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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)

COMMONWEALTH OF PUERTO

�

�

RICO

001-34084

66-0667416

� � �

(State or other jurisdiction

of incorporation)

(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 or former address, 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:4

� 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�2.02. Results of Operations and Financial Condition.

On January 22, 2015 Popular, Inc. issued a news release announcing its unaudited financial results for the quarter ended December 31, 2014, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K. The information furnished pursuant to this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any of the Corporations filings under the Securities Act of 1933, as amended, unless otherwise expressly stated in such filing.

Item�9.01. Financial Statements and Exhibits

99.1 Press release dated January 22, 2015


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

Exhibit 99.1

Popular, Inc. Announces Fourth Quarter Financial Results

SAN JUAN, Puerto Rico--(BUSINESS WIRE)--January 22, 2015--Popular, Inc. (the Corporation or Popular) (NASDAQ: BPOP) reported net income of $52.9 million for the quarter. Net income for continued operations of $43.8 million and adjusted net income of $80.8 million for the quarter ended December 31, 2014, compared to net income from continuing operations of $32.8 million and adjusted net income of $81.7 million for the quarter ended September 30, 2014.

Mr. Richard L. Carri�n, Chairman of the Board and Chief Executive Officer, said, "While there were a number of significant transactions that impacted these results, we are satisfied that our top line remains strong and our credit metrics continue to head in the right direction in spite of the challenging economic conditions in our principal market. The sale of our California operations in the period caps a transformational year for the Corporation which included the restructuring of our US operations and the repayment of our TARP funds without issuing additional equity. We continue to focus on improving our operational and financial metrics and are well positioned for an eventual improvement in the Puerto Rico economy."


Earnings Highlights
� � � � �
(Unaudited) � Quarters ended Years ended
(Dollars in thousands, except per share information) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13 31-Dec-14 � 31-Dec-13
Net interest income $ 326,861 $ 326,421 $ 354,507 $ 945,072 $ 1,344,574
Provision for loan losses  non-covered loans 51,637 68,166 49,927 223,999 536,710
Provision (reversal of provision) for loan losses  covered loans [1] � � (3,646 ) � � 12,463 � � � 8,907 � � 46,135 � � � 69,396 �
Net interest income after provision for loan losses 278,870 245,792 295,673 674,938 738,468
FDIC loss share expense (18,693 ) (4,864 ) (37,164 ) (103,024 ) (82,051 )
Other non-interest income 128,588 129,194 222,440 496,070 873,064
Operating expenses � � 330,006 � � � 310,640 � � � 304,609 � � 1,193,684 � � � 1,221,990 �
Income (loss) from continuing operations before income tax 58,759 59,482 176,340 (125,700 ) 307,491
Income tax expense (benefit) � � 14,995 � � � 26,667 � � � 25,162 � � 60,802 � � � (251,327 )
Income (loss) from continuing operations � $ 43,764 � � $ 32,815 � � $ 151,178 � $ (186,502 ) � $ 558,818 �
Income (loss) from discontinued operations, net of tax � $ 9,086 � � $ 29,758 � � $ 11,853 � $ (122,980 ) � $ 40,509 �
Net income (loss) � $ 52,850 � � $ 62,573 � � $ 163,031 � $ (309,482 ) � $ 599,327 �
Net income (loss) applicable to common stock � $ 51,919 � � $ 61,643 � � $ 162,100 � $ (313,205 ) � $ 595,604 �
Net income (loss) per common share from continuing operations - Basic � $ 0.41 � � $ 0.31 � � $ 1.46 � $ (1.85 ) � $ 5.41 �
Net income (loss) per common share from continuing operations - Diluted � $ 0.41 � � $ 0.31 � � $ 1.46 � $ (1.85 ) � $ 5.39 �
Net income (loss) per common share from discontinued operations - Basic � $ 0.09 � � $ 0.29 � � $ 0.12 � $ (1.20 ) � $ 0.39 �
Net income (loss) per common share from discontinued operations - Diluted � $ 0.09 � � $ 0.29 � � $ 0.11 � $ (1.20 ) � $ 0.39 �
�
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.
�

Significant events

The Corporation continues its strategy of relocating certain back office operations of BPNA to Puerto Rico and New York. The Corporation incurred $13.9 million in restructuring charges during the fourth quarter of 2014 and a total of $26.7 million during the year ended December 31, 2014. Additional restructuring charges amounting to approximately $22.0 million are expected to be incurred in the year 2015, comprised of $13.0 million in personnel related costs and $9.0 million in lease cancelations and other restructuring costs.

During the third quarter of 2014, the Corporation refinanced approximately $638 million in long term structured repos in the U.S. with a yield of 4.41% and replaced them with lower cost short term repos of a similar amount. As previously disclosed, the fees associated with the refinancing of these repos were $39.7 million, of which $20.7 million were recorded as interest expense during the third quarter of 2014, and approximately $19.0 million were recorded during the fourth quarter of 2014.

The decision to sell three of its U.S. regional operations resulted in the discontinuance of each of these respective operations. As required by US GAAP, current and prior periods presented in the consolidated statement of operations as well as financial information covering income and expense amounts presented in this earnings release has been retrospectively adjusted for the impact of the discontinued operations for comparative purposes. The consolidated statement of financial condition and related financial information for prior periods included in this earnings release do not reflect the reclassification of BPNAs assets and liabilities to discontinued operations. Refer to Table P for a detail of the net loss, assets and liabilities from the discontinued operations. Also, refer to Table Q for details of the restructuring charges incurred during the quarter ended December 31, 2014.


� � � �
� � Quarter ended
(Unaudited) 31-Dec-14
(In thousands) �

Actual Results (US GAAP)

� BPNA Reorganization [2] � Other Adjustments � Adjusted Results (Non-GAAP)
Net interest income $ 326,861 $ (18,591 ) $ - $ 345,452
Provision for loan losses  non-covered loans 51,637 878 - 50,759
Provision (reversal of provision) for loan losses  covered loans [1] � � (3,646 ) � � - � � � - � � � (3,646 )
Net interest income (expense) after provision for loan losses 278,870 (19,469 ) - 298,339
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale 10,946 1,684 - 9,262
FDIC loss share expense (18,693 ) - - (18,693 )
Other non-interest income 117,642 - - 117,642
Personnel costs 110,736 -

�

2,974[3]

107,762
Net occupancy expenses 23,877

�

1,895[4]

21,982
Loss on early extinguishment of debt 532 532 - -
Restructuring costs 13,861 13,861 - -
Other operating expenses � � 181,000 � � � - � � � - � � � 181,000 �
Income (loss) from continuing operations before income tax 58,759 (32,178 ) (4,869 ) 95,806
Income tax expense � � 14,995 � � � - � � � - � � � 14,995 �
Income (loss) from continuing operations � $ 43,764 � � $ (32,178 ) � $ (4,869 ) � $ 80,811 �
�
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.
[2] Includes loss on the refinancing of structured repos for $18.6 million recorded as interest expense, impact on provision for loan losses related to NPL sales of $878 thousand, gain on bulk sales of NPLs of $1.7 million and restructuring cost of $13.9 million.
[3] Represents the impact of the compensation package granted upon separation of an officer of the Corporation equal to approximately $3.0 million.
[4] Represents the net loss on the early cancellation of a lease at BPNA of $1.9 million.
�

� � � � �
� � Quarter ended
(Unaudited) 30-Sep-14
(In thousands) � Actual Results (US GAAP) � BPNA Reorganization [2] � Income Tax Adjustments [3] � Indemnification Asset Adjustment [4] � Adjusted Results (Non-GAAP)
Net interest (expense) income $ 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 [1] � � 12,463 � � � - � � � - � � � - � � 12,463 �
Net interest (expense) income after provision for loan losses 245,792 (32,613 ) - - 278,405
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale 15,593 - - - 15,593
FDIC loss share expense (4,864 ) - - 15,046 (19,910 )
Other non-interest income 113,601 - - - 113,601
Personnel costs 104,542 - 104,542
Net occupancy expenses 21,203 - 21,203
Loss on early extinguishment of debt - - - - -
Restructuring costs 8,290 8,290 - - -
Other operating expenses � � 176,605 � � � - � � � - � � � - � � 176,605 �
Income (loss) from continuing operations before income tax 59,482 (40,903 ) - 15,046 85,339
Income tax (benefit) expense � � 26,667 � � � - � � � 20,048 � � � 3,009 � � 3,610 �
Income (loss) from continuing operations � $ 32,815 � � $ (40,903 ) � $ (20,048 ) � $ 12,037 � $ 81,729 �
�
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.
[2] Includes losses on bulk sales and reclassifications to loans held-for-sale of classified and legacy loans for an aggregated net loss $12.0 million, loss on the refinancing of structured repos for $20.7 million recorded as interest expense and restructuring cost of $8.3 million.
[3] On July 1, 2014, the Government of Puerto Rico approved an amendment to the Internal Revenue Code, which, among other things, changed the income tax rate for capital gains from 15% to 20%. As a result, the Corporation recognized an income tax expense of $20.0 million, mainly related to the deferred tax liability associated with the portfolio acquired from Westernbank.
[4] The FDIC indemnity asset amortization included a positive adjustment of $15.0 million to reverse the impact of accelerated amortization expense recorded in prior periods.
�

�
� � Quarters ended
(Unaudited) Adjusted Results Non-GAAP �
(In thousands) � 31-Dec-14 � 30-Sep-14 � Variance
Net interest income $ 345,452 � $ 347,084 $ (1,632 )
Provision for loan losses  non-covered loans 50,759 56,216 (5,457 )
Provision (reversal of provision) for loan losses  covered loans [1] � � (3,646 ) � � 12,463 � � � (16,109 )
Net interest income after provision for loan losses 298,339 278,405 19,934
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale 9,262 15,593 (6,331 )
FDIC loss share expense (18,693 ) (19,910 ) 1,217
Other non-interest income 117,642 113,601 4,041
Personnel costs 107,762 104,542 3,220
Net occupancy expenses 21,982 21,203 779
Loss on early extinguishment of debt - - -
Restructuring costs - - -
Other operating expenses � � 181,000 � � � 176,605 � � � 4,395 �
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 )
�
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.
�

Net interest income

For the quarter ended December 31, 2014, the Corporation had a net interest income of $326.9 million. Excluding the impact of the $18.6 million expense related to the refinancing of structured repos, the adjusted net interest income was $345.5 million compared to an adjusted net interest income of $347.1 million for the previous quarter. Net interest margin was 4.45% for the fourth quarter of 2014. The adjusted net interest margin was 4.70%, compared to an adjusted net interest margin of 4.64% for the third quarter of 2014. While net interest income decreased $1.6 million, the net interest margin reflects an increase of six basis points. The increase in net interest margin is mainly related to:

These positive variances in net interest margin were offset in part by:

BPPRs net interest margin was 5.15%, a decrease of ten basis points from the previous quarter. Net interest income amounted to $311.2 million for the quarter ended December 31, 2014, compared with $315.7 million for the previous quarter. The decrease in the net interest income was mainly due to the above mentioned decrease in interest income from covered loans and lower interest income from investment securities, partially offset by higher income from commercial loans.

BPNA earned $31.2 million in net interest income for the quarter ended December 31, 2014. Excluding the impact of the structured repos refinancing, the net interest income was $49.8 million, compared with an adjusted net interest income of $47.1 million in the previous quarter. The net interest margin was 2.40% for the quarter. The adjusted net interest margin, excluding the impact of the structured repos refinancing, for the quarter was 3.82%, compared to an adjusted net interest margin of 3.23% in the previous quarter. The increase in net interest income was mostly the result of a lower cost of borrowings due to the refinancing of structured repos, discussed above, partially offset by lower income from investment securities.


Non-interest income

Non-interest income was $109.9 million for the fourth quarter of 2014, a decrease of $14.4 million when compared with the third quarter. Excluding the $1.7 million impact of the gain on bulk sales of NPLs during the fourth quarter as part of the BPNA reorganization, and the effect of the FDIC indemnity asset amortization adjustment of $15.0 million during the third quarter, non-interest income decreased by $1.1 million when compared to the third quarter of 2014, driven primarily by the following:

These negative variances were partially offset by:

Refer to Table B for further details.

Financial Impact of FDIC-Assisted Transaction
� � � � �
(Unaudited) � Quarters ended Years ended
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13 31-Dec-14 � 31-Dec-13
�

Income Statement

Interest income on covered loans $ 61,285 $ 68,251 $ 86,794 $ 293,609 $ 300,745
Total FDIC loss share expense (18,693 ) (4,864 ) (37,164 ) (103,024 ) (82,051 )
Other non-interest income - - - - 593
Provision for loan losses � � (3,646 ) � � 12,463 � � � 8,907 � � 46,135 � � � 69,396 �
Total revenues less provision for loan losses � $ 46,238 � � $ 50,924 � � $ 40,723 � $ 144,450 � � $ 149,891 �
�

Balance Sheet

Loans covered under loss-sharing agreements with FDIC $ 2,542,662 $ 2,654,263 $ 2,984,427
FDIC loss share asset 542,454 681,106 948,608
FDIC true-up payment obligation � � 129,304 � � � 126,473 � � � 127,513 �
�

See additional details on accounting for FDIC-Assisted transaction in Table O.

