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Press release from Business Wire

Popular, Inc. Reports Net Income of $47.2 million for the Quarter Ended September 30, 2012

<ul> <li class='bwlistitemmargb'> <b>Continued improvement in credit quality (excluding covered loans):</b> <ul> <li class='bwlistitemmargb'> <b>Non-performing loans held-for-sale declined by $70 million or 39% from Q2 2012</b> </li> <li class='bwlistitemmargb'> <b>Non-performing assets declined by $57 million from Q2 2012, down 22% from Q3 2010 peak; lowest level since Q2 2009</b> </li> <li class='bwlistitemmargb'> <b>Net charge-offs were $95.8 million for Q3 2012 vs. $98.0 million for Q2 2012; declining for the fourth consecutive quarter</b> </li> </ul> </li> <li class='bwlistitemmargb'> <b>Net interest margin increased to 4.37% in Q3 2012 from 4.33% for Q2 2012, reflecting lower funding costs</b> </li> <li class='bwlistitemmargb'> <b>Common Equity Tier 1 ratio of 12.72% and Tangible Book Value per Share of $32.15 at September 30, 2012</b> </li> <li class='bwlistitemmargb'> <b>Company reaffirms full-year 2012 earnings guidance of between $210 and $225 million</b> </li> </ul>

Friday, October 19, 2012

Popular, Inc. Reports Net Income of $47.2 million for the Quarter Ended September 30, 201208:00 EDT Friday, October 19, 2012 SAN JUAN, Puerto Rico (Business Wire) -- Popular, Inc. (“the Corporation” or “Popular”) (NASDAQ:BPOP) reported net income of $47.2 million for the quarter ended September 30, 2012, compared with net income of $65.7 million for the quarter ended June 30, 2012. Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: “Third quarter results reflected continued strength and stability in our revenues, further declines in non-performing loans and charge-offs, and increases in our already strong capital ratios. Our number one priority is continuing to reduce non-performing assets, which will improve returns and increase our strategic and financial flexibility.” Earnings Highlights – Third Quarter 2012     Quarters ended (Dollars in thousands, except per share information)   30-Sep-12   30-Jun-12   30-Sep-11 Net interest income   $ 343,426   $ 341,200   $ 369,311 Provision for loan losses – non-covered loans 83,589 81,743 150,703 Provision for loan losses – covered loans [1]   22,619   37,456   25,573 Net interest income after provision for loan losses 237,218 222,001 193,035 FDIC loss share (expense) income (6,707) 2,575 (5,361) Other non-interest income 122,416 91,149 127,751 Operating expenses   290,355   327,879   282,355 Income (loss) before income tax 62,572 (12,154) 33,070 Income tax expense (benefit)   15,384   (77,893)   5,537 Net income   $ 47,188   $ 65,739   $ 27,533 Net income applicable to common stock   $ 46,257   $ 64,809   $ 26,602 Net income per common share - basic and diluted [2]   $0.45   $0.63   $0.26 [1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements. [2] Per share data has been adjusted to retroactively reflect the 1-for-10 reverse stock split effected on May 29, 2012.   Financial Impact of FDIC-Assisted Transaction                     (In thousands)   30-Sep-12   30-Jun-12   30-Sep-11   Income Statement Interest income on covered loans $ 70,584 $ 79,094 $ 105,809 Total FDIC loss share (expense) income (6,707) 2,575 (5,361) Other non-interest income 310 310 - Provision for loan losses   22,619   37,456   25,573 Total revenues less provision for loan losses   $ 41,568   $ 44,523   $ 74,875   Balance Sheet Loans covered under loss-sharing agreement with FDIC $ 3,903,867 $ 4,016,330 $ 4,512,423 FDIC loss share asset 1,559,057 1,631,594 1,895,059 FDIC true-up payment obligation   103,189   100,198   96,720   See additional details on accounting for FDIC-Assisted transaction in Table O. Net interest income Net interest margin for the third quarter of 2012 increased 4 basis points to 4.37% as compared to the second quarter of 2012. Net interest income reached $343.4 million, an increase of $2.2 million from the second quarter. The main drivers of the improvement in net interest margin are: Decrease in interest expense on deposits of approximately $5.5 million, or 9 basis points, reflecting continuing progress in repricing the deposit base and a decrease in the average balance of deposits, mainly in certificates of deposit. Decrease in the cost of short-term borrowings of approximately 73 basis points or $3.2 million. This decrease was driven mainly by the early termination of $350 million in repurchase agreements during the second quarter of 2012 that had a cost of 4.36%. Interest income on the non-covered portfolio increased by $6.5 million. The increase was driven mainly by consumer loans, which showed the benefit of $225 million of portfolio purchases at the end of the second quarter. Interest income on the covered portfolio decreased by $8.5 million mainly due to the pay-off, during the second quarter of 2012, of a commercial single loan pool accounted for under ASC 310-30, resulting in the remaining discount being accreted into interest income during that period. Yields on the investment securities portfolio declined by 28 basis points or $3.2 million mainly due to prepayments and reinvestment under a lower interest rate environment. The BPPR segment's net interest margin for the third quarter increased 4 basis points from 5.07% in the second quarter to 5.11% in the third quarter of 2012. Net interest income amounted to $300.9 million for the quarter ended September 30, 2012, compared with $298.5 million for the previous quarter. The improvement was mainly related to lower cost of borrowings and interest bearing deposits and higher interest income related to acquired consumer loans, partially offset by lower interest income from covered loans as mentioned above. The BPNA segment earned $69.6 million in net interest income for the quarter ended September 30, 2012 in line with the previous quarter. Net interest margin increased by 2 basis points to 3.57% due to a 13 basis point reduction in cost of interest bearing deposits partially offset by an 8 basis point decline in yield on earning assets mainly in investment securities. Provision for Loan Losses (In thousands)   30-Sep-12   30-Jun-12   30-Sep-11 Provision for loan losses - non-covered loans       BPPR $ 69,738 $ 66,443 $ 131,058 BPNA 13,851   15,300   19,645 83,589 81,743 150,703 Provision for loan losses - covered loans   22,619   37,456   25,573 The provision for loan losses for the third quarter of 2012 amounted to $106.2 million, a decrease of $13.0 million versus the previous quarter, mainly driven by lower provision for the covered loan portfolio. The provision for loan losses for the non-covered loan portfolio increased by $1.8 million from second quarter 2012. The provision for loan losses for non-covered loans in the BPPR reportable segment increased by $3.3 million from the second quarter of 2012, primarily reflecting higher net charge-offs in the commercial loan portfolio resulting from the ongoing portfolio review. The provision for loan losses in the BPNA reportable segment decreased by $1.4 million from the second quarter of 2012, primarily due to the effect of lower net charge-offs in all loan portfolios except the mortgage loan portfolio. The provision for loan losses on the covered loan portfolio decreased by $14.8 million from second quarter 2012, driven primarily by loans accounted for pursuant to ASC 310-30. The provision for loan losses for loans accounted under ASC 310-30 was $17.9 million for the third quarter of 2012, compared with $28.2 million for the previous quarter. The $10.3 million decrease was mostly due to certain commercial and construction loan pools which reflected higher increases in expected loss estimates for the second quarter of 2012. Overall expected losses on the covered portfolio continue to be lower than originally estimated. The provision for loan losses on covered loans accounted under ASC 310-20 was $4.7 million for the quarter ended September 30, 2012, compared with $9.2 million for the second