Popular, Inc. Q2 Results: Net Income $210.4M, Deposits Up $2.33B
Popular, Inc. reported stronger results for the quarter and first half of 2025.
Popular, Inc. reported stronger results for the quarter and first half of 2025. Quarterly net income was $210.4 million versus $177.8 million a year earlier, and six-month net income was $387.9 million versus $281.1 million. Earnings per share improved to $3.09 for the quarter and $5.64 for the six-month period, reflecting higher net interest income of $631.5 million in the quarter. Total assets rose to $76.07 billion and deposits increased to $67.22 billion, up from $64.88 billion.
Credit provisioning remained notable with a quarterly provision for credit losses of $48.9 million and a six-month provision of $113.0 million. The investment portfolio carried $1.061 billion of gross unrealized losses in available-for-sale debt securities at June 30, 2025, concentrated in mortgage-backed securities. The company repurchased about $112.0 million of common stock in the quarter and $234.3 million in the six months under a $500 million repurchase authorization, while raising the quarterly dividend to $0.70 per common share.
Positive
- Net income growth: Q2 net income of $210.4M (up from $177.8M) and six-month net income of $387.9M (up from $281.1M).
- Improved EPS: Quarterly EPS increased to $3.09 from $2.47; six-month EPS rose to $5.64 from $3.90.
- Net interest income expansion: Net interest income was $631.5M in the quarter, supporting profitability.
- Deposit and asset growth: Deposits rose to $67.22B and total assets to $76.07B, reflecting balance-sheet growth.
- Shareholder returns: Repurchased ~$112.0M of common stock in the quarter (YTD repurchases $234.3M) and increased quarterly dividend to $0.70 per share.
Negative
- Large unrealized AFS losses: Gross unrealized losses on available-for-sale debt securities totaled $1.061B at June 30, 2025, concentrated in mortgage-backed securities.
- Ongoing provisioning: Provision for credit losses was $48.9M in the quarter and $113.0M for six months, indicating credit reserve needs remain meaningful.
- Geographic concentration risk: A significant portion of the business is concentrated in Puerto Rico, and the filing states Puerto Rico public-sector deposit balances are uncertain and difficult to predict.
Insights
TL;DR: Solid earnings, wider margins, deposit growth and active buybacks boost capital return and shareholder metrics.
Popular delivered meaningful year-over-year profit growth: Q2 net income rose to $210.4M from $177.8M, and net interest income increased to $631.5M, supporting higher EPS of $3.09. Deposits grew by about $2.33B to $67.22B, and total assets reached $76.07B, reflecting balance-sheet expansion. The company returned capital via repurchases (~$112.0M in the quarter; $234.3M YTD) and raised dividends to $0.70 quarterly, signaling confidence in earnings and liquidity.
TL;DR: Earnings strength is offset by market and concentration risks: >$1.06B AFS unrealized losses and Puerto Rico deposit concentration create vulnerability.
The available-for-sale portfolio showed gross unrealized losses of $1.061B at June 30, 2025, concentrated in mortgage-backed securities, which increases sensitivity to interest-rate and prepayment risk. The filings also highlight concentration of operations and public-sector deposit exposure in Puerto Rico and note those public deposits are uncertain and hard to predict. The allowance on held-to-maturity securities was $6.0M, while provision for credit losses remains sizable ($113.0M YTD), underscoring continued credit monitoring needs.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were Popular (BPOPM) Q2 2025 net income and EPS?
Popular reported Q2 2025 net income of $210.4 million and basic/diluted EPS of $3.09.
How did Popular's deposits and assets change at June 30, 2025?
Total deposits were $67.22 billion (up from $64.88 billion) and total assets were $76.07 billion at June 30, 2025.
What unrealized losses does Popular report in its investment portfolio?
The filing shows $1.061 billion of gross unrealized losses on available-for-sale debt securities at June 30, 2025, mainly in mortgage-backed securities.
How much stock did Popular repurchase in Q2 2025 and year-to-date?
The Corporation repurchased approximately $112.0 million of common stock in the quarter and $234.3 million year-to-date under a $500 million repurchase program.
What dividend did Popular declare for common shareholders in Q2 2025?
Dividends declared per common share for Q2 2025 were $0.70 (six months ended dividend $1.40).
What was Popular's provision for credit losses for the period?
Provision for credit losses was $48.9 million for the quarter and $113.0 million for the six months ended June 30, 2025.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended
or
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of Incorporation or
(IRS Employer Identification Number)
organization)
,
(Address of principal executive offices)
(Zip code)
(
)
(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
NASDAQ Stock Market
The
NASDAQ Stock Market
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]
[ ] 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]
[ ] 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:
Large accelerated filer
Accelerated filer [ ]
Non-accelerated filer [ ]
Smaller reporting company
Emerging growth company
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
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,
2
POPULAR INC
INDEX
Part I – Financial Information
Page
Item 1. Financial Statements
Unaudited Consolidated Statements of Financial Condition at June 30, 2025
and December 31, 2024
5
Unaudited Consolidated Statements of Operations for the quarters
and six months ended June 30, 2025 and 2024
6
Unaudited Consolidated Statements of Comprehensive Income for the
quarters and six months ended June 30, 2025 and 2024
7
Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the
quarters and six months ended June 30, 2025 and 2024
8
Unaudited Consolidated Statements of Cash Flows for the six months
ended June 30, 2025 and 2024
10
Notes to Unaudited Consolidated Financial Statements
12
Item 2. Management’s Discussion and Analysis of Financial Condition and
133
Item 3. Quantitative and Qualitative Disclosures about Market Risk
178
Item 4. Controls and Procedures
178
Part II – Other Information
Item 1. Legal Proceedings
178
Item 1A. Risk Factors
178
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
179
Item 3. Defaults Upon Senior Securities
179
Item 4. Mine Safety Disclosures
179
Item 5. Other Information
179
Item 6. Exhibits
179
Signatures
181
3
Forward-Looking Statements
This 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:
●
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;
●
consumer confidence and spending habits which may affect in turn, among other things, our level of non-performing
assets, charge-offs and provision expense;
●
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 stockholders;
●
banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks;
●
Puerto Rico Government and the Federally-appointed oversight board on the economy, our customers and our
business;
●
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;
●
man-made disasters, acts of violence or war 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;
●
earnings, efficiencies and return on tangible common equity and accurately anticipate costs and expenses associated
therewith;
●
4
●
related requirements and the impact of other proposed capital standards on our capital ratios;
●
examination and enforcement priorities of the federal administration;
●
assessment implemented by the FDIC to recover the losses to the deposit insurance fund (“DIF”) resulting from the
receiverships of Silicon Valley Bank and Signature Bank;
●
as acquisitions and dispositions;
●
Puerto Rico and the other markets in which our borrowers are located;
●
●
●
●
●
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, resulting in, among other
things, loss or breach of customer data, disruption of services, reputational damage or additional costs to Popular;
●
●
pending or future litigation and regulatory or government investigations or actions;
●
●
●
●
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, 2024 (the “2024 Form 10-K”), as well as “Part II,
Item 1A” of our Quarterly Report on this 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 Form 10-Q are based upon information available to Popular as of the date of this
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.
5
POPULAR, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
[UNAUDITED]
June 30,
December 31,
(In thousands, except share information)
2025
2024
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 2025 - $
; 2024 - $
)
Less – Allowance for credit losses
Debt securities held-to-maturity, net
Equity securities (realizable value 2025 - $
; 2024 - $
)
Loans held-for-sale, at fair value
Loans held-in-portfolio
Less – Unearned income
Total loans held-in-portfolio, net
Premises and equipment, net
Other real estate
Accrued income receivable
Mortgage servicing rights, 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 20)
Stockholders’ equity:
Preferred stock,
)
Common stock, $
) and
)
Surplus
Retained earnings
Treasury stock - at cost,
)
(2,455,425 )
(2,228,535 )
Accumulated other comprehensive loss, net of tax
(1,395,657 )
(1,661,240 )
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
$
The accompanying notes are an integral part of these Consolidated Financial Statements.
6
POPULAR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarters ended June 30,
Six months ended June 30,
(In thousands, except per share information)
2025
2024
2025
2024
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 (Refer to Note 9)
Net gain, including impairment on equity securities
Net gain on trading account debt securities
Adjustments to indemnity reserves on loans sold
(25 )
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
(4,124 )
(5,750 )
(7,454 )
(11,071 )
Other operating expenses
Amortization of intangibles
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.
7
POPULAR, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Quarters ended,
Six months ended,
June 30,
June 30,
(In thousands)
2025
2024
2025
2024
Net income
$
$
$
$
Other comprehensive income (loss) before tax:
Foreign currency translation adjustment
(3,855 )
Amortization of net losses of pension and postretirement benefit plans
Unrealized holding gains (losses) on debt securities arising during the period
(50,608 )
Amortization of unrealized losses of debt securities transfer from available-for-
sale to held-to-maturity
Other comprehensive income before tax
Income tax expense
(20,655 )
(15,722 )
(56,325 )
(23,954 )
Total other comprehensive income, net of tax
Comprehensive income, net of tax
$
$
$
$
Tax effect allocated to each component of other comprehensive income:
Quarters ended
Six months ended,
June 30,
June 30,
(In thousands)
2025
2024
2025
2024
Amortization of net losses of pension and postretirement benefit plans
$(
852
)$(
1,357
)$(
1,704
)$(
2,714
)Unrealized holding losses on debt securities arising during the period
(10,555 )
(5,481 )
(36,311 )
(3,555 )
Amortization of unrealized losses of debt securities transfer from available-for-
sale to held-to-maturity
(9,248 )
(8,884 )
(18,310 )
(17,685 )
Income tax expense
$
(20,655 )
$
(15,722 )
$
(56,325 )
$
(23,954 )
The accompanying notes are an integral part of the Consolidated Financial Statements.
8
POPULAR, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
Accumulated
other
Common
Preferred
Retained
Treasury
comprehensive
(In thousands)
stock
stock
Surplus
earnings
stock
loss
Total
Balance at March 31, 2024
$
$
$
$
$
(2,013,187 )
$
(1,933,186 )
$
Net income
Issuances of common stock
Dividends declared:
Common stock
[1]
(44,944 )
(44,944 )
Preferred stock
(353 )
(353 )
Common stock purchases
(3,200 )
(3,200 )
Stock based compensation
Other comprehensive income, net of tax
Balance at June 30, 2024
$
$
$
$
$
(2,010,500 )
$
(1,878,282 )
$
Balance at March 31, 2025
$
$
$
$
$
(2,346,093 )
$
(1,489,987 )
$
Net income
Issuances of common stock
Dividends declared:
Common stock
[1]
(47,826 )
(47,826 )
Preferred stock
(353 )
(353 )
Common stock purchases
[2]
(117,075 )
(117,075 )
Stock based compensation
Other comprehensive income, net of tax
Balance at June 30, 2025
$
$
$
$
$
(2,455,425 )
$
(1,395,657 )
$
[1]
Dividends declared per common share during the quarter ended June 30, 2025 - $
0 (2024 - $
).
[2]
Includes common stock repurchases of $
.0 million as part of a repurchase authorization up to $
July 24, 2024 (the "2024 Repurchase Program"). Refer to Note 17 for additional information.
9
POPULAR, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
Accumulated
other
Common
Preferred
Retained
Treasury
comprehensive
(In thousands)
stock
stock
Surplus
earnings
stock
loss
Total
Balance at December 31, 2023
$
$
$
$
$
(2,018,957 )
$
(1,895,531 )
$
Net income
Issuances of common stock
Dividends declared:
Common stock
[1]
(89,695 )
(89,695 )
Preferred stock
(706 )
(706 )
Common stock purchases
(6,776 )
(6,776 )
Stock based compensation
Other comprehensive income, net of tax
Balance at June 30, 2024
$
$
$
$
$
(2,010,500 )
$
(1,878,282 )
$
Balance at December 31, 2024
$
$
$
$
$
(2,228,535 )
$
(1,661,240 )
$
Net income
Issuances of common stock
Dividends declared:
Common stock
[1]
(96,235 )
(96,235 )
Preferred stock
(706 )
(706 )
Common stock purchases
[2]
(243,055 )
(243,055 )
Stock based compensation
Other comprehensive income, net of tax
Balance at June 30, 2025
$
$
$
$
$
(2,455,425 )
$
(1,395,657 )
$
[1]
Dividends declared per common share during the six months ended June 30, 2025 - $
).
[2]
Includes common stock repurchases of $
For the six months ended
June 30,
June 30,
Disclosure of changes in number of shares:
2025
2024
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
(36,951,712 )
(32,446,045 )
Common Stock – Outstanding
The accompanying notes are an integral part of these Consolidated Financial Statements.
10
POPULAR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six months ended June 30,
(In thousands)
2025
2024
Cash flows from operating activities:
Net income
$
$
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
Amortization of intangibles
Depreciation and amortization of premises and equipment
Net accretion of discounts and amortization of premiums and deferred fees
(136,208 )
(127,770 )
Interest capitalized on loans subject to the temporary payment moratorium or loss mitigation alternatives
(2,822 )
(4,047 )
Share-based compensation
Fair value adjustments on mortgage servicing rights
Adjustments to indemnity reserves on loans sold
(293 )
Earnings from investments under the equity method, net of dividends or distributions
(2,871 )
Deferred income tax expense
Gain on:
Disposition of premises and equipment and other productive assets
(91 )
(6,295 )
Sale of loans, including valuation adjustments on loans held-for-sale and mortgage banking activities
(156 )
(76 )
Sale of equity method investment
(1,226 )
Sale of foreclosed assets, including write-downs
(5,076 )
(10,575 )
Acquisitions of loans held-for-sale
(2,332 )
(1,767 )
Proceeds from sale of loans held-for-sale
Net originations on loans held-for-sale
(12,137 )
(22,580 )
Net decrease (increase) in:
Trading debt securities
Equity securities
(1,411 )
(4,445 )
Accrued income receivable
(11,419 )
(17,340 )
Other assets
(19,371 )
(8,463 )
Net increase (decrease) in:
Interest payable
Pension and other postretirement benefits obligation
Other liabilities
(59,481 )
Total adjustments
(39,068 )
Net cash provided by operating activities
Cash flows from investing activities:
Net decrease in money market investments
Purchases of investment securities:
Available-for-sale
(18,905,199 )
(17,231,900 )
Equity
(25,811 )
(1,667 )
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
(912,037 )
(287,684 )
Proceeds from sale of loans
Acquisition of loan portfolios
(319,297 )
(384,479 )
Return of capital from equity method investments
Net proceeds from sale of equity method investment
Acquisition of premises and equipment and other productive assets
(96,200 )
(95,412 )
Proceeds from sale of:
Premises and equipment and other productive assets
Foreclosed assets
Net cash used in investing activities
(2,664,595 )
(2,087,772 )
11
Cash flows from financing activities:
Net increase in:
Deposits
Assets sold under agreements to repurchase
Other short-term borrowings
Payments of notes payable
(88,522 )
(46,000 )
Principal payments of finance leases
(1,829 )
(1,774 )
Proceeds from issuances of common stock
Dividends paid
(98,661 )
(90,151 )
Net payments for repurchase of common stock
(236,203 )
(452 )
Payments related to tax withholding for share-based compensation
(7,983 )
(6,324 )
Net cash provided by financing activities
Net decrease in cash and due from banks, and restricted cash
(18,404 )
(60,316 )
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
Notes to Consolidated Financial
Statements (Unaudited)
Note 1 -
Nature of operations
13
Note 2 -
Basis of presentation
14
Note 3 -
New accounting pronouncements
15
Note 4 -
Restrictions on cash and due from banks and
certain securities
20
Note 5 -
Debt securities available-for-sale
21
Note 6 -
Debt securities held-to-maturity
24
Note 7 -
Loans
27
Note 8 -
Allowance for credit losses – loans held-in-
portfolio
35
Note 9 -
Mortgage banking activities
78
Note 10 -
Transfers of financial assets and mortgage
servicing assets
79
Note 11 -
Other real estate owned
83
Note 12 -
Other assets
84
Note 13 -
Goodwill and other intangible assets
86
Note 14 -
Deposits
88
Note 15 -
Borrowings
89
Note 16 -
Other liabilities
91
Note 17 -
Stockholders’ equity
92
Note 18 -
Other comprehensive income
93
Note 19 -
Guarantees
95
Note 20 -
Commitments and contingencies
97
Note 21-
Non-consolidated variable interest entities
100
Note 22 -
Related party transactions
102
Note 23 -
Fair value measurement
103
Note 24 -
Fair value of financial instruments
111
Note 25 -
Net income per common share
114
Note 26 -
Revenue from contracts with customers
115
Note 27 -
Leases
116
Note 28 -
Pension and postretirement benefits
118
Note 29 -
Stock-based compensation
119
Note 30 -
Income taxes
122
Note 31 -
Supplemental disclosure on the consolidated
statements of cash flows
126
Note 32 -
Segment reporting
127
13
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 U.S. and British Virgin Islands. In Puerto Rico, the Corporation provides retail, mortgage and
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, mortgage, 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.
14
Note 2 – Basis of Presentation
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, 2024 was derived from audited
Consolidated Financial Statements of the Corporation for the year ended December 31, 2024.
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, 2024, included in the 2024 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.
Use of Estimates in the Preparation of Financial Statements
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.
15
Note 3 - New accounting pronouncements
Recently Adopted Accounting Standards Updates
Standard
Description
Date of adoption
Effect on the financial statements
FASB ASU 2025-02,
Liabilities (Topic 405) -
Amendments to SEC
Paragraphs Pursuant to
SEC Staff Accounting
Bulletin No. 122
The Financial Accounting Standards Board
("FASB") issued Accounting Standard
Update ("ASU") 2025-02 in March 2025,
which amends the guidance in Accounting
Standards Codification ("ASC") 450-10-
S99-1 by removing the interpretative
guidance of Section FF of Topic 5 in the
Staff Accounting Bulletin Series ("SAB") text
that addressed the accounting for
obligations to safeguard crypto-assets held
by platform users to align the ASC with the
latest SAB 112 directive, ensuring
consistency and clarity.
March 18, 2025
The Corporation was not impacted by
the adoption of this ASU since it does
not hold crypto-assets.
FASB ASU 2024-02,
Codification
Improvements—
Amendments to Remove
References to the
Concepts Statements
The FASB issued ASU 2024-02 in March
2024, which removes various references to
concept statements from the ASC. The ASU
intends to simplify the Codification and
distinguish between nonauthoritative and
authoritative guidance.
January 1, 2025
The Corporation was not impacted by
the adoption of this ASU since it did not
provide for accounting changes or new
presentation or disclosure
requirements. The ASU eliminated
references within the ASC to the
concept statements, which is
considered non-authoritative guidance.
FASB ASU 2024-01,
Compensation - Stock
Compensation (Topic 718)
- Scope Application of
Profits Interest and Similar
Awards
The FASB issued ASU 2024-01 in March
2024, which amends ASC Topic 718 by
including an illustrative example to
demonstrate how an entity would apply the
scope guidance in paragraph 718-10-15-3
to determine whether profits interest awards
should be accounted for in accordance with
ASC Topic 718. The ASU is intended to
reduce complexity and diversity in practice.
January 1, 2025
The Corporation was not impacted by
the adoption of this ASU since the
performance share awards of the
Corporation continue to meet the
requirements of ASC 718-10-15-3.
FASB ASU 2023-08,
Intangibles - Goodwill and
Other - Crypto Assets
(Subtopic 350-60) -
Accounting for and
Disclosure of Crypto
Assets
The FASB issued ASU 2023-08 in
December 2023, which amends ASC
Subtopic 350-60 by requiring that crypto
assets are measured at fair value in the
statement of financial position each
reporting period with changes from
remeasurement being recognized in net
income. The ASU also requires enhanced
disclosures for both annual and interim
reporting periods to provide investors with
relevant information to analyze and assess
the exposure and risk of significant
individual crypto asset holdings.
January 1, 2025
The Corporation was not impacted by
the adoption of this ASU since it does
not hold crypto-assets.
16
Recently Adopted Accounting Standards Updates
Standard
Description
Date of adoption
Effect on the financial statements
FASB ASU 2023-05,
Business Combinations -
Joint Venture Formations
(Subtopic 805-60) -
Recognition and initial
measurement
The FASB issued ASU 2023-05 in August
2023, which amends ASC Subtopic 805-60
to include specific guidance about how joint
ventures should recognize and initially
measure assets contributed and liabilities
assumed. The amendments require that a
joint venture, upon formation, recognize and
initially measure its assets and liabilities at
fair value.
January 1, 2025
The Corporation was not impacted by
the adoption of this ASU but it will
consider this guidance for the initial
measurement of assets and liabilities of
newly created joint ventures
prospectively.
17
Accounting Standards Updates Not Yet Adopted
Standard
Description
Date of adoption
Effect on the financial statements
FASB ASU 2025-05,
Financial Instruments -
Credit Losses (Topic 326)
- Measurement of Credit
Losses for Accounts
Receivables and Contract
Assets
The FASB issued ASU 2025-05 in July
2025, which permits entities to elect a
practical expedient when accounting for
current accounts receivable and current
contract assets arising from transactions
accounted for under Topic 606, Revenue
from Contracts with Customers. This
practical expedient establishes that, in
developing reasonable and supportable
forecasts as part of estimating expected
credit losses, entities assume that current
conditions as of the balance sheet date do
not change for the remaining life of the
asset.
January 1, 2026
The Corporation is currently evaluating
any impact that the adoption of this
guidance will have on its financial
statements and presentation and
disclosures.
FASB ASU 2025-04,
Compensation—Stock
Compensation (Topic 718)
and Revenue from
Contracts with Customers
(Topic 606) - Clarifications
to Share-Based
Consideration Payable to
a Customer
The FASB issued ASU 2025-04 in May
2025, which clarifies the accounting for
share-based awards granted as
consideration payable to a customer. The
ASU expands the definition of performance
condition for share-based consideration
under ASC 718 and eliminates the forfeiture
policy election for service conditions. It also
confirms that the variable consideration
constraint in ASC 606 does not apply to
such awards.
January 1, 2027
The Corporation does not expect to be
impacted by the adoption of this ASU
since it does not grant share-based
payment awards to customers.
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 ("VIE")
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 Corporation is currently evaluating
any impact that the adoption of this
guidance will have on its financial
statements and presentation and
disclosures.
18
FASB ASU 2024-04,
Debt—Debt with
Conversion and Other
Options (Subtopic 470-
20) - Induced Conversions
of Convertible Debt
Instruments
The FASB issued ASU 2024-04 in
November 2024, which clarifies the
requirements for determining whether
certain settlements of convertible debt
instruments should be accounted for as an
induced conversion. Also it makes
additional clarifications to assist
stakeholders in applying the guidance. The
ASU clarifies that the incorporation,
elimination, or modification of a volume-
weighted average price ("VWAP") formula
does not automatically cause a settlement
to be accounted for as an extinguishment
and that the induced conversion guidance
applies to a convertible debt instrument that
is not currently convertible as long as it had
a substantive conversion feature as of both
its issuance date and the date the
inducement offer is accepted.
January 1, 2026
The Corporation is currently evaluating
any impact that the adoption of this
guidance will have on its financial
statements and presentation and
disclosures.
Accounting Standards Updates Not Yet Adopted
Standard
Description
Date of adoption
Effect on the financial statements
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.
FASB ASU 2023-09,
Income Tax (Topic 740) -
Improvements to Income
Tax Disclosures
The FASB issued ASU 2023-09 in
December 2023, which amends ASC Topic
740 by enhancing disclosures regarding
rate reconciliation and requiring the
disclosure of income taxes paid, income (or
loss) before income tax expense and
income tax expense disaggregated by
national, state and foreign level. Disclosures
that no longer were considered cost
beneficial or relevant were removed from
ASC Topic 740.
For fiscal years
beginning on
January 1, 2025
The Corporation will prospectively
adopt ASU 2023-09 for it's
Consolidated Financial Statements in
the 2025 Form 10-K. The adoption of
this standard will result in the inclusion
of certain new categories in the
effective income tax rate and income
tax expense tabular disclosures, as well
as the disclosure of income taxes paid,
within the income taxes note.
