Responsible Banking Report USA 2018

The Team - Opportunity Starts Here | 24 - Professional Development | 25 - Diversity & Inclusion | 26 - Compensation & Benefits | 27 - Volunteerism & Social Engagement | 28 - Workforce Data | 29 2 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

Letter from the President & CEO

In addition to the financial success essential part of meeting demands Our commitment to these key BBVA achieved last year in the U.S., for funds without disrupting initiatives will continue to be one the bank also earned a number of routine operations. Proper liquidity of the threads that bind us to our industry accolades that reflect its management also ensures the bank past achievements as we move commitment to its employees and the continues to be well prepared for forward. Combined with our ongoing communities it serves. Some of the market volatility. And, as the bank digital transformation, BBVA is well most significant achievements were works toward its purpose of bringing positioned for continued success. the bank’s outstanding CRA rating, its the age of opportunity to everyone, we The partnership between our extensive increased commercial customer net envision building a more sustainable branch network and our award- Dear Stakeholders, promoter score, and the recognition future through lending, products and winning digital channels creates in the top five in Futurion’s 2019 services so that we are continually an omnichannel experience that is This year marks my first as the U.S. mobile deposit benchmark report. building value for stakeholders and difficult for a digital-only provider to Country Manager and CEO of BBVA. contributing in a meaningful way replicate. Our own research clearly I am proud to lead such a successful Going forward, we will continue to to a more sustainable world. shows the importance of branches in and committed team of professionals, focus our efforts on those topics support of digital product adoption and I am more than a little impressed that are of specific importance to In an effort to continue providing and, beyond that, we know that with their accomplishments over the our shareholders: data protection, clear and ethical information to consumers consistently use more past year. This year also marks the sustainability, and ethical behavior. our employees and our customers, than one channel. Our objective, bank’s global transition to its new The protection of our customers’ the bank has implemented its therefore, is to serve our customers brand identity. As you may notice data is a critical responsibility, and Transparent, Clear and Responsible according to their needs, providing here, the bank’s individual country one of the fundamental commitments (TCR) Communication project. TCR products and services that match the units have eliminated their individual we make to our customers. This provides transparent and pertinent ways they use the bank, and bring variations — such as BBVA Compass is clearly reflected through the information to employees and clients the age of opportunity to everyone. — in favor of a single, updated BBVA establishment and continual so customers can make sound brand. This new brand clearly defines improvement of our Information financial decisions. The program’s us as a unified organization, one Security Program through policies and principles apply to all functional that collaborates across borders security measures that protect the areas across the organization, and benefits from one another’s confidentiality, integrity and availability particularly marketing and sales innovation and advancement. I of BBVA customer information. materials, legal and compliance expect that BBVA USA will not only documents, and digital channels and benefit from this collaboration but Similarly, sustainability and liquidity are designed to enhance usability, Francisco Javier Rodríguez Soler will continue to lead in innovation management will continue to be a clear presentation and communication President & CEO and digital transformation. key focus for us. The bank’s liquidity of banking information. management has always been an

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Letter from Executive Vice President, Director of Communications and Responsible Business

In 2018, BBVA USA implemented in 2017, expanded to include and the Equileap Global Report on programs and enhanced processes in a entrepreneurs from all states in Gender Equality: 200 Best Global number of key areas, including: the bank’s footprint, and awarded Companies for Gender Equality. Dallas-based On the Road Lending • Lending and Investments a $75,000 first place prize in 2018. As we move through 2019, Responsible Business will continue – The bank has reached in excess – The Center for Financial Education to demonstrate our dedication to the Dear Stakeholders, $2.7 billion in community pilot program took place in 19 global organization’s core values - the development lending, surpassing markets across the bank’s seven- customer comes first, we think big, This past year marks one of the most its 5-year commitment. state footprint reaching over 2,900 rewarding of my career. Through the and we are one team - by delivering in – In year four of its small business low- to moderate-income adults. hard work and dedication of the entire the last year of our $11 billion pledge commitment, BBVA USA is Responsible Business team -- and – The bank conducted round two of and enhancing and building the already more than halfway to its indeed, a diverse team of people from The Opportunity Fellows Program, capstone projects that further affirm $6.2 billion goal, with $4.8 billion across the bank -- BBVA USA has a joint initiative with Opportunity our commitment to the communities in lending as of 2018. achieved more than we ever thought Finance Network that is designed where we operate. possible just a few short years ago. – The bank worked in close to boost the leadership ranks at partnership with 22 CDFIs across community development financial All these efforts combine for one single Throughout 2018, we have continued to our footprint making investments institutions (CDFIs) across the U.S. purpose, which is to bring the age of demonstrate our strong commitment totaling $69.1 million to increase opportunity to everyone. to responsible banking across our CDFI lending capacity. • Employee Involvement footprint with renewed and improved – BBVA employees contributed programs, and that is reflected in the • Community Giving 110,499 volunteer hours in community service activities forward progress we made on our – During 2018, the Community in 2018. 5-year $11 billion commitment for Giving Program invested $9.8 J. Reymundo Ocañas lending, investments and services million in bank charitable Communications and Responsible Additionally, our work in building one supporting low- and moderate-income sponsorships and grants from the Business – EVP, Director, BBVA USA team has earned BBVA a perfect score individuals and neighborhoods. We BBVA Foundation for community- in the HRC 2018 Corporate Equality made this commitment in 2014, and based programs and events. I’m confident that by the end of 2019, Index, national recognition as a we’ll have exceeded the expectations – BBVA Momentum, a five-month DiversityInc 2018 Noteworthy we set for ourselves all those years ago. program for social entrepreneurs Company, and inclusion in the which launched in the U.S. Bloomberg Gender Equality Index

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Executive Summary About BBVA

BBVA USA Bancshares Inc., is a wholly owned subsidiary of BBVA (NYSE: BBVA) (MAD: BBVA). BBVA is a customer-centric global financial services group founded in Simple Financial Services start-up 1857. Headquartered in Houston, BBVA New York Branch Corporate and Investment Banking Texas, BBVA USA Bancshares is a

BBVA San Francisco Sunbelt-based holding company Representative Office whose principal subsidiary, BBVA USA, operates branches in Texas, Alabama, Arizona, California, Florida, Colorado and New Mexico. BBVA USA ranks among the top 25 largest U.S. commercial banks based on deposit market share. BBVA is used as a trade BBVA Home Office name for the US bank.

BBVA provides financial solutions that fit with the lives of our customers.

We offer traditional credit and Head Office Locations deposit products, Small Business Houston office for Branches Administration (SBA) loans, treasury BBVA Mexico management, leasing, accounts- Commercial Office receivable purchasing, asset based lending, international services, insurance, interest-rate protection and investment products, specialized investment portfolio management, $90,947,174 7 644 10,624 traditional trust and estate services, Total Assets (In Thousands) States Branches Employees investment advisory services and financial counseling.

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Key Responsible Business Indicators $3,663,487 $1,190,065 $1,154,791

Revenues in Thousands Operating Costs in Thousands Employee Wages and Benefits in Thousands

$415,546 $351,465 1,914,153

Payments to Providers of Capital in Thousands Payments to Government in Thousands Number of Customers

10,624 644 1,689

Employees Branches Number of Suppliers

$9,834,592 $972,980 110,499

Charitable Contributions Employee Donations Employee Volunteer Service Hours

7,230 29,561 $2.66 billion

Number of Mortgages Number of SME Loan Customers Value of SME Loan Portfolio

$1,174,722,000 $726,241,647 $411,128,000

Small Business Lending Community Development Lending LMI Home Mortgage Lending

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The BBVA Mobile Banking App was named a leader Our Purpose: for the fifth consecutive year for both ease of To bring the age of opportunity to everyone. use and customer service in Javelin Strategy & Research’s 2018 Mobile Banking Scorecard.

Awards

 DiversityInc: 2018 Noteworthy Company

 2018 Corporate Equality Index: 100%

 Bloomberg Gender Equality Index

 Equileap Global Report on Gender Equality: 200 best global companies for gender equality

 Javelin Strategy & Research 2018 Mobile Banking Scorecard: Ease of Use

 Javelin Strategy & Research 2018 Mobile Banking Scorecard: Customer Service

 Futurion 2018 Mobile Deposit Benchmark Report: Top Five Bank in Mobile Deposit User Experience

 American Heart Association: 2018 Workplace Health Achievement Index, Gold Status

 Greenwich Associates: 2018 Customer Service Award: Proactively Provides Advice

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International Commitments & Corporate Policies As a leading financial institution under the umbrella of BBVA Group, BBVA USA actively engages with the global community focused on banking governance. We are aligned with the leading global frameworks, such as Equator Principles and the UN Global Compact, among others as outlined below.

Responsible Decision-Making Framework SUSTAINABILITY

V BBVA Code of Conduct V Conduct in the securities market policy V BBBVA USA Code of Conduct V Code of conduct for suppliers of the BBVA Group V Corporate Social Responsibility Policy V Commitment to Human Rights, January 2018 ✢ Global Compact (UN) V Responsible Procurement Policy ✢ Social Bond Principles (ICMA) ✢ Global Management Committee of the sustainable finances forum ✢ The Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (UN) of the United Nations (UNEP FI) ✢ The Convention on Elimination of All Forms of Discrimination against Women (UN)

✢ The Convention on the Rights of Persons with Disabilities (UN) V Pledge 2025 ✢ The fundamental agreements of the International Labor Organization (ILO)

✢ The International Bill of Human Rights V Prevention of corruption at BBVA SOCIAL ✢ The International Convention on Children’s Rights (UN) V Prevention of money laundering and funding terrorism ✢ The International Convention on Elimination of All Forms of Racial Discrimination (UN)

✢ The International Convention on the Protection of the Rights of all Migrant Workers and Members of ✢ Principles for Responsible Investment (UN) their Families (UN)

✢ The International Covenant on Civil and Political Rights (UN) V Rules conduct in defense ✢ The International Covenant on Economic, Social and Cultural Rights (UN)

✢ The Universal Declaration of Human Rights V Sector Norms for Environmental and Social due diligence

✢ Sustainable Bond Guidelines (ICMA)

V BBVA Group Environmental Commitment V Sustainable Development Goals (SDG’s) Bond Framework ✢ CDP

✢ Green Bond Principles ✢ The Equator Principles (IFC) ✢ RE 100 ✢ Science Based Targets Initiative ✢ The OECD Guidelines for Multinational Enterprises ✢ Task force on Climate-related Financial Disclosures

ENVIRONMENT ✢ United Nations Global Compact ✢ United Nations Sustainable Development Goals

V Corporate (global) ✢ International

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BBVA’s purpose is “to bring the age of opportunity to everyone,” which is summed Strategy up by the tagline “creating opportunities.” Our aim is to help customers achieve their goals in life. We see ourselves as an engine of opportunity that can have an impact on people’s lives and businesses.

Vision

BBVA’s value proposition is built Our Aspiration on a foundation of customer experience and trust.

• Helping customers make the best financial decisions (in banking Through an easy and convenient Offering relevant advice to help experience: DIY through digital our customers make the best and other areas) with a clear, channels or human interaction financial decisions simple and transparent range of products and services. • A commitment to ensuring Strengthening services are available any time, anywhere and in the way the the relationship customer most prefers. with the customer • Helping customers manage their finances by proactively offering customized and innovative services and recommending Providing the best solutions that make customers lives easier the services that best suit their unique financial needs.

Redefining our Value Proposition based on customer experience and trust

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BBVA Values VALUES —————————————————————————— MAIN BEHAVIORS —————————————————————————

Our values define our identity We are empathetic We have integrity We meet their needs and are the pillars for making We factor in the client’s Everything we do is legal, We are fast, agile and our purpose a reality. point of view by putting publishable and morally decisive when solving ourselves in their shoes acceptable by society. We customer’s problems and from the beginning so we always put the customer’s needs. We overcome the BBVA Values Day can understand their interest first. obstacles in our way. BBVA brought the company needs better. values to life through our first ever Values Day in June of 2018. The day was an opportunity for bank employees to celebrate and reflect on what the values We are ambitious We break the mold We amaze our customers look like in action and how we We set ambitious and We question everything we We aim to excel in everything can all work together to live aspirational goals to have a do to find new ways of doing we do in order to amaze them. All 10,000+ employees real impact on people’s lives. things. We innovate and test our customers with unique joined in the reflection and new ideas that help us learn. personal experiences and discussion sessions called solutions that beat their “Values Exchange.” expectations.

“I was so inspired by what was happening and how open people were in the informal settings. They were talking to I am committed I trust others I am BBVA each other about whether we I am committed to my I trust all my coworkers I feel like an owner of BBVA: live our values in the best way role and my goals, and I right from the beginning, I take responsibility for we can and how we can improve feel empowered and fully and I work generously as the bank’s objectives as if on living up to them,” said Onur responsible for achieving I collaborate and break they were my own, and I do Genç, Chief Executive Officer of them. I am passionate and down silos and hierarchical everything in my power to BBVA Group. enthusiastic about my job. barriers. achieve them and make our Purpose a reality.

