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Popular, Inc. Reports Net Income Of $47.2 Million For The Quarter Ended September 30, 2012

Stocks in this article: BPOP

Founded in 1893, Popular, Inc. is the leading banking institution by both assets and deposits in Puerto Rico and ranks 36th 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 Friday, October 19, 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 866-713-8565 or 617-597-5324. The conference code is 49080948.

A replay of the webcast will be archived in Popular’s website during the respective period. A telephone replay will be available from 12:30 p.m. on Friday, October 19, 2012 to 11:59 p.m. on Friday, October 26, 2012, at 888-286-8010 or 617-801-6888. The replay passcode is 67907864.

Popular, Inc.
Financial Supplement to Third 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 - 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 Covered Loans

POPULAR, INC.
Financial Supplement to Third Quarter 2012 Earnings Release
Table A - Selected Ratios and Other Information
(Unaudited)
         
                     
Quarter ended Quarter ended Quarter ended Nine months ended Nine months ended
September 30, June 30, September 30, September 30, September 30,
    2012   2012   2011   2012   2011
Net income per common share:
Basic and diluted [1] $0.45 $0.63 $0.26 $1.55 $1.42
 
Average common shares outstanding [1] 102,451,410 102,295,113 102,166,004 102,363,099 102,147,450
Average common shares outstanding - assuming dilution [1] 102,484,960 102,410,618 102,166,004 102,666,664 102,251,720
Common shares outstanding at end of period [1] 103,097,143 102,824,323 102,447,540 103,097,143 102,447,540
 
Market value per common share [1] $17.45 $16.61 $15.00 $17.45 $15.00
 
Market Capitalization --- (In millions) $1,799 $1,708 $1,537 $1,799 $1,537
 
Return on average assets 0.52 % 0.73 % 0.29 % 0.59 % 0.52 %
 
Return on average common equity 4.81 % 6.94 % 2.81 % 5.63 % 5.33 %
 
Net interest margin [2] 4.37 % 4.33 % 4.45 % 4.33 % 4.36 %
 
Common equity per share [1] $38.98 $38.62 $38.68 $38.98 $38.68
 
Tangible common book value per common share (non-GAAP) [1] $32.15 $31.74 $31.72 $32.15 $31.72
 
Tangible common equity to tangible assets (non-GAAP) 9.26 % 9.09 % 8.65 % 9.26 % 8.65 %
 
Tier 1 risk-based capital [3] 16.81 % 16.31 % 15.79 % 16.81 % 15.79 %
 
Total risk-based capital [3] 18.09 % 17.59 % 17.07 % 18.09 % 17.07 %
 
Tier 1 leverage [3] 11.40 % 11.09 % 10.56 % 11.40 % 10.56 %
 
Tier 1 common equity to risk-weighted assets (non-GAAP) [3] 12.72 % 12.29 % 12.00 % 12.72 % 12.00 %
 
 
[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 estimated.
 

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

(In thousands, except per share information)

