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10-K – 2026-03-02 – d17859d10k.htm
At December 31, 2025, other short-term borrowings consisted of $ 650 million in FHLB Advances, compared to $ 225 million in FHLB Advances at December 31, 2024. The following table presents additional information related to the Corporation’s other short-term borrowings at December 31, 2025 and December 31, 2024. (Dollars in thousands) 2025 2024 Maximum aggregate balance outstanding at any month-end $ 650,000 $ 225,000 Average monthly aggregate balance outstanding $ 374,728 $ 8,402 Weighted average interest rate: For the year 4.16 % 5.40 % At December 31 3.98 % 4.67 % 199 Notes Payable The following table presents the composition of notes payable at December 31, 2025 and December 31, 2024. (In thousands) December 31, 2025 December 31, 2024 Advances with the FHLB with maturities ranging from 2026 through 2029 paying interest at monthly fixed rates ranging from 0.69 % to 4.17 % (2024 - 0.54 % to 5.26 %) $ 164,620 $ 302,722 Unsecured senior debt securities maturing on 2028 paying interest semiannually at a fixed rate of 7.25 % (2024- 7.25 %), net of debt issuance costs of $ 3,442 (2024 - $ 4,082 ) [1] 396,558 395,198 Junior subordinated deferrable interest debentures (related to trust preferred securities) maturing on 2034 with fixed interest rates ranging from 6.125 % to 6.564 % (2024 - 6.125 % to 6.564 %), net of debt issuance costs of $ 234 (2024 - $ 261 ) 198,399 198,373 Total notes payable $ 759,577 $ 896,293 [1] On March 13, 2023, the Corporation issued $ 400 million aggregate principal amount of 7.25 % Senior Notes due 2028 (the “2028 Notes”) in an underwritten public offering. The Corporation used a portion of the net proceeds of the 2028 Notes offering to redeem, on August 14, 2023, the outstanding $ 300 million aggregate principal amount of its 6.125 % Senior Notes which were due on September 2023 . The redemption price was equal to 100 % of the principal amount plus accrued and unpaid interest through the redemption date. A breakdown of borrowings by contractual maturities at December 31, 2025 is included in the table below. Assets sold under Short-term (In thousands) agreements to repurchase borrowings Notes payable Total 2026 $ 39,001 650,000 74,500 763,501 2027 - - 6,112 6,112 2028 - - 440,908 440,908 2029 - - 39,657 39,657 Later years - - 198,400 198,400 Total borrowings $ 39,001 $ 650,000 $ 759,577 $ 1,448,578 At December 31, 2025 and December 31, 2024, the Corporation had FHLB borrowing facilities whereby the Corporation could borrow up to $ 4.8 billion and $ 4.7 billion, respectively, of which $ 0.8 billion and $ 0.5 billion, respectively, were used. In addition, at December 31, 2024, the Corporation had placed $ 0.3 billion of the available FHLB credit facility as collateral for municipal letters of credit to secure deposits. The FHLB borrowing facilities are collateralized with securities and loans held-in-portfolio, and do not have restrictive covenants or callable features. Also, at December 31, 2025, the Corporation had borrowing facilities at the discount window of the Federal Reserve Bank of New York amounting to $ 12.1 billion (December 31, 2024 - $ 7.0 billion), which remained unused at December 31, 2025 and December 31, 2024. The facilities are a collateralized source of credit that is highly dependable even under difficult market conditions. 200 Note 17 – Trust preferred securities Statutory trusts established by the Corporation (Popular North America Capital Trust I and Popular Capital Trust II) had issued trust preferred securities (also referred to as “capital securities”) to the public. The proceeds from such issuances, together with the proceeds of the related issuances of common securities of the trusts (the “common securities”), were used by the trusts to purchase junior subordinated deferrable interest debentures (the “junior subordinated debentures”) issued by the Corporation. The sole assets of the trusts consisted of the junior subordinated debentures of the Corporation and the related accrued interest receivable. These trusts are not consolidated by the Corporation pursuant to accounting principles generally accepted in the United States of America. The junior subordinated debentures are included by the Corporation as notes payable in the Consolidated Statements of Financial Condition, while the common securities issued by the issuer trusts are included as debt securities held-to-maturity. The common securities of each trust are wholly-owned, or indirectly wholly-owned, by the Corporation. The following table presents financial data pertaining to the different trusts at December 31, 2025 and 2024. (Dollars in thousands) December 31, 2025 and 2024 Popular North America Popular Issuer Capital Trust I Capital Trust Il Capital securities $ 91,651 $ 101,023 Distribution rate 6.564 % 6.125 % Common securities $ 2,835 $ 3,125 Junior subordinated debentures aggregate liquidation amount $ 94,486 $ 104,148 Stated maturity date September 2034 December 2034 Reference notes [1],[3],[5] [2],[4],[5] [1] Statutory business trust that is wholly-owned by PNA and indirectly wholly-owned by the Corporation. [2] Statutory business trust that is wholly-owned by the Corporation. [3] The obligation of PNA under the junior subordinated debenture and its guarantees of the capital securities under the trust is fully and unconditionally guaranteed on a subordinated basis by the Corporation to the extent set forth in the guarantee agreement. [4] These capital securities are fully and unconditionally guaranteed on a subordinated basis by the Corporation to the extent set forth in the guarantee agreement. [5] The Corporation has the right, subject to any required prior approval from the Federal Reserve, to redeem after certain dates or upon the occurrence of certain events mentioned below, the junior subordinated debentures at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest to the date of redemption. The maturity of the junior subordinated debentures may be shortened at the option of the Corporation prior to their stated maturity dates (i) on or after the stated optional redemption dates stipulated in the agreements, in whole at any time or in part from time to time, or (ii) in whole, but not in part, at any time within 90 days following the occurrence and during the continuation of a tax event, an investment company event or a capital treatment event as set forth in the indentures relating to the capital securities, in each case subject to regulatory approval. At December 31, 2025 and 2024, the Corporation’s $ 193 million in trust preferred securities outstanding do not qualify for Tier 1 capital treatment but qualify for Tier 2 capital treatment. 201 Note 18 − Other liabilities The caption of other liabilities in the Consolidated Statements of Financial Condition consists of the following major categories: (In thousands) December 31, 2025 December 31, 2024 Accrued expenses $ 321,203 $ 334,145 Accrued interest payable 66,240 60,723 Accounts payable 78,998 91,218 Dividends payable 49,596 49,546 Trades payable 595,911 495,139 Liability for GNMA loans sold with an option to repurchase 8,734 9,108 Reserves for loan indemnifications 2,704 2,779 Reserve for operational losses 20,723 29,465 Operating lease liabilities 104,958 103,198 Finance lease liabilities 27,389 23,141 Pension benefit obligation 4,739 5,816 Postretirement benefit obligation 103,974 99,172 Others 75,348 68,396 Total other liabilities $ 1,460,517 $ 1,371,846 202 Note 19 – Stockholders’ equity The Corporation’s common stock ranks junior to all series of preferred stock as to dividend rights and / or as to rights on liquidation, dissolution or winding up of the Corporation. Dividends on preferred stock are payable if declared. The Corporation’s ability to declare or pay dividends on, or purchase, redeem or otherwise acquire, its common stock is subject to certain restrictions in the event that the Corporation fails to pay or set aside full dividends on the preferred stock for the latest dividend period. The ability of the Corporation to pay dividends in the future is limited by regulatory requirements, legal availability of funds, recent and projected financial results, capital levels and liquidity of the Corporation, general business conditions and other factors deemed relevant by the Corporation’s Board of Directors. The Corporation’s common stock trades on the Nasdaq Global Select Market (the “Nasdaq”) under the symbol BPOP. The 2003 Series A Preferred Stock are not listed on Nasdaq. Preferred stocks The Corporation has 30,000,000 shares of authorized preferred stock that may be issued in one or more series, and the shares of each series shall have such rights and preferences as shall be fixed by the Board of Directors when authorizing the issuance of that particular series. The Corporation’s shares of preferred stock at December 31, 2025 consisted of: ● 6.375 % non-cumulative monthly income preferred stock, 2003 Series A, no par value, liquidation preference value of $ 25 per share. Holders on record of the 2003 Series A Preferred Stock are entitled to receive, when, as and if declared by the Board of Directors of the Corporation or an authorized committee thereof, out of funds legally available, non-cumulative cash dividends at the annual rate per share of 6.375 % of their liquidation preference value, or $ 0.1328125 per share per month. These shares of preferred stock are perpetual, nonconvertible, have no preferential rights to purchase any securities of the Corporation and are redeemable solely at the option of the Corporation with the consent of the Board of Governors of the Federal Reserve System. The redemption price per share is $ 25.00 . The shares of 2003 Series A Preferred Stock have no voting rights, except for certain rights in instances when the Corporation does not pay dividends for a defined period. These shares are not subject to any sinking fund requirement. Cash dividends declared and paid on the 2003 Series A Preferred Stock amounted to $ 1.4 million for the years ended December 31, 2025, 2024 and 2023. Outstanding shares of 2003 Series A Preferred Stock amounted to 885,726 at December 31, 2025, 2024 and 2023. Common stock Dividends During the year 2025, cash dividends of $ 2.90 (2024 - $ 2.56 ; 2023 - $ 2.27 ) per common share outstanding were declared amounting to $ 196.2 million (2024 - $ 183.9 million; 2023 - $ 163.7 million) of which $ 49.6 million were payable to stockholders of common stock at December 31, 2025 (2024 - $ 49.5 million; 2023 - $ 44.7 million). Common stock repurchases During the year ended December 31, 2025, the Corporation repurchased 4,660,124 (2024 – 2,256,420 ) shares of common stock for $ 501.5 million (2024 - $ 217.3 million), at an average price of $ 107.61 (2024 - $ 96.32 ) per common share. At December 31, 2025, $ 281.2 million remained on the Corporation’s common stock repurchase authorization. The common stock repurchase program does not require the Corporation to acquire a specific dollar amount or number of shares and may be modified, suspended or terminated at any time without prior notice. Statutory reserve The Banking Act of the Commonwealth of Puerto Rico (the “Act”) requires that a minimum of 10% of BPPR’s retained earnings for the year be transferred to a statutory reserve account until such statutory reserve equals the total of paid-in capital on common and preferred stock. Any losses incurred by a bank must first be charged to retained earnings and then to the reserve fund. Amounts transferred to the reserve fund may not be used to pay dividends without the prior consent of the Puerto Rico Commissioner of Financial Institutions. The failure to maintain sufficient statutory reserves would preclude BPPR from paying dividends. BPPR was in compliance with the statutory reserve requirement in 2025, 2024 and 2023. BPPR’s statutory reserve fund amounted to $ 961 million at December 31, 2025 (2024 - $ 961 million; 2023 - $ 908 million). Banks that are well capitalized, have obtained a rating of 1 or 2 in the last examination performed by the Office of the Commissioner or an applicable regulatory agency and have accumulated at least 50% of the paid in capital for their common and preferred stock in their reserve fund may be exempted from the requirement to transfer such funds to the statutory reserve fund. During 2024, $ 53 million was transferred to the statutory reserve account (2023 - $ 45 million). 203 Note 20 – Regulatory capital requirements The Corporation, BPPR and PB are subject to various regulatory capital requirements imposed by the federal banking agencies. Failure to meet minimum capital requirements can lead to certain mandatory and additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s consolidated financial statements. Popular, Inc., BPPR and PB are subject to Basel III capital requirements, including minimum and well capitalized regulatory capital ratios and compliance with the standardized approach for determining risk-weighted assets. The Basel III Capital Rules established a Common Equity Tier I (“CET1”) capital measure and related regulatory capital ratio CET1 to risk-weighted assets. The Basel III Capital Rules provide that a depository institution will be deemed to be well capitalized if it maintained a leverage ratio of at least 5 %, a CET1 ratio of at least 6.5 %, a Tier 1 risk-based capital ratio of at least 8 % and a total risk-based ratio of at least 10 %. Management has determined that at December 31, 2025 and 2024, the Corporation exceeded all capital adequacy requirements to which it is subject. The Corporation has been designated by the Federal Reserve Board as a Financial Holding Company (“FHC”) and is eligible to engage in certain financial activities permitted under the Gramm-Leach-Bliley Act of 1999. Pursuant to the adoption of the CECL accounting standard on January 1, 2020, the Corporation elected to use a five-year transition period option as permitted in the final interim regulatory capital rules effective March 31, 2020. The five-year transition period provision delays for two years the estimated impact of the adoption of the CECL accounting standard on regulatory capital, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided during the initial two-year delay. This period ended in 2025. At December 31, 2025 and 2024, BPPR and PB were well-capitalized under the regulatory framework for prompt corrective action. The following tables present the Corporation’s risk-based capital and leverage ratios at December 31, 2025 and 2024 under the Basel III regulatory guidance. 204 Actual Capital adequacy minimum requirement (including conservation capital buffer) [1] (Dollars in thousands) Amount Ratio Amount Ratio 2025 Total Capital (to Risk-Weighted Assets): Corporation $ 7,196,067 17.50 % $ 4,317,994 10.50 % BPPR 4,847,767 16.85 3,020,156 10.50 PB 1,727,818 14.60 1,242,517 10.50 Common Equity Tier I Capital (to Risk-Weighted Assets): Corporation $ 6,463,527 15.72 % $ 2,878,663 7.00 % BPPR 4,483,826 15.59 2,013,437 7.00 PB 1,631,808 13.79 828,345 7.00 Tier I Capital (to Risk-Weighted Assets): Corporation $ 6,485,670 15.77 % $ 3,495,519 8.50 % BPPR 4,483,826 15.59 2,444,888 8.50 PB 1,631,808 13.79 1,005,847 8.50 Tier I Capital (to Average Assets): Corporation $ 6,485,670 8.69 % $ 2,986,476 4.00 % BPPR 4,483,826 7.52 2,385,171 4.00 PB 1,631,808 11.26 579,937 4.00 [1] The conservation capital buffer included for these ratios is 2.5 %, except for the Tier I to Average Asset ratio for which the buffer is not applicable and therefore the capital adequacy minimum of 4 % is presented. 