8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 28, 2020

POPULAR, INC.

(Exact name of registrant as specified in its charter)

Puerto Rico	001-34084	66-0667416
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification Number)

209 Muñoz Rivera Avenue Hato Rey, Puerto Rico	00918
(Address of principal executive offices)	(Zip code)

(787) 765-9800

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($0.01 par value)	BPOP	The NASDAQ Stock Market
6.70% Cumulative Monthly Income Trust Preferred Securities	BPOPN	The NASDAQ Stock Market
6.125% Cumulative Monthly Income Trust Preferred Securities	BPOPM	The NASDAQ Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02. Results of Operations and Financial Condition.

On January 28, 2020, Popular, Inc. (the “Corporation”) issued a press release announcing its unaudited financial results for the quarter ended December 31, 2019, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished pursuant to this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any of the Corporation’s filings under the Securities Act of 1933, as amended, unless otherwise expressly stated in such filing.

Item 7.01. Regulation FD Disclosure.

The Corporation is furnishing information regarding its conference call to discuss its financial results for the quarter ended December 31, 2019. A copy of the presentation to be used by the Corporation on the conference call is attached hereto as Exhibit 99.2.

The information furnished pursuant to this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any of the Corporation’s filings under the Securities Act of 1933, as amended, unless otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits.

Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended.

99.1	Press Release dated January 28, 2020 – Fourth Quarter 2019 Financial Results.
99.2	Popular, Inc. Conference Call Presentation – Fourth Quarter 2019 Financial Results.
101	Pursuant to Rule 406 of Regulation S-T, the cover page is formatted in Inline XBRL (Inline eXtensible Business Reporting Language).
104	Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	POPULAR, INC. (Registrant)
Date: January 28, 2020	By:	/s/ Jorge J. García
		Jorge J. García
		Senior Vice President and Corporate Comptroller

EX-99.1

Exhibit 99.1

Popular, Inc. Announces Fourth Quarter 2019 Financial Results

• Net income of $166.8 million in Q4 2019, compared to net income of $165.3 million in Q3 2019.

• Net income of $671.1 million for the year 2019, compared to net income and adjusted net income for the year 2018 of $618.2 million and $487.3 million, respectively.

• Net interest margin of 3.83% in Q4 2019, compared to 4.00% in Q3 2019.

• Credit Quality:

• Non-performing loans held-in-portfolio (“NPLs”) decreased by $30.0 million from Q3 2019; NPLs to loans ratio at 1.9% vs. 2.1% in Q3 2019;

• Net charge-offs (“NCOs”) increased by $14.0 million from Q3 2019; NCOs at 1.21% of average loans held-in-portfolio vs. 1.01% in Q3 2019;

• Allowance for loan losses to loans held-in-portfolio at 1.74% vs. 1.90% in Q3 2019; and

• Allowance for loan losses to NPLs at 90.5% vs. 91.9% in Q3 2019.

• Common Equity Tier 1 ratio of 17.78%, Common Equity per Share of $62.42 and Tangible Book Value per Share of $55.10 at December 31, 2019.

SAN JUAN, Puerto Rico — (BUSINESS WIRE) — Popular, Inc. (the “Corporation,” “Popular,” “we,” “us,” “our”) (NASDAQ:BPOP) reported net income of $166.8 million for the quarter ended December 31, 2019, compared to net income of $165.3 million for the quarter ended September 30, 2019.

Ignacio Alvarez, President and Chief Executive Officer, said: “2019 was an outstanding year during which we achieved record core earnings. During the year, we increased EPS and TBV by 14% and 17%, respectively, and grew our customer base in Puerto Rico by 45,000, reflecting the strength of our franchise.

While we exhibited strong performance throughout the year, the results for the fourth quarter reflected the cumulative impact of the three recent interest rate cuts. The reduction in rates negatively impacted our net interest income and margin for the quarter. However, the fundamentals of our business remained solid with fee income demonstrating continued strength and achieving loan growth in both Puerto Rico and the U.S. We continue to pursue opportunities for expense management and operational efficiencies as we implement additional investments in our people, technology and businesses to position the institution for strong and sustainable long-term results.

We are proud of our accomplishments during 2019 and optimistic about our prospects for 2020. Yet, we are deeply saddened by the seismic events that have impacted the southern part of the island this month, including a magnitude 6.4 earthquake on January 7^th. The damage is mainly concentrated in sixteen municipalities in the southern region. Fortunately, none of our employees suffered physical harm and our facilities are in sound condition. We resumed operations on the day following the earthquake and have provided uninterrupted service since then. While the impact on our operations was limited, many residents in the south suffered significant damages to their homes, public schools remain closed and the ensuing aftershocks have made it difficult for people in the region to regain a sense of normalcy.

As we have done in the past, we swiftly responded through our foundation, which has close ties with non-profit organizations and communities in the south, to bring immediate assistance to affected areas. A little more than two years ago Puerto Rico faced, and managed through, Hurricane Maria, an island-wide disaster with different and widespread challenges. Although the scale of these events is not comparable to Maria, we remain attentive to the impact it could have in some sectors of the economy, such as hospitality. The people of Puerto Rico are demonstrating overwhelming solidarity and support and are facing this situation with the resolve to move forward. We will continue working with them, confident that Puerto Rico will once again demonstrate its spirit and its ability to rebuild.”

Significant Events

Common Stock Repurchase Plan

On December 12, 2019, the Corporation completed its previously announced $250 million accelerated share repurchase transaction (“ASR”) with respect to its common stock, a component of its 2019 capital plan. In connection therewith, the Corporation received an initial delivery of 3,500,000 shares of common stock during the first quarter of 2019 and received 1,165,607 additional shares of common stock on December 12, 2019. The final number of shares delivered at settlement was based on the average daily volume weighted average price of its common stock, net of a discount, during the term of the ASR, which amounted to $53.58. The Corporation accounted for the ASR as a treasury stock transaction.

Planned Capital Actions for 2020

On January 9, 2020, the Corporation announced the following actions as part of its capital plan for 2020: (i) an increase in the Corporation’s quarterly common stock dividend from $0.30 per share to $0.40 per share, commencing with the dividend payable in the second quarter of 2020, subject to the approval of the Corporation’s Board of Directors; and (ii) common stock repurchases of up to $500 million.

Redemption of Series B Preferred Stock

On January 24, 2020, the Corporation announced that on February 24, 2020, the Corporation will redeem all outstanding shares of its 8.25% Non-Cumulative Monthly Income Preferred Stock, Series B (“Series B Preferred Stock”). The Series B Preferred Stock will be redeemed at the redemption price of $25.00 per share, plus $0.1375 in accrued and unpaid dividends on each share, for a total payment per share in the amount of $25.1375.

Earnings Highlights

(Unaudited)	Quarters ended						Years ended
(Dollars in thousands, except per share information)	31-Dec-19		30-Sep-19		31-Dec-18		31-Dec-19		31-Dec-18
Net interest income	$	467,424	$	476,991	$	476,225	$	1,891,694	$	1,734,877
Provision for loan losses		47,224		36,539		42,568		165,779		226,342
Provision for loan losses - covered loans [1]		—		—		—		—		1,730
Net interest income after provision for loan losses		420,200		440,452		433,657		1,725,915		1,506,805
FDIC loss-share income		—		—		—		—		94,725
Other non-interest income		152,415		142,712		153,167		569,883		557,769
Operating expenses		390,572		376,475		396,455		1,477,482		1,421,562
Income before income tax		182,043		206,689		190,369		818,316		737,737
Income tax expense		15,258		41,370		83,966		147,181		119,579
Net income	$	166,785	$	165,319	$	106,403	$	671,135	$	618,158
Net income applicable to common stock	$	165,854	$	164,389	$	105,472	$	667,412	$	614,435
Net income per common share - basic	$	1.72	$	1.71	$	1.06	$	6.89	$	6.07
Net income per common share - diluted	$	1.72	$	1.70	$	1.05	$	6.88	$	6.06

[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 December 31, 2019 was $467.4 million, compared to $477.0 million for the previous quarter. Net interest margin was 3.83% for the quarter, compared to 4.00% in the previous quarter.

The decrease of $9.6 million in net interest income is mostly related to the decrease in interest rates that occurred during the third and fourth quarters of 2019, resulting in a quarter-over-quarter reduction of approximately 50 basis points in average Fed Funds and U.S. Treasury Bill rates. These decreases in rates, in combination with the composition of earning assets, are the main drivers of the 17 basis point reduction in net interest margin during the quarter. Average earning assets increased $1.0 billion quarter over quarter mainly in overnight money market investments. These investments, even though accretive to net interest income, have a lower yield when compared to the rest of the earning assets therefore impacting negatively the net interest margin. The most significant variances in the quarter were:

• Lower income from money market, trading and investments by $6.6 million due to lower yields by 21 basis points mainly related to short-term investments in U.S. Treasury bills and overnight funds at the Federal Reserve. The decrease in yield was partially offset by a higher volume of earning assets; and

• lower interest income from the commercial loan portfolio by $5.1 million or a 22 basis points decrease in yield, resulting from lower market rates in the adjustable rate portfolio and originations in a declining interest rate environment.

Partially offset by:

• Lower interest expense on deposits driven by a 5 basis point reduction in interest costs, partially offset by a higher average balance in P.R. public sector and commercial deposits at Banco Popular de Puerto Rico (“BPPR”) and digital channel deposits at Popular Bank (“Popular U.S.” or “PB”).

BPPR’s net interest income amounted to $402.9 million for the quarter ended December 31, 2019, compared to $412.2 million in the previous quarter. Net interest margin for the fourth quarter of 2019 was 4.08%, a decrease of 18 basis points when compared to 4.26% for the previous quarter. The decrease in net interest margin was impacted by a higher average volume of money market investments, which carry a lower yield, a decrease in the yield of the investment portfolio, commercial and consumer loan portfolios resulting from lower market rates, as mentioned above, and a reduction of $1.0 million in the discount amortization of the auto loan portfolio acquired from Wells Fargo in 2018. BPPR’s earning assets yielded 4.62%, compared to 4.83% in the previous quarter, while the cost of interest-bearing deposits was 0.73%, or 4 basis points lower than the 0.77% reported in the previous quarter. Total cost of deposits for the quarter was 0.57%, compared to 0.60% reported in the third quarter of 2019.

