Popular, Inc. Announces First Quarter Financial Results

  Popular, Inc. Announces First Quarter Financial Results

  *Reports net loss of $ 120.3 million for the quarter ended March 31, 2013,
    reflecting a $180.6 million after-tax loss on bulk asset sale and
    valuation adjustments
  *Adjusted net income of $60.3 million, excluding the effect of asset sale
    and valuation adjustments
  *Completed sale of assets with book value of $509.0 million, of which
    $500.6 million were in non-performing status

  *Significant progress in credit quality (metrics exclude covered loans):

Including the impact of the bulk sale:

  *Non-performing assets declined by $565.2 million, or 32%, quarter over
    quarter;

  *Non-performing loans held-in-portfolio declined by $374.5 million or 26%
    from Q4 2012, and decreased by 55% from Q3 2010 peak to reach lowest level
    since 2008;
  *Inflows of non-performing loans held-in-portfolio, excluding consumer
    loans, declined by $60.3 million, or 25%, from Q4 2012;
  *OREO decreased by $112.1 million, or 42%, quarter over quarter.

Excluding the impact of the bulk sale:

  *Non-performing assets declined by $64.6 million, or 4%, quarter over
    quarter;
  *Non-performing loans held-in-portfolio declined by $41.8 million from Q4
    2012;
  *Net charge-offs decreased by $19.5 million from Q4 2012; NCO ratio
    decreased to 1.55%, reaching lowest level since 2008.

  *Net interest margin of 4.39% in Q1 2013, vs. 4.41% in Q4 2012
  *Common Equity Tier 1 ratio of 12.36% and Tangible Book Value per Share of
    $31.21 at March 31, 2013; capital exceeds well-capitalized threshold by
    $1.7 billion

Business Wire

SAN JUAN, Puerto Rico -- April 18, 2013

Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported a net
loss of $120.3 million for the quarter ended March 31, 2013, compared to net
income of $83.9 million for the quarter ended December 31, 2012.

Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer,
said: “We delivered a good underlying performance in the quarter and two
important transactions were completed in recent weeks. The non-performing
asset sale, the successful IPO of EVERTEC and the continuing organic
improvements in our credit quality build on our efforts to derisk our balance
sheet, build capital and continue to drive value for our shareholders.”

Earnings Highlights
                                                            
(Unaudited)         Quarters ended
(Dollars in
thousands, except   31-Mar-13               31-Dec-12         31-Mar-12
per share
information)
Net interest income $    345,347             $   350,411        $  337,582
Provision for loan
losses –                 206,300                 86,256            82,514
non-covered loans
Provision for loan
losses – covered        17,556               (3,445   )      18,209   
loans [1]
Net interest income
after provision for      121,491                 267,600           236,859
loan losses
FDIC loss share          (26,266     )           (36,824  )        (15,255  )
expense
Other non-interest       43,841                  169,825           139,163
income [2]
Operating expenses      316,250              296,747        296,167  
(Loss) income            (177,184    )           103,854           64,600
before income tax
Income tax              (56,877     )         19,914         16,192   
(benefit) expense
Net (loss) income   $    (120,307    )      $   83,940       $  48,408   
Net (loss) income
applicable to       $    (121,237    )      $   83,009       $  47,477   
common stock
Net (loss) income
per common share -  $    (1.18       )      $   0.81         $  0.46     
basic and diluted
[3]
                                                                
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted
transaction that are covered under FDIC loss sharing agreements.
[2] Other non-interest income for the fourth quarter of 2012 includes $31.6
million related to the Corporation’s proportionate share of a tax benefit from
a tax grant received by EVERTEC from the Puerto Rico Government.
[3] Per share data has been adjusted to retroactively reflect the 1-for-10
reverse stock split effected on May 29, 2012.

Recent significant events

  *On April 12, 2013 EVERTEC, Inc. (“EVERTEC” or the “Company”) completed an
    initial public offering (“IPO”) of 25.3 million shares, raising
    approximately $505.3 million. In connection with the IPO, EVERTEC sold 6.3
    million of newly issued common stock in the offering and Apollo Global
    Management LLC (“Apollo”) and Popular respectively sold 10.2 million and
    8.8 million shares of the Company retaining a stake of 33.6% and 33.5%,
    respectively. If the underwriters exercise their overallotment option in
    full, Popular and Apollo would own 33.5% and 28.8% of the outstanding
    common stock of EVERTEC, respectively.

Following the IPO, EVERTEC is refinancing all of its outstanding debt. As part
of this refinancing, Popular will receive payment in full for its portion of
the EVERTEC debtheld by it. As a result of these transactions, Popular will
recognize an after tax gain of approximately $169.4 million during the second
quarter of 2013, comprised of the following:

  *$130.4 million gain on the sale of its previously held EVERTEC common
    stock
  *$45.9 million gain on its investment in EVERTEC resulting from the
    issuance of the new common stock by EVERTEC
  *An estimated $4.2 million gain from the repayment of the debt
  *An estimated $5.7 million from the accelerated payment of contractual
    consulting fees
  *A loss of approximately $16.8 million from Popular’s proportionate share
    of EVERTEC’s debt prepayment penalty, consulting fees and other related
    costs

After the transaction, Popular’s investment in EVERTEC will have a book value
of $74.9 million. Total cash proceeds received by Popular from the sale of the
shares and repayment of the debt will be $254.3 million.

  *On March 25, 2013, Banco Popular de Puerto Rico (“BPPR”) completed a sale
    of assets with a book value of $509.0 million, of which $500.6 million
    were in non-performing status, comprised of commercial and construction
    loans, and commercial and single-family real estate owned, with a combined
    unpaid principal balance on loans and appraised value of other real estate
    owned of approximately $987 million to a newly created joint venture. BPPR
    retained a 24.9% equity interest in the joint venture. BPPR provided
    seller financing for approximately $182.4 million to fund a portion of the
    purchase price and certain closing costs. In addition, BPPR provided
    financing of $65.0 million to cover cost-to-complete amounts and expenses
    of certain assets, as well as certain expenses of the purchasing entity.
    This transaction resulted in an after tax loss of $174.4 million.

The following table presents the results of operations for the quarter ended
March 31, 2013, excluding the impact of the sale of non-performing assets and
valuation adjustments.

             Quarters ended
(Unaudited)   31-Mar-13                                          
(In           Actual       Impact of    Adjusted      31-Dec-12     Variance
thousands)    Results      Sale of NPAs Results      (US GAAP)   
              (US GAAP)                 (Non GAAP)
Net interest  $ 345,347    $ -          $ 345,347     $ 350,411     $ (5,064  )
income
Provision for
loan losses –   206,300      148,823      57,477        86,256        (28,779 )
non-covered
loans
Provision for
loan losses –  17,556     -          17,556     (3,445  )   21,001  
covered loans
[1]
Net interest
income after    121,491      (148,823 )   270,314       267,600       2,714
provision for
loan losses
FDIC loss       (26,266  )   -            (26,266 )     (36,824 )     10,558
share expense
Net (loss)
gain on sale
of loans,
including
valuation       (48,959  )   (61,387  )   12,428        30,196        (17,768 )
adjustments
on loans
held-for-sale
[2]
Other
non-interest    92,800       (10,700  )   103,500       139,629       (36,129 )
income [3]
OREO expense    46,741       37,046       9,695         1,079         8,616
Other
operating      269,509    5          269,504    295,668    (26,164 )
expenses
(Loss) income
before income   (177,184 )   (257,961 )   80,777        103,854       (23,077 )
tax
Income tax
(benefit)      (56,877  )  (77,388  )  20,511     19,914     597     
expense
Net (loss)    $ (120,307 ) $ (180,573 ) $ 60,266    $ 83,940    $ (23,674 )
income
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted
transaction that are covered under FDIC loss sharing agreements.
[2] Net (loss) gain on sale of loans, includes $8.8 million of negative
valuation adjustments on loans held for sale which were transferred to
held-in-portfolio subsequent to the sale.
[3] Other non-interest income for the fourth quarter of 2012 includes $31.6
million related to the Corporation’s proportionate share of a tax benefit from
a tax grant received by EVERTEC from the Puerto Rico Government.

