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Popular, Inc. Announces Fourth Quarter Financial Results

January 26, 2016 8:01 AM

SAN JUAN, Puerto Rico--(BUSINESS WIRE)-- Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ: BPOP) reported net income of $137.4 million and adjusted net income of $98.3 million for the quarter ended December 31, 2015, compared to net income of $85.6 million and an adjusted net income of $93.4 million for the quarter ended September 30, 2015.

Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: “In 2015 we achieved several key milestones such as the Doral transactions and the completion of the restructuring of our U.S. operations. At the same time, we consistently delivered strong financial results despite the continued weakness of the Puerto Rico economy. The reinstatement of the quarterly dividend on our common stock demonstrates our confidence in our capital position and our revenue generation capacity going forward."

Earnings Highlights
(Unaudited) Quarters ended Years ended
(Dollars in thousands, except per share information) 31-Dec-15 30-Sep-15 31-Dec-14 31-Dec-15 31-Dec-14
Net interest income $352,500 $350,735 $326,861 $1,408,983 $945,072
Provision for loan losses 57,711 69,568 51,637 217,458 223,999

Provision (reversal) for loan losses - covered loans [1]

820 (2,890 ) (3,646 ) 24,020 46,135
Net interest income after provision for loan losses 293,969 284,057 278,870 1,167,505 674,938
FDIC loss-share income (expense) (4,359 ) 1,207 (18,693 ) 20,062 (103,024 )
Other non-interest income 136,797 129,902 122,057 499,479 489,539
Operating expenses 305,808 306,897 330,006 1,288,221 1,193,684
Income (loss) from continuing operations before income tax 120,599 108,269 52,228 398,825 (132,231 )
Income tax expense (benefit) (16,827 ) 22,620 12,472 (495,172 ) 58,279
Income (loss) from continuing operations 137,426 85,649 39,756 893,997 (190,510 )
(Loss) income from discontinued operations, net of tax - (9 ) 9,086 1,347 (122,980 )
Net income (loss) $137,426 $85,640 $48,842 $895,344 $(313,490 )
Net income (loss) applicable to common stock $136,495 $84,709 $47,911 $891,621 $(317,213 )
Net income (loss) per common share from continuing operations - Basic $1.32 $0.82 $0.38 $8.65 $(1.88 )
Net income (loss) per common share from continuing operations - Diluted $1.32 $0.82 $0.37 $8.64 $(1.88 )
Net income (loss) per common share from discontinued operations - Basic $- $- $0.09 $0.01 $(1.20 )
Net income (loss) per common share from discontinued operations - Diluted $- $- $0.09 $0.01 $(1.20 )
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement.

Doral Bank Transaction

During the fourth quarter of 2015, retrospective adjustments were made to the estimated fair values of the assets acquired and liabilities assumed from the FDIC as receiver for Doral Bank, during the first quarter of 2015 (the “Doral Bank Transaction”), to reflect new information obtained during the measurement period that existed as of the acquisition date, as defined by U.S. GAAP. This process led to a lower fair value of the assets acquired and to a corresponding increase in goodwill.

Refer to the following table for details of the above mentioned retrospective adjustments.

February 27, 2015 February 27, 2015
As recasted[a] As previously
(In thousands) reported[b] Change
Assets:
Loans $ 1,518,574 $ 1,665,756 $ (147,182 )
Goodwill 163,097 41,633 121,464
Core deposit intangible 12,810 23,572 (10,762 )
Receivable from the FDIC 480,137 [c] 441,721 38,416
Other assets 626,177 626,177 -
Total assets $ 2,800,795 $ 2,798,859 $ 1,936
Liabilities:
Deposits $ 2,203,391 $ 2,201,455 $ 1,936
Advances from the Federal Home Loan Bank 547,187 547,187 -
Other liabilities 50,217 50,217 -

Total liabilities

$ 2,800,795 $ 2,798,859 $ 1,936

[a] Amounts reported include retrospective adjustments during the measurement period, in accordance with U.S. GAAP, related to the Doral Bank Transaction.

[b] Amounts are presented as previously reported in the Form 10-Q as of September 30, 2015.
[c] Balances recasted include a reclassification of approximately $38.4 million of loans that were subsequently determined to be excluded from the Doral Bank Transaction and repurchased by the FDIC, to the Receivable from the FDIC.

The decline in the fair value of the loans is mainly attributed to higher estimated credit losses on the portfolio of taxi medallion loans acquired by BPNA, which had an unpaid principal balance of $248.6 million and a revised fair value of $154.9 million. This remeasurement resulted in a negative adjustment of approximately $76.9 million to this portfolio. The main factors that influenced the revised estimated credit losses included borrower concentration in the portfolio, review of collateral values and borrowers’ payment capacity after a more thorough due diligence process.

Adjusted results – Non GAAP

The following tables reflect the results of operations for the fourth and third quarters of 2015, with adjustments to exclude the impact of certain events.

Quarter ended
(Unaudited) 31-Dec-15
(In thousands)

Actual Results(U.S. GAAP)

BPNAReorganization [2]

Doral TransactionRemeasurement[3]

Bulk Loan Sale[4]

Impairment ofLoans UnderProposedPortfolio Sale[5]

Reversal of DTA– U.S.Operations[6]

AdjustedResults(Non-GAAP)

Net interest income $352,500 $- $1,952 $- $- $- $350,548
Provision for loan losses – non-covered loans 57,711 - - 5,852 5,064 - 46,795
Provision (reversal) for loan losses – covered loans [1] 820 - - - - - 820
Net interest income after provision for loan losses 293,969 - 1,952 (5,852 ) (5,064 ) - 302,933
Mortgage banking activities 23,430 - 833 - - - 22,597
FDIC loss-share (expense) income (4,359 ) - - - - (4,359 )
Other non-interest income 113,367 - - - - - 113,367
Total non-interest income 132,438 - 833 - - - 131,605
Personnel costs 119,221 - - - - - 119,221
Net occupancy expenses 20,616 - - - - - 20,616
Equipment expenses 16,035 - - - - - 16,035
Professional fees 77,854 - - - - - 77,854
Communications 6,759 - - - - - 6,759
Business promotion 15,162 - - - - - 15,162
Other real estate owned (OREO) expenses 9,997 - - - -

-

9,997
Amortization of intangibles 2,522 - (628 ) - -

-

3,150
Restructuring costs 1,004 1,004 - - - - -
Other operating expenses 36,638 - - - - - 36,638
Total operating expenses 305,808 1,004 (628 ) - - - 305,432
Income before income tax 120,599 (1,004 ) 3,413 (5,852 ) (5,064 ) - 129,106
Income tax (benefit) expense (16,827 ) - 731 (2,282 ) (1,975 ) (44,103 ) 30,802
Net income $137,426 $(1,004 ) $2,682 $(3,570 ) $(3,089 ) $44,103 $98,304
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement.
[2] Represents restructuring charges associated with the reorganization of BPNA.

[3] Represents the impact of the fair value adjustments, identified during the remeasurement period as defined by U.S. GAAP, related to the Doral Bank Transaction. The remeasurement adjustments impacted the fair value of the loan portfolio, deposit premium and the core deposit intangible, all of which were recorded against goodwill. During the fourth quarter of 2015, the related amortization of the loan discounts, deposit premium and the core deposit intangible were adjusted to reflect the balance as if the revised estimates of fair value were applied as of the Doral Bank Transaction date.

[4] Represents the impact of a bulk sale of loans at the BPPR segment, which had a book value of approximately $34.4 million.

[5] Represents additional impairment based on the estimated fair value of loans in the Westernbank transaction, that the Corporation has the intent to sell and are subject to the ongoing arbitration with the FDIC.

[6] Represents the partial reversal of the valuation allowance of a portion of the deferred tax asset at the U.S. operations. Refer to additional details on the Income Taxes section of this earnings release.

Quarter ended
(Unaudited) 30-Sep-15
(In thousands)

Actual Results(U.S. GAAP)

BPNAReorganization [2]

DoralTransaction[3]

MSRsAcquired[4]

Impairment ofLoans UnderProposedPortfolio Sale[5]

AdjustedResults(Non-GAAP)

Net interest income $350,735 $- $- $- $- $350,735
Provision for loan losses

69,568

- - - 10,126 59,442

Provision (reversal) for loan losses – covered loans [1]

(2,890 ) - - - - (2,890 )
Net interest income after provision for loan losses 284,057 - - - (10,126 ) 294,183
Mortgage banking activities 24,195 - 844 4,378 - 18,973
FDIC loss-share income 1,207 - - - - 1,207
Other non-interest income 105,707 - (10 ) - - 105,717
Total non-interest income 131,109 - 834 4,378 - 125,897
Personnel costs 120,863 - 806 - - 120,057
Net occupancy expenses 21,277 - 1,151 - - 20,126
Equipment expenses 14,739 - - - - 14,739
Professional fees 77,154 - 3,599 - - 73,555
Communications 6,058 - - - - 6,058
Business promotion 12,325 - 100 - - 12,225
Other real estate owned (OREO) expenses 7,686 - - - - 7,686
Amortization of intangibles 3,512 - - - - 3,512
Restructuring costs 481 481 - - - -
Other operating expenses 42,802 - - - - 42,802
Total operating expenses 306,897 481 5,656 - - 300,760
Income from continuing operations before income tax 108,269 (481 ) (4,822 ) 4,378 (10,126 ) 119,320
Income tax expense 22,620 - (1,050 ) 1,707 (3,949 ) 25,912
Income from continuing operations $85,649 $(481 ) $(3,772 ) $2,671 $(6,177 ) $93,408
Income from discontinued operations, net of tax $(9 ) $(9 ) $- $- $- $-
Net income $85,640 $(490 ) $(3,772 ) $2,671 $(6,177 ) $93,408
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement.
[2] Represents restructuring charges associated with the reorganization of BPNA.

[3] Includes approximately $0.8 million of fees charged for loan servicing cost to the FDIC, personnel costs related to former Doral Bank employees retained on a temporary basis and incentive compensation for an aggregate of $0.8 million, building rent expense of Doral Bank’s administrative offices for $1.2 million and professional fees and business promotion expenses directly associated with the Doral Bank Transaction and systems conversion for $3.7 million.

[4] Represents the fair value of mortgage servicing rights acquired for a portfolio previously serviced by Doral Bank, for which the Corporation acted as a backup servicer, under a pre-existing contract.

[5] Represents impairment based on the estimated fair value of loans acquired in the Westernbank transaction, that the Corporation has the intent to sell and are subject to the ongoing arbitration with the FDIC.