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“ Business Development’s role in digital transformation BBVA Transformation is to use technology to build the products and solutions that make customers’ lives easier.” –– José Luis BBVA aims to help our customers a result of this transformation, BBVA Elechiguerra, Head of Business Development achieve their life goals. We want to be will provide customers advice that an engine of opportunity and have matches their needs and objectives a true impact on people’s lives and with our products and services. businesses. BBVA Ninja Hackathon Our customers will be able to conduct BBVA is embracing new Birmingham and its programs, Customers expect their transactions their banking with us through digital Problem-solving tools and Shape Birmingham initiative, to be simple, transparent and channels. And those transactions will networks that complement the UAB Sustainable Smart Cities immediate. BBVA is focused on be simple, fast and fully automated, company’s transformation. In Research Center and Tech continually improving the way we whether through our own or third- 2018, the IT professionals in Birmingham. The winning use data and technology to meet party channels. BBVA’s engineering team invited team shared their app with the those expectations. students from the University Regional Planning Commission To achieve this, BBVA is becoming of Alabama Birmingham (UAB) of Greater Birmingham. To accomplish this, BBVA is a truly data-driven company to the inaugural BBVA Ninja undergoing a transformation that will supported by a sophisticated Hackathon. “The Hackathon was an create opportunities to better serve software development platform that opportunity for us to give back our customers and communities. As is responsive to customer needs. Six teams, including 50 to our community, engage engineering employees — known in teamwork, learn new as ninjas — and 10 students technologies, and network with from the UAB’s School of young talent,” said Jason Howard, Engineering, competed against Executive Director of Enterprise one another in a two-day event. Architecture at BBVA USA. “Plus, we basically got to ‘geek out’ for Each team’s goal: to build a two days while drinking coffee mobile app for the Regional and having fun.” Planning Commission of Greater

Total Customers = 1,914,153 Digital Customers = 916,425 (47.8%)

BBVA employee Jarad Clark.

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Materiality Process around the relationship between various stakeholder priorities and BBVA listens carefully to our business strategies. stakeholders in order to inform our business strategy and this report. The materiality process took place In 2018, we conducted a materiality in the following phases: exercise, in conjunction with BBVA 1. Identify relevant issues for Group, to identify strategic priorities. each of the stakeholders Our stakeholders are based on based on interviews with their BBVA Group’s stakeholders, BBVA points of contact. This information supplemented Jorge Rembis (right) and Denisse Abraham work together in Mortgage Operations at the Tempe Operations historical experience and input from Service Center in Arizona. Datamaran (automated processes for information gathered through benchmarking, materiality analysis ongoing listening and dialogue and ESG risk management). tools such as surveys, media analysis and more. The GRI Standards provide two key clarifications As in past years, we conducted a regarding to the Principle of Materiality: 2. Consolidate the issues into detailed review of the available data a single list of twelve. The meaning of ‘impact’ – In the topics by considering the two from surveys, media, customer GRI Standards, unless otherwise dimensions of the principle: feedback, regulatory requirements 3. Prioritize the issues according stated, ‘impact’ refers to the (1) the significance of the and industry benchmarking, among to stakeholder importance effect an organization has on organization’s economic, others. In 2018, BBVA Group based on a series of surveys the economy, the environment, environmental, and social expanded the process to include and interviews, as well as and/or society, which in turn can impacts — that is, their increased collaboration with internal an analysis of social media indicate its contribution (positive significance for the economy, teams including Strategy & M&A and networks, trends and or negative) to sustainable environment or society, as (Mergers & Acquisitions), Client the industry landscape. development. It does not refer to per the definition of ‘impact’ Solutions, Supervisory Relations, an effect upon an organization, — and (2) their substantive Legal Services and Responsible 4. Assess issues for their impact such as a change to its reputation. influence on the assessments Business. This process gave us on BBVA’s strategy with and decisions of stakeholders. greater insight and led to deeper a focus on the company’s Two dimensions – It has been A topic can be material if it ranks internal discussions six Strategic Priorities. clarified that an organization highly for only one dimension is required to identify material of the Materiality principle.

Strategic Priorities Customer Experience Digital Sales New Business Models Optimize Capital Allocation Unrivaled Efficiency A First Class Workforce

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DIY DIY empowers customers to have a do-it-yourself banking experience so they can choose where, when and how they bank.

BBVA USA MATERIALITY MATRIX 2018 Material Topics • Cybersecurity and responsible use of data: stakeholders expect Solvency and sustainable results Through the materiality process, their sensitive financial and other

BBVA identified the following topics personal data to be secure at BBVA. HIGH Cybersecurity & responsible use of data as material: Data is expected to be protected Easy fast & DIY and used carefully and responsibly Corporate governance • Easy, fast and DIY (do it yourself): as approved and always complying Ethical behaviour & refers to the way stakeholders with the law. This is critical to consumer protection interact with BBVA, with a priority maintaining trust. on accessibility, the ability to Talent attraction, Human rights development & retention engage with agility and simplicity, • Ethical behavior and consumer at any time and from anywhere, protection: stakeholders expect Adequate & timely taking advantage of advanced BBVA to be responsible and to advice to customers technology. protect clients or depositors by Environmental & climate change impact acting transparently, offering Diversity & inclusion • Solvency and sustainable results: products that are appropriate to Financial education & inclusion stakeholders expect BBVA to be their risk profile and managing Stakeholders for Importance solvent and sustainable. BBVA’s ethical challenges with integrity. Contribute to societies’ development business model needs to adapt to market changes from disruptive This information supplemented technologies and new competitors, that gathered through ongoing MODERATE Importance for BBVA HIGH to geopolitical issues and more. listening and dialogue tools such as surveys, media analysis

and more. See “Stakeholder Very High High Medium Low Group Approach” on page 14.

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Stakeholder Communication Channel Main Topics What matters to our Stakeholders Main Topics Group

Customers • Materiality assessment • Customer perception towards • Solvency of the entity • Put our clients at the center of the activity • Solicited feedback BBVA • Consumer protection • Drive transparent, clear and responsible communication and • External reputation survey • Bank fees • Cybersecurity and responsible use of data financial education to facilitate informed financial decision making • Formal complaint management • Digital access capabilities • Agility, simplicity, convenience and self-service • Develop social and environmental products and services • Customer appreciation days • Credit decisions • Value counseling: personalized solutions and • Promote financial inclusion recommendations

Employees • Materiality assessment • Employee perception towards • Occupational safety and soundness of • Respect for diversity and promotion of equal opportunities • Internal reputation survey BBVA the company • Promote work-life balance • Emails • Employee benefits • Culture and values aligned with one’s own • Guarantee employee health and safety • Intranet stories and content • Career growth and development • Professional development • Promote a culture of social commitment • Manager talking points • BBVA’s values • Equality of opportunity, diversity and conciliation • Volunteer connection • Company goals • BBVA to be a good place to work • Emails via volunteers mailbox • Volunteering opportunities • Volunteer stories • Volunteer recruitment • Charity program and/or current campaigns

Investors • Investor portal • Principles and policies • Solvency • Transparency in disclosure of information • Fixed Income presentations • Financial information • Shareholder remuneration • Awareness about of shareholders’ rights • Fiscal policy • Strategy and creation of sustainable value • Guarantee equality of treatment • Sustainable finance • Good governance of the entity • Responsible banking • Environment and climate change • Sustainability ratings

Regulators • Materiality assessment • CRA performance exam • Depositor defense, consumer protection • Fiscal strategy and total tax contribution report • Regulatory oversight and relations team • Regulatory reform and fundamental rights (including privacy) • Community Reinvestment Act • Ongoing dialogue with regulators and • Working to create financial education • Solvency and liquidity • Compliance system management examination team opportunities • Good corporate governance and risk management • Quarterly CRA update calls • New investment opportunities (including non-financial) • Email responses to regulator questions • Qualification of community • Sustainability of the business model development activities • Stability and transformation of the financial system • Respect for regulation • Protection of employment • Environment, climate change and sustainable finance

Society/ • Corporate citizenship programs • Financial education • Protection of consumers and their • Commitment to the environment in line with the recommendations Communities & events • Diversity fundamental rights of the Task Force on Financial Disclosures (TCFD) • Community relations team • Opportunities for entrepreneurs/ • Financial inclusion: access to finance • Define and implement a strategy of climate change and sustainable • Diversity team small business • Financial education development for achieving the United Nations Sustainable • Materiality assessment • Financial solutions & opportunities • Environment and climate change Development Goals • Partnerships with NGOs & CDFIs • Community development grants • Financial health • Take part in initiatives to promote responsible practices • Volunteer chapters • Society’s perception towards • Creation of employment • Promote the development of society focused on entrepreneurship • BBVA Foundation BBVA and financial education and knowledge • BBVA Momentum • Participate in initiatives and collaborate with regulators and other • Financial education summit organizations to promote and disseminate responsible practices • External reputation survey • Community Advisory Board Meeting • Needs Assessment Survey

Suppliers • Supplier engagement via email • Third party risk management • Procurement partner planning assistance • Respect human and labor rights in the supply chain, and stimulating registration request • Electronic RFX • Service level agreements demand in socially responsible products and services • Supplier enablement in eProcurement • Procurement partners announced & system implemented • Responsible procurement policy • Service level agreements

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Governance Board of Directors

J. Terry Strange (Chairman) Charles E. McMahen* William C. Helms (Vice Chairman) Jorge Sáenz-Azcúnaga Juan Asúa (Added to the board Guillermo F. Treviño* Leading the Way to Seven of the 11 directors in 2018 were June 13, 2019) Lee Quincy Vardaman* outside, independent directors. The Eduardo Aguirre, Jr.* Mario Max Yzaguirre* Onur Genç Brighter Opportunities bank defines an outside director as Shelaghmichael Brown* Fernando Gutiérrez Junquera (Resigned Francisco Javier Rodríguez Soler Our executives are committed to someone who is not, and within the from the board February 15, 2019) (Added to the board January 24, 2019) helping our customers achieve preceding fiscal year has not been,

financial success. That’s why an officer or employee of BBVA USA * Outside, independent Directors. transparency and accountability Bancshares or any affiliate of BBVA are at the heart of everything USA Bancshares. A director is not considered to be independent if he we do. Our team of leaders are BBVA USA’s New CEO shaping BBVA and creating new or she does not meet several criteria opportunities in banking. including, among others, that he/ Named BBVA USA President & responsibility also included the she has been, within the past three CEO in December 2018, Francisco Real Estate and Equity Holdings years, an employee of BBVA USA Organizational Javier Rodríguez Soler brings a units. Rodríguez Soler joined Bancshares or any of its affiliates or broad range of executive banking the bank in 2008 as a managing Structure an immediate family member is, or experience to the role. His director for Corporate & has been within the past three years, knowledge of banking both in Investment Banking. The Board of Directors, both an executive officer of BBVA USA the U.S. and globally, will help executive and non-executive, Bancshares or any of its affiliates. BBVA stay on the path of “I couldn’t be more excited to oversees BBVA USA Bancshares, Inc. profitable growth and continued be part of the U.S. team and In 2018, J. Terry Strange served as the Detailed information about BBVA USA digital transformation. work with them to advance the non-executive Chairman of the Board. Bancshares, Inc.’s Board of Directors bank’s strategic objectives in the Onur Genç served as both a Board and the bank’s corporate governance Most recently BBVA Group’s country,” Rodríguez Soler said. Member and Chief Executive Officer structure can be found by visiting: global head of Strategy and “I am looking forward to building of BBVA USA Bancshares, Inc. On bbva.investorroom.com/company- M&A, his corporate development on the work Onur has done over December 20, 2018, BBVA announced officers/. Committees and members functions included setting the past two years in order to that Francisco Javier Rodríguez Soler can be found at: bbva.investorroom. strategy at both the group continue the strong momentum would succeed Mr. Genç as President com/board-committees. and country level. His area of now and into the future.” & CEO, because Mr. Genç had been elevated to CEO of the BBVA Group.

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BBVA USA Management Team

Francisco Javier Rodriguez Soler President & CEO

José Luis Çagrı Süzer Kevin McMahon Celie C Niehaus José Olalla Elechiguerra Head of Retail Chief Information Chief Compliance Head of Strategy & Head of Business Banking Officer Officer Global Business Development

Luis De La Rafael E Bustillo Kirk P Pressley Javier Shane Clanton Fuente Chief Operating Chief Financial Hernandez General Counsel & Chief Audit Officer Officer Chief Risk Officer Secretary Executive

J. Reymundo Nathaniel Karp Ocañas Director, Rosilyn Houston Michael W Adler Chief U.S. Economist Communications Chief Talent & Culture Head of Corporate & Responsible Executive & Investment Business Banking

As of December 31, 2018

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Internal Control Model This line helps identify current and emerging risks, defines the control Based on best operational risk policies within the scope of its management practices, BBVA Group cross-sector aspects, ensures that has established and maintained an they are implemented correctly, internal control model organized and provides training and advice around two components: 1) three to the first line. In addition, one lines of defense (3LoD), and 2) a of its main functions is to provide governance scheme called effective challenge of the risk and Corporate Assurance. control activity carried out by the first line of defense. BBVA’s compliance systems are aligned with the most advanced The control activity of the first internal control standards. They are and second lines of defense organized as follows: is coordinated globally by the Global Internal Control Unit within The Group’s areas and/or business the Global Risk Management units constitute the first line of area, which is also responsible defense. They are responsible for for providing these areas/units The second component is the To ensure correct operation, managing current risks, identifying with a common internal control Corporate Assurance program, the program includes an orderly emerging risks, implementing control methodology. which has the role of providing a mechanism for reporting to procedures and recording risks, comprehensive and standardized management. The mechanism is controls and associated test plans in The third line of defense is made up approach to the Board of Directors made up of a number of committees the system of record. of the Internal Audit department, and the management bodies on the at the local and global level in which for which the Group assumes the Group’s internal control process. members of the senior management The second line of defense consists guidelines of the Basel Committee This provides timely information on of the Group and its subsidiaries of the areas/units specializing on Banking Supervision and of the main control weaknesses that take part. The committees seek in control, the main ones being the Institute of Internal Auditors. may arise in the different assurance to discover and make decisions Compliance, Finance (specifically, Its function is designed to provide processes and makes it possible to on control issues that may have a Internal Financial Control), and Global independent and objective assurance prioritize their solution and monitor significant impact on the objectives Risk Management (including, Internal and consulting activity intended the implementation of measures for of the different areas/units, both Control and Operational Risk and to add value and improve the mitigating them more effectively. at the local level and for the Third Party Risk Management). organization’s operations. consolidated Group.

