Popular (BPOP) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Popular, Inc. Reports Net Income of $65.7 million for the Quarter ended June 30, 2012

• Net interest margin of 4.33% for Q2 2012 vs. 4.27% for Q1 2012
• Improvement in credit quality (excluding covered loans) continues:
  • Net charge-offs fell to $98.0 million for Q2 2012 vs. $108.1 million for Q1 2012; declining for the third consecutive quarter and at the lowest level since Q1 2008
  • Non-performing loans held-in-portfolio declined by $120 million, down 7% from Q1 2012 and 33% from Q3 2010 peak; lowest level since Q1 2009
  • Inflows of commercial, construction, and legacy non-performing loans held-in-portfolio declined by $31 million, or 22%, from Q1 2012; down for the third consecutive quarter
• Unfavorable adjustments in the quarterly valuation of loans held-for-sale of $27.3 million in Q2 2012
• FDIC loss share income of $2.6 million in Q2 2012 vs. expense of $15.3 million in Q1 2012; mostly due to 80% mirror accounting on $19.2 million of higher provision for loan losses on covered loans for Q2 2012 vs. Q1 2012 and to the covered reimbursable expenses related mostly to construction loans
• Expense of $25.0 million recognized in Q2 2012 as a result of the early cancellation of certain short-term borrowings
• Tax benefit of $72.9 million was recognized related to the tax treatment of the loans acquired in the Westernbank FDIC-assisted transaction

SAN JUAN, Puerto Rico--(BUSINESS WIRE)--July 18, 2012--Popular, Inc. (“the Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $65.7 million for the quarter ended June 30, 2012, compared with net income of $48.4 million for the quarter ended March 31, 2012.

Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: “Two consistently positive trends stand out in this quarter’s results. First, our net interest margin and our revenue-generating capacity remain strong. Second, credit metrics keep improving. The decrease of $120 million in non-performing loans marks our largest quarterly decline in this credit cycle. Despite various headwinds we are continuing our progress.”

Refer to the accompanying “Financial Supplement to Second Quarter 2012 Earnings Release” for detailed financial information and key performance ratios. Table B provides a breakdown of main categories in the income statement.

Earnings Highlights – Second Quarter 2012 compared with First Quarter 2012

	Quarter ended
(Dollars in thousands except per share information)	June 30, 2012		March 31, 2012		$ Variance
Net interest income	$341,200		$337,582		$	3,618
Provision for loan losses – non-covered loans	81,743		82,514			(771	)
Provision for loan losses – covered loans [1]	37,456		18,209			19,247
Net interest income after provision for loan losses	222,001		236,859			(14,858	)
FDIC loss share income (expense)	2,575		(15,255	)		17,830
Other non-interest income	91,149		139,163			(48,014	)
Operating expenses	327,879		296,167			31,712
(Loss) income before income tax	(12,154	)	64,600			(76,754	)
Income tax (benefit) expense	(77,893	)	16,192			(94,085	)
Net income	$65,739		$48,408		$	17,331
Net income applicable to common stock	$64,809		$47,477		$	17,332
Net income per common share - basic and diluted [2]	$0.63		$ 0.46		$	0.17
[1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. [2] Per share data has been adjusted to retroactively reflect the 1-for-10 reverse stock split effected on May 29, 2012.

Main events for the quarter ended June 30, 2012

• The results for the second quarter of 2012 reflect a tax benefit of $72.9 million related to the tax treatment of the loans acquired in the Westernbank FDIC-assisted transaction (the “Acquired Loans”). In June 2012, the Puerto Rico Department of the Treasury (the “P.R. Treasury”) and the Corporation entered into a Closing Agreement (the “Closing Agreement”) to clarify that those Acquired Loans are a capital asset and any gain resulting from such loans will be taxed at the capital gain tax rate of 15% instead of the ordinary income tax rate of 30%, thus reducing the deferred tax liability on the estimated gain and recognizing an income tax benefit for accounting purposes during the quarter. As part of the Closing Agreement, the Corporation prepaid to the P.R. Treasury the estimated tax of $72.9 million related to these estimated capital gains. The effective tax rate for the Corporation’s Puerto Rico banking operations for 2012 is estimated at 20%.
• During the second quarter of 2012, negative valuation adjustments on commercial and construction loans held-for-sale of approximately $34.7 million were recognized by Banco Popular de Puerto Rico (“BPPR”). The quarterly valuation analyses of the outstanding loans held-for-sale, which considered the impact of recent appraisals and market indicators, resulted in an unfavorable adjustment of $27.3 million for the current quarter. Also, there were $7.4 million in additional unfavorable valuation adjustments, mostly from the reclassification of certain loans from loans held-for-sale to other real estate. As of June 30, 2012, commercial and construction loans held-for-sale in the BPPR reportable segment amounted to $177 million.

• During the quarter ended June 30, 2012, the Corporation recognized a loss on the early extinguishment of debt of $25.0 million related to the early termination of $350 million in outstanding repurchase agreements (“repos”) with contractual maturities between March 2014 and May 2014, with an average cost of 4.36%. The Corporation anticipates replacing these repos with short-term borrowings at current market rates.
• In early May 2012, the Corporation received a $131 million cash dividend from its investment in EVERTEC’s parent company. As a result of the dividend, the Corporation’s equity investment balance in the entity was reduced by the amount of the dividend and stands at $62 million as of quarter-end. The Corporation’s participation interest in the entity was 48.5% as of quarter-end.
• During the quarter ended June 30, 2012, approximately $273 million in performing mortgage loans were acquired by Banco Popular North America (“BPNA”) and $225 million in performing consumer loans by BPPR.
• The Company announced that it now expects to earn between $210 million and $225 million for 2012. This is a higher nominal range than the $185 million to $200 million range previously disclosed. However, after excluding the three unusual events of the quarter (i.e., the tax benefit, the expense on the early extinguishment of high-cost repos and the negative valuation adjustments on loans held for sale) the range is $10 million less than previously disclosed.

Net interest income

• The net interest margin was 4.33% for the second quarter of 2012, compared with 4.27% for the first quarter of 2012. The increase in net interest income of $3.6 million for the second quarter of 2012, compared with the first quarter of 2012, was principally due to a higher yield on the covered loan portfolio and a lower average balance and cost of interest-bearing deposits, partially offset by a lower yield on investment securities and a reduction in the yield of non-covered loans. Refer to Table D for detailed information on average financial condition balances and an analysis of yield / rates by main categories.
• The increase in interest income on loans was mostly due to an increase in the interest derived from covered loans by $4.3 million, or 69 basis points. This increase was primarily attributable to a commercial single loan pool accounted for under ASC 310-30 that was paid off in the second quarter of 2012 and its remaining discount was accreted into interest income.
• Additionally, there was an increase of $2.3 million in interest income in the non-covered mortgage loan portfolio, which was mainly associated with higher volumes driven by loan purchases by BPNA during the second quarter of 2012.
• The decrease in interest income on non-covered construction loans of $3.1 million was principally related to the Corporation’s U.S. mainland operations’ full recovery of certain large loan relationships during the first quarter of 2012 that had been in non-accrual.
• The decrease in interest income on consumer loans of $1.5 million was mainly related to the credit cards portfolio due to a combination of lower average balances and lower blended rates.
• The Corporation’s interest expense on deposits decreased by $3.2 million, or 5 basis points, reflecting the continuing progress in repricing the Corporation’s deposit base and a decrease in the average balance of deposits, mainly in retail certificates of deposit and brokered certificates of deposit.
• Additionally, the interest expense on short-term borrowings, including repos, declined $0.5 million, as the Corporation used available liquid funds to repay short-term debt.
• The BPPR reportable segment recorded $298.5 million in net interest income for the quarter ended June 30, 2012, compared with $290.1 million for the quarter ended March 31, 2012. The net interest margin was 5.07% for the second quarter of 2012, compared with 4.90% for the first quarter of the current year. The increase in net interest income was principally due to higher interest income from the covered loan portfolio by $4.3 million as previously explained, coupled with the reduction in the interest expense on deposits due to lower volumes and a reduction in the average cost from 0.87% for the first quarter of 2012 to 0.81% for the second quarter of 2012.
• The BPNA reportable segment recorded $69.6 million in net interest income for the quarter ended June 30, 2012, compared with $74.1 million for the quarter ended March 31, 2012. The net interest margin was 3.55% for the second quarter of 2012, compared with 3.78% for the first quarter of the current year. The decrease in net interest income was principally related to the commercial and construction loan portfolios’ lower volumes and to the previously mentioned interest recovery related to certain large loan relationships collected during the first quarter, partially offset by higher mortgage loan volume related to purchases during the second quarter of 2012.

Provision for loan losses

• The provision for loan losses for the quarter ended June 30, 2012 amounted to $119.2 million, an increase of $18.5 million when compared with the first quarter of 2012, mainly related to the covered loan portfolio. The ratio of total allowance for loan losses to loans held-in-portfolio stood at 3.10% as of June 30, 2012, compared with 3.25% as of March 31, 2012.
• The provision for loan losses for the non-covered loan portfolio amounted to $81.7 million, relatively unchanged from the first quarter of 2012. The current quarter provision for loan losses reflected lower net charge-offs and reductions in the allowance for loan losses, mainly from the commercial, legacy and consumer loan portfolios as a result of continued improvement in credit trends. These improvements were in part offset by higher loss trends in the residential mortgage loan portfolio in the BPPR reportable segment coupled with a lower reserve release, compared to the first quarter of 2012, as the first quarter included a net benefit of $24.8 million from the enhancements to the Corporation’s allowance for loan losses methodology. The increase in the residential mortgage loan loss trends was principally related to the implementation of a revised charge-off policy during the first quarter of 2012.
• The provision for loan losses on the covered loan portfolio, which increased by $19.2 million, was primarily driven by loans accounted for pursuant to ASC 310-30. The provision for loan losses for loans accounted under ASC 310-30 amounted to $28.2 million for the quarter ended June 30, 2012, compared with $11.4 million for the first quarter of 2012. The increase of $16.8 million in the provision for loan losses on these loans was prompted by credit losses in excess of those originally estimated at the acquisition date, related to certain commercial and construction loan pools. The provision for loan losses related to loans accounted under ASC 310-20 amounted to $9.2 million for the quarter ended June 30, 2012, compared with $6.8 million for the first quarter of 2012. Net charge-offs on these covered loans accounted for under ASC 310-20 amounted to $29.6 million, an increase of $25.3 million from the first quarter of 2012. This increase in net charge-offs was mainly related to the receipt of discounted pay-offs from two particular relationships, for which impaired amounts were reserved in prior periods.