Financial Impact of FDIC-Assisted Transaction                 
(Unaudited)                                                  
(In thousands)                   31-Mar-13      31-Dec-12      31-Mar-12

Income Statement
Interest income on covered loans $ 72,184        $ 76,998        $ 74,764
Total FDIC loss share (expense)    (26,266   )     (36,824   )     (15,255   )
Other non-interest income          242             281             310
Provision for loan losses         17,556       (3,445    )   18,209    
Total revenues less provision    $ 28,604      $ 43,900      $ 41,610    
for loan losses
                                                                 
Balance Sheet
Loans covered under loss-sharing $ 3,362,446     $ 3,755,972     $ 4,221,788
agreements with FDIC
FDIC loss share asset              1,380,592       1,399,098       1,880,357
FDIC true-up payment obligation   118,294      111,519      99,962    

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

Net interest income

Net interest margin for the first quarter of 2013 decreased 2 basis points to
4.39% when compared with the fourth quarter of 2012. Net interest income
reached $345.3 million, a decrease of $5.0 million from the previous quarter.
The main drivers of the decrease in net interest margin are:

  *Nearly all of the nominal decrease in net interest income was due to the
    impact of having two fewer days in the first quarter of 2013 than in the
    fourth quarter of 2012 and the proportion of loans with interest accrued
    on actual/actual basis.
  *Decrease of $3.5 million, or 2 basis points, in interest income on
    non-covered loans, primarily commercial loans in Puerto Rico, mainly due
    to fewer days.
  *Decrease of $4.8 million in interest income on the covered loan portfolio.
    During the fourth quarter of 2012, the covered portfolio reflected higher
    nominal income mainly from the resolution of certain commercial loans in
    excess of their book value during that quarter. The yield on the covered
    commercial loan portfolio for the first quarter of 2013 was 8.31%, or 30
    basis points higher than the fourth quarter of 2012, mainly as a result of
    higher expected cash flows which are reflected in the accretable yield and
    recognized over the life of the loans.
  *Decrease of approximately $2.5 million, or 4 basis points, in interest
    expense on deposits, $0.9 million of which was due to fewer days in the
    first quarter of 2013 with the remaining improvement related to continuing
    progress in repricing the deposit base, which partially offset the
    decrease in interest income.

  *Banco Popular de Puerto Rico’s (BPPR) net interest margin remained stable
    from the previous quarter at 5.18%. Net interest income amounted to $304.9
    million for the quarter ended March 31, 2013, compared with $309.1 million
    for the previous quarter. The decrease was mainly related to the impact of
    fewer days on the commercial loans and the previously discussed effect of
    the covered loan portfolio. This decrease was partially offset by a 5
    basis points reduction in the cost of interest-bearing deposits.
  *Banco Popular North America (BPNA), our U.S. banking subsidiary that does
    business as Popular Community Bank, earned $68.0 million in net interest
    income for the quarter ended March 31, 2013, compared with $68.5 million
    in the previous quarter. The decrease in the net interest margin of 3
    basis points to 3.48% was mainly caused by a decrease in the yield of
    commercial, mortgage and consumer loans, and of investment securities.
    This decrease was partially offset by a 2 basis points reduction in the
    cost of interest-bearing deposits.

Provision for Loan Losses                                        
                                                                     
                                          Quarters ended
(In thousands)                             31-Mar-13  31-Dec-12   31-Mar-12
Provision for loan losses - non-covered
loans:
BPPR                                        $ 204,289   $ 78,092     $ 67,788
BPNA                                        2,011     8,164     14,726
Total provision for loan losses -           206,300   86,256    82,514
non-covered loans
Provision (reversal) for loan losses -      17,556    (3,445 )   18,209
covered loans
Total provision for loan losses            $ 223,856  $ 82,811   $ 100,723

The provision for loan losses for the first quarter of 2013 amounted to $223.9
million, an increase of $141.0 million versus the previous quarter, mainly
related to the $148.8 million impact of the bulk loan sale. Excluding the
impact of the sale, the provision for the first quarter of 2013 was $75.1
million, declining by $7.7 million from the fourth quarter of 2012.

  *The provision for loan losses for the non-covered loan portfolio increased
    by $120.0 million from the fourth quarter of 2012, mainly due to the
    impact of the sale. Excluding the impact of the sale, the provision for
    the first quarter of 2013 was $57.5 million, decreasing by $28.8 million,
    reflecting improvements in credit quality, as underlying losses and NPLs
    continue to trend downwards at BPPR and BPNA.

  *The provision for loan losses for non-covered loans at BPPR decreased by
    $22.6 million from the fourth quarter of 2012, excluding the impact of the
    sale.
  *The provision for loan losses at BPNA decreased by $6.2 million from the
    fourth quarter of 2012.

  *The provision for loan losses on the covered loan portfolio increased by
    $21.0 million from the previous quarter.

  *The provision for loan losses for loans accounted under ASC 310-30
    increased by $12.5 million from the fourth quarter of 2012, mostly due to
    certain commercial and construction loan pools, which reflected higher
    expected loss estimates for the first quarter of 2013. Overall expected
    losses on the covered portfolio continue to be lower than originally
    estimated.
  *The provision for loan losses on covered loans accounted under ASC 310-20
    increased by $8.5 million from the previous quarter, driven by a provision
    reversal of $5.0 million in the fourth quarter of 2012, which was
    primarily due to a reduction in the specific reserve of a particular
    commercial loan relationship.

Non-interest income

Non-interest income decreased by $115.4 million compared with the fourth
quarter of 2012, driven primarily by the following items:

  *A $79.2 million decrease in net gain on sale of loans. This decrease was
    principally driven by the loss of $61.4 million related to the bulk sale
    of non-performing commercial and construction loans, which includes
    unfavorable valuation adjustment on loans held-for-sale transferred to
    held-in-portfolio of approximately $8.8 million. Excluding the effect of
    the NPA sale, the gain on sale of loans declined by $17.8 million due to a
    securitization and higher loan sale activity recorded by BPPR’s mortgage
    division in the fourth quarter of 2012.
  *An increase of $12.9 million in adjustments to the indemnity reserves on
    loans sold, mainly as a result of $10.7 million recorded in connection
    with the bulk sale of non-performing loans.
  *A $35.6 million decrease in other operating income, principally due to
    $31.6 million of income recorded during the fourth quarter of 2012 related
    to the Corporation’s proportionate share of a tax benefit from a tax grant
    received by EVERTEC from the Puerto Rico Government.
  *A decrease of $4.9 million in other service fees, mainly related to
    contingent insurance commissions which are typically recognized during the
    fourth quarter.

These increases were partially offset by:

  *A decrease of $10.6 million in FDIC loss-share expense mainly due to
    higher mirror accounting on credit impairment losses. See additional
    details about covered portfolio and FDIC indemnity asset in Table O.

Refer to table B for further details.