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Compliance System BBVA Group’s global compliance Compliance Training model includes ongoing assessment BBVA USA is committed to of risks and management practices. BBVA USA employees are required interacting with our customers – and The model evolves over time as risks to take compliance training based on all of our stakeholders – fairly and and industry change. their job function. Training programs ethically. Our compliance system, include Foreign Corrupt Practices Act which includes strict codes of ethical This management approach is built (FCPA) training, “Know the Code” conduct, is built on the foundation on the following: training, and Bank Secrecy Act and established by BBVA Group. Anti Money Laundering training. • A suitable organizational structure The Board of Directors received with a clear assignment of roles BBVA’s Compliance Unit is in-person FCPA/Anti-Corruption and responsibilities throughout. responsible for developing training in the September 2018 • Policies and procedures that clearly and implementing policies and Board meeting. define positions and requirements procedures; communication and to be applied. training; and the identification, Mitigation processes and controls assessment and mitigation • 4,806 employees trained in applied to enforce these policies of potential compliance risks. Foreign Corrupt Practices Act. and procedures. These activities are guided by the A technology infrastructure principles set forth by the Bank for • focused on monitoring and International Settlements (BIS) as designed to support the above well as any relevant regulations. 10,446 employees trained in objective. Know the Code. Communication, training systems The Compliance Unit is focused on: • and policies implemented to • Prevention of money laundering raise employee awareness of the and terrorist financing 9,508 employees trained in applicable requirements. • Conduct with customers Bank Secrecy Act and Anti- • Metrics and indicators that allow • Conduct on securities markets the supervision of the global model Money Laundering. • Conflicts of interest implementation. • Prevention of corruption and Independent periodic review of bribery • effective model implementation.

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Know the Code

Standards of Conduct The BBVA Group Code of Conduct unethical behavior via one of the Procurement Policy is applicable to all entities and established anonymous or internal A key component in BBVA’s employees. Both the BBVA USA and reporting channels. In addition to the BBVA USA’s procurement model is compliance program is the Code of the BBVA Group Codes of Conduct BBVA USA and BBVA Group Codes aligned to industry best practices Conduct, which is available on reflect the pledge made by BBVA to of Conduct, we have the following and follows the structure developed BBVA’s investor relations website our stakeholder groups including the important policies, guidelines and by the BBVA Group. BBVA manages (bbvausa.investorroom.com). BBVA communities where we operate. governing bodies in place to support the supply chain by building and employees adhere to two Codes of ethical conduct and controls: managing an external supplier Conduct: the BBVA USA Code of All active BBVA employees are network that supports cost effective Conduct and the BBVA Group Code required to complete robust Code • Corporate Integrity Management responsible bank operations. of Conduct. Both Codes define the of Conduct training annually, and to Committee fundamentals of ethical conduct acknowledge that they have read, • Capital Markets Code of Conduct and the operating guidelines for understand, and agree to follow the for BBVA in the U.S. preserving the bank’s integrity, one Codes of Conduct. of the principal sources of value • BBVA Group Policy on Conduct in creation for the organization. The Codes of Conduct and applicable the Securities Markets training also stress the importance of reporting suspected misconduct/

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“ Over the past years, BBVA has continued to demonstrate our strong commitment to OUR FOUR PILLARS OF RESPONSIBLE BANKING responsible banking across our footprint.” — J. Reymundo Ocañas, EVP, Director of Communications and Responsible Business Balanced relationships Sustainable finance with our customers to fight against climate based on transparency, change & attain Responsible Banking This policy is core to all business clarity & responsibility the UN Sustainable units and support areas’ operating Development Goals BBVA USA is aligned to the Group’s models. The Responsible Business responsible banking model that unit coordinates the policy’s New business builds business success based on implementation and acts as a second models strict legal compliance, best line of support for the business areas, practices and long-term value for challenging their daily business New standard in New standard in customer experience customer experience all stakeholders. This model is practices. outlined in the Corporate Social Drive digital Optimal capital Responsibility Policy. The policy was updated over the sales allocation course of 2017 and approved in The objective of this policy is February 2018, reinforcing BBVA’s to incorporate concerns related to commitment to combat climate Responsible practices Community investment social, environmental and ethical change and promote sustainable with employees, to promote social issues, human rights, and the general finance, and aligning to new suppliers and other change and create concerns of BBVA stakeholders into imperatives in these areas. stakeholders opportunities for all our daily business practices. Both the Board of Directors and the This policy is the basis of a business Management Committee oversee the model that we call “Responsible policy’s implementation. Optimal capital Banking.” We aim to achieve allocation

profitability based on principles, a Unlimited strict conformance with the law, efficiency and by creating valuable, long-term A first class New standard in relationships with our stakeholders. workforce customer experience

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“ This year’s NPS results are a testament to the u The Customer job our Commercial team has done to elevate the client experience.” –– Rafael Bustillo, Chief Operating Officer, BBVA USA

Customer Experience prompt follow-up time and high We also made a knowledge of products and services. concerted effort to Customers are at the center of streamline processes BBVA’s work every day. BBVA USA Client satisfaction improved to make sure that doing listens intently to our customers. because we continue to focus on business with BBVA is We systematically review feedback, understanding and responding to a positive experience complaints and concerns to learn how customer needs with innovative for our customers and to improve customers’ experiences. solutions. these efforts are making Online and banking enhancements a difference. made in 2018 reflect what we learned BBVA was able to surprise and delight by listening. our customers throughout 2018. We hosted two customer appreciation Park & Grant Team in Tucson celebrating customers. days at our retail branches — one in the spring and one in the fall. On these days, we offered a one-day promotional rate for our Certificates of Deposit (CD) products and handed out branded giveaway items. Thousands of customers across A study by Greenwich Associates our branches took advantage of the found that the Net Promoter Score promotional CD rates. (NPS) for our commercial business increased by an impressive 11 points in Various lines of business across one year. The bank had a 70 percent BBVA celebrated clients with coffee, ‘strongly agree’ score in the ease charitable donations, financial

of doing business category, with planning and “Thank You” postcards. The Grove at 150 branch in Hoover, Alabama. customer surveys that highlight

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TCR Communications Express Personal Loan description Non-official complaints are handled Department, which produces written among others. BBVA also provided by the line of business that receives responses to those complaints. BBVA’s goal is to ensure that all employee training across the each complaint. BBVA uses a communications with customers are organization to support the cultural complaint management tool called In 2018, the bank added new transparent, clear and responsible. shift to TCR principals. Service Requests and Complaints to categories within the reporting track complaints by category. tool to better identify trends. BBVA T is for transparent: we provide also formalized procedures for the customers with all relevant Complaint & Claims Official complaints are managed team managing Official Complaint information — on both benefits and Management by the Complaint Management responses to ensure accurate and costs — about our products in a unit of the Customer Compliance consistent responses. timely manner. It is never more important to take great care of our customers than C is for clear: we use language when they are experiencing a Compliance Opportunities and images that are straightforward problem. With that in mind, BBVA and easy to understand. is committed to addressing any In 2018, Celie Niehaus was Collaborating with the Business, customer complaints quickly and named Chief Compliance Officer Legal, Engineering, and other R is for responsible: we look after efficiently. BBVA defines complaints and member of the bank’s groups to ensure that our our customer’s short-, medium-, and as any communication that expresses management committee; “There products and services are easy to long-term interests. dissatisfaction with a bank product, were many things that drew understand, operate exactly the policy or service, or expresses me to BBVA, but the mission to way we say they will, and if there We incorporate TCR throughout our overall negative sentiment about any bring the age of opportunity to is a problem, we can address it communications to help customers type of interaction with the bank. everyone truly resonates with me. quickly, efficiently and completely make informed decisions. By looking I believe that everything we do for the customer. That sounds out for our customers’ interests, we At BBVA USA, complaints are within the Compliance function simple, but it means that we have build trust and improve customer categorized as either official or non- impacts a customer’s experience. to make sure that the front line, relationships. This also means BBVA official. Official complaints are those Maybe not directly, the way that call center, back office, systems, attracts new customers based on that come in through a regulatory our front line people’s work does, processes, etc., all work well recommendations. agency such as the Federal Reserve but we are a part of it all. I want to together. And the ‘we’ is not just Board, Federal Reserve Banks, help all of our Compliance Team Compliance — it’s all three lines In 2018, BBVA updated fee Consumer Financial Protection Members recognize that they of defense working together to descriptions, transaction details for Bureau, State Banking Agencies, create opportunities and one of create an amazing customer both online and mobile transactions, Congress, or State Attorneys General. those opportunities is to create experience. One Team!” — Celie the mortgage welcome letter, and the Non-official complaints are those an amazing customer experience. Niehaus, Chief Compliance that come into the bank directly. Officer, BBVA USA

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A Branch Retail Executive works with a client at the Phoenix Biltmore Branch.

Customer Protection BBVA’s commitment to protect • Confidentiality – We have designed • Availability – Customers’ our customers’ data is reflected our program to prevent the information should be available As a customer-centric organization, in investments in our Information unauthorized disclosure of data to to them at all times. Our program BBVA protects our customers. We Security Program and its continual protect customer confidentiality. puts policies and standards in place look out for their privacy, time and improvement. The bank established to ensure redundancy and the financial health. We keep customer a robust collection of policies, • Integrity – Customers’ data should availability for our critical systems. data protected and secure. We management tools, processes and not change without authorization. use data only for agreed purposes procedures designed to detect and The Information Security and we always comply with the prevent corruption. program is designed to maintain law. This is a material topic for the integrity of the data and to the bank. It is how we maintain Three core responsibilities drive BBVA prevent any unauthorized changes, the trust of our stakeholders. USA’s commitment to customer modifications or corruption. privacy:

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Opportunity One of the important ways that we The Team support employee development is by Starts Here filling vacancies with internal talent. BBVA's purpose — to bring the age In 2018, with the implementation of of opportunity to everyone — begins our new Internal Mobility Policy, as with our employees. We provide a well as People and Role Assessment, positive and rewarding experience our recruiting teams have full visibility throughout our employees’ careers into the talents and technical skills with the bank. Anyone can visit the of our employees. As a result, career site for BBVA at careers.bbva. employees have the opportunity to com to view jobs throughout our match their skills and development global footprint and to find positions goals to opportunities across the that meet their specific interests. bank. In 2018, 43.8 percent of jobs were filled by internal talent. Beginning with our recruiting team, BBVA creates opportunities as we identify, attract and hire the best candidates. To ensure that employees have a positive experience from day one, we rolled out a new agile onboarding process that sets up our people and our business for success. 10,624 employees

Attendees listen to Çagrı Süzer, Head of Retail Banking for BBVA USA, at the Mid-Year Retail Summit in August 2018 Once on board, employees have at The Woodlands Resort and Conference Center in Woodlands, TX. of jobs filled control of their own professional 43.8% by internal growth based on the BBVA People candidates “ I’m so proud to work on behalf of BBVA USA's more Management Model. This model than 10,000 employees, serving them and making includes People Assessment, a meaningful difference in their lives.” –– Rosilyn Role Assessment, Learning and Development. Each of these Houston, Chief Talent and Culture Executive, BBVA USA components works together to offer opportunities to continually grow, develop and learn.

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In 2018, BBVA employees completed 678,695 training hours. 86% of all training via e-learning/virtual delivery channels.

Professional management. In 2018, BBVA USA Data University helps develop the • LEAP (learning, evaluation, Development employees completed a total of 5,050 skills and capabilities of the Data application, and placement) courses, totaling 12,625 hours of Analytics Teams. and LEAP Tech Programs for BBVA employees across the training. Among people managers and recent college graduates allows organization have a wide array of employees, Retaining Employees was Additional learning and development candidates to learn about different opportunities to learn new skills the most popular HMM course, with programs for BBVA USA employees aspects of the business through and expand their career options. To 382 individual completions in 2018. include: rotating assignments across help inform this process and identify several departments. LEAP Tech strengths and career opportunities, Training at BBVA also includes • Role Certification & Development was added in 2018, the ninth year employees participate in a systematic traditional classrooms and role- for Financial Sales Advisors (FSA) of the traditional program. 360 degree assessment of cultural, specific modules that ensure all and Sales and Service Advisors leadership and cross-functional skills. employees have the knowledge (SSA), to evaluate proficiency, • Internship Program for college In 2018, 92 percent of BBVA USA required to do their jobs and to identify areas for development students is a 10-week program for managers completed assessments. support the bank's transformation. and readiness for advancement. interns in Birmingham, Houston In 2018, nearly 76 percent of and Dallas. In 2018, 21 students These assessments help employees In 2018, BBVA USA employees those eligible, or 502 employees, from across the country joined and their managers identify training completed 678,695 training hours. We successfully completed online role BBVA for a rigorous summer and development that match their completed 86 percent of all training certification. learning opportunity. career goals. Many of the training activities via e-learning/virtual and development opportunities are delivery channels, with the remaining • Commercial Relationship • Continuous Learning available on Campus BBVA, an online 14 percent completed in traditional Manager Development Program Requirement for people managers educational resource available to all classrooms. helps prepare employees for a provides extensive and ongoing employees. Relationship Manager role. The training to support employees who BBVA’s Tech University Program training classes included a mix are managing people or teams. Campus BBVA gives employees gives team members the knowledge of credit, portfolio management, All people managers are required to access to Harvard ManageMentor and skills to support BBVA’s sales, product knowledge and job complete a minimum of 12 hours of (HMM), which offers online courses technological transformation. Given shadowing. A total of 14 team developmental training each year. covering a wide array of topics, the bank’s increasing focus on data members participated in 2018. In 2018, 2,301 people managers from engineering and finance to management and protection, BBVA completed a total of 37,157 hours presentation skills and project launched Data University in 2018. of learning.

