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Condensed consolidating financial information of guarantor and issuers of registered guaranteed securities
9 Months Ended
Sep. 30, 2011
Notes to Financial Statements [Abstract] 
Schedule Condensed Financial Statements [Text Block]

Note 31 – Condensed consolidating financial information of guarantor and issuers of registered guaranteed securities

 

The following condensed consolidating financial information presents the financial position of Popular, Inc. Holding Company (“PIHC”) (parent only), Popular International Bank, Inc. (“PIBI”), Popular North America, Inc. (“PNA”) and all other subsidiaries of the Corporation at September 30, 2011, December 31, 2010 and September 30, 2010, and the results of their operations and cash flows for periods ended September 30, 2011 and 2010.

PIBI is an operating subsidiary of PIHC and is the holding company of its wholly-owned subsidiaries: Popular Insurance V.I., Inc; Tarjetas y Transacciones en Red Tranred, C.A.; and PNA. Prior to the internal reorganization and sale of the ownership interest in EVERTEC, ATH Costa Rica S.A., and T.I.I. Smart Solutions Inc. were also wholly-owned subsidiaries of PIBI.

PNA is an operating subsidiary of PIBI and is the holding company of its wholly-owned subsidiaries: Equity One, Inc.; and Banco Popular North America (“BPNA”), including its wholly-owned subsidiaries Popular Equipment Finance, Inc., Popular Insurance Agency, U.S.A., and E-LOAN, Inc.

PIHC fully and unconditionally guarantees all registered debt securities issued by PNA.

A source of income for PIHC consists of dividends from BPPR. Under the existing federal banking regulations, the prior approval of the Federal Reserve System is required for any dividend from BPPR or BPNA to the PIHC if the total of all dividends declared by each entity during the calendar year would exceed the total of its net income for that year, as defined by the Federal Reserve Board, combined with its retained net income for the preceding two years, less any required transfers to surplus or to a fund for the retirement of any preferred stock. Under this test, at September 30, 2011, BPPR could have declared a dividend of approximately $237 million (September 30, 2010 - $100 million; December 31, 2010 - $78 million). However, on July 25, 2011, PIHC and BPPR entered into a Memorandum of Understanding with the Federal Reserve Bank of New York and the Office of the Commissioner of Financial Institutions of Puerto Rico that requires the prior approval of these entities prior to the payment of any dividends by BPPR to PIHC. BPNA could not declare any dividends without the approval of the Federal Reserve Board.

 

 

Condensed Consolidated Statement of Condition (Unaudited)         
                  
 At September 30, 2011
        All other    
   Popular Inc.PIBIPNA subsidiaries and Elimination Popular, Inc.
(In thousands) Holding Co.Holding Co.Holding Co. eliminations entries Consolidated
ASSETS                
Cash and due from banks $ 1,478$ 299$ 271 $ 567,336 $ (2,243) $ 567,141
Money market investments   5,922  14,692  283   1,263,125   (14,883)   1,269,139
Trading account securities, at fair value   -  -  -   272,939   -   272,939
Investment securities available-for-sale, at                 
 fair value   36,400  2,621  -   5,205,308   (17,800)   5,226,529
Investment securities held-to-maturity, at                 
 amortized cost   197,364  1,000  -   115,182   (185,000)   128,546
Other investment securities, at lower of cost                
 or realizable value   10,850  1  4,492   158,226   -   173,569
Investment in subsidiaries   4,088,974  1,166,194  1,636,768   -   (6,891,936)   -
Loans held-for-sale, at lower of cost or                 
 fair value   -  -  -   368,777   -   368,777
Loans held-in-portfolio:                
 Loans not covered under loss sharing                 
  agreements with the FDIC   264,056  -  -   20,744,111  ($232,930)   20,775,237
 Loans covered under loss sharing                 
  agreements with the FDIC   -  -  -   4,512,423   -   4,512,423
 Less - Unearned income   -  -  -   101,351   -   101,351
  Allowance for loan losses   8  -  -   772,913   -   772,921
 Total loans held-in-portfolio, net   264,048  -  -   24,382,270   (232,930)   24,413,388
FDIC loss share asset   -  -  -   1,798,339   -   1,798,339
Premises and equipment, net   2,723  -  119   533,687   -   536,529
Other real estate not covered under loss                 
 sharing agreements with the FDIC   -  -  -   175,785   -   175,785
Other real estate covered under loss                 
 sharing agreements with the FDIC   -  -  -   75,339   -   75,339
Accrued income receivable   2,196  22  31   132,160   (146)   134,263
Mortgage servicing assets, at fair value   -  -  -   157,226   -   157,226
Other assets   219,133  74,779  15,045   1,890,872   (31,300)   2,168,529
Goodwill   -  -  -   648,353   -   648,353
Other intangible assets   554  -  -   63,658   -   64,212
Total assets $ 4,829,642$ 1,259,608$ 1,657,009 $ 37,808,582 $ (7,376,238) $ 38,178,603
LIABILITIES AND STOCKHOLDERS' EQUITY             
Liabilities:                 
Deposits:                 
 Non-interest bearing $ -$ -$ - $ 5,557,943 $ (30,493) $ 5,527,450
 Interest bearing   -  -  -   22,440,926   (15,036)   22,425,890
  Total deposits   -  -  -   27,998,869   (45,529)   27,953,340
Federal funds purchased and assets sold                
 under agreements to repurchase   -  -  -   2,601,606   -   2,601,606
Other short-term borrowings   -  -  19,000   354,100   (206,900)   166,200
Notes payable   754,202  -  427,270   1,369,273   -   2,550,745
Subordinated notes   -  -  -   185,000   (185,000)   -
Other liabilities   62,839  6,142  45,376   826,495   (46,741)   894,111
Total liabilities   817,041  6,142  491,646   33,335,343   (484,170)   34,166,002
Stockholders' equity:                 
Preferred stock   50,160  -  -   -   -   50,160
Common stock   10,249  4,066  2   51,564   (55,632)   10,249
Surplus   4,090,852  4,092,743  4,103,208   5,857,287   (14,044,711)   4,099,379
Accumulated deficit   (193,243)  (2,874,262)  (2,997,586)   (1,518,816)   7,382,137   (201,770)
Treasury stock, at cost   (992)  -  -   -   -   (992)
Accumulated other comprehensive                 
 income, net of tax   55,575  30,919  59,739   83,204   (173,862)   55,575
Total stockholders' equity   4,012,601  1,253,466  1,165,363   4,473,239   (6,892,068)   4,012,601
Total liabilities and stockholders' equity $ 4,829,642$ 1,259,608$ 1,657,009 $ 37,808,582 $ (7,376,238) $ 38,178,603

