SAN JUAN, Puerto Rico--(BUSINESS WIRE)--Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $52.9 million for the quarter. Net income for continued operations of $43.8 million and adjusted net income of $80.8 million for the quarter ended December 31, 2014, compared to net income from continuing operations of $32.8 million and adjusted net income of $81.7 million for the quarter ended September 30, 2014.

Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said, "While there were a number of significant transactions that impacted these results, we are satisfied that our top line remains strong and our credit metrics continue to head in the right direction in spite of the challenging economic conditions in our principal market. The sale of our California operations in the period caps a transformational year for the Corporation which included the restructuring of our US operations and the repayment of our TARP funds without issuing additional equity. We continue to focus on improving our operational and financial metrics and are well positioned for an eventual improvement in the Puerto Rico economy."

Earnings Highlights
(Unaudited)		Quarters ended												Years ended
(Dollars in thousands, except per share information)		31-Dec-14				30-Sep-14				31-Dec-13				31-Dec-14				31-Dec-13
Net interest income		$	326,861			$	326,421			$	354,507			$	945,072			$	1,344,574
Provision for loan losses – non-covered loans			51,637				68,166				49,927				223,999				536,710
Provision (reversal of provision) for loan losses – covered loans [1]			(3,646	)			12,463				8,907				46,135				69,396
Net interest income after provision for loan losses			278,870				245,792				295,673				674,938				738,468
FDIC loss share expense			(18,693	)			(4,864	)			(37,164	)			(103,024	)			(82,051	)
Other non-interest income			128,588				129,194				222,440				496,070				873,064
Operating expenses			330,006				310,640				304,609				1,193,684				1,221,990
Income (loss) from continuing operations before income tax			58,759				59,482				176,340				(125,700	)			307,491
Income tax expense (benefit)			14,995				26,667				25,162				60,802				(251,327	)
Income (loss) from continuing operations		$	43,764			$	32,815			$	151,178			$	(186,502	)		$	558,818
Income (loss) from discontinued operations, net of tax		$	9,086			$	29,758			$	11,853			$	(122,980	)		$	40,509
Net income (loss)		$	52,850			$	62,573			$	163,031			$	(309,482	)		$	599,327
Net income (loss) applicable to common stock		$	51,919			$	61,643			$	162,100			$	(313,205	)		$	595,604
Net income (loss) per common share from continuing operations - Basic		$	0.41			$	0.31			$	1.46			$	(1.85	)		$	5.41
Net income (loss) per common share from continuing operations - Diluted		$	0.41			$	0.31			$	1.46			$	(1.85	)		$	5.39
Net income (loss) per common share from discontinued operations - Basic		$	0.09			$	0.29			$	0.12			$	(1.20	)		$	0.39
Net income (loss) per common share from discontinued operations - Diluted		$	0.09			$	0.29			$	0.11			$	(1.20	)		$	0.39
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.

Significant events

• During the fourth quarter of 2014, the Corporation completed the previously announced sale of its California regional operations, which resulted in a gain of $8.1 million, net of transaction costs.

The Corporation continues its strategy of relocating certain back office operations of BPNA to Puerto Rico and New York. The Corporation incurred $13.9 million in restructuring charges during the fourth quarter of 2014 and a total of $26.7 million during the year ended December 31, 2014. Additional restructuring charges amounting to approximately $22.0 million are expected to be incurred in the year 2015, comprised of $13.0 million in personnel related costs and $9.0 million in lease cancelations and other restructuring costs.

During the third quarter of 2014, the Corporation refinanced approximately $638 million in long term structured repos in the U.S. with a yield of 4.41% and replaced them with lower cost short term repos of a similar amount. As previously disclosed, the fees associated with the refinancing of these repos were $39.7 million, of which $20.7 million were recorded as interest expense during the third quarter of 2014, and approximately $19.0 million were recorded during the fourth quarter of 2014.

The decision to sell three of its U.S. regional operations resulted in the discontinuance of each of these respective operations. As required by US GAAP, current and prior periods presented in the consolidated statement of operations as well as financial information covering income and expense amounts presented in this earnings release has been retrospectively adjusted for the impact of the discontinued operations for comparative purposes. The consolidated statement of financial condition and related financial information for prior periods included in this earnings release do not reflect the reclassification of BPNA’s assets and liabilities to discontinued operations. Refer to Table P for a detail of the net loss, assets and liabilities from the discontinued operations. Also, refer to Table Q for details of the restructuring charges incurred during the quarter ended December 31, 2014.

		Quarter ended
(Unaudited)		31-Dec-14
(In thousands)		Actual Results (US GAAP)				BPNA Reorganization [2]				Other Adjustments				Adjusted Results (Non-GAAP)
Net interest income		$	326,861			$	(18,591	)		$	-			$	345,452
Provision for loan losses – non-covered loans			51,637				878				-				50,759
Provision (reversal of provision) for loan losses – covered loans [1]			(3,646	)			-				-				(3,646	)
Net interest income (expense) after provision for loan losses			278,870				(19,469	)			-				298,339
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale			10,946				1,684				-				9,262
FDIC loss share expense			(18,693	)			-				-				(18,693	)
Other non-interest income			117,642				-				-				117,642
Personnel costs			110,736				-				2,974[3]				107,762
Net occupancy expenses			23,877								1,895[4]				21,982
Loss on early extinguishment of debt			532				532				-				-
Restructuring costs			13,861				13,861				-				-
Other operating expenses			181,000				-				-				181,000
Income (loss) from continuing operations before income tax			58,759				(32,178	)			(4,869	)			95,806
Income tax expense			14,995				-				-				14,995
Income (loss) from continuing operations		$	43,764			$	(32,178	)		$	(4,869	)		$	80,811
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.
[2] Includes loss on the refinancing of structured repos for $18.6 million recorded as interest expense, impact on provision for loan losses related to NPL sales of $878 thousand, gain on bulk sales of NPLs of $1.7 million and restructuring cost of $13.9 million.
[3] Represents the impact of the compensation package granted upon separation of an officer of the Corporation equal to approximately $3.0 million.
[4] Represents the net loss on the early cancellation of a lease at BPNA of $1.9 million.

		Quarter ended
(Unaudited)		30-Sep-14
(In thousands)		Actual Results (US GAAP)				BPNA Reorganization [2]				Income Tax Adjustments [3]				Indemnification Asset Adjustment [4]			Adjusted Results (Non-GAAP)
Net interest (expense) income		$	326,421			$	(20,663	)		$	-			$	-		$	347,084
Provision for loan losses – non-covered loans			68,166				11,950				-				-			56,216
Provision for loan losses – covered loans [1]			12,463				-				-				-			12,463
Net interest (expense) income after provision for loan losses			245,792				(32,613	)			-				-			278,405
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale			15,593				-				-				-			15,593
FDIC loss share expense			(4,864	)			-				-				15,046			(19,910	)
Other non-interest income			113,601				-				-				-			113,601
Personnel costs			104,542				-											104,542
Net occupancy expenses			21,203				-											21,203
Loss on early extinguishment of debt			-				-				-				-			-
Restructuring costs			8,290				8,290				-				-			-
Other operating expenses			176,605				-				-				-			176,605
Income (loss) from continuing operations before income tax			59,482				(40,903	)			-				15,046			85,339
Income tax (benefit) expense			26,667				-				20,048				3,009			3,610
Income (loss) from continuing operations		$	32,815			$	(40,903	)		$	(20,048	)		$	12,037		$	81,729
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.
[2] Includes losses on bulk sales and reclassifications to loans held-for-sale of classified and legacy loans for an aggregated net loss $12.0 million, loss on the refinancing of structured repos for $20.7 million recorded as interest expense and restructuring cost of $8.3 million.
[3] On July 1, 2014, the Government of Puerto Rico approved an amendment to the Internal Revenue Code, which, among other things, changed the income tax rate for capital gains from 15% to 20%. As a result, the Corporation recognized an income tax expense of $20.0 million, mainly related to the deferred tax liability associated with the portfolio acquired from Westernbank.
[4] The FDIC indemnity asset amortization included a positive adjustment of $15.0 million to reverse the impact of accelerated amortization expense recorded in prior periods.

		Quarters ended
(Unaudited)		Adjusted Results Non-GAAP
(In thousands)		31-Dec-14				30-Sep-14				Variance
Net interest income		$	345,452			$	347,084			$	(1,632	)
Provision for loan losses – non-covered loans			50,759				56,216				(5,457	)
Provision (reversal of provision) for loan losses – covered loans [1]			(3,646	)			12,463				(16,109	)
Net interest income after provision for loan losses			298,339				278,405				19,934
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale			9,262				15,593				(6,331	)
FDIC loss share expense			(18,693	)			(19,910	)			1,217
Other non-interest income			117,642				113,601				4,041
Personnel costs			107,762				104,542				3,220
Net occupancy expenses			21,982				21,203				779
Loss on early extinguishment of debt			-				-				-
Restructuring costs			-				-				-
Other operating expenses			181,000				176,605				4,395
Income from continuing operations before income tax			95,806				85,339				10,467
Income tax expense			14,995				3,610				11,385
Income from continuing operations		$	80,811			$	81,729			$	(918	)
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.

Net interest income

For the quarter ended December 31, 2014, the Corporation had a net interest income of $326.9 million. Excluding the impact of the $18.6 million expense related to the refinancing of structured repos, the adjusted net interest income was $345.5 million compared to an adjusted net interest income of $347.1 million for the previous quarter. Net interest margin was 4.45% for the fourth quarter of 2014. The adjusted net interest margin was 4.70%, compared to an adjusted net interest margin of 4.64% for the third quarter of 2014. While net interest income decreased $1.6 million, the net interest margin reflects an increase of six basis points. The increase in net interest margin is mainly related to:

• Cost of total borrowings decreased by twenty six basis points mainly driven by the refinancing of $638 million in structured repos at a 4.41% rate to short term, lower cost repos at the end of the third quarter of 2014.
• An increase of twelve basis points in commercial loans yield, mainly in the Puerto Rico operations due to originations of higher yielding assets during the fourth quarter.
• Interest bearing deposits costs dropped by two basis points coupled with a lower volume of interest bearing deposits and a higher volume of non interest bearing deposits.

