Popular Q3 2026 earnings rise to $242M
Unrealized debt-security losses coincided with comprehensive income of $16.6 million, compared with $330.7 million a year earlier.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Popular, Inc. reported third-quarter 2026 net income of $242.4 million, compared with $211.3 million a year earlier; diluted earnings per common share were $3.83 versus $3.14. Net interest income was $698.9 million, compared with $646.5 million, while provision for credit losses was $96.7 million versus $75.1 million.
Other comprehensive loss, net of tax, was $225.8 million. The period included $301.4 million of pre-tax unrealized holding losses on debt securities, and comprehensive income was $16.6 million, compared with $330.7 million in the third quarter of 2025. At September 30, 2026, assets were $77.7 billion, deposits were $68.7 billion and net loans held-in-portfolio were $39.2 billion. Popular declared a $0.90 common dividend per share and repurchased $178.6 million of common stock during the quarter as part of its 2026 common stock repurchase program.
For the nine months ended September 30, 2026, net cash provided by operating activities was $794.3 million, compared with $610.0 million in 2025.
2 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter net income rose to $242.4 million from $211.3 million.
- Minor pointDeclared common dividend increased to $0.90 per share from $0.75.
Negative
- Moderate pointComprehensive income was $16.6 million, versus $330.7 million a year earlier.
Filing Explained
Popular reports 62,834,136 common shares outstanding at
Key Figures
Net income: $242.4 million
Net interest income: $698.9 million
Provision for credit losses: $96.7 million
+5 more
8 metrics
Net income
$242.4 million
Quarter ended September 30, 2026; $211.3 million in 2025.
Net interest income
$698.9 million
Quarter ended September 30, 2026; $646.5 million in 2025.
Provision for credit losses
$96.7 million
Quarter ended September 30, 2026; $75.1 million in 2025.
Diluted net income per common share
$3.83 per share
Quarter ended September 30, 2026; $3.14 per share in 2025.
Comprehensive income
$16.6 million
Quarter ended September 30, 2026; $330.7 million in 2025.
Total assets
$77.7 billion
As of September 30, 2026.
Total deposits
$68.7 billion
As of September 30, 2026.
Common dividend declared
$0.90 per common share
Quarter ended September 30, 2026; $0.75 per common share in 2025.
Key Terms
Net interest income, Provision for credit losses, Debt securities available-for-sale, Debt securities held-to-maturity, +1 more
5 terms
Net interest income financial
"Net interest income"
Net interest income is the difference between the interest a financial institution earns on loans and investments and the interest it pays on deposits and borrowings. It matters to investors because it is a primary source of profit for banks and similar firms — like the gross margin on a store’s trade — and changes with loan growth, deposit costs and interest rates, so it signals core earning power and sensitivity to rate moves.
Provision for credit losses financial
"Provision for credit losses"
Provision for credit losses is an amount set aside by a financial institution to cover potential future losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution manage risks and stay financially healthy. For investors, it signals how cautious a lender is about potential loan defaults and can impact the company's profitability and financial stability.
Debt securities available-for-sale financial
"Debt securities available-for-sale, at fair value"
Debt securities held-to-maturity financial
"Debt securities held-to-maturity, at amortized cost"
Unrealized holding (losses) gains financial
"Unrealized holding (losses) gains on debt securities arising during the period"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much was BPOP's net income in Q3 2026?
Popular, Inc. reported net income of $242.4 million for the quarter ended September 30, 2026, compared with $211.3 million a year earlier. Diluted earnings per common share were $3.83 versus $3.14.
What dividend did BPOP declare for Q3 2026?
Popular declared a $0.90 dividend per common share during the quarter ended September 30, 2026. The comparable dividend declared during the 2025 quarter was $0.75 per common share.
How much cash did BPOP use in investing activities in the first nine months of 2026?
Popular reported net cash used in investing activities of $2,594.2 million for the nine months ended September 30, 2026, compared with $1,838.6 million for the same period in 2025.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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Table of Content
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
For the quarterly period ended September 30, 2026
or
Commission File Number:001-34084
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of Incorporation or organization) | (IRS Employer Identification Number) | |
(Address of principal executive offices) | (Zip code) |
(787 ) 765-9800
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
The | ||
The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit such files).
[X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller
reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Accelerated filer [ ] Non-accelerated filer [ ] | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
Common Stock, $0.01 par value, 62,399,243 shares outstanding as of November 4, 2026.
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POPULAR INC INDEX | Page |
Part I - Financial Information | 5 |
Item 1. Financial Statements | 5 |
Unaudited Consolidated Statements of Financial Condition at September 30,2026 and December 31, 2025 | 5 |
Unaudited Consolidated Statements of Operations for the quarters and nine months ended September 30, 2026 and 2025 | 6 |
Unaudited Consolidated Statements of Comprehensive Income for the quarters and nine months ended September 30, 2026 and 2025 | 7 |
Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the quarters and nine months ended September 30, 2026 and 2025 | 8 |
Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025 | 10 |
Notes to Unaudited Consolidated Financial Statements | 12 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 90 |
Item 3. Quantitative and Qualitative Disclosures about Market Risk | 123 |
Item 4. Controls and Procedures | 123 |
Part II - Other Information | 124 |
Item 1. Legal Proceedings | 124 |
Item 1A. Risk Factors | 124 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 124 |
Item 3. Defaults Upon Senior Securities | 124 |
Item 4. Mine Safety Disclosures | 124 |
Item 5. Other Information | 124 |
Item 6. Exhibits | 125 |
Signatures | 126 |
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Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation
Reform Act of 1995, including, without limitation, statements about Popular, Inc.’s (the “Corporation,” “Popular,” “we,” “us,” “our”) business,
financial condition, results of operations, plans, objectives and future performance. These statements are not guarantees of future
performance, are based on management’s current expectations and, by their nature, involve risks, uncertainties, estimates and
assumptions. Potential factors, some of which are beyond the Corporation’s control, could cause actual results to differ materially from those
expressed in, or implied by, such forward-looking statements. Risks and uncertainties include, without limitation, the effect of competitive
and economic factors, and our reaction to those factors, the adequacy of the allowance for loan losses, delinquency trends, market risk and
the impact of interest rate changes (including on our cost of deposits), capital markets conditions, capital adequacy and liquidity, and the
effect of legal and regulatory proceedings and new accounting standards on the Corporation’s financial condition and results of operations.
All statements contained herein that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “continues,”
“expect,” “estimate,” “intend,” “project” and similar expressions and future or conditional verbs such as “will,” “would,” “should,” “could,”
“might,” “can,” “may” or similar expressions are generally intended to identify forward-looking statements.
Various factors, some of which are beyond Popular’s control, could cause actual results to differ materially from those expressed in, or
implied by, such forward-looking statements. Factors that might cause such a difference include, but are not limited to:
•the rate of growth or decline in the economy and employment levels, as well as general business and economic conditions in the
geographic areas we serve and, in particular, in the Commonwealth of Puerto Rico (the “Commonwealth” or “Puerto Rico”), where
a significant portion of our business is concentrated;
•adverse economic conditions, including high levels of inflation, and geopolitical conditions, including wars and conflicts, that
adversely affect housing prices, the job market, consumer confidence and spending habits which may affect, in turn, among other
things, our level of non-performing assets, charge-offs and provision expense;
•changes in interest rates and market liquidity, which may reduce interest margins, impact funding sources, reduce loan
originations, affect our ability to originate and distribute financial products in the primary and secondary markets and impact the
value of our investment portfolio and our ability to return capital to our shareholders;
•the impact of bank failures or adverse developments at other banks and related negative media coverage of the banking industry
in general on investor and depositor sentiment regarding the stability and liquidity of banks;
•the impact of the current fiscal and economic challenges of Puerto Rico and the measures taken and to be taken by the Puerto
Rico Government and the Federally-appointed oversight board on the economy, our customers and our business;
•the amount of Puerto Rico public sector deposits held at the Corporation, whose future balances are uncertain and difficult to
predict and may be impacted by factors such as the amount of Federal funds received by the P.R. Government and the rate of
expenditure of such funds, as well as the financial condition, liquidity and cash management practices of the Puerto Rico
Government and its instrumentalities;
•unforeseen or catastrophic events, including extreme weather events such as hurricanes and other natural disasters, man-made
disasters, acts of violence, war or conflicts, or pandemics, epidemics and other health-related crises, or the fear of any such event
occurring, any of which could cause adverse consequences for our business, including, but not limited to, disruptions in our
operations;
•our ability to achieve the expected benefits from our transformation initiatives, including our ability to achieve projected earnings,
efficiencies and return on tangible common equity and accurately anticipate costs and expenses associated therewith;
•our ability to execute capital actions, including with respect to share repurchases and dividends;
•the fiscal and monetary policies of the federal government and its agencies;
•changes in federal bank regulatory and supervisory policies, including required levels of capital, liquidity, resolution-related
requirements and the impact of other proposed capital standards on our capital ratios;
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•the impact of any future U.S. government shutdown;
•changes in and uncertainty regarding federal funding, tax and trade policies, and federal rulemaking, supervision, examination
and enforcement priorities;
•adjustments to or additional Federal Deposit Insurance Corporation (“FDIC”) assessments;
•regulatory approvals that may be necessary to undertake certain actions or consummate strategic transactions, such as
acquisitions and dispositions, or for the Corporation’s subsidiaries to declare dividends, and the timing of such approvals;
•the relative strength or weakness of the consumer and commercial credit sectors and of the real estate markets in Puerto Rico
and the other markets in which our borrowers are located;
•a deterioration in the credit quality of our clients, customers and counterparties;
•the performance of the stock and bond markets;
•competition in the financial services industry;
•possible legislative, tax or regulatory changes;
•a failure in or breach of our operational or security systems or infrastructure or those of Evertec, Inc., our provider of core financial
transaction processing and information technology services, or of third parties providing services to us, including as a result of
cyberattacks, e-fraud, denial-of-services and computer intrusion, that might result in, among other things, loss or breach of
customer data, disruption of services, reputational damage or additional costs to Popular;
•changes in market rates and prices which may adversely impact the value of financial assets and liabilities;
•potential judgments, claims, damages, penalties, fines, enforcement actions and reputational damage resulting from pending or
future litigation and regulatory or government investigations or actions;
•changes in accounting standards, rules and interpretations;
•our ability to grow our core businesses;
•decisions to downsize, sell or close branches or business units or otherwise change our business mix; and
•management’s ability to identify and manage these and other risks.
Moreover, the outcome of any legal and regulatory proceedings, as discussed in “Part II, Item 1. Legal Proceedings,” is inherently uncertain
and depends on judicial interpretations of law and the findings of regulators, judges and/or juries. Investors should refer to the Corporation’s
Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”), as well as “Part II, Item 1A” of our Quarterly
Report on this Quarterly Report on Form 10-Q for a discussion of such factors and certain risks and uncertainties to which the Corporation
is subject.
All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to Popular as of the
date of this Quarterly Report on Form 10-Q and other than as required by law, including the requirements of applicable securities laws, we
assume no obligation to update or revise any such forward-looking statements to reflect occurrences or unanticipated events or
circumstances after the date of such statements.
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POPULAR, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
(In thousands, except share information) | September 30, 2026 | December 31, 2025 |
Assets: | ||
Cash and due from banks | $ | $ |
Money market investments: | ||
Time deposits with other banks | ||
Total money market investments | ||
Trading account debt securities, at fair value | ||
Debt securities available-for-sale, at fair value: | ||
Pledged securities with creditors’ right to repledge | ||
Other debt securities available-for-sale | ||
Debt securities available-for-sale | ||
Debt securities held-to-maturity, at amortized cost: | ||
Pledged securities with creditors’ right to repledge | ||
Other debt securities held-to-maturity | ||
Debt securities held-to-maturity (fair value 2026 - $ | ||
Less -Allowance for credit losses | ||
Debt securities held-to-maturity, net | ||
Equity securities (realizable value 2026 -$ | ||
Loans held-for-sale, at fair value | ||
Loans held-in-portfolio | ||
Less - Unearned income | ||
Allowance for credit losses | ||
Total loans held-in-portfolio, net | ||
Premises and equipment, net | ||
Other real estate | ||
Accrued income receivable | ||
Mortgage servicing assets, at fair value | ||
Other assets | ||
Goodwill | ||
Other intangible assets | ||
Total assets | $ | |
Liabilities and Stockholders’ Equity | ||
Liabilities: | ||
Deposits: | ||
Non-interest bearing | $ | $ |
Interest bearing | ||
Total deposits | ||
Assets sold under agreements to repurchase | ||
Other short-term borrowings | ||
Notes payable | ||
Other liabilities | ||
Total liabilities | ||
Commitments and contingencies (Refer to Note 16) | ||
Stockholders’ equity: | ||
Preferred stock, | ||
Common stock, $ (2025 - | ||
Surplus | ||
Retained earnings | ||
Treasury stock - at cost, | ( | ( |
Accumulated other comprehensive loss, net of tax | ( | ( |
Total stockholders’ equity | ||
Total liabilities and stockholders’ equity | $ | $ |
The accompanying notes are an integral part of these Consolidated Financial Statements.
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POPULAR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarters ended September 30, | Nine months ended September 30, | |||
(In thousands, except per share information) | 2026 | 2025 | 2026 | 2025 |
Interest income: | ||||
Loans | $ | $ | $ | $ |
Money market investments | ||||
Investment securities | ||||
Total interest income | ||||
Interest expense: | ||||
Deposits | ||||
Short-term borrowings | ||||
Long-term debt | ||||
Total interest expense | ||||
Net interest income | ||||
Provision for credit losses | ||||
Net interest income after provision for credit losses | ||||
Non-interest income: | ||||
Service charges on deposit accounts | ||||
Other service fees | ||||
Mortgage banking activities | ||||
Net loss, including impairment on debt securities | ( | |||
Net (loss) gain, including impairment on equity securities | ( | |||
Net (loss) gain on trading account debt securities | ( | ( | ||
Adjustments to indemnity reserves on loans sold | ||||
Other operating income | ||||
Total non-interest income | ||||
Operating expenses: | ||||
Personnel costs | ||||
Net occupancy expenses | ||||
Equipment expenses | ||||
Other taxes | ||||
Professional fees | ||||
Technology and software expenses | ||||
Processing and transactional services | ||||
Communications | ||||
Business promotion | ||||
Deposit insurance | ||||
Other real estate owned (OREO) income | ( | ( | ( | ( |
Other operating expenses | ||||
Amortization of intangibles | ||||
Goodwill impairment charge | ||||
Total operating expenses | ||||
Income before income tax | ||||
Income tax expense | ||||
Net Income | $ | $ | $ | $ |
Net Income Applicable to Common Stock | $ | $ | $ | $ |
Net Income per Common Share - Basic | $ | $ | $ | $ |
Net Income per Common Share - Diluted | $ | $ | $ | $ |
`
The accompanying notes are an integral part of these Consolidated Financial Statements.
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POPULAR, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Quarters ended September 30, | Nine months ended September 30, | |||
(In thousands) | 2026 | 2025 | 2026 | 2025 |
Net income | $ | $ | $ | $ |
Other comprehensive income before tax: | ||||
Foreign currency translation adjustment | ( | ( | ( | |
Amortization of net losses of pension and postretirement benefit plans | ||||
Unrealized holding (losses) gains on debt securities arising during the period | ( | ( | ||
Amortization of unrealized losses of debt securities transfer from available- for- sale to held-to-maturity | ||||
Other comprehensive income before tax | ( | ( | ||
Income tax benefit (expense) | ( | ( | ||
Total other comprehensive (loss) income, net of tax | ( | ( | ||
Comprehensive income, net of tax | $ | $ | $ | $ |
Tax effect allocated to each component of other comprehensive income:
Quarters ended September 30, | Nine months ended September 30, | |||
(In thousands) | 2026 | 2025 | 2026 | 2025 |
Amortization of net losses of pension and postretirement benefit plans | $( | $( | $( | $( |
Unrealized benefit (expense) due to holding gains or losses on debt securities arising during the period | ( | ( | ||
Amortization of unrealized losses of debt securities transfer from available- for- sale to held-to-maturity | ( | ( | ( | ( |
Income tax benefit (expense) | $ | $( | $ | $( |
The accompanying notes are an integral part of the Consolidated Financial Statements.
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POPULAR, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
(In thousands) | Common stock | Preferred stock | Surplus | Retained earnings | Treasury stock | Accumulated other comprehensive loss | Total |
Balance at June 30,2025 | $ | $ | $ | $ | $( | $( | $ |
Net income | |||||||
Issuances of common stock | |||||||
Dividends declared: | |||||||
Common stock[1] | ( | ( | |||||
Preferred stock | ( | ( | |||||
Common stock purchases[2] | ( | ( | |||||
Stock based compensation | ( | ( | |||||
Other comprehensive income, net of tax | |||||||
Balance at September 30, 2025 | $ | $ | $ | $ | $( | $( | $ |
Balance at June 30,2026 | $ | $ | $ | $ | $( | $( | |
Net income | |||||||
Issuances of common stock | |||||||
Dividends declared: | |||||||
Common stock[1] | ( | ( | |||||
Preferred stock | ( | ( | |||||
Common stock purchases[3] | ( | ( | |||||
Stock based compensation | |||||||
Other comprehensive loss, net of tax | ( | ( | |||||
Balance at September 30, 2026 | $ | $ | $ | $ | $( | $( | $ |
[1]Dividends declared per common share during the quarter ended September 30, 2026 - $0.90 (2025 - $0.75 ).
[2]Includes common stock repurchases of $119.4 million as part of the 2024 and 2025 common stock repurchase programs.
[3]Includes common stock repurchases of $178.6 million as part of the 2026 common stock repurchase program.
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POPULAR, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
(In thousands) | Common stock | Preferred stock | Surplus | Retained earnings | Treasury stock | Accumulated other comprehensive loss | Total |
Balance at December 31, 2024 | $ | $ | $ | $ | $( | $( | $ |
Net income | |||||||
Issuances of common stock | |||||||
Dividends declared: | |||||||
Common stock[1] | ( | ( | |||||
Preferred stock | ( | ( | |||||
Common stock purchases[2] | ( | ( | |||||
Stock based compensation | |||||||
Other comprehensive income, net of tax | |||||||
Balance at September 30, 2025 | $ | $ | $ | $ | $( | $( | $ |
Balance at December 31, 2025 | $ | $ | $ | $ | $( | $( | $ |
Net income | |||||||
Issuances of common stock | |||||||
Dividends declared: | |||||||
Common stock[1] | ( | ( | |||||
Preferred stock | ( | ( | |||||
Common stock purchases[3] | ( | ( | |||||
Stock based compensation | |||||||
Other comprehensive loss, net of tax | ( | ( | |||||
Balance at September 30, 2026 | $ | $ | $ | $ | $( | $( | $ |
[1]Dividends declared per common share during the nine months ended September 30, 2026 - $2.40 (2025 - $2.15 ).
[2]Includes common stock repurchases of $353.7 million as part of the 2024 and 2025 common stock repurchase programs.
[3]Includes common stock repurchases of $459.1 million as part of the 2025 and 2026 common stock repurchase programs.
For the nine months ended | ||
Disclosure of changes in number of shares: | September 30, 2026 | September 30, 2025 |
Preferred Stock: | ||
Balance at beginning and end of period | ||
Common Stock – Issued: | ||
Balance at beginning of period | ||
Issuances of common stock | ||
Balance at end of period | ||
Treasury stock | ( | ( |
Common Stock – Outstanding | ||
The accompanying notes are an integral part of these Consolidated Financial Statements.
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POPULAR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine months ended September 30, | ||
(In thousands) | 2026 | 2025 |
Cash flows from operating activities: | ||
Net income | $ | $ |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for credit losses | ||
Goodwill impairment charge | ||
Amortization of intangibles | ||
Depreciation and amortization of premises and equipment | ||
Net accretion of discounts and amortization of premiums and deferred fees | ( | ( |
Interest capitalized on loans subject to the temporary payment moratorium or loss mitigation alternatives | ( | ( |
Share-based compensation | ||
Net loss, including impairment on debt securities | ||
Fair value adjustments on mortgage servicing rights | ||
Adjustments to indemnity reserves on loans sold | ( | ( |
Earnings from investments under the equity method, net of dividends or distributions | ( | ( |
Deferred income tax expense | ||
Gain on: | ||
Disposition of premises and equipment and other productive assets | ( | ( |
Sale of loans, including valuation adjustments on loans held-for-sale and mortgage banking activities | ( | ( |
Sale of equity method investment | ( | |
Sale of foreclosed assets, including write-downs | ( | ( |
Acquisitions of loans held-for-sale | ( | ( |
Proceeds from sale of loans held-for-sale | ||
Net originations on loans held-for-sale | ( | ( |
Net decrease (increase) in: | ||
Trading debt securities | ||
Equity securities | ( | ( |
Accrued income receivable | ( | ( |
Other assets | ( | |
Net (decrease) increase in: | ||
Interest payable | ( | ( |
Pension and other postretirement benefits obligation | ||
Other liabilities | ( | ( |
Total adjustments | ||
Net cash provided by operating activities | ||
Cash flows from investing activities: | ||
Net (increase) decrease in money market investments | ( | |
Purchases of investment securities: | ||
Available-for-sale | ( | ( |
Equity | ( | ( |
Proceeds from calls, paydowns, maturities and redemptions of investment securities: | ||
Available-for-sale | ||
Held-to-maturity | ||
Proceeds from sale of investment securities: | ||
Equity | ||
Net disbursements on loans | ( | ( |
Proceeds from sale of loans | ||
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Acquisition of loan portfolios | ( | ( |
Return of capital from equity method investments | ||
Payments to acquire equity method investments | ( | ( |
Net proceeds from sale of equity method investment | ||
Acquisition of premises and equipment and other productive assets | ( | ( |
Proceeds from sale of: | ||
Premises and equipment and other productive assets | ||
Foreclosed assets | ||
Net cash used in investing activities | ( | ( |
Cash flows from financing activities: | ||
Net increase (decrease) in: | ||
Deposits | ||
Assets sold under agreements to repurchase | ||
Other short-term borrowings | ( | |
Payments of notes payable | ( | ( |
Principal payments of finance leases | ( | ( |
Proceeds from issuances of notes payable | ||
Proceeds from issuances of common stock | ||
Dividends paid | ( | ( |
Net payments for repurchase of common stock | ( | ( |
Payments related to tax withholding for share-based compensation | ( | ( |
Net cash provided by financing activities | ||
Net decrease in cash and due from banks, and restricted cash | ( | ( |
Cash and due from banks, and restricted cash at beginning of period | ||
Cash and due from banks, and restricted cash at the end of the period | $ | $ |
The accompanying notes are an integral part of these Consolidated Financial Statements.
12
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Notes to Consolidated
Financial Statements (Unaudited)
Page | ||
Note 1 | Nature of operations | 13 |
Note 2 | Basis of presentation | 13 |
Note 3 | New accounting pronouncements | 14 |
Note 4 | Restrictions on cash and due from banks and certain securities | 15 |
Note 5 | Debt securities available-for-sale | 15 |
Note 6 | Debt securities held-to-maturity | 17 |
Note 7 | Loans | 19 |
Note 8 | Allowance for credit losses – loans held-in-portfolio | 25 |
Note 9 | Other real estate owned | 61 |
Note 10 | Other assets | 62 |
Note 11 | Deposits | 63 |
Note 12 | Borrowings | 64 |
Note 13 | Other liabilities | 65 |
Note 14 | Other comprehensive income | 66 |
Note 15 | Guarantees | 67 |
Note 16 | Commitments and contingencies | 67 |
Note 17 | Non-consolidated variable interest entities | 70 |
Note 18 | Related party transactions | 71 |
Note 19 | Fair value measurement | 71 |
Note 20 | Fair value of financial instruments | 76 |
Note 21 | Net income per common share | 79 |
Note 22 | Revenue from contracts with customers | 79 |
Note 23 | Stock-based compensation | 80 |
Note 24 | Income taxes | 81 |
Note 25 | Supplemental disclosure on the consolidated statements of cash flows | 83 |
Note 26 | Segment reporting | 84 |
Note 27 | Subsequent events | 89 |
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Note 1 - Nature of Operations
Popular, Inc. (the “Corporation" or “Popular") is a diversified, publicly owned financial holding company subject to the supervision and
regulation of the Board of Governors of the Federal Reserve System. The Corporation has operations in Puerto Rico, the mainland United
States (“U.S.") and the U.S. and British Virgin Islands. In Puerto Rico, the Corporation provides retail, mortgage and commercial banking
services, as well as auto and equipment leasing and financing through its principal banking subsidiary, Banco Popular de Puerto Rico
(“BPPR"), as well as broker-dealer and insurance services through specialized subsidiaries. In the U.S. mainland, the Corporation provides
retail and commercial banking services, as well as equipment leasing and financing, through its New York-chartered banking subsidiary,
Popular Bank (“PB" or “Popular U.S."), which has branches located in New York, New Jersey, and Florida.
Note 2 - Basis of Presentation
The (unaudited) interim Consolidated Financial Statements are, in the opinion of management, a fair statement of the results for the periods
reported. The consolidated statement of financial condition presented as of December 31, 2025 was derived from audited Consolidated
Financial Statements of the Corporation for the year ended December 31, 2025.
Certain information and notes to the financial statements disclosures which would normally be included in financial statements prepared in
accordance with Accounting Principles Generally Accepted in the United States of America ("U.S. GAAP"), have been condensed or omitted
from the unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly,
these financial statements should be read in conjunction with the audited Consolidated Financial Statements of the Corporation for the year
ended December 31, 2025, included in the 2025 Form 10-K. Operating results for the interim periods disclosed herein are not necessarily
indicative of the results that may be expected for a full year or any future period.
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 contingent assets and
liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
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Note 3 - New Accounting Pronouncements
Standard | Description | Date of adoption | Effect on the financial statements |
FASB ASU 2025-10, Government Grants (Topic 832) - Accounting for Government Grants Received by Business Entities | The FASB issued ASU 2025-10 in December 2025, which establishes the accounting for government grants received by a business entity. The update establishes recognition, measurement, and disclosure requirements for government grants. It allows asset related grants to be recognized either as deferred income or as an adjustment to the cost basis of an asset and income-related grants as deferred income. | January 1, 2029 | The Corporation does not currently engage in material transactions within the scope of this guidance. Accordingly, adoption is not expected to have a material impact on the consolidated financial statements. Should the Corporation enter into such transactions in the future, the impact would be evaluated at that time. |
FASB ASU 2025-08, Financial Instruments Credit Losses (Topic 326)- Purchased Loans | The FASB issued ASU 2025-08 in November 2025, which aims to simplify and reduce the complexity of the accounting for purchased loans under ASC Topic 326. The update expands the population of loans subject to the gross-up approach to include purchased seasoned loans, regardless whether they had credit deterioration. | January 1, 2027 | The amendments in this standard apply to certain transactions entered into after the effective date. Adoption is not expected to have a material impact on the consolidated financial statements. However, the applicability and magnitude will depend on the nature and extent of transactions the Corporation may enter into in future periods. |
FASB ASU 2025-06, Intangibles - Goodwill and Other - Internal- Use Software (Subtopic 350 40) - Targeted Improvements to the Accounting for Internal Use Software | The FASB issued ASU 2025-06 in September 2025, which seeks to modernize the accounting for internal-use software under ASC Subtopic 350-40, Intangibles— Goodwill and Other—Internal-Use Software. The update replaces the traditional stage based model (preliminary, development, post- implementation) with a principles based framework that better reflects current software development practices, including agile and cloud-based approaches. | January 1, 2028 | The Corporation is currently evaluating the impact that the adoption of this guidance will have on our accounting for internal use software considering our development practices which may include agile and cloud-based approaches. |
FASB ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) - Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity | The FASB issued ASU 2025-03 in May 2025 which requires that an entity consider the factors in paragraphs 805-10-55-12 through 55-15 when it is involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a variable interest entity that meets the definition of a business to determine which entity is the accounting acquirer. This replaces the previous requirement that the primary beneficiary always is the acquirer. | January 1, 2027 | The amendments in this standard apply to certain transactions entered into after the effective date. Adoption is not expected to have a material impact on the consolidated financial statements. However, the applicability and magnitude will depend on the nature and extent of transactions the Corporation may enter into in future periods. |
FASB ASU 2024-03, Income Statement— Reporting Comprehensive Income —Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses (As updated by ASU 2025-01) | The FASB issued ASU 2024-03 in November 2024, which requires public entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods to improve financial transparency. | For fiscal years beginning on January 1,2027 For interim periods within fiscal years beginning after January 1,2028 | The Corporation is currently evaluating any impact that the adoption of this guidance will have on its financial statements and presentation and disclosures. |
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Note 4 - Restrictions on Cash and Due from Banks and Certain Securities
BPPR is required by regulatory agencies to maintain average reserve balances with the Federal Reserve Bank of New York (the “Fed") or
other banks. Required average reserve balances in BPPR amounted to $2.6 billion at September 30, 2026 (December 31, 2025 - $2.7
billion). Cash and due from banks, as well as other highly liquid securities, are used to cover these required average reserve balances.
At September 30, 2026, the Corporation held $68 million in restricted assets in the form of funds deposited in money market accounts, debt
securities available-for-sale and equity securities (December 31, 2025 - $64 million). The restricted assets held in debt securities available-
for-sale and equity securities consist primarily of assets held for the Corporation’s non-qualified retirement plans and fund deposits
guaranteeing possible liens or encumbrances over the title of insured properties.
Note 5 - Debt Securities Available-For-Sale
maturities of debt securities available-for-sale at September 30, 2026 and December 31, 2025.
At September 30, 2026 | |||||
(In thousands) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Weighted average yield |
U.S. Treasury securities | |||||
Within 1 year | $ | $ | $ | $ | |
After 1 to 5 years | |||||
Total U.S. Treasury securities | |||||
Collateralized mortgage obligations - federal agencies | |||||
Within 1 year | |||||
After 1 to 5 years | |||||
After 5 to 10 years | |||||
After 10 years | |||||
Total collateralized mortgage obligations - federal agencies | |||||
Mortgage-backed securities - federal agencies | |||||
Within 1 year | |||||
After 1 to 5 years | |||||
After 5 to 10 years | |||||
After 10 years | |||||
Total mortgage-backed securities - federal agencies | |||||
Other | |||||
After 1 to 5 years | |||||
Total other | |||||
Total debt securities available-for-sale[1] | $ | $ | $ | $ | |
[1]Includes $18.6 billion pledged to secure government and trust deposits, assets sold under agreements to repurchase, credit facilities and loan servicing
agreements that the secured parties are not permitted to sell or repledge the collateral, of which $17.3 billion serve as collateral for public funds. The
Corporation had unpledged Available-for-Sale securities with a fair value of $4.6 billion that could be used to increase its borrowing facilities.
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At December 31, 2025 | |||||
(In thousands) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Weighted average yield |
U.S. Treasury securities | |||||
Within 1 year | $ | $ | $ | $ | |
After 1 to 5 years | |||||
Total U.S. Treasury securities | |||||
Collateralized mortgage obligations - federal agencies | |||||
Within 1 year | |||||
After 1 to 5 years | |||||
After 5 to 10 years | |||||
After 10 years | |||||
Total collateralized mortgage obligations - federal agencies | |||||
Mortgage-backed securities - federal agencies | |||||
Within 1 year | |||||
After 1 to 5 years | |||||
After 5 to 10 years | |||||
After 10 years | |||||
Total mortgage-backed securities - federal agencies | |||||
Other | |||||
Within 1 year | |||||
Total other | |||||
Total debt securities available-for-sale[1] | $ | $ | $ | $ | |
[1] Includes $14.3 billion pledged to secure government and trust deposits, assets sold under agreements to repurchase, credit facilities and loan servicing
agreements that the secured parties are not permitted to sell or repledge the collateral, of which $13.2 billion serve as collateral for public funds. The
Corporation had unpledged Available-for-Sale securities with a fair value of $6.3 billion that could be used to increase its borrowing facilities.
The weighted average yield on debt securities available-for-sale is based on amortized cost; therefore, it does not give effect to changes in
fair value.
Debt securities not due on a single contractual maturity date, such as mortgage-backed securities and collateralized mortgage obligations,
are classified based on the period of final contractual maturity. The expected maturities of collateralized mortgage obligations, mortgage-
backed securities and certain other securities may differ from their contractual maturities because they may be subject to prepayments or
may be called by the issuer.
At September 30, 2026, the Corporation did not intend to sell or believe it was more likely than not that it would be required to sell debt
securities classified as available-for-sale. There were no
September 30, 2026 and 2025.
investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2026
and December 31, 2025.
At September 30, 2026 | ||||||
Less than 12 months | 12 months or more | Total | ||||
(In thousands) | Fair value | Gross unrealized losses | Fair value | Gross unrealized losses | Fair value | Gross unrealized losses |
U.S. Treasury securities | $ | $ | $ | $ | $ | $ |
Collateralized mortgage obligations - federal agencies | ||||||
Mortgage-backed securities -federal agencies | ||||||
Total debt securities available-for-sale in an unrealized loss position | $ | $ | $ | $ | $ | $ |
At December 31, 2025 | ||||||
Less than 12 months | 12 months or more | Total | ||||
(In thousands) | Fair value | Gross unrealized losses | Fair value | Gross unrealized losses | Fair value | Gross unrealized losses |
U.S. Treasury securities | $ | $ | $ | $ | $ | $ |
Collateralized mortgage obligations - federal agencies | ||||||
Mortgage-backed securities - federal agencies | ||||||
Total debt securities available-for-sale in an unrealized loss position | $ | $ | $ | $ | $ | $ |
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Debt securities available-for-sale in a continuous unrealized loss position for less than twelve months of $18.2 billion as of September 30,
2026, compared to $1.2 billion on December 31, 2025, are impacted by changes in market rates.
As of September 30, 2026, the portfolio of available-for-sale debt securities reflects gross unrealized losses of $1.3 billion (December 31,
2025 - $0.9 billion), driven mainly by mortgage-backed securities, which have been impacted by the interest rate environment and the
portfolio’s longer duration. The portfolio of available-for-sale debt securities is comprised mainly of U.S. Treasuries and obligations from the
U.S. Government, its agencies or government sponsored entities, including Federal National Mortgage Association (“FNMA”), Federal Home
Loan Mortgage Corporation (“FHLMC”) and Government National Mortgage Association (“GNMA”). These securities carry an explicit or
implicit guarantee from the U.S. Government, are highly rated by major rating agencies, and have a long history of no credit losses.
Accordingly, the Corporation applies a zero-credit loss assumption.
Note 6 - Debt Securities Held-to-Maturity
weighted average yield and contractual maturities of debt securities held-to-maturity at September 30, 2026 and December 31, 2025.
At September 30, 2026 | ||||||||
(In thousands) | Amortized cost | Book Value [1] | Allowance for Credit Losses | Carrying Value Net of Allowance | Gross unrealized gains | Gross unrealized losses | Fair value | Weighted average yield |
U.S. Treasury securities | ||||||||
Within 1 year | $ | $ | $ | $ | $ | $ | $ | |
After 1 to 5 years | ||||||||
Total U.S. Treasury securities | ||||||||
Obligations of Puerto Rico, States and political subdivisions | ||||||||
Within 1 year | ||||||||
After 1 to 5 years | ||||||||
After 5 to 10 years | ||||||||
After 10 years | ||||||||
Total obligations of Puerto Rico, States and political subdivisions | ||||||||
Collateralized mortgage obligations - federal agencies | ||||||||
After 10 years | ||||||||
Total collateralized mortgage obligations - federal agencies | ||||||||
Securities in wholly owned statutory business trusts | ||||||||
After 5 to 10 years | ||||||||
Total securities in wholly owned statutory business trusts | ||||||||
Total debt securities held-to-maturity [2] | $ | $ | $ | $ | $ | $ | $ | |
[1]Book value includes $162 million of unrealized loss which remains in Accumulated other comprehensive (loss) income (AOCI) related to certain securities
previously transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.
[2] Included $5.3 billion pledged to secure public and trust deposits that the secured parties are not permitted to sell or repledge the collateral. The Corporation
had unpledged held-to-maturities securities with a fair value of $147 million that could be used to increase its borrowing facilities.