Condensed Consolidated Statement of Condition (Unaudited)         
                  
 At December 31, 2010
       All other    
   Popular, Inc.PIBIPNA subsidiaries and Elimination Popular, Inc.
(In thousands) Holding Co.Holding Co.Holding Co. eliminations entries Consolidated
ASSETS                
Cash and due from banks $ 1,638$ 618$ 1,576 $ 451,723 $ (3,182) $ 452,373
Money market investments   1  7,512  261   979,232   (7,711)   979,295
Trading account securities, at fair value   -  -  -   546,713   -   546,713
Investment securities available-for-sale, at                 
 fair value   35,263  3,863  -   5,216,013   (18,287)   5,236,852
Investment securities held-to-maturity, at                 
 amortized cost   210,872  1,000  -   95,482   (185,000)   122,354
Other investment securities, at lower of cost                
 or realizable value   10,850  1  4,492   148,170   -   163,513
Investment in subsidiaries   3,836,258  1,096,907  1,578,986   -   (6,512,151)   -
Loans held-for-sale, at lower of cost or                 
 fair value   -  -  -   893,938   -   893,938
Loans held-in-portfolio:                
 Loans not covered under loss sharing                 
  agreements with the FDIC   476,082  1,285  -   20,798,876   (441,967)   20,834,276
 Loans covered under loss sharing                 
  agreements with the FDIC   -  -  -   4,836,882   -   4,836,882
 Less - Unearned income   -  -  -   106,241   -   106,241
  Allowance for loan losses   60  -  -   793,165   -   793,225
 Total loans held-in-portfolio, net   476,022  1,285  -   24,736,352   (441,967)   24,771,692
FDIC loss share asset   -  -  -   2,318,183   -   2,318,183
Premises and equipment, net   2,830  -  122   542,501   -   545,453
Other real estate not covered under loss                 
 sharing agreements with the FDIC   -  -  -   161,496   -   161,496
Other real estate covered under loss                 
  sharing agreements with the FDIC   -  -  -   57,565   -   57,565
Accrued income receivable   1,510  33  111   149,101   (97)   150,658
Mortgage servicing assets, at fair value   -  -  -   166,907   -   166,907
Other assets   246,209  86,116  15,105   1,127,870   (25,413)   1,449,887
Goodwill   -  -  -   647,387   -   647,387
Other intangible assets   554  -  -   58,142   -   58,696
Total assets $ 4,822,007$ 1,197,335$ 1,600,653 $ 38,296,775 $ (7,193,808) $ 38,722,962
LIABILITIES AND STOCKHOLDERS' EQUITY             
Liabilities:                 
Deposits:                 
 Non-interest bearing $ -$ -$ - $ 4,961,417 $ (22,096) $ 4,939,321
 Interest bearing   -  -  -   21,830,669   (7,790)   21,822,879
  Total deposits   -  -  -   26,792,086   (29,886)   26,762,200
Federal funds purchased and assets sold                
 under agreements to repurchase   -  -  -   2,412,550   -   2,412,550
Other short-term borrowings   -  -  32,500   743,922   (412,200)   364,222
Notes payable   835,793  -  430,121   2,905,554   (1,285)   4,170,183
Subordinated notes   -  -  -   185,000   (185,000)   -
Other liabilities   185,683  3,921  47,169   1,028,614   (52,111)   1,213,276
Total liabilities   1,021,476  3,921  509,790   34,067,726   (680,482)   34,922,431
Stockholders' equity:                 
Preferred stock   50,160  -  -   -   -   50,160
Common stock   10,229  4,066  2   51,633   (55,701)   10,229
Surplus   4,085,478  4,158,157  4,066,208   5,862,091   (14,077,929)   4,094,005
Accumulated deficit   (338,801)  (2,958,347)  (3,000,682)   (1,714,659)   7,665,161   (347,328)
Treasury stock, at cost   (574)  -  -   -   -   (574)
Accumulated other comprehensive                 
 (loss) income, net of tax   (5,961)  (10,462)  25,335   29,984   (44,857)   (5,961)
Total stockholders' equity   3,800,531  1,193,414  1,090,863   4,229,049   (6,513,326)   3,800,531
Total liabilities and stockholders' equity $ 4,822,007$ 1,197,335$ 1,600,653 $ 38,296,775 $ (7,193,808) $ 38,722,962

