Form 8-K POPULAR INC For: Jan 22

January 22, 2015 8:02 AM

�

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

�

Form 8-K

�

CURRENT REPORT

Pursuant to Section�13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report�(Date of earliest event reported): January�22, 2015

�

POPULAR, INC.

(Exact name of registrant as specified in its charter)

�


Puerto Rico	�	001-34084	�	66-0667416
(State or other jurisdiction of incorporation or organization)	�	(Commission File Number)	�	(IRS Employer Identification Number)

209 Munoz Rivera Avenue Hato Rey, Puerto Rico			�	00918
(Address of principal executive offices)			�	(Zip code)

(787) 765-9800

(Registrant�s telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

�

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

�

�	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

�

�	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

�

�	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

�

�	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

�

Item�7.01.

Regulation FD Disclosure

Popular, Inc. is furnishing information regarding its conference call to discuss its financial results for the quarter ended December�31, 2014. A copy of the presentation to be used by Popular, Inc. on the conference call is attached hereto as Exhibit 99.1.

Popular, Inc. does not intend for this Item�7.01 or Exhibit 99.1 to be treated as �filed� under the Securities Exchange Act of 1934, as amended, or incorporated by reference into its filings under the Securities Act of 1933, as amended.

�

Item�9.01.

Financial Statements and Exhibits

The following exhibit shall not be deemed to be �filed� for purposes of the Securities Exchange Act of 1934, as amended.

Exhibit 99.1-Popular, Inc. Conference Call Presentation � Fourth Quarter 2014 Financial Results

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

�


	�		�	POPULAR, INC.
	�		�	(Registrant)

Date: January�22, 2015	�	By:	�	/s/ Jorge J. Garc�a
	�		�	Jorge J. Garc�a Senior Vice President and Corporate Comptroller

Investor Presentation

Fourth Quarter 2014

Exhibit 99.1

Forward Looking Statements

The information contained in this presentation includes forward-looking statements within the

meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are

based on management�s current expectations and involve risks and uncertainties that may cause the

Company's actual results to differ materially from any future results expressed or implied by such

forward-looking statements. Factors that may cause such a difference include, but are not limited to

(i) the rate of growth in the economy and employment levels, as well as general business and

economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) the

fiscal and monetary policies of the federal government and its agencies; (iv) changes in federal bank

regulatory and supervisory policies, including required levels of capital; (v) the relative strength or

weakness of the consumer and commercial credit sectors and of the real estate markets in Puerto

Rico and the other markets in which borrowers are located; (vi) the performance of the stock and

bond markets; (vii) competition in the financial services industry; (viii) possible legislative, tax or

regulatory changes; (ix) the impact of the Dodd-Frank Act on our businesses, business practice and

cost

operations;

and

(x)

additional

Federal

Deposit

Insurance

Corporation

assessments.

Other

than

to the extent required by applicable law,� the Company undertakes no obligation to publicly update or

revise any forward-looking statement. Please refer to our Annual Report on Form 10-K for the year

ended December 31, 2013 and other SEC reports for a discussion of those factors that could impact

our future results. The financial information included in this presentation for the quarter and year

ended December 31, 2014 is based on preliminary unaudited data and is subject to change.

2014 Full Year Highlights

�

NPLs increased by $27 million YoY; ratio at 3.2%

�

NPL inflows, excluding consumer loans, up by $22 million YoY

�

NCOs ratio of 0.92%�

compared to 1.19%�

last year

�

Reported net loss of $309 million for 2014; adjusted net income of $305 million�

�

Strong margins: Popular, Inc. 4.67%�

adjusted

Credit

(excluding�

covered loans)

TARP

Earnings

BPNA

Restructuring

�

Completed TARP repayment on July 2, 2014 without raising additional equity

�

Strong capital ratios post TARP repayment

Adjusted

net

income

from

continuing

operations;

see

appendix

for

reconciliation

GAAP.

�

GAAP net interest margin was 3.16%. See appendix for reconciliation to GAAP.

�

Excludes net write-downs related to BPNA�s legacy and classified assets sales for 2014 and BPPR�s NPL sales for 2013.