September 30, June 30, Q3 2012 vs. September 30, Q3 2012 vs. September 30, September 30,
  2012   2012   Q2 2012   2011   Q3 2011   2012   2011
Interest income:
Loans $ 387,381 $ 389,342 $ (1,961 ) $ 428,999 $ (41,618 ) $ 1,164,665 $ 1,294,834
Money market investments 862 964 (102 ) 886 (24 ) 2,774 2,759
Investment securities 39,945 43,813 (3,868 ) 51,085 (11,140 ) 128,828 157,183
  Trading account securities     5,815       5,963       (148 )     10,788       (4,973 )     17,669       29,332  
    Total interest income     434,003       440,082       (6,079 )     491,758       (57,755 )     1,313,936       1,484,108  
Interest expense:
Deposits 43,000 48,514 (5,514 ) 65,868 (22,868 ) 143,193 213,419
Short-term borrowings 9,876 13,044 (3,168 ) 13,744 (3,868 ) 36,503 41,478
  Long-term debt     37,701       37,324       377       42,835       (5,134 )     112,032       141,999  
    Total interest expense     90,577       98,882       (8,305 )     122,447       (31,870 )     291,728       396,896  
Net interest income 343,426 341,200 2,226 369,311 (25,885 ) 1,022,208 1,087,212
Provision for loan losses - non-covered loans 83,589 81,743 1,846 150,703 (67,114 ) 247,846 306,177
Provision for loan losses - covered loans     22,619       37,456       (14,837 )     25,573       (2,954 )     78,284       89,735  
Net interest income after provision for loan losses     237,218       222,001       15,217       193,035       44,183       696,078       691,300  
Service charges on deposit accounts 45,858 46,130 (272 ) 46,346 (488 ) 138,577 138,778
Other service fees 64,784 62,027 2,757 62,664 2,120 192,850 179,623
Net gain (loss) on sale and valuation adjustments of investment securities 64 (349 ) 413 8,134 (8,070 ) (285 ) 8,044
Trading account (loss) profit (2,266 ) (7,283 ) 5,017 2,912 (5,178 ) (11,692 ) 3,287
Net gain (loss) on sale of loans, including valuation adjustments
on loans held-for-sale 18,495 (15,397 ) 33,892 20,294 (1,799 ) 18,569 14,756
Adjustments (expense) to indemnity reserves on loans sold (8,717 ) (5,398 ) (3,319 ) (10,285 ) 1,568 (17,990 ) (29,587 )
FDIC loss share (expense) income (6,707 ) 2,575 (9,282 ) (5,361 ) (1,346 ) (19,387 ) 49,344
Fair value change in equity appreciation instrument - - - - - - 8,323
Other operating income     4,198       11,419       (7,221 )     (2,314 )     6,512       32,699       38,350  
    Total non-interest income     115,709       93,724       21,985       122,390       (6,681 )     333,341       410,918  
Operating expenses:
Personnel costs
Salaries 74,339 75,881 (1,542 ) 77,455 (3,116 ) 227,119 227,944
Commissions, incentives and other bonuses 12,800 14,359 (1,559 ) 11,630 1,170 39,885 33,548
Pension, postretirement and medical insurance 15,984 16,114 (130 ) 11,385 4,599 50,523 36,181
  Other personnel costs, including payroll taxes     8,427       9,982       (1,555 )     11,254       (2,827 )     31,850       31,150  
Total personnel costs 111,550 116,336 (4,786 ) 111,724 (174 ) 349,377 328,823
Net occupancy expenses 24,409 24,963 (554 ) 25,885 (1,476 ) 73,534 76,428
Equipment expenses 11,447 10,900 547 10,517 930 33,688 33,314
Other taxes 12,666 12,074 592 12,391 275 38,178 38,986
Professional fees 53,412 52,127 1,285 48,756 4,656 153,644 144,923
Communications 6,500 6,645 (145 ) 6,800 (300 ) 20,276 21,198
Business promotion 14,924 16,980 (2,056 ) 14,650 274 44,754 35,842
FDIC deposit insurance 24,173 22,907 1,266 23,285 888 72,006 68,640
Loss on early extinguishment of debt 43 25,072 (25,029 ) 109 (66 ) 25,184 8,637
Other real estate owned (OREO) 5,896 2,380 3,516 3,234 2,662 22,441 11,885
Credit and debit card processing, volume, interchange and other 5,442 4,960 482 5,416 26 15,083 13,565
Other operating expenses 17,412 30,004 (12,592 ) 17,125 287 58,631 49,990
Amortization of intangibles     2,481       2,531       (50 )     2,463       18       7,605       6,973  
    Total operating expenses     290,355       327,879       (37,524 )     282,355       8,000       914,401       839,204  
Income (loss) before income tax     62,572       (12,154 )     74,726       33,070       29,502       115,018       263,014  
Income tax expense (benefit)     15,384       (77,893 )     93,277       5,537       9,847       (46,317 )     114,664  
Net income   $ 47,188     $ 65,739     $ (18,551 )   $ 27,533     $ 19,655     $ 161,335     $ 148,350  
Net income applicable to common stock   $ 46,257     $ 64,809     $ (18,552 )   $ 26,602     $ 19,655     $ 158,543     $ 145,558  
Net income per common share - basic [1]   $ 0.45     $ 0.63     $ (0.18 )   $ 0.26     $ 0.19     $ 1.55     $ 1.42  
Net income per common share - diluted [1]   $ 0.45     $ 0.63     $ (0.18 )   $ 0.26     $ 0.19     $ 1.55     $ 1.42  
[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 Third Quarter 2012 Earnings Release
Table C - Consolidated Statement of Financial Condition
(Unaudited)        
    Variance
September 30, June 30, September 30, Q3 2012 vs.
(In thousands)   2012   2012   2011   Q2 2012
Assets:
Cash and due from banks $ 477,342 $ 515,338 $ 567,141 $ (37,996 )
Money market investments 925,663 949,828 1,269,139 (24,165 )
Trading account securities, at fair value 226,918 417,469 272,939 (190,551 )
Investment securities available-for-sale, at fair value 5,120,301 5,076,797 5,226,529 43,504
Investment securities held-to-maturity, at amortized cost 122,072 124,646 128,546 (2,574 )
Other investment securities, at lower of cost or realizable value 213,389 174,287 173,569 39,102
Loans held-for-sale, at lower of cost or fair value 337,049 364,537 368,777 (27,488 )
Loans held-in-portfolio:
Loans not covered under loss sharing agreements with the FDIC 20,753,853 20,665,809 20,673,886 88,044
Loans covered under loss sharing agreements with the FDIC 3,903,867 4,016,330 4,512,423 (112,463 )
    Less: Allowance for loan losses     (761,172 )     (766,030 )     (772,921 )     4,858  
    Total loans held-in-portfolio, net     23,896,548       23,916,109       24,413,388       (19,561 )
FDIC loss share asset 1,559,057 1,631,594 1,895,059 (72,537 )
Premises and equipment, net 525,733 527,027 536,529 (1,294 )
Other real estate not covered under loss sharing agreements with the FDIC 252,024 226,629 175,785 25,395
Other real estate covered under loss sharing agreements with the FDIC 125,514 125,093 75,339 421
Accrued income receivable 133,943 122,320 134,263 11,623
Mortgage servicing assets, at fair value 158,367 155,711 157,226 2,656
Other assets 1,724,927 1,577,794 2,168,529 147,133
Goodwill 647,757 647,757 648,353 -
Other intangible assets     56,762       59,243       64,212       (2,481 )
Total assets   $ 36,503,366     $ 36,612,179     $ 38,275,323     $ (108,813 )
Liabilities and Stockholders’ Equity:
Liabilities:
Deposits:
Non-interest bearing $ 5,404,470 $ 5,578,487 $ 5,527,450 $ (174,017 )
    Interest bearing     20,915,029       21,836,293       22,425,890       (921,264 )
    Total deposits     26,319,499       27,414,780       27,953,340       (1,095,281 )
Federal funds purchased and assets sold under agreements to repurchase 1,944,564 1,426,636 2,601,606 517,928
Other short-term borrowings 1,206,200 316,200 166,200 890,000
Notes payable 1,866,377 1,877,583 2,550,745 (11,206 )
Other liabilities     1,097,742       1,555,743       990,831       (458,001 )
Total liabilities     32,434,382       32,590,942       34,262,722       (156,560 )
Stockholders’ equity:
Preferred stock 50,160 50,160 50,160 -
Common stock 1,031 1,028 1,025 3
Surplus 4,131,681 4,127,216 4,108,603 4,465
Accumulated deficit (54,183 ) (100,440 ) (201,770 ) 46,257
Treasury stock (270 ) (144 ) (992 ) (126 )
Accumulated other comprehensive (loss) income     (59,435 )     (56,583 )     55,575       (2,852 )
    Total stockholders’ equity     4,068,984       4,021,237       4,012,601       47,747  
Total liabilities and stockholders’ equity   $ 36,503,366     $ 36,612,179     $ 38,275,323     $ (108,813 )
 