Quarters ended
(Unaudited) Adjusted Results Non-GAAP
(In thousands) 31-Dec-15 30-Sep-15 Variance
Net interest income $350,548 $350,735 $(187 )
Provision for loan losses – non-covered loans 46,795 59,442 (12,647 )
Provision (reversal) for loan losses – covered loans [1] 820 (2,890 ) 3,710
Net interest income after provision for loan losses 302,933 294,183 8,750
Mortgage banking activities 22,597 18,973 3,624
FDIC loss-share income (expense) (4,359 ) 1,207 (5,566 )
Other non-interest income 113,367 105,717 7,650
Total non-interest income 131,605 125,897 5,708
Personnel costs 119,221 120,057 (836 )
Net occupancy expenses 20,616 20,126 490
Equipment expenses 16,035 14,739 1,296
Professional fees 77,854 73,555 4,299
Communications 6,759 6,058 701
Business promotion 15,162 12,225 2,937
Other real estate owned (OREO) expenses 9,997 7,686 2,311
Amortization of intangibles 3,150 3,512 (362 )
Other operating expenses 36,638 42,802 (6,164 )
Total operating expenses 305,432 300,760 4,672
Income from continuing operations before income tax 129,106 119,320 9,786
Income tax expense 30,802 25,912 4,890
Income from continuing operations $98,304 $93,408 $4,896
Net income $98,304 $93,408 $4,896
[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 2015, the Corporation had net interest income of $352.5 million, compared to net interest income of $350.7 million for the previous quarter. The adjusted net interest income was $350.6 million, flat compared to the previous quarter. The net interest margin was 4.42% for the quarter. The adjusted net interest margin was 4.39%, also flat when compared to the previous quarter. Refer to the Adjusted Results – Non GAAP section for additional information on the adjusted net interest income.

The decrease of $0.1 million in the adjusted net interest income is mainly related to:

These negative variances in net interest income were offset in part by:

BPPR’s net interest income amounted to $305.1 million for the quarter ended December 31, 2015. The adjusted net interest income was $304.3 million, a decrease of $0.5 million when compared to the previous quarter. The impact of lower income from commercial and construction loans was offset by higher income from mortgage loans and lower borrowing costs, as discussed above, and lower expense on equity indexed IRA accounts. Net interest margin was 4.82%. The adjusted net interest margin was 4.80%, an increase of 5 basis points compared to 4.75% for the previous quarter, mainly due to lower borrowing costs.

BPNA’s net interest income was $62.9 million. The adjusted net interest income was of $61.7 million, compared with $62.4 million for the previous quarter. The decrease of $0.7 million in the net interest income is mainly driven by lower yields in the commercial portfolio and lower volumes of mortgage loans, as discussed above, which was partially offset by higher income from consumer loans by $1.4 million. Also, higher interest expense on deposits by $1.3 million, mainly for higher volume of non-brokered client related time deposits, contributed to the decrease in net interest income. Net interest margin was 3.86%. The adjusted net interest margin was of 3.79% compared to 3.91% for the previous quarter, a decrease of 12 basis points, mainly due to lower yields from commercial loans and higher cost of interest bearing deposits.

Non-interest income

Non-interest income was $132.4 million for the fourth quarter of 2015, an increase of $1.3 million when compared with the third quarter of 2015. Excluding the impact of the transactions detailed in the Adjusted Results Non-GAAP tables above, non-interest income increased by $5.7 million when compared to the third quarter of 2015, driven primarily by the following:

These increases were partially offset by:

Refer to Table B for further details.

Financial Impact of the 2010 FDIC-Assisted Transaction
(Unaudited) Quarters ended Years ended
(In thousands) 31-Dec-15 30-Sep-15 31-Dec-14 31-Dec-15 31-Dec-14

Income Statement

Interest income on WB loans $47,870 $47,982 $61,285 $208,779 $293,610
Total FDIC loss-share (expense) income (4,359 ) 1,207 (18,693 ) 20,062 (103,024 )
Provision for loan losses 7,817 20,206 (3,646 ) 54,113 46,135
Total revenues less provision for loan losses $35,694 $28,983 $46,238 $174,728 $144,451

Balance Sheet

Loans covered under loss-sharing agreements with FDIC $646,115 $665,428 $2,542,662
FDIC loss-share asset 310,221 311,946 542,454
FDIC true-up payment obligation 119,745 122,527 129,304

See additional details on accounting for the 2010 FDIC-Assisted transaction in Table O.

Operating expenses

Operating expenses of $305.8 million for the quarter decreased by $1.1 million when compared with the third quarter of 2015. Excluding the impact of the transactions detailed in the Adjusted Results Non-GAAP tables above, operating expenses increased by $4.7 million compared to the third quarter of 2015, 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 $14.4 million for the fourth quarter of 2015, compared with $12.7 million for the third quarter of 2015. The increase was principally due to higher OREO write-downs, as mentioned above.

Full-time equivalent employees were 7,810 as of December 31, 2015, compared with 7,840 as of September 30, 2015, and 7,752 as of December 31, 2014.

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

Income taxes

For the quarter ended December 31, 2015, the Corporation recorded an income tax benefit of $16.8 million, compared to an income tax expense of $22.6 million for the previous quarter. During the fourth quarter of 2015, the Corporation recorded a partial reversal of the valuation allowance on its deferred tax assets from the U.S. operations for approximately $44.1 million. This adjustment was incremental to the partial reversal of $544.9 million recorded during the second quarter of 2015 and was mainly related to a change in the estimate of the realizability of state and city deferred tax assets, as new information was considered after having completed the U.S. reorganization and the sources of income of the business acquired in connection with the Doral Bank Transaction. On an adjusted basis, the income tax expense for the fourth quarter of 2015 was $30.8 million, compared to $25.9 million for the previous quarter.

The effective income tax rate for the fourth quarter of 2015, on an adjusted basis, was 24%, compared to 22% for the previous quarter. The effective tax rate is impacted by the composition and source of the taxable income. In 2016, after taking effect for the partial deferred tax asset valuation reversal, the Corporation expects that the effective tax rate for the U.S. operations will be approximately 44%. Adjusting to an effective tax rate of 44% for the U.S. operations, and assuming the same earnings composition of this quarter, the adjusted effective income tax rate for the Corporation’s consolidated results for the fourth quarter of 2015 would have been 30%.

Credit Quality

Overall, the Corporation continued to exhibit a stable credit performance in a challenging operating environment given the continuing weakness in the Puerto Rico economy. During the fourth quarter of 2015, credit metrics were impacted by a few specific large borrowers and the bulk sale of commercial loans amounting to $34.4 million. The Corporation continues to closely monitor the performance of its portfolios and is focused in taking measures to minimize risks.

Non-Performing Assets
(Unaudited)
(In thousands) 31-Dec-15 30-Sep-15 31-Dec-14
Total non-performing loans held-in-portfolio, excluding covered loans $601,799 $634,902 $630,483
Non-performing loans held-for-sale 45,169 47,681 18,899
Other real estate owned (“OREO”), excluding covered OREO 155,231 155,826 135,500
Total non-performing assets, excluding covered assets 802,199 838,409 784,882
Covered loans and OREO 40,571 39,888 148,099
Total non-performing assets $842,770 $878,297 $932,981
Net charge-offs for the quarter (excluding covered loans) $82,870 $46,302 $50,187
Ratios (excluding covered loans):
Non-covered loans held-in-portfolio $22,346,115 $22,498,066 $19,404,451
Non-performing loans held-in-portfolio to loans held-in-portfolio 2.69 % 2.82 % 3.25 %
Allowance for loan losses to loans held-in-portfolio 2.25 2.38 2.68
Allowance for loan losses to non-performing loans, excluding loans held-for-sale 83.57 84.42 82.43
Refer to Table H for additional information.
Provision for Loan Losses
(Unaudited) Quarters ended Years ended
(In thousands) 31-Dec-15 30-Sep-15 31-Dec-14 31-Dec-15 31-Dec-14
Provision (reversal) for loan losses:
BPPR $55,635 $68,755 $52,206 $216,832 $242,849
BPNA 2,076 813 (569 ) 626 (18,850 )
Total provision for loan losses $57,711 $69,568 $51,637 $217,458 $223,999
Provision (reversal) for loan losses - covered loans 820 (2,890 ) (3,646 ) 24,020 46,135
Total provision for loan losses $58,531 $66,678 $47,991 $241,478 $270,134

Credit Quality by Segment
(Unaudited)
(In thousands)

Quarters ended

BPPR 31-Dec-15 30-Sep-15 31-Dec-14
Provision for loan losses $55,635 $68,755 $52,206
Net charge-offs 82,011 47,245 52,523
Total non-performing loans held-in-portfolio, excluding covered loans 574,834 609,469 611,383
Allowance / non-covered loans held-in-portfolio 2.67 % 2.83 % 3.07 %

Quarters ended

BPNA 31-Dec-15 30-Sep-15 31-Dec-14
Provision (reversal) for loan losses $2,076 $813 $(569 )
Net charge-offs (recoveries) 859 (943 ) (2,336 )
Total non-performing loans held-in-portfolio 26,965 25,433 19,100
Allowance / non-covered loans held-in-portfolio 0.69 % 0.68 % 0.88 %
Financial Condition Highlights
(Unaudited)
(In thousands) 31-Dec-15 30-Sep-15 31-Dec-14
Money market, trading and investment securities $8,587,894 $8,321,397 $7,541,148
Loans not covered under loss-sharing agreements with the FDIC 22,346,115 22,498,066 19,404,451
Loans covered under loss-sharing agreements with the FDIC 646,115 665,428 2,542,662
Total assets 35,769,534 35,530,794 33,096,695
Deposits 27,209,723 26,713,206 24,807,535
Borrowings 2,433,654 2,761,476 3,004,685
Liabilities from discontinued operations 1,815 1,800 5,064
Total liabilities 30,664,210 30,481,158 28,829,313
Stockholders’ equity 5,105,324 5,049,636 4,267,382

Total assets increased by $238.7 million from the third quarter of 2015 driven by:

This increase was partially offset by:

Total liabilities increased by $183.0 million from the third quarter of 2015, driven by:

This increase was partially offset by:

Stockholders’ equity increased by approximately $55.7 million from the third quarter of 2015, mainly as a result of net income for the quarter of $137.4 million, net of a reduction of $15.5 million related to the quarterly cash dividend of $0.15 per share declared on the outstanding common stock and preferred dividends of $0.9 million, and an increase in accumulated other comprehensive loss of $67.1 million, principally due to higher unrealized losses on securities available-for-sale by $52.4 million and $16.0 million related to the adjustment of pension and postretirement benefit plans, net of tax.