�

Completed transactional portion of US restructuring

�

Strategic focus going forward on NY metro and South Florida regions

Category

Market

position

Market

Total Deposits (Net of brokered) *

40%

Total Loans *

37%

Commercial & Construction Loans *

40%

Credit Cards �

52%

Mortgage Loan Production �

32%

Personal Loans *

31%

Auto Loans/Leases

18%

Assets Under Management

16%

Q3 2014

Popular�s Puerto Rico Market Share by Category

Market Leadership in Puerto Rico

Source: Puerto Rico Office of the Commissioner of Financial Institutions, COSSEC,� and 10K Reports.*Information included pertains to PR Commercial Banks and Credit Unions.

�

Mortgage loan production and credit card data for certain competitors is not publicly available; figures presented for competitors were estimated.

Popular�s Puerto Rico

Market Share Trend

38%

37%

35%

42%

40%

39%

40%

24%

23%

22%

33%

34%

35%

36%

37%

2007

2008

2009

2010

2011

2012

2013

Q3 2014

Total Deposits (net of brokered)

Total Loans

Q4 2014 Highlights

�

NPL ratio unchanged at 3.2%

�

NPL inflows up $83 million QoQ

�

NCOs

1.04%

compared

0.83%

last

quarter;

increase

$10

million

�

Reported

net

income

$53

million;

adjusted

net

income

$81

million

�

Strong

margins:

Popular,

Inc.

4.70%

adjusted;

BPPR

5.15%

Credit

(excluding�

covered loans)

BPNA

Restructuring

Earnings

�

Robust

capital;

Tier

Common

Equity

ratio

15.9%

Capital

�

California transaction completed in Q4 2014

�

US operational restructuring initiative on track; expected completion first half

of 2015

Adjusted

net

income

from

continuing

operations;

see

appendix

for

reconciliation

GAAP.

�

GAAP net interest margin was 4.45%. See appendix for reconciliation to GAAP.

�

Excludes net write-downs related to BPNA�s legacy and classified assets sales.

Capital

ratios

for

the

current

quarter

are

preliminary.

Financial Summary (non-GAAP)�

____________________

�

Unaudited. See Appendix for reconciliation to GAAP.

($ in thousands)

Q4 14

Q3 14

Variance

Net interest income

345,452

$��

347,084

$��

(1,632)

$��

FDIC loss share expense

(18,693)

��

(19,910)

��

1,217

��

Other non-interest income

126,904

��

129,194

��

(2,290)

��

Gross revenues

453,663

��

456,368

��

(2,705)

��

Provision for loan losses � non-covered loans

50,759

��

56,216

��

(5,457)

��

Provision for loan losses � covered loans

(3,646)

��

12,463

��

(16,109)

��

Total provision for loan losses

47,113

��

68,679

��

(21,566)

��

Net revenues

406,550

��

387,689

��

18,861

��

Personnel costs

107,762

��

104,542

��

3,220

��

OREO expenses

20,016

��

19,745

��

271

��

Other operating expenses

182,966

��

178,063

��

4,903

��

Total operating expenses

310,744

��

302,350

��

8,394

��

Income from continuing operations before income tax

95,806

��

85,339

��

10,467

��

Income tax� expense

14,995

��

3,610

��

11,385

��

Income from continuing operations

80,811

$��

81,729

$��

(918)

$��

BPNA Restructuring-Operational Reorganization

�

California transaction closed in Q4 2014 for $8.1 million net gain

�

Strategic focus going forward on NY metro and South Florida regions

�

US operational restructuring initiative progress on track with expected completion

first half of 2015

Annualized cost savings of $34 million beginning in Q2 2015

Operational

Reorganization

Balance Sheet

Management

�

Sold approximately $93 million book value of legacy and classified assets in bulk

transactions during Q4

US region ended Q4 2014 with total NPLs of $19 million or 0.55% of loans

�

$638 million in high cost repo funding refinanced in Q3 2014; blended cost over 4%

Total refinancing penalty of $40 million; $19 million recognized

in Q4 2014

BPNA�s

adjusted

NIM

increased

3.82%�

from

3.23%�

Lower

risk

profile

and

smaller

balance

sheet

yield

additional

excess

capital

____________________

�

GAAP net interest margin was 2.40% and 1.82% for Q4 and Q3, respectively. See appendix for reconciliation to GAAP.

