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Popular, Inc. Reports Net Income Of $65.7 Million For The Quarter Ended June 30, 2012

Founded in 1893, Popular, Inc. is the leading banking institution by both assets and deposits in Puerto Rico and ranks 37th by assets among U.S. banks. 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, Illinois, Florida and California.

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 on Wednesday, July 18, 2012 at 10:30 a.m. Eastern 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 866-804-6926 or 857-350-1672. The conference code is 45836565.

A replay of the webcast will be archived in Popular’s website during the respective period. A telephone replay will be available from 5 p.m. on Wednesday, July 18, 2012 at 888-286-8010 or 617-801-6888. The replay passcode is 95455273.

Popular, Inc.
Financial Supplement to Second Quarter 2012 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 - 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 - BANCO POPULAR DE PUERTO RICO
 
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - BANCO POPULAR NORTH AMERICA
 
Table N - Reconciliation to GAAP Financial Measures
 
Table O - Financial Information - Westernbank Covered Loans

 
POPULAR, INC.
Financial Supplement to Second Quarter 2012 Earnings Release
Table A - Selected Ratios and Other Information
(Unaudited)
 
                     
  Quarter ended   Quarter ended   Quarter ended   Six months ended   Six months ended
June 30, March 31, June 30, June 30, June 30,
      2012       2012       2011       2012       2011  
Net income per common share:
Basic and diluted [1] $ 0.63 $ 0.46 $ 1.07 $ 1.10 $ 1.16
 
Average common shares outstanding [1] 102,295,113 102,341,805 102,122,591 102,318,459 102,138,020
Average common shares outstanding - assuming dilution [1] 102,410,618 102,494,500 102,189,614 102,479,530 102,254,320
Common shares outstanding at end of period [1] 102,824,323 102,711,707 102,397,790 102,824,323 102,397,790
 
Market value per common share [1] $ 16.61 $ 20.50 $ 27.60 $ 16.61 $ 27.60
 
Market Capitalization --- (In millions) $ 1,708 $ 2,106 $ 2,826 $ 1,708 $ 2,826
 
Return on average assets 0.73 % 0.53 % 1.14 % 0.63 % 0.63 %
 
Return on average common equity 6.94 % 5.16 % 12.02 % 6.05 % 6.66 %
 
Net interest margin [2] 4.33 % 4.27 % 4.48 % 4.30 % 4.32 %
 
Common equity per share [1] $ 38.62 $ 38.14 $ 38.22 $ 38.62 $ 38.22
 
Tangible common book value per common share (non-GAAP) [1] $ 31.74 $ 31.23 $ 31.37 $ 31.74 $ 31.37
 
Tangible common equity to tangible assets (non-GAAP) 9.09 % 8.83 % 8.36 % 9.09 % 8.36 %
 
Tier 1 risk-based capital [3] 16.31 % 16.51 % 15.21 % 16.31 % 15.21 %
 
Total risk-based capital [3] 17.59 % 17.79 % 16.49 % 17.59 % 16.49 %
 
Tier 1 leverage [3] 11.09 % 11.10 % 10.16 % 11.09 % 10.16 %
 
Tier 1 common equity to risk-weighted assets (non-GAAP) [3] 12.29 % 12.53 % 11.52 % 12.29 % 11.52 %
 
 
[1] All share and per share data has been adjusted to retroactively reflect the 1-for-10 reverse stock split effected on May 29, 2012.
[2] Not on a taxable equivalent basis.
[3] Capital ratios for the current quarter are estimates.

 
POPULAR, INC.
Financial Supplement to Second Quarter 2012 Earnings Release
Table B - Consolidated Statement of Operations
(Unaudited)
      Quarter ended   Quarter ended   Variance  

Quarter ended

  Variance   Six months ended   Six months ended
(In thousands, except per share information) June 30, March 31, Q2 2012 vs. June 30, Q2 2012 vs. June 30, June 30,
  2012   2012   Q1 2012   2011   Q2 2011   2012   2011
Interest income:
Loans $ 389,342 $ 387,942 $ 1,400 $ 442,460 $ (53,118 ) $ 777,284 $ 865,835
Money market investments 964 948 16 926 38 1,912 1,873
Investment securities 43,813 45,070 (1,257 ) 53,723 (9,910 ) 88,883 106,098
  Trading account securities     5,963       5,891       72       9,790       (3,827 )     11,854       18,544
    Total interest income     440,082       439,851       231       506,899       (66,817 )     879,933       992,350
Interest expense:
Deposits 48,514 51,679 (3,165 ) 70,672 (22,158 ) 100,193 147,551
Short-term borrowings 13,044 13,583 (539 ) 13,719 (675 ) 26,627 27,734
  Long-term debt     37,324       37,007       317       47,966       (10,642 )     74,331       99,164
    Total interest expense     98,882       102,269       (3,387 )     132,357       (33,475 )     201,151       274,449
Net interest income 341,200 337,582 3,618 374,542 (33,342 ) 678,782 717,901
Provision for loan losses - non-covered loans 81,743 82,514 (771 ) 95,712 (13,969 ) 164,257 155,474
Provision for loan losses - covered loans     37,456       18,209       19,247       48,605       (11,149 )     55,665       64,162
Net interest income after provision for loan losses     222,001       236,859       (14,858 )     230,225       (8,224 )     458,860       498,265
Service charges on deposit accounts 46,130 46,589 (459 ) 46,802 (672 ) 92,719 92,432
Other service fees 62,027 66,039 (4,012 ) 58,307 3,720 128,066 116,959
Net loss on sale and valuation adjustments of investment securities (349 ) - (349 ) (90 ) (259 ) (349 ) (90 )
Trading account (loss) profit (7,283 ) (2,143 ) (5,140 ) 874 (8,157 ) (9,426 ) 375
Net (loss) gain on sale of loans, including valuation adjustments on loans held-for-sale
(15,397 ) 15,471 (30,868 ) (12,782 ) (2,615 ) 74 (5,538 )
Adjustments (expense) to indemnity reserves on loans sold (5,398 ) (3,875 ) (1,523 ) (9,454 ) 4,056 (9,273 ) (19,302 )
FDIC loss share income (expense) 2,575 (15,255 ) 17,830 38,670 (36,095 ) (12,680 ) 54,705
Fair value change in equity appreciation instrument - - - 578 (578 ) - 8,323
Other operating income     11,419       17,082       (5,663 )     1,255       10,164       28,501       40,664
    Total non-interest income     93,724       123,908       (30,184 )     124,160       (30,436 )     217,632       288,528
Operating expenses:
Personnel costs
Salaries 75,881 76,899 (1,018 ) 76,698 (817 ) 152,780 150,489
Commissions, incentives and other bonuses 14,359 12,726 1,633 11,995 2,364 27,085 21,918
Pension, postretirement and medical insurance 16,114 18,425 (2,311 ) 12,810 3,304 34,539 24,795
  Other personnel costs, including payroll taxes     9,982       13,441       (3,459 )     9,456       526       23,423       19,897
Total personnel costs 116,336 121,491 (5,155 ) 110,959 5,377 237,827 217,099
Net occupancy expenses 24,963 24,162 801 25,957 (994 ) 49,125 50,543
Equipment 10,900 11,341 (441 ) 10,761 139 22,241 22,797
Other taxes 12,074 13,438 (1,364 ) 14,623 (2,549 ) 25,512 26,595
Professional fees 52,127 48,105 4,022 49,479 2,648 100,232 96,167
Communications 6,645 7,131 (486 ) 7,188 (543 ) 13,776 14,398
Business promotion 16,980 12,850 4,130 11,332 5,648 29,830 21,192
FDIC deposit insurance 22,907 24,926 (2,019 ) 27,682 (4,775 ) 47,833 45,355
Loss on early extinguishment of debt 25,072 69 25,003 289 24,783 25,141 8,528
Other real estate owned (OREO) 2,380 14,165 (11,785 ) 6,440 (4,060 ) 16,545 8,651
Credit and debit card processing, volume, interchange and other 4,960 4,681 279 4,206 754 9,641 8,150
Other operating expenses 30,004 11,215 18,789 10,629 19,375 41,219 32,864
Amortization of intangibles     2,531       2,593       (62 )     2,255       276       5,124       4,510
    Total operating expenses     327,879       296,167       31,712       281,800       46,079       624,046       556,849
(Loss) income before income tax (12,154 ) 64,600 (76,754 ) 72,585 (84,739 ) 52,446 229,944
Income tax (benefit) expense     (77,893 )     16,192       (94,085 )     (38,100 )     (39,793 )     (61,701 )     109,127
Net income   $ 65,739     $ 48,408     $ 17,331     $ 110,685     $ (44,946 )   $ 114,147     $ 120,817
Net income applicable to common stock   $ 64,809     $ 47,477     $ 17,332     $ 109,754     $ (44,945 )   $ 112,286     $ 118,956
Net income per common share - basic [1]   $ 0.63     $ 0.46     $ 0.17     $ 1.07     $ (0.44 )   $ 1.10     $ 1.16
Net income per common share - diluted [1]   $ 0.63     $ 0.46     $ 0.17     $ 1.07     $ (0.44 )   $ 1.10     $ 1.16
[1] Per share data has been adjusted to retroactively reflect the 1-for-10 reverse stock split effected on May 29, 2012.