Operating expenses

Operating expenses increased by $19.5 million versus the fourth quarter of
2012, driven primarily by:

  *An increase of $45.7 million in other real estate owned (OREO) expenses,
    due mainly to the loss of $37.0 million incurred as a result of the bulk
    sale of commercial and single-family real estate owned and higher gain on
    sales of commercial OREOs at both BPPR and BPNA, which offset OREO
    expenses during the fourth quarter of 2012.

This increase was partially offset by:

  *A decrease of $6.1 million in professional fees mainly due to lower
    attorney collection fees at BPPR and lower technology service fees.
  *Lower FDIC deposit insurance expenses of $4.4 million, driven mainly by an
    incremental assessment credit of $6.2 million recognized during the first
    quarter of 2013 as a result of revisions in the deposit-insurance premium
    calculation and efficiencies achieved from the internal reorganization of
    Popular Mortgage into BPPR during the fourth quarter of 2012.
  *A decrease of $9.3 million in other operating expenses due largely to
    lower provision for operational losses by $4.5 million, both in BPPR and
    BPNA, and lower other general operating expenses.

Excluding the impact of the bulk sale, operating expenses declined by $17.5
million.

Non-personnel credit-related costs, which include collections, appraisals,
credit related fees, and OREO expenses, but excluding the impact of the
transaction, amounted to $20.3 million for the first quarter of 2013, compared
with $14.1 million for the fourth quarter of 2012. The increase was
principally due to higher gain on sales of commercial OREOs at both BPPR and
BPNA, which offset OREO expenses during the fourth quarter of 2012.

Full-time equivalent employees (“FTEs”) were 8,144 as of March 31, 2013,
compared with 8,072 as of December 31, 2012, and 8,074 as of March 31, 2012.
The increase of 72 FTEs from the fourth quarter of 2012, which includes some
temporary personnel, is related to the addition of resources in the retail
banking and individual credit divisions to supplement the demand in the
mortgage business, as well as support for certain of the Corporation’s
initiatives.

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

Income taxes

For the quarter ended March 31, 2013, the Corporation recorded an income tax
benefit of $56.9 million, reflecting the net operating loss generated by the
sale of non-performing assets, compared with an income tax expense of $19.9
million for the fourth quarter of 2012.

Credit Quality

The following table presents non-performing assets information and the effect
that the bulk sale had on these balances.

Non-Performing Assets
(Unaudited)                                                          
                                               31-Mar-13
                   31-Mar-12     31-Dec-12     Net
(In thousands)                                 inflows/    Sale of NPAs  Total
                                               (outflows)
Total
non-performing
loans              $ 1,681,803   $ 1,425,133   $ (41,773 ) $  (332,752 ) $ 1,050,608
held-in-portfolio,
excluding covered
loans^[1]
Non-performing
loans                232,293       96,320        (19,129 )    (59,449  )   17,742
held-for-sale
Other real estate
owned (“OREO”),     193,768     266,844     (3,709  )   (108,436 )  154,699   
excluding covered
OREO
Total
non-performing       2,107,864     1,788,297     (64,610 )    (500,637 )   1,223,049
assets, excluding
covered assets
Covered loans and   203,254     213,469     (16,752 )   -          196,717   
OREO
Total
non-performing     $ 2,311,118  $ 2,001,766  $ (81,362 ) $  (500,637 ) $ 1,419,766 
assets
Net charge-offs
for the quarter    $ 108,109    $ 100,854    $ (81,357 ) $             $ (244,500  )
(excluding covered                                         (163,143)^[2]
loans)
[1] The bulk sale of assets included $8.4 million in performing loans.
[2] Net write-downs related to loans sold.
                                                                         
Ratios (excluding covered loans):
Non-performing
loans
held-in-portfolio    8.21      %   6.79      %                             4.86      %
to loans
held-in-portfolio
Allowance for loan
losses to loans      3.25          2.96                                    2.70
held-in-portfolio
Allowance for loan
losses to
non-performing      39.53       43.62                               55.54     
loans, excluding
loans
held-for-sale

Credit quality continues to improve as a result of key strategies implemented
to reduce non-performing loans, as well as stabilizing economic conditions and
improvements in the underlying quality of the loan portfolios.

  *Non-performing loans (NPL) held-in-portfolio decreased by $374.5 million,
    or 26%, from the fourth quarter of 2012, and 55% from peak levels in the
    third quarter of 2010. This reduction reflects the impact of the sale of
    NPLs with book value of approximately $332.8 million. Excluding the impact
    of the bulk loan sale, NPLs decreased by $41.8 million.
  *Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by
    $60.3 million, or 25%, from the previous quarter. This reduction was
    principally attributed to a decrease of $57.0 million in mortgage NPL
    inflows in Puerto Rico.

  *OREO, excluding covered OREO, decreased by $112.1 million from the fourth
    quarter of 2012, primarily as a result of the sale of $58.6 million and
    $49.9 million in commercial and single family OREO, respectively, during
    the quarter.
  *Net charge-offs for the first quarter were $244.5 million, or 4.66% of
    average non-covered loans held-in-portfolio on an annualized basis,
    compared with $100.9 million, or 1.94%, for the previous quarter. The bulk
    loan sale added $163.1 million in charge-offs at BPPR operations.
    Excluding the impact of the bulk loan sale, net charge-offs were $81.4
    million or 1.55% of average non-covered loans-held-in portfolio,
    decreasing by $19.5 million from the fourth quarter of 2012. This decline
    was driven by improvements in the underlying credit performance. Refer to
    Table J for further information on net charge-offs and related ratios.
  *The ratio of the allowance for loan losses to loans held-in-portfolio,
    excluding covered loans, stood at 2.70% as of March 31, 2013, compared
    with 2.96% as of December 31, 2012. The general and specific reserves
    related to non-covered loans totaled $459.8 million and $123.7 million,
    respectively, at quarter-end, compared with $510.6 million and $111.1
    million, respectively, as of December 31, 2012. The decrease in the
    allowance for loan losses was primarily due to continued improvements in
    credit quality trends.

Credit Quality by Segment
                                                             
(In thousands)                   Quarters ended
BPPR                              31-Mar-13    31-Dec-12      31-Mar-12
Provision for loan losses          $ 204,289     $ 78,092        $ 67,788
Net charge-offs (excludes NPLs       62,424        78,050          73,658
sale)
Total non-performing loans
held-in-portfolio,
excluding covered loans              837,943       1,191,982       1,343,480
Allowance/non-covered loans        2.66    %   2.92      %   3.01      %
held-in-portfolio
                                                                 
                                Quarters ended
BPNA                              31-Mar-13    31-Dec-12      31-Mar-12
Provision for loan losses          $ 2,011       $ 8,164         $ 14,726
Net charge-offs                      18,933        22,804          34,451
Total non-performing loans
held-in-portfolio,
excluding covered loans              212,665       233,151         338,323
Allowance/non-covered loans        2.80    %   3.07      %   3.87      %
held-in-portfolio

BPPR Segment

  *The provision for loan losses for the non-covered loan portfolio increased
    by $126.2 million from the fourth quarter of 2012, mainly due to the
    incremental provision of $148.8 million as a result of the bulk loan sale.
    Excluding the impact of the sale, the provision for loan losses declined
    by $22.6 million to $55.5 million for the first quarter of 2013, due to
    positive trends in credit quality.
  *Net charge-offs, excluding covered loans, increased by $147.5 million from
    the fourth quarter of 2012, principally related to incremental charge-offs
    of $163.1 million associated with the bulk loan sale. Excluding the impact
    of the sale, net charge-offs were $62.4 million or 1.64% of average
    non-covered loans-held-in portfolio on an annualized basis, decreasing by
    $15.6 million from the fourth quarter of 2012, primarily due to reductions
    in the commercial portfolio.
  *Total NPLs held-in-portfolio, excluding covered loans, decreased by $354.0
    million, or 30%, from the fourth quarter of 2012. The decrease in NPLs
    reflects both the impact of the sale and the reduction of $23.4 million in
    mortgage NPLs.
  *Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by
    $52.1 million, or 25%, from the previous quarter. This reduction was
    principally driven by a decline of $57.0 million in mortgage NPL inflows,
    as a result of collection efforts greater economic stability and a benefit
    from the treatment of $23.6 million in purchase of impaired loans under
    ASC 310-30 in the first quarter.
  *The allowance for loan losses for non-covered loans held-in-portfolio
    decreased by $21.3 million from the previous quarter. The allowance for
    loan losses as a percentage of non-covered loans held-in-portfolio
    decreased to 2.66% from 2.92% in the fourth quarter of 2012.
  *The allowance for loans losses to non-performing loans for non-covered
    loans held-in-portfolio increased to 50.60% from 37.36% in the previous
    quarter. The increase is mostly driven by the effect of the NPL sale.

