BBVA USA reports third quarter 2020 results
10/30/2020 - 09:43 AM
HOUSTON , Oct. 30, 2020 /PRNewswire/ -- BBVA USA Bancshares, Inc., a Sunbelt-based bank holding company (BBVA USA ), reported today net income of $166 million for the third quarter of 2020 compared to a net loss of $124 million in the second quarter of 2020 and net income of $183 million in the third quarter of 2019. Return on average assets and return on average tangible equity1 for the third quarter of 2020 were 0.63 percent and 7.32 percent, respectively.
For the first nine months of 2020, the company reported a net loss of $2.2 billion . Included in the first quarter of 2020 was a non-cash, goodwill impairment charge of $2.2 billion that reflected the drastic change in macroeconomic conditions and forecasts brought about by the COVID-19 pandemic and subsequent decline in interest rates and oil prices. Excluding the impact of this non-cash charge, the adjusted net loss1 for the first nine months of 2020 was $10 million , further reflecting the decline in interest rates and higher provision expense necessary to reflect the economic and business disruption caused by the pandemic.
"During the third quarter we delivered solid results while continuing to successfully navigate the challenges to our customers, communities and our employees brought about by the Covid-19 pandemic," said Javier Rodríguez Soler, president and CEO of BBVA USA .
Total revenue for the third quarter was $927 million , up 21 percent (annualized) from second quarter 2020 levels and down 2 percent from third quarter 2019 levels. Net interest income in the quarter totaled $642 million compared to $612 million in the second quarter of 2020 and $641 million in the third quarter of 2019. The percent net interest margin for the third quarter of 2020 was 2.68 percent compared to 2.66 percent in the second quarter of 2020 and 3.07 percent in the third quarter of 2019. The decline in the percent net interest margin from a year ago reflects a lower interest rate environment, the subsequent repricing of variable rate loans, offset in part, by efforts to reduce deposit costs.
Noninterest income (excluding securities gains) for the quarter totaled $285 million compared to $269 million in the second quarter of 2020 and $300 million for the third quarter of 2019. While down from a year ago, the increase in noninterest income on a linked quarter basis was driven by service charges on deposit accounts (+$10 million ) and card and merchant processing fees (+$5 million ) reflecting higher levels of business activity, albeit still below pre-pandemic levels. Other noninterest income increased on a linked quarter basis, primarily as a result of a valuation adjustment to investments held by our small business investment company that negatively impacted second quarter 2020 levels. While investment banking and advisory fees and mortgage banking declined from second quarter levels, both business lines reflected double digit increases compared to the year ago quarter.
During the third quarter no gains or losses were recorded on investment securities while $3 million of investment securities gains were recorded in the second quarter of 2020 and $21 million was recorded in the third quarter of 2019.
Total noninterest expense was $596 million compared to $579 million in the second quarter of 2020 and $599 million in the third quarter of 2019. While salaries, benefits and commissions increased on a linked quarter basis, compared to the year ago quarter the increase was only 1 percent. Equipment expense also increased on a linked quarter basis and was up 8 percent compared to a year ago. Professional services were flat compared to the second quarter of 2020 while up 7 percent compared to the third quarter of 2019. Operating income1 in the quarter totaled $331 million , up 34 percent (annualized) from the second quarter of 2020 and down 9 percent from the third quarter 2019 levels.
Total loans at the end of the third quarter of 2020 were $66.4 billion , down 12 percent (annualized) from $68.5 billion at the end of the second quarter of 2020 and up 5 percent from the $63.5 billion at the end of the third quarter of 2019. Commercial loans associated with the energy sector dropped to $2.5 billion at the end of the third quarter of 2020 compared to $3.0 billion at the end of the second quarter of 2020. During the quarter, newly funded loans totaled $3.5 billion bringing the total for the first nine months of 2020 to $15.8 billion , a 41 percent increase compared to the same time period a year ago.
Deposit growth continued in the quarter with total deposits ending the quarter at $86.4 billion , up 4 percent (annualized) from the second quarter of 2020 and up $12.8 billion or 17 percent compared to the third quarter of 2019. Low-cost deposits were a key driver of deposit growth as noninterest bearing deposits ended the quarter at $26.8 billion , up 13 percent (annualized) on a linked quarter basis and up $5.8 billion or 28 percent compared to the third quarter of 2019.