Common equity tier-1 ratio and tangible book value per share were 16.21% and $42.18, respectively, at December 31, 2015 compared to 16.21% and $42.71 at September 30, 2015. The re-measurement of goodwill on the Doral Bank Transaction reduced tangible book value per share by $1.06. Refer to Table A for capital ratios.

Refer to Table C for the Statements of Financial Condition.

Forward-Looking Statements

The information contained in this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that may cause the Corporation's actual results to differ materially from any future results expressed or implied by such forward-looking statements. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2014, the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015 and our other filings with the SEC for a discussion of those factors that could impact our future results. Other than to the extent required by applicable law, the Corporation undertakes no obligation to publicly update or revise any forward-looking statement to reflect 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 Corporation’s website: www.popular.com.

Popular will hold a conference call to discuss the financial results today Tuesday, January 26, 2016 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 Corporation’s 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 Popular’s website. A telephone replay will be available one hour after the end of the conference call through Friday, February 26, 2016. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10077993.

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table A - Selected Ratios and Other Information
Table B - Consolidated Statement of Operations
Table C - Consolidated Statement of Financial Condition
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE
Table F - Mortgage Banking Activities and Other Service Fees
Table G - Loans and Deposits
Table H - Non-Performing Assets
Table I - Activity in Non-Performing Loans
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS
Table N - Reconciliation to GAAP Financial Measures
Table O - Financial Information - Westernbank Loans
Table P - Restructuring Charges
Table Q - Adjusted Consolidated Statement of Operations for the Years Ended December 31, 2015 and 2014 (Non-GAAP)

POPULAR, INC.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table A - Selected Ratios and Other Information
(Unaudited)
Quarters ended Years ended
31-Dec-15 30-Sep-15 31-Dec-14 31-Dec-15 31-Dec-14
Basic EPS from continuing operations $1.32 $0.82 $0.38 $8.65 $(1.88 )
Basic EPS from discontinued operations $- $- $0.09 $0.01 $(1.20 )
Total Basic EPS $1.32 $0.82 $0.47 $8.66 $(3.08 )
Diluted EPS from continuing operations $1.32 $0.82 $0.37 $8.64 $(1.88 )
Diluted EPS from discontinued operations $- $- $0.09 $0.01 $(1.20 )
Total Diluted EPS $1.32 $0.82 $0.46 $8.65 $(3.08 )
Average common shares outstanding 103,098,249 102,969,214 102,859,416 102,967,186 102,848,792
Average common shares outstanding - assuming dilution 103,259,503 103,150,482 103,166,349 103,124,309 102,848,792
Common shares outstanding at end of period 103,618,976 103,556,285 103,476,847 103,618,976 103,476,847
Market value per common share $28.34 $30.23 $34.05 $28.34 $34.05
Market capitalization - (In millions) $2,937 $3,131 $3,523 $2,937 $3,523
Return on average assets 1.53 % 0.95 % 0.58 % 2.54 % (0.89 )%
.
Return on average common equity 10.77 % 6.79 % 4.41 % 19.16 % (7.04 )%
Net interest margin [1] 4.39 % 4.39 % 4.70 % 4.48 % 4.67 %
Common equity per share $48.79 $48.28 $40.76 $48.79 $40.76
Tangible common book value per common share (non-GAAP) $42.18 $42.71 $35.89 $42.18 $35.89
Tangible common equity to tangible assets (non-GAAP) 12.46 % 12.65 % 11.39 % 12.46 % 11.39 %
Tier 1 capital [2]

16.21

% 16.21 % 18.13 %

16.21

% 18.13 %
Total capital [2]

18.78

% 18.78 % 19.41 %

18.78

% 19.41 %
Tier 1 leverage [2] 11.82 % 11.75 % 11.94 % 11.82 % 11.94 %
Common equity to Tier 1 capital [2]

16.21

% 16.21 % 15.89 %

16.21

% 15.89 %

[1] Not on a taxable equivalent basis. For the quarter ended December 31, 2015 excludes the impact of $1.9 million of Doral fair value remeasurement adjustment. U.S. GAAP net interest margin was 4.42% for the fourth quarter, compared with 4.39% for the previous quarter. For the quarter ended December 31, 2014 excludes the impact of $18.6 million fees related to repos refinancing at BPNA. U.S. GAAP net interest margin was 4.45% for the fourth quarter of 2014. For the year ended December 31, 2014, excludes the impact of $39.2 million and $414.1 million, respectively, related to repos refinancing at BPNA and the accelerated amortization of the TARP discount. The U.S. GAAP net interest margin was 3.16% for the year ended December 31, 2014. Refer to Tables D & E for reconciliation.

[2] Ratios for the quarters ending December 31, 2015 and September 30, 2015 were calculated based on Basel III Rules, while ratios for the previous periods were calculated based on the then applicable Basel I rules. Capital ratios for the current quarter are preliminary.

POPULAR, INC.
Financial Supplement to Fourth Quarter 2015 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-15 30-Sep-15

Q4 2015vs. Q3 2015

31-Dec-14

Q4 2015vs. Q4 2014

31-Dec-15 31-Dec-14
Interest income:
Loans $364,484 $364,458 $26 $357,570 $6,914 $1,458,706 $1,478,750
Money market investments 1,949 2,003 (54 ) 1,113 836 7,243 4,224
Investment securities 32,795 31,671 1,124 30,361 2,434 126,064 132,631
Trading account securities 2,129 3,150 (1,021 ) 2,891 (762 ) 11,001 17,938
Total interest income 401,357 401,282 75 391,935 9,422 1,603,014 1,633,543
Interest expense:
Deposits 27,054 28,357 (1,303 ) 25,473 1,581 107,533 105,087
Short-term borrowings 1,693 2,222 (529 ) 20,489 (18,796 ) 7,512 67,376
Long-term debt 20,110 19,968 142 19,112 998 78,986 516,008
Total interest expense 48,857 50,547 (1,690 ) 65,074 (16,217 ) 194,031 688,471
Net interest income 352,500 350,735 1,765 326,861 25,639 1,408,983 945,072
Provision for loan losses - non-covered loans 57,711 69,568 (11,857 ) 51,637 6,074 217,458 223,999
Provision (reversal) for loan losses - covered loans 820 (2,890 ) 3,710 (3,646 ) 4,466 24,020 46,135
Net interest income after provision for loan losses 293,969 284,057 9,912 278,870 15,099 1,167,505 674,938
Service charges on deposit accounts 39,993 40,960 (967 ) 39,456 537 160,108 158,637
Other service fees 66,928 56,115 10,813 61,140 5,788 236,090 225,265
Mortgage banking activities 23,430 24,195 (765 ) 8,747 14,683 81,802 30,615
Net gain (loss) and valuation adjustments on investment securities - 136 (136 ) 893 (893 ) 141 (870 )
Other-than-temporary impairment losses on investment securities - - - - - (14,445 ) -
Trading account (loss) profit (1,631 ) (398 ) (1,233 ) 586 (2,217 ) (4,723 ) 4,358
Net (loss) gain on sale of loans, including valuation adjustments on loans held-for-sale (60 ) - (60 ) 10,946 (11,006 ) 542 40,591
Adjustments (expense) to indemnity reserves on loans sold (8,647 ) (5,874 ) (2,773 ) (13,348 ) 4,701 (18,628 ) (40,629 )
FDIC loss-share (expense) income (4,359 ) 1,207 (5,566 ) (18,693 ) 14,334 20,062 (103,024 )
Other operating income 16,784 14,768 2,016 13,637 3,147 58,592 71,572
Total non-interest income 132,438 131,109 1,329 103,364 29,074 519,541 386,515
Operating expenses:
Personnel costs
Salaries 77,578 78,193 (615 ) 71,899 5,679 304,618 281,252
Commissions, incentives and other bonuses 18,015 18,618 (603 ) 18,439 (424 ) 79,305 59,138
Pension, postretirement and medical insurance 10,393 12,578 (2,185 ) 6,901 3,492 44,059 32,416
Other personnel costs, including payroll taxes 13,235 11,474 1,761 13,497 (262 ) 49,537 45,873
Total personnel costs 119,221 120,863 (1,642 ) 110,736 8,485 477,519 418,679
Net occupancy expenses 20,616 21,277 (661 ) 23,877 (3,261 ) 86,888 86,707
Equipment expenses 16,035 14,739 1,296 13,091 2,944 60,110 48,917
Other taxes 10,159 9,951 208 14,343 (4,184 ) 39,797 56,918
Professional fees 77,854 77,154 700 80,383 (2,529 ) 308,985 282,055
Communications 6,759 6,058 701 6,119 640 25,146 25,684
Business promotion 15,162 12,325 2,837 13,530 1,632 52,076 54,016
FDIC deposit insurance 5,386 7,300 (1,914 ) 9,338 (3,952 ) 27,626 40,307
Loss on early extinguishment of debt - - - 532 (532 ) - 532
Other real estate owned (OREO) expenses 9,997 7,686 2,311 20,016 (10,019 ) 85,568 49,611
Credit and debit card processing, volume, interchange and other expenses 5,822 6,449 (627 ) 5,093 729 22,854 21,588
Other operating expenses 15,271 19,102 (3,831 ) 17,004 (1,733 ) 72,221 73,785
Amortization of intangibles 2,522 3,512 (990 ) 2,083 439 11,019 8,160
Restructuring costs 1,004 481 523 13,861 (12,857 ) 18,412 26,725
Total operating expenses 305,808 306,897 (1,089 ) 330,006 (24,198 ) 1,288,221 1,193,684
Income (loss) from continuing operations before income tax 120,599 108,269 12,330 52,228 68,371 398,825 (132,231 )
Income tax (benefit) expense (16,827 ) 22,620 (39,447 ) 12,472 (29,299 ) (495,172 ) 58,279
Income (loss) from continuing operations 137,426 85,649 51,777 39,756 97,670 893,997 (190,510 )
(Loss) income from discontinued operations, net of tax - (9 ) 9 9,086 (9,086 ) 1,347 (122,980 )
Net income (loss) $137,426 $85,640 $51,786 $48,842 $88,584 $895,344 $(313,490 )
Net income (loss) applicable to common stock $136,495 $84,709 $51,786 $47,911 $88,584 $891,621 $(317,213 )
Net income (loss) per common share - basic:
Net income (loss) from continuing operations $1.32 $0.82 $0.50 $0.38 $0.94 $8.65 $(1.88 )
Net income (loss) from discontinued operations - - - 0.09 (0.09 ) 0.01 (1.20 )
Net income (loss) per common share - basic $1.32 $0.82 $0.50 $0.47 $0.85 $8.66 $(3.08 )
Net income (loss) per common share - diluted:
Net income (loss) from continuing operations $1.32 $0.82 $0.50 $0.37 $0.95 $8.64 $(1.88 )
Net income (loss) from discontinued operations - - - 0.09 (0.09 ) 0.01 (1.20 )
Net income (loss) per common share - diluted $1.32 $0.82 $0.50 $0.46 $0.86 $8.65 $(3.08 )
Dividends Declared per Common Share $0.15 $0.15 $- $- $0.15