 
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table C - Consolidated Statement of Financial Condition
(Unaudited)
            Variance
June 30, March 31, June 30, Q2 2012 vs.
(In thousands)     2012       2012       2011     Q1 2012
Assets:
Cash and due from banks $ 515,338 $ 472,806 $ 587,965 $ 42,532
Money market investments 949,828 1,304,263 1,383,892 (354,435 )
Trading account securities, at fair value 417,469 404,293 785,842 13,176
Investment securities available-for-sale, at fair value 5,076,797 5,138,616 5,389,491 (61,819 )
Investment securities held-to-maturity, at amortized cost 124,646 124,372 129,910 274
Other investment securities, at lower of cost or realizable value 174,287 195,708 174,560 (21,421 )
Loans held-for-sale, at lower of cost or fair value 364,537 361,596 509,046 2,941
Loans held-in-portfolio:
Loans not covered under loss sharing agreements with the FDIC 20,665,809 20,478,674 20,657,694 187,135
Loans covered under loss sharing agreements with the FDIC 4,016,330 4,221,788 4,616,575 (205,458 )
    Less: Allowance for loan losses     (766,030 )     (803,264 )     (746,847 )     37,234  
    Total loans held-in-portfolio, net     23,916,109       23,897,198       24,527,422       18,911  
FDIC loss share asset 1,631,594 1,880,357 2,445,256 (248,763 )
Premises and equipment, net 527,027 533,545 537,870 (6,518 )
Other real estate not covered under loss sharing agreements with the FDIC 226,629 193,768 162,419 32,861
Other real estate covered under loss sharing agreements with the FDIC 125,093 110,559 74,803 14,534
Accrued income receivable 122,320 126,568 141,980 (4,248 )
Mortgage servicing assets, at fair value 155,711 156,331 162,619 (620 )
Other assets 1,577,794 1,439,532 1,393,843 138,262
Goodwill 647,757 647,911 647,318 (154 )
Other intangible assets     59,243       61,798       54,186       (2,555 )
Total assets   $ 36,612,179     $ 37,049,221     $ 39,108,422     $ (437,042 )
Liabilities and Stockholders’ Equity:
Liabilities:
Deposits:
Non-interest bearing $ 5,578,487 $ 5,366,420 $ 5,364,004 $ 212,067
    Interest bearing     21,836,293       21,831,316       22,596,425       4,977  
    Total deposits     27,414,780       27,197,736       27,960,429       217,044  
Federal funds purchased and assets sold under agreements to repurchase 1,426,636 2,113,557 2,570,322 (686,921 )
Other short-term borrowings 316,200 751,200 151,302 (435,000 )
Notes payable 1,877,583 1,843,754 3,423,286 33,829
Other liabilities     1,555,743       1,175,903       1,039,015       379,840  
Total liabilities     32,590,942       33,082,150       35,144,354       (491,208 )
Stockholders’ equity:
Preferred stock 50,160 50,160 50,160 -
Common stock 1,028 10,276 10,242 (9,248 )
Surplus 4,127,216 4,116,710 4,097,909 10,506
Accumulated deficit (100,440 ) (165,249 ) (228,372 ) 64,809
Treasury stock (144 ) (1,041 ) (642 ) 897
Accumulated other comprehensive loss (income)     (56,583 )     (43,785 )     34,771       (12,798 )
    Total stockholders’ equity     4,021,237       3,967,071       3,964,068       54,166  
Total liabilities and stockholders’ equity   $ 36,612,179     $ 37,049,221     $ 39,108,422     $ (437,042 )

 
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER
(Unaudited)
 
      Quarter ended   Quarter ended   Quarter ended   Variance   Variance
($ amounts in millions; yields not on a taxable equivalent basis) June 30, 2012 March 31, 2012 June 30, 2011 Q2 2012 vs Q1 2012 Q2 2012 vs Q2 2011
Average   Income /   Yield / Average  

Income /

  Yield / Average   Income /   Yield / Average   Income /   Yield / Average   Income /   Yield /

balance

 

Expense

 