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At December 31, 2025 | |||||||||
(In thousands) | Amortized cost | Book Value [1] | Allowance for Credit Losses | Carrying Value Net of Allowance | Gross unrealized gains | Gross unrealized losses | Fair value | Weighted average yield | |
U.S. Treasury securities | |||||||||
Within 1 year | $ | $ | $ | $ | $ | $ | $ | ||
After 1 to 5 years | |||||||||
Total U.S. Treasury securities | |||||||||
Obligations of Puerto Rico, States and political subdivisions | |||||||||
Within 1 year | |||||||||
After 1 to 5 years | |||||||||
After 5 to 10 years | |||||||||
After 10 years | |||||||||
Total obligations of Puerto Rico, States and political subdivisions | |||||||||
Collateralized mortgage obligations - federal agencies | |||||||||
After 10 years | |||||||||
Total collateralized mortgage obligations - federal agencies | |||||||||
Securities in wholly owned statutory business trusts | |||||||||
After 5 to 10 years | |||||||||
Total securities in wholly owned statutory business trusts | |||||||||
Total debt securities held-to-maturity [2] | $ | $ | $ | $ | $ | $ | $ | ||
[1]Book value includes $293 million of unrealized loss which remains in Accumulated other comprehensive (loss) income (AOCI) related to certain securities
transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.
[2] Includes $7.3 billion pledged to secure public and trust deposits that the secured parties are not permitted to sell or repledge the collateral. The Corporation
had unpledged held-to-maturities securities with a fair value of $99 million that could be used to increase its borrowing facilities.
Debt securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period of final
contractual maturity. The expected maturities of collateralized mortgage obligations and certain other securities may differ from their
contractual maturities because they may be subject to prepayments or may be called by the issuer.
Credit Quality Indicators
The following describes the credit quality indicators by major security type that the Corporation considers to develop the estimate of the
allowance for credit losses for investment securities held-to-maturity.
As discussed in Note 2 of the 2025 Form 10-K, U.S. Treasury securities carry an explicit guarantee from the U.S. Government, are highly
rated by major rating agencies and have a long history of no credit losses. Accordingly, the Corporation applies a zero-credit loss
assumption and no allowance for credit losses (“ACL") for these securities has been established.
At September 30, 2026 and December 31, 2025, the “Obligations of Puerto Rico, States and political subdivisions" classified as held-to-
maturity, included securities issued by municipalities of Puerto Rico that are generally not rated by a credit rating agency. The Corporation
performs periodic credit quality reviews of these securities and internally assigns standardized credit risk ratings based on its evaluation. For
the definitions of the obligor risk ratings, refer to the Credit Quality section of Note 8 to the Consolidated Financial Statements. This includes
$5
payable primarily from certain property taxes imposed by the issuing municipality (compared to $9 million and $8 million, respectively, at
December 31, 2025).
At September 30, 2026, the portfolio of “Obligations of Puerto Rico, States and political subdivisions" also included $34 million in securities
issued by the Puerto Rico Housing Finance Authority (“HFA"), a government instrumentality, for which the underlying source of payment is
second mortgage loans in Puerto Rico residential properties (not the government), but for which HFA provides a guarantee in the event of
default and upon the satisfaction of certain other conditions (December 31, 2025 - $36 million). These securities are not rated by a credit
rating agency. Refer to Note 16 to the Consolidated Financial Statements for additional information on the Corporation’s exposure to the
Puerto Rico Government.
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A deterioration of the Puerto Rico economy or of the fiscal health of the Government of Puerto Rico and/or its instrumentalities (including if
any of the issuing municipalities become subject to a debt restructuring proceeding under the Puerto Rico Oversight Management and
Economic Stability Act (“PROMESA”)) could adversely affect the value of these securities, resulting in losses to the Corporation.
At September 30, 2026, the portfolio of “Obligations of Puerto Rico, States and political subdivisions” had no securities issued by the HFA
for which the underlying source of payment is U.S. Treasury securities (December 31, 2025 - $7 million), as all such securities were fully
redeemed during the quarter ended on March 31, 2026. Historically, the Corporation has applied a zero-credit loss assumption for these
securities, and no ACL has been established for these securities given that U.S. Treasury securities carry an explicit guarantee from the
U.S. Government, are highly rated by major rating agencies, and have a long history of no credit losses.
Delinquency status
At September 30, 2026 and December 31, 2025, there were no
Allowance for credit losses on debt securities held-to-maturity
The allowance for credit losses related to the Obligations of Puerto Rico and the States and Political subdivisions securities at
September 30, 2026 was $6 million (December 31, 2025 - $6 million).
Note 7 - Loans
For a summary of the accounting policies related to loans, interest recognition and allowance for credit losses refer to Note 2 - Summary of
Significant Accounting Policies of the 2025 Form 10-K.
class of loans:
Quarters ended September 30, | Nine months ended September 30, | ||||
(In thousands) | 2026 | 2025 | 2026 | 2025 | |
Commercial | $ | $ | $ | $ | |
Mortgage | |||||
Ending balance | $ | $ | $ | $ | |
loans:
Quarters ended September 30, | Nine months ended September 30, | ||||
(In thousands) | 2026 | 2025 | 2026 | 2025 | |
Commercial | $ | $ | $ | $ | |
Construction | |||||
Mortgage | |||||
Ending balance | $ | $ | $ | $ | |
Delinquency status
loan class including those that are in non-performing status or that are accruing interest but are past due 90 days or more at September 30,
2026 and December 31, 2025.
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September 30, 2026 | ||||||||||
BPPR | ||||||||||
Past due | Past due 90 days or more | |||||||||
(In thousands) | 30-59 days | 60-89 days | 90 days or more | Total past due | Current | Loans HIP | Non-accrual loans | Accruing loans | ||
Commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | ||
Commercial real estate: | ||||||||||
Non-owner occupied | ||||||||||
Owner occupied | ||||||||||
Commercial and industrial | ||||||||||
Construction | ||||||||||
Mortgage | ||||||||||
Leasing | ||||||||||
Consumer: | ||||||||||
Credit cards | ||||||||||
Home equity lines of credit | ||||||||||
Personal | ||||||||||
Auto | ||||||||||
Other | ||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||
September 30, 2026 | ||||||||||
Popular U.S. | ||||||||||
Past due | Past due 90 days or more | |||||||||
(In thousands) | 30-59 days | 60-89 days | 90 days or more | Total past due | Current | Loans HIP | Non-accrual loans | Accruing loans | ||
Commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | ||
Commercial real estate: | - | |||||||||
Non-owner occupied | ||||||||||
Owner occupied | ||||||||||
Commercial and industrial | ||||||||||
Construction | ||||||||||
Mortgage | ||||||||||
Consumer: | ||||||||||
Credit cards | ||||||||||
Home equity lines of credit | ||||||||||
Personal | ||||||||||
Other | ||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||
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September 30, 2026 | ||||||||||
Popular, Inc. | ||||||||||
Past due | Past due 90 days or more | |||||||||
(In thousands) | 30-59 days | 60-89 days | 90 days or more | Total past due | Current | Loans HIP [2] [3] | Non-accrual loans | Accruing loans | ||
Commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | ||
Commercial real estate: | ||||||||||
Non-owner occupied | ||||||||||
Owner occupied | ||||||||||
Commercial and industrial | ||||||||||
Construction | ||||||||||
Mortgage[1] | ||||||||||
Leasing | ||||||||||
Consumer: | ||||||||||
Credit cards | ||||||||||
Home equity lines of credit | ||||||||||
Personal | ||||||||||
Auto | ||||||||||
Other | ||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||
[1]At September 30, 2026, mortgage loans held-in-portfolio include $3.5 billion of loans that carry certain guarantees from the FHA or the VA, for which the
Corporation’s policy is to exclude them from non-performing status, of which $189 million are 90 days or more past due. The portfolio of guaranteed loans
includes $35 million of residential mortgage loans in Puerto Rico that are no longer accruing interest as of September 30, 2026. The Corporation has $23
million in reverse mortgage loans in Puerto Rico which are guaranteed by FHA, but which are currently not accruing interest at September 30, 2026.
[2]Loans held-in-portfolio are net of $399 million in unearned income and exclude $3 million in loans held-for-sale.
[3]Includes $22.4 billion pledged to secure credit facilities and public funds that the secured parties are not permitted to sell or repledge the collateral, of which
$7.6 billion were pledged at the Federal Home Loan Bank ("FHLB") as collateral for borrowings and $14.8 billion at the Federal Reserve Bank ("FRB") for
discount window borrowings. As of September 30, 2026, the Corporation had an available borrowing facility with the FHLB and the discount window of FRB
of $4.4 billion and $12.0 billion, respectively.
December 31, 2025 | ||||||||||
BPPR | ||||||||||
Past due | Past due 90 days or more | |||||||||
(In thousands) | 30-59 days | 60-89 days | 90 days or more | Total past due | Current | Loans HIP | Non-accrual loans | Accruing loans | ||
Commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | ||
Commercial real estate: | ||||||||||
Non-owner occupied | ||||||||||
Owner occupied | ||||||||||
Commercial and industrial | ||||||||||
Construction | ||||||||||
Mortgage | ||||||||||
Leasing | ||||||||||
Consumer: | ||||||||||
Credit cards | ||||||||||
Home equity lines of credit | ||||||||||
Personal | ||||||||||
Auto | ||||||||||
Other | ||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||
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December 31, 2025 | ||||||||||
Popular U.S. | ||||||||||
Past due | Past due 90 days or more | |||||||||
(In thousands) | 30-59 days | 60-89 days | 90 days or more | Total past due | Current | Loans HIP | Non-accrual loans | Accruing loans | ||
Commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | ||
Commercial real estate: | ||||||||||
Non-owner occupied | ||||||||||
Owner occupied | ||||||||||
Commercial and industrial | ||||||||||
Construction | ||||||||||
Mortgage | ||||||||||
Consumer: | ||||||||||
Credit cards | ( | ( | ||||||||
Home equity lines of credit | ||||||||||
Personal | ||||||||||
Other | ||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||
December 31, 2025 | ||||||||||
Popular, Inc. | ||||||||||
Past due | Past due 90 days or more | |||||||||
(In thousands) | 30-59 days | 60-89 days | 90 days or more | Total past due | Current | Loans HIP [2] [3] | Non-accrual loans | Accruing loans | ||
Commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | ||
Commercial real estate: | ||||||||||
Non-owner occupied | ||||||||||
Owner occupied | ||||||||||
Commercial and industrial | ||||||||||
Construction | ||||||||||
Mortgage[1] | ||||||||||
Leasing | ||||||||||
Consumer: | ||||||||||
Credit cards | ||||||||||
Home equity lines of credit | ||||||||||
Personal | ||||||||||
Auto | ||||||||||
Other | ||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||
[1]At December 31, 2025 mortgage loans held-in-portfolio include $3.2 billion of loans that carry certain guarantees from the FHA or the VA, for which the
Corporation’s policy is to exclude them from non-performing status, of which $197 million are 90 days or more past due. The portfolio of guaranteed loans
includes $47 million of residential mortgage loans in Puerto Rico that are no longer accruing interest as of December 31, 2025. The Corporation has $27
million in reverse mortgage loans in Puerto Rico which are guaranteed by FHA, but which are currently not accruing interest at December 31, 2025.
[2]Loans held-in-portfolio are net of $422 million in unearned income and exclude $10 million in loans held-for-sale.
[3]Includes $22.7 billion pledged to secure credit facilities and public funds that the secured parties are not permitted to sell or repledge the collateral, of which
$7.5 billion were pledged at the FHLB as collateral for borrowings and $15.2 billion at the FRB for discount window borrowings. As of December 31, 2025,
the Corporation had an available borrowing facility with the FHLB and the discount window of FRB of $4.0 billion and $12.1 billion, respectively.
loans:
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September 30, 2026 | ||||||||
BPPR | Popular U.S. | Popular, Inc. | ||||||
(In thousands) | Non-accrual with no allowance | Non-accrual with allowance | Non-accrual with no allowance | Non-accrual with allowance | Non-accrual with no allowance | Non-accrual with allowance | ||
Commercial multi-family | $ | $ | $ | $ | $ | $ | ||
Commercial real estate non-owner occupied | ||||||||
Commercial real estate owner occupied | ||||||||
Commercial and industrial | ||||||||
Mortgage | ||||||||
Leasing | ||||||||
Consumer: | ||||||||
HELOCs | ||||||||
Personal | ||||||||
Auto | ||||||||
Other | ||||||||
Total | $ | $ | $ | $ | $ | $ | ||
December 31, 2025 | ||||||||
BPPR | Popular U.S. | Popular, Inc. | ||||||
(In thousands) | Non-accrual with no allowance | Non-accrual with allowance | Non-accrual with no allowance | Non-accrual with allowance | Non-accrual with no allowance | Non-accrual with allowance | ||
Commercial multi-family | $ | $ | $ | $ | $ | $ | ||
Commercial real estate non-owner occupied | ||||||||
Commercial real estate owner occupied | ||||||||
Commercial and industrial | ||||||||
Mortgage | ||||||||
Leasing | ||||||||
Consumer: | ||||||||
HELOCs | ||||||||
Personal | ||||||||
Auto | ||||||||
Other | ||||||||
Total | $ | $ | $ | $ | $ | $ | ||
The Corporation has designated loans classified as collateral dependent for which the ACL is measured based on the fair value of the
collateral less cost to sell, when foreclosure is probable or when the repayment is expected to be provided substantially by the sale or
operation of the collateral and the borrower is experiencing financial difficulty. The fair value of the collateral is based on appraisals, which
may be adjusted due to their age, type, location, and condition of the property or area or general market conditions to reflect the expected
change in value between the effective date of the appraisal and the measurement date. Appraisals are updated every one to two years
depending on the type of loan and the total exposure of the borrower.
Loans in non-accrual status with no allowance at September 30, 2026 include $103 million in collateral dependent loans (December 31,
2025 - $142 million). The Corporation recognized $3 million in interest income on non-accrual loans during the nine months ended
September 30, 2026 (September 30, 2025 - $3 million).
value of the collateral less cost to sell, by class of loans and type of collateral as of September 30, 2026 and December 31, 2025:
24
Table of Content
September 30, 2026 | |||||
(In thousands) | Real Estate | Auto | Equipment | Other | Total |
BPPR | |||||
Commercial multi-family | $ | $ | $ | $ | $ |
Commercial real estate: | |||||
Non-owner occupied | |||||
Owner occupied | |||||
Commercial and industrial | |||||
Mortgage | |||||
Leasing | |||||
Consumer: | |||||
Personal | |||||
Auto | |||||
Other | |||||
Total BPPR | $ | $ | $ | $ | $ |
Popular U.S. | |||||
Commercial multi-family | $ | $ | $ | $ | $ |
Commercial real estate: | |||||
Non-owner occupied | |||||
Owner occupied | |||||
Commercial and industrial | |||||
Construction | |||||
Mortgage | |||||
Total Popular U.S. | $ | $ | $ | $ | $ |
Popular, Inc. | |||||
Commercial multi-family | $ | $ | $ | $ | $ |
Commercial real estate: | |||||
Non-owner occupied | |||||
Owner occupied | |||||
Commercial and industrial | |||||
Construction | |||||
Mortgage | |||||
Leasing | |||||
Consumer: | |||||
Personal | |||||
Auto | |||||
Other | |||||
Total Popular, Inc. | $ | $ | $ | $ | $ |
25
Table of Content
December 31, 2025 | |||||
(In thousands) | Real Estate | Auto | Equipment | Other | Total |
BPPR | |||||
Commercial multi-family | $ | $ | $ | $ | $ |
Commercial real estate: | |||||
Non-owner occupied | |||||
Owner occupied | |||||
Commercial and industrial | |||||
Mortgage | |||||
Leasing | |||||
Consumer: | |||||
Personal | |||||
Auto | |||||
Other | |||||
Total BPPR | $ | $ | $ | $ | $ |
Popular U.S. | |||||
Commercial multi-family | $ | $ | $ | $ | $ |
Commercial real estate: | |||||
Non-owner occupied | |||||
Commercial and industrial | |||||
Mortgage | |||||
Total Popular U.S. | $ | $ | $ | $ | $ |
Popular, Inc. | |||||
Commercial multi-family | $ | $ | $ | $ | $ |
Commercial real estate: | |||||
Non-owner occupied | |||||
Owner occupied | |||||
Commercial and industrial | |||||
Mortgage | |||||
Leasing | |||||
Consumer: | |||||
Personal | |||||
Auto | |||||
Other | |||||
Total Popular, Inc. | $ | $ | $ | $ | $ |
Note 8 - Allowance for Credit Losses – Loans Held-In-Portfolio
The Corporation follows the current expected credit loss (“CECL”) model to establish and evaluate the adequacy of the ACL to provide for
expected losses in the loan portfolio. This model establishes a forward-looking methodology that reflects the expected credit losses over the
lives of financial assets starting when such assets are first acquired or originated. In addition, CECL provides that the initial ACL on
purchased credit-deteriorated ("PCD") financial assets be recorded as an increase to the purchase price, with subsequent changes to the
allowance recorded as a credit loss expense. The provision for credit losses recorded in current operations is based on this methodology.
Loan losses are charged and recoveries are credited to the ACL. The Corporation’s modeling framework includes internally developed
quantitative models that generate lifetime default and prepayment estimates as well as other loan level techniques to estimate loss severity.
These models combine credit risk factors which include the impact of loan modifications, with macroeconomics expectations to derive the
lifetime expected loss.
At September 30, 2026, the Corporation estimated the ACL by weighting the outputs of optimistic, baseline, and pessimistic scenarios. The
weightings applied are subject to evaluation on a quarterly basis as part of the ACL’s governance process. Among the three scenarios
evaluated to estimate the ACL, the baseline scenario was assigned the highest probability, followed by the pessimistic scenario. There were
no changes to the probability weights during third quarter of 2026.
ended September 30, 2026 and 2025.
26
Table of Content
For the quarter ended September 30, 2026 | ||||||
BPPR | ||||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Allowance for credit losses - PCD Loans | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | ||||||
Commercial | ||||||
Commercial multi-family | $ | $( | $ | $ | $ | $ |
Commercial real estate non-owner occupied | ( | |||||
Commercial real estate owner occupied | ( | |||||
Commercial and industrial | ( | |||||
Total Commercial | ( | |||||
Construction | ( | |||||
Mortgage | ( | ( | ||||
Leasing | ( | |||||
Consumer | ||||||
Credit cards | ( | |||||
Home equity lines of credit | ( | |||||
Personal | ( | |||||
Auto | ( | |||||
Other | ( | |||||
Total Consumer | ( | |||||
Total - Loans | $ | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | ||||||
Commercial | $ | $ | $ | $ | $ | $ |
Construction | ( | |||||
Ending balance - unfunded commitments [1] | $ | $ | $ | $ | $ | $ |
[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
For the quarter ended September 30, 2026 | |||||
Popular U.S. | |||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | |||||
Commercial | |||||
Commercial multi-family | $ | $( | $ | $ | $ |
Commercial real estate non-owner occupied | ( | ||||
Commercial real estate owner occupied | ( | ( | |||
Commercial and industrial | ( | ||||
Total Commercial | ( | ||||
Construction | ( | ||||
Mortgage | ( | ( | |||
Consumer | |||||
Credit Cards | |||||
Home equity lines of credit | ( | ( | |||
Personal | ( | ( | |||
Other | ( | ||||
Total Consumer | ( | ( | |||
Total - Loans | $ | $( | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | |||||
Commercial | $ | $ | $ | $ | $ |
Construction | ( | ||||
Consumer | |||||
Ending balance - unfunded commitments [1] | $ | $( | $ | $ | $ |
[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
27
Table of Content
For the quarter ended September 30, 2026 | ||||||
Popular Inc. | ||||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Allowance for credit losses - PCD Loans | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | ||||||
Commercial | ||||||
Commercial multi-family | $ | $( | $ | $ | $ | $ |
Commercial real estate non-owner occupied | ( | |||||
Commercial real estate owner occupied | ( | |||||
Commercial and industrial | ( | |||||
Total Commercial | ( | |||||
Construction | ( | |||||
Mortgage | ( | ( | ||||
Leasing | ( | |||||
Consumer | ||||||
Credit cards | ( | |||||
Home equity lines of credit | ( | ( | ||||
Personal | ( | |||||
Auto | ( | |||||
Other | ( | |||||
Total Consumer | ( | |||||
Total - Loans | $ | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | ||||||
Commercial | $ | $ | $ | $ | $ | $ |
Construction | ( | |||||
Consumer | ||||||
Ending balance - unfunded commitments [1] | $ | $( | $ | $ | $ | $ |
[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
For the nine months ended September 30, 2026 | ||||||
BPPR | ||||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Allowance for credit losses - PCD Loans | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | ||||||
Commercial | ||||||
Commercial multi-family | $ | $( | $ | $ | $ | $ |
Commercial real estate non-owner occupied | ( | |||||
Commercial real estate owner occupied | ( | ( | ||||
Commercial and industrial | ( | |||||
Total Commercial | ( | |||||
Construction | ( | |||||
Mortgage | ( | ( | ||||
Leasing | ( | |||||
Consumer | ||||||
Credit cards | ( | |||||
Home equity lines of credit | ( | ( | ||||
Personal | ( | |||||
Auto | ( | |||||
Other | ( | |||||
Total Consumer | ( | |||||
Total - Loans | $ | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | ||||||
Commercial | $ | $ | $ | $ | $ | $ |
Construction | ||||||
Ending balance - unfunded commitments [1] | $ | $ | $ | $ | $ | $ |
[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
28
Table of Content
For the nine months ended September 30, 2026 | |||||
Popular U.S. | |||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | |||||
Commercial | |||||
Commercial multi-family | $ | $( | $( | $ | $ |
Commercial real estate non-owner occupied | ( | ||||
Commercial real estate owner occupied | ( | ||||
Commercial and industrial | ( | ||||
Total Commercial | ( | ||||
Construction | ( | ||||
Mortgage | ( | ( | |||
Consumer | |||||
Credit Cards | ( | ||||
Home equity lines of credit | ( | ( | |||
Personal | ( | ( | |||
Other | ( | ||||
Total Consumer | ( | ( | |||
Total - Loans | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | |||||
Commercial | $ | $ | $ | $ | $ |
Construction | ( | ||||
Consumer | |||||
Ending balance - unfunded commitments [1] | $ | $( | $ | $ | $ |
[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
For the nine months ended September 30, 2026 | ||||||
Popular Inc. | ||||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Allowance for credit losses - PCD Loans | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | ||||||
Commercial | ||||||
Commercial multi-family | $ | $( | $ | $( | $ | $ |
Commercial real estate non-owner occupied | ( | |||||
Commercial real estate owner occupied | ( | |||||
Commercial and industrial | ( | |||||
Total Commercial | ( | |||||
Construction | ( | |||||
Mortgage | ( | ( | ||||
Leasing | ( | |||||
Consumer | ||||||
Credit cards | ( | |||||
Home equity lines of credit | ( | ( | ||||
Personal | ( | |||||
Auto | ( | |||||
Other | ( | |||||
Total Consumer | ( | |||||
Total - Loans | $ | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | ||||||
Commercial | $ | $ | $ | $ | $ | $ |
Construction | ( | |||||
Consumer | ||||||
Ending balance - unfunded commitments [1] | $ | $ | $ | $ | $ | $ |
[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
29
Table of Content
For the quarter ended September 30, 2025 | ||||||
BPPR | ||||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Allowance for credit losses - PCD Loans | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | ||||||
Commercial | ||||||
Commercial multi-family | $ | $( | $ | $ | $ | $ |
Commercial real estate non-owner occupied | ( | |||||
Commercial real estate owner occupied | ( | |||||
Commercial and industrial | ( | |||||
Total Commercial | ( | |||||
Construction | ||||||
Mortgage | ( | |||||
Leasing | ( | |||||
Consumer | ||||||
Credit cards | ( | |||||
Home equity lines of credit | ( | |||||
Personal | ( | |||||
Auto | ( | |||||
Other | ( | |||||
Total Consumer | ( | |||||
Total - Loans | $ | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | ||||||
Commercial | $ | $ | $ | $ | $ | $ |
Construction | ( | |||||
Ending balance - unfunded commitments [1] | $ | $ | $ | $ | $ | $ |
[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
For the quarter ended September 30, 2025 | |||||
Popular U.S. | |||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | |||||
Commercial | |||||
Commercial multi-family | $ | $( | $ | $ | $ |
Commercial real estate non-owner occupied | |||||
Commercial real estate owner occupied | |||||
Commercial and industrial | ( | ( | |||
Total Commercial | ( | ||||
Construction | |||||
Mortgage | ( | ||||
Consumer | |||||
Home equity lines of credit | ( | ||||
Personal | ( | ||||
Other | ( | ||||
Total Consumer | ( | ( | |||
Total - Loans | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | |||||
Commercial | $ | $( | $ | $ | $ |
Construction | ( | ||||
Consumer | |||||
Ending balance - unfunded commitments [1] | $ | $( | $ | $ | $ |
[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
30
Table of Content
For the quarter ended September 30, 2025 | ||||||
Popular Inc. | ||||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Allowance for credit losses - PCD Loans | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | ||||||
Commercial | ||||||
Commercial multi-family | $ | $( | $ | $ | $ | $ |
Commercial real estate non-owner occupied | ( | |||||
Commercial real estate owner occupied | ( | |||||
Commercial and industrial | ( | |||||
Total Commercial | ( | |||||
Construction | ||||||
Mortgage | ( | ( | ||||
Leasing | ( | |||||
Consumer | ||||||
Credit cards | ( | |||||
Home equity lines of credit | ( | |||||
Personal | ( | |||||
Auto | ( | |||||
Other | ( | |||||
Total Consumer | ( | |||||
Total - Loans | $ | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | ||||||
Commercial | $ | $ | $ | $ | $ | $ |
Construction | ( | |||||
Consumer | ||||||
Ending balance - unfunded commitments [1] | $ | $ | $ | $ | $ | $ |
[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
For the nine months ended September 30, 2025 | ||||||
BPPR | ||||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Allowance for credit losses - PCD Loans | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | ||||||
Commercial | ||||||
Commercial multi-family | $ | $ | $ | $ | $ | $ |
Commercial real estate non-owner occupied | ( | |||||
Commercial real estate owner occupied | ( | ( | ||||
Commercial and industrial | ( | |||||
Total Commercial | ( | |||||
Construction | ||||||
Mortgage | ( | ( | ||||
Leasing | ( | |||||
Consumer | ||||||
Credit cards | ( | |||||
Home equity lines of credit | ( | ( | ||||
Personal | ( | |||||
Auto | ( | |||||
Other | ( | |||||
Total Consumer | ( | |||||
Total - Loans | $ | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | ||||||
Commercial | $ | $ | $ | $ | $ | $ |
Construction | ||||||
Ending balance - unfunded commitments [1] | $ | $ | $ | $ | $ | $ |
[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
31
Table of Content
For the nine months ended September 30, 2025 | |||||
Popular U.S. | |||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | |||||
Commercial | |||||
Commercial multi-family | $ | $ | $( | $ | $ |
Commercial real estate non-owner occupied | |||||
Commercial real estate owner occupied | ( | ||||
Commercial and industrial | ( | ||||
Total Commercial | ( | ||||
Construction | ( | ||||
Mortgage | ( | ||||
Consumer | |||||
Home equity lines of credit | ( | ( | |||
Personal | ( | ||||
Other | ( | ||||
Total Consumer | ( | ||||
Total - Loans | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | |||||
Commercial | $ | $ | $ | $ | $ |
Construction | ( | ||||
Consumer | |||||
Ending balance - unfunded commitments [1] | $ | $( | $ | $ | $ |
[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
For the nine months ended September 30, 2025 | ||||||
Popular Inc. | ||||||
(In thousands) | Beginning Balance | Provision for credit losses (benefit) | Allowance for credit losses - PCD Loans | Charge-offs | Recoveries | Ending Balance |
Allowance for credit losses - loans: | ||||||
Commercial | ||||||
Commercial multi-family | $ | $ | $ | $( | $ | $ |
Commercial real estate non-owner occupied | ( | |||||
Commercial real estate owner occupied | ( | ( | ||||
Commercial and industrial | ( | |||||
Total Commercial | ( | |||||
Construction | ( | |||||
Mortgage | ( | ( | ||||
Leasing | ( | |||||
Consumer | ||||||
Credit cards | ( | |||||
Home equity lines of credit | ( | ( | ||||
Personal | ( | |||||
Auto | ( | |||||
Other | ( | |||||
Total Consumer | ( | |||||
Total - Loans | $ | $ | $ | $( | $ | $ |
Allowance for credit losses - unfunded commitments: | ||||||
Commercial | $ | $ | $ | $ | $ | $ |
Construction | ( | |||||
Consumer | ||||||
Ending balance - unfunded commitments [1] | $ | $( | $ | $ | $ | $ |
[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
32
Table of Content
A modification constitutes a change in loan terms in the form of principal forgiveness, an interest rate reduction, other-than-insignificant
payment delay, term extension or combination of the above made to a borrower experiencing financial difficulty.
The amount of outstanding commitments to lend additional funds to debtors with financial difficulties owing receivables whose terms have
been modified during the nine months ended September 30, 2026 amounted to $87 million (during the year ended December 31, 2025 -
$159 million), related to the commercial loan portfolios.
reporting period disaggregated by class of financing receivable and type of concession granted for the quarters and nine months ended
September 30, 2026 and 2025. Loans modified to borrowers experiencing financial difficulties that were fully paid down, charged-off or
foreclosed upon by period end are not reported.
33
Table of Content
Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the quarter ended September 30, 2026
Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | |||||
Commercial and industrial | $ | $ | $ | ||||||||
Consumer: | |||||||||||
Credit cards | |||||||||||
Personal | |||||||||||
Other | |||||||||||
Total | $ | $ | $ | ||||||||
Term Extension | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | |||||
CRE Non-owner occupied | $ | $ | $ | ||||||||
CRE Owner occupied | |||||||||||
Commercial and industrial | |||||||||||
Mortgage | |||||||||||
Consumer: | |||||||||||
Personal | |||||||||||
Auto | |||||||||||
Total | $ | $ | $ | ||||||||
Other-Than-Insignificant Payment Delays | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | |||||
CRE Non-owner occupied | $ | $ | $ | ||||||||
CRE Owner occupied | |||||||||||
Commercial and industrial | |||||||||||
Construction | |||||||||||
Total | $ | $ | $ | ||||||||
Combination - Term Extension and Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | |||||
Mortgage | $ | $ | $ | ||||||||
Consumer: | |||||||||||
Personal | |||||||||||
Auto | |||||||||||
Total | $ | $ | $ | ||||||||
34
Table of Content
Combination - Other-Than-Insignificant Payment Delays and Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | |||||
Commercial and industrial | $ | $ | $ | ||||||||
Consumer: | |||||||||||
Credit cards | |||||||||||
Total | $ | $ | $ | ||||||||
Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the nine months ended September 30, 2026
Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | |||||
Commercial and industrial | $ | $ | $ | ||||||||
Mortgage | |||||||||||
Credit cards | |||||||||||
Personal | |||||||||||
Other | |||||||||||
Total | $ | $ | $ | ||||||||
Term Extension | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | |||||
CRE Non-owner occupied | $ | $ | $ | ||||||||
CRE Owner occupied | |||||||||||
Commercial and industrial | |||||||||||
Mortgage | |||||||||||
Personal | |||||||||||
Auto | |||||||||||
Total | $ | $ | $ | ||||||||
Other-Than-Insignificant Payment Delays | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | |||||
CRE Non-owner occupied | $ | $ | $ | ||||||||
CRE Owner occupied | |||||||||||
Commercial and industrial | |||||||||||
Construction | |||||||||||
Mortgage | |||||||||||
Total | $ | $ | $ | ||||||||
35
Table of Content
Combination - Term Extension and Interest Rate Reduction | |||||||||||
(Dollars in thousands) | BPPR | Popular U.S. | Popular, Inc. | ||||||||
Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | ||||||
CRE Owner occupied | $ | $ | $ | ||||||||
Commercial and industrial | |||||||||||
Mortgage | |||||||||||
Personal | |||||||||||
Auto | |||||||||||
Total | $ | $ | $ | ||||||||
Combination - Other-Than-Insignificant Payment Delays and Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2026 | % of total class of Financing Receivable | |||||
Commercial and industrial | $ | $ | $ | ||||||||
Credit cards | |||||||||||
Total | $ | $ | $ | ||||||||
36
Table of Content
Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the quarter ended September 30, 2025
Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | |||||
Commercial and industrial | $ | $ | $ | ||||||||
Consumer: | |||||||||||
Credit cards | |||||||||||
Personal | |||||||||||
Total | $ | $ | $ | ||||||||
Term Extension | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | |||||
CRE Non-owner occupied | $ | $ | $ | ||||||||
CRE Owner occupied | |||||||||||
Commercial and industrial | |||||||||||
Mortgage | |||||||||||
Consumer: | |||||||||||
Personal | |||||||||||
Auto | |||||||||||
Total | $ | $ | $ | ||||||||
Other-Than-Insignificant Payment Delays | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | |||||
CRE Owner occupied | $ | $ | $ | ||||||||
Commercial and industrial | |||||||||||
Mortgage | |||||||||||
Total | $ | $ | $ | ||||||||
Combination - Term Extension and Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | |||||
CRE Owner occupied | $ | $ | $ | ||||||||
Commercial and industrial | |||||||||||
Mortgage | |||||||||||
Consumer: | |||||||||||
Personal | |||||||||||
Auto | |||||||||||
Total | $ | $ | $ | ||||||||
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Table of Content
Combination - Other-Than-Insignificant Payment Delays and Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | |||||
Commercial and industrial | $ | $ | $ | ||||||||
Consumer: | |||||||||||
Credit cards | |||||||||||
Total | $ | $ | $ | ||||||||
Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the nine months ended September 30, 2025
Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | |||||
Commercial and industrial | $ | $ | $ | ||||||||
Mortgage | |||||||||||
Consumer: | |||||||||||
Credit cards | |||||||||||
Personal | |||||||||||
Other | |||||||||||
Total | $ | $ | $ | ||||||||
Term Extension | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | |||||
CRE Non-owner occupied | $ | $ | $ | ||||||||
CRE Owner occupied | |||||||||||
Commercial and industrial | |||||||||||
Mortgage | |||||||||||
Consumer: | |||||||||||
Personal | |||||||||||
Auto | |||||||||||
Total | $ | $ | $ | ||||||||
Other-Than-Insignificant Payment Delays | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | |||||
CRE Owner occupied | $ | $ | $ | ||||||||
Commercial and industrial | |||||||||||
Mortgage | |||||||||||
Total | $ | $ | $ | ||||||||
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Table of Content
Combination - Term Extension and Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | |||||
CRE Owner occupied | $ | $ | $ | ||||||||
Commercial and industrial | |||||||||||
Mortgage | |||||||||||
Consumer: | |||||||||||
Personal | |||||||||||
Auto | |||||||||||
Total | $ | $ | $ | ||||||||
Combination - Other-Than-Insignificant Payment Delays and Interest Rate Reduction | |||||||||||
BPPR | Popular U.S. | Popular, Inc. | |||||||||
(Dollars in thousands) | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | Amortized Cost Basis at September 30, 2025 | % of total class of Financing Receivable | |||||
Commercial and industrial | $ | $ | $ | ||||||||
Consumer: | |||||||||||
Credit cards | |||||||||||
Total | $ | $ | $ | ||||||||
39
Table of Content
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulties:
For the quarter ended September 30, 2026 | |
Interest rate reduction | |
Loan Type | Financial Effect |
Commercial and industrial | Reduced weighted-average contractual interest rate from |
Mortgage | Reduced weighted-average contractual interest rate from |
Consumer: | |
Credit cards | Reduced weighted-average contractual interest rate from |
Personal | Reduced weighted-average contractual interest rate from |
Auto | Reduced weighted-average contractual interest rate from |
Other | Reduced weighted-average contractual interest rate from |
Term Extension | |
Loan Type | Financial Effect |
CRE Non-owner occupied | Added a weighted-average of |
CRE Owner occupied | Added a weighted-average of |
Commercial and industrial | Added a weighted-average of |
Mortgage | Added a weighted-average of |
Consumer: | |
Personal | Added a weighted-average of |
Auto | Added a weighted-average of |
Other than insignificant payment delays | |
Loan Type | Financial Effect |
CRE Non-owner occupied | Added a weighted-average of |
CRE Owner occupied | Added a weighted-average of |
Commercial and industrial | Added a weighted-average of |
Construction | Added a weighted-average of |
Consumer: | |
Credit cards | Added a weighted-average of |
40
Table of Content
For the nine months ended September 30, 2026 | |
Interest rate reduction | |
Loan Type | Financial Effect |
CRE Owner occupied | Reduced weighted-average contractual interest rate from |
Commercial and industrial | Reduced weighted-average contractual interest rate from |
Mortgage | Reduced weighted-average contractual interest rate from |
Consumer: | |
Credit cards | Reduced weighted-average contractual interest rate from |
Personal | Reduced weighted-average contractual interest rate from |
Auto | Reduced weighted-average contractual interest rate from |
Other | Reduced weighted-average contractual interest rate from |
Term extension | |
Loan Type | Financial Effect |
CRE Non-owner occupied | Added a weighted-average of |
CRE Owner occupied | Added a weighted-average of |
Commercial and industrial | Added a weighted-average of |
Mortgage | Added a weighted-average of |
Consumer: | |
Personal | Added a weighted-average of |
Auto | Added a weighted-average of |
Other than insignificant payment delay | |
Loan Type | Financial Effect |
CRE Non-owner occupied | Added a weighted-average of |
CRE Owner occupied | Added a weighted-average of |
Commercial and industrial | Added a weighted-average of |
Construction | Added a weighted-average of |
Mortgage | Added a weighted-average of |
Consumer: | |
Credit cards | Added a weighted-average of |
41
Table of Content
For the quarter ended September 30, 2025 | |
Interest rate reduction | |
Loan Type | Financial Effect |
CRE Owner occupied | Reduced weighted-average contractual interest rate from |
Commercial and industrial | Reduced weighted-average contractual interest rate from |
Mortgage | Reduced weighted-average contractual interest rate from |
Consumer: | |
Credit cards | Reduced weighted-average contractual interest rate from |
Personal | Reduced weighted-average contractual interest rate from |
Auto | Reduced weighted-average contractual interest rate from |
Term extension | |
Loan Type | Financial Effect |
CRE Non-owner occupied | Added a weighted-average of |
CRE Owner occupied | Added a weighted-average of |
Commercial and industrial | Added a weighted-average of |
Mortgage | Added a weighted-average of |
Consumer: | |
Personal | Added a weighted-average of |
Auto | Added a weighted-average of |
Other than insignificant payment delay | |
Loan Type | Financial Effect |
CRE Owner occupied | Added a weighted-average of |
Commercial and industrial | Added a weighted-average of |
Mortgage | Added a weighted-average of |
Consumer: | |
Credit cards | Added a weighted-average of |
42
Table of Content
For the nine months ended September 30, 2025 | |
Interest rate reduction | |
Loan Type | Financial Effect |
CRE Owner occupied | Reduced weighted-average contractual interest rate from |
Commercial and industrial | Reduced weighted-average contractual interest rate from |
Mortgage | Reduced weighted-average contractual interest rate from |
Consumer: | |
Credit cards | Reduced weighted-average contractual interest rate from |
Personal | Reduced weighted-average contractual interest rate from |
Auto | Reduced weighted-average contractual interest rate from |
Other | Reduced weighted-average contractual interest rate from |
Term extension | |
Loan Type | Financial Effect |
CRE Non-owner occupied | Added a weighted-average of |
CRE Owner occupied | Added a weighted-average of |
Commercial and industrial | Added a weighted-average of |
Mortgage | Added a weighted-average of |
Consumer: | |
Personal | Added a weighted-average of |
Auto | Added a weighted-average of |
Other than insignificant payment delay | |
Loan Type | Financial Effect |
CRE Owner occupied | Added a weighted-average of |
Commercial and industrial | Added a weighted-average of |
Mortgage | Added a weighted-average of |
Consumer: | |
Credit cards | Added a weighted-average of |
43
Table of Content
September 30, 2026. The past due 90 days or more categories include all loans modified classified as non-accruing at the time of the
modification. These loans will continue in non-accrual status, and presented as past due 90 days or more, until the borrower has
demonstrated a willingness and ability to make the restructured loan payments (at least nine 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.
