EX-99.1

EX-99.1 2 d740485dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

LOGO

Popular, Inc. Announces Second Quarter 2019 Financial Results

•

Net income of $171.1 million in Q2 2019, compared to net income of $167.9 million in Q1 2019.

•

Net interest margin of 4.11% in Q2 2019, compared to 4.20% in Q1 2019.

•

Credit Quality:

•

Non-performing loans held-in-portfolio (“NPLs”) decreased by $21.8 million from Q1 2019; NPLs to loans ratio at 2.1% vs. 2.2% in Q1 2019;

•

Net charge-offs (“NCOs”) decreased by $13.4 million from Q1 2019; NCOs at 0.71% of average loans held-in-portfolio vs. 0.92% in Q1 2019;

•

Allowance for loan losses to loans held-in-portfolio at 2.01% vs. 2.07% in Q1 2019; and

•

Allowance for loan losses to NPLs at 96.3% vs. 93.9% in Q1 2019.

•

Common Equity Tier 1 ratio of 16.80%, Common Equity per Share of $58.63 and Tangible Book Value per Share of $51.44 at June 30, 2019.

SAN JUAN, Puerto Rico — (BUSINESS WIRE) — Popular, Inc. (the “Corporation,” “Popular,” “we,” “us,” “our”) (NASDAQ:BPOP) reported net income of $171.1 million for the quarter ended June 30, 2019, compared to net income of $167.9 million for the quarter ended March 31, 2019.

Ignacio Alvarez, President and Chief Executive Officer, said: “I am pleased to report that we had a strong second quarter, with increases in net interest income, non-interest income, loans and deposits. Our results were driven by robust activity in our P.R. business, which showed growth in credit and debit card activity, continued strength in our auto business and increased mortgage loan originations. Additionally, our U.S. business achieved loan growth after a slow start to the year. Our credit quality metrics continued their positive progression, with reduction in non-performing loans and net charge-offs. While we are closely monitoring the P.R. macro environment and how it may be impacted by recent political events on the Island, we enter the second half of the year with strong momentum.”

Earnings Highlights


(Unaudited)	Quarters ended							Six months ended
(Dollars in thousands, except per share information)	30-Jun-19		31-Mar-19		30-Jun-18			30-Jun-19		30-Jun-18
Net interest income	$	476,316	$	470,963	$	414,136		$	947,279	$	807,183
Provision for loan losses		40,191		41,825		60,054			82,016		129,387
Provision for loan losses - covered loans [1]		—		—		—			—		1,730

Net interest income after provision for loan losses		436,125		429,138		354,082			865,263		676,066
FDIC loss-share income		—		—		102,752			—		94,725
Other non-interest income		138,326		136,430		132,057			274,756		253,581
Operating expenses		363,015		347,420		337,668			710,435		659,670

Income before income tax		211,436		218,148		251,223			429,584		364,702
Income tax expense (benefit)		40,330		50,223		(28,560	)		90,553		(6,405	)

Net income	$	171,106	$	167,925	$	279,783		$	339,031	$	371,107

Net income applicable to common stock	$	170,175	$	166,994	$	278,852		$	337,169	$	369,245

Net income per common share - basic	$	1.77	$	1.69	$	2.74		$	3.46	$	3.63

Net income per common share - diluted	$	1.76	$	1.69	$	2.73		$	3.45	$	3.62

[1]	Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that were covered under the terminated FDIC Shared-Loss Agreements.

Net interest income

Net interest income for the quarter ended June 30, 2019 was $476.3 million, compared to $471.0 million for the previous quarter. The net interest margin was 4.11% for the quarter, compared to 4.20% for the previous quarter.

The increase of $5.3 million in net interest income is mainly the result of the approximately $3.8 million positive impact of one more day in the second quarter. Significant variances were:

•

Higher income from money market, trading and investments by $6.5 million due to higher volume, mostly driven by an increase in deposits at Banco Popular de Puerto Rico (“BPPR”);

•

Higher income from the commercial loan portfolio by $3.4 million, mainly due to higher loan volume at Popular Bank (“Popular U.S.” or “PB”); and

•

Higher income from the consumer loan portfolio by $2.5 million, due to higher volume in the BPPR segment driven primarily by originations through BPPR’s Eloan channel and acquired loans in the U.S.

Partially offset by:

•

Higher cost of interest-bearing deposits by $7.7 million or 5 basis points due to higher average balance in all deposit categories, predominantly in the public sector, retail and corporate deposits in P.R. and digital channel deposits in the U.S. The increase in deposit costs was driven by the cost of public sector deposits in P.R and digital channel deposits in the U.S.

BPPR’s net interest income amounted to $411.5 million for the quarter ended June 30, 2019, compared to $407.4 million in the previous quarter. The increase of $4.1 million in net interest income was mainly due to higher volume of investment securities driven by a higher volume of deposits, as discussed above. This was partially offset by an increase of 4 basis points in the cost of interest-bearing deposits, mainly on public sector deposits, as explained above. The net interest margin for the second quarter of 2019 was 4.37%, a decrease of 12 basis points when compared to 4.49% for the previous quarter. The decrease in net interest margin was due to higher volume of investment securities, which carry a lower yield, a lower discount amortization of the portfolio acquired in the Reliable Transaction and a higher cost of deposits. BPPR’s earning assets yielded 4.98%, compared to 5.07% in the previous quarter, while the cost of interest-bearing deposits was 0.83%, or 4 basis points higher than the 0.79% reported in the previous quarter. Total cost of deposits for the quarter was 0.64%, compared to 0.60% reported in the first quarter of 2019. The impact of one more day in the quarter represented approximately $3.2 million in additional net interest income at BPPR.

Net interest income for Popular U.S. was $74.6 million, for the quarter ended June 30, 2019, compared to $72.8 million during the previous quarter. The increase of $1.8 million in net interest income was primarily due to higher volume of average loans by $175 million mainly commercial loans, partially offset by a higher cost of deposits. Net interest margin for the quarter increased 3 basis points to 3.43%, compared to 3.40% for the previous quarter. Earning assets yielded 4.71%, compared to 4.61% in the previous quarter, while the cost of interest-bearing deposits was 1.59%, compared to 1.51% in the previous quarter. The impact of one more day in the quarter represented approximately $0.6 million in additional net interest income at PB.

Non-interest income

Non-interest income increased by $1.9 million to $138.3 million for the quarter ended June 30, 2019, compared to $136.4 million for the quarter ended March 31, 2019. The increase in non-interest income was primarily driven by:

•

Higher service charges on deposit accounts by $0.9 million, mainly at BPPR, due to higher fees on transactional cash management services;

•

higher other service fees by $9.7 million due to higher debit and credit card interchange fees by $3.8 million as a result of higher transactional volumes, higher insurance fees mainly due to $3.5 million in contingency commissions received during the quarter, and higher trust service fees;

•

favorable variance in adjustments to indemnity reserves on previously sold loans of $1.9 million due to the release of a $4.4 million reserve taken in connection with a 2013 transaction, partially offset by higher provision related to other loans previously sold with credit recourse; and

•

higher other operating income by $1.8 million, principally due to higher net earnings from the portfolio of investments under the equity method.

These variances were partially offset by:

•

Lower income from mortgage banking activities by $11.7 million, mainly due to a decrease in the fair value of mortgage servicing rights by $13.4 million driven in part by an increase in estimated prepayment rates and a lower earnings rate due to lower interest rates as well as the combined effect of an improvement in the early delinquency composition of the serviced portfolio resulting in lower late fees and delays in foreclosure activity; and

•

lower unrealized net gains on equity securities by $0.9 million mainly on deferred compensation plans that have an offsetting expense in personnel costs.