205 Actual Capital adequacy minimum requirement (including conservation capital buffer) (Dollars in thousands) Amount Ratio Amount Ratio 2024 Total Capital (to Risk-Weighted Assets): Corporation $ 6,968,203 17.83 % $ 4,102,713 10.50 % BPPR 4,734,198 17.04 2,917,399 10.50 PB 1,524,930 13.93 1,149,278 10.50 Common Equity Tier I Capital (to Risk-Weighted Assets): Corporation $ 6,262,792 16.03 % $ 2,735,142 7.00 % BPPR 4,383,759 15.78 1,944,932 7.00 PB 1,461,436 13.35 766,186 7.00 Tier I Capital (to Risk-Weighted Assets): Corporation $ 6,284,935 16.08 % $ 3,321,244 8.50 % BPPR 4,383,759 15.78 2,361,704 8.50 PB 1,461,436 13.35 930,368 8.50 Tier I Capital (to Average Assets): Corporation $ 6,284,935 8.66 % $ 2,903,739 4.00 % BPPR 4,383,759 7.48 2,343,289 4.00 PB 1,461,436 10.64 549,618 4.00 The following table presents the minimum amounts and ratios for the Corporation’s banks to be categorized as well-capitalized. 2025 2024 (Dollars in thousands) Amount Ratio Amount Ratio Total Capital (to Risk-Weighted Assets): BPPR $ 2,876,339 10.00 % $ 2,778,475 10.00 % PB 1,183,349 10.00 1,094,551 10.00 Common Equity Tier I Capital (to Risk-Weighted Assets): BPPR $ 1,869,620 6.50 % $ 1,806,009 6.50 % PB 769,177 6.50 711,458 6.50 Tier I Capital (to Risk-Weighted Assets): BPPR $ 2,301,071 8.00 % $ 2,222,780 8.00 % PB 946,679 8.00 875,641 8.00 Tier I Capital (to Average Assets): BPPR $ 2,981,464 5.00 % $ 2,929,111 5.00 % PB 724,922 5.00 687,022 5.00 206 Note 21 – Other comprehensive income (loss) The following table presents changes in accumulated other comprehensive income (loss) by component for the years ended December 31, 2025, 2024 and 2023. Changes in Accumulated Other Comprehensive (Loss) Income by Component [1] Years ended December 31, (In thousands) 2025 2024 2023 Foreign currency translation Beginning Balance $ ( 71,365 ) $ ( 64,528 ) $ ( 56,735 ) Other comprehensive (loss) ( 13,917 ) ( 6,837 ) ( 7,793 ) Net change ( 13,917 ) ( 6,837 ) ( 7,793 ) Ending balance $ ( 85,282 ) $ ( 71,365 ) $ ( 64,528 ) Adjustment of pension and postretirement benefit plans Beginning Balance $ ( 94,692 ) $ ( 117,893 ) $ ( 144,335 ) Other comprehensive (loss) income before reclassifications ( 2,144 ) 14,157 14,408 Amounts reclassified from accumulated other comprehensive loss for amortization of net losses 5,681 9,044 12,034 Net change 3,537 23,201 26,442 Ending balance $ ( 91,155 ) $ ( 94,692 ) $ ( 117,893 ) Unrealized net holding (losses) gains on debt securities Beginning Balance $ ( 1,495,183 ) $ ( 1,713,110 ) $ ( 2,323,903 ) Other comprehensive income before reclassifications 340,427 74,277 472,487 Amounts reclassified from accumulated other comprehensive (loss) income for gains on securities - - - Amounts reclassified from accumulated other comprehensive income for amortization of net unrealized losses of debt securities transferred from available-for-sale to held-to-maturity 149,106 143,650 138,306 Net change 489,533 217,927 610,793 Ending balance $ ( 1,005,650 ) $ ( 1,495,183 ) $ ( 1,713,110 ) Unrealized net gains (losses) on cash flow hedges Beginning Balance $ - $ - $ 45 Other comprehensive (loss) income before reclassifications - - ( 19 ) Amounts reclassified from accumulated other comprehensive (loss) income for gains on securities - - ( 26 ) Net change - - ( 45 ) Ending balance $ - $ - $ - Total $ ( 1,182,087 ) $ ( 1,661,240 ) $ ( 1,895,531 ) [1] All amounts presented are net of tax. 207 The following table presents the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the years ended December 31, 2025, 2024, and 2023. Reclassifications Out of Accumulated Other Comprehensive (Loss) Income Affected Line Item in the Years ended December 31, (In thousands) Consolidated Statements of Operations 2025 2024 2023 Adjustment of pension and postretirement benefit plans Amortization of net losses Other operating expenses $ ( 9,090 ) $ ( 14,471 ) $ ( 19,253 ) Total before tax ( 9,090 ) ( 14,471 ) ( 19,253 ) Income tax benefit 3,409 5,427 7,219 Total net of tax $ ( 5,681 ) $ ( 9,044 ) $ ( 12,034 ) Unrealized net holding (losses) gains on debt securities Amortization of unrealized net losses of debt securities transferred to held-to-maturity Investment securities ( 186,381 ) ( 179,563 ) ( 172,883 ) Total before tax ( 186,381 ) ( 179,563 ) ( 172,883 ) Income tax benefit 37,275 35,913 34,577 Total net of tax $ ( 149,106 ) $ ( 143,650 ) $ ( 138,306 ) Unrealized net gains (losses) on cash flow hedges Forward contracts Mortgage banking activities $ - $ - $ 41 Total before tax - - 41 Income tax expense - - ( 15 ) Total net of tax $ - $ - $ 26 Total reclassification adjustments, net of tax $ ( 154,787 ) $ ( 152,694 ) $ ( 150,314 ) 208 Note 22 – 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 December 31, 2025, the Corporation serviced $ 429 million (December 31, 2024 - $ 495 million) in residential mortgage loans subject to credit recourse provisions, principally loans associated with FNMA and FHLMC residential mortgage loan securitization programs. In the event of any customer default, pursuant to the credit recourse provided, the Corporation is required to repurchase the loan or reimburse the third-party investor for the incurred loss. During 2025, the Corporation repurchased approximately $ 1 million of unpaid principal balance in mortgage loans subject to the credit recourse provisions (2024 - $ 2 million). At December 31, 2025, the Corporation’s liability established to cover the estimated credit loss exposure related to loans sold or serviced with credit recourse amounted to $ 3 million (December 31, 2024 - $ 3 million). The estimated losses to be absorbed under the credit recourse arrangements are recorded as a liability when the loans are sold and are updated by accruing or reversing expense (categorized in the line item “Adjustments (expense) to indemnity reserves on loans sold” in the consolidated statements of operations) throughout the life of the loan, as necessary, when additional relevant information becomes available. The methodology used to estimate the recourse liability is a function of the recourse arrangements given and considers a variety of factors, which include actual defaults and historical loss experience, foreclosure rate, estimated future defaults and the probability that a loan would be delinquent. Statistical methods are used to estimate the recourse liability. Expected loss rates are applied to different loan segmentations. The expected loss, which represents the amount expected to be lost on a given loan, considers the probability of default and loss severity. The probability of default represents the probability that a loan in good standing would become 90 days delinquent within the following twelve-month period. Regression analysis quantifies the relationship between the default event and loan-specific characteristics, including credit scores, loan-to-value ratios, and loan aging, among others. When the Corporation sells or securitizes mortgage loans, it generally makes customary representations and warranties regarding the characteristics of the loans sold. The Corporation’s mortgage operations in Puerto Rico group conforming mortgage loans into pools which are exchanged for FNMA and GNMA mortgage-backed securities, which are generally sold to private investors, or are sold directly to FNMA for cash. As required under the government agency programs, quality review procedures are performed by the Corporation to ensure that asset guideline qualifications are met. To the extent the loans do not meet specified characteristics, the Corporation may be required to repurchase such loans or indemnify for losses and bear any subsequent loss related to the loans. The amount purchased under representation and warranty arrangements during the years ended December 31, 2025 and December 31, 2024 was not considered material for the Corporation. 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, FHMLC 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 December 31, 2025, the Corporation serviced $ 8.2 billion in mortgage loans for third-parties, including the loans serviced with credit recourse (December 31, 2024 - $ 9.0 billion). The Corporation generally recovers funds advanced pursuant to these arrangements from the mortgage owner, from liquidation proceeds when the mortgage loan is foreclosed or, in the case of FHA/VA loans, under the applicable FHA and VA 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 December 209 31, 2025, the outstanding balance of funds advanced by the Corporation under such mortgage loan servicing agreements was approximately $ 30 million (December 31, 2024 - $ 44 million). To the extent the mortgage loans underlying the Corporation’s servicing portfolio experience increased delinquencies, the Corporation would be required to dedicate additional cash resources to comply with its obligation to advance funds as well as incur additional administrative costs related to increases in collection efforts. Popular, Inc. Holding Company (“PIHC”) fully and unconditionally guarantees certain borrowing obligations issued by certain of its 100 % owned consolidated subsidiaries amounting to $ 94 million at both December 31, 2025 and December 31, 2024, respectively. In addition, at both December 31, 2025 and December 31, 2024, PIHC fully and unconditionally guaranteed on a subordinated basis $ 193 million of capital securities (trust preferred securities) issued by wholly-owned issuing trust entities to the extent set forth in the applicable guarantee agreement. Refer to Note 17 to the consolidated financial statements for further information on the trust preferred securities. 210 Note 23 – 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) December 31, 2025 December 31, 2024 Commitments to extend credit: Credit card lines $ 6,415,208 $ 5,599,823 Commercial lines of credit 4,257,505 3,971,331 Construction lines of credit 1,197,319 1,131,824 Other consumer unused credit commitments 277,635 260,121 Commercial letters of credit 21,248 5,002 Standby letters of credit 111,554 144,845 Commitments to originate or fund mortgage loans 20,099 29,604 At December 31, 2025 and December 31, 2024, the Corporation maintained a reserve of $ 14 million and $ 15 million, respectively, for potential losses associated with unfunded loan commitments related to commercial and construction lines of credit. Other commitments At December 31, 2025 and December 31, 2024, the Corporation also maintained other non-credit commitments for $ 7 million and $ 2 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 36 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 December 31, 2025, the Corporation’s direct exposure to the Puerto Rico government and its instrumentalities and municipalities totaled $ 391 million, of which $ 342 million were outstanding ($ 336 million and $ 336 million at December 31, 2024). Of the amount outstanding, $ 333 million consists of loans and $ 9 million are securities ($ 323 million and $ 13 million at December 31, 2024). Substantially all of the amount outstanding at December 31, 2025 and December 31, 2024 were obligations from various Puerto Rico municipalities. In most cases, these were “general obligations” of a municipality, to which the 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 December 31, 2025, approximately 77 % of the Corporation’s exposure to municipal loans and securities was concentrated in the municipalities of San Juan, Guaynabo, Carolina and Caguas. The Corporation’s 211 exposure at December 31, 2025, included up to $ 47.4 million in Automated Clearing House (“ACH”) transaction settlement exposure, none of which was outstanding. The following table details the loans and investments representing the Corporation’s direct exposure to the Puerto Rico government according to their maturities as of December 31, 2025 : (In thousands) Investment Portfolio Loans Total Outstanding Total Exposure Central Government Within 1 year $ 41 $ - $ 41 $ 47,441 Total Central Government 41 - 41 47,441 Municipalities Within 1 year 2,605 11,574 14,179 16,179 After 1 to 5 years 5,660 166,515 172,175 172,175 After 5 to 10 years 450 124,087 124,537 124,537 After 10 years - 30,991 30,991 30,991 Total Municipalities 8,715 333,167 341,882 343,882 Total Direct Government Exposure $ 8,756 $ 333,167 $ 341,923 $ 391,323 In addition, at December 31, 2025, the Corporation had $ 209 million in loans insured or securities issued by Puerto Rico governmental entities but for which the principal source of repayment is non-governmental ($ 220 million at December 31, 2024). These included $ 167 million in residential mortgage loans insured by the Puerto Rico Housing Finance Authority (“HFA”), a governmental instrumentality that has been designated as a covered entity under PROMESA (December 31, 2024 - $ 176 million). These mortgage loans are secured by first mortgages on Puerto Rico residential properties and the HFA insurance covers losses in the event of a borrower default and upon the satisfaction of certain other conditions. The Corporation also had at December 31, 2025, $ 36 million in bonds issued by HFA which are secured by second mortgage loans on Puerto Rico residential properties, and for which HFA also provides insurance to cover losses in the event of a borrower default and upon the satisfaction of certain other conditions (December 31, 2024 - $ 38 million). In the event that the mortgage loans insured by HFA and held by the Corporation directly or those serving as collateral for the HFA bonds default and the collateral is insufficient to satisfy the outstanding balance of these loans, HFA’s ability to honor its insurance will depend, among other factors, on the financial condition of HFA at the time such obligations become due and payable. The Corporation does not consider the government guarantee when estimating the credit losses associated with this portfolio. Although the Governor is currently authorized by local legislation to impose a temporary moratorium on the financial obligations of the HFA, a moratorium on such obligations has not been imposed as of the date hereof. BPPR’s commercial loan portfolio also includes loans to private borrowers who are service providers, lessors, suppliers or have other relationships with the government. These borrowers could be negatively affected by the Commonwealth’s fiscal crisis and the ongoing Title III proceedings under PROMESA. Similarly, BPPR’s mortgage and consumer loan portfolios include loans to government employees and retirees, which could also be negatively affected by fiscal measures such as employee layoffs or furloughs or reductions in pension benefits. In addition, $ 2.5 billion of residential mortgages and $ 80.5 million commercial loans were insured or guaranteed by the U.S. Government or its agencies at December 31, 2025 (compared to $ 2.1 billion and $ 87.4 million, respectively, at December 31, 2024). The Corporation also had U.S. Treasury and obligations from the U.S. Government, its agencies or government sponsored entities within the portfolio of available-for-sale and held-to-maturity securities as described in Note 5 and 6 to the Consolidated Financial Statements. At December 31, 2025, the Corporation had operations in the United States Virgin Islands (the “USVI”) and had $ 28 million in direct exposure to USVI government entities (December 31, 2024 - $ 28 million). The USVI has been experiencing a number of fiscal and economic challenges that could adversely affect the ability of its public corporations and instrumentalities to service their outstanding debt obligations. 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. 