quarter of 2012. Non-interest income Non-interest income increased by $22.0 million versus the second quarter, driven primarily by the following items: Net gain on sale of loans, including unfavorable valuation adjustments on loans held-for-sale, totaled $18.5 million for the third quarter of 2012, compared with a net loss of $15.4 million for the second quarter of 2012. The favorable variance of $33.9 million was principally due to $27.3 million in valuation adjustments recorded during the second quarter on commercial and construction loans held-for-sale in the BPPR segment as a result of the impact of revised appraisals and market indicators. Also, trading activities reflected an increase of $5.8 million in realized and unrealized gains on mortgage-backed securities, which were partially offset by an increase of $1.1 million in hedging costs. These increases were partially offset by: FDIC loss share expense of $6.7 million recognized in the third quarter of 2012, compared with FDIC loss share income of $2.6 million for the second quarter of 2012 (further detailed in Exhibit O). This variance was principally associated with the decrease of $14.8 million in the provision for loan losses and of reimbursable loan-related expenses on the covered loans which reduced the mirror offset, and higher unfavorable fair value adjustments in the true-up payment obligation, partially offset by a lower amortization of the loss share asset. The other operating income decrease of $7.2 million was driven mainly by a $2.5 million gain from the sale of the wholesale indirect general agency property and casualty business during the second quarter, a $2.0 million decline in investment banking fees from the institutional securities business and a $1.5 million consulting fee received from EVERTEC during the second quarter. Refer to table B for further details.Operating expenses Operating expenses decreased by $37.5 million versus the second quarter, driven primarily by the following items: The recognition in the second quarter of a $25.0 million loss on early extinguishment of debt primarily related to the cancellation of certain high-cost repurchase agreements. A $12.6 million decline in other operating expenses mainly due to lower costs associated with the collection efforts of the covered loan portfolio. Personnel costs declined by approximately $4.8 million, driven mainly by reduced medical costs and lower salaries expense and by the absence in the third quarter of branch staff uniform and rebranding expenses that were recorded in the second quarter. These decreases were partially offset by: Higher other real estate owned (OREO) expenses of approximately $3.5 million, driven mainly by lower gain on sales, particularly for the commercial properties at BPNA. Gain on sale of commercial properties declined by approximately $11 million. This decline was partially offset by a decline in fair value adjustments of approximately $7 million, driven mainly by the impact of revised appraisals for construction properties in BPPR during the second quarter. Non-personnel credit related costs, which includes collections, appraisals, credit related fees and OREO expenses, amounted to $18.1 million for the third quarter of 2012, compared to $13.5 million for the second quarter of 2012. The increase is principally due to an increase in OREO expenses of $3.5 million as mentioned above and in other credit costs of approximately $1.0 million. Full-time equivalent employees (“FTEs”) were 8,074 as of September 30, 2012, compared with 8,093 as of June 30, 2012 and 8,329 as of December 31, 2011. For a breakdown of operating expenses by category refer to table B.Income taxes Income tax expense amounted to $15.4 million for the quarter ended September 30, 2012, compared with an income tax benefit of $77.9 million for the second quarter of 2012, when the Corporation recognized an income tax benefit of $72.9 million as a result of the agreement signed with the P.R. Treasury which stated that covered loans are capital assets and will be taxed at the capital gain tax rate of 15%. Excluding the effect of extraordinary items, the Corporation expects an effective tax rate of approximately 16% for its Puerto Rico banking operations for 2012. Credit Quality:Non-Performing Assets               (In thousands)   30-Sep-12   30-Jun-12   30-Sep-11 Total non-performing loans held-in-portfolio, excluding covered loans   $1,550,500   $1,562,818   $1,731,671 Non-performing loans held-for-sale 108,886 178,652 259,776 Other real estate owned (“OREO”), excluding covered OREO   252,024   226,629   175,785 Total non-performing assets, excluding covered assets 1,911,410 1,968,099 2,167,232 Covered loans and OREO   208,235   209,793   86,301 Total non-performing assets   2,119,645   2,177,892   2,253,533 Net charge-offs for the quarter (excluding covered loans)   95,791   97,976   135,175   Ratios (excluding covered loans):             Non-performing loans held-in-portfolio to loans held-in-portfolio 7.47% 7.56% 8.38% Allowance for loan losses to loans held-in-portfolio 3.07 3.14 3.35 Allowance for loan losses to non-performing loans, excluding loans held-for-sale   41.04   41.50   39.99 Credit quality continues to improve as the Company addresses its non-performing loan balances and manages asset exposures. Net charge-offs in the third quarter were at the lowest level since the first quarter of 2008. Annualized net charge-offs to average non-covered loans held-in-portfolio decreased 6 basis points to 1.87% for the third quarter from 1.93% for the second quarter of 2012. The reduction was principally driven by lower net charge-offs in practically all loan portfolios, partially offset by an increase of $6.9 million in commercial net charge-offs, mainly in the BPPR reportable segment. This increase was mainly the result of the ongoing portfolio review. Refer to Table J for further information on net charge-offs and related ratios. Non-performing loans held-for-sale decreased by $70 million, or 39%, mainly driven by $59 million of certain construction loans in the BPPR reportable segment which were resolved, as part of the Company's strategic efforts to reduce non-performing loans, and the transfer of $17 million of other construction loans to other real estate owned. Non-performing loans (NPL) held-in-portfolio declined by $12 million from the second quarter of 2012 and were 34% lower than peak levels in the third quarter of 2010. The decline was primarily driven by a reduction of $18 million in non-performing construction loans, partially offset by an increase in consumer non-performing loans. Overall NPL levels continued to decline, reflecting continued improvement in the levels of problem loans. Inflows of commercial, construction, and legacy non-performing loans held-in-portfolio increased by $33 million from the second quarter, mainly associated with four commercial real estate borrowers with aggregate outstanding of $28 million in the BPPR reportable segment. Inflows to mortgage non-performing loans held-in-portfolio decreased by $5 million. OREO, excluding covered OREO, increased by $25 million from the second quarter, reflecting continuing efforts to aggressively resolve non-performing loans. The ratio of allowance for loan losses to loans held-in-portfolio, excluding covered loans, stood at 3.07% as of September 30, 2012 compared with 3.14% as of June 30, 2012. The general and specific reserves related to non-covered loans totaled $529 million and $107 million at quarter-end, compared with $561 million and $88 million, respectively, as of June 30, 2012. The decrease in the general reserve component reflects improvements in credit quality metrics, particularly in the commercial, legacy and consumer loan portfolios. The increase in the specific reserve component was mainly driven by one commercial real estate borrower and higher volume of residential mortgage troubled debt restructured loans in the BPPR reportable segment. Credit Quality by Segment       (In thousands)             BPPR (non-covered loans)   30-Sep-12   30-Jun-12   30-Sep-11 Provision for loan losses $ 69,738 $ 66,443 $ 131,058 Net charge-offs 71,041 67,422 89,666 Total non-performing loans held-in-portfolio 1,284,026 1,276,294 1,336,918 Allowance/loans held-in-portfolio   2.96%   2.99%   3.01%                 BPNA   30-Sep-12   30-Jun-12   30-Sep-11 Provision for loan losses $ 13,851 $ 15,300 $ 19,645 Net charge-offs 24,750 30,554 45,509 Total non-performing loans held-in-portfolio 266,474 286,524 394,753 Allowance/loans held-in-portfolio   3.35%   3.51%   4.19% BPPR Reportable Segment: The provision for loan losses for the non-covered loan portfolio increased by $3.3 million from the second quarter 2012 mainly due to higher net charge-offs in the commercial loan portfolio. Net charge-offs, excluding covered loans, increased by $3.6 million from the second quarter 2012, principally due to an $8.5 million increase in commercial net charge-offs. This increase was mainly the result of the ongoing portfolio review, partly offset by declines in the mortgage, construction, and consumer loan portfolios. Total non-performing loans held in portfolio, excluding covered loans, increased by $8 million from the second quarter 2012. This increase mainly reflects higher commercial and consumer NPLs by $21 million and $6 million, respectively, partly offset by a reduction of $18 million in the construction portfolio. This increase in commercial NPLs was largely driven by four commercial real estate relationships. The allowance for loan losses as a percent of non-covered loans held in portfolio decreased to 2.96% from 2.99% in second quarter 2012, reflecting reserve reductions across all loan portfolios, except residential mortgage loans, for which the reserve-to-loans ratio increased to 2.54% at September 30, 2012 compared to 2.50% at June 30, 2012. BPNA Reportable Segment: The provision for loan losses decreased by $1.4 million from second quarter 2012, reflecting lower net charge-offs, partly offset by a lower reserve release compared with the second quarter of 2012. Net charge-offs decreased by $5.8 million from the second quarter of 2012, mainly driven by reductions from the consumer, commercial, and legacy loan portfolios. Total non-performing loans held in portfolio decreased by $20 million from the second quarter of 2012, mainly related to the resolution of a certain large commercial loan relationship, as well as overall improvements in credit performance, particularly in the commercial and legacy portfolios. The allowance for loan losses as a percent of loans held in portfolio decreased to 3.35% from 3.51% in second quarter 2012, reflecting continued improvements in credit trends, particularly in the commercial and legacy loan portfolios. Financial ConditionFinancial Condition Highlights             (In thousands)   30-Sep-12   30-Jun-12   30-Sep-11 Total assets $ 36,503,366 $ 36,612,179 $ 38,275,323 Total loans held-in-portfolio (net) 23,896,548 23,916,109 24,413,388 Deposits 26,319,499 27,414,780 27,953,340 Borrowings 5,017,141 3,620,419 5,318,551 Stockholders' equity   4,068,983   4,021,237   4,012,601 Total loans held-in-portfolio, excluding covered loans, increased by $88 million from June 30, 2012, driven by performing mortgage loan purchases at BPNA of $67 million and loans purchased and originated by the Puerto Rico operations, offset by charge-offs amounting to $95.8 million and by the normal amortization of the portfolios. Refer to Table G for a breakdown by loan categories. Total loans held-for- sale decreased by $27 million, driven mainly by $59 million of certain construction loans in the BPPR reportable segment which were resolved, and the transfer of $17 million of other construction loans to other real estate owned. These decreases were offset by an increase in mortgage loans of approximately $44 million in the BPPR reportable segment related to loans originated or purchased with the intent to be sold or securitized. Trading securities decreased by approximately $191 million, driven mainly by more mortgage pool production sales and an additional sale of approximately $141 million in trading securities during the third quarter, resulting in a gain on sale of approximately $3.4 million, net of hedging costs. The Corporation executed a higher volume of mortgage-backed securities sales during the third quarter in order to take advantage of current mortgage spreads in Puerto Rico originated pools. Deposits decreased by $1.1 billion from June 30, 2012, reflecting the Corporation's substitution of maturing brokered deposits with cheaper short-term borrowings. Brokered deposits amounted to $2.6 billion as of September 30, 2012, compared to $3.1 billion as of June 30, 2012. Also, non-brokered time deposits decreased by $336 million, driven mainly by retail certificates of deposit. Demand deposits declined by $288 million, driven mainly by public funds received during the second quarter. Table G presents a breakdown of deposits by major categories. Borrowings increased by $1.4 billion as the Corporation replaced maturing brokered deposits and time deposits with short term advances and repurchase agreements at a lower cost. Stockholders' equity increased by $48 million from June 30, 2012, mainly as a result of the net income for the quarter. Refer to Table A for capital ratios and Table N for Non-GAAP reconciliations. Refer to Table C for the Statements of Condition. Outlook The Company reaffirmed its expectation for 2012 net income of between $210 million and $225 million. 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 36th 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 Friday, October 19, 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 866-713-8565 or 617-597-5324. The conference code is 49080948. A replay of the webcast will be archived in Popular's website during the respective period. A telephone replay will be available from 12:30 p.m. on Friday, October 19, 2012 to 11:59 p.m. on Friday, October 26, 2012, at 888-286-8010 or 617-801-6888. The replay passcode is 67907864. Popular, Inc.Financial Supplement to Third 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 - PUERTO RICO OPERATIONS   Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS   Table N - Reconciliation to GAAP Financial Measures   Table O - Financial Information - Westernbank Covered Loans POPULAR, INC.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable A - Selected Ratios and Other Information(Unaudited)                                 Quarter ended Quarter ended Quarter ended Nine months ended Nine months ended September 30, June 30, September 30, September 30, September 30,     2012   2012   2011   2012   2011 Net income per common share: Basic and diluted [1] $0.45 $0.63 $0.26 $1.55 $1.42   Average common shares outstanding [1] 102,451,410 102,295,113 102,166,004 102,363,099 102,147,450 Average common shares outstanding - assuming dilution [1] 102,484,960 102,410,618 102,166,004 102,666,664 102,251,720 Common shares outstanding at end of period [1] 103,097,143 102,824,323 102,447,540 103,097,143 102,447,540   Market value per common share [1] $17.45 $16.61 $15.00 $17.45 $15.00   Market Capitalization --- (In millions) $1,799 $1,708 $1,537 $1,799 $1,537   Return on average assets 0.52 % 0.73 % 0.29 % 0.59 % 0.52 %   Return on average common equity 4.81 % 6.94 % 2.81 % 5.63 % 5.33 %   Net interest margin [2] 4.37 % 4.33 % 4.45 % 4.33 % 4.36 %   Common equity per share [1] $38.98 $38.62 $38.68 $38.98 $38.68   Tangible common book value per common share (non-GAAP) [1] $32.15 $31.74 $31.72 $32.15 $31.72   Tangible common equity to tangible assets (non-GAAP) 9.26 % 9.09 % 8.65 % 9.26 % 8.65 %   Tier 1 risk-based capital [3] 16.81 % 16.31 % 15.79 % 16.81 % 15.79 %   Total risk-based capital [3] 18.09 % 17.59 % 17.07 % 18.09 % 17.07 %   Tier 1 leverage [3] 11.40 % 11.09 % 10.56 % 11.40 % 10.56 %   Tier 1 common equity to risk-weighted assets (non-GAAP) [3] 12.72 % 12.29 % 12.00 % 12.72 % 12.00 %     [1] All share and per share data has been adjusted to retroactively reflect the 1-for-10 reverse stock split effected on May 29, 2012. [2] Not on a taxable equivalent basis. [3] Capital ratios for the current quarter are estimated.   