19
FASB ASU 2023-06,
Disclosure Improvements -
Codification Amendments
in Response to the SEC’s
Disclosure Update and
Simplification Initiative
The FASB issued ASU 2023-06 in October
2023 which modifies the disclosure or
presentation requirements of various
subtopics in the Codification with the
purpose of aligning U.S. GAAP
requirements with those of the SEC under
Regulation S-X and S-K.
The date on which
the SEC removes
related disclosure
requirements from
Regulation S-X or
Regulation S-K. If by
June 30, 2027, the
SEC has not
removed the
applicable
requirements from
Regulation S-X or
Regulation S-K, the
pending content of
the related
amendment will be
removed from the
Codification and will
not become
effective for any
entity.
The Corporation does not expect to be
impacted by the adoption of this ASU
since it is subject to SEC's current
disclosure and presentation
requirements under Regulation S-X and
S-K.
20
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 $
$
balances.
At June 30, 2025, the Corporation held $
debt securities available for sale and equity securities (December 31, 2024 - $
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.
21
Note 5 – Debt securities available-for-sale
The following tables present the amortized cost, gross unrealized gains and losses, fair value, weighted average yield and
contractual maturities of debt securities available-for-sale at June 30, 2025 and December 31, 2024.
At June 30, 2025
Gross
Gross
Weighted
Amortized
unrealized
unrealized
Fair
average
(In thousands)
cost
gains
losses
value
yield
U.S. Treasury securities
Within 1 year
$
$
$
$
%
After 1 to 5 years
Total U.S. Treasury securities
Collateralized mortgage obligations - federal agencies
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
After 1 to 5 years
Total other
Total debt securities available-for-sale
[1]
$
$
$
$
%
[1]
servicing agreements that the secured parties are not permitted to sell or repledge the collateral, of which $
public funds. The Corporation had unpledged Available for Sale securities with a fair value of $
.0 billion that could be used to increase its
borrowing facilities.
22
At December 31, 2024
Gross
Gross
Weighted
Amortized
unrealized
unrealized
Fair
average
(In thousands)
cost
gains
losses
value
yield
U.S. Treasury securities
Within 1 year
$
$
$
$
%
After 1 to 5 years
Total U.S. Treasury securities
Collateralized mortgage obligations - federal agencies
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
After 1 to 5 years
Total other
Total debt securities available-for-sale
[1]
$
$
$
$
%
[1]
Includes $
servicing agreements that the secured parties are not permitted to sell or repledge the collateral, of which $
public funds. The Corporation had unpledged Available for Sale securities with a fair value of $
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.
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 June 30, 2025, the Corporation did not intend to sell or believed it was more likely than not that it would be required to sell debt
securities classified as available-for-sale. There were
ended June 30, 2025 and 2024.
23
The following tables present the Corporation’s fair value and gross unrealized losses of debt securities available-for-sale,
aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at
June 30, 2025 and December 31, 2024.
At June 30, 2025
Less than 12 months
12 months or more
Total
Gross
Gross
Gross
Fair
Fair
Fair
(In thousands)
value
losses
value
losses
value
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, 2024
Less than 12 months
12 months or more
Total
Gross
Gross
Gross
Fair
Fair
Fair
(In thousands)
value
losses
value
losses
value
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
$
$
$
$
$
$
As of June 30, 2025, the portfolio of available-for-sale debt securities reflects gross unrealized losses of $
2024 - $
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.
24
Note 6 –Debt securities held-to-maturity
The following tables present the amortized cost, allowance for credit losses, gross unrealized gains and losses, approximate fair
value, weighted average yield and contractual maturities of debt securities held-to-maturity at June 30, 2025 and December 31,
2024.
At June 30, 2025
Allowance
Carrying
Value
Gross
Gross
Weighted
Amortized
Book
[1]
for Credit
Net of
unrealized
unrealized
Fair
average
(In thousands)
cost
Value
Losses
Allowance
gains
losses
value
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 $
securities previously transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.
[2]
Includes $
Corporation had unpledged held-to-maturities securities with a fair value of $
25
At December 31, 2024
Allowance
Carrying
Value
Gross
Gross
Weighted
Amortized
Book
[1]
for Credit
Net of
unrealized
unrealized
Fair
average
(In thousands)
cost
Value
Losses
Allowance
gains
losses
value
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 $
securities transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.
[2]
Includes $
Corporation had unpledged held-to-maturities securities with a fair value of $
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 2024 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 June 30, 2025 and December 31, 2024, the “Obligations of Puerto Rico, States and political subdivisions” classified as held-to-
maturity, includes 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 $
Rico, of which $
municipality (compared to $
At June 30, 2025, the portfolio of “Obligations of Puerto Rico, States and political subdivisions” also includes $
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, 2024 - $
securities are not rated by a credit rating agency.
26
The Corporation assesses the credit risk associated with these securities by evaluating the refreshed FICO scores of a
representative sample of the underlying borrowers. As of June 30, 2025, the average refreshed FICO score for the sample,
comprised of
% of the nominal value of the securities, used for the loss estimate was of
% and
,
respectively, at December 31, 2024). The loss estimates for this portfolio was based on the methodology established under CECL
for similar loan obligations. The Corporation does not consider the government guarantee when estimating the credit losses
associated with this portfolio.
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.
Refer to Note 20
to the Consolidated Financial Statements
for additional information on the Corporation’s exposure to the Puerto
Rico Government.
Delinquency status
At June 30, 2025 and December 31, 2024, there were
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 June
30, 2025 was $
27
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 2024 Form 10-K.
The following table presents the Corporation's loan purchases for the quarters and six months ended June 30, 2025 and 2024 by
class of loans:
Quarters ended June 30,
Six months ended June 30,
(In thousands)
2025
2024
2025
2024
Commercial
$
$
$
$
Mortgage
Ending balance
$
$
$
$
The following table presents the Corporation’s loan sales for the quarters and six months ended June 30, 2025 and 2024 by class of
loans:
Quarters ended June 30,
Six months ended June 30,
(In thousands)
2025
2024
2025
2024
Commercial
$
$
$
$
Construction
Mortgage
Ending balance
$
$
$
$
During the quarter ended June 30, 2025, the Corporation securitized $
securities, compared to $
into GNMA mortgage-backed securities during the quarter ended June 30, 2025. There were
no
quarter ended June 30, 2024.
During the six months ended June 30, 2025, the Corporation securitized $
securities, compared to $
loans into GNMA mortgage-backed securities during the six months ended June 30, 2025, compared to $
months ended June 30, 2024.
Delinquency status
The following tables present the amortized cost basis of loans held-in-portfolio (“HIP”), net of unearned income, by past due status,
and by loan class including those that are in non-performing status or that are accruing interest but are past due 90 days or more at
June 30, 2025 and December 31, 2024.
28
June 30, 2025
BPPR
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
days
days
or more
past due
Current
Loans HIP
loans
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
$
$
$
$
$
$
$
$
June 30, 2025
Popular U.S.
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
days
days
or more
past due
Current
Loans HIP
loans
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
$
$
$
$
$
$
$
$
29
June 30, 2025
Popular, Inc.
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
days
days
or more
past due
Current
Loans HIP
[2] [3]
loans
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 June 30, 2025, mortgage loans held-in-portfolio include $
Corporation’s policy is to exclude them from non-performing status, of which $
guaranteed loans includes $
Corporation has $
at June 30, 2025.
[2]
Loans held-in-portfolio are net of $
[3]
Includes $
of which $
Bank ("FRB") for discount window borrowings. As of June 30, 2025, the Corporation had an available borrowing facility with the FHLB and the
discount window of FRB of $
.0 billion and $
30
December 31, 2024
BPPR
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
or more
past due
Current
Loans HIP
loans
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
$
$
$
$
$
$
$
$
December 31, 2024
Popular U.S.
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
or more
past due
Current
Loans HIP
loans
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
$
$
$
$
$
$
$
$
31
December 31, 2024
Popular, Inc.
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
or more
past due
Current
Loans HIP
[2]
[3]
loans
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, 2024 mortgage loans held-in-portfolio include $
which the Corporation’s policy is to exclude them from non-performing status, of which $
guaranteed loans includes $
The Corporation has $
interest at December 31, 2024.
[2]
Loans held-in-portfolio are net of $
[3]
Includes $
of which $
December 31, 2024, the Corporation had an available borrowing facility with the FHLB and the discount window of FRB of $
.0
billion, respectively.
Recognition of interest income on mortgage loans is generally discontinued when loans are 90 days or more in arrears on payments
of principal or interest. The Corporation discontinues the recognition of interest income on residential mortgage loans insured by the
FHA or guaranteed by the VA when 15 months delinquent as to principal or interest, since the principal repayment on these loans is
insured.
Loans with a delinquency status of 90 days past due as of June 30, 2025 include $
securities (December 31, 2024 - $
to repurchase loans that are 90 days or more past due. For accounting purposes, these loans subject to the repurchase option are
required to be reflected on the financial statements of BPPR with an offsetting liability. Loans in our serviced GNMA portfolio benefit
from payment forbearance programs but continue to reflect the contractual delinquency until the borrower repays deferred payments
or completes a payment deferral modification or other borrower assistance alternative.
The following tables present the amortized cost basis of non-accrual loans as of June 30, 2025 and December 31, 2024 by class of
loans:
32
June 30, 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:
Total
$
$
$
$
$
$
December 31, 2024
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:
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 June 30, 2025 include $
2024 - $
June 30, 2025 (June 30, 2024 - $
The following tables present the amortized cost basis of collateral-dependent loans, for which the ACL was measured based on the
fair value of the collateral less cost to sell, by class of loans and type of collateral as of June 30, 2025 and December 31, 2024:
33
June 30, 2025
(In thousands)
Real Estate
Auto
Equipment
Accounts
Receivables
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.
$
$
$
$
$
$
34
December 31, 2024
(In thousands)
Real Estate
Auto
Equipment
Other
Total
BPPR
Commercial multi-family
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Construction
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
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.
$
$
$
$
$
35
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 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
competing risk 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 macroeconomic
expectations to derive the lifetime expected loss.
At June 30, 2025, 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. During the first
quarter of 2025, the Corporation assigned equal probability weights to the baseline and pessimistic scenarios in response to
economic uncertainty, the optimistic scenario being the lowest of probabilities. During the second quarter of 2025, the Corporation
moderately reduced the probability weight for the pessimistic scenario based on changes in the economic outlook and a
reassessment of uncertainty compared to the previous quarter. The net impact of these two changes in the assigned weights on the
ACL levels for the six months ended June 30, 2025 was $
pessimistic scenario remains above the levels observed in 2024, given the ongoing economic uncertainty.
The following tables present the changes in the ACL of loans held-in-portfolio and unfunded commitments for the quarters and six
months ended June 30, 2025 and 2024.
36
For the quarter ended June 30, 2025
BPPR
Provision for
Beginning
credit losses
Ending
(In thousands)
Balance
(benefit)
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
$
$
$
$
$
(160 )
(21 )
(1,176 )
(14 )
(6,769 )
(2,466 )
(7,835 )
(2,501 )
Construction
Mortgage
(1,752 )
(550 )
Leasing
(3,982 )
Consumer
(20,011 )
(313 )
(19,553 )
(13,418 )
(700 )
(53,682 )
Total - Loans
$
$
$
(60,715 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
(1,569 )
$
$
$
Construction
Ending balance - unfunded commitments [1]
$
$
(1,260 )
$
$
$
[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
37
For the quarter ended June 30, 2025
Popular U.S.
Provision for
Beginning
credit losses
Ending
(In thousands)
Balance
(benefit)
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
$
(563 )
$
$
Commercial real estate non-owner occupied
Commercial real estate owner occupied
(1,016 )
(14 )
Commercial and industrial
(49 )
Total Commercial
(626 )
Construction
Mortgage
Consumer
Home equity lines of credit
(799 )
(16 )
Personal
(2,920 )
Other
(13 )
Total Consumer
(2,949 )
Total - Loans
$
$
$
(3,575 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
$
$
$
Construction
(203 )
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.
38
For the quarter ended June 30, 2025
Popular Inc.
Provision for
Beginning
credit losses
Ending
(In thousands)
Balance
(benefit)
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
$
(563 )
$
$
Commercial real estate non-owner occupied
(21 )
Commercial real estate owner occupied
(2,192 )
(28 )
Commercial and industrial
(5,236 )
(2,515 )
Total Commercial
(3,226 )
(3,127 )
Construction
Mortgage
(1,315 )
(550 )
Leasing
(3,982 )
Consumer
Credit cards
(20,011 )
Home equity lines of credit
(1,112 )
(16 )
Personal
(22,473 )
Auto
(13,418 )
Other
(713 )
Total Consumer
(56,631 )
Total - Loans
$
$
$
(64,290 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
(1,264 )
$
$
$
Construction
Consumer
Ending balance - unfunded commitments [1]
$
$
(1,116 )
$
$
$
[1]
Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
39
For the six months ended June 30, 2025
BPPR
Provision for
Allowance for
Beginning
credit losses
credit losses -
Ending
(In thousands)
Balance
(benefit)
PCD Loans
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
$
$
$
$
Commercial real estate non-owner occupied
(2,759 )
(86 )
Commercial real estate owner occupied
(2,918 )
(103 )
Commercial and industrial
(7,026 )
(5,778 )
Total Commercial
(11,798 )
(5,967 )
Construction
Mortgage
(2,870 )
(985 )
Leasing
(8,526 )
Consumer
Credit cards
(38,876 )
Home equity lines of credit
(421 )
(25 )
Personal
(41,506 )
Auto
(34,474 )
Other
(1,580 )
Total Consumer
(116,461 )
Total - Loans
$
$
$
$
(131,939 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
(849 )
$
$
$
$
Construction
Ending balance - unfunded commitments [1]
$
$
(643 )
$
$
$
$
[1]
Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
40
For the six months ended June 30, 2025
Popular U.S.
Provision for
Beginning
credit losses
Ending
(In thousands)
Balance
(benefit)
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
$
(563 )
$
$
Commercial real estate non-owner occupied
Commercial real estate owner occupied
(26 )
Commercial and industrial
(1,196 )
Total Commercial
(1,785 )
Construction
(1,017 )
Mortgage
Consumer
Home equity lines of credit
(935 )
(46 )
Personal
(5,546 )
Other
(42 )
Total Consumer
(5,634 )
Total - Loans
$
$
$
(7,419 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
$
$
$
Construction
(2,120 )
Consumer
Ending balance - unfunded commitments [1]
$
$
(1,774 )
$
$
$
[1]
Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
41
For the six months ended June 30, 2025
Popular Inc.
Provision for
Allowance for
Beginning
credit losses
credit losses -
Ending
(In thousands)
Balance
(benefit)
PCD Loans
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
$
$
(563 )
$
$
Commercial real estate non-owner occupied
(86 )
Commercial real estate owner occupied
(2,725 )
(129 )
Commercial and industrial
(4,016 )
(6,974 )
Total Commercial
(7,752 )
Construction
(685 )
Mortgage
(2,386 )
(985 )
Leasing
(8,526 )
Consumer
Credit cards
(38,876 )
Home equity lines of credit
(1,356 )
(71 )
Personal
(47,052 )
Auto
(34,474 )
Other
(1,622 )
Total Consumer
(122,095 )
Total - Loans
$
$
$
$
(139,358 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
(576 )
$
$
$
$
Construction
(1,914 )
Consumer
Ending balance - unfunded commitments [1]
$
$
(2,417 )
$
$
$
$
[1]
Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
42
For the quarter ended June 30, 2024
BPPR
Provision for
Allowance for
Beginning
credit losses
credit losses -
Ending
(In thousands)
Balance
(benefit)
PCD Loans
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
(264 )
$
$
$
$
Commercial real estate non-owner occupied
(324 )
Commercial real estate owner occupied
(5,296 )
Commercial and industrial
(8,072 )
Total Commercial
(8,072 )
Construction
Mortgage
(6,419 )
(26 )
Leasing
(3,841 )
Consumer
Credit cards
(16,419 )
Home equity lines of credit
(94 )
Personal
(23,293 )
Auto
(16,609 )
Other
(680 )
Total Consumer
(57,095 )
Total - Loans
$
$
$
$
(69,034 )
$
$
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.
43
For the quarter ended June 30, 2024
Popular U.S.
Provision for
Beginning
credit losses
Ending
(In thousands)
Balance
(benefit)
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
(1,303 )
$
$
$
Commercial real estate non-owner occupied
(1,151 )
Commercial real estate owner occupied
(1,514 )
Commercial and industrial
(1,367 )
(1,195 )
Total Commercial
(5,335 )
(1,195 )
Construction
Mortgage
(502 )
(18 )
Consumer
Home equity lines of credit
(510 )
(14 )
Personal
(4,596 )
Other
(2 )
(18 )
Total Consumer
(4,628 )
Total - Loans
$
$
(4,428 )
$
(5,841 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
$
$
$
Construction
Consumer
(5 )
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.
44
For the quarter ended June 30, 2024
Popular Inc.
Provision for
Allowance for
Beginning
credit losses
credit losses -
Ending
(In thousands)
Balance
(benefit)
PCD Loans
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
(1,567 )
$
$
$
$
Commercial real estate non-owner occupied
(1,475 )
Commercial real estate owner occupied
(6,810 )
Commercial and industrial
(9,267 )
Total Commercial
(9,267 )
Construction
Mortgage
(6,921 )
(44 )
Leasing
(3,841 )
Consumer
Credit cards
(16,419 )
Home equity lines of credit
(488 )
(108 )
Personal
(27,889 )
Auto
(16,609 )
Other
(698 )
Total Consumer
(61,723 )
Total - Loans
$
$
$
$
(74,875 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
$
$
$
$
Construction
Consumer
(5 )
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.
45
For the six months ended June 30, 2024
BPPR
Provision for
Allowance for
Beginning
credit losses
credit losses -
Ending
(In thousands)
Balance
(benefit)
PCD Loans
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
(312 )
$
$
$
$
Commercial real estate non-owner occupied
(737 )
Commercial real estate owner occupied
(149 )
(2,785 )
Commercial and industrial
(14,741 )
Total Commercial
(17,526 )
Construction
(1,656 )
Mortgage
(6,738 )
(791 )
Leasing
(8,691 )
Consumer
Credit cards
(32,815 )
Home equity lines of credit
(291 )
Personal
(47,642 )
Auto
(36,776 )
Other
(1,344 )
Total Consumer
(118,868 )
Total - Loans
$
$
$
$
(145,876 )
$
$
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.
46
For the six months ended June 30, 2024
Popular U.S.
Provision for
Beginning
credit losses
Ending
(In thousands)
Balance
(benefit)
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
(1,813 )
$
(441 )
$
$
Commercial real estate non-owner occupied
(956 )
Commercial real estate owner occupied
Commercial and industrial
(1,759 )
Total Commercial
(2,200 )
Construction
Mortgage
(1,427 )
(18 )
Consumer
Home equity lines of credit
(763 )
(21 )
Personal
(10,308 )
Other
(49 )
Total Consumer
(10,378 )
Total - Loans
$
$
$
(12,596 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
$
$
$
Construction
(47 )
Consumer
(29 )
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.
47
For the six months ended June 30, 2024
Popular Inc.
Provision for
Allowance for
Beginning
credit losses
credit losses -
Ending
(In thousands)
Balance
(benefit)
PCD Loans
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
(2,125 )
$
$
(441 )
$
$
Commercial real estate non-owner occupied
(1,693 )
Commercial real estate owner occupied
(2,785 )
Commercial and industrial
(16,500 )
Total Commercial
(19,726 )
Construction
Mortgage
(8,165 )
(809 )
Leasing
(8,691 )
Consumer
Credit cards
(32,815 )
Home equity lines of credit
(638 )
(312 )
Personal
(57,950 )
Auto
(36,776 )
Other
(1,393 )
Total Consumer
(129,246 )
Total - Loans
$
$
$
$
(158,472 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
$
$
$
$
Construction
Consumer
(29 )
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.
Modifications
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 six months ended June 30, 2025 amounted to $
2024 - $
The following tables show the amortized cost basis of the loans modified to borrowers experiencing financial difficulties at the end of
the reporting period disaggregated by class of financing receivable and type of concession granted for the quarters and six months
ended June 30, 2025 and 2024. Loans modified to borrowers experiencing financial difficulties that were fully paid down, charged-off
or foreclosed upon by period end are not reported.
48
Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the quarter ended June 30, 2025
Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June
30, 2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at June
30, 2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June
30, 2025
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Mortgage
%
%
%
Consumer:
-
%
%
%
%
%
%
Total
$
%
$
%
$
%
Term Extension
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June
30, 2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at June
30, 2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June
30, 2025
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
CRE owner occupied
%
%
%
Commercial and industrial
%
%
%
Mortgage
%
%
%
Consumer:
-
%
%
%
%
%
%
Total
$
%
$
%
$
%
Other-Than-Insignificant Payment Delays
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June
30, 2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at June
30, 2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June
30, 2025
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
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 June
30, 2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at June
30, 2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June
30, 2025
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
Total
$
%
$
%
$
%
Combination - Other-Than-Insignificant Payment Delays and Interest Rate Reduction
Puerto Rico
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June
30, 2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at June
30, 2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June
30, 2025
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Consumer:
%
%
%
Total
$
%
$
%
$
%
49
Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the six months ended June 30, 2025
Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
%
%
%
Total
$
%
$
%
$
%
Term Extension
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
CRE owner occupied
%
%
%
Commercial and industrial
%
%
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
Total
$
%
$
%
$
%
Other-Than-Insignificant Payment Delays
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
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 June 30,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
Total
$
%
$
%
$
%
50
Combination - Other-Than-Insignificant Payment Delays and Interest Rate Reduction
Puerto Rico
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2025
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Consumer:
%
%
%
Total
$
%
$
%
$
%
51
Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the quarter ended June 30, 2024
Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2024
% of total class
of Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
CRE owner occupied
$
%
$
%
$
%
Commercial and industrial
%
%
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
%
%
%
Total
$
%
$
%
$
%
Term Extension
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2024
% of total class
of Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
CRE owner occupied
%
%
%
Commercial and industrial
%
%
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
Total
$
%
$
%
$
%
Other-Than-Insignificant Payment Delays
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2024
% of total class
of Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
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 June 30,
2024
% of total class
of Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Mortgage
%
%
%
Consumer:
%
%
%
Total
$
%
$
%
$
%
Combination - Other-Than-Insignificant Payment Delays and Interest Rate Reduction
Puerto Rico
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2024
% of total class
of Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Consumer:
%
%
%
Total
$
%
$
%
$
%
52
Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the six months ended June 30, 2024
Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
CRE owner occupied
$
%
$
%
$
%
Commercial and industrial
%
%
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
%
%
%
Total
$
%
$
%
$
%
Term Extension
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
CRE owner occupied
%
%
%
Commercial and industrial
%
%
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
Total
$
%
$
%
$
%
Other-Than-Insignificant Payment Delays
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
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 June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
Commercial and industrial
%
%
%
Mortgage
%
%
%
Consumer:
%
%
%
Total
$
%
$
%
$
%
53
Combination - Other-Than-Insignificant Payment Delays and Interest Rate Reduction
Puerto Rico
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Amortized Cost
Basis at June 30,
2024
% of total class of
Financing
Receivable
Commercial and industrial
$
%
%
Consumer:
%
%
Total
$
%
$
$
%
54
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulties:
For the quarter ended June 30, 2025
Interest rate reduction
Loan Type
Financial Effect
Commercial and industrial
Reduced weighted-average contractual interest rate from
% to
%.
Mortgage
Reduced weighted-average contractual interest rate from
.0% to
%.
Consumer:
Credit cards
Reduced weighted-average contractual interest rate from
% to
%.
Personal
Reduced weighted-average contractual interest rate from
% to
%.
Auto
Reduced weighted-average contractual interest rate from
0% to
%.
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
Mortgage
Added a weighted-average of
Consumer:
Credit cards
Added a weighted-average of
For the six months ended June 30, 2025
Interest rate reduction
Loan Type
Financial Effect
Commercial and industrial
Reduced weighted-average contractual interest rate from
% to
%.
