BBVA USA reports fourth quarter and full-year 2019 results

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- Revenue: Total revenue decreases 6 percent in the quarter driven by decline in net interest income while full-year revenue posts 1 percent increase fueled by solid noninterest income growth - Efficiency: Focus on expense management results in 2 percent increase in noninterest expenses both in the quarter and for the full year of 2019; combined with revenue growth results in record operating income(1) for the year at $1.3 billion, an increase of 3 percent - Goodwill impairment: Annual impairment test results in $470 million non-cash write-down of goodwill primarily as a result of the negative evolution of interest rates, particularly in the second half of 2019 - Credit quality: Nonperforming loan ratio drops for third consecutive quarter to 1.06 percent while coverage ratio rises to 136 percent. Net charge-offs show improvement from the preceding two quarters and allowance to loans ratio remains stout at 1.44 percent - Capital and liquidity: CET1 ratio(2) rises 49 basis points to 12.49 percent while the Liquidity Coverage Ratio (LCR) was 145 percent. Goodwill impairment has no impact on regulatory capital or liquidity

January 31, 2020 9:30 AM EST

HOUSTON, Jan. 31, 2020 /PRNewswire/ -- BBVA USA Bancshares, Inc., a Sunbelt-based bank holding company (BBVA USA), reported today a net loss of $331 million for the fourth quarter of 2019. Included in fourth quarter 2019 results is goodwill impairment (non-cash charge) totaling $470 million. Excluding the impact of this non-cash charge, adjusted net income1 for the quarter was $139 million, a 29 percent decrease from the $196 million earned in the fourth quarter of 2018. Return on average assets and return on average tangible equity1 for the fourth quarter of 2019 were (1.37) percent and (14.46) percent, respectively. On an adjusted basis, return on average assets1 was 0.58 percent and return on average tangible equity1 was 6.09 percent.

BBVA's new logo (PRNewsfoto/BBVA)

Net income for the full-year of 2019 totaled $153 million. Excluding the impact of the non-cash charge, adjusted net income1 was $623 million, an 18 percent decrease from the $763 million earned for the full-year of 2018. Return on average assets and return on average tangible equity1 for the full-year of 2019 were 0.16 percent and 1.73 percent, respectively. On an adjusted basis, return on average assets1 was 0.66 percent and return on average tangible equity1 was 7.03 percent.

The following table summarizes the impact of the goodwill impairment charge on fourth quarter and full-year 2019 results.

Impact of Goodwill Impairment

Dollars in thousands (unaudited)

Full-Year

4Q19

4Q18

% Change

2019

2018

% Change

NET INCOME (LOSS):

   As reported

$ (330,705)

$ 195,826

 NM 

%

$ 153,407

$ 763,429

(80)

%

   Adjusted1

139,295

195,826

(29)

623,407

763,429

(18)

ROA:

   As reported

(1.37)

%

0.85

%

0.16

%

0.85

%

   Adjusted1

0.58

0.85

0.66

0.85

ROTE:1

   As reported

(14.46)

%

9.27

%

1.73

%

9.28

%

   Adjusted

6.09

9.27

7.03

9.28

"Despite the challenging interest rate environment, we were able to post positive revenue growth, control expenses and achieve record operating income1 of $1.3 billion in 2019," said Javier Rodríguez Soler, president and CEO of BBVA USA. "While fourth quarter results were impacted by goodwill impairment caused by the decline in interest rates, this non-cash charge had no impact on our liquidity position, regulatory capital ratios, and the operations of our company or our ability to meet our customers' needs."

"As we look ahead, we are encouraged by the positive momentum experienced in the fourth quarter in terms of loan and deposit growth. Our digital transformation efforts also met with continued success and our mobile banking capabilities received further accolades, including recognition as an industry leader. Continuing to enhance our product offerings to meet our customers' needs while striving to deliver an amazing customer experience are key components to our plans in the year ahead."

Total revenue for the quarter was $896 million, down 6 percent from fourth quarter 2018 levels primarily as a result of a 9 percent decrease in net interest income offset, in part, by a 1 percent increase in noninterest income. The percent net interest margin in the fourth quarter of 2019 was 2.96 percent compared to 3.37 percent in the fourth quarter of 2018. For the full-year of 2019 total revenue (excluding securities gains) totaled $3.7 billion, up 1 percent from the prior year, as net interest income increased less than 1 percent and noninterest income (excluding securities gains) increased 5 percent. The percent net interest margin for 2019 was 3.17 percent compared to 3.30 percent for the full-year of 2018.