These positive variances in net interest margin were offset in part by:

• A decrease in volume and yield of the covered loans portfolio, mainly driven by the portfolio amortization, loan resolutions and the impact of the quarterly recast process. Refer to Table O for schedule of the accretable yield for covered loans accounted for under ASC 310-30.

BPPR’s net interest margin was 5.15%, a decrease of ten basis points from the previous quarter. Net interest income amounted to $311.2 million for the quarter ended December 31, 2014, compared with $315.7 million for the previous quarter. The decrease in the net interest income was mainly due to the above mentioned decrease in interest income from covered loans and lower interest income from investment securities, partially offset by higher income from commercial loans.

BPNA earned $31.2 million in net interest income for the quarter ended December 31, 2014. Excluding the impact of the structured repos refinancing, the net interest income was $49.8 million, compared with an adjusted net interest income of $47.1 million in the previous quarter. The net interest margin was 2.40% for the quarter. The adjusted net interest margin, excluding the impact of the structured repos refinancing, for the quarter was 3.82%, compared to an adjusted net interest margin of 3.23% in the previous quarter. The increase in net interest income was mostly the result of a lower cost of borrowings due to the refinancing of structured repos, discussed above, partially offset by lower income from investment securities.

Non-interest income

Non-interest income was $109.9 million for the fourth quarter of 2014, a decrease of $14.4 million when compared with the third quarter. Excluding the $1.7 million impact of the gain on bulk sales of NPLs during the fourth quarter as part of the BPNA reorganization, and the effect of the FDIC indemnity asset amortization adjustment of $15.0 million during the third quarter, non-interest income decreased by $1.1 million when compared to the third quarter of 2014, driven primarily by the following:

• Lower service charges on deposit accounts by $1.1 million mostly at BPPR due to lower volume on Public Sector accounts.
• Lower mortgage banking activities income by $5.7 million mainly due to higher unfavorable valuation adjustments on mortgage servicing rights of $3.7 million at the BPPR segment. Refer to Table F for additional details on mortgage banking activities.
• Lower net gain on sale of loans, including valuation adjustments on loans held-for-sale by $6.3 million due to lower commercial NPLs sales, as part of workout activities.

These negative variances were partially offset by:

• Higher other service fees by $6.3 million mostly due to higher contingent insurance commission revenues, which are realized during the fourth quarter. Refer to Table F for a breakdown of other service fees.
• Positive variance in net gains/(losses) on investment securities by $2.7 million mainly due to the third quarter loss of $1.8 million related to the sale of $94.2 million in available-for-sale securities at BPNA.
• Lower provision for loans sold with credit recourse by $2.7 million.
• Lower FDIC loss-share expense by $1.2 million, driven by lower amortization of the FDIC indemnification asset by $13.6 million, and higher mirror accounting on reimbursable expenses by $3.2 million, offset by a negative variance in the mirror accounting on credit impairment losses of $13.2 million due to reserve releases and a negative variance in the change in fair value of the true up payment obligation of $3.9 million. See additional details about covered portfolio and FDIC indemnity asset in Table O.

Refer to Table B for further details.

Financial Impact of FDIC-Assisted Transaction
(Unaudited)		Quarters ended												Years ended
(In thousands)		31-Dec-14				30-Sep-14				31-Dec-13				31-Dec-14				31-Dec-13
Income Statement
Interest income on covered loans		$	61,285			$	68,251			$	86,794			$	293,609			$	300,745
Total FDIC loss share expense			(18,693	)			(4,864	)			(37,164	)			(103,024	)			(82,051	)
Other non-interest income			-				-				-				-				593
Provision for loan losses			(3,646	)			12,463				8,907				46,135				69,396
Total revenues less provision for loan losses		$	46,238			$	50,924			$	40,723			$	144,450			$	149,891
Balance Sheet
Loans covered under loss-sharing agreements with FDIC		$	2,542,662			$	2,654,263			$	2,984,427
FDIC loss share asset			542,454				681,106				948,608
FDIC true-up payment obligation			129,304				126,473				127,513

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

Operating expenses

Operating expenses increased by $19.4 million when compared with the third quarter. Excluding the impact of the significant events detailed in the Adjusted Results (Non-GAAP) tables above, operating expenses increased by $8.4 million compared to the third quarter of 2014, driven primarily by:

• Higher professional fees by $12.7 million, mainly at BPPR due to higher legal fees by $5.7 million mostly as a result of the FDIC arbitration proceedings and other corporate matters completed during the quarter, an increase in technology services by $3.9 million, an increase in consulting and other professional services by $1.9 million and an increase in collection expenses by $1.1 million.
• Higher personnel cost by $3.2 million, mainly due to salaries expense as a result of bonus and incentives compensation.
• Higher net occupancy expense by $0.8 million, mainly at BPNA due to increase in property taxes.

These increases were partially offset by:

• Lower other operating expenses by $7.8 million, mainly due to lower provision for unused commitments.
• Lower other operating taxes by $1.0 million, mainly due to lower personal property taxes at BPPR.

Non-personnel credit-related costs, which include collections, appraisals, credit related fees, and OREO expenses, amounted to $27.2 million for the fourth quarter of 2014, compared with $25.8 million for the third quarter of 2014. The increase was principally due to higher collections expenses at BPPR.

Full-time equivalent employees (“FTEs”), including discontinued operations, were 7,752 as of December 31, 2014, compared with 7,848 as of September 30, 2014, and 8,059 as of December 31, 2013.

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

Income taxes

Income tax expense amounted to $15.0 million for the fourth quarter of 2014, compared to $26.7 million, or $3.6 million on an adjusted basis, for the previous quarter. The effective income tax rate for the fourth quarter of 2014, on an adjusted basis, was 16%. Refer to earnings highlights section above for a description of adjusted results.

On July 1, 2014, the Government of Puerto Rico approved an amendment to the Internal Revenue Code, which, among other things, changed the income tax rate for capital gains from 15% to 20%. As a result, the Corporation recognized an income tax expense of approximately $20.0 million during the third quarter of 2014, mainly related to the deferred tax liability associated with the portfolio acquired from Westernbank.

During the third quarter of 2014, the Corporation recorded a favorable adjustment of approximately $6.1 million in connection with filing its tax returns for the year 2013. Also, the Corporation reversed approximately $3.6 million of reserves for uncertain tax positions due to the expiration of the statute of limitations in the Puerto Rico operations. Excluding these adjustments, the adjusted income tax expense would have been $13.3 million, for an effective tax rate of approximately 16% on the adjusted pre-tax income.

Credit Quality

The following table presents non-performing assets information:

Non-Performing Assets
(Unaudited)
(In thousands)		31-Dec-14				30-Sep-14				31-Dec-13
Total non-performing loans held-in-portfolio, excluding covered loans		$	625,338			$	621,945			$	597,948
Non-performing loans held-for-sale			18,899				19,728				1,092
Other real estate owned (“OREO”), excluding covered OREO			135,500				135,256				135,501
Total non-performing assets, excluding covered assets			779,737				776,929				734,541
Covered loans and OREO			148,099				166,533				197,388
Total non-performing assets		$	927,836			$	943,462			$	931,929
Net charge-offs for the quarter (excluding covered loans)		$	50,187			$	40,469			$	35,366
Ratios (excluding covered loans):
Non-covered loans held-in-portfolio (1)		$	19,404,451			$	19,359,216			$	21,611,866
Non-performing loans held-in-portfolio to loans held-in-portfolio (1)			3.22	%			3.21	%			2.77	%
Allowance for loan losses to loans held-in-portfolio			2.68				2.69				2.49
Allowance for loan losses to non-performing loans, excluding loans held-for-sale			83.11				83.88				90.05
[1] During the quarter ended June 30, 2014 approximately $1.8 billion in loans held-in-portfolio were reclassified to the discontinued operations, of which $48 thousand were in non-performing status as of September 30, 2014.
Refer to Table H for additional information.

Provision for Loan Losses
(Unaudited)		Quarters ended											Years ended
(In thousands)		31-Dec-14				30-Sep-14			31-Dec-13				31-Dec-14				31-Dec-13
Provision (reversal) for loan losses - non-covered loans:
BPPR		$	52,206			$	61,868		$	62,658			$	242,849			$	547,886
BPNA			(569	)			6,298			(12,731	)			(18,850	)			(11,176	)
Total provision for loan losses - non-covered loans			51,637				68,166			49,927				223,999				536,710
Provision for loan losses - covered loans			(3,646	)			12,463			8,907				46,135				69,396
Total provision for loan losses		$	47,991			$	80,629		$	58,834			$	270,134			$	606,106

Credit Quality

The Corporation’s credit quality trends during the fourth quarter of 2014 were stable with the US regions exhibiting continued improvements and the Puerto Rico region remaining in line with the prior quarter. The BPNA segment continued to reflect strong performance led by the improved risk profile of its loan portfolios, further strengthened by the sale of certain non-performing and legacy assets. Notwithstanding, Puerto Rico’s fiscal and economic conditions continue to present a challenging operating environment.

