BBVA USA reports first quarter 2020 results

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- COVID-19 pandemic relief efforts: Approved by the Small Business Administration (SBA) for $2.2 billion in Paycheck Protection Program (PPP) loans under Phase 1, nearly all of which has been disbursed to customers. Proactively providing other products and offers to assist customers during this crisis - Revenue: Total revenue up 4 percent (annualized) from fourth quarter 2019 levels as strong growth in noninterest income more than offset a decline in net interest income - Goodwill impairment: Drastic change in macroeconomic conditions and forecasts brought about by the COVID-19 pandemic results in $2.2 billion non-cash write-down of goodwill; no impact to liquidity, regulatory capital ratios or the operations of the bank and ability to service and meet the needs of our customers - Operating income: Operating income(1) for the quarter totals $300 million, up 30 percent (annualized) from fourth quarter 2019 levels - Loans and Deposits: Momentum from fourth quarter 2019 continues as total loans increase 22 percent (annualized) on a linked quarter basis. Total deposits rise 12 percent (annualized) driven by a 51 percent increase (annualized) in interest bearing transaction accounts - Credit quality: Nonperforming loan ratio at 1.09 percent, up 3 basis points from year-end 2019 while net charge-offs as a percentage of average loans at 69 basis points, down 18 basis points from fourth quarter 2019 levels. Provision expense of $357 million in the quarter due to the drastic slowdown in economic activity from COVID-19 and steep drop in oil prices - Capital and liquidity: Regulatory and liquidity positions remain strong. CET1(2) ends quarter at 11.97 percent while Liquidity Coverage Ratio (LCR) remains stout at 144 percent

April 30, 2020 9:34 AM EDT

HOUSTON, April 30, 2020 /PRNewswire/ -- BBVA USA Bancshares, Inc., a Sunbelt-based bank holding company (BBVA USA), reported today a net loss of $2.2 billion for the first quarter of 2020. Included in first quarter 2020 results is goodwill impairment (non-cash charge) totaling $2.2 billion reflecting the drastic change in macroeconomic conditions and forecasts brought about by the COVID-19 pandemic. Excluding the impact of this non-cash charge, the adjusted net loss1 for the quarter was $52 million, further reflecting the abrupt decline in interest rates and higher provision expense necessary to reflect the economic and business disruption caused by the pandemic.

"Momentum from last quarter accelerated during the first quarter in terms of customer activity as we posted very strong loan and deposit growth, and a substantial pick-up in market driven fee-based businesses which enabled us to deliver an increase in operating income from fourth quarter levels," said Javier Rodríguez Soler, president and CEO of BBVA USA.

"Despite these positive results, the severity of the COVID-19 pandemic on macroeconomic economic conditions and forecasts, including the drastic drop in interest rates and subsequent decline in oil prices, required us to reevaluate the carrying amount of goodwill on our balance sheet. The resulting analysis resulted in a goodwill impairment charge during the quarter that is reflected in our results but has no impact on our liquidity position, regulatory capital ratios, and the operations of our company or our ability to meet our customers' needs."

At March 31, 2020, BBVA USA had approximately $2.3 billion of goodwill remaining on its balance sheet. An impairment test on the intangible asset is conducted on an annual basis or, in this case, as necessary given a significant change in economic conditions, forecasts and other factors.  

"I have been particularly proud of our team of employees and their response to the COVID-19 pandemic," noted Rodríguez Soler. "At BBVA our culture is built on three core values: Customer Comes First, We Think Big, and We Are One Team. Our employees have embodied these values throughout the crisis, from building an online app in just three days to expedite PPP applications, to the countless employees in other areas of the bank who volunteered to assist in processing the applications. These are just two examples of how our team is making sure we are there to help our customers during this difficult time."

As one of the leading small business lenders as recognized by the SBA, BBVA USA has to date received almost 24,000 applications related to the PPP and was approved by the SBA to provide approximately  $2.2 billion in loans under the program, nearly all of which has been disbursed to customers. In addition, BBVA USA is providing other relief efforts to assist customers during this challenging time. Through April 17, 2020, BBVA USA has processed nearly 32,000 retail customer requests for extensions effecting $1.9 billion of loans including mortgages, credit cards, small businesses, auto and other consumer loans. Similar requests have been received and processed for commercial customers. BBVA USA has also launched special offers related to credit cards, mortgages and deposits, while also keeping open the drive-thru lanes at its branches (approximately 88 percent of its total branch network) to assist customer transactions. Earlier this month, BBVA USA also announced a more than $3.7 million commitment to support organizations that are providing community support in response to the COVID-19 pandemic, as well as programs to support its employees impacted by the pandemic.    

Total revenue for the first quarter of 2020 was $905 million, up 4 percent (annualized) from fourth quarter 2019 levels as noninterest income growth more than offset a decline in net interest income. Compared to the first quarter of 2019, total revenue was down 3 percent as the decline in net interest income more than offset double-digit growth in noninterest income. Net interest income for the quarter totaled $589 million compared to $623 million in the fourth quarter of 2019 and $683 million in the first quarter of 2019. The percent net interest margin in the first quarter of 2020 was 2.80 percent compared to 2.96 percent in the fourth quarter of 2019 and 3.41 percent in the first quarter of 2019. The decline in net interest income and the percent net interest margin reflects the impact from the drastic and sudden drop in interest rates that immediately impacted yields, particularly with respect to the repricing of variable rate loans.

