POPULAR, INC.
For the period ended May 8, 2025. Filed Mar 25, 2025.
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May 8, 2025 · Filed Mar 25, 2025
Contents
Appendix A
APPENDIX A
Popular, Inc., Reconciliation of Non-GAAP Measures
Adjusted Net Income for The Year Ended December 31, 2024 (Non-GAAP)
| (Unaudited) | |||
|---|---|---|---|
| (In thousands) | Pre-tax | Income tax effect | Impact on net income |
| U.S. GAAP net income | $796,618 | $182,406 | $614,212 |
| Non-GAAP Adjustments: | |||
| FDIC Special Assessment[1] | 14,287 | (5,234) | 9,053 |
| Adjusted net income for incentive purposes | $810,905 | $187,640 | $623,265 |
| [1] | Expense recorded in the first quarter of 2024 related to the Special Assessment imposed by the Federal Deposit Insurance Corporation (“FDIC”) to recover the loses in connection with the receivership of several failed banks. |
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Adjusted Net Income for The Year Ended December 31, 2023 (Non-GAAP)
| (Unaudited) | |||
|---|---|---|---|
| (In thousands) | Pre-tax | Income tax effect | Impact on net income |
| U.S. GAAP net income | $675,539 | $134,197 | $541,342 |
| Non-GAAP Adjustments: | |||
| FDIC Special Assessment[1] | 71,435 | (26,170) | 45,265 |
| Adjusted net income for incentive purposes | $746,974 | $160,367 | $586,607 |
| [1] | The FDIC imposed a special assessment to insured depository institutions to recover the losses to the deposit insurance fund in connection with the receivership of several failed banks. This special assessment was imposed to Banco Popular de Puerto Rico and Popular Bank. |
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Adjusted Net Income for The Year Ended December 31, 2022 (Non-GAAP)
| (Unaudited) | |||
|---|---|---|---|
| (In thousands) | Pre-tax | Income tax effect | Impact on net income |
| U.S. GAAP net income | $1,234,971 | $132,330 | $1,102,641 |
| Non-GAAP Adjustments: | |||
| Evertec Transactions[1] | (240,411) | 13,776 | (226,635) |
| Partial Reversal of Deferred Tax Valuation Allowance[2] | (68,236) | (68,236) | |
| Adjusted net income for incentive purposes | $994,560 | $186,790 | $807,770 |
| [1] | On July 1, 2022, BPPR completed the announced acquisition of certain assets from Evertec Group, LLC (“Evertec Group”), a wholly owned subsidiary of Evertec, Inc. (“Evertec”) (NYSE: EVTC), to service certain BPPR channels (the “Business Acquisition Transaction”). As consideration for the Business Acquisition Transaction, BPPR delivered to Evertec Group 4,589,169 shares of Evertec common stock valued at closing at $169.2 million (based on Evertec’s stock price on June 30, 2022 of $36.88). On August 15, 2022, the Corporation completed the sale of its remaining 7,065,634 shares of common stock of Evertec (the “Evertec Stock Sale”, and collectively with the Business Acquisition Transaction, the “Evertec Transactions”). Following the Evertec Stock Sale, Popular no longer owns any Evertec common stock. The impact of the gain on the sale of Evertec shares used as consideration for the Business Acquisition Transaction in exchange for the acquired applications on July 1, 2022 and the net expense associated with the renegotiation of the MSA resulted in an after-tax gain of $97.9 million, while the Evertec Stock Sale and the related accounting adjustments resulted in an after-tax gain of $128.8 million, recorded during the third quarter of 2022, for an aggregate after-tax gain of $226.6 million. |
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| [2] | During the fourth quarter of 2022, the Corporation recorded a partial reversal of the deferred tax asset valuation allowance of the U.S. operations of $68.2 million. As of December 31, 2022, the deferred tax asset (“DTA”) for the |
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96 | 2025 POPULAR, INC. PROXY STATEMENT
U.S. operations, mainly related to net operating losses (“NOLs”), was valued at $278 million, net of the corresponding valuation allowance of $402 million. The additional reversal during the fourth quarter was determined based on management’s expectation of the realization of additional amounts of federal and state NOLs over their remaining carryover period.
Return on Average Tangible Common Equity (“ROATCE”)
| (In thousands) | 2022 | 2023 | 2024 | 3-yr. avg. |
|---|---|---|---|---|
| Adjusted net income (non-GAAP) | $807,770 | $586,607 | $623,265 | |
| Preferred dividends | (1,412) | (1,412) | (1,412) | |
| Adjusted net income for common stock | 806,358 | 585,195 | 621,853 | |
| Average Tangible Common Equity | 5,212,836 | 5,745,420 | 6,218,261 | |
| Adjusted ROATCE | 15.47% | 10.19% | 10.00% | 11.88% |
Reconciliation of Tangible Common Equity (non-GAAP)
| (In thousands) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Average Total Shareholders’ Equity[1] | $6,009,225 | $6,600,603 | $7,053,193 |
| Less: Preferred Stock | (22,143) | (22,143) | (22,143) |
| Less: Goodwill | (757,133) | (821,567) | (804,423) |
| Less: Other Intangibles | (17,113) | (11,473) | (8,366) |
| Average Tangible Common Equity | 5,212,836 | 5,745,420 | 6,218,261 |
| [1] | Average balances exclude unrealized gains or losses on debt securities available-for-sale and unrealized losses on debt securities transferred to held-to-maturities. |
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