Condensed consolidating financial information of guarantor and issuers of registered guaranteed securities

12 Months Ended

Dec. 31, 2018

Condensed Consolidating Financial Information of Guarantor and Issuers of Registeres Guranteed Securities

Note 41 – Condensed consolidating financial information of guarantor and issuers of registered guaranteed securities

The following condensed consolidating financial information presents the financial position of Popular, Inc. Holding Company (“PIHC”) (parent only), Popular North America, Inc. (“PNA”) and all other subsidiaries of the Corporation at December 31, 2018 and 2017, and the results of their operations and cash flows for the periods ended December 31, 2018, 2017 and 2016.

PNA is an operating, wholly-owned subsidiary of PIHC and is the holding company of its wholly-owned subsidiaries: Equity One, Inc. and Popular Bank, including Popular Bank’s wholly-owned subsidiaries Popular Equipment Finance, Inc., Popular Insurance Agency, U.S.A., and E-LOAN, Inc.

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

Condensed Consolidating Statement of Financial Condition

		At December 31, 2018
							All other
			Popular Inc.		PNA		subsidiaries and		Elimination		Popular, Inc.
(In thousands)			Holding Co.		Holding Co.		eliminations		entries		Consolidated
Assets:
Cash and due from banks			$	68,022	$	-	$	394,035	$	(68,022)	$	394,035
Money market investments				176,256		15,288		4,170,792		(191,288)		4,171,048
Trading account debt securities, at fair value				-		-		37,787		-		37,787
Debt securities available-for-sale, at
	fair value			-		-		13,300,184		-		13,300,184
Debt securities held-to-maturity, at
	amortized cost			8,726		2,835		90,014		-		101,575
Equity securities				6,693		20		149,012		(141)		155,584
Investment in subsidiaries				5,704,119		1,700,082		-		(7,404,201)		-
Loans held-for-sale, at lower of cost or
	fair value			-		-		51,422		-		51,422
Loans held-in-portfolio:
	Loans not covered under loss-sharing
	agreements with the FDIC			32,678		-		26,625,080		5,955		26,663,713
	Less - Unearned income			-		-		155,824		-		155,824
	Allowance for loan losses			155		-		569,193		-		569,348
	Total loans held-in-portfolio, net			32,523		-		25,900,063		5,955		25,938,541
Premises and equipment, net				3,394		-		566,414		-		569,808
Other real estate not covered under loss-
	sharing agreements with the FDIC			146		-		136,559		-		136,705
Accrued income receivable				284		116		165,767		(145)		166,022
Mortgage servicing assets, at fair value				-		-		169,777		-		169,777
Other assets				76,073		27,639		1,626,119		(15,697)		1,714,134
Goodwill				-		-		671,123		(1)		671,122
Other intangible assets				6,559		-		20,274		-		26,833
Total assets			$	6,082,795	$	1,745,980	$	47,449,342	$	(7,673,540)	$	47,604,577
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
	Non-interest bearing		$	-	$	-	$	9,217,058	$	(68,022)	$	9,149,036
	Interest bearing			-		-		30,752,291		(191,288)		30,561,003
	Total deposits			-		-		39,969,349		(259,310)		39,710,039
Assets sold under agreements to repurchase				-		-		281,529		-		281,529
Other short-term borrowings				-		-		42		-		42
Notes payable				584,851		94,063		577,188		-		1,256,102
Other liabilities				62,799		3,287		871,733		(16,011)		921,808
Total liabilities				647,650		97,350		41,699,841		(275,321)		42,169,520
Stockholders' equity:
Preferred stock				50,160		-		-		-		50,160
Common stock				1,043		2		56,307		(56,309)		1,043
Surplus				4,357,079		4,172,983		5,790,324		(9,954,780)		4,365,606
Retained earnings (accumulated deficit)				1,660,258		(2,479,503)		327,713		2,143,263		1,651,731
Treasury stock, at cost				(205,421)		-		-		(88)		(205,509)
Accumulated other comprehensive loss,
	net of tax			(427,974)		(44,852)		(424,843)		469,695		(427,974)
Total stockholders' equity				5,435,145		1,648,630		5,749,501		(7,398,219)		5,435,057
Total liabilities and stockholders' equity			$	6,082,795	$	1,745,980	$	47,449,342	$	(7,673,540)	$	47,604,577