Noninterest income (excluding securities gains) for the quarter totaled $315 million, up $43 million compared to the fourth quarter of 2019 and up $66 million compared to the first quarter of 2019. The double-digit percentage increase on a linked quarter basis was driven by increases in investment banking and advisory fees (+$11 million), mortgage banking (+$8 million) and investment services sales fees (+$6 million). Compared to the first quarter of 2019, noninterest income was up 27 percent and growth was broad-based as all of our fee-based businesses reported positive increases, led by the aforementioned areas. The increase in other income reflected gains on investments held by our small business investment company arm. During the first quarter of 2020, investment securities gains totaled $19 million compared to $9 million in the first quarter of 2019 and no gains or losses were recorded in the fourth quarter of 2019.  

Total noninterest expense (excluding the non-cash charge) totaled $624 million, an increase of 5 percent (annualized) from fourth quarter 2019 levels and 7 percent from the first quarter of 2019. The rise in noninterest expense was driven by an increase in salaries, benefits and commissions and an increase in other expense associated with higher provisions for unfunded commitments, offset in part by a decrease in net occupancy and on a linked quarter basis professional services. Operating income1 in the quarter totaled $300 million, up 30 percent (annualized) from the fourth quarter of 2019 and down 17 percent from first quarter 2019 levels.

Total loans at the end of the first quarter of 2020 were $67.7 billion, up 22 percent (annualized) from $64.1 billion at the end of fourth quarter of 2019 and up 4 percent from $65.0 billion at the end of the first quarter of 2019. Growth both on a linked quarter and year-over-year basis was primarily driven by an increase in the commercial loan portfolio (includes commercial and industrial loans and small business lending), of which a substantial portion was related to customer draws. During the first quarter of 2019, approximately $1.1 billion of commercial loans were transferred to loans held for sale and were subsequently sold in the second quarter of 2019. 

Total deposits were $77.2 billion at the end of the quarter, up $2.2 billion or 12 percent (annualized) from the fourth quarter of 2019, and up $2.9 billion or 4 percent compared to the first quarter of 2019. While noninterest bearing deposits declined on a linked quarter basis and were relatively flat compared to a year ago, growth in interest bearing transaction accounts (savings, money market and interest bearing demand deposits) was robust. Interest bearing transaction accounts totaled $46.3 billion, up $5.2 billion or 51 percent (annualized) on a linked quarter basis, and up $8.3 billion or 22 percent compared to the first quarter of 2019. The loan to deposit ratio ended the quarter at 87.6 percent compared to 85.43 percent at the end of the fourth quarter of 2019 and 87.4 percent at the end of the first quarter of 2019. BBVA USA continues to maintain a very strong liquidity position with the LCR at 144 percent compared to 145 percent at the end of the fourth quarter of 2019.

Nonperforming loans as a percentage of total loans ended the first quarter of 2020 at 1.09 percent, up slightly from 1.06 percent at the end of 2019 and down from 1.34 percent at the end of the first quarter a year ago. Net charge-offs as a percentage of average total loans were 69 basis points compared to 87 basis points during the fourth quarter of 2019 and 63 basis points for the first quarter of 2019.   

On January 1, 2020, BBVA USA adopted ASC 326 – Current Expected Credit Loss (CECL) accounting standard which estimates credit losses over the life of the loans whereas the previous standard relied on incurred losses. As a result, approximately $185 million was added to the allowance for loan losses with the offset recorded in shareholder's equity and deferred tax assets. 

Provision expense for the quarter was $357 million compared to $120 million in the fourth quarter of 2019 and $182 million in the first quarter of 2019. The substantial increase in provision expense was warranted given the drastic slowdown in economic activity and expected future losses in the loan portfolio that could result from our customers being unable to conduct business as normal during the pandemic shutdown. In addition, the subsequent steep drop in oil prices resulted in a higher level of reserves related to our energy portfolio, which totaled approximately $3.4 billion at the end of the quarter compared to $2.9 billion at the end of the fourth quarter of 2019.  

As a result of the increase in provision expense, the allowance for loan losses as a percentage of total loans at the end of the quarter rose to 2.00 percent compared to 1.44 percent at the end of 2019 and 1.52 percent at the end of the quarter a year ago. The coverage ratio of nonperforming loans at the end of the quarter was 183 percent compared to 136 percent at the end of the fourth quarter of 2019 and 111 percent at the end of the first quarter of 2019.

Total shareholder's equity at the end of the first quarter of 2020 totaled $11.4 billion compared to $13.4 billion at the end of 2019 and $13.7 billion at the end of the first quarter of 2019. The CET12 ratio ended the first quarter of 2020 at 11.97 percent compared to 12.49 percent at the end of 2019 and 12.34 percent at the end of the first quarter a year ago. While the goodwill impairment non-cash charge resulted in a decrease in total shareholder's equity, it did not impact tangible capital levels and therefore had no impact on regulatory capital and regulatory capital ratios. All of BBVA USA's regulatory capital ratios2 continue to exceed the requirements under "well-capitalized" guidelines.

1 Operating income, adjusted net income (loss), return on average tangible equity, adjusted return on average assets and adjusted return on average tangible equity are Non-GAAP financial measures we believe aid in understanding certain areas of our performance. The calculation of these measures is included on the page titled Non-GAAP Reconciliation.