The following presents credit quality performance for the fourth quarter of 2014 for the Corporation’s non-covered portfolios:

• Inflows of NPLs held-in-portfolio, excluding consumer loans, increased by $83.4 million, or 65.2%, from the previous quarter, primarily due to additions from the BPPR commercial portfolio, of which $75.0 million results from one particular public sector borrower.
• Non-performing loans held-in-portfolio increased slightly by $3.4 million, or 0.6%, during the quarter ended December 31, 2014, mainly driven by a $14.0 million increase in the BPPR segment, largely reflective of higher commercial inflows related to the aforementioned $75.0 million public sector borrower, offset by the return to accrual status of a previously disclosed $51.4 million addition during the first quarter of 2014. This increase was in part offset by a decline of $10.6 million in the BPNA segment, mostly related to commercial NPL resolutions and to the sale of certain mortgage non-performing loans as part of the ongoing US operations reorganization. At December 31, 2014, NPLs represented 3.2% of total loans held-in-portfolio, flat when compared to September 30, 2014.
• Net charge-offs, excluding write-downs, totaled $50.2 million, or an annualized 1.04% of average non-covered loans held-in-portfolio in the fourth quarter of 2014, compared to $40.5 million, or 0.83%, in the third quarter of 2014. The increase of $9.7 million was primarily driven by a $13.8 million increase in the BPPR segment, in part due to higher commercial recoveries during the third quarter of 2014. For the fourth quarter of 2014, total write-downs amounted to $3.4 million, of which $1.4 million resulted from the sale of approximately $28.2 million of U.S. non-performing and legacy bulk loan sales. Refer to Table J for further information on net charge-offs and related ratios.
• The allowance for loan losses remained essentially flat decreasing slightly by $2.0 million from the third quarter of 2014, prompted by a decline in the BPNA segment, primarily due to the aforementioned write-downs related to the sale of certain portfolios. The general and specific reserves related to non-covered loans totaled $379.6 million and $140.1 million, respectively, at quarter-end, compared with $389.7 million and $132.0 million, respectively, as of September 30, 2014. The ratio of the allowance for loan losses to loans held-in-portfolio stood at 2.68% in the fourth quarter of 2014, compared to 2.69% in the previous quarter.
• The ratio of the allowance for loan losses to NPLs held-in-portfolio stood at 83.1%, compared to 83.9% in the previous quarter.
• The provision for loan losses for the fourth quarter of 2014 totaled $51.6 million, decreasing by $16.5 million from the third quarter of 2014, due to reductions of $9.7 million and $6.9 million in the BPPR and the BPNA segments, respectively. The above mentioned write-downs of $3.4 million required a provision of $2.0 million, of which $0.9 million were associated with U.S. non-performing and legacy bulk loan sales.

Credit Quality by Segment
(Unaudited)
(In thousands)		Quarters ended
BPPR		31-Dec-14				30-Sep-14				31-Dec-13
Provision for loan losses		$	52,206			$	61,868			$	62,658
Net charge-offs			52,523				38,682				35,256
Total non-performing loans held-in-portfolio, excluding covered loans			606,238				592,229				447,255
Allowance / non-covered loans held-in-portfolio			3.07	%			3.09	%			2.69	%
		Quarters ended
BPNA		31-Dec-14				30-Sep-14				31-Dec-13
Provision for loan losses (reversal of provision) - Continuing operations		$	(569	)		$	6,298			$	(12,731	)
Provision for loan losses (reversal of provision) - Discontinued operations			-				-				(2,198	)
Net charge-offs (recoveries) - Continuing operations			(2,336	)			1,787				(603	)
Net charge-offs (recoveries) - Discontinued operations			-				-				713
Total non-performing loans held-in-portfolio			19,100				29,716				150,693
Allowance / non-covered loans held-in-portfolio			0.88	%			0.91	%			1.95	%

BPPR Segment

• Inflows of NPLs held-in-portfolio, excluding consumer loans, increased by $83.0 million, or 70.0%, from the third quarter of 2014, mostly driven by higher commercial inflows of $88.7 million, primarily associated with the addition of a $75.0 million public sector borrower, as mortgage NPL inflows declined by $6.2 million from the previous quarter.
• Total non-performing loans held-in-portfolio increased by $14.0 million, or 2.4%, from the third quarter of 2014, mainly driven by higher commercial and mortgage NPLs of $12.8 million and $7.7 million, respectively, partially offset by a construction NPL decline of $5.3 million. As mentioned above, the commercial NPL increase was mainly driven by a $75.0 million public sector borrower, offset by the return to accrual status of the previously disclosed $51.4 million addition during the first quarter of 2014. At December 31, 2014, NPLs represented 3.8% of total loans held-in-portfolio, compared to 3.7% in the third quarter.
• Net charge-offs were $52.5 million, increasing by $13.8 million from the third quarter of 2014, primarily reflecting higher commercial NCOs of $12.9 million. The uptick in commercial net charge-offs derived from an increase in charge-offs of $8.0 million primarily related to a discounted pay-off transaction, and from higher recoveries of $4.9 million during the third quarter of 2014. The ratio of net charge-offs to average loans held-in-portfolio increased to 1.33% on an annualized basis from 0.98% in the previous quarter.
• The allowance for loan losses remained flat at $489.1 million, or 3.1%, as a percentage of loans held-in-portfolio. The ratio of the allowance for loan losses to NPLs held-in-portfolio stood at 80.7%, compared to 82.6% in the previous quarter.
• The provision for loan losses for the fourth quarter of 2014 amounted to $52.2 million, or 99% of net charge offs, decreasing by $9.7 million from the previous quarter. This decrease was predominantly driven by a higher quarter over quarter reserve increase during the third quarter of 2014, combined with the aforementioned NCO activity.

BPNA Segment

• Total NPLs held-in-portfolio decreased by $10.6 million, or 35.7%, from the third quarter of 2014. This decrease was primarily driven by a reduction in commercial and legacy NPLs of $5.6 million and $4.1 million, respectively, mainly as a result of loan resolutions. Mortgage NPLs decreased by $2.4 million, mainly as a result of the previously mentioned non-performing bulk loan sales. At December 31, 2014, NPLs represented 0.55% of total loans held-in-portfolio, compared to 0.84% in the third quarter.
• Excluding the $3.4 million write-downs of which $1.4 million were related to US non-performing and legacy assets, net charge-offs (recoveries) amounted to recoveries of $2.3 million, decreasing by $4.1 million from the previous quarter of 2014. The ratio of net charge-offs to average loans held-in-portfolio was a recovery of 27 basis points on an annualized basis, compared to 19 basis points in the previous quarter.
• The allowance for loan losses decreased by $1.7 million to $30.6 million from the third quarter of 2014, mainly due to the write-down related to the loans sold. The allowance for loan losses as a percentage of loans held-in-portfolio decreased to 0.88% from 0.91% in the previous quarter, reflective of the low risk profile of the portfolios. The ratio of allowance for loan losses to NPLs held-in-portfolio stood at 160.1%, compared to 108.5% in the previous quarter.
• The provision for loan losses in the fourth quarter of 2014 amounted to a provision release of approximately $0.6 million, decreasing by $6.9 million from the previous quarter. The above mentioned write-downs required a provision of $2.0 million of which $0.9 million were associated with U.S. non-performing and legacy bulk loan sales, compared to $12 million in the previous quarter.

Financial Condition Highlights
(Unaudited)
(In thousands)		31-Dec-14			30-Sep-14			31-Dec-13
Money market, trading and investment securities		$	7,475,232		$	7,200,291		$	6,815,244
Loans not covered under loss sharing agreements with the FDIC			19,404,451			19,359,216			21,611,866
Loans covered under loss sharing agreements with the FDIC			2,542,662			2,654,263			2,984,427
Assets from discontinued operations			-			1,129,053			-
Total assets			33,094,172			34,099,095			35,749,333
Deposits			24,807,535			24,466,105			26,711,145
Borrowings			3,004,685			3,375,485			3,645,246
Liabilities from discontinued operations			5,064			1,106,762			-
Total liabilities			28,822,782			29,800,703			31,123,183
Stockholders’ equity			4,271,390			4,298,392			4,626,150

Total assets decreased by $1.0 billion from the third quarter of 2014, driven by:

• A decrease of $1.1 billion in assets from discontinued operations as the Corporation completed the sale of the California regional operations. Refer to Table P.
• A decrease of $412.6 million in investment securities available for sale, of which $271.3 million was at BPNA mainly from CMO’s and MBS, while BPPR decreased $138.3 million mainly from $234.8 million in US government securities, which was partially offset by an increase of $107.3 million in US treasury securities.
• A decrease of $138.7 million in FDIC loss share asset mainly due to collections and the amortization of the asset, as detailed in Table O.
• A decrease of $71.9 million in loans held for sale, mainly at BPNA driven by bulk sales of loans as part of its reorganization strategy.
• A decrease of $111.6 million in covered loans held-in-portfolio due to the normal run-off of the portfolio.
• A decrease of $20.9 million in other real estate due to the resolution non-performing assets.

These decreases were partially offset by:

• An increase in money market investments of $703.3 million, mainly due to lower trading activities on investment securities available for sale, as discussed above.

Total liabilities decreased by $1.0 billion from the third quarter of 2014, driven by:

• A decrease of $1.1 billion in liabilities from discontinued operations as the corporation completed the sale of the California regional operations. Refer to Table P.
• A decrease of $379.1 million in federal funds purchased and assets sold under agreements to repurchase due to a decrease of $479.0 million in repos mainly at BPNA, offset by an increase at BPPR of $100.0 million in federal funds purchased.

These decreases were partially offset by:

• An increase of $341.4 million in total deposits, mainly due to an increase of $324.0 million in time deposits and an increase of $279.8 million in demand deposits due to deposits in trust received at BPPR for the payment of debt instruments on behalf of the local government, which was partially offset by a decrease of $331.5 million in brokered deposits. Refer to Table G for the composition of deposits.
• An increase in other liabilities of $153.1 million driven by an increase of approximately $120.7 million in the minimum pension liability due to adjustments to the mortality table and the impact of using a lower discount rate.

Stockholders’ equity decreased by $27.0 million from the third quarter of 2014, mainly as a result of an increase of $79.8 million in accumulated other comprehensive loss, which was partially offset by net income for the quarter of $52.9 million. The other comprehensive loss includes an increase of approximately $103.0 million in the adjustment of pension and post retirement plans, net of tax, which was partially offset by an increase in unrealized gains from securities available for sale of $25.3 million. Refer to Table A for capital ratios.