14.8

19.2

20.4

11.1

15.9

18.2

19.5

11.4

16.5

16.9

19.6

Tier 1 Common

Tier 1 Capital

Total Capital

Tangible Common Equity

Q4 2013 (Basel I)

Q4 2014 (Basel I)

Q4 2014� (Basel III)

Capital

�

Capital ratios for the current quarter are preliminary. Basel III capital ratios calculated under the transitional Capital Rules for non-advanced

approach banking organizations in effect as of January 1, 2015.

�

Tier 1 Common Equity capital ratio of 15.9%; exceeds YE 2013 ratio before TARP repayment

�

We expect to remain �well-capitalized�

under Basel III rules issued by the Federal Reserve

Popular,

Inc.

Capital

Ratios�

Non-Performing Assets ($MM)

Non-Performing Assets

�

NPLs, excluding covered loans,� remained stable at 3.2% of loans, increasing slightly by $3 million QoQ

�

NPAs, including covered loans, down by $16 million QoQ

Non-Performing Loans ($MM)

BPPR NPLs of $606 million, or 3.8% of loans, increased $14 million

Commercial NPLs up $13 million; includes the addition of a $75

million public sector borrower, in part offset by the return to

accrual of the $51 million addition in Q1 2014

Mortgage NPLs� increased $8 million

US operations NPLs of $19 million, or 0.6% of loans, declined

$11 million

Commercial and legacy NPLs down $6 million and $4

million, respectively, primarily� due to loan resolutions

Mortgage NPLs down $2 million, mainly related to NPL loan

sales

________________________________

Metrics exclude covered loans. Differences due to rounding.

635

625

1,008

771

781

923

1,028

1,203

1,404

1,978

2,116

2,276

2,313

2,330

2,344

1,572

1,614

1,625

1,732

1,738

1,682

1,563

1,550

1,425

1,051

614

618

598

640

622

3.1%

2.8%

2.9%

3.5%

3.9%

4.7%

5.6%

8.0%

8.7%

9.6%

10.0%

10.4%

10.6%

7.6%

7.9%

8.4%

8.2%

7.6%

7.5%

6.8%

4.9%

2.9%

2.8%

2.9%

3.3%

3.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14

Q3 14

Q4 14

Mortgage

Commercial & Construction

Other

NPL/Loans (HIP)

956

928

1,142

852

866

1,026

1,101

1,293

1,500

2,084

2,245

2,402

2,448

2,539

2,623

2,489

2,314

2,277

2,254

2,365

2,311

2,178

2,120

2,002

1,420

993

944

932

956

943

2.4%

1.9%

2.1%

2.5%

2.7%

3.3%

4.0%

5.7%

6.3%

6.9%

7.2%

6.0%

6.4%

6.0%

5.8%

5.9%

6.3%

6.2%

5.9%

5.8%

5.5%

3.8%

2.7%

2.6%

2.8%

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14

Q3 14

Q4 14

NPLs

OREO

NPL HFS

NPAs/Total Assets

OREOs

decreased

$21

million,

primarily

from

the

sale

commercial

properties

from

the

covered

OREO

portfolio.

Mortgage NPL Inflows� ($MM)

Total NPL Inflows� ($MM)

NPL Inflows

PR commercial inflows up $89 million; includes

the impact of a single $75 million public sector

credit

PR mortgage NPL inflows declined by $6 million,

or 7%

US total NPL inflows remained essentially

unchanged at $10 million�

Commercial, Construction & Legacy NPL Inflows� ($MM)

Excludes consumer loans

101

100

113

Q4 11

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14

Q3 14

Q4 14

US Inflows

PR Inflows

________________________________

Metrics exclude covered loans. Differences due to rounding.

