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HOUSTON, Jan. 29, 2021 /PRNewswire/ -- BBVA USA Bancshares, Inc., a Sunbelt-based bank holding company (BBVA USA), reported today net income of $334 million for the fourth quarter of 2020 compared to net income of $166 million in the third quarter of 2020 and a net loss of $331 million in the fourth quarter of 2019. Included in the fourth quarter of 2019 was a non-cash, goodwill impairment charge of $470 million. Excluding the impact of this non-cash charge, adjusted net income1 for the fourth quarter of 2019 was $139 million. Return on average assets and return on average tangible equity1 for the fourth quarter of 2020 were 1.27 percent and 14.38 percent, respectively. For the full-year of 2020, the company reported a net loss of $1.9 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 and a $470 million goodwill impairment charge in the fourth quarter of 2019, adjusted net income1 for the full-year of 2020 was $323 million compared to adjusted net income1 of $623 million for the full-year of 2019. "While we continue to navigate the challenges amid the pandemic, our results for the fourth quarter are a testament to the strength and resiliency of the team we have at BBVA USA and their focus on serving our customers and the communities where we live and work," said Javier Rodrguez Soler, president and CEO of BBVA USA. "Momentum continued in the quarter highlighted by strong revenue growth and well-contained expenses which allowed us to deliver record operating income. At the same time, we continue to maintain strong liquidity and capital positions. We enter the new year focused on continuing to meet the challenges ahead, and subject to regulatory approval and closing, successfully integrating our operations with PNC and the opportunities that this combination will bring to our customers, our communities and to our employees." Total revenue for the fourth quarter of 2020 was $969 million, up 18 percent (annualized) from third quarter 2020 levels and up 8 percent from fourth quarter 2019 levels. Net interest income in the quarter totaled $667 million, up 16 percent (annualized) from the $642 million recorded in the third quarter of 2020, and up 7 percent from the $623 million recorded in the fourth quarter of 2019. The percent net interest margin for the fourth quarter of 2020 was 2.78 percent compared to 2.68 percent in the third quarter of 2020 and 2.96 percent in the fourth quarter of 2019. Noninterest income for the fourth quarter of 2020 totaled $301 million, up 24 percent (annualized) from the $285 million reported in the third quarter of 2020, and up 11 percent from the $273 million reported in the fourth quarter of 2019. The increase in noninterest income on a linked quarter basis was driven by an increase in corporate and correspondent investment sales (+$13 million), mortgage banking (+$6 million), service charges on deposit accounts (+$5 million) and money transfer income (+$2 million). Following two consecutive strong quarters, investment banking and advisory fees slowed on a linked quarter basis (-$14 million) but showed solid growth (+$11 million) compared to fourth quarter 2019 levels. For the full-year of 2020, noninterest income (excluding securities gains) totaled $1.2 billion, up 6 percent compared to full-year 2019 results. No gains or losses were recorded on the sale of investment securities in the fourth quarter of 2020, in the third quarter of 2020 and in the fourth quarter of 2019. For the full-year of 2020, investment securities gains totaled $23 million compared to $30 million for the full-year of 2019. Total noninterest expense for the fourth quarter of 2020 was $578 million, down 12 percent (annualized) from the $596 million reported in the third quarter of 2020 and down 6 percent compared to adjusted noninterest expense (excluding goodwill impairment) for the fourth quarter of 2019. On a linked quarter basis, the decline in noninterest expense was due to a decrease in other noninterest expense (-$27 million) offset, in part, by increases in salaries, benefits and commissions (+$4 million) and professional services (+$3 million). The decrease in other noninterest expense was primarily driven by a decline in provision for unfunded commitments. The increase in revenue coupled with the