The following table presents the preliminary regulatory capital ratios based on the current Basel I regulatory capital framework and under the Basel III Transitional Capital Rules for non-advanced approach banking organizations in effect as of January 1, 2015.

Ratios as of December 31, 2014		Basel I			Basel III			Variance
Tier 1 risk-based capital		18.17	%		16.90	%		(1.27)	%
Total risk-based capital		19.45	%		19.58	%		0.13	%
Tier 1 leverage		11.96	%		11.78	%		(0.18)	%
Common equity tier 1 ratio		15.92	%		16.51	%		0.59	%

The reduction of 127 basis points in Tier 1 risk-based capital under Basel III relates mainly to the impact of the phase-out provisions of the New Capital Rules on the Corporation’s $427 million in trust preferred securities. Under Basel III, only 25% of the outstanding balance of these securities is allowed as Tier 1, with the remaining balance included in Total risk-based capital.

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 and the impact of proposed capital standards on our capital ratios; (v) the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our businesses, business practices and cost of operations; (vi) regulatory approvals that may be necessary to undertake certain actions or consummate strategic transactions such as acquisitions and dispositions; (vii) 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; (viii) the performance of the stock and bond markets; (ix) competition in the financial services industry; (x) additional Federal Deposit Insurance Corporation assessments; and (xi) possible legislative, tax or regulatory changes. 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, 2013, 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 among the top 50 U.S. banks by assets. 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 and Florida.

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, January 22, 2015, at 10:00 a.m. Eastern Standard 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 1-866-235-1201 or 1-412-902-4127.

A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Friday, January 30, 2015. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10058189.

Popular, Inc.

Financial Supplement to Fourth Quarter 2014 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 - Mortgage Banking Activities and 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

Table P - Financial Information from Discontinued Operations

Table Q - Restructuring Charges

Table R - Adjusted Consolidated Statement of Operations for the Year Ended December 31, 2014 (Non-GAAP)

POPULAR, INC.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table A - Selected Ratios and Other Information
(Unaudited)
		Quarters ended												Years ended
		31-Dec-14				30-Sep-14				31-Dec-13				31-Dec-14				31-Dec-13
Basic EPS from continuing operations		$	0.41			$	0.31			$	1.46			$	(1.85	)		$	5.41
Basic EPS from discontinued operations		$	0.09			$	0.29			$	0.12			$	(1.20	)		$	0.39
Total Basic EPS		$	0.50			$	0.60			$	1.58			$	(3.05	)		$	5.80
Diluted EPS from continuing operations		$	0.41			$	0.31			$	1.46			$	(1.85	)		$	5.39
Diluted EPS from discontinued operations		$	0.09			$	0.29			$	0.11			$	(1.20	)		$	0.39
Total Diluted EPS		$	0.50			$	0.60			$	1.57			$	(3.05	)		$	5.78
Average common shares outstanding			102,859,416				102,953,328				102,774,144				102,848,792				102,693,685
Average common shares outstanding - assuming dilution			103,166,349				103,152,916				103,081,417				102,848,792				103,061,475
Common shares outstanding at end of period			103,476,847				103,448,206				103,397,699				103,476,847				103,397,699
Market value per common share		$	34.05			$	29.44			$	28.73			$	34.05			$	28.73
Market capitalization - (In millions)		$	3,523			$	3,046			$	2,971			$	3,523			$	2,971
Return on average assets			0.63	%			0.71	%			1.79	%			(0.88	)%			1.65	%
Return on average common equity			4.78	%			5.75	%			14.59	%			(6.95	)%			14.43	%
Net interest margin [2]			4.70	%			4.64	%			4.75	%			4.67	%			4.52	%
Common equity per share		$	40.79			$	41.07			$	44.26			$	40.79			$	44.26
Tangible common book value per common share (non-GAAP) [1]		$	35.93			$	36.24			$	37.56			$	35.93			$	37.56
Tangible common equity to tangible assets (non-GAAP) [1]			11.41	%			11.16	%			11.08	%			11.41	%			11.08	%
Tier 1 risk-based capital [3]			18.17	%			16.86	%			19.15	%			18.17	%			19.15	%
Total risk-based capital [3]			19.45	%			18.14	%			20.42	%			19.45	%			20.42	%
Tier 1 leverage [3]			11.96	%			11.14	%			12.85	%			11.96	%			12.85	%
Tier 1 common equity to risk-weighted assets (non-GAAP) [1] [3]			15.92	%			14.74	%			14.83	%			15.92	%			14.83	%
[1] Refer to Table N for Non-GAAP reconciliations.
[2] Not on a taxable equivalent basis. For the quarter ended December 31, 2014 and September 30, 2014, excludes the impact of $18.6 million and $20.7 million fees, respectively, related to repos refinancing. US GAAP Net interest margin was 4.45% for the fourth quarter, compared to 4.36% for the previous quarter. For the year ended December 31, 2014, excludes the impact of $39.2 million and $414.1 million, respectively, related to repos refinancing and the accelerated amortization of the TARP discount. The US GAAP Net interest margin was 3.16% for the year ended December 31, 2014. Refer to Tables D & E for reconciliation.
[3] Capital ratios for the current quarter are preliminary.

POPULAR, INC.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table B - Consolidated Statement of Operations
(Unaudited)
		Quarters ended								Variance				Quarter ended				Variance				Years ended
(In thousands, except per share information)		31-Dec-14				30-Sep-14				Q4 2014 vs. Q3 2014				31-Dec-13				Q4 2014 vs. Q4 2013				31-Dec-14				31-Dec-13
Interest income:
Loans		$	357,570			$	362,592			$	(5,022	)		$	384,015			$	(26,445	)		$	1,478,750			$	1,481,096
Money market investments			1,113				1,007				106				832				281				4,224				3,464
Investment securities			30,361				33,154				(2,793	)			34,317				(3,956	)			132,631				141,807
Trading account securities			2,891				4,446				(1,555	)			5,361				(2,470	)			17,938				21,573
Total interest income			391,935				401,199				(9,264	)			424,525				(32,590	)			1,633,543				1,647,940
Interest expense:
Deposits			25,473				26,533				(1,060	)			28,681				(3,208	)			105,087				124,857
Short-term borrowings			20,489				28,955				(8,466	)			9,319				11,170				67,376				38,430
Long-term debt			19,112				19,290				(178	)			32,018				(12,906	)			516,008				140,079
Total interest expense			65,074				74,778				(9,704	)			70,018				(4,944	)			688,471				303,366
Net interest income (expense)			326,861				326,421				440				354,507				(27,646	)			945,072				1,344,574
Provision for loan losses - non-covered loans			51,637				68,166				(16,529	)			49,927				1,710				223,999				536,710
Provision (recovery of provision) for loan losses - covered loans			(3,646	)			12,463				(16,109	)			8,907				(12,553	)			46,135				69,396
Net interest income (expense) after provision for loan losses			278,870				245,792				33,078				295,673				(16,803	)			674,938				738,468
Service charges on deposit accounts			39,456				40,585				(1,129	)			39,814				(358	)			158,637				162,870
Other service fees			61,140				54,839				6,301				60,087				1,053				225,265				229,351
Mortgage banking activities			8,747				14,402				(5,655	)			14,387				(5,640	)			30,615				71,657
Net (loss) gain and valuation adjustments on investment securities			893				(1,763	)			2,656				2,110				(1,217	)			(870	)			7,966
Trading account profit (loss)			586				740				(154	)			(1,547	)			2,133				4,358				(13,483	)
Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale			10,946				15,593				(4,647	)			3,346				7,600				40,591				(52,708	)
Adjustments (expense) to indemnity reserves on loans sold			(6,817	)			(9,480	)			2,663				(6,892	)			75				(34,098	)			(37,054	)
FDIC loss share (expense) income			(18,693	)			(4,864	)			(13,829	)			(37,164	)			18,471				(103,024	)			(82,051	)
Other operating income			13,637				14,278				(641	)			111,135				(97,498	)			71,572				504,465
Total non-interest income			109,895				124,330				(14,435	)			185,276				(75,381	)			393,046				791,013
Operating expenses:
Personnel costs
Salaries			71,899				71,166				733				69,391				2,508				281,252				276,072
Commissions, incentives and other bonuses			18,439				14,738				3,701				13,523				4,916				59,138				57,060
Pension, postretirement and medical insurance			6,901				9,282				(2,381	)			13,138				(6,237	)			32,416				55,106
Other personnel costs, including payroll taxes			13,497				9,356				4,141				10,353				3,144				45,873				40,459
Total personnel costs			110,736				104,542				6,194				106,405				4,331				418,679				428,697
Net occupancy expenses			23,877				21,203				2,674				23,714				163				86,707				86,651
Equipment expenses			13,091				12,370				721				11,536				1,555				48,917				46,028
Other taxes			14,343				15,369				(1,026	)			13,595				748				56,918				58,028
Professional fees			80,383				67,649				12,734				74,138				6,245				282,055				278,127
Communications			6,119				6,455				(336	)			6,149				(30	)			25,684				25,385
Business promotion			13,530				13,062				468				16,702				(3,172	)			54,016				59,453
FDIC deposit insurance			9,338				9,511				(173	)			14,672				(5,334	)			40,307				56,728
Loss on early extinguishment of debt			532				-				532				-				532				532				3,388
Other real estate owned (OREO) expenses			20,016				19,745				271				9,502				10,514				49,611				79,658
Credit and debit card processing, volume, interchange and other expenses			5,093				5,659				(566	)			5,284				(191	)			21,588				19,901
Other operating expenses			17,004				24,759				(7,755	)			20,910				(3,906	)			73,785				71,975
Amortization of intangibles			2,083				2,026				57				2,002				81				8,160				7,971
Restructuring costs			13,861				8,290				5,571				-				13,861				26,725				-
Total operating expenses			330,006				310,640				19,366				304,609				25,397				1,193,684				1,221,990
Income (loss) from continuing operations before income tax			58,759				59,482				(723	)			176,340				(117,581	)			(125,700	)			307,491
Income tax expense (benefit)			14,995				26,667				(11,672	)			25,162				(10,167	)			60,802				(251,327	)
Income (loss) from continuing operations			43,764				32,815				10,949				151,178				(107,414	)			(186,502	)			558,818
Income (loss) from discontinued operations, net of tax			9,086				29,758				(20,672	)			11,853				(2,767	)			(122,980	)			40,509
Net income (loss)		$	52,850			$	62,573			$	(9,723	)		$	163,031			$	(110,181	)		$	(309,482	)		$	599,327
Net income (loss) applicable to common stock		$	51,919			$	61,643			$	(9,724	)		$	162,100			$	(110,181	)		$	(313,205	)		$	595,604
Net income (loss) per common share - basic:
Net income (loss) from continuing operations		$	0.41			$	0.31			$	0.10			$	1.46			$	(1.05	)		$	(1.85	)		$	5.41
Net income (loss) from discontinued operations		$	0.09			$	0.29			$	(0.20	)		$	0.12			$	(0.03	)		$	(1.20	)		$	0.39
Net income (loss) per common share - basic		$	0.50			$	0.60			$	(0.10	)		$	1.58			$	(1.08	)		$	(3.05	)		$	5.80
Net income (loss) per common share - diluted:
Net income (loss) from continuing operations		$	0.41			$	0.31			$	0.10			$	1.46			$	(1.05	)		$	(1.85	)		$	5.39
Net income (loss) from discontinued operations		$	0.09			$	0.29			$	(0.20	)		$	0.11			$	(0.02	)		$	(1.20	)		$	0.39
Net income (loss) per common share - diluted		$	0.50			$	0.60			$	(0.10	)		$	1.57			$	(1.07	)		$	(3.05	)		$	5.78

Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table C - Consolidated Statement of Financial Condition
(Unaudited)
														Variance
														Q4 2014 vs.
(In thousands)		31-Dec-14				30-Sep-14				31-Dec-13				Q3 2014
Assets:
Cash and due from banks		$	447,011			$	321,914			$	423,211			$	125,097
Money market investments			1,756,470				1,053,121				858,453				703,349
Trading account securities, at fair value			138,527				145,343				339,743				(6,816	)
Investment securities available-for-sale, at fair value			5,315,159				5,727,766				5,294,800				(412,607	)
Investment securities held-to-maturity, at amortized cost			103,170				112,893				140,496				(9,723	)
Other investment securities, at lower of cost or realizable value			161,906				161,168				181,752				738
Loans held-for-sale, at lower of cost or fair value			106,104				178,008				110,426				(71,904	)
Loans held-in-portfolio:
Loans not covered under loss sharing agreements with the FDIC			19,498,286				19,450,677				21,704,010				47,609
Loans covered under loss sharing agreements with the FDIC			2,542,662				2,654,263				2,984,427				(111,601	)
Less: Unearned income			93,835				91,461				92,144				2,374
Allowance for loan losses			601,792				611,375				640,555				(9,583	)
Total loans held-in-portfolio, net			21,345,321				21,402,104				23,955,738				(56,783	)
FDIC loss share asset			542,454				681,106				948,608				(138,652	)
Premises and equipment, net			494,581				497,111				519,516				(2,530	)
Other real estate not covered under loss sharing agreements with the FDIC			135,500				135,256				135,501				244
Other real estate covered under loss sharing agreements with the FDIC			130,266				151,382				168,007				(21,116	)
Accrued income receivable			121,818				116,746				131,536				5,072
Mortgage servicing assets, at fair value			148,694				152,282				161,099				(3,588	)
Other assets			1,643,920				1,634,819				1,687,558				9,101
Goodwill			465,676				461,246				647,757				4,430
Other intangible assets			37,595				37,777				45,132				(182	)
Assets from discontinued operations			-				1,129,053				-				(1,129,053	)
Total assets		$	33,094,172			$	34,099,095			$	35,749,333			$	(1,004,923	)
Liabilities and Stockholders’ Equity:
Liabilities:
Deposits:
Non-interest bearing		$	5,783,748			$	5,521,415			$	5,922,682			$	262,333
Interest bearing			19,023,787				18,944,690				20,788,463				79,097
Total deposits			24,807,535				24,466,105				26,711,145				341,430
Federal funds purchased and assets sold under agreements to repurchase			1,271,657				1,650,712				1,659,292				(379,055	)
Other short-term borrowings			21,200				1,200				401,200				20,000
Notes payable			1,711,828				1,723,573				1,584,754				(11,745	)
Other liabilities			1,005,498				852,351				766,792				153,147
Liabilities from discontinued operations			5,064				1,106,762				-				(1,101,698	)
Total liabilities			28,822,782				29,800,703				31,123,183				(977,921	)
Stockholders’ equity:
Preferred stock			50,160				50,160				50,160				-
Common stock			1,036				1,036				1,034				-
Surplus			4,196,458				4,171,890				4,170,152				24,568
Retained earnings			257,725				229,306				594,430				28,419
Treasury stock			(4,117	)			(3,933	)			(881	)			(184	)
Accumulated other comprehensive loss			(229,872	)			(150,067	)			(188,745	)			(79,805	)
Total stockholders’ equity			4,271,390				4,298,392				4,626,150				(27,002	)
Total liabilities and stockholders’ equity		$	33,094,172			$	34,099,095			$	35,749,333			$	(1,004,923	)

Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER
(Unaudited)
		Quarter ended										Quarter ended										Quarter ended										Variance											Variance
		31-Dec-14										30-Sep-14										31-Dec-13										Q4 2014 vs. Q3 2014											Q4 2014 vs. Q4 2013
($ amounts in millions; yields not on a taxable equivalent basis)		Average balance				Income / Expense			Yield / Rate			Average balance				Income / Expense			Yield / Rate			Average balance				Income / Expense			Yield / Rate			Average balance				Income / Expense				Yield / Rate			Average balance				Income / Expense				Yield / Rate
Assets:
Interest earning assets:
Money market, trading and investment securities		$	7,220			$	34.4		1.90	%		$	7,501			$	38.6		2.06	%		$	7,038			$	40.5		2.30	%			($281	)			($4.2	)		(0.16	)%		$	182				($6.1	)		(0.40	)%
Loans not covered under loss sharing agreements with the FDIC:
Commercial			8,219				101.9		4.92				8,239				99.6		4.80				8,356				100.7		4.78				(20	)			2.3			0.12				(137	)			1.2			0.14
Construction			233				3.8		6.41				201				2.5		4.86				285				4.4		6.15				32				1.3			1.55				(52	)			(0.6	)		0.26
Mortgage			6,538				84.1		5.15				6,646				84.0		5.05				6,688				87.1		5.21				(108	)			0.1			0.10				(150	)			(3.0	)		(0.06	)
Consumer			3,884				96.6		9.86				3,905				98.4		10.00				3,742				94.5		10.02				(21	)			(1.8	)		(0.14	)			142				2.1			(0.16	)
Lease financing			555				9.9		7.11				545				9.8		7.20				538				10.5		7.79				10				0.1			(0.09	)			17				(0.6	)		(0.68	)
Total loans not covered under loss sharing agreements with the FDIC			19,429				296.3		6.07				19,536				294.3		5.99				19,609				297.2		6.03				(107	)			2.0			0.08				(180	)			(0.9	)		0.04
Loans covered under loss sharing agreements with the FDIC			2,615				61.3		9.31				2,727				68.3		9.95				3,017				86.8		11.43				(112	)			(7.0	)		(0.64	)			(402	)			(25.5	)		(2.12	)
Total loans			22,044				357.6		6.45				22,263				362.6		6.48				22,626				384.0		6.75				(219	)			(5.0	)		(0.03	)			(582	)			(26.4	)		(0.30	)
Total interest earning assets			29,264			$	392.0		5.33	%			29,764			$	401.2		5.36	%			29,664			$	424.5		5.69	%			(500	)			($9.2	)		(0.03	)%			(400	)			($32.5	)		(0.36	)%
Allowance for loan losses			(618	)									(629	)									(602	)									11											(16	)
Other non-interest earning assets			4,171										4,416										4,997										(245	)										(826	)
Assets from discontinued operations			491										1,473										1,976										(982	)										(1,485	)
Total average assets		$	33,308									$	35,024									$	36,035									$	(1,716	)									$	(2,727	)
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market		$	4,788			$	4.0		0.33	%		$	4,876			$	3.9		0.32	%		$	4,629			$	3.7		0.32	%		$	(88	)		$	0.1			0.01	%		$	159			$	0.3			0.01	%
Savings			6,788				3.8		0.22				6,740				3.7		0.22				6,663				3.7		0.22				48				0.1			-				125				0.1			-
Time deposits			7,409				17.7		0.95				7,569				18.9		0.99				7,790				21.3		1.08				(160	)			(1.2	)		(0.04	)			(381	)			(3.6	)		(0.13	)
Total interest bearing deposits			18,985				25.5		0.53				19,185				26.5		0.55				19,082				28.7		0.60				(200	)			(1.0	)		(0.02	)			(97	)			(3.2	)		(0.07	)
Borrowings[1]			2,992				21.0		2.80				3,591				27.6		3.06				3,794				41.3		4.35				(599	)			(6.6	)		(0.26	)			(802	)			(20.3	)		(1.55	)
Total interest bearing liabilities			21,977				46.5		0.84				22,776				54.1		0.94				22,876				70.0		1.22				(799	)			(7.6	)		(0.10	)			(899	)			(23.5	)		(0.38	)
Net interest spread									4.49	%									4.42	%									4.47	%										0.07	%										0.02	%
Non-interest bearing deposits			5,636										5,464										5,468										172											168
Other liabilities			849										860										1,039										(11	)										(190	)
Liabilities from discontinued operations			486										1,618										2,193										(1,132	)										(1,707	)
Stockholders' equity			4,360										4,306										4,459										54											(99	)
Total average liabilities and stockholders' equity		$	33,308									$	35,024									$	36,035									$	(1,716	)									$	(2,727	)
Adjusted net interest income / margin non-taxable equivalent basis						$	345.5		4.70	%						$	347.1		4.64	%						$	354.5		4.75	%							($1.6	)		0.06	%							($9.0	)		(0.05	)%
Impact of fees related to repos refinancing						$	18.6									$	20.7
Net interest income (expense)/margin non-taxable equivalent basis						$	326.9		4.45	%						$	326.4		4.36	%						$	354.5		4.75	%
(1) Borrowing expense for the fourth and third quarters, including the fees related to repos refinancing, was 5.27% and 5.34%, respectively.

Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE
(Unaudited)
		Year ended										Year ended
		31-Dec-14										31-Dec-13										Variance
		Average				Income /			Yield /			Average				Income /			Yield /			Average				Income /				Yield /
($ amounts in millions; yields not on a taxable equivalent basis)		balance				Expense			Rate			balance				Expense			Rate			balance				Expense				Rate
Assets:
Interest earning assets:
Money market, trading and investment securities		$	7,530			$	154.8		2.06	%		$	6,941			$	166.8		2.40	%		$	589				($12.0	)		(0.34	)%
Loans not covered under loss sharing agreements with the FDIC:
Commercial			8,347				404.4		4.85				8,284				399.3		4.82				63				5.1			0.03
Construction			199				13.5		6.78				319				15.1		4.73				(120	)			(1.6	)		2.05
Mortgage			6,641				340.4		5.12				6,688				343.3		5.13				(47	)			(2.9	)		(0.01	)
Consumer			3,861				386.7		10.01				3,741				379.2		10.13				120				7.5			(0.12	)
Lease financing			548				40.1		7.33				540				43.5		8.07				8				(3.4	)		(0.74	)
Total loans not covered under loss sharing agreements with the FDIC			19,596				1,185.1		6.05				19,572				1,180.4		6.03				24				4.7			0.02
Loans covered under loss sharing agreements with the FDIC			2,771				293.6		10.60				3,228				300.7		9.32				(457	)			(7.1	)		1.28
Total loans			22,367				1,478.7		6.61				22,800				1,481.1		6.50				(433	)			(2.4	)		0.11
Total interest earning assets			29,897			$	1,633.5		5.46	%			29,741			$	1,647.9		5.54	%			156				($14.4	)		(0.08	)%
Allowance for loan losses			(623	)									(610	)									(13	)
Other non-interest earning assets			4,466										5,139										(673	)
Assets from discontinued operations			1,442										1,997										(555	)
Total average assets		$	35,182									$	36,267										($1,085	)
Liabilities and Stockholders' Equity:
Interest bearing deposits:
NOW and money market		$	4,824			$	15.5		0.32	%		$	4,658			$	15.7		0.34	%		$	166				($0.2	)		(0.02	)%
Savings			6,733				14.7		0.22				6,585				15.4		0.23				148				(0.7	)		(0.01	)
Time deposits			7,556				74.9		0.99				7,957				93.8		1.18				(401	)			(18.9	)		(0.19	)
Total interest bearing deposits			19,113				105.1		0.55				19,200				124.9		0.65				(87	)			(19.8	)		(0.10	)
Borrowings [1]			3,514				130.0		3.70				4,292				178.5		4.16				(778	)			(48.5	)		(0.46	)
Total interest bearing liabilities			22,627				235.1		1.04				23,492				303.4		1.29				(865	)			(68.3	)		(0.25	)
Net interest spread									4.42	%									4.25	%										0.17	%
Non-interest bearing deposits			5,534										5,371										163
Other liabilities			879										1,019										(140	)
Liabilities from discontinued operations			1,586										2,209										(623	)
Stockholders' equity			4,556										4,176										380
Total average liabilities and stockholders' equity		$	35,182									$	36,267										($1,085	)
Adjusted net interest income / margin non-taxable equivalent basis						$	1,398.4		4.67	%						$	1,344.5		4.52	%						$	53.9			0.15	%
Impact of fees related to repos refinancing						$	39.2
Accelerated amortization of TARP discount and related deferred costs							414.1
Net interest income/margin non-taxable equivalent basis						$	945.1		3.16	%
(1) Borrowing expense including the fees related to repos refinancing and the impact of the accelerated TARP amortization was 16.60%.

Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table F - Mortgage Banking Activities and Other Service Fees
(Unaudited)
Mortgage Banking Activities														Variance
		Quarters ended												Q4 2014 vs.				Q4 2014 vs.				Years ended								Variance
(In thousands)		31-Dec-14				30-Sep-14				31-Dec-13				Q3 2014				Q4 2013				31-Dec-14				31-Dec-13				2014 vs. 2013
Mortgage servicing fees, net of fair value adjustments:
Mortgage servicing fees		$	9,364			$	11,091			$	11,366			$	(1,727	)		$	(2,002	)		$	41,761			$	45,465			$	(3,704	)
Mortgage servicing rights fair value adjustments			(6,259	)			(2,588	)			(4,541	)			(3,671	)			(1,718	)			(24,683	)			(11,403	)			(13,280	)
Total mortgage servicing fees, net of fair value adjustments			3,105				8,503				6,825				(5,398	)			(3,720	)			17,078				34,062				(16,984	)
Net gain on sale of loans, including valuation on loans held-for-sale			8,382				7,466				9,751				916				(1,369	)			31,213				26,719				4,494
Trading account (loss) profit:
Unrealized (losses) gains on outstanding derivative positions			(1	)			13				1,011				(14	)			(1,012	)			(726	)			746				(1,472	)
Realized (losses) gains on closed derivative positions			(2,739	)			(1,580	)			(3,200	)			(1,159	)			461				(16,950	)			10,130				(27,080	)
Total trading account (loss) profit			(2,740	)			(1,567	)			(2,189	)			(1,173	)			(551	)			(17,676	)			10,876				(28,552	)
Total mortgage banking activities		$	8,747			$	14,402			$	14,387			$	(5,655	)		$	(5,640	)		$	30,615			$	71,657			$	(41,042	)

Other Service Fees											Variance
		Quarters ended									Q4 2014 vs.				Q4 2014 vs.				Years ended						Variance
(In thousands)		31-Dec-14			30-Sep-14			31-Dec-13			Q3 2014				Q4 2013				31-Dec-14			31-Dec-13			2014 vs. 2013
Other service fees:
Debit card fees		$	10,929		$	10,673		$	10,785		$	256			$	144			$	43,146		$	41,912		$	1,234
Insurance fees			17,711			12,322			16,743			5,389				968				54,158			52,309			1,849
Credit card fees			17,493			17,078			17,174			415				319				67,639			65,727			1,912
Sale and administration of investment products			7,193			6,605			7,331			588				(138	)			27,711			35,272			(7,561	)
Trust fees			4,469			4,711			4,525			(242	)			(56	)			18,209			17,285			924
Other fees			3,345			3,450			3,529			(105	)			(184	)			14,402			16,846			(2,444	)
Total other service fees		$	61,140		$	54,839		$	60,087		$	6,301			$	1,053			$	225,265		$	229,351		$	(4,086	)

Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table G - Loans and Deposits
(Unaudited)
Loans - Ending Balances
											Variance
(In thousands)		31-Dec-14			30-Sep-14			31-Dec-13			Q4 2014 vs. Q3 2014				Q4 2014 vs. Q4 2013
Loans not covered under FDIC loss sharing agreements:
Commercial		$	8,134,267		$	8,058,714		$	10,037,184		$	75,553			$	(1,902,917	)
Construction			251,820			211,850			206,084			39,970				45,736
Legacy [1]			80,818			91,015			211,135			(10,197	)			(130,317	)
Lease financing			564,389			550,514			543,761			13,875				20,628
Mortgage			6,502,886			6,555,337			6,681,476			(52,451	)			(178,590	)
Consumer			3,870,271			3,891,786			3,932,226			(21,515	)			(61,955	)
Total non-covered loans held-in-portfolio		$	19,404,451		$	19,359,216		$	21,611,866		$	45,235			$	(2,207,415	)
Loans covered under FDIC loss sharing agreements			2,542,662			2,654,263			2,984,427			(111,601	)			(441,765	)
Total loans held-in-portfolio		$	21,947,113		$	22,013,479		$	24,596,293		$	(66,366	)		$	(2,649,180	)
Loans held-for-sale:
Commercial		$	309		$	33,658		$	603		$	(33,349	)		$	(294	)
Legacy [1]			319			31,823			-			(31,504	)			319
Mortgage			100,166			106,832			109,823			(6,666	)			(9,657	)
Consumer			5,310			5,695			-			(385	)			5,310
Total loans held-for-sale		$	106,104		$	178,008		$	110,426		$	(71,904	)		$	(4,322	)
Total loans		$	22,053,217		$	22,191,487		$	24,706,719		$	(138,270	)		$	(2,653,502	)
[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 segment.
Note: Loans from discontinued operations as of September 30,2014 are presented as part of “Assets from discontinued operations” in the Consolidated Statement of Financial Condition.
Deposits - Ending Balances
											Variance
(In thousands)		31-Dec-14			30-Sep-14			31-Dec-13			Q4 2014 vs. Q3 2014				Q4 2014 vs. Q4 2013
Demand deposits [1]		$	6,606,060		$	6,326,220		$	6,590,963		$	279,840			$	15,097
Savings, NOW and money market deposits (non-brokered)			10,320,782			10,251,602			11,255,309			69,180				(934,527	)
Savings, NOW and money market deposits (brokered)			406,248			386,573			553,521			19,675				(147,273	)
Time deposits (non-brokered)			5,960,401			5,636,443			6,478,103			323,958				(517,702	)
Time deposits (brokered CDs)			1,514,044			1,865,267			1,833,249			(351,223	)			(319,205	)
Total deposits		$	24,807,535		$	24,466,105		$	26,711,145		$	341,430			$	(1,903,610	)
[1] Includes interest and non-interest demand bearing deposits.
Note: Deposits from discontinued operations as of September 30, 2014 are presented as part of “Liabilities from discontinued operations” in the Consolidated Statement of Financial Condition.

Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table H - Non-Performing Assets
(Unaudited)
																							Variance
(Dollars in thousands)		31-Dec-14				As a % of loans HIP by category			30-Sep-14				As a % of loans HIP by category			31-Dec-13				As a % of loans HIP by category			Q4 2014 vs. Q3 2014				Q4 2014 vs. Q4 2013
Non-accrual loans:
Commercial		$	259,527			3.2	%		$	252,331			3.1	%		$	279,053			2.8	%		$	7,196			$	(19,526	)
Construction			13,812			5.5				19,148			9.0				23,771			11.5				(5,336	)			(9,959	)
Legacy [1]			1,545			1.9				5,648			6.2				15,050			7.1				(4,103	)			(13,505	)
Lease financing			3,102			0.5				3,168			0.6				3,495			0.6				(66	)			(393	)
Mortgage			300,466			4.6				295,125			4.5				232,681			3.5				5,341				67,785
Consumer			46,886			1.2				46,525			1.2				43,898			1.1				361				2,988
Total non-performing loans held-in-portfolio, excluding covered loans [2]			625,338			3.2	%			621,945			3.2	%			597,948			2.8	%			3,393				27,390
Non-performing loans held-for-sale [3]			18,899							19,728							1,092							(829	)			17,807
Other real estate owned (“OREO”), excluding covered OREO			135,500							135,256							135,501							244				(1	)
Total non-performing assets, excluding covered assets			779,737							776,929							734,541							2,808				45,196
Covered loans and OREO			148,099							166,533							197,388							(18,434	)			(49,289	)
Total non-performing assets		$	927,836						$	943,462						$	931,929						$	(15,626	)		$	(4,093	)
Accruing loans past due 90 days or more [4]		$	447,990						$	426,459						$	418,028						$	21,531			$	29,962
Ratios excluding covered loans:
Non-performing loans held-in-portfolio to loans held-in-portfolio			3.22	%						3.21	%						2.77	%
Allowance for loan losses to loans held-in-portfolio			2.68							2.69							2.49
Allowance for loan losses to non-performing loans, excluding loans held-for-sale			83.11							83.88							90.05
Ratios including covered loans:
Non-performing assets to total assets			2.80	%						2.77	%						2.61	%
Non-performing loans held-in-portfolio to loans held-in-portfolio			2.93							2.89							2.55
Allowance for loan losses to loans held-in-portfolio			2.74							2.78							2.60
Allowance for loan losses to non-performing loans, excluding loans held-for-sale			93.57							95.96							102.11
[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 segment.
[2] Total non-performing loans held-in-portfolio, excluding covered loans, excludes $48 thousand in discontinued operations as of September 30, 2014.
[3] Non-performing loans held-for-sale as of December 31, 2014, consisted of $14.0 million in mortgage loans, $309 thousand in commercial loans and $4.5 million in consumer loans (September 30, 2014 - consisted of $14.7 million in mortgage loans, $427 thousand in commercial loans and $4.6 million in consumer loans and $10 thousand in legacy loans; December 31, 2013 - $603 thousand in legacy loans and $489 thousand in mortgage loans).
[4] 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 non-performing since the principal repayment is insured. These balances include $125 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of December 31, 2014 (September 30, 2014 - $125 million; December 31, 2013 - $115 million).

Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table I - Activity in Non-Performing Loans
(Unaudited)
Commercial loans held-in-portfolio:
		Quarter ended												Quarter ended
		31-Dec-14												30-Sep-14
(In thousands)		BPPR				BPNA				Popular, Inc.				BPPR				BPNA				Popular, Inc.
Beginning balance NPLs		$	244,425			$	7,906			$	252,331			$	253,552			$	24,581			$	278,133
Plus:
New non-performing loans			112,071				1,245				113,316				23,410				4,541				27,951
Less:
Non-performing loans transferred to OREO			(2,072	)			-				(2,072	)			(2,706	)			-				(2,706	)
Non-performing loans charged-off			(17,492	)			(1,298	)			(18,790	)			(10,085	)			(3,103	)			(13,188	)
Loans returned to accrual status / loan collections			(79,720	)			(2,895	)			(82,615	)			(19,746	)			(2,649	)			(22,395	)
Loans transferred to held-for-sale			-				(3,025	)			(3,025	)			-				(22,967	)			(22,967	)
Non-performing loans transferred from (to) discontinued operations			-				382				382				-				7,503				7,503
Ending balance NPLs		$	257,212			$	2,315			$	259,527			$	244,425			$	7,906			$	252,331
Construction loans held-in-portfolio:
		Quarter ended												Quarter ended
		31-Dec-14												30-Sep-14
(In thousands)		BPPR				BPNA				Popular, Inc.				BPPR				BPNA				Popular, Inc.
Beginning balance NPLs		$	19,148			$	-			$	19,148			$	21,456			$	-			$	21,456
Plus:
New non-performing loans			573				-				573				-				-				-
Less:
Non-performing loans charged-off			(244	)			-				(244	)			(985	)			-				(985	)
Loans returned to accrual status / loan collections			(5,665	)			-				(5,665	)			(1,323	)			-				(1,323	)
Ending balance NPLs		$	13,812			$	-			$	13,812			$	19,148			$	-			$	19,148
Mortgage loans held-in-portfolio:
		Quarter ended												Quarter ended
		31-Dec-14												30-Sep-14
(In thousands)		BPPR				BPNA				Popular, Inc.				BPPR				BPNA				Popular, Inc.
Beginning balance NPLs		$	283,433			$	11,692			$	295,125			$	262,356			$	23,964			$	286,320
Plus:
New non-performing loans			88,983				8,159				97,142				95,207				2,802				98,009
Less:
Non-performing loans transferred to OREO			(1,051	)			-				(1,051	)			(3,062	)			(870	)			(3,932	)
Non-performing loans charged-off			(8,951	)			(96	)			(9,047	)			(11,309	)			(395	)			(11,704	)
Loans returned to accrual status / loan collections			(71,232	)			(4,309	)			(75,541	)			(53,003	)			(686	)			(53,689	)
Loans transferred to held-for-sale			-				(6,162	)			(6,162	)			-				(13,123	)			(13,123	)
Reclassification to consumer loans			-				-				-				(6,756	)			-				(6,756	)
Ending balance NPLs		$	291,182			$	9,284			$	300,466			$	283,433			$	11,692			$	295,125
Legacy loans held-in-portfolio:
		Quarter ended												Quarter ended
		31-Dec-14												30-Sep-14
(In thousands)		BPPR				BPNA				Popular, Inc.				BPPR				BPNA				Popular, Inc.
Beginning balance NPLs		$	-			$	5,648			$	5,648			$	-			$	8,323			$	8,323
Plus:
New non-performing loans			-				213				213				-				1,852				1,852
Advances on existing non-performing loans			-				97				97				-				149				149
Less:
Non-performing loans transferred to OREO			-				-				-				-				(189	)			(189	)
Non-performing loans charged-off			-				(744	)			(744	)			-				(2,109	)			(2,109	)
Loans returned to accrual status / loan collections			-				(2,791	)			(2,791	)			-				(975	)			(975	)
Loans transferred to held-for-sale			-				(878	)			(878	)			-				(2,529	)			(2,529	)
Non-performing loans transferred from (to) discontinued operations			-				-				-				-				1,126				1,126
Ending balance NPLs		$	-			$	1,545			$	1,545			$	-			$	5,648			$	5,648
Total non-performing loans held-in-portfolio (excluding consumer loans):
		Quarter ended												Quarter ended
		31-Dec-14												30-Sep-14
(In thousands)		BPPR				BPNA				Popular, Inc.				BPPR				BPNA				Popular, Inc.
Beginning balance NPLs		$	547,006			$	25,246			$	572,252			$	537,364			$	56,868			$	594,232
Plus:
New non-performing loans			201,627				9,617				211,244				118,617				9,195				127,812
Advances on existing non-performing loans			-				97				97				-				149				149
Less:
Non-performing loans transferred to OREO			(3,123	)			-				(3,123	)			(5,768	)			(1,059	)			(6,827	)
Non-performing loans charged-off			(26,687	)			(2,138	)			(28,825	)			(22,379	)			(5,607	)			(27,986	)
Loans returned to accrual status / loan collections			(156,617	)			(9,995	)			(166,612	)			(74,072	)			(4,310	)			(78,382	)
Loans transferred to held-for-sale			-				(10,065	)			(10,065	)			-				(38,619	)			(38,619	)
Non-performing loans transferred from (to) discontinued operations			-				382				382				-				8,629				8,629
Reclassification to consumer loans			-				-				-				(6,756	)			-				(6,756	)
Ending balance NPLs		$	562,206			$	13,144			$	575,350			$	547,006			$	25,246			$	572,252

Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios
(Unaudited)
		Quarter ended												Quarter ended												Quarter ended
		31-Dec-14												30-Sep-14												31-Dec-13
(Dollars in thousands)		Non-covered loans				Covered loans				Total				Non-covered loans				Covered loans				Total				Non-covered loans				Covered loans				Total
Balance at beginning of period		$	521,687			$	89,688			$	611,375			$	526,246			$	98,665			$	624,911			$	526,100			$	116,828			$	642,928
Provision for loan losses - Continuing operations			51,637				(3,646	)			47,991				68,166				12,463				80,629				49,927				8,907				58,834
Provision for loan losses - Discontinued operations			-				-				-				-				-				-				(2,198	)			-				(2,198	)
			573,324				86,042				659,366				594,412				111,128				705,540				573,829				125,735				699,564
Net loans charged-off (recovered):
BPPR
Commercial			13,890				3,230				17,120				1,011				16,590				17,601				15,177				13,433				28,610
Construction			(279	)			(1,172	)			(1,451	)			(1,237	)			4,066				2,829				(1,796	)			6,067				4,271
Lease financing			751				(6	)			745				1,410				(1	)			1,409				838				-				838
Mortgage			12,228				2,725				14,953				13,330				1,809				15,139				6,981				4,729				11,710
Consumer			25,933				(808	)			25,125				24,168				(1,024	)			23,144				14,056				(586	)			13,470
Total BPPR			52,523				3,969				56,492				38,682				21,440				60,122				35,256				23,643				58,899
BPNA
Commercial			(900	)			-				(900	)			(893	)			-				(893	)			1,089				-				1,089
Construction			(2	)			-				(2	)			(59	)			-				(59	)			-				-				-
Legacy [1]			(3,877	)			-				(3,877	)			221				-				221				(5,817	)			-				(5,817	)
Mortgage			(93	)			-				(93	)			26				-				26				660				-				660
Consumer			2,536				-				2,536				2,492				-				2,492				3,465				-				3,465
Discontinued operations			-				-				-				-				-				-				713				-				713
Total BPNA			(2,336	)			-				(2,336	)			1,787				-				1,787				110				-				110
Total loans charged-off (recovered) - Popular, Inc.			50,187				3,969				54,156				40,469				21,440				61,909				35,366				23,643				59,009
Net write-downs [3]			(3,418	)			-				(3,418	)			(32,256	)			-				(32,256	)			-				-				-
Net write-downs related to loans transferred to discontinued operations			-				-				-				-				-				-				-				-				-
Balance at end of period		$	519,719			$	82,073			$	601,792			$	521,687			$	89,688			$	611,375			$	538,463			$	102,092			$	640,555
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio			1.04	%							0.99	%			0.83	%							1.12	%			0.66	%							0.97	%
Provision for loan losses to net charge-offs [2]			0.99x								0.85x				1.39x								1.11x				1.35x								0.96x
BPPR
Annualized net charge-offs to average loans held-in-portfolio			1.33	%							1.22	%			0.98	%							1.30	%			0.90	%							1.26	%
Provision for loan losses to net charge-offs [2]			0.99x								0.86x				1.60x								1.24x				1.78x								1.22x
BPNA
Annualized net charge-offs (recoveries) to average loans held-in-portfolio											(0.27	)%											0.19	%											0.01	%
Provision for loan losses to net charge-offs											N.M.												N.M.												(135.72)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 segment.
[2] Excluding provision for loan losses and net write-down related to loans sold or reclassified to held-for-sale during the quarter ended December 31, 2014 and September 30, 2014.
[3] Net write-downs for the quarters ended December 31, 2014 and September 30, 2014 are related to loans sold or reclassified to held-for-sale.
N.M. - Not meaningful.

		Year ended												Year ended
(Dollars in thousands)		31-Dec-14												31-Dec-13
		Non-covered loans				Covered loans				Total				Non-covered loans				Covered loans			Total
Balance at beginning of period		$	538,463			$	102,092			$	640,555			$	621,701			$	108,906		$	730,607
Provision for loan losses - Continuing operations			223,999				46,135				270,134				536,710				69,396			606,106
Provision for loan losses - Discontinued operations			(6,764	)			-				(6,764	)			(3,543	)			-			(3,543	)
			755,698				148,227				903,925				1,154,868				178,302			1,333,170
Net loans charged-off (recovered):
BPPR
Commercial			39,382				32,906				72,288				85,601				27,607			113,208
Construction			(3,509	)			27,686				24,177				(8,642	)			34,108			25,466
Lease financing			3,961				(7	)			3,954				3,506				-			3,506
Mortgage			44,000				8,442				52,442				47,736				10,614			58,350
Consumer			96,655				(2,873	)			93,782				75,560				3,881			79,441
Total BPPR			180,489				66,154				246,643				203,761				76,210			279,971
BPNA
Commercial			1,105				-				1,105				9,184				-			9,184
Construction			(237	)			-				(237	)			-				-			-
Legacy [1]			(9,070	)			-				(9,070	)			(3,897	)			-			(3,897	)
Mortgage			1,196				-				1,196				7,803				-			7,803
Consumer			12,165				-				12,165				18,004				-			18,004
Discontinued operations			(5,545	)			-				(5,545	)			18,905				-			18,905
Total BPNA			(386	)			-				(386	)			49,999				-			49,999
Total loans charged-off (recovered) - Popular, Inc.			180,103				66,154				246,257				253,760				76,210			329,970
Net write-downs [3]			(35,674	)			-				(35,674	)			(362,645	)			-			(362,645	)
Net write-downs related to loans transferred to discontinued operations			(20,202	)			-				(20,202	)			-				-			-
Balance at end of period		$	519,719			$	82,073			$	601,792			$	538,463			$	102,092		$	640,555
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio			0.92	%							1.10	%			1.19	%						1.34	%
Provision for loan losses to net charge-offs [2]			1.17x								1.04x				0.85x							0.86x
BPPR
Annualized net charge-offs to average loans held-in-portfolio			1.14	%							1.33	%			1.30	%						1.49	%
Provision for loan losses to net charge-offs [2]			1.38x								1.20x				1.13x							1.07x
BPNA
Annualized net charge-offs to average loans held-in-portfolio											(0.01	)%										0.87	%
Provision (reversal) for loan losses to net charge-offs											102.57x											(0.29)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 segment.
[2] Excluding provision for loan losses and net write-down related to loans sold or reclassified to held-for-sale during the quarter ended December 31, 2014 and December 31, 2013.
[3] Net write-downs for the year ended December 31, 2014 and 2013 are related to loans sold or reclassified to held-for-sale.

Popular, Inc.
Financial Supplement to Fourth Quarter 2014 Earnings Release
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED
(Unaudited)
31-Dec-14
(Dollars in thousands)			Commercial				Construction				Legacy [3]				Mortgage				Lease financing				Consumer				Total [2]
Specific ALLL			$	64,736			$	363			$	-			$	46,111			$	770			$	28,161			$	140,141
Impaired loans	[1]		$	357,161			$	13,268			$	-			$	435,824			$	3,023			$	117,732			$	927,008
Specific ALLL to impaired loans	[1]			18.13	%			2.74	%			-	%			10.58	%			25.47	%			23.92	%			15.12	%
General ALLL			$	146,501			$	6,307			$	2,944			$	77,211			$	6,361			$	140,254			$	379,578
Loans held-in-portfolio, excluding impaired loans	[1]		$	7,777,106			$	238,552			$	80,818			$	6,067,062			$	561,366			$	3,752,539			$	18,477,443
General ALLL to loans held-in-portfolio, excluding impaired loans	[1]			1.88	%			2.64	%			3.64	%			1.27	%			1.13	%			3.74	%			2.05	%
Total ALLL			$	211,237			$	6,670			$	2,944			$	123,322			$	7,131			$	168,415			$	519,719
Total non-covered loans held-in-portfolio	[1]		$	8,134,267			$	251,820			$	80,818			$	6,502,886			$	564,389			$	3,870,271			$	19,404,451
ALLL to loans held-in-portfolio	[1]			2.60	%			2.65	%			3.64	%			1.90	%			1.26	%			4.35	%			2.68	%
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction.
[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of December 31, 2014 the general allowance on the covered loans amounted to $82.1 million, while the specific reserve amounted to $5 thousand.
[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.
30-Sep-14
(Dollars in thousands)			Commercial				Construction				Legacy [3]				Mortgage				Lease financing				Consumer				Total [2]
Specific ALLL			$	64,750			$	133			$	-			$	38,207			$	698			$	28,166			$	131,954
Impaired loans	[1]		$	373,501			$	18,894			$	2,311			$	431,720			$	2,709			$	116,830			$	945,965
Specific ALLL to impaired loans	[1]			17.34	%			0.70	%			-	%			8.85	%			25.77	%			24.11	%			13.95	%
General ALLL			$	151,681			$	6,375			$	4,001			$	83,314			$	6,673			$	137,689			$	389,733
Loans held-in-portfolio, excluding impaired loans	[1]		$	7,685,213			$	192,956			$	88,704			$	6,123,617			$	547,805			$	3,774,956			$	18,413,251
General ALLL to loans held-in-portfolio, excluding impaired loans	[1]			1.97	%			3.30	%			4.51	%			1.36	%			1.22	%			3.65	%			2.12	%
Total ALLL			$	216,431			$	6,508			$	4,001			$	121,521			$	7,371			$	165,855			$	521,687
Total non-covered loans held-in-portfolio	[1]		$	8,058,714			$	211,850			$	91,015			$	6,555,337			$	550,514			$	3,891,786			$	19,359,216
ALLL to loans held-in-portfolio	[1]			2.69	%			3.07	%			4.40	%			1.85	%			1.34	%			4.26	%			2.69	%
[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, 2014 the general allowance on the covered loans amounted to $89.7 million, while the specific reserve amounted to $4 thousand.
[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
(Dollars in thousands)		Commercial				Construction				Legacy				Mortgage				Lease financing				Consumer				Total
Specific ALLL		$	(14	)		$	230			$	-			$	7,904			$	72			$	(5	)		$	8,187
Impaired loans		$	(16,340	)		$	(5,626	)		$	(2,311	)		$	4,104			$	314			$	902			$	(18,957	)
General ALLL		$	(5,180	)		$	(68	)		$	(1,057	)		$	(6,103	)		$	(312	)		$	2,565			$	(10,155	)
Loans held-in-portfolio, excluding impaired loans		$	91,893			$	45,596			$	(7,886	)		$	(56,555	)		$	13,561			$	(22,417	)		$	64,192
Total ALLL		$	(5,194	)		$	162			$	(1,057	)		$	1,801			$	(240	)		$	2,560			$