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 Popular, Inc. Announces Fourth Quarter Financial Results
   Tuesday, January 23, 2018 8:00:04 AM ET

--Fourth quarter adjusted net income of $66.2 million

--Net income of $107.7 million and adjusted net income of $276.0 million for the year 2017

--Net interest margin of 3.90% in Q4 2017, compared to 3.96% in Q3 2017

--Credit Quality (excluding "covered" loans): Non-performing loans held-in-portfolio ("NPLs") decreased by $35.0 million from Q3 2017; NPLs to loans ratio at 2.3% vs. 2.5% in Q3 2017;

--Net charge-offs ("NCOs") increased by $40.7 million; NCOs at 1.61% of average loans held-in-portfolio vs. 0.92% in Q3 2017. The fourth quarter results include $31.6 million related to the U.S. taxi medallion portfolio;

--Provision expense of $70.0 million vs. $157.7 million in Q3 2017;

--Allowance for loan losses of $590.2 million vs. $613.9 million in Q3 2017; allowance for loan losses to loans held-in-portfolio at 2.43% vs. 2.65% in Q3 2017; and



--Allowance for loan losses to NPLs at 107.1% vs. 104.8% in Q3 2017.

--Common Equity Tier 1 ratio of 16.30%, Common Equity per Share of $49.51 and Tangible Book Value per Share of $43.02 at December 31, 2017

Popular, Inc. (the "Corporation," "Popular," "we," "us," "our") (BPOP ) reported a net loss of $102.2 million for the quarter ended December 31, 2017, compared to a net income of $20.7 million for the quarter ended September 30, 2017, reflecting a non-cash income tax expense of $168.4 million during the quarter, due to the impact of the Federal Tax Cut and Jobs Act in the Corporation’s U.S. deferred tax asset.

Ignacio Alvarez, President and Chief Executive Officer, said: "While our fourth quarter and year end results reflected the impact of a significant non-cash charge to earnings due to the recently enacted federal tax reform, this charge had no impact on regulatory capital. The fourth quarter results were also impacted by the effects of hurricanes Maria and Irma. However, notwithstanding this impact, we saw growth in our net interest income on a year over year basis. I am also pleased to report that our operations have substantially recovered from the impact of the storms with 164 of our branches in P.R. and the U.S. Virgin Islands fully operational. We are also beginning to see increased loan demand in our consumer loans portfolios, specially in auto loans. We remained pleased with our U.S. operations which experienced a 16% growth in commercial loans during 2017."

Significant Events

Hurricanes Irma and Maria

During the fourth quarter of 2017, the Corporation continued normalizing its operations after the impact of Hurricanes Irma and Maria (the "hurricanes") that made landfall in September 2017. The government’s restoration of the electric and telecommunication services in the areas in which our branch network operates was the most critical factor leading the Corporation to operate under improved conditions. Restoration of the island’s electric infrastructure and the telecommunications network, as well as the speed of such restoration, remain the most critical challenges for Puerto Rico’s recovery from the hurricanes. Power generation is currently at approximately 85% of normal electricity production, up from 30% at the end of October, now reaching 67% of all customers.

The Corporation continued to assess the impact of the hurricanes on its buildings and operations, including the impact on its customers, potential credit losses and reduced revenue streams as a result of the business disruptions, as further detailed below. Additionally, relief efforts by the Corporation and our employees continued throughout the quarter, including the loan payment moratorium provided to consumer and commercial borrowers.

As of January 12, 2018, 164 of Banco Popular de Puerto Rico’s ("BPPR") bank branches are open and 558 ATMs are operating. Popular is working on a plan to reopen its remaining closed retail locations as soon as possible. In the month of December 2017, our client debit and credit card purchase activity exceeded the December 2016 activity, demonstrating significant improvement in economic activity on the island and progress towards normalized levels.

Impact on Earnings Related to Hurricanes

The following summarizes the estimated impact on the Corporation’s earnings for the third and fourth quarter of 2017 as a result of the impact caused by Hurricanes Irma and Maria, net of estimated insurance receivables of $1.1 million.

                                                                                                               Quarter ended                 Quarter ended                    Year ended
(In thousands)                                                                                            September 30, 2017             December 31, 2017             December 31, 2017
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Provision for loan losses[1]                                                                                     $    69,887                    $  (2,272)                    $   67,615
------------------------------------------------------------------------------------------------------------------ --------- -------------------- -------- -------------------- --------
Provision for indemnity reserves on loans sold                                                                   $         -                    $    3,436                    $    3,436
------------------------------------------------------------------------------------------------------------------ --------- -------------------- -------- -------------------- --------
Operating expenses:
        Personnel costs                                                    $        58                    $    1,783                    $    1,841
                                              Net occupancy expenses                                                     468                         2,437                         2,905
                                              Equipment expenses                                                           -                           531                           531
                                              Business promotion
                                                    Donations                                                          1,123                           125                         1,248
              Other sponsorship and promotions expenses         203      2,169      2,372
---------------------- ---------------------- ----------------------------------------------- -------------------- --------- -------------------- -------- -------------------- --------
        Total business promotion                              1,326      2,294      3,620
---------------------- ---------------------- ----------------------------------------------- -------------------- --------- -------------------- -------- -------------------- --------
                                              Professional fees                                                            -                           167                           167
                                              Communications                                                               -                            33                            33
                                              OREO expenses                                                            2,685                           208                         2,893
                                              Other expenses
                                                    Write-down of premises and equipment                               3,932                         (306)                         3,626
              Other operating expense                         1,033        332      1,365
---------------------- ---------------------- ----------------------------------------------- -------------------- --------- -------------------- -------- -------------------- --------
        Total other expenses                                  4,965         26      4,991
---------------------- ---------------------- ----------------------------------------------- -------------------- --------- -------------------- -------- -------------------- --------
    Total operating expenses                                                                  $     9,502                    $    7,479                    $   16,981
---------------------- ------------------------------------------------------------------------------------------- --------- -------------------- -------- -------------------- --------
Total pre-tax hurricane expenses and provision for loan and losses                                               $    79,389                    $    8,643                    $   88,032
------------------------------------------------------------------------------------------------------------------ --------- -------------------- -------- -------------------- --------
[1] Includes $2.3 million and $3.5 million in provision for covered
loans for the quarters ended December 31, 2017 and September 30,
2017, respectively.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Provision for Loan Losses

As of the end of the fourth quarter of 2017, the Corporation maintained a reserve for loan losses of $117.6 million, for non-covered loans, based on management’s best estimate of the impact of the hurricanes on the Corporation’s loan portfolios. This represents a downward adjustment of $4.6 million from the amounts initially estimated at the end of the third quarter of 2017. Also, during the fourth quarter the Corporation increased its estimate of losses associated with the hurricanes for the covered portfolio by $10.2 million resulting in an incremental provision expense of $2.3 million during the quarter. The Corporation may make further adjustments to these estimates as more information becomes available. Refer to additional information on the Credit Quality section of this earnings release.

Indemnity reserve

The Corporation services a portfolio of loans amounting to $1.5 billion at December 31, 2017 which were previously sold by the Corporation with credit recourse. The Corporation has estimated additional losses associated with the potential repurchase liability of loans subject to credit recourse as a result of the hurricanes. For the fourth quarter of 2017, the provision for indemnity reserves of $11.1 million included $3.4 million to account for these estimated losses. At December 31, 2017 the reserve for loans subject to credit recourse amounted to $58.8 million.

Operating Expenses

As detailed in the table above the results for the third and fourth quarters of 2017 include expenses related to structural damages caused by the hurricanes to the Corporation’s branches, buildings and repossessed properties. At the end of the fourth quarter, the Corporation has recorded year to date expenses related to structural damages of $6.5 million, net of the related insurance receivable of $1.1 million, a downward adjustment of $0.3 million and $6.4 million, respectively, from the initial estimates at the end of the third quarter. The results also include other operating expenses for costs such as donations, debris removal, fuel for backup generators, satellite telecommunication, personnel support and other ancillary costs associated with hurricane recovery efforts.

Revenue Reduction

In addition to the previously mentioned incremental provision and direct operating expenses, results for the third and fourth quarters of 2017 were impacted by the hurricanes in the form of a reduction in revenue resulting from reduced merchant transaction activity, the waiver of certain late fees and service charges to businesses and consumers in hurricane-affected areas, as well as the economic and operational disruption on the Corporation’s mortgage origination, servicing and loss mitigation activities. For the fourth quarter of 2017, the Corporation estimates that these revenue captions resulted in a decrease in income of approximately $20 million when compared to pre-hurricane levels, taking into account the earnings for the comparative quarter of the previous year, among other measures, primarily driven by the disruption in our operations. This compares to approximately $11 million impact during the third quarter.

While significant progress has been made in economic and transactional activity since September, the continued impact on transactional and collection based revenues will depend on the speed at which electricity, telecommunications and general merchant services can be restored across the region.

Refer to the Interest Income, Non-Interest Income and Expense sections of this earnings release for further information.

Tax Cut and Jobs Act

On December 22, 2017, the Tax Cut and Jobs Act (the "Act") was signed into law by President Trump. The Act, among other things, reduced the maximum corporate tax rate from 35% to 21% in the U.S. As a result, during the fourth quarter of 2017 the Corporation recorded an income tax expense of $168.4 million, related to the write-down of the deferred tax asset ("DTA") from its U.S. operations.

The Act contains other provisions, effective on January 1, 2018, which may impact the Corporation’s tax calculations and related income tax expense in future years. Management will continue to evaluate the impact of the Act and may make further adjustments as a result of additional analysis and additional guidance issued on the legislation.

Earnings Highlights                                                                                            
                                                                                                                                                                                                                                                                                                                                  
(Unaudited)                                                                                                                        Quarters ended                                                                                                                                                  Years ended
------------------------------------------------------------------ -------------------- ------------------------------------------------------------------------------------------------------------------------------------------                                                               -----------------------------------------------------
(Dollars in thousands, except per share information)                                                  31-Dec-17                                    30-Sep-17   31-Dec-16                                                                 31-Dec-17              31-Dec-16
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
Net interest income                                                                                                       $387,216                                                        $378,171                       $355,405                                                                $1,501,964                                $1,422,055
Provision for loan losses                                                                                                   70,001                                                         157,659                         40,924                                                                   319,682                                   171,126
Provision (reversal) for loan losses - covered loans [1]                                                  1,487                                        3,100         441                                                                     5,742                (1,110)
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
Net interest income after provision for loan losses                                                                        315,728                                                         217,412                        314,040                                                                 1,176,540                                 1,252,039
FDIC loss-share income (expense)                                                                                             2,614                                                         (3,948)                      (130,334)                                                                  (10,066)                                 (207,779)
Other non-interest income                                                                                                   83,517                                                         104,322                        130,159                                                                   429,233                                   505,715
Goodwill impairment charge                                                                                                       -                                                               -                              -                                                                         -                                     3,801
Other operating expenses                                                                                321,955                                      317,088     320,871                                                                 1,257,196              1,251,834
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
Income (loss) from continuing operations before income tax                                                                  79,904                                                             698                        (7,006)                                                                   338,511                294,340
                                                                                                                                                                                                                                                                                                 ---------- -------------------- --------------------
Income tax expense (benefit)                                                                            182,058                                     (19,966)     (1,766)                                                                   230,830                 78,784
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
(Loss) income from continuing operations                                                              (102,154)                                       20,664     (5,240)                                                                   107,681                215,556
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
Income from discontinued operations, net of tax                                                               -                                            -       1,135                                                                         -                  1,135
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
Net (loss) income                                                                                    $(102,154)                                      $20,664    $(4,105)                                                                  $107,681               $216,691
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
Net (loss) income applicable to common stock                                                         $(103,085)                                      $19,734    $(5,036)                                                                  $103,958               $212,968
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
Net (loss) income per common share - Basic                                                              $(1.01)                                        $0.19     $(0.06)                                                                     $1.02                  $2.05
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
Net (loss) income per common share - Diluted                                                            $(1.01)                                        $0.19     $(0.06)                                                                     $1.02                  $2.05
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
Net income per common share from discontinued operations - Basic                                             $-                                           $-       $0.01                                                                        $-                  $0.01
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
Net income per common share from discontinued operations - Diluted                                           $-                                           $-       $0.01                                                                        $-                  $0.01
------------------------------------------------------------------ -------------------- --------------------------------------------------------------- --------------------------------------------------------------- ---------                                                                ---------- -------------------- --------------------
[1] Covered loans represent loans acquired in the Westernbank
FDIC-assisted transaction that are covered under an FDIC
loss-sharing agreement.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Adjusted results - Non-GAAP

The Corporation prepared its Consolidated Financial Statement using accounting principles generally accepted in the U.S. ("U.S. GAAP" or the "reported basis"). In addition to analyzing the Corporation’s results on a reported basis, management monitors the "Adjusted net income" of the Corporation and excludes the impact of certain transactions on the results of its operations. Management believes that the "Adjusted net income" provides meaningful information to investors about the underlying performance of the Corporation’s ongoing operations. The "Adjusted net income" is a non-GAAP financial measure.

No adjustments are reflected for the third quarter of 2017.

(Unaudited)                                      
------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
(In thousands)                                                                          31-Dec-17
------------------------------------- -------------------- ---------------------------------------------------------------------------------------------------------
                                                                    Income tax            Impact on net
                            Pre-tax                effect                  loss
------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
U.S. GAAP Net loss                                                                                                                                       $(102,154)
Non-GAAP Adjustments:
Impact of the Tax Cut and Jobs Act[1]                      -                168,358                168,358
------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Adjusted net income (Non-GAAP)                               $66,204
------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------

[1]On December 22, 2017, the Tax Cut and Jobs Act ("the Act") was signed into law by the President of the United States. The Act, among other things, reduced the maximum federal Corporate tax rate from 35% to 21%. The adjustment reduced the DTA related to the Corporation’s U.S. operations as a result of a lower realizable benefit at the lower tax rate.

Net interest income

Net interest income for the quarter ended December 31, 2017 was $387.2 million, compared to $378.2 million for the previous quarter. Net interest margin was 3.90% for the quarter compared to 3.96% for the previous quarter.

The increase of $9.0 million in net interest income was mainly related to the following:

Positive variances:

-- Higher income from money market investments by $2.7 million due to both a higher average volume of funds available to invest related to a higher balance of deposits mainly from the Puerto Rico government deposits and higher yield by 5 basis points due to the increase in rates at the end of 2017;

-- higher income from investment securities due to higher volume related to U.S. Treasury securities acquired during the fourth quarter and higher yield on those securities. The increase in the portfolio yield of 2 basis points accounts for $1.4 million additional income for the quarter while the increase in volume represents an increase of $1.8 million;

-- higher income from commercial loans by $1.7 million due to higher volume predominantly related to the loan growth in the U.S.;

-- higher income from the consumer loans portfolio by $3.5 million or 39 basis points mainly driven by a higher yield from the credit card portfolio; and

-- lower cost of interest bearing deposits by 2 basis points, or $0.1 million, mainly NOW and money market deposits, partially offset by higher volumes from government, retail and commercial clients.