BPPR | ||||||||
September 30, 2026 | ||||||||
Past Due 90 days or more [1] | ||||||||
Past due 90 | Total past | With Payment | Without | |||||
(In thousands) | 30-59 days | 60-89 days | days or more | due | Current | Total | Default | Payment Default |
CRE Non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ |
CRE Owner occupied | ||||||||
Commercial and industrial | ||||||||
Mortgage | ||||||||
Consumer: | ||||||||
Credit cards | ||||||||
Personal | ||||||||
Auto | ||||||||
Other | ||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability to
make the restructured loan payments. 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 as of period end is inclusive of all partial paydowns and charge-offs since the modification date.
Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
Popular U.S. | ||||||||
September 30, 2026 | ||||||||
Past Due 90 days or more [1] | ||||||||
Past due 90 | Total past | With Payment | Without | |||||
(In thousands) | 30-59 days | 60-89 days | days or more | due | Current | Total | Default | Payment Default |
CRE Owner occupied | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial and industrial | ||||||||
Construction | ||||||||
Mortgage | ||||||||
Consumer: | ||||||||
Personal | ||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability to
make the restructured loan payments. 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 as of period end is inclusive of all partial paydowns and charge-offs since the modification date.
Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
Popular Inc | ||||||||
September 30, 2026 | ||||||||
Past Due 90 days or more [1] | ||||||||
Past due 90 | Total past | With Payment | Without | |||||
(In thousands) | 30-59 days | 60-89 days | days or more | due | Current | Total | Default | Payment Default |
CRE Non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ |
CRE Owner occupied | ||||||||
Commercial and industrial | ||||||||
Construction | ||||||||
Mortgage | ||||||||
Consumer: | ||||||||
Credit cards | ||||||||
Personal | ||||||||
Auto | ||||||||
Other | ||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
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Table of Content
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability to
make the restructured loan payments. 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 as of period end is inclusive of all partial paydowns and charge-offs since the modification date.
Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
The following tables present, by class, the performance of loans that have been modified during the twelve months preceding
September 30, 2025.
BPPR | ||||||||
September 30, 2025 | ||||||||
Past Due 90 days or more [1] | ||||||||
(In thousands) | 30-59 days | 60-89 days | Past due 90 days or more | Total past due | Current | Total | With Payment Default | Without Payment Default |
CRE non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ |
CRE owner occupied | ||||||||
Commercial and industrial | ||||||||
Mortgage | ||||||||
Consumer: | ||||||||
Credit cards | ||||||||
Personal | ||||||||
Auto | ||||||||
Other | ||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability to
make the restructured loan payments. 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 as of period end is inclusive of all partial paydowns and charge-offs since the modification date.
Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
Popular U.S. | ||||||||
September 30, 2025 | ||||||||
Past Due 90 days or more [1] | ||||||||
(In thousands) | 30-59 days | 60-89 days | Past due 90 days or more | Total past due | Current | Total | With Payment Default | Without Payment Default |
CRE non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ |
CRE owner occupied | ||||||||
Commercial and industrial | ||||||||
Mortgage | ||||||||
Consumer: | ||||||||
Personal | ||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability to
make the restructured loan payments. 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 as of period end is inclusive of all partial paydowns and charge-offs since the modification date.
Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
Popular Inc. | ||||||||
September 30, 2025 | ||||||||
Past Due 90 days or more [1] | ||||||||
(In thousands) | 30-59 days | 60-89 days | Past due 90 days or more | Total past due | Current | Total | With Payment Default | Without Payment Default |
CRE non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ |
CRE owner occupied | ||||||||
Commercial and industrial | ||||||||
Mortgage | ||||||||
Consumer: | ||||||||
Credit cards | ||||||||
Personal | ||||||||
Auto | ||||||||
Other | ||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability to
make the restructured loan payments. Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or
45
Table of Content
charged-off, whichever occurs first. The recorded investment as of period end is inclusive of all partial paydowns and charge-offs since the modification date.
Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or charged-off, whichever
occurs first. The following tables provide the outstanding balance of loans modified for borrowers under financial difficulties that were subject
to payment default and that had been modified during the twelve months prior to default.
Amortized Cost Basis of Modified Financing Receivables That Subsequently Defaulted During the Quarter Ended September 30, 2026 | ||||||
(In thousands) | Interest Rate Reduction | Term Extension | Other-Than- Insignificant Payment Delays | Combination - Term Extension and Interest Rate Reduction | Combination - Other- Than-Insignificant Payment Delays and Interest Rate Reduction | Total |
CRE Non-owner occupied | $ | $ | $ | $ | $ | $ |
CRE Owner occupied | ||||||
Commercial and industrial | ||||||
Mortgage | ||||||
Consumer: | ||||||
Credit cards | ||||||
Personal | ||||||
Total | $ | $ | $ | $ | $ | $ |
Amortized Cost Basis of Modified Financing Receivables That Subsequently Defaulted During the Nine Months Ended September 30, 2026 | ||||||
(In thousands) | Interest Rate Reduction | Term Extension | Other-Than- Insignificant Payment Delays | Combination - Term Extension and Interest Rate Reduction | Combination - Other- Than-Insignificant Payment Delays and Interest Rate Reduction | Total |
CRE Non-owner occupied | $ | $ | $ | $ | $ | $ |
CRE Owner occupied | ||||||
Commercial and industrial | ||||||
Mortgage | ||||||
Consumer: | ||||||
Credit cards | ||||||
Personal | ||||||
Total | $ | $ | $ | $ | $ | $ |
Amortized Cost Basis of Modified Financing Receivables That Subsequently Defaulted During the Quarter Ended September 30, 2025 | ||||||
(In thousands) | Interest Rate Reduction | Term Extension | Other-Than- Insignificant Payment Delays | Combination - Term Extension and Interest Rate Reduction | Combination - Other- Than-Insignificant Payment Delays and Interest Rate Reduction | Total |
CRE non-owner occupied | $ | $ | $ | $ | $ | $ |
Commercial and industrial | ||||||
Mortgage | ||||||
Consumer: | ||||||
Credit cards | ||||||
Personal | ||||||
Total | $ | $ | $ | $ | $ | $ |
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Table of Content
Amortized Cost Basis of Modified Financing Receivables That Subsequently Defaulted During the Nine Months Ended September 30, 2025 | ||||||
(In thousands) | Interest Rate Reduction | Term Extension | Other-Than- Insignificant Payment Delays | Combination - Term Extension and Interest Rate Reduction | Combination - Other- Than-Insignificant Payment Delays and Interest Rate Reduction | Total |
CRE non-owner occupied | $ | $ | $ | $ | $ | $ |
CRE owner occupied | ||||||
Commercial and industrial | ||||||
Mortgage | ||||||
Consumer: | ||||||
Credit cards | ||||||
Personal | ||||||
Total | $ | $ | $ | $ | $ | $ |
The risk rating system provides for the assignment of ratings at the obligor level based on the financial condition of the borrower. The risk
rating analysis process is performed at least once a year or more frequently if events or conditions change which may deteriorate the credit
quality. In the case of consumer and mortgage loans, these loans are classified considering their delinquency status at the end of the
reporting period.
assignment of obligor risk ratings as defined at September 30, 2026 and December 31, 2025 and the gross write-offs recorded by vintage
year. For the definitions of the obligor risk ratings, refer to the Credit Quality section of Note 8 to the Consolidated Financial Statements
included in the 2025 Form 10-K:
47
Table of Content
September 30, 2026 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior Years | |||
BPPR | |||||||||
Commercial: | |||||||||
Commercial multi-family | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate non-owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial real estate non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Doubtful | |||||||||
Total commercial real estate owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial and industrial | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Doubtful | |||||||||
Loss | |||||||||
Total commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Construction | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Total construction | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Mortgage | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Total mortgage | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
48
Table of Content
September 30, 2026 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior Years | |||
BPPR | |||||||||
Leasing | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Total leasing | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Consumer: | |||||||||
Credit cards | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total credit cards | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
HELOCs | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total HELOCs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Personal | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Personal | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Auto | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Auto | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Other consumer | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Other | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total BPPR | $ | $ | $ | $ | $ | $ | $ | $ | $ |
49
Table of Content
September 30, 2026 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior Years | |||
Popular U.S. | |||||||||
Commercial: | |||||||||
Commercial multi-family | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate non-owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial real estate non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial real estate owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial and industrial | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Construction | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total construction | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Mortgage | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Total mortgage | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
50
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September 30, 2026 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior Years | |||
Popular U.S. | |||||||||
Consumer: | |||||||||
Credit cards | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total credit cards | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
HELOCs | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total HELOCs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Personal | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Personal | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Other consumer | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total Other consumer | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total Popular U.S. | $ | $ | $ | $ | $ | $ | $ | $ | $ |
51
Table of Content
September 30, 2026 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior Years | |||
Popular, Inc. | |||||||||
Commercial: | |||||||||
Commercial multi-family | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate non-owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial real estate non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Doubtful | |||||||||
Total commercial real estate owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial and industrial | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Doubtful | |||||||||
Loss | |||||||||
Total commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
52
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September 30, 2026 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior Years | |||
Popular, Inc. | |||||||||
Construction | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total construction | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Mortgage | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Total mortgage | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Leasing | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Total leasing | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
53
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September 30, 2026 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior Years | |||
Popular, Inc. | |||||||||
Consumer: | |||||||||
Credit cards | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total credit cards | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
HELOCs | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total HELOCs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Personal | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Personal | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Auto | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Auto | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Other consumer | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Other consumer | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total Popular Inc. | $ | $ | $ | $ | $ | $ | $ | $ | $ |
54
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December 31, 2025 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior Years | |||
BPPR | |||||||||
Commercial: | |||||||||
Commercial multi-family | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate non-owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial real estate non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Doubtful | |||||||||
Total commercial real estate owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial and industrial | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Doubtful | |||||||||
Total commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Construction | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Total construction | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Mortgage | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Total mortgage | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
55
Table of Content
December 31, 2025 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior Years | |||
BPPR | |||||||||
Leasing | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total leasing | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Consumer: | |||||||||
Credit cards | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total credit cards | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
HELOCs | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total HELOCs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Personal | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Personal | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Auto | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Auto | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Other consumer | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Other consumer | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total BPPR | $ | $ | $ | $ | $ | $ | $ | $ | $ |
56
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December 31, 2025 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior Years | |||
Popular U.S. | |||||||||
Commercial: | |||||||||
Commercial multi-family | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate non-owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial real estate non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial real estate owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
57
Table of Content
December 31, 2025 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior Years | |||
Popular U.S. | |||||||||
Commercial and industrial | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Construction | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total construction | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Mortgage | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Total mortgage | $ | $ | $ | $ | $ | $ | $ | $ | $ |
58
Table of Content
December 31, 2025 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior Years | |||
Popular U.S. | |||||||||
Consumer: | |||||||||
Credit cards | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $( | $ | $( |
Total credit cards | $ | $ | $ | $ | $ | $ | $( | $ | $( |
HELOCs | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total HELOCs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Personal | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Personal | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Other consumer | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Other consumer | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total Popular U.S. | $ | $ | $ | $ | $ | $ | $ | $ | $ |
59
Table of Content
December 31, 2025 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior Years | |||
Popular, Inc. | |||||||||
Commercial: | |||||||||
Commercial multi-family | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial multi-family | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate non-owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total commercial real estate non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate owner occupied | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Doubtful | |||||||||
Total commercial real estate owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial and industrial | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Doubtful | |||||||||
Total commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
60
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December 31, 2025 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior Years | |||
Popular, Inc. | |||||||||
Construction | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Watch | |||||||||
Special Mention | |||||||||
Substandard | |||||||||
Total construction | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Mortgage | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Total mortgage | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Leasing | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total leasing | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
61
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December 31, 2025 | |||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term Loans Amortized Cost Basis | Total | ||||||
(In thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior Years | |||
Popular, Inc. | |||||||||
Consumer: | |||||||||
Credit cards | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total credit cards | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
HELOCs | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total HELOCs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Personal | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Personal | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Auto | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Auto | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Other consumer | |||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Substandard | |||||||||
Loss | |||||||||
Total Other consumer | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year-to-Date gross write-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total Popular Inc. | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Note 9 - Other Real Estate Owned
September 30, 2026 and 2025.
For the quarter ended September 30, 2026 | |||
OREO | OREO | ||
(In thousands) | Commercial/Construction | Mortgage | Total |
Balance at beginning of period | $ | $ | $ |
Write-downs in value | ( | ( | |
Additions | |||
Sales | ( | ( | ( |
Other adjustments | |||
Ending balance | $ | $ | $ |
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Table of Content
For the quarter ended September 30, 2025 | |||
OREO | OREO | ||
(In thousands) | Commercial/Construction | Mortgage | Total |
Balance at beginning of period | $ | $ | $ |
Write-downs in value | ( | ( | ( |
Additions | |||
Sales | ( | ( | ( |
Other Adjustments | |||
Ending balance | $ | $ | $ |
For the nine months ended September 30, 2026 | |||
OREO | OREO | ||
(In thousands) | Commercial/Construction | Mortgage | Total |
Balance at beginning of period | $ | $ | $ |
Write-downs in value | ( | ( | ( |
Additions | |||
Sales | ( | ( | ( |
Other adjustments | ( | ( | |
Ending balance | $ | $ | $ |
For the nine months ended September 30, 2025 | |||
OREO | OREO | ||
(In thousands) | Commercial/Construction | Mortgage | Total |
Balance at beginning of period | $ | $ | $ |
Write-downs in value | ( | ( | ( |
Additions | |||
Sales | ( | ( | ( |
Other adjustments | ( | ( | |
Ending balance | $ | $ | $ |
Note 10 - Other Assets
(In thousands) | September 30, 2026 | December 31, 2025 |
Net deferred tax assets (net of valuation allowance) | $ | $ |
Investments under the equity method | ||
Prepaid taxes | ||
Other prepaid expenses | ||
Capitalized software costs | ||
Derivative assets | ||
Trades receivable from brokers and counterparties | ||
Principal, interest and escrow servicing advances | ||
Guaranteed mortgage loan claims receivable | ||
Operating right of use ("ROU") assets | ||
Finance ROU assets | ||
Assets for pension benefit | ||
Others | ||
Total other assets | $ | $ |
The Corporation regularly incurs in capitalizable costs associated with software development or licensing which are recorded within the
Other Assets line item in the accompanying Consolidated Statements of Financial Condition. In addition, the Corporation incurs costs
associated with hosting arrangements that are service contracts that are also recorded within Other Assets. The hosting arrangements can
include capitalizable implementation costs that are amortized during the term of the hosting arrangement. The following table summarizes
the composition of acquired or developed software costs as well as costs related to hosting arrangements:
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Table of Content
Gross Carrying | Accumulated | Net Carrying | |
(In thousands) | Amount | Amortization | Value |
September 30, 2026 | |||
Software development costs | $ | $ | $ |
Software license costs | |||
Cloud computing arrangements | |||
Total Capitalized software costs [1] [2] | $ | $ | $ |
December 31, 2025 | |||
Software development costs | $ | $ | $ |
Software license costs | |||
Cloud computing arrangements | |||
Total Capitalized software costs [1] [2] | $ | $ | $ |
[1]Software intangible assets are presented as part of Other Assets in the Consolidated Statements of Financial Condition.
[2]The tables above exclude assets that have been fully amortized.
in the consolidated statements of operations, is as follows:
Quarters ended September 30, | Nine months ended September 30, | |||
(In thousands) | 2026 | 2025 | 2026 | 2025 |
Software development and license costs | $ | $ | $ | $ |
Cloud computing arrangements | ||||
Total amortization expense | $ | $ | $ | $ |
Note 11 - Deposits
(In thousands) | September 30, 2026 | December 31, 2025 |
Savings accounts | $ | $ |
NOW, money market and other interest-bearing demand deposits | ||
Total savings, NOW, money market and other interest-bearing demand deposits | ||
Certificates of deposit: | ||
Under $250,000 | ||
$250,000 and over | ||
Total certificates of deposit | ||
Total interest-bearing deposits | $ | $ |
Non- interest-bearing deposits | $ | $ |
Total deposits | $ | $ |
(In thousands) | |
2026 | |
2027 | |
2028 | |
2029 | |
2030 | |
2031 and thereafter | |
Total certificates of deposit | $ |
At September 30, 2026, the Corporation had brokered deposits amounting to $1.0 billion (December 31, 2025 - $1.0 billion).
The aggregate amount of overdrafts in demand deposit accounts that were reclassified to loans was $12 million at September 30, 2026
(December 31, 2025 - $11 million).
At September 30, 2026, Puerto Rico government deposits amounted to $21.5 billion (December 31, 2025 - $19.4 billion). Puerto Rico
government deposits are interest bearing accounts, which are indexed to short-term market rates and fluctuate in cost with changes in those
rates, in accordance with contractual terms.
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Note 12 - Borrowings
Assets sold under agreements to repurchase
Assets sold under agreements to repurchase amounted to $152 million at September 30, 2026 and $39 million at December 31, 2025.
The Corporation’s repurchase transactions are collateralized with the securities detailed in the table below. The Corporation’s repurchase
agreements have a right of set-off with the respective counterparty under the supplemental terms of the master repurchase agreements. In
an event of default, each party has a right of set-off against the other party for amounts owed in the related agreement and any other
amount or obligation owed in respect of any other agreement or transaction between them. Pursuant to the Corporation’s accounting policy,
the repurchase agreements are not offset with other repurchase agreements held with the same counterparty.
The following table presents information related to the Corporation’s repurchase transactions accounted for as secured borrowings that are
collateralized with debt securities available-for-sale, debt securities held-to-maturity, and other assets held-for-trading purposes or which
have been obtained under agreements to resell. It is the Corporation’s policy to maintain effective control over assets sold under
agreements to repurchase; accordingly, such securities continue to be carried on the Consolidated Statements of Financial Condition.
September 30, 2026 | December 31, 2025 | |
Repurchase | Repurchase | |
(In thousands) | liability | liability |
U.S. Treasury securities | ||
Within 30 days | $ | |
After 30 to 90 days | ||
Total U.S. Treasury securities | ||
Total | $ | $ |
Repurchase agreements in this portfolio are generally short-term, often overnight. As such our risk is very limited. We manage the liquidity
risks arising from secured funding by sourcing funding globally from a diverse group of counterparties, providing a range of securities
collateral and pursuing longer durations, when appropriate.
Other short-term borrowings
At September 30, 2026 and December 31, 2025, other short-term borrowings consisted of $487 million and $650 million, respectively, in
FHLB Advances.
Notes Payable
(In thousands) | September 30, 2026 | December 31, 2025 |
Advances with the FHLB with maturities ranging from 2027 through 2029 paying interest at monthly fixed rates ranging from | ||
Unsecured senior debt securities maturing on 2028 paying interest semiannually at a fixed rate of issuance costs of $ | ||
Junior subordinated deferrable interest debentures (related to trust preferred securities) with maturities on 2034 with fixed interest rates ranging from | ||
Total notes payables |
Note: Refer to the 2025 Form 10-K for rates information at December 31, 2025.
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(In thousands) | Assets sold under agreements to repurchase | Short-term borrowings | Notes payable | Total |
2026 | $ | $ | $ | $ |
2027 | ||||
2028 | ||||
2029 | ||||
Later years | ||||
Total borrowings | $ | $ | $ | $ |
At September 30, 2026 and December 31, 2025, the Corporation had FHLB borrowing facilities whereby the Corporation could borrow up to
$5.0 billion and $4.8 billion, respectively, of which $600 million and $800 million, respectively, were used. The FHLB borrowing facilities are
collateralized with securities and loans held-in-portfolio, and do not have restrictive covenants or callable features.
Also, at September 30, 2026, the Corporation had borrowing facilities at the discount window of the Federal Reserve Bank of New York
amounting to $12.0 billion (December 31, 2025 - $12.1 billion), which remained unused at September 30, 2026 and December 31, 2025.
The facilities are a collateralized source of credit that is highly dependable even under difficult market conditions.
Note 13 - Other Liabilities
(In thousands) | September 30, 2026 | December 31, 2025 |
Accrued expenses | $ | |
Accrued interest payable | ||
Accounts payable | ||
Dividends payable | ||
Trades payable | ||
Liability for GNMA loans sold with an option to repurchase | ||
Reserves for loan indemnifications | ||
Reserve for operational losses | ||
Operating lease liabilities | ||
Finance lease liabilities | ||
Pension benefit obligation | ||
Postretirement benefit obligation | ||
Others | ||
Total other liabilities | $ |
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Note 14 - Other Comprehensive Income (Loss)
September 30, 2026 and 2025.
Changes in Accumulated Other Comprehensive Income (Loss) by Component [1] | |||||
Quarters ended | Nine months ended | ||||
September 30, | September 30, | ||||
(In thousands) | 2026 | 2025 | 2026 | 2025 | |
Foreign currency translation | Beginning Balance | $( | $( | $( | $( |
Other comprehensive (loss) income | ( | ( | ( | ||
Net change | ( | ( | ( | ||
Ending balance | $( | $(85,036) | $( | $( | |
Adjustment of pension and postretirement benefit plans | Beginning Balance | $( | $( | $( | $( |
Amounts reclassified from accumulated other comprehensive loss for amortization of net losses | |||||
Net change | |||||
Ending balance | $( | $( | $( | $( | |
Unrealized net holding losses on debt securities | Beginning Balance | $( | $( | $( | $( |
Other comprehensive (loss) income before reclassifications | ( | ( | |||
Amounts reclassified from accumulated other comprehensive loss for amortization of net unrealized losses of debt securities transferred from available-for- sale to held-to-maturity | |||||
Net change | ( | ( | |||
Ending balance | $( | $(1,100,794) | $( | $( | |
Total accumulated other comprehensive loss | $( | $( | $( | $( | |
[1]All amounts presented are net of tax.
quarters and nine months ended September 30, 2026 and 2025.
Reclassifications Out of Accumulated Other Comprehensive Loss | |||||
Quarters ended | Nine months ended | ||||
Affected Line Item in the | September 30, | September 30, | |||
(In thousands) | Consolidated Statements of Operations | 2026 | 2025 | 2026 | 2025 |
Adjustment of pension and postretirement benefit plans | |||||
Amortization of net losses | Other operating expenses | $( | $( | $( | $( |
Total before tax | ( | ( | ( | ( | |
Income tax benefit | |||||
Total net of tax | $( | $( | $( | $( | |
Unrealized net holding losses on debt securities | |||||
Amortization of unrealized net losses of debt securities transferred to held-to-maturity | Interest income from investment securities | $( | $( | $( | $( |
Total before tax | ( | ( | ( | ( | |
Income tax benefit | |||||
Total net of tax | $( | $( | $( | $( | |
Total reclassification adjustments, net of tax | $( | $( | $( | $( | |
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Note 15 - Guarantees
The Corporation has obligations upon the occurrence of certain events under financial guarantees provided in certain contractual
agreements. Also, from time to time, the Corporation securitized mortgage loans into guaranteed mortgage-backed securities subject in
certain instances, to lifetime credit recourse on the loans that serve as collateral for the mortgage-backed securities. The Corporation has
not sold any mortgage loans subject to credit recourse since 2009. Also, from time to time, the Corporation may sell, in bulk sale
transactions, residential mortgage loans and Small Business Administration (“SBA”) commercial loans subject to credit recourse or to certain
representations and warranties from the Corporation to the purchaser. These representations and warranties may relate, for example, to
borrower creditworthiness, loan documentation, collateral, prepayment and early payment defaults. The Corporation may be required to
repurchase the loans under the credit recourse agreements or representation and warranties.
At September 30, 2026, the Corporation serviced $384 million (December 31, 2025 - $429 million) in residential mortgage loans subject to
credit recourse provisions, principally loans associated with FNMA and FHLMC residential mortgage loan securitization programs. In the
event of any customer default, pursuant to the credit recourse provided, the Corporation is required to repurchase the loan or reimburse the
third-party investor for the loss incurred. The maximum potential amount of future payments that the Corporation would be required to make
under the recourse arrangements in the event of nonperformance by the borrowers is equivalent to the total outstanding balance of the
residential mortgage loans serviced with recourse and interest, if applicable. During the quarter and nine months ended September 30,
2026, the Corporation repurchased $288 thousand and $719 thousand, respectively, of unpaid principal balance in mortgage loans subject
to the credit recourse provisions (September 30, 2025 - $200 thousand and $1 million, respectively). In the event of nonperformance by the
borrower, the Corporation has rights to the underlying collateral securing the mortgage loan. The Corporation suffers ultimate losses on
these loans when the proceeds from a foreclosure sale of the property underlying a defaulted mortgage loan are less than the outstanding
principal balance of the loan plus any uncollected interest advanced and the costs of holding and disposing the related property. At
September 30, 2026, the Corporation’s liability established to cover the estimated credit loss exposure related to loans sold or serviced with
credit recourse amounted to $2 million (December 31, 2025 - $3 million).
From time to time, the Corporation sells loans and agrees to indemnify the purchaser for credit losses or any breach of certain
representations and warranties made in connection with the sale.
Servicing agreements relating to the mortgage-backed securities programs of FNMA, FHLMC and GNMA, and to mortgage loans sold or
serviced to certain other investors, including FHLMC, require the Corporation to advance funds to make scheduled payments of principal,
interest, taxes and insurance, if such payments have not been received from the borrowers. At September 30, 2026, the Corporation
serviced $8.0 billion in mortgage loans for third-parties, including the loans serviced with credit recourse (December 31, 2025 - $8.2 billion).
The Corporation generally recovers funds advanced pursuant to these arrangements from the mortgage owner, from liquidation proceeds
when the mortgage loan is foreclosed or, in the case of FHA/VA loans, under the applicable FHA and VA insurance and guarantees
programs. However, in the meantime, the Corporation must absorb the cost of the funds it advances during the time the advance is
outstanding. The Corporation must also bear the costs of attempting to collect on delinquent and defaulted mortgage loans. In addition, if a
defaulted loan is not cured, the mortgage loan would be canceled as part of the foreclosure proceedings and the Corporation would not
receive any future servicing income with respect to that loan. At September 30, 2026, the outstanding balance of funds advanced by the
Corporation under such mortgage loan servicing agreements was $22 million (December 31, 2025 - $30 million). To the extent the mortgage
loans underlying the Corporation’s servicing portfolio experience increased delinquencies, the Corporation would be required to dedicate
additional cash resources to comply with its obligation to advance funds as well as incur additional administrative costs related to increases
in collection efforts.
Popular, Inc. Holding Company (“PIHC”) fully and unconditionally guarantees certain borrowing obligations issued by certain of its 100
owned consolidated subsidiaries amounting to $94
September 30, 2026 and December 31, 2025, PIHC fully and unconditionally guaranteed on a subordinated basis $193
securities (trust preferred securities) issued by wholly-owned issuing trust entities to the extent set forth in the applicable guarantee
agreement. Refer to Note 17 to the Consolidated Financial Statements in the 2025 Form 10-K for further information on the trust preferred
securities.
Note 16 - Commitments and Contingencies
Off-balance sheet risk
The Corporation is a party to financial instruments with off-balance sheet credit risk in the normal course of business to meet the financial
needs of its customers. These financial instruments include loan commitments, letters of credit and standby letters of credit. These
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instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated
Statements of Financial Condition.
The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to
extend credit, standby letters of credit and financial guarantees is represented by the contractual notional amounts of those instruments.
The Corporation uses the same credit policies in making these commitments and conditional obligations as it does for those reflected on the
Consolidated Statements of Financial Condition.
presented were as follows:
(In thousands) | September 30, 2026 | December 31, 2025 |
Commitments to extend credit: | ||
Credit card lines | $ | $ |
Commercial lines of credit | ||
Construction lines of credit | ||
Other consumer unused credit commitments | ||
Commercial letters of credit | ||
Standby letters of credit | ||
Commitments to originate or fund mortgage loans |
At September 30, 2026 and December 31, 2025, the Corporation maintained a reserve of $15 million and $14 million, respectively, for
potential losses associated with unfunded loan commitments related to commercial and construction lines of credit.
Other commitments
At September 30, 2026 and December 31, 2025, the Corporation also maintained other non-credit commitments for $6 million and $7
million, respectively, primarily for the acquisition of other investments.
Business concentration
Since the Corporation’s business activities are concentrated primarily in Puerto Rico, its results of operations and financial condition are
dependent upon the general trends of the Puerto Rico economy and, in particular, the residential and commercial real estate markets. The
concentration of the Corporation’s operations in Puerto Rico exposes it to greater risk than other banking companies with a wider
geographic base. Its asset and revenue composition by geographical area is presented in Note 26 to the Consolidated Financial
Statements.
Puerto Rico has faced significant fiscal and economic challenges for over a decade. In response to such challenges, the U.S. Congress
enacted PROMESA in 2016, which, among other things, established the Oversight Board and a framework for the restructuring of the debts
of the Commonwealth, its instrumentalities and municipalities. The Commonwealth and several of its instrumentalities have availed
themselves of debt restructuring proceedings under PROMESA. As of the date of this report, while municipalities have been designated as
covered entities under PROMESA, no municipality has commenced or has been authorized by the Oversight Board to commence, any such
debt restructuring proceeding under PROMESA.
At September 30, 2026, the Corporation’s direct exposure to the Puerto Rico government and its instrumentalities and municipalities totaled
$423 million, of which $374 million were outstanding ($391 million and $342 million at December 31, 2025). The Corporation’s exposure at
September 30, 2026 included up to $47 million in Automated Clearing House (“ACH”) transaction settlement exposure, none of which was
outstanding. Of the amount outstanding, $369 million consists of loans and $5 million are securities ($333 million and $9 million at
December 31, 2025). Substantially all of the amount outstanding at September 30, 2026 and December 31, 2025 were obligations from
various Puerto Rico municipalities. In most cases, these were “general obligations" of a municipality, to which the applicable municipality has
pledged its good faith, credit and unlimited taxing power, or “special obligations" of a municipality, to which the applicable municipality has
pledged other revenues. At September 30, 2026, approximately 81 % of the Corporation’s exposure to municipal loans and securities was
concentrated in the municipalities of San Juan, Carolina, Caguas, and Guaynabo.
according to their maturities as of September 30, 2026:
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(In thousands) | Investment Portfolio | Loans | Total Outstanding | Total Exposure |
Central Government | ||||
Within 1 year | $ | $ | $ | $ |
After 10 years | ||||
Total Central Government | ||||
Government Development Bank (GDB) | ||||
After 10 years | ||||
Total Government Development Bank (GDB) | ||||
Municipalities | ||||
Within 1 year | ||||
After 1 to 5 years | ||||
After 5 to 10 years | ||||
After 10 years | ||||
Total Municipalities | ||||
Total Direct Government Exposure | $ | $ | $ | $ |
In addition, at September 30, 2026, the Corporation had $198 million in loans insured or securities issued by Puerto Rico governmental
entities but for which the principal source of repayment is non-governmental ($209 million at December 31, 2025). These included $164
million in residential mortgage loans insured by the Puerto Rico Housing Finance Authority (“HFA’’), a governmental instrumentality that has
been designated as a covered entity under PROMESA (December 31, 2025 - $167 million). These mortgage loans are secured by first
mortgages on Puerto Rico residential properties and the HFA insurance covers losses in the event of a borrower default and upon the
satisfaction of certain other conditions. The Corporation also had at September 30, 2026, $34 million in bonds issued by HFA which are
secured by second mortgage loans on Puerto Rico residential properties, and for which HFA also provides insurance to cover losses in the
event of a borrower default and upon the satisfaction of certain other conditions (December 31, 2025 - $36 million). In the event that the
mortgage loans insured by HFA and held by the Corporation directly or those serving as collateral for the HFA bonds default and the
collateral is insufficient to satisfy the outstanding balance of these loans, HFA’s ability to honor its insurance will depend, among other
factors, on the financial condition of HFA at the time such obligations become due and payable. The Corporation does not consider the
government guarantee when estimating the credit losses associated with this portfolio. Although the Governor is currently authorized by
local legislation to impose a temporary moratorium on the financial obligations of the HFA, a moratorium on such obligations has not been
imposed as of the date hereof.
BPPR’s commercial loan portfolio also includes loans to private borrowers who are service providers, lessors, suppliers or have other
relationships with the government. These borrowers could be negatively affected by the Commonwealth’s fiscal crisis and the ongoing Title
III proceedings under PROMESA. Similarly, BPPR’s mortgage and consumer loan portfolios include loans to government employees and
retirees, which could also be negatively affected by fiscal measures such as employee layoffs or furloughs or reductions in pension benefits.
In addition, $2.8 billion of residential mortgages and $86 million commercial loans were insured or guaranteed by the U.S. Government or its
agencies at September 30, 2026 (compared to $2.5 billion and $81 million, respectively, at December 31, 2025). The Corporation also had
U.S. Treasury and obligations from the U.S. Government, its agencies or government sponsored entities within the portfolio of available-for-
sale and held-to-maturity securities as described in Notes 5 and 6 to the Consolidated Financial Statements.
At September 30, 2026, the Corporation had operations in the United States Virgin Islands (the “USVI") and had $28 million in direct
exposure to USVI government entities (December 31, 2025 - $28 million). The USVI has been experiencing a number of fiscal and
economic challenges that could adversely affect the ability of its public corporations and instrumentalities to service their outstanding debt
obligations.