decline in noninterest expense resulted in positive operating leverage both on a linked quarter basis and compared to the year ago quarter. Operating income1 for the fourth quarter of 2020 was a record $391 million compared to $331 million in the third quarter of 2020 and $279 million in the fourth quarter of 2019. The efficiency ratio1 for the fourth quarter of 2020 was 58.98 percent compared to 63.55 percent for the third quarter of 2020 and 67.92 percent for the fourth quarter of 2019. Total loans at the end of the fourth quarter of 2020 were $65.8 billion, down 4 percent (annualized) from $66.4 billion at the end of the third quarter of 2020 and up 3 percent from the $64.1 billion at the end of the fourth quarter of 2019. Commercial loans associated with the energy sector were $2.4 billion compared to $2.5 billion at the end of the third quarter of 2020 and $2.9 billion at the fourth quarter of 2019. During the quarter, newly funded loans totaled $4.4 billion bringing the total to more than $20.2 billion for the full year of 2020, a 21 percent increase compared to the full-year of 2019. Included in 2020 results is approximately $3.3 billion of newly funded loans under the Payroll Protection Program. Total deposits at the end of the fourth quarter of 2020 were $85.9 billion, down 2 percent (annualized) from the third quarter of 2020 and up $10.9 billion or 15 percent compared to the fourth quarter of 2019. Noninterest bearing demand deposits totaled $27.8 billion, up 15 percent (annualized) on a linked quarter basis and up $5.9 billion or 27 percent compared to the fourth quarter of 2019. Interest bearing transaction accounts (checking, savings and money market accounts) totaled $53.4 billion at the end of the fourth quarter of 2020, relatively unchanged on a linked quarter basis and up $12.3 billion or 30 percent compared to the fourth quarter a year ago. The loan to deposit ratio at the end of the fourth quarter of 2020 was 76.6 percent compared to 76.9 percent at the end of the third quarter of 2020 and 85.4 percent at the end of the fourth quarter of 2019. The LCR ratio was unchanged from third quarter 2020 levels at 144 percent and consistent with the 145 percent reported at the end of fourth quarter of 2019. During the fourth quarter of 2020, the company recorded provision recapture of credit losses totaling $81 million compared to provision for credit losses of $151 million in the third quarter of 2020 and $120 million in the fourth quarter of 2019. The recapture of provision expense primarily reflected improvements in macroeconomic factors and forecasts. Net charge-offs as a percentage of average total loans were 34 basis points in the quarter compared to 59 basis points in the third quarter of 2020 and 87 basis points in the fourth quarter of 2019. The allowance for loans losses as a percentage of total loans at the end of the 2020 was 2.56 percent compared to 2.73 percent at the end of the third quarter of 2020 and 1.44 percent at the end of the prior year. Nonperforming loans as a percentage of total loans ended the fourth quarter at 2.21 percent, up from the 2.00 percent at the end of the third quarter of 2020 and 1.06 percent at the end of the fourth quarter of 2019. The increase in nonperforming loans on a linked quarter basis was primarily attributable to an increase in nonaccrual loans associated with commercial real estate mortgage (+$166 million), residential real estate mortgage (+$31 million) and real estate construction (+$13 million), offset in part by a decrease in nonaccrual loans associated with the commercial loan portfolio (-$120 million). Also contributing to the rise in nonperforming loans was an increase in loans 90 days or more past due which totaled $122 million at the end of the fourth quarter of 2020 compared to $94 million at the end of the third quarter of 2020. The coverage ratio of nonperforming loans ended the quarter at 116 percent compared to 136 percent at the end of the third quarter of 2020 and 136 percent at the end of the fourth quarter of 2019. Total shareholder's equity at the end of the fourth quarter of 2020 totaled $11.7 billion compared to $11.4 billion at the end of the third quarter of 2020 and $13.4 billion at the end of the fourth quarter of 2019. Total tangible shareholder's equity1 totaled $9.3 billion at