212 At December 31, 2025, the Corporation had operations in the British Virgin Islands (“BVI”) and it had a loan portfolio amounting to $ 195 million comprised of various retail and commercial clients, compared to a loan portfolio of $ 196 million at December 31, 2024. At December 31, 2025, the Corporation had no significant exposure to a single borrower in the BVI. FDIC Special Assessment On November 16, 2023, the Federal Deposit Insurance Corporation (“FDIC”) imposed a special assessment (the “FDIC Special Assessment”) amount to recover the losses to the deposit insurance fund resulting from the FDIC’s funds used, in March 2023, in connection with the systemic risk exception, to the least-cost resolution test, under the Federal Deposit Insurance Act to manage the receiverships of several failed banks. In connection with this assessment, the Corporation accrued $ 71.4 million, $ 45.3 million net of tax, in the fourth quarter of 2023 and an additional expense of $ 14.3 million, $ 9.1 million net of tax, during the first quarter of 2024 to reflect the FDIC's higher loss estimate communicated by them at the time. Notwithstanding, the results of 2025 include a partial reversal of this reserve of $ 15.3 million, $ 9.7 million net of tax, based in the FDIC’s interim final rule, which became effective December 19, 2025 and amended, among other things, the collection rate of the special assessment. The special assessment amount and collection period may change as the estimated loss is periodically adjusted or if the total amount collected varies. The last payment for the FDIC special assessment is projected to be in the third quarter, September 2026. Legal Proceedings The nature of Popular’s business ordinarily generates claims, litigation, arbitration, regulatory and governmental investigations, and legal and administrative cases and proceedings (collectively, “Legal Proceedings”). Popular’s Legal Proceedings may involve various lines of business and include claims relating to contract, torts, consumer protection, securities, antitrust, employment, tax and other laws. The recovery sought in Legal Proceedings may include substantial or indeterminate compensatory damages, punitive damages, injunctive relief, or recovery on a class-wide basis. When the Corporation determines that it has meritorious defenses to the claims asserted, it vigorously defends itself. The Corporation will consider the settlement of cases (including cases where it has meritorious defenses) when, in management’s judgment, it is in the best interest of the Corporation and its stockholders to do so. On at least a quarterly basis, Popular assesses its liabilities and contingencies relating to outstanding Legal Proceedings utilizing the most current information available. For matters where it is probable that the Corporation will incur a material loss and the amount can be reasonably estimated, the Corporation establishes an accrual for the loss. Once established, the accrual is adjusted on at least a quarterly basis to reflect any relevant developments, as appropriate. For matters where a material loss is not probable, or the amount of the loss cannot be reasonably estimated, no accrual is established. In certain cases, exposure to loss exists in excess of any accrual to the extent such loss is reasonably possible, but not probable. Management believes and estimates that the range of reasonably possible losses (with respect to those matters where such limits may be determined in excess of amounts accrued) for current Legal Proceedings ranged from $ 0 to approximately $ 6.3 million as of December 31, 2025. In certain cases, management cannot reasonably estimate the possible loss at this time. Any estimate involves significant judgment, given the varying stages of the Legal Proceedings (including the fact that many of them are currently in preliminary stages), the existence of multiple defendants in several of the current Legal Proceedings whose share of liability has yet to be determined, the numerous unresolved issues in many of the Legal Proceedings, and the inherent uncertainty of the various potential outcomes of such Legal Proceedings. Accordingly, management’s estimate will change from time-to-time, and actual losses may be more or less than the current estimate. While the outcome of Legal Proceedings is inherently uncertain, based on information currently available, advice of counsel, and available insurance coverage, management believes that the amount it has already accrued is adequate and any incremental liability arising from the Legal Proceedings in matters in which a loss amount can be reasonably estimated will not have a material adverse effect on the Corporation’s consolidated financial position. However, in the event of unexpected future developments, it is possible that the ultimate resolution of these matters in a reporting period, if unfavorable, could have a material adverse effect on the Corporation’s consolidated financial position for that period. 213 Note 24 – Non-consolidated variable interest entities The Corporation is involved with three statutory trusts which it created to issue trust preferred securities to the public. These trusts are deemed to be variable interest entities (“VIEs”) since the equity investors at risk have no substantial decision-making rights. The Corporation does not hold any variable interest in the trusts, and therefore, cannot be the trusts’ primary beneficiary. Furthermore, the Corporation concluded that it did not hold a controlling financial interest in these trusts since the decisions of the trusts are predetermined through the trust documents and the guarantee of the trust preferred securities is irrelevant since in substance the sponsor is guaranteeing its own debt. Also, the Corporation is involved with various special purpose entities mainly in guaranteed mortgage securitization transactions, including GNMA and FNMA. The Corporation has also engaged in securitization transactions with FHLMC, but considers its exposure in the form of servicing fees and servicing advances not to be significant at December 31, 2025. These special purpose entities are deemed to be VIEs since they lack equity investments at risk. The Corporation’s continuing involvement in these guaranteed loan securitizations includes owning certain beneficial interests in the form of securities as well as the servicing rights retained. The Corporation is not required to provide additional financial support to any of the variable interest entities to which it has transferred the financial assets. The mortgage-backed securities, to the extent retained, are classified in the Corporation’s Consolidated Statements of Financial Condition as available-for-sale or trading securities. The Corporation concluded that, essentially, these entities (FNMA and GNMA) control the design of their respective VIEs, dictate the quality and nature of the collateral, require the underlying insurance, set the servicing standards via the servicing guides and can change them at will, and can remove a primary servicer with cause, and without cause in the case of FNMA. Moreover, through their guarantee obligations, agencies (FNMA and GNMA) have the obligation to absorb losses that could be potentially significant to the VIE. The Corporation holds variable interests in these VIEs in the form of agency mortgage-backed securities and collateralized mortgage obligations, including those securities originated by the Corporation and those acquired from third parties. Additionally, the Corporation holds agency mortgage-backed securities and agency collateralized mortgage obligations issued by third party VIEs in which it has no other form of continuing involvement. Refer to Note 27 to the Consolidated Financial Statements for additional information on the debt securities outstanding at December 31, 2025 and 2024, which are classified as available-for-sale and trading securities in the Corporation’s Consolidated Statements of Financial Condition. In addition, the Corporation holds variable interests in the form of servicing fees, since it retains the right to service the transferred loans in those government-sponsored special purpose entities (“SPEs”) and may also purchase the right to service loans in other government-sponsored SPEs that were transferred to those SPEs by a third-party. The following table presents the carrying amount and classification of the assets related to the Corporation’s variable interests in non-consolidated VIEs and the maximum exposure to loss as a result of the Corporation’s involvement as servicer of GNMA and FNMA loans at December 31, 2025 and 2024. 214 (In thousands) December 31, 2025 December 31, 2024 Assets Servicing assets: Mortgage servicing rights $ 74,236 $ 84,356 Total servicing assets $ 74,236 $ 84,356 Other assets: Servicing advances $ 3,385 $ 6,112 Total other assets $ 3,385 $ 6,112 Total assets $ 77,621 $ 90,468 Maximum exposure to loss $ 77,621 $ 90,468 The size of the non-consolidated VIEs, in which the Corporation has a variable interest in the form of servicing fees, measured as the total unpaid principal balance of the loans, amounted to $ 6.0 billion at December 31, 2025 (December 31, 2024 - $ 6.6 billion). The Corporation determined that the maximum exposure to loss includes the fair value of the MSRs and the assumption that the servicing advances at December 31, 2025 and 2024 will not be recovered. The agency debt securities are not included as part of the maximum exposure to loss since they are guaranteed by the related agencies. ASU 2009-17 requires that an ongoing primary beneficiary assessment should be made to determine whether the Corporation is the primary beneficiary of any of the VIEs it is involved with. The conclusion on the assessment of these non-consolidated VIEs has not changed since their initial evaluation. The Corporation concluded that it is still not the primary beneficiary of these VIEs, and therefore, these VIEs are not required to be consolidated in the Corporation’s financial statements at December 31, 2025. 215 Note 25 – Derivative instruments and hedging activities The use of derivatives is incorporated as part of the Corporation’s overall interest rate risk management strategy to minimize significant unplanned fluctuations in earnings and cash flows that are caused by interest rate volatility. The Corporation’s goal is to manage interest rate sensitivity by modifying the repricing or maturity characteristics of certain balance sheet assets and liabilities so that the net interest income is not materially affected by movements in interest rates. The Corporation uses derivatives in its trading activities to facilitate customer transactions, and as a means of risk management. As a result of interest rate fluctuations, hedged fixed and variable interest rate assets and liabilities will appreciate or depreciate in fair value. The effect of this unrealized appreciation or depreciation is expected to be substantially offset by the Corporation’s gains or losses on the derivative instruments that are linked to these hedged assets and liabilities. As a matter of policy, the Corporation does not use highly leveraged derivative instruments for interest rate risk management. The credit risk attributed to the counterparty’s nonperformance risk is incorporated in the fair value of the derivatives. Additionally, the fair value of the Corporation’s own credit standing is considered in the fair value of the derivative liabilities. The Corporation’s derivatives are subject to agreements which allow a right of set-off with each respective counterparty. 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 fair value of derivatives is not offset with the fair value of other derivatives held with the same counterparty even if these agreements allow a right of set-off. In addition, the fair value of derivatives is not offset with the amounts for the right to reclaim financial collateral or the obligation to return financial collateral. Financial instruments designated as non-hedging derivatives outstanding at December 31, 2025 and 2024 were as follows: 216 Notional amount Derivative assets Derivative liabilities Statement of Fair value at Statement of Fair value at At December 31, condition December 31, condition December 31, (In thousands) 2025 2024 classification 2025 2024 classification 2025 2024 Derivatives not designated as hedging instruments: Forward contracts $ 13,250 $ 11,150 Trading account debt securities $ - $ 48 Other liabilities $ 42 $ 1 Interest rate caps 93,125 95,625 Other assets - 26 Other liabilities - 26 Indexed options on deposits 95,467 93,510 Other assets 27,913 25,949 - - - Bifurcated embedded options 90,459 86,278 - - - Interest bearing deposits 25,698 22,805 Total derivatives not designated as hedging instruments $ 292,301 $ 286,563 $ 27,913 $ 26,023 $ 25,740 $ 22,832 Total derivative assets and liabilities $ 292,301 $ 286,563 $ 27,913 $ 26,023 $ 25,740 $ 22,832 Cash Flow Hedges The Corporation utilizes forward contracts to hedge the sale of mortgage-backed securities with duration terms over one month. Interest rate forwards are contracts for the delayed delivery of securities, which the seller agrees to deliver on a specified future date at a specified price or yield. These forward contracts are hedging a forecasted transaction and thus qualify for cash flow hedge accounting. Changes in the fair value of these forward contracts designated as cash flow hedges are recorded in other comprehensive income (loss). Effective on January 1, 2023, the Corporation discontinued the hedge accounting treatment of certain forward contracts for which the changes in fair value were recorded, net of taxes, in accumulated other comprehensive income (loss) and subsequently reclassified to net income (loss) in the same period that the hedged transaction impacted earnings. As a result of this change, the changes in the fair value of these forward contracts are being recorded through net income. For cash flow hedges, net gains (losses) on derivative contracts that are reclassified from accumulated other comprehensive income (loss) to current period earnings are included in the line item in which the hedged item is recorded and during the period in which the forecasted transaction impacts earnings, as presented in the tables below. Year ended December 31, 2023 (In thousands) Amount of net gain (loss) recognized in OCI on derivatives (effective portion) Classification in the statement of operations of the net gain (loss) reclassified from AOCI into income (effective portion and ineffective portion) Amount of net gain (loss) reclassified from AOCI into income (effective portion) Amount of net gain (loss) recognized in income on derivatives (ineffective portion) Forward contracts $ ( 30 ) Mortgage banking activities $ 41 $ - Total $ ( 30 ) $ 41 $ - Fair Value Hedges At December 31, 2025 and 2024, there were no derivatives designated as fair value hedges. Non-Hedging Activities 217 For the year ended December 31, 2025, the Corporation recognized a gain of $ 0.4 million (2024 –gain of $ 0.6 million; 2023 – gain of $ 1.5 million) related to its non-hedging derivatives, as detailed in the table below. Amount of Net Gain (Loss) Recognized in Income on Derivatives Year ended Year ended Year ended Classification of Net Gain (Loss) December 31, December 31, December 31, (In thousands) Recognized in Income on Derivatives 2025 2024 2023 Forward contracts Mortgage banking activities $ ( 272 ) $ 34 $ 655 Interest rate caps Other operating income - 18 ( 18 ) Indexed options on deposits Interest expense 6,068 7,423 6,201 Bifurcated embedded options Interest expense ( 5,402 ) ( 6,842 ) ( 5,326 ) Total $ 394 $ 633 $ 1,512 Forward Contracts The Corporation has forward contracts to sell mortgage-backed securities, which are accounted for as trading derivatives. Changes in their fair value are recognized in mortgage banking activities. Interest Rate Caps The Corporation enters into interest rate caps as an intermediary on behalf of its customers and simultaneously takes offsetting positions under the same terms and conditions, thus minimizing its market and credit risks. Indexed and Embedded Options The Corporation offers certain customers’ deposits whose return are tied to the performance of the Standard and Poor’s (“S&P 500”) stock market indexes, and other deposits whose returns are tied to other stock market indexes or other equity securities performance. The Corporation bifurcated the related options embedded within these customers’ deposits from the host contract in accordance with ASC Subtopic 815-15. In order to limit the Corporation’s exposure to changes in these indexes, the Corporation purchases indexed options which returns are tied to the same indexes from major broker dealer companies in the over the counter market. Accordingly, the embedded options and the related indexed options are marked-to-market through earnings. 