232

187

166

157

167

110

105

Q4 11

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14

Q3 14

Q4 14

US Inflows

PR Inflows

333

279

231

257

210

158

136

126

183

136

119

202

Q4 11

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14

Q3 14

Q4 14

US Inflows

PR Inflows

�

Total NPL inflows increased by $83 million QoQ

ALLL ($MM), ALLL-to-NCO and ALLL-to-NPL Ratios

NCO ($MM) and NCO-to-Loan Ratio

Provision ($MM) and Provision-to-NCO Ratio

Asset Quality

�

NCOs up $10 million QoQ (excluding write-downs), in part due

to higher recoveries in Q3 2014

�

Provision decreased by $17 million QoQ

�

ALLL essentially flat at $520 million, decreasing by $2 million

QoQ; ALLL to loans at 2.68% vs. 2.69% in Q3 2014

�

ALLL to NPL coverage ratio stable at 83% in Q4 2014 vs. 84% in

Q3 2014

________________________________

Metrics exclude covered loans. Differences due to rounding.

Q4 11

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14

Q3 14

Q4 14

ALLL

ALLL/NCO

ALLL/NPL

Q4 11

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14

Q3 14

Q4 14

PLLL

Bulk Sale PLLL

PLLL/NCO

Bulk Sale PLLL/NCO

Q4 11

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

Q2 14

Q3 14

Q4 14

NCO

Bulk Sale Charge-offs

NCO%

Bulk Sale NCO%

NCO ratio of 1.04% vs. 0.83% in Q3 2014

Provision to NCO of 99%

PR Public Sector Exposure

�

Loans to the Government of Puerto Rico

and Public Corporations are either

collateralized loans or obligations that

have a specific source of income or

revenues identified for their repayment.

�

Loans to various municipalities are

backed by unlimited taxing power or

real and personal property taxes

collected within such municipalities.

Our current direct exposure to the PR government, instrumentalities, and municipalities is $1.0 billion, of which

approximately $811 million is outstanding, up $84 million from Q3 2014.

PR Central Government & Public Corporations

Municipalities

�

Indirect exposure includes loans or

instruments that are payable by non-

governmental entities and have a

government guarantee to cover any

shortfall in collateral in the event of

borrower default. Majority are single-

family mortgage related.

Indirect Exposure

_________________________________

�

Includes PR government banks and COFINA.

Outstanding PR government exposure

($ in millions)

Loans

Securities

Total

Central Government �

100

$��

161

$��

Public Corporations

PRASA

100

��

101

��

PREPA

��

PRHTA

��

OTHER

��

Total Central Govt & Public Corp.

275

��

337

��

as % of Tier 1 Capital

8.7%

Municipalities

414

��

474

��

Direct Government Exposure

689

$��

122

$��

811

$��

Indirect Exposure

321

$��

370

$��

Driving Shareholder Value

�

Robust capital with Tier 1 Common Equity of 15.9%

�

TARP repayment and BPNA transactions move us toward a more active capital

management process

�

Unique franchise in PR provides strong, stable revenue-generating capacity

�

Continued stability in Popular�s credit metrics

�

EVTC ownership, BHD stake and restructured US operations

Capital

Additional

Value

Earnings

Investor Presentation

Fourth Quarter 2014

APPENDIX

Selected equity investments

(first two under �corporate�

segment and third and fourth under PR):

Who We Are �

Popular, Inc.�

Franchise

�

Financial services company

�

Headquartered in San Juan, Puerto Rico

�

$33 billion in assets (bank holding company in the U.S.)

among top 40

�

$22 billion in total loans

�

$25 billion in total deposits

�

224 banking branches serving customers in Puerto Rico,

New York, New Jersey, Florida, and U.S. and British Virgin

Islands

�

NASDAQ ticker symbol: BPOP

�

Market Cap: $3.5 billion

_____________________________________�

Note: Information as of� December 31, 2014

*Doing business as Popular Community Bank.

Summary Corporate Structure

Assets = $33.1 bn

Popular Auto,

Inc.

Banco Popular

de Puerto Rico

Popular

Securities, Inc.

