Popular, Inc. operates as a diversified financial holding company. Markets The company operates in two principal markets: Puerto Rico and Mainland United States. Puerto Rico: The company provides retail, including residential mortgage loans originations, and commercial banking services through its principal banking subsidiary, Banco Popular de Puerto Rico (Banco Popular or BPPR), as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. BPPR retail franchises in Puerto Rico included 171 branches and 599 ATMs, as of December 31, 2013. BPPR also operates eight branches in the U.S. Virgin Islands, one branch in the British Virgin Islands and one branch in New York. In the Virgin Islands, BPPR had 22 ATMs. Mainland United States: The company operates Banco Popular North America (BPNA), including its wholly-owned subsidiary E-LOAN, Inc. (E-LOAN). BPNA is a community bank providing a range of financial services and products to the communities it serves. BPNA operates branches in New York, California, Illinois, New Jersey and Florida, under the name of Popular Community Bank. E-LOAN markets deposit accounts under its name for the benefit of BPNA. Lending Activities Commercial: Commercial loans include commercial and industrial (C&I) loans to commercial customers for use in normal business operations finance working capital needs, equipment purchases or other projects; and commercial real estate (CRE) loans (excluding construction loans) for income producing real estate properties, as well as owner occupied properties. C&I loans are underwritten individually and secured with the assets of the company and the personal guarantee of the business owners. CRE loans consist of loans for income producing real estate properties and real estate developers and the financing of owner-occupied facilities if there is real estate as collateral. Construction: Construction loans are CRE loans to companies or developers used for the construction of a commercial or residential property for which repayment would be generated by the sale or permanent financing of the property. The company’s construction loan portfolio primarily consists of retail, residential (land and condominiums), office, and warehouse product types. Lease Financings: Lease financings primarily include automobile loans/leases made through automotive dealerships and equipment lease financings. Mortgage: Mortgage loans include residential mortgage loans to consumers for the purchase or refinancing of a residence and also include residential construction loans made to individuals for the construction or refurbishment of their residence. The majority of these loans are financed approximately a 15 to 30 year term, and in various cases, the loans are extended to borrowers to finance their primary residence. In various cases, government agencies or private mortgage insurers guarantee the loan. The company’s general practice is to sell a majority of its fixed-rate originations in the secondary mortgage market. Consumer: Consumer loans include personal loans, credit cards, home equity lines of credit (HELOCs), and other loans made by banks to individual borrowers. In this area, BPPR offers four unsecured products, such as personal loans, credit cards, personal credit lines, and overdraft protection. All other consumer loans are secured. HELOCs include both home equity loans and lines of credit secured by a first or second mortgage on the borrower’s residence, which allows customers to borrow against the equity in their homes. Regulations The company is registered under the Bank Holding Company Act of 1956, as amended and subject to supervision and regulation by the Board of Governors of the Federal Reserve System (the ‘Federal Reserve Board’). BPPR and BPNA are subject to supervision and examination by applicable federal and state banking agencies, including in the case of BPPR, the Federal Reserve Board and the Office of the Commissioner of Financial Institutions of Puerto Rico (the ‘Office of the Commissioner’); and in the case of BPNA, the Federal Reserve Board and the New York State Department of Financial Services. BPPR and BPNA are subject to restrictions under Section 23A of the Federal Reserve Act that limit the amount of extensions of credit and certain other ‘covered transactions’ (as defined in Section 23A) between BPPR or BPNA, on the one hand, and the company, PNA, or any of its other non-banking subsidiaries, on the other, and that impose collateralization requirements on such credit extensions. In addition, Section 23B of the Federal Reserve Act requires that any transaction between BPPR or BPNA, on the one hand, and the company, PNA, or any of its other non-banking subsidiaries, on the other, be carried out on an arm’s length basis. BPPR and BPNA are subject to the Federal Deposit Insurance Corporation deposit insurance assessments. BPPR’s deposits are insured under the Deposit Insurance Fund of the Federal Deposit Insurance Corporation. As a commercial bank organized under the laws of Puerto Rico, BPPR is subject to supervision, examination, and regulation by the Office of the Commissioner, pursuant to the Puerto Rico Banking Act of 1933, as amended. History Popular, Inc. was founded in 1917.
(BPOP:Consolidated Issue Listed on NASDAQ Global Select )
209 Munoz Rivera Avenue
Hato Rey, PR 00918
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