Mortgage
Reduced weighted-average contractual interest rate from
% to
%.
Consumer:
Credit cards
Reduced weighted-average contractual interest rate from
.0% to
%.
Personal
Reduced weighted-average contractual interest rate from
% to
%.
Auto
Reduced weighted-average contractual interest rate from
0% to
%.
Other
Reduced weighted-average contractual interest rate from
.0% to
.0%.
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
55
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
Mortgage
Added a weighted-average of
Consumer:
Credit cards
Added a weighted-average of
56
For the quarter ended June 30, 2024
Interest rate reduction
Loan Type
Financial Effect
CRE Owner occupied
Reduced weighted-average contractual interest rate from
.0% to
.0%.
Commercial and industrial
Reduced weighted-average contractual interest rate from
.0% to
%.
Mortgage
Reduced weighted-average contractual interest rate from
% to
%.
Consumer:
Credit cards
Reduced weighted-average contractual interest rate from
% to
%.
Personal
Reduced weighted-average contractual interest rate from
% to
%.
Other
Reduced weighted-average contractual interest rate from
.0% to
.0%.
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
Mortgage
Added a weighted-average of
Consumer:
Credit cards
Added a weighted-average of
57
For the six months ended June 30, 2024
Interest rate reduction
Loan Type
Financial Effect
CRE Non-owner occupied
Reduced weighted-average contractual interest rate from
% to
%.
CRE Owner occupied
Reduced weighted-average contractual interest rate from
.0% to
.0%.
Commercial and industrial
Reduced weighted-average contractual interest rate from
% to
%.
Mortgage
Reduced weighted-average contractual interest rate from
% to
%.
Consumer:
Credit cards
Reduced weighted-average contractual interest rate from
% to
.0%.
Personal
Reduced weighted-average contractual interest rate from
% to
.0%.
Other
Reduced weighted-average contractual interest rate from
.0% to
.0%.
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
Mortgage
Added a weighted-average of
Consumer:
Credit cards
Added a weighted-average of
58
The following tables present, by class, the performance of loans that have been modified during the twelve months preceding June
30, 2025. The past due 90 days or more categories includes 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 six 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
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:
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.
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
Commercial multi-family
$
$
$
$
$
$
$
CRE non-owner occupied
Commercial and industrial
Mortgage
Consumer:
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.
59
Popular Inc.
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
Commercial multi-family
$
$
$
$
$
$
$
$
CRE non-owner occupied
CRE owner occupied
Commercial and industrial
Mortgage
Consumer:
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.
60
The following tables present, by class, the performance of loans that have been modified during the twelve months preceding June
30, 2024.
BPPR
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
Commercial multi-family
$
$
$
$
$
$
$
$
CRE non-owner occupied
CRE owner occupied
Commercial and industrial
Mortgage
Consumer:
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.
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 owner occupied
$
$
$
$
$
$
$
$
Mortgage
Consumer:
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.
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
Commercial multi-family
$
$
$
$
$
$
$
$
CRE non-owner occupied
CRE owner occupied
Commercial and industrial
Mortgage
Consumer:
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.
61
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 June 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:
Total
$
$
$
$
$
$
Amortized Cost Basis of Modified Financing Receivables That Subsequently Defaulted During the Six Months Ended June 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:
Total
$
$
$
$
$
$
Amortized Cost Basis of Modified Financing Receivables That Subsequently Defaulted During the Quarter Ended June 30, 2024
62
(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
Commercial and industrial
$
$
$
$
$
$
Mortgage
Consumer:
Total
$
$
$
$
$
$
Amortized Cost Basis of Modified Financing Receivables That Subsequently Defaulted During the Six Months Ended June 30, 2024
(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 owner occupied
$
$
$
$
$
$
Commercial and industrial
Mortgage
Consumer:
Total
$
$
$
$
$
$
Credit Quality
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.
The following tables present the amortized cost basis, net of unearned income, of loans held-in-portfolio based on the Corporation’s
assignment of obligor risk ratings as defined at June 30, 2025 and December 31, 2024 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 2024 Form 10-K:
63
June 30, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
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
Substandard
Total construction
$
$
$
$
$
$
$
$
$
Mortgage
Pass
$
$
$
$
$
$
$
$
$
Substandard
Total mortgage
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
64
June 30, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
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
consumer
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Total BPPR
$
$
$
$
$
$
$
$
$
65
June 30, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
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
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
$
$
$
$
$
$
$
$
$
66
June 30, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
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
$
$
$
$
$
$
$
$
$
Total Other
consumer
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Total Popular U.S.
$
$
$
$
$
$
$
$
$
67
June 30, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
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
$
$
$
$
$
$
$
$
$
68
June 30, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
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
$
$
$
$
$
$
$
$
$
69
June 30, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
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.
$
$
$
$
$
$
$
$
$
70
December 31, 2024
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2024
2023
2022
2021
2020
Prior
Years
Total
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
Special Mention
Substandard
Total construction
$
$
$
$
$
$
$
$
$
Mortgage
Pass
$
$
$
$
$
$
$
$
$
Substandard
Total mortgage
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
71
December 31, 2024
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2024
2023
2022
2021
2020
Prior
Years
Total
BPPR
Leasing
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total leasing
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Consumer:
Credit cards
Pass
$
$
$
$
$
$
$
$
$
Substandard
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
$
$
$
$
$
$
$
$
$
72
December 31, 2024
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2024
2023
2022
2021
2020
Prior
Years
Total
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
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial real estate owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
real estate owner
occupied
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
73
December 31, 2024
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2024
2023
2022
2021
2020
Prior
Years
Total
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
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
74
December 31, 2024
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2024
2023
2022
2021
2020
Prior
Years
Total
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
Total Other
consumer
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Total Popular U.S.
$
$
$
$
$
$
$
$
$
75
December 31, 2024
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2024
2023
2022
2021
2020
Prior
Years
Total
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
$
$
$
$
$
$
$
$
$
76
December 31, 2024
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2024
2023
2022
2021
2020
Prior
Years
Total
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
$
$
$
$
$
$
$
$
$
77
December 31, 2024
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2024
2023
2022
2021
2020
Prior
Years
Total
Popular, Inc.
Consumer:
Credit cards
Pass
$
$
$
$
$
$
$
$
$
Substandard
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.
$
$
$
$
$
$
$
$
$
78
Note 9 – Mortgage banking activities
Income from mortgage banking activities includes mortgage servicing fees earned in connection with administering residential
mortgage loans and valuation adjustments on mortgage servicing rights. It also includes gain on sales and securitizations of
residential mortgage loans, losses on repurchased loans, including interest advances, and trading gains and losses on derivative
contracts used to hedge the Corporation’s securitization activities. In addition, fair value valuation adjustments to residential
mortgage loans held for sale, if any, are recorded as part of the mortgage banking activities.
The following table presents the components of mortgage banking activities:
Quarters ended June 30,
Six months ended June 30,
(In thousands)
2025
2024
2025
2024
Mortgage servicing fees, net of fair value adjustments:
Mortgage servicing fees
$
$
$
$
Mortgage servicing rights fair value adjustments
(1,954 )
(1,945 )
(5,524 )
(5,384 )
Total mortgage servicing fees, net of fair value adjustments
Net (loss) gain on sale of loans, including valuation on loans held-for-sale
(37 )
Trading account (loss) profit:
Unrealized (losses) gains on outstanding derivative positions
(8 )
(95 )
Realized (losses) gains on closed derivative positions
(10 )
(9 )
Total trading account (loss) profit
(18 )
(104 )
Losses on repurchased loans, including interest advances
(31 )
(1 )
(47 )
(131 )
Total mortgage banking activities
$
$
$
$
79
Note 10 – Transfers of financial assets and mortgage servicing assets
The Corporation typically transfers conforming residential mortgage loans in conjunction with GNMA, FNMA and FHLMC
securitization transactions whereby the loans are exchanged for cash or securities and servicing rights. As seller, the Corporation
has made certain representations and warranties with respect to the originally transferred loans and, in the past, has sold certain
loans with credit recourse to a government-sponsored entity, namely FNMA. Refer to Note 19 to the Consolidated Financial
Statements for a description of such arrangements.
because they did not contain any credit recourse arrangements.
The following tables present the initial fair value of the assets obtained as proceeds from residential mortgage loans securitized
during the quarters and six months ended June 30, 2025 and 2024:
Proceeds Obtained During the Quarter Ended June 30, 2025
(In thousands)
Level 1
Level 2
Level 3
Initial Fair Value
Assets
Trading account debt securities:
Mortgage-backed securities - GNMA
$
$
$
$
Mortgage-backed securities - FNMA
Total trading account debt securities
$
$
$
$
Mortgage servicing rights
$
$
$
$
Total
$
$
$
$
Proceeds Obtained During the Six months Ended June 30, 2025
(In thousands)
Level 1
Level 2
Level 3
Initial Fair Value
Assets
Trading account debt securities:
Mortgage-backed securities - GNMA
$
$
$
$
Mortgage-backed securities - FNMA
Total trading account debt securities
$
$
$
$
Mortgage servicing rights
$
$
$
$
Total
$
$
$
$
Proceeds Obtained During the Quarter Ended June 30, 2024
(In thousands)
Level 1
Level 2
Level 3
Initial Fair Value
Assets
Trading account debt securities:
Mortgage-backed securities - FNMA
$
$
$
$
Total trading account debt securities
$
$
$
$
Mortgage servicing rights
$
$
$
$
Total
$
$
$
$
80
Proceeds Obtained During the Six months Ended June 30, 2024
(In thousands)
Level 1
Level 2
Level 3
Initial Fair Value
Assets
Trading account debt securities:
Mortgage-backed securities - GNMA
$
$
$
$
Mortgage-backed securities - FNMA
Total trading account debt securities
$
$
$
$
Mortgage servicing rights
$
$
$
$
Total
$
$
$
$
During the six months ended June 30, 2025, the Corporation retained servicing rights on whole loan sales involving $
principal balance outstanding (June 30, 2024 - $
million). All loan sales performed during the six months ended June 30, 2025 and 2024 were without credit recourse agreements.
The Corporation recognizes as assets the rights to service loans for others, whether these rights are purchased or result from asset
transfers such as sales and securitizations. These mortgage servicing rights (“MSRs”) are measured at fair value.
The Corporation uses a discounted cash flow model to estimate the fair value of MSRs. The discounted cash flow model
incorporates assumptions that market participants would use in estimating future net servicing income, including estimates of
prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, prepayment and late
fees, among other considerations. Prepayment speeds are adjusted for the loans’ characteristics and portfolio behavior.
The following table presents the changes in MSRs measured using the fair value method for the six months ended June 30, 2025
and 2024.
81
Residential MSRs
(In thousands)
June 30, 2025
June 30, 2024
Fair value at beginning of period
$
$
Additions
Changes due to payments on loans
(4,326 )
(4,435 )
Reduction due to loan repurchases
(221 )
(247 )
Changes in fair value due to changes in valuation model inputs or assumptions
(977 )
(702 )
Fair value at end of period
$
$
[1] Represents changes due to collection / realization of expected cash flows over time.
[2] At June 30, 2025, PB had MSRs amounting to $
Residential mortgage loans serviced for others were $
Net mortgage servicing fees, a component of mortgage banking activities in the Consolidated Statements of Operations, include the
changes from period to period in the fair value of the MSRs, including changes due to collection / realization of expected cash flows.
The banking subsidiaries receive servicing fees based on a percentage of the outstanding loan balance. These servicing fees are
credited to income when they are collected. At June 30, 2025, those weighted average mortgage servicing fees were
% (June
30, 2024 -
%). Under these servicing agreements, the banking subsidiaries do not generally earn significant prepayment penalty
fees on the underlying loans serviced.
The section below includes information on assumptions used in the valuation model of the MSRs, originated and purchased. Key
economic assumptions used in measuring the servicing rights derived from loans securitized or sold by the Corporation during the
quarters and six months ended June 30, 2025 and 2024 were as follows:
Quarters ended
Six months ended
June 30, 2025
June 30, 2024
June 30, 2025
June 30, 2024
BPPR
PB
BPPR
PB
BPPR
PB
BPPR
PB
Prepayment speed
%
%
%
%
%
%
%
%
Weighted average life (in years)
Discount rate (annual rate)
%
%
%
%
%
%
%
%
Key economic assumptions used to estimate the fair value of MSRs derived from sales and securitizations of mortgage loans
performed by the banking subsidiaries and servicing rights purchased from other financial institutions, and the sensitivity to
immediate changes in those assumptions, were as follows as of the end of the periods reported:
82
Originated MSRs
Purchased MSRs
June 30,
December 31,
June 30,
December 31,
(In thousands)
2025
2024
2025
2024
Fair value of servicing rights
$
$
$
$
Weighted average life (in years)
Weighted average prepayment speed (annual rate)
%
%
%
%
Impact on fair value of 10% adverse change
$
(658 )
$
(667 )
$
(1,346 )
$
(1,448 )
Impact on fair value of 20% adverse change
$
(1,289 )
$
(1,308 )
$
(2,641 )
$
(2,840 )
Weighted average discount rate (annual rate)
%
%
%
%
Impact on fair value of 10% adverse change
$
(1,245 )
$
(1,267 )
$
(2,496 )
$
(2,689 )
Impact on fair value of 20% adverse change
$
(2,410 )
$
(2,451 )
$
(4,837 )
$
(5,211 )
At June 30, 2025, the Corporation serviced $
(December 31, 2024 - $
the Corporation’s liability of estimated losses related to loans serviced with credit recourse.
During the six months ended June 30, 2025, the Corporation repurchased $
loans from its GNMA servicing portfolio. The determination to repurchase these loans was based on the economic benefits of the
transaction, which results in a reduction of the servicing costs for these severely delinquent loans, mainly related to principal and
interest advances. The risk associated with the loans is reduced due to their guaranteed nature. The Corporation may place these
loans under modification programs offered by FHA, VA or United States Department of Agriculture (USDA) or other loss mitigation
programs offered by the Corporation, and once brought back to current status, these may be either retained in portfolio or re-sold in
the secondary market.
83
Note 11 – Other real estate owned
The following tables present the activity related to Other Real Estate Owned (“OREO”), for the quarters and six months ended June
30, 2025 and 2024.
For the quarter ended June 30, 2025
OREO
OREO
(In thousands)
Commercial/Construction
Mortgage
Total
Balance at beginning of period
$
$
$
Write-downs in value
(835 )
(516 )
(1,351 )
Additions
Sales
(693 )
(12,145 )
(12,838 )
Other adjustments
(21 )
(21 )
Ending balance
$
$
$
For the quarter ended June 30, 2024
OREO
OREO
(In thousands)
Commercial/Construction
Mortgage
Total
Balance at beginning of period
$
$
$
Write-downs in value
(1,039 )
(427 )
(1,466 )
Additions
Sales
(6,011 )
(15,502 )
(21,513 )
Ending balance
$
$
$
For the six months ended June 30, 2025
OREO
OREO
(In thousands)
Commercial/Construction
Mortgage
Total
Balance at beginning of period
$
$
$
Write-downs in value
(864 )
(1,715 )
(2,579 )
Additions
Sales
(2,234 )
(23,374 )
(25,608 )
Other adjustments
(223 )
(223 )
Ending balance
$
$
$
For the six months ended June 30, 2024
OREO
OREO
(In thousands)
Commercial/Construction
Mortgage
Total
Balance at beginning of period
$
$
$
Write-downs in value
(1,064 )
(711 )
(1,775 )
Additions
Sales
(6,557 )
(32,436 )
(38,993 )
Other adjustments
(65 )
(65 )
Ending balance
$
$
$
84
Note 12 − Other assets
The caption of other assets in the Consolidated Statements of Financial Condition consists of the following major categories:
(In thousands)
June 30, 2025
December 31, 2024
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
Receivables from investments maturities
Principal, interest and escrow servicing advances
Guaranteed mortgage loan claims receivable
Operating ROU assets (Note 27)
Finance ROU assets (Note 27)
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:
Gross Carrying
Accumulated
Net Carrying
(In thousands)
Amount
Amortization
Value
June 30, 2025
Software development costs
$
$
$
Software license costs
Cloud computing arrangements
Total Capitalized software costs [1] [2]
$
$
$
December 31, 2024
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.
Total amortization expense for all capitalized software and hosting arrangement cost, reflected as part of technology and software
expenses in the consolidated statement of operations, is as follows:
85
Quarters ended June 30,
Six months ended June 30,
(In thousands)
2025
2024
2025
2024
Software development and license costs
$
$
$
$
Cloud computing arrangements
Total amortization expense
$
$
$
$
86
Note 13 – Goodwill and other intangible assets
Goodwill
There were
The following tables present the gross amount of goodwill and accumulated impairment losses by reportable segment:
June 30, 2025
Balance at
Balance at
June 30,
Accumulated
June 30,
2025
impairment
2025
(In thousands)
losses
Banco Popular de Puerto Rico
$
$
$
Popular U.S.
Total Popular, Inc.
$
$
$
December 31, 2024
December 31,
Accumulated
December 31,
2024
impairment
2024
(In thousands)
losses
Banco Popular de Puerto Rico
$
$
$
Popular U.S.
Total Popular, Inc.
$
$
$
Other Intangible Assets
The following table reflects the components of other intangible assets subject to amortization:
Gross Carrying
Accumulated
Net Carrying
(In thousands)
Amount
Amortization
Value
June 30, 2025
Core deposits
$
$
$
Other customer relationships
Total other intangible assets
$
$
$
December 31, 2024
Core deposits
$
$
$
Other customer relationships
Total other intangible assets
$
$
$
During the quarter ended June 30, 2025, the Corporation recognized $
assets with definite useful lives (June 30, 2024 - $
recognized $
The following table presents the estimated amortization of the intangible assets with definite useful lives for each of the following
periods:
87
(In thousands)
Remaining 2025
$
Year 2026
Year 2027
Year 2028
Year 2029
88
Note 14 – Deposits
Total deposits as of the end of the periods presented consisted of:
(In thousands)
June 30, 2025
December 31, 2024
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 interest-bearing deposits
$
$
Non- interest-bearing deposits
$
$
Total deposits
$
$
A summary of certificates of deposits by maturity at June 30, 2025 follows:
(In thousands)
2025
$
2026
2027
2028
2029
2030 and thereafter
Total certificates of deposit
$
At June 30, 2025, the Corporation had brokered deposits amounting to $
The aggregate amount of overdrafts in demand deposit accounts that were reclassified to loans was $
(December 31, 2024 - $
At June 30, 2025, Puerto Rico government deposits amounted to $
bearing accounts, which are indexed to short-term market rates and fluctuate in cost with changes in those rates, in accordance with
contractual terms.
89
Note 15 – Borrowings
Assets sold under agreements to repurchase
Assets sold under agreements to repurchase amounted to $
The Corporation’s repurchase transactions are overcollateralized 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.
Repurchase agreements accounted for as secured borrowings
June 30, 2025
December 31, 2024
Repurchase
Repurchase
(In thousands)
U.S. Treasury securities
Within 30 days
$
$
After 30 to 90 days
Total U.S. Treasury securities
Mortgage-backed securities
Total mortgage-backed 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 June 30, 2025 and December 31, 2024, other short-term borrowings consisted of $
FHLB Advances.
90
Notes Payable
The following table presents the composition of notes payable at June 30, 2025 and December 31, 2024.
(In thousands)
June 30, 2025
December 31, 2024
Advances with the FHLB with maturities ranging from
fixed rates ranging from
% to
%
$
$
Unsecured senior debt securities maturing on
%, net of debt issuance costs of $
Junior subordinated deferrable interest debentures (related to trust preferred securities) maturing on
% to
%, net of debt issuance costs of $
Total notes payable
$
$
Note: Refer to the 2024 Form 10-K for rates information at December 31, 2024.
A breakdown of borrowings by contractual maturities at June 30, 2025 is included in the table below.
Assets sold under
Short-term
(In thousands)
agreements to
repurchase
borrowings
Notes payable
Total
2025
$
$
$
$
2026
2028
2029
Later years
Total borrowings
$
$
$
$
At June 30, 2025 and December 31, 2024, the Corporation had FHLB borrowing facilities whereby the Corporation could borrow up
to $
31, 2024, the Corporation had placed $
secure deposits. The FHLB borrowing facilities are collateralized with securities and loans held-in-portfolio, and do not have
restrictive covenants or callable features.
Also, at June 30, 2025, the Corporation had borrowing facilities at the discount window of the Federal Reserve Bank of New York
amounting to $
The facilities are a collateralized source of credit that is highly dependable even under difficult market conditions.
91
Note 16 − Other liabilities
The caption of other liabilities in the Consolidated Statements of Financial Condition consists of the following major categories:
(In thousands)
June 30, 2025
December 31, 2024
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 (Note 27)
Finance lease liabilities (Note 27)
Pension benefit obligation
Postretirement benefit obligation
Others
Total other liabilities
$
$
92
Note 17 – Stockholders’ equity
As of June 30, 2025, stockholders’ equity totaled $
cash dividends of $
) per common share amounting to $
of $
.
During the quarter ended June 30, 2025, the Corporation completed the repurchase of
$
the common stock repurchase program of up to $
On July 16, 2025, the Corporation announced the following actions as part of its capital plan: (i) an increase in its quarterly common
stock dividend from $
approval by its Board of Directors, and (ii) a new common stock repurchase program of up to $
93
Note 18 – Other comprehensive income
The following table presents changes in accumulated other comprehensive income by component for the quarters and six months
ended June 30, 2025 and 2024.
Changes in Accumulated Other Comprehensive Loss by Component [1]
Quarters ended
Six months ended
June 30,
June 30,
(In thousands)
2025
2024
2025
2024
Foreign currency translation
Beginning Balance
$
(78,011 )
$
(68,548 )
$
(71,365 )
$
(64,528 )
Other comprehensive income (loss)
(3,855 )
Net change
(3,855 )
Ending balance
$
(70,512 )
$
(68,383 )
$
(70,511 )
$
(68,383 )
Adjustment of pension and
postretirement benefit plans
Beginning Balance
$
(93,271 )
$
(115,632 )
$
(94,692 )
$
(117,894 )
Amounts reclassified from accumulated other
comprehensive loss for amortization of net losses
Net change
Ending balance
$
(91,851 )
$
(113,371 )
$
(91,851 )
$
(113,372 )
Unrealized net holding losses
on debt securities
Beginning Balance
$
(1,318,705 )
$
(1,749,006 )
$
(1,495,183 )
$
(1,713,109 )
Other comprehensive income (loss)
(54,163 )
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
$
(1,233,294 )
$
(1,696,528 )
$
(1,233,295 )
$
(1,696,527 )
Total
$
(1,395,657 )
$
(1,878,282 )
$
(1,395,657 )
$
(1,878,282 )
[1]
All amounts presented are net of tax.
94
The following table presents the amounts reclassified out of each component of accumulated other comprehensive income during
the quarters and six months ended June 30, 2025 and 2024.
Reclassifications Out of Accumulated Other Comprehensive Loss
Quarters ended
Six months ended
Affected Line Item in the
June 30,
June 30,
(In thousands)
Consolidated Statements of Operations
2025
2024
2025
2024
Adjustment of pension and postretirement benefit plans
Amortization of net losses
Other operating expenses
$
(2,272 )
$
(3,618 )
$
(4,545 )
$
(7,236 )
Total before tax
(2,272 )
(3,618 )
(4,545 )
(7,236 )
Income tax benefit
Total net of tax
$
(1,420 )
$
(2,261 )
$
(2,841 )
$
(4,522 )
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
$
(46,242 )
$
(44,421 )
$
(91,552 )
$
(88,430 )
Total before tax
(46,242 )
(44,421 )
(91,552 )
(88,430 )
Income tax expense
Total net of tax
$
(36,994 )
$
(35,537 )
$
(73,242 )
$
(70,745 )
Total reclassification adjustments, net of tax
$
(38,414 )
$
(37,798 )
$
(76,083 )
$
(75,267 )
95
Note 19 – 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 June 30, 2025, the Corporation serviced $
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
six months ended June 30, 2025, the Corporation repurchased $
balance in mortgage loans subject to the credit recourse provisions (June 30, 2024
-
$
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 June 30, 2025, the Corporation’s liability established to cover the estimated
credit loss exposure related to loans sold or serviced with credit recourse amounted to $
The following table shows the changes in the Corporation’s liability of estimated losses related to loans serviced with credit recourse
provisions during the quarters and six months ended June 30, 2025 and 2024.
