Good morning, ladies and gentlemen. I am Richard Cahill, Chairman of the Board of Directors of Popular Inc. And I would like to welcome you to our 2021 Annual Meeting of Shareholders. It is 9 a. M.
So I hereby call this meeting to order in accordance with the notice of the Annual Meeting of Shareholders and proxy statement provided prior to this meeting to shareholders of record as of the close of business on the record date of March 12, 2021 and according to Article 2.3 of the amended and restated bylaws of Popular Inc. The meeting materials that will be used during this meeting are available through the virtual meeting webpage. There you will find the agenda and the rules of conduct for the meeting. We will conduct this meeting following the agenda and the rules of conduct and ask shareholders to follow the same. Now I will ask Mr.
Javier Ferrer, Secretary of the Board of Directors to provide us with a report of the number and percentage of shares of common stock of the corporation present and represented at this meeting and if these shares constitute the necessary quorum for the meeting.
Good morning. Mr. Chairman, there are 72,898,061 shares of common stock of the corporation present or represented by proxy at this meeting, which constitute 86.39 percent of the total of 84,378,6
141 shares of common stock
of the corporation issued and outstanding on March 12, 2021, the record date for determining shareholders entitled to vote at this meeting. We have quorum to proceed with the 2021 Annual Meeting of Shareholders.
Before we begin, I would like to welcome the members of the Board of Directors who are attending this meeting Ignacio Alvarez, Joaquin Bacardi III, Alejandro Ballester, Alberto Calardy, John Dirksen, Maria Luis Alvarez, Kim Goodwin, Myrna So to and Carlos Uname. We now present the minutes of the Popular Inc. 2020 Annual Meeting of Shareholders held on May 12, 2020. A copy of the minutes is included as part of the meeting materials in the virtual meeting webpage. If there are any questions regarding the minutes of the 2020 Annual Meeting of Shareholders, please submit them now.
Pertinent questions that are not related to the minutes of the 2020 Annual Meeting of Shareholders will be answered time permitting later in the meeting after management reports on the corporation's 2020 Annual Report. While we see if there are any questions on the minutes of the 2020 Annual Meeting of Shareholders, I will introduce the Inspector of Elections. To guarantee that the results of the votes cast today are valid and correct, the Board of Directors has appointed Broadridge Financial Solutions, an independent company to act as the Inspector of Elections for the meeting. Mr. Romer Robles, the representative of Broadridge Financial Solutions is present today at this meeting.
Mr. Chairman, there are no questions related to the minutes of the 2020 Annual Meeting of Shareholders.
You may proceed. There being no questions, the minutes of the Popular Inc. 2020 Annual Meeting of Shareholders held on May 12, 2020 are hereby approved. The matters to be considered at this meeting in accordance with the notice of the annual meeting and proxy statement are the following: 1, to elect 3 directors assigned to Class 1 of the Board of Directors of the corporation for a 1 year term to approve on an advisory basis the corporation's executive compensation 3, to approve on an advisory basis the frequency of future advisory votes on the corporation's executive compensation and 4, to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the corporation for 2021 and 5, to consider such other business as maybe properly brought before the meeting or any adjournment thereof. We will now proceed to present and discuss each of the proposals included in the agenda.
Any shareholder who has not yet voted or who may wish to change their vote may do so by clicking the voting button on your screen. These shareholders who have already voted either through the mail in ballot by phone or online and who do not wish to change their vote do not have to vote again. The voting platform will remain open throughout the discussion of these proposals. After the discussion of all proposals, we will answer questions submitted by our shareholders regarding the proposals. Shareholders may submit questions by typing their questions into the submit a question field on the Q and A tab of the virtual meeting webpage and clicking submit.
Please submit your questions through the virtual meeting webpage while the proposals are being discussed. Further questions that are not related to the proposals will be answered time permitting later in the meeting after management reports on the corporation's 2020 annual report. The first proposal, the director nominees to serve for a 1 year term as members of the Board of Directors assigned to Class 1 are Alejandro Ballester, Carlos Onanue and Richard El Carrillo. For the election of these directors, each nominee must receive a majority of the votes cast by shareholders participating or represented by proxy in this meeting. The second proposal is the advisory vote to approve the corporation's executive compensation.