Refer to Table B for further details.

Operating expenses

Operating expenses for the second quarter of 2019 totaled $363.0 million, an increase of $15.6 million when compared to the first quarter of 2019. The increase in operating expenses was driven primarily by:

•

Higher equipment expenses by $1.6 million due to higher software and maintenance expenses;

•

higher professional fees by $7.8 million mainly due to higher advisory expenses by $3.0 million related to regulatory and other Corporate initiatives, higher director compensation by $1.4 million, $1.0 million in collection, appraisals and other credit related fees and higher legal fees by $1.0 million;

•

higher business promotion expenses by $4.4 million due to higher seasonal advertising costs by $1.0 million, higher consumer reward program expense by $2.0 million and higher promotion expenses and donations;

•

higher credit and debit card processing, volume, interchange and other expenses by $1.7 million due to higher volume of transactions; and

•

higher other operating expenses by $1.8 million due to unreimbursed claims on guaranteed mortgage loans claims receivables.

These increases were partially offset by:

•

Lower personnel cost by $1.6 million due to lower commissions, incentives and other bonuses.

Full-time equivalent employees were 8,372 as of June 30, 2019, compared to 8,242 as of March 31, 2019.

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

Income taxes

For the quarter ended June 30, 2019, the Corporation recorded an income tax expense of $40.3 million, compared to $50.2 million for the previous quarter. The decrease is attributed in part to a lower taxable income and a tax benefit of approximately $6.3 million related to adjustments pertaining to periods that the statute of limitations has expired.

The effective tax rate (“ETR”) for the second quarter of 2019 was 19%. Excluding the positive adjustment discussed above the ETR for the quarter was of 22%. The ETR of the Corporation is impacted by the composition and source of its taxable income. For the year 2019, the Corporation expects its consolidated effective tax rate to be within a range from 22-24%.

Credit Quality

During the second quarter of 2019, the Puerto Rico segment continued to reflect positive credit quality trends. Non-performing loans (“NPLs”) continued to improve, and net charge-offs were at 0.75% of the portfolio. The credit quality metrics of our U.S. operation also remained favorable. The Corporation continues to be attentive to the performance of its portfolios and related credit metrics. The following presents credit quality results for the second quarter of 2019.

•

Inflows of NPLs held-in-portfolio, excluding consumer loans, remained stable, decreasing by $3.5 million quarter-over-quarter, primarily related to lower P.R. commercial inflows. P.R. mortgage inflows for the quarter remained stable, mainly driven by lower early delinquencies.

•

Total non-performing loans held-in-portfolio decreased by $21.8 million from the first quarter of 2019, mainly driven by lower P.R. commercial NPLs of $17.2 million, primarily related to loan collections. P.R. mortgage NPLs continued to gradually improve, decreasing by $8.8 million from the first quarter of 2019. At June 30, 2019, the ratio of NPLs to total loans held-in-portfolio was 2.1%, compared to 2.2% in the first quarter of 2019.

•

Net charge-offs decreased by $13.4 million from the first quarter of 2019, primarily driven by lower P.R. commercial NCOs of $16.4 million, as the prior quarter included a charge-off from a single large relationship. In addition, P.R. mortgage NCOs were lower by $2.5 million when compared to the prior quarter. The Corporation’s ratio of annualized net charge-offs to average loans held-in-portfolio was 0.71%, compared to 0.92% in the first quarter of 2019. Refer to Table J for further information on net charge-offs and related ratios.

•

The allowance for loan and lease losses (“ALLL”) decreased by $7.0 million from the first quarter of 2019 to $543.7 million. The P.R. segment ALLL decreased by $8.2 million, principally due to improvements in the mortgage portfolio.

•

The general and specific reserves totaled $443.6 million and $100.0 million, respectively, at quarter-end, compared with $448.7 million and $101.9 million, respectively, as of March 31, 2019. The ratio of the allowance for loan losses to loans held-in-portfolio was 2.01% in the second quarter of 2019, compared to 2.07% in the previous quarter. The ratio of the allowance for loan losses to NPLs held-in-portfolio stood at 96.3% compared to 93.9% in the previous quarter.

•

The provision for loan losses for the second quarter of 2019 remained essentially flat at $40.2 million. The provision to net charge-offs ratio was 85.2% in the second quarter of 2019, compared to 69.1% in the previous quarter.

Non-Performing Assets


(Unaudited)
(In thousands)	30-Jun-19			31-Mar-19			30-Jun-18
Total non-performing loans held-in-portfolio	$	564,358		$	586,202		$	643,199
Other real estate owned (“OREO”)		118,851			125,478			142,063

Total non-performing assets	$	683,209		$	711,680		$	785,262

Net charge-offs for the quarter	$	47,153		$	60,545		$	57,614


Ratios:
Loans held-in-portfolio	$	27,005,745		$	26,647,708		$	24,608,516
Non-performing loans held-in-portfolio to loans held-in-portfolio		2.09	%		2.20	%		2.61	%
Allowance for loan losses to loans held-in-portfolio		2.01			2.07			2.61
Allowance for loan losses to non-performing loans, excluding loans held-for-sale		96.33			93.93			99.97

Refer to Table H for additional information.

Provision for Loan Losses


(Unaudited)	Quarters ended						Six months ended
(In thousands)	30-Jun-19		31-Mar-19		30-Jun-18		30-Jun-19		30-Jun-18
Provision for loan losses:
BPPR	$	28,975	$	31,454	$	44,405	$	60,429	$	101,123
Popular U.S.		11,216		10,371		15,649		21,587		28,264

Total provision for loan losses - non-covered loans	$	40,191	$	41,825	$	60,054	$	82,016	$	129,387

Provision for loan losses - covered loans		—		—		—		—		1,730

Total provision for loan losses	$	40,191	$	41,825	$	60,054	$	82,016	$	131,117

Credit Quality by Segment


(Unaudited)
(In thousands)	Quarters ended
BPPR	30-Jun-19			31-Mar-19			30-Jun-18
Provision for loan losses	$	28,975		$	31,454		$	44,405
Net charge-offs		37,167			54,229			44,465
Total non-performing loans held-in-portfolio		522,525			544,992			589,838
Allowance / loans held-in-portfolio		2.38	%		2.42	%		3.14	%

	Quarters ended
Popular U.S.	30-Jun-19			31-Mar-19			30-Jun-18
Provision for loan losses	$	11,216		$	10,371		$	15,649
Net charge-offs		9,986			6,316			13,149
Total non-performing loans held-in-portfolio		41,833			41,210			53,361
Allowance / loans held-in-portfolio		0.97	%		1.00	%		1.16	%

Financial Condition Highlights


(Unaudited)
(In thousands)	30-Jun-19		31-Mar-19		30-Jun-18
Cash and money market investments	$	3,563,819	$	5,190,692	$	9,029,010
Investment securities		17,038,098		13,839,874		10,847,601
Loans		27,005,745		26,647,708		24,608,516
Total assets		50,617,221		48,680,607		47,535,177
Deposits		42,059,837		40,879,838		39,377,561
Borrowings		1,604,670		1,377,401		1,869,774
Total liabilities		44,897,387		43,240,547		42,245,516
Stockholders’ equity		5,719,834		5,440,060		5,289,661

Total assets increased by $1.9 billion from the first quarter of 2019, driven by:

•

An increase of $3.2 billion in debt securities available-for-sale mainly due to purchases of mortgage-backed securities and U.S. Treasury securities at BPPR; and

•

An increase of $0.4 billion in loans held-in-portfolio, mainly driven by the growth of auto loans and leases at the BPPR segment coupled with an increase at PB across its portfolios;

Partially offset by:

•

A net decrease of $1.6 billion in cash and money market investments, mainly due to purchases of available-for-sale debt securities.

