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 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 September 30, 2014 and December 31, 2013.


(In thousands)		September 30, 2014		December 31, 2013
Commercial multi-family		$	477,986	$	1,175,937
Commercial real estate non-owner occupied			2,447,457		2,970,505
Commercial real estate owner occupied			1,726,134		2,166,545
Commercial and industrial			3,407,137		3,724,197
Construction			211,850		206,084
Mortgage			6,555,337		6,681,476
Leasing			550,514		543,761
Legacy^[2]			91,015		211,135
Consumer:
	Credit cards		1,155,949		1,185,272
	Home equity lines of credit		371,807		478,211
	Personal		1,398,557		1,349,119
	Auto		755,971		699,980
	Other		209,502		219,644
Total loans held-in-portfolio^[1]		$	19,359,216	$	21,611,866

[1]	Non-covered loans held-in-portfolio at September 30, 2014 are net of $91 million in unearned income and exclude $178 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 September 30, 2014 and December 31, 2013.


(In thousands)	September 30, 2014		December 31, 2013
Commercial real estate	$	1,591,718	$	1,710,229
Commercial and industrial		104,933		102,575
Construction		74,468		190,127
Mortgage		846,472		934,373
Consumer		36,672		47,123
Total loans held-in-portfolio	$	2,654,263	$	2,984,427

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

(In thousands)	September 30, 2014 [1]		December 31, 2013
Commercial	$	38,072	$	603
Legacy		27,409		-
Mortgage		106,832		109,823
Consumer		5,695		-
Total loans held-for-sale	$	178,008	$	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 nine months ended September 30, 2014, the Corporation recorded purchases (including repurchases) of mortgage loans amounting to $139 million and $470 million, respectively (September 30, 2013 - $199 million and $1.7 billion, respectively). Also, the Corporation recorded purchases of $92 million in consumer loans during the nine months ended September 30, 2014 (September 30, 2013 - $42 million). In addition, during the nine months ended September 30, 2014, the Corporation recorded purchases of commercial loans amounting $21 million (during the quarter and nine months ended September 30, 2013 - $5 million and $8 million, respectively).

The Corporation sold approximately $56 million and $126 million of residential mortgage loans (on a whole loan basis) during the quarter and nine months ended September 30, 2014, respectively (September 30, 2013 - $60 million and $614 million, respectively). During the third quarter of 2014, BPNA sold approximately $115.7 million and reclassified to held-for-sale approximately $105.0 million in classified and legacy residential mortgage and commercial loans. 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 $ 172 million and $ 522 million of mortgage loans into Government National Mortgage Association (“GNMA”) mortgage-backed securities during the quarter and nine months ended September 30, 2014, respectively (September 30, 2013 - $ 200 million and $ 767 million, respectively). Furthermore, the Corporation securitized approximately $ 51 million and $ 174 million of mortgage loans into Federal National Mortgage Association (“FNMA”) mortgage-backed securities during the quarter and nine months ended September 30, 2014, respectively (September 30, 2013 - $ 102 million and $ 354 million, respectively). The Corporation did not securitize mortgage loans into Federal Home Loan Mortgage Corporation (“FHLMC”) mortgage-backed securities during the quarter and nine months ended September 30, 2014 (September 30, 2013 - $ 1 million and $ 28 million, respectively). The Corporation sold commercial and construction loans with a book value of approximately $96 million and $157 million during the quarter and nine months ended September 30, 2014, respectively (September 30, 2013 - $6 million and $413 million, respectively). These sales for 2013 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 September 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 September 30, 2014
			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		$	2,529	$	-	$	2,101	$	-	$	4,630	$	-
Commercial real estate non-owner occupied			49,421		-		1,167		-		50,588		-
Commercial real estate owner occupied			125,656		-		2,155		-		127,811		-
Commercial and industrial			66,819		370		2,483		-		69,302		370
Construction			19,148		-		-		-		19,148		-
Mortgage^[2][3]			283,433		406,673		11,692		-		295,125		406,673
Leasing			3,168		-		-		-		3,168		-
Legacy			-		-		5,648		-		5,648		-
Consumer:
	Credit cards		-		18,772		490		-		490		18,772
	Home equity lines of credit		-		-		3,069		-		3,069		-
	Personal		26,207		-		911		-		27,118		-
	Auto		12,179		-		-		-		12,179		-
	Other		3,669		614		-		-		3,669		614
Total^[1]		$	592,229	$	426,429	$	29,716	$	-	$	621,945	$	426,429

[1] For purposes of this table non-performing loans exclude $ 20 million in non-performing loans held-for-sale.

[2] Non-covered loans of $57 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 $125 million of residential mortgage loans in Puerto Rico insured by FHA or guaranteed by the VA that are no longer accruing interest as of September 30, 2014. Furthermore, the Corporation has approximately $64 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 September 30, 2014 and December 31, 2013 for non-covered loans held-in-portfolio (net of unearned income).

