8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 19, 2012

POPULAR, INC.

(Exact name of registrant as specified in its charter)

Puerto Rico	001-34084	66-0667416
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification Number)
209 Munoz Rivera Avenue Hato Rey, Puerto Rico		00918
(Address of principal executive offices)		(Zip code)

(787) 765-9800

(Registrant’s telephone number, including area code)

NOT APPLICABLE

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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

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

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

Item 7.01. Regulation FD Disclosure

Popular, Inc. is furnishing information regarding its conference call to discuss its financial results for the quarter ended September 30, 2012. A copy of the presentation to be used by Popular, Inc. on the conference call is attached hereto as Exhibit 99.1.

Popular, Inc. does not intend for this Item 7.01 or Exhibit 99.1 to be treated as “filed” under the Securities Exchange Act of 1934, as amended, or incorporated by reference into its filings under the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits

The following exhibit shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended.

Exhibit 99.1-Popular, Inc. Conference Call Presentation – Third Quarter 2012 Financial Results

SIGNATURE

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

		POPULAR, INC.
		(Registrant)
Date: October 19, 2012	By:	/s/ Jorge J. García
		Jorge J. García Senior Vice President and Corporate Comptroller

EX-99.1

Financial Results

Financial Results

Third Quarter 2012

Third Quarter 2012

Exhibit 99.1

Forward Looking Statements

The information contained in this presentation includes forward-looking statements within the meaning of the Private

Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations

and

involve

risks

and

uncertainties

that

may

cause

the

Company's

actual

results

to

differ

materially

from

any

future

results

expressed or implied by such forward-looking statements. Factors that may cause such a difference include, but are not

limited to (i) the rate of 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; (ix) the impact of the Dodd-

Frank Act on our businesses, business practice and cost of operations; and (x) additional Federal Deposit Insurance

Corporation assessments. Other than to the extent required by applicable law,  the Company undertakes no obligation to

publicly update or revise any forward-looking statement. Please refer to our Annual Report on Form 10-K for the year ended

December 31, 2011 and other SEC reports for a discussion of those factors that could impact our future results. The financial

information included in this presentation for the quarter ended September 30, 2012 is based on preliminary unaudited data

and is subject to change.

1

Highlights Q3 2012

2

Capital

Earnings

•

Net income totaled $47 million

•

Net interest margin of 4.37%; BPPR margin of 5.11%

•

Reaffirming 2012 net income guidance range of $210 million to $225

million

•

Non performing loans held for sale declined by $70 million from Q2;

down $151 million YoY

•

Non performing assets declined by $57 million from Q2; down $256

million YoY

•

Net charge offs declined for the fourth consecutive quarter to $96

million; lowest since Q1 2008

•

Strong capital ratios: Common Equity Tier One ratio at 12.72%

•

Well positioned to exceed current and proposed Basel III capital

requirements

•

Tangible Book Value/Share at September 30, 2012: $32.15

Credit             

(excluding covered loans)

Key Areas of Shareholder Focus

•

Reducing non-performing loans

Total NPLs held in portfolio down $187 million YTD

Mortgage:

–

Approximately 200 modifications per month in Puerto Rico mortgage portfolio,

of which more than 75% percent are performing a year after

Commercial & Construction:

–

NPL HFS declined to $106 million from $472 million Q4 2010 

–

Total NPL reduction of $260 million YTD

–

Continue to actively pursue loan sales that make economic sense

•

TARP repayment framework

No contractual maturity and no US Treasury “call”

Rate reset is not a consideration

–

December 2013 reset will have no material cost impact on earnings, as the

effective

interest

expense

is

approximately

9%

of

the

par

value

of

$935

million

We will repay at appropriate time with least possible dilution

–

Could be series of partial payments, lump-sum or a secondary market

transaction by the US Treasury

3

Credit

TARP

Fundamental Strengths

4

Puerto Rico

Franchise

Strong Capital

Base

Additional

Sources of

Value

EVERTEC: Book value of $62 million on 49% ownership; Adjusted EBITDA  

of $79.4 million for the first 6 months of 2012

BHD: Book value of $73 million on 20% ownership; approximately $100 

million of net income in 2011

Covered loan portfolio: Westernbank transaction is treated as runoff 

portfolio with no value ascribed to more than 100,000 new customer 

relationships

Financial

Results

(Unaudited)

