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Watchlist
Account
Popular, Inc. (Banco Popular de Puerto Rico)
BPOP
#2127
Rank
$9.42 B
Marketcap
๐บ๐ธ
United States
Country
$146.06
Share price
-0.61%
Change (1 day)
41.93%
Change (1 year)
๐ฆ Banks
๐ณ Financial services
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Cash on Hand
Net Assets
Annual Reports (10-K)
Popular, Inc. (Banco Popular de Puerto Rico)
Quarterly Reports (10-Q)
Submitted on 2026-05-08
Popular, Inc. (Banco Popular de Puerto Rico) - 10-Q quarterly report FY
Text size:
Small
Medium
Large
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0.01
Q1
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1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
10-Q
[X]
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended
March 31,
2026
or
[ ]
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number:
001-34084
POPULAR, INC.
(Exact name of registrant as specified in its charter)
Puerto Rico
66-0667416
(State or other jurisdiction of Incorporation or
(IRS Employer Identification Number)
organization)
Popular Center Building
209 Muñoz Rivera Avenue
Hato Rey
,
Puerto Rico
00918
(Address of principal executive offices)
(Zip code)
(
787
)
765-9800
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which
registered
Common Stock ($0.01 par value)
BPOP
The
NASDAQ Stock Market
6.125% Cumulative Monthly Income Trust
Preferred Securities
BPOPM
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]
Yes
[
]
No
Indicate by
check mark
whether the registrant
has submitted
electronically every
Interactive Data
File required to
be
submitted pursuant to
Rule 405 of
Regulation S-T (§
232.405 of this
chapter) during the
preceding 12 months
(or for
such shorter period that the registrant was required to submit such files).
[X]
Yes
[
]
No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
smaller reporting company, or an emerging growth company.
See definitions of “large accelerated filer”, “accelerated
filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
[X]
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
[X]
No
Indicate
the
number
of
shares
outstanding
of
each
of
the
issuer’s
classes
of
common
stock,
as
of
the
latest
practicable date:
Common Stock, $0.01 par value,
64,537,709
shares outstanding as of May 5, 2026.
2
POPULAR, INC.
INDEX
Part I – Financial Information
Page
Item 1. Financial Statements
Unaudited Consolidated Statements of Financial Condition
at March 31, 2026 and
December 31, 2025
6
Unaudited Consolidated Statements of Operations for
the quarters
ended March 31, 2026 and 2025
7
Unaudited Consolidated Statements of Comprehensive
Income for the
quarters
ended March 31, 2026 and 2025
8
Unaudited Consolidated Statements of Changes in
Stockholders’ Equity for the
quarters ended March 31, 2026 and 2025
9
Unaudited Consolidated Statements of Cash Flows for
the quarters
ended March 31, 2026 and 2025
11
Notes to Unaudited Consolidated Financial Statements
13
Item 2. Management’s Discussion and Analysis of Financial
Condition and
Results of Operations
105
Item 3. Quantitative and Qualitative Disclosures about
Market Risk
143
Item 4. Controls and Procedures
143
Part II – Other Information
Item 1. Legal Proceedings
144
Item 1A. Risk Factors
144
Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds
145
Item 3. Defaults Upon Senior Securities
145
Item 4. Mine Safety Disclosures
145
Item 5. Other information
145
Item 6. Exhibits
161
Signatures
162
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:
●
the
rate
of
growth
or
decline
in
the
economy
and
employment
levels,
as
well
as
general
business
and
economic
conditions
in
the
geographic
areas
we
serve
and,
in
particular,
in
the
Commonwealth
of
Puerto
Rico
(the
“Commonwealth” or “Puerto Rico”), where a significant
portion of our business is concentrated;
●
adverse economic conditions, including high levels of inflation, and geopolitical conditions, including wars and conflicts,
that
adversely affect
housing prices,
the
job market,
consumer confidence
and spending
habits which
may
affect
in
turn, among other things, our level of non-performing
assets, charge-offs and provision expense;
●
changes in interest rates and market liquidity,
which may reduce interest margins, impact funding sources, reduce loan
originations, affect
our ability
to originate
and distribute
financial products
in the
primary and
secondary markets
and
impact the value of our investment portfolio and
our ability to return capital to our shareholders;
●
the
impact
of
bank
failures
or
adverse
developments
at
other
banks
and
related
negative
media
coverage
of
the
banking industry in general on investor and depositor
sentiment regarding the stability and liquidity of
banks;
●
the impact of the current fiscal and economic challenges of Puerto Rico and
the measures taken and to be taken by the
Puerto
Rico
Government
and
the
Federally-appointed
oversight
board
on
the
economy,
our
customers
and
our
business;
●
the
amount of
Puerto Rico
public sector
deposits held
at
the Corporation,
whose future
balances are
uncertain and
difficult
to
predict
and
may
be
impacted
by
factors
such
as
the
amount
of
Federal
funds
received
by
the
P.R.
Government
and
the
rate
of
expenditure
of
such
funds,
as
well
as
the
financial
condition,
liquidity
and
cash
management practices of the Puerto Rico Government
and its instrumentalities;
●
unforeseen or
catastrophic events,
including extreme
weather events
such as
hurricanes and
other natural
disasters,
man-made disasters, acts of violence, war
or conflicts,
or pandemics, epidemics and other health-related crises, or
the
fear of any such
event occurring, any of
which could cause adverse consequences for
our business, including, but
not
limited to, disruptions in our operations;
●
our ability to achieve the
expected benefits from our transformation initiatives, including our
ability to achieve projected
earnings, efficiencies and
return on tangible
common equity and
accurately anticipate costs
and expenses associated
therewith;
●
our ability to execute capital actions, including with
respect to share repurchases and dividends;
4
●
the fiscal and monetary policies of the federal government
and its agencies;
●
changes in
federal
bank regulatory
and supervisory
policies, including
required levels
of
capital, liquidity,
resolution-
related requirements and the impact of other proposed
capital standards on our capital ratios;
●
the impact of any future U.S. government
shutdown;
●
changes
in
and
uncertainty
regarding
federal
funding,
tax
and
trade
policies,
and
federal
rulemaking,
supervision,
examination and enforcement priorities;
●
adjustments to or additional Federal Deposit Insurance
Corporation (“FDIC”) assessments;
●
regulatory approvals
that may
be necessary
to undertake
certain actions
or consummate
strategic transactions,
such
as acquisitions and dispositions;
●
the
relative strength
or
weakness
of
the
consumer and
commercial credit
sectors
and
of
the
real
estate markets
in
Puerto Rico and the other markets in which
our borrowers are located;
●
a deterioration in the credit quality of our
clients, customers and counterparties;
●
the performance of the stock and bond markets;
●
competition in the financial services industry;
●
possible legislative, tax or regulatory changes;
●
a failure
in or
breach of
our operational
or security
systems or
infrastructure or
those of
Evertec, Inc.,
our provider
of
core financial
transaction processing and
information technology services,
or of
third parties
providing services
to us,
including
as
a
result
of
cyberattacks, e-fraud,
denial-of-services and
computer intrusion,
that
might result
in,
among
other
things,
loss
or
breach
of
customer
data,
disruption
of
services,
reputational
damage
or
additional
costs
to
Popular;
●
changes in market rates and prices which may
adversely impact the value of financial assets
and liabilities;
●
potential judgments,
claims, damages,
penalties, fines,
enforcement actions
and
reputational damage
resulting from
pending or future litigation and regulatory or government
investigations or actions;
●
changes in accounting standards, rules and interpretations;
●
our ability to grow our core businesses;
●
decisions to downsize, sell or close branches or business
units or otherwise change our business mix;
and
●
management’s ability to identify and manage these and
other risks.
Moreover, the
outcome of any
legal and
regulatory proceedings, as
discussed in “Part
II, Item
1. Legal Proceedings,”
is inherently
uncertain and depends on judicial interpretations of law and the findings of regulators, judges and/or juries. Investors should refer to
the Corporation’s Annual
Report on Form
10-K for the
year ended December 31,
2025 (the “2025
Form 10-K”), as
well as “Part
II,
Item 1A” of our Quarterly
Report on this 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
5
update or revise any such forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date
of such statements.
6
POPULAR, INC.
CONSOLIDATED STATEMENTS
OF FINANCIAL CONDITION
(UNAUDITED)
[UNAUDITED]
March 31,
December 31,
(In thousands, except share information)
2026
2025
Assets:
Cash and due from banks
$
384,922
$
402,755
Money market investments:
Time deposits with other banks
4,655,699
4,626,506
Total money market investments
4,655,699
4,626,506
Trading account debt securities, at fair value
30,449
36,569
Debt securities available-for-sale, at fair
value:
Pledged securities with creditors’ right to repledge
30,289
30,687
Other debt securities available-for-sale
21,702,980
20,544,285
Debt securities available-for-sale
21,733,269
20,574,972
Debt securities held-to-maturity, at amortized cost:
Pledged securities with creditors’ right to repledge
4,705
9,298
Other debt securities held-to-maturity
6,957,954
7,318,231
Debt securities held-to-maturity (fair
value 2026 - $
6,963,223
; 2025 - $
7,363,587
)
6,962,659
7,327,529
Less – Allowance for credit losses
5,900
5,812
Debt securities held-to-maturity, net
6,956,759
7,321,717
Equity securities (realizable value 2026 -
$
217,696
; 2025 - $
230,388
)
217,167
229,848
Loans held-for-sale, at fair value
5,603
9,998
Loans held-in-portfolio
39,703,844
39,749,142
Less – Unearned income
414,142
421,624
Allowance for credit losses
823,729
808,056
Total loans held-in-portfolio, net
38,465,973
38,519,462
Premises and equipment, net
706,233
685,820
Other real estate
45,680
42,433
Accrued income receivable
308,617
300,824
Mortgage servicing rights, at fair value
94,232
96,356
Other assets
1,731,769
1,705,977
Goodwill
789,954
789,954
Other intangible assets
4,692
5,076
Total assets
$
76,131,018
$
75,348,267
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing
$
15,785,788
$
15,304,209
Interest bearing
51,825,528
50,885,884
Total deposits
67,611,316
66,190,093
Assets sold under agreements to repurchase
34,576
39,001
Other short-term borrowings
350,000
650,000
Notes payable
734,981
759,577
Other liabilities
1,089,059
1,460,517
Total liabilities
69,819,932
69,099,188
Commitments and contingencies (Refer
to Note 18)
Stockholders’ equity:
Preferred stock,
30,000,000
shares authorized;
885,726
shares issued and outstanding (2025
-
885,726
)
22,143
22,143
Common stock, $
0.01
par value;
170,000,000
shares authorized;
104,936,510
shares issued (2025 -
104,921,229
) and
64,654,788
shares outstanding (2025 -
65,719,385
)
1,049
1,049
Surplus
4,928,636
4,924,296
Retained earnings
5,403,176
5,206,497
Treasury stock - at cost,
40,281,722
shares (2025 -
39,201,844
)
(
2,875,230
)
(
2,722,819
)
Accumulated other comprehensive loss, net
of tax
(
1,168,688
)
(
1,182,087
)
Total stockholders’ equity
6,311,086
6,249,079
Total liabilities and stockholders’ equity
$
76,131,018
$
75,348,267
The accompanying notes are an integral part of
these Consolidated Financial Statements.
7
POPULAR, INC.
CONSOLIDATED STATEMENTS
OF OPERATIONS
(UNAUDITED)
Quarters ended March 31,
(In thousands, except per share information)
2026
2025
Interest income:
Loans
$
702,149
$
666,673
Money market investments
44,240
70,166
Investment securities
200,827
180,159
Total interest income
947,216
916,998
Interest expense:
Deposits
259,418
297,863
Short-term borrowings
5,703
1,426
Long-term debt
11,915
12,112
Total interest expense
277,036
311,401
Net interest income
670,180
605,597
Provision for credit losses
75,886
64,081
Net interest income after provision for credit losses
594,294
541,516
Non-interest income:
Service charges on deposit accounts
38,766
39,054
Other service fees
102,921
94,508
Mortgage banking activities
4,213
3,689
Net gain (loss), including impairment on equity securities
1,029
(
414
)
Net gain on trading account debt securities
261
520
Adjustments to indemnity reserves on loans sold
35
173
Other operating income
18,401
14,531
Total non-interest income
165,626
152,061
Operating expenses:
Personnel costs
216,069
212,713
Net occupancy expenses
27,299
27,218
Equipment expenses
5,229
5,302
Other taxes
17,677
18,725
Professional fees
25,553
26,825
Technology and software expenses
89,139
83,668
Processing and transactional services
39,087
37,781
Communications
4,509
4,904
Business promotion
22,860
23,675
Deposit insurance
9,917
10,035
Other real estate owned (OREO) expense (income)
(
4,618
)
(
3,330
)
Other operating expenses
14,205
22,899
Amortization of intangibles
384
597
Total operating expenses
467,310
471,012
Income before income tax
292,610
222,565
Income tax expense
46,936
45,063
Net Income
$
245,674
$
177,502
Net Income Applicable to Common Stock
$
245,321
$
177,149
Net Income per Common Share - Basic
$
3.78
$
2.56
Net Income per Common Share - Diluted
$
3.78
$
2.56
The accompanying notes are an integral part of
these Consolidated Financial Statements.
8
POPULAR, INC.
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
(UNAUDITED)
Quarters ended March 31,
(In thousands)
2026
2025
Net income
$
245,674
$
177,502
Other comprehensive income before tax:
Foreign currency translation adjustment
(
256
)
(
6,646
)
Amortization of net losses of pension and
postretirement benefit plans
2,258
2,273
Unrealized holding (losses) gains on debt securities arising
during the period
(
33,096
)
165,984
Amortization of unrealized losses of debt securities transfer
from available-for-sale to held-to-
maturity
46,876
45,311
Other comprehensive income before tax
15,782
206,922
Income tax expense
(
2,383
)
(
35,669
)
Total other comprehensive income, net of tax
13,399
171,253
Comprehensive income, net of tax
$
259,073
$
348,755
Tax effect allocated to each component of other comprehensive income:
Quarters ended March 31,
(In thousands)
2026
2025
Amortization of net losses of pension and postretirement
benefit plans
(
847
)
(
852
)
Unrealized holding (losses) gains on debt securities arising
during the period
7,839
(
25,755
)
Amortization of unrealized losses of debt securities
transfer from available-for-sale to held-to-
maturity
(
9,375
)
(
9,062
)
Income tax expense
$
(
2,383
)
$
(
35,669
)
The accompanying notes are an integral part of
these Consolidated Financial Statements.
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, 2024
$
1,048
$
22,143
$
4,908,693
$
4,570,957
$
(
2,228,535
)
$
(
1,661,240
)
$
5,613,066
Net income
177,502
177,502
Issuances of common stock
1
1,769
1,770
Dividends declared:
Common stock
[1]
(
48,409
)
(
48,409
)
Preferred stock
(
353
)
(
353
)
Common stock purchases
[2]
(
125,980
)
(
125,980
)
Stock based compensation
2,424
8,422
10,846
Other comprehensive income, net of tax
171,253
171,253
Balance at March 31, 2025
$
1,049
$
22,143
$
4,912,886
$
4,699,697
$
(
2,346,093
)
$
(
1,489,987
)
$
5,799,695
Balance at December 31, 2025
$
1,049
$
22,143
$
4,924,296
$
5,206,497
$
(
2,722,819
)
$
(
1,182,087
)
$
6,249,079
Net income
245,674
245,674
Issuances of common stock
1,824
1,824
Dividends declared:
Common stock
[1]
(
48,665
)
(
48,665
)
Preferred stock
(
353
)
(
353
)
Common stock purchases
[3]
(
160,228
)
(
160,228
)
Stock based compensation
2,516
7,817
10,333
Other comprehensive income, net of tax
13,399
13,399
Other adjustments
23
23
Balance at March 31, 2026
$
1,049
$
22,143
$
4,928,636
$
5,403,176
$
(
2,875,230
)
$
(
1,168,688
)
$
6,311,086
[1]
Dividends declared per common share during the quarter
ended March 31, 2026 - $
0.75
(2025 - $
0.70
).
[2]
Includes common
stock repurchases
of $
122.3
million as
part of
the 2024
common stock
repurchase program.
Refer to
Note 15
for additional
information.
[3]
Includes common
stock repurchases
of $
155.2
million as
part of
the 2025
common stock
repurchase program.
Refer to
Note 15
for additional
information.
10
POPULAR, INC.
CONSOLIDATED STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
For the period ended
March 31,
March 31,
Disclosure of changes in number of shares:
2026
2025
Preferred Stock:
Balance at beginning and end of period
885,726
885,726
Common Stock – Issued:
Balance at beginning of period
104,921,229
104,849,460
Issuances of common stock
15,281
19,729
Balance at end of period
104,936,510
104,869,189
Treasury stock
(
40,281,722
)
(
35,885,041
)
Common Stock – Outstanding
64,654,788
68,984,148
The accompanying notes are an integral part of these Consolidated
Financial Statements.
11
POPULAR, INC.
CONSOLIDATED STATEMENTS
OF CASH FLOWS
(UNAUDITED)
Quarters ended March 31,
(In thousands)
2026
2025
Cash flows from operating activities:
Net income
$
245,674
$
177,502
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for credit losses
75,886
64,081
Amortization of intangibles
384
597
Depreciation and amortization of premises and equipment
13,538
12,280
Net accretion of discounts and amortization of premiums and
deferred fees
(
57,477
)
(
68,861
)
Interest capitalized on loans subject to the temporary payment
moratorium or loss mitigation alternatives
(
1,238
)
(
1,357
)
Share-based compensation
16,228
11,028
Fair value adjustments on mortgage servicing rights
2,640
3,570
Adjustments to indemnity reserves on loans sold
(
35
)
(
173
)
Earnings from investments under the equity method, net
of dividends or distributions
(
12,968
)
(
8,621
)
Deferred income tax (benefit) expense
(
564
)
8,109
Loss (gain) on:
Disposition of premises and equipment and other productive
assets
59
(
42
)
Sale of loans, including valuation adjustments on loans
held-for-sale and mortgage banking activities
(
317
)
(
194
)
Sale of foreclosed assets, including write-downs
(
2,309
)
(
1,033
)
Acquisitions of loans held-for-sale
(
3,583
)
(
810
)
Proceeds from sale of loans held-for-sale
11,057
7,098
Net originations on loans held-for-sale
(
10,194
)
(
6,741
)
Net decrease (increase) in:
Trading debt securities
17,573
6,071
Equity securities
(
849
)
508
Accrued income receivable
(
7,770
)
725
Other assets
(
2,087
)
12,864
Net (decrease) increase in:
Interest payable
(
7,280
)
(
7,370
)
Pension and other postretirement benefits obligation
1,306
1,079
Other liabilities
(
86,060
)
(
38,252
)
Total adjustments
(
54,060
)
(
5,444
)
Net cash provided by operating activities
191,614
172,058
Cash flows from investing activities:
Net (increase) decrease in money market investments
(
29,624
)
186,609
Purchases of investment securities:
Available-for-sale
(
10,385,670
)
(
9,425,086
)
Equity
(
10,139
)
(
9,224
)
Proceeds from calls, paydowns, maturities and redemptions
of investment securities:
Available-for-sale
8,954,537
8,429,813
Held-to-maturity
409,096
152,441
Proceeds from sale of investment securities:
Equity
23,670
13,361
Net repayments (disbursements)
on loans
107,425
(
118,418
)
Proceeds from sale of loans
14,706
39,055
Acquisition of loan portfolios
(
160,670
)
(
127,291
)
Payments to acquire equity method investments
(
1,000
)
-
Acquisition of premises and equipment and other productive
assets
(
36,680
)
(
51,526
)
Proceeds from sale of:
Premises and equipment and other productive assets
277
197
Foreclosed assets
17,602
23,155
Net cash used in investing activities
(
1,096,470
)
(
886,914
)
12
Cash flows from financing activities:
Net increase (decrease) in:
Deposits
1,425,562
939,913
Assets sold under agreements to repurchase
(
4,424
)
2,435
Other short-term borrowings
(
300,000
)
(
25,000
)
Payments of notes payable
(
25,000
)
(
63,522
)
Principal payments of finance leases
(
2,030
)
(
908
)
Proceeds from issuances of common stock
1,823
1,770
Dividends paid
(
49,949
)
(
49,899
)
Net payments for repurchase of common stock
(
154,742
)
(
125,341
)
Payments related to tax withholding for share-based compensation
(
4,648
)
(
3,376
)
Net cash provided by financing activities
886,592
676,072
Net decrease in cash and due from banks, and restricted
cash
(
18,264
)
(
38,784
)
Cash and due from banks, and restricted cash at beginning
of period
412,989
429,406
Cash and due from banks, and restricted cash at the end of
the period
$
394,725
$
390,622
The accompanying notes are an integral part of these Consolidated
Financial Statements.
13
Notes to Consolidated Financial
Statements
(Unaudited)
Note 1 -
Nature of operations
14
Note 2 -
Basis of presentation
15
Note 3 -
New accounting pronouncements
16
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 -
Other real estate owned
65
Note 10 -
Other assets
66
Note 11 -
Goodwill and other intangible assets
68
Note 12 -
Deposits
69
Note 13 -
Borrowings
70
Note 14 -
Other liabilities
72
Note 15 -
Stockholders’ equity
73
Note 16 -
Other comprehensive income (loss)
74
Note 17 -
Guarantees
76
Note 18 -
Commitments and contingencies
77
Note 19-
Non-consolidated variable interest entities
80
Note 20 -
Related party transactions
82
Note 21 -
Fair value measurement
83
Note 22 -
Fair value of financial instruments
89
Note 23 -
Net income per common share
92
Note 24 -
Revenue from contracts with customers
93
Note 25 -
Stock-based compensation
94
Note 26 -
Income taxes
97
Note 27 -
Supplemental disclosure on the consolidated
statements of cash flows
100
Note 28 -
Segment reporting
101
14
Note 1 – Nature of Operations
Popular,
Inc. (the
“Corporation” or
“Popular”) is
a diversified,
publicly owned
financial holding
company subject
to the
supervision
and
regulation
of
the
Board
of
Governors
of
the
Federal
Reserve
System.
The
Corporation
has
operations
in
Puerto
Rico,
the
mainland United
States (“U.S.”)
and the
U.S. and
British Virgin
Islands. In
Puerto Rico,
the Corporation
provides retail,
mortgage,
and
commercial banking
services,
as well
as
auto and
equipment leasing
and financing
through its
principal banking
subsidiary,
Banco Popular
de Puerto
Rico (“BPPR”),
as well
as broker-dealer
and insurance
services through
specialized subsidiaries.
In the
U.S.
mainland,
the
Corporation
provides
retail
and
commercial
banking
services,
as
well
as
equipment
leasing
and
financing,
through
its
New
York-chartered
banking subsidiary,
Popular
Bank
(“PB”
or
“Popular
U.S.”),
which
has
branches
located
in
New
York, New Jersey, and Florida.
15
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,
2025 was
derived from
audited
Consolidated Financial Statements of the Corporation
for the year ended December 31, 2025.
Certain
information
and
notes
to
the
financial
statements
disclosures
which
would
normally
be
included
in
financial
statements
prepared in
accordance with
Accounting Principles
Generally Accepted
in the
United States
of America
(U.S. GAAP),
have been
condensed or omitted from the unaudited financial statements pursuant
to the rules and regulations of the
Securities and Exchange
Commission.
Accordingly,
these
financial
statements
should
be
read
in
conjunction
with
the
audited
Consolidated
Financial
Statements of
the Corporation
for the
year ended
December 31,
2025,
included in
the 2025
Form 10-K.
Operating results
for the
interim periods disclosed herein are not necessarily
indicative of the results that may be expected
for a full year or any future period.
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.
16
Note 3 - New accounting pronouncements
Recently Adopted Accounting Standards Updates
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
Financial Accounting
Standards Board
("FASB")
issued
Accounting
Standards
Update
("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 Accounting Standards Codification
("ASC") 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
was
not
impacted
by
the
adoption
of
this
ASU
since
the
update
does
not
require
accounting
changes
or
new
presentation
or
disclosure
requirements.
The
practical
expedient was not applied.
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
was
not
impacted
by
the
adoption
of
this
ASU,
but
it
will
prospectively consider this guidance for
any
future
transactions
involving
induced conversions.
17
Accounting Standards Updates Not Yet Adopted
Standard
Description
Date of adoption
Effect on the financial statements
FASB ASU 2026-01,
Equity (Topic 505) - Initial
Measurement of Paid-in-
Kind Dividends
on Equity-Classified
Preferred Stock
The
FASB
issued
ASU
2026
‑
01
in
April
2026,
which
establishes
authoritative
guidance
on
the
initial
measurement
of
paid
‑
in
‑
kind
(PIK)
dividends
on
equity
‑
classified
preferred
stock.
The
update
establishes
a
consistent
measurement requirement for PIK dividends
but does
not address
when such
dividends
should
be
recognized.
It
requires
PIK
dividends to
be initially
measured using
the
stated
PIK
dividend
rate
in
the
preferred
stock
agreement,
generally
applied
to
the
liquidation preference of the preferred stock.
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.
This
ASU
is
not
expected
to have a material impact.
FASB ASU 2025-10,
Government Grants (Topic
832) - Accounting for
Government Grants
Received by Business
Entities
The
FASB
issued
ASU
2025-10
in
December
2025,
which
establishes
the
accounting
for
government
grants
received
by
a
business
entity.
The
update
establishes
recognition,
measurement,
and
disclosure
requirements
for
government
grants.
It
allows
asset
related
grants to
be
recognized either
as deferred
income or
as
an adjustment
to the
cost basis
of an
asset
and
income-related
grants
as
deferred
income.
January 1, 2029
The Corporation
is currently
evaluating
any
impact
that
the
adoption
of
this
guidance
will
have
on
its
financial
statements
and
presentation
and
disclosures.
FASB ASU 2025-09,
Derivatives and Hedging
(Topic 815) - Hedge
Accounting Improvements
The
FASB
issued
ASU
2025-09
in
November 2025, which aims to improve and
broaden
hedge
accounting
under
ASC
Topic
815
by
allowing
entities
to
group
forecasted
transaction
with
similar
risk
exposures,
provides
a
model
for
hedging
choose-your
rate
debt,
expands
hedge
accounting
for
forecasted
purchases
and
sales of non
financial assets, eliminates net
written
option
limitations
for
certain
compound
derivatives,
and
resolves
recognition
mismatches
in
dual
hedging
strategies
involving
foreign
‑
currency
‑
denominated debt.
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.
FASB ASU 2025-08,
Financial Instruments -
Credit Losses (Topic 326)
- Purchased Loans
The
FASB
issued
ASU
2025-08
in
November 2025, which aims
to simplify and
reduce the
complexity of
the accounting
for
purchased loans under ASC Topic
326. The
update
expands
the
population
of
loans
subject to
the gross-up
approach to
include
purchased
seasoned
loans,
regardless
whether they had credit deterioration.
January 1, 2027
The Corporation
is currently
evaluating
any
impact
that
the
adoption
of
this
guidance
will
have
on
its
financial
statements
and
presentation
and
disclosures.
18
Accounting Standards Updates Not Yet Adopted
Standard
Description
Date of adoption
Effect on the financial statements
FASB ASU 2025-07,
Derivatives and Hedging
(Topic 815) and Revenue
from Contracts with
Customers (Topic 606) -
Derivatives Scope
Refinements and Scope
Clarification for Share-
Based Noncash
Consideration from a
Customer in a Revenue
Contract
The
FASB
issued
ASU
2025-07
in
September 2025, which refines the scope of
derivative accounting under
ASC Topic
815
and
clarifies
the
treatment
of
share-based
noncash
consideration
under
ASC
Topic
606.
The
update
reduces
complexity
and
diversity
in
application.
Narrows
the
scope
of derivative
accounting under
ASC 815
for
certain
contracts
whose
underlyings
are
based
on
a
party’s
own
operations
or
activities;
and
clarifies
that
ASC
606
governs
share
‑
based
noncash
consideration
received
from
a
customer
until
the
entity’s
right
becomes
unconditional.
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.
FASB ASU 2025-06,
Intangibles - Goodwill and
Other - Internal-Use
Software (Subtopic 350-
40) - Targeted
Improvements to the
Accounting for Internal-
Use Software
The
FASB
issued
ASU
2025-06
in
September 2025, which seeks to modernize
the
accounting
for
internal-use
software
under
ASC
Subtopic
350-40,
Intangibles—
Goodwill and Other—Internal-Use Software.
The
update
replaces
the
traditional
stage-
based
model
(preliminary,
development,
post-implementation)
with
a
principles-
based framework that better
reflects current
software
development
practices,
including
agile and cloud-based approaches.
January 1, 2028
The Corporation
is currently
evaluating
the
impact
that
the
adoption
of
this
guidance
will
have
on
our
accounting
for
internal
use
software
considering
our
development
practices
which
may
include
agile
and
cloud-based
approaches.
FASB ASU 2025-04,
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.
19
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
the
impact
that
the
adoption
of
this
guidance
will
have
on
its
financial
statements
and
presentation
and
disclosures.
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 $
2.8
billion at March 31, 2026 (December 31, 2025
-
$
2.7
billion).
Cash
and
due
from
banks,
as
well
as
other
highly
liquid
securities,
are
used
to
cover
these
required
average
reserves.
At March 31,
2026, the Corporation
held $
65
million in restricted
assets in the
form of funds
deposited in money
market accounts,
debt
securities
available
for
sale
and
equity
securities
(December
31,
2025
-
$
64
million).
The
restricted
assets
held
in
debt
securities available for sale and equity securities consist primarily of assets
held for the Corporation’s non-qualified retirement plans
and fund deposits guaranteeing possible liens or encumbrances
over the title of insured properties.
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 March 31, 2026 and December 31,
2025.
At March 31, 2026
Gross
Gross
Weighted
Amortized
unrealized
unrealized
Fair
average
(In thousands)
cost
gains
losses
value
yield
U.S. Treasury securities
Within 1 year
$
10,459,758
$
1,286
$
1,727
$
10,459,317
3.52
%
After 1 to 5 years
6,603,717
10,645
35,638
6,578,724
3.69
Total U.S. Treasury
securities
17,063,475
11,931
37,365
17,038,041
3.59
Collateralized mortgage obligations - federal agencies
Within 1 year
93
-
-
93
1.71
After 1 to 5 years
3,866
-
69
3,797
1.48
After 5 to 10 years
10,575
-
481
10,094
2.46
After 10 years
87,224
125
6,211
81,138
2.93
Total collateralized
mortgage obligations - federal agencies
101,758
125
6,761
95,122
2.82
Mortgage-backed securities - federal agencies
Within 1 year
869
-
7
862
2.04
After 1 to 5 years
87,724
15
2,689
85,050
2.22
After 5 to 10 years
1,093,830
162
83,023
1,010,969
1.75
After 10 years
4,289,433
708
787,666
3,502,475
1.77
Total mortgage-backed
securities - federal agencies
5,471,856
885
873,385
4,599,356
1.77
Other
Within 1 year
750
-
-
750
4.39
Total other
750
-
-
750
4.39
Total debt securities
available-for-sale
[1]
$
22,637,839
$
12,941
$
917,511
$
21,733,269
3.15
%
[1]
Includes $
15.1
billion pledged to secure government and trust
deposits, credit facilities and loan servicing agreements that
the secured parties
are not permitted to sell or repledge the collateral, of which
$
13.9
billion serve as collateral for public funds.
The Corporation had unpledged
Available for Sale securities with a fair value of
$
6.6
billion that could be used to increase its borrowing
facilities.
22
At December 31, 2025
Gross
Gross
Weighted
Amortized
unrealized
unrealized
Fair
average
(In thousands)
cost
gains
losses
value
yield
U.S. Treasury securities
Within 1 year
$
10,154,698
$
4,716
$
1,528
$
10,157,886
3.44
%
After 1 to 5 years
5,555,079
29,795
19,306
5,565,568
3.70
Total U.S. Treasury
securities
15,709,777
34,511
20,834
15,723,454
3.53
Collateralized mortgage obligations - federal agencies
Within 1 year
152
-
1
151
1.97
After 1 to 5 years
4,879
-
88
4,791
1.49
After 5 to 10 years
11,524
-
482
11,042
2.45
After 10 years
90,018
180
5,941
84,257
2.92
Total collateralized
mortgage obligations - federal agencies
106,573
180
6,512
100,241
2.80
Mortgage-backed securities - federal agencies
Within 1 year
963
1
9
955
2.08
After 1 to 5 years
65,843
11
1,530
64,324
2.35
After 5 to 10 years
1,030,661
256
67,116
963,801
1.85
After 10 years
4,527,032
881
806,466
3,721,447
1.75
Total mortgage-backed
securities - federal agencies
5,624,499
1,149
875,121
4,750,527
1.78
Other
Within 1 year
750
-
-
750
4.43
Total other
750
-
-
750
4.43
Total debt securities
available-for-sale
[1]
$
21,441,599
$
35,840
$
902,467
$
20,574,972
3.07
%
[1]
Includes $
14.3
billion pledged to secure government and trust deposits,
assets sold under agreements to repurchase, credit facilities
and loan
servicing agreements that the secured parties are not permitted
to sell or repledge the collateral, of which $
13.2
billion serve as collateral for public
funds. The Corporation had unpledged Available for Sale
securities with a fair value of $
6.3
billion that could be used to increase its borrowing
facilities.
The weighted
average yield
on debt
securities available-for-sale
is based
on amortized
cost; therefore,
it
does not
give
effect to
changes in fair value.
Debt
securities
not
due
on
a
single
contractual
maturity
date,
such
as
mortgage-backed
securities
and
collateralized
mortgage
obligations, are classified
in 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 March 31, 2026, 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
no debt securities sold during the quarters ended
March 31, 2026 and 2025.
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
March 31, 2026 and December 31, 2025.
At March 31, 2026
Less than 12 months
12 months or more
Total
Gross
Gross
Gross
Fair
unrealized
Fair
unrealized
Fair
unrealized
(In thousands)
value
losses
value
losses
value
losses
U.S. Treasury securities
$
11,616,601
$
17,111
$
442,317
$
20,254
$
12,058,918
$
37,365
Collateralized mortgage obligations - federal agencies
4,568
45
75,409
6,716
79,977
6,761
Mortgage-backed securities -federal agencies
212,099
9,678
4,335,138
863,707
4,547,237
873,385
Total debt securities
available-for-sale in an unrealized loss position
$
11,833,268
$
26,834
$
4,852,864
$
890,677
$
16,686,132
$
917,511
At December 31, 2025
Less than 12 months
12 months or more
Total
Gross
Gross
Gross
Fair
unrealized
Fair
unrealized
Fair
unrealized
(In thousands)
value
losses
value
losses
value
losses
U.S. Treasury securities
$
992,083
$
82
$
943,699
$
20,752
$
1,935,782
$
20,834
Collateralized mortgage obligations - federal agencies
1,481
3
83,266
6,509
84,747
6,512
Mortgage-backed securities - federal agencies
222,333
9,975
4,469,097
865,146
4,691,430
875,121
Total debt securities
available-for-sale in an unrealized loss position
$
1,215,897
$
10,060
$
5,496,062
$
892,407
$
6,711,959
$
902,467
Debt securities available-for-sale
in a continuous
unrealized loss position
for
less than twelve
months of $
11.8
billion as of
March
31, 2026, compared to $
1.2
billion on December 31, 2025, primarily driven by an increase market rates, which resulted in a
decline
in the fair value of fixed-rate securities including U.S.
