Covered loans acquired in the Westernbank FDIC-assisted transaction, except for lines of credit with revolving privileges, are accounted for by the Corporation in accordance with ASC Subtopic 310-30. Under ASC Subtopic 310-30, the acquired loans were aggregated into pools based on similar characteristics. Each loan pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. The covered loans which are accounted for under ASC Subtopic 310-30 by the Corporation are not considered non-performing and will continue to have an accretable yield as long as there is a reasonable expectation about the timing and amount of cash flows expected to be collected. The Corporation measures additional losses for this portfolio when it is probable the Corporation will be unable to collect all cash flows expected at acquisition plus additional cash flows expected to be collected arising from changes in estimates after acquisition. Lines of credit with revolving privileges that were acquired as part of the Westernbank FDIC-assisted transaction are accounted for under the guidance of ASC Subtopic 310-20, which requires that any differences between the contractually required loan payment receivable in excess of the Corporation's initial investment in the loans be accreted into interest income. Loans accounted for under ASC Subtopic 310-20 are placed in non-accrual status when past due in accordance with the Corporation's non-accruing policy and any accretion of discount is discontinued.

The risks on loans acquired in the FDIC-assisted transaction are significantly different from the risks on loans not covered under the FDIC loss sharing agreements because of the loss protection provided by the FDIC. Accordingly, the Corporation presents loans subject to the loss sharing agreements as “covered loans” in the information below and loans that are not subject to the FDIC loss sharing agreements as “non-covered loans”. The FDIC loss sharing agreements expires at the end of the quarter ending June 30, 2015 for commercial (including construction) and consumer loans, and at the end of the quarter ending June 30, 2020 for to single-family residential mortgage loans, as explained in Note 11.

For a summary of the accounting policy related to loans, interest recognition and allowance for loan losses refer to the summary of significant accounting policies included in Note 2 to the consolidated financial statements included in 2013 Annual Report.

The following table presents the composition of non-covered loans held-in-portfolio (“HIP”), net of unearned income, at June 30, 2014 and December 31, 2013.


(In thousands)		June 30, 2014		December 31, 2013
Commercial multi-family		$	475,826	$	1,175,937
Commercial real estate non-owner occupied			2,501,036		2,970,505
Commercial real estate owner occupied			1,758,535		2,166,545
Commercial and industrial			3,420,150		3,724,197
Construction			179,059		206,084
Mortgage			6,664,448		6,681,476
Leasing			546,868		543,761
Legacy^[2]			162,941		211,135
Consumer:
	Credit cards		1,171,182		1,185,272
	Home equity lines of credit		388,667		478,211
	Personal		1,406,920		1,349,119
	Auto		745,579		699,980
	Other		214,013		219,644
Total loans held-in-portfolio^[1]		$	19,635,224	$	21,611,866

[1]	Non-covered loans held-in-portfolio at June 30, 2014 are net of $91 million in unearned income and exclude $97 million in loans held-for-sale (December 31, 2013 - $92 million in unearned income and $110 million in loans held-for-sale).

[2]	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 segment.

The following table presents the composition of covered loans at June 30, 2014 and December 31, 2013.


(In thousands)	June 30, 2014		December 31, 2013
Commercial real estate	$	1,638,634	$	1,710,229
Commercial and industrial		107,333		102,575
Construction		82,763		190,127
Mortgage		867,075		934,373
Consumer		40,297		47,123
Total loans held-in-portfolio	$	2,736,102	$	2,984,427

The following table provides a breakdown of loans held-for-sale (“LHFS”) at June 30, 2014 and December 31, 2013 by main categories.

(In thousands)	June 30, 2014 [1]		December 31, 2013
Commercial	$	2,895	$	603
Construction		949		-
Mortgage		93,166		109,823
Total loans held-for-sale	$	97,010	$	110,426
[1] Loans held-for-sale from discontinued operations are presented as part of "Assets from Discontinued Operations" in the Consolidated Statement of Condition. Refer to Note 3 to the consolidated financial statements for further information on the discontinued operations.

