FULLTEXT DEL 5 AV 6
10-Q – 2025-08-11 – d82325d10q.htm
74 December 31, 2024 Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Amortized Cost Basis by Origination Year (In thousands) 2024 2023 2022 2021 2020 Prior Years Total Popular U.S. Consumer: Credit cards Pass $ - $ - $ - $ - $ - $ - $ 26 $ - $ 26 Total credit cards $ - $ - $ - $ - $ - $ - $ 26 $ - $ 26 HELOCs Pass $ - $ - $ - $ - $ - $ 5,914 $ 50,533 $ 11,691 $ 68,138 Substandard - - - - - 1,657 15 700 2,372 Loss - - - - - 122 - 899 1,021 Total HELOCs $ - $ - $ - $ - $ - $ 7,693 $ 50,548 $ 13,290 $ 71,531 Year-to-Date gross write-offs $ - $ - $ - $ - $ - $ - $ 53 $ - $ 53 Personal Pass $ 28,083 $ 23,084 $ 41,182 $ 8,618 $ 651 $ 1,507 $ - $ - $ 103,125 Substandard 157 399 627 134 7 302 - - 1,626 Loss 53 10 - 5 - 48 - - 116 Total Personal $ 28,293 $ 23,493 $ 41,809 $ 8,757 $ 658 $ 1,857 $ - $ - $ 104,867 Year-to-Date gross write-offs $ 802 $ 4,536 $ 10,869 $ 2,458 $ 231 $ 307 $ - $ - $ 19,203 Other consumer Pass $ - $ - $ - $ - $ - $ - $ 11,537 $ - $ 11,537 Substandard - - - - - - 12 - 12 Total Other consumer $ - $ - $ - $ - $ - $ - $ 11,549 $ - $ 11,549 Year-to-Date gross write-offs $ - $ - $ - $ - $ - $ - $ 101 $ - $ 101 Total Popular U.S. $ 1,271,148 $ 1,743,796 $ 2,211,046 $ 1,506,705 $ 1,040,610 $ 2,726,041 $ 415,995 $ 13,290 $ 10,928,631 75 December 31, 2024 Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Amortized Cost Basis by Origination Year (In thousands) 2024 2023 2022 2021 2020 Prior Years Total Popular, Inc. Commercial: Commercial multi-family Pass $ 189,754 $ 185,634 $ 627,843 $ 334,549 $ 227,461 $ 594,900 $ 5,805 $ - $ 2,165,946 Watch - 10,974 27,982 26,679 10,668 116,020 - - 192,323 Special Mention - - 8,004 - - 3,161 - - 11,165 Substandard - - 2,761 - - 27,425 - - 30,186 Total commercial multi-family $ 189,754 $ 196,608 $ 666,590 $ 361,228 $ 238,129 $ 741,506 $ 5,805 $ - $ 2,399,620 Year-to-Date gross write-offs $ - $ - $ - $ - $ - $ 441 $ - $ - $ 441 Commercial real estate non-owner occupied Pass $ 597,555 $ 691,595 $ 1,308,459 $ 715,513 $ 528,369 $ 981,777 $ 14,747 $ - $ 4,838,015 Watch 26,097 15,228 17,779 18,487 74,696 115,314 372 - 267,973 Special Mention 7,018 41,274 156 406 - 46,984 - - 95,838 Substandard - 1,002 2,767 29,171 7,712 120,757 - - 161,409 Total commercial real estate non- owner occupied $ 630,670 $ 749,099 $ 1,329,161 $ 763,577 $ 610,777 $ 1,264,832 $ 15,119 $ - $ 5,363,235 Year-to-Date gross write-offs $ - $ - $ 69 $ - $ - $ 113 $ - $ - $ 182 Commercial real estate owner occupied Pass $ 436,227 $ 336,695 $ 338,819 $ 493,939 $ 81,665 $ 555,949 $ 14,883 $ - $ 2,258,177 Watch 14,002 28,251 78,266 39,357 21,191 140,457 3 - 321,527 Special Mention - 1,697 88,941 53,716 27,406 26,697 1,499 - 199,956 Substandard 455 1,651 37,629 6,468 144,257 174,571 13,021 - 378,052 Doubtful - - - - - 34 - - 34 Total commercial real estate owner occupied $ 450,684 $ 368,294 $ 543,655 $ 593,480 $ 274,519 $ 897,708 $ 29,406 $ - $ 3,157,746 Year-to-Date gross write-offs $ - $ - $ - $ - $ - $ 2,947 $ - $ - $ 2,947 Commercial and industrial Pass $ 1,050,752 $ 1,186,326 $ 921,018 $ 626,924 $ 334,986 $ 838,466 $ 1,768,712 $ - $ 6,727,184 Watch 124,987 36,355 98,450 34,532 12,986 67,107 150,861 - 525,278 Special Mention 5,577 7,316 7,165 158,195 53 30,615 32,006 - 240,927 Substandard 8,339 30,496 37,558 4,398 14,821 24,745 127,754 - 248,111 Doubtful - - - - - 11 - - 11 Loss - - - - - - 51 - 51 Total commercial and industrial $ 1,189,655 $ 1,260,493 $ 1,064,191 $ 824,049 $ 362,846 $ 960,944 $ 2,079,384 $ - $ 7,741,562 Year-to-Date gross write-offs $ 2,202 $ 2,278 $ 521 $ 422 $ 3,049 $ 12,321 $ 7,740 $ - $ 28,533 76 December 31, 2024 Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Amortized Cost Basis by Origination Year (In thousands) 2024 2023 2022 2021 2020 Prior Years Total Popular, Inc. Construction Pass $ 322,301 $ 565,498 $ 188,691 $ 14,908 $ 9,483 $ 1,776 $ 16,782 $ - $ 1,119,439 Watch - 15,413 36,264 - - 7,172 24,691 - 83,540 Special Mention - 4,897 6,367 6,058 - - - - 17,322 Substandard - - 8,104 576 - 25,473 9,338 - 43,491 Total construction $ 322,301 $ 585,808 $ 239,426 $ 21,542 $ 9,483 $ 34,421 $ 50,811 $ - $ 1,263,792 Mortgage Pass $ 977,420 $ 813,171 $ 624,733 $ 674,021 $ 450,511 $ 4,467,834 $ - $ - $ 8,007,690 Substandard - 2,605 1,437 2,535 347 99,569 - - 106,493 Total mortgage $ 977,420 $ 815,776 $ 626,170 $ 676,556 $ 450,858 $ 4,567,403 $ - $ - $ 8,114,183 Year-to-Date gross write-offs $ - $ 9 $ - $ 8 $ - $ 1,085 $ - $ - $ 1,102 Leasing Pass $ 731,053 $ 477,226 $ 362,426 $ 217,537 $ 104,812 $ 22,762 $ - $ - $ 1,915,816 Substandard 1,195 2,280 2,834 1,885 920 402 - - 9,516 Loss - - - - - 73 - - 73 Total leasing $ 732,248 $ 479,506 $ 365,260 $ 219,422 $ 105,732 $ 23,237 $ - $ - $ 1,925,405 Year-to-Date gross write-offs $ 1,733 $ 4,842 $ 5,373 $ 3,281 $ 694 $ 1,052 $ - $ - $ 16,975 77 December 31, 2024 Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Amortized Cost Basis by Origination Year (In thousands) 2024 2023 2022 2021 2020 Prior Years Total Popular, Inc. Consumer: Credit cards Pass $ - $ - $ - $ - $ - $ - $ 1,188,119 $ - $ 1,188,119 Substandard - - - - - - 29,960 - 29,960 Total credit cards $ - $ - $ - $ - $ - $ - $ 1,218,079 $ - $ 1,218,079 Year-to-Date gross write-offs $ - $ - $ - $ - $ - $ - $ 69,731 $ - $ 69,731 HELOCs Pass $ - $ - $ - $ - $ - $ 5,914 $ 52,573 $ 11,691 $ 70,178 Substandard - - - - - 1,657 15 700 2,372 Loss - - - - - 122 - 899 1,021 Total HELOCs $ - $ - $ - $ - $ - $ 7,693 $ 52,588 $ 13,290 $ 73,571 Year-to-Date gross write-offs $ - $ - $ - $ - $ - $ - $ 433 $ - $ 433 Personal Pass $ 751,032 $ 522,688 $ 303,193 $ 109,773 $ 29,729 $ 92,511 $ - $ 23,802 $ 1,832,728 Substandard 1,081 5,364 4,188 1,355 278 8,507 - 1,626 22,399 Loss 53 10 - 6 - 48 - - 117 Total Personal $ 752,166 $ 528,062 $ 307,381 $ 111,134 $ 30,007 $ 101,066 $ - $ 25,428 $ 1,855,244 Year-to-Date gross write-offs $ 3,164 $ 43,729 $ 48,946 $ 13,280 $ 2,939 $ 3,832 $ - $ 1,982 $ 117,872 Auto Pass $ 1,277,016 $ 938,769 $ 665,431 $ 494,529 $ 254,621 $ 133,054 $ - $ - $ 3,763,420 Substandard 7,239 16,876 13,579 10,775 6,377 5,131 - - 59,977 Loss 14 15 - 2 - 9 - - 40 Total Auto $ 1,284,269 $ 955,660 $ 679,010 $ 505,306 $ 260,998 $ 138,194 $ - $ - $ 3,823,437 Year-to-Date gross write-offs $ 11,229 $ 36,992 $ 20,486 $ 9,997 $ 4,965 $ 1,731 $ - $ - $ 85,400 Other consumer Pass $ 28,543 $ 29,585 $ 20,021 $ 10,129 $ 4,588 $ 3,364 $ 74,215 $ - $ 170,445 Substandard - 228 44 - 29 57 425 - 783 Loss - - - 550 - - - - 550 Total Other consumer $ 28,543 $ 29,813 $ 20,065 $ 10,679 $ 4,617 $ 3,421 $ 74,640 $ - $ 171,778 Year-to-Date gross write-offs $ 29 $ 213 $ 130 $ 96 $ 128 $ 2,205 $ 101 $ - $ 2,902 Total Popular Inc. $ 6,557,710 $ 5,969,119 $ 5,840,909 $ 4,086,973 $ 2,347,966 $ 8,740,425 $ 3,525,832 $ 38,718 $ 37,107,652 78 Note 9 – Mortgage banking activities Income from mortgage banking activities includes mortgage servicing fees earned in connection with administering residential mortgage loans and valuation adjustments on mortgage servicing rights. It also includes gain on sales and securitizations of residential mortgage loans, losses on repurchased loans, including interest