Noninterest income for the quarter totaled $273 million, a 1 percent increase from the fourth quarter of 2018. For the full-year of 2019, noninterest income (excluding securities gains) totaled $1.1 billion, up 5 percent from the full-year of 2018. Most of our fee-based business experienced positive growth including, card and merchant processing fees (+13 percent), investment banking and advisory fees (+8 percent), money transfer income (+8 percent), service charges on deposit accounts (+6 percent), mortgage banking income (+5 percent), asset management fees (+4 percent) and investment services sales fees (+2 percent). Gains on the sales of investment securities in 2019 totaled $30 million.

Maintaining strong expense controls continued to be a key area of strength during the year. Total noninterest expense, excluding the non-cash charge, during the quarter increased a modest 2 percent compared to a year ago and for the full-year of 2019 total noninterest expense, excluding goodwill impairment, was also up a modest 2 percent. The increase in revenue and focus on expense management resulted in record operating income1 for the year of $1.3 billion, a 3 percent increase over that obtained in the full-year of 2018.

Total loans at the end of the fourth quarter of 2019 were $64.1 billion, down 2 percent from $65.3 billion at the end of the fourth quarter of 2018. During the second quarter of 2019, approximately $1.1 billion of commercial loans held for sale were sold. Adjusting for the sale of these loans, the year-over-year decrease in total loans was less than 1 percent. While overall loan growth in the year was muted, during the fourth quarter total loans were up 4 percent (annualized) compared to third quarter 2019 levels.

Total deposits at the end of the fourth quarter of 2019 were $75.0 billion, a 4 percent increase from the $72.2 billion at the end of the fourth quarter of 2018 and an increase of 8 percent (annualized) on a linked quarter basis. Growth in lower cost deposits outpaced overall deposit growth with interest bearing transaction accounts (savings, money market and interest bearing checking accounts) up 13 percent compared to a year ago. At the same time, noninterest bearing deposits grew 8 percent compared to a year ago, while growth on a linked quarter basis was even more robust at 16 percent (annualized).The loan to deposit ratio ended the quarter at 85.43 percent compared to 90.42 percent at the end of 2018, and the LCR was 145 percent compared to 143 percent a year ago.

Nonperforming loans as a percentage of total loans ended the quarter at 1.06 percent compared to 1.14 percent at the end of the third quarter of 2019 and 1.24 percent at the end of the fourth quarter of 2018. Net charge-offs as a percentage of average total loans were 87 basis points in the quarter compared to 110 basis points in the third quarter of 2019 and 68 basis points in the fourth quarter of 2018. For the full-year of 2019, net charge-offs as a percentage of average total loans was 88 basis points compared to 51 basis points for the full-year 2018.

Provision expense in the quarter was $120 million compared to $141 million in the third quarter of 2019 and $122 million in the fourth quarter of 2018. The allowance for loan losses as a percentage of total loans ended the quarter at 1.44 percent compared to 1.49 percent at the end of the third quarter of 2019 and 1.36 percent at the end of the fourth quarter of 2018. The coverage ratio of nonperforming loans was 136 percent at the end of the quarter compared to 131 percent at the end of the third quarter of 2019 and 109 percent at the end of the fourth quarter of 2018.

Total shareholder's equity at the end of the fourth quarter of 2019 totaled $13.4 billion, a 1 percent decrease from $13.5 billion at the end of the fourth quarter of 2018. The CET1 ratio2 stood at 12.49 percent at the end of the fourth quarter of 2019, down 40 basis points from the end of the third quarter of 2019 and up 49 basis points from the end of the fourth quarter of 2018. The decrease in shareholder's equity primarily reflects dividend payments to its sole shareholder offset, in part, by an increase in retained earnings and accumulated other comprehensive income. The decrease in the CET1 ratio2 on a linked quarter basis primarily reflects a dividend payment during the quarter as goodwill impairment had no impact on regulatory capital and regulatory capital ratios.