As a result of deposit growth outpacing loan growth, the loan to deposit ratio ended the third quarter of 2020 at 76.9 percent compared to 80.2 percent at the end of the second quarter of 2020 and 86.3 percent at the end of the third quarter of 2019. BBVA USA continues to maintain a strong liquidity position with the LCR at 144 percent, unchanged from the levels recorded in both the second quarter of 2020 and the third quarter of 2019.
After two quarters of increased provision expense recorded to primarily address the impact of the COVID-19 pandemic and corresponding impact on economic conditions, provision for credit losses totaled $151 million in the quarter and exceeded net charge-offs by $50 million . Net charge-offs as a percentage of average total loans were 59 basis points in the quarter compared to 72 basis points in the second quarter of 2020 and 110 basis points in the third quarter of 2019. The allowance for loan losses as a percentage of total loans at the end of the quarter rose to 2.73 percent compared to 2.57 percent at the end of the second quarter of 2020 and 1.49 percent in the year ago quarter.
Nonperforming loans as a percentage of total loans ended the third quarter of 2020 at 2.00 percent, up from the 1.21 percent at the end of the second quarter of 2020 and 1.14 percent at the end of the third quarter of 2019. The increase in nonperforming loans on a linked quarter basis was primarily attributed to an increase in nonaccrual loans associated with the commercial loan portfolio (+$271 million ), as well as increases in the commercial real estate – mortgage (+$158 million ) and residential real estate – mortgage (+$35 million ) portfolios. The coverage ratio of nonperforming loans ended the quarter at 136 percent compared to 211 percent at the end of the second quarter of 2020 and 131 percent at the end of the third quarter of 2019.
Total shareholder's equity at the end of the third quarter of 2020 totaled $11.4 billion compared to $11.3 billion at the end of the second quarter of 2020 and $14.1 billion at the end of the third quarter of 2019. Total tangible shareholder's equity1 totaled $9.0 billion at the end of the third quarter of 2020 compared to $8.9 billion at the end of the second quarter of 2020 and $9.1 billion at the end of the third quarter of 2019. The CET12 ratio ended the quarter at 12.79 percent compared to 12.18 percent at the end of the second quarter of 2020 and 12.89 percent at the end of the third quarter of 2019. All of BBVA USA's regulatory capital ratios2 continue to exceed the requirements under "well-capitalized" guidelines.
During the quarter, Global Finance recognized BBVA USA as one of the World's Best Corporate/Institutional Digital Banks in North America for 2020 , naming us a winner in the subcategories of Best Mobile Adaptive Site and Best Mobile Banking App.
1 Operating income and adjusted net loss 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 September 30, 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 Group BBVA (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 ed.bilek@bbva.com .
BBVA USA In the U.S., BBVA is a Sunbelt-based financial institution that operates 637 branches, including 328 in Texas, 88 in Alabama, 63 in Arizona, 61 in California, 43 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 Statements Certain 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 September 30,
%
Nine Months Ended September 30,
%
2020
2019
Change
2020
2019
Change
EARNINGS SUMMARY
Net interest income
$ 641,850
$ 641,041
—
$ 1,843,322
$ 1,983,879
(7)
Noninterest income [a]
284,660
300,316
(5)
868,640
833,399
4
Total revenue [a]
926,510
941,357
(2)
2,711,962
2,817,278
(4)
Investment securities gain, net
—
21,003
NM
22,616
29,961
(25)
Provision for credit losses
150,977
140,629
7
1,047,427
477,939
119
Goodwill impairment
—
—
—
2,185,000
—
NM
Noninterest expense
595,628
598,887
(1)
1,799,138
1,779,174
1
Pretax (loss) income
179,905
222,844
(19)
(2,296,987)