Rate

balance   Expense   Rate balance   Expense   Rate balance   Expense   Rate balance   Expense   Rate
Assets:
Interest earning assets:
Money market, trading and investment securities $ 6,819     $ 50.7   2.98 % $ 6,761     $ 52.0   3.07 % $ 7,617     $ 64.4   3.39 % $ 58       ($1.3 )   (0.09 ) %   ($798 )   ($13.7 )   (0.41 ) %
Loans not covered under loss sharing agreements with the FDIC:
Commercial 10,237 126.2 4.96 10,444 126.5 4.87 11,023 137.2 4.99 (207 ) (0.3 ) 0.09 (786 ) (11.0 ) (0.03 )
Construction 495 3.4 2.78 523 6.5 5.03 804 2.7 1.34 (28 ) (3.1 ) (2.25 ) (309 ) 0.7 1.44
Mortgage 5,713 77.8 5.44 5,464 75.5 5.53 5,124 81.5 6.36 249 2.3 (0.09 ) 589 (3.7 ) (0.92 )
Consumer 3,640 91.1 10.07 3,661 92.6 10.17 3,610 92.3 10.26 (21 ) (1.5 ) (0.10 ) 30 (1.2 ) (0.19 )
Lease financing   546       11.8   8.65   555       12.0   8.67   583       12.9   8.85   (9 )     (0.2 )   (0.02 )   (37 )   (1.1 )   (0.20 )
Total loans not covered under loss sharing agreements with the FDIC 20,631 310.3 6.04 20,647 313.1 6.09 21,144 326.6 6.19 (16 ) (2.8 ) (0.05 ) (513 ) (16.3 ) (0.15 )
Loans covered under loss sharing agreements with the FDIC   4,129       79.1   7.69   4,292       74.8   7.00   4,686       115.9   9.91   (163 )     4.3     0.69     (557 )   (36.8 )   (2.22 )
Total loans   24,760       389.4   6.31   24,939       387.9   6.25   25,830       442.5   6.87   (179 )     1.5     0.06     (1,070 )   (53.1 )   (0.56 )
Total interest earning assets   31,579     $ 440.1   5.59 %   31,700     $ 439.9   5.57 %   33,447     $ 506.9   6.07 %   (121 )   $ 0.2     0.02   %   (1,868 )   ($66.8 )   (0.48 ) %
Allowance for loan losses (777 ) (802 ) (713 ) 25 (64 )
Other non-interest earning assets   5,415     5,658     6,047     (243 )   (632 )
Total average assets $ 36,217   $ 36,556  

$

38,781     ($339 )   ($2,564 )
 
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market $ 5,555 $ 6.2 0.45 % $ 5,246 $ 6.1 0.47 % $ 5,353 $ 8.4 0.63 % $ 309 $ 0.1 (0.02 ) % $ 202 ($2.2 ) (0.18 ) %
Savings 6,562 6.2 0.38 6,507 6.3 0.39 6,257 10.0 0.64 55 (0.1 ) (0.01 ) 305 (3.8 ) (0.26 )
Time deposits   9,752       36.1   1.49   10,291       39.3   1.54   10,990       52.3   1.91   (539 )     (3.2 )   (0.05 )   (1,238 )   (16.2 )   (0.42 )
Total interest bearing deposits 21,869 48.5 0.89 22,044 51.7 0.94 22,600 70.7 1.25 (175 ) (3.2 ) (0.05 ) (731 ) (22.2 ) (0.36 )
Borrowings   4,165       50.4   4.85   4,365       50.6   4.65   6,486       61.7   3.81   (200 )     (0.2 )   0.20     (2,321 )   (11.3 )   1.04  
Total interest bearing liabilities   26,034       98.9   1.52   26,409       102.3   1.55   29,086       132.4   1.82   (375 )     (3.4 )   (0.03 )   (3,052 )   (33.5 )   (0.30 )
Net interest spread 4.07 % 4.02 % 4.25 % 0.05   % (0.18 ) %
Non-interest bearing deposits 5,309 5,213 5,044 96 265
Other liabilities 1,067 1,181 939 (114 ) 128
Stockholders' equity   3,807     3,753     3,712     54     95  
Total average liabilities and stockholders' equity $ 36,217   $ 36,556  

$

38,781     ($339 )   ($2,564 )
 
Net interest income / margin non-taxable equivalent basis $ 341.2   4.33 % $ 337.6   4.27 % $ 374.5   4.48 % $ 3.6     0.06   % ($33.3 )   (0.15 ) %
 

 
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE
(Unaudited)
 
  Six months ended   Six months ended      
($ amounts in millions; yields not on a taxable equivalent basis) June 30, 2012 June 30, 2011 Variance
Average   Income /   Yield / Average   Income /   Yield / Average Income / Yield /
  balance   Expense   Rate   balance   Expense   Rate   balance   Expense   Rate
Assets:
Interest earning assets:
Money market, trading and investment securities $ 6,790     $ 102.6   3.03 % $ 7,543     $ 126.5   3.36 %   ($753 )   ($23.9 )   (0.33 ) %
Loans not covered under loss sharing agreements with the FDIC:
  Commercial 10,341 252.7 4.91 11,139 276.3 5.00 (798 ) (23.6 ) (0.09 )
Construction 508 10.0 3.94 834 6.0 1.45 (326 ) 4.0 2.49
Mortgage 5,589 153.2 5.48 4,939 152.8 6.19 650 0.4 (0.71 )
Consumer 3,651 183.7 10.12 3,639 186.1 10.31 12 (2.4 ) (0.19 )
Lease financing   550       23.8   8.66   587       26.2   8.93   (37 )   (2.4 )   (0.27 )
Total loans not covered under loss sharing agreements with the FDIC 20,639 623.4 6.07 21,138 647.4 6.16 (499 ) (24.0 ) (0.09 )
Loans covered under loss sharing agreements with the FDIC   4,210       153.9   7.34   4,750       218.5   9.26   (540 )   (64.6 )   (1.92 )
Total loans   24,849       777.3   6.28   25,888       865.9   6.73   (1,039 )   (88.6 )   (0.45 )
Total interest earning assets   31,639     $ 879.9   5.58 %   33,431     $ 992.4   5.97 %   (1,792 )   ($112.5 )   (0.39 ) %
Allowance for loan losses (789 ) (742 ) (47 )
Other non-interest earning assets   5,536     6,086     (550 )
Total average assets $ 36,386   $ 38,775     ($2,389 )
 