During the fourth quarter, Business Insider named BBVA USA as a leader in its Business Insider Intelligence 2019 Mobile Banking Competitive Edge study, the third year the financial and business news company has conducted the proprietary research and the second year BBVA USA has been evaluated. BBVA USA was one of just five banks named as an overall leader in the research, which evaluated the banking features of the top 20 US banks. BBVA USA's mobile offering garnered the designation of Leader in Offering Desirable Mobile Banking Features, a title reserved for the top five. The bank's mobile app also came in first in the sub-categories of Account Management and Transfers, with titles that include Most Desirable Mobile Banking Features for Account Management and Most Desirable Mobile Banking Features for Transfers, respectively.

BBVA USA also pledged to put nearly $15.5 billion in lending, investments and services toward supporting low- and moderate-income individuals and neighborhoods in the US over the next six years, renewing its 2014 5-year $11 billion commitment to boost economic development across all the communities in its footprint.

Over the next six years, the bank plans to originate $3 billion in mortgage loans to low- and moderate-income (LMI) homebuyers and in LMI neighborhoods, nearly $7.3 billion in small business lending, $4 billion in community development lending, and to make more than $1.1 billion in community development investments. The plan was developed with input from stakeholders on the bank's 20-member advisory board, established in 2014 to provide input, guidance and feedback on its community giving initiatives.

1 Operating income, adjusted net income, 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 December 31, 2019, 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 March 28, 2019, BBVA filed its annual report on Form 20-F for the year ended December 31, 2018, 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, 2018, 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 8th nationally in terms of dollar volume of SBA loans originated in fiscal year 2018.

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, 2019, as updated by our subsequent SEC filings.

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in thousands)

Three Months Ended  December 31,

%

Years Ended December 31,

%

2019

2018

 Change 

2019

2018

 Change 

EARNINGS SUMMARY

Net interest income

$        623,154

$        682,188

(9)

$     2,607,033

$     2,606,578

—

Noninterest income [a]

272,584

270,606

1

1,105,983

1,056,909

5

Total revenue [a]

895,738

952,794

(6)

3,713,016

3,663,487

1

Investment securities gain, net

—

—

—

29,961

—

 NM 

Provision for loan losses

119,505

122,147

(2)

597,444

365,420

63

Goodwill impairment

470,000

—

 NM 

470,000

—

 NM 

Noninterest expense

616,906

601,992

2

2,396,080

2,349,960

2

Pretax (loss) income

(310,673)

228,655

 NM 

279,453

948,107

(71)

Income tax expense

20,032

32,829

(39)

126,046

184,678

(32)

Net (loss) income

$       (330,705)

$        195,826

 NM 

$        153,407

$        763,429

(80)

Adjusted net income [b]

$        139,295

$        195,826

(29)

$        623,407

$        763,429

(18)

SELECTED RATIOS

Return on average assets

(1.37)%

0.85 %

0.16 %

0.85 %

Return on average assets- adjusted [b]

0.58

0.85

0.66

0.85

Return on average tangible equity [b]

(14.46)

9.27

1.73

9.28

Return on average tangible equity- adjusted [b]

6.09

9.27

7.03

9.28

Efficiency ratio [b]

67.92

62.31

63.64

63.24

Average common equity to average assets

14.44

14.41

14.46

14.52

Average loans to average total deposits

86.29

91.88

88.04

90.89

Common equity tier 1 capital (CET1) [c]

12.49

12.00

12.49

12.00

Tier I capital ratio [c]

12.83

12.33

12.83

12.33

Total capital ratio [c]

14.98

14.49

14.98

14.49

Leverage ratio [c]

9.70

10.03

9.70

10.03

 

Average for Three Months

Average for Year

Ending Balance

Ended December 31,

%

Ended December 31,

%

December 31,

%

2019

2018

 Change 

2019

2018

 Change 

2019

2018

 Change 

BALANCE SHEET HIGHLIGHTS

Total loans

$  63,956,453

$  65,287,838

(2)

$  64,275,473

$  63,761,869

1

$  64,058,915

$  65,255,320

(2)

Total debt securities

13,792,727

13,614,503

1

13,725,672

13,406,533

2

14,032,351

13,866,829

1

Earning assets

85,135,405

81,661,049

4

83,839,035

80,237,817

4

84,712,261

81,831,522

4

Total assets

95,754,954

91,337,365

5

94,293,422

89,576,037

5

93,603,347

90,947,174

3

Noninterest bearing demand deposits

21,288,781

20,825,633

2

20,631,434

21,167,441

(3)