$0.30

$-

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table C - Consolidated Statement of Financial Condition
(Unaudited)
Variance
Q4 2015 vs.
(In thousands) 31-Dec-15 30-Sep-15 31-Dec-14 Q3 2015
Assets:
Cash and due from banks $363,674 $320,555 $381,095 $43,119
Money market investments 2,180,092 2,408,571 1,822,386 (228,479 )
Trading account securities, at fair value 71,659 137,943 138,527 (66,284 )
Investment securities available-for-sale, at fair value 6,062,992 5,500,931 5,315,159 562,061
Investment securities held-to-maturity, at amortized cost 100,903 100,295 103,170 608
Other investment securities, at lower of cost or realizable value 172,248 173,657 161,906 (1,409 )
Loans held-for-sale, at lower of cost or fair value 137,000 171,019 106,104 (34,019 )
Loans held-in-portfolio:
Loans not covered under loss-sharing agreements with the FDIC 22,453,813 22,601,271 19,498,286 (147,458 )
Loans covered under loss-sharing agreements with the FDIC 646,115 665,428 2,542,662 (19,313 )
Less: Unearned income 107,698 103,205 93,835 4,493

Allowance for loan losses

537,111 570,514 601,792 (33,403 )
Total loans held-in-portfolio, net 22,455,119 22,592,980 21,345,321 (137,861 )
FDIC loss-share asset 310,221 311,946 542,454 (1,725 )
Premises and equipment, net 502,611 495,103 494,581 7,508
Other real estate not covered under loss-sharing agreements with the FDIC 155,231 155,826 135,500 (595 )
Other real estate covered under loss-sharing agreements with the FDIC 36,685 35,701 130,266 984
Accrued income receivable 124,234 118,044 121,818 6,190
Mortgage servicing assets, at fair value 211,405 210,851 148,694 554
Other assets 2,200,963 2,221,054 1,646,443 (20,091 )
Goodwill 626,388 504,925 465,676 121,463
Other intangible assets 58,109 71,393 37,595 (13,284 )
Total assets $35,769,534 $35,530,794 $33,096,695 $238,740
Liabilities and Stockholders’ Equity:
Liabilities:
Deposits:
Non-interest bearing $6,401,515 $6,070,719 $5,783,748 $330,796
Interest bearing 20,808,208 20,642,487 19,023,787 165,721
Total deposits 27,209,723 26,713,206 24,807,535 496,517
Federal funds purchased and assets sold under agreements to repurchase 762,145 1,085,765 1,271,657 (323,620 )
Other short-term borrowings 1,200 1,200 21,200 -
Notes payable 1,670,309 1,674,511 1,711,828 (4,202 )
Other liabilities 1,019,018 1,004,676 1,012,029 14,342
Liabilities from discontinued operations 1,815 1,800 5,064 15
Total liabilities 30,664,210 30,481,158 28,829,313 183,052
Stockholders’ equity:
Preferred stock 50,160 50,160 50,160 -
Common stock 1,038 1,037 1,036 1
Surplus 4,229,156 4,200,805 4,196,458 28,351
Retained earnings 1,087,957 993,309 253,717 94,648
Treasury stock (6,101 ) (5,869 ) (4,117 ) (232 )
Accumulated other comprehensive loss (256,886 ) (189,806 ) (229,872 ) (67,080 )
Total stockholders’ equity 5,105,324 5,049,636 4,267,382 55,688
Total liabilities and stockholders’ equity $35,769,534 $35,530,794 $33,096,695 $238,740

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER
(Unaudited)
Quarter ended Quarter ended Quarter ended Variance Variance
31-Dec-15 30-Sep-15 31-Dec-14 Q4 2015 vs. Q3 2015 Q4 2015 vs. Q4 2014
($ amounts in millions; yields not on a taxable equivalent basis)

Averagebalance

Income /Expense

Yield /Rate

Averagebalance

Income /Expense

Yield /Rate

Averagebalance

Income /Expense

Yield /Rate

Averagebalance

Income /Expense

Yield /Rate

Averagebalance

Income /Expense

Yield /Rate

Assets:
Interest earning assets:
Money market, trading and investment securities $8,602 $36.9 1.71 % $8,667 $36.8 1.70 % $7,220 $34.4 1.90 % ($65 ) $0.1 0.01 % $1,382 $2.5 (0.19 ) %
Loans not covered under loss-sharing agreements with the FDIC:
Commercial 8,936 107.4 4.77 8,769 109.6 4.96 8,219 101.9 4.92 167 (2.2 ) (0.19 ) 717 5.5 (0.15 )
Construction 662 9.8 5.88 681 10.8 6.30 233 3.8 6.41 (19 ) (1.0 ) (0.42 ) 429 6.0 (0.53 )
Mortgage 6,947 90.6 5.22 7,072 88.8 5.02 6,538 84.1 5.15 (125 ) 1.8 0.20 409 6.5 0.07
Consumer 3,819 97.6 10.13 3,811 97.2 10.12 3,884 96.6 9.86 8 0.4 0.01 (65 ) 1.0 0.27
Lease financing 611 10.6 6.97 594 10.0 6.75 555 9.9 7.11 17 0.6 0.22 56 0.7 (0.14 )
Total loans (excluding WB loans) 20,975 316.0 5.99 20,927 316.4 6.02 19,429 296.3 6.07 48 (0.4 ) (0.03 ) 1,546 19.7 (0.08 )
WB loans 2,156 47.9 8.82 2,221 48.0 8.59 2,615 61.3 9.31 (65 ) (0.1 ) 0.23 (459 ) (13.4 ) (0.49 )
Total loans 23,131 363.9 6.26 23,148 364.4 6.26 22,044 357.6 6.45 (17 ) (0.5 ) - 1,087 6.3 (0.19 )
Total interest earning assets 31,733 $400.8 5.02 % 31,815 $401.2 5.02 % 29,264 $392.0 5.33 % (82 ) ($0.4 ) - % 2,469 $8.8 (0.31 ) %
Allowance for loan losses (573 ) (559 ) (618 ) (14 ) 45
Other non-interest earning assets 4,416 4,584 4,171 (168 ) 245
Assets from discontinued operations - - 491 - (491 )
Total average assets $35,576 $35,840 $33,308 $(264 ) $2,268
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market $5,547 $5.1 0.36 % $5,742 $4.9 0.34 % $4,788 $4.0 0.33 % $(195 ) $0.2 0.02 % $759 $1.1 0.03 %
Savings 7,119 4.1 0.23 7,055 4.1 0.23 6,788 3.8 0.22 64 - - 331 0.3 0.01
Time deposits 8,192 19.2 0.93 8,158 19.4 0.94 7,409 17.7 0.95 34 (0.2 ) (0.01 ) 783 1.5 (0.02 )
Total interest bearing deposits 20,858 28.4 0.54 20,955 28.4 0.54 18,985 25.5 0.53 (97 ) - - 1,873 2.9 0.01
Borrowings[1] 2,439 21.8 3.57 2,861 22.1 3.09 2,992 21.0 2.80 (422 ) (0.3 ) 0.48 (553 ) 0.8 0.77
Total interest bearing liabilities 23,297 50.2 0.86 23,816 50.5 0.84 21,977 46.5 0.84 (519 ) (0.3 ) 0.02 1,320 3.7 0.02
Net interest spread 4.16 % 4.18 % 4.49 % (0.02 ) % (0.33 ) %
Non-interest bearing deposits 6,246 6,144 5,636 102 610
Other liabilities 953 876 849 77 104
Liabilities from discontinued operations 2 2 486 - (484 )
Stockholders' equity 5,078 5,002 4,360 76 718
Total average liabilities and stockholders' equity $35,576 $35,840 $33,308 $(264 ) $2,268
Adjusted net interest income / margin non-taxable equivalent basis $350.6 4.39 % $350.7 4.39 % $345.5 4.70 % ($0.1 ) - % $5.1 (0.31 ) %
Doral fair value remeasurement adjustment 1.9 - - 1.9 1.9
Impact of fees related to repos refinancing - - 18.6 - (18.6 )
Net interest income / margin non-taxable equivalent basis $352.5 4.42 % $350.7 4.39 % $326.9 4.45 % $1.8 0.03 % $25.6 (0.03 ) %
(1) Borrowing expense for the fourth quarter of 2014, including the fees related to repos financing, was 5.27%.

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE
(Unaudited)
Year ended Year ended
31-Dec-15 31-Dec-14 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 $8,406 $144.3 1.72 % $7,530 $154.8 2.06 % $876 ($10.5 ) (0.34 ) %
Loans not covered under loss-sharing agreements with the FDIC:
Commercial 8,705 424.8 4.88 8,347 404.4 4.85 358 20.4 0.03
Construction 616 36.7 5.96 199 13.5 6.78 417 23.2 (0.82 )
Mortgage 6,978 360.4 5.16 6,641 340.4 5.12 337 20.0 0.04
Consumer 3,824 387.2 10.13 3,861 386.7 10.01 (37 ) 0.5 0.12
Lease financing 589 40.8 6.91 548 40.1 7.33 41 0.7 (0.42 )
Total loans (excluding WB loans) 20,712 1,249.9 6.03 19,596 1,185.1 6.05 1,116 64.8 (0.02 )
WB loans 2,333 208.8 8.95 2,771 293.6 10.60 (438 ) (84.8 ) (1.65 )
Total loans 23,045 1,458.7 6.33 22,367 1,478.7 6.61 678 (20.0 ) (0.28 )
Total interest earning assets 31,451 $1,603.0 5.10 % 29,897 $1,633.5 5.46 % 1,554 ($30.5 ) (0.36 ) %
Allowance for loan losses (585 ) (623 ) 38
Other non-interest earning assets 4,320 4,466 (146 )
Assets from discontinued operations - 1,442 (1,442 )
Total average assets $35,186 $35,182 $4
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market $5,447 $19.0 0.35 % $4,824 $15.5 0.32 % $623 $3.5 0.03 %
Savings 7,027 16.2 0.23 6,733 14.7 0.22 294 1.5 0.01
Time deposits 8,158 72.3 0.89 7,556 74.9 0.99 602 (2.6 ) (0.10 )
Total interest bearing deposits 20,632 107.5 0.52 19,113 105.1 0.55 1,519 2.4 (0.03 )
Borrowings [1] 2,757 86.5 3.14 3,514 130.0 3.70 (757 ) (43.5 ) (0.56 )
Total interest bearing liabilities 23,389 194.0 0.83 22,627 235.1 1.04 762 (41.1 ) (0.21 )
Net interest spread 4.27 % 4.42 % (0.15 ) %
Non-interest bearing deposits 6,147 5,534 613
Other liabilities 944 879 65
Liabilities from discontinued operations 2 1,586 (1,584 )
Stockholders' equity 4,704 4,556 148
Total average liabilities and stockholders' equity $35,186 $35,182 $4
Adjusted net interest income / margin non-taxable equivalent basis $1,409.0 4.48 % $1,398.4 4.67 % $10.6 (0.19 ) %
Impact of fees related to repos refinancing - 39.2 (39.2 )
Accelerated amortization TARP discount and related deferred costs - 414.1 (414.1 )
Net interest income / margin non-taxable equivalent basis $1,409.0 4.48 % $945.1 3.16 % $463.9 1.32 %
(1) Borrowing expense for 2014 including the fees related to repo refinancing and the impact of the accelerated TARP amortization was 16.60%.

