| þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| o | TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| 1 | ||||||||
Financial Statements |
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| 2 | ||||||||
| 3 | ||||||||
| 4 — 16 | ||||||||
Supplemental Schedules |
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| 17 | ||||||||
Exhibit 23.1 — Consent of Independent Registered Public Accounting Firm |
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| EX-23.1 | ||||||||
| Note: Other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable. | ||
1
| 2010 | 2009 | |||||||
Assets |
||||||||
Investments |
||||||||
Allocated share of Master Trust net assets |
$ | 58,280,301 | $ | 57,464,490 | ||||
Investments, at fair value |
138,042,734 | 146,667,688 | ||||||
Total investments |
196,323,035 | 204,132,178 | ||||||
Receivables |
||||||||
Participant contributions |
102,987 | - | ||||||
Notes receivable from participants |
949,994 | 1,387,913 | ||||||
Dividends and interest |
240 | 107 | ||||||
Total receivables |
1,053,221 | 1,388,020 | ||||||
Cash and cash equivalents |
2,990,791 | 383,038 | ||||||
Total assets |
$ | 200,367,047 | $ | 205,903,236 | ||||
Liabilities |
||||||||
Accrued expenses |
67,300 | 67,000 | ||||||
Total liabilities |
67,300 | 67,000 | ||||||
Net assets available for benefits |
$ | 200,299,747 | $ | 205,836,236 | ||||
2
Additions to assets attributed to |
||||
Investment income (loss) |
||||
Net apreciation in fair value of investments
|
$ | 27,453,622 | ||
Allocated share of Master Trust investment activities
|
6,041,222 | |||
Interest and dividends
|
1,711,985 | |||
Total investment gain
|
35,206,829 | |||
Interest income on notes receivable from participants
|
55,613 | |||
Contributions |
||||
Participants
|
12,376,762 | |||
Rollovers from other qualified plans
|
477,970 | |||
Total contributions
|
12,854,732 | |||
Total additions
|
48,117,174 | |||
Deductions from assets attributed to |
||||
Benefits and withdrawals paid to participants, including
rollover distributions
|
53,586,363 | |||
Administrative expenses
|
67,300 | |||
Total deductions
|
53,653,663 | |||
Net decrease
|
(5,536,489 | ) | ||
Net assets available for benefits |
||||
Beginning of year
|
205,836,236 | |||
End of year
|
$ | 200,299,747 | ||
3
| Note 1. | Description of Plan | |
| The following description of the Popular, Inc. Puerto Rico Savings and Investment Plan (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of its provisions. | ||
| Plan Description | ||
| The Plan is sponsored by Popular, Inc. (the “Corporation”). The Plan is a defined contribution plan covering substantially all employees of the Corporation and its affiliates (the “Companies”), who have one month of service, are at least eighteen years old and are residents of the Commonwealth of Puerto Rico. The Plan was established for the purpose of providing retirement benefits to employees and to encourage and assist them in adopting a regular savings plan that qualifies under the applicable income tax laws of the Commonwealth of Puerto Rico. The Plan provides the participants the ability to invest in mutual funds and common stock of the Corporation. The Plan is subject to the provisions of Employee Retirement Income Security Act of 1974 (“ERISA”). | ||
| Plan Amendments | ||
| There were no plan amendments during plan year 2010. | ||
| Master Trust | ||
| The Banco Popular de Puerto Rico Balance Fund Master Trust (the “Master Trust”) serves as a funding vehicle for certain commingled assets of the Plan and the Banco Popular de Puerto Rico Retirement Plan, Retirement Restoration Plan and EVERTEC Savings and Investment Plan. Accordingly, certain assets of the Plan are maintained, for investment purposes only, on a commingled basis with the assets of the BPPR Retirement Plan in a Master Trust. Neither plan has any interest in the specific assets of the Master Trust, but maintains beneficial interests in such assets. The portion of assets, net earnings, gains and/or losses and administrative expenses allocable to each plan is based upon the relationship of the Plan’s beneficial interest in the Master Trust to the total beneficial interest of all plans in the Master Trust. | ||
| Contributions | ||
| At December 31, 2010, Plan participants could authorize the Companies to make pre-tax deductions ranging from 1% to 70% and after-tax payroll deductions ranging from 1% to 10% of their monthly compensation, as defined. At no time may participant’s pre-tax contributions exceed the 1165 (e) established legal limit ($9,000 for 2010 and 2009). Employees are automatically enrolled in the Plan at the pre-tax contribution rate of 2% of annual compensation and may change their contribution rate at any time. | ||
