Popular Inc. in San Juan, Puerto Rico, did have some positives to report despite a quarterly loss tied to its loss-share dispute with the Federal Deposit Insurance Corp.

The $39 billion-asset company kept expenses in check and reported improved asset quality. Popular also reported a $217 million profit for the year even though it lost $4.1 million in the fourth quarter tied to a previously announced $115 million pretax charge.

Excluding loans covered by the loss-share agreement, nonperforming credits fell by $31 million, to $558 million, during the quarter. At Dec. 31, nonperforming credits represented about 2.5% of the company’s noncovered portfolio.

Popular’s U.S. banking operations, which are focused in New York, New Jersey and Florida, performed markedly better than its Puerto Rican markets, the company said. Nonperforming assets on the mainland totaled $25 million, or 0.5% of total U.S. loans, while the ratio for loans originated in Puerto Rico was 3.19%.

Cost control was a bright spot as lower operating costs more than made up for a $4.4 million increase in professional costs largely tied to legal fees. Overall, expenses fell $2.8 million from a quarter earlier.

Loans increased 2% from a year earlier to $22.8 billion, while deposits rose by 12% to $30.5 billion. Net interest income edged up 2% from a year earlier to $355 million.

“Despite the impact of the adverse FDIC arbitrations … we demonstrated the strength of our franchise by generating strong revenues and improving credit quality,” Richard Carrion, Popular’s chairman and CEO, said in a press release Tuesday. “We also continued to achieve strong loan growth in our U.S. business.”

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