Popular, Inc. Reports Financial Results for the Quarter and Nine Months Ended September 30, 2009

SAN JUAN, Puerto Rico, Oct. 19 /PRNewswire-FirstCall/ -- Popular, Inc. ("the Corporation") (Nasdaq: BPOP) reported a net loss of $125.0 million for the quarter ended September 30, 2009, compared with a net loss of $183.2 million for the quarter ended June 30, 2009, and a net loss of $668.5 million for the quarter ended September 30, 2008. For the nine months ended September 30, 2009, the Corporation's net loss totaled $360.7 million, compared to a net loss of $541.0 million for the same period in 2008.

Refer to the accompanying Exhibit A - Financial Summary for "per common share" information and key performance ratios. Also, refer to Exhibit B for credit quality information and to Exhibit C for summarized income statement information by reportable segment. As indicated in previous filings, in 2008, the Corporation discontinued the operations of its U.S. mainland-based subsidiary Popular Financial Holdings ("PFH"), and thus the results of PFH are presented as part of "Loss from discontinued operations, net of income tax" in Exhibit A.

"Third-quarter results still reflect the effects of a deepening recession and rising unemployment in Puerto Rico. The island's residential construction market remains stagnant with low absorption rates, requiring a high level of provisioning," said Richard L. Carrion, Chairman of the Board and Chief Executive Officer of Popular, Inc.

Carrion continued, "While some U.S. economic indicators have shown some improvement, our consumer and mortgage portfolios are still feeling the impact of job losses on the U.S. mainland. We expect these economic trends, particularly in Puerto Rico, to continue for the foreseeable future. We continue to work on improving our U.S. franchise and maintaining our dominant position in Puerto Rico for the turn of the cycle."

During the third quarter of 2009, the Corporation took steps to increase its capital position that resulted in total additions of $1.4 billion to Tier 1 common equity.

On August 25, 2009, the Corporation completed the settlement of its previously announced Exchange Offer to issue up to 390 million shares of its common stock in exchange for its Series A and Series B preferred stock and for its trust preferred securities. As part of the Exchange Offer, the Corporation issued over 357 million new shares of common stock for a total of over 639 million common shares outstanding. This Exchange Offer resulted in an increase in common stockholders' equity of $919.1 million, resulting from the exchange of Series A and Series B preferred stock and trust preferred securities into common stock. This included newly issued common stock and surplus of $608.4 million and a favorable impact to accumulated deficit of $310.7 million, including $80.3 million in gains on the extinguishment of trust preferred securities recorded in the consolidated statement of operations for the quarter ended September 30, 2009.

Also, as announced on August 10, 2009, the Corporation agreed with the U.S. Treasury to exchange all $935 million of its outstanding shares of Series C preferred stock of the Corporation for $935 million of newly issued trust preferred securities (the "New Trust Preferred Securities"). The New Trust

Preferred Securities have a distribution rate of 5% until December 5, 2013 and 9% thereafter (which is the same as the dividend rate on the previously outstanding Series C preferred stock). The transaction with the U.S. Treasury settled on August 24, 2009. The particular exchange with the U.S. Treasury resulted in a favorable impact to accumulated deficit of $485.3 million resulting from the excess of (1) the carrying amount of the securities surrendered (the Series C preferred stock) over (2) the fair value of the consideration exchanged (the New Trust Preferred Securities).

The Corporation's Tier 1 common equity to risk-weighted assets ratio increased from 2.45% as of June 30, 2009 to 6.88% as of September 30, 2009 as a result of the transactions described above. See "Reconciliation of Non-GAAP Financial Measure" for a reconciliation of Tier 1 common equity to common stockholders' equity and a discussion of our use of this non-GAAP financial measure in this press release.

The above transactions also impacted earnings per common share favorably. The following table provides a reconciliation of earnings (losses) per common share ("EPS") for the quarters ended September 30, 2009, June 30, 2009 and September 30, 2008 and for the nine-month periods ended September 30, 2009 and 2008:

                             Quarter ended                Nine months ended
                    Sept. 30,    June 30,   Sept. 30,    Sept. 30,    Sept. 30
                       2009       2009        2008         2009         2008
    (In thousands,
     except per share
     information)
    Net loss from
     continuing
     operations    ($121,561)  ($176,583)  ($211,173)   ($340,720)   ($52,761)
    Net loss from
     discontinued
     operations       (3,427)     (6,599)   (457,370)     (19,972)   (488,242)
    Preferred stock
     dividends*        5,974*    (22,915)    (11,229)     (39,857)    (20,210)
    Favorable impact
     from exchange
     of Series A
     and B preferred
     stock           230,388           -          -       230,388           -
    Favorable
     impact from
     exchange of
     Series C
     preferred
     stock           485,280           -          -       485,280           -
    Preferred
     stock
     discount
     accretion        (1,040)     (1,713)         -        (4,515)          -
    Net income
     (loss)
     applicable
     to common
     stock          $595,614   ($207,810)  ($679,772)     $310,604  ($561,213)
    Average
     common
     shares
     outstanding 425,672,578 281,888,394  281,489,469 330,325,348 280,841,638
    Average
     potential
     common
     shares                -           -            -           -           -
    Average
     common
     shares
     outstanding -
     assuming
     dilution    425,672,578 281,888,394  281,489,469  330,325,348 280,841,638
    Basic and
     diluted
     earnings
     (losses)
     per common
     share from
     continuing
     operations        $1.41     ($0.71)      ($0.79)        $1.00     ($0.27)
    Basic and
     diluted losses
     per common
     share from
     discontinued
     operations      ($0.01)     ($0.03)      ($1.63)      ($0.06)     ($1.73)
    Total basic
     and diluted
     earnings
     (losses) per
     common
     share            $1.40      ($0.74)      ($2.42)       $0.94      ($2.00)

* Amount presented for the quarter ended September 30, 2009 represents the reversal of dividends on Series C preferred stock considered accrued as of June 30, 2009 for EPS purposes only. These cumulative dividends were not paid as dividends to the Series C preferred stock holder given the terms of the exchange agreement to New Trust Preferred Securities, which was effected in August 2009.

The Corporation's continuing operations reported a net loss of $121.6 million for the quarter ended September 30, 2009, compared with a net loss of $176.6 million for the quarter ended June 30, 2009, and a net loss of $211.2 million for the quarter ended September 30, 2008. For the nine months ended September 30, 2009, the Corporation's net loss from continuing operations totaled $340.7 million, compared to a net loss of $52.8 million for the same period in 2008.

The principal items impacting the continuing operations' financial results for the quarter ended September 30, 2009, when compared to the quarter ended June 30, 2009, were as follows:

* Gains of $80.3 million on the extinguishment of debt related to the aforementioned exchange of trust preferred securities for common stock.

* Non-interest income was lower by $65.8 million when compared to the quarter ended June 30, 2009, principally as a result of lower gains on the sale of investment securities. During the third quarter of 2009, the Corporation realized $9.1 million in losses on the valuation of investment securities compared to gains of $53.7 million in the second quarter of 2009 principally associated with the sale of equity securities.

* Total operating expenses, excluding the aforementioned gain of $80.3 million on the extinguishment of debt, were $29.7 million lower in the quarter ended September 30, 2009 compared with the second quarter of 2009, mainly as a result of lower FDIC insurance assessments on deposits by $19.8 million since the second quarter of 2009 included the impact of a special assessment of approximately $16.7 million.