the end of the fourth quarter of 2020 compared to $9.0 billion at the end of the third quarter of 2020 and $8.8 billion at the end of the fourth quarter of 2019. The CET12 ratio ended the quarter at 13.28 percent compared to 12.79 percent at the end of the third quarter of 2020 and 12.49 percent at the end of the fourth quarter of 2019. All of BBVA USA's regulatory capital ratios2 continue to exceed the requirements under "well-capitalized" guidelines. On November 16, 2020, BBVA announced that it had signed a definitive agreement to sell BBVA USA Bancshares, Inc., including its U.S. banking subsidiary, BBVA USA, to PNC Financial Services Group, Inc. Pending regulatory and other customary approvals, the transaction is expected to close in mid-2021. 1Operating income, adjusted net income, efficiency ratio and tangible shareholder's equity are Non-GAAP financial measures we believe aid in understanding certain areas of our performance. The calculation of these measures is included on the page titled Non-GAAP Reconciliation. 2Regulatory capital ratios at December 31, 2020, are estimated. For more BBVA news visit, www.bbva.comand the U.S. Newsroom. Additional news updates can be found via Twitterand 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 [emailprotected]. BBVA USA In the U.S., BBVA is a Sunbelt-based financial institution that operates 637 branches, including 328 inTexas, 88 inAlabama, 63 inArizona, 61 inCalifornia, 43 inFlorida, 37 inColoradoand 17 inNew Mexico. The bank ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks inAlabama(2nd),Texas(4th) andArizona(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 December 31, % Years Ended December 31, % 2020 2019 Change 2020 2019 Change EARNINGS SUMMARY Net interest income $ 667,202 $ 623,154 7 $ 2,510,524 $ 2,607,033 (4) Noninterest income [a] 301,416 272,584 11 1,170,056 1,105,983 6 Total revenue [a] 968,618 895,738 8 3,680,580 3,713,016 (1) Investment securities gain, net 22,616 29,961 (25) Provision for credit losses (81,298) 119,505 (168) 966,129 597,444 62 Goodwill impairment 470,000 NM 2,185,000 470,000 365 Noninterest expense 577,580 616,906 (6) 2,376,718 2,396,080 (1) Pretax (loss) income 472,336 (310,673) NM (1,824,651) 279,453 (753) Income tax (benefit) expense 138,519 20,032 591 37,013 126,046 (71) Net (loss) income $ 333,817 $ (330,705) NM $ (1,861,664) $ 153,407 (1,314) Adjusted net (loss) income [b] $ 333,817 $ 139,295 140 $ 323,336 $ 623,407 (48) SELECTED RATIOS Return on average assets 1.27 % (1.37)% (1.83)% 0.16 % Return on average assets- adjusted [b] 1.27 0.58 0.32 0.66 Return on average tangible equity [b] 14.38 (14.46) (20.44) 1.73 Return on average tangible equity- adjusted [b] 14.38 6.09 3.55 7.03 Efficiency ratio [b] 58.98 67.92 63.80 63.64 Average common equity to average assets 10.81 14.44 11.51 14.46 Average loans to average total deposits 77.07 86.29 81.34 88.04 Common equity tier I capital (CET1) [c] 13.28 12.49 13.28 12.49 Tier I capital ratio [c] 13.61 12.83 13.61 12.83 Total capital ratio [c] 15.78 14.98 15.78 14.98 Leverage ratio [c] 9.07 9.70 9.07 9.70 Average for Three Months Average for Year Ending Balance Ended December 31, % Ended December 31, % December 31, % 2020 2019 Change 2020 2019 Change 2020 2019 Change BALANCE SHEET HIGHLIGHTS Total loans $ 66,212,070 $ 63,956,453 4 $ 67,045,078 $ 64,275,473 4 $ 65,796,353 $ 64,058,915 3 Total debt securities 15,639,628 13,792,727 13 14,519,143 13,725,672 6 16,297,042 14,032,351 16 Earning assets 97,057,560 85,135,405 14 93,694,488 83,839,035 12 96,139,619 84,712,261 13 Total assets 104,835,589 95,754,954 9 102,008,134 94,293,422 8 102,756,203 93,603,347 10 Noninterest bearing demand deposits 27,425,253 21,288,781 29 24,506,957 20,631,434 19 27,791,421 21,850,216 27 Interest bearing transaction accounts 53,074,596 39,773,454 33 49,723,165 37,595,208 32 53,381,931 41,081,638 30 Total transaction accounts 80,499,849 61,062,235 32 74,230,122 58,226,642 27 81,173,352 62,931,854 29 Total deposits 85,906,838 74,122,266 16 82,426,860 73,007,106 13 85,858,381 74,985,283 15 Total shareholder's equity 11,595,287 14,090,315 (18) 12,003,167 13,894,163 (14) 11,691,362 13,386,589 (13) Total shareholder's equity - tangible [b] 9,236,590 9,073,380 2 $ 9,105,998 $ 8,867,440 3 9,332,389 8,831,259 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) 