During the quarter and six months ended June 30, 2014, the Corporation recorded purchases (including repurchases) of mortgage loans amounting to $169 million and $331 million, respectively (June 30, 2013 - $0.4 billion and $1.5 billion, respectively). Also, the Corporation recorded purchases of $92 million in consumer loans during the six months ended June 30, 2014 (June 30, 2013 - $42 million). In addition, during the six months ended June 30, 2014, the Corporation recorded purchases of commercial loans amounting to $21 million (during the quarter and six months ended June 30, 2013 - $3 million).

The Corporation performed whole-loan sales involving approximately $27 million and $70 million of residential mortgage loans during the quarter and six months ended June 30, 2014, respectively (June 30, 2013 - $503 million and $553 million, respectively). These sales included $435 million from the bulk sale of non-performing mortgage loans, completed during the quarter ended June 30, 2013. Also, the Corporation securitized approximately $ 184 million and $ 350 million of mortgage loans into Government National Mortgage Association (“GNMA”) mortgage-backed securities during the quarter and six months ended June 30, 2014, respectively (June 30, 2013 - $ 282 million and $ 568 million, respectively). Furthermore, the Corporation securitized approximately $ 60 million and $ 123 million of mortgage loans into Federal National Mortgage Association (“FNMA”) mortgage-backed securities during the quarter and six months ended June 30, 2014, respectively (June 30, 2013 - $ 124 million and $ 252 million, respectively). Also, the Corporation did not securitize mortgage loans into Federal Home Loan Mortgage Corporation (“FHLMC”) mortgage-backed securities during the quarter and six months ended June 30, 2014 (during the quarter and six months ended June 30, 2013 - $ 27 million). The Corporation sold commercial and construction loans with a book value of approximately $30 million and $61 million during the quarter and six months ended June 30, 2014, respectively (June 30, 2013 - $6 million and $407 million, respectively). These sales included $401 million from the bulk sale of non-performing commercial and construction loans during the quarter ended March 31, 2013.

The following tables present non-covered loans held-in-portfolio by loan class that are in non-performing status or are accruing interest but are past due 90 days or more at June 30, 2014 and December 31, 2013. Accruing loans past due 90 days or more consist primarily of credit cards, FHA / VA and other insured mortgage loans, and delinquent mortgage loans which are included in the Corporation's financial statements pursuant to GNMA's buy-back option program. Servicers of loans underlying GNMA mortgage-backed securities must report as their own assets the defaulted loans that they have the option (but not the obligation) to repurchase, even when they elect not to exercise that option. Also, accruing loans past due 90 days or more include residential conventional loans purchased from another financial institution that, although delinquent, the Corporation has received timely payment from the seller / servicer, and, in some instances, have partial guarantees under recourse agreements. However, residential conventional loans purchased from another financial institution, which are in the process of foreclosure, are classified as non-performing mortgage loans.

At June 30, 2014
			Puerto Rico				U.S. mainland [4]				Popular, Inc.

				Accruing				Accruing				Accruing
		Non-accrual		loans past-due		Non-accrual		loans past-due			Non-accrual	loans past-due
(In thousands)		loans		90 days or more		loans		90 days or more			loans	90 days or more
Commercial multi-family		$	2,851	$	-	$	4,105	$	-	$	6,956	$	-
Commercial real estate non-owner occupied			56,406		-		11,857		-		68,263		-
Commercial real estate owner occupied			108,286		-		4,199		-		112,485		-
Commercial and industrial			86,009		417		4,420		-		90,429		417
Construction			21,456		-		-		-		21,456		-
Mortgage^[2][3]			262,356		399,300		23,964		-		286,320		399,300
Leasing			2,873		-		-		-		2,873		-
Legacy			-		-		8,323		-		8,323		-
Consumer:
	Credit cards		-		19,595		378		-		378		19,595
	Home equity lines of credit		-		467		7,221		-		7,221		467
	Personal		17,968		-		1,459		-		19,427		-
	Auto		11,703		-		-		-		11,703		-
	Other		3,898		454		3		-		3,901		454
Total^[1]		$	573,806	$	420,233	$	65,929	$	-	$	639,735	$	420,233

[1] For purposes of this table non-performing loans exclude $ 4 million in non-performing loans held-for-sale.

[2] Non-covered loans by $55 million accounted for under ASC Subtopic 310-30 are excluded from the above table as they are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analysis.

