EX-99.1 2 d380888dex991.htm POPULAR, INC. CONFERENCE CALL PRESENTATION Popular, Inc. Conference Call Presentation
Financial Results
Financial Results
Second Quarter 2012
Second Quarter 2012
Exhibit 99.1


Forward Looking Statements
The information contained in this presentation includes forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations
and
involve
risks
and
uncertainties
that
may
cause
the
Company's
actual
results
to
differ
materially
from
any
future
results
expressed or implied by such forward-looking statements. Factors that may cause such a difference include, but are not
limited to (i) the rate of growth in the economy and employment levels, as well as general business and economic conditions;
(ii)
changes
in
interest
rates,
as
well
as
the
magnitude
of
such
changes;
(iii)
the
fiscal
and
monetary
policies
of
the
federal
government and its agencies; (iv) changes in federal bank regulatory and supervisory policies, including required levels of
capital; (v) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate markets in
Puerto Rico and the other markets in which borrowers are located; (vi) the performance of the stock and bond markets; (vii)
competition in the financial services industry; (viii) possible legislative, tax or regulatory changes; (ix) the impact of the Dodd-
Frank Act on our businesses, business practice and cost of operations; and (x) additional Federal Deposit Insurance
Corporation assessments. Other than to the extent required by applicable law,  the Company undertakes no obligation to
publicly update or revise any forward-looking statement. Please refer to our Annual Report on Form 10-K for the year ended
December 31, 2011 and other SEC reports for a discussion of those factors that could impact our future results. The financial
information included in this presentation for the quarter ended June 30, 2012 is based on preliminary unaudited data and is
subject to change.
1


Q2 2012 Highlights
We remain on track in executing our strategy
Improve credit
Build
our
asset
portfolio
and
maintain
strong
top
line
revenue
Optimize operating expenses
Continue improvements at BPNA
We made progress on various elements of this strategy in Q2 2012
Improvements in our credit outlook, with lower NPL inflows and lower losses
$500M in acquired loan portfolios with active pipeline of new opportunities
Maintained strong NIM (Q2 improvement of 6bps overall, 17bps in PR)
Strong capital ratios with TCE at 9.09% and Tier One Common at 12.29%
We continue to see increased expected returns over the life of our FDIC covered loan
portfolio and received a cash dividend from EVERTEC
Notwithstanding this progress, we are facing headwinds that are impacting our expected
performance
Loan originations below expectations due to weak market demand
Higher collection costs
Current negative accretion  from the covered portfolio
2


Q2 2012 Highlights
IMPROVED
CREDIT
TOP LINE
REVENUE
OPERATING
EXPENSES
OTHER
NPLs lower by $120 million to 7.56% of total loans
Charge-offs lower by 9% to  $98 million
PR commercial and construction NPL inflows lower by $28 million or 30%
Acquired $500 million of high quality loan to partially offset weak loan demand
NII increased $4 million quarter over quarter
Gain on sale of loans impacted by $27 million valuation adjustment
Personnel costs declined by $5 million QoQ
Other
operating
expenses
increased
$37million
QoQ
-
$25
million
due
to
early
repo extinguishment and $13 million covered loan expense reimbursable by the
FDIC
Tax benefit of $78 million in 2Q12 versus a $16 million expense in 1Q12 due to
PR treasury tax agreement
Cash
inflow
of
$131
million
from
EVERTEC
cash
dividend
(reducing
equity
investment balance to $62 million)
Increased amortization of the FDIC indemnity asset
3


