Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - POPULAR, INC. | d884671d8k.htm |
| EX-99.2 - EX-99.2 - POPULAR, INC. | d884671dex992.htm |
| EX-99.3 - EX-99.3 - POPULAR, INC. | d884671dex993.htm |
 Investor Presentation
Acquisition of Certain Assets and Assumption of
Deposits of Doral Bank
March 2, 2015
Exhibit 99.1 |
 Forward-Looking
Statements
1
The information contained in this presentation includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, including our
estimate of the accretive nature of the transaction, the additional fee income from the
transaction, the run-rate annual non-interest expense from the transaction and
our estimates of transaction costs. These forward-looking statements are based on
management's current expectations and involve risks and uncertainties that may cause the
Company's actual results to differ materially from any future results expressed or
implied by such forward-looking statements. Factors that may cause such a
difference include, but are not limited to (i) the rate of growth in the economy and
employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as
well as the magnitude of such changes; (iii) the fiscal and monetary policies of the federal
government and its agencies; (iv) changes in federal bank regulatory and supervisory
policies, including required levels of capital and the impact of proposed capital
standards on our capital ratios; (v) the impact of the Dodd-Frank Act on our
businesses, business practice and cost of operations; (vi) regulatory approvals that may be
necessary to undertake certain actions or consummate strategic transactions such as
acquisitions and dispositions; (vii) the relative strength or weakness of the consumer
and commercial credit sectors and of the real estate markets in Puerto Rico and the
other markets in which borrowers are located; (viii) the performance of the stock and bond
markets; (ix) competition in the financial services industry; (x) possible legislative, tax or
regulatory changes; (xi) additional Federal Deposit Insurance Corporation assessments
and (xii) risks related to the transaction, including (a) our ability to maintain
customer relationships, including managing any potential customer confusion caused by
the alliance structure, (b) risks associated with the limited amount of diligence able to be conducted by a
buyer in an FDIC transaction and (c) difficulties in converting or integrating the Doral
branches or difficulties in providing transition support to alliance co-bidders .
Other than to the extent required by applicable law, the Company undertakes no
obligation to publicly update or revise any forward-looking statement. Please refer to
our Annual Report on Form 10-K for the year ended December 31, 2013 and other SEC reports
for a discussion of those factors that could impact our future
results. |
 Transaction
Overview •
Total of $1.8 billion of loans, all performing
•
$848 million of Puerto Rico loans acquired by Banco Popular de Puerto Rico (“BPPR”)
•
$931 million of U.S. mainland loans acquired by Popular Community Bank
(“PCB”) •
Popular
acquired,
in
alliance
with
other
bidders,
certain
assets
and
deposits
from
the FDIC, as
receiver for Doral Bank
•
Popular’s bid was chosen to purchase approximately $5 billion of GSE mortgage servicing
rights (“MSRs”) subject to a servicing transfer agreement acceptable to
Popular •
Sales to co-bidders closed concurrently with primary transaction
•
Doral
Bank
branches
and
operations
acquired
by
Popular
continued
to
operate
under their
normal schedule after the acquisition
Loans
Acquired
Deposits
Assumed
Overview
2
Other
Transaction
Notes
•
$2.3 billion of deposits assumed
•
$612 million of Puerto Rico branch deposits (8 branches) and $431 million of Internet
deposits assumed by BPPR
•
$1.3 billion of NY branch deposits (3 branches) assumed by PCB
•
No brokered CDs assumed
•
No non-performing assets acquired
•
No loss-sharing agreement with the FDIC
•
No holding company assets or liabilities assumed
•
All necessary regulatory approvals have been received and transactions other than MSRs have
closed
Notes: Figures as of 12/31/14 and are subject to customary post-closing and
purchase accounting adjustments. |
 Transaction
Rationale Enhances Popular’s Franchise
3
•
Strengthens existing Puerto Rico franchise
•
Continues expansion in New York and adds attractive commercial platform
•
In-market transaction in both Puerto Rico and New York
•
Popular is not acquiring any non-performing loans or REO
•
Popular has successfully managed previous FDIC transactions
•
Effective deployment of capital
•
Significant cost saving opportunities
•
Accretive to earnings
Strategic Advantages
Financially Attractive |
 Transaction
Structure 4
•
BPPR served as the lead bidder in alliance with its affiliate PCB,
FirstBank Puerto Rico, an affiliate of J.C. Flowers III, L.P., and
Centennial Bank
•
Transactions with Popular’s alliance partners closed concurrently with
the primary transaction; no seller financing offered
Overview of
Alliance
Structure
($ in millions)
Popular
FirstBank
J.C. Flowers
Centennial
Total
U.S. Mainland Loans
$ 931
$ -
$ 316
$ 42
$ 1,289
Puerto Rico Loans
848
325
-
-
1,173
Total Loans
$ 1,779
$ 325
$ 316
$ 42
$ 2,463
U.S. Mainland Branch Deposits
$ 1,277
$ -
$ -
$ 466
$ 1,743
Puerto Rico Branch Deposits
612
625
-
-
1,237
Internet Deposits (BPPR)
431
-
-
-
431
Total Deposits
$ 2,320
$ 625
$ -
$ 466
$ 3,411
Notes:
Figures
as
of
12/31/14
and
are
subject
to
customary
post-closing
and
purchase
accounting
adjustments.