[3] It is the Corporation's policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to non-performing since the principal repayment is insured. These balances include $124 million of residential mortgage loans in Puerto Rico insured by FHA or guaranteed by the VA that are no longer accruing interest as of June 30, 2014. Furthermore, the Corporation has approximately $60 million in reverse mortgage loans in Puerto Rico which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation's policy to exclude these balances from non-performing assets.

At December 31, 2013
			Puerto Rico				U.S. mainland				Popular, Inc.

				Accruing				Accruing				Accruing
		Non-accrual		loans past-due		Non-accrual		loans past-due			Non-accrual	loans past-due
(In thousands)		loans		90 days or more		loans		90 days or more			loans	90 days or more
Commercial multi-family		$	4,944	$	-	$	20,894	$	-	$	25,838	$	-
Commercial real estate non-owner occupied			41,959		-		42,413		-		84,372		-
Commercial real estate owner occupied			83,441		-		23,507		-		106,948		-
Commercial and industrial			55,753		556		6,142		-		61,895		556
Construction			18,108		-		5,663		-		23,771		-
Mortgage^[2][3]			206,389		395,645		26,292		-		232,681		395,645
Leasing			3,495		-		-		-		3,495		-
Legacy			-		-		15,050		-		15,050		-
Consumer:
	Credit cards		-		20,313		486		-		486		20,313
	Home equity lines of credit		-		147		8,632		-		8,632		147
	Personal		17,054		54		1,591		-		18,645		54
	Auto		10,562		-		2		-		10,564		-
	Other		5,550		585		21		-		5,571		585
Total^[1]		$	447,255	$	417,300	$	150,693	$	-	$	597,948	$	417,300

[1] For purposes of this table non-performing loans exclude $ 1 million in non-performing loans held-for-sale.

[2] Non-covered loans by $43 million accounted for under ASC Subtopic 310-30 are excluded from the above table as they are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analysis.

[3] It is the Corporation's policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to non-performing since the principal repayment is insured. These balances include $115 million of residential mortgage loans in Puerto Rico insured by FHA or guaranteed by the VA that are no longer accruing interest as of December 31, 2013. Furthermore, the Corporation has approximately $50 million in reverse mortgage loans in Puerto Rico which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it is the Corporation's policy to exclude these balances from non-performing assets.

The following tables present loans by past due status at June 30, 2014 and December 31, 2013 for non-covered loans held-in-portfolio (net of unearned income).

June 30, 2014
Puerto Rico

			Past due									Non-covered
		30-59		60-89		90 days		Total				loans HIP
(In thousands)		days		days		or more		past due		Current		Puerto Rico
Commercial multi-family		$	-	$	189	$	2,851	$	3,040	$	58,466	$	61,506
Commercial real estate non-owner occupied			2,836		2,453		56,406		61,695		1,888,187		1,949,882
Commercial real estate owner occupied			9,351		4,015		108,286		121,652		1,423,932		1,545,584
Commercial and industrial			18,564		3,905		86,426		108,895		2,633,113		2,742,008
Construction			-		583		21,456		22,039		113,644		135,683
Mortgage			293,037		157,245		716,632		1,166,914		4,291,658		5,458,572
Leasing			7,083		1,857		2,873		11,813		535,055		546,868
Consumer:
	Credit cards		12,977		8,533		19,595		41,105		1,114,780		1,155,885
	Home equity lines of credit		-		-		467		467		13,814		14,281
	Personal		14,465		7,132		17,968		39,565		1,247,340		1,286,905
	Auto		35,057		8,837		11,703		55,597		689,712		745,309
	Other		1,462		522		4,352		6,336		207,133		213,469
Total		$	394,832	$	195,271	$	1,049,015	$	1,639,118	$	14,216,834	$	15,855,952