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table F - Mortgage Banking Activities and Other Service Fees
(Unaudited)
Mortgage Banking Activities Variance
Quarters ended

Q4 2015 vs.

Q4 2015 vs.

Years ended Variance
(In thousands) 31-Dec-15 30-Sep-15 31-Dec-14 Q3 2015 Q4 2014 31-Dec-15 31-Dec-14

2015 vs. 2014

Mortgage servicing fees, net of fair value adjustments:
Mortgage servicing fees $15,504 $17,020 $9,364 $(1,516 ) $6,140 $59,461 $41,761 $17,700
Mortgage servicing rights fair value adjustments (2,096 ) 1,038 (6,259 ) (3,134 ) 4,163 (7,904 ) (24,683 ) 16,779
Total mortgage servicing fees, net of fair value adjustments 13,408 18,058 3,105 (4,650 ) 10,303 51,557 17,078 34,479
Net gain on sale of loans, including valuation on loans held-for-sale 10,337 9,698 8,382 639 1,955 35,336 31,213 4,123
Trading account loss:
Unrealized gains (losses) on outstanding derivative positions 27 (69 ) (1 ) 96 28 17 (726 ) 743
Realized (losses) gains on closed derivative positions (342 ) (3,492 ) (2,739 ) 3,150 2,397 (5,108 ) (16,950 ) 11,842
Total trading account loss (315 ) (3,561 ) (2,740 ) 3,246 2,425 (5,091 ) (17,676 ) 12,585
Total mortgage banking activities $23,430 $24,195 $8,747 $(765 ) $14,683 $81,802 $30,615 $51,187
Other Service Fees Variance
Quarters ended

Q4 2015 vs.

Q4 2015 vs.

Years ended Variance
(In thousands) 31-Dec-15 30-Sep-15 31-Dec-14 Q3 2015 Q4 2014 31-Dec-15 31-Dec-14

2015 vs. 2014

Other service fees:
Debit card fees $11,768 $11,288 $10,929 $480 $839 $46,176 $43,146 $3,030
Insurance fees 23,813 14,517 17,711 9,296 6,102 63,976 54,158 9,818
Credit card fees 17,528 16,879 17,493 649 35 68,166 67,639 527
Sale and administration of investment products 5,578 5,737 7,193 (159 ) (1,615 ) 23,846 27,711 (3,865 )
Trust fees 4,947 4,403 4,469 544 478 18,866 18,209 657
Other fees 3,294 3,291 3,345 3 (51 ) 15,060 14,402 658
Total other service fees $66,928 $56,115 $61,140 $10,813 $5,788 $236,090 $225,265 $10,825

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table G - Loans and Deposits
(Unaudited)
Loans - Ending Balances
Variance
(In thousands) 31-Dec-15 30-Sep-15 31-Dec-14

Q4 2015 vs.Q3 2015

Q4 2015 vs.Q4 2014

Loans not covered under FDIC loss-sharing agreements:
Commercial $10,099,163 $10,130,424 $8,134,267 $(31,261 ) $1,964,896
Construction 681,106 692,492 251,820 (11,386 ) 429,286
Legacy [1] 64,436 67,974 80,818 (3,538 ) (16,382 )
Lease financing 627,650 606,927 564,389 20,723 63,261
Mortgage 7,036,081 7,165,479 6,502,886 (129,398 ) 533,195
Consumer 3,837,679 3,834,770 3,870,271 2,909 (32,592 )
Total non-covered loans held-in-portfolio $22,346,115 $22,498,066 $19,404,451 $(151,951 ) $2,941,664
Loans covered under FDIC loss-sharing agreements 646,115 665,428 2,542,662 (19,313 ) (1,896,547 )
Total loans held-in-portfolio $22,992,230 $23,163,494 $21,947,113 $(171,264 ) $1,045,117
Loans held-for-sale:
Commercial $45,074 $47,447 $309 $(2,373 ) $44,765
Construction 95 10 - 85 95
Legacy [1] - - 319 - (319 )
Mortgage 91,831 123,562 100,166 (31,731 ) (8,335 )
Consumer - - 5,310 - (5,310 )
Total loans held-for-sale $137,000 $171,019 $106,104 $(34,019 ) $30,896
Total loans $23,129,230 $23,334,513 $22,053,217 $(205,283 ) $1,076,013
[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.
Deposits - Ending Balances
Variance
(In thousands) 31-Dec-15 30-Sep-15 31-Dec-14

Q4 2015 vs.Q3 2015

Q4 2015 vs.Q4 2014

Demand deposits [1] $7,221,238 $7,027,672 $6,606,060 $193,566 $615,178
Savings, NOW and money market deposits (non-brokered) 11,440,693 11,178,357 10,320,782 262,336 1,119,911
Savings, NOW and money market deposits (brokered) 382,424 405,903 406,248 (23,479 ) (23,824 )
Time deposits (non-brokered) 7,274,157 6,870,816 5,960,401 403,341 1,313,756
Time deposits (brokered CDs) 891,211 1,230,458 1,514,044 (339,247 ) (622,833 )
Total deposits $27,209,723 $26,713,206 $24,807,535 $496,517 $2,402,188
[1] Includes interest and non-interest bearing demand deposits.

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table H - Non-Performing Assets
(Unaudited)
Variance
(Dollars in thousands) 31-Dec-15

As a % ofloans HIP bycategory

30-Sep-15

As a % ofloans HIP bycategory

31-Dec-14

As a % ofloans HIP bycategory

Q4 2015 vs.Q3 2015

Q4 2015 vs.Q4 2014

Non-accrual loans:
Commercial $181,816 1.8 % $239,397 2.4 % $260,225 3.2 % $(57,581 ) $(78,409 )
Construction 3,550 0.5 3,605 0.5 13,812 5.5 (55 ) (10,262 )
Legacy [1] 3,649 5.7 4,059 6.0 1,545 1.9 (410 ) 2,104
Lease financing 3,009 0.5 3,091 0.5 3,102 0.5 (82 ) (93 )
Mortgage 351,471 5.0 343,410 4.8 304,913 4.7 8,061 46,558
Consumer 58,304 1.5 41,340 1.1 46,886 1.2 16,964 11,418

Total non-performing loans held-in-portfolio, excluding covered loans

601,799 2.7 % 634,902 2.8 % 630,483 3.3 % (33,103 ) (28,684 )
Non-performing loans held-for-sale [2] 45,169 47,681 18,899 (2,512 ) 26,270

Other real estate owned (“OREO”), excluding covered OREO

155,231 155,826 135,500 (595 ) 19,731

Total non-performing assets, excluding covered assets

802,199 838,409 784,882 (36,210 ) 17,317
Covered loans and OREO 40,571 39,888 148,099 683 (107,528 )
Total non-performing assets $842,770 $878,297 $932,981 $(35,527 ) $(90,211 )
Accruing loans past due 90 days or more [3] $446,419 $443,497 $447,990 $2,922 $(1,571 )
Ratios excluding covered loans:

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

2.69

%

2.82

%

3.25

%

Allowance for loan losses to loans held-in-portfolio

2.25 2.38 2.68

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

83.57 84.42 82.43
Ratios including covered loans:
Non-performing assets to total assets 2.36

%

2.47

%

2.82

%

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

2.63 2.76 2.95

Allowance for loan losses to loans held-in-portfolio

2.34 2.46 2.74

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

88.68 89.27 92.82
[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] Non-performing loans held-for-sale as of December 31, 2015 consisted of $45 million in commercial loans and $95 thousand in construction loan (September 30, 2015 - $47 million in commercial loans, $10 thousand in construction loan and $224 thousand in mortgage loans; December 31, 2014 - $14.0 million in mortgage loans, $309 thousand in commercial loans and $4.5 million in consumer loans).
[3] It is the Corporation’s 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 $164 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of December 31, 2015 (September 30, 2015 - $159 million; December 31, 2014 - $125 million). Furthermore, the Corporation has approximately $70 million in reverse mortgage loans which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation's policy to exclude these balances from non-performing assets (September 30, 2015 - $71 million; December 31, 2014 - $66 million).