2020 2019 December 31 September 30 June 30 March 31 December 31 NONPERFORMING ASSETS Nonaccrual loans [a] $ 1,331,230 $ 1,233,040 $ 764,744 $ 676,716 $ 606,843 Loans 90 days or more past due [b] 121,570 94,072 66,163 61,774 71,126 TDRs 90 days or more past due 556 830 423 335 414 Total nonperforming loans [a] 1,453,356 1,327,942 831,330 738,825 678,383 Foreclosed real estate 11,448 15,051 14,871 20,642 20,833 Other repossessed assets 5,846 8,527 8,599 13,338 10,930 Total nonperforming assets $ 1,470,650 $ 1,351,520 $ 854,800 $ 772,805 $ 710,146 TDRs accruing and past due less than 90 days $ 114,334 $ 114,583 $ 95,788 $ 97,404 $ 97,901 Total nonperforming loans as a % of loans 2.21 % 2.00 % 1.21 % 1.09 % 1.06 % Total nonperforming assets as a % of total loans, foreclosed real estate, and other repossessed assets 2.23 2.03 1.25 1.14 1.11 Three Months Ended 2020 2019 December 31 September 30 June 30 March 31 December 31 ALLOWANCE FOR LOAN LOSSES Balance at beginning of period $ 1,804,423 $ 1,754,352 $1,351,072 $ 920,993 $ 942,191 Adoption of ASC 326 - - - 184,931 - Net charge-offs (NCO) 56,578 100,818 123,054 111,798 140,703 Provision for loan losses (68,371) 150,889 526,334 356,946 119,505 Balance at end of period $ 1,679,474 $ 1,804,423 $1,754,352 $1,351,072 $ 920,993 Allowance for loan losses as a % of total loans 2.56 % 2.73 % 2.57 % 2.00 % 1.44 % Allowance for loan losses as a % of nonperforming loans [c] 115.56 135.88 211.03 182.87 135.76 Allowance for loan losses as a % of nonperforming assets [c] 114.20 133.51 205.24 174.83 129.69 Annualized as a % of average loans: NCO - QTD 0.34 0.59 0.72 0.69 0.87 NCO - YTD 0.59 0.67 0.71 0.69 0.88 [a] Includes loans held for sale. [b] Excludes loans classified as troubled debt restructuring (TDRs). [c] Includes loans held for sale that are on nonaccrual status. BBVA USA BANCSHARES, INC. (Unaudited) (Dollars in Thousands) Three Months Ended December 31, 2020 2019 AverageBalance Income/Expense Yield/Rate AverageBalance Income/Expense Yield/Rate YIELD/RATE ANALYSIS (Taxable Equivalent Basis) Assets Earning assets: Loans $ 66,212,070 $ 636,738 3.83 % $ 63,956,453 $ 749,428 4.65 % Debt securities available for sale [a] 5,533,487 22,089 1.59 7,223,333 33,333 1.83 Debt securities held to maturity 9,988,959 61,570 2.45 6,576,786 44,207 2.67 Other earning assets [b] 15,205,862 7,873 0.21 7,386,225 41,241 2.22 Total earning assets [a] 96,940,378 728,270 2.99 85,142,797 868,209 4.05 Allowance for credit losses (1,776,160) (944,773) Unrealized gain (loss) on debt securities available for sale 117,182 (7,392) Other assets 9,554,189 11,564,322 Total assets $ 104,835,589 $ 95,754,954 Liabilities and Shareholder's Equity Interest bearing liabilities: Interest bearing demand deposits $ 14,540,342 6,812 0.19 $ 9,329,342 23,648 1.01 Savings and money market accounts 38,534,254 13,526 0.14 30,444,112 93,114 1.21 Certificates and other time deposits 5,406,989 13,607 1.00 13,060,031 72,583 2.20 Total interest bearing deposits 58,481,585 33,945 0.23 52,833,485 189,345 1.42 FHLB and other borrowings 3,552,199 14,092 1.58 3,701,993 31,263 3.35 Federal funds purchased and securities sold under agreement to repurchase [b] 864,177 2,350 1.08 1,137,573 11,850 4.13 Other short-term borrowings 10,113 85 3.34 11,189 199 7.06 Total interest bearing liabilities 62,908,074 50,472 0.32 57,684,240 232,657 1.60 Noninterest bearing deposits 27,425,253 21,288,781 Other noninterest bearing liabilities 2,906,975 2,691,618 Total liabilities 93,240,302 81,664,639 Shareholder's equity 11,595,287 14,090,315 Total liabilities and shareholder's equity $ 104,835,589 $ 95,754,954 Net interest income/ net interest spread 677,798 2.67 % 635,552 2.45 % Net yield on earning assets 2.78 % 2.96 % Total taxable equivalent adjustment 10,596 12,398 Net interest income $ 667,202 $ 623,154 [a] Excludes adjustment for market valuation. [b] Yield/rate reflects impact of balance sheet offsetting. BBVA USA BANCSHARES, INC. (Unaudited) (Dollars in Thousands) Years Ended December 31, 2020 2019 AverageBalance Income/Expense Yield/Rate AverageBalance Income/Expense Yield/Rate YIELD/RATE ANALYSIS (Taxable Equivalent Basis) Assets Earning assets: Loans $ 67,045,078 $ 2,698,114 4.02 % $ 64,275,473 $ 3,144,471 4.89 % Debt securities available for sale [a] 5,825,301 58,876 1.01 