PR Newswire | Jul 30, 2020 09:30AM EDT

07/30 08:30 CDT

BBVA USA reports second quarter 2020 resultsApproval received to open 15 new branches in Texas- Loans and COVID-19 pandemic relief efforts: Newly funded loans total $7.7 billion in the quarter and more than $12.3 billion during the first half of the year. BBVA USA funded $3.3 billion Small Business Administration (SBA) Paycheck Protection Program (PPP) loans while processing more than 22,000 applications, providing loans to nearly 3,100 new customers and impacting an estimated 360,000 jobs. Proactively providing other products and offers to assist customers during the pandemic- Deposit generation: Total deposits increased $8.2 billion or 42 percent (annualized) from first quarter 2020 levels, driven by robust noninterest bearing deposit growth (+$5.6 billion) and interest bearing transaction accounts (+$5.0 billion), partially offset by a targeted reduction in CDs- Capital and liquidity: Regulatory capital and liquidity positions remain strong. CET12 ratio ends the quarter at 12.18 percent while Liquidity Coverage Ratio (LCR) is unchanged on a linked quarter basis at 144 percent- Operating income: Operating income1 in the quarter totals $305 million, up 7 percent (annualized) from the first quarter of 2020 but down 12 percent from second quarter 2019 levels- Provision for credit losses: Provision for credit losses totals $539 million in the quarter reflecting the continued impact of the COVID-19 pandemic including adverse macroeconomic environment and forecasts. Component of provision expense for loan losses exceeds net charge-offs by $403 million- Credit quality: Nonperforming loan ratio at 1.21 percent compared to 1.09 percent on a linked quarter basis. Net charge-offs as a percentage of average total loans at 72 basis points compared to 69 basis points in the first quarter of 2020 HOUSTON, July 30, 2020

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.

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 Rodrguez 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 GroupBBVA (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 USAIn 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 StatementsCertain 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

EARNINGSSUMMARY

Net interest $ 612,017 $ 659,749 (7) $ 1,201,472 $ 1,342,838 (11)income

Noninterest 268,877 284,281 (5) 583,980 533,083 10income [a]

Total revenue 880,894 944,030 (7) 1,785,452 1,875,921 (5)[a]

Investmentsecurities 3,477 - NM 22,616 8,958 152gain, net

Provision for 539,459 155,018 248 896,450 337,310 166credit losses

Goodwill - - - 2,185,000 - NM impairment

Noninterest 579,450 598,314 (3) 1,203,510 1,180,287 2expense

Pretax (loss) (234,538) 190,698 (223) (2,476,892) 367,282 (774)income

Income tax(benefit) (110,101) 30,512 (461) (115,170) 66,115 (274)expense

Net (loss) $ (124,437) $ 160,186 (178) $ (2,361,722) $ 301,167 (884)income

Adjusted net(loss) income $ (124,437) $ 160,186 (178) $ (176,722) $ 301,167 (159)[b]

SELECTEDRATIOS

Return onaverage (0.48)% 0.69 % (4.74)% 0.65 %assets

Return onaverage (0.48) 0.69 (0.35) 0.65assets-adjusted [b]

Return onaverage (5.45) 7.34 (52.34) 7.00tangibleequity [b]

Return onaveragetangible (5.45) 7.34 (3.92) 7.00equity-adjusted [b]

Efficiency 64.95 62.50 66.54 62.04ratio [b]

Averagecommon equity 10.82 14.47 12.22 14.43to averageassets

Average loansto average 82.89 88.13 84.66 89.40totaldeposits

Common equitytier I 12.18 12.57 12.18 12.57capital(CET1) [c]

Tier Icapital ratio 12.51 12.91 12.51 12.91[c]

Total capital 14.66 15.08 14.66 15.08ratio [c]

Leverage 8.66 9.99 8.66 9.99ratio [c]

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 14,110,021 13,625,034 4 14,001,688 13,696,513 2 14,473,646 13,923,433 4securities

Earning 94,247,127 83,152,459 13 90,375,817 82,829,544 9 95,504,447 82,741,439 15assets