2 Regulatory capital ratios at March 31, 2020, are estimated.

For more BBVA news visit, www.bbva.com and the U.S. Newsroom.Additional news updates can be found via Twitter and Instagram.For more financial information about BBVA in the U.S., visit bbvausa.investorroom.com.

About BBVA

BBVA GroupBBVA (NYSE: BBVA) is a customer-centric global financial services group founded in 1857. The Group has a strong leadership position in the Spanish market and is the largest financial institution in Mexico. It has leading franchises in South America and the Sunbelt Region of the United States. It is also the leading shareholder in Turkey's BBVA Garanti. BBVA's purpose is to bring the age of opportunities to everyone, based on our customers' real needs: provide the best solutions, helping them make the best financial decisions, through an easy and convenient experience. The institution rests in solid values: Customer comes first, we think big and we are one team. BBVA's responsible banking model aspires to achieve a more inclusive and sustainable society.

On February 28, 2020, BBVA filed its annual report on Form 20-F for the year ended December 31, 2019, with the U.S. Securities and Exchange Commission. A copy can be accessed on the BBVA website at https://shareholdersandinvestors.bbva.com/the-share/adrs-english/. Holders of BBVA's American Depositary Receipts (ADRs) may request a hard copy of the Form 20-F for the year ended December 31, 2019, including complete audited financial statements, free of charge. To request a copy, contact Ed Bilek at [email protected].

BBVA USAIn the U.S., BBVA is a Sunbelt-based financial institution that operates 641 branches, including 330 in Texas, 89 in Alabama, 63 in Arizona, 61 in California, 44 in Florida, 37 in Colorado and 17 in New Mexico. The bank ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (6th). In the U.S., BBVA has been recognized as one of the leading small business lenders by the Small Business Administration (SBA) and ranked 14th nationally in terms of dollar volume of SBA loans originated in fiscal year 2019.

Forward-Looking StatementsCertain statements in this press release may contain forward-looking statements about BBVA USA Bancshares, Inc. (the "Company") and its industry that involve substantial risks and uncertainties. The use of "we," "our" and similar terms refer to the Company. Statements other than statements of current or historical fact, including statements regarding our future financial condition, results of operations, business plans, liquidity, cash flows, projected costs, and the impact of any laws or regulations applicable to the Company, constitute forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," and other similar expressions are intended to identify these forward-looking statements. These forward-looking statements reflect the Company's views regarding future events and financial performance. Such statements are subject to risks, uncertainties, assumptions and other important factors, many of which may be beyond the Company's control, that could cause actual results to differ materially from anticipated results. If the Company's assumptions and estimates are incorrect, or if the Company becomes subject to significant limitations as the result of litigation or regulatory action, then the Company's actual results could vary materially from those expressed or implied in these forward-looking statements. The forward-looking statements are and will be based on the Company's then current views and assumptions regarding future events and speak only as of their dates made. The Company assumes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by securities law or regulation. For further information regarding risks and uncertainties associated with the Company's business, please refer to the "Risk Factors" section of the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC") on February 28, 2020, as updated by our subsequent SEC filings.

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in thousands)

Three Months Ended March 31,

%

2020

2019

Change

EARNINGS SUMMARY

Net interest income

$       589,455

$     683,089

(14)

Noninterest income [a]

315,103

248,802

27

Total revenue [a]

904,558

931,891

(3)

Investment securities gain, net

19,139

8,958

114

Provision for credit losses

356,991

182,292

96

Goodwill impairment

2,185,000

—

 NM 

Noninterest expense

624,060

581,973

7

Pretax (loss) income

(2,242,354)

176,584

(1,370)

Income tax (benefit) expense

(5,069)

35,603

(114)

Net (loss) income

$    (2,237,285)

$     140,981

(1,687)

Adjusted net (loss) income [b]

$

(52,285)

$     140,981

(137)

SELECTED RATIOS

Return on average assets

(9.34)%

0.61 %

Return on average assets- adjusted [b]

(0.22)

0.61

Return on average tangible equity [b]

(100.27)

6.64

Return on average tangible equity- adjusted [b]

(2.34)

6.64

Efficiency ratio [b]

68.08

61.58

Average common equity to average assets

13.74

14.39

Average loans to average total deposits

86.64

90.69

Common equity tier I capital (CET1) [c]

11.97

12.34

Tier I capital ratio [c]

12.29

12.67

Total capital ratio [c]

14.62

14.87

Leverage ratio [c]

9.40

10.05

Average for Three Months

Ending Balance

Ended March 31,

%

March 31,

%

2020

2019

Change

2020

2019

Change

BALANCE SHEET HIGHLIGHTS

Total loans

$   64,875,095

$65,482,395

(1)

$67,657,166

$65,031,366

4

Total debt securities

13,893,355

13,768,787

1

14,222,974

13,872,059

3

Earning assets

86,504,508

82,503,041

5

87,388,951

84,356,100

4

Total assets

96,356,113

92,985,876

4

94,325,559

93,842,586

1

Noninterest bearing demand deposits

20,293,503

20,183,069

1

20,418,504

20,403,716

—

Interest bearing transaction accounts

43,676,781

35,904,264

22

46,318,129

38,018,421

22

Total transaction accounts

63,970,284

56,087,333

14

66,736,633

58,422,137

14

Total deposits

74,881,825

72,203,842

4

77,234,507

74,380,308

4

Total shareholder's equity

13,500,615

13,640,655

(1)

11,358,354

13,727,537

(17)

[a]  Excludes net gain on sales of investment securities.