BPNA Segment

  *The provision for loan losses in the first quarter of 2013 decreased by
    $6.2 million. The allowance for loan losses as a percentage of loans
    held-in-portfolio decreased to 2.80% from 3.07% in the fourth quarter of
    2012. Sustained improvements in credit quality trends continue to drive
    the reductions in the provision and the allowance.
  *Net charge-offs decreased by $3.9 million from the fourth quarter of 2012,
    mainly driven by improvements across most portfolios. The net charge-offs
    to average loans held-in-portfolio was 1.33% on an annualized basis, down
    from 1.60% in the previous quarter.
  *Total non-performing loans held-in-portfolio decreased by $20.5 million
    from the fourth quarter of 2012, reflecting lower inflows to
    non-performing loans and loan resolutions. Total inflows of non-performing
    loans held-in-portfolio, excluding consumer loans, decreased by $8.2
    million, or 24%, from the fourth quarter of 2012.

Financial Condition Highlights
(Unaudited)
                                 
(In thousands)                      31-Mar-13     31-Dec-12     31-Mar-12
Total assets                        $ 36,942,714  $ 36,507,535  $ 37,049,221
Total loans held-in-portfolio (net)   24,312,823     24,008,557     23,897,198
Deposits                              27,013,217     27,000,613     27,197,736
Borrowings                            4,969,344      4,430,673      4,708,511
Stockholders’ equity                 3,971,143    4,110,000    3,967,071

Total assets increased by approximately $435.2 million from December 31, 2012
driven by:

  *A $61.6 million increase in cash and money market accounts due mainly to
    balances held with the Federal Reserve Bank
  *A $237.0 million increase in securities available-for-sale, mainly due to
    purchase of agency collateralized mortgage obligations and obligations
    from U.S. Government sponsored entities
  *A $650.6 million increase in non-covered loans held-in-portfolio mainly
    due to:

  *an increase of $795.4 million in mortgage loans during the first quarter
    of 2013. The increase was driven by the purchase of mortgage loans, with
    an unpaid principal balance $860.3 million in Puerto Rico. These
    opportunistic purchases are part of the Corporation’s strategy to
    supplement origination volume and leverage the scale of our loan servicing
    platform; and
  *an increase in construction loans of $18.6 million, mainly as a result of
    loans reclassified from the held-for-sale category amounting to $14.1
    million, which were offset in part by $3.5 million in non-performing loans
    sold; offset by;
  *a decrease in commercial loans of $107.8 million, mainly as a result of
    the bulk sale of non-performing assets, which reduced commercial loans by
    $337.6 million and loans charged-off or transferred to OREO of $49.5
    million, offset by new loan originations, including the loan to the newly
    created joint venture which acquired the non-performing assets of $182.4
    million; and
  *a decrease in legacy loans of $31.7 million, as this portfolio continues
    its normal run-off.

  *An increase in covered OREO of $33.3 million as the Corporation continues
    to resolve non-performing loans
  *An increase in other assets of $81.7 million mainly due to the deferred
    tax asset related to the loss on the sale of non performing assets

These increases were partially offset by:

  *A decrease in loans held-for-sale of $153.0 million as a result of the
    bulk sale of non-performing assets, which reduced construction and
    commercial loans held-for-sale by approximately $49.7 million and $9.7
    million, respectively and the reclassification of the remaining balance of
    these loans to the held-for-investment portfolio and net outflows from
    secondary market transactions of the mortgage division

  *The Loss-Sharing-Agreement (LSA) indemnification asset was reduced by
    $18.5 million during the quarter, mainly due to the amortization of the
    indemnification asset, reflecting reduced estimated losses on the covered
    portfolio, offset by credit impairment losses to be covered under the loss
    sharing agreement
  *The covered loan portfolio balance decreased by approximately $393.5
    million due to the resolution of a large relationship and the normal
    portfolio run-off
  *Other real estate owned (“OREO”) non-covered decreased by approximately
    $112.1 million, mainly as a result of the bulk sale of non-performing
    assets during the quarter, which reduced OREOs by $108.5 million.

Total liabilities increased by $574.0 million from December 31, 2012, driven
by:

  *Increase in repurchase agreements of $248.9 million and other short-term
    borrowings of $315.0 million, mainly FHLB of NY advances, which were used
    in part to fund mortgage loan purchases and investment securities during
    the quarter.

Stockholders’ equity decreased by $138.9 million from December 31, 2012,
mainly as a result of the net loss for the quarter and a decrease of $24.0
million in unrealized gains on securities available-for-sale. Refer to Table A
for capital ratios and Table N for Non-GAAP reconciliations. Refer to Table C
for the Statements of Financial Condition.

Forward-Looking Statements

The information included in this news release contains certain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on management’s current expectations and
involve certain risks and uncertainties that may cause actual results to
differ materially from those expressed in forward-looking statements. Factors
that might cause such a difference include, but are not limited to (i) the
rate of growth in the economy and employment levels, as well as general
business and economic conditions; (ii) changes in interest rates, as well as
the magnitude of such changes; (iii) the fiscal and monetary policies of the
federal government and its agencies; (iv) changes in federal bank regulatory
and supervisory policies, including required levels of capital; (v) the
relative strength or weakness of the consumer and commercial credit sectors
and of the real estate markets in Puerto Rico and the other markets in which
borrowers are located; (vi) the performance of the stock and bond markets;
(vii) competition in the financial services industry; (viii) possible
legislative, tax or regulatory changes; (ix) the impact of the Dodd-Frank Act
on our businesses, business practice and cost of operations; and (x)
additional Federal Deposit Insurance Corporation assessments. For a discussion
of such factors and certain risks and uncertainties to which the Corporation
is subject, see the Corporation’s Annual Report on Form 10-K for the year
ended December 31, 2012, as well as its filings with the U.S. Securities and
Exchange Commission. Other than to the extent required by applicable law,
including the requirements of applicable securities laws, the Corporation
assumes no obligation to update any forward-looking statements to reflect
occurrences or unanticipated events or circumstances after the date of such
statements.

Founded in 1893, Popular, Inc. is the leading banking institution by both
assets and deposits in Puerto Rico and ranks 37th by assets among U.S. banks.
In the United States, Popular has established a community-banking franchise,
doing business as Popular Community Bank, 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 today
Thursday, April 18, 2013 at 2:00 p.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 866-515-2909 or
617-399-5123. The conference code is 37994014.

A replay of the webcast will be archived in Popular’s website during the
respective period. A telephone replay will be available from 4:00 p.m. on
Thursday, April 18, 2013 to 11:59 p.m. on Thursday, April 25, 2013, at
888-286-8010 or 617-801-6888. The replay passcode is 24810804.