Non-interest income

Non-interest income for the quarter ended June 30, 2012 decreased by $30.2 million compared with the quarter ended March 31, 2012. The principal unfavorable variances were in the following categories of the income statement included in Exhibit B:

• Net loss on sale of loans, including unfavorable valuation adjustments on loans held-for-sale, totaled $15.4 million for the second quarter of 2012, compared with a net gain of $15.5 million for the first quarter of 2012. The negative variance of $30.9 million, compared with the first quarter, was principally due to valuation adjustments on loans held-for-sale from the quarterly valuation analysis of $27.3 million.
• Higher trading account losses by $5.1 million primarily due to higher realized losses on derivatives in the mortgage banking business, that are economically offset by higher gains on securitization transactions, but which benefits are recorded in the net gain (loss) on sale of loans category.
• Other service fees decreased by $4.0 million, mostly due to a quarter-over-quarter unfavorable variance in mortgage servicing fees of $6.6 million, primarily from higher unfavorable valuation adjustments, partially offset by an increase in credit card fees of $1.7 million mainly as a result of higher interchange fees from increased customer purchasing activity. Refer to Table F in the Financial Supplement for a breakdown of other service fees.
• The category of other operating income in Table B shows a decrease of $5.7 million mostly due to lower income from investments accounted for under the equity method principally driven by a quarter-over-quarter negative variance of $7.7 million from the equity pick-up from PRLP 2011 Holdings, LLC, which holds the commercial and construction loans sold by BPPR during 2011, of which BPPR retained a 24.9% equity participation. Partially offsetting this unfavorable variance was a gain of $2.5 million from the sale of the wholesale indirect general agency property and casualty business of Popular Insurance during the second quarter of 2012.
• The above unfavorable variances in non-interest income were partially offset by FDIC loss share income of $2.6 million recognized in the second quarter of 2012, compared with FDIC loss share expense of $15.3 million for the first quarter of 2012. This variance was principally associated with the increase of $19.2 million in the provision for loan losses on covered loans and with the recognition of $10.7 million mirror offset of reimbursable loan-related expenses from the FDIC under the loss sharing agreements, partially offset by higher amortization of the loss share asset mainly due to a reduction in expected losses and as a result of the pay-off of a single loan pool during the quarter. Refer to Table O for financial information on the covered loans and the composition of the FDIC loss share income (expense).

Operating expenses

Operating expenses increased by $31.7 million for the second quarter of 2012 compared with the first quarter of 2012. Refer to Table B which provides a breakdown of operating expenses by main categories. The principal favorable variances were as follows:

• Higher loss on early extinguishment of debt by $25.0 million primarily related to the previously mentioned cancellation of certain high-cost repos by BPPR.
• Higher business promotion expenses by $4.1 million mostly from credit card reward programs and other retail product promotional campaigns in Puerto Rico and from BPNA’s New York Region’s rebranding efforts concentrated in the second quarter.
• Higher professional fees by $4.0 million, mainly from appraisal services, credit collection efforts through attorneys and consulting fees, including services related to strategic projects to achieve efficiencies, such as the redesigning of credit lending and administration processes.
• The category of other operating expenses in Table B shows an increase of $18.8 million, which was mainly driven by the following factors: lower credits to the provision for unfunded credit commitments by $4.4 million in the second quarter of 2012, compared with the first quarter of 2012, mainly due to decreases in the funding rate and a lower magnitude of improvements in the potential loss expectations than in the previous quarter; and to costs associated with the collection efforts of the covered loan portfolio. Under the loss share agreements, 80% of certain expenses are reimbursable by the FDIC and although the related expenses are reflected in this category, the 80% offset to these expenses is recorded in the income statement category of FDIC loss share income (expense) in non-interest income, as previously indicated.

These unfavorable variances were partially offset by a decrease in the category of other real estate owned costs by $11.8 million and in personnel costs by $5.2 million.

• The variance in the category of other real estate owned costs, which considers gains (losses) on sale of properties and fair value write-downs from valuation assessments, was principally due to higher gains on the sale of commercial and construction real estate properties by $10.6 million, including sales by BPPR and BPNA.
• Personnel costs decreased by $5.2 million, as shown in Table B, principally due to a decrease in the category of salaries by $1.0 million; pension, postretirement and medical insurance costs by $2.3 million; and in other personnel costs by $3.5 million. These favorable variances were partially offset by an increase in commissions, incentives and other bonuses of $1.6 million, mostly from an increase in fees from the sale and administration of investment products from the retail business at Popular Securities.

The decrease in the salaries category was mainly related to a reduction in base salaries for full-time equivalent employees (FTEs). Pension, postretirement and medical insurance costs were lower in the current quarter mainly due to a reduction in medical and life insurance costs. The decrease in other personnel costs was principally due to the recognition in the first quarter of 2012 of severance accruals related to a voluntary employee exit program as part of the Corporation’s efficiency efforts and to lower payroll taxes.

FTEs were 8,093 as of June 30, 2012, compared with 8,329 as of December 31, 2011 and 8,074 as of March 31, 2012.

Income taxes

Income tax benefit amounted to $77.9 million for the quarter ended June 30, 2012, compared with an income tax expense of $16.2 million for the first quarter of 2012. The positive variance in income tax was principally related to the previously mentioned tax benefit of $72.9 million from the Closing Agreement with the P.R. Treasury and to lower taxable income in the Corporation’s Puerto Rico operations for the second quarter of 2012.

Credit Quality

Most credit quality metrics continued to demonstrate positive trends driven by actions taken by the Corporation to address problem loans and mitigate the overall credit risk.

• Net charge-offs, excluding covered loans, for the quarter ended June 30, 2012 decreased by $10.1 million, when compared with the quarter ended March 31, 2012. Annualized net charge-offs to average non-covered loans held-in-portfolio decreased 20 basis points, from 2.13% for the quarter ended March 31, 2012 to 1.93% for the quarter ended June 30, 2012. The reduction was principally due to lower net charge-offs from the commercial loan portfolio in the BPPR and BPNA reportable segments by $14.7 million. Refer to Table J for further information on the Corporation’s net charge-offs and related ratios.
• Non-performing loans held-in-portfolio, excluding covered loans, decreased by $120 million from March 31, 2012 to June 30, 2012. The decrease was mostly attributed to reductions from the commercial, legacy and mortgage loan portfolios. As of June 30, 2012, non-performing commercial loans held-in-portfolio in the BPPR and BPNA reportable segments decreased by $30 million and $22 million, respectively, when compared with March 31, 2012. Non-performing legacy loans decreased by $24 million when compared with the prior quarter. Non-performing mortgage loans held-in-portfolio as of June 30, 2012 amounted to $633 million, a decrease of $34 million compared with March 31, 2012. The decrease was driven by non-performing loans from the residential mortgage loan portfolio of the BPPR reportable segment, prompted by higher levels of troubled debt restructured (“TDRs”) loans returning to accrual status, and a slowdown in the inflows of non-performing loans. Refer to Table I for the activity in non-performing loans, excluding covered loans and loans held-for-sale.

• The allowance for loan losses to loans held-in-portfolio ratio, excluding covered loans, stood at 3.14% as of June 30, 2012 compared with 3.25% as of March 31, 2012. The general and specific reserves related to non-covered loans amounted to $561 million and $88 million, respectively, as of June 30, 2012, compared with $589 million and $76 million, respectively, as of March 31, 2012. The decrease in the general reserve component was mainly driven by lower loss trends in the commercial, legacy and consumer loan portfolios, primarily reflecting the improvements in the credit environment. Nonetheless, the residential mortgage loan portfolio of the BPPR reportable segment required higher allowance levels mainly due to higher specific reserves for loans restructured under the Corporation’s loss mitigation program. Refer to Tables H through M for detailed credit quality information, including the activity in the allowance for loan losses.

Refer to the section below for explanations on the main variances.

BPPR Reportable Segment

• The provision for loan losses for non-covered loans of the BPPR reportable segment totaled $66.4 million, or 98.55% of net charge-offs, for the second quarter of 2012, relatively unchanged when compared with $67.8 million for the first quarter of 2012. The provision for loan losses for the quarter ended June 30, 2012 reflected lower net-charge offs and reductions in the allowance for loans losses for the commercial and consumer loan portfolios, when compared with the first quarter of 2012. These favorable variances were in part offset by higher loss trends for the residential mortgage portfolio and a lower reserve release, compared to the first quarter of 2012, as the first quarter included a net benefit of $7.1 million from the enhancements to the Corporation’s allowance for loan losses methodology.
• Net charge-offs related to non-covered loans amounted to $67.4 million, or 1.85% of annualized net charge-offs to average non-covered loans held-in-portfolio for the quarter ended June 30, 2012, compared to $73.7 million or 2.01%, respectively, for the quarter ended March 31, 2012. This decrease was principally driven by lower net charge-offs from the commercial loan portfolio of $9.0 million attributed to lower levels of problem loans. This favorable variance in net charge-offs was partly offset by an increase of $2.6 million from the residential mortgage loan portfolio, primarily due to the revised charge-off policy implemented during the first quarter of 2012.
• Non-performing loans held-in-portfolio of the BPPR reportable segment, excluding covered loans, decreased by $68 million as of June 30, 2012, when compared with March 31, 2012. The decrease in non-performing loans at the BPPR reportable segment was mainly driven by a reduction in the commercial and mortgage loan portfolios by $30 million and $33 million, respectively. The reduction in the commercial non-performing loans was mainly associated with problem loan resolutions and a decline in the inflows to non-performing status. The decrease in the non-performing residential mortgage loans was mainly due to higher levels of TDRs returning to accrual status, after complying with six months of satisfactory payment.
• At June 30, 2012, the allowance for loan losses for non-covered loans of the BPPR reportable segment totaled $447 million or 2.99% of non-covered loans held–in-portfolio, essentially at the same level as the first quarter of 2012. The allowance for loan losses reflected a decrease in the general reserve component, mainly due to lower loss trends in the commercial and consumer loan portfolios. This improvement was offset by higher reserve requirements for the residential mortgage loan portfolio due to a higher net charge-off trend, coupled with higher specific reserves for loans restructured under loss mitigation programs. Refer to Table L for information on the allowance for loan losses of the Corporation’s Puerto Rico operations.