Net interest income for PB was $73.6 million, for the quarter ended December 31, 2019, compared to $74.4 million during the previous quarter. The decrease of $0.8 million in net interest income was primarily due to a lower yield on loans, mainly variable rate commercial loans, partially offset by a lower cost of deposits mainly driven by a change in the deposit mix. Net interest margin for the quarter was 3.18%, a reduction of 11 basis points when compared to 3.29% for the previous quarter. Earning assets yielded 4.42%, compared to 4.60% in the previous quarter, while the cost of interest-bearing deposits was 1.55%, compared to 1.63% in the previous quarter. Total cost of deposits for the quarter was 1.34% compared to 1.40% reported in the third quarter.

Non-interest income

Non-interest income increased by $9.7 million to $152.4 million for the quarter ended December 31, 2019, compared to $142.7 million for the quarter ended September 30, 2019. The increase in non-interest income was primarily driven by:

• Higher other services by $4.3 million, mainly at the BPPR segment, due to higher insurance fees by $3.0 million principally resulting from $4.2 million in contingent insurance commissions recognized during the fourth quarter and higher debit and credit card fees by $1.0 million as a result of higher interchange fees due to higher transactional volumes;

• higher income from mortgage banking activities by $3.0 million mainly due to the lower unfavorable fair value adjustments on mortgage servicing rights (“MSRs”) by $3.3 million due to lower estimated prepayments, partially offset by a decrease in projected late fee income; and

• a favorable variance in adjustments to indemnity reserves on previously sold loans of $4.7 million mainly due to lower provision related to loans previously sold with credit recourse.

These variances were partially offset by:

• Lower other operating income by $2.8 million principally due to lower net earnings from the combined portfolio of investments under the equity method by $1.7 million and lower modification fees received for the successful completion of loss mitigation alternatives by $1.5 million.

Refer to Table B for further details.

Operating expenses

Operating expenses for the fourth quarter of 2019 totaled $390.6 million, an increase of $14.1 million when compared to the third quarter of 2019. The increase in operating expenses was driven primarily by:

• Higher personnel cost by $10.6 million due to higher commissions and annual incentives and an increase in headcount;

• higher professional fees by $4.6 million, mainly due to higher advisory expenses by $3.5 million related to Corporate initiatives, and higher audit and tax services by $1.2 million mainly related to work on new accounting pronouncements;

• higher business promotion by $4.8 million due to higher advertising expense by $1.7 million, which includes seasonal initiatives, an increase of $0.9 million in donations and higher customer reward program expense by $0.6 million;

• higher credit and debit card processing volume, interchange and other expenses by $1.0 million; and

• higher FDIC insurance expense by $2.2 million, mainly due to the small bank assessment credit received at Popular Bank during the third quarter of 2019.

These increases were partially offset by:

• Lower other operating expenses by $9.5 million due to lower operational losses by $5.9 million, including legal contingency reserves and a $2.6 million loss related to an undeveloped corporate site which was placed for sale during the third quarter of 2019.

Full-time equivalent employees were 8,560 as of December 31, 2019, compared to 8,457 as of September 30, 2019.

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

Income taxes

For the quarter ended December 31, 2019, the Corporation recorded an income tax expense of $15.3 million, compared to $41.4 million for the previous quarter. During the fourth quarter of 2019, the Corporation recorded a tax benefit of approximately $18 million related to the revision of the amount of exempt income earned in prior years, that resulted in the amendment of income tax returns for BPPR for the years 2015 to 2017. During the third quarter of 2019 a tax benefit of $4.1 million was recorded related to revisions to the amount of exempt income for the current year. The effective tax rate (“ETR”) for the fourth quarter of 2019 was 8%. Excluding the exempt income adjustment discussed above, the ETR for the quarter would have been 18%.

The ETR of the Corporation is impacted by the composition and source of its taxable income. For the year 2020, the Corporation expects its consolidated effective tax rate to be within a range of 19% to 21%.

Credit Quality

During the fourth quarter of 2019, the Corporation’s credit quality metrics continued to show favorable trends. The credit metrics of our BPPR operations reflected lower non-performing loans, lower NPL inflows and stable NCOs. The U.S. operations net charge-offs increase was related to the taxi medallion portfolio. The Corporation continues to be attentive to the performance of its portfolios and related credit metrics. The following presents credit quality results for the fourth quarter of 2019:

• Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $22.9 million quarter-over-quarter, as the prior quarter included the impact of $24.6 million of certain troubled debt restructured commercial real estate loans at BPPR.

• Total non-performing loans held-in-portfolio decreased by $30.0 million from the third quarter of 2019. The BPPR segment NPLs decreased by $21.6 million with reductions in the commercial and mortgage NPLs of $19.1 million and $12.3 million, respectively. This reduction was in part offset by higher consumer NPLs by $9.1 million, mostly related to auto loans. The PB segment NPLs decreased by $8.4 million mostly due to a construction loan sold during the quarter. At December 31, 2019, the ratio of NPLs to total loans held-in-portfolio was 1.9% compared to 2.1% in the third quarter of 2019.

• NCOs increased by $14.0 million from the third quarter of 2019, primarily driven by higher PB commercial NCOs of $15.5 million, mostly related to the taxi medallion loan portfolio which had a carrying value of $19.1 million at December 31, 2019. The BPPR NCOs remained stable quarter-over-quarter. The Corporation’s ratio of annualized net charge-offs to average loans held-in-portfolio was 1.21%, compared to 1.01% in the third 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 $34.7 million from the third quarter of 2019 to $477.7 million. The BPPR segment ALLL decreased by $18.1 million, principally driven by lower reserves for the commercial portfolio, in part offset by higher reserves for the auto loans portfolio. PB’s ALLL decreased by $16.5 million driven by taxi medallion portfolio charge-offs.

• The general and specific reserves totaled $392.5 million and $85.2 million, respectively, at quarter-end, compared with $416.5 million and $95.8 million, respectively, as of September 30, 2019. The ratio of the allowance for loan losses to loans held-in-portfolio was 1.74% in the fourth quarter of 2019, compared to 1.90% in the previous quarter. The ratio of the allowance for loan losses to NPLs held-in-portfolio stood at 90.5% compared to 91.9% in the previous quarter.

• The provision for loan losses for the fourth quarter of 2019 increased by $10.7 million from the prior quarter. The provision for the BPPR and PB segments increased by $6.4 million and $4.3 million, respectively. The provision to net charge-offs ratio was 57.7% in the fourth quarter of 2019, compared to 53.9% in the previous quarter.

Non-Performing Assets

(Unaudited)
(In thousands)	31-Dec-19			30-Sep-19			31-Dec-18
Total non-performing loans held-in-portfolio	$	527,841		$	557,792		$	611,087
Other real estate owned (“OREO”)		122,072			117,928			136,705
Total non-performing assets	$	649,913		$	675,720		$	747,792
Net charge-offs for the quarter	$	81,881		$	67,840		$	106,938
Ratios:
Loans held-in-portfolio	$	27,406,873		$	27,007,975		$	26,507,889
Non-performing loans held-in-portfolio to loans held-in-portfolio		1.93	%		2.07	%		2.31	%
Allowance for loan losses to loans held-in-portfolio		1.74			1.90			2.15
Allowance for loan losses to non-performing loans, excluding loans held-for-sale		90.50			91.86			93.17

Refer to Table H for additional information.

Provision for Loan Losses

(Unaudited)	Quarters ended							Years ended
(In thousands)	31-Dec-19		30-Sep-19		31-Dec-18			31-Dec-19		31-Dec-18
Provision for loan losses:
BPPR	$	40,843	$	34,479	$	43,461		$	135,751	$	196,461
Popular U.S.		6,381		2,060		(893	)		30,028		29,881
Total provision for loan losses - non-covered loans	$	47,224	$	36,539	$	42,568		$	165,779	$	226,342
Provision for loan losses - covered loans		—		—		—			—		1,730
Total provision for loan losses	$	47,224	$	36,539	$	42,568		$	165,779	$	228,072

Credit Quality by Segment

(Unaudited)
(In thousands)	Quarters ended
BPPR	31-Dec-19			30-Sep-19			31-Dec-18
Provision for loan losses	$	40,843		$	34,479		$	43,461
Net charge-offs		58,962			59,900			96,479
Total non-performing loans held-in-portfolio		499,200			520,773			568,098
Allowance / loans held-in-portfolio		2.14	%		2.26	%		2.55	%
	Quarters ended
Popular U.S.	31-Dec-19			30-Sep-19			31-Dec-18
Provision for loan losses	$	6,381		$	2,060		$	(893	)
Net charge-offs		22,919			7,940			10,459
Total non-performing loans held-in-portfolio		28,641			37,019			42,989
Allowance / loans held-in-portfolio		0.62	%		0.87	%		0.94	%

Preliminary impact estimate of the adoption of the current expected credit loss model (“CECL”)

CECL became effective on January 1, 2020. Based on its preliminary analysis and the information currently available, the Corporation has estimated an increase in its allowance for loan and lease losses ranging from $320 million to $350 million, or 67% to 73%. This increase is driven by the Puerto Rico mortgage, auto and credit cards loans portfolio. This increase will be reflected as a decrease to the opening balance of retained earnings, net of income taxes, except for approximately $14 million related to loans currently accounted under the Accounting Standards Codification (“ASC”) Subtopic 310-30, which would result in a reclassification between balance sheet accounts. Based on the Corporation’s preliminary estimates, the day-one impact of the adoption of CECL would result in a reduction in Tangible Book Value of approximately $2, or 4%.

As part of the adoption of CECL, the Corporation has made the election to break the existing pools of purchased credit impaired (“PCI”) loans previously accounted for under the ASC Subtopic 310-30 guidance. These loans will be accounted for on an individual loan basis under the purchased credit deteriorated loans (“PCD”) accounting methodology under CECL. Following existing accounting guidance, PCI loans have been excluded from non-performing status. Upon transition to the individual loan measurement, these loans will no longer be excluded from non-performing status, resulting in an increase of $283 million in reported NPLs during the first quarter of 2020. This increase includes $156 million in loans currently over 90 days past due and $127 million in loans that are not delinquent in their payment terms but would be reported as non-performing due to other credit quality considerations.

The Corporation expects to continue to be well capitalized under the Basel III regulatory framework after the adoption of CECL. The Corporation will avail itself of the option to phase in over a period of three years the day-one effects on regulatory capital arising from the adoption of CECL. Considering the phase-in period provided by the regulatory framework, the estimated decrease of the Common Equity Tier One and Total Capital ratios would be of approximately 25bps.