21,850,216

20,183,876

8

Interest bearing transaction accounts

39,773,454

34,783,054

14

37,595,208

34,197,814

10

41,081,638

36,277,316

13

Total transaction accounts

61,062,235

55,608,687

10

58,226,642

55,365,255

5

62,931,854

56,461,192

11

Total deposits

74,122,266

71,057,556

4

73,007,106

70,149,887

4

74,985,283

72,167,987

4

Shareholder's equity

14,090,315

13,420,931

5

13,894,163

13,266,930

5

13,386,589

13,512,529

(1)

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

[b]  Non-GAAP 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)

2019

2018

December 31

September 30

June 30

March 31

December 31

NONPERFORMING ASSETS

Nonaccrual loans [a]

$      606,843

$       653,242

$732,696

$806,644

$      751,486

Loans 90 days or more past due [b]

71,126

67,869

64,337

63,880

59,549

TDRs 90 days or more past due

414

588

304

370

411

Total nonperforming loans [a]

678,383

721,699

797,337

870,894

811,446

Foreclosed real estate

20,833

17,381

13,752

14,983

16,869

Other repossessed assets

10,930

17,584

13,040

11,225

12,031

Total nonperforming assets

$      710,146

$       756,664

$824,129

$897,102

$      840,346

TDRs accruing and past due less than 90 days

$        97,901

$         97,218

$112,383

$111,671

$      109,190

Total nonperforming loans as a % of loans

1.06 %

1.14 %

1.26 %

1.34 %

1.24 %

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

1.11

1.19

1.30

1.38

1.29

Three Months Ended

2019

2018

December 31

September 30

June 30

March 31

December 31

ALLOWANCE FOR LOAN LOSSES

Balance at beginning of period

$      942,191

$       977,660

$966,022

$885,242

$      875,393

Net charge-offs (NCO)

140,703

176,098

143,380

101,512

112,298

Provision for loan losses

119,505

140,629

155,018

182,292

122,147

Balance at end of period

$      920,993

$       942,191

$977,660

$966,022

$      885,242

Allowance for loan losses as a % of total loans

1.44 %

1.49 %

1.54 %

1.52 %

1.36 %

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

135.76

130.55

122.62

110.92

109.09

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

129.69

124.52

118.63

107.68

105.34

Annualized as a % of average loans:

NCO - QTD

0.87

1.10

0.90

0.63

0.68

NCO - YTD

0.88

0.88

0.77

0.63

0.51

[a]  Includes loans held for sale.

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

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

 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)

Three Months Ended December 31,

2019

2018

Average Balance

Income/ Expense

Yield/ Rate

Average Balance

Income/ Expense

Yield/ Rate

YIELD/RATE ANALYSIS

(Taxable Equivalent Basis)

Assets

Earning assets:

Loans

$63,956,453

$749,428

4.65 %

$65,287,838

$799,829

4.86 %

Debt securities available for sale [a]

7,223,333

33,333

1.83

11,186,986

59,029

2.09

Debt securities held to maturity

6,576,786

44,207

2.67

2,740,315

21,376

3.09

Other earning assets [b]

7,386,225

41,241

2.22

2,758,708

20,044

2.88

Total earning assets [a]

85,142,797

868,209

4.05

81,973,847

900,278

4.36

Allowance for loan losses

(944,773)

(886,426)

Unrealized loss on debt securities available for sale

(7,392)

(312,798)

Other assets

11,564,322

10,562,742

Total assets

$95,754,954

$91,337,365

Liabilities and Shareholder's Equity

Interest bearing liabilities:

Interest bearing demand deposits

$  9,329,342

23,648

1.01

$  7,963,379

15,349

0.76

Savings and money market accounts

30,444,112

93,114

1.21

26,819,675

72,530

1.07

Certificates and other time deposits

13,060,031

72,583

2.20

15,448,869

75,843

1.95

Total interest bearing deposits

52,833,485

189,345

1.42

50,231,923

163,722

1.29

FHLB and other borrowings

3,701,993

31,263

3.35

4,664,076

36,573

3.11

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

1,137,573

11,850

4.13

138,953

3,849

10.99

Other short-term borrowings

11,189

199

7.06

65,994

591

3.55

Total interest bearing liabilities

57,684,240

232,657

1.60

55,100,946

204,735

1.47

Noninterest bearing deposits

21,288,781

20,825,633

Other noninterest bearing liabilities

2,691,618

1,989,855

Total liabilities

81,664,639

77,916,434

Shareholder's equity

14,090,315

13,420,931

Total liabilities and shareholder's equity

$95,754,954

$91,337,365

Net interest income/ net interest spread

635,552

2.45 %

695,543

2.89 %

Net yield on earning assets

2.96 %

3.37 %

Total taxable equivalent adjustment

12,398

13,355

Net interest income

$623,154

$682,188

[a] Excludes adjustment for market valuation.