BPNA Reportable Segment

• The provision for loan losses for the BPNA reportable segment amounted to $15.3 million, or 50.08% of net charge-offs, for the second quarter of 2012, compared with $14.7 million or 42.74% of net charge-offs for the first quarter of 2012. The provision for loan losses remained relatively flat, as the effect of lower net charge offs for the second quarter of 2012 was offset by a lower reserve release, compared with the first quarter of 2012, as the first quarter included the positive impact of $17.7 million of the enhancements to the Corporation’s allowance for loan losses methodology.
• Net charge-offs for the quarter ended June 30, 2012 decreased by $3.9 million, when compared with the quarter ended March 31, 2012. Annualized net charge-offs to average loans held-in-portfolio decreased 28 basis points, from 2.43% for the quarter ended March 31, 2012 to 2.15% for the quarter ended June 30, 2012. As previously mentioned, the decrease in net charge-offs was mainly observed in the commercial loan portfolio, prompted by higher recoveries during the quarter and by the continued credit stabilization at the BPNA reportable segment.
• Non-performing loans held-in-portfolio at the BPNA reportable segment amounted to $287 million as of June 30, 2012, a decrease of $52 million compared with March 31, 2012. The decrease was mainly driven by reductions in the commercial and legacy loan portfolios of $22 million and $24 million, respectively. This decrease in non-performing loans was the result of problem loan resolutions, loan sales, a reduction in the inflows of non-performing loans, and charge-offs.
• At June 30, 2012, the allowance for loan losses for the BPNA reportable segment totaled $202 million or 3.51% of loans held-in-portfolio, compared with $217 million or 3.87% of loans held- in-portfolio at March 31, 2012. The decline in the allowance for loan losses was primarily driven by a reduction of $15 million in the general reserve component, when compared to March 31, 2012 mainly due to lower loss trends, as the U.S. mainland continues to reflect improved credit performance. Refer to Table M for information on the allowance for loan losses of the BPNA reportable segment.

Financial Condition Highlights – June 30, 2012 compared to March 31, 2012

• Total assets amounted to $36.6 billion as of June 30, 2012, compared with $37.0 billion as of March 31, 2012. Refer to Table C for a detailed presentation of the Corporation’s Consolidated Statements of Condition.

• Total loans held-in-portfolio amounted to $24.7 billion as of June 30, 2012 and March 31, 2012. Refer to Table G for a breakdown by loan categories. The decrease of $265 million in non-covered commercial loans held-in-portfolio from March 31, 2012 to June 30, 2012 was mostly associated with the cancellation and repayment of certain commercial lines of credit in Puerto Rico and charge-offs during the current quarter. The decrease in the commercial loan portfolio was offset in part by an increase in mortgage loans held-in-portfolio principally due to (i) mortgage loan purchases at BPNA during the second quarter of 2012 of approximately $273 million (unpaid principal balance), and (ii) loans purchased and originated at the Corporation’s Puerto Rico operations. The increase in consumer loans held-in-portfolio of $231 million from March 31, 2012 to June 30, 2012 was mainly due to a purchase of consumer loans by BPPR for approximately $225 million (unpaid principal balance). The decline in total covered loans of $205 million was principally due to collections and to charge-offs in the second quarter of 2012 of $58.5 million.
• Deposits amounted to $27.4 billion as of June 30, 2012, compared with $27.2 billion as of March 31, 2012. Table G presents a breakdown of deposits by major categories. The increase in demand deposits from March 31, 2012 to June 30, 2012 of $366 million was principally related to public funds. The decrease in non-brokered time deposits of $237 million was primarily from retail certificates of deposit. Total brokered deposits amounted to $3.1 billion as of June 30, 2012, compared with $2.9 billion as of March 31, 2012.
• The Corporation’s borrowings amounted to $3.6 billion as of June 30, 2012, compared with $4.7 billion as of March 31, 2012. The decrease in borrowings was principally in repos by approximately $0.7 billion mostly associated with the previously mentioned early extinguishment of debt and use of available funds to repay short-term debt.
• Stockholders’ equity was $4.0 billion as of June 30, 2012 and March 31, 2012. Refer to Table A for capital ratios and Table N for Non-GAAP reconciliations.

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, 2011, 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 providing a broad range of financial services and products with branches in New York, New Jersey, Illinois, Florida and California.

An electronic version of this press release can be found at the Corporation’s website, www.popular.com.

Popular will hold a conference call to discuss the financial results on Wednesday, July 18, 2012 at 10:30 a.m. Eastern time. The call will be broadcast live over the Internet and can be accessed through the investor relations section of the Corporation’s website: www.popular.com.

Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through a dial-in telephone number 866-804-6926 or 857-350-1672. The conference code is 45836565.

A replay of the webcast will be archived in Popular’s website during the respective period. A telephone replay will be available from 5 p.m. on Wednesday, July 18, 2012 at 888-286-8010 or 617-801-6888. The replay passcode is 95455273.

Popular, Inc.

Financial Supplement to Second Quarter 2012 Earnings Release

Table A - Selected Ratios and Other Information

Table B - Consolidated Statement of Operations

Table C - Consolidated Statement of Financial Condition

Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER

Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE

Table F - Other Service Fees

Table G - Loans and Deposits

Table H - Non-Performing Assets

Table I - Activity in Non-Performing Loans

Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios

Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED

Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - BANCO POPULAR DE PUERTO RICO

Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - BANCO POPULAR NORTH AMERICA

Table N - Reconciliation to GAAP Financial Measures

Table O - Financial Information - Westernbank Covered Loans

POPULAR, INC.
Financial Supplement to Second Quarter 2012 Earnings Release
Table A - Selected Ratios and Other Information
(Unaudited)
	Quarter ended			Quarter ended			Quarter ended			Six months ended			Six months ended
	June 30,			March 31,			June 30,			June 30,			June 30,
		2012			2012			2011			2012			2011
Net income per common share:
Basic and diluted [1]	$	0.63		$	0.46		$	1.07		$	1.10		$	1.16
Average common shares outstanding [1]		102,295,113			102,341,805			102,122,591			102,318,459			102,138,020
Average common shares outstanding - assuming dilution [1]		102,410,618			102,494,500			102,189,614			102,479,530			102,254,320
Common shares outstanding at end of period [1]		102,824,323			102,711,707			102,397,790			102,824,323			102,397,790
Market value per common share [1]	$	16.61		$	20.50		$	27.60		$	16.61		$	27.60
Market Capitalization --- (In millions)	$	1,708		$	2,106		$	2,826		$	1,708		$	2,826
Return on average assets		0.73	%		0.53	%		1.14	%		0.63	%		0.63	%
Return on average common equity		6.94	%		5.16	%		12.02	%		6.05	%		6.66	%
Net interest margin [2]		4.33	%		4.27	%		4.48	%		4.30	%		4.32	%
Common equity per share [1]	$	38.62		$	38.14		$	38.22		$	38.62		$	38.22
Tangible common book value per common share (non-GAAP) [1]	$	31.74		$	31.23		$	31.37		$	31.74		$	31.37
Tangible common equity to tangible assets (non-GAAP)		9.09	%		8.83	%		8.36	%		9.09	%		8.36	%
Tier 1 risk-based capital [3]		16.31	%		16.51	%		15.21	%		16.31	%		15.21	%
Total risk-based capital [3]		17.59	%		17.79	%		16.49	%		17.59	%		16.49	%
Tier 1 leverage [3]		11.09	%		11.10	%		10.16	%		11.09	%		10.16	%
Tier 1 common equity to risk-weighted assets (non-GAAP) [3]		12.29	%		12.53	%		11.52	%		12.29	%		11.52	%
[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 estimates.