[b]  Non-GAAP financial measure that we believe aids in understanding certain areas of our performance.  The calculation of this measure is included on the page titled Non-GAAP Reconciliation.

[c]  Current period regulatory capital ratios are estimated.

NM = Not meaningful

 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)

2020

2019

March 31

December 31

September 30

June 30

March 31

NONPERFORMING ASSETS

Nonaccrual loans [a]

$   676,716

$      606,843

$       653,242

$732,696

$806,644

Loans 90 days or more past due [b]

61,774

71,126

67,869

64,337

63,880

TDRs 90 days or more past due

335

414

588

304

370

Total nonperforming loans [a]

738,825

678,383

721,699

797,337

870,894

Foreclosed real estate

20,642

20,833

17,381

13,752

14,983

Other repossessed assets

13,338

10,930

17,584

13,040

11,225

Total nonperforming assets

$   772,805

$      710,146

$       756,664

$824,129

$897,102

TDRs accruing and past due less than 90 days

$     97,404

$        97,901

$         97,218

$112,383

$111,671

Total nonperforming loans as a % of loans

1.09 %

1.06 %

1.14 %

1.26 %

1.34 %

Total nonperforming assets as a % of total loans, foreclosed real estate, and other repossessed assets

1.14

1.11

1.19

1.30

1.38

Three Months Ended

2020

2019

March 31

December 31

September 30

June 30

March 31

ALLOWANCE FOR LOAN LOSSES

Balance at beginning of period

$   920,993

$      942,191

$       977,660

$966,022

$885,242

Adoption of ASC 326

184,931

—

—

—

—

Net charge-offs (NCO)

111,798

140,703

176,098

143,380

101,512

Provision for loan losses

356,946

119,505

140,629

155,018

182,292

Balance at end of period

$1,351,072

$      920,993

$       942,191

$977,660

$966,022

Allowance for loan losses as a % of total loans

2.00 %

1.44 %

1.49 %

1.54 %

1.52 %

Allowance for loan losses as a % of nonperforming loans [c]

182.87

135.76

130.55

122.62

110.92

Allowance for loan losses as a % of nonperforming assets [c]

174.83

129.69

124.52

118.63

107.68

Annualized as a % of average loans:

NCO - QTD

0.69

0.87

1.10

0.90

0.63

NCO - YTD

0.69

0.88

0.88

0.77

0.63

[a]  Includes loans held for sale.

[b]  Excludes loans classified as troubled debt restructuring (TDRs).

[c]  Includes loans held for sale that are on nonaccrual status.

 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)

Three Months Ended March 31,

2020

2019

AverageBalance

Income/Expense

Yield/Rate

AverageBalance

Income/Expense

Yield/Rate

YIELD/RATE ANALYSIS

(Taxable Equivalent Basis)

Assets

Earning assets:

Loans

$64,875,095

$726,532

4.50 %

$65,482,395

$812,415

5.03 %

Debt securities available for sale [a]

6,669,560

(1,492)

(0.09)

9,922,400

53,522

2.19

Debt securities held to maturity

7,192,165

42,080

2.35

4,034,292

30,765

3.09

Other earning assets [b]

7,736,058

43,297

2.25

3,251,859

23,507

2.93

Total earning assets [a]

86,472,878

810,417

3.77

82,690,946

920,209

4.51

Allowance for credit losses

(1,064,750)

(909,663)

Unrealized loss on debt securities available for sale

31,630

(187,905)

Other assets

10,916,355

11,392,498

Total assets

$96,356,113

$92,985,876

Liabilities and Shareholder's Equity

Interest bearing liabilities:

Interest bearing demand deposits

$11,698,488

$  24,551

0.84

$  8,685,693

$  20,346

0.95

Savings and money market accounts

31,978,293

84,792

1.07

27,218,571

76,909

1.15

Certificates and other time deposits

10,911,541

55,399

2.04

16,116,509

85,099

2.14

Total interest bearing deposits

54,588,322

164,742

1.21

52,020,773

182,354

1.42

FHLB and other borrowings

3,736,201

21,176

2.28

4,290,724

37,626

3.56

Federal funds purchased and securities sold under agreement to repurchase [b]

1,451,501

22,658

6.28

411,925

3,747

3.69

Other short-term borrowings

20,037

352

7.07

28,117

196

2.83

Total interest bearing liabilities

59,796,061

208,928

1.41

56,751,539

223,923

1.60

Noninterest bearing deposits

20,293,503

20,183,069

Other noninterest bearing liabilities

2,765,934

2,410,613

Total liabilities

82,855,498

79,345,221

Shareholder's equity

13,500,615

13,640,655

Total liabilities and shareholder's equity

$96,356,113

$92,985,876

Net interest income/ net interest spread

601,489

2.36 %

696,286

2.91 %

Net yield on earning assets

2.80 %

3.41 %

Total taxable equivalent adjustment

12,034

13,197

Net interest income

$589,455

$683,089

[a] Excludes adjustment for market valuation.

[b] Yield/rate reflects impact of balance sheet offsetting.