5

In thousands, except per share amount

Q3 2012

Q2 2012

Variance

Net interest income

$343,426

$341,200

$2,226

Service fees & other oper. income

114,840

119,576

(4,736)

Gain (loss)  on sale of investments, loans & trading

7,576

(28,427)

36,003

Total revenues before FDIC income

465,842

432,349

33,493

FDIC loss-share (expense) income

(6,707)

2,575

(9,282)

Gross revenues

459,135

434,924

24,211

Provision for loan losses

(excluding covered loans)

83,589

81,743

1,846

Provision for loan losses

(covered WB loans)

22,619

37,456

(14,837)

Net revenues

352,927

315,725

37,202

Personnel costs

111,550

116,336

(4,786)

Other operating expenses

178,805

211,543

(32,738)

Total operating expenses

290,355

327,879

(37,524)

Income (loss) before tax

62,572

(12,154)

74,726

Income tax expense (benefit)

15,384

(77,893)

93,277

Net income

$47,188

$65,739

($18,551)

EPS

$0.45

$0.63

($0.18)

NIM

4.37%

4.33%

0.04%

Tangible book value per share (quarter end)

$32.15

$31.74

$0.41

Market price (quarter end)

$17.45

$16.61

$0.84

Capital

6

•

Ended Q3 at 12.72% CET1 with $1.8 billion excess capital over well capitalized threshold

•

Proposed

Basel

III

regulations

will

reduce

the

rate

of

growth

of

our

excess

regulatory

capital,

but

a

dynamic

simulation shows it should remain above the current excess level

•

Simulation assumptions: net income: $200 million annually in 2013-2015; no change in assets or NPLs; no

dividends; capital rules implemented as proposed in NPRs

16.8%

0.0%

5.0%

10.0%

15.0%

20.0%

Q3 2012

Q2 2013

Q1 2014

Q4 2014

Q3 2015

Projected Tier 1

Tier 1

Well Capitalized

12.7%

0.0%

5.0%

10.0%

15.0%

20.0%

Q3 2012

Q2 2013

Q1 2014

Q4 2014

Q3 2015

Projected Common Equity  Tier 1

Common Equity Tier 1

Well Capitalized

18.1%

0.0%

5.0%

10.0%

15.0%

20.0%

Q3 2012

Q2 2013

Q1 2014

Q4 2014

Q3 2015

Projected Total Capital

Total

Well Capitalized

$0

$1,000

$2,000

$3,000

$4,000

Q3 2012

Q2 2013

Q1 2014

Q4 2014

Q3 2015

Projected Excess Capital Over "Well

Capitalized"

Common Equity Tier 1

Tier 1

Total

Q3 2012 Excess

7

Consolidated Credit Summary (Excluding Covered Loans)

Continued improvement in key credit quality

metrics:

•

Non performing loans held for sale

declined by $70 million from Q2; down

$151 million YoY

•

Non performing assets declined by $57

million from Q2; down $256 million YoY

Non-Performing Loans ($M)

OREO and NPL HFS ($M)

*

The legacy portfolio is comprised of commercial loans, construction loans and lease

financings related to certain lending products exited by the Corporation as part of

restructuring efforts carried out in prior years at the BPNA reportable segment.