| The Companies matched up to 100% of the first 3% of total cash compensation contributed on a pre-tax basis, plus 50% of the next 2% contributed pre-tax. If pre-tax contributions exceeded the legal limit, the excess pre-tax contributions were recharacterized as “after-tax” and were eligible for company match up to the maximum possible match of 4% of compensation. Matching contributions were invested pursuant to each participant’s investment directions for elective deferrals. On March 20, 2009 all matching contributions were suspended. | ||
| In addition, the Corporation may make discretionary contributions to its own employees out of its net profits in such amounts as each subsidiary’s Board of Directors may determine. There were no profit sharing contributions for the year 2010. | ||
| Participant Accounts | ||
| Each participant account is credited with its contribution and allocation of: (a) its own Company matching and profit sharing contribution and (b) plan earnings. Allocations are based on |
4
| participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. | ||
| Vesting | ||
| Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Vesting in the Companies’ matching and discretionary profit sharing contributions plus actual earnings thereon is based on years of service. These contributions and actual earnings thereon vest in accordance with the following schedule: |
| Years of Service | Vesting % | |||
Less than 1 |
0 | |||
At least 1 |
20 | |||
At least 2 |
40 | |||
At least 3 |
60 | |||
At least 4 |
80 | |||
5 or more |
100 | |||
| Payment of Benefits | ||
| Plan participants are permitted to make withdrawals from the Plan from after-tax contributions, subject to provisions in the Plan agreement. If a participant suffers financial hardship, as defined in the Plan agreement, the participant may request a withdrawal from his/her pre-tax contributions. Upon termination of service due to disability, retirement or other reasons, a participant may elect to receive either a lump sum distribution in cash, recurring benefit payments, shares of Popular, Inc. common stock, if applicable, or a combination of elections. In the case of participant termination because of death, the entire vested amount is paid to the person or persons legally entitled thereto. | ||
| Notes Receivable from Participants | ||
| The Plan does not allow participants to take loans from their accounts. However, during 2006 the Plan was amended to allow active participants to take a one-time loan from the Plan collateralized by their account balances for the payment of the 5% tax on their Savings Plan account balance and Banco Popular de Puerto Rico Retirement Plan accrued benefits as provided by Act 87 of May 13, 2006. Subsequent to December 31, 2006, the plan does not allow participants to take loans. | ||
| As of December 31, 2010, notes receivable from participants amounted to $949,994, which is the unpaid principal balance of the loans issued during 2006, plus any accrued but unpaid interest. | ||
| Plan Expenses and Administration | ||
| The Plan is administered by the Popular, Inc. Benefits Committee which, in turn, may delegate certain administrative functions to other committees and/or officers of the Corporation. The named fiduciary of the Plan for purposes of investment-related matters is the Popular, Inc. Corporate Investment Committee. | ||
| Contributions are held and managed by Banco Popular de Puerto Rico as trustee and recordkeeper of the Plan. Unless otherwise paid by the Companies, expenses of the Plan are borne by the Plan. | ||
| Forfeited Accounts | ||
| Forfeited balances of terminated participants’ non-vested accounts can be used to pay administrative expenses or, at the Companies’ discretion, redistributed among participants after a five (5) year severance period. During the severance period, if the terminated participant is |
5
| reemployed by the Companies, the dollar value at the date of reemployment of such forfeited amounts shall be restored to the participant’s account if the reemployed participant repays to the Plan an amount equal to the dollar amount of his/her vested balance distributed upon termination. | ||
| During 2010, the Companies’ used forfeitures of $67,300 to pay administrative expenses that were properly accrued in 2009. For the year ended December 31, 2010, $67,300 was accrued related to administrative expenses that are expected to be paid during 2011. | ||