advances, and trading gains and losses on derivative contracts used to hedge the Corporation’s securitization activities. In addition, fair value valuation adjustments to residential mortgage loans held for sale, if any, are recorded as part of the mortgage banking activities. The following table presents the components of mortgage banking activities: Quarters ended June 30, Six months ended June 30, (In thousands) 2025 2024 2025 2024 Mortgage servicing fees, net of fair value adjustments: Mortgage servicing fees $ 6,912 $ 7,602 $ 14,080 $ 15,353 Mortgage servicing rights fair value adjustments ( 1,954 ) ( 1,945 ) ( 5,524 ) ( 5,384 ) Total mortgage servicing fees, net of fair value adjustments 4,958 5,657 8,556 9,969 Net (loss) gain on sale of loans, including valuation on loans held-for-sale ( 37 ) 2 156 76 Trading account (loss) profit: Unrealized (losses) gains on outstanding derivative positions ( 8 ) 56 ( 95 ) 157 Realized (losses) gains on closed derivative positions ( 10 ) 9 ( 9 ) 12 Total trading account (loss) profit ( 18 ) 65 ( 104 ) 169 Losses on repurchased loans, including interest advances ( 31 ) ( 1 ) ( 47 ) ( 131 ) Total mortgage banking activities $ 4,872 $ 5,723 $ 8,561 $ 10,083 79 Note 10 – Transfers of financial assets and mortgage servicing assets The Corporation typically transfers conforming residential mortgage loans in conjunction with GNMA, FNMA and FHLMC securitization transactions whereby the loans are exchanged for cash or securities and servicing rights. As seller, the Corporation has made certain representations and warranties with respect to the originally transferred loans and, in the past, has sold certain loans with credit recourse to a government-sponsored entity, namely FNMA. Refer to Note 19 to the Consolidated Financial Statements for a description of such arrangements. No liabilities were incurred as a result of these securitizations during the quarters and six months ended June 30, 2025 and 2024 because they did not contain any credit recourse arrangements. The following tables present the initial fair value of the assets obtained as proceeds from residential mortgage loans securitized during the quarters and six months ended June 30, 2025 and 2024: Proceeds Obtained During the Quarter Ended June 30, 2025 (In thousands) Level 1 Level 2 Level 3 Initial Fair Value Assets Trading account debt securities: Mortgage-backed securities - GNMA $ - $ 2,581 $ - $ 2,581 Mortgage-backed securities - FNMA - 2,553 - 2,553 Total trading account debt securities $ - $ 5,134 $ - $ 5,134 Mortgage servicing rights $ - $ - $ 92 $ 92 Total $ - $ 5,134 $ 92 $ 5,226 Proceeds Obtained During the Six months Ended June 30, 2025 (In thousands) Level 1 Level 2 Level 3 Initial Fair Value Assets Trading account debt securities: Mortgage-backed securities - GNMA $ - $ 2,581 $ - $ 2,581 Mortgage-backed securities - FNMA - 4,271 - 4,271 Total trading account debt securities $ - $ 6,852 $ - $ 6,852 Mortgage servicing rights $ - $ - $ 135 $ 135 Total $ - $ 6,852 $ 135 $ 6,987 Proceeds Obtained During the Quarter Ended June 30, 2024 (In thousands) Level 1 Level 2 Level 3 Initial Fair Value Assets Trading account debt securities: Mortgage-backed securities - FNMA $ - $ 2,601 $ - $ 2,601 Total trading account debt securities $ - $ 2,601 $ - $ 2,601 Mortgage servicing rights $ - $ - $ 72 $ 72 Total $ - $ 2,601 $ 72 $ 2,673 80 Proceeds Obtained During the Six months Ended June 30, 2024 (In thousands) Level 1 Level 2 Level 3 Initial Fair Value Assets Trading account debt securities: Mortgage-backed securities - GNMA $ - $ 1,100 $ - $ 1,100 Mortgage-backed securities - FNMA - 3,706 - 3,706 Total trading account debt securities $ - $ 4,806 $ - $ 4,806 Mortgage servicing rights $ - $ - $ 117 $ 117 Total $ - $ 4,806 $ 117 $ 4,923 During the six months ended June 30, 2025, the Corporation retained servicing rights on whole loan sales involving $ 15 million in principal balance outstanding (June 30, 2024 - $ 23 million), with net realized gains of $ 0.4 million (June 30, 2024 - gains of $ 0.5 million). All loan sales performed during the six months ended June 30, 2025 and 2024 were without credit recourse agreements. The Corporation recognizes as assets the rights to service loans for others, whether these rights are purchased or result from asset transfers such as sales and securitizations. These mortgage servicing rights (“MSRs”) are measured at fair value. The Corporation uses a discounted cash flow model to estimate the fair value of MSRs. The discounted cash flow model incorporates assumptions that market participants would use in estimating future net servicing income, including estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, prepayment and late fees, among other considerations. Prepayment speeds are adjusted for the loans’ characteristics and portfolio behavior. The following table presents the changes in MSRs measured using the fair value method for the six months ended June 30, 2025 and 2024. 81 Residential MSRs (In thousands) June 30, 2025 June 30, 2024 Fair value at beginning of period $ 108,103 $ 118,109 Additions 498 661 Changes due to payments on loans [1] ( 4,326 ) ( 4,435 ) Reduction due to loan repurchases ( 221 ) ( 247 ) Changes in fair value due to changes in valuation model inputs or assumptions ( 977 ) ( 702 ) Fair value at end of period [2] $ 103,077 $ 113,386 [1] Represents changes due to collection / realization of expected cash flows over time. [2] At June 30, 2025, PB had MSRs amounting to $ 1.8 million (June 30, 2024 - $ 1.9 million). Residential mortgage loans serviced for others were $ 8.6 billion at June 30, 2025 (December 31, 2024 -$ 9.0 billion). Net mortgage servicing fees, a component of mortgage banking activities in the Consolidated Statements of Operations, include the changes from period to period in the fair value of the MSRs, including changes due to collection / realization of expected cash flows. The banking subsidiaries receive servicing fees based on a percentage of the outstanding loan balance. These servicing fees are credited to income when they are collected. At June 30, 2025, those weighted average mortgage servicing fees were 0.32 % (June 30, 2024 - 0.32 %). Under these servicing agreements, the banking subsidiaries do not generally earn significant prepayment penalty fees on the underlying loans serviced. The section below includes information on assumptions used in the valuation model of the MSRs, originated and purchased. Key economic assumptions used in measuring the servicing rights derived from loans securitized or sold by the Corporation during the quarters and six months ended June 30, 2025 and 2024 were as follows: Quarters ended Six months ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 BPPR PB BPPR PB BPPR PB BPPR PB Prepayment speed 5.9 % 5.8 % 6.9 % 6.3 % 6.8 % 6.0 % 6.4 % 6.2 % Weighted average life (in years) 10.4 8.8 9.2 8.6 9.8 8.8 9.4 8.7 Discount rate (annual rate) 9.5 % 12.9 % 9.8 % 12.9 % 9.7 % 12.9 % 9.6 % 12.7 % Key economic assumptions used to estimate the fair value of MSRs derived from sales and securitizations of mortgage loans performed by the banking subsidiaries