Operating expenses

Operating expenses increased by $19.4 million when compared with the third quarter. Excluding the impact of the significant events detailed in the Adjusted Results (Non-GAAP) tables above, operating expenses increased by $8.4 million compared to the third quarter of 2014, driven primarily by:

These increases were partially offset by:

Non-personnel credit-related costs, which include collections, appraisals, credit related fees, and OREO expenses, amounted to $27.2 million for the fourth quarter of 2014, compared with $25.8 million for the third quarter of 2014. The increase was principally due to higher collections expenses at BPPR.

Full-time equivalent employees (FTEs), including discontinued operations, were 7,752 as of December 31, 2014, compared with 7,848 as of September 30, 2014, and 8,059 as of December 31, 2013.

For a breakdown of operating expenses by category refer to table B.

Income taxes

Income tax expense amounted to $15.0 million for the fourth quarter of 2014, compared to $26.7 million, or $3.6 million on an adjusted basis, for the previous quarter. The effective income tax rate for the fourth quarter of 2014, on an adjusted basis, was 16%. Refer to earnings highlights section above for a description of adjusted results.

On July 1, 2014, the Government of Puerto Rico approved an amendment to the Internal Revenue Code, which, among other things, changed the income tax rate for capital gains from 15% to 20%. As a result, the Corporation recognized an income tax expense of approximately $20.0 million during the third quarter of 2014, mainly related to the deferred tax liability associated with the portfolio acquired from Westernbank.

During the third quarter of 2014, the Corporation recorded a favorable adjustment of approximately $6.1 million in connection with filing its tax returns for the year 2013. Also, the Corporation reversed approximately $3.6 million of reserves for uncertain tax positions due to the expiration of the statute of limitations in the Puerto Rico operations. Excluding these adjustments, the adjusted income tax expense would have been $13.3 million, for an effective tax rate of approximately 16% on the adjusted pre-tax income.


Credit Quality

The following table presents non-performing assets information:

Non-Performing Assets
� � �
(Unaudited)
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13
Total non-performing loans held-in-portfolio, excluding covered loans $ 625,338 $ 621,945 $ 597,948
Non-performing loans held-for-sale 18,899 19,728 1,092
Other real estate owned (OREO), excluding covered OREO � � 135,500 � � � 135,256 � � � 135,501 �
Total non-performing assets, excluding covered assets 779,737 776,929 734,541
Covered loans and OREO � �

148,099

� � � 166,533 � � � 197,388 �
Total non-performing assets � $

927,836

� � $ 943,462 � � $ 931,929 �
Net charge-offs for the quarter (excluding covered loans) � $ 50,187 � � $ 40,469 � � $ 35,366 �
�
�
Ratios (excluding covered loans):
Non-covered loans held-in-portfolio (1) $ 19,404,451 $ 19,359,216 $ 21,611,866
Non-performing loans held-in-portfolio to loans held-in-portfolio (1) 3.22 % 3.21 % 2.77 %
Allowance for loan losses to loans held-in-portfolio 2.68 2.69 2.49
Allowance for loan losses to non-performing loans, excluding loans held-for-sale � � 83.11 � � � 83.88 � � � 90.05 �
[1] During the quarter ended June 30, 2014 approximately $1.8 billion in loans held-in-portfolio were reclassified to the discontinued operations, of which $48 thousand were in non-performing status as of September 30, 2014.
�
Refer to Table H for additional information.
� � � � �
Provision for Loan Losses
�
(Unaudited) � Quarters ended Years ended
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13 31-Dec-14 � 31-Dec-13
Provision (reversal) for loan losses - non-covered loans:
BPPR $ 52,206 $ 61,868 $ 62,658 $ 242,849 $ 547,886
BPNA � � (569 ) � � 6,298 � � (12,731 ) � (18,850 ) � � (11,176 )
Total provision for loan losses - non-covered loans � � 51,637 � � � 68,166 � � 49,927 � � 223,999 � � � 536,710 �
Provision for loan losses - covered loans � � (3,646 ) � � 12,463 � � 8,907 � � 46,135 � � � 69,396 �
Total provision for loan losses � $ 47,991 � � $ 80,629 � $ 58,834 � $ 270,134 � � $ 606,106 �
�

Credit Quality

The Corporations credit quality trends during the fourth quarter of 2014 were stable with the US regions exhibiting continued improvements and the Puerto Rico region remaining in line with the prior quarter. The BPNA segment continued to reflect strong performance led by the improved risk profile of its loan portfolios, further strengthened by the sale of certain non-performing and legacy assets. Notwithstanding, Puerto Ricos fiscal and economic conditions continue to present a challenging operating environment.

The following presents credit quality performance for the fourth quarter of 2014 for the Corporations non-covered portfolios:


� � �
Credit Quality by Segment
�
(Unaudited)
(In thousands) � Quarters ended
BPPR � 31-Dec-14 � 30-Sep-14 � 31-Dec-13
Provision for loan losses $ 52,206 $ 61,868 $ 62,658
Net charge-offs 52,523 38,682

�

35,256

Total non-performing loans held-in-portfolio, excluding covered loans 606,238 592,229 447,255
Allowance / non-covered loans held-in-portfolio � � 3.07 % � � 3.09 % � � 2.69 %
�
� � Quarters ended
BPNA � 31-Dec-14 � 30-Sep-14 � 31-Dec-13
Provision for loan losses (reversal of provision) - Continuing operations $ (569 ) $ 6,298 $ (12,731 )
Provision for loan losses (reversal of provision) - Discontinued operations - - (2,198 )
Net charge-offs (recoveries) - Continuing operations (2,336 ) 1,787 (603 )
Net charge-offs (recoveries) - Discontinued operations - - 713
Total non-performing loans held-in-portfolio 19,100 29,716 150,693
Allowance / non-covered loans held-in-portfolio � � 0.88 % � � 0.91 % � � 1.95 %
�

BPPR Segment

BPNA Segment


� � �
Financial Condition Highlights
�
(Unaudited)
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13
Money market, trading and investment securities $ 7,475,232 $ 7,200,291 $ 6,815,244
Loans not covered under loss sharing agreements with the FDIC 19,404,451 19,359,216 21,611,866
Loans covered under loss sharing agreements with the FDIC 2,542,662 2,654,263 2,984,427
Assets from discontinued operations - 1,129,053 -
Total assets 33,094,172 34,099,095 35,749,333
Deposits 24,807,535 24,466,105 26,711,145
Borrowings 3,004,685 3,375,485 3,645,246
Liabilities from discontinued operations 5,064 1,106,762 -
Total liabilities 28,822,782 29,800,703 31,123,183
Stockholders equity � � 4,271,390 � � 4,298,392 � � 4,626,150
�

Total assets decreased by $1.0 billion from the third quarter of 2014, driven by:

These decreases were partially offset by:

Total liabilities decreased by $1.0 billion from the third quarter of 2014, driven by:

These decreases were partially offset by:


Stockholders equity decreased by $27.0 million from the third quarter of 2014, mainly as a result of an increase of $79.8 million in accumulated other comprehensive loss, which was partially offset by net income for the quarter of $52.9 million. The other comprehensive loss includes an increase of approximately $103.0 million in the adjustment of pension and post retirement plans, net of tax, which was partially offset by an increase in unrealized gains from securities available for sale of $25.3 million. Refer to Table A for capital ratios.

The following table presents the preliminary regulatory capital ratios based on the current Basel I regulatory capital framework and under the Basel III Transitional Capital Rules for non-advanced approach banking organizations in effect as of January 1, 2015.

Ratios as of December 31, 2014 � Basel I � Basel III � Variance

Tier 1 risk-based capital

�

18.17

% �

16.90

% �

(1.27)

%
Total risk-based capital

19.45

%

19.58

%

0.13

%
Tier 1 leverage

11.96

%

11.78

% (0.18) %
Common equity tier 1 ratio �

15.92

% �

16.51

% �

0.59

%
�

The reduction of 127 basis points in Tier 1 risk-based capital under Basel III relates mainly to the impact of the phase-out provisions of the New Capital Rules on the Corporations $427 million in trust preferred securities. Under Basel III, only 25% of the outstanding balance of these securities is allowed as Tier 1, with the remaining balance included in Total risk-based capital.

Refer to Table C for the Statements of Financial Condition.


Forward-Looking Statements

The information included in this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on managements current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in forward-looking statements. Factors that might 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 and the impact of proposed capital standards on our capital ratios; (v) the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our businesses, business practices and cost of operations; (vi) regulatory approvals that may be necessary to undertake certain actions or consummate strategic transactions such as acquisitions and dispositions; (vii) 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; (viii) the performance of the stock and bond markets; (ix) competition in the financial services industry; (x) additional Federal Deposit Insurance Corporation assessments; and (xi) possible legislative, tax or regulatory changes. For a discussion of such factors and certain risks and uncertainties to which the Corporation is subject, see the Corporations Annual Report on Form 10-K for the year ended December 31, 2013, as well as its filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, the Corporation assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

Founded in 1893, Popular, Inc. is the leading banking institution by both assets and deposits in Puerto Rico and ranks among the top 50 U.S. banks by assets. In the United States, Popular has established a community-banking franchise providing a broad range of financial services and products with branches in New York, New Jersey and Florida.

An electronic version of this press release can be found at the Corporations website: www.popular.com.

Popular will hold a conference call to discuss the financial results today Thursday, January 22, 2015, at 10:00 a.m. Eastern Standard Time. The call will be broadcast live over the Internet and can be accessed through the investor relations section of the Corporations website: www.popular.com.

Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through a dial-in telephone number 1-866-235-1201 or 1-412-902-4127.

A replay of the webcast will be archived in Populars website. A telephone replay will be available one hour after the end of the conference call through Friday, January 30, 2015. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10058189.


Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
�
Table A - Selected Ratios and Other Information
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Table B - Consolidated Statement of Operations
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Table C - Consolidated Statement of Financial Condition
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Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER
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Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE
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Table F - Mortgage Banking Activities and Other Service Fees
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Table G - Loans and Deposits
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Table H - Non-Performing Assets
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Table I - Activity in Non-Performing Loans
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Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios
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Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED
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Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS
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Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS
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Table N - Reconciliation to GAAP Financial Measures
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Table O - Financial Information - Westernbank Covered Loans
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Table P - Financial Information from Discontinued Operations
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Table Q - Restructuring Charges
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Table R - Adjusted Consolidated Statement of Operations for the Year Ended December 31, 2014 (Non-GAAP)

� � � � �
POPULAR, INC.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table A - Selected Ratios and Other Information
(Unaudited)
�
� � � � � � � � � � � � � � � � � � � � �
Quarters ended Years ended
� � 31-Dec-14 � 30-Sep-14 � 31-Dec-13 � 31-Dec-14 � 31-Dec-13
Basic EPS from continuing operations $ 0.41 $ 0.31 $ 1.46 $ (1.85 ) $ 5.41
Basic EPS from discontinued operations $ 0.09 $ 0.29 $ 0.12 $ (1.20 ) $ 0.39
Total Basic EPS $ 0.50 $ 0.60 $ 1.58 $ (3.05 ) $ 5.80
Diluted EPS from continuing operations $ 0.41 $ 0.31 $ 1.46 $ (1.85 ) $ 5.39
Diluted EPS from discontinued operations $ 0.09 $ 0.29 $ 0.11 $ (1.20 ) $ 0.39
Total Diluted EPS $ 0.50 $ 0.60 $ 1.57 $ (3.05 ) $ 5.78
Average common shares outstanding 102,859,416 102,953,328 102,774,144 102,848,792 102,693,685

Average common shares outstanding - assuming dilution

103,166,349

103,152,916 103,081,417 102,848,792 103,061,475
Common shares outstanding at end of period 103,476,847 103,448,206 103,397,699 103,476,847 103,397,699
Market value per common share $ 34.05 $ 29.44 $ 28.73 $ 34.05 $ 28.73
Market capitalization - (In millions) $ 3,523 $ 3,046 $ 2,971 $ 3,523 $ 2,971
Return on average assets 0.63 % 0.71 % 1.79 % (0.88 )% 1.65 %
Return on average common equity 4.78 % 5.75 % 14.59 % (6.95 )% 14.43 %
Net interest margin [2] 4.70 % 4.64 % 4.75 % 4.67 % 4.52 %
Common equity per share $ 40.79 $ 41.07 $ 44.26 $ 40.79 $ 44.26
Tangible common book value per common share (non-GAAP) [1] $ 35.93 $ 36.24 $ 37.56 $ 35.93 $ 37.56
Tangible common equity to tangible assets (non-GAAP) [1] 11.41 % 11.16 % 11.08 % 11.41 % 11.08 %
Tier 1 risk-based capital [3]