Total liabilities increased by $1.6 billion from the first quarter of 2019, mainly due to:

•

An increase of $1.2 billion in deposits mainly in Puerto Rico public sector deposits at BPPR;

•

An increase of $0.2 billion in other short-term borrowings due to Federal Home Loan Bank advances at PB; and

•

An increase of $0.2 billion in other liabilities due to unsettled purchases of securities transactions.

Stockholders’ equity increased by approximately $0.3 billion from the first quarter of 2019, principally due to the net income for the quarter of $0.2 billion and higher unrealized gains on debt securities available-for-sale by $0.1 million.

Common equity tier-1 ratio (“CET1”), common equity per share and tangible book value per share were 16.80%, $58.63 and $51.44, respectively, at June 30, 2019, compared to 16.39%, $55.78 and $48.58 at March 31, 2019. Refer to Table A for capital ratios.

Simplifications to the Capital Rule Pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996

On July 9, 2019, the federal banking regulatory agencies issued a final rule that simplified several requirements in the agencies’ regulatory capital rules. These simplification rules, effective on April 1, 2020, alleviate the limitations to the amount of mortgage servicing assets and certain deferred tax assets allowed as CET1 and increase the risk weight for the portion of the deferred tax assets included as a component of CET1 from 100% to 250%, among other provisions. As a result of these rules, the Corporation’s risk-based capital ratios are expected to decrease driven by the change in risk weighting. On a pro forma basis as of June 30, 2019, the impact would have been a reduction of approximately 55 bps.

Cautionary Note Regarding Forward-Looking Statements

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

More information on the risks and important factors that could affect the Corporation’s future results and financial condition is included in our Annual Report on Form 10-K for the year ended December 31, 2018, our Form 10-Q for the quarter ended March 31, 2019 and in our Form 10-Q for the quarter ended June 30, 2019 to be filed with the Securities and Exchange Commission. Our filings are available on the Corporation’s website (www.popular.com) and on the Securities and Exchange Commission website (www.sec.gov). The Corporation assumes no obligation to update or revise any forward-looking statements or information which speak as of their respective dates.

About Popular, Inc.

Popular, Inc. is the leading financial institution in Puerto Rico, by both assets and deposits, and ranks among the top 50 U.S. bank holding companies by assets. Founded in 1893, Banco Popular de Puerto Rico, Popular’s principal subsidiary, provides retail, mortgage and commercial banking services in Puerto Rico and the U.S. Virgin Islands. Popular also offers auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. In the mainland United States, Popular provides retail, mortgage and commercial banking services through its New York-chartered banking subsidiary, Popular Bank, which has branches located in New York, New Jersey and Florida.

Conference Call

Popular will hold a conference call to discuss its financial results today Wednesday, July 24, 2019 at 11:00 a.m. Eastern Time. The call will be open to the public and broadcasted live over the Internet, and can be accessed through the Investor Relations section of the Corporation’s website: www.popular.com.

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

A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Friday, August 23, 2019. The replay dial-in is: 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10132930.

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

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table A - Selected Ratios and Other Information

Table B - Consolidated Statement of Operations

Table C - Consolidated Statement of Financial Condition

Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER

Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE

Table F - Mortgage Banking Activities and Other Service Fees

Table G - Loans and Deposits

Table H - Non-Performing Assets

Table I - Activity in Non-Performing Loans

Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios

Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED

Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS

Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - POPULAR U.S. OPERATIONS

Table N - Reconciliation to GAAP Financial Measures

POPULAR, INC.

Financial Supplement to Second Quarter 2019 Earnings Release

Table A - Selected Ratios and Other Information

(Unaudited)


	Quarters ended									Six months ended
	30-Jun-19			31-Mar-19			30-Jun-18			30-Jun-19			30-Jun-18
Basic EPS	$	1.77		$	1.69		$	2.74		$	3.46		$	3.63
Diluted EPS	$	1.76		$	1.69		$	2.73		$	3.45		$	3.62
Average common shares outstanding		96,305,118			98,581,743			101,892,402			97,437,141			101,794,914
Average common shares outstanding - assuming dilution		96,457,448			98,758,898			102,031,955			97,591,989			101,932,477
Common shares outstanding at end of period		96,703,351			96,629,891			102,296,440			96,703,351			102,296,440
Market value per common share	$	54.24		$	52.13		$	45.21		$	54.24		$	45.21
Market capitalization - (In millions)	$	5,245		$	5,037		$	4,625		$	5,245		$	4,625
Return on average assets		1.38	%		1.40	%		2.40	%		1.39	%		1.64	%
Return on average common equity		12.31	%		12.17	%		20.84	%		12.24	%		14.10	%
Net interest margin		4.11	%		4.20	%		3.81	%		4.16	%		3.85	%
Common equity per share	$	58.63		$	55.78		$	51.22		$	58.63		$	51.22
Tangible common book value per common share (non-GAAP) [1]	$	51.44		$	48.58		$	44.78		$	51.44		$	44.78
Tangible common equity to tangible assets (non-GAAP) [1]		9.96	%		9.78	%		9.77	%		9.96	%		9.77	%
Tier 1 capital		16.80	%		16.39	%		17.47	%		16.80	%		17.47	%
Total capital		19.39	%		19.00	%		20.41	%		19.39	%		20.41	%
Tier 1 leverage		9.75	%		9.57	%		9.82	%		9.75	%		9.82	%
Common Equity Tier 1 capital		16.80	%		16.39	%		17.47	%		16.80	%		17.47	%

[1]	Refer to Table N for reconciliation to GAAP financial measures.

POPULAR, INC.

Financial Supplement to Second Quarter 2019 Earnings Release

Table B - Consolidated Statement of Operations

(Unaudited)


	Quarters ended						Variance			Quarter ended			Variance			Six months ended
(In thousands, except per share information)	30-Jun-19			31-Mar-19			Q2 2019 vs. Q1 2019			30-Jun-18			Q2 2019 vs. Q2 2018			30-Jun-19		30-Jun-18
Interest income:
Loans	$	454,204		$	447,713		$	6,491		$	386,277		$	67,927		$	901,917	$	759,861
Money market investments		22,534			29,220			(6,686	)		36,392			(13,858	)		51,754		58,677
Investment securities		94,241			81,036			13,205			58,181			36,060			175,277		115,390

Total interest income		570,979			557,969			13,010			480,850			90,129			1,128,948		933,928

Interest expense:
Deposits		78,449			70,826			7,623			45,228			33,221			149,275		83,916
Short-term borrowings		1,656			1,600			56			1,752			(96	)		3,256		3,765
Long-term debt		14,558			14,580			(22	)		19,734			(5,176	)		29,138		39,064

Total interest expense		94,663			87,006			7,657			66,714			27,949			181,669		126,745

Net interest income		476,316			470,963			5,353			414,136			62,180			947,279		807,183
Provision for loan losses - non-covered loans		40,191			41,825			(1,634	)		60,054			(19,863	)		82,016		129,387
Provision for loan losses - covered loans		—			—			—			—			—			—		1,730

Net interest income after provision for loan losses		436,125			429,138			6,987			354,082			82,043			865,263		676,066