Loans ($ M)

Q3 12

Q2 12

Q3 12 v Q2

12

Q3 11

Q3 12 v Q3

11

Commercial

$9,629

$9,603

$26

$9,989

(360)

$        

Construction

258

250

9

253

5

Legacy *

466

510

(44)

723

(257)

Leases

538

538

0

553

(15)

Consumer 

3,840

3,866

(25)

3,689

151

Mortgage

6,022

5,900

122

5,467

556

Loans HFS

337

365

(27)

369

(32)

Total Loans

$21,091

$21,030

$61

$21,043

$48

$-

$500

$1,000

$1,500

$2,000

$2,500

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12

Commercial

Construction

Leases

Consumer

Mortgage

-

34%

$168

$161

$157

$162

$176

$172

$194

$227

$252

$672

$465

$400

$260

$262

$232

$179

$109

$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12

OREO

NPL HFS

-57%

($792M)

($472M)

Commercial & Construction NPL Inflows  ($M)

Credit Quality Overview (Excluding Covered Loans)

•

NCOs declined for the fourth consecutive

quarter to $96 million

•

NCO ratio under 2% for the second

consecutive quarter

•

Total commercial and construction NPL inflows

increased by $33 million driven by four

relationships

8

ALLL ($M) and ALLL-to-NCO Ratio

NCO  ($M) and NCO-to-HTM Loan  Ratio

NPL legacy portfolio and inflow included within construction and

commercial loan portfolio

$109

$136

$61

$79

$77

$77

$48

$45

$42

$149

$174

$133

$116

$223

$101

$93

$65

$101

$-

$50

$100

$150

$200

$250

$300

$350

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12

US Inflows

PR Inflows

-

45%

($115M)

$139

$133

$135

$126

$108

$98

$96

2.74%

2.59%

2.64%

2.45%

2.13%

1.93%

1.87%

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12

NCO

NCO%

$727

$690

$693

$690

$665

$649

$636

130%

129%

128%

137%

154%

165%

166%

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12

ALLL

ALLL/NCO

Credit Quality Overview (Excluding Covered Loans)

9

Provision increased slightly to $84

million

PR provision increased by $3.3

million driven by higher net

charge-offs in the commercial

loan portfolio

US provision decreased by $1.4

million

Provision ($M) and Provision-to-NCO Ratio

ALLL-to-Loans and ALLL-to-NPL Ratios

3.4%

3.4%

3.2%

3.1%

3.1%

40%

40%

40%

41%

41%

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12

ALLL/Loans

ALLL/NPLs

$151

$124

$83

$82

$84

111%

98%

76%

83%

87%

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12

PLL

PLL/NCO

Provision to net charge-off ratio

increased slightly to 87% driven

by a slight increase in the US

ALLL/Loans and ALLL/NPL ratios

remained relatively flat

PR remained flat at 98.4%

Taking actions to leverage strengths and drive value

10

•

Premier Puerto Rico franchise

•

Capital ratios well in excess of regulatory

requirements

•

Additional sources of value

•

Continue to reduce non-performing assets

•

Continue efficiency efforts

•

Repay TARP at appropriate time with least

possible dilution

•

Grow assets when justified by risk profile and

returns

Actions to

Drive Value

Strengths

Appendix

Appendix

12

P.R. Economic Overview

•

11.5% increase of real gross domestic investment in FY

2010-11 marks largest increase in more than a decade

•

Housing Stimulus: $235 million (extended through

12/31/12)

•

Public/Private Partnerships (PPPs): $2.6B Airport, $1.4

billion toll roads, $878 million schools

•

Unemployment rate for August 13.5%; lowest level since

January 2009

Average total employment is up 1.6%; 10

th

consecutive month of YoY growth

•

Hotel registration of non-residents registered highest

occupancy rates in the last few years

GDP –

Composition by sector

Recent Trends

•

Official forecast calls for first positive GNP growth since 2005. Forecast is +0.9% (fiscal 2012) and  +1.1% (fiscal

2013)

•

In

the

last

several

quarters,

indicators

such

as

retail

and

auto

sales,

home

sales,

cement

sales

and

sales

&

use

tax, among others show stabilization

Source: Government Development Bank of PR bgfpr.com, PR Finance

Housing Authority,  PR commissioner of  Financial Institutions

2011 GDP-

$98.8B

PR Labor Market

2012 Monthly average

up until August

46.4%

13.3%

12.5%

8.6%

8.0%

6.0%

2.9%

1.7%

0.6%

Manufacturing

Finance, insurance and real

estate

Services

Government

Trade

Tourism

Transportation and other

public utilities

Construction and Mining

Agriculture

500,000

500,000

700,000

700,000

900,000

900,000

1,100,000

1,100,000

1,300,000

1,300,000

1,500,000

1,500,000

-

5.00

5.00

10.00

10.00

15.00

15.00

20.00

20.00

2002

2002

2004

2004

2006

2006

2008

2008

2010

2010

2012

2012

Employment PR

Labor Force

PR U Rate

US U Rate

Who We Are –

Popular, Inc. 