At September 30, 2026, the Corporation had operations in the British Virgin Islands ("BVI") and it had a loan portfolio amounting to
$198 million, comprised of various retail and commercial clients, compared to a loan portfolio of $195 million at December 31, 2025. At
September 30, 2026, the Corporation had no significant exposure to a single borrower in the BVI.
Legal Proceedings
The nature of Popular’s business ordinarily generates claims, litigation, arbitration, regulatory and governmental investigations, and legal
and administrative cases and proceedings (collectively, “Legal Proceedings”). Popular’s Legal Proceedings may involve various lines of
business and include claims relating to contract, torts, consumer protection, securities, antitrust, employment, tax and other laws. The
recovery sought in Legal Proceedings may include substantial or indeterminate compensatory damages, punitive damages, injunctive relief,
or recovery on a class-wide basis. When the Corporation determines that it has meritorious defenses to the claims asserted, it vigorously
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defends itself. The Corporation will consider the settlement of cases (including cases where it has meritorious defenses) when, in
management’s judgment, it is in the best interest of the Corporation and its stockholders to do so. On at least a quarterly basis, Popular
assesses its liabilities and contingencies relating to outstanding Legal Proceedings utilizing the most current information available. For
matters where it is probable that the Corporation will incur a material loss and the amount can be reasonably estimated, the Corporation
establishes an accrual for the loss. Once established, the accrual is adjusted on at least a quarterly basis to reflect any relevant
developments, as appropriate. For matters where a material loss is not probable, or the amount of the loss cannot be reasonably estimated,
no accrual is established.
In certain cases, exposure to loss exists in excess of any accrual to the extent such loss is reasonably possible, but not probable.
Management believes and estimates that the range of reasonably possible losses (with respect to those matters where such limits may be
determined in excess of amounts accrued) for current Legal Proceedings ranged from $0 to approximately $12 million as of September 30,
2026. In certain cases, management cannot reasonably estimate the possible loss at this time. Any estimate involves significant judgment,
given the varying stages of the Legal Proceedings (including the fact that many of them are currently in preliminary stages), the existence of
multiple defendants in several of the current Legal Proceedings whose share of liability has yet to be determined, the numerous unresolved
issues in many of the Legal Proceedings, and the inherent uncertainty of the various potential outcomes of such Legal Proceedings.
Accordingly, management’s estimate will change from time-to-time, and actual losses may be more or less than the current estimate.
While the outcome of Legal Proceedings is inherently uncertain, based on information currently available, advice of counsel, and available
insurance coverage, management believes that the amount it has already accrued is adequate and any incremental liability arising from the
Legal Proceedings in matters in which a loss amount can be reasonably estimated will not have a material adverse effect on the
Corporation’s consolidated financial position. However, in the event of unexpected future developments, it is possible that the ultimate
resolution of these matters in a reporting period, if unfavorable, could have a material adverse effect on the Corporation’s consolidated
financial position for that period.
Note 17 - Non-consolidated Variable Interest Entities
The Corporation is involved with two statutory trusts which it created to issue trust preferred securities to the public. These trusts are
deemed to be variable interest entities (“VIEs”) since the equity investors at risk have no substantial decision-making rights. The Corporation
does not hold any variable interest in the trusts, and therefore, cannot be the trusts’ primary beneficiary. Furthermore, the Corporation
concluded that it did not hold a controlling financial interest in these trusts since the decisions of the trusts are predetermined through the
trust documents and the guarantee of the trust preferred securities is irrelevant since in substance the sponsor is guaranteeing its own debt.
Also, the Corporation is involved with various special purpose entities mainly in guaranteed mortgage securitization transactions, including
GNMA and FNMA. The Corporation has also engaged in securitization transactions with FHLMC, but considers its exposure in the form of
servicing fees and servicing advances not to be significant at September 30, 2026. These special purpose entities are deemed to be VIEs
since they lack equity investments at risk. The Corporation’s continuing involvement in these guaranteed loan securitizations includes
owning certain beneficial interests in the form of securities as well as the servicing rights retained. The Corporation is not required to provide
additional financial support to any of the variable interest entities to which it has transferred the financial assets. The mortgage-backed
securities, to the extent retained, are classified in the Consolidated Statements of Financial Condition as available-for-sale or trading
securities. The Corporation concluded that, essentially, these entities (FNMA and GNMA) control the design of their respective VIEs, dictate
the quality and nature of the collateral, require the underlying insurance, set the servicing standards via the servicing guides and can
change them at will, and can remove a primary servicer with cause, and without cause in the case of FNMA. Moreover, through their
guarantee obligations, agencies (FNMA and GNMA) have the obligation to absorb losses that could be potentially significant to the VIE.
The Corporation holds variable interests in these VIEs in the form of agency mortgage-backed securities and collateralized mortgage
obligations, including those securities originated by the Corporation and those acquired from third parties. Additionally, the Corporation holds
agency mortgage-backed securities and agency collateralized mortgage obligations issued by third party VIEs in which it has no other form
of continuing involvement. Refer to Note 19 to the Consolidated Financial Statements for additional information on the debt securities
outstanding at September 30, 2026 and December 31, 2025, which are classified as available-for-sale and trading securities in the
Consolidated Statements of Financial Condition. In addition, the Corporation holds variable interests in the form of servicing fees, since it
retains the right to service the transferred loans in those government-sponsored special purpose entities (“SPEs”) and may also purchase
the right to service loans in other government-sponsored SPEs that were transferred to those SPEs by a third-party.
consolidated VIEs and the maximum exposure to loss as a result of the Corporation’s involvement as servicer of GNMA and FNMA loans at
September 30, 2026 and December 31, 2025.
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(In thousands) | September 30, 2026 | December 31, 2025 |
Assets | ||
Servicing assets: | ||
Mortgage servicing rights | $ | $ |
Total servicing assets | $ | $ |
Other assets: | ||
Servicing advances | $ | $ |
Total other assets | $ | $ |
Total assets | $ | $ |
Maximum exposure to loss | $ | $ |
The size of the non-consolidated VIEs, in which the Corporation has a variable interest in the form of servicing fees, measured as the total
unpaid principal balance of the loans, amounted to $5.5 billion at September 30, 2026 (December 31, 2025 - $6.0 billion).
The Corporation determined that the maximum exposure to loss includes the fair value of the MSRs and the assumption that the servicing
advances at September 30, 2026 and December 31, 2025, will not be recovered. The agency debt securities are not included as part of the
maximum exposure to loss since they are guaranteed by the related agencies.
ASU 2009-17 requires that an ongoing primary beneficiary assessment should be made to determine whether the Corporation is the primary
beneficiary of any of the VIEs it is involved with. The conclusion on the assessment of these non-consolidated VIEs has not changed since
their initial evaluation. The Corporation concluded that it is still not the primary beneficiary of these VIEs, and therefore, these VIEs are not
required to be consolidated in the Corporation’s financial statements at September 30, 2026.
Note 18 - Related Party Transactions
Centro Financiero BHD, S.A.
At September 30, 2026, the Corporation had a 15.63 % equity interest in Centro Financiero BHD, S.A. (“BHD"), one of the largest banking
and financial services groups in the Dominican Republic.
During the nine months ended September 30, 2026, the Corporation recorded $63 million in equity pickup (September 30, 2025 - $17
million), including income of $45 million from BHD's net earnings (September 30, 2025 - $34 million) and $18 million recorded through Other
Comprehensive Income (September 30, 2025 - $(17 ) million) related to foreign currency translation adjustments and changes in the fair
value of available-for-sale securities.
As of September 30, 2026, the investment in BHD had a carrying amount of $292 million (December 31, 2025 - $249 million) and the
Corporation received $20 million in cash dividend distributions during the nine months ended September 30, 2026 (September 30, 2025 -
$20 million).
Note 19 - Fair Value Measurement
techniques used to measure fair value into three levels in order to increase consistency and comparability in fair value measurements and
disclosures. 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 or liabilities that the Corporation has the ability to access at the
measurement date. Valuation on these instruments does not necessitate 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 Corporation’s own
judgments about assumptions that market participants would use in pricing the asset or liability.
The Corporation maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable
inputs be used when available. Fair value is based upon quoted market prices when available. If listed prices or quotes are not available,
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the Corporation employs internally-developed models that primarily use market-based inputs including yield curves, interest rates,
volatilities, and credit curves, among others. Valuation adjustments are limited to those necessary to ensure that the financial instrument’s
fair value is adequately representative of the price that would be received or paid in the marketplace. These adjustments include amounts
that reflect counterparty credit quality, the Corporation’s credit standing, constraints on liquidity and unobservable parameters that are
applied consistently. There have been no changes in the Corporation’s methodologies used to estimate the fair value of assets and liabilities
from those disclosed in the 2025 Form 10-K.
The estimated fair value may be subjective in nature and may involve uncertainties and matters of significant judgment for certain financial
instruments. Changes in the underlying assumptions used in calculating fair value could significantly affect the results.
Fair Value on a Recurring and Nonrecurring Basis
recurring basis at September 30, 2026 and December 31, 2025:
At September 30, 2026 | |||||
(In thousands) | Level 1 | Level 2 | Level 3 | Measured at NAV | Total |
RECURRING FAIR VALUE MEASUREMENTS | |||||
Assets | |||||
Debt securities available-for-sale: | |||||
U.S. Treasury securities | $ | $ | $ | $ | $ |
Collateralized mortgage obligations - federal agencies | |||||
Mortgage-backed securities | |||||
Other | |||||
Total debt securities available-for-sale | $ | $ | $ | $ | $ |
Trading account debt securities, excluding derivatives: | |||||
U.S. Treasury securities | $ | $ | $ | $ | $ |
Obligations of Puerto Rico, States and political subdivisions | |||||
Collateralized mortgage obligations | |||||
Mortgage-backed securities | |||||
Other | |||||
Total trading account debt securities, excluding derivatives | $ | $ | $ | $ | $ |
Equity securities | $ | $ | $ | $ | $ |
Mortgage servicing rights | |||||
Loans held-for-sale | |||||
Derivatives | |||||
Total assets measured at fair value on a recurring basis | $ | $ | $ | $ | $ |
Liabilities | |||||
Derivatives | $ | $( | $ | $ | $( |
Total liabilities measured at fair value on a recurring basis | $ | $( | $ | $ | $( |
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At December 31, 2025 | |||||
(In thousands) | Level 1 | Level 2 | Level 3 | Measured at NAV | Total |
RECURRING FAIR VALUE MEASUREMENTS | |||||
Assets | |||||
Debt securities available-for-sale: | |||||
U.S. Treasury securities | $ | $ | $ | $ | $ |
Collateralized mortgage obligations - federal agencies | |||||
Mortgage-backed securities | |||||
Other | |||||
Total debt securities available-for-sale | $ | $ | $ | $ | $ |
Trading account debt securities, excluding derivatives: | |||||
U.S. Treasury securities | $ | $ | $ | $ | $ |
Obligations of Puerto Rico, States and political subdivisions | |||||
Collateralized mortgage obligations | |||||
Mortgage-backed securities | |||||
Other | |||||
Total trading account debt securities, excluding derivatives | $ | $ | $ | $ | $ |
Equity securities | $ | $ | $ | $ | $ |
Mortgage servicing rights | |||||
Loans held-for-sale | |||||
Derivatives | |||||
Total assets measured at fair value on a recurring basis | $ | $ | $ | $ | $ |
Liabilities | |||||
Derivatives | $ | $( | $ | $ | $( |
Total liabilities measured at fair value on a recurring basis | $ | $( | $ | $ | $( |
Loans held-for-sale measured at fair value
Loans held-for-sale measured at fair value were priced based on secondary market prices. These loans are classified as Level 2.
for-sale measured under the fair value option as of September 30, 2026 and December 31, 2025.
(In thousands) | September 30, 2026 | ||
Fair Value | Aggregate Unpaid Principal Balance | Difference | |
Loans held for sale | $ | $ | $( |
(In thousands) | December 31, 2025 | ||
Fair Value | Aggregate Unpaid Principal Balance | Difference | |
Loans held for sale | $ | $ | $ |
No loans held-for-sale under the fair value option were 90 or more days past due or on non-accrual status as of September 30, 2026 and
December 31, 2025.
recorded during the nine months ended September 30, 2026 and 2025 and excludes nonrecurring fair value measurements of assets no
longer outstanding as of the reporting date.
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Nine months ended September 30, 2026 | |||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | |
NONRECURRING FAIR VALUE MEASUREMENTS | |||||
Assets | Write-downs | ||||
Loans held-in-portfolio [1] | $ | $ | $ | $ | $( |
Loans held-for-sale [2] | |||||
Other real estate owned [3] | ( | ||||
Other foreclosed assets [3] | ( | ||||
Total assets measured at fair value on a nonrecurring basis | $ | $ | $ | $ | $( |
[1]Relates mainly to certain impaired collateral dependent loans. The impairment was measured based on the fair value of the collateral, which is derived from
appraisals that take into consideration prices in observed transactions involving similar assets in similar locations. Costs to sell are excluded from the
reported fair value amount.
[2]Relates to impaired commercial loan for which the Corporation has the intent to sell as of September 30, 2026.
[3]Represents the fair value of foreclosed real estate and other collateral owned that were written down to their fair value. Costs to sell are excluded from the
reported fair value amount.
Nine months ended September 30, 2025 | |||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | |
NONRECURRING FAIR VALUE MEASUREMENTS | |||||
Assets | Write-downs | ||||
Other real estate owned [1] | $ | $ | $ | $ | $( |
Other foreclosed assets [1] | ( | ||||
Total assets measured at fair value on a nonrecurring basis | $ | $ | $ | $ | $( |
[1]Represents the fair value of foreclosed real estate and other collateral owned that were written down to their fair value. Costs to sell are excluded from the
reported fair value amount.
nine months ended September 30, 2026 and 2025.
Quarters ended September 30, 2026 | ||||||
(In thousands) | MBS classified as debt securities available- for-sale | Other securities classified as debt securities available- for-sale | MBS classified as trading account debt securities | Other securities classified as trading account debt securities | Mortgage servicing rights | Total assets |
Balance at June 30, 2026 | $ | $ | $ | $ | $ | $ |
Gains (losses) included in earnings | ( | ( | ( | |||
Additions | ||||||
Settlements | ( | ( | ||||
Balance at September 30, 2026 | $ | $ | $ | $ | $ | $ |
Changes in unrealized gains (losses) included in earnings relating to assets still held at September 30, 2026 | $ | $ | $ | $ | $ | $ |
Nine months ended September 30, 2026 | ||||||
(In thousands) | MBS classified as debt securities available- for-sale | Other securities classified as debt securities available- for-sale | MBS classified as trading account debt securities | Other securities classified as trading account debt securities | Mortgage servicing rights | Total assets |
Balance at January 1, 2026 | $ | $ | $ | $ | $ | $ |
Gains (losses) included in earnings | ( | ( | ( | |||
Gains (losses) included in OCI | ||||||
Additions | ||||||
Settlements | ( | ( | ( | |||
Balance at September 30, 2026 | $ | $ | $ | $ | $ | $ |
Changes in unrealized gains (losses) included in earnings relating to assets still held at September 30, 2026 | $ | $ | $ | $ | $ | $ |
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Quarter ended September 30, 2025 | ||||||
(In thousands) | MBS classified as debt securities available- for-sale | Other securities classified as debt securities available- for-sale | MBS classified as trading account debt securities | Other securities classified as trading account debt securities | Mortgage servicing rights | Total assets |
Balance at June 30, 2025 | $ | $ | $ | $ | $ | $ |
Gains (losses) included in earnings | ( | ( | ( | |||
Gains (losses) included in OCI | ( | ( | ||||
Additions | ||||||
Balance at September 30, 2025 | $ | $ | $ | $ | $ | $ |
Changes in unrealized gains (losses) included in earnings relating to assets still held at September 30, 2025 | $ | $ | $ | $ | $( | $( |
Nine months ended September 30, 2025 | ||||||
(In thousands) | MBS classified as debt securities available- for-sale | Other securities classified as debt securities available- for-sale | MBS classified as trading account securities | Other securities classified as trading account debt securities | Mortgage servicing rights | Total assets |
Balance at January 1, 2025 | $ | $ | $ | $ | $ | $ |
Gains (losses) included in earnings | ( | ( | ( | |||
Gain (losses) included in OCI | ( | ( | ||||
Additions | ||||||
Settlements | ( | ( | ||||
Transfers out of Level 3 | $ | $( | $ | $ | $ | $( |
Balance at September 30, 2025 | $ | $ | $ | $ | $ | $ |
Changes in unrealized gains (losses) included in earnings relating to assets still held at September 30, 2025 | $ | $ | $ | $ | $( | $( |
Level 3 assets and liabilities included in the previous tables are reported in the Consolidated Statements of Operations as follows:
Quarter ended September 30, 2026 | Nine months ended September 30, 2026 | |||
(In thousands) | Total gains (losses) included in earnings | Changes in unrealized gains (losses) relating to assets still held at reporting date | Total gains (losses) included in earnings | Changes in unrealized gains (losses) relating to assets still held at reporting date |
Mortgage banking activities | $( | $ | $( | $ |
Trading account profit (loss) | ( | ( | ||
Total | $( | $ | $( | $ |
Quarter ended September 30, 2025 | Nine months ended September 30, 2025 | |||
(In thousands) | Total gains (losses) included in earnings | Changes in unrealized gains (losses) relating to assets still held at reporting date | Total gains (losses) included in earnings | Changes in unrealized gains (losses) relating to assets still held at reporting date |
Mortgage banking activities | $( | $( | $( | $( |
Trading account profit (loss) | ( | ( | ||
Total | $( | $( | $( | $( |
instruments, excluding those instruments for which the unobservable inputs were not developed by the Corporation such as prices of prior
transactions and/or unadjusted third-party pricing sources at September 30, 2026 and 2025.
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(In thousands) | Fair value at September 30, 2026 | Valuation technique | Unobservable inputs | Weighted average (range) [1] | |
Other - trading | $ | Discounted cash flow model | Weighted average life | ||
Yield | |||||
Prepayment speed | |||||
Loans held-in-portfolio | $ | [2] | External appraisal | Haircut applied on | |
external appraisals |
[1]Weighted average of significant unobservable inputs used to develop Level 3 fair value measurements were calculated by relative fair value.
[2]Loans held-in-portfolio in which haircuts were not applied to external appraisals were excluded from this table.
(In thousands) | Fair value at September 30, 2025 | Valuation technique | Unobservable inputs | Weighted average (range) [1] | |
Other - trading | $ | Discounted cash flow model | Weighted average life | ||
Yield | |||||
Prepayment speed | |||||
Other real estate owned | $ | [2] | External appraisal | Haircut applied on | |
external appraisals |
[1]Weighted average of significant unobservable inputs used to develop Level 3 fair value measurements were calculated by relative fair value.
[2]Loans held-in portfolio in which haircuts were not applied to external appraisals were excluded from this table.
Note 20 - Fair Value of Financial Instruments
The fair value of financial instruments is the amount at which an asset or obligation could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale. For those financial instruments with no quoted market prices available, fair values
have been estimated using present value calculations or other valuation techniques, as well as management’s best judgment with respect to
current economic conditions, including discount rates, estimates of future cash flows, and prepayment assumptions. Many of these
estimates involve various assumptions and may vary significantly from amounts that could be realized in actual transactions.
The fair values reflected herein have been determined based on the prevailing rate environment at September 30, 2026 and December 31,
2025, as applicable. In different interest rate environments, fair value estimates can differ significantly, especially for certain fixed rate
financial instruments. In addition, the fair values presented do not attempt to estimate the value of the Corporation’s fee generating
businesses and anticipated future business activities, that is, they do not represent the Corporation’s value as a going concern. There have
been no changes in the Corporation’s valuation methodologies and inputs used to estimate the fair values for each class of financial assets
and liabilities not measured at fair value.
value hierarchy. The aggregate fair value amounts of the financial instruments disclosed do not represent management’s estimate of the
underlying value of the Corporation.
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September 30, 2026 | ||||||
Carrying | Measured | |||||
(In thousands) | amount | Level 1 | Level 2 | Level 3 | at NAV | Fair value |
Financial Assets: | ||||||
Cash and due from banks | $ | $ | $ | $ | $ | $ |
Money market investments | ||||||
Trading account debt securities, excluding derivatives [1] | ||||||
Debt securities available-for-sale [1] | ||||||
Debt securities held-to-maturity: | ||||||
U.S. Treasury securities | $ | $ | $ | $ | $ | $ |
Obligations of Puerto Rico, States and political subdivisions | ||||||
Collateralized mortgage obligation-federal agency | ||||||
Securities in wholly owned statutory business trusts | ||||||
Total debt securities held-to-maturity | $ | $ | $ | $ | $ | $ |
Equity securities: | ||||||
FHLB stock | $ | $ | $ | $ | $ | $ |
FRB stock | ||||||
Other investments | ||||||
Total equity securities | $ | $ | $ | $ | $ | $ |
Loans held-for-sale | $ | $ | $ | $ | $ | $ |
Loans held-in-portfolio | ||||||
Mortgage servicing rights | ||||||
Derivatives | ||||||
September 30, 2026 | ||||||
Carrying | Measured | |||||
(In thousands) | amount | Level 1 | Level 2 | Level 3 | at NAV | Fair value |
Financial Liabilities: | ||||||
Deposits: | ||||||
Demand deposits | $ | $ | $ | $ | $ | |
Time deposits | ||||||
Total deposits | $ | $ | $ | $ | $ | $ |
Assets sold under agreements to repurchase | $ | $ | $ | $ | $ | $ |
Other short-term borrowings [2] | $ | |||||
Notes payable: | ||||||
FHLB advances | $ | $ | $ | $ | $ | $ |
Unsecured senior debt securities | ||||||
Junior subordinated deferrable interest debentures (related to trust preferred securities) | ||||||
Total notes payable | $ | $ | $ | $ | $ | $ |
Derivatives | $( | $ | $( | $ | $ | $( |
[1]Refer to Note 19 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level.
[2]Refer to Note 12 to the Consolidated Financial Statements for the composition of other short-term borrowings.
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December 31, 2025 | ||||||
Carrying | Measured | |||||
(In thousands) | amount | Level 1 | Level 2 | Level 3 | at NAV | Fair value |
Financial Assets: | ||||||
Cash and due from banks | $ | $ | $ | $ | $ | $ |
Money market investments | ||||||
Trading account debt securities, excluding derivatives [1] | ||||||
Debt securities available-for-sale [1] | ||||||
Debt securities held-to-maturity: | ||||||
U.S. Treasury securities | $ | $ | $ | $ | $ | $ |
Obligations of Puerto Rico, States and political subdivisions | ||||||
Collateralized mortgage obligation-federal agency | ||||||
Securities in wholly owned statutory business trusts | ||||||
Total debt securities held-to-maturity | $ | $ | $ | $ | $ | $ |
Equity securities: | ||||||
FHLB stock | $ | $ | $ | $ | $ | $ |
FRB stock | ||||||
Other investments | ||||||
Total equity securities | $ | $ | $ | $ | $ | $ |
Loans held-for-sale | $ | $ | $ | $ | $ | $ |
Loans held-in-portfolio | ||||||
Mortgage servicing rights | ||||||
Derivatives | ||||||
December 31, 2025 | ||||||
Carrying | Measured | |||||
(In thousands) | amount | Level 1 | Level 2 | Level 3 | at NAV | Fair value |
Financial Liabilities: | ||||||
Deposits: | ||||||
Demand deposits | $ | $ | $ | $ | $ | $ |
Time deposits | ||||||
Total deposits | $ | $ | $ | $ | $ | $ |
Assets sold under agreements to repurchase | $ | $ | $ | $ | $ | $ |
Other short-term borrowings [2] | ||||||
Notes payable: | ||||||
FHLB advances | $ | $ | $ | $ | $ | $ |
Unsecured senior debt securities | ||||||
Junior subordinated deferrable interest debentures (related to trust preferred securities) | ||||||
Total notes payable | $ | $ | $ | $ | $ | $ |
Derivatives | $ | $ | $ | $ | $ | $ |
[1]Refer to Note 19 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level.
[2]Refer to Note 12 to the Consolidated Financial Statements for the composition of other short-term borrowings.
Refer to Note 16 to the Consolidated Financial Statements for the notional amount of commitments to extend credit, which represents the
unused portion of credit facilities granted to customers, and letters of credit, which represent the contractual amount that is required to be
paid in the event of nonperformance, at September 30, 2026 and December 31, 2025. The fair value of commitments to extend credit and
letters of credit, which are based on the fees charged to enter into those agreements, are not material to Popular’s financial statements.
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Note 21 - Net Income per Common Share
ended September 30, 2026 and 2025:
Quarters ended September 30, | Nine months ended September 30, | |||
(In thousands, except per share information) | 2026 | 2025 | 2026 | 2025 |
Net income | $ | $ | $ | $ |
Preferred stock dividends | ( | ( | ( | ( |
Net income applicable to common stock | $ | $ | $ | $ |
Average common shares outstanding | ||||
Average potential dilutive common shares | ||||
Average common shares outstanding - assuming dilution | ||||
Basic EPS | $ | $ | $ | $ |
Diluted EPS | $ | $ | $ | $ |
For the quarters and nine months ended September 30, 2026 and 2025, the Corporation calculated the impact of potential dilutive common
shares under the treasury stock method, consistent with the method used for the preparation of the financial statements for the year ended
December 31, 2025. For a discussion of the calculation under the treasury stock method, refer to Note 30 of the Consolidated Financial
Statements included in the 2025 Form 10-K.
Note 22 - Revenue from Contracts with Customers
nine months ended September 30, 2026 and 2025.
Quarter ended September 30, | Nine months ended September 30, | |||
(In thousands) | 2026 | 2026 | ||
BPPR | Popular U.S. | BPPR | Popular U.S. | |
Service charges on deposit accounts | $ | $ | $ | |
Other service fees: | ||||
Debit card fees | ||||
Insurance fees, excluding reinsurance | ||||
Credit card fees, excluding late fees and membership fees | ||||
Sale and administration of investment products | ||||
Trust fees | ||||
Total revenue from contracts with customers [1] | $ | $ | $ | $ |
[1]The amounts include intersegment transactions of $0.2 million and $1 million, respectively, for the quarter and nine months ended September 30, 2026.
Quarter ended September 30, | Nine months ended September 30, | |||
(In thousands) | 2025 | 2025 | ||
BPPR | Popular U.S. | BPPR | Popular U.S. | |
Service charges on deposit accounts | $ | $ | $ | $ |
Other service fees: | ||||
Debit card fees | ||||
Insurance fees, excluding reinsurance | ||||
Credit card fees, excluding late fees and membership fees | ||||
Sale and administration of investment products | ||||
Trust fees | ||||
Total revenue from contracts with customers [1] | $ | $ | $ | $ |
[1]The amounts include intersegment transactions of $600 thousand and $2 million, respectively, for the quarter and nine months ended September 30, 2025.
transferring the promised services to the customers based on ASC Topic 606 Revenue from Contracts with Customers. Revenue streams
identified from contracts with customers, as listed above, will have certain timing for recognition based on the nature of the contract
including when the obligation is satisfied and/or services are rendered. Service charges on deposit accounts, debit card fees, and credit
card fees are recognized at a point in time, upon the occurrence of an activity or an event. Interchange fees on debit and credit card
transactions are recognized upon settlement of the payment transaction. For more details over nature and timing of revenue streams from
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contracts with customers refer to Note 31 on the 2025 Form 10-K for a complete description of the nature and timing of revenue streams
from contracts with customers.
Note 23 - Stock-Based Compensation
Incentive Plan
On May 12, 2020, the stockholders of the Corporation approved the Popular, Inc. 2020 Omnibus Incentive Plan, which permits the
Corporation to issue several types of stock-based compensation to employees and directors of the Corporation and/or any of its subsidiaries
(the “2020 Incentive Plan"). The 2020 Incentive Plan replaced the Popular, Inc. 2004 Omnibus Incentive Plan, which was in effect prior to
the adoption of the 2020 Incentive Plan (the “2004 Incentive Plan" and, together with the 2020 Incentive Plan, the “Incentive Plan").
Participants under the Incentive Plan are designated by the Talent and Compensation Committee of the Board of Directors (or its delegate,
as determined by the Board). Under the Incentive Plan, the Corporation has issued restricted stock and performance shares to its
employees and restricted stock and restricted stock units (“RSUs”) to its directors.
The restricted stock granted under the Incentive Plan to employees becomes vested based on the employees’ continued service with
Popular. Unless otherwise stated in an agreement, the compensation cost associated with the shares of restricted stock granted prior to
2021 was determined based on a two-prong vesting schedule. These grants include ratable vesting over five or four years commencing at
the date of grant (the "graduated vesting portion") with a portion vested at termination of employment after attainment of 55 years of age and
at termination of employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age and 5 years of service.
Restricted stock granted on or after 2021 have ratable vesting in equal annual installments over a period of 4 years or 3 years, depending
on the classification of the employee. The vesting schedule is accelerated at termination of employment after attaining the earlier of 55
years of age and 10 years of service or 60 years of age and 5 years of service.
The performance share awards granted under the Incentive Plan consist of the opportunity to receive shares of Popular, Inc.’s common
stock provided that the Corporation achieves certain goals during a three-year performance cycle. The goals are based on two metrics
weighted equally: the Relative Total Shareholder Return (“TSR") and the Absolute Return on Average Tangible Common Equity (“ROTCE”).
The TSR metric is a market condition under ASC Topic 718. For equity settled awards based on market conditions, the fair value is
determined as of the grant date and is not subsequently revised based on actual performance. The ROTCE metric is a performance
condition under ASC Topic 718. For equity settled awards based on a performance condition, the fair value is determined based on the
probability of achieving the ROTCE goal as of each reporting period. The TSR and ROTCE metrics are equally weighted and work
independently. The number of shares that will ultimately vest ranges from 50 % to a 150 % target based on both market (TSR) and
performance (ROTCE) conditions. The performance shares vest at the end of the three-year performance cycle. If a participant terminates
employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age and 5 years of service, the performance
shares shall continue outstanding and vest at the end of the performance cycle.
(Not in thousands) | Shares | Weighted-Average Grant Date Fair Value |
Non-vested at December 31, 2024 | $ | |
Granted | ||
Performance Shares Quantity Adjustment | ||
Vested | ( | |
Forfeited | ( | |
Non-vested at December 31, 2025 | $ | |
Granted | $ | |
Performance Shares Quantity Adjustment | $ | |
Vested | ( | $ |
Forfeited | ( | $ |
Non-vested at September 30, 2026 | $ |
During the quarter ended September 30, 2026, 20,838 shares of restricted stock were awarded to management under the Incentive Plan.
During the quarter ended September 30, 2025, no shares of restricted stock were awarded to management under the Incentive Plan. During
the quarters ended September 30, 2026 and 2025, no
the nine months ended September 30, 2026, 123,858 shares of restricted stock (September 30, 2025 – 194,268 ) and 35,820 performance
shares (September 30, 2025 - 31,660 ) were awarded to management under the Incentive Plan.
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During the quarter ended September 30, 2026, the Corporation recognized $5 million of restricted stock expense related to management
incentive awards, with a tax benefit of $400 thousand (September 30, 2025 - $2 million, with a tax benefit of $400 thousand). For the nine
months ended September 30, 2026, the Corporation recognized $16 million of restricted stock expense related to management incentive
awards, with a tax benefit of $2 million (September 30, 2025 - $16 million, with a tax benefit of $2 million). For the nine months ended
September 30, 2026, the fair market value of the restricted stock and performance shares vested was $28 million on the grant date and $51
million at vesting date. This differential triggers a windfall of $9 million that was recorded as a reduction to income tax expense. During the
quarter ended September 30, 2026, the Corporation recognized $500 thousand of performance shares expense, with a tax benefit of $32
thousand due to performance shares target adjustment (September 30, 2025 - $(1 ) million, with a tax benefit of $(100 ) thousand). For the
nine months ended September 30, 2026, the Corporation recognized $6 million of performance shares expense, with a tax benefit of $300
thousand (September 30, 2025 - $3 million, with a tax benefit of $300 thousand). The total unrecognized compensation cost related to non-
vested restricted stock awards and performance shares to members of management at September 30, 2026 was $16 million and is
expected to be recognized over a weighted-average period of 1.44 years.
(Not in thousands) | RSUs / Restricted stock | Weighted-Average Grant Date Fair Value per Unit |
Non-vested at December 31, 2024 | $ | |
Granted | ||
Vested | ( | |
Forfeited | ||
Non-vested at December 31, 2025 | $ | |
Granted | ||
Vested | ( | |
Forfeited | ||
Non-vested at September 30, 2026 | $ |
The equity awards granted to members of the Board of Directors of Popular, Inc. (the “Directors") after May 2025 will vest and become non-
forfeitable on the first anniversary of the grant date of such award. Equity awards granted to the Directors may be paid in either common
stock or RSUs, at each Director’s election. If RSUs are elected, the Directors may defer the delivery of the shares of common stock
underlying the RSUs award until their retirement. To the extent that cash dividends are paid on the Corporation’s outstanding common
stock, the Directors will receive an additional number of RSUs that reflect a reinvested dividend equivalent.
During the quarter ended September 30, 2026, 951 RSUs and no shares of restricted stock were granted to the Directors (September 30,
2025 - 1,260 RSUs and no shares of restricted stock) and the Corporation recognized $800 thousand of expense related to these shares
with a tax benefit of $100 thousand (September 30, 2025 - $600 thousand with a tax benefit of $100 thousand). For the nine months ended
September 30, 2026, the Corporation granted 14,280 RSUs and 906 shares of restricted stock to the Directors (September 30, 2025 -
benefit of $300 thousand, (September 30, 2025 - $1 million, with a tax benefit of $200 thousand). For the nine months ended September 30,
2026, the fair market value of the RSU and restricted stock vested was $2 million on the grant date and $6 million at vesting date. This
differential triggers a windfall of $1 million that was recorded as a reduction to income tax expense.
Note 24 - Income Taxes
For the quarter ended September 30, 2026, the Corporation recorded income tax expense of $30 million, a decrease of $6 million from
$36.0 million in the comparable 2025 period. The effective tax rate ("ETR") decreased to 11.0 % from 14.5 %. For the nine month period
ended September 30, 2026, income tax expense was $123 million, a decrease of $6 million from $129 million reported for the comparable
period of 2025. The ETR decreased to 13.8 % from 17.7 %. The lower ETR for the quarter and nine month period were driven by higher
exempt income, other tax benefits recognized, including the purchase of tax credits, and tax benefits recognized upon the vesting of
restricted stock awards during the nine-month period. The Puerto Rico statutory tax rate is 37.5
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and their tax bases. Significant components of the Corporation’s deferred tax assets and liabilities at September 30,
2026, and December 31, 2025, were as follows:
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September 30, 2026 | |||
(In thousands) | PR | US | Total |
Deferred tax assets: | |||
Tax credits available for carryforward | $ | $ | $ |
Net operating loss and other carryforward available | |||
Postretirement and pension benefits | |||
Allowance for credit losses | |||
Depreciation | |||
FDIC-assisted transaction | |||
Lease liability | |||
Unrealized net loss on investment securities | |||
Mortgage Servicing Rights | |||
Other temporary differences | |||
Total gross deferred tax assets | |||
Deferred tax liabilities: | |||
Intangibles | |||
Right of use assets | |||
Deferred loan origination fees/cost | |||
Loans acquired | |||
Other temporary differences | |||
Total gross deferred tax liabilities | |||
Valuation allowance | |||
Net deferred tax asset | $ | $ | $ |
December 31, 2025 | |||
(In thousands) | PR | US | Total |
Deferred tax assets: | |||
Tax credits available for carryforward | $ | $ | $ |
Net operating loss and other carryforward available | |||
Postretirement and pension benefits | |||
Allowance for credit losses | |||
Deferred loan origination fees/cost | ( | ||
Depreciation | |||
FDIC-assisted transaction | |||
Lease liability | |||
Unrealized net loss on investment securities | |||
Difference in outside basis from pass-through entities | |||
Mortgage Servicing Rights | |||
Other temporary differences | |||
Total gross deferred tax assets | |||
Deferred tax liabilities: | |||
Intangibles | |||
Right of use assets | |||
Loans acquired | |||
Other temporary differences | |||
Total gross deferred tax liabilities | |||
Valuation allowance | |||
Net deferred tax asset | $ | $ | $ |
The net deferred tax assets shown in the table above at September 30, 2026, are reflected in the Consolidated Statements of Financial
Condition as $835 million in net deferred tax assets in the “Other assets" caption (December 31, 2025 - $814 million) and $649 thousand in
deferred tax liabilities in the “Other liabilities" caption (December 31, 2025 - $2 million), reflecting the aggregate deferred tax assets or
liabilities of individual tax-paying subsidiaries of the Corporation in their respective tax jurisdiction, Puerto Rico or the United States.