Popular, Inc.
Financial Supplement to First Quarter 2013 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 - Intentionally Left Blank (Consolidated Average Balances and Yield /
Rate Analysis - YTD)

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 First Quarter 2013 Earnings Release
Table A - Selected Ratios and Other Information
(Unaudited)
                                                           
                 
                   Quarters ended
                 31-Mar-13             31-Dec-12           31-Mar-12
Net (loss)
income per
common share:
Basic and             ($1.18       )      $  0.81              $ 0.46
diluted [1]
                                                               
Average common
shares                102,664,608            102,628,274         102,341,805
outstanding [1]
Average common
shares
outstanding -         103,013,204            102,801,581         102,494,500
assuming
dilution [1]
Common shares
outstanding at        103,228,615            103,169,806         102,711,707
end of period
[1]
                                                               
Market value
per common         $  27.60               $  20.79             $ 20.50
share [1]
                                                               
Market
capitalization     $  2,849               $  2,145             $ 2,106
- (In millions)
                                                               
Return on             (1.34        )%        0.92         %      0.53        %
average assets
                                                               
Return on
average common        (12.58       )%        8.50         %      5.16        %
equity
                                                               
Net interest          4.39         %         4.41         %      4.27        %
margin [2]
                                                               
Common equity      $  37.98               $  39.35             $ 38.14
per share [1]
                                                               
Tangible common
book value per     $  31.21               $  32.55             $ 31.23
common share
(non-GAAP) [1]
                                                               
Tangible common
equity to             8.89         %         9.38         %      8.83        %
tangible assets
(non-GAAP)
                                                               
Tier 1
risk-based            16.52        %         17.35        %      16.51       %
capital [3]
                                                               
Total
risk-based            17.80        %         18.63        %      17.79       %
capital [3]
                                                               
Tier 1 leverage       11.07        %         11.52        %      11.10       %
[3]
                                                               
Tier 1 common
equity to
risk-weighted       12.36        %       13.18        %    12.53       %
assets
(non-GAAP) [3]
[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 First Quarter 2013 Earnings Release
Table B - Consolidated Statement of Operations
(Unaudited)
                 Quarters ended              Variance      Quarter      Variance
                                                               ended
(In thousands,                                  Q1 2013                      Q1 2013
except per share  31-Mar-13     31-Dec-12    vs.Q4 2012    31-Mar-12    vs.Q1 2012
information)
Interest income:                
  Loans            $ 385,414      $ 393,732     $ (8,318   )   $ 387,942     $ (2,528   )
  Money market       955            929           26             948           7
  investments
  Investment         37,356         37,953        (597     )     45,070        (7,714   )
  securities
  Trading
 account          5,514       5,155      359         5,891      (377     )
  securities
 Total interest   429,239     437,769    (8,530   )   439,851    (10,612  )
  income
Interest
expense:
  Deposits           38,343         40,896        (2,553   )     51,679        (13,336  )
  Short-term         9,782          10,302        (520     )     13,583        (3,801   )
  borrowings
 Long-term debt   35,767      36,160     (393     )   37,007     (1,240   )
 Total interest   83,892      87,358     (3,466   )   102,269    (18,377  )
  expense
Net interest         345,347        350,411       (5,064   )     337,582       7,765
income
Provision for
loan losses -        206,300        86,256        120,044        82,514        123,786
non-covered
loans
Provision for
loan losses -      17,556      (3,445  )   21,001      18,209     (653     )
covered loans
Net interest
income after       121,491     267,600    (146,109 )   236,859    (115,368 )
provision for
loan losses
Service charges
on deposit           43,722         44,449        (727     )     46,589        (2,867   )
accounts
Other service        58,803         63,695        (4,892   )     66,039        (7,236   )
fees
Net loss on sale
and valuation
adjustments of       -              (1,422  )     1,422          -             -
investment
securities
Trading account      (75      )     (5,990  )     5,915          (2,143  )     2,068
loss
Net (loss) gain
on sale of
loans, including
valuation            (48,959  )     30,196        (79,155  )     15,471        (64,430  )
adjustments on
loans
held-for-sale
Adjustments
(expense) to
indemnity            (16,143  )     (3,208  )     (12,935  )     (3,875  )     (12,268  )
reserves on
loans sold
FDIC loss share      (26,266  )     (36,824 )     10,558         (15,255 )     (11,011  )
expense
Other operating    6,493       42,105     (35,612  )   17,082     (10,589  )
income
  Total
 non-interest     17,575      133,001    (115,426 )   123,908    (106,333 )
  income
Operating
expenses:
Personnel costs
  Salaries           73,345         74,846        (1,501   )     76,899        (3,554   )
  Commissions,
  incentives and     15,475         14,817        658            12,726        2,749
  other bonuses
  Pension,
  postretirement     15,238         16,453        (1,215   )     18,425        (3,187   )
  and medical
  insurance
  Other
  personnel
 costs,           11,931      10,209     1,722       13,441     (1,510   )
  including
  payroll taxes
  Total
  personnel          115,989        116,325       (336     )     121,491       (5,502   )
  costs
Net occupancy        24,288         26,918        (2,630   )     24,162        126
expenses
Equipment            11,950         11,602        348            11,341        609
expenses
Other taxes          11,586         11,942        (356     )     13,438        (1,852   )
Professional         52,135         58,246        (6,111   )     48,105        4,030
fees
Communications       6,832          6,558         274            7,131         (299     )
Business             12,917         16,822        (3,905   )     12,850        67
promotion
FDIC deposit         9,280          13,691        (4,411   )     24,926        (15,646  )
insurance
Loss on early
extinguishment       -              12            (12      )     69            (69      )
of debt
Other real
estate owned         46,741         1,079         45,662         14,165        32,576
(OREO) expenses
Credit and debit
card processing,
volume,              4,975          4,646         329            4,681         294
interchange and
other expenses
Other operating      17,089         26,439        (9,350   )     11,215        5,874
expenses
Amortization of    2,468       2,467      1           2,593      (125     )
intangibles
  Total
 operating        316,250     296,747    19,503      296,167    20,083   
  expenses
(Loss) income
before income        (177,184 )     103,854       (281,038 )     64,600        (241,784 )
tax
Income tax
(benefit)          (56,877  )   19,914     (76,791  )   16,192     (73,069  )
expense
Net (loss)        $ (120,307 )  $ 83,940    $ (204,247 )  $ 48,408    $ (168,715 )
income
Net (loss)
income            $ (121,237 )  $ 83,009    $ (204,246 )  $ 47,477    $ (168,714 )
applicable to
common stock
Net (loss)
income per        $ (1.18    )  $ 0.81      $ (1.99    )  $ 0.46      $ (1.64    )
common share -
basic [1]
Net (loss)
income per        $ (1.18    )  $ 0.81      $ (1.99    )  $ 0.46      $ (1.64    )
common share -
diluted [1]
[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 First Quarter 2013 Earnings Release
Table C - Consolidated Statement of Financial Condition
(Unaudited)
                                                                      Variance
                                                                            Q1 2013 vs.
(In thousands)          31-Mar-13       31-Dec-12       31-Mar-12       Q4 2012
Assets:
Cash and due from        $ 242,290        $ 439,363        $ 472,806        $ (197,073 )
banks
Money market               1,344,244        1,085,580        1,304,263        258,664
investments
Trading account
securities, at fair        299,773          314,525          404,293          (14,752  )
value
Investment securities
available-for-sale, at     5,321,231        5,084,201        5,138,616        237,030
fair value
Investment securities
held-to-maturity, at       141,518          142,817          124,372          (1,299   )
amortized cost
Other investment
securities, at lower       198,577          185,443          195,708          13,134
of cost or realizable
value
Loans held-for-sale,
at lower of cost or        201,495          354,468          361,596          (152,973 )
fair value
Loans
held-in-portfolio:
    Loans not covered
    under loss sharing     21,729,882       21,080,005       20,577,995       649,877
    agreements with
    the FDIC
    Loans covered
    under loss sharing     3,362,446        3,755,972        4,221,788        (393,526 )
    agreements with
    the FDIC
    Less: Unearned         96,137           96,813           99,321           (676     )
    income
  Allowance for loan   683,368       730,607       803,264       (47,239  )
    losses
    Total loans
  held-in-portfolio,   24,312,823    24,008,557    23,897,198    304,266  
    net
FDIC loss share asset      1,380,592        1,399,098        1,880,357        (18,506  )
Premises and               532,785          535,793          533,545          (3,008   )
equipment, net
Other real estate not
covered under loss         154,699          266,844          193,768          (112,145 )
sharing agreements
with the FDIC
Other real estate
covered under loss         172,378          139,058          110,559          33,320
sharing agreements
with the FDIC
Accrued income             135,542          125,728          126,568          9,814
receivable
Mortgage servicing         153,949          154,430          156,331          (481     )
assets, at fair value
Other assets               1,651,234        1,569,578        1,439,532        81,656
Goodwill                   647,757          647,757          647,911          -
Other intangible         51,827        54,295        61,798        (2,468   )
assets
Total assets            $ 36,942,714   $ 36,507,535   $ 37,049,221   $ 435,179  
Liabilities and
Stockholders’ Equity:
Liabilities:
  Deposits:
    Non-interest         $ 5,613,701      $ 5,794,629      $ 5,366,420      $ (180,928 )
    bearing
  Interest bearing     21,399,516    21,205,984    21,831,316    193,532  
  Total deposits       27,013,217    27,000,613    27,197,736    12,604   
Assets sold under
agreements to              2,265,675        2,016,752        2,113,557        248,923
repurchase
Other short-term           951,200          636,200          751,200          315,000
borrowings
Notes payable              1,752,469        1,777,721        1,843,754        (25,252  )
Other liabilities        989,010       966,249       1,175,903     22,761   
Total liabilities        32,971,571    32,397,535    33,082,150    574,036  
Stockholders’ equity:
Preferred stock            50,160           50,160           50,160           -
Common stock               1,033            1,032            1,028            1
Surplus                    4,151,838        4,150,294        4,125,958        1,544
(Accumulated deficit)      (109,411   )     11,826           (165,249   )     (121,237 )
retained earnings
Treasury stock             (469       )     (444       )     (1,041     )     (25      )
Accumulated other        (122,008   )   (102,868   )   (43,785    )   (19,140  )
comprehensive loss
    Total
  stockholders’        3,971,143     4,110,000     3,967,071     (138,857 )
    equity
Total liabilities and   $ 36,942,714   $ 36,507,535   $ 37,049,221   $ 435,179  
stockholders’ equity
                                                                            