and servicing rights purchased from other financial institutions, and the sensitivity to immediate changes in those assumptions, were as follows as of the end of the periods reported: 82 Originated MSRs Purchased MSRs June 30, December 31, June 30, December 31, (In thousands) 2025 2024 2025 2024 Fair value of servicing rights $ 33,734 $ 34,019 $ 69,343 $ 74,084 Weighted average life (in years) 6.4 6.4 6.6 6.6 Weighted average prepayment speed (annual rate) 5.6 % 5.8 % 6.9 % 6.9 % Impact on fair value of 10% adverse change $ ( 658 ) $ ( 667 ) $ ( 1,346 ) $ ( 1,448 ) Impact on fair value of 20% adverse change $ ( 1,289 ) $ ( 1,308 ) $ ( 2,641 ) $ ( 2,840 ) Weighted average discount rate (annual rate) 11.3 % 11.4 % 10.9 % 10.8 % Impact on fair value of 10% adverse change $ ( 1,245 ) $ ( 1,267 ) $ ( 2,496 ) $ ( 2,689 ) Impact on fair value of 20% adverse change $ ( 2,410 ) $ ( 2,451 ) $ ( 4,837 ) $ ( 5,211 ) The sensitivity analyses presented in the table above for servicing rights are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on a 10 and 20 percent variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in the sensitivity tables included herein the effect of a variation in a particular assumption on the fair value of the retained interest is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments and increased credit losses), which might magnify or counteract the sensitivity. At June 30, 2025, the Corporation serviced $ 460 million in residential mortgage loans with credit recourse to the Corporation (December 31, 2024 - $ 495 million). Also refer to Note 19 to the Consolidated Financial Statements for information on changes in the Corporation’s liability of estimated losses related to loans serviced with credit recourse. During the six months ended June 30, 2025, the Corporation repurchased $ 17 million (June 30, 2024 - $ 18 million) of mortgage loans from its GNMA servicing portfolio. The determination to repurchase these loans was based on the economic benefits of the transaction, which results in a reduction of the servicing costs for these severely delinquent loans, mainly related to principal and interest advances. The risk associated with the loans is reduced due to their guaranteed nature. The Corporation may place these loans under modification programs offered by FHA, VA or United States Department of Agriculture (USDA) or other loss mitigation programs offered by the Corporation, and once brought back to current status, these may be either retained in portfolio or re-sold in the secondary market. 83 Note 11 – Other real estate owned The following tables present the activity related to Other Real Estate Owned (“OREO”), for the quarters and six months ended June 30, 2025 and 2024. For the quarter ended June 30, 2025 OREO OREO (In thousands) Commercial/Construction Mortgage Total Balance at beginning of period $ 7,111 $ 45,003 $ 52,114 Write-downs in value ( 835 ) ( 516 ) ( 1,351 ) Additions 314 7,908 8,222 Sales ( 693 ) ( 12,145 ) ( 12,838 ) Other adjustments - ( 21 ) ( 21 ) Ending balance $ 5,897 $ 40,229 $ 46,126 For the quarter ended June 30, 2024 OREO OREO (In thousands) Commercial/Construction Mortgage Total Balance at beginning of period $ 15,962 $ 64,580 $ 80,542 Write-downs in value ( 1,039 ) ( 427 ) ( 1,466 ) Additions 516 12,146 12,662 Sales ( 6,011 ) ( 15,502 ) ( 21,513 ) Ending balance $ 9,428 $ 60,797 $ 70,225 For the six months ended June 30, 2025 OREO OREO (In thousands) Commercial/Construction Mortgage Total Balance at beginning of period $ 8,424 $ 48,844 $ 57,268 Write-downs in value ( 864 ) ( 1,715 ) ( 2,579 ) Additions 571 16,697 17,268 Sales ( 2,234 ) ( 23,374 ) ( 25,608 ) Other adjustments - ( 223 ) ( 223 ) Ending balance $ 5,897 $ 40,229 $ 46,126 For the six months ended June 30, 2024 OREO OREO (In thousands) Commercial/Construction Mortgage Total Balance at beginning of period $ 11,189 $ 69,227 $ 80,416 Write-downs in value ( 1,064 ) ( 711 ) ( 1,775 ) Additions 5,860 24,782 30,642 Sales ( 6,557 ) ( 32,436 ) ( 38,993 ) Other adjustments - ( 65 ) ( 65 ) Ending balance $ 9,428 $ 60,797 $ 70,225 84 Note 12 − Other assets The caption of other assets in the Consolidated Statements of Financial Condition consists of the following major categories: (In thousands) June 30, 2025 December 31, 2024 Net deferred tax assets (net of valuation allowance) $ 862,089 $ 926,329 Investments under the equity method 244,510 251,537 Prepaid taxes 63,677 42,909 Other prepaid expenses 31,982 28,376 Capitalized software costs 169,583 136,442 Derivative assets 24,792 25,975 Trades receivable from brokers and counterparties 880 588 Receivables from investments maturities - 14,600 Principal, interest and escrow servicing advances 35,818 43,793 Guaranteed mortgage loan claims receivable 13,084 17,226 Operating ROU assets (Note 27) 89,253 93,389 Finance ROU assets (Note 27) 17,685 19,174 Assets for pension benefit 34,503 33,233 Others 157,196 164,188 Total other assets $ 1,745,052 $ 1,797,759 The Corporation regularly incurs in capitalizable costs associated with software development or licensing which are recorded within the Other Assets line item in the accompanying Consolidated Statements of Financial Condition. In addition, the Corporation incurs costs associated with hosting arrangements that are service contracts that are also recorded within Other Assets. The hosting arrangements can include capitalizable implementation costs that are amortized during the term of the hosting arrangement. The following table summarizes the composition of acquired or developed software costs as well as costs related to hosting arrangements: Gross Carrying Accumulated Net Carrying (In thousands) Amount Amortization Value June 30, 2025 Software development costs $ 83,809 $ 29,575 $ 54,234 Software license costs 52,630 26,924 25,706 Cloud computing arrangements 98,766 9,123 89,643 Total Capitalized software costs [1] [2] $ 235,205 $ 65,622 $ 169,583 December 31, 2024 Software development costs $ 79,233 $ 23,057 $ 56,176 Software license costs 42,234 21,459 20,775 Cloud computing arrangements 65,797 6,306 59,491 Total Capitalized software costs [1] [2] $ 187,264 $ 50,822 $ 136,442 [1] Software intangible assets are presented as part of Other Assets in the Consolidated Statements of Financial Condition. [2] The tables above exclude assets that have been fully amortized. Total amortization expense for all capitalized software and hosting arrangement cost, reflected as part of technology and software expenses in the consolidated statement of operations, is as follows: 85 Quarters ended June 30, Six months ended June 30, (In thousands) 2025 2024 2025 2024 Software development and license costs $ 22,254 $ 18,612 $ 43,982 $ 36,313 Cloud computing arrangements 1,462 666 2,828 1,538 Total amortization expense $ 23,716 $ 19,278 $ 46,810 $ 37,851 86 Note 13 – Goodwill and other intangible assets Goodwill There were no changes in the carrying amount of goodwill for the quarters and six months ended June 30, 2025 and 2024. The following tables present the gross amount of goodwill and accumulated impairment losses by reportable segment: June 30, 2025 Balance at