BBVA
$2.64
Banco Bilbao Viscaya Argentaria S.A.
$.15
6.02%
Earnings Details
2nd Quarter June 2020
Thursday, July 30, 2020 9:30:00 AM
Tweet Share Watch
Summary

Banco Bilbao Viscaya Argentaria S.A. (BBVA) Recent Earnings

Banco Bilbao Viscaya Argentaria S.A. (BBVA) reported 2nd Quarter June 2020 earnings of $0.09 per share on revenue of $6.1 billion.. Revenue fell 8.0% compared to the same quarter a year ago.

Banco Bilbao Vizcaya Argentaria SA is an international financial group. It offers retail banking, asset management, private banking and wholesale banking.

Results
Reported Earnings
$0.09
Earnings Whisper
-
Consensus Estimate
Reported Revenue
$6.12 Bil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

BBVA USA reports second quarter 2020 results

HOUSTON, July 30, 2020 /PRNewswire/ -- BBVA USA Bancshares, Inc., a Sunbelt-based bank holding company (BBVA USA), reported today a net loss of $124 million for the second quarter of 2020 compared to earnings of $160 million in the second quarter of 2019. Included in the second quarter 2020 results is a substantial increase in provision for credit losses, well in excess of net-charge-offs, that reflects the ongoing adverse macroeconomic environment and corresponding forecasts given the COVID-19 pandemic and subsequent impact to certain segments of the loan portfolio.

BBVA's new logo (PRNewsfoto/BBVA)

For the first six months of 2020, the company reported a net loss of $2.4 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 six months of 2020 was $177 million, further reflecting the decline in interest rates and higher provision expense necessary to reflect the economic and business disruption caused by the pandemic.

"The COVID-19 pandemic certainly represents an unprecedented time in global history but it has not deterred our team at BBVA USA from continuing to meet our customers' needs while also providing support to the communities in which we operate," said Javier Rodríguez Soler, president and CEO of BBVA USA.

"Despite the challenging economic environment, our second quarter results continued to build on the momentum over the past two quarters in terms of customer activity, driven by solid loan growth and robust deposit generation at significantly lower rates. While we continue to navigate the challenges ahead, and work to systematically reopen our branch lobbies while protecting the safety of our employees and customers, we firmly believe this increased activity, coupled with our solid capital and strong liquidity positions, will enable us to continue aiding our customers' during this time while also building long-term value."

Total loans at the end of the second quarter of 2020 were $68.5 billion, up 5 percent (annualized) from $67.7 billion at the end of the first quarter of 2020 and up 8 percent from the $63.4 billion at the end of the second quarter of 2019. The increase in total loans was fueled by an increase in the commercial loan portfolio, primarily as a result of customer draws and small business loans originated under the SBA's PPP. Under the PPP, a key small business component of the CARES Act, BBVA USA funded approximately $3.3 billion in small business loans, processing more than 22,000 applications, providing loans to nearly 3,100 borrowers who did not previously have a relationship with BBVA USA and impacting an estimated 360,000 jobs.

To support and expedite the demand for this program, BBVA USA utilized its digital capabilities to build an on-line app in just three days. As a result, the bank was able to begin funding loans just three days after the program opened.

During the second quarter, approximately $7.7 billion of customer loans were funded, a 121 percent increase from the second quarter a year ago. Excluding the impact of the PPP, newly funded customer loans were 26 percent ahead of the pace set last year. For the first six months of 2020, newly funded loans totaled more than $12.3 billion, up 84 percent compared to the first six months of 2019, and up 35 percent excluding the impact of the PPP.  

Deposit generation in the quarter was robust and reflected customers, both commercial and consumer, maintaining higher levels of liquidity given the uncertainty related to the COVID-19 pandemic, reduced spending, and aided somewhat by government stimulus programs/payments. Total deposits ended the quarter at $85.4 billion, up $8.2 billion or 42 percent (annualized) from the first quarter of 2020, and up $12.8 billion or 18 percent compared to the second quarter of 2019. Noninterest bearing deposits totaled $26.0 billion, up $5.6 billion or 109 percent (annualized) on a linked quarter basis, and up $5.3 billion or 26 percent compared to the second quarter of 2019. Growth in interest bearing transaction accounts was similarly robust, ending the quarter at $51.3 billion, up $5.0 billion or 43 percent (annualized) on a linked quarter basis, and up $14.3 billion or 39 percent compared to the second quarter of 2019.

