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Allowance for loan losses

12 Months Ended

Dec. 31, 2012

Loans and Leases Receivable, Allowance [Abstract]

Note 11 – Allowance for loan losses

The following tables present the changes in the allowance for loan losses for the years ended December 31, 2012 and 2011.

For the year ended December 31, 2012
Puerto Rico - Non-covered loans


(In thousands)		Commercial		Construction		Mortgage		Leasing		Consumer		Total
Allowance for credit losses:
Beginning balance		$	255,453	$	5,850	$	72,322	$	4,651	$	115,126	$	453,402
	Provision (reversal of provision)		106,802		(2,271)		103,482		(814)		74,868		282,067
	Charge-offs		(185,653)		(3,910)		(59,286)		(4,680)		(120,658)		(374,187)
	Recoveries		41,013		6,193		2,509		3,737		30,563		84,015
Ending balance		$	217,615	$	5,862	$	119,027	$	2,894	$	99,899	$	445,297

For the year ended December 31, 2012
Puerto Rico - Covered loans


(In thousands)		Commercial		Construction		Mortgage		Leasing		Consumer		Total
Allowance for credit losses:
Beginning balance		$	94,472	$	20,435	$	5,310	$	-	$	4,728	$	124,945
	Provision		23,847		20,006		21,513		-		9,473		74,839
	Charge-offs		(46,290)		(30,556)		(5,909)		-		(8,225)		(90,980)
	Recoveries		31		61		-		-		10		102
Ending balance		$	72,060	$	9,946	$	20,914	$	-	$	5,986	$	108,906

For the year ended December 31, 2012
U.S. Mainland


(In thousands)		Commercial		Construction		Mortgage		Legacy		Consumer		Total
Allowance for credit losses:
Beginning balance		$	113,979	$	2,631	$	29,939	$	46,228	$	44,184	$	236,961
	Provision (reversal of provision)		10,775		(664)		15,572		3,212		23,140		52,035
	Charge-offs		(69,364)		(1,659)		(16,708)		(36,529)		(41,045)		(165,305)
	Recoveries		24,711		1,259		1,545		20,191		5,041		52,747
	Net (write-down) recovery related to loans transferred to LHFS		(34)		-		-		-		-		(34)
Ending balance		$	80,067	$	1,567	$	30,348	$	33,102	$	31,320	$	176,404

For the year ended December 31, 2012
Popular, Inc.


(In thousands)		Commercial		Construction		Mortgage		Legacy		Leasing		Consumer		Total
Allowance for credit losses:
Beginning balance		$	463,904	$	28,916	$	107,571	$	46,228	$	4,651	$	164,038	$	815,308
	Provision (reversal of provision)		141,424		17,071		140,567		3,212		(814)		107,481		408,941
	Charge-offs		(301,307)		(36,125)		(81,903)		(36,529)		(4,680)		(169,928)		(630,472)
	Recoveries		65,755		7,513		4,054		20,191		3,737		35,614		136,864
	Net (write-down) recovery related to loans transferred to LHFS		(34)		-		-		-		-		-		(34)
Ending balance		$	369,742	$	17,375	$	170,289	$	33,102	$	2,894	$	137,205	$	730,607

For the year ended December 31, 2011
Puerto Rico - Non-covered loans


(In thousands)		Commercial		Construction		Mortgage		Leasing		Consumer		Total
Allowance for credit losses:
Beginning balance		$	256,643	$	16,074	$	42,029	$	7,154	$	133,531	$	455,431
	Provision (reversal of provision)		206,904		(4,408)		57,917		941		80,242		341,596
	Charge-offs		(225,011)		(15,563)		(29,215)		(6,527)		(132,552)		(408,868)
	Recoveries		29,623		9,747		1,591		3,083		33,905		77,949
	Net (write-down) recovery related to loans transferred to LHFS		(12,706)		-		-		-		-		(12,706)
Ending balance		$	255,453	$	5,850	$	72,322	$	4,651	$	115,126	$	453,402

For the year ended December 31, 2011
Puerto Rico - Covered Loans


(In thousands)		Commercial		Construction		Mortgage		Leasing		Consumer		Total
Allowance for credit losses:
Beginning balance		$	-	$	-	$	-	$	-	$	-	$	-
	Provision		108,246		23,288		6,121		-		7,980		145,635
	Charge-offs		(13,774)		(4,353)		(826)		-		(3,253)		(22,206)
	Recoveries		-		1,500		15		-		1		1,516
Ending balance		$	94,472	$	20,435	$	5,310	$	-	$	4,728	$	124,945

For the year ended December 31, 2011
U.S. Mainland


(In thousands)		Commercial		Construction		Mortgage		Legacy		Consumer		Total
Allowance for credit losses:
Beginning balance		$	143,281	$	23,711	$	28,839	$	76,405	$	65,558	$	337,794
	Provision (reversal of provision)		47,255		(18,137)		1,480		22,147		35,744		88,489
	Charge-offs		(99,562)		(4,286)		(16,570)		(78,338)		(63,881)		(262,637)
	Recoveries		23,005		1,343		2,383		26,014		6,763		59,508
	Net (write-down) recovery related to loans transferred to LHFS		-		-		13,807		-		-		13,807
Ending balance		$	113,979	$	2,631	$	29,939	$	46,228	$	44,184	$	236,961

For the year ended December 31, 2011
Popular, Inc.


(In thousands)		Commercial		Construction		Mortgage		Legacy		Leasing		Consumer		Total
Allowance for credit losses:
Beginning balance		$	399,924	$	39,785	$	70,868	$	76,405	$	7,154	$	199,089	$	793,225
	Provision		362,405		743		65,518		22,147		941		123,966		575,720
	Charge-offs		(338,347)		(24,202)		(46,611)		(78,338)		(6,527)		(199,686)		(693,711)
	Recoveries		52,628		12,590		3,989		26,014		3,083		40,669		138,973
	Net (write-down) recovery related to loans transferred to LHFS		(12,706)		-		13,807		-		-		-		1,101
Ending balance		$	463,904	$	28,916	$	107,571	$	46,228	$	4,651	$	164,038	$	815,308

The following table provides the activity in the allowance for loan losses related to covered loans accounted for pursuant to ASC Subtopic 310-30.

	ASC 310-30 Covered loans
	For the years ended
(In thousands)	December 31, 2012		December 31, 2011
Balance at beginning of period	$	83,477	$	-
Provision for loan losses		59,052		89,802
Net charge-offs		(47,122)		(6,325)
Balance at end of period	$	95,407	$	83,477

The following tables present information at December 31, 2012 and December 31, 2011 regarding loan ending balances and the allowance for loan losses by portfolio segment and whether such loans and the allowance pertains to loans individually or collectively evaluated for impairment.