POPULAR, INC.
Financial Supplement to Second Quarter 2012 Earnings Release
Table B - Consolidated Statement of Operations
(Unaudited)
			Quarter ended			Quarter ended			Variance			Quarter ended			Variance			Six months ended			Six months ended
(In thousands, except per share information)			June 30,			March 31,			Q2 2012 vs.			June 30,			Q2 2012 vs.			June 30,			June 30,
			2012			2012			Q1 2012			2011			Q2 2011			2012			2011
Interest income:
	Loans		$	389,342		$	387,942		$	1,400		$	442,460		$	(53,118	)	$	777,284		$	865,835
	Money market investments			964			948			16			926			38			1,912			1,873
	Investment securities			43,813			45,070			(1,257	)		53,723			(9,910	)		88,883			106,098
	Trading account securities			5,963			5,891			72			9,790			(3,827	)		11,854			18,544
		Total interest income		440,082			439,851			231			506,899			(66,817	)		879,933			992,350
Interest expense:
	Deposits			48,514			51,679			(3,165	)		70,672			(22,158	)		100,193			147,551
	Short-term borrowings			13,044			13,583			(539	)		13,719			(675	)		26,627			27,734
	Long-term debt			37,324			37,007			317			47,966			(10,642	)		74,331			99,164
		Total interest expense		98,882			102,269			(3,387	)		132,357			(33,475	)		201,151			274,449
Net interest income				341,200			337,582			3,618			374,542			(33,342	)		678,782			717,901
Provision for loan losses - non-covered loans				81,743			82,514			(771	)		95,712			(13,969	)		164,257			155,474
Provision for loan losses - covered loans				37,456			18,209			19,247			48,605			(11,149	)		55,665			64,162
Net interest income after provision for loan losses				222,001			236,859			(14,858	)		230,225			(8,224	)		458,860			498,265
Service charges on deposit accounts				46,130			46,589			(459	)		46,802			(672	)		92,719			92,432
Other service fees				62,027			66,039			(4,012	)		58,307			3,720			128,066			116,959
Net loss on sale and valuation adjustments of investment securities				(349	)		-			(349	)		(90	)		(259	)		(349	)		(90	)
Trading account (loss) profit				(7,283	)		(2,143	)		(5,140	)		874			(8,157	)		(9,426	)		375
Net (loss) gain on sale of loans, including valuation adjustments on loans held-for-sale
				(15,397	)		15,471			(30,868	)		(12,782	)		(2,615	)		74			(5,538	)
Adjustments (expense) to indemnity reserves on loans sold				(5,398	)		(3,875	)		(1,523	)		(9,454	)		4,056			(9,273	)		(19,302	)
FDIC loss share income (expense)				2,575			(15,255	)		17,830			38,670			(36,095	)		(12,680	)		54,705
Fair value change in equity appreciation instrument				-			-			-			578			(578	)		-			8,323
Other operating income				11,419			17,082			(5,663	)		1,255			10,164			28,501			40,664
		Total non-interest income		93,724			123,908			(30,184	)		124,160			(30,436	)		217,632			288,528
Operating expenses:
Personnel costs
	Salaries			75,881			76,899			(1,018	)		76,698			(817	)		152,780			150,489
	Commissions, incentives and other bonuses			14,359			12,726			1,633			11,995			2,364			27,085			21,918
	Pension, postretirement and medical insurance			16,114			18,425			(2,311	)		12,810			3,304			34,539			24,795
	Other personnel costs, including payroll taxes			9,982			13,441			(3,459	)		9,456			526			23,423			19,897
		Total personnel costs		116,336			121,491			(5,155	)		110,959			5,377			237,827			217,099
Net occupancy expenses				24,963			24,162			801			25,957			(994	)		49,125			50,543
Equipment				10,900			11,341			(441	)		10,761			139			22,241			22,797
Other taxes				12,074			13,438			(1,364	)		14,623			(2,549	)		25,512			26,595
Professional fees				52,127			48,105			4,022			49,479			2,648			100,232			96,167
Communications				6,645			7,131			(486	)		7,188			(543	)		13,776			14,398
Business promotion				16,980			12,850			4,130			11,332			5,648			29,830			21,192
FDIC deposit insurance				22,907			24,926			(2,019	)		27,682			(4,775	)		47,833			45,355
Loss on early extinguishment of debt				25,072			69			25,003			289			24,783			25,141			8,528
Other real estate owned (OREO)				2,380			14,165			(11,785	)		6,440			(4,060	)		16,545			8,651
Credit and debit card processing, volume, interchange and other				4,960			4,681			279			4,206			754			9,641			8,150
Other operating expenses				30,004			11,215			18,789			10,629			19,375			41,219			32,864
Amortization of intangibles				2,531			2,593			(62	)		2,255			276			5,124			4,510
		Total operating expenses		327,879			296,167			31,712			281,800			46,079			624,046			556,849
(Loss) income before income tax				(12,154	)		64,600			(76,754	)		72,585			(84,739	)		52,446			229,944
Income tax (benefit) expense				(77,893	)		16,192			(94,085	)		(38,100	)		(39,793	)		(61,701	)		109,127
Net income			$	65,739		$	48,408		$	17,331		$	110,685		$	(44,946	)	$	114,147		$	120,817
Net income applicable to common stock			$	64,809		$	47,477		$	17,332		$	109,754		$	(44,945	)	$	112,286		$	118,956
Net income per common share - basic [1]			$	0.63		$	0.46		$	0.17		$	1.07		$	(0.44	)	$	1.10		$	1.16
Net income per common share - diluted [1]			$	0.63		$	0.46		$	0.17		$	1.07		$	(0.44	)	$	1.10		$	1.16
[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 Second Quarter 2012 Earnings Release
Table C - Consolidated Statement of Financial Condition
(Unaudited)
												Variance
			June 30,			March 31,			June 30,			Q2 2012 vs.
(In thousands)				2012			2012			2011		Q1 2012
Assets:
Cash and due from banks			$	515,338		$	472,806		$	587,965		$	42,532
Money market investments				949,828			1,304,263			1,383,892			(354,435	)
Trading account securities, at fair value				417,469			404,293			785,842			13,176
Investment securities available-for-sale, at fair value				5,076,797			5,138,616			5,389,491			(61,819	)
Investment securities held-to-maturity, at amortized cost				124,646			124,372			129,910			274
Other investment securities, at lower of cost or realizable value				174,287			195,708			174,560			(21,421	)
Loans held-for-sale, at lower of cost or fair value				364,537			361,596			509,046			2,941
Loans held-in-portfolio:
		Loans not covered under loss sharing agreements with the FDIC		20,665,809			20,478,674			20,657,694			187,135
		Loans covered under loss sharing agreements with the FDIC		4,016,330			4,221,788			4,616,575			(205,458	)
		Less: Allowance for loan losses		(766,030	)		(803,264	)		(746,847	)		37,234
		Total loans held-in-portfolio, net		23,916,109			23,897,198			24,527,422			18,911
FDIC loss share asset				1,631,594			1,880,357			2,445,256			(248,763	)
Premises and equipment, net				527,027			533,545			537,870			(6,518	)
Other real estate not covered under loss sharing agreements with the FDIC				226,629			193,768			162,419			32,861
Other real estate covered under loss sharing agreements with the FDIC				125,093			110,559			74,803			14,534
Accrued income receivable				122,320			126,568			141,980			(4,248	)
Mortgage servicing assets, at fair value				155,711			156,331			162,619			(620	)
Other assets				1,577,794			1,439,532			1,393,843			138,262
Goodwill				647,757			647,911			647,318			(154	)
Other intangible assets				59,243			61,798			54,186			(2,555	)
Total assets			$	36,612,179		$	37,049,221		$	39,108,422		$	(437,042	)
Liabilities and Stockholders’ Equity:
Liabilities:
	Deposits:
		Non-interest bearing	$	5,578,487		$	5,366,420		$	5,364,004		$	212,067
		Interest bearing		21,836,293			21,831,316			22,596,425			4,977
		Total deposits		27,414,780			27,197,736			27,960,429			217,044
Federal funds purchased and assets sold under agreements to repurchase				1,426,636			2,113,557			2,570,322			(686,921	)
Other short-term borrowings				316,200			751,200			151,302			(435,000	)
Notes payable				1,877,583			1,843,754			3,423,286			33,829
Other liabilities				1,555,743			1,175,903			1,039,015			379,840
Total liabilities				32,590,942			33,082,150			35,144,354			(491,208	)
Stockholders’ equity:
Preferred stock				50,160			50,160			50,160			-
Common stock				1,028			10,276			10,242			(9,248	)
Surplus				4,127,216			4,116,710			4,097,909			10,506
Accumulated deficit				(100,440	)		(165,249	)		(228,372	)		64,809
Treasury stock				(144	)		(1,041	)		(642	)		897
Accumulated other comprehensive loss (income)				(56,583	)		(43,785	)		34,771			(12,798	)
		Total stockholders’ equity		4,021,237			3,967,071			3,964,068			54,166
Total liabilities and stockholders’ equity			$	36,612,179		$	37,049,221		$	39,108,422		$	(437,042	)