POPULAR, INC.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable B - Consolidated Statement of Operations(Unaudited)       Quarter ended   Quarter ended   Variance   Quarter ended   Variance   Nine months ended   Nine months ended (In thousands, except per share information) September 30, June 30, Q3 2012 vs. September 30, Q3 2012 vs. September 30, September 30,   2012   2012   Q2 2012   2011   Q3 2011   2012   2011 Interest income: Loans $ 387,381 $ 389,342 $ (1,961 ) $ 428,999 $ (41,618 ) $ 1,164,665 $ 1,294,834 Money market investments 862 964 (102 ) 886 (24 ) 2,774 2,759 Investment securities 39,945 43,813 (3,868 ) 51,085 (11,140 ) 128,828 157,183   Trading account securities     5,815       5,963       (148 )     10,788       (4,973 )     17,669       29,332       Total interest income     434,003       440,082       (6,079 )     491,758       (57,755 )     1,313,936       1,484,108   Interest expense: Deposits 43,000 48,514 (5,514 ) 65,868 (22,868 ) 143,193 213,419 Short-term borrowings 9,876 13,044 (3,168 ) 13,744 (3,868 ) 36,503 41,478   Long-term debt     37,701       37,324       377       42,835       (5,134 )     112,032       141,999       Total interest expense     90,577       98,882       (8,305 )     122,447       (31,870 )     291,728       396,896   Net interest income 343,426 341,200 2,226 369,311 (25,885 ) 1,022,208 1,087,212 Provision for loan losses - non-covered loans 83,589 81,743 1,846 150,703 (67,114 ) 247,846 306,177 Provision for loan losses - covered loans     22,619       37,456       (14,837 )     25,573       (2,954 )     78,284       89,735   Net interest income after provision for loan losses     237,218       222,001       15,217       193,035       44,183       696,078       691,300   Service charges on deposit accounts 45,858 46,130 (272 ) 46,346 (488 ) 138,577 138,778 Other service fees 64,784 62,027 2,757 62,664 2,120 192,850 179,623 Net gain (loss) on sale and valuation adjustments of investment securities 64 (349 ) 413 8,134 (8,070 ) (285 ) 8,044 Trading account (loss) profit (2,266 ) (7,283 ) 5,017 2,912 (5,178 ) (11,692 ) 3,287 Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale 18,495 (15,397 ) 33,892 20,294 (1,799 ) 18,569 14,756 Adjustments (expense) to indemnity reserves on loans sold (8,717 ) (5,398 ) (3,319 ) (10,285 ) 1,568 (17,990 ) (29,587 ) FDIC loss share (expense) income (6,707 ) 2,575 (9,282 ) (5,361 ) (1,346 ) (19,387 ) 49,344 Fair value change in equity appreciation instrument - - - - - - 8,323 Other operating income     4,198       11,419       (7,221 )     (2,314 )     6,512       32,699       38,350       Total non-interest income     115,709       93,724       21,985       122,390       (6,681 )     333,341       410,918   Operating expenses: Personnel costs Salaries 74,339 75,881 (1,542 ) 77,455 (3,116 ) 227,119 227,944 Commissions, incentives and other bonuses 12,800 14,359 (1,559 ) 11,630 1,170 39,885 33,548 Pension, postretirement and medical insurance 15,984 16,114 (130 ) 11,385 4,599 50,523 36,181   Other personnel costs, including payroll taxes     8,427       9,982       (1,555 )     11,254       (2,827 )     31,850       31,150   Total personnel costs 111,550 116,336 (4,786 ) 111,724 (174 ) 349,377 328,823 Net occupancy expenses 24,409 24,963 (554 ) 25,885 (1,476 ) 73,534 76,428 Equipment expenses 11,447 10,900 547 10,517 930 33,688 33,314 Other taxes 12,666 12,074 592 12,391 275 38,178 38,986 Professional fees 53,412 52,127 1,285 48,756 4,656 153,644 144,923 Communications 6,500 6,645 (145 ) 6,800 (300 ) 20,276 21,198 Business promotion 14,924 16,980 (2,056 ) 14,650 274 44,754 35,842 FDIC deposit insurance 24,173 22,907 1,266 23,285 888 72,006 68,640 Loss on early extinguishment of debt 43 25,072 (25,029 ) 109 (66 ) 25,184 8,637 Other real estate owned (OREO) 5,896 2,380 3,516 3,234 2,662 22,441 11,885 Credit and debit card processing, volume, interchange and other 5,442 4,960 482 5,416 26 15,083 13,565 Other operating expenses 17,412 30,004 (12,592 ) 17,125 287 58,631 49,990 Amortization of intangibles     2,481       2,531       (50 )     2,463       18       7,605       6,973       Total operating expenses     290,355       327,879       (37,524 )     282,355       8,000       914,401       839,204   Income (loss) before income tax     62,572       (12,154 )     74,726       33,070       29,502       115,018       263,014   Income tax expense (benefit)     15,384       (77,893 )     93,277       5,537       9,847       (46,317 )     114,664   Net income   $ 47,188     $ 65,739     $ (18,551 )   $ 27,533     $ 19,655     $ 161,335     $ 148,350   Net income applicable to common stock   $ 46,257     $ 64,809     $ (18,552 )   $ 26,602     $ 19,655     $ 158,543     $ 145,558   Net income per common share - basic [1]   $ 0.45     $ 0.63     $ (0.18 )   $ 0.26     $ 0.19     $ 1.55     $ 1.42   Net income per common share - diluted [1]   $ 0.45     $ 0.63     $ (0.18 )   $ 0.26     $ 0.19     $ 1.55     $ 1.42   [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 Third Quarter 2012 Earnings ReleaseTable C - Consolidated Statement of Financial Condition(Unaudited)             Variance September 30, June 30, September 30, Q3 2012 vs. (In thousands)   2012   2012   2011   Q2 2012 Assets: Cash and due from banks $ 477,342 $ 515,338 $ 567,141 $ (37,996 ) Money market investments 925,663 949,828 1,269,139 (24,165 ) Trading account securities, at fair value 226,918 417,469 272,939 (190,551 ) Investment securities available-for-sale, at fair value 5,120,301 5,076,797 5,226,529 43,504 Investment securities held-to-maturity, at amortized cost 122,072 124,646 128,546 (2,574 ) Other investment securities, at lower of cost or realizable value 213,389 174,287 173,569 39,102 Loans held-for-sale, at lower of cost or fair value 337,049 364,537 368,777 (27,488 ) Loans held-in-portfolio: Loans not covered under loss sharing agreements with the FDIC 20,753,853 20,665,809 20,673,886 88,044 Loans covered under loss sharing agreements with the FDIC 3,903,867 4,016,330 4,512,423 (112,463 )     Less: Allowance for loan losses     (761,172 )     (766,030 )     (772,921 )     4,858       Total loans held-in-portfolio, net     23,896,548       23,916,109       24,413,388       (19,561 ) FDIC loss share asset 1,559,057 1,631,594 1,895,059 (72,537 ) Premises and equipment, net 525,733 527,027 536,529 (1,294 ) Other real estate not covered under loss sharing agreements with the FDIC 252,024 226,629 175,785 25,395 Other real estate covered under loss sharing agreements with the FDIC 125,514 125,093 75,339 421 Accrued income receivable 133,943 122,320 134,263 11,623 Mortgage servicing assets, at fair value 158,367 155,711 157,226 2,656 Other assets 1,724,927 1,577,794 2,168,529 147,133 Goodwill 647,757 647,757 648,353 - Other intangible assets     56,762       59,243       64,212       (2,481 ) Total assets   $ 36,503,366     $ 36,612,179     $ 38,275,323     $ (108,813 ) Liabilities and Stockholders' Equity: Liabilities: Deposits: Non-interest bearing $ 5,404,470 $ 5,578,487 $ 5,527,450 $ (174,017 )     Interest bearing     20,915,029       21,836,293       22,425,890       (921,264 )     Total deposits     26,319,499       27,414,780       27,953,340       (1,095,281 ) Federal funds purchased and assets sold under agreements to repurchase 1,944,564 1,426,636 2,601,606 517,928 Other short-term borrowings 1,206,200 316,200 166,200 890,000 Notes payable 1,866,377 1,877,583 2,550,745 (11,206 ) Other liabilities     1,097,742       1,555,743       990,831       (458,001 ) Total liabilities     32,434,382       32,590,942       34,262,722       (156,560 ) Stockholders' equity: Preferred stock 50,160 50,160 50,160 - Common stock 1,031 1,028 1,025 3 Surplus 4,131,681 4,127,216 4,108,603 4,465 Accumulated deficit (54,183 ) (100,440 ) (201,770 ) 46,257 Treasury stock (270 ) (144 ) (992 ) (126 ) Accumulated other comprehensive (loss) income     (59,435 )     (56,583 )     55,575       (2,852 )     Total stockholders' equity     4,068,984       4,021,237       4,012,601       47,747   Total liabilities and stockholders' equity   $ 36,503,366     $ 36,612,179     $ 38,275,323     $ (108,813 )   Popular, Inc.