Condensed Consolidating Statement of Financial Condition

		At December 31, 2017
							All other
			Popular, Inc.		PNA		subsidiaries and		Elimination		Popular, Inc.
(In thousands)			Holding Co.		Holding Co.		eliminations		entries		Consolidated
Assets:
Cash and due from banks			$	47,663	$	462	$	402,910	$	(48,178)	$	402,857
Money market investments				246,457		2,807		5,254,662		(248,807)		5,255,119
Trading account debt securities, at fair value				-		-		33,926		-		33,926
Debt securities available-for-sale, at
	fair value			-		-		10,176,923		-		10,176,923
Debt securities held-to-maturity, at
	amortized cost			8,726		4,472		93,821		-		107,019
Equity securities				5,109		20		160,075		(101)		165,103
Investment in subsidiaries				5,494,410		1,646,287		-		(7,140,697)		-
Loans held-for-sale, at lower of cost or
	fair value			-		-		132,395		-		132,395
Loans held-in-portfolio:
	Loans not covered under loss-sharing
	agreements with the FDIC			33,221		-		24,384,251		5,955		24,423,427
	Loans covered under loss-sharing
	agreements with the FDIC			-		-		517,274		-		517,274
	Less - Unearned income			-		-		130,633		-		130,633
	Allowance for loan losses			266		-		623,160		-		623,426
	Total loans held-in-portfolio, net			32,955		-		24,147,732		5,955		24,186,642
FDIC loss-share asset				-		-		45,192		-		45,192
Premises and equipment, net				3,365		-		543,777		-		547,142
Other real estate not covered under loss-sharing
	agreements with the FDIC			-		-		169,260		-		169,260
Other real estate covered under loss-sharing
	agreements with the FDIC			-		-		19,595		-		19,595
Accrued income receivable				369		112		213,574		(211)		213,844
Mortgage servicing assets, at fair value				-		-		168,031		-		168,031
Other assets				61,319		34,312		1,912,727		(17,035)		1,991,323
Goodwill				-		-		627,294		-		627,294
Other intangible assets				6,114		-		29,558		-		35,672
Total assets			$	5,906,487	$	1,688,472	$	44,131,452	$	(7,449,074)	$	44,277,337
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
	Non-interest bearing		$	-	$	-	$	8,539,123	$	(48,178)	$	8,490,945
	Interest bearing			-		-		27,211,370		(248,807)		26,962,563
	Total deposits			-		-		35,750,493		(296,985)		35,453,508
Assets sold under agreements to repurchase				-		-		390,921		-		390,921
Other short-term borrowings				-		-		96,208		-		96,208
Notes payable				737,685		148,539		650,132		-		1,536,356
Other liabilities				64,813		5,276		1,641,383		(15,033)		1,696,439
Total liabilities				802,498		153,815		38,529,137		(312,018)		39,173,432
Stockholders' equity:
Preferred stock				50,160		-		-		-		50,160
Common stock				1,042		2		56,307		(56,309)		1,042
Surplus				4,289,976		4,100,848		5,728,978		(9,821,299)		4,298,503
Retained earnings (accumulated deficit)				1,203,521		(2,536,707)		165,878		2,362,302		1,194,994
Treasury stock, at cost				(90,058)		-		-		(84)		(90,142)
Accumulated other comprehensive loss,
	net of tax			(350,652)		(29,486)		(348,848)		378,334		(350,652)
Total stockholders' equity				5,103,989		1,534,657		5,602,315		(7,137,056)		5,103,905
Total liabilities and stockholders' equity			$	5,906,487	$	1,688,472	$	44,131,452	$	(7,449,074)	$	44,277,337