Treasury securities and mortgage-backed securities.
As of March 31, 2026, the portfolio of available-for-sale debt securities reflects gross unrealized losses of $
0.9
billion (December 31,
2025
-
$
0.9
billion),
driven
mainly
by
mortgage-backed
securities,
impacted
by
the
higher-interest
rate
environment
and
the
portfolio’s longer
duration. The
portfolio of
available-for-sale debt securities
is comprised mainly
of U.S
Treasuries and
obligations
from
the
U.S.
Government,
its
agencies
or
government
sponsored
entities,
including
Federal
National
Mortgage
Association
(“FNMA”), Federal Home Loan Mortgage Corporation (“FHLMC”) and Government National Mortgage Association (“GNMA”). These
securities carry
an explicit
or implicit
guarantee from the
U.S. Government,
are highly
rated by
major rating
agencies, and
have a
long history of no credit losses. Accordingly, the Corporation applies a zero-credit
loss assumption.
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
March 31,
2026 and
December 31,
2025.
At March 31, 2026
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
$
2,755,510
$
2,717,438
$
-
$
2,717,438
$
1,757
$
139
$
2,719,056
1.15
%
After 1 to 5 years
4,403,161
4,195,564
-
4,195,564
4,137
-
4,199,701
1.30
Total U.S. Treasury
securities
7,158,671
6,913,002
-
6,913,002
5,894
139
6,918,757
1.24
Obligations of Puerto Rico, States and
political subdivisions
Within 1 year
2,720
2,720
13
2,707
11
-
2,718
6.45
After 1 to 5 years
3,910
3,910
27
3,883
12
8
3,887
1.84
After 5 to 10 years
450
450
14
436
7
-
443
5.81
After 10 years
35,126
35,126
5,846
29,280
2,672
1,795
30,157
1.43
Total obligations of
Puerto Rico, States and
political subdivisions
42,206
42,206
5,900
36,306
2,702
1,803
37,205
1.83
Collateralized mortgage obligations - federal
agencies
After 10 years
1,491
1,491
-
1,491
-
190
1,301
2.87
Total collateralized
mortgage obligations -
federal agencies
1,491
1,491
-
1,491
-
190
1,301
2.87
Securities in wholly owned statutory business
trusts
After 5 to 10 years
5,960
5,960
-
5,960
-
-
5,960
6.33
Total securities
in wholly owned statutory
business trusts
5,960
5,960
-
5,960
-
-
5,960
6.33
Total debt securities
held-to-maturity [2]
$
7,208,328
$
6,962,659
$
5,900
$
6,956,759
$
8,596
$
2,132
$
6,963,223
1.25
%
[1]
Book value includes $
245
million of unrealized loss which remains in Accumulated
other comprehensive (loss) income (AOCI) related
to certain
securities previously transferred from available-for-sale securities
portfolio to the held-to-maturity securities portfolio.
[2]
Includes $
6.9
billion pledged to secure public and trust deposits that
the secured parties are not permitted to sell or repledge
the collateral.
The
Corporation had unpledged held-to-maturities securities with
a fair value of $
94.9
million that could be used to increase its borrowing facilities.
25
At December 31, 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
$
2,558,293
$
2,519,071
$
-
$
2,519,071
$
5,224
$
110
$
2,524,185
1.31
%
After 1 to 5 years
5,003,219
4,749,896
-
4,749,896
35,910
-
4,785,806
1.27
Total U.S. Treasury
securities
7,561,512
7,268,967
-
7,268,967
41,134
110
7,309,991
1.28
Obligations of Puerto Rico, States and
political subdivisions
`
Within 1 year
2,605
2,605
5
2,600
4
-
2,604
6.43
After 1 to 5 years
12,508
12,508
39
12,469
24
87
12,406
3.49
After 5 to 10 years
450
450
15
435
15
-
450
5.81
After 10 years
35,544
35,544
5,753
29,791
2,908
1,829
30,870
1.43
Total obligations of
Puerto Rico, States and
political subdivisions
51,107
51,107
5,812
45,295
2,951
1,916
46,330
2.22
Collateralized mortgage obligations - federal
agencies
After 10 years
1,495
1,495
-
1,495
-
189
1,306
2.87
Total collateralized
mortgage obligations -
federal agencies
1,495
1,495
-
1,495
-
189
1,306
2.87
Securities in wholly owned statutory business
trusts
After 5 to 10 years
5,960
5,960
-
5,960
-
-
5,960
6.33
Total securities
in wholly owned statutory
business trusts
5,960
5,960
-
5,960
-
-
5,960
6.33
Total debt securities
held-to-maturity [2]
$
7,620,074
$
7,327,529
$
5,812
$
7,321,717
$
44,085
$
2,215
$
7,363,587
1.29
%
[1]
Book value includes $
293
million of unrealized loss which remains in Accumulated
other comprehensive (loss) income (AOCI) related
to certain securities
previously transferred from available-for-sale securities portfolio
to the held-to-maturity securities portfolio.
[2]
Includes $
7.3
billion pledged to secure public and trust deposits that
the secured parties are not permitted to sell or repledge
the collateral. The
Corporation had unpledged held-to-maturities securities with
a fair value of $
98.8
million that could be used to increase its borrowing facilities.
Debt securities not due on a single contractual maturity date,
such as collateralized mortgage obligations, are classified in the period
of final
contractual maturity.
The expected
maturities of
collateralized mortgage
obligations and
certain other
securities may
differ
from their contractual maturities because they may be
subject to prepayments or may be called
by the issuer.
Credit Quality Indicators
The following
describes the
credit quality
indicators by
major security
type that
the Corporation
takes into
account to
develop the
estimate of the allowance for credit losses for investment
securities held-to-maturity.
As discussed in
Note 2 of
the 2025 Form
10-K, U.S. Treasury
securities carry an explicit
guarantee from the U.S.
Government are
highly rated by major rating
agencies and have a long
history of no credit losses. Accordingly,
the Corporation applies a zero-credit
loss assumption and no allowance for credit losses
(“ACL”) for these securities has been established.
At March 31, 2026
and December 31, 2025, the
“Obligations of Puerto Rico, States and
political subdivisions” classified as held-to-
maturity,
included
securities
issued
by
municipalities
of
Puerto
Rico
that
are
generally
not
rated
by
a
credit
rating
agency.
The
Corporation performs periodic credit quality
reviews of these securities and internally
assigns standardized credit risk ratings based
on
its
evaluation. For
the
definitions
of
the
obligor
risk
ratings, refer
to
the
Credit
Quality section
of
Note
8
to
the
Consolidated
Financial
Statements.
This
includes
an
amortized
cost
of
$
7.1
million
of
general
and
special
obligation
bonds
issued
by
three
municipalities
of
Puerto
Rico,
of
which
$
6.3
million
have
a
“Pass”
rating,
that
are
payable
primarily
from
certain
property
taxes
imposed by the issuing municipality (compared to $
8.7
million and $
7.9
million, respectively, at December 31, 2025).
At
March
31,
2026,
the
portfolio
of
“Obligations
of
Puerto
Rico,
States
and
political
subdivisions”
also
included
$
35.1
million
in
securities
issued
by
the
Puerto
Rico
Housing
Finance
Authority
(“HFA”),
a
government
instrumentality,
for
which
the
underlying
source of payment is second mortgage loans in Puerto Rico
residential properties (not the government), but for which HFA, provides
a guarantee
in the
event of default
and upon the
satisfaction of certain
other conditions (December
31, 2025 -
$
36
million). These
26
securities
are
not
rated
by
a
credit
rating
agency.
Refer
to
Note
18
to
the
Consolidated
Financial
Statements
for
additional
information on the Corporation’s exposure to the Puerto
Rico Government.
A
deterioration of
the Puerto
Rico economy
or
of
the fiscal
health of
the
Government of
Puerto Rico
and/or
its
instrumentalities
(including if
any of
the issuing
municipalities become
subject to
a debt
restructuring proceeding
under the
Puerto Rico
Oversight
Management and Economic Stability Act (“PROMESA”) could
adversely affect the value of these securities, resulting in losses
to the
Corporation.
At March
31, 2026,
the portfolio
of “Obligations
of Puerto
Rico, States
and political
subdivisions” had
no
securities issued
by the
HFA
for which
the underlying
source of
payment is
U.S. Treasury
securities (December
31, 2025
- $
6.8
million). These
securities
were fully redeemed during this quarter. The Corporation applies a zero-credit loss assumption for these securities, and no ACL has
been established for these securities
given that U.S. Treasury
securities carry an explicit guarantee from
the U.S. Government, are
highly rated by major rating agencies, and have
a long history of no credit losses.
Delinquency status
At March 31, 2026 and December 31, 2025, there were
no
securities held-to-maturity in past due or non-performing
status.
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
March 31, 2026 was $
5.9
million (December 31, 2025 - $
5.8
million).
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 2025
Form 10-K.
The following table
presents the Corporation's
loan purchases (including
repurchases) for the
quarters ended March
31, 2026
and
2025 by class of loans:
For the quarters ended March 31,
(In thousands)
2026
2025
Commercial
$
55,006
$
7,160
Mortgage
109,208
120,907
Ending balance
$
164,214
$
128,067
The following table presents the Corporation’s whole-loan
sales for the quarters ended March 31, 2026 and
2025 by class of loans:
For the quarters ended March 31,
(In thousands)
2026
2025
Commercial
$
14,191
$
26,349
Construction
-
9,338
Mortgage
11,035
6,937
Ending balance
$
25,226
$
42,624
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
March 31, 2026 and December 31, 2025.
28
March 31, 2026
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
$
2,717
$
7,927
$
-
$
10,644
$
332,447
$
343,091
$
-
$
-
Commercial real estate:
Non-owner occupied
3,123
-
26,457
29,580
3,362,611
3,392,191
26,457
-
Owner occupied
2,114
664
14,192
16,970
1,131,241
1,148,211
14,192
-
Commercial and industrial
5,792
2,240
190,205
198,237
5,742,028
5,940,265
185,993
4,212
Construction
13,635
-
-
13,635
399,144
412,779
-
-
Mortgage
218,044
102,818
325,321
646,183
6,789,562
7,435,745
129,367
195,954
Leasing
21,261
3,938
8,892
34,091
1,952,074
1,986,165
8,892
-
Consumer:
Credit cards
12,351
8,721
25,395
46,467
1,167,725
1,214,192
-
25,395
Home equity lines of credit
-
120
-
120
1,778
1,898
-
-
Personal
18,601
11,212
15,976
45,789
1,805,275
1,851,064
15,755
221
Auto
81,112
13,038
35,390
129,540
3,654,364
3,783,904
35,390
-
Other
574
135
4,663
5,372
162,036
167,408
4,227
436
Total
$
379,324
$
150,813
$
646,491
$
1,176,628
$
26,500,285
$
27,676,913
$
420,273
$
226,218
March 31, 2026
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
$
5,733
$
-
$
10,962
$
16,695
$
2,067,509
$
2,084,204
$
10,962
$
-
Commercial real estate:
Non-owner occupied
10,282
1,930
6,987
19,199
2,132,061
2,151,260
6,987
-
Owner occupied
21,202
1,610
-
22,812
2,041,333
2,064,145
-
-
Commercial and industrial
11,660
4,404
6,693
22,757
2,602,537
2,625,294
6,524
169
Construction
6,903
-
-
6,903
1,254,511
1,261,414
-
-
Mortgage
25,877
1,552
9,700
37,129
1,239,487
1,276,616
9,700
-
Consumer:
Credit cards
-
-
-
-
7
7
-
-
Home equity lines of
credit
660
252
2,766
3,678
74,188
77,866
2,766
-
Personal
1,062
523
905
2,490
59,727
62,217
905
-
Other
2
-
-
2
9,764
9,766
-
-
Total
$
83,381
$
10,271
$
38,013
$
131,665
$
11,481,124
$
11,612,789
$
37,844
$
169
29
March 31, 2026
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
$
8,450
$
7,927
$
10,962
$
27,339
$
2,399,956
$
2,427,295
$
10,962
$
-
Commercial real estate:
Non-owner occupied
13,405
1,930
33,444
48,779
5,494,672
5,543,451
33,444
-
Owner occupied
23,316
2,274
14,192
39,782
3,172,574
3,212,356
14,192
-
Commercial and industrial
17,452
6,644
196,898
220,994
8,344,565
8,565,559
192,517
4,381
Construction
20,538
-
-
20,538
1,653,655
1,674,193
-
-
Mortgage
[1]
243,921
104,370
335,021
683,312
8,029,049
8,712,361
139,067
195,954
Leasing
21,261
3,938
8,892
34,091
1,952,074
1,986,165
8,892
-
Consumer:
Credit cards
12,351
8,721
25,395
46,467
1,167,732
1,214,199
-
25,395
Home equity lines of credit
660
372
2,766
3,798
75,966
79,764
2,766
-
Personal
19,663
11,735
16,881
48,279
1,865,002
1,913,281
16,660
221
Auto
81,112
13,038
35,390
129,540
3,654,364
3,783,904
35,390
-
Other
576
135
4,663
5,374
171,800
177,174
4,227
436
Total
$
462,705
$
161,084
$
684,504
$
1,308,293
$
37,981,409
$
39,289,702
$
458,117
$
226,387
[1]
At March 31, 2026, mortgage loans held-in-portfolio include
$
3.3
billion of loans that carry certain guarantees from the
FHA or the VA, for which
the Corporation’s policy is to exclude them from
non-performing status, of which $
196
million are 90 days or more past due. The portfolio of
guaranteed loans includes $
43
million of residential mortgage loans in Puerto Rico that
are no longer accruing interest as of March 31, 2026.
The
Corporation has $
26
million in reverse mortgage loans in Puerto Rico which
are guaranteed by FHA, but which are currently not
accruing interest
at March 31, 2026.
[2]
Loans held-in-portfolio are net of $
414
million in unearned income and exclude $
6
million in loans held-for-sale.
[3]
Includes $
22.9
billion pledged to secure credit facilities and public funds
that the secured parties are not permitted to sell or repledge
the collateral,
of which $
7.4
billion were pledged at the Federal Home Loan Bank
("FHLB") as collateral for borrowings and $
15.5
billion at the Federal Reserve
Bank ("FRB") for discount window borrowings. As of
March 31, 2026, the Corporation had an available borrowing
facility with the FHLB and the
discount window of FRB of $
4.2
billion and $
12.2
billion, respectively.
30
December 31, 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
$
6,579
$
155
$
112
$
6,846
$
296,502
$
303,348
$
112
$
-
Commercial real estate:
Non-owner occupied
2,457
299
35,692
38,448
3,356,682
3,395,130
35,692
-
Owner occupied
2,760
681
24,567
28,008
1,168,585
1,196,593
24,567
-
Commercial and industrial
8,864
3,760
187,222
199,846
5,770,227
5,970,073
183,914
3,308
Construction
17,283
-
-
17,283
340,258
357,541
-
-
Mortgage
261,145
133,124
329,613
723,882
6,624,085
7,347,967
132,373
197,240
Leasing
23,748
4,640
9,179
37,567
1,963,798
2,001,365
9,179
-
Consumer:
Credit cards
13,700
10,617
27,529
51,846
1,204,885
1,256,731
-
27,529
Home equity lines of credit
-
-
-
-
1,908
1,908
-
-
Personal
19,608
11,894
19,082
50,584
1,785,818
1,836,402
18,863
219
Auto
109,103
25,495
52,200
186,798
3,633,014
3,819,812
52,200
-
Other
927
2,688
2,285
5,900
165,858
171,758
1,809
476
Total
$
466,174
$
193,353
$
687,481
$
1,347,008
$
26,311,620
$
27,658,628
$
458,709
$
228,772
December 31, 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
$
9,500
$
-
$
8,636
$
18,136
$
2,134,306
$
2,152,442
$
8,636
$
-
Commercial real estate:
Non-owner occupied
-
1,600
7,020
8,620
2,139,534
2,148,154
7,020
-
Owner occupied
-
-
-
-
1,956,487
1,956,487
-
-
Commercial and industrial
7,608
928
6,686
15,222
2,622,117
2,637,339
6,498
188
Construction
-
-
-
-
1,317,358
1,317,358
-
-
Mortgage
15,596
6,400
13,422
35,418
1,266,055
1,301,473
13,422
-
Consumer:
Credit cards
-
-
-
-
(
14
)
(
14
)
-
-
Home equity lines of credit
1,282
82
2,796
4,160
72,624
76,784
2,796
-
Personal
983
832
1,233
3,048
66,778
69,826
1,233
-
Other
-
-
29
29
9,012
9,041
29
-
Total
$
34,969
$
9,842
$
39,822
$
84,633
$
11,584,257
$
11,668,890
$
39,634
$
188
31
December 31, 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
$
16,079
$
155
$
8,748
$
24,982
$
2,430,808
$
2,455,790
$
8,748
$
-
Commercial real estate:
Non-owner occupied
2,457
1,899
42,712
47,068
5,496,216
5,543,284
42,712
-
Owner occupied
2,760
681
24,567
28,008
3,125,072
3,153,080
24,567
-
Commercial and industrial
16,472
4,688
193,908
215,068
8,392,344
8,607,412
190,412
3,496
Construction
17,283
-
-
17,283
1,657,616
1,674,899
-
-
Mortgage
[1]
276,741
139,524
343,035
759,300
7,890,140
8,649,440
145,795
197,240
Leasing
23,748
4,640
9,179
37,567
1,963,798
2,001,365
9,179
-
Consumer:
Credit cards
13,700
10,617
27,529
51,846
1,204,871
1,256,717
-
27,529
Home equity lines of credit
1,282
82
2,796
4,160
74,532
78,692
2,796
-
Personal
20,591
12,726
20,315
53,632
1,852,596
1,906,228
20,096
219
Auto
109,103
25,495
52,200
186,798
3,633,014
3,819,812
52,200
-
Other
927
2,688
2,314
5,929
174,870
180,799
1,838
476
Total
$
501,143
$
203,195
$
727,303
$
1,431,641
$
37,895,877
$
39,327,518
$
498,343
$
228,960
[1]
At December 31, 2025 mortgage loans held-in-portfolio include
$
3.2
billion of loans that carry certain guarantees from the FHA
or the VA, for
which the Corporation’s policy is to exclude them
from non-performing status, of which $
197
million are 90 days or more past due. The portfolio
of
guaranteed loans includes $
47
million of residential mortgage loans in Puerto Rico that
are no longer accruing interest as of December 31,
2025.
The Corporation has $
27
million in reverse mortgage loans in Puerto Rico which
are guaranteed by FHA, but which are currently not accruing
interest at December 31, 2025.
[2]
Loans held-in-portfolio are net of $
422
million in unearned income and exclude $
10
million in loans held-for-sale.
[3]
Includes $
22.7
billion pledged to secure credit facilities and public funds
that the secured parties are not permitted to sell or repledge
the collateral,
of which $
7.5
billion were pledged at the FHLB as collateral for borrowings
and $
15.2
billion at the FRB for discount window borrowings.
As of
December 31, 2025, the Corporation had an available borrowing
facility with the FHLB and the discount window
of FRB of $
4
.0 billion and $
12.1
billion, respectively.
The following tables present the amortized cost basis
of non-accrual loans as of March 31, 2026
and December 31, 2025 by class of
loans:
32
March 31, 2026
BPPR
Popular U.S.
Popular, Inc.
(In thousands)
Non-accrual
with no
allowance
Non-accrual
with
allowance
Non-accrual
with no
allowance
Non-accrual
with
allowance
Non-accrual
with no
allowance
Non-accrual
with
allowance
Commercial multi-family
$
-
$
-
$
10,632
$
330
$
10,632
$
330
Commercial real estate non-owner occupied
22,240
4,217
6,957
30
29,197
4,247
Commercial real estate owner occupied
6,617
7,575
-
-
6,617
7,575
Commercial and industrial
6,203
179,790
5,975
549
12,178
180,339
Mortgage
59,937
69,430
760
8,940
60,697
78,370
Leasing
542
8,350
-
-
542
8,350
Consumer:
HELOCs
-
-
-
2,766
-
2,766
Personal
3,484
12,271
-
905
3,484
13,176
Auto
2,313
33,077
-
-
2,313
33,077
Other
363
3,864
-
-
363
3,864
Total
$
101,699
$
318,574
$
24,324
$
13,520
$
126,023
$
332,094
December 31, 2025
BPPR
Popular U.S.
Popular, Inc.
(In thousands)
Non-accrual
with no
allowance
Non-accrual
with
allowance
Non-accrual
with no
allowance
Non-accrual
with
allowance
Non-accrual
with no
allowance
Non-accrual
with
allowance
Commercial multi-family
$
-
$
112
$
8,137
$
499
$
8,137
$
611
Commercial real estate non-owner occupied
31,408
4,284
6,979
41
38,387
4,325
Commercial real estate owner occupied
16,576
7,991
-
-
16,576
7,991
Commercial and industrial
6,245
177,669
5,985
513
12,230
178,182
Mortgage
59,302
73,071
732
12,690
60,034
85,761
Leasing
771
8,408
-
-
771
8,408
Consumer:
HELOCs
-
-
-
2,796
-
2,796
Personal
3,314
15,549
-
1,233
3,314
16,782
Auto
2,252
49,948
-
-
2,252
49,948
Other
378
1,431
-
29
378
1,460
Total
$
120,246
$
338,463
$
21,833
$
17,801
$
142,079
$
356,264
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 March 31,
2026 include $
126
million in collateral dependent loans
(December 31,
2025 - $
142
million). The Corporation recognized $
7
million in interest income on non-accrual loans during the quarter ended March
31, 2026 (March 31, 2025 - $
3
million).
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 March
31, 2026 and December 31, 2025:
33
March 31, 2026
(In thousands)
Real Estate
Auto
Equipment
Other
Total
BPPR
Commercial multi-family
$
1,189
$
-
$
-
$
-
$
1,189
Commercial real estate:
Non-owner occupied
97,743
-
-
-
97,743
Owner occupied
12,891
-
-
-
12,891
Commercial and industrial
2,355
-
4,433
2,578
9,366
Mortgage
50,344
-
-
-
50,344
Leasing
-
1,652
-
-
1,652
Consumer:
Personal
3,316
-
-
-
3,316
Auto
-
16,905
-
-
16,905
Other
-
14
-
363
377
Total BPPR
$
167,838
$
18,571
$
4,433
$
2,941
$
193,783
Popular U.S.
Commercial multi-family
$
16,379
$
-
$
-
$
-
$
16,379
Commercial real estate:
Non-owner occupied
65,608
-
-
-
65,608
Commercial and industrial
4,177
-
-
1,798
5,975
Mortgage
1,082
-
-
-
1,082
Total Popular U.S.
$
87,246
$
-
$
-
$
1,798
$
89,044
Popular, Inc.
Commercial multi-family
$
17,568
$
-
$
-
$
-
$
17,568
Commercial real estate:
Non-owner occupied
163,351
-
-
-
163,351
Owner occupied
12,891
-
-
-
12,891
Commercial and industrial
6,532
-
4,433
4,376
15,341
Mortgage
51,426
-
-
-
51,426
Leasing
-
1,652
-
-
1,652
Consumer:
Personal
3,316
-
-
-
3,316
Auto
-
16,905
-
-
16,905
Other
-
14
-
363
377
Total Popular,
Inc.
$
255,084
$
18,571
$
4,433
$
4,739
$
282,827
34
December 31, 2025
(In thousands)
Real Estate
Auto
Equipment
Other
Total
BPPR
Commercial multi-family
$
1,206
$
-
$
-
$
-
$
1,206
Commercial real estate:
Non-owner occupied
127,031
-
-
-
127,031
Owner occupied
23,014
-
-
-
23,014
Commercial and industrial
2,378
-
4,476
297
7,151
Mortgage
67,380
-
-
-
67,380
Leasing
-
1,925
-
-
1,925
Consumer:
Personal
3,402
-
-
-
3,402
Auto
-
16,512
-
-
16,512
Other
-
31
-
363
394
Total BPPR
$
224,411
$
18,468
$
4,476
$
660
$
248,015
Popular U.S.
Commercial multi-family
$
16,395
$
-
$
-
$
-
$
16,395
Commercial real estate:
Non-owner occupied
65,630
-
-
-
65,630
Commercial and industrial
4,187
-
-
1,798
5,985
Mortgage
1,398
-
-
-
1,398
Total Popular U.S.
$
87,610
$
-
$
-
$
1,798
$
89,408
Popular, Inc.
Commercial multi-family
$
17,601
$
-
$
-
$
-
$
17,601
Commercial real estate:
Non-owner occupied
192,661
-
-
-
192,661
Owner occupied
23,014
-
-
-
23,014
Commercial and industrial
6,565
-
4,476
2,095
13,136
Mortgage
68,778
-
-
-
68,778
Leasing
-
1,925
-
-
1,925
Consumer:
Personal
3,402
-
-
-
3,402
Auto
-
16,512
-
-
16,512
Other
-
31
-
363
394
Total Popular,
Inc.
$
312,021
$
18,468
$
4,476
$
2,458
$
337,423
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
internally
developed
quantitative
models
that
generate
lifetime
default
and
prepayment
estimates
as
well
as
other
loan
level
techniques to estimate
loss severity.
These models combine credit
risk factors which
include the impact
of loan modifications,
with
macroeconomic expectations to derive the lifetime
expected loss.
At March
31, 2026, the
Corporation estimated
the ACL by
weighting the outputs
of optimistic, baseline,
and pessimistic scenarios.
The
weightings applied
are subject
to
evaluation on
a
quarterly basis
as
part
of
the ACL’s
governance process.
During the
first
quarter
of
2026,
among
the
three
scenarios
evaluated
to
estimate
the
ACL,
the
baseline
scenario
was
assigned
the
highest
probability, followed by the pessimistic scenario,
where weight was increased during 2025 in response
to ongoing uncertainties.
At March 31,2026, the ACL increased by $
15.6
million from December 31, 2025 to $
823.7
million.
The following
tables present
the changes
in the
ACL of
loans held-in-portfolio
and unfunded
commitments for
the quarters
ended
March 31, 2026 and 2025.
36
For the quarter ended March 31, 2026
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
$
3,871
$
831
$
-
$
-
$
2
$
4,704
Commercial real estate non-owner occupied
44,149
15,847
-
(
11,131
)
16
48,881
Commercial real estate owner occupied
34,722
326
-
(
91
)
446
35,403
Commercial and industrial
163,877
16,834
-
(
2,618
)
1,887
179,980
Total Commercial
246,619
33,838
-
(
13,840
)
2,351
268,968
Construction
4,488
1,268
-
-
11
5,767
Mortgage
70,674
764
7
(
483
)
2,799
73,761
Leasing
18,620
2,537
-
(
4,085
)
1,516
18,588
Consumer
Credit cards
91,124
14,305
-
(
19,235
)
3,182
89,376
Home equity lines of credit
58
(
82
)
-
-
91
67
Personal
97,804
17,602
-
(
20,744
)
2,795
97,457
Auto
180,364
3,006
-
(
21,150
)
8,324
170,544
Other
8,169
60
-
(
747
)
225
7,707
Total Consumer
377,519
34,891
-
(
61,876
)
14,617
365,151
Total - Loans
$
717,920
$
73,298
$
7
$
(
80,284
)
$
21,294
$
732,235
Allowance for credit losses - unfunded commitments:
Commercial
$
5,993
$
(
603
)
$
-
$
-
$
-
$
5,390
Construction
2,570
721
-
-
-
3,291
Ending balance - unfunded commitments [1]
$
8,563
$
118
$
-
$
-
$
-
$
8,681
[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 March 31, 2026
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
$
15,474
$
(
109
)
$
-
$
-
$
15,365
Commercial real estate non-owner occupied
14,568
697
-
-
15,265
Commercial real estate owner occupied
13,729
1,869
-
115
15,713
Commercial and industrial
17,057
424
(
29
)
44
17,496
Total Commercial
60,828
2,881
(
29
)
159
63,839
Construction
9,338
55
-
-
9,393
Mortgage
9,880
(
45
)
(
19
)
47
9,863
Consumer
Home equity lines of credit
1,277
(
400
)
-
234
1,111
Personal
8,808
(
104
)
(
1,818
)
396
7,282
Other
5
4
(
13
)
10
6
Total Consumer
10,090
(
500
)
(
1,831
)
640
8,399
Total - Loans
$
90,136
$
2,391
$
(
1,879
)
$
846
$
91,494
Allowance for credit losses - unfunded commitments:
Commercial
$
1,570
$
232
$
-
$
-
$
1,802
Construction
4,161
(
222
)
-
-
3,939
Consumer
144
(
19
)
-
-
125
Ending balance - unfunded commitments [1]
$
5,875
$
(
9
)
$
-
$
-
$
5,866
[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 March 31, 2026
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
$
19,345
$
722
$
-
$
-
$
2
$
20,069
Commercial real estate non-owner occupied
58,717
16,544
-
(
11,131
)
16
64,146
Commercial real estate owner occupied
48,451
2,195
-
(
91
)
561
51,116
Commercial and industrial
180,934
17,258
-
(
2,647
)
1,931
197,476
Total Commercial
307,447
36,719
-
(
13,869
)
2,510
332,807
Construction
13,826
1,323
-
-
11
15,160
Mortgage
80,554
719
7
(
502
)
2,846
83,624
Leasing
18,620
2,537
-
(
4,085
)
1,516
18,588
Consumer
Credit cards
91,124
14,305
-
(
19,235
)
3,182
89,376
Home equity lines of credit
1,335
(
482
)
-
-
325
1,178
Personal
106,612
17,498
-
(
22,562
)
3,191
104,739
Auto
180,364
3,006
-
(
21,150
)
8,324
170,544
Other
8,174
64
-
(
760
)
235
7,713
Total Consumer
387,609
34,391
-
(
63,707
)
15,257
373,550
Total - Loans
$
808,056
$
75,689
$
7
$
(
82,163
)
$
22,140
$
823,729
Allowance for credit losses - unfunded commitments:
Commercial
$
7,563
$
(
371
)
$
-
$
-
$
-
$
7,192
Construction
6,731
499
-
-
-
7,230
Consumer
144
(
19
)
-
-
-
125
Ending balance - unfunded commitments [1]
$
14,438
$
109
$
-
$
-
$
-
$
14,547
[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 quarter ended March 31, 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
$
2,783
$
635
$
-
$
-
$
2
$
3,420
Commercial real estate non-owner occupied
44,852
(
2,599
)
-
(
65
)
660
42,848
Commercial real estate owner occupied
37,355
(
1,742
)
-
(
89
)
495
36,019
Commercial and industrial
130,136
(
257
)
-
(
3,312
)
4,840
131,407
Total Commercial
215,126
(
3,963
)
-
(
3,466
)
5,997
213,694
Construction
2,743
(
24
)
-
-
-
2,719
Mortgage
72,901
(
1,118
)
9
(
435
)
2,932
74,289
Leasing
16,419
7,059
-
(
4,544
)
1,272
20,206
Consumer
Credit cards
99,130
13,822
-
(
18,865
)
2,436
96,523
Home equity lines of credit
54
(
108
)
-
(
25
)
139
60
Personal
91,296
16,828
-
(
21,953
)
3,615
89,786
Auto
165,995
19,471
-
(
21,056
)
7,569
171,979
Other
7,002
723
-
(
880
)
162
7,007
Total Consumer
363,477
50,736
-
(
62,779
)
13,921
365,355
Total - Loans
$
670,666
$
52,690
$
9
$
(
71,224
)
$
24,122
$
676,263
Allowance for credit losses - unfunded commitments:
Commercial
$
6,725
$
720
$
-
$
-
$
-
$
7,445
Construction
1,663
(
103
)
-
-
-
1,560
Ending balance - unfunded commitments [1]
$
8,388
$
617
$
-
$
-
$
-
$
9,005
[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 quarter ended March 31, 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
$
6,453
$
3,627
$
-
$
1
$
10,081
Commercial real estate non-owner occupied
9,642
5,811
-
-
15,453
Commercial real estate owner occupied
12,473
1,209
(
12
)
523
14,193
Commercial and industrial
15,870
1,477
(
1,147
)
222
16,422
Total Commercial
44,438
12,124
(
1,159
)
746
56,149
Construction
8,521
(
1,728
)
-
-
6,793
Mortgage
9,508
47
-
185
9,740
Consumer
Home equity lines of credit
1,449
(
136
)
(
30
)
267
1,550
Personal
11,440
2,200
(
2,626
)
637
11,651
Other
2
21
(
29
)
8
2
Total Consumer
12,891
2,085
(
2,685
)
912
13,203
Total - Loans
$
75,358
$
12,528
$
(
3,844
)
$
1,843
$
85,885
Allowance for credit losses - unfunded commitments:
Commercial
$
1,662
$
(
32
)
$
-
$
-
$
1,630
Construction
5,409
(
1,917
)
-
-
3,492
Consumer
11
31
-
-
42
Ending balance - unfunded commitments [1]
$
7,082
$
(
1,918
)
$
-
$
-
$
5,164
[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 quarter ended March 31, 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
$
9,236
$
4,262
$
-
$
-
$
3
$
13,501
Commercial real estate non-owner occupied
54,494
3,212
-
(
65
)
660
58,301
Commercial real estate owner occupied
49,828
(
533
)
-
(
101
)
1,018
50,212
Commercial and industrial
146,006
1,220
-
(
4,459
)
5,062
147,829
Total Commercial
259,564
8,161
-
(
4,625
)
6,743
269,843
Construction
11,264
(
1,752
)
-
-
-
9,512
Mortgage
82,409
(
1,071
)
9
(
435
)
3,117
84,029
Leasing
16,419
7,059
-
(
4,544
)
1,272
20,206
Consumer
Credit cards
99,130
13,822
-
(
18,865
)
2,436
96,523
Home equity lines of credit
1,503
(
244
)
-
(
55
)
406
1,610
Personal
102,736
19,028
-
(
24,579
)
4,252
101,437
Auto
165,995
19,471
-
(
21,056
)
7,569
171,979
Other
7,004
744
-
(
909
)
170
7,009
Total Consumer
376,368
52,821
-
(
65,464
)
14,833
378,558
Total - Loans
$
746,024
$
65,218
$
9
$
(
75,068
)
$
25,965
$
762,148
Allowance for credit losses - unfunded commitments:
Commercial
$
8,387
$
688
$
-
$
-
$
-
$
9,075
Construction
7,072
(
2,020
)
-
-
-
5,052
Consumer
11
31
-
-
-
42
Ending balance - unfunded commitments [1]
$
15,470
$
(
1,301
)
$
-
$
-
$
-
$
14,169
[1]
Allowance for credit losses of unfunded commitments is
presented as part of Other Liabilities in the Consolidated
Statements of Financial Condition.