 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)

Three Months

Three Months Ended

Ended March 31,

%

2020

2019

2020

2019

 Change 

March 31

December 31

September 30

June 30

March 31

NONINTEREST INCOME

Service charges on deposit accounts

$     61,531

$  58,908

4

$         61,531

$         64,585

$         65,143

$  61,731

$  58,908

Card and merchant processing fees

50,091

46,002

9

50,091

50,805

50,385

50,355

46,002

Investment services sales fees

34,407

26,696

29

34,407

28,130

29,287

31,333

26,696

Investment banking and advisory fees

26,731

18,857

42

26,731

15,720

28,324

20,758

18,857

Money transfer income

24,548

21,981

12

24,548

25,871

26,020

25,272

21,981

Corporate and correspondent investment sales

10,717

6,892

55

10,717

14,263

11,799

5,607

6,892

Asset management fees

11,904

10,767

11

11,904

11,532

11,405

11,867

10,767

Mortgage banking

17,451

4,937

253

17,451

9,048

8,204

5,870

4,937

Bank owned life insurance

4,625

4,584

1

4,625

4,584

3,508

4,803

4,584

Other

73,098

49,178

49

73,098

48,046

66,241

66,685

49,178

315,103

248,802

27

315,103

272,584

300,316

284,281

248,802

Investment securities gains, net

19,139

8,958

114

19,139

—

21,003

—

8,958

Total noninterest income

$   334,242

$257,760

30

$        334,242

$        272,584

$        321,319

$284,281

$257,760

NONINTEREST EXPENSE

Salaries, benefits and commissions

$   310,136

$292,716

6

$        310,136

$        297,823

$        295,092

$296,303

$292,716

Equipment

64,681

65,394

(1)

64,681

64,826

63,908

62,638

65,394

Professional services

70,220

63,896

10

70,220

82,343

72,903

73,784

63,896

Net occupancy

39,843

40,941

(3)

39,843

43,302

42,241

40,116

40,941

Money transfer expense

17,136

14,978

14

17,136

17,951

18,005

17,290

14,978

Marketing

11,899

10,393

14

11,899

12,888

15,471

16,412

10,393

Communications

5,371

5,401

(1)

5,371

5,179

5,469

5,733

5,401

Goodwill impairment

2,185,000

—

—

2,185,000

470,000

—

—

—

Other

104,774

88,254

19

104,774

92,594

85,798

86,038

88,254

Total noninterest expense

$2,809,060

$581,973

383

$     2,809,060

$     1,086,906

$        598,887

$598,314

$581,973

NM = Not meaningful

 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)

Three Months

Three Months Ended

Ended March 31,

2020

2019

2020

2019

March 31

December 31

September 30

June 30

March 31

NON-GAAP RECONCILIATION

Computation of Operating Income:

Net interest income (GAAP)

$     589,455

$     683,089

$     589,455

$      623,154

$       641,041

$     659,749

$     683,089

Plus: noninterest income (GAAP)

334,242

257,760

334,242

272,584

321,319

284,281

257,760

Less: noninterest expense (GAAP)

2,809,060

581,973

2,809,060

1,086,906

598,887

598,314

581,973

Plus: goodwill impairment (GAAP)

2,185,000

—

2,185,000

470,000

—

—

—

Operating income (non-GAAP)

$     299,637

$     358,876

$     299,637

$      278,832

$       363,473

$     345,716

$     358,876

Computation of Average Tangible Equity:

Total stockholder's equity (average) (GAAP)

$13,500,615

$13,640,655

$13,500,615

$ 14,090,315

$   14,056,939

$13,782,011

$13,640,655

Less: goodwill and other intangibles (average) (GAAP)

4,526,744

5,035,591

4,526,744

5,016,935

5,023,480

5,031,129

5,035,591

Average tangible equity (non-GAAP) [B]

$  8,973,871

$  8,605,064

$  8,973,871

$   9,073,380

$    9,033,459

$  8,750,882

$  8,605,064

Net income (loss) (GAAP) [A]

$ (2,237,285)

$     140,981

$ (2,237,285)

$     (330,705)

$       182,945

$     160,186

$     140,981

Return on average tangible equity (non-GAAP) ([A]/[B], annualized)

(100.27)%

6.64 %

(100.27)%

(14.46)%

8.03 %

7.34 %

6.64 %

Computation of Adjusted Net Income, Return on Average Assets and Return on Average Tangible Equity:

Net income (loss) (GAAP)

$ (2,237,285)

$     140,981

$ (2,237,285)

$     (330,705)

$       182,945

$     160,186

$     140,981

Plus: goodwill impairment (GAAP)

2,185,000

—

2,185,000

470,000

—

—

—

Adjusted net income (non-GAAP) [C]

$      (52,285)

$     140,981

$      (52,285)

$      139,295

$       182,945

$     160,186

$     140,981

Average assets (GAAP) [D]

$96,356,113

$92,985,876

$96,356,113

$ 95,754,954

$   94,942,456

$93,452,839

$92,985,876

Return on average assets - adjusted (non-GAAP) ([C]/[D], annualized)

(0.22)%

0.61 %

(0.22)%

0.58 %

0.76 %

0.69 %

0.61 %

Return on average tangible equity - adjusted (non-GAAP) ([C]/[B], annualized)

(2.34)