Condensed Consolidating Statement of Operations

			Year ended December 31, 2018
							All other
		Popular, Inc.		PNA			subsidiaries and			Elimination			Popular, Inc.
(In thousands)		Holding Co.		Holding Co.			eliminations			entries			Consolidated
Interest and dividend income:
	Dividend income from subsidiaries	$	453,200		$	-		$	-		$	(453,200)		$	-
	Loans		2,115			-			1,643,670			(49)			1,645,736
	Money market investments		5,555			69			111,287			(5,623)			111,288
	Investment securities		696			279			263,849			-			264,824
	Total interest and dividend income		461,566			348			2,018,806			(458,872)			2,021,848
Interest expense:
	Deposits		-			-			209,888			(5,623)			204,265
	Short-term borrowings		-			49			7,210			(49)			7,210
	Long-term debt		51,218			9,330			14,948			-			75,496
	Total interest expense		51,218			9,379			232,046			(5,672)			286,971
Net interest income (expense)			410,348			(9,031)			1,786,760			(453,200)			1,734,877
Provision (reversal) for loan losses- non-covered loans			(251)			-			226,593			-			226,342
Provision for loan losses- covered loans			-			-			1,730			-			1,730
Net interest income (expense)
	after provision for loan losses		410,599			(9,031)			1,558,437			(453,200)			1,506,805
Service charges on deposit accounts			-			-			150,677			-			150,677
Other service fees			-			-			260,730			(2,710)			258,020
Mortgage banking activities			-			-			52,802			-			52,802
Net loss, including impairment on equity securities			(777)			-			(1,268)			(36)			(2,081)
Net loss on trading account debt securities			-			-			(208)			-			(208)
Net gain on sale of loans, including valuation
	adjustments on loans held-for-sale		-			-			33			-			33
Adjustments (expense) to indemnity reserves
	on loans sold		-			-			(12,959)			-			(12,959)
FDIC loss-share income			-			-			94,725			-			94,725
Other operating income			15,751			737			95,037			(40)			111,485
	Total non-interest income		14,974			737			639,569			(2,786)			652,494
Operating expenses:
Personnel costs			59,821			-			503,167			-			562,988
Net occupancy expenses			4,055			-			84,274			-			88,329
Equipment expenses			3,433			3			68,352			-			71,788
Other taxes			233			1			46,050			-			46,284
Professional fees			18,159			178			331,978			(471)			349,844
Communications			485			-			22,622			-			23,107
Business promotion			2,236			-			63,682			-			65,918
FDIC deposit insurance			-			-			27,757			-			27,757
Loss on early extinguishment of debt			12,522			-			-			-			12,522
Other real estate owned (OREO) expenses			-			-			23,338			-			23,338
Other operating expenses			(84,807)			80			227,463			(2,375)			140,361
Amortization of intangibles			41			-			9,285			-			9,326
	Total operating expenses		16,178			262			1,407,968			(2,846)			1,421,562
Income (loss) before income tax
	and equity in earnings of subsidiaries		409,395			(8,556)			790,038			(453,140)			737,737
Income tax expense			-			3,267			116,275			37			119,579
Income (loss) before equity in
	earnings of subsidiaries		409,395			(11,823)			673,763			(453,177)			618,158
Equity in undistributed earnings of
	subsidiaries		208,763			69,027			-			(277,790)			-
Net income		$	618,158		$	57,204		$	673,763		$	(730,967)		$	618,158
Comprehensive income, net of tax		$	540,836		$	41,838		$	597,768		$	(639,606)		$	540,836

Condensed Consolidating Statement of Operations

			Year ended December 31, 2017
							All other
		Popular, Inc.		PNA			subsidiaries and			Elimination			Popular, Inc.
(In thousands)		Holding Co.		Holding Co.			eliminations			entries			Consolidated
Interest and dividend income:
	Dividend income from subsidiaries	$	211,500		$	-		$	-		$	(211,500)		$	-
	Loans		1,056			-			1,477,713			(4)			1,478,765
	Money market investments		2,616			54			51,495			(2,670)			51,495
	Investment securities		566			322			194,796			-			195,684
	Total interest and dividend income		215,738			376			1,724,004			(214,174)			1,725,944
Interest expense:
	Deposits		-			-			144,534			(2,670)			141,864
	Short-term borrowings		-			-			5,728			(4)			5,724
	Long-term debt		52,470			10,767			13,155			-			76,392
	Total interest expense		52,470			10,767			163,417			(2,674)			223,980
Net interest income (expense)			163,268			(10,391)			1,560,587			(211,500)			1,501,964
Provision for loan losses- non-covered loans			403			-			325,234			(5,955)			319,682
Provision for loan losses- covered loans			-			-			5,742			-			5,742
Net interest income (expense) after provision
	for loan losses		162,865			(10,391)			1,229,611			(205,545)			1,176,540
Service charges on deposit accounts			-			-			153,709			-			153,709
Other service fees			-			-			220,073			(2,806)			217,267
Mortgage banking activities			-			-			25,496			-			25,496
Net gain on sale of debt securities			-			-			83			-			83
Other-than-temporary impairment losses on
	debt securities		-			-			(8,299)			-			(8,299)
Net gain on equity securities			-			-			251			-			251
Net profit (loss) on trading account debt securities			266			-			(1,110)			27			(817)
Net loss on sale of loans, including valuation
	adjustments on loans held-for-sale		-			-			(420)			-			(420)
Adjustments (expense) to indemnity reserves
	on loans sold		-			-			(22,377)			-			(22,377)
FDIC loss-share expense			-			-			(10,066)			-			(10,066)
Other operating income			11,847			921			51,598			(26)			64,340
	Total non-interest income		12,113			921			408,938			(2,805)			419,167
Operating expenses:
Personnel costs			47,561			-			429,201			-			476,762
Net occupancy expenses			3,876			-			85,318			-			89,194
Equipment expenses			2,925			2			62,215			-			65,142
Other taxes			217			-			43,165			-			43,382
Professional fees			11,766			(427)			281,585			(436)			292,488
Communications			549			-			21,917			-			22,466
Business promotion			2,014			-			56,431			-			58,445
FDIC deposit insurance			-			-			26,392			-			26,392
Other real estate owned (OREO) expenses			42			-			48,498			-			48,540
Other operating expenses			(70,723)			51			197,935			(2,256)			125,007
Amortization of intangibles			-			-			9,378			-			9,378
	Total operating expenses		(1,773)			(374)			1,262,035			(2,692)			1,257,196
Income (loss) before income tax and equity in
	earnings of subsidiaries		176,751			(9,096)			376,514			(205,658)			338,511
Income tax (benefit) expense			-			(8,382)			236,944			2,268			230,830
Income (loss) before equity in earnings of subsidiaries			176,751			(714)			139,570			(207,926)			107,681
Equity in undistributed (losses) earnings of subsidiaries			(69,070)			(153,944)			-			223,014			-
Net income (loss)		$	107,681		$	(154,658)		$	139,570		$	15,088		$	107,681
Comprehensive income (loss), net of tax		$	77,315		$	(162,195)		$	108,663		$	53,532		$	77,315

