Full Description

Popular, Inc., incorporated in 1984, is a diversified bank holding company. The Company operates in three target markets: Puerto Rico, the mainland United States, and processing and other technology services in Puerto Rico, Venezuela, Florida and the Dominican Republic. The Company offers in Puerto Rico an array of retail and commercial banking services, through its principal bank subsidiary, Banco Popular de Puerto Rico (Banco Popular or the Bank). The Bank accounted for 66% of the total consolidated assets of the Company at December 31, 2008. Banco Popular has the retail franchise in Puerto Rico, with 179 branches and over 600 automated teller machines (ATMs). The Bank also operates seven branches in the United States Virgin Islands, one branch in the British Virgin Islands and one branch in New York. Banco Popular has two subsidiaries: Popular Auto, Inc., a vehicle financing, leasing and daily rental company, and Popular Mortgage, Inc., a mortgage loan company with 32 offices in Puerto Rico.

Puerto Rico operations also provide financial advisory, investment and security brokerage services for institutional and retail customers through Popular Securities, Inc., a wholly owned subsidiary of the Company. Popular Securities, Inc. is a securities broker-dealer with operations in Puerto Rico. During the year ended December 31, 2008, Insurance services were offered through Popular Insurance, Inc. Also, the Company owns in Puerto Rico Popular Life RE, a reinsurance company and Popular Risk Services, Inc., an insurance broker. Insurance services are also provided through Popular Insurance V.I., Inc., a wholly owned subsidiary of Popular International Bank, Inc. (PIB) and an insurance agency. Banco Popular consolidated its consumer-finance subsidiary, Popular Finance, Inc. (Popular Finance) into its retail banking operations during 2008. Popular Finance ceased to originate loans on November 1, 2008.

The Company has other three wholly owned subsidiaries: PIB, which is engaged in providing managerial services to its subsidiaries; Popular Capital Trust I and Popular Capital Trust II. Both of which were statutory business trusts. Popular North America, Inc. (PNA) acts as a holding company for the Company’s operations in the mainland United States. PNA is a wholly owned subsidiary of PIB and an indirect wholly owned subsidiary of the Company. As of December 31, 2008, PNA had four direct subsidiaries, all of which were wholly owned: Banco Popular North America (BPNA), Popular Financial Holdings, Inc. (PFH), Popular Insurance, Inc., and EVERTEC USA, Inc.

The banking operations of BPNA in the mainland United States were based in six states. BPNA operates 33 branches in New York, 18 branches in Illinois and 50 in California, 14 branches in New Jersey and 23 branches in Florida as of December 31, 2008. On January 10, 2008, the Company completed the sale of six Houston branches of BPNA to Prosperity Bank and only retained one branch in Arlington, Texas. BPNA owns all of the outstanding stock of E-LOAN, Inc. (E-LOAN), Popular Equipment Finance, Inc., Popular FS, LLC and Popular Insurance Agency USA, Inc.

E-LOAN offers online consumer direct lending and provides an online platform to raise deposits for BPNA. Popular Equipment Finance, Inc. offers small to mid-size commercial and medical equipment financing with 22 offices in 15 states as of December 31, 2008. Popular Equipment Finance, Inc. ceased originating loans as part of the BPNA restructuring plan implemented during 2008. Popular Insurance Agency USA, Inc. acts as an insurance agent or broker for issuing insurance.

The Company’s financial transaction processing and technology services are provided through EVERTEC, Inc., EVERTEC USA, Inc., ATH Costa Rica, S.A., EVERTEC LATINOAMERICA, SOCIEDAD ANONIMA and T.I.I. Smart Solutions Inc. EVERTEC, Inc., a wholly owned subsidiary of the Corporation provides in the United States, the Caribbean and Latin America, and internally servicing many of its subsidiaries’ system infrastructures and transactional processing businesses. EVERTEC USA, Inc., a wholly owned subsidiary of PNA, offers financial transaction processing and information technology solutions in the United States mainland. ATH Costa Rica and EVERTEC LATINOAMERICA, SOCIEDAD ANONIMA, wholly owned subsidiaries of PIB, provides ATM switching and driving services in San Jose, Costa Rica. T.I.I. Smart Solutions Inc., also a wholly owned subsidiary of PIB, is a technology company based also in Costa Rica that develops financial processing software applications and sells hardware products (ATM, point of sale (POS) and communication products). In addition, PIB, a wholly owned subsidiary of the Company, has equity investments in Consorcio de Tarjetas Dominicanas (CONTADO), the merchant acquirer and ATM network in the Dominican Republic, in Banco Hipotecario Dominicano (BHD) also in the Dominican Republic and in Servicios Financieros, S.A. (Serfinsa), one of the ATM network in El Salvador.