Popular, Inc. reported today that the company's annual net income dropped 34 percent in 2006 to $357.7 million, compared with $540.7 million in 2005. Net income during the fourth quarter took a sharper tumble, falling to $59.6 million from $130.2 million one year ago, a drop of 54 percent.
The company's mortgage loan portfolio shrunk during 2006 as well, falling 1.2 billion from 2005's portfolio holdings to $11.7 billion at the end of the year.
"This has not been a good year, primarily because of the performance of our nonprime mortgage operations, but we have taken action on this front," said Richard L. Carrion, chairman and CEO of Popular, Inc. "On the other hand, we have seen good performance in our Puerto Rico operations in spite of a difficult environment."
As reported earlier, Popular has said it will exit the wholesale nonprime mortgage origination business, a move the company says will allow it to focus on existing profitable businesses and consolidate support functions with its sister U.S. banking entity Banco Popular North America. Popular said it recognized approximately $7.2 million in impairment losses and $14.2 million in goodwill impairment associated with the exited operations during the fourth quarter of 2006.
Popular Financial Holdings, with 140 retail lending locations, offers mortgage and personal loans, while E-LOAN provides online consumer direct lending to obtain mortgage, auto and home equity loans.