42
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 quarter ended March 31, 2026 amounted to $
69
million (during the year ended December 31, 2025 -
$
159
million), related to the commercial loan portfolios.
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 ended March
31,
2026 and 2025.
Loans modified to
borrowers experiencing financial
difficulties that
were fully paid
down, charged-off or
foreclosed
upon by period end are not reported.
Loan Modifications Made to Borrowers Experiencing Financial
Difficulty for the quarter ended March 31,
2026
Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March
31, 2026
% of total class
of Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Commercial and industrial
$
743
0.01
%
$
-
-
%
$
743
0.01
%
Mortgage
74
-
%
-
-
%
74
-
%
Consumer:
Credit cards
79
0.01
%
-
-
%
79
0.01
%
Personal
517
0.03
%
-
-
%
517
0.03
%
Total
$
1,413
0.01
%
$
-
-
%
$
1,413
-
%
Term Extension
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March
31, 2026
% of total class
of Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
CRE non-owner occupied
$
1,856
0.05
%
$
-
-
%
$
1,856
0.03
%
CRE owner occupied
1,321
0.12
%
-
-
%
1,321
0.04
%
Commercial and industrial
56,240
0.95
%
-
-
%
56,240
0.66
%
Mortgage
6,309
0.08
%
-
-
%
6,309
0.07
%
Consumer:
-
Personal
104
0.01
%
11
0.02
%
115
0.01
%
Auto
51
-
%
-
-
%
51
-
%
Total
$
65,881
0.24
%
$
11
-
%
$
65,892
0.17
%
Other-Than-Insignificant Payment Delays
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March
31, 2026
% of total class
of Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
CRE owner occupied
$
17,425
1.52
%
$
-
-
%
$
17,425
0.54
%
Commercial and industrial
155,817
2.62
%
-
-
%
155,817
1.82
%
Total
$
173,242
0.63
%
$
-
-
%
$
173,242
0.44
%
43
Combination - Term Extension
and Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March
31, 2026
% of total class
of Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Commercial and industrial
$
109
-
%
$
-
-
%
$
109
-
%
Mortgage
2,195
0.03
%
-
-
%
2,195
0.03
%
Consumer:
Personal
2,838
0.15
%
-
-
%
2,838
0.15
%
Auto
96
-
%
-
-
%
96
-
%
Total
$
5,238
0.02
%
$
-
-
%
$
5,238
0.01
%
Combination -
Other-Than-Insignificant Payment Delays and Interest Rate
Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March
31, 2026
% of total class
of Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Commercial and industrial
$
188
-
%
$
-
-
%
$
188
-
%
Consumer:
Credit cards
2,447
0.20
%
-
-
%
2,447
0.20
%
Total
$
2,635
0.01
%
$
-
-
%
$
2,635
0.01
%
44
Loan Modifications Made to Borrowers Experiencing Financial
Difficulty for the quarter ended March 31,
2025
Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March 31,
2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Commercial and industrial
$
1,272
0.02
%
$
-
-
%
$
1,272
0.02
%
Consumer:
Credit cards
235
0.02
%
-
-
%
235
0.02
%
Personal
1,215
0.07
%
-
-
%
1,215
0.07
%
Other
5
-
%
-
-
%
5
-
%
Total
$
2,727
0.01
%
$
-
-
%
$
2,727
0.01
%
Term Extension
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March 31,
2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
CRE non-owner occupied
$
1,005
0.03
%
$
-
-
%
$
1,005
0.02
%
CRE owner occupied
512
0.04
%
-
-
%
512
0.02
%
Commercial and industrial
9,372
0.18
%
-
-
%
9,372
0.12
%
Mortgage
9,971
0.14
%
-
-
%
9,971
0.12
%
Consumer:
Personal
239
0.01
%
2
-
%
241
0.01
%
Auto
40
-
%
-
-
%
40
-
%
Total
$
21,139
0.08
%
$
2
-
%
$
21,141
0.06
%
Other-Than-Insignificant Payment Delays
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March 31,
2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
CRE non-owner occupied
$
4,454
0.13
%
$
-
-
%
$
4,454
0.08
%
CRE owner occupied
24,686
2.05
%
-
-
%
24,686
0.83
%
Commercial and industrial
96,529
1.84
%
-
-
%
96,529
1.25
%
Total
$
125,669
0.48
%
$
-
-
%
$
125,669
0.34
%
Combination - Term Extension
and Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March 31,
2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Mortgage
$
3,132
0.05
%
$
-
-
%
$
3,132
0.04
%
Consumer:
Personal
3,209
0.18
%
43
0.05
%
3,252
0.18
%
Total
$
6,341
0.02
%
$
43
0.05
%
$
6,384
0.02
%
Combination -
Other-Than-Insignificant Payment Delays and Interest Rate
Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March 31,
2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Commercial and industrial
$
567
0.01
%
$
-
-
%
$
567
0.01
%
Consumer:
Credit cards
2,751
0.23
%
-
-
%
2,751
0.23
%
Total
$
3,318
0.01
%
$
-
-
%
$
3,318
0.01
%
45
The following tables describe the financial effect of the
modifications made to borrowers experiencing
financial difficulties:
For the quarter ended March 31, 2026
Interest rate reduction
Loan Type
Financial Effect
Commercial and industrial
Reduced weighted-average contractual interest rate from
22.6
% to
9.9
%.
Mortgage
Reduced weighted-average contractual interest rate from
7.3
% to
5.4
%.
Consumer:
Credit cards
Reduced weighted-average contractual interest rate from
21.2
% to
8.8
%.
Personal
Reduced weighted-average contractual interest rate from
19.9
% to
12.1
%.
Auto
Reduced weighted-average contractual interest rate from
8.9
% to
8.7
%.
Term extension
Loan Type
Financial Effect
CRE Non-owner occupied
Added a weighted-average of
16
months to the life of loans.
CRE Owner occupied
Added a weighted-average of
4
years to the life of loans.
Commercial and industrial
Added a weighted-average of
5
months to the life of loans.
Mortgage
Added a weighted-average of
13
years to the life of loans.
Consumer:
Personal
Added a weighted-average of
4
years to the life of loans.
Auto
Added a weighted-average of
19
months to the life of loans.
Other than insignificant payment delays
Loan Type
Financial Effect
CRE Owner occupied
Added a weighted-average of
10
months to the life of loans.
Commercial and industrial
Added a weighted-average of
10
months to the life of loans.
Consumer:
Credit cards
Added a weighted-average of
17
months to the life of loans.
46
For the quarter ended March 31, 2025
Interest rate reduction
Loan Type
Financial Effect
Commercial and industrial
Reduced weighted-average contractual interest rate from
25.4
% to
9.6
%.
Mortgage
Reduced weighted-average contractual interest rate from
6.5
% to
5.6
%.
Consumer:
Credit cards
Reduced weighted-average contractual interest rate from
21.3
% to
8.2
%.
Personal
Reduced weighted-average contractual interest rate from
21.6
% to
11.7
%.
Other
Reduced weighted-average contractual interest rate from
18
.0% to
0
.0%.
Term extension
Loan Type
Financial Effect
CRE Non-owner occupied
Added a weighted-average of
6
months to the life of loans.
CRE Owner occupied
Added a weighted-average of
3
months to the life of loans.
Commercial and industrial
Added a weighted-average of
1
year to the life of loans.
Mortgage
Added a weighted-average of
15
years to the life of loans.
Consumer:
Personal
Added a weighted-average of
5
years to the life of loans.
Auto
Added a weighted-average of
3
years to the life of loans.
Other than insignificant payment delay
Loan Type
Financial Effect
CRE Non-owner occupied
Added a weighted-average of
10
months to the life of loans.
CRE Owner occupied
Added a weighted-average of
9
months to the life of loans.
Commercial and industrial
Added a weighted-average of
13
months to the life of loans.
Consumer:
Credit cards
Added a weighted-average of
19
months to the life of loans.
The following tables present, by class, the performance of loans that have been modified during the twelve months preceding March
31,
2026.
The
past
due
90
days
or
more
categories
include
all
loans
modified
classified
as
non-accruing
at
the
time
of
the
modification. These
loans will
continue in
non-accrual status,
and presented
as past
due 90
days or
more, until
the borrower
has
demonstrated a willingness and
ability to make
the restructured loan payments
(at least 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.
47
BPPR
March 31, 2026
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
$
-
$
-
$
2,115
$
2,115
$
1,726
$
3,841
$
-
$
2,115
CRE owner occupied
485
-
2,741
3,226
58,227
61,453
-
2,741
Commercial and industrial
809
76
4,369
5,254
304,683
309,937
341
4,028
Mortgage
4,082
1,615
20,668
26,365
24,524
50,889
7,338
13,330
Consumer:
Credit cards
751
454
1,139
2,344
6,755
9,099
869
270
Personal
695
197
1,328
2,220
12,195
14,415
60
1,268
Auto
-
-
-
-
458
458
-
Total
$
6,822
$
2,342
$
32,360
$
41,524
$
408,568
$
450,092
$
8,608
$
23,752
[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.
March 31, 2026
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
$
-
$
-
$
-
$
-
$
58,652
$
58,652
$
-
$
-
Commercial and industrial
-
-
-
-
914
914
-
-
Mortgage
-
-
-
-
1,120
1,120
-
-
Consumer:
Personal
-
-
33
33
75
108
33
-
Total
$
-
$
-
$
33
$
33
$
60,761
$
60,794
$
33
$
-
[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.
March 31, 2026
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
$
-
$
-
$
2,115
$
2,115
$
60,378
$
62,493
$
-
$
2,115
CRE owner occupied
485
-
2,741
3,226
58,227
61,453
-
2,741
Commercial and industrial
809
76
4,369
5,254
305,597
310,851
341
4,028
Mortgage
4,082
1,615
20,668
26,365
25,644
52,009
7,338
13,330
Consumer:
Credit cards
751
454
1,139
2,344
6,755
9,099
869
270
Personal
695
197
1,361
2,253
12,270
14,523
93
1,268
Auto
-
-
-
-
458
458
-
-
Total
$
6,822
$
2,342
$
32,393
$
41,557
$
469,329
$
510,886
$
8,641
$
23,752
[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.
48
The following tables present, by class, the performance of loans that have been modified during the twelve months preceding March
31, 2025.
BPPR
March 31, 2025
Past Due 90 days or more [1]
(In thousands)
30-59 days
60-89 days
Past due 90
days or more
Total past
due
Current
Total
With Payment
Default
Without
Payment Default
CRE non-owner occupied
$
-
$
-
$
451
$
451
$
8,571
$
9,022
$
-
$
451
CRE owner occupied
85
113
2,137
2,335
45,631
47,966
257
1,880
Commercial and industrial
290
177
4,856
5,323
167,950
173,273
273
4,583
Mortgage
5,072
2,767
17,345
25,184
37,456
62,640
3,256
14,089
Consumer:
Credit cards
699
536
845
2,080
4,690
6,770
503
342
Personal
391
129
1,887
2,407
12,584
14,991
136
1,751
Auto
-
-
-
-
119
119
-
-
Other
-
-
-
-
27
27
-
-
Total
$
6,537
$
3,722
$
27,521
$
37,780
$
277,028
$
314,808
$
4,425
$
23,096
[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.
March 31, 2025
Past Due 90 days or more [1]
(In thousands)
30-59 days
60-89 days
Past due 90
days or more
Total past
due
Current
Total
With Payment
Default
Without
Payment Default
Commercial multi-family
$
-
$
-
$
-
$
-
$
5,804
$
5,804
$
-
$
-
CRE owner occupied
-
-
-
-
5,953
5,953
-
-
Commercial and industrial
-
-
-
-
684
684
-
-
Mortgage
-
-
699
699
796
1,495
645
54
Consumer:
Personal
14
-
-
14
221
235
-
-
Total
$
14
$
-
$
699
$
713
$
13,458
$
14,171
$
645
$
54
[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.
March 31, 2025
Past Due 90 days or more [1]
(In thousands)
30-59 days
60-89 days
Past due 90
days or more
Total past
due
Current
Total
With Payment
Default
Without
Payment Default
Commercial multi-family
$
-
$
-
$
-
$
-
$
5,804
$
5,804
$
-
$
-
CRE non-owner occupied
-
-
451
451
8,571
9,022
-
451
CRE owner occupied
85
113
2,137
2,335
51,584
53,919
257
1,880
Commercial and industrial
290
177
4,856
5,323
168,634
173,957
273
4,583
Mortgage
5,072
2,767
18,044
25,883
38,252
64,135
3,901
14,143
Consumer:
Credit cards
699
536
845
2,080
4,690
6,770
503
342
Personal
405
129
1,887
2,421
12,805
15,226
136
1,751
Auto
-
-
-
-
119
119
-
-
Other
-
-
-
-
27
27
-
-
Total
$
6,551
$
3,722
$
28,220
$
38,493
$
290,486
$
328,979
$
5,070
$
23,150
[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.
49
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
March 31, 2026
(In thousands)
Interest Rate
Reduction
Term Extension
Other-Than-
Insignificant
Payment Delays
Combination - Term
Extension and Interest
Rate Reduction
Combination - Other-
Than-Insignificant
Payment Delays and
Interest Rate
Reduction
Total
Commercial and industrial
$
152
$
40
$
14
$
96
$
140
$
442
Mortgage
-
7,741
109
736
-
8,586
Consumer:
Credit cards
69
-
-
-
1,133
1,202
Personal
50
-
-
288
-
338
Total
$
271
$
7,781
$
123
$
1,120
$
1,273
$
10,568
Amortized Cost Basis of Modified Financing Receivables That
Subsequently Defaulted During the Quarter Ended
March 31, 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 owner occupied
$
-
$
89
$
257
$
-
$
-
$
346
Commercial and industrial
81
64
84
-
132
361
Mortgage
-
4,820
-
415
-
5,235
Consumer:
Credit cards
178
-
-
-
454
632
Personal
85
11
-
67
-
163
Total
$
344
$
4,984
$
341
$
482
$
586
$
6,737
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
March 31,
2026 and
December 31,
2025 and
the gross
charge-offs
recorded by
vintage year. For
the definitions of the obligor risk ratings,
refer to the Credit Quality section of
Note 8 to the Consolidated Financial
Statements included in the 2025 Form 10-K:
50
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
BPPR
Commercial:
Commercial multi-family
Pass
$
42,608
$
11,093
$
32,748
$
36,284
$
130,510
$
65,455
$
303
$
-
$
319,001
Watch
-
-
15,710
-
518
3,654
-
-
19,882
Special Mention
-
220
-
-
-
193
-
-
413
Substandard
-
-
-
-
-
3,795
-
-
3,795
Total commercial
multi-family
$
42,608
$
11,313
$
48,458
$
36,284
$
131,028
$
73,097
$
303
$
-
$
343,091
Commercial real estate non-owner occupied
Pass
$
82,203
$
441,363
$
401,447
$
263,210
$
782,917
$
1,136,854
$
5,267
$
-
$
3,113,261
Watch
-
22,316
11,821
42,798
4,973
97,718
598
-
180,224
Special Mention
-
1,814
-
868
141
41,114
-
-
43,937
Substandard
-
-
723
8,367
17,435
28,244
-
-
54,769
Total commercial
real estate non-
owner occupied
$
82,203
$
465,493
$
413,991
$
315,243
$
805,466
$
1,303,930
$
5,865
$
-
$
3,392,191
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
11,131
$
-
$
-
$
-
$
11,131
Commercial real estate owner occupied
Pass
$
17,596
$
153,564
$
111,506
$
48,190
$
69,723
$
422,574
$
22,830
$
-
$
845,983
Watch
-
6,194
26,562
6,166
34,427
93,078
1,049
-
167,476
Special Mention
190
-
-
1,484
2,935
17,345
1,500
-
23,454
Substandard
987
9,312
1,894
1,804
18,232
76,798
1,827
-
110,854
Doubtful
-
73
-
-
220
151
-
-
444
Total commercial
real estate owner
occupied
$
18,773
$
169,143
$
139,962
$
57,644
$
125,537
$
609,946
$
27,206
$
-
$
1,148,211
Year-to-Date gross
write-offs
$
1
$
-
$
-
$
-
$
-
$
90
$
-
$
-
$
91
Commercial and industrial
Pass
$
68,303
$
1,310,651
$
599,285
$
642,805
$
424,285
$
518,898
$
1,366,545
$
-
$
4,930,772
Watch
7,479
34,152
93,292
18,274
32,820
17,092
204,257
-
407,366
Special Mention
1,342
20,675
25,617
9,852
1,791
4,476
22,278
-
86,031
Substandard
8,539
36,138
14,964
46,521
94,276
170,270
145,363
-
516,071
Loss
-
-
-
-
-
-
25
-
25
Total commercial
and industrial
$
85,663
$
1,401,616
$
733,158
$
717,452
$
553,172
$
710,736
$
1,738,468
$
-
$
5,940,265
Year-to-Date gross
write-offs
$
322
$
257
$
161
$
60
$
14
$
14
$
1,790
$
-
$
2,618
Construction
Pass
$
8,389
$
34,849
$
114,149
$
77,267
$
-
$
11,792
$
71,895
$
-
$
318,341
Watch
-
-
45,773
43,224
5,688
-
(
247
)
-
94,438
Total construction
$
8,389
$
34,849
$
159,922
$
120,491
$
5,688
$
11,792
$
71,648
$
-
$
412,779
Mortgage
Pass
$
191,448
$
1,006,090
$
855,964
$
668,642
$
382,160
$
4,262,955
$
-
$
-
$
7,367,259
Substandard
-
183
727
2,872
1,922
62,782
-
-
68,486
Total mortgage
$
191,448
$
1,006,273
$
856,691
$
671,514
$
384,082
$
4,325,737
$
-
$
-
$
7,435,745
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
483
$
-
$
-
$
483
51
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
BPPR
Leasing
Pass
$
202,295
$
598,503
$
498,463
$
324,408
$
225,282
$
128,323
$
-
$
-
$
1,977,274
Substandard
1
653
1,825
2,632
2,242
1,538
-
-
8,891
Total leasing
$
202,296
$
599,156
$
500,288
$
327,040
$
227,524
$
129,861
$
-
$
-
$
1,986,165
Year-to-Date gross
write-offs
$
21
$
1,064
$
1,026
$
1,082
$
693
$
199
$
-
$
-
$
4,085
Consumer:
Credit cards
Pass
$
-
$
-
$
-
$
-
$
-
$
-
$
1,188,797
$
-
$
1,188,797
Substandard
-
-
-
-
-
-
25,392
-
25,392
Loss
-
-
-
-
-
-
3
-
3
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
1,214,192
$
-
$
1,214,192
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
-
$
19,235
$
-
$
19,235
HELOCs
Pass
$
-
$
-
$
-
$
-
$
-
$
-
$
1,898
$
-
$
1,898
Total HELOCs
$
-
$
-
$
-
$
-
$
-
$
-
$
1,898
$
-
$
1,898
Personal
Pass
$
238,029
$
755,971
$
361,303
$
223,153
$
111,867
$
113,321
$
-
$
31,028
$
1,834,672
Substandard
-
1,644
2,772
2,475
1,246
6,432
-
1,800
16,369
Loss
-
-
9
1
-
13
-
-
23
Total Personal
$
238,029
$
757,615
$
364,084
$
225,629
$
113,113
$
119,766
$
-
$
32,828
$
1,851,064
Year-to-Date gross
write-offs
$
-
$
2,534
$
3,780
$
4,636
$
1,937
$
7,205
$
-
$
652
$
20,744
Auto
Pass
$
286,874
$
1,082,045
$
930,739
$
647,257
$
420,503
$
372,300
$
-
$
-
$
3,739,718
Substandard
20
4,671
12,133
10,915
8,074
8,326
-
-
44,139
Loss
-
29
16
-
-
2
-
-
47
Total Auto
$
286,894
$
1,086,745
$
942,888
$
658,172
$
428,577
$
380,628
$
-
$
-
$
3,783,904
Year-to-Date gross
write-offs
$
82
$
5,175
$
7,130
$
5,400
$
2,516
$
847
$
-
$
-
$
21,150
Other consumer
Pass
$
5,899
$
32,313
$
23,730
$
15,510
$
14,353
$
7,189
$
63,737
$
-
$
162,731
Substandard
-
-
10
2,242
128
45
436
-
2,861
Loss
-
-
-
-
1,025
791
-
-
1,816
Total Other
consumer
$
5,899
$
32,313
$
23,740
$
17,752
$
15,506
$
8,025
$
64,173
$
-
$
167,408
Year-to-Date gross
write-offs
$
-
$
94
$
34
$
57
$
94
$
468
$
-
$
-
$
747
Total BPPR
$
1,162,202
$
5,564,516
$
4,183,182
$
3,147,221
$
2,789,693
$
7,673,518
$
3,123,753
$
32,828
$
27,676,913
52
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
Popular U.S.
Commercial:
Commercial multi-family
Pass
$
87,872
$
350,606
$
136,836
$
118,464
$
380,415
$
736,267
$
8,422
$
-
$
1,818,882
Watch
-
-
2,460
20,354
71,147
137,773
-
-
231,734
Special Mention
-
-
-
2,702
-
2,053
-
-
4,755
Substandard
-
-
-
1,769
2,720
24,344
-
-
28,833
Total commercial
multi-family
$
87,872
$
350,606
$
139,296
$
143,289
$
454,282
$
900,437
$
8,422
$
-
$
2,084,204
Commercial real estate non-owner occupied
Pass
$
23,820
$
216,348
$
163,271
$
321,723
$
460,793
$
722,441
$
7,065
$
-
$
1,915,461
Watch
-
10,300
9,757
11,387
15,032
59,839
-
-
106,315
Special Mention
-
-
2,067
-
-
1,888
-
-
3,955
Substandard
-
-
-
-
6,854
118,675
-
-
125,529
Total commercial
real estate non-
owner occupied
$
23,820
$
226,648
$
175,095
$
333,110
$
482,679
$
902,843
$
7,065
$
-
$
2,151,260
Commercial real estate owner occupied
Pass
$
257,819
$
562,643
$
219,711
$
155,809
$
192,366
$
399,096
$
10,052
$
-
$
1,797,496
Watch
-
-
35,238
55,274
25,253
32,158
1,600
-
149,523
Special Mention
-
-
17,890
-
-
10,816
-
-
28,706
Substandard
-
-
2,700
-
1,922
83,798
-
-
88,420
Total commercial
real estate owner
occupied
$
257,819
$
562,643
$
275,539
$
211,083
$
219,541
$
525,868
$
11,652
$
-
$
2,064,145
Commercial and industrial
Pass
$
7,653
$
296,812
$
363,946
$
225,175
$
273,167
$
764,098
$
338,795
$
-
$
2,269,646
Watch
-
33,073
7,034
42,309
62,586
177,179
11,200
-
333,381
Special Mention
-
-
-
4,649
-
411
738
-
5,798
Substandard
-
-
5,441
1,070
3,906
1,506
4,546
-
16,469
Total commercial
and industrial
$
7,653
$
329,885
$
376,421
$
273,203
$
339,659
$
943,194
$
355,279
$
-
$
2,625,294
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
2
$
27
$
-
$
29
Construction
Pass
$
70,527
$
356,131
$
404,477
$
214,892
$
60,026
$
-
$
12,491
$
-
$
1,118,544
Watch
-
12,983
10,814
60,772
28,524
6,903
-
-
119,996
Special Mention
-
-
-
3,833
-
-
-
-
3,833
Substandard
-
-
7,526
2,912
8,603
-
-
-
19,041
Total construction
$
70,527
$
369,114
$
422,817
$
282,409
$
97,153
$
6,903
$
12,491
$
-
$
1,261,414
Mortgage
Pass
$
2,484
$
96,739
$
72,630
$
77,522
$
204,371
$
813,170
$
-
$
-
$
1,266,916
Substandard
-
-
-
644
-
9,056
-
-
9,700
Total mortgage
$
2,484
$
96,739
$
72,630
$
78,166
$
204,371
$
822,226
$
-
$
-
$
1,276,616
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
19
$
-
$
-
$
19
53
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
Popular U.S.
Consumer:
Pass
$
-
$
-
$
-
$
-
$
-
$
-
$
7
$
-
$
7
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
7
$
-
$
7
HELOCs
Pass
$
-
$
-
$
-
$
-
$
-
$
4,994
$
61,077
$
9,029
$
75,100
Substandard
-
-
-
-
-
1,219
11
880
2,110
Loss
-
-
-
-
-
39
-
617
656
Total HELOCs
$
-
$
-
$
-
$
-
$
-
$
6,252
$
61,088
$
10,526
$
77,866
Personal
Pass
$
3,471
$
16,383
$
15,929
$
10,265
$
12,048
$
3,216
$
-
$
-
$
61,312
Substandard
-
77
149
182
165
273
-
-
846
Loss
-
-
11
-
-
48
-
-
59
Total Personal
$
3,471
$
16,460
$
16,089
$
10,447
$
12,213
$
3,537
$
-
$
-
$
62,217
Year-to-Date gross
write-offs
$
30
$
276
$
554
$
454
$
300
$
204
$
-
$
-
$
1,818
Other consumer
Pass
$
-
$
-
$
-
$
-
$
-
$
-
$
9,766
$
-
$
9,766
Total Other
consumer
$
-
$
-
$
-
$
-
$
-
$
-
$
9,766
$
-
$
9,766
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
-
$
13
$
-
$
13
Total Popular U.S.
$
453,646
$
1,952,095
$
1,477,887
$
1,331,707
$
1,809,898
$
4,111,260
$
465,770
$
10,526
$
11,612,789
54
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
Popular, Inc.
Commercial:
Commercial multi-family
Pass
$
130,480
$
361,699
$
169,584
$
154,748
$
510,925
$
801,722
$
8,725
$
-
$
2,137,883
Watch
-
-
18,170
20,354
71,665
141,427
-
-
251,616
Special Mention
-
220
-
2,702
-
2,246
-
-
5,168
Substandard
-
-
-
1,769
2,720
28,139
-
-
32,628
Total commercial
multi-family
$
130,480
$
361,919
$
187,754
$
179,573
$
585,310
$
973,534
$
8,725
$
-
$
2,427,295
Commercial real estate non-owner occupied
Pass
$
106,023
$
657,711
$
564,718
$
584,933
$
1,243,710
$
1,859,295
$
12,332
$
-
$
5,028,722
Watch
-
32,616
21,578
54,185
20,005
157,557
598
-
286,539
Special Mention
-
1,814
2,067
868
141
43,002
-
-
47,892
Substandard
-
-
723
8,367
24,289
146,919
-
-
180,298
Total commercial
real estate non-
owner occupied
$
106,023
$
692,141
$
589,086
$
648,353
$
1,288,145
$
2,206,773
$
12,930
$
-
$
5,543,451
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
11,131
$
-
$
-
$
-
$
11,131
Commercial real estate owner occupied
Pass
$
275,415
$
716,207
$
331,217
$
203,999
$
262,089
$
821,670
$
32,882
$
-
$
2,643,479
Watch
-
6,194
61,800
61,440
59,680
125,236
2,649
-
316,999
Special Mention
190
-
17,890
1,484
2,935
28,161
1,500
-
52,160
Substandard
987
9,312
4,594
1,804
20,154
160,596
1,827
-
199,274
Doubtful
-
73
-
-
220
151
-
-
444
Total commercial
real estate owner
occupied
$
276,592
$
731,786
$
415,501
$
268,727
$
345,078
$
1,135,814
$
38,858
$
-
$
3,212,356
Year-to-Date gross
write-offs
$
1
$
-
$
-
$
-
$
-
$
90
$
-
$
-
$
91
Commercial and industrial
Pass
$
75,956
$
1,607,463
$
963,231
$
867,980
$
697,452
$
1,282,996
$
1,705,340
$
-
$
7,200,418
Watch
7,479
67,225
100,326
60,583
95,406
194,271
215,457
-
740,747
Special Mention
1,342
20,675
25,617
14,501
1,791
4,887
23,016
-
91,829
Substandard
8,539
36,138
20,405
47,591
98,182
171,776
149,909
-
532,540
Loss
-
-
-
-
-
-
25
-
25
Total commercial
and industrial
$
93,316
$
1,731,501
$
1,109,579
$
990,655
$
892,831
$
1,653,930
$
2,093,747
$
-
$
8,565,559
Year-to-Date gross
write-offs
$
322
$
257
$
161
$
60
$
14
$
16
$
1,817
$
-
$
2,647
55
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
Popular, Inc.
Construction
Pass
$
78,916
$
390,980
$
518,626
$
292,159
$
60,026
$
11,792
$
84,386
$
-
$
1,436,885
Watch
-
12,983
56,587
103,996
34,212
6,903
(
247
)
-
214,434
Special Mention
-
-
-
3,833
-
-
-
-
3,833
Substandard
-
-
7,526
2,912
8,603
-
-
-
19,041
Total construction
$
78,916
$
403,963
$
582,739
$
402,900
$
102,841
$
18,695
$
84,139
$
-
$
1,674,193
Mortgage
Pass
$
193,932
$
1,102,829
$
928,594
$
746,164
$
586,531
$
5,076,125
$
-
$
-
$
8,634,175
Substandard
-
183
727
3,516
1,922
71,838
-
-
78,186
Total mortgage
$
193,932
$
1,103,012
$
929,321
$
749,680
$
588,453
$
5,147,963
$
-
$
-
$
8,712,361
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
502
$
-
$
-
$
502
Leasing
Pass
$
202,295
$
598,503
$
498,463
$
324,408
$
225,282
$
128,323
$
-
$
-
$
1,977,274
Substandard
1
653
1,825
2,632
2,242
1,538
-
-
8,891
Total leasing
$
202,296
$
599,156
$
500,288
$
327,040
$
227,524
$
129,861
$
-
$
-
$
1,986,165
Year-to-Date gross
write-offs
$
21
$
1,064
$
1,026
$
1,082
$
693
$
199
$
-
$
-
$
4,085
56
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
Popular, Inc.
Consumer:
Credit cards
Pass
$
-
$
-
$
-
$
-
$
-
$
-
$
1,188,804
$
-
$
1,188,804
Substandard
-
-
-
-
-
-
25,392
-
25,392
Loss
-
-
-
-
-
-
3
-
3
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
1,214,199
$
-
$
1,214,199
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
-
$
19,235
$
-
$
19,235
HELOCs
Pass
$
-
$
-
$
-
$
-
$
-
$
4,994
$
62,975
$
9,029
$
76,998
Substandard
-
-
-
-
-
1,219
11
880
2,110
Loss
-
-
-
-
-
39
-
617
656
Total HELOCs
$
-
$
-
$
-
$
-
$
-
$
6,252
$
62,986
$
10,526
$
79,764
Personal
Pass
$
241,500
$
772,354
$
377,232
$
233,418
$
123,915
$
116,537
$
-
$
31,028
$
1,895,984
Substandard
-
1,721
2,921
2,657
1,411
6,705
-
1,800
17,215
Loss
-
-
20
1
-
61
-
-
82
Total Personal
$
241,500
$
774,075
$
380,173
$
236,076
$
125,326
$
123,303
$
-
$
32,828
$
1,913,281
Year-to-Date gross
write-offs
$
30
$
2,810
$
4,334
$
5,090
$
2,237
$
7,409
$
-
$
652
$
22,562
Auto
Pass
$
286,874
$
1,082,045
$
930,739
$
647,257
$
420,503
$
372,300
$
-
$
-
$
3,739,718
Substandard
20
4,671
12,133
10,915
8,074
8,326
-
-
44,139
Loss
-
29
16
-
-
2
-
-
47
Total Auto
$
286,894
$
1,086,745
$
942,888
$
658,172
$
428,577
$
380,628
$
-
$
-
$
3,783,904
Year-to-Date gross
write-offs
$
82
$
5,175
$
7,130
$
5,400
$
2,516
$
847
$
-
$
-
$
21,150
Other consumer
Pass
$
5,899
$
32,313
$
23,730
$
15,510
$
14,353
$
7,189
$
73,503
$
-
$
172,497
Substandard
-
-
10
2,242
128
45
436
-
2,861
Loss
-
-
-
-
1,025
791
-
-
1,816
Total Other
consumer
$
5,899
$
32,313
$
23,740
$
17,752
$
15,506
$
8,025
$
73,939
$
-
$
177,174
Year-to-Date gross
write-offs
$
-
$
94
$
34
$
57
$
94
$
468
$
13
$
-
$
760
Total Popular Inc.