Negative variances:

-- Lower income from mortgage loans by $1.8 million, or 12 basis points mostly due to the waiver of late payment fees to clients.

BPPR’s net interest income amounted to $328.8 million for the quarter ended December 31, 2017, compared to $321.1 million for the previous quarter. The increase of $7.7 million in net interest income was mainly due to higher income from money market investments resulting from higher volumes and yields, as previously stated. Also, a higher volume and yield of investment securities driven by recent U.S. Treasury purchases contributed to the increase. Higher volume of loans also contributed to the increase in interest income, mainly higher yield from the credit card portfolio, partially offset by lower income from mortgage loans driven by the waiver of late payment fees related to the hurricanes. The net interest margin for the fourth quarter was 4.21%, a decline of 7 basis points when compared to 4.28% for the previous quarter. The decrease in net interest margin results mainly from the composition of earning assets, which has shifted towards lower yielding assets resulting from higher balances in Fed Funds, mainly due to higher balances of Puerto Rico government deposits and the acquisition of investment securities. BPPR’s earning assets yielded 4.54%, compared to 4.63% in the previous quarter, while the cost of interest bearing liabilities was 0.47%, or two basis points lower than the 0.49% in the previous quarter.

Banco Popular North America’s ("BPNA") net interest income was $72.7 million, compared to $71.5 million in the previous quarter, mainly due to higher volume of commercial and construction loans, partially offset by the related funding costs. Net interest margin decreased 4 basis points to 3.46%, compared to 3.50% for the previous quarter mostly due to higher cost of funds. U.S. earning assets yielded 4.28% compared to 4.29% in the previous quarter, while the cost of interest bearing liabilities was 1.06% compared to 1.03% in the previous quarter.

Non-interest income

Non-interest income amounted to $86.1 million for the quarter ended December 31, 2017, compared to $100.4 million for the previous quarter. The results for the quarter reflect a reduction in various revenue streams, mostly as a result of the impact of the hurricanes. The unfavorable variance of $14.2 million in non-interest income was primarily driven by:

-- Lower service charge on deposits accounts by $5.4 million due to lower transactional cash management billings primarily due to the effects of Hurricane Maria;

-- lower other service fees by $5.0 million mainly credit cards fees due to the waiver of late payment fees and debit card fees at BPPR as part of the hurricane relief efforts, largely impacted by lower interchange income resulting from lower transaction volumes due to the impact of the hurricanes;

-- lower income on mortgage banking activities by $7.1 million in part due to $2.2 million in lower mortgage servicing fees, which are recognized as loan payments are collected, due to lower mortgage payments from the moratoriums offered as part of the hurricanes relief efforts; higher unfavorable fair value adjustments on mortgage servicing rights by $2.0 million; and lower net gain on sale of loans mostly due to lower volume from securitization transactions; and

-- unfavorable variance in adjustments to indemnity reserves of $4.7 million due to an increase in the reserves for credit recourse and representation and warranties; including $3.4 million in incremental reserves estimated due to the hurricanes impact.

These negative variances were partially offset by:

-- Favorable variance on the FDIC loss-share expense by $6.6 million due to a change in the related true-up payment obligation as a result of an increase in the discount rate; and

-- higher other operating income by $1.5 million mainly due to higher earnings from investments under the equity method.

Refer to Table B for further details.

Financial Impact of the 2010 FDIC-Assisted Transaction                                                                             
 
(Unaudited)                                                                                         Quarters ended                                                                              Years ended
---------------------------------------------------------------------------------------- ---------------------------------------------------------------------------                     ---------------------------------------------------------------
(In thousands)                                                         31-Dec-17    30-Sep-17    31-Dec-16                                 31-Dec-17              31-Dec-16
---------------------------------------------------------------------------------------- ---------- -------------------- ---------- -------------------- ----------                      -------------------- -------------------- --------------------
                                                                                                                                                                                                                                    
Income Statement
------------------------------------------------------------------
Interest income on WB loans                                                                 $36,011                         $35,939                         $39,642                                  $148,033                                  $175,207
Total FDIC loss-share income (expense)                                                        2,614                         (3,948)                       (130,334)                                  (10,066)                                 (207,779)
Provision (reversal) for loan losses- WB loans                             2,501       14,751      (2,292)                                    16,336                (3,318)
---------------------------------------------------------------------------------------- ---------- -------------------- ---------- -------------------- ----------                      -------------------- -------------------- --------------------
Total revenues (expenses) less provision (reversal) for loan losses      $36,124      $17,240    $(88,400)                                  $121,631              $(29,254)
---------------------------------------------------------------------------------------- ---------- -------------------- ---------- -------------------- ----------                      -------------------- -------------------- --------------------
                                                                                                                                                                                                                                    
Balance Sheet
------------------------------------------------------------------
WB loans                                                                                 $1,706,140                      $1,705,531                      $1,861,106
FDIC loss-share asset                                                                        45,192                          48,470                          69,334
FDIC true-up payment obligation                                          164,858      166,876      153,158        
---------------------------------------------------------------------------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- -------------------- -------------------- --------------------

See additional details on accounting for the 2010 FDIC-Assisted transaction in Table O.

Operating expenses

Operating expenses amounted to $322.0 million for the fourth quarter of 2017, an increase of $4.9 million when compared to the third quarter of 2017. The increase in operating expenses was driven primarily by:

-- Higher net occupancy expense by $1.6 million mostly due to higher repair and maintenance expenses at BPPR related to the hurricanes;

-- higher professional fees by $8.8 million mainly associated with the impact of consulting and advisory engagements that carried over from Q3 into Q4 due to the hurricane related disruptions in the third quarter;

-- higher business promotion expense by $3.1 million mainly due to higher advertising and promotion expense related to disaster relief activities and communications in response to the hurricanes; and

-- higher FDIC deposit insurance by $1.2 million, mainly due to increased asset base.

These increases were partially offset by:

-- Lower OREO expenses by $4.4 million due to the write-down of $2.7 million recorded during the third quarter related to the impact of the hurricanes on commercial, construction and mortgage properties at BPPR; and

-- lower other operating expenses by $5.2 million as a result of $3.9 million of write-down of premises and equipment related to the hurricanes, recorded during the third quarter, lower printing and supplies and lower sundry losses.

Non-personnel credit-related costs, which include collections, appraisals, credit related fees and OREO expenses, amounted to $10.6 million for the fourth quarter of 2017, compared to $15.3 million for the third quarter of 2017. The decrease was principally due to lower write-downs on OREO at BPPR.

Full-time equivalent employees were 7,784 as of December 31, 2017, compared to 7,787 as of September 30, 2017.

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

Income taxes

For the quarter ended December 31, 2017, the Corporation recorded an income tax expense of $182.1 million, compared to a benefit of $20.0 million for the previous quarter. As discussed above, the results for the fourth quarter include an income tax expense of $168.4 million from the write down of the DTA of the Corporation’s U.S. operations, as a result of the Act, which reduced the maximum federal corporate tax rate from 35% to 21%. The Act contains other provisions, effective on January 1, 2018, which may impact the Corporation’s tax calculations and related income tax expense in future years. Management will continue to evaluate the impact of the Act and may make further adjustments as a result of additional analysis and additional guidance issued on the legislation. At December 31, 2017, the Corporation had a deferred tax asset amounting to $1.1 billion, net of a valuation allowance of $0.4 billion. The DTA related to the U.S. operations was $0.3 billion, net of a valuation allowance of $0.4 billion.

The income tax benefit for the third quarter reflected the impact of the losses related to the hurricanes, which resulted in a reduction of taxable income and the related effective tax rate in our Puerto Rico operations.

The effective tax rate of the Corporation is impacted by the composition and source of its taxable income. For 2018, the Corporation expects its consolidated effective tax rate to range from 21% to 24%.

Credit Quality

The Corporation continues to monitor asset quality measures given the impact of Hurricanes Irma and Maria on the loan portfolios and the moratorium granted to certain consumer and commercial borrowers, which have led to lower inflows to non-performing loans and NPL balances. The U.S. operation continued to reflect strong growth and favorable credit quality metrics, once the impact of the U.S. taxi medallion portfolio acquired from the FDIC in the assisted sale of Doral Bank is excluded. The Corporation will continue to monitor changes in credit quality trends given the continued challenges in Puerto Rico, heightened by Hurricane Maria. The following presents asset quality results for the fourth quarter of 2017:

-- Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $81.4 million quarter-over-quarter, mainly driven by lower inflows in the P.R. mortgage portfolio of $95.7 million, prompted by the payment plan implemented post Hurricane Maria.

-- Total non-performing loans held-in-portfolio decreased by $35.0 million from the third quarter of 2017, driven by lower P.R. mortgage NPLs of $31.3 million, primarily driven by payments and charge-offs, as inflows were minimal due to the payment moratorium post Hurricane Maria. At December 31, 2017, the ratio of NPLs to total loans held-in-portfolio stood at 2.3% compared to 2.5% in the third quarter of 2017.

-- Net charge-offs increased by $40.7 million from the third quarter of 2017, driven by: (i) higher U.S. commercial NCOs by $26.7 million mainly related to the U.S. taxi medallion portfolio (ii) higher P.R. commercial NCOs of $8.9 million related to two previously reserved relationships, and (iii) higher P.R. mortgage NCOs of $6.5 million impacted by the temporary suspension of collection and foreclosure activities after the hurricanes. The Corporation’s ratio of annualized net charge-offs to average non-covered loans held-in-portfolio was at 1.61%, compared to 0.92% in the third quarter of 2017. Refer to Table J for further information on net charge-offs and related ratios.

-- The allowance for loan losses decreased by $23.7 million from the third quarter of 2017 to $590.2 million. The P.R. segment ALLL decreased by $6.1 million, mostly driven by a $6.5 million decrease as a result of the annual ALLL review and recalibration. The environmental factors reserve associated with the impact of Hurricane Maria on the loan portfolios decreased by $4.6 million to $117.6 million, compared to $122.2 million in the previous quarter. Management will continue to carefully assess and review the exposure of the portfolios to hurricane-related factors, economic trends, and their effect on credit quality as additional information becomes available. The U.S. segment ALLL decreased by $17.5 million, driven by $31.6 million U.S. taxi medallion related charge-offs.

-- The general and specific reserves related to non-covered loans totaled $481.1 million and $109.1 million, respectively, at quarter-end, compared with $498.7 million and $115.2 million, respectively, as of September 30, 2017. The ratio of the allowance for loan losses to loans held-in-portfolio was 2.43% in the fourth quarter of 2017, compared to 2.65% from the previous quarter.

-- The ratio of the allowance for loan losses to NPLs held-in-portfolio increased to 107.1%, compared to 104.8% in the previous quarter.

-- The provision for loan losses for non-covered loans for the fourth quarter of 2017 decreased by $87.7 million quarter-over-quarter, as the prior quarter included $66.4 million related to the impact of Hurricane Maria on the P.R. loan portfolios. Excluding this impact, the provision for the P.R. segment increased by $4.3 million, while the U.S. provision decreased by $25.5 million. The U.S. decrease was attributed to higher impairments for the U.S. taxi medallion purchased credit impaired loans that resulted in a provision expense of $37.0 million and $10.2 million in the third and fourth quarters, respectively. The provision to net charge-offs ratio was 74.7% in the fourth quarter of 2017, compared to 297.4% in the previous quarter.

Non-Performing Assets                                                                                                                                        
(Unaudited)                                                                                                              
------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
(In thousands)                                                                                                        31-Dec-17              30-Sep-17              31-Dec-16
------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total non-performing loans held-in-portfolio, excluding covered loans                                                                          $550,957                                  $585,928                                  $557,915
Other real estate owned ("OREO"), excluding covered OREO                169,260                176,728                180,445
------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total non-performing assets, excluding covered assets                                                                        720,217                762,656                738,360
------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Covered loans and OREO                                                                                                        22,948                 24,951                 36,044
------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total non-performing assets                                                                                                 $743,165               $787,607               $774,404
------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net charge-offs for the quarter (excluding covered loans)                                                                    $93,675                $53,009                $56,216
------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
 
                                                                                                                                                                                                                        
Ratios (excluding covered loans):                                                                                        
------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Non-covered loans held-in-portfolio                                                                                                         $24,292,794                               $23,173,450                               $22,773,747
Non-performing loans held-in-portfolio to loans held-in-portfolio                                                                                 2.27%                                     2.53%                                     2.45%
Allowance for loan losses to loans held-in-portfolio                                                                                               2.43                                      2.65                                      2.24
Allowance for loan losses to non-performing loans, excluding loans                                                            107.12                 104.77                  91.47
held-for-sale
------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
 
Refer to Table H for additional information.
Provision for Loan Losses                                                                 
                                                                                                                                                                                  
(Unaudited)                                                                         Quarters ended                                         Years ended
---------------------------------------------------- -------------------- -------------------------------------------------------------------------------------------- -------------------------------
(In thousands)                                          31-Dec-17   30-Sep-17   31-Dec-16   31-Dec-17      31-Dec-16
---------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------- -------------------- --------- --------------------
Provision for loan losses:
       BPPR [1]                                                             $52,972                       $115,115                        $37,357                       $241,738             $155,860
       BPNA                                               17,029      42,544       3,567      77,944               15,266
---------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------- -------------------- --------- --------------------
Total provision for loan losses - non-covered loans      $70,001    $157,659     $40,924    $319,682             $171,126
---------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------- -------------------- --------- --------------------
Provision (reversal) for loan losses - covered loans       1,487       3,100         441       5,742              (1,110)
---------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------- -------------------- --------- --------------------
Total provision for loan losses                          $71,488    $160,759     $41,365    $325,424             $170,016
---------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------- -------------------- --------- --------------------
[1] For the year ended December 31, 2017, includes the elimination
of an incremental $6.0 million provision for loan losses related to
the inter-company transfer of a loan between BPPR and Popular, Inc.,
its bank holding company, the impact of which is eliminated in the
consolidated results of the Corporation in accordance with U.S. GAAP.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Credit Quality by Segment                                                                      
(Unaudited)
(In thousands)                                                                                                     Quarters ended
--------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------
BPPR                                                                     31-Dec-17   30-Sep-17        31-Dec-16
--------------------------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------------------
Provision for loan losses                                                                    $52,972                       $115,115                                   $37,357
Net charge-offs                                                                               59,118                         45,301                                    53,416
Total non-performing loans held-in-portfolio, excluding covered loans                        511,440                        548,666                                   532,508
Allowance / non-covered loans held-in-portfolio                             2.87%       3.06%                  2.73%
--------------------------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------------------
                                                                       
                                                                                                                                                          
                                                                                                Quarters ended
--------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------
BPNA                                                                     31-Dec-17   30-Sep-17        31-Dec-16
--------------------------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------------------
Provision for loan losses                                                                    $17,029                        $42,544                                    $3,567
Net charge-offs                                                                               34,557                          7,708                                     2,800
Total non-performing loans held-in-portfolio                                                  39,517                         37,262                                    25,407
Allowance / non-covered loans held-in-portfolio                             1.16%       1.48%                  0.75%
--------------------------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------------------
Financial Condition Highlights                                                            
                      
(Unaudited)                 
-------------------- -------------------- -------------------- -------------------- ---------------------------------------------------------------------------
(In thousands)                                                    31-Dec-17    30-Sep-17    31-Dec-16
----------------------------------------------------------------------------------- ---------- -------------------- ---------- -------------------- ----------
Cash and money market investments                                                   $5,657,976                      $6,005,649                      $3,252,611
Trading and investment securities                                                   10,482,971                       9,374,355                       8,535,530
Loans not covered under loss-sharing agreements with the FDIC                       24,292,794                      23,173,450                      22,773,747
Loans covered under loss-sharing agreements with the FDIC                              517,274                         524,854                         572,878
Total assets                                                                        44,277,337                      42,601,267                      38,661,609
Deposits                                                                            35,453,508                      34,248,936                      30,496,224
Borrowings                                                                           2,023,485                       2,147,064                       2,055,477
Total liabilities                                                                   39,173,432                      37,315,836                      33,463,652
Stockholders’ equity                   5,103,905    5,285,431    5,197,957
----------------------------------------------------------------------------------- ---------- -------------------- ---------- -------------------- ----------

Total assets increased by $1.7 billion from the third quarter of 2017, driven by:

-- An increase of $1.1 billion in investment securities available-for-sale mainly due to purchases of U.S. Treasury securities at BPPR; and

-- A net increase of $1.1 billion in non-covered loans held-in-portfolio, due to an increase of $0.8 billion in mortgage loans at BPPR due to the rebooking of loans previously pooled into GNMA securities. Under the GNMA program, issuers such as BPPR have the option but not the obligation to repurchase loans that are 90 days or more past due. For accounting purposes, these loans subject to the repurchase option are required to be reflected on the financial statements of the Bank with an offsetting liability. While the borrowers for our serviced GNMA portfolio benefited from the loan payment moratorium, the delinquency status of these loans continued to be reported to GNMA without considering the moratorium. Additionally, growth in commercial loans at BPPR and BPNA by $0.3 billion contributed to the increase.

These positive variances were partially offset by:

-- A decrease of $0.3 billion in cash and money market investments at BPPR and BPNA due in part to the deployment of liquidity into investment securities as mentioned above; and

-- A decrease of $0.3 billion in other assets primarily in accounts receivable related to maturities of U.S. Treasury securities that were settled during the quarter and a decrease in the DTA, mainly at BPNA due to the write-down taken as a result of the impact of the Act (refer to additional information on the Income Taxes section of this earnings release).

Total liabilities increased by $1.9 billion from the third quarter of 2017, principally driven by:

-- An increase of $1.2 billion in deposits mainly due to an increase in demand deposits and savings deposits at BPPR. Refer to Table G for additional information on deposits; and

-- An increase of $0.8 billion in other liabilities at BPPR due to an increase in the liability for GNMA loans sold with a repurchase option due to an increase in delinquency resulting from the moratorium, as noted above.

These positive variances were partially offset by:

-- A decrease of $0.1 billion in other short-term borrowings at BPNA.

Stockholders’ equity decreased by approximately $0.2 billion from the third quarter of 2017, mainly as a result of net loss for the quarter of $102.2 million, declared dividends of $25.5 million on common stock, $0.9 million in dividends on preferred stock, and higher unrealized losses on securities available-for-sale by $55.7 million.

Common equity tier-1 ratio ("CET1"), common equity per share and tangible book value per share were 16.30%, $49.51 and $43.02, respectively at December 31, 2017, compared to 16.63%, $51.31 and $44.79 at September 30, 2017. Refer to Table A for capital ratios.

Refer to Table C for the Statements of Financial Condition.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation those about Popular’s business, financial condition, results of operations, plans, objectives, and future performance. These statements are not guarantees of future performance, are based on management’s current expectations and, by their nature, involve risks, uncertainties, estimates and assumptions. Potential factors, some of which are beyond the Corporation’s control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. Risks and uncertainties include without limitation the effect of competitive and economic factors, and our reaction to those factors, the adequacy of the allowance for loan losses, delinquency trends, market risk and the impact of interest rate changes, capital market conditions, capital adequacy and liquidity, the effect of legal proceedings and new accounting standards on the Corporation’s financial condition and results of operations, and the impact of Hurricanes Irma and Maria on us. All statements contained herein that are not clearly historical in nature, are forward-looking, and the words "anticipate," "believe," "continues," "expect," "estimate," "intend," "project" and similar expressions, and future or conditional verbs such as "will," "would," "should," "could," "might," "can," "may" or similar expressions, are generally intended to identify forward-looking statements.

More information on the risks and important factors that could affect the Corporation’s future results and financial condition is included in our Annual Report on Form 10-K for the year ended December 31, 2016, the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017, and in our Annual Report on Form 10-K for the year ended December 31, 2017 to be filed with the SEC. Those filings are available on the Corporation’s website (www.popular.com) and on the Securities and Exchange Commission website (www.sec.gov). The Corporation assumes no obligation to update or revise any forward-looking statements or information which speak as of their respective dates.

Founded in 1893, Popular, Inc. is the leading banking institution by both assets and deposits in Puerto Rico and ranks among the top 50 U.S. banks by assets. Popular provides retail, mortgage and commercial banking services through its principal banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. In the United States, Popular has established a community-banking franchise providing a broad range of financial services and products with branches in New York, New Jersey and Florida under the name of Popular Community Bank.

Conference Call

Popular will hold a conference call to discuss its financial results today Tuesday, January 23, 2018 at 10:00 a.m. Eastern Time. The call will be open to the public and broadcasted live over the Internet, and can be accessed through the Investor Relations section of the Corporation’s website: www.popular.com.

Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through a dial-in telephone number 1-866-235-1201 or 1-412-902-4127. There is no charge to access the call.

A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Friday, February 23, 2018. The replay dial-in is: 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10115688.

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

Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
 
Table A - Selected Ratios and Other Information
 
Table B - Consolidated Statement of Operations
 
Table C - Consolidated Statement of Financial Condition
 
Table D - Consolidated Average Balances and Yield / Rate Analysis -
QUARTER
 
Table E - Consolidated Average Balances and Yield / Rate Analysis -
YEAR-TO-DATE
 
Table F - Mortgage Banking Activities and Other Service Fees
 
Table G - Loans and Deposits
 
Table H - Non-Performing Assets
 
Table I - Activity in Non-Performing Loans
 
Table J - Allowance for Credit Losses, Net Charge-offs and Related
Ratios
 
Table K - Allowance for Loan Losses - Breakdown of General and
Specific Reserves - CONSOLIDATED
 
Table L - Allowance for Loan Losses - Breakdown of General and
Specific Reserves - PUERTO RICO OPERATIONS
 
Table M - Allowance for Loan Losses - Breakdown of General and
Specific Reserves - U.S. MAINLAND OPERATIONS
 
Table N - Reconciliation to GAAP Financial Measures
 
Table O - Financial Information - Westernbank Loans
 
Table P - Adjusted Net Income for the Years Ended December 31, 2017
and 2016 (Non-GAAP)
POPULAR, INC.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table A - Selected Ratios and Other Information
(Unaudited)
                                                                                                                             
                                                                                                            
---------------------------------------------------------- -------------------- -------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------------
                                                                                                                Quarters ended                                                                               Years ended
                                            31-Dec-17     30-Sep-17     31-Dec-16         31-Dec-17              31-Dec-16
---------------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -------------------- -------------------- --------------------
Basic EPS from continuing operations                                                $(1.01)                            $0.19                          $(0.06)                                     $1.02                                     $2.05
Basic EPS from discontinued operations                                                   $-                               $-                            $0.01                                        $-                                     $0.01
Basic EPS                                                                           $(1.01)                            $0.19                          $(0.05)                                     $1.02                                     $2.06
Diluted EPS from continuing operations                                              $(1.01)                            $0.19                          $(0.06)                                     $1.02                                     $2.05
Diluted EPS from discontinued operations                                                 $-                               $-                            $0.01                                        $-                                     $0.01
Diluted EPS                                                                         $(1.01)                            $0.19                          $(0.05)                                     $1.02                                     $2.06
Average common shares outstanding                                               101,695,868                      101,652,352                      103,368,820                               101,966,429                               103,275,264
Average common shares outstanding - assuming dilution                           101,695,868                      101,763,872                      103,368,820                               102,045,336                               103,377,283
Common shares outstanding at end of period                                      102,068,981                      102,026,417                      103,790,932                               102,068,981                               103,790,932
                                                                                                                                                                                                                              
Market value per common share                                                        $35.49                           $35.94                           $43.82                                    $35.49                                    $43.82
                                                                                                                                                                                                                              
Market capitalization - (In millions)                                                $3,622                           $3,667                           $4,548                                    $3,622                                    $4,548
                                                                                                                                                                                                                              
Return on average assets                                                            (0.94%)                            0.20%                          (0.04%)                                     0.26%                                     0.58%
                                                                                          .                                .
Return on average common equity                                                     (7.67%)                            1.47%                          (0.38%)                                     1.96%                                     4.07%
                                                                                                                                                                                                                              
Net interest margin                                                                   3.90%                            3.96%                            4.02%                                     3.99%                                     4.22%
                                                                                                                                                                                                                              
Common equity per share                                                              $49.51                           $51.31                           $49.60                                    $49.51                                    $49.60
                                                                                                                                                                                                                              
Tangible common book value per common share (non-GAAP) [1]                           $43.02                           $44.79                           $43.12                                    $43.02                                    $43.12
                                                                                                                                                                                                                              
Tangible common equity to tangible assets (non-GAAP) [1]                             10.07%                           10.90%                           11.78%                                    10.07%                                    11.78%
                                                                                                                                                                                                                              
Tier 1 capital                                                                       16.30%                           16.63%                           16.48%                                    16.30%                                    16.48%
                                                                                                                                                                                                                              
Total capital                                                                        19.22%                           19.62%                           19.48%                                    19.22%                                    19.48%
                                                                                                                                                                                                                              
Tier 1 leverage                                                                      10.02%                           10.29%                           10.91%                                    10.02%                                    10.91%
                                                                                                                                                                                                                              
Common Equity Tier 1 capital                                      16.30%        16.63%        16.48%                 16.30%                 16.48%
---------------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -------------------- -------------------- --------------------
[1] Refer to Table N for reconciliation to GAAP financial measures.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
POPULAR, INC.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table B - Consolidated Statement of Operations
(Unaudited)
                                                                                      Quarters ended                  Variance     Quarter ended    Variance                    Years ended
                                                                                                                                                              Q4 2017                                                             Q4 2017                                  
(In thousands, except per share information)                                                31-Dec-17   30-Sep-17   vs. Q3 2017       31-Dec-16   vs. Q4 2016    31-Dec-17    31-Dec-16
---------------------------------------------------------------------------------------  -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Interest income:
                                   Loans                                                                        $375,981                       $371,979                           $4,002                           $363,252                          $12,729                      $1,478,765                      $1,459,720
                                   Money market investments                                                       18,262                         15,529                            2,733                              5,108                           13,154                          51,495                          16,428
                                   Investment securities                                                          50,498                         47,276                            3,222                             41,283                            9,215                         191,197                         152,011
                Trading account securities                                     592       1,099         (507)           1,401         (809)        4,487        6,414
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
                Total interest income                                      445,333     435,883         9,450         411,044        34,289    1,725,944    1,634,573
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Interest expense:
                                   Deposits                                                                       36,957                         37,058                            (101)                             34,742                            2,215                         141,864                         127,577
                                   Short-term borrowings                                                           1,990                          1,524                              466                              1,761                              229                           5,724                           7,812
                Long-term debt                                              19,170      19,130            40          19,136            34       76,392       77,129
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
                Total interest expense                                      58,117      57,712           405          55,639         2,478      223,980      212,518
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Net interest income                                                                                              387,216                        378,171                            9,045                            355,405                           31,811                       1,501,964                       1,422,055
Provision for loan losses - non-covered loans                                                                     70,001                        157,659                         (87,658)                             40,924                           29,077                         319,682                         171,126
Provision (reversal) for loan losses - covered loans                                            1,487       3,100       (1,613)             441         1,046        5,742      (1,110)
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Net interest income after provision for loan losses                                           315,728     217,412        98,316         314,040         1,688    1,176,540    1,252,039
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Service charges on deposit accounts                                                                               33,827                         39,273                          (5,446)                             39,902                          (6,075)                         153,709                         160,836
Other service fees                                                                                                48,443                         53,481                          (5,038)                             65,274                         (16,831)                         217,267                         234,770
Mortgage banking activities                                                                                      (1,853)                          5,239                          (7,092)                             14,488                         (16,341)                          25,496                          56,538
Net gain and valuation adjustments on investment securities                                                           50                            103                             (53)                                 30                               20                             334                           1,962
Other-than-temporary impairment losses on investment securities                                                        -                              -                                -                                  -                                -                         (8,299)                           (209)
Trading account (loss) profit                                                                                      (137)                            253                            (390)                            (1,627)                            1,490                           (817)                           (785)
Net (loss) gain on sale of loans, including valuation adjustments on                                                   -                          (420)                              420                                  -                                -                           (420)                           8,245
loans held-for-sale
Adjustments (expense) to indemnity reserves on loans sold                                                       (11,075)                        (6,406)                          (4,669)                            (3,051)                          (8,024)                        (22,377)                        (17,285)
FDIC loss-share income (expense)                                                                                   2,614                        (3,948)                            6,562                          (130,334)                          132,948                        (10,066)                       (207,779)
Other operating income                                                                         14,262      12,799         1,463          15,143         (881)       64,340       61,643
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
                Total non-interest income (expense)                         86,131     100,374      (14,243)           (175)        86,306      419,167      297,936
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Operating expenses:
Personnel costs
                                   Salaries                                                                       78,339                         78,976                            (637)                             77,275                            1,064                         313,394                         308,135
                                   Commissions, incentives and other bonuses                                      14,847                         16,879                          (2,032)                             17,405                          (2,558)                          70,099                          73,684
                                   Pension, postretirement and medical insurance                                  12,164                         11,535                              629                             12,481                            (317)                          47,533                          51,284
                Other personnel costs, including payroll taxes              14,822      12,246         2,576          15,292         (470)       53,204       54,373
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
                                   Total personnel costs                                                         120,172                        119,636                              536                            122,453                          (2,281)                         484,230                         487,476
Net occupancy expenses                                                                                            23,899                         22,254                            1,645                             21,883                            2,016                          89,194                          85,653
Equipment expenses                                                                                                16,465                         16,457                                8                             16,494                             (29)                          65,142                          62,225
Other taxes                                                                                                       10,815                         10,858                             (43)                             10,615                              200                          43,382                          42,304
Professional fees
                                   Collections, appraisals and other credit related fees                           3,254                          3,559                            (305)                              1,128                            2,126                          14,415                          14,607
                                   Programming, processing and other technology services                          50,496                         49,717                              779                             53,196                          (2,700)                         199,873                         205,466
                                   Legal fees, excluding collections                                               3,225                          2,928                              297                             14,702                         (11,477)                          11,763                          42,393
                Other professional fees                                     22,557      14,568         7,989          16,667         5,890       66,437       60,577
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
                                   Total professional fees                                                        79,532                         70,772                            8,760                             85,693                          (6,161)                         292,488                         323,043
Communications                                                                                                     5,224                          5,394                            (170)                              5,780                            (556)                          22,466                          23,897
Business promotion                                                                                                18,287                         15,216                            3,071                             15,473                            2,814                          58,445                          53,014
FDIC deposit insurance                                                                                             7,456                          6,271                            1,185                              5,926                            1,530                          26,392                          24,512
Other real estate owned (OREO) expenses                                                                            7,328                         11,724                          (4,396)                             13,703                          (6,375)                          48,540                          47,119
Credit and debit card processing, volume, interchange and other                                                    6,853                          7,375                            (522)                              4,817                            2,036                          26,201                          20,796
expenses
Other operating expenses
                                   Operational losses                                                             11,639                         13,222                          (1,583)                              6,579                            5,060                          39,612                          35,995
                All other                                                   11,941      15,564       (3,623)           8,619         3,322       51,726       33,656
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
                                   Total other operating expenses                                                 23,580                         28,786                          (5,206)                             15,198                            8,382                          91,338                          69,651
Amortization of intangibles                                                                                        2,344                          2,345                              (1)                              2,836                            (492)                           9,378                          12,144
Goodwill impairment charge                                                                          -           -             -               -             -            -        3,801
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
                Total operating expenses                                   321,955     317,088         4,867         320,871         1,084    1,257,196    1,255,635
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Income (loss) from continuing operations before income tax                                                        79,904                            698                           79,206                            (7,006)                           86,910                         338,511                         294,340
Income tax expense (benefit)                                                                  182,058    (19,966)       202,024         (1,766)       183,824      230,830       78,784
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
(Loss) income from continuing operations                                                    (102,154)      20,664     (122,818)         (5,240)      (96,914)      107,681      215,556
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Income from discontinued operations, net of tax                                                     -           -             -           1,135       (1,135)            -        1,135
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Net (loss) income                                                                          $(102,154)     $20,664    $(122,818)        $(4,105)     $(98,049)     $107,681     $216,691
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Net (loss) income applicable to common stock                                               $(103,085)     $19,734    $(122,819)        $(5,036)     $(98,049)     $103,958     $212,968
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Net (loss) income per common share - basic:
                                   Net (loss) income from continuing operations                                  $(1.01)                          $0.19                          $(1.20)                            $(0.06)                          $(0.95)                           $1.02                           $2.05
                Net income from discontinued operations                          -           -             -            0.01        (0.01)            -         0.01
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Net (loss) income per common share - basic                                                    $(1.01)       $0.19       $(1.20)         $(0.05)       $(0.96)        $1.02        $2.06
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Net (loss) income per common share - diluted:
                                   Net (loss) income from continuing operations                                  $(1.01)                          $0.19                          $(1.20)                            $(0.06)                          $(0.95)                           $1.02                           $2.05
                Net income from discontinued operations                          -           -             -            0.01        (0.01)            -         0.01
---------------------------------- ----------------------------------------------------- -------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Net (loss) income per common share - diluted                                                  $(1.01)       $0.19       $(1.20)         $(0.05)       $(0.96)        $1.02        $2.06
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Dividends Declared per Common Share                                                             $0.25       $0.25            $-           $0.15         $0.10        $1.00        $0.60
------------------------------------------------------------------------------------------------------------- ---------- -------------------- --------- -------------------- ----------- -------------------- ------------- -------------------- ----------- -------------------- ---------- -------------------- ----------
Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table C - Consolidated Statement of Financial Condition
(Unaudited)
                                                                                                                      Variance
                                                                                                                                                                                                                                       Q4 2017 vs.
(In thousands)                                                                                                    31-Dec-17     30-Sep-17     31-Dec-16      Q3 2017
---------------------------------------------------------------------------------------------------------------------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
Assets:
Cash and due from banks                                                                                                               $402,857                         $517,437                         $362,394                       $(114,580)
Money market investments                                                                                                             5,255,119                        5,488,212                        2,890,217                        (233,093)
Trading account securities, at fair value                                                                                               43,187                           45,951                           59,805                          (2,764)
Investment securities available-for-sale, at fair value                                                                             10,178,738                        9,061,001                        8,209,806                        1,117,737
Investment securities held-to-maturity, at amortized cost                                                                               93,821                           93,438                           98,101                              383
Other investment securities, at lower of cost or realizable value                                                                      167,225                          173,965                          167,818                          (6,740)
Loans held-for-sale, at lower of cost or fair value                                                                                    132,395                           68,864                           88,821                           63,531
Loans held-in-portfolio:
                                                Loans not covered under loss-sharing agreements with the FDIC                       24,423,427                       23,302,047                       22,895,172                        1,121,380
                                                Loans covered under loss-sharing agreements with the FDIC                              517,274                          524,854                          572,878                          (7,580)
                                                Less: Unearned income                                                                  130,633                          128,597                          121,425                            2,036
                      Allowance for loan losses                               623,426       646,913       540,651      (23,487)
----------------------- ----------------------- ------------------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
          Total loans held-in-portfolio, net                               24,186,642    23,051,391    22,805,974     1,135,251
----------------------- ----------------------- ------------------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
FDIC loss-share asset                                                                                                                   45,192                           48,470                           69,334                          (3,278)
Premises and equipment, net                                                                                                            547,142                          532,532                          543,981                           14,610
Other real estate not covered under loss-sharing agreements with the                                                                   169,260                          176,728                          180,445                          (7,468)
FDIC
Other real estate covered under loss-sharing agreements with the FDIC                                                                   19,595                           21,545                           32,128                          (1,950)
Accrued income receivable                                                                                                              213,844                          146,339                          138,042                           67,505
Mortgage servicing assets, at fair value                                                                                               168,031                          180,157                          196,889                         (12,126)
Other assets                                                                                                                         1,991,323                        2,329,927                        2,145,510                        (338,604)
Goodwill                                                                                                                               627,294                          627,294                          627,294                                -
Other intangible assets                                                                                              35,672        38,016        45,050       (2,344)
---------------------------------------------------------------------------------------------------------------------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
Total assets                                                                                                    $44,277,337   $42,601,267   $38,661,609    $1,676,070
---------------------------------------------------------------------------------------------------------------------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
Liabilities and Stockholders’ Equity:
Liabilities:
                        Deposits:
                                                Non-interest bearing                                                                $8,490,945                       $7,449,857                       $6,980,443                       $1,041,088
          Interest bearing                                                 26,962,563    26,799,079    23,515,781       163,484
----------------------- ----------------------- ------------------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
          Total deposits                                                   35,453,508    34,248,936    30,496,224     1,204,572
----------------------- ----------------------- ------------------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
Assets sold under agreements to repurchase                                                                                             390,921                          374,405                          479,425                           16,516
Other short-term borrowings                                                                                                             96,208                          240,598                            1,200                        (144,390)
Notes payable                                                                                                                        1,536,356                        1,532,061                        1,574,852                            4,295
Other liabilities                                                                                                 1,696,439       919,836       911,951       776,603
---------------------------------------------------------------------------------------------------------------------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
Total liabilities                                                                                                39,173,432    37,315,836    33,463,652     1,857,596
---------------------------------------------------------------------------------------------------------------------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
Stockholders’ equity:
Preferred stock                                                                                                                         50,160                           50,160                           50,160                                -
Common stock                                                                                                                             1,042                            1,042                            1,040                                -
Surplus                                                                                                                              4,298,503                        4,265,053                        4,255,022                           33,450
Retained earnings                                                                                                                    1,194,994                        1,350,730                        1,220,307                        (155,736)
Treasury stock                                                                                                                        (90,142)                         (90,222)                          (8,286)                               80
Accumulated other comprehensive loss, net of tax                                                                  (350,652)     (291,332)     (320,286)      (59,320)
---------------------------------------------------------------------------------------------------------------------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
          Total stockholders’ equity             5,103,905     5,285,431     5,197,957     (181,526)
----------------------- ----------------------- ------------------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
Total liabilities and stockholders’ equity                                           $44,277,337   $42,601,267   $38,661,609    $1,676,070
---------------------------------------------------------------------------------------------------------------------------------- ----------- -------------------- ----------- -------------------- ----------- -------------------- -----------
Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table D - Consolidated Average Balances and Yield / Rate Analysis
- QUARTER
(Unaudited)
                                                                                                                                                                                                                                                                                            
                                                                                                                                                  Quarter ended                                                                             Quarter ended                                                                           Quarter ended                                                                             Variance                                                                                Variance
                                                                                                                                                    31-Dec-17                                                                                 30-Sep-17                                                                               31-Dec-16                                                                          Q4 2017 vs. Q3 2017                                                                     Q4 2017 vs. Q4 2016
($ amounts in
 millions; yields not
 on a taxable                                                                                                           Average                       Income /                       Yield /                      Average                     Income /                       Yield /                      Average                     Income /                       Yield /                      Average                     Income /                       Yield /                      Average                     Income /                       Yield /
 equivalent basis)                                                                                   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                                                     $15,666      $69.3      1.76 %                    $14,483      $63.9      1.76 %                    $12,185      $47.8      1.57 %                     $1,183       $5.4         - %                     $3,481      $21.5      0.19 %
                                                                                                                     ----------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- --------------------
                     Loans not covered under loss-sharing agreements with the FDIC:
                                             Commercial                                                                   10,291                         130.0                         5.01                       10,065                         128.3                         5.06                        9,435                         116.5                         4.91                          226                           1.7                       (0.05)                          856                          13.5                         0.10
                                             Construction                                                                    859                          12.6                         5.82                          826                          12.0                         5.77                          737                           9.9                         5.36                           33                           0.6                         0.05                          122                           2.7                         0.46
                                             Mortgage                                                                      6,460                          83.0                         5.14                        6,444                          84.8                         5.26                        6,598                          88.5                         5.37                           16                         (1.8)                       (0.12)                        (138)                         (5.5)                       (0.23)
                                             Consumer                                                                      3,772                         102.6                        10.79                        3,782                          99.1                        10.40                        3,774                          97.3                        10.26                         (10)                           3.5                         0.39                          (2)                           5.3                         0.53
                                             Lease financing                                                                 781       11.8      6.04       750       11.9      6.37       688       11.4      6.64        31      (0.1)    (0.33)        93        0.4    (0.60)  
                                                                                                                     ----------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- --------------------
                                             Total loans (excluding WB loans)                                             22,163                         340.0                         6.10                       21,867                         336.1                         6.11                       21,232                         323.6                         6.07                          296                           3.9                       (0.01)                          931                          16.4                         0.03
                     WB loans                                                                                              1,667       36.0      8.59     1,681       35.9      8.50     1,845       39.6      8.56      (14)        0.1      0.09     (178)      (3.6)      0.03  
                                                                                                                     ----------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- --------------------
                     Total loans                                                                                          23,830      376.0      6.27    23,548      372.0      6.28    23,077      363.2      6.27       282        4.0    (0.01)       753       12.8         -  
                                                                                                                     ----------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- --------------------
                     Total interest earning assets                                                                       $39,496     $445.3      4.49 %                    $38,031     $435.9      4.56 %                    $35,262     $411.0      4.65 %                     $1,465       $9.4    (0.07) %                     $4,234      $34.3    (0.16) %
                                                                                                                     ----------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- --------------------
                                             Allowance for loan losses                                                     (644)                                                                                   (566)                                                                                   (562)                                                                                    (78)                                                                                    (82)
                                             Other non-interest earning assets                                             4,400                                                                                   4,238                                                                                   4,386                                                                                     162                                                                                      14
                                                                                                                     -----------                                                                                 -------                                                                                 -------                                                                                 -------                                                                                 -------
                     Total average assets                                                                                $43,252                                                                                 $41,703                                                                                 $39,086                                                                                  $1,549                                                                                  $4,166
                                                                                                                     -----------                                                                                 -------                                                                                 -------                                                                                 -------                                                                                 -------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Liabilities and Stockholders’ Equity:
                     Interest bearing deposits:
                                             NOW and money market                                                        $11,023                         $10.1                         0.36 %                    $10,465                         $10.3                         0.39 %                     $8,007                          $8.3                         0.41 %                       $558                        ($0.2)                       (0.03) %                     $3,016                          $1.8                       (0.05) %
                                             Savings                                                                       8,457                           5.3                         0.25                        8,260                           5.0                         0.24                        7,796                           4.7                         0.24                          197                           0.3                         0.01                          661                           0.6                         0.01
                                             Time deposits                                                                 7,545       21.6      1.13     7,543       21.8      1.14     7,858       21.7      1.10         2      (0.2)    (0.01)     (313)      (0.1)      0.03  
                                                                                                                     ----------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- --------------------
                                             Total interest-bearing deposits                                              27,025                          37.0                         0.54                       26,268                          37.1                         0.56                       23,661                          34.7                         0.58                          757                         (0.1)                       (0.02)                        3,364                           2.3                       (0.04)
                     Borrowings                                                                                            2,060       21.1      4.11     1,982       20.6      4.17     2,212       20.9      3.78        78        0.5    (0.06)     (152)        0.2      0.33  
                                                                                                                     ----------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- --------------------
                                             Total interest-bearing liabilities                                           29,085       58.1      0.80    28,250       57.7      0.81    25,873       55.6      0.86       835        0.4    (0.01)     3,212        2.5    (0.06)  
                                                                                                                     ----------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- -------------------- ------- -------------------- -------- -------------------- ------- --------------------
                                             Net interest spread                                                                                                                       3.69 %                                                                                  3.75 %                                                                                  3.79 %                                                                                (0.06) %                                                                                (0.10) %
                                                                                                                                                                                    -------                                                                                 -------                                                                                 -------                                                                                 -------                                                                                 -------
                     Non-interest bearing deposits                                                                         7,880                                                                                   7,235                                                                                   6,976                                                                                     645                                                                                     904
                     Other liabilities                                                                                       908                                                                                     832                                                                                     901                                                                                      76                                                                                       7
                     Liabilities from discontinued operations                                                                  -                                                                                       -                                                                                       2                                                                                       -                                                                                     (2)
                     Stockholders’ equity                                                                                  5,379                                                                                   5,386                                                                                   5,334                                                                                     (7)                                                                                      45
                                                                                                                     -----------                                                                                 -------                                                                                 -------                                                                                 -------                                                                                 -------
                                             Total average liabilities and stockholders’ equity                          $43,252                                                                                 $41,703                                                                                 $39,086                                                                                  $1,549                                                                                  $4,166
                                                                                                                     -----------                                                                                 -------                                                                                 -------                                                                                 -------                                                                                 -------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Net interest income / margin non-taxable equivalent basis                                                                                               $387.2      3.90 %                                                   $378.2      3.96 %                                                   $355.4      4.02 %                                                     $9.0    (0.06) %                                                    $31.8    (0.12) %
                                                                                                                                                      -------- -------------------- -------                                                   -------- -------------------- -------                                                   -------- -------------------- -------                                                   -------- -------------------- -------                                                   -------- -------------------- -------
Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table E - Consolidated Average Balances and Yield / Rate Analysis
- YEAR-TO-DATE
(Unaudited)
                                                                                                                                                           
                                                                                                                                                          Year ended                                                                                 Year ended
                                                                                                                                                           31-Dec-17                                                                                  31-Dec-16                                                             Variance
                                                                                                                               Average                     Income /                       Yield /                         Average                     Income /                       Yield /    Average                     Income /                       Yield /
($ amounts in millions; yields not on a taxable equivalent basis)                                           balance   Expense     Rate                           balance   Expense     Rate      balance   Expense     Rate
----------------------------------------------------------------------------------------------------------------------------- ------- -------------------- -------- -------------------- -------                         ------- -------------------- -------- -------------------- -------    ------- -------------------- -------- -------------------- -------
Assets:
Interest earning assets:
                      Money market, trading and investment securities                                                         $14,157     $247.2      1.75 %                       $10,651     $174.9      1.64 %   $3,506      $72.3      0.11 %
                                                                                                                              ------- -------------------- -------- -------------------- -------                         ------- -------------------- -------- -------------------- -------    ------- -------------------- -------- -------------------- -------
                      Loans not covered under loss-sharing agreements with the FDIC:
                                                      Commercial                                                                9,971                         499.4                         5.01                           9,203                         451.8                         4.91        768                          47.6                         0.10
                                                      Construction                                                                829                          46.8                         5.64                             726                          39.0                         5.38        103                           7.8                         0.26
                                                      Mortgage                                                                  6,506                         343.3                         5.28                           6,702                         355.4                         5.30      (196)                        (12.1)                       (0.02)
                                                      Consumer                                                                  3,739                         394.1                        10.54                           3,823                         394.0                        10.31       (84)                           0.1                         0.23
                                                      Lease financing                                                             742       47.1      6.35                             660       44.3      6.71         82        2.8    (0.36)
                                                                                                                              ------- -------------------- -------- -------------------- -------                         ------- -------------------- -------- -------------------- -------    ------- -------------------- -------- -------------------- -------
                                                      Total loans (excluding WB loans)                                         21,787                       1,330.7                         6.11                          21,114                       1,284.5                         6.08        673                          46.2                         0.03
                      WB loans                                                                                                  1,724      148.0      8.59                           1,949      175.2      8.99      (225)     (27.2)    (0.40)
                                                                                                                              ------- -------------------- -------- -------------------- -------                         ------- -------------------- -------- -------------------- -------    ------- -------------------- -------- -------------------- -------
                      Total loans                                                                                              23,511    1,478.7      6.29                          23,063    1,459.7      6.33        448       19.0    (0.04)
                                                                                                                              ------- -------------------- -------- -------------------- -------                         ------- -------------------- -------- -------------------- -------    ------- -------------------- -------- -------------------- -------
                      Total interest earning assets                                                                           $37,668   $1,725.9      4.58 %                       $33,714   $1,634.6      4.85 %   $3,954      $91.3    (0.27) %
                                                                                                                              ------- -------------------- -------- -------------------- -------                         ------- -------------------- -------- -------------------- -------    ------- -------------------- -------- -------------------- -------
                                                      Allowance for loan losses                                                 (572)                                                                                      (548)                                                                  (24)
                                                      Other non-interest earning assets                                         4,308                                                                                      4,448                                                                 (140)
                                                                                                                              -------                                                                                    -------                                                               -------
                      Total average assets                                                                                    $41,404                                                                                    $37,614                                                                $3,790
                                                                                                                              -------                                                                                    -------                                                               -------
                                                                                                                                                                                                                                                                                                                                                                   
Liabilities and Stockholders’ Equity:
                      Interest bearing deposits:
                                                      NOW and money market                                                    $10,116                         $37.5                         0.37 %                        $7,020                         $27.6                         0.39 %   $3,096                          $9.9                       (0.02) %
                                                      Savings                                                                   8,103                          20.2                         0.25                           7,528                          18.0                         0.24        575                           2.2                         0.01
                                                      Time deposits                                                             7,625       84.1      1.10                           7,910       82.0      1.04      (285)        2.1      0.06
                                                                                                                              ------- -------------------- -------- -------------------- -------                         ------- -------------------- -------- -------------------- -------    ------- -------------------- -------- -------------------- -------
                                                      Total interest-bearing deposits                                          25,844                         141.8                         0.55                          22,458                         127.6                         0.57      3,386                          14.2                       (0.02)
                      Borrowings                                                                                                2,001       82.1      4.10                           2,339       84.9      3.63      (338)      (2.8)      0.47
                                                                                                                              ------- -------------------- -------- -------------------- -------                         ------- -------------------- -------- -------------------- -------    ------- -------------------- -------- -------------------- -------
                                                      Total interest-bearing liabilities                                       27,845      223.9      0.80                          24,797      212.5      0.86      3,048       11.4    (0.06)
                                                                                                                              ------- -------------------- -------- -------------------- -------                         ------- -------------------- -------- -------------------- -------    ------- -------------------- -------- -------------------- -------
                                                      Net interest spread                                                                                                                   3.78 %                                                                                     3.99 %                                                              (0.21) %
                                                                                                                                                                                         -------                                                                                    -------                                                               -------
                      Non-interest bearing deposits                                                                             7,338                                                                                      6,608                                                                   730
                      Other liabilities                                                                                           876                                                                                        928                                                                  (52)
                      Liabilities from discontinued operations                                                                      -                                                                                          2                                                                   (2)
                      Stockholders’ equity                                                                                      5,345                                                                                      5,279                                                                    66
                                                                                                                              -------                                                                                    -------                                                               -------
                                                      Total average liabilities and stockholders’ equity                      $41,404                                                                                    $37,614                                                                $3,790
                                                                                                                              -------                                                                                    -------                                                               -------
                                                                                                                                                                                                                                                                                                                                                                   
Net interest income / margin non-taxable equivalent basis                                                                                                  $1,502.0      3.99 %                                                    $1,422.1      4.22 %                                  $79.9    (0.23) %
                                                                                                                                                           -------- -------------------- -------                                                      -------- -------------------- -------                                 -------- -------------------- -------
                                                                                                                                                                                                                                                 
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table F - Mortgage Banking Activities and Other Service Fees
(Unaudited)
 
Mortgage Banking Activities
                                                                                                                                                   Quarters ended                                                                             Variance                                                                                  Years ended                                                                          Variance
                                                                                                                                                                                                                       Q4 2017                                           Q4 2017                                                                                                                                                               2017 vs.
(In thousands)                                                                                      31-Dec-17   30-Sep-17   31-Dec-16  vs. Q3 2017                    vs. Q4 2016             31-Dec-17                      31-Dec-16                                                     2016
-----------------------------------------------------------------------------------------------  -------------------- --------- -------------------- --------- -------------------- --------- -------------------- ----------- -------------------- --------------------------   -------------------- --------------------------   -------------------- --------------------------   -------------------- -------------------------------------------
Mortgage servicing fees, net of fair value adjustments:
                                   Mortgage servicing fees                                                               $9,815                        $12,012                        $14,211                         $(2,197)                                          $(4,396)                                           $48,300                                           $58,208                                                           $(9,908)
                Mortgage servicing rights fair value adjustments                 (12,257)    (10,262)     (6,457)       (1,995)                        (5,800)                       (36,519)                       (25,336)                                        (11,183)
---------------------------------- ------------------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------- -------------------- ----------- -------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------
Total mortgage servicing fees, net of fair value adjustments                                         (2,442)       1,750       7,754       (4,192)                       (10,196)                         11,781                         32,872                                        (21,091)
--------------------------------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------- -------------------- ----------- -------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------
Net gain on sale of loans, including valuation on loans held-for-sale                                    213       4,244       2,535       (4,031)                        (2,322)                         17,088                         26,976                                         (9,888)
--------------------------------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------- -------------------- ----------- -------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------
Trading account profit (loss):
                                   Unrealized gains (losses) on outstanding derivative positions                            288                          (147)                             43                              435                                               245                                               184                                               (1)                                                                185
                Realized gains (losses) on closed derivative positions                 88       (608)       4,156           696                        (4,068)                        (3,557)                        (3,309)                                           (248)
---------------------------------- ------------------------------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------- -------------------- ----------- -------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------
Total trading account profit (loss)                                                                      376       (755)       4,199         1,131                        (3,823)                        (3,373)                        (3,310)                                            (63)
--------------------------------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------- -------------------- ----------- -------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------
Total mortgage banking activities                                                                   $(1,853)      $5,239     $14,488      $(7,092)                      $(16,341)                        $25,496                        $56,538                                       $(31,042)
--------------------------------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------- -------------------- ----------- -------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------
                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                    
Other Service Fees
                                                                                                                                                   Quarters ended                                                                                         Variance                                                                                               Years ended                                                             Variance
                                                                                                                                                                                                                                                Q4 2017                                           Q4 2017                                                                                                                                      2017 vs.
(In thousands)                                                                                      31-Dec-17   30-Sep-17   31-Dec-16                           vs. Q3 2017                    vs. Q4 2016             31-Dec-17                      31-Dec-16                            2016
-----------------------------------------------------------------------------------------------  -------------------- --------- -------------------- --------- -------------------- --------- -------------------- ----------------------------------   -------------------- --------------------------   -------------------- --------------------------   -------------------- --------------------------   -------------------- --------------------
Other service fees:
    Debit card fees                                                                                                      $9,243                        $10,359                        $12,088                                                  $(1,116)                                          $(2,845)                                           $42,721                                           $46,241                                  $(3,520)
    Insurance fees                                                                                                       11,538                         13,076                         20,804                                                   (1,538)                                           (9,266)                                            50,948                                            63,482                                  (12,534)
    Credit card fees                                                                                                     13,304                         16,699                         18,324                                                   (3,395)                                           (5,020)                                            67,584                                            70,526                                   (2,942)
    Sale and administration of investment products                                                                        5,581                          5,496                          5,652                                                        85                                              (71)                                            21,958                                            21,450                                       508
    Trust fees                                                                                                            5,297                          4,817                          4,782                                                       480                                               515                                            19,972                                            18,811                                     1,161
    Other fees                                                                                         3,480       3,034       3,624                                    446                          (144)                         14,084                         14,260                  (176)
--------------------------------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------- -------------------- --------------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- --------------------
Total other service fees                                                                             $48,443     $53,481     $65,274                               $(5,038)                      $(16,831)                       $217,267                       $234,770              $(17,503)
--------------------------------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------- -------------------- --------------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- --------------------
Popular, Inc.                                                                                                                                        
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table G - Loans and Deposits
(Unaudited)
                                                                                                                                                                                                                                                      
Loans - Ending Balances
                                                                                                                                                                                                                                      Variance
                                                                                                                                                                                                           ---------------------------------------------------------------
                                                                                                                                                                                                                    Q4 2017 vs.                               Q4 2017 vs.
(In thousands)                                                       31-Dec-17              30-Sep-17              31-Dec-16                Q3 2017                Q4 2016
----------------------------------------------------- --------------------- --------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Loans not covered under FDIC loss-sharing agreements:
   Commercial                                                                         $11,488,861                               $11,227,095                               $10,798,507                                  $261,766                                  $690,354
   Construction                                                                           880,029                                   823,325                                   776,300                                    56,704                                   103,729
   Legacy [1]                                                                              32,980                                    37,508                                    45,293                                   (4,528)                                  (12,313)
   Lease financing                                                                        809,990                                   754,881                                   702,893                                    55,109                                   107,097
   Mortgage                                                                             7,270,407                                 6,529,235                                 6,696,361                                   741,172                                   574,046
   Consumer                                                          3,810,527              3,801,406              3,754,393                  9,121                 56,134
----------------------------------------------------- --------------------- --------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total non-covered loans held-in-portfolio                                             $24,292,794                               $23,173,450                               $22,773,747                                $1,119,344                                $1,519,047
Loans covered under FDIC loss-sharing agreements                       517,274                524,854                572,878                (7,580)               (55,604)
----------------------------------------------------- --------------------- --------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total loans held-in-portfolio                                      $24,810,068            $23,698,304            $23,346,625             $1,111,764             $1,463,443
----------------------------------------------------- --------------------- --------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Loans held-for-sale:
   Mortgage                                                            132,395                 68,864                 88,821                 63,531                 43,574
----------------------------------------------------- --------------------- --------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total loans held-for-sale                                             $132,395                $68,864                $88,821                $63,531                $43,574
----------------------------------------------------- --------------------- --------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total loans                                                        $24,942,463            $23,767,168            $23,435,446             $1,175,295             $1,507,017
----------------------------------------------------- --------------------- --------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
[1] The legacy portfolio is comprised of commercial loans,
construction loans and lease financings related to certain lending
products exited by the Corporation as part of restructuring efforts
carried out in prior years at the BPNA segment.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Deposits - Ending Balances
                                                                                                                                                                                                                                      Variance
                                                                                                                                                                                                           ---------------------------------------------------------------
                                                                                                                                                                                                                 Q4 2017 vs. Q3                             Q4 2017 vs.Q4
(In thousands)                                                       31-Dec-17              30-Sep-17              31-Dec-16                   2017                   2016
----------------------------------------------------- --------------------- --------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Demand deposits [1]                                                                   $12,460,081                               $11,576,048                                $9,053,897                                  $884,033                                $3,406,184
Savings, NOW and money market deposits (non-brokered)                                  15,054,242                                14,638,191                                13,327,298                                   416,051                                 1,726,944
Savings, NOW and money market deposits (brokered)                                         424,307                                   422,174                                   405,487                                     2,133                                    18,820
Time deposits (non-brokered)                                                            7,411,140                                 7,446,922                                 7,486,717                                  (35,782)                                  (75,577)
Time deposits (brokered CDs)                                           103,738                165,601                222,825               (61,863)              (119,087)
----------------------------------------------------- --------------------- --------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total deposits                                                     $35,453,508            $34,248,936            $30,496,224             $1,204,572             $4,957,284
----------------------------------------------------- --------------------- --------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
[1] Includes interest and non-interest bearing demand deposits.                                                  
---------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table H - Non-Performing Assets
(Unaudited)
                                                                                                                                                                                                                                                                                 Variance
                                                                                                                                                                                                                                                                         ---------------------------------------------------------------
                                                                                                                                  As a % of                                           As a % of                                           As a % of                                            
                                                                                                                               loans HIP by                                        loans HIP by                                        loans HIP by                               Q4 2017 vs.                               Q4 2017 vs.
(Dollars in thousands)                                                                    31-Dec-17             category   30-Sep-17             category   31-Dec-16             category                Q3 2017                Q4 2016
-------------------------------------------------------------------------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------------------
Non-accrual loans:
Commercial                                                                                                    $165,065                  1.4 %                     $165,352                  1.5 %                     $163,348                  1.5 %                                  $(287)                                    $1,717
Construction                                                                                                         -                    -                             99                    -                              -                    -                                      (99)                                         -
Legacy [1]                                                                                                       3,039                  9.2                          3,268                  8.7                          3,337                  7.4                                     (229)                                     (298)
Lease financing                                                                                                  2,974                  0.4                          2,684                  0.4                          3,062                  0.4                                       290                                      (88)
Mortgage                                                                                                       321,549                  4.4                        352,315                  5.4                        329,907                  4.9                                  (30,766)                                   (8,358)
Consumer                                                                                     58,330                  1.5      62,210                  1.6      58,261                  1.6                (3,880)                     69
-------------------------------------------------------------------------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------------------
Total non-performing loans held-in-
    portfolio, excluding covered loans                                                                         550,957                  2.3 %                      585,928                  2.5 %                      557,915                  2.5 %                                (34,971)                                   (6,958)
Other real estate owned ("OREO"),
excluding covered OREO                                                                      169,260       176,728       180,445                  (7,468)               (11,185)
-------------------------------------------------------------------------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------------------
Total non-performing assets,
excluding covered assets                                                                                       720,217                                             762,656                                             738,360                                                       (42,439)                                  (18,143)
Covered loans and OREO                                                                       22,948        24,951        36,044                  (2,003)               (13,096)
-------------------------------------------------------------------------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------------------
Total non-performing assets                                                                $743,165      $787,607      $774,404                $(44,442)              $(31,239)
-------------------------------------------------------------------------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------------------
Accruing loans past due 90 days or more [3]                                              $1,225,149      $465,127      $426,652                 $760,022               $798,497
-------------------------------------------------------------------------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------------------
Ratios excluding covered loans:
Non-performing loans held-in-portfolio
   to loans held-in-portfolio                                                                                     2.27 %                                              2.53 %                                              2.45 %
Allowance for loan losses to loans
    held-in-portfolio                                                                                             2.43                                                2.65                                                2.24
Allowance for loan losses to
    non-performing loans, excluding loans
    held-for-sale                                                                            107.12        104.77         91.47          
-------------------------------------------------------------------------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------------------
Ratios including covered loans:
Non-performing assets to total assets                                                                             1.68 %                                              1.85 %                                              2.00 %
Non-performing loans held-in-portfolio
   to loans held-in-portfolio                                                                                     2.23                                                2.49                                                2.41
Allowance for loan losses to loans
    held-in-portfolio                                                                                             2.51                                                2.73                                                2.32
Allowance for loan losses to non-performing
 loans, excluding loans held-for-sale                                                        112.47        109.77         96.23          
-------------------------------------------------------------------------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------------------
[1] The legacy portfolio is comprised of commercial loans,
construction loans and lease financings related to certain lending
products exited by the Corporation as part of restructuring efforts
carried out in prior years at the BPNA segment.
[2] There were no non-performing loans held-for-sale as of December
31, 2017, September 30, 2017 and December 31, 2016.
[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 non-performing since
the principal repayment is insured. The balance of these loans
increased by $760 million due mainly to the rebooking of loans
previously pooled into GNMA securities. Under the GNMA program,
issuers such as BPPR have the option but not the obligation to
repurchase loans that are 90 days or more past due. For accounting
purposes, these loans subject to the repurchase option are required
to be reflected on the financial statements of the Bank with an
offsetting liability. While the borrowers for our serviced GNMA
portfolio benefited from the loan payment moratorium, the
delinquency status of these loans continued to be reported to GNMA
without considering the moratorium. These balances include $178
million of residential mortgage loans insured by FHA or guaranteed
by the VA that are no longer accruing interest as of December 31,
2017 (September 30, 2017 - $157 million; December 31, 2016 - $181
million). Furthermore, the Corporation has approximately $58 million
in reverse mortgage loans which are guaranteed by FHA, but which are
currently not accruing interest. Due to the guaranteed nature of the
loans, it is the Corporation’s policy to exclude these balances from
non-performing assets (September 30, 2017 - $57 million; December
30, 2016 - $68 million).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table I - Activity in Non-Performing Loans
(Unaudited)
                                                                                                                 
Commercial loans held-in-portfolio:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Quarter ended                                                                                     Quarter ended
                                                                                                                              31-Dec-17                                                                      30-Sep-17
                                                                                              --------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------
(In thousands)                                                               BPPR       BPNA     Popular, Inc.    BPPR       BPNA        Popular, Inc.
--------------------------------------------------------------------------------------------- -------- -------------------- ------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Beginning balance NPLs                                                                        $160,043                       $5,309                           $165,352                      $162,863                       $4,001                                  $166,864
Plus:
                     New non-performing loans                                                   22,975                        1,662                             24,637                         8,085                        4,027                                    12,112
Less:
                     Non-performing loans transferred to OREO                                    (254)                            -                              (254)                          (76)                            -                                      (76)
                     Non-performing loans charged-off                                          (9,456)                            -                            (9,456)                       (3,587)                         (49)                                   (3,636)
                     Loans returned to accrual status / loan collections   (12,082)   (3,132)        (15,214)    (7,242)   (2,670)                (9,912)
                     --------------------------------------------------- -------------------- -------- -------------------- ------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Ending balance NPLs                                                        $161,226    $3,839        $165,065   $160,043    $5,309               $165,352
--------------------------------------------------------------------------------------------- -------- -------------------- ------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
                                                                                                                                                                                                                                                        
Construction loans held-in-portfolio:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Quarter ended                                                                                     Quarter ended
                                                                                                                              31-Dec-17                                                                      30-Sep-17
                                                                                              --------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------
(In thousands)                                                               BPPR       BPNA     Popular, Inc.    BPPR       BPNA        Popular, Inc.
--------------------------------------------------------------------------------------------- -------- -------------------- ------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Beginning balance NPLs                                                                             $99                           $-                                $99                            $-                           $-                                        $-
Plus:
                     New non-performing loans                                                        -                            -                                  -                            99                            -                                        99
                     Loans returned to accrual status / loan collections       (99)         -            (99)          -         -                      -
                     --------------------------------------------------- -------------------- -------- -------------------- ------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Ending balance NPLs                                                              $-        $-              $-        $99        $-                    $99
--------------------------------------------------------------------------------------------- -------- -------------------- ------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
                                                                                                                                                                                                                                                        
Mortgage loans held-in-portfolio:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Quarter ended                                                                                     Quarter ended
                                                                                                                              31-Dec-17                                                                      30-Sep-17
                                                                                              --------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------
(In thousands)                                                               BPPR       BPNA     Popular, Inc.    BPPR       BPNA        Popular, Inc.
--------------------------------------------------------------------------------------------- -------- -------------------- ------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Beginning balance NPLs                                                                        $337,967                      $14,348                           $352,315                      $306,642                      $12,280                                  $318,922
Plus:
                     New non-performing loans                                                    1,583                        6,622                              8,205                        97,314                        5,349                                   102,663
                     Advances on existing non-performing loans                                       -                          662                                662                             -                            -                                         -
Less:
                     Non-performing loans transferred to OREO                                  (1,085)                            -                            (1,085)                       (9,408)                            -                                   (9,408)
                     Non-performing loans charged-off                                         (18,101)                         (60)                           (18,161)                      (10,864)                         (66)                                  (10,930)
                     Loans returned to accrual status / loan collections   (13,667)   (6,720)        (20,387)   (45,717)   (3,215)               (48,932)
                     --------------------------------------------------- -------------------- -------- -------------------- ------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Ending balance NPLs                                                        $306,697   $14,852        $321,549   $337,967   $14,348               $352,315
--------------------------------------------------------------------------------------------- -------- -------------------- ------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
                                                                                                                  
Legacy loans held-in-portfolio:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             Quarter ended                                                                                     Quarter ended
                                                                                                                               31-Dec-17                                                                      30-Sep-17
                                                                                              ---------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------
(In thousands)                                                               BPPR       BPNA      Popular, Inc.    BPPR       BPNA        Popular, Inc.
--------------------------------------------------------------------------------------------- -------- -------------------- -------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Beginning balance NPLs                                                                              $-                        $3,268                             $3,268                            $-                       $3,360                                    $3,360
Plus:
                     Advances on existing non-performing loans                                       -                             -                                  -                             -                           64                                        64
Less:
                     Non-performing loans charged-off                                                -                             -                                  -                             -                         (14)                                      (14)
                     Loans returned to accrual status / loan collections          -      (229)           (229)          -     (142)                  (142)
                     --------------------------------------------------- -------------------- -------- -------------------- -------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Ending balance NPLs                                                              $-     $3,039          $3,039         $-    $3,268                 $3,268
--------------------------------------------------------------------------------------------- -------- -------------------- -------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
                                                                                                                                                                                                                                                         
Total non-performing loans held-in-portfolio (excluding consumer
and covered loans):
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             Quarter ended                                                                                     Quarter ended
                                                                                                                               31-Dec-17                                                                      30-Sep-17
                                                                                              ---------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------
(In thousands)                                                               BPPR       BPNA      Popular, Inc.    BPPR       BPNA        Popular, Inc.
--------------------------------------------------------------------------------------------- -------- -------------------- -------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Beginning balance NPLs                                                                        $498,109                       $22,925                           $521,034                      $469,505                      $19,641                                  $489,146
Plus:
                     New non-performing loans                                                   24,558                         8,284                             32,842                       105,498                        9,376                                   114,874
                     Advances on existing non-performing loans                                       -                           662                                662                             -                           64                                        64
Less:
                     Non-performing loans transferred to OREO                                  (1,339)                             -                            (1,339)                       (9,484)                            -                                   (9,484)
                     Non-performing loans charged-off                                         (27,557)                          (60)                           (27,617)                      (14,451)                        (129)                                  (14,580)
                     Loans returned to accrual status / loan collections   (25,848)   (10,081)        (35,929)   (52,959)   (6,027)               (58,986)
                     --------------------------------------------------- -------------------- -------- -------------------- -------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Ending balance NPLs                                                        $467,923    $21,730        $489,653   $498,109   $22,925               $521,034
--------------------------------------------------------------------------------------------- -------- -------------------- -------- -------------------- ------------- -------------------- -------- -------------------- ------- -------------------- --------------------
Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table J - Allowance for Credit Losses, Net Charge-offs and
Related Ratios
(Unaudited)
                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                           Quarter ended                                                                                                     Quarter ended                                                                                                     Quarter ended
                                                                                       31-Dec-17                                                                                      30-Sep-17                                                                                      31-Dec-16                                           
------------------------------------------------------------- -------------------- ----------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                        
                                                                                            Non-covered                                   Covered                                                             Non-covered                                   Covered                                                             Non-covered                                   Covered
(Dollars in thousands)                                                         loans                  loans      Total                  loans                  loans      Total                  loans                  loans      Total  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Balance at beginning of period                                                                 $613,856                                   $33,057                      $646,913                                  $509,206                                   $30,808                      $540,014                                  $525,593                                   $30,262                      $555,855
Provision (reversal) for loan losses                                          70,001                  1,487     71,488                157,659                  3,100    160,759                 40,924                    441     41,365  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
                                                          683,857                 34,544    718,401                666,865                 33,908    700,773                566,517                 30,703    597,220  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Net loans charged-off (recovered):
BPPR
     Commercial                                                                                   8,450                                         -                         8,450                                     (438)                                         -                         (438)                                     9,205                                         -                         9,205
     Construction                                                                                  (59)                                         -                          (59)                                      (50)                                         -                          (50)                                         8                                         -                             8
     Lease financing                                                                              3,024                                         -                         3,024                                     1,495                                         -                         1,495                                     1,000                                         -                         1,000
     Mortgage                                                                                    23,565                                     1,315                        24,880                                    17,071                                       831                        17,902                                    20,919                                       360                        21,279
     Consumer                                                                 24,138                   (15)     24,123                 27,223                     20     27,243                 22,284                    (7)     22,277
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- --------
        Total BPPR                                                            59,118                  1,300     60,418                 45,301                    851     46,152                 53,416                    353     53,769
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- --------
                                                                                                                                                                                                                                                                                                                                                                                                                     
BPNA
     Commercial                                                                                  30,981                                         -                        30,981                                     4,282                                         -                         4,282                                   (1,080)                                         -                       (1,080)
     Construction                                                                                   (7)                                         -                           (7)                                         -                                         -                             -                                         -                                         -                             -
     Legacy [1]                                                                                   (647)                                         -                         (647)                                     (297)                                         -                         (297)                                     (253)                                         -                         (253)
     Mortgage                                                                                        56                                         -                            56                                     (174)                                         -                         (174)                                     (255)                                         -                         (255)
     Consumer                                                                  4,174                      -      4,174                  3,897                      -      3,897                  4,388                      -      4,388  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
        Total BPNA                                                            34,557                      -     34,557                  7,708                      -      7,708                  2,800                      -      2,800  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Total loans charged-off - Popular, Inc.                                       93,675                  1,300     94,975                 53,009                    851     53,860                 56,216                    353     56,569  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Balance at end of period                                                    $590,182                $33,244   $623,426               $613,856                $33,057   $646,913               $510,301                $30,350   $540,651  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                     
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio                                      1.61 %                                                                  1.60 %                                    0.92 %                                                                  0.92 %                                    1.00 %                                                                  0.98 %
Provision for loan losses to net charge-offs                                                       0.75 x                                                                  0.75 x                                    2.97 x                                                                  2.98 x                                    0.73 x                                                                  0.73 x
                                                                                                                                                                                                                                                                                                                                                                                                                     
BPPR
Annualized net charge-offs to average loans held-in-portfolio                                      1.38 %                                                                  1.37 %                                    1.07 %                                                                  1.05 %                                    1.25 %                                                                  1.22 %
Provision for loan losses to net charge-offs                                                       0.90 x                                                                  0.90 x                                    2.54 x                                                                  2.56 x                                    0.70 x                                                                  0.70 x
                                                                                                                                                                                                                                                                                                                                                                                                                     