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market $ 5,400 $ 12.3 0.46 % $ 5,166 $ 17.3 0.67 % $ 234 ($5.0 ) (0.21 ) %
Savings 6,535 12.4 0.38 6,249 22.6 0.73 286 (10.2 ) (0.35 )
Time deposits   10,022       75.5   1.51   11,063       107.7   1.96   (1,041 )   (32.2 )   (0.45 )
Total interest bearing deposits 21,957 100.2 0.92 22,478 147.6 1.32 (521 ) (47.4 ) (0.40 )
Borrowings   4,265       100.9   4.74   6,615       126.9   3.85   (2,350 )   (26.0 )   0.89  
Total interest bearing liabilities   26,222       201.1   1.54   29,093       274.5   1.90   (2,871 )   (73.4 )   (0.36 )
Net interest spread 4.04 % 4.07 % (0.03 ) %
Non-interest bearing deposits 5,261 4,985 276
Other liabilities 1,123 1,042 81
Stockholders' equity   3,780     3,655     125  
Total average liabilities and stockholders' equity $ 36,386   $ 38,775     ($2,389 )
 
Net interest income / margin non-taxable equivalent basis $ 678.8   4.30 % $ 717.9   4.32 % ($39.1 )   (0.02 ) %
 

 
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table F - Other Service Fees
(Unaudited)
 
  Quarters ended     Variance   Variance
June 30,   March 31, June 30, Q2 2012 vs. Q2 2012 vs.
(In thousands) 2012   2012   2011   Q1 2012   Q2 2011
Other service fees:
Debit card fees $ 9,411 $ 9,165 $ 13,795 $ 246 $ (4,384 )
Insurance fees 12,063 12,390 12,208 (327 ) (145 )
Credit card fees 14,268 12,559 11,792 1,709 2,476
Sale and administration of investment products 9,645 8,889 7,657 756 1,988
Mortgage servicing fees, net of fair value adjustments 6,335 12,931 2,269 (6,596 ) 4,066
Trust fees 4,069 4,081 4,110 (12 ) (41 )
Processing fees 1,639 1,774 1,740 (135 ) (101 )
  Other fees   4,597     4,250     4,736       347       (139 )
Total other service fees $ 62,027   $ 66,039   $ 58,307     $ (4,012 )   $ 3,720  
 
Six months ended Variance
June 30, June 30, 2012 vs.
(In thousands) 2012   2011   2011        
Other service fees:
Debit card fees $ 18,576 $ 26,720 $ (8,144 )
Insurance fees 24,453 24,134 319
Credit card fees 26,827 22,368 4,459
Sale and administration of investment products 18,534 14,787 3,747
Mortgage servicing fees, net of fair value adjustments 19,266 8,529 10,737
Trust fees 8,150 7,605 545
Processing fees 3,413 3,437 (24 )
  Other fees   8,847     9,379     (532 )        
Total other service fees $ 128,066   $ 116,959   $ 11,107          
 

 
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table G - Loans and Deposits
(Unaudited)
 
Loans - Ending Balances
      Variance
(in thousands)   June 30, 2012   March 31, 2012   June 30, 2011  

Q2 2012 vs. Q12012

 

Q2 2012 vs. Q22011

Loans not covered under FDIC loss sharing agreements:  
Commercial $ 9,602,815 $ 9,868,242 $ 10,072,883 $ (265,427 ) $ (470,068 )
Construction 249,743 236,579 267,902 13,164 (18,159 )
Legacy [1] 509,829 603,874 811,074 (94,045 ) (301,245 )
Lease financing 537,917 543,314 564,289 (5,397 ) (26,372 )
Mortgage 5,899,973 5,591,745 5,347,512 308,228 552,461
Consumer     3,865,532     3,634,920     3,594,034     230,612       271,498  
Total non-covered loans held-in-portfolio 20,665,809 $ 20,478,674 $ 20,657,694 $ 187,135 $ 8,115
Loans covered under FDIC loss sharing agreements     4,016,330     4,221,788     4,616,575     (205,458 )     (600,245 )
Total loans held-in-portfolio   $ 24,682,139   $ 24,700,462   $ 25,274,269   $ (18,323 )   $ (592,130 )
Loans held-for-sale:
Commercial 18,072 $ 24,879 $ 57,998 $ (6,807 ) $ (39,926 )
Construction 160,102 206,246 340,687 (46,144 ) (180,585 )
Legacy [1] 425 1,115 - (690 ) 425
Mortgage     185,938     129,356     110,361     56,582       75,577  
Total loans held-for-sale     364,537     361,596     509,046     2,941       (144,509 )
Total loans   $ 25,046,676   $ 25,062,058   $ 25,783,315   $ (15,382 )   $ (736,639 )
[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 reportable segment.
 
Deposits - Ending Balances
Variance
(In thousands)   June 30, 2012   March 31, 2012   June 30, 2011  

Q2 2012 vs. Q12012

 

Q2 2012 vs. Q22011

Demand deposits [1] $ 6,379,289 $ 6,013,009 $ 6,285,171 $ 366,280 $ 94,118
Savings, NOW and money market deposits (non-brokered) 11,031,476 11,048,140 10,724,099 (16,664 ) 307,377
Savings, NOW and money market deposits (brokered) 433,694 212,996 50,000 220,698 383,694
Time deposits (non-brokered) 6,950,063 7,186,826 8,179,689 (236,763 ) (1,229,626 )
Time deposits (brokered CDs)     2,620,258     2,736,765     2,721,470     (116,507 )     (101,212 )
Total deposits   $ 27,414,780   $ 27,197,736   $ 27,960,429   $ 217,044     $ (545,649 )
[1] Includes interest and non-interest bearing deposits.
 

           
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table H - Non-Performing Assets
(Unaudited)
Variance
(Dollars in thousands)   June 30, 2012   As a percentage of loans HIP by category     March 31, 2012   As a percentage of loans HIP by category     June 30, 2011     As a percentage of loans HIP by category     Q2 2012 vs. Q1 2012   Q2 2012 vs. Q2 2011
Non-accrual loans:
Commercial $ 767,201 8.0 % $ 818,678 8.3 % $ 739,772 7.3 % $ (51,477 ) $ 27,429
Construction 67,538 27.0 69,470 29.4 118,823 44.4 (1,932 ) (51,285 )
Legacy [1] 54,730 10.7 79,077 13.1 124,479 15.3 (24,347 ) (69,749 )
Lease financing 5,046 0.9 5,673 1.0 4,205 0.7 (627 ) 841
Mortgage 632,899 10.7 667,217 11.9 587,987 11.0 (34,318 ) 44,912
Consumer     34,665   0.9       41,688   1.1       49,424     1.4       (7,023 )     (14,759 )