Assets = $27.4 bn

Assets = $5.5bn

Banco Popular

North America*

Puerto Rico operations

Popular

Insurance, Inc.

Popular North

America, Inc.

U.S. banking operations

Transaction processing,

business processes��

outsourcing

14.96% stake

Adjusted EBITDA� of� $184.4

million for the twelve months

ended September 30, 2014

Dominican Republic

bank

15.82% stake

2013 approximate

net income $111

million

PRLP 2011 Holdings, LLC

Construction and

commercial loans vehicle

24.9% stake

PR Asset Portfolio 2013-1

International, LLC

Construction, commercial

loans and OREOs vehicle

24.9% stake

GAAP Reconciliation Full Year 2014

_____________________________________�

* Unaudited.

�

Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.

�

Excludes the impact of $414.1 million TARP discount amortization and the impact of $39 million pertaining to US repos refinancing.� GAAP net interest margin was 3.16%.

(In thousands)

Actual

Results��

(US GAAP)

TARP discount

amortization

BPNA

Reorganization

Income Tax

Adjustments

Other

Adjustments

Indemnification

Asset

Adjustment

Adjusted

Results��

(Non-GAAP)

Net interest income (expense)�

$� 945,072

$�� (414,068)

$�� (39,254)

$� 1,398,394

Provision

for

loan

losses

�

non-covered

loans

223,999

12,828

211,171

Provision

for

loan

losses

�

covered

loans �

46,135

Net interest income (expense) after provision for

674,938

(414,068)

(52,082)

1,141,088

Net gain on sale of loans, including valuation

adjustments on loans held-for-sale

40,591

1,684

38,907

FDIC loss share expense

(103,024)

12,492

(115,516)

Other non-interest income

455,479

Personnel costs

418,679

2,974

415,705

Net occupancy expenses

86,707

1,895

84,812

Loss on early extinguishment of debt

532

Restructuring costs

26,725

Other operating expenses

661,041

(Loss) income from continuing operations before

income tax

(125,700)

(414,068)

(77,655)

(4,869)

12,492

358,400

Income tax expense

60,802

4,655

2,498

53,649

(Loss) income from continuing operations

$ (186,502)

$�� (414,068)

$�� (77,655)

$�� (4,655)

$�� (4,869)

$�� 9,994

$�� 304,751

Basic and diluted EPS from continuing operations

(1.85)

$��

Net interest margin

4.67%

�

Tangible common book value per common share

35.93

$��

Market value per common share

34.05

$��

2014 *

GAAP Reconciliation Q4 2014

_____________________________________�

* Unaudited.

�

Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.

�

Excludes the impact of $18.6 million pertaining to US repos refinancing. US GAAP net interest margin was 4.45%.

(In thousands)

Actual

Results��

(US GAAP)

BPNA

Reorganization

Other

Adjustments

Adjusted

Results��

(Non-GAAP)

Net interest income (expense)�

$�� 326,861

$�� (18,591)

$�� 345,452

Provision

for

loan

losses

�

non-covered

loans

51,637

878

50,759

Reversal

provision

for

loan

losses

�

covered

loans �

(3,646)

Net interest income (expense) after provision for loan losses

278,870

(19,469)

298,339

Net gain on sale of loans, including valuation adjustments on loans held-for-sale

10,946

1,684

9,262

FDIC loss share expense

(18,693)

Other non-interest income

117,642

Personnel costs

110,736

2,974

107,762

Net occupancy expenses

23,877

1,895

21,982

Loss on early extinguishment of debt

532

Restructuring costs

13,861

Other operating expenses

181,000

Income (loss) from continuing operations before income tax

58,759

(32,178)

(4,869)

95,806

Income tax expense

14,995

Income (loss) from continuing operations

$�� 43,764

$�� (32,178)

$�� (4,869)

$�� 80,811

Basic and diluted EPS from continuing operations

0.41

Net interest margin

4.70%

�

Tangible common book value per common share

35.93

Market value per common share

34.05

Q4 2014 *

GAAP Reconciliation Q3 2014

_____________________________________�

* Unaudited.

�

Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.