Because this is an advisory vote, the results of this vote will not bind the Board of Directors and will not overrule any decisions made by the Board on this matter. However, the talent and compensation committee of the Board will consider the outcome of the vote when evaluating the effectiveness of our compensation policies and practices in connection with its future determinations on executive compensation. For this proposal to be approved, the affirmative vote of a majority of the shares participating or represented by proxy in this meeting is necessary. The 3rd proposal is the advisory vote to approve the frequency of future advisory votes on the corporation's executive compensation. In this proposal, shareholders can select a frequency of 1, 2 or 3 years for future advisory votes on executive compensation.
Because this is an advisory vote, the results of this vote will not bind the Board of Directors and will not overrule any decisions made by the Board on this matter. However, the Board will consider the outcome of the vote when determining the frequency of future advisory votes on executive compensation. The frequency that receives the affirmative vote of a majority of shares participating are represented by proxy at this meeting will be approved. The 4th proposal is the ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the corporation for 2021. Representatives from PricewaterhouseCoopers LLP are present in this meeting and available to answer questions from shareholders.
For this proposal to be approved, the affirmative vote of the majority of the shares participating or represented by proxy in this meeting are necessary. We will now answer any questions regarding the proposals.
Mr. Chairman, there are no questions related to the proposals.
You may proceed. There being no questions regarding the proposals. Any shareholders that have not voted, please do so now. The polls will close momentarily. While the vote results are being counted, we will proceed with the presentation and discussion of the corporation's annual report for 2020 by our President and Chief Executive Officer Ignacio Alvarez.
The annual report for 2020 was made available to shareholders along with the proxy statement and is also available in the virtual meeting's webpage. After the discussion of the annual report, we will address general questions from shareholders. If you have any questions, please submit them to the virtual meeting webpage during the presentation. Please follow the rules of conduct when submitting your questions.
Good morning. Thank you for joining us today. I'm sure that last year, we would have had a difficult time believing that our 2021 Annual Meeting would need to be virtual as well. But the pandemic has extended considerably beyond what many of us expected at the time. However, despite the personal and professional challenges, we continued serving our customers, supporting our colleagues, providing much needed assistance to our communities and delivering value to our shareholders.
I am pleased to share with you some of the highlights for 2020 and the Q1 of 2021 as well as some thoughts on what lies ahead. We generated net income of $507,000,000 for the year, 24% lower than in 2019. As I will explain shortly, the decrease was largely related to the economic disruption caused by the pandemic. However, as business restrictions were loosened, the economy began to improve and our results got progressively stronger. In fact, the Q4 was one of the best quarters in our history.
Credit quality results remained stable throughout the year despite the economic impact of the pandemic. We granted payment deferral assistance to approximately 132,000 customers, representing $8,300,000,000 of loans or 28% of the total loan balance. At year end, 97% of our customers had exited payment relief programs and approximately 94% of these accounts remain current. Our capital levels remain robust with year end common equity to 1 ratio of 16.3%. Our strong capital position allowed us to increase the quarterly common stock dividend from $0.30 to $0.40 per share in the Q1 of 2020 and returned $500,000,000 to our shareholders through stock repurchases.
Despite the efforts devoted to managing the pandemic related matters, we continued strengthening our business. In Puerto Rico, we grew loans by 7%, driven by an increase in commercial, auto and mortgage loans. Deposits increased by 35%, registering growth in retail, commercial and public deposits. We continue to expand our customer base on the island, adding 106,000 new customers during the year to reach $1,900,000 In the Mainland United States, our loan portfolio grew by 8% and deposits by 2%. We realigned our New York Metro branch network, closing 11 branches.