Service charges on deposit accounts		39,617			38,691			926			37,102			2,515			78,308		73,557
Other service fees		74,031			64,307			9,724			62,876			11,155			138,338		123,478
Mortgage banking activities		(1,773	)		9,926			(11,699	)		10,071			(11,844	)		8,153		22,139
Net gain (loss), including impairment, on equity securities		528			1,433			(905	)		234			294			1,961		(412	)
Net profit (loss) on trading account debt securities		422			260			162			21			401			682		(177	)
Adjustments (expense) to indemnity reserves on loans sold		1,840			(93	)		1,933			(527	)		2,367			1,747		(3,453	)
FDIC loss-share income		—			—			—			102,752			(102,752	)		—		94,725
Other operating income		23,661			21,906			1,755			22,280			1,381			45,567		38,449

Total non-interest income		138,326			136,430			1,896			234,809			(96,483	)		274,756		348,306

Operating expenses:
Personnel costs
Salaries		86,161			84,450			1,711			78,008			8,153			170,611		156,405
Commissions, incentives and other bonuses		22,636			25,761			(3,125	)		20,004			2,632			48,397		41,320
Pension, postretirement and medical insurance		10,406			9,761			645			9,363			1,043			20,167		19,292
Other personnel costs, including payroll taxes		22,296			23,145			(849	)		16,957			5,339			45,441		33,167

Total personnel costs		141,499			143,117			(1,618	)		124,332			17,167			284,616		250,184
Net occupancy expenses		23,299			23,537			(238	)		22,425			874			46,836		45,227
Equipment expenses		21,323			19,705			1,618			17,775			3,548			41,028		34,981
Other taxes		12,577			11,662			915			10,876			1,701			24,239		21,778
Professional fees
Collections, appraisals and other credit related fees		4,741			3,724			1,017			4,228			513			8,465		7,286
Programming, processing and other technology services		61,033			60,178			855			54,547			6,486			121,211		105,852
Legal fees, excluding collections		4,446			3,489			957			4,907			(461	)		7,935		10,670
Other professional fees		25,028			20,075			4,953			30,221			(5,193	)		45,103		53,080

Total professional fees		95,248			87,466			7,782			93,903			1,345			182,714		176,888
Communications		5,955			5,849			106			5,382			573			11,804		11,288
Business promotion		19,119			14,674			4,445			16,778			2,341			33,793		28,787
FDIC deposit insurance		5,278			4,806			472			7,004			(1,726	)		10,084		13,924
Other real estate owned (OREO) expenses		1,237			2,677			(1,440	)		6,947			(5,710	)		3,914		13,078
Credit and debit card processing, volume, interchange and other expenses		9,900			8,223			1,677			9,635			265			18,123		14,243
Other operating expenses
Operational losses		4,778			4,888			(110	)		9,001			(4,223	)		9,666		18,925
All other		20,431			18,504			1,927			11,286			9,145			38,935		25,718

Total other operating expenses		25,209			23,392			1,817			20,287			4,922			48,601		44,643
Amortization of intangibles		2,371			2,312			59			2,324			47			4,683		4,649

Total operating expenses		363,015			347,420			15,595			337,668			25,347			710,435		659,670

Income before income tax		211,436			218,148			(6,712	)		251,223			(39,787	)		429,584		364,702
Income tax expense (benefit)		40,330			50,223			(9,893	)		(28,560	)		68,890			90,553		(6,405	)

Net income	$	171,106		$	167,925		$	3,181		$	279,783		$	(108,677	)	$	339,031	$	371,107

Net income applicable to common stock	$	170,175		$	166,994		$	3,181		$	278,852		$	(108,677	)	$	337,169	$	369,245

Net income per common share - basic	$	1.77		$	1.69		$	0.08		$	2.74		$	(0.97	)	$	3.46	$	3.63

Net income per common share - diluted	$	1.76		$	1.69		$	0.07		$	2.73		$	(0.97	)	$	3.45	$	3.62

Dividends Declared per Common Share	$	0.30		$	0.30		$	—		$	0.25		$	0.05		$	0.60	$	0.50

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table C - Consolidated Statement of Financial Condition

(Unaudited)


(In thousands)	30-Jun-19			31-Mar-19			30-Jun-18			Variance Q2 2019 vs. Q1 2019
Assets:
Cash and due from banks	$	391,703		$	376,558		$	400,568		$	15,145
Money market investments		3,172,116			4,814,134			8,628,442			(1,642,018	)
Trading account debt securities, at fair value		35,623			39,217			41,637			(3,594	)
Debt securities available-for-sale, at fair value		16,734,722			13,542,695			10,542,010			3,192,027
Debt securities held-to-maturity, at amortized cost		99,599			99,455			104,937			144
Equity securities		168,154			158,507			159,017			9,647
Loans held-for-sale, at lower of cost or fair value		54,028			43,985			73,859			10,043
Loans held-in-portfolio		27,171,467			26,808,287			24,752,700			363,180
Less: Unearned income		165,722			160,579			144,184			5,143
Allowance for loan losses		543,666			550,628			643,018			(6,962	)

Total loans held-in-portfolio, net		26,462,079			26,097,080			23,965,498			364,999

Premises and equipment, net		554,614			557,517			548,432			(2,903	)
Other real estate		118,851			125,478			142,063			(6,627	)
Accrued income receivable		170,886			162,797			165,592			8,089
Mortgage servicing assets, at fair value		153,021			167,813			164,025			(14,792	)
Other assets		1,806,825			1,799,728			1,940,780			7,097
Goodwill		671,122			671,122			627,294			—
Other intangible assets		23,878			24,521			31,023			(643	)

Total assets	$	50,617,221		$	48,680,607		$	47,535,177		$	1,936,614

Liabilities and Stockholders’ Equity:
Liabilities:
Deposits:
Non-interest bearing	$	8,955,304		$	9,046,104		$	9,392,263		$	(90,800	)
Interest bearing		33,104,533			31,833,734			29,985,298			1,270,799

Total deposits		42,059,837			40,879,838			39,377,561			1,179,999

Assets sold under agreements to repurchase		233,091			200,871			306,911			32,220
Other short-term borrowings		160,000			42			1,200			159,958
Notes payable		1,211,579			1,176,488			1,561,663			35,091
Other liabilities		1,232,880			983,308			998,181			249,572

Total liabilities		44,897,387			43,240,547			42,245,516			1,656,840

Stockholders’ equity:
Preferred stock		50,160			50,160			50,160			—
Common stock		1,044			1,043			1,043			1
Surplus		4,316,225			4,313,040			4,302,946			3,185
Retained earnings		1,935,826			1,794,644			1,515,058			141,182
Treasury stock		(392,208	)		(394,848	)		(82,754	)		2,640
Accumulated other comprehensive loss, net of tax		(191,213	)		(323,979	)		(496,792	)		132,766

Total stockholders’ equity		5,719,834			5,440,060			5,289,661			279,774

Total liabilities and stockholders’ equity	$	50,617,221		$	48,680,607		$	47,535,177		$	1,936,614

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER

(Unaudited)


	Quarters ended																								Variance
	30-Jun-19								31-Mar-19								30-Jun-18								Q2 2019 vs. Q1 2019									Q2 2019 vs. Q2 2018
($ amounts in millions; yields not on a taxable equivalent basis)	Average balance			Income / Expense		Yield / Rate			Average balance			Income / Expense		Yield / Rate			Average balance			Income / Expense		Yield / Rate			Average balance			Income / Expense			Yield / Rate			Average balance			Income / Expense			Yield / Rate
Assets:
Interest earning assets:
Money market, trading and investment securities	$	19,664		$	116.8		2.38	%	$	18,773		$	110.3		2.37	%	$	19,257		$	94.6		1.97	%	$	891		$	6.5			0.01	%	$	407		$	22.2			0.41	%