�

Excludes the impact of $21 million pertaining to US repos refinancing. US GAAP net interest margin was 4.36%.

(In thousands)

Actual

Results�� BPNA

(US GAAP)

Reorganization

Income Tax

Adjustments

Indemnification

Asset

Adjustment

Adjusted

Results��

(Non-GAAP)

Net interest income (expense)�

$�� 326,421

$�� (20,663)

$�� 347,084

Provision

for

loan

losses

�

non-covered

loans

68,166

11,950

56,216

Provision

for

loan

losses

�

covered

loans �

12,463

Net interest income (expense) after provision for loan losses

245,792

(32,613)

278,405

FDIC loss share expense

(4,864)

15,046

(19,910)

Other non-interest income

129,194

Restructuring costs

8,290

Other operating expenses

302,350

Income (loss) from continuing operations before income tax

59,482

(40,903)

15,046

85,339

Income tax expense

26,667

20,048

3,009

3,610

Income (loss) from continuing operations

$�� 32,815

$�� (40,903)

$�� (20,048)

$�� 12,037

$�� 81,729

Basic and diluted EPS from continuing operations

0.31

$��

Net interest margin

4.64%

�

Tangible common book value per common share

36.24

$��

Market value per common share

29.44

$��

Q3 2014 *

Business Segments (GAAP)*

___________________

Unaudited

�

Excludes discontinued operations.

�

Non-fully taxable equivalent.

($ in millions)

Financial Results

Q4 14

Q3 14

Variance

Q4 14

Q3 14

Variance

Net interest income

311

$��

316

$��

(5)

$��

Non-interest income

��

(11)

��

Gross revenues

396

��

412

��

(16)

��

Provision for loan losses � non-covered loans

��

(10)

��

(1)

��

(7)

��

Provision for loan losses � covered loans

(4)

��

(16)

��

Total provision for loan losses

��

(26)

��

(1)

��

(7)

��

Operating expenses

241

��

245

��

(4)

��

Income tax� expense

��

(4)

��

Income (loss) from continuing operations

$��

(15)

$��

(12)

$��

(3)

$��

Income from discontinued operations, net of tax

$��

(21)

$��

Net income (loss)

$��

(6)

$��

(24)

$��

($ in millions)

Balance Sheet Highlights

Q4 14

Q3 14

Variance

Q4 14

Q3 14

Variance

Total assets

27,351

$��

26,765

$��

586

$��

5,503

$��

7,133

$��

(1,630)

$��

Total loans �

18,564

��

18,567

��

(3)

��

3,488

��

3,624

��

(136)

��

Total deposits �

21,426

��

20,986

��

440

��

3,459

��

3,551

��

(92)

��

($ in millions)

Asset Quality (including covered assets)

Q4 14

Q3 14

Variance

Q4 14

Q3 14

Variance

Non-performing loans held-in-portfolio

624

$��

607

$��

(11)

$��

Non-performing assets

874

��

871

��

(18)

��

Allowance for loan losses

571

��

579

��

(8)

��

(1)

��

Net interest margin �

5.15%

5.25%

-0.10%

2.40%

1.82%

0.58%

Consolidated Credit Summary (Excluding Covered Loans)

________________________________

Excluding provision for loan losses and net write-downs related to the classified and legacy assets sale

Numbers may not add to total due to rounding.

$ in millions

Q4 14

Q3 14

Q2 14

Q1 14

Q4 13

Loans Held in Portfolio (HIP)

$19,404

$19,359

$19,635

$21,612

Performing HFS

158

109

NPL HFS

Total Non Covered Loans

19,511

19,537

19,732

21,707

21,722

Non-performing loans (NPLs)

$625

$622

$640

$635

$598

Commercial

$259

$252

$278

$307

$279

Construction

$14

$19

$22

$24

Legacy

$12

$15

Mortgage

$300

$295

$286

$252

$233

Consumer

$47

$43

$39

$44

Leases

NPLs HIP to loans HIP

3.22%

3.21%

3.26%

2.94%

2.77%

Net charge-offs (NCOs)

$50

$40

$46

$43

$35

Commercial

$13

$10

$11

$15

Construction

($0)