Financial Condition Highlights

(Unaudited)
(In thousands)	31-Dec-19		30-Sep-19		31-Dec-18
Cash and money market investments	$	3,650,597	$	5,670,645	$	4,565,083
Investment securities		17,946,343		16,773,578		13,595,130
Loans		27,406,873		27,007,975		26,507,889
Total assets		52,115,324		52,480,415		47,604,577
Deposits		43,758,606		44,166,195		39,710,039
Borrowings		1,294,986		1,379,767		1,537,673
Total liabilities		46,098,545		46,571,967		42,169,520
Stockholders’ equity		6,016,779		5,908,448		5,435,057

Total assets decreased by $0.4 billion from the third quarter of 2019, driven by:

• A decrease of $2.0 billion in cash and money market investments, mainly due to purchases of U.S. Treasury securities.

Partially offset by:

• An increase of $1.2 billion in debt securities available-for-sale mainly due to purchases of U.S. Treasury securities, partially offset by maturities and paydowns of mortgage-backed securities; and

• an increase of $0.4 billion in loans held-in-portfolio due to growth of commercial loans, auto loans and leases, and credit cards at the BPPR segment as a result of the acquisition detailed below, coupled with an increase at PB across its commercial, construction and mortgage loan portfolios.

Total liabilities decreased by $0.5 billion from the third quarter of 2019, mainly due to:

• A decrease of $0.4 billion in deposits, mainly from the Puerto Rico public sector at BPPR; and

• A decrease of $0.1 billion in notes payable due to maturities of Federal Home Loan Bank advances at PB.

Stockholders’ equity increased by approximately $108.3 million from the third quarter of 2019, principally due to net income for the quarter of $166.8 million, partially offset by lower unrealized gains on debt securities available-for-sale by $16.9 million, the pension and postretirement benefit plan adjustment of $13.7 million and declared dividends of $29.0 million on common stock and $0.9 million in dividends on preferred stock.

Common equity tier-1 ratio (“CET1”), common equity per share and tangible book value per share were 17.78%, $62.42 and $55.10, respectively, at December 31, 2019, compared to 17.46%, $60.57 and $53.41 at September 30, 2019. Refer to Table A for capital ratios.

Acquisition of credit cards portfolio

On December 31, 2019, BPPR acquired, in an all cash transaction, a credit card portfolio with an aggregate principal amount of $74 million for approximately $78 million. Additionally, BPPR has acquired the rights to issue the JetBlue co-branded loyalty credit card program in Puerto Rico. BPPR plans on launching the new credit card product during the second half of 2020. The acquired credit card portfolio will continue to be serviced by the seller on an interim basis until the system conversion is completed.

Refer to Table C for the Statements of Financial Condition.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation those about Popular’s business, financial condition, results of operations, plans, objectives and future performance. These statements are not guarantees of future performance, are based on management’s current expectations and, by their nature, involve risks, uncertainties, estimates and assumptions. Potential factors, some of which are beyond the Corporation’s control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. Risks and uncertainties include without limitation the effect of competitive and economic factors, and our reaction to those factors, the adequacy of the allowance for loan losses, delinquency trends, market risk and the impact of interest rate changes, capital market conditions, capital adequacy and liquidity, the effect of legal 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 quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, and in our Form 10-K for the year ended December 31, 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 in Puerto Rico 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 Tuesday, January 28, 2020 at 10:00 a.m. Eastern Time. The call will be open to the public and broadcasted live over the Internet and can be accessed through the Investor Relations section of the Corporation’s website: www.popular.com.

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

A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Friday, February 28, 2020. The replay dial-in is: 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10137877.

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

Popular, Inc.

Financial Supplement to Fourth Quarter 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

Table P - Adjusted Net Income for the Quarter and Year Ended December 31, 2018 (Non-GAAP)

POPULAR, INC.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table A - Selected Ratios and Other Information

(Unaudited)

	Quarters ended									Years ended
	31-Dec-19			30-Sep-19			31-Dec-18			31-Dec-19			31-Dec-18
Basic EPS	$	1.72		$	1.71		$	1.06		$	6.89		$	6.07
Diluted EPS	$	1.72		$	1.70		$	1.05		$	6.88		$	6.06
Average common shares outstanding		96,183,126			96,357,117			99,933,184			96,848,835			101,142,258
Average common shares outstanding - assuming dilution		96,330,785			96,478,327			100,114,358			96,997,800			101,308,643
Common shares outstanding at end of period		95,589,629			96,714,664			99,942,845			95,589,629			99,942,845
Market value per common share	$	58.75		$	54.08		$	47.22		$	58.75		$	47.22
Market capitalization - (In millions)	$	5,616		$	5,230		$	4,719		$	5,616		$	4,719
Return on average assets		1.27	%		1.29	%		0.88	%		1.33	%		1.33	%
Return on average common equity		11.27	%		11.44	%		7.57	%		11.78	%		11.39	%
Net interest margin		3.83	%		4.00	%		4.25	%		4.03	%		4.01	%
Common equity per share	$	62.42		$	60.57		$	53.88		$	62.42		$	53.88
Tangible common book value per common share (non-GAAP) [1]	$	55.10		$	53.41		$	46.90		$	55.10		$	46.90
Tangible common equity to tangible assets (non-GAAP) [1]		10.24	%		9.97	%		9.99	%		10.24	%		9.99	%
Average return on tangible common equity [1]		12.79	%		13.00	%		8.70	%		13.43	%		13.03	%
Tier 1 capital		17.78	%		17.46	%		16.90	%		17.78	%		16.90	%
Total capital		20.34	%		20.05	%		19.54	%		20.34	%		19.54	%
Tier 1 leverage		10.05	%		9.87	%		9.88	%		10.05	%		9.88	%
Common Equity Tier 1 capital		17.78	%		17.46	%		16.90	%		17.78	%		16.90	%

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

POPULAR, INC.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table B - Consolidated Statement of Operations

(Unaudited)

	Quarters ended					Variance			Quarter ended			Variance			Years ended
						Q4 2019						Q4 2019
(In thousands, except per share information)	31-Dec-19		30-Sep-19			vs. Q3 2019			31-Dec-18			vs. Q4 2018			31-Dec-19			31-Dec-18
Interest income:
Loans	$	447,736	$	453,315		$	(5,579	)	$	455,238		$	(7,502	)	$	1,802,968		$	1,645,736
Money market investments		18,950		19,119			(169	)		25,030			(6,080	)		89,823			111,288
Investment securities		93,183		99,542			(6,359	)		79,287			13,896			368,002			264,824
Total interest income		559,869		571,976			(12,107	)		559,555			314			2,260,793			2,021,848
Interest expense:
Deposits		76,823		78,760			(1,937	)		65,215			11,608			304,858			204,265
Short-term borrowings		1,272		1,572			(300	)		1,823			(551	)		6,100			7,210
Long-term debt		14,350		14,653			(303	)		16,292			(1,942	)		58,141			75,496
Total interest expense		92,445		94,985			(2,540	)		83,330			9,115			369,099			286,971
Net interest income		467,424		476,991			(9,567	)		476,225			(8,801	)		1,891,694			1,734,877
Provision for loan losses - non-covered loans		47,224		36,539			10,685			42,568			4,656			165,779			226,342
Provision for loan losses - covered loans		—		—			—			—			—			—			1,730
Net interest income after provision for loan losses		420,200		440,452			(20,252	)		433,657			(13,457	)		1,725,915			1,506,805
Service charges on deposit accounts		41,656		40,969			687			38,973			2,683			160,933			150,677
Other service fees		75,559		71,309			4,250			70,226			5,333			285,206			258,020
Mortgage banking activities		13,448		10,492			2,956			19,394			(5,946	)		32,093			52,802
Net loss on sale of debt securities		—		(20	)		20			—			—			(20	)		—
Net gain (loss), including impairment, on equity securities		332		213			119			(2,039	)		2,371			2,506			(2,081	)
Net profit (loss) on trading account debt securities		17		295			(278	)		91			(74	)		994			(208	)
Net gain on sale of loans, including valuation adjustments on loans held-for-sale		—		—			—			33			(33	)		—			33
Adjustments (expense) to indemnity reserves on loans sold		1,321		(3,411	)		4,732			(6,477	)		7,798			(343	)		(12,959	)
FDIC loss-share income		—		—			—			—			—			—			94,725
Other operating income		20,082		22,865			(2,783	)		32,966			(12,884	)		88,514			111,485
Total non-interest income		152,415		142,712			9,703			153,167			(752	)		569,883			652,494
Operating expenses:
Personnel costs
Salaries		91,161		90,016			1,145			86,569			4,592			351,788			326,509
Commissions, incentives and other bonuses		27,007		22,360			4,647			23,315			3,692			97,764			90,000
Pension, postretirement and medical insurance		11,281		10,356			925			11,698			(417	)		41,804			39,660
Other personnel costs, including payroll taxes		28,878		24,950			3,928			51,465			(22,587	)		99,269			106,819
Total personnel costs		158,327		147,682			10,645			173,047			(14,720	)		590,625			562,988
Net occupancy expenses		24,908		24,595			313			24,500			408			96,339			88,329
Equipment expenses		21,591		21,596			(5	)		18,504			3,087			84,215			71,788
Other taxes		13,386		14,028			(642	)		12,583			803			51,653			46,284
Professional fees
Collections, appraisals and other credit related fees		3,704		4,131			(427	)		4,043			(339	)		16,300			14,700
Programming, processing and other technology services		63,029		63,092			(63	)		55,089			7,940			247,332			216,128
Legal fees, excluding collections		2,527		2,415			112			4,118			(1,591	)		12,877			19,072
Other professional fees		33,876		28,923			4,953			25,846			8,030			107,902			99,944
Total professional fees		103,136		98,561			4,575			89,096			14,040			384,411			349,844
Communications		5,765		5,881			(116	)		5,765			—			23,450			23,107
Business promotion		23,214		18,365			4,849			21,653			1,561			75,372			65,918
FDIC deposit insurance		5,172		2,923			2,249			5,223			(51	)		18,179			27,757
Loss on early extinguishment of debt		—		—			—			12,522			(12,522	)		—			12,522
Other real estate owned (OREO) expense (recovery)		569		(185	)		754			2,310			(1,741	)		4,298			23,338
Credit and debit card processing, volume, interchange and other expenses		10,486		9,450			1,036			4,790			5,696			38,059			27,979
Other operating expenses
Operational losses		2,916		8,832			(5,916	)		9,103			(6,187	)		21,414			35,798
All other		18,814		22,348			(3,534	)		15,006			3,808			80,097			76,584
Total other operating expenses		21,730		31,180			(9,450	)		24,109			(2,379	)		101,511			112,382
Amortization of intangibles		2,288		2,399			(111	)		2,353			(65	)		9,370			9,326
Total operating expenses		390,572		376,475			14,097			396,455			(5,883	)		1,477,482			1,421,562
Income before income tax		182,043		206,689			(24,646	)		190,369			(8,326	)		818,316			737,737
Income tax expense		15,258		41,370			(26,112	)		83,966			(68,708	)		147,181			119,579
Net income	$	166,785	$	165,319		$	1,466		$	106,403		$	60,382		$	671,135		$	618,158
Net income applicable to common stock	$	165,854	$	164,389		$	1,465		$	105,472		$	60,382		$	667,412		$	614,435
Net income per common share - basic	$	1.72	$	1.71		$	0.01		$	1.06		$	0.66		$	6.89		$	6.07
Net income per common share - diluted	$	1.72	$	1.70		$	0.02		$	1.05		$	0.67		$	6.88		$	6.06
Dividends Declared per Common Share	$	0.30	$	0.30		$	—		$	0.25		$	0.05		$	1.20		$	1.00