Quarters ended June 30,
Six months ended June 30,
(In thousands)
2025
2024
2025
2024
Balance as of beginning of period
$
$
$
$
Provision (benefit) for recourse liability
(205 )
(204 )
(375 )
Net charge-offs
(21 )
(91 )
(65 )
(193 )
Balance as of end of period
$
$
$
$
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 June 30, 2025, the
Corporation serviced $
2024 - $
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 June 30,
2025, the outstanding balance of funds advanced by the Corporation under such mortgage loan servicing agreements was $
million (December 31, 2024 - $
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.
96
Popular, Inc. Holding Company (“PIHC”) fully and unconditionally guarantees certain borrowing obligations issued by certain of its
% owned consolidated subsidiaries amounting to $
at both June 30, 2025 and December 31, 2024, PIHC fully and unconditionally guaranteed on a subordinated basis $
capital 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 2024 Form 10-K for further information on
the trust preferred securities.
97
Note 20 – 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 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.
Financial instruments with off-balance sheet credit risk, whose contract amounts represent potential credit risk as of the end of the
periods presented were as follows:
(In thousands)
June 30, 2025
December 31, 2024
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 June 30, 2025 and December 31, 2024, the Corporation maintained a reserve of $
potential losses associated with unfunded loan commitments related to commercial and construction lines of credit.
Other commitments
At June 30, 2025 and December 31, 2024, the Corporation also maintained other non-credit commitments for $
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 32 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 June 30, 2025, the Corporation’s direct exposure to the Puerto Rico government and its instrumentalities and municipalities
totaled $
Corporation’s exposure at June 30, 2025 included up to $
exposure, none of which was outstanding. Of the amount outstanding, $
($
31, 2024 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 June 30, 2025, approximately
% of the
98
Corporation’s exposure to municipal loans and securities was concentrated in the municipalities of San Juan, Guaynabo, Carolina
and Caguas.
The following table details the loans and investments representing the Corporation’s direct exposure to the Puerto Rico government
according to their maturities as of June 30, 2025
:
(In thousands)
Investment
Portfolio
Loans
Total Outstanding
Total Exposure
Central Government
Within 1 year
$
$
$
$
After 10 years
Total Central Government
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 June 30, 2025, the Corporation had $
entities but for which the principal source of repayment is non-governmental ($
$
instrumentality that has been designated as a covered entity under PROMESA (December 31, 2024 - $
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 June 30, 2025, $
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, 2024 - $
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, $
Government or its agencies at June 30, 2025 (compared to $
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 Note 5 and 6 to the Consolidated Financial
Statements.
At June 30, 2025, the Corporation had operations in the United States Virgin Islands (the “USVI”) and had $
exposure to USVI government entities (December 31, 2024 - $
economic challenges that could adversely affect the ability of its public corporations and instrumentalities to service their outstanding
debt obligations.
99
At June 30, 2025, the Corporation had operations in the British Virgin Islands (“BVI”) and it had a loan portfolio amounting to $
million comprised of various retail and commercial clients, compared to a loan portfolio of $
June 30, 2025, the Corporation had
FDIC Special Assessment
On November 16, 2023, the Federal Deposit Insurance Corporation (“FDIC”) imposed a special assessment (the “FDIC Special
Assessment”) amount to recover the losses to the deposit insurance fund resulting from the FDIC’s funds used, in March 2023, in
connection with the systemic risk exception, to the least-cost resolution test, under the Federal Deposit Insurance Act to manage the
receiverships of several failed banks. In connection with this assessment, the Corporation accrued $
tax, in the fourth quarter of 2023, representing the full amount of the assessment.
During the first quarter of 2024, the Corporation recorded an additional expense of $
FDIC's higher loss estimate communicated by the FDIC. The special assessment amount and collection period may change as the
estimated loss is periodically adjusted or if the total amount collected varies.
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 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 $
June 30, 2025. 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.
100
Note 21 – Non-consolidated variable interest entities
The Corporation is involved with
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 June 30, 2025
.
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 Corporation’s 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 23 to the Consolidated Financial Statements for additional
information on the debt securities outstanding at June 30, 2025 and December 31, 2024, which are classified as available-for-sale
and trading securities in the Corporation’s 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.
The following table presents the carrying amount and classification of the assets related to the Corporation’s variable interests in
non-consolidated VIEs and the maximum exposure to loss as a result of the Corporation’s involvement as servicer of GNMA and
FNMA loans at June 30, 2025 and December 31, 2024.
101
(In thousands)
June 30, 2025
December 31, 2024
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 $
The Corporation determined that the maximum exposure to loss includes the fair value of the MSRs and the assumption that the
servicing advances at June 30, 2025 and December 31, 2024, 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 June 30, 2025.
102
Note 22 – Related party transactions
Centro Financiero BHD, S.A.
At June 30, 2025, the Corporation had a
% equity interest in Centro Financiero BHD, S.A. (“BHD”), one of the largest banking
and financial services groups in the Dominican Republic. During the six months ended June 30, 2025, the Corporation recorded
$
2024 - $
) million recorded through Other Comprehensive Income (June 30, 2024 - ($
) million) related
to foreign currency translation adjustments and changes in the fair value of available for sale securities. At June 30, 2025, the
investment in BHD had a carrying amount of $
million in cash dividend distributions during the six months ended June 30, 2025 (June 30, 2024 - $
103
Note 23 – Fair value measurement
ASC Subtopic 820-10 “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs to
valuation 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 judgements 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, 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 2024 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
The following fair value hierarchy tables present information about the Corporation’s assets and liabilities measured at fair value on
a recurring basis at June 30, 2025 and December 31, 2024:
104
At June 30, 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
$
$
(23,349 )
$
$
$
(23,349 )
Total liabilities measured at fair value on a
recurring basis
$
$
(23,349 )
$
$
$
(23,349 )
105
At December 31, 2024
(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
$
$
(22,832 )
$
$
$
(22,832 )
Total liabilities measured at fair value on a
recurring basis
$
$
(22,832 )
$
$
$
(22,832 )
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.
The following tables summarize the difference between the aggregate fair value and the aggregate unpaid principal balance for
mortgage loans originated as held-for-sale measured at fair value as of June 30, 2025 and December 31, 2024.
(In thousands)
June 30, 2025
Aggregate Unpaid
Fair Value
Principal Balance
Difference
Loans held for sale
$
$
$
(In thousands)
December 31, 2024
Aggregate Unpaid
Fair Value
Principal Balance
Difference
Loans held for sale
$
$
$
(13 )
106
The fair value information included in the following tables is not as of period end, but as of the date that the fair value measurement
was recorded during the six months ended June 30, 2025 and 2024 and excludes nonrecurring fair value measurements of assets
no longer outstanding as of the reporting date.
Six months ended June 30, 2025
(In thousands)
Level 1
Level 2
Level 3
Total
NONRECURRING FAIR VALUE MEASUREMENTS
Assets
Write-downs
Loans
[1]
$
$
$
$
$
(91 )
Other real estate owned
[2]
(1,573 )
Other foreclosed assets
[2]
(46 )
Total assets measured at fair value on a nonrecurring basis
$
$
$
$
$
(1,710 )
[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] 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.
Six months ended June 30, 2024
(In thousands)
Level 1
Level 2
Level 3
Total
NONRECURRING FAIR VALUE MEASUREMENTS
Assets
Write-downs
Loans
[1]
$
$
$
$
$
(329 )
Loans held-for-sale
[2]
(38 )
Other real estate owned
[3]
(1,602 )
Other foreclosed assets
[3]
(46 )
Total assets measured at fair value on a nonrecurring basis
$
$
$
$
$
(2,015 )
[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 a quarterly valuation on loans held-for-sale. Costs to sell are excluded from the reported fair value amount.
[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.
107
The following tables present the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarters
and six months ended June 30, 2025 and 2024.
Quarter ended June 30, 2025
MBS
Other
MBS
Other
classified
securities
classified
securities
as debt
classified as
as trading
classified
securities
account
as trading
Mortgage
available-
available-
account debt
servicing
Total
(In thousands)
for-sale
for-sale
securities
securities
rights
assets
Balance at March 31, 2025
$
$
$
$
$
$
Gains (losses) included in earnings
(5 )
(1,954 )
(1,959 )
Additions
Settlements
(25 )
(25 )
Balance at June 30, 2025
$
$
$
$
$
$
Changes in unrealized gains (losses) included in
earnings relating to assets still held at June 30,
2025
$
$
$
$
$
$
Six months ended June 30, 2025
MBS
Other
MBS
Other
classified
securities
classified
securities
as debt
classified as
as trading
classified
securities
account
as trading
Mortgage
available-
available-
account debt
servicing
Total
(In thousands)
for-sale
for-sale
securities
securities
rights
assets
Balance at January 1, 2025
$
$
$
$
$
$
Gains (losses) included in earnings
(11 )
(5,524 )
(5,535 )
Gains (losses) included in OCI
(2 )
(2 )
Additions
Settlements
(50 )
(50 )
Transfers out of Level 3
(1,500 )
(1,500 )
Balance at June 30, 2025
$
$
$
$
$
$
Changes in unrealized gains (losses) included in
earnings relating to assets still held at June 30,
2025
$
$
$
$
$
(977 )
$
(961 )
108
Quarter ended June 30, 2024
MBS
Other
Other
classified
securities
MBS
securities
as debt
classified as
classified
classified
securities
debt securities
as trading
as trading
Mortgage
available-
available-
account debt
account debt
servicing
Total
(In thousands)
for-sale
for-sale
securities
securities
rights
assets
Balance at March 31, 2024
$
$
$
$
$
$
Gains (losses) included in earnings
(8 )
(1,945 )
(1,953 )
Gains (losses) included in OCI
(1 )
(1 )
Additions
Settlements
(25 )
(25 )
Balance at June 30, 2024
$
$
$
$
$
$
Changes in unrealized gains (losses) included in
earnings relating to assets still held at June 30,
2024
$
$
$
$
$
$
Six months ended June 30, 2024
MBS
Other
Other
classified
securities
CMOs
securities
as debt
classified as
classified
MBS
classified
securities
debt securities
as trading
classified as
as trading
Mortgage
available-
available-
account debt
trading account
account debt
servicing
Total
(In thousands)
for-sale
for-sale
securities
securities
securities
rights
assets
Balance at January 1, 2024
$
$
$
$
$
$
$
Gains (losses) included in earnings
(500 )
(9 )
(5,384 )
(5,893 )
Additions
Settlements
(25 )
(5 )
(28 )
(58 )
Balance at June 30, 2024
$
$
$
$
$
$
$
Changes in unrealized gains (losses)
included in earnings relating to assets
still held at June 30, 2024
$
$
(500 )
$
$
$
$
(702 )
$
(1,190 )
109
Gains and losses (realized and unrealized) included in earnings for the quarters and six months ended June 30, 2025 and 2024 for
Level 3 assets and liabilities included in the previous tables are reported in the Consolidated Statement of Operations as follows:
Quarter ended June 30, 2025
Six months ended June 30, 2025
Changes in unrealized
Changes in unrealized
Total gains
gains (losses) relating to
Total gains
gains (losses) relating to
(losses) included
assets still held at
(losses) included
assets still held at
(In thousands)
in earnings
reporting date
in earnings
reporting date
Mortgage banking activities
$
(1,954 )
$
$
(5,524 )
$
(977 )
Trading account profit (loss)
(5 )
(11 )
Total
$
(1,959 )
$
$
(5,535 )
$
(961 )
Quarter ended June 30, 2024
Six months ended June 30, 2024
Changes in unrealized
Changes in unrealized
Total gains
gains (losses) relating to
Total gains
gains (losses) relating to
(losses) included
assets still held at
(losses) included
assets still held at
(In thousands)
in earnings
reporting date
in earnings
reporting date
Mortgage banking activities
$
(1,945 )
$
$
(5,384 )
$
(702 )
Trading account profit (loss)
(8 )
(9 )
Provision for credit losses
(500 )
(500 )
Total
$
(1,953 )
$
$
(5,893 )
$
(1,190 )
The following tables include quantitative information about significant unobservable inputs used to derive the fair value of Level 3
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 June 30, 2025 and 2024.
Fair value at
(In thousands)
2025
Valuation technique
Unobservable inputs
Weighted average (range) [1]
Other - trading
$
Discounted cash flow model
Weighted average life
Yield
.0%
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.
110
Fair value at
(In thousands)
2024
Valuation technique
Unobservable inputs
Weighted average (range) [1]
Other - trading
$
Discounted cash flow model
Weighted average life
Yield
.0%
Prepayment speed
%
Loans held-in-portfolio
$
[2]
External appraisal
Haircut applied on
external appraisals
.0%
[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.
111
Note 24 – 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 June 30, 2025 and December
31, 2024, 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.
The following tables present the carrying amount and estimated fair values of financial instruments with their corresponding level in
the fair 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.
112
June 30, 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
June 30, 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 23 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level.
[2]
Refer to Note 15 to the Consolidated Financial Statements for the composition of other short-term borrowings.
113
December 31, 2024
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, 2024
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 23 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level.
[2]
Refer to Note 15 to the Consolidated Financial Statements for the composition of other short-term borrowings.
Refer to Note 20 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 June 30, 2025 and December 31, 2024. 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.
114
Note 25 – Net income per common share
The following table sets forth the computation of net income per common share (“EPS”), basic and diluted, for the quarters and six
months ended June 30, 2025 and 2024:
Quarters ended June 30,
Six months ended June 30,
(In thousands, except per share information)
2025
2024
2025
2024
Net income
$
$
$
$
Preferred stock dividends
(353 )
(353 )
(706 )
(706 )
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 six months ended June 30, 2025 and 2024, 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, 2024. For a discussion of the calculation under the treasury stock method, refer to Note 30 of the Consolidated
Financial Statements included in the 2024 Form 10-K.
115
Note 26 – Revenue from contracts with customers
The following table presents the Corporation’s revenue streams from contracts with customers by reportable segment for the
quarters and six months ended June 30, 2025 and 2024.
Quarter ended June 30,
Six months ended June 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 $
Quarter ended June 30,
Six months ended June 30,
(In thousands)
2024
2024
BPPR
Popular U.S.
BPPR
Popular U.S.
Service charges on deposit accounts
$
$
$
$
Other service fees:
Debit card fees [2]
Insurance fees, excluding reinsurance
Credit card fees, excluding late fees and membership fees [2]
Sale and administration of investment products
Trust fees
Total revenue from contracts with customers [1]
$
$
$
$
[1]
The amounts include intersegment transactions of $
[2]
Effective in the third quarter of 2024, the Corporation reclassified certain interchange fees, which were previously included jointly with credit card fees
from common network activity, as debit card fees. For the quarter and six month period ended June 30, 2024, interchange fees of $
million were reclassified.
Revenue from contracts with customers is recognized when, or as, the performance obligations are satisfied by the Corporation by
transferring the promised services to the customers based on ASC 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 contracts with customers refer to Note 31 on the 2024 Form 10-K for a complete description of the nature and
timing of revenue streams from contracts with customers.
116
Note 27 – Leases
The Corporation enters in the ordinary course of business into operating and finance leases for land, buildings and equipment.
These contracts generally do not include purchase options or residual value guarantees. The remaining lease terms of
years considers options to extend the leases for up to
obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset.
The Corporation recognizes right-of-use assets (“ROU assets”) and lease liabilities related to operating and finance leases in its
Consolidated Statements of Financial Condition under the caption of other assets and other liabilities, respectively. Refer to Note 12
and Note 16 to the Consolidated Financial Statements, respectively, for information on the balances of these lease assets and
liabilities.
The Corporation uses the incremental borrowing rate for purposes of discounting lease payments for operating and finance leases,
since it does not have enough information to determine the rates implicit in the leases. The discount rates are based on fixed-rate
and fully amortizing borrowing facilities of its banking subsidiaries that are collateralized. For leases held by non-banking
subsidiaries, a credit spread is added to this rate based on financing transactions with a similar credit risk profile.
The following table presents the undiscounted cash flows of operating and finance leases for each of the following periods:
June 30, 2025
(In thousands)
Remaining
2025
2026
2027
2028
2029
Later
Years
Total Lease
Payments
Less: Imputed
Interest
Total
Operating Leases
$
$
$
$
$
$
$
$
(16,097 )
$
Finance Leases
(2,612 )
The following table presents the lease cost recognized by the Corporation in the Consolidated Statements of Operations as follows:
Quarters ended June 30,
Six months ended June 30,
(In thousands)
2025
2024
2025
2024
Finance lease cost:
Amortization of ROU assets
$
$
$
$
Interest on lease liabilities
Operating lease cost
Short-term lease cost
Variable lease cost
Sublease income
(20 )
(21 )
(40 )
(41 )
Total lease cost
[1]
$
$
$
$
[1]
Total lease cost is recognized as part of net occupancy expense.
117
The following table presents supplemental cash flow information and other related information related to operating and finance
leases.
Six months ended June 30, 2025
(Dollars in thousands)
2025
2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$
$
Operating cash flows from finance leases
Financing cash flows from finance leases
ROU assets obtained in exchange for new lease obligations:
Operating leases
$
$
Weighted-average remaining lease term:
Operating leases
years
years
Finance leases
years
years
Weighted-average discount rate:
Operating leases
%
%
Finance leases
%
%
118
Note 28 – Pension and postretirement benefits
The Corporation has a non-contributory defined benefit pension plan and supplementary pension benefit restoration plans for
regular employees of certain of its subsidiaries (the “Pension Plans”). The accrual of benefits under the Pension Plans is frozen to
all participants. The Corporation also provides certain postretirement health care benefits for retired employees of certain
subsidiaries (the “OPEB Plan”).
The components of net periodic cost for the Pension Plans and the OPEB Plan for the periods presented were as follows:
Pension Plans
OPEB Plan
Quarter ended June 30,
Quarter ended June 30,
(In thousands)
2025
2024
2025
2024
Personnel Cost:
$
$
$
$
Other operating expenses:
(8,069 )
(8,594 )
(1,177 )
(548 )
Total net periodic pension cost
$
$
$
$
Pension Plans
OPEB Plan
Six months ended June 30,
Six months ended June 30,
(In thousands)
2025
2024
2025
2024
Personnel Cost:
$
$
$
$
Other operating expenses:
(16,138 )
(17,188 )
(2,354 )
(1,096 )
Total net periodic pension cost
$
$
$
$
The Corporation paid the following contributions to the plans for the six months ended June 30, 2025 and expects to pay the
following contributions for the year ending December 31, 2025.
For the six months ended
For the year ending
(In thousands)
June 30, 2025
December 31, 2025
Pension Plans
$
$
OPEB Plan
$
$
119
Note 29 - 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.
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 will be based
on two metrics weighted equally: the Relative Total Shareholder Return (“TSR”) and the Absolute Return on Average Tangible
Common Equity (“ROATCE”). The TSR metric is a market condition under ASC 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
ROATCE metric is a performance condition under ASC 718. The fair value is determined based on the probability of achieving the
ROATCE goal as of each reporting period. The TSR and ROATCE metrics are equally weighted and work independently.
The following table summarizes the restricted stock and performance shares activity under the Incentive Plan for members of
management.
120
(Not in thousands)
Shares
Weighted-Average
Grant Date Fair
Value
Non-vested at December 31, 2023
$
Granted
Performance Shares Quantity Adjustment
(18,650 )
Vested
(267,873 )
Forfeited
(7,939 )
Non-vested at December 31, 2024
$
Granted
Performance Shares Quantity Adjustment
Vested
(277,721 )
Forfeited
(5,515 )
Non-vested at June 30, 2025
$
During the quarter ended June 30, 2025,
) were awarded to
management under the Incentive Plan. During the quarters ended June 30, 2025 and 2024,
to management under the Incentive Plan. During the six months ended June 30, 2025,
2024 –
) and
) were awarded to management under the Incentive Plan.
During the quarter ended June 30, 2025, the Corporation recognized $
incentive awards, with a tax benefit of $
ended June 30, 2025, the Corporation recognized $
awards, with a tax benefit of $
June 30, 2025, the fair market value of the restricted stock and performance shares vested was $
$
expense. During the quarter ended June 30, 2025, the Corporation recognized $
tax benefit of $
(0.9 )
(55 )
thousand). For the six months ended June 30, 2025, the Corporation recognized $
a tax benefit of $
cost related to non-vested restricted stock awards and performance shares to members of management at June 30, 2025 was $
million and is expected to be recognized over a weighted-average period of
The following table summarizes the restricted stock activity under the Incentive Plan for members of the Board of Directors:
(Not in thousands)
RSUs / Restricted stock
Weighted-Average Grant
Date Fair Value per Unit
Non-vested at December 31, 2023
$
Granted
Vested
(25,462 )
Forfeited
Non-vested at December 31, 2024
$
Granted
Vested
(2,937 )
Forfeited
Non-vested at June 30, 2025
$
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
121
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 June 30, 2025,
2024 -
these shares with a tax benefit of $
ended June 30, 2025, the Corporation
granted
shares, with a tax benefit of $
date of the RSUs vested during the six months ended June 30, 2025 for the Directors was $
122
Note 30 – Income taxes
The table below presents a reconciliation of the statutory income tax rate to the effective income tax rate:
Quarters ended
June 30, 2025
June 30, 2024
(In thousands)
Amount
% of pre-tax
income
Amount
% of pre-tax
income
Computed income tax expense at statutory rates
$
%
$
%
Net benefit of tax exempt income
(45,374 )
(17.6 )
(33,220 )
(15.2 )
Effect of income subject to preferential tax rate
(606 )
(0.2 )
Deferred tax asset valuation allowance
(235 )
(0.1 )
Difference in tax rates due to multiple jurisdictions
(2,282 )
(0.9 )
(4,456 )
(2.1 )
Other tax benefits
(4,500 )
(2.1 )
State and local taxes
Others
(5,189 )
(2.0 )
(2,449 )
(1.1 )
Income tax expense
$
%
$
%
Six months ended
June 30, 2025
June 30, 2024
(In thousands)
Amount
% of pre-tax
income
Amount
% of pre-tax
income
Computed income tax expense at statutory rates
$
%
$
%
Net benefit of tax exempt income
(85,329 )
(17.7 )
(61,979 )
(16.4 )
Effect of income subject to preferential tax rate
(1,519 )
(0.3 )
(148 )
Deferred tax asset valuation allowance
Difference in tax rates due to multiple jurisdictions
(5,257 )
(1.1 )
(5,129 )
(1.4 )
Other tax benefits
(4,500 )
(1.2 )
Tax on intercompany distributions
[1]
U.S., States, and local taxes
Others
(7,663 )
(1.6 )
(3,522 )
(0.9 )
Income tax expense
$
%
$
%
[1]
Includes $
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
June 30, 2025, and December 31, 2024, were as follows:
123
June 30, 2025
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
(2,702 )
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
$
$
$
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
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
Deferred loan origination fees/cost
(1,880 )
Loans acquired
Other temporary differences
Total gross deferred tax liabilities
Valuation allowance
Net deferred tax asset
$
$
$
124
The net deferred tax assets shown in the table above at June 30, 2025, is reflected in the Consolidated Statements of Financial
Condition as $
million in deferred tax liabilities in the “Other liabilities” caption (December 31, 2024 - $
tax assets or liabilities of individual tax-paying subsidiaries of the Corporation in their respective tax jurisdiction, Puerto Rico or the
United States.