| Forfeited non-vested accounts amounted to $255,118 and $255,433 at December 31, 2010 and 2009, respectively. | ||
| Non-Participant Directed Investments | ||
| At December 31, 2010, there were no non-participant directed investments in the Plan. | ||
| New Accounting Pronouncements | ||
| In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-06, “Fair Value Measurements and Disclosures (ASC Topic 820) — Improving Disclosures about Fair Value Measurements.” The standard added new requirements for disclosures about transfers into and out of Levels 1 and 2 and clarified existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value. The portion of this standard related to these items was effective for the Plan in 2010 and its adoption did not have a significant impact on the financial statements. In addition, the standard added requirements for separate disclosures about the activity relating to Level 3 fair value measurements effective for the Plan on January 1, 2011. | ||
| In September 2010, the FASB issued ASU 2010-25, “Reporting Loans to Participants by Defined Contribution Pension Plans” to clarify how loans to participants should be classified and measure by defined contribution plans. ASU 2010-25 requires that participant loans be classified as notes receivable from participants, which are segregated from plan investments and measured at their unpaid principal balance plus any accrued but unpaid interest. The guidance is effective for fiscal years ending after December 15, 2010 on a retroactive basis. The Plan adopted this guidance in its December 31, 2010 financial statements and has reclassified participant loans of $1,387,913 for the year ended December 31, 2009 from investments to notes receivable from participants. | ||
| In May 2011, the FASB issued ASU 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS”. ASU 2011-04 is intended to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRS. The amendments are of two types: (i) those that clarify the Board’s intent about the application of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The update is effective for annual periods beginning after December 15, 2011. Plan management does not believe the adoption of this update will have a material impact on the plan’s financial statements. |
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| Note 2. | Summary of Significant Accounting Policies | |
| The more significant accounting policies followed by the Plan in the preparation of the financial statements are summarized below: | ||
| Basis of Presentation | ||
| The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. A description of the most significant accounting policies follows. | ||
| Reclassifications | ||
| For purposes of comparability, certain prior period amounts have been reclassified to conform to the 2010 presentation. | ||
| Use of Estimates | ||
| The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. | ||
| Investment Valuation and Income Recognition | ||
| Plan investments are presented at fair value. Shares of registered investment companies are presented at quoted market prices which represent the net asset value of shares held by the Plan at the reporting date. Popular, Inc.’s common stock is presented at its market price. The Plan presents in the statement of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. Purchases and sales of securities are recorded on the trade date basis. Dividends are recorded on the ex-dividend date and interest is recorded under the accrual basis and credited to each participant’s account, as defined. | ||
| The Plan’s investment in the Master Trust is stated at fair value. Purchases and sales of securities are recorded on the trade date basis. | ||
| The net appreciation of the investment in the Master Trust is included as part of the allocated share of Master Trust investment activities in the statement of changes in net assets available for benefits. This includes the realized gains or (losses) and the unrealized appreciation (depreciation) on the Master Trust’s assets. Refer to Note 10. | ||
| The Plan determines the fair values of its investments based on the fair value framework established in the Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures”, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurements date. The standard describes three levels of inputs that may be used to measure fair value which are: (1) quoted market prices for identical assets or liabilities in active markets, (2) observable market-based inputs or unobservable inputs that are corroborated by market data, and (3) unobservable inputs that are not corroborated by market data. The fair value hierarchy ranks the quality and reliability of the information used to |