Condensed Consolidating Statement of Operations

			Year ended December 31, 2016
							All other
		Popular, Inc.		PNA			subsidiaries and			Elimination			Popular, Inc.
(In thousands)		Holding Co.		Holding Co.			eliminations			entries			Consolidated
Interest and dividend income:
	Dividend income from subsidiaries	$	102,300		$	-		$	-		$	(102,300)		$	-
	Loans		78			-			1,459,642			-			1,459,720
	Money market investments		1,399			101			16,428			(1,500)			16,428
	Investment securities		664			322			157,439			-			158,425
	Total interest and dividend income		104,441			423			1,633,509			(103,800)			1,634,573
Interest Expense:
	Deposits		-			-			129,077			(1,500)			127,577
	Short-term borrowings		-			-			7,812			-			7,812
	Long-term debt		52,470			10,769			13,890			-			77,129
	Total interest expense		52,470			10,769			150,779			(1,500)			212,518
Net interest income (expense)			51,971			(10,346)			1,482,730			(102,300)			1,422,055
Provision (reversal) for loan losses- non-covered loans			(35)			-			171,161			-			171,126
Provision (reversal) for loan losses- covered loans			-			-			(1,110)			-			(1,110)
Net interest income (expense)
	after provision for loan losses		52,006			(10,346)			1,312,679			(102,300)			1,252,039
Service charges on deposit accounts			-			-			160,836			-			160,836
Other service fees			-			-			237,342			(2,572)			234,770
Mortgage banking activities			-			-			56,538			-			56,538
Net gain on sale of debt securities			-			-			38			-			38
Othe-than-temporary impairment losses
	on debt securities		-			-			(209)			-			(209)
Net gain on equity securities			1,767			-			157			-			1,924
Net profit (loss) on trading account debt securities			90			-			(831)			(44)			(785)
Net gain on sale of loans, including valuation
	adjustments on loans held-for-sale		-			-			8,245			-			8,245
Adjustments (expense) to indemnity reserves
	on loans sold		-			-			(17,285)			-			(17,285)
FDIC loss-share expense			-			-			(207,779)			-			(207,779)
Other operating income (loss)			12,352			(2,559)			51,903			(53)			61,643
	Total non-interest income (loss)		14,209			(2,559)			288,955			(2,669)			297,936
Operating expenses:
Personnel costs			48,032			-			429,363			-			477,395
Net occupancy expenses			3,630			-			82,023			-			85,653
Equipment expenses			2,807			-			59,418			-			62,225
Other taxes			187			1			42,116			-			42,304
Professional fees			10,817			122			312,517			(413)			323,043
Communications			520			-			23,377			-			23,897
Business promotion			2,261			-			50,753			-			53,014
FDIC deposit insurance			-			-			24,512			-			24,512
Other real estate owned (OREO) expenses			52			-			47,067			-			47,119
Other operating expenses			(72,514)			60			175,147			(2,165)			100,528
Amortization of intangibles			-			-			12,144			-			12,144
Goodwill impairment charge			-			-			3,801			-			3,801
	Total operating expenses		(4,208)			183			1,262,238			(2,578)			1,255,635
Income (loss) before income tax and
	equity in earnings of subsidiaries		70,423			(13,088)			339,396			(102,391)			294,340
Income tax expense (benefit)			19			(4,581)			83,364			(18)			78,784
Income (loss) before equity in
	earnings of subsidiaries		70,404			(8,507)			256,032			(102,373)			215,556
Equity in undistributed earnings
	of subsidiaries		145,152			41,574			-			(186,726)			-
Income from continuing operations			215,556		$	33,067			256,032			(289,099)			215,556
Income from discontinued operations, net of tax			-			-			1,135			-			1,135
Equity in undistributed earnings of
	discontinued operations		1,135			1,135			-			(2,270)			-
Net Income		$	216,691		$	34,202		$	257,167		$	(291,369)		$	216,691
Comprehensive income, net of tax		$	153,291	$		20,108		$	195,118		$	(215,226)		$	153,291