Loans not covered under loss sharing agreements with the FDIC:
Commercial		12,156			181.7		5.99			12,064			178.3		5.99			11,537			166.0		5.77			92			3.4			—			619			15.7			0.22
Construction		806			13.5		6.74			807			13.6		6.85			918			14.3		6.28			(1	)		(0.1	)		(0.11	)		(112	)		(0.8	)		0.46
Mortgage		7,113			91.2		5.13			7,134			91.1		5.11			7,109			91.0		5.12			(21	)		0.1			0.02			4			0.2			0.01
Consumer		2,864			85.3		11.95			2,814			82.8		11.93			2,856			82.0		11.52			50			2.5			0.02			8			3.3			0.43
Auto		2,822			67.7		9.62			2,729			67.6		10.05			949			20.2		8.55			93			0.1			(0.43	)		1,873			47.5			1.07
Lease financing		972			14.8		6.07			944			14.3		6.08			850			12.7		5.99			28			0.5			(0.01	)		122			2.1			0.08

Total loans		26,733			454.2		6.81			26,492			447.7		6.83			24,219			386.2		6.39			241			6.5			(0.02	)		2,514			68.0			0.42

Total interest earning assets	$	46,397		$	571.0		4.93	%	$	45,265		$	558.0		4.98	%	$	43,476		$	480.8		4.43	%	$	1,132			13.0			(0.05	)%	$	2,921		$	90.2			0.50	%

Allowance for loan losses		(553	)							(576	)							(645	)							23									92
Other non-interest earning assets		3,931								3,938								4,019								(7	)								(88	)

Total average assets	$	49,775							$	48,627							$	46,850							$	1,148								$	2,925

Liabilities and Stockholders’ Equity:
Interest bearing deposits:
NOW and money market	$	14,953		$	39.3		1.05	%	$	14,051		$	33.8		0.97	%	$	12,476		$	15.7		0.51	%	$	902		$	5.5			0.08	%	$	2,477		$	23.6			0.54	%
Savings		10,067			10.5		0.42			9,847			9.9		0.41			9,472			7.8		0.33			220			0.6			0.01			595			2.7			0.09
Time deposits		7,827			28.7		1.47			7,676			27.1		1.43			7,749			21.7		1.12			151			1.6			0.04			78			7.0			0.35

Total interest-bearing deposits		32,847			78.5		0.96			31,574			70.8		0.91			29,697			45.2		0.61			1,273			7.7			0.05			3,150			33.3			0.35
Borrowings		1,448			16.2		4.50			1,469			16.2		4.44			1,962			21.5		4.39			(21	)		—			0.06			(514	)		(5.3	)		0.11

Total interest-bearing liabilities		34,295			94.7		1.11			33,043			87.0		1.07			31,659			66.7		0.85			1,252			7.7			0.04			2,636			28.0			0.26

Net interest spread							3.82	%							3.91	%							3.58	%								(0.09	)%								0.24	%

Non-interest bearing deposits		8,868								8,953								8,966								(85	)								(98	)
Other liabilities		1,016								1,016								811								—									205
Stockholders’ equity		5,596								5,615								5,414								(19	)								182

Total average liabilities and stockholders’ equity	$	49,775							$	48,627							$	46,850							$	1,148								$	2,925

Net interest income / margin non-taxable equivalent basis				$	476.3		4.11	%				$	471.0		4.20	%				$	414.1		3.81	%				$	5.3			(0.09	)%				$	62.2			0.30	%

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE

(Unaudited)


	Six months ended
	30-Jun-19								30-Jun-18								Variance
($ amounts in millions; yields not on a taxable equivalent basis)	Average balance			Income / Expense		Yield / Rate			Average balance			Income / Expense		Yield / Rate			Average balance			Income / Expense			Yield / Rate
Assets:
Interest earning assets:
Money market, trading and investment securities	$	19,221		$	227.0		2.38	%	$	18,010		$	174.1		1.94	%	$	1,211		$	52.9			0.44	%

Loans not covered under loss-sharing agreements with the FDIC:
Commercial		12,110			360.0		5.99			11,503			327.5		5.74			607			32.5			0.25
Construction		806			27.2		6.79			911			27.9		6.18			(105	)		(0.7	)		0.61
Mortgage		7,124			182.3		5.12			7,091			180.0		5.08			33			2.3			0.04
Consumer		2,839			168.1		11.94			2,871			160.2		11.25			(32	)		7.9			0.69
Auto		2,776			135.3		9.83			935			39.2		8.45			1,841			96.1			1.38
Lease financing		958			29.1		6.07			835			25.0		5.99			123			4.1			0.08

Total loans		26,613			902.0		6.82			24,146			759.8		6.33			2,467			142.2			0.49

Total interest earning assets	$	45,834		$	1,129.0		4.96	%	$	42,156		$	933.9		4.46	%	$	3,678		$	195.1			0.50	%

Allowance for loan losses		(564	)							(640	)							76
Other non-interest earning assets		3,934								4,041								(107	)

Total average assets	$	49,204							$	45,557							$	3,647

Liabilities and Stockholders’ Equity:
Interest bearing deposits:
NOW and money market	$	14,504		$	73.0		1.02	%	$	11,838		$	27.2		0.46	%	$	2,666		$	45.8			0.56	%
Savings		9,958			20.4		0.41			9,110			13.0		0.29			848			7.4			0.12
Time deposits		7,752			55.9		1.45			7,723			43.7		1.14			29			12.2			0.31

Total interest-bearing deposits		32,214			149.3		0.93			28,671			83.9		0.59			3,543			65.4			0.34
Borrowings		1,458			32.4		4.46			2,001			42.8		4.30			(543	)		(10.4	)		0.16

Total interest-bearing liabilities		33,672			181.7		1.09			30,672			126.7		0.83			3,000			55.0			0.26

Net interest spread							3.87	%							3.63	%								0.24	%

Non-interest bearing deposits		8,910								8,702								208
Other liabilities		1,017								855								162
Stockholders’ equity		5,605								5,328								277

Total average liabilities and stockholders’ equity	$	49,204							$	45,557							$	3,647

Net interest income / margin non-taxable equivalent basis				$	947.3		4.16	%				$	807.2		3.85	%				$	140.1			0.31	%

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table F - Mortgage Banking Activities and Other Service Fees

(Unaudited)

Mortgage Banking Activities


	Quarters ended									Variance						Six months ended						Variance
(In thousands)	30-Jun-19			31-Mar-19			30-Jun-18			Q2 2019 vs.Q1 2019			Q2 2019 vs.Q2 2018			30-Jun-19			30-Jun-18			2019 vs. 2018
Mortgage servicing fees, net of fair value adjustments:
Mortgage servicing fees	$	11,916		$	11,687		$	12,425		$	229		$	(509	)	$	23,603		$	24,881		$	(1,278	)
Mortgage servicing rights fair value adjustments		(17,186	)		(3,825	)		(4,622	)		(13,361	)		(12,564	)		(21,011	)		(8,929	)		(12,082	)

Total mortgage servicing fees, net of fair value adjustments		(5,270	)		7,862			7,803			(13,132	)		(13,073	)		2,592			15,952			(13,360	)

Net gain on sale of loans, including valuation on loans held-for-sale		5,215			4,017			2,460			1,198			2,755			9,232			3,517			5,715

Trading account (loss) profit:
Unrealized (losses) gains on outstanding derivative positions		(227	)		—			45			(227	)		(272	)		(227	)		(176	)		(51	)
Realized (losses) gains on closed derivative positions		(1,491	)		(1,953	)		(237	)		462			(1,254	)		(3,444	)		2,846			(6,290	)

Total trading account (loss) profit		(1,718	)		(1,953	)		(192	)		235			(1,526	)		(3,671	)		2,670			(6,341	)