$
1,615,848
$
7,516,611
$
5,661,069
$
4,478,928
$
4,599,591
$
11,784,778
$
3,589,523
$
43,354
$
39,289,702
57
December 31, 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
$
12,328
$
32,906
$
36,473
$
131,276
$
20,536
$
47,303
$
107
$
-
$
280,929
Watch
-
15,795
-
523
-
1,742
-
-
18,060
Special Mention
222
-
-
-
73
127
-
-
422
Substandard
-
-
-
-
-
3,937
-
-
3,937
Total commercial
multi-family
$
12,550
$
48,701
$
36,473
$
131,799
$
20,609
$
53,109
$
107
$
-
$
303,348
Commercial real estate non-owner occupied
Pass
$
435,616
$
447,234
$
265,238
$
786,465
$
484,427
$
671,455
$
8,480
$
-
$
3,098,915
Watch
23,801
11,965
43,001
5,140
34,140
69,153
-
-
187,200
Special Mention
933
-
872
144
23,724
18,398
-
-
44,071
Substandard
-
726
8,406
28,490
1,438
25,884
-
-
64,944
Total commercial
real estate non-
owner occupied
$
460,350
$
459,925
$
317,517
$
820,239
$
543,729
$
784,890
$
8,480
$
-
$
3,395,130
Year-to-Date gross
write-offs
$
-
$
13,356
$
-
$
134
$
-
$
86
$
-
$
-
$
13,576
Commercial real estate owner occupied
Pass
$
157,288
$
113,778
$
71,288
$
55,715
$
169,037
$
278,495
$
20,468
$
-
$
866,069
Watch
6,255
26,923
6,348
35,565
29,409
78,046
2,191
-
184,737
Special Mention
-
-
1,494
18,063
726
12,637
1,500
-
34,420
Substandard
9,405
1,879
1,839
19,190
7,386
71,358
-
-
111,057
Doubtful
75
-
-
-
62
173
-
-
310
Total commercial
real estate owner
occupied
$
173,023
$
142,580
$
80,969
$
128,533
$
206,620
$
440,709
$
24,159
$
-
$
1,196,593
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
363
$
-
$
-
$
363
Commercial and industrial
Pass
$
1,357,401
$
598,521
$
649,249
$
442,753
$
193,173
$
346,563
$
1,376,855
$
-
$
4,964,515
Watch
11,706
92,478
19,194
43,529
6,909
19,218
223,490
-
416,524
Special Mention
4,991
26,356
10,178
6,857
454
4,338
14,957
-
68,131
Substandard
38,422
12,526
48,230
89,771
156,970
15,079
159,854
-
520,852
Doubtful
21
-
-
24
-
6
-
-
51
Total commercial
and industrial
$
1,412,541
$
729,881
$
726,851
$
582,934
$
357,506
$
385,204
$
1,775,156
$
-
$
5,970,073
Year-to-Date gross
write-offs
$
1,587
$
716
$
1,643
$
655
$
21
$
803
$
9,320
$
-
$
14,745
Construction
Pass
$
28,575
$
99,963
$
70,674
$
-
$
3,608
$
9,692
$
52,758
$
-
$
265,270
Watch
-
43,202
40,231
8,129
-
-
709
-
92,271
Total construction
$
28,575
$
143,165
$
110,905
$
8,129
$
3,608
$
9,692
$
53,467
$
-
$
357,541
Mortgage
Pass
$
986,795
$
872,826
$
683,325
$
386,318
$
373,153
$
3,977,979
$
-
$
-
$
7,280,396
Substandard
-
151
3,115
1,915
764
61,626
-
-
67,571
Total mortgage
$
986,795
$
872,977
$
686,440
$
388,233
$
373,917
$
4,039,605
$
-
$
-
$
7,347,967
Year-to-Date gross
write-offs
$
31
$
-
$
1
$
-
$
-
$
1,404
$
-
$
-
$
1,436
58
December 31, 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
$
682,378
$
535,227
$
354,748
$
251,520
$
135,973
$
32,270
$
-
$
-
$
1,992,116
Substandard
601
1,891
2,424
2,249
1,302
585
-
-
9,052
Loss
175
-
22
-
-
-
-
-
197
Total leasing
$
683,154
$
537,118
$
357,194
$
253,769
$
137,275
$
32,855
$
-
$
-
$
2,001,365
Year-to-Date gross
write-offs
$
990
$
4,449
$
5,041
$
4,541
$
1,807
$
28
$
-
$
-
$
16,856
Consumer:
Credit cards
Pass
$
-
$
-
$
-
$
-
$
-
$
-
$
1,229,201
$
-
$
1,229,201
Substandard
-
-
-
-
-
-
27,526
-
27,526
Loss
-
-
-
-
-
-
4
-
4
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
1,256,731
$
-
$
1,256,731
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
-
$
75,428
$
-
$
75,428
HELOCs
Pass
$
-
$
-
$
-
$
-
$
-
$
-
$
1,908
$
-
$
1,908
Total HELOCs
$
-
$
-
$
-
$
-
$
-
$
-
$
1,908
$
-
$
1,908
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
-
$
25
$
-
$
25
Personal
Pass
$
842,532
$
422,156
$
261,441
$
132,551
$
51,320
$
77,214
$
-
$
29,700
$
1,816,914
Substandard
1,452
3,310
3,509
1,632
618
6,654
-
2,278
19,453
Loss
-
4
7
12
-
12
-
-
35
Total Personal
$
843,984
$
425,470
$
264,957
$
134,195
$
51,938
$
83,880
$
-
$
31,978
$
1,836,402
Year-to-Date gross
write-offs
$
2,597
$
19,480
$
33,310
$
17,825
$
4,576
$
2,160
$
-
$
3,031
$
82,979
Auto
Pass
$
1,139,411
$
995,283
$
702,884
$
464,005
$
314,721
$
142,456
$
-
$
-
$
3,758,760
Substandard
3,992
17,559
14,881
11,699
7,590
5,306
-
-
61,027
Loss
-
-
-
-
19
6
-
-
25
Total Auto
$
1,143,403
$
1,012,842
$
717,765
$
475,704
$
322,330
$
147,768
$
-
$
-
$
3,819,812
Year-to-Date gross
write-offs
$
6,682
$
29,448
$
20,777
$
12,602
$
5,203
$
1,572
$
-
$
-
$
76,284
Other consumer
Pass
$
35,716
$
25,008
$
20,233
$
15,243
$
7,179
$
1,756
$
64,322
$
-
$
169,457
Substandard
-
45
211
114
20
47
476
-
913
Loss
-
-
-
1,025
363
-
-
-
1,388
Total Other
consumer
$
35,716
$
25,053
$
20,444
$
16,382
$
7,562
$
1,803
$
64,798
$
-
$
171,758
Year-to-Date gross
write-offs
$
64
$
226
$
286
$
254
$
358
$
1,960
$
-
$
-
$
3,148
Total BPPR
$
5,780,091
$
4,397,712
$
3,319,515
$
2,939,917
$
2,025,094
$
5,979,515
$
3,184,806
$
31,978
$
27,658,628
59
December 31, 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
$
349,850
$
138,662
$
118,143
$
380,479
$
274,195
$
534,623
$
4,394
$
-
$
1,800,346
Watch
-
2,468
21,142
94,135
39,881
151,526
1,249
-
310,401
Special Mention
-
-
2,711
7,840
-
4,560
-
-
15,111
Substandard
-
-
1,775
2,729
-
22,080
-
-
26,584
Total commercial
multi-family
$
349,850
$
141,130
$
143,771
$
485,183
$
314,076
$
712,789
$
5,643
$
-
$
2,152,442
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
563
$
-
$
-
$
563
Commercial real estate non-owner occupied
Pass
$
216,537
$
162,382
$
296,653
$
467,811
$
163,984
$
582,004
$
6,024
$
-
$
1,895,395
Watch
10,300
11,369
11,441
15,141
9,333
65,750
500
-
123,834
Special Mention
-
2,069
-
-
-
1,902
-
-
3,971
Substandard
-
-
-
5,973
4,726
114,255
-
-
124,954
Total commercial
real estate non-
owner occupied
$
226,837
$
175,820
$
308,094
$
488,925
$
178,043
$
763,911
$
6,524
$
-
$
2,148,154
Commercial real estate owner occupied
Pass
$
561,716
$
198,946
$
192,174
$
188,536
$
180,981
$
288,439
$
8,803
$
-
$
1,619,595
Watch
-
48,837
39,519
30,764
12,813
52,010
3,179
-
187,122
Special Mention
-
17,946
-
-
-
10,944
-
-
28,890
Substandard
-
2,705
-
39,474
1,571
77,130
-
-
120,880
Total commercial
real estate owner
occupied
$
561,716
$
268,434
$
231,693
$
258,774
$
195,365
$
428,523
$
11,982
$
-
$
1,956,487
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
27
$
-
$
-
$
27
60
December 31, 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 and industrial
Pass
$
247,703
$
357,722
$
230,702
$
278,950
$
249,467
$
545,331
$
338,026
$
-
$
2,247,901
Watch
34,700
5,196
47,136
70,767
42,072
151,368
15,650
-
366,889
Special Mention
-
-
4,649
63
284
198
738
-
5,932
Substandard
-
5,546
838
4,145
112
1,393
4,583
-
16,617
Total commercial
and industrial
$
282,403
$
368,464
$
283,325
$
353,925
$
291,935
$
698,290
$
358,997
$
-
$
2,637,339
Year-to-Date gross
write-offs
$
100
$
1,106
$
483
$
-
$
599
$
25
$
132
$
-
$
2,445
Construction
Pass
$
358,475
$
427,221
$
291,714
$
85,385
$
-
$
6,030
$
12,491
$
-
$
1,181,316
Watch
1,366
15,771
72,580
27,870
-
6,941
-
-
124,528
Special Mention
-
-
2,912
-
-
-
-
-
2,912
Substandard
-
-
-
8,602
-
-
-
-
8,602
Total construction
$
359,841
$
442,992
$
367,206
$
121,857
$
-
$
12,971
$
12,491
$
-
$
1,317,358
Mortgage
Pass
$
100,210
$
78,166
$
79,367
$
205,446
$
259,877
$
564,985
$
-
$
-
$
1,288,051
Substandard
-
-
644
495
217
12,066
-
-
13,422
Total mortgage
$
100,210
$
78,166
$
80,011
$
205,941
$
260,094
$
577,051
$
-
$
-
$
1,301,473
61
December 31, 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
$
-
$
-
$
-
$
-
$
-
$
-
$
(
14
)
$
-
$
(
14
)
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
(
14
)
$
-
$
(
14
)
HELOCs
Pass
$
-
$
-
$
-
$
-
$
-
$
5,201
$
59,363
$
9,422
$
73,986
Substandard
-
-
-
-
-
1,276
12
543
1,831
Loss
-
-
-
-
-
139
-
828
967
Total HELOCs
$
-
$
-
$
-
$
-
$
-
$
6,616
$
59,375
$
10,793
$
76,784
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
-
$
84
$
-
$
84
Personal
Pass
$
18,658
$
17,906
$
12,102
$
15,593
$
3,061
$
1,272
$
-
$
-
$
68,592
Substandard
74
329
309
153
55
256
-
-
1,176
Loss
10
-
-
-
-
48
-
-
58
Total Personal
$
18,742
$
18,235
$
12,411
$
15,746
$
3,116
$
1,576
$
-
$
-
$
69,826
Year-to-Date gross
write-offs
$
37
$
1,787
$
2,212
$
3,420
$
638
$
46
$
-
$
-
$
8,140
Other consumer
Pass
$
-
$
-
$
-
$
-
$
-
$
-
$
9,012
$
-
$
9,012
Substandard
-
-
-
-
-
-
1
-
1
Loss
-
-
-
-
-
-
28
-
28
Total Other
consumer
$
-
$
-
$
-
$
-
$
-
$
-
$
9,041
$
-
$
9,041
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
-
$
924
$
-
$
924
Total Popular U.S.
$
1,899,599
$
1,493,241
$
1,426,511
$
1,930,351
$
1,242,629
$
3,201,727
$
464,039
$
10,793
$
11,668,890
62
December 31, 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
$
362,178
$
171,568
$
154,616
$
511,755
$
294,731
$
581,926
$
4,501
$
-
$
2,081,275
Watch
-
18,263
21,142
94,658
39,881
153,268
1,249
-
328,461
Special Mention
222
-
2,711
7,840
73
4,687
-
-
15,533
Substandard
-
-
1,775
2,729
-
26,017
-
-
30,521
Total commercial
multi-family
$
362,400
$
189,831
$
180,244
$
616,982
$
334,685
$
765,898
$
5,750
$
-
$
2,455,790
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
563
$
-
$
-
$
563
Commercial real estate non-owner occupied
Pass
$
652,153
$
609,616
$
561,891
$
1,254,276
$
648,411
$
1,253,459
$
14,504
$
-
$
4,994,310
Watch
34,101
23,334
54,442
20,281
43,473
134,903
500
-
311,034
Special Mention
933
2,069
872
144
23,724
20,300
-
-
48,042
Substandard
-
726
8,406
34,463
6,164
140,139
-
-
189,898
Total commercial
real estate non-
owner occupied
$
687,187
$
635,745
$
625,611
$
1,309,164
$
721,772
$
1,548,801
$
15,004
$
-
$
5,543,284
Year-to-Date gross
write-offs
$
-
$
13,356
$
-
$
134
$
-
$
86
$
-
$
-
$
13,576
Commercial real estate owner occupied
Pass
$
719,004
$
312,724
$
263,462
$
244,251
$
350,018
$
566,934
$
29,271
$
-
$
2,485,664
Watch
6,255
75,760
45,867
66,329
42,222
130,056
5,370
-
371,859
Special Mention
-
17,946
1,494
18,063
726
23,581
1,500
-
63,310
Substandard
9,405
4,584
1,839
58,664
8,957
148,488
-
-
231,937
Doubtful
75
-
-
-
62
173
-
-
310
Total commercial
real estate owner
occupied
$
734,739
$
411,014
$
312,662
$
387,307
$
401,985
$
869,232
$
36,141
$
-
$
3,153,080
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
390
$
-
$
-
$
390
Commercial and industrial
Pass
$
1,605,104
$
956,243
$
879,951
$
721,703
$
442,640
$
891,894
$
1,714,881
$
-
$
7,212,416
Watch
46,406
97,674
66,330
114,296
48,981
170,586
239,140
-
783,413
Special Mention
4,991
26,356
14,827
6,920
738
4,536
15,695
-
74,063
Substandard
38,422
18,072
49,068
93,916
157,082
16,472
164,437
-
537,469
Doubtful
21
-
-
24
-
6
-
-
51
Total commercial
and industrial
$
1,694,944
$
1,098,345
$
1,010,176
$
936,859
$
649,441
$
1,083,494
$
2,134,153
$
-
$
8,607,412
Year-to-Date gross
write-offs
$
1,687
$
1,822
$
2,126
$
655
$
620
$
828
$
9,452
$
-
$
17,190
63
December 31, 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
$
387,050
$
527,184
$
362,388
$
85,385
$
3,608
$
15,722
$
65,249
$
-
$
1,446,586
Watch
1,366
58,973
112,811
35,999
-
6,941
709
-
216,799
Special Mention
-
-
2,912
-
-
-
-
-
2,912
Substandard
-
-
-
8,602
-
-
-
-
8,602
Total construction
$
388,416
$
586,157
$
478,111
$
129,986
$
3,608
$
22,663
$
65,958
$
-
$
1,674,899
Mortgage
Pass
$
1,087,005
$
950,992
$
762,692
$
591,764
$
633,030
$
4,542,964
$
-
$
-
$
8,568,447
Substandard
-
151
3,759
2,410
981
73,692
-
-
80,993
Total mortgage
$
1,087,005
$
951,143
$
766,451
$
594,174
$
634,011
$
4,616,656
$
-
$
-
$
8,649,440
Year-to-Date gross
write-offs
$
31
$
-
$
1
$
-
$
-
$
1,404
$
-
$
-
$
1,436
Leasing
Pass
$
682,378
$
535,227
$
354,748
$
251,520
$
135,973
$
32,270
$
-
$
-
$
1,992,116
Substandard
601
1,891
2,424
2,249
1,302
585
-
-
9,052
Loss
175
-
22
-
-
-
-
-
197
Total leasing
$
683,154
$
537,118
$
357,194
$
253,769
$
137,275
$
32,855
$
-
$
-
$
2,001,365
Year-to-Date gross
write-offs
$
990
$
4,449
$
5,041
$
4,541
$
1,807
$
28
$
-
$
-
$
16,856
64
December 31, 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
$
-
$
-
$
-
$
-
$
-
$
-
$
1,229,187
$
-
$
1,229,187
Substandard
-
-
-
-
-
-
27,526
-
27,526
Loss
-
-
-
-
-
-
4
-
4
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
1,256,717
$
-
$
1,256,717
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
-
$
75,428
$
-
$
75,428
HELOCs
Pass
$
-
$
-
$
-
$
-
$
-
$
5,201
$
61,271
$
9,422
$
75,894
Substandard
-
-
-
-
-
1,276
12
543
1,831
Loss
-
-
-
-
-
139
-
828
967
Total HELOCs
$
-
$
-
$
-
$
-
$
-
$
6,616
$
61,283
$
10,793
$
78,692
Year-to-Date gross
write-offs
$
-
$
-
$
-
$
-
$
-
$
-
$
109
$
-
$
109
Personal
Pass
$
861,190
$
440,062
$
273,543
$
148,144
$
54,381
$
78,486
$
-
$
29,700
$
1,885,506
Substandard
1,526
3,639
3,818
1,785
673
6,910
-
2,278
20,629
Loss
10
4
7
12
-
60
-
-
93
Total Personal
$
862,726
$
443,705
$
277,368
$
149,941
$
55,054
$
85,456
$
-
$
31,978
$
1,906,228
Year-to-Date gross
write-offs
$
2,634
$
21,267
$
35,522
$
21,245
$
5,214
$
2,206
$
-
$
3,031
$
91,119
Auto
Pass
$
1,139,411
$
995,283
$
702,884
$
464,005
$
314,721
$
142,456
$
-
$
-
$
3,758,760
Substandard
3,992
17,559
14,881
11,699
7,590
5,306
-
-
61,027
Loss
-
-
-
-
19
6
-
-
25
Total Auto
$
1,143,403
$
1,012,842
$
717,765
$
475,704
$
322,330
$
147,768
$
-
$
-
$
3,819,812
Year-to-Date gross
write-offs
$
6,682
$
29,448
$
20,777
$
12,602
$
5,203
$
1,572
$
-
$
-
$
76,284
Other consumer
Pass
$
35,716
$
25,008
$
20,233
$
15,243
$
7,179
$
1,756
$
73,334
$
-
$
178,469
Substandard
-
45
211
114
20
47
477
-
914
Loss
-
-
-
1,025
363
-
28
-
1,416
Total Other
consumer
$
35,716
$
25,053
$
20,444
$
16,382
$
7,562
$
1,803
$
73,839
$
-
$
180,799
Year-to-Date gross
write-offs
$
64
$
226
$
286
$
254
$
358
$
1,960
$
924
$
-
$
4,072
Total Popular Inc.
$
7,679,690
$
5,890,953
$
4,746,026
$
4,870,268
$
3,267,723
$
9,181,242
$
3,648,845
$
42,771
$
39,327,518
65
Note 9 – Other real estate owned
The following tables present the
activity related to Other Real Estate
Owned (“OREO”),
for the quarters ended
March 31, 2026 and
2025.
For the quarter ended March 31, 2026
OREO
OREO
(In thousands)
Commercial/Construction
Mortgage
Total
Balance at beginning of period
$
4,911
$
37,522
$
42,433
Write-downs in value
(
190
)
(
535
)
(
725
)
Additions
974
11,394
12,368
Sales
(
558
)
(
7,542
)
(
8,100
)
Other adjustments
-
(
296
)
(
296
)
Ending balance
$
5,137
$
40,543
$
45,680
For the quarter ended March 31, 2025
OREO
OREO
(In thousands)
Commercial/Construction
Mortgage
Total
Balance at beginning of period
$
8,424
$
48,844
$
57,268
Write-downs in value
(
29
)
(
1,199
)
(
1,228
)
Additions
257
8,789
9,046
Sales
(
1,541
)
(
11,229
)
(
12,770
)
Other adjustments
-
(
202
)
(
202
)
Ending balance
$
7,111
$
45,003
$
52,114
66
Note 10 − Other assets
The caption of other assets in the Consolidated
Statements of Financial Condition consists of the
following major categories:
(In thousands)
March 31, 2026
December 31, 2025
Net deferred tax assets (net of valuation allowance)
$
811,150
$
814,265
Investments under the equity method
280,246
261,687
Prepaid taxes
33,621
42,762
Other prepaid expenses
24,984
25,542
Capitalized software costs
193,973
183,381
Derivative assets
23,917
27,913
Trades receivable from brokers and counterparties
551
245
Principal, interest and escrow servicing advances
27,678
30,252
Guaranteed mortgage loan claims receivable
7,093
9,184
Operating ROU assets
97,803
95,234
Finance ROU assets
24,383
23,686
Assets for pension benefit
39,497
38,157
Others
166,873
153,669
Total other assets
$
1,731,769
$
1,705,977
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
March 31, 2026
Software development costs
$
104,516
$
37,735
$
66,781
Software license costs
73,116
39,149
33,967
Cloud computing arrangements
111,549
18,324
93,225
Total Capitalized
software costs [1] [2]
$
289,181
$
95,208
$
193,973
December 31, 2025
Software development costs
$
103,628
$
34,170
$
69,458
Software license costs
46,538
24,475
22,063
Cloud computing arrangements
106,410
14,550
91,860
Total Capitalized
software costs [1] [2]
$
256,576
$
73,195
$
183,381
[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:
67
Quarters ended March 31,
(In thousands)
2026
2025
Software development and license costs
$
23,956
$
21,728
Cloud computing arrangements
3,601
1,366
Total amortization
expense
$
27,557
$
23,094
68
Note 11 – Goodwill and other intangible assets
Goodwill
There were
no
changes in the carrying amount of goodwill
for the quarters ended March 31, 2026 and
2025.
The following tables present the gross amount
of goodwill and accumulated impairment losses
by reportable segment (refer to Note
28 for the definition of the Corporation’s reportable segments):
March 31, 2026
Balance at
Balance at
March 31,
Accumulated
March 31,
2026
impairment
2026
(In thousands)
(gross amounts)
losses
(net amounts)
Banco Popular de Puerto Rico
$
438,710
$
3,801
$
434,909
Popular U.S.
564,456
209,411
355,045
Total Popular,
Inc.
$
1,003,166
$
213,212
$
789,954
December 31, 2025
Balance at
Balance at
December 31,
Accumulated
December 31,
2025
impairment
2025
(In thousands)
(gross amounts)
losses
(net amounts)
Banco Popular de Puerto Rico
$
438,710
$
3,801
$
434,909
Popular U.S.
564,456
209,411
355,045
Total Popular,
Inc.
$
1,003,166
$
213,212
$
789,954
Other Intangible Assets
At March
31, 2026,
the Corporation
had intangible
assets subject
to amortization
amounting to
$
3.9
million (December
31, 2025-
$
4.3
million), which will be amortized through the
year 2029
.
69
Note 12 – Deposits
Total deposits as of the end of the periods presented consisted of:
(In thousands)
March 31, 2026
December 31, 2025
Savings accounts
$
14,632,435
$
14,368,599
NOW, money market and other interest
-bearing demand deposits
27,447,163
27,037,924
Total savings, NOW,
money market and other interest-bearing demand deposits
42,079,598
41,406,523
Certificates of deposit:
Under $250,000
5,616,700
5,564,615
$250,000 and over
4,129,230
3,914,746
Total certificates
of deposit
9,745,930
9,479,361
Total interest-bearing
deposits
$
51,825,528
$
50,885,884
Non- interest-bearing deposits
$
15,785,788
$
15,304,209
Total deposits
$
67,611,316
$
66,190,093
A summary of certificates of deposits by maturity at
March 31, 2026 follows:
(In thousands)
2026
$
6,098,880
2027
1,807,034
2028
775,731
2029
453,492
2030
420,618
2031 and thereafter
190,175
Total certificates of
deposit
$
9,745,930
At March 31, 2026, the Corporation had brokered
deposits amounting to $
1.0
billion (December 31, 2025 - $
1.0
billion).
The aggregate amount of overdrafts in demand
deposit accounts that were reclassified to loans was
$
9.2
million at March 31, 2026
(December 31, 2025 - $
10.7
million).
At
March
31,
2026,
Puerto
Rico
government
deposits
amounted
to
$
19.7
billion.
Puerto
Rico
government
deposits
are
interest
bearing accounts, which are indexed to short-term market
rates and fluctuate in cost with changes in those rates, in accordance
with
contractual terms.
70
Note 13 – Borrowings
Assets sold under agreements to repurchase
Assets sold under agreements to repurchase amounted
to $
35
million at March 31, 2026 and $
39
million at December 31, 2025.
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
March 31, 2026
December 31, 2025
Repurchase
Repurchase
(In thousands)
liability
liability
U.S. Treasury securities
Within 30 days
$
15,083
$
29,356
After 30 to 90 days
19,493
9,645
Total U.S. Treasury
securities
34,576
39,001
Total
$
34,576
$
39,001
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 March 31, 2026 and December 31, 2025,
other short-term borrowings consisted of $
350
million and $
650
million, respectively, in
FHLB Advances.
71
Notes Payable
The following table presents the composition of notes
payable at March 31, 2026 and December
31, 2025.
(In thousands)
March 31, 2026
December 31, 2025
Advances with the FHLB with maturities ranging from
2026
through
2029
paying interest at
monthly
fixed rates ranging from
0.69
% to
4.17
%
$
139,620
$
164,620
Unsecured senior debt securities maturing on
2028
paying interest
semi-annually
at a fixed rate of
7.25
%, net of debt issuance costs of $
3,045
396,955
396,558
Junior subordinated deferrable interest debentures (related to
trust preferred securities) maturing on
2034
with fixed interest rates ranging from
6.125
% to
6.564
%, net of debt issuance costs of $
227
198,406
198,399
Total notes payable
$
734,981
$
759,577
Note: Refer to the 2025 Form 10-K for rates information
at December 31, 2025.
A breakdown of borrowings by contractual maturities
at March 31, 2026 is included in the table
below.
Assets sold under
Short-term
(In thousands)
agreements to
repurchase
borrowings
Notes payable
Total
2026
34,576
350,000
49,500
434,076
2027
-
-
6,113
6,113
2028
-
-
441,305
441,305
2029
-
-
39,657
39,657
Later years
-
-
198,406
198,406
Total borrowings
$
34,576
$
350,000
$
734,981
$
1,119,557
At March
31, 2026
and December 31,
2025, the
Corporation had FHLB
borrowing facilities whereby
the Corporation could
borrow
up to
$
4.7
billion and $
4.8
billion, respectively,
of which $
0.5
billion and $
0.8
billion, respectively,
were used. The
FHLB borrowing
facilities are collateralized with securities and loans
held-in-portfolio, and do not have restrictive covenants
or callable features.
Also, at March 31,
2026, the Corporation had borrowing
facilities at the discount
window of the Federal Reserve
Bank of New York
amounting to $
12.2
billion (December 31, 2025 - $
12.1
billion), which remained unused at March 31, 2026 and December 31, 2025.
The facilities are a collateralized source of credit that
is highly dependable even under difficult market
conditions.
72
Note 14 − Other liabilities
The caption of other liabilities in the Consolidated
Statements of Financial Condition consists of the
following major categories:
(In thousands)
March 31, 2026
December 31, 2025
Accrued expenses
$
232,452
$
321,203
Accrued interest payable
58,961
66,240
Accounts payable
98,568
78,998
Dividends payable
48,665
49,596
Trades payable
297,657
595,911
Liability for GNMA loans sold with an option to repurchase
8,225
8,734
Reserves for loan indemnifications
2,624
2,704
Reserve for operational losses
21,344
20,723
Operating lease liabilities
107,396
104,958
Finance lease liabilities
27,525
27,389
Pension benefit obligation
4,624
4,739
Postretirement benefit obligation
104,477
103,974
Others
76,541
75,348
Total other liabilities
$
1,089,059
$
1,460,517
73
Note 15 – Stockholders’ equity
As of March 31,
2026, stockholders’ equity totaled $
6.3
billion. During the quarter
ended March 31, 2026, the
Corporation declared
cash dividends of $
0.75
(2025 - $
0.70
) per common share amounting to
$
48.7
million (2025 - $
48.4
million). The quarterly dividend
of $
0.75
per share declared to stockholders of record as
of the close of business on
March 18, 2026
was paid on
April 1, 2026
.
During the
quarter ended
March 31,
2026, the
Corporation completed
the
repurchase of
1,155,398
shares of
common stock
for
$
155.2
million at an average price of
$
134.31
per share under the 2025 common stock
repurchase program. As of March 31, 2026,
$
126.0
million
remained
available
for
stock
repurchase
under
the
2025
common
stock
repurchase
program.
During
the
quarter
ended March
31, 2025,
the Corporation
completed the
repurchase of
1,270,569
shares of
common stock
for $
122.3
million at
an
average price of $
96.24
per share, as part of the 2024 common stock
repurchase program.
74
Note 16 – Other comprehensive income (loss)
The
following
table
presents
changes
in
accumulated
other
comprehensive
income
(loss)
by
component
for
the
quarters
ended
March 31, 2026 and 2025.
Changes in Accumulated Other Comprehensive Income
(Loss) by Component [1]
Quarters ended March 31,
(In thousands)
2026
2025
Foreign currency translation
Beginning Balance
$
(
85,282
)
$
(
71,365
)
Other comprehensive loss
(
256
)
(
6,646
)
Net change
(
256
)
(
6,646
)
Ending balance
$
(
85,538
)
$
(
78,011
)
Adjustment of pension and
postretirement benefit plans
Beginning Balance
$
(
91,155
)
$
(
94,692
)
Amounts reclassified from accumulated other comprehensive loss
for
amortization of net losses
1,411
1,421
Net change
1,411
1,421
Ending balance
$
(
89,744
)
$
(
93,271
)
Unrealized net holding losses on
debt securities
Beginning Balance
$
(
1,005,650
)
$
(
1,495,183
)
Other comprehensive (loss) income before reclassifications
(
25,257
)
140,229
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
37,501
36,249
Net change
12,244
176,478
Ending balance
$
(
993,406
)
$
(
1,318,705
)
Total accumulated
other comprehensive loss
$
(
1,168,688
)
$
(
1,489,987
)
[1] All amounts presented are net of tax.
75
The following table
presents the amounts
reclassified out of
each component of
accumulated other comprehensive loss
during the
quarters ended March 31, 2026 and 2025.
Reclassifications Out of Accumulated Other Comprehensive
Loss
Affected Line Item in the
Quarters ended March 31,
(In thousands)
Consolidated Statements of Operations
2026
2025
Adjustment of pension and postretirement benefit plans
Amortization of net losses
Other operating expenses
$
(
2,258
)
$
(
2,273
)
Total before tax
(
2,258
)
(
2,273
)
Income tax benefit
847
852
Total net of tax
$
(
1,411
)
$
(
1,421
)
Unrealized holding losses on debts securities
Amortization of unrealized net losses of debt
securities transferred to held-to-maturity
Investment securities
$
(
46,876
)
$
(
45,311
)
Total before tax
(
46,876
)
(
45,311
)
Income tax benefit
9,375
9,062
Total net of tax
$
(
37,501
)
$
(
36,249
)
Total reclassification
adjustments, net of tax
$
(
38,912
)
$
(
37,670
)
76
Note 17 – 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 March 31, 2026,
the Corporation serviced $
414
million (December 31, 2025
- $
429
million) in residential mortgage loans
subject
to credit recourse provisions, principally loans associated
with FNMA and FHLMC residential mortgage
loan securitization programs.
In the event of any customer default,
pursuant to the credit recourse provided, the Corporation is required
to repurchase the loan or
reimburse
the
third
party
investor
for
the
incurred loss.
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 the interest, if applicable.
During the quarter
ended
March
31,
2026,
the
Corporation
repurchased
approximately
$
0.2
million
of
unpaid
principal
balance
in
mortgage
loans
subject
to
the
credit
recourse
provisions
(March
31,
2025
-
$
0.3
million).
In
the
event
of
nonperformance
by
the
borrower,
the
Corporation has
rights to
the
underlying collateral
securing the
mortgage loan.
The
Corporation suffers
ultimate losses
on these
loans when the proceeds from a foreclosure sale of the property underlying a defaulted mortgage loan are less than the outstanding
principal balance of the loan plus any uncollected interest advanced and the
costs of holding and disposing the related property.
At
March 31, 2026,
the Corporation’s liability
established to cover the
estimated credit loss
exposure related to loans
sold or serviced
with credit recourse amounted to $
2
million (December 31, 2025 - $
3
million).
From
time
to
time, the
Corporation sells
loans and
agrees to
indemnify the
purchaser for
credit
losses
or
any
breach
of
certain
representations and warranties made in connection
with the sale.
Servicing agreements
relating to
the mortgage-backed
securities programs
of FNMA,
FHLMC and
GNMA, and
to mortgage
loans
sold or serviced to certain other investors, including FHLMC,
require the Corporation to advance funds to
make scheduled payments
of principal,
interest, taxes
and insurance,
if such
payments have
not been
received from
the borrowers.
At March
31, 2026,
the
Corporation serviced $
8.0
billion in mortgage loans for third parties, including the loans serviced with credit recourse (December 31,
2025 - $
8.2
billion). The Corporation generally recovers funds advanced pursuant to these arrangements from
the mortgage owner,
from liquidation proceeds when the mortgage
loan is foreclosed or,
in the case of FHA/VA
loans, under the applicable FHA
and
VA
insurance
and guarantees
programs. However,
in the
meantime, the
Corporation must
absorb the
cost
of the
funds
it
advances
during the
time the
advance is
outstanding. The
Corporation must
also bear
the costs
of attempting
to collect
on delinquent
and
defaulted
mortgage
loans.
In
addition,
if
a
defaulted
loan
is
not
cured,
the
mortgage
loan
would
be
canceled
as
part
of
the
foreclosure proceedings and the
Corporation would not
receive any future servicing
income with respect
to that loan.
At March 31,
2026,
the
outstanding balance
of
funds
advanced
by
the
Corporation under
such
mortgage
loan servicing
agreements was
$
28
million
(December
31,
2025
-
$
30
million).
To
the
extent
the
mortgage
loans
underlying
the
Corporation’s
servicing
portfolio
experience
increased delinquencies,
the
Corporation would
be
required to
dedicate
additional cash
resources to
comply
with its
obligation to advance funds as well as incur additional
administrative costs related to increases in collection
efforts.
Popular,
Inc. Holding
Company (“PIHC”) fully
and unconditionally guarantees
certain borrowing
obligations issued by
certain of
its
100
%
owned
consolidated
subsidiaries
amounting
to
$
94
million
at
March
31,
2026
and
December
31,
2025,
respectively.
In
addition, at both March 31, 2026 and
December 31, 2025, PIHC fully and unconditionally guaranteed on
a subordinated basis $
193
million
of
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
2025
Form
10-K
for
further
information on the trust preferred securities.
77
Note 18 – 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)
March 31, 2026
December 31, 2025
Commitments to extend credit:
Credit card lines
$
6,514,524
$
6,415,208
Commercial lines of credit
4,260,637
4,257,505
Construction lines of credit
1,139,056
1,197,319
Other consumer unused credit commitments
283,742
277,635
Commercial letters of credit
6,838
21,248
Standby letters of credit
97,235
111,554
Commitments to originate or fund mortgage loans
20,457
20,099
At March
31, 2026
and December 31,
2025, the
Corporation maintained a
reserve of
$
15
million and
$
14
million, respectively,
for
potential losses associated with unfunded loan commitments
related to commercial and construction lines of
credit.
Other commitments
At March
31, 2026
and December
31, 2025,
the Corporation
also maintained
other non-credit
commitments for
$
5
million and
$
7
million, respectively, primarily for the acquisition of other investments.
Business concentration
Since the Corporation’s business activities are concentrated primarily in Puerto Rico, its results of operations and financial condition
are dependent
upon the
general trends
of the
Puerto Rico
economy and,
in particular,
the residential
and commercial
real estate
markets. The concentration
of the Corporation’s
operations in Puerto Rico
exposes it to
greater risk than other
banking companies
with a wider geographic base. Its
asset and revenue composition by geographical area
is presented in Note 28
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
March 31,
2026, the
Corporation’s direct
exposure to
the Puerto
Rico
government and
its
instrumentalities and
municipalities
totaled
$
390
million,
of
which
$
340
million
were
outstanding
($
391
million
and
$
342
million
at
December
31,
2025).
Of
the
outstanding amount, $
333
million consists of loans and $
7
million are securities ($
333
million and $
9
million at December 31, 2025).