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table I - Activity in Non-Performing Loans
(Unaudited)
Commercial loans held-in-portfolio:
Quarter ended Quarter ended
31-Dec-15 30-Sep-15
(In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc.
Beginning balance NPLs $235,895 $3,502 $239,397 $179,399 $10,895 $190,294
Plus:
New non-performing loans 17,771 3,339 21,110 91,393 2,125 93,518
Advances on existing non-performing loans - - - - 6 6
Less:
Non-performing loans transferred to OREO (852 ) - (852 ) (853 ) - (853 )
Non-performing loans charged-off (44,423 ) (232 ) (44,655 ) (13,999 ) (229 ) (14,228 )
Loans returned to accrual status / loan collections (9,144 ) (2,222 ) (11,366 ) (20,045 ) (1,525 ) (21,570 )
Loans transferred to held-for-sale - (473 ) (473 ) - - -
Non-performing loans sold (21,345 ) - (21,345 ) - - -
Other transfers out of non-performing - - - - (7,770 ) (7,770 )
Ending balance NPLs $177,902 $3,914 $181,816 $235,895 $3,502 $239,397
Construction loans held-in-portfolio:
Quarter ended Quarter ended
31-Dec-15 30-Sep-15
(In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc.
Beginning balance NPLs $3,605 $- $3,605 $4,756 $671 $5,427
Plus:
New non-performing loans 30 1,106 1,136 - 7,745 7,745
Less:
Non-performing loans charged-off (47 ) - (47 ) (91 ) - (91 )
Loans returned to accrual status / loan collections (38 ) (1,106 ) (1,144 ) (1,060 ) (8,416 ) (9,476 )
Ending balance NPLs $3,550 $- $3,550 $3,605 $- $3,605
Mortgage loans held-in-portfolio:
Quarter ended Quarter ended
31-Dec-15 30-Sep-15
(In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc.
Beginning balance NPLs $331,022 $12,388 $343,410 $318,773 $12,048 $330,821
Plus:
New non-performing loans 85,208 7,208 92,416 93,768 5,816 99,584
Less:
Non-performing loans transferred to OREO (8,860 ) (452 ) (9,312 ) (8,450 ) - (8,450 )
Non-performing loans charged-off (9,142 ) (300 ) (9,442 ) (15,212 ) (517 ) (15,729 )
Loans returned to accrual status / loan collections (60,295 ) (5,306 ) (65,601 ) (57,857 ) (4,959 ) (62,816 )
Ending balance NPLs $337,933 $13,538 $351,471 $331,022 $12,388 $343,410
Legacy loans held-in-portfolio:
Quarter ended Quarter ended
31-Dec-15 30-Sep-15
(In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc.
Beginning balance NPLs $- $4,059 $4,059 $- $4,686 $4,686
Plus:
New non-performing loans - 247 247 - 649 649
Advances on existing non-performing loans - 9 9 - 89 89
Less:
Non-performing loans charged-off - (151 ) (151 ) - (721 ) (721 )
Loans returned to accrual status / loan collections - (515 ) (515 ) - (644 ) (644 )
Ending balance NPLs $- $3,649 $3,649 $- $4,059 $4,059
Total non-performing loans held-in-portfolio (excluding consumer and covered loans):
Quarter ended Quarter ended
31-Dec-15 30-Sep-15
(In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc.
Beginning balance NPLs $570,522 $19,949 $590,471 $502,928 $28,300 $531,228
Plus:
New non-performing loans 103,009 11,900 114,909 185,161 16,335 201,496
Advances on existing non-performing loans - 9 9 - 95 95
Less:
Non-performing loans transferred to OREO (9,712 ) (452 ) (10,164 ) (9,303 ) - (9,303 )
Non-performing loans charged-off (53,612 ) (683 ) (54,295 ) (29,302 ) (1,467 ) (30,769 )
Loans returned to accrual status / loan collections (69,477 ) (9,149 ) (78,626 ) (78,962 ) (15,544 ) (94,506 )
Loans transferred to held-for-sale - (473 ) (473 ) - - -
Non-performing loans sold (21,345 ) - (21,345 ) - - -
Other transfers out of non-performing - - - - (7,770 ) (7,770 )
Ending balance NPLs $519,385 $21,101 $540,486 $570,522 $19,949 $590,471

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios
(Unaudited)
Quarter ended Quarter ended Quarter ended
31-Dec-15 30-Sep-15 31-Dec-14
(Dollars in thousands)

Non-coveredloans

Coveredloans

Total

Non-coveredloans

Coveredloans

Total

Non-coveredloans

Coveredloans

Total
Balance at beginning of period $536,005 $34,509 $570,514 $512,739 $38,074 $550,813 $521,687 $89,688 $611,375
Provision for loan losses - Continuing operations 57,711 820 58,531 69,568 (2,890 ) 66,678 51,637 (3,646 ) 47,991
593,716 35,329 629,045 582,307 35,184 617,491 573,324 86,042 659,366
Net loans charged-off (recovered):
BPPR
Commercial 42,857 - 42,857 9,172 - 9,172 13,890 3,230 17,120
Construction 2,966 - 2,966 (2,648 ) - (2,648 ) (279 ) (1,172 ) (1,451 )
Lease financing 667 - 667 894 - 894 751 - 751
Mortgage 14,255 1,168 15,423 15,524 601 16,125 12,228 2,725 14,953
Consumer 21,266 (15 ) 21,251 24,303 74 24,377 25,933 (814 ) 25,119
Total BPPR 82,011 1,153 83,164 47,245 675 47,920 52,523 3,969 56,492
BPNA
Commercial (525 ) - (525 ) (1,959 ) - (1,959 ) (900 ) - (900 )
Construction - - - - - - (2 ) - (2 )
Legacy [1] (359 ) - (359 ) (603 ) - (603 ) (3,877 ) - (3,877 )
Mortgage 162 - 162 787 - 787 (93 ) - (93 )
Consumer 1,581 - 1,581 832 - 832 2,536 - 2,536
Total BPNA 859 - 859 (943 ) - (943 ) (2,336 ) - (2,336 )
Total loans charged-off - Popular, Inc. 82,870 1,153 84,023 46,302 675 46,977 50,187 3,969 54,156
Net (write-downs) recoveries [2] (7,911 ) - (7,911 ) - - - (3,418 ) - (3,418 )
Balance at end of period $502,935 $34,176 $537,111 $536,005 $34,509 $570,514 $519,719 $82,073 $601,792
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio 1.48 % 1.46 % 0.83 % 0.82 % 1.04 % 0.99 %
Provision for loan losses to net charge-offs [3] 0.70 x 0.70 x 1.50 x 1.42 x 0.99 x 0.85 x
BPPR
Annualized net charge-offs to average loans held-in-portfolio 1.86 % 1.82 % 1.07 % 1.04 % 1.33 % 1.22 %
Provision for loan losses to net charge-offs [3] 0.68 x 0.68 x 1.46 x 1.37 x 0.99 x 0.86 x
BPNA
Annualized net charge-offs (recoveries) to average loans held-in-portfolio 0.07 % (0.08 ) % (0.27 ) %
Provision for loan losses to net charge-offs 2.42 N.M. N.M.

[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] Net write-downs are related to loans sold or reclassified to held-for-sale.
[3] Excluding provision for loan losses and net write-down related to loans sold or reclassified to held-for-sale.
N.M. - Not meaningful.

Year ended Year ended
(Dollars in thousands) 31-Dec-15 31-Dec-14

Non-coveredloans

Coveredloans

Total

Non-coveredloans

Coveredloans

Total
Balance at beginning of period $519,719 $82,073 $601,792 $538,463 $102,092 $640,555
Provision for loan losses - Continuing operations 217,458 24,020 241,478 223,999 46,135 270,134
Provision (reversal of provision) for loan losses - Discontinued operations - - - (6,764 ) - (6,764 )
737,177 106,093 843,270 755,698 148,227 903,925
Net loans charged-off (recovered):
BPPR
Commercial 73,890 31,432 105,322 39,382 32,906 72,288
Construction (886 ) 20,386 19,500 (3,509 ) 27,686 24,177
Lease financing 3,303 - 3,303 3,961 - 3,961
Mortgage 50,991 5,228 56,219 44,000 8,442 52,442
Consumer 83,876 11 83,887 96,655 (2,880 ) 93,775
Total BPPR 211,174 57,057 268,231 180,489 66,154 246,643
BPNA
Commercial (3,842 ) - (3,842 ) 1,105 - 1,105
Construction - - - (237 ) - (237 )
Legacy [1] (2,760 ) - (2,760 ) (9,070 ) - (9,070 )
Mortgage 1,279 - 1,279 1,196 - 1,196
Consumer 5,649 - 5,649 12,165 - 12,165
Discontinued operations - - - (5,545 ) - (5,545 )
Total BPNA 326 - 326 (386 ) - (386 )
Total loans charged-off (recovered) - Popular, Inc. 211,500 57,057 268,557 180,103 66,154 246,257
Balance transferred from covered to non-covered loans 13,037 (13,037 ) - - - -
Net write-downs [3] (35,779 ) (1,823 ) (37,602 ) (35,674 ) - (35,674 )
Net write-downs related to loans transferred to discontinued operations - - - (20,202 ) - (20,202 )
Balance at end of period $502,935 $34,176 $537,111 $519,719 $82,073 $601,792
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio 0.98 % 1.17 % 0.90 % 1.08 %
Provision for loan losses to net charge-offs [2] 1.03 x 0.90 x 1.17 x 1.04 x
BPPR
Annualized net charge-offs to average loans held-in-portfolio 1.24 % 1.45 % 1.14 % 1.33 %
Provision for loan losses to net charge-offs [2] 1.03 x 0.90 x 1.38 x 1.20 x
BPNA
Annualized net charge-offs to average loans held-in-portfolio 0.01 % (0.01 ) %
Provision (reversal) for loan losses to net charge-offs 1.92 x 102.57 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 years ended December 31, 2015 and December 31, 2014.
[3] Net write-downs for the years ended December 31, 2015 and 2014 are related to loans sold or reclassified to held-for-sale.

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED
(Unaudited)
31-Dec-15
(Dollars in thousands) Commercial Construction Legacy [3] Mortgage

Leasefinancing

Consumer

Total [2]

Specific ALLL $49,243 $264 $- $44,029 $573 $23,963 $118,072
Impaired loans [1] $337,133 $2,481 $- $471,932 $2,404 $111,836 $925,786
Specific ALLL to impaired loans [1] 14.61 % 10.64 % - % 9.33 % 23.84 % 21.43 % 12.75 %
General ALLL $147,590 $8,605 $2,687 $89,283 $10,420 $126,278 $384,863
Loans held-in-portfolio, excluding impaired loans [1] $9,762,030 $678,625 $64,436 $6,564,149 $625,246 $3,725,843 $21,420,329
General ALLL to loans held-in-portfolio, excluding impaired loans [1] 1.51 % 1.27 % 4.17 % 1.36 % 1.67 % 3.39 % 1.80 %
Total ALLL $196,833 $8,869 $2,687 $133,312 $10,993 $150,241 $502,935
Total non-covered loans held-in-portfolio [1] $10,099,163 $681,106 $64,436 $7,036,081 $627,650 $3,837,679 $22,346,115
ALLL to loans held-in-portfolio [1] 1.95 % 1.30 % 4.17 % 1.89 % 1.75 % 3.91 % 2.25 %
[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, 2015 the general allowance on the covered loans amounted to $34.2 million.
[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-15
(Dollars in thousands) Commercial Construction Legacy [3] Mortgage

Leasefinancing

Consumer

Total [2]