8,520,287 168,031 1.97 Debt securities held to maturity 8,593,882 195,032 2.27 5,281,585 149,505 2.83 Other earning assets [b] 12,130,267 73,671 0.61 5,837,890 148,187 2.54 Total earning assets [a] 93,594,528 3,025,693 3.23 83,915,235 3,610,194 4.30 Allowance for credit losses (1,497,922) (950,306) Unrealized gain (loss) on debt securities available for sale 99,960 (76,200) Other assets 9,811,568 11,404,693 Total assets $ 102,008,134 $ 94,293,422 Liabilities and Shareholder's Equity Interest bearing liabilities: Interest bearing demand deposits $ 13,649,238 54,570 0.40 $ 9,048,948 95,709 1.06 Savings and money market accounts 36,073,927 168,737 0.47 28,546,260 354,286 1.24 Certificates and other time deposits 8,196,738 133,806 1.63 14,780,464 328,161 2.22 Total interest bearing deposits 57,919,903 357,113 0.62 52,375,672 778,156 1.49 FHLB and other borrowings 3,605,422 71,848 1.99 3,968,094 136,164 3.43 Federal funds purchased and securities sold under agreement to repurchase [b] 1,249,629 41,018 3.28 857,922 36,736 4.28 Other short-term borrowings 12,158 525 4.32 14,963 567 3.79 Total interest bearing liabilities 62,787,112 470,504 0.75 57,216,651 951,623 1.66 Noninterest bearing deposits 24,506,957 20,631,434 Other noninterest bearing liabilities 2,710,898 2,551,174 Total liabilities 90,004,967 80,399,259 Shareholder's equity 12,003,167 13,894,163 Total liabilities and shareholder's equity $ 102,008,134 $ 94,293,422 Net interest income/ net interest spread 2,555,189 2.48 % 2,658,571 2.64 % Net yield on earning assets 2.73 % 3.17 % Total taxable equivalent adjustment 44,665 51,538 Net interest income $ 2,510,524 $ 2,607,033 [a] Excludes adjustment for market valuation. [b] Yield/rate reflects impact of balance sheet offsetting. BBVA USA BANCSHARES, INC. (Unaudited) (Dollars in Thousands) Year Ended Three Months Ended December 31, % 2020 2019 2020 2019 Change December 31 September 30 June 30 March 31 December 31 NONINTEREST INCOME Service charges on deposit accounts $ 219,783 $ 250,367 (12) $ 59,309 $ 54,710 $ 44,233 $ 61,531 $ 64,585 Card and merchant processing fees 192,096 197,547 (3) 49,961 48,628 43,416 50,091 50,805 Investment services sales fees 112,243 115,446 (3) 26,647 26,218 24,971 34,407 28,130 Investment banking and advisory fees 138,096 83,659 65 26,291 40,013 45,061 26,731 15,720 Money transfer income 106,564 99,144 7 29,446 27,109 25,461 24,548 25,871 Asset management fees 48,101 45,571 6 12,613 12,024 11,560 11,904 11,532 Corporate and correspondent investment sales 49,318 38,561 28 16,268 3,478 18,855 10,717 14,263 Mortgage banking 74,813 28,059 167 19,753 13,741 23,868 17,451 9,048 Bank owned life insurance 20,149 17,479 15 5,458 4,972 5,094 4,625 4,584 Other 208,893 230,150 (9) 55,670 53,767 26,358 73,098 48,046 1,170,056 1,105,983 6 301,416 284,660 268,877 315,103 272,584 Investment securities gains, net 22,616 29,961 (25) 3,477 19,139 Total noninterest income $ 1,192,672 $ 1,135,944 5 $ 301,416 $ 284,660 $ 272,354 $ 334,242 $ 272,584 NONINTEREST EXPENSE Salaries, benefits and commissions $ 1,159,561 $ 1,181,934 (2) $ 301,020 $ 296,708 $ 251,697 $ 310,136 $ 297,823 Professional services 306,873 292,926 5 80,535 78,018 78,100 70,220 82,343 Equipment 267,547 256,766 4 69,321 68,793 64,752 64,681 64,826 Net occupancy 163,125 166,600 (2) 40,552 41,145 41,585 39,843 43,302 Money transfer expense 74,755 68,224 10 20,764 18,897 17,958 17,136 17,951 Marketing 40,130 55,164 (27) 10,170 9,283 8,778 11,899 12,888 Communications 21,759 21,782 5,038 5,542 5,808 5,371 5,179 Other 342,968 352,684 (3) 50,180 77,242 110,772 104,774 92,594 2,376,718 2,396,080 (1) 577,580 595,628 579,450 624,060 616,906 Goodwill impairment 2,185,000 470,000 365 - - - 2,185,000 470,000 Total noninterest expense $4,561,718 $2,866,080 59 $ 577,580 $ 595,628 $579,450 $2,809,060 $ 1,086,906 BBVA USA BANCSHARES, INC. (Unaudited) (Dollars in Thousands) Year Ended Three Months Ended December 31, 2020 2019 2020 2019 December 31 September 30 June 30 March 31 December 31 NON-GAAP RECONCILIATION Computation of Operating Income: Net interest income (GAAP) $ 2,510,524 $ 2,607,033 $ 667,202 $ 641,850 $ 612,017 $ 589,455 $ 623,154 Plus: noninterest income (GAAP) 1,192,672 1,135,944 301,416 284,660 272,354 334,242 272,584 Less: noninterest expense (GAAP) 4,561,718 2,866,080 577,580 595,628 579,450 