7
| determine fair values. Refer to Note 4 to these financial statements for the ASC 820 disclosures required as of December 31, 2010 and 2009. | ||
| Contributions | ||
| Employee and employer matching contributions are recorded in the period in which the Companies make the payroll deductions. | ||
| Discretionary contributions are recorded in the period in which they are earned by the participant as determined by the Corporation’s Board of Directors. | ||
| Transfer of assets to other plans | ||
| Terminated employees or retirees may elect to transfer their savings to other plans qualified by the Puerto Rico Department of the Treasury. | ||
| Payment of benefits | ||
| Benefits are recorded when paid. |
| Note 3. | Plan investments |
| The following table presents the Plan’s investments that represent five percent or more of the Plan’s net assets at December 31: |
| 2010 | 2009 | |||||||||||||||
| # of | # of | |||||||||||||||
| shares | Value | shares | Value | |||||||||||||
Master Trust |
327,509 | $ | 58,280,301 | 360,098 | $ | 57,464,490 | ||||||||||
Mutual funds |
||||||||||||||||
Federated Government
Obligations Fund |
22,148,130 | $ | 22,148,130 | 30,767,889 | $ | 30,767,889 | ||||||||||
Principal Invs Fund Life
2020 Cl A |
* | * | 1,137,386 | $ | 11,885,685 | |||||||||||
Common stock |
||||||||||||||||
Popular, Inc. |
18,183,824 | $ | 57,097,209 | 20,144,999 | $ | 45,527,699 | ||||||||||
| * | Investment did not exceed 5% or more of the Plan’s assets at December 31, 2010. |
| During 2010, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year, and excluding the Master Trust) appreciated in value as follows: |
Popular, Inc. common stock |
$ | 18,331,749 | ||
Mutual funds |
9,121,873 | |||
| $ | 27,453,622 | |||
8
| Note 4. | Fair Value Measurements | |
| The Plan measures fair value as required by ASC 820, “Fair Value Measurements and Disclosures” which provides a framework for measuring fair value under accounting principles generally accepted in the United States. Under ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. | ||
| ASC 820 establishes a fair value hierarchy that prioritizes the inputs and valuation techniques used to measure fair value into three levels in order to increase consistency and comparability in fair value measurements and disclosures. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for the fair value measurement are observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs reflect the Plan’s estimates about assumptions that market participants would use in pricing the asset or liability based on the best information available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: | ||
| Level 1 — Unadjusted quoted prices in active markets for identical assets that the Plan has the ability to access at the measurement date. Valuation on these instruments does not required a significant degree of judgment since valuations are based on quoted prices that are readily available in an active market. | ||
| Level 2 — Quoted prices other than those included in Level 1 that are observable either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or that can be corroborated by observable market data for substantially the full term of the financial instrument. | ||
| Level 3 — Inputs are unobservable and significant to the fair value measurement. Unobservable inputs reflect the Plan’s own assumptions about assumptions that market participants would use in pricing the asset or liability. | ||
| Following is a description of the Plan’s valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2010 and 2009. | ||
| Cash & Cash Equivalents: The carrying amount of cash and cash equivalents are reasonable estimates of the fair value due to its short term maturity. | ||
| Equity securities: Equity securities with quoted market prices obtained from an active exchange market are classified as Level 1. | ||
| Mutual Funds: Investments in mutual funds are valued at the net asset value (NAV) of shares held by the plan at year end. These securities are classified as Level 2. | ||
| The preceding methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. |
9
| The following tables set forth by level, within the fair value hierarchy, the Plan’s net assets at fair value as of December 31, 2010 and December 31, 2009. The following tables do not include the plan’s interest in the Master Trust because that information is presented in a separate table (See Note 10). |
