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BBVA USA reports third quarter results

- Net income up 5 percent

- Revenue: Total revenue increased 3 percent from a year ago as 16 percent increase in noninterest income more than offsets 3 percent decline in net interest income

- Efficiency: Strong cost controls result in 1 percent decline in noninterest expenses; positive operating leverage in the quarter results in 17 percent increase in operating income[1] and a 233 basis point improvement in the efficiency ratio[1]

- Credit quality: Nonperforming loan ratio drops from second quarter 2019 levels to 1.14 percent while the coverage ratio rises to 131 percent. Net charge-offs total 110 basis points in the quarter primarily due to continued seasoning in consumer-direct portfolio and an isolated commercial credit. Allowance to loans ratio remains healthy at 1.49 percent

- Capital and liquidity: The CET1 ratio rose 83 basis points to 12.90 percent[2] while the Liquidity Coverage Ratio (LCR) ended the quarter at 144 percent

HOUSTON, Oct. 31, 2019 /PRNewswire/ -- BBVA USA Bancshares, Inc., a Sunbelt-based bank holding company (BBVA USA), reported today net income of $183 million for the third quarter of 2019 compared to earnings of $160 million in the second quarter of 2019 and $175 million earned in the third quarter of 2018. Return on average assets and return on average tangible equity1 for the third quarter of 2019 were 0.76 percent and 8.03 percent, respectively.

BBVA's new logo (PRNewsfoto/BBVA)

Net income for the first nine months of 2019 totaled $484 million compared to earnings of $568 million for the first nine months of 2018. Return on average assets and return on average tangible equity1 for the first nine months of 2019 were 0.69 percent and 7.36 percent, respectively.

"Strong fee income growth and good expense management enabled us to achieve record quarterly operating income and post a solid increase in earnings," said Javier Rodríguez Soler, president and CEO of BBVA USA. "As we continue to navigate the challenging interest rate environment, generating fee income growth while maintaining a focus on expense discipline will be key components to offsetting the pressure on our net interest margin. Operating during this environment also places further emphasis on our digital transformation strategy. Digitization allows us to enhance and expand our product offerings, utilize technology to improve efficiency both for us and our customers and, most importantly, deliver an amazing customer experience."    

Total revenue (excluding securities gains) for the quarter was $941 million, an increase of $25 million or 3 percent from third quarter 2018 levels and down $3 million or 1 percent (annualized) compared to the second quarter of 2019. Net interest income totaled $641 million, down $17 million or 3 percent from $658 million recorded in the third quarter of 2018 and down $19 million on a linked quarter basis. The percent net interest margin in the third quarter of 2019 was 3.07 percent, a decline of 20 basis points from the third quarter of 2018 and 17 basis points on a linked quarter basis.

Noninterest income (excluding securities gains) for the quarter totaled $300 million, up $42 million or 16 percent from the third quarter of 2018 and up $16 million compared to the second quarter of 2019. Growth was fueled by increases in investment banking and advisory fees (+103 percent), mortgage banking (+22 percent), card and merchant processing fees (+14 percent), money transfer income (+11 percent), and service charges on deposit accounts (+8 percent). On a linked quarter basis, each of these fee-based businesses experienced positive growth led by investment banking and advisory fees, mortgage banking and increased activity related to corporate and correspondence investment sales. Gains on the sales of investment securities totaled $21 million during the third quarter of 2019. 

Expense containment continued during the quarter with noninterest expenses decreasing 1 percent compared to a year ago and flat linked quarter. On a year-to-date basis, total noninterest expense has increased a modest 2 percent. Revenue growth coupled with expense control resulted in record operating income1 totaling $363 million, a 17 percent increase compared to the third quarter a year ago and a 21 percent (annualized) increase compared to the second quarter of 2019. During the first nine months of 2019, operating income1 totaled $1.1 billion, up 11 percent compared to the same period a year ago. The efficiency ratio1 at 62.76 improved 233 basis points compared to a year ago and on a year-to-date basis has improved 128 basis points.

Total loans for the third quarter of 2019 were $63.5 billion, down 2 percent from $64.5 billion at the end of the third quarter of 2018 and up slightly on a linked quarter basis. During the second quarter of 2019, approximately $1.2 billion commercial loans held for sale were sold. Adjusting for the sale of these loans, the year-over-year increase in total loans was less than 1 percent.