* The provision for loan losses for the third quarter of 2009 decreased by $18.4 million when compared with the quarter ended June 30, 2009. The lower total provision was the net result of a $28.3 million decrease in the provision related to the Puerto Rico operations because of a higher provision for specific construction loans in the second quarter of 2009, and a $9.9 million increase in the provision related to the U.S. mainland portfolios. The allowance for loan losses increased from June 30, 2009 to September 30, 2009 by $61 million. The allowance for loan losses to loans held-in-portfolio was 4.95% as of September 30, 2009, compared to 4.66% as of

June 30, 2009. Refer to Exhibit A for certain credit quality ratios and Exhibit B for other specific credit quality information.

Net Loss from Continuing Operations:

This press release should be read in conjunction with the accompanying Exhibits A, B and C which are an integral part of this report. The discussions that follow pertain to Popular, Inc.'s continuing operations, unless otherwise indicated.

Net Interest Income

Net interest income for the third quarter of 2009 was $276.4 million, compared with $283.1 million for the second quarter of 2009 and $324.3 million for the same quarter of 2008.

The following table summarizes the principal changes in average earning assets and funding sources and their corresponding yields and costs for the quarter ended September 30, 2009, compared with the quarter ended June 30, 2009 and the quarter ended September 30, 2008.

                            Average balances        Average Yields / Costs
                         3rd       2nd     3rd      3rd      2nd     3rd
                       Quarter   Quarter  Quarter  Quarter Quarter Quarter
                        2009      2009     2008     2009    2009     2008
    (Dollars in
    billions)

    Money market,
     trading and
     investment
     securities         $9.0      $9.6    $9.4     3.69%     3.72%   4.17%
    Loans:
     Commercial*        15.0      15.4    15.9      4.85      4.87    5.82
       Mortgage          4.5       4.5     4.6      6.15      6.30    6.97
       Consumer          4.3       4.4     4.8      9.75      9.91   10.24
       Lease
        financing        0.7       0.7     1.1      8.29      8.30    7.81
    Total loans         24.5      25.0    26.4      6.04      6.12    6.90
    Total
     earning
     assets            $33.5     $34.6   $35.8     5.41%     5.45%   6.19%

    Interest
     bearing
     deposits          $22.4     $22.7   $23.2     2.11%     2.27%   2.85%
    Borrowings           5.4       5.9     7.1      4.38      4.02    3.66
    Total interest
     bearing
     liabilities        27.8      28.6    30.3      2.55      2.63    3.04
    Non-interest
     bearing sources
     of funds            5.7       6.0     5.5
    Total funds        $33.5     $34.6   $35.8     2.11%     2.18%   2.57%
    Net interest
     spread                                        2.86%     2.82%   3.15%
    Net interest
     yield                                         3.30%     3.27%   3.62%

    * Includes commercial construction loans

The reduction in average earning assets for the quarter ended September 30, 2009, compared with the quarter ended June 30, 2009 was mostly due to the reduction in excess liquidity in the money market accounts as well as a decrease in the trading portfolio resulting from the sale of mortgage-backed securities during the second quarter of 2009 along with a decline in the loan portfolio in part due to the slowdown of loan origination activity, as well as a higher volume of loans charged off. Furthermore, there were reductions in the consumer loan portfolio of Banco Popular North America ("BPNA"), including E-LOAN, primarily due to the runoff mode of its home equity lines of credit and closed-end second mortgages. As a result of the decline in average earning assets, the Corporation is deleveraging its balance sheet through a reduction in borrowings, principally repurchase agreements, accompanied by a decrease in notes payable mainly due to the maturity of unsecured senior debt of Popular North America.

Net interest yield improved for the quarter ended September 30, 2009 when compared to the quarter ended June 30, 2009 mainly driven by a reduction in the Corporation's average cost of funds resulting from a reduction in the cost of deposits due to management actions to lower the rates paid on certain deposits and a lower cost on brokered certificates of deposit. The net interest yield was also favorably impacted by a decrease in interest expense of approximately $2.9 million due to the exchange of the Corporation's trust preferred securities into common stock. Offsetting this positive variance was additional interest expense during the quarter ended September 30, 2009 of approximately $6.8 million resulting from the previously mentioned New Trust Preferred Securities, which was formerly accounted for as a dividend prior to the exchange of the Series C preferred stock. Also, affecting negatively the net interest yield was the increase in funding cost of $350 million of term notes with interest rates that increased prospectively by 225 basis points as a result of the Corporation's senior debt rating downgrades by the major rating agencies in April 2009 and June 2009.

The decrease in net interest income for the third quarter of 2009, compared with the same quarter of 2008, was primarily due to lower average balances of interest-earning assets, principally loans, due to the sale of most of the lease financing portfolio and the downsizing or discontinuance of certain loan origination units in the U.S. mainland operations and the slowdown of loan origination activity due to current market conditions. The Corporation's borrowings also decreased driven by the reduction in the earning assets they fund. Contributing to the reduction in net interest income was the decrease by the Federal Reserve ("Fed") of the federal funds target rate from 2.00% in September 30, 2008 to between 0% and 0.25% as of September 30, 2009. This reduction in short-term market rates impacted the yield of several of the Corporation's earning assets during that period, including the yield on commercial and construction loans with floating or adjustable rates and floating rate collateralized mortgage obligations, as well as the yield of newly originated loans in a declining interest rate environment. On the positive side, the decrease in rates contributed to the decrease in the cost of interest-bearing deposits and short-term borrowings. Other factors impacting negatively the Corporation's net interest income for the quarter ended September 30, 2009 when compared with the same quarter in 2008 were the increase in non-performing loans with their related reversal of interest, and, as discussed above, the exchange of $935 million of Series C preferred stock for trust preferred securities and the increase in the cost of $350 million in term notes due to rating downgrades. Offsetting this negative variance was the exchange of the Corporation's trust preferred securities into common stock.

Credit Risk and Provision for Loan Losses

The Corporation's allowance for loan losses increased to $1.2 billion as of September 30, 2009, an increase of $61 million from June 30, 2009. The Corporation's allowance for loan losses represented 4.95% of loans held-in- portfolio as of September 30, 2009, compared with 4.66% as of June 30, 2009 and 2.76% as of September 30, 2008. As compared to the previous quarter, the allowance for loan losses increased during the third quarter of 2009 despite the decrease of $210 million in loans held-in-portfolio.

The increase in the allowance for loan losses from June 30, 2009 to September 30, 2009 was primarily attributable to increased reserves for commercial loans. Although commercial losses decreased during the third quarter of 2009, the commercial sector continued reporting deteriorating results, particularly in the U.S. small business segment, which reflected

higher non-performing loans and net charge-offs. The total allowance for loan losses for construction loans decreased by approximately $4.5 million from June 30, 2009 to September 30, 2009 after charging-off $95.9 million in the third quarter of 2009 and considering a portfolio reduction of $151 million. The allowance to construction loans held-in-portfolio was 18.03% as of September 30, 2009 compared with 16.91% as of June 30, 2009. The construction loan portfolio maintains the highest allowance coverage due to the continued deterioration of the economic and housing market conditions in Puerto Rico, and also in the U.S. mainland. The most significant specific reserves for impaired loans during the third quarter of 2009 pertain to particular construction borrowers. The Corporation also recorded higher reserves to cover inherent losses in the mortgage and consumer loan portfolios, mainly in the U.S. home equity lines of credit portfolios. Exhibits A and B provide credit quality data, including certain key credit quality metrics and a breakdown of the allowance for loan losses by loan type.