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table C - Consolidated Statement of Financial Condition

(Unaudited)

										Variance
										Q4 2019 vs.
(In thousands)	31-Dec-19			30-Sep-19			31-Dec-18			Q3 2019
Assets:
Cash and due from banks	$	388,311		$	502,060		$	394,035		$	(113,749	)
Money market investments		3,262,286			5,168,585			4,171,048			(1,906,299	)
Trading account debt securities, at fair value		40,321			36,303			37,787			4,018
Debt securities available-for-sale, at fair value		17,648,473			16,479,110			13,300,184			1,169,363
Debt securities held-to-maturity, at amortized cost		97,662			97,707			101,575			(45	)
Equity securities		159,887			160,458			155,584			(571	)
Loans held-for-sale, at lower of cost or fair value		59,203			56,370			51,422			2,833
Loans held-in-portfolio		27,587,856			27,181,241			26,663,713			406,615
Less: Unearned income		180,983			173,266			155,824			7,717
Allowance for loan losses		477,708			512,365			569,348			(34,657	)
Total loans held-in-portfolio, net		26,929,165			26,495,610			25,938,541			433,555
Premises and equipment, net		556,650			547,063			569,808			9,587
Other real estate		122,072			117,928			136,705			4,144
Accrued income receivable		180,871			164,778			166,022			16,093
Mortgage servicing assets, at fair value		150,906			150,652			169,777			254
Other assets		1,819,615			1,811,190			1,714,134			8,425
Goodwill		671,122			671,122			671,122			—
Other intangible assets		28,780			21,479			26,833			7,301
Total assets	$	52,115,324		$	52,480,415		$	47,604,577		$	(365,091	)
Liabilities and Stockholders’ Equity:
Liabilities:
Deposits:
Non-interest bearing	$	9,160,173		$	8,771,970		$	9,149,036		$	388,203
Interest bearing		34,598,433			35,394,225			30,561,003			(795,792	)
Total deposits		43,758,606			44,166,195			39,710,039			(407,589	)
Assets sold under agreements to repurchase		193,378			213,097			281,529			(19,719	)
Other short-term borrowings		—			—			42			—
Notes payable		1,101,608			1,166,670			1,256,102			(65,062	)
Other liabilities		1,044,953			1,026,005			921,808			18,948
Total liabilities		46,098,545			46,571,967			42,169,520			(473,422	)
Stockholders’ equity:
Preferred stock		50,160			50,160			50,160			—
Common stock		1,044			1,044			1,043			—
Surplus		4,447,412			4,317,556			4,365,606			129,856
Retained earnings		2,147,915			2,071,198			1,651,731			76,717
Treasury stock		(459,814	)		(392,630	)		(205,509	)		(67,184	)
Accumulated other comprehensive loss, net of tax		(169,938	)		(138,880	)		(427,974	)		(31,058	)
Total stockholders’ equity		6,016,779			5,908,448			5,435,057			108,331
Total liabilities and stockholders’ equity	$	52,115,324		$	52,480,415		$	47,604,577		$	(365,091	)

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

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

(Unaudited)

	Quarters ended																								Variance
	31-Dec-19								30-Sep-19								31-Dec-18								Q4 2019 vs. Q3 2019									Q4 2019 vs. Q4 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	$	21,465		$	112.1		2.08	%	$	20,617		$	118.7		2.29	%	$	18,278		$	104.3		2.27	%	$	848		($	6.6	)		(0.21	)%	$	3,187		$	7.8			(0.19	)%
Loans not covered under loss sharing agreements with the FDIC:
Commercial		12,276			173.9		5.62			12,167			179.0		5.84			11,967			182.1		6.04			109			(5.1	)		(0.22	)		309			(8.2	)		(0.42	)
Construction		781			12.3		6.27			809			13.3		6.50			905			15.2		6.65			(28	)		(1.0	)		(0.23	)		(124	)		(2.9	)		(0.38	)
Mortgage		7,109			90.9		5.11			7,127			91.2		5.12			7,149			90.1		5.04			(18	)		(0.3	)		(0.01	)		(40	)		0.8			0.07
Consumer		2,942			86.2		11.62			2,918			86.5		11.76			2,815			85.0		11.98			24			(0.3	)		(0.14	)		127			1.2			(0.36	)
Auto		2,935			68.7		9.28			2,867			68.2		9.44			2,588			69.2		10.60			68			0.5			(0.16	)		347			(0.5	)		(1.32	)
Lease financing		1,038			15.7		6.06			1,004			15.1		6.03			913			13.6		5.97			34			0.6			0.03			125			2.1			0.09
Total loans		27,081			447.7		6.57			26,892			453.3		6.70			26,337			455.2		6.87			189			(5.6	)		(0.13	)		744			(7.5	)		(0.30	)
Total interest earning assets	$	48,546		$	559.8		4.59	%	$	47,509		$	572.0		4.79	%	$	44,615		$	559.5		4.99	%	$	1,037			(12.2	)		(0.20	)%	$	3,931		$	0.3			(0.40	)%
Allowance for loan losses		(515	)							(532	)							(621	)							17									106
Other non-interest earning assets		3,943								3,964								3,925								(21	)								18
Total average assets	$	51,974							$	50,941							$	47,919							$	1,033								$	4,055
Liabilities and Stockholders’ Equity:
Interest bearing deposits:
NOW and money market	$	16,312		$	36.0		0.88	%	$	15,958		$	37.7		0.94	%	$	13,848		$	30.4		0.87	%	$	354		$	(1.7	)		(0.06	)%	$	2,464		$	5.6			0.01	%
Savings		10,830			13.3		0.49			10,241			11.8		0.46			9,728			9.9		0.40			589			1.5			0.03			1,102			3.4			0.09
Time deposits		7,749			27.5		1.41			7,829			29.3		1.48			7,419			24.9		1.33			(80	)		(1.8	)		(0.07	)		330			2.6			0.08
Total interest-bearing deposits		34,891			76.8		0.87			34,028			78.8		0.92			30,995			65.2		0.83			863			(2.0	)		(0.05	)		3,896			11.6			0.04
Borrowings		1,345			15.6		4.65			1,440			16.2		4.51			1,658			18.1		4.38			(95	)		(0.6	)		0.14			(313	)		(2.5	)		0.27
Total interest-bearing liabilities		36,236			92.4		1.01			35,468			95.0		1.06			32,653			83.3		1.01			768			(2.6	)		(0.05	)		3,583			9.1			—
Net interest spread							3.58	%							3.73	%							3.98	%								(0.15	)%								(0.40	)%
Non-interest bearing deposits		8,894								8,794								8,895								100									(1	)
Other liabilities		957								926								799								31									158
Stockholders’ equity		5,887								5,753								5,572								134									315
Total average liabilities and stockholders’ equity	$	51,974							$	50,941							$	47,919							$	1,033								$	4,055
Net interest income / margin non-taxable equivalent basis				$	467.4		3.83	%				$	477.0		4.00	%				$	476.2		4.25	%				($	9.6	)		(0.17	)%				($	8.8	)		(0.42	)%

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

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

(Unaudited)

	Years ended
	31-Dec-19								31-Dec-18								Variance
	Average			Income /		Yield /			Average			Income /		Yield /			Average			Income /			Yield /
($ amounts in millions; yields not on a taxable  equivalent basis)	balance			Expense		Rate			balance			Expense		Rate			balance			Expense			Rate
Assets:
Interest earning assets:
Money market, trading and investment securities	$	20,138		$	457.8		2.27	%	$	18,212		$	376.1		2.07	%	$	1,926		$	81.7			0.20	%
Loans not covered under loss-sharing agreements with the FDIC:
Commercial		12,172			712.9		5.86			11,698			686.4		5.87			474			26.5			(0.01	)
Construction		801			52.8		6.59			915			58.3		6.37			(114	)		(5.5	)		0.22
Mortgage		7,121			364.4		5.12			7,119			360.4		5.06			2			4.0			0.06
Consumer		2,885			340.8		11.81			2,847			327.9		11.52			38			12.9			0.29
Auto		2,839			272.2		9.59			1,617			160.9		9.95			1,222			111.3			(0.36	)
Lease financing		989			59.9		6.06			867			51.9		5.98			122			8.0			0.08
Total loans		26,807			1,803.0		6.73			25,063			1,645.8		6.57			1,744			157.2			0.16
Total interest earning assets	$	46,945		$	2,260.8		4.82	%	$	43,275		$	2,021.9		4.67	%	$	3,670		$	238.9			0.15	%
Allowance for loan losses		(544	)							(635	)							91
Other non-interest earning assets		3,940								3,999								(59	)
Total average assets	$	50,341							$	46,639							$	3,702
Liabilities and Stockholders’ Equity:
Interest bearing deposits:
NOW and money market	$	15,326		$	146.7		0.96	%	$	12,688		$	80.7		0.64	%	$	2,638		$	66.0			0.32	%
Savings		10,249			45.5		0.44			9,439			31.9		0.34			810			13.6			0.10
Time deposits		7,770			112.7		1.45			7,570			91.7		1.21			200			21.0			0.24
Total interest-bearing deposits		33,345			304.9		0.91			29,697			204.3		0.69			3,648			100.6			0.22
Borrowings		1,425			64.2		4.51			1,879			82.7		4.40			(454	)		(18.5	)		0.11
Total interest-bearing liabilities		34,770			369.1		1.06			31,576			287.0		0.91			3,194			82.1			0.15
Net interest spread							3.76	%							3.76	%								—	%
Non-interest bearing deposits		8,873								8,790								83
Other liabilities		984								831								153
Stockholders’ equity		5,714								5,442								272
Total average liabilities and stockholders’ equity	$	50,341							$	46,639							$	3,702
Net interest income / margin non-taxable equivalent basis				$	1,891.7		4.03	%				$	1,734.9		4.01	%				$	156.8			0.02	%

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table F - Mortgage Banking Activities and Other Service Fees