At June 30, 2025, the net deferred tax assets of the U.S. operations amounted to $
$
basis the realization of the deferred tax asset by taxing jurisdiction. The U. S. operations sustained profitability for the last three
years and better results than projected for the period ended June 30, 2025. These historical financial results are objectively
verifiable positive evidence, evaluated together with the positive evidence of stable credit metrics, in combination with the length of
the expiration of the NOLs. On the other hand, the Corporation evaluated the negative evidence accumulated over the years,
including financial results lower than expectations and challenges to the economy due to inflationary pressures that could stem from
U. S. tariff policies and global geopolitical challenges, in addition to the economic effect of cuts in federal government spending that
could negatively impact U. S. operations’ achieving expected pre-tax income levels. As of June 30, 2025, after weighting all positive
and negative evidence, the Corporation concluded that it is more likely than not that $
the U.S. operations, comprised mainly of net operating losses, will be realized. The Corporation based this determination on its
estimated earnings available to realize the deferred tax assets for the remaining carryforward period, together with the historical
level of book income adjusted by permanent differences. Management will continue to monitor and review the U.S. operation’s
results, including recent earnings trends, the pre-tax earnings forecast, any new tax initiative, and other factors, including net income
versus forecast, targeted loan growth, net interest income margin, changes in deposit costs, allowance for credit losses, charge offs,
non-performing loans held-in-portfolio (“NPLs”) inflows and non-performing asset (“NPA”) balances. Significant changes in these
factors or sustainable continuance of financial improvement could impact the future realization of the deferred tax assets.
At June 30, 2025, the Corporation’s net deferred tax assets related to its Puerto Rico operations amounted to $
Corporation’s Puerto Rico Banking operation has a historical record of profitability. This is considered a strong piece of 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 in recent years. 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 $
The reconciliation of unrecognized tax benefits, excluding interest, was as follows:
(In millions)
2025
2024
Balance at January 1
$
$
Balance at March 31
$
$
Balance at June 30
$
$
At June 30, 2025, the total amount of accrued interest recognized in the statement of financial condition amounted to $
(December 31, 2024 - $
accrue for the payment of penalties. The Corporation’s policy is to report interest related to unrecognized tax benefits in income tax
expense, while the penalties, if any, are reported in other operating expenses in the Consolidated Statements of Operations.
After consideration of the effect on U.S. federal tax of unrecognized U.S. state tax benefits, the total amount of unrecognized tax
benefits that if recognized, would affect the Corporation’s effective tax rate, was $
$
125
The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for
current tax year positions, expiration of open income tax returns due to the statutes of limitation, changes in Management’s
judgment about the level of uncertainty, status of examinations, litigation and legislative activity and the addition or elimination of
uncertain tax positions. The Corporation does not anticipate a reduction in the total amount of unrecognized tax benefits within the
next 12 months.
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 June 30, 2025, the following years remain subject to examination in the U.S.
Federal jurisdiction: 2021 and thereafter; and in the Puerto Rico jurisdiction, 2018 and thereafter.
126
Note 31 – Supplemental disclosure on the consolidated statements of cash flows
Additional disclosures on cash flow information and non-cash activities for the six months ended June 30, 2025 and June 30, 2024
are listed in the following table:
(In thousands)
June 30, 2025
June 30, 2024
Non-cash activities:
$
$
[1]
[1]
Includes loans securitized into trading securities and subsequently sold before quarter end.
The following table provides a reconciliation of cash and due from banks, and restricted cash reported within the Consolidated
Statement of Financial Condition that sum to the total of the same such amounts shown in the Consolidated Statement of Cash
Flows.
(In thousands)
June 30, 2025
June 30, 2024
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.
127
Note 32 – Segment reporting
The Corporation’s corporate structure consists of
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.
The tables that follow present the results of operations and total assets by reportable segments:
128
2025
For the quarter ended June 30, 2025
Intersegment
(In thousands)
BPPR
Popular U.S.
Eliminations
Interest income
$
$
$
(1,041 )
Interest expense
(1,041 )
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
$
$
$
(120,633 )
For the quarter ended June 30, 2025
Reportable
(In thousands)
Segments
Corporate
Eliminations
Total Popular, Inc.
Interest income
$
$
$
(1,045 )
$
Interest expense
(1,045 )
Net interest income (expense)
(9,120 )
Provision for credit losses (benefit)
(43 )
Non-interest income
(736 )
Personnel costs
Professional fees
(254 )
Technology and software expenses
Processing and transactional services
Amortization of intangibles
Depreciation expense
Other operating expenses
[1]
(60,181 )
(527 )
Total operating expenses
(781 )
Income before income tax
Income tax expense
Net income
$
$
$
(26 )
$
Segment assets
$
$
$
(5,392,992 )
$
[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.
129
For the six months ended June 30, 2025
Intersegment
(In thousands)
BPPR
Popular U.S.
Eliminations
Interest income
$
$
$
(2,722 )
Interest expense
(2,722 )
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
$
$
$
(120,633 )
For the six months ended June 30, 2025
Reportable
Total
(In thousands)
Corporate
Eliminations
Popular, Inc.
Interest income
$
$
$
(2,182 )
$
Interest expense
(2,182 )
Net interest income (expense)
(18,357 )
Provision for credit losses (benefit)
(84 )
Non-interest income
(1,352 )
Personnel costs
Professional fees
(584 )
Technology and software expenses
Processing and transactional services
Amortization of intangibles
Depreciation expense
Other operating expenses
[1]
(116,583 )
(1,350 )
Total operating expenses
(1,934 )
Income before income tax
Income tax expense
Net income (loss)
$
$
(291 )
$
$
Segment assets
$
$
$
(5,392,992 )
$
[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.
130
2024
For the quarter ended June 30, 2024
Intersegment
(In thousands)
BPPR
Eliminations
Interest income
$
$
$
(2,622 )
Interest expense
(2,622 )
Net interest income
Provision for credit losses (benefit)
(3,563 )
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
$
$
$
(264,040 )
For the quarter ended June 30, 2024
Reportable
(In thousands)
Segments
Corporate
Eliminations
Total Popular, Inc.
Interest income
(3,798 )
Interest expense
(3,798 )
Net interest income (expense)
$
$
(6,284 )
$
$
Provision for credit losses (benefit)
(25 )
Non-interest income
(2,764 )
Personnel costs
Professional fees
(302 )
Technology and software expenses
Processing and transactional services
Amortization of intangibles
Depreciation expense
Other operating expenses
[1]
(54,854 )
(922 )
Total operating expenses
(1,224 )
Income before income tax
(1,540 )
Income tax expense (benefit)
(476 )
(594 )
Net income
$
$
$
(946 )
$
Segment assets
$
$
$
(5,471,702 )
$
[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.
131
For the six months ended June 30, 2024
Intersegment
(In thousands)
BPPR
Popular U.S.
Interest income
$
$
$
(5,909 )
Interest expense
(5,909 )
Net interest income
Provision for credit losses
Non-interest income
(56 )
Personnel costs
Professional fees
(56 )
Technology and software expenses
Processing and transactional services
Amortization of intangibles
Depreciation expense
Other operating expenses
[1]
Total operating expenses
(56 )
Income before income tax
Income tax expense
Net income
$
$
$
Segment assets
$
$
$
(264,040 )
For the six months ended June 30, 2024
Reportable
Total
(In thousands)
Corporate
Eliminations
Popular, Inc.
Interest income
$
$
$
(7,040 )
$
Interest expense
(7,040 )
Net interest income (expense)
(13,234 )
Provision for credit losses (benefit)
Non-interest income
(3,401 )
Personnel costs
Professional fees
(579 )
Technology and software expenses
Processing and transactional services
Amortization of intangibles
Depreciation expense
Other operating expenses
[1]
(104,339 )
(1,836 )
Total operating expenses
(2,415 )
Income before income tax
(986 )
Income tax expense (benefit)
(364 )
Net income
$
$
(21,625 )
$
(622 )
$
Segment assets
$
$
$
(5,471,702 )
$
[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.
132
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 six months ended June 30, 2025, BPPR participated in loans originated by PB totaling $
9 million (2024 - did
t
participate). Total assets for the BPPR segment related to its operations in the United States amounted to $
31, 2024 - $
real estate loans (December 31, 2024 - $
in unsecured personal loans (December 31, 2024 - $
generated $
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 $
The BPPR segment generated $
from its operations in the U.S. and British Virgin Islands.
Geographic Information
Quarter ended
Six months ended
(In thousands)
June 30, 2025
June 30, 2024
June 30, 2025
June 30, 2024
Revenues:
[1]
$
$
$
$
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)
June 30, 2025
December 31, 2024
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.
133
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,
mortgage, 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 32 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 2024 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 2024 Form 10-K and “Part II
- Item 1A” of this 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 Form 10-Q, readers should consider.
The Corporation’s common stock is traded on the NASDAQ Global Select Market under the symbol BPOP.
SIGNIFICANT EVENTS
Capital Actions
On July 16, 2025, the Corporation announced the following capital actions:
●
dividend payable in the fourth quarter of 2025, subject to the approval by the Corporation’s Board of Directors; and
●
This new common stock repurchase program is in addition to the $500 million common stock repurchase program announced by the
Corporation on July 24, 2024 (the “2024 Repurchase Program”).
The Corporation’s planned common stock repurchases may be executed in open market transactions, privately negotiated
transactions, block trades or any other manner determined by the Corporation. The timing, quantity and price of such repurchases
will be subject to various factors, including market conditions, the Corporation’s capital position and financial performance, the
capital impact of strategic initiatives and regulatory and tax considerations. The common stock repurchase program does not require
134
the Corporation to acquire a specific dollar amount or number of shares and may be modified, suspended or terminated at any time
without prior notice.
During the quarter and six months ended June 30, 2025, the Corporation repurchased 1,136,390 shares of common stock for
$112.0 million at an average price of $98.54 per share and 2,406,959 shares of common stock for $234.2 million at an average price
of $97.32 per share, respectively. As of June 30, 2025, the Corporation had repurchased a total of approximately 4.7 million shares
of common stock for $451.5 million as part of the 2024 Repurchase Program.
OVERVIEW
Financial highlights for the quarter ended June 30, 2025
The Corporation’s net income for the quarter ended June 30, 2025 amounted to $210.4 million, an increase of $32.6 million when
compared to a net income of $177.8 million for the quarter ended June 30, 2024. Higher net income was mainly driven by higher net
interest income, offset in part by an increase in operating expense and income tax expense.
Financial highlights for the quarter ended June 30, 2025 include:
●
30, 2024, driven by loan growth and higher deposits, higher volume of U.S. Treasuries with higher yields, and lower cost
of deposits, mainly P.R. public deposits and re-pricing at PB, partially offset by lower income from money market
securities. Net interest margin expanded by 27 bps to 3.49%. On a taxable equivalent basis, net interest margin expanded
by 37 basis points to 3.85% driven by tax-exempt investment securities at higher yields.
●
when compared to the quarter ended June 30, 2024, driven by additional reserves in the commercial loans portfolio,
specifically in Commercial Real Estate portfolio in the PB segment due to higher qualitative reserves and changes in the
macroeconomic scenario, partially offset by a lower provision in the BPPR segment due to lower net charge-offs and
improvements of credit quality in the commercial portfolio.
●
30, 2024, mainly driven by higher credit and debit card fee income, higher investment management fees, and a favorable
fair value adjustment of equity securities held for deferred benefit plans, partially offset by lower other operating income
mainly related to the daily rental car business sold during the fourth quarter of 2024.
●
the quarter ended June 30, 2024. The increase was driven mainly by higher personnel costs due to higher incentives,
partially offset by lower professional fees.
●
compared to an income tax expense of $40.5 million with an ETR of 18.5% for the quarter ended June 30, 2024.
●
2024. The increase of $3.1 billion is primarily due to higher balance in the available-for-sale (“AFS”) securities portfolio
and an increase across most loan portfolios, mainly in commercial, mortgage, and construction, partially offset by lower
balance in the held-to-maturity (“HTM”) investment securities, money market investments, and a decrease in other assets.
●
public deposits.
●
Corporation and its banking subsidiaries continue to be well capitalized. As of June 30, 2025, the Corporation’s tangible
book value per common share was $75.41, an increase of $7.25 from December 31, 2024. The Common Equity Tier 1
Capital ratio at June 30, 2025 was 15.91%, compared to 16.03% at December 31, 2024.
Refer to Table 1 for selected financial data for the quarters ended June 30, 2025 and June 30, 2024.
135
Table 1 - Financial Highlights
Financial Condition Highlights
Ending balances at
Average for the six months ended
(In thousands)
June 30, 2025
December 31,
2024
Variance
June 30,
2025
June 30,
2024
Variance
Money market investments
$
6,340,786
$
6,380,948
$
(40,162)
$
6,314,487
$
6,477,180
$
(162,693)
Investment securities
28,283,970
26,244,977
2,038,993
28,642,361
28,034,347
608,014
Loans
[1]
38,188,076
37,113,075
1,075,001
37,310,383
35,226,488
2,083,895
Earning assets
72,812,832
69,739,000
3,073,832
72,267,231
69,738,015
2,529,216
Total assets
76,065,090
73,045,383
3,019,707
75,391,749
72,800,664
2,591,085
Deposits
67,217,491
64,884,345
2,333,146
66,112,327
64,529,716
1,582,611
Borrowings
1,414,494
1,176,126
238,368
1,120,666
1,045,181
75,485
Total liabilities
70,111,072
67,432,317
2,678,755
68,224,476
66,549,458
1,675,018
Stockholders’ equity
5,954,018
5,613,066
340,952
7,167,273
6,251,206
916,067
Note: 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.
Operating Highlights
Quarters ended June 30,
Six months ended June 30,
(In thousands, except per share information)
2025
2024
Variance
2025
2024
Variance
Net interest income
$
631,549
$
568,312
$
63,237
$
1,237,146
$
1,119,056
$
118,090
Provision for credit losses
48,941
46,794
2,147
113,022
119,392
(6,370)
Non-interest income
168,477
166,306
2,171
320,538
330,124
(9,586)
Operating expenses
492,761
469,576
23,185
963,773
952,689
11,084
Income before income tax
258,324
218,248
40,076
480,889
377,099
103,790
Income tax expense
47,884
40,459
7,425
92,947
96,027
(3,080)
Net income
$
210,440
$
177,789
$
32,651
$
387,942
$
281,072
$
106,870
Net income applicable to common stock
$
210,087
$
177,436
$
32,651
$
387,236
$
280,366
$
106,870
Net income per common share – basic
$
3.09
$
2.47
$
0.62
$
5.64
$
3.90
$
1.74
Net income per common share – diluted
$
3.09
$
2.46
$
0.63
$
5.64
$
3.90
$
1.74
Dividends declared per common share
$
0.70
$
0.62
$
0.08
$
1.40
$
1.24
$
0.16
Quarters ended June 30,
Six months ended June 30,
Selected Statistical Information
2025
2024
2025
2024
Common Stock Data
$
110.21
88.43
$
110.21
88.43
87.31
73.94
87.31
73.94
Profitability Ratios
1.11
%
0.97
%
1.04
%
0.77
%
11.77
10.38
10.93
8.24
2.85
2.44
2.79
2.41
3.21
2.70
3.14
2.65
3.49
3.22
3.45
3.20
3.85
3.48
3.80
3.44
Capitalization Ratios
9.48
%
8.60
%
9.51
%
8.59
%
15.91
16.48
15.91
16.48
[2]
75.41
62.71
75.41
62.71
[2]
13.26
11.77
12.32
9.35
15.96
16.54
15.96
16.54
17.70
18.30
17.70
18.30
8.51
8.53
8.51
8.53
[1]
Includes loans held-for-sale.
[2]
Refer to Table 10 for reconciliation to GAAP financial measures.
Non-GAAP Financial Measures
This Form 10-Q contains financial information prepared under accounting principles generally accepted in the United States (“U.S.
136
GAAP”) and non-GAAP financial measures. Management uses non-GAAP financial measures when it is determined that these
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.
The following table presents the adjusted net income for the six months ended June 30, 2024. There were no non-GAAP
adjustments for the six months ended June 30, 2025.
Table 2 - Adjusted Net Income for the Six Months Ended June 30, 2024 (Non-GAAP)
(In thousands)
Income before
income tax
Income tax
expense
(benefit)
Total
U.S. GAAP Net income
$377,099
$96,027
$281,072
Non-GAAP Adjustments:
FDIC Special Assessment [1]
14,287
(5,234)
9,053
Adjustments related to intercompany distributions [2]
6,400
16,483
22,883
Adjusted net income (Non-GAAP)
$397,786
$84,778
$313,008
[1] Expense recorded during the first quarter of 2024 to increase the estimate recognized during the fourth quarter of 2023 related to the November 16,
2023 FDIC Special Assessment to recover the losses to the deposit insurance fund used by the FDIC in connection with the receiverships of several
failed banks. The special assessment amount and collection period may change if the estimated loss is periodically adjusted or if the total amount
collected varies.
[2] Income tax expense and other related expenses from prior periods related to withholding taxes on certain distributions from U.S. subsidiaries.
137
Net interest income on a taxable equivalent basis – Non-GAAP Financial Measure
Net interest income, on a taxable equivalent basis, is presented with its different components in Table s 3 and 4 for the quarter and
six months ended June 30, 2025, as compared with the same period in 2024, 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 3 and 4, 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. 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 10 provides a reconciliation of total stockholders’ equity to tangible common equity and total assets to tangible assets as of
June 30, 2025 and December 31, 2024.
138
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 2024 Form 10-K. Also, refer to Note 2 to the Consolidated Financial Statements included in the 2024 Form 10-K for a
summary of the Corporation’s significant accounting policies and to Note 3 to the Consolidated Financial Statements included in this
Form 10-Q for information on recently adopted accounting standard updates.
STATEMENT OF OPERATIONS ANALYSIS
NET INTEREST INCOME
The Corporation’s net interest income for the quarter ended June 30, 2025 was $631.5 million and increased $63.2 million,
compared to the same quarter in 2024. Higher net interest income was supported by an increase in average deposit balances and
loan growth. Net interest income on a taxable equivalent basis for the second quarter of 2025 was $697.2 million, an increase of
$82.4 million.
Net interest margin (“NIM”) for the quarter was 3.49%, an increase of 27 basis points when compared to the second quarter of 2024.
On a taxable equivalent basis, net interest margin for the second quarter of 2025 was 3.85% or 37 basis points higher than the
second quarter of 2024. NIM expansion was mainly attributed to lower deposit costs driven by the repricing of high-cost deposits
that are market-linked, such as P.R. public deposits, coupled with a higher volume of loans and higher yields of U.S. Treasuries.
Total cost of deposits decreased 32 basis points to 1.78%.
On a taxable equivalent basis, the main drivers of the increase for the second quarter of 2025 were:
●
deposits growth. The U.S. Treasuries yield increased 30 basis points when compared to the second quarter of 2024 as
reinvestment of maturing debt securities along with incremental balances are being reinvested at higher current rates;
●
commercial, construction, mortgage, auto and lease portfolios, resulting from origination activity. Higher yields from the
auto, lease and mortgage portfolios mitigated the impact of lower yields from the commercial and construction portfolios,
due to the impact of short-term market rates decline on adjustable-rate loans. Overall, the loan portfolio yield decreased
by two basis points to 7.50%; and
●
The cost of interest-bearing deposits decreased by 45 basis points, mainly due to the repricing of P.R. public deposits
which decreased by 93 basis points to 3.22% and a decrease in the cost of deposits in the PB segment;
partially offset by:
●
resulting from lower short-term market rates.
139
Table 3 - Analysis of Levels & Yields on a Taxable Equivalent Basis (Non-GAAP)
Quarter ended June 30,
Variance
Average Volume
Average Yields / Costs
Interest
Attributable to
2025
2024
Variance
2025
2024
2025
2024
Variance
Rate
Volume
(In millions)
(In thousands)
$
6,251
$
6,471
$
(220)
4.46
%
5.49
%
(1.03)
%
Money market
investments
$
69,532
$
88,316
$
(18,784)
$
(15,866)
$
(2,918)
28,809
28,943
(134)
3.29
3.01
0.28
Investment securities [1]
236,372
216,922
19,450
18,673
777
27
26
1
5.99
5.69
0.30
Trading securities
407
367
40
21
19
Total money market,
investment and
trading
35,087
35,440
(353)
3.50
3.47
0.03
securities
306,311
305,605
706
2,828
(2,122)
Loans:
18,676
17,707
969
6.73
6.86
(0.13)
Commercial
313,493
302,003
11,490
(4,831)
16,321
1,459
1,070
389
8.19
9.11
(0.92)
Construction
29,806
24,224
5,582
(2,558)
8,140
1,963
1,789
174
7.18
6.86
0.32
Leasing
35,249
30,697
4,552
1,467
3,085
8,339
7,817
522
5.89
5.66
0.23
Mortgage
122,873
110,673
12,200
4,632
7,568
3,211
3,192
19
14.00
13.97
0.03
Consumer
112,083
110,906
1,177
374
803
3,937
3,819
118
9.14
8.88
0.26
Auto
89,706
84,268
5,438
2,780
2,658
37,585
35,394
2,191
7.50
7.52
(0.02)
Total loans
703,210
662,771
40,439
1,864
38,575
$
72,672
$
70,834
$
1,838
5.57
%
5.49
%
0.08
%
Total earning assets
$
1,009,521
$
968,376
$
41,145
$
4,692
$
36,453
Interest bearing
deposits:
$
8,062
$
7,522
$
540
1.71
%
1.97
%
(0.26)
%
NOW and money
market
$
34,288
$
36,783
$
(2,495)
$
(4,611)
$
2,116
14,605
14,728
(123)
0.83
0.92
(0.09)
Savings
30,378
33,749
(3,371)
(2,862)
(509)
8,532
8,237
295
3.15
3.39
(0.24)
Time deposits
67,032
69,494
(2,462)
(4,857)
2,395
20,333
19,364
969
3.22
4.15
(0.93)
P.R. public deposits
163,360
199,913
(36,553)
(45,918)
9,365
51,532
49,851
1,681
2.29
2.74
(0.45)
Total interest bearing
deposits
295,058
339,939
(44,881)
(58,248)
13,367
14,825
15,176
(351)
Non-interest bearing
demand deposits
66,357
65,027
1,330
1.78
2.10
(0.32)
Total deposits
295,058
339,939
(44,881)
(58,248)
13,367
470
80
390
4.52
5.64
(1.12)
Short-term borrowings
5,300
1,126
4,174
(213)
4,387
Other medium and
832
978
(146)
5.79
5.16
0.63
long-term debt
11,965
12,530
(565)
181
(746)
Total interest bearing
52,834
50,909
1,925
2.36
2.79
(0.43)
liabilities (excluding
demand deposits)
312,323
353,595
(41,272)
(58,280)
17,008
Other sources of funds
5,013
4,749
264
$
72,672
$
70,834
$
1,838
1.72
%
2.01
%
(0.29)
%
Total source of funds
$
312,323
$
353,595
$
(41,272)
$
(58,280)
$
17,008
Net interest margin/
income on a taxable
equivalent basis (Non-
GAAP)
3.85
%
3.48
%
0.37
%
$
697,198
$
614,781
$
82,417
$
62,972
$
19,445
3.21
%
2.70
%
0.51
%
Taxable equivalent
adjustment
65,649
46,469
19,180
Net interest margin/
income non-taxable
equivalent basis (GAAP)
3.49
%
3.22
%
0.27
%
$
631,549
$
568,312
$
63,237
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.
140
The Corporation’s net interest income for the six-month period ended June 30, 2025 was $1.2 billion, or $118.1 million higher than
the same period in 2024. Taxable equivalent net interest income was $1.4 billion, an increase of $156.7 million when compared to
the same period in 2024. NIM was 3.45%, an increase of 25 basis points when compared to 3.20% in 2024. NIM, on a taxable
equivalent basis, for the six months ended June 30, 2025, was 3.80%, an increase of 36 basis points compared to the same period
of 2024.
The main drivers of the variances in net interest income on a taxable equivalent basis for the six-month period ended June 20, 2025
were:
●
volume by $640.0 million;
●
construction and mortgage, and higher yields in the mortgage, auto and leasing portfolios due to originations at higher
rates, partially offset by lower yields in commercial and construction portfolios due to adjustable-rate loans which were
impacted by the decline in index rates; and
●
lower cost by 90 basis points and deposit costs repricing in both banks;
partially offset by:
●
average balances due to loan growth and investments, mainly in U.S. Treasuries; and
●
Popular Bank.