With deposit growth outpacing loan growth, the loan to deposit ratio ended the quarter at 80.2 percent compared to 87.6 percent at the end of the first quarter of 2020 and 87.3 percent at the end of the second quarter of 2019. At the same time, BBVA USA continues to maintain a very strong liquidity position with the LCR at 144 percent, unchanged from first quarter 2020 levels.

Total shareholder's equity at the end of the second quarter of 2020 totaled $11.3 billion compared to $11.4 billion at the end of the first quarter of 2020 and $13.9 billion at the end of the second quarter of 2019. The CET12 ratio ended the second quarter of 2020 at 12.18 percent compared to 11.97 percent at the end of the first quarter of 2020 and 12.57 percent at the end of the second quarter of 2019. The decrease in shareholder's equity from the prior year reflects the non-cash goodwill impairment charge recorded in the first quarter of 2020, which does not impact tangible capital levels and therefore has no impact on regulatory capital and regulatory capital ratios. All of BBVA USA's regulatory capital ratios2 continue to exceed the requirements under "well-capitalized" guidelines.

While increased business activity in terms of loans and deposits was positive during the quarter, revenue growth was challenged by the impact of the drastic decrease in interest rates, decreased other business activity due to the lockdown and higher provision for credit losses necessary given the ongoing adverse macroeconomic environment and corresponding forecasts as a result of the COVID-19 pandemic. 

Total revenue for the second quarter of 2020 was $881 million, down 10 percent (annualized) from first quarter 2020 levels and down 7 percent from second quarter 2019 levels. Net interest income in the quarter totaled $612 million compared to $589 million in the first quarter of 2020 and $660 million in the second quarter of 2019. The percent net interest margin in the second quarter of 2020 was 2.66 percent compared to 2.80 percent in the first quarter of 2020 and 3.24 percent in the second quarter of 2019. The decline in the percent net interest margin reflects the sudden decline in interest rates and subsequent repricing of variable rate loans.

Noninterest income (excluding securities gains) for the quarter totaled $269 million compared to $315 million in the first quarter of 2020 and $284 million in the second quarter of 2019. The decrease in noninterest income was primarily the result of decrease in service charges on deposit accounts driven by a decline in consumer spending activity, which also impacted card and merchant processing fees, as well fee waivers implemented by the bank to offer relief to those customers impacted by the COVID-19 pandemic. The decrease in other income was primarily the result of valuation adjustment to investments held by our small business investment company. At the same time, investment banking and advisory fees, corporate and correspondent investment sales and mortgage banking recorded positive growth both on a linked quarter basis and compared to the year ago quarter.

During the second quarter of 2020, investment securities gains totaled $3 million compared to $19 million in the first quarter of 2020. No investment securities gains were recorded in the second quarter of 2019.

Overall, expenses were well contained in the quarter as total noninterest expense totaled $579 million. On a linked quarter basis (excluding goodwill impairment) noninterest expense declined 29 percent (annualized) and represented a decrease of 3 percent compared to the second quarter of 2019. The decline in noninterest expense was primarily due to a decrease in salaries, benefits and commissions, marketing expenses and lower travel expenses, offset in part by an increase in provisions for unfunded commitments recorded in other noninterest expense. Operating income1 in the quarter totaled $305 million, up 7 percent (annualized) from the first quarter of 2020 and down 12 percent from second quarter 2019 levels.

Provision for credit losses for the quarter was $539 million compared to $357 million in the first quarter of 2020 and $155 million in the second quarter of 2019. The increase in provision expense reflects the decline in forecasted economic conditions and the expected future losses that could result as a result of the ongoing COVID-19 pandemic. While oil prices have recovered from the drastic drop in the first quarter of 2020, demand continues to lag supply during the COVID-19 pandemic. At the end of the second quarter, our energy portfolio totaled $3.0 billion compared to $3.4 billion at the end of the first quarter of 2020.