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable 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) September 30, 2012 June 30, 2012 September 30, 2011 Q3 2012 vs Q2 2012 Q3 2012 vs Q3 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 $6,625   $46.6   2.81 % $6,819   $50.7   2.98 % $7,540   $62.8   3.32 % ($194)   ($4.1)   (0.17) % ($915)   ($16.2)   (0.51) % Loans not covered under loss sharing agreements with the FDIC: Commercial 10,024 123.2 4.89 10,237 126.2 4.96 10,690 134.1 4.98 (213) (3.0) (0.07) (666) (10.9) (0.09) Construction 435 3.3 3.02 495 3.4 2.78 698 2.5 1.45 (60) (0.1) 0.24 (263) 0.8 1.57 Mortgage 5,915 80.7 5.46 5,713 77.8 5.44 5,326 78.7 5.91 202 2.9 0.02 589 2.0 (0.45) Consumer 3,855 97.9 10.10 3,640 91.1 10.07 3,656 95.1 10.32 215 6.8 0.03 199 2.8 (0.22) Lease financing 540   11.7   8.67 546   11.8   8.65 572   12.8   8.93 (6)   (0.1)   0.02 (32)   (1.1)   (0.26) Total loans not covered under loss sharing agreements with the FDIC 20,769 316.8 6.08 20,631 310.3 6.04 20,942 323.2 6.14 138 6.5 0.04 (173) (6.4) (0.06) Loans covered under loss sharing agreements with the FDIC 3,952   70.6   7.12 4,129   79.1   7.69 4,557   105.8   9.23 (177)   (8.5)   (0.57) (605)   (35.2)   (2.11) Total loans 24,721   387.4   6.24 24,760   389.4   6.31 25,499   429.0   6.69 (39)   (2.0)   (0.07) (778)   (41.6)   (0.45) Total interest earning assets 31,346   $434.0   5.52 % 31,579   $440.1   5.59 % 33,039   $491.8   5.92 % (233)   ($6.1)   (0.07) % (1,693)   ($57.8)   (0.40) % Allowance for loan losses (757) (777) (749) 20 (8) Other non-interest earning assets 5,396 5,415 5,704 (19) (308) Total average assets $35,985 $36,217 $37,994 ($232) ($2,009)   Liabilities and Stockholders' Equity: Interest bearing deposits: NOW and money market $5,709 $6.2 0.43 % $5,555 $6.2 0.45 % $5,284 $7.3 0.55 % $154 $0.0 (0.02) % $425 ($1.1) (0.12) % Savings 6,561 4.5 0.27 6,562 6.2 0.38 6,307 8.6 0.54 (1) (1.7) (0.11) 254 (4.1) (0.27) Time deposits 9,003   32.3   1.43 9,752   36.1   1.49 10,876   50.0   1.82 (749)   (3.8)   (0.06) (1,873)   (17.7)   (0.39) Total interest bearing deposits 21,273 43.0 0.80 21,869 48.5 0.89 22,467 65.9 1.16 (596) (5.5) (0.09) (1,194) (22.9) (0.36) Borrowings 4,426   47.6   4.29 4,165   50.4   4.85 5,675   56.6   3.98 261   (2.8)   (0.56) (1,249)   (9.0)   0.31 Total interest bearing liabilities 25,699   90.6   1.40 26,034   98.9   1.52 28,142   122.5   1.73 (335)   (8.3)   (0.12) (2,443)   (31.9)   (0.33) Net interest spread 4.12 % 4.07 % 4.19 % 0.05 % (0.07) % Non-interest bearing deposits 5,319 5,309 5,095 10 224 Other liabilities 1,091 1,073 956 18 135 Stockholders' equity 3,876 3,801 3,801 75 75 Total average liabilities and stockholders' equity $35,985 $36,217 $37,994 ($232) ($2,009)   Net interest income / margin non-taxable equivalent basis $343.4   4.37 % $341.2   4.33 % $369.3   4.45 % $2.2   0.04 % ($25.9)   (0.08) %   Popular, Inc.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE(Unaudited)                         Nine months ended Nine months ended ($ amounts in millions; yields not on a taxable equivalent basis) September 30, 2012 September 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 $6,735     $149.3   2.96 % $7,542     $189.3   3.35 % ($807 )   ($40.0 )   (0.39 ) % Loans not covered under loss sharing agreements with the FDIC: Commercial 10,234 375.9 4.91 10,987 410.5 4.99 (753 ) (34.6 ) (0.08 ) Construction 484 13.3 3.66 788 8.5 1.45 (304 ) 4.8 2.21 Mortgage 5,698 233.9 5.47 5,070 231.5 6.09 628 2.4 (0.62 ) Consumer 3,719 281.6 10.11 3,645 281.1 10.31 74 0.5 (0.20 ) Lease financing 547     35.5   8.66 582     39.0   8.93 (35 )   (3.5 )   (0.27 ) Total loans not covered under loss sharing agreements with the FDIC 20,682 940.2 6.07 21,072 970.6 6.15 (390 ) (30.4 ) (0.08 ) Loans covered under loss sharing agreements with the FDIC 4,124     224.4   7.27 4,685     324.2   9.25 (561 )   (99.8 )   (1.98 ) Total loans 24,806     1,164.6   6.27 25,757     1,294.8   6.72 (951 )   (130.2 )   (0.45 ) Total interest earning assets 31,541     $1,313.9   5.56 % 33,299     $1,484.1   5.95 % (1,758 )   ($170.2 )   (0.39 ) % Allowance for loan losses (779 ) (744 ) (35 ) Other non-interest earning assets 5,490   5,957   (467 ) Total average assets $36,252   $38,512   ($2,260 )   Liabilities and Stockholders' Equity: Interest bearing deposits: NOW and money market $5,504 $18.5 0.45 % $5,206 $24.6 0.63 % $298 ($6.1 ) (0.18 ) % Savings 6,543 16.9 0.35 6,269 31.1 0.66 274 (14.2 ) (0.31 ) Time deposits 9,680     107.8   1.49 10,999     157.7   1.92 (1,319 )   (49.9 )   (0.43 ) Total interest bearing deposits 21,727 143.2 0.88 22,474 213.4 1.27 (747 ) (70.2 ) (0.39 ) Borrowings 4,319     148.5   4.59 6,299     183.5   3.89 (1,980 )   (35.0 )   0.70   Total interest bearing liabilities 26,046     291.7   1.50 28,773     396.9   1.84 (2,727 )   (105.2 )   (0.34 ) Net interest spread 4.06 % 4.11 % (0.05 ) % Non-interest bearing deposits 5,281 5,022 259 Other liabilities 1,113 1,013 100 Stockholders' equity 3,812   3,704   108   Total average liabilities and stockholders' equity $36,252   $38,512   ($2,260 )   Net interest income / margin non-taxable equivalent basis $1,022.2   4.33 % $1,087.2   4.36 % ($65.0 )   (0.03 ) %   Popular, Inc.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable F - Other Service Fees(Unaudited)             Quarters ended Variance Variance September 30, June 30, September 30, Q3 2012 vs. Q3 2012 vs. (In thousands)   2012   2012   2011   Q2 2012   Q3 2011 Other service fees: Debit card fees $ 8,772 $ 9,411 $ 13,075 $ (639 ) $ (4,303 ) Insurance fees 12,322 12,063 13,785 259 (1,463 ) Credit card fees 14,576 14,268 13,738 308 838 Sale and administration of investment products 9,511 9,645 9,915 (134 ) (404 ) Mortgage servicing fees, net of fair value adjustments 9,857 6,335 2,120 3,522 7,737 Trust fees 3,977 4,069 4,006 (92 ) (29 ) Processing fees 1,406 1,639 1,684 (233 ) (278 )   Other fees     4,363     4,597     4,341       (234 )       22   Total other service fees   $ 64,784   $ 62,027   $ 62,664     $ 2,757       $ 2,120     Nine months ended Variance September 30, September 30, 2012 vs. (In thousands)   2012   2011   2011           Other service fees: Debit card fees $ 27,348 $ 39,795 $ (12,447 ) Insurance fees 36,775 37,919 (1,144 ) Credit card fees 41,403 36,106 5,297 Sale and administration of investment products 28,045 24,702 3,343 Mortgage servicing fees, net of fair value adjustments 29,123 10,649 18,474 Trust fees 12,127 11,611 516 Processing fees 4,819 5,121 (302 )   Other fees     13,210     13,720     (510 )           Total other service fees   $ 192,850   $ 179,623   $ 13,227               Popular, Inc.