Total mortgage banking activities	$	(1,773	)	$	9,926		$	10,071		$	(11,699	)	$	(11,844	)	$	8,153		$	22,139		$	(13,986	)

Other Service Fees


	Quarters ended						Variance				Six months ended				Variance
(In thousands)	30-Jun-19		31-Mar-19		30-Jun-18		Q2 2019 vs.Q1 2019		Q2 2019 vs.Q2 2018		30-Jun-19		30-Jun-18		2019 vs. 2018
Other service fees:
Debit card fees	$	12,034	$	11,170	$	11,684	$	864	$	350	$	23,204	$	23,322	$	(118	)
Insurance fees		17,253		12,791		13,027		4,462		4,226		30,044		25,626		4,418
Credit card fees		24,794		22,286		22,658		2,508		2,136		47,080		44,341		2,739
Sale and administration of investment products		5,732		5,259		5,020		473		712		10,991		10,375		616
Trust fees		5,522		4,716		5,139		806		383		10,238		10,236		2
Other fees		8,696		8,085		5,348		611		3,348		16,781		9,578		7,203

Total other service fees	$	74,031	$	64,307	$	62,876	$	9,724	$	11,155	$	138,338	$	123,478	$	14,860

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table G - Loans and Deposits

(Unaudited)

Loans - Ending Balances


							Variance
(In thousands)	30-Jun-19		31-Mar-19		30-Jun-18		Q2 2019 vs. Q1 2019			Q2 2019 vs. Q2 2018
Loans held-in-portfolio:
Commercial	$	12,216,603	$	12,058,310	$	11,589,993	$	158,293		$	626,610
Construction		825,419		791,320		899,323		34,099			(73,904	)
Legacy [1]		23,893		24,404		29,250		(511	)		(5,357	)
Lease financing		991,546		963,232		872,098		28,314			119,448
Mortgage		7,198,959		7,207,180		7,376,711		(8,221	)		(177,752	)
Auto		2,796,403		2,742,095		915,063		54,308			1,881,340
Consumer		2,952,922		2,861,167		2,926,078		91,755			26,844

Total loans held-in-portfolio	$	27,005,745	$	26,647,708	$	24,608,516	$	358,037		$	2,397,229

Loans held-for-sale:
Mortgage		54,028		43,985		73,859		10,043			(19,831	)

Total loans held-for-sale	$	54,028	$	43,985	$	73,859	$	10,043		$	(19,831	)

Total loans	$	27,059,773	$	26,691,693	$	24,682,375	$	368,080		$	2,377,398

[1]	The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the Popular U.S. segment.

Deposits - Ending Balances


							Variance
(In thousands)	30-Jun-19		31-Mar-19		30-Jun-18		Q2 2019 vs. Q1 2019			Q2 2019 vs.Q2 2018
Demand deposits [1]	$	17,750,676	$	16,871,924	$	15,813,188	$	878,752		$	1,937,488
Savings, NOW and money market deposits (non-brokered)		16,011,646		15,806,355		15,751,376		205,291			260,270
Savings, NOW and money market deposits (brokered)		384,251		395,795		389,912		(11,544	)		(5,661	)
Time deposits (non-brokered)		7,816,939		7,724,161		7,284,697		92,778			532,242
Time deposits (brokered CDs)		96,325		81,603		138,388		14,722			(42,063	)

Total deposits	$	42,059,837	$	40,879,838	$	39,377,561	$	1,179,999		$	2,682,276

[1]	Includes interest and non-interest bearing demand deposits.

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table H - Non-Performing Assets

(Unaudited)


																			Variance
(Dollars in thousands)	30-Jun-19			As a % of loans HIP by category			31-Mar-19			As a % of loans HIP by category			30-Jun-18			As a % of loans HIP by category			Q2 2019 vs. Q1 2019			Q2 2019 vs. Q2 2018
Non-accrual loans:
Commercial	$	155,348			1.3	%	$	169,154			1.4	%	$	164,949			1.4	%	$	(13,806	)	$	(9,601	)
Construction		13,848			1.7			13,848			1.7			20,460			2.3			—			(6,612	)
Legacy [1]		2,469			10.3			2,583			10.6			3,663			12.5			(114	)		(1,194	)
Lease financing		2,830			0.3			2,525			0.3			3,696			0.4			305			(866	)
Mortgage		318,396			4.4			327,658			4.5			384,655			5.2			(9,262	)		(66,259	)
Auto		28,085			1.0			25,162			0.9			12,855			1.4			2,923			15,230
Consumer		43,382			1.5			45,272			1.6			52,921			1.8			(1,890	)		(9,539	)

Total non-performing loans held-in-portfolio		564,358			2.1	%		586,202			2.2	%		643,199			2.6	%		(21,844	)		(78,841	)
Other real estate owned (“OREO”)		118,851						125,478						142,063						(6,627	)		(23,212	)

Total non-performing assets [2]	$	683,209					$	711,680					$	785,262					$	(28,471	)	$	(102,053	)

Accruing loans past due 90 days or more [3] [4]	$	494,488					$	550,717					$	901,473					$	(56,229	)	$	(406,985	)

Ratios:
Non-performing assets to total assets		1.35	%					1.46	%					1.65	%
Non-performing loans held-in-portfolio to loans held-in-portfolio		2.09						2.20						2.61
Allowance for loan losses to loans held-in-portfolio		2.01						2.07						2.61
Allowance for loan losses to non-performing loans, excluding loans held-for-sale		96.33						93.93						99.97

[1]	The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the Popular U.S. segment.

[2]	There were no non-performing loans held-for-sale as of June 30, 2019, March 31, 2019 and June 30, 2018.

[3]

It is the Corporation’s policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to non-performing since the principal repayment is insured. These include loans rebooked, which were previously pooled into GNMA securities amounting to $96 million (March 31, 2019 - $106 million; June 30, 2018 - $298 million). Under the GNMA program, issuers such as BPPR have the option but not the obligation to repurchase loans that are 90 days or more past due. For accounting purposes, these loans subject to the repurchase option are required to be reflected on the financial statements of BPPR with an offsetting liability. These balances include $262 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of June 30, 2019 (March 31, 2019 - $292 million; June 30, 2018 - $216 million). Furthermore, the Corporation has approximately $66 million in reverse mortgage loans which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation’s policy to exclude these balances from non-performing assets (March 31, 2019 - $67 million; June 30 2018 - $66 million).

[4]

The carrying value of loans accounted for under ASC Subtopic 310-30 that are contractually 90 days or more past due was $248 million at June 30, 2019 (March 31, 2019 - $257 million; June 30, 2018 - $265 million). This amount is excluded from the above table as the loans’ accretable yield interest recognition is independent from the underlying contractual loan delinquency status.

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table I - Activity in Non-Performing Loans

(Unaudited)


Commercial loans held-in-portfolio:
	Quarter ended 30-Jun-19									Quarter ended 31-Mar-19
(In thousands)	BPPR			Popular U.S.			Popular, Inc.			BPPR			Popular U.S.			Popular, Inc.
Beginning balance NPLs	$	166,293		$	2,861		$	169,154		$	182,950		$	1,076		$	184,026
Plus:
New non-performing loans		2,209			4,362			6,571			10,554			2,220			12,774
Less:
Non-performing loans transferred to OREO		(1,749	)		—			(1,749	)		(962	)		—			(962	)
Non-performing loans charged-off		(2,931	)		(680	)		(3,611	)		(17,918	)		(50	)		(17,968	)
Loans returned to accrual status / loan collections		(14,683	)		(334	)		(15,017	)		(8,331	)		(385	)		(8,716	)

Ending balance NPLs	$	149,139		$	6,209		$	155,348		$	166,293		$	2,861		$	169,154


Construction loans held-in-portfolio:
	Quarter ended 30-Jun-19									Quarter ended 31-Mar-19
(In thousands)	BPPR			Popular U.S.			Popular, Inc.			BPPR			Popular U.S.			Popular, Inc.
Beginning balance NPLs	$	1,788		$	12,060		$	13,848		$	1,788		$	12,060		$	13,848

Ending balance NPLs	$	1,788		$	12,060		$	13,848		$	1,788		$	12,060		$	13,848


There was no activity in the construction NPLs, during the first and second quarter of 2019.