Popular, Inc.
Financial Supplement to Third 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)

September 30, 2012 June 30, 2012 September 30, 2011 Q3 2012 vs Q2 2012 Q3 2012 vs Q3 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 $6,625   $46.6   2.81 % $6,819   $50.7   2.98 % $7,540   $62.8   3.32 % ($194)   ($4.1)   (0.17) % ($915)   ($16.2)   (0.51) %
Loans not covered under loss sharing agreements with the FDIC:
Commercial 10,024 123.2 4.89 10,237 126.2 4.96 10,690 134.1 4.98 (213) (3.0) (0.07) (666) (10.9) (0.09)
Construction 435 3.3 3.02 495 3.4 2.78 698 2.5 1.45 (60) (0.1) 0.24 (263) 0.8 1.57
Mortgage 5,915 80.7 5.46 5,713 77.8 5.44 5,326 78.7 5.91 202 2.9 0.02 589 2.0 (0.45)
Consumer 3,855 97.9 10.10 3,640 91.1 10.07 3,656 95.1 10.32 215 6.8 0.03 199 2.8 (0.22)
Lease financing 540   11.7   8.67 546   11.8   8.65 572   12.8   8.93 (6)   (0.1)   0.02 (32)   (1.1)   (0.26)
Total loans not covered under loss sharing agreements with the FDIC 20,769 316.8 6.08 20,631 310.3 6.04 20,942 323.2 6.14 138 6.5 0.04 (173) (6.4) (0.06)
Loans covered under loss sharing agreements with the FDIC 3,952   70.6   7.12 4,129   79.1   7.69 4,557   105.8   9.23 (177)   (8.5)   (0.57) (605)   (35.2)   (2.11)
Total loans 24,721   387.4   6.24 24,760   389.4   6.31 25,499   429.0   6.69 (39)   (2.0)   (0.07) (778)   (41.6)   (0.45)
Total interest earning assets 31,346   $434.0   5.52 % 31,579   $440.1   5.59 % 33,039   $491.8   5.92 % (233)   ($6.1)   (0.07) % (1,693)   ($57.8)   (0.40) %
Allowance for loan losses (757) (777) (749) 20 (8)
Other non-interest earning assets 5,396 5,415 5,704 (19) (308)
Total average assets $35,985 $36,217 $37,994 ($232) ($2,009)
 
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market $5,709 $6.2 0.43 % $5,555 $6.2 0.45 % $5,284 $7.3 0.55 % $154 $0.0 (0.02) % $425 ($1.1) (0.12) %
Savings 6,561 4.5 0.27 6,562 6.2 0.38 6,307 8.6 0.54 (1) (1.7) (0.11) 254 (4.1) (0.27)
Time deposits 9,003   32.3   1.43 9,752   36.1   1.49 10,876   50.0   1.82 (749)   (3.8)   (0.06) (1,873)   (17.7)   (0.39)
Total interest bearing deposits 21,273 43.0 0.80 21,869 48.5 0.89 22,467 65.9 1.16 (596) (5.5) (0.09) (1,194) (22.9) (0.36)
Borrowings 4,426   47.6   4.29 4,165   50.4   4.85 5,675   56.6   3.98 261   (2.8)   (0.56) (1,249)   (9.0)   0.31
Total interest bearing liabilities 25,699   90.6   1.40 26,034   98.9   1.52 28,142   122.5   1.73 (335)   (8.3)   (0.12) (2,443)   (31.9)   (0.33)
Net interest spread 4.12 % 4.07 % 4.19 % 0.05 % (0.07) %
Non-interest bearing deposits 5,319 5,309 5,095 10 224
Other liabilities 1,091 1,073 956 18 135
Stockholders' equity 3,876 3,801 3,801 75 75
Total average liabilities and stockholders' equity $35,985 $36,217 $37,994 ($232) ($2,009)
 
Net interest income / margin non-taxable equivalent basis $343.4   4.37 % $341.2   4.33 % $369.3   4.45 % $2.2   0.04 % ($25.9)   (0.08) %
 

Popular, Inc.
Financial Supplement to Third Quarter 2012 Earnings Release
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE
(Unaudited)
                       
Nine months ended Nine months ended

($ amounts in millions; yields not on a taxable equivalent basis)

September 30, 2012 September 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 $6,735     $149.3   2.96 % $7,542     $189.3   3.35 % ($807 )   ($40.0 )   (0.39 ) %
Loans not covered under loss sharing agreements with the FDIC:
Commercial 10,234 375.9 4.91 10,987 410.5 4.99 (753 ) (34.6 ) (0.08 )
Construction 484 13.3 3.66 788 8.5 1.45 (304 ) 4.8 2.21
Mortgage 5,698 233.9 5.47 5,070 231.5 6.09 628 2.4 (0.62 )
Consumer 3,719 281.6 10.11 3,645 281.1 10.31 74 0.5 (0.20 )
Lease financing 547     35.5   8.66 582     39.0   8.93 (35 )   (3.5 )   (0.27 )
Total loans not covered under loss sharing agreements with the FDIC 20,682 940.2 6.07 21,072 970.6 6.15 (390 ) (30.4 ) (0.08 )
Loans covered under loss sharing agreements with the FDIC 4,124     224.4   7.27 4,685     324.2   9.25 (561 )   (99.8 )   (1.98 )
Total loans 24,806     1,164.6   6.27 25,757     1,294.8   6.72 (951 )   (130.2 )   (0.45 )
Total interest earning assets 31,541     $1,313.9   5.56 % 33,299     $1,484.1   5.95 % (1,758 )   ($170.2 )   (0.39 ) %
Allowance for loan losses (779 ) (744 ) (35 )
Other non-interest earning assets 5,490   5,957   (467 )
Total average assets $36,252   $38,512   ($2,260 )
 