590,126
(489)
Income tax (benefit) expense
13,664
39,899
(66)
(101,506)
106,014
(196)
Net (loss) income
$ 166,241
$ 182,945
(9)
$ (2,195,481)
$ 484,112
(554)
Adjusted net (loss) income [b]
$ 166,241
$ 182,945
(9)
$ (10,481)
$ 484,112
(102)
SELECTED RATIOS
Return on average assets
0.63 %
0.76 %
(2.90)%
0.69 %
Return on average assets- adjusted [b]
0.63
0.76
(0.01)
0.69
Return on average tangible equity [b]
7.32
8.03
(32.36)
7.36
Return on average tangible equity- adjusted [b]
7.32
8.03
(0.15)
7.36
Efficiency ratio [b]
63.55
62.76
65.52
62.28
Average common equity to average assets
10.68
14.53
11.76
14.47
Average loans to average total deposits
79.53
87.17
82.85
88.64
Common equity tier I capital (CET1) [c]
12.79
12.89
12.79
12.89
Tier I capital ratio [c]
13.13
13.24
13.13
13.24
Total capital ratio [c]
15.30
15.39
15.30
15.39
Leverage ratio [c]
8.82
10.03
8.82
10.03
Average for Three Months
Average for Nine Months
Ending Balance
Ended September 30,
%
Ended September 30,
%
September 30,
%
2020
2019
Change
2020
2019
Change
2020
2019
Change
BALANCE SHEET HIGHLIGHTS
Total loans
$ 67,837,185
$ 63,629,992
7
$ 67,324,774
$ 64,382,982
5
$ 66,434,066
$ 63,454,885
5
Total debt securities
14,422,320
13,715,979
5
14,142,922
13,703,073
3
15,472,108
13,947,224
11
Earning assets
96,896,614
84,528,727
15
92,565,282
83,402,162
11
96,738,163
83,447,829
16
Total assets
104,282,898
94,942,456
10
101,058,770
93,800,891
8
103,652,922
92,914,087
12
Noninterest bearing demand deposits
26,034,478
20,754,143
25
23,527,092
20,409,910
15
26,803,670
21,019,303
28
Interest bearing transaction accounts
52,181,312
37,711,142
38
48,597,866
36,861,148
32
53,346,388
38,614,048
38
Total transaction accounts
78,215,790
58,465,285
34
72,124,958
57,271,058
26
80,150,058
59,633,351
34
Total deposits
85,301,231
72,994,321
17
81,258,400
72,631,301
12
86,371,032
73,569,442
17
Total shareholder's equity
11,394,928
14,056,939
(19)
12,140,120
13,828,060
(12)
11,394,964
14,101,618
(19)
Total shareholder's equity - tangible [b]
9,036,984
9,033,459
—
9,062,151
8,798,038
3
9,037,925
9,081,045
—
[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
September 30
June 30
March 31
December 31
September 30
NONPERFORMING ASSETS
Nonaccrual loans [a]
$ 1,233,040
$ 764,744
$ 676,716
$ 606,843
$ 653,242
Loans 90 days or more past due [b]
94,072
66,163
61,774
71,126
67,869
TDRs 90 days or more past due
830
423
335
414
588
Total nonperforming loans [a]
1,327,942
831,330
738,825
678,383
721,699
Foreclosed real estate
15,051
14,871
20,642
20,833
17,381
Other repossessed assets
8,527
8,599
13,338
10,930
17,584
Total nonperforming assets
$ 1,351,520
$ 854,800
$ 772,805
$ 710,146
$ 756,664
TDRs accruing and past due less than 90 days
$ 114,583
$ 95,788
$ 97,404
$ 97,901
$ 97,218
Total nonperforming loans as a % of loans
2.00 %
1.21 %
1.09 %
1.06 %
1.14 %
Total nonperforming assets as a % of total loans, foreclosed real estate, and other repossessed assets
2.03
1.25
1.14
1.11
1.19
Three Months Ended
2020
2019
September 30
June 30
March 31
December 31
September 30
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period
$ 1,754,352
$ 1,351,072
$ 920,993
$ 942,191
$ 977,660
Adoption of ASC 326
—
—
184,931
—
—
Net charge-offs (NCO)
100,818
123,054
111,798
140,703
176,098
Provision for loan losses
150,889
526,334
356,946
119,505
140,629
Balance at end of period
$ 1,804,423
$ 1,754,352
$ 1,351,072
$ 920,993
$ 942,191
Allowance for loan losses as a % of total loans
2.73 %
2.57 %
2.00 %
1.44 %
1.49 %
Allowance for loan losses as a % of nonperforming loans [c]
135.88
211.03
182.87
135.76
130.55
Allowance for loan losses as a % of nonperforming assets [c]
133.51
205.24
174.83
129.69
124.52
Annualized as a % of average loans:
NCO - QTD
0.59
0.72
0.69
0.87
1.10
NCO - YTD
0.67
0.71
0.69
0.88
0.88
[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 September 30,
2020
2019
Average Balance
Income/ Expense
Yield/ Rate
Average Balance
Income/ Expense
Yield/ Rate
YIELD/RATE ANALYSIS