Total assets 104,204,062 93,452,839 12 100,280,087 93,220,648 8 102,267,616 92,184,045 11

Noninterestbearing 24,225,740 20,286,244 19 22,259,622 20,234,941 10 25,978,354 20,646,209 26demanddeposits

Interestbearing 49,896,129 36,948,180 35 46,786,454 36,429,106 28 51,304,239 36,967,442 39transactionaccounts

Totaltransaction 74,121,869 57,234,424 30 69,046,076 56,664,047 22 77,282,593 57,613,651 34accounts

Total 83,547,718 72,687,054 15 79,214,772 72,446,783 9 85,426,414 72,588,810 18deposits

Totalshareholder's 11,533,007 13,782,011 (16) 12,516,811 13,711,724 (9) 11,270,789 13,870,723 (19)equity

Totalshareholder's 9,175,875 8,750,882 5 9,074,873 8,678,376 5 8,913,446 8,845,449 1equity -tangible [b]

[a] Excludes net gain on sales of investment securities.

[b] Non-GAAP financial measure that we believe aids in understanding certainareas of our performance. The calculation of this measure is included on thepage 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

NONPERFORMINGASSETS

Nonaccrual $ 764,744 $ 676,716 $ 606,843 $ 653,242 $ 732,696loans [a]

Loans 90 daysor more past 66,163 61,774 71,126 67,869 64,337due [b]

TDRs 90 daysor more past 423 335 414 588 304due

Totalnonperforming 831,330 738,825 678,383 721,699 797,337loans [a]

Foreclosed 14,871 20,642 20,833 17,381 13,752real estate

Otherrepossessed 8,599 13,338 10,930 17,584 13,040assets

Totalnonperforming $ 854,800 $ 772,805 $ 710,146 $ 756,664 $ 824,129assets

TDRs accruingand past due $ 95,788 $ 97,404 $ 97,901 $ 97,218 $ 112,383less than 90days

Totalnonperforming 1.21 % 1.09 % 1.06 % 1.14 % 1.26 %loans as a %of loans

Totalnonperformingassets as a %of totalloans, 1.25 1.14 1.11 1.19 1.30foreclosedreal estate,and otherrepossessedassets

Three Months Ended

2020 2019

June 30 March 31 December 31 September 30 June 30

ALLOWANCE FORLOAN LOSSES

Balance atbeginning of $ 1,351,072 $ 920,993 $ 942,191 $ 977,660 $ 966,022period

Adoption of - 184,931 - - -ASC 326

Netcharge-offs 123,054 111,798 140,703 176,098 143,380(NCO)

Provision for 526,334 356,946 119,505 140,629 155,018loan losses

Balance at $ 1,754,352 $ 1,351,072 $ 920,993 $ 942,191 $ 977,660end of period

Allowance forloan losses 2.57 % 2.00 % 1.44 % 1.49 % 1.54 %as a % oftotal loans

Allowance forloan lossesas a % of 211.03 182.87 135.76 130.55 122.62nonperformingloans [c]

Allowance forloan lossesas a % of 205.24 174.83 129.69 124.52 118.63nonperformingassets [c]

Annualized asa % ofaverageloans:

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/RATEANALYSIS

(TaxableEquivalentBasis)

Assets

Earningassets:

Loans $ 69,256,412 $ 680,157 3.95 % $ 64,056,915 $ 799,680 5.01 %

Debtsecurities 5,780,912 18,805 1.31 8,983,280 45,125 2.01available forsale [a]

Debtsecurities 8,207,298 40,635 1.99 4,744,584 34,458 2.91held tomaturity

Other earning 10,880,694 15,173 0.56 5,470,510 36,424 2.67assets [b]

Total earning 94,125,316 754,770 3.23 83,255,289 915,687 4.41assets [a]

Allowance for (1,375,912) (974,772)credit losses

Unrealizedgain (loss)on debt 121,811 (102,830)securitiesavailable forsale

Other assets 11,332,847 11,275,152

Total assets $ 104,204,062 $ 93,452,839

LiabilitiesandShareholder'sEquity

Interestbearingliabilities:

Interestbearing $ 14,153,639 $ 13,430 0.38 $ 9,304,889 $ 26,536 1.14demanddeposits

Savings andmoney market 35,742,490 43,943 0.49 27,643,291 88,203 1.28accounts

Certificatesand other 9,425,849 39,906 1.70 15,452,630 87,739 2.28time deposits

Totalinterest 59,321,978 97,279 0.66 52,400,810 202,478 1.55bearingdeposits

FHLB andother 3,567,010 21,936 2.47 4,026,581 34,300 3.42borrowings

Federal fundspurchased andsecuritiessold under 1,192,030 12,274 4.14 466,926 6,002 5.16agreement torepurchase[b]

Othershort-term 12,588 39 1.25 7,402 100 5.42borrowings

Totalinterest 64,093,606 131,528 0.83 56,901,719 242,880 1.71bearingliabilities

Noninterestbearing 24,225,740 20,286,244deposits

Othernoninterest 4,351,709 2,482,865bearingliabilities

Total 92,671,055 79,670,828liabilities

Shareholder's 11,533,007 13,782,011equity

Totalliabilitiesand $ 104,204,062 $ 93,452,839shareholder'sequity

Net interestincome/ net 623,242 2.40 % 672,807 2.70 %interestspread

Net yield onearning 2.66 % 3.24 %assets

Total taxableequivalent 11,225 13,058adjustment

Net interest $ 612,017 $ 659,749income

[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/RATEANALYSIS

(TaxableEquivalentBasis)

Assets

Earningassets:

Loans $ 67,065,753 $ 1,406,689 4.22 % $ 64,765,717 $ 1,612,095 5.02 %

Debtsecurities 6,225,236 17,313 0.56 9,450,246 98,647 2.11available forsale [a]

Debtsecurities 7,699,732 82,715 2.16 4,391,400 65,223 3.00held tomaturity

Other earning 9,308,376 58,470 1.26 4,367,314 59,931 2.77assets [b]

Total earning 90,299,097 1,565,187 3.49 82,974,677 1,835,896 4.46assets [a]

Allowance for (1,220,331) (942,398)credit losses

Unrealizedgain (loss)on debt 76,720 (145,133)securitiesavailable forsale

Other assets 11,124,601 11,333,502

Total assets $ 100,280,087 $ 93,220,648

LiabilitiesandShareholder'sEquity

Interestbearingliabilities:

Interestbearing $ 12,926,063 37,981 0.59 $ 8,997,002 46,882 1.05demanddeposits

Savings andmoney market 33,860,391 128,735 0.76 27,432,104 165,112 1.21accounts

Certificatesand other 10,168,696 95,305 1.88 15,782,736 172,838 2.21time deposits

Totalinterest 56,955,150 262,021 0.93 52,211,842 384,832 1.49bearingdeposits

FHLB andother 3,651,605 43,112 2.37 4,157,923 71,926 3.49borrowings

Federal fundspurchased andsecuritiessold under 1,321,766 34,932 5.31 439,577 9,749 4.47agreement torepurchase[b]

Othershort-term 16,312 391 4.82 17,702 296 3.37borrowings

Totalinterest 61,944,833 340,456 1.11 56,827,044 466,803 1.66bearingliabilities

Noninterestbearing 22,259,622 20,234,941deposits

Othernoninterest 3,558,821 2,446,939bearingliabilities

Total 87,763,276 79,508,924liabilities

Shareholder's 12,516,811 13,711,724equity

Totalliabilitiesand $ 100,280,087 $ 93,220,648shareholder'sequity

Net interestincome/ net 1,224,731 2.38 % 1,369,093 2.80 %interestspread

Net yield onearning 2.73 % 3.33 %assets

Total taxableequivalent 23,259 26,255adjustment

Net interest $ 1,201,472 $ 1,342,838income

[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

NONINTERESTINCOME

Servicecharges on $ 105,764 $ 120,639 (12) $ 44,233 $ 61,531 $ 64,585 $ $ 61,731deposit 65,143accounts

Card andmerchant 93,507 96,357 (3) 43,416 50,091 50,805 50,385 50,355processingfees