September 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		$	100	$	82	$	2,529	$	2,711	$	57,207	$	59,918
Commercial real estate non-owner occupied			3,977		1,710		49,421		55,108		1,898,793		1,953,901
Commercial real estate owner occupied			8,204		1,583		125,656		135,443		1,391,453		1,526,896
Commercial and industrial			6,871		2,452		67,189		76,512		2,652,495		2,729,007
Construction			251		-		19,148		19,399		129,384		148,783
Mortgage			317,835		168,750		746,882		1,233,467		4,219,655		5,453,122
Leasing			7,134		781		3,168		11,083		539,431		550,514
Consumer:
	Credit cards		13,375		8,914		18,772		41,061		1,099,769		1,140,830
	Home equity lines of credit		199		-		-		199		13,948		14,147
	Personal		14,304		7,192		26,207		47,703		1,233,859		1,281,562
	Auto		37,092		8,393		12,179		57,664		698,030		755,694
	Other		1,222		241		4,283		5,746		203,363		209,109
Total		$	410,564	$	200,098	$	1,075,434	$	1,686,096	$	14,137,387	$	15,823,483

September 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		$	4,728	$	-	$	2,101	$	6,829	$	411,239	$	418,068
Commercial real estate non-owner occupied			-		-		1,167		1,167		492,389		493,556
Commercial real estate owner occupied			-		473		2,155		2,628		196,610		199,238
Commercial and industrial			2,863		280		2,483		5,626		672,504		678,130
Construction			-		-		-		-		63,067		63,067
Mortgage			1,317		6,808		11,692		19,817		1,082,398		1,102,215
Legacy			373		893		5,648		6,914		84,101		91,015
Consumer:
	Credit cards		270		173		490		933		14,186		15,119
	Home equity lines of credit		3,315		1,292		3,069		7,676		349,984		357,660
	Personal		656		1,269		911		2,836		114,159		116,995
	Auto		3		-		-		3		274		277
	Other		-		-		-		-		393		393
Total		$	13,525	$	11,188	$	29,716	$	54,429	$	3,481,304	$	3,535,733

September 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		$	4,828	$	82	$	4,630	$	9,540	$	468,446	$	477,986
Commercial real estate non-owner occupied			3,977		1,710		50,588		56,275		2,391,182		2,447,457
Commercial real estate owner occupied			8,204		2,056		127,811		138,071		1,588,063		1,726,134
Commercial and industrial			9,734		2,732		69,672		82,138		3,324,999		3,407,137
Construction			251		-		19,148		19,399		192,451		211,850
Mortgage			319,152		175,558		758,574		1,253,284		5,302,053		6,555,337
Leasing			7,134		781		3,168		11,083		539,431		550,514
Legacy			373		893		5,648		6,914		84,101		91,015
Consumer:
	Credit cards		13,645		9,087		19,262		41,994		1,113,955		1,155,949
	Home equity lines of credit		3,514		1,292		3,069		7,875		363,932		371,807
	Personal		14,960		8,461		27,118		50,539		1,348,018		1,398,557
	Auto		37,095		8,393		12,179		57,667		698,304		755,971
	Other		1,222		241		4,283		5,746		203,756		209,502
Total		$	424,089	$	211,286	$	1,105,150	$	1,740,525	$	17,618,691	$	19,359,216

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 September 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 $236 million at September 30, 2014 (December 31, 2013 - $197 million). At September 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 nine months ended September 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)		September 30, 2014		September 30, 2013
Beginning balance		$	76,827	$	49,213
Additions			3,761		6,732
Accretion			(2,594)		(2,417)
Change in expected cash flows			23,191		(6,247)
Ending balance		$	101,185	$	47,281


Activity in the accretable discount - Non-covered loans ASC 310-30
	For the nine months ended			For the nine months ended
(In thousands)		September 30, 2014		September 30, 2013
Beginning balance		$	49,398	$	-
Additions			14,904		54,074
Accretion			(7,520)		(5,029)
Change in expected cash flows			44,403		(1,764)
Ending balance		$	101,185	$	47,281

Carrying amount of non-covered loans accounted for pursuant to ASC 310-30
		For the quarter ended		For the quarter ended
(In thousands)		September 30, 2014		September 30, 2013
Beginning balance		$	199,041		138,632
Additions			12,985		18,789
Accretion			2,595		2,417
Collections and charge-offs			(7,151)		(4,213)
Ending balance		$	207,470	$	155,625
	Allowance for loan losses ASC 310-30 non-covered loans		(16,256)		(3,511)
Ending balance, net of ALLL		$	191,214	$	152,114


Carrying amount of non-covered loans accounted for pursuant to ASC 310-30
	For the nine months ended			For the nine months ended
(In thousands)		September 30, 2014		September 30, 2013
Beginning balance		$	173,659	$	-
Additions			46,165		175,100
Accretion			7,520		5,029
Collections and charge-offs			(19,874)		(24,504)
Ending balance		$	207,470	$	155,625
	Allowance for loan losses ASC 310-30 non-covered loans		(16,256)		(3,511)
Ending balance, net of ALLL		$	191,214	$	152,114

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

	September 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	$	6,658	$	-	$	8,345	$	-
Commercial and industrial		565		-		7,335		456
Construction		2,784		-		11,872		-
Mortgage		4,671		30		1,739		69
Consumer		473		-		90		112
Total^[1]	$	15,151	$	30	$	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 September 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.