218 Note 26 – Related party transactions The Corporation has had loan transactions with the Corporation’s directors, executive officers, including certain related individuals or organizations, and affiliates, and proposes to continue such transactions in the ordinary course of its business, on substantially the same terms, including interest rates and collateral, as those prevailing for comparable loan transactions with third parties. The activity and balance of all these loans were as follows: (In thousands) Balance at December 31, 2023 $ 146,017 New loans 10,365 Payments ( 11,743 ) Other changes, including existing loans to new related parties ( 2,422 ) Balance at December 31, 2024 $ 142,217 New loans 14,610 Payments ( 7,097 ) Other changes, including existing loans to new related parties ( 621 ) Balance at December 31, 2025 $ 149,109 New loans and payments include disbursements and collections from existing lines of credit. Certain loans to related parties have participated in the Corporation’s loan mitigation programs that are also available to third parties. From time to time, the Corporation, in the ordinary course of business, also obtains services from related parties that have some association with the Corporation. Management believes the terms of such arrangements are consistent with arrangements entered into with independent third parties. Centro Financiero BHD, S.A. At December 31, 2025, the Corporation had a 15.63 % equity interest in Centro Financiero BHD, S.A. (“BHD”), one of the largest banking and financial services groups in the Dominican Republic. During the year ended December 31, 2025, the Corporation recorded $ 29.9 million in equity pickup (December 31, 2024 - $ 33.0 million), including the net impact of $ 46.3 million from net earnings (December 31, 2024 - $ 39.3 million), offset by ($ 16.4 ) million recorded through Other Comprehensive Income (December 31, 2024 - ($ 6.3 ) million) related to foreign currency translation adjustments and changes in the fair value of available for sale securities. At December 31, 2025, the investment in BHD had a carrying amount of $ 249.4 million (December 31, 2024 - $ 239.5 million) and the Corporation received $ 20.0 million in cash dividend distributions during the year ended December 31, 2025 (December 31, 2024 - $ 19.4 million). 219 Note 27 – 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. 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 December 31, 2025 and 2024: 220 At December 31, 2025 (In thousands) Level 1 Level 2 Level 3 Measured at NAV Total RECURRING FAIR VALUE MEASUREMENTS Assets Debt securities available-for-sale: U.S. Treasury securities $ 6,576,313 $ 9,147,141 $ - $ - $ 15,723,454 Collateralized mortgage obligations - federal agencies - 100,241 - - 100,241 Mortgage-backed securities - 4,750,122 405 - 4,750,527 Other - - 750 - 750 Total debt securities available-for-sale $ 6,576,313 $ 13,997,504 $ 1,155 $ - $ 20,574,972 Trading account debt securities, excluding derivatives: U.S. Treasury securities $ 12,450 $ 10 $ - $ - $ 12,460 Obligations of Puerto Rico, States and political subdivisions - 45 - - 45 Collateralized mortgage obligations - 567 - - 567 Mortgage-backed securities - 23,314 84 - 23,398 Other - - 99 - 99 Total trading account debt securities, excluding derivatives $ 12,450 $ 23,936 $ 183 $ - $ 36,569 Equity securities $ - $ 50,632 $ - $ 852 $ 51,484 Mortgage servicing rights - - 96,356 - 96,356 Loans held-for-sale - 9,998 - - 9,998 Derivatives - 27,913 - - 27,913 Total assets measured at fair value on a recurring basis $ 6,588,763 $ 14,109,983 $ 97,694 $ 852 $ 20,797,292 Liabilities Derivatives $ - $ ( 25,740 ) $ - $ - $ ( 25,740 ) Total liabilities measured at fair value on a recurring basis $ - $ ( 25,740 ) $ - $ - $ ( 25,740 ) 221 At December 31, 2024 (In thousands) Level 1 Level 2 Level 3 Measured at NAV Total RECURRING FAIR VALUE MEASUREMENTS Assets Debt securities available-for-sale: U.S. Treasury securities $ 7,512,171 $ 5,482,939 $ - $ - $ 12,995,110 Collateralized mortgage obligations - federal agencies - 120,284 - - 120,284 Mortgage-backed securities - 5,127,775 484 - 5,128,259 Other - - 2,250 - 2,250 Total debt securities available-for-sale $ 7,512,171 $ 10,730,998 $ 2,734 $ - $ 18,245,903 Trading account debt securities, excluding derivatives: U.S. Treasury securities $ 2,814 $ 10 $ - $ - $ 2,824 Obligations of Puerto Rico, States and political subdivisions - 55 - - 55 Collateralized mortgage obligations - 655 - - 655 Mortgage-backed securities - 29,032 84 - 29,116 Other - - 133 - 133 Total trading account debt securities, excluding derivatives $ 2,814 $ 29,752 $ 217 $ - $ 32,783 Equity securities $ - $ 45,664 $ - $ 381 $ 46,045 Mortgage servicing rights - - 108,103 - 108,103 Loans held-for-sale - 5,423 - - 5,423 Derivatives - 26,023 - - 26,023 Total assets measured at fair value on a recurring basis $ 7,514,985 $ 10,837,860 $ 111,054 $ 381 $ 18,464,280 Liabilities Derivatives $ - $ ( 22,832 ) $ - $ - $ ( 22,832 ) Total liabilities measured at fair value on a recurring basis $ - $ ( 22,832 ) $ - $ - $ ( 22,832 ) Loans held-for-sale measured at fair value Loans held-for-sale measured at fair value were priced based on secondary market prices. These loans are classified as Level 2. The following tables summarize the difference between the aggregate fair value and the aggregate unpaid principal balance for mortgage loans originated as held-for-sale measured at fair value as of December 31, 2025 and December 31, 2024. (In thousands) December 31, 2025 Aggregate Unpaid Fair Value Principal Balance Difference Loans held for sale $ 9,998 $ 9,839 $ 159 (In thousands) December 31, 2024 Aggregate Unpaid Fair Value Principal Balance Difference Loans held for sale $ 5,423 $ 5,436 $ ( 13 ) No loans held-for-sale were 90 or more days past due or on nonaccrual status as of December 31, 2025 and December 31, 2024. 222 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 years ended December 31, 2025, 2024 and 2023 and excludes nonrecurring fair value measurements of assets no longer outstanding as of the reporting date. Year ended December 31, 2025 (In thousands) Level 1 Level 2 Level 3 Total NONRECURRING FAIR VALUE MEASUREMENTS Assets Write-downs Loans [1] $ - $ - $ 3,800 $ 3,800 $ ( 424 ) Other real estate owned [2] - - 4,228 4,228 ( 1,532 ) Other foreclosed assets [2] - - 125 125 ( 53 ) Total assets measured at fair value on a nonrecurring basis $ - $ - $ 8,153 $ 8,153 $ ( 2,009 ) [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. Year ended December 31, 2024 (In thousands) Level 1 Level 2 Level 3 Total NONRECURRING FAIR VALUE MEASUREMENTS Assets Write-downs Loans [1] $ - $ - $ 6,808 $ 6,808 $ ( 939 ) Other real estate owned [2] - - 6,050 6,050 ( 1,934 ) Other foreclosed assets [2] - - 134 134 ( 55 ) Total assets measured at fair value on a nonrecurring basis $ - $ - $ 12,992 $ 12,992 $ ( 2,928 ) [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. Year ended December 31, 2023 (In thousands) Level 1 Level 2 Level 3 Total NONRECURRING FAIR VALUE MEASUREMENTS Assets Write-downs Loans [1] $ - $ - $ 10,091 $ 10,091 $ ( 3,157 ) Other real estate owned [2] - - 6,560 6,560 ( 1,516 ) Other foreclosed assets [2] - - 102 102 ( 28 ) Total assets measured at fair value on a nonrecurring basis $ - $ - $ 16,753 $ 16,753 $ ( 4,701 ) [1] Relates mostly 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. 223 The following tables present the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2025, 2024, and 2023. Year ended December 31, 2025 MBS Other classified classified CMOs MBS Other as debt as debt classified classified securities securities securities as trading as trading classified as Mortgage available- available- account debt account debt trading account servicing Total (In thousands) for-sale for-sale securities securities debt securities rights assets Balance at January 1, 2025 $ 484 $ 2,250 $ - $ 84 $ 133 $ 108,103 $ 111,054 Gains (losses) included in earnings - - - - ( 34 ) ( 12,880 ) ( 12,914 ) Gains (losses) included in OCI ( 4 ) - - - - - ( 4 ) Additions - - - - - 1,133 1,133 Settlements ( 75 ) - - - - - ( 75 ) Transfers out of Level 3 - ( 1,500 ) - - - - ( 1,500 ) Balance at December 31, 2025 $ 405 $ 750 $ - $ 84 $ 99 $ 96,356 $ 97,694 Changes in unrealized gains (losses) included in earnings relating to assets still held at December 31, 2025 $ - $ - $ - $ ( 1 ) $ 18 $ ( 3,786 ) $ ( 3,769 ) Year ended December 31, 2024 MBS Other Other classified classified CMOs MBS securities as debt as debt classified classified classified securities securities as trading as trading as trading Mortgage available- available- account debt account debt account debt servicing Total (In thousands) for-sale for-sale securities securities securities rights assets Balance at January 1, 2024 $ 606 $ 2,500 $ 5 $ 112 $ 167 $ 118,109 $ 121,499 Gains (losses) included in earnings - ( 500 ) - - ( 34 ) ( 11,370 ) ( 11,904 ) Gains (losses) included in OCI 3 - - - - - 3 Additions - - - - - 1,364 1,364 Sales - 250 - - - - 250 Settlements ( 125 ) - ( 5 ) ( 28 ) - - ( 158 ) Balance at December 31, 2024 $ 484 $ 2,250 $ - $ 84 $ 133 $ 108,103 $ 111,054 Changes in unrealized gains (losses) included in earnings relating to assets still held at December 31, 2024 $ - $ - $ - $ 1 $ 7 $ ( 2,120 ) $ ( 2,112 ) Year ended December 31, 2023 MBS Other Other classified classified CMOs MBS securities as debt as debt classified classified as classified securities securities as trading trading as trading Mortgage available- available- account debt account debt account debt servicing Total (In thousands) for-sale for-sale securities securities securities rights assets Balance at January 1, 2023 $ 711 $ 1,000 $ 113 $ 215 $ 207 $ 128,350 $ 130,596 Gains (losses) included in earnings - - - ( 2 ) ( 40 ) ( 11,589 ) ( 11,631 ) Gains (losses) included in OCI ( 5 ) - - - - - ( 5 ) Additions - 1,500 4 - - 2,097 3,601 Sales - - - - - ( 1,269 ) ( 1,269 ) Settlements ( 100 ) - ( 112 ) ( 101 ) - 520 207 Balance at December 31, 2023 $ 606 $ 2,500 $ 5 $ 112 $ 167 $ 118,109 $ 121,499 Changes in unrealized gains (losses) included in earnings relating to assets still held at December 31, 2023 $ - $ - $ - $ ( 1 ) $ 18 $ ( 529 ) $ ( 512 ) 224 Gains and losses (realized and unrealized) included in earnings for the years ended December 31, 2025, 2024, and 2023 for Level 3 assets and liabilities included in the previous tables are reported in the consolidated statement of operations as follows: 2025 2024 2023 Total Changes in unrealized Total Changes in unrealized Total Changes in unrealized gains (losses) gains (losses) gains (losses) gains (losses) gains (losses) gains (losses) included relating to assets still included relating to assets still included relating to assets still (In thousands) in earnings held at reporting date in earnings held at reporting date in earnings held at reporting date Mortgage banking activities $ ( 12,880 ) $ ( 3,786 ) $ ( 11,370 ) $ ( 2,120 ) $ ( 11,589 ) $ ( 529 ) Trading account (loss) profit ( 34 ) 17 ( 34 ) 8 ( 42 ) 17 Provision for credit losses - - ( 500 ) - - - Total $ ( 12,914 ) $ ( 3,769 ) $ ( 11,904 ) $ ( 2,112 ) $ ( 11,631 ) $ ( 512 ) 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 December 31, 2025 and 2024. Fair value at December 31, (In thousands) 2025 Valuation technique Unobservable inputs Weighted average (range) [1] Other - trading $ 99 Discounted cash flow model Weighted average life 2 years Yield 12 .0% Prepayment speed 10.8 % Loans held-in-portfolio $ 3,800 [2] External appraisal Haircut applied on external appraisals 5.0 % Other real estate owned $ 34 [2] External appraisal Haircut applied on external appraisals 20 % [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. [2] Other real estate owned in which haircuts were not applied to external appraisals were excluded from this table. 225 Fair value at December 31, (In thousands) 2024 Valuation technique Unobservable inputs Weighted average (range) [1] Other - trading $ 133 Discounted cash flow model Weighted average life 2 years Yield 12 .0% Prepayment speed 10.8 % Loans held-in-portfolio $ 6,808 [2] External appraisal Haircut applied on external appraisals 6.6 % ( 5 .0% - 10 .0%) Other real estate owned $ 53 [3] External appraisal Haircut applied on external appraisals 60.1 % ( 35 .0% - 65.6 %) [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. [3] Other real estate owned in which haircuts were not applied to external appraisals were excluded from this table. The significant unobservable inputs used in the fair value measurement of the Corporation’s collateralized mortgage obligations and interest-only collateralized mortgage obligation (reported as “other”), which are classified in the “trading” category, are yield, constant prepayment rate, and weighted average life. Significant increases (decreases) in any of those inputs in isolation would result in significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the constant prepayment rate will generate a directionally opposite change in the weighted average life. For example, as the average life is reduced by a higher constant prepayment rate, a lower yield will be realized, and when there is a reduction in the constant prepayment rate, the average life of these collateralized mortgage obligations will extend, thus resulting in a higher yield. The significant unobservable inputs used in the fair value measurement of the Corporation’s mortgage servicing rights are constant prepayment rates and discount rates. Increases in interest rates may result in lower prepayments. Discount rates vary according to products and / or portfolios depending on the perceived risk. Increases in discount rates result in a lower fair value measurement. Following is a description of the Corporation’s valuation methodologies used for assets and liabilities measured at fair value. The disclosure requirements exclude certain financial instruments and all non-financial instruments. Accordingly, the aggregate fair value amounts of the financial instruments disclosed do not represent management’s estimate of the underlying value of the Corporation. Trading account debt securities and debt securities available-for-sale ● U.S. Treasury securities: The fair value of U.S. Treasury notes is based on yields that are interpolated from the constant maturity treasury curve. These securities are classified as Level 2. U.S. Treasury bills are classified as Level 1 given the high volume of trades and pricing based on those trades. ● Obligations of U.S. Government sponsored entities: The Obligations of U.S. Government sponsored entities include U.S. agency securities, which fair value is based on an active exchange market and on quoted market prices for similar securities. The U.S. agency securities are classified as Level 2. ● Obligations of Puerto Rico, States and political subdivisions: Obligations of Puerto Rico, States and political subdivisions include municipal bonds. The bonds are segregated and the like characteristics divided into specific sectors. Market inputs used in the evaluation process include all or some of the following: trades, bid price or spread, two sided markets, quotes, benchmark curves including but not limited to Treasury benchmarks and swap curves, market data feeds such as those obtained from municipal market sources, discount and capital rates, and trustee reports. The municipal bonds are classified as Level 2. ● Mortgage-backed securities: Certain agency mortgage-backed securities (“MBS”) are priced based on a bond’s theoretical value derived from similar bonds defined by credit quality and market sector. Their fair value incorporates an option adjusted spread. The agency MBS are classified as Level 2. Other agency MBS such as GNMA Puerto Rico Serials are priced using an internally-prepared pricing matrix with quoted prices from local brokers dealers. These particular MBS are classified as Level 3. ● Collateralized mortgage obligations: Agency collateralized mortgage obligations (“CMOs”) are priced based on a bond’s theoretical value derived from similar bonds defined by credit quality and market sector and for which fair value incorporates an option adjusted spread. The option adjusted spread model includes prepayment and volatility assumptions, ratings (whole loans collateral) and spread adjustments. These CMOs are classified as Level 2. Other CMOs, due to their limited liquidity, are classified as Level 3 due to the insufficiency of inputs such as executed trades, credit information and cash flows. 