Substantially all
of the
amount outstanding
at March
31, 2026
and December
31, 2025
were obligations from
various Puerto
Rico
municipalities. In most cases, these were “general obligations” of a municipality, to which
the applicable municipality has pledged its
good
faith,
credit
and
unlimited taxing
power,
or
“special
obligations”
of
a
municipality,
to
which
the
applicable
municipality
has
pledged other revenues. At March 31, 2026, approximately
77
% of the Corporation’s exposure to municipal loans and securities
was
concentrated in
the municipalities
of San
Juan, Guaynabo,
Carolina and
Caguas. The
Corporation’s exposure
at March
31, 2026,
78
included
approximately $
47.4
million
in
Automated
Clearing House
(“ACH”) transaction
settlement exposure,
none
of
which was
outstanding.
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 March 31, 2026
:
(In thousands)
Investment
Portfolio
Loans
Total Outstanding
Total Exposure
Central Government
Within 1 year
$
-
$
-
$
-
$
47,400
After 10 years
41
-
41
41
Total Central
Government
41
-
41
47,441
Municipalities
Within 1 year
2,720
11,574
14,294
16,294
After 1 to 5 years
3,910
166,515
170,425
170,425
After 5 to 10 years
450
124,087
124,537
124,537
After 10 years
-
30,991
30,991
30,991
Total Municipalities
7,080
333,167
340,247
342,247
Total Direct Government
Exposure
$
7,121
$
333,167
$
340,288
$
389,688
In addition, at March
31, 2026, the Corporation had
$
201
million in loans insured
or securities issued by
Puerto Rico governmental
entities but for
which the principal
source of
repayment is non-governmental
($
209
million at December
31, 2025). These
included
$
166
million
in
residential
mortgage
loans
insured
by
the
Puerto
Rico
Housing
Finance
Authority
(“HFA”),
a
governmental
instrumentality
that
has
been
designated
as
a
covered
entity
under
PROMESA
(December
31,
2025
-
$
167
million).
These
mortgage loans
are secured
by first
mortgages on
Puerto Rico
residential properties
and the
HFA
insurance covers
losses in
the
event of a
borrower default and upon the
satisfaction of certain other
conditions. The Corporation also
had at March
31, 2026, $
35
million in
bonds issued by
HFA which
are secured by
second mortgage loans
on Puerto Rico
residential properties, and
for which
HFA also provides
insurance to cover losses in the
event of a borrower default and
upon the satisfaction of certain other
conditions
(December 31,
2025 -
$
36
million). In
the event
that the
mortgage loans
insured by
HFA
and held
by the
Corporation directly
or
those serving
as collateral
for the
HFA
bonds default
and the
collateral is
insufficient to
satisfy the
outstanding balance
of these
loans,
HFA’s
ability
to
honor
its
insurance
will
depend, among
other factors,
on
the
financial
condition
of
HFA
at
the
time
such
obligations
become
due
and
payable. The
Corporation does
not consider
the
government guarantee
when
estimating the
credit
losses
associated
with
this
portfolio.
Although
the
Governor
is
currently
authorized
by
local
legislation
to
impose
a
temporary
moratorium on the financial obligations of the HFA, a moratorium on
such obligations has not been imposed as of
the date hereof.
BPPR’s
commercial loan
portfolio also
includes loans
to
private borrowers
who
are service
providers, lessors,
suppliers or
have
other relationships with the government. For example, at March 31, 2026 BPPR had
$
178.4
million ($
178.6
million at December 31,
2025) in
exposure
to
borrowers
that
are
independent
power
producers
that
generate
and
sell
energy
under
Power
Purchase
Agreements to the Puerto Rico
Electric Power Authority (“PREPA”),
which is undergoing a debt
restructuring process under Title
III
of PROMESA.
Borrowers with
exposure to
the government
could be
negatively affected
by the
Commonwealth’s fiscal
crisis and
the
ongoing
Title
III
proceedings
under
PROMESA.
Similarly,
BPPR’s
mortgage
and
consumer
loan
portfolios
include
loans
to
government
employees
and
retirees,
which
could
also
be
negatively
affected
by
fiscal
measures
such
as
employee
layoffs
or
furloughs or reductions in pension benefits.
In
addition,
$
2.6
billion
of
residential
mortgages
and
$
84.8
million
commercial
loans
were
insured
or
guaranteed
by
the
U.S.
Government or
its agencies
at March
31, 2026
(compared to
$
2.5
billion and
$
80.5
million, respectively,
at December
31, 2025).
The Corporation also had
U.S. Treasury and
obligations from the U.S.
Government, its agencies or
government sponsored entities
within the
portfolio of
available-for-sale and
held-to-maturity securities as
described in
Note 5
and 6
to the
Consolidated Financial
Statements.
At March
31, 2026,
the Corporation
had operations
in the
United States
Virgin Islands
(the “USVI”)
and had
$
28
million in
direct
exposure to USVI government
entities (December 31, 2025
- $
28
million). The USVI has
been experiencing a number of
fiscal and
economic challenges that could adversely affect the ability
of its public corporations and instrumentalities
to service their outstanding
79
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.
At March 31, 2026, the Corporation had
operations in the British Virgin Islands (“BVI”)
and it had a loan portfolio amounting to
$
197
million comprised
of various
retail and
commercial clients,
compared to
a loan
portfolio of
$
195
million at
December 31,
2025. At
March 31, 2026, the Corporation had
no
significant exposure to a single borrower
in the BVI.
Legal Proceedings
The nature of Popular’s
business ordinarily generates claims, litigation, arbitration,
regulatory and governmental investigations, and
legal
and
administrative
cases
and
proceedings
(collectively,
“Legal
Proceedings”).
Popular’s
Legal
Proceedings
may
involve
various lines
of business
and include
claims relating
to contract,
torts, consumer
protection, securities,
antitrust, employment,
tax
and
other
laws.
The
recovery
sought
in
Legal
Proceedings
may
include
substantial
or
indeterminate
compensatory
damages,
punitive
damages,
injunctive
relief,
or
recovery
on
a
class-wide
basis.
When
the
Corporation
determines
that
it
has
meritorious
defenses to the claims
asserted, it vigorously defends
itself. The Corporation will
consider the settlement of
cases (including cases
where it has meritorious defenses) when, in management’s judgment,
it is in the best interest of the Corporation and
its stockholders
to do so.
On at least
a quarterly basis,
Popular assesses its
liabilities and contingencies
relating to outstanding Legal
Proceedings
utilizing the most current information available. For
matters where it is probable that the Corporation will
incur a material loss and the
amount can be reasonably estimated, the Corporation establishes an accrual for
the loss. Once established, the accrual is
adjusted
on at least a quarterly basis to reflect any relevant
developments, as appropriate. For matters where a material loss is not probable,
or the amount of the loss cannot be reasonably
estimated, no accrual is established.
In certain cases,
exposure to loss
exists in
excess of any
accrual to the
extent such loss
is reasonably possible,
but not
probable.
Management believes and
estimates that the
range of reasonably
possible losses (with
respect to those
matters where such
limits
may be determined in excess of amounts accrued) for current Legal Proceedings ranged from $
0
to approximately $
6.3
million as of
March 31,
2026. In
certain cases,
management cannot
reasonably estimate
the possible
loss at
this time.
Any estimate
involves
significant
judgment,
given
the
varying
stages
of
the
Legal
Proceedings
(including
the
fact
that
many
of
them
are
currently
in
preliminary stages), the existence of multiple defendants in several of the current Legal Proceedings whose share of liability has yet
to be
determined, the
numerous unresolved issues
in many
of the
Legal Proceedings,
and the
inherent uncertainty
of the
various
potential
outcomes
of
such
Legal
Proceedings.
Accordingly,
management’s
estimate
will
change
from
time-to-time,
and
actual
losses may be more or less than the current estimate.
While the
outcome of
Legal Proceedings
is inherently
uncertain, based
on information
currently available,
advice of
counsel, and
available
insurance
coverage,
management
believes
that
the
amount
it
has
already
accrued
is
adequate
and
any
incremental
liability arising from
the Legal Proceedings
in matters in
which a loss
amount can be
reasonably estimated will not
have a material
adverse effect
on the Corporation’s
consolidated financial position.
However, in
the event
of unexpected future
developments, it is
possible that
the ultimate
resolution of
these matters
in a
reporting period, if
unfavorable, could have
a material
adverse effect
on
the Corporation’s consolidated financial position for that period.
80
Note 19 – Non-consolidated variable interest
entities
The Corporation is involved with
two
statutory trusts which it created to issue trust preferred securities to the public. These
trusts are
deemed to
be variable
interest entities
(“VIEs”) since
the equity
investors at
risk have
no substantial
decision-making rights.
The
Corporation does not
hold any variable
interest in the
trusts, and therefore,
cannot be the
trusts’ primary beneficiary.
Furthermore,
the
Corporation concluded
that
it did
not
hold
a
controlling financial
interest
in
these
trusts
since the
decisions
of
the
trusts
are
predetermined through
the trust
documents and the
guarantee of
the trust
preferred securities is
irrelevant since
in substance
the
sponsor is guaranteeing its own debt.
Also, the
Corporation is
involved with
various special
purpose entities
mainly in
guaranteed mortgage
securitization transactions,
including
GNMA
and
FNMA.
The
Corporation
has
also
engaged
in
securitization
transactions
with
FHLMC,
but
considers
its
exposure
in
the
form
of
servicing
fees
and
servicing
advances
not
to
be
significant
at
March
31,
2026
.
These
special
purpose
entities
are
deemed
to
be
VIEs
since
they
lack
equity
investments
at
risk.
The
Corporation’s
continuing
involvement
in
these
guaranteed loan
securitizations includes
owning certain
beneficial interests in
the form
of securities as
well as
the servicing
rights
retained. The Corporation is not required to provide additional financial support to
any of the variable interest entities to which it has
transferred
the
financial
assets.
The
mortgage-backed
securities,
to
the
extent
retained,
are
classified
in
the
Consolidated
Statements
of
Financial
Condition
as
available-for-sale
or
trading
securities.
The
Corporation
concluded
that,
essentially,
these
entities (FNMA
and GNMA)
control the
design of
their respective
VIEs, dictate
the quality
and nature
of the
collateral, require
the
underlying insurance, set
the servicing standards
via the servicing
guides and can
change them at
will, and can
remove a primary
servicer with cause,
and without cause
in the
case of
FNMA. Moreover,
through their guarantee
obligations, agencies (FNMA
and
GNMA) have the obligation to absorb losses that
could be potentially significant to the VIE.
The
Corporation
holds
variable
interests
in
these
VIEs
in
the
form
of
agency
mortgage-backed
securities
and
collateralized
mortgage obligations, including those securities originated by the Corporation and those acquired from
third parties. Additionally, the
Corporation holds agency mortgage-backed securities
and agency collateralized mortgage obligations
issued by third party
VIEs in
which
it
has
no
other
form
of
continuing
involvement. Refer
to
Note
21
to
the
Consolidated
Financial
Statements
for
additional
information on the debt securities outstanding at March 31,
2026 and December 31, 2025, which are classified
as available-for-sale
and trading securities in
the Consolidated Statements of Financial Condition.
In addition, the Corporation holds
variable interests in
the form of servicing
fees, since it retains
the right to service
the transferred loans in
those government-sponsored special purpose
entities (“SPEs”)
and may
also purchase
the right
to service
loans in
other government-sponsored
SPEs that
were transferred
to
those SPEs by a third-party.
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 March 31, 2026 and December
31, 2025.
81
(In thousands)
March 31, 2026
December 31, 2025
Assets
Servicing assets:
Mortgage servicing rights
$
73,947
$
74,236
Total servicing
assets
$
73,947
$
74,236
Other assets:
Servicing advances
$
3,456
$
3,385
Total other assets
$
3,456
$
3,385
Total assets
$
77,403
$
77,621
Maximum exposure to loss
$
77,403
$
77,621
The size of
the non-consolidated VIEs,
in which the
Corporation has a
variable interest in
the form
of servicing fees,
measured as
the total unpaid principal balance of the loans, amounted
to $
5.9
billion at March 31, 2026 (December 31, 2025 - $
6.0
billion).
The Corporation
determined that
the maximum
exposure to
loss includes
the fair
value of
the MSRs
and the
assumption that
the
servicing advances at March
31, 2026 and December
31, 2025, will not
be recovered. The agency
debt securities are not
included
as part of the maximum exposure to loss since
they are guaranteed by the related agencies.
ASU 2009-17 requires that an ongoing primary beneficiary assessment should be made to determine whether the Corporation is the
primary beneficiary of any of the VIEs it is
involved with. The conclusion on the assessment of these non-consolidated VIEs has not
changed
since
their
initial
evaluation.
The
Corporation
concluded
that
it
is
still
not
the
primary
beneficiary
of
these
VIEs,
and
therefore, these VIEs are not required to be consolidated
in the Corporation’s financial statements at March 31,
2026.
82
Note 20 – Related party transactions
Centro Financiero BHD, S.A.
At March 31, 2026, the Corporation had a
15.63
% equity interest in Centro Financiero BHD, S.A. (“BHD”),
one of the largest banking
and financial services groups in the Dominican Republic. During the quarter ended March 31, 2026, the Corporation recorded $
17.6
million in equity pickup (March 31, 2025 - $
1.0
million), including the net impact of $
13.0
million from net earnings (March 31, 2025 -
$
8.7
million), coupled
with $
4.6
million recorded
through other
comprehensive income
(March 31,
2025 -
($
9.7
) million)
related to
foreign
currency
translation
adjustments
and
changes
in
the
fair
value
of
available
for
sale
securities.
At
March
31,
2026,
the
investment
in BHD
had
a
carrying amount
of
$
267.0
million
(December 31,
2025
-
$
249.4
million)
and
there
were
no
dividends
received by the Corporation during the quarters ended
March 31, 2026 and 2025.
83
Note 21 – 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 2025 Form 10-K.
The estimated fair
value may
be subjective in
nature and may
involve uncertainties and
matters of
significant judgment for
certain
financial instruments. Changes in the underlying assumptions
used in calculating fair value could significantly
affect the results.
Fair Value on a Recurring and Nonrecurring Basis
The following fair value hierarchy tables
present information about the Corporation’s assets
and liabilities measured at fair value
on
a recurring basis at March 31, 2026 and December
31, 2025:
84
At March 31, 2026
(In thousands)
Level 1
Level 2
Level 3
Measured at NAV
Total
RECURRING FAIR VALUE
MEASUREMENTS
Assets
Debt securities available-for-sale:
U.S. Treasury securities
$
6,996,073
$
10,041,968
$
-
$
-
$
17,038,041
Collateralized mortgage obligations - federal
agencies
-
95,122
-
-
95,122
Mortgage-backed securities
-
4,598,973
383
-
4,599,356
Other
-
-
750
-
750
Total debt securities
available-for-sale
$
6,996,073
$
14,736,063
$
1,133
$
-
$
21,733,269
Trading account debt securities, excluding
derivatives:
U.S. Treasury securities
$
3,790
$
350
$
-
$
-
$
4,140
Obligations of Puerto Rico, States and political
subdivisions
-
44
-
-
44
Collateralized mortgage obligations
-
550
-
-
550
Mortgage-backed securities
-
25,496
85
-
25,581
Other
-
-
95
-
95
Total trading account
debt securities, excluding
derivatives
$
3,790
$
26,440
$
180
$
-
$
30,410
Equity securities
$
-
$
51,198
$
-
$
1,135
$
52,333
Mortgage servicing rights
-
-
94,232
-
94,232
Loans held-for-sale
-
5,603
-
-
5,603
Derivatives
-
23,956
-
-
23,956
Total assets measured
at fair value on a
recurring basis
$
6,999,863
$
14,843,260
$
95,545
$
1,135
$
21,939,803
Liabilities
Derivatives
$
-
$
(
22,820
)
$
-
$
-
$
(
22,820
)
Total liabilities measured
at fair value on a
recurring basis
$
-
$
(
22,820
)
$
-
$
-
$
(
22,820
)
85
At December 31, 2025
(In thousands)
Level 1
Level 2
Level 3
Measured at NAV
Total
RECURRING FAIR VALUE
MEASUREMENTS
Assets
Debt securities available-for-sale:
U.S. Treasury securities
$
6,576,313
$
9,147,141
$
-
$
-
$
15,723,454
Collateralized mortgage obligations - federal
agencies
-
100,241
-
-
100,241
Mortgage-backed securities
-
4,750,122
405
-
4,750,527
Other
-
-
750
-
750
Total debt securities
available-for-sale
$
6,576,313
$
13,997,504
$
1,155
$
-
$
20,574,972
Trading account debt securities, excluding
derivatives:
U.S. Treasury securities
$
12,450
$
10
$
-
$
-
$
12,460
Obligations of Puerto Rico, States and political
subdivisions
-
45
-
-
45
Collateralized mortgage obligations
-
567
-
-
567
Mortgage-backed securities
-
23,314
84
-
23,398
Other
-
-
99
-
99
Total trading account
debt securities, excluding
derivatives
$
12,450
$
23,936
$
183
$
-
$
36,569
Equity securities
$
-
$
50,632
$
-
$
852
$
51,484
Mortgage servicing rights
-
-
96,356
-
96,356
Loans held-for-sale
-
9,998
-
-
9,998
Derivatives
-
27,913
-
-
27,913
Total assets measured
at fair value on a
recurring basis
$
6,588,763
$
14,109,983
$
97,694
$
852
$
20,797,292
Liabilities
Derivatives
$
-
$
(
25,740
)
$
-
$
-
$
(
25,740
)
Total liabilities measured
at fair value on a
recurring basis
$
-
$
(
25,740
)
$
-
$
-
$
(
25,740
)
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 March 31, 2026 and December
31, 2025.
(In thousands)
March 31, 2026
Aggregate Unpaid
Fair Value
Principal Balance
Difference
Loans held for sale
$
5,603
$
5,586
$
17
(In thousands)
December 31, 2025
Aggregate Unpaid
Fair Value
Principal Balance
Difference
Loans held for sale
$
9,998
$
9,839
$
159
No
loans held-for-sale were 90 or more days past
due or on nonaccrual status as of March 31,
2026 and December 31, 2025.
86
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 quarters ended March 31,
2026 and 2025 and excludes nonrecurring
fair value measurements of assets no
longer outstanding as of the reporting date.
Quarter ended March 31, 2026
(In thousands)
Level 1
Level 2
Level 3
Total
NONRECURRING FAIR VALUE
MEASUREMENTS
Assets
Write-downs
Loans
[1]
-
-
23,568
23,568
(
541
)
Other real estate owned
[2]
$
-
$
-
$
2,052
$
2,052
$
(
258
)
Other foreclosed assets
[2]
-
-
228
228
(
60
)
Total assets measured
at fair value on a nonrecurring basis
$
-
$
-
$
25,848
$
25,848
$
(
859
)
[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.
Quarter ended March 31, 2025
(In thousands)
Level 1
Level 2
Level 3
Total
NONRECURRING FAIR VALUE
MEASUREMENTS
Assets
Write-downs
Loans
[1]
$
-
$
-
$
4,167
$
4,167
$
(
362
)
Other real estate owned
[2]
-
-
2,018
2,018
(
485
)
Other foreclosed assets
[2]
-
-
133
133
(
76
)
Total assets measured
at fair value on a nonrecurring basis
$
-
$
-
$
6,318
$
6,318
$
(
923
)
[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.
The following tables present the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarters
ended March 31, 2026 and 2025.
Quarter ended March 31, 2026
MBS
Other
MBS
Other
classified
securities
classified
securities
as debt
classified as
as trading
classified
securities
debt securities
account
as trading
Mortgage
available-
available-
debt
account debt
servicing
Total
(In thousands)
for-sale
for-sale
securities
securities
rights
assets
Balance at December 31, 2025
$
405
$
750
$
84
$
99
$
96,356
$
97,694
Gains (losses) included in earnings
-
-
1
(
4
)
(
2,639
)
(
2,642
)
Gains (losses) included in OCI
3
-
-
-
-
3
Additions
-
-
-
-
515
515
Settlements
(
25
)
-
-
-
-
(
25
)
Balance at March 31, 2026
$
383
$
750
$
85
$
95
$
94,232
$
95,545
Changes in unrealized gains (losses) included in
earnings relating to assets still held at March 31,
2026
$
-
$
-
$
-
$
-
$
(
472
)
$
(
472
)
87
Quarter ended March 31, 2025
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 December 31, 2024
$
484
$
2,250
$
84
$
133
$
108,103
$
111,054
Gains (losses) included in earnings
-
-
-
(
6
)
(
3,570
)
(
3,576
)
Gains (losses) included in OCI
(
2
)
-
-
-
-
(
2
)
Additions
-
-
-
-
210
210
Settlements
(
25
)
-
-
-
-
(
25
)
Transfers out of Level 3
-
(
1,500
)
-
-
-
(
1,500
)
Balance at March 31, 2025
$
457
$
750
$
84
$
127
$
104,743
$
106,161
Changes in unrealized gains (losses) included in
earnings relating to assets still held at March 31,
2025
$
-
$
-
$
-
$
9
$
(
1,325
)
$
(
1,316
)
Gains and losses (realized and unrealized) included in earnings for the quarters ended March 31, 2026 and 2025
for Level 3 assets
and liabilities included in the previous tables
are reported in the consolidated statements of
operations as follows:
Quarter ended March 31, 2026
Quarter ended March 31, 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
$
(
2,639
)
$
(
472
)
$
(
3,570
)
$
(
1,325
)
Trading account (loss) profit
(
3
)
-
(
6
)
9
Total
$
(
2,642
)
$
(
472
)
$
(
3,576
)
$
(
1,316
)
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 March 31, 2026 and 2025.
Fair value at
March 31,
(In thousands)
2026
Valuation technique
Unobservable inputs
Weighted average (range) [1]
Other - trading
$
95
Discounted cash flow model
Weighted average life
2
years
Yield
12
.0%
Prepayment speed
10.8
%
Loans held-in-portfolio
$
23,568
[2]
External appraisal
Haircut applied on
external appraisals
35.4
% (
5.0
-
5.0
%)
[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.
88
Fair value at
March 31,
(In thousands)
2025
Valuation technique
Unobservable inputs
Weighted average (range) [1]
Other - trading
$
127
Discounted cash flow model
Weighted average life
2
years
Yield
12
.0%
Prepayment speed
10.8
%
Loans held-in-portfolio
$
4,167
[2]
External appraisal
Haircut applied on
external appraisals
7.5
% (
5.0
.0% -
10.0
.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.
89
Note 22 – 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
March 31, 2026
and December
31, 2025, as applicable. In different interest rate environments,
fair value estimates can differ significantly, especially for certain fixed
rate
financial
instruments.
In
addition,
the
fair
values
presented
do
not
attempt
to
estimate
the
value
of
the
Corporation’s
fee
generating businesses
and anticipated
future business
activities, that
is, they
do not
represent the
Corporation’s value
as a
going
concern. There have been
no changes in the
Corporation’s valuation methodologies and inputs
used to estimate the
fair values for
each class of financial assets and liabilities not measured
at fair value.
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.
90
March 31, 2026
Carrying
Measured
(In thousands)
amount
Level 1
Level 2
Level 3
at NAV
Fair value
Financial Assets:
Cash and due from banks
$
384,922
$
384,922
$
-
$
-
$
-
$
384,922
Money market investments
4,655,699
4,645,897
9,802
-
-
4,655,699
Trading account debt securities, excluding
derivatives
[1]
30,410
3,790
26,440
180
-
30,410
Debt securities available-for-sale
[1]
21,733,269
6,996,073
14,736,063
1,133
-
21,733,269
Debt securities held-to-maturity:
U.S. Treasury securities
$
6,913,002
$
-
$
6,918,757
$
-
$
-
$
6,918,757
Obligations of Puerto Rico, States and political
subdivisions
36,306
-
-
37,205
-
37,205
Collateralized mortgage obligation-federal agency
1,491
-
1,301
-
-
1,301
Securities in wholly owned statutory business trusts
5,960
-
5,960
-
-
5,960
Total debt securities
held-to-maturity
$
6,956,759
$
-
$
6,926,018
$
37,205
$
-
$
6,963,223
Equity securities:
FHLB stock
$
53,796
$
-
$
53,796
$
-
$
-
$
53,796
FRB stock
103,759
-
103,759
-
-
103,759
Other investments
59,611
-
51,198
7,808
1,135
60,141
Total equity securities
$
217,166
$
-
$
208,753
$
7,808
$
1,135
$
217,696
Loans held-for-sale
$
5,603
$
-
$
5,603
$
-
$
-
$
5,603
Loans held-in-portfolio
38,465,973
-
-
37,793,368
-
37,793,368
Mortgage servicing rights
94,232
-
-
94,232
-
94,232
Derivatives
23,956
-
23,956
-
-
23,956
March 31, 2026
Carrying
Measured
(In thousands)
amount
Level 1
Level 2
Level 3
at NAV
Fair value
Financial Liabilities:
Deposits:
Demand deposits
$
57,865,386
$
-
$
57,865,386
$
-
$
-
$
57,865,386
Time deposits
9,745,930
-
9,528,676
-
-
9,528,676
Total deposits
$
67,611,316
$
-
$
67,394,062
$
-
$
-
$
67,394,062
Assets sold under agreements to repurchase
$
34,576
$
-
$
34,580
$
-
$
-
$
34,580
Other short-term borrowings
[2]
350,000
-
350,000
-
-
350,000
Notes payable:
FHLB advances
$
139,620
$
-
$
138,189
$
-
$
-
$
138,189
Unsecured senior debt securities
396,955
-
418,624
-
-
418,624
Junior subordinated deferrable interest debentures
(related to trust preferred securities)
198,406
-
199,020
-
-
199,020
Total notes payable
$
734,981
$
-
$
755,833
$
-
$
-
$
755,833
Derivatives
$
22,820
$
-
$
22,820
$
-
$
-
$
22,820
[1]
Refer to Note 21 to the Consolidated Financial Statements
for the fair value by class of financial asset and its hierarchy
level.
[2]
Refer to Note 13 to the Consolidated Financial Statements
for the composition of other short-term borrowings.
91
December 31, 2025
Carrying
Measured
(In thousands)
amount
Level 1
Level 2
Level 3
at NAV
Fair value
Financial Assets:
Cash and due from banks
$
402,755
$
402,755
$
-
$
-
$
-
$
402,755
Money market investments
4,626,506
4,616,272
10,234
-
-
4,626,506
Trading account debt securities, excluding
derivatives
[1]
36,569
12,450
23,936
183
-
36,569
Debt securities available-for-sale
[1]
20,574,972
6,576,313
13,997,504
1,155
-
20,574,972
Debt securities held-to-maturity:
U.S. Treasury securities
$
7,268,967
$
-
$
7,309,991
$
-
$
-
$
7,309,991
Obligations of Puerto Rico, States and political
subdivisions
45,295
-
6,766
39,564
-
46,330
Collateralized mortgage obligation-federal agency
1,495
-
1,306
-
-
1,306
Securities in wholly owned statutory business trusts
5,960
-
5,960
-
-
5,960
Total debt securities
held-to-maturity
$
7,321,717
$
-
$
7,324,023
$
39,564
$
-
$
7,363,587
Equity securities:
FHLB stock
$
68,422
$
-
$
68,422
$
-
$
-
$
68,422
FRB stock
102,665
-
102,665
-
-
102,665
Other investments
58,761
-
50,632
7,817
852
59,301
Total equity securities
$
229,848
$
-
$
221,719
$
7,817
$
852
$
230,388
Loans held-for-sale
$
9,998
$
-
$
9,998
$
-
$
-
$
9,998
Loans held-in-portfolio
38,519,462
-
-
37,858,044
-
37,858,044
Mortgage servicing rights
96,356
-
-
96,356
-
96,356
Derivatives
27,913
-
27,913
-
-
27,913
December 31, 2025
Carrying
Measured
(In thousands)
amount
Level 1
Level 2
Level 3
at NAV
Fair value
Financial Liabilities:
Deposits:
Demand deposits
$
56,710,732
$
-
$
56,710,732
$
-
$
-
$
56,710,732
Time deposits
9,479,361
-
9,305,980
-
-
9,305,980
Total deposits
$
66,190,093
$
-
$
66,016,712
$
-
$
-
$
66,016,712
Assets sold under agreements to repurchase
$
39,001
$
-
$
39,004
$
-
$
-
$
39,004
Other short-term borrowings
[2]
650,000
-
650,000
-
-
650,000
Notes payable:
FHLB advances
$
164,620
$
-
$
163,417
$
-
$
-
$
163,417
Unsecured senior debt securities
396,558
-
419,300
-
-
419,300
Junior subordinated deferrable interest debentures
(related to trust preferred securities)
198,399
-
191,909
-
-
191,909
Total notes payable
$
759,577
$
-
$
774,626
$
-
$
-
$
774,626
Derivatives
$
25,740
$
-
$
25,740
$
-
$
-
$
25,740
[1]
Refer to Note 21 to the Consolidated Financial Statements
for the fair value by class of financial asset and its hierarchy
level.
[2]
Refer to Note 13 to the Consolidated Financial Statements
for the composition of other short-term borrowings.
Refer
to
Note
18
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
March
31,
2026
and
December
31,
2025.
The
fair
value
of
commitments to
extend credit
and letters
of credit,
which are
based on
the fees
charged to
enter into
those agreements,
are not
material to Popular’s financial statements.
92
Note 23 – 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
ended
March 31, 2026 and 2025:
Quarters ended March 31,
(In thousands, except per share information)
2026
2025
Net income
$
245,674
$
177,502
Preferred stock dividends
(
353
)
(
353
)
Net income applicable to common stock
$
245,321
$
177,149
Average common shares outstanding
64,818,440
69,280,137
Average potential dilutive common shares
39,168
27,544
Average common shares outstanding - assuming dilution
64,857,608
69,307,681
Basic EPS
$
3.78
$
2.56
Diluted EPS
$
3.78
$
2.56
For the quarters
ended March 31, 2026 and
2025, the Corporation calculated the impact
of potential dilutive common shares under
the
treasury
stock
method,
consistent
with
the
method
used
for
the
preparation
of
the
financial
statements
for
the
year
ended
December
31,
2025.
For
a
discussion
of
the
calculation
under
the
treasury
stock
method,
refer
to
Note
30
of
the
Consolidated
Financial Statements included in the 2025 Form 10-K.
93
Note 24 – Revenue from contracts with customers
The
following
table
presents
the
Corporation’s
revenue
streams
from
contracts
with
customers
by
reportable
segment
for
the
quarters ended March 31, 2026 and 2025.
Quarters ended March 31,
(In thousands)
2026
2025
BPPR
Popular U.S.
BPPR
Popular U.S.
Service charges on deposit accounts
$
36,061
$
2,705
$
36,456
$
2,598
Other service fees:
Debit card fees
29,785
224
26,234
198
Insurance fees, excluding reinsurance
7,920
2,691
7,681
1,687
Credit card fees, excluding late fees and membership
fees
27,186
347
25,385
405
Sale and administration of investment products
10,187
-
8,973
-
Trust fees
7,748
-
6,631
-
Total revenue from
contracts with customers
[1]
$
118,887
$
5,967
$
111,360
$
4,888
[1] The amounts include intersegment transactions of $
0.5
million and $
0.6
million, respectively, for the
quarters ended March 31, 2026 and 2025.
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
2025 Form 10-K for a complete description of the nature and
timing of revenue streams from contracts with customers.
94
Note 25 - Stock-based compensation
On May 12,
2020, the stockholders of
the Corporation approved the
Popular, Inc.
2020 Omnibus Incentive Plan,
which permits the
Corporation to
issue several
types of
stock-based compensation
to employees
and directors
of the
Corporation and/or
any of
its
subsidiaries (the
“2020 Incentive
Plan”). The
2020 Incentive
Plan replaced
the Popular,
Inc. 2004
Omnibus Incentive
Plan, which
was in effect
prior to the adoption of
the 2020 Incentive Plan (the
“2004 Incentive Plan” and, together
with the 2020 Incentive
Plan,
the “Incentive Plan”). Participants under the Incentive Plan are designated by the Talent and Compensation Committee of the Board
of Directors (or its delegate, as determined by the Board). Under the Incentive Plan, the Corporation has issued restricted stock and
performance shares to its employees and restricted
stock and restricted stock units (“RSUs”)
to its directors.
The restricted
stock granted
under the
Incentive Plan
to employees
becomes vested
based on
the employees’
continued service
with
Popular.
Unless otherwise stated in an agreement, the compensation cost associated with the shares of restricted stock
granted prior to 2021 was determined based on a two-prong vesting schedule. These grants include ratable vesting over five or four
years commencing at the date of grant (the “graduated vesting portion”) with a portion vested at termination of employment after
attainment of 55 years of age and 10 years of service or 60 years of age and 5 years of service (“the retirement vesting portion”).
The graduated vesting portion is accelerated at termination of employment after attaining the earlier of 55 years of age and 10 years
of service or 60 years of age and 5 years of service. Restricted stock granted on or after 2021 have ratable vesting in equal annual
installments over a period of 4 years or 3 years, depending on the classification of the employee. The vesting schedule is
accelerated at termination of employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age
and 5 years of service.
The
performance share
awards
granted
under
the
Incentive
Plan
consist
of
the
opportunity
to
receive
shares
of
Popular,
Inc.’s
common stock provided that the Corporation achieves certain goals during a three-year performance cycle.
The goals 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 considered to
be a
market condition under
ASC 718.
For equity settled
awards
based
on a
market condition,
the
fair value
is
determined as
of the
grant date
and
is not
subsequently revised
based on
actual
performance.
The ROATCE
metric is considered to
be a performance condition
under ASC 718.
For equity settled
awards based
on
a
performance
condition,
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 number of shares that will
ultimately vest ranges from 50% to a 150% of target based on both market (TSR) and performance (ROATCE) conditions. The
performance shares vest at the end of the three-year performance cycle. If a participant terminates employment after attaining the
earlier of 55 years of age and 10 years of service or 60 years of age and 5 years of service, the performance shares shall continue
outstanding and vest at the end of the performance cycle.
The
following
table
summarizes
the
restricted
stock
and
performance
shares
activity
under
the
Incentive
Plan
for
members
of
management and employees.
95
(Not in thousands)
Shares
Weighted-Average
Grant Date Fair
Value
Non-vested at December 31, 2024
247,908
$
66.86
Granted
226,259
100.35
Performance Shares Quantity Adjustment
55,517
91.18
Vested
(
293,939
)
90.00
Forfeited
(
8,787
)
66.53
Non-vested at December 31, 2025
226,958
$
76.13
Granted
78,215
144.93
Performance Shares Quantity Adjustment
12,282
117.41
Vested
(
90,475
)
120.95
Forfeited
(
788
)
88.87
Non-vested at March 31, 2026
226,192
$
87.80
During the
quarter ended
March 31,
2026,
42,395
shares of
restricted stock
(March 31,
2025 -
72,619
) and
35,820
performance
shares (March 31, 2025 -
47,494
) were awarded to employees under the Incentive
Plan.
During the quarter
ended March 31,
2026, the Corporation recognized
$
5.9
million of restricted stock
expense related to
employee
incentive awards, with a tax
benefit of $
0.6
million (March 31, 2025 -
$
7.5
million, with a tax
benefit of $
0.6
million). For the quarter
ended March 31,
2026, the fair
market value of
the restricted stock
and performance shares
vested was
$
8.3
million at
grant date
and $
17.3
million at vesting date. This excess requires the recognition of a windfall tax benefit of $
3.3
million that was recorded as a
reduction in
income tax
expense. For
the quarter
ended March
31, 2026,
the Corporation
recognized $
3.9
million of
performance
shares
expense,
with
a
tax
benefit
of
$
0.2
million
(March
31,
2025
-
$
3.4
million,
with
a
tax
benefit
of
$
0.4
million).
The
total
unrecognized compensation cost related to non-vested restricted stock awards
and performance shares to employees at March
31,
2026 was $
13.5
million and is expected to be recognized over
a weighted-average period of
1.56
years.
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, 2024
-
$
-
Granted
24,476
101.33
Vested
(
5,363
)
104.33
Forfeited
-
-
Non-vested at December 31, 2025
19,113
$
100.49
Granted
1,166
125.96
Vested
(
1,166
)
125.96
Forfeited
-
-
Non-vested at March 31, 2026
19,113
$
100.49
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 restricted stock or RSUs, at each Director’s election. If RSUs are elected the Directors may
defer the delivery of the shares
of
common
stock
underlying
the
RSUs
award
until
after
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
reinvested dividend
equivalent.
During the quarter ended March 31,
2026,
1,166
RSUs were granted to the
Directors (March 31, 2025 -
1,546
).
During this period,
the Corporation recognized $
0.6
million of restricted stock
expense related to these
RSUs, with a tax
benefit of $
0.1
million (March
96
31, 2025
- $
0.3
million, with
a tax
benefit of
$
48
thousand). The
fair value
at vesting
date of
the RSUs
vested during
the quarter
ended March 31, 2026 for the Directors was $
0.1
million.
97
Note 26 – Income taxes
For the quarter ended March 31, 2026, the
Corporation recorded an income tax expense of $
46.9
million with an effective tax rate
(“ETR”) of
16.0
%, compared to $
45.1
million with an ETR of
20.2
% for the same period of year 2025. Lower
ETR when compared to
the first quarter of 2025 is driven by higher net
exempt income. The Puerto Rico statutory tax
rate is
37.5
% for both periods.
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
March 31, 2026, and December 31, 2025,
were as follows:
98
March 31, 2026
(In thousands)
PR
US
Total
Deferred tax assets:
Tax credits available
for carryforward
$
7,318
$
54,154
$
61,472
Net operating loss and other carryforward available
63,350
554,936
618,286
Postretirement and pension benefits
30,200
-
30,200
Allowance for credit losses
337,923
29,096
367,019
Depreciation
8,528
7,996
16,524
FDIC-assisted transaction
152,665
-
152,665
Lease liability
31,943
18,607
50,550
Unrealized net loss on investment securities
158,885
14,038
172,923
Mortgage Servicing Rights
15,413
-
15,413
Other temporary differences
33,150
7,515
40,665
Total gross deferred
tax assets
839,375
686,342
1,525,717
Deferred tax liabilities:
Intangibles
96,278
56,545
152,823
Right of use assets
29,162
16,922
46,084
Deferred loan origination fees/cost
18,941
2,278
21,219
Loans acquired
17,132
-
17,132
Other temporary differences
9,241
429
9,670
Total gross deferred
tax liabilities
170,754
76,174
246,928
Valuation allowance
81,702
386,586
468,288
Net deferred tax asset
$
586,919
$
223,582
$
810,501
December 31, 2025
(In thousands)
PR
US
Total
Deferred tax assets:
Tax credits available
for carryforward
$
7,318
$
46,632
$
53,950
Net operating loss and other carryforward available
59,578
568,156
627,734
Postretirement and pension benefits
29,453
-
29,453
Allowance for credit losses
255,017
28,465
283,482
Deferred loan origination fees/cost
7,205
(
2,474
)
4,731
Depreciation
8,422
7,899
16,321
FDIC-assisted transaction
152,665
-
152,665
Lease liability
27,382
17,758
45,140
Unrealized net loss on investment securities
160,809
12,850
173,659
Difference in outside basis from pass-through entities
54,457
-
54,457
Mortgage Servicing Rights
15,375
-
15,375
Other temporary differences
26,347
7,586
33,933
Total gross deferred
tax assets
804,028
686,872
1,490,900
Deferred tax liabilities:
Intangibles
92,797
55,760
148,557
Right of use assets
24,846
15,875
40,721
Loans acquired
17,053
-
17,053
Other temporary differences
7,082
429
7,511
Total gross deferred
tax liabilities
141,778
72,064
213,842
Valuation allowance
78,153
386,587
464,740
Net deferred tax asset
$
584,097
$
228,221
$
812,318
99
The net
deferred tax
assets shown
in the
table above
at March
31, 2026,
is reflected
in the
Consolidated Statements of
Financial
Condition as $
811.2
million in net deferred tax
assets in the “Other assets”
caption (December 31, 2025 -
$
814.2
million) and $
649
thousand
in
deferred
tax
liabilities
in
the
“Other
liabilities”
caption
(December
31,
2025
-
$
1.9
million),
reflecting
the
aggregate
deferred tax
assets or
liabilities of
individual tax-paying
subsidiaries
of the
Corporation in
their
respective tax
jurisdiction, Puerto
Rico or the United States.
At
March 31,
2026, the
net deferred
tax assets
of the
U.S. operations
amounted to
$
610.2
million with
a valuation
allowance of
approximately $
386.6
million, for net deferred
tax assets after valuation
allowance of $
223.6
million. The Corporation evaluates the
realization of the deferred tax asset by taxing jurisdiction on a quarterly basis.
The U.S. Operations have generated taxable income
each of the last three
years. The financial results for
the first quarter of 2026
continue to show an
upward trend similar to 2024
and
2025.
These
financial
results
are
objectively
verifiable
positive
evidence.
Additionally,
the
Corporation
considered
as negative
evidence
inconsistency
in
performance
trends,
including lower
than
anticipated
results
in
recent
periods.
Also,
management
considered
the
uncertainty
in
predicting
future
taxable
income,
as
given
the
impact
of
external
factors
such
as
changes
in
macroeconomic
conditions,
geopolitical
issues,
and
shifts
in
monetary
policy.
In
addition,
management
evaluated
the
expiration
period of the NOLs carried forward which begin
to expire in 2028
As of
March 31,
2026, after
weighting all
positive and
negative evidence, the
Corporation concluded that
it is
more likely
than not
that $
223.6
million of
the deferred
tax assets
from the
U.S. operations, comprised
mainly of
net operating losses,
will be
realized.
The
Corporation
based
this
determination
on
its
estimated
taxable
income
available
to
realize
the
deferred
tax
assets
for
the
remaining carryforward
periods, together
with the
historical level
of
book income
adjusted by
permanent differences
and taxable
income.
Management
will
continue
to
monitor
and
review
the
U.S.
operation’s
results,
including
recent
earnings
trends,
pre-tax
earnings forecasts,
new tax
initiatives, and
performance indicators, such
as net
income versus
forecast, targeted
loan growth,
net
interest
income
margin,
changes
in
deposit
costs,
allowance
for
credit
losses,
charge-offs,
NPLs
inflows,
and
NPA
balances.
Significant changes,
or
a combination
of changes,
could
positively or
negatively impact
the amount
of
deferred tax
assets to
be
realized in the future.
At March 31, 2026, the
Corporation’s net deferred tax assets related to
its Puerto Rico operations amounted to $
668.6
million.
The
Corporation’s Puerto Rico Banking operation has a historical record of profitability. This is considered as strong objectively verifiable
positive
evidence
that
outweighs
any
negative
evidence
considered
by
management
in
the
evaluation
of
the
realization
of
the
deferred tax assets.
Based on this evidence
and management’s estimate of
future taxable income, the
Corporation has concluded
that it is more likely than not that such net deferred
tax assets
of the Puerto Rico Banking operations will
be realized.
The Holding Company operation has been in a cumulative loss position 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 $
81.7
million as of March 31, 2026.
The
Corporation and
its subsidiaries
file
income tax
returns in
Puerto
Rico, the
U.S. federal
jurisdiction, various
U.S. states
and
political subdivisions,
and foreign
jurisdictions. At
March 31,
2026, the
following years
remain subject
to
examination in
the U.S.
Federal jurisdiction, 2022 and thereafter; and in
the Puerto Rico jurisdiction, 2019 and thereafter.
100
Note 27 – Supplemental disclosure on the consolidated
statements of cash flows
Additional disclosures on cash flow information and
non-cash activities for the quarters ended March
31, 2026 and March 31, 2025
are listed in the following table:
(In thousands)
March 31, 2026
March 31, 2025
Non-cash activities:
Loans transferred to other real estate
$
10,427
$
7,067
Loans transferred to other property
21,752
24,673
Total loans transferred
to foreclosed assets
32,179
31,740
Loans transferred to other assets
11,852
13,992
Financed sales of other real estate assets
783
1,932
Financed sales of other foreclosed assets
13,461
14,979
Total financed sales
of foreclosed assets
14,244
16,911
Financed sale of premises and equipment
14,372
15,329
Transfers from loans held-in-portfolio to
loans held-for-sale
9,094
-
Transfers from loans held-for-sale to loans
held-in-portfolio
409
776
Loans securitized into investment securities
[1]
11,453
1,718
Trades receivable from brokers and counterparties
51
936
Trades payable to brokers and counterparties
297,657
495,397
Net change in receivables from investments maturities
-
14,589
Recognition of mortgage servicing rights on securitizations
or asset transfers
515
210
Loans booked under the GNMA buy-back option
3,483
1,921
Capitalization of lease right of use asset
10,396
7,288
[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
Statements of Financial Condition that sum to
the total of the same such amounts shown
in the Consolidated Statements of Cash
Flows.
(In thousands)
March 31, 2026
March 31, 2025
Cash and due from banks
$
378,866
$
373,718
Restricted cash and due from banks
6,056
6,447
Restricted cash in money market investments
9,803
10,457
Total cash and due
from banks, and restricted cash
[2]
$
394,725
$
390,622
[2]
Refer to Note 4 - Restrictions on cash and due from banks
and certain securities for nature of restrictions.
101
Note 28 – Segment reporting
The
Corporation’s
corporate
structure
consists
of
two
reportable
segments
–
Banco Popular de Puerto Rico and Popular U.S.
Management determined the reportable segments based on the internal reporting used to evaluate performance and to assess
where to allocate resources.
The segments were
determined based on the
organizational structure, which focuses
primarily on the
markets the segments serve, as well as on the products
and services offered by the segments.
The chief operating
decision maker (“CODM”) of
the Corporation is
the Chief Executive
Officer (“CEO”) who
utilizes net income
as
one of
the segment
profitability measures,
to evaluate
the performance
of each
reportable segment and
assess where
to allocate
resources effectively.
The CEO
receives
profitability reports
that
include net
income
per segment,
net
interest income
and
other
income
and expense
categories. The
CODM uses
the segment’s
net income
and components
of net
income, including
segment
revenues and
expenses to
assess performance
and to
manage important
aspects by
each reportable
segments,
such as
human
capital, investment in technology, making budget allocations,
as well as other strategic decisions.
Banco Popular de Puerto Rico:
The Banco
Popular de
Puerto Rico
reportable segment
includes commercial,
consumer and
retail banking
operations, as
well as
mortgage and auto lending operations conducted
at BPPR, including U.S. based activities conducted
through its New York
Branch.
Other financial
services within the
BPPR segment
include the trust
service units
of BPPR,
asset management services
of Popular
Asset Management and
the brokerage operations
of Popular Securities,
and the insurance
agency and reinsurance
businesses of
Popular Insurance, Popular Risk Services, Popular Life
Re, and Popular Re.
Popular U.S.:
Popular U.S. reportable segment
consists of the
banking operations of Popular
Bank (PB), Popular Insurance
Agency, U.S.A.,
and
PEF.
PB
operates through
a retail
branch network
in the
U.S. mainland
under the
name of
Popular,
and equipment
leasing and
financing services through PEF.
Popular Insurance Agency,
U.S.A. offers investment and insurance
services across the PB
branch
network.
The Corporate group
consists primarily of
the holding companies
Popular, Inc.,
Popular North America,
Popular International Bank
and certain of the Corporation’s investments accounted for under
the equity method, including BHD.
The
accounting
policies
of
the
individual
operating
segments
are
the
same
as
those
of
the
Corporation.
Transactions
between
reportable segments are primarily conducted at market rates, resulting
in profits that are eliminated for reporting consolidated results
of
operations. Assets
representing transactions
between reportable
segments
or
the
Corporate
group
are
also
eliminated in
the
tables presented below.
The tables that follow present the results of operations
and total assets by reportable segments:
102
2026
For the quarter ended March 31, 2026
Intersegment
(In thousands)
BPPR
Popular U.S.
Eliminations
Interest income
$
748,501
$
198,248
$
-
Interest expense
180,555
86,541
-
Net interest income
567,946
111,707
-
Provision for credit losses
73,533
2,383
-
Non-interest income
144,777
7,952
(
21
)
Personnel costs
152,634
25,147
(
21
)
Professional fees
11,966
2,649
-
Technology and
software expenses
65,721
9,534
-
Processing and transactional services
38,457
607
-
Amortization of intangibles
240
144
-
Depreciation expense
10,966
2,189
-
Other operating expenses
[1]
122,325
25,289
-
Total operating
expenses
402,309
65,559
(
21
)
Income before income tax
236,881
51,717
-
Income tax expense
32,511
14,752
-
Net income
$
204,370
$
36,965
$
-
Segment assets
$
60,785,767
$
14,953,476
$
(
49,214
)
For the quarter ended March 31, 2026
Reportable
(In thousands)
Segments
Corporate
Eliminations
Total Popular,
Inc.
Interest income
$
946,749
$
1,326
$
(
859
)
$
947,216
Interest expense
267,096
10,799
(
859
)
277,036
Net interest income (expense)
679,653
(
9,473
)
-
670,180
Provision for credit losses (benefit)
75,916
(
30
)
-
75,886
Non-interest income
152,708
13,844
(
926
)
165,626
Personnel costs
177,760
38,338
(
29
)
216,069
Professional fees
14,615
11,347
(
409
)
25,553
Technology and
software expenses
75,255
13,884
-
89,139
Processing and transactional services
39,064
23
-
39,087
Amortization of intangibles
384
-
-
384
Depreciation expense
13,155
383
-
13,538
Other operating expenses
[1]
147,614
(
63,662
)
(
412
)
83,540
Total operating
expenses
467,847
313
(
850
)
467,310
Income before income tax
288,598
4,088
(
76
)
292,610
Income tax expense
47,263
(
327
)
-
46,936
Net income
$
241,335
$
4,415
$
(
76
)
$
245,674
Segment assets
$
75,690,029
$
5,797,656
$
(
5,356,667
)
$
76,131,018
[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.
103
2025
For the quarter ended March 31, 2025
Intersegment
(In thousands)
BPPR
Popular U.S.
Eliminations
Interest income
$
731,888
$
186,392
$
(
1,681
)
Interest expense
209,996
93,450
(
1,681
)
Net interest income
521,892
92,942
-
Provision for credit losses (benefit)
53,512
10,610
-
Non-interest income
137,505
6,143
-
Personnel costs
151,284
25,442
-
Professional fees
13,059
2,739
-
Technology and
software expenses
64,151
10,088
-
Processing and transactional services
37,179
597
-
Amortization of intangibles
342
255
-
Depreciation expense
9,694
2,197
-
Other operating expenses
[1]
128,754
25,619
-
Total operating
expenses
404,463
66,937
-
Income before income tax
201,422
21,538
-
Income tax expense
35,443
6,722
-
Net income
$
165,979
$
14,816
$
-
Segment assets
$
59,288,907
$
14,529,602
$
(
166,540
)
For the quarter ended March 31, 2025
Reportable
(In thousands)
Segments
Corporate
Eliminations
Total Popular,
Inc.
Interest income
916,599
1,536
(
1,137
)
916,998
Interest expense
301,765
10,773
(
1,137
)
311,401
Net interest income (expense)
$
614,834
$
(
9,237
)
$
-
$
605,597
Provision for credit losses (benefit)
64,122
(
41
)
-
64,081
Non-interest income
143,648
9,029
(
616
)
152,061
Personnel costs
176,726
35,987
-
212,713
Professional fees
15,798
11,357
(
330
)
26,825
Technology and
software expenses
74,239
9,429
-
83,668
Processing and transactional services
37,776
5
-
37,781
Amortization of intangibles
597
-
-
597
Depreciation expense
11,891
389
-
12,280
Other operating expenses
[1]
154,373
(
56,402
)
(
823
)
97,148
Total operating
expenses
471,400
765
(
1,153
)
471,012
Income before income tax
222,960
(
932
)
537
222,565
Income tax expense (benefit)
42,165
2,675
223
45,063
Net income
$
180,795
$
(
3,607
)
$
314
$
177,502
Segment assets
$
73,651,969
$
5,906,249
$
(
5,519,612
)
$
74,038,606
[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.
104
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 first
quarter of 2026,
BPPR did
no
t participate in
loans originated by
PB (2025 -
$
6
million). Total
assets for the
BPPR
segment related
to its
operations in
the United
States amounted
to $
1.4
billion (December 31,
2025 -
$
1.4
billion), including
$
102
million in multifamily loans
(December 31, 2025 -
$
102
million), $
413
million in commercial
real estate loans (December
31, 2025 -
$
435
million), $
735
million in C&I loans (December 31, 2025 - $
714
million), and $
31
million in unsecured personal loans (December
31, 2025
- $
41
million). During
the quarter
ended March
31, 2026,
the BPPR
segment generated
$
21.5
million (March
31, 2025
-
$
26.3
million) in revenues from its
operations in the United States,
mainly from net interest income.
In the Virgin Islands,
the BPPR
segment offers
banking products, including
loans and deposits.
Total
assets for the
BPPR segment related
to its
operations in the
U.S. and
British Virgin
Islands amounted
to $
1.1
billion (December
31, 2025
- $
1.0
billion). The
BPPR segment
generated $
13.6
million in revenues during the
first quarter of 2026 (March 31,
2025 - $
11.8
million) from its operations in
the U.S. and British Virgin
Islands.
Geographic Information
Quarter ended
(In thousands)
March 31, 2026
March 31, 2025
Revenues:
[1]
Puerto Rico
$
668,071
$
609,961
United States
139,663
127,216
Other
28,072
20,481
Total consolidated
revenues
$
835,806
$
757,658
[1]
Total revenues include
net interest income, service charges on deposit accounts,
other service fees, mortgage banking activities, net
(loss)
gain, 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)
March 31, 2026
December 31, 2025
Puerto Rico
Total assets
$
58,510,727
$
57,955,465
Loans
25,884,571
25,853,231
Deposits
53,602,880
52,451,498
United States
Total assets
$
16,278,568
$
16,101,705
Loans
12,894,276
12,966,468
Deposits
12,185,414
11,987,581
Other
Total assets
$
1,341,723
$
1,291,097
Loans
516,458
517,817
Deposits
[1]
1,823,022
1,751,014
[1]
Represents deposits from BPPR operations located in the
U.S. and British Virgin Islands.
105
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This
report
includes
management’s
discussion
and
analysis
(“MD&A”)
of
the
consolidated
financial
position
and
financial
performance
of
Popular,
Inc.
(the
“Corporation”
or
“Popular”). All
accompanying
tables,
financial
statements
and
notes
included
elsewhere in this report should be considered an
integral part of this analysis.
The Corporation is a
diversified, publicly owned financial holding company subject
to the supervision and regulation
of the Board of
Governors of the Federal Reserve System. The Corporation has
operations in Puerto Rico, the United States (“U.S.”) mainland and
the U.S. and British Virgin Islands. In Puerto Rico, the
Corporation provides retail, mortgage,
commercial banking services and auto
and equipment
leasing and
financing through its
principal banking subsidiary,
Banco Popular de
Puerto Rico
(“BPPR”), as
well as
broker-dealer and
insurance services
through specialized
subsidiaries. In
the
U.S. mainland,
the
Corporation provides
retail and
commercial
banking
services,
as
well
as
equipment
leasing
and
financing,
through
its
New
York-chartered
banking
subsidiary,
Popular
Bank
(“PB”
or
“Popular
U.S.”),
which
has
branches
located
in
New
York,
New
Jersey
and
Florida.
Note
28
to
the
Consolidated Financial Statements presents information
about the Corporation’s business segments.
As a financial services company,
the Corporation’s earnings are significantly affected
by general business and economic conditions
in the
markets which
we serve.
Lending and
deposit activities
and fee
income generation
are influenced
by the
level of
business
spending and
investment, consumer
income, spending
and savings,
capital market
activities, competition,
customer preferences,
interest rate conditions and prevailing market rates
on competing products.
The Corporation
operates in
a highly
regulated environment
and may
be adversely
affected by
changes in
federal and
local laws
and
regulations.
Also,
competition
with
other
financial
institutions,
as
well
as
with
non-traditional financial
service
providers
and
technology
companies
that
provide
electronic
and
internet-based
financial
solutions
and
services,
could
adversely
affect
its
profitability.
The
Corporation
continuously
monitors
general
business
and
economic
conditions,
industry-related
indicators
and
trends,
competition, interest rate volatility, credit quality indicators, loan, and deposit demand, operational and systems efficiencies, revenue
enhancements and changes in the regulation of financial
services companies.
The description of the Corporation’s business contained in
Item 1 of the 2025 Form 10-K, while not all inclusive,
discusses additional
information about the business of the Corporation. Readers should also refer to “Part I - Item 1A” of the 2025 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.
OVERVIEW
Financial highlights for the quarter ended March 31, 2026
The Corporation’s net income
for the quarter ended March
31, 2026 amounted to $245.7
million, an increase of
$68.2 million when
compared to a
net income of
$177.5 million for the
quarter ended March
31, 2025. Higher net
income was mainly
driven by higher
net interest income of $64.6 million and lower
operating expenses
by $3.7 million.
Financial highlights for the quarter ended March 31, 2026
include:
●
Net interest income amounted to $670.2
million, an increase of $64.6 million
when compared to the quarter ended March
31, 2025, driven
by loan growth
and investments in
U.S. Treasury securities
at higher yields,
and lower cost
of deposits,
mainly
P.R.
public
deposits,
partially
offset
by
lower
money
market
investments.
Net
interest
income
on
a
taxable
equivalent
basis
for
the
first
quarter
of
2026
was
$757.8
million,
an
increase
of
$93.9
million.
Net
interest
margin
expanded by 26 basis points to 3.66%. On
a taxable equivalent basis, net interest margin expanded by
41 basis points to
4.14%.
106
●
The
provision for
credit
losses amounted
to
$75.9 million
for the
quarter ended
March 31,
2026, an
increase of
$11.8
million when compared to the quarter ended March 31, 2025, driven by a higher provision at BPPR in the commercial and
mortgage
loans
portfolio,
partially
offset
by
a
lower
provision
for
the
leases
and
consumer
loans
portfolio
due
to
improvements in credit
quality metrics. Provision
for credit losses
decreased at PB
primarily due to
the higher qualitative
reserves
established
during
the
first
quarter
of
2025
to
maintain
adequate
ACL
coverage,
for
certain
portfolios,
and
improvements in overall credit quality.
●
Non-interest income amounted to $165.6 million, an increase of $13.6 million when compared to the quarter ended March
31, 2025, mainly driven by
higher credit and debit card fee income,
higher asset management fees, and higher insurance
fees.
●
Operating expenses
amounted to
$467.3
million for
the quarter,
reflecting a
decrease of
$3.7 million
when compared
to
the
quarter
ended
March
31,
2025.
The
decrease
was
mainly
driven
by
lower
operational
loss
reserves
and
lower
professional services
expense, partially
offset by
higher technology
and software
expenses as
a result
of our
continued
investment in technology and higher personnel costs, mainly related to salaries, as well as
the valuation of securities held
for deferred benefit plans.
●
Income tax expense of $46.9 million with an effective tax rate (“ETR”) of 16.0%
during the quarter ended March 31, 2026,
compared to an income
tax expense of $45.1
million with an ETR
of 20.2% for the
quarter ended March 31,
2025 due to
higher income before tax, partially offset by higher exempt
income.
●
At March
31, 2026,
the Corporation’s
total assets
amounted to
$76.1 billion, compared
to $75.3
billion at
December 31,
2025.
The
increase
of
$782.8
million
was
primarily
due
to
higher
balance
in
the
available-for-sale
(“AFS”)
securities
portfolio,
driven
by
reinvestment in
U.S.
Treasury
securities,
and
an
increase
in
money market
investments and
other
assets, partially
offset
by a
decrease in
held-to-maturity (“HTM”)
investment securities
and a
decrease in
loan portfolio
balances, mainly at PB.
●
Deposits
amounted
to
$67.6
billion
at
March
31,
2026,
an
increase
of
$1.4
billion
from
December 31,
2025,
primarily
driven by growth at BPPR across retail, corporate,
and P.R. public deposits.
●
Stockholders’ equity
amounted to
$6.3 billion
at March
31, 2026,
compared to
$6.2 billion
at December
31, 2025.
The
Corporation and its banking subsidiaries continue
to be well capitalized. As
of March 31, 2026, the
Corporation’s tangible
book value
per common
share was
$84.98, an
increase of
$2.33 from
December 31,
2025. The
Common Equity
Tier
1
Capital ratio at March 31, 2026 was 15.92%,
compared to 15.72% at December 31, 2025.
Refer to Table 1 for selected financial data for the quarters ended March 31, 2026 and March
31, 2025.
107
Table 1 - Financial highlights
Financial Condition Highlights
Ending Balances at
Average for the quarter ended
(In thousands)
March 31, 2026
December 31,
2025
Variance
March 31, 2026
March 31,
2025
Variance
Money market investments
$
4,655,699
$
4,626,506
$
29,193
$
4,850,141
$
6,379,085
$
(1,528,944)
Investment securities
28,943,544
28,168,918
774,626
29,008,686
28,446,090
562,596
Loans
[1]
39,295,305
39,337,516
(42,211)
39,270,501
37,006,149
2,264,352
Earning assets
72,894,548
72,132,940
761,608
73,129,328
71,831,324
1,298,004
Total assets
76,131,018
75,348,267
782,751
77,089,305
74,951,813
2,137,492
Deposits
67,611,316
66,190,093
1,421,223
67,364,627
65,858,092
1,506,535
Borrowings
1,119,557
1,448,578
(329,021)
1,335,239
959,211
376,028
Total liabilities
69,819,932
69,099,188
720,744
69,688,807
67,795,911
1,892,896
Stockholders’ equity
6,311,086
6,249,079
62,007
6,289,337
7,155,902
(866,565)
Note: Average balances, for balances prior to the period ended March 31, 2026, 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
Quarter ended March 31,
(In thousands, except per share information)
2026
2025
Variance
Net interest income
$
670,180
$
605,597
$
64,583
Provision for credit losses
75,886
64,081
11,805
Non-interest income
165,626
152,061
13,565
Operating expenses
467,310
471,012
(3,702)
Income before income tax
292,610
222,565
70,045
Income tax expense
46,936
45,063
1,873
Net income
$
245,674
$
177,502
$
68,172
Net income applicable to common stock
$
245,321
$
177,149
$
68,172
Net income per common share - basic
$
3.78
$
2.56
$
1.22
Net income per common share - diluted
$
3.78
$
2.56
$
1.22
Dividends declared per common share
$
0.75
$
0.70
$
0.05
Quarter ended March 31,
Selected Statistical Information
2026
2025
Common Stock Data
End market price
$
134.17
$
92.37
Book value per common share at period end
97.27
83.75
Profitability Ratios
Return on average assets
1.29
%
0.96
%
Return on average common equity
13.76
10.07
Net interest spread (non-taxable equivalent basis)
3.09
2.74
Net interest spread (taxable equivalent basis) -non-GAAP
3.57
3.07
Net interest margin (non-taxable equivalent basis)
3.66
3.40
Net interest margin (taxable equivalent basis) -non-GAAP
4.14
3.73
Capitalization Ratios
Average equity to average assets
9.41
%
8.99
%
Common equity Tier 1 capital
15.92
16.11
Tangible common
book value per common share (non-GAAP)
[2]
84.98
72.02
Return on average tangible common equity
[2]
15.46
11.36
Tier 1 capital
15.98
16.17
Total capital
17.71
17.92
Tier 1 leverage
8.60
8.50
[1] Includes loans held-for-sale.
108
[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.
GAAP”) and
non-GAAP financial
measures. Management
uses non-GAAP
financial measures
when it
has 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.
There were no non-GAAP adjustments to net income
for the quarters ended March 31, 2026
and March 31, 2025.
109
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 2 for the quarter ended March
31, 2026, as compared with the same period in 2025,
segregated by major categories of interest earning
assets and interest-bearing
liabilities.
The
main
sources
of
tax-exempt
interest
income
are
certain
loans
and
investments
in
obligations
of
the
U.S.
Government,
its
agencies and sponsored entities, and
certain obligations of the
Commonwealth of Puerto Rico and
its agencies and assets
held by
the Corporation’s
international banking entities.
On Table
2, 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 attributable 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
attributable 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
8 provides
a reconciliation
of total
stockholders’ equity
to tangible
common equity
and total
assets to
tangible assets
as of
March 31, 2026 and December 31, 2025.
110
CRITICAL ACCOUNTING POLICIES / ESTIMATES
The accounting and reporting policies followed by the Corporation
and its subsidiaries conform to U.S. GAAP and
general practices
within
the
financial
services
industry.
Various
elements
of
the
Corporation’s
accounting
policies,
by
their
nature,
are
inherently
subject to estimation techniques, valuation assumptions
and other subjective assessments.
Management
has
discussed
the
development
and
selection
of
the
critical
accounting
estimates
with
the
Corporation’s
Audit
Committee. The Corporation has identified as critical accounting estimates those related to: (i) Fair Value
Measurement of Financial
Instruments;
(ii)
Loans
and
Allowance
for
Credit
Losses;
(iii)
Income
Taxes;
(iv)
Goodwill
and
Other
Intangible
Assets;
and
(v)
Pension and Postretirement
Benefit Obligations. For
a summary of
these critical accounting
estimates, refer to
the MD&A included
in
the
2025
Form
10-K.
Also,
refer
to
Note
2
to
the
Consolidated
Financial
Statements
included
in
the
2025
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
Net interest income (“NII”) for the quarter ended March 31, 2026 was $670.2 million an increase of
$64.6 million, when compared to
the
same
quarter
in
2025.
NII
growth
was
attributable
to
lower
cost
of
deposits
by
$38.4
million,
primarily
due
to
P.R.
public
deposits, loan growth
and higher income
from investments in
U.S Treasury
securities. Net interest
income on a
taxable equivalent
basis for the first quarter of 2026 was $757.8
million, an increase of $94.0 million.
Net interest margin (“NIM”) for the first quarter of 2026 was 3.66%,
an increase of 26 basis points when compared
to the first quarter
of 2025. On
a taxable equivalent basis,
net interest margin for
the first quarter of
2026 was 4.14%, higher
by 41 basis
points when
compared to the first quarter of 2025, mainly due to higher level
of tax-exempt securities and loans. NIM expansion, when
compared
to the same quarter of the previous year,
was primarily due to lower deposit costs resulting from the
repricing of market-linked high-
cost deposits, mainly P.R.
public deposits, and higher yields on
U.S. Treasury securities. Total
cost of deposits decreased 27 basis
points
to
1.56%.
Excluding
P.R.
public
deposits,
total
deposit
costs
decreased
8
basis
points
to
1.09%
compared
to
the
same
quarter in 2025.
On a taxable equivalent basis, the main drivers of
the increase for the first quarter of 2026 were:
●
higher income from
U.S. Treasury
securities by $42.4
million or 44
basis points, attributable
to higher investment
activity
at higher yields with average balances increasing by $2.0 billion supported by deposit growth and purchases completed in
the
third
quarter
of
2025
of
approximately
$2.5
billion
of
U.S.
Treasury
notes
with
an
average
duration
of
1.4
years
through a
combination of
approximately $1.0
billion in
maturing U.S.
Treasuries
and a
reduction of
approximately $1.5
billion in overnight Fed funds;
●
higher income from loans
by $47.0 million or
5 basis points, mostly due
to loan growth, average loan
balances increased
by $2.2 billion when
compared to the same
period in the previous year
driven by commercial, construction and
mortgage
portfolio, along
with higher
yields from
auto, leases
and mortgage
portfolios.
Loan portfolio
yields increased
five basis
points to 7.53%; and
●
lower interest expense on deposits
by $38.4 million or 27
basis points, when compared to the
same quarter in 2025. The
cost of
interest-bearing deposits decreased
by 35
basis points,
driven by
repricing of
market-linked P.R.
public deposits
which
decreased
by
66
basis
points
to
2.66%,
coupled
with
a
decrease
in
Popular
U.S.
deposit
costs
attributable
to
repricing across most deposit products, mainly online
savings and time deposits;
partially offset by:
●
lower income from money
market investments by $26.0 million
or 76 basis points,
as a result of
lower average balances,
driven by higher
re-investment activity in
U.S. Treasuries
and loan growth
as described above, coupled
with lower yields
resulting from declining short-term market rates during
2025.