Nonperforming loans as a percentage of total loans ended the second quarter of 2020 at 1.21 percent, up from the 1.09 percent at the end of the first quarter of 2020 and down from 1.26 percent at the end of the second quarter of 2019. The increase in nonperforming loans on a linked quarter basis was attributable to the commercial loan portfolio, primarily in the energy sector. Provision for loan losses in the quarter totaled $526 million, exceeding net charge-offs by $403 million. Net charge-offs as a percentage of average total loans were 72 basis points in the quarter compared to 69 basis points in the first quarter of 2020 and 90 basis points in the second quarter of 2019.     

With the increase in provision for loan losses, the allowance for loan losses as a percentage of total loans at the end of the quarter rose to 2.57 percent compared to 2.00 percent at the end of the first quarter of 2020 and 1.54 percent at the end of the second quarter of 2019. The coverage ratio of nonperforming loans also increased to 211 percent at the end of the quarter compared to 183 percent at the end of the first quarter of 2020 and 123 percent at the end of the second quarter of 2019.

During the quarter, BBVA USA announced that it had received approval to open 15 new branches across Texas, the bank's largest market in its U.S. footprint. The branches, set to open in 2021, underscore the bank's 5-year strategic plan launched in early 2020, which aims to help clients improve their financial health. Adding branches at a time when digital transactions are increasing demonstrates the bank's belief that the branch format naturally facilitates face-to-face relationships between bankers and their customers, building a deep understanding of their financial needs.

The announcement came within a week of BBVA USA launching its new mobile banking app, Mobile 9.0, and expanded transaction detail screen in mobile and online banking, both aimed at leveraging the bank's technology expertise to provide a better experience and more transparency and control for customers.

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

Forward-Looking 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 June 30,


%


Six Months Ended June 30,


%









2020


2019


 Change 


2020


2019


 Change 







EARNINGS SUMMARY



















Net interest income


$         612,017


$         659,749


(7)


$       1,201,472


$      1,342,838


(11)







Noninterest income [a]


268,877


284,281


(5)


583,980


533,083


10







Total revenue [a]


880,894


944,030


(7)


1,785,452


1,875,921


(5)







Investment securities gain, net


3,477



 NM 


22,616


8,958


152







Provision for credit losses


539,459


155,018


248


896,450


337,310


166







Goodwill impairment





2,185,000



 NM 







Noninterest expense


579,450


598,314


(3)


1,203,510


1,180,287


2







Pretax (loss) income


(234,538)


190,698


(223)


(2,476,892)


367,282


(774)







Income tax (benefit) expense


(110,101)


30,512


(461)


(115,170)


66,115


(274)







Net (loss) income


$        (124,437)


$         160,186


(178)


$     (2,361,722)


$         301,167


(884)







Adjusted net (loss) income [b]


$        (124,437)


$         160,186


(178)


$        (176,722)


$         301,167


(159)


























SELECTED RATIOS



















Return on average assets


(0.48)%


0.69 %




(4.74)%


0.65 %









Return on average assets- adjusted [b]


(0.48)


0.69




(0.35)


0.65









Return on average tangible equity [b]


(5.45)


7.34




(52.34)


7.00









Return on average tangible equity- adjusted [b]


(5.45)


7.34




(3.92)


7.00









Efficiency ratio [b]


64.95


62.50




66.54


62.04









Average common equity to average assets


10.82


14.47




12.22


14.43









Average loans to average total deposits


82.89


88.13




84.66


89.40









Common equity tier I capital (CET1) [c]


12.18


12.57




12.18


12.57









Tier I capital ratio [c]


12.51


12.91




12.51


12.91









Total capital ratio [c]


14.66


15.08




14.66


15.08









Leverage ratio [c]