June 30, 2014
U.S. mainland
			Past due
		30-59		60-89		90 days		Total				Loans HIP
(In thousands)		days		days		or more		past due		Current		U.S. mainland
Commercial multi-family		$	-	$	-	$	4,105	$	4,105	$	410,215	$	414,320
Commercial real estate non-owner occupied			-		-		11,857		11,857		539,297		551,154
Commercial real estate owner occupied			1,553		8,500		4,199		14,252		198,699		212,951
Commercial and industrial			2,411		4,022		4,420		10,853		667,289		678,142
Construction			-		-		-		-		43,376		43,376
Mortgage			1,892		7,241		23,964		33,097		1,172,779		1,205,876
Legacy			1,871		2,770		8,323		12,964		149,977		162,941
Consumer:
	Credit cards		295		176		378		849		14,448		15,297
	Home equity lines of credit		2,052		2,077		7,221		11,350		363,036		374,386
	Personal		790		1,034		1,459		3,283		116,732		120,015
	Auto		6		-		-		6		264		270
	Other		20		-		3		23		521		544
Total		$	10,890	$	25,820	$	65,929	$	102,639	$	3,676,633	$	3,779,272

June 30, 2014
Popular, Inc.

			Past due									Non-covered
		30-59		60-89		90 days		Total					loans HIP
(In thousands)		days		days		or more		past due		Current			Popular, Inc.
Commercial multi-family		$	-	$	189	$	6,956	$	7,145	$	468,681	$	475,826
Commercial real estate non-owner occupied			2,836		2,453		68,263		73,552		2,427,484		2,501,036
Commercial real estate owner occupied			10,904		12,515		112,485		135,904		1,622,631		1,758,535
Commercial and industrial			20,975		7,927		90,846		119,748		3,300,402		3,420,150
Construction			-		583		21,456		22,039		157,020		179,059
Mortgage			294,929		164,486		740,596		1,200,011		5,464,437		6,664,448
Leasing			7,083		1,857		2,873		11,813		535,055		546,868
Legacy			1,871		2,770		8,323		12,964		149,977		162,941
Consumer:
	Credit cards		13,272		8,709		19,973		41,954		1,129,228		1,171,182
	Home equity lines of credit		2,052		2,077		7,688		11,817		376,850		388,667
	Personal		15,255		8,166		19,427		42,848		1,364,072		1,406,920
	Auto		35,063		8,837		11,703		55,603		689,976		745,579
	Other		1,482		522		4,355		6,359		207,654		214,013
Total		$	405,722	$	221,091	$	1,114,944	$	1,741,757	$	17,893,467	$	19,635,224

December 31, 2013
Puerto Rico

			Past due									Non-covered
			30-59		60-89		90 days	Total				loans HIP
(In thousands)			days		days		or more	past due		Current		Puerto Rico
Commercial multi-family		$	446	$	-	$	4,944	$	5,390	$	77,013	$	82,403
Commercial real estate non-owner occupied			13,889		349		41,959		56,197		1,808,021		1,864,218
Commercial real estate owner occupied			13,725		8,318		83,441		105,484		1,501,019		1,606,503
Commercial and industrial			9,960		4,463		56,309		70,732		2,841,734		2,912,466
Construction			2,329		-		18,108		20,437		140,734		161,171
Mortgage			316,663		154,882		645,444		1,116,989		4,283,690		5,400,679
Leasing			7,457		1,607		3,495		12,559		531,202		543,761
Consumer:
	Credit cards		13,797		9,991		20,313		44,101		1,125,520		1,169,621
	Home equity lines of credit		133		53		147		333		14,845		15,178
	Personal		12,897		6,794		17,108		36,799		1,177,085		1,213,884
	Auto		31,340		9,361		10,562		51,263		648,228		699,491
	Other		1,834		859		6,135		8,828		209,636		218,464
Total		$	424,470	$	196,677	$	907,965	$	1,529,112	$	14,358,727	$	15,887,839

December 31, 2013
U.S. mainland
			Past due
			30-59		60-89		90 days		Total				Loans HIP
(In thousands)			days		days		or more		past due		Current		U.S. mainland
Commercial multi-family		$	3,621	$	1,675	$	20,894	$	26,190	$	1,067,344	$	1,093,534
Commercial real estate non-owner occupied			4,255		-		42,413		46,668		1,059,619		1,106,287
Commercial real estate owner occupied			657		8,452		23,507		32,616		527,426		560,042
Commercial and industrial			2,331		2,019		6,142		10,492		801,239		811,731
Construction			-		-		5,663		5,663		39,250		44,913
Mortgage			30,713		9,630		26,292		66,635		1,214,162		1,280,797
Legacy			9,079		2,098		15,050		26,227		184,908		211,135
Consumer:
	Credit cards		285		200		486		971		14,680		15,651
	Home equity lines of credit		2,794		2,198		8,632		13,624		449,409		463,033
	Personal		3,196		826		1,591		5,613		129,622		135,235
	Auto		11		-		2		13		476		489
	Other		43		50		21		114		1,066		1,180
Total		$	56,985	$	27,148	$	150,693	$	234,826	$	5,489,201	$	5,724,027

December 31, 2013
Popular, Inc.