As of September 30, 2009, there were $1.5 billion of impaired loans with a related specific allowance for loan losses of $313 million, compared with impaired loans of $1.4 billion and a specific allowance for loan losses of $313 million as of June 30, 2009. The Corporation's specific allowance for loan losses as of September 30, 2009 remained at the same level when compared to the previous quarter after recording approximately $108.4 million in charge-offs, of which $86.7 million pertained to the construction loan portfolio, principally from the Banco Popular de Puerto Rico reportable segment. As of September 30, 2008, there were $753 million of impaired loans with a related specific allowance for loan losses of $131 million. Refer to Exhibit B for information concerning the composition of the Corporation's allowance for loan losses as of September 30, 2009 and June 30, 2009 by loan category.

The main factor driving the Corporation's net losses in 2009 has been the increasing credit costs from several segments of the loan portfolio. The sustained deterioration in the credit and economic conditions in the markets in which the Corporation operates have continued to negatively affect the Corporation's provision for loan losses in the third quarter of 2009. The provision for loan losses totaled $331.1 million or 123% of net charge-offs for the quarter ended September 30, 2009, compared with $349.4 million or 134% of net charge-offs for the quarter ended June 30, 2009, and $252.2 million or 148% of net charge-offs for the third quarter of 2008.

The decline in the provision for loan losses in the third quarter of 2009 when compared with the second quarter of 2009 was in part attributable to the Banco Popular de Puerto Rico loan portfolios, which in the previous quarter required higher specific reserves for certain impaired loans. This was partially offset by an increase in the Corporation's general reserve requirements, which accounts for the increase reported in the Corporation's total allowance for loan losses as of September 30, 2009.

Net charge offs for the quarter ended September 30, 2009 increased by $9.6 million when compared to the previous quarter. This increase in net charge-offs was mainly in construction loans ($19.4 million) and mortgage loans ($9.7 million), partially offset by decreases in net charge-offs for commercial loans ($10.8 million), consumer loans ($8.6 million) and leases ($0.2 million). The rise in construction loans net charge-offs in the third quarter of 2009 was primarily related to a partial charge-off of a particular construction borrower in the Banco Popular de Puerto Rico reportable segment. The increase in mortgage loans net charge-offs was mainly related to Puerto Rico and the U.S. mainland non-conventional mortgage business. The Corporation's net charge-off ratios for mortgages in Puerto Rico and the U.S. mainland operations for the quarter ended September 30, 2009 were 0.72% and 7.51%, respectively, compared to 0.14% and 5.85% for the quarter ended June 30, 2009. As in the U.S. mainland, the continued recessionary environment in Puerto Rico has negatively impacted property values, thus increasing the level of losses. The decrease in commercial net charge-offs was attributed to the Banco Popular de Puerto Rico portfolio, while the reduction in consumer net charge-offs was mostly related to the Banco Popular North America reportable segment. Despite the decreases in commercial and consumer loan net charge-offs for the quarter ended September 30, 2009 when compared to the second quarter

of 2009, the reserves were increased to cover inherent losses in these loan portfolios.

The increase in the provision for loan losses for the quarter ended September 30, 2009 compared to the same quarter in 2008 was the result of higher general reserve requirements for commercial loans, construction loans, U.S. mainland non-conventional residential mortgages and home equity lines of credit, combined with specific reserves recorded for loans considered impaired. Net charge-offs from the continuing operations for the quarter ended September 30, 2009, when compared with the third quarter in 2008, increased by $99.4 million, mainly in construction loans ($43.6 million), commercial loans ($22.6 million), mortgage loans ($22.5 million) and consumer loans ($11.0 million).

Non-performing assets attributable to continuing operations totaled $2.2 billion as of September 30, 2009, compared to $2.1 billion as of June 30, 2009 and $1.1 billion as of September 30, 2008. The increase in non-performing assets from June 30, 2009 to September 30, 2009 was primarily related to increases in commercial loans ($90 million), mortgage loans ($42 million), other real estate ($24 million) and consumer loans ($5 million). The increases in non-performing loans were concentrated in portfolios secured by real estate. As of September 30, 2009, non-performing loans secured by real estate amounted to $1.3 billion or 14.0% of total loans secured by real estate in the Puerto Rico operations and $572 million or 8.7%, respectively, in the U.S. mainland operations. These figures compare to $1.2 billion or 13.3% in Puerto Rico and $529 million or 7.8% in the U.S. mainland operations as of June 30, 2009. Commercial non-performing loans increased both in Puerto Rico and the U.S. mainland across all sectors as a result of weakened economic conditions. The construction portfolio did not report significant increases in non- performing loans during the third quarter of 2009 due to portfolio reduction resulting from net charge-offs and minimal new volume activity. The construction loans in non-performing status are primarily residential real estate construction loans which have been adversely impacted by general market conditions, decreases in property values and oversupply in certain areas. The higher level of non-performing residential mortgage loans was principally attributed to BPNA's non-conventional mortgage business and Puerto Rico's residential mortgage portfolio. Deteriorating economic conditions have impacted the mortgage delinquency rates and have increased pressure in home prices. Nonetheless, the Puerto Rico housing market has not experienced the level of losses affecting some regions in the U.S. mainland. In terms of reserves, the total allowance for loan losses to non-performing loans from continuing operations represented 57.07% as of September 30, 2009, which remained stable when compared to 57.94% as of June 30, 2009 after considering an increase in non-performing loans of approximately $137 million during the third quarter of 2009.

The Corporation's commercial loan portfolio secured by commercial real estate ("CRE"), excluding construction loans, amounted to $7.4 billion as of September 30, 2009, of which $3.4 billion was secured with owner occupied properties. CRE non-performing loans amounted to $474 million, or 6.45% of CRE loans as of September 30, 2009. The CRE non-performing loans ratios for the Corporation's Puerto Rico and U.S. mainland operations were 7.93% and 4.73%, respectively, as of September 30, 2009, compared with 7.58% and 3.94%, respectively, as of June 30, 2009.

Non-performing assets from continuing operations increased by $1.1 billion from September 30, 2008 to the same date in 2009. The increases were reflected in construction loans ($534 million), commercial loans ($336 million) and mortgage loans ($202 million).

Given the existing adverse economic conditions, it is likely that the Corporation will continue to experience heightened credit losses, higher levels of non-performing assets and significant levels of provision for loan losses.

Non-interest Income

Non-interest income from continuing operations totaled $160.0 million for the quarter ended September 30, 2009, compared with $225.8 million for the quarter ended June 30, 2009 and $187.9 million for the quarter ended September 30, 2008.

As previously explained, the variance in non-interest income for the quarter ended September 30, 2009 compared with the quarter ended June 30, 2009 was principally due to a decrease in the net gains on the sale and valuation adjustments of investment securities of $62.8 million due to the sale of equity securities during the second quarter of 2009 which resulted in a gain of $53.7 million for that quarter. Other factors also impacted these results, including a decrease of $9.3 million in trading account profit and a favorable variance of $4.7 million in loss on sale and valuation adjustments on loans held-for-sale.

The decrease in non-interest income for the quarter ended September 30, 2009 compared with the same quarter in 2008 was principally due to losses on the sale and valuation adjustments on loans held-for-sale for the quarter ended September 30, 2009 of $8.7 million, compared to gains of $6.5 million for the quarter ended September 30, 2008. Other non-interest income as presented in Exhibit A declined by $13.6 million mostly as a result of $21.1 million in gains on the sale of real estate properties booked in the third quarter of 2008.

Operating Expenses

Operating expenses totaled $220.6 million for the quarter ended September 30, 2009, a decrease of $110.0 million, compared with $330.6 million for the second quarter of 2009. Operating expenses for the quarter ended September 30, 2008 totaled $322.9 million.