226 ● Corporate securities (included as “other” in the “available-for-sale” category): Given that the quoted prices are for similar instruments, these securities are classified as Level 2. ● Corporate securities and interest-only strips (included as “other” in the “trading account debt securities” category): For corporate securities, quoted prices for these security types are obtained from broker dealers. Given that the quoted prices are for similar instruments or do not trade in highly liquid markets, these securities are classified as Level 2. Given that the fair value was estimated based on a discounted cash flow model using unobservable inputs, interest-only strips are classified as Level 3. Equity securities Equity securities are comprised principally of shares in closed-ended and open-ended mutual funds and other equity securities. Closed-end funds are traded on the secondary market at the shares’ market value. Open-ended funds are considered to be liquid, as investors can sell their shares continually to the fund and are priced at NAV. Mutual funds are classified as Level 2. Other equity securities that do not trade in highly liquid markets are also classified as Level 2, except for one equity security that do not have readily determinable fair value and is under an investment company is measured at NAV. Mortgage servicing rights Mortgage servicing rights (“MSRs”) do not trade in an active market with readily observable prices. MSRs are priced using a discounted cash flow model valuation performed by a third party. The discounted cash flow model incorporates assumptions that market participants would use in estimating future net servicing income, including portfolio characteristics, prepayments assumptions, discount rates, delinquency and foreclosure rates, late charges, other ancillary revenues, cost to service and other economic factors. Prepayment speeds are adjusted for the loans’ characteristics and portfolio behavior. Due to the unobservable nature of certain valuation inputs, the MSRs are classified as Level 3. Derivatives Interest rate caps and indexed options are traded in over-the-counter active markets. These derivatives are indexed to an observable interest rate benchmark, such as LIBOR or equity indexes, and are priced using an income approach based on present value and option pricing models using observable inputs. Other derivatives are liquid and have quoted prices, such as forward contracts or “to be announced securities” (“TBAs”). All of these derivatives are classified as Level 2. The non-performance risk is determined using internally-developed models that consider the collateral held, the remaining term, and the creditworthiness of the entity that bears the risk, and uses available public data or internally-developed data related to current spreads that denote their probability of default. Loans held-in-portfolio that are collateral dependent The impairment is 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 and which could be subject to internal adjustments. These collateral dependent loans are classified as Level 3. Loans measured at fair value or measured at the lower of cost or market Loans held-for-sale measured at fair value or measured at the lower of cost or market were priced based on secondary market prices. These loans are classified as Level 2. Other real estate owned and other foreclosed assets Other real estate owned includes real estate properties securing mortgage, consumer, and commercial loans. Other foreclosed assets include primarily automobiles securing auto loans. The fair value of foreclosed assets may be determined using an external appraisal, broker price opinion, or an internal valuation. These foreclosed assets are classified as Level 3 since they are subject to internal adjustments. 227 Note 28 – 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 December 31, 2025 and December 31, 2024, as applicable. In different interest rate environments, fair value estimates can differ significantly, especially for certain fixed rate financial instruments. In addition, the fair values presented do not attempt to estimate the value of the Corporation’s fee generating businesses and anticipated future business activities, that is, they do not represent the Corporation’s value as a going concern. There have been no changes in the Corporation’s valuation methodologies and inputs used to estimate the fair values for each class of financial assets and liabilities not measured at fair value. The following tables present the carrying amount and estimated fair values of financial instruments with their corresponding level in the fair value hierarchy. The aggregate fair value amounts of the financial instruments disclosed do not represent management’s estimate of the underlying value of the Corporation. 228 December 31, 2025 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Assets: Cash and due from banks $ 402,755 $ 402,755 $ - $ - $ - $ 402,755 Money market investments 4,626,506 4,616,272 10,234 - - 4,626,506 Trading account debt securities, excluding derivatives [1] 36,569 12,450 23,936 183 - 36,569 Debt securities available-for-sale [1] 20,574,972 6,576,313 13,997,504 1,155 - 20,574,972 Debt securities held-to-maturity: U.S. Treasury securities $ 7,268,967 $ - $ 7,309,991 $ - $ - $ 7,309,991 Obligations of Puerto Rico, States and political subdivisions 45,295 - 6,766 39,564 - 46,330 Collateralized mortgage obligation-federal agency 1,495 - 1,306 - - 1,306 Securities in wholly owned statutory business trusts 5,960 - 5,960 - - 5,960 Total debt securities held-to-maturity $ 7,321,717 $ - $ 7,324,023 $ 39,564 $ - $ 7,363,587 Equity securities: FHLB stock $ 68,422 $ - $ 68,422 $ - $ - $ 68,422 FRB stock 102,665 - 102,665 - - 102,665 Other investments 58,761 - 50,632 7,817 852 59,301 Total equity securities $ 229,848 $ - $ 221,719 $ 7,817 $ 852 $ 230,388 Loans held-for-sale $ 9,998 $ - $ 9,998 $ - $ - $ 9,998 Loans held-in-portfolio 38,519,462 - - 37,858,044 - 37,858,044 Mortgage servicing rights 96,356 - - 96,356 - 96,356 Derivatives 27,913 - 27,913 - - 27,913 December 31, 2025 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Liabilities: Deposits: Demand deposits $ 56,710,732 $ - $ 56,710,732 $ - $ - $ 56,710,732 Time deposits 9,479,361 - 9,305,980 - - 9,305,980 Total deposits $ 66,190,093 $ - $ 66,016,712 $ - $ - $ 66,016,712 Assets sold under agreements to repurchase $ 39,001 $ - $ 39,004 $ - $ - $ 39,004 Other short-term borrowings [2] 650,000 - 650,000 - - 650,000 Notes payable: FHLB advances $ 164,620 $ - $ 163,417 $ - $ - $ 163,417 Unsecured senior debt securities 396,558 - 419,300 - - 419,300 Junior subordinated deferrable interest debentures (related to trust preferred securities) 198,399 - 191,909 - - 191,909 Total notes payable $ 759,577 $ - $ 774,626 $ - $ - $ 774,626 Derivatives $ 25,740 $ - $ 25,740 $ - $ - $ 25,740 [1] Refer to Note 27 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level. [2] Refer to Note 16 to the Consolidated Financial Statements for the composition of other short-term borrowings. 229 December 31, 2024 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Assets: Cash and due from banks $ 419,638 $ 419,638 $ - $ - $ - $ 419,638 Money market investments 6,380,948 6,371,180 9,768 - - 6,380,948 Trading account debt securities, excluding derivatives [1] 32,783 2,814 29,752 217 - 32,783 Debt securities available-for-sale [1] 18,245,903 7,512,171 10,730,998 2,734 - 18,245,903 Debt securities held-to-maturity: U.S. Treasury securities $ 7,693,418 $ - $ 7,623,824 $ - $ - $ 7,623,824 Obligations of Puerto Rico, States and political subdivisions 51,865 - 6,866 44,711 - 51,577 Collateralized mortgage obligation-federal agency 1,518 - 1,304 - - 1,304 Securities in wholly owned statutory business trusts 5,959 - 5,959 - - 5,959 Total debt securities held-to-maturity $ 7,752,760 $ - $ 7,637,953 $ 44,711 $ - $ 7,682,664 Equity securities: FHLB stock $ 55,786 $ - $ 55,786 $ - $ - $ 55,786 FRB stock 100,304 - 100,304 - - 100,304 Other investments 52,076 - 45,664 6,528 381 52,573 Total equity securities $ 208,166 $ - $ 201,754 $ 6,528 $ 381 $ 208,663 Loans held-for-sale $ 5,423 $ - $ 5,423 $ - $ - $ 5,423 Loans held-in-portfolio 36,361,628 - - 35,652,539 - 35,652,539 Mortgage servicing rights 108,103 - - 108,103 - 108,103 Derivatives 26,023 - 26,023 - - 26,023 December 31, 2024 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Liabilities: Deposits: Demand deposits $ 55,871,463 $ - $ 55,871,463 $ - $ - $ 55,871,463 Time deposits 9,012,882 - 8,795,803 - - 8,795,803 Total deposits $ 64,884,345 $ - $ 64,667,266 $ - $ - $ 64,667,266 Assets sold under agreements to repurchase $ 54,833 $ - $ 54,845 $ - $ - $ 54,845 Other short-term borrowings [2] 225,000 - 225,000 - - 225,000 Notes payable: FHLB advances $ 302,722 $ - $ 295,023 $ - $ - $ 295,023 Unsecured senior debt securities 395,198 - 415,148 - - 415,148 Junior subordinated deferrable interest debentures (related to trust preferred securities) 198,373 - 189,758 - - 189,758 Total notes payable $ 896,293 $ - $ 899,929 $ - $ - $ 899,929 Derivatives $ 22,832 $ - $ 22,832 $ - $ - $ 22,832 [1] Refer to Note 27 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level. [2] Refer to Note 16 to the Consolidated Financial Statements for the composition of other short-term borrowings. Refer to Note 23 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 December 31, 2025 and December 31, 2024. The fair value of commitments to extend credit and letters of credit, which are based on the fees charged to enter into those agreements, are not material to Popular’s financial statements. 230 Note 29 – Employee benefits Certain employees of BPPR are covered by three non-contributory defined benefit pension plans, the Banco Popular de Puerto Rico Retirement Plan and two Restoration Plans (the “Pension Plans”). Pension benefits are based on age, years of credited service, and final average compensation. The Pension Plans are currently closed to new hires and the accrual of benefits are frozen to all participants. The Pension Plans’ benefit formula is based on a percentage of average final compensation and years of service as of the plan freeze date. Normal retirement age under the retirement plan is age 65 with 5 years of service. Pension costs are funded in accordance with minimum funding standards under the Employee Retirement Income Security Act of 1974 (“ERISA”). Benefits under the Pension Plans are subject to the U.S. and Puerto Rico Internal Revenue Code limits on compensation and benefits. Benefits under restoration plans restore benefits to selected employees that are limited under the Banco Popular de Puerto Rico Retirement Plan due to U.S. and Puerto Rico Internal Revenue Code limits and a compensation definition that excludes amounts deferred pursuant to nonqualified arrangements. In addition to providing pension benefits, BPPR provides certain health care benefits for certain retired employees (the “OPEB Plan”). Regular employees of BPPR, hired before February 1, 2000, may become eligible for health care benefits, provided they reach retirement age while working for BPPR. The Corporation’s funding policy is to make annual contributions to the Pension Plans, when necessary, in amounts which fully provide for all benefits as they become due under the plans. The Corporation’s pension fund investment strategy is to invest in a prudent manner for the exclusive purpose of providing benefits to participants. A well defined internal structure has been established to develop and implement a risk-controlled investment strategy that is targeted to produce a total return that, when combined with BPPR contributions to the fund, will maintain the fund’s ability to meet all required benefit obligations. Risk is controlled through diversification of asset types, such as investments in domestic and international equities and fixed income. Equity investments include various types of stock and index funds. Also, this category includes Popular, Inc.’s common stock. Fixed income investments include U.S. Government securities and other U.S. agencies’ obligations, corporate bonds, mortgage loans, mortgage-backed securities and index funds, among others. A designated committee periodically reviews the performance of the pension plans’ investments and assets allocation. The Trustee and the money managers are allowed to exercise investment discretion, subject to limitations established by the pension plans’ investment policies. The plans forbid money managers to enter into derivative transactions, unless approved by the Trustee. The overall expected long-term rate-of-return-on-assets assumption reflects the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the benefit obligation. The assumption has been determined by reflecting expectations regarding future rates of return for the plan assets, with consideration given to the distribution of the investments by asset class and historical rates of return for each individual asset class. This process is reevaluated at least on an annual basis and if market, actuarial and economic conditions change, adjustments to the rate of return may come into place. The Pension Plans weighted average asset allocation as of December 31, 2025 and 2024 and the approved asset allocation ranges, by asset category, are summarized in the table below. Minimum allotment Maximum allotment 2025 2024 Equity 0 % 70 % 12 % 10 % Debt securities 0 % 100 % 85 % 85 % Popular related securities 0 % 5 % 1 % 1 % Cash and cash equivalents 0 % 100 % 2 % 4 % 231 The following table sets forth by level, within the fair value hierarchy, the Pension Plans’ assets at fair value at December 31, 2025 and 2024. Investments measured at net asset value per share (“NAV”) as a practical expedient have not been classified in the fair value hierarchy, but are presented in order to permit reconciliation of the plans’ assets. 