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Diversity & Inclusion As a result of the company’s commitment to equal employment numerous avenues to raise commitment to diversity in 2018, opportunity and nondiscrimination, complaints, including through Workforce diversity is a core BBVA is now included in the as evidenced by widely disseminated management, the Office of General component of the BBVA culture. We Bloomberg Gender Equality Index, policies prohibiting discrimination Counsel and Corporate Talent & believe it is critical to our ability to a ranking that includes the 100 best in all aspects of the employment Culture or by anonymous reporting attract and retain the most talented global companies in gender diversity, relationship. Employees have through telephone hotlines. workforce. We are building teams and in the Equileap Global Report on that include people with a variety Gender Equality, which selects the of backgrounds and approaches to 200 best global companies in terms problem solving and decision making of gender equality. DIVERSITY & INCLUSION PILLARS in order to achieve better outcomes. BBVA embraces Equal Employment Community Suppliers Workplace BBVA's hiring practices and recruitment Opportunity. BBVA USA has efforts reflect our inclusive approach. a firm and unwavering policy Support social Increase the Develop a culture A recruiter at BBVA USA is dedicated to provide equal employment • • • issues to represent contracting that values to focusing on reaching diverse opportunity without regard to the voices of opportunities diversity and communities including people with age, citizenship, color, disability, diverse populations for Minority and demonstrates disabilities, veterans and those that ethnic origin, gender, gender Women-Owned inclusion identify as LGBT (Lesbian, Gay, identity and expression, marital Invest volunteer Businesses Bisexual and Transgender). status, nationality, national origin, • hours and funding (MBWEs) Leverage workplace race, religion, sexual orientation, • to serve minority diversity and The bank’s Workplace Diversity and genetic predisposition, protected organizations and Commit to building inclusion as an Inclusion Council is a voluntary group veteran status, or any other status • communities new relationships integral element dedicated to promoting diversity and or other classification protected with national and to enhance our inclusion. In 2017, BBVA launched by federal, state or local law. Partner with regional supplier workplace and its first Business Resource Group, • national and organizations that workforce Women in Leadership in Houston, TX This policy includes all job groups, grassroot certify MWBEs and in 2018 expanded the group to classifications and organizational organizations Embrace Birmingham, AL. units. BBVA, from time to time and in • Help diverse opportunities for the ordinary course of its business, • businesses thrive inclusion that will BBVA’s dedication to diversity may receive claims, including support, sustain earned a noteworthy recognition litigation, alleging violations of Ensure responsible and advance our in the 2018 DiversityInc Top 50 employment laws. As of December • procurement organization’s Companies for Diversity. The bank 31, 2018, BBVA USA was not involved practices are taking strategic plan also received the highest possible in any regulatory actions related to place score (100%) in the 2018 Corporate alleged employment discrimination Equality Index, an index that assesses and working conditions that were corporate practices and policies for material to our financial position. LGBT employees. Furthermore, BBVA has a firm 26 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

“ We strive to deliverWorkforce by Gender benefit programs to our team members that help advanceWorkforce by Employment Type our organization’s purpose, values and culture. We have the opportunity to bring meaning[VALUE] and impact to [VALUE]the employee [PERCENTAGE [PERCENTAGE] experience, demonstrate that we[VALUE] value them as individuals, and ultimately] help put them in a position to achieve their personal and professional[PERCENTAGE goals.” –– Troy Farnlacher, Director, Benefits, BBVA USA

] Full-time Part-time [VALUE] to a Health Savings Account (HSA) – Marriage Time Off were $334 million. The Plan has a Compensation[PERCENTAGE & Benefits ] or Health Reimbursement Account – Service Anniversary Time Off 98 percent funded statusTemporary under (HRA). As of Dec. 31, 2018, a total (beginning with the 15th year, [VALUE]both US GAAP and IAS basis. BBVA USA is committed to providing of $4 million dollars had been employees receive one day of [PERCENTAGEDue to the Plan’s frozen benefit Males Females a variety of benefit programs funded through Wellthy Points. paid time off during the year of status,] no additional employer designed to meet employees’ each 5 year anniversary ) contributions were made in 2018. needs, including the award winning In addition to Wellthy Points, in 2018, Wellthy for Life wellnessNew Employee Hires by Age Group program employees were able to earn money • Short-Term DisabilityVoluntary Turnover by Age Group Benefits and The BBVA SmartInvestor 401(k) Long-Term Disability Insurance plan is a voluntary Retirement to support physical, mental, and in their paychecks — up to $200 476 1000 636 600 392 384 financial health and475 overall well- 502 each572 quarter — for maintaining a Program. Ninety percent • Retirement400 benefits255 215 being.500 Benefit plans and programs healthy lifestyle and tracking155 their of active employees have98 a 98 200 cover full- and part-time employees. healthy habits and physical activity. – The Defined Benefit Plan balance in the Plan. Seventy 0 0 Employees <30 30-50Employees are not required>50 to be wasEmployees frozen in 2002<30 to new 30-50percent of active employees>50 They include life and disability enrolled in our company health plan participants and at the end of are currently deferring a Age Group Age Group insurance, retirement plans, to participate. 2017, Plan benefits were also portion of their salary into their health insurance, health spending frozen. The Plan’s liabilities as account each pay period. Males Females Males Females and savings plans, mental health In 2018, BBVA USA added Rethink, of the end of December 31, 2018 benefits, dental and vision insurance, an award-winning program to its pet insurance and identity theft Employee Assistance Plan (EAP) protection, as well as vacation andWorkforce benefit. by Employee Rethink provides Category support paid time-off programs, discounts on to parents raising children with banking services,Senior Mgmt tuition assistance learning64% and behavioral challenges, 35% and scholarshipMiddle Mgmt programs for 43% or developmental disabilities. 57% employees’Professional dependent children. 43% 58% 66% 34% Technical Other employee benefits include: Sales 50% 51% BBVA USA supports and incentivizes Clerical 46% • Paid time off 53% employees’ healthy choices. Employees who participate0% 10% in a 20% 30%– Vacation40% (including50% 60% a carryover70% 80%of 90% 100% variety of medical, social, physical 5Males days) Females and financial activities have the – Community Service opportunity to earn Wellthy Points – Sick Leave From left: BBVA employees Charles Berend, Ana Castald, Eva Maveil, Anne Phan, Dana Lamar Hogan, and David that lead to financial contributions – Pregnancy and Family Leave Sakr relax in the cafeteria at BBVA Plaza in Houston.

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Volunteerism & Social The bank’s Volunteer Chapter of 2018 FIGURES Engagement the Year was also recognized for its volunteering efforts at this event. 114,281 total volunteer hours (110,499 employee The BBVA Volunteers Program hours and 3,742 friends and family hours) is designed to encourage all BBVA participated in BBVA Volunteers bank employees to make an Week, a first time global initiative in impact in their communities. Our 2018. More than seven thousand 5,085 total volunteers including friends and employees lend support through employees across 15 countries family (4,151 employee volunteers and 934 their volunteer efforts to help volunteered in their communities friends and family volunteers) enrich the quality of life and create during one week in September. opportunities for our communities. Nearly 2,000 BBVA USA volunteers participated in 181 activities during $972.980 in total donations from BBVA USA BBVA USA employees receive 16 that week, giving 6,914 hours employees hours of paid time off each year to to our communities. Volunteer use towards volunteer activities. activities focused on meal and food services, environment beautification Many employees invite their friends 1,838 impacted charities and families to join in volunteering. projects, habitat rebuilding and Participation and volunteer time can financial education workshops. be recorded via the bank's tracking platform, Volunteer Connection. BBVA Compassion

To kick off the BBVA Volunteers The BBVA Compassion Team Support Program goals in 2018, the bank Fund launched in 2018. BBVA held its annual Volunteer Summit. Compassion is administered through In its fifth year, the summit had a the BBVA USA Charity Program and record attendance of more than allows employees to make tax-deductible 150 bank employees in Houston, donations to a fund used to help other TX. Employees at the summit team members who find themselves participated in on-site training, in need of financial relief due to a interactive activities and networking. catastrophic event or personal hardship.

A total of $101,779 were granted to employees who submitted applications to BBVA Compassion and were approved BBVA employees participate in Global Week of Service, Sept 24-28 by volunteering in the Greater by the BBVA Compassion Council. Houston community. BBVA employees took advantage of volunteer opportunities at the Houston Food Bank and cleaned up Urban Gardens. 28 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

Workforce Data

Total Employees by State Total Branches by State

370 89

N Alabama N Alabama

N Arizona N Arizona 3,612 63 N California N California

N Colorado N Colorado

10,624 N Florida 644 N Florida 4,468 331 N New Mexico 61 N New Mexico

N Texa s N Texa s

N Other 37 754

45 567 116 447 290 18 Workforce by Employee Category and Age Group

Clerical

Sales N Females > 50

Technical N Males > 50

N Females 30 -- 50 Professional N Males 30 -- 50

N Females < 30 Entry-Level Mgmt N Males < 30

Middle Mgmt

Senior Mgmt

0% 10% 20% 30% 40% 50% 60% 70%

Percentage of Employees 29 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

Workforce Data

Workforce by Gender Workforce by Employment Type

0.5% 2.2%

N Males N Full-time male

N Females 41% N Full-time female 40.8%

N Part-time male 56.5% 59% N Part-time female

New Employee Hires by Age Group Voluntary Turnover by Age Group

476 636 572 392 384 475 502 255 215 N Males N Males 98 155 98 N Females N Females

Age Groups <30 30-50 >50 Age Groups <30 30-50 >50

Workforce by Employee Category

41% 59% Senior Mgmt 43% 57% Middle Mgmt 42% 58% Entry-Level N Males

41% 59% N Females Professional 41% 59% Technical 42% 58% Sales 40% 60% Clerical

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Sustainable Finance Pledge 2025

BBVA’s global strategy on climate change and sustainable development

Our purpose: to bring the age Management of transactions in mining, energy, of opportunity to everyone infrastructure and agribusiness Environmental & Social sectors. To Finance Impacts We will help to create the scale of capital mobilization to halt global climate change & attain the UN Sustainable Development Goals. In February 2018, BBVA Group In defining these norms, BBVA unveiled the bank’s climate change consulted multiple stakeholder • Green finance • Sustainable infrastructure & and sustainable development groups, including ShareAction, a • €100 billion mobilized agribusiness strategy, or ‘Pledge 2025.’ This leading non-profit that promotes Financial inclusion & responsible investment practices in • pledge is the bank’s strategy entrepreneurship to address climate change and environmental, social and corporate governance issues. The norms also To Manage support sustainable development. We will manage our environmental & social risks to minimize potential reflect our Commitment to Human Its focus on green finance, negative direct & indirect impacts. sustainable infrastructure, social Rights, initially made in 2008 and updated more recently. • Transparency in carbon-related entrepreneurship and financial exposure • 70% renewable energy inclusion are aligned with the United • Alignment with 2oC scenario As a global enterprise with operations • 68% GHG emissions Nations Sustainable Development reductions • Sector norms in mining, energy, Goals and is in line with the Paris in dozens of countries, we are signers agribusiness & infrastructure Agreement on Climate Change. of the United Nations’ Principles on Business and Human Rights, and To Engage We will engage with all our stakeholders to collectively promote the Sustainable Development Goals Pledge 2025 also includes specific contribution of financial industry to sustainable development. sector norms, which address and, since 2004, an adoptee of the Equator Principles. The bank is • Taskforce on Climate sustainability, in particular Related Financial Disclosure also involved in a number of sector environmental and social impact. • Active collaboration recommendations implement initiatives, such as our membership in The ‘sector norms’ provide clear action on 2020 guidance and procedures for our the Thun Group on Human Rights. • Financial education interactions with customers and • Promotion of Responsible Banking The sector norms will be reviewed standards within the industry periodically and updated each year.