($1)

($2)

Legacy

($4)

($1)

($5)

Mortgage

$12

$13

$10

Consumer

$28

$27

$26

$28

$18

Leases

Write-downs

$32

$20

NCOs to average loans HIP

1.04%

0.83%

0.94%

0.80%

0.66%

Provision for loan losses (PLL)

$50

$56

$50

$47

$48

PLL to average loans HIP

1.02%

1.16%

1.02%

0.88%

0.89%

PLL to NCOs

0.99x

1.39x

1.08x

1.10x

1.35x

Allowance for loan losses (ALL)

$520

$522

$526

$543

$538

ALL to loans HIP

2.68%

2.69%

2.68%

2.51%

2.49%

ALL to NPLs HIP

83.11%

83.88%

82.26%

85.40%

90.05%

$19,404

$15,938

BPPR Commercial & Construction� Distribution

Loan Composition (Held-in Portfolio)

De-risked Loan Portfolios

�

The Corporation has derisked its loan portfolios by

reducing its exposure in asset classes with

historically high loss content

�

In the BPPR commercial portfolio reductions

include:

Commercial portfolio, including construction,

has decreased from 55% of total loans held-

in-portfolio to 41%

Construction portfolio is down by 87% since

Q4 2007

SME

lending is down by 55% from Q4 2007

�

Collateralized exposure now represents a larger

portion of consumer loan portfolio

�

Unsecured loans credit quality has improved as

overall FICO scores have increased

________________________________

Small and Medium Enterprise

NCOs

distribution

represents

the

percentage

allocation

NCOs

from

2008

through

2014

per

each

loan

category.

Numbers may not add to total due to rounding.

NCOs

($mm)

(%)

($mm)

(%)

($mm)

(%)

Distribution

(2)

CRE SME �

$2,938

33%

$1,519

23%

($1,419)

-48%

24%

C&I SME �

2,287

25%

809

12%

(1,478)

��

-65%

29%

C&I Corp

1,592

18%

1,946

30%

354

��

22%

Construction

1,231

14%

159

(1,072)

��

-87%

37%

CRE Corp

892

10%

1,967

30%

1,075

��

121%

Multifamily

134

��

109%

Total

$9,004

$6,534

($2,470)

-27%

100%

Q4 2007

Q4 2014

Variance

5,451

6,503

252

$ in millions

Q4 2007

Q4 2014

Q4 2007

Q4 2014

Q4 2007

Q4 2014

Variance

Commercial

$7,774

$6,375

$4,515

$1,759

$12,288

$8,134

($4,154)

Consumer

3,552

3,389

1,698

481

5,249

3,870

Mortgage

2,933

3,139

1,052

6,071

Construction

1,231

159

237

1,468

Leases

814

564

814

564

Legacy

2,130

Total

$16,304

$11,718

$3,466

$28,021

Puerto Rico

Total

432

(1,379)

(1,216)

(250)

(2,049)

($8,617)

Legacy portfolio is comprised of certain commercial, construction and lease financings lending products exited by the US.

Popular, Inc. Credit Ratings

�

Our senior unsecured ratings have remained stable:

Moody�s:

Negative

Fitch:

BB-

Stable Outlook

S&P:

B+

Stable Outlook

�

May 2014: Moody�s downgraded BPOP to B2; outlook negative

�

February 2014: Moody�s placed BPOP on review for downgrade

�

October 2013: Moody�s revised outlook to negative

�

January 2013: Fitch raised to BB-

from B+; outlook stable

�

December 2012: Moody�s downgraded BPOP to B1; outlook stable

�

April

2012:

Moody�s

placing

most

the

banks

under

review

with

the

possibility

downgrades, due to the state of the Puerto Rico economy

�

January 2012:� Fitch raised BPOP�s outlook to positive

�

December 2011: S&P raised its ratings on BPPR to BB from BB-

and changed outlook to stable

given revised bank criteria to regional banks

Investor Presentation

Fourth Quarter 2014

StreetInsider

Log in to your account:

Form 8-K POPULAR INC For: Jan 22

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