At September 30, 2026, the net deferred tax assets of the U.S. operations, before valuation allowance, amounted to $601 million. After
considering the valuation allowance of $387 million, the total net deferred tax assets amounted to $214 million. The U.S. Operations have
generated taxable income each of the last three years. The financial results for the nine-month period of 2026 continued to show an upward
trend similar to 2024 and 2025. The Corporation evaluates performance trends, including the sustained improvement in operating results
over recent periods as objectively verifiable positive evidence. However, the Corporation considered as negative evidence history of
inconsistency of performance trends, together with the inherent uncertainty in predicting future taxable income given the impact of external
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factors such as changes in macroeconomic conditions, geopolitical issues, and shifts in monetary policy. In addition, management evaluated
the expiration period of the NOLs carried forward which begin to expire in 2028.
At September 30, 2026, after weighting all positive and negative evidence, the Corporation concluded that it is more likely than not that
$214 million of the deferred tax assets from the U.S. operations, comprised mainly of net operating losses, will be realized. The Corporation
based this determination on its estimated taxable income available to realize the deferred tax assets for the remaining carryforward periods,
together with the historical level of book income adjusted by permanent differences and taxable income. Management will continue to
monitor and review, on a quarterly basis, the U.S. operation’s results, including recent earnings trends, pre-tax earnings forecasts, new tax
initiatives, and performance indicators, such as net income versus forecast, targeted loan growth, net interest income margin, changes in
deposit costs, allowance for credit losses, charge-offs, NPLs inflows, and NPA balances. Significant changes, or a combination of changes,
could positively or negatively impact the amount of deferred tax assets to be realized in the future.
At September 30, 2026, the Corporation’s net deferred tax assets related to its Puerto Rico operations amounted to $707 million. The
Corporation’s Puerto Rico Banking operation has a historical record of profitability. This is considered as strong objectively verifiable positive
evidence that outweighs any negative evidence considered by management in the evaluation of the realization of the deferred tax assets.
Based on this evidence and management’s estimate of future taxable income, the Corporation has concluded that it is more likely than not
that such net deferred tax assets of the Puerto Rico Banking operations will be realized.
The Holding Company operation has been in a cumulative loss position. Management expects these losses will be a trend in future years.
This objectively verifiable negative evidence is considered by management strong negative evidence that suggests that income in future
years will be insufficient to support the realization of all deferred tax assets. After weighting of all positive and negative evidence
management concluded, as of the reporting date, that it is more likely than not that the Holding Company will not be able to realize any
portion of the deferred tax assets. Accordingly, the Corporation has maintained a valuation allowance on the deferred tax assets of
$88 million as of September 30, 2026.
The Corporation and its subsidiaries file income tax returns in Puerto Rico, the U.S. federal jurisdiction, various U.S. states and political
subdivisions, and foreign jurisdictions. At September 30, 2026, the following years remain subject to examination in the U.S. Federal
jurisdiction, 2022 and thereafter; and in the Puerto Rico jurisdiction, 2019 and thereafter.
Note 25 - Supplemental Disclosure on the Consolidated Statements of Cash Flows
2025 are listed in the following table:
(In thousands) | September 30, 2026 | September 30, 2025 |
Non-cash activities: | ||
Loans transferred to other real estate | $ | $ |
Loans transferred to other property | ||
Total loans transferred to foreclosed assets | ||
Loans transferred to other assets | ||
Financed sales of other real estate assets | ||
Financed sales of other foreclosed assets | ||
Total financed sales of foreclosed assets | ||
Financed sale of premises and equipment | ||
Transfers from loans held-in-portfolio to loans held-for-sale | ||
Transfers from loans held-for-sale to loans held-in-portfolio | ||
Loans securitized into investment securities [1] | ||
Trades receivable from brokers and counterparties | ||
Trades payable to brokers and counterparties | ||
Net change in receivables from investments maturities | ||
Recognition of mortgage servicing rights on securitizations or asset transfers | ||
Loans booked under the GNMA buy-back option | ||
Capitalization of lease right of use asset |
[1]Includes loans securitized into trading securities and subsequently sold before quarter end.
of Financial Condition that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.
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(In thousands) | September 30, 2026 | September 30, 2025 |
Cash and due from banks | $ | $ |
Restricted cash and due from banks | ||
Restricted cash in money market investments | ||
Total cash and due from banks, and restricted cash [2] | $ | $ |
[2]Refer to Note 4 - Restrictions on cash and due from banks and certain securities for nature of restrictions.
Note 26 - Segment Reporting
The Corporation’s corporate structure consists of two reportable segments – Banco Popular de Puerto Rico and Popular U.S. Management
determined the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate
resources. The segments were determined based on the organizational structure, which focuses primarily on the markets the segments
serve, as well as on the products and services offered by the segments.
The chief operating decision maker (“CODM”) of the Corporation is the Chief Executive Officer (“CEO") who utilizes net income as one of
the segment profitability measures, to evaluate the performance of each reportable segment and assess where to allocate resources
effectively. The CEO receives profitability reports that include net income per segment, net interest income and other income and expense
categories. The CODM uses the segment’s net income and components of net income, including segment revenues and expenses to
assess performance and to manage important aspects by each reportable segments, such as human capital, investment in technology,
making budget allocations, as well as other strategic decisions.
Banco Popular de Puerto Rico:
The Banco Popular de Puerto Rico reportable segment includes commercial, consumer and retail banking operations, as well as mortgage
and auto lending operations conducted at BPPR, including U.S. based activities conducted through its New York Branch. Other financial
services within the BPPR segment include the trust service units of BPPR, asset management services of Popular Asset Management and
the brokerage operations of Popular Securities, and the insurance agency and reinsurance businesses of Popular Insurance, Popular Risk
Services, Popular Life Re, and Popular Re.
Popular U.S.:
Popular U.S. reportable segment consists of the banking operations of Popular Bank (PB), Popular Insurance Agency, U.S.A., and PEF. PB
operates through a retail branch network in the U.S. mainland under the name of Popular, and equipment leasing and financing services
through PEF. Popular Insurance Agency, U.S.A. offers investment and insurance services across the PB branch network.
The Corporate group consists primarily of the holding companies Popular, Inc., Popular North America, Popular International Bank and
certain of the Corporation’s investments accounted for under the equity method, including BHD.
The accounting policies of the individual operating segments are the same as those of the Corporation. Transactions between reportable
segments are primarily conducted at market rates, resulting in profits that are eliminated for reporting consolidated results of operations.
Assets representing transactions between reportable segments or the Corporate group are also eliminated in the tables presented below.
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2026 | |||
For the quarter ended September 30, 2026 | |||
(In thousands) | BPPR | Popular U.S. | Intersegment Eliminations |
Interest income | $ | $ | $ |
Interest expense | |||
Net interest income | |||
Provision for credit losses | ( | ||
Non-interest income | ( | ||
Personnel costs | ( | ||
Professional fees | |||
Technology and software expenses | |||
Processing and transactional services | |||
Amortization of intangibles | |||
Depreciation expense | |||
Other operating expenses [1] | |||
Total operating expenses | ( | ||
Income before income tax | |||
Income tax expense | |||
Net income | $ | $ | $ |
Segment assets | $ | $ | $( |
[1] Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes, communications expense, business promotion expenses, deposit insurance costs and OREO expenses. | |||
For the quarter ended September 30, 2026 | ||||
(In thousands) | Reportable Segments | Corporate | Eliminations | Total Popular, Inc. |
Interest income | $ | $ | $( | $ |
Interest expense | ( | |||
Net interest income (expense) | ( | |||
Provision for credit losses (benefit) | ( | |||
Non-interest income | ( | |||
Personnel costs | ( | |||
Professional fees | ( | |||
Technology and software expenses | ||||
Processing and transactional services | ||||
Amortization of intangibles | ||||
Depreciation expense | ||||
Other operating expenses [1] | ( | ( | ||
Total operating expenses | ( | |||
Income before income tax | ( | |||
Income tax expense (benefit) | ( | |||
Net income | $ | $ | $( | $ |
Segment assets | $ | $ | $( | $ |
[1] Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes, communications expense, business promotion expenses, deposit insurance costs and OREO expenses. | ||||
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For the nine months ended September 30, 2026 | |||
(In thousands) | BPPR | Popular U.S. | Intersegment Eliminations |
Interest income | $ | $ | $ |
Interest expense | |||
Net interest income | |||
Provision for credit losses | |||
Non-interest income | ( | ||
Personnel costs | ( | ||
Professional fees | |||
Technology and software expenses | |||
Processing and transactional services | |||
Amortization of intangibles | |||
Depreciation expense | |||
Other operating expenses [1] | |||
Total operating expenses | ( | ||
Income before income tax | |||
Income tax expense | |||
Net income | $ | $ | $ |
Segment assets | $ | $ | $( |
For the nine months ended September 30, 2026 | ||||
(In thousands) | Reportable Segments | Corporate | Eliminations | Total Popular, Inc. |
Interest income | $ | $ | $( | $ |
Interest expense | ( | |||
Net interest income (expense) | ( | |||
Provision for credit losses (benefit) | ( | |||
Non-interest income | ( | |||
Personnel costs | ( | |||
Professional fees | ( | |||
Technology and software expenses | ||||
Processing and transactional services | ||||
Amortization of intangibles | ||||
Depreciation expense | ||||
Operating expenses [1] | ( | ( | ||
Total operating expenses | ( | |||
Income before income tax | ( | |||
Income tax expense (benefit) | ( | |||
Net income | $ | $ | $( | $ |
Segment assets | $ | $ | $( | $ |
[1] Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes, communications expense, business promotion expenses, deposit insurance costs and OREO expenses. | ||||
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2025 | |||
For the quarter ended September 30, 2025 | |||
(In thousands) | BPPR | Popular U.S. | Intersegment Eliminations |
Interest income | $ | $ | $( |
Interest expense | ( | ||
Net interest income | |||
Provision for credit losses (benefit) | |||
Non-interest income | |||
Personnel costs | |||
Professional fees | |||
Technology and software expenses | |||
Processing and transactional services | |||
Amortization of intangibles | |||
Goodwill impairment charge | |||
Depreciation expense | |||
Other operating expenses[1] | |||
Total operating expenses | |||
Income before income tax | |||
Income tax expense | |||
Net income | $ | $ | $ |
Segment assets | $ | $ | $( |
For the quarter ended September 30, 2025 | ||||
(In thousands) | Reportable Segments | Corporate | Eliminations | Total Popular, Inc. |
Interest income | ( | |||
Interest expense | ( | |||
Net interest income (expense) | $ | $( | $ | $ |
Provision for credit losses (benefit) | ( | |||
Non-interest income | ( | |||
Personnel costs | ||||
Professional fees | ( | |||
Technology and software expenses | ||||
Processing and transactional services | ||||
Amortization of intangibles | ||||
Goodwill impairment charge | ||||
Depreciation expense | ||||
Other operating expenses[1] | ( | ( | ||
Total operating expenses | ( | |||
Income before income tax | ( | |||
Income tax expense | ||||
Net income | $ | $ | $( | $ |
Segment assets | $ | $ | $( | $ |
[1]Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes, communications
expense, business promotion expenses, deposit insurance costs and OREO expenses.
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For the nine months ended September 30, 2025 | |||
(In thousands) | BPPR | Popular U.S. | Intersegment Eliminations |
Interest income | $ | $ | $( |
Interest expense | ( | ||
Net interest income | |||
Provision for credit losses | |||
Non-interest income | |||
Personnel costs | |||
Professional fees | |||
Technology and software expenses | |||
Processing and transactional services | |||
Amortization of intangibles | |||
Goodwill impairment charge | |||
Depreciation expense | |||
Other operating expenses [1] | |||
Total operating expenses | |||
Income before income tax | |||
Income tax expense | |||
Net income | $ | $ | $ |
Segment assets | $ | $ | $( |
For the nine months ended September 30, 2025 | ||||
(In thousands) | Reportable Segments | Corporate | Eliminations | Total Popular, Inc. |
Interest income | $ | $ | $( | $ |
Interest expense | ( | |||
Net interest income (expense) | ( | |||
Provision for credit losses (benefit) | ( | |||
Non-interest income | ( | |||
Personnel costs | ||||
Professional fees | ( | |||
Technology and software expenses | ||||
Processing and transactional services | ||||
Amortization of intangibles | ||||
Goodwill impairment charge | ||||
Depreciation expense | ||||
Other operating expenses [1] | ( | ( | ||
Total operating expenses | ( | |||
Income before income tax | ||||
Income tax expense | ||||
Net income | $ | $ | $ | $ |
Segment assets | $ | $ | $( | $ |
[1]Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes, communications
expense, business promotion expenses, deposit insurance costs and OREO expenses.
Geographic Information
The following information presents selected financial information based on the geographic location where the Corporation conducts its
business. The banking operations of BPPR are primarily based in Puerto Rico, where it has the largest retail banking franchise. BPPR also
conducts banking operations in the U.S. Virgin Islands, the British Virgin Islands and New York. BPPR’s banking operations in the mainland
United States include commercial lending activities in addition to periodic loan participations with PB. During the nine months ended
September 30, 2026, BPPR did not participate in loans originated by PB (2025 - $29 million). Total assets for the BPPR segment related to
its operations in the United States amounted to $1.2 billion (December 31, 2025 - $1.4 billion), including $101 million in multifamily loans
(December 31, 2025 - $102 million), $370 million in commercial real estate loans (December 31, 2025 - $435 million), $628 million in C&I
loans (December 31, 2025 - $714 million), and $17 million in unsecured personal loans (December 31, 2025 - $41 million). During the nine
months ended September 30, 2026, the BPPR segment generated $61 million (September 30, 2025 - $76 million) in revenues from its
operations in the United States, mainly from net interest income. In the Virgin Islands, the BPPR segment offers banking products, including
loans and deposits. Total assets for the BPPR segment related to its operations in the U.S. and British Virgin Islands amounted to $1.1
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billion (December 31, 2025 -$1.0 billion). The BPPR segment generated $42 million in revenues during the nine months ended
September 30, 2026 (September 30, 2025 - $39 million) from its operations in the U.S. and British Virgin Islands.
Quarter ended | Nine months ended | |||
(In thousands) | September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 |
Revenues: [1] | ||||
Puerto Rico | $ | $ | $ | $ |
United States | ||||
Other | ||||
Total consolidated revenues | $ | $ | $ | $ |
[1]Total revenues include net interest income, service charges on deposit accounts, other service fees, mortgage banking activities, net gain (loss),including
impairment, on equity securities, net gain on trading account debt securities, adjustments to indemnity reserves on loans sold, and other operating income.
Selected Balance Sheet Information:
(In thousands) | September 30, 2026 | December 31, 2025 |
Puerto Rico | ||
Total assets | $ | $ |
Loans | ||
Deposits | ||
United States | ||
Total assets | $ | $ |
Loans | ||
Deposits | ||
Other | ||
Total assets | $ | $ |
Loans | ||
Deposits [1] |
[1]Represents deposits from BPPR operations located in the U.S. and British Virgin Islands.
Note 27 - Subsequent Events
Provision for loan losses
Subsequent to September 30, 2026, a borrower in the quick service restaurant industry with a commercial and industrial loan relationship
with BPPR substantially ceased operations and filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. The relationship had
entered nonperforming status during the second quarter of 2026 and certain reserves and charge-offs related to this relationship had
already been recorded during the third quarter of 2026. The Corporation determined that these developments provided additional evidence
about conditions that existed at September 30, 2026 and, therefore, constituted a recognized subsequent event requiring adjustment of
these interim consolidated financial statements. Accordingly, the Corporation recognized an additional provision for credit losses in
connection with that relationship in the amount of $38 million for the quarter ended September 30, 2026. The Corporation expects these
developments to also result in an additional charge-off related to the relationship in the fourth quarter of 2026.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report includes management’s discussion and analysis (“MD&A”) of the consolidated financial position and financial performance of
Popular, Inc. (the “Corporation" or “Popular"). All accompanying tables, financial statements and notes included elsewhere in this report
should be considered an integral part of this analysis.
The Corporation is a diversified, publicly owned financial holding company subject to the supervision and regulation of the Board of
Governors of the Federal Reserve System. The Corporation has operations in Puerto Rico, the United States (“U.S.") mainland and the U.S.
and British Virgin Islands. In Puerto Rico, the Corporation provides retail, mortgage, commercial banking services and auto and equipment
leasing and financing through its principal banking subsidiary, Banco Popular de Puerto Rico (“BPPR"), as well as broker-dealer and
insurance services through specialized subsidiaries. In the U.S. mainland, the Corporation provides retail and commercial banking services,
as well as equipment leasing and financing, through its New York-chartered banking subsidiary, Popular Bank (“PB" or “Popular U.S."),
which has branches located in New York, New Jersey and Florida. Note 26 to the Consolidated Financial Statements presents information
about the Corporation’s business segments.
As a financial services company, the Corporation’s earnings are significantly affected by general business and economic conditions in the
markets which we serve. Lending and deposit activities and fee income generation are influenced by the level of business spending and
investment, consumer income, spending and savings, capital market activities, competition, customer preferences, interest rate conditions
and prevailing market rates on competing products.
The Corporation operates in a highly regulated environment and may be adversely affected by changes in federal and local laws and
regulations. Also, competition with other financial institutions, as well as with non-traditional financial service providers and technology
companies that provide electronic and internet-based financial solutions and services, could adversely affect its profitability.
The Corporation continuously monitors general business and economic conditions, industry-related indicators and trends, competition,
interest rate volatility, credit quality indicators, loan and deposit demand, operational and systems efficiencies, revenue enhancements and
changes in the regulation of financial services companies.
The description of the Corporation’s business contained in Item 1 of the 2025 Annual Report on Form 10-K, while not all inclusive, discusses
additional information about the business of the Corporation. Readers should also refer to “Part I - Item 1A" of the 2025 Annual Report on
Form 10-K and “Part II - Item 1A" of this Quarterly Report on Form 10-Q for a discussion of certain risks and uncertainties to which the
Corporation is subject, many beyond the Corporation’s control that, in addition to the other information in this Quarterly Report on Form 10-
Q, readers should consider.
The Corporation’s common stock is traded on the NASDAQ Global Select Market under the symbol BPOP.
OVERVIEW
Financial highlights for the quarter ended September 30, 2026
The Corporation’s net income for the quarter ended September 30, 2026 amounted to $242 million, an increase of $31 million when
compared to net income of $211 million for the quarter ended September 30, 2025. Higher net income was mainly driven by higher net
interest income and higher non-interest income, partially offset by higher provision for credit losses and operating expenses.
Financial highlights for the quarter ended September 30, 2026 include:
•Net interest income amounted to $699 million, an increase of $52 million when compared to the quarter ended September 30,
2025 driven by higher investments in U.S. Treasury securities at higher yields, loan growth and lower cost of deposits, mainly P.R.
public deposits. Net interest income on a taxable equivalent basis for the third quarter of 2026 was $801 million, an increase of
$81 million when compared to the same quarter for 2025. Net interest margin expanded by 12 basis points to 3.63% when
compared to the same period in 2025, while a taxable equivalent basis net interest margin expanded by 26 basis points to 4.16%.
•The provision for credit losses amounted to $97 million for the quarter ended September 30, 2026, an increase of $22 million
when compared to the quarter ended September 30, 2025, primarily driven by higher specific reserves in the commercial
portfolio, partially offset by lower provision expense in the consumer and mortgage loan portfolios.
•Non-interest income amounted to $176 million, an increase of $4 million when compared to the quarter ended September 30,
2025, mainly driven by higher other service fees resulting from higher debit card activity and credit card transaction volumes and
higher asset management fees associated with growth in assets under management. In addition, mortgage banking revenues
benefited from a favorable mortgage servicing rights ("MSR") valuation adjustment and lower portfolio runoff.
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•Operating expenses amounted to $506 million for the quarter, reflecting an increase of $10 million when compared to the quarter
ended September 30, 2025. The increase was mainly driven by higher salaries resulting from annual merit increases, incentives
and profit sharing. Higher other operating expenses, net occupancy expense and an increase in technology and software
expenses are results of our continued investment in technology and higher business promotion expenses.
•Income tax expense amounted to $30 million with an effective tax rate (“ETR”) of 11.0% during the quarter ended September 30,
2026, compared to $36 million with an ETR of 14.5% for the quarter ended September 30, 2025.
•At September 30, 2026, the Corporation’s total assets amounted to $77.7 billion, compared to $75.3 billion at December 31, 2025.
The increase of $2.4 billion was primarily due to an increase in the available-for-sale (“AFS”) securities portfolio, driven by
reinvestment in U.S. Treasury securities, and higher loans held-in-portfolio partially offset by a decrease in held-to-maturity
(“HTM”) investment securities driven by maturities and principal paydowns.
•Deposits amounted to $68.7 billion at September 30, 2026, an increase of $2.5 billion from December 31, 2025, primarily driven
by growth at BPPR, mainly in P.R. public deposits and commercial deposits.
•Stockholders’ equity amounted to $6.2 billion at September 30, 2026, a decrease of $34 million when compared to December 31,
2025. The Corporation and its banking subsidiaries continue to be well capitalized. As of September 30, 2026, the Corporation’s
tangible book value per common share was $85.92, an increase of $3.27 from December 31, 2025. The Common Equity Tier 1
Capital Ratio at September 30, 2026 was 16.01%, compared to 15.72% at December 31, 2025.
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Refer to Table 1 for selected financial data for the quarters and for the nine months ended September 30, 2026 and September 30, 2025, as
well as balance sheet information as of September 30, 2026 and December 31, 2025.
Table 1 Financial Highlights
Financial Condition Highlights | ||||||
Ending balances at | Average for the nine months ended | |||||
(In thousands) | September 30, 2026 | December 31, 2025 | Variance | September 30, 2026 | September 30, 2025 | Variance |
Money market investments | $5,112,689 | $4,626,506 | $486,183 | $4,933,273 | $6,205,101 | $(1,271,828) |
Investment securities | 29,174,878 | 28,168,918 | 1,005,960 | 30,927,746 | 28,758,022 | 2,169,724 |
Loans[1] | 40,045,870 | 39,337,516 | 708,354 | 39,557,344 | 37,692,744 | 1,864,600 |
Earning assets[2] | 74,333,437 | 72,132,940 | 2,200,497 | 75,418,363 | 72,655,867 | 2,762,496 |
Total assets | 77,735,045 | 75,348,267 | 2,386,778 | 77,486,736 | 75,776,756 | 1,709,980 |
Deposits | 68,704,991 | 66,190,093 | 2,514,898 | 68,839,721 | 66,452,057 | 2,387,664 |
Borrowings | 1,325,246 | 1,448,578 | (123,332) | 1,324,522 | 1,145,836 | 178,686 |
Total liabilities | 71,520,149 | 69,099,188 | 2,420,961 | 71,126,310 | 68,584,814 | 2,541,496 |
Stockholders’ equity[3] | 6,214,896 | 6,249,079 | (34,183) | 6,360,426 | 7,191,941 | (831,515) |
Operating Highlights | Quarters ended September 30, | Nine months ended September 30, | ||||
(In thousands, except per share information) | 2026 | 2025 | Variance | 2026 | 2025 | Variance |
Net interest income | $698,930 | $646,505 | $52,425 | $2,062,529 | $1,883,651 | $178,878 |
Provision for credit losses | 96,716 | 75,125 | 21,591 | 238,475 | 188,147 | 50,328 |
Non-interest income | 175,658 | 171,195 | 4,463 | 521,829 | 491,733 | 30,096 |
Operating expenses | 505,590 | 495,287 | 10,303 | 1,457,030 | 1,459,060 | (2,030) |
Income before income tax | 272,282 | 247,288 | 24,994 | 888,853 | 728,177 | 160,676 |
Income tax expense | 29,897 | 35,971 | (6,074) | 122,580 | 128,918 | (6,338) |
Net income | $242,385 | $211,317 | $31,068 | $766,273 | $599,259 | $167,014 |
Net income applicable to common stock | $242,033 | $210,964 | $31,069 | $765,214 | $598,200 | $167,014 |
Net income per common share - basic | $3.84 | $3.15 | $0.69 | $11.97 | $8.78 | $3.19 |
Net income per common share - diluted | $3.83 | $3.14 | $0.69 | $11.96 | $8.78 | $3.18 |
Dividends declared per common share | $0.90 | $0.75 | $0.15 | $2.40 | $2.15 | $0.25 |
Quarters ended September 30, | Nine months ended September 30, | |||
Selected Statistical Information | 2026 | 2025 | 2026 | 2025 |
Common Stock Data | ||||
End market price | $155.45 | $129.10 | $155.45 | $129.10 |
Book value per common share at period end | 98.56 | 91.00 | 98.56 | 91.00 |
Profitability Ratios | ||||
Return on assets | 1.21% | 1.09% | 1.30% | 1.06% |
Return on common equity | 12.86 | 11.60 | 13.92 | 11.15 |
Net interest spread (non-taxable equivalent basis) | 3.06 | 2.87 | 3.08 | 2.81 |
Net interest spread (taxable equivalent) - Non-GAAP | 3.59 | 3.26 | 3.59 | 3.18 |
Net interest margin (non-taxable equivalent basis) | 3.63 | 3.51 | 3.65 | 3.46 |
Net interest margin (taxable equivalent) - Non-GAAP | 4.16 | 3.90 | 4.16 | 3.83 |
Capitalization Ratios | ||||
Average equity to average assets | 9.39% | 9.46% | 9.37% | 9.49% |
Common equity Tier 1 capital | 16.01 | 15.79 | 16.01 | 15.79 |
Tangible common book value per common share (Non-GAAP)[4] | 85.92 | 79.12 | 85.92 | 79.12 |
Return on average tangible common equity before adjusting for the impact of unrealized (gains) losses on AFS securities including those transferred to HTM (Non-GAAP)[4] | 17.09 | 13.83 | 18.45 | 13.47 |
Return on average tangible common equity ("ROTCE") (Non-GAAP) [2][4] | 14.39 | 13.06 | 15.61 | 12.57 |
Tier I capital | 16.06 | 15.84 | 16.06 | 15.84 |
Total capital | 17.78 | 17.58 | 17.78 | 17.58 |
Tier 1 leverage | 8.49 | 8.48 | 8.49 | 8.48 |
[1] Includes loans held-for-sale.
[2] Excludes unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities transferred from available-for-sale to held-to-maturity
[3] Stockholders' equity for September 30, 2025 excludes certain unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities
transferred from available-for-sale to held-to-maturity
[4] Refer to Table 9 for reconciliation to GAAP financial measures.
Non-GAAP Financial Measures
This Quarterly Report on Form 10-Q contains financial information prepared under accounting principles generally accepted in the United
States (“U.S. GAAP") and non-GAAP financial measures. Management uses non-GAAP financial measures when it is determined that these
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measures provide meaningful information about the underlying performance of the Corporation’s ongoing operations. Non-GAAP financial
measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by other companies.
Adjusted net income - Non-GAAP Financial Measure
In addition to analyzing the Corporation’s results on a reported basis, management monitors whether the impact of certain non-recurring or
infrequent transactions need to be excluded from the results of operations to present what is then considered to be "adjusted net income" of
the Corporation. Management believes that the "adjusted net income" provides meaningful information about the underlying performance of
the Corporation’s ongoing operations. The "adjusted net income" is a non-GAAP financial measure.
There were no non-GAAP adjustments for the quarter and nine months ended September 30, 2026.
Net interest income on a taxable equivalent basis - Non-GAAP Financial Measure
Net interest income and net interest margin, on a taxable equivalent basis, are presented with its different components in Tables 2 and 3 for
the quarter and nine months ended September 30, 2026, as compared with the same period in 2025, segregated by major categories of
interest earning assets and interest-bearing liabilities.
The main sources of tax-exempt interest income are certain loans and investments in obligations of the U.S. Government, its agencies and
sponsored entities, and certain obligations of the Commonwealth of Puerto Rico and its agencies and assets held by the Corporation’s
international banking entities. On Tables 2 and 3, the interest income has been converted to a taxable equivalent basis, using the applicable
statutory income tax rates for each period net of interest expense that the Puerto Rico tax law requires to be disallowed, based on an equal
proportion of tax-exempt assets to total assets, and by an allocation of general and administrative expenses attributed to exempt income,
reducing the benefit of the tax-exempt income. The effective yield, on a taxable equivalent basis, will vary depending on the level of these
expenses that are attributed to the available exempt income. Under Puerto Rico tax law, the exempt interest can be deducted up to the
amount of taxable income. Management believes that this presentation provides meaningful information since it facilitates the comparison of
revenues arising from taxable and exempt sources.
Tangible Common Equity and Tangible Assets
Tangible common equity, tangible common equity ratio, tangible assets and tangible book value per common share are non-GAAP financial
measures. Tangible common equity ratio and tangible book value per common share should be used in conjunction with more traditional
bank capital ratios commonly used by banks and analysts to compare the capital adequacy of banking organizations with significant
amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method for mergers and
acquisitions. Return on average tangible common equity is also a measure commonly used by banks and analysts to measure the return
on that tangible common equity. The Corporation presents return on average tangible common equity with and without the impact of
unrealized (gains) losses on AFS securities including those transferred to HTM in the denominator because we believe that adding back the
impact of unrealized (gains) losses on AFS securities including those transferred to HTM to the denominator provides meaningful
information about the Corporation’s return on capital. Unless otherwise indicated, references to “ROTCE” in this Quarterly Report on Form
10-Q means return on average tangible common equity as adjusted to add back unrealized (gains) losses on AFS securities, including
those transferred to HTM. Tangible common equity, tangible assets and other related measures should not be used in isolation or as a
substitute for stockholders' equity, total assets or any other measure calculated in accordance with GAAP. Moreover, the way the
Corporation calculates its tangible common equity, tangible assets and other related measures may differ from that of other companies
reporting measures with similar names.
Table 9 provides a reconciliation of total stockholders’ equity to tangible common equity and total assets to tangible assets as of
September 30, 2026 and December 31, 2025.
CRITICAL ACCOUNTING POLICIES / ESTIMATES
The accounting and reporting policies followed by the Corporation and its subsidiaries conform to U.S. GAAP and general practices within
the financial services industry. Various elements of the Corporation’s accounting policies, by their nature, are inherently subject to estimation
techniques, valuation assumptions and other subjective assessments.
Management has discussed the development and selection of the critical accounting estimates with the Corporation’s Audit Committee. The
Corporation has identified as critical accounting estimates those related to: (i) Fair Value Measurement of Financial Instruments; (ii) Loans
and Allowance for Credit Losses; (iii) Income Taxes; (iv) Goodwill and Other Intangible Assets; and (v) Pension and Postretirement Benefit
Obligations. For a summary of these critical accounting estimates, refer to the MD&A included in the 2025 Annual Report on Form 10-K.
Also, refer to Note 2 to the Consolidated Financial Statements included in the 2025 Annual Report on Form 10-K for a summary of the
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Corporation’s significant accounting policies including those considered critical accounting estimates and to Note 3 to the Consolidated
Financial Statements included in this Quarterly Report on Form 10-Q for information on recently adopted accounting standard updates.
STATEMENT OF OPERATIONS ANALYSIS
NET INTEREST INCOME
Net interest income (“NII”) for the quarter ended September 30, 2026 was $699 million, an increase of $52 million, when compared to the
same quarter in 2025. NII growth was attributable to higher income from investments in U.S. Treasury Securities, loan growth and lower
cost of deposits by $14 million, primarily due to P.R. public deposits. Net interest income on a taxable equivalent basis for the third quarter of
2026 was $801 million, an increase of $81 million when compared to the same period in 2025.
Net interest margin (“NIM”) for the quarter was 3.63%, an increase of 12 basis points when compared to the third quarter of 2025. On a
taxable equivalent basis, NIM for the third quarter of 2026 was 4.16%, higher by 26 basis points compared to the third quarter of 2025,
mainly due to higher level of tax-exempt securities and loans. NIM expansion, when compared to the same quarter of the previous year,
was primarily due to higher yields on U.S. Treasury securities and lower deposit costs resulting from the repricing of market-linked P.R.
public deposits and the repricing of interest-bearing deposits in Popular U.S. Total cost of deposits decreased 15 basis points to 1.64%
compared to the third quarter of 2025. Excluding P.R. public deposits, total deposit costs decreased four basis points to 1.13% compared to
the same quarter in 2025.
On a taxable equivalent basis, the main drivers of the increase in NII for the third quarter of 2026 compared to the same quarter in 2025
were:
•higher income from investment securities by $57 million or 40 basis points mainly due to higher average balances of U.S.
Treasury securities, at higher yields, resulting from higher deposit balances and the reinvesting of maturities in higher-yielding
investment securities;
•higher income from loans by $33 million, mostly due to higher average loan portfolio balances by $1.4 billion mainly driven by the
commercial, mortgage and personal loan portfolio along with higher loan yields, which increased by seven basis points to 7.56%;
and
•lower interest expense on deposits by $14 million or 15 basis points. The cost of interest-bearing deposits decreased by 21 basis
points, driven by repricing of market-linked P.R. public deposits, which decreased by 47 basis points to 2.72% as their lagged
repricing continued to reflect lower short-term market rates prevailing earlier in the year, coupled with lower deposit costs in
Popular U.S.;
partially offset by:
•lower income from money market investments by $21 million or 68 basis points, as a result of lower average balances, driven by
higher re-investment activity in U.S. Treasury securities and loan growth, coupled with lower yields resulting from short-term
market rates which declined in late 2025.
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Table 2 - Analysis of Levels & Yields on a Taxable Equivalent Basis (Non-GAAP)
Quarter ended September 30,
Average Volume | Average Yields / Costs | Interest | Variance Attributable to | ||||||||||||||||||
2026 | 2025 | Variance | 2026 | 2025 | Variance | 2026 | 2025 | Variance | Rate | Volume | |||||||||||
(In millions) | (In thousands) | ||||||||||||||||||||
$4,854 | $5,990 | $(1,136) | 3.75% | 4.43% | (0.68)% | Money market investments | $45,868 | $66,867 | $(20,999) | $(9,397) | $(11,602) | ||||||||||
31,761 | 28,957 | 2,804 | 3.82 | 3.42 | 0.40 | Investment securities [1] | 305,684 | 249,071 | 56,613 | 22,433 | 34,180 | ||||||||||
35 | 28 | 7 | 5.43 | 5.43 | — | Trading securities | 478 | 391 | 87 | - | 87 | ||||||||||
36,650 | 34,975 | 1,675 | 3.81 | 3.59 | 0.22 | Total money market, investment and trading securities | 352,030 | 316,329 | 35,701 | 13,036 | 22,665 | ||||||||||
Loans: | |||||||||||||||||||||
20,154 | 19,229 | 925 | 6.82 | 6.72 | 0.10 | Commercial | 346,506 | 325,869 | 20,637 | 4,788 | 15,849 | ||||||||||
1,680 | 1,549 | 131 | 7.80 | 8.24 | (0.44) | Construction | 33,029 | 32,184 | 845 | (1,793) | 2,638 | ||||||||||
1,949 | 1,981 | (32) | 7.41 | 7.26 | 0.15 | Leasing | 36,113 | 35,957 | 156 | 751 | (595) | ||||||||||
8,809 | 8,484 | 325 | 6.17 | 5.96 | 0.21 | Mortgage | 135,933 | 126,352 | 9,581 | 4,643 | 4,938 | ||||||||||
3,382 | 3,257 | 125 | 13.54 | 13.80 | (0.26) | Consumer | 115,388 | 113,280 | 2,108 | (1,965) | 4,073 | ||||||||||
3,846 | 3,945 | (99) | 9.31 | 9.15 | 0.16 | Auto | 90,287 | 91,006 | (719) | 1,581 | (2,300) | ||||||||||
39,820 | 38,445 | 1,375 | 7.56 | 7.49 | 0.07 | Total loans | 757,256 | 724,648 | 32,608 | 8,005 | 24,603 | ||||||||||
$76,470 | $73,420 | $3,050 | 5.76% | 5.63% | 0.13% | Total earning assets | $1,109,286 | $1,040,977 | $68,309 | $21,041 | $47,268 | ||||||||||
Interest bearing deposits: | |||||||||||||||||||||
$8,790 | $8,184 | $606 | 1.68% | 1.77% | (0.09)% | NOW and money market | $37,141 | $36,421 | $720 | $(2,252) | $2,972 | ||||||||||
14,537 | 14,529 | 8 | 0.79 | 0.81 | (0.02) | Savings | 28,909 | 29,772 | (863) | (100) | (763) | ||||||||||
8,959 | 8,825 | 134 | 3.01 | 3.16 | (0.15) | Time deposits | 67,988 | 70,196 | (2,208) | (2,947) | 739 | ||||||||||
22,623 | 20,766 | 1,857 | 2.72 | 3.19 | (0.47) | P.R. public deposits | 155,147 | 167,043 | (11,896) | (25,359) | 13,463 | ||||||||||
54,909 | 52,304 | 2,605 | 2.09 | 2.30 | (0.21) | Total interest bearing deposits | 289,185 | 303,432 | (14,247) | (30,658) | 16,411 | ||||||||||
14,906 | 14,846 | 60 | Non-interest bearing demand deposits | ||||||||||||||||||
69,815 | 67,150 | 2,665 | 1.64 | 1.79 | (0.15) | Total deposits | 289,185 | 303,432 | (14,247) | (30,658) | 16,411 | ||||||||||
693 | 405 | 288 | 3.94 | 4.52 | (0.58) | Short-term borrowings | 6,881 | 4,616 | 2,265 | (653) | 2,918 | ||||||||||
718 | 812 | (94) | 6.51 | 5.98 | 0.53 | Other medium and long- term debt | 11,777 | 12,096 | (319) | 1,194 | (1,513) | ||||||||||
56,320 | 53,521 | 2,799 | 2.17 | 2.37 | (0.20) | Total interest bearing liabilities (excluding demand deposits) | 307,843 | 320,144 | (12,301) | (30,117) | 17,816 | ||||||||||
5,244 | 5,053 | 191 | Other sources of funds | ||||||||||||||||||
$76,470 | $73,420 | $3,050 | 1.60% | 1.73% | (0.13)% | Total source of funds | $307,843 | $320,144 | $(12,301) | $(30,117) | $17,816 | ||||||||||
4.16% | 3.90% | 0.26% | Net interest margin/ income on a taxable equivalent basis (Non- GAAP) | $801,443 | $720,833 | $80,610 | $51,158 | $29,452 | |||||||||||||
3.59% | 3.26% | 0.33% | Net interest spread | ||||||||||||||||||
Taxable equivalent adjustment | 102,513 | 74,328 | 28,185 | ||||||||||||||||||
3.63% | 3.51% | 0.12% | Net interest margin/ income non-taxable equivalent basis (GAAP) | $698,930 | $646,505 | $52,425 | |||||||||||||||
Note: The changes that are not due solely to volume or rate are allocated to volume and rate based on the proportion of the change in each category.