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Sustainable Financing

$1.1 billion in CRA reportable small business loans $69.1 million to help increase CDFI lending capacity

$718 million supports affordable housing in design 5,961 service hours to small business education

BBVA USA is four years into a five- The Community Reinvestment Act care, education, and social also provided a grant to the year commitment to invest $11 billion (CRA) Program services; national CDFI trade association in lending, investments and services – promotion of economic to develop an innovative leadership BBVA USA challenges itself to design supporting low- to moderate-income development by financing small program to train a diverse cohort products and services that achieve (LMI) individuals and communities in businesses that resulted of CDFI leaders to champion excellence especially for low- to the bank’s footprint. in permanent job creation, transformational change and moderate-income individuals and retention, or improvement, address inequities in access communities. BBVA USA works hard to understand often through SBA lending; to capital. the specific needs of the communities – construction and permanent Our recent CRA performance where we work to deliver products funding of affordable housing; • BBVA USA supports community evaluation of outstanding, covering and services that are responsive to – and revitalization or stabilization development services throughout the evaluation period from April 1, those needs as well as consistent with of low- to moderate-income its footprint. The bank also 2015 to December 31, 2017 and safe and sound banking practices. geographies, including Federal demonstrated that small business announced in April 2018, demonstrates Emergency Management development was a priority, that we are succeeding. As of 2018, the bank is close to Agency (FEMA) designated committing 5,961 service hours to exceeding the Five Year Commitment disaster areas. small business education during • BBVA USA is a leader in making it established. BBVA USA achieved the evaluation period. The bank community development loans, 97% of its commitment through: • The bank made significant showed its willingness to take particularly those that finance investments that demonstrated on leadership roles in many of affordable housing development • Community development loans responsiveness to community the organizations in its footprint through the Low Income Housing • Mortgage and small business loans development needs and often by committing approximately Tax Credit Program and SBA 504 • Community development acted in a leadership position. 24 percent of total community program lending. Community investments BBVA USA is a national leader in development service hours to development lending also met • Grants & contributions providing support for Community board or committee service. critical community development • Down-payment / closing costs Development Financial Institutions needs including: assistance (CDFIs). CDFIs are mission-driven At the end of 2018, BBVA USA is on – community services targeted lenders that finance affordable track to meet or exceed all goals to low- to moderate-income For additional details, see chart on p. 33. housing, small businesses and identified in the 5-year Community individuals including health community facilities. The bank Commitment.

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Community 2019 Goal 2018 Commitment Category (in billions) (in billions) Percent of 5-Year Goal 100%

Home Loans $2.0 $2.1 105%

Small Business Loans $6.2 $4.8 79%

CD Loans $1.8 $2.7 149%

New CD Investments & Grants $0.9 $0.8 92% Percentages are based on Total $11.0 $10.5 97% actual performance, versus rounded numbers.

Lending BBVA USA is an active participant in Community Development Lending In 2018, the bank achieved over 90% the government guaranteed business BBVA continues to place an emphasis of its annual commitment to ensure BBVA USA works with a wide range of lending programs offered through the on innovation and leadership, resulting loans were made in LMI geographies stakeholders to deliver capital, credit, U.S. Small Business Administration. in high impact projects responsive to and for LMI borrowers. financial education, and other solutions These loans benefit small business community needs for housing, jobs, to low- to moderate-income (LMI) borrowers that are not yet qualified healthcare and social services that At BBVA USA, we believe smart neighborhoods with limited access for a traditional bank loan including benefit LMI people and neighborhoods. mortgage lending helps build strong to traditional financial services. Our the need for access to credit by very neighborhoods and communities. That’s primary lending avenues supporting small businesses. BBVA is regularly During 2018, BBVA USA provided why we’re committed to investing in CRA performance are mortgage lending, recognized as one of the leading over 725.8 million in community communities and helping more people small business lending and community SBA small-business lenders. As development loans to support achieve the dream of homeownership development lending. of the SBA’s most recent year end affordable housing for LMI persons, through our Home Ownership Made (9/30/2018), BBVA USA ranked as community services, economic Easier (HOME) mortgages. BBVA USA Small Business the 8th most active 7(a) lender in the development for small businesses, will contribute up to $3500 towards Small business lending continues nation based on total dollar volume. revitalization and stabilization in LMI down payment and closing costs. In to be a cornerstone of BBVA USA’s areas. The bank surpassed its annual addition to the HOME program, BBVA commitment to help our communities BBVA USA serves small businesses community development lending USA offers FHA, VA, HomeReady and thrive. In 2018, the bank extended comprehensively with a suite of training commitment by 196%. USDA loans. more than 21,500 CRA reportable loans tools and activities for entrepreneurs totaling more than $1.17 billion. Our in addition to its tailored products. Home Mortgage small business lending performance Our employees focused on delivering BBVA USA’s mortgage lending demonstrates service to small- and small business financial education commitment to LMI borrowers and micro-enterprises. Over 72% percent workshops, and BBVA executives held communities is a primary focus. We are of the bank’s small business community seats on non-profit boards that assist committed to investing and helping more commitment by dollar volume small business entrepreneurs. people achieve the homeownership benefited small businesses seeking dream as well as remain in their homes. loans equal to / less than $100,000.

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Program help to maximize the Community Helping Small Businesses Community impact of employee volunteer hours. Development Navigate New Tax Laws Development Services

Investments BBVA USA helped small The BBVA Volunteers Program is In 2018, through various efforts, BBVA continued to focus on three In the last four years, BBVA USA has business owners and strategically aligned to support the areas: adult financial education, invested $718 million in affordable entrepreneurs understand bank’s community development support for entrepreneurship and housing. Just one component, the impact of the 2018 tax law investments. By working together small business through education and includes investments of $531 change on their businesses. toward a shared goal, the BBVA training and homebuyer education. million in Low Income Housing The bank teamed up with Foundation and the Volunteers Tax Credits (LIHTCs) that provide Experian to offer a national almost 6,000 units of multifamily webinar that provided access housing including units for homeless to expert advice and insight. and special needs populations. More than 450 attendees BBVA USA also makes significant participated in the online investments in Community workshop, which featured Development Financial Institutions Barbara Weltman, a prolific (CDFIs). We work in close partnership author and trusted advocate with 22 CDFIs across our footprint to for small businesses and make investments and loans totaling entrepreneurs. Weltman has $69.1 million to increase CDFI lending been named one of the 100 capacity. We also provide support to Small Business Influencers the national CDFI trade association in the U.S. five years running, with a focus on supporting and publishes her Idea of the transformational change in the Day and Big Ideas for Small industry and address inequities. Businesses online.

“ The other thing that I really like about this relationship that BBVA is willing to provide some services such as financial literacy lessons that John Lasswell, Community Relations Officer in Florida, supports a BBVA workshop attendee in navigating the Center for Financial Education materials. help us move our residents to self-sufficiency.” –– Michael Lundy, President/CEO, Housing Authority of Birmingham District

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Community Investment

Community Through a combination of corporate The BBVA Foundation funds grants disasters with funding that supports Investments sponsorships, foundation grants across six focus areas including local long-term recovery efforts while and signature initiatives and Community Development, Education, building resiliency. The Community Giving Program at programs, BBVA invested a total Health and Human Services, Arts BBVA USA makes social investments of $9.8 million in community-based and Culture, Diversity and Inclusion, $9.8 million invested aimed at improving economic organizations in 2018. These and Environment and Natural in 925 community- mobility for individuals, working investments supported mission- Resources. In addition to the standard based organizations. families and entrepreneurs in LMI focused work aligned to creating grantmaking process, the Foundation communities across our footprint. opportunities. activates resources in response to

Charitable Contributions

$1,214,582 $1,751,525 N Arts & Culture

$82,500 N Community Development

N Diversity & Inclusion

$1,527,175 N Education

Totals N Environment & $9,834,592.14 Natural Resources N Health & Human Services $558,883

Onur Genç at the Museum of Fine Arts, Houston as it unveils the Glassell School of Art and BBVA Roof Garden. $4,699,927

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BBVA’s financial education workshops reached more than 10,000 adults and children beneficiaries in 2018

BBVA USA launched The Center programs. The sixth year of Project

for Financial Education Community Blue Elf celebrated the achievements Partner Program, a four-month of individuals and families working pilot with 29 community partners towards personal financial in 19 markets across BBVA USA’s milestones. BBVA’s CFE Community footprint. During the pilot, 220 Partner Program selected grantees financial education workshops were to host Project Blue Elf community delivered, reaching over 2,900 low- to events across the footprint. A lucky moderate-income adults. participant/family was surprised at each of the eleven locations with Marcus Castro, CJ Glover & Gary Bishop teaching a workshop on “How Businesses Use Credit” at the Alabama The 29 CFE community partners a meaningful gift aligned to their Small Business Development Initiative in Birmingham. received grants, training and support individual goals. BBVA Volunteers to facilitate financial education were there to celebrate them Financial Education workshops. BBVA USA financial alongside community partners. capabilities coaches supported BBVA USA partnered with EverFi to offered in no-tech, low-tech and high- these nonprofits with their expertise launch the new Center for Financial tech environments. We offer courses by teaching the CFE workshops, Education (CFE) platform in 2016. on adult personal finance education, while also providing access to This suite of financial education homebuyer education, and small technology, educational workbooks, courses is designed to help people business financial education in both and resources needed to help deliver access financial tools and make good English and Spanish. high quality financial education financial decisions. workshops. In 2018, BBVA USA facilitated BBVA USA financial capabilities financial capability workshops BBVA USA’s signature holiday

coaches teach financial education for more than 10,000 adults and initiative, Project Blue Elf, was Project Blue Elf Event at Salvation Army in Birmingham, workshops using innovative, multi- children. To accelerate its financial restructured in 2018 to align with the Alabama. platform curriculum that can be education program for adults, Foundation’s financial capabilities

“ Financial Education is core to our purpose of bringing the age of opportunity to everyone. Through BBVA’s Center for Financial Education, we empower our customers and communities to build the financial futures they envision for themselves and their families.” –– Tony Moraga, VP, Manager of Social Impact, BBVA USA

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“ To become the best at what you do, you must surround yourself with partners who are the best at what they do. BBVA certainly meets that criteria. We are proud to call them a partner.” –– Michelle Corson, CEO, On the Road Lending, 2018 BBVA Momentum First Place Winner

BBVA Momentum impact, and award cash prizes to the top 3 social enterprises. BBVA is committed to supporting entrepreneurs with the goal of In 2018, 16 social enterprises changing lives. We focus on investing participated in BBVA Momentum in entrepreneurs who may have in the USA from Alabama, Arizona, access to fewer opportunities as well California, Colorado, Florida and Texas. as those who are building businesses Over the course of the program, 45 that create higher social value. employees delivered 820 hours of one-on-one technical assistance. The BBVA Momentum is a global program demonstrates that BBVA program designed to support social doesn’t simply talk about needs and entrepreneurs — those whose challenges in our communities; it does businesses aim to solve social something about them. By making problems. BBVA provides intensive these resources available to social online and in-person training, entrepreneurs, BBVA USA has created

strategic mentorship and support opportunities to marry innovation 2018 Momentum Winners from BBVA employees, and global with social impact that benefit networking opportunities. These communities. 2018 Momentum Winners efforts help participating companies scale up and make a positive impact Entreprenuer Business Name Mission Prize on the lives of more people. The

program culminates with a pitch Michelle Corson On the Road Lending Helps people with low- to moderate-incomes 1st Place $75,000 event, where participants present purchase reliable cars with affordable financing their business growth plans to a panel so they can get on the path to economic mobility. of judges comprised of social impact investors, industry experts and bank Scott Bennett Skratch A digital platform that helps connect teenagers 2nd Place $35,000 executives. The panel selects the to work opportunities and offers them financial businesses they believe are the most literacy support. viable to create long-term, meaningful Helaine Blume Pathlight Home Provides afforable housing and economic 3rd Place $15,000 opportunities to change the lives of homeless and low-income adults.

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2017 Momentum Winner ‘Cafe Momentum’ Progress

BBVA Momentum winner from 2017, Thanks to BBVA Momentum, Cafe Cafe Momentum, continues to grow Momentum has significantly increased and serve the Dallas community profits from the catering business thanks in part to the support provided and expanded the number of interns through the program. Cafe Momentum to 43. They also have been able to is a non-profit restaurant that reach their fundraising goal to support provides a 12-month paid postrelease the opening of Cafe Momentum internship program for kids coming Community Services Center, which out of juvenile detention. offers teens in the program a place to learn, study, receive therapy, The internship begins with a 13-week meditation and many more resources. orientation when case managers are assigned to help address basic urgent For more information about Cafe needs, establish a baseline of stability Momentum please visit in their lives and set personal goals. http://cafemomentum.org/. The interns work their way through all areas of the restaurant, learning legal employment, social skills and life skills. After 12 months, program graduates are placed in a job with one of our community partners.