Condensed Consolidating Statement of Cash Flows

						Year ended December 31, 2018
										All other
						Popular, Inc.		PNA		subsidiaries		Elimination		Popular, Inc.
(In thousands)						Holding Co.		Holding Co.		and eliminations		entries		Consolidated

Cash flows from operating activities:

Net income					$	618,158	$	57,204	$	673,763	$	(730,967)	$	618,158

Adjustments to reconcile net income to net
	cash provided by (used in) operating activities:
	Equity in earnings of subsidiaries,
		net of dividends or distributions				(208,763)		(69,027)		-		277,790		-
	Provision (reversal) for loan losses					(251)		-		228,323		-		228,072
	Amortization of intangibles					41		-		9,285		-		9,326
	Depreciation and amortization of premises and
		equipment				743		-		52,557		-		53,300
	Net accretion of discounts and amortization
		of premiums and deferred fees				2,022		27		(89,203)		-		(87,154)
	Share-based compensation					7,441		-		3,080		-		10,521
	Impairment losses on long-lived assets					-		-		272		-		272
	Fair value adjustments on mortgage servicing rights					-		-		8,477		-		8,477
	FDIC loss-share income					-		-		(94,725)		-		(94,725)
	Adjustments to indemnity reserves on
		loans sold				-		-		12,959		-		12,959
	Earnings from investments under the
		equity method, net of dividends or distributions				(14,333)		(737)		(9,147)		-		(24,217)
	Deferred income tax expense (benefit)					-		1,531		(13,888)		37		(12,320)
	Loss (gain) on:
			Disposition of premises and equipment and other
				productive assets		22		-		15,962		-		15,984
			Proceeds from insurance claims			-		-		(20,147)		-		(20,147)
			Early extinguishment of debt			12,522		-		-		-		12,522
			Sale of loans, including valuation adjustments on
				loans held for sale and mortgage banking activities		-		-		(9,681)		-		(9,681)
			Sale of foreclosed assets, including write-downs			-		-		6,833		-		6,833
	Acquisitions of loans held-for-sale					-		-		(232,264)		-		(232,264)
	Proceeds from sale of loans held-for-sale					-		-		66,687		-		66,687
	Net originations on loans held-for-sale					-		-		(254,582)		-		(254,582)
	Net decrease (increase) in:
			Trading securities			-		-		458,548		(101)		458,447
			Equity securities			(1,583)		-		(39)		-		(1,622)
			Accrued income receivable			85		(4)		49,273		(66)		49,288
			Other assets			(506)		(83)		264,482		948		264,841
	Net (decrease) increase in:
			Interest payable			(10,288)		(1,891)		2,327		66		(9,786)
			Pension and other postretirement benefits
				obligations		-		-		4,558		-		4,558
			Other liabilities			8,059		(99)		(233,160)		(1,044)		(226,244)
Total adjustments						(204,789)		(70,283)		226,787		277,630		229,345
Net cash provided by (used in) operating activities						413,369		(13,079)		900,550		(453,337)		847,503

Cash flows from investing activities:
	Net decrease (increase) in money market investments					70,000		(12,481)		1,083,515		(57,519)		1,083,515
	Purchases of investment securities:
			Available-for-sale			-		-		(10,050,165)		-		(10,050,165)
			Equity			-		-		(13,208)		140		(13,068)
	Proceeds from calls, paydowns, maturities and
		redemptions of investment securities:
			Available-for-sale			-		-		6,946,209		-		6,946,209
			Held-to-maturity			-		1,637		5,643		-		7,280
	Proceeds from sale of investment securities:
			Equity			-		-		24,209		-		24,209
	Net repayments (disbursements) on loans					536		-		(7,201)		-		(6,665)
	Proceeds from sale of loans					-		-		29,669		-		29,669
	Acquisition of loan portfolios					-		-		(601,550)		-		(601,550)
	Net payments (to) from FDIC under loss-sharing
		agreements				-		-		(25,012)		-		(25,012)
	Payments to acquire businesses, net of cash acquired					-		-		(1,843,333)		-		(1,843,333)
	Return of capital from equity method investments					-		5,963		(1,873)		-		4,090
	Capital contribution to subsidiary					(87,000)		-		-		87,000		-
	Return of capital from wholly-owned subsidiaries					13,000		-		-		(13,000)		-
	Acquisition of premises and equipment					(1,099)		-		(79,450)		-		(80,549)
	Proceeds from insurance claims					-		-		20,147		-		20,147
	Proceeds from sale of:
			Premises and equipment and other productive assets			293		-		8,892		-		9,185
			Foreclosed assets			-		-		105,371		-		105,371
Net cash used in investing activities						(4,270)		(4,881)		(4,398,137)		16,621		(4,390,667)