[1] Average balances exclude unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities transferred
from available-for-sale to held-to-maturity.
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NII for the nine months ended September 30, 2026 was $2.1 billion, an increase of $179 million when compared to the same period in 2025.
The NII increase was attributable to higher income from U.S. Treasury securities and loan growth, and lower cost on deposits by $76 million,
mainly due to lower cost of P.R. public deposits by 58 basis points and repricing of deposits in PB when compared to the same period in
2025. NII on a taxable equivalent basis (“FTE”) of $2.3 billion, increased $266 million when compared with the same period of 2025.
NIM increased 19 basis points to 3.65%. NIM FTE was 4.16%, an increase of 33 basis points when compared to the same period in 2025.
NIM expansion was mainly driven by investment securities yields which increased by 20 basis points, due to purchases and re-investments
of maturities into higher yielding U.S. Treasury securities, and lower deposit costs resulting mainly from the repricing of P.R. public market-
linked deposits. Total cost of deposits decreased 21 basis points to 1.59% compared to the same period in 2025. Excluding P.R. public
deposits, total deposit costs decreased five basis points to 1.11% compared to the same period in 2025.
On a taxable equivalent basis, the main drivers for the variance on NII for the nine months ended on September 30, 2026 compared to the
nine months ended September 30, 2025 were:
•higher income from loans by $120 million, or five basis points, driven by loan growth across most portfolios, along with higher loan
yields driven by the mortgage, auto and commercial portfolios;
•higher income from U.S. Treasury securities by $156 million, or 44 basis points, driven by higher average balances from
purchases and reinvestments, mainly in higher yielding U.S. Treasury notes; and
•lower interest expense on deposits by $76 million or 21 basis points. The cost of interest-bearing deposits declined by 28 basis
points, driven by a 58 basis points decrease in market-linked P.R. public deposits to 2.66%, coupled with lower deposit costs in
Popular U.S. attributable to repricing of online savings and time deposits;
partially offset by:
•lower income from money market investments by $69 million or 73 basis points, reflecting lower average balances and lower
yields attributable to the decline in short-term market rates in late 2025.
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Table 3 - Analysis of Levels & Yields on a Taxable Equivalent Basis (Non-GAAP)
Nine month period ended September 30,
Average Volume | Average Yields / Costs | Interest | Variance Attributable to | ||||||||||||||||||
2026 | 2025 | Variance | 2026 | 2025 | Variance | 2026 | 2025 | Variance | Rate | Volume | |||||||||||
(In millions) | (In thousands) | ||||||||||||||||||||
$4,933 | $6,205 | $(1,272) | 3.72% | 4.45% | (0.73)% | Money market investments | $137,129 | $206,565 | $(69,436) | $(30,967) | $(38,469) | ||||||||||
30,894 | 28,729 | 2,165 | 3.68 | 3.28 | 0.40 | Investment securities [1] | 850,696 | 705,879 | 144,817 | 87,021 | 57,796 | ||||||||||
33 | 29 | 4 | 5.58 | 5.74 | (0.16) | Trading securities | 1,394 | 1,237 | 157 | (37) | 194 | ||||||||||
35,860 | 34,963 | 897 | 3.69 | 3.49 | 0.20 | Total money market, investment and trading securities | 989,219 | 913,681 | 75,538 | 56,017 | 19,521 | ||||||||||
Loans: | |||||||||||||||||||||
19,938 | 18,802 | 1,136 | 6.76 | 6.72 | 0.04 | Commercial | 1,007,387 | 945,330 | 62,057 | 4,679 | 57,378 | ||||||||||
1,714 | 1,440 | 274 | 7.94 | 8.19 | (0.25) | Construction | 101,825 | 88,179 | 13,646 | (2,676) | 16,322 | ||||||||||
1,968 | 1,961 | 7 | 7.40 | 7.18 | 0.22 | Leasing | 109,252 | 105,650 | 3,602 | 3,239 | 363 | ||||||||||
8,736 | 8,331 | 405 | 6.13 | 5.89 | 0.24 | Mortgage | 401,848 | 368,141 | 33,707 | 15,440 | 18,267 | ||||||||||
3,334 | 3,224 | 110 | 13.71 | 14.10 | (0.39) | Consumer | 341,874 | 339,880 | 1,994 | (9,009) | 11,003 | ||||||||||
3,868 | 3,935 | (67) | 9.32 | 9.00 | 0.32 | Auto | 269,685 | 264,905 | 4,780 | 9,292 | (4,512) | ||||||||||
39,558 | 37,693 | 1,865 | 7.54 | 7.49 | 0.05 | Total loans | 2,231,871 | 2,112,085 | 119,786 | 20,965 | 98,821 | ||||||||||
$75,418 | $72,656 | $2,762 | 5.71% | 5.57% | 0.14% | Total earning assets | $3,221,090 | $3,025,766 | $195,324 | $76,982 | $118,342 | ||||||||||
Interest bearing deposits: | |||||||||||||||||||||
$8,722 | $8,077 | $645 | 1.66% | 1.73% | (0.07)% | NOW and money market | $108,537 | $104,711 | $3,826 | $(8,150) | $11,976 | ||||||||||
14,662 | 14,547 | 115 | 0.78 | 0.84 | (0.06) | Savings | 85,262 | 91,430 | (6,168) | (3,378) | (2,790) | ||||||||||
8,861 | 8,587 | 274 | 2.98 | 3.17 | (0.19) | Time deposits | 197,643 | 203,909 | (6,266) | (12,640) | 6,374 | ||||||||||
21,504 | 20,464 | 1,040 | 2.66 | 3.24 | (0.58) | P.R. public deposits | 428,415 | 496,303 | (67,888) | (90,826) | 22,938 | ||||||||||
53,749 | 51,675 | 2,074 | 2.04 | 2.32 | (0.28) | Total interest bearing deposits | 819,857 | 896,353 | (76,496) | (114,994) | 38,498 | ||||||||||
15,091 | 14,778 | 313 | Non-interest bearing demand deposits | ||||||||||||||||||
68,840 | 66,453 | 2,387 | 1.59 | 1.80 | (0.21) | Total deposits | 819,857 | 896,353 | (76,496) | (114,994) | 38,498 | ||||||||||
610 | 333 | 277 | 3.89 | 4.55 | (0.66) | Short-term borrowings | 17,756 | 11,342 | 6,414 | (1,830) | 8,244 | ||||||||||
743 | 835 | (92) | 6.38 | 5.79 | 0.59 | Other medium and long- term debt | 35,486 | 36,173 | (687) | 3,668 | (4,355) | ||||||||||
55,102 | 52,843 | 2,259 | 2.12 | 2.39 | (0.27) | Total interest bearing liabilities (excluding demand deposits) | 873,099 | 943,868 | (70,769) | (113,156) | 42,387 | ||||||||||
5,225 | 5,035 | 190 | Other sources of funds | ||||||||||||||||||
$75,418 | $72,656 | $2,762 | 1.55% | 1.74% | (0.19)% | Total source of funds | $873,099 | $943,868 | $(70,769) | $(113,156) | $42,387 | ||||||||||
4.16% | 3.83% | 0.33% | Net interest margin/ income on a taxable equivalent basis (Non- GAAP) | $2,347,991 | $2,081,898 | $266,093 | $190,138 | $75,955 | |||||||||||||
3.59% | 3.18% | 0.41% | Net interest spread | ||||||||||||||||||
Taxable equivalent adjustment | 285,462 | 198,247 | 87,215 | ||||||||||||||||||
3.65% | 3.46% | 0.19% | Net interest margin/ income non-taxable equivalent basis (GAAP) | $2,062,529 | $1,883,651 | $178,878 | |||||||||||||||
Note: The changes that are not due solely to volume or rate are allocated to volume and rate based on the proportion of the change in each category.
[1] Average balances exclude unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities transferred
from available-for-sale to held-to-maturity.
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Provision for Credit Losses - Loans Held-in-Portfolio and Unfunded Commitments
For the quarter ended September 30, 2026, the Corporation recorded a provision for credit losses related to loans held-in-portfolio and
unfunded commitments of $97 million, an increase of $22 million when compared to the same quarter of the previous year.
As discussed in Note 8 to the Consolidated Financial Statements, the Corporation estimates the ACL by weighting the outputs of various
economic scenarios (optimistic, baseline, and pessimistic). Among the three scenarios evaluated to estimate the ACL, the baseline scenario
was assigned the highest probability, followed by the pessimistic scenario, and then the optimistic scenario with the lowest probability.
There were no changes to the probability weights assigned during the third quarter of 2026 when compared to September 30, 2025.
The major drivers of the changes in the provision for loan losses during the quarter by business segment when compared to the same
quarter in 2025, were as follows:
•In the BPPR segment, the provision for loan losses was $99 million, an increase of $27 million, mainly driven by the commercial
portfolio, partially offset by a decrease in the mortgage, consumer, and construction loan portfolios. The increase was mainly
attributable to specific reserves related to two commercial & industrial ("C&I") relationships totaling $71 million, compared to the
impact of $31 million provision for a specific reserve related to a single C&I relationship during the same quarter in 2025. This
was partially offset by lower reserve requirements in the auto and personal loan portfolios due to improved portfolio credit
composition and due to improved macroeconomic assumptions combined with higher net recoveries in the mortgage portfolio.
The decrease in the construction portfolio was primarily driven by lower reserve requirements due to changes in macroeconomic
variables.
•In the Popular U.S. segment, there was a release of $3 million for the quarter ended September 30, 2026, a positive variance of
$4 million when compared with the same quarter in the previous year, mainly driven by lower provision expense in both the
commercial and consumer loan segments by $3 million and $1 million, respectively. The decrease in reserve needs for the
consumer portfolio were driven by improvements in the credit quality of the portfolio and the decrease in reserve needs for the
commercial portfolio were mainly attributed to reductions in the Commercial Real Estate ("CRE") portfolio, following the
implementation of a new U.S. CRE model during the quarter.
For the nine months ended September 30, 2026, the provision for credit losses related to loans held-in-portfolio and unfunded commitments
amounted to $238 million, an increase of $51 million, compared to the nine months ended September 30, 2025. The provision for loan
losses was $238 million, an increase of $48 million, and the provision related to reserves for unfunded commitments was $0.5 million, an
unfavorable variance of $2 million, mainly driven in the BPPR segment with higher reserves in the commercial portfolio and U.S. segment in
the construction portfolio, compared to the nine-month period ended September 30, 2025. The major drivers of the change in the provision
for loan losses during the nine months ended September 30, 2026 by business segment when compared to the same period in 2025 were
as follows:
•In the BPPR segment, the provision for loan losses was $234 million, an increase of $66 million, driven by higher provision
expense in the commercial loan portfolio of $127 million, mainly attributed to higher specific reserves for certain C&I loans during
the second and third quarters of 2026. These specific reserves are related to certain C&I loans placed in non-performing status
during 2026 due to borrower-specific circumstances that are not believed to be indicative of broader deterioration in the
commercial portfolio. This increase was partially offset by lower provision expense in the consumer portfolio of $45 million, the
mortgage portfolio of $9 million, and the lease portfolio of $7 million, reflecting improved credit performance, lower reserve
requirements, and favorable changes in macroeconomic scenarios.
•In the Popular U.S. segment, the provision for loan losses was $3 million, a decrease of $18 million, driven by lower provision
expense in the commercial and consumer portfolios of $12 million and $4 million, respectively. The reduction in the commercial
portfolio primarily reflected higher qualitative reserves established in the third quarter of 2025 to address economic uncertainty,
while the decrease in the consumer portfolio was driven by continued improvements in credit quality.
At September 30, 2026, the total allowance for credit losses for loans held-in-portfolio amounted to $809 million, an increase of $754
thousand when compared to December 31, 2025. The ratio of the allowance for credit losses to loans held-in-portfolio was 2.02% at
September 30, 2026 compared to 2.05% at December 31, 2025. Refer to Note 8 to the Consolidated Financial Statements for additional
information on the Corporation’s methodology to estimate its ACL. Refer to the Credit Risk section of this MD&A for a detailed analysis of
net charge-offs, non-performing assets, the allowance for credit losses and selected loan losses statistics.
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Non-Interest Income
Non-interest income for the third quarter of 2026 was $176 million, an increase of $5 million when compared with the same quarter for the
previous year. The variance was primarily due to:
•higher other service fees by $9 million, driven by higher credit card fees by $3 million reflecting higher transaction activity and
higher purchase volumes due, in part, to a new commercial credit card product launched in the second quarter of 2026, higher
debit card fees by $3 million due to higher transaction activity, and an increase in asset management and other fees by $4 million
primarily driven by higher assets under management; and
•higher mortgage banking activities by $2 million, primarily due to a favorable fair value adjustment to the Mortgage Servicing
Rights ("MSR") and lower net portfolio runoff;
partially offset by;
•an impairment charge on certain equity investments of $2 million; and a $2 million unfavorable fair value adjustment of securities
held for deferred benefit plans, which have an offsetting effect on personnel costs; and
•lower services charge on deposits by $2 million driven by a new deposit product launched during the third quarter of 2026, which
offers $0 service fees to clients that meet certain criteria.
Non-interest income for the nine months ended September 30, 2026 totaled $522 million, an increase of $30 million when compared to the
same period of the previous year. The main factors that contributed to the variance were:
•higher other service fees by $30 million driven by higher credit card fees by $7 million reflecting higher transaction activity and
higher purchase volumes due, in part, to higher purchase volume driven by a new commercial credit card product launched during
the second quarter of 2026, higher debit card fees by $10 million due to growth in transaction activity and increased foreign
transaction fees, and an increase in asset management and other fees by $8 million primarily driven by higher assets under
management; and
•higher other operating income by $6 million, primarily reflecting a $11 million increase in earnings from an investment accounted
for under the equity method, partially offset by a $3 million reimbursement received on excess interest paid to the U.S. Internal
Revenue Service (“IRS”) related to late payment penalties on tax withholdings for intercompany distributions during the third
quarter of 2025, and a $1 million cash distribution from the exit of a legacy equity investment;
partially offset by;
•an impairment charge on certain equity investments by $2 million;
•$2 million in trading losses attributable to market interest rates increase; and
•lower services charge on deposits by $2 million driven by a new deposit product launched during the quarter, which offers $0
service fees to clients that meet certain criteria.
Operating Expenses
Operating expenses for the third quarter of 2026 totaled $506 million, an increase of $10 million when compared to the same quarter of
2025. The main drivers of the variance were:
•higher personnel costs by $12 million, mainly due to higher salaries by $2 million driven by annual merit increases and higher
incentives by $10 million, including $7 million related to the maximum contribution to the profit-sharing plan and $2 million related
to short-term incentives, which both are tied to the Corporation's financial performance;
•higher other operating expenses by $4 million primarily due to a claim reserve reversal of $5 million recorded in the third quarter
of 2025;
•higher net occupancy expenses by $3 million driven by a reassessment of real property tax estimate for certain properties in
Puerto Rico performed during the third quarter of 2025; and
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•higher technology and software expenses by $3 million, primarily reflecting increased software cost amortization by $6 million
driven by continued investments in technology and transformation initiatives, coupled with a $2 million software impairment. This
was partially offset by a $3 million decrease in IT professional fees and lower application and network management service
charges by $3 million;
partially offset by:
•a non-cash goodwill impairment of $13 million that was recorded in the third quarter of 2025 due to lower projected earnings in our
U.S. based equipment leasing subsidiary.
Operating expenses for the nine months ended September 30, 2026 were $1.5 billion, a decrease of $2 million when compared to the same
period of 2025. The variance was primarily due to:
•lower other operating expenses by $15 million, primarily due to lower reserves for operational losses by $5 million, lower
insurance claim reserves by $4 million, and a $6 million decrease in pension expense due to a lower discount rate used in the
actuarial analysis when compared to the same nine month period of 2025;
•non-cash goodwill impairment of $13 million recorded in the third quarter of 2025 due to lower projected earnings in our U.S.
based equipment leasing subsidiary; and
•lower professional fees by $5 million, primarily driven by lower expenses associated with corporate initiatives and regulatory
compliance activities;
partially offset by:
•higher personnel costs by $15 million, mainly due to higher salaries by $8 million driven by annual merit increases, and higher
short-term incentives by $8 million, which are tied to the Corporation's financial performance; and
•higher technology and software expenses by $15 million, primarily reflecting increased software cost amortization by $18 million
driven by continued investments in technology and transformation initiatives, higher IT professional fees $6 million, and a $2
million software impairment charge, partially offset by lower application and network management service charges by $11.1
million.
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Table 4 - Operating Expenses
Quarters ended September 30, | Nine Months Ended September 30, | |||||
(Dollars in thousands) | 2026 | 2025 | Variance | 2026 | 2025 | Variance |
Salaries | $141,357 | $139,350 | $2,007 | $410,618 | $403,052 | $7,566 |
Commissions, incentives and other bonuses | 42,709 | 35,309 | 7,400 | 117,523 | 113,846 | 3,677 |
Profit sharing | 15,097 | 13,000 | 2,097 | 23,894 | 26,000 | (2,106) |
Pension, postretirement and medical insurance | 18,446 | 18,749 | (303) | 52,115 | 51,773 | 342 |
Other personnel costs, including payroll taxes | 27,461 | $26,580 | 881 | 86,020 | 80,385 | 5,635 |
Total personnel costs | 245,070 | 232,988 | 12,082 | 690,170 | 675,056 | 15,114 |
Net occupancy expenses | 29,157 | 26,083 | 3,074 | 84,220 | 82,441 | 1,779 |
Equipment expenses | 6,324 | 5,313 | 1,011 | 17,432 | 16,404 | 1,028 |
Other taxes | 17,665 | 17,967 | (302) | 53,049 | 55,324 | (2,275) |
Professional fees | 25,587 | 25,808 | (221) | 75,624 | 80,741 | (5,117) |
Technology and software expenses | 90,068 | 87,117 | 2,951 | 270,178 | 255,481 | 14,697 |
Processing and transactional services | ||||||
Credit and debit cards | 15,498 | 14,728 | 770 | 42,940 | 40,698 | 2,242 |
Other processing and transactional services | 24,172 | 23,680 | 492 | 73,083 | 73,352 | (269) |
Total processing and transactional services | 39,670 | 38,408 | 1,262 | 116,023 | 114,050 | 1,973 |
Communications | 4,562 | 4,836 | (274) | 13,332 | 14,750 | (1,418) |
Business promotion | ||||||
Rewards and customer loyalty programs | 19,045 | 17,656 | 1,389 | 54,037 | 52,068 | 1,969 |
Other business promotion | 9,383 | 9,648 | (265) | 25,151 | 25,296 | (145) |
Total business promotion | 28,428 | 27,304 | 1,124 | 79,188 | 77,364 | 1,824 |
Deposit insurance | 9,692 | 10,873 | (1,181) | 29,586 | 30,315 | (729) |
Other real estate owned (OREO) expense (income) | (3,733) | (3,408) | (325) | (11,589) | (10,862) | (727) |
Other operating expenses | ||||||
Operational losses | 1,895 | 1,634 | 261 | 8,988 | 13,957 | (4,969) |
All other | 10,821 | 6,980 | 3,841 | 29,677 | 39,673 | (9,996) |
Total other operating expenses | 12,716 | 8,614 | 4,102 | 38,665 | 53,630 | (14,965) |
Amortization of intangibles | 384 | 384 | - | 1,152 | 1,366 | (214) |
Goodwill impairment | - | 13,000 | (13,000) | - | 13,000 | (13,000) |
Total operating expenses | $505,590 | $495,287 | $10,303 | $1,457,030 | $1,459,060 | $(2,030) |
Income Taxes
For the quarter ended September 30, 2026, the Corporation recorded income tax expense of $30 million, a decrease of $6 million when
compared to $36 million for the same period in 2025; the decrease is mostly related to the higher tax exempt income. The effective tax rate
("ETR") decreased to 11.0% from 14.5% driven by higher proportion of tax exempt income and other benefits such as tax credits purchased.
For the nine-month period ended September 30, 2026, income tax expense was $123 million, compared to $129 million reported for the
same period in 2025; the decrease of $6 million is attributed to the higher proportion of tax exempt income. The ETR for the nine-month
period ended September 30, 2026, was 13.8% compared to 17.7% in the same period for 2025. The decrease was primarily driven by
higher tax exempt income and tax benefits recognized upon the vesting of restricted stock awards.
At September 30, 2026, the Corporation had a net deferred tax asset amounting to $834 million, net of a valuation allowance of $475
million. The net deferred tax asset related to the U.S. Operations was $214 million, net of a valuation allowance of $387 million.
Refer to Note 24 to the Consolidated Financial Statements for additional information on deferred tax asset balances.
REPORTABLE SEGMENT RESULTS
The Corporation’s reportable segments for managerial reporting purposes consist of BPPR and Popular U.S. A Corporate group has also
been defined to support the reportable segments.
For a description of the Corporation’s reportable segments, including additional financial information and the underlying management
accounting process, refer to Note 26 to the Consolidated Financial Statements.
The corporate group reported net income of $3 million for the quarter ended September 30, 2026, compared with net income of $5 million
for the same quarter of the previous year. For the nine-month period ended September 30, 2026, the corporate group reported a net income
of $16 million, compared to net income of $4 million for the same period of the previous year, mainly due to higher income from equity
method investments. There were no intercompany distributions between the U.S. subsidiaries and the bank holding companies.
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Highlights of the earnings results for the reportable segments are discussed below:
Banco Popular de Puerto Rico
BPPR reportable segment’s net income amounted to $198 million for the quarter ended September 30, 2026, higher by $9 million when
compared to the same quarter of the previous year. The main drivers for a higher net income included:
•net interest income of $592 million, increased by $41 million when compared to the same quarter in the previous year. The
increase was primarily driven by higher income from money market and investment securities by $19 million or eight basis points
mainly driven by higher income from U.S. Treasury securities and by higher income from loans by $14 million driven by loan
growth in the commercial, mortgage and personal loans portfolios. Higher net income was also attributable to an $8 million, or 19
basis point, decrease on interest expense from deposits, primarily due to a 47 basis point reduction in the cost of market-linked
Puerto Rico public deposits driven by a decline in short-term market rates when compared to the same period in 2025. NIM
expanded ten basis points to 3.81%. Deposit costs, at 1.41%, were lower by 12 basis points;
•higher non-interest income by $5 million mainly due to higher service fees by $8 million driven by higher debit and credit card fees
due to higher transaction activity and higher purchase volumes, as well as an increase in mortgage banking activities by $2
million; partially offset by lower service charges on deposits accounts by $2 million driven by a new deposit product launched in
August 2026 which offers $0 service fees to clients that meet certain criteria; and
•lower income tax expense by $13 million mainly due to higher proportion of tax exempt income;
partially offset by:
•Higher provision for credit losses by $27 million for a total of $99 million for the quarter ended September 30, 2026. Refer to the
"Provision for credit losses - Loans held-in-portfolio and unfunded commitments" section in this MD&A for more discussion over
the drivers of the provision for credit losses by business segment; and
•higher operating expenses by $25 million mainly due to higher personnel costs by $12 million mostly driven by higher
compensation and higher salaries expense, higher occupancy expense by $6 million driven by a reassessment of real property
tax estimate for certain properties in Puerto Rico, as well as higher technology and software expenses by $3 million mostly due to
continued investments in technology and transformation initiatives and higher equipment and software amortization.
For the nine-month period ended September 30, 2026, the BPPR segment recorded net income of $635 million compared to net income of
$539 million for the same period of the previous year. The factors that contributed to the variance in the financial results included the
following:
•net interest income increased $139 million to $1.7 billion compared with the same period of 2025. The increase was primarily
driven by higher income from loans by $55 million driven by loan growth across most portfolios and higher income from
investment securities by $26 million mainly driven by U.S. Treasury securities, partially offset by lower income from money market
investments. The increase also reflected a $58 million, or 26 basis point, decrease in interest expense on deposits, primarily due
to a 58 basis point reduction in the cost of market-linked Puerto Rico public deposits driven by a decline in short-term market
rates. NIM expanded 17 basis points to 3.83%. Deposit costs, at 1.35%, were lower by 19 basis points;
•higher non-interest income by $23 million mainly due to higher service fees driven by higher debit and credit card fees due to
higher transaction activity and higher purchase volumes, as well as an increase in asset management fees; and
•lower income tax expense by $20 million due mainly to higher exempt income;
partially offset by:
•the provision for credit losses increased by $66 million to $234 million. Refer to section "Provision for credit losses-Loans held-in-
portfolio and unfunded commitments" in this MD&A for more discussion over the drivers of the provision for credit losses by
business segment.
•higher operating expenses by $19 million mostly due to higher personnel costs by $8 million mainly due to an increase in salaries
expenses driven by annual salary revisions and annual incentives, higher technology and software expenses by $5 million due to
continuing investments in technology and transformation initiatives, and higher occupancy expenses by $5 million;
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Popular U.S.
For the quarter ended September 30, 2026, the reportable segment of Popular U.S. reported net income of $42 million, compared with net
income of $18 million for the same quarter of the previous year. The main drivers for higher net income are the following:
•net interest income increased $11 million to $117 million. The increase was primarily driven by higher income from loans resulting
from higher average balances and yields in the commercial portfolio by 25 basis points, or $13 million. The increase was also due
to a $7 million, or 24 basis point, decrease in interest expense on deposits, primarily due to repricing across most deposit
products driven by a decline in short-term market rates when compared to the same period in 2025;
•the provision for loan losses was a release of $3 million, a positive variance of $4 million. Refer to "Provision for credit losses -
Loans held-in-portfolio and unfunded commitments" section in this MD&A for more discussion over the drivers of the provision for
credit losses by business segment; and
•lower operating expenses by $16 million, reflecting the goodwill impairment charge related to a U.S. based equipment leasing
subsidiary of $13 million recorded during the third quarter of 2025, as well as lower occupancy expenses;
partially offset by:
•higher income tax expense by $9 million due to higher income before tax.
For the nine months ended September 30, 2026, the reportable segment of Popular U.S. recorded net income of $115 million, compared
with net income of $55 million for the same period of the previous year. The factors that contributed to the variance in the financial results
included the following:
•net interest income increased $41 million to $341 million. The increase was primarily driven by higher income from loans resulting
from higher average balances and yields in the commercial portfolio by $33 million or 15 basis points. The increase also benefited
from a $24 million, or 30 basis point, decrease in deposit interest expense, primarily due to repricing across most deposit products
driven by a decline in short-term market rates; and
•the provision for loan losses was $3 million, a decrease of $18 million. Refer to the "Provision for Credit Losses - Loans Held-in-
Portfolio and Unfunded Commitments" section in this MD&A for more discussion over the drivers of the provision for credit losses
by business segment;
•lower operating expenses by $21 million, reflecting the goodwill impairment charge related to our U.S. based equipment leasing
subsidiary of $13 million recorded in 2025, as well as lower occupancy expenses and professional fees;
partially offset by:
•higher income tax expense by $22 million due to higher income before tax.
STATEMENT OF FINANCIAL CONDITION ANALYSIS
Assets
The Corporation’s total assets were $77.7 billion at September 30, 2026, compared to $75.3 billion at December 31, 2025. The variance in
total assets of $2.4 billion was driven by an increase in AFS securities and loan growth across most portfolios, partially offset by a decrease
in HTM securities. Refer to the Consolidated Statements of Financial Condition included in this report and to the following narrative for
additional information.
Money market investments and investment securities
Money market investments increased by $486 million as of September 30, 2026, when compared to December 31, 2025, mainly driven by
an increase in excess balance in the Federal Reserve Bank. AFS securities increased $2.9 billion, driven by investments in U.S. Treasury
securities of $3.5 billion, partially offset by maturities and principal paydowns, mainly in mortgage-backed securities (“MBS”) by $0.7 billion
and higher unrealized losses in AFS securities by $396 million. HTM securities decreased by $1.8 billion, mainly driven by maturities and
principal paydowns, partially offset by the amortization of $130 million of the discount related to U.S. Treasury securities previously
reclassified from AFS to HTM. Refer to Note 5 and to Note 6 to the Consolidated Financial Statements for additional information with respect
to the Corporation’s debt securities available-for-sale and held-to-maturity.
Loans
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Loans held-in-portfolio were $40.0 billion at September 30, 2026, an increase of $715 million when compared to December 31, 2025. In the
BPPR segment, loan balances increased by $586 million, mainly in the mortgage, commercial and construction portfolios. The Popular U.S.
segment also increased by $129 million, mainly due to higher commercial real estate loans, partially offset by lower construction and
mortgage loans.
At September 30, 2026, the Corporation’s loans to non-depository financial institutions (‘’NDFIs’’) amounted to $540 million, a decrease of
$5 million compared to December 31, 2025. The decrease was primarily related to lower loans to insurance companies and credit
intermediaries by $36 million and $7 million, respectively, mostly at BPPR, partially offset by $37 million increase in loans to mortgage credit
intermediaries. At September 30, 2026, the Corporation’s exposure to NDFIs consisted of approximately $233 million to insurance
companies for general corporate purposes unrelated to lending activities, $167 million related to consumer and commercial credit
intermediaries, and $141 million related to mortgage credit intermediaries. All loans to NDFIs are current in their contractual payments and
carry a ‘pass’ rating.
Refer to Table 5 for a breakdown of the Corporation’s loan portfolio. Also, refer to Note 7 in the Consolidated Financial Statements for
detailed information about the Corporation’s loan portfolio composition and loan purchases and sales.
Table 5 - Loans Ending Balances
(In thousands) | September 30, 2026 | % | December 31, 2025 | % | Variance |
Loans held-in-portfolio: | |||||
Commercial | |||||
Commercial multi-family | $2,396,981 | 6% | $2,455,790 | 6% | $(58,809) |
Commercial real estate non-owner occupied | 5,842,740 | 15% | 5,543,284 | 14% | 299,456 |
Commercial real estate owner occupied | 3,412,200 | 9% | 3,153,080 | 8% | 259,120 |
Commercial and industrial | 8,709,058 | 22% | 8,607,412 | 22% | 101,646 |
Total Commercial | 20,360,979 | 52% | 19,759,566 | 50% | 601,413 |
Construction | 1,585,873 | 4% | 1,674,899 | 4% | (89,026) |
Mortgage | 8,860,185 | 22% | 8,649,440 | 22% | 210,745 |
Leasing | 1,952,125 | 5% | 2,001,365 | 5% | (49,240) |
Consumer | |||||
Credit cards | 1,260,053 | 3% | 1,256,717 | 3% | 3,336 |
Home equity lines of credit | 88,606 | —% | 78,692 | —% | 9,914 |
Personal | 1,994,260 | 5% | 1,906,228 | 5% | 88,032 |
Auto | 3,756,459 | 9% | 3,819,812 | 10% | (63,353) |
Other | 184,116 | —% | 180,799 | —% | 3,317 |
Total Consumer | 7,283,494 | 17% | 7,242,248 | 18% | 41,246 |
Total loans held-in-portfolio | $40,042,656 | 100% | $39,327,518 | 100% | $715,138 |
Loans held-for-sale: | |||||
Commercial | $- | $- | $- | ||
Mortgage | 3,214 | 9,998 | (6,784) | ||
Total loans held-for-sale | $3,214 | $9,998 | $(6,784) | ||
Total loans | $40,045,870 | $39,337,516 | $708,354 |
Other assets
Other assets amounted to $1.8 billion at September 30, 2026, an increase of $140 million when compared to $1.7 billion at December 31,
2025. Refer to Note 10 to the Consolidated Financial Statements for a breakdown of the principal categories that comprise the caption of
“Other Assets” in the Consolidated Statements of Financial Condition at September 30, 2026 and December 31, 2025.
Liabilities
The Corporation’s total liabilities were $71.5 billion at September 30, 2026, an increase of $2.4 billion, when compared to December 31,
2025. The following is a discussion of the significant changes in liabilities.
Deposits and Borrowings
Total Deposits
The Corporation’s deposits totaled $68.7 billion as of September 30, 2026, compared to $66.2 billion as of December 31, 2025. Ending
deposit balances increased by $2.5 billion, while average quarterly balances grew by $3.5 billion, from December 31, 2025 to September
30, 2026. The average deposit balance, excluding P.R. public deposits, increased by $0.6 billion for the same period.
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At the end of the third quarter of 2026, P.R. public deposits were $21.5 billion, representing 31% of total deposits. P.R. public deposits are
expected to range between $20 billion and $22 billion through the end of 2026. However, the rate at which public deposit balances may
change is uncertain and difficult to predict. The amount and timing of any such change is likely to be impacted by, for example, the level of
federal assistance and speed at which it is distributed, the financial condition, liquidity and cash management practices of the Puerto Rico
Government and its instrumentalities, and the implementation of fiscal and debt adjustment plans approved pursuant to PROMESA or other
actions mandated by the Fiscal Oversight and Management Board for Puerto Rico (the “Oversight Board”) or by reductions in federal
funding available for Puerto Rico. P.R. public deposits costs are generally indexed to changes in short-term market rates with a one-quarter
lag, in accordance with contractual terms. As a result, these deposits’ costs have typically lagged variable asset repricing. These deposits
require that the bank pledge high credit quality securities as collateral; therefore, liquidity risks arising from deposit outflows are lower. Total
deposit costs, excluding P.R. public deposits, demonstrate the stability of BPPR's core deposits with low cost and low betas.
The volume and cost of P.R. public deposits and the proportion of high-cost deposits in the U.S. directly impact the balance and mix of
earning assets and therefore represent a key factor in the Corporation’s ability to expand its net interest margin.
Refer to Table 6 for a breakdown of the Corporation’s deposits at September 30, 2026 and December 31, 2025.
Table 6 - Deposits Ending Balances
(In thousands) | September 30, 2026 | % | December 31, 2025 | % | Variance |
Deposits excluding P.R. public deposits: | |||||
Demand deposits | $15,005,068 | 22% | $15,298,712 | 23% | $(293,644) |
Savings, NOW and money market deposits (non-brokered) | 23,037,725 | 34% | 22,655,936 | 34% | 381,789 |
Savings, NOW and money market deposits (brokered) | 75,278 | —% | 87,566 | —% | (12,288) |
Time deposits (non-brokered) | 8,227,389 | 12% | 7,861,848 | 12% | 365,541 |
Time deposits (brokered CDs) | 893,371 | 1% | 866,772 | 1% | 26,599 |
Sub-total deposits excluding P.R. public deposits | 47,238,831 | 69% | 46,770,834 | 71% | 467,997 |
P.R. public deposits: | |||||
Demand deposits [1] | 11,033,195 | 16% | 11,534,301 | 17% | (501,106) |
Savings, NOW and money market deposits (non-brokered) | 9,515,457 | 14% | 7,134,217 | 11% | 2,381,240 |
Time deposits (non-brokered) | 917,508 | 1% | 750,741 | 1% | 166,767 |
Sub-total P.R. public deposits | 21,466,160 | 31% | 19,419,259 | 29% | 2,046,901 |
Total deposits | $68,704,991 | 100% | $66,190,093 | 100% | $2,514,898 |
[1] Includes interest bearing demand deposits.