Chad & Malik at Café Momentum Restaurant

38 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

Environmental 6. Managing the direct impact The Environment Commitment through an environmental management system based BBVA’s 2016-2020 Global Eco- systems based on the most BBVA has an important role to play on the ISO 14001 and other Efficiency Plan pursues; advanced standards in protecting the environment, both acknowledged environmental • Alignment with current trends • Promoting energy efficiency, the use through our own operations and standards. in eco-efficiency (sector and of clean energy and other measures our supply chain as well as through 7. Guarantee the transparency of sustainability indexes) to reduce indirect emissions. the products and services we offer, the strategy and environmental • Involvement of all employees in the • Optimizing water use through particularly related to financing performance of BBVA. improvement of eco-efficiency efficient technologies and control projects and asset management. 8. Inform, raise the awareness of, and • Improved monitoring of compliance and management mechanisms In 2018, BBVA Group published the train employees in environmental with the established targets • Encouraging the responsible use of fourth review of our Environmental matters. • Extension of the GEP 2016-2020 to paper and promoting a proper waste Commitment. 9. Provide support for sponsorship, indirect environmental impacts management voluntary work and environmental Through the following strategies; • Involving employees and suppliers The aims of this commitment are to: research. • Counting on a building portfolio in the company’s efforts and environmental management 1. Comply with prevailing In addition to these objectives, environmental regulations where the global climate change and 2016-2020 Global Eco-efficiency Targets we operate. sustainable development strategy 2. Establish a strategy for climate approved in 2018, establishes new Vectors Strategic Guidelines Global Target change and sustainable pledges by 2025, for the reduction of BBVA Group’s carbon footprint. Environmental Management development and support the % occupation in certified buildings 46%* and Sustainable Construction main initiatives in this area. The bank has set a global reduction 3. Integrate environmental variables target of 68 percent of its scope 1 and Consumption per occupant – 5% (kWh/occup) into the Group Risk Management 2 emissions. BBVA also committed Energy and Climate Change % of clean energy 48% Model. to using 70 percent renewable energy

COeq emissions per occupat by 2025, and 100 percent by 2030. – 8% 4. Promote sustainable financing (tCO2 /occp) eq and the development of products As part of this goal, in 2018 BBVA Consumption per occupant joined RE100, a global corporate – 5% and services that contribute to (m3/occup) Water the transition to a low-carbon leadership initiative that brings % occupants in buildings with 9% alternative water sources economy. together influential businesses 5. Guarantee the efficient use of committed to 100 percent Paper consumption per occupant – 5% (kg/occup) natural resources by setting and renewable electricity by 2050. Paper & Waste % occupants in buildings with achieving goals for improvement 30% separate waste collection established in the Global Eco-

Awareness campaigns for Efficiency Plan. Extension of Commitment employees and supplier

* Updated objective after the incorporation of the data from Turkey. Objectives per person. 2015 was the ending year of the previous Global Eco-efficiency Plan 2013-2015 and it was established as the base year to set the targets of the current Global Eco-efficiency Plan 2016-2020. 39 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

Energy & Emissions This system provided us the data Water use to alert our facility management needed to diagnose and correct team of overuse or potential breaks in BBVA USA’s 2018 energy saving design and installation issues at In 2018, total water consumption for the system. This system is expected to projects included replacing heating, several renovated branches including BBVA properties was 295,911,796 save 4.5 million gallons (17,034 m3) of ventilation and air conditioning MacArthur Crossing, Hillcrest and gallons (1,120,148 m3). This amount water at these locations. (HVAC) units across 55 locations Dickinson. covers municipal water data only. in the portfolio. The newer units About 28 percent of this amount Water Totals are typically at least 20 percent BBVA USA also replaced roofs at is estimated for leased sites or

more efficient than the units they 14 locations that included additional those with shared utilities, based on 2018 2017 2016 replace. In 2018, we installed 7 new insulation and white roof membranes extrapolated usage by square foot 3 3 Daintree remote lighting and HVAC for flat roof locations and lighter, from similar buildings reporting 1,120,148 m3 1,186,310 m 1,122,956 m

control systems which adds a total more energy efficient shingle colors actual meter readings. 295,911,796 gal 492,234,426 gal 296,653,591 gal of 15 locations with three more at sloped roof locations. planned for completion in 2019. BBVA USA’s water conservation initiatives in 2018 including replacing Materials

1 faucet aerators in 508 location Energy & Scope 1 & 2 GHG Emissions BBVA consumed 643,003 kilograms reducing flow rates to 0.5 gallons per of paper with 4 percent recycled 2018 2017 2016 minute (gpm) for restroom lavatories, input material, and we recycled saving an estimated 6 million gallons 1,200,918 kilograms of paper in Diesel (liters) 43,661 32,592 43,419 (22,712 m3) of water annually. In 2018, 2018. Recycled input material BBVA also instituted a pilot irrigation Natural Gas (dekatherms) 21,604 17,382 18,763 percentage is calculated by dividing controller project, utilizing advanced paper purchased that contains some Electricity (kWh) 125,647,006 121,255,542 127,741,503 technology to calculate irrigation recycled material, as well as other needs based on weather data, Electricity savings from energy- 1,398,075 1,257,154 790,000 sustainably sourced materials (which efficiency projects (kWh) forecasts, soil moisture and other data. varies for different paper products) by The system will also monitor the water Scope 1 GHG emissions total paper purchased for the year. 1,245 1,005 1,114 (metric tons CO2e)2 Technology & Travel Scope 2 GHG emissions (metric tons CO2e)2 42,924 61,864 63,479 2018 2017 2016

1 Includes estimates using the average emissions per square foot in comparable facilities by state for leased spaces where we lack metered data. Videoconferences 16,249** 102,811 60,892

2 The following gases are included in the GHG inventory: CO2, CH4, and N2O. We followed the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard published by the World Business Council for Sustainable Development Audioconferences 148,615 107,403 102,683 and the World Resources Institute for reporting the GHG inventory. We utilized the latest available emission factors for each fuel type and region and Global Warming Potential factors from the Second Assessment Report (SAR) published Air travel (km) 35,900 37,340 39,908 by Intergovernmental Panel on Climate Change to calculate Scope 1 and 2 GHG inventory.

Air travel (CO2e in tons) 4,390 4,572 4,263

* The following gases are included in the GHG inventory: CO2, CH4, N2O. To report Scope 3 we get the conversion factors from the latest version provided by Department for Environment, Food and Rural Affairs (DEFRA). ** 2018 video conference data does not include WebEx video conferences due to the implementation of a global 40 WebEx solution. BBVA USA no longer has access to country specific data. Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

Appendix

Sustainable and other deprivations must go see page 31.) We are particularly stakeholders, as well as participation Development Goals hand-in-hand with strategies that focused on taking a leadership role in international and industry improve health and education, reduce in SDG 17: Revitalize the Global initiatives that amplify results. The 2030 Agenda for Sustainable inequality, and spur economic growth Partnership for Sustainable Development, adopted by all United — all while tackling climate change Development, which seeks to The following graph outlines how Nations Member States in 2015, and working to preserve our oceans strengthen alliances to achieve BBVA’s responsible business provides a shared blueprint for and forests. the targets. BBVA is committed strategies are linked to our peace and prosperity for people and to engaging all stakeholders to commitment to the priority SDGs the planet, now and into the future. In 2018, BBVA Group announced increase the financial sector’s reflected in this report. At its heart are the 17 Sustainable its strategy around climate change collective contribution to sustainable Development Goals (SDGs), which and sustainable development and development. The SDGs will only are an urgent call for action by our Pledge 2025 to help meet be achieved by working together all countries — developed and the United Nations Sustainable in a broad coalition. This requires developing — in a global partnership. Development Goals (SDGs). (For awareness, shared knowledge, They recognize that ending poverty more information on Pledge 2025, action, dialog and alliances with all

41 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

Initiative Values Strategic Priority SDGs Page in this Report

The Team A First Class Workforce 25 - 30 • Professional Development • Diversity & Inclusion • Compensations & Benefits • Volunteerism & Social Engagement

Governance New Business Models 19 • Standards of Conduct A First Class Workforce • Procurement Policy Unrivaled Efficiency

Sustainable Finance New Business Models 31 - 34 Pledge 2025 A First Class Workforce Community Reinvestment Act • Lending Customer comes first Unrivaled Efficiency – Small Business – Community Development We think big – Home Mortgage We are one team • Community Development Investments • Community Development Services

Community Investment New Business Models 35 - 38 • Community Investments Unrivaled Efficiency • Financial Education • BBVA Momentum

The Environment New Business Models 39 - 40 • Environmental Commitment Unrivaled Efficiency – Energy & Emissions – Water – Materials

42 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

About This Report disclosure by BBVA USA. However, bbvausa.com/our-story/corporate- • Consumer Bankers Association BBVA USA can confirm that it is not responsibility.html (CBA) Reporting Scope and Boundary subject to any formal enforcement • Equipment Leasing and Finance The BBVA Responsible Banking action by any of its state or federal or Association (ELFA) Report – USA is published annually. regulators or subject to any formal • Institute of International Bankers Global Responsible Business This report represents data from agreements with any of its state (IIB) Department the calendar year 2018 covering or federal regulators. • Insured Retirement Institute (IRI) the BBVA USA Bancshares, Inc. Ciudad BBVA – C/ Azul 4 – 28050 • Loan Syndications & Trading portion of the U.S. business unit BBVA USA has not identified any Madrid Association (LSTA) – Associate (including any leased facilities, substantiated complaints that concern [email protected] Member subsidiaries, etc.). Our previous breaches of customer privacy. info.bbva.com • Mortgage Bankers Association (MBA) report was for the year ended bbva.com/es/banca-responsable/ • National Association of Government December 31, 2017. More information GRI Standards Content Index Guaranteed Lenders (NAGGL) Additional information about BBVA is available in the BBVA Group’s 2018 This report has been prepared in • National Housing Conference (NHC) USA can be found under the Investor Financial Report on bbvausa.com, accordance with the Global Reporting • Securities Industry and Financial Relations tab at bbvausa.com, Markets Association (SIFMA) and the investor relations website, Initiative Standards: Core Option. by following @BBVANews_USA bbvausa.investorroom.com. BBVA USA engaged global accounting International (with U.S. nexus – BBVA firm, KPMG, to review the indicators on Twitter or visiting Group or NY Branch is the member) There were no significant changes in accordance with the GRI Standards newsroom.bbvausa.com. • Americas Society / Council of the during the reporting period regarding disclosures as noted in the Content Americas (AS/COA) the organization’s size, structure, Index on pages 44-55. Also refer to BBVA USA • Bankers Association for Finance and ownership, or supply chain. There the Independent Accountants’ Report Trade (BAFT) haven’t been any significant changes on page 56. For more information @BBVA_USA • Institute of International Finance (IIF) from previous reporting periods in the about the Global Reporting Initiative, • International Swaps and Derivatives BBVA in the USA scope, boundary and measurement visit www.globalreporting.org. Association (ISDA) methods applied in the BBVA USA • Spain-U.S. Chamber of Commerce Feedback BBVA in the USA Responsible Banking Report 2018. • Trans-Atlantic Business Council As of the publication date of this We want to hear from you! To submit (TABC) report, BBVA USA is not aware of the a question, opinion or suggestion BBVA in the USA need for restating any material from about this report, please contact: State previously published reports. Department of Corporate Association • Alabama Bankers Association Responsibility and Reputation • Arizona Bankers Association Regulatory Compliance BBVA USA Memberships • Florida Bankers Association Bank supervisory information, 2200 Post Oak Blvd, 21st Floor National • Florida International Bankers including bank ratings, reports of Houston, TX 77056 • American Bankers Association (ABA) Association (FIBA) examination, and informal corrective Tel: 713-831-7487 • Bank Insurance & Securities or enforcement actions, is generally [email protected] Association (BISA) confidential and not subject to bbvausa.com • Bank Policy Institute (BPI) 43 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

GRI Standards Content Index

Disclosure Disclosure Description Chapter Omission Pages General Disclosures 102-1 Name of the organization. About BBVA 5  102-2 Activities, brands, products and services. About BBVA 5  102-3 Location of headquarters. About BBVA 5  102-4 Location of operations. About BBVA 5  102-5 Ownership and legal form. About BBVA 5  102-6 Markets served. About BBVA 5  102-7 Scale of the organization. About BBVA 5-6  102-8 Information on employees and other workers. Workforce Data Total number of employees 29-30 by contract, by region: data not available. No significant  portion of work performed by non-employees or significant seasonal variations. 102-9 Supply chain. Procurement Policy 19  102-10 Significant changes to the organization and its supply chain. About this Report 43  102-11 Precautionary principle or approach. Management of Environmental & Social Impacts 31  102-12 External initiatives. Responsible International Commitments & Corporate Policies 8  102-13 Memberships or associations. Association Memberships 43  102-14 Statement from Senior decision maker. Letter from the President & CEO 3  102-15 Key impacts, risks and opportunities. Letter from the President & CEO 3  102-16 Values, principles, standards and norms of behavior. BBVA Values / Compliance System 10, 18  102-18 Governance structure. Governance / Responsible Banking 15, 20 

 Externally reviewed, see page 56 for Independent Accountants’ Report.

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GRI Standards Content Index

Disclosure Disclosure Description Chapter Omission Pages General Disclosures 102-40 List of stakeholder groups. Stakeholder Group Approach 14  102-42 Basis for identification and selection of stakeholders Materiality Process 12  with whom to engage. 102-43 Approach to stakeholder engagement. Stakeholder Group Approach 14  102-44 Key topics and concerns raised. Stakeholder Group Approach 14  102-45 Entities included in the consolidated financial statements. About BBVA 5  102-46 Defining report content and topic boundaries. Materiality Process 12  102-47 List of material topics. Material Topics 13  102-48 Restatements of information. Reporting Scope and Boundary 43  102-49 Changes in reporting. Reporting Scope and Boundary 43  102-50 Reporting period. Reporting Scope and Boundary 43  102-51 Date of most recent report. Reporting Scope and Boundary 43  102-52 Reporting cycle. Reporting Scope and Boundary 43  102-53 Contact point for questions regarding the report. Feedback 43  102-54 Claims of reporting in accordance with the GRI Standards. GRI Standards Content Index 43  102-55 GRI Content index. GRI Standards Content Index 44-47  102-56 External assurance. Independent Accountants’ Review Report 56 

 Externally reviewed.