(Unaudited)

Mortgage Banking Activities

	Quarters ended									Variance						Years ended						Variance
(In thousands)	31-Dec-19			30-Sep-19			31-Dec-18			Q4 2019 vs.Q3 2019			Q4 2019 vs.Q4 2018			31-Dec-19			31-Dec-18			2019 vs. 2018
Mortgage servicing fees, net of fair value adjustments:
Mortgage servicing fees	$	11,552		$	11,797		$	12,327		$	(245	)	$	(775	)	$	46,952		$	49,532		$	(2,580	)
Mortgage servicing rights fair value adjustments		(1,577	)		(4,842	)		4,646			3,265			(6,223	)		(27,430	)		(8,477	)		(18,953	)
Total mortgage servicing fees, net of fair value adjustments		9,975			6,955			16,973			3,020			(6,998	)		19,522			41,055			(21,533	)
Net gain on sale of loans, including valuation on loans held-for-sale		4,164			5,421			2,893			(1,257	)		1,271			18,817			9,424			9,393
Trading account (loss) profit:
Unrealized gains (losses) on outstanding derivative positions		—			227			(122	)		(227	)		122			—			(253	)		253
Realized (losses) gains on closed derivative positions		(691	)		(2,111	)		(350	)		1,420			(341	)		(6,246	)		2,576			(8,822	)
Total trading account (loss) profit		(691	)		(1,884	)		(472	)		1,193			(219	)		(6,246	)		2,323			(8,569	)
Total mortgage banking activities	$	13,448		$	10,492		$	19,394		$	2,956		$	(5,946	)	$	32,093		$	52,802		$	(20,709	)

Other Service Fees

	Quarters ended						Variance						Years ended				Variance
(In thousands)	31-Dec-19		30-Sep-19		31-Dec-18		Q4 2019 vs.Q3 2019			Q4 2019 vs.Q4 2018			31-Dec-19		31-Dec-18		2019 vs. 2018
Other service fees:
Debit card fees	$	12,219	$	11,719	$	11,868	$	500		$	351		$	47,142	$	46,174	$	968
Insurance fees		17,574		14,608		14,362		2,966			3,212			62,226		54,030		8,196
Credit card fees		26,155		25,625		23,827		530			2,328			98,860		89,693		9,167
Sale and administration of investment products		6,367		5,714		5,824		653			543			23,072		21,895		1,177
Trust fees		5,263		5,193		4,677		70			586			20,694		19,880		814
Other fees		7,981		8,450		9,668		(469	)		(1,687	)		33,212		26,348		6,864
Total other service fees	$	75,559	$	71,309	$	70,226	$	4,250		$	5,333		$	285,206	$	258,020	$	27,186

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table G - Loans and Deposits

(Unaudited)

Loans - Ending Balances

							Variance
(In thousands)	31-Dec-19		30-Sep-19		31-Dec-18		Q4 2019 vs.Q3 2019			Q4 2019 vs.Q4 2018
Loans held-in-portfolio:
Commercial	$	12,312,751	$	12,208,449	$	12,043,019	$	104,302		$	269,732
Construction		831,092		754,056		779,449		77,036			51,643
Legacy [1]		22,105		23,192		25,949		(1,087	)		(3,844	)
Lease financing		1,059,507		1,022,484		934,773		37,023			124,734
Mortgage		7,183,532		7,168,619		7,235,258		14,913			(51,726	)
Auto		2,917,522		2,847,758		2,608,785		69,764			308,737
Consumer		3,080,364		2,983,417		2,880,656		96,947			199,708
Total loans held-in-portfolio	$	27,406,873	$	27,007,975	$	26,507,889	$	398,898		$	898,984
Loans held-for-sale:
Mortgage		59,203		56,370		51,422		2,833			7,781
Total loans held-for-sale	$	59,203	$	56,370	$	51,422	$	2,833		$	7,781
Total loans	$	27,466,076	$	27,064,345	$	26,559,311	$	401,731		$	906,765

[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)	31-Dec-19		30-Sep-19		31-Dec-18		Q4 2019 vs. Q3 2019			Q4 2019 vs.Q4 2018
Demand deposits [1]	$	16,566,145	$	19,191,657	$	16,077,023	$	(2,625,512	)	$	489,122
Savings, NOW and money market deposits (non-brokered)		19,169,899		16,778,332		15,616,247		2,391,567			3,553,652
Savings, NOW and money market deposits (brokered)		347,765		400,049		400,004		(52,284	)		(52,239	)
Time deposits (non-brokered)		7,546,621		7,614,393		7,500,544		(67,772	)		46,077
Time deposits (brokered CDs)		128,176		181,764		116,221		(53,588	)		11,955
Total deposits	$	43,758,606	$	44,166,195	$	39,710,039	$	(407,589	)	$	4,048,567

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

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table H - Non-Performing Assets

(Unaudited)

																			Variance
(Dollars in thousands)	31-Dec-19			As a % of loans HIP by category			30-Sep-19			As a % of loans HIP by category			31-Dec-18			As a % of loans HIP by category			Q4 2019 vs. Q3 2019			Q4 2019 vs. Q4 2018
Non-accrual loans:
Commercial	$	150,760			1.2	%	$	169,697			1.4	%	$	184,026			1.5	%	$	(18,937	)	$	(33,266	)
Construction		145			—			10,334			1.4			13,848			1.8			(10,189	)		(13,703	)
Legacy [1]		1,999			9.0			2,318			10.0			2,627			10.1			(319	)		(628	)
Lease financing		3,657			0.3			2,733			0.3			3,313			0.4			924			344
Mortgage		294,799			4.1			305,542			4.3			334,598			4.6			(10,743	)		(39,799	)
Auto		31,148			1.1			22,954			0.8			24,050			0.9			8,194			7,098
Consumer		45,333			1.5			44,214			1.5			48,625			1.7			1,119			(3,292	)
Total non-performing loans held-in-portfolio		527,841			1.9	%		557,792			2.1	%		611,087			2.3	%		(29,951	)		(83,246	)
Other real estate owned (“OREO”)		122,072						117,928						136,705						4,144			(14,633	)
Total non-performing assets [2]	$	649,913					$	675,720					$	747,792					$	(25,807	)	$	(97,879	)
Accruing loans past due 90 days or more [3] [4]	$	460,133					$	476,814					$	612,543					$	(16,681	)	$	(152,410	)
Ratios:
Non-performing assets to total assets		1.25	%					1.29	%					1.57	%
Non-performing loans held-in-portfolio to loans held-in-portfolio		1.93						2.07						2.31
Allowance for loan losses to loans held-in-portfolio		1.74						1.90						2.15
Allowance for loan losses to non-performing loans, excluding loans held-for-sale		90.50						91.86						93.17

[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 December 31, 2019, September 30, 2019 and December 31, 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 $103 million (September 30, 2019 - $99 million; December 31, 2018 - $134 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 $213 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of December 31, 2019 (September 30, 2019 - $241 million; December 31, 2018 - $283 million). Furthermore, the Corporation has approximately $65 million in reverse mortgage loans which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation’s policy to exclude these balances from non-performing assets (September 30, 2019 - $65 million; December 31, 2018 - $69 million).

[4] The carrying value of loans accounted for under ASC Subtopic 310-30 that are contractually 90 days or more past due was $153 million at December 31, 2019 (September 30, 2019 - $189 million; December 31, 2018 - $216 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 Fourth Quarter 2019 Earnings Release

Table I - Activity in Non-Performing Loans

(Unaudited)

Commercial loans held-in-portfolio:

	Quarter ended									Quarter ended
	31-Dec-19									30-Sep-19
(In thousands)	BPPR			Popular U.S.			Popular, Inc.			BPPR			Popular U.S.			Popular, Inc.
Beginning balance NPLs	$	166,366		$	3,331		$	169,697		$	149,139		$	6,209		$	155,348
Plus:
New non-performing loans		14,650			248			14,898			43,650			734			44,384
Advances on existing non-performing loans		—			80			80			—			—			—
Less:
Non-performing loans transferred to OREO		(4,009	)		—			(4,009	)		(972	)		—			(972	)
Non-performing loans charged-off		(10,708	)		(42	)		(10,750	)		(2,005	)		(1,302	)		(3,307	)
Loans returned to accrual status / loan collections		(14,207	)		(112	)		(14,319	)		(23,446	)		(2,310	)		(25,756	)
Non-performing loans sold		(4,837	)		—			(4,837	)		—			—			—
Ending balance NPLs	$	147,255		$	3,505		$	150,760		$	166,366		$	3,331		$	169,697

Construction loans held-in-portfolio:

	Quarter ended									Quarter ended
	31-Dec-19									30-Sep-19
(In thousands)	BPPR			Popular U.S.			Popular, Inc.			BPPR			Popular U.S.			Popular, Inc.
Beginning balance NPLs	$	274		$	10,060		$	10,334		$	1,788		$	12,060		$	13,848
Plus:
Advances on existing non-performing loans		—			—			—			—			215			215
Less:
Non-performing loans charged-off		—			—			—			—			(2,215	)		(2,215	)
Loans returned to accrual status / loan collections		(155	)		—			(155	)		(1,514	)		—			(1,514	)
Non-performing loans sold		—			(10,034	)		(10,034	)		—			—			—
Ending balance NPLs	$	119		$	26		$	145		$	274		$	10,060		$	10,334

Mortgage loans held-in-portfolio:

	Quarter ended									Quarter ended
	31-Dec-19									30-Sep-19
(In thousands)	BPPR			Popular U.S.			Popular, Inc.			BPPR			Popular U.S.			Popular, Inc.
Beginning balance NPLs	$	296,025		$	9,517		$	305,542		$	309,046		$	9,350		$	318,396
Plus:
New non-performing loans		55,379			4,923			60,302			50,260			3,306			53,566
Advances on existing non-performing loans		—			39			39			—			37			37
Less:
Non-performing loans transferred to OREO		(7,988	)		(111	)		(8,099	)		(6,741	)		(197	)		(6,938	)
Non-performing loans charged-off		(4,800	)		—			(4,800	)		(8,733	)		—			(8,733	)
Loans returned to accrual status / loan collections		(54,908	)		(3,277	)		(58,185	)		(47,807	)		(2,979	)		(50,786	)
Ending balance NPLs	$	283,708		$	11,091		$	294,799		$	296,025		$	9,517		$	305,542

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

	Quarter ended									Quarter ended
	31-Dec-19									30-Sep-19
(In thousands)	BPPR			Popular U.S.			Popular, Inc.			BPPR			Popular U.S.			Popular, Inc.
Beginning balance NPLs	$	462,665		$	25,226		$	487,891		$	459,973		$	30,088		$	490,061
Plus:
New non-performing loans		70,029			5,171			75,200			93,910			4,040			97,950
Advances on existing non-performing loans		—			121			121			—			290			290
Less:
Non-performing loans transferred to OREO		(11,997	)		(111	)		(12,108	)		(7,713	)		(197	)		(7,910	)
Non-performing loans charged-off		(15,508	)		(42	)		(15,550	)		(10,738	)		(3,514	)		(14,252	)
Loans returned to accrual status / loan collections		(69,270	)		(3,710	)		(72,980	)		(72,767	)		(5,481	)		(78,248	)
Non-performing loans sold		(4,837	)		(10,034	)		(14,871	)		—			—			—
Ending balance NPLs [1]	$	431,082		$	16,621		$	447,703		$	462,665		$	25,226		$	487,891

[1] Includes $2.0 million of NPLs related to the legacy portfolio as of December 31, 2019 (September 30, 2019 - $2.3 million).