Franchise

•

Financial services company

•

Headquartered in San Juan, Puerto Rico

•

$37 billion in assets (top 50 bank holding

company in the U.S.)

•

$24 billion in total loans

•

$26 billion in total deposits

•

279

branches

serving

customers

in

Puerto

Rico,

New

York,

California,

Florida,

Illinois,

U.S.

Virgin

Islands,

and

New

Jersey

•

NASDAQ ticker symbol: BPOP

•

Market Cap: $1.8 billion

Source: Company filings, SNL Financial

Note: Financial data as of September 30, 2012

1

As of September 30, 2012

Summary Corporate Structure

Assets = $36.5 bn

Popular

Mortgage,

Inc.

Popular Auto,

Inc.

Banco Popular

de Puerto Rico

Popular

Securities, Inc.

Assets = $28.0bn

Assets = $8.6 bn

Banco Popular

North America

Puerto Rico operations

Selected

equity

investments

(first

two

under

“corporate”

segment

and

third

under

PR):

Popular

Insurance, Inc.

Popular North

America, Inc.

U.S. banking operations

Transaction processing,

business processes outsourcing

48.5% stake

Adjusted EBITDA  of $79.4

million for the first 6 months of

2012

Dominican

Republic bank

19.99% stake

2011 approximate

income $100

million

PRLP 2011 Holdings

Construction and

commercial loans

vehicle

24.9% stake

13

1

P.R. Franchise Value Built Over 119 Years

Category

Market Position as of

Q2 2012

Market Share

as of  Q2 2012

Top Competitor

Institution/Group

Share

Total Deposits (Net of Brokered)

1

38%

Santander

11%

Total Loans

1

35%

FirstBank

16%

Commercial & Construction Loans

1

40%

FirstBank

21%

Credit Cards

1

45%

MBNA

15%

Mortgage Loan Production

1

33%

Scotiabank

13%

Personal Loans

1

35%

FirstBank

5%

Auto Loans/Leases

3

16%

Reliable

26%

Assets Under Management

3

13%

UBS

47%

•

Indisputable, sustained market leadership

Market

Share

Trend

(2002 –

2012)

14

Source:  Puerto Rico Office of the Commissioner of Financial Institutions & 10K reports

with a 12% market share (49.78% in personal loans; market share 50%).

1

1

1

0%

10%

20%

30%

40%

50%

Total Deposits (Net of Brokered)

Total Loans

Source:  Puerto Rico Office of the Commissioner

of Financial Institutions

Credit Unions:  A total of 115  credit unions were in business as of June 30, 2012, guaranteed by the (COSSEC). Total loans $4.3 billion

PR  & US Business

15

1

Excludes covered loans

$ in millions (Unaudited)

Q3 12

Q2 12

Variance

Q3 12

Q2 12

Variance

Net Interest Income

$300

$298

$2

$70

$70

($0)

Non Interest Income

114

85

29

11

15

(4)

Gross Revenues

414

383

31

81

85

(4)

Provision (non-covered)

69

66

3

14

15

(1)

Provision (covered WB)

23

38

(15)

-

-

-

Provision for loan losses

92

104

(12)

14

15

(1)

Expenses

232

267

(35)

57

58

(1)

Tax Expense

17

(74)

91

1

1

0

Net Income

$73

$86

($13)

$9

$11

($2)

NPLs  (HTM) ¹

$1,284

$1,276

$8

$266

$286

($20)