Amounts
may
not
total
due
to
rounding. |
 Acquired Assets
and Deposits 5
Loans
Deposits
(1)
Branches
Notes: Figures as of 12/31/14 and are subject to customary post-closing and purchase
accounting adjustments. (1) P.R. time deposits includes $431million of internet
deposits that were booked to BPPR in Puerto Rico. Total:
$1,043
million
Total:
$1,277
million
Total:
$848
million
Total:
$931
million
San Juan
Aguadilla
Mayaguez
Ponce
Guayama
Humacao
Carolina
Time
Savings,
NOW and
MMDA
Demand
Time
Demand
Mortgage
C&I & CRE
Other
Construction
CRE
C&I
Savings, NOW
and MMDA
Mortgage
16%
57%
74%
10%
41%
27%
30%
85%
11%
3%
2%
16%
27% |
 6
Key Financial Metrics
•
Accretive to earnings
•
Deposit
repricing
will
be
managed
to
bring
deposit
costs
in
line
with
Popular
•
Additional fee income, excluding revenue from mortgage servicing, of approximately $5
million •
Non-interest
expense
estimate
of
approximately
$30
million
including
estimated
cost
savings
•
Transaction-related costs estimated at $20-25 million
Notes: Figures as of 12/31/14 and are subject to customary post-closing and purchase
accounting adjustments. Amounts may not total due to rounding. Loan & Deposit
Detail Annual Pro Forma Impact excluding MSRs
($ in millions)
Balance
W.A. Coupon / Rate
Transaction Pricing -
Premium / (Discount) -
%
U.S. Mainland Loans
$ 931
5.6 %
0.6)%
Puerto Rico Loans
848
6.0 %
(4.7)%
Total Loans
$ 1,779
5.7 %
(1.9)%
1.1
U.S. Mainland Branch Deposits
$ 1,277
1.15 %
2.0 %
Puerto Rico Branch Deposits
612
0.62 %
1.5 %
Internet Deposits (BPPR)
431
0.94 %
0.0 %
Total Deposits
$ 2,320
0.97 %
1.5 % |
 7
Capital Impact
•
Capital impact subject to purchase accounting and finalization of fair market value
analysis
•
Will record an estimate of fair value in Q1 2015 with final valuations expected
later in 2015
•
Currently anticipate creation of $50-100 million of goodwill upon completion of
fair market value analysis
•
Impact on regulatory capital ratios estimated at approximately 150 bps
excluding goodwill
•
Potential partial reversal of U.S. DTA valuation allowance will be assessed
throughout 2015
•
Will
continue
our
ongoing
dialogue
with
regulators
about
capital
return
after
our
March 31st DFAST filing |
 Popular Franchise Strengthened
•
Efficient deployment of capital which is accretive to earnings
•
Acquisition grows strategically important New York business
through the addition of an attractive commercial franchise
•
In-market expansion provides significant cost savings
opportunities
•
No non-performing assets acquired
8 |
 Investor Presentation
Acquisition of Certain Assets and Assumption of
Deposits of Doral Bank |