Popular Inc (NASDAQ: BPOP) earns $245.7M and grows deposits in Q1 2026
Filing Impact
Filing Sentiment
Form Type
10-Q
Popular, Inc. reported solid quarterly results for the period ended March 31, 2026. Net income reached $245.7 million, up from $177.5 million a year earlier, with basic and diluted earnings per common share of $3.78 versus $2.56.
Total interest income was $947.2 million and net interest income rose to $670.2 million, while the provision for credit losses increased to $75.9 million. Non-interest income contributed $165.6 million and operating expenses were well controlled at $467.3 million, resulting in income before tax of $292.6 million.
The balance sheet remained sizeable and deposit-funded, with $76.1 billion in total assets and $67.6 billion in deposits as of March 31, 2026. The allowance for credit losses on loans stood at $823.7 million, and stockholders’ equity totaled $6.3 billion, reflecting ongoing dividends and share repurchases alongside retained earnings growth.
Positive
- Stronger profitability: Net income rose to $245.7 million from $177.5 million year over year, with EPS increasing to $3.78 from $2.56, reflecting meaningful earnings growth.
- Deposit and capital strength: Deposits reached $67.6 billion and stockholders’ equity $6.3 billion, while the bank continued common dividends and substantial share repurchases without apparent strain on regulatory capital levels.
Negative
- None.
Insights
Popular delivered stronger profitability with stable credit quality and solid deposit growth.
Popular, Inc. generated net income of $245.7M for the quarter, up from $177.5M a year earlier, driven by higher net interest income of $670.2M. Earnings per common share rose to $3.78, indicating improved profitability despite a higher credit loss provision.
The provision for credit losses increased to $75.9M, and the allowance for credit losses on loans reached $823.7M. This reflects management’s forward-looking credit stance under the CECL framework while loan portfolios continued to perform with detailed monitoring of non-accrual and collateral-dependent exposures.
Total deposits climbed to $67.6B, supporting total assets of $76.1B, and stockholders’ equity was $6.3B. The company also continued returning capital via common dividends of $0.75 per share and share repurchases, while maintaining sizable liquidity and securities portfolios disclosed in detail for March 31, 2026.
Key Figures
Net income: $245.7M
EPS (basic & diluted): $3.78
Net interest income: $670.2M
+5 more
8 metrics
Net income
$245.7M
Quarter ended March 31, 2026 (vs. $177.5M in 2025)
EPS (basic & diluted)
$3.78
Quarter ended March 31, 2026 (vs. $2.56 in 2025)
Net interest income
$670.2M
Quarter ended March 31, 2026
Provision for credit losses
$75.9M
Quarter ended March 31, 2026
Total assets
$76.1B
As of March 31, 2026
Total deposits
$67.6B
As of March 31, 2026
Allowance for credit losses on loans
$823.7M
As of March 31, 2026
Stockholders’ equity
$6.31B
As of March 31, 2026
Key Terms
allowance for credit losses, current expected credit loss (CECL), non-accrual loans, collateral-dependent loans, +2 more
6 terms
allowance for credit losses financial
"At March 31,2026, the ACL increased by $ 15.6 million from December 31, 2025 to $ 823.7 million."
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
current expected credit loss (CECL) financial
"The Corporation follows the current expected credit loss (“CECL”) model to establish and evaluate the adequacy of the ACL."
non-accrual loans financial
"Loans in non-accrual status with no allowance at March 31, 2026 include $ 126 million in collateral dependent loans."
A non-accrual loan is a loan a lender has decided is unlikely to produce the scheduled interest payments, so the lender stops counting future interest as income and may record the loan at a reduced value. Think of it like renting out a house where the tenant has stopped paying: you stop counting future rent as earnings because it’s uncertain you’ll get it. For investors, a rise in non-accrual loans signals worsening credit quality, lower reported income and higher potential losses that can weaken a bank’s capital and share price.
collateral-dependent loans financial
"The Corporation has designated loans classified as collateral dependent for which the ACL is measured based on the fair value of the collateral."
debt securities available-for-sale financial
"Total debt securities available-for-sale were $ 21,733,269 at March 31, 2026."
debt securities held-to-maturity financial
"Total debt securities held-to-maturity were $ 6,962,659 at March 31, 2026."
1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended
or
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of Incorporation or
(IRS Employer Identification Number)
organization)
,
(Address of principal executive offices)
(Zip code)
(
)
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which
registered
The
NASDAQ Stock Market
The
NASDAQ Stock Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X]
[ ] No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit such files).
[X]
[ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated
filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
Accelerated filer [ ]
Non-accelerated filer [ ]
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section
13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest
practicable date: Common Stock, $0.01 par value,
2
POPULAR, INC.
INDEX
Part I – Financial Information
Page
Item 1. Financial Statements
Unaudited Consolidated Statements of Financial Condition at March 31, 2026 and
December 31, 2025
6
Unaudited Consolidated Statements of Operations for the quarters
ended March 31, 2026 and 2025
7
Unaudited Consolidated Statements of Comprehensive Income for the
quarters ended March 31, 2026 and 2025
8
Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the
quarters ended March 31, 2026 and 2025
9
Unaudited Consolidated Statements of Cash Flows for the quarters
ended March 31, 2026 and 2025
11
Notes to Unaudited Consolidated Financial Statements
13
Item 2. Management’s Discussion and Analysis of Financial Condition and
105
Item 3. Quantitative and Qualitative Disclosures about Market Risk
143
Item 4. Controls and Procedures
143
Part II – Other Information
Item 1. Legal Proceedings
144
Item 1A. Risk Factors
144
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
145
Item 3. Defaults Upon Senior Securities
145
Item 4. Mine Safety Disclosures
145
Item 5. Other information
145
Item 6. Exhibits
161
Signatures
3
Forward-Looking Statements
This Form 10-Q contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of
1995, including, without limitation, statements about Popular, Inc.’s (the “Corporation,” “Popular,” “we,” “us,” “our”) business,
financial condition, results of operations, plans, objectives and future performance. These statements are not guarantees of future
performance, are based on management’s current expectations and, by their nature, involve risks, uncertainties, estimates and
assumptions. Potential factors, some of which are beyond the Corporation’s control, could cause actual results to differ materially
from those expressed in, or implied by, such forward-looking statements. Risks and uncertainties include without limitation the effect
of competitive and economic factors, and our reaction to those factors, the adequacy of the allowance for loan losses, delinquency
trends, market risk and the impact of interest rate changes (including on our cost of deposits), capital markets conditions, capital
adequacy and liquidity, and the effect of legal and regulatory proceedings and new accounting standards on the Corporation’s
financial condition and results of operations. All statements contained herein that are not clearly historical in nature are forward-
looking, and the words “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” “project” and similar expressions and future
or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions are generally intended to
identify forward-looking statements.
Various factors, some of which are beyond Popular’s control, could cause actual results to differ materially from those expressed in,
or implied by, such forward-looking statements. Factors that might cause such a difference include, but are not limited to:
●
conditions in the geographic areas we serve and, in particular, in the Commonwealth of Puerto Rico (the
“Commonwealth” or “Puerto Rico”), where a significant portion of our business is concentrated;
●
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;
●
originations, affect our ability to originate and distribute financial products in the primary and secondary markets and
impact the value of our investment portfolio and our ability to return capital to our shareholders;
●
banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks;
●
Puerto Rico Government and the Federally-appointed oversight board on the economy, our customers and our
business;
●
difficult to predict and may be impacted by factors such as the amount of Federal funds received by the P.R.
Government and the rate of expenditure of such funds, as well as the financial condition, liquidity and cash
management practices of the Puerto Rico Government and its instrumentalities;
●
man-made disasters, acts of violence, war or conflicts, or pandemics, epidemics and other health-related crises, or the
fear of any such event occurring, any of which could cause adverse consequences for our business, including, but not
limited to, disruptions in our operations;
●
earnings, efficiencies and return on tangible common equity and accurately anticipate costs and expenses associated
therewith;
●
our ability to execute capital actions, including with respect to share repurchases and dividends;
4
●
●
related requirements and the impact of other proposed capital standards on our capital ratios;
●
●
examination and enforcement priorities;
●
●
as acquisitions and dispositions;
●
Puerto Rico and the other markets in which our borrowers are located;
●
●
●
●
●
core financial transaction processing and information technology services, or of third parties providing services to us,
including as a result of cyberattacks, e-fraud, denial-of-services and computer intrusion, that might result in, among
other things, loss or breach of customer data, disruption of services, reputational damage or additional costs to
Popular;
●
●
pending or future litigation and regulatory or government investigations or actions;
●
●
●
●
Moreover, the outcome of any legal and regulatory proceedings, as discussed in “Part II, Item 1. Legal Proceedings,” is inherently
uncertain and depends on judicial interpretations of law and the findings of regulators, judges and/or juries. Investors should refer to
the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”), as well as “Part II,
Item 1A” of our Quarterly Report on this Form 10-Q for a discussion of such factors and certain risks and uncertainties to which the
Corporation is subject.
All forward-looking statements included in this Form 10-Q are based upon information available to Popular as of the date of this
Form 10-Q, and other than as required by law, including the requirements of applicable securities laws, we assume no obligation to
5
update or revise any such forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date
of such statements.
6
POPULAR, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
[UNAUDITED]
March 31,
December 31,
(In thousands, except share information)
2026
2025
Assets:
Cash and due from banks
$
$
Money market investments:
Time deposits with other banks
Total money market investments
Trading account debt securities, at fair value
Debt securities available-for-sale, at fair value:
Pledged securities with creditors’ right to repledge
Other debt securities available-for-sale
Debt securities available-for-sale
Debt securities held-to-maturity, at amortized cost:
Pledged securities with creditors’ right to repledge
Other debt securities held-to-maturity
Debt securities held-to-maturity (fair value 2026 - $
; 2025 - $
)
Less – Allowance for credit losses
Debt securities held-to-maturity, net
Equity securities (realizable value 2026 - $
; 2025 - $
)
Loans held-for-sale, at fair value
Loans held-in-portfolio
Less – Unearned income
Total loans held-in-portfolio, net
Premises and equipment, net
Other real estate
Accrued income receivable
Mortgage servicing rights, at fair value
Other assets
Goodwill
Other intangible assets
Total assets
$
$
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing
$
$
Interest bearing
Total deposits
Assets sold under agreements to repurchase
Other short-term borrowings
Notes payable
Other liabilities
Total liabilities
Commitments and contingencies (Refer to Note 18)
Stockholders’ equity:
Preferred stock,
-
)
Common stock, $
) and
)
Surplus
Retained earnings
Treasury stock - at cost,
)
(2,875,230 )
(2,722,819 )
Accumulated other comprehensive loss, net of tax
(1,168,688 )
(1,182,087 )
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
$
The accompanying notes are an integral part of these Consolidated Financial Statements.
7
POPULAR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarters ended March 31,
(In thousands, except per share information)
2026
2025
Interest income:
Loans
$
$
Money market investments
Investment securities
Total interest income
Interest expense:
Deposits
Short-term borrowings
Long-term debt
Total interest expense
Net interest income
Provision for credit losses
Net interest income after provision for credit losses
Non-interest income:
Service charges on deposit accounts
Other service fees
Mortgage banking activities
Net gain (loss), including impairment on equity securities
(414 )
Net gain on trading account debt securities
Adjustments to indemnity reserves on loans sold
Other operating income
Total non-interest income
Operating expenses:
Personnel costs
Net occupancy expenses
Equipment expenses
Other taxes
Professional fees
Technology and software expenses
Processing and transactional services
Communications
Business promotion
Deposit insurance
Other real estate owned (OREO) expense (income)
(4,618 )
(3,330 )
Other operating expenses
Amortization of intangibles
Total operating expenses
Income before income tax
Income tax expense
Net Income
$
$
Net Income Applicable to Common Stock
$
$
Net Income per Common Share - Basic
$
$
Net Income per Common Share - Diluted
$
$
The accompanying notes are an integral part of these Consolidated Financial Statements.
8
POPULAR, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Quarters ended March 31,
(In thousands)
2026
2025
Net income
$
$
Other comprehensive income before tax:
Foreign currency translation adjustment
(256 )
(6,646 )
Amortization of net losses of pension and postretirement benefit plans
Unrealized holding (losses) gains on debt securities arising during the period
(33,096 )
Amortization of unrealized losses of debt securities transfer from available-for-sale to held-to-
maturity
Other comprehensive income before tax
Income tax expense
(2,383 )
(35,669 )
Total other comprehensive income, net of tax
Comprehensive income, net of tax
$
$
Tax effect allocated to each component of other comprehensive income:
Quarters ended March 31,
(In thousands)
2026
2025
Amortization of net losses of pension and postretirement benefit plans
(847 )
(852 )
Unrealized holding (losses) gains on debt securities arising during the period
(25,755 )
Amortization of unrealized losses of debt securities transfer from available-for-sale to held-to-
maturity
(9,375 )
(9,062 )
Income tax expense
$
(2,383 )
$
(35,669 )
The accompanying notes are an integral part of these Consolidated Financial Statements.
9
POPULAR, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
Accumulated
other
Common
Preferred
Retained
Treasury
comprehensive
(In thousands)
stock
stock
Surplus
earnings
stock
loss
Total
Balance at December 31, 2024
$
$
$
$
$
(2,228,535 )
$
(1,661,240 )
$
Net income
Issuances of common stock
Dividends declared:
Common stock
[1]
(48,409 )
(48,409 )
Preferred stock
(353 )
(353 )
Common stock purchases
[2]
(125,980 )
(125,980 )
Stock based compensation
Other comprehensive income, net of tax
Balance at March 31, 2025
$
$
$
$
$
(2,346,093 )
$
(1,489,987 )
$
Balance at December 31, 2025
$
$
$
$
$
(2,722,819 )
$
(1,182,087 )
$
Net income
Issuances of common stock
Dividends declared:
Common stock
[1]
(48,665 )
(48,665 )
Preferred stock
(353 )
(353 )
Common stock purchases
[3]
(160,228 )
(160,228 )
Stock based compensation
Other comprehensive income, net of tax
Other adjustments
Balance at March 31, 2026
$
$
$
$
$
(2,875,230 )
$
(1,168,688 )
$
[1]
Dividends declared per common share during the quarter ended March 31, 2026 - $
).
[2]
Includes common stock repurchases of $
information.
[3]
Includes common stock repurchases of $
information.
10
POPULAR, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
For the period ended
March 31,
March 31,
Disclosure of changes in number of shares:
2026
2025
Preferred Stock:
Balance at beginning and end of period
Common Stock – Issued:
Balance at beginning of period
Issuances of common stock
Balance at end of period
Treasury stock
(40,281,722 )
(35,885,041 )
Common Stock – Outstanding
The accompanying notes are an integral part of these Consolidated Financial Statements.
11
POPULAR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Quarters ended March 31,
(In thousands)
2026
2025
Cash flows from operating activities:
Net income
$
$
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
Amortization of intangibles
Depreciation and amortization of premises and equipment
Net accretion of discounts and amortization of premiums and deferred fees
(57,477 )
(68,861 )
Interest capitalized on loans subject to the temporary payment moratorium or loss mitigation alternatives
(1,238 )
(1,357 )
Share-based compensation
Fair value adjustments on mortgage servicing rights
Adjustments to indemnity reserves on loans sold
(35 )
(173 )
Earnings from investments under the equity method, net of dividends or distributions
(12,968 )
(8,621 )
Deferred income tax (benefit) expense
(564 )
Loss (gain) on:
Disposition of premises and equipment and other productive assets
(42 )
Sale of loans, including valuation adjustments on loans held-for-sale and mortgage banking activities
(317 )
(194 )
Sale of foreclosed assets, including write-downs
(2,309 )
(1,033 )
Acquisitions of loans held-for-sale
(3,583 )
(810 )
Proceeds from sale of loans held-for-sale
Net originations on loans held-for-sale
(10,194 )
(6,741 )
Net decrease (increase) in:
Trading debt securities
Equity securities
(849 )
Accrued income receivable
(7,770 )
Other assets
(2,087 )
Net (decrease) increase in:
Interest payable
(7,280 )
(7,370 )
Pension and other postretirement benefits obligation
Other liabilities
(86,060 )
(38,252 )
Total adjustments
(54,060 )
(5,444 )
Net cash provided by operating activities
Cash flows from investing activities:
Net (increase) decrease in money market investments
(29,624 )
Purchases of investment securities:
Available-for-sale
(10,385,670 )
(9,425,086 )
Equity
(10,139 )
(9,224 )
Proceeds from calls, paydowns, maturities and redemptions of investment securities:
Available-for-sale
Held-to-maturity
Proceeds from sale of investment securities:
Equity
Net repayments (disbursements) on loans
(118,418 )
Proceeds from sale of loans
Acquisition of loan portfolios
(160,670 )
(127,291 )
Payments to acquire equity method investments
(1,000 )
Acquisition of premises and equipment and other productive assets
(36,680 )
(51,526 )
Proceeds from sale of:
Premises and equipment and other productive assets
Foreclosed assets
Net cash used in investing activities
(1,096,470 )
(886,914 )
12
Cash flows from financing activities:
Net increase (decrease) in:
Deposits
Assets sold under agreements to repurchase
(4,424 )
Other short-term borrowings
(300,000 )
(25,000 )
Payments of notes payable
(25,000 )
(63,522 )
Principal payments of finance leases
(2,030 )
(908 )
Proceeds from issuances of common stock
Dividends paid
(49,949 )
(49,899 )
Net payments for repurchase of common stock
(154,742 )
(125,341 )
Payments related to tax withholding for share-based compensation
(4,648 )
(3,376 )
Net cash provided by financing activities
Net decrease in cash and due from banks, and restricted cash
(18,264 )
(38,784 )
Cash and due from banks, and restricted cash at beginning of period
Cash and due from banks, and restricted cash at the end of the period
$
$
The accompanying notes are an integral part of these Consolidated Financial Statements.
13
Notes to Consolidated Financial
Statements (Unaudited)
Note 1 -
Nature of operations
14
Note 2 -
Basis of presentation
15
Note 3 -
New accounting pronouncements
16
Note 4 -
Restrictions on cash and due from banks and
certain securities
20
Note 5 -
Debt securities available-for-sale
21
Note 6 -
Debt securities held-to-maturity
24
Note 7 -
Loans
27
Note 8
Allowance for credit losses – loans held-in-
portfolio
35
Note 9 -
Other real estate owned
65
Note 10 -
Other assets
66
Note 11 -
Goodwill and other intangible assets
68
Note 12 -
Deposits
69
Note 13 -
Borrowings
70
Note 14 -
Other liabilities
72
Note 15 -
Stockholders’ equity
73
Note 16 -
Other comprehensive income (loss)
74
Note 17 -
Guarantees
76
Note 18 -
Commitments and contingencies
77
Note 19-
Non-consolidated variable interest entities
80
Note 20 -
Related party transactions
82
Note 21 -
Fair value measurement
83
Note 22 -
Fair value of financial instruments
89
Note 23 -
Net income per common share
92
Note 24 -
Revenue from contracts with customers
93
Note 25 -
Stock-based compensation
94
Note 26 -
Income taxes
97
Note 27 -
Supplemental disclosure on the consolidated
statements of cash flows
100
Note 28 -
Segment reporting
101
14
Note 1 – Nature of Operations
Popular, Inc. (the “Corporation” or “Popular”) is a diversified, publicly owned financial holding company subject to the supervision
and regulation of the Board of Governors of the Federal Reserve System. The Corporation has operations in Puerto Rico, the
mainland United States (“U.S.”) and the U.S. and British Virgin Islands. In Puerto Rico, the Corporation provides retail, mortgage,
and commercial banking services, as well as auto and equipment leasing and financing through its principal banking subsidiary,
Banco Popular de Puerto Rico (“BPPR”), as well as broker-dealer and insurance services through specialized subsidiaries. In the
U.S. mainland, the Corporation provides retail and commercial banking services, as well as equipment leasing and financing,
through its New York-chartered banking subsidiary, Popular Bank (“PB” or “Popular U.S.”), which has branches located in New
York, New Jersey, and Florida.
15
Note 2 – Basis of Presentation
Basis of Presentation
The (unaudited) interim Consolidated Financial Statements are, in the opinion of management, a fair statement of the results for the
periods reported. The consolidated statement of financial condition presented as of December 31, 2025 was derived from audited
Consolidated Financial Statements of the Corporation for the year ended December 31, 2025.
Certain information and notes to the financial statements disclosures which would normally be included in financial statements
prepared in accordance with Accounting Principles Generally Accepted in the United States of America (U.S. GAAP), have been
condensed or omitted from the unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, these financial statements should be read in conjunction with the audited Consolidated Financial
Statements of the Corporation for the year ended December 31, 2025, included in the 2025 Form 10-K. Operating results for the
interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and contingent
assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
16
Note 3 - New accounting pronouncements
Recently Adopted Accounting Standards Updates
Standard
Description
Date of adoption
Effect on the financial statements
FASB ASU 2025-05,
Financial Instruments -
Credit Losses (Topic 326)
- Measurement of Credit
Losses for Accounts
Receivables and Contract
Assets
The Financial Accounting Standards Board
("FASB") issued Accounting Standards
Update ("ASU") 2025-05 in July 2025,
which permits entities to elect a practical
expedient when accounting for current
accounts receivable and current contract
assets arising from transactions accounted
for under Accounting Standards Codification
("ASC") Topic 606, Revenue from Contracts
with Customers. This practical expedient
establishes that, in developing reasonable
and supportable forecasts as part of
estimating expected credit losses, entities
assume that current conditions as of the
balance sheet date do not change for the
remaining life of the asset.
January 1, 2026
The Corporation was not impacted by
the adoption of this ASU since the
update does not require accounting
changes or new presentation or
disclosure requirements. The practical
expedient was not applied.
FASB ASU 2024-04, Debt
- Debt with Conversion
and Other Options
(Subtopic 470- 20) -
Induced Conversions of
Convertible Debt
Instruments
The FASB issued ASU 2024-04 in
November 2024, which clarifies the
requirements for determining whether
certain settlements of convertible debt
instruments should be accounted for as an
induced conversion. Also it makes
additional clarifications to assist
stakeholders in applying the guidance. The
ASU clarifies that the incorporation,
elimination, or modification of a volume-
weighted average price ("VWAP") formula
does not automatically cause a settlement
to be accounted for as an extinguishment
and that the induced conversion guidance
applies to a convertible debt instrument that
is not currently convertible as long as it had
a substantive conversion feature as of both
its issuance date and the date the
inducement offer is accepted.
January 1, 2026
The Corporation was not impacted by
the adoption of this ASU, but it will
prospectively consider this guidance for
any future transactions involving
induced conversions.
17
Accounting Standards Updates Not Yet Adopted
Standard
Description
Date of adoption
Effect on the financial statements
FASB ASU 2026-01,
Equity (Topic 505) - Initial
Measurement of Paid-in-
Kind Dividends
on Equity-Classified
Preferred Stock
The FASB issued ASU 2026
‑
01 in April
2026, which establishes authoritative
guidance on the initial measurement of
paid
‑
in
‑
kind (PIK) dividends on
equity
‑
classified preferred stock. The
update establishes a consistent
measurement requirement for PIK dividends
but does not address when such dividends
should be recognized. It requires PIK
dividends to be initially measured using the
stated PIK dividend rate in the preferred
stock agreement, generally applied to the
liquidation preference of the preferred stock.
January 1, 2027
The Corporation is currently evaluating
any impact that the adoption of this
guidance will have on its financial
statements and presentation and
disclosures. This ASU is not expected
to have a material impact.
FASB ASU 2025-10,
Government Grants (Topic
832) - Accounting for
Government Grants
Received by Business
Entities
The FASB issued ASU 2025-10 in
December 2025, which establishes the
accounting for government grants received
by a business entity. The update
establishes recognition, measurement, and
disclosure requirements for government
grants. It allows asset related grants to be
recognized either as deferred income or as
an adjustment to the cost basis of an asset
and income-related grants as deferred
income.
January 1, 2029
The Corporation is currently evaluating
any impact that the adoption of this
guidance will have on its financial
statements and presentation and
disclosures.
FASB ASU 2025-09,
Derivatives and Hedging
(Topic 815) - Hedge
Accounting Improvements
The FASB issued ASU 2025-09 in
November 2025, which aims to improve and
broaden hedge accounting under ASC
Topic 815 by allowing entities to group
forecasted transaction with similar risk
exposures, provides a model for hedging
choose-your rate debt, expands hedge
accounting for forecasted purchases and
sales of non financial assets, eliminates net
written option limitations for certain
compound derivatives, and resolves
recognition mismatches in dual hedging
strategies involving
foreign
‑
currency
‑
denominated debt.
January 1, 2027
The Corporation is currently evaluating
any impact that the adoption of this
guidance will have on its financial
statements and presentation and
disclosures.
FASB ASU 2025-08,
Financial Instruments -
Credit Losses (Topic 326)
- Purchased Loans
The FASB issued ASU 2025-08 in
November 2025, which aims to simplify and
reduce the complexity of the accounting for
purchased loans under ASC Topic 326. The
update expands the population of loans
subject to the gross-up approach to include
purchased seasoned loans, regardless
whether they had credit deterioration.
January 1, 2027
The Corporation is currently evaluating
any impact that the adoption of this
guidance will have on its financial
statements and presentation and
disclosures.
18
Accounting Standards Updates Not Yet Adopted
Standard
Description
Date of adoption
Effect on the financial statements
FASB ASU 2025-07,
Derivatives and Hedging
(Topic 815) and Revenue
from Contracts with
Customers (Topic 606) -
Derivatives Scope
Refinements and Scope
Clarification for Share-
Based Noncash
Consideration from a
Customer in a Revenue
Contract
The FASB issued ASU 2025-07 in
September 2025, which refines the scope of
derivative accounting under ASC Topic 815
and clarifies the treatment of share-based
noncash consideration under ASC Topic
606. The update reduces complexity and
diversity in application. Narrows the scope
of derivative accounting under ASC 815 for
certain contracts whose underlyings are
based on a party’s own operations or
activities; and clarifies that ASC 606
governs share
‑
based noncash
consideration received from a customer
until the entity’s right becomes
unconditional.
January 1, 2027
The Corporation is currently evaluating
any impact that the adoption of this
guidance will have on its financial
statements and presentation and
disclosures.
FASB ASU 2025-06,
Intangibles - Goodwill and
Other - Internal-Use
Software (Subtopic 350-
40) - Targeted
Improvements to the
Accounting for Internal-
Use Software
The FASB issued ASU 2025-06 in
September 2025, which seeks to modernize
the accounting for internal-use software
under ASC Subtopic 350-40, Intangibles—
Goodwill and Other—Internal-Use Software.
The update replaces the traditional stage-
based model (preliminary, development,
post-implementation) with a principles-
based framework that better reflects current
software development practices, including
agile and cloud-based approaches.
January 1, 2028
The Corporation is currently evaluating
the impact that the adoption of this
guidance will have on our accounting
for internal use software considering
our development practices which may
include agile and cloud-based
approaches.
FASB ASU 2025-04,
Compensation - Stock
Compensation (Topic 718)
and Revenue from
Contracts with Customers
(Topic 606) - Clarifications
to Share-Based
Consideration Payable to
a Customer
The FASB issued ASU 2025-04 in May
2025, which clarifies the accounting for
share-based awards granted as
consideration payable to a customer. The
ASU expands the definition of performance
condition for share-based consideration
under ASC 718 and eliminates the forfeiture
policy election for service conditions. It also
confirms that the variable consideration
constraint in ASC 606 does not apply to
such awards.
January 1, 2027
The Corporation does not expect to be
impacted by the adoption of this ASU
since it does not grant share-based
payment awards to customers.
FASB ASU 2025-03,
Business Combinations
(Topic 805) and
Consolidation (Topic 810)
- Determining the
Accounting Acquirer in the
Acquisition of a Variable
Interest Entity
The FASB issued ASU 2025-03 in May
2025 which requires that an entity consider
the factors in paragraphs 805-10-55-12
through 55-15 when it is involved in an
acquisition transaction effected primarily by
exchanging equity interests when the legal
acquiree is a variable interest entity ("VIE")
that meets the definition of a business to
determine which entity is the accounting
acquirer. This replaces the previous
requirement that the primary beneficiary
always is the acquirer.
January 1, 2027
The Corporation is currently evaluating
any impact that the adoption of this
guidance will have on its financial
statements and presentation and
disclosures.
19
Accounting Standards Updates Not Yet Adopted
Standard
Description
Date of adoption
Effect on the financial statements
FASB ASU 2024-03,
Income Statement -
Reporting Comprehensive
Income - Expense
Disaggregation
Disclosures (Subtopic
220-40) - Disaggregation
of Income Statement
Expenses (As updated by
ASU 2025-01)
The FASB issued ASU 2024-03 in
November 2024, which requires public
entities to disclose additional information
about specific expense categories in the
notes to financial statements at interim and
annual reporting periods to improve
financial transparency.
For fiscal years
beginning on
January 1, 2027
For interim periods
within fiscal years
beginning after
January 1, 2028
The Corporation is currently evaluating
the impact that the adoption of this
guidance will have on its financial
statements and presentation and
disclosures.
20
Note 4 - Restrictions on cash and due from banks and certain securities
BPPR is required by regulatory agencies to maintain average reserve balances with the Federal Reserve Bank of New York (the
“Fed”) or other banks. Required average reserve balances in BPPR amounted to $
- $
reserves.
At March 31, 2026, the Corporation held $
debt securities available for sale and equity securities (December 31, 2025 - $
securities available for sale and equity securities consist primarily of assets held for the Corporation’s non-qualified retirement plans
and fund deposits guaranteeing possible liens or encumbrances over the title of insured properties.
21
Note 5 – Debt securities available-for-sale
The following tables present the amortized cost, gross unrealized gains and losses, fair value, weighted average yield and
contractual maturities of debt securities available-for-sale at March 31, 2026 and December 31, 2025.
At March 31, 2026
Gross
Gross
Weighted
Amortized
unrealized
unrealized
Fair
average
(In thousands)
cost
gains
losses
value
yield
U.S. Treasury securities
Within 1 year
$
$
$
$
%
After 1 to 5 years
Total U.S. Treasury securities
Collateralized mortgage obligations - federal agencies
Within 1 year
After 1 to 5 years
After 5 to 10 years
After 10 years
Total collateralized mortgage obligations - federal agencies
Mortgage-backed securities - federal agencies
Within 1 year
After 1 to 5 years
After 5 to 10 years
After 10 years
Total mortgage-backed securities - federal agencies
Other
Within 1 year
Total other
Total debt securities available-for-sale
[1]
$
$
$
$
%
[1]
are not permitted to sell or repledge the collateral, of which $
Available for Sale securities with a fair value of $
22
At December 31, 2025
Gross
Gross
Weighted
Amortized
unrealized
unrealized
Fair
average
(In thousands)
cost
gains
losses
value
yield
U.S. Treasury securities
Within 1 year
$
$
$
$
%
After 1 to 5 years
Total U.S. Treasury securities
Collateralized mortgage obligations - federal agencies
Within 1 year
After 1 to 5 years
After 5 to 10 years
After 10 years
Total collateralized mortgage obligations - federal agencies
Mortgage-backed securities - federal agencies
Within 1 year
After 1 to 5 years
After 5 to 10 years
After 10 years
Total mortgage-backed securities - federal agencies
Other
Within 1 year
Total other
Total debt securities available-for-sale
[1]
$
$
$
$
%
[1]
Includes $
servicing agreements that the secured parties are not permitted to sell or repledge the collateral, of which $
funds. The Corporation had unpledged Available for Sale securities with a fair value of $
facilities.
The weighted average yield on debt securities available-for-sale is based on amortized cost; therefore, it does not give effect to
changes in fair value.
Debt securities not due on a single contractual maturity date, such as mortgage-backed securities and collateralized mortgage
obligations, are classified in the period of final contractual maturity. The expected maturities of collateralized mortgage obligations,
mortgage-backed securities and certain other securities may differ from their contractual maturities because they may be subject to
prepayments or may be called by the issuer.
At March 31, 2026, the Corporation did not intend to sell or believed it was more likely than not that it would be required to sell debt
securities classified as available-for-sale. There were no debt securities sold during the quarters ended March 31, 2026 and 2025.
23
The following tables present the Corporation’s fair value and gross unrealized losses of debt securities available-for-sale,
aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at
March 31, 2026 and December 31, 2025.
At March 31, 2026
Less than 12 months
12 months or more
Total
Gross
Gross
Gross
Fair
Fair
Fair
(In thousands)
value
losses
value
losses
value
losses
U.S. Treasury securities
$
$
$
$
$
$
Collateralized mortgage obligations - federal agencies
Mortgage-backed securities -federal agencies
Total debt securities available-for-sale in an unrealized loss position
$
$
$
$
$
$
At December 31, 2025
Less than 12 months
12 months or more
Total
Gross
Gross
Gross
Fair
Fair
Fair
(In thousands)
value
losses
value
losses
value
losses
U.S. Treasury securities
$
$
$
$
$
$
Collateralized mortgage obligations - federal agencies
Mortgage-backed securities - federal agencies
Total debt securities available-for-sale in an unrealized loss position
$
$
$
$
$
$
Debt securities available-for-sale in a continuous unrealized loss position for less than twelve months of $
31, 2026, compared to $
in the fair value of fixed-rate securities including U.S. Treasury securities and mortgage-backed securities.
As of March 31, 2026, the portfolio of available-for-sale debt securities reflects gross unrealized losses of $
2025 - $
portfolio’s longer duration. The portfolio of available-for-sale debt securities is comprised mainly of U.S Treasuries and obligations
from the U.S. Government, its agencies or government sponsored entities, including Federal National Mortgage Association
(“FNMA”), Federal Home Loan Mortgage Corporation (“FHLMC”) and Government National Mortgage Association (“GNMA”). These
securities carry an explicit or implicit guarantee from the U.S. Government, are highly rated by major rating agencies, and have a
long history of no credit losses. Accordingly, the Corporation applies a zero-credit loss assumption.
24
Note 6 –Debt securities held-to-maturity
The following tables present the amortized cost, allowance for credit losses, gross unrealized gains and losses, approximate fair
value, weighted average yield and contractual maturities of debt securities held-to-maturity at March 31, 2026 and December 31,
2025.
At March 31, 2026
Allowance
Carrying
Value
Gross
Gross
Weighted
Amortized
Book
[1]
for Credit
Net of
unrealized
unrealized
Fair
average
(In thousands)
cost
Value
Losses
Allowance
gains
losses
value
yield
U.S. Treasury securities
Within 1 year
$
$
$
$
$
$
$
%
After 1 to 5 years
Total U.S. Treasury securities
Obligations of Puerto Rico, States and
political subdivisions
Within 1 year
After 1 to 5 years
After 5 to 10 years
After 10 years
Total obligations of Puerto Rico, States and
political subdivisions
Collateralized mortgage obligations - federal
agencies
After 10 years
Total collateralized mortgage obligations -
federal agencies
Securities in wholly owned statutory business
trusts
After 5 to 10 years
Total securities in wholly owned statutory
business trusts
Total debt securities held-to-maturity [2]
$
$
$
$
$
$
$
%
[1]
Book value includes $
securities previously transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.
[2]
Includes $
Corporation had unpledged held-to-maturities securities with a fair value of $
25
At December 31, 2025
Allowance
Carrying
Value
Gross
Gross
Weighted
Amortized
Book
[1]
for Credit
Net of
unrealized
unrealized
Fair
average
(In thousands)
cost
Value
Losses
Allowance
gains
losses
value
yield
U.S. Treasury securities
Within 1 year
$
%
After 1 to 5 years
Total U.S. Treasury securities
Obligations of Puerto Rico, States and
political subdivisions
`
Within 1 year
After 1 to 5 years
After 5 to 10 years
After 10 years
Total obligations of Puerto Rico, States and
political subdivisions
Collateralized mortgage obligations - federal
agencies
After 10 years
Total collateralized mortgage obligations -
federal agencies
Securities in wholly owned statutory business
trusts
After 5 to 10 years
Total securities in wholly owned statutory
business trusts
Total debt securities held-to-maturity [2]
$
%
[1]
Book value includes $
previously transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.
[2]
Includes $
Corporation had unpledged held-to-maturities securities with a fair value of $
Debt securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period
of final contractual maturity. The expected maturities of collateralized mortgage obligations and certain other securities may differ
from their contractual maturities because they may be subject to prepayments or may be called by the issuer.
Credit Quality Indicators
The following describes the credit quality indicators by major security type that the Corporation takes into account to develop the
estimate of the allowance for credit losses for investment securities held-to-maturity.
As discussed in Note 2 of the 2025 Form 10-K, U.S. Treasury securities carry an explicit guarantee from the U.S. Government are
highly rated by major rating agencies and have a long history of no credit losses. Accordingly, the Corporation applies a zero-credit
loss assumption and no allowance for credit losses (“ACL”) for these securities has been established.
At March 31, 2026 and December 31, 2025, the “Obligations of Puerto Rico, States and political subdivisions” classified as held-to-
maturity, included securities issued by municipalities of Puerto Rico that are generally not rated by a credit rating agency. The
Corporation performs periodic credit quality reviews of these securities and internally assigns standardized credit risk ratings based
on its evaluation. For the definitions of the obligor risk ratings, refer to the Credit Quality section of Note 8 to the Consolidated
Financial Statements. This includes an amortized cost of $
municipalities of Puerto Rico, of which $
imposed by the issuing municipality (compared to $
At March 31, 2026, the portfolio of “Obligations of Puerto Rico, States and political subdivisions” also included $
securities issued by the Puerto Rico Housing Finance Authority (“HFA”), a government instrumentality, for which the underlying
source of payment is second mortgage loans in Puerto Rico residential properties (not the government), but for which HFA, provides
a guarantee in the event of default and upon the satisfaction of certain other conditions (December 31, 2025 - $
26
securities are not rated by a credit rating agency. Refer to Note 18
to the Consolidated Financial Statements
for additional
information on the Corporation’s exposure to the Puerto Rico Government.
A
deterioration of the Puerto Rico economy or of the fiscal health of the Government of Puerto Rico and/or its instrumentalities
(including if any of the issuing municipalities become subject to a debt restructuring proceeding under the Puerto Rico Oversight
Management and Economic Stability Act (“PROMESA”) could adversely affect the value of these securities, resulting in losses to the
Corporation.
At March 31, 2026, the portfolio of “Obligations of Puerto Rico, States and political subdivisions” had
HFA for which the underlying source of payment is U.S. Treasury securities (December 31, 2025 - $
were fully redeemed during this quarter. The Corporation applies a zero-credit loss assumption for these securities, and no ACL has
been established for these securities given that U.S. Treasury securities carry an explicit guarantee from the U.S. Government, are
highly rated by major rating agencies, and have a long history of no credit losses.
Delinquency status
At March 31, 2026 and December 31, 2025, there were
Allowance for credit losses on debt securities held-to-maturity
The allowance for credit losses related to the Obligations of Puerto Rico and the States and Political subdivisions securities at
March 31, 2026 was $
27
Note 7 – Loans
For a summary of the accounting policies related to loans, interest recognition and allowance for credit losses refer to Note 2 –
Summary of Significant Accounting Policies of the 2025 Form 10-K.
The following table presents the Corporation's loan purchases (including repurchases) for the quarters ended March 31, 2026 and
2025 by class of loans:
For the quarters ended March 31,
(In thousands)
2026
2025
Commercial
$
$
Mortgage
Ending balance
$
$
The following table presents the Corporation’s whole-loan sales for the quarters ended March 31, 2026 and 2025 by class of loans:
For the quarters ended March 31,
(In thousands)
2026
2025
Commercial
$
$
Construction
Mortgage
Ending balance
$
$
Delinquency status
The following tables present the amortized cost basis of loans held-in-portfolio (“HIP”), net of unearned income, by past due status,
and by loan class including those that are in non-performing status or that are accruing interest but are past due 90 days or more at
March 31, 2026 and December 31, 2025.
28
March 31, 2026
BPPR
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
days
days
or more
past due
Current
Loans HIP
loans
loans
Commercial multi-family
$
$
$
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Construction
Mortgage
Leasing
Consumer:
Credit cards
Home equity lines of credit
Personal
Auto
Other
Total
$
$
$
$
$
$
$
$
March 31, 2026
Popular U.S.
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
days
days
or more
past due
Current
Loans HIP
loans
loans
Commercial multi-family
$
$
$
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Construction
Mortgage
Consumer:
Credit cards
Home equity lines of
credit
Personal
Other
Total
$
$
$
$
$
$
$
$
29
March 31, 2026
Popular, Inc.
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
days
days
or more
past due
Current
Loans HIP
[2] [3]
loans
loans
Commercial multi-family
$
$
$
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Construction
Mortgage
[1]
Leasing
Consumer:
Credit cards
Home equity lines of credit
Personal
Auto
Other
Total
$
$
$
$
$
$
$
$
[1]
At March 31, 2026, mortgage loans held-in-portfolio include $
the Corporation’s policy is to exclude them from non-performing status, of which $
guaranteed loans includes $
Corporation has $
at March 31, 2026.
[2]
Loans held-in-portfolio are net of $
[3]
Includes $
of which $
Bank ("FRB") for discount window borrowings. As of March 31, 2026, the Corporation had an available borrowing facility with the FHLB and the
discount window of FRB of $
30
December 31, 2025
BPPR
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
or more
past due
Current
Loans HIP
loans
loans
Commercial multi-family
$
$
$
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Construction
Mortgage
Leasing
Consumer:
Credit cards
Home equity lines of credit
Personal
Auto
Other
Total
$
$
$
$
$
$
$
$
December 31, 2025
Popular U.S.
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
or more
past due
Current
Loans HIP
loans
loans
Commercial multi-family
$
$
$
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Construction
Mortgage
Consumer:
Credit cards
(14 )
(14 )
Home equity lines of credit
Personal
Other
Total
$
$
$
$
$
$
$
$
31
December 31, 2025
Popular, Inc.
Past due
Past due 90 days or more
30-59
60-89
90 days
Total
Non-accrual
Accruing
(In thousands)
or more
past due
Current
Loans HIP
[2] [3]
loans
loans
Commercial multi-family
$
$
$
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Construction
Mortgage
[1]
Leasing
Consumer:
Credit cards
Home equity lines of credit
Personal
Auto
Other
Total
$
$
$
$
$
$
$
$
[1]
At December 31, 2025 mortgage loans held-in-portfolio include $
which the Corporation’s policy is to exclude them from non-performing status, of which $
guaranteed loans includes $
The Corporation has $
interest at December 31, 2025.
[2]
Loans held-in-portfolio are net of $
[3]
Includes $
of which $
December 31, 2025, the Corporation had an available borrowing facility with the FHLB and the discount window of FRB of $
.0 billion and $
billion, respectively.
The following tables present the amortized cost basis of non-accrual loans as of March 31, 2026 and December 31, 2025 by class of
loans:
32
March 31, 2026
BPPR
Popular U.S.
Popular, Inc.
(In thousands)
Non-accrual
with no
allowance
Non-accrual
with
allowance
Non-accrual
with no
allowance
Non-accrual
with
allowance
Non-accrual
with no
allowance
Non-accrual
with
allowance
Commercial multi-family
$
$
$
$
$
$
Commercial real estate non-owner occupied
Commercial real estate owner occupied
Commercial and industrial
Mortgage
Leasing
Consumer:
Total
$
$
$
$
$
$
December 31, 2025
BPPR
Popular U.S.
Popular, Inc.
(In thousands)
Non-accrual
with no
allowance
Non-accrual
with
allowance
Non-accrual
with no
allowance
Non-accrual
with
allowance
Non-accrual
with no
allowance
Non-accrual
with
allowance
Commercial multi-family
$
$
$
$
$
$
Commercial real estate non-owner occupied
Commercial real estate owner occupied
Commercial and industrial
Mortgage
Leasing
Consumer:
Total
$
$
$
$
$
$
The Corporation has designated loans classified as collateral dependent for which the ACL is measured based on the fair value of
the collateral less cost to sell, when foreclosure is probable or when the repayment is expected to be provided substantially by the
sale or operation of the collateral and the borrower is experiencing financial difficulty. The fair value of the collateral is based on
appraisals, which may be adjusted due to their age, type, location, and condition of the property or area or general market
conditions to reflect the expected change in value between the effective date of the appraisal and the measurement date. Appraisals
are updated every one to two years depending on the type of loan and the total exposure of the borrower.
Loans in non-accrual status with no allowance at March 31, 2026 include $
2025 - $
31, 2026 (March 31, 2025 - $
The following tables present the amortized cost basis of collateral-dependent loans, for which the ACL was measured based on the
fair value of the collateral less cost to sell, by class of loans and type of collateral as of March 31, 2026 and December 31, 2025:
33
March 31, 2026
(In thousands)
Real Estate
Auto
Equipment
Other
Total
BPPR
Commercial multi-family
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Mortgage
Leasing
Consumer:
Personal
Auto
Other
Total BPPR
$
$
$
$
$
Popular U.S.
Commercial multi-family
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Commercial and industrial
Mortgage
Total Popular U.S.
$
$
$
$
$
Popular, Inc.
Commercial multi-family
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Mortgage
Leasing
Consumer:
Personal
Auto
Other
Total Popular, Inc.
$
$
$
$
$
34
December 31, 2025
(In thousands)
Real Estate
Auto
Equipment
Other
Total
BPPR
Commercial multi-family
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Mortgage
Leasing
Consumer:
Personal
Auto
Other
Total BPPR
$
$
$
$
$
Popular U.S.
Commercial multi-family
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Commercial and industrial
Mortgage
Total Popular U.S.
$
$
$
$
$
Popular, Inc.
Commercial multi-family
$
$
$
$
$
Commercial real estate:
Non-owner occupied
Owner occupied
Commercial and industrial
Mortgage
Leasing
Consumer:
Personal
Auto
Other
Total Popular, Inc.
$
$
$
$
$
35
Note 8 – Allowance for credit losses – loans held-in-portfolio
The
Corporation follows the current expected credit loss (“CECL”) model to establish and evaluate the adequacy of the ACL to
provide for expected losses in the loan portfolio. This model establishes a forward-looking methodology that reflects the expected
credit losses over the lives of financial assets starting when such assets are first acquired or originated. In addition, CECL provides
that the initial ACL on PCD financial assets be recorded as an increase to the purchase price, with subsequent changes to the
allowance recorded as a credit loss expense. The provision for credit losses recorded in current operations is based on this
methodology. Loan losses are charged and recoveries are credited to the ACL. The Corporation’s modeling framework includes
internally developed quantitative models that generate lifetime default and prepayment estimates as well as other loan level
techniques to estimate loss severity. These models combine credit risk factors which include the impact of loan modifications, with
macroeconomic expectations to derive the lifetime expected loss.
At March 31, 2026, the Corporation estimated the ACL by weighting the outputs of optimistic, baseline, and pessimistic scenarios.
The weightings applied are subject to evaluation on a quarterly basis as part of the ACL’s governance process. During the first
quarter of 2026, among the three scenarios evaluated to estimate the ACL, the baseline scenario was assigned the highest
probability, followed by the pessimistic scenario, where weight was increased during 2025 in response to ongoing uncertainties.
At March 31,2026, the ACL increased by $
The following tables present the changes in the ACL of loans held-in-portfolio and unfunded commitments for the quarters ended
March 31, 2026 and 2025.
36
For the quarter ended March 31, 2026
BPPR
Provision for
Allowance for
Beginning
credit losses
credit losses -
Ending
(In thousands)
Balance
(benefit)
PCD Loans
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
$
$
$
$
$
$
(11,131 )
(91 )
(2,618 )
(13,840 )
Construction
Mortgage
(483 )
Leasing
(4,085 )
Consumer
(19,235 )
(82 )
(20,744 )
(21,150 )
(747 )
(61,876 )
Total - Loans
$
$
$
$
(80,284 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
(603 )
$
$
$
$
Construction
Ending balance - unfunded commitments [1]
$
$
$
$
$
$
[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
37
For the quarter ended March 31, 2026
Popular U.S.
Provision for
Beginning
credit losses
Ending
(In thousands)
Balance
(benefit)
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
(109 )
$
$
$
Commercial real estate non-owner occupied
Commercial real estate owner occupied
Commercial and industrial
(29 )
Total Commercial
(29 )
Construction
Mortgage
(45 )
(19 )
Consumer
Home equity lines of credit
(400 )
Personal
(104 )
(1,818 )
Other
(13 )
Total Consumer
(500 )
(1,831 )
Total - Loans
$
$
$
(1,879 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
$
$
$
Construction
(222 )
Consumer
(19 )
Ending balance - unfunded commitments [1]
$
$
(9 )
$
$
$
[1]
Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
38
For the quarter ended March 31, 2026
Popular Inc.
Provision for
Allowance for
Beginning
credit losses
credit losses -
Ending
(In thousands)
Balance
(benefit)
PCD Loans
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
$
$
$
$
Commercial real estate non-owner occupied
(11,131 )
Commercial real estate owner occupied
(91 )
Commercial and industrial
(2,647 )
Total Commercial
(13,869 )
Construction
Mortgage
(502 )
Leasing
(4,085 )
Consumer
Credit cards
(19,235 )
Home equity lines of credit
(482 )
Personal
(22,562 )
Auto
(21,150 )
Other
(760 )
Total Consumer
(63,707 )
Total - Loans
$
$
$
$
(82,163 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
(371 )
$
$
$
$
Construction
Consumer
(19 )
Ending balance - unfunded commitments [1]
$
$
$
$
$
$
[1]
Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
39
For the quarter ended March 31, 2025
BPPR
Provision for
Allowance for
Beginning
credit losses
credit losses -
Ending
(In thousands)
Balance
(benefit)
PCD Loans
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
$
$
$
$
Commercial real estate non-owner occupied
(2,599 )
(65 )
Commercial real estate owner occupied
(1,742 )
(89 )
Commercial and industrial
(257 )
(3,312 )
Total Commercial
(3,963 )
(3,466 )
Construction
(24 )
Mortgage
(1,118 )
(435 )
Leasing
(4,544 )
Consumer
Credit cards
(18,865 )
Home equity lines of credit
(108 )
(25 )
Personal
(21,953 )
Auto
(21,056 )
Other
(880 )
Total Consumer
(62,779 )
Total - Loans
$
$
$
$
(71,224 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
$
$
$
$
Construction
(103 )
Ending balance - unfunded commitments [1]
$
$
$
$
$
$
[1]
Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
40
For the quarter ended March 31, 2025
Popular U.S.
Provision for
Beginning
credit losses
Ending
(In thousands)
Balance
(benefit)
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
$
$
$
Commercial real estate non-owner occupied
Commercial real estate owner occupied
(12 )
Commercial and industrial
(1,147 )
Total Commercial
(1,159 )
Construction
(1,728 )
Mortgage
Consumer
Home equity lines of credit
(136 )
(30 )
Personal
(2,626 )
Other
(29 )
Total Consumer
(2,685 )
Total - Loans
$
$
$
(3,844 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
(32 )
$
$
$
Construction
(1,917 )
Consumer
Ending balance - unfunded commitments [1]
$
$
(1,918 )
$
$
$
[1]
Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
41
For the quarter ended March 31, 2025
Popular Inc.
Provision for
Allowance for
Beginning
credit losses
credit losses -
Ending
(In thousands)
Balance
(benefit)
PCD Loans
Charge-offs
Recoveries
Balance
Allowance for credit losses - loans:
Commercial
Commercial multi-family
$
$
$
$
$
$
Commercial real estate non-owner occupied
(65 )
Commercial real estate owner occupied
(533 )
(101 )
Commercial and industrial
(4,459 )
Total Commercial
(4,625 )
Construction
(1,752 )
Mortgage
(1,071 )
(435 )
Leasing
(4,544 )
Consumer
Credit cards
(18,865 )
Home equity lines of credit
(244 )
(55 )
Personal
(24,579 )
Auto
(21,056 )
Other
(909 )
Total Consumer
(65,464 )
Total - Loans
$
$
$
$
(75,068 )
$
$
Allowance for credit losses - unfunded commitments:
Commercial
$
$
$
$
$
$
Construction
(2,020 )
Consumer
Ending balance - unfunded commitments [1]
$
$
(1,301 )
$
$
$
$
[1]
Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.
42
Modifications
A modification constitutes a change in loan terms in the form of principal forgiveness, an interest rate reduction, other than-
insignificant payment delay, term extension or combination of the above made to a borrower experiencing financial difficulty.
The amount of outstanding commitments to lend additional funds to debtors with financial difficulties owing receivables whose terms
have been modified during the quarter ended March 31, 2026 amounted to $
$
The following tables show the amortized cost basis of the loans modified to borrowers experiencing financial difficulties at the end of
the reporting period disaggregated by class of financing receivable and type of concession granted for the quarters ended March 31,
2026 and 2025. Loans modified to borrowers experiencing financial difficulties that were fully paid down, charged-off or foreclosed
upon by period end are not reported.
Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the quarter ended March 31, 2026
Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March
31, 2026
% of total class
of Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
Total
$
%
$
%
$
%
Term Extension
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March
31, 2026
% of total class
of Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
CRE owner occupied
%
%
%
Commercial and industrial
%
%
%
Mortgage
%
%
%
Consumer:
-
%
%
%
%
%
%
Total
$
%
$
%
$
%
Other-Than-Insignificant Payment Delays
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March
31, 2026
% of total class
of Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
CRE owner occupied
$
%
$
%
$
%
Commercial and industrial
%
%
%
Total
$
%
$
%
$
%
43
Combination - Term Extension and Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March
31, 2026
% of total class
of Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
Total
$
%
$
%
$
%
Combination - Other-Than-Insignificant Payment Delays and Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March
31, 2026
% of total class
of Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Amortized Cost
Basis at March
31, 2026
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Consumer:
%
%
%
Total
$
%
$
%
$
%
44
Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the quarter ended March 31, 2025
Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March 31,
2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Consumer:
%
%
%
%
%
%
%
%
%
Total
$
%
$
%
$
%
Term Extension
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March 31,
2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
CRE owner occupied
%
%
%
Commercial and industrial
%
%
%
Mortgage
%
%
%
Consumer:
%
%
%
%
%
%
Total
$
%
$
%
$
%
Other-Than-Insignificant Payment Delays
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March 31,
2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
CRE non-owner occupied
$
%
$
%
$
%
CRE owner occupied
%
%
%
Commercial and industrial
%
%
%
Total
$
%
$
%
$
%
Combination - Term Extension and Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March 31,
2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Mortgage
$
%
$
%
$
%
Consumer:
%
%
%
Total
$
%
$
%
$
%
Combination - Other-Than-Insignificant Payment Delays and Interest Rate Reduction
BPPR
Popular U.S.
Popular, Inc.
(Dollars in thousands)
Amortized Cost
Basis at March 31,
2025
% of total class
of Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Amortized Cost
Basis at March 31,
2025
% of total class of
Financing
Receivable
Commercial and industrial
$
%
$
%
$
%
Consumer:
%
%
%
Total
$
%
$
%
$
%
45
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulties:
For the quarter ended March 31, 2026
Interest rate reduction
Loan Type
Financial Effect
Commercial and industrial
Reduced weighted-average contractual interest rate from
% to
%.
Mortgage
Reduced weighted-average contractual interest rate from
% to
%.
Consumer:
Credit cards
Reduced weighted-average contractual interest rate from
% to
%.
Personal
Reduced weighted-average contractual interest rate from
% to
%.
Auto
Reduced weighted-average contractual interest rate from
% to
%.
Term extension
Loan Type
Financial Effect
CRE Non-owner occupied
Added a weighted-average of
CRE Owner occupied
Added a weighted-average of
Commercial and industrial
Added a weighted-average of
Mortgage
Added a weighted-average of
Consumer:
Personal
Added a weighted-average of
Auto
Added a weighted-average of
Other than insignificant payment delays
Loan Type
Financial Effect
CRE Owner occupied
Added a weighted-average of
Commercial and industrial
Added a weighted-average of
Consumer:
Credit cards
Added a weighted-average of
46
For the quarter ended March 31, 2025
Interest rate reduction
Loan Type
Financial Effect
Commercial and industrial
Reduced weighted-average contractual interest rate from
% to
%.
Mortgage
Reduced weighted-average contractual interest rate from
% to
%.
Consumer:
Credit cards
Reduced weighted-average contractual interest rate from
% to
%.
Personal
Reduced weighted-average contractual interest rate from
% to
%.
Other
Reduced weighted-average contractual interest rate from
.0% to
.0%.
Term extension
Loan Type
Financial Effect
CRE Non-owner occupied
Added a weighted-average of
CRE Owner occupied
Added a weighted-average of
Commercial and industrial
Added a weighted-average of
Mortgage
Added a weighted-average of
Consumer:
Personal
Added a weighted-average of
Auto
Added a weighted-average of
Other than insignificant payment delay
Loan Type
Financial Effect
CRE Non-owner occupied
Added a weighted-average of
CRE Owner occupied
Added a weighted-average of
Commercial and industrial
Added a weighted-average of
Consumer:
Credit cards
Added a weighted-average of
The following tables present, by class, the performance of loans that have been modified during the twelve months preceding March
31, 2026. The past due 90 days or more categories include all loans modified classified as non-accruing at the time of the
modification. These loans will continue in non-accrual status, and presented as past due 90 days or more, until the borrower has
demonstrated a willingness and ability to make the restructured loan payments (at least six months of sustained performance after
the modification or one year for loans providing for quarterly or semi-annual payments) and management has concluded that it is
probable that the borrower would not be in payment default in the foreseeable future.
47
BPPR
Past Due 90 days or more [1]
(In thousands)
30-59 days
60-89 days
Past due 90
days or more
Total past
due
Current
Total
With Payment
Default
Without
Payment Default
CRE non-owner occupied
$
$
$
$
$
$
$
$
CRE owner occupied
Commercial and industrial
Mortgage
Consumer:
Total
$
$
$
$
$
$
$
$
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability
to make the restructured loan payments. Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or
charged-off, whichever occurs first. The recorded investment as of period end is inclusive of all partial paydowns and charge-offs since the modification
date. Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
Popular U.S.
Past Due 90 days or more [1]
(In thousands)
30-59 days
60-89 days
Past due 90
days or more
Total past
due
Current
Total
With Payment
Default
Without
Payment Default
CRE non-owner occupied
$
$
$
$
$
$
$
$
Commercial and industrial
Mortgage
Consumer:
Total
$
$
$
$
$
$
$
$
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability
to make the restructured loan payments. Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or
charged-off, whichever occurs first. The recorded investment as of period end is inclusive of all partial paydowns and charge-offs since the modification
date. Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
Popular Inc.
Past Due 90 days or more [1]
(In thousands)
30-59 days
60-89 days
Past due 90
days or more
Total past
due
Current
Total
With Payment
Default
Without
Payment Default
CRE non-owner occupied
$
$
$
$
$
$
$
$
CRE owner occupied
Commercial and industrial
Mortgage
Consumer:
Total
$
$
$
$
$
$
$
$
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability
to make the restructured loan payments. Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or
charged-off, whichever occurs first. The recorded investment as of period end is inclusive of all partial paydowns and charge-offs since the modification
date. Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
48
The following tables present, by class, the performance of loans that have been modified during the twelve months preceding March
31, 2025.
BPPR
Past Due 90 days or more [1]
(In thousands)
30-59 days
60-89 days
Past due 90
days or more
Total past
due
Current
Total
With Payment
Default
Without
Payment Default
CRE non-owner occupied
$
$
$
$
$
$
$
$
CRE owner occupied
Commercial and industrial
Mortgage
Consumer:
Total
$
$
$
$
$
$
$
$
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability
to make the restructured loan payments. Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or
charged-off, whichever occurs first. The recorded investment as of period end is inclusive of all partial paydowns and charge-offs since the modification
date. Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
Popular U.S.
Past Due 90 days or more [1]
(In thousands)
30-59 days
60-89 days
Past due 90
days or more
Total past
due
Current
Total
With Payment
Default
Without
Payment Default
Commercial multi-family
$
$
$
$
$
$
$
$
CRE owner occupied
Commercial and industrial
Mortgage
Consumer:
Total
$
$
$
$
$
$
$
$
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability
to make the restructured loan payments. Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or
charged-off, whichever occurs first. The recorded investment as of period end is inclusive of all partial paydowns and charge-offs since the modification
date. Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
Popular Inc.
Past Due 90 days or more [1]
(In thousands)
30-59 days
60-89 days
Past due 90
days or more
Total past
due
Current
Total
With Payment
Default
Without
Payment Default
Commercial multi-family
$
$
$
$
$
$
$
$
CRE non-owner occupied
CRE owner occupied
Commercial and industrial
Mortgage
Consumer:
Total
$
$
$
$
$
$
$
$
[1] Loans that were in non-accrual status at the time of modification are presented as past due until the borrower has demonstrated a willingness and ability
to make the restructured loan payments. Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or
charged-off, whichever occurs first. The recorded investment as of period end is inclusive of all partial paydowns and charge-offs since the modification
date. Loans modified with financial difficulty that were fully paid down, charged-off or foreclosed upon by period end are not reported.
49
Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or charged-off,
whichever occurs first.
The following tables provide the outstanding balance of loans modified for borrowers under financial
difficulties that were subject to payment default and that had been modified during the twelve months prior to default.
Amortized Cost Basis of Modified Financing Receivables That Subsequently Defaulted During the Quarter Ended March 31, 2026
(In thousands)
Interest Rate
Reduction
Term Extension
Other-Than-
Insignificant
Payment Delays
Combination - Term
Extension and Interest
Rate Reduction
Combination - Other-
Than-Insignificant
Payment Delays and
Interest Rate
Reduction
Total
Commercial and industrial
$
$
$
$
$
$
Mortgage
Consumer:
Total
$
$
$
$
$
$
Amortized Cost Basis of Modified Financing Receivables That Subsequently Defaulted During the Quarter Ended March 31, 2025
(In thousands)
Interest Rate
Reduction
Term Extension
Other-Than-
Insignificant
Payment Delays
Combination - Term
Extension and Interest
Rate Reduction
Combination - Other-
Than-Insignificant
Payment Delays and
Interest Rate
Reduction
Total
CRE owner occupied
$
$
$
$
$
$
Commercial and industrial
Mortgage
Consumer:
Total
$
$
$
$
$
$
Credit Quality
The risk rating system provides for the assignment of ratings at the obligor level based on the financial condition of the borrower.
The risk rating analysis process is performed at least once a year or more frequently if events or conditions change which may
deteriorate the credit quality. In the case of consumer and mortgage loans, these loans are classified considering their delinquency
status at the end of the reporting period.
The following tables present the amortized cost basis, net of unearned income, of loans held-in-portfolio based on the Corporation’s
assignment of obligor risk ratings as defined at March 31, 2026 and December 31, 2025 and the gross charge-offs recorded by
vintage year. For the definitions of the obligor risk ratings, refer to the Credit Quality section of Note 8 to the Consolidated Financial
Statements included in the 2025 Form 10-K:
50
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
BPPR
Commercial:
Commercial multi-family
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
multi-family
$
$
$
$
$
$
$
$
$
Commercial real estate non-owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
real estate non-
owner occupied
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial real estate owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Doubtful
Total commercial
real estate owner
occupied
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial and industrial
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Loss
Total commercial
and industrial
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Construction
Pass
$
$
$
$
$
$
$
$
$
Watch
(247 )
Total construction
$
$
$
$
$
$
$
$
$
Mortgage
Pass
$
$
$
$
$
$
$
$
$
Substandard
Total mortgage
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
51
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
BPPR
Leasing
Pass
$
$
$
$
$
$
$
$
$
Substandard
Total leasing
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Consumer:
Credit cards
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total credit cards
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
HELOCs
Pass
$
$
$
$
$
$
$
$
$
Total HELOCs
$
$
$
$
$
$
$
$
$
Personal
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Personal
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Auto
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Auto
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Other consumer
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Other
consumer
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Total BPPR
$
$
$
$
$
$
$
$
$
52
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
Popular U.S.
Commercial:
Commercial multi-family
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
multi-family
$
$
$
$
$
$
$
$
$
Commercial real estate non-owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
real estate non-
owner occupied
$
$
$
$
$
$
$
$
$
Commercial real estate owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
real estate owner
occupied
$
$
$
$
$
$
$
$
$
Commercial and industrial
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
and industrial
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Construction
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total construction
$
$
$
$
$
$
$
$
$
Mortgage
Pass
$
$
$
$
$
$
$
$
$
Substandard
Total mortgage
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
53
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
Popular U.S.
Consumer:
Pass
$
$
$
$
$
$
$
$
$
Total credit cards
$
$
$
$
$
$
$
$
$
HELOCs
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total HELOCs
$
$
$
$
$
$
$
$
$
Personal
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Personal
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Other consumer
Pass
$
$
$
$
$
$
$
$
$
Total Other
consumer
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Total Popular U.S.
$
$
$
$
$
$
$
$
$
54
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
Popular, Inc.
Commercial:
Commercial multi-family
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
multi-family
$
$
$
$
$
$
$
$
$
Commercial real estate non-owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
real estate non-
owner occupied
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial real estate owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Doubtful
Total commercial
real estate owner
occupied
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial and industrial
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Loss
Total commercial
and industrial
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
55
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
Popular, Inc.
Construction
Pass
$
$
$
$
$
$
$
$
$
Watch
(247 )
Special Mention
Substandard
Total construction
$
$
$
$
$
$
$
$
$
Mortgage
Pass
$
$
$
$
$
$
$
$
$
Substandard
Total mortgage
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Leasing
Pass
$
$
$
$
$
$
$
$
$
Substandard
Total leasing
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
56
March 31, 2026
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2026
2025
2024
2023
2022
Prior
Years
Total
Popular, Inc.
Consumer:
Credit cards
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total credit cards
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
HELOCs
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total HELOCs
$
$
$
$
$
$
$
$
$
Personal
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Personal
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Auto
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Auto
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Other consumer
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Other
consumer
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Total Popular Inc.
$
$
$
$
$
$
$
$
$
57
December 31, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
BPPR
Commercial:
Commercial multi-family
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
multi-family
$
$
$
$
$
$
$
$
$
Commercial real estate non-owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
real estate non-
owner occupied
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial real estate owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Doubtful
Total commercial
real estate owner
occupied
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial and industrial
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Doubtful
Total commercial
and industrial
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Construction
Pass
$
$
$
$
$
$
$
$
$
Watch
Total construction
$
$
$
$
$
$
$
$
$
Mortgage
Pass
$
$
$
$
$
$
$
$
$
Substandard
Total mortgage
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
58
December 31, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
BPPR
Leasing
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total leasing
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Consumer:
Credit cards
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total credit cards
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
HELOCs
Pass
$
$
$
$
$
$
$
$
$
Total HELOCs
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Personal
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Personal
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Auto
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Auto
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Other consumer
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Other
consumer
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Total BPPR
$
$
$
$
$
$
$
$
$
59
December 31, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
Popular U.S.
Commercial:
Commercial multi-family
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
multi-family
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial real estate non-owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
real estate non-
owner occupied
$
$
$
$
$
$
$
$
$
Commercial real estate owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
real estate owner
occupied
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
60
December 31, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
Popular U.S.
Commercial and industrial
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
and industrial
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Construction
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total construction
$
$
$
$
$
$
$
$
$
Mortgage
Pass
$
$
$
$
$
$
$
$
$
Substandard
Total mortgage
$
$
$
$
$
$
$
$
$
61
December 31, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
Popular U.S.
Consumer:
Credit cards
Pass
$
$
$
$
$
$
$
(14 )
$
$
(14 )
Total credit cards
$
$
$
$
$
$
$
(14 )
$
$
(14 )
HELOCs
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total HELOCs
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Personal
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Personal
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Other consumer
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Other
consumer
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Total Popular U.S.
$
$
$
$
$
$
$
$
$
62
December 31, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
Popular, Inc.
Commercial:
Commercial multi-family
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
multi-family
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial real estate non-owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total commercial
real estate non-
owner occupied
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial real estate owner occupied
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Doubtful
Total commercial
real estate owner
occupied
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Commercial and industrial
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Doubtful
Total commercial
and industrial
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
63
December 31, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
Popular, Inc.
Construction
Pass
$
$
$
$
$
$
$
$
$
Watch
Special Mention
Substandard
Total construction
$
$
$
$
$
$
$
$
$
Mortgage
Pass
$
$
$
$
$
$
$
$
$
Substandard
Total mortgage
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Leasing
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total leasing
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
64
December 31, 2025
Term Loans
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted to
Term Loans
Amortized
Cost Basis
Amortized Cost Basis by Origination Year
(In thousands)
2025
2024
2023
2022
2021
Prior
Years
Total
Popular, Inc.
Consumer:
Credit cards
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total credit cards
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
HELOCs
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total HELOCs
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Personal
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Personal
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Auto
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Auto
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Other consumer
Pass
$
$
$
$
$
$
$
$
$
Substandard
Loss
Total Other
consumer
$
$
$
$
$
$
$
$
$
Year-to-Date gross
write-offs
$
$
$
$
$
$
$
$
$
Total Popular Inc.
$
$
$
$
$
$
$
$
$
65
Note 9 – Other real estate owned
The following tables present the activity related to Other Real Estate Owned (“OREO”), for the quarters ended March 31, 2026 and
2025.
For the quarter ended March 31, 2026
OREO
OREO
(In thousands)
Commercial/Construction
Mortgage
Total
Balance at beginning of period
$
$
$
Write-downs in value
(190 )
(535 )
(725 )
Additions
Sales
(558 )
(7,542 )
(8,100 )
Other adjustments
(296 )
(296 )
Ending balance
$
$
$
For the quarter ended March 31, 2025
OREO
OREO
(In thousands)
Commercial/Construction
Mortgage
Total
Balance at beginning of period
$
$
$
Write-downs in value
(29 )
(1,199 )
(1,228 )
Additions
Sales
(1,541 )
(11,229 )
(12,770 )
Other adjustments
(202 )
(202 )
Ending balance
$
$
$
66
Note 10 − Other assets
The caption of other assets in the Consolidated Statements of Financial Condition consists of the following major categories:
(In thousands)
March 31, 2026
December 31, 2025
Net deferred tax assets (net of valuation allowance)
$
$
Investments under the equity method
Prepaid taxes
Other prepaid expenses
Capitalized software costs
Derivative assets
Trades receivable from brokers and counterparties
Principal, interest and escrow servicing advances
Guaranteed mortgage loan claims receivable
Operating ROU assets
Finance ROU assets
Assets for pension benefit
Others
Total other assets
$
$
The Corporation regularly incurs in capitalizable costs associated with software development or licensing which are recorded within
the Other Assets line item in the accompanying Consolidated Statements of Financial Condition. In addition, the Corporation incurs
costs associated with hosting arrangements that are service contracts that are also recorded within Other Assets. The hosting
arrangements can include capitalizable implementation costs that are amortized during the term of the hosting arrangement.
The
following table summarizes the composition of acquired or developed software costs as well as costs related to hosting
arrangements:
Gross Carrying
Accumulated
Net Carrying
(In thousands)
Amount
Amortization
Value
March 31, 2026
Software development costs
$
$
$
Software license costs
Cloud computing arrangements
Total Capitalized software costs [1] [2]
$
$
$
December 31, 2025
Software development costs
$
$
$
Software license costs
Cloud computing arrangements
Total Capitalized software costs [1] [2]
$
$
$
[1]
Software intangible assets are presented as part of Other Assets in the Consolidated Statements of Financial Condition.
[2]
The tables above exclude assets that have been fully amortized.
Total amortization expense for all capitalized software and hosting arrangement cost, reflected as part of technology and software
expenses in the consolidated statement of operations, is as follows:
67
Quarters ended March 31,
(In thousands)
2026
2025
Software development and license costs
$
$
Cloud computing arrangements
Total amortization expense
$
$
68
Note 11 – Goodwill and other intangible assets
Goodwill
There were
The following tables present the gross amount of goodwill and accumulated impairment losses by reportable segment (refer to Note
28 for the definition of the Corporation’s reportable segments):
March 31, 2026
Balance at
Balance at
March 31,
Accumulated
March 31,
2026
impairment
2026
(In thousands)
losses
Banco Popular de Puerto Rico
$
$
$
Popular U.S.
Total Popular, Inc.
$
$
$
December 31, 2025
December 31,
Accumulated
December 31,
2025
impairment
2025
(In thousands)
losses
Banco Popular de Puerto Rico
$
$
$
Popular U.S.
Total Popular, Inc.
$
$
$
Other Intangible Assets
At March 31, 2026, the Corporation had intangible assets subject to amortization amounting to $
$
.
69
Note 12 – Deposits
Total deposits as of the end of the periods presented consisted of:
(In thousands)
March 31, 2026
December 31, 2025
Savings accounts
$
$
NOW, money market and other interest -bearing demand deposits
Total savings, NOW, money market and other interest-bearing demand deposits
Certificates of deposit:
Under $250,000
$250,000 and over
Total interest-bearing deposits
$
$
Non- interest-bearing deposits
$
$
Total deposits
$
$
A summary of certificates of deposits by maturity at March 31, 2026 follows:
(In thousands)
2026
$
2027
2028
2029
2030
2031 and thereafter
Total certificates of deposit
$
At March 31, 2026, the Corporation had brokered deposits amounting to $
The aggregate amount of overdrafts in demand deposit accounts that were reclassified to loans was $
(December 31, 2025 - $
At March 31, 2026, Puerto Rico government deposits amounted to $
bearing accounts, which are indexed to short-term market rates and fluctuate in cost with changes in those rates, in accordance with
contractual terms.
70
Note 13 – Borrowings
Assets sold under agreements to repurchase
Assets sold under agreements to repurchase amounted to $
The Corporation’s repurchase transactions are overcollateralized with the securities detailed in the table below. The Corporation’s
repurchase agreements have a right of set-off with the respective counterparty under the supplemental terms of the master
repurchase agreements. In an event of default, each party has a right of set-off against the other party for amounts owed in the
related agreement and any other amount or obligation owed in respect of any other agreement or transaction between them.
Pursuant to the Corporation’s accounting policy, the repurchase agreements are not offset with other repurchase agreements held
with the same counterparty.
The following table presents information related to the Corporation’s repurchase transactions accounted for as secured borrowings
that are collateralized with debt securities available-for-sale, debt securities held-to-maturity, and other assets held-for-trading
purposes or which have been obtained under agreements to resell. It is the Corporation’s policy to maintain effective control over
assets sold under agreements to repurchase; accordingly, such securities continue to be carried on the Consolidated Statements of
Financial Condition.
Repurchase agreements accounted for as secured borrowings
March 31, 2026
December 31, 2025
Repurchase
Repurchase
(In thousands)
U.S. Treasury securities
Within 30 days
$
$
After 30 to 90 days
Total U.S. Treasury securities
Total
$
$
Repurchase agreements in this portfolio are generally short-term, often overnight. As such our risk is very limited. We manage the
liquidity risks arising from secured funding by sourcing funding globally from a diverse group of counterparties, providing a range of
securities collateral and pursuing longer durations, when appropriate.
Other short-term borrowings
At March 31, 2026 and December 31, 2025, other short-term borrowings consisted of $
FHLB Advances.
71
Notes Payable
The following table presents the composition of notes payable at March 31, 2026 and December 31, 2025.
(In thousands)
March 31, 2026
December 31, 2025
Advances with the FHLB with maturities ranging from
fixed rates ranging from
% to
%
$
$
Unsecured senior debt securities maturing on
%, net of debt issuance costs of $
Junior subordinated deferrable interest debentures (related to trust preferred securities) maturing on
% to
%, net of debt issuance costs of $
Total notes payable
$
$
Note: Refer to the 2025 Form 10-K for rates information at December 31, 2025.
A breakdown of borrowings by contractual maturities at March 31, 2026 is included in the table below.
Assets sold under
Short-term
(In thousands)
agreements to
repurchase
borrowings
Notes payable
Total
2026
2027
2028
2029
Later years
Total borrowings
$
$
$
$
At March 31, 2026 and December 31, 2025, the Corporation had FHLB borrowing facilities whereby the Corporation could borrow
up to $
facilities are collateralized with securities and loans held-in-portfolio, and do not have restrictive covenants or callable features.
Also, at March 31, 2026, the Corporation had borrowing facilities at the discount window of the Federal Reserve Bank of New York
amounting to $
The facilities are a collateralized source of credit that is highly dependable even under difficult market conditions.
72
Note 14 − Other liabilities
The caption of other liabilities in the Consolidated Statements of Financial Condition consists of the following major categories:
(In thousands)
March 31, 2026
December 31, 2025
Accrued expenses
$
$
Accrued interest payable
Accounts payable
Dividends payable
Trades payable
Liability for GNMA loans sold with an option to repurchase
Reserves for loan indemnifications
Reserve for operational losses
Operating lease liabilities
Finance lease liabilities
Pension benefit obligation
Postretirement benefit obligation
Others
Total other liabilities
$
$
73
Note 15 – Stockholders’ equity
As of March 31, 2026, stockholders’ equity totaled $
cash dividends of $
) per common share amounting to $
of $
.
During the quarter ended March 31, 2026, the Corporation completed the repurchase of
$
$
ended March 31, 2025, the Corporation completed the repurchase of
average price of $
74
Note 16 – Other comprehensive income (loss)
The following table presents changes in accumulated other comprehensive income (loss) by component for the quarters ended
March 31, 2026 and 2025.
Changes in Accumulated Other Comprehensive Income (Loss) by Component [1]
Quarters ended March 31,
(In thousands)
2026
2025
Foreign currency translation
Beginning Balance
$
(85,282 )
$
(71,365 )
Other comprehensive loss
(256 )
(6,646 )
Net change
(256 )
(6,646 )
Ending balance
$
(85,538 )
$
(78,011 )
Adjustment of pension and
postretirement benefit plans
Beginning Balance
$
(91,155 )
$
(94,692 )
Amounts reclassified from accumulated other comprehensive loss for
amortization of net losses
Net change
Ending balance
$
(89,744 )
$
(93,271 )
Unrealized net holding losses on
debt securities
Beginning Balance
$
(1,005,650 )
$
(1,495,183 )
Other comprehensive (loss) income before reclassifications
(25,257 )
Amounts reclassified from accumulated other comprehensive loss for
amortization of net unrealized losses of debt securities transferred from
available-for-sale to held-to-maturity
Net change
Ending balance
$
(993,406 )
$
(1,318,705 )
Total accumulated other comprehensive loss
$
(1,168,688 )
$
(1,489,987 )
[1] All amounts presented are net of tax.
75
The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss during the
quarters ended March 31, 2026 and 2025.
Reclassifications Out of Accumulated Other Comprehensive Loss
Affected Line Item in the
Quarters ended March 31,
(In thousands)
Consolidated Statements of Operations
2026
2025
Adjustment of pension and postretirement benefit plans
Amortization of net losses
Other operating expenses
$
(2,258 )
$
(2,273 )
Total before tax
(2,258 )
(2,273 )
Income tax benefit
Total net of tax
$
(1,411 )
$
(1,421 )
Unrealized holding losses on debts securities
Amortization of unrealized net losses of debt
securities transferred to held-to-maturity
Investment securities
$
(46,876 )
$
(45,311 )
Total before tax
(46,876 )
(45,311 )
Income tax benefit
Total net of tax
$
(37,501 )
$
(36,249 )
Total reclassification adjustments, net of tax
$
(38,912 )
$
(37,670 )
76
Note 17 – Guarantees
The Corporation has obligations upon the occurrence of certain events under financial guarantees provided in certain contractual
agreements. Also, from time to time, the Corporation securitized mortgage loans into guaranteed mortgage-backed securities
subject in certain instances, to lifetime credit recourse on the loans that serve as collateral for the mortgage-backed securities. The
Corporation has not sold any mortgage loans subject to credit recourse since 2009. Also, from time to time, the Corporation may
sell, in bulk sale transactions, residential mortgage loans and Small Business Administration (“SBA”) commercial loans subject to
credit recourse or to certain representations and warranties from the Corporation to the purchaser. These representations and
warranties may relate, for example, to borrower creditworthiness, loan documentation, collateral, prepayment and early payment
defaults. The Corporation may be required to repurchase the loans under the credit recourse agreements or representation and
warranties.
At March 31, 2026, the Corporation serviced $
to credit recourse provisions, principally loans associated with FNMA and FHLMC residential mortgage loan securitization programs.
In the event of any customer default, pursuant to the credit recourse provided, the Corporation is required to repurchase the loan or
reimburse the third party investor for the incurred loss. The maximum potential amount of future payments that the Corporation
would be required to make under the recourse arrangements in the event of nonperformance by the borrowers is equivalent to the
total outstanding balance of the residential mortgage loans serviced with recourse and the interest, if applicable. During the quarter
ended March 31, 2026, the Corporation repurchased approximately $
subject to the credit recourse provisions (March 31, 2025 - $
Corporation has rights to the underlying collateral securing the mortgage loan. The Corporation suffers ultimate losses on these
loans when the proceeds from a foreclosure sale of the property underlying a defaulted mortgage loan are less than the outstanding
principal balance of the loan plus any uncollected interest advanced and the costs of holding and disposing the related property. At
March 31, 2026, the Corporation’s liability established to cover the estimated credit loss exposure related to loans sold or serviced
with credit recourse amounted to $
From time to time, the Corporation sells loans and agrees to indemnify the purchaser for credit losses or any breach of certain
representations and warranties made in connection with the sale.
Servicing agreements relating to the mortgage-backed securities programs of FNMA, FHLMC and GNMA, and to mortgage loans
sold or serviced to certain other investors, including FHLMC, require the Corporation to advance funds to make scheduled payments
of principal, interest, taxes and insurance, if such payments have not been received from the borrowers. At March 31, 2026, the
Corporation serviced $
2025 - $
from liquidation proceeds when the mortgage loan is foreclosed or, in the case of FHA/VA loans, under the applicable FHA and
VA
insurance and guarantees programs. However, in the meantime, the Corporation must absorb the cost of the funds it advances
during the time the advance is outstanding. The Corporation must also bear the costs of attempting to collect on delinquent and
defaulted mortgage loans. In addition, if a defaulted loan is not cured, the mortgage loan would be canceled as part of the
foreclosure proceedings and the Corporation would not receive any future servicing income with respect to that loan. At March 31,
2026, the outstanding balance of funds advanced by the Corporation under such mortgage loan servicing agreements was $
million (December 31, 2025 - $
experience increased delinquencies, the Corporation would be required to dedicate additional cash resources to comply with its
obligation to advance funds as well as incur additional administrative costs related to increases in collection efforts.
Popular, Inc. Holding Company (“PIHC”) fully and unconditionally guarantees certain borrowing obligations issued by certain of its
% owned consolidated subsidiaries amounting to $
addition, at both March 31, 2026 and December 31, 2025, 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
applicable guarantee agreement. Refer to Note 17 to the Consolidated Financial Statements in the 2025 Form 10-K for further
information on the trust preferred securities.
77
Note 18 – Commitments and contingencies
Off-balance sheet risk
The Corporation is a party to financial instruments with off-balance sheet credit risk in the normal course of business to meet the
financial needs of its customers. These financial instruments include loan commitments, letters of credit and standby letters of credit.
These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the
Consolidated Statements of Financial Condition.
The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for
commitments to extend credit, standby letters of credit and financial guarantees is represented by the contractual notional amounts
of those instruments. The Corporation uses the same credit policies in making these commitments and conditional obligations as it
does for those reflected on the Consolidated Statements of Financial Condition.
Financial instruments with off-balance sheet credit risk, whose contract amounts represent potential credit risk as of the end of the
periods presented were as follows:
(In thousands)
March 31, 2026
December 31, 2025
Commitments to extend credit:
Credit card lines
$
$
Commercial lines of credit
Construction lines of credit
Other consumer unused credit commitments
Commercial letters of credit
Standby letters of credit
Commitments to originate or fund mortgage loans
At March 31, 2026 and December 31, 2025, the Corporation maintained a reserve of $
potential losses associated with unfunded loan commitments related to commercial and construction lines of credit.
Other commitments
At March 31, 2026 and December 31, 2025, the Corporation also maintained other non-credit commitments for $
million, respectively, primarily for the acquisition of other investments.
Business concentration
Since the Corporation’s business activities are concentrated primarily in Puerto Rico, its results of operations and financial condition
are dependent upon the general trends of the Puerto Rico economy and, in particular, the residential and commercial real estate
markets. The concentration of the Corporation’s operations in Puerto Rico exposes it to greater risk than other banking companies
with a wider geographic base. Its asset and revenue composition by geographical area is presented in Note 28 to the Consolidated
Financial Statements.
Puerto Rico has faced significant fiscal and economic challenges for over a decade. In response to such challenges, the U.S.
Congress enacted PROMESA in 2016, which, among other things, established the Oversight Board and a framework for the
restructuring of the debts of the Commonwealth, its instrumentalities and municipalities. The Commonwealth and several of its
instrumentalities have availed themselves of debt restructuring proceedings under PROMESA. As of the date of this report, while
municipalities have been designated as covered entities under PROMESA, no municipality has commenced or has been authorized
by the Oversight Board to commence, any such debt restructuring proceeding under PROMESA.
At March 31, 2026, the Corporation’s direct exposure to the Puerto Rico government and its instrumentalities and municipalities
totaled $
outstanding amount, $
Substantially all of the amount outstanding at March 31, 2026 and December 31, 2025 were obligations from various Puerto Rico
municipalities. In most cases, these were “general obligations” of a municipality, to which the applicable municipality has pledged its
good faith, credit and unlimited taxing power, or “special obligations” of a municipality, to which the applicable municipality has
pledged other revenues. At March 31, 2026, approximately
% of the Corporation’s exposure to municipal loans and securities was
concentrated in the municipalities of San Juan, Guaynabo, Carolina and Caguas. The Corporation’s exposure at March 31, 2026,
78
included approximately $
outstanding.
The following table details the loans and investments representing the Corporation’s direct exposure to the Puerto Rico government
according to their maturities as of March 31, 2026
:
(In thousands)
Investment
Portfolio
Loans
Total Outstanding
Total Exposure
Central Government
Within 1 year
$
$
$
$
After 10 years
Total Central Government
Municipalities
Within 1 year
After 1 to 5 years
After 5 to 10 years
After 10 years
Total Municipalities
Total Direct Government Exposure
$
$
$
$
In addition, at March 31, 2026, the Corporation had $
entities but for which the principal source of repayment is non-governmental ($
$
instrumentality that has been designated as a covered entity under PROMESA (December 31, 2025 - $
mortgage loans are secured by first mortgages on Puerto Rico residential properties and the HFA insurance covers losses in the
event of a borrower default and upon the satisfaction of certain other conditions. The Corporation also had at March 31, 2026, $
million in bonds issued by HFA which are secured by second mortgage loans on Puerto Rico residential properties, and for which
HFA also provides insurance to cover losses in the event of a borrower default and upon the satisfaction of certain other conditions
(December 31, 2025 - $
those serving as collateral for the HFA bonds default and the collateral is insufficient to satisfy the outstanding balance of these
loans, HFA’s ability to honor its insurance will depend, among other factors, on the financial condition of HFA at the time such
obligations become due and payable. The Corporation does not consider the government guarantee when estimating the credit
losses associated with this portfolio. Although the Governor is currently authorized by local legislation to impose a temporary
moratorium on the financial obligations of the HFA, a moratorium on such obligations has not been imposed as of the date hereof.
BPPR’s commercial loan portfolio also includes loans to private borrowers who are service providers, lessors, suppliers or have
other relationships with the government. For example, at March 31, 2026 BPPR had $
2025) in exposure to borrowers that are independent power producers that generate and sell energy under Power Purchase
Agreements to the Puerto Rico Electric Power Authority (“PREPA”), which is undergoing a debt restructuring process under Title III
of PROMESA. Borrowers with exposure to the government could be negatively affected by the Commonwealth’s fiscal crisis and
the ongoing Title III proceedings under PROMESA. Similarly, BPPR’s mortgage and consumer loan portfolios include loans to
government employees and retirees, which could also be negatively affected by fiscal measures such as employee layoffs or
furloughs or reductions in pension benefits.
In addition, $
Government or its agencies at March 31, 2026 (compared to $
The Corporation also had U.S. Treasury and obligations from the U.S. Government, its agencies or government sponsored entities
within the portfolio of available-for-sale and held-to-maturity securities as described in Note 5 and 6 to the Consolidated Financial
Statements.
At March 31, 2026, the Corporation had operations in the United States Virgin Islands (the “USVI”) and had $
exposure to USVI government entities (December 31, 2025 - $
economic challenges that could adversely affect the ability of its public corporations and instrumentalities to service their outstanding
79
debt obligations. PROMESA does not apply to the USVI and, as such, there is currently no federal legislation permitting the
restructuring of the debts of the USVI and its public corporations and instrumentalities.
At March 31, 2026, the Corporation had operations in the British Virgin Islands (“BVI”) and it had a loan portfolio amounting to $
million comprised of various retail and commercial clients, compared to a loan portfolio of $
March 31, 2026, the Corporation had
Legal Proceedings
The nature of Popular’s business ordinarily generates claims, litigation, arbitration, regulatory and governmental investigations, and
legal and administrative cases and proceedings (collectively, “Legal Proceedings”). Popular’s Legal Proceedings may involve
various lines of business and include claims relating to contract, torts, consumer protection, securities, antitrust, employment, tax
and other laws. The recovery sought in Legal Proceedings may include substantial or indeterminate compensatory damages,
punitive damages, injunctive relief, or recovery on a class-wide basis. When the Corporation determines that it has meritorious
defenses to the claims asserted, it vigorously defends itself. The Corporation will consider the settlement of cases (including cases
where it has meritorious defenses) when, in management’s judgment, it is in the best interest of the Corporation and its stockholders
to do so. On at least a quarterly basis, Popular assesses its liabilities and contingencies relating to outstanding Legal Proceedings
utilizing the most current information available. For matters where it is probable that the Corporation will incur a material loss and the
amount can be reasonably estimated, the Corporation establishes an accrual for the loss. Once established, the accrual is adjusted
on at least a quarterly basis to reflect any relevant developments, as appropriate. For matters where a material loss is not probable,
or the amount of the loss cannot be reasonably estimated, no accrual is established.
In certain cases, exposure to loss exists in excess of any accrual to the extent such loss is reasonably possible, but not probable.
Management believes and estimates that the range of reasonably possible losses (with respect to those matters where such limits
may be determined in excess of amounts accrued) for current Legal Proceedings ranged from $
March 31, 2026. In certain cases, management cannot reasonably estimate the possible loss at this time. Any estimate involves
significant judgment, given the varying stages of the Legal Proceedings (including the fact that many of them are currently in
preliminary stages), the existence of multiple defendants in several of the current Legal Proceedings whose share of liability has yet
to be determined, the numerous unresolved issues in many of the Legal Proceedings, and the inherent uncertainty of the various
potential outcomes of such Legal Proceedings. Accordingly, management’s estimate will change from time-to-time, and actual
losses may be more or less than the current estimate.
While the outcome of Legal Proceedings is inherently uncertain, based on information currently available, advice of counsel, and
available insurance coverage, management believes that the amount it has already accrued is adequate and any incremental
liability arising from the Legal Proceedings in matters in which a loss amount can be reasonably estimated will not have a material
adverse effect on the Corporation’s consolidated financial position. However, in the event of unexpected future developments, it is
possible that the ultimate resolution of these matters in a reporting period, if unfavorable, could have a material adverse effect on
the Corporation’s consolidated financial position for that period.
80
Note 19 – Non-consolidated variable interest entities
The Corporation is involved with
deemed to be variable interest entities (“VIEs”) since the equity investors at risk have no substantial decision-making rights. The
Corporation does not hold any variable interest in the trusts, and therefore, cannot be the trusts’ primary beneficiary. Furthermore,
the Corporation concluded that it did not hold a controlling financial interest in these trusts since the decisions of the trusts are
predetermined through the trust documents and the guarantee of the trust preferred securities is irrelevant since in substance the
sponsor is guaranteeing its own debt.
Also, the Corporation is involved with various special purpose entities mainly in guaranteed mortgage securitization transactions,
including GNMA and FNMA.
The Corporation has also engaged in securitization transactions with FHLMC, but considers its
exposure in the form of servicing fees and servicing advances not to be significant
at March 31, 2026
.
These special purpose
entities are deemed to be VIEs since they lack equity investments at risk. The Corporation’s continuing involvement in these
guaranteed loan securitizations includes owning certain beneficial interests in the form of securities as well as the servicing rights
retained. The Corporation is not required to provide additional financial support to any of the variable interest entities to which it has
transferred the financial assets. The mortgage-backed securities, to the extent retained, are classified in the Consolidated
Statements of Financial Condition as available-for-sale or trading securities. The Corporation concluded that, essentially, these
entities (FNMA and GNMA) control the design of their respective VIEs, dictate the quality and nature of the collateral, require the
underlying insurance, set the servicing standards via the servicing guides and can change them at will, and can remove a primary
servicer with cause, and without cause in the case of FNMA. Moreover, through their guarantee obligations, agencies (FNMA and
GNMA) have the obligation to absorb losses that could be potentially significant to the VIE.
The Corporation holds variable interests in these VIEs in the form of agency mortgage-backed securities and collateralized
mortgage obligations, including those securities originated by the Corporation and those acquired from third parties. Additionally, the
Corporation holds agency mortgage-backed securities and agency collateralized mortgage obligations issued by third party VIEs in
which it has no other form of continuing involvement. Refer to Note 21 to the Consolidated Financial Statements for additional
information on the debt securities outstanding at March 31, 2026 and December 31, 2025, which are classified as available-for-sale
and trading securities in the Consolidated Statements of Financial Condition. In addition, the Corporation holds variable interests in
the form of servicing fees, since it retains the right to service the transferred loans in those government-sponsored special purpose
entities (“SPEs”) and may also purchase the right to service loans in other government-sponsored SPEs that were transferred to
those SPEs by a third-party.
The following table presents the carrying amount and classification of the assets related to the Corporation’s variable interests in
non-consolidated VIEs and the maximum exposure to loss as a result of the Corporation’s involvement as servicer of GNMA and
FNMA loans at March 31, 2026 and December 31, 2025.
81
(In thousands)
March 31, 2026
December 31, 2025
Assets
Servicing assets:
Mortgage servicing rights
$
$
Total servicing assets
$
$
Other assets:
Servicing advances
$
$
Total other assets
$
$
Total assets
$
$
Maximum exposure to loss
$
$
The size of the non-consolidated VIEs, in which the Corporation has a variable interest in the form of servicing fees, measured as
the total unpaid principal balance of the loans, amounted to $
The Corporation determined that the maximum exposure to loss includes the fair value of the MSRs and the assumption that the
servicing advances at March 31, 2026 and December 31, 2025, will not be recovered. The agency debt securities are not included
as part of the maximum exposure to loss since they are guaranteed by the related agencies.
ASU 2009-17 requires that an ongoing primary beneficiary assessment should be made to determine whether the Corporation is the
primary beneficiary of any of the VIEs it is involved with. The conclusion on the assessment of these non-consolidated VIEs has not
changed since their initial evaluation. The Corporation concluded that it is still not the primary beneficiary of these VIEs, and
therefore, these VIEs are not required to be consolidated in the Corporation’s financial statements at March 31, 2026.
82
Note 20 – Related party transactions
Centro Financiero BHD, S.A.
At March 31, 2026, the Corporation had a
% equity interest in Centro Financiero BHD, S.A. (“BHD”), one of the largest banking
and financial services groups in the Dominican Republic. During the quarter ended March 31, 2026, the Corporation recorded $
million in equity pickup (March 31, 2025 - $
$
) million) related to
foreign currency translation adjustments and changes in the fair value of available for sale securities. At March 31, 2026, the
investment in BHD had a carrying amount of $
received by the Corporation during the quarters ended March 31, 2026 and 2025.
83
Note 21 – Fair value measurement
ASC Subtopic 820-10 “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs to
valuation techniques used to measure fair value into three levels in order to increase consistency and comparability in fair value
measurements and disclosures. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
●
Level 1
- Unadjusted quoted prices in active markets for identical assets or liabilities that the Corporation has the ability to
access at the measurement date. Valuation on these instruments does not necessitate a significant degree of judgment
since valuations are based on quoted prices that are readily available in an active market.
●
Level 2
- Quoted prices other than those included in Level 1 that are observable either directly or indirectly. Level 2 inputs
include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or
liabilities in markets that are not active, or other inputs that are observable or that can be corroborated by observable
market data for substantially the full term of the financial instrument.
●
Level 3
- Inputs are unobservable and significant to the fair value measurement. Unobservable inputs reflect the
Corporation’s own judgements about assumptions that market participants would use in pricing the asset or liability.
The Corporation maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the
observable inputs be used when available. Fair value is based upon quoted market prices when available. If listed prices or quotes
are not available, the Corporation employs internally-developed models that primarily use market-based inputs including yield
curves, interest rates, volatilities, and credit curves, among others. Valuation adjustments are limited to those necessary to ensure
that the financial instrument’s fair value is adequately representative of the price that would be received or paid in the marketplace.
These adjustments include amounts that reflect counterparty credit quality, the Corporation’s credit standing, constraints on liquidity
and unobservable parameters that are applied consistently. There have been no changes in the Corporation’s methodologies used
to estimate the fair value of assets and liabilities from those disclosed in the 2025 Form 10-K.
The estimated fair value may be subjective in nature and may involve uncertainties and matters of significant judgment for certain
financial instruments. Changes in the underlying assumptions used in calculating fair value could significantly affect the results.
Fair Value on a Recurring and Nonrecurring Basis
The following fair value hierarchy tables present information about the Corporation’s assets and liabilities measured at fair value on
a recurring basis at March 31, 2026 and December 31, 2025:
84
At March 31, 2026
(In thousands)
Level 1
Level 2
Level 3
Measured at NAV
Total
RECURRING FAIR VALUE MEASUREMENTS
Assets
Debt securities available-for-sale:
U.S. Treasury securities
$
$
$
$
$
Collateralized mortgage obligations - federal
agencies
Mortgage-backed securities
Other
Total debt securities available-for-sale
$
$
$
$
$
Trading account debt securities, excluding
derivatives:
U.S. Treasury securities
$
$
$
$
$
Obligations of Puerto Rico, States and political
subdivisions
Collateralized mortgage obligations
Mortgage-backed securities
Other
Total trading account debt securities, excluding
derivatives
$
$
$
$
$
Equity securities
$
$
$
$
$
Mortgage servicing rights
Loans held-for-sale
Derivatives
Total assets measured at fair value on a
recurring basis
$
$
$
$
$
Liabilities
Derivatives
$
$
(22,820 )
$
$
$
(22,820 )
Total liabilities measured at fair value on a
recurring basis
$
$
(22,820 )
$
$
$
(22,820 )
85
At December 31, 2025
(In thousands)
Level 1
Level 2
Level 3
Measured at NAV
Total
RECURRING FAIR VALUE MEASUREMENTS
Assets
Debt securities available-for-sale:
U.S. Treasury securities
$
$
$
$
$
Collateralized mortgage obligations - federal
agencies
Mortgage-backed securities
Other
Total debt securities available-for-sale
$
$
$
$
$
Trading account debt securities, excluding
derivatives:
U.S. Treasury securities
$
$
$
$
$
Obligations of Puerto Rico, States and political
subdivisions
Collateralized mortgage obligations
Mortgage-backed securities
Other
Total trading account debt securities, excluding
derivatives
$
$
$
$
$
Equity securities
$
$
$
$
$
Mortgage servicing rights
Loans held-for-sale
Derivatives
Total assets measured at fair value on a
recurring basis
$
$
$
$
$
Liabilities
Derivatives
$
$
(25,740 )
$
$
$
(25,740 )
Total liabilities measured at fair value on a
recurring basis
$
$
(25,740 )
$
$
$
(25,740 )
Loans held-for-sale measured at fair value
Loans held-for-sale measured at fair value were priced based on secondary market prices. These loans are classified as Level 2.
The following tables summarize the difference between the aggregate fair value and the aggregate unpaid principal balance for
mortgage loans originated as held-for-sale measured at fair value as of March 31, 2026 and December 31, 2025.
(In thousands)
March 31, 2026
Aggregate Unpaid
Fair Value
Principal Balance
Difference
Loans held for sale
$
$
$
(In thousands)
December 31, 2025
Aggregate Unpaid
Fair Value
Principal Balance
Difference
Loans held for sale
$
$
$
86
The fair value information included in the following tables is not as of period end, but as of the date that the fair value measurement
was recorded during the quarters ended March 31, 2026 and 2025 and excludes nonrecurring fair value measurements of assets no
longer outstanding as of the reporting date.
Quarter ended March 31, 2026
(In thousands)
Level 1
Level 2
Level 3
Total
NONRECURRING FAIR VALUE MEASUREMENTS
Assets
Write-downs
Loans
[1]
(541 )
Other real estate owned
[2]
$
$
$
$
$
(258 )
Other foreclosed assets
[2]
(60 )
Total assets measured at fair value on a nonrecurring basis
$
$
$
$
$
(859 )
[1] Relates mainly to certain impaired collateral dependent loans. The impairment was measured based on the fair value of the collateral, which is
derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations. Costs to sell are
excluded from the reported fair value amount.
[2] Represents the fair value of foreclosed real estate and other collateral owned that were written down to their fair value. Costs to sell are
excluded from the reported fair value amount.
Quarter ended March 31, 2025
(In thousands)
Level 1
Level 2
Level 3
Total
NONRECURRING FAIR VALUE MEASUREMENTS
Assets
Write-downs
Loans
[1]
$
$
$
$
$
(362 )
Other real estate owned
[2]
(485 )
Other foreclosed assets
[2]
(76 )
Total assets measured at fair value on a nonrecurring basis
$
$
$
$
$
(923 )
[1] Relates mainly to certain impaired collateral dependent loans. The impairment was measured based on the fair value of the collateral, which is
derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations. Costs to sell are
excluded from the reported fair value amount.
[2] Represents the fair value of foreclosed real estate and other collateral owned that were written down to their fair value. Costs to sell are
excluded from the reported fair value amount.
The following tables present the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarters
ended March 31, 2026 and 2025.
Quarter ended March 31, 2026
MBS
Other
MBS
Other
classified
securities
classified
securities
as debt
classified as
as trading
classified
securities
account
as trading
Mortgage
available-
available-
account debt
servicing
Total
(In thousands)
for-sale
for-sale
securities
securities
rights
assets
Balance at December 31, 2025
$
$
$
$
$
$
Gains (losses) included in earnings
(4 )
(2,639 )
(2,642 )
Gains (losses) included in OCI
Additions
Settlements
(25 )
(25 )
Balance at March 31, 2026
$
$
$
$
$
$
Changes in unrealized gains (losses) included in
earnings relating to assets still held at March 31,
2026
$
$
$
$
$
(472 )
$
(472 )
87
Quarter ended March 31, 2025
MBS
Other
Other
classified
securities
MBS
securities
as debt
classified as
classified
classified
securities
debt securities
as trading
as trading
Mortgage
available-
available-
account debt
account debt
servicing
Total
(In thousands)
for-sale
for-sale
securities
securities
rights
assets
Balance at December 31, 2024
$
$
$
$
$
$
Gains (losses) included in earnings
(6 )
(3,570 )
(3,576 )
Gains (losses) included in OCI
(2 )
(2 )
Additions
Settlements
(25 )
(25 )
Transfers out of Level 3
(1,500 )
(1,500 )
Balance at March 31, 2025
$
$
$
$
$
$
Changes in unrealized gains (losses) included in
earnings relating to assets still held at March 31,
2025
$
$
$
$
$
(1,325 )
$
(1,316 )
Gains and losses (realized and unrealized) included in earnings for the quarters ended March 31, 2026 and 2025 for Level 3 assets
and liabilities included in the previous tables are reported in the consolidated statements of operations as follows:
Quarter ended March 31, 2026
Quarter ended March 31, 2025
Changes in unrealized
Changes in unrealized
Total gains
gains (losses) relating to
Total gains
gains (losses) relating to
(losses) included
assets still held at
(losses) included
assets still held at
(In thousands)
in earnings
reporting date
in earnings
reporting date
Mortgage banking activities
$
(2,639 )
$
(472 )
$
(3,570 )
$
(1,325 )
Trading account (loss) profit
(3 )
(6 )
Total
$
(2,642 )
$
(472 )
$
(3,576 )
$
(1,316 )
The following tables include quantitative information about significant unobservable inputs used to derive the fair value of Level 3
instruments, excluding those instruments for which the unobservable inputs were not developed by the Corporation such as prices
of prior transactions and/or unadjusted third-party pricing sources at March 31, 2026 and 2025.
Fair value at
(In thousands)
2026
Valuation technique
Unobservable inputs
Weighted average (range) [1]
Other - trading
$
Discounted cash flow model
Weighted average life
Yield
.0%
Prepayment speed
%
Loans held-in-portfolio
$
[2]
External appraisal
Haircut applied on
external appraisals
% (
%)
[1]
Weighted average of significant unobservable inputs used to develop Level 3 fair value measurements were calculated by relative fair value.
[2]
Loans held-in-portfolio in which haircuts were not applied to external appraisals were excluded from this table.
88
Fair value at
(In thousands)
2025
Valuation technique
Unobservable inputs
Weighted average (range) [1]
Other - trading
$
Discounted cash flow model
Weighted average life
Yield
.0%
Prepayment speed
%
Loans held-in-portfolio
$
[2]
External appraisal
Haircut applied on
external appraisals
% (
.0% -
.0%)
[1]
Weighted average of significant unobservable inputs used to develop Level 3 fair value measurements were calculated by relative fair value.
[2]
Loans held-in-portfolio in which haircuts were not applied to external appraisals were excluded from this table.
89
Note 22 – Fair value of financial instruments
The fair value of financial instruments is the amount at which an asset or obligation could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale. For those financial instruments with no quoted market prices
available, fair values have been estimated using present value calculations or other valuation techniques, as well as management’s
best judgment with respect to current economic conditions, including discount rates, estimates of future cash flows, and prepayment
assumptions. Many of these estimates involve various assumptions and may vary significantly from amounts that could be realized
in actual transactions.
The fair values reflected herein have been determined based on the prevailing rate environment at March 31, 2026 and December
31, 2025, as applicable. In different interest rate environments, fair value estimates can differ significantly, especially for certain fixed
rate financial instruments. In addition, the fair values presented do not attempt to estimate the value of the Corporation’s fee
generating businesses and anticipated future business activities, that is, they do not represent the Corporation’s value as a going
concern. There have been no changes in the Corporation’s valuation methodologies and inputs used to estimate the fair values for
each class of financial assets and liabilities not measured at fair value.
The following tables present the carrying amount and estimated fair values of financial instruments with their corresponding level in
the fair value hierarchy. The aggregate fair value amounts of the financial instruments disclosed do not represent management’s
estimate of the underlying value of the Corporation.
90
March 31, 2026
Carrying
Measured
(In thousands)
amount
Level 1
Level 2
Level 3
at NAV
Fair value
Financial Assets:
Cash and due from banks
$
$
$
$
$
$
Money market investments
Trading account debt securities, excluding derivatives
[1]
Debt securities available-for-sale
[1]
Debt securities held-to-maturity:
U.S. Treasury securities
$
$
$
$
$
$
Obligations of Puerto Rico, States and political
subdivisions
Collateralized mortgage obligation-federal agency
Securities in wholly owned statutory business trusts
Total debt securities held-to-maturity
$
$
$
$
$
$
Equity securities:
FHLB stock
$
$
$
$
$
$
FRB stock
Other investments
Total equity securities
$
$
$
$
$
$
Loans held-for-sale
$
$
$
$
$
$
Loans held-in-portfolio
Mortgage servicing rights
Derivatives
March 31, 2026
Carrying
Measured
(In thousands)
amount
Level 1
Level 2
Level 3
at NAV
Fair value
Financial Liabilities:
Deposits:
Demand deposits
$
$
$
$
$
$
Time deposits
Total deposits
$
$
$
$
$
$
Assets sold under agreements to repurchase
$
$
$
$
$
$
Other short-term borrowings
[2]
Notes payable:
FHLB advances
$
$
$
$
$
$
Unsecured senior debt securities
Junior subordinated deferrable interest debentures
(related to trust preferred securities)
Total notes payable
$
$
$
$
$
$
Derivatives
$
$
$
$
$
$
[1]
Refer to Note 21 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level.
[2]
Refer to Note 13 to the Consolidated Financial Statements for the composition of other short-term borrowings.
91
December 31, 2025
Carrying
Measured
(In thousands)
amount
Level 1
Level 2
Level 3
at NAV
Fair value
Financial Assets:
Cash and due from banks
$
$
$
$
$
$
Money market investments
Trading account debt securities, excluding derivatives
[1]
Debt securities available-for-sale
[1]
Debt securities held-to-maturity:
U.S. Treasury securities
$
$
$
$
$
$
Obligations of Puerto Rico, States and political
subdivisions
Collateralized mortgage obligation-federal agency
Securities in wholly owned statutory business trusts
Total debt securities held-to-maturity
$
$
$
$
$
$
Equity securities:
FHLB stock
$
$
$
$
$
$
FRB stock
Other investments
Total equity securities
$
$
$
$
$
$
Loans held-for-sale
$
$
$
$
$
$
Loans held-in-portfolio
Mortgage servicing rights
Derivatives
December 31, 2025
Carrying
Measured
(In thousands)
amount
Level 1
Level 2
Level 3
at NAV
Fair value
Financial Liabilities:
Deposits:
Demand deposits
$
$
$
$
$
$
Time deposits
Total deposits
$
$
$
$
$
$
Assets sold under agreements to repurchase
$
$
$
$
$
$
Other short-term borrowings
[2]
Notes payable:
FHLB advances
$
$
$
$
$
$
Unsecured senior debt securities
Junior subordinated deferrable interest debentures
(related to trust preferred securities)
Total notes payable
$
$
$
$
$
$
Derivatives
$
$
$
$
$
$
[1]
Refer to Note 21 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level.
[2]
Refer to Note 13 to the Consolidated Financial Statements for the composition of other short-term borrowings.
Refer to Note 18 to the Consolidated Financial Statements for the notional amount of commitments to extend credit, which
represents the unused portion of credit facilities granted to customers, and letters of credit, which represent the contractual amount
that is required to be paid in the event of nonperformance, at March 31, 2026 and December 31, 2025. The fair value of
commitments to extend credit and letters of credit, which are based on the fees charged to enter into those agreements, are not
material to Popular’s financial statements.
92
Note 23 – Net income per common share
The following table sets forth the computation of net income per common share (“EPS”), basic and diluted, for the quarters ended
March 31, 2026 and 2025:
Quarters ended March 31,
(In thousands, except per share information)
2026
2025
Net income
$
$
Preferred stock dividends
(353 )
(353 )
Net income applicable to common stock
$
$
Average common shares outstanding
Average potential dilutive common shares
Average common shares outstanding - assuming dilution
Basic EPS
$
$
Diluted EPS
$
$
For the quarters ended March 31, 2026 and 2025, the Corporation calculated the impact of potential dilutive common shares under
the treasury stock method, consistent with the method used for the preparation of the financial statements for the year ended
December 31, 2025. For a discussion of the calculation under the treasury stock method, refer to Note 30 of the Consolidated
Financial Statements included in the 2025 Form 10-K.
93
Note 24 – Revenue from contracts with customers
The following table presents the Corporation’s revenue streams from contracts with customers by reportable segment for the
quarters ended March 31, 2026 and 2025.
Quarters ended March 31,
(In thousands)
2026
2025
BPPR
Popular U.S.
BPPR
Popular U.S.
Service charges on deposit accounts
$
$
$
$
Other service fees:
Debit card fees
Insurance fees, excluding reinsurance
Credit card fees, excluding late fees and membership fees
Sale and administration of investment products
Trust fees
Total revenue from contracts with customers
[1]
$
$
$
$
[1] The amounts include intersegment transactions of $
Revenue from contracts with customers is recognized when, or as, the performance obligations are satisfied by the Corporation by
transferring the promised services to the customers based on ASC 606 Revenue from Contracts with Customers. Revenue streams
identified from contracts with customers, as listed above, will have certain timing for recognition based on the nature of the contract
including when the obligation is satisfied and/or services are rendered. Service charges on deposit accounts, debit card fees, and
credit card fees are recognized at a point in time, upon the occurrence of an activity or an event. Interchange fees on debit and
credit card transactions are recognized upon settlement of the payment transaction. For more details over nature and timing of
revenue streams from contracts with customers refer to Note 31 on the 2025 Form 10-K for a complete description of the nature and
timing of revenue streams from contracts with customers.
94
Note 25 - Stock-based compensation
On May 12, 2020, the stockholders of the Corporation approved the Popular, Inc. 2020 Omnibus Incentive Plan, which permits the
Corporation to issue several types of stock-based compensation to employees and directors of the Corporation and/or any of its
subsidiaries (the “2020 Incentive Plan”). The 2020 Incentive Plan replaced the Popular, Inc. 2004 Omnibus Incentive Plan, which
was in effect prior to the adoption of the 2020 Incentive Plan (the “2004 Incentive Plan” and, together with the 2020 Incentive Plan,
the “Incentive Plan”). Participants under the Incentive Plan are designated by the Talent and Compensation Committee of the Board
of Directors (or its delegate, as determined by the Board). Under the Incentive Plan, the Corporation has issued restricted stock and
performance shares to its employees and restricted stock and restricted stock units (“RSUs”) to its directors.
The restricted stock granted under the Incentive Plan to employees becomes vested based on the employees’ continued service
with Popular.
The performance share awards granted under the Incentive Plan consist of the opportunity to receive shares of Popular, Inc.’s
common stock provided that the Corporation achieves certain goals during a three-year performance cycle. The goals will be based
on two metrics weighted equally: the Relative Total Shareholder Return (“TSR”) and the Absolute Return on Average Tangible
Common Equity (“ROATCE”). The TSR metric is considered to be a market condition under ASC 718. For equity settled awards
based on a market condition, the fair value is determined as of the grant date and is not subsequently revised based on actual
performance. The ROATCE metric is considered to be a performance condition under ASC 718. For equity settled awards based
on a performance condition, the fair value is determined based on the probability of achieving the ROATCE goal as of each
reporting period. The TSR and ROATCE metrics are equally weighted and work independently.
The following table summarizes the restricted stock and performance shares activity under the Incentive Plan for members of
management and employees.
95
(Not in thousands)
Shares
Weighted-Average
Grant Date Fair
Value
Non-vested at December 31, 2024
$
Granted
Performance Shares Quantity Adjustment
Vested
(293,939 )
Forfeited
(8,787 )
Non-vested at December 31, 2025
$
Granted
Performance Shares Quantity Adjustment
Vested
(90,475 )
Forfeited
(788 )
Non-vested at March 31, 2026
$
During the quarter ended March 31, 2026,
) and
shares (March 31, 2025 -
) were awarded to employees under the Incentive Plan.
During the quarter ended March 31, 2026, the Corporation recognized $
incentive awards, with a tax benefit of $
ended March 31, 2026, the fair market value of the restricted stock and performance shares vested was $
and $
reduction in income tax expense. For the quarter ended March 31, 2026, the Corporation recognized $
shares expense, with a tax benefit of $
unrecognized compensation cost related to non-vested restricted stock awards and performance shares to employees at March 31,
2026 was $
The following table summarizes the restricted stock activity under the Incentive Plan for members of the Board of Directors:
(Not in thousands)
RSUs / Restricted stock
Weighted-Average Grant
Date Fair Value per Unit
Non-vested at December 31, 2024
$
Granted
Vested
(5,363 )
Forfeited
Non-vested at December 31, 2025
$
Granted
Vested
(1,166 )
Forfeited
Non-vested at March 31, 2026
$
The equity awards granted to members of the Board of Directors of Popular, Inc. (the “Directors”) after May 2025 will vest and
become non-forfeitable on the first anniversary of the grant date of such award. Equity awards granted to the Directors may be paid
in either restricted stock or RSUs, at each Director’s election. If RSUs are elected the Directors may defer the delivery of the shares
of common stock underlying the RSUs award until after their retirement. To the extent that cash dividends are paid on the
Corporation’s outstanding common stock, the Directors will receive an additional number of RSUs that reflect reinvested dividend
equivalent.
During the quarter ended March 31, 2026,
). During this period,
the Corporation recognized $
96
31, 2025 - $
ended March 31, 2026 for the Directors was $
97
Note 26 – Income taxes
For the quarter ended March 31, 2026, the Corporation recorded an income tax expense of $
(“ETR”) of
%, compared to $
% for the same period of year 2025. Lower ETR when compared to
the first quarter of 2025 is driven by higher net exempt income. The Puerto Rico statutory tax rate is
% for both periods.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and their tax bases. Significant components of the Corporation’s deferred tax assets and liabilities at
March 31, 2026, and December 31, 2025, were as follows:
98
March 31, 2026
PR
US
Total
Deferred tax assets:
Tax credits available for carryforward
$
$
$
Net operating loss and other carryforward available
Postretirement and pension benefits
Allowance for credit losses
Depreciation
FDIC-assisted transaction
Lease liability
Unrealized net loss on investment securities
Mortgage Servicing Rights
Other temporary differences
Total gross deferred tax assets
Deferred tax liabilities:
Intangibles
Right of use assets
Deferred loan origination fees/cost
Loans acquired
Other temporary differences
Total gross deferred tax liabilities
Valuation allowance
Net deferred tax asset
$
$
$
PR
US
Total
Deferred tax assets:
Tax credits available for carryforward
$
$
$
Net operating loss and other carryforward available
Postretirement and pension benefits
Allowance for credit losses
Deferred loan origination fees/cost
(2,474 )
Depreciation
FDIC-assisted transaction
Lease liability
Unrealized net loss on investment securities
Difference in outside basis from pass-through entities
Mortgage Servicing Rights
Other temporary differences
Total gross deferred tax assets
Deferred tax liabilities:
Intangibles
Right of use assets
Loans acquired
Other temporary differences
Total gross deferred tax liabilities
Valuation allowance
Net deferred tax asset
$
$
$
99
The net deferred tax assets shown in the table above at March 31, 2026, is reflected in the Consolidated Statements of Financial
Condition as $
thousand in deferred tax liabilities in the “Other liabilities” caption (December 31, 2025 - $
deferred tax assets or liabilities of individual tax-paying subsidiaries of the Corporation in their respective tax jurisdiction, Puerto
Rico or the United States.
At March 31, 2026, the net deferred tax assets of the U.S. operations amounted to $
approximately $
realization of the deferred tax asset by taxing jurisdiction on a quarterly basis. The U.S. Operations have generated taxable income
each of the last three years. The financial results for the first quarter of 2026 continue to show an upward trend similar to 2024 and
2025. These financial results are objectively verifiable positive evidence. Additionally, the Corporation considered as negative
evidence inconsistency in performance trends, including lower than anticipated results in recent periods. Also, management
considered the uncertainty in predicting future taxable income, as given the impact of external factors such as changes in
macroeconomic conditions, geopolitical issues, and shifts in monetary policy. In addition, management evaluated the expiration
period of the NOLs carried forward which begin to expire in 2028
As of March 31, 2026, after weighting all positive and negative evidence, the Corporation concluded that it is more likely than not
that $
The Corporation based this determination on its estimated taxable income available to realize the deferred tax assets for the
remaining carryforward periods, together with the historical level of book income adjusted by permanent differences and taxable
income. Management will continue to monitor and review the U.S. operation’s results, including recent earnings trends, pre-tax
earnings forecasts, new tax initiatives, and performance indicators, such as net income versus forecast, targeted loan growth, net
interest income margin, changes in deposit costs, allowance for credit losses, charge-offs, NPLs inflows, and NPA balances.
Significant changes, or a combination of changes, could positively or negatively impact the amount of deferred tax assets to be
realized in the future.
At March 31, 2026, the Corporation’s net deferred tax assets related to its Puerto Rico operations amounted to $
Corporation’s Puerto Rico Banking operation has a historical record of profitability. This is considered as strong objectively verifiable
positive evidence that outweighs any negative evidence considered by management in the evaluation of the realization of the
deferred tax assets. Based on this evidence and management’s estimate of future taxable income, the Corporation has concluded
that it is more likely than not that such net deferred tax assets of the Puerto Rico Banking operations will be realized.
The Holding Company operation has been in a cumulative loss position in recent years. Management expects these losses will be a
trend in future years. This objectively verifiable negative evidence is considered by management strong negative evidence that
suggests that income in future years will be insufficient to support the realization of all deferred tax assets. After weighting of all
positive and negative evidence Management concluded, as of the reporting date, that it is more likely than not that the Holding
Company will not be able to realize any portion of the deferred tax assets. Accordingly, the Corporation has maintained a valuation
allowance on the deferred tax assets of $
The Corporation and its subsidiaries file income tax returns in Puerto Rico, the U.S. federal jurisdiction, various U.S. states and
political subdivisions, and foreign jurisdictions. At March 31, 2026, the following years remain subject to examination in the U.S.
Federal jurisdiction, 2022 and thereafter; and in the Puerto Rico jurisdiction, 2019 and thereafter.
100
Note 27 – Supplemental disclosure on the consolidated statements of cash flows
Additional disclosures on cash flow information and non-cash activities for the quarters ended March 31, 2026 and March 31, 2025
are listed in the following table:
(In thousands)
March 31, 2026
March 31, 2025
Non-cash activities:
$
$
[1]
[1]
Includes loans securitized into trading securities and subsequently sold before quarter end.
The following table provides a reconciliation of cash and due from banks, and restricted cash reported within the Consolidated
Statements of Financial Condition that sum to the total of the same such amounts shown in the Consolidated Statements of Cash
Flows.
(In thousands)
March 31, 2026
March 31, 2025
Cash and due from banks
$
$
Restricted cash and due from banks
Restricted cash in money market investments
Total cash and due from banks, and restricted cash
[2]
$
$
[2]
Refer to Note 4 - Restrictions on cash and due from banks and certain securities for nature of restrictions.
101
Note 28 – Segment reporting
The Corporation’s corporate structure consists of
markets the segments serve, as well as on the products and services offered by the segments.
The chief operating decision maker (“CODM”) of the Corporation is the Chief Executive Officer (“CEO”) who utilizes net income as
one of the segment profitability measures, to evaluate the performance of each reportable segment and assess where to allocate
resources effectively. The CEO receives profitability reports that include net income per segment, net interest income and other
income and expense categories. The CODM uses the segment’s net income and components of net income, including segment
revenues and expenses to assess performance and to manage important aspects by each reportable segments, such as human
capital, investment in technology, making budget allocations, as well as other strategic decisions.
Banco Popular de Puerto Rico:
The Banco Popular de Puerto Rico reportable segment includes commercial, consumer and retail banking operations, as well as
mortgage and auto lending operations conducted at BPPR, including U.S. based activities conducted through its New York Branch.
Other financial services within the BPPR segment include the trust service units of BPPR, asset management services of Popular
Asset Management and the brokerage operations of Popular Securities, and the insurance agency and reinsurance businesses of
Popular Insurance, Popular Risk Services, Popular Life Re, and Popular Re.
Popular U.S.:
Popular U.S. reportable segment consists of the banking operations of Popular Bank (PB), Popular Insurance Agency, U.S.A., and
PEF. PB operates through a retail branch network in the U.S. mainland under the name of Popular, and equipment leasing and
financing services through PEF. Popular Insurance Agency, U.S.A. offers investment and insurance services across the PB branch
network.
The Corporate group consists primarily of the holding companies Popular, Inc., Popular North America, Popular International Bank
and certain of the Corporation’s investments accounted for under the equity method, including BHD.
The accounting policies of the individual operating segments are the same as those of the Corporation. Transactions between
reportable segments are primarily conducted at market rates, resulting in profits that are eliminated for reporting consolidated results
of operations. Assets representing transactions between reportable segments or the Corporate group are also eliminated in the
tables presented below.
The tables that follow present the results of operations and total assets by reportable segments:
102
2026
For the quarter ended March 31, 2026
Intersegment
(In thousands)
BPPR
Popular U.S.
Eliminations
Interest income
$
$
$
Interest expense
Net interest income
Provision for credit losses
Non-interest income
(21 )
Personnel costs
(21 )
Professional fees
Technology and software expenses
Processing and transactional services
Amortization of intangibles
Depreciation expense
Other operating expenses
[1]
Total operating expenses
(21 )
Income before income tax
Income tax expense
Net income
$
$
$
Segment assets
$
$
$
(49,214 )
For the quarter ended March 31, 2026
Reportable
(In thousands)
Segments
Corporate
Eliminations
Total Popular, Inc.
Interest income
$
$
$
(859 )
$
Interest expense
(859 )
Net interest income (expense)
(9,473 )
Provision for credit losses (benefit)
(30 )
Non-interest income
(926 )
Personnel costs
(29 )
Professional fees
(409 )
Technology and software expenses
Processing and transactional services
Amortization of intangibles
Depreciation expense
Other operating expenses
[1]
(63,662 )
(412 )
Total operating expenses
(850 )
Income before income tax
(76 )
Income tax expense
(327 )
Net income
$
$
$
(76 )
$
Segment assets
$
$
$
(5,356,667 )
$
[1]
Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes,
communications expense, business promotion expenses, deposit insurance costs and OREO expenses.
103
2025
For the quarter ended March 31, 2025
Intersegment
(In thousands)
BPPR
Eliminations
Interest income
$
$
$
(1,681 )
Interest expense
(1,681 )
Net interest income
Provision for credit losses (benefit)
Non-interest income
Personnel costs
Professional fees
Technology and software expenses
Processing and transactional services
Amortization of intangibles
Depreciation expense
Other operating expenses
[1]
Total operating expenses
Income before income tax
Income tax expense
Net income
$
$
$
Segment assets
$
$
$
(166,540 )
For the quarter ended March 31, 2025
Reportable
(In thousands)
Segments
Corporate
Eliminations
Total Popular, Inc.
Interest income
(1,137 )
Interest expense
(1,137 )
Net interest income (expense)
$
$
(9,237 )
$
$
Provision for credit losses (benefit)
(41 )
Non-interest income
(616 )
Personnel costs
Professional fees
(330 )
Technology and software expenses
Processing and transactional services
Amortization of intangibles
Depreciation expense
Other operating expenses
[1]
(56,402 )
(823 )
Total operating expenses
(1,153 )
Income before income tax
(932 )
Income tax expense (benefit)
Net income
$
$
(3,607 )
$
$
Segment assets
$
$
$
(5,519,612 )
$
[1]
Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes,
communications expense, business promotion expenses, deposit insurance costs and OREO expenses.
104
Geographic Information
The following information presents selected financial information based on the geographic location where the Corporation conducts
its business. The banking operations of BPPR are primarily based in Puerto Rico, where it has the largest retail banking franchise.
BPPR also conducts banking operations in the U.S. Virgin Islands, the British Virgin Islands and New York. BPPR’s banking
operations in the mainland United States include commercial lending activities in addition to periodic loan participations with PB.
During the first quarter of 2026, BPPR did
t participate in loans originated by PB (2025 - $
segment related to its operations in the United States amounted to $
million in multifamily loans (December 31, 2025 - $
$
31, 2025 - $
$
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 $
million in revenues during the first quarter of 2026 (March 31, 2025 - $
Islands.
Geographic Information
Quarter ended
(In thousands)
March 31, 2026
March 31, 2025
Revenues:
[1]
$
$
Total consolidated revenues
$
$
[1]
Total revenues include net interest income, service charges on deposit accounts, other service fees, mortgage banking activities, net (loss)
gain, including impairment on equity securities, net gain on trading account debt securities, adjustments to indemnity reserves on loans sold
and other operating income.
Selected Balance Sheet Information:
(In thousands)
March 31, 2026
December 31, 2025
Puerto Rico
Total assets
$
$
Loans
Deposits
United States
Total assets
$
$
Loans
Deposits
Other
Total assets
$
$
Loans
Deposits
[1]
[1]
Represents deposits from BPPR operations located in the U.S. and British Virgin Islands.
105
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report includes management’s discussion and analysis (“MD&A”) of the consolidated financial position and financial
performance of Popular, Inc. (the “Corporation” or “Popular”). All accompanying tables, financial statements and notes included
elsewhere in this report should be considered an integral part of this analysis.
The Corporation is a diversified, publicly owned financial holding company subject to the supervision and regulation of the Board of
Governors of the Federal Reserve System. The Corporation has operations in Puerto Rico, the United States (“U.S.”) mainland and
the U.S. and British Virgin Islands. In Puerto Rico, the Corporation provides retail, mortgage, commercial banking services and auto
and equipment leasing and financing through its principal banking subsidiary, Banco Popular de Puerto Rico (“BPPR”), as well as
broker-dealer and insurance services through specialized subsidiaries. In the U.S. mainland, the Corporation provides retail and
commercial banking services, as well as equipment leasing and financing, through its New York-chartered banking subsidiary,
Popular Bank (“PB” or “Popular U.S.”), which has branches located in New York, New Jersey and Florida. Note 28 to the
Consolidated Financial Statements presents information about the Corporation’s business segments.
As a financial services company, the Corporation’s earnings are significantly affected by general business and economic conditions
in the markets which we serve. Lending and deposit activities and fee income generation are influenced by the level of business
spending and investment, consumer income, spending and savings, capital market activities, competition, customer preferences,
interest rate conditions and prevailing market rates on competing products.
The Corporation operates in a highly regulated environment and may be adversely affected by changes in federal and local laws
and regulations. Also, competition with other financial institutions, as well as with non-traditional financial service providers and
technology companies that provide electronic and internet-based financial solutions and services, could adversely affect its
profitability.
The Corporation continuously monitors general business and economic conditions, industry-related indicators and trends,
competition, interest rate volatility, credit quality indicators, loan, and deposit demand, operational and systems efficiencies, revenue
enhancements and changes in the regulation of financial services companies.
The description of the Corporation’s business contained in Item 1 of the 2025 Form 10-K, while not all inclusive, discusses additional
information about the business of the Corporation. Readers should also refer to “Part I - Item 1A” of the 2025 Form 10-K and “Part II
- Item 1A” of this Form 10-Q for a discussion of certain risks and uncertainties to which the Corporation is subject, many beyond the
Corporation’s control that, in addition to the other information in this Form 10-Q, readers should consider.
The Corporation’s common stock is traded on the NASDAQ Global Select Market under the symbol BPOP.
OVERVIEW
Financial highlights for the quarter ended March 31, 2026
The Corporation’s net income for the quarter ended March 31, 2026 amounted to $245.7 million, an increase of $68.2 million when
compared to a net income of $177.5 million for the quarter ended March 31, 2025. Higher net income was mainly driven by higher
net interest income of $64.6 million and lower operating expenses by $3.7 million.
Financial highlights for the quarter ended March 31, 2026 include:
●
31, 2025, driven by loan growth and investments in U.S. Treasury securities at higher yields, and lower cost of deposits,
mainly P.R. public deposits, partially offset by lower money market investments. Net interest income on a taxable
equivalent basis for the first quarter of 2026 was $757.8 million, an increase of $93.9 million. Net interest margin
expanded by 26 basis points to 3.66%. On a taxable equivalent basis, net interest margin expanded by 41 basis points to
4.14%.
106
●
million when compared to the quarter ended March 31, 2025, driven by a higher provision at BPPR in the commercial and
mortgage loans portfolio, partially offset by a lower provision for the leases and consumer loans portfolio due to
improvements in credit quality metrics. Provision for credit losses decreased at PB primarily due to the higher qualitative
reserves established during the first quarter of 2025 to maintain adequate ACL coverage, for certain portfolios, and
improvements in overall credit quality.
●
31, 2025, mainly driven by higher credit and debit card fee income, higher asset management fees, and higher insurance
fees.
●
the quarter ended March 31, 2025. The decrease was mainly driven by lower operational loss reserves and lower
professional services expense, partially offset by higher technology and software expenses as a result of our continued
investment in technology and higher personnel costs, mainly related to salaries, as well as the valuation of securities held
for deferred benefit plans.
●
compared to an income tax expense of $45.1 million with an ETR of 20.2% for the quarter ended March 31, 2025 due to
higher income before tax, partially offset by higher exempt income.
●
2025. The increase of $782.8 million was primarily due to higher balance in the available-for-sale (“AFS”) securities
portfolio, driven by reinvestment in U.S. Treasury securities, and an increase in money market investments and other
assets, partially offset by a decrease in held-to-maturity (“HTM”) investment securities and a decrease in loan portfolio
balances, mainly at PB.
●
driven by growth at BPPR across retail, corporate, and P.R. public deposits.
●
Corporation and its banking subsidiaries continue to be well capitalized. As of March 31, 2026, the Corporation’s tangible
book value per common share was $84.98, an increase of $2.33 from December 31, 2025. The Common Equity Tier 1
Capital ratio at March 31, 2026 was 15.92%, compared to 15.72% at December 31, 2025.
Refer to Table 1 for selected financial data for the quarters ended March 31, 2026 and March 31, 2025.
107
Table 1 - Financial highlights
Financial Condition Highlights
Ending Balances at
Average for the quarter ended
(In thousands)
March 31, 2026
2025
Variance
March 31, 2026
March 31,
2025
Variance
Money market investments
$
4,655,699
$
4,626,506
$
29,193
$
4,850,141
$
6,379,085
$
(1,528,944)
Investment securities
28,943,544
28,168,918
774,626
29,008,686
28,446,090
562,596
Loans
39,295,305
39,337,516
(42,211)
39,270,501
37,006,149
2,264,352
Earning assets
72,894,548
72,132,940
761,608
73,129,328
71,831,324
1,298,004
Total assets
76,131,018
75,348,267
782,751
77,089,305
74,951,813
2,137,492
Deposits
67,611,316
66,190,093
1,421,223
67,364,627
65,858,092
1,506,535
Borrowings
1,119,557
1,448,578
(329,021)
1,335,239
959,211
376,028
Total liabilities
69,819,932
69,099,188
720,744
69,688,807
67,795,911
1,892,896
Stockholders’ equity
6,311,086
6,249,079
62,007
6,289,337
7,155,902
(866,565)
Note: Average balances, for balances prior to the period ended March 31, 2026, exclude unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to
certain securities transferred from available-for-sale to held-to-maturity.
Operating Highlights
Quarter ended March 31,
(In thousands, except per share information)
2026
2025
Net interest income
$
670,180
$
605,597
$
64,583
Provision for credit losses
75,886
64,081
11,805
Non-interest income
165,626
152,061
13,565
Operating expenses
467,310
471,012
(3,702)
Income before income tax
292,610
222,565
70,045
Income tax expense
46,936
45,063
1,873
Net income
$
245,674
$
177,502
$
68,172
Net income applicable to common stock
$
245,321
$
177,149
$
68,172
Net income per common share - basic
$
3.78
$
2.56
$
1.22
Net income per common share - diluted
$
3.78
$
2.56
$
1.22
Dividends declared per common share
$
0.75
$
0.70
$
0.05
Quarter ended March 31,
Selected Statistical Information
2026
2025
Common Stock Data
$
134.17
$
92.37
97.27
83.75
Profitability Ratios
1.29
%
0.96
%
13.76
10.07
3.09
2.74
3.57
3.07
3.66
3.40
4.14
3.73
Capitalization Ratios
9.41
%
8.99
%
15.92
16.11
84.98
72.02
15.46
11.36
15.98
16.17
17.71
17.92
8.60
8.50
[1] Includes loans held-for-sale.
108
[2] Refer to Table 10 for reconciliation to GAAP financial measures.
Non-GAAP Financial Measures
This Form 10-Q contains financial information prepared under accounting principles generally accepted in the United States (“U.S.
GAAP”) and non-GAAP financial measures. Management uses non-GAAP financial measures when it has determined that these
measures provide meaningful information about the underlying performance of the Corporation’s ongoing operations. Non-GAAP
financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by other
companies.
Adjusted net income - Non-GAAP Financial Measure
In addition to analyzing the Corporation’s results on a reported basis, management monitors whether the impact of certain non-
recurring or infrequent transactions need to be excluded from the results of operations to present what is then considered to be
“adjusted net income” of the Corporation. Management believes that the “adjusted net income” provides meaningful information
about the underlying performance of the Corporation’s ongoing operations. The “adjusted net income” is a non-GAAP financial
measure.
There were no non-GAAP adjustments to net income for the quarters ended March 31, 2026 and March 31, 2025.
109
Net interest income on a taxable equivalent basis – Non-GAAP Financial Measure
Net interest income, on a taxable equivalent basis, is presented with its different components in Table 2 for the quarter ended March
31, 2026, as compared with the same period in 2025, segregated by major categories of interest earning assets and interest-bearing
liabilities.
The main sources of tax-exempt interest income are certain loans and investments in obligations of the U.S. Government, its
agencies and sponsored entities, and certain obligations of the Commonwealth of Puerto Rico and its agencies and assets held by
the Corporation’s international banking entities. On Table 2, the interest income has been converted to a taxable equivalent basis,
using the applicable statutory income tax rates for each period net of interest expense that the Puerto Rico tax law requires to be
disallowed, based on an equal proportion of tax-exempt assets to total assets, and by an allocation of general and administrative
expenses attributable to exempt income, reducing the benefit of the tax-exempt income. The effective yield, on a taxable equivalent
basis, will vary depending on the level of these expenses that are attributable to the available exempt income. Under Puerto Rico
tax law, the exempt interest can be deducted up to the amount of taxable income. Management believes that this presentation
provides meaningful information since it facilitates the comparison of revenues arising from taxable and exempt sources.
Tangible Common Equity and Tangible Assets
Tangible common equity, tangible common equity ratio, tangible assets and tangible book value per common share are non-GAAP
financial measures. Tangible common equity ratio and tangible book value per common share should be used in conjunction with
more traditional bank capital ratios commonly used by banks and analysts to compare the capital adequacy of banking
organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase
accounting method for mergers and acquisitions. Tangible common equity, tangible assets and other related measures should not
be used in isolation or as a substitute for stockholders' equity, total assets or any other measure calculated in accordance with
GAAP. Moreover, the way the Corporation calculates its tangible common equity, tangible assets and other related measures may
differ from that of other companies reporting measures with similar names.
Table 8 provides a reconciliation of total stockholders’ equity to tangible common equity and total assets to tangible assets as of
March 31, 2026 and December 31, 2025.
110
CRITICAL ACCOUNTING POLICIES / ESTIMATES
The accounting and reporting policies followed by the Corporation and its subsidiaries conform to U.S. GAAP and general practices
within the financial services industry. Various elements of the Corporation’s accounting policies, by their nature, are inherently
subject to estimation techniques, valuation assumptions and other subjective assessments.
Management has discussed the development and selection of the critical accounting estimates with the Corporation’s Audit
Committee. The Corporation has identified as critical accounting estimates those related to: (i) Fair Value Measurement of Financial
Instruments; (ii) Loans and Allowance for Credit Losses; (iii) Income Taxes; (iv) Goodwill and Other Intangible Assets; and (v)
Pension and Postretirement Benefit Obligations. For a summary of these critical accounting estimates, refer to the MD&A included
in the 2025 Form 10-K. Also, refer to Note 2 to the Consolidated Financial Statements included in the 2025 Form 10-K for a
summary of the Corporation’s significant accounting policies and to Note 3 to the Consolidated Financial Statements included in this
Form 10-Q for information on recently adopted accounting standard updates.
STATEMENT OF OPERATIONS ANALYSIS
NET INTEREST INCOME
Net interest income (“NII”) for the quarter ended March 31, 2026 was $670.2 million an increase of $64.6 million, when compared to
the same quarter in 2025. NII growth was attributable to lower cost of deposits by $38.4 million, primarily due to P.R. public
deposits, loan growth and higher income from investments in U.S Treasury securities. Net interest income on a taxable equivalent
basis for the first quarter of 2026 was $757.8 million, an increase of $94.0 million.
Net interest margin (“NIM”) for the first quarter of 2026 was 3.66%, an increase of 26 basis points when compared to the first quarter
of 2025. On a taxable equivalent basis, net interest margin for the first quarter of 2026 was 4.14%, higher by 41 basis points when
compared to the first quarter of 2025, mainly due to higher level of tax-exempt securities and loans. NIM expansion, when compared
to the same quarter of the previous year, was primarily due to lower deposit costs resulting from the repricing of market-linked high-
cost deposits, mainly P.R. public deposits, and higher yields on U.S. Treasury securities. Total cost of deposits decreased 27 basis
points to 1.56%. Excluding P.R. public deposits, total deposit costs decreased 8 basis points to 1.09% compared to the same
quarter in 2025.
On a taxable equivalent basis, the main drivers of the increase for the first quarter of 2026 were:
●
at higher yields with average balances increasing by $2.0 billion supported by deposit growth and purchases completed in
the third quarter of 2025 of approximately $2.5 billion of U.S. Treasury notes with an average duration of 1.4 years
through a combination of approximately $1.0 billion in maturing U.S. Treasuries and a reduction of approximately $1.5
billion in overnight Fed funds;
●
by $2.2 billion when compared to the same period in the previous year driven by commercial, construction and mortgage
portfolio, along with higher yields from auto, leases and mortgage portfolios. Loan portfolio yields increased five basis
points to 7.53%; and
●
cost of interest-bearing deposits decreased by 35 basis points, driven by repricing of market-linked P.R. public deposits
which decreased by 66 basis points to 2.66%, coupled with a decrease in Popular U.S. deposit costs attributable to
repricing across most deposit products, mainly online savings and time deposits;
partially offset by:
●
driven by higher re-investment activity in U.S. Treasuries and loan growth as described above, coupled with lower yields
resulting from declining short-term market rates during 2025.
111
Table 2 - Analysis of Levels & Yields on a Taxable Equivalent Basis (Non-GAAP)
Quarter ended March 31,
Variance
Average Volume
Average Yields / Costs
Interest
Attributable to
2026
2025
Variance
2026
2025
2026
2025
Variance
Rate
Volume
(In millions)
(In thousands)
$
4,850
$
6,379
$
(1,529)
3.70
%
4.46
%
(0.76)
%
Money market
investments
$
44,240
$
70,166
$
(25,926)
$
(10,784)
$
(15,142)
29,810
28,415
1,395
3.52
3.14
0.38
Investment securities [1]
258,897
220,435
38,462
24,348
14,114
34
31
3
5.56
5.82
(0.26)
Trading securities
463
440
23
(20)
43
Total money market,
investment and
trading
34,694
34,825
(131)
3.54
3.38
0.16
securities
303,600
291,041
12,559
13,544
(985)
Loans:
19,723
18,489
1,234
6.71
6.71
-
Commercial
326,387
305,968
20,419
3
20,416
1,697
1,309
388
8.14
8.11
0.03
Construction
34,068
26,190
7,878
102
7,776
1,985
1,930
55
7.35
7.14
0.21
Leasing
36,459
34,444
2,015
1,015
1,000
8,664
8,168
496
6.08
5.82
0.26
Mortgage
131,679
118,917
12,762
5,360
7,402
3,309
3,203
106
13.86
14.04
(0.18)
Consumer
113,129
110,859
2,270
(1,351)
3,621
3,892
3,907
(15)
9.33
9.12
0.21
Auto
89,496
87,850
1,646
1,980
(334)
39,270
37,006
2,264
7.53
7.48
0.05
Total loans
731,218
684,228
46,990
7,109
39,881
$
73,964
$
71,831
$
2,133
5.66
%
5.49
%
0.17
%
Total earning assets
$
1,034,818
$
975,269
$
59,549
$
20,653
$
38,896
Interest bearing
deposits:
$
8,554
$
7,983
$
571
1.62
%
1.73
%
(0.11)
%
NOW and money
market
$
34,159
$
34,002
$
157
$
(4,227)
$
4,384
14,633
14,507
126
0.77
0.87
(0.10)
Savings
27,714
31,280
(3,566)
(2,118)
(1,448)
8,714
8,400
314
2.99
3.22
(0.23)
Time deposits
64,243
66,681
(2,438)
(4,969)
2,531
20,362
20,286
76
2.66
3.32
(0.66)
P.R. public deposits
133,302
165,900
(32,598)
(33,046)
448
52,263
51,176
1,087
2.01
2.36
(0.35)
Total interest bearing
deposits
259,418
297,863
(38,445)
(44,360)
5,915
15,101
14,682
419
Non-interest bearing
demand deposits
67,364
65,858
1,506
1.56
1.83
(0.27)
Total deposits
259,418
297,863
(38,445)
(44,360)
5,915
597
121
476
3.88
4.77
(0.89)
Short-term borrowings
5,703
1,426
4,277
(284)
4,561
Other medium and
772
862
(90)
6.26
5.66
0.60
long-term debt
11,915
12,112
(197)
1,223
(1,420)
Total interest bearing
53,632
52,159
1,473
2.09
2.42
(0.33)
liabilities (excluding
demand deposits)
277,036
311,401
(34,365)
(43,421)
9,056
Other sources of funds
5,231
4,990
241
$
73,964
$
71,831
$
2,133
1.52
%
1.76
%
(0.24)
%
Total source of funds
$
277,036
$
311,401
$
(34,365)
$
(43,421)
$
9,056
Net interest margin/
income on a taxable
equivalent basis (Non-
GAAP)
4.14
%
3.73
%
0.41
%
$
757,782
$
663,868
$
93,914
$
64,074
$
29,840
3.57
%
3.07
%
0.50
%
Taxable equivalent
adjustment
87,602
58,271
29,331
Net interest margin/
income non-taxable
equivalent basis (GAAP)
3.66
%
3.40
%
0.26
%
$
670,180
$
605,597
$
64,583
Note: The changes that are not due solely to volume or rate are allocated to volume and rate based on the proportion of the change in each category.
112
[1] Average balances exclude unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities transferred from
available-for-sale to held-to-maturity.
113
Provision for Credit Losses - Loans Held-in-Portfolio and Unfunded Commitments
For the quarter ended March 31, 2026, the Corporation recorded a provision for credit losses of $75.8 million, an increase of $11.9
million when compared to the same quarter of the previous year. The provision for loan and lease losses was $75.7 million, an
increase of $10.5 million, and the provision for unfunded commitments was $0.1 million, an unfavorable variance of $1.4 million,
mainly driven by higher unfunded commitments in the Popular Bank.
As discussed in Note 8 to the Consolidated Financial Statements, the Corporation estimates the ACL by weighting the outputs of
optimistic, baseline, and pessimistic scenarios. During the first quarter of 2026, among the three scenarios evaluated to estimate the
ACL, the baseline scenario was assigned the highest probability, followed by the pessimistic scenario, which weight was increased
during 2025 in response to ongoing uncertainty.
The major drivers of the changes in the provision for loan losses during the quarter by business segment when compared to the
same quarter in 2025, were as follows:
●
same quarter in 2025, driven by higher provision expense for the commercial portfolio by $39.1 million, primarily due to
loan modifications, an additional specific reserve to a single borrower in the telecommunications industry, and higher net
charge-offs due to an impairment recorded during the quarter of $11.1 million mainly due to a commercial real estate loan.
Both the borrower with the specific reserve and the commercial real estate loan were classified as NPLs in the third
quarter of 2025. Higher provisions were partially offset by decreases of $15.8 million and $4.5 million in the consumer
loan and leases portfolios, respectively, showing improvement in credit quality.
●
to the same quarter in 2025. The decrease was primarily driven by lower provision expense in both the commercial and
consumer loan portfolio, with reductions of $7.5 million and $2.6 million, respectively. The reduction in the commercial
loan segment was mainly driven by higher qualitative reserves established during the first quarter of 2025 to maintain
adequate ACL coverage. The decrease in the consumer loan portfolio was mainly attributable to improvements in overall
credit quality and lower ending balances.
At March 31, 2026, the total allowance for credit losses for loans held-in-portfolio amounted to $823.7 million, an increase of $15.6
million when compared to December 31, 2025. The ratio of the allowance for credit losses to loans held-in-portfolio was 2.10% at
March 31, 2026 versus to 2.05% at December 31, 2025. Refer to Note 8 to the Consolidated Financial Statements for additional
information on the Corporation’s methodology to estimate its ACL. Refer to the Credit Risk section of this MD&A for a detailed
analysis of net charge-offs, non-performing assets, the allowance for credit losses and selected loan losses statistics.
Non-Interest Income
Non-interest income amounted to $165.6 million for the first quarter of 2026, an increase of $13.6 million when compared with the
same quarter for the previous year. The variance was primarily due to:
●
management commissions by $1.2 million; and
●
equity method.
Operating Expenses
Operating expenses for the first quarter of 2026 totaled $467.3 million, a decrease of $3.7 million when compared to the first quarter
of 2025, mainly driven by:
●
pension plan costs due to changes in actuarial assumptions;
114
●
●
sale;
partially offset by:
●
investments in technology and transformation initiatives; and
●
employees as well higher valuation of securities held for deferred benefit plans.
115
Table 3 - Operating Expenses
Quarters ended March 31,
(In thousands)
2026
2025
Variance
Personnel costs:
Salaries
$
134,813
$
130,950
$
3,863
Commissions, incentives and other bonuses
40,185
37,986
2,199
Profit sharing
(1,203)
-
(1,203)
Pension, postretirement and medical insurance
14,896
14,566
330
Other personnel costs, including payroll taxes
27,378
29,211
(1,833)
Total personnel costs
216,069
212,713
3,356
Net occupancy expenses
27,299
27,218
81
Equipment expenses
5,229
5,302
(73)
Other taxes
17,677
18,725
(1,048)
Professional fees
25,553
26,825
(1,272)
Technology and software expenses
89,139
83,668
5,471
Processing and transactional services:
Credit and debit cards
14,206
12,926
1,280
Other processing and transactional services
24,881
24,855
26
Total processing and transactional services
39,087
37,781
1,306
Communications
4,509
4,904
(395)
Business promotion:
Rewards and customer loyalty programs
15,393
16,365
(972)
Other business promotion
7,467
7,310
157
Total business promotion
22,860
23,675
(815)
Deposit insurance
9,917
10,035
(118)
Other real estate owned (OREO) expense (income)
(4,618)
(3,330)
(1,288)
Other operating expenses:
Operational losses
3,975
6,138
(2,163)
All other
10,230
16,761
(6,531)
Total other operating expenses
14,205
22,899
(8,694)
Amortization of intangibles
384
597
(213)
Total operating expenses
$
467,310
$
471,012
$
(3,702)
Income Taxes
For the quarter ended March 31, 2026, the Corporation recorded an income tax expense of $46.9 million with an ETR of 16.0%,
compared to $45.1 million with an ETR of 20.2% for the same period of year 2025. Lower ETR when compared to the first quarter
of 2025 is driven by higher net exempt income.
At March 31, 2026, the Corporation had a net deferred tax asset amounting to $810.5 million, net of a valuation allowance of $468.3
million. The net deferred tax asset related to the U.S. operations was $223.6 million, net of a valuation allowance of $386.6 million.
Refer to Note 26 to the Consolidated Financial Statements for additional information on deferred tax asset balances.
REPORTABLE SEGMENT RESULTS
The Corporation’s reportable segments for managerial reporting purposes consist of Banco Popular de Puerto Rico and Popular
U.S. A Corporate group has also been defined to support the reportable segments.
For a description and definition of the Corporation’s reportable segments, including additional financial information and the
underlying management accounting process, refer to Note 28 to the Consolidated Financial Statements.
116
The corporate group reported a net income of $4.4 million for the quarter ended March 31, 2026, compared with a net loss of $3.6
million for the same quarter of the previous year, mainly due to higher income from equity method investments. There were no
intercompany distributions between the U.S. subsidiaries and the bank holding companies during the first quarters of 2026 or 2025.
Highlights on the earnings results for the reportable segments are discussed below:
Banco Popular de Puerto Rico
The Banco Popular de Puerto Rico (“BPPR”) reportable segment’s net income amounted to $204.4 million for the quarter ended
March 31, 2026, higher by $38.4 million when compared to the same quarter of the previous year. The main drivers for a higher
income included:
●
32 basis points. P.R. public deposits costs, which are market linked, decreased by $32.6 million or 66 basis points as the
cost was favorably impacted by declines in short-term market rates during 2025. Additionally, higher income from loans by
$20.1 million attributable to loan growth led by commercial, construction and mortgage portfolios during 2025, which
resulted in higher average balances by $1.6 billion when compared to the first quarter of 2025. In addition, higher income
from investment securities by $16.7 million or 16 basis points contributed to higher net interest income, due in part to
higher investment activity in higher yielding U.S. Treasury securities. This was partially offset by lower income from money
market investments by $20.2 million driven by lower average balances by $1.2 billion driven by the deployment of funds
for loan growth and investments activity, and lower yields by 78 basis points due to declining short-term market rates. Net
interest margin expanded 22 basis points to 3.85% when compared to the same quarter of 2025 drive by lower deposit
costs;
●
credit card fees due to higher transaction volume, and higher asset management fees;
●
mortgage servicing loss reserves and higher gains on repossessed unit sales by $1.3 million, lower professional fees by
$1.1 million, partially offset by higher technology and software expenses by $1.6 million due to continuing investments in
technology and transformation initiatives, higher personnel costs by $1.4 million mainly due to an increase in salaries
expenses driven by exempt employees, and higher processing and transactional fees expenses by $1.3 million; and
●
partially offset by:
●
Held-in-Portfolio and Unfunded Commitments in this MD&A for more discussion over the drivers of the provision for credit
losses by business segment.
Popular U.S.
For the quarter ended March 31, 2026, the reportable segment of Popular U.S. reported a net income of $37.0 million, compared
with a net income of $14.8 million for the same quarter of the previous year. The main drivers for higher net income are the
following:
●
million or 22 basis points, primarily attributable to loan growth coupled with lower deposit cost driven by repricing in most
deposit products, most notably in online savings and time deposits. Additionally, higher income from investment securities
by $3.9 million in part due to higher investment activity in U.S. Treasury securities. This was partially offset by lower
income from money market investments by $7.4 million due to lower average balances and an increase in short-term
117
borrowings expense by $4.3 million resulting from higher FHLB advances when compared to the same period of 2025.
Net interest margin at 3.15% expanded 41 basis points, driven by the earning assets mix and lower deposit costs; and
●
to section Provision for Credit Losses-Loans Held-in-Portfolio and Unfunded Commitments in this MD&A for more
discussion over the drivers of the provision for credit losses by business segment;
partially offset by:
●
STATEMENT OF FINANCIAL CONDITION ANALYSIS
Assets
The Corporation’s total assets were $76.1 billion at March 31, 2026, compared to $75.3 billion at December 31, 2025. Higher total
assets by $782.8 million was driven by an increase in AFS securities at both BPPR and PB segments, money market investments
and other assets, partially offset by a decrease in HTM securities and lower loan balances at PB. Refer to the Consolidated
Statements of Financial Condition included in this report and to the following narrative for additional information.
Money market investments and investment securities
Money market investments increased by $29.2 million as of March 31, 2026, when compared to December 31, 2025, mainly driven
by higher deposit balances. AFS securities increased $1.2 billion, driven by investment in U.S. treasury securities of $1.3 billion,
partially offset by maturities and principal paydowns, mainly in mortgage-backed securities (“MBS”) and higher unrealized losses in
AFS securities of $37.9 million. HTM securities decreased by $365.0 million driven by maturities and principal paydowns, partially
offset by the accretion of $46.9 million of the discount related to U.S. Treasury securities previously reclassified from AFS to HTM.
Refer to Note 5 and to Note 6 to the Consolidated Financial Statements for additional information with respect to the Corporation’s
debt securities available-for-sale and held-to-maturity.
Loans
Refer to Table 4 for a breakdown of the Corporation’s loan portfolio. Also, refer to Note 7 in the Consolidated Financial Statements
for detailed information about the Corporation’s loan portfolio composition and loan purchases and sales.
Loans held-in-portfolio were $39.3 billion at March 31, 2026, a slight decrease of $37.8 million when compared to December 31,
2025. In the PB segment loan balances decreased by $56.1 million across the construction, mortgage and consumer portfolios,
mainly due to paydowns in the construction segment and runoff from the exited residential mortgage business. In the BPPR
segment, loan balances increased by $18.3 million with modest growth in the mortgage and commercial segments, partially offset
by lower auto loans and leases lending activities.
At March 31, 2026, the Corporation’s loans to non-depository financial institutions (‘’NDFIs’’) amounted to $540.8 million, an
decrease of $4.2 million, compared to December 31, 2025. At March 31, 2026, the Corporation’s exposure to NDFIs was composed
of approximately $266.1 million to insurance companies for general corporate purposes unrelated to lending activities, $105.5 million
related to mortgage credit intermediaries, and $169.3 million to consumer and commercial credit intermediaries. All loans to NDFIs
are current in their contractual payments and carry a ‘pass’ rating.
118
Table 4 - Loans Ending Balances
(In thousands)
March 31, 2026
December 31, 2025
Variance
Loans held-in-portfolio:
Commercial
$
2,427,295
$
2,455,790
$
(28,495)
5,543,451
5,543,284
167
3,212,356
3,153,080
59,276
8,565,559
8,607,412
(41,853)
Total Commercial
19,748,661
19,759,566
(10,905)
Construction
1,674,193
1,674,899
(706)
Mortgage
8,712,361
8,649,440
62,921
Leasing
1,986,165
2,001,365
(15,200)
Consumer
1,214,199
1,256,717
(42,518)
79,764
78,692
1,072
1,913,281
1,906,228
7,053
3,783,904
3,819,812
(35,908)
177,174
180,799
(3,625)
Total Consumer
7,168,322
7,242,248
(73,926)
Total loans held-in -portfolio
$
39,289,702
$
39,327,518
$
(37,816)
Loans held-for-sale:
$
5,603
$
9,998
$
(4,395)
Total loans held-for-sale
$
5,603
$
9,998
$
(4,395)
Total loans
$
39,295,305
$
39,337,516
$
(42,211)
119
Other assets
Other assets amounted to $1.7 billion at March 31, 2026, an increase of $25.8 million when compared to December 31, 2025. The
variance was mainly driven by an increase of $18.6 million in investments under the equity method, primarily due to the equity
pickup from our investment in BHD, and an increase in capitalized software costs of $10.6 million related to technology
modernization, partially offset by lower prepaid taxes of $9.1 million. Refer to Note 10 to the Consolidated Financial Statements for a
breakdown of the principal categories that comprise the caption of “Other Assets” in the Consolidated Statements of Financial
Condition at March 31, 2026 and December 31, 2025.
Liabilities
The Corporation’s total liabilities were $69.8 billion at March 31, 2026, an increase of $720.7 million, when compared to December
31, 2025. The following is a discussion of the significant changes in liabilities.
Deposits and Borrowings
Total Deposits
The Corporation’s deposits totaled $67.6 billion as of March 31, 2026, compared to $66.2 billion as of December 31, 2025. Ending
deposit balances increased by $1.4 billion mainly from higher retail and commercial deposits in BPPR in part due to seasonal tax
refunds. Excluding P.R. public deposits, customer deposits increased by $1.2 billion. Average deposits increased by $1.1 billion, or
$383.5 million when excluding P.R. public deposits.
At the end of the first quarter of 2026, Puerto Rico public deposits were $19.7 billion, representing 30% of total deposits and are
expected to continue to range in the short term between $18 billion and $20 billion. However, the rate at which public deposit
balances may change is uncertain and difficult to predict. The amount and timing of any such change is likely to be impacted by, for
example, the level of federal assistance and speed at which it is distributed, the use of local funds to cover federal assistance
programs during the U.S. government shutdown, the financial condition, liquidity and cash management practices of the Puerto Rico
Government and its instrumentalities, and the implementation of fiscal and debt adjustment plans approved pursuant to PROMESA
or other actions mandated by the Fiscal Oversight and Management Board for Puerto Rico (the “Oversight Board”). Additionally, the
Trump Administration is conducting a review of federal funding, which could entail a reduction in federal funding available for Puerto
Rico. P.R public deposits costs are generally indexed to changes in short-term market rates with a one-quarter lag, in accordance
with contractual terms. As a result, these deposits’ costs have typically lagged variable asset repricing. These deposits require that
the bank pledge high credit quality securities as collateral; therefore, liquidity risks arising from deposit outflows are lower.
The volume and cost of P.R. public deposits and the proportion of high-cost deposits in the U.S, directly impact the balance and mix
of earning assets and therefore represent a key factor in the Corporation’s ability to expand its net interest margin.
Refer to Table 5 for a breakdown of the Corporation’s deposits at March 31, 2026 and December 31, 2025.
120
Table 5 - Deposits Ending Balances
(In thousands)
March 31, 2026
December 31, 2025
Variance
Deposits excluding P.R. public deposits:
$
15,778,435
$
15,298,712
$
479,723
23,208,340
22,655,936
552,404
82,417
87,566
(5,149)
7,958,260
7,861,848
96,412
914,526
866,772
47,754
Sub-total deposits excluding P.R. public deposits
47,941,978
46,770,834
1,171,144
P.R. public deposits:
11,967,888
11,534,301
433,587
6,828,306
7,134,217
(305,911)
873,144
750,741
122,403
Sub-total P.R. public deposits
19,669,338
19,419,259
250,079
Total deposits
$
67,611,316
$
66,190,093
$
1,421,223
[1] Includes interest bearing demand deposits.
Borrowings
The Corporation’s borrowings totaled $1.1 billion at March 31, 2026, a decrease of $329.0 million when compared to December 31,
2025. The decrease was mainly related to lower FHLB advances by $325.0 million, mainly at PB. Refer to Note 13 to the
Consolidated Financial Statements for detailed information on the Corporation’s borrowings. Also, refer to the Liquidity section in
this MD&A for additional information on the Corporation’s funding sources.
Stockholders’ Equity
Stockholders’ equity totaled $6.3 billion at March 31, 2026, an increase of $62.0 million when compared to December 31, 2025. The
increase was principally due to net income for the quarter ended March 31, 2026 of $245.7 million, coupled with the after-tax effect
of the amortization of unrealized losses from securities previously reclassified to HTM of $37.5 million, partially offset by an increase
in treasury stock of $152.4 million, mainly due to common stock repurchases, the common and preferred dividends declared of
$48.9 million, and an increase in net unrealized losses in the portfolio of AFS securities of $25.3 million. Refer to the Consolidated
Statements of Financial Condition, Comprehensive Income and Changes in Stockholders’ Equity for information on the composition
of stockholders’ equity.
During the quarter ended March 31, 2026, Popular repurchased 1,555,398 shares of common stock for $155.2 million at an average
price of $134.31 per share. As of March 31, 2026, $126.0 million remained available for stock repurchase under the currently active
authorization.
The composition of the Corporation’s financing to total assets at March 31, 2026 and December 31, 2025 is included in Table 6.
121
Table 6 - Financing to Total Assets
March 31,
December 31,
% (decrease) increase
% of total assets
(Dollars in millions)
2026
2025
from 2025 to 2026
2026
2025
Non-interest-bearing core deposits
$
15,785
$
15,304
3.1
%
20.7
%
20.3
%
Interest-bearing core deposits
45,872
46,017
(0.3)
60.3
61.1
Interest-bearing other deposits
5,954
4,869
22.3
7.8
6.4
Repurchase agreements
35
39
(10.3)
-
0.1
Other short-term borrowings
350
650
(46.2)
0.5
0.9
Notes payable
735
760
(3.3)
1.0
1.0
Other liabilities
1,089
1,460
(25.4)
1.4
1.9
Stockholders’ equity
6,311
6,249
1.0
8.3
8.3
122
CAPITAL
Regulatory Capital
The Corporation, BPPR and PB are subject to regulatory capital requirements established by the Federal Reserve Board. The risk-
based capital standards applicable to the Corporation, BPPR and PB (“Basel III capital rules”) are based on the final capital
framework for strengthening international capital standards, known as Basel III, of the Basel Committee on Banking Supervision. As
of March 31, 2026, the Corporation’s, BPPR’s and PB’s capital ratios continue to exceed the minimum requirements for being “well-
capitalized”.
The risk-based capital ratios presented in Table 7, which include common equity tier 1, Tier 1 capital, total capital and leverage
capital as of March 31, 2026 and December 31, 2025.
Table 7 - Capital Adequacy Data
(Dollars in thousands)
March 31, 2026
December 31, 2025
Common equity tier 1 capital:
Common stockholders' equity - U.S. GAAP basis
$
6,288,943
$
6,226,936
AOCI related adjustments due to opt-out election
1,083,150
1,096,805
Goodwill, net of associated deferred tax liability (DTL)
(637,705)
(639,734)
Intangible assets, net of associated DTLs
(4,692)
(5,076)
Deferred tax assets and other deductions
(209,380)
(215,404)
Common equity tier 1 capital
$
6,520,316
$
6,463,527
Additional tier 1 capital:
Preferred stock
22,143
22,143
Additional tier 1 capital
$
22,143
$
22,143
Tier 1 capital
$
6,542,459
$
6,485,670
Tier 2 capital:
Trust preferred securities subject to phase in as tier 2
192,674
192,674
Other inclusions (deductions), net
515,782
517,723
Tier 2 capital
$
708,456
$
710,397
Total risk-based capital
$
7,250,915
$
7,196,067
Minimum total capital requirement to be well capitalized
$
4,095,067
$
4,112,375
Excess total capital over minimum well capitalized
$
3,155,848
$
3,083,692
Total risk-weighted assets
$
40,950,669
$
41,123,753
Total assets for leverage ratio
$
76,104,777
$
74,661,894
Risk-based capital ratios:
Common equity tier 1 capital
15.92
%
15.72
%
Tier 1 capital
15.98
15.77
Total capital
17.71
17.50
Tier 1 leverage
8.60
8.69
123
The Basel III capital rules provide that a depository institution is deemed to be well capitalized if it maintains a leverage ratio of at
least 5%, a common equity Tier 1 ratio of at least 6.5%, a Tier 1 capital ratio of at least 8% and a total risk-based ratio of at least
10%. The Corporation, BPPR and PB leverage ratio, common equity Tier 1 ratio and Tier 1 capital ratio, respectively as of March
31, 2026, continue to exceed the minimum requirements for being “well-capitalized” under the Basel III capital rules.
The increase in the common equity Tier I capital ratio, Tier I capital ratio, and total capital ratio as of March 31, 2026 as compared to
December 31, 2025 was mainly due to the quarter’s earnings, and lower risk weighted assets driven by the decrease in loans held-
in-portfolio and lower non-performing loans held-in-portfolio, partially offset by the repurchase of common stock and common stock
dividends. The decrease in the leverage ratio was driven by higher total assets which are impacted by zero-risk weighted assets that
did not have a significant impact on the risk weighted assets, partially offset by the quarter’s earnings.
Reconciliation to Tangible Common Equity and Tangible Assets
Table 8 provides a reconciliation of total stockholders’ equity to tangible common equity and total assets to tangible assets as of
March 31, 2026, and December 31, 2025.
124
Table 8 - Reconciliation of Tangible Common Equity and Tangible Assets
(In thousands, except share or per share information)
March 31, 2026
December 31, 2025
Total stockholders’ equity
$
6,311,086
$
6,249,079
Less: Preferred stock
(22,143)
(22,143)
Less: Goodwill
(789,954)
(789,954)
Less: Other intangibles
(4,692)
(5,076)
Total tangible common equity
$
5,494,297
$
5,431,906
Total assets
$
76,131,018
$
75,348,267
Less: Goodwill
(789,954)
(789,954)
Less: Other intangibles
(4,692)
(5,076)
Total tangible assets
$
75,336,372
$
74,553,237
Tangible common equity to tangible assets
7.29
%
7.29
%
Common shares outstanding at end of period
64,654,788
65,719,385
Tangible book value per common share
$
84.98
$
82.65
Quarterly average
Total stockholders’ equity
$
6,289,337
$
6,938,571
[1]
Less: Preferred Stock
(22,143)
(22,143)
Less: Goodwill
(789,954)
(789,954)
Less: Other intangibles
(4,944)
(5,328)
Total tangible equity before adjusting for the impact of unrealized losses
on AFS securities including those transferred to HTM
$
5,472,296
$
6,121,146
Return on average tangible common equity before adjusting for the
impact of unrealized losses on AFS securities including those transferred
to HTM
18.18
%
15.14
%
Add: Average unrealized losses on AFS securities
743,809
56,761
Add: Average unrealized losses on AFS securities transferred to HTM
221,114
259,058
Total tangible equity after add back of impact of unrealized losses on AFS
securities, including those transferred to HTM
$
6,437,219
$
6,436,965
Return on average tangible common equity after add back of impact of
unrealized losses on AFS securities including those transferred to HTM
(''ROTCE'')
15.46
%
14.39
%
125
RISK MANAGEMENT
Market / Interest Rate Risk
The Corporation’s assets that are mainly subject to market valuation risk are debt securities classified as available-for-sale. Refer to
Notes 5 and 6 to the Consolidated Financial Statements for further information on the debt securities available-for-sale and held-to-
maturity portfolios. Debt securities classified as available-for-sale and held-to-maturity amounted to $21.7 billion and $7.0 billion,
respectively, as of March 31, 2026. Other assets subject to market risk include mortgage servicing rights ("MSRs") with a fair value
of $94.2 million as of March 31, 2026.
Interest Rate Risk (“IRR”)
The Corporation’s net interest income is subject to various categories of interest rate risk, including repricing, basis, yield curve and
option risks. In managing interest rate risk, management may alter the mix of floating and fixed rate assets and liabilities, change
pricing schedules, adjust maturities through sales and purchases of investment securities, and enter into derivative contracts,
among other alternatives.
Management utilizes various tools to assess IRR, including Net Interest Income (“NII”) simulation modeling, static gap analysis, and
Economic Value of Equity (“EVE”) to monitor the risk arising from the dynamic characteristics of assets and liabilities subject to IRR.
The three methodologies complement each other and are used jointly in the evaluation of the Corporation’s IRR. NII simulation
modeling, by legal entity and on a consolidated basis, is prepared for a five-year period, which in conjunction with the EVE analysis,
provides management a better view of long-term IRR.
The Corporation processes NII simulations under interest rate scenarios in which the yield curve is assumed to rise and decline by
the same magnitude (parallel shifts). The rate scenarios considered in these market risk simulations include instantaneous parallel
changes of -100, -200, +100, and +200 basis points during the succeeding twelve-month period. Assumptions included in these
analyses include that the balance sheet remains flat, relative levels of market interest rates across all yield curve points and
indexes, interest rate spreads, loan prepayments and deposit elasticity. Thus, they should not be relied upon as indicative of actual
results and do not contemplate actions that management may engage in as a response to future changes in interest rates.
Additionally, the Corporation is also subject to the risk inherent in the use of different rate indexes for the repricing of assets and
liabilities, as well as the risk of pricing lags due to contractual or timing differences between the market and management response
to changes in the rate environment. These forward-looking computations are management’s best estimate based on known and
available information and actual results may differ.
The following table presents the results of the simulations at March 31, 2026 and December 31, 2025, assuming a static balance
sheet and parallel changes over flat spot rates over a one-year time horizon:
126
Table 9 - Net Interest Income Sensitivity (One Year Projection)
March 31, 2026
December 31, 2025
(Dollars in thousands)
Amount Change
Percent Change
Amount Change
Percent Change
Change in interest rate
+200 basis points
17,583
0.61
(7,520)
(0.27)
+100 basis points
8,316
0.29
(4,379)
(0.16)
-100 basis points
(10,053)
(0.35)
2,691
0.10
-200 basis points
(17,168)
(0.60)
7,488
0.27
As of March 31, 2026, NII simulations showed that the Corporation’s sensitivity position was asset sensitive. Compared to the
results as of December 31, 2025, the variation in sensitivity and the resulting profile was mainly due to an increase in U.S. Treasury
Bills as a result of a rise in non-interest bearing and low-cost interest-bearing deposits in Puerto Rico offset in part by the purchase
of two-to-three-year U.S. Treasury Notes. The profile reflects that in rising rate scenarios, Popular’s net interest income would
increase during the one-year horizon due to the larger volume of assets repricing and generating more interest income, while
interest expense increases modestly due to the high proportion of low-cost deposits.
The Corporation’s loan and investment portfolios are subject to prepayment risk. Prepayment risk also could have a significant
impact on the duration of mortgage-backed securities and collateralized mortgage obligations.
Trading
The Corporation engages in trading activities in the ordinary course of business at its subsidiaries, BPPR and Popular Securities.
Popular Securities’ trading activities consist primarily of market-making activities to meet expected customers’ needs related to its
retail brokerage business, and purchases and sales of U.S. Government and government sponsored securities with the objective of
realizing gains from expected short-term price movements. BPPR’s trading activities consist primarily of holding U.S. Government
sponsored mortgage-backed securities and economic hedges of the related market risk with “TBA” (to-be-announced) market
transactions. In addition, BPPR uses forward contracts or TBAs that have characteristics similar to that of the forecasted security
and its conversion timeline to hedge its securitization pipeline.
At March 31, 2026, the Corporation held trading securities with a fair value of $30.4 million, representing 0.04% of the Corporation’s
total assets, compared with $36.6 million and 0.05%, respectively, at December 31, 2025.
The Corporation’s trading activities are limited by internal policies. For each of the two subsidiaries, the market risk assumed under
trading activities is measured by the 5-day net value-at-risk (“VAR”), with a confidence level of 99%. The VAR measures the
maximum estimated loss that may occur over a 5-day holding period, given a 99% probability. .
In the opinion of management, the size and composition of the trading portfolio does not represent a significant source of market risk
for the Corporation.
Liquidity
Liquidity Risk Management Process
The Corporation has adopted policies and limits to monitor the Corporation’s liquidity position and that of its banking subsidiaries.
Refer to the Enterprise Risk Management section of Management’s Discussion and Analysis included in the 2025 Form 10-K for
information on the framework in place to monitor, review, and approve policies to measure, limit and manage funding activities and
strategies impacting liquidity risk. Additionally, contingency funding plans are used to model various stress events of different
magnitudes that affect different time horizons, to assist management in evaluating the size of the liquidity buffers needed if those
events occur. However, such models may not predict accurately how the market and customers might react to every event and are
dependent on many assumptions. The objective of effective liquidity management is to ensure that the Corporation has sufficient
127
liquidity to meet all its financial obligations, finance expected future growth, fund planned capital distributions and maintain a
reasonable safety margin for cash needs under both normal and stressed market conditions.
Sources of Liquidity
Deposits, including customer deposits, brokered deposits and public funds deposits, continue to be the most significant source of
funds for the Corporation, representing 89% and 88% of funding of the Corporation’s total assets at March 31, 2026 and December
31, 2025, respectively. The ratio of total ending loans to deposits was 58% and 59% at March 31, 2026 and December 31, 2025,
respectively. In addition to traditional deposits, the Corporation maintains borrowing arrangements, which amounted to $1.1 billion
in outstanding balances at March 31, 2026 (December 31, 2025 - $1.4 billion). A detailed description of the Corporation’s
borrowings, including their terms, is included in Note 13 to the Consolidated Financial Statements. Also, the Consolidated
Statements of Cash Flows in the accompanying Consolidated Financial Statements provide information on the Corporation’s cash
inflows and outflows.
The following sections provide further information on the Corporation’s major funding activities and needs, as well as the risks
involved in these activities.
Banking Subsidiaries
Primary sources of funding for the Corporation’s banking subsidiaries (BPPR and PB or, collectively, “the banking subsidiaries”)
include retail, commercial and public sector deposits, brokered deposits, unpledged investment securities, mortgage loan
securitization and, to a lesser extent, loan sales. In addition, the Corporation maintains borrowing facilities with the FHLB and at the
discount window of the Federal Reserve Bank of New York (the “FRB”) and has a considerable amount of collateral pledged that
can be used to raise funds under these facilities.
At March 31, 2026, the Corporation’s available liquidity increased to $27.7 billion from $27.0 billion on December 31, 2025. During
the first quarter of 2026, the Corporation had no material incremental use of its available liquidity sources. The liquidity sources of
the Corporation at March 31, 2026 are presented in Table 10 below:
128
Table 10 - Liquidity Sources
March 31, 2026
December 31, 2025
(In thousands)
BPPR
Popular U.S.
Total
BPPR
Popular U.S.
Total
Unpledged securities and unused funding
sources:
Money market (excess funds at the
Federal Reserve Bank)
$
3,635,635
$
1,010,262
$
4,645,897
$
3,595,806
$
1,020,478
$
4,616,284
Unpledged securities
5,617,332
1,051,193
6,668,525
5,215,981
1,057,129
6,273,110
FHLB borrowing capacity
3,315,007
927,693
4,242,700
3,291,672
692,744
3,984,416
Discount window of the Federal Reserve
Bank borrowing capacity
8,365,380
3,788,737
12,154,117
8,472,866
3,644,486
12,117,352
Total available liquidity
$
20,933,354
$
6,777,885
$
27,711,239
$
20,576,325
$
6,414,837
$
26,991,162
Refer to Note 13 to the Consolidated Financial Statements for additional information of the Corporation’s borrowing facilities
available through its banking subsidiaries.
The principal uses of funds for the banking subsidiaries include loan originations, investment portfolio purchases, loan purchases
and repurchases, repayment of outstanding obligations (including deposits), advances on certain serviced portfolios and operational
expenses. Also, the banking subsidiaries assume liquidity risk related to collateral posting requirements for certain activities mainly
in connection with contractual commitments, recourse provisions, servicing advances, derivatives and credit card licensing
agreements.
The banking subsidiaries maintain sufficient funding capacity to address large increases in funding requirements such as deposit
outflows. The Corporation has established liquidity guidelines that require the banking subsidiaries to have sufficient liquidity to
cover all short-term borrowings and a portion of deposits.
Deposits are a key source of funding. Refer to Table 5 for a breakdown of deposits by major types. Core deposits are generated
from a large base of consumer, corporate and public sector customers. Core deposits include certificates of deposit under $250,000,
all interest-bearing transactional deposit accounts, non-interest-bearing deposits, and savings deposits. Core deposits exclude
brokered deposits and certificates of deposit over $250,000. Core deposits, excluding P.R. public deposits, which are fully
collateralized, have historically provided the Corporation with a sizable source of relatively stable and low-cost funds. P.R. public
deposits, while linked to market interest rates, provide a stable source of funding with an attractive earning spread. As of March 31,
2026, total Puerto Rico public sector deposits were $19.7 billion, compared to $19.4 billion at December 31, 2025.
Core deposits represent 91% of total deposits at $61.7 million, as of March 31, 2026, compared with 92% at $60.9 billion as of
December 31, 2025. Core deposits financed 85% of the Corporation’s earning assets at March 31, 2026, compared to 85% at
December 31, 2025.
The Corporation had $1.0 billion in brokered deposits at March 31, 2026, which financed approximately 1% of its total assets
(December 31, 2025 - $1.0 billion and 1%, respectively).
The distribution by maturity of certificates of deposit with denominations of $250,000 and over at March 31, 2026 is presented in the
table that follows:
129
Table 11 - Distribution by Maturity of Certificates of Deposit of $250,000 and Over
(In thousands)
3 months or less
$
2,600,756
Over 3 to 12 months
1,109,024
Over 1 year to 3 years
299,828
Over 3 years
119,622
Total
$
4,129,230
As of March 31, 2026, the banking subsidiaries had sufficient current and projected liquidity sources to meet their anticipated cash
flow obligations, as well as special needs and off-balance sheet commitments, in the ordinary course of business and have sufficient
liquidity resources to address stress events. Although the banking subsidiaries have historically been able to replace maturing
deposits and advances, no assurance can be given that they would be able to replace those funds in the future if the Corporation’s
financial condition or general market conditions were to deteriorate. The Corporation’s financial flexibility would be severely
constrained if the banking subsidiaries are unable to maintain access to funding or if adequate funding is not available to
accommodate future financing needs at acceptable interest rates. The banking subsidiaries also are required to deposit cash or
qualifying securities to meet margin requirements on repurchase agreements, deposit agreements and other collateralized
borrowing facilities. To the extent that the value of securities previously pledged as collateral declines because of market changes,
the Corporation will be required to deposit additional cash or securities to meet its margin or collateral requirements and would need
to rely more heavily on alternative funding sources. In these scenarios, the Corporation’s financial flexibility and ability to grow
revenues may not increase proportionately to cover costs and profitability would be adversely affected.
The Corporation considers balances in excess of $250,000 to have a higher potential liquidity risk. Table 12 reflects the aggregate
balance in deposit accounts in excess of $250,000, including collateralized public funds and deposits outside of the U.S. and its
territories. Collateralized public funds, as presented in Table 12, represent public deposit balances from governmental entities in the
U.S. and its territories, including Puerto Rico and the United States Virgin Islands, collateralized based on such jurisdictions’
applicable collateral requirements.
130
Table 12 - Deposits
31-Mar-26
Popular, Inc.
(Dollars in thousands)
BPPR
% of Total
Popular U.S.
% of Total
(Consolidated)
% of Total
Deposits:
Deposits balances under $250,000 [1]
$
24,374,849
44
%
$
8,292,411
68
%
$
32,667,260
48
%
Transactional deposits balances over
$250,000
8,431,271
15
%
2,845,596
23
%
11,276,867
17
%
Time deposits balances over $250,000
2,386,858
4
%
521,619
4
%
2,908,477
4
%
Uninsured foreign deposits
444,415
1
%
-
-
%
444,415
1
%
Collateralized public funds
20,048,501
36
%
265,796
2
%
20,314,297
30
%
Intercompany deposits
200,890
-
%
305,233
3
%
-
-
%
Total deposits
$
55,886,784
100
%
$
12,230,655
100
%
$
67,611,316
100
%
[1] Includes the first $250,000 in balances of transactional and time deposit accounts with balances in excess of $250,000.
31-Dec-25
Popular, Inc.
(Dollars in thousands)
BPPR
% of Total
Popular U.S.
% of Total
(Consolidated)
% of Total
Deposits
Deposits balances under $250,000 [1]
$
23,873,328
44
%
$
8,283,967
69
%
$
32,157,295
49
%
Transactional deposits balances over
$250,000
8,254,961
15
%
2,341,365
19
%
10,596,326
16
%
Time deposits balances over $250,000
2,182,301
4
%
794,183
7
%
2,976,484
4
%
Uninsured foreign deposits
446,360
1
%
-
-
%
446,360
1
%
Collateralized public funds
19,748,934
36
%
264,694
2
%
20,013,628
30
%
Intercompany deposits
235,251
-
%
349,483
3
%
-
-
%
Total deposits
$
54,741,135
100
%
$
12,033,692
100
%
$
66,190,093
100
%
[1] Includes the first $250,000 in balances of transactional and time deposit accounts with balances in excess of $250,000.
Bank Holding Companies
The principal sources of funding for the BHCs, which are Popular, Inc. (holding company only) and PNA, include cash on hand,
investment securities, dividends received from banking and non-banking subsidiaries, asset sales, credit facilities available from
affiliate banking subsidiaries and proceeds from potential securities offerings. Dividends from banking and non-banking subsidiaries
are subject to various regulatory limits and authorization requirements imposed by banking regulators, including the FED and the
NYDFS, that may limit the ability of those subsidiaries to act as a source of funding to the BHCs.
The principal uses of these funds include the repayment of debt, interest payments to holders of senior debt and junior subordinated
deferrable interest debentures (related to trust preferred securities), the payment of dividends to common stockholders, repurchases
of the Corporation’s securities and capitalizing its subsidiaries.
The outstanding balance of notes payable at the BHCs amounted to $595 million at March 31, 2026 and $595 million at December
31, 2025.
The contractual maturities of the BHCs notes payable at March 31, 2026 are presented in Table 13.
Table 13 - Distribution of BHC's Notes Payable by Contractual Maturity
Year
(In thousands)
2028
$
396,955
Later years
198,406
Total
$
595,361
131
As of March 31, 2026, the BHCs had cash and money markets investments totaling $1.6 million and borrowing potential of $165
million from its secured facility with BPPR. The BHCs’ liquidity position continues to be adequate with sufficient cash on hand,
investments and other sources of liquidity that are expected to be sufficient to meet all interest payments and dividend obligations
for the foreseeable future. Additionally, the Corporation’s latest quarterly paid dividend was $0.75 per share or approximately $48
million per quarter.
The BHCs have in the past borrowed in the corporate debt market primarily to finance their non-banking subsidiaries and refinance
debt obligations. These sources of funding are more costly given that two out of three principal credit rating agencies rate the
Corporation’s debt securities below “investment grade”. The Corporation has a shelf registration statement filed and effective with
the Securities and Exchange Commission, which permits the Corporation to issue an unspecified amount of debt or equity
securities.
Non-Banking Subsidiaries
The principal sources of funding for the non-banking subsidiaries include internally generated cash flows from operations, loan
sales, repurchase agreements, capital injections and borrowed funds from their direct parent companies or the holding companies.
The principal uses of funds for the non-banking subsidiaries include repayment of maturing debt, operational expenses and payment
of dividends to the BHCs.
Dividends
During the quarter ended March 31, 2026, the Corporation declared cash dividends of $0.75 per common share outstanding ($49
million in the aggregate). The dividends for the Corporation’s Series A preferred stock amounted to $0.4 million.
During the quarter ended March 31, 2026, the BHCs received dividends and distributions amounting to $175 million from BPPR, and
$12 million from its other non-banking subsidiaries. Dividends from BPPR constitute Popular, Inc.’s primary source of liquidity. In
addition, during the quarter ended March 31, 2026, PIBI, a wholly owned subsidiary of Popular, Inc., had no dividends.
In addition to regulatory limits previously discussed, the ability of a bank subsidiary to up-stream dividends to its BHC could be
impacted by its financial performance and capital, including tangible and regulatory capital, thus potentially limiting the amount of
cash up streamed to the BHCs from the banking subsidiaries. This could, in turn, affect BHC’s ability to declare dividends on its
outstanding common and preferred stock, repurchase its securities or meet its debt obligations. At March 31, 2026, BPPR could
declare a dividend of up to approximately $13 million without prior approval of the Federal Reserve Board due to its retained
income, declared dividend activity and transfers to statutory reserves over the measurement period. In addition, pursuant to the FRB
requirements, PB may not declare or pay a dividend without the prior approval of the Federal Reserve Board and the NYSDFS.
Other Funding Sources and Capital
In addition to cash reserves held at the FRB that totaled $4.7 billion at March 31, 2026, debt securities provide an additional source
of liquidity, which may be realized through either securities sales, collateralized borrowings or repurchase agreements. The
Corporation’s debt securities portfolio consists primarily of liquid U.S. government debt securities and U.S. government sponsored
agency mortgage-backed securities that can be used to raise funds in the repo markets. The availability of repurchase agreements
would be subject to having sufficient unpledged collateral available at the time the transactions are consummated, in addition to
overall liquidity and risk appetite of the various counterparties. Refer to Table 10 for details of the Corporation’s unpledged debt
securities and available credit facilities with the FHLB and the discount window of the Federal Reserve Bank. A substantial portion of
these debt securities could be used to raise financing in the U.S. money markets or from secured lending sources, subject to
changes in their fair market value and customary adjustments (haircuts).
Additional liquidity may be provided through loan maturities, prepayments and sales. The loan portfolio provides a source of
collateral to secure the available credit facilities with the FHLB and the discount window of the Federal Reserve Bank. The loan
portfolio can also be used to obtain funding in the capital markets. Mortgage loans and some types of consumer loans, have
secondary markets which the Corporation could use.
Off-Balance Sheet Arrangements and Other Commitments
132
In the ordinary course of business, the Corporation engages in financial transactions that are not recorded on the balance sheet or
may be recorded on the balance sheet in amounts that are different than the full contract or notional amount of the transaction. As a
provider of financial services, the Corporation routinely enters into commitments with off-balance sheet risk to meet the financial
needs of its customers. Refer to Note 18 to the Consolidated Financial Statements for information on the Corporation’s
commitments to extent credit and other non-credit commitments.
Other types of off-balance sheet arrangements that the Corporation enters in the ordinary course of business include derivatives,
operating leases and provision of guarantees, indemnifications, and representation and warranties. Refer to Note 17 to the
Consolidated Financial Statements for a detailed discussion related to the Corporation’s guarantees, indemnifications obligations,
and representation and warranties arrangements.
The Corporation monitors its cash requirements, including its contractual obligations and debt commitments.
Financial Information of Guarantor and Issuers of Registered Guaranteed Securities
The principal sources of funding for Popular, Inc. Holding Company (“PIHC”) and Popular North America, Inc. (“PNA”) have included
dividends received from their banking and non-banking subsidiaries subject to statutory provisions that limit dividends paid by the
banking subsidiary without regulatory approval, asset sales and proceeds from the issuance of debt and equity.
The Corporation ("PIHC") is the parent holding company of Popular North America (“PNA”) and operates financial services through
its subsidiaries. PNA, a wholly owned subsidiary of Popular, Inc., manages entities such as Equity One, Inc., and PB, including PB’s
subsidiaries: Popular Equipment Finance, LLC, Popular Insurance Agency, U.S.A., and E-LOAN, Inc.
PNA has issued junior subordinated debentures guaranteed by PIHC (the “obligor group”), purchased by statutory trusts established
by the Corporation using proceeds from trust preferred securities (“capital securities”) and common securities of the trusts.
PIHC guarantees the junior subordinated debentures issued by PNA. If PIHC fails to make interest payments on the debentures
held by the trust, the trust will not distribute payments on the capital securities. The guarantee ranks subordinate and junior in right
of payment to all other liabilities of PIHC and equally with all other PIHC-issued guarantees, allowing direct legal action against
PIHC without involving other entities.
Funding for PIHC and PNA includes dividends from subsidiaries, asset sales, and proceeds from debt and equity issuance.
Statutory provisions limit the dividends an insured depository institution can pay to its holding company without regulatory approval.
The summarized financial information below shows the combined financial position of the obligor group as of March 31, 2026 and
December 31, 2025, and the results of their operations for the quarters ended March 31, 2026 and March 31, 2025. Excluded are
investments and equity in earnings from subsidiaries and affiliates outside the obligor group.
Intercompany balances and transactions within the obligor group have been eliminated. Material amounts due from, due to, and
transactions with subsidiaries and affiliates are shown separately. Related party transactions are also presented separately.
133
Table 14 - Summarized Statement of Condition
(In thousands)
March 31, 2026
December 31, 2025
Assets
Cash and money market investments
$
468,987
$
524,882
Investment securities
39,780
38,656
Accounts receivables from non-obligor subsidiaries
15,521
12,798
Other loans (net of allowance for credit losses of $102 (2025 - $132))
23,844
24,169
Investment in equity method investees
5,145
5,145
Other assets
103,289
91,618
Total assets
$
656,566
$
697,268
Liabilities and Stockholders' deficit
Accounts payable to non-obligor subsidiaries
$
11,998
$
7,669
Notes payable
595,362
594,958
Other liabilities
108,959
135,785
Stockholders' deficit
(59,753)
(41,144)
Total liabilities and stockholders' deficit
$
656,566
$
697,268
Table 15 - Summarized Statement of Operations
For the quarters ended
(In thousands)
March 31, 2026
March 31, 2025
Income:
Dividends from non-obligor subsidiaries
$
187,000
$
206,000
Interest income from non-obligor subsidiaries and affiliates
904
1,181
Other operating income
1,281
838
Total income
$
189,185
$
208,019
Expenses:
Services provided by non-obligor subsidiaries and affiliates (net of
reimbursement by subsidiaries for services provided by parent of
$69,903 (2025 - $61,777))
$
5,126
$
3,903
Other expenses
5,694
7,339
Income tax (benefit) expense
(323)
2,679
Total expenses
$
10,497
$
13,921
Net income
$
178,688
$
194,098
134
Risk to Liquidity
The Corporation’s liquidity may come under pressure if it experiences significant unexpected cash outflows due to deposit
withdrawals, which could arise from various factors like economic conditions, loss of depositor confidence, competition, exogenous
events, regulatory requirements or changes, a downgrade in credit rating, or other events causing counterparties to avoid exposure.
Investors should refer to Liquidity Risks section of “Part I, Item 1A” of 2025 Form 10-K for an additional discussion of liquidity risks to
which the Corporation is subject.
Credit Risk
Geographic and Government Risk
The Corporation is exposed to geographic and government risk. The Corporation’s assets and revenue composition by geographical
area and by business segment reporting are presented in Note 32 to the Consolidated Financial Statements. Readers should refer
to Economic and Market Risk section and Business Risk Section of “Part I, Item 1A” of the 2025 Form 10-K for an additional
discussion on how the Corporation is impacted by global and local economic and market conditions, including weakness in the
economy, particularly in Puerto Rico, where a significant portion of our business is concentrated. This section also addresses how
our credit risk and credit losses can increase to the extent our loans are concentrated on borrowers engaged in the same or similar
activities or in borrowers who as a group may be uniquely or disproportionately affected by certain economic or market conditions.
Commonwealth of Puerto Rico
A significant portion of our financial activities and credit exposure is concentrated in the Commonwealth of Puerto Rico (“Puerto
Rico”) which has faced severe economic and fiscal challenges in the past and may face additional challenges in the future.
Economic Performance
The latest estimates from the Puerto Rico Planning Board (the “Planning Board”) indicate that real GNP grew by 2.1% during fiscal
year 2024 (July 2023-June 2024) and by 1.1% in fiscal year 2025 (July 2024-June 2025). For fiscal year 2026 (July 2025-June
2026), the Planning Board forecasts more modest GNP growth of 0.5%. Meanwhile, the Puerto Rico Economic Activity Index
reflected a 1.1% year-over-year increase in December 2025, with no change on a month-over-month basis. While this index is not a
direct measure of real GNP, it serves as an indicator of ongoing economic activity.
In 2021 and 2022, inflation rose sharply in the U.S. and Puerto Rico due to post-pandemic demand and supply chain disruptions.
Inflation began to decrease by mid-2022 as the Federal Reserve raised interest rates, largely stabilizing by September 2024,
leading to a series of rate reductions by the Federal Reserve for the first time in four years. As of March 2026, the U.S. Consumer
Price Index reflected a 3.3% year-over-year increase, which, while below peak 2022 levels, remains above the Federal Reserve’s
2% target. The year-over-year increase accelerated from 2.4% in February 2026 to 3.3% in March 2026, primarily driven by higher
energy and gasoline prices resulting from the recent geopolitical conflict involving Iran. In Puerto Rico, the Consumer Price Index
reflected a year-over-year increase of 2.5% in March 2026, up from 2.3% in February 2026. It is still too early to determine the full
extent to which the conflict involving Iran and its indirect impacts may impact the global and Puerto Rico economies.
Fiscal Challenges of Puerto Rico and its Municipalities
As Puerto Rico’s economy contracted in the 2000s, public debt increased rapidly due to borrowing to cover deficits to pay debt
service, pension benefits, and other expenditures. By 2016, the government had over $120 billion in combined debt and unfunded
pension liabilities, lost access to capital markets, and faced a fiscal crisis.
In response, the U.S. Congress enacted PROMESA in June 2016. PROMESA established an Oversight Board with significant
control over Puerto Rico’s fiscal and economic affairs, including those of its public corporations, instrumentalities and municipalities
(collectively, “PR Government Entities”).
In August 2025, President Donald J. Trump dismissed six of the seven members of the Oversight Board, reportedly due to inefficient
leadership and excessive spending. Three of the dismissed members subsequently filed suit in federal court challenging the legality
135
of their dismissal. On October 3, 2025, the court issued a preliminary injunction that effectively reinstated such members and barred
the seating of replacement members while the case proceeds. Such ruling was appealed to the United States Court of Appeals for
the First Circuit on December 3, 2025, and the appeal remains pending as of March 31, 2026. It is still too early to determine what
impact these developments may have on Puerto Rico’s fiscal and economic affairs.
Under PROMESA, the Oversight Board will remain in place until market access is restored and balanced budgets are achieved for
at least four consecutive years. PROMESA also established two mechanisms for the restructuring of the obligations of PR
Government Entities: (a) Title III, an in-court process akin to that of the U.S. Bankruptcy Code and which permits adjustment of a
broad range of obligations, and (b) Title VI, a largely out-of-court process through which a supermajority of creditors can accept
modifications to debt and bind holdouts.
Since 2017, Puerto Rico and several of its instrumentalities have availed themselves of these mechanisms. The Puerto Rico
government exited Title III in March 2022, and several instrumentalities, such as the Government Development Bank and the Puerto
Rico Highways and Transportation Authority have also completed debt restructurings under Titles III or VI of PROMESA. However,
the Puerto Rico Electric Power Authority is still undergoing its debt restructuring.
Puerto Rico's economic difficulties have also impacted its municipalities. Historically, the central government provided significant
municipal subsidies. However, these have decreased pursuant to fiscal measures required by the Oversight Board. This decline has
been partly offset by federal disaster and COVID-relief funding received by municipalities in recent years. The latest Puerto Rico
fiscal plan proposes a restructured grant system to enhance municipal services and encourage accountability through performance
metrics.
Municipalities are subject to PROMESA, and the Oversight Board has required certain municipalities to submit fiscal plans and
annual budgets for review and approval. Municipalities are also required to seek Oversight Board approval to issue, guarantee or
modify their debts and to enter into significant contracts. To date no municipality has availed itself of the debt restructuring
mechanisms available to them under PROMESA.
Exposure of the Corporation
The credit quality of BPPR’s loan portfolio is closely tied to the economic conditions in Puerto Rico. Deterioration in the Puerto Rico
economy could potentially increase delinquencies and charge-offs, thereby impacting the Corporation’s financial health. The
Corporation has direct exposure to P.R. Government Entities, which are mainly concentrated in obligations from various Puerto Rico
municipalities. Additionally, the Corporation holds loans and securities insured by P.R. Government Entities, such as the Housing
Finance Authority, whose ability to honor guarantees depends on its financial condition. BPPR’s commercial, mortgage, and
consumer loan portfolios are also exposed to risks from private borrowers who are service providers or have other relationships with
the Puerto Rico government and government employees who could be negatively affected by Puerto Rico’s fiscal challenges. For
further discussion of the Corporation’s direct and indirect exposure to the Puerto Rico government and its instrumentalities and
municipalities, please refer to Note 18 – Commitments and Contingencies to the Consolidated Financial Statements.
The Corporation also maintains significant deposits from P.R. Government Entities, with future balances subject to various
uncertainties. Further information on Puerto Rico Government deposits is included in Note 12 – Deposits to the Consolidated
Financial Statements.
United States Virgin Islands
The Corporation has operations in the United States Virgin Islands (“USVI”) and has credit exposure to USVI government entities.
For further discussion of the Corporation’s direct and indirect exposure to USVI government entities, please refer to Note 18 –
Commitments and Contingencies to the Consolidated Financial Statements.
Non-Performing Assets
Non-performing assets (“NPAs”) include primarily past-due loans that are no longer accruing interest, renegotiated loans, and real
estate property acquired through foreclosure. A summary, including certain credit quality metrics, is presented in Table 16.
During the first quarter of 2026, the Corporation’s credit quality metrics remained stable. The Corporation continues to closely
monitor the economic landscape and borrower performance, as macro-economic uncertainty and increased volatility remain key
136
considerations. Management believes that the improvements in risk management practices over recent years and the overall credit
risk profile of the loan portfolio position the Corporation to continue to operate successfully in the current environment.
Total NPAs of $503.8 million as of March 31, 2026 decreased by $37.0 million when compared with December 31, 2025. BPPR’s
NPLs decreased by $38.4 million, primarily driven by reductions in commercial, consumer and mortgage NPLs of $17.6 million,
$17.5 million and $3.0 million, respectively. The decrease in commercial NPLs was mainly driven by an $11.1 million charge-off
related to a commercial real estate facility classified as NPL in the third quarter of 2025. The improvement in consumer NPLs was
primarily due to a $16.8 million reduction in auto NPLs driven by increased payment activity. Popular U.S. NPLs decreased by $1.8
million, mostly driven by a decrease of $3.7 million in the mortgage NPLs.
On March 31, 2026, the ratio of NPLs to total loans held-in-portfolio was 1.17%, compared to 1.27% on December 31, 2025. Other
real estate owned loans (“OREOs”) totaled $45.7 million, an increase of $3.2 million from December 31, 2025.
The Corporation’s commercial loan portfolio secured by real estate (“CRE”) amounted to $11.2 billion on March 31, 2026, of which
$3.2 billion was secured with owner occupied properties, compared with $11.2 billion and $3.2 billion, respectively, on December 31,
2025.
CRE NPLs amounted to $58.6 million at March 31, 2026, compared with $76.0 million at December 31, 2025, driven by the $11. 1
million net charge off on the CRE facility discussed above. The CRE NPL ratios for the BPPR and Popular U.S. segments were
0.83% and 0.28%, respectively, on March 31, 2026, compared with 1.23% and 0.25%, respectively, on December 31, 2025.
The non-owner occupied CRE portfolio was $5.5 billion at March 31, 2026, split between $3.4 billion in BPPR and $2.2 billion in
Popular U.S. This portfolio is diversified across sectors: retail (33%), hotels (19%), and office space (12%), which together represent
two-thirds of total non-owner occupied CRE exposure. Specifically, office space leasing accounts for just 1.7% ($673.6 million) of
the total loan portfolio, mainly comprising mid-rise properties with an average loan size of $3 million, and is well diversified by tenant
type.
Within CRE, the commercial multi-family portfolio is $2.4 billion (approximately 6% of total loans), concentrated in New York Metro
($1.4 billion), South Florida ($664.6 million) and Puerto Rico ($238.5 million) regions. In the New York Metro, there is no exposure to
rent-controlled buildings, and rent-stabilized units make up less than 40% of total units, with most originated after 2019.
In addition to the NPLs included in Table 16, on March 31, 2026 there were $593.2 million of performing loans, mostly commercial
loans, which in management’s opinion, are currently subject to potential future classification as non-performing (December 31, 2025
- $499.6 million).
The following table presents the Corporation’s NPAs as of March 31, 2026 and December 31, 2025:
137
Table 16 - Non-Performing Assets
March 31, 2026
December 31, 2025
(Dollars in thousands)
BPPR
Popular
U.S.
Popular,
Inc.
As a % of
loans HIP
by
category
BPPR
Popular
U.S.
Popular,
Inc.
As a % of
loans HIP
by
category
Commercial
Commercial multi-family
$
-
$
10,962
$
10,962
0.5
%
$
112
$
8,636
$
8,748
0.4
%
Commercial real estate non-owner
occupied
26,457
6,987
33,444
0.6
35,692
7,020
42,712
0.8
Commercial real estate owner
occupied
14,192
-
14,192
0.4
24,567
-
24,567
0.8
Commercial and industrial
185,993
6,524
192,517
2.2
183,914
6,498
190,412
2.2
Total Commercial
226,642
24,473
251,115
1.3
244,285
22,154
266,439
1.3
Mortgage
129,367
9,700
139,067
1.6
132,373
13,422
145,795
1.7
Leasing
8,892
-
8,892
0.4
9,179
-
9,179
0.5
Consumer
-
2,766
2,766
3.5
-
2,796
2,796
3.6
15,755
905
16,660
0.9
18,863
1,233
20,096
1.1
35,390
-
35,390
0.9
52,200
-
52,200
1.4
4,227
-
4,227
2.4
1,809
29
1,838
1.0
Total Consumer
55,372
3,671
59,043
0.8
72,872
4,058
76,930
1.1
Total non-performing loans held-in-
portfolio
420,273
37,844
458,117
1.2
%
458,709
39,634
498,343
1.3
%
Other real estate owned (“OREO”)
45,176
504
45,680
41,929
504
42,433
Total non-performing assets
[1]
$
465,449
$
38,348
$
503,797
$
500,638
$
40,138
$
540,776
Accruing loans past due 90 days or
more
[2]
$
226,218
$
169
$
226,387
$
228,772
$
188
$
228,960
Ratios:
Non-performing assets to total assets
0.78
%
0.24
%
0.66
%
0.85
%
0.25
%
0.72
%
Non-performing loans held-in-portfolio
to loans held-in-portfolio
1.52
0.33
1.17
1.66
0.34
1.27
Allowance for credit losses to loans
held-in-portfolio
2.65
0.79
2.10
2.60
0.77
2.05
Allowance for credit losses to non-
performing loans, excluding held-for-
sale
174.23
241.77
179.81
156.51
227.42
162.15
[1] There were no non-performing loans held-for-sale as of March 31, 2026 and December 31, 2025.
[2] It is the Corporation’s policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90
days or more as opposed to non-performing since the principal repayment is insured. These balances include $43 million of residential mortgage
loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of March 31, 2026 (December 31, 2025 - $47 million).
Furthermore, the Corporation has $26 million in reverse mortgage loans which are guaranteed by FHA, but which are currently not accruing interest.
Due to the guaranteed nature of the loans, it is the Corporation’s policy to exclude these balances from non-performing assets (December 31, 2025 -
$27 million).
For the quarter ended March 31, 2026, total inflows of NPLs held-in-portfolio, excluding consumer loans, increased by $4.2 million,
compared to the same period in 2025. Inflows of NPLs held-in-portfolio at the BPPR segment increased by $6.4 million, compared
to the same period in 2025, mainly driven by higher mortgage inflows by $7.2 million. Inflows of NPLs held-in-portfolio at the Popular
U.S. segment decreased by $2.3 million from the same period in 2025, mainly driven by lower commercial inflows by $2.1 million.
Tables 17 to 22 present the Corporation’s inflows to NPLs for the quarters ended March 31, 2026 and 2025.
138
Table 17 - Activity in Non -Performing Loans Held-in-Portfolio (Excluding Consumer Loans)
For the quarter ended March 31, 2026
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
376,658
$
35,576
$
412,234
Plus:
New non-performing loans
43,461
5,733
49,194
Advances on existing non-performing loans
-
181
181
Less:
Non-performing loans transferred to OREO
(3,111)
-
(3,111)
Non-performing loans charged-off
(12,201)
(24)
(12,225)
Loans returned to accrual status / loan collections
(48,798)
(7,293)
(56,091)
Ending balance - NPLs
$
356,009
$
34,173
$
390,182
Table 18 - Activity in Non -Performing Loans Held-in-Portfolio (Excluding Consumer Loans)
For the quarter ended March 31, 2025
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
209,543
$
53,544
$
263,087
Plus:
New non-performing loans
37,023
8,158
45,181
Advances on existing non-performing loans
-
18
18
Less:
Non-performing loans transferred to OREO
(2,555)
-
(2,555)
Non-performing loans charged-off
(927)
(1,130)
(2,057)
Loans returned to accrual status / loan collections
(51,981)
(13,996)
(65,977)
Ending balance - NPLs
$
191,103
$
46,594
$
237,697
Table 19 - Activity in Non -Performing Commercial Loans Held-In-Portfolio
For the quarter ended March 31, 2026
(In thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
244,285
$
22,154
$
266,439
Plus:
New non-performing loans
5,004
3,205
8,209
Advances on existing non-performing loans
-
170
170
Less:
Non-performing loans transferred to OREO
(650)
-
(650)
Non-performing loans charged-off
(11,661)
(3)
(11,664)
Loans returned to accrual status / loan collections
(10,336)
(1,053)
(11,389)
Ending balance - NPLs
$
226,642
$
24,473
$
251,115
139
Table 20 - Activity in Non -Performing Commercial Loans Held-In-Portfolio
For the quarter ended March 31, 2025
(In thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
51,101
$
23,654
$
74,755
Plus:
New non-performing loans
5,781
5,413
11,194
Advances on existing non-performing loans
-
17
17
Less:
Non-performing loans transferred to OREO
(120)
-
(120)
Non-performing loans charged-off
(739)
(1,130)
(1,869)
Loans returned to accrual status / loan collections
(13,426)
(10,447)
(23,873)
Ending balance - NPLs
$
42,597
$
17,507
$
60,104
Table 21 - Activity in Non -Performing Mortgage Loans Held-in-Portfolio
For the quarter ended March 31, 2026
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
132,373
$
13,422
$
145,795
Plus:
New non-performing loans
38,457
2,528
40,985
Advances on existing non-performing loans
-
11
11
Less:
Non-performing loans transferred to OREO
(2,461)
-
(2,461)
Non-performing loans charged-off
(540)
(21)
(561)
Loans returned to accrual status / loan collections
(38,462)
(6,240)
(44,702)
Ending balance - NPLs
$
129,367
$
9,700
$
139,067
Table 22 - Activity in Non -Performing Mortgage Loans Held-in-Portfolio
For the quarter ended March 31, 2025
(Dollars in thousands)
BPPR
Popular U.S.
Popular, Inc.
Beginning balance - NPLs
$
158,442
$
29,890
$
188,332
Plus:
New non-performing loans
31,242
2,745
33,987
Advances on existing non-performing loans
-
1
1
Less:
Non-performing loans transferred to OREO
(2,435)
-
(2,435)
Non-performing loans charged-off
(188)
-
(188)
Loans returned to accrual status / loan collections
(38,555)
(3,549)
(42,104)
Ending balance - NPLs
$
148,506
$
29,087
$
177,593
140
Loan Delinquencies
Another key measure used to evaluate and monitor the Corporation’s asset quality is loan delinquencies. Loans delinquent 30 days
or more, as a percentage of their related portfolio category on March 31, 2026 and December 31, 2025, are presented below.
Table 23 - Loan Delinquencies
(Dollars in thousands)
March 31, 2026
December 31, 2025
Loans delinquent
30 days or more
Total loans
Total delinquencies
as a percentage
Loans delinquent
30 days or more
Total loans
Total delinquencies
as a percentage
Commercial
Commercial multi-family
$
27,339
$
2,427,295
1.13
%
$
24,982
$
2,455,790
1.02
%
Commercial real estate
non-owner occupied
48,779
5,543,451
0.88
47,068
5,543,284
0.85
Commercial real estate
owner occupied
39,782
3,212,356
1.24
28,008
3,153,080
0.89
Commercial and industrial
220,994
8,565,559
2.58
215,068
8,607,412
2.50
Total Commercial
336,894
19,748,661
1.71
315,126
19,759,566
1.59
Construction
20,538
1,674,193
1.23
17,283
1,674,899
1.03
Mortgage
Mortgage insured
[1]
395,379
3,281,279
12.05
429,796
3,166,679
13.57
Mortgage uninsured
287,933
5,431,082
5.30
329,504
5,482,761
6.01
Total Mortgage
683,312
8,712,361
7.84
759,300
8,649,440
8.78
Leasing
34,091
1,986,165
1.72
37,567
2,001,365
1.88
Consumer
Credit cards
46,467
1,214,199
3.83
51,846
1,256,717
4.13
Home equity lines of credit
3,798
79,764
4.76
4,160
78,692
5.29
Personal
48,279
1,913,281
2.52
53,632
1,906,228
2.81
Auto
129,540
3,783,904
3.42
186,798
3,819,812
4.89
Other
5,374
177,174
3.03
5,929
180,799
3.28
Total Consumer
233,458
7,168,322
3.26
302,365
7,242,248
4.18
Loans held-for-sale
-
5,603
-
-
9,998
-
Total
$
1,308,293
$
39,295,305
3.33
%
$
1,431,641
$
39,337,516
3.64
%
[1] Loans that carry certain guarantees from FHA or the VA. Refer to Note 7 to the Consolidated Financial Statements for additional information of
guaranteed loans.
Allowance for Credit Losses Loans Held-in-Portfolio
The ACL represents management’s estimate of expected credit losses through the remaining contractual life of the different loan
segments, impacted by expected prepayments. The ACL is maintained at a sufficient level to provide for estimated credit losses on
collateral dependent loans as well as loans modified for borrowers with financial difficulties separately from the remainder of the loan
portfolio. The Corporation’s management evaluates the adequacy of the ACL on a quarterly basis. In this evaluation, management
considers current conditions, macroeconomic economic expectations through a reasonable and supportable period, historical loss
experience, portfolio composition by loan type and risk characteristics, results of periodic credit reviews of individual loans, and
regulatory requirements, amongst other factors.
The Corporation must rely on estimates and exercise judgment regarding matters where the ultimate outcome is unknown, such as
economic developments affecting specific customers, industries, or markets. Other factors that can affect management’s estimates
are recalibration of statistical models used to calculate lifetime expected losses, changes in underwriting standards, financial
accounting standards and loan impairment measurements, among others. Changes in the financial condition of individual borrowers,
in economic conditions, and in the condition of the various markets in which collateral may be sold, may also affect the required
141
level of the allowance for credit losses. Consequently, the business financial condition, liquidity, capital, and results of operations
could also be affected.
At March 31, 2026, the ACL increased by $15.6 million from December 31, 2025 to $823.7 million. The increase in ACL was driven
by a combination of changes in the economic scenario, loan volumes and increases in qualitative reserves. The ACL for BPPR
increased by $14.3 million when compared to December 31, 2025 due to a $22.3 million increase in reserves for commercial loans
driven by higher specific reserves for a single-borrower exposure in non-accrual, a $11.1 million net charge off related to a
commercial real estate facility classified as NPL in the third quarter of 2025, and other loan modifications. The ACL for mortgage
loans increased by $3.1 million, mostly due to changes in the macroeconomic scenarios. These increases were partially offset by a
$12.4 million decrease in the ACL for consumer loans, mainly in the auto portfolio, reflecting improvements in credit quality. In the
PB segment, the ACL remained stable, increasing by $1.4 million from the previous quarter.
The Corporation’s ratio of the allowance for credit losses to loans held-in-portfolio was 2.10% on March 31, 2026 compared to
2.05% on December 31, 2025. The ratio of the allowance for credit losses to NPLs held-in-portfolio stood at 179.81%, compared to
162.15% on December 31, 2025.
Refer to Note 8 – Allowance for credit losses – loans held-in-portfolio to the Consolidated Financial Statements, and to the Provision
for Credit Losses section of this MD&A for additional information.
Tables 24 and 25 detail the allowance for credit losses by loan categories and the percentage it represents of total loans held-in-
portfolio and NPLs. The breakdown is made for analytical purposes, and it is not necessarily indicative of the categories in which
future loan losses may occur.
142
Table 24 - Allowance for Credit Losses - Loan Portfolios
March 31, 2026
(Dollars in thousands)
Total ACL
Total loans held-
in-portfolio
ACL to loans held-
in-portfolio
Total non-
performing loans
held-in-portfolio
ACL to non-
performing loans
held-in-portfolio
Commercial
$
20,069
$
2,427,295
0.83
%
$
10,962
183.08
%
64,146
5,543,451
1.16
%
33,444
191.80
%
51,116
3,212,356
1.59
%
14,192
360.17
%
197,476
8,565,559
2.31
%
192,517
102.58
%
Total Commercial
$
332,807
$
19,748,661
1.69
%
$
251,115
132.53
%
Construction
15,160
1,674,193
0.91
%
-
-
Mortgage
83,624
8,712,361
0.96
%
139,067
60.13
%
Leasing
18,588
1,986,165
0.94
%
8,892
209.04
%
Consumer
89,376
1,214,199
7.36
%
-
-
1,178
79,764
1.48
%
2,766
42.59
%
104,739
1,913,281
5.47
%
16,660
628.69
%
170,544
3,783,904
4.51
%
35,390
481.90
%
7,713
177,174
4.35
%
4,227
182.47
%
Total Consumer
$
373,550
$
7,168,322
5.21
%
$
59,043
632.67
%
Total
$
823,729
$
39,289,702
2.10
%
$
458,117
179.81
%
Table 25 - Allowance for Credit Losses - Loan Portfolios
December 31, 2025
(Dollars in thousands)
Total ACL
Total loans held-
in-portfolio
ACL to loans held-
in-portfolio
Total non-
performing loans
held-in-portfolio
ACL to non-
performing loans
held-in-portfolio
Commercial
$
19,345
$
2,455,790
0.79
%
$
8,748
221.14
%
58,717
5,543,284
1.06
%
42,712
137.47
%
48,451
3,153,080
1.54
%
24,567
197.22
%
180,934
8,607,412
2.10
%
190,412
95.02
%
Total Commercial
$
307,447
$
19,759,566
1.56
%
$
266,439
115.39
%
Construction
13,826
1,674,899
0.83
%
Mortgage
80,554
8,649,440
0.93
%
145,795
55.25
%
Leasing
18,620
2,001,365
0.93
%
9,179
202.85
%
Consumer
91,124
1,256,717
7.25
%
1,335
78,692
1.70
%
2,796
47.75
%
106,612
1,906,228
5.59
%
20,096
530.51
%
180,364
3,819,812
4.72
%
52,200
345.52
%
8,174
180,799
4.52
%
1,838
444.72
%
Total Consumer
$
387,609
$
7,242,248
5.35
%
$
76,930
503.85
%
Total
$
808,056
$
39,327,518
2.05
%
$
498,343
162.15
%
143
Annualized net charge-offs (recoveries)
The following table presents annualized net charge-offs (recoveries) (“NCOs“) to average loans held-in-portfolio (“HIP”) by loan
category for the quarters ended March 31, 2026 and 2025.
Table 26 - Annualized Net Charge-offs (Recoveries) to Average Loans Held-in-Portfolio
Quarter ended March 31, 2026
Quarter ended March 31, 2025
BPPR
Popular U.S.
Popular, Inc.
BPPR
Popular U.S.
Popular, Inc.
Commercial
0.42
%
(0.01)
%
0.23
%
(0.10)
%
0.02
%
(0.05)
%
Construction
(0.01)
―
―
―
―
―
Mortgage
(0.13)
(0.01)
(0.11)
(0.15)
(0.06)
(0.13)
Leasing
0.52
―
0.52
0.68
―
0.68
Consumer
2.68
3.09
2.69
2.82
3.90
2.85
Total annualized net charge-offs to
average loans held-in-portfolio
0.85
%
0.04
%
0.61
%
0.72
%
0.07
%
0.53
%
NCOs for the quarter ended March 31, 2026 amounted to $60.0 million, increasing by $10.9 million when compared to the same
period in 2025. The BPPR segment increased by $11.9 million mainly driven by higher commercial NCOs by $14.0 million, mostly
due to the above referenced $11.1 million NCO. The PB segment NCOs decreased by $1.0 million.
Loan Modifications
For the quarter ended March 31, 2026, modified loans to borrowers with financial difficulty amounted to $248.4 million, of which
$240.0 million were in accruing status. The BPPR segment’s modifications to borrowers with financial difficulty amounted to
approximately $248.4 million, mainly comprised of commercial and mortgage loans of $233.7 million and $8.6 million, respectively.
A total of $3.5 million of the mortgage modifications were related to government guaranteed loans.
Refer to Note 8 to the Consolidated Financial Statements for additional information on modifications made to borrowers
experiencing financial difficulties.
ADOPTION OF NEW ACCOUNTING STANDARDS AND ISSUED BUT NOT YET EFFECTIVE ACCOUNTING STANDARDS
Refer to Note 3, “New Accounting Pronouncements” to the Consolidated Financial Statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Quantitative and qualitative disclosures for the current period can be found in the Market Risk section of this report, which includes
changes in market risk exposures from disclosures presented in the 2025 Form 10-K.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
The Corporation’s management, with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, has
evaluated the effectiveness of the Corporation’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report. Based
on such evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such
144
period, the Corporation’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a
timely basis, information required to be disclosed by the Corporation in the reports that it files or submits under the Exchange Act
and such information is accumulated and communicated to management, as appropriate, to allow timely decisions regarding
required disclosures.
Internal Control Over Financial Reporting
The Company continues to implement new business systems and solutions, including an enterprise resource planning (“ERP”)
system, which are expected to improve the efficiency of certain financial and related business processes.
On January 1, 2026, the Corporation implemented a new ERP system, replacing our previous ERP system that had supported a
significant portion of our transactional records and general ledger. As a result of this implementation, we modified certain existing
controls and implemented new controls and procedures to maintain appropriate internal control over financial reporting and will
continue to evaluate the design and operating effectiveness of these controls.
Except as described above, there have been no changes in the Corporation’s internal control over financial reporting (as such term
is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2026 that
have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
Part II - Other Information
Item 1. Legal Proceedings
For a discussion of Legal Proceedings, see Note 18 to the Consolidated Financial Statements.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the risk factors discussed under “Part I - Item
1A - Risk Factors” in our 2025 Form 10-K. These factors could materially adversely affect our business, financial condition, liquidity,
results of operations and capital position, and could cause our actual results to differ materially from our historical results or the
results contemplated by the forward-looking statements contained in this report. Also refer to the discussion in “Part I - Item 2 –
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report for additional information
that may supplement or update the discussion of risk factors below and in our 2025 Form 10-K.
There have been no material changes to the risk factors previously disclosed under Item 1A of the Corporation’s 2025 Form 10-K.
The risks described in our 2025 Form 10-K and in this report are not the only risks facing us. Additional risks and uncertainties not
currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial
condition, liquidity, results of operations and capital position.
145
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The Corporation did not have any unregistered sales of equity securities during the quarter ended March 31, 2026.
Issuer Purchases of Equity Securities
The following table sets forth the details of purchases of common stock by the Corporation and its affiliated purchasers during the
quarter ended March 31, 2026:
Issuer Purchases of Equity Securities
Not in thousands
Period
Total Number of
Shares Purchased [1]
Average Price Paid per
Share
Total Number of Shares
Purchased as Part of Publicly
Announced Plans or Programs [2]
Approximate Dollar Value of
Shares that May Yet be
Purchased Under the Plans or
Programs [2]
January 1 - January 31
306,003
$
127.73
301,380
$242,576,163
February 1 - February 28
345,242
143.58
344,075
$193,162,299
March 1 - March 31
540,114
132.49
509,943
$125,867,052
Total
1,191,359
$
134.48
1,155,398
$125,867,052
[1] Includes 4,623, 1,167, and 30,171 shares of the Corporation’s common stock acquired by the Corporation during January, February, and March
2026, respectively, in connection with the satisfaction of tax withholding obligations on vested awards of restricted stock or restricted stock units granted
to directors and certain employees under the Corporation’s Omnibus Incentive Plan. The acquired shares of common stock were added back to
treasury stock.
[2] As part of its capital plan, in July 2025, the Corporation announced plans to repurchase up to $500 million in common stock, in addition to the $500
million in common stock repurchase program announced in July 2024. As of March 31, 2026, and since the first authorization in 2024, the Corporation
had repurchased 8,071,942 shares of common stock for $874 million at an average price of $108.27 per share, as part of the 2024 and 2025 common
stock repurchase programs.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans or Other Preplanned Trading Arrangements
Certain of our officers or directors have made and may from time to time make elections to participate in, and are
,
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
146
Item 6. Exhibits
Exhibit Index
Exhibit No
Exhibit Description
10.1
Form of Popular, Inc. 2026 Long-Term Equity Incentive Award and Agreement
(1)(*)
22.1
Issuers of Guaranteed Securities (Incorporated by reference to Exhibit 22.1 of Popular, Inc.’s Annual
Report on Form 10-K for the year ended December 31, 2025)
31.1
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(1)
31.2
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(1)
32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
(1)
32.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
(1)
101. INS
XBRL Instance Document – the instance document does not appear in the Interactive Data File because
its XBRL tags are embedded within the Inline Document.
101.SCH
Inline Taxonomy Extension Schema Document
(1)
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
(1)
101.DEF
Inline XBRL Taxonomy Extension Definitions Linkbase Document
(1)
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
(1)
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
(1)
104
The cover page of Popular, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2026,
formatted in Inline XBRL (included within the Exhibit 101 attachments)
(1)
(1)
* This exhibit is a management contract or compensatory plan or arrangement.
Popular, Inc. has not filed as exhibits certain instruments defining the rights of holders of debt of Popular, Inc. not
exceeding 10% of the total assets of Popular, Inc. and its consolidated subsidiaries. Popular, Inc. hereby agrees to
furnish upon request to the Commission a copy of each instrument defining the rights of holders of senior and
subordinated debt of Popular, Inc., or of any of its consolidated subsidiaries.
147
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
POPULAR, INC.
(Registrant)
Date: May 8, 2026
By: /s/ Jorge J. García
Jorge J. García
Executive Vice President &
Chief Financial Officer
Date: May 8, 2026
By: /s/ Denissa M. Rodríguez
Denissa M. Rodríguez
Senior Vice President & Corporate Comptroller
FAQ
How did Popular, Inc. (BPOP) perform financially in the March 31, 2026 quarter?
Popular, Inc. reported net income of $245.7 million for the quarter ended March 31, 2026, up from $177.5 million a year earlier. Net interest income reached $670.2 million, supporting higher earnings despite a larger provision for credit losses.
What were Popular, Inc.’s earnings per share for the first quarter of 2026?
Popular, Inc. reported basic and diluted net income per common share of $3.78 for the quarter ended March 31, 2026, compared with $2.56 in the same quarter of 2025. This reflects improved profitability and higher net income attributable to common shareholders.
What is the size of Popular, Inc.’s balance sheet and deposits as of March 31, 2026?
As of March 31, 2026, Popular, Inc. reported $76.1 billion in total assets and $67.6 billion in total deposits. Non-interest bearing deposits were $15.8 billion and interest-bearing deposits $51.8 billion, underscoring a deposit-focused funding profile.
How large is Popular, Inc.’s allowance for credit losses on loans?
Popular, Inc.’s allowance for credit losses on loans held-in-portfolio totaled $823.7 million at March 31, 2026, up from $808.1 million at December 31, 2025. The increase reflects updated lifetime loss estimates under the CECL model and credit conditions in its portfolios.
What dividends did Popular, Inc. pay on its common stock in the first quarter of 2026?
For the quarter ended March 31, 2026, Popular, Inc. declared common stock dividends of $0.75 per share, compared with $0.70 per share a year earlier. Total common dividends declared were $48.7 million, alongside ongoing preferred dividends.
Did Popular, Inc. repurchase common stock during the quarter ended March 31, 2026?
Yes. Popular, Inc. recorded common stock purchases of $160.2 million, including $155.2 million of repurchases under the 2025 common stock repurchase program. Treasury stock increased to 40.3 million shares outstanding at quarter-end.