111
Table 2 - Analysis of Levels & Yields
on a Taxable Equivalent Basis
(Non-GAAP)
Quarter ended March 31,
Variance
Average Volume
Average Yields / Costs
Interest
Attributable to
2026
2025
Variance
2026
2025
Variance
2026
2025
Variance
Rate
Volume
(In millions)
(In thousands)
$
4,850
$
6,379
$
(1,529)
3.70
%
4.46
%
(0.76)
%
Money market
investments
$
44,240
$
70,166
$
(25,926)
$
(10,784)
$
(15,142)
29,810
28,415
1,395
3.52
3.14
0.38
Investment securities [1]
258,897
220,435
38,462
24,348
14,114
34
31
3
5.56
5.82
(0.26)
Trading securities
463
440
23
(20)
43
Total money market,
investment and
trading
34,694
34,825
(131)
3.54
3.38
0.16
securities
303,600
291,041
12,559
13,544
(985)
Loans:
19,723
18,489
1,234
6.71
6.71
-
Commercial
326,387
305,968
20,419
3
20,416
1,697
1,309
388
8.14
8.11
0.03
Construction
34,068
26,190
7,878
102
7,776
1,985
1,930
55
7.35
7.14
0.21
Leasing
36,459
34,444
2,015
1,015
1,000
8,664
8,168
496
6.08
5.82
0.26
Mortgage
131,679
118,917
12,762
5,360
7,402
3,309
3,203
106
13.86
14.04
(0.18)
Consumer
113,129
110,859
2,270
(1,351)
3,621
3,892
3,907
(15)
9.33
9.12
0.21
Auto
89,496
87,850
1,646
1,980
(334)
39,270
37,006
2,264
7.53
7.48
0.05
Total loans
731,218
684,228
46,990
7,109
39,881
$
73,964
$
71,831
$
2,133
5.66
%
5.49
%
0.17
%
Total earning assets
$
1,034,818
$
975,269
$
59,549
$
20,653
$
38,896
Interest bearing
deposits:
$
8,554
$
7,983
$
571
1.62
%
1.73
%
(0.11)
%
NOW and money
market
$
34,159
$
34,002
$
157
$
(4,227)
$
4,384
14,633
14,507
126
0.77
0.87
(0.10)
Savings
27,714
31,280
(3,566)
(2,118)
(1,448)
8,714
8,400
314
2.99
3.22
(0.23)
Time deposits
64,243
66,681
(2,438)
(4,969)
2,531
20,362
20,286
76
2.66
3.32
(0.66)
P.R. public
deposits
133,302
165,900
(32,598)
(33,046)
448
52,263
51,176
1,087
2.01
2.36
(0.35)
Total interest bearing
deposits
259,418
297,863
(38,445)
(44,360)
5,915
15,101
14,682
419
Non-interest bearing
demand deposits
67,364
65,858
1,506
1.56
1.83
(0.27)
Total deposits
259,418
297,863
(38,445)
(44,360)
5,915
597
121
476
3.88
4.77
(0.89)
Short-term borrowings
5,703
1,426
4,277
(284)
4,561
Other medium and
772
862
(90)
6.26
5.66
0.60
long-term debt
11,915
12,112
(197)
1,223
(1,420)
Total interest bearing
53,632
52,159
1,473
2.09
2.42
(0.33)
liabilities (excluding
demand deposits)
277,036
311,401
(34,365)
(43,421)
9,056
Other sources of funds
5,231
4,990
241
$
73,964
$
71,831
$
2,133
1.52
%
1.76
%
(0.24)
%
Total source of funds
$
277,036
$
311,401
$
(34,365)
$
(43,421)
$
9,056
Net interest margin/
income on a taxable
equivalent basis (Non-
GAAP)
4.14
%
3.73
%
0.41
%
$
757,782
$
663,868
$
93,914
$
64,074
$
29,840
3.57
%
3.07
%
0.50
%
Net interest spread
Taxable equivalent
adjustment
87,602
58,271
29,331
Net interest margin/
income non-taxable
equivalent basis (GAAP)
3.66
%
3.40
%
0.26
%
$
670,180
$
605,597
$
64,583
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.
112
[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.
113
Provision for Credit Losses - Loans Held-in-Portfolio
and Unfunded Commitments
For the quarter ended
March 31, 2026, the
Corporation recorded a provision for
credit losses of $75.8
million, an increase of
$11.9
million
when compared
to
the same
quarter of
the previous
year.
The
provision for
loan
and lease
losses
was $75.7
million, an
increase of
$10.5 million,
and the
provision for
unfunded commitments
was $0.1
million, an
unfavorable variance
of $1.4
million,
mainly driven by higher unfunded commitments in the
Popular Bank.
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 2026, among the three scenarios evaluated
to estimate the
ACL, the baseline scenario
was assigned the highest probability,
followed by the pessimistic scenario,
which weight was increased
during 2025 in response to ongoing 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 2025, were as follows:
●
In the BPPR segment, the provision for
loan losses was $73.3 million, an increase of
$20.6 million when compared to the
same quarter
in 2025,
driven by
higher provision
expense for
the commercial
portfolio by
$39.1 million,
primarily due
to
loan modifications, an
additional specific reserve to
a single borrower
in the telecommunications
industry,
and higher net
charge-offs due to an impairment recorded during the quarter of $11.1 million mainly due to a commercial real
estate loan.
Both
the
borrower
with
the
specific
reserve
and
the
commercial
real
estate
loan
were
classified
as
NPLs
in
the
third
quarter of
2025. Higher
provisions were
partially offset
by decreases
of $15.8
million and
$4.5 million
in the
consumer
loan and leases portfolios,
respectively, showing improvement in credit quality.
●
In the Popular U.S. segment, the
provision for loans losses was
$2.4 million, a decrease of
$10.1 million when compared
to the
same quarter
in 2025. The
decrease was primarily
driven by lower
provision expense in
both the commercial
and
consumer loan
portfolio, with
reductions of
$7.5 million
and $2.6
million, respectively.
The reduction
in the
commercial
loan
segment
was mainly
driven by
higher qualitative
reserves established
during the
first
quarter of
2025 to
maintain
adequate ACL coverage. The
decrease in the consumer
loan portfolio was mainly
attributable to improvements in overall
credit quality and lower ending balances.
At March 31,
2026, the total allowance
for credit losses for
loans held-in-portfolio amounted to $823.7
million, an increase of
$15.6
million when
compared to
December 31, 2025.
The ratio
of the
allowance for credit
losses to
loans held-in-portfolio was
2.10% at
March 31,
2026 versus
to 2.05%
at December
31, 2025.
Refer to
Note 8
to the
Consolidated Financial
Statements for
additional
information
on
the
Corporation’s methodology
to
estimate its
ACL.
Refer
to
the
Credit
Risk
section
of
this
MD&A
for
a
detailed
analysis of net charge-offs, non-performing assets, the allowance
for credit losses and selected loan losses statistics.
Non-Interest Income
Non-interest income amounted
to $165.6 million
for the
first quarter of
2026, an increase
of $13.6 million
when compared with
the
same quarter for the previous year. The variance was primarily
due to:
●
higher other services fees
by $8.4 million mainly
due to $5.4 million
in higher debit
and credit card fees
and higher asset
management commissions by $1.2 million; and
●
higher other operating income by
$3.9 million mainly due
to a $4.4 million increase
in earnings from an
investment under
equity method.
Operating Expenses
Operating expenses for the first quarter of 2026 totaled $467.3 million, a decrease of $3.7 million when compared to the first quarter
of 2025, mainly driven by:
●
lower other
operating expenses
by $8.7
million mainly
driven by
lower reserves
for operational
losses and
lower
pension plan costs due to changes in actuarial assumptions;
114
●
lower professional fees by $1.3 million due to lower
costs associated with regulatory compliance activities;
and
●
net gains in other
real estate owned (OREO) by
$1.3 million due to fair
value increases as well
as higher gains on
sale;
partially offset by:
●
higher technology and
software expenses, including
software amortization, by
$5.5 million mainly
due to continuing
investments in technology and transformation initiatives;
and
●
higher personnel costs
of $3.4 million
mainly due to
increase in salaries
expenses of $3.9
million driven
by exempt
employees as well higher valuation of securities held
for deferred benefit plans.
115
Table 3 - Operating Expenses
Quarters ended March 31,
(In thousands)
2026
2025
Variance
Personnel costs:
Salaries
$
134,813
$
130,950
$
3,863
Commissions, incentives and other bonuses
40,185
37,986
2,199
Profit sharing
(1,203)
-
(1,203)
Pension, postretirement and medical insurance
14,896
14,566
330
Other personnel costs, including payroll taxes
27,378
29,211
(1,833)
Total personnel
costs
216,069
212,713
3,356
Net occupancy expenses
27,299
27,218
81
Equipment expenses
5,229
5,302
(73)
Other taxes
17,677
18,725
(1,048)
Professional fees
25,553
26,825
(1,272)
Technology and
software expenses
89,139
83,668
5,471
Processing and transactional services:
Credit and debit cards
14,206
12,926
1,280
Other processing and transactional services
24,881
24,855
26
Total processing
and transactional services
39,087
37,781
1,306
Communications
4,509
4,904
(395)
Business promotion:
Rewards and customer loyalty programs
15,393
16,365
(972)
Other business promotion
7,467
7,310
157
Total business
promotion
22,860
23,675
(815)
Deposit insurance
9,917
10,035
(118)
Other real estate owned (OREO) expense (income)
(4,618)
(3,330)
(1,288)
Other operating expenses:
Operational losses
3,975
6,138
(2,163)
All other
10,230
16,761
(6,531)
Total other operating
expenses
14,205
22,899
(8,694)
Amortization of intangibles
384
597
(213)
Total operating
expenses
$
467,310
$
471,012
$
(3,702)
Income Taxes
For the
quarter ended
March 31,
2026, the
Corporation recorded
an income
tax expense
of $46.9
million with
an ETR
of 16.0%,
compared to $45.1 million with
an ETR of 20.2% for
the same period of
year 2025.
Lower ETR when compared to
the first quarter
of 2025 is driven by higher net exempt income.
At March 31, 2026, the Corporation had a net deferred tax asset amounting to $810.5 million, net of a valuation allowance of $468.3
million. The net deferred tax asset related to the U.S.
operations was $223.6 million, net of a valuation
allowance of $386.6
million.
Refer to Note 26 to the Consolidated Financial
Statements for additional information on deferred
tax asset balances.
REPORTABLE SEGMENT RESULTS
The Corporation’s
reportable segments
for managerial
reporting purposes
consist of
Banco Popular
de Puerto
Rico and
Popular
U.S. A Corporate group
has also been defined to support the reportable
segments.
For
a
description
and
definition
of
the
Corporation’s
reportable
segments,
including
additional
financial
information
and
the
underlying management accounting process, refer
to Note 28 to the Consolidated Financial Statements.
116
The corporate group reported
a net income
of $4.4 million for
the quarter ended March
31, 2026, compared with
a net loss
of $3.6
million
for
the same
quarter of
the previous
year,
mainly
due
to
higher income
from
equity
method investments.
There
were no
intercompany distributions between the U.S. subsidiaries
and the bank holding companies during the
first quarters of 2026 or 2025.
Highlights on the earnings results for the reportable
segments are discussed below:
Banco Popular de Puerto Rico
The Banco
Popular de
Puerto Rico
(“BPPR”) reportable
segment’s net
income amounted
to $204.4
million for
the quarter
ended
March 31,
2026, higher
by $38.4
million when
compared to
the same
quarter of
the previous
year.
The main
drivers for
a higher
income included:
●
net interest income of
$567.9 million, an increase of
$46.1 million, mainly driven by
lower deposit cost by $29.4
million or
32 basis points.
P.R.
public deposits costs, which are market linked,
decreased by $32.6 million or 66
basis points as the
cost was favorably impacted by declines in short-term market rates during
2025. Additionally, higher income from loans by
$20.1
million
attributable
to
loan
growth
led
by
commercial,
construction
and
mortgage
portfolios
during
2025,
which
resulted in higher average balances by
$1.6 billion when compared to the first
quarter of 2025. In addition, higher
income
from
investment securities
by $16.7
million or
16
basis points
contributed to
higher net
interest income,
due in
part to
higher investment activity in higher yielding U.S.
Treasury securities. This was partially offset by lower income from money
market investments by
$20.2 million driven
by lower average
balances by $1.2
billion driven by
the deployment of
funds
for loan growth and investments activity,
and lower yields by 78 basis points due to declining short-term market rates. Net
interest margin
expanded 22
basis points
to 3.85%
when compared
to the
same quarter
of 2025
drive by
lower deposit
costs;
●
higher non-interest income by $7.3 million mainly due to higher service fees by $7.0 million mainly due to higher debit and
credit card fees due to higher transaction volume, and
higher asset management fees;
●
lower
operating
expenses
by
$2.2
million
mostly
due
to
lower
operational losses
by
$2.0
million
mainly
related
to
the
mortgage servicing loss
reserves and higher gains
on repossessed unit
sales by $1.3
million, lower professional
fees by
$1.1 million, partially
offset by higher
technology and software expenses
by $1.6 million due
to continuing investments in
technology
and
transformation initiatives,
higher
personnel costs
by
$1.4
million
mainly
due
to
an
increase
in
salaries
expenses driven by exempt employees,
and higher processing and transactional fees
expenses by $1.3 million; and
●
lower income tax expense by $2.9 million due
mainly to higher exempt income;
partially offset by:
●
provision for credit
losses increased by
$20.6 million to
$73.3 million.
Refer to section
Provision for Credit
Losses-Loans
Held-in-Portfolio and Unfunded Commitments in this MD&A for more discussion over the drivers
of the provision for credit
losses by business segment.
Popular U.S.
For the quarter ended March 31, 2026, the
reportable segment of Popular U.S. reported a
net income of $37.0 million, compared
with a net income of $14.8 million for the
same quarter of the previous year. The main drivers for higher net
income are the
following:
●
net interest income of $111.7 million, an increase of $18.8 million, driven by higher interest income
from loans by $15.4
million or 22 basis points, primarily attributable
to loan growth coupled with lower deposit cost driven
by repricing in most
deposit products, most notably in online savings
and time deposits. Additionally, higher income from investment securities
by $3.9 million in part due to higher investment
activity in U.S. Treasury securities. This was partially offset by
lower
income from money market investments by $7.4
million due to lower average balances and an
increase in short-term
117
borrowings expense by $4.3 million resulting from
higher FHLB advances when compared
to the same period of 2025.
Net interest margin at 3.15% expanded 41
basis points, driven by the earning assets
mix and lower deposit costs;
and
●
provision for loan losses was $2.4 million, a decrease
of $10.1 million when compared to the same quarter
in 2025. Refer
to section Provision for Credit Losses-Loans Held-in-Portfolio
and Unfunded Commitments in this MD&A for
more
discussion over the drivers of the provision for
credit losses by business segment;
partially offset by:
●
higher income tax expense by $8.0 million due
to higher income before tax.
STATEMENT
OF FINANCIAL CONDITION ANALYSIS
Assets
The Corporation’s total
assets were $76.1
billion at March
31, 2026, compared
to $75.3 billion
at December 31,
2025. Higher total
assets by $782.8
million was driven
by an increase
in AFS securities
at both BPPR
and PB segments,
money market investments
and
other
assets,
partially
offset
by
a
decrease
in
HTM
securities
and
lower
loan
balances
at
PB.
Refer
to
the
Consolidated
Statements of Financial Condition included in this
report and to the following narrative for
additional information.
Money market investments and investment securities
Money market investments increased by $29.2
million as of March 31,
2026, when compared to December 31,
2025, mainly driven
by
higher deposit
balances.
AFS securities
increased $1.2
billion,
driven by
investment in
U.S. treasury
securities of
$1.3 billion,
partially offset by
maturities and principal paydowns, mainly
in mortgage-backed securities (“MBS”) and higher
unrealized losses in
AFS securities
of $37.9
million. HTM
securities decreased by
$365.0 million
driven by
maturities and
principal paydowns,
partially
offset by
the accretion of
$46.9 million of the
discount related to
U.S. Treasury securities
previously reclassified from AFS
to HTM.
Refer to Note
5 and to
Note 6 to
the Consolidated Financial Statements
for additional information with
respect to the
Corporation’s
debt securities available-for-sale and held-to-maturity.
Loans
Refer to Table
4 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
were $39.3
billion at
March 31,
2026, a
slight decrease
of $37.8
million when
compared to
December 31,
2025.
In
the PB
segment loan
balances decreased
by
$56.1 million
across the
construction, mortgage
and
consumer portfolios,
mainly
due
to
paydowns
in
the
construction
segment
and
runoff
from
the
exited
residential
mortgage
business.
In
the
BPPR
segment, loan
balances increased by
$18.3 million with
modest growth in
the mortgage
and commercial segments,
partially offset
by lower auto loans and leases lending activities.
At
March
31,
2026,
the
Corporation’s
loans
to
non-depository
financial
institutions
(‘’NDFIs’’)
amounted
to
$540.8
million,
an
decrease of $4.2 million, compared to December 31, 2025. At March 31, 2026, the Corporation’s exposure to NDFIs was composed
of approximately $266.1 million to insurance companies
for general corporate purposes unrelated to lending activities,
$105.5 million
related to mortgage
credit intermediaries, and $169.3
million to consumer and
commercial credit intermediaries. All
loans to NDFIs
are current in their contractual payments and carry a
‘pass’ rating.
118
Table 4 - Loans Ending Balances
(In thousands)
March 31, 2026
December 31, 2025
Variance
Loans held-in-portfolio:
Commercial
Commercial multi-family
$
2,427,295
$
2,455,790
$
(28,495)
Commercial real estate non-owner occupied
5,543,451
5,543,284
167
Commercial real estate owner occupied
3,212,356
3,153,080
59,276
Commercial and industrial
8,565,559
8,607,412
(41,853)
Total Commercial
19,748,661
19,759,566
(10,905)
Construction
1,674,193
1,674,899
(706)
Mortgage
8,712,361
8,649,440
62,921
Leasing
1,986,165
2,001,365
(15,200)
Consumer
Credit cards
1,214,199
1,256,717
(42,518)
Home equity lines of credit
79,764
78,692
1,072
Personal
1,913,281
1,906,228
7,053
Auto
3,783,904
3,819,812
(35,908)
Other
177,174
180,799
(3,625)
Total Consumer
7,168,322
7,242,248
(73,926)
Total loans held-in
-portfolio
$
39,289,702
$
39,327,518
$
(37,816)
Loans held-for-sale:
Mortgage
$
5,603
$
9,998
$
(4,395)
Total loans held-for-sale
$
5,603
$
9,998
$
(4,395)
Total loans
$
39,295,305
$
39,337,516
$
(42,211)
119
Other assets
Other assets amounted to
$1.7
billion at March 31,
2026, an increase of
$25.8 million when compared to
December 31, 2025. The
variance
was
mainly
driven
by
an
increase
of
$18.6
million
in
investments under
the
equity
method,
primarily due
to
the
equity
pickup
from
our
investment
in
BHD,
and
an
increase
in
capitalized
software
costs
of
$10.6
million
related
to
technology
modernization, partially offset by lower prepaid taxes of $9.1 million.
Refer to Note 10 to the Consolidated Financial Statements for a
breakdown
of
the
principal
categories
that
comprise
the
caption
of
“Other
Assets”
in
the
Consolidated
Statements
of
Financial
Condition at March 31, 2026 and December 31,
2025.
Liabilities
The Corporation’s total
liabilities were $69.8 billion
at March 31,
2026, an increase of
$720.7 million, when compared to
December
31, 2025. The following is a discussion of
the significant changes in liabilities.
Deposits and Borrowings
Total Deposits
The Corporation’s deposits
totaled $67.6 billion as
of March 31,
2026, compared to $66.2
billion as of
December 31, 2025. Ending
deposit balances
increased by
$1.4 billion
mainly from
higher retail and
commercial deposits
in BPPR
in part
due to
seasonal tax
refunds. Excluding P.R.
public deposits, customer deposits increased by
$1.2 billion. Average deposits increased
by $1.1 billion, or
$383.5 million when excluding P.R. public deposits.
At the
end of
the first
quarter of
2026, Puerto
Rico public
deposits were
$19.7 billion,
representing 30%
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 it
is distributed,
the
use
of
local funds
to
cover
federal
assistance
programs during the U.S. government shutdown, 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.
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 5 for a breakdown of the Corporation’s deposits at March 31, 2026 and December
31, 2025.
120
Table 5 - Deposits Ending Balances
(In thousands)
March 31, 2026
December 31, 2025
Variance
Deposits excluding P.R.
public deposits:
Demand deposits
$
15,778,435
$
15,298,712
$
479,723
Savings, NOW and money market deposits (non-brokered)
23,208,340
22,655,936
552,404
Savings, NOW and money market deposits (brokered)
82,417
87,566
(5,149)
Time deposits (non-brokered)
7,958,260
7,861,848
96,412
Time deposits (brokered CDs)
914,526
866,772
47,754
Sub-total deposits excluding P.R.
public deposits
47,941,978
46,770,834
1,171,144
P.R. public
deposits:
Demand deposits
[1]
11,967,888
11,534,301
433,587
Savings, NOW and money market deposits (non-brokered)
6,828,306
7,134,217
(305,911)
Time deposits (non-brokered)
873,144
750,741
122,403
Sub-total P.R.
public deposits
19,669,338
19,419,259
250,079
Total deposits
$
67,611,316
$
66,190,093
$
1,421,223
[1] Includes interest bearing demand deposits.
Borrowings
The Corporation’s borrowings totaled $1.1 billion at
March 31, 2026, a decrease of $329.0 million
when compared to December 31,
2025.
The
decrease
was
mainly
related
to
lower
FHLB
advances
by
$325.0
million,
mainly
at
PB.
Refer
to
Note
13
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 $6.3 billion at March 31, 2026, an increase of $62.0 million when compared to December 31, 2025. The
increase was principally due to
net income for the
quarter ended March 31, 2026
of $245.7 million, coupled with
the after-tax effect
of the amortization of unrealized losses from securities previously reclassified to HTM of $37.5 million, partially offset by an increase
in
treasury stock
of
$152.4
million, mainly
due
to
common
stock
repurchases, the
common
and
preferred dividends
declared
of
$48.9 million, and
an increase in net
unrealized losses in the
portfolio of AFS
securities of $25.3
million. Refer to
the Consolidated
Statements of Financial Condition, Comprehensive Income and Changes in
Stockholders’ Equity for information on the composition
of stockholders’ equity.
During the quarter ended March 31, 2026, Popular repurchased 1,555,398 shares of common stock for $155.2 million at an average
price of $134.31 per share. As of March
31, 2026, $126.0 million remained available for stock repurchase under the currently active
authorization.
The composition of the Corporation’s financing to total assets
at March 31, 2026 and December 31, 2025
is included in Table 6.
121
Table 6 - Financing to Total
Assets
March 31,
December 31,
% (decrease) increase
% of total assets
(Dollars in millions)
2026
2025
from 2025 to 2026
2026
2025
Non-interest-bearing core deposits
$
15,785
$
15,304
3.1
%
20.7
%
20.3
%
Interest-bearing core deposits
45,872
46,017
(0.3)
60.3
61.1
Interest-bearing other deposits
5,954
4,869
22.3
7.8
6.4
Repurchase agreements
35
39
(10.3)
-
0.1
Other short-term borrowings
350
650
(46.2)
0.5
0.9
Notes payable
735
760
(3.3)
1.0
1.0
Other liabilities
1,089
1,460
(25.4)
1.4
1.9
Stockholders’ equity
6,311
6,249
1.0
8.3
8.3
122
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 March 31, 2026, the Corporation’s, BPPR’s and
PB’s capital ratios continue to exceed the minimum requirements for being
“well-
capitalized”.
The risk-based
capital ratios
presented in
Table
7,
which include
common equity
tier 1,
Tier
1 capital,
total capital
and leverage
capital as of March 31, 2026 and December 31,
2025.
Table 7 - Capital Adequacy
Data
(Dollars in thousands)
March 31, 2026
December 31, 2025
Common equity tier 1 capital:
Common stockholders' equity - U.S. GAAP basis
$
6,288,943
$
6,226,936
AOCI related adjustments due to opt-out election
1,083,150
1,096,805
Goodwill, net of associated deferred tax liability (DTL)
(637,705)
(639,734)
Intangible assets, net of associated DTLs
(4,692)
(5,076)
Deferred tax assets and other deductions
(209,380)
(215,404)
Common equity tier 1 capital
$
6,520,316
$
6,463,527
Additional tier 1 capital:
Preferred stock
22,143
22,143
Additional tier 1 capital
$
22,143
$
22,143
Tier 1 capital
$
6,542,459
$
6,485,670
Tier 2 capital:
Trust preferred securities subject to phase in as
tier 2
192,674
192,674
Other inclusions (deductions), net
515,782
517,723
Tier 2 capital
$
708,456
$
710,397
Total risk-based capital
$
7,250,915
$
7,196,067
Minimum total capital requirement to be well capitalized
$
4,095,067
$
4,112,375
Excess total capital over minimum well capitalized
$
3,155,848
$
3,083,692
Total risk-weighted
assets
$
40,950,669
$
41,123,753
Total assets for leverage
ratio
$
76,104,777
$
74,661,894
Risk-based capital ratios:
Common equity tier 1 capital
15.92
%
15.72
%
Tier 1 capital
15.98
15.77
Total capital
17.71
17.50
Tier 1 leverage
8.60
8.69
123
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
March
31, 2026, continue to exceed the minimum requirements
for being “well-capitalized” under the Basel III
capital rules.
The increase in the common equity Tier I capital ratio, Tier I capital ratio, and total capital ratio as of March
31, 2026 as compared to
December 31, 2025 was mainly due to
the quarter’s earnings,
and lower risk weighted assets driven by
the decrease in loans held-
in-portfolio and lower non-performing
loans held-in-portfolio, partially offset
by the repurchase of
common stock and
common stock
dividends. The decrease in the leverage ratio was driven
by higher total assets which are impacted
by zero-risk weighted assets that
did not have a significant impact on the risk
weighted assets, partially offset by the quarter’s earnings.
Reconciliation to Tangible Common Equity and Tangible Assets
Table
8 provides
a reconciliation
of total
stockholders’ equity
to tangible
common equity
and total
assets to
tangible assets
as of
March 31, 2026, and December 31, 2025.
124
Table 8 - Reconciliation of Tangible
Common Equity and Tangible
Assets
(In thousands, except share or per share information)
March 31, 2026
December 31, 2025
Total stockholders’
equity
$
6,311,086
$
6,249,079
Less: Preferred stock
(22,143)
(22,143)
Less: Goodwill
(789,954)
(789,954)
Less: Other intangibles
(4,692)
(5,076)
Total tangible common
equity
$
5,494,297
$
5,431,906
Total assets
$
76,131,018
$
75,348,267
Less: Goodwill
(789,954)
(789,954)
Less: Other intangibles
(4,692)
(5,076)
Total tangible assets
$
75,336,372
$
74,553,237
Tangible common
equity to tangible assets
7.29
%
7.29
%
Common shares outstanding at end of period
64,654,788
65,719,385
Tangible book value
per common share
$
84.98
$
82.65
Quarterly average
Total stockholders’
equity
$
6,289,337
$
6,938,571
[1]
Less: Preferred Stock
(22,143)
(22,143)
Less: Goodwill
(789,954)
(789,954)
Less: Other intangibles
(4,944)
(5,328)
Total tangible equity
before adjusting for the impact of unrealized losses
on AFS securities including those transferred to HTM
$
5,472,296
$
6,121,146
Return on average tangible common equity before adjusting
for the
impact of unrealized losses on AFS securities including
those transferred
to HTM
18.18
%
15.14
%
Add: Average unrealized losses on AFS securities
743,809
56,761
Add: Average unrealized losses on AFS securities
transferred to HTM
221,114
259,058
Total tangible equity
after add back of impact of unrealized losses on AFS
securities, including those transferred to HTM
$
6,437,219
$
6,436,965
Return on average tangible common equity after add back
of impact of
unrealized losses on AFS securities including those transferred
to HTM
(''ROTCE'')
15.46
%
14.39
%
[1] Average balances exclude certain unrealized
gains or losses on debt securities available-for-sale.
125
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
$21.7 billion
and
$7.0 billion,
respectively, as
of March 31, 2026.
Other assets subject to market risk
include mortgage servicing rights ("MSRs") with
a fair value
of $94.2 million as of March 31, 2026.
Interest Rate Risk (“IRR”)
The Corporation’s net interest income is subject
to various categories of interest rate risk,
including repricing, basis, yield curve and
option risks.
In managing
interest rate
risk, management may
alter the
mix of
floating and
fixed rate
assets and
liabilities, change
pricing
schedules,
adjust
maturities
through
sales
and
purchases
of
investment
securities,
and
enter
into
derivative
contracts,
among other alternatives.
Management utilizes various tools to assess IRR, including 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, by legal entity and on a consolidated basis, is prepared for a five-year period, which in conjunction
with the EVE analysis,
provides management a better view of long-term
IRR.
The Corporation processes NII
simulations under interest rate
scenarios in which the
yield curve is assumed
to rise and
decline by
the same magnitude
(parallel shifts). The
rate scenarios considered in
these market risk
simulations include instantaneous parallel
changes of
-100,
-200, +100,
and +200
basis points
during the
succeeding twelve-month
period. Assumptions
included in
these
analyses
include
that
the
balance
sheet
remains
flat,
relative
levels
of
market
interest
rates
across
all
yield
curve
points
and
indexes, interest rate spreads, loan
prepayments and deposit elasticity.
Thus, they should not be
relied upon as indicative of
actual
results
and
do
not
contemplate
actions
that
management
may
engage
in
as
a
response
to
future
changes
in
interest
rates.
Additionally,
the Corporation
is also
subject to
the risk
inherent in
the use
of different
rate indexes
for the
repricing of
assets and
liabilities, as well as
the risk of pricing lags
due to contractual or timing
differences between the market and
management response
to
changes in
the
rate environment.
These forward-looking
computations are
management’s best
estimate based
on known
and
available information and actual results may differ.
The following
table presents
the results
of the
simulations at
March 31,
2026 and
December 31,
2025, assuming
a static
balance
sheet and parallel changes over flat spot rates over
a one-year time horizon:
126
Table 9 - Net Interest Income Sensitivity
(One Year Projection)
March 31, 2026
December 31, 2025
(Dollars in thousands)
Amount Change
Percent Change
Amount Change
Percent Change
Change in interest rate
+200 basis points
17,583
0.61
(7,520)
(0.27)
+100 basis points
8,316
0.29
(4,379)
(0.16)
-100 basis points
(10,053)
(0.35)
2,691
0.10
-200 basis points
(17,168)
(0.60)
7,488
0.27
As
of
March
31,
2026,
NII
simulations
showed
that
the
Corporation’s
sensitivity
position
was
asset
sensitive.
Compared
to
the
results as of December 31, 2025, the variation in sensitivity and the resulting profile was
mainly due to an increase in U.S. Treasury
Bills as a result
of a rise in
non-interest bearing and low-cost interest-bearing deposits in
Puerto Rico offset in
part by the purchase
of
two-to-three-year
U.S.
Treasury
Notes.
The
profile
reflects
that
in
rising
rate
scenarios,
Popular’s
net
interest
income
would
increase
during
the
one-year
horizon
due
to
the
larger
volume
of
assets
repricing
and
generating
more
interest
income,
while
interest expense increases modestly due to the high
proportion of low-cost deposits.
The
Corporation’s
loan
and
investment
portfolios
are
subject
to
prepayment
risk.
Prepayment
risk
also
could
have
a
significant
impact on the duration of mortgage-backed securities
and collateralized mortgage obligations.
Trading
The Corporation
engages in
trading activities
in the
ordinary course
of business
at its
subsidiaries, BPPR
and Popular
Securities.
Popular Securities’
trading activities
consist primarily
of market-making
activities to
meet expected
customers’ needs
related to
its
retail brokerage business, and purchases and sales of
U.S. Government and government sponsored securities 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 March 31, 2026, the Corporation held trading securities with a fair value of $30.4 million,
representing 0.04% of the Corporation’s
total assets, compared with $36.6 million and 0.05%,
respectively, at December 31, 2025.
The Corporation’s trading activities are
limited by internal policies. For each
of the two subsidiaries, the
market risk assumed under
trading
activities
is
measured
by
the
5-day
net
value-at-risk
(“VAR”),
with
a
confidence
level
of
99%.
The
VAR
measures
the
maximum estimated loss that may occur over a
5-day holding period, given a 99% probability. .
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.
Liquidity
Liquidity Risk Management Process
The Corporation
has adopted
policies and
limits to
monitor the
Corporation’s liquidity
position and
that of
its banking
subsidiaries.
Refer to
the Enterprise
Risk Management
section of
Management’s Discussion
and Analysis
included in
the 2025
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
127
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
89% and 88% of funding of the Corporation’s total assets at March 31, 2026 and December
31, 2025,
respectively. The
ratio of
total ending
loans to
deposits was 58%
and 59%
at March
31, 2026
and December
31, 2025,
respectively.
In addition to
traditional deposits, the
Corporation maintains borrowing arrangements, which
amounted to $1.1
billion
in
outstanding
balances
at
March
31,
2026
(December
31,
2025
-
$1.4
billion).
A
detailed
description
of
the
Corporation’s
borrowings,
including
their
terms,
is
included
in
Note
13
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.
At March 31,
2026, the Corporation’s
available liquidity increased to
$27.7 billion from
$27.0 billion on
December 31, 2025.
During
the first
quarter of 2026,
the Corporation had
no material incremental
use of
its available liquidity
sources. The liquidity
sources of
the Corporation at March 31, 2026 are presented
in Table 10 below:
128
Table 10 - Liquidity Sources
March 31, 2026
December 31, 2025
(In thousands)
BPPR
Popular U.S.
Total
BPPR
Popular U.S.
Total
Unpledged securities and unused funding
sources:
Money market (excess funds at the
Federal Reserve Bank)
$
3,635,635
$
1,010,262
$
4,645,897
$
3,595,806
$
1,020,478
$
4,616,284
Unpledged securities
5,617,332
1,051,193
6,668,525
5,215,981
1,057,129
6,273,110
FHLB borrowing capacity
3,315,007
927,693
4,242,700
3,291,672
692,744
3,984,416
Discount window of the Federal Reserve
Bank borrowing capacity
8,365,380
3,788,737
12,154,117
8,472,866
3,644,486
12,117,352
Total available liquidity
$
20,933,354
$
6,777,885
$
27,711,239
$
20,576,325
$
6,414,837
$
26,991,162
Refer
to
Note
13
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
5 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
deposits,
which
are
fully
collateralized, have
historically provided
the Corporation
with a
sizable source
of relatively
stable and
low-cost funds.
P.R.
public
deposits, while linked to market interest rates,
provide a stable source of funding with
an attractive earning spread. As of March
31,
2026, total Puerto Rico public sector deposits were
$19.7 billion, compared to $19.4 billion at
December 31, 2025.
Core deposits
represent 91%
of total
deposits at
$61.7 million,
as of
March 31,
2026, compared
with 92%
at
$60.9 billion
as
of
December
31,
2025.
Core
deposits
financed
85%
of
the
Corporation’s
earning
assets
at
March
31,
2026,
compared
to
85%
at
December 31, 2025.
The
Corporation
had
$1.0
billion
in
brokered
deposits
at
March
31,
2026,
which
financed
approximately
1%
of
its
total
assets
(December 31, 2025 - $1.0 billion and 1%,
respectively).
The distribution by maturity of certificates of deposit with denominations of $250,000 and over at March 31, 2026 is presented in the
table that follows:
129
Table 11
- Distribution by Maturity of Certificates of Deposit
of $250,000 and Over
(In thousands)
3 months or less
$
2,600,756
Over 3 to 12 months
1,109,024
Over 1 year to 3 years
299,828
Over 3 years
119,622
Total
$
4,129,230
As of March
31, 2026, the
banking subsidiaries had sufficient
current and projected
liquidity sources to meet
their anticipated cash
flow obligations, as well as special needs and off-balance sheet commitments,
in the ordinary course of business and have sufficient
liquidity
resources
to
address
stress
events.
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
12 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 12, 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.
130
Table 12 - Deposits
31-Mar-26
Popular, Inc.
(Dollars in thousands)
BPPR
% of Total
Popular U.S.