Borrowings
The Corporation’s borrowings totaled $1.3 billion at September 30, 2026 compared to $1.4 billion at December 31, 2025. Refer to Note 12 to
the Consolidated Financial Statements for detailed information on the Corporation’s borrowings. Also, refer to the Liquidity section in this
MD&A for additional information on the Corporation’s funding sources.
Stockholders’ Equity
Stockholders’ equity totaled $6.2 billion at September 30, 2026, a decrease of $34 million when compared to December 31, 2025. The
decrease was principally due to a $458 million increase in treasury stock, mainly due to common stock repurchases, higher unrealized
losses on debt securities available for sale of $330 million, and common and preferred dividends of $155 million, partially offset by net
income for the nine months ended September 30, 2026 of $766 million and $104 million of amortization of unrealized losses on securities
transferred to held-to-maturity. Refer to the Consolidated Statements of Financial Condition, Comprehensive Income and Changes in
Stockholders’ Equity for information on the composition of stockholders’ equity.
During the nine months ended September 30, 2026, Popular repurchased 3,049,008 shares of common stock for $459 million at an average
price of $150.55 per share.
The composition of the Corporation’s financing to total assets at September 30, 2026 and December 31, 2025 is included in Table 7 .
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Table 7 - Financing to Total Assets
September 30, | December 31, | % (decrease) increase | % of total assets | ||
(Dollars in millions) | 2026 | 2025 | from 2026 to 2025 | 2026 | 2025 |
Non-interest-bearing core deposits | $15,011 | $15,304 | (1.9)% | 19.3% | 20.3% |
Interest-bearing core deposits | 47,674 | 46,017 | 3.6% | 61.3% | 61.1% |
Interest-bearing other deposits | 6,020 | 4,869 | 23.6% | 7.8% | 6.4% |
Repurchase agreements | 152 | 39 | 289.7% | 0.2% | 0.1% |
Other short-term borrowings | 487 | 650 | (25.1)% | 0.6% | 0.9% |
Notes payable | 686 | 760 | (9.7)% | 0.9% | 1.0% |
Other liabilities | 1,490 | 1,460 | 2.1% | 1.9% | 1.9% |
Stockholders’ equity | 6,215 | 6,249 | (0.5)% | 8.0% | 8.3% |
CAPITAL
Regulatory Capital
The Corporation, BPPR and PB are subject to regulatory capital requirements established by the Federal Reserve Board. The risk-based
capital standards applicable to the Corporation, BPPR and PB (“Basel III capital rules") are based on the final capital framework for
strengthening international capital standards, known as Basel III, of the Basel Committee on Banking Supervision. As of September 30,
2026, the Corporation’s, BPPR’s and PB’s capital ratios continue to exceed the minimum requirements for being “well-capitalized".
The risk-based capital ratios presented in Table 8, include common equity tier 1, Tier 1 capital, total capital and leverage capital as of
September 30, 2026 and December 31, 2025.
Table 8 - Capital Adequacy Data
(Dollars in thousands) | September 30, 2026 | December 31, 2025 |
Common equity tier 1 capital: | ||
Common stockholders' equity - U.S. GAAP basis | $6,192,753 | 6,226,936 |
AOCI related adjustments due to opt-out election | 1,317,985 | 1,096,805 |
Goodwill, net of associated deferred tax liability (DTL) | (626,085) | (639,734) |
Intangible assets, net of associated DTLs | (3,924) | (5,076) |
Deferred tax assets and other deductions | (206,903) | (215,404) |
Common equity tier 1 capital | $6,673,826 | $6,463,527 |
Additional tier 1 capital: | ||
Preferred stock | 22,143 | 22,143 |
Additional tier 1 capital | $22,143 | $22,143 |
Tier 1 capital | $6,695,969 | $6,485,670 |
Tier 2 capital: | ||
Trust preferred securities subject to phase in as tier 2 | 192,674 | 192,674 |
Other inclusions (deductions), net | 524,805 | 517,723 |
Tier 2 capital | $717,479 | $710,397 |
Total risk-based capital | $7,413,448 | $7,196,067 |
Minimum total capital requirement to be well capitalized | $4,169,348 | $4,112,375 |
Excess total capital over minimum well capitalized | $3,244,100 | $3,083,692 |
Total risk-weighted assets | $41,693,477 | $41,123,753 |
Total assets for leverage ratio | $78,908,764 | $74,661,894 |
Risk-based capital ratios: | ||
Common equity tier 1 capital | 16.01% | 15.72% |
Tier 1 capital | 16.06 | 15.77 |
Total capital | 17.78 | 17.50 |
Tier 1 leverage | 8.49 | 8.69 |
Under the regulatory capital framework applicable to insured depository institutions, a depository institution is considered “well capitalized” if
it maintains a leverage ratio of at least 5%, a common equity Tier 1 ratio of at least 6.5%, a Tier 1 capital ratio of at least 8% and a total risk-
based ratio of at least 10%. At September 30, 2026, the Corporation, BPPR and PB exceeded their applicable minimum regulatory capital
requirements. In addition, BPPR and PB met the applicable regulatory capital requirements to be considered “well capitalized” under the
Basel III capital rules.
The increase in the common equity Tier I capital ratio, Tier I capital ratio, and total capital ratio, as of September 30, 2026 as compared to
December 31, 2025 was mainly due to earnings from the nine month period, partially offset by the repurchases of common stock, common
stock dividends, and higher risk weighted assets driven by the increase in loans held-in-portfolio. The decrease in the leverage ratio was
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driven by higher total assets which are impacted by zero-risk weighted assets that did not have a significant impact on the risk weighted
assets, partially offset by the nine-month period earnings.
Reconciliation to Tangible Common Equity and Tangible Assets
Table 9 provides a reconciliation of total stockholders’ equity to tangible common equity and total assets to tangible assets as of
September 30, 2026 and December 31, 2025.
Table 9 - Reconciliation of Tangible Common Equity and Tangible Assets
(In thousands, except share or per share information) | September 30, 2026 | December 31, 2025 |
Total stockholders’ equity | $6,214,896 | $6,249,079 |
Less: Preferred stock | (22,143) | (22,143) |
Less: Goodwill | (789,954) | (789,954) |
Less: Other intangibles | (3,924) | (5,076) |
Total tangible common equity | $5,398,875 | $5,431,906 |
Total assets | 77,735,045 | 75,348,267 |
Less: Goodwill | (789,954) | (789,954) |
Less: Other intangibles | (3,924) | (5,076) |
Total tangible assets | $76,941,167 | $74,553,237 |
Tangible common equity to tangible assets | 7.02% | 7.29% |
Common shares outstanding at end of period | 62,834,136 | 65,719,385 |
Tangible book value per common share | $85.92 | $82.65 |
Quarterly average | ||||
Total stockholders’ equity | $6,435,638 | $6,938,571 | [1] | |
Less: Preferred Stock | (22,143) | (22,143) | ||
Less: Goodwill | (789,954) | (789,954) | ||
Less: Other intangibles | (4,177) | (5,328) | ||
Total tangible equity before adjusting for the impact of unrealized (gains) losses on AFS securities including those transferred to HTM | $5,619,364 | $6,121,146 | ||
Return on average tangible common equity before adjusting the impact of unrealized (gains) losses on AFS securities including those transferred to HTM | 17.09% | 15.14% | ||
Add: Average unrealized (gains) losses on AFS securities | 903,931 | 56,761 | ||
Add: Average unrealized (gains) losses on AFS securities transferred to HTM | 150,274 | 259,058 | ||
Total tangible equity after add back of impact of unrealized (gains) losses on AFS securities, including those to HTM | $6,673,569 | $6,436,965 | ||
Return on average tangible common equity after add back of impact of unrealized (gains) losses on AFS securities including those transferred to HTM (''ROTCE'') | 14.39% | 14.39% | ||
[1] Average balances exclude unrealized gains or losses on debt securities available-for-sale.
RISK MANAGEMENT
Market / Interest Rate Risk
The Corporation’s assets that are mainly subject to market valuation risk are debt securities classified as available-for-sale. Refer to Note 5
and Note 6 to the Consolidated Financial Statements for further information on the debt securities available-for-sale and held-to-maturity
portfolios. Debt securities classified as available-for-sale and held-to-maturity amounted to $23.4 billion and $5.5 billion, respectively, as of
September 30, 2026. Other assets subject to market risk include mortgage servicing rights ("MSRs") with a fair value of $93 million as of
September 30, 2026.
Interest Rate Risk (“IRR")
The Corporation’s net interest income is subject to various categories of interest rate risk, including repricing, basis, yield curve and option
risks. In managing interest rate risk, management may alter the mix of floating and fixed rate assets and liabilities, change pricing
schedules, adjust maturities through sales and purchases of investment securities, and enter into derivative contracts, among other
alternatives.
Management utilizes various tools to assess IRR, including NII simulation modeling, static gap analysis, and Economic Value of Equity
(“EVE") to monitor the risk arising from the dynamic characteristics of assets and liabilities subject to IRR. The three methodologies
complement each other and are used jointly in the evaluation of the Corporation’s IRR. NII simulation modeling is prepared for a five-year
period, which in conjunction with the EVE analysis, provides management a view of long-term IRR.
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The Corporation processes NII simulations under interest rate scenarios in which the yield curve is assumed to rise and decline by the same
magnitude (parallel shifts). The rate scenarios considered in these market risk simulations include instantaneous parallel changes of -100,
-200, +100, and +200 basis points during the succeeding twelve-month period. Assumptions included in these analyses include that the
balance sheet remains flat, relative levels of market interest rates across all yield curve points and indexes, interest rate spreads, loan
prepayments and deposit elasticity. Thus, they should not be relied upon as indicative of actual results and do not contemplate actions that
management may engage in as a response to future changes in interest rates. Additionally, the Corporation is also subject to the risk
inherent in the use of different rate indexes for the repricing of assets and liabilities, as well as the risk of pricing lags due to contractual or
timing differences between the market and management response to changes in the rate environment. These forward-looking computations
are management’s best estimate based on known and available information and actual results may differ.
The following table presents the results of the simulations at September 30, 2026 and December 31, 2025, assuming a static balance sheet
and parallel changes over flat spot rates over a one-year time horizon:
Table 10 - Net Interest Income Sensitivity (One Year Projection)
September 30, 2026 | December 31, 2025 | |||
(Dollars in thousands) | Amount Change | Percent Change | Amount Change | Percent Change |
Change in interest rate | ||||
+200 basis points | 21,224 | 0.71 | (7,520) | (0.27) |
+100 basis points | 10,970 | 0.37 | (4,379) | (0.16) |
-100 basis points | (11,926) | (0.40) | 2,691 | 0.10 |
-200 basis points | (12,246) | (0.41) | 7,488 | 0.27 |
As of September 30, 2026, NII simulations showed that the Corporation’s sensitivity position had shifted to asset sensitive. The variation in
results as compared to December 31, 2025, was mainly due to an increase in U.S. Treasury Bills and excess reserves at the Federal
Reserve Bank of New York partly offset by a rise in market-linked P.R. public deposits. The profile reflects that in rising rate scenarios, the
Corporation's net interest income would increase slightly during the one-year horizon driven primarily by repricing of variable rate loans and
fixed-rate intermediate maturity assets coming within one year, offset in part by the repricing of market-linked P.R. public deposits.
The Corporation’s loan and investment portfolios are subject to prepayment risk. Prepayment risk also could have a significant impact on
the duration of mortgage-backed securities and collateralized mortgage obligations.
Trading
The Corporation engages in trading activities in the ordinary course of business at its subsidiaries, BPPR and Popular Securities. Popular
Securities’ trading activities consist primarily of market-making activities to meet expected customers’ needs related to its retail brokerage
business, and purchases and sales of U.S. Government and government sponsored securities. BPPR’s trading activities consist primarily of
holding U.S. Government sponsored mortgage-backed securities and economic hedges of the related market risk with “TBA” (to-be-
announced) market transactions. In addition, BPPR uses forward contracts or TBAs that have characteristics similar to that of the forecasted
security and its conversion timeline to hedge its securitization pipeline.
At September 30, 2026, the Corporation held trading securities with a fair value of $31 million, representing 0.04% of the Corporation’s total
assets, compared with $37 million and 0.05%, respectively, at December 31, 2025. The trading portfolio consists principally of investment
grade securities such as mortgage-backed securities of $30 million with a weighted average yield of 5.03% and U.S. Treasury securities of
$1 million with a weighted average yield of 3.95% at September 30, 2026 and $23 million with a weighted average yield of 5.20% and $13
million with a weighted average yield of 2.57%, respectively, as of December 31, 2025.
The Corporation’s trading activities are limited by internal policies. For each of the two subsidiaries, the market risk assumed under trading
activities is measured by the 5-day net value-at-risk (“VAR"), with a confidence level of 99%. The VAR measures the maximum estimated
loss that may occur over a 5-day holding period, given a 99% probability.
The Corporation’s trading portfolio had a 5-day VAR of $1 million during the last week of September 2026. VAR models include assumptions
and estimates thus actual results could differ from the outputs from these models and assumptions. Back-testing is performed on model
results to compare actual results against maximum estimated losses, in order to evaluate model and assumptions accuracy.
In the opinion of management, the size and composition of the trading portfolio does not represent a significant source of market risk for the
Corporation.
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Liquidity
Liquidity Risk Management Process
The Corporation has adopted policies and limits to monitor the Corporation’s liquidity position and that of its banking subsidiaries. Refer to
the Enterprise Risk Management section of Management’s Discussion and Analysis included in the 2025 Annual Report on Form 10-K for
information on the framework in place to monitor, review, and approve policies to measure, limit and manage funding activities and
strategies impacting liquidity risk. Additionally, contingency funding plans are used to model various stress events of different magnitudes
that affect different time horizons, to assist management in evaluating the size of the liquidity buffers needed if those events occur. However,
such models may not predict accurately how the market and customers might react to every event and are dependent on many
assumptions. The objective of effective liquidity management is to ensure that the Corporation has sufficient liquidity to meet all its financial
obligations, finance expected future growth, fund planned capital distributions and maintain a reasonable safety margin for cash needs
under both normal and stressed market conditions.
Sources of Liquidity
Deposits, including customer deposits, brokered deposits and public funds deposits, continue to be the most significant source of funds for
the Corporation, representing 88% of total assets at both September 30, 2026 and December 31, 2025. The ratio of total ending loans to
deposits was 58% at September 30, 2026 and 59% at December 31, 2025. In addition to traditional deposits, the Corporation maintains
borrowing arrangements, which amounted to $1.3 billion in outstanding balances at September 30, 2026 (December 31, 2025 - $1.4 billion).
A detailed description of the Corporation’s borrowings, including their terms, is included in Note 12 to the Consolidated Financial
Statements. Also, the Consolidated Statements of Cash Flows in the accompanying Consolidated Financial Statements provide information
on the Corporation’s cash inflows and outflows.
The following sections provide further information on the Corporation’s major funding activities and needs, as well as the risks involved in
these activities.
Banking Subsidiaries
Primary sources of funding for the Corporation’s banking subsidiaries (BPPR and PB or, collectively, “the banking subsidiaries") include
retail, commercial and public sector deposits, brokered deposits, unpledged investment securities, mortgage loan securitization and, to a
lesser extent, loan sales. In addition, the Corporation maintains borrowing facilities with the Federal Home Loan Bank of New York ("FHLB")
and at the discount window of the Federal Reserve Bank of New York (the “FRB") and has a considerable amount of collateral pledged that
can be used to raise funds under these facilities.
At September 30, 2026, the Corporation’s available liquidity decreased to $26.2 billion from $27.0 billion on December 31, 2025. During the
third quarter of 2026, the Corporation continued to have significant on-balance sheet and off-balance sheet sources of liquidity. The liquidity
sources of the Corporation at September 30, 2026 are presented below:
Table 11 - Liquidity Sources
September 30, 2026 | December 31, 2025 | |||||
(In thousands) | BPPR | Popular U.S. | Total | BPPR | Popular U.S. | Total |
Unpledged securities and unused funding sources: | ||||||
Money market (excess funds at the Federal Reserve Bank) | $4,011,375 | $1,091,510 | $5,102,885 | $3,595,806 | $1,020,478 | $4,616,284 |
Unpledged securities | 3,973,647 | 737,982 | 4,711,629 | 5,215,981 | 1,057,129 | 6,273,110 |
FHLB borrowing capacity | 3,289,591 | 1,087,521 | 4,377,112 | 3,291,672 | 692,744 | 3,984,416 |
Discount window of the Federal Reserve Bank borrowing capacity | 8,201,159 | 3,836,638 | 12,037,797 | 8,472,866 | 3,644,486 | 12,117,352 |
Total available liquidity | $19,475,772 | $6,753,651 | $26,229,423 | $20,576,325 | $6,414,837 | $26,991,162 |
Refer to Note 15 to the Consolidated Financial Statements for additional information of the Corporation’s borrowing facilities available
through its banking subsidiaries.
The principal uses of funds for the banking subsidiaries include loan originations, investment portfolio purchases, loan purchases and
repurchases, repayment of outstanding obligations (including deposits), advances on certain serviced portfolios and operational expenses.
Also, the banking subsidiaries assume liquidity risk related to collateral posting requirements for certain activities mainly in connection with
contractual commitments, recourse provisions, servicing advances, derivatives and credit card licensing agreements.
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The banking subsidiaries maintain sufficient funding capacity to address large increases in funding requirements such as deposit outflows.
The Corporation has established liquidity guidelines that require the banking subsidiaries to have sufficient liquidity to cover all short-term
borrowings and a portion of deposits.
Deposits are a key source of funding. Refer to Table 6 for a breakdown of deposits by major types. Core deposits are generated from a
large base of consumer, corporate and public sector customers. Core deposits include certificates of deposit under $250,000, all interest-
bearing transactional deposit accounts, non-interest-bearing deposits, and savings deposits. Core deposits exclude brokered deposits and
certificates of deposit over $250,000. Core deposits, excluding P.R. public funds, which are fully collateralized, have historically provided the
Corporation with a sizable source of relatively stable and low-cost funds. P.R. public funds, while linked to market interest rates, provide a
stable source of funding with an attractive earning spread. As of September 30, 2026, total Puerto Rico public sector deposits were
$21.5 billion, compared to $19.4 billion at December 31, 2025. Because public deposits are collateralized by pledged high-credit-quality
securities, the liquidity risk associated with potential outflows is limited.
Core deposits represented 91% of total deposits at $62.7 billion as of September 30, 2026, compared with 92% at $60.9 billion as of
December 31, 2025. Core deposits financed 84% of the Corporation’s earning assets at September 30, 2026, compared to 85% at
December 31, 2025.
The distribution by maturity of certificates of deposit with denominations of $250,000 and over at September 30, 2026 is presented in the
table that follows:
Table 12 - Distribution by Maturity of Certificates of Deposit of $250,000 and Over
(In thousands) | |
3 months or less | $2,450,677 |
Over 3 to 12 months | 1,216,225 |
Over 1 year to 3 years | 395,203 |
Over 3 years | 139,735 |
Total | $4,201,840 |
The Corporation had $1.0 billion in brokered deposits at September 30, 2026, which financed approximately 1% of its total assets
(December 31, 2025 - $1.0 billion and 1%, respectively).
As of September 30, 2026, the banking subsidiaries had sufficient current and projected liquidity sources to meet their anticipated cash flow
obligations, as well as special needs and off-balance sheet commitments, in the ordinary course of business and have sufficient liquidity
resources to address a stress event. Although the banking subsidiaries have historically been able to replace maturing deposits and
advances, no assurance can be given that they would be able to replace those funds in the future if the Corporation’s financial condition or
general market conditions were to deteriorate. The Corporation’s financial flexibility would be severely constrained if the banking
subsidiaries are unable to maintain access to funding or if adequate funding is not available to accommodate future financing needs at
acceptable interest rates. The banking subsidiaries also are required to deposit cash or qualifying securities to meet margin requirements on
repurchase agreements, deposit agreements and other collateralized borrowing facilities. To the extent that the value of securities previously
pledged as collateral declines because of market changes, the Corporation will be required to deposit additional cash or securities to meet
its margin or collateral requirements and would need to rely more heavily on alternative funding sources. In these scenarios, the
Corporation’s financial flexibility and ability to grow revenues may not increase proportionately to cover costs and profitability would be
adversely affected.
The Corporation considers balances in excess of $250,000 to have a higher potential liquidity risk. Table 13 presents deposit balances by
reportable segment and by category, including balances under $250,000, balances exceeding $250,000, uninsured foreign deposits, and
collateralized public funds. Collateralized public funds, as presented in Table 13, represent public deposit balances from governmental
entities in the U.S. and its territories, including Puerto Rico and the United States Virgin Islands, collateralized based on such jurisdictions’
applicable collateral requirements.
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Table 13 - Deposits
(Dollars in thousands) | September 30, 2026 | |||||
BPPR | % of Total | Popular U.S. | % of Total | Popular, Inc. (Consolidated) | % of Total | |
Deposits: | ||||||
Deposits balances under $250,000 [1] | $23,849,612 | 42% | $8,628,522 | 71% | $32,478,134 | 47% |
Transactional deposits balances over $250,000 | 8,148,297 | 14% | 2,602,834 | 21% | 10,751,131 | 16% |
Time deposits balances over $250,000 | 2,412,881 | 4% | 539,336 | 4% | 2,952,217 | 4% |
Uninsured foreign deposits | 443,108 | 1% | - | -% | 443,108 | 1% |
Collateralized public funds | 21,892,656 | 39% | 187,745 | 2% | 22,080,401 | 32% |
Intercompany deposits | 160,959 | -% | 195,778 | 2% | - | -% |
Total deposits | $56,907,513 | 100% | $12,154,215 | 100% | $68,704,991 | 100% |
[1] Includes the first $250,000 in balances of transactional and time deposit accounts with balances in excess of $250,000.
(Dollars in thousands) | December 31, 2025 | |||||
BPPR | % of Total | Popular U.S. | % of Total | Popular, Inc. (Consolidated) | % of Total | |
Deposits | ||||||
Deposits balances under $250,000 [1] | $23,873,328 | 44% | $8,283,967 | 69% | $32,157,295 | 49% |
Transactional deposits balances over $250,000 | 8,254,961 | 15% | 2,341,365 | 19% | 10,596,326 | 16% |
Time deposits balances over $250,000 | 2,182,301 | 4% | 794,183 | 7% | 2,976,484 | 4% |
Uninsured foreign deposits | 446,360 | 1% | - | -% | 446,360 | 1% |
Collateralized public funds | 19,748,934 | 36% | 264,694 | 2% | 20,013,628 | 30% |
Intercompany deposits | 235,251 | -% | 349,483 | 3% | - | -% |
Total deposits | $54,741,135 | 100% | $12,033,692 | 100% | $66,190,093 | 100% |
[1] Includes the first $250,000 in balances of transactional and time deposit accounts with balances in excess of $250,000.
Bank Holding Companies
The principal sources of funding for the bank holding companies (the "BHCs"), which are Popular, Inc. (holding company only) and Popular
North America ("PNA"), include cash on hand, investment securities, dividends received from banking and non-banking subsidiaries, asset
sales, credit facilities available from affiliate banking subsidiaries and proceeds from potential securities offerings. Dividends from banking
and non-banking subsidiaries are subject to various regulatory limits and authorization requirements imposed by banking regulators,
including the FRB and the New York Department of Financial Services ("NYDFS"), that may limit the ability of those subsidiaries to act as a
source of funding to the BHCs.
The principal uses of these funds include the repayment of debt, interest payments to holders of senior debt and junior subordinated
deferrable interest debentures (related to trust preferred securities), the payment of dividends to common stockholders, repurchases of the
Corporation’s securities and capitalizing its subsidiaries.
The outstanding balance of notes payable at the BHCs amounted to $596 million at September 30, 2026 and $595 million December 31,
2025.
The contractual maturities of the BHCs notes payable at September 30, 2026 are presented in Table 14
Table 14 - Distribution of BHC's Notes Payable by Contractual Maturity
Year | (In thousands) |
2028 | $397,688 |
Later years | 198,420 |
Total | $596,108 |
As of September 30, 2026, the BHCs had cash and money markets investments totaling $329 million and borrowing potential of
$165 million from its secured facility with BPPR. The BHCs’ liquidity position continues to be adequate with sufficient cash on hand,
investments and other sources of liquidity that are expected to be sufficient to meet all interest payments and dividend obligations for the
foreseeable future. Additionally, the Corporation’s latest quarterly common stock dividend paid on October 1, 2026 was $0.90 per common
share or approximately $57 million.
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The BHCs have in the past borrowed in the corporate debt market primarily to finance their non-banking subsidiaries and refinance debt
obligations. Recent rating actions by credit rating agencies increased the Corporation's senior debt to investment grade. Management
expects these actions to enhance access to wholesale funding and, over time, reduce funding costs, subject to market conditions. The
Corporation has a shelf registration statement filed and effective with the Securities and Exchange Commission, which permits the
Corporation to issue an unspecified amount of debt or equity securities.
Non-Banking Subsidiaries
The principal sources of funding for the non-banking subsidiaries include internally generated cash flows from operations, loan sales,
repurchase agreements, capital injections and borrowed funds from their direct parent companies or the holding companies. The principal
uses of funds for the non-banking subsidiaries include repayment of maturing debt, operational expenses and payment of dividends to the
BHCs.
Dividends
During the nine months ended September 30, 2026, the Corporation declared cash dividends totaling $2.40 per common share outstanding
($154 million in the aggregate). The dividends for the Corporation’s Series A preferred stock amounted to $1 million for the nine months
ended on September 30, 2026. During the third quarter, the Corporation's Board of Directors approved an increase in its quarterly common
stock dividend from $0.75 to $0.90 per share, commencing with the dividend paid on October 1, 2026.
During the nine months ended September 30, 2026, the BHCs received dividends and distributions amounting to $400 million from BPPR.
Dividends from BPPR constitute Popular's primary source of liquidity. In addition, during the nine months ended September 30, 2026, the
BHCs received distributions amounting to $20 million from the equity investment in Centro Financiero BHD ("BHD"), $20 million from
Popular International Bank, Inc. ("PIBI"), a wholly owned subsidiary of Popular, Inc., and $30 million from the non-banking subsidiaries.
In addition to regulatory limits previously discussed, the ability of a bank subsidiary to up-stream dividends to its BHC could be impacted by
its financial performance and capital, including tangible and regulatory capital, thus potentially limiting the amount of cash up-streamed to
the BHCs from the banking subsidiaries. This could, in turn, affect a BHC’s ability to declare dividends on its outstanding common and
preferred stock, repurchase its securities or meet its debt obligations, for example. At September 30, 2026, BPPR could declare a dividend
of up to approximately $212 million without prior approval of the Federal Reserve Board due to its retained income, declared dividend
activity and transfers to statutory reserves over the measurement period. In addition, pursuant to the FRB requirements, PB may not declare
or pay a dividend without the prior approval of the Federal Reserve Board and the NYDFS.
Other Funding Sources and Capital
In addition to cash reserves held at the FRB that totaled $5.1 billion at September 30, 2026, the debt securities portfolio provides an
additional source of liquidity, which may be realized through either securities sales, collateralized borrowings or repurchase agreements.
The Corporation’s debt securities portfolio consists primarily of liquid U.S. government debt securities, U.S. government sponsored agency
debt securities, U.S. government sponsored agency mortgage-backed securities, and U.S. government sponsored agency collateralized
mortgage obligations that can be used to raise funds in the repo markets. The availability of repurchase agreements would be subject to
having sufficient unpledged collateral available at the time the transactions are consummated, in addition to overall liquidity and risk appetite
of the various counterparties. Refer to Table 11 for details of the Corporation’s unpledged debt securities and available credit facilities with
the FHLB and the discount window of the Federal Reserve Bank. A substantial portion of these debt securities could be used to raise
financing in the U.S. money markets or from secured lending sources, subject to changes in their fair market value and customary
adjustments (haircuts).
Additional liquidity may be provided through loan maturities, prepayments and sales. The loan portfolio provides a source of collateral to
secure the available credit facilities with the FHLB and the discount window of the Federal Reserve Bank. The loan portfolio can also be
used to obtain funding in the capital markets. Mortgage loans and some types of consumer loans, have secondary markets which the
Corporation could use.
Off-Balance Sheet Arrangements and Other Commitments
In the ordinary course of business, the Corporation engages in financial transactions that are not recorded on the balance sheet or may be
recorded on the balance sheet in amounts that are different than the full contract or notional amount of the transaction. As a provider of
financial services, the Corporation routinely enters into commitments with off-balance sheet risk to meet the financial needs of its customers.
Refer to Note 16 to the Consolidated Financial Statements for information on the Corporation’s commitments to extend credit and other non-
credit commitments.
Other types of off-balance sheet arrangements that the Corporation enters in the ordinary course of business include derivatives, operating
leases and provision of guarantees, indemnifications, and representation and warranties. Refer Note 15 to the Consolidated Financial
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Statements for a detailed discussion related to the Corporation’s guarantees, indemnifications obligations, and representation and
warranties arrangements.
The Corporation monitors its cash requirements, including its contractual obligations and debt commitments.
Financial Information of Guarantor and Issuers of Registered Guaranteed Securities
The principal sources of funding for Popular, Inc. Holding Company (“PIHC”) and Popular North America, Inc. (“PNA”) have included
dividends received from their banking and non-banking subsidiaries subject to statutory provisions that limit dividends paid by the banking
subsidiary without regulatory approval, asset sales and proceeds from the issuance of debt and equity.
The Corporation (''PIHC”) is the parent holding company of Popular North America (“PNA") and operates financial services through its
subsidiaries. PNA, a wholly owned subsidiary of Popular, Inc., manages entities such as Equity One, Inc., and PB, including PB’s
subsidiaries: Popular Equipment Finance, LLC, Popular Insurance Agency, U.S.A., and E-LOAN, Inc.
PNA has issued junior subordinated debentures guaranteed by PIHC (the “obligor group"), purchased by statutory trusts established by the
Corporation using proceeds from trust preferred securities (“capital securities”) and common securities of the trusts.
PIHC guarantees the junior subordinated debentures issued by PNA. If PIHC fails to make interest payments on the debentures held by the
trust, the trust will not distribute payments on the capital securities. The guarantee ranks subordinate and junior in right of payment to all
other liabilities of PIHC and equally with all other PIHC-issued guarantees, allowing direct legal action against PIHC without involving other
entities.
Funding for PIHC and PNA includes dividends from subsidiaries, asset sales, and proceeds from debt and equity issuance. Statutory
provisions limit the dividends an insured depository institution can pay to its holding company without regulatory approval.
The summarized financial information below shows the combined financial position of the obligor group as of September 30, 2026 and
December 31, 2025, and the results of their operations for the nine-month periods ended September 30, 2026 and September 30, 2025.
Excluded are investments and equity in earnings from subsidiaries and affiliates outside the obligor group.
Intercompany balances and transactions within the obligor group have been eliminated. Material amounts due from, due to, and
transactions with subsidiaries and affiliates are shown separately. Related party transactions are also presented separately.
Table 15 - Summarized Statement of Condition
(In thousands) | September 30, 2026 | December 31, 2025 |
Assets | ||
Cash and money market investments | $328,577 | $524,882 |
Investment securities | 42,725 | 38,656 |
Accounts receivables from non-obligor subsidiaries | 21,605 | 12,798 |
Other loans (net of allowance for credit losses of $36 (2025 - $132)) | 23,203 | 24,169 |
Investment in equity method investees | 5,056 | 5,145 |
Other assets | 101,432 | 91,618 |
Total assets | $522,598 | $697,268 |
Liabilities and Stockholders' deficit | ||
Accounts payable to non-obligor subsidiaries | $5,665 | $7,669 |
Notes payable | 596,108 | 594,958 |
Other liabilities | 135,472 | 135,785 |
Stockholders' deficit | (214,647) | (41,144) |
Total liabilities and stockholders' deficit | $522,598 | $697,268 |
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Table 16 - Summarized Statement of Operations
For the period ended | ||
(In thousands) | September 30, 2026 | September 30, 2025 |
Income: | ||
Dividends from non-obligor subsidiaries | $430,000 | $371,500 |
Interest income from non-obligor subsidiaries and affiliates | 2,132 | 3,125 |
Losses from investments in equity method investees | (89) | (14) |
Other operating income | 4,002 | 8,027 |
Total income | $436,045 | $382,638 |
Expenses: | ||
Services provided by non-obligor subsidiaries and affiliates (net of reimbursement by subsidiaries for services provided by parent of $204,000 (2025 - $188,825)) | $14,888 | $13,390 |
Other expenses | 17,550 | 19,492 |
Income tax (benefit) expense | (937) | 7,075 |
Total expenses | $31,501 | $39,957 |
Net income | $404,544 | $342,681 |
In addition to the dividend income reflected in the Statement of Operations table above, during the nine months ended September 30, 2026,
the obligor group recorded $20 million of capital distributions from non-obligor subsidiary which was recorded as a reduction to the
investment (2025 - $23 million).
Risk to Liquidity
The Corporation’s liquidity may come under pressure if it experiences significant unexpected cash outflows due to deposit withdrawals,
which could arise from various factors like economic conditions, loss of depositor confidence, competition, exogenous events, regulatory
requirements or changes, a downgrade in credit rating, or other events causing counterparties to avoid exposure.
Investors should refer to Liquidity Risks section of “Part I, Item 1 A" of 2025 Annual Report on Form 10-K for an additional discussion of
liquidity risks to which the Corporation is subject.
Credit Risk
Geographic and Government Risk
The Corporation is exposed to geographic and government risk. The Corporation’s assets and revenue composition by geographical area
and by business segment reporting are presented in Note 26 to the Consolidated Financial Statements. Readers should refer to Economic
and Market Risk section and Business Risk Section of “Part I, Item 1A” of the 2025 Annual Report on Form 10-K for an additional discussion
on how the Corporation is impacted by global and local economic and market conditions, including weakness in the economy, particularly in
Puerto Rico, where a significant portion of our business is concentrated. This section also addresses how our credit risk and credit losses
can increase to the extent our loans are concentrated on borrowers engaged in the same or similar activities or in borrowers who as a group
may be uniquely or disproportionately affected by certain economic or market conditions.
Commonwealth of Puerto Rico
A significant portion of our financial activities and credit exposure is concentrated in the Commonwealth of Puerto Rico (“Puerto Rico"),
which has faced severe economic and fiscal challenges in the past and may face additional challenges in the future.
Economic Performance
Based on the latest estimates of the Puerto Rico Planning Board, real GNP in Puerto Rico is projected to have grown by 0.3% in fiscal year
2026 (July 2025-June 2026) and to grow by 0.2% in fiscal year 2027 (July 2026-June 2027). Meanwhile, the Puerto Rico Economic Activity
Index reflected a 0.1% year-over-year increase in August 2026. While this index is not a direct measure of real GNP, it serves as an
indicator of ongoing economic activity.
In 2021 and 2022, inflation rose sharply in the U.S. and Puerto Rico due to post-pandemic demand and supply chain disruptions. Inflation
began to decrease by mid-2022 as the Federal Reserve raised interest rates, largely stabilizing by September 2024, leading to a series of
rate reductions by the Federal Reserve. However, inflation has accelerated during 2026, with the annual rate of inflation in the U.S.
Consumer Price Index rising from 2.4% in January 2026 to 3.7% in September 2026. In Puerto Rico, the Consumer Price Index reflected an
increase from 2% to 3.8% in the annual rate of inflation over the same period of time.
The increase has been driven in significant part by higher energy and gasoline prices amid the recent geopolitical conflict involving Iran. The
full extent to which the ongoing conflict involving Iran may affect the global economy, energy markets, and, in turn, the Puerto Rico economy
remains uncertain. In response to inflationary pressures, the Federal Reserve raised interest rates in September 2026 for the first time since
July 2023.
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Fiscal Challenges of Puerto Rico and its Municipalities
As Puerto Rico’s economy contracted in the 2000s, public debt increased rapidly due to borrowing to cover deficits to pay debt service,
pension benefits, and other expenditures. By 2016, the government had over $120 billion in combined debt and unfunded pension liabilities,
lost access to capital markets, and faced a fiscal crisis.