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER
(Unaudited)
				Quarter ended							Quarter ended							Quarter ended							Variance									Variance
($ amounts in millions; yields not on a taxable equivalent basis)				June 30, 2012							March 31, 2012							June 30, 2011							Q2 2012 vs Q1 2012									Q2 2012 vs Q2 2011
				Average			Income /		Yield /		Average			Income /		Yield /		Average			Income /		Yield /		Average			Income /			Yield /			Average			Income /		Yield /
				balance			Expense		Rate		balance			Expense		Rate		balance			Expense		Rate		balance			Expense			Rate			balance			Expense		Rate
Assets:
Interest earning assets:
	Money market, trading and investment securities			$	6,819		$	50.7	2.98	%	$	6,761		$	52.0	3.07	%	$	7,617		$	64.4	3.39	%	$	58			($1.3	)	(0.09	)	%		($798	)	($13.7	)	(0.41	)	%
	Loans not covered under loss sharing agreements with the FDIC:
		Commercial			10,237			126.2	4.96			10,444			126.5	4.87			11,023			137.2	4.99			(207	)		(0.3	)	0.09				(786	)	(11.0	)	(0.03	)
		Construction			495			3.4	2.78			523			6.5	5.03			804			2.7	1.34			(28	)		(3.1	)	(2.25	)			(309	)	0.7		1.44
		Mortgage			5,713			77.8	5.44			5,464			75.5	5.53			5,124			81.5	6.36			249			2.3		(0.09	)			589		(3.7	)	(0.92	)
		Consumer			3,640			91.1	10.07			3,661			92.6	10.17			3,610			92.3	10.26			(21	)		(1.5	)	(0.10	)			30		(1.2	)	(0.19	)
		Lease financing			546			11.8	8.65			555			12.0	8.67			583			12.9	8.85			(9	)		(0.2	)	(0.02	)			(37	)	(1.1	)	(0.20	)
		Total loans not covered under loss sharing agreements with the FDIC			20,631			310.3	6.04			20,647			313.1	6.09			21,144			326.6	6.19			(16	)		(2.8	)	(0.05	)			(513	)	(16.3	)	(0.15	)
	Loans covered under loss sharing agreements with the FDIC				4,129			79.1	7.69			4,292			74.8	7.00			4,686			115.9	9.91			(163	)		4.3		0.69				(557	)	(36.8	)	(2.22	)
	Total loans				24,760			389.4	6.31			24,939			387.9	6.25			25,830			442.5	6.87			(179	)		1.5		0.06				(1,070	)	(53.1	)	(0.56	)
	Total interest earning assets				31,579		$	440.1	5.59	%		31,700		$	439.9	5.57	%		33,447		$	506.9	6.07	%		(121	)	$	0.2		0.02		%		(1,868	)	($66.8	)	(0.48	)	%
		Allowance for loan losses			(777	)						(802	)						(713	)						25									(64	)
		Other non-interest earning assets			5,415							5,658							6,047							(243	)								(632	)
	Total average assets			$	36,217						$	36,556						$	38,781							($339	)								($2,564	)
Liabilities and Stockholders' Equity:
	Interest bearing deposits:
		NOW and money market		$	5,555		$	6.2	0.45	%	$	5,246		$	6.1	0.47	%	$	5,353		$	8.4	0.63	%	$	309		$	0.1		(0.02	)	%	$	202		($2.2	)	(0.18	)	%
		Savings			6,562			6.2	0.38			6,507			6.3	0.39			6,257			10.0	0.64			55			(0.1	)	(0.01	)			305		(3.8	)	(0.26	)
		Time deposits			9,752			36.1	1.49			10,291			39.3	1.54			10,990			52.3	1.91			(539	)		(3.2	)	(0.05	)			(1,238	)	(16.2	)	(0.42	)
		Total interest bearing deposits			21,869			48.5	0.89			22,044			51.7	0.94			22,600			70.7	1.25			(175	)		(3.2	)	(0.05	)			(731	)	(22.2	)	(0.36	)
	Borrowings				4,165			50.4	4.85			4,365			50.6	4.65			6,486			61.7	3.81			(200	)		(0.2	)	0.20				(2,321	)	(11.3	)	1.04
		Total interest bearing liabilities			26,034			98.9	1.52			26,409			102.3	1.55			29,086			132.4	1.82			(375	)		(3.4	)	(0.03	)			(3,052	)	(33.5	)	(0.30	)
			Net interest spread						4.07	%						4.02	%						4.25	%							0.05		%						(0.18	)	%
	Non-interest bearing deposits				5,309							5,213							5,044							96									265
	Other liabilities				1,067							1,181							939							(114	)								128
	Stockholders' equity				3,807							3,753							3,712							54									95
		Total average liabilities and stockholders' equity		$	36,217						$	36,556						$	38,781							($339	)								($2,564	)
Net interest income / margin non-taxable equivalent basis							$	341.2	4.33	%				$	337.6	4.27	%				$	374.5	4.48	%				$	3.6		0.06		%				($33.3	)	(0.15	)	%

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE
(Unaudited)
			Six months ended							Six months ended
($ amounts in millions; yields not on a taxable equivalent basis)			June 30, 2012							June 30, 2011							Variance
			Average			Income /		Yield /		Average			Income /		Yield /		Average			Income /		Yield /
			balance			Expense		Rate		balance			Expense		Rate		balance			Expense		Rate
Assets:
Interest earning assets:
Money market, trading and investment securities			$	6,790		$	102.6	3.03	%	$	7,543		$	126.5	3.36	%		($753	)	($23.9	)	(0.33	)	%
Loans not covered under loss sharing agreements with the FDIC:
	Commercial			10,341			252.7	4.91			11,139			276.3	5.00			(798	)	(23.6	)	(0.09	)
	Construction			508			10.0	3.94			834			6.0	1.45			(326	)	4.0		2.49
	Mortgage			5,589			153.2	5.48			4,939			152.8	6.19			650		0.4		(0.71	)
	Consumer			3,651			183.7	10.12			3,639			186.1	10.31			12		(2.4	)	(0.19	)
	Lease financing			550			23.8	8.66			587			26.2	8.93			(37	)	(2.4	)	(0.27	)
	Total loans not covered under loss sharing agreements with the FDIC			20,639			623.4	6.07			21,138			647.4	6.16			(499	)	(24.0	)	(0.09	)
Loans covered under loss sharing agreements with the FDIC				4,210			153.9	7.34			4,750			218.5	9.26			(540	)	(64.6	)	(1.92	)
Total loans				24,849			777.3	6.28			25,888			865.9	6.73			(1,039	)	(88.6	)	(0.45	)
Total interest earning assets				31,639		$	879.9	5.58	%		33,431		$	992.4	5.97	%		(1,792	)	($112.5	)	(0.39	)	%
	Allowance for loan losses			(789	)						(742	)						(47	)
	Other non-interest earning assets			5,536							6,086							(550	)
Total average assets			$	36,386						$	38,775							($2,389	)
Liabilities and Stockholders' Equity:
Interest bearing deposits:
	NOW and money market		$	5,400		$	12.3	0.46	%	$	5,166		$	17.3	0.67	%	$	234		($5.0	)	(0.21	)	%
	Savings			6,535			12.4	0.38			6,249			22.6	0.73			286		(10.2	)	(0.35	)
	Time deposits			10,022			75.5	1.51			11,063			107.7	1.96			(1,041	)	(32.2	)	(0.45	)
	Total interest bearing deposits			21,957			100.2	0.92			22,478			147.6	1.32			(521	)	(47.4	)	(0.40	)
Borrowings				4,265			100.9	4.74			6,615			126.9	3.85			(2,350	)	(26.0	)	0.89
	Total interest bearing liabilities			26,222			201.1	1.54			29,093			274.5	1.90			(2,871	)	(73.4	)	(0.36	)
		Net interest spread						4.04	%						4.07	%						(0.03	)	%
Non-interest bearing deposits				5,261							4,985							276
Other liabilities				1,123							1,042							81
Stockholders' equity				3,780							3,655							125
	Total average liabilities and stockholders' equity		$	36,386						$	38,775							($2,389	)
Net interest income / margin non-taxable equivalent basis						$	678.8	4.30	%				$	717.9	4.32	%				($39.1	)	(0.02	)	%

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table F - Other Service Fees
(Unaudited)
		Quarters ended							Variance			Variance
		June 30,		March 31,		June 30,			Q2 2012 vs.			Q2 2012 vs.
(In thousands)		2012		2012		2011			Q1 2012			Q2 2011
Other service fees:
	Debit card fees	$	9,411	$	9,165	$	13,795		$	246		$	(4,384	)
	Insurance fees		12,063		12,390		12,208			(327	)		(145	)
	Credit card fees		14,268		12,559		11,792			1,709			2,476
	Sale and administration of investment products		9,645		8,889		7,657			756			1,988
	Mortgage servicing fees, net of fair value adjustments		6,335		12,931		2,269			(6,596	)		4,066
	Trust fees		4,069		4,081		4,110			(12	)		(41	)
	Processing fees		1,639		1,774		1,740			(135	)		(101	)
	Other fees		4,597		4,250		4,736			347			(139	)
Total other service fees		$	62,027	$	66,039	$	58,307		$	(4,012	)	$	3,720
		Six months ended				Variance
		June 30,		June 30,		2012 vs.
(In thousands)		2012		2011		2011
Other service fees:
	Debit card fees	$	18,576	$	26,720	$	(8,144	)
	Insurance fees		24,453		24,134		319
	Credit card fees		26,827		22,368		4,459
	Sale and administration of investment products		18,534		14,787		3,747
	Mortgage servicing fees, net of fair value adjustments		19,266		8,529		10,737
	Trust fees		8,150		7,605		545
	Processing fees		3,413		3,437		(24	)
	Other fees		8,847		9,379		(532	)
Total other service fees		$	128,066	$	116,959	$	11,107

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table G - Loans and Deposits
(Unaudited)
Loans - Ending Balances
							Variance
(in thousands)	June 30, 2012		March 31, 2012		June 30, 2011		Q2 2012 vs. Q1 2012			Q2 2012 vs. Q2 2011
Loans not covered under FDIC loss sharing agreements:
Commercial	$	9,602,815	$	9,868,242	$	10,072,883	$	(265,427	)	$	(470,068	)
Construction		249,743		236,579		267,902		13,164			(18,159	)
Legacy [1]		509,829		603,874		811,074		(94,045	)		(301,245	)
Lease financing		537,917		543,314		564,289		(5,397	)		(26,372	)
Mortgage		5,899,973		5,591,745		5,347,512		308,228			552,461
Consumer		3,865,532		3,634,920		3,594,034		230,612			271,498
Total non-covered loans held-in-portfolio		20,665,809	$	20,478,674	$	20,657,694	$	187,135		$	8,115
Loans covered under FDIC loss sharing agreements		4,016,330		4,221,788		4,616,575		(205,458	)		(600,245	)
Total loans held-in-portfolio	$	24,682,139	$	24,700,462	$	25,274,269	$	(18,323	)	$	(592,130	)
Loans held-for-sale:
Commercial		18,072	$	24,879	$	57,998	$	(6,807	)	$	(39,926	)
Construction		160,102		206,246		340,687		(46,144	)		(180,585	)
Legacy [1]		425		1,115		-		(690	)		425
Mortgage		185,938		129,356		110,361		56,582			75,577
Total loans held-for-sale		364,537		361,596		509,046		2,941			(144,509	)
Total loans	$	25,046,676	$	25,062,058	$	25,783,315	$	(15,382	)	$	(736,639	)
[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)	June 30, 2012		March 31, 2012		June 30, 2011		Q2 2012 vs. Q1 2012			Q2 2012 vs. Q2 2011
Demand deposits [1]	$	6,379,289	$	6,013,009	$	6,285,171	$	366,280		$	94,118
Savings, NOW and money market deposits (non-brokered)		11,031,476		11,048,140		10,724,099		(16,664	)		307,377
Savings, NOW and money market deposits (brokered)		433,694		212,996		50,000		220,698			383,694
Time deposits (non-brokered)		6,950,063		7,186,826		8,179,689		(236,763	)		(1,229,626	)
Time deposits (brokered CDs)		2,620,258		2,736,765		2,721,470		(116,507	)		(101,212	)
Total deposits	$	27,414,780	$	27,197,736	$	27,960,429	$	217,044		$	(545,649	)
[1] Includes interest and non-interest bearing deposits.