Balance at June 30, Accumulated June 30, 2025 impairment 2025 (In thousands) (gross amounts) losses (net amounts) Banco Popular de Puerto Rico $ 438,710 $ 3,801 $ 434,909 Popular U.S. 564,456 196,411 368,045 Total Popular, Inc. $ 1,003,166 $ 200,212 $ 802,954 December 31, 2024 Balance at Balance at December 31, Accumulated December 31, 2024 impairment 2024 (In thousands) (gross amounts) losses (net amounts) Banco Popular de Puerto Rico $ 438,710 $ 3,801 $ 434,909 Popular U.S. 564,456 196,411 368,045 Total Popular, Inc. $ 1,003,166 $ 200,212 $ 802,954 Other Intangible Assets The following table reflects the components of other intangible assets subject to amortization: Gross Carrying Accumulated Net Carrying (In thousands) Amount Amortization Value June 30, 2025 Core deposits $ 12,810 $ 12,810 $ - Other customer relationships 14,286 9,202 5,084 Total other intangible assets $ 27,096 $ 22,012 $ 5,084 December 31, 2024 Core deposits $ 12,810 $ 12,595 $ 215 Other customer relationships 14,286 8,435 5,851 Total other intangible assets $ 27,096 $ 21,030 $ 6,066 During the quarter ended June 30, 2025, the Corporation recognized $ 0.4 million in amortization expense related to other intangible assets with definite useful lives (June 30, 2024 - $ 0.7 million). During the six months ended June 30, 2025, the Corporation recognized $ 1.0 million in amortization related to other intangible assets with definite useful lives (June 30, 2024 - $ 1.5 million). The following table presents the estimated amortization of the intangible assets with definite useful lives for each of the following periods: 87 (In thousands) Remaining 2025 $ 768 Year 2026 1,440 Year 2027 959 Year 2028 959 Year 2029 958 88 Note 14 – Deposits Total deposits as of the end of the periods presented consisted of: (In thousands) June 30, 2025 December 31, 2024 Savings accounts $ 14,337,808 $ 14,224,271 NOW, money market and other interest -bearing demand deposits 28,166,283 26,507,637 Total savings, NOW, money market and other interest-bearing demand deposits 42,504,091 40,731,908 Certificates of deposit: Under $250,000 5,580,334 5,383,331 $250,000 and over 4,018,452 3,629,551 Total certificates of deposit 9,598,786 9,012,882 Total interest-bearing deposits $ 52,102,877 $ 49,744,790 Non- interest-bearing deposits $ 15,114,614 $ 15,139,555 Total deposits $ 67,217,491 $ 64,884,345 A summary of certificates of deposits by maturity at June 30, 2025 follows: (In thousands) 2025 $ 4,645,684 2026 2,633,316 2027 823,872 2028 666,327 2029 446,123 2030 and thereafter 383,464 Total certificates of deposit $ 9,598,786 At June 30, 2025, the Corporation had brokered deposits amounting to $ 1.7 billion (December 31, 2024 - $ 1.6 billion). The aggregate amount of overdrafts in demand deposit accounts that were reclassified to loans was $ 6.4 million at June 30, 2025 (December 31, 2024 - $ 10.4 million). At June 30, 2025, Puerto Rico government deposits amounted to $ 20.9 billion. Puerto Rico government deposits are interest bearing accounts, which are indexed to short-term market rates and fluctuate in cost with changes in those rates, in accordance with contractual terms. 89 Note 15 – Borrowings Assets sold under agreements to repurchase Assets sold under agreements to repurchase amounted to $ 56 million at June 30, 2025 and $ 55 million at December 31, 2024. The Corporation’s repurchase transactions are overcollateralized with the securities detailed in the table below. The Corporation’s repurchase agreements have a right of set-off with the respective counterparty under the supplemental terms of the master repurchase agreements. In an event of default, each party has a right of set-off against the other party for amounts owed in the related agreement and any other amount or obligation owed in respect of any other agreement or transaction between them. Pursuant to the Corporation’s accounting policy, the repurchase agreements are not offset with other repurchase agreements held with the same counterparty. The following table presents information related to the Corporation’s repurchase transactions accounted for as secured borrowings that are collateralized with debt securities available-for-sale, debt securities held-to-maturity, and other assets held-for-trading purposes or which have been obtained under agreements to resell. It is the Corporation’s policy to maintain effective control over assets sold under agreements to repurchase; accordingly, such securities continue to be carried on the Consolidated Statements of Financial Condition. Repurchase agreements accounted for as secured borrowings June 30, 2025 December 31, 2024 Repurchase Repurchase (In thousands) liability liability U.S. Treasury securities Within 30 days $ 27,789 $ 22,591 After 30 to 90 days 23,781 13,813 Total U.S. Treasury securities 51,570 36,404 Mortgage-backed securities Within 30 days 4,473 4,924 After 30 to 90 days - 13,505 Total mortgage-backed securities 4,473 18,429 Total $ 56,043 $ 54,833 Repurchase agreements in this portfolio are generally short-term, often overnight. As such our risk is very limited. We manage the liquidity risks arising from secured funding by sourcing funding globally from a diverse group of counterparties, providing a range of securities collateral and pursuing longer durations, when appropriate. Other short-term borrowings At June 30, 2025 and December 31, 2024, other short-term borrowings consisted of $ 550 million and $ 225 million, respectively, in FHLB Advances. 90 Notes Payable The following table presents the composition of notes payable at June 30, 2025 and December 31, 2024. (In thousands) June 30, 2025 December 31, 2024 Advances with the FHLB with maturities ranging from 2025 through 2029 paying interest at monthly fixed rates ranging from 0.57 % to 4.17 % $ 214,200 $ 302,722 Unsecured senior debt securities maturing on 2028 paying interest semi-annually at a fixed rate of 7.25 %, net of debt issuance costs of $ 4,135 395,865 395,198 Junior subordinated deferrable interest debentures (related to trust preferred securities) maturing on 2034 with fixed interest rates ranging from 6.125 % to 6.564 %, net of debt issuance costs of $ 248 198,386 198,373 Total notes payable $ 808,451 $ 896,293 Note: Refer to the 2024 Form 10-K for rates information at December 31, 2024. A breakdown of borrowings by contractual maturities at June 30, 2025 is included in the table below. Assets sold under Short-term (In thousands) agreements to repurchase borrowings Notes payable Total 2025 $ 56,043 $ 550,000 $ 55,692 $ 661,735 2026 - - 74,500 74,500 2028 - - 440,215 440,215 2029 - - 39,658 39,658 Later years - - 198,386 198,386 Total borrowings $ 56,043 $ 550,000 $ 808,451 $ 1,414,494 At June 30, 2025 and December 31, 2024, the Corporation had FHLB borrowing facilities whereby the Corporation could borrow up to $ 4.8 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 June 30, 2025, the Corporation had borrowing facilities at the discount window of the Federal Reserve Bank of New York amounting to $ 10.8 billion (December 31, 2024 - $ 7.0 billion), which remained unused at June 30, 2025 and December 31, 2024. The facilities are a collateralized source of credit that is highly dependable even under difficult market conditions. 