8.66


9.99




8.66


9.99




































































Average for Three Months




Average for Six Months




Ending Balance





Ended June 30,


%


Ended June 30,


%


June 30,


%



2020


2019


 Change 


2020


2019


 Change 


2020


2019


Change

BALANCE SHEET HIGHLIGHTS















Total loans


$   69,256,412


$   64,056,915


8


$    67,065,753


$   64,765,717


4


$   68,487,351


$    63,402,090


8

Total debt securities


14,110,021


13,625,034


4


14,001,688


13,696,513


2


14,473,646


13,923,433


4

Earning assets


94,247,127


83,152,459


13


90,375,817


82,829,544


9


95,504,447


82,741,439


15

Total assets


104,204,062


93,452,839


12


100,280,087


93,220,648


8


102,267,616


92,184,045


11

Noninterest bearing demand deposits


24,225,740


20,286,244


19


22,259,622


20,234,941


10


25,978,354


20,646,209


26

Interest bearing transaction accounts


49,896,129


36,948,180


35


46,786,454


36,429,106


28


51,304,239


36,967,442


39

Total transaction accounts


74,121,869


57,234,424


30


69,046,076


56,664,047


22


77,282,593


57,613,651


34

Total deposits


83,547,718


72,687,054


15


79,214,772


72,446,783


9


85,426,414


72,588,810


18

Total shareholder's equity


11,533,007


13,782,011


(16)


12,516,811


13,711,724


(9)


11,270,789


13,870,723


(19)

Total shareholder's equity - tangible [b]


9,175,875


8,750,882


5


9,074,873


8,678,376


5


8,913,446


8,845,449


1




















[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



June 30


March 31


December 31


September 30


June 30

NONPERFORMING ASSETS











Nonaccrual loans [a]


$    764,744


$    676,716


$       606,843


$         653,242


$ 732,696

Loans 90 days or more past due [b]


66,163


61,774


71,126


67,869


64,337

TDRs 90 days or more past due


423


335


414


588


304

Total nonperforming loans [a]


831,330


738,825


678,383


721,699


797,337

Foreclosed real estate


14,871


20,642


20,833


17,381


13,752

Other repossessed assets


8,599


13,338


10,930


17,584


13,040

Total nonperforming assets


$    854,800


$    772,805


$       710,146


$         756,664


$ 824,129












TDRs accruing and past due less than 90 days


$      95,788


$      97,404


$         97,901


$           97,218


$ 112,383












Total nonperforming loans as a % of loans


1.21 %


1.09 %


1.06 %


1.14 %


1.26 %

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


1.25


1.14


1.11


1.19


1.30














Three Months Ended



2020


2019



June 30


March 31


December 31


September 30


June 30

ALLOWANCE FOR LOAN LOSSES











Balance at beginning of period


$ 1,351,072


$    920,993


$       942,191


$         977,660


$ 966,022

Adoption of ASC 326



184,931




Net charge-offs (NCO)


123,054


111,798


140,703


176,098


143,380

Provision for loan losses


526,334


356,946


119,505


140,629


155,018

Balance at end of period


$ 1,754,352


$ 1,351,072


$       920,993


$         942,191


$ 977,660












Allowance for loan losses as a % of total loans


2.57 %


2.00 %


1.44 %


1.49 %


1.54 %

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


211.03


182.87


135.76


130.55


122.62

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


205.24


174.83


129.69


124.52


118.63












Annualized as a % of average loans:











NCO - QTD


0.72


0.69


0.87


1.10


0.90

NCO - YTD


0.71


0.69


0.88


0.88


0.77












[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 June 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

$          69,256,412


$               680,157


3.95 %


$          64,056,915


$               799,680


5.01 %

Debt securities available for sale [a]

5,780,912


18,805


1.31


8,983,280


45,125


2.01

Debt securities held to maturity

8,207,298


40,635


1.99


4,744,584


34,458


2.91

Other earning assets [b]

10,880,694


15,173


0.56


5,470,510


36,424


2.67

Total earning assets [a]

94,125,316


754,770


3.23


83,255,289


915,687


4.41

Allowance for credit losses

(1,375,912)






(974,772)





Unrealized gain (loss) on debt securities available for sale

121,811






(102,830)





Other assets

11,332,847






11,275,152





Total assets

$        104,204,062






$          93,452,839

















Liabilities and Shareholder's Equity












Interest bearing liabilities:












Interest bearing demand deposits

$          14,153,639


$                 13,430


0.38


$            9,304,889


$                 26,536


1.14

Savings and money market accounts

35,742,490


43,943


0.49


27,643,291


88,203


1.28

Certificates and other time deposits

9,425,849


39,906


1.70


15,452,630


87,739


2.28

Total interest bearing deposits

59,321,978


97,279


0.66


52,400,810


202,478


1.55

FHLB and other borrowings

3,567,010


21,936


2.47


4,026,581


34,300


3.42

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

1,192,030


12,274


4.14


466,926


6,002


5.16

Other short-term borrowings

12,588


39


1.25


7,402


100


5.42

Total interest bearing liabilities

64,093,606


131,528


0.83


56,901,719


242,880


1.71

Noninterest bearing deposits

24,225,740






20,286,244





Other noninterest bearing liabilities

4,351,709






2,482,865





Total liabilities

92,671,055






79,670,828





Shareholder's equity

11,533,007






13,782,011





Total liabilities and shareholder's equity

$        104,204,062






$          93,452,839

















Net interest income/ net interest spread



623,242


2.40 %




672,807


2.70 %

Net yield on earning assets





2.66 %






3.24 %













Total taxable equivalent adjustment



11,225






13,058















Net interest income



$               612,017






$               659,749




[a] Excludes adjustment for market valuation.

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

 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)
















Six Months Ended June 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


$              67,065,753


$                1,406,689


4.22 %


$              64,765,717


$                1,612,095


5.02 %

Debt securities available for sale [a]


6,225,236


17,313


0.56


9,450,246


98,647


2.11

Debt securities held to maturity


7,699,732


82,715


2.16


4,391,400


65,223


3.00

Other earning assets [b]


9,308,376


58,470


1.26


4,367,314


59,931


2.77

Total earning assets [a]


90,299,097


1,565,187


3.49


82,974,677


1,835,896


4.46

Allowance for credit losses


(1,220,331)






(942,398)





Unrealized gain (loss) on debt securities available for sale


76,720






(145,133)





Other assets


11,124,601






11,333,502





Total assets


$            100,280,087






$              93,220,648


















Liabilities and Shareholder's Equity













Interest bearing liabilities:













Interest bearing demand deposits


$              12,926,063


37,981


0.59


$                8,997,002


46,882


1.05

Savings and money market accounts


33,860,391


128,735


0.76


27,432,104


165,112


1.21

Certificates and other time deposits


10,168,696


95,305


1.88


15,782,736


172,838


2.21

Total interest bearing deposits


56,955,150


262,021


0.93


52,211,842


384,832


1.49

FHLB and other borrowings


3,651,605


43,112


2.37


4,157,923


71,926


3.49

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


1,321,766


34,932


5.31


439,577


9,749


4.47

Other short-term borrowings


16,312


391


4.82


17,702


296


3.37

Total interest bearing liabilities


61,944,833


340,456


1.11


56,827,044


466,803


1.66

Noninterest bearing deposits


22,259,622






20,234,941





Other noninterest bearing liabilities


3,558,821






2,446,939





Total liabilities


87,763,276






79,508,924





Shareholder's equity


12,516,811






13,711,724





Total liabilities and shareholder's equity


$            100,280,087






$              93,220,648


















Net interest income/ net interest spread




1,224,731


2.38 %




1,369,093


2.80 %

Net yield on earning assets






2.73 %






3.33 %














Total taxable equivalent adjustment




23,259






26,255
















Net interest income




$                1,201,472






$                1,342,838




[a] Excludes adjustment for market valuation.

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

 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)




















Six Months




Three Months Ended



Ended June 30,


%


2020


2019



2020


2019


Change


June 30


March 31


December 31


September 30


June 30

NONINTEREST INCOME

















Service charges on deposit accounts


$   105,764


$   120,639


(12)


$   44,233


$      61,531


$            64,585


$              65,143


$   61,731

Card and merchant processing fees


93,507


96,357


(3)


43,416


50,091


50,805


50,385


50,355

Investment services sales fees


59,378


58,029


2


24,971


34,407


28,130


29,287


31,333

Investment banking and advisory fees


71,792


39,615


81


45,061


26,731


15,720


28,324


20,758

Money transfer income


50,009


47,253


6


25,461


24,548


25,871


26,020


25,272

Corporate and correspondent investment sales


29,572


12,499


137


18,855


10,717


14,263


11,799


5,607

Asset management fees


23,464


22,634


4


11,560


11,904


11,532


11,405


11,867

Mortgage banking


41,319


10,807


282


23,868


17,451


9,048


8,204


5,870

Bank owned life insurance


9,719


9,387


4


5,094


4,625


4,584


3,508


4,803

Other


99,456


115,863


(14)