The decrease in operating expenses for the quarter ended September 30, 2009 when compared with the second quarter of 2009 was principally due to the gain on the extinguishment of debt of $80.3 million from the aforementioned exchange of the trust preferred securities for common stock. Also contributing to this variance were lower FDIC insurance costs, which included the $16.7 million FDIC special assessment in the second quarter of 2009, and a $5.7 million decrease in personnel costs, mainly related to salaries costs.

The decrease of $102.3 million in operating expenses for the quarter ended September 30, 2009 when compared to the same quarter of the previous year was principally due to the favorable impact of the aforementioned extinguishment of debt and lower personnel costs by $17.7 million due to downsizing of the U.S. operations, partially offset by higher FDIC insurance costs.

Income Taxes

Income tax expense from continuing operations amounted to $6.3 million for the quarter ended September 30, 2009, compared with an income tax expense of $5.4 million for the quarter ended June 30, 2009 and income tax expense of $148.3 million for the quarter ended September 30, 2008.

The variance in income tax expense for the third quarter of 2009 when compared to the same quarter in 2008 was primarily due to the recognition during the third quarter of 2008 of a $189.2 million adjustment to recognize a valuation allowance on part of the deferred tax assets related to the U.S. continuing operations.

Balance Sheet Comments:

The accompanying Exhibit A provides information on principal categories of the Corporation's balance sheet as of September 30, 2009, June 30, 2009 and September 30, 2008, and the following sections provide more detailed information.

Investment securities

The Corporation's portfolio of investment securities available-for-sale and held-to-maturity totaled $7.2 billion as of September 30, 2009, compared with $7.6 billion as of June 30, 2009. The Corporation holds investment securities primarily for liquidity, yield enhancement and interest rate risk management. The portfolio primarily includes very liquid, high quality securities.

Loans

A breakdown of the Corporation's total loan portfolio at period-end, which represents the principal category of earning assets, follows:

                 September 30,  June 30,    Variance  September 30, Variance
    (In billions)   2009         2009                     2008

    Commercial      $13.1        $13.1            -       $13.9      ($0.8)
    Construction      1.9          2.0       ($0.1)         2.1       (0.2)
    Mortgage          4.6          4.7        (0.1)         4.7       (0.1)
    Consumer          4.2          4.3        (0.1)         4.8       (0.6)
    Lease financing   0.7          0.7            -         1.1       (0.4)
    Sub-total        24.5         24.8        (0.3)        26.6       (2.1)
    PFH discontinued
     operations         -            -            -         0.6       (0.6)
             Total  $24.5        $24.8       ($0.3)       $27.2      ($2.7)

The reduction in construction loans between June 30, 2009 and September 30, 2009 was principally due to the increased level of charge-offs, which was described earlier in the Provision for Loans Losses and Credit Quality section. Net charge-offs in the construction loan portfolio amounted to $95.9 million for the quarter ended September 30, 2009.

The decline in the consumer loan portfolio from the end of the second quarter of 2009 to September 30, 2009 was mainly related to run-off of existing portfolios originated by Popular Finance, E-LOAN or exited lines of businesses at the BPNA operations, as well as the reduction caused by the consumer loans net charge-offs of $76.6 million recorded during the third quarter of 2009.

The reductions in various loan categories when comparing September 30, 2009 with the same quarter of 2008 are mainly associated with the same factors described above along with the exiting or downsizing certain business lines at the Corporation's subsidiaries, primarily BPNA. The reduction in the lease financing portfolio for the quarter ended September 30, 2009 compared to the same period of the previous year was the result of loan sales by Popular Equipment Finance, a subsidiary of BPNA, principally during the first quarter of 2009. The current financial environment has required us to strengthen our underwriting standards. As a result, together with caution being exercised by customers, and our decision to exit selected businesses on the mainland United States, we have seen a reduction in the volume of loan applications, thus contributing to overall decline in our loan portfolios when comparing the current quarter with the quarter ended September 30, 2008.

    Deposits
    A breakdown of the Corporation's deposits at period-end follows:

    (In billions) September 30, June 30,    Variance   September 30,  Variance
                     2009         2009                     2008

    Demand *         $4.9         $5.1       ($0.2)        $4.7        $0.2
    Savings           9.5          9.6        (0.1)         9.9       (0.4)
    Time             12.0         12.2        (0.2)        13.3       (1.3)
      Total
      deposits      $26.4        $26.9       ($0.5)       $27.9      ($1.5)

    * Includes non-interest and interest bearing demand deposits

Brokered certificates of deposit, which are included as time deposits, amounted to $2.8 billion as of September 30, 2009 compared with $2.7 billion as of June 30, 2009 and $3.1 billion as of September 30, 2008.

The decrease in time deposits from June 30, 2009 to September 30, 2009 occurred principally in the Corporation's U.S. mainland operations in part due to deleveraging strategies, including the closure and consolidation of branches, as well as a gradual reduction in the pricing of deposits, including internet deposits. The decrease in demand deposits was principally experienced in the Corporation's Puerto Rico banking operations.

The decrease in time deposits from September 30, 2008 to the same date in 2009 was reflected in both the Corporation's U.S. mainland and Puerto Rico banking operations. This reduction was also associated to the factors described in the previous paragraph as well as the deleveraging of the Corporation's balance sheet mostly due to lower balances of loans and investment securities from September 30, 2008 to the same date in 2009. Also, there was a reduction in brokered certificates of deposit.

Borrowings and capital

The accompanying Exhibit A also provides information on borrowings and stockholders' equity as of September 30, 2009, June 30, 2009 and September 30, 2008.

The Corporation's borrowings amounted to $5.5 billion as of September 30, 2009, compared with $5.6 billion as of June 30, 2009.

Stockholders' equity totaled $2.7 billion as of September 30, 2009, compared with $2.9 billion as of June 30, 2009. The decrease in stockholders' equity from June 30, 2009 to September 30, 2009 is mainly related to the net loss of $125.0 million recorded during the quarter. During the quarter ended September 30, 2009, the Corporation did not declare dividends on its preferred or common stock.

Below is a summary of the Corporation's regulatory capital ratios as of September 30, 2009 and June 30, 2009.

                         September 30,          June 30,     Minimum required
                             2009                 2009
    Tier 1 risk-based
     capital                 10.23%              10.73%           4.00%
    Total risk-based
     capital                 11.53%              12.02%           8.00%
    Tier 1 leverage           7.93%               8.26%      3.00% - 4.00%

Regulatory capital requirements for banking institutions are based on Tier 1 and Total capital, which include both common stock and certain qualifying preferred stock.

Reconciliation of Non-GAAP Financial Measure:

The table below presents a reconciliation of Tier 1 common equity (also referred to as Tier 1 common) to common stockholders' equity. Ratios calculated based upon Tier 1 common equity have become a focus of regulators and investors, and management believes ratios based on Tier 1 common equity assist investors in analyzing the Corporation's capital position. In connection with the Supervisory Capital Assessment Program ("SCAP"), the Federal Reserve began supplementing its assessment of the capital adequacy of a bank holding company based on a variation of Tier 1 capital, known as Tier 1 common equity. Because Tier 1 common equity is not formally defined by GAAP or, unlike Tier 1 capital, codified in the federal banking regulations, this measure is considered to be a non-GAAP financial measure.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. To mitigate these limitations, the Corporation has procedures in place to calculate these measures using the appropriate GAAP or regulatory components. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.