September 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	$	25,957	$	17,189	$	308,179	$	351,325	$	1,240,393	$	1,591,718
Commercial and industrial		596		441		7,528		8,565		96,368		104,933
Construction		2,461		-		62,731		65,192		9,276		74,468
Mortgage		45,980		26,465		146,335		218,780		627,692		846,472
Consumer		2,144		783		2,859		5,786		30,886		36,672
Total covered loans	$	77,138	$	44,878	$	527,632	$	649,648	$	2,004,615	$	2,654,263

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.

	September 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	$	1,425,288	$	115,327	$	1,540,615	$	1,483,331	$	149,341	$	1,632,672
Commercial and industrial		54,325		2,260		56,585		55,192		3,069		58,261
Construction		35,020		34,384		69,404		71,864		104,356		176,220
Mortgage		784,898		48,319		833,217		862,878		59,483		922,361
Consumer		27,073		1,539		28,612		35,810		2,623		38,433
Carrying amount		2,326,604		201,829		2,528,433		2,509,075		318,872		2,827,947
Allowance for loan losses		(52,812)		(32,828)		(85,640)		(57,594)		(36,321)		(93,915)
Carrying amount, net of allowance	$	2,273,792	$	169,001	$	2,442,793	$	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 $3.2 billion at September 30, 2014 (December 31, 2013 - $3.8 billion). At September 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 September 30, 2014 and 2013, were as follows:

	Activity in the accretable yield
	Covered loans ASC 310-30
	For the quarters ended
	September 30, 2014						September 30, 2013
		Non-credit		Credit				Non-credit		Credit
(In thousands)		impaired loans		impaired loans		Total		impaired loans		impaired loans		Total
Beginning balance	$	1,271,202	$	9,556	$	1,280,758	$	1,365,670	$	13,942	$	1,379,612
Accretion		(62,958)		(3,059)		(66,017)		(69,146)		617		(68,529)
Change in expected cash flows		95,920		1,860		97,780		4,879		(6,344)		(1,465)
Ending balance	$	1,304,164	$	8,357	$	1,312,521	$	1,301,403	$	8,215	$	1,309,618

	Activity in the accretable yield
	Covered loans ASC 310-30
	For the nine months ended
	September 30, 2014						September 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		(212,826)		(12,172)		(224,998)		(190,607)		(5,448)		(196,055)
Change in expected cash flows		219,265		9,049		228,314		45,629		8,375		54,004
Ending balance	$	1,304,164	$	8,357	$	1,312,521	$	1,301,403	$	8,215	$	1,309,618

		Carrying amount of covered loans accounted for pursuant to ASC 310-30
		For the quarters ended
		September 30, 2014						September 30, 2013
			Non-credit		Credit				Non-credit		Credit
(In thousands)			impaired loans		impaired loans		Total		impaired loans		impaired loans		Total
Beginning balance		$	2,387,911	$	222,753	$	2,610,664	$	2,653,071	$	359,795	$	3,012,866
Accretion			62,958		3,059		66,017		69,146		(617)		68,529
Collections and charge-offs			(124,265)		(23,983)		(148,248)		(166,611)		(23,735)		(190,346)
Ending balance		$	2,326,604	$	201,829	$	2,528,433	$	2,555,606	$	335,443	$	2,891,049
	Allowance for loan losses
	ASC 310-30 covered loans		(52,812)		(32,828)		(85,640)		(49,744)		(59,130)		(108,874)
Ending balance, net of ALLL		$	2,273,792	$	169,001	$	2,442,793	$	2,505,862	$	276,313	$	2,782,175

		Carrying amount of loans accounted for pursuant to ASC 310-30
		For the nine months ended
		September 30, 2014						September 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			212,826		12,172		224,998		190,607		5,448		196,055
Collections and charge offs			(395,297)		(129,215)		(524,512)		(686,965)		(109,800)		(796,765)
Ending balance		$	2,326,604	$	201,829	$	2,528,433	$	2,555,606	$	335,443	$	2,891,049
Allowance for loan losses
	ASC 310-30 covered loans		(52,812)		(32,828)		(85,640)		(49,744)		(59,130)		(108,874)
Ending balance, net of ALLL		$	2,273,792	$	169,001	$	2,442,793	$	2,505,862	$	276,313	$	2,782,175

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 September 30, 2014 (December 31, 2013 - $0.2 billion).