6.64

(2.34)

6.09

8.03

7.34

6.64

Computation of Efficiency Ratio:

Noninterest expense (GAAP)

$  2,809,060

$     581,973

$  2,809,060

$   1,086,906

$       598,887

$     598,314

$     581,973

Less: securities and goodwill impairment (GAAP)

2,185,000

—

2,185,000

470,102

—

113

—

Total expense (GAAP) [E]

$     624,060

$     581,973

$     624,060

$      616,804

$       598,887

$     598,201

$     581,973

Net interest income, taxable equivalent basis

$     601,489

$     696,286

$     601,489

$      635,552

$       653,926

$     672,807

$     696,286

Plus: noninterest income (GAAP)

334,242

257,760

334,242

272,584

321,319

284,281

257,760

Less: investment securities gains, net (GAAP)

19,139

8,958

19,139

—

21,003

—

8,958

Total revenue [F]

$     916,592

$     945,088

$     916,592

$      908,136

$       954,242

$     957,088

$     945,088

Efficiency ratio (non-GAAP) ([E]/[F])

68.08 %

61.58 %

68.08 %

67.92 %

62.76 %

62.50 %

61.58 %

 

BBVA USA BANCSHARES, INC.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)

At or Quarter Ended March 31, 2020

30-59 Days Past Due

60-89 Days Past Due

90 Days or MorePast Due

Nonaccrual

Accruing TDRs

Not Past Due,Nonaccrual, or TDR

Total

Net Charge Offs(Recoveries)

Commercial, financial and agricultural

$                       31,493

$                         7,588

$                 3,013

$   323,881

$              1,931

$            27,464,207

$ 27,832,113

$              19,014

Real estate – construction

9,356

66

574

13,676

69

2,147,973

2,171,714

(13)

Commercial real estate –  mortgage

13,439

5,241

912

114,839

3,333

13,715,641

13,853,405

(73)

Residential real estate – mortgage

67,938

25,187

5,744

147,058

55,116

13,144,975

13,446,018

(172)

Equity lines of credit

16,382

6,244

3,295

33,354

—

2,552,075

2,611,350

536

Equity loans

2,636

1,147

293

8,027

22,392

194,874

229,369

212

Credit card

13,230

8,932

23,707

—

—

977,503

1,023,372

19,517

Consumer – direct

34,553

19,738

15,196

7,160

14,898

2,184,500

2,276,045

51,726

Consumer – indirect

76,547

24,249

9,040

28,721

—

3,957,471

4,096,028

21,051

Total loans

$                     265,574

$                       98,392

$              61,774

$   676,716

$            97,739

$            66,339,219

$ 67,539,414

$           111,798

Loans held for sale

$                               —

$                               —

$                      —

$             —

$                    —

$                  117,752

$       117,752

$                      —

At or Quarter Ended December 31, 2019

30-59 Days Past Due

60-89 Days Past Due

90 Days or MorePast Due

Nonaccrual

Accruing TDRs

Not Past Due orImpaired

Total

Net Charge Offs(Recoveries)

Commercial, financial and agricultural

$                       29,273

$                       16,462

$                 6,692

$   268,288

$              1,456

$            24,110,067

$ 24,432,238

$              37,788

Real estate – construction

7,603

2

571

8,041

72

2,012,393

2,028,682

(126)

Commercial real estate –  mortgage

5,325

5,458

6,576

98,077

3,414

13,742,628

13,861,478

(285)

Residential real estate – mortgage

72,571

21,909

4,641

147,337

57,165

13,230,331

13,533,954

107

Equity lines of credit

15,766

6,581

1,567

38,113

—

2,530,653

2,592,680

857

Equity loans

2,856

1,028

195

8,651

23,770

208,468

244,968

137

Credit card

11,275

9,214

22,796

—

—

959,080

1,002,365

16,760

Consumer – direct

33,658

20,703

18,358

6,555

12,438

2,246,430

2,338,142

58,190

Consumer – indirect

83,966

28,430

9,730

31,781

—

3,758,443

3,912,350

27,275

Total loans

$                     262,293

$                     109,787

$              71,126

$   606,843

$            98,315

$            62,798,493

$ 63,946,857

$           140,703

Loans held for sale

$                               —

$                               —

$                      —

$             —

$                    —

$                  112,058

$       112,058

$                      —

BBVA USA BANCSHARES, INC.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)

At or Quarter Ended September 30, 2019

30-59 Days Past Due

60-89 Days Past Due

90 Days or MorePast Due

Nonaccrual

Accruing TDRs

Not Past Due orImpaired

Total

Net Charge Offs(Recoveries)

Commercial, financial and agricultural

$                       30,779

$                       24,036

$              11,179

$   301,021

$              1,552

$            24,314,563

$ 24,683,130

$              69,942

Real estate – construction

3,831

185

532

1,616

76

1,999,107

2,005,347

(59)

Commercial real estate –  mortgage

13,939

41

2,375

110,632

3,492

12,943,694

13,074,173

2,250

Residential real estate – mortgage

74,796

22,329

4,778

153,078

60,537

13,187,809

13,503,327

1,280

Equity lines of credit

11,088

4,616

2,072

36,879

—

2,563,457

2,618,112

431

Equity loans

2,452

978

524

8,728

24,789

225,973

263,444

(59)