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

 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)

Years Ended December 31,

2019

2018

Average Balance

Income/ Expense

Yield/ Rate

AverageBalance

Income/

Expense

Yield/ Rate

YIELD/RATE ANALYSIS

(Taxable Equivalent Basis)

Assets

Earning assets:

Loans

$64,275,473

$3,144,471

4.89 %

$63,761,869

$2,960,170

4.64 %

Debt securities available for sale [a]

8,520,287

168,031

1.97

11,390,313

222,627

1.95

Debt securities held to maturity

5,281,585

149,505

2.83

2,298,737

67,347

2.93

Other earning assets [b]

5,837,890

148,187

2.54

3,069,415

66,792

2.18

Total earning assets [a]

83,915,235

3,610,194

4.30

80,520,334

3,316,936

4.12

Allowance for loan losses

(950,306)

(859,475)

Unrealized loss on debt securities available for sale

(76,200)

(282,517)

Other assets

11,404,693

10,197,695

Total assets

$94,293,422

$89,576,037

Liabilities and Shareholder's Equity

Interest bearing liabilities:

Interest bearing demand deposits

$  9,048,948

95,709

1.06

$  7,950,561

48,599

0.61

Savings and money market accounts

28,546,260

354,286

1.24

26,247,253

224,009

0.85

Certificates and other time deposits

14,780,464

328,161

2.22

14,784,632

244,682

1.65

Total interest bearing deposits

52,375,672

778,156

1.49

48,982,446

517,290

1.06

FHLB and other borrowings

3,968,094

136,164

3.43

4,095,054

130,372

3.18

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

857,922

36,736

4.28

109,852

8,953

8.15

Other short-term borrowings

14,963

567

3.79

68,423

2,081

3.04

Total interest bearing liabilities

57,216,651

951,623

1.66

53,255,775

658,696

1.24

Noninterest bearing deposits

20,631,434

21,167,441

Other noninterest bearing liabilities

2,551,174

1,885,891

Total liabilities

80,399,259

76,309,107

Shareholder's equity

13,894,163

13,266,930

Total liabilities and shareholder's equity

$94,293,422

$89,576,037

Net interest income/ net interest spread

2,658,571

2.64 %

2,658,240

2.88 %

Net yield on earning assets

3.17 %

3.30 %

Total taxable equivalent adjustment

51,538

51,662

Net interest income

$2,607,033

$2,606,578

[a] Excludes adjustment for market valuation.

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

 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)

Year Ended

Three Months Ended

December 31,

%

2019

2018

2019

2018

Change

December 31

September 30

June 30

March 31

December 31

NONINTEREST INCOME

Service charges on deposit accounts

$   250,367

$   236,673

6

$        64,585

$         65,143

$  61,731

$  58,908

$        61,606

Card and merchant processing fees

197,547

174,927

13

50,805

50,385

50,355

46,002

46,982

Investment services sales fees

115,446

112,652

2

28,130

29,287

31,333

26,696

24,476

Investment banking and advisory fees

83,659

77,684

8

15,720

28,324

20,758

18,857

15,286

Money transfer income

99,144

91,681

8

25,871

26,020

25,272

21,981

23,632

Asset management fees

45,571

43,811

4

11,532

11,405

11,867

10,767

10,909

Corporate and correspondent investment sales

38,561

51,675

(25)

14,263

11,799

5,607

6,892

10,774

Mortgage banking income

28,059

26,833

5

9,048

8,204

5,870

4,937

3,755

Bank owned life insurance

17,479

17,822

(2)

4,584

3,508

4,803

4,584

4,635

Other

230,150

223,151

3

48,046

66,241

66,685

49,178

68,551

1,105,983

1,056,909

5

272,584

300,316

284,281

248,802

270,606

Investment securities gains, net

29,961

—

 NM 

—

21,003

—

8,958

—

Total noninterest income

$1,135,944

$1,056,909

7

$      272,584

$       321,319

$284,281

$257,760

$      270,606

NONINTEREST EXPENSE

Salaries, benefits and commissions

$1,181,934

$1,154,791

2

$      297,823

$       295,092

$296,303

$292,716

$      285,820

Professional services

292,926

277,154

6

82,343

72,903

73,784

63,896

79,529

Equipment

256,766

257,565

—

64,826

63,908

62,638

65,394

66,806

Net occupancy

166,600

166,768

—

43,302

42,241

40,116

40,941

41,161

Money transfer expense

68,224

62,138

10

17,951

18,005

17,290

14,978

15,995

Marketing

55,164

48,866

13

12,888

15,471

16,412

10,393

15,884

Communications

21,782

30,582

(29)

5,179

5,469

5,733

5,401

9,241

Other

352,684

352,096

—

92,594

85,798

86,038

88,254

87,556

2,396,080

2,349,960

2

616,906

598,887

598,314

581,973

601,992

Goodwill impairment

470,000

—

 NM 

470,000

—

—

—

—

Total noninterest expense

$2,866,080

$2,349,960

22

$   1,086,906

$       598,887

$598,314

$581,973

$      601,992

NM = Not meaningful

 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)

Year Ended

Three Months Ended

December 31,

2019

2018

2019

2018

December 31

September 30

June 30

March 31

December 31

NON-GAAP RECONCILIATION

Computation of Operating Income:

Net interest income (GAAP)

$     2,607,033

$     2,606,578

$        623,154

$        641,041

$        659,749

$        683,089

$        682,188

Plus: noninterest income (GAAP)

1,135,944

1,056,909

272,584

321,319

284,281

257,760

270,606

Less: noninterest expense (GAAP)

2,866,080

2,349,960

1,086,906

598,887

598,314

581,973

601,992

Plus: goodwill impairment (GAAP)

470,000

—

470,000

—

—

—

—

Operating income (non-GAAP)

$     1,346,897

$     1,313,527

$        278,832

$        363,473

$        345,716

$        358,876

$        350,802

Computation of Average Tangible Equity:

Total stockholder's equity (average) (GAAP)

$   13,894,163

$   13,266,930

$   14,090,315

$   14,056,939

$   13,782,011

$   13,640,655

$   13,420,931

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

5,026,723

5,039,974

5,016,935

5,023,480

5,031,129

5,035,591

5,039,847

Average tangible equity (non-GAAP) [B]

$     8,867,440

$     8,226,956

$     9,073,380

$     9,033,459

$     8,750,882

$     8,605,064

$     8,381,084

Net income (loss) (GAAP) [A]

$        153,407

$        763,429

$       (330,705)

$        182,945

$        160,186

$        140,981

$        195,826

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

1.73 %

9.28 %

(14.46)%

8.03 %

7.34 %

6.64 %

9.27 %

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

Net income (loss) (GAAP)

$        153,407

$        763,429

$       (330,705)

$        182,945

$        160,186

$        140,981

$        195,826

Plus: goodwill impairment (GAAP)

470,000

—

470,000

—

—

—

—

Adjusted net income (non-GAAP) [C]

$        623,407

$        763,429

$        139,295

$        182,945

$        160,186

$        140,981

$        195,826

Average assets (GAAP) [D]

$  94,293,422

$  89,576,037

$  95,754,954

$  94,942,456

$  93,452,839

$  92,985,876

$  91,337,365

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

0.66 %

0.85 %

0.58 %

0.76 %

0.69 %

0.61 %

0.85 %

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

7.03

9.28

6.09

8.03

7.34

6.64

9.27

Computation of Efficiency Ratio:

Noninterest expense (GAAP)

$     2,866,080

$     2,349,960

$     1,086,906

$        598,887

$        598,314

$        581,973

$        601,992

Less: securities and goodwill impairment (GAAP)

470,215

592

470,102

—

113

—

—

Total expense (GAAP) [E]

$     2,395,865

$     2,349,368

$        616,804

$        598,887

$        598,201

$        581,973

$        601,992

Net interest income, taxable equivalent basis 

$     2,658,571

$     2,658,240

$        635,552

$        653,926

$        672,807

$        696,286

$        695,543

Plus: noninterest income (GAAP)