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market $5,504 $18.5 0.45 % $5,206 $24.6 0.63 % $298 ($6.1 ) (0.18 ) %
Savings 6,543 16.9 0.35 6,269 31.1 0.66 274 (14.2 ) (0.31 )
Time deposits 9,680     107.8   1.49 10,999     157.7   1.92 (1,319 )   (49.9 )   (0.43 )
Total interest bearing deposits 21,727 143.2 0.88 22,474 213.4 1.27 (747 ) (70.2 ) (0.39 )
Borrowings 4,319     148.5   4.59 6,299     183.5   3.89 (1,980 )   (35.0 )   0.70  
Total interest bearing liabilities 26,046     291.7   1.50 28,773     396.9   1.84 (2,727 )   (105.2 )   (0.34 )
Net interest spread 4.06 % 4.11 % (0.05 ) %
Non-interest bearing deposits 5,281 5,022 259
Other liabilities 1,113 1,013 100
Stockholders' equity 3,812   3,704   108  
Total average liabilities and stockholders' equity $36,252   $38,512   ($2,260 )
 
Net interest income / margin non-taxable equivalent basis $1,022.2   4.33 % $1,087.2   4.36 % ($65.0 )   (0.03 ) %
 

Popular, Inc.
Financial Supplement to Third Quarter 2012 Earnings Release
Table F - Other Service Fees
(Unaudited)
           
Quarters ended Variance Variance
September 30, June 30, September 30, Q3 2012 vs. Q3 2012 vs.
(In thousands)   2012   2012   2011   Q2 2012   Q3 2011
Other service fees:
Debit card fees $ 8,772 $ 9,411 $ 13,075 $ (639 ) $ (4,303 )
Insurance fees 12,322 12,063 13,785 259 (1,463 )
Credit card fees 14,576 14,268 13,738 308 838
Sale and administration of investment products 9,511 9,645 9,915 (134 ) (404 )
Mortgage servicing fees, net of fair value adjustments 9,857 6,335 2,120 3,522 7,737
Trust fees 3,977 4,069 4,006 (92 ) (29 )
Processing fees 1,406 1,639 1,684 (233 ) (278 )
  Other fees     4,363     4,597     4,341       (234 )       22  
Total other service fees   $ 64,784   $ 62,027   $ 62,664     $ 2,757       $ 2,120  
 
Nine months ended Variance
September 30, September 30, 2012 vs.
(In thousands)   2012   2011   2011          
Other service fees:
Debit card fees $ 27,348 $ 39,795 $ (12,447 )
Insurance fees 36,775 37,919 (1,144 )
Credit card fees 41,403 36,106 5,297
Sale and administration of investment products 28,045 24,702 3,343
Mortgage servicing fees, net of fair value adjustments 29,123 10,649 18,474
Trust fees 12,127 11,611 516
Processing fees 4,819 5,121 (302 )
  Other fees     13,210     13,720     (510 )          
Total other service fees   $ 192,850   $ 179,623   $ 13,227            
 

Popular, Inc.
Financial Supplement to Third Quarter 2012 Earnings Release
Table G - Loans and Deposits
(Unaudited)
         
Loans - Ending Balances
Variance
(In thousands)   September 30, 2012   June 30, 2012   September 30, 2011   Q3 2012 vs. Q2 2012   Q3 2012 vs. Q3 2011
Loans not covered under FDIC loss sharing agreements:
Commercial $ 9,628,631 $ 9,602,815 $ 9,989,114 $ 25,816 $ (360,483 )
Construction 258,453 249,743 253,208 8,710 5,245
Legacy [1] 465,848 509,829 722,600 (43,981 ) (256,752 )
Lease financing 538,014 537,917 553,125 97 (15,111 )
Mortgage 6,022,422 5,899,973 5,466,503 122,449 555,919
Consumer     3,840,485     3,865,532     3,689,336     (25,047 )     151,149  
Total non-covered loans held-in-portfolio $ 20,753,853 $ 20,665,809 $ 20,673,886 $ 88,044 $ 79,967
Loans covered under FDIC loss sharing agreements     3,903,867     4,016,330     4,512,423     (112,463 )     (608,556 )
Total loans held-in-portfolio   $ 24,657,720   $ 24,682,139   $ 25,186,309   $ (24,419 )   $ (528,589 )
Loans held-for-sale:
Commercial $ 17,696 $ 18,072 $ 24,191 $ (376 ) $ (6,495 )
Construction 88,030 160,102 234,336 (72,072 ) (146,306 )
Legacy [1] 3,107 425 - 2,682 3,107
Mortgage     228,216     185,938     110,250     42,278       117,966  
Total loans held-for-sale     337,049     364,537     368,777     (27,488 )     (31,728 )
Total loans   $ 24,994,769   $ 25,046,676   $ 25,555,086   $ (51,907 )   $ (560,317 )
[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)   September 30, 2012   June 30, 2012   September 30, 2011   Q3 2012 vs. Q2 2012   Q3 2012 vs. Q3 2011
Demand deposits [1] $ 6,091,400 $ 6,379,289 $ 6,149,514 $ (287,889 ) $ (58,114 )
Savings, NOW and money market deposits (non-brokered) 11,046,595 11,031,476 10,787,782 15,119 258,813
Savings, NOW and money market deposits (brokered) 455,309 433,694 100,002 21,615 355,307
Time deposits (non-brokered) 6,614,153 6,950,063 8,005,247 (335,910 ) (1,391,094 )
Time deposits (brokered CDs)     2,112,042     2,620,258     2,910,795     (508,216 )     (798,753 )
Total deposits   $ 26,319,499   $ 27,414,780   $ 27,953,340   $ (1,095,281 )   $ (1,633,841 )
[1] Includes interest and non-interest bearing deposits.
 