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GRI Standards Content Index

Disclosure Disclosure Description Chapter Omission Pages Economic Preformance 201-1 Economic value. Executive Summary 5-6  201-3 Coverage of the organization's defined benefit plan obligations. Compensation & Benefits 27  Indirect Economic Impact 203-2 Significant indirect economic impacts. Sustainable Finance 32-34  Anti-Corruption 205-2 Communication and training about anti-corruption policies Compliance Training A new system was utilized to 18 and procedures. record and report this data in 2018. Total number and percentage of business partners  to whom anti-corruption policies and and procedures have been communicated. Data not available.

Anti-Competitive Behavior 206-1 Legal actions for anti-competitive behavior, anti-trust, Regulatory Compliance 43  and monopoly practices. Materials

301-1 Materials used by weight or volume. Materials 40  301-2 Percentage of materials used that are recycled input materials. Materials 40 

Energy 302-1 Energy consumption within the organization. Energy & Emissions Energy consumption reported 40 in local units of measure or comparability with the US-based  reporting context. Reported in alignment with BBVA global. 302-4 Reduction of Energy Consumption. Energy & Emissions 40  Water 303-1 Water withdrawal by source. Water 40 

 Externally reviewed.

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GRI Standards Content Index

Disclosure Disclosure Description Chapter Omission Pages Emissions 305-1 Direct (Scope 1) GHG emissions. Energy & Emissions 40  305-2 Energy indirect (Scope 2) GHG emissions. Energy & Emissions 40  305-3 Other indirect (Scope 3) GHG emissions. Energy & Emissions 40  Social

401-1 New employee hires and employee turnover. Workforce Data Regional and age group data 30  not available. 401-2 Benefits provided to full-time employees that are not provided Compensation & Benefits 27  to temporary or part-time employees.

Education and Training 404-2 Programs for upgrading employee skills and transition Professional Development 25  assistance programs

Diversity and Equal Opportunity 405-1 Diversity of governance bodies and employees. Diversity & Inclusion Governance bodies. Data 29-30  unavailable. 406-1 Incidents of discrimination and corrective actions taken. Diversity & Inclusion 26 

Marketing & Labeling 417-1 Requirements for product and service information and labeling. TCR Communications 22  417-2 Incidents of non-compliance concerning product and service Regulatory Compliance 43  information and labeling. 417-3 Incidents of non-compliance concerning marketing Regulatory Compliance 43  communications

Customer Privacy 418-1 Substantiated complaints concerning breaches of customer Regulatory Compliance 43  privacy and losses of customer data. Compliance 419-1 Non-compliance with laws and regulations in the social and Regulatory Compliance 43  economic area.

 Externally reviewed.

47 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

GRI Standards Context Index / DMAs

Disclosure Description BBVA Response Material Topic: Fast, Easy, DIY 103-1 Explanation of the material For each material topic, the reporting The stakeholders expect that BBVA make opportunities offered by new technologies available to topic and its boundary organization shall report the following customers in order to facilitate customers to make use of the bank services at anytime and  information: anywhere (mobile banking, wallet, fully digital hiring processes). a. An explanation of why the topic is material. b. The Boundary for the material topic, which Customers throughout the bank’s footprint can make easier financial decisions, have access to  includes improved customer experience, time reduction of banking transactions, and paperwork reduction as a description of: i. where the impacts occur; a result of our digital transformation strategy. . ii. the organization’s involvement with the Digital matters to the business because BBVA firmly believes technology is an enabler for social impacts. For example, whether the organization good. As a business, BBVA has invested significantly – both financially and in resources like time  has caused or contributed to the impacts, or and human commitment – into how it can utilize the latest technologies to support those that bank is directly linked to the impacts through its with it. The BBVA statement of intent around bringing the age of opportunity to everyone is heavily business relationships. influenced by how we can use technology to do this. c. Any specific limitation regarding the topic Not relevant limitations to disclose information.  Boundary. 103-2 The management approach For each material topic, the reporting BBVA’s value proposition is built on the foundations of customer experience and trust. and its components organization • Helping customers to make the best financial decisions (in banking and other areas) via a clear, shall report the following information: simple and transparent range of products and services, grounded on fair conditions and the a. An explanation of how the organization principles of prudence and integrity in order to gain their trust.  manages the topic. • With an easy and convenient value proposition, ensuring that services are accessible anytime, anywhere, and by the means of the customer’s choosing, providing options to engage with the bank automatically, via digital channels, or via human interaction. • Supporting customers as they manage their finances daily, by proactively offering innovative and customized services, as well as recommending the best financial options to suit their needs. b. A statement of the purpose of the Making our customers’ lives easier when they have to make financial decisions and deal with their money.  management approach. BBVA’s strategic priorities have a special focus on digitization and customer experience. c. A description of the following, if the Protecting data and customer information is a key priority and policy. We have lengthy procedures management approach includes that we go through to make sure what we build works well and is the best we can provide for the customer. component: i. Policies Our strategic priorities are linked to creating opportunities for our customers. We have a lot of policies around to ensure we do things right. We have the Single Development Agenda Office (SDA) in each country that manages the entire portfolio of projects with homogenous criteria, and common roles and responsibilities. This team ensures these projects are prioritized, have the necessary  resources, are delivered on time, ensure they are built well and it provides the best service to the customer. This team focuses quarterly on what are the new and best services we need to deliver to our customers. Each quarter, the SDA Office meets with the leading Executives of all departments and the CEO to ensure that all portfolio prioritization and allocation of funds are in line with our bank’s strategic objectives. ii. Commitments BBVA is engaged in finding and implementing new technologies that streamline the customer experience. Helping people and businesses make better financial decisions that help them achieve their personal  and professional goals. iii. Goals and targets Become one of the leading banks in terms of digital transformation BBVA’s role in digital transformation  is to use technology to build the products and solutions that make customers’ lives easier, and then make sure that our customers know those products and solutions are available to them.

 Externally reviewed. 48 Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix Executive Summary Strategy Governance The Customer The Team Sustainable Finance Community Investment The Environment Appendix

GRI Standards Context Index / DMAs

Disclosure Description BBVA Response iv. Responsibilities The collaboration between Business Development, Engineering, Designers, and Global is key to our successes. This complex and intricate system that we use in order to bring the best pieces of Global knowledge with first class Design and combine it with local development to create a Digital Global  leading set of services to a Regional Midsize bank. The Domain Heads of Business Development, Engineering, Compliance, Risk, Talent & Culture, Finance, CIB, and Data meet regularly to discuss these matters. v. Resources The collaboration among Business Development, Engineering, Designers, and Global is key to the Digital Transformation success. This complex and intricate system used to bring the best pieces of  global knowledge with first class design and combine it with local development to create a digital global leading set of services to a regional midsize bank. vi. Grievance mechanisms Any type of opinion that the customer provides by any means (NPS,digital feedback,  complaints, claims, etc.) is examined, with the objective of learning more about their opinions and of having the opportunity to help them resolve any problem by offering simple, clear, agile and personalized responses. vii. Specific actions, such as processes, DIY Services – Mobile Banking, Online Banking – constant enhancements including services projects, programs and initiatives and sales. Digital Sales – Online account origination for all deposit products as well as credit cards and personal loans. We also have digital leads for customers wanting Mortgages and home-equity  products.

Defi – A new product to enhance our Indirect Auto business. Net Cash – Online banking for commercial customers allowing them the ease of use that Retail customers have including a mobile app. 103-3 Evaluation of the For each material topic, the reporting We are continually working to improve the digital sales channels through work with Behavioral management approach organization shall report the following Economics and design. The “funnels” are tested and enhanced to improve customer flow and information: a. An explanation of how the satisfaction throughout the process. organization evaluates the management  We are not focusing on new products, but a focus on improving the process for the ones we approach, including: have, looking for better fraud tools, better ways to verify customer identity and faster ways i. the mechanisms for evaluating the to get customers their products. effectiveness of the management approach; ii. the results of the evaluation of the Digital Sales is a key metric as it is one of the main keys to acquire and serve more clients. management approach; We have KPIs (mobile penetration, digital penetration, customer acquisition, and DIY  servicing) that measure how effectively we are delivering what our customers need. Our goal is to provide our customers with an easy and efficient way to get all the information they need at their fingertips. iii. any related adjustments to the Credit cards and Express Personal Loan are the most recent example of adopting the new  management approach. brand look and feel for bbvausa.com and consistently receiving awards for having one of the best mobile app & mobile functionality in the US.

Material Topic: Data protection 103-1 Explanation of the material For each material topic, the reporting Stakeholders expect their data to be secure at BBVA and to used only for agreed purposes, always topic and its boundary organization shall report the following complying with current law. This is critical to maintaining trust of our customers, present and future.  information: a. An explanation of why the topic is material.

 Externally reviewed.

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Disclosure Description BBVA Response b. The Boundary for the material topic, We maintain data that comes from customers, employees, internally created data, data from  which includes a description of: i. where strategic vendors. the impacts occur; ii. the organization’s involvement with Data that is not protected appropriately could result in a data breach resulting in the exposure the impacts. For example, whether the of critical data of the bank and of our employees and customers. organization has caused or contributed to BBVA USA has developed and implemented policies, standards, controls and security the impacts, or is directly linked to the measures necessary to protect the confidentiality, integrity and availability of BBVA USA  impacts through its business relationships. customer information, which is the foundation of our Information Security Program. We control access to prevent the unauthorized use, access or disclosure, we also have policies that address that data is only to be used for agreed purposes, and we have master service agreements with our vendors which notes that the data received is to only be used for the purposes documented in the agreements. c. Any specific limitation regarding the topic No relevant limitations to disclose information.  Boundary. 103-2 The management approach For each material topic, the reporting BBVA USA has developed and implemented policies, standards, controls and security measures and its components organization shall report the following necessary to protect the confidentiality, integrity and availability of BBVA USA customer information,  information: which is the foundation of our Information Security Program. a. An explanation of how the organization manages the topic. b. A statement of the purpose of the The protection of our customers’ data is a fundamental commitment of BBVA USA and is reflected management approach through the establishment and continual improvement of our Information Security Program. BBVA USA monitors through multiple divisions including Regulatory, Compliance, Legal and Information Security that applicable laws and regulations related to data protection are followed. The most significant and broad regulations that we must comply with related to data protection are included in the Gramm-Leach-Bliley Act (GLBA) specifically the Safeguards Rule 16 CFR Part 314. It notes in section 314.3 the following: You shall develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts and contains administrative, technical, and physical safeguards that are appropriate to your size and complexity, the nature and scope of your activities, and the sensitivity of any customer information at issue. Such safeguards shall include the elements set forth in §314.4 and shall be reasonably designed to  achieve the objectives of this part, as set forth in paragraph (b) of this section. (b) Objectives. The objectives of section 501(b) of the Act, and of this part, are to: (1) Insure the security and confidentiality of customer information; (2) Protect against any anticipated threats or hazards to the security or integrity of such information; and (3) Protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer. As far as GDPR, we have fully assessed the regulation and have determined that the regulation does not apply to BBVA USA directly. However BBVA USA does have a subsidiary that is contractually obligated to comply with certain aspects of GDPR. Legal and Information Security have reviewed those contractual obligations and determined that BBVA USA and applicable subsidiaries have processes in place to comply with those contractually required aspects of the regulation.

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Disclosure Description BBVA Response c. A description of the following, if the The main topics of the BBVA USA Information Security Policies are;  management approach includes that Information security, access management and password control, vulnerability and patch component: i. Policies management, among others. ii. Commitments The bank has many tools to manage data protection and cyber-security including network  monitoring, threat management, data loss prevention, end point protection, disaster recovery, encryption, anti-malware, mobile device management, network access control, data back up and recovery, firewalls, authentication and access management, among others. iii. Goals and targets Our goal is to protect all critical data entrusted to BBVA by maintaining confidentiality, integrity and availability. We implement short and long term strategies to meet our goals  at BBVA USA and its subsidiaries. Our most recent short term goals of enhancing the organizational structure with 20+ additions to staff, enhancing our vulnerability management and monitoring program, enhancements to our Information Security Third Party Risk Management program were all met on time. Our longer term strategic goals of enhancing three major areas of focus including maturing external threat controls, internal threat protection initiatives and first line of defense operational risk control completeness are all on track. iv. Responsibilities Our Data Security Policy mandates that all BBVA USA employees, contractors, and all third party stakeholders that access BBVA USA restricted or internal data, networks or computers must comply with the policy and protect the data. The Divisions that are responsible for governing  and managing data protection and cyber-security are as follows: Information Security which is head by the Chief Information Security Officer (CISO), Information Security Governance which is head by the Director of Information Security Governance / Chief Privacy Officer and reports to the CISO, Legal Governance, and Regulatory Relations. v. Resources The bank has many tools to manage data protection and cyber-security including network  monitoring, threat management, data loss prevention, end point protection, disaster recovery, encryption, anti-malware, mobile device management, network access control, data back up and recovery, firewalls, authentication and access management, among others. vi. Grievance mechanisms In the event of an incident or breach we enact our incident response plans and playbooks.  These plans are tested multiple times per year to make sure we are prepared for these events if they occur. vii. Specific actions, such as processes, Focusing on enhancing our card data protection, data mapping, enhanced segmentation and  projects, programs and initiatives network monitoring. In the event of an incident or breach we enact our incident response plans and playbooks. These plans are tested multiple times per year to make sure we are prepared for these events if they occur. 103-3 Evaluation of the For each material topic, the reporting We maintain a data classification policy which categorizes all data maintained by the bank management approach organization shall report the following into the following categories: Critical, Restricted, Internal Bank Data, and Public. We tier our information: controls to ensure the most critical data is protected with our most rigid controls. a. An explanation of why the topic is material.  We maintain a set of approximately 20 critical key risk indicators that are monitored on a

regular basis. The key risk indicators focus on monitoring increased risks related to vendors, incident attempts, and vulnerabilities and other critical areas that could expose the bank to an increased risk of an incident.