Total deposits at the end of the third quarter of 2019 were $73.6 billion, a 5 percent increase from the $70.4 billion at the end of the third quarter of 2018. Growth in interest bearing transaction accounts (savings, money market and interest bearing checking accounts) outpaced overall growth at 11 percent compared to a year ago. While noninterest bearing deposits were relatively unchanged from a year ago, on a linked quarter basis noninterest bearing deposits increased 7 percent (annualized). The loan to deposit ratio ended the quarter at 86.25 percent and the Liquidity Coverage Ratio (LCR) at 144 percent was unchanged from second quarter 2019 levels.

Nonperforming loans as a percentage of total loans ended the quarter at 1.14 percent compared to 1.26 percent at the end of the second quarter of 2019 and 1.04 percent at the end of the third quarter of 2018. The decrease in nonperforming loans during the quarter included the charge-off of a single commercial credit in the healthcare industry, which accounted for a significant portion of the decline. Net charge-offs as a percentage of average total loans were 110 basis points in the quarter compared to 90 basis points in the second quarter of 2019 and 49 basis points in the third quarter of 2018. The previously mentioned healthcare credit coupled with continued charge-offs in the consumer-direct portfolio, as expected, accounted for the increase.

Provision expense in the quarter was $141 million compared to $155 million in the second quarter of 2019 and $95 million in the third quarter a year ago. The allowance for loan losses as a percentage of total loans ended the quarter at 1.49 percent compared to 1.54 percent at the end of the second quarter of 2019 and 1.36 percent at the end of the third quarter of 2018. The coverage ratio of nonperforming loans was 131 percent at the end of the quarter compared to 123 percent at the end of the second quarter of 2019 and 130 percent at the end of the third quarter a year ago.

Total shareholder's equity at the end of the third quarter of 2019 totaled $14.1 billion, a 6 percent increase from the $13.3 billion at the end of the third quarter of 2018. The CET1 ratio stood at 12.90 percent2 at the end of the third quarter of 2019, up 33 basis points from the end of the second quarter of 2019 and 83 basis points from the end of the third quarter of 2018. All of BBVA's regulatory capital ratios2 continue to significantly exceed the requirements under "well capitalized" guidelines.

During the third quarter, BBVA Net Cash USA Mobile was named a winner in the 2019 Bank Customer Experience Awards, taking first place in the Best Mobile/Online Experience (financial institutions) category. The Best in Bank Customer Experience Awards recognize the most unique, innovative, and pioneering financial institutions and technology providers whose branches and technologies are having the most impact on customers. The app also gives users access to the first-of-their-kind BBVA Real Time Positive Pay and Real Time ARP services – functionality that is not available through any other treasury management platform or mobile application on the market.

BBVA USA was recognized by Kiplinger as its runner-up in the Best Banks for High-Net-Worth Families category for 2019. The Washington, D.C.-based publisher of business forecasts and personal finance advice cited BBVA's expansive wealth services, including its attractive relationship program and well-regarded private bank, and specifically noted its Premier Personal Banking program. While the program is designed for high-net-worth families, BBVA USA offers a lower qualifying balance that opens the Premier Personal Banking program as an option for many more customers.

1 Return on average tangible equity, operating income and efficiency ratio 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, 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 Group
BBVA (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 ed.bilek@bbva.com.

BBVA USA
In 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 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, 2019, 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,


%









2019


2018


Change


2019


2018


Change







EARNINGS SUMMARY



















Net interest income


$       641,041


$       658,286


(3)


$    1,983,879


$    1,924,390


3







Noninterest income [a]


300,316


258,459


16


833,399


786,303


6







Total revenue [a]


941,357


916,745


3


2,817,278


2,710,693


4







Investment securities gain, net


21,003



 NM 


29,961



 NM 







Provision for loan losses


140,629


94,964


48


477,939


243,273


96







Noninterest expense


598,887


605,510


(1)


1,779,174


1,747,968


2







Pretax income


222,844


216,271


3


590,126


719,452


(18)







Income tax expense


39,899


41,756


(4)


106,014


151,849


(30)







Net income


182,945


174,515


5


484,112


567,603


(15)







Net income attributable to noncontrolling interests


514


426


21


1,669


1,482


13







Net income attributable to BBVA USA Bancshares, Inc.