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

1,562,079 7.6 % 1,681,803 8.2 % 1,624,690 7.9 % (119,724 ) (62,611 )
Non-performing loans held-for-sale [2] 178,652 232,293 399,869 (53,641 ) (221,217 )
Other real estate owned (“OREO”), excluding covered OREO
    226,629           193,768           162,419             32,861       64,210  
Total non-performing assets, excluding covered assets
1,967,360 2,107,864 2,186,978 (140,504 ) (219,618 )
Covered loans and OREO     209,793           203,254           89,782             6,539       120,011  
Total non-performing assets   $ 2,177,153         $ 2,311,118         $ 2,276,760           $ (133,965 )   $ (99,607 )
Accruing loans past due 90 days or more [3]   $ 322,893         $ 328,757         $ 325,980           $ (5,864 )   $ (3,087 )
Ratios excluding covered loans:
Non-performing loans held-in-portfolio to loans held-in-portfolio
7.56

%

 

8.21 % 7.86 %
Allowance for loan losses to loans held-in-portfolio
3.14 3.25 3.34
Allowance for loan losses to non-performing loans, excluding held-for-sale
 
    41.52           39.53           42.45                
Ratios including covered loans:
Non-performing loans held-in-portfolio to loans held-in-portfolio
6.67

%

 

7.18 % 6.49 %
Allowance for loan losses to loans held-in-portfolio
3.10 3.25 2.95
Allowance for loan losses to non-performing loans, excluding held-for-sale     46.52           45.27           45.55                
[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 reportable segment.
[2] Non-performing loans held-for-sale as of June 30, 2012 consisted of $160 million in construction loans, $18 million in commercial loans and $53 thousand in mortgage loans (March 31, 2012 - $206 million, $26 million and $53 thousand, respectively; June 30, 2011 - $341 million, $58 million, and $1 million, respectively).
[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 nonperforming since the principal repayment is insured. These balances include $48 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of June 30, 2012.
 

           
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table I - Activity in Non-Performing Loans
(Unaudited)
 
Commercial loans held-in-portfolio:                        
Quarter ended June 30, 2012 Quarter ended March 31, 2012
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning Balance NPLs $ 620,916 $ 197,762 $ 818,678 $ 631,171 $ 198,921 $ 830,092
Plus:
New non-performing loans 63,963 31,317 95,280 86,446 30,608 117,054
Advances on existing non-performing loans - 145 145 - 227 227
Loans transferred from held-for-sale - 4,933 4,933 - - -
Less:
Non-performing loans transferred to OREO (10,043 ) (16,633 ) (26,676 ) (5,481 ) (10,434 ) (15,915 )
Non-performing loans charged-off (36,698 ) (15,385 ) (52,083 ) (37,924 ) (15,121 ) (53,045 )
Loans returned to accrual status / loan collections (47,085 ) (25,224 ) (72,309 ) (53,296 ) (6,439 ) (59,735 )
  Loans transferred to held-for-sale     -       (767 )     (767 )     -       -       -  
Ending balance NPLs   $ 591,053     $ 176,148     $ 767,201     $ 620,916     $ 197,762     $ 818,678  
 
 
 
Construction loans held-in-portfolio:                        
Quarter ended June 30, 2012 Quarter ended March 31, 2012
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning Balance NPLs $ 56,247 $ 13,223 $ 69,470 $ 53,859 $ 42,427 $ 96,286
Plus:
New non-performing loans 833 - 833 6,372 - 6,372
Advances on existing non-performing loans 145 204 349 - 125 125
Less:
Non-performing loans charged-off (1,000 ) - (1,000 ) (371 ) (1,380 ) (1,751 )
Loans returned to accrual status / loan collections (691 ) (1,423 ) (2,114 ) (3,613 ) (17,617 ) (21,230 )
  Loans transferred to held-for-sale     -       -       -       -       (10,332 )     (10,332 )
Ending balance NPLs   $ 55,534     $ 12,004     $ 67,538     $ 56,247     $ 13,223     $ 69,470  
 
 
 
Mortgage loans held-in-portfolio:                        
Quarter ended June 30, 2012 Quarter ended March 31, 2012
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning Balance NPLs $ 633,517 $ 33,700 $ 667,217 $ 649,279 $ 37,223 $ 686,502
Plus:
New non-performing loans 177,849 6,476 184,325 186,510 6,256 192,766
Less:
Non-performing loans transferred to OREO (19,423 ) (3,107 ) (22,530 ) (21,573 ) (1,064 ) (22,637 )
Non-performing loans charged-off (20,575 ) (2,128 ) (22,703 ) (20,427 ) (3,496 ) (23,923 )
  Loans returned to accrual status / loan collections     (171,286 )     (2,124 )     (173,410 )     (160,272 )     (5,219 )     (165,491 )
Ending balance NPLs   $ 600,082     $ 32,817     $ 632,899     $ 633,517     $ 33,700     $ 667,217  
 
 
 
Legacy loans held-in-portfolio:                        
Quarter ended June 30, 2012 Quarter ended March 31, 2012
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning Balance NPLs $ - $ 79,077 $ 79,077 $ - $ 75,660 $ 75,660
Plus:
New non-performing loans - 8,355 8,355 - 17,373 17,373
Advances on existing non-performing loans - 1 1 - 16 16
Less:
Non-performing loans transferred to OREO - (65 ) (65 ) - (3,370 ) (3,370 )
Non-performing loans charged-off - (8,271 ) (8,271 ) - (8,489 ) (8,489 )
Loans returned to accrual status / loan collections - (9,797 ) (9,797 ) - (1,441 ) (1,441 )
  Loans transferred to held-for-sale     -       (14,570 )     (14,570 )     -       (672 )     (672 )
Ending balance NPLs   $ -     $ 54,730     $ 54,730     $ -     $ 79,077     $ 79,077  
 

                 
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios
(Unaudited)
 
Quarter ended Quarter ended Quarter ended
June 30, March 31, June 30,
(Dollars in thousands)   2012   2012   2012   2012   2012   2012   2011   2011   2011
Allowance for loan losses:   Non-covered loans   Covered loans   Total   Non-covered loans   Covered loans   Total   Non-covered loans   Covered loans   Total
Balance at beginning of period $ 664,768 $ 138,496 $ 803,264 $ 690,363 $ 124,945 $ 815,308 $ 727,346 $ 9,159 $ 736,505
Provision for loan losses     81,743       37,456     119,199       82,514       18,209     100,723       95,712       48,605     144,317  
      746,511       175,952     922,463       772,877       143,154     916,031       823,058       57,764     880,822  
Net loans charged-off (recovered):
BPPR
Commercial 28,564 34,652 63,216 37,518 4,102 41,620 49,923 263 50,186
Construction 985 15,187 16,172 (371 ) 264 (107 ) (5,944 ) - (5,944 )
Lease financing 8 - 8 154 - 154 632 - 632
Mortgage 14,810 4,085 18,895 12,226 203 12,429 7,151 - 7,151
Consumer     23,055       4,533     27,588       24,131       89     24,220       27,363       332     27,695  
Total BPPR     67,422       58,457     125,879       73,658       4,658     78,316       79,125       595     79,720  
 