18.17

% 16.86 % 19.15 %

18.17

% 19.15 %
Total risk-based capital [3]

19.45

% 18.14 % 20.42 %

19.45

% 20.42 %
Tier 1 leverage [3] 11.96 % 11.14 % 12.85 % 11.96 % 12.85 %
Tier 1 common equity to risk-weighted assets (non-GAAP) [1] [3] � �

15.92

% � � 14.74 % � � 14.83 % � �

15.92

% � � 14.83 %
�
[1] Refer to Table N for Non-GAAP reconciliations.
[2] Not on a taxable equivalent basis. For the quarter ended December 31, 2014 and September 30, 2014, excludes the impact of $18.6 million and $20.7 million fees, respectively, related to repos refinancing. US GAAP Net interest margin was 4.45% for the fourth quarter, compared to 4.36% for the previous quarter. For the year ended December 31, 2014, excludes the impact of $39.2 million and $414.1 million, respectively, related to repos refinancing and the accelerated amortization of the TARP discount. The US GAAP Net interest margin was 3.16% for the year ended December 31, 2014. Refer to Tables D & E for reconciliation.
[3] Capital ratios for the current quarter are preliminary.
�

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POPULAR, INC.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table B - Consolidated Statement of Operations
(Unaudited)
�
Quarters ended Variance Quarter ended Variance Years ended
(In thousands, except per share information) � 31-Dec-14 � 30-Sep-14 �

Q4 2014 vs. Q3 2014

� 31-Dec-13 �

Q4 2014 vs. Q4 2013

� 31-Dec-14 � 31-Dec-13
Interest income:
Loans $ 357,570 $ 362,592 $ (5,022 ) $ 384,015 $ (26,445 ) $ 1,478,750 $ 1,481,096
Money market investments 1,113 1,007 106 832 281 4,224 3,464
Investment securities 30,361 33,154 (2,793 ) 34,317 (3,956 ) 132,631 141,807
Trading account securities � � 2,891 � � � 4,446 � � � (1,555 ) � � 5,361 � � � (2,470 ) � � 17,938 � � � 21,573 �
Total interest income � � 391,935 � � � 401,199 � � � (9,264 ) � � 424,525 � � � (32,590 ) � � 1,633,543 � � � 1,647,940 �
Interest expense:
Deposits 25,473 26,533 (1,060 ) 28,681 (3,208 ) 105,087 124,857
Short-term borrowings 20,489 28,955 (8,466 ) 9,319 11,170 67,376 38,430
Long-term debt � � 19,112 � � � 19,290 � � � (178 ) � � 32,018 � � � (12,906 ) � � 516,008 � � � 140,079 �
Total interest expense � � 65,074 � � � 74,778 � � � (9,704 ) � � 70,018 � � � (4,944 ) � � 688,471 � � � 303,366 �
Net interest income (expense) 326,861 326,421 440 354,507 (27,646 ) 945,072 1,344,574
Provision for loan losses - non-covered loans 51,637 68,166 (16,529 ) 49,927 1,710 223,999 536,710
Provision (recovery of provision) for loan losses - covered loans � � (3,646 ) � � 12,463 � � � (16,109 ) � � 8,907 � � � (12,553 ) � � 46,135 � � � 69,396 �
Net interest income (expense) after provision for loan losses � � 278,870 � � � 245,792 � � � 33,078 � � � 295,673 � � � (16,803 ) � � 674,938 � � � 738,468 �
Service charges on deposit accounts 39,456 40,585 (1,129 ) 39,814 (358 ) 158,637 162,870
Other service fees 61,140 54,839 6,301 60,087 1,053 225,265 229,351
Mortgage banking activities 8,747 14,402 (5,655 ) 14,387 (5,640 ) 30,615 71,657
Net (loss) gain and valuation adjustments on investment securities 893 (1,763 ) 2,656 2,110 (1,217 ) (870 ) 7,966
Trading account profit (loss) 586 740 (154 ) (1,547 ) 2,133 4,358 (13,483 )
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale 10,946 15,593 (4,647 ) 3,346 7,600 40,591 (52,708 )
Adjustments (expense) to indemnity reserves on loans sold (6,817 ) (9,480 ) 2,663 (6,892 ) 75 (34,098 ) (37,054 )
FDIC loss share (expense) income (18,693 ) (4,864 ) (13,829 ) (37,164 ) 18,471 (103,024 ) (82,051 )
Other operating income � � 13,637 � � � 14,278 � � � (641 ) � � 111,135 � � � (97,498 ) � � 71,572 � � � 504,465 �
Total non-interest income � � 109,895 � � � 124,330 � � � (14,435 ) � � 185,276 � � � (75,381 ) � � 393,046 � � � 791,013 �
Operating expenses:
Personnel costs
Salaries 71,899 71,166 733 69,391 2,508 281,252 276,072
Commissions, incentives and other bonuses 18,439 14,738 3,701 13,523 4,916 59,138 57,060
Pension, postretirement and medical insurance 6,901 9,282 (2,381 ) 13,138 (6,237 ) 32,416 55,106
Other personnel costs, including payroll taxes � � 13,497 � � � 9,356 � � � 4,141 � � � 10,353 � � � 3,144 � � � 45,873 � � � 40,459 �
Total personnel costs 110,736 104,542 6,194 106,405 4,331 418,679 428,697
Net occupancy expenses 23,877 21,203 2,674 23,714 163 86,707 86,651
Equipment expenses 13,091 12,370 721 11,536 1,555 48,917 46,028
Other taxes 14,343 15,369 (1,026 ) 13,595 748 56,918 58,028
Professional fees 80,383 67,649 12,734 74,138 6,245 282,055 278,127
Communications 6,119 6,455 (336 ) 6,149 (30 ) 25,684 25,385
Business promotion 13,530 13,062 468 16,702 (3,172 ) 54,016 59,453
FDIC deposit insurance 9,338 9,511 (173 ) 14,672 (5,334 ) 40,307 56,728
Loss on early extinguishment of debt 532 - 532 - 532 532 3,388
Other real estate owned (OREO) expenses 20,016 19,745 271 9,502 10,514 49,611 79,658
Credit and debit card processing, volume, interchange and other expenses 5,093 5,659 (566 ) 5,284 (191 ) 21,588 19,901
Other operating expenses 17,004 24,759 (7,755 ) 20,910 (3,906 ) 73,785 71,975
Amortization of intangibles 2,083 2,026 57 2,002 81 8,160 7,971
Restructuring costs � � 13,861 � � � 8,290 � � � 5,571 � � � - � � � 13,861 � � � 26,725 � � � - �
Total operating expenses � � 330,006 � � � 310,640 � � � 19,366 � � � 304,609 � � � 25,397 � � � 1,193,684 � � � 1,221,990 �
Income (loss) from continuing operations before income tax 58,759 59,482 (723 ) 176,340 (117,581 ) (125,700 ) 307,491
Income tax expense (benefit) � � 14,995 � � � 26,667 � � � (11,672 ) � � 25,162 � � � (10,167 ) � � 60,802 � � � (251,327 )
Income (loss) from continuing operations 43,764 32,815 10,949 151,178 (107,414 ) (186,502 ) 558,818
Income (loss) from discontinued operations, net of tax � � 9,086 � � � 29,758 � � � (20,672 ) � � 11,853 � � � (2,767 ) � � (122,980 ) � � 40,509 �
Net income (loss) � $ 52,850 � � $ 62,573 � � $ (9,723 ) � $ 163,031 � � $ (110,181 ) � $ (309,482 ) � $ 599,327 �
Net income (loss) applicable to common stock � $ 51,919 � � $ 61,643 � � $ (9,724 ) � $ 162,100 � � $ (110,181 ) � $ (313,205 ) � $ 595,604 �
Net income (loss) per common share - basic:
Net income (loss) from continuing operations $ 0.41 $ 0.31 $ 0.10 $ 1.46 $ (1.05 ) $ (1.85 ) $ 5.41
Net income (loss) from discontinued operations � $ 0.09 � � $ 0.29 � � $ (0.20 ) � $ 0.12 � � $ (0.03 ) � $ (1.20 ) � $ 0.39 �
Net income (loss) per common share - basic � $ 0.50 � � $ 0.60 � � $ (0.10 ) � $ 1.58 � � $ (1.08 ) � $ (3.05 ) � $ 5.80 �
Net income (loss) per common share - diluted:
Net income (loss) from continuing operations $ 0.41 $ 0.31 $ 0.10 $ 1.46 $ (1.05 ) $ (1.85 ) $ 5.39
Net income (loss) from discontinued operations � $ 0.09 � � $ 0.29 � � $ (0.20 ) � $ 0.11 � � $ (0.02 ) � $ (1.20 ) � $ 0.39 �
Net income (loss) per common share - diluted � $ 0.50 � � $ 0.60 � � $ (0.10 ) � $ 1.57 � � $ (1.07 ) � $ (3.05 ) � $ 5.78 �
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Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table C - Consolidated Statement of Financial Condition
(Unaudited)
�
Variance
Q4 2014 vs.
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13 � Q3 2014
Assets:
Cash and due from banks $ 447,011 $ 321,914 $ 423,211 $ 125,097
Money market investments 1,756,470 1,053,121 858,453 703,349
Trading account securities, at fair value 138,527 145,343 339,743 (6,816 )
Investment securities available-for-sale, at fair value 5,315,159 5,727,766 5,294,800 (412,607 )
Investment securities held-to-maturity, at amortized cost 103,170 112,893 140,496 (9,723 )
Other investment securities, at lower of cost or realizable value 161,906 161,168 181,752 738
Loans held-for-sale, at lower of cost or fair value 106,104 178,008 110,426 (71,904 )
Loans held-in-portfolio:
Loans not covered under loss sharing agreements with the FDIC 19,498,286 19,450,677 21,704,010 47,609
Loans covered under loss sharing agreements with the FDIC 2,542,662 2,654,263 2,984,427 (111,601 )
Less: Unearned income 93,835 91,461 92,144 2,374
Allowance for loan losses � � 601,792 � � � 611,375 � � � 640,555 � � � (9,583 )
Total loans held-in-portfolio, net � � 21,345,321 � � � 21,402,104 � � � 23,955,738 � � � (56,783 )
FDIC loss share asset 542,454 681,106 948,608 (138,652 )
Premises and equipment, net 494,581 497,111 519,516 (2,530 )
Other real estate not covered under loss sharing agreements with the FDIC 135,500 135,256 135,501 244
Other real estate covered under loss sharing agreements with the FDIC 130,266 151,382 168,007 (21,116 )
Accrued income receivable 121,818 116,746 131,536 5,072
Mortgage servicing assets, at fair value 148,694 152,282 161,099 (3,588 )
Other assets 1,643,920 1,634,819 1,687,558 9,101
Goodwill 465,676 461,246 647,757 4,430
Other intangible assets 37,595 37,777 45,132 (182 )
Assets from discontinued operations � � - � � � 1,129,053 � � � - � � � (1,129,053 )
Total assets � $ 33,094,172 � � $ 34,099,095 � � $ 35,749,333 � � $ (1,004,923 )
Liabilities and Stockholders Equity:
Liabilities:
Deposits:
Non-interest bearing $ 5,783,748 $ 5,521,415 $ 5,922,682 $ 262,333
Interest bearing � � 19,023,787 � � � 18,944,690 � � � 20,788,463 � � � 79,097 �
Total deposits � � 24,807,535 � � � 24,466,105 � � � 26,711,145 � � � 341,430 �
Federal funds purchased and assets sold under agreements to repurchase 1,271,657 1,650,712 1,659,292 (379,055 )
Other short-term borrowings 21,200 1,200 401,200 20,000
Notes payable 1,711,828 1,723,573 1,584,754 (11,745 )
Other liabilities 1,005,498 852,351 766,792 153,147
Liabilities from discontinued operations � � 5,064 � � � 1,106,762 � � � - � � � (1,101,698 )
Total liabilities � � 28,822,782 � � � 29,800,703 � � � 31,123,183 � � � (977,921 )
Stockholders equity:
Preferred stock 50,160 50,160 50,160 -
Common stock 1,036 1,036 1,034 -
Surplus 4,196,458 4,171,890 4,170,152 24,568
Retained earnings 257,725 229,306 594,430 28,419
Treasury stock (4,117 ) (3,933 ) (881 ) (184 )
Accumulated other comprehensive loss � � (229,872 ) � � (150,067 ) � � (188,745 ) � � (79,805 )
Total stockholders equity � � 4,271,390 � � � 4,298,392 � � � 4,626,150 � � � (27,002 )
Total liabilities and stockholders equity � $ 33,094,172 � � $ 34,099,095 � � $ 35,749,333 � � $ (1,004,923 )
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Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER
(Unaudited)
�
Quarter ended Quarter ended Quarter ended Variance Variance
31-Dec-14 30-Sep-14 31-Dec-13 Q4 2014 vs. Q3 2014 Q4 2014 vs. Q4 2013
($ amounts in millions; yields not on a taxable equivalent basis) � Average balance � Income / Expense � Yield / Rate Average balance � Income / Expense � Yield / Rate Average balance � Income / Expense � Yield / Rate Average balance � Income / Expense � Yield / Rate Average balance � Income / Expense � Yield / Rate
Assets:
Interest earning assets:
Money market, trading and investment securities $ 7,220 � � $ 34.4 � 1.90 % $ 7,501 � � $ 38.6 � 2.06 % $ 7,038 � � $ 40.5 � 2.30 % � ($281 ) � � ($4.2 ) � (0.16 )% $ 182 � � � ($6.1 ) � (0.40 )%
Loans not covered under loss sharing agreements with the FDIC:
Commercial 8,219 101.9 4.92 8,239 99.6 4.80 8,356 100.7 4.78 (20 ) 2.3 0.12 (137 ) 1.2 0.14
Construction 233 3.8 6.41 201 2.5 4.86 285 4.4 6.15 32 1.3 1.55 (52 ) (0.6 ) 0.26
Mortgage 6,538 84.1 5.15 6,646 84.0 5.05 6,688 87.1 5.21 (108 ) 0.1 0.10 (150 ) (3.0 ) (0.06 )
Consumer 3,884 96.6 9.86 3,905 98.4 10.00 3,742 94.5 10.02 (21 ) (1.8 ) (0.14 ) 142 2.1 (0.16 )
Lease financing � 555 � � � 9.9 � 7.11 � � 545 � � � 9.8 � 7.20 � � 538 � � � 10.5 � 7.79 � � 10 � � � 0.1 � � (0.09 ) � 17 � � � (0.6 ) � (0.68 )
Total loans not covered under loss sharing agreements with the FDIC 19,429 296.3 6.07 19,536 294.3 5.99 19,609 297.2 6.03 (107 ) 2.0 0.08 (180 ) (0.9 ) 0.04
Loans covered under loss sharing agreements with the FDIC � 2,615 � � � 61.3 � 9.31 � � 2,727 � � � 68.3 � 9.95 � � 3,017 � � � 86.8 � 11.43 � � (112 ) � � (7.0 ) � (0.64 ) � (402 ) � � (25.5 ) � (2.12 )
Total loans � 22,044 � � � 357.6 � 6.45 � � 22,263 � � � 362.6 � 6.48 � � 22,626 � � � 384.0 � 6.75 � � (219 ) � � (5.0 ) � (0.03 ) � (582 ) � � (26.4 ) � (0.30 )
Total interest earning assets � 29,264 � � $ 392.0 � 5.33 % � 29,764 � � $ 401.2 � 5.36 % � 29,664 � � $ 424.5 � 5.69 % � (500 ) � � ($9.2 ) � (0.03 )% � (400 ) � � ($32.5 ) � (0.36 )%
Allowance for loan losses (618 ) (629 ) (602 ) 11 (16 )
Other non-interest earning assets 4,171 4,416 4,997 (245 ) (826 )
Assets from discontinued operations � 491 � � 1,473 � � 1,976 � � (982 ) � (1,485 )
Total average assets $ 33,308 � $ 35,024 � $ 36,035 � $ (1,716 ) $ (2,727 )
�
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market $ 4,788 $ 4.0 0.33 % $ 4,876 $ 3.9 0.32 % $ 4,629 $ 3.7 0.32 % $ (88 ) $ 0.1 0.01 % $ 159 $ 0.3 0.01 %
Savings 6,788 3.8 0.22 6,740 3.7 0.22 6,663 3.7 0.22 48 0.1 - 125 0.1 -
Time deposits � 7,409 � � � 17.7 � 0.95 � � 7,569 � � � 18.9 � 0.99 � � 7,790 � � � 21.3 � 1.08 � � (160 ) � � (1.2 ) � (0.04 ) � (381 ) � � (3.6 ) � (0.13 )
Total interest bearing deposits 18,985 25.5 0.53 19,185 26.5 0.55 19,082 28.7 0.60 (200 ) (1.0 ) (0.02 ) (97 ) (3.2 ) (0.07 )
Borrowings[1] � 2,992 � � � 21.0 � 2.80 � � 3,591 � � � 27.6 � 3.06 � � 3,794 � � � 41.3 � 4.35 � � (599 ) � � (6.6 ) � (0.26 ) � (802 ) � � (20.3 ) � (1.55 )
Total interest bearing liabilities � 21,977 � � � 46.5 � 0.84 � � 22,776 � � � 54.1 � 0.94 � � 22,876 � � � 70.0 � 1.22 � � (799 ) � � (7.6 ) � (0.10 ) � (899 ) � � (23.5 ) � (0.38 )
Net interest spread 4.49 % 4.42 % 4.47 % 0.07 % 0.02 %
Non-interest bearing deposits 5,636 5,464 5,468 172 168
Other liabilities 849 860 1,039 (11 ) (190 )
Liabilities from discontinued operations 486 1,618