 Externally reviewed.

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Disclosure Description BBVA Response ii. The results of the evaluation of the We maintain a set of approximately 20 critical key risk indicators that are monitored on a management approach regular basis. The key risk indicators focus on monitoring increased risks related to vendors,  incident attempts, and vulnerabilities and other critical areas that could expose the bank to an increased risk of an incident. We continuously enhance our strategies to provide appropriate data protection. iii. any related adjustments to the management In October 2016, the federal banking regulators issued an advance notice of proposed  approach. rulemaking regarding enhanced cyber risk management standards, which would apply to a wide range of large financial institutions and their third-party service providers, including the Company and its U.S. Bank Subsidiaries. Material Topic: Solvency & Sustainability 103-1 Explanation of the material For each material topic, the reporting Stakeholders expect BBVA to be a solvent and sustainable bank. It is imperative to have a topic and its boundary organization shall report the following business model that responds to market changes from disruptive technologies and new  information: competitors, to geopolitical issues and more. a. An explanation of why the topic is material. b. The Boundary for the material topic, BBVA USA and communities where we operate.  which includes a description of: i. where the impacts occur; ii. The organization’s involvement with the Effective liquidity management is essential for the operation of the Company’s business. impacts. For example, whether the The Company requires sufficient liquidity to meet customer loan requests, customer deposit  organization has caused or contributed to the maturities/withdrawals, payments on debt obligations as they come due and other cash impacts, or is directly linked to the impacts commitments under both normal operating conditions and unpredictable circumstances through its business relationships. causing industry or general financial market stress.

 c. Any specific limitation regarding the topic There are no limitations regarding this topic’s Boundary. Boundary. 103-2 The management approach For each material topic, the reporting Liquidity management is independently monitored by the Structural Risk Department under and its components organization shall report the following the company’s Enterprise Risk Management framework. Following BBVA’s global model, the information: Structural Risk Department establishes and monitors compliance with numerous liquidity risk a. An explanation of how the organization management targets both internally derived as well as required by regulators. Additionally, manages the topic. the Internal Audit Department performs regular reviews of liquidity management to ensure  compliance with policies, procedures and regulatory guidelines. BBVA USA maintains policies, procedures and contingency funding plans which are periodically reviewed and approved by various oversight working groups and committees including certain committees of the Board of Directors.

 b. A statement of the purpose of the Keep a good financial condition, mitigate risks and enhance performance of the bank. management approach c. A description of the following, if the Publicly available for us would be the information in our quarterly press releases, our Call  management approach includes that Reports and our SEC filings (primarily our 10-Q and 10-K). component: i. Policies ii. Commitments BBVA USA is subject to the Liquidity Coverage Ratio (LCR) rule issued by the Board of  Governors of the Federal Reserve System. As such, BBVA USA is required to disclose publicly on a quarterly basis quantitative and qualitative information about certain components of its LCR. iii. Goals and targets Perform effective liquidity management to meet the day-to-day cash flow requirements of  its customers, whether they are depositors wishing to withdraw funds or borrowers requiring funds to meet their credit needs.

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Disclosure Description BBVA Response iv. Responsibilities Liquidity management is independently monitored by the Structural Risk Department under the company’s Enterprise Risk Management framework. Following BBVA’s global model, the Structural Risk Department establishes and monitors compliance with numerous liquidity risk management targets both internally derived as well as required by regulators. Additionally, the Internal Audit  Department performs regular reviews of liquidity management to ensure compliance with policies, procedures and regulatory guidelines. BBVA USA maintains policies, procedures and contingency funding plans which are periodically reviewed and approved by various oversight working groups and committees including certain committees of the Board of Directors. v. Resources Customer deposits are the primary source of funds for lending and investing activities and their cost is the largest category of interest expense. BBVA USA also utilizes brokered deposits as a funding source in addition to customer deposits. Scheduled payments, as  well as prepayments, and maturities from portfolios of loans and investment securities also provide a stable source of funds. BBVA USA also borrows both short-term and long-term funds utilizing various financial instruments commonly used in the U.S. banking industry. Notably during 2018, BBVA USA issued $1.15 billion of long-term debt due in 2021 as part of its regular borrowing activities.

 vi. Grievance mechanisms No applicable grievance mechanisms. vii. Specific actions, such as processes, The Company is subject to capital adequacy and liquidity standards. The Company is also projects, programs and initiatives required to submit a periodic capital plan to the Federal Reserve Board under the CCAR process. The capital plan must include an assessment of the Company’s expected uses and sources of capital over a forward-looking planning horizon of at least nine quarters, a detailed description of the Company’s process for assessing capital adequacy, the Company’s capital policy, and a discussion of any expected changes to the Company’s business plan that are likely to have a material impact on its capital adequacy or liquidity. The Federal Reserve Board evaluates the Company’s liquidity as part of the supervisory  process and adopted a final LCR rule. In addition, BBVA designated the BBVA USA Bancshares, Inc. as its IHC to comply with the Federal Reserve Board’s final rule to enhance its supervision and regulation of the U.S. operations of Large FBOs. BBVA USA Bancshares, Inc. is subject to U.S. risk-based and leverage capital, liquidity, risk management, stress testing and other enhanced prudential standards on a consolidated basis under this rule. BBVA’s combined U.S. operations (including its U.S. branches, agencies and subsidiaries) are also subject to certain enhanced prudential standards. These enhanced prudential standards could affect the Company’s operations. 103-3 Evaluation of the For each material topic, the reporting BBVA USA regularly assesses liquidity needs under various scenarios of market management approach organization shall report the following conditions, asset growth and changes in its credit ratings. The assessment includes information: a. An explanation of how the liquidity stress testing which measures various sources and uses of funds under the  organization evaluates the management different scenarios. The assessment provides regular monitoring of unused borrowing approach, including: capacity and available sources of contingent liquidity to prepare for unexpected liquidity i. the mechanisms for evaluating the needs and to cover unanticipated events that could affect liquidity. effectiveness of the management approach; ii. the results of the evaluation of the Management believes that the current sources of liquidity are adequate to meet the  management approach; company’s requirements and plans for continued growth in order to support responsible banking in the communities we serve across our footprint.

iii. any related adjustments to the No relevant changes in 2018  management approach.

 Externally reviewed.

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Disclosure Description BBVA Response Material Topic: Ethical behavior & Consumer protection (TCR) 103-1 Explanation of the material For each material topic, the reporting BBVA stakeholders expect the bank to behave with integrity. In particular, they expect that topic and its boundary organization shall report the following BBVA provide transparent and pertinent information to employees and clients to facilitate  information: customers’ ability to make sound financial decisions. a. An explanation of why the topic is material. b. The Boundary for the material topic, which TCR principles apply to all functional areas across the organization. BBVA prioritizes TCR  includes a description of: i. where the impacts efforts for departments and services that are customer facing or have direct communication occur; with customers. ii. the organization’s involvement with Transparent, Clear and Responsible Banking principles are applied in complement to our the impacts. For example, whether the compliance programs, customer interactions and complaints management. For example, a  organization has caused or contributed to the recent project focused on clarifying fee assessments in response to customer confusion. impacts, or is directly linked to the impacts through its business relationships. c. Any specific limitation regarding the TCR principles can be applied to all areas of the organization. While the program continues topic Boundary. to mature, TCR efforts are focused on areas with the most value added. In efforts to continue  education, awareness and benefits of the concepts, BBVA instituted introductory courses for all new hires, hosted workshops and implemented supplemental training. The long term goal is adoption of TCR across the entire organization. 103-2 The management approach For each material topic, the reporting The Transparent, Clear and Responsible (TCR) Communication approach has the objective and its components organization shall report the following to help customers make informed decisions. It is based on applying the principles of information: transparency, clarity and responsibility on different products and services. a. An explanation of how the organization Transparency means giving the customer the relevant information to make decisions, manages the topic. balancing advantages & costs; Clarity means easy to understand (language, structure,  design); and Responsibility means taking care of the customer in the short, medium and long

term. There is a five phase methodology for introducing TCR into projects which consists of: 1. quarterly planning project selection; 2. contextualized training; 3. implementation and escalation; 4. TCR Report; 5. continuous improvement process. b. A statement of the purpose of the The objectives are to help customers make informed and responsible banking decisions and  management approach improve customer relations with the bank. These actions show that BBVA is committed to our customer. Results of these actions help retain our current customer base, attract new customers, and encourage existing customers to recommend BBVA to others. c. A description of the following, if the BBVA uses the Methodology and Risk Survey (MARS) tool to evaluate risk potential. MARS  management approach includes that helps organize the project management methodology and automate the notification process component: i. Policies to stakeholders across the organization. TCR was added as a Stakeholder on the Mars Survey based on specific criterias met. This allowed us to select a project to focus on for TCR. iii. Goals and targets The objective is to facilitate and promote responsible banking and sound financial decisions. These objectives are accomplished by providing easy to understand and clear interactions throughout all customer touchpoints in order to help customers make informed decisions.  We conduct surveys that include BBVA customers and our peer group customers The survey includes an opportunity for the respondent to score the institutions on providing clear and transparent information. These scores are used as an indication of the customers’ perception and opportunities in areas for improvement.

 Externally reviewed.

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Disclosure Description BBVA Response iv. Responsibilities Program responsibilities include education and training, participation in key customer facing  projects, and day-to-day functions in order to promote adoption and implementation of TCR principles in employees’ daily routines. v. Resources The TCR team is supported by Seamless Experience Management structure. In order to  promote knowledge transfer and incorporation, several TCR delegates has been selected to aid in adoption and practice within their teams. vi. Grievance mechanisms Customer grievances or complaints feedback are accumulated through many input sources  through the bank, including customer facing channels, Official and Non Official Complaints, customer surveys, and Open Market data. Customers also have the ability to score BBVA’s application of transparent, clear and responsible banking through survey feedback. vii. Specific actions, such as processes, Improvement of the fee descriptions displayed on client’s Online Banking Transaction detail, projects, programs and initiatives Mobile Banking Transaction detail, and Deposit Statements. Additional improvements and initiatives are in progress or scheduled to reduce client complaints regarding fees. Improvement of the Mortgage Welcome letter to provide clearer instructions.  Standardized Client Experience and TCR template were implemented for Client Experience Business Partners to incorporate their feedback to BASPAC. Implemented courses for All New Hires. Trained and advised teams across BBVA on implementation of the TCR principles. 103-3 Evaluation of the For each material topic, the reporting Net TCR Score (NTCRS), allows us to measure the degree to which customers perceive BBVA management approach organization shall report the following as a transparent and clear bank compared to its peers in the main localities. information: a. An explanation of how the  organization evaluates the management approach, including: i. the mechanisms for evaluating the effectiveness of the management approach;

 ii. the results of the evaluation of the In 2018 BBVA’s NTCRs Position vs Competitors remained steadily at 7th position. management approach; iii. any related adjustments to the To provide a boarder view and assessment of TCR concepts, Client Experience Business  management approach. Partners have incorporated standardized Client Experience and TCR template to evaluate the projects they review in the BASPAC.

 Externally reviewed.

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KPMG LLP Two Financial Center 60 South Street Boston, MA 02111

Independent Accountants’ Review Report

The Board of Directors and Management BBVA USA Bancshares, Inc.:

We have reviewed the disclosures identified with the symbol “√” (the Disclosures) included in the GRI Standards Content Index tables on pages 44 through 55 of the accompanying BBVA Responsible Banking Report USA 2018 (the Company) for the year ended December 31, 2018 (the 2018 Responsible Banking Report). BBVA USA Bancshares, Inc.’s management is responsible for preparing and presenting the Disclosures in accordance with the criteria set forth for each related disclosure in the Global Reporting Initiative Standards (GRI Standards). Our responsibility is to express a conclusion on the Disclosures based on our review.

Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the review to obtain limited assurance about whether any material modifications should be made to the Disclosures in order for them to be in accordance with the criteria. A review is substantially less in scope than an examination, the objective of which is to obtain reasonable assurance about whether the Disclosures are in accordance with the criteria, in order to express an opinion. Accordingly, we do not express such an opinion. We believe that our review provides a reasonable basis for our conclusion.

The preparation of the Disclosures requires management to interpret the criteria, make determinations as to the relevancy of information to be included, and make estimates and assumptions that affect reported information. The selection of different but acceptable measurement techniques can result in materially different measurements. Different entities may make different but acceptable interpretations and determinations.

Based on our review, we are not aware of any material modifications that should be made to the disclosures identified with the symbol “√” included in the accompanying 2018 Responsible Banking Report in order for them to be in accordance with the criteria as set forth for each related disclosure in the GRI Standards.

The 2018 Responsible Banking Report includes summarized prior year comparative information for the years ended December 31, 2017 and 2016. Accordingly, the December 31, 2017 information should be read in conjunction with the Responsible Banking Report of BBVA USA Bancshares, Inc. for the year ended December 31, 2017 with our Independent Account’s Review Report dated October 22, 2018, thereon, from which such summarized information was derived. The information for the year ended December 31, 2016 was not reviewed by us, and accordingly, we do not express any form of assurance on it.

Boston, Massachusetts January 17, 2020

KPMG LLP is a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.