26,358


73,098


48,046


66,241


66,685



583,980


533,083


10


268,877


315,103


272,584


300,316


284,281

Investment securities gains, net


22,616


8,958


152


3,477


19,139



21,003


Total noninterest income


$   606,596


$   542,041


12


$ 272,354


$    334,242


$          272,584


$            321,319


$ 284,281


















NONINTEREST EXPENSE

















Salaries, benefits and commissions


$   561,833


$   589,019


(5)


$ 251,697


$    310,136


$          297,823


$            295,092


$ 296,303

Equipment


129,433


128,032


1


64,752


64,681


64,826


63,908


62,638

Professional services


148,320


137,680


8


78,100


70,220


82,343


72,903


73,784

Net occupancy


81,428


81,057



41,585


39,843


43,302


42,241


40,116

Money transfer expense


35,094


32,268


9


17,958


17,136


17,951


18,005


17,290

Marketing


20,677


26,805


(23)


8,778


11,899


12,888


15,471


16,412

Communications


11,179


11,134



5,808


5,371


5,179


5,469


5,733

Goodwill impairment


2,185,000



 NM 



2,185,000


470,000



Other


215,546


174,292


24


110,772


104,774


92,594


85,798


86,038

Total noninterest expense


$3,388,510


$1,180,287


187


$ 579,450


$ 2,809,060


$       1,086,906


$            598,887


$ 598,314


















NM = Not meaningful











 

BBVA USA BANCSHARES, INC.

(Unaudited)

(Dollars in Thousands)



















Six Months



Three Months Ended



Ended June 30,



2020


2019



2020


2019



June 30


March 31


December 31


September 30


June 30

NON-GAAP RECONCILIATION
















Computation of Operating Income:
















Net interest income (GAAP)


$     1,201,472


$   1,342,838



$        612,017


$     589,455


$          623,154


$            641,041


$      659,749

Plus: noninterest income (GAAP)


606,596


542,041



272,354


334,242


272,584


321,319


284,281

Less: noninterest expense (GAAP)


3,388,510


1,180,287



579,450


2,809,060


1,086,906


598,887


598,314

Plus: goodwill impairment (GAAP)


2,185,000





2,185,000


470,000



Operating income (non-GAAP)


$        604,558


$      704,592



$        304,921


$     299,637


$          278,832


$            363,473


$      345,716

















Computation of Tangible Shareholder's Equity:
















Total shareholder's equity


$   11,270,789


$ 13,870,723



$   11,270,789


$11,358,354


$     13,386,589


$       14,101,618


$ 13,870,723

Less: goodwill and other intangibles (GAAP)


2,357,343


5,025,274



2,357,343


2,359,540


4,555,330


5,020,573


5,025,274

Tangible shareholder's equity (non-GAAP)


$     8,913,446


$   8,845,449



$     8,913,446


$  8,998,814


$       8,831,259


$         9,081,045


$   8,845,449

















Computation of Average Tangible Equity:
















Total stockholder's equity (average) (GAAP)


$   12,516,811


$ 13,711,724



$   11,533,007


$13,500,615


$     14,090,315


$       14,056,939


$ 13,782,011

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


3,441,938


5,033,348



2,357,132


4,526,744


5,016,935


5,023,480


5,031,129

Average tangible equity (non-GAAP) [B]


$     9,074,873


$   8,678,376



$     9,175,875


$  8,973,871


$       9,073,380


$         9,033,459


$   8,750,882

Net income (loss) (GAAP) [A]


$   (2,361,722)


$      301,167



$      (124,437)


$ (2,237,285)


$         (330,705)


$            182,945


$      160,186

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


(52.34)%


7.00 %



(5.45)%


(100.27)%


(14.46)%


8.03 %


7.34 %

















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







Net income (loss) (GAAP)


$   (2,361,722)


$      301,167



$      (124,437)


$ (2,237,285)


$         (330,705)


$            182,945


$      160,186

Plus: goodwill impairment (GAAP)