2,809,060 1,086,906 Plus: goodwill impairment (GAAP) 2,185,000 470,000 2,185,000 470,000 Operating income (non-GAAP) $ 1,326,478 $ 1,346,897 $ 391,038 $ 330,882 $ 304,921 $ 299,637 $ 278,832 Computation of Tangible Shareholder's Equity: Total shareholder's equity $ 11,691,362 $ 13,386,589 $ 11,691,362 $ 11,394,964 $ 11,270,789 $ 11,358,354 $ 13,386,589 Less: goodwill and other intangibles (GAAP) 2,358,973 4,555,330 2,358,973 2,357,039 2,357,343 2,359,540 4,555,330 Tangible shareholder's equity (non-GAAP) $ 9,332,389 $ 8,831,259 $ 9,332,389 $ 9,037,925 $ 8,913,446 $ 8,998,814 $ 8,831,259 Computation of Average Tangible Equity: Total stockholder's equity (average) (GAAP) $ 12,003,167 $ 13,894,163 $ 11,595,287 $ 11,394,928 $ 11,533,007 $ 13,500,615 $ 14,090,315 Less: goodwill and other intangibles (average) (GAAP) 2,897,169 5,026,723 2,358,697 2,357,944 2,357,132 4,526,744 5,016,935 Average tangible equity (non-GAAP) [B] $ 9,105,998 $ 8,867,440 $ 9,236,590 $ 9,036,984 $ 9,175,875 $ 8,973,871 $ 9,073,380 Net income (loss) (GAAP) [A] $ (1,861,664) $ 153,407 $ 333,817 $ 166,241 $ (124,437) $ (2,237,285) $ (330,705) Return on average tangible equity (non-GAAP) ([A]/[B], annualized) (20.44)% 1.73 % 14.38 % 7.32 % (5.45)% (100.27)% (14.46)% Computation of Adjusted Net Income, Return on Average Assets and Return on Average Tangible Equity: Net income (loss) (GAAP) $ (1,861,664) $ 153,407 $ 333,817 $ 166,241 $ (124,437) $ (2,237,285) $ (330,705) Plus: goodwill impairment (GAAP) 2,185,000 470,000 2,185,000 470,000 Adjusted net income (non-GAAP) [C] $ 323,336 $ 623,407 $ 333,817 $ 166,241 $ (124,437) $ (52,285) $ 139,295 Average assets (GAAP) [D] $ 102,008,134 $ 94,293,422 $ 104,835,589 $ 104,282,898 $ 104,204,062 $ 96,356,113 $ 95,754,954 Return on average assets - adjusted (non-GAAP) ([C]/[D], annualized) 0.32 % 0.66 % 1.27 % 0.63 % (0.48)% (0.22)% 0.58 % Return on average tangible equity - adjusted (non-GAAP) ([C]/[B], annualized) 3.55 7.03 14.38 7.32 (5.45) (2.34) 6.09 Computation of Efficiency Ratio: Noninterest expense (GAAP) $ 4,561,718 $ 2,866,080 $ 577,580 $ 595,628 $ 579,450 $ 2,809,060 $ 1,086,906 Less: securities and goodwill impairment (GAAP) 2,185,000 470,215 2,185,000 470,102 Total expense (GAAP) [E] $ 2,376,718 $ 2,395,865 $ 577,580 $ 595,628 $ 579,450 $ 624,060 $ 616,804 Net interest income, taxable equivalent basis 2,555,189 2,658,571 $ 677,798 $ 652,660 $ 623,242 601,489 635,552 Plus: noninterest income (GAAP) 1,192,672 1,135,944 301,416 284,660 272,354 334,242 272,584 Less: investment securities gains, net (GAAP) 22,616 29,961 3,477 19,139 Total revenue [F] $ 3,725,245 $ 3,764,554 $ 979,214 $ 937,320 $ 892,119 $ 916,592 $ 908,136 Efficiency ratio (non-GAAP) ([E]/[F]) 63.80 % 63.64 % 58.98 % 63.55 % 64.95 % 68.08 % 67.92 % BBVA USA BANCSHARES, INC. SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited) (Dollars in Thousands) At or Quarter Ended December 31, 2020 30-59 Days PastDue 60-89 Days PastDue 90 Days or More PastDue Nonaccrual AccruingTDRs Not Past Due orImpaired Total Net Charge Offs(Recoveries) Commercial, financial and agricultural $ 15,862 $ 22,569 $ 35,472 $ 540,741 $ 17,686 $ 25,972,812 $ 26,605,142 $ 5,019 Real estate construction 3,595 174 532 25,316 145 2,468,569 2,498,331 (2) Commercial real estate mortgage 2,113 2,004 1,104 442,137 910 13,117,046 13,565,314 203 Residential real estate mortgage 49,445 20,694 45,761 235,463 53,380 12,923,031 13,327,774 1,029 Equity lines of credit 11,108 4,305 2,624 42,606 - 2,334,251 2,394,894 (795) Equity loans 1,417 243 317 10,167 19,606 148,012 179,762 135 Credit card 12,147 10,191 21,953 - - 837,411 881,702 14,714 Consumer direct 24,076 17,550 8,741 10,087 23,163 1,846,106 1,929,723 28,206 Consumer indirect 47,174 14,951 5,066 24,713 - 4,085,221 4,177,125 8,069 Total loans $ 166,937 $ 92,681 $ 121,570 $ 1,331,230 $ 114,890 $ 63,732,459 $ 65,559,767 $ 56,578 Loans held for sale $ - $ - $ - $ - $ - $ 236,586 $ 236,586 $ - At or Quarter Ended September 30, 2020 30-59 Days PastDue 60-89 Days PastDue 90 Days or More PastDue Nonaccrual AccruingTDRs Not Past Due orImpaired Total Net Charge Offs(Recoveries) Commercial, financial and agricultural $ 22,632 $ 12,890 $ 21,261 $ 660,254 $ 19,713 $ 26,203,423 $ 26,940,173 $ 50,789 Real estate construction 2,861 303 532 12,614 61 2,387,303 2,403,674 153 Commercial