91 Note 16 − Other liabilities The caption of other liabilities in the Consolidated Statements of Financial Condition consists of the following major categories: (In thousands) June 30, 2025 December 31, 2024 Accrued expenses $ 333,826 $ 334,145 Accrued interest payable 63,307 60,723 Accounts payable 100,842 91,218 Dividends payable 47,826 49,546 Trades payable 593,949 495,139 Liability for GNMA loans sold with an option to repurchase 8,097 9,108 Reserves for loan indemnifications 2,331 2,779 Reserve for operational losses 28,699 29,465 Operating lease liabilities (Note 27) 98,575 103,198 Finance lease liabilities (Note 27) 21,316 23,141 Pension benefit obligation 5,684 5,816 Postretirement benefit obligation 98,219 99,172 Others 76,416 68,396 Total other liabilities $ 1,479,087 $ 1,371,846 92 Note 17 – Stockholders’ equity As of June 30, 2025, stockholders’ equity totaled $ 6.0 billion. During the six months ended June 30, 2025, the Corporation declared cash dividends of $ 1.40 (2024 - $ 1.24 ) per common share amounting to $ 96.2 million (2024 - $ 89.7 million). The quarterly dividend of $ 0.70 per share declared to stockholders of record as of the close of business on May 29, 2025 was paid on July 1, 2025 . During the quarter ended June 30, 2025, the Corporation completed the repurchase of 1,136,390 shares of common stock for $ 112.0 million at an average price of $ 98.54 per share. As of June 30, 2025, a total of $ 451.5 million has been repurchased under the common stock repurchase program of up to $ 500 million announced by the Corporation on July 24, 2024. On July 16, 2025, the Corporation announced the following actions as part of its capital plan: (i) an increase in its quarterly common stock dividend from $ 0.70 per share to $ 0.75 per share, beginning with the dividend payable in the fourth quarter of 2025, subject to approval by its Board of Directors, and (ii) a new common stock repurchase program of up to $ 500 million. 93 Note 18 – Other comprehensive income The following table presents changes in accumulated other comprehensive income by component for the quarters and six months ended June 30, 2025 and 2024. Changes in Accumulated Other Comprehensive Loss by Component [1] Quarters ended Six months ended June 30, June 30, (In thousands) 2025 2024 2025 2024 Foreign currency translation Beginning Balance $ ( 78,011 ) $ ( 68,548 ) $ ( 71,365 ) $ ( 64,528 ) Other comprehensive income (loss) 7,499 165 854 ( 3,855 ) Net change 7,499 165 854 ( 3,855 ) Ending balance $ ( 70,512 ) $ ( 68,383 ) $ ( 70,511 ) $ ( 68,383 ) Adjustment of pension and postretirement benefit plans Beginning Balance $ ( 93,271 ) $ ( 115,632 ) $ ( 94,692 ) $ ( 117,894 ) Amounts reclassified from accumulated other comprehensive loss for amortization of net losses 1,420 2,261 2,841 4,522 Net change 1,420 2,261 2,841 4,522 Ending balance $ ( 91,851 ) $ ( 113,371 ) $ ( 91,851 ) $ ( 113,372 ) Unrealized net holding losses on debt securities Beginning Balance $ ( 1,318,705 ) $ ( 1,749,006 ) $ ( 1,495,183 ) $ ( 1,713,109 ) Other comprehensive income (loss) 48,417 16,941 188,646 ( 54,163 ) Amounts reclassified from accumulated other comprehensive loss for amortization of net unrealized losses of debt securities transferred from available-for- sale to held-to-maturity 36,994 35,537 73,242 70,745 Net change 85,411 52,478 261,888 16,582 Ending balance $ ( 1,233,294 ) $ ( 1,696,528 ) $ ( 1,233,295 ) $ ( 1,696,527 ) Total $ ( 1,395,657 ) $ ( 1,878,282 ) $ ( 1,395,657 ) $ ( 1,878,282 ) [1] All amounts presented are net of tax. 94 The following table presents the amounts reclassified out of each component of accumulated other comprehensive income during the quarters and six months ended June 30, 2025 and 2024. Reclassifications Out of Accumulated Other Comprehensive Loss Quarters ended Six months ended Affected Line Item in the June 30, June 30, (In thousands) Consolidated Statements of Operations 2025 2024 2025 2024 Adjustment of pension and postretirement benefit plans Amortization of net losses Other operating expenses $ ( 2,272 ) $ ( 3,618 ) $ ( 4,545 ) $ ( 7,236 ) Total before tax ( 2,272 ) ( 3,618 ) ( 4,545 ) ( 7,236 ) Income tax benefit 852 1,357 1,704 2,714 Total net of tax $ ( 1,420 ) $ ( 2,261 ) $ ( 2,841 ) $ ( 4,522 ) Unrealized net holding losses on debt securities Amortization of unrealized net losses of debt securities transferred to held-to-maturity Interest income from investment securities $ ( 46,242 ) $ ( 44,421 ) $ ( 91,552 ) $ ( 88,430 ) Total before tax ( 46,242 ) ( 44,421 ) ( 91,552 ) ( 88,430 ) Income tax expense 9,248 8,884 18,310 17,685 Total net of tax $ ( 36,994 ) $ ( 35,537 ) $ ( 73,242 ) $ ( 70,745 ) Total reclassification adjustments, net of tax $ ( 38,414 ) $ ( 37,798 ) $ ( 76,083 ) $ ( 75,267 ) 95 Note 19 – Guarantees The Corporation has obligations upon the occurrence of certain events under financial guarantees provided in certain contractual agreements. Also, from time to time, the Corporation securitized mortgage loans into guaranteed mortgage-backed securities subject in certain instances, to lifetime credit recourse on the loans that serve as collateral for the mortgage-backed securities. The Corporation has not sold any mortgage loans subject to credit recourse since 2009. Also, from time to time, the Corporation may sell, in bulk sale transactions, residential mortgage loans and Small Business Administration (“SBA”) commercial loans subject to credit recourse or to certain representations and warranties from the Corporation to the purchaser. These representations and warranties may relate, for example, to borrower creditworthiness, loan documentation, collateral, prepayment and early payment defaults. The Corporation may be required to repurchase the loans under the credit recourse agreements or representation and warranties At June 30, 2025, the Corporation serviced $ 460 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 loss incurred. The maximum potential amount of future payments that the Corporation would be required to make under the recourse arrangements in the event of nonperformance by the borrowers is equivalent to the total outstanding balance of the residential mortgage loans serviced with recourse and interest, if applicable. During the quarter and six months ended June 30, 2025, the Corporation repurchased $ 0.5 million and $ 0.8 million, respectively, of unpaid principal balance in mortgage loans subject to the credit recourse provisions (June 30, 2024 - $ 0.5 million and $ 1.1 million, respectively). In the event of nonperformance by the borrower, the Corporation has rights to the underlying collateral securing the mortgage loan. The Corporation suffers ultimate losses on these loans when the proceeds from a foreclosure sale of the property underlying a defaulted mortgage loan are less than the outstanding principal balance of the loan plus any uncollected interest advanced and the costs of holding and disposing the related property. At June 30, 2025, the Corporation’s liability established to cover the estimated