(Taxable Equivalent Basis)
Assets
Earning assets:
Loans
$ 67,837,185
$ 654,687
3.84 %
$ 63,629,992
$ 782,948
4.88 %
Debt securities available for sale [a]
5,325,937
19,474
1.45
7,987,642
36,051
1.79
Debt securities held to maturity
8,967,670
50,747
2.25
5,737,726
40,075
2.77
Other earning assets [b]
14,637,109
7,328
0.20
7,182,756
47,015
2.60
Total earning assets [a]
96,767,901
732,236
3.01
84,538,116
906,089
4.25
Allowance for credit losses
(1,768,829)
(971,396)
Unrealized gain (loss) on debt securities available for sale
128,713
(9,389)
Other assets
9,155,113
11,385,125
Total assets
$ 104,282,898
$ 94,942,456
Liabilities and Shareholder's Equity
Interest bearing liabilities:
Interest bearing demand deposits
$ 14,188,763
$ 9,777
0.27
$ 8,870,753
$ 25,179
1.13
Savings and money market accounts
37,992,549
26,476
0.28
28,840,389
96,060
1.32
Certificates and other time deposits
7,085,441
24,894
1.40
14,529,036
82,740
2.26
Total interest bearing deposits
59,266,753
61,147
0.41
52,240,178
203,979
1.55
FHLB and other borrowings
3,567,285
14,644
1.63
3,860,727
32,975
3.39
Federal funds purchased and securities sold under agreement to repurchase [b]
1,492,378
3,736
1.00
1,401,320
15,137
4.29
Other short-term borrowings
5,984
49
3.26
13,348
72
2.14
Total interest bearing liabilities
64,332,400
79,576
0.49
57,515,573
252,163
1.74
Noninterest bearing deposits
26,034,478
20,754,143
Other noninterest bearing liabilities
2,521,092
2,615,801
Total liabilities
92,887,970
80,885,517
Shareholder's equity
11,394,928
14,056,939
Total liabilities and shareholder's equity
$ 104,282,898
$ 94,942,456
Net interest income/ net interest spread
652,660
2.52 %
653,926
2.51 %
Net yield on earning assets
2.68 %
3.07 %
Total taxable equivalent adjustment
10,810
12,885
Net interest income
$ 641,850
$ 641,041
[a] Excludes adjustment for market valuation.
[b] Yield/rate reflects impact of balance sheet offsetting.
BBVA USA BANCSHARES, INC.
(Unaudited)
(Dollars in Thousands)
Nine Months Ended September 30,
2020
2019
Average Balance
Income/ Expense
Yield/ Rate
Average Balance
Income/ Expense
Yield/ Rate
YIELD/RATE ANALYSIS
(Taxable Equivalent Basis)
Assets
Earning assets:
Loans
$ 67,324,774
$ 2,061,376
4.09 %
$ 64,382,982
$ 2,395,043
4.97 %
Debt securities available for sale [a]
5,923,281
36,787
0.83
8,957,354
134,698
2.01
Debt securities held to maturity
8,125,463
133,462
2.19
4,845,107
105,298
2.91
Other earning assets [b]
11,097,586
65,798
0.79
5,316,107
106,946
2.69
Total earning assets [a]
92,471,104
2,297,423
3.32
83,501,550
2,741,985
4.39
Allowance for credit losses
(1,404,498)
(952,170)
Unrealized gain (loss) on debt securities available for sale
94,178
(99,388)
Other assets
9,897,986
11,350,899
Total assets
$ 101,058,770
$ 93,800,891
Liabilities and Shareholder's Equity
Interest bearing liabilities:
Interest bearing demand deposits
$ 13,350,036
47,758
0.48
$ 8,954,456
72,061
1.08
Savings and money market accounts
35,247,830
155,211
0.59
27,906,692
261,172
1.25
Certificates and other time deposits
9,133,442
120,199
1.76
15,360,243
255,578
2.22
Total interest bearing deposits
57,731,308
323,168
0.75
52,221,391
588,811
1.51
FHLB and other borrowings
3,623,293
57,756
2.13
4,057,769
104,901
3.46
Federal funds purchased and securities sold under agreement to repurchase [b]
1,379,052
38,668
3.75
763,681
24,886
4.36
Other short-term borrowings
12,844
440
4.58
16,235
368
3.03
Total interest bearing liabilities
62,746,497
420,032
0.89
57,059,076
718,966
1.68
Noninterest bearing deposits
23,527,092
20,409,910
Other noninterest bearing liabilities
2,645,061
2,503,845
Total liabilities
88,918,650
79,972,831
Shareholder's equity
12,140,120
13,828,060
Total liabilities and shareholder's equity
$ 101,058,770
$ 93,800,891
Net interest income/ net interest spread
1,877,391
2.43 %
2,023,019
2.71 %
Net yield on earning assets
2.71 %
3.24 %
Total taxable equivalent adjustment
34,069
39,140
Net interest income
$ 1,843,322
$ 1,983,879
[a] Excludes adjustment for market valuation.