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table H - Non-Performing Assets
(Unaudited)
																Variance
(Dollars in thousands)	June 30, 2012			As a percentage of loans HIP by category		March 31, 2012			As a percentage of loans HIP by category		June 30, 2011			As a percentage of loans HIP by category		Q2 2012 vs. Q1 2012			Q2 2012 vs. Q2 2011
Non-accrual loans:
Commercial	$	767,201		8.0	%	$	818,678		8.3	%	$	739,772		7.3	%	$	(51,477	)	$	27,429
Construction		67,538		27.0			69,470		29.4			118,823		44.4			(1,932	)		(51,285	)
Legacy [1]		54,730		10.7			79,077		13.1			124,479		15.3			(24,347	)		(69,749	)
Lease financing		5,046		0.9			5,673		1.0			4,205		0.7			(627	)		841
Mortgage		632,899		10.7			667,217		11.9			587,987		11.0			(34,318	)		44,912
Consumer		34,665		0.9			41,688		1.1			49,424		1.4			(7,023	)		(14,759	)
Total non-performing loans held-in-portfolio, excluding covered loans
		1,562,079		7.6	%		1,681,803		8.2	%		1,624,690		7.9	%		(119,724	)		(62,611	)
Non-performing loans held-for-sale [2]		178,652					232,293					399,869					(53,641	)		(221,217	)
Other real estate owned (“OREO”), excluding covered OREO
		226,629					193,768					162,419					32,861			64,210
Total non-performing assets, excluding covered assets
		1,967,360					2,107,864					2,186,978					(140,504	)		(219,618	)
Covered loans and OREO		209,793					203,254					89,782					6,539			120,011
Total non-performing assets	$	2,177,153				$	2,311,118				$	2,276,760				$	(133,965	)	$	(99,607	)
Accruing loans past due 90 days or more [3]	$	322,893				$	328,757				$	325,980				$	(5,864	)	$	(3,087	)
Ratios excluding covered loans:
Non-performing loans held-in-portfolio to loans held-in-portfolio
		7.56	%				8.21	%				7.86	%
Allowance for loan losses to loans held-in-portfolio
		3.14					3.25					3.34
Allowance for loan losses to non-performing loans, excluding held-for-sale
		41.52					39.53					42.45
Ratios including covered loans:
Non-performing loans held-in-portfolio to loans held-in-portfolio
		6.67	%				7.18	%				6.49	%
Allowance for loan losses to loans held-in-portfolio
		3.10					3.25					2.95
Allowance for loan losses to non-performing loans, excluding held-for-sale		46.52					45.27					45.55
[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 June 30, 2012 consisted of $160 million in construction loans, $18 million in commercial loans and $53 thousand in mortgage loans (March 31, 2012 - $206 million, $26 million and $53 thousand, respectively; June 30, 2011 - $341 million, $58 million, and $1 million, respectively).
[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 $48 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of June 30, 2012.

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table I - Activity in Non-Performing Loans
(Unaudited)
Commercial loans held-in-portfolio:
		Quarter ended June 30, 2012									Quarter ended March 31, 2012
(In thousands)		BPPR			BPNA			Popular, Inc.			BPPR			BPNA			Popular, Inc.
Beginning Balance NPLs		$	620,916		$	197,762		$	818,678		$	631,171		$	198,921		$	830,092
Plus:
	New non-performing loans		63,963			31,317			95,280			86,446			30,608			117,054
	Advances on existing non-performing loans		-			145			145			-			227			227
	Loans transferred from held-for-sale		-			4,933			4,933			-			-			-
Less:
	Non-performing loans transferred to OREO		(10,043	)		(16,633	)		(26,676	)		(5,481	)		(10,434	)		(15,915	)
	Non-performing loans charged-off		(36,698	)		(15,385	)		(52,083	)		(37,924	)		(15,121	)		(53,045	)
	Loans returned to accrual status / loan collections		(47,085	)		(25,224	)		(72,309	)		(53,296	)		(6,439	)		(59,735	)
	Loans transferred to held-for-sale		-			(767	)		(767	)		-			-			-
Ending balance NPLs		$	591,053		$	176,148		$	767,201		$	620,916		$	197,762		$	818,678
Construction loans held-in-portfolio:
		Quarter ended June 30, 2012									Quarter ended March 31, 2012
(In thousands)		BPPR			BPNA			Popular, Inc.			BPPR			BPNA			Popular, Inc.
Beginning Balance NPLs		$	56,247		$	13,223		$	69,470		$	53,859		$	42,427		$	96,286
Plus:
	New non-performing loans		833			-			833			6,372			-			6,372
	Advances on existing non-performing loans		145			204			349			-			125			125
Less:
	Non-performing loans charged-off		(1,000	)		-			(1,000	)		(371	)		(1,380	)		(1,751	)
	Loans returned to accrual status / loan collections		(691	)		(1,423	)		(2,114	)		(3,613	)		(17,617	)		(21,230	)
	Loans transferred to held-for-sale		-			-			-			-			(10,332	)		(10,332	)
Ending balance NPLs		$	55,534		$	12,004		$	67,538		$	56,247		$	13,223		$	69,470
Mortgage loans held-in-portfolio:
		Quarter ended June 30, 2012									Quarter ended March 31, 2012
(In thousands)		BPPR			BPNA			Popular, Inc.			BPPR			BPNA			Popular, Inc.
Beginning Balance NPLs		$	633,517		$	33,700		$	667,217		$	649,279		$	37,223		$	686,502
Plus:
	New non-performing loans		177,849			6,476			184,325			186,510			6,256			192,766
Less:
	Non-performing loans transferred to OREO		(19,423	)		(3,107	)		(22,530	)		(21,573	)		(1,064	)		(22,637	)
	Non-performing loans charged-off		(20,575	)		(2,128	)		(22,703	)		(20,427	)		(3,496	)		(23,923	)
	Loans returned to accrual status / loan collections		(171,286	)		(2,124	)		(173,410	)		(160,272	)		(5,219	)		(165,491	)
Ending balance NPLs		$	600,082		$	32,817		$	632,899		$	633,517		$	33,700		$	667,217
Legacy loans held-in-portfolio:
		Quarter ended June 30, 2012									Quarter ended March 31, 2012
(In thousands)		BPPR			BPNA			Popular, Inc.			BPPR			BPNA			Popular, Inc.
Beginning Balance NPLs		$	-		$	79,077		$	79,077		$	-		$	75,660		$	75,660
Plus:
	New non-performing loans		-			8,355			8,355			-			17,373			17,373
	Advances on existing non-performing loans		-			1			1			-			16			16
Less:
	Non-performing loans transferred to OREO		-			(65	)		(65	)		-			(3,370	)		(3,370	)
	Non-performing loans charged-off		-			(8,271	)		(8,271	)		-			(8,489	)		(8,489	)
	Loans returned to accrual status / loan collections		-			(9,797	)		(9,797	)		-			(1,441	)		(1,441	)
	Loans transferred to held-for-sale		-			(14,570	)		(14,570	)		-			(672	)		(672	)
Ending balance NPLs		$	-		$	54,730		$	54,730		$	-		$	79,077		$	79,077

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios
(Unaudited)
	Quarter ended								Quarter ended								Quarter ended
	June 30,								March 31,								June 30,
(Dollars in thousands)	2012			2012		2012			2012			2012		2012			2011			2011		2011
Allowance for loan losses:	Non-covered loans			Covered loans		Total			Non-covered loans			Covered loans		Total			Non-covered loans			Covered loans		Total
Balance at beginning of period	$	664,768		$	138,496	$	803,264		$	690,363		$	124,945	$	815,308		$	727,346		$	9,159	$	736,505
Provision for loan losses		81,743			37,456		119,199			82,514			18,209		100,723			95,712			48,605		144,317
		746,511			175,952		922,463			772,877			143,154		916,031			823,058			57,764		880,822
Net loans charged-off (recovered):
BPPR
Commercial		28,564			34,652		63,216			37,518			4,102		41,620			49,923			263		50,186
Construction		985			15,187		16,172			(371	)		264		(107	)		(5,944	)		-		(5,944	)
Lease financing		8			-		8			154			-		154			632			-		632
Mortgage		14,810			4,085		18,895			12,226			203		12,429			7,151			-		7,151
Consumer		23,055			4,533		27,588			24,131			89		24,220			27,363			332		27,695
Total BPPR		67,422			58,457		125,879			73,658			4,658		78,316			79,125			595		79,720
BPNA
Commercial		11,132					11,132			16,865					16,865			18,854					18,854
Construction		(4	)				(4	)		166					166			491					491
Lease financing		-					-			-					-			-					-
Legacy [1]		5,459					5,459			3,558					3,558			17,373					17,373
Mortgage		3,371					3,371			5,228					5,228			4,030					4,030
Consumer		10,596					10,596			8,634					8,634			13,507					13,507
Total BPNA		30,554					30,554			34,451					34,451			54,255					54,255
Total loans charged-off (recovered) - Popular, Inc.		97,976			58,457		156,433			108,109			4,658		112,767			133,380			595		133,975
Net write-downs (recoveries) related to loans transferred to loans held-for-sale		-			-		-			-			-		-			-			-		-
Balance at end of period	$	648,535		$	117,495	$	766,030		$	664,768		$	138,496	$	803,264		$	689,678		$	57,169	$	746,847
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio
		1.93	%				2.56	%		2.13	%				1.83	%		2.59	%				2.12	%
Provision for loan losses to net charge-offs		0.83	x				0.76	x		0.76	x				0.89	x		0.72	x				1.08	x
BPPR
Annualized net charge-offs to average loans held-in-portfolio
		1.85	%				2.69	%		2.01	%				1.65	%		2.21	%				1.68	%
Provision for loan losses to net charge-offs		0.99	x				0.83	x		0.92	x				1.10	x		0.89	x				1.50	x
BPNA
Annualized net charge-offs to average loans held-in-portfolio
							2.15	%							2.43	%							3.45	%
Provision for loan losses to net charge-offs							0.50	x							0.43	x							0.46	x
[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment.

