
---------------------------------------------
Total other income 465,098 372,916 24.72
Salaries and benefits 375,263 362,815 3.43
Profit sharing 18,913 23,881 (20.80)
Amortization of intangibles 34,558 31,788 8.71
Other operating expenses 448,737 418,998 7.10
---------------------------------------------
Total operating expenses 877,471 837,482 4.77
---------------------------------------------
Income before income tax and minority interest 375,748 340,224 10.44
Income tax 100,797 85,120 18.42
Net losses of minority interest 1,152 2,454
---------------------------------------------
Net income $ 276,103 $ 257,558 7.20
=============================================
Net income applicable to common stock $ 267,753 $ 249,208 7.44
=============================================
Earnings per common share:
Net income $ 1.97 $ 1.84 7.07
Average common shares outstanding 135,907,476 135,585,634
Common shares outstanding at end of period 135,998,617 135,654,292
SELECTED AVERAGE BALANCES
Total assets................................. $ 26,569,977 $ 23,806,372 11.61
Loans ....................................... 15,801,897 13,901,290 13.67
Earning assets .............................. 24,893,377 22,244,959 11.91
Deposits .................................... 14,508,695 13,791,338 5.20
Interest-bearing liabilities ................ 21,154,591 18,578,311 13.87
Stockholders' equity ........................ 1,884,525 1,712,792 10.03
PERFORMANCE RATIOS
Net interest yield * ........................ 3.96% 4.28%
Return on assets ............................ 1.04 1.08
Return on common equity ..................... 15.00 15.45
CREDIT QUALITY DATA
Non-performing assets ....................... $ 346,650 $ 326,113 6.30
Net loans charged-off ....................... 180,128 124,702 44.45
Allowance for loan losses ................... 290,653 292,010 (0.46)
Non-performing assets to total assets ....... 1.24% 1.28%
Allowance for losses to loans ............... 1.81 1.96
</TABLE>
* Not on a taxable equivalent basis
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