Credit card

10,372

8,092

20,037

—

—

897,646

936,147

16,398

Consumer – direct

35,762

23,075

17,773

7,348

7,360

2,297,040

2,388,358

63,992

Consumer – indirect

81,075

26,294

8,599

33,940

—

3,698,625

3,848,533

21,923

Total loans

$                     264,094

$                     109,646

$              67,869

$   653,242

$           97,806

$            62,127,914

$ 63,320,571

$           176,098

Loans held for sale

$                               —

$                               —

$                      —

$             —

$                    —

$                  134,314

$       134,314

$                      —

At or Quarter Ended June 30, 2019

30-59 Days Past Due

60-89 Days Past Due

90 Days or MorePast Due

Nonaccrual

Accruing TDRs

Not Past Due orImpaired

Total

Net Charge Offs(Recoveries)

Commercial, financial and agricultural

$                       49,037

$                         8,246

$              12,785

$   389,779

$            19,150

$            24,373,659

$ 24,852,656

$              45,916

Real estate – construction

3,159

114

532

2,097

107

1,976,637

1,982,646

(477)

Commercial real estate –  mortgage

4,716

3,283

360

107,137

3,687

12,850,522

12,969,705

61

Residential real estate – mortgage

74,767

25,226

6,681

154,247

59,130

13,084,079

13,404,130

1,523

Equity lines of credit

12,604

7,972

3,394

35,356

—

2,613,504

2,672,830

371

Equity loans

2,549

788

224

9,361

25,361

237,495

275,778

194

Credit card

11,119

7,007

18,762

—

—

841,213

878,101

16,436

Consumer – direct

36,657

22,986

14,786

6,926

5,252

2,390,021

2,476,628

57,142

Consumer – indirect

77,523

21,908

6,813

27,793

—

3,665,042

3,799,079

22,214

Total loans

$                     272,131

$                       97,530

$              64,337

$   732,696

$         112,687

$            62,032,172

$ 63,311,553

$           143,380

Loans held for sale

$                               —

$                               —

$                      —

$             —

$                    —

$                    90,537

$         90,537

$                      —

BBVA USA BANCSHARES, INC.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)

At or Quarter Ended March 31, 2019

30-59 Days Past Due

60-89 Days Past Due

90 Days or MorePast Due

Nonaccrual

Accruing TDRs

Not Past Due orImpaired

Total

Net Charge Offs(Recoveries)

Commercial, financial and agricultural

$                       54,216

$                       17,813

$                 8,144

$   461,029

$            18,910

$            24,721,818

$ 25,281,930

$                4,743

Real estate – construction

13,582

1,707

533

1,298

111

1,928,116

1,945,347

(1,410)

Commercial real estate –  mortgage

4,679

322

1,160

109,447

3,811

12,835,777

12,955,196

(27)

Residential real estate – mortgage

78,538

22,384

9,007

163,463

59,167

13,063,837

13,396,396

929

Equity lines of credit

15,355

4,035

1,471

34,999

—

2,660,447

2,716,307

575

Equity loans

2,920

1,050

34

9,840

26,188

248,137

288,169

(81)

Credit card

9,394

7,465

18,499

—

—

797,474

832,832

15,243

Consumer – direct

35,620

20,432

17,251

4,725

3,854

2,452,034

2,533,916

53,874

Consumer – indirect

78,610

24,600

7,781

21,843

—

3,674,618

3,807,452

27,666

Total loans

$                     292,914

$                       99,808

$              63,880

$   806,644

$         112,041

$            62,382,258

$ 63,757,545

$           101,512

Loans held for sale

$                               —

$                               —

$                      —

$             —

$                    —

$               1,273,821

$    1,273,821

$                      —

 

BBVA USA BANCSHARES, INC.

BALANCE SHEET (Unaudited)

(Dollars in Thousands)

2020

2019

March 31

December 31

September 30

June 30

March 31

Assets:

Cash and due from banks

$    1,033,733

$      1,149,734

$       1,117,458

$    1,027,400

$    1,143,541

Federal funds sold, securities purchased under agreements to resell and interest bearing deposits

4,479,535

5,788,964

5,356,141

4,773,761

4,864,920

Cash and cash equivalents

5,513,268

6,938,698

6,473,599

5,801,161

6,008,461

Trading account assets

1,009,130

473,976

564,000

440,098

306,123

Debt securities available for sale

6,344,816

7,235,305

7,612,590

9,010,950

9,297,018

Debt securities held to maturity, net

7,876,266

6,797,046

6,334,634

4,912,483

4,575,041

Loans held for sale

117,752

112,058

134,314

90,537

1,273,821

Loans

67,539,414

63,946,857

63,320,571

63,311,553

63,757,545

Allowance for loan losses

(1,351,072)

(920,993)

(942,191)

(977,660)

(966,022)

Net loans

66,188,342

63,025,864

62,378,380

62,333,893

62,791,523

Premises and equipment, net

1,068,741

1,087,698

1,085,635

1,105,819

1,125,676

Bank owned life insurance

754,409

750,224

746,819

745,130

740,764

Goodwill

2,328,296

4,513,296

4,983,296

4,983,296

4,983,296

Other assets

3,124,539

2,669,182

2,600,820

2,760,678

2,740,863

Total assets

$ 94,325,559

$   93,603,347

$     92,914,087

$ 92,184,045

$ 93,842,586

Liabilities:

Deposits:

Noninterest bearing

$ 20,418,504

$   21,850,216

$     21,019,303

$ 20,646,209

$ 20,403,716

Interest bearing

56,816,003

53,135,067

52,550,139

51,942,601

53,976,592

Total deposits

77,234,507

74,985,283

73,569,442

72,588,810

74,380,308

FHLB and other borrowings

3,790,137

3,690,044

3,709,949

4,052,969

4,011,160

Federal funds purchased and securities sold under agreements to repurchase

409,784

173,028

117,421

191,739

188,024

Other short-term borrowings

—

—

45

2,067

30,975

Accrued expenses and other liabilities

1,532,777

1,368,403

1,415,612

1,477,737

1,504,582

Total liabilities

82,967,205

80,216,758

78,812,469

78,313,322

80,115,049

Shareholder's Equity:

Preferred stock

229,475

229,475

229,475

229,475

229,475

Common stock — $0.01 par value

2,230

2,230

2,230

2,230

2,230

Surplus

14,039,572

14,043,727

14,359,966

14,364,527

14,542,166

Retained deficit

(3,305,226)

(917,227)

(585,859)

(768,290)

(927,877)

Accumulated other comprehensive income (loss)

362,339

(1,072)

66,009

13,508

(148,135)

Total BBVA USA Bancshares, Inc. shareholder's equity

11,328,390

13,357,133

14,071,821

13,841,450

13,697,859

Noncontrolling interests

29,964

29,456

29,797

29,273

29,678

Total shareholder's equity

11,358,354

13,386,589

14,101,618

13,870,723

13,727,537

Total liabilities and shareholder's equity

$ 94,325,559

$   93,603,347

$     92,914,087

$ 92,184,045

$ 93,842,586

 

BBVA USA BANCSHARES, INC.

INCOME STATEMENT (Unaudited)

(Dollars in Thousands)

Three Months Ended

2020

2019

March 31

December 31

September 30

June 30

March 31

Interest income:

Interest and fees on loans

$      715,476

$         738,140

$           771,245

$ 787,767

$ 800,488

Interest on debt securities available for sale

(1,492)

33,333

36,051

45,125

53,522

Interest on debt securities held to maturity

41,102

43,097

38,893

33,313

29,495

Interest on trading account assets

1,122

1,326

487

601

539

Interest and dividends on other earning assets

42,175

39,915

46,528

35,823

22,968

Total interest income

798,383

855,811

893,204

902,629

907,012

Interest expense:

Interest on deposits

164,742

189,345

203,979

202,478

182,354

Interest on FHLB and other borrowings

21,176

31,263

32,975

34,300

37,626

Interest on federal funds purchased and securities sold under agreements to repurchase

22,658

11,850

15,137

6,002

3,747

Interest on other short-term borrowings

352

199

72

100

196

Total interest expense

208,928

232,657

252,163

242,880

223,923

Net interest income

589,455

623,154

641,041

659,749

683,089

Provision for credit losses

356,991

119,505

140,629

155,018

182,292

Net interest income after provision for credit losses

232,464

503,649

500,412

504,731

500,797

Noninterest income:

Service charges on deposit accounts

61,531

64,585

65,143

61,731

58,908

Card and merchant processing fees

50,091

50,805

50,385

50,355

46,002

Investment services sales fees

34,407

28,130

29,287

31,333

26,696

Investment banking and advisory fees

26,731

15,720

28,324

20,758

18,857

Money transfer income

24,548

25,871

26,020

25,272

21,981

Asset management fees

11,904

11,532

11,405

11,867

10,767

Corporate and correspondent investment sales

10,717

14,263

11,799

5,607

6,892

Mortgage banking

17,451

9,048

8,204

5,870

4,937

Bank owned life insurance

4,625

4,584

3,508

4,803

4,584

Investment securities gains, net

19,139

—

21,003

—

8,958

Other

73,098

48,046

66,241

66,685

49,178

Total noninterest income

334,242

272,584

321,319

284,281

257,760

Noninterest expense:

Salaries, benefits and commissions

310,136

297,823

295,092

296,303

292,716

Equipment

64,681

64,826

63,908

62,638

65,394

Professional services

70,220

82,343

72,903

73,784

63,896

Net occupancy

39,843

43,302

42,241

40,116

40,941

Money transfer expense

17,136

17,951

18,005

17,290

14,978

Marketing

11,899

12,888

15,471

16,412

10,393

Communications

5,371

5,179

5,469

5,733

5,401

Goodwill impairment

2,185,000

470,000

—

—

—

Other

104,774

92,594

85,798

86,038

88,254

Total noninterest expense

2,809,060

1,086,906

598,887

598,314

581,973

Net (loss) income before income tax expense

(2,242,354)

(310,673)

222,844

190,698

176,584

Income tax (benefit) expense

(5,069)

20,032

39,899

30,512

35,603

Net (loss) income

(2,237,285)

(330,705)

182,945

160,186

140,981

Less: net income attributable to noncontrolling interests

501

663

514

599

556

Net (loss) income attributable to BBVA USA Bancshares, Inc.

$ (2,237,786)

$       (331,368)

$           182,431

$ 159,587

$ 140,425

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/bbva-usa-reports-first-quarter-2020-results-301050276.html

SOURCE BBVA USA


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