At December 31, 2012
Puerto Rico


(In thousands)		Commercial		Construction		Mortgage		Leasing		Consumer		Total
Allowance for credit losses:
Specific ALLL non-covered loans		$	17,323	$	120	$	58,572	$	1,066	$	17,779	$	94,860
General ALLL non-covered loans			200,292		5,742		60,455		1,828		82,120		350,437
ALLL - non-covered loans			217,615		5,862		119,027		2,894		99,899		445,297
Specific ALLL covered loans			8,505		-		-		-		-		8,505
General ALLL covered loans			63,555		9,946		20,914		-		5,986		100,401
ALLL - covered loans			72,060		9,946		20,914		-		5,986		108,906
Total ALLL		$	289,675	$	15,808	$	139,941	$	2,894	$	105,885	$	554,203

Loans held-in-portfolio:
Impaired non-covered loans		$	447,779	$	35,849	$	557,137	$	4,881	$	130,663	$	1,176,309
Non-covered loans held-in-portfolio
	excluding impaired loans		5,848,505		176,418		4,391,787		535,642		3,103,666		14,056,018
Non-covered loans held-in-portfolio			6,296,284		212,267		4,948,924		540,523		3,234,329		15,232,327
Impaired covered loans			109,241		-		-		-		-		109,241
Covered loans held-in-portfolio
	excluding impaired loans		2,135,406		361,396		1,076,730		-		73,199		3,646,731
Covered loans held-in-portfolio			2,244,647		361,396		1,076,730		-		73,199		3,755,972
Total loans held-in-portfolio		$	8,540,931	$	573,663	$	6,025,654	$	540,523	$	3,307,528	$	18,988,299

At December 31, 2012
U.S. Mainland


(In thousands)		Commercial		Construction		Mortgage		Legacy		Consumer		Total
Allowance for credit losses:
Specific ALLL		$	25	$	-	$	16,095	$	-	$	107	$	16,227
General ALLL			80,042		1,567		14,253		33,102		31,213		160,177
Total ALLL		$	80,067	$	1,567	$	30,348	$	33,102	$	31,320	$	176,404

Loans held-in-portfolio:
Impaired loans		$	79,885	$	5,960	$	54,093	$	18,744	$	2,714	$	161,396
Loans held-in-portfolio,
	excluding impaired loans		3,482,033		34,630		1,075,490		365,473		631,843		5,589,469
Total loans held-in-portfolio		$	3,561,918	$	40,590	$	1,129,583	$	384,217	$	634,557	$	5,750,865

At December 31, 2012
Popular, Inc.


(In thousands)		Commercial		Construction		Mortgage		Legacy		Leasing		Consumer		Total
Allowance for credit losses:
Specific ALLL non-covered loans		$	17,348	$	120	$	74,667	$	-	$	1,066	$	17,886	$	111,087
General ALLL non-covered loans			280,334		7,309		74,708		33,102		1,828		113,333		510,614
ALLL - non-covered loans			297,682		7,429		149,375		33,102		2,894		131,219		621,701
Specific ALLL covered loans			8,505		-		-		-		-		-		8,505
General ALLL covered loans			63,555		9,946		20,914		-		-		5,986		100,401
ALLL - covered loans			72,060		9,946		20,914		-		-		5,986		108,906
Total ALLL		$	369,742	$	17,375	$	170,289	$	33,102	$	2,894	$	137,205	$	730,607

Loans held-in-portfolio:
Impaired non-covered loans		$	527,664	$	41,809	$	611,230	$	18,744	$	4,881	$	133,377	$	1,337,705
Non-covered loans held-in-portfolio
	excluding impaired loans		9,330,538		211,048		5,467,277		365,473		535,642		3,735,509		19,645,487
Non-covered loans held-in-portfolio			9,858,202		252,857		6,078,507		384,217		540,523		3,868,886		20,983,192
Impaired covered loans			109,241		-		-		-		-		-		109,241
Covered loans held-in-portfolio
	excluding impaired loans		2,135,406		361,396		1,076,730		-		-		73,199		3,646,731
Covered loans held-in-portfolio			2,244,647		361,396		1,076,730		-		-		73,199		3,755,972
Total loans held-in-portfolio		$	12,102,849	$	614,253	$	7,155,237	$	384,217	$	540,523	$	3,942,085	$	24,739,164

At December 31, 2011
Puerto Rico


(In thousands)		Commercial		Construction		Mortgage		Leasing		Consumer		Total
Allowance for credit losses:
Specific ALLL non-covered loans		$	10,407	$	289	$	14,944	$	793	$	16,915	$	43,348
General ALLL non-covered loans			245,046		5,561		57,378		3,858		98,211		410,054
ALLL - non-covered loans			255,453		5,850		72,322		4,651		115,126		453,402
Specific ALLL covered loans			27,086		-		-		-		-		27,086
General ALLL covered loans			67,386		20,435		5,310		-		4,728		97,859
ALLL - covered loans			94,472		20,435		5,310		-		4,728		124,945
Total ALLL		$	349,925	$	26,285	$	77,632	$	4,651	$	119,854	$	578,347

Loans held-in-portfolio:
Impaired non-covered loans		$	403,089	$	49,747	$	333,346	$	6,104	$	137,582	$	929,868
Non-covered loans held-in-portfolio
	excluding impaired loans		6,067,493		111,194		4,356,137		542,602		2,832,845		13,910,271
Non-covered loans held-in-portfolio			6,470,582		160,941		4,689,483		548,706		2,970,427		14,840,139
Impaired covered loans			76,798		-		-		-		-		76,798
Covered loans held-in-portfolio
	excluding impaired loans		2,435,944		546,826		1,172,954		-		116,181		4,271,905
Covered loans held-in-portfolio			2,512,742		546,826		1,172,954		-		116,181		4,348,703
Total loans held-in-portfolio		$	8,983,324	$	707,767	$	5,862,437	$	548,706	$	3,086,608	$	19,188,842

At December 31, 2011
U.S. Mainland


(In thousands)		Commercial		Construction		Mortgage		Legacy		Consumer		Total
Allowance for credit losses:
Specific ALLL		$	1,331	$	-	$	14,119	$	57	$	131	$	15,638
General ALLL			112,648		2,631		15,820		46,171		44,053		221,323
Total ALLL		$	113,979	$	2,631	$	29,939	$	46,228	$	44,184	$	236,961

Loans held-in-portfolio:
Impaired loans		$	153,240	$	41,963	$	49,534	$	48,890	$	2,526	$	296,153
Loans held-in-portfolio,
	excluding impaired loans		3,349,505		37,035		779,443		599,519		700,802		5,466,304
Total loans held-in-portfolio		$	3,502,745	$	78,998	$	828,977	$	648,409	$	703,328	$	5,762,457

At December 31, 2011
Popular, Inc.


(In thousands)		Commercial		Construction		Mortgage		Legacy		Leasing		Consumer		Total
Allowance for credit losses:
Specific ALLL non-covered loans		$	11,738	$	289	$	29,063	$	57	$	793	$	17,046	$	58,986
General ALLL non-covered loans			357,694		8,192		73,198		46,171		3,858		142,264		631,377
ALLL - non-covered loans			369,432		8,481		102,261		46,228		4,651		159,310		690,363
Specific ALLL covered loans			27,086		-		-		-		-		-		27,086
General ALLL covered loans			67,386		20,435		5,310		-		-		4,728		97,859
ALLL - covered loans			94,472		20,435		5,310		-		-		4,728		124,945
Total ALLL		$	463,904	$	28,916	$	107,571	$	46,228	$	4,651	$	164,038	$	815,308

Loans held-in-portfolio:
Impaired non-covered loans		$	556,329	$	91,710	$	382,880	$	48,890	$	6,104	$	140,108	$	1,226,021
Non-covered loans held-in-portfolio
	excluding impaired loans		9,416,998		148,229		5,135,580		599,519		542,602		3,533,647		19,376,575
Non-covered loans held-in-portfolio			9,973,327		239,939		5,518,460		648,409		548,706		3,673,755		20,602,596
Impaired covered loans			76,798		-		-		-		-		-		76,798
Covered loans held-in-portfolio
	excluding impaired loans		2,435,944		546,826		1,172,954		-		-		116,181		4,271,905
Covered loans held-in-portfolio			2,512,742		546,826		1,172,954		-		-		116,181		4,348,703
Total loans held-in-portfolio		$	12,486,069	$	786,765	$	6,691,414	$	648,409	$	548,706	$	3,789,936	$	24,951,299

Impaired loans

The following tables present loans individually evaluated for impairment at December 31, 2012 and December 31, 2011.