141
Table 4 – Analysis of Levels & Yields on a Taxable Equivalent Basis from Continuing Operations (Non-GAAP)
Period ended June 30,
Variance
Average Volume
Average Yields / Costs
Interest
Attributable to
2025
2024
Variance
2025
2024
2025
2024
Variance
Rate
Volume
(In millions)
(In thousands)
$
6,314
$
6,477
$
(163)
4.46
%
5.49
%
(1.03)
%
Money market
investments
$
139,698
$
176,832
$
(37,134)
$
(32,791)
$
(4,343)
28,613
28,626
(13)
3.22
2.86
0.36
Investment securities
[1]
456,807
408,024
48,783
45,804
2,979
29
30
(1)
5.90
4.60
1.30
Trading securities
847
678
169
186
(17)
Total money market,
investment and
trading
34,956
35,133
(177)
3.45
3.35
0.10
securities
597,352
585,534
11,818
13,199
(1,381)
Loans:
18,585
17,660
925
6.72
6.85
(0.13)
Commercial
619,461
601,507
17,954
(13,059)
31,013
1,385
1,031
354
8.15
9.04
(0.89)
Construction
55,995
46,324
9,671
(4,994)
14,665
1,951
1,766
185
7.14
6.80
0.34
Leasing
69,693
60,051
9,642
3,129
6,513
8,254
7,770
484
5.86
5.64
0.22
Mortgage
241,789
219,216
22,573
8,609
13,964
3,207
3,208
(1)
14.02
13.94
0.08
Consumer
222,989
222,396
593
230
363
3,929
3,791
138
9.11
8.82
0.29
Auto
177,511
166,322
11,189
5,010
6,179
37,311
35,226
2,085
7.49
7.50
(0.01)
Total loans
1,387,438
1,315,816
71,622
(1,075)
72,697
$
72,267
$
70,359
$
1,908
5.54
%
5.43
%
0.11
%
Total earning assets
$
1,984,790
$
1,901,350
$
83,440
$
12,124
$
71,316
Interest bearing
deposits:
$
8,022
$
7,643
$
379
1.72
%
1.99
%
(0.27)
%
NOW and money
market
$
68,290
$
75,548
$
(7,258)
$
(9,978)
$
2,720
14,556
14,711
(155)
0.85
0.93
(0.08)
Savings
61,658
67,873
(6,215)
(5,274)
(941)
8,466
8,029
437
3.18
3.29
(0.11)
Time deposits
133,713
131,511
2,202
(5,555)
7,757
20,310
19,017
1,293
3.27
4.17
(0.90)
P.R. public deposits
329,260
394,503
(65,243)
(90,446)
25,203
51,354
49,400
1,954
2.33
2.73
(0.40)
Total interest bearing
deposits
592,921
669,435
(76,514)
(111,253)
34,739
14,758
15,129
(371)
Non-interest bearing
demand deposits
66,112
64,529
1,583
1.81
2.09
(0.28)
Total deposits
592,921
669,435
(76,514)
(111,253)
34,739
297
82
215
4.57
5.67
(1.10)
Short-term
borrowings
6,726
2,318
4,408
(404)
4,812
Other medium and
847
988
(141)
5.72
5.13
0.59
long-term debt
24,077
25,239
(1,162)
250
(1,412)
Total interest bearing
52,498
50,470
2,028
2.40
2.78
(0.38)
liabilities (excluding
demand deposits)
623,724
696,992
(73,268)
(111,407)
38,139
5,011
4,760
251
Other sources of
funds
$
72,267
$
70,359
$
1,908
1.74
%
1.99
%
(0.25)
%
Total source of funds
$
623,724
$
696,992
$
(73,268)
$
(111,407)
$
38,139
3.80
%
3.44
%
0.36
%
Net interest margin/
income on a taxable
equivalent basis
(Non-GAAP)
$
1,361,066
$
1,204,358
$
156,708
$
123,531
$
33,177
3.14
%
2.65
%
0.49
%
Net interest spread
Taxable equivalent
adjustment
123,920
85,302
38,618
3.45
%
3.20
%
0.25
%
Net interest margin/
income non-taxable
equivalent basis
(GAAP)
$
1,237,146
$
1,119,056
$
118,090
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.
142
Provision for Credit Losses - Loans Held-in-Portfolio and Unfunded Commitments
For the quarter ended June 30, 2025, the Corporation recorded a provision for credit losses related to loans held-in-portfolio and
unfunded commitments of $48.4 million, an increase of $2.1 million when compared to the same quarter of the previous year. The
provision for the loan portfolio was $49.5 million, an increase of $5.4 million, and the provision release related to unfunded
commitments was $1.1 million, a favorable variance of $3.2 million, mainly driven by lower unfunded commitments reserves at the
BPPR segment.
As discussed in Note 8 to the Consolidated Financial Statements, the Corporation estimates the ACL by weighting the outputs of
optimistic, baseline, and pessimistic scenarios. During the first quarter of 2025, in response to the economic uncertainty, the
Corporation increased the probability assigned to the pessimistic scenario making it equal to the baseline scenario. Subsequently, in
the second quarter of 2025, the probability assigned to the pessimistic scenario was moderately reduced based on the changes in
the economic outlook and a reassessment of uncertainty compared to the previous quarter. The net impact of these two events on
the ACL levels for the six months ended June 30, 2025 was $13.7 million in additional reserves. The probability weight for the
pessimistic scenario remains above the levels observed in 2024, given the ongoing economic uncertainty.
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 2024, were as follows:
●
same quarter in 2024, mainly driven by lower reserves for the commercial portfolio of $16.4 million due to improvements
in credit quality and lower net charge-offs, which offset the increase in the weight assigned to the pessimistic scenario for
the year 2025, as discussed above. The favorable variance was partially offset by higher reserves in the consumer
portfolio due to changes in credit quality mainly within the auto portfolio and changes in the macroeconomic scenarios.
●
increase of $10.8 million, mainly driven by higher qualitative reserves for the U.S. Commercial Real Estate portfolio and
changes in macroeconomic scenarios, when compared to the reserve release recorded for the same period in 2024 due
to improvement in credit ratings.
For the six months ended June 30, 2025, the provision for credit loss related to loans held-in-portfolio and unfunded commitments
amounted to $112.3 million, a decrease of $6.1 million, compared to the six months ended June 30, 2024. The provision for the loan
portfolio was $114.8 million, a decrease of $1.8 million, and the provision release related to unfunded commitments was $2.4
million, a decrease of $4.3 million, mainly driven by the reduction in unfunded commitment reserves within the U.S. construction
portfolio. The major drivers of the decrease in the provision for loan losses during the six months ended June 30, 2025 by business
segment when compared to the same period in 2024, were as follows:
●
charge-offs, mainly in commercial and consumer loans, and improvement in credit quality, mainly in the commercial
portfolio, partially offset by the increase in the probability weight assigned to the pessimistic scenario which generated an
additional reserve of $8.8 million.
●
increase of $7.1 million mainly due to credit quality changes and additional qualitative reserves established, mainly within
the commercial portfolio, and an increase of $4.9 million related to the increase in probability weight assigned to the
pessimistic scenario.
At June 30, 2025, the total allowance for credit losses for loans held-in-portfolio amounted to $769.5 million, compared to $746.0
million as of December 31, 2024. The ratio of the allowance for credit losses to loans held-in-portfolio was 2.02% at June 30, 2025,
compared to 2.01% at December 31, 2024. 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.
Non-Interest Income
143
Non-interest income amounted to $168.5 million for the second quarter of 2025, an increase of $2.2 million when compared with the
same quarter for the previous year. The variance was primarily due to:
●
higher volume of costumer transactions, and higher investment management fees by $1.2 million, due to higher assets
under management; and
●
in personnel cost of $1.5 million;
partially offset by:
●
from the sale of car rental units by $2.9 million, both due to the sale of the daily car rental business during the fourth
quarter of 2024, partially offset by $2.3 million of income related to the reimbursement of excess interest paid to the U.S.
Internal Revenue Service (“the IRS”) for late payment penalties related to tax withholdings on intercompany distributions
for the years 2014-2024 previously disclosed in 2024, and a $1.2 million cash distribution from the exit of a legacy equity
investment.
Non-interest income amounted to $320.5 million for the six months ended June 30, 2025, a decrease of $9.6 million when compared
to the same period of the previous year. The main factors that contributed to the variance were:
●
sale of car rental units by $6.3 million during the six months ended June 30, 2024 associated with the car rental business
sold in the fourth quarter of 2024, partially offset by $3.9 million income related to the reimbursement of interest paid from
the IRS, as discussed above;
partially offset by:
●
volume of transactions, and higher investment management fees by $2.8 million, due to higher assets under
management, partially offset by lower insurance fees by $4.1 million; and
●
commercial deposits.
144
Operating Expenses
Operating expenses amounted to $492.8 million for the quarter ended June 30, 2025, an increase of $23.2 million, when compared
with the same quarter of 2024. The variance in operating expenses was mainly driven by:
●
which is tied to the Corporation’s financial performance and $9.9 million in other performance-based incentives and stock-
based compensation, and higher salaries expense by $4.1 million due to a higher headcount and annual salary revisions;
●
acquisition and renewal of multiple technology licenses reflective of the continuous investment in technology and
transformation initiatives and an increase in network management services expense; and
●
partially offset by:
●
decrease, due to expense-recognition timing differences, in the cost of restricted stock granted to directors, and lower legal
fees;
●
and
●
the car rental business sold in 2024.
Operating expenses amounted to $963.8 million for the six months ended June 30, 2025, an increase of $11.1 million when
compared with the same period of 2024. Excluding the $6.4 million of interest accrued related to prior period tax withholdings and
the $14.3 million impact of the FDIC Special Assessment, total operating expenses for the six months ended June 30, 2025,
increased by $31.8 million, when compared with the same period of 2024. The main drivers of the increase were:
●
which is tied to the Corporation’s financial performance and $9.3 million in other performance-based incentives and stock-
based compensation, and higher salaries expenses by $5.7 million due to a higher headcount and annual salary revisions;
●
acquisition and renewal of multiple technology licenses reflective of the continuous investment in technology and
transformation initiatives and an increase in network management services expense; and
●
partially offset by:
●
on compliance and cyber security efforts, a decrease in IT professional services, and lower legal fees;
●
transaction; and
●
145
Table 5 - Operating Expenses
Quarters ended June 30,
Six months ended June 30,
(In thousands)
2025
2024
Variance
2025
2024
Variance
Personnel costs:
Salaries
$
132,752
$
128,634
$
4,118
$
263,702
$
258,018
$
5,684
Commissions, incentives, and other bonuses
40,551
30,626
9,925
78,537
69,237
9,300
Profit sharing
13,000
-
13,000
13,000
-
13,000
Pension, postretirement, and medical insurance
18,458
16,619
1,839
33,024
34,004
(980)
Other personnel costs, including payroll taxes
24,594
21,545
3,049
53,805
51,542
2,263
Total personnel costs
229,355
197,424
31,931
442,068
412,801
29,267
Net occupancy expenses
29,140
27,692
1,448
56,358
55,733
625
Equipment expenses
5,789
9,662
(3,873)
11,091
19,229
(8,138)
Other taxes
18,632
15,333
3,299
37,357
29,708
7,649
Professional fees
28,108
37,744
(9,636)
54,933
66,662
(11,729)
Technology and software expenses
84,696
79,752
4,944
168,364
159,214
9,150
Processing and transactional services:
Credit and debit cards
13,044
13,739
(695)
25,970
25,883
87
Other processing and transactional services
24,817
25,357
(540)
49,672
47,407
2,265
Total processing and transactional services
37,861
39,096
(1,235)
75,642
73,290
2,352
Communications
5,010
4,357
653
9,914
8,914
1,000
Business promotion:
Rewards and customer loyalty programs
18,047
16,406
1,641
34,412
30,462
3,950
Other business promotion
8,338
9,043
(705)
15,648
15,976
(328)
Total business promotion
26,385
25,449
936
50,060
46,438
3,622
Deposit insurance
9,407
10,581
(1,174)
19,442
34,468
(15,026)
Other real estate owned (OREO) income
(4,124)
(5,750)
1,626
(7,454)
(11,071)
3,617
Other operating expenses:
Operational losses
6,185
11,823
(5,638)
12,323
15,384
(3,061)
All other
15,932
15,679
253
32,693
40,390
(7,697)
Total other operating expenses
22,117
27,502
(5,385)
45,016
55,774
(10,758)
Amortization of intangibles
385
734
(349)
982
1,529
(547)
Total operating expenses
$
492,761
$
469,576
$
23,185
$
963,773
$
952,689
$
11,084
Income Taxes
For the quarter and six months ended June 30, 2025, the Corporation recorded an income tax expense of $47.9 million and $92.9
million with an effective tax rate (“ETR”) of 18.5% and 19.3%, respectively, compared to $40.5 million and $96.0 million with an ETR
of 18.5% and 25.5% for the respective periods of year 2024.
Higher income tax expense of $7.4 million for the second quarter, when compared to the same quarter of 2024, is mainly attributed
to higher income before tax, partially offset with higher net exempt income. For the six-month period ended June 30, 2025, the lower
income tax expense of $3.1 million reflects the impact of the tax withholding expense of $22.9 million recorded during the first
quarter of year 2024, in connection with intercompany distributions for years 2014-2024, as disclosed in Note 34 to the Consolidated
Financial Statements in the 2024 Form 10-K, and the benefit of $5.2 million related to the FDIC Special Assessment expense; this
was partially offset by the increase in income before tax. Excluding the impact of the withholding tax expense and the additional net
expense related to the FDIC Special Assessment in the first quarter of 2024, the ETR for the six-month period ended June 30, 2024,
would have been 21.3%.
At June 30, 2025, the Corporation had a net deferred tax asset amounting to $860.3 million, net of a valuation allowance of
$463.7million. The net deferred tax asset related to the U.S. operations was $242.2 million, net of a valuation allowance of $386.9
million.
Refer to Note 30 to the Consolidated Financial Statements for a reconciliation of the statutory income tax rate to the effective tax
rate and additional information on the income tax expense and deferred tax asset balances.
REPORTABLE SEGMENT RESULTS
The Corporation’s reportable segments for managerial reporting purposes consist of Banco Popular de Puerto Rico and Popular
U.S. A Corporate group has also been defined to support the reportable segments.
146
For a description of the Corporation’s reportable segments, including additional financial information and the underlying
management accounting process, refer to Note 32 to the Consolidated Financial Statements.
The corporate group reported a net income of $3.3 million for the quarter ended June 30, 2025, compared with a net income of $3.8
million for the same quarter of the previous year. For the six months ended June 30, 2025, the corporate group reported net loss of
$0.3 million, compared to a net loss of $21.6 million for the same period of the previous year. The higher loss in 2024 was mainly
attributed to the expense related to the $22.9 million adjustment recorded in the first quarter of 2024 to recognize the tax impact
associated with prior period intercompany distributions and the additional $6.5 million expense for the tax impact of intercompany
distributions paid during the first quarter of 2024. A positive adjustment of $3.9 million was recorded during the six months ended
June 30, 2025, resulting from reimbursements received from the U.S. Internal Revenue Service related to interest paid for these
intercompany distributions. There were no intercompany distributions between the U.S. subsidiaries and the bank holding
companies.
Highlights on the earnings results for the reportable segments are discussed below:
Banco Popular de Puerto Rico
The Banco Popular de Puerto Rico reportable segment’s net income amounted to $184.5 million for the quarter ended June 30,
2025, compared with a net income of $157.2 million for the same quarter of the previous year. The factors that contributed to the
variance in the financial results included the following:
●
mainly from the re-pricing of P.R. public funds, higher income from U.S. Treasury securities, mainly due to higher yields
and higher income from the loans portfolio driven by loan growth, partially offset by lower income from money market
investments reflecting the decline in rates. The net interest margin for the quarter ended June 30, 2025 was 3.68%, and
increase of 28 basis points, compared to 3.40% for the same quarter in the previous year. The increase in the margin was
mainly impacted by lower cost of deposits and higher yield from investment securities, as well as higher loan balances
which carry a higher yield, partially offset by lower rates on money market investments;
●
loans, due to improvements in credit quality and lower net charge-offs partially offset by a higher provision for the
consumer loan portfolios due to changes in credit quality, mainly within the auto portfolio, and changes in macroeconomic
scenarios;
●
the fourth quarter of 2024;
●
sharing expense accrual and other performance-related incentives, and higher technology expenses by $4.0 million, offset
by lower equipment expenses by $4.2 million mainly related to the daily car rental business sold in the fourth quarter of
2024; and
●
income and other tax credits recorded during the first quarter of 2025.
For the six months ended June 30, 2025, the BPPR segment recorded a net income of $350.4 million compared to a net income of
$278.5 million for the same period of the previous year. The factors that contributed to the variance in the financial results included
the following:
●
mainly from the re-pricing of P.R. public funds, higher income from investment securities and higher income from loans
due to portfolio growth, partially offset by lower income from money market investments reflecting the decline in rates and
lower balances. The net interest margin for the six months ended June 30, 2025 was 3.66% compared with the 3.36% for
147
the same period of the previous year. The increase in the margin was mainly impacted by
lower cost of deposits, higher
yield from investment securities and loan growth, partially offset by lower rates from money market investments;
●
portfolios due to lower net charge-offs and improvements in credit quality, partially offset by the increase in the probability
weight assigned to the pessimistic economic scenario;
●
lower insurance fees, partially offset by higher credit and debit card income, due to higher volume of transactions, higher
investment management fees and an increase in non-balance compensation fees in commercial deposits;
●
discussed above, higher regulatory examination fees, municipal license tax and higher technology expenses, partially
offset by lower equipment expenses related to the daily rental business sold and lower FDIC expense due to the FDIC
Special Assessment recorded in 2024; and
●
Popular U.S.
For the quarter ended June 30, 2025, the reportable segment of Popular U.S. reported a net income of $22.6 million, compared with
a net income of $17.7 million for the same quarter of the previous year. The factors that contributed to the variance in the financial
results included the following:
●
commercial and construction portfolios, and lower cost of deposits due to the repricing of most interest-bearing deposit
products, partially offset by lower income from money market investments due to average balances and lower yields
reflecting the decrease in short-term rates. The net interest margin for the quarter ended June 30, 2025 was 2.93%
compared to 2.60% for the same quarter in the previous year driven by lower cost of deposits;
●
to a benefit of $4.4 million in 2024, which was mainly related to improvements in commercial credit ratings;
●
●
For the six months ended June 30, 2025, the reportable segment of Popular U.S. recorded a net income of $37.4 million, compared
with a net income of $24.8 million for the same period of the previous year. The factors that contributed to the variance in the
financial results included the following:
●
commercial and construction portfolios and lower interest expense from deposits, due to product repricing as mentioned
above, partially offset by lower income from money market investments due to lower rates. The net interest margin for the
six months ended June 30, 2025 was 2.84% compared to 2.60% for the same period of the previous year driven by lower
cost of deposits;
●
portfolio due to higher loan balances;
148
●
recorded in 2024 and lower professional fees, offset by higher allocation of Corporate expenses reflective of personnel
costs and consulting fees; and
●
STATEMENT OF FINANCIAL CONDITION ANALYSIS
Assets
The Corporation’s total assets were $76.1 billion at June 30, 2025, compared to $73.0 billion at December 31, 2024. The variance in
total assets of $3.1 billion was driven by an increase in AFS securities and loan growth across most portfolios at both BPPR and PB
segments, partially offset by a decrease in HTM securities, other assets, and money market investments. 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 decreased by $40.2 million as of June 30, 2025, when compared to December 31, 2024, driven by funds
deployed to support loan growth. AFS securities increased $2.2 billion, mainly due to investment in U.S. Treasury securities and the
decrease in the unrealized losses of AFS securities of $232.7 million, partially offset by maturities and principal paydowns. HTM
securities decreased by $216.4 million driven by maturities and principal paydowns, partially offset by the amortization of $91.6
million of the discount related to U.S. Treasury securities previously reclassified from the 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.
149
Loans
Refer to Table 6 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.
Loans held-in-portfolio increased by $1.1 billion to $38.2 billion at June 30, 2025, compared to December 31, 2024. Despite the
uncertainty about the economic outlook, demand for credit across all segments was strong during the second quarter of 2025. In the
BPPR segment loan balances increased by $626.0 million across all portfolios, mostly due to commercial and construction loans,
which include the origination of a $265.0 million commercial loan during the second quarter of 2025 which represents the
Corporation’s portion of a $425.0 million issuance in which BPPR acted as the lead bank and administrative agent, and higher
mortgage loans, driven primarily by home purchase activity. Auto loans and leases also increased, driven by a strong origination
activity. The PB segment also increased by $451.6 million, driven by commercial and construction lending. Nonetheless, the impact
of trade and tariff policies on economic activity may affect loan demand as uncertainty on the short-term economic outlook exists.
150
Table 6 - Loans Ending Balances
(In thousands)
June 30, 2025
December 31, 2024
Variance
Loans held-in-portfolio:
Commercial
$
2,520,789
$
2,399,620
$
121,169
5,521,374
5,363,235
158,139
3,003,855
3,157,746
(153,891)
8,043,752
7,741,562
302,190
Total Commercial
19,089,770
18,662,163
427,607
Construction
1,468,201
1,263,792
204,409
Leasing
1,983,068
1,925,405
57,663
Mortgage
8,444,427
8,114,183
330,244
Consumer
1,215,293
1,218,079
(2,786)
77,479
73,571
3,908
1,876,463
1,855,244
21,219
3,861,702
3,823,437
38,265
168,775
171,778
(3,003)
Total Consumer
7,199,712
7,142,109
57,603
Total loans held-in -portfolio
$
38,185,178
$
37,107,652
$
1,077,526
Loans held-for-sale:
$
2,898
$
5,423
$
(2,525)
Total loans held-for-sale
$
2,898
$
5,423
$
(2,525)
Total loans
$
38,188,076
$
37,113,075
$
1,075,001
151
Other assets
Other assets amounted to $1.7 billion at June 30, 2025, a decrease of $52.7 million when compared to $1.8 billion at December 31,
2024. The variance was mainly driven by a decrease in net deferred tax assets of $64.2 million due to positive changes in the
valuation of AFS securities, a reduction in unsettled trade receivables of $14.6 million related to proceeds from maturities of U.S.
Treasury securities, lower principal, interest and escrow servicing advances of $8.0 million, and a reduction in investments under the
equity method by $7.0 million mainly related to unrealized losses on the underlying investment portfolio held by the investee,
partially offset by an increase in capitalized software costs of $33.1 million mainly related to technology modernization and higher
prepaid taxes of $20.8 million. Refer to Note 12 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 June 30, 2025 and
December 31, 2024.
Liabilities
The Corporation’s total liabilities were $70.1 billion at June 30, 2025, an increase of $2.7 billion, when compared to December 31,
2024. The following is a discussion of the significant changes in liabilities.
Deposits and Borrowings
Total Deposits
The Corporation’s deposits totaled $67.2 billion as of June 30, 2025, compared to $64.9 billion as of December 31, 2024. Ending
deposit balances increased by $2.3 billion, while average quarterly balances grew by $2.1 billion. The average deposit balance,
excluding P.R. public deposits, increased by $1.1 billion. Non-interest-bearing deposits remained flat when compared to December
31, 2024. At the end of the second quarter of 2025, Puerto Rico public deposits were $20.9 billion, an increase of $1.5 billion when
compared to December 31, 2024. P.R public deposits represent 31% of total deposits and are expected to continue to range in the
short term between $18 billion and $20 billion. 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 any federal assistance 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”).
Additionally, the Trump Administration is conducting a review of federal funding, which could entail a reduction 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.
At BPPR, excluding Puerto Rico public deposits, ending deposits increased by $340 million, while at PB segment ending deposit
balances increased by $400 million, net of intercompany activity. We continue to expect third quarter deposit balances in BPPR to
reflect historical seasonality and decrease based on past experience of our retail client behavior.
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 7 for a breakdown of the Corporation’s deposits at June 30, 2025 and December 31, 2024.