Popular, Inc.
Financial Supplement to Third Quarter 2012 Earnings Release
Table H - Non-Performing Assets
(Unaudited)
            Variance
(Dollars in thousands)   September 30, 2012   As a percentage of loans HIP by category   June 30, 2012   As a percentage of loans HIP by category   September 30, 2011   As a percentage of loans HIP by category   Q3 2012 vs. Q2 2012   Q3 2012 vs. Q3 2011
Non-accrual loans:  
Commercial $ 772,217 8.0 % $ 767,940 8.0 % $ 833,565 8.3 % $ 4,277 $ (61,348 )
Construction 49,933 19.3 67,538 27.0 122,844 48.5 (17,605 ) (72,911 )
Legacy [1] 48,735 10.5 54,730 10.7 104,314 14.4 (5,995 ) (55,579 )
Lease financing 4,837 0.9 5,046 0.9 3,966 0.7 (209 ) 871
Mortgage 632,052 10.5 632,899 10.7 617,723 11.3 (847 ) 14,329
Consumer     42,726   1.1       34,665     0.9       49,259     1.3       8,061       (6,533 )  

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

1,550,500 7.5 % 1,562,818 7.6 % 1,731,671 8.4 % (12,318 ) (181,171 )
Non-performing loans held-for-sale [2] 108,886 178,652 259,776 (69,766 ) (150,890 )

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

    252,024           226,629             175,785             25,395       76,239  
Total non-performing assets, excluding covered assets
1,911,410 1,968,099 2,167,232 (56,689 ) (255,822 )
Covered loans and OREO     208,235           209,793             86,301             (1,558 )     121,934    
Total non-performing assets   $ 2,119,645         $ 2,177,892           $ 2,253,533           $ (58,247 )   $ (133,888 )  
Accruing loans past due 90 days or more [3]   $ 379,051         $ 322,893           $ 329,473           $ 56,158     $ 49,578    
Ratios excluding covered loans:
Non-performing loans held-in-portfolio to loans held-in-portfolio
7.47

%

 

7.56 % 8.38 %
Allowance for loan losses to loans held-in-portfolio
3.07 3.14 3.35
Allowance for loan losses to non-performing loans, excluding held-for-sale
 
    41.04           41.50             39.99                
Ratios including covered loans:
Non-performing loans held-in-portfolio to loans held-in-portfolio
6.62

%

 

6.67 % 6.92 %
Allowance for loan losses to loans held-in-portfolio
3.09 3.10 3.07
Allowance for loan losses to non-performing loans, excluding held-for-sale     46.61           46.50             44.35                  
[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 September 30, 2012 consisted of $88 million in construction loans, $18 million in commercial loans, $3 million in legacy loans and $53 thousand in mortgage loans (June 30, 2012 - $160 million in construction loans, $18 million in commercial loans, $425 thousand in legacy loans and $53 thousand in mortgage loans; September 30, 2011 - $235 million in construction loans, $24 million in commercial loans, and $1 million in mortgage 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 nonperforming since the principal repayment is insured. These balances include $82 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of September 30, 2012.
 

Popular, Inc.
Financial Supplement to Third Quarter 2012 Earnings Release
Table I - Activity in Non-Performing Loans
(Unaudited)
             
Commercial loans held-in-portfolio:                        
Quarter ended September 30, 2012   Quarter ended June 30, 2012
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning balance NPLs $ 591,792 $ 176,148 $ 767,940 $ 620,916 $ 197,762 $ 818,678
Plus:
New non-performing loans 95,836 32,395 128,231 63,963 31,317 95,280
Advances on existing non-performing loans - 525 525 - 145 145
Loans transferred from held-for-sale - - - - 4,933 4,933
Other 1,139 - 1,139 - - -
Less:
Non-performing loans transferred to OREO (4,217 ) (10,558 ) (14,775 ) (10,043 ) (16,633 ) (26,676 )
Non-performing loans charged-off (43,711 ) (9,261 ) (52,972 ) (36,698 ) (15,385 ) (52,083 )
Loans returned to accrual status / loan collections (28,058 ) (25,561 ) (53,619 ) (46,346 ) (25,224 ) (71,570 )
  Loans transferred to held-for-sale     -       (4,252 )     (4,252 )     -       (767 )     (767 )
Ending balance NPLs   $ 612,781     $ 159,436     $ 772,217     $ 591,792     $ 176,148     $ 767,940  
 
 
 
Construction loans held-in-portfolio:                        
Quarter ended September 30, 2012   Quarter ended June 30, 2012
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning balance NPLs $ 55,534 $ 12,004 $ 67,538 $ 56,247 $ 13,223 $ 69,470
Plus:
New non-performing loans 3,917 - 3,917 833 - 833
Advances on existing non-performing loans - 136 136 145 204 349
Less:
Non-performing loans transferred to OREO (280 ) - (280 ) - - -
Non-performing loans charged-off (1,366 ) - (1,366 ) (1,000 ) - (1,000 )
Loans returned to accrual status / loan collections (18,873 ) - (18,873 ) (691 ) (1,423 ) (2,114 )
Loans transferred to held-for-sale - - - - - -
  Other     (1,139 )     -       (1,139 )     -       -       -  
Ending balance NPLs   $ 37,793     $ 12,140     $ 49,933     $ 55,534     $ 12,004     $ 67,538  
 
 
 
Mortgage loans held-in-portfolio:                        
Quarter ended September 30, 2012   Quarter ended June 30, 2012
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning balance NPLs $ 600,082 $ 32,817 $ 632,899 $ 633,517 $ 33,700 $ 667,217
Plus:
New non-performing loans 157,114 9,457 166,571 165,483 6,476 171,959
Less:
Non-performing loans transferred to OREO (19,522 ) (1,858 ) (21,380 ) (19,423 ) (3,107 ) (22,530 )
Non-performing loans charged-off (12,811 ) (2,541 ) (15,352 ) (20,575 ) (2,128 ) (22,703 )
  Loans returned to accrual status / loan collections     (126,340 )     (4,346 )     (130,686 )     (158,920 )     (2,124 )     (161,044 )
Ending balance NPLs   $ 598,523     $ 33,529     $ 632,052     $ 600,082     $ 32,817     $ 632,899  
 
 
 