2,185,000





2,185,000


470,000



Adjusted net income (non-GAAP) [C]


$      (176,722)


$      301,167



$      (124,437)


$      (52,285)


$          139,295


$            182,945


$      160,186

Average assets (GAAP) [D]


$ 100,280,087


$ 93,220,648



$ 104,204,062


$96,356,113


$     95,754,954


$       94,942,456


$ 93,452,839

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


(0.35)%


0.65 %



(0.48)%


(0.22)%


0.58 %


0.76 %


0.69 %

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


(3.92)


7.00



(5.45)


(2.34)


6.09


8.03


7.34

















Computation of Efficiency Ratio:
















Noninterest expense (GAAP)


$     3,388,510


$   1,180,287



$        579,450


$  2,809,060


$       1,086,906


$            598,887


$      598,314

Less: securities and goodwill impairment (GAAP)


2,185,000


113




2,185,000


470,102



113

Total expense (GAAP) [E]


$     1,203,510


$   1,180,174



$        579,450


$     624,060


$          616,804


$            598,887


$      598,201

Net interest income, taxable equivalent basis


$     1,224,731


$   1,369,093



$        623,242


$     601,489


$          635,552


$            653,926


$      672,807

Plus: noninterest income (GAAP)


606,596


542,041



272,354


334,242


272,584


321,319


284,281

Less: investment securities gains, net (GAAP)


22,616


8,958



3,477


19,139



21,003


Total revenue [F]


$     1,808,711


$   1,902,176



$        892,119


$     916,592


$          908,136


$            954,242


$      957,088

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


66.54 %


62.04 %



64.95 %


68.08 %


67.92 %


62.76 %


62.50 %

 

BBVA USA BANCSHARES, INC.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)


















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,
Nonaccrual, or TDR


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


$                           —


















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


$                           —

















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
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


$                           —


















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.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)


















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.

BALANCE SHEET (Unaudited)

(Dollars in Thousands)












2020


2019


June 30


March 31


December 31


September 30


June 30

Assets:










Cash and due from banks

$     1,019,127


$   1,033,733


$      1,149,734


$       1,117,458


$   1,027,400

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

11,738,063


4,479,535


5,788,964


5,356,141


4,773,761

Cash and cash equivalents

12,757,190


5,513,268


6,938,698


6,473,599


5,801,161

Trading account assets

1,016,966


1,009,130


473,976


564,000


440,098

Debt securities available for sale

5,765,192


6,344,816


7,235,305


7,612,590


9,010,950

Debt securities held to maturity, net

8,693,437


7,876,266


6,797,046


6,334,634


4,912,483

Loans held for sale

245,851


117,752


112,058


134,314


90,537

Loans

68,241,500


67,539,414


63,946,857


63,320,571


63,311,553

Allowance for loan losses

(1,754,352)


(1,351,072)


(920,993)


(942,191)


(977,660)

Net loans

66,487,148


66,188,342


63,025,864


62,378,380


62,333,893

Premises and equipment, net

1,070,358


1,068,741


1,087,698


1,085,635


1,105,819

Bank owned life insurance

754,908


754,409


750,224


746,819


745,130

Goodwill

2,328,296


2,328,296


4,513,296


4,983,296


4,983,296

Other assets

3,148,270


3,124,539


2,669,182


2,600,820


2,760,678

Total assets

$ 102,267,616


$ 94,325,559


$    93,603,347


$     92,914,087


$ 92,184,045

Liabilities:










Deposits:










Noninterest bearing

$   25,978,354


$ 20,418,504


$    21,850,216


$     21,019,303


$ 20,646,209

Interest bearing

59,448,060


56,816,003


53,135,067


52,550,139


51,942,601

Total deposits

85,426,414


77,234,507


74,985,283


73,569,442


72,588,810

FHLB and other borrowings

3,571,933


3,790,137


3,690,044


3,709,949


4,052,969

Federal funds purchased and securities sold under agreements to repurchase

249,481


409,784


173,028


117,421


191,739

Other short-term borrowings

1,619




45


2,067

Accrued expenses and other liabilities

1,747,380


1,532,777


1,368,403


1,415,612


1,477,737

Total liabilities

90,996,827


82,967,205


80,216,758


78,812,469


78,313,322

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

14,035,607


14,039,572


14,043,727


14,359,966


14,364,527

Retained deficit

(3,430,135)