Mortgage loans held-in-portfolio:
	Quarter ended 30-Jun-19									Quarter ended 31-Mar-19
(In thousands)	BPPR			Popular U.S.			Popular, Inc.			BPPR			Popular U.S.			Popular, Inc.
Beginning balance NPLs	$	317,850		$	9,808		$	327,658		$	323,565		$	11,033		$	334,598
Plus:
New non-performing loans		50,205			1,828			52,033			47,228			1,820			49,048
Advances on existing non-performing loans		—			10			10			—			72			72
Less:
Non-performing loans transferred to OREO		(6,905	)		(169	)		(7,074	)		(3,155	)		(124	)		(3,279	)
Non-performing loans charged-off		(6,362	)		(342	)		(6,704	)		(5,734	)		(197	)		(5,931	)
Loans returned to accrual status / loan collections		(45,742	)		(1,785	)		(47,527	)		(44,054	)		(2,796	)		(46,850	)

Ending balance NPLs	$	309,046		$	9,350		$	318,396		$	317,850		$	9,808		$	327,658


Total non-performing loans held-in-portfolio (excluding consumer):

	Quarter ended 30-Jun-19									Quarter ended 31-Mar-19
(In thousands)	BPPR			Popular U.S.			Popular, Inc.			BPPR			Popular U.S.			Popular, Inc.
Beginning balance NPLs	$	485,931		$	27,312		$	513,243		$	508,303		$	26,796		$	535,099
Plus:
New non-performing loans		52,414			6,190			58,604			57,782			4,250			62,032
Advances on existing non-performing loans		—			11			11			—			79			79
Less:
Non-performing loans transferred to OREO		(8,654	)		(169	)		(8,823	)		(4,117	)		(124	)		(4,241	)
Non-performing loans charged-off		(9,293	)		(1,022	)		(10,315	)		(23,652	)		(247	)		(23,899	)
Loans returned to accrual status / loan collections		(60,425	)		(2,234	)		(62,659	)		(52,385	)		(3,442	)		(55,827	)

Ending balance NPLs ^[1]	$	459,973		$	30,088		$	490,061		$	485,931		$	27,312		$	513,243

[1]	Includes $2.5 million of NPLs related to the legacy portfolio as of June 30, 2019 (March 31, 2019 - $2.6 million).

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios

(Unaudited)


	Quarter ended			Quarter ended			Quarter ended
	30-Jun-19			31-Mar-19			30-Jun-18
(Dollars in thousands)	Total			Total			Non-covered loans			Covered loans			Total
Balance at beginning of period	$	550,628		$	569,348		$	606,968		$	33,610		$	640,578
Provision for loan losses		40,191			41,825			60,054			—			60,054

		590,819			611,173			667,022			33,610			700,632

Net loans charged-off (recovered):
BPPR
Commercial		184			16,594			7,960			—			7,960
Construction		(54	)		(17	)		(301	)		—			(301	)
Lease financing		1,630			1,486			1,157			—			1,157
Mortgage		8,713			11,183			11,575			—			11,575
Consumer		26,694			24,983			24,074			—			24,074

Total BPPR		37,167			54,229			44,465			—			44,465

Popular U.S.
Commercial		5,791			2,834			10,132			—			10,132
Construction		—			(8	)		—			—			—
Legacy [1]		(277	)		(715	)		(277	)		—			(277	)
Mortgage		230			229			18			—			18
Consumer		4,242			3,976			3,276			—			3,276

Total Popular U.S.		9,986			6,316			13,149			—			13,149

Total loans charged-off - Popular, Inc.		47,153			60,545			57,614			—			57,614

Allowance transferred from covered to non-covered loans		—			—			33,610			(33,610	)		—

Balance at end of period	$	543,666		$	550,628		$	643,018		$	—		$	643,018

POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio		0.71	%		0.92	%		0.95	%					0.95	%
Provision for loan losses to net charge-offs		85.24	%		69.08	%		104.24	%					104.24	%
BPPR
Annualized net charge-offs to average loans held-in-portfolio		0.75	%		1.09	%		1.01	%					1.01	%
Provision for loan losses to net charge-offs		77.96	%		58.00	%		99.87	%					99.87	%
Popular U.S.
Annualized net charge-offs to average loans held-in-portfolio		0.59	%		0.38	%								0.81	%
Provision for loan losses to net charge-offs		112.32	%		164.20	%								119.01	%

[1]	The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the Popular U.S. segment.

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED

(Unaudited)


30-Jun-19
(Dollars in thousands)	Commercial			Construction			Legacy [1]			Mortgage			Lease financing			Consumer			Total
Specific ALLL	$	31,698		$	90		$	—		$	43,550		$	234		$	24,455		$	100,027
Impaired loans	$	390,271		$	13,848		$	—		$	530,650		$	865		$	108,851		$	1,044,485
Specific ALLL to impaired loans		8.12	%		0.65	%		—	%		8.21	%		27.05	%		22.47	%		9.58	%

General ALLL	$	193,831		$	9,793		$	774		$	88,966		$	6,673		$	143,602		$	443,639
Loans held-in-portfolio, excluding impaired loans	$	11,826,332		$	811,571		$	23,893		$	6,668,309		$	990,681		$	5,640,474		$	25,961,260
General ALLL to loans held-in-portfolio, excluding impaired loans		1.64	%		1.21	%		3.24	%		1.33	%		0.67	%		2.55	%		1.71	%

Total ALLL	$	225,529		$	9,883		$	774		$	132,516		$	6,907		$	168,057		$	543,666
Total loans held-in-portfolio	$	12,216,603		$	825,419		$	23,893		$	7,198,959		$	991,546		$	5,749,325		$	27,005,745
ALLL to loans held-in-portfolio		1.85	%		1.20	%		3.24	%		1.84	%		0.70	%		2.92	%		2.01	%

[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the Popular U.S. reportable segment.

31-Mar-19
(Dollars in thousands)	Commercial			Construction			Legacy [1]			Mortgage			Lease financing			Consumer			Total
Specific ALLL	$	33,476		$	19		$	—		$	43,139		$	321		$	25,003		$	101,958
Impaired loans	$	383,494		$	13,848		$	—		$	524,803		$	1,018		$	110,874		$	1,034,037
Specific ALLL to impaired loans		8.73	%		0.14	%		—	%		8.22	%		31.53	%		22.55	%		9.86	%

General ALLL	$	191,013		$	7,477		$	829		$	99,159		$	8,788		$	141,404		$	448,670
Loans held-in-portfolio, excluding impaired loans	$	11,674,816		$	777,472		$	24,404		$	6,682,377		$	962,214		$	5,492,388		$	25,613,671
General ALLL to loans held-in-portfolio, excluding impaired loans		1.64	%		0.96	%		3.40	%		1.48	%		0.91	%		2.57	%		1.75	%

Total ALLL	$	224,489		$	7,496		$	829		$	142,298		$	9,109		$	166,407		$	550,628
Total loans held-in-portfolio	$	12,058,310		$	791,320		$	24,404		$	7,207,180		$	963,232		$	5,603,262		$	26,647,708
ALLL to loans held-in-portfolio		1.86	%		0.95	%		3.40	%		1.97	%		0.95	%		2.97	%		2.07	%

[1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the Popular U.S. reportable segment.