In response, the U.S. Congress enacted the Puerto Rico Oversight Management and Economic Stability Act ("PROMESA") in June 2016.
PROMESA established an Oversight Board with significant control over Puerto Rico’s fiscal and economic affairs, including those of its
public corporations, instrumentalities and municipalities (collectively, “P.R. Government Entities”).
Under PROMESA, the Oversight Board will remain in place until market access is restored and balanced budgets are achieved for at least
four consecutive years. PROMESA also established two mechanisms for the restructuring of the obligations of P.R. Government Entities: (a)
Title III, an in-court process akin to that of the U.S. Bankruptcy Code and which permits adjustment of a broad range of obligations, and (b)
Title VI, a largely out-of-court process through which a supermajority of creditors can accept modifications to debt and bind holdouts.
Since 2017, Puerto Rico and several of its instrumentalities have availed themselves of these mechanisms. The Puerto Rico central
government exited Title III in March 2022, and several instrumentalities, such as the Government Development Bank and the Puerto Rico
Highways and Transportation Authority have also completed debt restructurings under Titles III or VI of PROMESA. However, the Puerto
Rico Electric Power Authority is still undergoing its debt restructuring.
Puerto Rico's economic difficulties have also impacted its municipalities. Historically, the central government provided significant municipal
subsidies. However, these have decreased pursuant to fiscal measures required by the Oversight Board. These reductions have been
partially offset in recent years by federal disaster and COVID-relief funding received by municipalities. The latest Puerto Rico fiscal plan
proposes a restructured grant system to enhance municipal services and encourage accountability through performance metrics.
Municipalities are subject to PROMESA, and the Oversight Board has required certain municipalities to submit fiscal plans and annual
budgets for review and approval. Municipalities are also required to seek Oversight Board approval to issue, guarantee or modify their debts
and to enter into significant contracts. To date no municipality has availed itself of the debt restructuring mechanisms available to them
under PROMESA.
Exposure of the Corporation
The credit quality of BPPR’s loan portfolio is closely tied to the economic conditions in Puerto Rico. Deterioration in the Puerto Rico
economy could potentially increase delinquencies and charge-offs, thereby impacting the Corporation’s financial health. The Corporation
has direct exposure to P.R. Government Entities, which are mainly concentrated in obligations from various Puerto Rico municipalities.
Additionally, the Corporation holds loans and securities insured by P.R. Government Entities, such as the Housing Finance Authority, whose
ability to honor guarantees depends on its financial condition. BPPR’s commercial, mortgage, and consumer loan portfolios are also
exposed to credit risks arising from private borrowers that are service providers to, or otherwise maintain business relationships with, the
Puerto Rico government, as well as government employees whose financial condition could be adversely affected by Puerto Rico’s fiscal
challenges. For further discussion of the Corporation’s direct and indirect exposure to the Puerto Rico government and its instrumentalities
and municipalities, please refer to Note 16 – Commitments and Contingencies to the Consolidated Financial Statements.
The Corporation also maintains significant deposits from P.R. Government Entities, with future balances subject to various uncertainties.
Further information on Puerto Rico Government deposits is included in Note 11 – Deposits to the Consolidated Financial Statements.
United States Virgin Islands
The Corporation has operations in the United States Virgin Islands (the “USVI”) and has credit exposure to USVI government entities. For
further discussion of the Corporation’s direct and indirect exposure to USVI government entities, please refer to Note 16.
Non-Performing Assets ("NPAs")
NPAs include primarily past-due loans that are no longer accruing interest, renegotiated loans, and real estate property acquired through
foreclosure. A summary, including certain credit quality metrics, is presented in Table 17.
During the third quarter of 2026, the Corporation’s overall credit quality remained stable. Consumer and mortgage portfolio performance
remained favorable, with historically low net charge-offs (despite a slight seasonal increase in the auto portfolio), historically low delinquency
levels, and net recoveries in the mortgage portfolio. Changes in commercial credit metrics during the quarter were driven by borrower-
specific developments; core commercial portfolios continue to show stable credit trends.
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Total NPAs decreased by $31 million, from $541 million at December 31, 2025 to $510 million as of September 30, 2026. Total NPLs
declined by $33 million to $466 million. BPPR NPLs decreased by $37 million, primarily driven by a $21 million decrease in consumer NPLs,
mainly reflecting improved credit performance in the auto portfolio, and a $13 million decrease in commercial NPLs. Popular U.S. NPLs
increased by $4 million, mostly driven by higher commercial NPLs by $9 million, offset in part by a decrease of $4 million in the mortgage
NPLs.
On September 30, 2026, the ratio of NPLs to total loans held-in-portfolio was 1.16%, compared to 1.27% on December 31, 2025. Other real
estate owned loans (“OREOs”) totaled $44 million, an increase of $2 million from December 31, 2025.
The Corporation’s commercial real estate (“CRE”) loan portfolio includes loans secured by multifamily, non-owner-occupied, and owner-
occupied properties. At September 30, 2026, the CRE portfolio totaled $11.7 billion, comprising $2.4 billion, $5.8 billion, and $3.4 billion,
respectively, compared with $11.2 billion at December 31, 2025, comprising $2.5 billion, $5.5 billion, and $3.2 billion, respectively.
C&I NPLs in the BPPR segment totaled $184 million as of September 30, 2026, unchanged from the same period in the previous year, as
new NPL inflows during 2026 concentrated in three relationships totaling $198 million, offset by the resolution of a $155 million relationship
in the second quarter of 2026 and a $34 million partial charge-off in the third quarter of 2026.
During the second quarter of 2026, a borrower under a commercial and industrial loan relationship in the quick service restaurant industry
with BPPR, entered nonperforming status. Reserves and charge-offs related to the relationship were recorded during the third quarter of
2026. Subsequent to September 30, 2026, the borrower filed for bankruptcy and substantially ceased operations. Because this development
provided additional evidence regarding conditions that existed at September 30, 2026, the Corporation recognized an additional provision
for credit losses of $38 million for the quarter ended September 30, 2026. The Corporation expects the development to result in an
additional charge-off related to the relationship during the fourth quarter of 2026. See Note 27—Subsequent Events to the unaudited interim
consolidated financial statements.
At September 30, 2026, BPPR’s funded exposure to borrowers in the quick service restaurant industry was $327 million, representing
approximately 5.4% of BPPR’s commercial and industrial loan portfolio, with an additional $45 million of unfunded commitments. Excluding
the relationship described above, the remaining funded exposure totaled $277 million, of which 99.6% was current and not adversely
classified as of the end of the third quarter of 2026.
The non-owner occupied CRE portfolio was $5.8 billion at September 30, 2026, split between $3.4 billion in BPPR and $2.4 billion in
Popular U.S. This portfolio is diversified across sectors: retail (32%), hotels (18%), and office space (12%) which together represent two-
thirds of total non-owner occupied CRE exposure. Specifically, office space leasing accounts for just 1.8% ($705.4 million) of the total loan
portfolio, mainly comprising mid-rise properties with an average loan size of $3.0 million, and is well diversified by tenant type.
Within CRE, the commercial multi-family portfolio is $2.4 billion (approximately 6% of total loans), concentrated in New York Metro ($1.3
billion), South Florida ($639 million) and Puerto Rico ($240 million) regions. In the New York Metro, there is no exposure to rent-controlled
buildings and rent-stabilized units make up less than 40% of total units, with most originated after 2019.
Construction loans, which are excluded from the CRE portfolio described above, represent another significant real estate-secured loan
exposure. At September 30, 2026, the Corporation’s construction loan portfolio totaled $1.6 billion, including $469 million at BPPR and $1.1
billion at Popular U.S.
CRE NPLs amounted to $70 million on September 30, 2026, compared with $76 million on December 31, 2025. The CRE NPL ratios for the
BPPR and Popular U.S. segments were 0.96% and 0.33%, respectively, on September 30, 2026, compared with 1.23% and 0.25%,
respectively, on December 31, 2025.
In addition to the NPLs included in Table 18, on September 30, 2026, there were $344 million of performing loans, mostly commercial loans,
which in management’s opinion, are currently subject to potential future classification as non-performing (December 31, 2025 - $500
million).
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Table 17 -Non-Performing Assets
(Dollars in thousands) | September 30, 2026 | December 31, 2025 | |||||||
BPPR | Popular U.S. | Popular, Inc. | As a % of loans HIP by category | BPPR | Popular U.S. | Popular, Inc. | As a % of loans HIP by category | ||
Commercial | |||||||||
Commercial multi-family | $3,222 | $7,151 | $10,373 | 0.4% | $112 | $8,636 | $8,748 | 0.4% | |
Commercial real estate non-owner occupied | 25,930 | 6,329 | 32,259 | 0.6 | 35,692 | 7,020 | 42,712 | 0.8 | |
Commercial real estate owner occupied | 18,601 | 8,865 | 27,466 | 0.8 | 24,567 | - | 24,567 | 0.8 | |
Commercial and industrial | 183,940 | 8,469 | 192,409 | 2.2 | 183,914 | 6,498 | 190,412 | 2.2 | |
Total Commercial | 231,693 | 30,814 | 262,507 | 1.3 | 244,285 | 22,154 | 266,439 | 1.3 | |
Leasing | 7,713 | - | 7,713 | 0.4 | 9,179 | - | 9,179 | 0.5 | |
Mortgage | 130,982 | 9,256 | 140,238 | 1.6 | 132,373 | 13,422 | 145,795 | 1.7 | |
Consumer | |||||||||
Home equity lines of credit | - | 2,876 | 2,876 | 3.2 | - | 2,796 | 2,796 | 3.6 | |
Personal | 16,349 | 837 | 17,186 | 0.9 | 18,863 | 1,233 | 20,096 | 1.1 | |
Auto | 32,223 | - | 32,223 | 0.9 | 52,200 | - | 52,200 | 1.4 | |
Other | 2,994 | 48 | 3,042 | 1.7 | 1,809 | 29 | 1,838 | 1.0 | |
Total Consumer | 51,566 | 3,761 | 55,327 | 0.8 | 72,872 | 4,058 | 76,930 | 1.1 | |
Total non-performing loans held-in- portfolio | 421,954 | 43,831 | 465,785 | 1.2% | 458,709 | 39,634 | 498,343 | 1.3% | |
Other real estate owned (“OREO”) | 43,835 | 464 | 44,299 | 41,929 | 504 | 42,433 | |||
Total non-performing assets | $465,789 | $44,295 | $510,084 | $500,638 | $40,138 | $540,776 | |||
Accruing loans past due 90 days or more[1] | $218,290 | $163 | $218,453 | $228,772 | $188 | $228,960 | |||
Ratios: | |||||||||
Non-performing assets to total assets | 0.60% | 0.27% | 0.66% | 0.85% | 0.25% | 0.72% | |||
Non-performing loans held-in-portfolio to loans held-in-portfolio | 1.49 | 0.37 | 1.16 | 1.66 | 0.34 | 1.27 | |||
Allowance for credit losses to loans held- in-portfolio | 2.55 | 0.76 | 2.02 | 2.60 | 0.77 | 2.05 | |||
Allowance for credit losses to non- performing loans, excluding held-for-sale | 170.56 | 203.38 | 173.64 | 156.51 | 227.42 | 162.15 | |||
[1] It is the Corporation’s policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or
more as opposed to non-performing since the principal repayment is insured. These balances include $35 million of residential mortgage loans insured by FHA
or guaranteed by the VA that are no longer accruing interest as of September 30, 2026 (December 31, 2025 - $47 million). Furthermore, the Corporation has
$23 million in reverse mortgage loans which are guaranteed by FHA, but which are currently not accruing interest. Due to the guaranteed nature of the loans, it
is the Corporation’s policy to exclude these balances from non-performing assets (December 31, 2025 - $27 million).
For the quarter ended September 30, 2026, total inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $116 million,
when compared to the inflows for the same period in 2025. Inflows of NPLs held-in-portfolio at the BPPR segment decreased $120 million
from $242 million in the third quarter of 2025 to $122 million in the third quarter of 2026. The decline reflected $188 million in inflows from
two C&I relationships in the third quarter of 2025, compared with $74 million from one relationship in the third quarter of 2026. These inflows
to commercial NPLs stemmed from issues specific to the individual borrowers and are not believed to be indicative of a broader decline in
the commercial portfolio or the industries in which the borrowers operate. During the quarter ended June 30, 2026, a non-performing
commercial loan with a carrying amount of $83.7 million was transferred from held-in-portfolio to held-for-sale. The loan was subsequently
sold during the quarter ended September 30, 2026. Inflows of NPLs held-in-portfolio at the Popular U.S. segment increased by $4 million
from the same period in 2025, primarily reflecting a $4 million increase in commercial NPL inflows.
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Table 18 to Table 23 present the Corporation’s inflows to NPLs for the quarters and nine months ended September 30, 2026 and 2025.
Table 18 - Activity in Non-Performing Loans Held-in-Portfolio (Excluding Consumer Loans)
For the quarter ended September 30, 2026 | For the nine months ended September 30, 2026 | ||||||
(Dollars in thousands) | BPPR | Popular U.S. | Popular, Inc. | BPPR | Popular U.S. | Popular, Inc. | |
Beginning balance | $309,019 | $41,542 | $350,561 | $376,658 | $35,576 | $412,234 | |
Plus: | |||||||
New non-performing loans | 121,755 | 8,728 | 130,483 | 331,975 | 34,094 | 366,069 | |
Advances on existing non-performing loans | - | 210 | 210 | 457 | 457 | ||
Less: | |||||||
Non-performing loans transferred to OREO | (1,497) | - | (1,497) | (6,894) | - | (6,894) | |
Non-performing loans charged-off | (34,765) | (589) | (35,354) | (119,882) | (2,193) | (122,075) | |
Loans returned to accrual status / loan collections | (31,837) | (9,821) | (41,658) | (135,482) | (27,864) | (163,346) | |
Loans transferred to held-for-sale | - | - | - | (83,700) | - | (83,700) | |
Ending balance NPLs | $362,675 | $40,070 | $402,745 | $362,675 | $40,070 | $402,745 | |
Table 19 -Activity in Non-Performing Loans Held-in-Portfolio (Excluding Consumer Loans)
For the quarter ended September 30, 2025 | For the nine months ended September 30, 2025 | ||||||
(Dollars in thousands) | BPPR | Popular U.S. | Popular, Inc. | BPPR | Popular U.S. | Popular, Inc. | |
Beginning balance | $189,630 | $49,763 | $239,393 | $209,543 | $53,544 | $263,087 | |
Plus: | |||||||
New non-performing loans | 241,745 | 4,786 | 246,531 | 310,973 | 21,853 | 332,826 | |
Advances on existing non-performing loans | - | 48 | 48 | - | 86 | 86 | |
Less: | |||||||
Non-performing loans transferred to OREO | (2,333) | - | (2,333) | (7,273) | (433) | (7,706) | |
Non-performing loans charged-off | (13,854) | - | (13,854) | (15,571) | (1,713) | (17,284) | |
Loans returned to accrual status / loan collections | (39,149) | (9,992) | (49,141) | (121,633) | (28,732) | (150,365) | |
Ending balance NPLs | $376,039 | $44,605 | $420,644 | $376,039 | $44,605 | $420,644 | |
Table 20 - Activity in Non-Performing Commercial Loans Held-in-Portfolio
For the quarter ended September 30, 2026 | For the nine months ended September 30, 2026 | ||||||
(Dollars in thousands) | BPPR | Popular U.S. | Popular, Inc. | BPPR | Popular U.S. | Popular, Inc. | |
Beginning balance | $179,779 | $31,309 | $211,088 | $244,285 | $22,154 | $266,439 | |
Plus: | |||||||
New non-performing loans | 91,131 | 5,924 | 97,055 | 232,230 | 25,511 | 257,741 | |
Advances on existing non-performing loans | - | 210 | 210 | - | 442 | 442 | |
Less: | |||||||
Non-performing loans transferred to OREO | - | - | - | (951) | - | (951) | |
Non-performing loans charged-off | (34,809) | (585) | (35,394) | (119,505) | (2,159) | (121,664) | |
Loans returned to accrual status / loan collections | (4,408) | (6,044) | (10,452) | (40,666) | (15,134) | (55,800) | |
Loans transferred to held-for-sale | - | - | - | (83,700) | - | (83,700) | |
Ending balance NPLs | $231,693 | $30,814 | $262,507 | $231,693 | $30,814 | $262,507 | |
Table 21 - Activity in Non-Performing Commercial Loans Held-in-Portfolio
For the quarter ended September 30, 2025 | For the nine months ended September 30, 2025 | ||||||
(Dollars in thousands) | BPPR | Popular U.S. | Popular, Inc. | BPPR | Popular U.S. | Popular, Inc. | |
Beginning balance | $42,166 | $21,711 | $63,877 | $51,101 | $23,654 | $74,755 | |
Plus: | |||||||
New non-performing loans | 211,193 | 1,775 | 212,968 | 218,742 | 12,820 | 231,562 | |
Advances on existing non-performing loans | - | 48 | 48 | - | 85 | 85 | |
Less: | |||||||
Non-performing loans transferred to OREO | - | - | - | (260) | - | (260) | |
Non-performing loans charged-off | (13,779) | - | (13,779) | (14,921) | (1,713) | (16,634) | |
Loans returned to accrual status / loan collections | (3,499) | (6,738) | (10,237) | (18,581) | (18,050) | (36,631) | |
Ending balance NPLs | $236,081 | $16,796 | $252,877 | $236,081 | $16,796 | $252,877 | |
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Table 22 - Activity in Non-Performing Mortgage Loans Held-in-Portfolio
For the quarter ended September 30, 2026 | For the nine months ended September 30, 2026 | ||||||
(Dollars in thousands) | BPPR | Popular U.S. | Popular, Inc. | BPPR | Popular U.S. | Popular, Inc. | |
Beginning balance | $129,240 | $10,233 | $139,473 | $132,373 | $13,422 | $145,795 | |
Plus: | |||||||
New non-performing loans | 30,624 | 2,804 | 33,428 | 99,745 | 8,583 | 108,328 | |
Advances on existing non-performing loans | - | - | - | - | 15 | 15 | |
Less: | |||||||
Non-performing loans transferred to OREO | (1,497) | - | (1,497) | (5,943) | - | (5,943) | |
Non-performing loans charged-off | 44 | (4) | 40 | (377) | (34) | (411) | |
Loans returned to accrual status / loan collections | (27,429) | (3,777) | (31,206) | (94,816) | (12,730) | (107,546) | |
Ending balance NPLs | $130,982 | $9,256 | $140,238 | $130,982 | $9,256 | $140,238 | |
Table 23 - Activity in Non-Performing Mortgage Loans Held-in-Portfolio
For the quarter ended September 30, 2025 | For the nine months ended September 30, 2025 | ||||||
(Dollars in thousands) | BPPR | Popular U.S. | Popular, Inc. | BPPR | Popular U.S. | Popular, Inc. | |
Beginning balance | $147,464 | $28,052 | $175,516 | $158,442 | $29,890 | $188,332 | |
Plus: | |||||||
New non-performing loans | 30,552 | 3,011 | 33,563 | 92,231 | 9,033 | 101,264 | |
Advances on existing non-performing loans | - | - | - | - | 1 | 1 | |
Less: | |||||||
Non-performing loans transferred to OREO | (2,333) | - | (2,333) | (7,013) | (433) | (7,446) | |
Non-performing loans charged-off | (75) | - | (75) | (650) | - | (650) | |
Loans returned to accrual status / loan collections | (35,650) | (3,254) | (38,904) | (103,052) | (10,682) | (113,734) | |
Ending balance NPLs | $139,958 | $27,809 | $167,767 | $139,958 | $27,809 | $167,767 | |
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Loan Delinquencies
Another key measure used to evaluate and monitor the Corporation’s asset quality is loan delinquencies. Loans delinquent 30 days or more,
as a percentage of their related portfolio category on September 30, 2026 and December 31, 2025, are presented below.
Table 24 - Loan Delinquencies
(Dollars in thousands) | September 30, 2026 | December 31, 2025 | ||||
Loans delinquent 30 days or more | Total loans | Total delinquencies as a percentage of total loans | Loans delinquent 30 days or more | Total loans | Total delinquencies as a percentage of total loans | |
Commercial | ||||||
Commercial multi-family | $24,570 | $2,396,981 | 1.03% | $24,982 | $2,455,790 | 1.02% |
Commercial real estate non-owner occupied | 67,099 | 5,842,740 | 1.15 | 47,068 | 5,543,284 | 0.85 |
Commercial real estate owner occupied | 39,644 | 3,412,200 | 1.16 | 28,008 | 3,153,080 | 0.89 |
Commercial and industrial | 221,814 | 8,709,058 | 2.55 | 215,068 | 8,607,412 | 2.50 |
Total Commercial | 353,127 | 20,360,979 | 1.73 | 315,126 | 19,759,566 | 1.59 |
Construction | 24,435 | 1,585,873 | 1.54 | 17,283 | 1,674,899 | 1.03 |
Mortgage | ||||||
Mortgage insured [1] | 413,935 | 3,545,025 | 11.68 | 429,796 | 3,166,679 | 13.57 |
Mortgage uninsured | 281,957 | 5,315,160 | 5.30 | 329,504 | 5,482,761 | 6.01 |
Total Mortgage | 695,892 | 8,860,185 | 7.85 | 759,300 | 8,649,440 | 8.78 |
Leasing | 35,781 | 1,952,125 | 1.83 | 37,567 | 2,001,365 | 1.88 |
Consumer | ||||||
Credit cards | 48,254 | 1,260,053 | 3.83 | 51,846 | 1,256,717 | 4.13 |
Home equity lines of credit | 4,657 | 88,606 | 5.26 | 4,160 | 78,692 | 5.29 |
Personal | 52,140 | 1,994,260 | 2.61 | 53,632 | 1,906,228 | 2.81 |
Auto | 164,067 | 3,756,459 | 4.37 | 186,798 | 3,819,812 | 4.89 |
Other | 4,000 | 184,116 | 2.17 | 5,929 | 180,799 | 3.28 |
Total Consumer | 273,118 | 7,283,494 | 3.75 | 302,365 | 7,242,248 | 4.18 |
Loans held-for-sale | - | 3,214 | - | - | 9,998 | — |
Total | $1,382,353 | $40,045,870 | 3.45% | $1,431,641 | $39,337,516 | 3.64% |
[1] Loans that carry certain guarantees from FHA or the VA. Refer to Note 7 to the Consolidated Financial Statements for additional information of guaranteed
loans.
Allowance for Credit Losses Loans Held-in-Portfolio
The ACL represents management’s estimate of expected credit losses through the remaining contractual life of the different loan segments,
impacted by expected prepayments. The ACL is maintained at a sufficient level to provide for estimated credit losses on collateral
dependent loans as well as loans modified for borrowers with financial difficulties separately from the remainder of the loan portfolio. The
Corporation’s management evaluates the adequacy of the ACL on a quarterly basis. In this evaluation, management considers current
conditions, macroeconomic expectations through a reasonable and supportable period, historical loss experience, portfolio composition by
loan type and risk characteristics, results of periodic credit reviews of individual loans, and regulatory requirements, amongst other factors.
The Corporation must rely on estimates and exercise judgment regarding matters where the ultimate outcome is unknown, such as
economic developments affecting specific customers, industries, or markets. Other factors that can affect management’s estimates are
recalibration of statistical models used to calculate lifetime expected losses, changes in underwriting standards, financial accounting
standards and loan impairment measurements, among others. Changes in the financial condition of individual borrowers, in economic
conditions, and in the condition of the various markets in which collateral may be sold, may also affect the required level of the allowance for
credit losses. Consequently, the business, financial condition, liquidity, capital, and results of operations of the Corporation could also be
affected. On September 30, 2026, the ACL amounted to $809 million, an increase of $754 thousand from December 31, 2025.
The ACL for BPPR increased by $2 million to $720 million as of September 30, 2026, compared to December 31, 2025, mostly driven by a
$47 million increase in reserves for commercial loans, mainly from specific reserves in the commercial and industrial loan portfolio. This
increase was offset by a $42 million decrease in reserves for consumer loans due to favorable changes in the credit composition of the auto,
credit cards and personal loans portfolios.
The Corporation’s ratio of the allowance for credit losses to loans held-in-portfolio was 2.02% on September 30, 2026, compared to 2.05%
on December 31, 2025. The ratio of the ACL to NPLs held-in-portfolio stood at 173.64%, compared to 162.1% on December 31, 2025.
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Refer to Note 8 to the Consolidated Financial Statements for additional information on the Corporation’s methodology to estimate its ACL,
including probability weights assigned. Tables 25 and 26 detail the allowance for credit losses by loan categories and the percentage it
represents of total loans held-in-portfolio and NPLs. The breakdown is made for analytical purposes, and it is not necessarily indicative of
the categories in which future loan losses may occur.
Table 25 - Allowance for Credit Losses - Loan Portfolios
September 30, 2026 | |||||
(Dollars in thousands) | Total ACL | Total loans held- in-portfolio | ACL to loans held- in-portfolio | Total non- performing loans held-in-portfolio | ACL to non- performing loans held-in-portfolio |
Commercial | |||||
Commercial multi-family | $15,811 | $2,396,981 | 0.66% | $10,373 | 152.42% |
Commercial real estate non-owner occupied | 52,648 | 5,842,740 | 0.90% | 32,259 | 163.20% |
Commercial real estate owner occupied | 57,833 | 3,412,200 | 1.69% | 27,466 | 210.56% |
Commercial and industrial | 234,802 | 8,709,058 | 2.70% | 192,409 | 122.03% |
Total Commercial | $361,094 | $20,360,979 | 1.77% | $262,507 | 137.56% |
Construction | 11,354 | 1,585,873 | 0.72% | - | - |
Mortgage | 77,648 | 8,860,185 | 0.88% | 140,238 | 55.37% |
Leasing | 16,870 | 1,952,125 | 0.86% | 7,713 | 218.72% |
Consumer | |||||
Credit cards | 84,992 | 1,260,053 | 6.75% | - | - |
Home equity lines of credit | 1,726 | 88,606 | 1.95% | 2,876 | 60.01% |
Personal | 94,601 | 1,994,260 | 4.74% | 17,186 | 550.45% |
Auto | 152,931 | 3,756,459 | 4.07% | 32,223 | 474.60% |
Other | 7,594 | 184,116 | 4.12% | 3,042 | 249.64% |
Total Consumer | $341,844 | $7,283,494 | 4.69% | $55,327 | 617.86% |
Total | $808,810 | $40,042,656 | 2.02% | $465,785 | 173.64% |
Table 26 - Allowance for Credit Losses - Loan Portfolios
December 31, 2025 | |||||
(Dollars in thousands) | Total ACL | Total loans held- in-portfolio | ACL to loans held- in-portfolio | Total non- performing loans held-in-portfolio | ACL to non- performing loans held-in-portfolio |
Commercial | |||||
Commercial multi-family | $19,345 | $2,455,790 | 0.79% | $8,748 | 221.14% |
Commercial real estate non-owner occupied | 58,717 | 5,543,284 | 1.06% | 42,712 | 137.47% |
Commercial real estate owner occupied | 48,451 | 3,153,080 | 1.54% | 24,567 | 197.22% |
Commercial and industrial | 180,934 | 8,607,412 | 2.10% | 190,412 | 95.02% |
Total Commercial | $307,447 | $19,759,566 | 1.56% | $266,439 | 115.39% |
Construction | 13,826 | 1,674,899 | 0.83% | - | - |
Mortgage | 80,554 | 8,649,440 | 0.93% | 145,795 | 55.25% |
Leasing | 18,620 | 2,001,365 | 0.93% | 9,179 | 202.85% |
Consumer | |||||
Credit cards | 91,124 | 1,256,717 | 7.25% | - | - |
Home equity lines of credit | 1,335 | 78,692 | 1.70% | 2,796 | 47.75% |
Personal | 106,612 | 1,906,228 | 5.59% | 20,096 | 530.51% |
Auto | 180,364 | 3,819,812 | 4.72% | 52,200 | 345.52% |
Other | 8,174 | 180,799 | 4.52% | 1,838 | 444.72% |
Total Consumer | $387,609 | $7,242,248 | 5.35% | $76,930 | 503.85% |
Total | $808,056 | $39,327,518 | 2.05% | $498,343 | 162.15% |
Annualized net charge-offs (recoveries)
The following table presents annualized net charge-offs (recoveries) to average loans held-in-portfolio (“HIP") by loan category for the
quarters and nine months ended September 30, 2026 and 2025.
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Table 27 - Annualized Net Charge-offs (Recoveries) to Average Loans Held-in-Portfolio
Quarters ended | ||||||
September 30, 2026 | September 30, 2025 | |||||
BPPR | Popular U.S. | Popular Inc. | BPPR | Popular U.S. | Popular Inc. | |
Commercial | 1.06% | 0.02% | 0.59% | 0.50% | 0.03% | 0.29% |
Construction | (0.07) | — | (0.02) | — | — | — |
Mortgage | (0.18) | (0.01) | (0.15) | (0.12) | (0.01) | (0.11) |
Leasing | 0.33 | — | 0.33 | 0.41 | — | 0.41 |
Consumer | 2.53 | 1.04 | 2.49 | 2.48 | 1.69 | 2.46 |
Total annualized net charge-offs (recoveries) to average loans held-in- portfolio | 1.03% | 0.03% | 0.73% | 0.84% | 0.04% | 0.60% |
Nine months ended | ||||||
September 30, 2026 | September 30, 2025 | |||||
BPPR | Popular U.S. | Popular Inc. | BPPR | Popular U.S. | Popular Inc. | |
Commercial | 2.96% | 0.05% | 1.65% | 0.14% | 0.02% | 0.08% |
Construction | (0.06) | — | (0.02) | — | — | — |
Mortgage | (0.42) | (0.02) | (0.37) | (0.14) | (0.03) | (0.12) |
Leasing | 0.92 | — | 0.92 | 0.55 | — | 0.55 |
Consumer | 5.51 | 5.38 | 5.51 | 2.53 | 3.23 | 2.54 |
Total annualized net charge-offs (recoveries) to average loans held-in-portfolio | 1.11% | 0.05% | 0.80% | 0.73% | 0.06% | 0.53% |
NCOs for the quarter ended September 30, 2026 amounted to $73 million, increasing by $15 million when compared to the same period in
2025. The BPPR segment increased by $16 million, mainly driven by an increase of the same amount in the commercial NCOs, primarily
related to the $34 million partial charge-off related to a commercial NPL that had entered non-performing status in the second quarter of
2026. The PB segment NCOs remained flat compared with the same period in 2025.
NCOs for the nine months ended September 30, 2026, amounted to $237 million, increasing by $88 million when compared to the same
period in 2025. The BPPR segment NCOs increased by $89 million, mainly driven by the $71 million charge-off related to the $155 million
commercial NPL and the $34 million partial charge-off recorded in the third quarter of 2026 discussed above.
Loan Modifications
For the quarter ended September 30, 2026, modified loans to borrowers with financial difficulty amounted to $219 million, of which $101
million were in accruing status. The BPPR segment’s modifications to borrowers with financial difficulty amounted to $206 million, mainly
comprised of commercial and mortgage loans of $177 million and $23 million, respectively. A total of $17 million of the mortgage
modifications were related to government guaranteed loans. The Popular U.S. segment’s modifications to borrowers with financial difficulty
amounted to $13 million, mostly comprised of construction loans, which represented $12.5 million.
Refer to Note 8 to the Consolidated Financial Statements for additional information on modifications made to borrowers experiencing
financial difficulties.
ADOPTION OF NEW ACCOUNTING STANDARDS AND ISSUED BUT NOT YET EFFECTIVE ACCOUNTING STANDARDS
Refer to Note 3, “New Accounting Pronouncements" to the Consolidated Financial Statements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Quantitative and qualitative disclosures for the current period can be found in the Market Risk section of this report, which includes changes
in market risk exposures from disclosures presented in the 2025 Annual Report on Form 10-K.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
The Corporation’s management, with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, has evaluated
the effectiveness of the Corporation’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report. Based on such evaluation, the
Corporation’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Corporation’s
disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required
to be disclosed by the Corporation in the reports that it files or submits under the Exchange Act and such information is accumulated and
communicated to management, as appropriate, to allow timely decisions regarding required disclosures.
Internal Control Over Financial Reporting
There have been no changes in the Corporation’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2026 that have materially affected, or are
reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
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Part II - Other Information
Item 1. Legal Proceedings
For a discussion of Legal Proceedings, see Note 16 - Commitments and Contingencies in the Consolidated Financial Statements in this
report.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the risk factors discussed under “Part I - Item 1A -
Risk Factors" in our 2025 Annual Report on Form 10-K. These factors could materially adversely affect our business, financial condition,
liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the
results contemplated by the forward-looking statements contained in this report. Also refer to the discussion in “Part I - Item 2 -
Management’s Discussion and Analysis of Financial Condition and Results of Operations" in this report for additional information that may
supplement or update the discussion of risk factors below and in our 2025 Annual Report on Form 10-K.
There have been no material changes to the risk factors previously disclosed under Item 1A of the Corporation’s 2025 Annual Report on
Form 10-K.
The risks described in our 2025 Annual Report on Form 10-K and in this report are not the only risks facing the Corporation. Additional risks
and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business,
financial condition, liquidity, results of operations and capital position.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The Corporation did not have any unregistered sales of equity securities during the quarter ended September 30, 2026.
Issuer Purchases of Equity Securities
The following table sets forth the details of purchases of common stock by the Corporation and its affiliated purchasers during the quarter
ended September 30, 2026:
Issuer Purchases of Equity Securities | ||||
Not in thousands | ||||
Period | Total Number of Shares Purchased [1] | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs [2] | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs [2] |
July 1 - July 31 | 66,976 | $171.05 | 49,261 | $991,995,343 |
August 1 - August 31 | 447,197 | 173.17 | 447,197 | 914,555,453 |
September 1 - September 30 | 574,330 | 164.28 | 563,783 | 821,976,547 |
Total | 1,088,503 | $168.35 | 1,060,241 | $821,976,547 |
[1] Includes 17,715 and 10,547 shares of the Corporation’s common stock acquired by the Corporation during July and September 2026, respectively, in
connection with the satisfaction of tax withholding obligations on vested awards of restricted stock or restricted stock units granted to directors and certain
employees under the Corporation’s Omnibus Incentive Plan. The acquired shares of common stock were added back to treasury stock.
[2] As part of its capital plan, in July 2026, the Corporation announced plans to repurchase up to $1.0 billion in common stock, in addition to the $500 million in
common stock repurchase program announced in July 2025 and $500 million in July 2024. As of September 30, 2026, and since the first authorization in 2024,
the Corporation repurchased 9,965,552 shares of common stock for $1.2 billion at an average price of $118.19 per share, as part of the 2024, 2025, and 2026
common stock repurchase programs.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans or Other Preplanned Trading Arrangements
Certain of our officers or directors have made, and may from time to time make, elections to participate in, and are participating in, our
dividend reinvestment and purchase plan, the Company stock fund associated with our 401 (k) plans and/or the Company stock fund
associated with our non-qualified deferred compensation plans and have shares withheld to cover withholding taxes upon the vesting of
equity awards, which may be designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may
constitute non-Rule 10b5-1 trading arrangements
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Item 6. Exhibits
Exhibit Index
Exhibit No | Exhibit Description |
22.1 | Issuers of Guaranteed Securities (Incorporated by reference to Exhibit 22.1 of Popular, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2025) |
31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(1) |
31.2 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(1) |
32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002(1) |
32.2 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 (1) |
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline Document. |
101.SCH | Inline XBRL Taxonomy Extension Calculation Linkbase Document(1) |
101.CAL | Inline XBRL Taxonomy Extension Definitions Linkbase Document(1) |
101.DEF | Inline XBRL Taxonomy Extension Label Linkbase Document(1) |
101.LAB | Inline XBRL Taxonomy Extension Presentation Linkbase Document(1) |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document(1) |
104 | The cover page of Popular, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in Inline XBRL (included within the Exhibit 101 attachments)(1) |
(1)Included herewith
Popular, Inc. has not filed as exhibits certain instruments defining the rights of holders of debt of Popular, Inc. not exceeding
10% of the total assets of Popular, Inc. and its consolidated subsidiaries. Popular, Inc. hereby agrees to furnish upon request
to the Commission a copy of each instrument defining the rights of holders of senior and subordinated debt of Popular, Inc.,
or of any of its consolidated subsidiaries.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
POPULAR, INC. (Registrant) | |
Date: November 9, 2026 | By: Isl Lidio V. Soriano Lidio V. Soriano Executive Vice President & Chief Financial Officer |
Date: November 9, 2026 | By: Isl Denissa M. Rodriguez Denissa M. Rodriguez Senior Vice President & Corporate Comptroller |