Popular, Inc. Reports Net Income Of $83.9 Million For The Fourth Quarter And $245.3 Million For The Year Ended December 31, 2012

Popular, Inc. (“the Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $83.9 million for the quarter ended December 31, 2012, compared with net income of $47.2 million for the quarter ended September 30, 2012.

Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: “Our fourth quarter results reflect the strength of our core businesses and market positions, significant further declines in non-performing loans and increases in our already strong capital ratios. In 2013, we remain focused on driving value through further progress on all these fronts and continuing to increase our strategic and financial flexibility.”

Significant events for the quarter ended December 31, 2012

• During the month of December 2012, the Corporation received a $24.2 million cash dividend from its investment in EVERTEC’s parent company. Also, the Corporation recorded pre-tax income of approximately $31.6 million related to its proportionate share of a tax benefit from a tax grant received by EVERTEC from the Puerto Rico Government. The Corporation’s equity investment balance in the entity stands at $73.9 million as of year-end. The Corporation’s participation interest in the entity was 48.5% as of December 31, 2012.

Earnings Highlights
		Quarters ended								Years ended
(Dollars in thousands, except per share information)		31-Dec-12			30-Sep-12			31-Dec-11		31-Dec-12		31-Dec-11
Net interest income		$ 350,411			$ 343,426			$ 344,780		$ 1,372,619		$ 1,431,992
Provision for loan losses – non-covered loans		86,256			83,589			123,908		334,102		430,085
Provision for loan losses – covered loans [1]		(3,445)			22,619			55,900		74,839		145,635
Net interest income after provision for loan losses		267,600			237,218			164,972		963,678		856,272
FDIC loss share (expense) income		(36,824)			(6,707)			17,447		(56,211)		66,791
Other non-interest income		169,825			122,416			131,912		522,553		493,486
Operating expenses		296,747			290,355			311,093		1,211,148		1,150,297
Income before income tax		103,854			62,572			3,238		218,872		266,252
Income tax expense (benefit)		19,914			15,384			263		(26,403)		114,927
Net income		$ 83,940			$ 47,188			$ 2,975		$ 245,275		$ 151,325
Net income applicable to common stock		$ 83,009			$ 46,257			$ 2,044		$ 241,552		$ 147,602
Net income per common share - basic and diluted [2]		$ 0.81			$ 0.45			$ 0.02		$ 2.35		$ 1.44
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.
[2] Per share data has been adjusted to retroactively reflect the 1-for-10 reverse stock split effected on May 29, 2012.

Financial Impact of FDIC-Assisted Transaction
			Quarters ended						Years ended
(In thousands)			31-Dec-12		30-Sep-12		31-Dec-11		31-Dec-12		31-Dec-11
Income Statement
Interest income on covered loans			$ 76,998		$ 70,584		$ 88,424		$ 301,441		$ 412,678
Total FDIC loss share (expense) income			(36,824)		(6,707)		17,447		(56,211)		66,791
Other non-interest income			281		310		1,092		1,211		12,810
Provision for loan losses			(3,445)		22,619		55,900		74,839		145,635
Total revenues less provision for loan losses			$ 43,900		$ 41,568		$ 51,063		$ 171,602		$ 346,644
Balance Sheet
Loans covered under loss-sharing agreements with FDIC			$ 3,755,972		$ 3,903,867		$ 4,348,703
FDIC loss share asset			1,399,098		1,559,057		1,915,128
FDIC true-up payment obligation			111,519		103,189		98,340

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

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