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable G - Loans and Deposits(Unaudited)           Loans - Ending Balances Variance (In thousands)   September 30, 2012   June 30, 2012   September 30, 2011   Q3 2012 vs. Q2 2012   Q3 2012 vs. Q3 2011 Loans not covered under FDIC loss sharing agreements: Commercial $ 9,628,631 $ 9,602,815 $ 9,989,114 $ 25,816 $ (360,483 ) Construction 258,453 249,743 253,208 8,710 5,245 Legacy [1] 465,848 509,829 722,600 (43,981 ) (256,752 ) Lease financing 538,014 537,917 553,125 97 (15,111 ) Mortgage 6,022,422 5,899,973 5,466,503 122,449 555,919 Consumer     3,840,485     3,865,532     3,689,336     (25,047 )     151,149   Total non-covered loans held-in-portfolio $ 20,753,853 $ 20,665,809 $ 20,673,886 $ 88,044 $ 79,967 Loans covered under FDIC loss sharing agreements     3,903,867     4,016,330     4,512,423     (112,463 )     (608,556 ) Total loans held-in-portfolio   $ 24,657,720   $ 24,682,139   $ 25,186,309   $ (24,419 )   $ (528,589 ) Loans held-for-sale: Commercial $ 17,696 $ 18,072 $ 24,191 $ (376 ) $ (6,495 ) Construction 88,030 160,102 234,336 (72,072 ) (146,306 ) Legacy [1] 3,107 425 - 2,682 3,107 Mortgage     228,216     185,938     110,250     42,278       117,966   Total loans held-for-sale     337,049     364,537     368,777     (27,488 )     (31,728 ) Total loans   $ 24,994,769   $ 25,046,676   $ 25,555,086   $ (51,907 )   $ (560,317 ) [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)   September 30, 2012   June 30, 2012   September 30, 2011   Q3 2012 vs. Q2 2012   Q3 2012 vs. Q3 2011 Demand deposits [1] $ 6,091,400 $ 6,379,289 $ 6,149,514 $ (287,889 ) $ (58,114 ) Savings, NOW and money market deposits (non-brokered) 11,046,595 11,031,476 10,787,782 15,119 258,813 Savings, NOW and money market deposits (brokered) 455,309 433,694 100,002 21,615 355,307 Time deposits (non-brokered) 6,614,153 6,950,063 8,005,247 (335,910 ) (1,391,094 ) Time deposits (brokered CDs)     2,112,042     2,620,258     2,910,795     (508,216 )     (798,753 ) Total deposits   $ 26,319,499   $ 27,414,780   $ 27,953,340   $ (1,095,281 )   $ (1,633,841 ) [1] Includes interest and non-interest bearing deposits.   Popular, Inc.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable H - Non-Performing Assets(Unaudited)             Variance (Dollars in thousands)   September 30, 2012   As a percentage of loans HIP by category   June 30, 2012   As a percentage of loans HIP by category   September 30, 2011   As a percentage of loans HIP by category   Q3 2012 vs. Q2 2012   Q3 2012 vs. Q3 2011 Non-accrual loans:   Commercial $ 772,217 8.0 % $ 767,940 8.0 % $ 833,565 8.3 % $ 4,277 $ (61,348 ) Construction 49,933 19.3 67,538 27.0 122,844 48.5 (17,605 ) (72,911 ) Legacy [1] 48,735 10.5 54,730 10.7 104,314 14.4 (5,995 ) (55,579 ) Lease financing 4,837 0.9 5,046 0.9 3,966 0.7 (209 ) 871 Mortgage 632,052 10.5 632,899 10.7 617,723 11.3 (847 ) 14,329 Consumer     42,726   1.1       34,665     0.9       49,259     1.3       8,061       (6,533 )   Total non-performing loans held-in-portfolio, excluding covered loans 1,550,500 7.5 % 1,562,818 7.6 % 1,731,671 8.4 % (12,318 ) (181,171 ) Non-performing loans held-for-sale [2] 108,886 178,652 259,776 (69,766 ) (150,890 ) Other real estate owned (“OREO”), excluding covered OREO     252,024           226,629             175,785             25,395       76,239   Total non-performing assets, excluding covered assets 1,911,410 1,968,099 2,167,232 (56,689 ) (255,822 ) Covered loans and OREO     208,235           209,793             86,301             (1,558 )     121,934     Total non-performing assets   $ 2,119,645         $ 2,177,892           $ 2,253,533           $ (58,247 )   $ (133,888 )   Accruing loans past due 90 days or more [3]   $ 379,051         $ 322,893           $ 329,473           $ 56,158     $ 49,578     Ratios excluding covered loans: Non-performing loans held-in-portfolio to loans held-in-portfolio 7.47 %   7.56 % 8.38 % Allowance for loan losses to loans held-in-portfolio 3.07 3.14 3.35 Allowance for loan losses to non-performing loans, excluding held-for-sale       41.04           41.50             39.99                 Ratios including covered loans: Non-performing loans held-in-portfolio to loans held-in-portfolio 6.62 %   6.67 % 6.92 % Allowance for loan losses to loans held-in-portfolio 3.09 3.10 3.07 Allowance for loan losses to non-performing loans, excluding held-for-sale     46.61           46.50             44.35                   [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 September 30, 2012 consisted of $88 million in construction loans, $18 million in commercial loans, $3 million in legacy loans and $53 thousand in mortgage loans (June 30, 2012 - $160 million in construction loans, $18 million in commercial loans, $425 thousand in legacy loans and $53 thousand in mortgage loans; September 30, 2011 - $235 million in construction loans, $24 million in commercial loans, and $1 million in mortgage loans). [3] It is the Corporation's policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to nonperforming since the principal repayment is insured. These balances include $82 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of September 30, 2012.   Popular, Inc.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable I - Activity in Non-Performing Loans(Unaudited)               Commercial loans held-in-portfolio:                         Quarter ended September 30, 2012   Quarter ended June 30, 2012 (In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc. Beginning balance NPLs $ 591,792 $ 176,148 $ 767,940 $ 620,916 $ 197,762 $ 818,678 Plus: New non-performing loans 95,836 32,395 128,231 63,963 31,317 95,280 Advances on existing non-performing loans - 525 525 - 145 145 Loans transferred from held-for-sale - - - - 4,933 4,933 Other 1,139 - 1,139 - - - Less: Non-performing loans transferred to OREO (4,217 ) (10,558 ) (14,775 ) (10,043 ) (16,633 ) (26,676 ) Non-performing loans charged-off (43,711 ) (9,261 ) (52,972 ) (36,698 ) (15,385 ) (52,083 ) Loans returned to accrual status / loan collections (28,058 ) (25,561 ) (53,619 ) (46,346 ) (25,224 ) (71,570 )   Loans transferred to held-for-sale     -       (4,252 )     (4,252 )     -       (767 )     (767 ) Ending balance NPLs   $ 612,781     $ 159,436     $ 772,217     $ 591,792     $ 176,148     $ 767,940         Construction loans held-in-portfolio:                         Quarter ended September 30, 2012   Quarter ended June 30, 2012 (In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc. Beginning balance NPLs $ 55,534 $ 12,004 $ 67,538 $ 56,247 $ 13,223 $ 69,470 Plus: New non-performing loans 3,917 - 3,917 833 - 833 Advances on existing non-performing loans - 136 136 145 204 349 Less: Non-performing loans transferred to OREO (280 ) - (280 ) - - - Non-performing loans charged-off (1,366 ) - (1,366 ) (1,000 ) - (1,000 ) Loans returned to accrual status / loan collections (18,873 ) - (18,873 ) (691 ) (1,423 ) (2,114 ) Loans transferred to held-for-sale - - - - - -   Other     (1,139 )     -       (1,139 )     -       -       -   Ending balance NPLs   $ 37,793     $ 12,140     $ 49,933     $ 55,534     $ 12,004     $ 67,538         Mortgage loans held-in-portfolio:                         Quarter ended September 30, 2012   Quarter ended June 30, 2012 (In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc. Beginning balance NPLs $ 600,082 $ 32,817 $ 632,899 $ 633,517 $ 33,700 $ 667,217 Plus: New non-performing loans 157,114 9,457 166,571 165,483 6,476 171,959 Less: Non-performing loans transferred to OREO (19,522 ) (1,858 ) (21,380 ) (19,423 ) (3,107 ) (22,530 ) Non-performing loans charged-off (12,811 ) (2,541 ) (15,352 ) (20,575 ) (2,128 ) (22,703 )   Loans returned to accrual status / loan collections     (126,340 )     (4,346 )     (130,686 )     (158,920 )     (2,124 )     (161,044 ) Ending balance NPLs   $ 598,523     $ 33,529     $ 632,052     $ 600,082     $ 32,817     $ 632,899         Legacy loans held-in-portfolio:                         Quarter ended September 30, 2012   Quarter ended June 30, 2012 (In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc. Beginning balance NPLs $ - $ 54,730 $ 54,730 $ - $ 79,077 $ 79,077 Plus: New non-performing loans - 9,011 9,011 - 8,355 8,355 Advances on existing non-performing loans - - - - 1 1 Less: Non-performing loans transferred to OREO - - - - (65 ) (65 ) Non-performing loans charged-off - (7,900 ) (7,900 ) - (8,271 ) (8,271 ) Loans returned to accrual status / loan collections - (4,405 ) (4,405 ) - (9,797 ) (9,797 )   Loans transferred to held-for-sale     -       (2,701 )     (2,701 )     -       (14,570 )     (14,570 ) Ending balance NPLs   $ -     $ 48,735     $ 48,735     $ -     $ 54,730     $ 54,730     Popular, Inc.