The following table provides a reconciliation of common stockholders' equity (GAAP) to Tier 1 common equity (non-GAAP):

    (In thousands)                           September 30,          June 30,
                                                2009                  2009
    Common stockholders' equity              $2,692,296            $1,412,701
    Less: Unrealized gains on available
     for sale securities, net of tax (1)      (121,735)              (48,296)
    Less: Disallowed deferred tax assets (2)  (195,894)             (167,223)
    Less: Intangible assets:
          Goodwill                            (606,508)             (607,164)
          Other disallowed intangibles         (21,873)              (25,797)
    Less: Aggregate adjusted carrying
     value of all non-financial equity
     investments                                (2,362)               (2,147)
    Add: Pension liability adjustment,
     net of tax and accumulated net
     losses on cash flow hedges (3)            119,007               120,256
    Total Tier 1 common equity              $1,862,931              $682,330

(1) In accordance with regulatory risk-based capital guidelines, Tier 1 capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values. In arriving at Tier 1 capital, institutions are required to deduct net unrealized losses on available-for- sale equity securities with readily determinable fair values, net of tax.

(2) Approximately $167 million of the Corporation's $381 million of net deferred tax assets as of September 30, 2009 ($193 million and $390 million, respectively as of June 30, 2009), were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $196 million of such assets as of September 30, 2009 ($167 million as of June 30, 2009) exceeded the limitation imposed by these guidelines and, as "disallowed deferred tax assets," were deducted in arriving at Tier 1 capital. The remaining $18 million of the Corporation's other net deferred tax assets as of September 30, 2009 ($30 million as of June 30, 2009) represented primarily the following items (a) the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines; (b) the deferred tax asset corresponding to the pension liability adjustment recorded as part of accumulated other comprehensive income; and (c) the deferred tax liability associated with goodwill and other intangibles

(3) The Federal Reserve Bank has granted interim capital relief for the impact of pension liability adjustment.

Forward-Looking Statements:

The information included in this press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in forward- looking statements. Factors that might cause such a difference include, but are not limited to (i) the rate of declining growth in the economy and employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) the fiscal and monetary policies of the federal government and its agencies; (iv) changes in federal bank regulatory and supervisory policies, including required levels of capital; (v) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate markets in Puerto Rico and the other markets in which borrowers are located; (vi) the performance of the stock and bond markets; (vii) competition in the financial services industry; (viii) possible legislative, tax or regulatory changes; and (ix) difficulties in combining the operations of acquired entities. For a discussion of such factors and certain risks and uncertainties to which the Corporation is subject, see the Corporation's Annual Report on Form 10-K for the year ended December 31, 2008 as well as its filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, the Corporation assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

Founded in 1893, Popular, Inc. (NASDAQ: BPOP) is the No. 1 bank by both assets and deposits in Puerto Rico and ranks 33rd by assets among U.S. banks. In the United States, Popular has established a community-banking franchise providing a broad range of financial services and products with branches in New York, New Jersey, Illinois, Florida and California.

Popular also continues to expand its expertise in processing technology through its subsidiary EVERTEC, which processes approximately 1.1 billion transactions annually in the Caribbean and Latin America.

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

    Exhibits A, B and C follow

    EXHIBIT A

    POPULAR, INC.
    Financial Summary
    (Unaudited)


                          Quarter        3rd Quarter    Quarter   3rd Quarter
                           ended            2009        ended       2009
                        September 30,     vs 2008     June 30,  vs 2nd Quarter
                        2009     2008   $ Variance       2009     $ Variance
    Summary of
     Operations
     (In thousands,
     except share
     information)

    Interest
     income          $454,463  $555,481   ($101,018)    $471,046   ($16,583)
    Interest
     expense          178,074   231,199     (53,125)     187,986     (9,912)

    Net interest
     income           276,389   324,282     (47,893)     283,060     (6,671)
    Provision for
     loan losses      331,063   252,160       78,903     349,444    (18,381)

    Net interest
     income after
     provision for
     loan losses     (54,674)    72,122    (126,796)    (66,384)     11,710

    Net (loss)
     gain on sale
     and valuation
     adjustments of
     investment
     securities       (9,059)   (9,132)           73      53,705    (62,764)
    Trading account
     profit             7,579     6,669          910      16,839     (9,260)
    (Loss) gain on
     sale of loans
     and valuation
     adjustments
     on loans
     held-for-sale    (8,728)     6,522     (15,250)    (13,453)      4,725
    Other
     non-interest
     income           170,252   183,869     (13,617)     168,748      1,504

    Total
     non-interest
     income           160,044   187,928     (27,884)     225,839    (65,795)

    Personnel
     costs            130,547   148,230     (17,683)     136,206     (5,659)
    Gain on
     debt
     extinguishment
     related to
     trust
     preferred
     securities      (80,259)        -      (80,259)           -    (80,259)
    Other
     operating
     expenses         170,312    174,685     (4,373)     194,439    (24,127)

    Total
     operating
     expenses         220,600    322,915   (102,315)     330,645   (110,045)

    Loss from
     continuing
     operations
     before income
     tax            (115,230)   (62,865)    (52,365)   (171,190)     55,960
    Income tax
     expense            6,331    148,308   (141,977)       5,393        938

    Loss from
     continuing
     operations,
     net of
     income tax     (121,561)  (211,173)      89,612   (176,583)     55,022
    Loss from
     discontinued
     operations,
     net of
     income tax       (3,427)  (457,370)     453,943     (6,599)      3,172

    Net loss       ($124,988) ($668,543)    $543,555  ($183,182)    $58,194

    Net income
     (loss)
     applicable
     to common
     stock (1)      $595,614  ($679,772)  $1,275,386  ($207,810)   $803,424

    Earnings
     (losses)
     per common share: (1)
     Basic and diluted
     earnings (losses)
     per common share
     from continuing
     operations        $1.41     ($0.79)                  ($0.71)
     Basic and
     diluted losses
     per common
     share from
     discontinued
     operations      ($0.01)     ($1.63)                  ($0.03)
     Basic and
      diluted
     earnings
     (losses)
     per common
     share - Total    $1.40      ($2.42)                  ($0.74)

    Dividends
     declared per
     common share        -        $0.08                         -


    Average common
     shares
     out-
     standing   425,672,578 281,489,469               281,888,394
    Average
     common
     shares
     outstanding -
     assuming
     dilution   425,672,578 281,489,469               281,888,394
    Common
     shares
     outstanding
     at end of
     period     639,541,515 281,708,260               282,031,548

    Market value
     per common
     share            $2.83       $8.29                     $2.20
    Book value
     per common
     share            $4.21       $8.59                     $5.01

    Market
    Capitalization
    In millions)     $1,810      $2,335                      $620

    Selected
     Average
     Balances - (In
     millions)
    Total assets    $35,813     $40,634     ($4,821)      $37,048   ($1,235)
    Stockholders'
     equity           2,771       3,471        (700)        3,002      (231)

    Selected
     Financial Data
     at Period-End
     (In millions)
     Total assets   $35,638     $40,390     ($4,752)      $36,499     ($861)
     Loans (2)       24,472      27,207      (2,735)       24,850      (378)
     Earning
     assets(2)       33,398      36,483      (3,085)       34,070      (672)
     Deposits        26,383      27,911      (1,528)       26,913      (530)
     Borrowings (2)   5,461       8,646      (3,185)        5,587      (126)
     Interest bearing
      liabilities
     (2)             27,562      32,492      (4,930)       28,092      (530)
    Stockholders'
     equity           2,742       3,007        (265)        2,900      (158)

    Performance
    Ratios
    Net interest
    yield from
    continuing
    operations (3)    3.30%       3.62%                     3.27%
    Return on
    assets           (1.38)      (6.55)                    (1.98)
    Return on
     common
     equity         (26.24)     (93.32)                   (53.48)