$       182,431


$       174,089


5


$       482,443


$       566,121


(15)


























SELECTED RATIOS



















Return on average assets


0.76 %


0.77 %




0.69 %


0.85 %









Return on average tangible equity [b]


8.03


8.35




7.36


9.28









Efficiency ratio [b]


62.76


65.09




62.28


63.56









Average common equity to average assets


14.53


14.51




14.47


14.56









Average loans to average total deposits


87.17


91.41




88.64


90.56









Common equity tier I capital (CET1) [c]


12.90


12.07




12.90


12.07









Tier I capital ratio [c]


13.24


12.41




13.24


12.41









Total capital ratio [c]


15.39


14.58




15.39


14.58









Leverage ratio [c]


10.03


10.12




10.03


10.12




































































Average for Three Months




Average for Nine Months




Ending Balance





Ended September 30,


%


Ended September 30,


%


September 30,


%



2019


2018


 Change 


2019


2018


 Change 


2019


2018


Change

BALANCE SHEET HIGHLIGHTS















Total loans


$  63,629,992


$  64,316,342


(1)


$  64,382,982


$  63,247,623


2


$  63,454,885


$  64,530,848


(2)

Total debt securities


13,715,979


13,480,726


2


13,703,073


13,336,448


3


13,947,224


13,625,428


2

Earning assets


84,528,727


81,095,701


4


83,402,162


79,758,194


5


83,447,829


81,212,434


3

Total assets


94,942,456


90,118,668


5


93,800,891


88,982,476


5


92,914,087


90,047,656


3

Noninterest bearing demand deposits


20,754,143


20,990,763


(1)


20,409,910


21,282,629


(4)


21,019,303


20,968,391


Interest bearing transaction accounts


37,711,142


34,463,223


9


36,861,148


34,000,590


8


38,614,048


34,732,504


11

Total transaction accounts


58,465,285


55,453,986


5


57,271,058


55,283,219


4


59,633,351


55,700,895


7

Total deposits


72,994,321


70,363,598


4


72,631,301


69,844,006


4


73,569,442


70,378,057


5

Total shareholder's equity


14,056,939


13,334,169


5


13,828,060


13,215,032


5


14,101,618


13,342,487


6





















[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)








2019


2018



September 30


June 30


March 31


December 31


September 30

NONPERFORMING ASSETS











Nonaccrual loans [a]


$       653,242


$   732,696


$   806,644


$      751,486


$       628,159

Loans 90 days or more past due [b]


67,869


64,337


63,880


59,549


44,765

TDRs 90 days or more past due


588


304


370


411


444

Total nonperforming loans [a]


721,699


797,337


870,894


811,446


673,368

Foreclosed real estate


17,381


13,752


14,983


16,869


18,706

Other repossessed assets


17,584


13,040


11,225


12,031


9,875

Total nonperforming assets


$       756,664


$   824,129


$   897,102


$      840,346


$       701,949












TDRs accruing and past due less than 90 days


$         97,218


$   112,383


$   111,671


$      109,190


$         92,606












Total nonperforming loans as a % of loans


1.14 %


1.26 %


1.34 %


1.24 %


1.04 %

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


1.19


1.30


1.38


1.29


1.09














Three Months Ended



2019


2018



September 30


June 30


March 31


December 31


September 30

ALLOWANCE FOR LOAN LOSSES











Balance at beginning of period


$       977,660


$   966,022


$   885,242


$      875,393


$       860,000

Net charge-offs (NCO)


176,098


143,380


101,512


112,298


79,571

Provision for loan losses


140,629


155,018


182,292


122,147


94,964

Balance at end of period


$       942,191


$   977,660


$   966,022


$      885,242


$       875,393












Allowance for loan losses as a % of total loans


1.49 %


1.54 %


1.52 %


1.36 %


1.36 %

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


130.55


122.62


110.92


109.09


130.00

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


124.52


118.63


107.68


105.34


124.71












Annualized as a % of average loans:











NCO - QTD


1.10


0.90


0.63


0.68


0.49

NCO - YTD


0.88


0.77


0.63


0.51


0.45













[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,



2019


2018



Average Balance


Income/ Expense


Yield/ Rate


Average Balance


Income/ Expense


Yield/ Rate

YIELD/RATE ANALYSIS













(Taxable Equivalent Basis)













Assets













Earning assets:













Loans


$63,629,992


$782,948


4.88 %


$64,316,342


$763,165


4.71 %

Debt securities available for sale [a]


7,987,642


36,051


1.79


11,416,609


53,201


1.85

Debt securities held to maturity


5,737,726


40,075


2.77


2,360,654


17,548


2.95

Other earning assets [b]


7,182,756


47,015


2.60


3,298,633


18,282


2.20

Total earning assets [a]


84,538,116


906,089


4.25


81,392,238


852,196


4.15

Allowance for loan losses


(971,396)






(866,131)





Unrealized loss on debt securities available for sale


(9,389)






(296,537)





Other assets


11,385,125






9,889,098





Total assets


$94,942,456






$90,118,668


















Liabilities and Shareholder's Equity













Interest bearing liabilities:













Interest bearing demand deposits


$  8,870,753


$  25,179


1.13


$  7,703,562


$  12,644


0.65

Savings and money market accounts


28,840,389


96,060


1.32


26,759,661


63,796


0.95

Certificates and other time deposits


14,529,036


82,740


2.26


14,909,612


63,458


1.69

Total interest bearing deposits


52,240,178


203,979


1.55


49,372,835


139,898


1.12

FHLB and other borrowings


3,860,727


32,975


3.39


4,412,717


37,131


3.34

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


1,401,320


15,137


4.29


172,277


3,169


7.30

Other short-term borrowings


13,348


72


2.14


77,413


579


2.97

Total interest bearing liabilities


57,515,573


252,163


1.74


54,035,242


180,777


1.33

Noninterest bearing deposits


20,754,143






20,990,763





Other noninterest bearing liabilities


2,615,801






1,758,494





Total liabilities


80,885,517






76,784,499





Shareholder's equity


14,056,939






13,334,169





Total liabilities and shareholder's equity


$94,942,456






$90,118,668


















Net interest income/ net interest spread




653,926


2.51 %




671,419


2.82 %

Net yield on earning assets






3.07 %






3.27 %














Total taxable equivalent adjustment




12,885






13,133
















Net interest income




$641,041






$658,286




[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,



2019


2018



Average Balance


Income/ Expense


Yield/ Rate


Average Balance


Income/ Expense


Yield/ Rate

YIELD/RATE ANALYSIS













(Taxable Equivalent Basis)













Assets













Earning assets:













Loans


$64,382,982


$2,395,043


4.97 %


$63,247,623


$  2,160,341


4.57 %

Debt securities available for sale [a]


8,957,354


134,698


2.01


11,458,832


163,598


1.91

Debt securities held to maturity


4,845,107


105,298


2.91


2,149,928


45,971


2.86

Other earning assets [b]


5,316,107


106,946


2.69


3,174,123


46,748


1.97

Total earning assets [a]


83,501,550


2,741,985


4.39


80,030,506


2,416,658


4.04

Allowance for loan losses


(952,170)






(850,392)





Unrealized loss on debt securities available for sale


(99,388)






(272,312)





Other assets


11,350,899






10,074,674





Total assets


$93,800,891






$88,982,476


















Liabilities and Shareholder's Equity













Interest bearing liabilities:













Interest bearing demand deposits


$  8,954,456


72,061


1.08


$  7,946,242


33,250


0.56

Savings and money market accounts


27,906,692


261,172


1.25


26,054,348


151,479


0.78

Certificates and other time deposits


15,360,243


255,578


2.22


14,560,787


168,839


1.55

Total interest bearing deposits


52,221,391


588,811


1.51


48,561,377


353,568


0.97

FHLB and other borrowings


4,057,769


104,901


3.46


3,903,295


93,799


3.21

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


763,681


24,886


4.36


100,045


5,104


6.82

Other short-term borrowings


16,235


368


3.03


69,242


1,490


2.88

Total interest bearing liabilities


57,059,076


718,966


1.68


52,633,959


453,961


1.15

Noninterest bearing deposits


20,409,910






21,282,629





Other noninterest bearing liabilities


2,503,845






1,850,856





Total liabilities


79,972,831






75,767,444





Shareholder's equity


13,828,060






13,215,032





Total liabilities and shareholder's equity


$93,800,891






$88,982,476


















Net interest income/ net interest spread




2,023,019


2.71 %




1,962,697


2.89 %

Net yield on earning assets






3.24 %






3.28 %














Total taxable equivalent adjustment




39,140






38,307
















Net interest income




$1,983,879






$  1,924,390




[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,


%


2019


2018



2019


2018


Change


September 30


June 30


March 31


December 31


September 30

NONINTEREST INCOME

















Service charges on deposit accounts


$        185,782


$        175,067


6


$         65,143


$       61,731


$       58,908


$        61,606


$         60,325

Card and merchant processing fees


146,742


127,945


15


50,385


50,355


46,002


46,982


44,219

Investment services sales fees


87,316


88,176


(1)