BPNA
Annualized net charge-offs (recoveries) to average loans                                                                                                                   2.26 %                                                                                                            0.52 %                                                                                                            0.21 %
held-in-portfolio
Provision for loan losses to net charge-offs (recoveries)                   0.49 x                                5.52 x                                1.27 x
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
[1] The legacy portfolio is comprised of commercial loans,
construction loans and lease financings related to certain lending
products exited by the Corporation as part of restructuring efforts
carried out in prior years at the BPNA segment.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Year ended                                                                                                        Year ended
(Dollars in thousands)                                                                                    31-Dec-17                                                                                      31-Dec-16                                           
------------------------------------------------------------- -------------------- ----------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------
                                                                                            Non-covered                                   Covered                                          Non-covered                                   Covered  
                                                            loans                  loans      Total                  loans                  loans      Total  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Balance at beginning of period                                                                 $510,301                                   $30,350                      $540,651                                  $502,935                                   $34,176                      $537,111
Provision (reversal of provision) for loan losses                            319,682                  5,742    325,424                171,126                (1,110)    170,016  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
                                                          829,983                 36,092    866,075                674,061                 33,066    707,127  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Net loans charged-off (recovered):
BPPR
     Commercial [4]                                                                              22,395                                         -                        22,395                                    20,755                                         -                        20,755
     Construction                                                                               (2,623)                                         -                       (2,623)                                   (2,021)                                         -                       (2,021)
     Lease financing                                                                              6,770                                         -                         6,770                                     3,888                                         -                         3,888
     Mortgage                                                                                    74,944                                     2,736                        77,680                                    64,316                                     2,716                        67,032
     Consumer                                                                 90,133                    112     90,245                 76,306                      -     76,306  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
        Total BPPR                                                           191,619                  2,848    194,467                163,244                  2,716    165,960  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                   
BPNA
     Commercial                                                                                  34,157                                         -                        34,157                                   (3,313)                                         -                       (3,313)
     Construction                                                                                   (7)                                         -                           (7)                                         -                                         -                             -
     Legacy [1]                                                                                 (1,730)                                         -                       (1,730)                                   (1,913)                                         -                       (1,913)
     Mortgage                                                                                       240                                         -                           240                                     1,933                                         -                         1,933
     Consumer                                                                 15,522                      -     15,522                  9,254                      -      9,254  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
        Total BPNA                                                            48,182                      -     48,182                  5,961                      -      5,961  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Total loans charged-off - Popular, Inc.                                      239,801                  2,848    242,649                169,205                  2,716    171,921  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Net recoveries [2]                                                                 -                      -          -                  5,445                      -      5,445  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Balance at end of period                                                    $590,182                $33,244   $623,426               $510,301                $30,350   $540,651  
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                   
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio                                      1.05 %                                                                  1.03 %                                    0.76 %                                                                  0.75 %
Provision for loan losses to net charge-offs [3]                                                   1.33 x                                                                  1.34 x                                    1.01 x                                                                  0.99 x
                                                                                                                                                                                                                                                                                                   
BPPR
Annualized net charge-offs to average loans held-in-portfolio                                      1.13 %                                                                  1.11 %                                    0.95 %                                                                  0.93 %
Provision for loan losses to net charge-offs [3]                                                   1.26 x                                                                  1.27 x                                    0.95 x                                                                  0.93 x
                                                                                                                                                                                                                                                                                                   
BPNA
Annualized net charge-offs to average loans held-in-portfolio                                                                                                              0.82 %                                                                                                            0.12 %
Provision for loan losses to net charge-offs                                1.62 x                                2.56 x
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
[1] The legacy portfolio is comprised of commercial loans,
construction loans and lease financings related to certain lending
products exited by the Corporation as part of restructuring efforts
carried out in prior years at the BPNA segment.
[2] Net recoveries for the year ended December 31, 2016 are related
to loans sold or reclassified to held-for-sale.
[3] Excluding provision for loan losses and net write-down related
to loans sold or reclassified to held-for-sale during the years
ended December 31, 2016.
[4] For the year ended December 31, 2017, includes the elimination                                                                                                                                                                                                                                 
of an incremental $6.0 million charge-off related to the
inter-company transfer of a loan between BPPR and Popular, Inc., its
bank honding company, the impact of which is eliminated in the
consolidated results of the Corporation in accordance with U.S. GAAP.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------             --------------------
Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table K - Allowance for Loan Losses - Breakdown of General and
Specific Reserves - CONSOLIDATED
(Unaudited)
                                                                                          
                                                                                
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                               31-Dec-17
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                        Lease
(Dollars in thousands)                                                            Commercial           Construction             Legacy [2]               Mortgage              financing               Consumer                  Total [3]
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Specific ALLL                                                                                                                                 $36,982                                        $-                                        $-                                   $48,832                                      $475                                   $22,802                                  $109,091
Impaired loans                                                                         [1]                                                   $323,455                                        $-                                        $-                                  $518,275                                    $1,456                                  $104,237                                  $947,423
Specific ALLL to impaired loans                                     [1]                                   11.43 %                                       - %                                       - %                                    9.42 %                                   32.62 %                                   21.88 %                                   11.51 %
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
General ALLL                                                                                                                                 $178,683                                    $8,362                                      $798                                  $114,790                                   $11,516                                  $166,942                                  $481,091
Loans held-in-portfolio, excluding impaired loans                                      [1]                                                $11,165,406                                  $880,029                                   $32,980                                $6,752,132                                  $808,534                                $3,706,290                               $23,345,371
General ALLL to loans held-in-portfolio, excluding impaired loans   [1]                                    1.60 %                                    0.95 %                                    2.42 %                                    1.70 %                                    1.42 %                                    4.50 %                                    2.06 %
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total ALLL                                                                                                                                   $215,665                                    $8,362                                      $798                                  $163,622                                   $11,991                                  $189,744                                  $590,182
Total non-covered loans held-in-portfolio                                              [1]                                                $11,488,861                                  $880,029                                   $32,980                                $7,270,407                                  $809,990                                $3,810,527                               $24,292,794
ALLL to loans held-in-portfolio                                     [1]                                    1.88 %                                    0.95 %                                    2.42 %                                    2.25 %                                    1.48 %                                    4.98 %                                    2.43 %
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted
transaction.
[2] 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.
[3] Excludes covered loans acquired on the Westernbank FDIC-assisted
transaction. As of December 31, 2017, the general allowance on the
covered loans amounted to $33.2 million.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                               30-Sep-17
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                        Lease
(Dollars in thousands)                                                            Commercial           Construction             Legacy [2]               Mortgage              financing               Consumer                  Total [3]
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Specific ALLL                                                                                                                                 $40,863                                        $-                                        $-                                   $51,421                                      $450                                   $22,457                                  $115,191
Impaired loans                                                                         [1]                                                   $328,704                                        $-                                        $-                                  $519,228                                    $1,468                                  $105,387                                  $954,787
Specific ALLL to impaired loans                                     [1]                                   12.43 %                                       - %                                       - %                                    9.90 %                                   30.65 %                                   21.31 %                                   12.06 %
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
General ALLL                                                                                                                                 $228,106                                    $8,822                                      $872                                  $122,469                                    $9,982                                  $128,414                                  $498,665
Loans held-in-portfolio, excluding impaired loans                                      [1]                                                $10,898,391                                  $823,325                                   $37,508                                $6,010,007                                  $753,413                                $3,696,019                               $22,218,663
General ALLL to loans held-in-portfolio, excluding impaired loans   [1]                                    2.09 %                                    1.07 %                                    2.32 %                                    2.04 %                                    1.32 %                                    3.47 %                                    2.24 %
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total ALLL                                                                                                                                   $268,969                                    $8,822                                      $872                                  $173,890                                   $10,432                                  $150,871                                  $613,856
Total non-covered loans held-in-portfolio                                              [1]                                                $11,227,095                                  $823,325                                   $37,508                                $6,529,235                                  $754,881                                $3,801,406                               $23,173,450
ALLL to loans held-in-portfolio                                     [1]                                    2.40 %                                    1.07 %                                    2.32 %                                    2.66 %                                    1.38 %                                    3.97 %                                    2.65 %
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
[1] Excludes covered loans acquired on the Westernbank FDIC-assisted
transaction.
[2] 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.
[3] Excludes covered loans acquired on the Westernbank FDIC-assisted
transaction. As of September 30, 2017, the general allowance on the
covered loans amounted to $33.1 million.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                               Variance
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                        Lease
(Dollars in thousands)                                                            Commercial           Construction                 Legacy               Mortgage              financing               Consumer                  Total  
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Specific ALLL                                                                                                                                $(3,881)                                        $-                                        $-                                  $(2,589)                                       $25                                      $345                                  $(6,100)
Impaired loans                                                                      $(5,249)                     $-                     $-                 $(953)                  $(12)               $(1,150)               $(7,364)  
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
General ALLL                                                                                                                                $(49,423)                                    $(460)                                     $(74)                                  $(7,679)                                    $1,534                                   $38,528                                 $(17,574)
Loans held-in-portfolio, excluding impaired loans                                   $267,015                $56,704               $(4,528)               $742,125                $55,121                $10,271             $1,126,708  
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total ALLL                                                                                                                                  $(53,304)                                    $(460)                                     $(74)                                 $(10,268)                                    $1,559                                   $38,873                                 $(23,674)
Total non-covered loans held-in-portfolio                                           $261,766                $56,704               $(4,528)               $741,172                $55,109                 $9,121             $1,119,344  
----------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table L - Allowance for Loan Losses - Breakdown of General and
Specific Reserves - PUERTO RICO OPERATIONS
(Unaudited)
                                                                                                                                                                                    
                                                                                                                                                                   31-Dec-17
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                  Puerto Rico
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                            Commercial            Construction             Mortgage            Lease financing           Consumer                 Total
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Allowance for credit losses:
                     Specific ALLL non-covered loans                                                                 $36,982                                        $-                                   $46,354                                      $475                                   $21,849                                  $105,660
  General ALLL non-covered loans                                               134,549                  1,286                112,727                 11,516                152,366                412,444
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
ALLL - non-covered loans                                                                          171,531                  1,286                159,081                 11,991                174,215                518,104
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                     Specific ALLL covered loans                                                                           -                                         -                                         -                                         -                                         -                                         -
  General ALLL covered loans                                                         -                      -                 32,521                      -                    723                 33,244
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
ALLL - covered loans                                                                                    -                      -                 32,521                      -                    723                 33,244
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total ALLL                                                                                       $171,531                 $1,286               $191,602                $11,991               $174,938               $551,348
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Loans held-in-portfolio:
                     Impaired non-covered loans                                                                     $323,455                                        $-                                  $509,033                                    $1,456                                   $99,180                                  $933,124
  Non-covered loans held-in-portfolio, excluding impaired loans              6,942,444                 95,369              6,067,746                808,534              3,230,841             17,144,934
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Non-covered loans held-in-portfolio                                                             7,265,899                 95,369              6,576,779                809,990              3,330,021             18,078,058
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                     Impaired covered loans                                                                                -                                         -                                         -                                         -                                         -                                         -
  Covered loans held-in-portfolio, excluding impaired loans                          -                      -                502,929                      -                 14,345                517,274
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Covered loans held-in-portfolio                                                                         -                      -                502,929                      -                 14,345                517,274
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total loans held-in-portfolio                                                                  $7,265,899                $95,369             $7,079,708               $809,990             $3,344,366            $18,595,332
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                   30-Sep-17
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                  Puerto Rico
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                 Commercial           Construction               Mortgage        Lease financing               Consumer                  Total
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Allowance for credit losses:
                     Specific ALLL non-covered loans                                                                 $40,863                                        $-                                   $49,129                                      $450                                   $21,730                                  $112,172
  General ALLL non-covered loans                                               164,823                  1,699                120,504                  9,982                115,069                412,077
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
ALLL - non-covered loans                                                                          205,686                  1,699                169,633                 10,432                136,799                524,249
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                     Specific ALLL covered loans                                                                           -                                         -                                         -                                         -                                         -                                         -
  General ALLL covered loans                                                         -                      -                 31,991                      -                  1,066                 33,057
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
ALLL - covered loans                                                                                    -                      -                 31,991                      -                  1,066                 33,057
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total ALLL                                                                                       $205,686                 $1,699               $201,624                $10,432               $137,865               $557,306
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Loans held-in-portfolio:
                     Impaired non-covered loans                                                                     $328,704                                        $-                                  $510,134                                    $1,468                                  $101,948                                  $942,254
  Non-covered loans held-in-portfolio, excluding impaired loans              6,840,907                 87,705              5,305,371                753,413              3,188,422             16,175,818
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Non-covered loans held-in-portfolio                                                             7,169,611                 87,705              5,815,505                754,881              3,290,370             17,118,072
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                     Impaired covered loans                                                                                -                                         -                                         -                                         -                                         -                                         -
  Covered loans held-in-portfolio, excluding impaired loans                          -                      -                510,211                      -                 14,643                524,854
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Covered loans held-in-portfolio                                                                         -                      -                510,211                      -                 14,643                524,854
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total loans held-in-portfolio                                                                  $7,169,611                $87,705             $6,325,716               $754,881             $3,305,013            $17,642,926
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                           
                                                                    
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                   Variance
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                 Commercial           Construction               Mortgage        Lease financing               Consumer                  Total
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Allowance for credit losses:
                     Specific ALLL non-covered loans                                                                $(3,881)                                        $-                                  $(2,775)                                       $25                                      $119                                  $(6,512)
  General ALLL non-covered loans                                              (30,274)                  (413)                (7,777)                  1,534                 37,297                    367
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
ALLL - non-covered loans                                                                         (34,155)                  (413)               (10,552)                  1,559                 37,416                (6,145)
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                     Specific ALLL covered loans                                                                           -                                         -                                         -                                         -                                         -                                         -
  General ALLL covered loans                                                         -                      -                    530                      -                  (343)                    187
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
ALLL - covered loans                                                                                    -                      -                    530                      -                  (343)                    187
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total ALLL                                                                                      $(34,155)                 $(413)              $(10,022)                 $1,559                $37,073               $(5,958)
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Loans held-in-portfolio:
                     Impaired non-covered loans                                                                     $(5,249)                                        $-                                  $(1,101)                                     $(12)                                  $(2,768)                                  $(9,130)
  Non-covered loans held-in-portfolio, excluding impaired loans                101,537                  7,664                762,375                 55,121                 42,419                969,116
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Non-covered loans held-in-portfolio                                                                96,288                  7,664                761,274                 55,109                 39,651                959,986
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                     Impaired covered loans                                                                                -                                         -                                         -                                         -                                         -                                         -
  Covered loans held-in-portfolio, excluding impaired loans                          -                      -                (7,282)                      -                  (298)                (7,580)
-------------------- ------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Covered loans held-in-portfolio                                                                         -                      -                (7,282)                      -                  (298)                (7,580)
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total loans held-in-portfolio                                                                     $96,288                 $7,664               $753,992                $55,109                $39,353               $952,406
------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table M - Allowance for Loan Losses - Breakdown of General and
Specific Reserves - U.S. MAINLAND OPERATIONS
(Unaudited)
                                                                                                                                                                        
                                                                                                                                                             31-Dec-17
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                           U.S. Mainland
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                     Commercial           Construction                 Legacy               Mortgage               Consumer                  Total
------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Allowance for credit losses:
                     Specific ALLL                                                                            $-                                        $-                                        $-                                    $2,478                                      $953                                    $3,431
  General ALLL                                                      44,134                  7,076                    798                  2,063                 14,576                 68,647
-------------------- ------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total ALLL                                                                            $44,134                 $7,076                   $798                 $4,541                $15,529                $72,078
------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Loans held-in-portfolio:
                     Impaired loans                                                                           $-                                        $-                                        $-                                    $9,242                                    $5,057                                   $14,299
  Loans held-in-portfolio, excluding impaired loans              4,222,962                784,660                 32,980                684,386                475,449              6,200,437
-------------------- ------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total loans held-in-portfolio                                                      $4,222,962               $784,660                $32,980               $693,628               $480,506             $6,214,736
------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
 
                                                                                                                                                                                                                                                                                                               
                                                                                                                                                             30-Sep-17
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                           U.S. Mainland
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                     Commercial           Construction                 Legacy               Mortgage               Consumer                  Total
------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Allowance for credit losses:
                     Specific ALLL                                                                            $-                                        $-                                        $-                                    $2,292                                      $727                                    $3,019
  General ALLL                                                      63,283                  7,123                    872                  1,965                 13,345                 86,588
-------------------- ------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total ALLL                                                                            $63,283                 $7,123                   $872                 $4,257                $14,072                $89,607
------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Loans held-in-portfolio:
                     Impaired loans                                                                           $-                                        $-                                        $-                                    $9,094                                    $3,439                                   $12,533
  Loans held-in-portfolio, excluding impaired loans              4,057,484                735,620                 37,508                704,636                507,597              6,042,845
-------------------- ------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total loans held-in-portfolio                                                      $4,057,484               $735,620                $37,508               $713,730               $511,036             $6,055,378
------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
 
                                                        
-------------------- ------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                             Variance
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                     Commercial           Construction                 Legacy               Mortgage               Consumer                  Total
------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Allowance for credit losses:
                     Specific ALLL                                                                            $-                                        $-                                        $-                                      $186                                      $226                                      $412
  General ALLL                                                    (19,149)                   (47)                   (74)                     98                  1,231               (17,941)
-------------------- ------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total ALLL                                                                          $(19,149)                  $(47)                  $(74)                   $284                 $1,457              $(17,529)
------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Loans held-in-portfolio:
                     Impaired loans                                                                           $-                                        $-                                        $-                                      $148                                    $1,618                                    $1,766
  Loans held-in-portfolio, excluding impaired loans                165,478                 49,040                (4,528)               (20,250)               (32,148)                157,592
-------------------- ------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total loans held-in-portfolio                                                        $165,478                $49,040               $(4,528)              $(20,102)              $(30,530)               $159,358
------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Popular, Inc.                                          
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table N - Reconciliation to GAAP Financial Measures
(Unaudited)
                                                                                                                                                          
                                                                                                                                                          
(In thousands, except share or per share information)     31-Dec-17     30-Sep-17     31-Dec-16  
----------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- --------------------
Total stockholders’ equity                       $5,103,905                       $5,285,431                       $5,197,957
Less: Preferred stock                                      (50,160)      (50,160)      (50,160)
----------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- -----------
                                                                            $5,053,745                       $5,235,271                       $5,147,797
Common shares outstanding at end of period                                 102,068,981                      102,026,417                      103,790,932
Common equity per share                                      $49.51        $51.31        $49.60
----------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- -----------
                                                                                                                                                          
Total stockholders’ equity                       $5,103,905                       $5,285,431                       $5,197,957
Less: Preferred stock                                                         (50,160)                         (50,160)                         (50,160)
Less: Goodwill                                                               (627,294)                        (627,294)                        (627,294)
Less: Other intangibles                                    (35,672)      (38,016)      (45,050)  
----------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- --------------------
Total tangible common equity                             $4,390,779    $4,569,961    $4,475,453  
----------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- --------------------
Total assets                                                               $44,277,337                      $42,601,267                      $38,661,609
Less: Goodwill                                                               (627,294)                        (627,294)                        (627,294)
Less: Other intangibles                                    (35,672)      (38,016)      (45,050)  
----------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- --------------------
Total tangible assets                                   $43,614,371   $41,935,957   $37,989,265  
----------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- --------------------
Tangible common equity to tangible assets                                        10.07                    %       10.90                    %       11.78                    %
Common shares outstanding at end of period                                 102,068,981                      102,026,417                      103,790,932
Tangible book value per common share                         $43.02        $44.79        $43.12  
----------------------------------------------------- -------------------- ----------- -------------------- ----------- -------------------- ----------- --------------------
Popular, Inc.                                                                                    
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table O - Financial Information - Westernbank Loans
(Unaudited)
 
                                                                                                                                                            
Revenues (Expenses)
                                                                                                          Quarters ended
(In thousands)                                                            31-Dec-17   30-Sep-17               Variance
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
Interest income on WB loans                                                 $36,011     $35,939                    $72
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
FDIC loss-share income (expense):
(Amortization) accretion of indemnification asset                                                (407)                            567                                     (974)
80% mirror accounting on credit impairment losses [1]                                            1,191                          (329)                                     1,520
80% mirror accounting on reimbursable expenses                                                     222                            588                                     (366)
80% mirror accounting on recoveries on covered assets, including
rental income on OREOs,
  subject to reimbursement to the FDIC                                                           (427)                        (1,601)                                     1,174
Change in true-up payment obligation                                                             2,018                        (3,208)                                     5,226
Other                                                                            17          35                   (18)
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
              Total FDIC loss-share income (expense)       2,614     (3,948)                  6,562
-------------------------------- -------------------------------------- -------------------- --------- -------------------- --------- -------------------- --------------------
Total income                                                                 38,625      31,991                  6,634
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
Provision for loan losses- WB loans                                           2,501      14,751               (12,250)
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
Total income less provision for loan losses                                 $36,124     $17,240                $18,884
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
[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 agreement for
interest not collected from borrowers is limited under the agreement
(approximately 90 days); accordingly, these amounts are not subject
fully to the 80% mirror accounting.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                            
Non-personnel operating expenses
                                                                                                       Quarters ended [1][2]
(In thousands)                                                            31-Dec-17   30-Sep-17               Variance
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
Professional fees                                                                                 $111                           $315                                    $(204)
OREO expenses                                                                                    1,154                          1,807                                     (653)
Other operating expenses                                                      1,694       1,748                   (54)
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
Total operating expenses                                                     $2,959      $3,870                 $(911)
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
[1] Includes expenses related to loans subject, and not
subject, to the FDIC loss-sharing agreements.
[2] Expense reimbursements from the FDIC may be recorded
with a time lag, since these are claimed upon the event of loss or
charge-off of the loans which may occur in a subsequent period.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                            
                                                                                                                                                            
Quarterly average assets
                                                                                                          Quarters ended
(In millions)                                                             31-Dec-17   30-Sep-17               Variance
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
Loans                                                                                           $1,667                         $1,681                                     $(14)
FDIC loss-share asset                                                            48          52                    (4)
-------------------------------------------------------------------------------------------- --------- -------------------- --------- -------------------- --------------------
                                                                                                                              
Activity in the carrying amount and accretable yield of loans
accounted for under ASC 310-30
                                                                                                                                                                                                                               
                                                                                                                                                                     Quarters ended
                                                                     31-Dec-17                                                     30-Sep-17
---------------------------------- -------------------------------------------- -------------------- ------------------------------------------------------------------------------ ---------------------------------------------------------------
                                                                                                                                                Carrying amount                                                                  Carrying amount
(In thousands)                                                                      Accretable yield         of loans        Accretable yield           of loans
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
Beginning balance                                                                                                $909,329                           $1,588,547                                  $942,668                                $1,617,787
Accretion                                                                                                        (34,435)                               34,435                                  (34,790)                                    34,790
Changes in expected cash flows                                                                                      5,821                                    -                                     1,451                                         -
Collections / loan sales / charge-offs                                                               -          (30,061)                      -               (64,030)
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
Ending balance[1]                                                                                                 880,715                            1,592,921                                   909,329                                 1,588,547
                Allowance for loan losses - ASC 310-30 loans                      -          (70,129)                      -               (67,100)
---------------------------------- -------------------------------------------- -------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
Ending balance, net of allowance for loan losses                                              $880,715        $1,522,792               $909,329             $1,521,447
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                               
[1] The carrying amount of loans acquired from
Westernbank and accounted for under ASC 310-30 which remain subject
to the loss-sharing agreement with the FDIC amounted to
approximately $507 million as of December 31, 2017 and $515 million
as of September 30, 2017.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                               
                                                                                                                                                                                                                               
                                                                                                                                                                                                                               
                                                                                                                                                                                                                               
Activity in the carrying amount of the FDIC indemnity asset
                                                                                                                                                                                                                               
                                                                                                                                                                                          Quarters ended
(In thousands)                                                                              31-Dec-17                  30-Sep-17
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
Balance at beginning of period                                                                                                                         $49,394                                                                             $53,070
(Amortization) accretion                                                                                                                                 (407)                                                                                 567
Credit impairment losses to be covered under loss-sharing agreements                                                                                     1,191                                                                               (329)
Reimbursable expenses to be covered under loss-sharing agreements                                                                                          222                                                                                 588
Net payments from FDIC under loss-sharing agreements                                          (4,084)                    (4,502)
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
Balance at end of period                                                                       46,316                     49,394
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
Balance due to the FDIC for recoveries on covered assets                                      (1,124)                      (924)
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
Net balance of indemnity asset and amounts due from the FDIC                                  $45,192                    $48,470
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                               
                                                                                                                                                                                                                               
Activity in the remaining FDIC loss-share asset (amortization)
accretion
                                                                                                                                                                                                                               
                                                                                                                                                                                          Quarters ended
(In thousands)                                                                              31-Dec-17                  30-Sep-17
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
Balance at beginning of period [1]                                                                                                                    $(2,557)                                                                              $(725)
(Amortization) accretion [2]                                                                                                                             (407)                                                                                 567
Impact of change in projected losses                                                            4,526                    (2,399)
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
Balance at end of period                                                                       $1,562                   $(2,557)
---------------------------------------------------------------------------------------------------- -------------------- -------------------- --------------- -------------------- -------------------- -------------------- --------------------
[1] Positive balance represents negative discount (debit
to assets), while a negative balance represents a discount (credit
to assets).
[2] Amortization results in a negative impact to
non-interest income, while accretion results in a positive impact to
non-interest income, particularly FDIC loss-share income (expense).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Popular, Inc.
Financial Supplement to Fourth Quarter 2017 Earnings Release
Table P - Adjusted Net Income for the Years Ended December 31,
2017 and 2016 (Non-GAAP)
(Unaudited)
                                                                                      
                                                                      31-Dec-17
-------------------------------------- -------------------- ---------------------------------------------------------------------------------------------------------
                                                                                                           Income tax                               Impact on net
(In thousands)                                  Pre-tax                effect                 income
-------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
U.S. GAAP Net income                                                                                                                                        $107,681
Non-GAAP Adjustments:
Impact of the Tax Cut and Jobs Act[1]                       -                168,358                168,358
-------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Adjusted net income (Non-GAAP)                               $276,039
-------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
[1]On December 22, 2017, the Tax Cut and Jobs Act ("the
Act") was signed into law by the President of the United States. The
Act, among other things, reduced the maximum federal Corporate tax
rate from 35% to 21%. The adjustment reduced the DTA related to the
Corporation’s U.S. operations as a result of a lower realizable
benefit at the lower tax rate.
--------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                 
                                                                      31-Dec-16
-------------------------------------- -------------------- ---------------------------------------------------------------------------------------------------------
                                                                                                           Income tax                               Impact on net
(In thousands)                                  Pre-tax                effect                 income
-------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
U.S. GAAP Net income                                                                                                                                        $216,691
Non-GAAP Adjustments:
Impact of EVERTEC restatement [1]                                          2,173                                         -                                     2,173
Bulk Sale of WB loans and OREO [2]                                         (891)                                   347 [4]                                     (544)
FDIC arbitration award[3]                                                171,757                               (41,108)[4]                                   130,649
Goodwill impairment charge[5]                                              3,801                                         -                                     3,801
Other FDIC - LSA adjustments[6]                                            8,806                                   (2,380)                                     6,426
Income from discontinued operations[7]                (2,015)                    880                (1,135)
-------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Adjusted net income (Non-GAAP)                               $358,061
-------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
[1]Represents Popular Inc.’s proportionate share of the
cumulative impact of EVERTEC restatement and other corrective
adjustments to its financial statements, as disclosed in EVERTEC’s
2015 Annual Report on Form 10K. Due to the preferential tax rate
on the income from EVERTEC, the tax effect of this transaction was
insignificant to the Corporation.
[2]Represents the impact of the bulk sale of Westernbank
loans and OREO.
[3]Represents the arbitration decision denying BPPR’s
request for reimbursement in certain shared loss claims.
[4]Gains and losses related to assets acquired from
Westernbank as part of the FDIC assisted transaction are subject to
the capital gains tax rate of 20%. Other items related to the FDIC
loss-sharing agreements are subject to the statutory tax rate of 39%.
[5]Represents goodwill impairment charge in the
Corporation’s securities subsidiary. The securities subsidiary is a
limited liability company with a partnership election. Accordingly,
its earnings flow through Popular, Inc., holding company, for income
tax purposes. Since Popular, Inc. has a full valuation allowance on
its deferred tax assets, this results in an effective tax rate of 0%.
[6]Additional adjustments, including prior period
recoveries, related to restructured commercial loans to reduce the
indemnification asset to its expected realizable value.
[7]Represents income from discontinued operations
associated with the BPNA reorganization.
--------------------------------------------------------------------------------------------------------------------------------------------------------------

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180123005374r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20180123005374/en/

SOURCE: Popular, Inc.

Popular, Inc. 
Investor Relations: 
Brett Scheiner, 212-417-6721 
Investor Relations Officer 
BScheiner@BPOP.com 
or 
Media Relations: 
Teruca Rullan, 787-281-5170 
Mobile: 917-679-3596 
Senior Vice President, Corporate Communications


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