Investmentservices sales 59,378 58,029 2 24,971 34,407 28,130 29,287 31,333fees

Investmentbanking and 71,792 39,615 81 45,061 26,731 15,720 28,324 20,758advisory fees

Money transfer 50,009 47,253 6 25,461 24,548 25,871 26,020 25,272income

Corporate andcorrespondent 29,572 12,499 137 18,855 10,717 14,263 11,799 5,607investmentsales

Assetmanagement 23,464 22,634 4 11,560 11,904 11,532 11,405 11,867fees

Mortgage 41,319 10,807 282 23,868 17,451 9,048 8,204 5,870banking

Bank owned 9,719 9,387 4 5,094 4,625 4,584 3,508 4,803life insurance

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

Investmentsecurities 22,616 8,958 152 3,477 19,139 - 21,003 -gains, net

Totalnoninterest $ 606,596 $ 542,041 12 $ 272,354 $ 334,242 $ 272,584 $ 321,319 $ 284,281income

NONINTERESTEXPENSE

Salaries,benefits and $ 561,833 $ 589,019 (5) $ 251,697 $ 310,136 $ 297,823 $ 295,092 $ 296,303commissions

Equipment 129,433 128,032 1 64,752 64,681 64,826 63,908 62,638

Professional 148,320 137,680 8 78,100 70,220 82,343 72,903 73,784services

Net occupancy 81,428 81,057 - 41,585 39,843 43,302 42,241 40,116

Money transfer 35,094 32,268 9 17,958 17,136 17,951 18,005 17,290expense

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 2,185,000 - NM - 2,185,000 470,000 - -impairment

Other 215,546 174,292 24 110,772 104,774 92,594 85,798 86,038

Totalnoninterest $3,388,510 $1,180,287 187 $ 579,450 $ 2,809,060 $ 1,086,906 $ 598,887 $ 598,314expense

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-GAAPRECONCILIATION

Computation ofOperatingIncome:

Net interest $ 1,201,472 $ 1,342,838 $ 612,017 $ 589,455 $ 623,154 $ 641,041 $ 659,749income (GAAP)

Plus:noninterest 606,596 542,041 272,354 334,242 272,584 321,319 284,281income (GAAP)

Less:noninterest 3,388,510 1,180,287 579,450 2,809,060 1,086,906 598,887 598,314expense (GAAP)

Plus: goodwillimpairment 2,185,000 - - 2,185,000 470,000 - -(GAAP)

Operatingincome $ 604,558 $ 704,592 $ 304,921 $ 299,637 $ 278,832 $ 363,473 $ 345,716(non-GAAP)

Computation ofTangibleShareholder'sEquity:

Totalshareholder's $ 11,270,789 $ 13,870,723 $ 11,270,789 $11,358,354 $ 13,386,589 $ 14,101,618 $ 13,870,723equity

Less: goodwilland other 2,357,343 5,025,274 2,357,343 2,359,540 4,555,330 5,020,573 5,025,274intangibles(GAAP)

Tangibleshareholder's $ 8,913,446 $ 8,845,449 $ 8,913,446 $ 8,998,814 $ 8,831,259 $ 9,081,045 $ 8,845,449equity(non-GAAP)

Computation ofAverageTangibleEquity:

Totalstockholder'sequity $ 12,516,811 $ 13,711,724 $ 11,533,007 $13,500,615 $ 14,090,315 $ 14,056,939 $ 13,782,011(average)(GAAP)

Less: goodwilland otherintangibles 3,441,938 5,033,348 2,357,132 4,526,744 5,016,935 5,023,480 5,031,129(average)(GAAP)

Averagetangible $ 9,074,873 $ 8,678,376 $ 9,175,875 $ 8,973,871 $ 9,073,380 $ 9,033,459 $ 8,750,882equity(non-GAAP) [B]

Net income(loss) (GAAP) $ (2,361,722) $ 301,167 $ (124,437) $ (2,237,285) $ (330,705) $ 182,945 $ 160,186[A]