Financial Results (Unaudited)
4
Q2 2012
Q1 2012
Variance
Net interest income
$341,200
$337,582
$3,618
Service fees & other oper. income
119,576
129,710
(10,134)
(Loss) Gain on sale of investments, loans & trading
(28,427)
9,453
(37,880)
Total revenues before FDIC income
432,349
476,745
(44,396)
FDIC loss-share income (expense)
2,575
(15,255)
17,830
Gross revenues
434,924
461,490
(26,566)
Provision for loan losses (excluding covered loans)
81,743
82,514
(771)
Provision for loan losses (covered WB loans)
37,456
18,209
19,247
Total provision BPOP
119,199
100,723
18,476
Net revenues
315,725
360,767
(45,042)
Personnel costs
116,336
121,491
(5,155)
Other operating expenses
211,543
174,676
36,867
Total operating expenses
327,879
296,167
31,712
(Loss) Income before Tax
(12,154)
64,600
(76,754)
Income tax (benefit) expense
(77,893)
16,192
(94,085)
Net income
$65,739
$48,408
$17,331
Financial Ratios
EPS
$0.63
$0.46
$0.17
NIM
4.33%
4.27%
0.06%
$ in thousands (except per share data) 


5
$ in thousands
Variance vs.
Q1' 12
Service fees & other
operating income
(10,134)
Gain/(loss) on sale
of loans,
investments &
trading profits
(37,880)
FDIC loss-share
income (expense)
17,830
Provision for loan
losses  - covered
loans
19,247
Personnel costs
(5,155)
Other operating
expenses
36,867
Taxes
(94,085)
• $25 million expense on early extinguishment of repos                                                  
• $13.3 million of reimbursable covered loan expenses
• $73 million benefit related to PR Treasury tax agreement
• Recognition of $10.7 million of reimbursable expenses                                                
• $15 million mirror impact associated with higher provision expense of
   $19.2 million                                                                                                                                   
• Offset by higher FDIC Indemnity Asset negative accretion of $8 million
Comments
• $6.7 million due to MSRs valuation variance                                                                      
• $6.5 million lower income from investments accounted for under the
   equity method                                                                                                                                
• Partially offset by $1.7 million  higher credit card fees related to higher
   customer purchase activity
• Mainly due to higher expected losses in certain pools
• Negative variation due to $31 million of combined valuation adjustments
   and resolutions of loans held for sale                                                                                     
• $5 million in mortgage hedging costs                                                                                  
• $2 million in lower compensation costs given the early voluntary
   retirement window efforts                                                                                                        
• $3 million lower payroll taxes and health benefits costs
Significant Quarterly Variances


6
Consolidated Credit Summary (Excluding  Covered Loans)
Continued credit quality improvements in key metrics:
NPLs declined by $120 million, down 7% from Q1 2012
NCOs declined for the third consecutive quarter to $98 million
$ in millions
Q2 12
Q1 12
%
Q2 11
%
Loans Held to Maturity (HTM)
$20,666
$20,479
$187
0.9%
$20,658
$8
0.0%
Performing HFS
185
130
55
42.3%
109
76
69.7%
NPL HFS
179
232
(53)
-22.8%
400
(221)
-55.3%
Total Non Covered Loans
21,030
20,841
$189
0.9%
21,167
($137)
-0.6%
Non-performing loans (NPLs)
$1,562
$1,682
($120)
-7.1%
$1,625
($63)
-3.9%
NPLs HTM to loans HTM
7.56%
8.21%
-0.7%
-8.0%
7.86%
-0.3%
-3.8%
Net charge-offs (NCOs)
$98
$108
($10)
-9.3%
$133
($35)
-26.3%
NCOs to average loans HTM
1.93%
2.13%
-0.2%
-9.4%
2.59%
-0.7%
-25.5%
Provision for loan losses (PLL)
$82
$83
($1)
-1.2%
$96
($14)
-14.6%
PLL to total loans HTM
1.58%
1.61%
0.0%
-1.8%
1.85%
-0.3%
-14.6%
PLL to NCOs
0.83x
0.76x
0.07x
9.2%
0.72x
0.11x
15.3%
Allowance for loan losses (ALL)
$649
$665
($16)
-2.4%
$690
($41)
-5.9%
ALL to loans
(excl. LHFS)
3.14%
3.25%
-0.1%
-3.3%
3.34%
-0.2%
-6.0%
ALL to NPLs HTM
41.52%
39.53%
2.0%
5.0%
42.45%
-0.9%
-2.2%
Q2 12 vs Q1 12
Q2 12 vs Q2 11