Cash flows from financing activities:
	Net increase (decrease) in:
			Deposits			-		-		4,221,975		37,676		4,259,651
			Assets sold under agreements to repurchase			-		-		(109,391)		-		(109,391)
			Other short-term borrowings			-		-		(96,167)		-		(96,167)
	Payments of notes payable					(448,518)		(54,502)		(252,946)		-		(755,966)
	Payments of debt extinguishment					(12,522)		-		-		-		(12,522)
	Proceeds from issuance of notes payable					293,819		-		180,000		-		473,819
	Proceeds from issuance of common stock					11,653		-		(4,385)		-		7,268
	Dividends paid to parent company					-		-		(453,200)		453,200		-
	Dividends paid					(105,441)		-		-		-		(105,441)
	Net payments for repurchase of common stock					(125,731)		-		471		(4)		(125,264)
	Return of capital to parent company					-		-		(13,000)		13,000		-
	Capital contribution from parent					-		72,000		15,000		(87,000)		-
	Payments related to tax withholding for
		share-based compensation				(2,201)		-		-		-		(2,201)
Net cash (used in) provided by financing activities						(388,941)		17,498		3,488,357		416,872		3,533,786
Net increase (decrease) in cash and due from banks, and restricted cash						20,158		(462)		(9,230)		(19,844)		(9,378)
Cash and due from banks, and restricted cash at beginning of period						48,120		462		412,225		(48,178)		412,629
Cash and due from banks, and restricted cash at end of period					$	68,278	$	-	$	402,995	$	(68,022)	$	403,251

Condensed Consolidating Statement of Cash Flows

						Year ended December 31, 2017
										All other
						Popular, Inc.		PNA		subsidiaries		Elimination		Popular, Inc.
(In thousands)						Holding Co.		Holding Co.		and eliminations		entries		Consolidated

Cash flows from operating activities:

Net income					$	107,681	$	(154,658)	$	139,570	$	15,088	$	107,681

Adjustments to reconcile net income to net cash
		provided by (used in) operating activities:
	Equity in earnings of subsidiaries,
		net of dividends or distributions				69,070		153,944		-		(223,014)		-
	Provision for loan losses					403		-		325,021		-		325,424
	Amortization of intangibles					-		-		9,378		-		9,378
	Depreciation and amortization of premises and
		equipment				649		-		47,715		-		48,364
	Net accretion of discounts and amortization
		of premiums and deferred fees				2,086		27		(24,423)		-		(22,310)
	Impairment losses on long-lived assets					-		-		4,784		-		4,784
	Other-than-temporary impairment on debt securities					-		-		8,299		-		8,299
	Fair value adjustments on mortgage servicing rights					-		-		36,519		-		36,519
	FDIC loss-share expense					-		-		10,066		-		10,066
	Adjustments (expense) to indemnity reserves on
		loans sold				-		-		22,377		-		22,377
	Earnings from investments under the
		equity method, net of dividends or distributions				(7,765)		(921)		(9,561)		-		(18,247)
	Deferred income tax (benefit) expense					-		(8,382)		215,864		(54)		207,428
	(Gain) loss on:
			Disposition of premises and equipment and
				other productive assets		(8)		-		4,289		-		4,281
			Sale and valuation adjustments of debt
				securities		-		-		(83)		-		(83)
			Sale of loans, including valuation adjustments on
				loans held for sale and mortgage banking activities		-		-		(16,670)		-		(16,670)
			Sale of foreclosed assets, including write-downs			42		-		21,673		-		21,715
	Acquisitions of loans held-for-sale					-		-		(244,385)		-		(244,385)
	Proceeds from sale of loans held-for-sale					-		-		69,464		-		69,464
	Net originations on loans held-for-sale					-		-		(315,522)		-		(315,522)
	Net decrease (increase) in:
			Trading debt securities			-		-		503,108		-		503,108
			Equity securities			(1,346)		-		108		(31)		(1,269)
			Accrued income receivable			(748)		26		(75,201)		121		(75,802)
			Other assets			8,761		-		(76,727)		2,122		(65,844)
	Net increase (decrease) in:
			Interest payable			-		-		2,670		(121)		2,549
			Pension and other postretirement benefits
				obligations		-		-		(13,100)		-		(13,100)
			Other liabilities			3,230		(758)		25,466		341		28,279
Total adjustments						74,374		143,936		531,129		(220,636)		528,803
Net cash provided by (used in) operating activities						182,055		(10,722)		670,699		(205,548)		636,484