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable J - Allowance for Credit Losses, Net Charge-offs and Related Ratios(Unaudited)                   Quarter ended Quarter ended Quarter ended September 30, June 30, September 30, (Dollars in thousands)   2012   2012   2012   2012   2012   2012   2011   2011   2011     Non-covered loans   Covered loans   Total   Non-covered loans   Covered loans   Total   Non-covered loans   Covered loans   Total Balance at beginning of period $ 648,535 $ 117,495 $ 766,030 $ 664,768 $ 138,496 $ 803,264 $ 689,678 $ 57,169 $ 746,847 Provision for loan losses     83,589         22,619       106,208       81,743         37,456       119,199         150,703         25,573         176,276           732,124         140,114       872,238       746,511         175,952       922,463         840,381         82,742         923,123     Net loans charged-off (recovered): BPPR Commercial 37,019 7,013 44,032 28,564 34,652 63,216 58,508 1,278 59,786 Construction (527 ) 7,483 6,956 985 15,187 16,172 (81 ) (1,500 ) (1,581 ) Lease financing 265 - 265 8 - 8 401 - 401 Mortgage 12,431 736 13,167 14,810 4,085 18,895 7,560 65 7,625 Consumer     21,853         9       21,862       23,055         4,533       27,588         23,278         2,478         25,756     Total BPPR     71,041         15,241       86,282       67,422         58,457       125,879         89,666         2,321         91,987       BPNA Commercial 9,611 - 9,611 11,132 - 11,132 17,115 - 17,115 Construction - - - (4 ) - (4 ) 586 - 586 Lease financing - - - - - - - - - Legacy [1] 3,952 - 3,952 5,459 - 5,459 8,881 - 8,881 Mortgage 3,541 - 3,541 3,371 - 3,371 6,086 - 6,086 Consumer     7,646         -       7,646       10,596         -       10,596         12,841         -         12,841     Total BPNA     24,750         -       24,750       30,554         -       30,554         45,509         -         45,509     Total loans charged-off (recovered) - Popular, Inc.     95,791         15,241       111,032       97,976         58,457       156,433         135,175         2,321         137,496     Net write-downs (recoveries) related to loans transferred to loans held-for-sale     34         -       34       -         -       -         12,706         -         12,706     Balance at end of period   $ 636,299       $ 124,873     $ 761,172     $ 648,535       $ 117,495     $ 766,030       $ 692,500       $ 80,421       $ 772,921       POPULAR, INC. Annualized net charge-offs to average loans held-in-portfolio 1.87 % 1.82 % 1.93 % 2.56 % 2.64 % 2.20 % Provision for loan losses to net charge-offs 0.87 x 0.96 x 0.83 x 0.76 x 1.11 x 1.28 x   BPPR Annualized net charge-offs to average loans held-in-portfolio 1.92 % 1.84 % 1.85 % 2.69 % 2.49 % 1.94 % Provision for loan losses to net charge-offs 0.98 x 1.07 x 0.99 x 0.83 x 1.46 x 1.70 x   BPNA Annualized net charge-offs to average loans held-in-portfolio 1.74 % 2.15 % 3.00 % Provision for loan losses to net charge-offs                 0.56 x                 0.50 x                 0.43 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 Third Quarter 2012 Earnings ReleaseTable K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED(Unaudited)                                                             September 30, 2012 (Dollars in thousands)     Commercial     Construction   Legacy [3]   Mortgage     Lease financing   Consumer   Total [2] Specific ALLL $ 22,239 $ 191 $ - $ 62,823 $ 978 $ 21,193 $ 107,424 Impaired loans [1] $ 497,024 $ 47,897 $ 24,276 $ 560,441 $ 4,933 $ 135,204 $ 1,269,775 Specific ALLL to impaired loans [1]     4.47   %     0.40   %     -   %     11.21 %     19.83   %     15.67   %     8.46   % General ALLL $ 263,769 $ 8,945 $ 39,871 $ 92,009 $ 1,603 $ 122,678 $ 528,875 Loans held-in-portfolio, excluding impaired loans [1] $ 9,131,607 $ 210,556 $ 441,572 $ 5,461,981 $ 533,081 $ 3,705,281 $ 19,484,078 General ALLL to loans held-in-portfolio, excluding impaired loans [1]     2.89   %     4.25   %     9.03   %     1.68 %     0.30   %     3.31   %     2.71   % Total ALLL $ 286,008 $ 9,136 $ 39,871 $ 154,832 $ 2,581 $ 143,871 $ 636,299 Total non-covered loans held-in-portfolio [1] $ 9,628,631 $ 258,453 $ 465,848 $ 6,022,422 $ 538,014 $ 3,840,485 $ 20,753,853 ALLL to loans held-in-portfolio [1]     2.97   %     3.53   %     8.56   %     2.57 %     0.48   %     3.75   %     3.07   % [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, 2012, the general allowance on the covered loans amounted to $110 million, while the specific reserve amounted to $15 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.                                               June 30, 2012 (Dollars in thousands)     Commercial   Construction   Legacy   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.                                                 Variance September 30, 2012 versus June 30, 2012 (Dollars in thousands)     Commercial   Construction   Legacy   Mortgage   Lease financing   Consumer   Total   Specific ALLL $ 15,409 $ (243 ) $ (99 ) $ 3,100 $ 212 $ 1,537 $ 19,916 Impaired loans     $ 1,992       $ (13,110 )     $ (5,013 )     $ 49,782     $ (595 )     $ 1,347       $ 34,403     General ALLL $ (26,165 ) $ 237 $ (4,041 ) $ 1,910 $ (588 ) $ (3,505 ) $ (32,152 ) Loans held-in-portfolio, excluding impaired loans     $ 23,824       $ 21,820       $ (38,968 )     $ 72,667     $ 692       $ (26,394 )     $ 53,641     Total ALLL $ (10,756 ) $ (6 ) $ (4,140 ) $ 5,010 $ (376 ) $ (1,968 ) $ (12,236 ) Total non-covered loans held-in-portfolio     $ 25,816       $ 8,710       $ (43,981 )     $ 122,449     $ 97       $ (25,047 )     $ 88,044       Popular, Inc.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS(Unaudited)               As of September 30, 2012 Puerto Rico (In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total Allowance for credit losses: Specific ALLL non-covered loans $ 21,246 $ 191 $ 47,523 $ 978 $ 21,070 $ 91,008   General ALLL non-covered loans     180,178       7,208       77,567       1,603       87,690       354,246   ALLL - non-covered loans     201,424       7,399       125,090       2,581       108,760       445,254   Specific ALLL covered loans 15,294 - - - - 15,294   General ALLL covered loans     64,326       27,223       12,886       -       5,144       109,579   ALLL - covered loans     79,620       27,223       12,886       -       5,144       124,873   Total ALLL   $ 281,044     $ 34,622     $ 137,976     $ 2,581     $ 113,904     $ 570,127   Loans held-in-portfolio: Impaired non-covered loans $ 404,175 $ 35,757 $ 506,723 $ 4,933 $ 132,472 $ 1,084,060   Non-covered loans held-in-portfolio, excluding impaired loans     5,779,640       174,999       4,412,162       533,081       3,059,817       13,959,699   Non-covered loans held-in-portfolio     6,183,815       210,756       4,918,885       538,014       3,192,289       15,043,759   Impaired covered loans 120,510 - - - - 120,510   Covered loans held-in-portfolio, excluding impaired loans     2,203,852       393,101       1,106,851       -       79,553       3,783,357   Covered loans held-in-portfolio     2,324,362       393,101       1,106,851       -       79,553       3,903,867   Total loans held-in-portfolio   $ 8,508,177     $ 603,857     $ 6,025,736     $ 538,014     $ 3,271,842     $ 18,947,626       As of June 30, 2012 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                                 Variance September 30, 2012 versus June 30, 2012 (In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total Allowance for credit losses: Specific ALLL non-covered loans $ 15,749 $ (243 ) $ 2,815 $ 212 $ 1,506 $ 20,039   General ALLL non-covered loans     (18,171 )     178       1,936       (588 )     (4,697 )     (21,342 ) ALLL - non-covered loans     (2,422 )     (65 )     4,751       (376 )     (3,191 )     (1,303 ) Specific ALLL covered loans 1,016 - - - - 1,016   General ALLL covered loans     3,012       3,595       1,269       -       (1,514 )     6,362   ALLL - covered loans     4,028       3,595       1,269       -       (1,514 )     7,378   Total ALLL   $ 1,606     $ 3,530     $ 6,020     $ (376 )   $ (4,705 )   $ 6,075   Loans held-in-portfolio: Impaired non-covered loans $ 25,515 $ (13,246 ) $ 49,364 $ (595 ) $ 977 $ 62,015   Non-covered loans held-in-portfolio, excluding impaired loans     (4,980 )     22,238       55,300       692       (7,737 )     65,513   Non-covered loans held-in-portfolio     20,535       8,992       104,664       97       (6,760 )     127,528   Impaired covered loans 43,815 - - - - 43,815   Covered loans held-in-portfolio, excluding impaired loans     (50,629 )     (76,664 )     (9,625 )     -       (19,360 )     (156,278 ) Covered loans held-in-portfolio     (6,814 )     (76,664 )     (9,625 )     -       (19,360 )     (112,463 ) Total loans held-in-portfolio   $ 13,721     $ (67,672 )   $ 95,039     $ 97     $ (26,120 )   $ 15,065     Popular, Inc.