			Past due									Non-covered
			30-59		60-89		90 days		Total			loans HIP
(In thousands)			days		days		or more		past due	Current		Popular, Inc.
Commercial multi-family		$	4,067	$	1,675	$	25,838	$	31,580	$	1,144,357	$	1,175,937
Commercial real estate non-owner occupied			18,144		349		84,372		102,865		2,867,640		2,970,505
Commercial real estate owner occupied			14,382		16,770		106,948		138,100		2,028,445		2,166,545
Commercial and industrial			12,291		6,482		62,451		81,224		3,642,973		3,724,197
Construction			2,329		-		23,771		26,100		179,984		206,084
Mortgage			347,376		164,512		671,736		1,183,624		5,497,852		6,681,476
Leasing			7,457		1,607		3,495		12,559		531,202		543,761
Legacy			9,079		2,098		15,050		26,227		184,908		211,135
Consumer:
	Credit cards		14,082		10,191		20,799		45,072		1,140,200		1,185,272
	Home equity lines of credit		2,927		2,251		8,779		13,957		464,254		478,211
	Personal		16,093		7,620		18,699		42,412		1,306,707		1,349,119
	Auto		31,351		9,361		10,564		51,276		648,704		699,980
	Other		1,877		909		6,156		8,942		210,702		219,644
Total		$	481,455	$	223,825	$	1,058,658	$	1,763,938	$	19,847,928	$	21,611,866

The following table provides a breakdown of loans held-for-sale (“LHFS”) in non-performing status at June 30, 2014 and December 31, 2013 by main categories.

The outstanding principal balance of non-covered loans accounted pursuant to ASC Subtopic 310-30, net of amounts charged off by the Corporation, amounted to $226 million at June 30, 2014 (December 31, 2013 - $197 million). At June 30, 2014, none of the acquired non-covered loans accounted under ASC Subtopic 310-30 were considered non-performing loans. Therefore, interest income, through accretion of the difference between the carrying amount of the loans and the expected cash flows, was recognized on all acquired loans.

Changes in the carrying amount and the accretable yield for the non-covered loans accounted pursuant to the ASC Subtopic 310-30, for the quarters and six months ended June 30, 2014 and 2013 were as follows:



Activity in the accretable discount - Non-covered loans ASC 310-30
	For the quarter ended			For the quarter ended
(In thousands)		June 30, 2014		June 30, 2013
Beginning balance		$	67,285	$	36,627
Additions			4,060		10,107
Accretion			(2,552)		(2,004)
Change in expected cash flows			8,034		4,483
Ending balance		$	76,827	$	49,213


Activity in the accretable discount - Non-covered loans ASC 310-30
	For the six months ended			For the six months ended
(In thousands)		June 30, 2014		June 30, 2013
Beginning balance		$	49,398	$	-
Additions			11,144		47,342
Accretion			(4,926)		(2,612)
Change in expected cash flows			21,211		4,483
Ending balance		$	76,827	$	49,213

Carrying amount of non-covered loans accounted for pursuant to ASC 310-30
		For the quarter ended		For the quarter ended
(In thousands)		June 30, 2014		June 30, 2013
Beginning balance		$	190,216		133,041
Additions			13,139		22,899
Accretion			2,552		2,004
Collections and charge-offs			(6,866)		(19,312)
Ending balance		$	199,041	$	138,632
	Allowance for loan losses ASC 310-30 non-covered loans		(15,751)		-
Ending balance, net of ALLL		$	183,290	$	138,632


Carrying amount of non-covered loans accounted for pursuant to ASC 310-30
	For the six months ended			For the six months ended
(In thousands)		June 30, 2014		June 30, 2013
Beginning balance		$	173,659	$	-
Additions			33,181		156,311
Accretion			4,926		2,612
Collections and charge-offs			(12,725)		(20,291)
Ending balance		$	199,041	$	138,632
	Allowance for loan losses ASC 310-30 non-covered loans		(15,751)		-
Ending balance, net of ALLL		$	183,290	$	138,632

The following table presents covered loans in non-performing status and accruing loans past-due 90 days or more by loan class at June 30, 2014 and December 31, 2013.