29,287


31,333


26,696


24,476


28,286

Investment banking and advisory fees


67,939


62,398


9


28,324


20,758


18,857


15,286


13,956

Money transfer income


73,273


68,049


8


26,020


25,272


21,981


23,632


23,441

Corporate and correspondent investment sales


24,298


40,901


(41)


11,799


5,607


6,892


10,774


12,490

Asset management fees


34,039


32,902


3


11,405


11,867


10,767


10,909


11,143

Mortgage banking


19,011


23,078


(18)


8,204


5,870


4,937


3,755


6,717

Bank owned life insurance


12,895


13,187


(2)


3,508


4,803


4,584


4,635


4,597

Other


182,104


154,600


18


66,241


66,685


49,178


68,551


53,285



833,399


786,303


6


300,316


284,281


248,802


270,606


258,459

Investment securities gains, net


29,961



 NM 


21,003



8,958



Total noninterest income


$        863,360


$        786,303


10


$       321,319


$     284,281


$     257,760


$      270,606


$       258,459


















NONINTEREST EXPENSE

















Salaries, benefits and commissions


$        884,111


$        868,971


2


$       295,092


$     296,303


$     292,716


$      285,820


$       292,679

Equipment


191,940


190,759


1


63,908


62,638


65,394


66,806


63,739

Professional services


210,583


197,625


7


72,903


73,784


63,896


79,529


68,403

Net occupancy


123,298


125,607


(2)


42,241


40,116


40,941


41,161


42,514

Money transfer expense


50,273


46,143


9


18,005


17,290


14,978


15,995


16,120

Marketing


42,276


32,982


28


15,471


16,412


10,393


15,884


12,381

Communications


16,603


21,341


(22)


5,469


5,733


5,401


9,241


10,827

Other


260,090


264,540


(2)


85,798


86,038


88,254


87,556


98,847

Total noninterest expense


$     1,779,174


$     1,747,968


2


$       598,887


$     598,314


$     581,973


$      601,992


$       605,510



















NM = Not meaningful


 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)



















Nine Months



Three Months Ended



Ended September 30,



2019


2018



2019


2018



September 30


June 30


March 31


December 31


September 30

NON-GAAP RECONCILIATION
















Computation of Operating Income:
















Net interest income (GAAP)


$       1,983,879


$       1,924,390



$          641,041


$          659,749


$          683,089


$          682,188


$          658,286

Plus: noninterest income (GAAP)


863,360


786,303



321,319


284,281


257,760


270,606


258,459

Less: noninterest expense (GAAP)


1,779,174


1,747,968



598,887


598,314


581,973


601,992


605,510

Operating income (non-GAAP)


$       1,068,065


$          962,725



$          363,473


$          345,716


$          358,876


$          350,802


$          311,235

















































Computation of Average Tangible Equity:
















Total stockholder's equity (average) (GAAP)


$     13,828,060


$     13,215,032



$     14,056,939


$     13,782,011


$     13,640,655


$     13,420,931


$     13,334,169

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


5,030,022


5,040,016



5,023,480


5,031,129


5,035,591


5,039,847


5,040,018

Average tangible equity (non-GAAP) [B]


$       8,798,038


$       8,175,016



$       9,033,459


$       8,750,882


$       8,605,064


$       8,381,084


$       8,294,151

Net income (GAAP) [A]


$          484,112


$          567,603



$          182,945


$          160,186


$          140,981


$          195,826


$          174,515

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


7.36 %


9.28 %



8.03 %


7.34 %


6.64 %


9.27 %


8.35 %

















































Computation of Efficiency Ratio:
















Noninterest expense (GAAP)


$       1,779,174


$       1,747,968



$          598,887


$          598,314


$          581,973


$          601,992


$          605,510

Less: securities impairment (GAAP)