[b] Yield/rate reflects impact of balance sheet offsetting.
BBVA USA BANCSHARES, INC.
(Unaudited)
(Dollars in Thousands)
Nine Months
Three Months Ended
Ended September 30,
%
2020
2019
2020
2019
Change
September 30
June 30
March 31
December 31
September 30
NONINTEREST INCOME
Service charges on deposit accounts
$ 160,474
$ 185,782
(14)
$ 54,710
$ 44,233
$ 61,531
$ 64,585
$ 65,143
Card and merchant processing fees
142,135
146,742
(3)
48,628
43,416
50,091
50,805
50,385
Investment services sales fees
85,596
87,316
(2)
26,218
24,971
34,407
28,130
29,287
Investment banking and advisory fees
111,805
67,939
65
40,013
45,061
26,731
15,720
28,324
Money transfer income
77,118
73,273
5
27,109
25,461
24,548
25,871
26,020
Corporate and correspondent investment sales
33,050
24,298
36
3,478
18,855
10,717
14,263
11,799
Asset management fees
35,488
34,039
4
12,024
11,560
11,904
11,532
11,405
Mortgage banking
55,060
19,011
190
13,741
23,868
17,451
9,048
8,204
Bank owned life insurance
14,691
12,895
14
4,972
5,094
4,625
4,584
3,508
Other
153,223
182,104
(16)
53,767
26,358
73,098
48,046
66,241
868,640
833,399
4
284,660
268,877
315,103
272,584
300,316
Investment securities gains, net
22,616
29,961
(25)
—
3,477
19,139
—
21,003
Total noninterest income
$ 891,256
$ 863,360
3
$ 284,660
$ 272,354
$ 334,242
$ 272,584
$ 321,319
NONINTEREST EXPENSE
Salaries, benefits and commissions
$ 858,541
$ 884,111
(3)
$ 296,708
$ 251,697
$ 310,136
$ 297,823
$ 295,092
Equipment
198,226
191,940
3
68,793
64,752
64,681
64,826
63,908
Professional services
226,338
210,583
7
78,018
78,100
70,220
82,343
72,903
Net occupancy
122,573
123,298
(1)
41,145
41,585
39,843
43,302
42,241
Money transfer expense
53,991
50,273
7
18,897
17,958
17,136
17,951
18,005
Marketing
29,960
42,276
(29)
9,283
8,778
11,899
12,888
15,471
Communications
16,721
16,603
1
5,542
5,808
5,371
5,179
5,469
Goodwill impairment
2,185,000
—
NM
—
—
2,185,000
470,000
—
Other
292,788
260,090
13
77,242
110,772
104,774
92,594
85,798
Total noninterest expense
$ 3,984,138
$ 1,779,174
124
$ 595,628
$ 579,450
$ 2,809,060
$ 1,086,906
$ 598,887
NM = Not meaningful
BBVA USA BANCSHARES, INC.
(Unaudited)
(Dollars in Thousands)
Nine Months
Three Months Ended
Ended September 30,
2020
2019
2020
2019
September 30
June 30
March 31
December 31
September 30
NON-GAAP RECONCILIATION
Computation of Operating Income:
Net interest income (GAAP)
$ 1,843,322
$ 1,983,879
$ 641,850
$ 612,017
$ 589,455
$ 623,154
$ 641,041
Plus: noninterest income (GAAP)
891,256
863,360
284,660
272,354
334,242
272,584
321,319
Less: noninterest expense (GAAP)
3,984,138
1,779,174
595,628
579,450
2,809,060
1,086,906
598,887
Plus: goodwill impairment (GAAP)
2,185,000
—
—
—
2,185,000
470,000
—
Operating income (non-GAAP)
