Popular Posts $137.4M in 4Q Net Income
SAN JUAN – Popular Inc., the bank holding company of Banco Popular and Banco Popular North America, on Tuesday reported net income of $137.4 million and adjusted net income of $98.3 million for the fourth quarter (4Q) ended Dec. 31, 2015, compared with net income of $85.6 million and an adjusted net income of $93.4 million for the third quarter ended Sept 30, 2015.
Richard L. Carrión, chairman and CEO, said: “In 2015 we achieved several key milestones such as the Doral transactions and the completion of the restructuring of our U.S. operations. At the same time, we consistently delivered strong financial results despite the continued weakness of the Puerto Rico economy. The reinstatement of the quarterly dividend on our common stock demonstrates our confidence in our capital position and our revenue generation capacity going forward.”
During the fourth quarter, retrospective adjustments were made to the estimated fair values of the assets acquired and liabilities assumed from the Federal Deposit Insurance Corp. as receiver for Doral Bank during the first quarter of 2015 to reflect new information obtained during the measurement period that existed as of the acquisition date, as defined by U.S. generally accepted accounting principles (GAAP).
This process led to a lower fair value of the assets acquired and to a corresponding increase in goodwill.
The decline in the fair value of the loans is mainly attributed to higher estimated credit losses on the portfolio of taxi medallion loans acquired by Banco Popular North America, which had an unpaid principal balance of $248.6 million and a revised fair value of $154.9 million.
This re-measurement resulted in a negative adjustment of approximately $76.9 million to this portfolio. The main factors that influenced the revised estimated credit losses included borrower concentration in the portfolio, review of collateral values and borrowers’ payment capacity after a more thorough due diligence process, the bank said.