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

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

(Unaudited)

	Quarter ended			Quarter ended			Quarter ended
	31-Dec-19			30-Sep-19			31-Dec-18
(Dollars in thousands)	Total			Total			Total
Balance at beginning of period	$	512,365		$	543,666		$	633,718
Provision for loan losses		47,224			36,539			42,568
		559,589			580,205			676,286
Net loans charged-off (recovered):
BPPR
Commercial		7,301			10,632			51,659
Construction		(48	)		(2,986	)		(720	)
Lease financing		2,768			3,453			1,323
Mortgage		8,770			12,689			18,041
Consumer		40,171			36,112			26,176
Total BPPR		58,962			59,900			96,479
Popular U.S.
Commercial		19,150			3,633			1,081
Construction		—			2,215			5,806
Legacy [1]		(110	)		(297	)		(739	)
Mortgage		(6	)		(18	)		(82	)
Consumer		3,885			2,407			4,393
Total Popular U.S.		22,919			7,940			10,459
Total loans charged-off - Popular, Inc.		81,881			67,840			106,938
Balance at end of period	$	477,708		$	512,365		$	569,348
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio		1.21	%		1.01	%		1.63	%
Provision for loan losses to net charge-offs		57.67	%		53.86	%		39.81	%
BPPR
Annualized net charge-offs to average loans held-in-portfolio		1.18	%		1.21	%		1.96	%
Provision for loan losses to net charge-offs		69.27	%		57.56	%		45.05	%
Popular U.S.
Annualized net charge-offs to average loans held-in-portfolio		1.29	%		0.45	%		0.63	%
Provision for loan losses to net charge-offs		27.84	%		25.94	%		(8.54	)%

[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.

	Year ended			Year ended
(Dollars in thousands)	31-Dec-19			31-Dec-18
	Total			Non-covered loans			Covered loans			Total
Balance at beginning of period	$	569,348		$	590,182		$	33,244		$	623,426
Provision for loan losses		165,779			226,342			1,730			228,072
		735,127			816,524			34,974			851,498
Net loans charged-off (recovered):
BPPR
Commercial		34,711			65,931			—			65,931
Construction		(3,105	)		(1,354	)		—			(1,354	)
Lease financing		9,337			6,030			—			6,030
Mortgage		41,355			64,822			1,364			66,186
Consumer		127,960			105,588			—			105,588
Total BPPR		210,258			241,017			1,364			242,381
Popular U.S.
Commercial		31,408			19,784			—			19,784
Construction		2,207			5,806			—			5,806
Legacy [1]		(1,399	)		(2,032	)		—			(2,032	)
Mortgage		435			(371	)		—			(371	)
Consumer		14,510			16,582			—			16,582
Total Popular U.S.		47,161			39,769			—			39,769
Total loans charged-off - Popular, Inc.		257,419			280,786			1,364			282,150
Balance transferred from covered to non-covered loans		—			33,610			(33,610	)		—
Balance at end of period	$	477,708		$	569,348		$	—		$	569,348
POPULAR, INC.
Annualized net charge-offs to average loans held-in-portfolio		0.96	%		1.13	%					1.13	%
Provision for loan losses to net charge-offs		64.40	%		80.61	%					80.83	%
BPPR
Annualized net charge-offs to average loans held-in-portfolio		1.06	%		1.31	%					1.31	%
Provision for loan losses to net charge-offs		64.56	%		81.51	%					81.77	%
Popular U.S.
Annualized net charge-offs to average loans held-in-portfolio		0.68	%								0.61	%
Provision for loan losses to net charge-offs		63.67	%								75.14	%

[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 Fourth Quarter 2019 Earnings Release

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

(Unaudited)

31-Dec-19
(Dollars in thousands)	Commercial			Construction			Legacy [1]			Mortgage			Lease financing			Consumer			Total
Specific ALLL	$	20,533		$	6		$	—		$	42,804		$	61		$	21,822		$	85,226
Impaired loans	$	399,549		$	119		$	—		$	531,855		$	507		$	100,791		$	1,032,821
Specific ALLL to impaired loans		5.14	%		5.04	%		—	%		8.05	%		12.03	%		21.65	%		8.25	%
General ALLL	$	126,519		$	4,772		$	630		$	78,304		$	10,707		$	171,550		$	392,482
Loans held-in-portfolio, excluding impaired loans	$	11,913,202		$	830,973		$	22,105		$	6,651,677		$	1,059,000		$	5,897,095		$	26,374,052
General ALLL to loans held-in-portfolio, excluding impaired loans		1.06	%		0.57	%		2.85	%		1.18	%		1.01	%		2.91	%		1.49	%
Total ALLL	$	147,052		$	4,778		$	630		$	121,108		$	10,768		$	193,372		$	477,708
Total loans held-in-portfolio	$	12,312,751		$	831,092		$	22,105		$	7,183,532		$	1,059,507		$	5,997,886		$	27,406,873
ALLL to loans held-in-portfolio		1.19	%		0.57	%		2.85	%		1.69	%		1.02	%		3.22	%		1.74	%

[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.

30-Sep-19
(Dollars in thousands)	Commercial			Construction			Legacy [1]			Mortgage			Lease financing			Consumer			Total
Specific ALLL	$	30,130		$	57		$	—		$	42,868		$	71		$	22,720		$	95,846
Impaired loans	$	409,221		$	10,334		$	—		$	533,317		$	624		$	105,117		$	1,058,613
Specific ALLL to impaired loans		7.36	%		0.55	%		—	%		8.04	%		11.38	%		21.61	%		9.05	%
General ALLL	$	160,591		$	8,507		$	791		$	83,759		$	7,122		$	155,749		$	416,519
Loans held-in-portfolio, excluding impaired loans	$	11,799,228		$	743,722		$	23,192		$	6,635,302		$	1,021,860		$	5,726,058		$	25,949,362
General ALLL to loans held-in-portfolio, excluding impaired loans		1.36	%		1.14	%		3.41	%		1.26	%		0.70	%		2.72	%		1.61	%
Total ALLL	$	190,721		$	8,564		$	791		$	126,627		$	7,193		$	178,469		$	512,365
Total loans held-in-portfolio	$	12,208,449		$	754,056		$	23,192		$	7,168,619		$	1,022,484		$	5,831,175		$	27,007,975
ALLL to loans held-in-portfolio		1.56	%		1.14	%		3.41	%		1.77	%		0.70	%		3.06	%		1.90	%

[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	$	(9,597	)	$	(51	)	$	—		$	(64	)	$	(10	)	$	(898	)	$	(10,620	)
Impaired loans	$	(9,672	)	$	(10,215	)	$	—		$	(1,462	)	$	(117	)	$	(4,326	)	$	(25,792	)
General ALLL	$	(34,072	)	$	(3,735	)	$	(161	)	$	(5,455	)	$	3,585		$	15,801		$	(24,037	)
Loans held-in-portfolio, excluding impaired loans	$	113,974		$	87,251		$	(1,087	)	$	16,375		$	37,140		$	171,037		$	424,690
Total ALLL	$	(43,669	)	$	(3,786	)	$	(161	)	$	(5,519	)	$	3,575		$	14,903		$	(34,657	)
Total loans held-in-portfolio	$	104,302		$	77,036		$	(1,087	)	$	14,913		$	37,023		$	166,711		$	398,898

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

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

(Unaudited)

31-Dec-19
Puerto Rico
(In thousands)	Commercial			Construction			Mortgage			Lease financing			Consumer			Total
Allowance for credit losses:
Specific ALLL	$	20,533		$	6		$	40,596		$	61		$	20,259		$	81,455
General ALLL		110,530			568			75,685			10,707			153,706			351,196
Total ALLL	$	131,063		$	574		$	116,281		$	10,768		$	173,965		$	432,651
Loans held-in-portfolio:
Impaired loans	$	397,452		$	119		$	522,469		$	507		$	91,157		$	1,011,704
Loans held-in-portfolio, excluding impaired loans		6,863,678			137,351			5,644,279			1,059,000			5,464,220			19,168,528
Total loans held-in-portfolio	$	7,261,130		$	137,470		$	6,166,748		$	1,059,507		$	5,555,377		$	20,180,232
30-Sep-19
Puerto Rico
(In thousands)	Commercial			Construction			Mortgage			Lease financing			Consumer			Total
Allowance for credit losses:
Specific ALLL	$	30,130		$	57		$	40,483		$	71		$	21,009		$	91,750
General ALLL		131,429			1,009			81,252			7,122			138,208			359,020
Total ALLL	$	161,559		$	1,066		$	121,735		$	7,193		$	159,217		$	450,770
Loans held-in-portfolio:
Impaired	$	407,124		$	274		$	523,876		$	624		$	95,356		$	1,027,254
Loans held-in-portfolio, excluding impaired loans		6,761,529			123,798			5,711,700			1,021,860			5,286,441			18,905,328
Total loans held-in-portfolio	$	7,168,653		$	124,072		$	6,235,576		$	1,022,484		$	5,381,797		$	19,932,582
Variance
(In thousands)	Commercial			Construction			Mortgage			Lease financing			Consumer			Total
Allowance for credit losses:
Specific ALLL	$	(9,597	)	$	(51	)	$	113		$	(10	)	$	(750	)	$	(10,295	)
General ALLL		(20,899	)		(441	)		(5,567	)		3,585			15,498			(7,824	)
Total ALLL	$	(30,496	)	$	(492	)	$	(5,454	)	$	3,575		$	14,748		$	(18,119	)
Loans held-in-portfolio:
Impaired	$	(9,672	)	$	(155	)	$	(1,407	)	$	(117	)	$	(4,199	)	$	(15,550	)
Loans held-in-portfolio, excluding impaired loans		102,149			13,553			(67,421	)		37,140			177,779			263,200
Total loans held-in-portfolio	$	92,477		$	13,398		$	(68,828	)	$	37,023		$	173,580		$	247,650