BPNA
Commercial 11,132 11,132 16,865 16,865 18,854 18,854
Construction (4 ) (4 ) 166 166 491 491
Lease financing - - - - - -
Legacy [1] 5,459 5,459 3,558 3,558 17,373 17,373
Mortgage 3,371 3,371 5,228 5,228 4,030 4,030
Consumer     10,596           10,596       8,634           8,634       13,507           13,507  
Total BPNA     30,554           30,554       34,451           34,451       54,255           54,255  
Total loans charged-off (recovered) - Popular, Inc.     97,976       58,457     156,433       108,109       4,658     112,767       133,380       595     133,975  
Net write-downs (recoveries) related to loans transferred to loans held-for-sale     -       -     -       -       -     -       -       -     -  
Balance at end of period   $ 648,535     $ 117,495   $ 766,030     $ 664,768     $ 138,496   $ 803,264     $ 689,678     $ 57,169   $ 746,847  
 
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio
1.93

%

 

2.56

%

 

2.13

%

 

1.83

%

 

2.59

%

 

2.12

%

Provision for loan losses to net charge-offs 0.83

x

 

0.76

x

 

0.76

x

 

0.89

x

 

0.72

x

 

1.08

x

 
BPPR
Annualized net charge-offs to average loans held-in-portfolio
1.85

%

 

2.69

%

 

2.01

%

 

1.65

%

 

2.21

%

 

1.68

%

Provision for loan losses to net charge-offs 0.99

x

 

0.83

x

 

0.92

x

 

1.10

x

 

0.89

x

 

1.50

x

 
BPNA
Annualized net charge-offs to average loans held-in-portfolio
2.15

%

 

2.43

%

 

3.45

%

Provision for loan losses to net charge-offs             0.50

x

 

          0.43

x

 

          0.46

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 reportable segment.
 

             
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED
(Unaudited)
 
                                             
June 30, 2012
(Dollars in thousands)     Commercial     Construction   Legacy [3]     Mortgage     Lease financing     Consumer     Total [2]
Specific ALLL $ 6,830 $ 434 $ 99 $ 59,723 $ 766 $ 19,656 $ 87,508
Impaired loans [1] $ 495,032 $ 61,007 $ 29,289 $ 510,659 $ 5,528 $ 133,857 $ 1,235,372
Specific ALLL to impaired loans [1]     1.38 %     0.71 %     0.34 %     11.70 %     13.86 %     14.68 %     7.08 %
General ALLL $ 289,934 $ 8,708 $ 43,912 $ 90,099 $ 2,191 $ 126,183 $ 561,027
Loans held-in-portfolio, excluding impaired loans [1] $ 9,107,783 $ 188,736 $ 480,540 $ 5,389,314 $ 532,389 $ 3,731,675 $ 19,430,437
General ALLL to loans held-in-portfolio, excluding impaired loans [1]     3.18 %     4.61 %     9.14 %     1.67 %     0.41 %     3.38 %     2.89 %
Total ALLL $ 296,764 $ 9,142 $ 44,011 $ 149,822 $ 2,957 $ 145,839 $ 648,535
Total non-covered loans held-in-portfolio [1] $ 9,602,815 $ 249,743 $ 509,829 $ 5,899,973 $ 537,917 $ 3,865,532 $ 20,665,809
ALLL to loans held-in-portfolio [1]     3.09 %     3.66 %     8.63 %     2.54 %     0.55 %     3.77 %     3.14 %
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction.

[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of June 30, 2012, the general allowance on the covered loans amounted to $103 million, while the specific reserve amounted to $14 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.
                                             
March 31, 2012
(Dollars in thousands)     Commercial     Construction   Legacy     Mortgage     Lease financing     Consumer     Total [2]
Specific ALLL $ 12,998 $ 1,013 $ 765 $ 40,946 $ 1,344 $ 18,990 $ 76,056
Impaired loans [1] $ 552,152 $ 64,149 $ 47,731 $ 450,754 $ 5,412 $ 138,200 $ 1,258,398
Specific ALLL to impaired loans [1]     2.35 %     1.58 %     1.60 %     9.08 %     24.83 %     13.74 %     6.04 %
General ALLL $ 300,581 $ 8,120 $ 53,960 $ 84,533 $ 3,623 $ 137,895 $ 588,712
Loans held-in-portfolio, excluding impaired loans [1] $ 9,316,090 $ 172,430 $ 556,143 $ 5,140,991 $ 537,902 $ 3,496,720 $ 19,220,276
General ALLL to loans held-in-portfolio, excluding impaired loans [1]     3.23 %     4.71 %     9.70 %     1.64 %     0.67 %     3.94 %     3.06 %
Total ALLL $ 313,579 $ 9,133 $ 54,725 $ 125,479 $ 4,967 $ 156,885 $ 664,768
Total non-covered loans held-in-portfolio [1] $ 9,868,242 $ 236,579 $ 603,874 $ 5,591,745 $ 543,314 $ 3,634,920 $ 20,478,674
ALLL to loans held-in-portfolio [1]     3.18 %     3.86 %     9.06 %     2.24 %     0.91 %     4.32 %     3.25 %
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction.

[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of March 31, 2012, the general allowance on the covered loans amounted to $106 million, while the specific reserve amounted to $32 million.

 

                                           
                                             
Variance June 30, 2012 versus March 31, 2012
(Dollars in thousands)     Commercial     Construction   Legacy     Mortgage     Lease financing     Consumer     Total  
Specific ALLL $ (6,168) $ (579) $ (666) $ 18,777 $ (578) $ 666 $ 11,452
Impaired loans $ (57,120) $ (3,142) $ (18,442) $ 59,905 $ 116 $ (4,343) $ (23,026)
                                             
General ALLL $ (10,647) $ 588 $ (10,048) $ 5,566 $ (1,432) $ (11,712) $ (27,685)
Loans held-in-portfolio, excluding impaired loans $ (208,307) $ 16,306 $ (75,603) $ 248,323 $ (5,513) $ 234,955 $ 210,161
                                             
Total ALLL $ (16,815) $ 9 $ (10,714) $ 24,343 $ (2,010) $ (11,046) $ (16,233)
Total non-covered loans held-in-portfolio $ (265,427) $ 13,164 $ (94,045) $ 308,228 $ (5,397) $ 230,612 $ 187,135
 

           
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - BANCO POPULAR DE PUERTO RICO
(Unaudited)
 