credit loss exposure related to loans sold or serviced with credit recourse amounted to $ 2 million (December 31, 2024 - $ 3 million). The following table shows the changes in the Corporation’s liability of estimated losses related to loans serviced with credit recourse provisions during the quarters and six months ended June 30, 2025 and 2024. Quarters ended June 30, Six months ended June 30, (In thousands) 2025 2024 2025 2024 Balance as of beginning of period $ 2,397 $ 4,353 $ 2,611 $ 4,211 Provision (benefit) for recourse liability ( 205 ) ( 204 ) ( 375 ) 40 Net charge-offs ( 21 ) ( 91 ) ( 65 ) ( 193 ) Balance as of end of period $ 2,171 $ 4,058 $ 2,171 $ 4,058 From time to time, the Corporation sells loans and agrees to indemnify the purchaser for credit losses or any breach of certain representations and warranties made in connection with the sale. Servicing agreements relating to the mortgage-backed securities programs of FNMA, FHLMC and GNMA, and to mortgage loans sold or serviced to certain other investors, including FHLMC, require the Corporation to advance funds to make scheduled payments of principal, interest, taxes and insurance, if such payments have not been received from the borrowers. At June 30, 2025, the Corporation serviced $ 8.6 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 June 30, 2025, the outstanding balance of funds advanced by the Corporation under such mortgage loan servicing agreements was $ 36 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. 96 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 June 30, 2025 and December 31, 2024, respectively. In addition, at both June 30, 2025 and December 31, 2024, PIHC fully and unconditionally guaranteed on a subordinated basis $ 193 million of capital securities (trust preferred securities) issued by wholly-owned issuing trust entities to the extent set forth in the applicable guarantee agreement. Refer to Note 17 to the Consolidated Financial Statements in the 2024 Form 10-K for further information on the trust preferred securities. 97 Note 20 – Commitments and contingencies Off-balance sheet risk The Corporation is a party to financial instruments with off-balance sheet credit risk in the normal course of business to meet the financial needs of its customers. These financial instruments include loan commitments, letters of credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Statements of Financial Condition. The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, standby letters of credit and financial guarantees is represented by the contractual notional amounts of those instruments. The Corporation uses the same credit policies in making these commitments and conditional obligations as it does for those reflected on the Consolidated Statements of Financial Condition. Financial instruments with off-balance sheet credit risk, whose contract amounts represent potential credit risk as of the end of the periods presented were as follows: (In thousands) June 30, 2025 December 31, 2024 Commitments to extend credit: Credit card lines $ 6,201,145 $ 5,599,823 Commercial lines of credit 4,271,702 3,971,331 Construction lines of credit 1,114,750 1,131,824 Other consumer unused credit commitments 271,638 260,121 Commercial letters of credit 10,284 5,002 Standby letters of credit 124,831 144,845 Commitments to originate or fund mortgage loans 17,556 29,604 At June 30, 2025 and December 31, 2024, the Corporation maintained a reserve of $ 13 million and $ 15 million, respectively, for potential losses associated with unfunded loan commitments related to commercial and construction lines of credit. Other commitments At June 30, 2025 and December 31, 2024, the Corporation also maintained other non-credit commitments for $ 2 million, primarily for the acquisition of other investments. Business concentration Since the Corporation’s business activities are concentrated primarily in Puerto Rico, its results of operations and financial condition are dependent upon the general trends of the Puerto Rico economy and, in particular, the residential and commercial real estate markets. The concentration of the Corporation’s operations in Puerto Rico exposes it to greater risk than other banking companies with a wider geographic base. Its asset and revenue composition by geographical area is presented in Note 32 to the Consolidated Financial Statements. Puerto Rico has faced significant fiscal and economic challenges for over a decade. In response to such challenges, the U.S. Congress enacted PROMESA in 2016, which, among other things, established the Oversight Board and a framework for the restructuring of the debts of the Commonwealth, its instrumentalities and municipalities. The Commonwealth and several of its instrumentalities have availed themselves of debt restructuring proceedings under PROMESA. As of the date of this report, while municipalities have been designated as covered entities under PROMESA, no municipality has commenced or has been authorized by the Oversight Board to commence, any such debt restructuring proceeding under PROMESA. At June 30, 2025, the Corporation’s direct exposure to the Puerto Rico government and its instrumentalities and municipalities totaled $ 412 million, of which $ 362 million were outstanding ($ 336 million and $ 336 million at December 31, 2024). The Corporation’s exposure at June 30, 2025 included up to $ 47.4 million in Automated Clearing House (“ACH”) transaction settlement exposure, none of which was outstanding. Of the amount outstanding, $ 351 million consists of loans and $ 11 million are securities ($ 323 million and $ 13 million at December 31, 2024). Substantially all of the amount outstanding at June 30, 2025 and December 31, 2024 were obligations from various Puerto Rico municipalities. In most cases, these were “general obligations” of a municipality, to which the applicable municipality has pledged its good faith, credit and unlimited taxing power, or “special obligations” of a municipality, to which the applicable municipality has pledged other revenues. At June 30, 2025, approximately 81 % of the 98 Corporation’s exposure to municipal loans and securities was concentrated in the municipalities of San Juan, Guaynabo, Carolina and Caguas. The following table details the loans and investments representing the Corporation’s direct exposure to the Puerto Rico government according to their maturities as of June 30, 2025 : (In thousands) Investment Portfolio Loans Total Outstanding Total Exposure Central Government Within 1 year $ 3 $ - $ 3 $ 47,403 After 10 years 40 - 40 40 Total Central Government 43 - 43 47,443 Municipalities Within 1 year 2,540 12,764 15,304 17,304 After 1 to 5 years 7,885 147,033 154,918 154,918 After 5 to 10 years 655 146,732 147,387 147,387 After 10 years - 44,582 44,582 44,582 Total Municipalities 11,080 351,111 362,191 364,191 Total Direct Government Exposure $ 11,123 $ 351,111 $ 362,234 $ 411,634 In addition, at June 30, 2025, the Corporation had $ 212 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 $ 168 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 June 30, 2025, $ 37 million in bonds issued by HFA which are secured by second mortgage loans on Puerto Rico residential properties, and for which HFA also provides insurance to cover losses in the event of a borrower default and upon the satisfaction of certain other conditions (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, $ 2.3 billion of residential mortgages and $ 83.1 million commercial loans were insured or guaranteed by the U.S. Government or its agencies at June 30, 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 June 30, 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. 99 At June 30, 2025, the Corporation had operations in the British Virgin Islands (“BVI”) and it had a loan portfolio amounting to $ 194 million comprised of various retail and commercial clients, compared to a loan portfolio of $ 196 million at December 31, 2024. At June 30, 2025, the Corporation had no significant exposure to a single borrower in the BVI. FDIC Special Assessment On November 16, 2023, the Federal Deposit Insurance Corporation (“FDIC”) imposed a special assessment (the “FDIC Special Assessment”) amount to recover the losses to the deposit insurance fund resulting from the FDIC’s funds used, in March 2023, in connection with the systemic risk exception, to the least-cost resolution test, under the Federal Deposit Insurance Act to manage the receiverships of several failed banks. In connection with this assessment, the Corporation accrued $ 71.4 million, $ 45.3 million net of tax, in the fourth quarter of 2023, representing the full amount of the assessment. During the first quarter of 2024, the Corporation recorded an additional expense of $ 14.3 million, $ 9.1 million net of tax, to reflect the FDIC's higher loss estimate communicated by the FDIC. The special assessment amount and collection period may change as the estimated loss is periodically adjusted or if the total amount collected varies. Legal Proceedings The nature of Popular’s business ordinarily generates claims, litigation, arbitration, regulatory and governmental investigations, and legal and administrative cases and 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 $ 7.1 million as of June 30, 2025. In certain cases, management cannot reasonably estimate the possible loss at this time. Any estimate involves significant judgment, given the varying stages of the Legal Proceedings (including the fact that many of them are currently in preliminary stages), the existence of multiple defendants in several of the current Legal Proceedings whose share of liability has yet to be determined, the numerous unresolved issues in many of the Legal Proceedings, and the inherent uncertainty of the various potential outcomes of such Legal Proceedings. Accordingly, management’s estimate will change from time-to-time, and actual losses may be more or less than the current estimate. While the outcome of Legal Proceedings is inherently uncertain, based on information currently available, advice of counsel, and available insurance coverage, management believes that the amount it has already accrued is adequate and any incremental liability arising from the Legal Proceedings in matters in which a loss amount can be reasonably estimated will not have a material adverse effect on the Corporation’s consolidated financial position. However, in the event of unexpected future developments, it is possible that the ultimate resolution of these matters in a reporting period, if unfavorable, could have a material adverse effect on the Corporation’s consolidated financial position for that period. 100 Note 21 – Non-consolidated variable interest entities The Corporation is involved with two statutory trusts which it created to issue trust preferred securities to the public. These trusts are deemed to be variable interest entities (“VIEs”) since the equity investors at risk have no substantial decision-making rights. The Corporation does not hold any variable interest in the trusts, and therefore, cannot be the trusts’ primary beneficiary. Furthermore, the Corporation concluded that it did not hold a controlling financial interest in these trusts since the decisions of the trusts are predetermined through the trust documents and the guarantee of the trust preferred securities is irrelevant since in substance the sponsor is guaranteeing its own debt. Also, the Corporation is involved with various special purpose entities mainly in guaranteed mortgage securitization transactions, including GNMA and FNMA. The Corporation has also engaged in securitization transactions with FHLMC, but considers its exposure in the form of servicing fees and servicing advances not to be significant at June 30, 2025 . These special purpose entities are deemed to be VIEs since they lack equity investments at risk. The Corporation’s continuing involvement in these guaranteed loan securitizations includes owning certain beneficial interests in the form of securities as well as the servicing rights retained. The Corporation is not required to provide additional financial support to any of the variable interest entities to which it has transferred the financial assets. The mortgage-backed securities, to the extent retained, are classified in the Corporation’s Consolidated Statements of Financial Condition as available-for-sale or trading securities. The Corporation concluded that, essentially, these entities (FNMA and GNMA) control the design of their respective VIEs, dictate the quality and nature of the collateral, require the underlying insurance, set the servicing standards via the servicing guides and can change them at will, and can remove a primary servicer with cause, and without cause in the case of FNMA. Moreover, through their guarantee obligations, agencies (FNMA and GNMA) have the obligation to absorb losses that could be potentially significant to the VIE. The Corporation holds variable interests in these VIEs in the form of agency mortgage-backed securities and collateralized mortgage obligations, including those securities originated by the Corporation and those acquired from third parties. Additionally, the Corporation holds agency mortgage-backed securities and agency collateralized mortgage obligations issued by third party VIEs in which it has no other form of continuing involvement. Refer to Note 23 to the Consolidated Financial Statements for additional information on the debt securities outstanding at June 30, 2025 and December 31, 2024, which are classified as available-for-sale and trading securities in the Corporation’s Consolidated Statements of Financial Condition. In addition, the Corporation holds variable interests in the form of servicing fees, since it retains the right to service the transferred loans in those government- sponsored special purpose entities (“SPEs”) and may also purchase the right to service loans in other government-sponsored SPEs that were transferred to those SPEs by a third-party. The following table presents the carrying amount and classification of the assets related to the Corporation’s variable interests in non-consolidated VIEs and the maximum exposure to loss as a result of the Corporation’s involvement as servicer of GNMA and FNMA loans at June 30, 2025 and December 31, 2024. 