Return onaveragetangibleequity (52.34)% 7.00 % (5.45)% (100.27)% (14.46)% 8.03 % 7.34 %(non-GAAP)([A]/[B],annualized)

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

Net income $ (2,361,722) $ 301,167 $ (124,437) $ (2,237,285) $ (330,705) $ 182,945 $ 160,186(loss) (GAAP)

Plus: goodwillimpairment 2,185,000 - - 2,185,000 470,000 - -(GAAP)

Adjusted net $ income $ (176,722) $ 301,167 $ (124,437) (52,285) $ 139,295 $ 182,945 $ 160,186(non-GAAP) [C]

Average assets $ 100,280,087 $ 93,220,648 $ 104,204,062 $96,356,113 $ 95,754,954 $ 94,942,456 $ 93,452,839(GAAP) [D]

Return onaverage assets- adjusted (0.35)% 0.65 % (0.48)% (0.22)% 0.58 % 0.76 % 0.69 %(non-GAAP)([C]/[D],annualized)

Return onaveragetangibleequity - (3.92) 7.00 (5.45) (2.34) 6.09 8.03 7.34adjusted(non-GAAP)([C]/[B],annualized)

Computation ofEfficiencyRatio:

Noninterest $ 3,388,510 $ 1,180,287 $ 579,450 $ 2,809,060 $ 1,086,906 $ 598,887 $ 598,314expense (GAAP)

Less:securities andgoodwill 2,185,000 113 - 2,185,000 470,102 - 113impairment(GAAP)

Total expense $ 1,203,510 $ 1,180,174 $ 579,450 $ 624,060 $ 616,804 $ 598,887 $ 598,201(GAAP) [E]

Net interestincome,taxable $ 1,224,731 $ 1,369,093 $ 623,242 $ 601,489 $ 635,552 $ 653,926 $ 672,807equivalentbasis

Plus:noninterest 606,596 542,041 272,354 334,242 272,584 321,319 284,281income (GAAP)

Less:investmentsecurities 22,616 8,958 3,477 19,139 - 21,003 -gains, net(GAAP)

Total revenue $ 1,808,711 $ 1,902,176 $ 892,119 $ 916,592 $ 908,136 $ 954,242 $ 957,088[F]

Efficiencyratio 66.54 % 62.04 % 64.95 % 68.08 % 67.92 % 62.76 % 62.50 %(non-GAAP)([E]/[F])

BBVA USA BANCSHARES, INC.

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION (Unaudited)

(Dollars in Thousands)

At or Quarter Ended June 30, 2020

30-59 Days Past 60-89 Days Past 90 Days or Nonaccrual Accruing Not Past Due, Total Net Charge Offs Due Due More Past Due TDRs Nonaccrual, or TDR (Recoveries)

Commercial, financial $ 51,207 $ 5,130 $ 8,450 $ 389,615 $ 1,866 $ 28,325,856 $ 28,782,124 $ 29,038and agricultural

Real estate - 12,907 - 532 13,317 64 2,271,650 2,298,470 (36)construction

Commercial real estate 8,592 2,190 415 117,213 1,876 13,670,383 13,800,669 8,670- mortgage

Residential real 70,252 22,495 13,140 169,387 54,289 13,099,576 13,429,139 182estate - mortgage

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 60-89 Days Past 90 Days or Nonaccrual Accruing Not Past Due or Total Net Charge Offs Due Due More Past Due TDRs Impaired (Recoveries)

Commercial, financial $ 31,493 $ 7,588 $ 3,013 $ 323,881 $ 1,931 $ 27,464,207 $ 27,832,113 $ 19,014and agricultural

Real estate - 9,356 66 574 13,676 69 2,147,973 2,171,714 (13)construction

Commercial real estate 13,439 5,241 912 114,839 3,333 13,715,641 13,853,405 (73)- mortgage

Residential real 67,938 25,187 5,744 147,058 55,116 13,144,975 13,446,018 (172)estate - mortgage

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 60-89 Days Past 90 Days or Nonaccrual Accruing Not Past Due or Total Net Charge Offs Due Due More Past Due TDRs Impaired (Recoveries)

Commercial, financial $ 29,273 $ 16,462 $ 6,692 $ 268,288 $ 1,456 $ 24,110,067 $ 24,432,238 $ 37,788and agricultural

Real estate - 7,603 2 571 8,041 72 2,012,393 2,028,682 (126)construction

Commercial real estate 5,325 5,458 6,576 98,077 3,414 13,742,628 13,861,478 (285)- mortgage

Residential real 72,571 21,909 4,641 147,337 57,165 13,230,331 13,533,954 107estate - mortgage

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 60-89 Days Past 90 Days or Nonaccrual Accruing Not Past Due or Total Net Charge Offs Due Due More Past Due TDRs Impaired (Recoveries)

Commercial, financial $ 30,779 $ 24,036 $ 11,179 $ 301,021 $ 1,552 $ 24,314,563 $ 24,683,130 $ 69,942and agricultural

Real estate - 3,831 185 532 1,616 76 1,999,107 2,005,347 (59)construction

Commercial real estate 13,939 41 2,375 110,632 3,492 12,943,694 13,074,173 2,250- mortgage

Residential real 74,796 22,329 4,778 153,078 60,537 13,187,809 13,503,327 1,280estate - mortgage

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 60-89 Days Past 90 Days or Nonaccrual Accruing Not Past Due or Total Net Charge Offs Due Due More Past Due TDRs Impaired (Recoveries)

Commercial, financial $ 49,037 $ 8,246 $ 12,785 $ 389,779 $ 19,150 $ 24,373,659 $ 24,852,656 $ 45,916and agricultural

Real estate - 3,159 114 532 2,097 107 1,976,637 1,982,646 (477)construction

Commercial real estate 4,716 3,283 360 107,137 3,687 12,850,522 12,969,705 61- mortgage

Residential real 74,767 25,226 6,681 154,247 59,130 13,084,079 13,404,130 1,523estate - mortgage

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 $ 1,019,127 $ 1,033,733 $ 1,149,734 $ 1,117,458 $ 1,027,400from banks

Federal fundssold,securitiespurchasedunder 11,738,063 4,479,535 5,788,964 5,356,141 4,773,761agreements toresell andinterestbearingdeposits

Cash and cash 12,757,190 5,513,268 6,938,698 6,473,599 5,801,161equivalents

Trading 1,016,966 1,009,130 473,976 564,000 440,098account assets

Debtsecurities 5,765,192 6,344,816 7,235,305 7,612,590 9,010,950available forsale

Debtsecurities 8,693,437 7,876,266 6,797,046 6,334,634 4,912,483held tomaturity, net

Loans held for 245,851 117,752 112,058 134,314 90,537sale

Loans 68,241,500 67,539,414 63,946,857 63,320,571 63,311,553

Allowance for (1,754,352) (1,351,072) (920,993) (942,191) (977,660)loan losses

Net loans 66,487,148 66,188,342 63,025,864 62,378,380 62,333,893

Premises and 1,070,358 1,068,741 1,087,698 1,085,635 1,105,819equipment, net

Bank owned 754,908 754,409 750,224 746,819 745,130life insurance

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 $ 25,978,354 $ 20,418,504 $ 21,850,216 $ 21,019,303 $ 20,646,209bearing

Interest 59,448,060 56,816,003 53,135,067 52,550,139 51,942,601bearing

Total deposits 85,426,414 77,234,507 74,985,283 73,569,442 72,588,810

FHLB and other 3,571,933 3,790,137 3,690,044 3,709,949 4,052,969borrowings

Federal fundspurchased andsecurities 249,481 409,784 173,028 117,421 191,739sold underagreements torepurchase

Othershort-term 1,619 - - 45 2,067borrowings

Accruedexpenses and 1,747,380 1,532,777 1,368,403 1,415,612 1,477,737otherliabilities

Total 90,996,827 82,967,205 80,216,758 78,812,469 78,313,322liabilities

Shareholder'sEquity:

Preferred 229,475 229,475 229,475 229,475 229,475stock

Common stock -$0.01 par 2,230 2,230 2,230 2,230 2,230value

Surplus 14,035,607 14,039,572 14,043,727 14,359,966 14,364,527

Retained (3,430,135) (3,305,226) (917,227) (585,859) (768,290)deficit

Accumulatedother 404,165 362,339 (1,072) 66,009 13,508comprehensiveincome (loss)

Total BBVA USABancshares,Inc. 11,241,342 11,328,390 13,357,133 14,071,821 13,841,450shareholder'sequity

Noncontrolling 29,447 29,964 29,456 29,797 29,273interests

Totalshareholder's 11,270,789 11,358,354 13,386,589 14,101,618 13,870,723equity

Totalliabilitiesand $ 102,267,616 $ 94,325,559 $ 93,603,347 $ 92,914,087 $ 92,184,045shareholder'sequity

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

Interestincome:

Interest and $ 669,767 $ 715,476 $ 738,140 $ 771,245 $ 787,767fees on loans

Interest ondebtsecurities 18,805 (1,492) 33,333 36,051 45,125available forsale

Interest ondebtsecurities 39,800 41,102 43,097 38,893 33,313held tomaturity

Interest ontrading 1,157 1,122 1,326 487 601account assets

Interest anddividends on 14,016 42,175 39,915 46,528 35,823other earningassets

Total interest 743,545 798,383 855,811 893,204 902,629income

Interestexpense:

Interest on 97,279 164,742 189,345 203,979 202,478deposits

Interest onFHLB and other 21,936 21,176 31,263 32,975 34,300borrowings

Interest onfederal fundspurchased andsecurities 12,274 22,658 11,850 15,137 6,002sold underagreements torepurchase

Interest onother 39 352 199 72 100short-termborrowings

Total interest 131,528 208,928 232,657 252,163 242,880expense

Net interest 612,017 589,455 623,154 641,041 659,749income

Provision for 539,459 356,991 119,505 140,629 155,018credit losses

Net interestincome after 72,558 232,464 503,649 500,412 504,731provision forcredit losses

Noninterestincome:

Servicecharges on 44,233 61,531 64,585 65,143 61,731depositaccounts

Card andmerchant 43,416 50,091 50,805 50,385 50,355processingfees

Investmentservices sales 24,971 34,407 28,130 29,287 31,333fees

Investmentbanking and 45,061 26,731 15,720 28,324 20,758advisory fees

Money transfer 25,461 24,548 25,871 26,020 25,272income

Assetmanagement 11,560 11,904 11,532 11,405 11,867fees

Corporate andcorrespondent 18,855 10,717 14,263 11,799 5,607investmentsales

Mortgage 23,868 17,451 9,048 8,204 5,870banking

Bank owned 5,094 4,625 4,584 3,508 4,803life insurance

Investmentsecurities 3,477 19,139 - 21,003 -gains, net

Other 26,358 73,098 48,046 66,241 66,685

Totalnoninterest 272,354 334,242 272,584 321,319 284,281income

Noninterestexpense:

Salaries,benefits and 251,697 310,136 297,823 295,092 296,303commissions

Equipment 64,752 64,681 64,826 63,908 62,638

Professional 78,100 70,220 82,343 72,903 73,784services

Net occupancy 41,585 39,843 43,302 42,241 40,116

Money transfer 17,958 17,136 17,951 18,005 17,290expense

Marketing 8,778 11,899 12,888 15,471 16,412

Communications 5,808 5,371 5,179 5,469 5,733

Goodwill - 2,185,000 470,000 - -impairment

Other 110,772 104,774 92,594 85,798 86,038

Totalnoninterest 579,450 2,809,060 1,086,906 598,887 598,314expense

Net (loss)income before (234,538) (2,242,354) (310,673) 222,844 190,698income taxexpense

Income tax(benefit) (110,101) (5,069) 20,032 39,899 30,512expense

Net (loss) (124,437) (2,237,285) (330,705) 182,945 160,186income

Less: netincomeattributable 472 501 663 514 599tononcontrollinginterests

Net (loss)incomeattributable $ (124,909) $ (2,237,786) $ (331,368) $ 182,431 $ 159,587to BBVA USABancshares,Inc.

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SOURCE BBVA USA