This will allow us to reduce operating expenses and leverage resources to focus on small and medium sized businesses. We remain committed to the New York Metro market and will maintain our presence in most of our current communities. During the year, we leveraged the strength of our digital channels and saw an accelerated adoption that despite some stabilization, we believe will remain after the pandemic passes. In Puerto Rico, we reached 1,100,000 active customers in our digital banking platform, an increase of 154,000 customers from 2019. In addition, we captured 67% of deposit transaction through digital channels, up from 52% in the previous year.
A commitment to the communities we serve has been at the core of Popular for more than 100 years. And as our investors, customers and partners pay more attention to the topics that make up ESG, in 2019, we started to formalize our processes and priorities consistent with our deep rooted tradition of social responsibility. In 2020, we began to be more deliberate about including our environmental, human capital and business efforts in our corporate sustainability report. Another key achievement was the approval of a series of revisions to our commercial credit policy, which formally incorporate ESG considerations into the credit analysis and evaluation process. We believe these changes will result in more sustainable credit decisions for the long term well-being of our markets.
Regarding our COVID-nineteen response, we acted decisively since the beginning of the pandemic, organizing our efforts around 3 fronts: serving our customers, ensuring the well-being of our colleagues and supporting our communities. We swiftly took action to ensure the health, financial and emotional well-being of our colleagues. We maintained the majority of our branches in operation, implementing rigorous safety measures, leveraged our YRA of digital services and offered payment relief alternatives. Aware of the importance of the SBA's Paycheck Protection Program for small and midsized businesses, we mobilized all resources at our disposal to process as many applications as possible. We drew on talent from across the organization, developed new digital tools and streamlined our processes to provide much needed help to our customers.
In the 1st round, we funded $1,400,000,000 in loans, representing 29,000 small and medium sized businesses. On the community front, we provided medical equipment to health care professionals in the early days of the pandemic, offered financial advice and business continuity support to entrepreneurs and small and midsized businesses and assisted nonprofit organizations to ensure the continuity of their services. I am extremely proud of our response, which was possible thanks to our colleagues' remarkable commitments to serve and their ability to adapt to rapidly changing environment, whether on the frontline or working from home. Moving to our financial results for the year. Popular's total assets grew by nearly $14,000,000,000 to approximately $66,000,000,000 during 2020.
This was mainly due to the unprecedented support of the U. S. Federal government through direct payments to individuals and businesses to combat the economic impact of the COVID-nineteen pandemic. The increase in deposits from our clients resulted in an increase in our available cash and investment portfolios. Additionally, the increase of $2,000,000,000 in loans was mainly due to the corporation's participation in the PPP program.
As mentioned earlier, our 2020 financial results were impacted by the effects of the COVID-nineteen pandemic, particularly in the first half of the year. Net income decreased by $165,000,000 to $507,000,000 in 2020 as we bolstered our reserves for credit losses due to the negative economic outlook in the beginning of the pandemic, increasing the related expense by $127,000,000 when compared to the prior year. Additionally, due to the lower interest rate environment and the impact of the partial closures on economic activity in our markets, Our net interest income and other operating income decreased by $35,000,000 $58,000,000 respectively. To counteract these effects, our management team executed on cost saving opportunities that reduced our expenses by approximately $20,000,000 when compared to 2019. Moving on to the Q1 of 2021, we got off to a strong start with higher core earnings, positive credit quality results, record deposits and continued customer growth.
Our quarterly net income of $263,000,000 was $86,000,000 higher than the 4th quarter. These results were $228,000,000 higher than the same quarter last year. Both quarters were impacted, albeit in opposite directions, due to the changes in macroeconomic forecasts as a result of the pandemic and its impact under CECL. First quarter results were primarily driven by an $82,000,000 benefit in the provision for credit losses as well as higher revenues. In April, we announced a series of capital actions, including an increase in the corporation's quarterly common stock dividend from $0.40 to $0.45 per share and a common stock repurchase program of up to $350,000,000 during 2021.