% of Total
(Consolidated)
% of Total
Deposits:
Deposits balances under $250,000 [1]
$
24,374,849
44
%
$
8,292,411
68
%
$
32,667,260
48
%
Transactional deposits balances over
$250,000
8,431,271
15
%
2,845,596
23
%
11,276,867
17
%
Time deposits balances over $250,000
2,386,858
4
%
521,619
4
%
2,908,477
4
%
Uninsured foreign deposits
444,415
1
%
-
-
%
444,415
1
%
Collateralized public funds
20,048,501
36
%
265,796
2
%
20,314,297
30
%
Intercompany deposits
200,890
-
%
305,233
3
%
-
-
%
Total deposits
$
55,886,784
100
%
$
12,230,655
100
%
$
67,611,316
100
%
[1] Includes the first $250,000 in balances of transactional
and time deposit accounts with balances in excess
of $250,000.
31-Dec-25
Popular, Inc.
(Dollars in thousands)
BPPR
% of Total
Popular U.S.
% of Total
(Consolidated)
% of Total
Deposits
Deposits balances under $250,000 [1]
$
23,873,328
44
%
$
8,283,967
69
%
$
32,157,295
49
%
Transactional deposits balances over
$250,000
8,254,961
15
%
2,341,365
19
%
10,596,326
16
%
Time deposits balances over $250,000
2,182,301
4
%
794,183
7
%
2,976,484
4
%
Uninsured foreign deposits
446,360
1
%
-
-
%
446,360
1
%
Collateralized public funds
19,748,934
36
%
264,694
2
%
20,013,628
30
%
Intercompany deposits
235,251
-
%
349,483
3
%
-
-
%
Total deposits
$
54,741,135
100
%
$
12,033,692
100
%
$
66,190,093
100
%
[1] Includes the first $250,000 in balances of transactional
and time deposit accounts with balances in excess
of $250,000.
Bank Holding Companies
The principal
sources of
funding for
the 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 $595 million at
March 31, 2026 and
$595 million at December
31, 2025.
The contractual maturities of the BHCs notes payable
at March 31, 2026 are presented in Table 13.
Table 13
- Distribution of BHC's Notes Payable by Contractual
Maturity
Year
(In thousands)
2028
$
396,955
Later years
198,406
Total
$
595,361
131
As of
March 31,
2026, the
BHCs had
cash and
money markets
investments totaling
$1.6 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 $0.75
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
quarter ended March
31, 2026,
the Corporation
declared cash
dividends of
$0.75 per
common share
outstanding ($49
million in the aggregate). The dividends for the Corporation’s
Series A preferred stock amounted to $0.4 million.
During the quarter ended March 31, 2026, the
BHCs received dividends and distributions amounting
to $175 million from BPPR, and
$12 million
from its
other non-banking
subsidiaries. Dividends
from BPPR
constitute Popular,
Inc.’s primary
source of
liquidity.
In
addition, during the quarter ended March 31, 2026,
PIBI, a wholly owned subsidiary of Popular, Inc., had no dividends.
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. At
March 31,
2026, BPPR
could
declare
a
dividend
of
up
to
approximately
$13
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 $4.7 billion at March
31, 2026, debt securities provide 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 and U.S.
government sponsored
agency mortgage-backed securities 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
10 for
details of
the Corporation’s
unpledged debt
securities and available credit facilities with the FHLB and
the discount window of the Federal Reserve Bank.
A substantial portion of
these
debt
securities
could
be
used
to
raise
financing
in
the
U.S.
money
markets
or
from
secured
lending
sources,
subject
to
changes in their fair market value and customary adjustments
(haircuts).
Additional
liquidity
may
be
provided
through
loan
maturities,
prepayments
and
sales.
The
loan
portfolio
provides
a
source
of
collateral to
secure the
available credit
facilities with
the FHLB
and the
discount window
of the
Federal Reserve
Bank. The
loan
portfolio
can
also
be
used
to
obtain
funding
in
the
capital
markets.
Mortgage
loans
and
some
types
of
consumer
loans,
have
secondary markets which the Corporation could
use.
Off-Balance Sheet Arrangements and Other Commitments
132
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
18
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
17
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 March
31, 2026
and
December 31, 2025,
and the results
of their operations
for the
quarters ended March
31, 2026 and
March 31,
2025. Excluded are
investments and equity in earnings from subsidiaries
and affiliates outside the obligor group.
Intercompany balances
and transactions
within the
obligor group
have been
eliminated. Material
amounts due
from, due
to, and
transactions with subsidiaries and affiliates are shown separately. Related party transactions
are also presented separately.
133
Table 14 - Summarized Statement
of Condition
(In thousands)
March 31, 2026
December 31, 2025
Assets
Cash and money market investments
$
468,987
$
524,882
Investment securities
39,780
38,656
Accounts receivables from non-obligor subsidiaries
15,521
12,798
Other loans (net of allowance for credit losses of $102 (2025
- $132))
23,844
24,169
Investment in equity method investees
5,145
5,145
Other assets
103,289
91,618
Total assets
$
656,566
$
697,268
Liabilities and Stockholders' deficit
Accounts payable to non-obligor subsidiaries
$
11,998
$
7,669
Notes payable
595,362
594,958
Other liabilities
108,959
135,785
Stockholders' deficit
(59,753)
(41,144)
Total liabilities and
stockholders' deficit
$
656,566
$
697,268
Table 15 - Summarized Statement
of Operations
For the quarters ended
(In thousands)
March 31, 2026
March 31, 2025
Income:
Dividends from non-obligor subsidiaries
$
187,000
$
206,000
Interest income from non-obligor subsidiaries and affiliates
904
1,181
Other operating income
1,281
838
Total income
$
189,185
$
208,019
Expenses:
Services provided by non-obligor subsidiaries and affiliates
(net of
reimbursement by subsidiaries for services provided by parent
of
$69,903 (2025 - $61,777))
$
5,126
$
3,903
Other expenses
5,694
7,339
Income tax (benefit) expense
(323)
2,679
Total expenses
$
10,497
$
13,921
Net income
$
178,688
$
194,098
134
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 2025 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
2025
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
reflected a 1.1% year-over-year increase in December 2025, with no change on a month-over-month basis. While this index is not a
direct measure of real GNP, it serves as an indicator of ongoing economic activity.
In 2021
and 2022,
inflation rose
sharply in
the U.S.
and Puerto
Rico due
to post-pandemic
demand and supply
chain disruptions.
Inflation
began
to
decrease
by
mid-2022
as
the
Federal
Reserve
raised
interest
rates,
largely
stabilizing
by
September
2024,
leading to a
series of rate
reductions by the Federal
Reserve for the
first time in
four years. As
of March 2026, the
U.S. Consumer
Price Index
reflected a
3.3% year-over-year increase,
which, while below
peak 2022
levels, remains above
the Federal
Reserve’s
2% target. The year-over-year
increase accelerated from 2.4%
in February 2026 to
3.3% in March
2026, primarily driven by
higher
energy and
gasoline prices
resulting from
the recent
geopolitical conflict involving
Iran. In
Puerto Rico,
the Consumer
Price Index
reflected a year-over-year
increase of 2.5%
in March 2026,
up from 2.3%
in February 2026.
It is still
too early to
determine the full
extent to which the conflict involving Iran and its
indirect impacts may impact the global and Puerto
Rico economies.
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”).
In August 2025, President Donald J. Trump dismissed six of the seven members of
the Oversight Board, reportedly due to inefficient
leadership and excessive spending. Three of the dismissed members subsequently filed suit in federal
court challenging the legality
135
of their dismissal. On October 3, 2025, the court issued a preliminary injunction that effectively reinstated such members and barred
the seating of
replacement members while the case
proceeds. Such ruling was
appealed to the
United States Court of
Appeals for
the First Circuit
on December 3, 2025,
and the appeal remains
pending as of March
31, 2026. It is
still too early to
determine what
impact these developments may have on Puerto Rico’s fiscal
and economic affairs.
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 is closely tied to the
economic conditions in Puerto Rico. Deterioration in the Puerto
Rico
economy
could
potentially
increase
delinquencies
and
charge-offs,
thereby
impacting
the
Corporation’s
financial
health.
The
Corporation has direct exposure to P.R. Government Entities, which are mainly concentrated in obligations from various Puerto Rico
municipalities. Additionally,
the Corporation
holds loans
and securities
insured by
P.R.
Government Entities,
such as
the Housing
Finance
Authority,
whose
ability
to
honor
guarantees
depends
on
its
financial
condition.
BPPR’s
commercial,
mortgage,
and
consumer loan portfolios are also exposed to risks from private borrowers who are service providers or have other relationships with
the Puerto
Rico government
and government employees
who could
be negatively
affected by
Puerto Rico’s
fiscal challenges.
For
further
discussion
of
the
Corporation’s
direct
and
indirect
exposure
to
the
Puerto
Rico
government and
its
instrumentalities and
municipalities, please refer to Note 18 – Commitments
and Contingencies to the Consolidated
Financial Statements.
The
Corporation
also
maintains
significant
deposits
from
P.R.
Government
Entities,
with
future
balances
subject
to
various
uncertainties.
Further
information
on
Puerto
Rico
Government
deposits
is
included
in
Note
12
–
Deposits
to
the
Consolidated
Financial Statements.
United States Virgin Islands
The Corporation has
operations in the
United States Virgin
Islands (“USVI”) and
has credit exposure
to USVI
government entities.
For
further
discussion
of
the
Corporation’s
direct
and
indirect
exposure to
USVI
government
entities,
please
refer
to
Note
18
–
Commitments and Contingencies to the Consolidated
Financial Statements.
Non-Performing Assets
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 16.
During
the
first
quarter
of
2026,
the
Corporation’s
credit
quality
metrics
remained
stable.
The
Corporation
continues
to
closely
monitor
the
economic
landscape and
borrower performance,
as
macro-economic uncertainty
and
increased volatility
remain key
136
considerations. Management believes that the
improvements in risk management practices over
recent years and the
overall credit
risk profile of the loan portfolio position the Corporation
to continue to operate successfully in the current environment.
Total
NPAs
of $503.8 million
as of
March 31,
2026 decreased by
$37.0 million when
compared with December
31, 2025. BPPR’s
NPLs
decreased
by
$38.4
million,
primarily driven
by
reductions in
commercial, consumer
and
mortgage
NPLs
of
$17.6 million,
$17.5 million
and $3.0
million, respectively.
The decrease
in commercial
NPLs was
mainly driven
by
an
$11.1
million charge-off
related to a
commercial real estate
facility classified as
NPL in the
third quarter of
2025. The improvement
in consumer NPLs
was
primarily due to a $16.8 million
reduction in auto NPLs driven by increased
payment activity. Popular U.S.
NPLs decreased by $1.8
million, mostly driven by a decrease of $3.7
million in the mortgage NPLs.
On March 31, 2026,
the ratio of NPLs
to total loans held-in-portfolio was
1.17%, compared to 1.27% on
December 31, 2025. Other
real estate owned loans (“OREOs”) totaled $45.7
million, an increase of $3.2 million from December
31, 2025.
The Corporation’s commercial loan
portfolio secured by real
estate (“CRE”) amounted to
$11.2 billion
on March 31,
2026, of which
$3.2 billion was secured with owner occupied properties,
compared with $11.2 billion and $3.2 billion, respectively, on December 31,
2025.
CRE NPLs
amounted to $58.6
million at March
31, 2026, compared
with $76.0 million
at December 31,
2025, driven by
the $11.
1
million net
charge off
on the
CRE facility
discussed above.
The CRE
NPL ratios
for the
BPPR and
Popular U.S.
segments were
0.83% and 0.28%, respectively, on March 31, 2026, compared with 1.23% and
0.25%, respectively, on December 31, 2025.
The non-owner
occupied CRE
portfolio was
$5.5 billion
at March
31, 2026,
split between
$3.4 billion
in BPPR
and $2.2
billion in
Popular U.S. This portfolio is diversified across sectors: retail (33%), hotels (19%), and office space (12%),
which together represent
two-thirds of
total non-owner
occupied CRE
exposure. Specifically,
office space
leasing accounts
for just
1.7% ($673.6
million) of
the total loan portfolio, mainly comprising mid-rise properties with an average loan size of $3 million, and is well diversified by tenant
type.
Within CRE, the
commercial multi-family portfolio is
$2.4 billion (approximately 6%
of total loans),
concentrated in New
York
Metro
($1.4 billion), South Florida ($664.6
million) and Puerto Rico ($238.5 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.
In addition to
the NPLs included in
Table
16, on March
31, 2026 there were
$593.2 million of
performing loans, mostly commercial
loans, which in management’s opinion, are currently subject to potential future classification as non-performing (December 31, 2025
- $499.6 million).
The following table presents the Corporation’s NPAs as of March 31, 2026 and December
31, 2025:
137
Table 16 - Non-Performing
Assets
March 31, 2026
December 31, 2025
(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
$
-
$
10,962
$
10,962
0.5
%
$
112
$
8,636
$
8,748
0.4
%
Commercial real estate non-owner
occupied
26,457
6,987
33,444
0.6
35,692
7,020
42,712
0.8
Commercial real estate owner
occupied
14,192
-
14,192
0.4
24,567
-
24,567
0.8
Commercial and industrial
185,993
6,524
192,517
2.2
183,914
6,498
190,412
2.2
Total Commercial
226,642
24,473
251,115
1.3
244,285
22,154
266,439
1.3
Mortgage
129,367
9,700
139,067
1.6
132,373
13,422
145,795
1.7
Leasing
8,892
-
8,892
0.4
9,179
-
9,179
0.5
Consumer
Home equity lines of credit
-
2,766
2,766
3.5
-
2,796
2,796
3.6
Personal
15,755
905
16,660
0.9
18,863
1,233
20,096
1.1
Auto
35,390
-
35,390
0.9
52,200
-
52,200
1.4
Other
4,227
-
4,227
2.4
1,809
29
1,838
1.0
Total Consumer
55,372
3,671
59,043
0.8
72,872
4,058
76,930
1.1
Total non-performing
loans held-in-
portfolio
420,273
37,844
458,117
1.2
%
458,709
39,634
498,343
1.3
%
Other real estate owned (“OREO”)
45,176
504
45,680
41,929
504
42,433
Total non-performing
assets
[1]
$
465,449
$
38,348
$
503,797
$
500,638
$
40,138
$
540,776
Accruing loans past due 90 days or
more
[2]
$
226,218
$
169
$
226,387
$
228,772
$
188
$
228,960
Ratios:
Non-performing assets to total assets
0.78
%
0.24
%
0.66
%
0.85
%
0.25
%
0.72
%
Non-performing loans held-in-portfolio
to loans held-in-portfolio
1.52
0.33
1.17
1.66
0.34
1.27
Allowance for credit losses to loans
held-in-portfolio
2.65
0.79
2.10
2.60
0.77
2.05
Allowance for credit losses to non-
performing loans, excluding held-for-
sale
174.23
241.77
179.81
156.51
227.42
162.15
[1] There were no non-performing loans held-for-sale
as of March 31, 2026 and December 31, 2025.
[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
$43 million
of residential
mortgage
loans
insured
by
FHA
or
guaranteed
by
the
VA
that
are
no
longer
accruing
interest
as
of
March
31,
2026
(December
31,
2025
-
$47
million).
Furthermore, the Corporation
has $26 million
in reverse mortgage
loans which are
guaranteed by
FHA, but which
are currently
not accruing interest.
Due to the guaranteed
nature of the loans,
it is the Corporation’s
policy to exclude these
balances from non-performing
assets (December 31,
2025 -
$27 million).
For the quarter ended
March 31, 2026, total
inflows of NPLs held-in-portfolio,
excluding consumer loans, increased by
$4.2 million,
compared to the
same period in
2025. Inflows of
NPLs held-in-portfolio at the
BPPR segment increased by
$6.4 million, compared
to the same period in 2025, mainly driven by higher mortgage inflows
by $7.2 million. Inflows of NPLs held-in-portfolio at the Popular
U.S. segment decreased by $2.3 million from the
same period in 2025, mainly driven by lower
commercial inflows by $2.1 million.
Tables 17 to 22 present the Corporation’s inflows to NPLs for the quarters ended March 31,
2026 and 2025.
138
Table 17 - Activity in Non
-Performing Loans Held-in-Portfolio (Excluding Consumer
Loans)
For the quarter ended March 31, 2026
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
376,658
$
35,576
$
412,234
Plus:
New non-performing loans
43,461
5,733
49,194
Advances on existing non-performing loans
-
181
181
Less:
Non-performing loans transferred to OREO
(3,111)
-
(3,111)
Non-performing loans charged-off
(12,201)
(24)
(12,225)
Loans returned to accrual status / loan collections
(48,798)
(7,293)
(56,091)
Ending balance -
NPLs
$
356,009
$
34,173
$
390,182
Table 18 - Activity in Non
-Performing Loans Held-in-Portfolio (Excluding Consumer
Loans)
For the quarter ended March 31, 2025
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
209,543
$
53,544
$
263,087
Plus:
New non-performing loans
37,023
8,158
45,181
Advances on existing non-performing loans
-
18
18
Less:
Non-performing loans transferred to OREO
(2,555)
-
(2,555)
Non-performing loans charged-off
(927)
(1,130)
(2,057)
Loans returned to accrual status / loan collections
(51,981)
(13,996)
(65,977)
Ending balance -
NPLs
$
191,103
$
46,594
$
237,697
Table 19 - Activity in Non
-Performing Commercial Loans Held-In-Portfolio
For the quarter ended March 31, 2026
(In thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
244,285
$
22,154
$
266,439
Plus:
New non-performing loans
5,004
3,205
8,209
Advances on existing non-performing loans
-
170
170
Less:
Non-performing loans transferred to OREO
(650)
-
(650)
Non-performing loans charged-off
(11,661)
(3)
(11,664)
Loans returned to accrual status / loan collections
(10,336)
(1,053)
(11,389)
Ending balance - NPLs
$
226,642
$
24,473
$
251,115
139
Table 20 - Activity in Non
-Performing Commercial Loans Held-In-Portfolio
For the quarter ended March 31, 2025
(In thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
51,101
$
23,654
$
74,755
Plus:
New non-performing loans
5,781
5,413
11,194
Advances on existing non-performing loans
-
17
17
Less:
Non-performing loans transferred to OREO
(120)
-
(120)
Non-performing loans charged-off
(739)
(1,130)
(1,869)
Loans returned to accrual status / loan collections
(13,426)
(10,447)
(23,873)
Ending balance - NPLs
$
42,597
$
17,507
$
60,104
Table 21 - Activity in Non
-Performing Mortgage Loans Held-in-Portfolio
For the quarter ended March 31, 2026
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
132,373
$
13,422
$
145,795
Plus:
New non-performing loans
38,457
2,528
40,985
Advances on existing non-performing loans
-
11
11
Less:
Non-performing loans transferred to OREO
(2,461)
-
(2,461)
Non-performing loans charged-off
(540)
(21)
(561)
Loans returned to accrual status / loan collections
(38,462)
(6,240)
(44,702)
Ending balance - NPLs
$
129,367
$
9,700
$
139,067
Table 22 - Activity in Non
-Performing Mortgage Loans Held-in-Portfolio
For the quarter ended March 31, 2025
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
158,442
$
29,890
$
188,332
Plus:
New non-performing loans
31,242
2,745
33,987
Advances on existing non-performing loans
-
1
1
Less:
Non-performing loans transferred to OREO
(2,435)
-
(2,435)
Non-performing loans charged-off
(188)
-
(188)
Loans returned to accrual status / loan collections
(38,555)
(3,549)
(42,104)
Ending balance - NPLs
$
148,506
$
29,087
$
177,593
140
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 March 31, 2026 and December 31, 2025,
are presented below.
Table 23 - Loan Delinquencies
(Dollars in thousands)
March 31, 2026
December 31, 2025
Loans delinquent
30 days or more
Total loans
Total delinquencies
as a percentage
of total loans
Loans delinquent
30 days or more
Total loans
Total delinquencies
as a percentage
of total loans
Commercial
Commercial multi-family
$
27,339
$
2,427,295
1.13
%
$
24,982
$
2,455,790
1.02
%
Commercial real estate
non-owner occupied
48,779
5,543,451
0.88
47,068
5,543,284
0.85
Commercial real estate
owner occupied
39,782
3,212,356
1.24
28,008
3,153,080
0.89
Commercial and industrial
220,994
8,565,559
2.58
215,068
8,607,412
2.50
Total Commercial
336,894
19,748,661
1.71
315,126
19,759,566
1.59
Construction
20,538
1,674,193
1.23
17,283
1,674,899
1.03
Mortgage
Mortgage insured
[1]
395,379
3,281,279
12.05
429,796
3,166,679
13.57
Mortgage uninsured
287,933
5,431,082
5.30
329,504
5,482,761
6.01
Total Mortgage
683,312
8,712,361
7.84
759,300
8,649,440
8.78
Leasing
34,091
1,986,165
1.72
37,567
2,001,365
1.88
Consumer
Credit cards
46,467
1,214,199
3.83
51,846
1,256,717
4.13
Home equity lines of credit
3,798
79,764
4.76
4,160
78,692
5.29
Personal
48,279
1,913,281
2.52
53,632
1,906,228
2.81
Auto
129,540
3,783,904
3.42
186,798
3,819,812
4.89
Other
5,374
177,174
3.03
5,929
180,799
3.28
Total Consumer
233,458
7,168,322
3.26
302,365
7,242,248
4.18
Loans held-for-sale
-
5,603
-
-
9,998
-
Total
$
1,308,293
$
39,295,305
3.33
%
$
1,431,641
$
39,337,516
3.64
%
[1]
Loans that carry certain guarantees from FHA or the
VA. Refer to Note 7 to
the Consolidated Financial Statements for additional
information of
guaranteed loans.
Allowance for Credit Losses Loans Held-in-Portfolio
The ACL
represents management’s
estimate of
expected credit
losses through
the remaining
contractual life
of the
different loan
segments, impacted by expected prepayments. The ACL
is maintained at a sufficient
level to provide for estimated credit
losses on
collateral dependent loans as well as loans modified
for borrowers with financial difficulties separately from the remainder
of the loan
portfolio. The Corporation’s
management evaluates the adequacy
of the ACL
on a quarterly
basis. In this
evaluation, management
considers current
conditions, macroeconomic
economic expectations through
a reasonable
and supportable
period, historical
loss
experience,
portfolio composition
by
loan
type
and
risk
characteristics,
results
of
periodic credit
reviews
of
individual loans,
and
regulatory requirements, amongst other factors.
The Corporation must rely on
estimates and exercise judgment regarding matters where
the ultimate outcome is unknown, such
as
economic developments affecting specific
customers, industries, or markets.
Other factors that can
affect management’s estimates
are
recalibration
of
statistical
models
used
to
calculate
lifetime
expected
losses,
changes
in
underwriting
standards,
financial
accounting standards and loan impairment measurements,
among others. Changes in the financial condition
of individual borrowers,
in economic
conditions, and
in the
condition of
the various
markets in
which collateral
may be
sold, may
also affect
the required
141
level of
the allowance
for credit
losses. Consequently,
the business
financial condition,
liquidity,
capital, and
results of
operations
could also be affected.
At March 31, 2026, the
ACL increased by $15.6 million from December 31,
2025 to $823.7 million. The increase in
ACL was driven
by
a combination
of changes
in
the economic
scenario,
loan volumes
and increases
in
qualitative reserves.
The
ACL for
BPPR
increased by $14.3 million
when compared to December 31,
2025 due to a
$22.3 million increase in reserves for
commercial loans
driven
by
higher
specific
reserves
for
a
single-borrower
exposure
in
non-accrual,
a
$11.1
million
net
charge
off
related
to
a
commercial real
estate facility
classified as
NPL in
the third
quarter of
2025, and
other loan
modifications. The
ACL for
mortgage
loans increased by $3.1 million, mostly
due to changes in the
macroeconomic scenarios. These increases were partially offset
by a
$12.4 million decrease
in the ACL
for consumer loans,
mainly in the
auto portfolio, reflecting
improvements in credit
quality. In
the
PB segment, the ACL remained stable, increasing by
$1.4 million from the previous quarter.
The
Corporation’s
ratio
of
the
allowance
for
credit
losses
to
loans held-in-portfolio
was
2.10%
on
March
31,
2026
compared
to
2.05% on December 31, 2025.
The ratio of the allowance for
credit losses to NPLs held-in-portfolio stood at
179.81%, compared to
162.15% on December 31, 2025.
Refer to Note 8 – Allowance for credit losses – loans
held-in-portfolio to the Consolidated Financial
Statements, and to the Provision
for Credit Losses section of this MD&A for additional
information.
Tables
24 and
25 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.
142
Table 24 - Allowance for Credit
Losses - Loan Portfolios
March 31, 2026
(Dollars in thousands)
Total ACL
Total loans held-
in-portfolio
ACL to loans held-
in-portfolio
Total non-
performing loans
held-in-portfolio
ACL to non-
performing loans
held-in-portfolio
Commercial
Commercial multi-family
$
20,069
$
2,427,295
0.83
%
$
10,962
183.08
%
Commercial real estate non-owner occupied
64,146
5,543,451
1.16
%
33,444
191.80
%
Commercial real estate owner occupied
51,116
3,212,356
1.59
%
14,192
360.17
%
Commercial and industrial
197,476
8,565,559
2.31
%
192,517
102.58
%
Total Commercial
$
332,807
$
19,748,661
1.69
%
$
251,115
132.53
%
Construction
15,160
1,674,193
0.91
%
-
-
Mortgage
83,624
8,712,361
0.96
%
139,067
60.13
%
Leasing
18,588
1,986,165
0.94
%
8,892
209.04
%
Consumer
Credit cards
89,376
1,214,199
7.36
%
-
-
Home equity lines of credit
1,178
79,764
1.48
%
2,766
42.59
%
Personal
104,739
1,913,281
5.47
%
16,660
628.69
%
Auto
170,544
3,783,904
4.51
%
35,390
481.90
%
Other
7,713
177,174
4.35
%
4,227
182.47
%
Total Consumer
$
373,550
$
7,168,322
5.21
%
$
59,043
632.67
%
Total
$
823,729
$
39,289,702
2.10
%
$
458,117
179.81
%
Table 25 - Allowance for Credit
Losses - Loan Portfolios
December 31, 2025
(Dollars in thousands)
Total ACL
Total loans held-
in-portfolio
ACL to loans held-
in-portfolio
Total non-
performing loans
held-in-portfolio
ACL to non-
performing loans
held-in-portfolio
Commercial
Commercial multi-family
$
19,345
$
2,455,790
0.79
%
$
8,748
221.14
%
Commercial real estate non-owner occupied
58,717
5,543,284
1.06
%
42,712
137.47
%
Commercial real estate owner occupied
48,451
3,153,080
1.54
%
24,567
197.22
%
Commercial and industrial
180,934
8,607,412
2.10
%
190,412
95.02
%
Total Commercial
$
307,447
$
19,759,566
1.56
%
$
266,439
115.39
%
Construction
13,826
1,674,899
0.83
%
-
-
Mortgage
80,554
8,649,440
0.93
%
145,795
55.25
%
Leasing
18,620
2,001,365
0.93
%
9,179
202.85
%
Consumer
Credit cards
91,124
1,256,717
7.25
%
-
-
Home equity lines of credit
1,335
78,692
1.70
%
2,796
47.75
%
Personal
106,612
1,906,228
5.59
%
20,096
530.51
%
Auto
180,364
3,819,812
4.72
%
52,200
345.52
%
Other
8,174
180,799
4.52
%
1,838
444.72
%
Total Consumer
$
387,609
$
7,242,248
5.35
%
$
76,930
503.85
%
Total
$
808,056
$
39,327,518
2.05
%
$
498,343
162.15
%
143
Annualized net charge-offs (recoveries)
The
following
table
presents
annualized
net
charge-offs
(recoveries)
(“NCOs“)
to
average
loans
held-in-portfolio
(“HIP”)
by
loan
category for the quarters ended March 31, 2026
and 2025.
Table 26
- Annualized Net Charge-offs (Recoveries) to
Average Loans Held-in-Portfolio
Quarter ended March 31, 2026
Quarter ended March 31, 2025
BPPR
Popular U.S.
Popular, Inc.
BPPR
Popular U.S.
Popular, Inc.
Commercial
0.42
%
(0.01)
%
0.23
%
(0.10)
%
0.02
%
(0.05)
%
Construction
(0.01)
―
―
―
―
―
Mortgage
(0.13)
(0.01)
(0.11)
(0.15)
(0.06)
(0.13)
Leasing
0.52
―
0.52
0.68
―
0.68
Consumer
2.68
3.09
2.69
2.82
3.90
2.85
Total annualized
net charge-offs to
average loans held-in-portfolio
0.85
%
0.04
%
0.61
%
0.72
%
0.07
%
0.53
%
NCOs for
the quarter
ended March
31, 2026
amounted to
$60.0 million,
increasing by
$10.9 million
when compared
to the
same
period in 2025.
The BPPR segment increased
by $11.9
million mainly driven by
higher commercial NCOs by
$14.0 million, mostly
due to the above referenced $11.1 million NCO.
The PB segment NCOs decreased by $1.0 million.
Loan Modifications
For the
quarter ended
March
31, 2026,
modified loans
to
borrowers with
financial difficulty
amounted to
$248.4 million,
of
which
$240.0
million
were
in
accruing
status.
The
BPPR
segment’s
modifications
to
borrowers
with
financial
difficulty
amounted
to
approximately $248.4 million, mainly
comprised of commercial
and mortgage loans of
$233.7 million and $8.6
million, respectively.
A total of $3.5 million of the mortgage modifications
were related to government guaranteed loans.
Refer
to
Note
8
to
the
Consolidated
Financial
Statements
for
additional
information
on
modifications
made
to
borrowers
experiencing financial difficulties.
ADOPTION OF NEW ACCOUNTING STANDARDS AND ISSUED BUT NOT
YET EFFECTIVE ACCOUNTING STANDARDS
Refer to Note 3, “New Accounting Pronouncements”
to the Consolidated Financial Statements.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
Quantitative and qualitative disclosures for the current
period can be found in the Market Risk
section of this report, which includes
changes in market risk exposures from disclosures presented
in the 2025 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
144
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
The
Company
continues
to
implement
new
business
systems
and
solutions,
including
an
enterprise
resource
planning
(“ERP”)
system, which are expected to improve the efficiency of
certain financial and related business processes.
On January
1, 2026,
the Corporation
implemented a
new ERP
system, replacing
our previous
ERP system
that had
supported a
significant portion
of our
transactional records
and general
ledger. As
a result
of this
implementation, we modified
certain existing
controls
and
implemented
new
controls
and
procedures to
maintain
appropriate
internal
control
over
financial
reporting
and
will
continue to evaluate the design and operating effectiveness
of these controls.
Except as described above, 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 March
31, 2026
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 18
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 2025 Form
10-K. These factors could materially adversely affect our business, financial condition, liquidity,
results of
operations and
capital position,
and could
cause our
actual results
to
differ
materially from
our historical
results or
the
results contemplated
by the
forward-looking statements
contained in
this report.
Also refer
to the
discussion in
“Part I
- Item
2 –
Management’s Discussion
and Analysis
of Financial
Condition and
Results of
Operations” in
this report
for additional
information
that may supplement or update the discussion
of risk factors below and in our 2025 Form 10-K.
There have been no material changes to the risk
factors previously disclosed under Item 1A of the
Corporation’s 2025 Form 10-K.
The risks described
in our 2025
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.
145
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 March
31, 2026.
Issuer Purchases of Equity Securities
The following table
sets forth the
details of
purchases of common
stock by
the Corporation and
its affiliated
purchasers during the
quarter ended March 31, 2026:
Issuer Purchases of Equity Securities
Not in thousands
Period
Total Number of
Shares Purchased [1]
Average Price Paid per
Share
Total Number of Shares
Purchased as Part of Publicly
Announced Plans or Programs [2]
Approximate Dollar Value of
Shares that May Yet be
Purchased Under the Plans or
Programs [2]
January 1 - January 31
306,003
$
127.73
301,380
$242,576,163
February 1 - February 28
345,242
143.58
344,075
$193,162,299
March 1 - March 31
540,114
132.49
509,943
$125,867,052
Total
1,191,359
$
134.48
1,155,398
$125,867,052
[1] Includes
4,623,
1,167, and
30,171
shares of
the Corporation’s
common stock
acquired
by the
Corporation
during
January,
February,
and March
2026, respectively, in
connection with the satisfaction of tax
withholding obligations on vested awards
of restricted stock or restricted stock
units granted
to
directors
and
certain
employees
under
the
Corporation’s
Omnibus
Incentive
Plan.
The
acquired
shares
of
common
stock
were
added
back
to
treasury stock.
[2] As part of
its capital plan,
in July 2025, the
Corporation announced plans
to repurchase up
to $500 million
in common stock,
in addition to
the $500
million in common
stock repurchase program
announced in July
2024. As of
March 31, 2026,
and since the
first authorization in
2024, the Corporation
had repurchased 8,071,942
shares of common
stock for $874
million at an
average price of
$108.27 per share,
as part of the
2024 and 2025
common
stock repurchase programs.
Item 3.
Defaults Upon Senior Securities
None.
Item 4.
Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans or Other Preplanned Trading Arrangements
Certain of
our officers
or directors have
made and
may from time
to time
make elections to
participate in, and
are
participating in
,
our dividend reinvestment and purchase plan, the
Company stock fund associated with our 401(k)
plans and/or the Company stock
fund associated with
our non-qualified deferred compensation
plans and have shares
withheld to cover
withholding taxes upon
the
vesting of
equity awards, which
may be
designed to satisfy
the affirmative defense
conditions of Rule
10b5-1 under the
Exchange
Act or may constitute non-Rule 10b5–1
trading arrangements
(as defined in Item 408(c) of Regulation
S-K).
146
Item 6.
Exhibits
Exhibit Index
Exhibit No
Exhibit Description
10.1
Form of Popular, Inc. 2026 Long-Term Equity Incentive Award and Agreement
(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, 2025)
31.1
Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
(1)
31.2
Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
(1)
32.1
Certification pursuant
to
18 U.S.C.
Section 1350,
as adopted
pursuant to
Section 906
of the
Sarbanes-
Oxley Act of 2002
(1)
32.2
Certification pursuant
to
18 U.S.C.
Section 1350,
as adopted
pursuant to
Section 906
of the
Sarbanes-
Oxley Act of 2002
(1)
101. INS
XBRL Instance Document – the instance document
does not appear in the Interactive Data File because
its XBRL tags are embedded within the Inline Document.
101.SCH
Inline 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 March 31, 2026,
formatted in Inline XBRL (included within the Exhibit
101 attachments)
(1)
(1)
Included herewith
* 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.
147
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: May 8, 2026
By: /s/ Jorge J. García
Jorge J. García
Executive Vice President &
Chief Financial Officer
Date: May 8, 2026
By: /s/ Denissa M. Rodríguez
Denissa M. Rodríguez
Senior Vice President & Corporate Comptroller