Legacy loans held-in-portfolio:                        
Quarter ended September 30, 2012   Quarter ended June 30, 2012
(In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc.
Beginning balance NPLs $ - $ 54,730 $ 54,730 $ - $ 79,077 $ 79,077
Plus:
New non-performing loans - 9,011 9,011 - 8,355 8,355
Advances on existing non-performing loans - - - - 1 1
Less:
Non-performing loans transferred to OREO - - - - (65 ) (65 )
Non-performing loans charged-off - (7,900 ) (7,900 ) - (8,271 ) (8,271 )
Loans returned to accrual status / loan collections - (4,405 ) (4,405 ) - (9,797 ) (9,797 )
  Loans transferred to held-for-sale     -       (2,701 )     (2,701 )     -       (14,570 )     (14,570 )
Ending balance NPLs   $ -     $ 48,735     $ 48,735     $ -     $ 54,730     $ 54,730  
 

Popular, Inc.
Financial Supplement to Third Quarter 2012 Earnings Release
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios
(Unaudited)
                 
Quarter ended Quarter ended Quarter ended
September 30, June 30, September 30,
(Dollars in thousands)   2012   2012   2012   2012   2012   2012   2011   2011   2011
    Non-covered loans   Covered loans   Total   Non-covered loans   Covered loans   Total   Non-covered loans   Covered loans   Total
Balance at beginning of period $ 648,535 $ 117,495 $ 766,030 $ 664,768 $ 138,496 $ 803,264 $ 689,678 $ 57,169 $ 746,847
Provision for loan losses     83,589         22,619       106,208       81,743         37,456       119,199         150,703         25,573         176,276    
      732,124         140,114       872,238       746,511         175,952       922,463         840,381         82,742         923,123    
Net loans charged-off (recovered):
BPPR
Commercial 37,019 7,013 44,032 28,564 34,652 63,216 58,508 1,278 59,786
Construction (527 ) 7,483 6,956 985 15,187 16,172 (81 ) (1,500 ) (1,581 )
Lease financing 265 - 265 8 - 8 401 - 401
Mortgage 12,431 736 13,167 14,810 4,085 18,895 7,560 65 7,625
Consumer     21,853         9       21,862       23,055         4,533       27,588         23,278         2,478         25,756    
Total BPPR     71,041         15,241       86,282       67,422         58,457       125,879         89,666         2,321         91,987    
 
BPNA
Commercial 9,611 - 9,611 11,132 - 11,132 17,115 - 17,115
Construction - - - (4 ) - (4 ) 586 - 586
Lease financing - - - - - - - - -
Legacy [1] 3,952 - 3,952 5,459 - 5,459 8,881 - 8,881
Mortgage 3,541 - 3,541 3,371 - 3,371 6,086 - 6,086
Consumer     7,646         -       7,646       10,596         -       10,596         12,841         -         12,841    
Total BPNA     24,750         -       24,750       30,554         -       30,554         45,509         -         45,509    
Total loans charged-off (recovered) - Popular, Inc.     95,791         15,241       111,032       97,976         58,457       156,433         135,175         2,321         137,496    
Net write-downs (recoveries) related to loans transferred to loans held-for-sale     34         -       34       -         -       -         12,706         -         12,706    
Balance at end of period   $ 636,299       $ 124,873     $ 761,172     $ 648,535       $ 117,495     $ 766,030       $ 692,500       $ 80,421       $ 772,921    
 
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio
1.87 % 1.82 % 1.93 % 2.56 % 2.64 % 2.20 %
Provision for loan losses to net charge-offs 0.87 x 0.96 x 0.83 x 0.76 x 1.11 x 1.28 x
 
BPPR
Annualized net charge-offs to average loans held-in-portfolio
1.92 % 1.84 % 1.85 % 2.69 % 2.49 % 1.94 %
Provision for loan losses to net charge-offs 0.98 x 1.07 x 0.99 x 0.83 x 1.46 x 1.70 x
 
BPNA
Annualized net charge-offs to average loans held-in-portfolio
1.74 % 2.15 % 3.00 %
Provision for loan losses to net charge-offs                 0.56 x                 0.50 x                 0.43 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 Third Quarter 2012 Earnings Release
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED
(Unaudited)
             
                                             
September 30, 2012
(Dollars in thousands)     Commercial     Construction   Legacy [3]   Mortgage     Lease financing   Consumer   Total [2]
Specific ALLL $ 22,239 $ 191 $ - $ 62,823 $ 978 $ 21,193 $ 107,424
Impaired loans [1] $ 497,024 $ 47,897 $ 24,276 $ 560,441 $ 4,933 $ 135,204 $ 1,269,775
Specific ALLL to impaired loans [1]     4.47   %     0.40   %     -   %     11.21 %     19.83   %     15.67   %     8.46   %
General ALLL $ 263,769 $ 8,945 $ 39,871 $ 92,009 $ 1,603 $ 122,678 $ 528,875
Loans held-in-portfolio, excluding impaired loans [1] $ 9,131,607 $ 210,556 $ 441,572 $ 5,461,981 $ 533,081 $ 3,705,281 $ 19,484,078
General ALLL to loans held-in-portfolio, excluding impaired loans [1]     2.89   %     4.25   %     9.03   %     1.68 %     0.30   %     3.31   %     2.71   %
Total ALLL $ 286,008 $ 9,136 $ 39,871 $ 154,832 $ 2,581 $ 143,871 $ 636,299
Total non-covered loans held-in-portfolio [1] $ 9,628,631 $ 258,453 $ 465,848 $ 6,022,422 $ 538,014 $ 3,840,485 $ 20,753,853
ALLL to loans held-in-portfolio [1]     2.97   %     3.53   %     8.56   %     2.57 %     0.48   %     3.75   %     3.07   %
[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, 2012, the general allowance on the covered loans amounted to $110 million, while the specific reserve amounted to $15 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.
                                             
June 30, 2012
(Dollars in thousands)     Commercial   Construction   Legacy   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.
 
                                             
Variance September 30, 2012 versus June 30, 2012
(Dollars in thousands)     Commercial   Construction   Legacy   Mortgage   Lease financing   Consumer   Total  
Specific ALLL $ 15,409 $ (243 ) $ (99 ) $ 3,100 $ 212 $ 1,537 $ 19,916
Impaired loans     $ 1,992       $ (13,110 )     $ (5,013 )     $ 49,782     $ (595 )     $ 1,347       $ 34,403    
General ALLL $ (26,165 ) $ 237 $ (4,041 ) $ 1,910 $ (588 ) $ (3,505 ) $ (32,152 )
Loans held-in-portfolio, excluding impaired loans     $ 23,824       $ 21,820       $ (38,968 )     $ 72,667     $ 692       $ (26,394 )     $ 53,641    
Total ALLL $ (10,756 ) $ (6 ) $ (4,140 ) $ 5,010 $ (376 ) $ (1,968 ) $ (12,236 )
Total non-covered loans held-in-portfolio     $ 25,816       $ 8,710       $ (43,981 )     $ 122,449     $ 97       $ (25,047 )     $ 88,044    
 

Popular, Inc.
Financial Supplement to Third Quarter 2012 Earnings Release
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS
(Unaudited)
             
As of September 30, 2012
Puerto Rico
(In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total
Allowance for credit losses:
Specific ALLL non-covered loans $ 21,246 $ 191 $ 47,523 $ 978 $ 21,070 $ 91,008
  General ALLL non-covered loans     180,178       7,208       77,567       1,603       87,690       354,246  
ALLL - non-covered loans     201,424       7,399       125,090       2,581       108,760       445,254  
Specific ALLL covered loans 15,294 - - - - 15,294
  General ALLL covered loans     64,326       27,223       12,886       -       5,144       109,579  
ALLL - covered loans     79,620       27,223       12,886       -       5,144       124,873  
Total ALLL   $ 281,044     $ 34,622     $ 137,976     $ 2,581     $ 113,904     $ 570,127  
Loans held-in-portfolio:
Impaired non-covered loans $ 404,175 $ 35,757 $ 506,723 $ 4,933 $ 132,472 $ 1,084,060
  Non-covered loans held-in-portfolio, excluding impaired loans     5,779,640       174,999       4,412,162       533,081       3,059,817       13,959,699  
Non-covered loans held-in-portfolio     6,183,815       210,756       4,918,885       538,014       3,192,289       15,043,759  
Impaired covered loans 120,510 - - - - 120,510
  Covered loans held-in-portfolio, excluding impaired loans     2,203,852       393,101       1,106,851       -       79,553       3,783,357  
Covered loans held-in-portfolio     2,324,362       393,101       1,106,851       -       79,553       3,903,867  
Total loans held-in-portfolio   $ 8,508,177     $ 603,857     $ 6,025,736     $ 538,014     $ 3,271,842     $ 18,947,626  
 
 
As of June 30, 2012
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  
 
                           
Variance September 30, 2012 versus June 30, 2012
(In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total
Allowance for credit losses:
Specific ALLL non-covered loans $ 15,749 $ (243 ) $ 2,815 $ 212 $ 1,506 $ 20,039
  General ALLL non-covered loans     (18,171 )     178       1,936       (588 )     (4,697 )     (21,342 )
ALLL - non-covered loans     (2,422 )     (65 )     4,751       (376 )     (3,191 )     (1,303 )
Specific ALLL covered loans 1,016 - - - - 1,016
  General ALLL covered loans     3,012       3,595       1,269       -       (1,514 )     6,362  
ALLL - covered loans     4,028       3,595       1,269       -       (1,514 )     7,378  
Total ALLL   $ 1,606     $ 3,530     $ 6,020     $ (376 )   $ (4,705 )   $ 6,075  
Loans held-in-portfolio:
Impaired non-covered loans $ 25,515 $ (13,246 ) $ 49,364 $ (595 ) $ 977 $ 62,015
  Non-covered loans held-in-portfolio, excluding impaired loans     (4,980 )     22,238       55,300       692       (7,737 )     65,513  
Non-covered loans held-in-portfolio     20,535       8,992       104,664       97       (6,760 )     127,528  
Impaired covered loans 43,815 - - - - 43,815
  Covered loans held-in-portfolio, excluding impaired loans     (50,629 )     (76,664 )     (9,625 )     -       (19,360 )     (156,278 )
Covered loans held-in-portfolio     (6,814 )     (76,664 )     (9,625 )     -       (19,360 )     (112,463 )
Total loans held-in-portfolio   $ 13,721     $ (67,672 )   $ 95,039     $ 97     $ (26,120 )   $ 15,065  
 

Popular, Inc.
Financial Supplement to Third Quarter 2012 Earnings Release
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS
(Unaudited)
             
As of September 30, 2012
U.S. Mainland
(In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total
Allowance for credit losses:
Specific ALLL $ 993 $ - $ - $ 15,300 $ 123 $ 16,416
  General ALLL     83,591       1,737       39,871       14,442       34,988       174,629  
Total ALLL   $ 84,584     $ 1,737     $ 39,871     $ 29,742     $ 35,111     $ 191,045  
Loans held-in-portfolio:
Impaired loans $ 92,849 $ 12,140 $ 24,276 $ 53,718 $ 2,732 $ 185,715
  Loans held-in-portfolio, excluding impaired loans     3,351,967       35,557       441,572       1,049,819       645,464       5,524,379  
Total loans held-in-portfolio   $ 3,444,816     $ 47,697     $ 465,848     $ 1,103,537     $ 648,196     $ 5,710,094  
 
 
As of June 30, 2012
U.S. Mainland
(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  
 
                           
Variance September 30, 2012 versus June 30, 2012
(In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total
Allowance for credit losses:
Specific ALLL $ (340 ) $ - $ (99 ) $ 285 $ 31 $ (123 )
  General ALLL     (7,994 )     59       (4,041 )     (26 )     1,192       (10,810 )
Total ALLL   $ (8,334 )   $ 59     $ (4,140 )   $ 259     $ 1,223     $ (10,933 )
Loans held-in-portfolio:
Impaired loans $ (23,523 ) $ 136 $ (5,013 ) $ 418 $ 370 $ (27,612 )
  Loans held-in-portfolio, excluding impaired loans     28,804       (418 )     (38,968 )     17,367       (18,657 )     (11,872 )
Total loans held-in-portfolio   $ 5,281     $ (282 )   $ (43,981 )   $ 17,785     $ (18,287 )   $ (39,484 )
 