As of June 30, 2012
Banco Popular de Puerto Rico
(In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total
Allowance for credit losses:
Specific ALLL non-covered loans $ 5,497 $ 434 $ 44,708 $ 766 $ 19,564 $ 70,969
  General ALLL non-covered loans     198,349       7,030       75,631       2,191       92,387       375,588  
ALLL - non-covered loans     203,846       7,464       120,339       2,957       111,951       446,557  
Specific ALLL covered loans 14,278 - - - - 14,278
  General ALLL covered loans     61,314       23,628       11,617       -       6,658       103,217  
ALLL - covered loans     75,592       23,628       11,617       -       6,658       117,495  
Total ALLL   $ 279,438     $ 31,092     $ 131,956     $ 2,957     $ 118,609     $ 564,052  
Loans held-in-portfolio:
Impaired non-covered loans $ 378,660 $ 49,003 $ 457,359 $ 5,528 $ 131,495 $ 1,022,045
  Non-covered loans held-in-portfolio, excluding impaired loans     5,784,620       152,761       4,356,862       532,389       3,067,554       13,894,186  
Non-covered loans held-in-portfolio     6,163,280       201,764       4,814,221       537,917       3,199,049       14,916,231  
Impaired covered loans 76,695 - - - - 76,695
  Covered loans held-in-portfolio, excluding impaired loans     2,254,481       469,765       1,116,476       -       98,913       3,939,635  
Covered loans held-in-portfolio     2,331,176       469,765       1,116,476       -       98,913       4,016,330  
Total loans held-in-portfolio   $ 8,494,456     $ 671,529     $ 5,930,697     $ 537,917     $ 3,297,962     $ 18,932,561  
 
 
As of March 31, 2012
Banco Popular de Puerto Rico
(In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total
Allowance for credit losses:
Specific ALLL non-covered loans $ 11,115 $ 1,013 $ 27,096 $ 1,344 $ 18,887 $ 59,455
  General ALLL non-covered loans     210,214       5,658       69,411       3,623       99,175       388,081  
ALLL - non-covered loans     221,329       6,671       96,507       4,967       118,062       447,536  
Specific ALLL covered loans 32,489 - - - - 32,489
  General ALLL covered loans     57,581       29,727       10,517       -       8,182       106,007  
ALLL - covered loans     90,070       29,727       10,517       -       8,182       138,496  
Total ALLL   $ 311,399     $ 36,398     $ 107,024     $ 4,967     $ 126,244     $ 586,032  
Loans held-in-portfolio:
Impaired non-covered loans $ 402,097 $ 51,023 $ 396,854 $ 5,412 $ 135,745 $ 991,131
  Non-covered loans held-in-portfolio, excluding impaired loans     6,027,572       124,745       4,363,491       537,902       2,815,758       13,869,468  
Non-covered loans held-in-portfolio     6,429,669       175,768       4,760,345       543,314       2,951,503       14,860,599  
Impaired covered loans 85,855 - - - - 85,855
  Covered loans held-in-portfolio, excluding impaired loans     2,345,846       532,433       1,150,996       -       106,658       4,135,933  
Covered loans held-in-portfolio     2,431,701       532,433       1,150,996       -       106,658       4,221,788  
Total loans held-in-portfolio   $ 8,861,370     $ 708,201     $ 5,911,341     $ 543,314     $ 3,058,161     $ 19,082,387  
 
                           
Variance June 30, 2012 versus March 31, 2012
(In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total
Allowance for credit losses:
Specific ALLL non-covered loans $ (5,618 ) $ (579 ) $ 17,612 $ (578 ) $ 677 $ 11,514
  General ALLL non-covered loans     (11,865 )     1,372       6,220       (1,432 )     (6,788 )     (12,493 )
ALLL - non-covered loans     (17,483 )     793       23,832       (2,010 )     (6,111 )     (979 )
Specific ALLL covered loans (18,211 ) - - - - (18,211 )
  General ALLL covered loans     3,733       (6,099 )     1,100       -       (1,524 )     (2,790 )
ALLL - covered loans     (14,478 )     (6,099 )     1,100       -       (1,524 )     (21,001 )
Total ALLL   $ (31,961 )   $ (5,306 )   $ 24,932     $ (2,010 )   $ (7,635 )   $ (21,980 )
Loans held-in-portfolio:
Impaired non-covered loans $ (23,437 ) $ (2,020 ) $ 60,505 $ 116 $ (4,250 ) $ 30,914
  Non-covered loans held-in-portfolio, excluding impaired loans     (242,952 )     28,016       (6,629 )     (5,513 )     251,796       24,718  
Non-covered loans held-in-portfolio     (266,389 )     25,996       53,876       (5,397 )     247,546       55,632  
Impaired covered loans (9,160 ) - - - - (9,160 )
  Covered loans held-in-portfolio, excluding impaired loans     (91,365 )     (62,668 )     (34,520 )     -       (7,745 )     (196,298 )
Covered loans held-in-portfolio     (100,525 )     (62,668 )     (34,520 )     -       (7,745 )     (205,458 )
Total loans held-in-portfolio   $ (366,914 )   $ (36,672 )   $ 19,356     $ (5,397 )   $ 239,801     $ (149,826 )
 

           
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - BANCO POPULAR NORTH AMERICA
(Unaudited)
   
As of June 30, 2012
Banco Popular North America
(In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total
Allowance for credit losses:
Specific ALLL $ 1,333 $ - $ 99 $ 15,015 $ 92 $ 16,539
  General ALLL     91,585       1,678       43,912       14,468       33,796       185,439  
Total ALLL   $ 92,918     $ 1,678     $ 44,011     $ 29,483     $ 33,888     $ 201,978  
Loans held-in-portfolio:
Impaired loans $ 116,372 $ 12,004 $ 29,289 $ 53,300 $ 2,362 $ 213,327
  Loans held-in-portfolio, excluding impaired loans     3,323,163       35,975       480,540       1,032,452       664,121       5,536,251  
Total loans held-in-portfolio   $ 3,439,535     $ 47,979     $ 509,829     $ 1,085,752     $ 666,483     $ 5,749,578  
 
 
As of March 31, 2012
Banco Popular North America
(In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total
Allowance for credit losses:
Specific ALLL $ 1,883 $ - $ 765 $ 13,850 $ 103 $ 16,601
  General ALLL     90,367       2,462       53,960       15,122       38,720       200,631  
Total ALLL   $ 92,250     $ 2,462     $ 54,725     $ 28,972     $ 38,823     $ 217,232  
Loans held-in-portfolio:
Impaired loans $ 150,055 $ 13,126 $ 47,731 $ 53,900 $ 2,455 $ 267,267
  Loans held-in-portfolio, excluding impaired loans     3,288,518       47,685       556,143       777,500       680,962       5,350,808  
Total loans held-in-portfolio   $ 3,438,573     $ 60,811     $ 603,874     $ 831,400     $ 683,417     $ 5,618,075  
 