    Credit Quality
     Data
     (Dollars in
     millions)
    Net loans
     charged-off,
     excluding
     write-downs
     on loans
     transferred to
     held-for-
     sale (4)       $269.9      $170.5        $99.4       $260.3      $9.6
    Allowance for
     loan losses     1,207         726          481        1,146        61
    Non-performing
     loans from
     continuing
     operations    2,115.5     1,028.4      1,087.1      1,978.2     137.3
    Non-performing
     loans from
     discontinued
     operations         -         75.0       (75.0)          1.0     (1.0)
    Non-performing
    loans -
     total         2,115.5     1,103.4      1,012.1      1,979.2     136.3
    Non-performing
     loans to loans
     held-in-
     portfolio
     (5)(6)          8.67%       3.90%                      8.04%
    Allowance for
     loan losses to
     non-performing
     loans(5)        57.07       70.64                      57.94
    Allowance for
     loan
     losses to
     loans held
     -in-portfolio(6) 4.95        2.76                       4.66


    (1) Refer to table included in press release for a reconciliation of
        (losses) earnings per common share.
    (2) Includes assets/liabilities from discontinued operations, principally
        $626 million in loans, $630 million in earning assets and $166 million
        in borrowings and interest-bearing liabilities as of September 30,
        2008.
    (3) Not on a taxable equivalent basis.
    (4) Excludes net charge-offs from discontinued operations.
    (5) Non-performing loans ("NPL") exclude NPL accounted pursuant to the
        fair value option and NPL from discontinued operations.
    (6) Loans held-in-portfolio exclude loans held-for-sale and loans
        accounted pursuant to the fair value option.

Notes: Certain reclassifications have been made to prior periods to conform with this quarter presentation.

    EXHIBIT A (CONTINUED)

    POPULAR, INC.
    Financial Summary
    (Unaudited)


                                          For the nine months ended
                                               September 30,
                                             2009         2008     $ Variance
    Summary of Operations  (In
     thousands, except share information)

    Interest income                        $1,414,701   $1,732,581  ($317,880)
    Interest expense                          582,766      742,243   (159,477)

    Net interest income                       831,935      990,338   (158,403)
    Provision for loan losses               1,053,036      602,561    450,475

    Net interest income after provision
     for loan losses                         (221,101)     387,777   (608,878)

    Net gain on sale and valuation
     adjustments of investment securities     220,792       69,430    151,362
    Trading account profit                     31,241       38,547     (7,306)
    (Loss) gain on sale of loans and
     valuation adjustments on loans held-
     for-sale                                 (35,994)      25,696    (61,690)
    Other non-interest income                 504,575      554,804    (50,229)

    Total non-interest income                 720,614      688,477     32,137

    Personnel costs                           412,044      459,515    (47,471)
    Gain on debt extinguishment related
     to trust preferred securities            (80,259)         -      (80,259)
    Other operating expenses                  523,657      517,033      6,624

    Total operating expenses                  855,442      976,548   (121,106)

    (Loss) income from continuing
     operations before income tax            (355,929)      99,706   (455,635)
    Income tax (benefit) expense              (15,209)     152,467   (167,676)

    Loss from continuing operations, net
     of income tax                           (340,720)     (52,761)  (287,959)
    Loss from discontinued operations,
     net of income tax                        (19,972)    (488,242)   468,270

    Net loss                                ($360,692)   ($541,003)  $180,311

    Net income (loss) applicable to
     common stock (1)                        $310,604    ($561,213)  $871,817

    Earnings (losses) per common share:
     (1)
        Basic and diluted earnings
         (losses) per common share from
         continuing operations                  $1.00       ($0.27)
        Basic and diluted losses per
         common share from discontinued
         operations                            ($0.06)      ($1.73)
        Basic and diluted earnings
         (losses) per common share -
         Total                                  $0.94       ($2.00)

    Dividends declared per common share         $0.02        $0.40

    Average common shares outstanding     330,325,348  280,841,638
    Average common shares outstanding -
     assuming dilution                    330,325,348  280,841,638
    Common shares outstanding at end of
     period                               639,541,515  281,708,260

    Market value per common share               $2.83        $8.29
    Book value per common share                 $4.21        $8.59

    Market Capitalization - (In
     millions)                                 $1,810       $2,335

    Selected Average Balances - (In
     millions)
    Total assets                              $37,090      $41,392    ($4,302)
    Stockholders' equity                        2,961        3,440       (479)

    Performance Ratios
    Net interest yield from continuing
     operations (2)                             3.21%        3.65%
    Return on assets                            (1.30)       (1.75)
    Return on common equity                    (31.48)      (24.57)

    Credit Quality Data - (Dollars in
     millions)
    Net loans charged-off, excluding
     write-downs on loans transferred to
     held-for-sale (3)                         $728.4       $376.3     $352.1
    Allowance for loan losses                   1,207          726        481
    Non-performing loans from continuing
     operations                               2,115.5      1,028.4    1,087.1
    Non-performing loans from
     discontinued operations                      -           75.0      (75.0)
    Non-performing loans - total              2,115.5      1,103.4    1,012.1
    Non-performing loans to loans held-
     in-portfolio (4)(5)                        8.67%        3.90%
    Allowance for loan losses to non-
     performing loans (4)                       57.07        70.64
    Allowance for loan losses to loans
     held-in-portfolio (5)                       4.95         2.76


    (1) Refer to table included in press release for a reconciliation of
    (losses) earnings per common share.
    (2) Not on a taxable equivalent basis.
    (3) Excludes net charge-offs from discontinued operations.
    (4) Non-performing loans ("NPL") exclude NPL accounted pursuant to the
    fair value option and NPL from discontinued operations.
    (5) Loans held-in-portfolio exclude loans held-for-sale and loans
    accounted pursuant to the fair value option.

    Notes: Certain reclassifications have been made to prior periods to
    conform with this quarter presentation.


    EXHIBIT B

    POPULAR, INC.
    Credit Quality Information
    (Unaudited)
                                                       For the     For the
                        Quarter   Quarter   Quarter  nine months  nine months
                         ended     ended     ended      ended        ended
                      Sept. 30,  June 30,  Sept. 30,  Sept. 30,   Sept. 30,
                         2009       2009       2008       2009        2008

    Net loans charged-off,
    excluding write-downs
    on loans transferred
    to held-for-sale
    (In thousands)
    Commercial        $59,114    $69,878    $36,541   $170,328    $105,208
    Construction       95,941     76,534     52,339    217,283      57,529
    Mortgage           34,322     24,633     11,809     90,103      30,497
    Consumer           76,590     85,165     65,598    237,716     169,313
    Lease
     financing          3,934      4,120      4,246     13,012      13,734
     Total            $269,901  $260,330   $170,533   $728,442    $376,281

                                                     For the     For the
                      Quarter   Quarter   Quarter  nine months  nine months
                       ended     ended     ended      ended        ended
                     Sept. 30,  June 30,  Sept. 30,  Sept. 30,   Sept. 30,
                       2009       2009      2008       2009        2008

    Annualized Net
    Charge-Offs to
    Average Loans
    Held-in-Portfolio
    Commercial        1.81%      2.11%      1.06%     1.71%        1.03%
    Construction      19.45      14.46       9.82     13.83         3.76
    Mortgage           3.16       2.27       1.07      2.75         0.90
    Consumer           7.18       7.73       5.48      7.17         4.65
    Lease financing    2.23       2.25       1.52      2.40         1.66
     Total            4.43%      4.19%       2.60%     3.91%       1.92%