Popular, Inc.
Financial Supplement to Third Quarter 2012 Earnings Release
Table N - Reconciliation to GAAP Financial Measures
(Unaudited)
   
 
(In thousands, except share or per share information)   September 30, 2012     June 30, 2012     September 30, 2011  
Total stockholders’ equity $ 4,068,984 $ 4,021,237 $ 4,012,601
Less: Preferred stock (50,160 ) (50,160 ) (50,160 )
Less: Goodwill (647,757 ) (647,757 ) (648,353 )
Less: Other intangibles     (56,762 )       (59,243 )       (64,212 )  
Total tangible common equity   $ 3,314,305       $ 3,264,077       $ 3,249,876    
Total assets $ 36,503,366 $ 36,612,179 $ 38,275,323
Less: Goodwill (647,757 ) (647,757 ) (648,353 )
Less: Other intangibles     (56,762 )       (59,243 )       (64,212 )  
Total tangible assets   $ 35,798,847       $ 35,905,179       $ 37,562,758    
Tangible common equity to tangible assets 9.26 % 9.09 % 8.65 %
Common shares outstanding at end of period [1] 103,097,143 102,824,323 102,447,540
Tangible book value per common share [1]   $ 32.15       $ 31.74       $ 31.72    
[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)   September 30, 2012     June 30, 2012     September 30, 2011  
Common stockholders’ equity $ 4,018,824 $ 3,971,077 $ 3,962,441
Less: Unrealized gains on available-for-sale securities, net of tax [1] (175,769 ) (181,207 ) (209,120 )
Less: Disallowed deferred tax assets [2] (365,954 ) (392,960 ) (222,601 )
Less: Intangible assets:
Goodwill (647,757 ) (647,757 ) (648,353 )
Other disallowed intangibles (18,409 ) (22,241 ) (31,272 )
Less: Aggregate adjusted carrying value of all non-financial equity investments (1,154 ) (1,256 ) (1,525 )
Add: Pension liability adjustment, net of tax and accumulated net gains (losses)
on cash flow hedges [3]   205,309         208,015         125,004    
Total Tier 1 common equity   $ 3,015,090       $ 2,933,671       $ 2,974,574    
 
[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 $153 million of the Corporation’s $546 million of net deferred tax assets at September 30, 2012 (June 30, 2012 - $151 million and $573 million, respectively; September 30, 2011 - $126 million and $342 million, respectively), were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $366 million of such assets at September 30, 2012 (June 30, 2012 - $393 million; September 30, 2011 - $223 million) exceeded the limitation imposed by these guidelines and, as “disallowed deferred tax assets”, were deducted in arriving at Tier 1 capital. The remaining $27 million of the Corporation’s other net deferred tax assets at September 30, 2012 (June 30, 2012 - $29 million; September 30, 2011 - $7 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 Third Quarter 2012 Earnings Release
Table O - Financial Information - Westernbank Covered Loans
(Unaudited)
       
 

Revenues

Quarter ended
(In thousands)   September 30, 2012   June 30, 2012   Variance
Interest income on covered loans   $ 70,584     $ 79,094     $ (8,510 )
FDIC loss share income (expense):
(Amortization) accretion of indemnification asset (29,184 ) (37,413 ) 8,229
80% mirror accounting on credit impairment losses [1] 18,095 29,426 (11,331 )
80% mirror accounting on discount accretion on unfunded commitments (248 ) (248 ) -
80% mirror accounting on reimbursable expenses 7,378 10,663 (3,285 )
Other     (2,748 )     147       (2,895 )
  Total FDIC loss share (expense) income     (6,707 )     2,575       (9,282 )
Other non-interest income     310       310       -  
Total revenues     64,187       81,979       (17,792 )
Provision for loan losses     22,619       37,456       (14,837 )
Total revenues less provision for loan losses   $ 41,568     $ 44,523     $ (2,955 )
[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)   September 30, 2012   June 30, 2012   Variance
Covered loans $ 3,952 $ 4,129 $ (177 )
FDIC loss share asset     1,578       1,700       (122 )
 
 
 

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

 
Quarter ended
      September 30, 2012   June 30, 2012
(In thousands)   Accretable yield  

Carrying amountof loans

 

Accretableyield

 

Carrying amountof loans

Beginning balance $ 1,574,850 $ 3,729,489 $ 1,542,519 $ 3,894,905
Accretion (66,168 ) 66,168 (73,988 ) 73,988
Changes in expected cash flows (37,800 ) 106,319
Collections / charge-offs         (168,448 )         (239,404 )
Ending balance 1,470,882 3,627,209 1,574,850 3,729,489
  Allowance for loan losses - ASC 310-30 covered loans         (103,547 )         (93,971 )
Ending balance, net of allowance for loan losses   $ 1,470,882     $ 3,523,662     $ 1,574,850     $ 3,635,518  
 
 

Activity in the carrying amount of the FDIC indemnity asset

 
Quarter ended
(In thousands)   September 30, 2012       June 30, 2012
Balance at beginning of period $ 1,631,594 $ 1,880,357
Amortization (29,184 ) (37,413 )
Credit impairment losses to be covered under loss sharing agreements 18,095 29,426
Decrease due to reciprocal accounting on the discount accretion on unfunded commitments (248 ) (248 )
Payments received from FDIC under loss sharing agreements (64,932 ) (241,911 )
Other adjustments attributable to FDIC loss sharing agreements         3,732           1,383  
Balance at end of period       $ 1,559,057         $ 1,631,594  
 
 

Activity in the remaining FDIC loss share asset accretion (amortization)

 
Quarter ended
(In thousands)   September 30, 2012       June 30, 2012
Balance at beginning of period $ 121,308 $ 106,781
Amortization (29,184 ) (37,413 )
Impact of lower projected losses         4,300           51,940  
Balance at end of period       $ 96,424         $ 121,308  
 




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