| Assets at Fair Value as of December 31, 2010 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Popular, Inc. Common Stock |
$ | 57,097,209 | $ | — | $ | — | $ | 57,097,209 | ||||||||
Investments in Mutual Funds: |
||||||||||||||||
Money Market Funds |
22,148,130 | 22,148,130 | ||||||||||||||
Fixed Income Funds |
26,148,364 | 26,148,364 | ||||||||||||||
Equity Funds |
32,649,031 | 32,649,031 | ||||||||||||||
Total assets, excluding plan
interest in Master Trust, at fair
value |
$ | 57,097,209 | $ | 80,945,525 | $ | — | $ | 138,042,734 | ||||||||
| Assets at Fair Value as of December 31, 2009 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Popular, Inc. Common Stock |
$ | 45,527,699 | $ | — | $ | — | $ | 45,527,699 | ||||||||
Investments in Mutual Funds: |
||||||||||||||||
Money Market Funds |
30,767,889 | 30,767,889 | ||||||||||||||
Fixed Income Funds |
35,686,168 | 35,686,168 | ||||||||||||||
Equity Funds |
34,685,932 | 34,685,932 | ||||||||||||||
Total assets, excluding plan
interest in Master Trust, at fair
value |
$ | 45,527,699 | $ | 101,139,989 | $ | — | $ | 146,667,688 | ||||||||
| There were no transfers in and/or out of Level 3 for financial instruments measured at fair value on a recurring basis during the years ended December 31, 2009 and 2010. There were no transfers in and/or out of Level 1 and Level 2 during the years ended December 31, 2009 and 2010. | ||
| Note 5. | Plan Termination |
| Although they have not expressed any intent to do so, each Employer of the Corporation has the right under the Plan to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, the interest of each participant in the Plan shall be fully vested and such termination shall not reduce the interest of any participating employee or their beneficiaries accrued under the Plan up to the date of such termination. |
| Note 6. | Tax Status |
| The Plan obtained a favorable determination letter from the Department of Treasury of the Commonwealth of Puerto Rico. The letter dated April 16, 2010, with effective date June 1, 2008, indicates that the Plan is designed in accordance with the applicable income tax law and is, therefore, exempt from income taxes. The Plan has been amended since June 1, 2008. The Plan Administrator, based on the Plan’s tax counsel’s advice, however, believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the income tax law. Therefore, no provision for income taxes has been included in the Plan’s financial statements. |
10
| Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the plan and recognize a tax liability (or asset) if the plan has taken an uncertain position that more likely than not would not be sustained upon examination by federal, state and/or local taxing authorities. The plan administrator has analyzed the tax positions by the plan, and has concluded that as of December 31, 2010, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The plan administrator believes it is subject to income tax examinations for 4 years including 2010. |
| Note 7. | Risks and Uncertainties | |
| The Plan’s investments are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the values of investments, it is at least reasonably possible that changes in these factors in the near term could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits. Individual participants’ accounts bear the risk of loss resulting from fluctuations in investment values. |
| Note 8. | Related-Party Transactions | |
| At December 31, 2010 and 2009, the Plan held 18,183,824 and 20,144,999 common shares of Popular, Inc., with a quoted market value of $57,097,209 and $45,527,699, respectively. These transactions are permitted party-in-interest transactions under provisions of ERISA and the regulations promulgated thereunder. | ||
| As of December 31, 2010 and 2009, the Plan held 327,509 and 360,098 shares of Master Trust Fund, with a market value of $58,280,301 and $57,464,490, respectively. These transactions are permitted party-in-interest transactions under provisions of ERISA and the regulations promulgated thereunder. | ||
| The Plan holds a time deposit open account with Banco Popular de Puerto Rico ($2,990,791 in 2010 and $383,038 in 2009). | ||
| Included in the Plan assets are notes receivable from participants. At December 31, 2010 and 2009 notes receivable from participants amounted to $949,994 and $1,387,913, respectively. For the year ended December 31, 2010 interest income related to notes receivable from participants amounted to $55,613. These transactions qualify as party-in-interest transactions permitted under provisions of ERISA. | ||