Specific ALLL $83,615 $358 $- $47,545 $634 $24,696 $156,848
Impaired loans [1] $391,066 $2,536 $1,188 $462,806 $2,645 $113,865 $974,106
Specific ALLL to impaired loans [1] 21.38 % 14.12 % - % 10.27 % 23.97 % 21.69 % 16.10 %
General ALLL $146,846 $14,393 $2,805 $86,955 $8,457 $119,701 $379,157
Loans held-in-portfolio, excluding impaired loans [1] $9,739,358 $689,956 $66,786 $6,702,673 $604,282 $3,720,905 $21,523,960
General ALLL to loans held-in-portfolio, excluding impaired loans [1] 1.51 % 2.09 % 4.20 % 1.30 % 1.40 % 3.22 % 1.76 %
Total ALLL $230,461 $14,751 $2,805 $134,500 $9,091 $144,397 $536,005
Total non-covered loans held-in-portfolio [1] $10,130,424 $692,492 $67,974 $7,165,479 $606,927 $3,834,770 $22,498,066
ALLL to loans held-in-portfolio [1] 2.27 % 2.13 % 4.13 % 1.88 % 1.50 % 3.77 % 2.38 %
[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, 2015 the general allowance on the covered loans amounted to $34.5 million.
[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

Leasefinancing

Consumer Total
Specific ALLL $(34,372 ) $(94 ) $- $(3,516 ) $(61 ) $(733 ) $(38,776 )
Impaired loans $(53,933 ) $(55 ) $(1,188 ) $9,126 $(241 ) $(2,029 ) $(48,320 )
General ALLL $744 $(5,788 ) $(118 ) $2,328 $1,963 $6,577 $5,706
Loans held-in-portfolio, excluding impaired loans $22,672 $(11,331 ) $(2,350 ) $(138,524 ) $20,964 $4,938 $(103,631 )
Total ALLL $(33,628 ) $(5,882 ) $(118 ) $(1,188 ) $1,902 $5,844 $(33,070 )
Total non-covered loans held-in-portfolio $(31,261 ) $(11,386 ) $(3,538 ) $(129,398 ) $20,723 $2,909 $(151,951 )

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS
(Unaudited)
31-Dec-15
Puerto Rico
(In thousands) Commercial Construction Mortgage

Lease financing

Consumer Total
Allowance for credit losses:
Specific ALLL non-covered loans $49,243 $264 $42,965 $573 $23,478 $116,523
General ALLL non-covered loans 137,682 4,693 85,362 10,420 115,243 353,400
ALLL - non-covered loans 186,925 4,957 128,327 10,993 138,721 469,923
Specific ALLL covered loans - - - - - -
General ALLL covered loans - - 33,967 - 209 34,176
ALLL - covered loans - - 33,967 - 209 34,176
Total ALLL $186,925 $4,957 $162,294 $10,993 $138,930 $504,099
Loans held-in-portfolio:
Impaired non-covered loans $337,133 $2,481 $465,117 $2,404 $109,660 $916,795
Non-covered loans held-in-portfolio, excluding impaired loans 7,031,086 98,467 5,662,374 625,246 3,236,642 16,653,815
Non-covered loans held-in-portfolio 7,368,219 100,948 6,127,491 627,650 3,346,302 17,570,610
Impaired covered loans - - - - - -
Covered loans held-in-portfolio, excluding impaired loans - - 627,102 - 19,013 646,115
Covered loans held-in-portfolio - - 627,102 - 19,013 646,115
Total loans held-in-portfolio $7,368,219 $100,948 $6,754,593 $627,650 $3,365,315 $18,216,725
30-Sep-15
Puerto Rico
(In thousands) Commercial Construction Mortgage Lease financing Consumer Total
Allowance for credit losses:
Specific ALLL non-covered loans $83,615 $358 $46,956 $634 $24,221 $155,784
General ALLL non-covered loans 137,352 11,223 83,109 8,457 108,285 348,426
ALLL - non-covered loans 220,967 11,581 130,065 9,091 132,506 504,210
Specific ALLL covered loans - - - - - -
General ALLL covered loans - - 34,334 - 175 34,509
ALLL - covered loans - - 34,334 - 175 34,509
Total ALLL $220,967 $11,581 $164,399 $9,091 $132,681 $538,719
Loans held-in-portfolio:
Impaired non-covered loans $391,066 $2,536 $457,631 $2,645 $111,683 $965,561
Non-covered loans held-in-portfolio, excluding impaired loans 7,130,678 106,142 5,762,764 604,282 3,249,213 16,853,079
Non-covered loans held-in-portfolio 7,521,744 108,678 6,220,395 606,927 3,360,896 17,818,640
Impaired covered loans - - - - - -
Covered loans held-in-portfolio, excluding impaired loans - - 645,663 - 19,765 665,428
Covered loans held-in-portfolio - - 645,663 - 19,765 665,428
Total loans held-in-portfolio $7,521,744 $108,678 $6,866,058 $606,927 $3,380,661 $18,484,068

Variance
(In thousands) Commercial Construction Mortgage Lease financing Consumer Total
Allowance for credit losses:
Specific ALLL non-covered loans $(34,372 ) $(94 ) $(3,991 ) $(61 ) $(743 ) $(39,261 )
General ALLL non-covered loans 330 (6,530 ) 2,253 1,963 6,958 4,974
ALLL - non-covered loans (34,042 ) (6,624 ) (1,738 ) 1,902 6,215 (34,287 )
Specific ALLL covered loans - - - - - -
General ALLL covered loans - - (367 ) - 34 (333 )
ALLL - covered loans - - (367 ) - 34 (333 )
Total ALLL $(34,042 ) $(6,624 ) $(2,105 ) $1,902 $6,249 $(34,620 )
Loans held-in-portfolio:
Impaired non-covered loans $(53,933 ) $(55 ) $7,486 $(241 ) $(2,023 ) $(48,766 )
Non-covered loans held-in-portfolio, excluding impaired loans (99,592 ) (7,675 ) (100,390 ) 20,964 (12,571 ) (199,264 )
Non-covered loans held-in-portfolio (153,525 ) (7,730 ) (92,904 ) 20,723 (14,594 ) (248,030 )
Impaired covered loans - - - - - -
Covered loans held-in-portfolio, excluding impaired loans - - (18,561 ) - (752 ) (19,313 )
Covered loans held-in-portfolio - - (18,561 ) - (752 ) (19,313 )
Total loans held-in-portfolio $(153,525 ) $(7,730 ) $(111,465 ) $20,723 $(15,346 ) $(267,343 )

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS
(Unaudited)
31-Dec-15
U.S. Mainland
(In thousands) Commercial Construction Legacy Mortgage Consumer Total
Allowance for credit losses:
Specific ALLL $- $- $- $1,064 $485 $1,549
General ALLL 9,908 3,912 2,687 3,921 11,035 31,463
Total ALLL $9,908 $3,912 $2,687 $4,985 $11,520 $33,012
Loans held-in-portfolio:
Impaired loans $- $- $- $6,815 $2,176 $8,991
Loans held-in-portfolio, excluding impaired loans 2,730,944 580,158 64,436 901,775 489,201 4,766,514
Total loans held-in-portfolio $2,730,944 $580,158 $64,436 $908,590 $491,377 $4,775,505
30-Sep-15
U.S. Mainland
(In thousands) Commercial Construction Legacy Mortgage Consumer Total
Allowance for credit losses:
Specific ALLL $- $- $- $589 $475 $1,064
General ALLL 9,494 3,170 2,805 3,846 11,416 30,731
Total ALLL $9,494 $3,170 $2,805 $4,435 $11,891 $31,795
Loans held-in-portfolio:
Impaired loans $- $- $1,188 $5,175 $2,182 $8,545
Loans held-in-portfolio, excluding impaired loans 2,608,680 583,814 66,786 939,909 471,692 4,670,881
Total loans held-in-portfolio $2,608,680 $583,814 $67,974 $945,084 $473,874 $4,679,426
Variance
(In thousands) Commercial Construction Legacy Mortgage Consumer Total
Allowance for credit losses:
Specific ALLL $- $- $- $475 $10 $485
General ALLL 414 742 (118 ) 75 (381 ) 732
Total ALLL $414 $742 $(118 ) $550 $(371 ) $1,217
Loans held-in-portfolio:
Impaired loans $- $- $(1,188 ) $1,640 $(6 ) $446
Loans held-in-portfolio, excluding impaired loans 122,264 (3,656 ) (2,350 ) (38,134 ) 17,509 95,633
Total loans held-in-portfolio $122,264 $(3,656 ) $(3,538 ) $(36,494 ) $17,503 $96,079

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table N - Reconciliation to GAAP Financial Measures
(Unaudited)
(In thousands, except share or per share information) 31-Dec-15 30-Sep-15 31-Dec-14
Total stockholders’ equity $5,105,324 $5,049,636 $4,267,382
Less: Preferred stock (50,160 ) (50,160 ) (50,160 )
Less: Goodwill (626,388 ) (504,925 ) (465,676 )
Less: Other intangibles (58,109 ) (71,393 ) (37,595 )
Total tangible common equity $4,370,667 $4,423,158 $3,713,951
Total assets $35,769,534 $35,530,794 $33,096,695
Less: Goodwill (626,388 ) (504,925 ) (465,676 )
Less: Other intangibles (58,109 ) (71,393 ) (37,595 )
Total tangible assets $35,085,037 $34,954,476 $32,593,424
Tangible common equity to tangible assets 12.46 % 12.65 % 11.39 %
Common shares outstanding at end of period 103,618,976 103,556,285 103,476,847
Tangible book value per common share $42.18 $42.71 $35.89

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table O - Financial Information - Westernbank Loans
(Unaudited)
Revenues
Quarters ended
(In thousands) 31-Dec-15 30-Sep-15 Variance
Interest income on WB loans $47,870 $47,982 $(112 )
FDIC loss-share (expense) income:
Amortization of indemnification asset (3,926 ) (3,931 ) 5
80% mirror accounting on credit impairment losses (reversal) [1] (52 ) (183 ) 131
80% mirror accounting on reimbursable expenses 2,654 6,276 (3,622 )

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

(6,014 ) - (6,014 )
Change in true-up payment obligation 2,782 (1,058 ) 3,840
Other 197 103 94
Total FDIC loss-share (expense) income (4,359 ) 1,207 (5,566 )
Total revenues 43,511 49,189 (5,678 )
Provision for loan losses 7,817 20,206 (12,389 )
Total revenues less provision for loan losses $35,694 $28,983 $6,711
[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.
Non-personnel operating expenses
Quarters ended [2]
(In thousands) [1] 31-Dec-15 30-Sep-15 Variance
Professional fees $6,315 $4,606 $1,709
OREO expenses 1,911 2,033 (122 )
Other operating expenses 2,603 3,842 (1,239 )
Total operating expenses $10,829 $10,481 $348
[1] Includes expenses related to loans subject to the FDIC loss-sharing agreement and loans not subject to the FDIC loss-sharing agreement.
[2] 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.
Quarterly average assets
Quarters ended
(In millions) 31-Dec-15 30-Sep-15 Variance
Loans $2,156 $2,221 $(65 )
FDIC loss-share asset 303 330 (27 )