113


592




113




283

Total expense [A]


$       1,779,061


$       1,747,376



$          598,887


$          598,201


$          581,973


$          601,992


$          605,227

Net interest income, taxable equivalent basis


$       2,023,019


$       1,962,697



$          653,926


$          672,807


$          696,286


$          695,543


$          671,419

Plus: noninterest income (GAAP)


863,360


786,303



321,319


284,281


257,760


270,606


258,459

Less: investment securities gains, net (GAAP)


29,961




21,003



8,958



Total revenue [B]


$       2,856,418


$       2,749,000



$          954,242


$          957,088


$          945,088


$          966,149


$          929,878

Efficiency ratio (non-GAAP) ([A]/[B])


62.28 %


63.56 %



62.76 %


62.50 %


61.58 %


62.31 %


65.09 %


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


$                      —


















At or Quarter Ended June 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

$                       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 More
Past Due


Nonaccrual


Accruing TDRs


Not Past Due
or Impaired


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
or Impaired


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.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)


















At or Quarter Ended September 30, 2018


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

$                       38,512


$                       16,416


$                 9,609


$   290,239


$                 522


$     26,300,781


$ 26,656,079


$              13,975

Real estate – construction

3,252


5,278


532


12,882


121


2,096,427


2,118,492


(23)

Commercial real estate –  mortgage

31,792


18,349


502


104,976


3,753


12,237,632


12,397,004


2,035

Residential real estate – mortgage

87,426


30,373


3,697


159,721


59,082


13,062,173


13,402,472


2,090

Equity lines of credit

13,556


4,298


1,186


35,125



2,655,566


2,709,731


(19)

Equity loans

2,082


1,042


241


10,378


28,383


266,712


308,838


45

Credit card

8,601


6,449


13,157




735,479


763,686


9,686

Consumer – direct

30,153


14,455


8,988


3,184


1,189


2,364,239


2,422,208


28,765

Consumer – indirect

86,310


23,587


6,853


11,654



3,550,365


3,678,769


23,017

Total loans

$                     301,684


$                     120,247


$              44,765


$   628,159


$            93,050


$     63,269,374


$ 64,457,279


$              79,571

Loans held for sale

$                                —


$                                —


$                       —


$              —


$                    —


$             73,569


$         73,569


$                      —


 

BBVA USA BANCSHARES, INC.

BALANCE SHEET (Unaudited)

(Dollars in Thousands)












2019


2018


September 30


June 30


March 31


December 31


September 30

Assets:










Cash and due from banks

$       1,117,458


$    1,027,400


$    1,143,541


$      1,217,319


$       1,122,747

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

5,356,141


4,773,761


4,864,920


2,115,307


2,404,164

Cash and cash equivalents

6,473,599


5,801,161


6,008,461


3,332,626


3,526,911

Trading account assets

564,000


440,098


306,123


237,656


216,749

Debt securities available for sale

7,612,590


9,010,950


9,297,018


10,981,216


11,134,860

Debt securities held to maturity 

6,334,634


4,912,483


4,575,041


2,885,613


2,490,568

Loans held for sale

134,314


90,537


1,273,821


68,766


73,569

Loans

63,320,571


63,311,553


63,757,545


65,186,554


64,457,279

Allowance for loan losses

(942,191)


(977,660)


(966,022)


(885,242)


(875,393)

Net loans

62,378,380


62,333,893


62,791,523


64,301,312


63,581,886

Premises and equipment, net

1,085,635


1,105,819


1,125,676


1,152,958


1,155,795

Bank owned life insurance

746,819


745,130


740,764


736,171


731,527

Goodwill

4,983,296


4,983,296


4,983,296


4,983,296


4,983,296

Other assets

2,600,820


2,760,678


2,740,863


2,267,560


2,152,495

Total assets

$     92,914,087


$ 92,184,045


$ 93,842,586


$   90,947,174


$     90,047,656

Liabilities:










Deposits:










Noninterest bearing

$     21,019,303


$ 20,646,209


$ 20,403,716


$   20,183,876


$     20,968,391

Interest bearing

52,550,139


51,942,601


53,976,592


51,984,111


49,409,666

Total deposits

73,569,442


72,588,810


74,380,308


72,167,987


70,378,057

FHLB and other borrowings

3,709,949


4,052,969


4,011,160


3,987,590


5,045,302

Federal funds purchased and securities sold under agreements to repurchase

117,421


191,739


188,024


102,275


78,004

Other short-term borrowings

45


2,067


30,975



68,714

Accrued expenses and other liabilities

1,415,612


1,477,737


1,504,582


1,176,793


1,135,092

Total liabilities

78,812,469


78,313,322


80,115,049


77,434,645


76,705,169

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

14,359,966


14,364,527


14,542,166


14,545,849


14,695,197

Retained deficit

(585,859)


(768,290)


(927,877)


(1,107,198)


(1,302,525)

Accumulated other comprehensive income (loss)

66,009


13,508


(148,135)


(186,848)


(311,422)

Total BBVA USA Bancshares, Inc. shareholder's equity

14,071,821


13,841,450


13,697,859


13,483,508


13,312,955

Noncontrolling interests

29,797


29,273


29,678


29,021


29,532

Total shareholder's equity

14,101,618


13,870,723


13,727,537


13,512,529


13,342,487

Total liabilities and shareholder's equity

$     92,914,087


$ 92,184,045


$ 93,842,586


$   90,947,174


$     90,047,656


 

BBVA USA BANCSHARES, INC.

INCOME STATEMENT (Unaudited)

(Dollars in Thousands)












Three Months Ended


2019


2018


September 30


June 30


March 31


December 31


September 30

Interest income:










Interest and fees on loans

$          771,245


$    787,767


$    800,488


$        787,858


$          751,470

Interest on debt securities available for sale

36,051


45,125


53,522


59,028


53,201

Interest on debt securities held to maturity

38,893


33,313


29,495


19,993


16,110

Interest on trading account assets

487


601


539


704


833

Interest and dividends on other earning assets

46,528


35,823


22,968


19,340


17,449

Total interest income

893,204


902,629


907,012


886,923


839,063

Interest expense:










Interest on deposits

203,979


202,478


182,354


163,722


139,898

Interest on FHLB and other borrowings

32,975


34,300


37,626


36,573


37,131

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

15,137


6,002


3,747


3,849


3,169

Interest on other short-term borrowings

72


100


196


591


579

Total interest expense

252,163


242,880


223,923


204,735


180,777

Net interest income

641,041


659,749


683,089


682,188


658,286

Provision for loan losses

140,629


155,018


182,292


122,147


94,964

Net interest income after provision for loan losses

500,412


504,731


500,797


560,041


563,322

Noninterest income:










Service charges on deposit accounts

65,143


61,731


58,908


61,606


60,325

Card and merchant processing fees

50,385


50,355


46,002


46,982


44,219

Investment services sales fees

29,287


31,333


26,696


24,476


28,286

Investment banking and advisory fees

28,324


20,758


18,857


15,286


13,956

Money transfer income

26,020


25,272


21,981


23,632


23,441

Asset management fees

11,405


11,867


10,767


10,909


11,143

Corporate and correspondent investment sales

11,799


5,607


6,892


10,774


12,490

Mortgage banking

8,204


5,870


4,937


3,755


6,717

Bank owned life insurance

3,508


4,803


4,584


4,635


4,597

Investment securities gains, net

21,003



8,958



Other

66,241


66,685


49,178


68,551


53,285

Total noninterest income

321,319


284,281


257,760


270,606


258,459

Noninterest expense:










Salaries, benefits and commissions

295,092


296,303


292,716


285,820


292,679

Equipment

63,908


62,638


65,394


66,806


63,739

Professional services

72,903


73,784


63,896


79,529


68,403

Net occupancy

42,241


40,116


40,941


41,161


42,514

Money transfer expense

18,005


17,290


14,978


15,995


16,120

Marketing

15,471


16,412


10,393


15,884


12,381

Communications

5,469


5,733


5,401


9,241


10,827

Other

85,798


86,038


88,254


87,556


98,847

Total noninterest expense

598,887


598,314


581,973


601,992


605,510

Net income before income tax expense

222,844


190,698


176,584


228,655


216,271

Income tax expense

39,899


30,512


35,603


32,829


41,756

Net income

182,945


160,186


140,981


195,826


174,515

Less: net income attributable to noncontrolling interests

514


599


556


499


426

Net income attributable to BBVA USA Bancshares, Inc.

$          182,431


$    159,587


$    140,425


$        195,327


$          174,089

 

Cision

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