	June 30, 2014				December 31, 2013

	Non-accrual		Accruing loans past		Non-accrual		Accruing loans past
(In thousands)	loans		due 90 days or more		loans		due 90 days or more
Commercial real estate	$	7,775	$	-	$	8,345	$	-
Commercial and industrial		888		-		7,335		456
Construction		4,112		-		11,872		-
Mortgage		3,044		18		1,739		69
Consumer		331		-		90		112
Total^[1]	$	16,150	$	18	$	29,381	$	637

[1] Covered loans accounted for under ASC Subtopic 310-30 are excluded from the above table as they are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses.

The following tables present loans by past due status at June 30, 2014 and December 31, 2013 for covered loans held-in-portfolio. The information considers covered loans accounted for under ASC Subtopic 310-20 and ASC Subtopic 310-30.

June 30, 2014

		Past due
	30-59		60-89		90 days		Total				Covered
(In thousands)	days		days		or more		past due		Current		loans HIP
Commercial real estate	$	18,747	$	7,829	$	340,117	$	366,693	$	1,271,941	$	1,638,634
Commercial and industrial		870		684		7,686		9,240		98,093		107,333
Construction		-		-		71,197		71,197		11,566		82,763
Mortgage		46,826		25,447		149,311		221,584		645,491		867,075
Consumer		2,139		830		3,762		6,731		33,566		40,297
Total covered loans	$	68,582	$	34,790	$	572,073	$	675,445	$	2,060,657	$	2,736,102

December 31, 2013

		Past due
		30-59	60-89		90 days		Total				Covered
(In thousands)		days	days		or more		past due		Current		loans HIP
Commercial real estate	$	42,898	$	8,745	$	374,301	$	425,944	$	1,284,285	$	1,710,229
Commercial and industrial		1,584		349		16,318		18,251		84,324		102,575
Construction		399		-		178,007		178,406		11,721		190,127
Mortgage		50,222		23,384		165,030		238,636		695,737		934,373
Consumer		2,588		1,328		4,200		8,116		39,007		47,123
Total covered loans	$	97,691	$	33,806	$	737,856	$	869,353	$	2,115,074	$	2,984,427

The carrying amount of the covered loans consisted of loans determined to be impaired at the time of acquisition, which are accounted for in accordance with ASC Subtopic 310-30 (“credit impaired loans”), and loans that were considered to be performing at the acquisition date, accounted for by analogy to ASC Subtopic 310-30 (“non-credit impaired loans”), as detailed in the following table.

	June 30, 2014						December 31, 2013

	Carrying amount						Carrying amount
(In thousands)		Non-credit impaired loans		Credit impaired loans		Total		Non-credit impaired loans		Credit impaired loans		Total
Commercial real estate	$	1,450,099	$	126,474	$	1,576,573	$	1,483,331	$	149,341	$	1,632,672
Commercial and industrial		65,372		4,496		69,868		55,192		3,069		58,261
Construction		37,925		40,283		78,208		71,864		104,356		176,220
Mortgage		804,169		49,481		853,650		862,878		59,483		922,361
Consumer		30,346		2,019		32,365		35,810		2,623		38,433
Carrying amount		2,387,911		222,753		2,610,664		2,509,075		318,872		2,827,947
Allowance for loan losses		(50,609)		(40,283)		(90,892)		(57,594)		(36,321)		(93,915)
Carrying amount, net of allowance	$	2,337,302	$	182,470	$	2,519,772	$	2,451,481	$	282,551	$	2,734,032

The outstanding principal balance of covered loans accounted pursuant to ASC Subtopic 310-30, net of amounts charged off by the Corporation, amounted to $3.4 billion at June 30, 2014 (December 31, 2013 - $3.8 billion). At June 30, 2014, none of the acquired loans from the Westernbank FDIC-assisted transaction accounted for under ASC Subtopic 310-30 were considered non-performing loans. Therefore, interest income, through accretion of the difference between the carrying amount of the loans and the expected cash flows, was recognized on all acquired loans.