| Banco Popular de Puerto Rico, one of the Companies covered by the Plan, is acting as Trustee and Recordkeeper for the Plan. Fees paid by the Plan Sponsor for the investment management services amounted to approximately $538,275 for the year ended December 31, 2010. |
| Note 9. | Reconciliation of Financial Statements to Form 5500 | |
| The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2010 and 2009 to Form 5500: |
| 2010 | 2009 | |||||||
Net assets available for benefits per the financial statements |
$ | 200,299,747 | $ | 205,836,236 | ||||
Less: Amounts allocated to withdrawing participants |
(2,890,774 | ) | (52,985 | ) | ||||
Net assets available for benefits per the Form 5500 |
$ | 197,408,973 | $ | 205,783,251 | ||||
11
| The following is a reconciliation of benefits paid to participants per the financial statements for the period ended December 31, 2010 to Form 5500: |
Benefits paid to participants per the financial statements |
$ | 53,586,363 | ||
Add: Amounts allocated to withdrawing participants at December 31, 2010 |
2,890,774 | |||
Less: Amounts allocated to withdrawing participants at December 31, 2009 |
(52,985 | ) | ||
Benefits paid to participants per Form 5500 |
$ | 56,424,152 | ||
| For purposes of Form 5500, interest-bearing cash equivalents are classified as plan investments. The amount of interest-bearing cash equivalent classified as investment on the Form 5500 was $2,990,791 and $383,038 as of December 31, 2010 and 2009, respectively. |
| Note 10. Investment in Master Trust | ||
| A portion of the Plan’s investments are in the Master Trust which was established for the investment of assets of the Plan, as discussed on Note 1. Each participating retirement plan has an undivided interest in the Master Trust. | ||
| Investments in the Master Trust are managed by the Trust Division of the Bank and by several investment managers. Investment securities are held in safekeeping by another commercial bank and by the Trust Department of the Bank. The assets of the Master Trust are held by Banco Popular de Puerto Rico (the “Trustee”). | ||
| At December 31, 2010 and 2009, the Plan’s interest in the net assets of the Master Trust was approximately 11.34% and 12.17%, respectively. Investment income and administrative expenses relating to the Master Trust are allocated to the individual plans based upon average monthly balances invested by each plan. | ||
| Investments held in the Master Trust as of December 31, 2010 and 2009 are as follows: | ||
| 2010 | 2009 | |||||||
Obligations of the U.S. Government and its agencies |
$ | 50,416,655 | $ | 25,733,491 | ||||
Commodity fund |
17,409,418 | 16,273,937 | ||||||
Corporate Bonds and debentures |
47,262,715 | 47,791,722 | ||||||
Equity securities |
228,054,147 | 207,747,356 | ||||||
Foreign equity fund |
65,491,164 | 59,275,324 | ||||||
Index Funds — Equity |
2,267,496 | 2,971,060 | ||||||
Index Funds — Fixed income |
2,283,529 | 7,864,126 | ||||||
Mortgage backed securities |
72,959,270 | 85,920,759 | ||||||
Cash and cash equivalents |
25,925,777 | 16,443,361 | ||||||
Private equity investment |
835,706 | 893,889 | ||||||
Accrued investment income |
1,654,833 | 1,718,546 | ||||||
| 514,560,710 | 472,633,571 | |||||||
Less: Accrued Expenses |
(410,001 | ) | (404,853 | ) | ||||
Net assets in Master Trust |
$ | 514,150,709 | $ | 472,228,718 | ||||
12
| 2010 | 2009 | |||||||
Net appreciation (depreciation) in fair value of investments: |
||||||||
Obligations of the U.S. Government and its agencies |
$ | 869,355 | $ | (369,502 | ) | |||
Commodity fund |
1,918,903 | 3,657,081 | ||||||
Corporate Bonds and debentures |
1,915,984 | 5,481,001 | ||||||
Equity securities |
29,105,841 | 45,279,113 | ||||||
Foreign equity fund |
6,215,839 | 16,834,722 | ||||||
Index Funds — Equity |
386,932 | 694,352 | ||||||
Index Funds — Fixed income |
145,099 | 795,085 | ||||||
Mortgage backed securities |
859,766 | (996,980 | ) | |||||
Private equity investment |
(58,183 | ) | (55,400 | ) | ||||
Interest and dividend income |
13,271,246 | 13,073,159 | ||||||
Net appreciation in fair value of investments |
54,630,782 | 84,392,631 | ||||||
Less: Investment expenses |
(1,203,323 | ) | (1,001,798 | ) | ||||
Administrative expenses |
(131,874 | ) | (180,433 | ) | ||||
Net investment income |
$ | 53,295,585 | $ | 83,210,400 | ||||