Activity in the carrying amount and accretable yield of loans accounted for under ASC 310-30
Quarters ended
31-Dec-15 30-Sep-15
(In thousands) Accretable yield

Carrying amountof loans

Accretable yield

Carrying amountof loans

Beginning balance $1,145,449 $2,076,012 $1,245,924 $2,137,078
Accretion (46,582 ) 46,582 (46,693 ) 46,693
Changes in expected cash flows 13,591 - (53,782 ) -
Collections / charge-offs - (148,093 ) - (107,759 )
Ending balance 1,112,458 1,974,501 1,145,449 2,076,012
Allowance for loan losses - ASC 310-30 loans - (63,563 ) - (64,583 )
Ending balance, net of allowance for loan losses $1,112,458 $1,910,938 $1,145,449 $2,011,429
The carrying amount of loans acquired from Westernbank and accounted for under ASC 310-30 which remain subject to the loss-sharing agreement with the FDIC amounted to approximately $636 million as of December 31, 2015.
Activity in the carrying amount of the FDIC indemnity asset
Quarters ended
(In thousands) 31-Dec-15 30-Sep-15
Balance at beginning of period $311,946 $392,947
Amortization (3,926 ) (3,931 )
Credit impairment losses (reversal) to be covered under loss-sharing agreements (52 ) (183 )
Reimbursable expenses to be covered under loss-sharing agreements 2,654 6,276
Net payments from FDIC under loss-sharing agreements (2,560 ) (80,993 )
Other adjustments attributable to FDIC loss-sharing agreements 2,159 (2,170 )
Balance at end of period $310,221 $311,946
Activity in the remaining FDIC loss-share asset amortization
Quarters ended
(In thousands) 31-Dec-15 30-Sep-15
Balance at beginning of period $27,367 $28,493
Amortization (3,926 ) (3,931 )
Impact of lower projected losses 2,659 2,805
Balance at end of period $26,100 $27,367

POPULAR, INC.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table P - Restructuring Charges
(Unaudited)
Restructuring Charges
Quarters ended
(In thousands) 31-Dec-15 30-Sep-15 Variance
Personnel costs $ 209 $ 496 $ (287 )
Net occupancy expenses 222 208 14
Equipment expenses 8 15 (7 )
Professional fees 349 (406 ) 755
Other operating expenses 216 168 48
Total restructuring costs $ 1,004 $ 481 $ 523

Popular, Inc.
Financial Supplement to Fourth Quarter 2015 Earnings Release
Table Q - Adjusted Consolidated Statement of Operations for the Years Ended December 31, 2015 and 2014 (Non-GAAP)
(Unaudited)
Year ended
31-Dec-15
(In thousands)

ActualResults(U.S. GAAP)

BPNAReorganization[2]

DoralTransaction[3]

OTTI [4]

Reversalof DTA – U.S.Operations[5]

Loss onBulk Sale ofCoveredOREOs [6]

Adjustment toFDICIndemnificationAssets [7]

MSRsAcquired [8]

Impairment ofLoans UnderProposedPortfolio Sale[9]

Bulk Sale[10]

AdjustedResults(Non-GAAP)

Net interest income $1,408,983 $- $- $- $- $- $- $- $- $- $1,408,983
Provision for loan losses – non-covered loans 217,458 - - - - - - - 15,190 5,852 196,416
Provision for loan losses – covered loans [1] 24,020 - - - - - - - - - 24,020
Net interest income after provision for loan losses 1,167,505 - - - - - - - (15,190 ) (5,852 ) 1,188,547
Mortgage banking activities 81,802 - 844 - - - - 4,378 - - 76,580
Other-than-temporary impairment losses on investment securities (14,445 ) - - (14,445 ) - - - - - - -
FDIC loss-share (expense) income 20,062 - - - - 17,566 (10,887 ) - - - 13,383
Other non-interest income 432,122 - 2,072 - - - - - - 430,050
Total non-interest income 519,541 - 2,916 (14,445 ) - 17,566 (10,887 ) 4,378 - - 520,013
Personnel costs 477,519 - 7,103 - - - - - - - 470,416
Net occupancy expenses 86,888 - 4,103 - - - - - - - 82,785
Equipment expenses 60,110 - 725 - - - - - - - 59,385
Professional fees 308,985 - 15,481 - - - - - - - 293,504
Communications 25,146 - 70 - - - - - - - 25,076
Business promotion 52,076 - 501 - - - - - - - 51,575
Other real estate owned (OREO) expenses 85,568 - - - - 21,957 - - - - 63,611
Amortization of intangibles 11,019 - - - - - - - - - 11,019
Restructuring costs 18,412 18,412 - - - - - - - - -
Other operating expenses 162,498 - 509 - - - - - - - 161,989
Total operating expenses 1,288,221 18,412 28,492 - - 21,957 - - - - 1,219,360
Income (loss) from continuing operations before income tax 398,825 (18,412 ) (25,576 ) (14,445 ) - (4,391 ) (10,887 ) 4,378 (15,190 ) (5,852 ) 489,200
Income tax (benefit) expense (495,172 ) - (7,690 ) (2,486 ) (589,030 ) (1,712 ) (2,177 ) 1,707 (5,924 ) (2,282 ) 114,422
Income (loss) from continuing operations $893,997 $(18,412 ) $(17,886 ) $(11,959 ) $589,030 $(2,679 ) $(8,710 ) $2,671 $(9,266 ) $(3,570 ) $374,778
Income from discontinued operations, net of tax $1,347 $1,347 $- $- $- $- $- $- $- $- -
Net income (loss) $895,344 $(17,065 ) $(17,886 ) $(11,959 ) $589,030 $(2,679 ) $(8,710 ) $2,671 $(9,266 ) $(3,570 ) $374,778
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement.
[2] Represents restructuring charges associated with the reorganization of BPNA.
[3] Includes approximately $0.8 million of fees charged for loan servicing cost to the FDIC, $2.1 million of fees charged for services provided to the alliance co-bidders, personnel costs related to former Doral Bank employees retained on a temporary basis and incentive compensation for an aggregate of $7.1 million, building rent expense of Doral Bank’s administrative offices for $4.1 million, professional fees and business promotion expenses directly associated with the Doral Bank Transaction and systems conversion for $16.0 million and other expenses, including equipment, business promotions and communications, of $1.3 million.
[4] Represents an other than temporary impairment (“OTTI”) recorded on Puerto Rico government investment securities available-for-sale. These securities had an amortized cost of approximately $41.1 million and a market value of $26.6 million. Based on the fiscal and economic situation in Puerto Rico, together with the government’s announcements regarding its ability to pay its debt, the Corporation determined that the unrealized loss, a portion of which had been in an unrealized loss for a period exceeding twelve months, was other than temporary.
[5] Represents the partial reversal of the valuation allowance of a portion of the deferred tax asset amounting to approximately $1.2 billion, at the U.S. operations.
[6] Represents the loss on a bulk sale of covered OREOs completed in the second quarter and the related mirror accounting of the 80% reimbursable from the FDIC.
[7] The quarter’s negative amortization of the FDIC’s Indemnification Asset included a $10.9 million expense related to losses incurred by the corporation that were not claimed to the FDIC before the expiration of the loss-share portion of the agreement on June 30, 2015, and that are not subject to the ongoing arbitrations.
[8] Represents the fair value of mortgage servicing rights acquired for a portfolio previously serviced by Doral Bank, for which the Corporation acted as a backup servicer, under a pre-existing contract.
[9] Represents impairment based on the estimated fair value of loans acquired from Westernbank, that the Corporation has the intent to sell and are subject to the ongoing arbitration with the FDIC.
[10] Represents the impact of a bulk sale of loans at the BPPR segment, which had a book value of approximately $34.4 million.

Year ended
31-Dec-14
(In thousands)

ActualResults(U.S. GAAP)

TARPrepaymentdiscountamortizationand IncomeTaxadjustments[2]

BPNAReorganization[3]

Income TaxAdjustments[4]

IndemnificationAssetAdjustment [5]

OtherAdjustments[6]

AdjustedResults(Non-GAAP)

Net interest income $945,072 $(414,068 ) $(39,254 ) $- $- $- $1,398,394
Provision for loan losses – non-covered loans 223,999 - 12,828 - - - 211,171
Provision for loan losses – covered loans [1] 46,135 - - - - - 46,135
Net interest income after provision for loan losses 674,938 (414,068 ) (52,082 ) - - - 1,141,088
Mortgage banking activities 30,615 - - - - - 30,615
Net gain on sale of loans, including valuation adjustments on loans held-for-sale 40,591 - 1,684 - - - 38,907
FDIC loss-share income (expense) (103,024 ) - - - 12,492 - (115,516 )
Other non-interest income 418,333 - - - - - 418,333
Total non-interest income 386,515 - 1,684 - 12,492 - 372,339
Personnel costs 418,679 - - - - 2,974 415,705
Net occupancy expenses 86,707 - - - - 1,895 84,812
Equipment expenses 48,917 - - - - - 48,917
Loss on early extinguishment of debt 532 - 532 - - - -
Professional fees 282,055 - - - - - 282,055
Communications 25,684 - - - - - 25,684
Business promotion 54,016 - - - - - 54,016
Other real estate owned (OREO) expenses 49,611 - - - - - 49,611
Restructuring costs 26,725 - 26,725 - - - -
Other operating expenses 200,758 - - - - - 200,758
Total operating expenses 1,193,684 - 27,257 - - 4,869

1,161,558

(Loss) income from continuing operations before income tax (132,231 ) (414,068 ) (77,655 ) - 12,492 (4,869 ) 351,869
Income tax expense 58,279 (15,393 ) - 20,048 2,498 - 51,126
(Loss) income from continuing operations $(190,510 ) $(398,675 ) $(77,655 ) $(20,048 ) $9,994 $(4,869 ) $300,743
(Loss) income from discontinued operations, net of tax $(122,980 ) $- $(122,980 ) $- $- $- $-

Net (loss) income

$(313,490 ) $(398,675 ) $(200,635 ) $(20,048 ) $9,994 $(4,869 ) $300,743
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under an FDIC loss-sharing agreement.
[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 other things, changed the income tax rate for capital gains for 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 asset 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 and represents the net loss on the early cancellation of a lease at BPNA $1.9 million.

Popular, Inc.

Investor Relations:

Brett Scheiner, 212-417-6721

Investor Relations Officer

[email protected]

or

Media Relations:

Teruca Rullán, 787-281-5170

Mobile: 917-679-3596

Senior Vice President, Corporate Communications

Source: Popular, Inc.

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