Commercial & Construction NPL Inflows  ($M)
Credit Quality Overview (Non Covered Loans)
7
Non-Performing Loans ($M)
NPL legacy portfolio and inflow included within construction and
commercial loan portfolio
NPLs declined
by $120 million, down 7% from
Q1 2012 and  33%  from Q3 2010 peak; lowest
levels since Q1 2009. Significant variances to
peak levels are as follows:
Construction
$739M or 90%
Consumer     $31M or 47%
Mortgage      $36M or 5%
Total commercial and construction NPL
inflows
decreased
by
$31
million
or
22%
compared to Q1 2012 driven by decreases
across both regions
Third consecutive quarterly decrease
Lowest level since 2009


OREO and NPL HFS (SM)
Credit Quality Overview (Non Covered)
NPL HFS decrease driven mainly by bulk
sales completed during Q4 2010 and Q3
2011
OREO increase driven mainly by the PR
mortgage loan portfolio
8
Over the last year and half, PR mortgage
OREO disposition has averaged 81% of
the UPB at default


Credit Quality Overview –
PR Mortgage Loan Portfolio
9
Excluding repurchases from mortgage
recourse obligation, credit trends improving
since 2010
Increase NCOs driven by change in charge-
off policy implemented in Q1 2012
Repurchases from recourse portfolio
accounts for the majority of the NPL inflow
increase after 2010
Purchases before 2010 were not material
Trends have stabilized since Q4 11
Selling with credit recourse stopped in
2009
Inflows/repurchases peaked in 2011
PR Mortgage Recourse Portfolio ($M)
Repurchases
$44
$33
$27
$63
$53
$53
$73
$50
$32
$4,198
$4,092
$3,967
$3,835
$3,709
$3,588
$3,444
$3,282
$3,169
7.2
7.8
7.9
7.7
7.6
7.3
6.2
5.9
5.6
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Q2 12
Portfolio
90+DPD%
$ in millions
AVG
PORTFOLIO
30 DPD%
90+ DPD
(avg.)
90 DPD%
NCO %
2007
$2,349
12.1%
$121
5.2%
0.1%
2008
2,394
15.3%
171
7.2%
0.1%
2009
2,556
21.0%
296
11.6%
0.4%
2010
3,074
23.2%
426
13.9%
0.6%
2011
3,741
19.1%
438
11.7%
0.7%
2012 YTD
4,131
16.4%
400
9.7%
0.9%
2010
102
71.1%
60
58.5%
2.3%
2011
378
62.0%
177
46.8%
0.8%
2012 YTD
506
60.3%
218
43.1%
3.3%
Total


FDIC-Assisted Acquisition Day 1 Assumptions                         
Covered loans accounted for under ASC 310-30
10
Covered
loan
balances
are
the
fair
value
of
the
expected
cash
flows
to
be
received
from
borrowers
net
of
any
estimated
losses
Indemnity
asset
is
the
present
value
of
the
80%
reimbursement
from
the
FDIC
of
expected
losses
Clawback
payable
is
the
present
value
of
the
total
lump
sum
payment
expected
to
be
made
to
the
FDIC
given
lower
expected
losses
than the FDIC originally estimated
Accretable
yield
is
the
difference
between
the
fair
value
of
loans
at
acquisition
and
expected
future
cash
flows
to
be
collected
from
borrowers
Accretion
of
indemnity
asset
on
Day
1
represented
the
difference
between
the
present
value
and
expected
payments
to
be received
from the FDIC
Clawback
accretion
represents
the
difference
between
the
present
value
and
the
lump
sum
payment
expected
to
be
made
to
the
FDIC on June 2020 -payment estimated on Day 1 to be $169.4 million
(Dollars in Millions)
Balances
Covered Loan Balances
4,909.6
$           
Indemnity Asset
2,425.9
Clawback Payable
(88.2)
Total Expected Net Revenue
Accretable Yield
1,538.1
Accretion of Indemnity Asset
212.8
Clawback Accretion
(81.2)
Total net revenue
$             1,669.7
Day 1 Assumptions


FDIC-Assisted Acquisition is performing better than expected…
Covered loans accounted for under ASC 310-30
11
*Forecast
excluding
potential
net
provision
expense.
Non
single
-family
(NSF),
single
family
(SF)loss
share
agreement
(LSA).
Maturity
of
LSA
dates
4/2015 (NSF) and 4/2020 (SF).
**See appendix for detail
1.
Accelerated resolution of large loans
2.
Impact of net provision expense on specific loan pools and 
negative accretion of the indemnity asset  due to lower
expected combined losses
3.
Net revenues to date are $651 million including $36 million of
net provision expense vs. a day 1 assumption of $665 million
4.
After June 30, 2012 the net revenue is expected to exceed
day 1 estimates by $377 million (see table).
2
4
Forecast
3
1
Revised net revenue expected to be $2.03 billion exceeding day 1
assumptions by $362.5 million
(Dollars in Millions)
Day 1
Assumptions
Actual/Revised
Forecast**
Variance
Day 1
$          1,669.7
$          2,032.2
362.5
$            
2010
255.7
               
276.6
              
20.9
                 
2011
297.1
               
309.0
              
11.9
                 
YTD June 30, 2012
112.2
               
65.2
                 
(47.0)
               
Total recognized to date
665.0
               
650.8
              
(14.2)
               
Projected through NSF LSA (Exp. 4/15)*
357.4
               
401.6
              
44.2
                 
Projected through SF LSA (Exp. 4/20)*
299.1
               
430.8
              
131.7
              
Remaining life after LSA*
348.2
               
549.0
              
200.8
              
Total expected net revenue remaining
1,004.7
            
1,381.4
           
376.7
              
Total net revenue
1,669.7
$          
2,032.2
$         
362.5
$            
Net Revenue Impact
Day 1 expected net revenues ($1,669.7)
Actual results plus forecasted impact ($2,032.2)
Portrayal of actual results through June 30, 2012 and current projections. All  information subject to change based on actual and estimated cash flows and
losses from covered portfolio. Quarterly recast process can generate significant differences based on actual and projected results.


Conclusion
12
2012 Strategy
Further improve credit-risk profile
Continue to add low-risk assets
Continue efficiency efforts
Continue improvement at BPNA
Robust capital position continues to improve
Revenue-generating capacity remains strong but headwinds are still
present
Economy in Puerto Rico stabilizing but asset generation still challenging
2012 target range net income of $210-$225 million
Incorporates unusual Q2 events (i.e., the tax benefit, and the after tax impact of the early repo
termination and the writedown of our held-for-sale portfolio)


Appendix
Appendix


14
P.R. Economic Overview
Approaching
a
balanced
budget:
projected
fiscal
2013
budget deficit  of $333 million, smallest since 2004 and is
expected to be balanced by fiscal 2014 from $3b in 2009
Tax
relief
for
individuals:
comprehensive
tax
reform
has
cut taxes on individuals by 25%, financed primarily with a
tax on multinational (U.S.) corporations with local
operations
Corporate rate reduced from 41% to 30%
Investment spending stabilizing:
11.5% increase of real gross domestic investment in
FY 2010-11 marks largest increase in more than a
decade
Housing Stimulus: $235 million (extended through
12/31/12)
Tourism Projects: $1.1B (30 projects, St. Regis, Ritz)
Public/Private Partnerships (PPPs): $1.4B billion toll
roads, $878 million schools, LMM Airport final bids
received July 2012
GDP –
Composition by sector
Recent Trends
Official forecast calls for first positive GNP growth since 2005. Forecast is +0.9% (fiscal 2012) and  +1.1% (fiscal 2013)
In
the
last
several
quarters,
indicators
such
as
retail
and
auto
sales,
home
sales,
cement
sales
and
sales
&
use
tax
among
others have improved
Unemployment rate 14.2%, lowest since March 2009
Source: Government Development Bank of PR bgfpr.com, PR Finance Housing
Authority,  PR commissioner of  Financial Institutions
2011 GDP-
$98.8B
PR Labor Market
2012 Monthly average up until May
46.4%
13.3%
12.5%
8.6%
8.0%
6.0%
2.9%
1.7%
0.6%
Manufacturing
Finance, insurance and
real estate
Services
Government
Trade
Tourism
Transportation and
other public utilities
Construction and Mining
Agriculture
-8%
-6%
-4%
-2%
0%
2%
4%
6%
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Total Jobs (Monthly Avg)
Avg Total Jobs Growth %


Who We Are –
Popular, Inc. 
Franchise
Financial services company
Headquartered in San Juan, Puerto Rico
$37 billion in assets (top 50 bank holding company in
the U.S.)
$25 billion in total loans
$27 billion in total deposits
279 branches serving customers in Puerto Rico, New
York, California, Florida, Illinois, U.S. Virgin Islands,
and New Jersey
NASDAQ ticker symbol: BPOP
Market Cap: $1.70 billion
Source: Company filings, SNL Financial
Note: Financial data as of June 30, 2012
1
As of June 30, 2012
Summary Corporate Structure
Assets = $36.6.bn
Popular
Mortgage,
Inc.
Popular Auto,
Inc.
Banco Popular
de Puerto Rico
Popular
Securities, Inc.
Assets = $28.0bn
Assets = $8.6 bn
Banco Popular
North America
Puerto Rico operations
Selected equity investments
(first two under corporate
segment and third under PR):
Popular
Insurance, Inc.
Popular North
America, Inc.
U.S. banking operations
Transaction processing,
business processes outsourcing
48.5% stake
2011 EBITDA of $132.96mm
Q1
2012
EBITDA
$36.23mm
Dominican
Republic bank
19.99% stake
Q2 2012 total
assets ~$3.3bn
PRLP 2011 Holdings
Construction and
commercial loans
vehicle
24.9% stake
15
1


P.R. Franchise Value Built Over 118 Years
Category
Market Position as of
Q1 2012
Market Share
as of  Q1 2012
Top Competitor
Institution/Group
Share
Total Deposits (Net of Brokered)
1
39%
Credit Unions
12%
Total Loans
1
35%
FirstBank
16%
Commercial & Construction Loans
1
40%
FirstBank
22%
Credit Cards
1
45%
MBNA
28%
Mortgage Loan Production
1
32%
Scotiabank
13%
Personal Loans
2
32%
Credit Unions
52%
Auto Loans/Leases
3
16%
Reliable
25%
Assets Under Management
3
14%
UBS
48%
Mortgage Loan Servicing Portfolio
1
$22.4B
Doral
$7.8B
Indisputable, sustained market leadership
Total Deposits (Net of Brokered)
Total Loans
Market Share Trend (2000 –
2012)
Source:  Puerto Rico Office of the Commissioner
of Financial Institutions
16
Source:  Puerto Rico Office of the Commissioner of Financial Institutions & 10K reports


$ in millions (Unaudited)
Q2 12
Q1 12
Variance
Q2 12
Q1 12
Variance
Net Interest Income
$298
$290
$8
$70
$74
($4)
Non Interest Income
85
114
(29)
15
16
(1)
Gross Revenues
383
404
(21)
85
90
(5)
Provision (non-covered)
66
68
(2)
15
15
0
Provision (covered WB)
38
18
20
           -
           -
              -
Provision for loan losses
104
86
18
15
15
0
Expenses
267
234
33
58
65
(7)
Tax Expense
(74)
17
(91)
1
1
0
Net Income (Loss)
$86
$67
$19
$11
$9
$2
NPLs  (HTM) ¹
$1,276
$1,343
($67)
$286
$338
($52)
NPLs  (HTM + HFS) ¹
1,453
1,570
(117)
288
344
         (56)
Loan loss reserve
564
586
           (22)
202
217
         (15)
Assets
$27,721
$28,027
($306)
$8,644
$8,665
($21)
Loans  (HTM)
18,932
19,082
(150)
5,750
5,618
        132
Loans  (HTM + HFS)
19,293
19,436
(143)
5,754
5,626
        128
Deposits
21,304
21,040
264
6,175
6,247
(72)
NIM
5.07%
4.90%
0.17%
3.55%
3.78%
-0.23%
PR
US
PR  & US Business
17
1
Excludes covered loans


Loan Portfolio Composition-
(Held in Portfolio-
Q2 2012)
18
Less risky loan composition…
Construction loan portfolio is down significantly since Q2 2009
Loans with an FDIC guarantee amount to 16% of all loans
Legacy portfolio includes loans from the US exited business lines*
($ in millions)
Q2 2009
Q2 2012
Q2 2009
Q2 2012
Q2 2009
Q2 2012
Construction
1,317
          
202
           
272
      
48
        
1,589
     
250
         
6%
1%
Commercial
7,229
          
6,163
        
4,495
  
3,440
  
11,724
   
9,603
     
47%
39%
Leasing
653
              
538
           
-
       
-
       
653
         
538
         
3%
2%
Consumer
3,220
          
3,199
        
1,099
  
666
      
4,319
     
3,865
     
18%
16%
Legacy
-
               
-
            
1,876
  
510
      
1,876
     
510
         
8%
2%
Mortgage
2,859
          
4,814
        
1,586
  
1,086
  
4,445
     
5,900
     
18%
24%
Total non-covered
15,278
       
14,916
     
9,328
  
5,750
  
24,606
   
20,666
   
100%
84%
Covered Loans WB
-
               
4,016
        
-
       
-
       
-
          
4,016
     
0%
16%
Total
15,278
       
18,932
     
9,328
  
5,750
  
24,606
   
24,682
   
100%
100%
Total
Q2 2009
% of
total HIP
Q2 2012
%of total
HIP
Puerto Rico
US
*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.


19
Consolidated Credit Summary (Excluding  Covered Loans)
Continued credit quality improvements in key metrics:
NPLs declined by $120 million, down 7% from Q1 2012
NCOs declined for the third consecutive quarter to $98 million
$ in millions
Q2 12
Q1 12
%
Q2 11
%
Loans Held to Maturity (HTM)
$20,666
$20,479
$187
0.9%
$20,658
$8
0.0%
Performing HFS
185
130
55
42.3%
109
76
69.7%
NPL HFS
179
232
(53)
-22.8%
400
(221)
-55.3%
Total Non Covered Loans
21,030
20,841
$189
0.9%
21,167
($137)
-0.6%
Non-performing loans (NPLs)
$1,562
$1,682
($120)
-7.1%
$1,625
($63)
-3.9%
Commercial
$767
$819
($52)
-6.3%
$740
$27
3.7%
Construction
$68
$70
($2)
-2.9%
$119
($51)
-42.8%
Legacy
$55
$79
($24)
-30.7%
$124
($69)
-56.0%
Mortgage
$633
$667
($34)
-5.1%
$588
$45
7.6%
Consumer
$40
$47
($7)
-14.9%
$54
($14)
-25.9%
NPLs HTM to loans HTM
7.56%
8.21%
-0.7%
-8.0%
7.86%
-0.3%
-3.8%
Net charge-offs (NCOs)
$98
$108
($10)
-9.3%
$134
($36)
-26.9%
Commercial
$40
$54
($15)
-25.9%
$69
($29)
-42.5%
Construction
$1
$0
$1
NM
($5)
$6
-119.6%
Legacy
$5
$4
$1
25.0%
$17
($12)
-67.9%
Mortgage
$18
$17
$1
5.9%
$11
$7
62.6%
Consumer
$34
$33
$1
3.0%
$42
($8)
-19.9%
NCOs to average loans HTM
1.93%
2.13%
-0.2%
-9.4%
2.59%
-0.7%
-25.5%
Provision for loan losses (PLL)
$82
$83
($1)
-1.2%
$96
($14)
-14.6%
PLL to total loans HTM
1.58%
1.61%
0.0%
-1.8%
1.85%
-0.3%
-14.6%
PLL to NCOs
0.83x
0.76x
0.07x
9.2%
0.72x
0.11x
15.3%
Allowance for loan losses (ALL)
$649
$665
($16)
-2.4%
$690
($41)
-5.9%
ALL to loans
(excl. LHFS)
3.14%
3.25%
-0.1%
-3.3%
3.34%
-0.2%
-6.0%
ALL to NPLs HTM
41.52%
39.53%
2.0%
5.0%
42.45%
-0.9%
-2.2%
Q2 12 vs Q1 12
Q2 12 vs Q2 11


Coverage Ratio
1
Allowance to Loan Losses / Non-performing Loans
2
Allowance to Loan Losses + Lifetime Charge-offs / Non-performing Loans
3
Includes Legacy loans
The Reserve to NPL coverage ratio of 42% does not take into account the
high percentage of individually analyzed loans and lifetime charge-offs
Total NPLs
$1,562
Individually Analyzed
$763
Coverage
Ratio
(CR)
:
5%
Adjusted
Coverage
Ratio
(ACR)
:
35%
Collectively Analyzed
$799
Coverage
Ratio
(CR)
:
79%
Adjusted
Coverage
Ratio
(ACR)
:
101%
Mort.
Comm.
3
Const.
3
Cons.
Mort.
Comm.
3
Const.
3
Cons.
NPLs
230
454
71
7
403
356
8
32
Lifetime NCOs
11
158
69
0
59
130
7
0
Reserve
30
6
0
1
119
328
15
148
CR
13%
1%
0%
14%
30%
35%
100%
458%
ACR
18%
36%
97%
14%
44%
71%
188%
458%
$ in millions
20
1
2
2
1


Balance Sheet Impact
FDIC-Assisted Acquisition detail:
Covered loans accounted for under ASC 310-30
21
Portrayal of actual results through June 30, 2012 and current projections. All  information subject to change based on actual and estimated cash flows and
losses from covered portfolio. Quarterly recast process can generate significant differences based on actual and projected results.
(Dollars in Millions)
Day 1 Assumptions
Accretable Yield
1,538.1
$   
Amortization of Indemnity Asset
212.8
        
Provision Expense (embedded in above figures in Day 1)
-
            
Clawback Accretion
(81.2)
         
Day 1 Assumption of Net Revenue
1,669.7
     
Changes to Revenue Assumptions through recast process
Increase in cash flow on loans (accretable yield)
739.5
        
Impact of lower projected losses (reduce IA)
(338.3)
       
Provision Expense, net of mirror accounting (through 6/30/12)
(35.7)
         
Decrease in expected losses (increase clawback)
(3.0)
           
Net Changes to Day 1 Assumptions
362.5
        
Revised Net Revenue Assumptions
2,032.2
     
Net Revenue Recognized since Day 1 through June 30, 2012
650.8
        
Pending net revenue to be recognized as of June 30, 2012
Accretable Yield
1,574.9
     
Amortization of Indemnity Asset
(121.3)
       
Provision Expense (embedded in recast process)
-
            
Clawback Accretion
(72.2)
         
Net revenue to be recognized
1,381.4
$   
Revenue Impact
Balances Day 1
Covered Loan Balances
4,909.6
$      
Indemnity Asset
2,425.9
        
Clawback Payable
(88.2)
            
Balances June 30, 2012
Covered Loan Balances
3,715.5
$      
Indemnity Asset
1,631.6
        
Allowance
(94.0)
            
Clawback Payable
(100.2)
          


Credit Ratings Update
Our senior unsecured ratings have been gradually improving since
2010:
Moody’s:
Ba1
Negative Outlook
S&P:
B+
Stable Outlook
Fitch:
B+
Positive Outlook
April 2012: Moody’s placing most of the PR banks under review with the
possibility of downgrades, due to the state of the Puerto Rico economy
January 2012:  Fitch raised BPOPs outlook to positive
December 2011: S&P raised its ratings on BPPR to BB from BB-
and changed
outlook to stable given revised bank criteria to Regional banks
July 2011: S&P raised our senior unsecured rating by one notch to B+
As the P.R. economy stabilizes and our credit metrics improve, we should see
upward pressure on the ratings
22


Financial Results
Financial Results
Second Quarter 2012
Second Quarter 2012