152
Table 7 - Deposits Ending Balances
(In thousands)
June 30, 2025
December 31, 2024
Variance
Deposits excluding P.R. public deposits:
$
15,114,614
$
15,139,555
$
(24,941)
21,554,606
21,177,506
377,100
829,506
736,225
93,281
7,938,858
7,476,924
461,934
861,947
890,704
(28,757)
Sub-total deposits excluding P.R. public deposits
46,299,531
45,420,914
878,617
P.R. public deposits:
12,376,316
11,730,273
646,043
7,743,663
7,087,904
655,759
797,981
645,254
152,727
Sub-total P.R. public deposits
20,917,960
19,463,431
1,454,529
Total deposits
$
67,217,491
$
64,884,345
$
2,333,146
[1] Includes interest bearing demand deposits.
Borrowings
The Corporation’s borrowings totaled $1.4 billion at June 30, 2025 compared to $1.2 billion at December 31, 2024. The increase
was mainly related to higher FHLB advances by $236.5 million, mainly at PB. Refer to Note 15 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 $6.0 billion at June 30, 2025, an increase of $341.0 million when compared to December 31, 2024. The
increase was principally due to net income for the six months ended June 30, 2025 of $387.9 million, coupled with the after-tax
effect of the decrease in net unrealized losses in the portfolio of AFS securities of $188.6 million and the amortization of unrealized
losses from securities previously reclassified to HTM of $73.2 million, partially offset by an increase in treasury stock of $226.9
million, mainly due to common stock repurchases, and the common and preferred dividends declared of $96.9 million. Refer to the
Consolidated Statements of Financial Condition, Comprehensive Income and Changes in Stockholders’ Equity for information on
the composition of stockholders’ equity.
The composition of the Corporation’s financing to total assets at June 30, 2025 and December 31, 2024 is included in Table 8.
153
Table 8 - Financing to Total Assets
June 30,
December 31,
% (decrease) increase
% of total assets
(Dollars in millions)
2025
2024
from 2024 to 2025
2025
2024
Non-interest-bearing core deposits
$
15,115
$
15,139
(0.2)
%
19.9
%
20.7
%
Interest-bearing core deposits
46,517
44,622
4.2
61.2
61.1
Interest-bearing other deposits
5,586
5,123
9.0
7.3
7.0
Repurchase agreements
56
55
1.8
0.1
0.1
Other short-term borrowings
550
225
144.4
0.7
0.3
Notes payable
808
896
(9.8)
1.1
1.2
Other liabilities
1,479
1,372
7.8
1.9
1.9
Stockholders’ equity
5,954
5,613
6.1
7.8
7.7
154
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 June 30, 2025, 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 9, which include common equity tier 1, Tier 1 capital, total capital and leverage
capital as of June 30, 2025 and December 31, 2024.
Table 9 - Capital Adequacy Data
(Dollars in thousands)
June 30, 2025
December 31, 2024
Common equity tier 1 capital:
Common stockholders' equity - U.S. GAAP basis
$
5,931,875
$
5,590,923
CECL transitional amount
-
42,375
AOCI related adjustments due to opt-out election
1,325,146
1,589,875
Goodwill, net of associated deferred tax liability (DTL)
(653,493)
(657,181)
Intangible assets, net of associated DTLs
(5,844)
(6,826)
Deferred tax assets and other deductions
(228,617)
(296,374)
Common equity tier 1 capital
$
6,369,067
$
6,262,792
Additional tier 1 capital:
Preferred stock
22,143
22,143
Additional tier 1 capital
$
22,143
$
22,143
Tier 1 capital
$
6,391,210
$
6,284,935
Tier 2 capital:
Trust preferred securities subject to phase in as tier 2
192,674
192,674
Other inclusions (deductions), net
503,781
490,594
Tier 2 capital
$
696,455
$
683,268
Total risk-based capital
$
7,087,665
$
6,968,203
Minimum total capital requirement to be well capitalized
$
4,003,691
$
3,907,346
Excess total capital over minimum well capitalized
$
3,083,974
$
3,060,857
Total risk-weighted assets
$
40,036,914
$
39,073,462
Total assets for leverage ratio
$
75,114,655
$
72,593,464
Risk-based capital ratios:
Common equity tier 1 capital
15.91
%
16.03
%
Tier 1 capital
15.96
16.08
Total capital
17.70
17.83
Tier 1 leverage
8.51
8.66
[1] The CECL transitional amount includes the impact of Popular's adoption of the new CECL accounting standard on January 1, 2020.
155
The Basel III capital rules provide that a depository institution is deemed to be 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%. The Corporation, BPPR and PB leverage ratio, common equity Tier 1 ratio and Tier 1 capital ratio, respectively as of June 30,
2025, continue to exceed the minimum requirements for being “well-capitalized” under the Basel III capital rules.
Pursuant to the adoption of the CECL accounting standard on January 1, 2020, the Corporation elected to use the five-year
transition period option as provided in the final interim regulatory capital rules effective March 31, 2020. The five-year transition
period provision delayed for two years the estimated impact of CECL on regulatory capital, followed by a three-year transition period
to phase out the aggregate amount of the capital benefit provided during the initial two-year delay. During the first quarter of 2025,
the Corporation phased-in all the cumulative CECL deferral over the three-year transition period.
The decrease in the common equity Tier I capital ratio, Tier I capital ratio, total capital ratio, and leverage ratio as of June 30, 2025
as compared to December 31, 2024 was mainly due to higher risk weighted assets driven by the increase in loans held in portfolio,
the repurchase of shares under the 2024 Repurchase Program and common stock dividends, partially offset by the six-month
period’s earnings.
Reconciliation to Tangible Common Equity and Tangible Assets
Table 10 provides a reconciliation of total stockholders’ equity to tangible common equity and total assets to tangible assets as of
June 30, 2025, and December 31, 2024.
156
Table 10 - Reconciliation of Tangible Common Equity and Tangible Assets
(In thousands, except share or per share information)
June 30, 2025
December 31, 2024
Total stockholders’ equity
$
5,954,018
$
5,613,066
Less: Preferred stock
(22,143)
(22,143)
Less: Goodwill
(802,954)
(802,954)
Less: Other intangibles
(5,844)
(6,826)
Total tangible common equity
$
5,123,077
$
4,781,143
Total assets
$
76,065,090
$
73,045,383
Less: Goodwill
(802,954)
(802,954)
Less: Other intangibles
(5,844)
(6,826)
Total tangible assets
$
75,256,292
$
72,235,603
Tangible common equity to tangible assets
6.81
%
6.62
%
Common shares outstanding at end of period
67,937,468
70,141,291
Tangible book value per common share
$
75.41
$
68.16
Quarterly average
Total stockholders’ equity [1]
$
6,849,789
$
6,620,766
Average unrealized (gains) losses on AFS securities transferred to HTM
334,183
505,791
Adjusted total stockholder's equity
7,183,972
7,126,557
Less: Preferred Stock
(22,143)
(22,143)
Less: Goodwill
(802,953)
(804,411)
Less: Other intangibles
(6,096)
(7,288)
Total tangible common equity
$
6,352,780
$
6,292,715
Return on average tangible common equity
13.26
%
11.22
%
157
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
Notes 5 and 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 $20.5 billion and $7.5 billion,
respectively, as of June 30, 2025. Other assets subject to market risk include mortgage servicing rights ("MSRs") with a fair value of
$103.1 million as of June 30, 2025.
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 Net Interest Income (“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 better view of long-
term IRR.
Net interest income simulation analysis performed by legal entity and on a consolidated basis is used to estimate the potential
change in net interest income resulting from hypothetical changes in interest rates. Sensitivity analysis is calculated using a
simulation model which incorporates actual balance sheet figures detailed by maturity and interest yields or costs.
Management assesses interest rate risk by comparing various NII simulations under different interest rate scenarios to assess the
degree of change and the projected shape of the yield curve. Management also performs analyses to isolate and measure basis
and prepayment risk exposures. These models are periodically monitored. Assumptions are validated by management and are
subject to independent validations according to the Corporations’ Model Governance Policy.
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 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 June 30, 2025 and
December 31, 2024, assuming a static balance sheet and parallel changes over flat spot rates over a one-year time horizon:
158
Table 11 - Net Interest Income Sensitivity (One Year Projection)
June 30, 2025
December 31, 2024
(Dollars in thousands)
Amount Change
Percent Change
Amount Change
Percent Change
Change in interest rate
+200 basis points
22,433
0.85
44,747
1.78
+100 basis points
10,515
0.40
22,917
0.91
-100 basis points
(12,636)
(0.48)
9,157
0.36
-200 basis points
(18,563)
(0.71)
588
0.02
As of June 30, 2025, NII simulations show the Corporation maintains an asset sensitive position that is symmetric in the rising and
declining rates scenarios. Compared to the results as of December 31, 2024, the variation in sensitivity and the resulting profile are
mainly driven by updated deposit beta model assumptions that reflect lower elasticity in declining rate scenarios. In declining rate
scenarios, the reduction in net interest income is driven by the repricing of short-term assets and variable rate loans offset in part by
declining deposit costs. In rising rate scenarios, Popular’s net interest income would increase due to the repricing of short-term
assets, variable rate loans, and intermediate maturity assets coming due within one year, that are offset in part by increased
deposits costs due to BPPR’s large proportion of market-linked Puerto Rico public sector deposits. Changes in the balance sheet
during the quarter led to reduced asset sensitivity. The Corporation purchased $2.4 billion in U.S. Treasury Notes with an average
maturity of approximately 1.5 years. Higher loan balances and growth in market-linked Puerto Rico public sector deposits also
contributed to reduced asset sensitivity.
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 with the objective of
realizing gains from expected short-term price movements. 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 June 30, 2025, the Corporation held trading securities with a fair value of $29.6 million, representing 0.04% of the Corporation’s
total assets, compared with $32.8 million and 0.05%, respectively, at December 31, 2024. The trading portfolio consists principally
of investment grade securities such as mortgage-backed securities of $23.0 million with a weighted average yield of 5.28% and U.S.
Treasuries of $5.8 million with a weighted average yield of 3.41% at June 30, 2025 and $29.1 million with a yield of 5.54% and $2.8
million with a yield of 3.28%, respectively, as of December 31, 2024.
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 $0.4 million for the last week in June 2025. 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.
159
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 2024 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% and 89% of funding of the Corporation’s total assets at June 30, 2025 and December
31, 2024, respectively. The ratio of total ending loans to deposits remained at 57% at June 30, 2025 and December 31, 2024. In
addition to traditional deposits, the Corporation maintains borrowing arrangements, which amounted to $1.4 billion in outstanding
balances at June 30, 2025 (December 31, 2024 - $1.2 billion). A detailed description of the Corporation’s borrowings, including their
terms, is included in Note 15 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 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.
During the second quarter of 2025, BPPR was able to increase its available liquidity by approximately $2.9 billion after the merger of
Popular Auto, LLC with and into BPPR, effective on May 1, 2025, that allowed BPPR to pledge auto loans and leases as collateral
under the federal reserve’s discount window. At June 30, 2025, the Corporation’s available liquidity increased to $26.1 billion from
$21.6 billion on December 31, 2024. During the second quarter of 2025, the Corporation had no material incremental use of its
available liquidity sources. The liquidity sources of the Corporation at June 30, 2025 are presented in Table 12 below:
160
Table 12 - Liquidity Sources
June 30, 2025
December 31, 2024
(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)
$
4,753,672
$
1,576,770
$
6,330,442
$
4,882,358
$
1,488,857
$
6,371,215
Unpledged securities
4,453,281
519,711
4,972,992
3,806,066
522,869
4,328,935
FHLB borrowing capacity
3,178,798
816,840
3,995,638
2,777,090
1,058,921
3,836,011
Discount window of the Federal Reserve
Bank borrowing capacity
7,895,298
2,875,787
10,771,085
4,839,388
2,178,646
7,018,034
Total available liquidity
$
20,281,049
$
5,789,108
$
26,070,157
$
16,304,902
$
5,249,293
$
21,554,195
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.
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 7 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 June 30,
2025, total Puerto Rico public sector deposits were $20.9 billion, compared to $19.5 billion at December 31, 2024.
Core deposits continue to represent 92% of total deposits at $61.6 billion, as of June 30, 2025, and compared to December 31,
2024. Core deposits financed 85% of the Corporation’s earning assets at June 30, 2025, compared to 86% at December 31, 2024.
The distribution by maturity of certificates of deposit with denominations of $250,000 and over at June 30, 2025 is presented in the
table that follows:
161
Table 13 - Distribution by Maturity of Certificates of Deposit of $250,000 and Over
(In thousands)
3 months or less
$
2,591,418
Over 3 to 12 months
992,191
Over 1 year to 3 years
287,373
Over 3 years
147,470
Total
$
4,018,452
The Corporation had $1.7 billion in brokered deposits at June 30, 2025, which financed approximately 2% of its total assets
(December 31, 2024 - $1.6 billion and 2%, respectively).
As of June 30, 2025, 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 14 reflects the aggregate
balance in deposit accounts in excess of $250,000, including collateralized public funds and deposits outside of the U.S. and its
territories. Collateralized public funds, as presented in Table 14, 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 14 - Deposits
30-Jun-25
Popular, Inc.
(Dollars in thousands)
BPPR
% of Total
Popular U.S.
% of Total
(Consolidated)
% of Total
Deposits:
Deposits balances under $250,000 [1]
$
23,741,443
42
%
$
8,341,661
70
%
$
32,083,104
48
%
Transactional deposits balances over
$250,000
7,968,081
14
%
2,042,469
17
%
10,010,550
15
%
Time deposits balances over $250,000
2,262,268
4
%
833,527
7
%
3,095,795
5
%
Uninsured foreign deposits
444,748
1
%
-
-
%
444,748
1
%
Collateralized public funds
21,269,940
39
%
313,354
3
%
21,583,294
31
%
Intercompany deposits
195,313
-
%
415,184
3
%
-
-
%
Total deposits
$
55,881,793
100
%
$
11,946,195
100
%
$
67,217,491
100
%
[1] Includes the first $250,000 in balances of transactional and time deposit accounts with balances in excess of $250,000.
31-Dec-24
Popular, Inc.
(Dollars in thousands)
BPPR
% of Total
Popular U.S.
% of Total
(Consolidated)
% of Total
Deposits
Deposits balances under $250,000 [1]
$
23,588,937
44
%
$
7,961,334
68
%
$
31,550,271
49
%
Transactional deposits balances over
$250,000
8,046,175
15
%
1,944,674
16
%
9,990,849
15
%
Time deposits balances over $250,000
1,991,934
4
%
813,424
7
%
2,805,358
4
%
Uninsured foreign deposits
450,068
1
%
-
-
%
450,068
1
%
Collateralized public funds
19,771,083
36
%
316,716
3
%
20,087,799
31
%
Intercompany deposits
205,839
-
%
667,839
6
%
-
-
%
Total deposits
$
54,054,036
100
%
$
11,703,987
100
%
$
64,884,345
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 BHCs, which are Popular, Inc. (holding company only) and 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 FED and the
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 $594 million at June 30, 2025 and December 31, 2024.
The contractual maturities of the BHCs notes payable at June 30, 2025 are presented in Table 15.
Table 15 - Distribution of BHC's Notes Payable by Contractual Maturity
Year
(In thousands)
2028
$
395,865
Later years
198,386
Total
$
594,251
163
As of June 30, 2025, the BHCs had cash and money markets investments totaling $503 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 paid dividend was $0.70 per share or approximately $48
million per quarter.
The BHCs have in the past borrowed in the corporate debt market primarily to finance their non-banking subsidiaries and refinance
debt obligations. These sources of funding are more costly given that two out of three principal credit rating agencies rate the
Corporation’s debt securities below “investment grade”. 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 six months ended June 30, 2025, the Corporation declared cash dividends of $1.40 per common share outstanding
($96.2 million in the aggregate). The dividends for the Corporation’s Series A preferred stock amounted to $0.7 million.
On July 16,
2025, the Corporation announced an increase in its quarterly common stock dividend from $0.70 to $0.75 per share, commencing
with the dividend payable in the fourth quarter of 2025, subject to the approval by the Corporation’s Board of Directors.
During the six months ended June 30, 2025, the BHCs received dividends and distributions amounting to $200 million from BPPR,
$23 from Popular International Bank, Inc. (“PIBI”) and $15 million from its other non-banking subsidiaries. Dividends from BPPR
constitute Popular, Inc.’s primary source of liquidity. In addition, during the six months ended June 30, 2025,PIBI, a wholly owned
subsidiary of Popular, Inc., received $20.0 million in cash dividends and $5.3 million in stock dividends from its investment in BHD.
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 BHC’s ability to declare dividends on its
outstanding common and preferred stock, repurchase its securities or meet its debt obligations, for example. At June 30, 2025,
BPPR could declare a dividend of up to approximately $209 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
NYSDFS.
Other Funding Sources and Capital
In addition to cash reserves held at the FRB that totaled $6.3 billion at June 30, 2025, 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 12 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. After the
merger of Popular Auto LLC into its parent company BPPR, effective on May 1, 2025, the Corporation has $2.9 billion in auto loans
pledged at June 30, 2025, in addition to mortgage loans, to secure credit facilities with the Federal Reserve's discount window. The
164
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 20 to the Consolidated Financial Statements for information on the Corporation’s
commitments to extent 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 to Note 27 to the
Consolidated Financial Statements for more information on operating leases and to Note 19 to the Consolidated Financial
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 June 30, 2025, and
December 31, 2024, and the results of their operations for the six-month period ended June 30, 2025 and June 30, 2024. 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.
165
Table 16 - Summarized Statement of Condition
(In thousands)
June 30, 2025
December 31, 2024
Assets
Cash and money market investments
$
502,784
$
634,809
Investment securities
35,557
35,150
Accounts receivables from non-obligor subsidiaries
29,111
14,602
Other loans (net of allowance for credit losses of $197 (2024 - $281))
24,791
25,381
Investment in equity method investees
5,281
5,279
Other assets
83,401
65,483
Total assets
$
680,925
$
780,704
Liabilities and Stockholders' equity
Accounts payable to non-obligor subsidiaries
$
5,004
$
12,163
Notes payable
594,251
593,571
Other liabilities
129,332
126,718
Stockholders' (deficit) equity
(47,662)
48,252
Total liabilities and stockholders' equity
$
680,925
$
780,704
Table 17 - Summarized Statement of Operations
For the period ended
(In thousands)
June 30, 2025
June 30, 2024
Income:
Dividends from non-obligor subsidiaries
$
215,100
$
313,000
Interest income from non-obligor subsidiaries and affiliates
2,248
7,106
Earnings (losses) from investments in equity method investees
1
(10)
Other operating income
6,155
2,439
Total income
$
223,504
$
322,535
Expenses:
Services provided by non-obligor subsidiaries and affiliates (net of
reimbursement by subsidiaries for services provided by parent of
$127,054 (2024 - $120,987))
$
7,739
$
6,447
Other expenses
14,359
22,685
Income tax expense
[1]
5,952
22,208
Total expenses
$
28,050
$
51,340
Net income
$
195,454
$
271,195
[1] The net income for the six months ended June 30, 2024, included $22.9 million of expenses, of which $16.5 million was reflected in
income tax expense and $6.4 million was reflected in other operating expenses, related to an out-of-period adjustment associated with the
Corporation’s U.S. subsidiary’s non-payment of taxes on certain intercompany distributions to the Bank Holding Company (BHC) in Puerto
Rico, a foreign corporation for U.S. tax purposes.
In addition to the dividend income reflected in the Statement of Operations table above, during the six months ended June
30, 2025, the obligor group recorded a $23.0 million of dividend distributions from non-obligor subsidiary which was
recorded as a reduction to the investment (2024 - $67.4 million).
166
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 1A” of 2024 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 32 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 2024 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
The latest estimates from the Puerto Rico Planning Board (the “Planning Board”) indicate that real GNP grew by 2.1% during fiscal
year 2024 (July 2023-June 2024) and by 1.1% in fiscal year 2025 (July 2024-June 2025). For fiscal year 2026 (July 2025-June
2026), the Planning Board forecasts more modest GNP growth of 0.5%. Meanwhile, the Puerto Rico Economic Activity Index
showed a 0.9% year-over-year decline and a 0.5% month-over-month increase in February 2025. 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 issues.
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 for the first time in four years. As of June 2025, the U.S. Consumer
Price Index showed a 2.7% year-over-year increase, which is significantly lower than peak 2022 inflation levels but still above the
Federal Reserve’s 2% target. In Puerto Rico, the Consumer Price Index increased by 0.9% over the 12 months ending in June
2025.
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 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, “PR Government Entities”). On August 5, 2025, President Donald J. Trump dismissed five of the seven members of the
Oversight Board, reportedly due to inefficient leadership and excessive spending. As of the date of this report, the vacant Oversight
Board seats remain unfilled, and no official replacements have been announced. While the two remaining members may continue to
act on behalf of the Oversight Board, their authority is limited with respect to certain matters specified in PROMESA and the
Oversight Board’s by-laws. It is still too early to determine what impact these changes may have on the Oversight Board’s
operations or on Puerto Rico’s fiscal and economic affairs.
167
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 PR
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
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. This decline
has been partly offset by federal disaster and COVID-relief funding received by municipalities in recent years. 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 reflects, among other things, the general economic conditions in Puerto Rico and other
adverse conditions affecting Puerto Rico consumers and businesses. Deterioration in the Puerto Rico economy has resulted in the
past, and could result in the future, in higher delinquencies, greater charge-offs and increased losses, which could materially affect
our financial condition and results of operations.
At June 30, 2025, the Corporation’s direct exposure to PR Government Entities totaled $412 million, of which $362 million were
outstanding, compared to $336 million, at December 31, 2024, all of which were outstanding. The Corporation’s exposure to PR
Government Entities at June 30, 2025 included up to $47.4 million in Automated Clearing House (“ACH”) transaction settlement
exposure, none of which was outstanding. Substantially all of the Corporation’s direct exposure outstanding at June 30, 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 basic property tax or sales tax revenues.
At June 30, 2025, 81% of the Corporation’s
exposure to municipal loans and securities was concentrated in the municipalities of San Juan, Guaynabo, Carolina and Caguas.
For additional discussion of the Corporation’s direct exposure to the Puerto Rico government and its instrumentalities and
municipalities, refer to Note 20 – Commitments and Contingencies to the Consolidated Financial Statements.
In addition, at June 30, 2025, the Corporation had $212 million in loans insured or securities issued by PR Governmental Entities,
but for which the principal source of repayment is non-governmental ($220 million at December 31, 2024). These included $168
million in residential mortgage loans insured by the Puerto Rico Housing Finance Authority (“HFA”), a Puerto Rico Government
Entity ($176 million at December 31, 2024). The Corporation also had, at June 30, 2025, $37 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 ($38 million at December 31, 2024).
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.
BPPR’s commercial loan portfolio also includes loans to private borrowers who are service providers, lessors, suppliers or have
other relationships with the PR government. These borrowers could be negatively affected by a deterioration in the fiscal and
economic situation of PR Government Entities. 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, if the fiscal and economic situation deteriorates.
As of June 30, 2025, BPPR had $20.9 billion in deposits from the Puerto Rico government, its instrumentalities, and municipalities.
The rate at which public deposit balances may decline is uncertain and difficult to predict. The amount and timing of any such
reduction is likely to be impacted by, for example, the level of federal assistance, the speed at which such assistance is distributed
168
and the financial condition, liquidity and cash management practices of such entities, as well as the ability of BPPR to maintain
these customer relationships.
United States Virgin Islands
The Corporation has operations in the United States Virgin Islands (the “USVI”) and has credit exposure to USVI government
entities.
The USVI has been experiencing a number of fiscal and economic challenges, which could adversely affect the ability of its public
corporations and instrumentalities to service their outstanding debt obligations. PROMESA does not apply to the USVI and, as such,
there is currently no federal legislation permitting the restructuring of the debts of the USVI and its public corporations and
instrumentalities.
Non-Performing Assets
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 18.
The Corporation’s credit quality metrics demonstrated favorable trends in the second quarter of 2025 with improvements in NPLs
and Net Charge-Offs (NCOs). The Corporation continues to closely monitor the economic landscape and borrower performance, as
economic uncertainty remains a key consideration. The Corporation’s experience managing credit risk under different
macroeconomic and operating environments and, more recently, the steps taken around credit tightening supports management’s
view that exposure to riskier borrowers is adequately managed. Nonetheless, carefully monitoring the performance of our loan
portfolio and its response to the environment will continue to be a priority.