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

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

(Unaudited)

31-Dec-19
Popular U.S.
(In thousands)	Commercial			Construction			Legacy			Mortgage			Consumer			Total
Allowance for credit losses:
Specific ALLL	$	—		$	—		$	—		$	2,208		$	1,563		$	3,771
General ALLL		15,989			4,204			630			2,619			17,844			41,286
Total ALLL	$	15,989		$	4,204		$	630		$	4,827		$	19,407		$	45,057
Loans held-in-portfolio:
Impaired loans	$	2,097		$	—		$	—		$	9,386		$	9,634		$	21,117
Loans held-in-portfolio, excluding impaired loans		5,049,524			693,622			22,105			1,007,398			432,875			7,205,524
Total loans held-in-portfolio	$	5,051,621		$	693,622		$	22,105		$	1,016,784		$	442,509		$	7,226,641
30-Sep-19
Popular U.S.
(In thousands)	Commercial			Construction			Legacy			Mortgage			Consumer			Total
Allowance for credit losses:
Specific ALLL	$	—		$	—		$	—		$	2,385		$	1,711		$	4,096
General ALLL		29,162			7,498			791			2,507			17,541			57,499
Total ALLL	$	29,162		$	7,498		$	791		$	4,892		$	19,252		$	61,595
Loans held-in-portfolio:
Impaired loans	$	2,097		$	10,060		$	—		$	9,441		$	9,761		$	31,359
Loans held-in-portfolio, excluding impaired loans		5,037,699			619,924			23,192			923,602			439,617			7,044,034
Total loans held-in-portfolio	$	5,039,796		$	629,984		$	23,192		$	933,043		$	449,378		$	7,075,393
Variance
(In thousands)	Commercial			Construction			Legacy			Mortgage			Consumer			Total
Allowance for credit losses:
Specific ALLL	$	—		$	—		$	—		$	(177	)	$	(148	)	$	(325	)
General ALLL		(13,173	)		(3,294	)		(161	)		112			303			(16,213	)
Total ALLL	$	(13,173	)	$	(3,294	)	$	(161	)	$	(65	)	$	155		$	(16,538	)
Loans held-in-portfolio:
Impaired loans	$	—		$	(10,060	)	$	—		$	(55	)	$	(127	)	$	(10,242	)
Loans held-in-portfolio, excluding impaired loans		11,825			73,698			(1,087	)		83,796			(6,742	)		161,490
Total loans held-in-portfolio	$	11,825		$	63,638		$	(1,087	)	$	83,741		$	(6,869	)	$	151,248

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table N - Reconciliation to GAAP Financial Measures

(Unaudited)

(In thousands, except share or per share information)	31-Dec-19			30-Sep-19			31-Dec-18
Total stockholders’ equity	$	6,016,779		$	5,908,448		$	5,435,057
Less: Preferred stock		(50,160	)		(50,160	)		(50,160	)
Less: Goodwill		(671,122	)		(671,122	)		(671,122	)
Less: Other intangibles		(28,780	)		(21,479	)		(26,833	)
Total tangible common equity	$	5,266,717		$	5,165,687		$	4,686,942
Total assets	$	52,115,324		$	52,480,415		$	47,604,577
Less: Goodwill		(671,122	)		(671,122	)		(671,122	)
Less: Other intangibles		(28,780	)		(21,479	)		(26,833	)
Total tangible assets	$	51,415,422		$	51,787,814		$	46,906,622
Tangible common equity to tangible assets		10.24	%		9.97	%		9.99	%
Common shares outstanding at end of period		95,589,629			96,714,664			99,942,845
Tangible book value per common share	$	55.10		$	53.41		$	46.90
	Quarterly average
Total stockholders’ equity	$	5,887,125		$	5,753,047		$	5,574,503
Less: Preferred Stock		(50,160	)		(50,160	)		(50,160	)
Less: Goodwill		(671,121	)		(663,499	)		(684,507	)
Less: Other intangibles		(20,674	)		(22,957	)		(28,282	)
Total tangible equity	$	5,145,170		$	5,016,431		$	4,811,554
Average return on tangible common equity		12.79	%		13.00	%		8.70	%
	Year-to-date average
Total stockholders’ equity	$	5,713,517					$	5,444,152
Less: Preferred Stock		(50,160	)					(50,160	)
Less: Goodwill		(669,200	)					(646,905	)
Less: Other intangibles		(23,563	)					(31,480	)
Total tangible equity	$	4,970,594					$	4,715,607
Average return on tangible common equity		13.43	%					13.03	%

Popular, Inc.

Financial Supplement to Fourth Quarter 2019 Earnings Release

Table P - Adjusted Net Income for the Quarter and Year Ended December 31, 2018 (Non-GAAP)

(Unaudited)

	Quarter ended
	31-Dec-18
(In thousands)	Pre-tax		Income tax effect		Impact on net income
U.S. GAAP Net income					$	106,403
Non-GAAP Adjustments:
Impact of Law Act No.257[1]		—		27,686		27,686
Adjusted net income (Non-GAAP)					$	134,089

^[1]  On December 10, 2018, the Governor of Puerto Rico signed into law Act No.257 of 2018, which amended the Puerto Rico Internal Revenue Code, to among other things, reduce the Puerto Rico corporate tax rate from 39% to 37.5%. The resulting adjustments reduced the DTA related to the Corporation’s P.R. operations as a result of a lower realizable benefit at the lower tax rate.

	Year ended
	31-Dec-18
(In thousands)	Pre-tax			Income tax effect			Impact on net income
U.S. GAAP Net income							$	618,158
Non-GAAP Adjustments:
Termination of FDIC Shared-Loss Agreements[1]		(94,633	)		45,059			(49,574	)
Tax Closing Agreement[2]		—			(108,946	)		(108,946	)
Impact of Law Act No.257[3]		—			27,686			27,686
Adjusted net income (Non-GAAP)							$	487,324

^[1]  On May 22, 2018, BPPR entered into a Termination Agreement with the FDIC to terminate all Shared-Loss Agreements in connection with the acquisition of certain assets and assumptions of certain liabilities of Westernbank Puerto Rico in 2010. As a result, BPPR recognized a pre-tax gain of $94.6 million, net of the related professional and advisory fees of $8.1 million associated with the Termination Agreement.

^[2]  Represents the impact of the Termination Agreement on income taxes. In June 2012, the Corporation entered into a Tax Closing Agreement with the Puerto Rico Department of the Treasury to clarify the tax treatment related to the loans acquired in the FDIC Transaction in accordance with the provisions of the Puerto Rico Tax Code. Based on the provisions of this Tax Closing Agreement, the Corporation recognized a net income tax benefit of $108.9 million during the second quarter of 2018.

^[3]  On December 10, 2018, the Governor of Puerto Rico signed into law Act No.257 of 2018, which amended the Puerto Rico Internal Revenue Code, to among other things, reduce the Puerto Rico corporate tax rate from 39% to 37.5%. The resulting adjustments reduced the DTA related to the Corporation’s P.R. operations as a result of a lower realizable benefit at the lower tax rate.

CONTACT:

Popular, Inc.

Investor Relations:

Paul Cardillo, 212-417-6721

Senior Vice President, Investor Relations Officer

or

Media Relations:

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

Senior Vice President, Corporate Communications

EX-99.2

Investor Presentation Fourth Quarter 2019 Exhibit 99.2

This presentation contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, are based on the current expectations of Popular, Inc.’s (the “Corporation”) management 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. 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 quarters ended March 31, 2019, June 30, 2019 and September 30, 2019 and in our Form 10-K for the year ended December 31, 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 which speak as of their respective dates. Cautionary Note Regarding Forward-Looking Statements

NPLs decreased by $83 million YoY; ratio at 1.90% NCO ratio decreased to 0.96% from 1.13% the previous year Credit Metrics Net income of $671.1 million Net interest margins: Popular, Inc. 4.03%, BPPR 4.30% Earnings Robust capital; Common Equity Tier 1 Capital ratio of 17.8% Tangible book value per share of $55.10 compared to $46.90 in 2018 Capital 2019 Full Year Highlights Year Events 2019 Capital Actions: Completed a $250 million accelerated share repurchase agreement Increased quarterly dividend to $0.30 per share from $0.25 per share Planned Capital Actions for 2020: Repurchase up to $500 million in common stock Increase quarterly dividend to $0.40 per share Redemption of $28 million of 8.25% Series B preferred stock

NPLs decreased by $30 million QoQ; ratio at 1.90% NCO ratio increased to 1.21% from 1.01% the previous quarter Credit Metrics Net income of $166.8 million Net interest margins: Popular, Inc. 3.83%, BPPR 4.08% Earnings Robust capital; Common Equity Tier 1 Capital ratio of 17.8% Tangible book value per share of $55.10 compared to $53.41 in Q3 2019 Capital Q4 2019 Highlights Acquired a $74 million credit card portfolio in P.R. Organic loan growth in both P.R. and U.S. markets Taxi portfolio reduced to $19 million as a result of agreements with most of the borrowers Quarter Events

Puerto Rico – Key Indicators 1. Source: P.R. Statistics Institute based on U.S. Bureau of Transportation Statistics (data represents the net movement of passengers of domestic flights departing and arriving at the SJU International Airport); 2. Source: U.S. Bureau of Labor Statistics (Household Survey, Seasonally Adjusted); 3. Source: U.S. Bureau of Labor Statistics (Establishment Survey, Seasonally Adjusted); 4. Source: United Automobile Importers Group (based on units); 5. Source: Puerto Rico Economic Development Bank; 6. Customers who have logged on to Popular’s web and/or mobile platform in the past 30 days Net Passenger Movement1 2019 YTD (January-October): (57,000) Employment (as of December) Total employment: 1.4% lower in 2019 than in 20182 Unemployment rate: 8.4% in 2019 down from 8.5% in 20182 Private sector: 0.1% lower in 2019 than in 2018; public sector: same as 20183 New Auto Sales4 1% lower in 2019 than in 2018 27% higher than 2017 Cement Sales5 6% lower in 2019 than in 2018 31% higher than 2017 Debit and Credit Card Sales ($) Q4 2019: 2% higher than Q4 2018 2019: 2% higher than in 2018 Customers 1.8 million customers, up by 45 thousand from December 2018 Puerto Rico BPPR Digital Transformation 1.5 million customers enrolled in online banking: 189 thousand new enrollments 915 thousand active online customers6; 80% use mobile devices Captured 52% of total deposit transactions through digital channels 2018: 77,000 2017: (257,000)