2025 2024 (In thousands) Level 1 Level 2 Level 3 Measured at NAV Total Level 1 Level 2 Level 3 Measured at NAV Total Obligations of the U.S. Government, its agencies, states and political subdivisions $ - $ 15,473 $ - $ 183,353 $ 198,826 $ - $ 6,956 $ - $ 125,476 $ 132,432 Corporate bonds and debentures - 315,583 - 9,146 324,729 - 364,900 - 10,734 375,634 Equity securities - Common Stock 5,205 - - - 5,205 3,821 - - - 3,821 Equity securities - ETF's 37,021 8,416 - - 45,437 32,372 6,503 - - 38,875 Foreign commingled trust funds - - - 26,553 26,553 - - - 20,097 20,097 Mutual fund - 11,207 - - 11,207 - 9,833 - - 9,833 Mortgage-backed securities - 138 - - 138 - 14,160 - - 14,160 Cash and cash equivalents 9,387 - - - 9,387 17,034 - - - 17,034 Accrued investment income - - 4,356 - 4,356 - - 5,289 - 5,289 Total assets $ 51,613 $ 350,817 $ 4,356 $ 219,052 $ 625,838 $ 53,227 $ 402,352 $ 5,289 $ 156,307 $ 617,175 232 The closing prices reported in the active markets in which the securities are traded are used to value the investments. Following is a description of the valuation methodologies used for investments measured at fair value: ● Obligations of U.S. Government, its agencies, states and political subdivisions - The fair value of Obligations of U.S. Government and its agencies obligations are based on an active exchange market and on quoted market prices for similar securities. U.S. agency structured notes are priced based on a bond’s theoretical value from similar bonds defined by credit quality and market sector and for which the fair value incorporates an option adjusted spread in deriving their fair value. The fair value of municipal bonds are based on trade data on these instruments reported on Municipal Securities Rulemaking Board (“MSRB”) transaction reporting system or comparable bonds from the same issuer and credit quality. These securities are classified as Level 2, except for the governmental index funds that are measured at NAV. ● Corporate bonds and debentures - Corporate bonds and debentures are valued at fair value at the closing price reported in the active market in which the bond is traded. These securities are classified as Level 2, except for the c orporate bond funds that are measured at NAV. ● Equity securities – common stock - Equity securities with quoted market prices obtained from an active exchange market and high liquidity are classified as Level 1. ● Equity securities – ETF’s – Exchange Traded Funds shares with quoted market prices obtained from an active exchange market. Highly liquid ETF’s are classified as Level 1 while less liquid ETF’s are classified as Level 2. ● Foreign commingled trust fund- Collective investment funds that are valued using the NAV per share practical expedient, were not categorized within the fair value hierarchy and were presented separately. The Fund's investments are in an international equity portfolio and in an emerging markets equity fund. ● Mutual funds – Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission (SEC) and are required to publish their daily NAV. Since these funds have liquid markets with trading activity of these or similar securities they are considered level 2. ● Cash and cash equivalents - The carrying amount of cash and cash equivalents is a reasonable estimate of the fair value since it is available on demand or due to their short-term maturity. Cash and cash equivalents are classified as Level 1. ● Accrued investment income – Given the short-term nature of these assets, their carrying amount approximates fair value. Since there is a lack of observable inputs related to instrument specific attributes, these are reported as Level 3. The preceding valuation methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following table presents the change in Level 3 assets measured at fair value. 233 (In thousands) 2025 2024 Balance at beginning of year $ 5,289 $ 3,927 Purchases, sales, issuance and settlements (net) ( 933 ) 1,362 Balance at end of year $ 4,356 $ 5,289 There were no transfers in and/or out of Level 3 for financial instruments measured at fair value on a recurring basis during the years ended December 31, 2025 and 2024. There were no transfers in and/or out of Level 1 and Level 2 during the years ended December 31, 2025 and 2024. Information on the shares of common stock held by the pension plans is provided in the table that follows. (In thousands, except number of shares information) 2025 2024 Shares of Popular, Inc. common stock 41,796 40,619 Fair value of shares of Popular, Inc. common stock $ 5,204 $ 3,821 Dividends paid on shares of Popular, Inc. common stock held by the plan $ 117 $ 360 The following table presents the components of net periodic benefit cost for the years ended December 31, 2025, 2024 and 2023. Pension Plans OPEB Plan (In thousands) 2025 2024 2023 2025 2024 2023 (in thousands) Service cost $ - $ - $ - $ 59 $ 127 $ 191 Other operating expenses: Interest cost 29,642 30,234 31,548 5,163 5,686 6,082 Expected return on plan assets ( 32,277 ) ( 34,376 ) ( 34,365 ) - - - Recognized net actuarial loss 13,799 16,664 21,465 ( 4,707 ) ( 2,193 ) ( 2,212 ) Net periodic cost (benefit) $ 11,164 $ 12,522 $ 18,648 $ 515 $ 3,620 $ 4,061 Other Adjustments - - - 40 - - Total cost (benefit) $ 11,164 $ 12,522 $ 18,648 $ 555 $ 3,620 $ 4,061 234 The following table sets forth the aggregate status of the plans and the amounts recognized in the consolidated financial statements at December 31, 2025 and 2024. Pension Plans OPEB Plan (In thousands) 2025 2024 2025 2024 Change in benefit obligation: Benefit obligation at beginning of year $ 589,758 $ 635,794 $ 99,172 $ 117,045 Service cost - - 59 127 Interest cost 29,642 30,234 5,163 5,686 Actuarial (gain)/loss [1] 17,556 ( 31,747 ) 6,370 ( 16,787 ) Benefits paid ( 44,537 ) ( 44,523 ) ( 6,830 ) ( 6,899 ) Other adjustments - - 40 - Benefit obligation at end of year $ 592,419 $ 589,758 $ 103,974 $ 99,172 Change in fair value of plan assets: Fair value of plan assets at beginning of year $ 617,175 $ 652,426 $ - $ - Actual return on plan assets 52,970 9,042 - - Employer contributions 230 230 6,830 6,899 Benefits paid ( 44,537 ) ( 44,523 ) ( 6,830 ) ( 6,899 ) Fair value of plan assets at end of year $ 625,838 $ 617,175 $ - $ - Funded status of the plan: Benefit obligation at end of year $ ( 592,419 ) $ ( 589,758 ) $ ( 103,974 ) $ ( 99,172 ) Fair value of plan assets at end of year 625,838 617,175 - - Funded status at year end $ 33,419 $ 27,417 $ ( 103,974 ) $ ( 99,172 ) Amounts recognized in accumulated other comprehensive loss: Net loss/(gain) 160,081 177,017 ( 28,971 ) ( 40,048 ) Accumulated other comprehensive loss (AOCL) $ 160,081 $ 177,017 $ ( 28,971 ) $ ( 40,048 ) Reconciliation of net (liabilities) assets: Net asset (liabilities) at beginning of year $ 27,417 $ 16,632 $ ( 99,172 ) $ ( 117,045 ) Amount recognized in AOCL at beginning of year, pre-tax 177,017 200,094 ( 40,048 ) ( 25,454 ) Amount prepaid (liability) at beginning of year 204,434 216,726 ( 139,220 ) ( 142,499 ) Total benefit cost ( 11,164 ) ( 12,522 ) ( 555 ) ( 3,620 ) Contributions 230 230 6,830 6,899 Amount prepaid (liability) at end of year 193,500 204,434 ( 132,945 ) ( 139,220 ) Amount recognized in AOCL ( 160,081 ) ( 177,017 ) 28,971 40,048 Net asset/(liabilities) at end of year $ 33,419 $ 27,417 $ ( 103,974 ) $ ( 99,172 ) [1] For 2025, the significant component of the Pension Plans actuarial loss was mainly related to an increase in the obligation due to a decrease in the single weighted-average discount rates. For OPEB plans, significant components of the actuarial loss that changed the benefit obligation were mainly related to the per capita cost assumption at year end that deteriorated the funded position as well as an increase in the obligation due to a decrease in the single weighted-average discount rate. For 2024, the significant component of the Pension Plans actuarial gain were mainly related to an decrease in the obligation due to an increase in the single weighted-average discount rates and a change to certain demographic assumptions partially offset by a lower return on the fair value of plan assets. For OPEB plans, significant components of the actuarial gain that changed the benefit obligation were mainly related to the per capita assumption at year end that improved the funded position, a change to certain demographic assumptions, a favorable demographic experience from larger than expected reductions and an increase in discount rates. 235 The following table presents the change in accumulated other comprehensive loss (“AOCL”), pre-tax, for the years ended December 31, 2025 and 2024. (In thousands) Pension Plans OPEB Plan 2025 2024 2025 2024 Accumulated other comprehensive loss at beginning of year $ 177,017 $ 200,094 $ ( 40,048 ) $ ( 25,454 ) Increase (decrease) in AOCL: Recognized during the year: Amortization of actuarial losses ( 13,799 ) ( 16,664 ) 4,707 2,193 Occurring during the year: Net actuarial (gains)/losses ( 3,137 ) ( 6,413 ) 6,370 ( 16,787 ) Total (decrease) increase in AOCL ( 16,936 ) ( 23,077 ) 11,077 ( 14,594 ) Accumulated other comprehensive loss at end of year $ 160,081 $ 177,017 $ ( 28,971 ) $ ( 40,048 ) The Corporation estimates the service and interest cost components utilizing a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to their underlying projected cash flows. To determine benefit obligation at year end, the Corporation used a weighted average of annual spot rates applied to future expected cash flows for years ended December 31, 2025 and 2024. The following table presents the discount rate and assumed health care cost trend rates used to determine the benefit obligation and net periodic benefit cost for the plans: Pension Plan OPEB Plan Weighted average assumptions used to determine net periodic benefit cost for the years ended December 31: 2025 2024 2023 2025 2024 2023 Discount rate for benefit obligation 5.54 - 5.57 % 5.02 - 5.05 % 5.34 - 5.37 % 5.65 % 5.10 % 5.42 % Discount rate for service cost N/A N/A N/A 5.95 % 5.37 % 5.66 % Discount rate for interest cost 5.26 - 5.27 % 4.95 - 4.96 % 5.23 - 5.24 % 5.37 % 4.99 % 5.28 % Expected return on plan assets 5.6 0 - 6.70 % 5.6 0 - 6.60 % 5.9 0 - 6.5 0 % N/A N/A N/A Initial health care cost trend rate N/A N/A N/A 7.00 % 7.25 % 7.50 % Ultimate health care cost trend rate N/A N/A N/A 4.50 % 4.50 % 4.50 % Year that the ultimate trend rate is reached N/A N/A N/A 2035 2035 2035 Pension Plans OPEB Plan Weighted average assumptions used to determine benefit obligation at December 31: 2025 2024 2025 2024 Discount rate for benefit obligation 5.25 - 5.29 % 5.54 - 5.57 % 5.44 % 5.65 % Initial health care cost trend rate N/A N/A 6.75 % 7.00 % Ultimate health care cost trend rate N/A N/A 4.50 % 4.50 % Year that the ultimate trend rate is reached N/A N/A 2035 2035 236 The following table presents information for plans with a projected benefit obligation and accumulated benefit obligation in excess of plan assets for the years ended December 31, 2025 and 2024. Pension Plans OPEB Plan (In thousands) 2025 2024 2025 2024 Projected benefit obligation $ 34,236 $ 33,993 $ 103,974 $ 99,172 Accumulated benefit obligation 34,236 33,993 103,974 99,172 Fair value of plan assets 29,498 28,177 - - The following table presents information for plans with plan assets in excess of its projected benefit obligation and accumulated benefit obligation for the years ended December 31, 2025 and 2024. Pension Plans OPEB Plan (In thousands) 2025 2024 2025 2024 Projected benefit obligation $ 558,183 $ 555,765 $ - $ - Accumulated benefit obligation 558,183 555,765 - - Fair value of plan assets 596,341 588,998 - - The Corporation expects to make the following contributions to the plans during the year ended December 31, 2026. (In thousands) 2026 Pension Plans $ 227 OPEB Plan $ 5,914 Benefit payments projected to be made from the plans during the next ten years are presented in the table below. (In thousands) Pension Plans OPEB Plan 2026 $ 50,385 $ 5,914 2027 45,855 6,089 2028 45,683 6,321 2029 45,394 6,534 2030 45,017 6,733 2031 - 2035 215,895 35,655 237 The table below presents a breakdown of the plans’ assets and liabilities at December 31, 2025 and 2024. Pension Plans OPEB Plan (In thousands) 2025 2024 2025 2024 Non-current assets $ 38,157 $ 33,233 $ - $ - Current liabilities 222 222 5,805 5,304 Non-current liabilities 4,516 5,594 98,169 93,868 Savings plans The Corporation also provides defined contribution savings plans pursuant to Section 1081.01(d) of the Puerto Rico Internal Revenue Code and Section 401(k) of the U.S. Internal Revenue Code, as applicable, for substantially all the employees of the Corporation. Investments in the plans are participant-directed, and employer matching contributions are determined based on the specific provisions of each plan. Employees are fully vested in the employer’s contribution after five years of service. The cost of providing these benefits in the year ended December 31, 2025 was $ 22.2 million (2024 - $ 21.4 million, 2023 - $ 20.3 million). The plans held 1,150,624 (2024 – 1,177,588 ) shares of common stock of the Corporation with a market value of approximately $ 143.3 million at December 31, 2025 (2024 - $ 110.8 million). 238 Note 30 – Net income per common share The following table sets forth the computation of net income per common share (“EPS”), basic and diluted, for the years ended December 31, 2025, 2024 and 2023: (In thousands, except per share information) 2025 2024 2023 Net income $ 833,159 $ 614,212 $ 541,342 Preferred stock dividends ( 1,412 ) ( 1,412 ) ( 1,412 ) Net income applicable to common stock $ 831,747 $ 612,800 $ 539,930 Average common shares outstanding 67,586,130 71,590,757 71,710,265 Average potential dilutive common shares 26,717 32,945 81,427 Average common shares outstanding - assuming dilution 67,612,847 71,623,702 71,791,692 Basic EPS $ 12.31 $ 8.56 $ 7.53 Diluted EPS $ 12.30 $ 8.56 $ 7.52 Potential common shares consist of shares of common stock issuable under the assumed exercise of stock options, restricted stock and performance share awards using the treasury stock method. This method assumes that the potential common shares are issued and the proceeds from exercise, in addition to the amount of compensation cost attributed to future services, are used to purchase shares of common stock at the exercise date. The difference between the number of potential common shares issued and the shares of common stock purchased is added as incremental shares to the actual number of shares outstanding to compute diluted earnings per share. Warrants, stock options, restricted stock and performance share awards, if any, that result in lower potential common shares issued than shares of common stock purchased under the treasury stock method are not included in the computation of dilutive earnings per share since their inclusion would have an antidilutive effect in earnings per common share. 239 Note 31 – Revenue from contracts with customers The following table presents the Corporation’s revenue streams from contracts with customers by reportable segment for the years ended December 31, 2025, 2024, and 2023. Years ended December 31, (In thousands) 2025 2024 2023 BPPR Popular U.S. BPPR Popular U.S. BPPR Popular U.S. Service charges on deposit accounts $ 145,244 $ 10,624 $ 141,240 $ 10,103 $ 137,297 $ 10,179 Other service fees: Debit card fees [1] 111,979 854 105,017 793 98,779 853 Insurance fees, excluding reinsurance 36,540 7,759 44,808 6,946 46,903 5,602 Credit card fees, excluding late fees and membership fees [1] 109,614 1,363 102,849 1,587 102,214 1,597 Sale and administration of investment products 37,693 - 33,213 - 26,316 - Trust fees 28,313 - 27,659 - 26,160 - Total revenue from contracts with customers [2] $ 469,383 $ 20,600 $ 454,786 $ 19,429 $ 437,669 $ 18,231 [1] Effective in the third quarter of 2024, the Corporation reclassified certain interchange fees, which were previously included jointly with credit card fees from common network activity, as debit card fees. For the year ended December 31, 2024, these interchange fees were approximately $ 45.5 million, which include approximately $ 22.2 million corresponding to the first and second quarters of 2024 which were reclassified. For the year ended December 31, 2023, interchange fees of approximately $ 45.3 million were reclassified. [2] The amounts include intersegment transactions of $ 2.4 million, $ 4.5 million and $ 5 .0 million, respectively, for the years ended December 31, 2025, 2024 and 2023. 