Popular Inc. in San Juan, Puerto Rico, swung to a profit after reaping certain tax benefits.

The $36.8 billion-asset bank earned $597.5 million in the second quarter, compared to a loss of $511.3 million a year earlier. Earnings per share were $5.80.

Most of the profit was tied to the partial reversal of a valuation allowance on a deferred tax asset from the bank's U.S. operations, which added $544.9 million to the bottom line. 

Overall, the bank's performance was mixed, as it continues to digest the assets it acquired from Doral, the Puerto Rican bank that failed in February. Popular snagged $612 million in deposits and eight branches from that transaction.

Popular's quarterly results also reflected challenges in the bank's home territory, which is struggling with a looming debt crisis. The bank in the past year has pared down its U.S. operations, slashing its branch network and refocusing its strategy on high-growth commercial lending segments.

Net interest income climbed to $362.6 million, compared to a loss of $62.8 million a year earlier. Total loans rose 4%, to $22.6 billion. The net interest margin dipped 14 basis points, to 4.54%.

Fee-based income more than doubled, to $140.8 million, compared to $62.8 million last year. The increase came mostly from income from an FDIC loss-share agreement.

Operating expenses increased 32%, to $362.3 million, from higher property tax payments and professional fees. 

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