Changes in the carrying amount and the accretable yield for the covered loans accounted pursuant to the ASC Subtopic 310-30, for the quarters ended June 30, 2014 and 2013, were as follows:

	Activity in the accretable yield
	Covered loans ASC 310-30
	For the quarters ended
	June 30, 2014						June 30, 2013
		Non-credit		Credit				Non-credit		Credit
(In thousands)		impaired loans		impaired loans		Total		impaired loans		impaired loans		Total
Beginning balance	$	1,212,706	$	5,506	$	1,218,212	$	1,372,375	$	(240)	$	1,372,135
Accretion		(77,316)		(2,547)		(79,863)		(60,284)		(2,252)		(62,536)
Change in expected cash flows		135,812		6,597		142,409		53,579		16,434		70,013
Ending balance	$	1,271,202	$	9,556	$	1,280,758	$	1,365,670	$	13,942	$	1,379,612

	Activity in the accretable discount
	Covered loans ASC 310-30
	For the six months ended
	June 30, 2014						June 30, 2013
		Non-credit		Credit				Non-credit		Credit
		impaired		impaired				impaired		impaired
(In thousands)		loans		loans		Total		loans		loans		Total
Beginning balance	$	1,297,725	$	11,480	$	1,309,205	$	1,446,381	$	5,288	$	1,451,669
Accretion		(149,868)		(9,113)		(158,981)		(121,461)		(6,065)		(127,526)
Change in expected cash flows		123,345		7,189		130,534		40,750		14,719		55,469
Ending balance	$	1,271,202	$	9,556	$	1,280,758	$	1,365,670	$	13,942	$	1,379,612

		Carrying amount of covered loans accounted for pursuant to ASC 310-30
		For the quarters ended
		June 30, 2014						June 30, 2013
			Non-credit		Credit				Non-credit		Credit
(In thousands)			impaired loans		impaired loans		Total		impaired loans		impaired loans		Total
Beginning balance		$	2,469,453	$	263,669	$	2,733,122	$	2,758,944	$	398,719	$	3,157,663
Accretion			77,316		2,547		79,863		60,284		2,252		62,536
Collections and charge-offs			(158,858)		(43,463)		(202,321)		(166,157)		(41,176)		(207,333)
Ending balance		$	2,387,911	$	222,753	$	2,610,664	$	2,653,071	$	359,795	$	3,012,866
	Allowance for loan losses
	ASC 310-30 covered loans		(50,609)		(40,283)		(90,892)		(47,017)		(44,178)		(91,195)
Ending balance, net of ALLL		$	2,337,302	$	182,470	$	2,519,772	$	2,606,054	$	315,617	$	2,921,671

		Carrying amount of loans accounted for pursuant to ASC 310-30
		For the six months ended
		June 30, 2014						June 30, 2013
			Non-credit		Credit				Non-credit		Credit
			impaired		impaired				impaired		impaired
(In thousands)			loans		loans		Total		loans		loans		Total
Beginning balance		$	2,509,075	$	318,872	$	2,827,947	$	3,051,964	$	439,795	$	3,491,759
Accretion			149,868		9,113		158,981		121,461		6,065		127,526
Collections and charge offs			(271,032)		(105,232)		(376,264)		(520,354)		(86,065)		(606,419)
Ending balance		$	2,387,911	$	222,753	$	2,610,664	$	2,653,071	$	359,795	$	3,012,866
Allowance for loan losses
	ASC 310-30 covered loans		(50,609)		(40,283)		(90,892)		(47,017)		(44,178)		(91,195)
Ending balance, net of ALLL		$	2,337,302	$	182,470	$	2,519,772	$	2,606,054	$	315,617	$	2,921,671

The Corporation accounts for lines of credit with revolving privileges under the accounting guidance of ASC Subtopic 310-20, which requires that any differences between the contractually required loans payment receivable in excess of the initial investment in the loans be accreted into interest income over the life of the loans, if the loan is accruing interest. Covered loans accounted for under ASC Subtopic 310-20 amounted to $0.1 billion at June 30, 2014 (December 31, 2013 - $0.2 billion).