1,135,944

1,056,909

272,584

321,319

284,281

257,760

270,606

Less: investment securities gains, net (GAAP)

29,961

—

—

21,003

—

8,958

—

Total revenue [F]

$     3,764,554

$     3,715,149

$        908,136

$        954,242

$        957,088

$        945,088

$        966,149

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

63.64 %

63.24 %

67.92 %

62.76 %

62.50 %

61.58 %

62.31 %

 

BBVA USA BANCSHARES, INC.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)

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

$                      —

At or Quarter Ended September 30, 2019

30-59 Days Past Due

60-89 Days Past Due

90 Days or More Past 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

$                      —

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

$                      —

At or Quarter Ended December 31, 2018

30-59 Days Past Due

60-89 Days Past Due

90 Days or More Past Due

Nonaccrual

Accruing TDRs

Not Past Due orImpaired

Total

Net Charge Offs(Recoveries)

Commercial, financial and agricultural

$                       17,257

$                       11,784

$                 8,114

$   400,389

$            18,926

$     26,105,849

$ 26,562,319

$              38,786

Real estate – construction

218

8,849

544

2,851

116

1,984,959

1,997,537

(24)

Commercial real estate –  mortgage

11,678

3,375

2,420

110,144

3,661

12,885,518

13,016,796

470

Residential real estate – mortgage

80,366

29,852

5,927

167,099

57,446

13,081,466

13,422,156

247

Equity lines of credit

14,007

5,109

2,226

37,702

—

2,688,173

2,747,217

(656)

Equity loans

3,471

843

180

10,939

26,768

256,413

298,614

(35)

Credit card

9,516

7,323

17,011

—

—

784,458

818,308

11,231

Consumer – direct

37,336

19,543

13,336

4,528

2,684

2,476,161

2,553,588

38,508

Consumer – indirect

100,434

32,172

9,791

17,834

—

3,609,788

3,770,019

23,771

Total loans

$                     274,283

$                     118,850

$              59,549

$   751,486

$         109,601

$     63,872,785

$ 65,186,554

$           112,298

Loans held for sale

$                                —

$                                —

$                       —

$              —

$                    —

$             68,766

$         68,766

$                      —

 

BBVA USA BANCSHARES, INC.

BALANCE SHEET (Unaudited)

(Dollars in Thousands)

2019

2018

December 31

September 30

June 30

March 31

December 31

Assets:

Cash and due from banks

$      1,149,734

$      1,117,458

$      1,027,400

$      1,143,541

$      1,217,319

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

5,788,964

5,356,141

4,773,761

4,864,920

2,115,307

Cash and cash equivalents

6,938,698

6,473,599

5,801,161

6,008,461

3,332,626

Trading account assets

473,976

564,000

440,098

306,123

237,656

Debt securities available for sale

7,235,305

7,612,590

9,010,950

9,297,018

10,981,216

Debt securities held to maturity

6,797,046

6,334,634

4,912,483

4,575,041

2,885,613

Loans held for sale

112,058

134,314

90,537

1,273,821

68,766

Loans

63,946,857

63,320,571

63,311,553

63,757,545

65,186,554

Allowance for loan losses

(920,993)

(942,191)

(977,660)

(966,022)

(885,242)

Net loans

63,025,864

62,378,380

62,333,893

62,791,523

64,301,312

Premises and equipment, net

1,087,698

1,085,635

1,105,819

1,125,676

1,152,958

Bank owned life insurance

750,224

746,819

745,130

740,764

736,171

Goodwill

4,513,296

4,983,296

4,983,296

4,983,296

4,983,296

Other assets

2,669,182

2,600,820

2,760,678

2,740,863

2,267,560

Total assets

$    93,603,347

$    92,914,087

$    92,184,045

$    93,842,586

$    90,947,174

Liabilities:

Deposits:

Noninterest bearing

$    21,850,216

$    21,019,303

$    20,646,209

$    20,403,716

$    20,183,876

Interest bearing

53,135,067

52,550,139

51,942,601

53,976,592

51,984,111

Total deposits

74,985,283

73,569,442

72,588,810

74,380,308

72,167,987

FHLB and other borrowings

3,690,044

3,709,949

4,052,969

4,011,160

3,987,590

Federal funds purchased and securities sold under agreements to repurchase

173,028

117,421

191,739

188,024

102,275

Other short-term borrowings

—

45

2,067

30,975

—

Accrued expenses and other liabilities

1,368,403

1,415,612

1,477,737

1,504,582

1,176,793

Total liabilities

80,216,758

78,812,469

78,313,322

80,115,049

77,434,645

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

14,043,727

14,359,966

14,364,527

14,542,166

14,545,849

Retained deficit

(917,227)