    Non-performing
    Loans from Continuing
    Operations
    (In thousands)       Sept. 30    As a %         June 30,     As a %
                           2009      of loans        2009       of loans
                                 held-in-portfolio          held-in-portfolio

    Commercial          $776,027      5.9%         $686,150      5.2%
    Construction         768,987      40.9          767,029      37.7
    Mortgage             484,219      10.6          441,773       9.9
    Consumer              75,992       1.8           71,413        1.7
    Lease financing       10,309       1.5           11,825        1.6
     Total            $2,115,534      8.7%       $1,978,190        8.0%


                          September 30, 2009             June 30, 2009
    Impaired loans
    evaluated for
    specific reserves
    (In millions)                  Specific                    Specific
                                 Allowance for               Allowance for
                      Recorded     loan losses    Recorded    loan losses
                     Investment     (ALLL)       Investment     (ALLL)

    Impaired loans with
    ALLL required      $1,134.5    $313.2         $1,034.4      $313.1
    Impaired loans
    with no ALLL
    required              404.9         -            410.5           -
    Total impaired
     loans             $1,539.4    $313.2         $1,444.9       $313.1


                       For the quarter              For the quarter ended
                 ended September 30, 2009              June 30, 2009
            Construction Commercial Mortgage  Construction Commercial Mortgage
                 Loans     Loans      Loans       Loans       Loans    Loans

    Activity
    in the
    specific
    reserves for
    impaired loans
    (In thousands)
    Specific ALLL
    at beginning
    of period  $ 197,898 $ 85,608  $ 29,584     $ 177,208    $ 79,927 $ 22,061
    Provision
     for
    impaired
    loans         59,814   41,004     7,743        90,894      29,102    9,375
    Net
     charge-offs  86,681   19,911     1,835        70,204      23,421    1,852
    Specific
    ALLL at
    end of
    period     $ 171,031 $ 106,701 $ 35,492     $ 197,898    $ 85,608 $ 29,584


    EXHIBIT B (CONTINUED
    POPULAR, INC.
    Credit Quality Information
    (Unaudited)

    Composition of the Allowance for Loan Losses (ALLL) by Category

    September 30, 2009 (Dollars in thousands)

                                        Lease
              Commercial Construction Financing Mortgage  Consumer    Total
    Specific
     ALLL     $ 106,701   $171,031  $-         $ 35,492 $-        $ 313,224

    Impaired
     loans    $ 619,544   $751,976  $-         $167,863 $-       $1,539,383

    Specific
     ALLL
     to
     impaired
     loans       17.22%     22.74%  -            21.14%  -           20.35%
    General
     ALLL     $ 266,563   $168,309  $24,609    $108,848 $325,848  $ 894,177

    Loans
     held-in-
     port-
     folio,
     excluding
     impaired
     loans  $12,456,324 $1,130,093 $699,350  $4,379,509 $4,191,410 $22,856,686
    General
     ALLL
     to loans
     held-in-
     port-
     folio,
     excluding
     impaired
     loans       2.14%     14.89%     3.52%       2.49%      7.77%      3.91%
    Total
     ALLL    $ 373,264   $339,340   $24,609    $144,340   $325,848 $1,207,401

    Total loans
    held-in-
    port-
    folio  $13,075,868 $1,882,069  $699,350  $4,547,372 $4,191,410 $24,396,069
    ALLL to
     loans
     held-in-
     portfolio   2.85%     18.03%     3.52%       3.17%      7.77%       4.95%


    June 30, 2009 (Dollars in thousands)

                                       Lease
              Commercial Construction Financing  Mortgage  Consumer    Total

    Specific
    ALLL        $85,608  $197,898    $-        $ 29,584  $-          $ 313,090

    Impaired
    loans     $ 522,678  $781,910    $-        $140,299  $-         $1,444,887

    Specific
     ALLL
     to impaired
     loans       16.38%    25.31%     -          21.09%  -              21.67%
    General
    ALLL       $239,004  $145,910    $29,934   $102,331   $315,970    $833,149

    Loans
    held-in-
    portfolio,
    excluding
    impaired
    loans  $12,555,829 $1,251,537   $730,396 $4,304,199 $4,319,214 $23,161,175
    General
     ALLL to
     loans
     held-in-
     portfolio,
     excluding
     impaired
     loans      1.90%     11.66%     4.10%       2.38%       7.32%       3.60%
    Total
     ALLL   $ 324,612   $343,808   $29,934    $131,915    $315,970  $1,146,239

    Total
     loans
     held-in-
     port-
    folio $13,078,507 $2,033,447  $730,396  $4,444,498  $4,319,214 $24,606,062
    ALLL to
    loans
    held-in-
    portfolio   2.48%     16.91%     4.10%         2.97%     7.32%     4.66%


    EXHIBIT C

    POPULAR, INC.
    Financial Summary - Segment Reporting
    (Unaudited)

                                    Quarter ended September 30, 2009

                                                       Intersegment    Total
                                                         Eliminat-  Reportable
                              BPPR      BPNA     EVERTEC   ions      Segments
    Summary of Operations
      (In thousands)

    Net interest income
     (expense)              $217,859    $77,588    ($304)      -     $295,143
    Provision for loan
     losses                  153,350    177,713      -         -      331,063

    Net interest income
     after provision for
     loan losses              64,509   (100,125)    (304)      -      (35,920)

    Net (loss) gain on sale
     and valuation adjustments
     of investment securities   (311)    (5,173)     -         -       (5,484)
    Trading account profit     7,579        -        -         -        7,579
    Gain (loss) on sale of
     loans and valuation
     adjustments on loans
     held-for-sale               593     (9,321)     -         -       (8,728)
    Other non-interest
     income (service charges
     on deposits, other
     service fees and other) 122,512     20,889   62,269  ($36,160)   169,510

    Total non-interest
     income                  130,373      6,395   62,269   (36,160)   162,877

    Personnel costs           73,876     27,287   20,978       (64)   122,077
    Gains on extinguishment
     of debt related to
     trust preferred
     securities                  -          -        -         -          -
    Other operating
     expenses                129,903     46,347   23,807   (36,170)   163,887

    Total operating
     expenses                203,779     73,634   44,785   (36,234)   285,964

    Income (loss) from
     continuing operations,
     before income tax        (8,897)  (167,364)  17,180        74   (159,007)
    Income tax expense
     (benefit)                 1,883      2,553    6,341        31     10,808
    Income (loss) from
     continuing operations,
     net of income tax       (10,780)  (169,917)  10,839        43   (169,815)
    Loss from discontinued
     operations, net of
     income tax                  -          -        -         -          -

    Net income (loss)       ($10,780) ($169,917) $10,839       $43  ($169,815)




                                           Quarter ended September 30, 2009
                                                     Eliminations and
                                                       Discontinued  Popular,
                                            Corporate   Operations    Inc.
    Summary of Operations -
     (In thousands)

    Net interest income (expense)           ($19,037)      $283     $276,389
    Provision for loan losses                    -          -        331,063

    Net interest income after provision
     for loan losses                         (19,037)       283      (54,674)

    Net (loss) gain on sale and valuation
     adjustments of investment securities     (1,517)    (2,058)      (9,059)
    Trading account profit                       -          -          7,579
    Gain (loss) on sale of loans and
     valuation adjustments on loans
     held-for-sale                               -          -         (8,728)
    Other non-interest income (service
     charges on deposits, other service
     fees and other)                           6,918     (6,176)     170,252