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. A service is transferred to the customer when, or as, the customer obtains control of that service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized based on the services that have been rendered to date. Revenue from a performance obligation satisfied at a point in time is recognized when the customer obtains control over the service. The transaction price, or the amount of revenue recognized, reflects the consideration the Corporation expects to be entitled to in exchange for those promised services. In determining the transaction price, the Corporation considers the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The Corporation is the principal in a transaction if it obtains control of the specified goods or services before they are transferred to the customer. If the Corporation acts as principal, revenues are presented in the gross amount of consideration to which it expects to be entitled and are not netted with any related expenses. On the other hand, the Corporation is an agent if it does not control the specified goods or services before they are transferred to the customer. If the Corporation acts as an agent, revenues are presented in the amount of consideration to which it expects to be entitled, net of related expenses. Following is a description of the nature and timing of revenue streams from contracts with customers: Service charges on deposit accounts Service charges on deposit accounts are earned on retail and commercial deposit activities and include, but are not limited to, nonsufficient fund fees, overdraft fees and checks stop payment fees. These transaction-based fees are recognized at a point in time, upon occurrence of an activity or event or upon the occurrence of a condition which triggers the fee assessment. The Corporation is acting as principal in these transactions. Debit card fees Debit card fees include, but are not limited to, interchange fees, surcharging income and foreign transaction fees. These transaction- based fees are recognized at a point in time, upon occurrence of an activity or event or upon the occurrence of a condition which triggers the fee assessment. Interchange fees are recognized upon settlement of the debit card payment transactions. The Corporation is acting as principal in these transactions. Insurance fees 240 Insurance fees include, but are not limited to, commissions and contingent commissions. Commissions and fees are recognized when related policies are effective since the Corporation does not have an enforceable right to payment for services completed to date. An allowance is created for expected adjustments to commissions earned related to policy cancellations. Contingent commissions are recorded on an accrual basis when the amount to be received is notified by the insurance company. The Corporation is acting as an agent since it arranges for the sale of the policies and receives commissions if, and when, it achieves the sale. Credit card fees Credit card fees include, but are not limited to, interchange fees, additional card fees, cash advance fees, balance transfer fees, foreign transaction fees, and returned payments fees. Credit card fees are recognized at a point in time, upon the occurrence of an activity or an event. Interchange fees are recognized upon settlement of the credit card payment transactions. The Corporation is acting as principal in these transactions. Sale and administration of investment products Fees from the sale and administration of investment products include, but are not limited to, commission income from the sale of investment products, asset management fees, underwriting fees, and mutual fund fees. Commission income from investment products is recognized on the trade date since clearing, trade execution, and custody services are satisfied when the customer acquires or disposes of the rights to obtain the economic benefits of the investment products and brokerage contracts have no fixed duration and are terminable at will by either party. The Corporation is acting as principal in these transactions since it performs the service of providing the customer with the ability to acquire or dispose of the rights to obtain the economic benefits of investment products. Asset management fees are satisfied over time and are recognized in arrears. At contract inception, the estimate of the asset management fee is constrained from the inclusion in the transaction price since the promised consideration is dependent on the market and thus is highly susceptible to factors outside the manager’s influence. As advisor, the broker-dealer subsidiary is acting as principal. Underwriting fees are recognized at a point in time, when the investment products are sold in the open market at a markup. When the broker-dealer subsidiary is lead underwriter, it is acting as an agent. In turn, when it is a participating underwriter, it is acting as principal. Mutual fund fees, such as distribution fees, are considered variable consideration and are recognized over time, as the uncertainty of the fees to be received is resolved as NAV is determined and investor activity occurs. The promise to provide distribution-related services is considered a single performance obligation as it requires the provision of a series of distinct services that are substantially the same and have the same pattern of transfer. When the broker-dealer subsidiary is acting as a distributor, it is acting as principal. In turn, when it acts as third-party dealer, it is acting as an agent. Trust fees Trust fees are recognized from retirement plan, mutual fund administration, investment management, trustee, escrow, and custody and safekeeping services. These asset management services are considered a single performance obligation as it requires the provision of a series of distinct services that are substantially the same and have the same pattern of transfer. The performance obligation is satisfied over time, except for optional services and certain other services that are satisfied at a point in time. Revenues are recognized in arrears, when, or as, the services are rendered. The Corporation is acting as principal since, as asset manager, it has the obligation to provide the specified service to the customer and has the ultimate discretion in establishing the fee paid by the customer for the specified services. 241 Note 32 – Leases The Corporation enters in the ordinary course of business into operating and finance leases for land, buildings and equipment. These contracts generally do not include purchase options or residual value guarantees. The remaining lease terms of 0.30 to 29.0 years considers options to extend the leases for up to 20 years. The Corporation identifies leases when it has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. The Corporation recognizes right-of-use assets (“ROU assets”) and lease liabilities related to operating and finance leases in its Consolidated Statements of Financial Condition under the caption of other assets and other liabilities, respectively. Refer to Note 13 and Note 18 to the Consolidated Financial Statements, respectively, for information on the balances of these lease assets and liabilities. The Corporation uses the incremental borrowing rate for purposes of discounting lease payments for operating and finance leases, since it does not have enough information to determine the rates implicit in the leases. The discount rates are based on fixed-rate and fully amortizing borrowing facilities of its banking subsidiaries that are collateralized. For leases held by non-banking subsidiaries, a credit spread is added to this rate based on financing transactions with a similar credit risk profile. The following table presents the undiscounted cash flows of operating and finance leases for each of the following periods: December 31, 2025 (In thousands) 2026 2027 2028 2029 2030 Later Years Total Lease Payments Less: Imputed Interest Total Operating Leases $ 24,644 $ 20,150 $ 17,858 $ 15,645 $ 9,997 $ 35,309 $ 123,603 $ ( 18,645 ) $ 104,958 Finance Leases 5,051 3,805 3,506 3,351 3,288 12,854 31,855 ( 4,466 ) 27,389 The following table presents the lease cost recognized by the Corporation in the Consolidated Statements of Operations as follows: Years ended December 31, (In thousands) 2025 2024 2023 Finance lease cost: Amortization of ROU assets $ 3,351 $ 3,006 $ 4,192 Interest on lease liabilities 944 912 1,063 Operating lease cost 29,670 30,660 31,596 Short-term lease cost 814 497 456 Variable lease cost 354 290 211 Sublease income ( 60 ) ( 81 ) ( 66 ) Total lease cost [1] $ 35,073 $ 35,284 $ 37,452 [1] Total lease cost is recognized as part of net occupancy expense. The following table presents supplemental cash flow information and other related information related to operating and finance leases. 242 Years ended December 31, (Dollars in thousands) 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 30,054 $ 31,416 $ 31,124 Operating cash flows from finance leases 943 912 1,063 Financing cash flows from finance leases 3,933 3,977 5,360 ROU assets obtained in exchange for new lease obligations: Operating leases $ 12,231 $ 2,290 $ 8,048 Finance leases 6,954 732 6,198 Weighted-average remaining lease term: Operating leases 7.8 years 7.2 years 7.3 years Finance leases 9.3 years 8.1 years 8.3 years Weighted-average discount rate: Operating leases 3.7 % 3.4 % 3.3 % Finance leases 3.8 % 3.6 % 3.9 % As of December 31, 2025, the Corporation had additional operating leases contracts that have not yet commenced with an undiscounted contract amount of $ 5.2 million, which will have lease terms of 10 years. 243 Note 33 - Stock-based compensation Incentive Plan On May 12, 2020, the shareholders of the Corporation approved the Popular, Inc. 2020 Omnibus Incentive Plan, which permits the Corporation to issue several types of stock-based compensation to employees and directors of the Corporation and/or any of its subsidiaries (the “2020 Incentive Plan”). The 2020 Incentive Plan replaced the Popular, Inc. 2004 Omnibus Incentive Plan, which was in effect prior to the adoption of the 2020 Incentive Plan (the “2004 Incentive Plan” and, together with the 2020 Incentive Plan, the “Incentive Plan”). Participants under the Incentive Plan are designated by the Talent and Compensation Committee of the Board of Directors (or its delegate, as determined by the Board). Under the Incentive Plan, the Corporation has issued restricted stock and performance shares to its employees and restricted stock and restricted stock units (“RSUs”) to its directors. The restricted stock granted under the Incentive Plan to employees becomes vested based on the employees’ continued service with Popular. Unless otherwise stated in an agreement, the compensation cost associated with the shares of restricted stock granted prior to 2021 was determined based on a two-prong vesting schedule. These grants include ratable vesting over five or four years commencing at the date of grant (the “graduated vesting portion”) with a portion vested at termination of employment after attainment of 55 years of age and 10 years of service or 60 years of age and 5 years of service (the “retirement vesting portion”). The graduated vesting portion is accelerated at termination of employment after attaining 55 years of age and 10 years of service or 60 years of age and 5 years of service. Restricted stock granted on or after 2021 have ratable vesting in equal annual installments over a period of 4 years or 3 years, depending in the classification of the employee. The vesting schedule is accelerated at termination of employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age and 5 years of service. The performance share awards granted under the Incentive Plan consist of the opportunity to receive shares of Popular, Inc.’s common stock provided that the Corporation achieves certain goals during a three-year performance cycle. The goals will be based on two metrics weighted equally: the Relative Total Shareholder Return (“TSR”) and the Absolute Return on Average Tangible Common Equity (“ROATCE”). The TSR metric is considered to be a market condition under ASC 718. For equity settled awards based on a market condition, the fair value is determined as of the grant date and is not subsequently revised based on actual performance. The ROATCE metric is considered to be a performance condition under ASC 718. The fair value is determined based on the probability of achieving the ROATCE goal as of each reporting period. The TSR and ROATCE metrics are equally weighted and work independently. The number of shares that will ultimately vest ranges from 50 % to a 150 % of target based on both market (TSR) and performance (ROATCE) conditions. The performance shares will vest at the end of the three-year performance cycle. If a participant terminates employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age and 5 years of service, the performance shares shall continue outstanding and vest at the end of the performance cycle. The following table summarizes the restricted stock and performance shares activity under the Incentive Plan for members of management. 244 (Not in thousands) Shares Weighted-average grant date fair value Non-vested at January 1, 2023 281,963 $ 56.50 Granted 257,757 66.01 Performance Shares Quantity Adjustment 19,753 75.32 Vested ( 243,133 ) 66.31 Forfeited ( 16,444 ) 55.82 Non-vested at December 31, 2023 299,896 $ 58.20 Granted 242,474 86.62 Performance Shares Quantity Adjustment ( 18,650 ) 87.79 Vested ( 267,873 ) 74.26 Forfeited ( 7,939 ) 50.68 Non-vested at December 31, 2024 247,908 $ 66.86 Granted 226,259 100.35 Performance Shares Quantity Adjustment 55,517 91.18 Vested ( 293,939 ) 90.00 Forfeited ( 8,787 ) 66.53 Non-vested at December 31, 2025 226,958 $ 76.13 During the year ended December 31, 2025, 194,599 shares of restricted stock (2024 - 177,249 ; 2023 - 200,303 ) and 31,660 performance shares (2024 - 65,225 ; 2023 - 57,454 ) were awarded to management under the Incentive Plan. During the year ended December 31, 2025, the Corporation recognized $ 18.3 million of restricted stock expense related to management incentive awards, with a tax benefit of $ 2.5 million (2024 - $ 14.0 million, with a tax benefit of $ 2.4 million; 2023 - $ 11.5 million, with a tax benefit of $ 1.9 million). During the year ended December 31, 2025, the fair market value of the restricted stock and performance shares vested was $ 20.4 million at grant date and $ 28.0 million at vesting date. This differential triggers a windfall of $ 2.8 million that was recorded as a reduction in income tax expense. During the year ended December 31, 2025, the Corporation recognized $ 4.3 million of performance shares expense, with a tax benefit of $ 0.4 million (2024 - $ 3.9 million, with a tax benefit of $ 0.3 million; 2023 - $ 3.5 million, with a tax benefit of $ 0.1 million). The total unrecognized compensation cost related to non-vested restricted stock awards and performance shares to members of management at December 31, 2025 was $ 12.4 million and is expected to be recognized over a weighted-average period of 1.58 years. The following table summarizes the restricted stock activity under the Incentive Plan for members of the Board of Directors: (Not in thousands) Units/Stocks Weighted-average grant date fair value Non-vested at January 1, 2023 - - Granted 39,104 $ 55.30 Vested ( 39,104 ) 55.30 Forfeited - - Non-vested at December 31, 2023 - - Granted 25,462 $ 89.51 Vested ( 25,462 ) 89.51 Forfeited - - Non-vested at December 31, 2024 - - Granted 24,476 $ 101.33 Vested ( 5,363 ) 104.33 Forfeited - - Non-vested at December 31, 2025 19,113 100.49 245 The equity awards granted to members of the Board of Directors of Popular, Inc. (the “Directors”) on or after May 2025 will vest and become non-forfeitable on the first anniversary of the grant date of such award. Equity awards granted to the Directors may be paid in either common stock or RSUs at each Director`s election. If RSUs are elected, the Directors may defer the delivery of the shares of common stock underlying the RSUs award until their retirement. To the extent that cash dividends are paid on the Corporation’s outstanding common stock, the Directors will receive an additional number of RSUs that reflect a reinvested dividend equivalent. For 2025, 2024 and 2023, Directors elected RSUs and common stock. For the year ended December 31, 2025, 21,788 RSUs and 2,688 shares of restricted stock were granted to the Directors (2024 - 24,070 RSUs and 1,392 shares of restricted stock; 2023 - 36,804 RSUs and 2,300 shares of restricted stock). For the year ended December 31, 2025, $ 2.0 million of restricted stock expense related to these shares was recognized, with a tax benefit of $ 0.4 million (2024 - $ 2.2 million with a tax benefit of $ 0.4 million; 2023 - $ 2.2 million with a tax benefit of $ 0.4 million). The fair value at vesting date of the RSUs vested during the year ended December 31, 2025 for the Directors was $ 0.6 million. 