Condensed Consolidated Statement of Condition (Unaudited)         
                  
 At September 30, 2010
          All other       
   Popular, Inc.PIBIPNA subsidiaries and Elimination Popular, Inc.
(In thousands)  Holding Co.Holding Co.Holding Co. eliminations entries Consolidated
ASSETS                
Cash and due from banks $ 1,652$ 368$ 734 $ 580,530 $ (2,473) $ 580,811
Money market investments   164,852  5,907  306   2,023,840   (170,956)   2,023,949
Trading account securities, at fair value   -  -  -   483,192   -   483,192
Investment securities available-for-sale, at                 
 fair value   35,000  3,487  -   5,721,445   (18,449)   5,741,483
Investment securities held-to-maturity, at                 
 amortized cost   210,812  1,000  -   187,340   (185,000)   214,152
Other investment securities, at lower of cost                
 or realizable value   10,850  1  4,492   142,966   -   158,309
Investment in subsidiaries   3,879,282  1,033,087  1,507,550   -   (6,419,919)   -
Loans held-for-sale, at lower of cost or                 
 fair value   -  -  -   115,088   -   115,088
Loans held-in-portfolio:                
 Loans not covered under loss sharing                 
  agreements with the FDIC   590,826  1,516  -   22,211,004   (555,234)   22,248,112
 Loans covered under loss sharing                 
  agreements with the FDIC   -  -  -   4,953,195   -   4,953,195
 Less - Unearned income   -  -  -   106,685   -   106,685
  Allowance for loan losses   60  -  -   1,243,934   -   1,243,994
 Total loans held-in-portfolio, net   590,766  1,516  -   25,813,580   (555,234)   25,850,628
FDIC loss share asset   -  -  -   2,324,978   -   2,324,978
Premises and equipment, net   3,076  -  122   528,651   -   531,849
Other real estate not covered under loss                 
 sharing agreements with the FDIC   -  -  -   168,823   -   168,823
Other real estate covered under loss                 
  sharing agreements with the FDIC   -  -  -   56,368   -   56,368
Accrued income receivable   179  8  31   160,016   (67)   160,167
Mortgage servicing assets, at fair value   -  -  -   165,947   -   165,947
Other assets   208,317  81,142  15,533   1,162,461   (24,295)   1,443,158
Goodwill   -  -  -   645,944   -   645,944
Other intangible assets   554  -  -   59,884   -   60,438
Total assets $ 5,105,340$ 1,126,516$ 1,528,768 $ 40,341,053 $ (7,376,393) $ 40,725,284
LIABILITIES AND STOCKHOLDERS' EQUITY             
Liabilities:                 
Deposits:                 
 Non-interest bearing $ -$ -$ - $ 5,397,313 $ (25,874) $ 5,371,439
 Interest bearing   -  -  -   22,374,886   (6,281)   22,368,605
  Total deposits   -  -  -   27,772,199   (32,155)   27,740,044
Federal funds purchased and assets sold                
 under agreements to repurchase   -  -  -   2,522,939   (164,800)   2,358,139
Other short-term borrowings   -  -  25,200   691,342   (525,200)   191,342
Notes payable   830,134  -  430,052   3,886,482   (1,516)   5,145,152
Subordinated notes   -  -  -   185,000   (185,000)   -
Other liabilities   155,074  3,183  45,886   1,013,775   (47,442)   1,170,476
Total liabilities   985,208  3,183  501,138   36,071,737   (956,113)   36,605,153
Stockholders' equity:                 
Preferred stock   50,160  -  -   -   -   50,160
Common stock   10,229  4,066  2   51,633   (55,701)   10,229
Surplus   4,085,775  3,908,157  3,816,208   5,612,091   (13,327,929)   4,094,302
Accumulated deficit   (111,349)  (2,786,574)  (2,821,556)   (1,515,934)   7,115,536   (119,877)
Treasury stock, at cost   (545)  -  -   -   -   (545)
Accumulated other comprehensive                 
 income (loss), net of tax   85,862  (2,316)  32,976   121,526   (152,186)   85,862
Total stockholders' equity   4,120,132  1,123,333  1,027,630   4,269,316   (6,420,280)   4,120,131
Total liabilities and stockholders' equity $ 5,105,340$ 1,126,516$ 1,528,768 $ 40,341,053 $ (7,376,393) $ 40,725,284

Condensed Statement of Operations (Unaudited)               
                    
    Quarter ended September 30, 2011
           All other       
   Popular, Inc.PIBIPNAsubsidiaries andEliminationPopular, Inc.
(In thousands) Holding Co.Holding Co.Holding Co.eliminationsentriesConsolidated
INTEREST INCOME:                   
 Loans $ 1,915 $ - $ - $ 428,473 $ (1,389) $ 428,999
 Money market investments   -   24   1   886   (25)   886
 Investment securities   4,031   16   81   50,178   (3,221)   51,085
 Trading account securities   -   -   -   10,788   -   10,788
  Total interest income   5,946   40   82   490,325   (4,635)   491,758
INTEREST EXPENSE:                   
 Deposits   -   -   -   65,960   (92)   65,868
 Short-term borrowings   -   -   138   14,575   (969)   13,744
 Long-term debt   22,983   -   8,054   14,714   (2,916)   42,835
  Total interest expense   22,983   -   8,192   95,249   (3,977)   122,447
Net interest (expense) income    (17,037)   40   (8,110)   395,076   (658)   369,311
Provision for loan losses   -   -   -   176,276   -   176,276
Net interest (expense) income                   
 after provision for loan losses   (17,037)   40   (8,110)   218,800   (658)   193,035
Service charges on deposit accounts   -   -   -   46,346   -   46,346
Other service fees   -   -   -   66,306   (3,642)   62,664
Net (loss) gain on sale and valuation adjustments of                   
 investment securities   -   (88)   -   8,222   -   8,134
Trading account profit   -   -   -   2,912   -   2,912
Net gain on sale of loans, including valuation                   
 adjustments on loans held-for-sale   -   -   -   20,294   -   20,294
Adjustments (expense) to indemnity reserves                   
 on loans sold   -   -   -   (10,285)   -   (10,285)
FDIC loss share expense   -   -   -   (5,361)   -   (5,361)
Other operating (loss) income   (1,823)   2,911   (306)   9,193   (12,289)   (2,314)
  Total non-interest (loss) income   (1,823)   2,823   (306)   137,627   (15,931)   122,390
OPERATING EXPENSES:                  
Personnel costs   8,280   88   -   103,356   -   111,724
Net occupancy expenses   802   7   1   24,220   855   25,885
Equipment expenses   831   1   -   9,685   -   10,517
Other taxes   803   -   -   11,588   -   12,391
Professional fees   2,658   9   3   63,885   (17,799)   48,756
Communications   75   -   1   6,724   -   6,800
Business promotion   430   -   -   14,220   -   14,650
FDIC deposit insurance   -   -   -   23,285   -   23,285
Loss on early extinguishment of debt   -   -   -   109   -   109
Other real estate owned (OREO) expenses    -   -   -   3,234   -   3,234
Other operating expenses   (12,733)   (2,771)   111   38,542   (608)   22,541
Amortization of intangibles   -   -   -   2,463   -   2,463
  Total operating expenses   1,146   (2,666)   116   301,311   (17,552)   282,355
(Loss) income before income tax                   
 and equity in earnings (losses) of subsidiaries   (20,006)   5,529   (8,532)   55,116   963   33,070
Income tax (benefit) expense   (642)   1,226   (23)   4,652   324   5,537
(Loss) income before equity in                   
 earnings (losses) of subsidiaries   (19,364)   4,303   (8,509)   50,464   639   27,533
Equity in undistributed earnings (losses) of                  
 subsidiaries   46,897   (3,825)   5,424   -   (48,496)   -
NET INCOME (LOSS) $ 27,533 $ 478 $ (3,085) $ 50,464 $ (47,857) $ 27,533

Condensed Statement of Operations (Unaudited)               
                    
    Nine months ended September 30, 2011
           All other      
   Popular, Inc.PIBIPNAsubsidiaries andEliminationPopular, Inc.
(In thousands) Holding Co.Holding Co.Holding Co.eliminationsentriesConsolidated
INTEREST INCOME:                   
 Loans $ 6,973 $ 16 $ - $ 1,293,139 $ (5,294) $ 1,294,834
 Money market investments   5   71   4   2,809   (130)   2,759
 Investment securities   12,192   38   242   154,374   (9,663)   157,183
 Trading account securities   -   -   -   29,332   -   29,332
  Total interest income   19,170   125   246   1,479,654   (15,087)   1,484,108
INTEREST EXPENSE:                   
 Deposits   -   -   -   213,758   (339)   213,419
 Short-term borrowings   50   -   694   44,685   (3,951)   41,478
 Long-term debt   71,315   -   23,341   56,111   (8,768)   141,999
  Total interest expense   71,365   -   24,035   314,554   (13,058)   396,896
Net interest (expense) income    (52,195)   125   (23,789)   1,165,100   (2,029)   1,087,212
Provision for loan losses   -   -   -   395,912   -   395,912
Net interest (expense) income                   
 after provision for loan losses   (52,195)   125   (23,789)   769,188   (2,029)   691,300
Service charges on deposit accounts   -   -   -   138,778   -   138,778
Other service fees   -   -   -   191,339   (11,716)   179,623
Net (loss) gain on sale and valuation adjustments of                   
 investment securities   -   (88)   -   8,132   -   8,044
Trading account profit   -   -   -   3,287   -   3,287
Net gain on sale of loans, including valuation                   
 adjustments on loans held-for-sale   -   -   -   14,756   -   14,756
Adjustments (expense) to indemnity reserves                   
 on loans sold   -   -   -   (29,587)   -   (29,587)
FDIC loss share income    -   -   -   49,344   -   49,344
Fair value change in equity appreciation instrument   -   -   -   8,323   -   8,323
Other operating income    18,531   28,159   1,082   28,880   (38,302)   38,350
  Total non-interest income   18,531   28,071   1,082   413,252   (50,018)   410,918
OPERATING EXPENSES:                  
Personnel costs   22,142   261   -   306,420   -   328,823
Net occupancy expenses   2,506   24   2   71,275   2,621   76,428
Equipment expenses   2,411   4   -   30,899   -   33,314
Other taxes   1,465   -   -   37,521   -   38,986
Professional fees   9,330   126   9   190,087   (54,629)   144,923
Communications   309   5   10   20,874   -   21,198
Business promotion   1,238   -   -   34,604   -   35,842
FDIC deposit insurance   -   -   -   68,640   -   68,640
Loss on early extinguishment of debt   8,000   -   -   637   -   8,637
Other real estate owned (OREO) expenses    -   -   -   11,885   -   11,885
Other operating expenses   (38,250)   5,797   332   97,381   (1,705)   63,555
Amortization of intangibles   -   -   -   6,973   -   6,973
  Total operating expenses   9,151   6,217   353   877,196   (53,713)   839,204
(Loss) income before income tax                   
 and equity in earnings of subsidiaries   (42,815)   21,979   (23,060)   305,244   1,666   263,014
Income tax expense (benefit)   2,495   5,688   (287)   106,143   625   114,664
(Loss) income before equity in                   
 earnings of subsidiaries   (45,310)   16,291   (22,773)   199,101   1,041   148,350
Equity in undistributed earnings of subsidiaries   193,660   3,894   25,868   -   (223,422)   -
NET INCOME  $ 148,350 $ 20,185 $ 3,095 $ 199,101 $ (222,381) $ 148,350

Condensed Statement of Operations (Unaudited)               
                    
    Quarter ended September 30, 2010
           All other       
  Popular, Inc.PIBIPNAsubsidiaries andEliminationPopular, Inc.
(In thousands)Holding Co.Holding Co.Holding Co.eliminationsentriesConsolidated
INTEREST AND DIVIDEND INCOME:                   
 Dividend income from subsidiaries $ 80,700 $ - $ - $ - $ (80,700) $ -
 Loans   1,217   -   -   455,477   (1,063)   455,631
 Money market investments   2   15   -   1,391   (17)   1,391
 Investment securities   5,673   7   81   56,848   (5,332)   57,277
 Trading account securities   -   -   -   7,136   -   7,136
  Total interest and dividend income   87,592   22   81   520,852   (87,112)   521,435
INTEREST EXPENSE:                   
 Deposits   -   -   -   86,346   (16)   86,330
 Short-term borrowings   8   -   185   15,816   (1,064)   14,945
 Long-term debt   26,485   -   7,635   34,756   (5,494)   63,382
  Total interest expense   26,493   -   7,820   136,918   (6,574)   164,657
Net interest income (expense)    61,099   22   (7,739)   383,934   (80,538)   356,778
Provision for loan losses   -   -   -   215,013   -   215,013
Net interest income (expense)                   
 after provision for loan losses   61,099   22   (7,739)   168,921   (80,538)   141,765
Service charges on deposit accounts   -   -   -   48,608   -   48,608
Other service fees   -   -   -   100,029   793   100,822
Net gain on sale and valuation adjustments of                   
 investment securities   -   -   -   3,732   -   3,732
Trading account profit   -   -   -   5,860   -   5,860
Net gain on sale of loans, including valuation                   
 adjustments on loans held-for-sale   -   -   -   4,250   -   4,250
Adjustments (expense) to indemnity reserves                   
 on loans sold   -   -   -   (5,823)   -   (5,823)
FDIC loss share expense   -   -   -   (7,668)   -   (7,668)
Fair value change in equity appreciation instrument   -   -   -   10,641   -   10,641
Gain on sale of processing and technology business   640,802   -   -   -   -   640,802
Other operating (loss) income   (18)   3,370   (2,166)   25,874   (2,390)   24,670
  Total non-interest income (loss)   640,784   3,370   (2,166)   185,503   (1,597)   825,894
OPERATING EXPENSES:                  
Personnel costs   3,547   102   -   137,556   -   141,205
Net occupancy expenses   689   8   1   27,727   -   28,425
Equipment expenses   708   1   -   24,723   -   25,432
Other taxes   513   -   -   13,359   -   13,872
Professional fees   19,151   3   3   29,645   (578)   48,224
Communications   127   5   5   9,377   -   9,514
Business promotion   221   -   -   11,039   -   11,260
FDIC deposit insurance   -   -   -   17,183   -   17,183
Loss on early extinguishment of debt   15,750   -   -   9,698   -   25,448
Other real estate owned (OREO) expenses    2   -   -   6,995   -   6,997
Other operating expenses   (2,910)   (100)   108   44,881   (409)   41,570
Amortization of intangibles   -   -   -   2,411   -   2,411
  Total operating expenses   37,798   19   117   334,594   (987)   371,541
Income (loss) before income tax                   
 and equity in losses of subsidiaries   664,085   3,373   (10,022)   19,830   (81,148)   596,118
Income tax expense (benefit)   84,664   1,335   (297)   16,139   191   102,032
Income (loss) before equity in                   
 losses of subsidiaries   579,421   2,038   (9,725)   3,691   (81,339)   494,086
Equity in undistributed losses of subsidiaries   (85,335)   (24,235)   (14,330)   -   123,900   -
NET INCOME (LOSS) $ 494,086 $ (22,197) $ (24,055) $ 3,691 $ 42,561 $ 494,086

Condensed Statement of Operations (Unaudited)               
                    
    Nine months ended September 30, 2010
           All other      
   Popular, Inc.PIBIPNAsubsidiaries andEliminationPopular, Inc.
(In thousands) Holding Co.Holding Co.Holding Co.eliminationsentriesConsolidated
INTEREST AND DIVIDEND INCOME:                   
 Dividend income from subsidiaries $ 168,100 $ 7,500 $ - $ - $ (175,600) $ -
 Loans   4,301   -   -   1,230,774   (3,785)   1,231,290
 Money market investments   52   237   1   4,326   (290)   4,326
 Investment securities   19,113   24   242   183,761   (18,022)   185,118
 Trading account securities   -   -   -   20,313   -   20,313
  Total interest and dividend income   191,566   7,761   243   1,439,174   (197,697)   1,441,047
INTEREST EXPENSE:                   
 Deposits   -   -   -   270,157   (238)   269,919
 Short-term borrowings   46   -   307   49,225   (3,822)   45,756
 Long-term debt   86,231   -   22,960   94,415   (18,524)   185,082
  Total interest expense   86,277   -   23,267   413,797   (22,584)   500,757
Net interest income (expense)   105,289   7,761   (23,024)   1,025,377   (175,113)   940,290
Provision for loan losses   -   -   -   657,471   -   657,471
Net interest income (expense)                  
 after provision for loan losses   105,289   7,761   (23,024)   367,906   (175,113)   282,819
Service charges on deposit accounts   -   -   -   149,865   -   149,865
Other service fees   -   -   -   307,677   (1,810)   305,867
Net gain on sale and valuation adjustments of                   
 investment securities   -   -   -   4,210   -   4,210
Trading account profit   -   -   -   8,101   -   8,101
Net gain on sale of loans, including valuation                   
 adjustments on loans held-for-sale   -   -   -   14,396   -   14,396
Adjustments (expense) to indemnity reserves                   
 on loans sold   -   -   -   (37,502)   -   (37,502)
FDIC loss share expense   -   -   -   (22,705)   -   (22,705)
Fair value change in equity appreciation instrument   -   -   -   35,035   -   35,035
Gain on sale of processing and technology business   640,802   -   -   -   -   640,802
Other operating income (loss)   1,198   14,931   (3,640)   75,641   (3,612)   84,518
  Total non-interest income (loss)   642,000   14,931   (3,640)   534,718   (5,422)   1,182,587
OPERATING EXPENSES:                  
Personnel costs   16,080   321   -   384,167   (399)   400,169
Net occupancy expenses   2,096   26   2   84,235   -   86,359
Equipment expenses   2,148   1   -   72,082   -   74,231
Other taxes   1,337   -   -   37,298   -   38,635
Professional fees   26,103   10   9   85,194   (1,818)   109,498
Communications   360   16   10   31,242   -   31,628
Business promotion   663   -   -   29,096   -   29,759
FDIC deposit insurance   -   -   -   49,894   -   49,894
Loss on early extinguishment of debt   15,750   -   -   10,676   -   26,426
Other real estate owned (OREO) expenses    21   -   -   26,301   -   26,322
Other operating expenses   (25,977)   (299)   324   128,345   (1,359)   101,034
Amortization of intangibles   -   -   -   6,915   -   6,915
  Total operating expenses   38,581   75   345   945,445   (3,576)   980,870
Income (loss) before income tax                   
 and equity in losses of subsidiaries   708,708   22,617   (27,009)   (42,821)   (176,959)   484,536
Income tax expense (benefit)   83,025   3,136   (297)   33,757   373   119,994
Income (loss) before equity in                   
 losses of subsidiaries   625,683   19,481   (26,712)   (76,578)   (177,332)   364,542
Equity in undistributed losses of subsidiaries   (261,141)   (200,353)   (167,324)   -   628,818   -
NET INCOME (LOSS) $ 364,542 $ (180,872) $ (194,036) $ (76,578) $ 451,486 $ 364,542

Condensed Consolidating Statement of Cash Flows (Unaudited)

 

      For the nine months ended September 30, 2011
            All other    
      Popular, Inc. PIBI PNA subsidiaries Elimination Popular, Inc.
(In thousands) Holding Co. Holding Co. Holding Co. and eliminations entries Consolidated
                 
Cash flows from operating activities:             
                 
Net income $ 148,350$ 20,185$ 3,095$ 199,101$ (222,381)$ 148,350
                 
Adjustments to reconcile net income to net cash            
 (used in) provided by operating activities:            
 Equity in undistributed earnings of subsidiaries  (193,660)  (3,894)  (25,868)  -  223,422  -
 Provision for loan losses   -  -  -  395,912  -  395,912
 Amortization of intangibles  -  -  -  6,973  -  6,973
 Depreciation and amortization of premises and            
  equipment  582  -  2  34,280  -  34,864
 Net (accretion of discounts) amortization of             
  premiums and deferred fees   18,397  -  149  (115,727)  (487)  (97,668)
 Impairment losses on net assets to be disposed of  -  6,085  -  -  -  6,085
 Fair value adjustments of mortgage servicing rights  -  -  -  26,373  -  26,373
 Fair value change in equity appreciation instrument   -  -  -  (8,323)  -  (8,323)
 FDIC loss share income  -  -  -  (49,344)  -  (49,344)
 FDIC deposit insurance expense  -  -  -  68,640  -  68,640
 Adjustments (expense) to indemnity reserves on             
  loans sold  -  -  -  29,587  -  29,587
 (Earnings) losses from investments under the             
  equity method  (11,271)  (14,699)  (1,082)  -  38,302  11,250
 Deferred income tax expense  3,555  2,330  (264)  38,362  625  44,608
 Loss (gain) on:            
   Disposition of premises and equipment  7  -  -  (2,026)  -  (2,019)
   Sale and valuation adjustment of investment            
    securities   -  88  -  (8,132)  -  (8,044)
   Sale of loans, including valuation adjustments             
    on loans held for sale  -  -  -  (14,756)  -  (14,756)
   Sale of equity method investments  (5,493)  (11,414)  -  -  -  (16,907)
 Acquisitions of loans held-for-sale  -  -  -  (253,401)  -  (253,401)
 Proceeds from sale of loans held-for-sale  -  -  -  101,549  -  101,549
 Net disbursements on loans held-for-sale  -  -  -  (617,591)  -  (617,591)
 Net (increase) decrease in:            
   Trading securities  -  -  -  492,882  -  492,882
   Accrued income receivable  (686)  (23)  80  15,504  49  14,924
   Other assets  4,134  9,250  1,406  (9,751)  (30,615)  (25,576)
 Net increase (decrease) in:            
   Interest payable  (3,467)  -  3,048  (6,964)  39  (7,344)
   Pension and other postretirement benefits             
    obligations  -  -  -  (128,802)  -  (128,802)
   Other liabilities  (72,709)  (4,919)  (2,349)  (32,086)  2,908  (109,155)
Total adjustments  (260,611)  (17,196)  (24,878)  (36,841)  234,243  (105,283)
Net cash (used in) provided by operating activities  (112,261)  2,989  (21,783)  162,260  11,862  43,067
                 
Cash flows from investing activities:            
 Net (increase) decrease in money market            
   investments   (5,921)  (7,180)  (22)  (283,893)  7,172  (289,844)
 Purchases of investment securities:            
   Available-for-sale  -  -  -  (1,198,613)  -  (1,198,613)
   Held-to-maturity  (37,093)  (1,000)  -  (27,265)  -  (65,358)
   Other  -  -  -  (116,582)  -  (116,582)
 Proceeds from calls, paydowns, maturities and            
  redemptions of investment securities:            
   Available-for-sale  -  -  -  979,868  -  979,868
   Held-to-maturity  50,613  1,000  -  3,004  -  54,617
   Other  -  -  -  104,231  -  104,231
 Proceeds from sale of investment securities:            
   Available for sale  -  -  -  35,099  -  35,099
   Other  -  -  -  2,294  -  2,294
 Net repayments on loans   211,975  193  -  1,008,687  (207,752)  1,013,103
 Proceeds from sale of loans  -  -  -  290,119  -  290,119
 Acquisition of loan portfolios   -  -  -  (985,675)  -  (985,675)
 Payments received from FDIC under loss             
  sharing agreements  -  -  -  561,111  -  561,111
 Cash paid related to business acquisitions  -  -  -  (500)  -  (500)
 Net proceeds from sale of equity method            
   investments   (10,690)  42,193  -  -  -  31,503
 Capital contribution to subsidiary  -  (37,000)  -  -  37,000  -
 Mortgage servicing rights purchased  -  -  -  (1,251)  -  (1,251)
 Acquisition of premises and equipment  (500)  -  -  (37,368)  -  (37,868)
 Proceeds from sale of:            
   Premises and equipment  19  -  -  12,295  -  12,314
   Foreclosed assets  -  -  -  133,017  -  133,017
Net cash provided by (used in) investing activities  208,403  (1,794)  (22)  478,578  (163,580)  521,585
                 
Cash flows from financing activities:            
 Net increase (decrease) in:            
   Deposits  -  -  -  1,208,295  (15,643)  1,192,652
   Federal funds purchased and assets sold under             
    agreements to repurchase  -  -  -  189,056  -  189,056
   Other short-term borrowings  -  -  (13,500)  (389,822)  205,300  (198,022)
 Payments of notes payable   (100,000)  -  (3,000)  (1,952,254)  -  (2,055,254)
 Proceeds from issuance of notes payable  -  -  -  419,500  -  419,500
 Proceeds from issuance of common stock  5,394  -  -  -  -  5,394
 Dividends paid  (2,792)  -  -  -  -  (2,792)
 Treasury stock acquired  (418)  -  -  -  -  (418)
 Return of capital   1,514  (1,514)  -  -  -  -
 Capital contribution from parent  -  -  37,000  -  (37,000)  -
Net cash (used in) provided by financing activities  (96,302)  (1,514)  20,500  (525,225)  152,657  (449,884)
Net (decrease) increase in cash and due from banks  (160)  (319)  (1,305)  115,613  939  114,768
Cash and due from banks at beginning of period  1,638  618  1,576  451,723  (3,182)  452,373
Cash and due from banks at end of period$ 1,478$ 299$ 271$ 567,336$ (2,243)$ 567,141

Condensed Consolidating Statement of Cash Flows (Unaudited)

      For the nine months ended September 30, 2010
            All other    
      Popular, Inc. PIBI PNA subsidiaries Elimination Popular, Inc.
(In thousands) Holding Co. Holding Co. Holding Co. and eliminations entries Consolidated
                 
Cash flows from operating activities:             
                 
Net income (loss)$ 364,542$ (180,872)$ (194,036)$ (76,578)$ 451,486$ 364,542
                 
Adjustments to reconcile net income to net cash            
 provided by (used in) operating activities:            
 Equity in undistributed earnings of subsidiaries  261,141  200,353  167,324  -  (628,818)  -
 Provision for loan losses   -  -  -  657,471  -  657,471
 Amortization of intangibles  -  -  -  6,915  -  6,915
 Depreciation and amortization of premises and            
  equipment  587  -  2  46,495  -  47,084
 Net (accretion of discounts) amortization of             
  premiums and deferred fees   15,636  -  206  (171,411)  (487)  (156,056)
 Fair value adjustments of mortgage servicing rights  -  -  -  19,959  -  19,959
 Fair value change in equity appreciation instrument   -  -  -  (35,035)  -  (35,035)
 FDIC loss share expense  -  -  -  22,705  -  22,705
 FDIC deposit insurance expense  -  -  -  49,894  -  49,894
 Adjustments (expense) to indemnity reserves on             
  loans sold  -  -  -  37,502  -  37,502
 (Earnings) losses from investments under the             
  equity method  (1,198)  (14,931)  3,640  (2,354)  (1,301)  (16,144)
 Deferred income tax expense  11,411  -  -  (4,470)  2,410  9,351
 Loss (gain) on:            
   Disposition of premises and equipment  8  -  -  (2,001)  -  (1,993)
   Early extinguishment of debt  15,750  -  -  10,676  -  26,426
   Sale and valuation adjustment of investment            
    securities   -  -  -  (4,210)  -  (4,210)
   Sale of loans, including valuation adjustments             
    on loans held for sale  -  -  -  (14,396)  -  (14,396)
   Sale of processing and technology business,             
    net of transaction costs  (616,186)  -  -  -  -  (616,186)
 Acquisitions of loans held-for-sale  -  -  -  (213,897)  -  (213,897)
 Proceeds from sale of loans held-for-sale  -  -  -  57,831  -  57,831
 Net disbursements on loans held-for-sale  -  -  -  (494,312)  -  (494,312)
 Net (increase) decrease in:            
   Trading securities  -  -  -  565,611  -  565,611
   Accrued income receivable  (59)  118  102  1,733  (88)  1,806
   Other assets  2,918  5,669  1,987  (29,902)  (25,052)  (44,380)
 Net increase (decrease) in:            
   Interest payable  (3,778)  -  2,082  (32,951)  88  (34,559)
   Pension and other postretirement benefits             
    obligations  -  -  -  1,825  -  1,825
   Other liabilities  52,804  3,144  (1,743)  17,794  2,462  74,461
Total adjustments  (260,966)  194,353  173,600  491,472  (650,786)  (52,327)
Net cash provided by (used in) operating activities  103,576  13,481  (20,436)  414,894  (199,300)  312,215
                 
Cash flows from investing activities:            
 Net (increase) decrease in money market            
   investments   (164,801)  50,237  (68)  (924,899)  114,618  (924,913)
 Purchases of investment securities:            
   Available-for-sale  (34,500)  -  -  (671,328)  17,150  (688,678)
   Held-to-maturity  (26,927)  -  -  (25,271)  -  (52,198)
   Other  -  -  -  (44,021)  -  (44,021)
 Proceeds from calls, paydowns, maturities and            
  redemptions of investment securities:            
   Available-for-sale  -  -  -  1,329,390  -  1,329,390
   Held-to-maturity  271,928  250  -  23,889  (245,000)  51,067
   Other  -  -  -  108,470  -  108,470
 Proceeds from sale of investment securities:            
   Available for sale  -  -  -  396,676  -  396,676
 Net (disbursements) repayments on loans   (481,194)  -  -  1,347,236  426,893  1,292,935
 Proceeds from sale of loans  -  -  -  15,908  -  15,908
 Acquisition of loan portfolios   -  -  -  (130,488)  -  (130,488)
 Cash received from acquisitions  -  -  -  261,311  -  261,311
 Net proceeds from sale of processing and             
  technology business  617,976  -  -  24,346  -  642,322
 Capital contribution to subsidiary  (1,095,000)  (495,000)  (495,000)  -  2,085,000  -
 Mortgage servicing rights purchased  -  -  -  (598)  -  (598)
 Acquisition of premises and equipment  (878)  -  -  (39,458)  -  (40,336)
 Proceeds from sale of:            
   Premises and equipment  116  -  -  13,387  -  13,503
   Foreclosed assets  74  -  -  120,338  -  120,412
Net cash (used in) provided by investing activities  (913,206)  (444,513)  (495,068)  1,804,888  2,398,661  2,350,762
                 
Cash flows from financing activities:            
 Net increase (decrease) in:            
   Deposits  -  -  -  (601,350)  26,611  (574,739)
   Federal funds purchased and assets sold under             
    agreements to repurchase  -  -  -  (109,851)  (164,800)  (274,651)
   Other short-term borrowings  (24,225)  -  24,500  584,116  (400,375)  184,016
 Prepayment penalties on early cancellation of debt  (15,750)  -  -  (9,725)  -  (25,475)
 Payments of notes payable   (250,000)  -  (4,000)  (3,274,449)  247,000  (3,281,449)
 Proceeds from issuance of notes payable  -  -  -  111,101  -  111,101
 Net proceeds from issuance of depository shares  1,100,613  -  -  -  1,618  1,102,231
 Dividends paid to parent company  -  (63,900)  -  (111,700)  175,600  -
 Treasury stock acquired  (530)  -  -  -  -  (530)
 Capital contribution from parent  -  495,000  495,000  1,095,000  (2,085,000)  -
Net cash provided by (used in) financing activities  810,108  431,100  515,500  (2,316,858)  (2,199,346)  (2,759,496)
Net increase (decrease) in cash and due from banks  478  68  (4)  (97,076)  15  (96,519)
Cash and due from banks at beginning of period  1,174  300  738  677,606  (2,488)  677,330
Cash and due from banks at end of period$ 1,652$ 368$ 734$ 580,530$ (2,473)$ 580,811