$ 935,440
$ 1,068,065
$ 330,882
$ 304,921
$ 299,637
$ 278,832
$ 363,473
Computation of Tangible Shareholder's Equity:
Total shareholder's equity
$ 11,394,964
$ 14,101,618
$ 11,394,964
$ 11,270,789
$ 11,358,354
$ 13,386,589
$ 14,101,618
Less: goodwill and other intangibles (GAAP)
2,357,039
5,020,573
2,357,039
2,357,343
2,359,540
4,555,330
5,020,573
Tangible shareholder's equity (non-GAAP)
$ 9,037,925
$ 9,081,045
$ 9,037,925
$ 8,913,446
$ 8,998,814
$ 8,831,259
$ 9,081,045
Computation of Average Tangible Equity:
Total stockholder's equity (average) (GAAP)
$ 12,140,120
$ 13,828,060
$ 11,394,928
$ 11,533,007
$ 13,500,615
$ 14,090,315
$ 14,056,939
Less: goodwill and other intangibles (average) (GAAP)
3,077,969
5,030,022
2,357,944
2,357,132
4,526,744
5,016,935
5,023,480
Average tangible equity (non-GAAP) [B]
$ 9,062,151
$ 8,798,038
$ 9,036,984
$ 9,175,875
$ 8,973,871
$ 9,073,380
$ 9,033,459
Net income (loss) (GAAP) [A]
$ (2,195,481)
$ 484,112
$ 166,241
$ (124,437)
$ (2,237,285)
$ (330,705)
$ 182,945
Return on average tangible equity (non-GAAP) ([A]/[B], annualized)
(32.36)%
7.36 %
7.32 %
(5.45)%
(100.27)%
(14.46)%
8.03 %
Computation of Adjusted Net Income, Return on Average Assets and Return on Average Tangible Equity:
Net income (loss) (GAAP)
$ (2,195,481)
$ 484,112
$ 166,241
$ (124,437)
$ (2,237,285)
$ (330,705)
$ 182,945
Plus: goodwill impairment (GAAP)
2,185,000
—
—
—
2,185,000
470,000
—
Adjusted net income (non-GAAP) [C]
$ (10,481)
$ 484,112
$ 166,241
$ (124,437)
$ (52,285)
$ 139,295
$ 182,945
Average assets (GAAP) [D]
$ 101,058,770
$ 93,800,891
$ 104,282,898
$ 104,204,062
$ 96,356,113
$ 95,754,954
$ 94,942,456
Return on average assets - adjusted (non-GAAP) ([C]/[D], annualized)
(0.01)%
0.69 %
0.63 %
(0.48)%
(0.22)%
0.58 %
0.76 %
Return on average tangible equity - adjusted (non-GAAP) ([C]/[B], annualized)
(0.15)
7.36
7.32
(5.45)
(2.34)
6.09
8.03
Computation of Efficiency Ratio:
Noninterest expense (GAAP)
$ 3,984,138
$ 1,779,174
$ 595,628
$ 579,450
$ 2,809,060
$ 1,086,906
$ 598,887
Less: securities and goodwill impairment (GAAP)
2,185,000
113
—
—
2,185,000
470,102
—
Total expense (GAAP) [E]
$ 1,799,138
$ 1,779,061
$ 595,628
$ 579,450
$ 624,060
$ 616,804
$ 598,887
Net interest income, taxable equivalent basis
$ 1,877,391
$ 2,023,019
$ 652,660
$ 623,242
$ 601,489
$ 635,552
$ 653,926
Plus: noninterest income (GAAP)
891,256
863,360
284,660
272,354
334,242
272,584
321,319
Less: investment securities gains, net (GAAP)
22,616
29,961
—
3,477
19,139
—
21,003
Total revenue [F]
$ 2,746,031
$ 2,856,418
$ 937,320
$ 892,119
$ 916,592
$ 908,136
$ 954,242
Efficiency ratio (non-GAAP) ([E]/[F])
65.52 %
62.28 %
63.55 %
64.95 %
68.08 %
67.92 %
62.76 %
BBVA USA BANCSHARES, INC.
SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)
(Dollars in Thousands)
At or Quarter Ended September 30, 2020
30-59 Days Past Due
60-89 Days Past Due
90 Days or More Past Due
Nonaccrual
Accruing TDRs
Not Past Due, Nonaccrual, or TDR
Total
Net Charge Offs (Recoveries)
Commercial, financial and agricultural
$ 22,632
$ 12,890
$ 21,261
$ 660,254
$ 19,713
$ 26,203,423
$ 26,940,173
$ 50,789
Real estate – construction
2,861
303
532
12,614
61
2,387,303
2,403,674
153
Commercial real estate – mortgage
19,280
3,968
1,816
275,668
1,831
13,393,237
13,695,800
98
Residential real estate – mortgage
88,035
49,344
39,728
204,442
55,132
13,027,076
13,463,757
(117)
Equity lines of credit
13,418
6,300
3,445
37,216
—
2,381,344
2,441,723
233
Equity loans
1,847
1,158
271
8,758
20,750
161,583
194,367
(195)
Credit card
9,776
7,526
16,542
—
—
873,949
907,793
18,527
Consumer – direct
25,762
11,730
6,643
9,134
17,926
1,952,501
2,023,696
24,559
Consumer – indirect
34,116
9,744
3,834
24,954
—
4,036,981
4,109,629
6,771
Total loans
$ 217,727
$ 102,963
$ 94,072
$ 1,233,040
$ 115,413
$ 64,417,397
$ 66,180,612
$ 100,818
Loans held for sale
$ —
$ —
$ —
$ —
$ —
$ 253,454
$ 253,454
$ —
At or Quarter Ended June 30, 2020
30-59 Days Past Due
60-89 Days Past Due
90 Days or More Past Due
Nonaccrual
Accruing TDRs
Not Past Due or Impaired
Total
Net Charge Offs (Recoveries)
Commercial, financial and agricultural
$ 51,207
$ 5,130
$ 8,450
$ 389,615
$ 1,866
$ 28,325,856
$ 28,782,124
$ 29,038
Real estate – construction
12,907
—
532
13,317
64
2,271,650
2,298,470
(36)
Commercial real estate – mortgage
8,592
2,190
415
117,213
1,876
13,670,383
13,800,669
8,670
Residential real estate – mortgage
70,252
22,495
13,140
169,387
54,289
13,099,576
13,429,139
182
Equity lines of credit
8,461
8,162
3,555
34,915
—
2,461,741
2,516,834
(476)
Equity loans
1,311
692
148
8,457
21,280
178,092
209,980
(120)
Credit card
6,668
7,286
22,134
—
—
929,484
965,572
20,107
Consumer – direct
19,927
10,923
11,623
7,624
16,836
2,067,175
2,134,108
42,271
Consumer – indirect
32,519
11,162
6,166
24,216
—
4,030,541
4,104,604
23,418
Total loans
$ 211,844
$ 68,040
$ 66,163
$ 764,744
$ 96,211
$ 67,034,498
$ 68,241,500
$ 123,054
Loans held for sale
$ —
$ —
$ —
$ —
$ —
$ 245,851
$ 245,851
$ —
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 More Past Due
Nonaccrual
Accruing TDRs
Not Past Due or Impaired
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 More Past Due
Nonaccrual
Accruing TDRs
Not Past Due or Impaired
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 More Past Due
Nonaccrual
Accruing TDRs
Not Past Due or Impaired
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
$ —
BBVA USA BANCSHARES, INC.
BALANCE SHEET (Unaudited)
(Dollars in Thousands)
2020
2019
September 30
June 30
March 31
December 31
September 30
Assets:
Cash and due from banks
$ 1,035,307
$ 1,019,127
$ 1,033,733
$ 1,149,734
$ 1,117,458
Federal funds sold, securities purchased under agreements to resell and interest bearing deposits
14,041,538
11,738,063
4,479,535
5,788,964
5,356,141
Cash and cash equivalents
15,076,845
12,757,190
5,513,268
6,938,698
6,473,599
Trading account assets
926,497
1,016,966
1,009,130
473,976
564,000
Debt securities available for sale
6,028,072
5,765,192
6,344,816
7,235,305
7,612,590
Debt securities held to maturity, net
9,428,931
8,693,437
7,876,266
6,797,046
6,334,634
Loans held for sale
253,454
245,851
117,752
112,058
134,314
Loans
66,180,612
68,241,500
67,539,414
63,946,857
63,320,571
Allowance for loan losses
(1,804,423)
(1,754,352)
(1,351,072)
(920,993)
(942,191)
Net loans
64,376,189
66,487,148
66,188,342
63,025,864
62,378,380
Premises and equipment, net
1,063,923
1,070,358
1,068,741
1,087,698
1,085,635
Bank owned life insurance
758,391
754,908
754,409
750,224
746,819
Goodwill
2,328,296
2,328,296
2,328,296
4,513,296
4,983,296
Other assets
3,412,324
3,148,270
3,124,539
2,669,182
2,600,820
Total assets
$ 103,652,922
$ 102,267,616
$ 94,325,559
$ 93,603,347
$ 92,914,087
Liabilities:
Deposits:
Noninterest bearing
$ 26,803,670
$ 25,978,354
$ 20,418,504
$ 21,850,216
$ 21,019,303
Interest bearing
59,567,362
59,448,060
56,816,003
53,135,067
52,550,139
Total deposits
86,371,032
85,426,414
77,234,507
74,985,283
73,569,442
FHLB and other borrowings
3,560,973
3,571,933
3,790,137
3,690,044
3,709,949
Federal funds purchased and securities sold under agreements to repurchase
189,474
249,481
409,784
173,028
117,421
Other short-term borrowings
—
1,619
—
—
45
Accrued expenses and other liabilities
2,136,479
1,747,380
1,532,777
1,368,403
1,415,612
Total liabilities
92,257,958
90,996,827
82,967,205
80,216,758
78,812,469
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
14,032,321
14,035,607
14,039,572
14,043,727
14,359,966
Retained deficit
(3,264,295)
(3,430,135)
(3,305,226)
(917,227)
(585,859)
Accumulated other comprehensive income (loss)
365,374
404,165
362,339
(1,072)
66,009
Total BBVA USA Bancshares, Inc. shareholder's equity
11,365,105
11,241,342
11,328,390
13,357,133
14,071,821
Noncontrolling interests
29,859
29,447
29,964
29,456
29,797
Total shareholder's equity
11,394,964
11,270,789
11,358,354
13,386,589
14,101,618
Total liabilities and shareholder's equity
$ 103,652,922
$ 102,267,616
$ 94,325,559
$ 93,603,347
$ 92,914,087
BBVA USA BANCSHARES, INC.