Popular, Inc.
Financial Supplement to First Quarter 2013 Earnings Release
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER
(Unaudited)
                                                                                                                                                               
                    Quarter ended                   Quarter ended                   Quarter ended                   Variance                       Variance
                    31-Mar-13                       31-Dec-12                       31-Mar-12                       Q1 2013 vs. Q4 2012            Q1 2013 vs. Q1 2012
($ amounts in
millions; yields   Average     Income/  Yield/   Average     Income/  Yield/   Average     Income/  Yield/   Average   Income/  Yield/    Average     Income/     Yield/
not on a taxable    balance      Expense   Rate     balance      Expense   Rate     balance      Expense   Rate     balance    Expense   Rate      balance      Expense      Rate
equivalent basis)
Assets:
Interest earning
assets:
  Money market,
  trading and       $ 6,971    $ 43.8   2.52   % $ 6,693    $ 44.1   2.63   % $ 6,761    $ 52.0   3.07   % $ 278    ($0.3 )  (0.11 ) % $ 210       ($8.2  )  (0.55 ) %
  investment
  securities
  Loans not covered under loss sharing agreements with the FDIC:
    Commercial        10,078       119.3   4.80       10,200       123.5   4.82       10,444       126.5   4.87       (122 )   (4.2  )   (0.02 )     (366   )     (7.2   )   (0.07 )
    Construction      369          3.6     3.92       386          3.3     3.44       523          6.5     5.03       (17  )   0.3       0.48        (154   )     (2.9   )   (1.11 )
    Mortgage          6,410        83.2    5.19       6,169        81.0    5.25       5,464        75.5    5.53       241      2.2       (0.06 )     946          7.7        (0.34 )
    Consumer          3,853        95.8    10.08      3,835        97.5    10.11      3,661        92.6    10.17      18       (1.7  )   (0.03 )     192          3.2        (0.09 )
    Lease            543       11.3   8.36      540       11.4   8.48      555       12.0   8.67      3      (0.1  )  (0.12 )    (12    )   (0.7   )  (0.31 )
    financing
    Total loans
    not covered
    under loss        21,253       313.2   5.95       21,130       316.7   5.97       20,647       313.1   6.09       123      (3.5  )   (0.02 )     606          0.1        (0.14 )
    sharing
    agreements
    with the FDIC
  Loans covered
  under loss
  sharing            3,514     72.2   8.31      3,832     77.0   8.01      4,292     74.8   7.00      (318 )  (4.8  )  0.30      (778   )   (2.6   )  1.31  
  agreements with
  the FDIC
  Total loans        24,767    385.4  6.29      24,962    393.7  6.28      24,939    387.9  6.25      (195 )  (8.3  )  0.01      (172   )   (2.5   )  0.04  
  Total interest     31,738   $ 429.2  5.46   %  31,655   $ 437.8  5.51   %  31,700   $ 439.9  5.57   %  83     ($8.6 )  (0.05 ) %  38        ($10.7 )  (0.11 ) %
  earning assets
    Allowance for     (659   )                        (754   )                        (802   )                        95                             143
    loan losses
    Other
    non-interest     5,283                         5,400                         5,658                         (117 )                        (375   )
    earning
    assets
  Total average     $ 36,362                       $ 36,301                       $ 36,556                       $ 61                           ($194  )
  assets
                                                                                                                                                                                     
Liabilities and Stockholders' Equity:
  Interest
  bearing
  deposits:
    NOW and money   $ 5,696      $ 5.8     0.41   % $ 5,707      $ 6.1     0.43   % $ 5,246      $ 6.1     0.47   %   ($11 )   ($0.3 )   (0.02 ) % $ 450          ($0.3  )   (0.06 ) %
    market
    Savings           6,718        4.3     0.26       6,654        4.8     0.29       6,507        6.3     0.39       64       (0.5  )   (0.03 )     211          (2.0   )   (0.13 )
    Time deposits    8,832     28.2   1.30      8,650     30.0   1.38      10,291    39.3   1.54      182    (1.8  )  (0.08 )    (1,459 )   (11.1  )  (0.24 )
    Total
    interest          21,246       38.3    0.73       21,011       40.9    0.77       22,044       51.7    0.94       235      (2.6  )   (0.04 )     (798   )     (13.4  )   (0.21 )
    bearing
    deposits
  Borrowings         4,492     45.6   4.07      4,704     46.5   3.94      4,365     50.6   4.65      (212 )  (0.9  )  0.13      127       (5.0   )  (0.58 )
    Total
    interest         25,738    83.9   1.31      25,715    87.4   1.35      26,409    102.3  1.55      23     (3.5  )  (0.04 )    (671   )   (18.4  )  (0.24 )
    bearing
    liabilities
    Net interest                           4.15   %                        4.16   %                        4.02   %                      (0.01 ) %                           0.13   %
    spread
  Non-interest
  bearing             5,591                           5,583                           5,213                           8                              378
  deposits
  Other               1,074                           1,067                           1,181                           7                              (107   )
  liabilities
  Stockholders'      3,959                         3,936                         3,753                         23                           206    
  equity
    Total average
    liabilities
    and             $ 36,362                       $ 36,301                       $ 36,556                       $ 61                           ($194  )
    stockholders'
    equity
                                                                                                                                                                                     