                             
Variance June 30, 2012 versus March 31, 2012
(In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total
Allowance for credit losses:
Specific ALLL $ (550 ) $ - $ (666 ) $ 1,165 $ (11 ) $ (62 )
  General ALLL     1,218       (784 )     (10,048 )     (654 )     (4,924 )     (15,192 )
Total ALLL   $ 668     $ (784 )   $ (10,714 )   $ 511     $ (4,935 )   $ (15,254 )
Loans held-in-portfolio:
Impaired loans $ (33,683 ) $ (1,122 ) $ (18,442 ) $ (600 ) $ (93 ) $ (53,940 )
  Loans held-in-portfolio, excluding impaired loans     34,645       (11,710 )     (75,603 )     254,952       (16,841 )     185,443  
Total loans held-in-portfolio   $ 962     $ (12,832 )   $ (94,045 )   $ 254,352     $ (16,934 )   $ 131,503  
 

   
Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table N - Reconciliation to GAAP Financial Measures
(Unaudited)
 
 
(In thousands, except share or per share information)   June 30, 2012   March 31, 2012   June 30, 2011
Total stockholders’ equity $ 4,021,237 $ 3,967,071 $ 3,964,068
Less: Preferred stock (50,160) (50,160) (50,160)
Less: Goodwill (647,757) (647,911) (647,318)
Less: Other intangibles     (59,243)       (61,798)       (54,186)  
Total tangible common equity   $ 3,264,077     $ 3,207,202     $ 3,212,404  
Total assets $ 36,612,179 $ 37,049,221 $ 39,108,422
Less: Goodwill (647,757) (647,911) (647,318)
Less: Other intangibles     (59,243)       (61,798)       (54,186)  
Total tangible assets   $ 35,905,179     $ 36,339,512     $ 38,406,918  
Tangible common equity to tangible assets 9.09 % 8.83 % 8.36 %
Common shares outstanding at end of period [1] 102,824,323 102,711,707 102,397,790
Tangible book value per common share [1]   $ 31.74     $ 31.23     $ 31.37  
[1] All share and per share data has been adjusted to retroactively reflect the 1-for-10 reverse stock split effected on May 29, 2012.
 
 
(In thousands)   June 30, 2012   March 31, 2012   June 30, 2011
Common stockholders’ equity $ 3,971,077 $ 3,916,911 $ 3,913,908
Less: Unrealized gains on available-for-sale securities, net of tax [1] (181,207) (196,878) (188,171)
Less: Disallowed deferred tax assets [2] (392,960) (257,440) (271,139)
Less: Intangible assets:
Goodwill (647,757) (647,911) (647,318)
Other disallowed intangibles (22,241) (26,149) (22,596)
Less: Aggregate adjusted carrying value of all non-financial equity investments (1,256) (1,175) (1,540)

Add: Pension liability adjustment, net of tax and accumulated net gains (losses) on cash flow hedges

[3]   208,015       211,747       125,605  
Total Tier 1 common equity   $ 2,933,671     $ 2,999,105     $ 2,908,749  
 
[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 $151 million of the Corporation’s $573 million of net deferred tax assets at June 30, 2012 (March 31, 2012 - $138 million and $424 million, respectively; June 30, 2011 - $96 million and $362 million, respectively), were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $393 million of such assets at June 30, 2012 (March 31, 2012 - $257 million; June 30, 2011 - $271 million) exceeded the limitation imposed by these guidelines and, as “disallowed deferred tax assets”, were deducted in arriving at Tier 1 capital. The remaining $29 million of the Corporation’s other net deferred tax assets at June 30, 2012 (March 31, 2012 - $29 million; June 30, 2011 - $5 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 liability 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 Second Quarter 2012 Earnings Release
Table O - Financial Information - Westernbank Covered Loans
(Unaudited)
 
 

Revenues:

Quarter ended
(In thousands)   June 30, 2012   March 31, 2012   Variance
Interest income on covered loans   $ 79,094     $ 74,764     $ 4,330  
FDIC loss share income (expense):
Amortization of indemnification asset (37,413 ) (29,375 ) (8,038 )
80% mirror accounting on credit impairment losses [1] 29,426 13,422 16,004
80% mirror accounting on discount accretion on unfunded commitments (248 ) (248 ) -
80% mirror accounting on reimbursable expenses 10,663 1,805 8,858
Other     147       (859 )     1,006  
  Total FDIC loss share income (expense)     2,575       (15,255 )     17,830  
Other non-interest income     310       310       -  
Total revenues     81,979       59,819       22,160  
Provision for loan losses     37,456       18,209       19,247  
Total revenues less provision for loan losses   $ 44,523     $ 41,610     $ 2,913  

[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.

 

Quarterly average assets:

Quarter ended
(In millions)   June 30, 2012   March 31, 2012   Variance
Covered loans $ 4,129 $ 4,292 $ (163 )
FDIC loss share asset     1,700       1,903       (203 )
 
 
 

Activity in the carrying amount and accretable yield of covered loans accounted for under ASC 310-30:

                   
Quarter ended Quarter ended
      June 30, 2012   March 31, 2012
(In thousands)   Accretable yield   Carrying amount of loans   Accretable yield   Carrying amount of loans
Beginning balance $ 1,542,519 $ 3,894,905 $ 1,470,259 $ 4,036,471
Accretion (73,988 ) 73,988 (69,337 ) 69,337
Changes in expected cash flows 106,319 141,597
Collections / charge-offs         (253,381 )         (210,903 )
Ending balance 1,574,850 3,715,512 1,542,519 3,894,905
  Allowance for loan losses - ASC 310-30 covered loans       (93,971 )         (94,559 )
Ending balance, net of allowance for loan losses   $ 1,574,850     $ 3,621,541     $ 1,542,519     $ 3,800,346  
 
 
 

Activity in the carrying amount of the FDIC indemnity asset:

                   
Quarter ended Quarter ended
(In thousands)       June 30, 2012     March 31, 2012
Balance at beginning of period $ 1,880,357 $ 1,915,128
Amortization (37,413 ) (29,375 )
Credit impairment losses to be covered under loss sharing agreements 29,426 13,422
Decrease due to reciprocal accounting on the discount accretion on unfunded commitments (248 ) (248 )
Payments received from FDIC under loss sharing agreements (241,911 ) (20,896 )
Other adjustments attributable to FDIC loss sharing agreements       1,383           2,326  
Balance at end of period       $ 1,631,594         $ 1,880,357  
 

Activity in the remaining FDIC loss share asset amortization:

             
Quarter ended Quarter ended
(In thousands)       June 30, 2012     March 31, 2012
Balance at beginning of period $ 106,781 $ 117,916
Amortization (37,413 ) (29,375 )
Impact of lower projected losses         51,940           18,240  
Balance at end of period       $ 121,308         $ 106,781  
 




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