2,193

(1,132 )

(1,707

)
Stockholders' equity � 4,360 � � 4,306 � �

4,459

� � 54 � �

(99

)

Total average liabilities and stockholders' equity $ 33,308 � $ 35,024 � $ 36,035 � $ (1,716 ) $ (2,727 )
�
Adjusted net interest income / margin non-taxable equivalent basis $ 345.5 � 4.70 % $ 347.1 � 4.64 % $ 354.5 � 4.75 % � ($1.6 ) � 0.06 % � ($9.0 ) � (0.05 )%
Impact of fees related to repos refinancing $ 18.6 $ 20.7
Net interest income (expense)/margin non-taxable equivalent basis $ 326.9 � 4.45 % $ 326.4 � 4.36 % $ 354.5 � 4.75 %
�
(1) Borrowing expense for the fourth and third quarters, including the fees related to repos refinancing, was 5.27% and 5.34%, respectively.
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� � � � � � � � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE
(Unaudited)
�
Year ended Year ended
31-Dec-14 31-Dec-13 Variance
Average Income / Yield / Average Income / Yield / Average Income / Yield /
($ amounts in millions; yields not on a taxable equivalent basis) � balance � Expense � Rate balance � Expense � Rate balance � Expense � Rate
Assets:
Interest earning assets:
Money market, trading and investment securities $ 7,530 � � $ 154.8 � 2.06 % $ 6,941 � � $ 166.8 � 2.40 % $ 589 � � � ($12.0 ) � (0.34 )%
Loans not covered under loss sharing agreements with the FDIC:
Commercial 8,347 404.4 4.85 8,284 399.3 4.82 63 5.1 0.03
Construction 199 13.5 6.78 319 15.1 4.73 (120 ) (1.6 ) 2.05
Mortgage 6,641 340.4 5.12 6,688 343.3 5.13 (47 ) (2.9 ) (0.01 )
Consumer 3,861 386.7 10.01 3,741 379.2 10.13 120 7.5 (0.12 )
Lease financing � 548 � � � 40.1 � 7.33 � � 540 � � � 43.5 � 8.07 � � 8 � � � (3.4 ) � (0.74 )
Total loans not covered under loss sharing agreements with the FDIC 19,596 1,185.1 6.05 19,572 1,180.4 6.03 24 4.7 0.02
Loans covered under loss sharing agreements with the FDIC � 2,771 � � � 293.6 � 10.60 � � 3,228 � � � 300.7 � 9.32 � � (457 ) � � (7.1 ) � 1.28 �
Total loans � 22,367 � � � 1,478.7 � 6.61 � � 22,800 � � � 1,481.1 � 6.50 � � (433 ) � � (2.4 ) � 0.11 �
Total interest earning assets � 29,897 � � $ 1,633.5 � 5.46 % � 29,741 � � $ 1,647.9 � 5.54 % � 156 � � � ($14.4 ) � (0.08 )%
Allowance for loan losses (623 ) (610 ) (13 )
Other non-interest earning assets 4,466 5,139 (673 )
Assets from discontinued operations � 1,442 � � 1,997 � � (555 )
Total average assets $ 35,182 � $ 36,267 � � ($1,085 )
�
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market $ 4,824 $ 15.5 0.32 % $ 4,658 $ 15.7 0.34 % $ 166 ($0.2 ) (0.02 )%
Savings 6,733 14.7 0.22 6,585 15.4 0.23 148 (0.7 ) (0.01 )
Time deposits � 7,556 � � � 74.9 � 0.99 � � 7,957 � � � 93.8 � 1.18 � � (401 ) � � (18.9 ) � (0.19 )
Total interest bearing deposits 19,113 105.1 0.55 19,200 124.9 0.65 (87 ) (19.8 ) (0.10 )
Borrowings [1] � 3,514 � � � 130.0 � 3.70 � � 4,292 � � � 178.5 � 4.16 � � (778 ) � � (48.5 ) � (0.46 )
Total interest bearing liabilities � 22,627 � � � 235.1 � 1.04 � � 23,492 � � � 303.4 � 1.29 � � (865 ) � � (68.3 ) � (0.25 )
Net interest spread 4.42 % 4.25 % 0.17 %
Non-interest bearing deposits 5,534 5,371 163
Other liabilities 879 1,019 (140 )
Liabilities from discontinued operations 1,586

2,209

(623

)
Stockholders' equity � 4,556 � �

4,176

� �

380

�
Total average liabilities and stockholders' equity $ 35,182 � $ 36,267 � � ($1,085 )
�
Adjusted net interest income / margin non-taxable equivalent basis $ 1,398.4 � 4.67 % $ 1,344.5 � 4.52 % $ 53.9 � � 0.15 %
Impact of fees related to repos refinancing $ 39.2
Accelerated amortization of TARP discount and related deferred costs 414.1
Net interest income/margin non-taxable equivalent basis $ 945.1 � 3.16 %
�
(1) Borrowing expense including the fees related to repos refinancing and the impact of the accelerated TARP amortization was 16.60%.
�

� � � � � � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table F - Mortgage Banking Activities and Other Service Fees
(Unaudited)
�

Mortgage Banking Activities

Variance

Quarters ended Q4 2014 vs. Q4 2014 vs. Years ended Variance
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13 � Q3 2014 � Q4 2013 � 31-Dec-14 � 31-Dec-13 � 2014 vs. 2013
Mortgage servicing fees, net of fair value adjustments:
Mortgage servicing fees $ 9,364 $ 11,091 $ 11,366 $ (1,727 ) $ (2,002 ) $ 41,761 $ 45,465 $ (3,704 )
Mortgage servicing rights fair value adjustments � � (6,259 ) � � (2,588 ) � � (4,541 ) � � (3,671 ) � � (1,718 ) � � (24,683 ) � � (11,403 ) � � (13,280 )
Total mortgage servicing fees, net of fair value adjustments � � 3,105 � � � 8,503 � � � 6,825 � � � (5,398 ) � � (3,720 ) � � 17,078 � � � 34,062 � � � (16,984 )
Net gain on sale of loans, including valuation on loans held-for-sale � � 8,382 � � � 7,466 � � � 9,751 � � � 916 � � � (1,369 ) � � 31,213 � � � 26,719 � � � 4,494 �
Trading account (loss) profit:
Unrealized (losses) gains on outstanding derivative positions (1 ) 13 1,011 (14 ) (1,012 ) (726 ) 746 (1,472 )
Realized (losses) gains on closed derivative positions � � (2,739 ) � � (1,580 ) � � (3,200 ) � � (1,159 ) � � 461 � � � (16,950 ) � � 10,130 � � � (27,080 )
Total trading account (loss) profit � � (2,740 ) � � (1,567 ) � � (2,189 ) � � (1,173 ) � � (551 ) � � (17,676 ) � � 10,876 � � � (28,552 )
Total mortgage banking activities � $ 8,747 � � $ 14,402 � � $ 14,387 � � $ (5,655 ) � $ (5,640 ) � $ 30,615 � � $ 71,657 � � $ (41,042 )
�
� � � � � � � �
Other Service Fees Variance
Quarters ended Q4 2014 vs. Q4 2014 vs. Years ended Variance
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13 � Q3 2014 � Q4 2013 � 31-Dec-14 � 31-Dec-13 � 2014 vs. 2013
Other service fees:
Debit card fees $ 10,929 $ 10,673 $ 10,785 $ 256 $ 144 $ 43,146 $ 41,912 $ 1,234
Insurance fees 17,711 12,322 16,743 5,389 968 54,158 52,309 1,849
Credit card fees 17,493 17,078 17,174 415 319 67,639 65,727 1,912
Sale and administration of investment products 7,193 6,605 7,331 588 (138 ) 27,711 35,272 (7,561 )
Trust fees 4,469 4,711 4,525 (242 ) (56 ) 18,209 17,285 924
Other fees � � 3,345 � � 3,450 � � 3,529 � � (105 ) � � (184 ) � � 14,402 � � 16,846 � � (2,444 )
Total other service fees � $ 61,140 � $ 54,839 � $ 60,087 � $ 6,301 � � $ 1,053 � � $ 225,265 � $ 229,351 � $ (4,086 )
�

� � � � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table G - Loans and Deposits
(Unaudited)
�
Loans - Ending Balances
Variance
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13 �

Q4 2014 vs.
Q3 2014

�

Q4 2014 vs.
Q4 2013

Loans not covered under FDIC loss sharing agreements:
Commercial $ 8,134,267 $ 8,058,714 $ 10,037,184 $ 75,553 $ (1,902,917 )
Construction 251,820 211,850 206,084 39,970 45,736
Legacy [1] 80,818 91,015 211,135 (10,197 ) (130,317 )
Lease financing 564,389 550,514 543,761 13,875 20,628
Mortgage 6,502,886 6,555,337 6,681,476 (52,451 ) (178,590 )
Consumer � � 3,870,271 � � 3,891,786 � � 3,932,226 � � (21,515 ) � � (61,955 )
Total non-covered loans held-in-portfolio $ 19,404,451 $ 19,359,216 $ 21,611,866 $ 45,235 $ (2,207,415 )
Loans covered under FDIC loss sharing agreements � � 2,542,662 � � 2,654,263 � � 2,984,427 � � (111,601 ) � � (441,765 )
Total loans held-in-portfolio � $ 21,947,113 � $ 22,013,479 � $ 24,596,293 � $ (66,366 ) � $ (2,649,180 )
Loans held-for-sale:
Commercial $ 309 $ 33,658 $ 603 $ (33,349 ) $ (294 )
Legacy [1] 319 31,823 - (31,504 ) 319
Mortgage 100,166 106,832 109,823 (6,666 ) (9,657 )
Consumer � � 5,310 � � 5,695 � � - � � (385 ) � � 5,310 �
Total loans held-for-sale � $ 106,104 � $ 178,008 � $ 110,426 � $ (71,904 ) � $ (4,322 )
Total loans � $ 22,053,217 � $ 22,191,487 � $ 24,706,719 � $ (138,270 ) � $ (2,653,502 )
�
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment.
Note: Loans from discontinued operations as of September 30,2014 are presented as part of Assets from discontinued operations in the Consolidated Statement of Financial Condition.
�
Deposits - Ending Balances
Variance
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13 �

Q4 2014 vs.
Q3 2014

�

Q4 2014 vs.
Q4 2013

Demand deposits [1] $ 6,606,060 $ 6,326,220 $ 6,590,963 $ 279,840 $ 15,097
Savings, NOW and money market deposits (non-brokered) 10,320,782 10,251,602 11,255,309 69,180 (934,527 )
Savings, NOW and money market deposits (brokered) 406,248 386,573 553,521 19,675 (147,273 )
Time deposits (non-brokered) 5,960,401 5,636,443 6,478,103 323,958 (517,702 )
Time deposits (brokered CDs) � � 1,514,044 � � 1,865,267 � � 1,833,249 � � (351,223 ) � � (319,205 )
Total deposits � $ 24,807,535 � $ 24,466,105 � $ 26,711,145 � $ 341,430 � � $ (1,903,610 )
�
[1] Includes interest and non-interest demand bearing deposits.
Note: Deposits from discontinued operations as of September 30, 2014 are presented as part of Liabilities from discontinued operations in the Consolidated Statement of Financial Condition.
�

� � � � � � � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table H - Non-Performing Assets
(Unaudited)
�
Variance
(Dollars in thousands) � 31-Dec-14 � As a % of loans HIP by category � 30-Sep-14 � As a % of loans HIP by category � 31-Dec-13 � As a % of loans HIP by category �

Q4 2014 vs.
Q3 2014

�

Q4 2014 vs.
Q4 2013

Non-accrual loans:
Commercial $ 259,527 3.2 % $ 252,331 3.1 % $ 279,053 2.8 % $ 7,196 $ (19,526 )
Construction 13,812 5.5 19,148 9.0 23,771 11.5 (5,336 ) (9,959 )
Legacy [1] 1,545 1.9 5,648 6.2 15,050 7.1 (4,103 ) (13,505 )
Lease financing 3,102 0.5 3,168 0.6 3,495 0.6 (66 ) (393 )
Mortgage 300,466 4.6 295,125 4.5 232,681 3.5 5,341 67,785
Consumer � � 46,886 � � 1.2 � � � 46,525 � � 1.2 � � � 43,898 � � 1.1 � � � 361 � � � 2,988 �

Total non-performing loans held-in-portfolio, excluding covered loans [2]

625,338 3.2 % 621,945 3.2 % 597,948 2.8 % 3,393 27,390
Non-performing loans held-for-sale [3] 18,899 19,728 1,092 (829 ) 17,807

Other real estate owned (OREO), excluding covered OREO

135,500 135,256 135,501 244 (1 )

Total non-performing assets, excluding covered assets

779,737 776,929 734,541 2,808 45,196
Covered loans and OREO � �

148,099

� � � � � � 166,533 � � � � � � 197,388 � � � � � �

(18,434

) � �

(49,289

)
Total non-performing assets � $

927,836

� � � � � $ 943,462 � � � � � $ 931,929 � � � � � $

(15,626

) � $

(4,093

)
Accruing loans past due 90 days or more [4] � $ 447,990 � � � � � $ 426,459 � � � � � $ 418,028 � � � � � $ 21,531 � � $ 29,962 �
Ratios excluding covered loans:

Non-performing loans held-in-portfolio to loans held-in-portfolio

3.22

%

�

3.21

%

�

2.77

%

�

Allowance for loan losses to loans held-in-portfolio

2.68 2.69 2.49

Allowance for loan losses to non-performing loans, excluding loans held-for-sale

� � 83.11 � � � � � � 83.88 � � � � � � 90.05 � � � � � � � � � � � �
Ratios including covered loans:
Non-performing assets to total assets

2.80

%

�

2.77

%

�

2.61

%

�

Non-performing loans held-in-portfolio to loans held-in-portfolio

2.93 2.89 2.55

Allowance for loan losses to loans held-in-portfolio

2.74 2.78 2.60

Allowance for loan losses to non-performing loans, excluding loans held-for-sale

� �

93.57

� � � � � � 95.96 � � � � � � 102.11 � � � � � � � � � � � �
�
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment.
[2] Total non-performing loans held-in-portfolio, excluding covered loans, excludes $48 thousand in discontinued operations as of September 30, 2014.

[3] Non-performing loans held-for-sale as of December 31, 2014, consisted of $14.0 million in mortgage loans, $309 thousand in commercial loans and $4.5 million in consumer loans (September 30, 2014 - consisted of $14.7 million in mortgage loans, $427 thousand in commercial loans and $4.6 million in consumer loans and $10 thousand in legacy loans; December 31, 2013 - $603 thousand in legacy loans and $489 thousand in mortgage loans).

[4] It is the Corporations policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to non-performing since the principal repayment is insured. These balances include $125 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of December 31, 2014 (September 30, 2014 - $125 million; December 31, 2013 - $115 million).
�

� � � � � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table I - Activity in Non-Performing Loans
(Unaudited)
�
�
Commercial loans held-in-portfolio:
Quarter ended Quarter ended
31-Dec-14 30-Sep-14
(In thousands) � BPPR � BPNA � Popular, Inc. � BPPR � BPNA � Popular, Inc.
Beginning balance NPLs $ 244,425 $ 7,906 $ 252,331 $ 253,552 $ 24,581 $ 278,133
Plus:
New non-performing loans 112,071 1,245 113,316 23,410 4,541 27,951
Less:
Non-performing loans transferred to OREO (2,072 ) - (2,072 ) (2,706 ) - (2,706 )
Non-performing loans charged-off (17,492 ) (1,298 ) (18,790 ) (10,085 ) (3,103 ) (13,188 )
Loans returned to accrual status / loan collections (79,720 ) (2,895 ) (82,615 ) (19,746 ) (2,649 ) (22,395 )
Loans transferred to held-for-sale - (3,025 ) (3,025 ) - (22,967 ) (22,967 )
Non-performing loans transferred from (to) discontinued operations � � - � � � 382 � � � 382 � � � - � � � 7,503 � � � 7,503 �
Ending balance NPLs � $ 257,212 � � $ 2,315 � � $ 259,527 � � $ 244,425 � � $ 7,906 � � $ 252,331 �
�
�
Construction loans held-in-portfolio:
Quarter ended Quarter ended
31-Dec-14 � 30-Sep-14
(In thousands) � BPPR � BPNA � Popular, Inc. � BPPR � BPNA � Popular, Inc.
Beginning balance NPLs $ 19,148 $ - $ 19,148 $ 21,456 $ - $ 21,456
Plus:
New non-performing loans 573 - 573 - - -
Less:
Non-performing loans charged-off (244 ) - (244 ) (985 ) - (985 )
Loans returned to accrual status / loan collections � � (5,665 ) � � - � � � (5,665 ) � � (1,323 ) � � - � � � (1,323 )
Ending balance NPLs � $ 13,812 � � $ - � � $ 13,812 � � $ 19,148 � � $ - � � $ 19,148 �
�
�
Mortgage loans held-in-portfolio:
Quarter ended Quarter ended
31-Dec-14 � 30-Sep-14
(In thousands) � BPPR � BPNA � Popular, Inc. � BPPR � BPNA � Popular, Inc.
Beginning balance NPLs $ 283,433 $ 11,692 $ 295,125 $ 262,356 $ 23,964 $ 286,320
Plus:
New non-performing loans 88,983 8,159 97,142 95,207 2,802 98,009
Less:
Non-performing loans transferred to OREO (1,051 ) - (1,051 ) (3,062 ) (870 ) (3,932 )
Non-performing loans charged-off (8,951 ) (96 ) (9,047 ) (11,309 ) (395 ) (11,704 )
Loans returned to accrual status / loan collections (71,232 ) (4,309 ) (75,541 ) (53,003 ) (686 ) (53,689 )
Loans transferred to held-for-sale - (6,162 ) (6,162 ) - (13,123 ) (13,123 )
Reclassification to consumer loans � � - � � � - � � � - � � � (6,756 ) � � - � � � (6,756 )
Ending balance NPLs � $ 291,182 � � $ 9,284 � � $ 300,466 � � $ 283,433 � � $ 11,692 � � $ 295,125 �
�
�
Legacy loans held-in-portfolio:
Quarter ended Quarter ended
31-Dec-14 � 30-Sep-14
(In thousands) � BPPR � BPNA � Popular, Inc. � BPPR � BPNA � Popular, Inc.
Beginning balance NPLs $ - $ 5,648 $ 5,648 $ - $ 8,323 $ 8,323
Plus:
New non-performing loans - 213 213 - 1,852 1,852
Advances on existing non-performing loans - 97 97 - 149 149
Less:
Non-performing loans transferred to OREO - - - - (189 ) (189 )
Non-performing loans charged-off - (744 ) (744 ) - (2,109 ) (2,109 )
Loans returned to accrual status / loan collections - (2,791 ) (2,791 ) - (975 ) (975 )
Loans transferred to held-for-sale - (878 ) (878 ) - (2,529 ) (2,529 )
Non-performing loans transferred from (to) discontinued operations � � - � � � - � � � - � � � - � � � 1,126 � � � 1,126 �
Ending balance NPLs � $ - � � $ 1,545 � � $ 1,545 � � $ - � � $ 5,648 � � $ 5,648 �
�
�
Total non-performing loans held-in-portfolio (excluding consumer loans):
Quarter ended Quarter ended
31-Dec-14 � 30-Sep-14
(In thousands) � BPPR � BPNA � Popular, Inc. � BPPR � BPNA � Popular, Inc.
Beginning balance NPLs $ 547,006 $ 25,246 $ 572,252 $ 537,364 $ 56,868 $ 594,232
Plus:
New non-performing loans 201,627 9,617 211,244 118,617 9,195 127,812
Advances on existing non-performing loans - 97 97 - 149 149
Less:
Non-performing loans transferred to OREO (3,123 ) - (3,123 ) (5,768 ) (1,059 ) (6,827 )
Non-performing loans charged-off (26,687 ) (2,138 ) (28,825 ) (22,379 ) (5,607 ) (27,986 )
Loans returned to accrual status / loan collections (156,617 ) (9,995 ) (166,612 ) (74,072 ) (4,310 ) (78,382 )
Loans transferred to held-for-sale - (10,065 ) (10,065 ) - (38,619 ) (38,619 )
Non-performing loans transferred from (to) discontinued operations - 382 382 - 8,629 8,629
Reclassification to consumer loans � � - � � � - � � � - � � � (6,756 ) � � - � � � (6,756 )
Ending balance NPLs � $ 562,206 � � $ 13,144 � � $ 575,350 � � $ 547,006 � � $ 25,246 � � $ 572,252 �
�

� � � � � � � � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios
(Unaudited)
�
�
Quarter ended Quarter ended Quarter ended
� � 31-Dec-14 � 30-Sep-14 � 31-Dec-13
(Dollars in thousands) � Non-covered loans � Covered loans � Total � Non-covered loans � Covered loans � Total � Non-covered loans � Covered loans � Total
Balance at beginning of period $ 521,687 $ 89,688 $ 611,375 $ 526,246 $ 98,665 $ 624,911 $ 526,100 $ 116,828 $ 642,928
Provision for loan losses - Continuing operations 51,637 (3,646 ) 47,991 68,166 12,463 80,629 49,927 8,907 58,834
Provision for loan losses - Discontinued operations � � - � � � - � � � - � � � - � � � - � � � - � � � (2,198 ) � � - � � � (2,198 )
� � � 573,324 � � � 86,042 � � � 659,366 � � � 594,412 � � � 111,128 � � � 705,540 � � � 573,829 � � � 125,735 � � � 699,564 �
Net loans charged-off (recovered):
BPPR
Commercial

13,890

3,230

17,120

1,011 16,590 17,601 15,177 13,433 28,610
Construction

(279

) (1,172 )

(1,451

) (1,237 ) 4,066 2,829 (1,796 ) 6,067 4,271
Lease financing

751

(6 )

745

1,410 (1 ) 1,409 838 - 838
Mortgage 12,228 2,725 14,953 13,330 1,809 15,139 6,981 4,729 11,710
Consumer � � 25,933 � � � (808 ) � � 25,125 � � � 24,168 � � � (1,024 ) � � 23,144 � � � 14,056 � � � (586 ) � � 13,470 �
Total BPPR � � 52,523 � � � 3,969 � � � 56,492 � � � 38,682 � � � 21,440 � � � 60,122 � � � 35,256 � � � 23,643 � � � 58,899 �
�
BPNA
Commercial (900 ) - (900 ) (893 ) - (893 ) 1,089 - 1,089
Construction (2 ) - (2 ) (59 ) - (59 ) - - -
Legacy [1] (3,877 ) - (3,877 ) 221 - 221 (5,817 ) - (5,817 )
Mortgage (93 ) - (93 ) 26 - 26 660 - 660
Consumer 2,536 - 2,536 2,492 - 2,492 3,465 - 3,465
Discontinued operations � � - � � � - � � � - � � � - � � � - � � � - � � � 713 � � � - � � � 713 �
Total BPNA � � (2,336 ) � � - � � � (2,336 ) � � 1,787 � � � - � � � 1,787 � � � 110 � � � - � � � 110 �
Total loans charged-off (recovered) - Popular, Inc. � � 50,187 � � � 3,969 � � � 54,156 � � � 40,469 � � � 21,440 � � � 61,909 � � � 35,366 � � � 23,643 � � � 59,009 �
Net write-downs [3] � � (3,418 ) � � - � � � (3,418 ) � � (32,256 ) � � - � � � (32,256 ) � � - � � � - � � � - �
Net write-downs related to loans transferred to discontinued operations � � - � � � - � � � - � � � - � � � - � � � - � � � - � � � - � � � - �
Balance at end of period � $ 519,719 � � $ 82,073 � � $ 601,792 � � $ 521,687 � � $ 89,688 � � $ 611,375 � � $ 538,463 � � $ 102,092 � � $ 640,555 �
�
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio 1.04 % 0.99 % 0.83 % 1.12 % 0.66 % 0.97 %
Provision for loan losses to net charge-offs [2]

�

0.99x

�

0.85x

�

1.39x

�

1.11x

�

1.35x

�

0.96x

�
BPPR
Annualized net charge-offs to average loans held-in-portfolio 1.33 % 1.22 % 0.98 % 1.30 % 0.90 % 1.26 %
Provision for loan losses to net charge-offs [2]

�

0.99x

�

0.86x

�

1.60x

�

1.24x

�

1.78x

�

1.22x

�
BPNA
Annualized net charge-offs (recoveries) to average loans held-in-portfolio (0.27 )% 0.19 % 0.01 %
Provision for loan losses to net charge-offs � � � � � � � � �

�

N.M.

� � � � � � � � � �

�

N.M.

� � � � � � � � � �

�

(135.72)x

�
�
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment.
[2] Excluding provision for loan losses and net write-down related to loans sold or reclassified to held-for-sale during the quarter ended December 31, 2014 and September 30, 2014.

[3] Net write-downs for the quarters ended December 31, 2014 and September 30, 2014 are related to loans sold or reclassified to held-for-sale.

N.M. - Not meaningful.
�

� � � � � �
Year ended Year ended
(Dollars in thousands) � 31-Dec-14 � 31-Dec-13
� � Non-covered loans � Covered loans � Total � Non-covered loans � Covered loans � Total
Balance at beginning of period $ 538,463 $ 102,092 $ 640,555 $ 621,701 $ 108,906 $ 730,607
Provision for loan losses - Continuing operations 223,999 46,135 270,134 536,710 69,396 606,106
Provision for loan losses - Discontinued operations � � (6,764 ) � � - � � � (6,764 ) � � (3,543 ) � � - � � (3,543 )
� � � 755,698 � � � 148,227 � � � 903,925 � � � 1,154,868 � � � 178,302 � � 1,333,170 �
Net loans charged-off (recovered):
BPPR
Commercial

39,382

32,906

72,288

85,601 27,607 113,208
Construction

(3,509

) 27,686

24,177

(8,642 ) 34,108 25,466
Lease financing

3,961

(7 )

3,954

3,506 - 3,506
Mortgage 44,000 8,442 52,442 47,736 10,614 58,350
Consumer � � 96,655 � � � (2,873 ) � � 93,782 � � � 75,560 � � � 3,881 � � 79,441 �
Total BPPR � � 180,489 � � � 66,154 � � � 246,643 � � � 203,761 � � � 76,210 � � 279,971 �
�
BPNA
Commercial 1,105 - 1,105 9,184 - 9,184
Construction (237 ) - (237 ) - - -
Legacy [1] (9,070 ) - (9,070 ) (3,897 ) - (3,897 )
Mortgage 1,196 - 1,196 7,803 - 7,803
Consumer 12,165 - 12,165 18,004 - 18,004
Discontinued operations � � (5,545 ) � � - � � � (5,545 ) � � 18,905 � � � - � � 18,905 �
Total BPNA � � (386 ) � � - � � � (386 ) � � 49,999 � � � - � � 49,999 �
Total loans charged-off (recovered) - Popular, Inc. � � 180,103 � � � 66,154 � � � 246,257 � � � 253,760 � � � 76,210 � � 329,970 �
Net write-downs [3] � � (35,674 ) � � - � � � (35,674 ) � � (362,645 ) � � - � � (362,645 )
Net write-downs related to loans transferred to discontinued operations � � (20,202 ) � � - � � � (20,202 ) � � - � � � - � � - �
Balance at end of period � $ 519,719 � � $ 82,073 � � $ 601,792 � � $ 538,463 � � $ 102,092 � $ 640,555 �
�
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio 0.92 % 1.10 % 1.19 % 1.34 %
Provision for loan losses to net charge-offs [2]

�

1.17x

�

1.04x

�

0.85x

�

0.86x

�
BPPR
Annualized net charge-offs to average loans held-in-portfolio 1.14 % 1.33 % 1.30 % 1.49 %
Provision for loan losses to net charge-offs [2]

�

1.38x

�

1.20x

�

1.13x

�

1.07x

�
BPNA
Annualized net charge-offs to average loans held-in-portfolio (0.01 )% 0.87 %
Provision (reversal) for loan losses to net charge-offs � � � � � � � � �

�

102.57x

� � � � � � � � �

�

(0.29)x

�
�
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment.

[2] Excluding provision for loan losses and net write-down related to loans sold or reclassified to held-for-sale during the quarter ended December 31, 2014 and December 31, 2013.

[3] Net write-downs for the year ended December 31, 2014 and 2013 are related to loans sold or reclassified to held-for-sale.

�

� � � � � � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED
(Unaudited)
�
�
31-Dec-14
(Dollars in thousands) � � Commercial � Construction � Legacy [3] � Mortgage � Lease financing � Consumer �

Total [2]

Specific ALLL $ 64,736 $ 363 $ - $ 46,111 $ 770 $ 28,161 $ 140,141
Impaired loans [1] $ 357,161 $ 13,268 $ - $ 435,824 $ 3,023 $ 117,732 $ 927,008
Specific ALLL to impaired loans [1] � � 18.13 % � � 2.74 % � � - % � � 10.58 % � � 25.47 % � � 23.92 % � � 15.12 %
General ALLL $ 146,501 $ 6,307 $ 2,944 $ 77,211 $ 6,361 $ 140,254 $ 379,578
Loans held-in-portfolio, excluding impaired loans [1] $ 7,777,106 $ 238,552 $ 80,818 $ 6,067,062 $ 561,366 $ 3,752,539 $ 18,477,443
General ALLL to loans held-in-portfolio, excluding impaired loans [1] � � 1.88 % � � 2.64 % � � 3.64 % � � 1.27 % � � 1.13 % � � 3.74 % � � 2.05 %
Total ALLL $ 211,237 $ 6,670 $ 2,944 $ 123,322 $ 7,131 $ 168,415 $ 519,719
Total non-covered loans held-in-portfolio [1] $ 8,134,267 $ 251,820 $ 80,818 $ 6,502,886 $ 564,389 $ 3,870,271 $ 19,404,451
ALLL to loans held-in-portfolio [1] � � 2.60 % � � 2.65 % � � 3.64 % � � 1.90 % � � 1.26 % � � 4.35 % � � 2.68 %
�
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction.
[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of December 31, 2014 the general allowance on the covered loans amounted to $82.1 million, while the specific reserve amounted to $5 thousand.
[3] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment.
�
30-Sep-14
(Dollars in thousands) � � Commercial � Construction � Legacy [3] � Mortgage � Lease financing � Consumer �

Total [2]

Specific ALLL $ 64,750 $ 133 $ - $ 38,207 $ 698 $ 28,166 $ 131,954
Impaired loans [1] $ 373,501 $ 18,894 $ 2,311 $ 431,720 $ 2,709 $ 116,830 $ 945,965
Specific ALLL to impaired loans [1] � � 17.34 % � � 0.70 % � � - % � � 8.85 % � � 25.77 % � � 24.11 % � � 13.95 %
General ALLL $ 151,681 $ 6,375 $ 4,001 $ 83,314 $ 6,673 $ 137,689 $ 389,733
Loans held-in-portfolio, excluding impaired loans [1] $ 7,685,213 $ 192,956 $ 88,704 $ 6,123,617 $ 547,805 $ 3,774,956 $ 18,413,251
General ALLL to loans held-in-portfolio, excluding impaired loans [1] � � 1.97 % � � 3.30 % � � 4.51 % � � 1.36 % � � 1.22 % � � 3.65 % � � 2.12 %
Total ALLL $ 216,431 $ 6,508 $ 4,001 $ 121,521 $ 7,371 $ 165,855 $ 521,687
Total non-covered loans held-in-portfolio [1] $ 8,058,714 $ 211,850 $ 91,015 $ 6,555,337 $ 550,514 $ 3,891,786 $ 19,359,216
ALLL to loans held-in-portfolio [1] � � 2.69 % � � 3.07 % � � 4.40 % � � 1.85 % � � 1.34 % � � 4.26 % � � 2.69 %
�
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction.
[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of September 30, 2014 the general allowance on the covered loans amounted to $89.7 million, while the specific reserve amounted to $4 thousand.
[3] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment.
�
Variance
(Dollars in thousands) � Commercial � Construction � Legacy � Mortgage � Lease financing � Consumer � Total
Specific ALLL � $ (14 ) � $ 230 � $ - � $ 7,904 � $ 72 � $ (5 ) � $ 8,187
Impaired loans � $ (16,340 ) � $ (5,626 ) � $ (2,311 ) � $ 4,104 � � $ 314 � � $ 902 � � $ (18,957 )
General ALLL $ (5,180 ) $ (68 ) $ (1,057 ) $ (6,103 ) $ (312 ) $ 2,565 $ (10,155 )
Loans held-in-portfolio, excluding impaired loans � $ 91,893 � � $ 45,596 � � $ (7,886 ) � $ (56,555 ) � $ 13,561 � � $ (22,417 ) � $ 64,192 �
Total ALLL $ (5,194 ) $ 162 $ (1,057 ) $ 1,801 $ (240 ) $ 2,560 $ (1,968 )
Total non-covered loans held-in-portfolio � $ 75,553 � � $ 39,970 � � $ (10,197 ) � $ (52,451 ) � $ 13,875 � � $ (21,515 ) � $ 45,235 �
�

� � � � � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS
(Unaudited)
�
31-Dec-14
Puerto Rico
(In thousands) � Commercial � Construction � Mortgage � Lease financing � Consumer � Total
Allowance for credit losses:
Specific ALLL non-covered loans $ 64,736 $ 363 $ 45,838 $ 770 $ 27,796 $ 139,503
General ALLL non-covered loans � � 136,853 � � � 5,120 � � � 75,022 � � � 6,361 � � � 126,276 � � � 349,632 �
ALLL - non-covered loans � � 201,589 � � � 5,483 � � � 120,860 � � � 7,131 � � � 154,072 � � � 489,135 �
Specific ALLL covered loans 5 - - - - 5
General ALLL covered loans � � 30,866 � � � 7,202 � � � 40,948 � � � - � � � 3,052 � � � 82,068 �
ALLL - covered loans � � 30,871 � � � 7,202 � � � 40,948 � � � - � � � 3,052 � � � 82,073 �
Total ALLL � $ 232,460 � � $ 12,685 � � $ 161,808 � � $ 7,131 � � $ 157,124 � � $ 571,208 �
Loans held-in-portfolio:
Impaired non-covered loans $ 356,911 $ 13,268 $ 431,569 $ 3,023 $ 115,759 $ 920,530
Non-covered loans held-in-portfolio, excluding impaired loans � � 6,017,892 � � � 146,116 � � � 5,018,932 � � � 561,366 � � � 3,273,278 � � � 15,017,584 �
Non-covered loans held-in-portfolio � � 6,374,803 � � � 159,384 � � � 5,450,501 � � � 564,389 � � � 3,389,037 � � � 15,938,114 �
Impaired covered loans 4,487 2,419 - - - 6,906
Covered loans held-in-portfolio, excluding impaired loans � � 1,610,294 � � � 67,917 � � � 822,986 � � � - � � � 34,559 � � � 2,535,756 �
Covered loans held-in-portfolio � � 1,614,781 � � � 70,336 � � � 822,986 � � � - � � � 34,559 � � � 2,542,662 �
Total loans held-in-portfolio � $ 7,989,584 � � $ 229,720 � � $ 6,273,487 � � $ 564,389 � � $ 3,423,596 � � $ 18,480,776 �
�
�
30-Sep-14
Puerto Rico
(In thousands) � Commercial � Construction � Mortgage � Lease financing � Consumer � Total
Allowance for credit losses:
Specific ALLL non-covered loans $ 64,750 $ 133 $ 37,491 $ 698 $ 27,723 $ 130,795
General ALLL non-covered loans � � 140,906 � � � 5,534 � � � 81,728 � � � 6,673 � � � 123,816 � � � 358,657 �
ALLL - non-covered loans � � 205,656 � � � 5,667 � � � 119,219 � � � 7,371 � � � 151,539 � � � 489,452 �
Specific ALLL covered loans 4 - - - - 4
General ALLL covered loans � � 36,411 � � � 7,193 � � � 42,524 � � � - � � � 3,556 � � � 89,684 �
ALLL - covered loans � � 36,415 � � � 7,193 � � � 42,524 � � � - � � � 3,556 � � � 89,688 �
Total ALLL � $ 242,071 � � $ 12,860 � � $ 161,743 � � $ 7,371 � � $ 155,095 � � $ 579,140 �
Loans held-in-portfolio:
Impaired non-covered loans $ 373,049 $ 18,894 $ 424,336 $ 2,709 $ 114,850 $ 933,838
Non-covered loans held-in-portfolio, excluding impaired loans � � 5,896,673 � � � 129,889 � � � 5,028,786 � � � 547,805 � � � 3,286,492 � � � 14,889,645 �
Non-covered loans held-in-portfolio � � 6,269,722 � � � 148,783 � � � 5,453,122 � � � 550,514 � � � 3,401,342 � � � 15,823,483 �
Impaired covered loans 2,765 2,419 - - - 5,184
Covered loans held-in-portfolio, excluding impaired loans � � 1,693,886 � � � 72,049 � � � 846,472 � � � - � � � 36,672 � � � 2,649,079 �
Covered loans held-in-portfolio � � 1,696,651 � � � 74,468 � � � 846,472 � � � - � � � 36,672 � � � 2,654,263 �
Total loans held-in-portfolio � $ 7,966,373 � � $ 223,251 � � $ 6,299,594 � � $ 550,514 � � $ 3,438,014 � � $ 18,477,746 �
�
�
Variance
(In thousands) � Commercial � Construction � Mortgage � Lease financing � Consumer � Total
Allowance for credit losses:
Specific ALLL non-covered loans $ (14 ) $ 230 $ 8,347 $ 72 $ 73 $ 8,708
General ALLL non-covered loans � � (4,053 ) � � (414 ) � � (6,706 ) � � (312 ) � � 2,460 � � � (9,025 )
ALLL - non-covered loans � � (4,067 ) � � (184 ) � � 1,641 � � � (240 ) � � 2,533 � � � (317 )
Specific ALLL covered loans 1 - - - - 1
General ALLL covered loans � � (5,545 ) � � 9 � � � (1,576 ) � � - � � � (504 ) � � (7,616 )
ALLL - covered loans � � (5,544 ) � � 9 � � � (1,576 ) � � - � � � (504 ) � � (7,615 )
Total ALLL � $ (9,611 ) � $ (175 ) � $ 65 � � $ (240 ) � $ 2,029 � � $ (7,932 )
Loans held-in-portfolio:
Impaired non-covered loans $ (16,138 ) $ (5,626 ) $ 7,233 $ 314 $ 909 $ (13,308 )
Non-covered loans held-in-portfolio, excluding impaired loans � � 121,219 � � � 16,227 � � � (9,854 ) � � 13,561 � � � (13,214 ) � � 127,939 �
Non-covered loans held-in-portfolio � � 105,081 � � � 10,601 � � � (2,621 ) � � 13,875 � � � (12,305 ) � � 114,631 �
Impaired covered loans 1,722 - - - - 1,722
Covered loans held-in-portfolio, excluding impaired loans � � (83,592 ) � � (4,132 ) � � (23,486 ) � � - � � � (2,113 ) � � (113,323 )
Covered loans held-in-portfolio � � (81,870 ) � � (4,132 ) � � (23,486 ) � � - � � � (2,113 ) � � (111,601 )
Total loans held-in-portfolio � $ 23,211 � � $ 6,469 � � $ (26,107 ) � $ 13,875 � � $ (14,418 ) � $ 3,030 �
�

� � � � � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS
(Unaudited)
�
31-Dec-14
U.S. Mainland
(In thousands) � Commercial � Construction � Legacy � Mortgage � Consumer � Total
Allowance for credit losses:
Specific ALLL $ - $ - $ - $ 273 $ 365 $ 638
General ALLL � � 9,648 � � � 1,187 � � 2,944 � � � 2,189 � � � 13,978 � � � 29,946 �
Total ALLL � $ 9,648 � � $ 1,187 � $ 2,944 � � $ 2,462 � � $ 14,343 � � $ 30,584 �
Loans held-in-portfolio:
Impaired loans $ 250 $ - $ - $ 4,255 $ 1,973 $ 6,478
Loans held-in-portfolio, excluding impaired loans � � 1,759,214 � � � 92,436 � � 80,818 � � � 1,048,130 � � � 479,261 � � � 3,459,859 �
Total loans held-in-portfolio � $ 1,759,464 � � $ 92,436 � $ 80,818 � � $ 1,052,385 � � $ 481,234 � � $ 3,466,337 �
�
�
30-Sep-14
U.S. Mainland
(In thousands) � Commercial � Construction � Legacy � Mortgage � Consumer � Total
Allowance for credit losses:
Specific ALLL $ - $ - $ - $ 716 $ 443 $ 1,159
General ALLL � � 10,775 � � � 841 � � 4,001 � � � 1,586 � � � 13,873 � � � 31,076 �
Total ALLL � $ 10,775 � � $ 841 � $ 4,001 � � $ 2,302 � � $ 14,316 � � $ 32,235 �
Loans held-in-portfolio:
Impaired loans $ 452 $ - $ 2,311 $ 7,384 $ 1,980 $ 12,127
Loans held-in-portfolio, excluding impaired loans � � 1,788,540 � � � 63,067 � � 88,704 � � � 1,094,831 � � � 488,464 � � � 3,523,606 �
Total loans held-in-portfolio � $ 1,788,992 � � $ 63,067 � $ 91,015 � � $ 1,102,215 � � $ 490,444 � � $ 3,535,733 �
�
�
Variance
(In thousands) � Commercial � Construction � Legacy � Mortgage � Consumer � Total
Allowance for credit losses:
Specific ALLL $ - $ - $ - $ (443 ) $ (78 ) $ (521 )
General ALLL � � (1,127 ) � � 346 � � (1,057 ) � � 603 � � � 105 � � � (1,130 )
Total ALLL � $ (1,127 ) � $ 346 � $ (1,057 ) � $ 160 � � $ 27 � � $ (1,651 )
Loans held-in-portfolio:
Impaired loans $ (202 ) $ - $ (2,311 ) $ (3,129 ) $ (7 ) $ (5,649 )
Loans held-in-portfolio, excluding impaired loans � � (29,326 ) � � 29,369 � � (7,886 ) � � (46,701 ) � � (9,203 ) � � (63,747 )
Total loans held-in-portfolio � $ (29,528 ) � $ 29,369 � $ (10,197 ) � $ (49,830 ) � $ (9,210 ) � $ (69,396 )
�

� � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table N - Reconciliation to GAAP Financial Measures
(Unaudited)
�
�
(In thousands, except share or per share information) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13
Total stockholders equity $ 4,271,390 $ 4,298,392 $ 4,626,150
Less: Preferred stock (50,160 ) (50,160 ) (50,160 )
Less: Goodwill (465,676 ) (461,246 ) (647,757 )
Less: Other intangibles � � (37,595 ) � � (37,777 ) � � (45,132 )
Total tangible common equity � $ 3,717,959 � � $ 3,749,209 � � $ 3,883,101 �
Total assets $ 33,094,172 $ 34,099,095 $ 35,749,333
Less: Goodwill (465,676 ) (461,246 ) (647,757 )
Less: Other intangibles � � (37,595 ) � � (37,777 ) � � (45,132 )
Total tangible assets � $ 32,590,901 � � $ 33,600,072 � � $ 35,056,444 �
Tangible common equity to tangible assets 11.41 % 11.16 % 11.08 %
Common shares outstanding at end of period 103,476,847 103,448,206 103,397,699
Tangible book value per common share � $ 35.93 � � $ 36.24 � � $ 37.56 �
�
�
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13
Common stockholders equity $ 4,221,230 $ 4,248,232 $ 4,575,990
Less: Unrealized losses (gains) on available-for-sale securities, net of tax[1] (8,465 ) 16,787 48,344
Less: Disallowed deferred tax assets[2] (589,518 ) (618,141 ) (626,570 )
Less: Disallowed goodwill and other intangible assets, net of deferred tax liability (447,770 ) (444,759 ) (643,185 )
Less: Aggregate adjusted carrying value of all non-financial equity investments (1,299 ) (1,462 ) (1,442 )

Add: Adjustment of pension and postretirement benefit plans and unrealized gains (losses) on cash flow hedges, net of tax[3]

205,505 102,279 104,302
Total Tier 1 common equity � $ 3,379,683 � � $ 3,302,936 � � $ 3,457,439 �
Tier 1 common equity to risk-weighted assets � �

15.92

% � � 14.74 % � � 14.83 %
�
[1] In accordance with regulatory risk-based capital guidelines, Tier 1 capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values. In arriving at Tier 1 capital, institutions are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax.
[2] Approximately $162 million of the Corporations $810 million of net deferred tax assets included as Other assets in the consolidated statement of financial condition at December 31, 2014 (September 30, 2014 - $147 million and $758 million, respectively; December 31, 2013 - $167 million and $762 million, respectively), were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $590 million of such assets at December 31, 2014 (September 30, 2014 - $618 million; December 31, 2013 - $627 million) exceeded the limitation imposed by these guidelines and, as disallowed deferred tax assets, were deducted in arriving at Tier 1 capital. The remaining $58 million of the Corporations other net deferred tax assets at December 31, 2014 (September 30, 2014 - $(7) million; December 31, 2013 - $(32) million) represented primarily the following items: (a) the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines; (b) the deferred tax asset corresponding to the pension liability adjustment recorded as part of accumulated other comprehensive income; and (c) the deferred tax liabilities associated with goodwill and other intangibles.
[3] The Federal Reserve Bank has granted interim capital relief for the impact of pension liability adjustment.
�

� � �
Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table O - Financial Information - Westernbank Covered Loans
(Unaudited)
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Revenues
Quarters ended
(In thousands) � 31-Dec-14 � 30-Sep-14 � Variance
Interest income on covered loans � $ 61,285 � � $ 68,251 � � $ (6,966 )
FDIC loss share expense:
Amortization of indemnification asset (28,948 ) (42,524 ) 13,576
Reversal of accelerated amortization in prior periods - 15,046 (15,046 )
80% mirror accounting on credit impairment losses [1] (3,287 ) 9,863 (13,150 )
80% mirror accounting on reimbursable expenses 18,742 15,545 3,197

80% mirror accounting on recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC

(2,542 ) (2,633 ) 91
Change in true-up payment obligation (2,831 ) 1,078 (3,909 )
Other � � 173 � � � (1,239 ) � � 1,412 �
Total FDIC loss share expense � � (18,693 ) � � (4,864 ) � � (13,829 )
Total revenues � � 42,592 � � � 63,387 � � � (20,795 )
Provision for loan losses � � (3,646 ) � � 12,463 � � � (16,109 )
Total revenues less provision for loan losses � $ 46,238 � � $ 50,924 � � $ (4,686 )
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[1]Reductions in expected cash flows for ASC 310-30 loans, which may impact the provision for loan losses, may consider reductions in both principal and interest cash flow expectations. The amount covered under the FDIC loss sharing agreements for interest not collected from borrowers is limited under the agreements (approximately 90 days); accordingly, these amounts are not subject fully to the 80% mirror accounting.
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Non-personnel operating expenses
Quarters ended
(In thousands) � 31-Dec-14 � 30-Sep-14 � Variance
Professional fees $ 7,167 $ 5,164 $ 2,003
OREO expenses 13,116 11,661 1,455
Other operating expenses � � 2,668 � � � 3,160 � � � (492 )
Total operating expenses � $ 22,951 � � $ 19,985 � � $ 2,966 �
Expense reimbursements from the FDIC may be recorded with a time lag, since these are claimed upon the event of loss or charge-off of the loans which may occur in a subsequent period.
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Quarterly average assets
Quarters ended
(In millions) � 31-Dec-14 � 30-Sep-14 � Variance
Covered loans $ 2,615 $ 2,727 $ (112 )
FDIC loss share asset � � 616 � � � 687 � � � (71 )
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Activity in the carrying amount and accretable yield of covered loans accounted for under ASC 310-30
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Quarters ended
� � 31-Dec-14 � 30-Sep-14
(In thousands) � Accretable yield � Carrying amount of loans � Accretable yield � Carrying amount of loans
Beginning balance $ 1,312,521 $ 2,528,433 $ 1,280,758 $ 2,610,664
Accretion (59,474 ) 59,474 (66,017 ) 66,017
Changes in expected cash flows 18,290 - 97,780 -
Collections / charge-offs � � - � � � (143,735 ) � � - � � � (148,248 )
Ending balance 1,271,337 2,444,172 1,312,521 2,528,433
Allowance for loan losses - ASC 310-30 covered loans � � - � � � (78,846 ) � � - � � � (85,640 )
Ending balance, net of allowance for loan losses � $ 1,271,337 � � $ 2,365,326 � � $ 1,312,521 � � $ 2,442,793 �
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Activity in the carrying amount of the FDIC indemnity asset
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Quarters ended
(In thousands) � � � � � 31-Dec-14 � � � � � 30-Sep-14
Balance at beginning of period $ 681,106 $ 751,553
Amortization (28,948 ) (42,524 )
Reversal of accelerated amortization in prior periods - 15,046
Credit impairment losses to be covered under loss sharing agreements (3,287 ) 9,863
Reimbursable expenses to be covered under loss sharing agreements 18,742 15,545
Payments from FDIC under loss sharing agreements (83,434 ) (73,106 )
Recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC � � � � � � 7,527 � � � � � � � 4,729 �
Balance at end of period � � � � � � 591,706 � � � � � � � 681,106 �
Balance due to the FDIC for recoveries on covered assets � � � � � � (49,252 ) � � � � � � (44,775 )
Net balance of indemnity asset and amounts due from the FDIC � � � � � $ 542,454 � � � � � � $ 636,331 �
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Activity in the remaining FDIC loss share asset amortization
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Quarters ended
(In thousands) � � � � � 31-Dec-14 � � � � � 30-Sep-14
Balance at beginning of period $ 66,562 $ 105,939
Amortization (28,948 ) (42,524 )
Impact of lower projected losses � � � � � � 15,481 � � � � � � � 3,147 �
Balance at end of period � � � � � $ 53,095 � � � � � � $ 66,562 �
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POPULAR, INC.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table P - Financial Information from Discontinued Operations
(Unaudited)
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Assets and Liabilities from Discontinued Operations
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(In thousands) � � � � � � � � � 31-Dec-14 � 30-Sep-14 � Variance
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Cash $ - $ 9,500 $ (9,500 )
Loans held-for-sale - 1,099,673 (1,099,673 )
Premises and equipment, net - 8,596 (8,596 )
Other assets � � � � � � � � � � - � � � 11,284 � � � (11,284 )
Total assets � � � � � � � � � $ - � � $ 1,129,053 � � $ (1,129,053 )
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Deposits $ - $ 1,089,046 $ (1,089,046 )
Other liabilities � � � � � � � � � � 5,064 � � � 17,716 � � � (12,652 )
Total liabilities � � � � � � � � � $ 5,064 � � $ 1,106,762 � � $ (1,101,698 )
Net (liabilities) assets � � � � � � � � � $ (5,064 ) � $ 22,291 � � $ (27,355 )
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Components of Net Income (Loss) from Discontinued Operations
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� � Quarters ended � Years ended
(In thousands) � 31-Dec-14 � 30-Sep-14 � 31-Dec-13 � 31-Dec-14 � 31-Dec-13
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Net interest income $ 4,441 $ 16,022 $ 21,834 $ 61,352 $ 88,006
Provision (reversal) for loan losses - - (2,198 ) (6,764 ) (3,543 )
Net gain on sale of regions 8,054 25,775 - 33,829 -
Other non-interest income � � 1,335 � � � 6,567 � � � 5,914 � � � 27,823 � � � 19,556 �
Total non-interest income � � 9,389 � � � 32,342 � � � 5,914 � � � 61,652 � � � 19,556 �
Operating expenses:
Personnel costs 3,765 11,941 7,955 36,675 33,170
Net occupancy expenses (2,785 ) (1,305 ) 3,325 3,086 12,680
Professional fees 2,030 4,916 2,642 15,642 11,153
Goodwill impairment charge - - - 186,511 -
Other operating expenses � � 1,734 � � � 3,054 � � � 4,171 � � � 10,834 � � � 13,593 �
Total operating expenses � � 4,744 � � � 18,606 � � � 18,093 � � � 252,748 � � � 70,596 �
Net income (loss) from discontinued operations � $ 9,086 � � $ 29,758 � � $ 11,853 � � $ (122,980 ) � $ 40,509 �
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POPULAR, INC.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table Q - Restructuring Charges
(Unaudited)
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Restructuring Charges
Quarters ended
(In thousands) � 31-Dec-14 � 30-Sep-14 � Variance
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Personnel costs $ 7,692 $ 6,194 $ 1,498
Net occupancy expenses 3,482 152 3,330
Equipment expenses 126 141 (15 )
Professional fees 1,254 1,431 (177 )
Communications 128 14 114
Other operating expenses � � 1,179 � � 358 � � 821 �
Total restructuring costs � $ 13,861 � $ 8,290 � $ 5,571 �
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Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table R - Adjusted Consolidated Statement of Operations for the Year Ended December 31, 2014 (Non-GAAP)
(Unaudited)
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� � Year ended
� � 31-Dec-14
� � � � � � 2nd QTR � 3rd QTR � 4th QTR � � � �
(In thousands) � Actual Results (US GAAP) � TARP repayment discount amortization and Income Tax adjustments [2] � BPNA Reorganization [3] � BPNA Reorganization [3] � Income Tax Adjustments [4] � Indemnification Assets Adjustment [5] � BPNA Reorganization [3] � Other Adjustments � Adjusted Results (Non-GAAP)
Net interest income $ 945,072 $ (414,068 ) $ - $ (20,663 ) $ - $ - $ (18,591 ) $ - $ 1,398,394
Provision for loan losses  non-covered loans 223,999 - - 11,950 - - 878 - 211,171
Provision for loan losses  covered loans [1] � � 46,135 � � � - � � � - � � � - � � � - � � � - � � - � � � - � � � 46,135 �
Net interest income after provision for loan losses � � 674,938 � � � (414,068 ) � � - � � � (32,613 ) � � - � � � - � � (19,469 ) � � - � � � 1,141,088 �
Service charges on deposit accounts and other service fees 383,902 - - - - - - - 383,902
Mortgage banking activities 30,615 - - - - - - - 30,615
Net loss and valuation adjustments on investments securities (870 ) - - - - - - - (870 )
Trading account profit 4,358 - - - - - - - 4,358
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale 40,591 - - - - - 1,684 - 38,907
Adjustments (expense) to indemnity reserves on loans sold (34,098 ) - - - - - - - (34,098 )
FDIC loss share expense (103,024 ) - - - - 12,492 - - (115,516 )
Other non-interest income � � 71,572 � � � - � � � - � � � - � � � - � � � - � � - � � � - � � � 71,572 �
Total non-interest income � � 393,046 � � � - � � � - � � � - � � � - � � � 12,492 � � 1,684 � � � - � � � 378,870 �
Personnel costs 418,679 - - - - - - 2,974[6] 415,705
Net occupancy expenses 86,707 - - - - - - 1,895[7] 84,812
Other taxes 56,918 - - - - - - - 56,918
Loss on early extinguishment of debt 532 - - - - - 532 - -
Professional fees 282,055 - - - - - - - 282,055
OREO expense 49,611 - - - - - - - 49,611
Restructuring costs 26,725 - 4,574 8,290 - - 13,861 - -
Other operating expenses � � 272,457 � � � - � � � - � � � - � � � - � � � - � � - � � � - � � � 272,457 �
Total operating expenses � � 1,193,684 � � � - � � � 4,574 � � � 8,290 � � � - � � � - � � 14,393 � � � 4,869 � � � 1,161,558 �
(Loss) income from continuing operations before income tax (125,700 ) (414,068 ) (4,574 ) (40,903 ) - 12,492 (32,178 ) (4,869 ) 358,400
Income tax expense (benefit) � � 60,802 � � � (15,393 ) � � - � � � - � � � 20,048 � � � 2,498 � � - � � � - � � � 53,649 �
(Loss) income from continuing operations � $ (186,502 ) � $ (398,675 ) � $ (4,574 ) � $ (40,903 ) � $ (20,048 ) � $ 9,994 � $ (32,178 ) � $ (4,869 ) � $ 304,751 �
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[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.
[2] Income tax adjustments include a benefit of approximately $23.4 million related to a Closing Agreement with the PR Department of Treasury, completed during the second quarter of 2014 and the negative impact of the deferred tax asset valuation allowance of approximately $8.0 million recorded at the Holding Company, due to the difference in the tax treatment of the interest expense related to the TARP funds and the newly issued $450 million senior notes.

[3] Includes the aggregated impact of $39.8 million refinancing fees of structured repos, net loss of $11.1 million in bulk loan sales and $26.7 million in restructuring incurred in connection with the reorganization of PCB.

[4] On July 1, 2014, the Government of Puerto Rico approved an amendment to the Internal Revenue Code, which, among things, changed the income tax rate for capital gains from 15% to 20%. As a result, the Corporation recognized an income tax expense of $20.0 million, mainly related to the deferred tax liability associated with the portfolio acquired from Westernbank.

[5] The FDIC indemnity assets amortization included a positive adjustment of $12.5 million to reverse the impact of accelerated amortization expense recorded in prior periods.

[6] Represents the impact of the compensation package granted upon separation of an officer of the Corporation equal to approximately $3.0 million.
[7] Represents the net loss on the early cancellation of a lease at BPNA of $1.9 million.

CONTACT:
Popular, Inc.
Investor Relations:
Brett Scheiner, 212-417-6721
Investor Relations Officer
or
Media Relations:
Teruca Rull�n, 787-281-5170
Mobile: 917-679-3596
Senior Vice President, Corporate Communications

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