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED
(Unaudited)
June 30, 2012
(Dollars in thousands)		Commercial			Construction			Legacy [3]			Mortgage			Lease financing			Consumer			Total		[2]
Specific ALLL		$	6,830		$	434		$	99		$	59,723		$	766		$	19,656		$	87,508
Impaired loans	[1]	$	495,032		$	61,007		$	29,289		$	510,659		$	5,528		$	133,857		$	1,235,372
Specific ALLL to impaired loans	[1]		1.38	%		0.71	%		0.34	%		11.70	%		13.86	%		14.68	%		7.08	%
General ALLL		$	289,934		$	8,708		$	43,912		$	90,099		$	2,191		$	126,183		$	561,027
Loans held-in-portfolio, excluding impaired loans	[1]	$	9,107,783		$	188,736		$	480,540		$	5,389,314		$	532,389		$	3,731,675		$	19,430,437
General ALLL to loans held-in-portfolio, excluding impaired loans	[1]		3.18	%		4.61	%		9.14	%		1.67	%		0.41	%		3.38	%		2.89	%
Total ALLL		$	296,764		$	9,142		$	44,011		$	149,822		$	2,957		$	145,839		$	648,535
Total non-covered loans held-in-portfolio	[1]	$	9,602,815		$	249,743		$	509,829		$	5,899,973		$	537,917		$	3,865,532		$	20,665,809
ALLL to loans held-in-portfolio	[1]		3.09	%		3.66	%		8.63	%		2.54	%		0.55	%		3.77	%		3.14	%
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction.
[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of June 30, 2012, the general allowance on the covered loans amounted to $103 million, while the specific reserve amounted to $14 million.
[3] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment.
March 31, 2012
(Dollars in thousands)		Commercial			Construction			Legacy			Mortgage			Lease financing			Consumer			Total		[2]
Specific ALLL		$	12,998		$	1,013		$	765		$	40,946		$	1,344		$	18,990		$	76,056
Impaired loans	[1]	$	552,152		$	64,149		$	47,731		$	450,754		$	5,412		$	138,200		$	1,258,398
Specific ALLL to impaired loans	[1]		2.35	%		1.58	%		1.60	%		9.08	%		24.83	%		13.74	%		6.04	%
General ALLL		$	300,581		$	8,120		$	53,960		$	84,533		$	3,623		$	137,895		$	588,712
Loans held-in-portfolio, excluding impaired loans	[1]	$	9,316,090		$	172,430		$	556,143		$	5,140,991		$	537,902		$	3,496,720		$	19,220,276
General ALLL to loans held-in-portfolio, excluding impaired loans	[1]		3.23	%		4.71	%		9.70	%		1.64	%		0.67	%		3.94	%		3.06	%
Total ALLL		$	313,579		$	9,133		$	54,725		$	125,479		$	4,967		$	156,885		$	664,768
Total non-covered loans held-in-portfolio	[1]	$	9,868,242		$	236,579		$	603,874		$	5,591,745		$	543,314		$	3,634,920		$	20,478,674
ALLL to loans held-in-portfolio	[1]		3.18	%		3.86	%		9.06	%		2.24	%		0.91	%		4.32	%		3.25	%
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction.
[2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of March 31, 2012, the general allowance on the covered loans amounted to $106 million, while the specific reserve amounted to $32 million.
Variance June 30, 2012 versus March 31, 2012
(Dollars in thousands)		Commercial			Construction			Legacy			Mortgage			Lease financing			Consumer			Total
Specific ALLL		$	(6,168)		$	(579)		$	(666)		$	18,777		$	(578)		$	666		$	11,452
Impaired loans		$	(57,120)		$	(3,142)		$	(18,442)		$	59,905		$	116		$	(4,343)		$	(23,026)
General ALLL		$	(10,647)		$	588		$	(10,048)		$	5,566		$	(1,432)		$	(11,712)		$	(27,685)
Loans held-in-portfolio, excluding impaired loans		$	(208,307)		$	16,306		$	(75,603)		$	248,323		$	(5,513)		$	234,955		$	210,161
Total ALLL		$	(16,815)		$	9		$	(10,714)		$	24,343		$	(2,010)		$	(11,046)		$	(16,233)
Total non-covered loans held-in-portfolio		$	(265,427)		$	13,164		$	(94,045)		$	308,228		$	(5,397)		$	230,612		$	187,135

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - BANCO POPULAR DE PUERTO RICO
(Unaudited)
As of June 30, 2012
Banco Popular de Puerto Rico
(In thousands)		Commercial			Construction			Mortgage			Lease financing			Consumer			Total
Allowance for credit losses:
	Specific ALLL non-covered loans	$	5,497		$	434		$	44,708		$	766		$	19,564		$	70,969
	General ALLL non-covered loans		198,349			7,030			75,631			2,191			92,387			375,588
ALLL - non-covered loans			203,846			7,464			120,339			2,957			111,951			446,557
	Specific ALLL covered loans		14,278			-			-			-			-			14,278
	General ALLL covered loans		61,314			23,628			11,617			-			6,658			103,217
ALLL - covered loans			75,592			23,628			11,617			-			6,658			117,495
Total ALLL		$	279,438		$	31,092		$	131,956		$	2,957		$	118,609		$	564,052
Loans held-in-portfolio:
	Impaired non-covered loans	$	378,660		$	49,003		$	457,359		$	5,528		$	131,495		$	1,022,045
	Non-covered loans held-in-portfolio, excluding impaired loans		5,784,620			152,761			4,356,862			532,389			3,067,554			13,894,186
Non-covered loans held-in-portfolio			6,163,280			201,764			4,814,221			537,917			3,199,049			14,916,231
	Impaired covered loans		76,695			-			-			-			-			76,695
	Covered loans held-in-portfolio, excluding impaired loans		2,254,481			469,765			1,116,476			-			98,913			3,939,635
Covered loans held-in-portfolio			2,331,176			469,765			1,116,476			-			98,913			4,016,330
Total loans held-in-portfolio		$	8,494,456		$	671,529		$	5,930,697		$	537,917		$	3,297,962		$	18,932,561
As of March 31, 2012
Banco Popular de Puerto Rico
(In thousands)		Commercial			Construction			Mortgage			Lease financing			Consumer			Total
Allowance for credit losses:
	Specific ALLL non-covered loans	$	11,115		$	1,013		$	27,096		$	1,344		$	18,887		$	59,455
	General ALLL non-covered loans		210,214			5,658			69,411			3,623			99,175			388,081
ALLL - non-covered loans			221,329			6,671			96,507			4,967			118,062			447,536
	Specific ALLL covered loans		32,489			-			-			-			-			32,489
	General ALLL covered loans		57,581			29,727			10,517			-			8,182			106,007
ALLL - covered loans			90,070			29,727			10,517			-			8,182			138,496
Total ALLL		$	311,399		$	36,398		$	107,024		$	4,967		$	126,244		$	586,032
Loans held-in-portfolio:
	Impaired non-covered loans	$	402,097		$	51,023		$	396,854		$	5,412		$	135,745		$	991,131
	Non-covered loans held-in-portfolio, excluding impaired loans		6,027,572			124,745			4,363,491			537,902			2,815,758			13,869,468
Non-covered loans held-in-portfolio			6,429,669			175,768			4,760,345			543,314			2,951,503			14,860,599
	Impaired covered loans		85,855			-			-			-			-			85,855
	Covered loans held-in-portfolio, excluding impaired loans		2,345,846			532,433			1,150,996			-			106,658			4,135,933
Covered loans held-in-portfolio			2,431,701			532,433			1,150,996			-			106,658			4,221,788
Total loans held-in-portfolio		$	8,861,370		$	708,201		$	5,911,341		$	543,314		$	3,058,161		$	19,082,387
Variance June 30, 2012 versus March 31, 2012
(In thousands)		Commercial			Construction			Mortgage			Lease financing			Consumer			Total
Allowance for credit losses:
	Specific ALLL non-covered loans	$	(5,618	)	$	(579	)	$	17,612		$	(578	)	$	677		$	11,514
	General ALLL non-covered loans		(11,865	)		1,372			6,220			(1,432	)		(6,788	)		(12,493	)
ALLL - non-covered loans			(17,483	)		793			23,832			(2,010	)		(6,111	)		(979	)
	Specific ALLL covered loans		(18,211	)		-			-			-			-			(18,211	)
	General ALLL covered loans		3,733			(6,099	)		1,100			-			(1,524	)		(2,790	)
ALLL - covered loans			(14,478	)		(6,099	)		1,100			-			(1,524	)		(21,001	)
Total ALLL		$	(31,961	)	$	(5,306	)	$	24,932		$	(2,010	)	$	(7,635	)	$	(21,980	)
Loans held-in-portfolio:
	Impaired non-covered loans	$	(23,437	)	$	(2,020	)	$	60,505		$	116		$	(4,250	)	$	30,914
	Non-covered loans held-in-portfolio, excluding impaired loans		(242,952	)		28,016			(6,629	)		(5,513	)		251,796			24,718
Non-covered loans held-in-portfolio			(266,389	)		25,996			53,876			(5,397	)		247,546			55,632
	Impaired covered loans		(9,160	)		-			-			-			-			(9,160	)
	Covered loans held-in-portfolio, excluding impaired loans		(91,365	)		(62,668	)		(34,520	)		-			(7,745	)		(196,298	)
Covered loans held-in-portfolio			(100,525	)		(62,668	)		(34,520	)		-			(7,745	)		(205,458	)
Total loans held-in-portfolio		$	(366,914	)	$	(36,672	)	$	19,356		$	(5,397	)	$	239,801		$	(149,826	)