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS(Unaudited)               As of September 30, 2012 U.S. Mainland (In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total Allowance for credit losses: Specific ALLL $ 993 $ - $ - $ 15,300 $ 123 $ 16,416   General ALLL     83,591       1,737       39,871       14,442       34,988       174,629   Total ALLL   $ 84,584     $ 1,737     $ 39,871     $ 29,742     $ 35,111     $ 191,045   Loans held-in-portfolio: Impaired loans $ 92,849 $ 12,140 $ 24,276 $ 53,718 $ 2,732 $ 185,715   Loans held-in-portfolio, excluding impaired loans     3,351,967       35,557       441,572       1,049,819       645,464       5,524,379   Total loans held-in-portfolio   $ 3,444,816     $ 47,697     $ 465,848     $ 1,103,537     $ 648,196     $ 5,710,094       As of June 30, 2012 U.S. Mainland (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                                 Variance September 30, 2012 versus June 30, 2012 (In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total Allowance for credit losses: Specific ALLL $ (340 ) $ - $ (99 ) $ 285 $ 31 $ (123 )   General ALLL     (7,994 )     59       (4,041 )     (26 )     1,192       (10,810 ) Total ALLL   $ (8,334 )   $ 59     $ (4,140 )   $ 259     $ 1,223     $ (10,933 ) Loans held-in-portfolio: Impaired loans $ (23,523 ) $ 136 $ (5,013 ) $ 418 $ 370 $ (27,612 )   Loans held-in-portfolio, excluding impaired loans     28,804       (418 )     (38,968 )     17,367       (18,657 )     (11,872 ) Total loans held-in-portfolio   $ 5,281     $ (282 )   $ (43,981 )   $ 17,785     $ (18,287 )   $ (39,484 )   Popular, Inc.Financial Supplement to Third Quarter 2012 Earnings ReleaseTable N - Reconciliation to GAAP Financial Measures(Unaudited)       (In thousands, except share or per share information)   September 30, 2012     June 30, 2012     September 30, 2011   Total stockholders' equity $ 4,068,984 $ 4,021,237 $ 4,012,601 Less: Preferred stock (50,160 ) (50,160 ) (50,160 ) Less: Goodwill (647,757 ) (647,757 ) (648,353 ) Less: Other intangibles     (56,762 )       (59,243 )       (64,212 )   Total tangible common equity   $ 3,314,305       $ 3,264,077       $ 3,249,876     Total assets $ 36,503,366 $ 36,612,179 $ 38,275,323 Less: Goodwill (647,757 ) (647,757 ) (648,353 ) Less: Other intangibles     (56,762 )       (59,243 )       (64,212 )   Total tangible assets   $ 35,798,847       $ 35,905,179       $ 37,562,758     Tangible common equity to tangible assets 9.26 % 9.09 % 8.65 % Common shares outstanding at end of period [1] 103,097,143 102,824,323 102,447,540 Tangible book value per common share [1]   $ 32.15       $ 31.74       $ 31.72     [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)   September 30, 2012     June 30, 2012     September 30, 2011   Common stockholders' equity $ 4,018,824 $ 3,971,077 $ 3,962,441 Less: Unrealized gains on available-for-sale securities, net of tax [1] (175,769 ) (181,207 ) (209,120 ) Less: Disallowed deferred tax assets [2] (365,954 ) (392,960 ) (222,601 ) Less: Intangible assets: Goodwill (647,757 ) (647,757 ) (648,353 ) Other disallowed intangibles (18,409 ) (22,241 ) (31,272 ) Less: Aggregate adjusted carrying value of all non-financial equity investments (1,154 ) (1,256 ) (1,525 ) Add: Pension liability adjustment, net of tax and accumulated net gains (losses) on cash flow hedges [3]   205,309         208,015         125,004     Total Tier 1 common equity   $ 3,015,090       $ 2,933,671       $ 2,974,574       [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 $153 million of the Corporation's $546 million of net deferred tax assets at September 30, 2012 (June 30, 2012 - $151 million and $573 million, respectively; September 30, 2011 - $126 million and $342 million, respectively), were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $366million of such assets at September 30, 2012 (June 30, 2012 - $393 million; September 30, 2011 - $223 million) exceeded the limitation imposed by these guidelines and, as “disallowed deferred tax assets”, were deducted in arriving at Tier 1 capital. The remaining $27 million of the Corporation's other net deferred tax assets at September 30, 2012 (June 30, 2012 - $29 million; September 30, 2011 - $7 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 Third Quarter 2012 Earnings ReleaseTable O - Financial Information - Westernbank Covered Loans(Unaudited)           Revenues Quarter ended (In thousands)   September 30, 2012   June 30, 2012   Variance Interest income on covered loans   $ 70,584     $ 79,094     $ (8,510 ) FDIC loss share income (expense): (Amortization) accretion of indemnification asset (29,184 ) (37,413 ) 8,229 80% mirror accounting on credit impairment losses [1] 18,095 29,426 (11,331 ) 80% mirror accounting on discount accretion on unfunded commitments (248 ) (248 ) - 80% mirror accounting on reimbursable expenses 7,378 10,663 (3,285 ) Other     (2,748 )     147       (2,895 )   Total FDIC loss share (expense) income     (6,707 )     2,575       (9,282 ) Other non-interest income     310       310       -   Total revenues     64,187       81,979       (17,792 ) Provision for loan losses     22,619       37,456       (14,837 ) Total revenues less provision for loan losses   $ 41,568     $ 44,523     $ (2,955 ) [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)   September 30, 2012   June 30, 2012   Variance Covered loans $ 3,952 $ 4,129 $ (177 ) FDIC loss share asset     1,578       1,700       (122 )       Activity in the carrying amount and accretable yield of covered loans accounted for under ASC 310-30   Quarter ended       September 30, 2012   June 30, 2012 (In thousands)   Accretable yield   Carrying amountof loans   Accretableyield   Carrying amountof loans Beginning balance $ 1,574,850 $ 3,729,489 $ 1,542,519 $ 3,894,905 Accretion (66,168 ) 66,168 (73,988 ) 73,988 Changes in expected cash flows (37,800 ) 106,319 Collections / charge-offs         (168,448 )         (239,404 ) Ending balance 1,470,882 3,627,209 1,574,850 3,729,489   Allowance for loan losses - ASC 310-30 covered loans         (103,547 )         (93,971 ) Ending balance, net of allowance for loan losses   $ 1,470,882     $ 3,523,662     $ 1,574,850     $ 3,635,518       Activity in the carrying amount of the FDIC indemnity asset   Quarter ended (In thousands)   September 30, 2012       June 30, 2012 Balance at beginning of period $ 1,631,594 $ 1,880,357 Amortization (29,184 ) (37,413 ) Credit impairment losses to be covered under loss sharing agreements 18,095 29,426 Decrease due to reciprocal accounting on the discount accretion on unfunded commitments (248 ) (248 ) Payments received from FDIC under loss sharing agreements (64,932 ) (241,911 ) Other adjustments attributable to FDIC loss sharing agreements         3,732           1,383   Balance at end of period       $ 1,559,057         $ 1,631,594       Activity in the remaining FDIC loss share asset accretion (amortization)   Quarter ended (In thousands)   September 30, 2012       June 30, 2012 Balance at beginning of period $ 121,308 $ 106,781 Amortization (29,184 ) (37,413 ) Impact of lower projected losses         4,300           51,940   Balance at end of period       $ 96,424         $ 121,308     Popular, Inc.Investor Relations:Jorge A. Junquera, 787-754-1685Chief Financial Officer, Senior Executive Vice PresidentorMedia Relations:Teruca Rullán, 787-281-5170 or 917-679-3596/mobileSenior Vice President, Corporate Communications