Cash flows from investing activities:
	Net decrease (increase) in money market investments					6,000		10,455		(2,365,132)		(18,255)		(2,366,932)
	Purchases of investment securities:
			Available-for-sale			-		-		(4,139,650)		-		(4,139,650)
			Equity			-		-		(29,672)		-		(29,672)
	Proceeds from calls, paydowns, maturities and
		redemptions of investment securities:
			Available-for-sale			-		-		2,023,295		-		2,023,295
			Held-to-maturity			-		-		6,232		-		6,232
	Proceeds from sale of investment securities:
			Available for sale			-		-		14,423		-		14,423
			Equity			-		-		30,250		-		30,250
	Net repayments (disbursements) on loans					181		-		(398,857)		-		(398,676)
	Proceeds from sale of loans					-		-		38,279		(37,864)		415
	Acquisition of loan portfolios					(31,909)		-		(541,489)		37,864		(535,534)
	Acquisition of trademark					(5,560)		-		5,560		-		-
	Net payments (to) from FDIC under loss-sharing
		agreements				-		-		(7,679)		-		(7,679)
	Return of capital from equity method investments					-		138		8,056		-		8,194
	Capital contribution to subsidiary					(5,955)		-		5,955		-		-
	Return of capital from wholly-owned subsidiaries					22,400		10,400		-		(32,800)		-
	Acquisition of premises and equipment					(965)		-		(61,732)		-		(62,697)
	Proceeds from sale of:
			Premises and equipment and other productive assets			23		-		9,730		-		9,753
			Foreclosed assets			38		-		96,502		-		96,540
Net cash (used in) provided by investing activities						(15,747)		20,993		(5,305,929)		(51,055)		(5,351,738)

Cash flows from financing activities:
	Net increase (decrease) in:
			Deposits			-		-		4,935,948		18,157		4,954,105
			Assets sold under agreements to repurchase			-		-		(88,505)		-		(88,505)
			Other short-term borrowings			-		-		95,008		-		95,008
	Payments of notes payable					-		-		(95,607)		-		(95,607)
	Proceeds from issuance of notes payable					-		-		55,000		-		55,000
	Proceeds from issuance of common stock					7,016		-		-		-		7,016
	Dividends paid to parent company					-		-		(211,500)		211,500		-
	Dividends paid					(95,910)		-		-		-		(95,910)
	Net payments for repurchase of common stock					(75,668)		-		-		4		(75,664)
	Return of capital to parent company					-		(10,400)		(22,400)		32,800		-
	Capital contribution from parent					-		-		5,955		(5,955)		-
	Payments related to tax withholding for
		share-based compensation				(1,756)		-		-		-		(1,756)
Net cash (used in) provided by financing activities						(166,318)		(10,400)		4,673,899		256,506		4,753,687
Net (decrease) increase in cash and due from banks,
	and restricted cash					(10)		(129)		38,669		(97)		38,433
Cash and due from banks, and restricted cash at beginning
	of period					48,130		591		373,556		(48,081)		374,196
Cash and due from banks, and restricted cash
	at end of period				$	48,120	$	462	$	412,225	$	(48,178)	$	412,629

Condensed Consolidating Statement of Cash Flows

						Year ended December 31, 2016
										All other
						Popular, Inc.		PNA		subsidiaries		Elimination		Popular, Inc.
(In thousands)						Holding Co.		Holding Co.		and eliminations		entries		Consolidated

Cash flows from operating activities:

Net income					$	216,691	$	34,202	$	257,167	$	(291,369)	$	216,691

Adjustments to reconcile net income to net
		cash provided by (used in) operating activities:
	Equity in undistributed losses of subsidiaries,
		net of dividends or distributions				(146,287)		(42,709)		-		188,996		-
	Provision (reversal) for loan losses					(35)		-		170,051		-		170,016
	Goodwill impairment losses					-		-		3,801		-		3,801
	Amortization of intangibles					-		-		12,144		-		12,144
	Depreciation and amortization of premises and
		equipment				654		-		46,220		-		46,874
	Net accretion of discounts and amortization
		of premiums and deferred fees				2,087		28		(42,901)		-		(40,786)
	Other-than-temporary impairment on debt securities					-		-		209		-		209
	Fair value adjustments on mortgage servicing rights					-		-		25,336		-		25,336
	FDIC loss share expense					-		-		207,779		-		207,779
	Adjustments (expense) to indemnity reserves on
		loans sold				-		-		17,285		-		17,285
	(Earnings) losses from investments under the
		equity method, net of dividends or distributions				(7,572)		2,559		(9,392)		-		(14,405)
	Deferred income tax expense (benefit)					19		(4,581)		66,154		(18)		61,574
	(Gain) loss on:
			Disposition of premises and equipment
				and other productive assets		(2)		-		4,096		-		4,094
			Sale and valuation adjustments of debt securities			-		-		(39)		-		(39)
			Sale of loans, including valuation adjustments on
				loans held for sale and mortgage banking activities		-		-		(35,517)		-		(35,517)
			Sale of foreclosed assets, including write-downs			52		-		19,305		-		19,357
	Acquisitions of loans held-for-sale					-		-		(310,217)		-		(310,217)
	Proceeds from sale of loans held-for-sale					-		-		89,887		-		89,887
	Net originations on loans held-for-sale					-		-		(510,783)		-		(510,783)
	Net decrease (increase) in:
			Trading debt securities			-		-		754,478		-		754,478
			Equity securities			(524)		-		8,878		133		8,487
			Accrued income receivable			(27)		(23)		(13,812)		54		(13,808)
			Other assets			(867)		(3)		(43,288)		(2,972)		(47,130)
	Net increase (decrease) in:
			Interest payable			-		-		219		(54)		165
			Pension and other postretirement benefits
				obligations		-		-		(55,678)		-		(55,678)
			Other liabilities			(3,854)		(624)		(11,781)		3,018		(13,241)
Total adjustments						(156,356)		(45,353)		392,434		189,157		379,882
Net cash provided by (used in) operating activities						60,335		(11,151)		649,601		(102,212)		596,573

Cash flows from investing activities:
	Net increase (decrease) in money market investments					10,008		10,668		(715,346)		(18,868)		(713,538)
	Purchases of investment securities:
			Available-for-sale			-		-		(3,407,779)		-		(3,407,779)
			Equity			-		-		(14,130)		-		(14,130)
	Proceeds from calls, paydowns, maturities and
		redemptions of investment securities:
			Available-for-sale			-		-		1,227,966		-		1,227,966
			Held-to-maturity			-		-		4,588		-		4,588
			Equity			-		-		9,539		-		9,539
	Proceeds from sale of investment securities:
			Available-for-sale			-		-		4,815		-		4,815
	Net repayments (disbursements) on loans					35		-		(267,240)		-		(267,205)
	Proceeds from sale of loans					-		-		141,363		-		141,363
	Acquisition of loan portfolios					-		-		(535,445)		-		(535,445)
	Net payments (to) from FDIC under loss-sharing
		agreements				-		-		98,518		-		98,518
	Return of capital from equity method investments					315		474		4,059		-		4,848
	Return of capital from wholly-owned subsidiaries					14,000		-		-		(14,000)		-
	Acquisition of premises and equipment					(953)		-		(99,367)		-		(100,320)
	Proceeds from sale of:
			Premises and equipment and other productive assets			56		-		8,841		-		8,897
			Foreclosed assets			434		-		82,923		-		83,357
Net cash provided by (used in) investing activities						23,895		11,142		(3,456,695)		(32,868)		(3,454,526)

Cash flows from financing activities:
	Net increase (decrease) in:
			Deposits			-		-		3,290,797		(4,369)		3,286,428
			Assets sold under agreements to repurchase			-		-		(282,719)		-		(282,719)
	Payments of notes payable					-		-		(254,816)		-		(254,816)
	Proceeds from issuance of notes payable					-		-		165,047		-		165,047
	Proceeds from issuance of common stock					7,437		-		-		-		7,437
	Dividends paid to parent company					-		-		(102,300)		102,300		-
	Dividends paid					(65,932)		-		-		-		(65,932)
	Net payments for repurchase of common stock					(475)		-		-		(88)		(563)
	Return of capital to parent company					-		-		(14,000)		14,000		-
	Payments related to tax withholding for
		share-based compensation				(1,623)		-		-		-		(1,623)
Net cash (used in) provided by financing activities						(60,593)		-		2,802,009		111,843		2,853,259
Net increase (decrease) in cash and due from banks,
	and restricted cash					23,637		(9)		(5,085)		(23,237)		(4,694)
Cash and due from banks, and restricted cash at beginning
	of period					24,493		600		378,641		(24,844)		378,890
Cash and due from banks, and restricted cash at end of period					$	48,130	$	591	$	373,556	$	(48,081)	$	374,196
The Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2016 includes the cash flows from operating, investing and financing activities associated with discontinued operations.