NPLs  (HTM + HFS) ¹

1,387

1,453

(66)

272

288

(16)

Loan loss reserve ¹

445

447

(2)

191

202

(11)

Assets

$27,683

$27,721

($38)

$8,573

$8,644

($71)

Loans  (HTM)

18,948

18,932

16

5,710

5,750

(40)

Loans  (HTM + HFS)

19,277

19,293

(16)

5,718

5,754

(36)

Deposits

20,351

21,304

(953)

6,029

6,175

(146)

NIM

5.11%

5.07%

0.04%

3.55%

3.57%

(0.02%)

PR

US

16

Consolidated Credit Summary (Excluding  Covered Loans)

$ in millions

Q3 12

Q2 12

%

Q3 11

%

Loans Held to Maturity (HTM)

$20,754

$20,666

$88

0.4%

$20,674

$80

0.4%

Performing HFS

228

186

42

22.6%

109

119

109.2%

NPL HFS

109

179

(70)

-39.1%

260

(151)

-58.1%

Total Non Covered Loans

21,091

21,031

$60

0.3%

21,043

$48

0.2%

Non-performing loans (NPLs)

$1,551

$1,563

($12)

-0.8%

$1,732

($182)

-10.5%

Commercial

$772

$768

$4

0.5%

$834

($62)

-7.4%

Construction

$50

$68

($18)

-26.5%

$123

($73)

-59.3%

Legacy

$49

$55

($6)

-10.5%

$104

($55)

-52.9%

Mortgage

$632

$633

($1)

-0.1%

$618

$14

2.3%

Consumer

$48

$40

$8

20.9%

$53

($5)

-9.4%

NPLs HTM to loans HTM

7.47%

7.56%

-0.1%

-1.1%

8.38%

-0.90%

-10.8%

Net charge-offs (NCOs)

$96

$98

($2)

-2.0%

$135

($39)

-29.0%

Commercial

$47

$40

$7

17.5%

$76

($29)

-37.9%

Construction

($1)

$1

($2)

NM

$1

($2)

NM

Legacy

$4

$5

($1)

-20.0%

$9

($5)

-55.0%

Mortgage

$16

$18

($2)

-11.1%

$14

$2

14.3%

Consumer

$30

$34

($4)

-11.8%

$37

($7)

-18.9%

NCOs to average loans HTM

1.87%

1.93%

-0.1%

-3.1%

2.64%

-0.8%

-29.2%

Provision for loan losses (PLL)

$84

$82

$2

2.3%

$151

($67)

-44.5%

PLL to total loans HTM

1.61%

1.58%

0.0%

1.9%

2.92%

-1.3%

-44.9%

PLL to NCOs

0.87x

0.83x

0.04x

4.4%

1.11x

-0.24x

-21.9%

Allowance for loan losses (ALL)

$636

$649

($12)

-1.9%

$693

($57)

-8.2%

ALL to loans

(excl. LHFS)

3.07%

3.14%

-0.1%

-2.2%

3.35%

-0.3%

-8.4%

ALL to NPLs HTM

41.04%

41.50%

-0.5%

-1.1%

39.99%

1.1%

2.6%

Q3 12 vs Q2 12

Q3 12 vs Q3 11

Credit Ratings Update

•

Our senior unsecured ratings have been gradually improving since

2010:

Moody’s:

Ba1

Negative Watch

S&P:

B+

Stable Outlook

Fitch:

B+

Positive Outlook

•

July 2011: S&P raised our senior unsecured rating by one notch to B+

•

December 2011: S&P raised its ratings on BPPR to BB from BB-

and changed

outlook to stable given revised bank criteria to Regional banks

•

January 2012:  Fitch raised BPOPs outlook to positive

•

April 2012: Moody’s placing most of the PR banks under review with the

possibility of downgrades, due to the state of the Puerto Rico economy

•

As the P.R. economy stabilizes and our credit metrics improve, we should see

upward pressure on the ratings

17

Financial Results

Financial Results

Third Quarter 2012

Third Quarter 2012