real estate mortgage 19,280 3,968 1,816 275,668 1,831 13,393,237 13,695,800 98 Residential real estate mortgage 88,035 49,344 39,728 204,442 55,132 13,027,076 13,463,757 (117) Equity lines of credit 13,418 6,300 3,445 37,216 - 2,381,344 2,441,723 233 Equity loans 1,847 1,158 271 8,758 20,750 161,583 194,367 (195) Credit card 9,776 7,526 16,542 - - 873,949 907,793 18,527 Consumer direct 25,762 11,730 6,643 9,134 17,926 1,952,501 2,023,696 24,559 Consumer indirect 34,116 9,744 3,834 24,954 - 4,036,981 4,109,629 6,771 Total loans $ 217,727 $ 102,963 $ 94,072 $ 1,233,040 $ 115,413 $ 64,417,397 $ 66,180,612 $ 100,818 Loans held for sale $ - $ - $ - $ - $ - $ 253,454 $ 253,454 $ - At or Quarter Ended June 30, 2020 30-59 Days PastDue 60-89 Days PastDue 90 Days or More PastDue Nonaccrual AccruingTDRs Not Past Due orImpaired 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 PastDue 60-89 Days PastDue 90 Days or More PastDue Nonaccrual AccruingTDRs Not Past Due orImpaired Total Net Charge Offs(Recoveries) Commercial, financial and agricultural $ 31,493 $ 7,588 $ 3,013 $ 323,881 $ 1,931 $ 27,464,207 $ 27,832,113 $ 19,014 Real estate construction 9,356 66 574 13,676 69 2,147,973 2,171,714 (13) Commercial real estate mortgage 13,439 5,241 912 114,839 3,333 13,715,641 13,853,405 (73) Residential real estate mortgage 67,938 25,187 5,744 147,058 55,116 13,144,975 13,446,018 (172) Equity lines of credit 16,382 6,244 3,295 33,354 - 2,552,075 2,611,350 536 Equity loans 2,636 1,147 293 8,027 22,392 194,874 229,369 212 Credit card 13,230 8,932 23,707 - - 977,503 1,023,372 19,517 Consumer direct 34,553 19,738 15,196 7,160 14,898 2,184,500 2,276,045 51,726 Consumer indirect 76,547 24,249 9,040 28,721 - 3,957,471 4,096,028 21,051 Total loans $ 265,574 $ 98,392 $ 61,774 $ 676,716 $ 97,739 $ 66,339,219 $ 67,539,414 $ 111,798 Loans held for sale $ - $ - $ - $ - $ - $ 117,752 $ 117,752 $ - At or Quarter Ended December 31, 2019 30-59 Days PastDue 60-89 Days PastDue 90 Days or More PastDue Nonaccrual AccruingTDRs Not Past Due orImpaired Total Net Charge Offs(Recoveries) Commercial, financial and agricultural $ 29,273 $ 16,462 $ 6,692 $ 268,288 $ 1,456 $ 24,110,067 $ 24,432,238 $ 37,788 Real estate construction 7,603 2 571 8,041 72 2,012,393 2,028,682 (126) Commercial real estate mortgage 5,325 5,458 6,576 98,077 3,414 13,742,628 13,861,478 (285) Residential real estate mortgage 72,571 21,909 4,641 147,337 57,165 13,230,331 13,533,954 107 Equity lines of credit 15,766 6,581 1,567 38,113 - 2,530,653 2,592,680 857 Equity loans 2,856 1,028 195 8,651 23,770 208,468 244,968 137 Credit card 11,275 9,214 22,796 - - 959,080 1,002,365 16,760 Consumer direct 33,658 20,703 18,358 6,555 12,438 2,246,430 2,338,142 58,190 Consumer indirect 83,966 28,430 9,730 31,781 - 3,758,443 3,912,350 27,275 Total loans $ 262,293 $ 109,787 $ 71,126 $ 606,843 $ 98,315 $ 62,798,493 $ 63,946,857 $ 140,703 Loans held for sale $ - $ - $ - $ - $ - $ 112,058 $ 112,058 $ - BBVA USA BANCSHARES, INC. BALANCE SHEET (Unaudited) (Dollars in Thousands) 2020 2019 December 31 September 30 June 30 March 31 December 31 Assets: Cash and due from banks $ 1,249,954 $ 1,035,307 $ 1,019,127 $ 1,033,733 $ 1,149,734 Federal funds sold, securities purchased under agreements to resell and interest bearing deposits 13,357,954 14,041,538 11,738,063 4,479,535 5,788,964 Cash and cash equivalents 14,607,908 15,076,845 12,757,190 5,513,268 6,938,698 Trading account assets 762,449 926,497 1,016,966 1,009,130 473,976 Debt securities available for sale 5,744,919 6,028,072 5,765,192 6,344,816 7,235,305 Debt securities held to maturity, net 10,549,945 9,428,931 8,693,437 7,876,266 6,797,046 Loans held for sale 236,586 253,454 245,851 117,752 112,058 Loans 65,559,767 66,180,612 68,241,500 67,539,414 63,946,857 Allowance for loan losses (1,679,474) (1,804,423) (1,754,352) (1,351,072) (920,993) Net loans 63,880,293 64,376,189 66,487,148 66,188,342 63,025,864 Premises and equipment, net 1,055,525 1,063,923 1,070,358 1,068,741 1,087,698 Bank owned life insurance 757,943 758,391 754,908 754,409 750,224 Goodwill 2,328,296 2,328,296 2,328,296 2,328,296 4,513,296 Other assets 2,832,339 3,412,324 3,148,270 3,124,539 2,669,182 Total assets $ 102,756,203 $ 103,652,922 $ 102,267,616 $ 94,325,559 $ 93,603,347 Liabilities: Deposits: Noninterest bearing $ 27,791,421 $ 26,803,670 $ 25,978,354 $ 20,418,504 $ 21,850,216 Interest bearing 58,066,960 59,567,362 59,448,060 56,816,003 53,135,067 Total deposits 85,858,381 86,371,032 85,426,414 77,234,507 74,985,283 FHLB and other borrowings 3,548,492 3,560,973 3,571,933 3,790,137 3,690,044 Federal funds purchased and securities sold under agreements to repurchase 184,478 189,474 249,481 409,784 173,028 Other short-term borrowings 1,619 Accrued expenses and other liabilities 1,473,490 2,136,479 1,747,380 1,532,777 1,368,403 Total liabilities 91,064,841 92,257,958 90,996,827 82,967,205 80,216,758 Shareholder's Equity: Preferred stock 229,475 229,475 229,475 229,475 229,475 Common stock $0.01 par value 2,230 2,230 2,230 2,230 2,230 Surplus 14,032,205 14,032,321 14,035,607 14,039,572 14,043,727 Retained deficit (2,931,151) (3,264,295) (3,430,135) (3,305,226) (917,227) Accumulated other comprehensive income (loss) 329,105 365,374 404,165 362,339 (1,072) Total BBVA USA Bancshares, Inc. shareholder's equity 11,661,864 11,365,105 11,241,342 11,328,390 13,357,133 Noncontrolling interests 29,498 29,859 29,447 29,964 29,456 Total shareholder's equity 11,691,362 11,394,964 11,270,789 11,358,354 13,386,589 Total liabilities and shareholder's equity $ 102,756,203 $ 103,652,922 $ 102,267,616 $ 94,325,559 $ 93,603,347 BBVA USA BANCSHARES, INC. INCOME STATEMENT (Unaudited) (Dollars in Thousands) Three Months Ended 2020 2019 December 31 September 30 June 30 March 31 December 31 Interest income: Interest and fees on loans $ 626,900 $ 644,643 $ 669,767 $ 715,476 $ 738,140 Interest on debt securities available for sale 22,089 19,474 18,805 (1,492) 33,333 Interest on debt securities held to maturity 60,812 49,981 39,800 41,102 43,097 Interest on trading account assets 793 892 1,157 1,122 1,326 Interest and dividends on other earning assets 7,080 6,436 14,016 42,175 39,915 Total interest income 717,674 721,426 743,545 798,383 855,811 Interest expense: Interest on deposits 33,945 61,147 97,279 164,742 189,345 Interest on FHLB and other borrowings 14,092 14,644 21,936 21,176 31,263 Interest on federal funds purchased and securities sold under agreements to repurchase 2,350 3,736 12,274 22,658 11,850 Interest on other short-term borrowings 85 49 39 352 199 Total interest expense 50,472 79,576 131,528 208,928 232,657 Net interest income 667,202 641,850 612,017 589,455 623,154 Provision for credit losses (81,298) 150,977 539,459 356,991 119,505 Net interest income after provision for credit losses 748,500 490,873 72,558 232,464 503,649 Noninterest income: Service charges on deposit accounts 59,309 54,710 44,233 61,531 64,585 Card and merchant processing fees 49,961 48,628 43,416 50,091 50,805 Investment services sales fees 26,647 26,218 24,971 34,407 28,130 Investment banking and advisory fees 26,291 40,013 45,061 26,731 15,720 Money transfer income 29,446 27,109 25,461 24,548 25,871 Asset management fees 12,613 12,024 11,560 11,904 11,532 Corporate and correspondent investment sales 16,268 3,478 18,855 10,717 14,263 Mortgage banking 19,753 13,741 23,868 17,451 9,048 Bank owned life insurance 5,458 4,972 5,094 4,625 4,584 Investment securities gains, net 3,477 19,139 Other 55,670 53,767 26,358 73,098 48,046 Total noninterest income 301,416 284,660 272,354 334,242 272,584 Noninterest expense: Salaries, benefits and commissions 301,020 296,708 251,697 310,136 297,823 Professional services 80,535 78,018 78,100 70,220 82,343 Equipment 69,321 68,793 64,752 64,681 64,826 Net occupancy 40,552 41,145 41,585 39,843 43,302 Money transfer expense 20,764 18,897 17,958 17,136 17,951 Marketing 10,170 9,283 8,778 11,899 12,888 Communications 5,038 5,542 5,808 5,371 5,179 Goodwill impairment 2,185,000 470,000 Other 50,180 77,242 110,772 104,774 92,594 Total noninterest expense 577,580 595,628 579,450 2,809,060 1,086,906 Net (loss) income before income tax expense 472,336 179,905 (234,538) (2,242,354) (310,673) Income tax (benefit) expense 138,519 13,664 (110,101) (5,069) 20,032 Net (loss) income 333,817 166,241 (124,437) (2,237,285) (330,705) Less: net income attributable to noncontrolling interests 673 401 472 501 663 Net (loss) income attributable to BBVA USA Bancshares, Inc. $ 333,144 $ 165,840 $(124,909) $(2,237,786) $ (331,368) SOURCE BBVA USA Related Links www.bbva.com

Answer: BBVA USA reports fourth quarter 2020 results