December 31, 2012
Puerto Rico
	Impaired Loans – With an						Impaired Loans
	Allowance						With No Allowance				Impaired Loans - Total
			Unpaid						Unpaid				Unpaid
	Recorded		principal		Related		Recorded		principal		Recorded		principal			Related
(In thousands)	investment		balance		allowance		investment		balance		investment		balance			allowance
Commercial multi-family	$	271	$	288	$	6	$	13,080	$	19,969	$	13,351	$	20,257	$	6
Commercial real estate non-owner occupied		22,332		25,671		1,354		55,320		63,041		77,652		88,712		1,354
Commercial real estate owner occupied		100,685		149,342		12,614		121,476		167,639		222,161		316,981		12,614
Commercial and industrial		70,216		85,508		3,349		64,399		99,608		134,615		185,116		3,349
Construction		1,865		3,931		120		33,984		70,572		35,849		74,503		120
Mortgage		517,341		539,171		58,572		39,796		42,913		557,137		582,084		58,572
Leasing		4,881		4,881		1,066		-		-		4,881		4,881		1,066
Consumer:
Credit cards		42,514		42,514		1,666		-		-		42,514		42,514		1,666
Personal		86,884		86,884		16,022		-		-		86,884		86,884		16,022
Auto		772		772		79		-		-		772		772		79
Other		493		493		12		-		-		493		493		12
Covered loans		64,762		64,762		8,505		44,479		44,479		109,241		109,241		8,505
Total Puerto Rico	$	913,016	$	1,004,217	$	103,365	$	372,534	$	508,221	$	1,285,550	$	1,512,438	$	103,365

December 31, 2012
U.S. mainland
	Impaired Loans – With an						Impaired Loans
	Allowance						With No Allowance				Impaired Loans - Total
			Unpaid						Unpaid				Unpaid
	Recorded		principal		Related		Recorded		principal		Recorded		principal		Related
(In thousands)	investment		balance		allowance		investment		balance		investment		balance		allowance
Commercial multi-family	$	1,327	$	1,479	$	25	$	6,316	$	9,898	$	7,643	$	11,377	$	25
Commercial real estate non-owner occupied		-		-		-		45,815		64,783		45,815		64,783		-
Commercial real estate owner occupied		-		-		-		20,369		22,968		20,369		22,968		-
Commercial and industrial		-		-		-		6,058		8,026		6,058		8,026		-
Construction		-		-		-		5,960		5,960		5,960		5,960		-
Mortgage		45,319		46,484		16,095		8,774		10,328		54,093		56,812		16,095
Legacy		-		-		-		18,744		29,972		18,744		29,972		-
Consumer:
Helocs		201		201		11		-		-		201		201		11
Auto		91		91		2		-		-		91		91		2
Other		2,422		2,422		94		-		-		2,422		2,422		94
Total U.S. mainland	$	49,360	$	50,677	$	16,227	$	112,036	$	151,935	$	161,396	$	202,612	$	16,227

December 31, 2012
Popular, Inc.
	Impaired Loans – With an						Impaired Loans
	Allowance						With No Allowance				Impaired Loans - Total
			Unpaid						Unpaid				Unpaid
	Recorded		principal		Related		Recorded		principal		Recorded		principal		Related
(In thousands)	investment		balance		allowance		investment		balance		investment		balance		allowance
Commercial multi-family	$	1,598	$	1,767	$	31	$	19,396	$	29,867	$	20,994	$	31,634	$	31
Commercial real estate non-owner occupied		22,332		25,671		1,354		101,135		127,824		123,467		153,495		1,354
Commercial real estate owner occupied		100,685		149,342		12,614		141,845		190,607		242,530		339,949		12,614
Commercial and industrial		70,216		85,508		3,349		70,457		107,634		140,673		193,142		3,349
Construction		1,865		3,931		120		39,944		76,532		41,809		80,463		120
Mortgage		562,660		585,655		74,667		48,570		53,241		611,230		638,896		74,667
Legacy		-		-		-		18,744		29,972		18,744		29,972		-
Leasing		4,881		4,881		1,066		-		-		4,881		4,881		1,066
Consumer:
Credit cards		42,514		42,514		1,666		-		-		42,514		42,514		1,666
Helocs		201		201		11		-		-		201		201		11
Personal		86,884		86,884		16,022		-		-		86,884		86,884		16,022
Auto		863		863		81		-		-		863		863		81
Other		2,915		2,915		106		-		-		2,915		2,915		106
Covered loans		64,762		64,762		8,505		44,479		44,479		109,241		109,241		8,505
Total Popular, Inc.	$	962,376	$	1,054,894	$	119,592	$	484,570	$	660,156	$	1,446,946	$	1,715,050	$	119,592

December 31, 2011
Puerto Rico
	Impaired Loans – With an						Impaired Loans
	Allowance						With No Allowance				Impaired Loans - Total
			Unpaid						Unpaid				Unpaid
	Recorded		principal		Related		Recorded		principal		Recorded		principal			Related
(In thousands)	investment		balance		allowance		investment		balance		investment		balance			allowance
Commercial multi-family	$	10,463	$	10,463	$	575	$	12,206	$	21,312	$	22,669	$	31,775	$	575
Commercial real estate non-owner occupied		5,909		7,006		836		45,517		47,439		51,426		54,445		836
Commercial real estate owner occupied		37,534		46,806		2,757		165,745		215,288		203,279		262,094		2,757
Commercial and industrial		42,294		55,180		6,239		83,421		108,224		125,715		163,404		6,239
Construction		1,672		2,369		289		48,075		101,042		49,747		103,411		289
Mortgage		333,346		336,682		14,944		-		-		333,346		336,682		14,944
Leasing		6,104		6,104		793		-		-		6,104		6,104		793
Consumer:
Credit cards		38,874		38,874		2,151		-		-		38,874		38,874		2,151
Personal		93,760		93,760		14,115		-		-		93,760		93,760		14,115
Other		4,948		4,948		649		-		-		4,948		4,948		649
Covered loans		75,798		75,798		27,086		1,000		1,000		76,798		76,798		27,086
Total Puerto Rico	$	650,702	$	677,990	$	70,434	$	355,964	$	494,305	$	1,006,666	$	1,172,295	$	70,434

December 31, 2011
U.S. mainland
	Impaired Loans – With an						Impaired Loans
	Allowance						With No Allowance				Impaired Loans - Total
			Unpaid						Unpaid				Unpaid
	Recorded		principal		Related		Recorded		principal		Recorded		principal		Related
(In thousands)	investment		balance		allowance		investment		balance		investment		balance		allowance
Commercial multi-family	$	-	$	-	$	-	$	8,655	$	12,403	$	8,655	$	12,403	$	-
Commercial real estate non-owner occupied		1,306		1,306		214		61,111		83,938		62,417		85,244		214
Commercial real estate owner occupied		1,239		1,239		455		46,403		56,229		47,642		57,468		455
Commercial and industrial		7,390		7,390		662		27,136		29,870		34,526		37,260		662
Construction		-		-		-		41,963		44,751		41,963		44,751		-
Mortgage		39,570		39,899		14,119		9,964		9,964		49,534		49,863		14,119
Legacy		6,013		6,013		57		42,877		69,221		48,890		75,234		57
Consumer:
Auto		93		93		6		-		-		93		93		6
Other		2,433		2,433		125		-		-		2,433		2,433		125
Total U.S. mainland	$	58,044	$	58,373	$	15,638	$	238,109	$	306,376	$	296,153	$	364,749	$	15,638

December 31, 2011
Popular, Inc.
	Impaired Loans – With an						Impaired Loans
	Allowance						With No Allowance				Impaired Loans - Total
			Unpaid						Unpaid				Unpaid
	Recorded		principal		Related		Recorded		principal		Recorded		principal		Related
(In thousands)	investment		balance		allowance		investment		balance		investment		balance		allowance
Commercial multi-family	$	10,463	$	10,463	$	575	$	20,861	$	33,715	$	31,324	$	44,178	$	575
Commercial real estate non-owner occupied		7,215		8,312		1,050		106,628		131,377		113,843		139,689		1,050
Commercial real estate owner occupied		38,773		48,045		3,212		212,148		271,517		250,921		319,562		3,212
Commercial and industrial		49,684		62,570		6,901		110,557		138,094		160,241		200,664		6,901
Construction		1,672		2,369		289		90,038		145,793		91,710		148,162		289
Mortgage		372,916		376,581		29,063		9,964		9,964		382,880		386,545		29,063
Legacy		6,013		6,013		57		42,877		69,221		48,890		75,234		57
Leasing		6,104		6,104		793		-		-		6,104		6,104		793
Consumer:
Credit cards		38,874		38,874		2,151		-		-		38,874		38,874		2,151
Personal		93,760		93,760		14,115		-		-		93,760		93,760		14,115
Auto		93		93		6		-		-		93		93		6
Other		7,381		7,381		774		-		-		7,381		7,381		774
Covered loans		75,798		75,798		27,086		1,000		1,000		76,798		76,798		27,086
Total Popular, Inc.	$	708,746	$	736,363	$	86,072	$	594,073	$	800,681	$	1,302,819	$	1,537,044	$	86,072

The following table presents the average recorded investment and interest income recognized on impaired loans for the years ended December 31, 2012 and 2011.

For the year ended December 31, 2012
	Puerto Rico				U.S. Mainland				Popular, Inc.
	Average		Interest		Average		Interest		Average		Interest
	recorded		income		recorded		income		recorded		income
(In thousands)	investment		recognized		investment		recognized		investment		recognized
Commercial multi-family	$	14,737	$	-	$	9,012	$	145	$	23,749	$	145
Commercial real estate non-owner occupied		64,308		1,108		58,688		1,139		122,996		2,247
Commercial real estate owner occupied		202,783		2,820		32,436		91		235,219		2,911
Commercial and industrial		125,373		2,267		18,344		37		143,717		2,304
Construction		44,276		278		17,039		-		61,315		278
Mortgage		450,284		25,534		52,909		1,989		503,193		27,523
Legacy		-		-		33,786		120		33,786		120
Leasing		5,372		-		-		-		5,372		-
Consumer:
Credit cards		39,574		-		-		-		39,574		-
Helocs		-		-		81		-		81		-
Personal		90,949		-		-		-		90,949		-
Auto		255		-		73		-		328		-
Other		2,813		-		2,404		-		5,217		-
Covered loans		93,820		3,587		-		-		93,820		3,587
Total Popular, Inc.	$	1,134,544	$	35,594	$	224,772	$	3,521	$	1,359,316	$	39,115

For the year ended December 31, 2011
	Puerto Rico				U.S. Mainland				Popular, Inc.
	Average		Interest		Average		Interest		Average		Interest
	recorded		income		recorded		income		recorded		income
(In thousands)	investment		recognized		investment		recognized		investment		recognized
Commercial multi-family	$	18,459	$	-	$	7,067	$	-	$	25,526	$	-
Commercial real estate non-owner occupied		36,342		835		78,274		283		114,616		1,118
Commercial real estate owner occupied		194,033		2,096		30,348		751		224,381		2,847
Commercial and industrial		108,002		1,468		22,431		403		130,433		1,871
Construction		57,723		170		103,794		124		161,517		294
Mortgage		227,278		11,587		24,767		1,137		252,045		12,724
Legacy		-		-		30,639		238		30,639		238
Leasing		3,052		-		-		-		3,052		-
Consumer:
Credit cards		19,437		-		-		-		19,437		-
Personal		46,880		-		-		-		46,880		-
Auto		-		-		46		-		46		-
Other		2,474		-		1,217		-		3,691		-
Covered loans		38,399		1,013		-		-		38,399		1,013
Total Popular, Inc.	$	752,079	$	17,169	$	298,583	$	2,936	$	1,050,662	$	20,105

Modifications

Troubled debt restructurings related to non-covered loan portfolios amounted to $1.2 billion at December 31, 2012 (December 31, 2011 - $881 million). The amount of outstanding commitments to lend additional funds to debtors owing receivables whose terms have been modified in troubled debt restructurings amounted to $120 thousand related to the construction loan portfolio and $4 million related to the commercial loan portfolio at December 31, 2012 (December 31, 2011 - $152 thousand and $3 million, respectively).

A modification of a loan constitutes a troubled debt restructuring (“TDR”) when a borrower is experiencing financial difficulty and the modification constitutes a concession.

Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting evergreen revolving credit lines to long-term loans. Commercial real estate (“CRE”), which includes multifamily, owner-occupied and non-owner occupied CRE, and construction loans modified in a TDR often involve reducing the interest rate for a limited period of time or the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or reductions in the payment plan. Construction loans modified in a TDR may also involve extending the interest-only payment period.

Residential mortgage loans modified in a TDR are primarily comprised of loans where monthly payments are lowered to accommodate the borrowers' financial needs for a period of time, normally five years to ten years. After the lowered monthly payment period ends, the borrower reverts back to paying principal and interest per the original terms with the maturity date adjusted accordingly.

Home equity loans modifications are made infrequently and are not offered if the Corporation also holds the first mortgage. Home equity loans modifications are uniquely designed to meet the specific needs of each borrower. Automobile loans modified in a TDR are primarily comprised of loans where the Corporation has lowered monthly payments by extending the term. Credit cards modified in a TDR are primarily comprised of loans where monthly payments are lowered to accommodate the borrowers' financial needs for a period of time, normally up to 24 months.

As part of its NPL reduction strategy and in order to expedite the resolution of delinquent construction and commercial loans, commencing in 2012, the Corporation routinely enters into liquidation agreements with borrowers and guarantors through the regular legal process, bankruptcy procedures and in certain occasions, out of Court transactions. These liquidation agreements, in general, contemplate the following conditions: (1) consent to judgment by the borrowers and guarantors; (2) acknowledgement by the borrower of the debt, its liquidity and maturity; (3) acknowledgment of the default in payments. The contractual interest rate is not reduced and continues to accrue during the term of the agreement. At the end of the period, borrower is obligated to remit all amounts due or be subject to the Corporation's exercise of its foreclosure rights and further collection efforts. Likewise, the borrower's failure to make stipulated payments will grant the Corporation the ability to exercise its foreclosure rights. This strategy procures to expedite the foreclosure process, resulting in a more effective and efficient collection process. Although in general, these liquidation agreements do not contemplate the forgiveness of principal or interest as debtor is required to cover all outstanding amounts when the agreement becomes due, it could be construed that the Corporation has granted a concession by temporarily accepting a payment schedule that is different from the contractual payment schedule. Accordingly, loans under these program agreements are considered TDRs. At December 31, 2012 these liquidation agreements amounted to $79.2 million.

Loans modified in a TDR that are not accounted pursuant to ASC 310-30 are typically already in non-accrual status at the time of the modification and partial charge-offs have in some cases already been taken against the outstanding loan balance. The TDR loan continues in non-accrual status until the borrower has demonstrated a willingness and ability to make the restructured loan payments (generally at least six months of sustained performance after the modification (or one year for loans providing for quarterly or semi-annual payments)) and management has concluded that it is probable that the borrower would not be in payment default in the foreseeable future.

Loans modified in a TDR may have the financial effect to the Corporation of increasing the specific allowance for loan losses associated with the loan. Consumer and residential mortgage loans modified under the Corporation's loss mitigation programs that are determined to be TDRs are individually evaluated for impairment based on an analysis of discounted cash flows.

For consumer and mortgage loans that are modified with regard to payment terms and which constitute TDRs, the discounted cash flow value method is used as the impairment valuation is more appropriately calculated based on the ongoing cash flow from the individuals rather than the liquidation of the asset. The computations give consideration to probability of defaults and loss-given-foreclosure on the related estimated cash flows.

Commercial and construction loans that have been modified as part of loss mitigation efforts are evaluated individually for impairment. The vast majority of the Corporation's modified commercial loans are measured for impairment using the estimated fair value of the collateral, as these are normally considered as collateral dependent loans. In very few instances, the Corporation measures modified commercial loans at their estimated realizable values determined by discounting the expected future cash flows. Construction loans that have been modified are also accounted for as collateral dependent loans. The Corporation determines the fair value measurement dependent upon its exit strategy for the particular asset(s) acquired in foreclosure.

The following tables present the loan count by type of modification for those loans modified in a TDR during the twelve months ended December 31, 2012 and 2011.

Puerto Rico
For the year ended December 31, 2012
	Reduction in interest rate	Extension of maturity date	Combination of reduction in interest rate and extension of maturity date	Other
Commercial multi-family	-	-	-	2
Commercial real estate non-owner occupied	9	8	-	12
Commercial real estate owner occupied	13	22	-	208
Commercial and industrial	42	91	-	87
Construction	8	1	-	1
Mortgage	579	147	1,548	202
Leasing	-	66	42	-
Consumer:
Credit cards	1,640	-	-	1,242
Personal	1,080	31	-	5
Auto	-	9	3	-
Other	62	-	-	4
Total	3,433	375	1,593	1,763

U.S. mainland
For the year ended December 31, 2012
	Reduction in interest rate	Extension of maturity date	Combination of reduction in interest rate and extension of maturity date	Other
Commercial multi-family	-	-	-	1
Commercial real estate non-owner occupied	2	2	5	1
Commercial real estate owner occupied	-	-	-	2
Construction	-	-	-	1
Mortgage	4	1	73	-
Legacy	1	-	-	2
Consumer:
HELOCs	1	-	3	-
Total	8	3	81	7

Popular, Inc.
For the year ended December 31, 2012
	Reduction in interest rate	Extension of maturity date	Combination of reduction in interest rate and extension of maturity date	Other
Commercial multi-family	-	-	-	3
Commercial real estate non-owner occupied	11	10	5	13
Commercial real estate owner occupied	13	22	-	210
Commercial and industrial	42	91	-	87
Construction	8	1	-	2
Mortgage	583	148	1,621	202
Legacy	1	-	-	2
Leasing	-	66	42	-
Consumer:
Credit cards	1,640	-	-	1,242
HELOCs	1	-	3	-
Personal	1,080	31	-	5
Auto	-	9	3	-
Other	62	-	-	4
Total	3,441	378	1,674	1,770

Puerto Rico
For the year ended December 31, 2011
	Reduction in interest rate	Extension of maturity date	Combination of reduction in interest rate and extension of maturity date	Other
Commercial multi-family	1	-	-	-
Commercial real estate non-owner occupied	6	3	-	-
Commercial real estate owner occupied	48	20	-	-
Commercial and industrial	95	47	-	-
Construction	4	-	-	-
Mortgage	448	1,032	284	300
Leasing	-	162	3	-
Consumer:
Credit cards	1,404	-	-	1,247
Personal	2,169	55	-	-
Auto	-	3	5	-
Other	46	-	-	-
Total	4,221	1,322	292	1,547

U.S. mainland
For the year ended December 31, 2011
	Reduction in interest rate	Extension of maturity date	Combination of reduction in interest rate and extension of maturity date	Other
Commercial real estate non-owner occupied	-	-	-	1
Commercial real estate owner occupied	-	-	-	1
Commercial and industrial	-	-	-	2
Construction	-	-	-	4
Mortgage	18	5	348	3
Legacy	-	1	-	-
Consumer:
Other	-	-	3	-
Total	18	6	351	11

Popular, Inc.
For the year ended December 31, 2011
	Reduction in interest rate	Extension of maturity date	Combination of reduction in interest rate and extension of maturity date	Other
Commercial multi-family	1	-	-	-
Commercial real estate non-owner occupied	6	3	-	1
Commercial real estate owner occupied	48	20	-	1
Commercial and industrial	95	47	-	2
Construction	4	-	-	4
Mortgage	466	1,037	632	303
Legacy	-	1	-	-
Leasing	-	162	3	-
Consumer:
Credit cards	1,404	-	-	1,247
Personal	2,169	55	-	-
Auto	-	3	5	-
Other	46	-	3	-
Total	4,239	1,328	643	1,558

The following tables present by class, quantitative information related to loans modified as TDRs during the years ended December 31, 2012 and 2011.

Puerto Rico
For the year ended December 31, 2012
(Dollars in thousands)	Loan count	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Increase (decrease) in the allowance for loan losses as a result of modification
Commercial multi-family	2	$	271	$	271	$	6
Commercial real estate non-owner occupied	29		18,240		18,433		(583)
Commercial real estate owner occupied	243		83,271		82,841		(113)
Commercial and industrial	220		77,909		64,767		(6,489)
Construction	10		6,617		5,822		(212)
Mortgage	2,476		325,866		356,077		23,279
Leasing	108		1,752		1,684		217
Consumer:
Credit cards	2,882		24,193		27,822		81
Personal	1,116		16,875		16,931		2,743
Auto	12		164		168		4
Other	66		240		239		(1)
Total	7,164	$	555,398	$	575,055	$	18,932

U.S. mainland
For the year ended December 31, 2012
(Dollars in thousands)	Loan count	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Increase (decrease) in the allowance for loan losses as a result of modification
Commercial multi-family	1	$	572	$	563	$	-
Commercial real estate non-owner occupied	10		16,941		18,367		219
Commercial real estate owner occupied	2		3,051		2,547		(106)
Construction	1		1,573		1,573		-
Mortgage	78		8,749		8,855		1,211
Legacy	3		1,272		1,267		(3)
Consumer:
HELOCs	4		583		560		3
Total	99	$	32,741	$	33,732	$	1,324

Popular, Inc.
For the year ended December 31, 2012
(Dollars in thousands)	Loan count	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Increase (decrease) in the allowance for loan losses as a result of modification
Commercial multi-family	3	$	843	$	834	$	6
Commercial real estate non-owner occupied	39		35,181		36,800		(364)
Commercial real estate owner occupied	245		86,322		85,388		(219)
Commercial and industrial	220		77,909		64,767		(6,489)
Construction	11		8,190		7,395		(212)
Mortgage	2,554		334,615		364,932		24,490
Legacy	3		1,272		1,267		(3)
Leasing	108		1,752		1,684		217
Consumer:
Credit cards	2,882		24,193		27,822		81
HELOCs	4		583		560		3
Personal	1,116		16,875		16,931		2,743
Auto	12		164		168		4
Other	66		240		239		(1)
Total	7,263	$	588,139	$	608,787	$	20,256

Puerto Rico
For the year ended December 31, 2011
(Dollars in thousands)	Loan count	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Increase (decrease) in the allowance for loan losses as a result of modification
Commercial multi-family	1	$	143	$	143	$	-
Commercial real estate non-owner occupied	9		14,186		14,186		633
Commercial real estate owner occupied	68		64,015		64,015		(693)
Commercial and industrial	142		28,617		28,617		795
Construction	4		3,194		3,194		(292)
Mortgage	2,064		291,006		320,781		9,653
Leasing	165		3,702		3,553		34
Consumer:
Credit cards	2,651		23,563		26,444		113
Personal	2,224		27,688		27,671		645
Auto	8		93		95		-
Other	46		192		188		-
Total	7,382	$	456,399	$	488,887	$	10,888

U.S. mainland
For the year ended December 31, 2011
(Dollars in thousands)	Loan count	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Increase (decrease) in the allowance for loan losses as a result of modification
Commercial real estate non-owner occupied	1	$	2,043	$	2,032	$	(188)
Commercial real estate owner occupied	1		10,590		7,323		-
Commercial and industrial	2		11,878		9,742		(420)
Construction	4		13,173		13,335		(420)
Mortgage	374		37,722		39,184		12,419
Legacy	1		3,016		3,097		(125)
Consumer:
Other	3		1,559		1,683		-
Total	386	$	79,981	$	76,396	$	11,266

Popular, Inc.
For the year ended December 31, 2011
(Dollars in thousands)	Loan count	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Increase (decrease) in the allowance for loan losses as a result of modification
Commercial multi-family	1	$	143		143	$	-
Commercial real estate non-owner occupied	10		16,229		16,218		445
Commercial real estate owner occupied	69		74,605		71,338		(693)
Commercial and industrial	144		40,495		38,359		375
Construction	8		16,367		16,529		(712)
Mortgage	2,438		328,728		359,965		22,072
Legacy	1		3,016		3,097		(125)
Leasing	165		3,702		3,553		34
Consumer:
Credit cards	2,651		23,563		26,444		113
Personal	2,224		27,688		27,671		645
Auto	8		93		95		-
Other	49		1,751		1,871		-
Total	7,768	$	536,380	$	565,283	$	22,154

Thirteen loans comprising a recorded investment of approximately $134 million were restructured into multiple notes (“Note A / B split”) during 2012. The Corporation recorded approximately $15.9 million in loan charge-offs as part of the loan restructurings. The renegotiations of these loans were made after analyzing the borrowers' capacity to repay the debt, collateral and ability to perform under the modified terms. The recorded investment on these commercial TDRs amounted to approximately $115 million at December 31, 2012 with a related allowance for loan losses amounting to approximately $267 thousand.

The following tables present by class, TDRs that were subject to payment default and that had been modified as a TDR during the twelve months preceding the default date. Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or charged-off, whichever occurs first. The recorded investment at December 31, 2012 is inclusive of all partial paydowns and charge-offs since modification date. Loans modified as a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

Puerto Rico
Defaulted during the year ended December 31, 2012
(Dollars In thousands)	Loan count	Recorded investment as of first default date
Commercial real estate non-owner occupied	1	$	1,770
Commercial real estate owner occupied	28		9,011
Commercial and industrial	12		4,031
Construction	5		690
Mortgage	668		94,991
Leasing	24		455
Consumer:
Credit cards	421		3,778
Personal	338		2,266
Auto	2		28
Other	2		8
Total [1]	1,501	$	117,028
[1] Exclude loans for which the Corporation has entered into liquidation agreements with borrowers and guarantors and is accepting payments which differ from the contractual payment schedule. The Corporation considers these as defaulted loans and does not intent to return them to accrual status.

U.S. mainland
Defaulted during the year ended December 31, 2012
(Dollars In thousands)	Loan count	Recorded investment as of first default date
Commercial real estate owner occupied	1	$	1,935
Mortgage	12		1,134
Consumer:
Total	13	$	3,069

Popular, Inc.
Defaulted during the year ended December 31, 2012
(Dollars In thousands)	Loan count	Recorded investment as of first default date
Commercial real estate non-owner occupied	1	$	1,770
Commercial real estate owner occupied	29		10,946
Commercial and industrial	12		4,031
Construction	5		690
Mortgage	680		96,125
Leasing	24		455
Consumer:
Credit cards	421		3,778
Personal	338		2,266
Auto	2		28
Other	2		8
Total	1,514	$	120,097

Puerto Rico
Defaulted during the year ended December 31, 2011
(Dollars In thousands)	Loan count	Recorded investment as of first default date
Commercial multi-family	1	$	143
Commercial real estate non-owner occupied	3		1,109
Commercial real estate owner occupied	15		11,930
Commercial and industrial	25		4,681
Mortgage	522		81,200
Leasing	42		872
Consumer:
Credit cards	463		4,667
Personal	231		1,293
Other	2		29
Total	1,304	$	105,924

U.S. mainland
Defaulted during the year ended December 31, 2011
(Dollars In thousands)	Loan count	Recorded investment as of first default date
Commercial real estate non-owner occupied	1	$	1,984
Commercial real estate owner occupied	1		922
Commercial and industrial	2		1,552
Construction	4		18,034
Legacy	16		6,843
Consumer:
Total	24	$	29,334

Popular, Inc.
Defaulted during the year ended December 31, 2011
(Dollars In thousands)	Loan count	Recorded investment as of first default date
Commercial multi-family	1	$	143
Commercial real estate non-owner occupied	4		3,093
Commercial real estate owner occupied	16		12,852
Commercial and industrial	27		6,233
Construction	4		18,034
Mortgage	522		81,200
Legacy	16		6,843
Leasing	42		872
Consumer:
Credit cards	463		4,667
Personal	231		1,293
Other	2		29
Total	1,328	$	135,258

Commercial, consumer and mortgage loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Corporation evaluates the loan for possible further impairment. The allowance for loan losses may be increased or partial charge-offs may be taken to further write-down the carrying value of the loan.

Credit Quality

The Corporation has defined a dual risk rating system to assign a rating to all credit exposures, particularly for the commercial and construction loan portfolios. Risk ratings in the aggregate provide the Corporation's management the asset quality profile for the loan portfolio. The dual risk rating system provides for the assignment of ratings at the obligor level based on the financial condition of the borrower, and at the credit facility level based on the collateral supporting the transaction. The Corporation's consumer and mortgage loans are not subject to the dual risk rating system. Consumer and mortgage loans are classified substandard or loss based on their delinquency status. All other consumer and mortgage loans that are not classified as substandard or loss would be considered “unrated”.

The Corporation's obligor risk rating scales range from rating 1 (Excellent) to rating 14 (Loss). The obligor risk rating reflects the risk of payment default of a borrower in the ordinary course of business.

Pass Credit Classifications:

Pass (Scales 1 through 8) – Loans classified as pass have a well defined primary source of repayment very likely to be sufficient, with no apparent risk, strong financial position, minimal operating risk, profitability, liquidity and capitalization better than industry standards.

Watch (Scale 9) – Loans classified as watch have acceptable business credit, but borrower's operations, cash flow or financial condition evidence more than average risk, requires above average levels of supervision and attention from Loan Officers.

Special Mention (Scale 10) - Loans classified as special mention have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Corporation's credit position at some future date.

Adversely Classified Classifications:

Substandard (Scales 11 and 12) - Loans classified as substandard are deemed to be inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Loans classified as such have well-defined weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful (Scale 13) - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the additional characteristic that the weaknesses make the collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss (Scale 14) - Uncollectible and of such little value that continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be effected in the future.

Risk ratings scales 10 through 14 conform to regulatory ratings. The assignment of the obligor risk rating is based on relevant information about the ability of borrowers to service their debts such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.

The Corporation periodically reviews loans classified as watch list or worse, to evaluate if they are properly classified, and to determine impairment, if any. The frequency of these reviews will depend on the amount of the aggregate outstanding debt, and the risk rating classification of the obligor. In addition, during the renewal process of applicable credit facilities, the Corporation evaluates the corresponding loan grades.

Loans classified as pass credits are excluded from the scope of the review process described above until: (a) they become past due; (b) management becomes aware of deterioration in the creditworthiness of the borrower; or (c) the customer contacts the Corporation for a modification. In these circumstances, the credit facilities are specifically evaluated to assign the appropriate risk rating classification.

The Corporation has a Credit Process Review Group within the Corporate Credit Risk Management Division (“CCRMD”), which performs annual comprehensive credit process reviews of several middle markets, construction, asset-based and corporate banking lending groups in BPPR. This group evaluates the credit risk profile of each originating unit along with each unit's credit administration effectiveness, including the assessment of the risk rating representative of the current credit quality of the loans, and the evaluation of collateral documentation. The monitoring performed by this group contributes to assess compliance with credit policies and underwriting standards, determine the current level of credit risk, evaluate the effectiveness of the credit management process and identify control deficiencies that may arise in the credit-granting process. Based on its findings, the Credit Process Review Group recommends corrective actions, if necessary, that help in maintaining a sound credit process. CCRMD has contracted an outside loan review firm to perform the credit process reviews for the portfolios of commercial and construction loans in the U.S. mainland operations. The CCRMD participates in defining the review plan with the outside loan review firm and actively participates in the discussions of the results of the loan reviews with the business units. The CCRMD may periodically review the work performed by the outside loan review firm. CCRMD reports the results of the credit process reviews to the Risk Management Committee of the Corporation's Board of Directors.

The following table presents the outstanding balance, net of unearned income, of non-covered loans held-in-portfolio based on the Corporation's assignment of obligor risk ratings as defined at December 31, 2012 and 2011.

December 31, 2012
				Special										Pass/
(In thousands)		Watch		Mention		Substandard		Doubtful		Loss		Sub-total		Unrated		Total
Puerto Rico^[1]
Commercial multi-family		$	978	$	255	$	16,736	$	-	$	-	$	17,969	$	97,124	$	115,093
Commercial real estate non-owner occupied			120,608		156,853		252,068		-		-		529,529		820,904		1,350,433
Commercial real estate owner occupied			195,876		140,788		647,458		1,242		-		985,364		1,057,122		2,042,486
Commercial and industrial			438,758		201,660		410,026		4,162		682		1,055,288		1,732,984		2,788,272
	Total Commercial		756,220		499,556		1,326,288		5,404		682		2,588,150		3,708,134		6,296,284
Construction			645		31,789		41,278		-		-		73,712		138,555		212,267
Mortgage			-		-		569,334		-		-		569,334		4,379,590		4,948,924
Leasing			-		-		4,742		-		123		4,865		535,658		540,523
Consumer:
	Credit cards		-		-		22,965		-		-		22,965		1,160,107		1,183,072
	Home equity lines of credit		-		-		1,333		-		3,269		4,602		12,204		16,806
	Personal		-		-		8,203		-		77		8,280		1,237,502		1,245,782
	Auto		-		-		8,551		-		-		8,551		551,765		560,316
	Other		-		-		3,036		-		-		3,036		225,317		228,353
	Total Consumer		-		-		44,088		-		3,346		47,434		3,186,895		3,234,329
Total Puerto Rico		$	756,865	$	531,345	$	1,985,730	$	5,404	$	4,151	$	3,283,495	$	11,948,832	$	15,232,327
U.S. mainland
Commercial multi-family		$	78,490	$	22,050	$	71,658	$	-	$	-	$	172,198	$	734,489	$	906,687
Commercial real estate non-owner occupied			108,806		55,911		204,532		-		-		369,249		914,750		1,283,999
Commercial real estate owner occupied			22,423		6,747		113,161		-		-		142,331		423,633		565,964
Commercial and industrial			24,489		8,889		65,562		-		-		98,940		706,328		805,268
	Total Commercial		234,208		93,597		454,913		-		-		782,718		2,779,200		3,561,918
Construction			5,268		-		21,182		-		-		26,450		14,140		40,590
Mortgage			-		-		34,077		-		-		34,077		1,095,506		1,129,583
Legacy			26,176		15,225		109,470		-		-		150,871		233,346		384,217
Consumer:
	Credit cards		-		-		505		-		-		505		14,636		15,141
	Home equity lines of credit		-		-		3,150		-		4,304		7,454		466,775		474,229
	Personal		-		-		785		-		941		1,726		141,403		143,129
	Auto		-		-		-		-		4		4		764		768
	Other		-		-		3		-		-		3		1,287		1,290
	Total Consumer		-		-		4,443		-		5,249		9,692		624,865		634,557
Total U.S. mainland		$	265,652	$	108,822	$	624,085	$	-	$	5,249	$	1,003,808	$	4,747,057	$	5,750,865
Popular, Inc.
Commercial multi-family		$	79,468	$	22,305	$	88,394	$	-	$	-	$	190,167	$	831,613	$	1,021,780
Commercial real estate non-owner occupied			229,414		212,764		456,600		-		-		898,778		1,735,654		2,634,432
Commercial real estate owner occupied			218,299		147,535		760,619		1,242		-		1,127,695		1,480,755		2,608,450
Commercial and industrial			463,247		210,549		475,588		4,162		682		1,154,228		2,439,312		3,593,540
	Total Commercial		990,428		593,153		1,781,201		5,404		682		3,370,868		6,487,334		9,858,202
Construction			5,913		31,789		62,460		-		-		100,162		152,695		252,857
Mortgage			-		-		603,411		-		-		603,411		5,475,096		6,078,507
Legacy			26,176		15,225		109,470		-		-		150,871		233,346		384,217
Leasing			-		-		4,742		-		123		4,865		535,658		540,523
Consumer:
	Credit cards		-		-		23,470		-		-		23,470		1,174,743		1,198,213
	Home equity lines of credit		-		-		4,483		-		7,573		12,056		478,979		491,035
	Personal		-		-		8,988		-		1,018		10,006		1,378,905		1,388,911
	Auto		-		-		8,551		-		4		8,555		552,529		561,084
	Other		-		-		3,039		-		-		3,039		226,604		229,643
	Total Consumer		-		-		48,531		-		8,595		57,126		3,811,760		3,868,886
Total Popular, Inc.		$	1,022,517	$	640,167	$	2,609,815	$	5,404	$	9,400	$	4,287,303	$	16,695,889	$	20,983,192

The following table presents the weighted average obligor risk rating at December 31, 2012 for those classifications that consider a range of rating scales.

Weighted average obligor risk rating					(Scales 11 and 12)								(Scales 1 through 8)
Puerto Rico:^[1]						Substandard									Pass
Commercial multi-family							11.94								5.68
Commercial real estate non-owner occupied							11.28								6.98
Commercial real estate owner occupied							11.51								6.93
Commercial and industrial							11.35								6.69
	Total Commercial						11.42								6.81
Construction							11.99								7.86

U.S. mainland:						Substandard									Pass
Commercial multi-family							11.26								7.12
Commercial real estate non-owner occupied							11.38								7.04
Commercial real estate owner occupied							11.28								6.64
Commercial and industrial							11.19								6.73
	Total Commercial						11.31								6.81
Construction							11.28								7.21
Legacy							11.30								7.48

[1]

Excludes covered loans acquired in the Westernbank FDIC-assisted transaction.

December 31, 2011
				Special										Pass/
(In thousands)		Watch		Mention		Substandard		Doubtful		Loss		Sub-total		Unrated		Total
Puerto Rico^[1]
Commercial multi-family		$	420	$	698	$	11,848	$	-	$	-	$	12,966	$	110,150	$	123,116
Commercial real estate non-owner occupied			177,523		134,266		210,596		2,886		-		525,271		736,235		1,261,506
Commercial real estate owner occupied			201,375		192,591		680,912		4,631		-		1,079,509		1,151,917		2,231,426
Commercial and industrial			248,188		282,935		439,853		3,326		1,458		975,760		1,878,774		2,854,534
	Total Commercial		627,506		610,490		1,343,209		10,843		1,458		2,593,506		3,877,076		6,470,582
Construction			2,245		27,820		69,562		1,586		-		101,213		59,728		160,941
Mortgage			-		-		626,771		-		-		626,771		4,062,712		4,689,483
Leasing			-		-		1,365		-		4,277		5,642		543,064		548,706
Consumer:
	Credit cards		-		-		26,373		-		-		26,373		1,189,447		1,215,820
	Home equity lines of credit		-		-		1,757		-		3,456		5,213		14,838		20,051
	Personal		-		-		8,523		-		559		9,082		974,106		983,188
	Auto		-		-		6,830		-		-		6,830		509,434		516,264
	Other		-		-		10,165		-		-		10,165		224,939		235,104
	Total Consumer		-		-		53,648		-		4,015		57,663		2,912,764		2,970,427
Total Puerto Rico		$	629,751	$	638,310	$	2,094,555	$	12,429	$	9,750	$	3,384,795	$	11,455,344	$	14,840,139
U.S. mainland
Commercial multi-family		$	71,335	$	8,230	$	69,400	$	-	$	-	$	148,965	$	536,852	$	685,817
Commercial real estate non-owner occupied			192,080		48,085		231,266		-		-		471,431		932,562		1,403,993
Commercial real estate owner occupied			21,109		20,859		146,367		-		-		188,335		397,505		585,840
Commercial and industrial			30,020		26,131		102,607		-		-		158,758		668,337		827,095
	Total Commercial		314,544		103,305		549,640		-		-		967,489		2,535,256		3,502,745
Construction			3,202		10,609		54,096		-		-		67,907		11,091		78,998
Mortgage			-		-		37,236		-		-		37,236		791,741		828,977
Legacy			34,233		38,724		148,629		-		-		221,586		426,823		648,409
Consumer:
	Credit cards		-		-		735		-		-		735		13,474		14,209
	Home equity lines of credit		-		-		4,774		-		6,590		11,364		526,479		537,843
	Personal		-		-		128		-		93		221		147,184		147,405
	Auto		-		-		6		-		28		34		2,178		2,212
	Other		-		-		24		-		-		24		1,635		1,659
	Total Consumer		-		-		5,667		-		6,711		12,378		690,950		703,328
Total U.S. mainland		$	351,979	$	152,638	$	795,268	$	-	$	6,711	$	1,306,596	$	4,455,861	$	5,762,457
Popular, Inc.
Commercial multi-family		$	71,755	$	8,928	$	81,248	$	-	$	-	$	161,931	$	647,002	$	808,933
Commercial real estate non-owner occupied			369,603		182,351		441,862		2,886		-		996,702		1,668,797		2,665,499
Commercial real estate owner occupied			222,484		213,450		827,279		4,631		-		1,267,844		1,549,422		2,817,266
Commercial and industrial			278,208		309,066		542,460		3,326		1,458		1,134,518		2,547,111		3,681,629
	Total Commercial		942,050		713,795		1,892,849		10,843		1,458		3,560,995		6,412,332		9,973,327
Construction			5,447		38,429		123,658		1,586		-		169,120		70,819		239,939
Mortgage			-		-		664,007		-		-		664,007		4,854,453		5,518,460
Legacy			34,233		38,724		148,629		-		-		221,586		426,823		648,409
Leasing			-		-		1,365		-		4,277		5,642		543,064		548,706
Consumer:
	Credit cards		-		-		27,108		-		-		27,108		1,202,921		1,230,029
	Home equity lines of credit		-		-		6,531		-		10,046		16,577		541,317		557,894
	Personal		-		-		8,651		-		652		9,303		1,121,290		1,130,593
	Auto		-		-		6,836		-		28		6,864		511,612		518,476
	Other		-		-		10,189		-		-		10,189		226,574		236,763
	Total Consumer		-		-		59,315		-		10,726		70,041		3,603,714		3,673,755
Total Popular, Inc.		$	981,730	$	790,948	$	2,889,823	$	12,429	$	16,461	$	4,691,391	$	15,911,205	$	20,602,596

The following table presents the weighted average obligor risk rating at December 31, 2011 for those classifications that consider a range of rating scales.

Weighted average obligor risk rating					(Scales 11 and 12)								(Scales 1 through 8)
Puerto Rico:^[1]						Substandard									Pass
Commercial multi-family							11.91								5.92
Commercial real estate non-owner occupied							11.23								7.16
Commercial real estate owner occupied							11.56								6.85
Commercial and industrial							11.40								6.62
	Total Commercial						11.46								6.79
Construction							11.76								7.84

U.S. mainland:						Substandard									Pass
Commercial multi-family							11.20								7.09
Commercial real estate non-owner occupied							11.35								7.00
Commercial real estate owner occupied							11.41								7.04
Commercial and industrial							11.38								6.85
	Total Commercial						11.35								6.99
Construction							11.78								7.52
Legacy							11.45								7.47

[1]

Excludes covered loans acquired in the Westernbank FDIC-assisted transaction.