    Total non-interest income                  5,401     (8,234)     160,044

    Personnel costs                            9,488     (1,018)     130,547
    Gains on extinguishment of debt
     related to trust preferred securities   (78,337)    (1,922)     (80,259)
    Other operating expenses                   8,061     (1,636)     170,312

    Total operating expenses                 (60,788)    (4,576)     220,600

    Income (loss) from continuing
     operations, before income tax            47,152     (3,375)    (115,230)
    Income tax expense (benefit)              (5,171)       694        6,331
    Income (loss) from continuing
     operations, net of income tax            52,323     (4,069)    (121,561)
    Loss from discontinued operations,
     net of income tax                           -       (3,427)      (3,427)

    Net income (loss)                        $52,323    ($7,496)   ($124,988)


    EXHIBIT C (CONTINUED)

    POPULAR, INC.
    Financial Summary - Segment Reporting
    (Unaudited)


                                   Quarter ended September 30, 2008

                                                       Intersegment   Total
                                                         Eliminat-  Reportable
                              BPPR      BPNA     EVERTEC   ions      Segments
    Summary of Operations
      (In thousands)

    Net interest income
     (expense)             $238,373    $89,424      ($134)      -    $327,663
    Provision for loan
     losses                 128,917    123,243        -         -     252,160

    Net interest income
     after provision for
     loan losses            109,456    (33,819)      (134)      -      75,503

    Net (loss) gain on
     sale and valuation
     adjustments of
     investment
     securities                   -          5         10       -          15
    Trading account
     profit                   6,669          -         -        -       6,669
    Gain (loss) on sale
     of loans and valuation
     adjustments on loans
     held-for-sale              806      5,716         -        -       6,522
    Other non-interest
     income (service
     charges on deposits,
     other service fees
     and other)             112,854     46,765     63,340  ($37,020)  185,939

    Total non-interest
     income                 120,329     52,486     63,350   (37,020)  199,145

    Personnel costs          74,808     44,033     22,907      (471)  141,277
    Other operating
     expenses               122,131     52,283     27,591   (36,163)  165,842

    Total operating
     expenses               196,939     96,316     50,498   (36,634)  307,119

    Income (loss) from
     continuing operations,
     before income tax       32,846    (77,649)    12,718      (386)  (32,471)
    Income tax expense
     (benefit)               (2,548)    61,394      4,231      (150)   62,927
    Income (loss) from
     continuing operations,
     net of income tax       35,394   (139,043)     8,487      (236)  (95,398)
    Loss from discontinued
     operations, net of
     income tax                 -          -          -         -         -

    Net income (loss)       $35,394  ($139,043)    $8,487     ($236) ($95,398)



                                  Quarter ended September 30, 2008
                                                  Eliminations
                                                      and
                                                  Discontinued    Popular,
                                     Corporate     Operations       Inc.
    Summary of Operations
     ---  (In thousands)

    Net interest income (expense)     ($3,670)        $289        $324,282
    Provision for loan losses             -            -           252,160

    Net interest income after
     provision for loan losses         (3,670)         289          72,122

    Net (loss) gain on sale and
     valuation adjustments of
     investment securities             (9,147)         -            (9,132)
    Trading account profit                -            -             6,669
    Gain (loss) on sale of loans
     and valuation adjustments
     on loans held-for-sale               -            -             6,522
    Other non-interest income
     (service charges on deposits,
     other service fees and other)       (474)      (1,596)        183,869

    Total non-interest (loss) income   (9,621)      (1,596)        187,928

    Personnel costs                     6,953          -           148,230
    Other operating expenses           10,791       (1,948)        174,685

    Total operating expenses           17,744       (1,948)        322,915

    Income (loss) from continuing
     operations, before income tax    (31,035)         641         (62,865)
    Income tax expense (benefit)      106,929      (21,548)        148,308
    Income (loss) from continuing
     operations, net of income tax   (137,964)      22,189        (211,173)
    Loss from discontinued
     operations, net of income tax        -       (457,370)       (457,370)

    Net income (loss)               ($137,964)   ($435,181)      ($668,543)




    EXHIBIT C (CONTINUED)

    POPULAR, INC.
    Financial Summary - Segment Reporting
    (Unaudited)

                                       Quarter ended June 30, 2009

                                                       Intersegment   Total
                                                         Eliminat-  Reportable
                              BPPR      BPNA     EVERTEC   ions      Segments
    Summary of Operations
     -  (In thousands)

    Net interest income
     (expense)              $216,906    $80,821    ($236)      -     $297,491
    Provision for loan
     losses                  181,659    167,785      -         -      349,444

    Net interest income
     after provision for
     loan losses              35,247    (86,964)    (236)      -      (51,953)

    Net (loss) gain on sale
     and valuation
     adjustments of
     investment securities    44,885        -      7,869       -       52,754
    Trading account profit    16,839        -        -         -       16,839
    Gain (loss) on sale of
     loans and valuation
     adjustments on loans
     held-for-sale               578    (14,031)     -         -      (13,453)
    Other non-interest
     income (service
     charges on deposits,
     other service fees and
     other)                  123,131     19,757   62,613  ($36,866)   168,635

    Total non-interest
     income                  185,433      5,726   70,482   (36,866)   224,775

    Personnel costs           75,612     30,866   20,844      (248)   127,074
    Other operating
     expenses                135,813     61,337   24,364   (36,456)   185,058

    Total operating
     expenses                211,425     92,203   45,208   (36,704)   312,132
    Income (loss) from
     continuing operations,
     before income tax         9,255   (173,441)  25,038      (162)  (139,310)
    Income tax expense
     (benefit)                 2,425        788    6,953       (66)    10,100
    Income (loss) from
     continuing operations,
     net of income tax         6,830   (174,229)  18,085       (96)  (149,410)
    Loss from discontinued
     operations, net of
     income tax                  -          -        -         -          -

    Net income (loss)         $6,830  ($174,229) $18,085      ($96) ($149,410)



                                             Quarter ended June 30, 2009
                                                      Eliminations
                                                          and
                                                      Discontinued  Popular,
                                          Corporate    Operations      Inc.
    Summary of Operations-  (In
     thousands)

    Net interest income (expense)           ($14,698)      $267     $283,060
    Provision for loan losses                    -          -        349,444

    Net interest income after provision
     for loan losses                         (14,698)       267      (66,384)

    Net (loss) gain on sale and valuation
     adjustments of investment securities        951        -         53,705
    Trading account profit                       -          -         16,839
    Gain (loss) on sale of loans and
     valuation adjustments on loans held-
     for-sale                                    -          -        (13,453)
    Other non-interest income (service
     charges on deposits, other service
     fees and other)                           2,042     (1,929)     168,748

    Total non-interest income                  2,993     (1,929)     225,839

    Personnel costs                            9,132        -        136,206
    Other operating expenses                  10,917     (1,536)     194,439

    Total operating expenses                  20,049     (1,536)     330,645
    Income (loss) from continuing
     operations, before income tax           (31,754)      (126)    (171,190)
    Income tax expense (benefit)              (4,645)       (62)       5,393
    Income (loss) from continuing
     operations, net of income tax           (27,109)       (64)    (176,583)
    Loss from discontinued operations,
     net of income tax                           -       (6,599)      (6,599)

    Net income (loss)                       ($27,109)   ($6,663)   ($183,182)


    Contact:
    Investor Relations:
    Jorge A. Junquera
    Chief Financial Officer
    Senior Executive Vice President
    787-754-1685

    Media Relations:
    Teruca Rullan
    Senior Vice President
    Corporate Communications
    787-281-5170 or 917-679-3596/mobile

SOURCE Popular, Inc.