Variance
(Dollars in thousands)	Commercial			Construction			Legacy			Mortgage			Lease financing			Consumer			Total
Specific ALLL	$	(1,778	)	$	71		$	—		$	411		$	(87	)	$	(548	)	$	(1,931	)
Impaired loans	$	6,777		$	—		$	—		$	5,847		$	(153	)	$	(2,023	)	$	10,448

General ALLL	$	2,818		$	2,316		$	(55	)	$	(10,193	)	$	(2,115	)	$	2,198		$	(5,031	)
Loans held-in-portfolio, excluding impaired loans	$	151,516		$	34,099		$	(511	)	$	(14,068	)	$	28,467		$	148,086		$	347,589

Total ALLL	$	1,040		$	2,387		$	(55	)	$	(9,782	)	$	(2,202	)	$	1,650		$	(6,962	)
Total loans held-in-portfolio	$	158,293		$	34,099		$	(511	)	$	(8,221	)	$	28,314		$	146,063		$	358,037

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS

(Unaudited)


30-Jun-19
Puerto Rico
(In thousands)	Commercial			Construction		Mortgage			Lease financing			Consumer			Total
Allowance for credit losses:
Specific ALLL	$	31,698		$	90	$	41,158		$	234		$	22,592		$	95,772
General ALLL		158,529			2,906		86,772			6,673			125,539			380,419

Total ALLL	$	190,227		$	2,996	$	127,930		$	6,907		$	148,131		$	476,191

Loans held-in-portfolio:
Impaired loans	$	386,310		$	1,788	$	521,257		$	865		$	98,901		$	1,009,121
Loans held-in-portfolio, excluding impaired loans		6,953,539			107,170		5,781,701			990,681			5,199,449			19,032,540

Total loans held-in-portfolio	$	7,339,849		$	108,958	$	6,302,958		$	991,546		$	5,298,350		$	20,041,661


31-Mar-19
Puerto Rico
(In thousands)	Commercial			Construction		Mortgage			Lease financing			Consumer			Total
Allowance for credit losses:
Specific ALLL	$	33,253		$	19	$	40,779		$	321		$	23,350		$	97,722
General ALLL		155,678			803		97,077			8,788			124,315			386,661

Total ALLL	$	188,931		$	822	$	137,856		$	9,109		$	147,665		$	484,383

Loans held-in-portfolio:
Impaired	$	381,803		$	1,788	$	515,365		$	1,018		$	101,887		$	1,001,861
Loans held-in-portfolio, excluding impaired loans		7,009,319			89,584		5,860,223			962,214			5,073,149			18,994,489

Total loans held-in-portfolio	$	7,391,122		$	91,372	$	6,375,588		$	963,232		$	5,175,036		$	19,996,350


Variance
(In thousands)	Commercial			Construction		Mortgage			Lease financing			Consumer			Total
Allowance for credit losses:
Specific ALLL	$	(1,555	)	$	71	$	379		$	(87	)	$	(758	)	$	(1,950	)
General ALLL		2,851			2,103		(10,305	)		(2,115	)		1,224			(6,242	)

Total ALLL	$	1,296		$	2,174	$	(9,926	)	$	(2,202	)	$	466		$	(8,192	)

Loans held-in-portfolio:
Impaired	$	4,507		$	—	$	5,892		$	(153	)	$	(2,986	)	$	7,260
Loans held-in-portfolio, excluding impaired loans		(55,780	)		17,586		(78,522	)		28,467			126,300			38,051

Total loans held-in-portfolio	$	(51,273	)	$	17,586	$	(72,630	)	$	28,314		$	123,314		$	45,311

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - POPULAR U.S. OPERATIONS

(Unaudited)


30-Jun-19
Popular U.S.
(In thousands)	Commercial			Construction		Legacy			Mortgage			Consumer		Total
Allowance for credit losses:
Specific ALLL	$	—		$	—	$	—		$	2,392		$	1,863	$	4,255
General ALLL		35,302			6,887		774			2,194			18,063		63,220

Total ALLL	$	35,302		$	6,887	$	774		$	4,586		$	19,926	$	67,475

Loans held-in-portfolio:
Impaired loans	$	3,961		$	12,060	$	—		$	9,393		$	9,950	$	35,364
Loans held-in-portfolio, excluding impaired loans		4,872,793			704,401		23,893			886,608			441,025		6,928,720

Total loans held-in-portfolio	$	4,876,754		$	716,461	$	23,893		$	896,001		$	450,975	$	6,964,084


31-Mar-19
Popular U.S.
(In thousands)	Commercial			Construction		Legacy			Mortgage			Consumer		Total
Allowance for credit losses:
Specific ALLL	$	223		$	—	$	—		$	2,360		$	1,653	$	4,236
General ALLL		35,335			6,674		829			2,082			17,089		62,009

Total ALLL	$	35,558		$	6,674	$	829		$	4,442		$	18,742	$	66,245

Loans held-in-portfolio:
Impaired loans	$	1,691		$	12,060	$	—		$	9,438		$	8,987	$	32,176
Loans held-in-portfolio, excluding impaired loans		4,665,497			687,888		24,404			822,154			419,239		6,619,182

Total loans held-in-portfolio	$	4,667,188		$	699,948	$	24,404		$	831,592		$	428,226	$	6,651,358


Variance
(In thousands)	Commercial			Construction		Legacy			Mortgage			Consumer		Total
Allowance for credit losses:
Specific ALLL	$	(223	)	$	—	$	—		$	32		$	210	$	19
General ALLL		(33	)		213		(55	)		112			974		1,211

Total ALLL	$	(256	)	$	213	$	(55	)	$	144		$	1,184	$	1,230

Loans held-in-portfolio:
Impaired loans	$	2,270		$	—	$	—		$	(45	)	$	963	$	3,188
Loans held-in-portfolio, excluding impaired loans		207,296			16,513		(511	)		64,454			21,786		309,538

Total loans held-in-portfolio	$	209,566		$	16,513	$	(511	)	$	64,409		$	22,749	$	312,726

Popular, Inc.

Financial Supplement to Second Quarter 2019 Earnings Release

Table N - Reconciliation to GAAP Financial Measures

(Unaudited)


(In thousands, except share or per share information)	30-Jun-19			31-Mar-19			30-Jun-18
Total stockholders’ equity	$	5,719,834		$	5,440,060		$	5,289,661
Less: Preferred stock		(50,160	)		(50,160	)		(50,160	)
Less: Goodwill		(671,122	)		(671,122	)		(627,294	)
Less: Other intangibles		(23,878	)		(24,521	)		(31,023	)

Total tangible common equity	$	4,974,674		$	4,694,257		$	4,581,184

Total assets	$	50,617,221		$	48,680,607		$	47,535,177
Less: Goodwill		(671,122	)		(671,122	)		(627,294	)
Less: Other intangibles		(23,878	)		(24,521	)		(31,023	)

Total tangible assets	$	49,922,221		$	47,984,964		$	46,876,860

Tangible common equity to tangible assets		9.96	%		9.78	%		9.77	%
Common shares outstanding at end of period		96,703,351			96,629,891			102,296,440
Tangible book value per common share	$	51.44		$	48.58		$	44.78

CONTACT:

Popular, Inc.

Investor Relations:

Paul Cardillo, 212-417-6721

Senior Vice President, Investor Relations Officer

Media Relations:

Teruca Rullán, 787-281-5170 or 917-679-3596 (mobile)

Senior Vice President, Corporate Communications