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - BANCO POPULAR NORTH AMERICA
(Unaudited)
As of June 30, 2012
Banco Popular North America
(In thousands)		Commercial			Construction			Legacy			Mortgage			Consumer			Total
Allowance for credit losses:
	Specific ALLL	$	1,333		$	-		$	99		$	15,015		$	92		$	16,539
	General ALLL		91,585			1,678			43,912			14,468			33,796			185,439
Total ALLL		$	92,918		$	1,678		$	44,011		$	29,483		$	33,888		$	201,978
Loans held-in-portfolio:
	Impaired loans	$	116,372		$	12,004		$	29,289		$	53,300		$	2,362		$	213,327
	Loans held-in-portfolio, excluding impaired loans		3,323,163			35,975			480,540			1,032,452			664,121			5,536,251
Total loans held-in-portfolio		$	3,439,535		$	47,979		$	509,829		$	1,085,752		$	666,483		$	5,749,578
As of March 31, 2012
Banco Popular North America
(In thousands)		Commercial			Construction			Legacy			Mortgage			Consumer			Total
Allowance for credit losses:
	Specific ALLL	$	1,883		$	-		$	765		$	13,850		$	103		$	16,601
	General ALLL		90,367			2,462			53,960			15,122			38,720			200,631
Total ALLL		$	92,250		$	2,462		$	54,725		$	28,972		$	38,823		$	217,232
Loans held-in-portfolio:
	Impaired loans	$	150,055		$	13,126		$	47,731		$	53,900		$	2,455		$	267,267
	Loans held-in-portfolio, excluding impaired loans		3,288,518			47,685			556,143			777,500			680,962			5,350,808
Total loans held-in-portfolio		$	3,438,573		$	60,811		$	603,874		$	831,400		$	683,417		$	5,618,075
Variance June 30, 2012 versus March 31, 2012
(In thousands)		Commercial			Construction			Legacy			Mortgage			Consumer			Total
Allowance for credit losses:
	Specific ALLL	$	(550	)	$	-		$	(666	)	$	1,165		$	(11	)	$	(62	)
	General ALLL		1,218			(784	)		(10,048	)		(654	)		(4,924	)		(15,192	)
Total ALLL		$	668		$	(784	)	$	(10,714	)	$	511		$	(4,935	)	$	(15,254	)
Loans held-in-portfolio:
	Impaired loans	$	(33,683	)	$	(1,122	)	$	(18,442	)	$	(600	)	$	(93	)	$	(53,940	)
	Loans held-in-portfolio, excluding impaired loans		34,645			(11,710	)		(75,603	)		254,952			(16,841	)		185,443
Total loans held-in-portfolio		$	962		$	(12,832	)	$	(94,045	)	$	254,352		$	(16,934	)	$	131,503

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table N - Reconciliation to GAAP Financial Measures
(Unaudited)
(In thousands, except share or per share information)		June 30, 2012			March 31, 2012			June 30, 2011
Total stockholders’ equity		$	4,021,237		$	3,967,071		$	3,964,068
Less: Preferred stock			(50,160)			(50,160)			(50,160)
Less: Goodwill			(647,757)			(647,911)			(647,318)
Less: Other intangibles			(59,243)			(61,798)			(54,186)
Total tangible common equity		$	3,264,077		$	3,207,202		$	3,212,404
Total assets		$	36,612,179		$	37,049,221		$	39,108,422
Less: Goodwill			(647,757)			(647,911)			(647,318)
Less: Other intangibles			(59,243)			(61,798)			(54,186)
Total tangible assets		$	35,905,179		$	36,339,512		$	38,406,918
Tangible common equity to tangible assets			9.09	%		8.83	%		8.36	%
Common shares outstanding at end of period [1]			102,824,323			102,711,707			102,397,790
Tangible book value per common share [1]		$	31.74		$	31.23		$	31.37
[1] All share and per share data has been adjusted to retroactively reflect the 1-for-10 reverse stock split effected on May 29, 2012.
(In thousands)		June 30, 2012			March 31, 2012			June 30, 2011
Common stockholders’ equity		$	3,971,077		$	3,916,911		$	3,913,908
Less: Unrealized gains on available-for-sale securities, net of tax	[1]		(181,207)			(196,878)			(188,171)
Less: Disallowed deferred tax assets	[2]		(392,960)			(257,440)			(271,139)
Less: Intangible assets:
Goodwill			(647,757)			(647,911)			(647,318)
Other disallowed intangibles			(22,241)			(26,149)			(22,596)
Less: Aggregate adjusted carrying value of all non-financial equity investments			(1,256)			(1,175)			(1,540)
Add: Pension liability adjustment, net of tax and accumulated net gains (losses) on cash flow hedges	[3]		208,015			211,747			125,605
Total Tier 1 common equity		$	2,933,671		$	2,999,105		$	2,908,749
[1] In accordance with regulatory risk-based capital guidelines, Tier 1 capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values. In arriving at Tier 1 capital, institutions are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax.
[2] Approximately $151 million of the Corporation’s $573 million of net deferred tax assets at June 30, 2012 (March 31, 2012 - $138 million and $424 million, respectively; June 30, 2011 - $96 million and $362 million, respectively), were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $393 million of such assets at June 30, 2012 (March 31, 2012 - $257 million; June 30, 2011 - $271 million) exceeded the limitation imposed by these guidelines and, as “disallowed deferred tax assets”, were deducted in arriving at Tier 1 capital. The remaining $29 million of the Corporation’s other net deferred tax assets at June 30, 2012 (March 31, 2012 - $29 million; June 30, 2011 - $5 million) represented primarily the following items (a) the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines; (b) the deferred tax asset corresponding to the pension liability adjustment recorded as part of accumulated other comprehensive income; and (c) the deferred tax liability associated with goodwill and other intangibles.
[3] The Federal Reserve Bank has granted interim capital relief for the impact of pension liability adjustment.

Popular, Inc.
Financial Supplement to Second Quarter 2012 Earnings Release
Table O - Financial Information - Westernbank Covered Loans
(Unaudited)
Revenues:
		Quarter ended
(In thousands)		June 30, 2012			March 31, 2012			Variance
Interest income on covered loans		$	79,094		$	74,764		$	4,330
FDIC loss share income (expense):
Amortization of indemnification asset			(37,413	)		(29,375	)		(8,038	)
80% mirror accounting on credit impairment losses [1]			29,426			13,422			16,004
80% mirror accounting on discount accretion on unfunded commitments			(248	)		(248	)		-
80% mirror accounting on reimbursable expenses			10,663			1,805			8,858
Other			147			(859	)		1,006
	Total FDIC loss share income (expense)		2,575			(15,255	)		17,830
Other non-interest income			310			310			-
Total revenues			81,979			59,819			22,160
Provision for loan losses			37,456			18,209			19,247
Total revenues less provision for loan losses		$	44,523		$	41,610		$	2,913
[1] Reductions in expected cash flows for ASC 310-30 loans, which may impact the provision for loan losses, may consider reductions in both principal and interest cash flow expectations. The amount covered under the FDIC loss sharing agreements for interest not collected from borrowers is limited under the agreements (approximately 90 days); accordingly, these amounts are not subject fully to the 80% mirror accounting.
Quarterly average assets:
		Quarter ended
(In millions)		June 30, 2012			March 31, 2012			Variance
Covered loans		$	4,129		$	4,292		$	(163	)
FDIC loss share asset			1,700			1,903			(203	)
Activity in the carrying amount and accretable yield of covered loans accounted for under ASC 310-30:
		Quarter ended						Quarter ended
		June 30, 2012						March 31, 2012
(In thousands)		Accretable yield			Carrying amount of loans			Accretable yield			Carrying amount of loans
Beginning balance		$	1,542,519		$	3,894,905		$	1,470,259		$	4,036,471
Accretion			(73,988	)		73,988			(69,337	)		69,337
Changes in expected cash flows			106,319						141,597
Collections / charge-offs						(253,381	)					(210,903	)
Ending balance			1,574,850			3,715,512			1,542,519			3,894,905
	Allowance for loan losses - ASC 310-30 covered loans					(93,971	)					(94,559	)
Ending balance, net of allowance for loan losses		$	1,574,850		$	3,621,541		$	1,542,519		$	3,800,346
Activity in the carrying amount of the FDIC indemnity asset:
					Quarter ended						Quarter ended
(In thousands)					June 30, 2012						March 31, 2012
Balance at beginning of period					$	1,880,357					$	1,915,128
Amortization						(37,413	)					(29,375	)
Credit impairment losses to be covered under loss sharing agreements						29,426						13,422
Decrease due to reciprocal accounting on the discount accretion on unfunded commitments						(248	)					(248	)
Payments received from FDIC under loss sharing agreements						(241,911	)					(20,896	)
Other adjustments attributable to FDIC loss sharing agreements						1,383						2,326
Balance at end of period					$	1,631,594					$	1,880,357
Activity in the remaining FDIC loss share asset amortization:
					Quarter ended						Quarter ended
(In thousands)					June 30, 2012						March 31, 2012
Balance at beginning of period					$	106,781					$	117,916
Amortization						(37,413	)					(29,375	)
Impact of lower projected losses						51,940						18,240
Balance at end of period					$	121,308					$	106,781

CONTACT:
Popular, Inc.
Investor Relations:
Jorge A. Junquera, 787-754-1685
Chief Financial Officer, Senior Executive Vice President
or
Media Relations:
Teruca Rullán, 787-281-5170 or 917-679-3596/mobile
Senior Vice President, Corporate Communications