Financial Summary (GAAP) 6

Capital Note: Estimated for the current period Robust capital levels; Common Equity Tier 1 of 17.8% Tangible book value per share of $55.10 compared to $53.41 in Q3 2019 Popular regulatory capital does not include: Disallowed portion of ALLL of $158 million Unrealized gain on Evertec equity stake of approximately $323 million Popular, Inc. (%)

Day-1 Impact of Current Expected Credit Losses (CECL) 3 4 5 Impact on Allowance for Loan and Lease Losses (“ALLL’’) and NPL Total ALLL as of December 31, 2019 will increase by approximately $320-$350 million or 67-73% Increase led by P.R. mortgage, auto and credit cards loan portfolios Estimated increase in NPLs of $283 million driven by the transition of purchased credit impaired loans (PCI) pools into individual loans under CECL Impact on Capital Tangible book value would have decreased by approximately $2 per share as of December 31, 2019 Impact on regulatory capital will be phased-in over 3 years CET1 and Total Capital would have decreased by approximately 25 basis points Assumptions for Estimate Portfolio balances as of December 31, 2019 Macroeconomic forecast scenarios as of December 2019 Reasonable and supportable period of 2 years 1 1 Total disallowed portion of ALLL will increase by the estimated CECL impact

Non-Performing Assets ($ in millions) Non-Performing Assets Beginning in Q2 2018 figures include loans previously classified as covered Differences due to rounding Non-Performing Loans ($ in millions) NPAs decreased by $26 million QoQ NPLs decreased by $30 million QoQ P.R. NPLs at $499 million, or 2.5% of loans, down by $22 million, driven by: Lower commercial and mortgage NPLs of $19 million and $12 million, respectively Higher consumer NPLs of $9 million, mainly auto loans U.S. NPLs at $29 million, or 0.4% of loans, down by $8 million QoQ, mainly related to the sale of a construction loan during the quarter OREOs up by $4 million

NPL Inflows Total NPL Inflows ($ in millions) Mortgage NPL Inflows ($ in millions) Commercial, Construction and Legacy NPL Inflows ($ in millions) Beginning in Q2 2018 figures include loans previously classified as covered Differences due to rounding Total NPL inflows decreased by $23 million QoQ P.R. commercial inflows decreased by $29 million QoQ P.R. mortgage inflows increased by $5M QoQ U.S. inflows remained flat QoQ

NCOs and NCO-to-Loan Ratio ($ in millions) Provision and Provision-to-NCO Ratio ($ in millions) Beginning in Q2 2018 figures include loans previously classified as covered Differences due to rounding ALLL, ALLL-to-NCO and ALLL-to-NPLs Ratios ($ in millions) Additional Credit Metrics NCO ratio at 1.21% vs. 1.01% in Q3 2019. NCOs increase of $14 million was driven by: Higher U.S. commercial NCOs of $16 million, driven by $19 million of taxi medallion charge-offs Allowance for loan and lease losses (ALLL) down by $35 million QoQ P.R. ALLL decreased by $18 million U.S. ALLL decreased by $17 million, driven by taxi medallion charge-offs ALLL-to-Loans ratio at 1.74% vs. 1.90% in Q3 2019 ALLL-to-NPLs at 91%, compared to 92% in Q3 2019 Provision at $47 million for Q4 2019, up by $11 million QoQ

Driving Shareholder Value Capital Planned Capital Actions for 2020: Repurchase up to $500 million in common stock Increase quarterly dividend to $0.40 per share Redemption of $28 million of 8.25% Series B preferred stock Tangible book value per share of $55.10 Franchise Additional Value Investments in Evertec and Banco BHD León Puerto Rico Acquisition of a $74 million credit card portfolio Uniquely poised to take advantage of economic recovery in Puerto Rico Leading market position Focus on customer service supported by broad branch network Differentiated digital offering for retail and commercial customers Diversified fee income driven by unmatched product breadth and depth Strong risk-adjusted margins driven by de-risked and well-diversified loan portfolio Substantial excess liquidity with low deposit beta   United States Mainland banking operation provides geographic diversification Branch footprint in key New York and South Florida MSAs National niche banking focus in condo association and healthcare Evolving income streams, led by private wealth management and mortgage origination

EMBRACING PUERTO RICO Join us in helping rebuild Puerto Rico by making a charitable donation. Popular has reactivated the Embracing Puerto Rico fund, initially created in the aftermath of Hurricane Maria, to provide assistance to communities in the southwestern region of Puerto Rico affected by the January 2020 seismic events. Fundación Banco Popular is strategically joining efforts with non-profit organizations, focusing on psychological services, business continuity for small businesses, emergency education services and energy resiliency for non-profit organizations in the region. Since 1979, Fundación Banco Popular, Popular’s philanthropic arm in Puerto Rico, has supported communities in Puerto Rico through more than 250 non-profit organizations. www.embracingpuertorico.com

Investor Presentation Fourth Quarter 2019 Appendix

Franchise Summary Corporate Structure Assets = $42 billion Assets = $10 billion Puerto Rico Operations United States Operations Assets = $52 billion Corporate Structure – Popular, Inc. Information as of December 31, 2019 ¹ Doing business as Popular Selected equity investments EVERTEC and Banco BHD León under Corporate segment and joint ventures under BPPR segment Transaction processing, business processes outsourcing 16.19% stake Adjusted EBITDA of $56 million for the quarter ended September 30, 2019 Dominican Republic bank 15.84% stake 2018 net income of $161 million PRLP 2011 Holdings, LLC Construction and commercial loans vehicle 24.90% stake PR Asset Portfolio 2013-1 International, LLC Construction, commercial loans and OREOs vehicle 24.90% stake Industry Financial services Headquarters San Juan, Puerto Rico Assets $52 billion (among top 50 BHCs in the U.S.) Loans $27 billion Deposits $44 billion Banking branches 164 in Puerto Rico, 51 in the U.S. (40 in New York and New Jersey and 11 in Florida) and 10 in the Virgin Islands NASDAQ ticker symbol BPOP Market Cap $6 billion Banco Popular de Puerto Rico Popular’s Insurance Subsidaries Popular North America, Inc. Popular Securities LLC Holding Companies (Including Equity Investments) Popular Bank 1 Popular Auto, LLC

2019 Financial Summary (GAAP) 16

Net Interest Margin Dynamics Q4 2019 net interest margin at 3.83% Loan yield decreased 13 basis points to 6.57% Loan portfolio increased $402 million Total deposit cost decreased 3 basis points to 70 basis points in Q4 2019 Low deposit betas in P.R. Loan Yield, Deposit Cost and NIM Total Loans and Deposits ($ in billions) Money Market and Investment Securities ($ in billions) Note: Figures represent ending balances. Yields and net interest margin figures are not tax-equivalent

Municipalities Obligations of municipalities are backed by real and personal property taxes, municipal excise taxes, and/or a percentage of the sales and use tax. Indirect exposure includes loans or securities that are payable by non-governmental entities, but which carry a government guarantee to cover any shortfall in collateral in the event of borrower default. Majority are single-family mortgage related. Indirect Exposure The Corporation does not own any loans issued by the P.R. central government or its public corporations. Our direct exposure to P.R. municipalities was $431 million, flat QoQ. P.R. Public Sector Exposure Difference due to rounding

De-Risked Loan Portfolios Differences due to rounding ($ in millions) 1 Small and Medium Enterprise 2 NCOs distribution represents the percentage allocation of net charge-offs from Q1 2008 through Q1 2019 per each loan category, excluding net charge-offs from previously covered loans up to Q2 2015. The Corporation has de-risked its loan portfolios by reducing its exposure to asset classes with historically high loss content The P.R. commercial portfolio reductions include: Commercial portfolio, including construction, has decreased from 55% of total loans held-in-portfolio to 37% Construction portfolio is down by 89% since Q4 2007 SME1 lending is down by 57% from Q4 2007 Collateralized exposure now represents a larger portion of consumer loan portfolio Unsecured loan credit quality has improved as overall FICO scores have increased

Business Segments (GAAP) ¹ Non-fully taxable equivalent Differences due to rounding

2019 Business Segments (GAAP) ¹ Non-fully taxable equivalent Differences due to rounding

Popular, Inc. Credit Ratings Our senior unsecured ratings have remained stable Moody’s B1 Stable Outlook Fitch BB Stable Outlook S&P BB- Positive Outlook February Moody’s changes outlook to stable from negative April S&P upgrades to BB- from B+ revised outlook to stable 2017 February S&P placed BPOP on credit watch negative due to the general economic environment in Puerto Rico 2015 May Moody’s, as part of a recalibration of their bank rating model, upgraded BPOP from B2 to B1 with a stable outlook July On 7/10 S&P affirmed BPOP’s rating while maintaining a negative outlook March Moody’s placed BPOP on review for possible upgrade due to a change in their bank rating methodology September Moody’s downgraded BPOP to B2; outlook negative 2016 April S&P revised outlook to positive October Fitch and S&P change outlook to negative from stable 2018 May Fitch revised outlook to stable 2019 April Moody's upgrades to B1 from B2 S&P revised outlook to positive May Fitch upgrades to BB from BB-

Investor Presentation Fourth Quarter 2019

XML

Document and Entity Information	Jan. 28, 2020
Document And Entity Information [Line Items]
Entity Registrant Name	POPULAR INC
Amendment Flag	false
Entity Central Index Key	0000763901
Document Type	8-K
Document Period End Date	Jan. 28, 2020
Entity Incorporation State Country Code	PR
Entity File Number	001-34084
Entity Tax Identification Number	66-0667416
Entity Address, Address Line One	209 Muñoz Rivera Avenue
Entity Address, City or Town	Hato Rey
Entity Address, Country	PR
Entity Address, Postal Zip Code	00918
City Area Code	(787)
Local Phone Number	765-9800
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document And Entity Information [Line Items]
Security 12b Title	Common Stock ($0.01 par value)
Trading Symbol	BPOP
Security Exchange Name	NASDAQ
M 6.70 Cumulative Monthly Income Trust Preferred Securities [Member]
Document And Entity Information [Line Items]
Security 12b Title	6.70% Cumulative Monthly Income Trust Preferred Securities
Trading Symbol	BPOPN
Security Exchange Name	NASDAQ
M 6.125 Cumulative Monthly Income Trust Preferred Securities [Member]
Document And Entity Information [Line Items]
Security 12b Title	6.125% Cumulative Monthly Income Trust Preferred Securities
Trading Symbol	BPOPM
Security Exchange Name	NASDAQ