(3,305,226)


(917,227)


(585,859)


(768,290)

Accumulated other comprehensive income (loss)

404,165


362,339


(1,072)


66,009


13,508

Total BBVA USA Bancshares, Inc. shareholder's equity

11,241,342


11,328,390


13,357,133


14,071,821


13,841,450

Noncontrolling interests

29,447


29,964


29,456


29,797


29,273

Total shareholder's equity

11,270,789


11,358,354


13,386,589


14,101,618


13,870,723

Total liabilities and shareholder's equity

$ 102,267,616


$ 94,325,559


$    93,603,347


$     92,914,087


$ 92,184,045

 

BBVA USA BANCSHARES, INC.

INCOME STATEMENT (Unaudited)

(Dollars in Thousands)












Three Months Ended


2020


2019


June 30


March 31


December 31


September 30


June 30

Interest income:










Interest and fees on loans

$    669,767


$        715,476


$         738,140


$          771,245


$   787,767

Interest on debt securities available for sale

18,805


(1,492)


33,333


36,051


45,125

Interest on debt securities held to maturity

39,800


41,102


43,097


38,893


33,313

Interest on trading account assets

1,157


1,122


1,326


487


601

Interest and dividends on other earning assets

14,016


42,175


39,915


46,528


35,823

Total interest income

743,545


798,383


855,811


893,204


902,629

Interest expense:










Interest on deposits

97,279


164,742


189,345


203,979


202,478

Interest on FHLB and other borrowings

21,936


21,176


31,263


32,975


34,300

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

12,274


22,658


11,850


15,137


6,002

Interest on other short-term borrowings

39


352


199


72


100

Total interest expense

131,528


208,928


232,657


252,163


242,880

Net interest income

612,017


589,455


623,154


641,041


659,749

Provision for credit losses

539,459


356,991


119,505


140,629


155,018

Net interest income after provision for credit losses

72,558


232,464


503,649


500,412


504,731

Noninterest income:










Service charges on deposit accounts

44,233


61,531


64,585


65,143


61,731

Card and merchant processing fees

43,416


50,091


50,805


50,385


50,355

Investment services sales fees

24,971


34,407


28,130


29,287


31,333

Investment banking and advisory fees

45,061


26,731


15,720


28,324


20,758

Money transfer income

25,461


24,548


25,871


26,020


25,272

Asset management fees

11,560


11,904


11,532


11,405


11,867

Corporate and correspondent investment sales

18,855


10,717


14,263


11,799


5,607

Mortgage banking

23,868


17,451


9,048


8,204


5,870

Bank owned life insurance

5,094


4,625


4,584


3,508


4,803

Investment securities gains, net

3,477


19,139



21,003


Other

26,358


73,098


48,046


66,241


66,685

Total noninterest income

272,354


334,242


272,584


321,319


284,281

Noninterest expense:










Salaries, benefits and commissions

251,697


310,136


297,823


295,092


296,303

Equipment

64,752


64,681


64,826


63,908


62,638

Professional services

78,100


70,220


82,343


72,903


73,784

Net occupancy

41,585


39,843


43,302


42,241


40,116

Money transfer expense

17,958


17,136


17,951


18,005


17,290

Marketing

8,778


11,899


12,888


15,471


16,412

Communications

5,808


5,371


5,179


5,469


5,733

Goodwill impairment


2,185,000


470,000



Other

110,772


104,774


92,594


85,798


86,038

Total noninterest expense

579,450


2,809,060


1,086,906


598,887


598,314

Net (loss) income before income tax expense

(234,538)


(2,242,354)


(310,673)


222,844


190,698

Income tax (benefit) expense

(110,101)


(5,069)


20,032


39,899


30,512

Net (loss) income

(124,437)


(2,237,285)


(330,705)


182,945


160,186

Less: net income attributable to noncontrolling interests

472


501


663


514


599

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

$   (124,909)


$   (2,237,786)


$       (331,368)


$          182,431


$   159,587

 

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SOURCE BBVA USA