These capital actions demonstrate Popular's resiliency in times of uncertainty and our commitment to continue to return excess capital responsibly to our shareholders. Deposits increased by almost $2,000,000,000 mainly in Puerto Rico. On the loan side, during the quarter, we funded close to 13,000 PPP loans amounting to $478,000,000 and have continued processing applications since then. In Puerto Rico, from the beginning of the program to the end of Q1 of this year, we have funded approximately 62% of PPP loans originated on the island. On the ESG front, we expanded our efforts to promote financial inclusion by making a $1,000,000 investment in Greenwood, a digital banking platform designed to address the financial needs of African American and Latinx customers.
Our stock closed 20.20 at $56.32 4 percent lower than in 2019. This performance compares favorably against the KBW NASDAQ Regional Banking Index, which decreased by 12%. During 2021, as of last week, our stock price had increased by 34%, the same level as the index. Looking ahead, we are optimistic about the macroeconomic environment and our opportunities for the remainder of the year. In addition to the unprecedented level of federal stimulus related to COVID, Puerto Rico still has available a significant amount of hurricane recovery funds that have not been dispersed and that we expect will now start flowing at a faster pace.
This will generate considerable economic activity in many sectors for the coming years. The pace of vaccination, particularly on the island, is also encouraging. As the data has demonstrated, massive vaccination is the key to controlling the virus. I am proud of how we have partnered with local health authorities and community organizations by lending our facilities and personnel to accelerate vaccination efforts in Puerto Rico. I am happy to report that more than 80% of our employees in Puerto Rico have received at least one dose of the vaccine.
We still have more to do in our other markets, but we are committed to encouraging and facilitating vaccination opportunities for all our colleagues. Our team is focused on supporting our customers and our communities during the transition to a post COVID reality. We're in a strong position to contribute to the recovery and leverage the opportunities that lie ahead. We are guided by our purpose, which is to promote the welfare and prosperity of our clients, colleagues, shareholders and communities. We are convinced that this provides the foundation for the long term success of your company and our ability to deliver value to our shareholders.
Thank you.
Thank you, Ignacio. Now we will proceed to answer questions submitted by shareholders. Please note, we will attempt to answer as many questions as time allows. Any pertinent questions we are unable to address during the meeting will be posted and answered on the corporation's website.
Mr. Chairman, there are no questions from shareholders.
You may proceed. There being no questions, we will proceed with the preliminary bulk results. Broadridge's representative is ready to present his report. Mr. Robles, please proceed to notify us of the preliminary bulk results.
Thank you, Mr. Chairman. Good morning, ladies and gentlemen. My name is Romir Robles Japes, and I represent Broadridge Financial Solutions. The entity authorized by Popular Inc.
To count the votes cast at today's meeting and serve as Inspector of Election for this 2021 Annual Meeting shareholders. I certify the following preliminary results. The 3 nominees to serve as Class 1 of the Board of Directors Alejandro Bagester, Richard Carreon and Carlos Unaonue have all been elected with 97.35%, 97.48% and 97.59% respectively. Of the votes cast by shareholders present or represented by proxy and entitled to vote. The approval on an advisory basis of the compensation of the corporation's executive officers has been approved with 95.26 percent of the shares present or represented by proxy and entitled to vote.
The approval on an advisory basis of a frequency of 1 year for future advisory votes on the corporation's executive compensation has been approved with 93.46 percent of the shares present or represented by proxy and entitled to vote. The ratification of the appointed of the appointment, excuse me, of PricewaterhouseCoopers LLP as a corporation's independent registered public accounting firm for 2021 has been approved with 96% of the shares present or represented by proxy and entitled to vote. The final results will be included in the final report of the Inspector of Elections. Thank you.
Provost, we have received the preliminary vote results. All matters presented before this Annual Meeting of Shareholders have been properly approved by the required votes. There being no further business before this meeting, the 2021 Annual Meeting of Shareholders is hereby adjourned at 9:25 a. M. I would like to thank all shareholders who attended today's meeting as well as those who participated by submitting their proxy.
We are grateful for your continued support. Have a good day.
The Popular Incorporated 2021 Annual Meeting of Shareholders has now come to an end. Thank you for attending. You may now disconnect.