Net interest income / margin     $ 345.3  4.39   %              $ 350.4  4.41   %              $ 337.6  4.27   %            ($5.1 )  (0.02 ) %              $ 7.7      0.12   %
non-taxable equivalent basis
                                                                                                                                                                                     

Popular, Inc.
Financial Supplement to First Quarter 2013 Earnings Release
Table E - Consolidated Average Balances and Yield / Rate Analysis -
YEAR-TO-DATE





[THIS PAGE INTENTIONALLY LEFT BLANK]





                                                              
Popular, Inc.
Financial Supplement to First Quarter 2013 Earnings Release
Table F - Other Service Fees
(Unaudited)

                                                       Variance
                   Quarters ended                      Q1 2013      Q1 2013
                                                       vs.          vs.
(In thousands)    31-Mar-13  31-Dec-12  31-Mar-12  Q4 2012     Q1 2012
Other service
fees:
 Debit card       $  8,470    $  9,439    $  9,165    $ (969   )   $ (695   )
  fees
  Insurance fees      12,073      17,050      12,390     (4,977 )     (317   )
  Credit card         14,691      16,148      12,559     (1,457 )     2,132
  fees
  Sale and
  administration      8,717       9,721       8,889      (1,004 )     (172   )
  of investment
  products
  Mortgage
  servicing
  fees, net of        5,631       1,647       12,931     3,984        (7,300 )
  fair value
  adjustments
  Trust fees          4,458       4,226       4,081      232          377
  Processing          -           1,511       1,774      (1,511 )     (1,774 )
  fees
 Other fees        4,763     3,953     4,250    810       513    
Total other       $  58,803  $  63,695  $  66,039  $ (4,892 )  $ (7,236 )
service fees
                                                                    


Popular, Inc.
Financial Supplement to First Quarter 2013 Earnings Release
Table G - Loans and Deposits
(Unaudited)
                                                                          
Loans - Ending
Balances
                                                                 Variance
(In thousands)     31-Mar-13     31-Dec-12     31-Mar-12     Q1 2013 vs.   Q1 2013 vs.
                                                                 Q4 2012        Q1 2012
Loans not covered under FDIC
loss sharing agreements:
Commercial          $ 9,750,428    $ 9,858,202    $ 9,868,242    $ (107,774 )   $ (117,814  )
Construction          271,498        252,857        236,579        18,641         34,919
Legacy [1]            352,512        384,217        603,874        (31,705  )     (251,362  )
Lease financing       543,572        540,523        543,314        3,049          258
Mortgage              6,873,910      6,078,507      5,591,745      795,403        1,282,165
Consumer            3,841,825    3,868,886    3,634,920    (27,061  )   206,905   
Total non-covered
loans               $ 21,633,745   $ 20,983,192   $ 20,478,674   $ 650,553      $ 1,155,071
held-in-portfolio
Loans covered
under FDIC loss     3,362,446    3,755,972    4,221,788    (393,526 )   (859,342  )
sharing
agreements
Total loans        $ 24,996,191  $ 24,739,164  $ 24,700,462  $ 257,027    $ 295,729   
held-in-portfolio
Loans
held-for-sale:
Commercial          $ -            $ 16,047       $ 24,879       $ (16,047  )   $ (24,879   )
Construction          -              78,140         206,246        (78,140  )     (206,246  )
Legacy [1]            1,681          2,080          1,115          (399     )     566
Mortgage            199,814      258,201      129,356      (58,387  )   70,458    
Total loans         201,495      354,468      361,596      (152,973 )   (160,101  )
held-for-sale
Total loans        $ 25,197,686  $ 25,093,632  $ 25,062,058  $ 104,054    $ 135,628   
[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)     31-Mar-13     31-Dec-12     31-Mar-12     Q1 2013 vs.   Q1 2013 vs.
                                                                 Q4 2012        Q1 2012
Demand deposits     $ 6,265,796    $ 6,442,739    $ 6,013,009    $ (176,943 )   $ 252,787
[1]
Savings, NOW and
money market          11,357,130     11,190,335     11,048,140     166,795        308,990
deposits
(non-brokered)
Savings, NOW and
money market          498,833        456,830        212,996        42,003         285,837
deposits
(brokered)
Time deposits         6,427,320      6,541,660      7,186,826      (114,340 )     (759,506  )
(non-brokered)
Time deposits       2,464,138    2,369,049    2,736,765    95,089      (272,627  )
(brokered CDs)
Total deposits     $ 27,013,217  $ 27,000,613  $ 27,197,736  $ 12,604     $ (184,519  )
[1] Includes interest and non-interest demand bearing deposits.
                                                                                


Popular, Inc.
Financial Supplement to First Quarter 2013 Earnings Release
Table H - Non-Performing Assets
(Unaudited)
                                                                                              Variance
                                    As a %                     As a %                     As a %
(Dollars in        31-Mar-13      of loans  31-Dec-12      of loans  31-Mar-12      of loans  Q1 2013 vs.   Q1 2013 vs.
thousands)                          HIP by                     HIP by                     HIP by     Q4 2012        Q1 2012
                                    category                   category                   category
Non-accrual                                                                                                       
loans:
Commercial          $ 320,787       3.3   %   $ 665,289       6.7   %   $ 818,678       8.3   %   $ (344,502 )   $ (497,891 )
Construction          50,920        18.8         43,350        17.1         69,470        29.4         7,570          (18,550  )
Legacy [1]            35,830        10.2         40,741        10.6         79,077        13.1         (4,911   )     (43,247  )
Lease financing       4,005         0.7          4,865         0.9          5,673         1.0          (860     )     (1,668   )
Mortgage              600,724       8.7          630,130       10.4         667,217       11.9         (29,406  )     (66,493  )
Consumer            38,342      1.0       40,758      1.1       41,688      1.1       (2,416   )   (3,346   )
Total
non-performing
loans held-in-
portfolio,
excluding covered     1,050,608     4.9   %     1,425,133     6.8   %     1,681,803     8.2   %     (374,525 )     (631,195 )
loans
Non-performing
loans                 17,742                     96,320                     232,293                    (78,578  )     (214,551 )
held-for-sale [2]
Other real estate
owned (“OREO”),     154,699               266,844               193,768               (112,145 )   (39,069  )
excluding covered
OREO
Total
non-performing
assets, excluding     1,223,049                  1,788,297                  2,107,864                  (565,248 )     (884,815 )
covered assets
Covered loans and   196,717               213,469               203,254               (16,752  )   (6,537   )
OREO
Total
non-performing     $ 1,419,766            $ 2,001,766            $ 2,311,118            $ (582,000 )  $ (891,352 )
assets
Accruing loans
past due 90 days   $ 410,835              $ 388,712              $ 328,757              $ 22,123     $ 82,078   
or more [3]
Ratios excluding
covered loans:
Non-performing
loans
held-in-portfolio
to loans              4.86      %               6.79      %               8.21      %   
held-in-portfolio
Allowance for
loan losses to
loans                 2.70                       2.96                       3.25
held-in-portfolio
Allowance for
loan losses to
non-performing      55.54                 43.62                 39.53                             
loans, excluding
held-for-sale
Ratios including
covered loans:
Non-performing
assets to total       3.84      %               5.48      %               6.24      %   
assets
Non-performing
loans
held-in-portfolio
to loans              4.30                       6.06                       7.18
held-in-portfolio
Allowance for
loan losses to
loans                 2.73                       2.95                       3.25
held-in-portfolio
Allowance for
loan losses to
                    63.57                 48.72                 45.27                             
non-performing
loans, excluding
held-for-sale
[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 March 31, 2013 consisted of $2 million in legacy loans and $16 million in mortgage
loans (December 31, 2012- $78 million in construction loans, $16 million in commercial loans, $2 million in legacy loans and $53
thousand in mortgage loans; March 31, 2012 - $206 million in construction loans, $25 million in commercial loans, $1 million in
legacy loans and $53 thousand 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 $99 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as
of March 31, 2013.



Popular, Inc.
Financial Supplement to First Quarter 2013 Earnings Release
Table I - Activity in Non-Performing Loans
(Unaudited)
                                                                                   
Commercial loans held-in-portfolio:
                   Quarter ended                               Quarter ended
                   31-Mar-13                                  31-Dec-12
(In thousands)    BPPR          BPNA         Popular,      BPPR         BPNA         Popular,
                                                Inc.                                       Inc.
Beginning          $ 522,733      $ 142,556     $ 665,289      $ 612,781     $ 159,436     $ 772,217
balance NPLs
Plus:
  New
  non-performing     47,735         15,111        62,846         40,585        16,601        57,186
  loans
  Advances on
  existing           -              -             -              -             163           163
  non-performing
  loans
  Loans
  transferred        790            -             790            -             -             -
  from
  held-for-sale
Less:
  Non-performing
  loans              (9,198   )     (1,558  )     (10,756  )     (14,694 )     (6,580  )     (21,274 )
  transferred to
  OREO
  Non-performing
  loans              (28,850  )     (9,881  )     (38,731  )     (45,682 )     (11,745 )     (57,427 )
  charged-off
  Loans returned
  to accrual         (17,134  )     (12,249 )     (29,383  )     (66,957 )     (13,645 )     (80,602 )
  status / loan
  collections
  Loans
  transferred to     -              -             -              -             (1,674  )     (1,674  )
  held-for-sale
  Other              -              -             -              (3,300  )     -             (3,300  )
 Non-performing   (329,268 )   -          (329,268 )   -          -          -       
  loans sold^[1]
Ending balance    $ 186,808    $ 133,979   $ 320,787    $ 522,733   $ 142,556   $ 665,289 
NPLs
[1] Includes write-downs of $161,297 of loans sold.
                                                                                           
Construction loans held-in-portfolio:
                   Quarter ended                               Quarter ended
                   31-Mar-13                                  31-Dec-12
(In thousands)    BPPR          BPNA         Popular,      BPPR         BPNA         Popular,
                                                Inc.                                       Inc.
Beginning          $ 37,390       $ 5,960       $ 43,350       $ 37,793      $ 12,140      $ 49,933
balance NPLs
Plus:
  New
  non-performing     -              -             -              2,255         -             2,255
  loans
  Loans
  transferred        14,152         -             14,152         -             -             -
  from
  held-for-sale
  Other              -              -             -              3,300         -             3,300
Less:
  Non-performing
  loans              -              -             -              -             (3,605  )     (3,605  )
  transferred to
  OREO
  Non-performing
  loans              (1,082   )     -             (1,082   )     (839    )     (264    )     (1,103  )
  charged-off
  Loans returned
  to accrual         (1,940   )     (76     )     (2,016   )     (5,119  )     (2,311  )     (7,430  )
  status / loan
  collections
 Non-performing   (3,484   )   -          (3,484   )   -          -          -       
  loans sold^[1]
Ending balance    $ 45,036     $ 5,884     $ 50,920     $ 37,390    $ 5,960     $ 43,350  
NPLs
[1] Includes write-downs of $1,846 of loans sold.


*Story too large*
Mortgage loans held-in-portfolio:
                 Quarter ended                                Quarter ended
                   31-Mar-13                                     31-Dec-12
(In thousands)    BPPR           BPNA         Popular, Inc.  BPPR           BPNA         Popular, Inc.
Beginning          $ 596,106      $ 34,024     $ 630,130       $ 598,523      $ 33,529     $ 632,052
balance NPLs
Plus:
  New
  non-performing     109,816         4,507         114,323         166,768         8,104         174,872
  loans
Less:
  Non-performing
  loans              (18,110   )     (747    )     (18,857   )     (21,693   )     (989    )     (22,682   )
  transferred to
  OREO
  Non-performing
  loans              (14,608   )     (3,093  )     (17,701   )     (15,523   )     (2,936  )     (18,459   )
  charged-off
  Loans returned
 to accrual       (100,473  )   (6,698  )   (107,171  )   (131,969  )   (3,684  )   (135,653  )
  status / loan
  collections
Ending balance    $ 572,731     $ 27,993    $ 600,724     $ 596,106     $ 34,024    $ 630,130   
NPLs
Legacy loans held-in-portfolio:
                   Quarter ended                                 Quarter ended
                   31-Mar-13                                     31-Dec-12
(In thousands)    BPPR           BPNA         Popular, Inc.  BPPR           BPNA         Popular, Inc.
Beginning          $ -             $ 40,741      $ 40,741        $ -             $ 48,735      $ 48,735
balance NPLs
Plus:
  New
  non-performing     -               6,388         6,388           -               9,337         9,337
  loans
  Advances on
  existing           -               4             4               -               -             -
  non-performing
  loans
  Loans
  transferred to     -               400           400             -               -             -
  held-for-sale
Less:
  Non-performing
  loans              -               -             -               -               (50     )     (50       )
  transferred to
  OREO
  Non-performing
  loans              -               (5,315  )     (5,315    )     -               (7,313  )     (7,313    )
  charged-off
  Loans returned
  to accrual         -               (6,388  )     (6,388    )     -               (7,099  )     (7,099    )
  status / loan
  collections
  Loans
 transferred to   -            -          -            -            (2,869  )   (2,869    )
  held-for-sale
Ending balance    $ -           $ 35,830    $ 35,830      $ -           $ 40,741    $ 40,741    
NPLs
Total non-performing loans held-in-portfolio (excluding consumer loans):
                   Quarter ended                                 Quarter ended
                   31-Mar-13                                     31-Dec-12
(In thousands)    BPPR           BPNA         Popular, Inc.  BPPR           BPNA         Popular, Inc.
Beginning          $ 1,156,229     $ 223,281     $ 1,379,510     $ 1,249,097     $ 253,840     $ 1,502,937
balance NPLs
Plus:
  New
  non-performing     157,551         26,006        183,557         209,608         34,042        243,650
  loans
  Advances on
  existing           -               4             4               -               163           163
  non-performing
  loans
  Loans
  transferred        14,942          400           15,342          -               -             -
  from
  held-for-sale
  Other              -               -             -               3,300           -             3,300
Less:
  Non-performing
  loans              (27,308   )     (2,305  )     (29,613   )     (36,387   )     (11,224 )     (47,611   )
  transferred to
  OREO
  Non-performing
  loans              (44,540   )     (18,289 )
  charged-off

[TRUNCATED]
 
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