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Allowance for loan losses
 12 Months Ended
Dec. 31, 2015
Loans and Leases Receivable, Allowance Abstract  
Allowance for loan losses

Note 13 – Allowance for loan losses

The Corporation follows a systematic methodology to establish and evaluate the adequacy of the allowance for loan losses to provide for inherent losses in the loan portfolio. This methodology includes the consideration of factors such as current economic conditions, portfolio risk characteristics, prior loss experience and results of periodic credit reviews of individual loans. The provision for loan losses charged to current operations is based on this methodology. Loan losses are charged and recoveries are credited to the allowance for loan losses.

The Corporation’s assessment of the allowance for loan losses is determined in accordance with the guidance of loss contingencies in ASC Subtopic 450-20 and loan impairment guidance in ASC Section 310-10-35. Also, the Corporation determines the allowance for loan losses on purchased impaired loans and purchased loans accounted for under ASC Subtopic 310-30, by evaluating decreases in expected cash flows after the acquisition date. 

The accounting guidance provides for the recognition of a loss allowance for groups of homogeneous loans. The determination for general reserves of the allowance for loan losses includes the following principal factors:

  • Base net loss rates, which are based on the moving average of annualized net loss rates computed over a 5-year historical loss period for the commercial and construction loan portfolios, and an 18-month period for the consumer and mortgage loan portfolios.  The base net loss rates are applied by loan type and by legal entity.
  • Recent loss trend adjustment, which replaces the base loss rate with a 12-month average loss rate, when these trends are higher than the respective base loss rates. The objective of this adjustment is to allow for a more recent loss trend to be captured and reflected in the ALLL estimation process.   

For the period ended December 31, 2015, 15% (December 31, 2014- 50%) of the ALLL for BPPR non-covered loan portfolios utilized the recent loss trend adjustment instead of the base loss. The effect of replacing the base loss with the recent loss trend adjustment was mainly concentrated in the commercial and industrial, mortgage, and commercial multi-family loan portfolios for 2015, and in the commercial multi-family, commercial and industrial, personal and auto loan portfolios for 2014.

For the period ended December 31, 2015, 4% (December 31, 2014 - 21%) of the ALLL for BPNA loan portfolios utilized the recent loss trend adjustment instead of the base loss. The effect of replacing the base loss with the recent loss trend adjustment was concentrated in the consumer loan portfolio for 2015 and in the commercial and industrial loan portfolio for 2014.

Environmental factors, which include credit and macroeconomic indicators such as unemployment rate, economic activity index and delinquency rates, adopted to account for current market conditions that are likely to cause estimated credit losses to differ from historical losses. The Corporation reflects the effect of these environmental factors on each loan group as an adjustment that, as appropriate, increases the historical loss rate applied to each group. Environmental factors provide updated perspective on credit and economic conditions. Regression analysis is used to select these indicators and quantify the effect on the general reserve of the allowance for loan losses.

During the second quarter of 2015, management completed the annual review of the components of the ALLL models. As part of this review management updated core metrics and revised certain components related to the estimation process for evaluating the adequacy of the general reserve of the allowance for loan losses. These enhancements to the ALLL methodology, which are described in the paragraphs below, were implemented as of June 30, 2015 and resulted in a net decrease to the allowance for loan losses of $ 1.9 million for the non-covered portfolio. The effect of the aforementioned enhancements was immaterial for the covered loans portfolio.

Management made the following principal enhancements to the methodology during the second quarter of 2015:

  • Increased the historical look-back period for determining the base loss rates for commercial and construction loans. The Corporation increased the look-back period for assessing historical loss trends applicable to the determination of commercial and construction loan net charge-offs from 36 months to 60 months. Given the current overall commercial and construction credit quality improvements, including lower loss trends, management concluded that a 60-month look-back period for the base loss rates aligns the Corporation’s allowance for loan losses methodology to maintain adequate loss observations in its main general reserve component. 

The combined effect of the aforementioned enhancements to the base loss rates resulted in an increase to the allowance for loan losses of $19.6 million at June 30, 2015, of which $17.9 million related to the non-covered BPPR segment and $1.7 million related to the BPNA segment.

  • Annual review and recalibration of the environmental factors adjustment. The environmental factor adjustments are developed by performing regression analyses on selected credit and economic indicators for each applicable loan segment.  During the second quarter of 2015, the environmental factor models used to account for changes in current credit and macroeconomic conditions were reviewed and recalibrated based on the latest applicable trends. 

The combined effect of the aforementioned recalibration and enhancements to the environmental factors adjustment resulted in a decrease to the allowance for loan losses of $21.5 million at June 30, 2015, of which $20.5 million related to the non-covered BPPR segment and $1 million related to the BPNA segment.

The following tables present the changes in the allowance for loan losses for the years ended December 31, 2015 and 2014.

For the year ended December 31, 2015
Puerto Rico - Non-covered loans
(In thousands)CommercialConstructionMortgageLeasingConsumerTotal
Allowance for credit losses:
Beginning balance$201,589$5,483$120,860$7,131$154,072$489,135
Provision (reversal of provision)88,680(2,836)57,8767,16565,947216,832
Charge-offs(105,716)(13,628)(53,296)(5,561)(110,384)(288,585)
Recoveries31,82614,5142,3052,25826,50877,411
Net write-downs related to loans transferred to held-for-sale(37,907)----(37,907)
Allowance transferred from covered loans8,4531,424582-2,57813,037
Ending balance$186,925$4,957$128,327$10,993$138,721$469,923

For the year ended December 31, 2015
Puerto Rico - Covered loans
(In thousands)CommercialConstructionMortgageLeasingConsumerTotal
Allowance for credit losses:
Beginning balance$30,871$7,202$40,948$-$3,052$82,073
Provision (reversal of provision)10,11515,150(1,011)-(234)24,020
Charge-offs(37,936)(25,086)(6,158)-(853)(70,033)
Recoveries6,5044,700930-84212,976
Net write-downs related to loans transferred to held-for-sale(1,101)(542)(160)-(20)(1,823)
Allowance transferred to non-covered loans(8,453)(1,424)(582)-(2,578)(13,037)
Ending balance$-$-$33,967$-$209$34,176

For the year ended December 31, 2015
U.S. Mainland - Continuing Operations
(In thousands)CommercialConstructionMortgageLegacyConsumerTotal
Allowance for credit losses:
Beginning balance$9,648$1,187$2,462$2,944$14,343$30,584
Provision (reversal of provision)(3,582)2,725(1,727)(3,017)6,227626
Charge-offs(1,452)-(1,670)(2,019)(9,507)(14,648)
Recoveries5,294-3914,7793,85814,322
Net recovery (write-down) related to loans transferred to held-for-sale--5,529-(3,401)2,128
Ending balance$9,908$3,912$4,985$2,687$11,520$33,012