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| Balance | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | 12/31/2010 | |||||||||||||
Obligations of the U.S. |
||||||||||||||||
Government and its agencies |
$ | — | $ | 50,416,655 | $ | — | $ | 50,416,655 | ||||||||
Commodity Fund |
— | 17,409,418 | — | 17,409,418 | ||||||||||||
Corporate bonds and debentures |
— | 47,262,715 | — | 47,262,715 | ||||||||||||
Equity securities |
228,054,147 | — | — | 228,054,147 | ||||||||||||
Foreign Equity Fund |
— | 65,491,164 | — | 65,491,164 | ||||||||||||
Index Fund — Equity |
2,267,496 | — | — | 2,267,496 | ||||||||||||
Index Fund — Fixed Income |
— | 2,283,529 | — | 2,283,529 | ||||||||||||
Mortgage backed securities |
— | 72,959,270 | — | 72,959,270 | ||||||||||||
Private equity investment |
— | — | 835,706 | 835,706 | ||||||||||||
Total |
$ | 230,321,643 | $ | 255,822,751 | $ | 835,706 | $ | 486,980,100 | ||||||||
14
| Balance | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | 12/31/2009 | |||||||||||||
Obligations of the U.S. |
||||||||||||||||
Government and its agencies |
$ | — | $ | 25,733,491 | $ | — | $ | 25,733,491 | ||||||||
Commodity Fund |
16,273,937 | 16,273,937 | ||||||||||||||
Corporate bonds and debentures |
— | 47,791,722 | — | 47,791,722 | ||||||||||||
Equity securities |
207,747,356 | — | — | 207,747,356 | ||||||||||||
Foreign Equity Fund |
— | 59,275,324 | — | 59,275,324 | ||||||||||||
Index Fund — Equity |
2,971,060 | — | — | 2,971,060 | ||||||||||||
Index Fund — Fixed Income |
— | 7,864,126 | — | 7,864,126 | ||||||||||||
Mortgage backed securities |
— | 85,920,759 | — | 85,920,759 | ||||||||||||
Private equity investment |
— | — | 893,889 | 893,889 | ||||||||||||
Total |
$ | 210,718,416 | $ | 242,859,359 | $ | 893,889 | $ | 454,471,664 | ||||||||
| Change in Unrealized Gain (Loss) relating to |
||||||||||||
| Balance as of January 1, 2010 |
instruments still held at the reporting date (1) |
Balance as of December 31, 2010 |
||||||||||
Private Equity Investment |
$ | 893,889 | $ | (58,183 | ) | $ | 835,706 | |||||
| (1) | Included in “Net depreciation in fair value of investments” in the Statement of Changes in Net Assets Available for Plan Benefits. |
15
16
| Schedule H, Line 4i — Schedule of Assets | Supplemental Schedule | |
| December 31, 2010 | Exhibit I |
| (a) | (b) Identity of Issue, Borrower, Lessor, | (c) Description of Investment | (d) Cost | (e) Current | ||||||||||||
| or Similar Party | Value | |||||||||||||||
| * | Popular Balanced Managed Fund |
Master Trust Fund 327,509 shares | ** | $ | 58,280,301 | |||||||||||
Federated Government Obligations Fund |
Mutual Fund 22,148,130 shares | ** | 22,148,130 | |||||||||||||
American Amcap Fund |
Mutual Fund 80,085 shares | ** | 1,516,023 | |||||||||||||
Eaton Vance Large Cap Value Fund |
Mutual Fund 214,474 shares | ** | 3,907,726 | |||||||||||||
MFS Research International A Equity Fund |
Mutual Fund 253,010 shares | ** | 3,850,821 | |||||||||||||
Principal
Invs Fund Life 2030 CI A |
Mutual Fund 264,162 shares | ** | 3,069,565 | |||||||||||||
Principal
Invs Fund Life 2040 CI A |
Mutual Fund 189,133 shares | ** | 2,201,510 | |||||||||||||
Principal Investors Lifetime 2050 Fund |
Mutual Fund 166,247 shares | ** | 1,888,568 | |||||||||||||
Royce Premier Fund |
Mutual Fund 312,921 shares | ** | 6,367,943 | |||||||||||||
Vanguard 500 Index Fund |
Mutual Fund 48,397 shares | ** | 5,605,425 | |||||||||||||
Vanguard Mid-Cap Index Fund |
Mutual Fund 208,835 shares | ** | 4,241,450 | |||||||||||||
Pimco Total Return Fund |
Mutual Fund 441,467 shares | ** | 4,789,918 | |||||||||||||
Principal
Invs Fund Life 2010 CI A |
Mutual Fund 669,420 shares | ** | 7,524,289 | |||||||||||||
Principal Lifetime Str In-A-Fund |
Mutual Fund 569,767 shares | ** | 6,073,719 | |||||||||||||
Principal
Invs Fund Life 2020 CI A |
Mutual Fund 661,588 shares | ** | 7,760,438 | |||||||||||||
Total Mutual Funds |
** | 80,945,525 | ||||||||||||||
| ** | ||||||||||||||||
| * | BPPR Time Deposit Open Account |
Time Deposit Variable | ** | 2,990,791 | ||||||||||||
| * | Popular, Inc. |
Common Stock 18,183,824 shares | ** | 57,097,209 | ||||||||||||
| * | Participant loans |
Participant loans with maturities ranging from 06/30/2008 to 12/31/2016 and interest rate of 5% | ** | 949,994 | ||||||||||||
| $ | 200,263,820 | |||||||||||||||
| * | Party in-interest | |
| ** | Cost is not required for participant directed investments |
17
| POPULAR, INC. PUERTO RICO SAVINGS & INVESTMENT PLAN |
||||
| (Registrant) | ||||
| Date: June 28, 2011 | By: | /s/ Eduardo J.Negrón | ||
| Eduardo J. Negrón | ||||
| Authorized Representative | ||||