246 Note 34 – Income taxes The income before income tax and the components of income tax expense disaggregated between domestic (Puerto Rico) and foreign (including Unites States federal and state) for the years ended December 31, 2025, 2024 and 2023 are summarized in the following tables: (In thousands) 2025 2024 2023 Income before income tax Puerto Rico $ 730,740 $ 545,298 $ 468,001 Foreign 276,053 251,320 207,538 Total income before tax $ 1,006,793 $ 796,618 $ 675,539 Current income tax expense: Puerto Rico $ 107,055 $ 107,405 $ 168,001 Foreign 60,197 51,291 9,335 Total current income tax expense $ 167,252 $ 158,696 $ 177,336 Deferred income tax (benefit) expense: Puerto Rico $ ( 7,473 ) $ ( 6,982 ) $ ( 50,871 ) Foreign 13,855 30,692 7,732 Total deferred income tax expense (benefit) $ 6,382 $ 23,710 $ ( 43,139 ) Total income tax expense $ 173,634 $ 182,406 $ 134,197 The following table represents income taxes paid (net of refunds) for the year ended December 31, 2025: (In thousands) 2025 Income Taxes Paid Puerto Rico [1] $ 148,043 Foreign income tax paid United States Federal 40,820 United States - States and Local 15,077 Other Foreign 234 Total foreign income tax paid 56,131 Total income tax paid $ 204,174 [1] Includes $ 141.8 million paid for the purchase of tax credits in Puerto Rico. The tables below present a reconciliation of the statutory income tax rate to the effective income tax rate. The Company uses the Puerto Rico statutory tax rate as the national tax rate, since Popular, Inc. is based in Puerto Rico. 247 2025 (In thousands) Amount % of pre-tax income Computed income tax at Puerto Rico statutory tax rate $ 377,547 37.5 % Foreign Tax Effects United States Statutory Tax Rate difference between United States and Puerto Rico ( 21,337 ) ( 2.1 ) BPPR U.S. Branch Federal and State Taxes 30,789 3.1 State and Local Taxes 14,821 1.5 Other adjustments 1,050 0.1 Other foreign jurisdictions ( 89 ) - Total foreign tax effects 25,234 2.6 Effect of Cross Borders Tax Laws P.R. Tax on Intercompany Distributions ( 980 ) ( 0.1 ) P.R. foreign tax credit ( 30,789 ) ( 3.1 ) Total effect of cross borders tax laws ( 31,769 ) ( 3.2 ) Tax Credits Discount on Tax Credits Purchased ( 8,443 ) ( 0.8 ) Total tax credits ( 8,443 ) ( 0.8 ) Change in Valuation Allowance 11,512 1.1 Non taxable or Non deductible Items Net benefit of tax-exempt interest income ( 152,774 ) ( 15.2 ) International banking entity exempt income ( 36,484 ) ( 3.6 ) Other ( 5,729 ) ( 0.6 ) Total non-taxable or non-deductible items ( 194,987 ) ( 19.4 ) Effect of Other Adjustments ( 5,460 ) ( 0.5 ) Income tax expense $ 173,634 17.3 % 2024 2023 (In thousands) Amount % of pre-tax income Amount % of pre-tax income Computed income tax at statutory states $ 298,732 37.5 % 253,327 37.5 % Net benefit of tax-exempt interest income ( 125,732 ) ( 15.8 ) ( 95,222 ) ( 14.1 ) Effect of income subject to preferential tax rate ( 29 ) - ( 1,854 ) ( 0.3 ) Deferred tax asset valuation allowance 3,390 0.4 2,304 0.3 Difference in tax rates due to multiple jurisdictions ( 17,111 ) ( 2.1 ) ( 12,857 ) ( 1.9 ) Change in tax rates Unrecognized tax benefits - - ( 1,529 ) ( 0.2 ) Other tax benefits ( 4,500 ) ( 0.6 ) ( 2,925 ) ( 0.4 ) Tax on intercompany distributions 24,325 3.1 - - States and local taxes 9,634 1.2 6,687 1.0 Others ( 6,303 ) ( 0.8 ) ( 13,734 ) ( 2.0 ) Income tax expense $ 182,406 22.9 % 134,197 19.9 % 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 2025 and 2024 were as follows: 248 December 31, 2025 (In thousands) PR US Total Deferred tax assets: Tax credits available for carryforward $ 7,318 $ 46,632 $ 53,950 Net operating loss and other carryforward available 59,578 568,156 627,734 Postretirement and pension benefits 29,453 - 29,453 Allowance for credit losses 255,017 28,465 283,482 Deferred loan origination fees/cost 7,205 ( 2,474 ) 4,731 Depreciation 8,422 7,899 16,321 FDIC-assisted transaction 152,665 - 152,665 Lease liability 27,382 17,758 45,140 Unrealized net loss on investment securities 160,809 12,850 173,659 Difference in outside basis from pass-through entities 54,457 - 54,457 Mortgage Servicing Rights 15,375 - 15,375 Other temporary differences 26,347 7,586 33,933 Total gross deferred tax assets 804,028 686,872 1,490,900 Deferred tax liabilities: Intangibles 92,797 55,760 148,557 Right of use assets 24,846 15,875 40,721 Loans acquired 17,053 - 17,053 Other temporary differences 7,082 429 7,511 Total gross deferred tax liabilities 141,778 72,064 213,842 Valuation allowance 78,153 386,587 464,740 Net deferred tax asset $ 584,097 $ 228,221 $ 812,318 December 31, 2024 (In thousands) PR US Total Deferred tax assets: Tax credits available for carryforward $ 4,861 $ 24,728 $ 29,589 Net operating loss and other carryforward available 52,211 610,279 662,490 Postretirement and pension benefits 27,786 - 27,786 Allowance for credit losses 247,153 24,415 271,568 Depreciation 7,700 7,229 14,929 FDIC-assisted transaction 152,665 - 152,665 Lease liability 25,167 16,451 41,618 Unrealized net loss on investment securities 252,411 20,996 273,407 Difference in outside basis from pass-through entities 50,144 - 50,144 Mortgage Servicing Rights 14,475 - 14,475 Other temporary differences 41,127 9,072 50,199 Total gross deferred tax assets 875,700 713,170 1,588,870 Deferred tax liabilities: Intangibles 88,351 55,926 144,277 Right of use assets 22,784 14,454 37,238 Deferred loan origination fees/cost ( 1,880 ) 2,085 205 Loans acquired 18,415 - 18,415 Other temporary differences 6,799 429 7,228 Total gross deferred tax liabilities 134,469 72,894 207,363 Valuation allowance 69,837 386,914 456,751 Net deferred tax asset $ 671,394 $ 253,362 $ 924,756 249 The net deferred tax asset shown in the table above at December 31, 2025, is reflected in the consolidated statements of financial condition as $ 814.2 million in net deferred tax assets (in the “other assets” caption) (December 31, 2024 - $ 926.3 million) and $ 1.9 million in deferred tax liabilities (in the “other liabilities” caption) (December 31, 2024- $ 1.6 million), reflecting the aggregate deferred tax assets or liabilities of individual tax-paying subsidiaries of the Corporation in their respective tax jurisdiction, Puerto Rico or the United States. During the year ended December 31, 2025, the net valuation allowance increased by approximately $ 8.0 million. The deferred tax asset related to the NOLs and other carryforwards as of December 31, 2025, expires as follows: (In thousands) 2027 406 2028 196,569 2029 118,594 2030 127,136 2031 103,555 2032 15,872 2033 21,032 2034 - 2035 44,570 $ 627,734 At December 31, 2025, the net deferred tax asset of the U.S. operations amounted to $ 614.8 million with a valuation allowance of $ 386.6 million, for a net deferred tax asset of $ 228.2 million. The Corporation evaluates the realization of the deferred tax assets by taxing jurisdiction, on a quarterly basis. The U.S. Operations have generated taxable income each of the last three years, with 2025 having the highest taxable income. 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 December 31, 2025, after weighting all positive and negative evidence, the Corporation concluded that it is more likely than not that approximately $ 228.2 million of the deferred tax assets from the U.S. operations, comprised mainly of net operating losses, will be realized. The Corporation based this determination on its estimated 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 December 31, 2025, the Corporation’s net deferred tax assets related to its Puerto Rico operations amounted to $ 662.3 million. The Corporation’s Puerto Rico Banking operation has strong historical record of profitability. This is considered a strong piece of objectively verifiable positive evidence that outweighs any negative evidence considered by Management in the evaluation of the realization of the deferred tax assets. Based on this evidence and Management’s estimate of future taxable income, the Corporation has concluded that it is more likely than not that such net deferred tax assets of the Puerto Rico Banking operations will be realized. The Holding Company operation has been in a cumulative loss position in recent years. Management expects these losses will be a trend in future years. This objectively verifiable negative evidence is considered by Management strong negative evidence that suggests that income in future years will be insufficient to support the realization of all deferred tax assets. After weighting of all positive and negative evidence, Management concluded as of the reporting date, that it is more likely than not that the Holding Company will not be able to realize any portion of the deferred tax assets. Accordingly, the Corporation has maintained a valuation allowance on the deferred tax assets of $ 78.2 million as of December 31, 2025. 250 The Corporation’s subsidiaries in the United States file a consolidated federal income tax return. The intercompany settlement of taxes paid is based on tax sharing agreements which generally allocate taxes to each entity based on a separate return basis. The following table presents a reconciliation of unrecognized tax benefits. (In millions) Balance at January 1, 2024 $ 1.5 Balance at December 31, 2024 $ 1.5 Balance at December 31, 2025 $ 1.5 At December 31, 2025, the total amount of interest recognized in the statement of financial condition approximated $ 2.5 million (2024 - $ 2.4 million). The total interest expense recognized during 2025 was $ 110 thousand (2024 - $ 110 thousand). Management determined that, as of December 31, 2025 and 2024, there was no need to accrue for the payment of penalties. The Corporation’s policy is to report interest related to unrecognized tax benefits in income tax expense, while the penalties, if any, are reported in other operating expenses in the consolidated statements of operations. After consideration of the effect on U.S. federal tax of unrecognized U.S. state tax benefits, the total amount of unrecognized tax benefits, including U.S. and Puerto Rico that, if recognized, would affect the Corporation’s effective tax rate, was approximately $ 3.0 million at December 31, 2025 (2024 - $ 3.0 million). The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to the statute of limitations, changes in management’s judgment about the level of uncertainty, status of examinations, litigation and legislative activity, and the addition or elimination of uncertain tax positions. The Corporation does not anticipate a reduction in the total amount of unrecognized tax benefits within the next 12 months. The Corporation and its subsidiaries file income tax returns in Puerto Rico, the U.S. federal jurisdiction, various U.S. states and political subdivisions, and foreign jurisdictions. As of December 31, 2025, 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. 251 Note 35 – Supplemental disclosure on the consolidated statements of cash flows Additional disclosures on cash flow information and non-cash activities for the years ended December 31, 2025, 2024 and 2023 are listed in the following table: (In thousands) 2025 2024 2023 Income taxes paid $ 204,174 $ 186,659 $ 185,423 Interest paid 1,236,290 1,389,354 1,093,968 Non-cash activities: Loans transferred to other real estate 30,755 43,082 60,976 Loans transferred to other property 87,209 83,851 72,069 Total loans transferred to foreclosed assets 117,964 126,933 133,045 Loans transferred to other assets 47,338 50,478 28,616 Financed sales of other real estate assets 6,059 10,620 10,378 Financed sales of other foreclosed assets 56,384 52,385 49,361 Total financed sales of foreclosed assets 62,443 63,005 59,739 Financed sale of premises and equipment 63,610 127,785 88,537 Transfers from premises and equipment to long-lived assets held-for-sale - 50,645 - Transfers from loans held-in-portfolio to loans held-for-sale 5,740 28,001 57,256 Transfers from loans held-for-sale to loans held-in-portfolio 2,510 6,007 5,354 Loans securitized into investment securities [1] 14,251 15,160 37,345 Trades payable to brokers and counterparties 595,911 495,139 30 Net change in receivables from investments securities 14,670 161,400 51,000 Recognition of mortgage servicing rights on securitizations or asset transfers 1,133 1,364 2,097 Loans booked under the GNMA buy-back option 5,274 3,537 6,014 Capitalization of right of use assets 35,702 5,202 23,991 [1] Includes loans securitized into trading securities and subsequently sold before year end. The following table provides a reconciliation of cash and due from banks, and restricted cash reported within the Consolidated Statement of Financial Condition that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows. (In thousands) December 31, 2025 December 31, 2024 December 31, 2023 Cash and due from banks $ 396,735 $ 411,375 $ 383,385 Restricted cash and due from banks 6,020 8,263 37,077 Restricted cash in money market investments 10,234 9,768 7,113 Total cash and due from banks, and restricted cash [2] $ 412,989 $ 429,406 $ 427,575 [2] Refer to Note 4 - Restrictions on cash and due from banks and certain securities for nature of restrictions. 252 Note 36 – Segment reporting The Corporation’s corporate structure consists of two reportable segments – Banco Popular de Puerto Rico and Popular U.S. Management determined the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. The segments were determined based on the organizational structure, which focuses primarily on the markets the segments serve, as well as on the products and services offered by the segments. The chief operating decision maker (“CODM”) of the Corporation is the Chief Executive Officer (“CEO”) who utilizes net income as one of the segment profitability measures, to evaluate the performance of each reportable segment and assess where to allocate resources effectively. The CEO receives profitability reports that include net income per segment, net interest income and other income and expense categories. The CODM uses the segment’s net income and components of net income, including segment revenues and expenses to assess performance and to manage important aspects by each reportable segments, such as human capital, investment in technology, making budget allocations, as well as other strategic decisions. Banco Popular de Puerto Rico: The Banco Popular de Puerto Rico reportable segment includes commercial, consumer and retail banking operations, as well as mortgage and auto lending operations conducted at BPPR, including U.S. based activities conducted through its New York Branch. Other financial services within the BPPR segment include the trust service units of BPPR, asset management services of Popular Asset Management and the brokerage operations of Popular Securities, and the insurance agency and reinsurance businesses of Popular Insurance, Popular Risk Services, Popular Life Re, and Popular Re. Popular U.S.: Popular U.S. reportable segment consists of the banking operations of Popular Bank (PB), Popular Insurance Agency, U.S.A., and PEF. PB operates through a retail branch network in the U.S. mainland under the name of Popular, and equipment leasing and financing services through PEF. Popular Insurance Agency, U.S.A. offers investment and insurance services across the PB branch network. The Corporate group consists primarily of the holding companies Popular, Inc., Popular North America, Popular International Bank and certain of the Corporation’s investments accounted for under the equity method, including BHD. The accounting policies of the individual operating segments are the same as those of the Corporation. Transactions between reportable segments are primarily conducted at market rates, resulting in profits that are eliminated for reporting consolidated results of operations. Assets representing transactions between reportable segments or the Corporate group are also eliminated in the tables presented below. The tables that follow present the results of operations and total assets by reportable segments: