POPULAR, INC.
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 11, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Item 6. Exhibits
Signatures
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,
about
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
current
expectations
and,
by
their
nature,
involve
risks,
uncertainties,
and
assumptions. Potential
factors, some
of which
are beyond
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
and
new
standards
on
the
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
and
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, 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 stockholders;
the
impact
of
bank
failures
or
adverse
developments
at
other
banks
and
related
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
and
the
Federally-appointed
oversight
board
on
the
economy,
our
customers
and
our
business;
the
public sector
deposits held
at
the Corporation,
whose future
balances are
difficult
to
predict
and
may
be
by
factors
such
as
the
amount
of
Federal
funds
received
by
the
P.R.
and
the
rate
of
expenditure
of
such
funds,
as
well
as
the
condition,
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 or war or
pandemics, epidemics and other health-related
crises, or the fear of any
such event
occurring, any of
which could cause
adverse consequences for
our business, including,
but not
limited to,
disruptions in our operations;
our ability to
achieve the expected
benefits from our
transformation initiative, including
our ability to
achieve projected
earnings, efficiencies and
return on tangible
common equity and
accurately anticipate costs
and expenses associated
therewith;
the fiscal and monetary policies of the federal government
and its agencies;
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;
changes
in
and
uncertainty
federal
funding,
tax,
trade
and
tariff
policies,
and
rulemaking,
supervision,
examination and enforcement priorities of the federal
administration;
increases
to
or
Federal
Deposit
Insurance
(“FDIC”)
assessments,
such
as
the
special
assessment implemented
by the
FDIC to
recover the
losses to
the deposit
insurance fund
(“DIF”) resulting
receiverships of Silicon Valley Bank and Signature Bank;
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,
as
a
result
of
cyberattacks,
e-fraud,
denial-of-services
and
computer
intrusion,
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
- Legal Proceedings,”
is inherently
uncertain and depends on judicial interpretations of law and the findings of regulators, judges and/or juries. Investors should refer to
the Corporation’s Annual
Report on Form
10-K for the
year ended December 31,
2024 (the “2024
Form 10-K”), as
well as “Part
II,
Item 1A” of our Quarterly
Report on this Form 10-Q for
a discussion of such factors and
certain risks and uncertainties to which the
Corporation is subject.
All forward-looking
statements included
in this
Form 10-Q
are based
upon information
available to
Popular as
of the
date of
this
Form 10-Q, and other than as
required by law, including the
requirements of applicable securities laws, we assume no
obligation to
update or revise any such forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date
of such statements.
OF FINANCIAL CONDITION
[UNAUDITED]
(In thousands, except share information)
Assets:
$
400,631
$
419,638
Money market investments:
Time deposits with other banks
Total money market investments
Trading account debt securities, at fair value
29,643
32,831
Debt securities available-for-sale, at fair
value:
Pledged securities with creditors’ right to repledge
31,022
30,486
Other debt securities available-for-sale
20,459,190
18,215,417
Debt securities held-to-maturity, at amortized cost:
Pledged securities with creditors’ right to repledge
27,560
27,405
Other debt securities held-to-maturity
7,514,164
7,730,672
Debt securities held-to-maturity (fair
value 2025 - $
; 2024 - $
)
7,541,724
7,758,077
Less – Allowance for credit losses
5,999
5,317
Debt securities held-to-maturity, net
Equity securities (realizable value 2025 -
$
222,907
; 2024 - $
208,663
)
222,391
208,166
Loans held-for-sale, at fair value
2,898
5,423
38,611,834
37,522,995
Less – Unearned income
426,656
415,343
769,485
746,024
Total loans held-in-portfolio, net
37,415,693
36,361,628
Premises and equipment, net
649,191
601,787
Other real estate
46,126
57,268
Accrued income receivable
274,867
263,389
Mortgage servicing rights, at fair value
103,077
108,103
1,745,052
1,797,759
802,954
802,954
Other intangible assets
5,844
6,826
$
$
Liabilities and Stockholders’ Equity
Liabilities:
$
$
52,102,877
49,744,790
56,043
54,833
550,000
225,000
808,451
896,293
1,479,087
1,371,846
Total liabilities
70,111,072
67,432,317
Commitments and contingencies (Refer
to Note 20)
Stockholders’ equity:
Preferred stock,
30,000,000
shares authorized;
885,726
shares issued and outstanding (2024 -
885,726
)
22,143
22,143
Common stock, $
0.01
par value;
170,000,000
shares authorized;
104,889,180
shares issued (2024 -
104,849,460
) and
shares outstanding (2024 -
70,141,291
)
1,049
1,048
Surplus
4,908,693
Retained earnings
4,570,957
Treasury stock - at cost,
36,951,712
shares (2024 -
34,708,169
)
(2,228,535)
Accumulated other comprehensive loss, net
of tax
(1,661,240)
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
$
The accompanying notes are an integral part of
these Consolidated Financial Statements.
OF OPERATIONS
Interest income:
Loans
$
684,587
$
648,739
$
1,351,260
$
1,287,469
69,532
88,316
139,698
176,832
189,753
184,852
369,912
351,747
Total interest income
943,872
921,907
1,860,870
1,816,048
Interest expense:
295,058
339,939
592,921
669,435
Short-term borrowings
5,300
1,126
6,726
2,318
Long-term debt
11,965
12,530
24,077
25,239
Total interest expense
312,323
353,595
623,724
696,992
631,549
568,312
48,941
46,794
113,022
119,392
Net interest income after provision for credit losses
582,608
521,518
1,124,124
999,664
Non-interest income:
38,826
37,526
77,880
74,968
Other service fees
100,522
96,863
195,030
191,135
Mortgage banking activities (Refer to Note 9)
4,872
5,723
8,561
10,083
Net gain, including impairment on equity securities
1,862
1,448
1,422
Net gain on trading account debt securities
1,058
Adjustments to indemnity reserves on loans sold
(25)
Other operating income
21,737
25,386
36,268
51,903
Total non-interest income
168,477
166,306
320,538
330,124
Operating expenses:
229,355
197,424
442,068
412,801
Net occupancy expenses
29,140
27,692
56,358
55,733
Equipment expenses
5,789
9,662
11,091
19,229
Other taxes
18,632
15,333
37,357
29,708
28,108
37,744
54,933
66,662
Technology and software expenses
84,696
79,752
168,364
159,214
37,861
39,096
75,642
73,290
Communications
5,010
4,357
9,914
8,914
Business promotion
26,385
25,449
50,060
46,438
Deposit insurance
9,407
10,581
19,442
34,468
Other real estate owned (OREO) income
(4,124)
(5,750)
(7,454)
(11,071)
22,117
27,502
45,016
55,774
1,529
Total operating expenses
492,761
469,576
963,773
952,689
258,324
218,248
480,889
377,099
47,884
40,459
92,947
96,027
Net Income
$
210,440
$
177,789
$
387,942
$
281,072
Net Income Applicable to Common Stock
$
210,087
$
177,436
$
387,236
$
280,366
Net Income per Common Share – Basic
$
3.09
$
2.47
$
5.64
$
3.90
Net Income per Common Share – Diluted
$
3.09
$
2.46
$
5.64
$
3.90
The accompanying notes are an integral part of
these Consolidated Financial Statements.
OF COMPREHENSIVE INCOME
Quarters ended,
Six months ended,
$
210,440
$
177,789
$
387,942
$
281,072
Other comprehensive income (loss) before
tax:
Foreign currency translation adjustment
7,499
(3,855)
Amortization of net losses of pension and
2,272
3,618
4,545
7,236
Unrealized holding gains (losses) on debt securities
arising during the period
58,972
22,422
224,957
(50,608)
Amortization of unrealized losses of debt
securities transfer from available-for-
46,242
44,421
91,552
88,430
Other comprehensive income before tax
114,985
70,626
321,908
41,203
(20,655)
(15,722)
(56,325)
(23,954)
Total other comprehensive income, net of tax
94,330
54,904
265,583
17,249
Comprehensive income, net of tax
$
304,770
$
232,693
$
653,525
$
298,321
Tax effect allocated to each component of other comprehensive
income:
Six months ended,
Amortization of net losses of pension and
$(
)
$(
1,357
)
$(
1,704
)
$(
2,714
)
Unrealized holding losses on debt securities
arising during the period
(10,555)
(5,481)
(36,311)
(3,555)
Amortization of unrealized losses of debt
securities transfer from available-for-
(9,248)
(8,884)
(18,310)
(17,685)
$
(20,655)
$
(15,722)
$
(56,325)
$
(23,954)
The accompanying notes are an integral
part of the Consolidated Financial Statements.
OF CHANGES IN STOCKHOLDERS’ EQUITY
other
Common
Preferred
Retained
Treasury
comprehensive
stock
stock
Surplus
earnings
stock
loss
Total
Balance at March 31, 2024
$
1,048
$
22,143
$
4,847,466
$
4,253,030
$
(2,013,187)
$
(1,933,186)
$
5,177,314
177,789
177,789
1,768
1,768
[1]
(44,944)
(44,944)
(353)
(353)
(3,200)
(3,200)
3,513
5,887
9,400
54,904
54,904
$
1,048
$
22,143
$
4,852,747
$
4,385,522
$
(2,010,500)
$
$
5,372,678
Balance at March 31, 2025
$
1,049
$
22,143
$
4,912,886
$
4,699,697
$
(2,346,093)
$
(1,489,987)
$
5,799,695
210,440
210,440
1,760
1,760
[1]
(47,826)
(47,826)
(353)
(353)
[2]
(117,075)
(117,075)
5,304
7,743
13,047
94,330
94,330
$
1,049
$
22,143
$
$
$
$
$
[1]
Dividends declared per common share during the quarter
ended June 30, 2025 - $
0.7
0 (2024 - $
0.62
).
[2]
Includes common stock repurchases
of $
.0 million as part of
a repurchase authorization up
to $
million announced by the
Corporation on
July 24, 2024 (the "2024 Repurchase Program"). Refer to Note
17 for additional information.
OF CHANGES IN STOCKHOLDERS’ EQUITY
other
Common
Preferred
Retained
Treasury
comprehensive
stock
stock
Surplus
earnings
stock
loss
Total
Balance at December 31, 2023
$
1,048
$
22,143
$
4,843,399
$
4,194,851
$
(2,018,957)
$
(1,895,531)
$
5,146,953
281,072
281,072
3,567
3,567
[1]
(89,695)
(89,695)
(706)
(706)
(6,776)
(6,776)
5,781
15,233
21,014
17,249
17,249
$
1,048
$
22,143
$
4,852,747
$
4,385,522
$
(2,010,500)
$
$
5,372,678
Balance at December 31, 2024
$
1,048
$
22,143
$
4,908,693
$
4,570,957
$
(2,228,535)
$
(1,661,240)
$
387,942
387,942
3,529
3,530
[1]
(96,235)
(96,235)
(706)
(706)
[2]
(243,055)
(243,055)
7,728
16,165
23,893
265,583
265,583
$
1,049
$
22,143
$
$
$
$
$
[1]
Dividends declared per common share during the six months
ended June 30, 2025 - $
1.40
(2024 - $
1.24
).
[2]
Includes common stock repurchases of $
234.3
million as part of the 2024 Repurchase Program. Refer
to Note 17 for additional information.
Disclosure of changes in number of shares:
Preferred Stock:
Balance at beginning and end of period
885,726
885,726
Common Stock – Issued:
104,849,460
104,767,348
39,720
44,623
Balance at end of period
104,889,180
104,811,971
Treasury stock
(36,951,712)
(32,446,045)
Common Stock – Outstanding
72,365,926
The accompanying notes are an integral part of these Consolidated
OF CASH FLOWS
Cash flows from operating activities:
$
387,942
$
281,072
Adjustments to reconcile net income to net cash provided
by operating activities:
113,022
119,392
1,529
Depreciation and amortization of premises and equipment
25,319
31,249
Net accretion of discounts and amortization of premiums and
deferred fees
(136,208)
(127,770)
Interest capitalized on loans subject to the temporary payment
moratorium or loss mitigation alternatives
(2,822)
(4,047)
Share-based compensation
21,930
16,391
Fair value adjustments on mortgage servicing rights
5,523
5,384
Adjustments to indemnity reserves on loans sold
(293)
Earnings from investments under the equity method, net
of dividends or distributions
(2,871)
Deferred income tax expense
20,832
19,702
Gain on:
Disposition of premises and equipment and other productive
assets
(91)
(6,295)
Sale of loans, including valuation adjustments on loans
held-for-sale and mortgage banking activities
(156)
(76)
Sale of equity method investment
(1,226)
Sale of foreclosed assets, including write-downs
(5,076)
(10,575)
Acquisitions of loans held-for-sale
(2,332)
(1,767)
Proceeds from sale of loans held-for-sale
15,584
19,358
Net originations on loans held-for-sale
(12,137)
(22,580)
Net decrease (increase) in:
Trading debt securities
10,040
6,735
(1,411)
(4,445)
Accrued income receivable
(11,419)
(17,340)
(19,371)
(8,463)
Net increase (decrease) in:
Interest payable
2,584
3,145
Pension and other postretirement benefits obligation
2,191
3,732
1,434
(59,481)
Total adjustments
27,051
(39,068)
Net cash provided by operating activities
414,993
242,004
Cash flows from investing activities:
Net decrease in money market investments
40,765
147,650
Purchases of investment securities:
Available-for-sale
(18,905,199)
(17,231,900)
Equity
(25,811)
(1,667)
Proceeds from calls, paydowns, maturities and redemptions
of investment securities:
Available-for-sale
17,145,332
15,375,714
Held-to-maturity
303,212
304,653
Proceeds from sale of investment securities:
Equity
14,497
4,046
Net disbursements
on loans
(912,037)
(287,684)
Proceeds from sale of loans
40,983
17,640
Acquisition of loan portfolios
(319,297)
(384,479)
Return of capital from equity method investments
Net proceeds from sale of equity method investment
1,226
Acquisition of premises and equipment and other productive
assets
(96,200)
(95,412)
Proceeds from sale of:
Premises and equipment and other productive assets
4,409
Foreclosed assets
47,590
58,979
Net cash used in investing activities
(2,664,595)
(2,087,772)
Cash flows from financing activities:
Net increase in:
2,334,656
1,912,286
1,210
14,300
325,000
Payments of notes payable
(88,522)
(46,000)
Principal payments of finance leases
(1,829)
(1,774)
Proceeds from issuances of common stock
3,530
3,567
Dividends paid
(98,661)
(90,151)
Net payments for repurchase of common stock
(236,203)
(452)
Payments related to tax withholding for share-based compensation
(7,983)
(6,324)
Net cash provided by financing activities
2,231,198
1,785,452
Net decrease in cash and due from banks, and restricted
cash
(18,404)
(60,316)
Cash and due from banks, and restricted cash at beginning
of period
429,406
427,575
Cash and due from banks, and restricted cash at the end of
the period
$
411,002
$
367,259
The accompanying notes are an integral part of these Consolidated
Notes to Consolidated Financial
(Unaudited)
Note 1 -
Nature of operations
Note 2 -
Basis of presentation
Note 3 -
New accounting pronouncements
Note 4 -
Restrictions on cash and due from banks and
certain securities
Note 5 -
Note 6 -
Debt securities held-to-maturity
Note 7 -
Loans
Note 8 -
Allowance for credit losses – loans held-in-
Note 9 -
Note 10 -
Transfers of financial assets and mortgage
servicing assets
Note 11 -
Note 12 -
Note 13 -
Goodwill and other intangible assets
Note 14 -
Note 15 -
Note 16 -
Note 17 -
Note 18 -
Other comprehensive income
Note 19 -
Guarantees
Note 20 -
Commitments and contingencies
Note 21-
Non-consolidated variable interest entities
Note 22 -
Related party transactions
Note 23 -
Fair value measurement
Note 24 -
Fair value of financial instruments
Note 25 -
Net income per common share
Note 26 -
Revenue from contracts with customers
Note 27 -
Leases
Note 28 -
Pension and postretirement benefits
Note 29 -
Stock-based compensation
Note 30 -
Income taxes
Note 31 -
Supplemental disclosure on the consolidated
statements of cash flows
Note 32 -
Segment reporting
Note 1 – Nature of Operations
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
has
in
Puerto
Rico,
the
mainland United
States (“U.S.”)
and U.S.
and British
Virgin Islands.
In Puerto
Corporation provides retail,
mortgage and
commercial banking services and auto and equipment leasing and financing through its principal banking subsidiary, Banco Popular
de Puerto
Rico (“BPPR”),
as well
as broker-dealer
and insurance
services through
specialized subsidiaries. In
mainland,
the
Corporation provides
retail, mortgage,
commercial banking
services, as
well as
equipment leasing
and
financing, through
its
New
York-chartered
banking
subsidiary,
Popular
Bank
(“PB”
or
“Popular U.S.”),
which
has
branches
located
in
New
York,
New
Jersey, and Florida.
Note 2 – Basis of Presentation
Basis of Presentation
The (unaudited) interim Consolidated Financial Statements are, in the opinion of management, a fair statement of the results
for the
periods reported.
The consolidated statement
of financial condition
presented as
of December 31,
2024 was
derived from
audited
Consolidated Financial Statements of the Corporation
for the year ended December 31, 2024.
Certain
and
notes
to
the
which
would
normally
be
in
prepared in
accordance with
Accounting Principles
Generally Accepted
in the
of America
(U.S. GAAP),
condensed or omitted from the unaudited financial statements pursuant
to the rules and regulations of the
Securities and Exchange
Commission.
Accordingly,
these
should
be
read
in
conjunction
with
the
audited
for the
year ended
2024,
the 2024
Form 10-K.
Operating results
for the
interim periods disclosed herein are not necessarily
indicative of the results that may be expected
for a full year or any future period.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial
statements in conformity with
accounting principles generally accepted in
the United States
of America
requires management to make
estimates and assumptions that
affect the reported
amounts of assets and
liabilities and contingent
assets
and
liabilities
at
the
date
of
the
statements,
and
the
reported
amounts
of
revenues
and
during
the
reporting period. Actual results could differ from those estimates.
Note 3 - New accounting pronouncements
Recently Adopted Accounting Standards Updates
FASB ASU 2025-02,
Liabilities (Topic 405) -
Amendments to SEC
Paragraphs Pursuant to
SEC Staff Accounting
Bulletin No. 122
The
Financial Accounting
Standards Board
("FASB")
issued
Accounting
Update
("ASU")
2025-02
in
March
2025,
which
amends
the
in
Accounting
Standards
("ASC")
450-10-
S99-1
by
removing
the
interpretative
of
Section
FF
of
Topic
in
the
Staff Accounting Bulletin Series ("SAB") text
that
addressed
the
for
obligations to
safeguard crypto-assets
held
by platform
users to
align the
ASC with
the
latest
SAB
directive,
ensuring
consistency and clarity.
March 18, 2025
The
was
not
by
the
adoption of
this
ASU
since
it does
not hold crypto-assets.
FASB ASU 2024-02,
Improvements—
Amendments to Remove
References to the
Concepts Statements
The
FASB
issued
ASU
2024-02
in
March
2024, which
removes various
references to
concept statements from the ASC. The ASU
intends
to
simplify
the
and
distinguish
between
nonauthoritative
and
authoritative guidance.
The
was
not
by
the adoption of this ASU since it did not
provide for
accounting changes
or new
or
requirements.
The
ASU
eliminated
references
within
the
ASC
to
the
concept
statements,
which
is
considered non-authoritative guidance.
FASB ASU 2024-01,
Compensation - Stock
Compensation (Topic 718)
- Scope Application of
Profits Interest and Similar
Awards
The
FASB
issued
ASU
2024-01
in
March
2024,
which
amends
ASC
Topic
by
an
illustrative
example
to
demonstrate how
an entity
would apply
the
scope
in
paragraph
718-10-15-3
to determine whether profits interest awards
should be accounted
for in accordance
with
ASC
Topic
The
ASU
is
intended
to
reduce complexity and diversity in practice.
The
was
not
by
the
of
this
ASU
since
the
share
awards
of
the
continue
to
meet
the
requirements of ASC 718-10-15-3.
FASB ASU 2023-08,
Intangibles - Goodwill and
Other - Crypto Assets
(Subtopic 350-60) -
Accounting for and
Disclosure of Crypto
Assets
The
FASB
issued
ASU
2023-08
in
2023,
which
amends
ASC
Subtopic
350-60
by
that
crypto
assets
are
measured
at
fair
value
in
the
statement
of
each
period
with
changes
from
remeasurement
being
in
net
income.
The
ASU
also
requires
enhanced
for
both
annual
and
interim
periods
to
provide
investors
with
relevant information
to
analyze and
assess
the
and
risk
of
individual crypto asset holdings.
The
was
not
by
the
adoption of
this
ASU
since
it does
not hold crypto-assets.
Recently Adopted Accounting Standards Updates
FASB ASU 2023-05,
Business Combinations -
Joint Venture Formations
(Subtopic 805-60) -
Recognition and initial
measurement
The
FASB
issued
ASU
2023-05
in
August
2023, which
amends ASC
Subtopic 805-60
to include specific
guidance about how
joint
ventures
should
recognize
and
initially
measure
assets
contributed
and
liabilities
assumed.
The
amendments
require
that
a
joint venture, upon formation, recognize and
initially
measure its
liabilities at
fair value.
The
was
not
by
the
of
this
ASU
but
it
will
this
for
the
initial
measurement of assets and liabilities of
newly
created
joint
ventures
prospectively.
Accounting Standards Updates Not Yet Adopted
FASB ASU 2025-05,
Financial Instruments -
Credit Losses (Topic 326)
- Measurement of Credit
Losses for Accounts
Receivables and Contract
Assets
The
FASB
issued
ASU
2025-05
in
July
2025,
which
permits
to
elect
a
practical
expedient
when
for
current
accounts
receivable
and
current
contract
assets
arising
from
accounted
for
under
Topic
606,
Revenue
from
Contracts
with
Customers.
This
practical
expedient
establishes
that,
in
developing
reasonable
and
supportable
forecasts
as
part
of
credit
losses,
assume
that
current
conditions as
of the
balance sheet
date do
not
change
for
the
remaining
life
of
the
asset.
January 1, 2026
any
impact
that
the
of
this
will
have
on
its
and
and
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
the
for
awards
granted
as
payable
to
a
customer.
The
ASU expands
the definition
of performance
for
under ASC 718 and eliminates the forfeiture
policy election for
service conditions. It
also
confirms
that
the
constraint
in
ASC
does
not
apply
to
such awards.
expect to
be
by
the
of
this
ASU
since
it
does
not
grant
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
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
to
determine
which
entity
is
the
acquirer.
This
replaces
the
requirement
that
the
primary
beneficiary
always is the acquirer.
any
impact
that
the
of
this
will
have
on
its
and
and
FASB ASU 2024-04,
Debt—Debt with
Conversion and Other
Options (Subtopic 470-
- Induced Conversions
of Convertible Debt
Instruments
The
FASB
issued
ASU
2024-04
in
November
2024,
which
the
for
determining
whether
certain
settlements
of
convertible
debt
instruments should
be accounted
for as
an
induced
conversion.
Also
it
makes
clarifications
to
assist
stakeholders in
applying the
guidance. The
ASU
that
the
incorporation,
elimination,
or
modification
of
a
volume-
average
price
("VWAP")
formula
does
not
automatically
cause
a
to
be
accounted
for
as
an
extinguishment
and
that
the
induced
conversion
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
any
impact
that
the
of
this
will
have
on
its
and
and
Accounting Standards Updates Not Yet Adopted
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
to
disclose
about
specific
expense
in
the
notes to
financial statements
at interim
and
annual
periods
to
improve
financial transparency.
For fiscal years
beginning on
For interim periods
within fiscal years
beginning after
January 1, 2028
any
impact
that
the
of
this
will
have
on
its
and
and
FASB ASU 2023-09,
Income Tax (Topic
Improvements to Income
Tax Disclosures
The
FASB
issued
ASU
2023-09
in
December 2023,
which amends
ASC Topic
by
enhancing
rate
reconciliation
and
the
disclosure of
income taxes paid, income (or
loss)
before
income
tax
expense
and
income
tax
expense
disaggregated
by
national, state and foreign level. Disclosures
that
no
longer
were
considered
cost
beneficial
or
relevant
were
removed
from
ASC Topic 740.
For fiscal years
beginning on
The
will
prospectively
adopt
ASU
2023-09
for
it's
in
the
Form
10-K.
The
of
this standard
will result
in the
inclusion
of
certain
new
in
the
effective
income
tax
rate
and
income
tax expense tabular disclosures, as well
as the
disclosure of income
taxes paid,
within the income taxes note.
FASB ASU 2023-06,
Disclosure Improvements -
Codification Amendments
in Response to the SEC’s
Disclosure Update and
Simplification Initiative
The FASB
issued ASU
2023-06 in
October
which
modifies
the
or
of
various
subtopics
in
the
with
the
purpose
of
aligning
U.S.
GAAP
with
those
of
the
SEC
under
Regulation S-X and S-K.
The date on which
the SEC removes
related disclosure
requirements from
Regulation S-X or
Regulation S-K. If by
June 30, 2027, the
SEC has not
removed the
requirements from
Regulation S-X or
Regulation S-K, the
pending content of
the related
amendment will be
removed from the
Codification and will
not become
effective for any
entity.
expect to
be
by
the
of
this
ASU
since
it
is
subject
to
SEC's
current
and
requirements under Regulation S-X and
S-K.
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 $
2.7
billion at June 30, 2025 (December 31, 2024 -
$
2.6
billion). Cash and
due from banks,
as well
as other highly
liquid securities, are
used to cover
these required average
reserve
balances.
At June
held $
restricted assets
in the
form of
funds deposited
in money
market accounts,
debt
for
sale
and
equity
31,
$
The
assets
held
in
debt
securities available for sale and equity securities consist primarily of assets
held for the Corporation’s non-qualified retirement plans
and fund deposits guaranteeing possible liens or encumbrances
over the title of insured properties.
Note 5 – Debt securities available-for-sale
The
tables
present
the
amortized
cost,
gross
gains
and
losses,
fair
value,
average
yield
and
contractual maturities of debt securities available-for-sale
at June 30, 2025 and December 31,
Gross
Gross
Fair
average
cost
gains
losses
value
yield
$
11,617,164
$
$
23,332
$
11,593,913
3.66
%
3,823,444
20,739
25,300
3,818,883
3.80
15,440,608
20,820
48,632
15,412,796
3.69
7,520
7,321
1.52
13,024
12,398
2.52
97,807
7,193
90,713
2.90
mortgage obligations - federal agencies
118,351
8,018
110,432
2.77
15,394
15,246
2.54
83,070
2,438
80,639
2.28
696,835
31,836
665,289
2.38
5,174,509
970,159
4,205,060
1.67
securities - federal agencies
5,969,808
1,008
1,004,582
4,966,234
1.77
Other
4.38
4.84
Total other
4.53
[1]
$
21,529,517
$
21,927
$
1,061,232
$
3.15
%
[1]
15.5
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 $
14.3
billion serve as collateral for
public funds.
The Corporation had unpledged Available
for Sale securities with a fair value of $
.0 billion that could be used to increase its
borrowing facilities.
Gross
Gross
Fair
average
cost
gains
losses
value
yield
$
10,555,397
$
1,282
$
46,275
$
10,510,404
3.33
%
2,547,936
63,381
2,484,706
3.07
13,103,333
1,433
109,656
12,995,110
3.28
10,538
10,193
1.53
15,334
14,430
2.24
104,168
8,639
95,661
2.76
mortgage obligations - federal agencies
130,040
9,888
120,284
2.60
1.65
79,542
2,700
76,850
2.35
733,506
45,078
688,510
2.37
5,468,448
1,106,657
4,362,128
1.67
securities - federal agencies
6,282,272
1,154,440
5,128,259
1.75
Other
5.00
1,750
1,750
5.50
Total other
2,250
2,250
5.39
[1]
$
19,517,895
$
1,992
$
1,273,984
$
2.78
%
[1]
13.9
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 $
12.9
billion serve as collateral for
public funds. The Corporation had unpledged Available
for Sale securities with a fair value of
$
4.3
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
give
effect to
changes in fair value.
Securities
not
due
on
a
single
date,
such
as
and
obligations,
are
based
on
the
period
of
final
maturity.
The
of
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.
2025, the Corporation did not
intend to sell or
believed it was more
likely than not that
it would be required
to sell debt
securities classified
as available-for-sale. There
were
no
available-for-sale sold during
the six
months
ended June 30, 2025 and 2024.
The
tables
present
the
fair
value
and
gross
losses
of
debt
available-for-sale,
aggregated by investment category and length of
time that individual securities have been in a continuous
unrealized loss position at
Less than 12 months
12 months or more
Total
Gross
Gross
Gross
Fair
Fair
Fair
value
losses
value
losses
value
losses
$
8,477,646
$
11,934
$
2,097,347
$
36,698
$
10,574,993
$
48,632
6,592
92,871
7,997
99,463
8,018
Mortgage-backed securities -federal agencies
50,680
2,594
4,863,122
1,001,988
4,913,802
1,004,582
available-for-sale in an unrealized loss position
$
8,534,918
$
14,549
$
7,053,340
$
1,046,683
$
15,588,258
$
1,061,232
Less than 12 months
12 months or more
Total
Gross
Gross
Gross
Fair
Fair
Fair
value
losses
value
losses
value
losses
$
2,309,894
$
24,646
$
3,638,092
$
85,010
$
5,947,986
$
109,656
4,878
102,160
9,861
107,038
9,888
70,777
3,175
5,031,414
1,151,265
5,102,191
1,154,440
available-for-sale in an unrealized loss position
$
2,385,549
$
27,848
$
8,771,666
$
1,246,136
$
11,157,215
$
1,273,984
As of June 30,
2025, the portfolio of
available-for-sale debt securities reflects gross unrealized losses
of $
1.1
billion (December 31,
2024 -
$
1.3
billion), driven mainly
by mortgage-backed securities,
which have
been impacted by
the-interest rate environment
and
the
portfolio’s
longer
duration.
The
of
debt
is
comprised
mainly
of
U.S
Treasuries
and
from
the
U.S.
its
or
entities,
Federal
National
Association
(“FNMA”),
Federal
Home
Loan
(“FHLMC”)
and
National
Association
(“GNMA”).
These
carry
an
explicit
or
implicit
from
the
U.S.
are
highly
rated
by
major
rating
agencies, and have a long history of no credit
losses. Accordingly, the Corporation applies a zero-credit loss assumption.
Note 6 –Debt securities held-to-maturity
tables present
the amortized
cost, allowance
for credit
losses, gross
unrealized gains
and losses,
approximate fair
value,
weighted average
yield
and contractual
maturities of
held-to-maturity at
and
Value
Gross
Gross
Book
[1]
for Credit
Net of
Fair
average
cost
Value
Losses
gains
losses
value
yield
$
1,504,543
$
1,481,291
$
$
1,481,291
$
$
2,667
$
1,478,624
1.86
%
6,362,489
5,998,366
5,998,366
22,074
6,020,440
1.22
7,867,032
22,074
2,667
1.34
Obligations of Puerto Rico, States and
2,540
2,540
2,533
2,539
6.41
14,777
14,777
14,717
14,650
3.40
5.81
36,625
36,625
5,911
30,714
2,740
2,117
31,337
1.42
Total obligations of
Puerto Rico, States and
54,597
54,597
5,999
48,598
2,798
2,215
49,181
2.24
1,510
1,510
1,510
1,312
2.87
mortgage obligations -
federal agencies
1,510
1,510
1,510
1,312
2.87
Securities in wholly owned statutory business
trusts
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
held-to-maturity [2]
$
7,929,099
$
7,541,724
$
5,999
$
$
24,872
$
5,080
$
1.35
%
[1]
Book value includes $
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]
7.4
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 $
138.6
million that could be used to increase its borrowing
facilities.
Value
Gross
Gross
Book
[1]
for Credit
Net of
Fair
average
cost
Value
Losses
gains
losses
value
yield
$
599,910
$
599,910
$
$
599,910
$
$
4,498
$
595,412
2.76
%
7,572,435
7,093,508
7,093,508
65,096
7,028,412
1.28
8,172,345
69,594
1.39
Obligations of Puerto Rico, States and
`
2,440
2,440
2,435
2,438
6.39
16,454
16,454
16,374
16,341
3.69
5.81
37,633
37,633
5,210
32,423
2,318
2,596
32,145
1.42
Total obligations of
Puerto Rico, States and
57,182
57,182
5,317
51,865
2,388
2,676
51,577
2.34
1,518
1,518
1,518
1,304
2.87
mortgage obligations -
federal agencies
1,518
1,518
1,518
1,304
2.87
Securities in wholly owned statutory business
trusts
5,959
5,959
5,959
5,959
6.33
Total securities
in wholly owned statutory
business trusts
5,959
5,959
5,959
5,959
6.33
held-to-maturity [2]
$
8,237,004
$
7,758,077
$
5,317
$
$
2,388
$
72,484
$
1.40
%
[1]
Book value includes $
million of unrealized loss which remains in Accumulated
other comprehensive (loss) income (AOCI) related
to certain
securities transferred from available-for-sale securities
portfolio to the held-to-maturity securities portfolio.
[2]
7.6
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 $
139.9
million that could be used to increase its borrowing
facilities.
Debt securities not due on a single contractual maturity date,
such as collateralized mortgage obligations, are classified in the period
of final
contractual maturity.
The expected
maturities of
collateralized mortgage
obligations and
certain other
securities may
differ
from their contractual maturities because they may be
subject to prepayments or may be called
by the issuer.
Credit Quality Indicators
The following describes the credit quality indicators by major security
type that the Corporation considers to develop the
estimate of
the allowance for credit losses for investment securities
held-to-maturity.
As discussed in
Note 2 of
the 2024 Form
10-K, U.S. Treasury
securities carry an explicit
guarantee from the U.S.
Government are
highly rated by major rating
agencies and have a long
history of no credit losses. Accordingly,
the Corporation applies a zero-credit
loss assumption and no allowance for credit losses
(“ACL”) for these securities has been established.
At June
2024, the “Obligations
of Puerto
Rico, States and
political subdivisions” classified
as held-to-
maturity,
issued
by
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
to
the
This
$
million
of
general and
special
obligation bonds
issued
by three
municipalities of
Puerto
Rico,
of
which
$
9.5
million
have
a
“Pass”
rating,
that
are
payable
from
certain
taxes
imposed
by
the
issuing
municipality (compared to $
11.1
million, respectively, at December 31, 2024).
At June 30, 2025, the portfolio of “Obligations of Puerto Rico, States
and political subdivisions” also includes $
million in securities
issued
by
the
Puerto
Rico
Housing Finance
Authority
a
instrumentality,
for
which the
source
of
payment
is
second
loans
in
Puerto
Rico
properties
(not
the
government),
but
for
which
HFA,
a
guarantee in
of default
and upon
the satisfaction
of certain
other conditions
2024 -
$
million). These
securities are not rated by a credit rating agency.
The
assesses
the
credit
risk
with
these
by
the
refreshed
FICO
scores
of
a
representative
sample
of
the
borrowers.
As
of
June
30,
2025,
the
average
refreshed
FICO
score
for
the
sample,
comprised
of
%
of
the
nominal
value
of
the
used
for
the
loss
was
of
(compared
to
%
and
,
respectively, at
The loss estimates
for this portfolio
was based on
the methodology established
under CECL
for
similar
loan
obligations.
The
does
not
the
when
the
credit
losses
associated with this portfolio.
A
deterioration of
the Puerto
Rico economy
or
of
the fiscal
health of
the
Government of
and/or
its
(including if
any of
the issuing
municipalities become
subject to
a debt
restructuring proceeding
Management and Economic Stability Act (“PROMESA”) could
adversely affect the value of these securities, resulting in losses
to the
Note 20
to the
for additional
the Puerto
Rico Government.
Delinquency status
At June 30, 2025 and December 31, 2024, 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 June
30, 2025 was $
6.0
5.3
Note 7 – Loans
For
a summary
of
the accounting
policies related
to
loans, interest
recognition and
allowance for
credit
losses
refer to
Note
–
Summary of Significant Accounting Policies of the 2024
Form 10-K.
the Corporation's loan
purchases for
the quarters
and six
months ended June
and 2024
by
class of loans:
$
67,726
$
159,258
$
74,886
$
215,422
125,690
84,849
246,597
170,653
$
193,416
$
244,107
$
321,483
$
386,075
The following table presents
the Corporation’s loan sales for the quarters and six months ended June 30, 2025 and 2024 by class of
loans:
$
1,000
$
$
27,349
$
9,338
11,656
8,450
12,752
15,387
23,756
$
9,450
$
12,752
$
52,074
$
35,412
June
30,
2025,
the
Corporation securitized
$
million
of
loans
into
FNMA
securities, compared to $
million during the quarter ended June 30, 2024. The Corporation securitized $
million of mortgage loans
into GNMA
mortgage-backed securities
- There
were
no
GNMA securitizations
quarter ended June 30, 2024.
During the six months
ended June 30, 2025,
the Corporation securitized $
million of mortgage loans into
FNMA mortgage-backed
securities, compared to
$
million during the
six months ended
June 30, 2024.
The Corporation securitized
$
million of mortgage
loans into
GNMA mortgage-backed
securities during
the six
to $
million during
the six
months ended June 30, 2024.
Delinquency status
The following tables present the
amortized cost basis of loans
held-in-portfolio (“HIP”), net of unearned
income, by past due status,
and by loan class including those that are in non-performing status or that are accruing
interest but are past due 90 days or more at
BPPR
30-59
60-89
90 days
Total
days
days
or more
Current
loans
loans
$
6,337
$
$
$
6,511
$
299,852
$
306,363
$
$
1,679
6,084
7,876
3,322,108
3,329,984
6,084
1,087
2,098
27,320
30,505
1,171,601
1,202,106
27,320
4,657
2,449
12,652
19,758
5,574,966
5,594,724
8,588
4,064
3,720
3,720
249,579
253,299
262,525
109,530
324,140
696,195
6,407,811
7,104,006
147,464
176,676
Leasing
23,109
5,629
7,976
36,714
1,946,354
7,976
14,184
9,360
25,201
48,745
1,166,545
25,201
1,809
1,809
19,022
11,917
17,499
48,438
1,743,772
1,792,210
17,499
Auto
102,643
22,404
40,595
165,642
3,696,060
40,595
Other
2,500
2,212
4,872
155,550
160,422
1,948
Total
$
439,897
$
165,226
$
463,853
$
1,068,976
$
25,736,007
$
26,804,983
$
257,648
$
206,205
30-59
60-89
90 days
Total
days
days
or more
Current
loans
loans
$
$
4,675
$
10,751
$
15,426
$
2,199,000
$
2,214,426
$
10,751
$
1,503
7,893
9,396
2,181,994
2,191,390
7,893
10,677
10,908
1,790,841
1,801,749
9,235
5,195
3,025
17,455
2,431,573
2,449,028
2,836
3,329
28,052
32,058
1,308,363
1,340,421
28,052
Home equity lines of
credit
3,120
4,682
70,988
75,670
3,120
1,045
1,094
2,671
81,582
84,253
1,094
Other
7,658
8,353
Total
$
24,676
$
14,449
$
54,166
$
93,291
$
11,286,904
$
11,380,195
$
53,977
$
30-59
60-89
90 days
Total
days
days
or more
Current
[2] [3]
loans
loans
$
6,337
$
4,675
$
10,925
$
21,937
$
2,498,852
$
$
10,925
$
1,616
1,679
13,977
17,272
5,504,102
13,977
11,764
2,098
27,551
41,413
2,962,442
27,551
13,892
7,644
15,677
37,213
8,006,539
11,424
4,253
3,720
3,720
1,464,481
[1]
263,202
112,859
352,192
728,253
7,716,174
175,516
176,676
Leasing
23,109
5,629
7,976
36,714
1,946,354
7,976
14,184
9,360
25,201
48,745
1,166,548
25,201
3,120
4,682
72,797
77,479
3,120
20,067
12,449
18,593
51,109
1,825,354
18,593
Auto
102,643
22,404
40,595
165,642
3,696,060
40,595
Other
3,194
2,212
5,567
163,208
168,775
1,948
Total
$
464,573
$
179,675
$
518,019
$
1,162,267
$
37,022,911
$
$
311,625
$
206,394
[1]
At June 30, 2025, mortgage loans held-in-portfolio include
$
2.9
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 $
million are 90 days or more past due. The portfolio of
guaranteed loans includes $
million of residential mortgage loans in Puerto Rico that
are no longer accruing interest as of June 30, 2025. The
Corporation has $
million in reverse mortgage loans in Puerto Rico which
are guaranteed by FHA, but which are currently
not accruing interest
at June 30, 2025.
[2]
Loans held-in-portfolio are net of $
million in unearned income and exclude $
million in loans held-for-sale.
[3]
21.4
billion pledged to secure credit facilities and public funds
that the secured parties are not permitted to sell or repledge
the collateral,
7.5
billion were pledged at the Federal Home Loan Bank
("FHLB") as collateral for borrowings and $
13.9
billion at the Federal Reserve
Bank ("FRB") for discount window borrowings. As of June
30, 2025, the Corporation had an available borrowing
facility with the FHLB and the
discount window of FRB of $
.0 billion and $
10.8
billion, respectively.
BPPR
30-59
60-89
90 days
Total
days
days
or more
Current
loans
loans
$
1,491
$
$
$
1,683
$
306,318
$
308,001
$
$
3,103
6,429
10,118
3,236,385
3,246,503
6,429
11,054
25,258
37,120
1,338,791
1,375,911
25,258
5,738
2,712
23,895
32,345
5,314,549
5,346,894
19,335
4,560
1,039
1,039
211,251
212,290
262,222
116,694
365,759
744,675
6,065,206
6,809,881
158,442
207,317
Leasing
23,991
6,062
9,588
39,641
1,885,764
9,588
17,399
11,719
29,960
59,078
1,158,975
29,960
1,895
2,040
19,503
13,005
20,269
52,777
1,697,600
1,750,377
20,269
Auto
111,358
27,858
51,792
191,008
3,632,429
51,792
Other
1,816
1,312
3,405
156,824
160,229
Total
$
458,730
$
179,963
$
534,341
$
1,173,034
$
25,005,987
$
26,179,021
$
292,091
$
242,250
30-59
60-89
90 days
Total
days
days
or more
Current
loans
loans
$
$
5,443
$
8,700
$
14,143
$
2,077,476
$
2,091,619
$
8,700
$
6,792
8,015
14,807
2,101,925
2,116,732
8,015
5,191
5,191
1,776,644
1,781,835
5,191
10,336
5,323
1,938
17,597
2,377,071
2,394,668
1,748
18,148
5,417
29,890
53,455
1,250,847
1,304,302
29,890
3,393
4,909
66,622
71,531
3,393
1,808
1,509
1,741
5,058
99,809
104,867
1,741
Other
11,024
11,549
Total
$
38,128
$
18,678
$
58,879
$
115,685
$
10,812,946
$
10,928,631
$
58,689
$
30-59
60-89
90 days
Total
days
days
or more
Current
[2]
[3]
loans
loans
$
1,491
$
5,556
$
8,779
$
15,826
$
2,383,794
$
$
8,779
$
9,895
14,444
24,925
5,338,310
14,444
11,054
30,449
42,311
3,115,435
30,449
16,074
8,035
25,833
49,942
7,691,620
21,083
4,750
1,039
1,039
1,262,753
[1]
280,370
122,111
395,649
798,130
7,316,053
188,332
207,317
Leasing
23,991
6,062
9,588
39,641
1,885,764
9,588
17,399
11,719
29,960
59,078
1,159,001
29,960
1,115
3,393
5,054
68,517
73,571
3,393
21,311
14,514
22,010
57,835
1,797,409
22,010
Auto
111,358
27,858
51,792
191,008
3,632,429
51,792
Other
2,330
1,323
3,930
167,848
171,778
Total
$
496,858
$
198,641
$
593,220
$
1,288,719
$
35,818,933
$
$
350,780
$
242,440
[1]
At December 31, 2024 mortgage loans held-in-portfolio include
$
2.6
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 $
million are 90 days or more past due. The portfolio
of
guaranteed loans includes $
million of residential mortgage loans in Puerto Rico that
are no longer accruing interest as of December 31,
The Corporation has $
million in reverse mortgage loans in Puerto Rico which
are guaranteed by FHA, but which are currently not accruing
interest at December 31, 2024.
[2]
Loans held-in-portfolio are net of $
million in unearned income and exclude $
million in loans held-for-sale.
[3]
16.8
billion pledged to secure credit facilities and public funds
that the secured parties are not permitted to sell or repledge
the collateral,
7.3
billion were pledged at the FHLB as collateral for borrowings
and $
9.5
billion at the FRB for discount window borrowings. As
of
December 31, 2024, the Corporation had an available borrowing
facility with the FHLB and the discount window
of FRB of $
3.8
.0
billion, respectively.
Recognition of interest income on mortgage loans is generally discontinued when loans are 90 days or more in arrears on payments
of principal or interest. The Corporation discontinues the recognition of interest income on residential mortgage loans insured by the
FHA or guaranteed by the VA when 15 months
delinquent as to principal or interest, since the principal repayment on these loans is
insured.
Loans with a
delinquency status of 90
days past due
as of June
30, 2025 include
$
million in loans
previously pooled into
GNMA
securities (December 31, 2024 - $
million). Under the GNMA program, issuers such as BPPR have
the option but not the obligation
to repurchase loans that
are 90 days or
more past due. For
accounting purposes, these loans subject to
the repurchase option are
required to be reflected on the financial statements of BPPR with an offsetting liability.
Loans in our serviced GNMA portfolio benefit
from payment forbearance programs but continue to reflect the
contractual delinquency until the borrower repays deferred payments
or completes a payment deferral modification or other
borrower assistance alternative.
The following tables present the amortized cost basis
of non-accrual loans as of June 30, 2025 and
December 31, 2024 by class of
loans:
BPPR
with no
with
with no
with
with no
with
$
$
$
10,751
$
$
10,751
$
3,168
2,916
7,016
10,184
3,793
17,795
9,525
17,795
9,756
8,588
2,836
11,424
63,464
84,000
27,147
64,369
111,147
Leasing
7,497
7,497
HELOCs
3,120
3,120
3,460
14,039
1,094
3,460
15,133
Auto
1,973
38,622
1,973
38,622
Other
1,948
1,948
Total
$
90,339
$
167,309
$
18,672
$
35,305
$
109,011
$
202,614
BPPR
with no
with
with no
with
with no
with
$
$
$
8,700
$
$
8,700
$
3,450
2,979
7,115
10,565
3,879
17,767
7,491
4,957
22,724
7,725
9,020
10,315
1,748
9,020
12,063
66,176
92,266
1,069
28,821
67,245
121,087
Leasing
9,088
9,088
HELOCs
3,393
3,393
2,960
17,309
1,741
2,960
19,050
Auto
1,992
49,800
1,992
49,800
Other
Total
$
101,865
$
190,226
$
21,841
$
36,848
$
123,706
$
227,074
The Corporation has
designated loans classified as
collateral dependent for
which the ACL
is measured based
on the fair
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 collateral
is based
on
appraisals,
which
may
be
due
to
their
age,
type,
location,
and
of
the
or
area
or
general
market
conditions to reflect the expected change in value between the effective date
of the appraisal and the measurement date. Appraisals
are updated every one to two years depending on
the type of loan and the total exposure of
the borrower.
Loans in
non-accrual status with
no allowance
at June
30, 2025 include
$
collateral dependent loans
2024 -
$
million). The
Corporation recognized $
interest income
on non-accrual
loans during
the six
June 30, 2025 (June 30, 2024 - $
The following tables present the amortized cost basis
of collateral-dependent loans, for which the ACL was measured
based on the
fair value of the collateral less cost to sell, by
class of loans and type of collateral as of June
30, 2025 and December 31, 2024:
Real Estate
Auto
Equipment
Accounts
Receivables
Other
Total
BPPR
$
1,250
$
$
$
$
$
1,250
143,152
143,152
24,596
24,596
2,436
2,248
4,808
71,234
71,234
Leasing
1,393
1,393
3,572
3,572
Auto
16,545
16,545
Other
$
246,240
$
17,950
$
$
$
2,248
$
266,562
$
16,542
$
$
$
$
$
16,542
65,668
65,668
1,408
1,408
$
83,618
$
$
$
$
$
83,631
$
17,792
$
$
$
$
$
17,792
208,820
208,820
24,596
24,596
2,436
2,248
4,821
72,642
72,642
Leasing
1,393
1,393
3,572
3,572
Auto
16,545
16,545
Other
Inc.
$
329,858
$
17,950
$
$
$
2,248
$
350,193
Real Estate
Auto
Equipment
Other
Total
BPPR
$
1,278
$
$
$
$
1,278
145,974
145,974
23,361
23,361
2,754
11,593
14,347
77,910
77,910
Leasing
1,437
1,438
3,347
3,347
Auto
15,782
15,782
Other
$
255,200
$
17,219
$
$
11,609
$
284,029
$
14,517
$
$
$
$
14,517
7,116
7,116
4,956
4,956
1,154
1,172
1,430
1,430
$
28,019
$
$
$
1,154
$
29,191
$
15,795
$
$
$
$
15,795
153,090
153,090
28,317
28,317
2,754
12,747
15,519
79,340
79,340
Leasing
1,437
1,438
3,347
3,347
Auto
15,782
15,782
Other
Inc.
$
283,219
$
17,219
$
$
12,763
$
313,220
Note 8 – Allowance for credit losses – loans
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
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
assets be
recorded as
an
increase to
the
purchase price,
with subsequent
changes to
the
as
a
credit
loss
expense.
The
for
credit
losses
in
current
is
based
on
this
methodology.
Loan losses
are charged
and
recoveries are
credited to
the ACL.
The
Corporation’s modeling
framework includes
competing risk
models that
generate lifetime
default and
prepayment estimates as
well as
other loan
level techniques
to estimate
loss
severity.
These
models
combine
credit
risk
factors
which
include
the
impact
of
loan
modifications,
with
macroeconomic
expectations to derive the lifetime expected loss.
At June
estimated the
ACL by
weighting the
outputs of
optimistic, baseline,
and pessimistic
The
weightings applied
are subject
to
evaluation on
a
quarterly basis
as
part
of
the ACL’s
governance process.
first
quarter
of
2025,
the
equal
weights
to
the
baseline
and
scenarios
in
to
economic uncertainty,
the optimistic scenario
being the lowest
of probabilities. During
quarter of 2025,
moderately
reduced
the
weight
for
the
based
on
changes
in
the
outlook
and
a
reassessment of uncertainty compared to the previous quarter. The net impact of these two changes in the
assigned weights on the
ACL
levels
for
the
six
months
ended
June
30,
was
$
13.7
million
in
reserves.
The
weight
for
the
pessimistic scenario remains above the levels observed
in 2024, given the ongoing economic uncertainty.
The following tables
present the changes
in the ACL
of loans
held-in-portfolio and unfunded
commitments for the
quarters and six
months ended June 30, 2025 and 2024.
BPPR
Ending
Balance
Balance
$
3,420
$
$
$
$
3,696
42,848
(160)
(21)
43,139
36,019
(1,176)
(14)
1,019
35,848
131,407
(6,769)
(2,466)
1,030
123,202
213,694
(7,835)
(2,501)
2,527
205,885
2,719
3,075
74,289
(1,752)
(550)
2,979
74,966
Leasing
20,206
2,570
(3,982)
1,246
20,040
96,523
13,094
(20,011)
2,700
92,306
(313)
89,786
18,881
(19,553)
3,777
92,891
Auto
171,979
16,852
(13,418)
6,861
182,274
Other
7,007
1,297
(700)
7,758
365,355
49,811
(53,682)
13,799
375,283
$
676,263
$
43,150
$
(60,715)
$
20,551
$
679,249
$
7,445
$
(1,569)
$
$
$
5,876
1,560
1,869
$
9,005
$
(1,260)
$
$
$
7,745
[1] Allowance for credit losses of unfunded commitments
is presented as part of Other Liabilities in the Consolidated
Ending
Balance
Balance
$
10,081
$
3,567
$
(563)
$
$
13,085
15,453
15,978
14,193
(1,016)
(14)
13,203
16,422
1,533
(49)
18,160
56,149
4,609
(626)
60,426
6,793
7,504
9,740
10,209
1,550
(799)
(16)
1,330
11,651
1,417
(2,920)
10,763
Other
(13)
13,203
(2,949)
1,211
12,097
$
85,885
$
6,389
$
(3,575)
$
1,537
$
90,236
$
1,630
$
$
$
$
1,935
3,492
(203)
3,289
$
5,164
$
$
$
$
5,308
[1]
Ending
Balance
Balance
$
13,501
$
3,837
$
(563)
$
$
16,781
58,301
(21)
59,117
50,212
(2,192)
(28)
1,059
49,051
147,829
(5,236)
(2,515)
1,284
141,362
269,843
(3,226)
(3,127)
2,821
266,311
9,512
1,067
10,579
84,029
(1,315)
(550)
3,011
85,175
Leasing
20,206
2,570
(3,982)
1,246
20,040
96,523
13,094
(20,011)
2,700
92,306
1,610
(1,112)
(16)
1,384
101,437
20,298
(22,473)
4,392
103,654
Auto
171,979
16,852
(13,418)
6,861
182,274
Other
7,009
1,311
(713)
7,762
378,558
50,443
(56,631)
15,010
387,380
$
762,148
$
49,539
$
(64,290)
$
22,088
$
769,485
$
9,075
$
(1,264)
$
$
$
7,811
5,052
5,158
$
14,169
$
(1,116)
$
$
$
13,053
[1]
BPPR
Ending
Balance
Balance
$
2,783
$
$
$
$
$
3,696
44,852
(2,759)
(86)
1,132
43,139
37,355
(2,918)
(103)
1,514
35,848
130,136
(7,026)
(5,778)
5,870
123,202
215,126
(11,798)
(5,967)
8,524
205,885
2,743
3,075
72,901
(2,870)
(985)
5,911
74,966
Leasing
16,419
9,629
(8,526)
2,518
20,040
99,130
26,916
(38,876)
5,136
92,306
(421)
(25)
91,296
35,709
(41,506)
7,392
92,891
Auto
165,995
36,323
(34,474)
14,430
182,274
Other
7,002
2,020
(1,580)
7,758
363,477
100,547
(116,461)
27,720
375,283
$
670,666
$
95,840
$
$
(131,939)
$
44,673
$
679,249
$
6,725
$
(849)
$
$
$
$
5,876
1,663
1,869
$
8,388
$
(643)
$
$
$
$
7,745
[1]
Ending
Balance
Balance
$
6,453
$
7,194
$
(563)
$
$
13,085
9,642
6,336
15,978
12,473
(26)
13,203
15,870
3,010
(1,196)
18,160
44,438
16,733
(1,785)
1,040
60,426
8,521
(1,017)
7,504
9,508
10,209
1,449
(935)
(46)
1,330
11,440
3,617
(5,546)
1,252
10,763
Other
(42)
12,891
2,717
(5,634)
2,123
12,097
$
75,358
$
18,917
$
(7,419)
$
3,380
$
90,236
$
1,662
$
$
$
$
1,935
5,409
(2,120)
3,289
$
7,082
$
(1,774)
$
$
$
5,308
[1]
Ending
Balance
Balance
$
9,236
$
8,099
$
$
(563)
$
$
16,781
54,494
3,577
(86)
1,132
59,117
49,828
(2,725)
(129)
2,077
49,051
146,006
(4,016)
(6,974)
6,346
141,362
259,564
4,935
(7,752)
9,564
266,311
11,264
(685)
10,579
82,409
(2,386)
(985)
6,128
85,175
Leasing
16,419
9,629
(8,526)
2,518
20,040
99,130
26,916
(38,876)
5,136
92,306
1,503
(1,356)
(71)
1,308
1,384
102,736
39,326
(47,052)
8,644
103,654
Auto
165,995
36,323
(34,474)
14,430
182,274
Other
7,004
2,055
(1,622)
7,762
376,368
103,264
(122,095)
29,843
387,380
$
746,024
$
114,757
$
$
(139,358)
$
48,053
$
769,485
$
8,387
$
(576)
$
$
$
$
7,811
7,072
(1,914)
5,158
$
15,470
$
(2,417)
$
$
$
$
13,053
[1]
BPPR
Ending
Balance
Balance
$
3,567
$
(264)
$
$
$
$
3,303
53,666
(324)
53,386
43,537
(5,296)
1,134
39,375
102,844
14,440
(8,072)
2,051
111,263
203,614
8,556
(8,072)
3,229
207,327
3,114
3,638
76,564
(6,419)
(26)
3,775
73,900
Leasing
8,991
8,094
(3,841)
1,141
14,385
88,169
11,856
(16,419)
2,707
86,313
(94)
99,504
15,492
(23,293)
2,318
94,021
Auto
157,456
10,250
(16,609)
6,352
157,449
Other
6,808
(680)
6,489
352,039
37,830
(57,095)
11,581
344,355
$
644,322
$
48,585
$
$
(69,034)
$
19,726
$
643,605
$
4,942
$
$
$
$
$
5,540
1,441
2,095
$
6,383
$
1,252
$
$
$
$
7,635
[1]
Ending
Balance
Balance
$
9,176
$
(1,303)
$
$
$
7,877
11,958
(1,151)
10,849
20,270
(1,514)
18,815
17,574
(1,367)
(1,195)
15,219
58,978
(5,335)
(1,195)
52,760
8,025
1,126
9,251
9,874
(502)
(18)
9,389
1,770
(510)
(14)
1,643
16,573
(4,596)
13,427
Other
(2)
(18)
18,345
(4,628)
1,072
15,072
$
95,222
$
(4,428)
$
(5,841)
$
1,519
$
86,472
$
2,542
$
$
$
$
2,850
7,837
8,399
(5)
$
10,384
$
$
$
$
11,249
[1]
Ending
Balance
Balance
$
12,743
$
(1,567)
$
$
$
$
11,180
65,624
(1,475)
64,235
63,807
(6,810)
1,193
58,190
120,418
13,073
(9,267)
2,258
126,482
262,592
3,221
(9,267)
3,541
260,087
11,139
1,650
12,889
86,438
(6,921)
(44)
3,810
83,289
Leasing
8,991
8,094
(3,841)
1,141
14,385
88,169
11,856
(16,419)
2,707
86,313
1,872
(488)
(108)
1,726
116,077
16,287
(27,889)
2,973
107,448
Auto
157,456
10,250
(16,609)
6,352
157,449
Other
6,810
(698)
6,491
370,384
38,113
(61,723)
12,653
359,427
$
739,544
$
44,157
$
$
(74,875)
$
21,245
$
730,077
$
7,484
$
$
$
$
$
8,390
9,278
1,216
10,494
(5)
$
16,767
$
2,117
$
$
$
$
18,884
[1]
BPPR
Ending
Balance
Balance
$
3,614
$
(312)
$
$
$
$
3,303
53,754
(737)
53,386
40,637
(149)
(2,785)
1,672
39,375
107,577
14,816
(14,741)
3,611
111,263
205,582
13,618
(17,526)
5,653
207,327
5,294
(1,656)
3,638
72,440
(6,738)
(791)
8,966
73,900
Leasing
9,708
11,062
(8,691)
2,306
14,385
80,487
33,496
(32,815)
5,145
86,313
(291)
101,181
35,755
(47,642)
4,727
94,021
Auto
157,931
23,621
(36,776)
12,673
157,449
Other
7,132
(1,344)
6,489
346,834
93,307
(118,868)
23,082
344,355
$
639,858
$
109,593
$
$
(145,876)
$
40,007
$
643,605
$
5,062
$
$
$
$
$
5,540
1,618
2,095
$
6,680
$
$
$
$
$
7,635
[1]
Ending
Balance
Balance
$
10,126
$
(1,813)
$
(441)
$
$
7,877
11,699
(956)
10,849
16,227
2,505
18,815
14,779
1,836
(1,759)
15,219
52,831
1,572
(2,200)
52,760
7,392
1,759
9,251
10,774
(1,427)
(18)
9,389
1,875
(763)
(21)
1,643
16,609
5,786
(10,308)
1,340
13,427
Other
(49)
18,486
5,046
(10,378)
1,918
15,072
$
89,483
$
6,950
$
(12,596)
$
2,635
$
86,472
$
1,851
$
$
$
$
2,850
8,446
(47)
8,399
(29)
$
10,326
$
$
$
$
11,249
[1]
Ending
Balance
Balance
$
13,740
$
(2,125)
$
$
(441)
$
$
11,180
65,453
(1,693)
64,235
56,864
2,356
(2,785)
1,755
58,190
122,356
16,652
(16,500)
3,974
126,482
258,413
15,190
(19,726)
6,210
260,087
12,686
12,889
83,214
(8,165)
(809)
9,026
83,289
Leasing
9,708
11,062
(8,691)
2,306
14,385
80,487
33,496
(32,815)
5,145
86,313
1,978
(638)
(312)
1,726
117,790
41,541
(57,950)
6,067
107,448
Auto
157,931
23,621
(36,776)
12,673
157,449
Other
7,134
(1,393)
6,491
365,320
98,353
(129,246)
25,000
359,427
$
729,341
$
116,543
$
$
(158,472)
$
42,642
$
730,077
$
6,913
$
1,477
$
$
$
$
8,390
10,064
10,494
(29)
$
17,006
$
1,878
$
$
$
$
18,884
[1]
Statements of Financial
Condition.
Modifications
A
modification
constitutes
a
change
in
loan
terms
in
the
form
of
forgiveness,
an
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
modified during
the six
2025 amounted
to $
million (During
the year
ended December
31,
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 and
ended June 30, 2025 and 2024. Loans modified
to borrowers experiencing financial difficulties that were fully paid down,
charged-off
or foreclosed upon by period end are not reported.
Difficulty for the quarter ended June 30, 2025
BPPR
$
0.01
%
$
%
$
0.01
%
%
%
%
0.03
%
%
0.03
%
1,159
0.06
%
%
1,159
0.06
%
Total
$
2,460
0.01
%
$
%
$
2,460
0.01
%
BPPR
$
%
$
58,652
2.68
%
$
58,760
1.06
%
5,308
0.44
%
%
5,308
0.18
%
5,693
0.10
%
%
5,693
0.07
%
12,983
0.18
%
0.05
%
13,648
0.16
%
0.01
%
0.02
%
0.01
%
Auto
%
%
%
Total
$
24,401
0.09
%
$
59,338
0.52
%
$
83,739
0.22
%
BPPR
$
4,436
0.13
%
$
%
$
4,436
0.08
%
8,827
0.73
%
%
8,827
0.29
%
166,870
2.98
%
%
166,870
2.07
%
0.01
%
%
%
Total
$
180,553
0.67
%
$
%
$
180,553
0.47
%
BPPR
$
%
$
%
$
%
3,936
0.06
%
%
3,936
0.05
%
3,429
0.19
%
0.09
%
3,502
0.19
%
Auto
%
%
%
Total
$
7,481
0.03
%
$
%
$
7,554
0.02
%
Combination -
Other-Than-Insignificant Payment Delays and Interest Rate
$
0.01
%
$
%
$
%
2,293
0.19
%
%
2,293
0.19
%
Total
$
2,603
0.01
%
$
%
$
2,603
0.01
%
Difficulty for the six months ended June 30,
BPPR
$
2,048
0.04
%
$
%
$
2,048
0.03
%
%
%
%
0.04
%
%
0.04
%
2,280
0.13
%
%
2,280
0.12
%
Other
%
%
%
Total
$
4,944
0.02
%
$
%
$
4,944
0.01
%
BPPR
$
%
$
58,652
2.68
%
$
58,760
1.06
%
5,308
0.44
%
%
5,308
0.18
%
11,271
0.20
%
%
11,271
0.14
%
22,922
0.32
%
0.05
%
23,587
0.28
%
0.03
%
0.02
%
0.03
%
Auto
%
%
%
Total
$
40,191
0.15
%
$
59,338
0.52
%
$
99,529
0.26
%
BPPR
$
4,436
0.13
%
$
%
$
4,436
0.08
%
20,980
1.75
%
%
20,980
0.70
%
177,506
3.17
%
%
177,506
2.21
%
0.01
%
%
%
Total
$
203,342
0.76
%
$
%
$
203,342
0.53
%
BPPR
$
%
$
%
$
%
7,061
0.10
%
%
7,061
0.08
%
6,534
0.36
%
0.14
%
6,648
0.35
%
Auto
%
%
%
Total
$
13,711
0.05
%
$
%
$
13,825
0.04
%
Combination - Other-Than-Insignificant Payment Delays
$
0.02
%
$
%
$
0.01
%
4,867
0.40
%
%
4,867
0.40
%
Total
$
5,728
0.02
%
$
%
$
5,728
0.02
%
Difficulty for the quarter ended June 30, 2024
BPPR
$
%
$
%
$
%
1,747
0.03
%
%
1,747
0.02
%
%
%
%
0.04
%
%
0.04
%
0.05
%
%
0.05
%
Other
0.02
%
%
0.02
%
Total
$
3,117
0.01
%
$
%
$
3,117
0.01
%
BPPR
$
3,084
0.10
%
$
%
$
3,084
0.06
%
1,134
0.08
%
6,071
0.35
%
7,205
0.23
%
23,059
0.46
%
%
23,059
0.32
%
16,933
0.26
%
0.05
%
17,575
0.22
%
0.01
%
0.10
%
0.02
%
Auto
%
%
%
Total
$
44,504
0.18
%
$
6,849
0.07
%
$
51,353
0.14
%
BPPR
$
57,071
1.92
%
$
%
$
57,071
1.14
%
6,230
0.44
%
%
6,230
0.20
%
52,124
1.04
%
%
52,124
0.72
%
%
%
%
Total
$
115,552
0.46
%
$
%
$
115,552
0.32
%
BPPR
$
0.01
%
$
%
$
0.01
%
5,246
0.08
%
%
5,277
0.07
%
2,190
0.13
%
%
2,190
0.12
%
Total
$
7,926
0.03
%
$
%
$
7,957
0.02
%
Combination -
Other-Than-Insignificant Payment Delays and Interest Rate
$
%
$
%
$
%
0.02
%
%
0.02
%
Total
$
%
$
%
$
%
Difficulty for the six months ended June 30,
BPPR
$
%
$
%
$
%
2,122
0.04
%
%
2,122
0.03
%
%
%
%
0.05
%
%
0.05
%
1,085
0.06
%
%
1,085
0.06
%
Other
0.02
%
%
0.02
%
Total
$
3,856
0.02
%
$
%
$
3,856
0.01
%
BPPR
$
39,484
1.33
%
$
%
$
39,484
0.79
%
11,718
0.83
%
6,071
0.35
%
17,789
0.57
%
23,767
0.48
%
%
23,767
0.33
%
29,868
0.45
%
0.05
%
30,510
0.39
%
0.02
%
0.10
%
0.03
%
Auto
%
%
%
Total
$
105,329
0.42
%
$
6,854
0.07
%
$
112,183
0.32
%
BPPR
$
57,071
1.92
%
$
%
$
57,071
1.14
%
16,207
1.14
%
%
16,207
0.52
%
56,477
1.13
%
%
56,477
0.78
%
%
%
%
Total
$
129,882
0.52
%
$
%
$
129,882
0.36
%
BPPR
$
0.03
%
$
%
$
0.02
%
0.01
%
%
0.01
%
8,655
0.13
%
0.01
%
8,723
0.11
%
3,234
0.19
%
0.11
%
3,378
0.18
%
Total
$
13,365
0.05
%
$
%
$
13,577
0.04
%
Combination - Other-Than-Insignificant Payment Delays
$
%
%
0.05
%
0.05
%
Total
$
%
$
$
%
The following tables describe the financial effect of the
modifications made to borrowers experiencing
financial difficulties:
22.7
% to
9.9
%.
.0% to
5.4
%.
20.8
% to
7.9
%.
20.9
% to
11.1
%.
Auto
18.3
0% to
18.29
%.
Auto
Other than insignificant payment delays
24.3
% to
9.7
%.
6.8
% to
5.5
%.
.0% to
8.2
%.
21.3
% to
11.5
%.
Auto
18.3
0% to
18.29
%.
Other
.0% to
.0%.
Auto
.0% to
.0%.
.0% to
9.3
%.
6.4
% to
4.4
%.
19.7
% to
4.2
%.
19.2
% to
10.1
%.
Other
.0% to
.0%.
Auto
10.1
% to
8.3
%.
.0% to
.0%.
19.2
% to
9.4
%.
6.2
% to
4.5
%.
20.2
% to
.0%.
18.8
% to
.0%.
Other
.0% to
.0%.
Auto
The following tables present, by
class, the performance of loans
that have been modified
during the twelve months
preceding June
30,
The
past
due
days
or
more
all
loans
as
non-accruing
at
the
time
of
the
modification. These
loans will
continue in
non-accrual status,
and presented
as past
due 90
days or
more, until
the borrower
has
demonstrated a willingness and
ability to make
the restructured loan payments
(at least six
months of sustained
performance after
the modification
or one
year for
loans providing
for quarterly
or semi-annual
payments) and
management has
concluded that
it is
probable that the borrower would not be in payment
default in the foreseeable future.
BPPR
due
Current
Total
Default
Without
$
$
$
$
$
4,536
$
5,092
$
$
2,583
2,969
43,635
46,604
2,154
2,325
2,708
215,888
218,596
1,938
5,765
2,431
18,854
27,050
31,215
58,265
4,876
13,978
1,153
2,421
5,851
8,272
2,365
3,296
13,243
16,539
2,084
Auto
Other
Total
$
7,802
$
3,362
$
27,836
$
39,000
$
314,508
$
353,508
$
7,303
$
20,533
due
Current
Total
Default
Without
$
$
$
$
$
5,791
5,791
$
$
58,652
58,652
1,481
1,481
Total
$
$
$
$
$
66,741
$
66,758
$
$
due
Current
Total
Default
Without
$
$
$
$
$
5,791
$
5,791
$
$
63,188
63,744
2,583
2,969
43,635
46,604
2,154
2,325
2,708
216,497
219,205
1,938
5,765
2,431
18,854
27,050
32,696
59,746
4,876
13,978
1,153
2,421
5,851
8,272
2,365
3,313
13,451
16,764
2,084
Auto
Other
Total
$
7,819
$
3,362
$
27,836
$
39,017
$
381,249
$
420,266
$
7,303
$
20,533
to make the restructured loan payments.
Payment default is defined as a restructured loan becoming
90 days past due after being modified, foreclosed
or
The following tables present, by
class, the performance of loans
that have been modified
during the twelve months
preceding June
BPPR
due
Current
Total
Default
Without
$
$
$
$
$
$
$
$
2,847
3,023
123,280
126,303
2,847
1,976
2,311
187,369
189,680
1,976
16,325
16,731
81,051
97,782
11,994
4,331
8,969
3,596
23,535
36,100
46,337
82,437
4,833
18,702
1,269
1,637
1,461
1,711
5,085
6,796
1,229
Auto
Other
Total
$
10,018
$
3,969
$
46,394
$
60,381
$
444,454
$
504,835
$
17,138
$
29,256
due
Current
Total
Default
Without
$
$
$
$
$
48,948
$
48,948
$
$
1,691
Total
$
$
$
$
$
50,031
$
50,956
$
$
due
Current
Total
Default
Without
$
$
$
$
$
$
$
$
2,847
3,023
123,280
126,303
2,847
1,976
2,311
236,317
238,628
1,976
16,325
16,731
81,051
97,782
11,994
4,331
8,969
3,596
24,307
36,872
47,256
84,128
4,833
19,474
1,269
1,637
1,571
1,864
5,249
7,113
1,336
Auto
Other
Total
$
10,037
$
3,993
$
47,276
$
61,306
$
494,485
$
555,791
$
17,141
$
30,135
to make the restructured loan payments.
Payment default is defined as a restructured loan becoming
90 days past due after being modified, foreclosed
or
Payment
default
is
defined
as
a
restructured
loan
becoming
days
past
due
after
being
modified,
foreclosed
or
charged-off,
whichever
occurs
first.
The
tables
provide
the
balance
of
loans
for
under
difficulties that were subject to payment default and that
had been modified during the twelve months prior
to default.
Subsequently Defaulted During the Quarter Ended June
Total
$
$
$
$
$
$
4,478
1,256
5,734
Total
$
$
4,583
$
$
1,395
$
1,089
$
8,138
Subsequently Defaulted During the Six Months Ended
Total
$
$
$
$
$
$
8,129
1,411
9,540
1,273
Total
$
$
8,322
$
$
1,558
$
1,378
$
12,697
Subsequently Defaulted During the Quarter Ended June
Total
$
$
$
$
$
$
5,012
1,246
6,258
Total
$
$
5,069
$
$
1,312
$
$
6,860
Subsequently Defaulted During the Six Months Ended
Total
$
$
$
$
$
$
11,936
12,044
6,707
1,548
8,255
Total
$
$
19,186
$
$
1,692
$
$
21,527
Credit Quality
The risk
rating system
provides for
the assignment
of ratings
at the
obligor level
condition of
the borrower.
The
risk rating
analysis process
is
performed at
least
once a
year
or more
frequently if
events or
conditions change
which may
deteriorate the credit quality.
In the case of
consumer and mortgage loans, these
loans are classified considering their
delinquency
status at the end of the reporting period.
The following tables present the amortized cost basis, net of unearned income, of
loans held-in-portfolio based on the Corporation’s
assignment of obligor risk ratings as defined at June 30,
2025 and December 31, 2024 and the gross write-offs recorded by
vintage
year.
For
the
definitions
of
the
obligor
risk
ratings,
refer
to
the
Credit
Quality
section
of
Note
to
the
Statements included in the 2024 Form 10-K:
Loans
Loans
Prior
Years
Total
BPPR
Pass
$
5,807
$
49,680
$
36,848
$
134,824
$
20,776
$
49,916
$
$
$
297,958
Watch
1,506
3,052
3,052
3,847
3,847
$
5,807
$
49,680
$
36,848
$
135,356
$
20,776
$
57,789
$
$
$
306,363
Pass
$
170,876
$
435,905
$
277,255
$
800,396
$
539,661
$
851,734
$
6,502
$
$
3,082,329
Watch
8,463
9,012
2,133
4,929
55,975
81,320
40,950
21,642
62,742
14,255
8,650
30,652
26,150
23,886
103,593
$
179,339
$
459,172
$
328,988
$
831,934
$
570,740
$
953,237
$
6,574
$
$
3,329,984
$
$
$
$
$
$
$
$
$
Pass
$
37,062
$
137,720
$
79,163
$
103,152
$
183,384
$
334,315
$
6,647
$
$
881,443
Watch
1,871
14,458
5,509
26,227
21,246
80,797
150,108
1,671
16,158
11,605
1,461
31,638
1,581
45,868
2,600
76,599
11,823
138,832
$
38,933
$
152,539
$
87,924
$
191,405
$
207,973
$
503,401
$
19,931
$
$
1,202,106
$
$
$
$
$
$
$
$
$
Pass
$
610,403
$
726,378
$
802,741
$
507,669
$
213,257
$
406,259
$
1,375,443
$
$
4,642,150
Watch
24,809
98,741
24,041
69,784
52,631
24,827
114,548
409,381
20,707
15,190
155,494
3,748
15,670
211,027
4,506
14,137
39,212
77,310
4,268
27,254
165,473
332,160
$
639,743
$
859,963
$
881,184
$
654,956
$
425,650
$
462,094
$
1,671,134
$
$
5,594,724
$
$
$
$
$
$
$
4,332
$
$
5,778
Pass
$
12,476
$
93,063
$
71,433
$
13,614
$
2,392
$
10,344
$
28,788
$
$
232,110
Watch
15,355
15,437
5,752
5,752
$
12,476
$
93,063
$
86,788
$
13,614
$
8,226
$
10,344
$
28,788
$
$
253,299
Pass
$
500,848
$
896,365
$
701,587
$
393,941
$
390,381
$
4,147,454
$
$
$
7,030,576
2,349
2,923
67,245
73,430
$
500,848
$
896,441
$
703,936
$
396,864
$
391,218
$
4,214,699
$
$
$
7,104,006
$
$
$
$
$
$
$
$
$
Loans
Loans
Prior
Years
Total
BPPR
Leasing
Pass
$
401,501
$
606,339
$
415,561
$
304,802
$
174,810
$
72,079
$
$
$
1,975,092
2,339
2,527
1,318
7,976
$
401,603
$
607,286
$
417,900
$
307,329
$
176,128
$
72,822
$
$
$
$
$
2,005
$
2,801
$
2,692
$
$
$
$
$
8,526
Pass
$
$
$
$
$
$
$
1,190,089
$
$
1,190,089
25,179
25,179
Loss
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
38,876
$
$
38,876
HELOCs
Pass
$
$
$
$
$
$
$
1,809
$
$
1,809
$
$
$
$
$
$
$
1,809
$
$
1,809
$
$
$
$
$
$
$
$
$
Pass
$
463,420
$
565,928
$
361,675
$
187,632
$
73,097
$
94,447
$
$
28,023
$
1,774,222
1,776
3,660
1,823
7,307
2,295
17,559
Loss
$
463,443
$
567,832
$
365,508
$
189,514
$
73,833
$
101,762
$
$
30,318
$
1,792,210
$
$
7,261
$
19,056
$
10,308
$
2,754
$
1,137
$
$
$
41,506
Auto
Pass
$
631,487
$
1,141,753
$
823,831
$
563,712
$
402,200
$
249,272
$
$
$
3,812,255
10,807
13,078
10,413
7,488
7,015
49,360
Loss
$
632,046
$
1,152,577
$
836,966
$
574,133
$
409,688
$
256,292
$
$
$
$
$
14,215
$
9,433
$
6,088
$
2,823
$
1,008
$
$
$
34,474
Pass
$
11,209
$
26,344
$
27,484
$
17,591
$
8,930
$
4,052
$
62,591
$
$
158,201
Loss
1,026
1,576
$
11,209
$
26,344
$
27,705
$
18,722
$
9,480
$
4,107
$
62,855
$
$
160,422
$
$
$
$
$
$
$
$
$
1,580
$
2,885,447
$
4,864,897
$
3,773,747
$
3,313,827
$
2,293,712
$
6,636,547
$
3,006,488
$
30,318
$
26,804,983
Loans
Loans
Prior
Years
Total
Pass
$
220,110
$
141,968
$
158,579
$
463,959
$
304,759
$
713,040
$
7,845
$
$
2,010,260
Watch
19,739
24,169
124,218
168,126
7,922
7,922
2,742
25,376
28,118
$
220,110
$
141,968
$
158,579
$
494,362
$
328,928
$
862,634
$
7,845
$
$
2,214,426
$
$
$
$
$
$
$
$
$
Pass
$
134,448
$
184,579
$
311,357
$
474,945
$
168,109
$
650,531
$
9,897
$
$
1,933,866
Watch
10,300
8,875
10,900
11,365
9,221
85,023
135,684
1,937
13,105
5,830
100,718
121,840
$
144,748
$
193,454
$
324,194
$
499,415
$
183,160
$
836,272
$
10,147
$
$
2,191,390
Pass
$
182,187
$
256,245
$
256,523
$
265,347
$
267,836
$
283,143
$
8,454
$
$
1,519,735
Watch
13,500
25,370
7,838
55,575
103,142
18,056
38,063
22,984
79,103
16,310
2,557
80,902
99,769
$
182,187
$
287,801
$
281,893
$
327,558
$
271,252
$
442,604
$
8,454
$
$
1,801,749
$
$
$
$
$
$
$
$
$
Pass
$
128,135
$
324,089
$
288,628
$
319,633
$
290,456
$
714,577
$
245,021
$
$
2,310,539
Watch
5,203
38,038
24,093
38,311
5,940
111,585
3,909
4,822
1,906
11,279
2,623
1,509
11,023
15,625
$
128,135
$
326,712
$
298,014
$
362,493
$
315,172
$
754,612
$
263,890
$
$
2,449,028
$
$
$
$
$
$
$
$
$
1,196
Pass
$
153,767
$
373,195
$
503,352
$
62,476
$
$
6,030
$
11,641
$
$
1,110,461
Watch
3,945
4,615
67,330
7,057
83,271
12,568
12,568
8,602
8,602
$
154,091
$
377,140
$
520,535
$
138,408
$
$
13,087
$
11,641
$
$
Pass
$
82,666
$
89,746
$
86,297
$
209,953
$
267,057
$
576,649
$
$
$
1,312,368
27,409
28,053
$
82,666
$
89,746
$
86,941
$
209,953
$
267,057
$
604,058
$
$
$
1,340,421
Loans
Loans
Prior
Years
Total
Pass
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
HELOCs
Pass
$
$
$
$
$
$
5,408
$
56,341
$
10,802
$
72,551
1,478
2,049
Loss
1,070
$
$
$
$
$
$
7,050
$
56,354
$
12,266
$
75,670
$
$
$
$
$
$
$
$
$
Pass
$
11,637
$
22,435
$
16,958
$
25,006
$
5,594
$
1,530
$
$
$
83,160
1,038
Loss
$
11,637
$
22,666
$
17,193
$
25,257
$
5,643
$
1,857
$
$
$
84,253
$
$
1,158
$
1,379
$
2,535
$
$
$
$
$
5,546
Pass
$
$
$
$
$
$
$
8,353
$
$
8,353
$
$
$
$
$
$
$
8,353
$
$
8,353
$
$
$
$
$
$
$
$
$
$
923,574
$
1,439,487
$
1,687,349
$
2,057,446
$
1,371,212
$
3,522,174
$
366,687
$
12,266
$
11,380,195
Loans
Loans
Prior
Years
Total
Pass
$
225,917
$
191,648
$
195,427
$
598,783
$
325,535
$
762,956
$
7,952
$
$
2,308,218
Watch
20,271
24,169
125,192
169,632
7,922
3,052
10,974
2,742
29,223
31,965
$
225,917
$
191,648
$
195,427
$
629,718
$
349,704
$
920,423
$
7,952
$
$
$
$
$
$
$
$
$
$
$
Pass
$
305,324
$
620,484
$
588,612
$
1,275,341
$
707,770
$
1,502,265
$
16,399
$
$
5,016,195
Watch
18,763
17,887
13,033
12,101
14,150
140,998
217,004
40,950
21,642
62,742
14,255
10,587
43,757
31,980
124,604
225,433
$
324,087
$
652,626
$
653,182
$
1,331,349
$
753,900
$
1,789,509
$
16,721
$
$
$
$
$
$
$
$
$
$
$
Pass
$
219,249
$
393,965
$
335,686
$
368,499
$
451,220
$
617,458
$
15,101
$
$
2,401,178
Watch
1,871
27,958
30,879
34,065
22,105
136,372
253,250
18,056
1,671
54,221
34,589
1,461
110,741
1,581
62,178
5,157
157,501
11,823
238,601
$
221,120
$
440,340
$
369,817
$
518,963
$
479,225
$
946,005
$
28,385
$
$
$
$
$
$
$
$
$
$
$
Pass
$
738,538
$
1,050,467
$
1,091,369
$
827,302
$
503,713
$
1,120,836
$
1,620,464
$
$
6,952,689
Watch
24,809
98,741
29,244
107,822
76,724
63,138
120,488
520,966
20,707
19,099
5,015
155,921
3,963
17,576
222,306
4,506
16,760
39,486
77,310
4,464
28,763
176,496
347,785
$
767,878
$
1,186,675
$
1,179,198
$
1,017,449
$
740,822
$
1,216,706
$
1,935,024
$
$
$
$
$
$
$
$
$
4,370
$
$
6,974
Loans
Loans
Prior
Years
Total
Pass
$
166,243
$
466,258
$
574,785
$
76,090
$
2,392
$
16,374
$
40,429
$
$
1,342,571
Watch
3,945
19,970
67,330
7,057
98,708
12,568
12,568
8,602
5,752
14,354
$
166,567
$
470,203
$
607,323
$
152,022
$
8,226
$
23,431
$
40,429
$
$
Pass
$
583,514
$
986,111
$
787,884
$
603,894
$
657,438
$
4,724,103
$
$
$
8,342,944
2,993
2,923
94,654
101,483
$
583,514
$
986,187
$
790,877
$
606,817
$
658,275
$
4,818,757
$
$
$
$
$
$
$
$
$
$
$
$
Leasing
Pass
$
401,501
$
606,339
$
415,561
$
304,802
$
174,810
$
72,079
$
$
$
1,975,092
2,339
2,527
1,318
7,976
$
401,603
$
607,286
$
417,900
$
307,329
$
176,128
$
72,822
$
$
$
$
$
2,005
$
2,801
$
2,692
$
$
$
$
$
8,526
Loans
Loans
Prior
Years
Total
Pass
$
$
$
$
$
$
$
1,190,092
$
$
1,190,092
25,179
25,179
Loss
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
38,876
$
$
38,876
HELOCs
Pass
$
$
$
$
$
$
5,408
$
58,150
$
10,802
$
74,360
1,478
2,049
Loss
1,070
$
$
$
$
$
$
7,050
$
58,163
$
12,266
$
77,479
$
$
$
$
$
$
$
$
$
Pass
$
475,057
$
588,363
$
378,633
$
212,638
$
78,691
$
95,977
$
$
28,023
$
1,857,382
2,007
3,888
2,074
7,586
2,295
18,597
Loss
$
475,080
$
590,498
$
382,701
$
214,771
$
79,476
$
103,619
$
$
30,318
$
$
$
8,419
$
20,435
$
12,843
$
3,191
$
1,174
$
$
$
47,052
Auto
Pass
$
631,487
$
1,141,753
$
823,831
$
563,712
$
402,200
$
249,272
$
$
$
3,812,255
10,807
13,078
10,413
7,488
7,015
49,360
Loss
$
632,046
$
1,152,577
$
836,966
$
574,133
$
409,688
$
256,292
$
$
$
$
$
14,215
$
9,433
$
6,088
$
2,823
$
1,008
$
$
$
34,474
Pass
$
11,209
$
26,344
$
27,484
$
17,591
$
8,930
$
4,052
$
70,944
$
$
166,554
Loss
1,026
1,576
$
11,209
$
26,344
$
27,705
$
18,722
$
9,480
$
4,107
$
71,208
$
$
168,775
$
$
$
$
$
$
$
$
$
1,622
Total Popular Inc.
$
3,809,021
$
6,304,384
$
5,461,096
$
5,371,273
$
3,664,924
$
10,158,721
$
3,373,175
$
42,584
$
Loans
Loans
Prior
Years
Total
BPPR
Pass
$
50,384
$
37,211
$
136,093
$
20,939
$
20,134
$
34,009
$
$
$
298,875
Watch
1,601
2,142
3,161
3,161
3,823
3,823
$
50,384
$
37,211
$
136,634
$
20,939
$
20,134
$
42,594
$
$
$
308,001
Pass
$
419,200
$
322,998
$
828,404
$
547,674
$
335,060
$
525,088
$
6,159
$
$
2,984,583
Watch
26,097
2,296
5,349
28,832
50,924
114,224
7,018
41,274
46,390
95,244
1,002
26,430
1,954
22,956
52,452
$
452,315
$
367,570
$
829,324
$
579,859
$
365,846
$
645,358
$
6,231
$
$
3,246,503
$
$
$
$
$
$
$
$
$
Pass
$
131,449
$
79,109
$
94,008
$
214,520
$
46,206
$
309,791
$
7,214
$
$
882,297
Watch
14,002
2,637
64,735
7,225
4,890
85,580
179,072
1,209
19,436
19,288
15,872
1,499
57,304
1,651
20,528
3,872
140,579
77,098
13,021
257,204
$
145,906
$
84,606
$
198,707
$
244,905
$
191,675
$
488,375
$
21,737
$
$
1,375,911
$
$
$
$
$
$
2,793
$
$
$
2,793
Pass
$
790,273
$
910,355
$
602,454
$
304,227
$
66,395
$
331,493
$
1,495,490
$
$
4,500,687
Watch
124,987
24,935
49,497
6,394
3,465
31,609
135,811
376,698
5,519
7,316
1,895
157,627
30,360
28,171
230,941
6,063
30,496
37,558
4,203
14,776
23,135
122,275
238,506
Loss
$
926,842
$
973,102
$
691,404
$
472,451
$
84,689
$
416,608
$
1,781,798
$
$
5,346,894
$
1,099
$
$
$
$
2,838
$
11,841
$
7,617
$
$
24,555
Pass
$
63,107
$
53,070
$
33,423
$
14,908
$
9,483
$
1,011
$
16,782
$
$
191,784
Watch
13,872
13,872
6,058
6,058
$
63,107
$
66,942
$
33,423
$
21,542
$
9,483
$
1,011
$
16,782
$
$
212,290
Pass
$
879,075
$
724,383
$
409,133
$
401,113
$
234,486
$
4,085,088
$
$
$
6,733,278
1,961
1,331
1,675
71,289
76,603
$
879,075
$
726,344
$
410,464
$
402,788
$
234,833
$
4,156,377
$
$
$
6,809,881
$
$
$
$
$
$
1,067
$
$
$
1,084
Loans
Loans
Prior
Years
Total
BPPR
Leasing
Pass
$
731,053
$
477,226
$
362,426
$
217,537
$
104,812
$
22,762
$
$
$
1,915,816
1,195
2,280
2,834
1,885
9,516
Loss
$
732,248
$
479,506
$
365,260
$
219,422
$
105,732
$
23,237
$
$
$
$
1,733
$
4,842
$
5,373
$
3,281
$
$
1,052
$
$
$
16,975
Pass
$
$
$
$
$
$
$
1,188,093
$
$
1,188,093
29,960
29,960
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
69,731
$
$
69,731
HELOCs
Pass
$
$
$
$
$
$
$
2,040
$
$
2,040
$
$
$
$
$
$
$
2,040
$
$
2,040
$
$
$
$
$
$
$
$
$
Pass
$
722,949
$
499,604
$
262,011
$
101,155
$
29,078
$
91,004
$
$
23,802
$
1,729,603
4,965
3,561
1,221
8,205
1,626
20,773
Loss
$
723,873
$
504,569
$
265,572
$
102,377
$
29,349
$
99,209
$
$
25,428
$
1,750,377
$
2,362
$
39,193
$
38,077
$
10,822
$
2,708
$
3,525
$
$
1,982
$
98,669
Auto
Pass
$
1,277,016
$
938,769
$
665,431
$
494,529
$
254,621
$
133,054
$
$
$
3,763,420
7,239
16,876
13,579
10,775
6,377
5,131
59,977
Loss
$
1,284,269
$
955,660
$
679,010
$
505,306
$
260,998
$
138,194
$
$
$
$
11,229
$
36,992
$
20,486
$
9,997
$
4,965
$
1,731
$
$
$
85,400
Pass
$
28,543
$
29,585
$
20,021
$
10,129
$
4,588
$
3,364
$
62,678
$
$
158,908
Loss
$
28,543
$
29,813
$
20,065
$
10,679
$
4,617
$
3,421
$
63,091
$
$
160,229
$
$
$
$
$
$
2,205
$
$
$
2,801
$
5,286,562
$
4,225,323
$
3,629,863
$
2,580,268
$
1,307,356
$
6,014,384
$
3,109,837
$
25,428
$
26,179,021
Loans
Loans
Prior
Years
Total
Pass
$
139,370
$
148,423
$
491,750
$
313,610
$
207,327
$
560,891
$
5,700
$
$
1,867,071
Watch
10,974
27,441
26,679
10,668
114,419
190,181
8,004
8,004
2,761
23,602
26,363
$
139,370
$
159,397
$
529,956
$
340,289
$
217,995
$
698,912
$
5,700
$
$
2,091,619
$
$
$
$
$
$
$
$
$
Pass
$
178,355
$
368,597
$
480,055
$
167,839
$
193,309
$
456,689
$
8,588
$
$
1,853,432
Watch
12,932
17,125
13,138
45,864
64,390
153,749
2,657
2,741
5,758
97,801
108,957
$
178,355
$
381,529
$
499,837
$
183,718
$
244,931
$
619,474
$
8,888
$
$
2,116,732
$
$
$
$
$
$
$
$
$
Pass
$
304,778
$
257,586
$
244,811
$
279,419
$
35,459
$
246,158
$
7,669
$
$
1,375,880
Watch
25,614
13,531
32,132
16,301
54,877
142,455
69,505
34,428
27,406
10,825
142,652
17,101
2,596
3,678
97,473
120,848
$
304,778
$
283,688
$
344,948
$
348,575
$
82,844
$
409,333
$
7,669
$
$
1,781,835
$
$
$
$
$
$
$
$
$
Loans
Loans
Prior
Years
Total
Pass
$
260,479
$
275,971
$
318,564
$
322,697
$
268,591
$
506,973
$
273,222
$
$
2,226,497
Watch
11,420
48,953
28,138
9,521
35,498
15,050
148,580
5,270
3,835
9,986
2,276
1,610
5,479
9,605
$
262,813
$
287,391
$
372,787
$
351,598
$
278,157
$
544,336
$
297,586
$
$
2,394,668
$
1,103
$
1,571
$
$
$
$
$
$
$
3,978
Pass
$
259,194
$
512,428
$
155,268
$
$
$
$
$
$
927,655
Watch
1,541
36,264
7,172
24,691
69,668
4,897
6,367
11,264
8,104
25,473
9,338
42,915
$
259,194
$
518,866
$
206,003
$
$
$
33,410
$
34,029
$
$
Pass
$
98,345
$
88,788
$
215,600
$
272,908
$
216,025
$
382,746
$
$
$
1,274,412
28,280
29,890
$
98,345
$
89,432
$
215,706
$
273,768
$
216,025
$
411,026
$
$
$
1,304,302
$
$
$
$
$
$
$
$
$
Loans
Loans
Prior
Years
Total
Pass
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
HELOCs
Pass
$
$
$
$
$
$
5,914
$
50,533
$
11,691
$
68,138
1,657
2,372
Loss
1,021
$
$
$
$
$
$
7,693
$
50,548
$
13,290
$
71,531
$
$
$
$
$
$
$
$
$
Pass
$
28,083
$
23,084
$
41,182
$
8,618
$
$
1,507
$
$
$
103,125
1,626
Loss
$
28,293
$
23,493
$
41,809
$
8,757
$
$
1,857
$
$
$
104,867
$
$
4,536
$
10,869
$
2,458
$
$
$
$
$
19,203
Pass
$
$
$
$
$
$
$
11,537
$
$
11,537
$
$
$
$
$
$
$
11,549
$
$
11,549
$
$
$
$
$
$
$
$
$
$
1,271,148
$
1,743,796
$
2,211,046
$
1,506,705
$
1,040,610
$
2,726,041
$
415,995
$
13,290
$
10,928,631
Loans
Loans
Prior
Years
Total
Pass
$
189,754
$
185,634
$
627,843
$
334,549
$
227,461
$
594,900
$
5,805
$
$
2,165,946
Watch
10,974
27,982
26,679
10,668
116,020
192,323
8,004
3,161
11,165
2,761
27,425
30,186
$
189,754
$
196,608
$
666,590
$
361,228
$
238,129
$
741,506
$
5,805
$
$
$
$
$
$
$
$
$
$
$
Pass
$
597,555
$
691,595
$
1,308,459
$
715,513
$
528,369
$
981,777
$
14,747
$
$
4,838,015
Watch
26,097
15,228
17,779
18,487
74,696
115,314
267,973
7,018
41,274
46,984
95,838
1,002
2,767
29,171
7,712
120,757
161,409
$
630,670
$
749,099
$
1,329,161
$
763,577
$
610,777
$
1,264,832
$
15,119
$
$
$
$
$
$
$
$
$
$
$
Pass
$
436,227
$
336,695
$
338,819
$
493,939
$
81,665
$
555,949
$
14,883
$
$
2,258,177
Watch
14,002
28,251
78,266
39,357
21,191
140,457
321,527
1,697
88,941
53,716
27,406
26,697
1,499
199,956
1,651
37,629
6,468
144,257
174,571
13,021
378,052
$
450,684
$
368,294
$
543,655
$
593,480
$
274,519
$
897,708
$
29,406
$
$
$
$
$
$
$
$
2,947
$
$
$
2,947
Pass
$
1,050,752
$
1,186,326
$
921,018
$
626,924
$
334,986
$
838,466
$
1,768,712
$
$
6,727,184
Watch
124,987
36,355
98,450
34,532
12,986
67,107
150,861
525,278
5,577
7,316
7,165
158,195
30,615
32,006
240,927
8,339
30,496
37,558
4,398
14,821
24,745
127,754
248,111
Loss
$
1,189,655
$
1,260,493
$
1,064,191
$
824,049
$
362,846
$
960,944
$
2,079,384
$
$
$
2,202
$
2,278
$
$
$
3,049
$
12,321
$
7,740
$
$
28,533
Loans
Loans
Prior
Years
Total
Pass
$
322,301
$
565,498
$
188,691
$
14,908
$
9,483
$
1,776
$
16,782
$
$
1,119,439
Watch
15,413
36,264
7,172
24,691
83,540
4,897
6,367
6,058
17,322
8,104
25,473
9,338
43,491
$
322,301
$
585,808
$
239,426
$
21,542
$
9,483
$
34,421
$
50,811
$
$
Pass
$
977,420
$
813,171
$
624,733
$
674,021
$
450,511
$
4,467,834
$
$
$
8,007,690
2,605
1,437
2,535
99,569
106,493
$
977,420
$
815,776
$
626,170
$
676,556
$
450,858
$
4,567,403
$
$
$
$
$
$
$
$
$
1,085
$
$
$
1,102
Leasing
Pass
$
731,053
$
477,226
$
362,426
$
217,537
$
104,812
$
22,762
$
$
$
1,915,816
1,195
2,280
2,834
1,885
9,516
Loss
$
732,248
$
479,506
$
365,260
$
219,422
$
105,732
$
23,237
$
$
$
$
1,733
$
4,842
$
5,373
$
3,281
$
$
1,052
$
$
$
16,975
Loans
Loans
Prior
Years
Total
Pass
$
$
$
$
$
$
$
1,188,119
$
$
1,188,119
29,960
29,960
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
69,731
$
$
69,731
HELOCs
Pass
$
$
$
$
$
$
5,914
$
52,573
$
11,691
$
70,178
1,657
2,372
Loss
1,021
$
$
$
$
$
$
7,693
$
52,588
$
13,290
$
73,571
$
$
$
$
$
$
$
$
$
Pass
$
751,032
$
522,688
$
303,193
$
109,773
$
29,729
$
92,511
$
$
23,802
$
1,832,728
1,081
5,364
4,188
1,355
8,507
1,626
22,399
Loss
$
752,166
$
528,062
$
307,381
$
111,134
$
30,007
$
101,066
$
$
25,428
$
$
3,164
$
43,729
$
48,946
$
13,280
$
2,939
$
3,832
$
$
1,982
$
117,872
Auto
Pass
$
1,277,016
$
938,769
$
665,431
$
494,529
$
254,621
$
133,054
$
$
$
3,763,420
7,239
16,876
13,579
10,775
6,377
5,131
59,977
Loss
$
1,284,269
$
955,660
$
679,010
$
505,306
$
260,998
$
138,194
$
$
$
$
11,229
$
36,992
$
20,486
$
9,997
$
4,965
$
1,731
$
$
$
85,400
Pass
$
28,543
$
29,585
$
20,021
$
10,129
$
4,588
$
3,364
$
74,215
$
$
170,445
Loss
$
28,543
$
29,813
$
20,065
$
10,679
$
4,617
$
3,421
$
74,640
$
$
171,778
$
$
$
$
$
$
2,205
$
$
$
2,902
Total Popular Inc.
$
6,557,710
$
5,969,119
$
5,840,909
$
4,086,973
$
2,347,966
$
8,740,425
$
3,525,832
$
38,718
$
Note 9 – Mortgage banking activities
Income
from
banking
fees
earned
in
connection
with
administering
loans
and
adjustments
on
rights.
It
also
gain
on
sales
and
securitizations
of
loans, losses
on repurchased
loans, including
interest advances,
and trading
gains and
losses on
derivative
used
to
hedge
the
securitization
activities.
In
fair
value
adjustments
to
mortgage loans held for sale, if any, are recorded as part of the mortgage
banking activities.
The following table presents the components of mortgage
banking activities:
Mortgage servicing fees, net of fair value adjustments:
Mortgage servicing fees
$
6,912
$
7,602
$
14,080
$
15,353
Mortgage servicing rights fair value adjustments
(1,954)
(1,945)
(5,524)
(5,384)
servicing fees, net of fair value adjustments
4,958
5,657
8,556
9,969
Net (loss) gain on sale of loans, including valuation on
loans held-for-sale
(37)
Trading account (loss) profit:
Unrealized (losses) gains on outstanding derivative positions
(8)
(95)
Realized (losses) gains on closed derivative positions
(10)
(9)
(loss) profit
(18)
(104)
Losses on repurchased loans, including interest advances
(31)
(1)
(47)
(131)
banking activities
$
4,872
$
5,723
$
8,561
$
10,083
Note 10 – Transfers of financial assets and mortgage servicing assets
The
typically
transfers
conforming
loans
in
conjunction
with
GNMA,
FNMA
and
FHLMC
securitization transactions
whereby the
loans are
exchanged for
cash or
servicing rights.
As seller,
has made
certain representations
and warranties
to the
originally transferred
loans and,
in the
past,
has sold
certain
loans
with
credit
to
a
government-sponsored
entity,
namely
FNMA.
Refer
to
Note
to
the
Statements for a description of such arrangements.
No
liabilities were
incurred as
a result
of these
securitizations during the
quarters and
because they did not contain any credit recourse
arrangements.
The
following tables
present the
initial fair
the
assets obtained
as
proceeds from
loans securitized
during the quarters and six months ended June 30,
2025 and 2024:
Proceeds Obtained During the Quarter Ended June 30, 2025
Level 1
Level 2
Level 3
Assets
$
$
2,581
$
$
2,581
2,553
2,553
$
$
5,134
$
$
5,134
$
$
$
$
Total
$
$
5,134
$
$
5,226
Proceeds Obtained During the Six months Ended June
Level 1
Level 2
Level 3
Assets
$
$
2,581
$
$
2,581
4,271
4,271
$
$
6,852
$
$
6,852
$
$
$
$
Total
$
$
6,852
$
$
6,987
Proceeds Obtained During the Quarter Ended June 30, 2024
Level 1
Level 2
Level 3
Assets
$
$
2,601
$
$
2,601
$
$
2,601
$
$
2,601
$
$
$
$
Total
$
$
2,601
$
$
2,673
Proceeds Obtained During the Six months Ended June
Level 1
Level 2
Level 3
Assets
$
$
1,100
$
$
1,100
3,706
3,706
$
$
4,806
$
$
4,806
$
$
$
$
Total
$
$
4,806
$
$
4,923
Corporation retained servicing
rights on
whole loan sales
involving $
principal balance
outstanding (June
- $
million), with
net realized
gains of
$
0.4
million (June
- gains
of $
0.5
million). All loan sales performed during the six months
ended June 30, 2025 and 2024 were without
credit recourse agreements.
The Corporation recognizes as assets the rights to service loans for others,
whether these rights are purchased or result from asset
transfers such as sales and securitizations. These mortgage
servicing rights (“MSRs”) are measured at
fair value.
The
uses
a
discounted
cash
flow
model
to
the
fair
value
of
MSRs.
The
discounted
cash
flow
model
incorporates
assumptions
that
market
participants
would
use
in
future
net
income,
of
prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, prepayment and late
fees, among other considerations. Prepayment speeds are
adjusted for the loans’ characteristics and portfolio behavior.
presents the changes
in MSRs measured
using the fair
value method for
the six months
Residential MSRs
Fair value at beginning of period
$
108,103
$
118,109
Changes due to payments on loans
[1]
(4,326)
(4,435)
Reduction due to loan repurchases
(221)
(247)
Changes in fair value due to changes in valuation model inputs
or assumptions
(977)
(702)
Fair value at end of period
[2]
$
103,077
$
113,386
[1] Represents changes due to collection / realization
of expected cash flows over time.
[2] At June 30, 2025, PB had MSRs amounting to $
1.8
1.9
Residential mortgage loans serviced for others were $
8.6
billion at June 30, 2025 (December 31, 2024
-$
9.0
Net mortgage servicing fees, a component of mortgage banking activities in the Consolidated Statements of Operations, include the
changes from period to period in the fair value of the MSRs, including changes due to collection / realization of expected cash flows.
The banking
subsidiaries receive servicing
fees based
on a
percentage of the
outstanding loan balance.
These servicing fees
are
credited to income
when they are collected.
2025, those weighted average
mortgage servicing fees were
0.32
% (June
30, 2024 -
0.32
%). Under these servicing agreements, the banking
subsidiaries do not generally earn significant prepayment
penalty
fees on the underlying loans serviced.
The section
below includes
assumptions used
in the
valuation model
of the
MSRs, originated
and purchased.
Key
economic assumptions used
in measuring the
servicing rights derived
from loans securitized
or sold by
the Corporation during
the
2024 were as follows:
BPPR
PB
BPPR
PB
BPPR
PB
BPPR
PB
5.9
%
5.8
%
6.9
%
6.3
%
6.8
%
6.0
%
6.4
%
6.2
%
Weighted average life (in years)
10.4
8.8
9.2
8.6
9.8
8.8
9.4
8.7
Discount rate (annual rate)
9.5
%
12.9
%
9.8
%
12.9
%
9.7
%
12.9
%
9.6
%
12.7
%
Key
assumptions
used
to
the
fair
value
of
MSRs
derived
from
sales
and
securitizations
of
loans
performed
by
the
banking
and
rights
purchased
from
other
institutions,
and
the
sensitivity
to
immediate changes in those assumptions, were as follows
as of the end of the periods reported:
Originated MSRs
Purchased MSRs
Fair value of servicing rights
$
33,734
$
34,019
$
69,343
$
74,084
Weighted average life (in years)
6.4
6.4
6.6
6.6
Weighted average prepayment speed (annual
rate)
5.6
%
5.8
%
6.9
%
6.9
%
Impact on fair value of 10% adverse change
$
(658)
$
(667)
$
(1,346)
$
(1,448)
Impact on fair value of 20% adverse change
$
(1,289)
$
(1,308)
$
(2,641)
$
(2,840)
Weighted average discount rate (annual rate)
11.3
%
11.4
%
10.9
%
10.8
%
Impact on fair value of 10% adverse change
$
(1,245)
$
(1,267)
$
(2,496)
$
(2,689)
Impact on fair value of 20% adverse change
$
(2,410)
$
(2,451)
$
(4,837)
$
(5,211)
The sensitivity analyses presented in the table above for servicing rights are hypothetical and should be used with caution. As the
figures indicate, changes in fair value based on a 10 and 20 percent variation in assumptions generally cannot be extrapolated
because the relationship of the change in assumption to the change in fair value may not be linear. Also, in the sensitivity tables
included herein the effect of a variation in a particular assumption on the fair value of the retained interest is calculated without
changing any other assumption. In reality, changes in one factor may result in changes in another (for example, increases in market
interest rates may result in lower prepayments and increased credit losses), which might magnify or counteract the sensitivity.
At
June
30,
2025,
the
serviced
$
million
in
loans
with
credit
to
the
(December 31, 2024
- $
million). Also refer
to Note
19 to
the Consolidated Financial
Statements for information
on changes in
the Corporation’s liability of estimated losses related
to loans serviced with credit recourse.
repurchased $
million (June
- $
million) of
loans from
its GNMA
servicing portfolio.
The determination
to repurchase
these loans
was based
on the
economic benefits
of the
transaction, which
results in
a reduction
of the
servicing costs
for these
severely delinquent
loans, mainly
principal and
interest advances. The
risk associated with
the loans is
reduced due to
their guaranteed nature.
The Corporation may place
these
loans under modification
programs offered by
FHA, VA
or United States
Department of Agriculture (USDA)
or other loss
mitigation
programs offered by the Corporation,
and once brought back to current status, these may be either
retained in portfolio or re-sold in
the secondary market.
Note 11 – Other real estate owned
The following tables present the activity related to Other
Real Estate Owned (“OREO”),
for the quarters
and six months ended June
30, 2025 and 2024.
OREO
OREO
Total
$
7,111
$
45,003
$
52,114
(835)
(516)
(1,351)
7,908
8,222
Sales
(693)
(12,145)
(12,838)
(21)
(21)
$
5,897
$
40,229
$
46,126
OREO
OREO
Total
$
15,962
$
64,580
$
80,542
(1,039)
(427)
(1,466)
12,146
12,662
Sales
(6,011)
(15,502)
(21,513)
$
9,428
$
60,797
$
70,225
OREO
OREO
Total
$
8,424
$
48,844
$
57,268
(864)
(1,715)
(2,579)
16,697
17,268
Sales
(2,234)
(23,374)
(25,608)
(223)
(223)
$
5,897
$
40,229
$
46,126
OREO
OREO
Total
$
11,189
$
69,227
$
80,416
(1,064)
(711)
(1,775)
5,860
24,782
30,642
Sales
(6,557)
(32,436)
(38,993)
(65)
(65)
$
9,428
$
60,797
$
70,225
Note 12 − Other assets
The caption of other assets in the Consolidated
Statements of Financial Condition consists of the
following major categories:
Net deferred tax assets (net of valuation allowance)
$
862,089
$
926,329
Investments under the equity method
244,510
251,537
Prepaid taxes
63,677
42,909
Other prepaid expenses
31,982
28,376
Capitalized software costs
169,583
136,442
Derivative assets
24,792
25,975
Trades receivable from brokers and counterparties
Receivables from investments maturities
14,600
Principal, interest and escrow servicing advances
35,818
43,793
Guaranteed mortgage loan claims receivable
13,084
17,226
Operating ROU assets (Note 27)
89,253
93,389
Finance ROU assets (Note 27)
17,685
19,174
Assets for pension benefit
34,503
33,233
Others
157,196
164,188
Total other assets
$
1,745,052
$
1,797,759
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
with
hosting
arrangements
that
are
service
that
are
also
within
Other
Assets.
The
hosting
arrangements can
include capitalizable
implementation costs
amortized during
the term
of the
hosting arrangement.
The
table
summarizes
the
composition
of
or
developed
costs
as
well
as
costs
related
to
hosting
arrangements:
Gross Carrying
Net Carrying
Amount
Amortization
Value
Software development costs
$
83,809
$
29,575
$
54,234
Software license costs
52,630
26,924
25,706
98,766
9,123
89,643
Total Capitalized
software costs [1] [2]
$
235,205
$
65,622
$
169,583
Software development costs
$
79,233
$
23,057
$
56,176
Software license costs
42,234
21,459
20,775
65,797
6,306
59,491
Total Capitalized
software costs [1] [2]
$
187,264
$
50,822
$
136,442
[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:
Six
Software development and license costs
$
22,254
$
18,612
$
43,982
$
36,313
1,462
2,828
1,538
Total amortization
expense
$
23,716
$
19,278
$
46,810
$
37,851
Note 13 – Goodwill and other intangible assets
There were
no
changes in the carrying amount of goodwill
for the quarters and six months ended June 30, 2025
The following tables present the gross amount
of goodwill and accumulated impairment losses
by reportable segment:
impairment
(gross amounts)
losses
(net amounts)
$
438,710
$
3,801
$
434,909
564,456
196,411
368,045
Inc.
$
1,003,166
$
200,212
$
802,954
impairment
(gross amounts)
losses
(net amounts)
$
438,710
$
3,801
$
434,909
564,456
196,411
368,045
Inc.
$
1,003,166
$
200,212
$
802,954
Other Intangible Assets
The following table reflects the components of
other intangible assets subject to amortization:
Gross Carrying
Net Carrying
Amount
Amortization
Value
$
12,810
$
12,810
$
Other customer relationships
14,286
9,202
5,084
Total other intangible
assets
$
27,096
$
22,012
$
5,084
$
12,810
$
12,595
$
Other customer relationships
14,286
8,435
5,851
Total other intangible
assets
$
27,096
$
21,030
$
6,066
During the quarter ended June 30, 2025, the Corporation recognized
$
0.4
million in amortization expense related to other intangible
assets
with
definite
useful
lives
(June
30,
$
0.7
During
the
six
months
ended
June
30,
2025,
the
recognized $
1.0
million in amortization related to other intangible
assets with definite useful lives (June
30, 2024 - $
1.5
the estimated
amortization of
the intangible
assets with
definite useful
lives for
each of
the following
periods:
Remaining 2025
$
Year 2026
1,440
Year 2027
Year 2028
Year 2029
Note 14 – Deposits
Total deposits as of the end of the periods presented consisted of:
Savings accounts
$
14,337,808
$
14,224,271
NOW, money market and other interest
-bearing demand deposits
28,166,283
26,507,637
Total savings, NOW,
money market and other interest-bearing demand deposits
42,504,091
40,731,908
Certificates of deposit:
Under $250,000
5,580,334
5,383,331
$250,000 and over
4,018,452
3,629,551
Total certificates
of deposit
9,012,882
Total interest-bearing
$
52,102,877
$
49,744,790
Non- interest-bearing deposits
$
$
$
$
A summary of certificates of deposits by maturity at
June 30, 2025 follows:
$
4,645,684
2,633,316
823,872
666,327
446,123
2030 and thereafter
383,464
Total certificates of
deposit
$
At June 30, 2025, the Corporation had brokered
deposits amounting to $
1.7
billion (December 31, 2024 - $
1.6
The aggregate amount
of overdrafts in
demand deposit accounts that
were reclassified to
loans was $
6.4
million at June
(December 31, 2024 - $
10.4
At
June
30,
2025,
Puerto
Rico
to
$
20.9
billion.
Puerto
Rico
are
bearing accounts, which are indexed to short-term market
rates and fluctuate in cost with changes in those rates, in accordance
with
contractual terms.
Note 15 – Borrowings
Assets sold under agreements to repurchase amounted
to $
million at June 30, 2025 and $
million at December 31, 2024.
repurchase transactions are
overcollateralized with the
securities detailed in
the table
below.
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.
presents information related to
the Corporation’s repurchase
transactions accounted for as
secured borrowings
that
are
with
debt
available-for-sale,
debt
held-to-maturity,
and
other
assets
held-for-trading
purposes or
which have
been obtained
under agreements
to resell.
It is
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
liability
liability
Within 30 days
$
27,789
$
22,591
After 30 to 90 days
23,781
13,813
51,570
36,404
Within 30 days
4,473
4,924
After 30 to 90 days
13,505
4,473
18,429
Total
$
56,043
$
54,833
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.
2025 and December 31,
2024, other short-term
borrowings consisted of
$
million, respectively,
in
FHLB Advances.
Notes Payable
The following table presents the composition of notes
payable at June 30, 2025 and December
Advances with the FHLB with maturities ranging from
through
paying interest at
monthly
fixed rates ranging from
0.57
% to
4.17
%
$
214,200
$
302,722
Unsecured senior debt securities maturing on
paying interest
semi-annually
at a fixed rate of
7.25
%, net of debt issuance costs of $
4,135
395,865
395,198
Junior subordinated deferrable interest debentures (related to
trust preferred securities) maturing on
with fixed interest rates ranging from
6.125
% to
6.564
%, net of debt issuance costs of $
198,386
198,373
$
808,451
$
896,293
Note: Refer to the 2024 Form 10-K for rates information
at December 31, 2024.
A breakdown of borrowings by contractual maturities
at June 30, 2025 is included in the
table below.
Assets sold under
Short-term
agreements to
Total
$
56,043
$
550,000
$
55,692
$
661,735
74,500
74,500
440,215
440,215
39,658
39,658
Later years
198,386
198,386
Total borrowings
$
56,043
$
550,000
$
808,451
$
1,414,494
At June 30, 2025 and
December 31, 2024, the Corporation had FHLB borrowing facilities whereby
the Corporation could borrow up
to $
4.8
4.7
billion, respectively,
0.8
0.5
billion, respectively,
were used. In addition,
at December
31, 2024,
had placed
$
0.3
billion of
the available
FHLB credit
facility as
collateral for
municipal letters
of credit
to
secure
deposits.
The
FHLB
are
with
and
loans
held-in-portfolio,
and
do
not
have
restrictive covenants or callable features.
Also, at
had borrowing facilities
at the
discount window of
the Federal
Reserve Bank of
amounting to
$
10.8
billion (December 31,
2024 -
$
7.0
billion), which remained
unused at June
and December
The facilities are a collateralized source of credit
that is highly dependable even under difficult market conditions.
Note 16 − Other liabilities
The caption of other liabilities in the Consolidated
Statements of Financial Condition consists of the
following major categories:
Accrued expenses
$
333,826
$
334,145
Accrued interest payable
63,307
60,723
Accounts payable
100,842
91,218
Dividends payable
47,826
49,546
Trades payable
593,949
495,139
Liability for GNMA loans sold with an option to repurchase
8,097
9,108
Reserves for loan indemnifications
2,331
2,779
Reserve for operational losses
28,699
29,465
Operating lease liabilities (Note 27)
98,575
103,198
Finance lease liabilities (Note 27)
21,316
23,141
Pension benefit obligation
5,684
5,816
Postretirement benefit obligation
98,219
99,172
Others
76,416
68,396
Total other liabilities
$
1,479,087
$
1,371,846
Note 17 – Stockholders’ equity
As of June 30, 2025, stockholders’ equity totaled $
6.0
billion. During the six months ended June 30, 2025, the Corporation declared
cash dividends of $
1.40
(2024 - $
1.24
) per common share amounting to
$
96.2
million (2024 - $
89.7
million). The quarterly dividend
of $
0.70
per share declared to stockholders of record as
of the close of business on
May 29, 2025
was paid on
July 1, 2025
.
During
the
quarter
ended
June
30,
2025,
the
completed
the
of
shares
of
common
stock
for
$
112.0
million at an
average price of $
98.54
per share. As
of June 30, 2025,
a total of
$
451.5
million has been repurchased
under
the common stock repurchase program of up
to $
million announced by the Corporation on July
24, 2024.
On July 16, 2025, the Corporation announced the following actions as part of its capital plan: (i) an increase in
its quarterly common
stock dividend from $
0.70
per share to $
0.75
per share, beginning with the dividend payable in the fourth quarter of 2025, subject to
approval by its Board of Directors, and (ii) a new
common stock repurchase program of up to $
Note 18 – Other comprehensive income
table presents changes
in accumulated other
comprehensive income by
component for the
quarters and six
months
ended June 30, 2025 and 2024.
Changes in Accumulated Other Comprehensive Loss
by Component [1]
Six
Foreign currency translation
$
(78,011)
$
(68,548)
$
(71,365)
$
(64,528)
Other comprehensive income (loss)
7,499
(3,855)
7,499
(3,855)
$
(70,512)
$
(68,383)
$
(70,511)
$
(68,383)
Adjustment of pension and
$
(93,271)
$
(115,632)
$
(94,692)
$
(117,894)
Amounts reclassified from accumulated other
comprehensive loss for amortization of net losses
1,420
2,261
2,841
4,522
1,420
2,261
2,841
4,522
$
(91,851)
$
(113,371)
$
(91,851)
$
(113,372)
Unrealized net holding losses
on debt securities
$
(1,318,705)
$
(1,749,006)
$
(1,495,183)
$
(1,713,109)
Other comprehensive income (loss)
48,417
16,941
188,646
(54,163)
Amounts reclassified from accumulated other
comprehensive loss for amortization of net unrealized
losses of debt securities transferred from available-for-
36,994
35,537
73,242
70,745
85,411
52,478
261,888
16,582
$
(1,233,294)
$
(1,696,528)
$
(1,233,295)
$
(1,696,527)
Total
$
$
$
$
[1]
All amounts presented are net of tax.
the amounts
reclassified out
of each
component of
accumulated other comprehensive
income during
the quarters and six months ended June 30, 2025
Reclassifications Out of Accumulated Other Comprehensive
Loss
Six
Affected Line Item in the
Consolidated Statements of Operations
Adjustment of pension and postretirement benefit plans
Amortization of net losses
$
(2,272)
$
(3,618)
$
(4,545)
$
(7,236)
Total before tax
(2,272)
(3,618)
(4,545)
(7,236)
Income tax benefit
1,357
1,704
2,714
Total net of tax
$
(1,420)
$
(2,261)
$
(2,841)
$
(4,522)
Unrealized net holding losses on debt securities
Amortization of unrealized net losses of debt
securities transferred to held-to-maturity
Interest income from investment securities
$
(46,242)
$
(44,421)
$
(91,552)
$
(88,430)
Total before tax
(46,242)
(44,421)
(91,552)
(88,430)
9,248
8,884
18,310
17,685
Total net of tax
$
(36,994)
$
(35,537)
$
(73,242)
$
(70,745)
Total reclassification
adjustments, net of tax
$
(38,414)
$
(37,798)
$
(76,083)
$
(75,267)
Note 19 – Guarantees
has obligations
occurrence of
certain events
under financial
guarantees provided
in certain
Also,
from
time
to
time,
the
securitized
loans
into
subject in certain instances, to
lifetime credit recourse on the
loans that serve as collateral
for the mortgage-backed securities. The
not sold
any mortgage
loans subject
to credit
recourse since
- Also,
from time
to time,
may
sell, in
bulk sale
transactions, residential
and Small
Business Administration
(“SBA”) commercial
loans subject
to
credit
or
to
certain
representations
and
warranties
from
the
to
the
purchaser.
These
representations
and
warranties may
relate, for
example, to
borrower creditworthiness,
loan documentation,
collateral,
prepayment and
early payment
defaults. The
Corporation may
be required
to
repurchase the
loans under
the credit
recourse agreements
or
representation and
warranties
At June 30, 2025, the Corporation serviced $
million) in residential mortgage loans subject to
credit recourse provisions, principally loans associated
with FNMA and FHLMC residential mortgage loan
securitization programs. In
of any
customer default,
pursuant to
the credit
recourse provided,
is required
to repurchase
the loan
or
reimburse
the
third-party investor
for
the
loss
incurred. The
maximum
potential amount
of
future payments
that
the
would be required
to make under
the recourse arrangements in
the event of
nonperformance by the
borrowers is equivalent to
the
total outstanding balance of the residential mortgage loans serviced with recourse and
interest, if applicable. During the quarter and
six
months
ended
June
30,
2025,
the
repurchased
$
0.5
million
and
$
0.8
of
unpaid
balance in mortgage loans subject
to the credit recourse provisions
(June 30, 2024
$
0.5
1.1
million, respectively).
In
of nonperformance
by the
borrower,
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
underlying a
defaulted mortgage loan are less
than the outstanding principal balance of
the loan plus any uncollected interest
advanced and the
costs of holding
and disposing the related
property. At
June 30, 2025,
the Corporation’s liability
established to cover
the estimated
credit loss exposure related to loans sold or serviced
with credit recourse amounted to $
The following table shows the changes in the Corporation’s liability of estimated losses related to loans serviced with credit recourse
provisions during the quarters and six months ended
June 30, 2025 and 2024.
Balance as of beginning of period
$
2,397
$
4,353
$
2,611
$
4,211
Provision (benefit) for recourse liability
(205)
(204)
(375)
Net charge-offs
(21)
(91)
(65)
(193)
Balance as of end of period
$
2,171
$
4,058
$
2,171
$
4,058
From time
to
time, the
Corporation sells
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
the
borrowers. At
June
30,
Corporation serviced $
8.6
billion in mortgage loans for third-parties, including the loans serviced with credit recourse (December 31,
9.0
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
and guarantees
programs. However,
in the
meantime, the
Corporation must
absorb the
cost
of the
funds
it
time the
advance is
outstanding. The
Corporation must
also bear
the costs
of attempting
to collect
on delinquent
and
defaulted
loans.
In
if
a
defaulted
loan
is
not
cured,
the
loan
would
be
canceled
as
part
of
the
foreclosure proceedings
and the
Corporation would
not receive
any future
servicing income
to that
loan. At
2025,
the
outstanding balance
of
funds
advanced
by
the
Corporation under
such
loan servicing
agreements was
$
million
31,
$
To
the
extent
the
loans
the
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.
Inc. Holding
Company (“PIHC”) fully
and unconditionally guarantees
certain borrowing
obligations issued by
certain of
its
% owned consolidated subsidiaries amounting to $
million at June 30, 2025 and December 31, 2024, respectively. In addition,
at both June
30, 2025 and December
31, 2024, PIHC fully
and unconditionally guaranteed on a
subordinated basis $
million of
capital securities
(trust preferred
securities) issued
by wholly-owned
issuing trust
entities to
the extent
set forth
in the
guarantee agreement. Refer to
Note 17 to
the Consolidated Financial Statements
in the 2024
Form 10-K for
further information on
the trust preferred securities.
Note 20 – Commitments and contingencies
Off-balance sheet risk
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
to
credit
loss
in
the
event
of
nonperformance
by
the
other
party
to
the
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:
Commitments to extend credit:
Credit card lines
$
6,201,145
$
5,599,823
Commercial lines of credit
4,271,702
3,971,331
Construction lines of credit
1,114,750
1,131,824
Other consumer unused credit commitments
271,638
260,121
Commercial letters of credit
10,284
5,002
Standby letters of credit
124,831
144,845
Commitments to originate or fund mortgage loans
17,556
29,604
At June
and December
31, 2024,
maintained a
reserve of
$
million and
$
million, respectively,
for
potential losses associated with unfunded loan commitments
related to commercial and construction lines of
credit.
Other commitments
At June
2024, the
Corporation also maintained
other non-credit
commitments for $
million, 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
general trends
of the
economy and,
in particular,
the residential
and commercial
real estate
markets. The concentration
of the Corporation’s
operations in Puerto Rico
exposes it to
greater risk than other
banking companies
with a wider geographic base. Its
asset and revenue composition by geographical area
is presented in Note 32
to the Consolidated
Puerto
Rico
has
faced
fiscal
and
challenges
for
over
a
decade.
In
to
such
challenges,
the
U.S.
Congress
enacted
PROMESA
in
2016,
which,
among
other
things,
the
Board
and
a
framework
for
the
of
the
debts
of
the
Commonwealth,
its
and
municipalities.
The
Commonwealth
and
several
of
its
instrumentalities have
availed themselves
of debt
restructuring proceedings
under PROMESA.
As of
the date
of this
report, while
municipalities have been designated as covered entities under PROMESA, no municipality has commenced or has been authorized
by the Oversight Board to commence, any such debt
restructuring proceeding under PROMESA.
At
June
30,
2025,
the
direct
to
the
Puerto
Rico
and
its
instrumentalities and
totaled
$
of
which
$
million
were
($
million
and
$
million
at
31,
2024).
The
Corporation’s exposure at
included up to
$
47.4
million in Automated Clearing
House (“ACH”) transaction settlement
exposure, none of
which was outstanding. Of
the amount outstanding,
$
million consists of
loans and $
million are securities
($
million at
Substantially all of
the amount outstanding
at June 30,
2025 and December
31, 2024 were obligations from various Puerto Rico municipalities. In most cases, these were “general obligations” of a municipality,
to
which
the
has
pledged
its
good
faith,
credit
and
unlimited
taxing
power,
or
“special
obligations”
of
a
municipality,
to
which
the
has
pledged
other
revenues.
At
June
30,
2025,
%
of
the
Corporation’s exposure
to municipal loans
and securities was
concentrated in the
municipalities of San
Juan, Guaynabo,
Carolina
and Caguas.
The following table details the loans and investments representing the Corporation’s direct exposure to
the Puerto Rico government
according to their maturities as of June 30, 2025
:
Investment
Portfolio
Loans
Total Outstanding
Total Exposure
Central Government
$
$
$
$
47,403
Total Central
47,443
Municipalities
2,540
12,764
15,304
17,304
7,885
147,033
154,918
154,918
146,732
147,387
147,387
44,582
44,582
44,582
Total Municipalities
11,080
351,111
362,191
364,191
Total Direct Government
Exposure
$
11,123
$
351,111
$
362,234
$
411,634
at June
the Corporation had
$
loans insured
or securities issued
by Puerto
Rico governmental
entities but for
which the principal
repayment is non-governmental
($
million at December
31, 2024). These
$
million
in
loans
insured
by
the
Puerto
Rico
Housing
Finance
Authority
a
governmental
instrumentality
that
has
been
designated
as
a
covered
entity
under
PROMESA
31,
$
These
are secured
by first
mortgages on
residential properties
and the
HFA
insurance covers
losses in
the
event of
a borrower default
and upon
the satisfaction
of certain
other conditions. The
Corporation also had
at June
$
bonds issued by
HFA which
are secured by
second mortgage loans
on Puerto Rico
residential properties, and
HFA also provides
insurance to cover losses in the
event of a borrower default and
upon the satisfaction of certain other
2024 -
$
million). In
that the
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
will
depend, among
other factors,
on
the
of
HFA
at
the
time
such
become
due
and
payable. The
Corporation does
not consider
the
government guarantee
when
estimating the
credit
losses
with
this
portfolio.
Although
the
Governor
is
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.
commercial loan
portfolio also
includes loans
to
private borrowers
who
are service
providers, lessors,
suppliers or
have
other relationships with the government. These
borrowers could be negatively affected by
the Commonwealth’s fiscal crisis and
the
ongoing
Title
III
under
PROMESA.
Similarly,
and
loan
include
loans
to
and
retirees,
which
could
also
be
by
fiscal
such
as
employee
layoffs
or
furloughs or reductions in pension benefits.
In
$
2.3
billion
of
mortgages
and
$
83.1
million
loans
were
insured
or
by
the
U.S.
Government or its agencies at June 30,
2025 (compared to $
2.1
87.4
million, respectively, at December 31,
2024). The
Corporation also had U.S. Treasury and obligations from the U.S.
Government, its agencies or government sponsored
entities within
the
of
and
as
described
in
Note
and
to
the
Statements.
At
June
30,
Corporation had
in
the
Virgin
Islands
(the
“USVI”) and
had
$
million
in
direct
exposure to USVI government
entities (December 31, 2024
- $
million). The USVI has
been experiencing a number of
fiscal and
economic challenges that could adversely affect the ability
of its public corporations and instrumentalities
to service their outstanding
debt obligations.
2025, the Corporation had
operations in the British
Virgin Islands (“BVI”)
and it had
a loan portfolio
amounting to $
million comprised
of various
retail and
commercial clients,
a loan
portfolio of
$
million at
- At
June 30, 2025, the Corporation had
no
significant exposure to a single borrower
in the BVI.
FDIC Special Assessment
On
November 16,
2023, the
Federal Deposit
Insurance Corporation
(“FDIC”)
imposed a
special
assessment (the
“FDIC Special
Assessment”) amount to
recover the losses
to the
deposit insurance fund
resulting from the
FDIC’s funds
used, in March
2023, in
connection with the systemic risk exception, to the least-cost resolution
test, under the Federal Deposit Insurance Act to manage the
receiverships of several failed banks. In connection with this assessment, the Corporation accrued $
71.4
million, $
45.3
million net of
tax, in the fourth quarter of 2023, representing
the full amount of the assessment.
During the first quarter of 2024, the Corporation recorded an additional expense of $
14.3
million, $
9.1
million net of tax, to reflect the
FDIC's higher loss estimate communicated
by the FDIC. The
special assessment amount and collection
period may change as
the
estimated loss is periodically adjusted or if the total amount
collected varies.
Legal Proceedings
The nature of Popular’s
business ordinarily generates claims, litigation, arbitration,
regulatory and governmental investigations, and
legal
and
administrative
cases
and
(collectively,
“Legal
Proceedings”).
Popular’s
Legal
may
involve
various lines
and include
claims relating
to contract,
torts, consumer
protection, securities,
antitrust, employment,
tax
and
other
laws.
The
recovery
sought
in
Legal
may
include
substantial
or
indeterminate
compensatory
damages,
punitive
damages,
injunctive
relief,
or
recovery
on
a
class-wide
basis.
When
the
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
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
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 $
to approximately $
7.1
million as of
June
30,
In
certain
cases, management
cannot
reasonably estimate
the
possible
loss
at
this
time.
Any
estimate involves
judgment,
given
the
varying
stages
of
the
Legal
(including
the
fact
that
many
of
them
are
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,
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
coverage,
believes
that
the
amount
it
has
already
accrued
is
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
of unexpected future
developments, it is
possible that
the ultimate
resolution of
these matters
in a
reporting period, if
unfavorable, could have
a material
adverse effect
on
the Corporation’s consolidated financial position for that period.
Note 21 – Non-consolidated variable interest
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
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
involved with
various special
purpose entities
mainly in
guaranteed mortgage
securitization transactions,
GNMA
and
FNMA.
The
has
also
engaged
in
securitization
with
FHLMC,
but
considers
its
exposure in the form of servicing fees and servicing advances not to be significant
at June 30, 2025
.
These special purpose entities
are deemed
to be
VIEs since
they lack
equity investments
at risk.
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
not required to
provide additional financial
support to
any of
the variable
interest entities
to which
it has
transferred
the
assets.
The
to
the
extent
retained,
are
in
the
of
Condition
as
or
trading
The
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
holds
interests
in
these
VIEs
in
the
form
of
agency
and
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
to
the
for
debt securities outstanding at
2024, which are
classified as available-for-sale
and
trading
in
the
of
Condition.
In
the
holds
interests
in
the
form
of
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 carrying
amount and
classification of
the assets
variable interests
in
non-consolidated VIEs
and the
maximum exposure
to loss
as a
result of
involvement as
servicer of
GNMA and
FNMA loans at June 30, 2025 and December 31,
Assets
Servicing assets:
$
79,881
$
84,356
Total servicing
assets
$
79,881
$
84,356
Other assets:
Servicing advances
$
5,598
$
6,112
Total other assets
$
5,598
$
6,112
$
85,479
$
90,468
Maximum exposure to loss
$
85,479
$
90,468
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 $
6.3
billion at June 30, 2025 (December 31, 2024 -
$
6.6
determined that
the maximum
loss includes
the fair
the MSRs
and the
assumption that
the
servicing advances at June 30, 2025 and December 31, 2024, will not be recovered. The agency debt securities are not included as
part of the maximum exposure to loss since they
are guaranteed by the related agencies.
ASU 2009-17 requires that an ongoing primary beneficiary assessment should be made to determine whether the Corporation is the
primary beneficiary of any of the VIEs it is
involved with. The conclusion on the assessment of these non-consolidated VIEs has not
changed
since
their
initial
evaluation.
The
concluded
that
it
is
still
not
the
primary
beneficiary
of
these
VIEs,
and
therefore, these VIEs are not required to be consolidated
in the Corporation’s financial statements at June 30, 2025.
Note 22 – Related party transactions
Centro Financiero BHD, S.A.
At June 30, 2025, 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.
$
13.0
million in equity
pickup (June 30,
17.4
million), including the
net impact of
$
19.9
million from net
earnings (June 30,
22.0
million), offset by ($
6.9
) million recorded through Other Comprehensive Income (June 30, 2024 - ($
4.6
) million) related
to
foreign
currency
translation adjustments
and
changes
in
the
of
for
sale
At
June
30,
2025,
the
investment in BHD had a carrying amount of
$
232.5
239.5
million) and the Corporation received $
million in cash dividend distributions during the
six months ended June 30, 2025 (June 30, 2024 - $
19.4
Note 23 – Fair value measurement
ASC Subtopic
820-10 “Fair
Value
Measurements and
Disclosures” establishes
a fair
value hierarchy
that prioritizes
the inputs
to
valuation techniques
used to
measure fair
value into
three levels
in order
to increase
consistency and
comparability in
measurements and disclosures. The hierarchy is broken
down into three levels based on the reliability
of inputs as follows:
Level
- Unadjusted
quoted prices
in
active markets
for identical
assets
or liabilities
that
the
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
Level 1
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
maximizes
the
use
of
observable
inputs
and
minimizes
the
use
of
unobservable
inputs
by
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
employs
internally-developed
models
that
use
market-based
inputs
yield
curves, interest rates,
volatilities, and credit
curves, among others.
Valuation
adjustments are limited
to those necessary
to ensure
that the financial instrument’s
fair value is adequately representative of
the price that would
be received or paid
in the marketplace.
These adjustments include amounts that reflect counterparty credit quality,
the Corporation’s credit standing, constraints on liquidity
and unobservable parameters that are applied consistently.
There have been no changes in the
Corporation’s methodologies used
to estimate the fair value of assets and liabilities from
those disclosed in the 2024 Form 10-K.
The estimated fair
value may
be subjective in
nature and may
involve uncertainties and
matters of
significant judgment for
certain
financial instruments. Changes in the underlying assumptions
used in calculating fair value could significantly
affect the results.
Fair Value on a Recurring and Nonrecurring Basis
The following fair value hierarchy tables
present information about the Corporation’s assets
and liabilities measured at fair value
on
a recurring basis at June 30, 2025 and December
31, 2024:
Level 1
Level 2
Level 3
Measured at NAV
Total
RECURRING FAIR VALUE
Assets
Debt securities available-for-sale:
$
$
7,503,937
$
$
$
15,412,796
110,432
110,432
4,965,802
4,966,234
Other
$
$
12,580,171
$
1,182
$
$
derivatives:
$
5,813
$
$
$
$
5,823
Collateralized mortgage obligations
22,949
23,033
Other
debt securities, excluding
$
5,813
$
23,624
$
$
$
29,643
$
$
47,009
$
$
$
47,456
103,077
103,077
2,898
2,898
24,792
24,792
$
7,914,672
$
12,678,494
$
104,465
$
$
20,698,078
$
$
$
$
$
Total liabilities measured
$
$
$
$
$
Level 1
Level 2
Level 3
Measured at NAV
Total
RECURRING FAIR VALUE
Assets
Debt securities available-for-sale:
$
$
5,482,939
$
$
$
12,995,110
120,284
120,284
5,127,775
5,128,259
Other
2,250
2,250
$
$
10,730,998
$
2,734
$
$
derivatives:
$
2,814
$
$
$
$
2,824
Collateralized mortgage obligations
29,032
29,116
Other
debt securities, excluding
$
2,814
$
29,752
$
$
$
32,783
$
$
45,664
$
$
$
46,045
108,103
108,103
5,423
5,423
26,023
26,023
$
7,514,985
$
10,837,860
$
111,054
$
$
18,464,280
$
$
$
$
$
Total liabilities measured
$
$
$
$
$
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
tables summarize
the difference
between the
aggregate fair
value
and the
aggregate unpaid
balance
for
mortgage loans originated as held-for-sale measured
at fair value as of June 30, 2025 and December
Aggregate Unpaid
Fair Value
Principal Balance
Difference
Loans held for sale
$
2,898
$
2,832
$
Aggregate Unpaid
Fair Value
Principal Balance
Difference
Loans held for sale
$
5,423
$
5,436
$
(13)
No
loans held-for-sale were 90 or more days past
due or on nonaccrual status as of June 30,
2025 and December 31, 2024.
The fair value information included in the following tables is
not as of period end, but as of
the date that the fair value measurement
was recorded during the
six months ended June
30, 2025 and 2024
and excludes nonrecurring fair
value measurements of assets
no longer outstanding as of the reporting date.
Level 1
Level 2
Level 3
Total
NONRECURRING FAIR VALUE
Assets
Write-downs
Loans
[1]
$
$
$
4,361
$
4,361
$
(91)
[2]
3,919
3,919
(1,573)
Other foreclosed assets
[2]
(46)
at fair value on a nonrecurring basis
$
$
$
8,442
$
8,442
$
(1,710)
[1] Relates mainly to certain impaired collateral dependent loans.
The impairment was measured based on the fair value
of the collateral, which is
derived from appraisals that take into consideration prices
in observed transactions involving similar assets in similar
locations. Costs to sell are
[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
Level 1
Level 2
Level 3
Total
NONRECURRING FAIR VALUE
Assets
Write-downs
Loans
[1]
$
$
$
2,039
$
2,039
$
(329)
[2]
3,028
3,028
(38)
[3]
4,426
4,426
(1,602)
Other foreclosed assets
[3]
(46)
at fair value on a nonrecurring basis
$
$
3,028
$
6,676
$
9,704
$
(2,015)
[1] Relates mainly to certain impaired collateral dependent loans.
The impairment was measured based on the fair value
of the collateral, which is
derived from appraisals that take into consideration prices
in observed transactions involving similar assets in similar
locations. Costs to sell are
[2] Relates to a quarterly valuation on loans held-for-sale.
Costs to sell are excluded from the reported fair value amount.
[3] Represents the fair value of foreclosed real estate and
other collateral owned that were written down to their fair
value. Costs to sell are
The following tables present the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarters
and six months ended June 30, 2025 and 2024.
Quarter ended June 30, 2025
MBS
Other
MBS
Other
as debt
account
debt
Total
rights
assets
Balance at March 31, 2025
$
$
$
$
$
104,743
$
106,161
(5)
(1,954)
(1,959)
(25)
(25)
$
$
$
$
$
103,077
$
104,465
$
$
$
$
$
$
MBS
Other
MBS
Other
as debt
account
debt
Total
rights
assets
Balance at January 1, 2025
$
$
2,250
$
$
$
108,103
$
111,054
(11)
(5,524)
(5,535)
Gains (losses) included in OCI
(2)
(2)
(50)
(50)
Transfers out of Level 3
(1,500)
(1,500)
$
$
$
$
$
103,077
$
104,465
$
$
$
$
$
(977)
$
(961)
Quarter ended June 30, 2024
MBS
Other
Other
MBS
as debt
Total
rights
assets
Balance at March 31, 2024
$
$
2,000
$
$
$
114,964
$
117,821
(8)
(1,945)
(1,953)
Gains (losses) included in OCI
(1)
(1)
(25)
(25)
$
$
2,000
$
$
$
113,386
$
116,209
$
$
$
$
$
$
MBS
Other
Other
CMOs
as debt
MBS
trading account
Total
rights
assets
Balance at January 1,
$
$
2,500
$
$
$
$
118,109
$
121,499
(500)
(9)
(5,384)
(5,893)
(25)
(5)
(28)
(58)
$
$
2,000
$
$
$
$
113,386
$
116,209
Changes in unrealized gains (losses)
included in earnings relating to assets
still held at June 30, 2024
$
$
(500)
$
$
$
$
(702)
$
(1,190)
Gains and losses (realized and
unrealized) included in earnings for the quarters
and six months ended June 30,
2025 and 2024 for
Level 3 assets and liabilities included in the
previous tables are reported in the Consolidated Statement
of Operations as follows:
Quarter ended June 30, 2025
$
(1,954)
$
$
(5,524)
$
(977)
Trading account profit (loss)
(5)
(11)
Total
$
(1,959)
$
$
(5,535)
$
(961)
Quarter ended June 30, 2024
$
(1,945)
$
$
(5,384)
$
(702)
Trading account profit (loss)
(8)
(9)
(500)
(500)
Total
$
(1,953)
$
$
(5,893)
$
(1,190)
tables include
quantitative information
about significant
unobservable inputs
used to
derive the
of Level
instruments, excluding those instruments
for which the
unobservable inputs were not
developed by the
Corporation such as
prices
of prior transactions and/or unadjusted third-party pricing
sources at June 30, 2025 and 2024.
Fair value at
Valuation technique
Unobservable inputs
Weighted average (range) [1]
Other - trading
$
Discounted cash flow model
Weighted average life
years
Yield
.0%
10.8
%
$
4,361
[2]
External appraisal
Haircut applied on
external appraisals
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.
Fair value at
Valuation technique
Unobservable inputs
Weighted average (range) [1]
Other - trading
$
Discounted cash flow model
Weighted average life
2.3
years
Yield
.0%
10.8
%
$
2,039
[2]
External appraisal
Haircut applied on
external appraisals
.0%
[1]
Weighted average of significant unobservable inputs
used to develop Level 3 fair value measurements
were calculated by relative fair value.
[2]
Loans held-in-portfolio in which haircuts were not applied
to external appraisals were excluded from this table.
Note 24 – Fair value of financial instruments
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
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.
values reflected
herein have
been determined
the prevailing
rate environment at
31, 2024, as applicable. In different interest rate environments,
fair value estimates can differ significantly, especially for certain fixed
rate
instruments.
In
the
fair
values
presented
do
not
attempt
to
the
value
of
the
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
amounts of
instruments disclosed
do not
represent management’s
estimate of the underlying value of the Corporation.
amount
Level 1
Level 2
Level 3
at NAV
Financial Assets:
$
400,631
$
400,631
$
$
$
$
400,631
6,330,415
10,371
[1]
29,643
5,813
23,624
29,643
[1]
12,580,171
1,182
Debt securities held-to-maturity:
$
$
$
$
$
$
48,598
6,820
42,361
49,181
Collateralized mortgage obligation-federal agency
1,510
1,312
1,312
Securities in wholly owned statutory business trusts
5,960
5,960
5,960
$
$
$
7,513,156
$
42,361
$
$
Equity securities:
FHLB stock
$
66,152
$
$
66,152
$
$
$
66,152
FRB stock
101,252
101,252
101,252
Other investments
54,987
47,009
8,047
55,503
Total equity securities
$
222,391
$
$
214,413
$
8,047
$
$
222,907
$
2,898
$
$
2,898
$
$
$
2,898
37,415,693
36,611,781
36,611,781
103,077
103,077
103,077
24,792
24,792
24,792
amount
Level 1
Level 2
Level 3
at NAV
Financial Liabilities:
$
$
$
$
$
$
9,378,576
9,378,576
$
$
$
66,997,281
$
$
$
66,997,281
$
56,043
$
$
56,049
$
$
$
56,049
[2]
550,000
550,000
550,000
Notes payable:
FHLB advances
$
214,200
$
$
211,087
$
$
$
211,087
Unsecured senior debt securities
395,865
416,044
416,044
Junior subordinated deferrable interest debentures
(related to trust preferred securities)
198,386
187,515
187,515
$
808,451
$
$
814,646
$
$
$
814,646
$
23,349
$
$
23,349
$
$
$
23,349
[1]
Refer to Note 23 to the Consolidated Financial Statements
for the fair value by class of financial asset and its hierarchy
level.
[2]
Refer to Note 15 to the Consolidated Financial Statements
for the composition of other short-term borrowings.
amount
Level 1
Level 2
Level 3
at NAV
Financial Assets:
$
419,638
$
419,638
$
$
$
$
419,638
6,371,180
9,768
[1]
32,783
2,814
29,752
32,783
[1]
10,730,998
2,734
Debt securities held-to-maturity:
$
$
$
$
$
$
51,865
6,866
44,711
51,577
Collateralized mortgage obligation-federal agency
1,518
1,304
1,304
Securities in wholly owned statutory business trusts
5,959
5,959
5,959
$
$
$
7,637,953
$
44,711
$
$
Equity securities:
FHLB stock
$
55,786
$
$
55,786
$
$
$
55,786
FRB stock
100,304
100,304
100,304
Other investments
52,076
45,664
6,528
52,573
Total equity securities
$
208,166
$
$
201,754
$
6,528
$
$
208,663
$
5,423
$
$
5,423
$
$
$
5,423
36,361,628
35,652,539
35,652,539
108,103
108,103
108,103
26,023
26,023
26,023
amount
Level 1
Level 2
Level 3
at NAV
Financial Liabilities:
$
$
$
$
$
$
9,012,882
8,795,803
8,795,803
$
$
$
64,667,266
$
$
$
64,667,266
$
54,833
$
$
54,845
$
$
$
54,845
[2]
225,000
225,000
225,000
Notes payable:
FHLB advances
$
302,722
$
$
295,023
$
$
$
295,023
Unsecured senior debt securities
395,198
415,148
415,148
Junior subordinated deferrable interest debentures
(related to trust preferred securities)
198,373
189,758
189,758
$
896,293
$
$
899,929
$
$
$
899,929
$
22,832
$
$
22,832
$
$
$
22,832
[1]
Refer to Note 23 to the Consolidated Financial Statements
for the fair value by class of financial asset and its hierarchy
level.
[2]
Refer to Note 15 to the Consolidated Financial Statements
for the composition of other short-term borrowings.
Refer
to
Note
to
the
for
the
notional
amount
of
commitments
to
extend
credit,
which
represents the unused portion of
credit facilities granted to customers,
and letters of credit,
which represent the contractual amount
that is required to be paid in the event of nonperformance, at June
30, 2025 and December 31, 2024. The fair value of commitments
to
extend credit
and
letters
of
credit,
which
are
based
on
the
fees
charged
to
enter
into
those
agreements, are
not
material
to
Popular’s financial statements.
Note 25 – Net income per common share
The following table sets
forth the computation of
net income per common
share (“EPS”), basic and
diluted, for the quarters
and six
months ended June 30, 2025 and 2024:
Six
$
210,440
$
177,789
$
387,942
$
281,072
Preferred stock dividends
(353)
(353)
(706)
(706)
Net income applicable to common stock
$
210,087
$
177,436
$
387,236
$
280,366
Average common shares outstanding
68,050,361
71,970,773
68,661,851
71,920,254
Average potential dilutive common shares
29,288
21,138
25,808
17,180
Average common shares outstanding - assuming dilution
68,079,649
71,991,911
68,687,659
71,937,434
Basic EPS
$
3.09
$
2.47
$
5.64
$
3.90
Diluted EPS
$
3.09
$
2.46
$
5.64
$
3.90
For the quarters
and six months ended June 30, 2025 and 2024, the
Corporation calculated the impact of potential dilutive common
shares under the treasury stock method, consistent with the method used for the preparation of the financial statements for the year
ended December 31, 2024. For a discussion of the
calculation under the treasury stock method, refer
to Note 30 of the Consolidated
Financial Statements included in the 2024 Form 10-K.
Note 26 – Revenue from contracts with customers
The
table
the
revenue
streams
from
with
customers
by
segment
for
the
Six
BPPR
BPPR
$
36,194
$
2,632
$
72,650
$
5,230
Other service fees:
Debit card fees
27,707
53,941
Insurance fees, excluding reinsurance
8,719
2,223
16,400
3,910
Credit card fees, excluding late fees and membership
fees
28,145
53,530
Sale and administration of investment products
9,058
18,031
Trust fees
6,879
13,510
Total revenue from
contracts with customers [1]
$
116,702
$
5,400
$
228,062
$
10,288
[1]
The amounts include intersegment transactions of $
0.6
1.2
million, respectively, for the
quarter and six months ended June 30, 2025.
Six
BPPR
BPPR
$
35,055
$
2,471
$
70,071
$
4,897
Other service fees:
Debit card fees [2]
26,976
52,311
Insurance fees, excluding reinsurance
11,708
1,600
22,264
3,446
Credit card fees, excluding late fees and membership
fees [2]
26,125
50,639
Sale and administration of investment products
7,850
15,277
Trust fees
6,923
13,908
Total revenue from
contracts with customers [1]
$
114,637
$
4,639
$
224,470
$
9,568
[1]
The amounts include intersegment transactions of $
2.7
3.3
million, respectively, for the
quarter and six months ended June 30, 2024.
[2]
Effective in the third quarter of 2024, the Corporation
reclassified certain interchange fees, which were
previously included jointly with credit card fees
from common network activity,
as debit card fees. For the quarter and six month period
ended June 30, 2024, interchange fees of $
10.9
22.2
million were reclassified.
Revenue from contracts with
customers is recognized when,
or as, the performance
obligations are satisfied by
the Corporation by
transferring the promised services to the customers based on ASC 606 Revenue
from Contracts with Customers. Revenue streams
identified from contracts with customers, as
listed above, will have certain timing for
recognition based on the nature of
the contract
including when
the obligation is
satisfied and/or services
are rendered. Service
charges on
deposit accounts, debit
card fees,
and
credit card
fees are
recognized at
a point
in time,
occurrence of
an activity
or an
event. Interchange
fees on
debit and
credit
card
are
recognized upon
of
the
payment
transaction. For
more
details
over
nature
and
timing
of
revenue streams from contracts with customers refer to Note 31 on the
2024 Form 10-K for a complete description of the nature and
timing of revenue streams from contracts with customers.
Note 27 – Leases
The
Corporation enters
in
the
of
into
operating and
finance
leases
for
land,
buildings
and
equipment.
These contracts generally do not include purchase options or residual value guarantees.
The remaining lease terms of
0.11
to
29.5
years
considers options
to
extend the
leases for
up
to
years. The
Corporation identifies
leases when
it
has
both the
right to
obtain substantially all of the economic benefits from
the use of the asset and the right to direct
the use of the asset.
recognizes right-of-use
assets (“ROU
assets”) and
lease liabilities
operating and
finance leases
in its
Consolidated Statements of Financial Condition under the caption of other assets and other liabilities, respectively. Refer to Note 12
and
Note
to
the
Statements,
for
on
the
balances of
these
lease
assets
and
liabilities.
The Corporation uses the incremental
borrowing rate for purposes of
discounting lease payments for operating and
finance leases,
since it
does not have
enough information to
determine the rates
implicit in the
leases. The discount
rates are based
on fixed-rate
and
fully
amortizing
of
its
banking
that
are
collateralized.
For
leases
held
by
non-banking
subsidiaries, a credit spread is added to this rate
based on financing transactions with a
similar credit risk profile.
The following table presents the undiscounted
cash flows of operating and finance leases for
each of the following periods:
Remaining
Later
Years
Total Lease
Payments
Less: Imputed
Total
Operating Leases
$
14,190
$
21,975
$
16,790
$
14,278
$
12,184
$
35,255
$
114,672
$
(16,097)
$
98,575
Finance Leases
2,242
4,222
2,927
2,592
2,415
9,530
23,928
(2,612)
21,316
The following table presents the lease cost recognized
by the Corporation in the Consolidated
Statements of Operations as follows:
Six
Finance lease cost:
Amortization of ROU assets
$
$
$
1,493
$
1,497
Interest on lease liabilities
Operating lease cost
7,599
7,650
15,148
15,338
Short-term lease cost
Variable lease cost
Sublease income
(20)
(21)
(40)
(41)
Total lease cost
[1]
$
8,819
$
8,794
$
17,572
$
17,632
[1]
Total lease cost
is recognized as part of net occupancy expense.
The
table
supplemental
cash
flow
and
other
related
related
to
and
finance
leases.
Cash paid for amounts included in the measurement of
lease liabilities:
Operating cash flows from operating leases
$
15,610
$
15,689
Operating cash flows from finance leases
Financing cash flows from finance leases
1,829
1,774
ROU assets obtained in exchange for new lease obligations:
$
5,832
$
1,463
Weighted-average remaining lease term:
7.5
years
7.2
years
Finance leases
7.9
years
8.0
years
Weighted-average discount rate:
3.5
%
3.3
%
Finance leases
3.5
%
3.8
%
Note 28 – Pension and postretirement benefits
The
has
a
non-contributory
defined
benefit
pension
plan
and
supplementary
pension
benefit
restoration
plans
for
regular employees of
certain of its
subsidiaries (the “Pension
Plans”). The accrual
of benefits under
the Pension Plans
is frozen to
all
participants.
The
also
certain
postretirement
health
care
benefits
for
retired
of
certain
subsidiaries (the “OPEB Plan”).
The components of net periodic cost for the
Pension Plans and the OPEB Plan for the periods presented
were as follows:
Personnel Cost:
Service cost
$
$
$
$
Interest cost
7,411
7,558
1,291
1,421
Expected return on plan assets
(8,069)
(8,594)
Amortization of prior service cost/(credit)
Amortization of net loss (gain)
3,449
4,166
(1,177)
(548)
Total net periodic
pension cost
$
2,791
$
3,130
$
$
Personnel Cost:
Service cost
$
$
$
$
Interest cost
14,821
15,117
2,582
2,843
Expected return on plan assets
(16,138)
(17,188)
Amortization prior service cost/(credit)
Amortization of net loss
6,899
8,332
(2,354)
(1,096)
Total net periodic
pension cost
$
5,582
$
6,261
$
$
1,810
The
paid
the
contributions
to
the
plans
for
the
six
months
ended
June
30,
and
expects
to
pay
the
following contributions for the year ending December
31, 2025.
For the year ending
December 31, 2025
$
$
$
3,223
$
5,428
Note 29 - Stock-based compensation
Incentive Plan
On May 12,
2020, the stockholders of
the Corporation approved the
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
Incentive Plan
to employees
becomes vested
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
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
equally:
the
Relative
Total
Shareholder
Return
(“TSR”)
and
the
Absolute
Return
on
Average
Common Equity
(“ROATCE”). The
TSR metric
is a
market condition
under ASC
For equity
settled awards
market
conditions, the
is determined
as of
the grant
date and
is not
subsequently revised
actual performance.
The
ROATCE metric
is a performance condition under
ASC 718.
The fair value is
determined based on the probability of
achieving the
ROATCE
goal as
of each
reporting period.
The TSR
and ROATCE
metrics are
equally weighted
and work
independently.
The
number of shares that will ultimately vest ranges from 50% to a 150% target based on both market (TSR) and performance
(ROATCE) conditions. The performance shares will 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
table
summarizes
the
stock
and
shares
activity
under
the
Incentive
Plan
for
members
of
management.
(Not in thousands)
Shares
Weighted-Average
Grant Date Fair
Value
Non-vested at December 31, 2023
299,896
$
58.20
Granted
242,474
86.62
Performance Shares Quantity Adjustment
(18,650)
87.79
Vested
(267,873)
74.26
(7,939)
50.68
Non-vested at December 31, 2024
247,908
$
66.86
Granted
241,762
100.67
Performance Shares Quantity Adjustment
48,923
92.33
Vested
(277,721)
90.69
(5,515)
60.68
Non-vested at June 30, 2025
255,357
$
77.90
During
the
quarter
ended
June
30,
2025,
121,649
shares
of
stock
(June
30,
–
97,732
)
were
awarded
to
management under the Incentive
Plan. During the
quarters ended June 30,
2025 and 2024,
no
performance shares were awarded
to management under the Incentive Plan.
During the six months ended June 30, 2025,
194,268
shares of restricted stock (June 30,
2024 –
175,591
) and
47,494
performance shares (June 30, 2024 -
65,225
) were awarded to management under the
Incentive Plan.
During the quarter ended June 30, 2025, the Corporation recognized
$
6.9
million of restricted stock expense related to management
incentive awards, with a tax benefit of $
1.0
4.1
million, with a tax benefit of $
1.0
million). For the six months
ended
June
30,
2025,
the
$
14.4
million
of
stock
expense
related
to
incentive
awards, with a tax benefit of $
1.6
10.5
million, with a tax benefit of $
1.7
million). For the six months ended
June 30, 2025, the fair market value
of the restricted stock and performance shares vested
was $
20.0
million on the grant date and
$
27.4
million
at
vesting date.
This
differential
triggers
a
windfall of
$
2.7
million
that
was recorded
as
a
reduction on
income
tax
expense. During the
quarter ended June
30, 2025, the Corporation
recognized $
0.8
million of performance shares
expense, with a
tax benefit of $
thousand due to performance shares target
adjustment (June 30, 2024 -
$
(0.9)
million, with a tax benefit
of $
(55)
thousand).
For the six months ended June
30, 2025, the Corporation recognized $
4.2
million of performance shares expense, with
a tax benefit
of $
0.5
million (June 30,
4.1
million, with a
$
0.3
The total unrecognized compensation
cost related to non-vested restricted stock awards
and performance shares to members of management
at June 30, 2025 was $
17.6
million and is expected to be recognized over a
weighted-average period of
1.65
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, 2023
$
Granted
25,462
89.51
Vested
(25,462)
89.51
Non-vested at December 31, 2024
$
Granted
22,050
99.42
Vested
(2,937)
92.45
Non-vested at June 30, 2025
19,113
$
99.42
The
equity
awards
granted to
members of
the Board
of
Directors of
Inc.
(the
“Directors”) after
May
will
vest
and
become non-forfeitable on the first anniversary of the grant date of
such award. Equity awards granted to the Directors may be
paid
in either common stock or RSUs, at each Director’s
election. If RSUs are elected, the Directors may defer the delivery of the shares
of common stock underlying
the RSUs award until
their retirement. To
the extent that cash
dividends are paid on
outstanding common stock, the Directors
will receive an additional number of RSUs
that reflect a reinvested dividend equivalent.
During the quarter ended June 30, 2025,
17,816
RSUs and
2,688
shares of restricted stock were granted to the Directors (June 30,
20,411
RSUs
and
1,392
shares
of
unrestricted stock)
and the
Corporation recognized
$
0.4
million
of
expense related
to
these shares with
a tax benefit
of $
thousand (June 30,
1.9
million with a
$
0.4
million). For the
granted
19,362
RSUs and
2,688
shares of restricted stock
to the Directors (June
30, 2024 -
21,606
RSUs
and
1,392
shares
of
unrestricted
stock)
and
the
$
0.7
million
of
expense
related
to
these
shares, with
a tax
benefit of $
0.1
million, (June
- $
2.1
million, with a
$
0.4
million). The fair
value at vesting
date of the RSUs vested during the six months
ended June 30, 2025 for the Directors was
$
2.2
Note 30 – Income taxes
The table below presents a reconciliation of
the statutory income tax rate to the effective income tax
rate:
Amount
income
Amount
income
Computed income tax expense at statutory rates
$
96,871
37.5
%
$
81,843
37.5
%
Net benefit of tax exempt income
(45,374)
(17.6)
(33,220)
(15.2)
Effect of income subject to preferential tax rate
(606)
(0.2)
1,272
0.6
Deferred tax asset valuation allowance
4,050
1.6
(235)
(0.1)
Difference in tax rates due to multiple jurisdictions
(2,282)
(0.9)
(4,456)
(2.1)
Other tax benefits
(4,500)
(2.1)
State and local taxes
0.1
2,204
1.0
Others
(5,189)
(2.0)
(2,449)
(1.1)
$
47,884
18.5
%
$
40,459
18.5
%
Amount
income
Amount
income
Computed income tax expense at statutory rates
$
180,333
37.5
%
$
141,412
37.5
%
Net benefit of tax exempt income
(85,329)
(17.7)
(61,979)
(16.4)
Effect of income subject to preferential tax rate
(1,519)
(0.3)
(148)
Deferred tax asset valuation allowance
7,932
1.6
2,328
0.6
Difference in tax rates due to multiple jurisdictions
(5,257)
(1.1)
(5,129)
(1.4)
Other tax benefits
(4,500)
(1.2)
Tax on intercompany
[1]
24,325
6.4
U.S., States, and local taxes
4,450
0.9
3,240
0.9
Others
(7,663)
(1.6)
(3,522)
(0.9)
$
92,947
19.3
%
$
96,027
25.5
%
[1]
16.5
million of out-of-period adjustment recorded during the
first quarter of 2024.
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
liabilities at
June 30, 2025, and December 31, 2024, were
as follows:
PR
US
Total
Deferred tax assets:
Tax credits available
for carryforward
$
4,861
$
32,925
$
37,786
Net operating loss and other carryforward available
59,441
594,642
654,083
Postretirement and pension benefits
28,197
28,197
245,070
28,339
273,409
Deferred loan origination fees/cost
3,005
(2,702)
Depreciation
7,700
7,551
15,251
FDIC-assisted transaction
152,665
152,665
Lease liability
27,417
13,953
41,370
Unrealized net loss on investment securities
202,822
15,914
218,736
Difference in outside basis from pass-through entities
53,043
53,043
Mortgage Servicing Rights
14,561
14,561
36,015
8,743
44,758
tax assets
834,797
699,365
1,534,162
Deferred tax liabilities:
Intangibles
90,392
57,493
147,885
Right of use assets
24,908
12,280
37,188
Loans acquired
17,471
17,471
7,138
7,567
tax liabilities
139,909
70,202
210,111
Valuation allowance
76,804
386,914
463,718
Net deferred tax asset
$
618,084
$
242,249
$
860,333
PR
US
Total
Deferred tax assets:
Tax credits available
for carryforward
$
4,861
$
24,728
$
29,589
Net operating loss and other carryforward available
52,211
610,279
662,490
Postretirement and pension benefits
27,786
27,786
247,153
24,415
271,568
Depreciation
7,700
7,229
14,929
FDIC-assisted transaction
152,665
152,665
Lease liability
25,167
16,451
41,618
Unrealized net loss on investment securities
252,411
20,996
273,407
Difference in outside basis from pass-through entities
50,144
50,144
Mortgage Servicing Rights
14,475
14,475
41,127
9,072
50,199
tax assets
875,700
713,170
1,588,870
Deferred tax liabilities:
Intangibles
88,351
55,926
144,277
Right of use assets
22,784
14,454
37,238
Deferred loan origination fees/cost
(1,880)
2,085
Loans acquired
18,415
18,415
6,799
7,228
tax liabilities
134,469
72,894
207,363
Valuation allowance
69,837
386,914
456,751
Net deferred tax asset
$
671,394
$
253,362
$
924,756
The net
assets
shown in
the table
above at
2025, is
reflected in
Condition as $
862.1
million in net
deferred tax assets
in the “Other assets”
caption (December 31,
926.3
million) and $
1.8
million in deferred tax liabilities in the “Other liabilities” caption
(December 31, 2024 - $
1.6
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
June
30,
2025,
the
net
tax
assets
of
the
U.S.
to
$
629.1
million
with
a
of
$
386.9
million, for
net
assets
after valuation
allowance of
$
242.2
million. The
Corporation evaluates
on
a
quarterly
basis the
realization of
the deferred
tax asset
by taxing
jurisdiction.
The U.
S. operations
sustained profitability
for the
last three
years
and
better
results
than
projected
for
the
period
ended
June
30,
These
historical
results
are
objectively
verifiable positive evidence, evaluated together
with the positive evidence
of stable credit metrics,
in combination with the
length of
the
expiration
of
the
NOLs.
On
the
other
hand,
the
evaluated
the
evidence
accumulated
over
the
years,
including financial results lower than expectations and challenges to the economy due to inflationary pressures that could stem from
U. S. tariff policies and global geopolitical challenges,
in addition to the economic effect of cuts in federal government spending that
could negatively impact U. S. operations’ achieving expected pre-tax
income levels.
As of June 30, 2025, after weighting all positive
and negative evidence,
the Corporation concluded
that it is
more likely than
not that $
242.2
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 earnings
available to
realize the
assets for
the remaining
carryforward period,
together with
the historical
level
of
book
income
by
permanent
differences.
will
continue
to
monitor
and
review
the
U.S.
operation’s
results, including recent earnings trends, the pre-tax earnings
forecast, any new tax initiative, and other factors,
including net income
versus forecast, targeted loan growth, net interest income margin, changes in deposit costs, allowance
for credit losses, charge offs,
non-performing loans
held-in-portfolio (“NPLs”)
inflows
and
non-performing asset
(“NPA”)
balances. Significant
changes
in these
factors or sustainable continuance of financial improvement
could impact the future realization of the deferred
tax assets.
2025, the Corporation’s
net deferred tax
assets related to
its Puerto Rico
operations amounted to
$
618.1
The
Corporation’s Puerto Rico
Banking operation has
a historical record
of profitability.
This is considered
a strong piece
of objectively
verifiable positive evidence that outweighs any
negative evidence considered by Management in
the evaluation of the realization
of
the
tax
assets.
Based
on
this
evidence
and
of
future
taxable
income,
the
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
evidence is
considered
by
Management strong
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 $
76.8
million as of June 30, 2025.
The reconciliation of unrecognized tax benefits, excluding
interest, was as follows:
Balance at January 1
$
1.5
$
1.5
Balance at March 31
$
1.5
$
1.5
Balance at June 30
$
1.5
$
1.5
At June
accrued interest
recognized in the
statement of
financial condition
$
2.5
million
(December 31, 2024 -
$
2.4
million). Management determined that at
June 30, 2025 and December
31, 2024, there was
no
need to
accrue for the payment of
penalties. The Corporation’s policy is to
report interest related to unrecognized tax benefits
in income tax
expense, while the penalties, if any, are reported in other operating expenses
in the Consolidated Statements of Operations.
After consideration
of the
effect on
U.S. federal
tax of
unrecognized U.S.
state tax
benefits, the
total amount
of unrecognized
tax
benefits that if recognized, would affect the Corporation’s effective tax rate, was $
3.0
million at June 30, 2025 (December 31, 2024 -
$
3.0
The amount of
unrecognized tax benefits
may increase or
decrease in the
future for various
reasons including adding amounts
for
current
tax
year
positions,
expiration
of
open
income
tax
returns
due
to
the
statutes
of
limitation,
changes
in
Management’s
judgment about
the level
of uncertainty,
status of
examinations, litigation
and legislative
activity and
the addition
or elimination
of
uncertain tax positions.
The Corporation does not
anticipate a reduction
in the total
amount of unrecognized tax
benefits within the
next 12 months.
The
Corporation and
its subsidiaries
file
returns in
Puerto
U.S. federal
jurisdiction, various
U.S. states
and
political
subdivisions,
and
foreign
jurisdictions.
At
June
30,
2025,
the
years
remain
subject
to
examination
in
the
U.S.
Federal jurisdiction: 2021 and thereafter; and in
the Puerto Rico jurisdiction, 2018 and thereafter.
Note 31 – Supplemental disclosure on the consolidated
statements of cash flows
Additional disclosures on cash flow information and
non-cash activities for the six months ended June
30, 2025 and June 30, 2024
are listed in the following table:
Non-cash activities:
Loans transferred to other real estate
$
14,006
$
25,922
Loans transferred to other property
45,065
38,867
Total loans transferred
to foreclosed assets
59,071
64,789
Loans transferred to other assets
26,604
25,427
Financed sales of other real estate assets
2,580
6,220
Financed sales of other foreclosed assets
29,089
26,894
Total financed sales
of foreclosed assets
31,669
33,114
Financed sale of premises and equipment
29,727
38,715
Transfers from loans held-in-portfolio to
loans held-for-sale
2,662
7,505
Transfers from loans held-for-sale to loans
1,224
2,896
Loans securitized into investment securities
[1]
6,852
4,806
Trades receivable from brokers and counterparties
26,198
Trades payable to brokers and counterparties
593,949
24,603
Net change in receivables from investments maturities
14,377
124,000
Recognition of mortgage servicing rights on securitizations
or asset transfers
Loans booked under the GNMA buy-back option
3,339
3,437
Capitalization of lease right of use asset
9,143
1,946
[1]
Includes loans securitized into trading securities and subsequently
sold before quarter end.
The following table provides a reconciliation of
cash and due from banks, and restricted cash
reported within the Consolidated
Statement of Financial Condition that sum to the total of
the same such amounts shown in the Consolidated
Statement of Cash
Flows.
$
394,211
$
348,170
Restricted cash and due from banks
6,420
11,803
Restricted cash in money market investments
10,371
7,286
Total cash and due
from banks, and restricted cash
[2]
$
411,002
$
367,259
[2]
Refer to Note 4 - Restrictions on cash and due from banks
and certain securities for nature of restrictions.
Note 32 – Segment reporting
The
corporate
structure
consists
of
two
–
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
and components
of net
income, including
segment
revenues and
expenses to
assess performance
and to
manage important
aspects by
each reportable
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
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
name of
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
policies
of
the
individual
are
the
same
as
those
of
the
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
or
the
group
are
also
eliminated in
the
tables presented below.
The tables that follow present the results of operations
and total assets by reportable segments:
BPPR
$
748,712
$
195,668
$
(1,041)
210,237
93,474
(1,041)
538,475
102,194
42,452
6,532
145,685
7,421
164,794
27,387
13,025
2,450
64,226
10,345
37,276
10,344
2,266
[1]
132,004
28,021
421,909
71,196
219,799
31,887
35,256
9,280
$
184,543
$
22,607
$
$
60,926,458
$
14,865,364
$
(120,633)
Inc.
$
943,339
$
1,578
$
(1,045)
$
943,872
302,670
10,698
(1,045)
312,323
640,669
(9,120)
631,549
48,984
(43)
48,941
153,106
16,107
(736)
168,477
192,181
37,174
229,355
15,475
12,887
(254)
28,108
74,571
10,125
84,696
37,858
37,861
12,610
13,039
[1]
160,025
(60,181)
(527)
99,317
493,105
(781)
492,761
251,686
6,593
258,324
44,536
3,277
47,884
$
207,150
$
3,316
$
(26)
$
210,440
$
75,671,189
$
5,786,893
$
(5,392,992)
$
[1]
equipment expense, excluding depreciation, other operating
taxes,
BPPR
$
1,480,600
$
382,060
$
(2,722)
420,233
186,924
(2,722)
1,060,367
195,136
95,964
17,142
283,190
13,564
316,078
52,829
26,084
5,189
128,377
20,433
74,455
1,179
20,038
4,463
[1]
260,758
53,640
826,372
138,133
421,221
53,425
70,699
16,002
$
350,522
$
37,423
$
$
60,926,458
$
14,865,364
$
(120,633)
Total
$
1,859,938
$
3,114
$
(2,182)
$
1,860,870
604,435
21,471
(2,182)
623,724
1,255,503
(18,357)
113,106
(84)
113,022
296,754
25,136
(1,352)
320,538
368,907
73,161
442,068
31,273
24,244
(584)
54,933
148,810
19,554
168,364
75,634
75,642
24,501
25,319
[1]
314,398
(116,583)
(1,350)
196,465
964,505
1,202
(1,934)
963,773
474,646
5,661
480,889
86,701
5,952
92,947
Net income (loss)
$
387,945
$
(291)
$
$
387,942
$
75,671,189
$
5,786,893
$
(5,392,992)
$
[1]
BPPR
$
737,342
$
186,595
$
(2,622)
248,597
100,744
(2,622)
488,745
85,851
50,382
(3,563)
152,354
6,000
145,764
26,062
14,568
3,154
60,256
9,784
38,537
13,317
2,204
[1]
127,106
27,608
399,972
69,677
190,745
25,737
33,540
7,989
$
157,205
$
17,748
$
$
58,464,408
$
14,287,739
$
(264,040)
Inc.
921,315
4,390
(3,798)
921,907
346,719
10,674
(3,798)
353,595
$
574,596
$
(6,284)
$
$
568,312
46,819
(25)
46,794
158,354
10,716
(2,764)
166,306
171,826
25,598
197,424
17,722
20,324
(302)
37,744
70,040
9,712
79,752
39,092
39,096
15,521
15,888
[1]
154,714
(54,854)
(922)
98,938
469,649
1,151
(1,224)
469,576
216,482
3,306
(1,540)
218,248
Income tax expense (benefit)
41,529
(476)
(594)
40,459
$
174,953
$
3,782
$
(946)
$
177,789
$
72,488,107
$
5,828,667
$
(5,471,702)
$
72,845,072
[1]
BPPR
$
1,451,330
$
369,478
$
(5,909)
489,744
198,774
(5,909)
961,586
170,704
111,062
7,872
298,023
13,120
(56)
298,690
53,206
26,936
6,633
(56)
123,440
18,684
72,091
1,188
26,326
4,147
[1]
258,879
55,240
807,270
139,719
(56)
341,277
36,233
62,746
11,445
$
278,531
$
24,788
$
$
58,464,408
$
14,287,739
$
(264,040)
Total
$
1,814,899
$
8,189
$
(7,040)
$
1,816,048
682,609
21,423
(7,040)
696,992
1,132,290
(13,234)
118,934
119,392
311,087
22,438
(3,401)
330,124
351,896
60,905
412,801
33,513
33,728
(579)
66,662
142,124
17,090
159,214
73,279
73,290
1,529
1,529
30,473
31,249
[1]
314,119
(104,339)
(1,836)
207,944
946,933
8,171
(2,415)
952,689
377,510
(986)
377,099
Income tax expense (benefit)
74,191
22,200
(364)
96,027
$
303,319
$
(21,625)
$
(622)
$
281,072
$
72,488,107
$
5,828,667
$
(5,471,702)
$
72,845,072
[1]
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
in
the
U.S.
Virgin
Islands,
the
British
Virgin
Islands
and
New
York.
banking
operations in
the mainland
include commercial
lending activities
in addition
to
periodic loan
participations with
PB.
During
the
six
months
ended
June
30,
2025,
BPPR
participated
in
loans
originated
by
PB
totaling
$
million
(2024
did
no
t
participate). Total
assets for
the BPPR
segment related
to its
operations in the
$
1.4
billion (December
31, 2024
- $
1.6
billion), including $
multifamily loans (December
31, 2024
- $
million), $
million in commercial
real estate loans (December 31, 2024 - $
million), $
million in C&I loans (December 31, 2024 - $
million), and $
million
in unsecured personal loans
(December 31, 2024 -
$
million). During the six
2025, the BPPR segment
generated $
51.4
60.1
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, 2024
- $
1.0
The BPPR segment generated $
25.0
million in revenues during the six months ended June 30, 2025 (June 30, 2024 - $
21.3
million)
from its operations in the U.S. and British
Virgin Islands.
Geographic Information
Quarter ended
Revenues:
[1]
$
636,232
$
586,338
$
1,246,193
$
1,152,082
139,274
127,011
266,490
253,752
Other
24,520
21,269
45,001
43,346
Total consolidated
revenues
$
800,026
$
734,618
$
1,557,684
$
1,449,180
[1]
Total revenues include
net interest income, service charges on deposit accounts,
other service fees, mortgage banking activities, net
gain (loss),
including impairment, on equity securities, net gain on trading
account debt securities, adjustments to indemnity reserves
on loans sold, and
other operating income.
Selected Balance Sheet Information:
$
58,522,143
$
55,888,211
Loans
24,979,110
24,154,610
53,876,271
52,099,309
$
16,236,670
$
15,890,339
Loans
12,686,305
12,431,859
11,529,189
11,030,879
Other
$
1,306,277
$
1,266,833
Loans
522,661
526,606
[1]
1,812,031
1,754,157
[1]
Represents deposits from BPPR operations located in the
U.S. and British Virgin Islands.
AND RESULTS OF OPERATIONS
This
report
and
(“MD&A”)
of
the
consolidated
and
of
Inc.
(the
“Corporation”
or
“Popular”). All
accompanying
tables,
and
notes
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
(“BPPR”), as
well as
broker-dealer
and
services
through
specialized
In
the
U.S.
mainland,
the
retail,
mortgage, and commercial
banking services, as
well as
equipment leasing and
financing, through its
-chartered banking
subsidiary, Popular Bank (“PB” or “Popular U.S.”), which has branches located in New York,
New Jersey and Florida. Note 32 to the
Consolidated Financial Statements presents information
about the Corporation’s business segments.
As a financial services company,
the Corporation’s earnings are significantly affected
by general business and economic conditions
in the
markets which
we serve.
Lending and
deposit activities
and fee
income generation
are influenced
by the
level of
spending and
investment, consumer
income, spending
and savings,
capital market
activities, competition,
customer preferences,
interest rate conditions and prevailing market rates
on competing products.
operates in
a highly
regulated environment
and may
be adversely
affected by
federal and
local laws
and
regulations.
Also,
competition
with
other
institutions,
as
well
as
with
non-traditional financial
service
providers
and
companies
that
provide
electronic
and
internet-based
solutions
and
services,
could
adversely
affect
its
profitability.
The
continuously
monitors
general
and
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
discusses additional
information about the business of the Corporation. Readers should also refer to “Part I - Item 1A” of the 2024 Form 10-K and “Part II
- Item 1A” of this Form 10-Q for a discussion of certain risks and uncertainties to which the Corporation is subject, many beyond the
Corporation’s control that, in addition to the other information in
this Form 10-Q, readers should consider.
The Corporation’s common stock is traded on the NASDAQ
Global Select Market under the symbol BPOP.
SIGNIFICANT EVENTS
Capital Actions
On July 16, 2025, the Corporation announced
the following capital actions:
in the
Corporation’s quarterly
common stock
dividend from
$0.70 to
$0.75 per
share, commencing
dividend payable in the fourth quarter of 2025,
subject to the approval by the Corporation’s Board of Directors;
and
a new common stock repurchase program of up
to $500 million.
This new common stock repurchase program is in addition
to the $500 million common stock repurchase program
announced by the
Corporation on July 24, 2024 (the “2024
Repurchase Program”).
The
planned
common
stock
may
be
executed
in
open
market
privately
negotiated
transactions, block trades
or any other
manner determined by
the Corporation. The
timing, quantity and
price of such
will
be
subject
to
various
factors,
market
conditions,
the
capital
and
performance,
the
capital impact of strategic initiatives and regulatory and tax considerations.
The common stock repurchase program does not require
the Corporation to acquire a specific dollar amount or
number of shares and may be modified, suspended or terminated
at any time
without prior notice.
During
the
quarter
and
six
months
ended
June
30,
2025,
the
repurchased
shares
of
common
stock
for
$112.0 million at an average price of $98.54 per share and 2,406,959 shares
of common stock for $234.2 million at an average price
of $97.32 per share, respectively.
As of June 30, 2025, the
Corporation had repurchased a total of approximately 4.7 million
shares
of common stock for $451.5
million as part of the 2024 Repurchase
Program.
OVERVIEW
Financial highlights for the quarter ended June 30,
net income for
2025 amounted to
$210.4 million, an
$32.6 million when
compared to a net income of $177.8 million for the quarter ended June 30, 2024. Higher net income was mainly driven by higher net
interest income, offset in part by an increase in operating
expense and income tax expense.
Financial highlights for the quarter ended June 30,
2025 include:
amounted to $631.5
million, an increase
of $63.2 million
when compared to
30, 2024, driven by
loan growth and higher
higher volume of U.S.
Treasuries with higher
yields, and lower cost
of
mainly
P.R.
public
and
re-pricing
at
PB,
offset
by
lower
income
from
money
market
securities. Net interest margin expanded by 27 bps to 3.49%. On a taxable
equivalent basis, net interest margin expanded
by 37 basis points to 3.85% driven by tax-exempt
investment securities at higher yields.
The provision for credit losses amounted to $48.9 million
for the quarter ended June 30, 2025,
an increase of $2.1 million
when
to
the
quarter
ended
June
30,
2024,
driven
by
in
the
loans
portfolio,
specifically in Commercial
Real Estate portfolio in
the PB segment
due to higher
qualitative reserves and changes
in the
macroeconomic
scenario,
offset
by
a
lower
in
the
BPPR
segment
due
to
lower
net
charge-offs
and
improvements of credit quality in the commercial
portfolio.
$168.5 million,
of $2.2
million when
30, 2024, mainly driven by higher
credit and debit card fee income,
higher investment management fees,
and a favorable
adjustment of
equity securities held
for deferred
benefit plans,
other operating
income
mainly related to the daily rental car business sold
during the fourth quarter of 2024.
Operating expenses amounted to $492.8 million for
the quarter, reflecting
an increase of $23.2 million when
The increase
was driven
mainly by
higher personnel
costs due
incentives,
partially offset by lower professional fees.
Income tax expense of
$47.9 million with an
effective tax rate
(“ETR”) of 18.5% during
the quarter ended June
compared to an income tax expense of $40.5
million with an ETR of 18.5% for the quarter ended
June 30, 2024.
At June
total assets
$76.1 billion,
$73.0 billion
at December
31,
$3.1 billion
is primarily
due to
higher balance
in the
available-for-sale (“AFS”)
securities portfolio
and an
increase across
most loan
portfolios,
mainly in
commercial, mortgage,
and construction,
balance in the held-to-maturity (“HTM”) investment
securities, money market investments, and a decrease in
other assets.
Deposits amounted to $67.2
billion at June 30, 2025,
an increase of $2.3
billion from December 31, 2024,
driven by P.R.
public deposits.
Stockholders’
equity
to
$6.0
billion
at
June
30,
2025,
to
$5.6
billion
at
The
Corporation and its
banking subsidiaries continue
to be
well capitalized. As
of June
Corporation’s tangible
book value
per common
share was
$75.41, an
$7.25 from
Common Equity
Tier
Capital ratio at June 30, 2025 was 15.91%,
compared to 16.03% at December 31, 2024.
Refer to Table 1 for selected financial data for the quarters ended June 30, 2025 and June
Table 1 - Financial Highlights
Financial Condition Highlights
Ending balances at
Average for the six months ended
$
$
$
(40,162)
$
6,314,487
$
6,477,180
$
(162,693)
28,283,970
26,244,977
2,038,993
28,642,361
28,034,347
608,014
Loans
[1]
1,075,001
37,310,383
35,226,488
2,083,895
Earning assets
72,812,832
69,739,000
3,073,832
72,267,231
69,738,015
2,529,216
3,019,707
75,391,749
72,800,664
2,591,085
2,333,146
66,112,327
64,529,716
1,582,611
1,414,494
1,176,126
238,368
1,120,666
1,045,181
75,485
Total liabilities
70,111,072
67,432,317
2,678,755
68,224,476
66,549,458
1,675,018
340,952
7,167,273
6,251,206
916,067
Note: Average balances exclude unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities transferred from available-for-
sale to held-to-maturity.
Operating Highlights
$
631,549
$
568,312
$
63,237
$
$
$
118,090
48,941
46,794
2,147
113,022
119,392
(6,370)
168,477
166,306
2,171
320,538
330,124
(9,586)
Operating expenses
492,761
469,576
23,185
963,773
952,689
11,084
258,324
218,248
40,076
480,889
377,099
103,790
47,884
40,459
7,425
92,947
96,027
(3,080)
$
210,440
$
177,789
$
32,651
$
387,942
$
281,072
$
106,870
Net income applicable to common stock
$
210,087
$
177,436
$
32,651
$
387,236
$
280,366
$
106,870
Net income per common share – basic
$
3.09
$
2.47
$
0.62
$
5.64
$
3.90
$
1.74
Net income per common share – diluted
$
3.09
$
2.46
$
0.63
$
5.64
$
3.90
$
1.74
Dividends declared per common share
$
0.70
$
0.62
$
0.08
$
1.40
$
1.24
$
0.16
Selected Statistical Information
Common Stock Data
End market price
$
110.21
88.43
$
110.21
88.43
Book value per common share at period end
87.31
73.94
87.31
73.94
Profitability Ratios
Return on assets
1.11
%
0.97
%
1.04
%
0.77
%
Return on common equity
11.77
10.38
10.93
8.24
Net interest spread (non-taxable equivalent basis)
2.85
2.44
2.79
2.41
Net interest spread (taxable equivalent) - Non-GAAP
3.21
2.70
3.14
2.65
Net interest margin (non-taxable equivalent basis)
3.49
3.22
3.45
3.20
Net interest margin (taxable equivalent) - Non-GAAP
3.85
3.48
3.80
3.44
Capitalization Ratios
Average equity to average assets
9.48
%
8.60
%
9.51
%
8.59
%
Common equity Tier 1 capital
15.91
16.48
15.91
16.48
Tangible common
book value per common share (non-GAAP)
[2]
75.41
62.71
75.41
62.71
Return on average tangible common equity
[2]
13.26
11.77
12.32
9.35
Tier I capital
15.96
16.54
15.96
16.54
Total capital
17.70
18.30
17.70
18.30
Tier 1 leverage
8.51
8.53
8.51
8.53
[1]
Includes loans held-for-sale.
[2]
Refer to Table 10 for reconciliation to GAAP financial measures.
Non-GAAP Financial Measures
This Form 10-Q
contains financial information
prepared under accounting
principles generally accepted in
the United States
(“U.S.
GAAP”)
and
measures.
uses
when
it
is
determined
that
these
measures provide
meaningful information
about the
underlying performance
of the
Corporation’s ongoing
operations. Non-GAAP
financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by
other
companies.
Adjusted net income - Non-GAAP Financial Measure
In
analyzing the
results on
a reported
basis, management
monitors whether
the
impact of
certain non-
recurring or
infrequent transactions
need to
be excluded
results of
operations to
present what
is then
considered to
be
net
of
the
believes
that
the
net
meaningful
about
the
of
the
ongoing
operations.
The
net
is
a
measure.
The
table
the
net
income
for
the
six
months
ended
June
30,
There
were
no
adjustments for the six months ended June 30, 2025.
Table 2 - Adjusted Net Income
for the Six Months Ended June 30, 2024 (Non-GAAP)
Income before
Income tax
expense
Total
U.S. GAAP Net income
$377,099
$96,027
$281,072
Non-GAAP Adjustments:
FDIC Special Assessment [1]
14,287
(5,234)
9,053
Adjustments related to intercompany distributions [2]
6,400
16,483
22,883
Adjusted net income (Non-GAAP)
$397,786
$84,778
$313,008
[1] Expense recorded during the first quarter of 2024 to
increase the estimate recognized during the fourth
quarter of 2023 related to the November 16,
2023 FDIC Special Assessment to recover the losses to the
deposit insurance fund used by the FDIC in connection
with the receiverships of several
failed banks. The special assessment amount and collection
period may change if the estimated loss is periodically
adjusted or if the total amount
collected varies.
[2] Income tax expense and other related expenses from
prior periods related to withholding taxes on certain
distributions from U.S. subsidiaries.
Net interest income on a taxable equivalent basis
– Non-GAAP Financial Measure
Net interest income, on
a taxable equivalent basis,
is presented with its
different components in Table
s
3 and 4 for
the quarter and
as compared
same period
in 2024,
segregated by
major categories
of interest
earning
assets and interest-bearing liabilities.
The
main
sources
of
tax-exempt
income
are
certain
loans
and
in
of
the
U.S.
its
agencies and sponsored entities, and
certain obligations of the
Commonwealth of Puerto Rico and
its agencies and assets
held by
the Corporation’s international
banking entities. On
tables 3 and
4, the interest
income has been
converted to a
taxable equivalent
basis, using the applicable statutory income tax rates for each period net of interest expense that the Puerto Rico tax law requires to
be disallowed, based on an equal proportion of tax-exempt assets to total assets, and by an allocation of general and administrative
expenses attributed to
exempt income, reducing
the benefit
of the
tax-exempt income. The
effective yield, on
a taxable
equivalent
basis, will vary depending on the
level of these expenses that are
attributed to the available exempt income.
Under Puerto Rico tax
law, the exempt interest can be
deducted up to the amount of taxable income. Management believes that this presentation provides
meaningful information since it facilitates the comparison
of revenues arising from taxable and exempt
sources.
Tangible Common Equity and Tangible Assets
tangible common equity ratio, tangible
assets and tangible book value
per common share are
financial measures.
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
amounts
of
goodwill
or
other
intangible
assets,
typically
stemming
from
the
use
of
the
purchase
accounting method for
mergers and acquisitions.
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
tangible assets and
other related measures
may
differ from that of other companies reporting measures
with similar names.
Table
10 provides
a reconciliation of
total stockholders’ equity
to tangible common
equity and total
assets to tangible
assets
as of
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
services
industry.
Various
elements
of
the
policies,
by
their
nature,
are
inherently
subject to estimation techniques, valuation assumptions
and other subjective assessments.
has
the
development
and
selection
of
the
critical
with
the
Audit
Committee. The Corporation has identified as critical accounting estimates those related to: (i) Fair Value
Measurement of Financial
Instruments;
(ii)
Loans
and
for
Credit
Losses;
(iii)
Income
Taxes;
(iv)
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
Form
10-K.
Also,
refer
to
Note
to
the
in
the
Form
10-K
for
a
summary of the Corporation’s significant accounting policies and to Note 3 to the Consolidated Financial Statements included in this
Form 10-Q for information on recently adopted accounting
standard updates.
STATEMENT
OF OPERATIONS ANALYSIS
NET INTEREST INCOME
The
net
income
for
the
quarter
ended
June
30,
was
$631.5
million
and
$63.2
compared to the same
quarter in 2024.
Higher net interest income
was supported by
an increase in average
deposit balances and
loan growth.
Net interest
income on
a taxable
for the
of 2025
was $697.2
million, an
$82.4 million.
Net interest margin (“NIM”) for the quarter was 3.49%, an increase
of 27 basis points when compared to the second quarter
On a
taxable equivalent
basis, net
interest margin
for the
of
2025 was
3.85% or
37 basis
points higher
than the
NIM expansion
was mainly
attributed to
lower deposit
costs driven
by the
high-cost deposits
market-linked, such
as P.R.
public deposits,
a higher
volume of
of U.S.
Treasuries.
Total cost of deposits decreased 32 basis points to 1.78%.
On a taxable equivalent basis, the main drivers of
the increase for the second quarter of 2025
were:
from
by
$21.5
due to
activity
at
supported
by
deposits growth.
The U.S.
Treasuries yield
increased 30
basis points
to the
of 2024
as
reinvestment of maturing debt securities along with
incremental balances are being reinvested
at higher current rates;
higher
income
from
loans
by
$40.4
million
from
higher
average
across
most
portfolios,
led
by
commercial, construction,
mortgage, auto
and lease
portfolios, resulting
from origination
activity.
Higher yields
auto, lease and
mortgage portfolios mitigated the
impact of lower
yields from the
commercial and construction portfolios,
due to
the impact of
short-term market rates
decline on adjustable-rate
loans. Overall, the
loan portfolio yield
by two basis points to 7.50%; and
lower interest expense on deposits
by $44.9 million or 32
basis points lower when compared to
the same period in 2024.
The cost
of interest-bearing
deposits decreased
by 45
basis points,
to the
P.R.
which decreased by 93 basis points to 3.22% and
a decrease in the cost of deposits in the
PB segment;
lower interest
income from
money market
investments by
$18.8 million
or
103 basis
points mainly
due
to
lower yields
resulting from lower short-term market rates.
Table 3 - Analysis of Levels & Yields
on a Taxable Equivalent Basis
(Non-GAAP)
Average Volume
Average Yields / Costs
Attributable to
Rate
Volume
$
6,251
$
6,471
$
(220)
4.46
%
5.49
%
(1.03)
%
Money market
$
69,532
$
88,316
$
(18,784)
$
(15,866)
$
(2,918)
28,809
28,943
(134)
3.29
3.01
0.28
Investment securities [1]
236,372
216,922
19,450
18,673
5.99
5.69
0.30
Trading securities
Total money market,
investment and
trading
35,087
35,440
(353)
3.50
3.47
0.03
306,311
305,605
2,828
(2,122)
Loans:
18,676
17,707
6.73
6.86
(0.13)
313,493
302,003
11,490
(4,831)
16,321
1,459
1,070
8.19
9.11
(0.92)
29,806
24,224
5,582
(2,558)
8,140
1,963
1,789
7.18
6.86
0.32
Leasing
35,249
30,697
4,552
1,467
3,085
8,339
7,817
5.89
5.66
0.23
122,873
110,673
12,200
4,632
7,568
3,211
3,192
14.00
13.97
0.03
112,083
110,906
1,177
3,937
3,819
9.14
8.88
0.26
Auto
89,706
84,268
5,438
2,780
2,658
37,585
35,394
2,191
7.50
7.52
(0.02)
703,210
662,771
40,439
1,864
38,575
$
72,672
$
70,834
$
1,838
5.57
%
5.49
%
0.08
%
Total earning assets
$
1,009,521
$
968,376
$
41,145
$
4,692
$
36,453
$
8,062
$
7,522
$
1.71
%
1.97
%
(0.26)
%
NOW and money
market
$
34,288
$
36,783
$
(2,495)
$
(4,611)
$
2,116
14,605
14,728
(123)
0.83
0.92
(0.09)
Savings
30,378
33,749
(3,371)
(2,862)
(509)
8,532
8,237
3.15
3.39
(0.24)
67,032
69,494
(2,462)
(4,857)
2,395
20,333
19,364
3.22
4.15
(0.93)
163,360
199,913
(36,553)
(45,918)
9,365
51,532
49,851
1,681
2.29
2.74
(0.45)
295,058
339,939
(44,881)
(58,248)
13,367
14,825
15,176
(351)
demand deposits
66,357
65,027
1,330
1.78
2.10
(0.32)
295,058
339,939
(44,881)
(58,248)
13,367
4.52
5.64
(1.12)
Short-term borrowings
5,300
1,126
4,174
(213)
4,387
Other medium and
(146)
5.79
5.16
0.63
long-term debt
11,965
12,530
(565)
(746)
52,834
50,909
1,925
2.36
2.79
(0.43)
liabilities (excluding
demand deposits)
312,323
353,595
(41,272)
(58,280)
17,008
Other sources of funds
5,013
4,749
$
72,672
$
70,834
$
1,838
1.72
%
2.01
%
(0.29)
%
Total source of funds
$
312,323
$
353,595
$
(41,272)
$
(58,280)
$
17,008
income on a taxable
equivalent basis (Non-
GAAP)
3.85
%
3.48
%
0.37
%
$
697,198
$
614,781
$
82,417
$
62,972
$
19,445
3.21
%
2.70
%
0.51
%
Net interest spread
Taxable equivalent
adjustment
65,649
46,469
19,180
income non-taxable
equivalent basis (GAAP)
3.49
%
3.22
%
0.27
%
$
631,549
$
568,312
$
63,237
Note: The changes that are not due solely to volume or
rate are allocated to volume and rate based on the
proportion of the change in each category.
[1] Average balances exclude unrealized gains or losses
on debt securities available-for-sale and the unrealized
loss related to certain securities transferred from
available-for-sale to held-to-maturity.
The Corporation’s net
interest income for the
six-month period ended June
30, 2025 was
$1.2 billion, or $118.1
million higher than
in 2024. Taxable
equivalent net interest
income was $1.4
billion, an increase
of $156.7 million
when compared to
- NIM
was 3.45%,
of
25 basis
points when
3.20% in
- NIM,
on a
taxable
equivalent basis, for the six months ended June
30, 2025, was 3.80%, an increase of
36 basis points compared to the same
period
The main drivers of the variances in net interest income on a taxable equivalent basis for the six-month period ended June 20, 2025
were:
higher income from U.S.
Treasury securities by
$53.9 million mainly driven
by higher yields, coupled with
higher average
volume by $640.0 million;
loans by $71.6
million driven by
higher average balances across
most portfolios, mainly commercial,
construction and
mortgage, and
in the
mortgage, auto
and leasing
portfolios due
to originations
at higher
rates, partially
lower yields
in commercial
and construction
portfolios due
to
adjustable-rate loans
which were
impacted by the decline in index rates; and
lower deposit
cost by
$76.5 million
to the
marked linked
P.R.
public deposits,
which reflected
a
lower cost by 90 basis points and deposit costs repricing
in both banks;
lower income from money markets investments by
$37.1 million driven by the decline in
short-term market rate and lower
average balances due to loan growth and investments,
mainly in U.S. Treasuries; and
higher
by
$4.4
million
mainly
due
to
higher
average
of
FHLB
at
Popular Bank.
Table 4 – Analysis of Levels & Yields
on a Taxable Equivalent Basis
from Continuing Operations (Non-GAAP)
Period ended June 30,
Average Volume
Average Yields / Costs
Attributable to
Rate
Volume
$
6,314
$
6,477
$
(163)
4.46
%
5.49
%
(1.03)
%
Money market
$
139,698
$
176,832
$
(37,134)
$
(32,791)
$
(4,343)
28,613
28,626
(13)
3.22
2.86
0.36
[1]
456,807
408,024
48,783
45,804
2,979
(1)
5.90
4.60
1.30
Trading securities
(17)
Total money market,
investment and
trading
34,956
35,133
(177)
3.45
3.35
0.10
597,352
585,534
11,818
13,199
(1,381)
Loans:
18,585
17,660
6.72
6.85
(0.13)
619,461
601,507
17,954
(13,059)
31,013
1,385
1,031
8.15
9.04
(0.89)
55,995
46,324
9,671
(4,994)
14,665
1,951
1,766
7.14
6.80
0.34
Leasing
69,693
60,051
9,642
3,129
6,513
8,254
7,770
5.86
5.64
0.22
241,789
219,216
22,573
8,609
13,964
3,207
3,208
(1)
14.02
13.94
0.08
222,989
222,396
3,929
3,791
9.11
8.82
0.29
Auto
177,511
166,322
11,189
5,010
6,179
37,311
35,226
2,085
7.49
7.50
(0.01)
1,387,438
1,315,816
71,622
(1,075)
72,697
$
72,267
$
70,359
$
1,908
5.54
%
5.43
%
0.11
%
Total earning assets
$
1,984,790
$
1,901,350
$
83,440
$
12,124
$
71,316
$
8,022
$
7,643
$
1.72
%
1.99
%
(0.27)
%
NOW and money
market
$
68,290
$
75,548
$
(7,258)
$
(9,978)
$
2,720
14,556
14,711
(155)
0.85
0.93
(0.08)
Savings
61,658
67,873
(6,215)
(5,274)
(941)
8,466
8,029
3.18
3.29
(0.11)
133,713
131,511
2,202
(5,555)
7,757
20,310
19,017
1,293
3.27
4.17
(0.90)
329,260
394,503
(65,243)
(90,446)
25,203
51,354
49,400
1,954
2.33
2.73
(0.40)
592,921
669,435
(76,514)
(111,253)
34,739
14,758
15,129
(371)
demand deposits
66,112
64,529
1,583
1.81
2.09
(0.28)
592,921
669,435
(76,514)
(111,253)
34,739
4.57
5.67
(1.10)
Short-term
6,726
2,318
4,408
(404)
4,812
Other medium and
(141)
5.72
5.13
0.59
long-term debt
24,077
25,239
(1,162)
(1,412)
52,498
50,470
2,028
2.40
2.78
(0.38)
liabilities (excluding
demand deposits)
623,724
696,992
(73,268)
(111,407)
38,139
5,011
4,760
Other sources of
funds
$
72,267
$
70,359
$
1,908
1.74
%
1.99
%
(0.25)
%
Total source of funds
$
623,724
$
696,992
$
(73,268)
$
(111,407)
$
38,139
3.80
%
3.44
%
0.36
%
income on a taxable
(Non-GAAP)
$
1,361,066
$
1,204,358
$
156,708
$
123,531
$
33,177
3.14
%
2.65
%
0.49
%
Net interest spread
Taxable equivalent
adjustment
123,920
85,302
38,618
3.45
%
3.20
%
0.25
%
income non-taxable
(GAAP)
$
$
$
118,090
Note: The changes that are not due solely to volume or
rate are allocated to volume and rate based on the
proportion of the change in each category.
[1] Average balances exclude unrealized gains or losses
on debt securities available-for-sale and the unrealized
loss related to certain securities transferred
from available-for-sale to held-to-maturity.
Provision for Credit Losses - Loans Held-in-Portfolio
and Unfunded Commitments
For the
2025,
recorded a
loans held-in-portfolio
and
unfunded commitments of
$48.4 million, an
increase of $2.1
million when compared to
the same quarter
of the previous
year.
The
for
the
loan
was
$49.5
an
of
$5.4
and
the
release
related
to
commitments was $1.1
million, a favorable
variance of $3.2
million, mainly driven
by lower unfunded
commitments reserves at
the
BPPR segment.
As discussed
in Note
8 to
Financial Statements,
estimates the
ACL by
weighting the
outputs of
optimistic,
baseline,
and
During
the
first
quarter
of
2025,
in
to
the
uncertainty,
the
Corporation increased the probability assigned to the pessimistic
scenario making it equal to the baseline scenario. Subsequently, in
the second quarter
of 2025, the
probability assigned to the
pessimistic scenario was moderately
reduced based on
the changes in
the economic outlook and
a reassessment of uncertainty
compared to the previous
quarter. The
net impact of these
two events on
the
ACL
levels
for
the
six
months
30,
was
$13.7
million
in
reserves. The
weight for
the
pessimistic scenario remains above the levels observed
in 2024, given the ongoing economic uncertainty.
The major
drivers of
the changes
in the
loan losses
quarter by
business segment
to the
same quarter in 2024, were as follows:
In the BPPR segment,
the provision for loans losses
was $43.2 million, a decrease
of $5.4 million when
compared to the
same quarter in
2024, mainly driven
by lower reserves
for the commercial
portfolio of $16.4 million
due to improvements
in credit quality and lower net
charge-offs,
which offset the increase in the
weight assigned to the pessimistic scenario for
the
year
2025,
as
above.
The
favorable
variance
was
offset
by
higher
in
the
portfolio due to changes in credit quality mainly within
the auto portfolio and changes in the macroeconomic
In
the Popular
U.S. segment,
for
loans losses
was
$6.4 million
for the
June
an
$10.8 million, mainly
higher qualitative reserves
for the
U.S. Commercial Real
Estate portfolio
and
changes in macroeconomic
scenarios, when compared to
the reserve release
recorded for the
same period in
2024 due
to improvement in credit ratings.
For the six
months ended June
provision for credit
loss related to
loans held-in-portfolio and
unfunded commitments
amounted to $112.3 million, a decrease of $6.1 million, compared to the six months ended June 30, 2024. The provision for the loan
was
$114.8
a
of
$1.8
and
the
release
related
to
commitments
was
$2.4
million, a
decrease of
$4.3 million,
mainly driven
by the
reduction in
unfunded commitment
reserves within
construction
portfolio. The major drivers of the decrease
in the provision for loan losses during
the six months ended June 30,
2025 by business
segment when compared to the same period in
2024, were as follows:
In the
BPPR segment,
losses was
$95.8 million,
a decrease
of $13.8
million, driven
net
charge-offs,
mainly
in
and
loans,
and
improvement
in
credit
quality,
mainly
in
the
portfolio, partially offset by the
increase in the probability weight assigned to
the pessimistic scenario which generated an
additional reserve of $8.8 million.
In the
segment, the
loan losses
was $18.9
million, an
$12.0 million,
an
increase of $7.1 million mainly
due to credit quality changes and
additional qualitative reserves established, mainly within
the
portfolio,
and
an
of
$4.9
million
related
to
the
in
weight
to
the
pessimistic scenario.
At June
allowance for
for loans
held-in-portfolio amounted
to $769.5
million, compared
to $746.0
million as of December 31, 2024.
The ratio of the allowance for
credit losses to loans held-in-portfolio was
2.02% at June 30, 2025,
compared to 2.01% at
December 31, 2024. Refer to
Note 8 to the
Consolidated Financial Statements, for additional
the
methodology to
its
ACL.
the
Credit Risk
section of
this MD&A
for a
detailed
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 $168.5 million for the second quarter of 2025, an increase of $2.2 million when compared with the
same quarter for the previous year. The variance was primarily due
to:
higher other
service fees
by
$3.7 million
to
higher credit
and debit
card fee
income by
$2.5 million,
due to
higher volume
of costumer
and higher
investment management
fees by
$1.2 million,
due to
higher assets
under management; and
a favorable fair value adjustment of equity securities held
for deferred compensation plans which have an offsetting effect
in personnel cost of $1.5 million;
lower other operating income
by $3.6 million mainly
due to lower daily
car rental revenue by
$4.9 million and lower
gains
from
the sale
of car
rental units
by
$2.9 million,
both due
to
the sale
of
the daily
car rental
business during
the fourth
quarter of 2024, partially
offset by $2.3 million
of income related to
the reimbursement of excess
interest paid to the
U.S.
Internal Revenue Service
(“the IRS”) for
late payment penalties
related to tax
withholdings on intercompany
for the years 2014-2024
previously disclosed in 2024, and
a $1.2 million cash
distribution from the exit of
a legacy equity
investment.
Non-interest income amounted to $320.5 million for the six
months ended June 30, 2025, a decrease of $9.6 million when
to the same period of the previous year. The main factors that
contributed to the variance were:
lower other operating income by $15.6 million mainly due to daily
car rental revenue by $9.8 million and the gains from the
sale of car rental units by
$6.3 million during the six months ended June
30, 2024 associated with the car rental business
sold in the fourth quarter of 2024, partially offset
by $3.9
million income related to the reimbursement of interest paid from
the IRS, as discussed above;
higher other
service fees
by $3.9
million due
to
higher credit
and debit
card fee
income by
$4.0 million,
due to
higher
volume
of
and
higher
fees
by
$2.8
due
to
higher
assets
under
management,
partially offset by lower insurance fees by $4.1 million;
and
higher
service
charges
on
deposit
accounts
by
$2.9
million
mainly
due
to
higher
non-balance
compensation
fees
in
commercial deposits.
Operating Expenses
Operating expenses amounted to $492.8 million for the
quarter ended June 30, 2025, an
increase of $23.2 million, when compared
with the same quarter of 2024. The variance
in operating expenses was mainly driven by:
higher personnel costs by $31.9 million mainly due to higher incentives, including $13.0 million related to the profit-sharing
plan
which
is
tied
to
the
and
$9.9
million
in
other
performance-based incentives
and
stock-
based compensation, and higher salaries expense by
$4.1 million due to a higher headcount and
annual salary revisions;
higher
and
by
$4.9
million
mainly
due
to
higher
expense
due
to
the
acquisition
and
renewal
of
multiple
licenses
reflective
of
the
continuous
in
and
transformation initiatives and an increase in network
management services expense; and
higher other taxes expense by $3.3 million
mainly due to higher regulatory fees and
an increase in municipal license tax;
lower
professional
fees
by
$9.6
million
mainly
due
to
a
in
advisory
related
to
corporate
initiatives,
a
decrease, due
to
expense-recognition timing
differences,
in the
cost of
restricted stock
granted to
directors, and
lower legal
fees;
lower operational losses by
$5.6 million due to
a buildup of reserves
for operational losses during the
second quarter of 2024;
and
lower equipment expenses
by $3.9 million, mainly due to the
elimination of the car rental fleet depreciation
expense, related to
the car rental business sold in 2024.
Operating
to
$963.8
million
for
the
six
months
ended
June
30,
2025,
an
of
$11.1
million
when
compared with the
same period of
- Excluding the
$6.4 million of
interest accrued related
to prior period
tax withholdings and
the
$14.3
million
impact
of
the
FDIC
Special
Assessment,
total
for
the
six
months
ended
June
30,
2025,
increased by $31.8 million, when compared with
the same period of 2024. The main drivers of the increase
were:
higher personnel costs by $29.3 million mainly due to higher incentives, including $13.0 million related to the profit-sharing plan
which
is
tied
to
the
and
$9.3
million
in
other
performance-based incentives
and
stock-
based compensation, and higher salaries expenses
by $5.7 million due to a higher headcount
and annual salary revisions;
higher
and
by
$9.2
million
mainly
due
to
higher
expense
due
to
the
acquisition
and
renewal
of
multiple
licenses
reflective
of
the
continuous
in
and
transformation initiatives and an increase in network
management services expense;
and
higher other taxes expense by $7.6 million
mainly due to higher regulatory fees and an
increase in municipal license tax;
lower professional fees by $11.7
million mainly due to a
decrease in advisory expenses related to corporate initiatives
focused
on compliance and cyber security efforts, a decrease in
IT professional services,
and lower legal fees;
lower equipment expenses
by $8.1 million, mainly due to the depreciation of car rental units associated with the daily car rental
transaction; and
lower operational losses by $3.1 million due to a
buildup of reserves for operational losses during
the second quarter of 2024.
Table 5 - Operating Expenses
Personnel costs:
Salaries
$
132,752
$
128,634
$
4,118
$
263,702
$
258,018
$
5,684
Commissions, incentives, and other bonuses
40,551
30,626
9,925
78,537
69,237
9,300
Profit sharing
13,000
13,000
13,000
13,000
Pension, postretirement, and medical insurance
18,458
16,619
1,839
33,024
34,004
(980)
Other personnel costs, including payroll taxes
24,594
21,545
3,049
53,805
51,542
2,263
Total personnel
costs
229,355
197,424
31,931
442,068
412,801
29,267
Net occupancy expenses
29,140
27,692
1,448
56,358
55,733
Equipment expenses
5,789
9,662
(3,873)
11,091
19,229
(8,138)
Other taxes
18,632
15,333
3,299
37,357
29,708
7,649
28,108
37,744
(9,636)
54,933
66,662
(11,729)
84,696
79,752
4,944
168,364
159,214
9,150
Processing and transactional services:
Credit and debit cards
13,044
13,739
(695)
25,970
25,883
Other processing and transactional services
24,817
25,357
(540)
49,672
47,407
2,265
Total processing
and transactional services
37,861
39,096
(1,235)
75,642
73,290
2,352
Communications
5,010
4,357
9,914
8,914
1,000
Business promotion:
Rewards and customer loyalty programs
18,047
16,406
1,641
34,412
30,462
3,950
Other business promotion
8,338
9,043
(705)
15,648
15,976
(328)
Total business
promotion
26,385
25,449
50,060
46,438
3,622
Deposit insurance
9,407
10,581
(1,174)
19,442
34,468
(15,026)
Other real estate owned (OREO) income
(4,124)
(5,750)
1,626
(7,454)
(11,071)
3,617
Operational losses
6,185
11,823
(5,638)
12,323
15,384
(3,061)
All other
15,932
15,679
32,693
40,390
(7,697)
Total other operating
22,117
27,502
(5,385)
45,016
55,774
(10,758)
(349)
1,529
(547)
$
492,761
$
469,576
$
23,185
$
963,773
$
952,689
$
11,084
Income Taxes
For the quarter
and six months
2025, the Corporation recorded
an income tax
expense of $47.9
million and $92.9
million with an effective tax rate (“ETR”) of 18.5% and 19.3%, respectively, compared to $40.5 million and $96.0 million with an ETR
of 18.5% and 25.5% for the respective periods
of year 2024.
Higher income tax expense of $7.4
million for the second quarter,
when compared to the same quarter of
2024, is mainly attributed
to higher income before tax, partially offset with higher net exempt income. For the
six-month period ended June 30, 2025, the lower
income
tax
expense
of
$3.1
million
reflects
the
impact
of
the
tax
withholding
expense
of
$22.9
million
during
the
first
quarter of year 2024, in connection with intercompany distributions
for years 2014-2024, as disclosed in Note 34 to the Consolidated
Financial Statements in the
2024 Form 10-K,
and the benefit
of $5.2 million
related to the FDIC
Special Assessment expense; this
was partially offset by the increase in
income before tax. Excluding the impact of the
withholding tax expense and the additional net
expense related to the FDIC Special Assessment in the first quarter
of 2024, the ETR for the six-month period ended June 30, 2024,
would have been 21.3%.
At
June
30,
2025,
the
had
a
net
tax
asset
amounting
to
$860.3
net
of
a
of
$463.7million. The net
deferred tax asset
related to the
U.S. operations was
$242.2 million, net
of a valuation
allowance of $386.9
Note 30
to the
a reconciliation
of the
statutory income
tax rate
to the
effective tax
rate and additional information on the income
tax expense and deferred tax asset balances.
REPORTABLE SEGMENT RESULTS
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
of
the
and
the
management accounting process, refer to Note 32
The corporate group reported a net income of $3.3
million for the quarter ended June 30, 2025, compared with a net income of $3.8
million for the same quarter of
the previous year. For
the six months ended June 30,
2025, the corporate group reported net loss
of
$0.3 million, compared
to a
net loss of
$21.6 million for
of the
previous year.
The higher loss
in 2024 was
mainly
attributed to
the expense
the $22.9
million adjustment
recorded in
the first
2024 to
recognize the
tax impact
associated with
prior period
intercompany distributions and
the additional
$6.5 million
expense for
the tax
impact of
distributions paid
first quarter
A positive
adjustment of
$3.9 million
was recorded
ended
2025, resulting
from reimbursements
Internal Revenue
Service related
to interest
paid for
these
distributions.
There
were
no
between
the
U.S.
and
the
bank
holding
companies.
Highlights on the earnings results for the reportable
segments are discussed below:
The Banco
Popular de
reportable segment’s
$184.5 million
for the
with a
net income of
$157.2 million
for the
same quarter
of the
previous year.
The factors
that contributed
to the
variance in the financial results included the following:
of $538.5 million
was higher by
$49.7 million primarily
driven by lower
interest expense on
mainly from the
re-pricing of P.R.
public funds,
securities, mainly due
yields
and
from
the
loans portfolio
loan
growth, partially
offset
by
lower income
from
money market
investments reflecting the
decline in rates.
The net interest
margin for the
quarter ended June
30, 2025 was
3.68%, and
increase of 28 basis points, compared to 3.40% for the same quarter in the previous year. The increase in the margin was
mainly impacted
cost of
deposits and
higher yield
from investment
securities, as
well as
higher loan
which carry a higher yield, partially offset by lower rates
on money market investments;
$43.2 million
was lower
by $5.4
lower reserves
for commercial
loans,
due
to
improvements
in
credit
quality
and
lower
net
charge-offs
offset
by
a
higher
for
the
consumer loan portfolios due to changes in credit quality,
mainly within the auto portfolio, and changes in macroeconomic
scenarios;
lower non-interest income by $6.7 million mainly due to lower income from the daily car rental business, which was sold in
the fourth quarter of 2024;
higher operating expenses by $21.9 million mostly due to higher personnel costs by $19.0 million, mainly due to the profit-
sharing expense accrual and other performance-related
incentives, and higher technology expenses by
$4.0 million, offset
equipment expenses by
$4.2 million
mainly related to
the daily
car rental
business sold
in the
fourth quarter
of
2024; and
higher
income
tax
expense
by
$1.7
million
mainly
due
to
higher
income
before
tax;
offset
by
higher
exempt
income and other tax credits recorded during the
first quarter of 2025.
June 30, 2025, the BPPR segment
recorded a net income of $350.4
million compared to a net income
of
$278.5 million for the
same period of the
previous year. The factors
that contributed to the variance
in the financial results
the following:
Net
income
of
$1.1
billion was
higher by
$98.8 million
lower interest
expense on
mainly from
the re-pricing
of P.R.
public funds,
from investment
from loans
due to portfolio growth, partially offset by lower income from money market
investments reflecting the decline in rates and
lower balances. The net interest margin for the six months ended June
30, 2025 was 3.66% compared with the 3.36% for
of the previous
year. The
increase in the
margin was mainly
impacted by
lower cost of
deposits, higher
yield from investment securities and loan growth, partially
offset by lower rates from money market investments;
$95.9 million
was lower
by $13.7
the commercial
and consumer
portfolios due to lower net charge-offs and
improvements in credit quality,
partially offset by the increase in the
weight assigned to the pessimistic economic scenario;
lower non-interest income by $14.8 million mainly due to lower income from the daily car rental business sold in 2024 and
lower insurance fees, partially
offset by higher credit
and debit card income,
due to higher volume
of transactions, higher
investment management fees and an increase in non-balance
compensation fees in commercial deposits;
higher operating
expenses by
$19.2 million
mostly due
personnel costs
by $17.4
million, due
to incentives
as
above,
higher
examination
fees,
municipal
license
tax
and
higher
technology expenses,
lower equipment
expenses related
to the
daily rental
business sold
and lower
FDIC expense
due to
the FDIC
Special Assessment recorded in 2024;
and
Higher income tax expense by $8.0 million mainly
due to higher income before tax.
For the quarter ended June 30, 2025, the reportable segment of Popular U.S. reported a net income of $22.6 million, compared with
a net income
of $17.7 million for
the same quarter of
the previous year.
The factors that contributed
to the variance
in the financial
results included the following:
Net interest income of
$102.2 million, higher by
$16.3 million due to
higher income from loans,
mainly from growth in
the
commercial and
construction portfolios,
and lower
cost of
deposits due
to the
most interest-bearing
deposit
products,
offset
by
lower
income
from
money
market
due
to
average
and
lower
yields
reflecting
the
in
rates.
The
net
margin
for
the
quarter
ended
June
30,
was
2.93%
compared to 2.60% for the same quarter in the
previous year driven by lower cost of deposits;
the provision for loan losses was $6.4 million, reflecting higher reserves due to changes in economic scenarios, compared
to a benefit of $4.4 million in 2024, which was
mainly related to improvements in commercial
credit ratings;
higher operating expenses by $1.5 million, reflecting
higher personnel costs driven by incentives;
and
higher income tax expense by $1.3 million due
to higher net income before tax.
For the six months ended June 30, 2025, the reportable segment of Popular
U.S. recorded a net income of $37.4 million, compared
with
a
net
income
of
$24.8
million
for
the
same
period
of
the
year.
The
factors
that
contributed
to
the
variance
in
the
financial results included the following:
Higher net interest
income by $24.4
million due to
the loans
portfolio mainly related
to growth in
the
commercial and construction
portfolios and lower
interest expense from
deposits, due to
product repricing as
mentioned
above, partially offset by lower income from money market investments due to lower rates. The net interest margin for the
six months ended June 30, 2025 was 2.84% compared to 2.60% for the same
period of the previous year driven by lower
cost of deposits;
$18.9 million
was higher
by $12.0
million driven
by higher
for the
portfolio due to higher loan balances;
lower operating expenses by
$1.6 million reflecting lower
FDIC expense due to
FDIC Special Assessment of
$1.6 million
recorded in
2024 and
lower professional
fees, offset
by higher
allocation of
Corporate expenses
reflective of
personnel
costs and consulting fees; and
higher income tax expense by $4.6 million due
to higher net income before tax.
STATEMENT
OF FINANCIAL CONDITION ANALYSIS
Assets
The Corporation’s total assets were $76.1 billion at June 30, 2025, compared
to $73.0 billion at December 31, 2024. The variance in
total assets of $3.1 billion was driven by an increase in AFS securities and loan growth across most portfolios at both BPPR and PB
partially offset by a decrease in
HTM securities, other assets, and money market investments.
Refer to the Consolidated
Statements of Financial Condition included in
this report and to the following narrative for
additional information.
Money market investments and investment securities
Money market investments decreased by $40.2 million as of June 30,
2025, when compared to December 31, 2024, driven by funds
deployed to support loan growth.
AFS securities increased $2.2 billion, mainly due to investment in U.S. Treasury securities and the
decrease in
the unrealized
AFS securities
of $232.7
million, partially
offset
by maturities
and principal
paydowns.
HTM
by
$216.4 million
driven
by
and
paydowns,
offset
by
the
of
$91.6
million of the discount related to U.S. Treasury securities previously reclassified
from the AFS to HTM.
Refer to Note 5 and to Note 6
to the
additional information
to the
Corporation’s debt
securities available-for-
sale and held-to-maturity.
Loans
Refer to Table
6 for a
breakdown of the Corporation’s
loan portfolio. Also, refer
to Note 7 in
the Consolidated Financial Statements
for detailed information about the Corporation’s loan portfolio
composition and loan purchases and sales.
$1.1 billion
to $38.2
to
- Despite
the
uncertainty about the economic outlook, demand for credit across all segments was strong during the second quarter of 2025. In the
BPPR segment
loan balances
$626.0 million
across all
portfolios, mostly
due to
commercial and
construction loans,
which
include
the
origination
of
a
$265.0
million
loan
during
the
second
quarter
of
which
represents
the
portion
of
a
$425.0
million
issuance
in
which
BPPR
acted
as
the
lead
bank
and
administrative agent,
and
higher
mortgage loans,
driven primarily
by home
purchase activity.
Auto loans
and leases
also increased,
a strong
origination
activity. The PB
segment also increased
by $451.6 million, driven by commercial and construction lending.
Nonetheless, the impact
of trade and tariff policies on economic activity may affect
loan demand as uncertainty on the short-term
economic outlook exists.
Table 6 - Loans Ending Balances
Loans held-in-portfolio:
$
$
$
121,169
158,139
(153,891)
302,190
427,607
204,409
Leasing
57,663
330,244
(2,786)
77,479
73,571
3,908
21,219
Auto
38,265
Other
168,775
171,778
(3,003)
57,603
Total loans held-in
-portfolio
$
$
$
1,077,526
Loans held-for-sale:
$
2,898
$
5,423
$
(2,525)
Total loans held-for-sale
$
2,898
$
5,423
$
(2,525)
$
$
$
1,075,001
Other assets amounted to $1.7 billion at June 30, 2025, a decrease of
$52.7 million when compared to $1.8 billion at December 31,
The variance
was mainly
a
decrease in
net
assets
of
$64.2
million
due to
positive changes
in
the
valuation of
AFS securities,
a reduction
in unsettled
trade receivables
of $14.6
million related
to proceeds
from maturities
of U.S.
Treasury securities,
lower principal, interest and escrow servicing advances
of $8.0 million, and a reduction in investments under
the
equity
method
by
$7.0
million
mainly
related
to
losses
on
the
held
by
the
investee,
by an
increase in
capitalized software costs
of $33.1
technology modernization
and higher
prepaid
taxes
of
$20.8
Refer
to
Note
to
the
for
a
breakdown
of
the
categories that comprise the caption
of “Other Assets” in
the Consolidated Statements of Financial
Condition at June 30,
The Corporation’s total
liabilities were $70.1
billion at June
30, 2025, an
increase of $2.7
billion, when compared
to December 31,
- The following is a discussion of the significant
changes in liabilities.
Deposits and Borrowings
Total Deposits
deposits totaled $67.2
billion as
of June
$64.9 billion
as of
- Ending
deposit
balances increased
by
$2.3 billion,
while
average quarterly
balances grew
by $2.1
billion. The
average deposit
balance,
excluding P.R.
public deposits, increased by
$1.1 billion. Non-interest-bearing deposits
remained flat when compared to
31, 2024. At the end
of the second quarter of
2025, Puerto Rico public deposits were
$20.9 billion, an increase of
$1.5
billion when
compared to December 31, 2024.
P.R
public deposits represent 31% of
total deposits and are expected
to continue to range in
the
short term
between $18
billion and
$20 billion.
However,
the rate
at which
public deposit
balances may
change is
difficult to predict. The amount and timing of any such change is likely
to be impacted by, for example, the level of federal assistance
and speed
at which
any federal
assistance is
distributed, the
financial condition,
liquidity and
cash management
practices of
the
Puerto Rico Government and its instrumentalities,
and the implementation of fiscal and debt adjustment plans approved pursuant to
PROMESA or
other
actions
mandated by
the
Fiscal
Oversight and
Management Board
for Puerto
Rico
(the
“Oversight Board”).
the Trump
Administration is
conducting a
review of
federal funding,
which could
entail a
reduction in
federal funding
available for Puerto Rico. P.R
public deposits costs are generally
indexed to changes in short-term
market rates with a
one-quarter
lag, in
accordance with
contractual terms.
As a
result, these
deposits’ costs
have typically
lagged variable
asset repricing.
These
deposits require that the bank pledge high credit quality securities as collateral; therefore, liquidity risks arising
from deposit outflows
are lower.
At BPPR,
excluding Puerto
Rico public
deposits, ending
deposits increased
by $340
million, while
at PB
segment ending
deposit
balances increased by
$400 million, net
of intercompany activity.
We continue to
expect third quarter deposit
balances in BPPR
to
reflect historical seasonality and decrease based on past
experience of our retail client behavior.
The volume and cost of P.R.
public deposits and the proportion of high-cost deposits in the U.S, directly impact the balance and mix
of earning assets and therefore represent a key
factor in the Corporation’s ability to expand its net
interest margin.
Refer to Table 7 for a breakdown of the Corporation’s deposits at June 30, 2025 and December
Table 7 - Deposits Ending Balances
Deposits excluding P.R.
public deposits:
$
$
$
(24,941)
Savings, NOW and money market deposits (non-brokered)
21,554,606
21,177,506
377,100
Savings, NOW and money market deposits (brokered)
829,506
736,225
93,281
Time deposits (non-brokered)
7,938,858
7,476,924
461,934
Time deposits (brokered CDs)
861,947
890,704
(28,757)
Sub-total deposits excluding P.R.
46,299,531
45,420,914
878,617
[1]
12,376,316
11,730,273
646,043
Savings, NOW and money market deposits (non-brokered)
7,743,663
7,087,904
655,759
Time deposits (non-brokered)
797,981
645,254
152,727
Sub-total P.R.
20,917,960
19,463,431
1,454,529
$
$
$
2,333,146
[1] Includes interest bearing demand deposits.
borrowings totaled
$1.4 billion
at June
$1.2
was
mainly
related
to
higher
FHLB
by
$236.5
mainly
at
PB.
Refer
to
Note
to
the
Statements for detailed
Corporation’s borrowings. Also,
refer to the
Liquidity section in
this MD&A for
information on the Corporation’s funding sources.
Stockholders’ Equity
Stockholders’ equity totaled $6.0 billion at June 30, 2025, an increase of $341.0 million when compared to December 31, 2024. The
increase was
principally due
to net
income for
the six
2025 of
$387.9 million,
the after-tax
effect of the
decrease in net unrealized losses in
the portfolio of AFS securities
of $188.6 million and the
amortization of unrealized
losses
from
previously reclassified
to
HTM
of
$73.2 million,
offset
by
an
increase in
treasury
stock
of
$226.9
million, mainly due to
common stock repurchases, and
the common and preferred dividends
declared of $96.9 million.
Refer to the
Consolidated Statements
of Financial
Condition, Comprehensive
Income and
Changes in
Stockholders’ Equity
for information
on
the composition of stockholders’ equity.
The composition of the Corporation’s financing to total assets
at June 30, 2025 and December 31, 2024
is included in Table 8.
Table 8 - Financing to Total
Assets
% (decrease) increase
% of total assets
(Dollars in millions)
from 2024 to 2025
Non-interest-bearing core deposits
$
15,115
$
15,139
(0.2)
%
19.9
%
20.7
%
Interest-bearing core deposits
46,517
44,622
4.2
61.2
61.1
Interest-bearing other deposits
5,586
5,123
9.0
7.3
7.0
Repurchase agreements
1.8
0.1
0.1
144.4
0.7
0.3
(9.8)
1.1
1.2
1,479
1,372
7.8
1.9
1.9
5,954
5,613
6.1
7.8
7.7
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
to
the
Corporation,
BPPR
and
PB
(“Basel
III
capital
rules”)
are
based
on
the
final
capital
framework for strengthening international capital standards, known
as Basel III, of the Basel Committee on Banking Supervision.
As
of June 30,
2025, the Corporation’s, BPPR’s
and PB’s capital
ratios continue to
exceed the minimum requirements
for being “well-
capitalized”.
The risk-based
capital ratios
presented in
Table
9,
which include
common equity
tier 1,
Tier
1 capital,
total capital
and leverage
capital as of June 30, 2025 and December
Table 9 - Capital Adequacy
Data
Common equity tier 1 capital:
Common stockholders' equity - U.S. GAAP basis
$
5,931,875
$
5,590,923
CECL transitional amount
[1]
42,375
AOCI related adjustments due to opt-out election
1,325,146
1,589,875
Goodwill, net of associated deferred tax liability (DTL)
(653,493)
(657,181)
Intangible assets, net of associated DTLs
(5,844)
(6,826)
Deferred tax assets and other deductions
(228,617)
(296,374)
Common equity tier 1 capital
$
6,369,067
$
6,262,792
Additional tier 1 capital:
22,143
22,143
Additional tier 1 capital
$
22,143
$
22,143
Tier 1 capital
$
6,391,210
$
6,284,935
Tier 2 capital:
Trust preferred securities subject to phase in as
tier 2
192,674
192,674
Other inclusions (deductions), net
503,781
490,594
Tier 2 capital
$
696,455
$
683,268
Total risk-based capital
$
7,087,665
$
6,968,203
Minimum total capital requirement to be well capitalized
$
4,003,691
$
3,907,346
Excess total capital over minimum well capitalized
$
3,083,974
$
3,060,857
Total risk-weighted
assets
$
40,036,914
$
39,073,462
Total assets for leverage
ratio
$
75,114,655
$
72,593,464
Risk-based capital ratios:
Common equity tier 1 capital
15.91
%
16.03
%
Tier 1 capital
15.96
16.08
Total capital
17.70
17.83
Tier 1 leverage
8.51
8.66
[1] The CECL transitional amount includes the impact
of Popular's adoption of the new CECL accounting standard
on January 1, 2020.
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
at least 6.5%,
a Tier
1 capital ratio
of at least
8% and a
total risk-based
ratio of at
least
10%. The Corporation, BPPR and PB leverage ratio, common equity
Tier 1 ratio and Tier
1 capital ratio, respectively as of June 30,
2025, continue to exceed the minimum requirements
for being “well-capitalized” under the Basel III
capital rules.
Pursuant
to
the
of
the
CECL
standard
on
January
1,
2020,
the
elected
to
use
the
five-year
transition
period option
as
provided in
the
final
interim
regulatory capital
rules effective
March 31,
The
five-year
transition
period provision delayed for two years the estimated impact of CECL on regulatory capital, followed by a three-year transition period
to phase out
the aggregate amount of
the capital benefit provided
during the initial two-year
delay. During
the first quarter
of 2025,
the Corporation phased-in all the cumulative CECL
deferral over the three-year transition period.
The decrease in the common
equity Tier I
capital ratio, Tier
I capital ratio, total capital
ratio,
and leverage ratio as of
as compared to December 31, 2024
was mainly due to
higher risk weighted assets driven by
the increase in loans held
in portfolio,
the
of
shares
under
the
Program
and
common
stock
dividends,
offset
by
the
six-month
period’s earnings.
Reconciliation to Tangible Common Equity and Tangible Assets
Table
10 provides
a reconciliation of
total stockholders’ equity
to tangible common
equity and total
assets to tangible
assets as
of
June 30, 2025, and December 31, 2024.
Table 10 - Reconciliation
of Tangible Common Equity
and Tangible Assets
(In thousands, except share or per share information)
Total stockholders’
equity
$
$
Less: Preferred stock
(5,844)
(6,826)
Total tangible common
equity
$
5,123,077
$
4,781,143
$
$
(5,844)
(6,826)
Total tangible assets
$
75,256,292
$
72,235,603
Tangible common
equity to tangible assets
6.81
%
6.62
%
Common shares outstanding at end of period
70,141,291
Tangible book value
per common share
$
75.41
$
68.16
Quarterly average
Total stockholders’
equity [1]
$
6,849,789
$
6,620,766
Average unrealized (gains) losses on AFS securities
transferred to HTM
334,183
505,791
Adjusted total stockholder's equity
7,183,972
7,126,557
Less: Preferred Stock
(802,953)
(804,411)
(6,096)
(7,288)
Total tangible common
equity
$
6,352,780
$
6,292,715
Return on average tangible common equity
13.26
%
11.22
%
[1] Average balances exclude unrealized gains or
losses on debt securities available-for-sale.
RISK MANAGEMENT
Market / Interest Rate Risk
The Corporation’s assets that are mainly subject to market valuation risk are debt securities classified as available-for-sale. Refer to
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
available-for-sale and
held-to-maturity amounted
to
$20.5 billion
and
$7.5 billion,
respectively, as of June 30, 2025. Other assets subject to market risk include mortgage servicing rights ("MSRs") with a fair value of
$103.1 million as of June 30, 2025.
Interest Rate Risk (“IRR”)
The Corporation’s net interest income is subject
to various categories of interest rate risk,
including repricing, basis, yield curve and
option risks.
In managing
interest rate
risk, management may
alter the
mix of
floating and
fixed rate
liabilities, change
pricing
schedules,
adjust
through
sales
and
purchases
of
and
enter
into
derivative
contracts,
among other alternatives.
Management utilizes various tools to assess IRR, including Net Interest
Income (“NII”) simulation modeling, static gap analysis, and
Economic Value of Equity (“EVE”) to monitor the risk arising from the dynamic characteristics of assets and liabilities subject to IRR.
The
three
methodologies complement
each
other
and
are
used jointly
in
the
evaluation of
the
Corporation’s IRR.
NII simulation
modeling is prepared for a five-year period, which in conjunction with the EVE analysis, provides management a better view of long-
term IRR.
Net
income
simulation
performed by
legal
entity and
on
a
consolidated
basis
is
used
to
estimate the
potential
change
in
net
income
from
hypothetical
changes
in
rates.
Sensitivity
is
calculated
using
a
simulation model which incorporates actual balance
sheet figures detailed by maturity and interest
yields or costs.
Management assesses interest
rate risk
by comparing various
NII simulations under
different interest rate
scenarios to assess
the
degree of
change and
the projected
shape of
the yield
curve. Management
also performs
analyses to
isolate and
measure basis
and
prepayment
risk
exposures.
These
models
are
periodically
monitored.
Assumptions
are
validated
by
and
are
subject to independent validations according to the Corporations’
Model Governance Policy.
The Corporation processes NII
simulations under interest rate
scenarios in which the
yield curve is assumed
to rise and
decline by
the same magnitude
(parallel shifts). The
rate scenarios considered in
these market risk
simulations include instantaneous parallel
changes of
-100,
-200, +100,
and +200
basis points
succeeding twelve-month
period. Assumptions
these
analyses
include
that
the
balance
sheet
remains
flat,
relative
levels
of
market
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
may
engage
in
as
a
to
future
changes
in
rates.
is also
subject to
the risk
inherent in
the use
of different
rate indexes
for the
liabilities, as well the
risk of pricing lags
due to contractual or
timing differences between the
market and management response
to
changes
in
the
rate
environment.
These
forward-looking
computations
are
best
based
on
known
and
available information and actual results
may differ.
The following table presents the
results of the simulations at
June 30, 2025 and
December 31, 2024, assuming a static balance
sheet and parallel changes over flat spot rates
over a one-year time horizon:
Table 11
- Net Interest Income Sensitivity (One Year
Projection)
Amount Change
Percent Change
Amount Change
Percent Change
Change in interest rate
+200 basis points
22,433
0.85
44,747
1.78
+100 basis points
10,515
0.40
22,917
0.91
-100 basis points
(12,636)
(0.48)
9,157
0.36
-200 basis points
(18,563)
(0.71)
0.02
As of June
30, 2025, NII simulations
show the Corporation maintains
an asset sensitive position
that is symmetric
in the rising
and
declining rates scenarios. Compared to the
results as of December 31, 2024,
the variation in sensitivity and the
resulting profile are
mainly driven
by updated
deposit beta
model assumptions that
reflect lower
elasticity in
declining rate
scenarios. In
declining rate
scenarios, the reduction in net interest income is driven by the repricing of short-term assets and variable rate loans offset in part by
declining
deposit
costs.
In
rising rate
scenarios, Popular’s
net interest
income
would increase
due
to
the
repricing
of
assets,
rate
loans,
and
intermediate
assets
coming
due
within
one
year,
that
are
offset
in
part
by
deposits costs
due to
BPPR’s large
proportion of
market-linked Puerto Rico
public sector
deposits. Changes
in the
balance sheet
during the quarter
led to reduced
asset sensitivity.
The Corporation purchased
$2.4 billion in
Notes with an
average
of
1.5
years.
Higher
loan
and
growth
in
market-linked
Puerto
Rico
public
sector
also
contributed to reduced asset sensitivity.
The
loan
and
are
subject
to
prepayment
risk.
Prepayment
risk
also
could
have
a
impact on the duration of mortgage-backed securities
and collateralized mortgage obligations.
Trading
engages in
trading activities
in the
at its
subsidiaries, BPPR
and Popular
Securities.
Popular Securities’
trading activities
consist primarily
of market-making
activities to
meet expected
customers’ needs
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.
and
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.
2025, the Corporation held
trading securities with a
fair value of
$29.6 million, representing 0.04%
of the Corporation’s
total assets, compared
with $32.8 million
and 0.05%, respectively,
at December 31,
- The trading
portfolio consists principally
of investment grade securities such as mortgage-backed securities of $23.0
million with a weighted average yield of 5.28% and U.S.
Treasuries of $5.8 million with a weighted average yield of 3.41% at June 30, 2025
and $29.1 million with a yield of 5.54% and $2.8
million with a yield of 3.28%, respectively, as of December 31, 2024.
The Corporation’s trading activities are
limited by internal policies. For each
of the two subsidiaries, the
market risk assumed under
trading
is
measured
by
the
5-day
net
value-at-risk
(“VAR”),
with
a
confidence
level
of
99%.
The
VAR
the
maximum estimated loss that may occur over a
5-day holding period, given a 99% probability.
The Corporation’s trading portfolio had a 5-day VAR of $0.4 million for the last week
in June 2025. VAR models include assumptions
and estimates
thus actual
results could
differ from
the outputs
from these
models and
assumptions. Back-testing is
performed on
model results to compare actual results against maximum
estimated losses, in order to evaluate model
and assumptions accuracy.
In the opinion of management, the size and composition
of the trading portfolio does not represent
a significant source of market risk
for the Corporation.
Liquidity
Liquidity Risk Management Process
has adopted
policies and
limits to
monitor the
Corporation’s liquidity
position and
that of
its banking
the Enterprise
Risk Management
section of
Management’s Discussion
and Analysis
the 2024
Form 10-K
for
information on the framework
in place to monitor,
review, and approve
policies to measure, limit and
manage funding activities and
strategies
impacting
risk.
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
has sufficient
to
meet
all
its
obligations,
finance
future
growth,
fund
planned
capital
and
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
funds for the Corporation,
representing
88% and 89% of
funding of the Corporation’s
total assets at June
30, 2025 and December
31, 2024, respectively.
The ratio of
total ending loans to
deposits remained at
57% at June
30, 2025 and
In
traditional deposits,
maintains borrowing
arrangements, which
$1.4 billion
in outstanding
balances at June 30, 2025 (December 31, 2024 - $1.2 billion). A detailed description of the Corporation’s borrowings, including their
terms, is
Note 15
to the
Statements. Also,
Cash Flows
in the
accompanying Consolidated Financial Statements provide
information on the Corporation’s cash inflows and outflows.
The
sections
provide
further
on
the
major
funding
and
needs,
as
well
as
the
risks
involved in these activities.
Banking Subsidiaries
Primary
sources of
funding
for the
banking subsidiaries
(BPPR and
PB
or,
collectively,
“the banking
subsidiaries”)
include
retail,
and
public
sector
unpledged
loan
securitization and, to a lesser extent, loan sales. In
addition, the Corporation maintains borrowing facilities with the FHLB and at the
of the
Bank of
(the “FRB”)
and has
a considerable
collateral pledged
that
can be used to raise funds under these facilities.
During the second quarter of 2025, BPPR was able to increase its available
liquidity by approximately $2.9 billion after the merger of
Popular Auto, LLC with
and into BPPR, effective
on May 1,
2025, that allowed BPPR
to pledge auto loans
and leases as collateral
under the federal
reserve’s discount
window. At
2025, the Corporation’s
available liquidity increased
to $26.1 billion
from
$21.6
billion on
- During
Corporation had
no material
incremental use
of its
available liquidity sources. The liquidity sources of
the Corporation at June 30, 2025 are presented
in Table 12 below:
Table 12 - Liquidity Sources
BPPR
Total
BPPR
Total
Unpledged securities and unused funding
sources:
Money market (excess funds at the
Federal Reserve Bank)
$
4,753,672
$
1,576,770
$
6,330,442
$
4,882,358
$
1,488,857
$
6,371,215
Unpledged securities
4,453,281
519,711
4,972,992
3,806,066
522,869
4,328,935
FHLB borrowing capacity
3,178,798
816,840
3,995,638
2,777,090
1,058,921
3,836,011
Discount window of the Federal Reserve
Bank borrowing capacity
7,895,298
2,875,787
10,771,085
4,839,388
2,178,646
7,018,034
Total available liquidity
$
20,281,049
$
5,789,108
$
26,070,157
$
16,304,902
$
5,249,293
$
21,554,195
Refer
to
Note
to
the
for
of
the
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
commitments,
provisions,
advances,
and
credit
card
licensing
The banking
subsidiaries maintain
sufficient funding
capacity to
address large
increases in
funding requirements
such as
deposit
outflows.
The
guidelines
that
require
the
banking
to
have
to
cover all short-term borrowings and a portion of deposits.
Deposits are
a key
funding. Refer
to Table
7 for
a breakdown
of deposits
by major
types. Core
deposits are
generated
from a large base of consumer, corporate and public sector customers. Core deposits
include certificates
of deposit under $250,000,
all
interest-bearing
transactional
deposit
accounts,
non-interest-bearing
and
savings
deposits.
Core
exclude
and
certificates
of
deposit
over
$250,000.
Core
excluding
P.R.
public
funds,
which
are
fully
collateralized, have
historically provided
with a
sizable source
of relatively
stable and
low-cost funds.
P.R.
public
funds, while
linked to
market interest
rates, provide
a stable
funding with
an attractive
earning spread.
As of
2025, total Puerto Rico public sector deposits were
$20.9 billion, compared to $19.5 billion at
continue to
represent 92%
of total
deposits at
$61.6
billion, as
of June
and compared
to
- Core deposits financed 85% of the Corporation’s
earning assets at June 30, 2025, compared
to 86% at December 31, 2024.
The distribution by maturity
of certificates of deposit
with denominations of $250,000 and
over at June 30,
2025 is presented in
the
table that follows:
Table 13 - Distribution by
Maturity of Certificates of Deposit of $250,000 and Over
3 months or less
$
2,591,418
Over 3 to 12 months
992,191
Over 1 year to 3 years
287,373
Over 3 years
147,470
Total
$
4,018,452
The
had
$1.7
billion
in
at
June
30,
2025,
which
financed
2%
of
its
total
assets
(December 31, 2024 - $1.6 billion and 2%,
respectively).
As of
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
resources to
address
a
stress
event.
Although
the
banking
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
or
general
market
were
to
deteriorate.
The
flexibility
would
be
severely
constrained
if
the
banking
are
unable
to
access
to
funding
or
if
funding
is
not
to
accommodate future
financing needs
at
acceptable interest
rates. The
banking subsidiaries
also
are required
to
deposit cash
or
qualifying
to
meet
margin
on
agreements,
deposit
and
other
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
flexibility
and
ability
to
grow
revenues may not increase proportionately to cover costs and
profitability would be adversely affected.
The Corporation considers balances in
excess of $250,000 to have a
higher potential liquidity risk.
Table
14 reflects the aggregate
balance in
deposit accounts
in excess
of $250,000,
including collateralized
public funds
and deposits
outside of
and its
territories.
Collateralized public funds, as presented in Table 14, represent public deposit balances from governmental
entities in the
U.S.
and
its
territories,
Puerto
Rico
and
the
United
States
Virgin
Islands,
based
on
such
jurisdictions’
applicable collateral requirements.
Table 14 - Deposits
30-Jun-25
BPPR
(Consolidated)
Deposits balances under $250,000 [1]
$
23,741,443
%
$
8,341,661
%
$
32,083,104
%
Transactional deposits balances over
$250,000
7,968,081
%
2,042,469
%
10,010,550
%
Time deposits balances over $250,000
2,262,268
%
833,527
%
3,095,795
%
Uninsured foreign deposits
444,748
%
%
444,748
%
Collateralized public funds
21,269,940
%
313,354
%
21,583,294
%
Intercompany deposits
195,313
%
415,184
%
%
$
55,881,793
%
$
11,946,195
%
$
%
[1] Includes the first $250,000 in balances of transactional
and time deposit accounts with balances in excess
of $250,000.
31-Dec-24
BPPR
(Consolidated)
Deposits balances under $250,000 [1]
$
23,588,937
%
$
7,961,334
%
$
31,550,271
%
Transactional deposits balances over
$250,000
8,046,175
%
1,944,674
%
9,990,849
%
Time deposits balances over $250,000
1,991,934
%
813,424
%
2,805,358
%
Uninsured foreign deposits
450,068
%
%
450,068
%
Collateralized public funds
19,771,083
%
316,716
%
20,087,799
%
Intercompany deposits
205,839
%
667,839
%
%
$
54,054,036
%
$
11,703,987
%
$
%
[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
Inc.
(holding company
only) and
PNA, include
cash on
hand,
dividends
banking
and
non-banking subsidiaries,
asset sales,
credit
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,
of the Corporation’s securities and capitalizing its subsidiaries.
The outstanding balance of notes payable at the
BHCs amounted to $594 million at June 30, 2025
and December 31, 2024.
The contractual maturities of the BHCs notes payable
at June 30, 2025 are presented in Table 15.
Table 15
- Distribution of BHC's Notes Payable by Contractual
Maturity
Year
$
395,865
Later years
198,386
Total
$
594,251
As of
BHCs had
cash and
money markets
investments totaling
$503 million
and borrowing
potential of
$165
million
from
its
secured
facility
with
BPPR.
The
BHCs’
continues
to
be
with
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.
latest quarterly
paid dividend
was $0.70
per share
or approximately
$48
million per quarter.
The BHCs have in
the past borrowed in the
corporate debt market primarily to finance
their non-banking subsidiaries and refinance
debt
obligations.
These
sources
of
funding
are
more
costly
given
that
two
out
of
three
credit
rating
rate
the
Corporation’s debt
securities below
“investment grade”.
has a
shelf registration
statement filed
and effective
with
the
Securities
and
Exchange
Commission,
which
permits
the
to
issue
an
unspecified
amount
of
debt
or
equity
Non-Banking Subsidiaries
The
sources
of
funding
for
the
non-banking
include
internally
generated
cash
flows
from
operations,
loan
sales, repurchase agreements, capital
injections and borrowed funds
from their direct
parent companies or the
holding companies.
The principal uses of funds for the non-banking
subsidiaries include repayment of maturing debt,
operational expenses and payment
of dividends to the BHCs.
Dividends
During
the
six
months
30,
2025,
the
Corporation declared
cash
dividends of
$1.40
per
common
share
($96.2 million in the
aggregate). The dividends for the
Corporation’s Series A preferred stock amounted to
$0.7 million.
On July 16,
Corporation announced an
increase in its
quarterly common stock
dividend from $0.70
to $0.75
per share, commencing
with the dividend payable in the fourth quarter of
2025, subject to the approval by the Corporation’s
Board of Directors.
During the six
2025, the BHCs
received dividends and distributions
amounting to $200 million
from BPPR,
$23 from
Popular International
Bank, Inc.
(“PIBI”) and
$15 million
from
its
other non-banking
subsidiaries. Dividends
from BPPR
constitute Popular,
Inc.’s primary
liquidity.
30, 2025,PIBI,
a wholly
owned
subsidiary of Popular, Inc., received $20.0 million in cash dividends
and $5.3 million in stock dividends from its investment
in BHD.
In
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
cash up
streamed to
the BHCs
banking subsidiaries.
This could,
in turn,
affect BHC’s
ability to
declare dividends
on its
outstanding common
and
preferred stock,
repurchase its
or
meet
its
debt
obligations, for
example. At
June
30,
2025,
BPPR could declare
a dividend of
up to
approximately $209 million
without prior approval
of the Federal
Reserve Board due
to its
retained income, declared dividend activity and transfers to statutory reserves over the measurement period.
In addition, pursuant to
the
FRB
requirements, PB
may not
declare
or
pay
a
dividend without
the
prior
approval
of
the
Board
and
the
NYSDFS.
Other Funding Sources and Capital
In
cash
reserves held
at
the
FRB
that
totaled $6.3
June
the
portfolio provides
an
source
of
liquidity,
which
may
be
realized
through
either
sales,
or
The
debt
consists
of
liquid
U.S.
debt
U.S.
agency
debt
U.S.
agency
and
U.S.
agency
that
can
be
used
to
raise
funds
in
the
repo
markets.
The
availability
of
would
be
subject
to
having
unpledged
collateral
at
the
time
the
transactions are
consummated, in addition
to overall
liquidity and
risk appetite
of the
various counterparties.
Table
12 for
details of
unpledged debt
available credit
facilities with
the FHLB
and the
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
may
be
provided
through
loan
maturities,
prepayments
and
sales.
The
loan
a
source
of
collateral to
secure the
available credit
facilities with
the FHLB
and the
of the
Bank. After
the
merger of Popular Auto LLC into its
parent company BPPR, effective on May 1, 2025, the
Corporation has $2.9 billion in auto loans
pledged at June 30, 2025, in
addition to mortgage loans, to secure credit
facilities with the Federal Reserve's discount window.
The
loan portfolio
can also
be used to
obtain funding
in the
capital markets. Mortgage
some types of
consumer loans, have
secondary markets which the Corporation could use.
Off-Balance Sheet Arrangements and Other Commitments
In the ordinary course
of business, the Corporation
engages in financial transactions that
are not recorded on
the balance sheet or
may be recorded on the balance sheet in amounts that are different than the full contract or notional amount of the transaction. As a
provider of
financial services,
routinely enters
into commitments
with off-balance
sheet risk
to meet
needs
of
its
customers.
Refer
to
Note
to
the
for
on
the
commitments to extent credit and other non-credit commitments.
Other types
of off-balance
sheet arrangements
that the
Corporation enters
in the
include derivatives,
leases
and
of
guarantees,
indemnifications,
and
representation
and
warranties.
Refer
to
Note
to
the
for
more
on
leases
and
to
Note
to
the
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
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
2025, and
December 31, 2024, and the results of
their operations for the six-month period ended June
30, 2025 and June 30, 2024. Excluded
are investments and equity in earnings from subsidiaries
and affiliates outside the obligor group.
Intercompany balances
and transactions
within the
obligor group
eliminated. Material
amounts due
from, due
to, and
transactions with subsidiaries and affiliates are shown separately. Related party transactions
are also presented separately.
Table 16 - Summarized Statement
of Condition
Assets
Cash and money market investments
$
502,784
$
634,809
35,557
35,150
Accounts receivables from non-obligor subsidiaries
29,111
14,602
Other loans (net of allowance for credit losses of $197 (2024
- $281))
24,791
25,381
Investment in equity method investees
5,281
5,279
83,401
65,483
$
680,925
$
780,704
Liabilities and Stockholders' equity
Accounts payable to non-obligor subsidiaries
$
5,004
$
12,163
594,251
593,571
129,332
126,718
Stockholders' (deficit) equity
(47,662)
48,252
Total liabilities and
stockholders' equity
$
680,925
$
780,704
Table 17 - Summarized Statement
of Operations
For the period ended
Income:
Dividends from non-obligor subsidiaries
$
215,100
$
313,000
Interest income from non-obligor subsidiaries and affiliates
2,248
7,106
Earnings (losses) from investments in equity method investees
(10)
Other operating income
6,155
2,439
Total income
$
223,504
$
322,535
Expenses:
Services provided by non-obligor subsidiaries and affiliates
(net of
reimbursement by subsidiaries for services provided by parent
of
$127,054 (2024 - $120,987))
$
7,739
$
6,447
Other expenses
14,359
22,685
[1]
5,952
22,208
Total expenses
$
28,050
$
51,340
$
195,454
$
271,195
[1] The
for the
ended
June
30, 2024,
$22.9
million
of
expenses,
of
which
$16.5
million
was
reflected
in
expense and
$6.4 million
was reflected
in other
operating expenses,
an out-of-period
adjustment associated
Corporation’s U.S.
subsidiary’s non-payment
of taxes
on certain
intercompany distributions
to the
Bank Holding
Company (BHC)
in Puerto
Rico, a foreign corporation for U.S. tax purposes.
In addition to the
dividend income reflected in the
Statement of Operations table
above, during the six months
30,
2025,
the
obligor
group
a
$23.0
million
of
dividend
from
non-obligor
subsidiary
which
was
recorded as a reduction to the investment (2024 -
$67.4 million).
Risk to Liquidity
The
may
come
under
pressure
if
it
experiences
unexpected
cash
outflows
due
to
deposit
withdrawals, which could arise
from various factors like
economic conditions, loss of
depositor confidence, competition, exogenous
events, regulatory requirements or changes, a
downgrade in credit rating, or other events
causing counterparties to avoid exposure.
Investors should refer to Liquidity Risks section of “Part I, Item 1A”
of 2024 Form 10-K for an additional discussion of liquidity
risks to
which the Corporation is subject.
Credit Risk
Geographic and Government Risk
The Corporation is exposed to geographic and government risk.
The Corporation’s assets and revenue composition by geographical
area and by
business segment reporting are
presented in Note 32 to the
Consolidated Financial Statements. Readers
should refer
to
Economic
and
Market
Risk
section
and
Business
Risk
Section
of
“Part
I,
Item
1A”
of
the
Form
10-K
for
an
on
how
the
by
global
and
local
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”) 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
(July 2023-June
- and
by
1.1% in
fiscal
year
2025 (July
2024-June 2025).
For fiscal
year 2026
(July
2025-June
2026),
the
Planning
Board
forecasts
more
modest
GNP
growth
of
0.5%.
Meanwhile,
the
Puerto
Rico
Economic
Activity
Index
showed a
0.9% year-over-year
decline and
a 0.5%
month-over-month increase
in February
- While
this index
is not
a direct
measure of real GNP, it serves as an indicator of ongoing economic activity.
In
and
2022,
inflation
rose
sharply
in
the
U.S.
and
Puerto
Rico
due
to
post-pandemic
demand
and
supply
chain
issues.
Inflation
began
to
by
mid-2022
as
the
Federal
Reserve
raised
rates,
largely
stabilizing
by
September
2024,
leading to
a series
of rate
reductions by the
Federal Reserve for
the first
time in
four years.
As of
June 2025,
Price Index
showed a
2.7% year-over-year increase,
which is
significantly lower
than peak
2022 inflation
levels but
still above
the
Federal Reserve’s
2%
target. In
Puerto
Consumer Price
Index
0.9% over
the 12
months ending
in June
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
pension liabilities, lost access to capital markets, and
faced a fiscal crisis.
In
response,
the
U.S.
Congress
enacted
PROMESA
in
June
PROMESA
an
Board
with
control over Puerto Rico’s
fiscal and economic affairs,
including those of its public
corporations, instrumentalities and municipalities
(collectively, “PR Government Entities”). On August 5, 2025, President Donald J. Trump dismissed five of the seven members of the
Oversight Board, reportedly due to inefficient leadership and
excessive spending. As of the date of
this report, the vacant Oversight
Board seats remain unfilled, and no official replacements have been announced. While the two remaining members may continue to
act
on
behalf
of
the
Board,
their
authority
is
limited
with
respect
to
certain
matters
specified
in
PROMESA
and
the
Board’s
by-laws.
It
is
still
too
early
to
determine
what
impact
these
changes
may
have
on
the
Board’s
operations or 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
two
mechanisms
for
the
of
the
of
PR
Government Entities:
(a) Title
III, an
in-court process
akin to
that of
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
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
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
metrics.
Municipalities
are
subject
to
PROMESA,
and
the
Board
has
required
certain
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
contracts.
To
date
no
has
availed
itself
of
the
debt
mechanisms available to them under PROMESA.
Exposure of the Corporation
The credit
quality of BPPR’s
loan portfolio
reflects, among other
things, the
general economic conditions
in Puerto
Rico and
other
adverse conditions affecting Puerto
Rico consumers and businesses.
Deterioration in the Puerto
Rico economy has resulted
in the
past, and could
result in the future,
in higher delinquencies, greater
charge-offs and increased losses,
which could materially affect
our financial condition and results of operations.
At June
direct exposure
to
PR Government
Entities totaled
$412 million,
of
which $362
million were
outstanding, compared
to $336
million, at
2024, all
of which
were outstanding.
PR
Government Entities
at June
included up
to
$47.4 million
in Automated
Clearing House
(“ACH”) transaction
exposure, none of which
was outstanding.
Substantially all of the
Corporation’s direct exposure outstanding at
were
obligations from various
Puerto Rico municipalities.
In most
cases, these were
“general obligations” of
a municipality,
to which
the
applicable municipality
has
pledged its
good faith,
credit
and unlimited
taxing
power,
or “special
obligations” of
a municipality,
to
which the applicable municipality has pledged basic property tax or sales tax
revenues.
At June 30, 2025, 81% of the
municipal loans
and securities
was concentrated
in the
municipalities of
San Juan,
Guaynabo, Carolina
and Caguas.
For
of
the
direct
to
the
Puerto
Rico
and
its
and
municipalities, refer to Note 20 – Commitments and
Contingencies to the Consolidated Financial
Statements.
at June 30,
had $212 million
in loans insured
or securities issued
by PR Governmental
Entities,
but
the principal
repayment is
non-governmental ($220 million
at
These included
$168
million
in
loans
insured
by
the
Puerto
Rico
Housing
Finance Authority
a
Puerto
Rico
Entity ($176 million at December 31, 2024).
The Corporation also had, at June 30,
2025, $37 million in bonds issued by
HFA which
are secured
by second mortgage
loans on
residential properties, and
HFA also
provides insurance to
cover
losses in the
event of a
borrower default, and
upon the satisfaction of
certain other conditions
($38 million at
HFA’s
ability to honor its
insurance will depend, among
other factors, on the
financial condition of HFA
at the time such
become
due
and
payable.
The
does
not
the
when
the
credit
losses
associated with this portfolio.
commercial loan
portfolio also
includes loans
to
private borrowers
who
are service
providers, lessors,
suppliers or
have
other
relationships
with
the
PR
government.
These
could
be
by
a
deterioration
in
the
fiscal
and
situation
of
PR
Entities.
Similarly,
and
loan
include
loans
to
and
retirees,
which
could
also
be
by
fiscal
measures,
such
as
employee
layoffs
or
furloughs or reductions in pension benefits, if the
fiscal and economic situation deteriorates.
As of June
30, 2025, BPPR had
$20.9 billion in deposits from
the Puerto Rico government, its
instrumentalities, and municipalities.
The
rate
at
which
public
deposit
may
decline is
difficult
to
predict.
The
amount
and
timing
of
any
such
reduction is likely to
be impacted by,
for example, the level
of federal assistance, the
speed at which such
assistance is distributed
and
condition, liquidity
and cash
management practices
of such
entities, as
well as
the ability
of
BPPR to
these customer relationships.
United States Virgin Islands
The
has
in
the
United
States
Virgin
Islands
(the
“USVI”)
and
has
credit
to
USVI
entities.
The USVI has
been experiencing a
number of fiscal
and economic challenges,
which could adversely
affect the
ability of its
public
corporations and instrumentalities to service their outstanding
debt obligations. PROMESA does not apply to the USVI
and, as such,
there
is
no
federal
legislation
permitting
the
of
the
debts
of
the
USVI
and
its
public
corporations
and
instrumentalities.
Non-Performing Assets
NPAs
include primarily
past-due loans
no longer
accruing interest,
renegotiated loans,
and real
estate property
through foreclosure. A summary, including certain credit quality metrics, is presented
in Table 18.
credit quality
metrics demonstrated
favorable trends
in the
of 2025
with improvements
in NPLs
and Net Charge-Offs (NCOs). The Corporation continues to
closely monitor the economic landscape and borrower performance, as
uncertainty
remains
a
key
consideration.
The
experience
managing
credit
risk
under
different
macroeconomic and
operating environments and,
more recently,
the steps
taken around
credit tightening
supports management’s
view
that
to
riskier
is
adequately
managed.
Nonetheless,
carefully
monitoring
the
of
our
loan
portfolio and its response to the environment will
continue to be a priority.
Total
NPAs of $357.8 million
as of June 30, 2025 decreased by
$50.3 million when compared with December 31, 2024. Total
NPLs
of $311.6
million decreased by
$39.2 million from December
31, 2024. BPPR’s
NPLs decreased by $34.4
million, mainly driven
by
lower consumer,
mortgage and commercial
NPLs by $12.9
million, $11.0
million and $8.9
million, respectively.
Popular U.S. NPLs
by
$4.7
mostly
driven
by
decreases
of
$1.9
million
and
$1.8
million
in
and
NPLs,
respectively.
On June
NPLs to total
loans held-in-portfolio was
0.82%, compared to
0.95% on December
Other
real estate owned loans (“OREOs”) decreased by $11.1 million from December 31, 2024. The decrease in OREO was mainly driven
by the combination of
sales and lower residential
property foreclosures. On June
30, 2025, NPLs secured
by real estate amounted
to
$189
million
in
the
Puerto
Rico
and
$50
million
in
Popular
U.S,
with
$200
million
and
$56
respectively, on December 31, 2024.
The Corporation’s commercial
loan portfolio secured
by real estate
(“CRE”) amounted to
$11.0
billion on June
with $3.0
billion secured by owner-occupied properties (December
31, 2024 - $10.9 billion and $3.2 billion, respectively).
The
non-owner occupied
CRE portfolio
was $5.5
June
split
between $3.3
billion in
BPPR
and $2.2
billion in
This portfolio is diversified across sectors: retail (33%), hotels (19%), and office
space (13%) which together represent
two-thirds of
total non-owner
occupied CRE
exposure. Specifically,
office space
leasing accounts
for just
1.8% ($688.8
million) of
loan portfolio,
mainly comprising
mid-rise
properties with
an average
loan size
of $2.4
million, and
is well
diversified by
tenant type.
Within CRE, the
commercial multi-family portfolio is
$2.5 billion (approximately 7%
of total loans),
concentrated in New
York
Metro
($1.5 billion), South Florida ($716.6 million) and Puerto Rico
($202.1 million) regions. In the New York Metro, there is no exposure to
rent-controlled buildings and rent-stabilized
units make up less than 40% of total units,
with most originated after 2019.
CRE NPLs amounted to
$52.5 million on June 30,
2025, compared with $53.7 million
on December 31, 2024. The
CRE NPL ratios
for
the
BPPR
and
Popular
U.S.
were
0.69%
and
0.30%,
on
June
30,
2025,
with
0.64%
and
0.37%, respectively, on December 31, 2024.
In addition
to the
NPLs included
in Table
18, on
2025, there
were $529
million of
performing loans,
mostly commercial
loans, which in management’s opinion, are currently subject to potential future classification as non-performing (December 31, 2024
- $596 million).
The following table presents the Corporation’s NPAs as of June 30, 2025 and December
31, 2024:
Table 18 - Non-Performing
Assets
BPPR
Popular
U.S.
Inc.
As a % of
loans HIP
by
category
BPPR
Popular
U.S.
Inc.
As a % of
loans HIP
by
category
$
$
10,751
$
10,925
0.4
%
$
$
8,700
$
8,779
0.4
%
Commercial real estate non-owner
6,084
7,893
13,977
0.3
6,429
8,015
14,444
0.3
Commercial real estate owner
27,320
27,551
0.9
25,258
5,191
30,449
1.0
8,588
2,836
11,424
0.1
19,335
1,748
21,083
0.3
42,166
21,711
63,877
0.3
51,101
23,654
74,755
0.4
Leasing
7,976
7,976
0.4
9,588
9,588
0.5
147,464
28,052
175,516
2.1
158,442
29,890
188,332
2.3
3,120
3,120
4.0
3,393
3,393
4.6
17,499
1,094
18,593
1.0
20,269
1,741
22,010
1.2
Auto
40,595
40,595
1.1
51,792
51,792
1.4
Other
1,948
1,948
1.2
0.5
60,042
4,214
64,256
0.9
72,960
5,145
78,105
1.1
Total non-performing
loans held-in-
257,648
53,977
311,625
0.8
%
292,091
58,689
350,780
0.9
%
Other real estate owned (“OREO”)
45,643
46,126
57,197
57,268
Total non-performing
assets
[1]
$
303,291
$
54,460
$
357,751
$
349,288
$
58,760
$
408,048
Accruing loans past due 90 days or
more
[2]
$
206,205
$
$
206,394
$
242,250
$
$
242,440
Ratios:
Non-performing assets to total assets
0.51
%
0.34
%
0.47
%
0.61
%
0.37
%
0.56
%
Non-performing loans held-in-portfolio
to loans held-in-portfolio
0.96
0.47
0.82
1.12
0.54
0.95
Allowance for credit losses to loans
2.53
0.79
2.02
2.56
0.69
2.01
Allowance for credit losses to non-
performing loans, excluding held-for-
sale
263.63
167.17
246.93
229.61
128.40
212.68
[1] There were no non-performing loans held-for-sale
as of June 30, 2025 and December 31, 2024.
[2] It is the Corporation’s policy to report delinquent
residential mortgage loans insured by FHA or guaranteed
by the VA as accruing
loans past due 90
days or
more
as
opposed
to
non-performing
since
the principal
repayment
is insured.
These
include
$52 million
of residential
loans
insured
by
FHA
or
by
the
VA
that
are
no
longer
accruing
as
of
June
30,
31,
$65
Furthermore, the Corporation
has $29 million
in reverse mortgage
loans which are
guaranteed by
FHA, but which
are currently
not accruing interest.
Due to the guaranteed
nature of the loans,
it is the Corporation’s
policy to exclude these
balances from non-performing
assets (December 31,
2024 -
$31 million).
For the quarter ended June 30,
2025, total inflows of NPLs held-in-portfolio, excluding consumer loans,
decreased by $26.1 million,
to the
inflows for
- Inflows
of NPLs
held-in-portfolio at
the BPPR
segment decreased
by
$8.8 million,
2024, mainly
lower mortgage
NPL inflows
by $6.6
million. Inflows
of NPLs
held-in-portfolio at the Popular U.S. segment decreased by
$17.3 million from the same period in
2024, driven by lower commercial
NPL inflows by $16.6 million, as the prior period
was impacted by a single $17.3 million loan.
Tables 19 to 25 present the Corporation’s inflows to NPLs for the quarters and six months ended
June 30, 2025 and 2024.
Table 19 - Activity in Non
-Performing Loans Held-in-Portfolio (Excluding Consumer
Loans)
BPPR
BPPR
$
191,103
$
46,594
$
237,697
$
209,543
$
53,544
$
263,087
Plus:
32,205
8,909
41,114
69,228
17,067
86,295
Less:
(2,385)
(433)
(2,818)
(4,940)
(433)
(5,373)
(790)
(583)
(1,373)
(1,717)
(1,713)
(3,430)
(30,503)
(4,744)
(35,247)
(82,484)
(18,740)
(101,224)
$
189,630
$
49,763
$
239,393
$
189,630
$
49,763
$
239,393
Table 20 - Activity in Non
-Performing Loans Held-in-Portfolio (Excluding Consumer
Loans)
BPPR
BPPR
$
229,796
$
49,478
$
279,274
$
254,476
$
22,354
$
276,830
Plus:
41,040
25,907
66,947
74,543
61,280
135,823
Less:
(4,540)
(24)
(4,564)
(8,649)
(24)
(8,673)
(5,590)
(18)
(5,608)
(13,899)
(968)
(14,867)
(40,746)
(26,324)
(67,070)
(86,511)
(33,645)
(120,156)
$
219,960
$
49,317
$
269,277
$
219,960
$
49,317
$
269,277
Table 21 - Activity in Non
-Performing Commercial Loans Held-in-Portfolio
BPPR
BPPR
$
42,597
$
17,507
$
60,104
$
51,101
$
23,654
$
74,755
Plus:
1,768
5,632
7,400
7,549
11,045
18,594
Less:
(140)
(140)
(260)
(260)
(403)
(583)
(986)
(1,142)
(1,713)
(2,855)
Loans returned to accrual status / loan
collections
(1,656)
(865)
(2,521)
(15,082)
(11,312)
(26,394)
$
42,166
$
21,711
$
63,877
$
42,166
$
21,711
$
63,877
Table 22 - Activity in Non
-Performing Commercial Loans Held-in-Portfolio
BPPR
BPPR
$
63,323
$
21,407
$
84,730
$
72,992
$
11,163
$
84,155
Plus:
4,031
21,940
25,971
8,374
36,979
45,353
Less:
(280)
(280)
(280)
(280)
(5,700)
(5,700)
(13,699)
(950)
(14,649)
(5,204)
(5,866)
(11,070)
(11,217)
(9,731)
(20,948)
$
56,170
$
37,763
$
93,933
$
56,170
$
37,763
$
93,933
Table 23 - Activity in Non
-Performing Construction Loans Held-in-Portfolio
BPPR
BPPR
$
$
$
$
6,378
$
$
6,378
Less:
(6,378)
(6,378)
$
$
$
$
$
$
Table 24 - Activity in Non
-Performing Mortgage Loans Held-in-Portfolio
BPPR
BPPR
$
148,506
$
29,087
$
177,593
$
158,442
$
29,890
$
188,332
Plus:
30,437
3,277
33,714
61,679
6,022
67,701
Less:
(2,245)
(433)
(2,678)
(4,680)
(433)
(5,113)
(387)
(387)
(575)
(575)
Loans returned to accrual status / loan
collections
(28,847)
(3,879)
(32,726)
(67,402)
(7,428)
(74,830)
$
147,464
$
28,052
$
175,516
$
147,464
$
28,052
$
175,516
Table 25 - Activity in Non
-Performing Mortgage Loans Held-in-Portfolio
BPPR
BPPR
$
166,473
$
28,071
$
194,544
$
175,106
$
11,191
$
186,297
Plus:
37,009
3,967
40,976
66,169
24,301
90,470
Less:
(4,260)
(24)
(4,284)
(8,369)
(24)
(8,393)
(18)
(200)
(18)
(218)
(35,542)
(20,458)
(56,000)
(68,916)
(23,914)
(92,830)
$
163,790
$
11,554
$
175,344
$
163,790
$
11,554
$
175,344
Loan Delinquencies
Another key measure used to evaluate and
monitor the Corporation’s asset quality is loan
delinquencies. Loans delinquent 30 days
or more, as a percentage of their related portfolio
category on June 30, 2025 and December 31, 2024,
are presented below.
Table 26 - Loan Delinquencies
Loans delinquent
30 days or more
Total delinquencies
as a percentage
of total loans
Loans delinquent
30 days or more
Total delinquencies
as a percentage
of total loans
$
21,937
$
0.87
%
$
15,826
$
0.66
%
Commercial real estate
non-owner occupied
17,272
0.31
24,925
0.46
Commercial real estate
41,413
1.38
42,311
1.34
37,213
0.46
49,942
0.65
117,835
0.62
133,004
0.71
3,720
0.25
1,039
0.08
Leasing
36,714
1.85
39,641
2.06
[1]
728,253
8.62
798,130
9.84
48,745
4.01
59,078
4.85
4,682
77,479
6.04
5,054
73,571
6.87
51,109
2.72
57,835
3.12
Auto
165,642
4.29
191,008
5.00
Other
5,567
168,775
3.30
3,930
171,778
2.29
275,745
3.83
316,905
4.44
2,898
5,423
Total
$
1,162,267
$
3.04
%
$
1,288,719
$
3.47
%
[1]
Loans delinquent 30 days or more includes $0.4 billion
of residential mortgage loans insured by FHA or guaranteed
by the VA as of June
30,
2025 (December 31, 2024 - $0.4 billion). Refer to Note
7 to the Consolidated Financial Statements for additional
information of guaranteed loans.
Allowance for Credit Losses Loans Held-in-Portfolio
The ACL
represents management’s
estimate of
expected credit
losses through
the remaining
contractual life
of the
different loan
segments, impacted by expected prepayments. The ACL
is maintained at a sufficient
level to provide for estimated credit
losses on
collateral dependent loans as well as loans modified
for borrowers with financial difficulties separately from the remainder
of the loan
portfolio. Refer to
Note 8 to
the Consolidated Financial
Statements, for additional
Corporation’s methodology to
estimate its ACL.
On June 30,
2025, the ACL increased by
$23.5 million from December 31,
2024 to $769.5 million. The
increase in ACL was
driven
by changes in the economic scenario
probability weights and increases in qualitative reserves, in
response to the current economic
environment uncertainty,
reserve build-up associated
with portfolio
growth and
unfavorable changes in
the economic
assumptions used
in the
ACL model.
These increases
were offset
in part
by the
net effect
of changes
in credit
quality and
NCOs
during the period.
Given that any economic outlook is inherently uncertain, the Corporation
leverages multiple scenarios to estimate
its
ACL.
Prior
to
the
first
quarter
of
2025,
the
the
baseline
the
highest
among
the
scenarios
used
to
the
ACL,
followed
by
the
given
the
uncertainties
in
the
outlook
and
downside risk, and
the optimistic scenario
had the lowest
probability. During
the first quarter
of 2025, the
Corporation modified the
weight assigned
to the
pessimistic scenario to
be equal
to the
baseline scenario
in response
to the
current economic
uncertainty,
resulting in
of $18.2
the reserves.
In
probability weight
for the
scenario was moderately decreased based on changes in the economic outlook and a reassessment of uncertainty compared to the
quarter.
This
change
resulted
in
a
$4.5
million
reduction
in
ACL
reserve
levels,
for
a
$13.7
million
net
from
31,
The
weight
for
the
remains
above
the
levels
observed
in
2024,
given
the
ongoing
uncertainty.
Refer
to
Note
to
the
Statements,
for
on
the
Corporation’s methodology to estimate its ACL, including
probability weights assigned
On
June
30,
2025,
the
ACL
for BPPR
$8.6
million
from
2024,
changes
in
the
weights that resulted
in a
$8.8 million net
ACL increase, coupled
with an increase
in the reserves
for auto loans
due to migrations
between FICO
score categories
and changes
in the
economic scenarios.
This increase
was partially
lower reserves
for
commercial loans
due to
improvements in credit
quality,
by ACL
reserve build-up
due to
portfolio growth. In
PB, on
June
30,
2025,
the
ACL
by
$14.9
when
to
31,
This
was
influenced
by
the forecast
of the
U.S. unemployment rate
as well
as higher
qualitative reserves for
the CRE
portfolio in
response to
current market volatility and economic uncertainty, coupled
with changes in the probability weights that resulted in a
$4.9 million net
increase.
The Corporation’s ratio of the allowance for credit losses to loans held-in-portfolio was 2.02% on June 30, 2025, compared to 2.01%
on
the ACL
to
NPLs held-in-portfolio
stood
at
246.9%, compared
to
212.7% on
Tables
27 and
28 detail
the allowance
for credit
losses by
loan categories
and the
percentage it
represents of
total loans
held-in-
portfolio and
NPLs. The
breakdown is
made for
analytical purposes,
and it
is not
necessarily indicative
of the
categories in
which
future loan losses may occur.
Table 27 - Allowance for Credit
Losses - Loan Portfolios
Total ACL
Total loans held-
ACL to loans held-
Total non-
ACL to non-
$
16,781
$
0.67
%
$
10,925
153.60
%
59,117
1.07
%
13,977
422.96
%
49,051
1.63
%
27,551
178.04
%
141,362
1.76
%
11,424
N.M.
$
266,311
$
1.40
%
$
63,877
416.91
%
10,579
0.72
%
Leasing
20,040
1.01
%
7,976
251.25
%
85,175
1.01
%
175,516
48.53
%
92,306
7.60
%
1,384
77,479
1.79
%
3,120
44.36
%
103,654
5.52
%
18,593
557.49
%
Auto
182,274
4.72
%
40,595
449.01
%
Other
7,762
168,775
4.60
%
1,948
398.46
%
$
387,380
$
5.38
%
$
64,256
602.87
%
Total
$
769,485
$
2.02
%
$
311,625
246.93
%
N.M. - Not meaningful.
Table 28 - Allowance for Credit
Losses - Loan Portfolios
Total ACL
Total loans held-
ACL to loans held-
Total non-
ACL to non-
$
9,236
$
0.38
%
$
8,779
105.21
%
54,494
1.02
%
14,444
377.28
%
49,828
1.58
%
30,449
163.64
%
146,006
1.89
%
21,083
692.53
%
$
259,564
$
1.39
%
$
74,755
347.22
%
11,264
0.89
%
Leasing
16,419
0.85
%
9,588
171.25
%
82,409
1.02
%
188,332
43.76
%
99,130
8.14
%
1,503
73,571
2.04
%
3,393
44.30
%
102,736
5.54
%
22,010
466.77
%
Auto
165,995
4.34
%
51,792
320.50
%
Other
7,004
171,778
4.08
%
769.67
%
$
376,368
$
5.27
%
$
78,105
481.87
%
Total
$
746,024
$
2.01
%
$
350,780
212.68
%
Annualized net charge-offs (recoveries)
annualized net charge-offs
(recoveries) to average
loans held-in-portfolio (“HIP”)
by loan
category for
the quarters and six months ended June 30, 2025
Table 29 - Annualized Net Charge
-offs (Recoveries) to Average Loans
Held-in-Portfolio
BPPR
BPPR
―
%
0.02
%
0.01
%
0.20
%
0.04
%
0.13
%
―
―
―
―
(0.04)
(0.04)
(0.14)
(0.01)
(0.12)
(0.23)
(0.01)
(0.19)
Leasing
0.56
―
0.56
0.60
―
0.60
2.29
4.00
2.33
2.68
6.58
2.80
Total annualized
net charge-offs
(recoveries) to average loans held-in-
0.61
%
0.07
%
0.45
%
0.79
%
0.16
%
0.61
%
BPPR
BPPR
(0.05)
%
0.02
%
(0.02)
%
0.25
%
0.04
%
0.15
%
―
―
―
―
(0.02)
(0.02)
(0.14)
(0.03)
(0.12)
(0.25)
(0.01)
(0.21)
Leasing
0.62
―
0.62
0.72
―
0.72
2.55
3.95
2.59
2.83
7.54
2.98
Total annualized
net charge-offs
(recoveries) to average loans held-in-
0.67
%
0.07
%
0.49
%
0.86
%
0.19
%
0.66
%
NCOs for the quarter ended June 30, 2025, amounted
to $42.2 million, decreasing by $11.4 million when compared to the same
period in 2024. The BPPR segment decreased by
$9.1 million, mainly driven by decreases of
$5.6 million and $4.9 million in
consumer and commercial NCOs, respectively. The PB segment NCOs decreased
by $2.3 million, mainly driven by lower
NCOs by $1.8 million
NCOs for the six months ended June 30, 2025,
amounted to $91.3 million, decreasing by $24.5
million when compared to the same
period in 2024. The BPPR segment decreased by
$18.6 million, mainly driven by decreases of
$14.4 million and $7.0 million in
commercial and consumer NCOs, respectively. The PB segment NCOs decreased
by $5.9 million, mainly driven by lower consumer
NCOs by $4.9 million.
Loan Modifications
For
the
quarter
ended
June
30,
2025,
loans
to
with
difficulty
to
$276.9
of
which
$266.6 million were in
accruing status. The BPPR segment’s
modifications to borrowers with financial difficulty
amounted to $217.5
million, mainly comprised of commercial and mortgage loans of $192.5
million and $17.4 million, respectively. A total of $10.7 million
of
the
were
related
to
loans.
The
Popular
U.S.
segment’s
to
borrowers with financial difficulty amounted to $59.4 million,
mostly comprised of commercial loans.
Refer
to
Note
to
the
for
on
made
to
experiencing financial difficulties.
ADOPTION OF NEW ACCOUNTING STANDARDS AND ISSUED BUT NOT
YET EFFECTIVE ACCOUNTING STANDARDS
Refer to Note 3, “New Accounting Pronouncements”
Market Risk
Quantitative and qualitative disclosures for the current
period can be found in the Market Risk
section of this report, which includes
changes in market risk exposures from disclosures presented
in the 2024 Form 10-K.
Disclosure Controls and Procedures
The Corporation’s management,
participation of the
Corporation’s Chief Executive
Officer and Chief
Financial Officer,
has
evaluated the effectiveness of the Corporation’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report. Based
on such evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer have concluded that,
as of the end of such
period, the Corporation’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a
timely basis,
information required to
be disclosed
by the
Corporation in
the reports
that it
files or
submits under
the Exchange Act
and
such
is
accumulated
and
communicated
to
management,
as
appropriate,
to
allow
timely
decisions
required disclosures.
Internal Control Over Financial Reporting
There have been no changes in the Corporation’s internal control over financial reporting (as such term is defined in Rules 13a-15(f)
and 15d-15(f) under
the Exchange Act)
that occurred during
the quarter ended
2025 that have
materially affected, or
are
reasonably likely to materially affect, the Corporation’s internal control
over financial reporting.
Part II - Other Information
For a discussion of Legal Proceedings, see Note 20
In addition to the other information set forth in
this report, you should carefully consider the risk
factors discussed under “Part I - Item
1A - Risk Factors” in our 2024 Form
10-K. These factors could materially adversely affect our business, financial condition, liquidity,
results of
operations and
capital position,
and could
cause our
actual results
to
differ
materially from
our historical
results or
the
results contemplated
by the
forward-looking statements
contained in
this report.
Also refer
to the
discussion in
“Part I
- Item
2 –
Management’s Discussion
and Analysis
of Financial
Condition and
Results of
Operations” in
this report
for additional
that may supplement or update the discussion
of risk factors below and in our 2024 Form 10-K.
There have been no material changes to the risk
factors previously disclosed under Item 1A of the
Corporation’s 2024 Form 10-K.
The risks described
in our 2024 Form
10-K and in
this report are not
the only risks
facing us. Additional risks
and uncertainties not
known
to
us
or
that
we
deem
to
be
immaterial
also
may
materially
adversely
affect
our
business,
condition, liquidity, results of operations and capital position.
Unregistered Sales of Equity Securities and
Use of Proceeds
The Corporation did not have any unregistered
sales of equity securities during the quarter ended
June 30, 2025.
Issuer Purchases of Equity Securities
sets forth the
details of
purchases of common
stock by
the Corporation and
its affiliated
purchasers during the
quarter ended June 30, 2025:
Issuer Purchases of Equity Securities
Not in thousands
Period
Total Number of
Shares Purchased [1]
Average Price Paid per
Share
Total Number of
Shares
Purchased as Part of Publicly
Announced Plans or Programs [2]
Approximate Dollar Value of
Shares that May Yet be
Purchased Under the Plans or
Programs [2]
April 1 - April 30
357,832
$
87.37
355,539
$129,330,233
May 1 -May 31
447,956
101.50
417,666
$86,774,331
June 1 - June 30
380,593
105.93
363,185
$48,375,729
Total
1,186,381
$
98.66
$48,375,729
[1]
Includes
2,293,
30,290
and
17,408
shares
of
the
common
stock
by
the
during
April,
May
and
June
2025,
in connection
satisfaction of
tax withholding
obligations on
vested awards
of restricted
stock or
restricted stock
units granted
to
directors and certain
employees under
Omnibus Incentive
Plan. The acquired
shares of common
stock were added
back to treasury
stock.
[2] As part of its capital
plan, in July 2024,
the Corporation announced plans
to repurchase up to
$500 million in common
stock and repurchases
began
in August 2024.
As of June 30, 2025,
the Corporation repurchased 4,663,379
shares of common stock for
$451.5 million at an average
price of $96.82
per share, under the previously announced share repurchase
authorization.
Defaults Upon Senior Securities
None.
Mine Safety Disclosures
Not applicable.
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).
Exhibits
Exhibit Index
Exhibit No
Exhibit Description
10.1
Form of Director Compensation Letter, Election Form, Restricted Stock Award Agreement and Restricted
Stock Unit Award Agreement, effective May 8, 2025
(1)*
10.2
Equity Award Agreement, dated as of June 26, 2025, by and between Ignacio Alvarez and Popular, Inc.
(1)*
10.3
2025 Long-Term Equity Incentive Award Agreement, dated as of June 26, 2025, by and between Javier D.
Ferrer and Popular, Inc.
(1)*
22.1
Issuers of Guaranteed Securities (Incorporated by reference to Exhibit 22.1 of Popular, Inc.’s Annual
Report on Form 10-K for the year ended December 31, 2024)
31.1
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(1)
31.2
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(1)
32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
(1)
32.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 d82325dex322.htm
(1)
- 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)
The cover page of Popular, Inc. Quarterly Report on Form 10-Q for the
quarter ended June 30, 2025,
formatted in Inline XBRL (included within the Exhibit
101 attachments)
(1)
(1)
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
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.
(Registrant)
Date: August 11, 2025
By: /s/ Jorge J. García
Jorge J. García
Executive Vice President &
Chief Financial Officer
Date: August 11, 2025
By: /s/ Denissa M. Rodríguez
Denissa M. Rodríguez
Senior Vice President & Corporate Comptroller
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.