For the year ended December 31, 2015
Popular, Inc.
(In thousands)CommercialConstructionMortgageLegacyLeasingConsumerTotal
Allowance for credit losses:
Beginning balance$242,108$13,872$164,270$2,944$7,131$171,467$601,792
Provision (reversal of provision)95,21315,03955,138(3,017)7,16571,940241,478
Charge-offs(145,104)(38,714)(61,124)(2,019)(5,561)(120,744)(373,266)
Recoveries43,62419,2143,6264,7792,25831,208104,709
Net (write-down) recovery related to loans transferred to held-for-sale (39,008)(542)5,369--(3,421)(37,602)
Ending balance$196,833$8,869$167,279$2,687$10,993$150,450$537,111

For the year ended December 31, 2014
Puerto Rico - Non-covered loans
(In thousands)CommercialConstructionMortgageLeasingConsumerTotal
Allowance for credit losses:
Beginning balance$128,150$5,095$130,330$10,622$152,578$426,775
Provision (reversal of provision)112,821(3,121)34,53047098,149242,849
Charge-offs(70,402)(1,722)(45,389)(6,028)(122,400)(245,941)
Recoveries31,0205,2311,3892,06725,74565,452
Ending balance$201,589$5,483$120,860$7,131$154,072$489,135

For the year ended December 31, 2014
Puerto Rico - Covered Loans
(In thousands)CommercialConstructionMortgageLeasingConsumerTotal
Allowance for credit losses:
Beginning balance$42,198$19,491$36,006$-$4,397$102,092
Provision (reversal of provision)21,57915,39713,384-(4,225)46,135
Charge-offs(34,741)(36,223)(9,156)-2,589(77,531)
Recoveries1,8358,537714-29111,377
Ending balance$30,871$7,202$40,948$-$3,052$82,073

For the year ended December 31, 2014
U.S. Mainland - Continuing Operations
(In thousands)CommercialConstructionMortgageLegacyConsumerTotal
Allowance for credit losses:
Beginning balance$24,930$214$26,599$11,335$19,205$82,283
Allowance transferred from discontinued operations7,984----7,984
Provision (reversal of provision)(2,979)736(15,410)(8,611)7,414(18,850)
Charge-offs(16,628)-(3,517)(8,071)(15,948)(44,164)
Recoveries15,5232372,32117,1413,78339,005
Net (write-down) recovery related to loans transferred to LHFS(19,182)-(7,531)(8,850)(111)(35,674)
Ending balance$9,648$1,187$2,462$2,944$14,343$30,584
For the year ended December 31, 2014
U.S. Mainland - Discontinued Operations
(In thousands)CommercialConstructionMortgageLegacyConsumerTotal
Allowance for credit losses:
Beginning balance$21,902$33$-$2,369$5,101$29,405
Allowance transferred to continuing operations(7,984)----(7,984)
Provision (reversal of provision)(2,831)(226)-(1,812)(1,895)(6,764)
Charge-offs(2,995)--(557)(900)(4,452)
Recoveries8,283220-1,400949,997
Net write-downs related to loans transferred to discontinued operations(16,375)(27)-(1,400)(2,400)(20,202)
Ending balance$-$-$-$-$-$-

For the year ended December 31, 2014
Popular, Inc.
(In thousands)CommercialConstructionMortgageLegacyLeasingConsumerTotal
Allowance for credit losses:
Beginning balance$217,180$24,833$192,935$13,704$10,622$181,281$640,555
Provision (reversal of provision)128,59012,78632,504(10,423)47099,443263,370
Charge-offs(124,766)(37,945)(58,062)(8,628)(6,028)(136,659)(372,088)
Recoveries56,66114,2254,42418,5412,06729,913125,831
Net write-down related to loans transferred to LHFS(19,182)-(7,531)(8,850)-(111)(35,674)
Net write-downs related to loans transferred to discontinued operations(16,375)(27)-(1,400)-(2,400)(20,202)
Ending balance$242,108$13,872$164,270$2,944$7,131$171,467$601,792

The following table provides the activity in the allowance for loan losses related to Westernbank loans accounted for pursuant to ASC Subtopic 310-30.

ASC 310-30 Westernbank loans
For the years ended
(In thousands)December 31, 2015December 31, 2014
Balance at beginning of period$78,846$93,915
Provision for loan losses46,64348,559
Net charge-offs(61,926)(63,628)
Balance at end of period$63,563$78,846

The following tables present information at December 31, 2015 and December 31, 2014 regarding loan ending balances and the allowance for loan losses by portfolio segment and whether such loans and the allowance pertains to loans individually or collectively evaluated for impairment.

At December 31, 2015
Puerto Rico
(In thousands)CommercialConstructionMortgageLeasingConsumerTotal
Allowance for credit losses:
Specific ALLL non-covered loans$49,243$264$42,965$573$23,478$116,523
General ALLL non-covered loans137,6824,69385,36210,420115,243353,400
ALLL - non-covered loans186,9254,957128,32710,993138,721469,923
Specific ALLL covered loans------
General ALLL covered loans--33,967-20934,176
ALLL - covered loans--33,967-20934,176
Total ALLL$186,925$4,957$162,294$10,993$138,930$504,099
Loans held-in-portfolio:
Impaired non-covered loans$337,133$2,481$465,117$2,404$109,660$916,795
Non-covered loans held-in-portfolio
excluding impaired loans7,031,08698,4675,662,374625,2463,236,64216,653,815
Non-covered loans held-in-portfolio7,368,219100,9486,127,491627,6503,346,30217,570,610
Impaired covered loans------
Covered loans held-in-portfolio
excluding impaired loans--627,102-19,013646,115
Covered loans held-in-portfolio--627,102-19,013646,115
Total loans held-in-portfolio$7,368,219$100,948$6,754,593$627,650$3,365,315$18,216,725

At December 31, 2015
U.S. Mainland
(In thousands)CommercialConstructionMortgageLegacyConsumerTotal
Allowance for credit losses:
Specific ALLL$-$-$1,064$-$485$1,549
General ALLL9,9083,9123,9212,68711,03531,463
Total ALLL$9,908$3,912$4,985$2,687$11,520$33,012
Loans held-in-portfolio:
Impaired loans$-$-$6,815$-$2,176$8,991
Loans held-in-portfolio,
excluding impaired loans2,730,944580,158901,77564,436489,2014,766,514
Total loans held-in-portfolio$2,730,944$580,158$908,590$64,436$491,377$4,775,505

At December 31, 2015
Popular, Inc.
(In thousands)CommercialConstructionMortgageLegacyLeasingConsumerTotal
Allowance for credit losses:
Specific ALLL non-covered loans$49,243$264$44,029$-$573$23,963$118,072
General ALLL non-covered loans147,5908,60589,2832,68710,420126,278384,863
ALLL - non-covered loans196,8338,869133,3122,68710,993150,241502,935
Specific ALLL covered loans-------
General ALLL covered loans--33,967--20934,176
ALLL - covered loans--33,967--20934,176
Total ALLL$196,833$8,869$167,279$2,687$10,993$150,450$537,111
Loans held-in-portfolio:
Impaired non-covered loans$337,133$2,481$471,932$-$2,404$111,836$925,786
Non-covered loans held-in-portfolio
excluding impaired loans9,762,030678,6256,564,14964,436625,2463,725,84321,420,329
Non-covered loans held-in-portfolio10,099,163681,1067,036,08164,436627,6503,837,67922,346,115
Impaired covered loans-------
Covered loans held-in-portfolio
excluding impaired loans--627,102--19,013646,115
Covered loans held-in-portfolio--627,102--19,013646,115
Total loans held-in-portfolio$10,099,163$681,106$7,663,183$64,436$627,650$3,856,692$22,992,230

At December 31, 2014
Puerto Rico
(In thousands)CommercialConstructionMortgageLeasingConsumerTotal
Allowance for credit losses:
Specific ALLL non-covered loans$64,736$363$45,838$770$27,796$139,503
General ALLL non-covered loans136,8535,12075,0226,361126,276349,632
ALLL - non-covered loans201,5895,483120,8607,131154,072489,135
Specific ALLL covered loans5----5
General ALLL covered loans30,8667,20240,948-3,05282,068
ALLL - covered loans30,8717,20240,948-3,05282,073
Total ALLL$232,460$12,685$161,808$7,131$157,124$571,208
Loans held-in-portfolio:
Impaired non-covered loans$356,911$13,268$431,569$3,023$115,759$920,530
Non-covered loans held-in-portfolio
excluding impaired loans6,017,892146,1165,018,932561,3663,273,27815,017,584
Non-covered loans held-in-portfolio6,374,803159,3845,450,501564,3893,389,03715,938,114
Impaired covered loans4,4872,419---6,906
Covered loans held-in-portfolio
excluding impaired loans1,610,29467,917822,986-34,5592,535,756
Covered loans held-in-portfolio1,614,78170,336822,986-34,5592,542,662
Total loans held-in-portfolio$7,989,584$229,720$6,273,487$564,389$3,423,596$18,480,776

At December 31, 2014
U.S. Mainland
(In thousands)CommercialConstructionMortgageLegacyConsumerTotal
Allowance for credit losses:
Specific ALLL$-$-$273$-$365$638
General ALLL9,6481,1872,1892,94413,97829,946
Total ALLL$9,648$1,187$2,462$2,944$14,343$30,584
Loans held-in-portfolio:
Impaired loans$250$-$4,255$-$1,973$6,478
Loans held-in-portfolio,
excluding impaired loans1,759,21492,4361,048,13080,818479,2613,459,859
Total loans held-in-portfolio$1,759,464$92,436$1,052,385$80,818$481,234$3,466,337

At December 31, 2014
Popular, Inc.
(In thousands)CommercialConstructionMortgageLegacyLeasingConsumerTotal
Allowance for credit losses:
Specific ALLL non-covered loans$64,736$363$46,111$-$770$28,161$140,141
General ALLL non-covered loans146,5016,30777,2112,9446,361140,254379,578
ALLL - non-covered loans211,2376,670123,3222,9447,131168,415519,719
Specific ALLL covered loans5-----5
General ALLL covered loans30,8667,20240,948--3,05282,068
ALLL - covered loans30,8717,20240,948--3,05282,073
Total ALLL$242,108$13,872$164,270$2,944$7,131$171,467$601,792
Loans held-in-portfolio:
Impaired non-covered loans$357,161$13,268$435,824$-$3,023$117,732$927,008
Non-covered loans held-in-portfolio
excluding impaired loans7,777,106238,5526,067,06280,818561,3663,752,53918,477,443
Non-covered loans held-in-portfolio8,134,267251,8206,502,88680,818564,3893,870,27119,404,451
Impaired covered loans4,4872,419----6,906
Covered loans held-in-portfolio
excluding impaired loans1,610,29467,917822,986--34,5592,535,756
Covered loans held-in-portfolio1,614,78170,336822,986--34,5592,542,662
Total loans held-in-portfolio$9,749,048$322,156$7,325,872$80,818$564,389$3,904,830$21,947,113

Impaired loans

The following tables present loans individually evaluated for impairment at December 31, 2015 and December 31, 2014.

December 31, 2015
Puerto Rico
Impaired Loans – With an Impaired Loans
AllowanceWith No AllowanceImpaired Loans - Total
UnpaidUnpaidUnpaid
RecordedprincipalRelatedRecordedprincipalRecordedprincipalRelated
(In thousands)investmentbalanceallowanceinvestmentbalanceinvestmentbalanceallowance
Commercial real estate non-owner occupied$102,199$106,466$30,980$13,779$23,896$115,978$130,362$30,980
Commercial real estate owner occupied118,253137,19312,56438,95563,383157,208200,57612,564
Commercial and industrial42,04343,6295,69921,90432,92263,94776,5515,699
Construction2,4817,878264--2,4817,878264
Mortgage424,885468,24042,96540,23245,881465,117514,12142,965
Leasing2,4042,404573--2,4042,404573
Consumer:
Credit cards38,73438,7346,675--38,73438,7346,675
Personal 68,50968,50916,365--68,50968,50916,365
Auto 1,8931,893338--1,8931,893338
Other524525100--524525100
Total Puerto Rico$801,925$875,471$116,523$114,870$166,082$916,795$1,041,553$116,523

December 31, 2015
U.S. mainland
Impaired Loans – With an Impaired Loans
AllowanceWith No AllowanceImpaired Loans - Total
UnpaidUnpaidUnpaid
RecordedprincipalRelatedRecordedprincipalRecordedprincipalRelated
(In thousands)investmentbalanceallowanceinvestmentbalanceinvestmentbalanceallowance
Mortgage$4,143$5,018$1,064$2,672$3,574$6,815$8,592$1,064
Consumer:
HELOCs7787962597837831,5611,579259
Personal5345342268181615615226
Total U.S. mainland$5,455$6,348$1,549$3,536$4,438$8,991$10,786$1,549

December 31, 2015
Popular, Inc.
Impaired Loans – With an Impaired Loans
AllowanceWith No AllowanceImpaired Loans - Total
UnpaidUnpaidUnpaid
RecordedprincipalRelatedRecordedprincipalRecordedprincipalRelated
(In thousands)investmentbalanceallowanceinvestmentbalanceinvestmentbalanceallowance
Commercial real estate non-owner occupied$102,199$106,466$30,980$13,779$23,896$115,978$130,362$30,980
Commercial real estate owner occupied118,253137,19312,56438,95563,383157,208200,57612,564
Commercial and industrial42,04343,6295,69921,90432,92263,94776,5515,699
Construction2,4817,878264--2,4817,878264
Mortgage429,028473,25844,02942,90449,455471,932522,71344,029
Leasing2,4042,404573--2,4042,404573
Consumer:
Credit Cards38,73438,7346,675--38,73438,7346,675
HELOCs7787962597837831,5611,579259
Personal69,04369,04316,591818169,12469,12416,591
Auto 1,8931,893338--1,8931,893338
Other524525100--524525100
Total Popular, Inc.$807,380$881,819$118,072$118,406$170,520$925,786$1,052,339$118,072

December 31, 2014
Puerto Rico
Impaired Loans – With an Impaired Loans
AllowanceWith No AllowanceImpaired Loans - Total
UnpaidUnpaidUnpaid
RecordedprincipalRelatedRecordedprincipalRecordedprincipalRelated
(In thousands)investmentbalanceallowanceinvestmentbalanceinvestmentbalanceallowance
Commercial real estate non-owner occupied$50,324$53,154$5,182$7,929$7,929$58,253$61,083$5,182
Commercial real estate owner occupied114,163127,85516,77014,89716,110129,060143,96516,770
Commercial and industrial145,633148,20442,78423,96531,722169,598179,92642,784
Construction2,5757,98036310,69328,99413,26836,974363
Mortgage395,911426,50245,83835,65839,248431,569465,75045,838
Leasing3,0233,023770--3,0233,023770
Consumer:
Credit cards41,47741,4778,023--41,47741,4778,023
Personal 71,82571,82519,410--71,82571,82519,410
Auto 1,9321,932262--1,9321,932262
Other525525101--525525101
Covered loans2,4197,50054,4874,4876,90611,9875
Total Puerto Rico$829,807$889,977$139,508$97,629$128,490$927,436$1,018,467$139,508

December 31, 2014
U.S. mainland
Impaired Loans – With an Impaired Loans
AllowanceWith No AllowanceImpaired Loans - Total
UnpaidUnpaidUnpaid
RecordedprincipalRelatedRecordedprincipalRecordedprincipalRelated
(In thousands)investmentbalanceallowanceinvestmentbalanceinvestmentbalanceallowance
Commercial and industrial$-$-$-$250$250$250$250$-
Mortgage3,0493,4432731,2062,3064,2555,749273
Consumer:
HELOCs1,0951,0953627917911,8861,886362
Other33384-8733
Total U.S. mainland$4,147$4,541$638$2,331$3,347$6,478$7,888$638

December 31, 2014
Popular, Inc.
Impaired Loans – With an Impaired Loans
AllowanceWith No AllowanceImpaired Loans - Total
UnpaidUnpaidUnpaid
RecordedprincipalRelatedRecordedprincipalRecordedprincipalRelated
(In thousands)investmentbalanceallowanceinvestmentbalanceinvestmentbalanceallowance
Commercial real estate non-owner occupied$50,324$53,154$5,182$7,929$7,929$58,253$61,083$5,182
Commercial real estate owner occupied114,163127,85516,77014,89716,110129,060143,96516,770
Commercial and industrial145,633148,20442,78424,21531,972169,848180,17642,784
Construction2,5757,98036310,69328,99413,26836,974363
Mortgage398,960429,94546,11136,86441,554435,824471,49946,111
Leasing3,0233,023770--3,0233,023770
Consumer:
Credit Cards41,47741,4778,023--41,47741,4778,023
HELOCs1,0951,0953627917911,8861,886362
Personal71,82571,82519,410--71,82571,82519,410
Auto 1,9321,932262--1,9321,932262
Other52852810484-612528104
Covered loans2,4197,50054,4874,4876,90611,9875
Total Popular, Inc.$833,954$894,518$140,146$99,960$131,837$933,914$1,026,355$140,146

The following tables present the average recorded investment and interest income recognized on impaired loans for the years ended December 31, 2015 and 2014.

For the years ended December 31, 2015
Puerto RicoU.S. MainlandPopular, Inc.
AverageInterestAverageInterestAverageInterest
recordedincomerecordedincomerecordedincome
(In thousands)investmentrecognizedinvestmentrecognizedinvestmentrecognized
Commercial multi-family$606$-$-$-$606$-
Commercial real estate non-owner occupied107,4425,062--107,4425,062
Commercial real estate owner occupied138,6516,936--138,6516,936
Commercial and industrial121,3154,00150-121,3654,001
Construction6,35088--6,35088
Mortgage450,12216,1285,27989455,40116,217
Legacy--509-509-
Leasing2,710---2,710-
Consumer:
Credit cards40,239---40,239-
HELOCs--1,660-1,660-
Personal 70,046-427-70,473-
Auto 2,005---2,005-
Other561-17-578-
Covered loans3,527153--3,527153
Total Popular, Inc.$943,574$32,368$7,942$89$951,516$32,457

For the years ended December 31, 2014
Puerto RicoU.S. MainlandPopular, Inc.
AverageInterestAverageInterestAverageInterest
recordedincomerecordedincomerecordedincome
(In thousands)investmentrecognizedinvestmentrecognizedinvestmentrecognized
Commercial multi-family$1,539$-$2,657$-$4,196$-
Commercial real estate non-owner occupied70,1542,7199,264-79,4182,719
Commercial real estate owner occupied114,8933,9945,778-120,6713,994
Commercial and industrial130,9407,852955-131,8957,852
Construction18,418-1,133-19,551-
Mortgage415,18819,31933,6861,187448,87420,506
Legacy--2,920-2,920-
Leasing2,747---2,747-
Consumer:
Credit cards42,345---42,345-
HELOCs--1,768-1,768-
Personal 74,593---74,593-
Auto 1,884-52-1,936-
Other748-452-1,200-
Covered loans8,763469--8,763469
Total Popular, Inc.$882,212$34,353$58,665$1,187$940,877$35,540

Modifications

Troubled debt restructurings related to non-covered loan portfolios amounted to $ 1.2 billion at December 31, 2015 (December 31, 2014 - $ 1.1 billion). The amount of outstanding commitments to lend additional funds to debtors owing receivables whose terms have been modified in troubled debt restructurings amounted $11 million related to the commercial loan portfolio and none in the construction loan portfolio at December 31, 2015 (December 31, 2014 - $5 million and $1 million, respectively).

A modification of a loan constitutes a troubled debt restructuring (“TDR”) when a borrower is experiencing financial difficulty and the modification constitutes a concession. For a summary of the accounting policy related to TDRs, refer to the summary of significant accounting policies included in Note 2 to these consolidated financial statements.

Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting evergreen revolving credit lines to long-term loans. Commercial real estate (“CRE”), which includes multifamily, owner-occupied and non-owner occupied CRE, and construction loans modified in a TDR often involve reducing the interest rate for a limited period of time or the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or reductions in the payment plan. Construction loans modified in a TDR may also involve extending the interest-only payment period. 

Residential mortgage loans modified in a TDR are primarily comprised of loans where monthly payments are lowered to accommodate the borrowers’ financial needs for a period of time, normally five years to ten years. After the lowered monthly payment period ends, the borrower reverts back to paying principal and interest per the original terms with the maturity date adjusted accordingly. 

Home equity loans modifications are made infrequently and are not offered if the Corporation also holds the first mortgage. Home equity loans modifications are uniquely designed to meet the specific needs of each borrower. Automobile loans modified in a TDR are primarily comprised of loans where the Corporation has lowered monthly payments by extending the term. Credit cards modified in a TDR are primarily comprised of loans where monthly payments are lowered to accommodate the borrowers’ financial needs for a period of time, normally up to 24 months. 

As part of its NPL reduction strategy and in order to expedite the resolution of delinquent construction and commercial loans, commencing in 2012, the Corporation routinely enters into liquidation agreements with borrowers and guarantors through the regular legal process, bankruptcy procedures and in certain occasions, out of court transactions. These liquidation agreements, in general, contemplate the following conditions: (1) consent to judgment by the borrowers and guarantors; (2) acknowledgement by the borrower of the debt, its liquidity and maturity; and (3) acknowledgment of the default in payments. The contractual interest rate is not reduced and continues to accrue during the term of the agreement. At the end of the period, the borrower is obligated to remit all amounts due or be subject to the Corporation’s exercise of its foreclosure rights and further collection efforts. Likewise, the borrower’s failure to make stipulated payments will grant the Corporation the ability to exercise its foreclosure rights. This strategy tends to expedite the foreclosure process, resulting in a more effective and efficient collection process. Although in general, these liquidation agreements do not contemplate the forgiveness of principal or interest as debtor is required to cover all outstanding amounts when the agreement becomes due, it could be construed that the Corporation has granted a concession by temporarily accepting a payment schedule that is different from the contractual payment schedule. Accordingly, loans under these program agreements are considered TDRs.

Loans modified in a TDR that are not accounted pursuant to ASC Subtopic 310-30 are typically already in non-accrual status at the time of the modification and partial charge-offs have in some cases already been taken against the outstanding loan balance. The TDR loan continues in non-accrual status until the borrower has demonstrated a willingness and ability to make the restructured loan payments (generally at least six months of sustained performance after the modification (or one year for loans providing for quarterly or semi-annual payments)) and management has concluded that it is probable that the borrower would not be in payment default in the foreseeable future.

Loans modified in a TDR may have the financial effect to the Corporation of increasing the specific allowance for loan losses associated with the loan. Consumer and residential mortgage loans modified under the Corporation’s loss mitigation programs that are determined to be TDRs are individually evaluated for impairment based on an analysis of discounted cash flows.

For consumer and mortgage loans that are modified with regard to payment terms and which constitute TDRs, the discounted cash flow value method is used as the impairment valuation is more appropriately calculated based on the ongoing cash flow from the individuals rather than the liquidation of the asset. The computations give consideration to probability of defaults and loss-given-foreclosure on the related estimated cash flows.

Commercial and construction loans that have been modified as part of loss mitigation efforts are evaluated individually for impairment. The vast majority of the Corporation’s modified commercial loans are measured for impairment using the estimated fair value of the collateral, as these are normally considered as collateral dependent loans. The Corporation may also measure commercial loans at their estimated realizable values determined by discounting the expected future cash flows. Construction loans that have been modified are also accounted for as collateral dependent loans. The Corporation determines the fair value measurement dependent upon its exit strategy for the particular asset(s) acquired in foreclosure.

The following tables present the non-covered and covered loans classified as TDRs according to their accruing status at December 31, 2015 and December 31, 2014.

Popular, Inc.
Non-Covered Loans
December 31, 2015 December 31, 2014
(In thousands)AccruingNon-AccruingTotalRelated AllowanceAccruingNon-AccruingTotalRelated Allowance
Commercial$166,415$88,117$254,532$37,355$153,380$150,069$303,449$57,465
Construction2212,2592,4802644535,4885,941363
Mortgage644,013130,483774,49644,029556,346116,465672,81146,111
Leases1,7916092,4005737752,2483,023770
Consumer104,63012,805117,43523,963107,53014,848122,37828,161
Total$917,070$234,273$1,151,343$106,184$818,484$289,118$1,107,602$132,870

Popular, Inc.
Covered Loans
December 31, 2015 December 31, 2014
(In thousands)AccruingNon-AccruingTotalRelated AllowanceAccruingNon-AccruingTotalRelated Allowance
Commercial$-$-$-$-$1,689$3,257$4,946$-
Construction-----2,4192,419-
Mortgage3,3283,2686,596-3,6293,9907,619-
Consumer----26531-
Total$3,328$3,268$6,596$-$5,344$9,671$15,015$-

The following tables present the loan count by type of modification for those loans modified in a TDR during the years ended December 31, 2015 and 2014.

Puerto Rico
For the year ended December 31, 2015
Reduction in interest rateExtension of maturity dateCombination of reduction in interest rate and extension of maturity dateOther
Commercial multi-family-2--
Commercial real estate non-owner occupied912--
Commercial real estate owner occupied3920--
Commercial and industrial3218--
Construction11--
Mortgage5753392112
Leasing-716-
Consumer:
Credit cards802--700
Personal1,01229-1
Auto-113-
Other49---
Total2,001153411813

U.S. mainland
For the year ended December 31, 2015
Reduction in interest rateExtension of maturity dateCombination of reduction in interest rate and extension of maturity dateOther
Mortgage-3261
Consumer:
HELOCs-112
Personal-2--
Total-6273

Popular, Inc.
For the year ended December 31, 2015
Reduction in interest rateExtension of maturity dateCombination of reduction in interest rate and extension of maturity dateOther
Commercial multi-family-2--
Commercial real estate non-owner occupied912--
Commercial real estate owner occupied3920--
Commercial and industrial3218--
Construction11--
Mortgage5756418113
Leasing-716-
Consumer:
Credit cards802--700
HELOCs-112
Personal1,01231-1
Auto-113-
Other49---
Total2,001159438816

Puerto Rico
For the year ended December 31, 2014
Reduction in interest rateExtension of maturity dateCombination of reduction in interest rate and extension of maturity dateOther
Commercial real estate non-owner occupied58--
Commercial real estate owner occupied2512--
Commercial and industrial3743--
Construction-4--
Mortgage5261413142
Leasing-1548-
Consumer:
Credit cards1,070--653
Personal95571-6
Auto-135-
Other103--2
Total2,247227466803

U.S. mainland
For the year ended December 31, 2014
Reduction in interest rateExtension of maturity dateCombination of reduction in interest rate and extension of maturity dateOther
Mortgage--18-
Consumer:
HELOCs5---
Total5-18-

Popular, Inc.
For the year ended December 31, 2014
Reduction in interest rateExtension of maturity dateCombination of reduction in interest rate and extension of maturity dateOther
Commercial real estate non-owner occupied58--
Commercial real estate owner occupied2512--
Commercial and industrial3743--
Construction-4--
Mortgage5261431142
Leasing-1548-
Consumer:
Credit cards1,070--653
HELOCs5---
Personal95571-6
Auto-135-
Other103--2
Total2,252227484803

The following tables present by class, quantitative information related to loans modified as TDRs during the years ended December 31, 2015 and 2014.

Puerto Rico
For the year ended December 31, 2015
(Dollars in thousands)Loan countPre-modification outstanding recorded investmentPost-modification outstanding recorded investmentIncrease (decrease) in the allowance for loan losses as a result of modification
Commercial multi-family2$551$551$2
Commercial real estate non-owner occupied2169,44269,59514,339
Commercial real estate owner occupied5920,32319,195889
Commercial and industrial5022,81823,757(6,994)
Construction2308298(170)
Mortgage61450,78966,7155,304
Leasing23651651148
Consumer:
Credit cards1,50212,85714,5522,238
Personal1,04217,64117,7043,768
Auto1414219935
Other4912113220
Total3,378$195,643$213,349$19,579

U.S. mainland
For the year ended December 31, 2015
(Dollars in thousands)Loan countPre-modification outstanding recorded investmentPost-modification outstanding recorded investmentIncrease (decrease) in the allowance for loan losses as a result of modification
Mortgage30$2,786$3,812$824
Consumer:
HELOCs419729579
Personal230303
Total36$3,013$4,137$906

Popular, Inc.
For the years ended December 31, 2015
(Dollars in thousands)Loan countPre-modification outstanding recorded investmentPost-modification outstanding recorded investmentIncrease (decrease) in the allowance for loan losses as a result of modification
Commercial multi-family2$551$551$2
Commercial real estate non-owner occupied2169,44269,59514,339
Commercial real estate owner occupied5920,32319,195889
Commercial and industrial5022,81823,757(6,994)
Construction2308298(170)
Mortgage64453,57570,5276,128
Leasing23651651148
Consumer:
Credit cards1,50212,85714,5522,238
HELOCs419729579
Personal1,04417,67117,7343,771
Auto1414219935
Other4912113220
Total3,414$198,656$217,486$20,485

Puerto Rico
For the year ended December 31, 2014
(Dollars in thousands)Loan countPre-modification outstanding recorded investmentPost-modification outstanding recorded investmentIncrease (decrease) in the allowance for loan losses as a result of modification
Commercial real estate non-owner occupied13$17,565$17,645$(865)
Commercial real estate owner occupied3748,40347,7542,002
Commercial and industrial80130,818129,5616,728
Construction411,35811,485(570)
Mortgage66898,77198,0314,292
Leasing631,6281,632361
Consumer:
Credit cards1,72314,20716,1932,584
Personal1,03217,81417,8813,935
Auto1827828916
Other10532531957
Total3,743$341,167$340,790$18,540

U.S. mainland
For the year ended December 31, 2014
(Dollars in thousands)Loan countPre-modification outstanding recorded investmentPost-modification outstanding recorded investmentIncrease (decrease) in the allowance for loan losses as a result of modification
Mortgage18$2,342$2,603$364
Consumer:
HELOCs525125067
Total23$2,593$2,853$431

Popular, Inc.
For the year ended December 31, 2014
(Dollars in thousands)Loan countPre-modification outstanding recorded investmentPost-modification outstanding recorded investmentIncrease (decrease) in the allowance for loan losses as a result of modification
Commercial real estate non-owner occupied13$17,565$17,645$(865)
Commercial real estate owner occupied3748,40347,7542,002
Commercial and industrial80130,818129,5616,728
Construction411,35811,485(570)
Mortgage686101,113100,6344,656
Leasing631,6281,632361
Consumer:
Credit cards1,72314,20716,1932,584
HELOCs525125067
Personal1,03217,81417,8813,935
Auto1827828916
Other10532531957
Total3,766$343,760$343,643$18,971

During the years ended December 31, 2015 and 2014, eleven loans with an aggregate unpaid principal balance of $10.8 million and six loans of $10.1 million, respectively, were restructured into multiple notes (“Note A / B split”).  The Corporation recorded $747 thousand charge-offs as part of those loan restructurings during the twelve months ended December 31, 2015 (December 31, 2014 - $2.1 million).  The restructuring of those loans was made after analyzing the borrowers’ capacity to repay the debt, collateral and ability to perform under the modified terms. The recorded investment on those commercial TDRs amounted to approximately $2.7 million at December 31, 2015 (December 31, 2014 - $2.9 million) with a related allowance for loan losses amounting to approximately $330 thousand (December 31, 2014 - $166 thousand).

The following tables present by class, TDRs that were subject to payment default and that had been modified as a TDR during the twelve months preceding the default date. Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or charged-off, whichever occurs first. The recorded investment at December 31, 2015 is inclusive of all partial paydowns and charge-offs since the modification date. Loans modified as a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

Puerto Rico
Defaulted during the year ended December 31, 2015
(Dollars in thousands)Loan countRecorded investment as of first default date
Commercial real estate non-owner occupied3$7,269
Commercial real estate owner occupied1291
Commercial and industrial71,990
Construction31,442
Mortgage18728,007
Consumer:
Credit cards4154,185
Personal973,006
Auto697
Other21
Total [1]721$46,288
[1] Excludes loans for which the Corporation has entered into liquidation agreements with borrowers and guarantors and is accepting payments which differ from the contractual payment schedule. The Corporation considers these as defaulted loans and does not intent to return them to accrual status.

U.S. mainland
Defaulted during the year ended December 31, 2015
(Dollars In thousands)Loan countRecorded investment as of first default date
Mortgage2$357
Total2$357

Popular, Inc.
Defaulted during the year ended December 31, 2015
(Dollars In thousands)Loan countRecorded investment as of first default date
Commercial real estate non-owner occupied3$7,269
Commercial real estate owner occupied1291
Commercial and industrial71,990
Construction31,442
Mortgage18928,364
Consumer:
Credit cards4154,185
Personal973,006
Auto697
Other21
Total723$46,645

Puerto Rico
Defaulted during the year ended December 31, 2014
(Dollars In thousands)Loan countRecorded investment as of first default date
Commercial real estate non-owner occupied3$433
Commercial real estate owner occupied51,191
Commercial and industrial5609
Construction1952
Mortgage12522,819
Leasing872
Consumer:
Credit cards4654,176
Personal1011,331
Auto14255
Total [1]727$31,838
[1] Exclude loans for which the Corporation has entered into liquidation agreements with borrowers and guarantors and is accepting payments which differ from the contractual payment schedule. The Corporation considers these as defaulted loans and does not intent to return them to accrual status.

U.S. mainland
Defaulted during the year ended December 31, 2014
(Dollars In thousands)Loan countRecorded investment as of first default date
Commercial real estate non-owner occupied1$907
Mortgage1110
Total2$1,017

Popular, Inc.
Defaulted during the year ended December 31, 2014
(Dollars In thousands)Loan countRecorded investment as of first default date
Commercial real estate non-owner occupied4$1,340
Commercial real estate owner occupied51,191
Commercial and industrial5609
Construction1952
Mortgage12622,929
Leasing872
Consumer:
Credit cards4654,176
Personal1011,331
Auto14255
Total729$32,855

Commercial, consumer and mortgage loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default.  If loans modified in a TDR subsequently default, the Corporation evaluates the loan for possible further impairment.  The allowance for loan losses may be increased or partial charge-offs may be taken to further write-down the carrying value of the loan.

Credit Quality

The Corporation has defined a risk rating system to assign a rating to all credit exposures, particularly for the commercial and construction loan portfolios. Risk ratings in the aggregate provide the Corporation’s management the asset quality profile for the loan portfolio. The risk rating system provides for the assignment of ratings at the obligor level based on the financial condition of the borrower. The Corporation’s consumer and mortgage loans are not subject to the risk rating system. Consumer and mortgage loans are classified substandard or loss based on their delinquency status. All other consumer and mortgage loans that are not classified as substandard or loss would be considered “unrated”.

The Corporation’s obligor risk rating scales range from rating 1 (Excellent) to rating 14 (Loss). The obligor risk rating reflects the risk of payment default of a borrower in the ordinary course of business.

Pass Credit Classifications:

Pass (Scales 1 through 8) – Loans classified as pass have a well defined primary source of repayment, with no apparent risk, strong financial position, minimal operating risk, profitability, liquidity and strong capitalization.

Watch (Scale 9) – Loans classified as watch have acceptable business credit, but borrower’s operations, cash flow or financial condition evidence more than average risk, requires above average levels of supervision and attention from Loan Officers.

Special Mention (Scale 10) - Loans classified as special mention have potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Corporation’s credit position at some future date. 

Adversely Classified Classifications:

Substandard (Scales 11 and 12) - Loans classified as substandard are deemed to be inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any.  Loans classified as such have well-defined weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful (Scale 13) - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the additional characteristic that the weaknesses make the collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. 

Loss (Scale 14) - Uncollectible and of such little value that continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be effected in the future.

Risk ratings scales 10 through 14 conform to regulatory ratings. The assignment of the obligor risk rating is based on relevant information about the ability of borrowers to service their debts such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.

The Corporation periodically reviews its loans classification to evaluate if they are properly classified, and to determine impairment, if any. The frequency of these reviews will depend on the amount of the aggregate outstanding debt, and the risk rating classification of the obligor. In addition, during the renewal and annual review process of applicable credit facilities, the Corporation evaluates the corresponding loan grades.

The Corporation has a Loan Review Group that reports directly to the Corporation’s Risk Management Committee and administratively to the Chief Risk Officer, which performs annual comprehensive credit process reviews of all lending groups in BPPR. This group evaluates the credit risk profile of each originating unit along with each unit’s credit administration effectiveness, including the assessment of the risk rating representative of the current credit quality of the loans, and the evaluation of collateral documentation. The monitoring performed by this group contributes to assess compliance with credit policies and underwriting standards, determine the current level of credit risk, evaluate the effectiveness of the credit management process and identify control deficiencies that may arise in the credit-granting process. Based on its findings, the Loan Review Group recommends corrective actions, if necessary, that help in maintaining a sound credit process. The Loan Review Group reports the results of the credit process reviews to the Risk Management Committee of the Corporation’s Board of Directors.

The following table presents the outstanding balance, net of unearned income, of non-covered loans held-in-portfolio based on the Corporation’s assignment of obligor risk ratings as defined at December 31, 2015 and 2014.

December 31, 2015
SpecialPass/
(In thousands)WatchMentionSubstandardDoubtfulLossSub-totalUnratedTotal
Puerto Rico[1]
Commercial multi-family$1,750$1,280$8,103$-$-$11,133$121,013$132,146
Commercial real estate non-owner occupied319,564423,095399,076--1,141,7351,527,3572,669,092
Commercial real estate owner occupied316,079162,395436,4421,915-916,831992,4131,909,244
Commercial and industrial187,620146,216256,82169029591,3762,066,3612,657,737
Total Commercial825,013732,9861,100,4422,605292,661,0754,707,1447,368,219
Construction7,2695,52219,806--32,59768,351100,948
Mortgage4,8102,794238,002--245,6065,881,8856,127,491
Leasing--3,009--3,009624,641627,650
Consumer:
Credit cards--19,098--19,0981,109,2471,128,345
HELOCs--394--39410,29410,688
Personal1,6061,44823,116--26,1701,176,6651,202,835
Auto--11,609-3011,639804,311815,950
Other --18,656-57519,231169,253188,484
Total Consumer1,6061,44872,873-60576,5323,269,7703,346,302
Total Puerto Rico$838,698$742,750$1,434,132$2,605$634$3,018,819$14,551,791$17,570,610
U.S. mainland
Commercial multi-family$14,129$7,189$427$-$-$21,745$672,188$693,933
Commercial real estate non-owner occupied57,4506,74116,646--80,837882,186963,023
Commercial real estate owner occupied11,9781,0742,967--16,019186,325202,344
Commercial and industrial10,8275,344131,933--148,104723,540871,644
Total Commercial94,38420,348151,973--266,7052,464,2392,730,944
Construction15,09116,94818,856--50,895529,263580,158
Mortgage--13,537--13,537895,053908,590
Legacy1,8231,9736,134--9,93054,50664,436
Consumer:
Credit cards------13,93513,935
HELOCs--1,550-2,6264,176300,308304,484
Personal--637-6031,240171,386172,626
Auto------2828
Other ----55299304
Total Consumer--2,187-3,2345,421485,956491,377
Total U.S. mainland$111,298$39,269$192,687$-$3,234$346,488$4,429,017$4,775,505
Popular, Inc.
Commercial multi-family$15,879$8,469$8,530$-$-$32,878$793,201$826,079
Commercial real estate non-owner occupied377,014429,836415,722--1,222,5722,409,5433,632,115
Commercial real estate owner occupied328,057163,469439,4091,915-932,8501,178,7382,111,588
Commercial and industrial198,447151,560388,75469029739,4802,789,9013,529,381
Total Commercial919,397753,3341,252,4152,605292,927,7807,171,38310,099,163
Construction22,36022,47038,662--83,492597,614681,106
Mortgage4,8102,794251,539--259,1436,776,9387,036,081
Legacy1,8231,9736,134--9,93054,50664,436
Leasing--3,009--3,009624,641627,650
Consumer:
Credit cards--19,098--19,0981,123,1821,142,280
HELOCs--1,944-2,6264,570310,602315,172
Personal1,6061,44823,753-60327,4101,348,0511,375,461
Auto--11,609-3011,639804,339815,978
Other --18,656-58019,236169,552188,788
Total Consumer1,6061,44875,060-3,83981,9533,755,7263,837,679
Total Popular, Inc.$949,996$782,019$1,626,819$2,605$3,868$3,365,307$18,980,808$22,346,115
The following table presents the weighted average obligor risk rating at December 31, 2015 for those classifications that consider a range of rating scales.
Weighted average obligor risk rating(Scales 11 and 12)(Scales 1 through 8)
Puerto Rico:[1]SubstandardPass
Commercial multi-family11.136.04
Commercial real estate non-owner occupied11.096.67
Commercial real estate owner occupied11.237.08
Commercial and industrial11.157.13
Total Commercial11.166.95
Construction11.187.56
U.S. mainland:SubstandardPass
Commercial multi-family11.007.15
Commercial real estate non-owner occupied11.026.92
Commercial real estate owner occupied11.077.23
Commercial and industrial11.576.24
Total Commercial11.506.81
Construction11.007.79
Legacy11.117.78

[1]Excludes covered loans acquired in the Westernbank FDIC-assisted transaction.

December 31, 2014
SpecialPass/
(In thousands)WatchMentionSubstandardDoubtfulLossSub-totalUnratedTotal
Puerto Rico[1]
Commercial multi-family$2,306$5,021$3,186$-$-$10,513$69,564$80,077
Commercial real estate non-owner occupied171,771144,104169,900--485,7751,527,8042,013,579
Commercial real estate owner occupied212,236144,536306,0143,595-666,381806,9811,473,362
Commercial and industrial421,332367,834272,8808492551,063,1501,744,6352,807,785
Total Commercial807,645661,495751,9804,4442552,225,8194,148,9846,374,803
Construction4,6126,20416,908--27,724131,660159,384
Mortgage--218,680--218,6805,231,8215,450,501
Leasing--3,102--3,102561,287564,389
Consumer:
Credit cards--21,070--21,0701,119,0941,140,164
HELOCs--8,186-78,1935,20713,400
Personal--8,380-778,4571,254,0761,262,533
Auto--11,348-4011,388755,908767,296
Other --2,130-1,7353,865201,779205,644
Total Consumer--51,114-1,85952,9733,336,0643,389,037
Total Puerto Rico$812,257$667,699$1,041,784$4,444$2,114$2,528,298$13,409,816$15,938,114
U.S. mainland
Commercial multi-family$11,283$6,818$13,653$-$-$31,754$375,449$407,203
Commercial real estate non-owner occupied17,4248,74513,446--39,615472,952512,567
Commercial real estate owner occupied24,2844,7074,672--33,663160,242193,905
Commercial and industrial5,3572,5487,988--15,893629,896645,789
Total Commercial58,34822,81839,759--120,9251,638,5391,759,464
Construction------92,43692,436
Mortgage--23,100--23,1001,029,2851,052,385
Legacy7,9022,4919,204--19,59761,22180,818
Consumer:
Credit cards------15,06515,065
HELOCs--2,457-1,6324,089348,673352,762
Personal--571-8351,406111,513112,919
Auto------7373
Other --7--7408415
Total Consumer--3,035-2,4675,502475,732481,234
Total U.S. mainland$66,250$25,309$75,098$-$2,467$169,124$3,297,213$3,466,337
Popular, Inc.
Commercial multi-family$13,589$11,839$16,839$-$-$42,267$445,013$487,280
Commercial real estate non-owner occupied189,195152,849183,346--525,3902,000,7562,526,146
Commercial real estate owner occupied236,520149,243310,6863,595-700,044967,2231,667,267
Commercial and industrial426,689370,382280,8688492551,079,0432,374,5313,453,574
Total Commercial865,993684,313791,7394,4442552,346,7445,787,5238,134,267
Construction4,6126,20416,908--27,724224,096251,820
Mortgage--241,780--241,7806,261,1066,502,886
Legacy7,9022,4919,204--19,59761,22180,818
Leasing--3,102--3,102561,287564,389
Consumer:
Credit cards--21,070--21,0701,134,1591,155,229
HELOCs--10,643-1,63912,282353,880366,162
Personal--8,951-9129,8631,365,5891,375,452
Auto--11,348-4011,388755,981767,369
Other --2,137-1,7353,872202,187206,059
Total Consumer--54,149-4,32658,4753,811,7963,870,271
Total Popular, Inc.$878,507$693,008$1,116,882$4,444$4,581$2,697,422$16,707,029$19,404,451
The following table presents the weighted average obligor risk rating at December 31, 2014 for those classifications that consider a range of rating scales.
Weighted average obligor risk rating(Scales 11 and 12)(Scales 1 through 8)
Puerto Rico:[1]SubstandardPass
Commercial multi-family11.695.63
Commercial real estate non-owner occupied11.206.83
Commercial real estate owner occupied11.286.96
Commercial and industrial11.486.89
Total Commercial11.336.87
Construction11.827.43
U.S. mainland:SubstandardPass
Commercial multi-family11.007.24
Commercial real estate non-owner occupied11.006.83
Commercial real estate owner occupied11.177.04
Commercial and industrial11.096.29
Total Commercial11.046.74
Construction-7.76
Legacy11.117.70

[1] Excludes covered loans acquired in the Westernbank FDIC-assisted transaction.