(585,859)

(768,290)

(927,877)

(1,107,198)

Accumulated other comprehensive income (loss)

(1,072)

66,009

13,508

(148,135)

(186,848)

Total BBVA USA Bancshares, Inc. shareholder's equity

13,357,133

14,071,821

13,841,450

13,697,859

13,483,508

Noncontrolling interests

29,456

29,797

29,273

29,678

29,021

Total shareholder's equity

13,386,589

14,101,618

13,870,723

13,727,537

13,512,529

Total liabilities and shareholder's equity

$    93,603,347

$    92,914,087

$    92,184,045

$    93,842,586

$    90,947,174

 

BBVA USA BANCSHARES, INC.

INCOME STATEMENT (Unaudited)

(Dollars in Thousands)

Three Months Ended

2019

2018

December 31

September 30

June 30

March 31

December 31

Interest income:

Interest and fees on loans

$       738,140

$        771,245

$ 787,767

$ 800,488

$       787,858

Interest on debt securities available for sale

33,333

36,051

45,125

53,522

59,028

Interest on debt securities held to maturity

43,097

38,893

33,313

29,495

19,993

Interest on trading account assets

1,326

487

601

539

704

Interest and dividends on other earning assets

39,915

46,528

35,823

22,968

19,340

Total interest income

855,811

893,204

902,629

907,012

886,923

Interest expense:

Interest on deposits

189,345

203,979

202,478

182,354

163,722

Interest on FHLB and other borrowings

31,263

32,975

34,300

37,626

36,573

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

11,850

15,137

6,002

3,747

3,849

Interest on other short-term borrowings

199

72

100

196

591

Total interest expense

232,657

252,163

242,880

223,923

204,735

Net interest income

623,154

641,041

659,749

683,089

682,188

Provision for loan losses

119,505

140,629

155,018

182,292

122,147

Net interest income after provision for loan losses

503,649

500,412

504,731

500,797

560,041

Noninterest income:

Service charges on deposit accounts

64,585

65,143

61,731

58,908

61,606

Card and merchant processing fees

50,805

50,385

50,355

46,002

46,982

Investment services sales fees

28,130

29,287

31,333

26,696

24,476

Investment banking and advisory fees

15,720

28,324

20,758

18,857

15,286

Money transfer income

25,871

26,020

25,272

21,981

23,632

Asset management fees

11,532

11,405

11,867

10,767

10,909

Corporate and correspondent investment sales

14,263

11,799

5,607

6,892

10,774

Mortgage banking income

9,048

8,204

5,870

4,937

3,755

Bank owned life insurance

4,584

3,508

4,803

4,584

4,635

Investment securities gains, net

—

21,003

—

8,958

—

Other

48,046

66,241

66,685

49,178

68,551

Total noninterest income

272,584

321,319

284,281

257,760

270,606

Noninterest expense:

Salaries, benefits and commissions

297,823

295,092

296,303

292,716

285,820

Professional services

82,343

72,903

73,784

63,896

79,529

Equipment

64,826

63,908

62,638

65,394

66,806

Net occupancy

43,302

42,241

40,116

40,941

41,161

Money transfer expense

17,951

18,005

17,290

14,978

15,995

Marketing

12,888

15,471

16,412

10,393

15,884

Communications

5,179

5,469

5,733

5,401

9,241

Goodwill impairment

470,000

—

—

—

—

Other

92,594

85,798

86,038

88,254

87,556

Total noninterest expense

1,086,906

598,887

598,314

581,973

601,992

Net (loss) income before income tax expense

(310,673)

222,844

190,698

176,584

228,655

Income tax expense

20,032

39,899

30,512

35,603

32,829

Net (loss) income

(330,705)

182,945

160,186

140,981

195,826

Less: net income attributable to noncontrolling interests

663

514

599

556

499

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

$     (331,368)

$        182,431

$ 159,587

$ 140,425

$       195,327

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/bbva-usa-reports-fourth-quarter-and-full-year-2019-results-300996870.html

SOURCE BBVA USA


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