INCOME STATEMENT (Unaudited)
(Dollars in Thousands)
Three Months Ended
2020
2019
September 30
June 30
March 31
December 31
September 30
Interest income:
Interest and fees on loans
$ 644,643
$ 669,767
$ 715,476
$ 738,140
$ 771,245
Interest on debt securities available for sale
19,474
18,805
(1,492)
33,333
36,051
Interest on debt securities held to maturity
49,981
39,800
41,102
43,097
38,893
Interest on trading account assets
892
1,157
1,122
1,326
487
Interest and dividends on other earning assets
6,436
14,016
42,175
39,915
46,528
Total interest income
721,426
743,545
798,383
855,811
893,204
Interest expense:
Interest on deposits
61,147
97,279
164,742
189,345
203,979
Interest on FHLB and other borrowings
14,644
21,936
21,176
31,263
32,975
Interest on federal funds purchased and securities sold under agreements to repurchase
3,736
12,274
22,658
11,850
15,137
Interest on other short-term borrowings
49
39
352
199
72
Total interest expense
79,576
131,528
208,928
232,657
252,163
Net interest income
641,850
612,017
589,455
623,154
641,041
Provision for credit losses
150,977
539,459
356,991
119,505
140,629
Net interest income after provision for credit losses
490,873
72,558
232,464
503,649
500,412
Noninterest income:
Service charges on deposit accounts
54,710
44,233
61,531
64,585
65,143
Card and merchant processing fees
48,628
43,416
50,091
50,805
50,385
Investment services sales fees
26,218
24,971
34,407
28,130
29,287
Investment banking and advisory fees
40,013
45,061
26,731
15,720
28,324
Money transfer income
27,109
25,461
24,548
25,871
26,020
Asset management fees
12,024
11,560
11,904
11,532
11,405
Corporate and correspondent investment sales
3,478
18,855
10,717
14,263
11,799
Mortgage banking
13,741
23,868
17,451
9,048
8,204
Bank owned life insurance
4,972
5,094
4,625
4,584
3,508
Investment securities gains, net
—
3,477
19,139
—
21,003
Other
53,767
26,358
73,098
48,046
66,241
Total noninterest income
284,660
272,354
334,242
272,584
321,319
Noninterest expense:
Salaries, benefits and commissions
296,708
251,697
310,136
297,823
295,092
Equipment
68,793
64,752
64,681
64,826
63,908
Professional services
78,018
78,100
70,220
82,343
72,903
Net occupancy
41,145
41,585
39,843
43,302
42,241
Money transfer expense
18,897
17,958
17,136
17,951
18,005
Marketing
9,283
8,778
11,899
12,888
15,471
Communications
5,542
5,808
5,371
5,179
5,469
Goodwill impairment
—
—
2,185,000
470,000
—
Other
77,242
110,772
104,774
92,594
85,798
Total noninterest expense
595,628
579,450
2,809,060
1,086,906
598,887
Net (loss) income before income tax expense
179,905
(234,538)
(2,242,354)
(310,673)
222,844
Income tax (benefit) expense
13,664
(110,101)
(5,069)
20,032
39,899
Net (loss) income
166,241
(124,437)
(2,237,285)
(330,705)
182,945
Less: net income attributable to noncontrolling interests
401
472
501
663
514
Net (loss) income attributable to BBVA USA Bancshares, Inc.
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SOURCE BBVA USA