Total NPAs of $357.8 million as of June 30, 2025 decreased by $50.3 million when compared with December 31, 2024. Total NPLs
of $311.6 million decreased by $39.2 million from December 31, 2024. BPPR’s NPLs decreased by $34.4 million, mainly driven by
lower consumer, mortgage and commercial NPLs by $12.9 million, $11.0 million and $8.9 million, respectively. Popular U.S. NPLs
decreased by $4.7 million, mostly driven by decreases of $1.9 million and $1.8 million in commercial and mortgage NPLs,
respectively.
On June 30, 2025, the ratio of NPLs to total loans held-in-portfolio was 0.82%, compared to 0.95% on December 31, 2024. Other
real estate owned loans (“OREOs”) decreased by $11.1 million from December 31, 2024. The decrease in OREO was mainly driven
by the combination of sales and lower residential property foreclosures. On June 30, 2025, NPLs secured by real estate amounted
to $189 million in the Puerto Rico operations and $50 million in Popular U.S, compared with $200 million and $56 million,
respectively, on December 31, 2024.
The Corporation’s commercial loan portfolio secured by real estate (“CRE”) amounted to $11.0 billion on June 30, 2025, with $3.0
billion secured by owner-occupied properties (December 31, 2024 - $10.9 billion and $3.2 billion, respectively).
The non-owner occupied CRE portfolio was $5.5 billion at June 30, 2025, split between $3.3 billion in BPPR and $2.2 billion in
Popular U.S. This portfolio is diversified across sectors: retail (33%), hotels (19%), and office space (13%) which together represent
two-thirds of total non-owner occupied CRE exposure. Specifically, office space leasing accounts for just 1.8% ($688.8 million) of
the total loan portfolio, mainly comprising mid-rise properties with an average loan size of $2.4 million, and is well diversified by
tenant type.
Within CRE, the commercial multi-family portfolio is $2.5 billion (approximately 7% of total loans), concentrated in New York Metro
($1.5 billion), South Florida ($716.6 million) and Puerto Rico ($202.1 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.
CRE NPLs amounted to $52.5 million on June 30, 2025, compared with $53.7 million on December 31, 2024. The CRE NPL ratios
for the BPPR and Popular U.S. segments were 0.69% and 0.30%, respectively, on June 30, 2025, compared with 0.64% and
0.37%, respectively, on December 31, 2024.
169
In addition to the NPLs included in Table 18, on June 30, 2025, there were $529 million of performing loans, mostly commercial
loans, which in management’s opinion, are currently subject to potential future classification as non-performing (December 31, 2024
- $596 million).
The following table presents the Corporation’s NPAs as of June 30, 2025 and December 31, 2024:
170
Table 18 - Non-Performing Assets
June 30, 2025
December 31, 2024
(Dollars in thousands)
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
$
174
$
10,751
$
10,925
0.4
%
$
79
$
8,700
$
8,779
0.4
%
Commercial real estate non-owner
occupied
6,084
7,893
13,977
0.3
6,429
8,015
14,444
0.3
Commercial real estate owner
occupied
27,320
231
27,551
0.9
25,258
5,191
30,449
1.0
Commercial and industrial
8,588
2,836
11,424
0.1
19,335
1,748
21,083
0.3
Total Commercial
42,166
21,711
63,877
0.3
51,101
23,654
74,755
0.4
Leasing
7,976
-
7,976
0.4
9,588
-
9,588
0.5
Mortgage
147,464
28,052
175,516
2.1
158,442
29,890
188,332
2.3
Consumer
-
3,120
3,120
4.0
-
3,393
3,393
4.6
17,499
1,094
18,593
1.0
20,269
1,741
22,010
1.2
40,595
-
40,595
1.1
51,792
-
51,792
1.4
1,948
-
1,948
1.2
899
11
910
0.5
Total Consumer
60,042
4,214
64,256
0.9
72,960
5,145
78,105
1.1
Total non-performing loans held-in-
portfolio
257,648
53,977
311,625
0.8
%
292,091
58,689
350,780
0.9
%
Other real estate owned (“OREO”)
45,643
483
46,126
57,197
71
57,268
Total non-performing assets
[1]
$
303,291
$
54,460
$
357,751
$
349,288
$
58,760
$
408,048
Accruing loans past due 90 days or
more
[2]
$
206,205
$
189
$
206,394
$
242,250
$
190
$
242,440
Ratios:
Non-performing assets to total assets
0.51
%
0.34
%
0.47
%
0.61
%
0.37
%
0.56
%
Non-performing loans held-in-portfolio
to loans held-in-portfolio
0.96
0.47
0.82
1.12
0.54
0.95
Allowance for credit losses to loans
held-in-portfolio
2.53
0.79
2.02
2.56
0.69
2.01
Allowance for credit losses to non-
performing loans, excluding held-for-
sale
263.63
167.17
246.93
229.61
128.40
212.68
[1] There were no non-performing loans held-for-sale as of June 30, 2025 and December 31, 2024.
[2] 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 $52 million of residential mortgage
loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of June 30, 2025 (December 31, 2024 - $65 million).
Furthermore, the Corporation has $29 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, 2024 -
$31 million).
For the quarter ended June 30, 2025, total inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $26.1 million,
when compared to the inflows for the same period in 2024. Inflows of NPLs held-in-portfolio at the BPPR segment decreased by
$8.8 million, compared to the same period in 2024, mainly driven by lower mortgage NPL inflows by $6.6 million. Inflows of NPLs
held-in-portfolio at the Popular U.S. segment decreased by $17.3 million from the same period in 2024, driven by lower commercial
NPL inflows by $16.6 million, as the prior period was impacted by a single $17.3 million loan.
Tables 19 to 25 present the Corporation’s inflows to NPLs for the quarters and six months ended June 30, 2025 and 2024.
171
Table 19 - Activity in Non -Performing Loans Held-in-Portfolio (Excluding Consumer Loans)
For the quarter ended June 30, 2025
For the six months ended June 30, 2025
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
BPPR
Popular U.S.
Popular, Inc.
Beginning balance
$
191,103
$
46,594
$
237,697
$
209,543
$
53,544
$
263,087
Plus:
New non-performing loans
32,205
8,909
41,114
69,228
17,067
86,295
Advances on existing non-performing loans
-
20
20
-
38
38
Less:
Non-performing loans transferred to OREO
(2,385)
(433)
(2,818)
(4,940)
(433)
(5,373)
Non-performing loans charged-off
(790)
(583)
(1,373)
(1,717)
(1,713)
(3,430)
Loans returned to accrual status / loan collections
(30,503)
(4,744)
(35,247)
(82,484)
(18,740)
(101,224)
Ending balance NPLs
$
189,630
$
49,763
$
239,393
$
189,630
$
49,763
$
239,393
Table 20 - Activity in Non -Performing Loans Held-in-Portfolio (Excluding Consumer Loans)
For the quarter ended June 30, 2024
For the six months ended June 30, 2024
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
BPPR
Popular U.S.
Popular, Inc.
Beginning balance
$
229,796
$
49,478
$
279,274
$
254,476
$
22,354
$
276,830
Plus:
New non-performing loans
41,040
25,907
66,947
74,543
61,280
135,823
Advances on existing non-performing loans
-
298
298
-
320
320
Less:
Non-performing loans transferred to OREO
(4,540)
(24)
(4,564)
(8,649)
(24)
(8,673)
Non-performing loans charged-off
(5,590)
(18)
(5,608)
(13,899)
(968)
(14,867)
Loans returned to accrual status / loan collections
(40,746)
(26,324)
(67,070)
(86,511)
(33,645)
(120,156)
Ending balance NPLs
$
219,960
$
49,317
$
269,277
$
219,960
$
49,317
$
269,277
Table 21 - Activity in Non -Performing Commercial Loans Held-in-Portfolio
For the quarter ended June 30, 2025
For the six months ended June 30, 2025
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
BPPR
Popular U.S.
Popular, Inc.
Beginning balance
$
42,597
$
17,507
$
60,104
$
51,101
$
23,654
$
74,755
Plus:
New non-performing loans
1,768
5,632
7,400
7,549
11,045
18,594
Advances on existing non-performing loans
-
20
20
-
37
37
Less:
Non-performing loans transferred to OREO
(140)
-
(140)
(260)
-
(260)
Non-performing loans charged-off
(403)
(583)
(986)
(1,142)
(1,713)
(2,855)
Loans returned to accrual status / loan
collections
(1,656)
(865)
(2,521)
(15,082)
(11,312)
(26,394)
Ending balance NPLs
$
42,166
$
21,711
$
63,877
$
42,166
$
21,711
$
63,877
172
Table 22 - Activity in Non -Performing Commercial Loans Held-in-Portfolio
For the quarter ended June 30, 2024
For the six months ended June 30, 2024
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
BPPR
Popular U.S.
Popular, Inc.
Beginning balance
$
63,323
$
21,407
$
84,730
$
72,992
$
11,163
$
84,155
Plus:
New non-performing loans
4,031
21,940
25,971
8,374
36,979
45,353
Advances on existing non-performing loans
-
282
282
-
302
302
Less:
Non-performing loans transferred to OREO
(280)
-
(280)
(280)
-
(280)
Non-performing loans charged-off
(5,700)
-
(5,700)
(13,699)
(950)
(14,649)
Loans returned to accrual status / loan collections
(5,204)
(5,866)
(11,070)
(11,217)
(9,731)
(20,948)
Ending balance NPLs
$
56,170
$
37,763
$
93,933
$
56,170
$
37,763
$
93,933
Table 23 - Activity in Non -Performing Construction Loans Held-in-Portfolio
For the quarter ended June 30, 2024
For the six months ended June 30, 2024
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
BPPR
Popular U.S.
Popular, Inc.
Beginning balance
$
-
$
-
$
-
$
6,378
$
-
$
6,378
Less:
Loans returned to accrual status / loan collections
-
-
-
(6,378)
-
(6,378)
Ending balance NPLs
$
-
$
-
$
-
$
-
$
-
$
-
173
Table 24 - Activity in Non -Performing Mortgage Loans Held-in-Portfolio
For the quarter ended June 30, 2025
For the six months ended June 30, 2025
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
BPPR
Popular U.S.
Popular, Inc.
Beginning balance
$
148,506
$
29,087
$
177,593
$
158,442
$
29,890
$
188,332
Plus:
New non-performing loans
30,437
3,277
33,714
61,679
6,022
67,701
Advances on existing non-performing loans
-
-
-
-
1
1
Less:
Non-performing loans transferred to OREO
(2,245)
(433)
(2,678)
(4,680)
(433)
(5,113)
Non-performing loans charged-off
(387)
-
(387)
(575)
-
(575)
Loans returned to accrual status / loan
collections
(28,847)
(3,879)
(32,726)
(67,402)
(7,428)
(74,830)
Ending balance NPLs
$
147,464
$
28,052
$
175,516
$
147,464
$
28,052
$
175,516
Table 25 - Activity in Non -Performing Mortgage Loans Held-in-Portfolio
For the quarter ended June 30, 2024
For the six months ended June 30, 2024
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
BPPR
Popular U.S.
Popular, Inc.
Beginning balance
$
166,473
$
28,071
$
194,544
$
175,106
$
11,191
$
186,297
Plus:
New non-performing loans
37,009
3,967
40,976
66,169
24,301
90,470
Advances on existing non-performing loans
-
16
16
-
18
18
Less:
Non-performing loans transferred to OREO
(4,260)
(24)
(4,284)
(8,369)
(24)
(8,393)
Non-performing loans charged-off
110
(18)
92
(200)
(18)
(218)
Loans returned to accrual status / loan collections
(35,542)
(20,458)
(56,000)
(68,916)
(23,914)
(92,830)
Ending balance NPLs
$
163,790
$
11,554
$
175,344
$
163,790
$
11,554
$
175,344
174
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 June 30, 2025 and December 31, 2024, are presented below.
Table 26 - Loan Delinquencies
(Dollars in thousands)
June 30, 2025
December 31, 2024
Loans delinquent
30 days or more
Total loans
Total delinquencies
as a percentage
Loans delinquent
30 days or more
Total loans
Total delinquencies
as a percentage
Commercial
Commercial multi-family
$
21,937
$
2,520,789
0.87
%
$
15,826
$
2,399,620
0.66
%
Commercial real estate
non-owner occupied
17,272
5,521,374
0.31
24,925
5,363,235
0.46
Commercial real estate
owner occupied
41,413
3,003,855
1.38
42,311
3,157,746
1.34
Commercial and industrial
37,213
8,043,752
0.46
49,942
7,741,562
0.65
Total Commercial
117,835
19,089,770
0.62
133,004
18,662,163
0.71
Construction
3,720
1,468,201
0.25
1,039
1,263,792
0.08
Leasing
36,714
1,983,068
1.85
39,641
1,925,405
2.06
Mortgage
[1]
728,253
8,444,427
8.62
798,130
8,114,183
9.84
Consumer
Credit cards
48,745
1,215,293
4.01
59,078
1,218,079
4.85
Home equity lines of credit
4,682
77,479
6.04
5,054
73,571
6.87
Personal
51,109
1,876,463
2.72
57,835
1,855,244
3.12
Auto
165,642
3,861,702
4.29
191,008
3,823,437
5.00
Other
5,567
168,775
3.30
3,930
171,778
2.29
Total Consumer
275,745
7,199,712
3.83
316,905
7,142,109
4.44
Loans held-for-sale
-
2,898
-
-
5,423
-
Total
$
1,162,267
$
38,188,076
3.04
%
$
1,288,719
$
37,113,075
3.47
%
[1] Loans delinquent 30 days or more includes $0.4 billion of residential mortgage loans insured by FHA or guaranteed by the VA as of June 30,
2025 (December 31, 2024 - $0.4 billion). 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. Refer to Note 8 to the Consolidated Financial Statements, for additional information on the Corporation’s methodology to
estimate its ACL.
On June 30, 2025, the ACL increased by $23.5 million from December 31, 2024 to $769.5 million. The increase in ACL was driven
by changes in the economic scenario probability weights and increases in qualitative reserves, in response to the current economic
environment uncertainty, coupled with reserve build-up associated with portfolio growth and unfavorable changes in the economic
assumptions used in the ACL model. These increases were offset in part by the net effect of changes in credit quality and NCOs
during the period. Given that any economic outlook is inherently uncertain, the Corporation leverages multiple scenarios to estimate
its ACL. Prior to the first quarter of 2025, the Corporation assigned the baseline scenario the highest probability among the
scenarios used to estimate the ACL, followed by the pessimistic scenario given the uncertainties in the economic outlook and
downside risk, and the optimistic scenario had the lowest probability. During the first quarter of 2025, the Corporation modified the
weight assigned to the pessimistic scenario to be equal to the baseline scenario in response to the current economic uncertainty,
resulting in an increase of $18.2 million in the reserves. In the second quarter of 2025, the probability weight for the pessimistic
175
scenario was moderately decreased based on changes in the economic outlook and a reassessment of uncertainty compared to the
previous quarter. This change resulted in a $4.5 million reduction in ACL reserve levels, for a $13.7 million net increase from
December 31, 2024. The probability weight for the pessimistic scenario remains above the levels observed in 2024, given the
ongoing economic uncertainty. 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
On June 30, 2025, the ACL for BPPR increased by $8.6 million from December 31, 2024, driven by changes in the probability
weights that resulted in a $8.8 million net ACL increase, coupled with an increase in the reserves for auto loans due to migrations
between FICO score categories and changes in the economic scenarios. This increase was partially offset by lower reserves for
commercial loans due to improvements in credit quality, partially offset by ACL reserve build-up due to portfolio growth. In PB, on
June 30, 2025, the ACL increased by $14.9 million, when compared to December 31, 2024. This increase was influenced by
changes in the forecast of the U.S. unemployment rate as well as higher qualitative reserves for the CRE portfolio in response to
current market volatility and economic uncertainty, coupled with changes in the probability weights that resulted in a $4.9 million net
increase.
The Corporation’s ratio of the allowance for credit losses to loans held-in-portfolio was 2.02% on June 30, 2025, compared to 2.01%
on December 31, 2024. The ratio of the ACL to NPLs held-in-portfolio stood at 246.9%, compared to 212.7% on December 31,
2024.
Tables 27 and 28 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.
176
Table 27 - Allowance for Credit Losses - Loan Portfolios
June 30, 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
$
16,781
$
2,520,789
0.67
%
$
10,925
153.60
%
59,117
5,521,374
1.07
%
13,977
422.96
%
49,051
3,003,855
1.63
%
27,551
178.04
%
141,362
8,043,752
1.76
%
11,424
N.M.
Total Commercial
$
266,311
$
19,089,770
1.40
%
$
63,877
416.91
%
Construction
10,579
1,468,201
0.72
%
-
-
Leasing
20,040
1,983,068
1.01
%
7,976
251.25
%
Mortgage
85,175
8,444,427
1.01
%
175,516
48.53
%
Consumer
92,306
1,215,293
7.60
%
-
-
1,384
77,479
1.79
%
3,120
44.36
%
103,654
1,876,463
5.52
%
18,593
557.49
%
182,274
3,861,702
4.72
%
40,595
449.01
%
7,762
168,775
4.60
%
1,948
398.46
%
Total Consumer
$
387,380
$
7,199,712
5.38
%
$
64,256
602.87
%
Total
$
769,485
$
38,185,178
2.02
%
$
311,625
246.93
%
N.M. - Not meaningful.
Table 28 - Allowance for Credit Losses - Loan Portfolios
December 31, 2024
(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
$
9,236
$
2,399,620
0.38
%
$
8,779
105.21
%
54,494
5,363,235
1.02
%
14,444
377.28
%
49,828
3,157,746
1.58
%
30,449
163.64
%
146,006
7,741,562
1.89
%
21,083
692.53
%
Total Commercial
$
259,564
$
18,662,163
1.39
%
$
74,755
347.22
%
Construction
11,264
1,263,792
0.89
%
-
-
Leasing
16,419
1,925,405
0.85
%
9,588
171.25
%
Mortgage
82,409
8,114,183
1.02
%
188,332
43.76
%
Consumer
99,130
1,218,079
8.14
%
-
-
1,503
73,571
2.04
%
3,393
44.30
%
102,736
1,855,244
5.54
%
22,010
466.77
%
165,995
3,823,437
4.34
%
51,792
320.50
%
7,004
171,778
4.08
%
910
769.67
%
Total Consumer
$
376,368
$
7,142,109
5.27
%
$
78,105
481.87
%
Total
$
746,024
$
37,107,652
2.01
%
$
350,780
212.68
%
177
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 six months ended June 30, 2025 and 2024.
Table 29 - Annualized Net Charge -offs (Recoveries) to Average Loans Held-in-Portfolio
Quarters ended
June 30, 2025
June 30, 2024
BPPR
Popular U.S.
Popular Inc.
BPPR
Popular U.S.
Popular Inc.
Commercial
―
%
0.02
%
0.01
%
0.20
%
0.04
%
0.13
%
Construction
―
―
―
―
(0.04)
(0.04)
Mortgage
(0.14)
(0.01)
(0.12)
(0.23)
(0.01)
(0.19)
Leasing
0.56
―
0.56
0.60
―
0.60
Consumer
2.29
4.00
2.33
2.68
6.58
2.80
Total annualized net charge-offs
(recoveries) to average loans held-in-
portfolio
0.61
%
0.07
%
0.45
%
0.79
%
0.16
%
0.61
%
Six months ended
June 30, 2025
June 30, 2024
BPPR
Popular U.S.
Popular Inc.
BPPR
Popular U.S.
Popular Inc.
Commercial
(0.05)
%
0.02
%
(0.02)
%
0.25
%
0.04
%
0.15
%
Construction
―
―
―
―
(0.02)
(0.02)
Mortgage
(0.14)
(0.03)
(0.12)
(0.25)
(0.01)
(0.21)
Leasing
0.62
―
0.62
0.72
―
0.72
Consumer
2.55
3.95
2.59
2.83
7.54
2.98
Total annualized net charge-offs
(recoveries) to average loans held-in-
portfolio
0.67
%
0.07
%
0.49
%
0.86
%
0.19
%
0.66
%
NCOs for the quarter ended June 30, 2025, amounted to $42.2 million, decreasing by $11.4 million when compared to the same
period in 2024. The BPPR segment decreased by $9.1 million, mainly driven by decreases of $5.6 million and $4.9 million in
consumer and commercial NCOs, respectively. The PB segment NCOs decreased by $2.3 million, mainly driven by lower consumer
NCOs by $1.8 million
NCOs for the six months ended June 30, 2025, amounted to $91.3 million, decreasing by $24.5 million when compared to the same
period in 2024. The BPPR segment decreased by $18.6 million, mainly driven by decreases of $14.4 million and $7.0 million in
commercial and consumer NCOs, respectively. The PB segment NCOs decreased by $5.9 million, mainly driven by lower consumer
NCOs by $4.9 million.
Loan Modifications
For the quarter ended June 30, 2025, modified loans to borrowers with financial difficulty amounted to $276.9 million, of which
$266.6 million were in accruing status. The BPPR segment’s modifications to borrowers with financial difficulty amounted to $217.5
million, mainly comprised of commercial and mortgage loans of $192.5 million and $17.4 million, respectively. A total of $10.7 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 $59.4 million, mostly comprised of commercial loans.
Refer to Note 8 to the Consolidated Financial Statements for additional information on modifications made to borrowers
experiencing financial difficulties.
178
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.
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 2024 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 June 30, 2025 that have materially affected, or are
reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
Part II - Other Information
Item 1. Legal Proceedings
For a discussion of Legal Proceedings, see Note 20 to the Consolidated Financial Statements.
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 2024 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 2024 Form 10-K.
There have been no material changes to the risk factors previously disclosed under Item 1A of the Corporation’s 2024 Form 10-K.
The risks described in our 2024 Form 10-K and in this report are not the only risks facing us. 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.
179
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 June 30, 2025.
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 June 30, 2025:
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]
April 1 - April 30
357,832
$
87.37
355,539
$129,330,233
May 1 -May 31
447,956
101.50
417,666
$86,774,331
June 1 - June 30
380,593
105.93
363,185
$48,375,729
Total
1,186,381
$
98.66
1,136,390
$48,375,729
[1] Includes 2,293, 30,290 and 17,408 shares of the Corporation’s common stock acquired by the Corporation during April, May and June 2025,
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 2024, the Corporation announced plans to repurchase up to $500 million in common stock and repurchases began
in August 2024. As of June 30, 2025, the Corporation repurchased 4,663,379 shares of common stock for $451.5 million at an average price of $96.82
per share, under the previously announced share repurchase authorization.
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
,
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
180
Item 6. Exhibits
Exhibit Index
Exhibit No
Exhibit Description
10.1
Form of Director Compensation Letter, Election Form, Restricted Stock Award Agreement and Restricted
Stock Unit Award Agreement, effective May 8, 2025
(1)*
10.2
Equity Award Agreement, dated as of June 26, 2025, by and between Ignacio Alvarez and Popular, Inc.
(1)*
10.3
2025 Long-Term Equity Incentive Award Agreement, dated as of June 26, 2025, by and between Javier D.
Ferrer and Popular, Inc.
(1)*
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, 2024)
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 d82325dex322.htm
(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 Taxonomy Extension Schema Document
(1)
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
(1)
101.DEF
Inline XBRL Taxonomy Extension Definitions Linkbase Document
(1)
101.LAB
Inline XBRL Taxonomy Extension Label 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 June 30, 2025,
formatted in Inline XBRL (included within the Exhibit 101 attachments)
(1)
(1)
* This exhibit is a management contract or compensatory plan or arrangement.
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.
181
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: August 11, 2025
By: /s/ Jorge J. García
Jorge J. García
Executive Vice President &
Chief Financial Officer
Date: August 11, 2025
By: /s/ Denissa M. Rodríguez
Denissa M. Rodríguez
Senior Vice President & Corporate Comptroller