101 (In thousands) June 30, 2025 December 31, 2024 Assets Servicing assets: Mortgage servicing rights $ 79,881 $ 84,356 Total servicing assets $ 79,881 $ 84,356 Other assets: Servicing advances $ 5,598 $ 6,112 Total other assets $ 5,598 $ 6,112 Total assets $ 85,479 $ 90,468 Maximum exposure to loss $ 85,479 $ 90,468 The size of the non-consolidated VIEs, in which the Corporation has a variable interest in the form of servicing fees, measured as the total unpaid principal balance of the loans, amounted to $ 6.3 billion at June 30, 2025 (December 31, 2024 - $ 6.6 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 June 30, 2025 and December 31, 2024, will not be recovered. The agency debt securities are not included as part of the maximum exposure to loss since they are guaranteed by the related agencies. ASU 2009-17 requires that an ongoing primary beneficiary assessment should be made to determine whether the Corporation is the primary beneficiary of any of the VIEs it is involved with. The conclusion on the assessment of these non-consolidated VIEs has not changed since their initial evaluation. The Corporation concluded that it is still not the primary beneficiary of these VIEs, and therefore, these VIEs are not required to be consolidated in the Corporation’s financial statements at June 30, 2025. 102 Note 22 – Related party transactions Centro Financiero BHD, S.A. At June 30, 2025, the Corporation had a 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 six months ended June 30, 2025, the Corporation recorded $ 13.0 million in equity pickup (June 30, 2024 - $ 17.4 million), including the net impact of $ 19.9 million from net earnings (June 30, 2024 - $ 22.0 million), offset by ($ 6.9 ) million recorded through Other Comprehensive Income (June 30, 2024 - ($ 4.6 ) million) related to foreign currency translation adjustments and changes in the fair value of available for sale securities. At June 30, 2025, the investment in BHD had a carrying amount of $ 232.5 million (December 31, 2024 - $ 239.5 million) and the Corporation received $ 20 million in cash dividend distributions during the six months ended June 30, 2025 (June 30, 2024 - $ 19.4 million). 103 Note 23 – Fair value measurement ASC Subtopic 820-10 “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels in order to increase consistency and comparability in fair value measurements and disclosures. The hierarchy is broken down into three levels based on the reliability of inputs as follows: ● Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Corporation has the ability to access at the measurement date. Valuation on these instruments does not necessitate a significant degree of judgment since valuations are based on quoted prices that are readily available in an active market. ● Level 2 - Quoted prices other than those included in Level 1 that are observable either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or that can be corroborated by observable market data for substantially the full term of the financial instrument. ● Level 3 - Inputs are unobservable and significant to the fair value measurement. Unobservable inputs reflect the Corporation’s own judgements about assumptions that market participants would use in pricing the asset or liability. The Corporation maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Fair value is based upon quoted market prices when available. If listed prices or quotes are not available, the Corporation employs internally-developed models that primarily use market-based inputs including yield curves, interest rates, volatilities, and credit curves, among others. Valuation adjustments are limited to those necessary to ensure that the financial instrument’s fair value is adequately representative of the price that would be received or paid in the marketplace. These adjustments include amounts that reflect counterparty credit quality, the Corporation’s credit standing, constraints on liquidity and unobservable parameters that are applied consistently. There have been no changes in the Corporation’s methodologies used to estimate the fair value of assets and liabilities from those disclosed in the 2024 Form 10-K. The estimated fair value may be subjective in nature and may involve uncertainties and matters of significant judgment for certain financial instruments. Changes in the underlying assumptions used in calculating fair value could significantly affect the results. Fair Value on a Recurring and Nonrecurring Basis The following fair value hierarchy tables present information about the Corporation’s assets and liabilities measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024: 104 At June 30, 2025 (In thousands) Level 1 Level 2 Level 3 Measured at NAV Total RECURRING FAIR VALUE MEASUREMENTS Assets Debt securities available-for-sale: U.S. Treasury securities $ 7,908,859 $ 7,503,937 $ - $ - $ 15,412,796 Collateralized mortgage obligations - federal agencies - 110,432 - - 110,432 Mortgage-backed securities - 4,965,802 432 - 4,966,234 Other - - 750 - 750 Total debt securities available-for-sale $ 7,908,859 $ 12,580,171 $ 1,182 $ - $ 20,490,212 Trading account debt securities, excluding derivatives: U.S. Treasury securities $ 5,813 $ 10 $ - $ - $ 5,823 Obligations of Puerto Rico, States and political subdivisions - 50 - - 50 Collateralized mortgage obligations - 615 - - 615 Mortgage-backed securities - 22,949 84 - 23,033 Other - - 122 - 122 Total trading account debt securities, excluding derivatives $ 5,813 $ 23,624 $ 206 $ - $ 29,643 Equity securities $ - $ 47,009 $ - $ 447 $ 47,456 Mortgage servicing rights - - 103,077 - 103,077 Loans held-for-sale - 2,898 - - 2,898 Derivatives - 24,792 - - 24,792 Total assets measured at fair value on a recurring basis $ 7,914,672 $ 12,678,494 $ 104,465 $ 447 $ 20,698,078 Liabilities Derivatives $ - $ ( 23,349 ) $ - $ - $ ( 23,349 ) Total liabilities measured at fair value on a recurring basis $ - $ ( 23,349 ) $ - $ - $ ( 23,349 ) 105 At December 31, 2024 (In thousands) Level 1 Level 2 Level 3 Measured at NAV Total RECURRING FAIR VALUE MEASUREMENTS Assets Debt securities available-for-sale: U.S. Treasury securities $ 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 June 30, 2025 and December 31, 2024. (In thousands) June 30, 2025 Aggregate Unpaid Fair Value Principal Balance Difference Loans held for sale $ 2,898 $ 2,832 $ 66 (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 June 30, 2025 and December 31, 2024. 106 The fair value information included in the following tables is not as of period end, but as of the date that the fair value measurement was recorded during the six months ended June 30, 2025 and 2024 and excludes nonrecurring fair value measurements of assets no longer outstanding as of the reporting date. Six months ended June 30, 2025 (In thousands) Level 1 Level 2 Level 3 Total NONRECURRING FAIR VALUE MEASUREMENTS Assets Write-downs Loans [1] $ - $ - $ 4,361 $ 4,361 $ ( 91 ) Other real estate owned [2] - - 3,919 3,919 ( 1,573 ) Other foreclosed assets [2] - - 162 162 ( 46 ) Total assets measured at fair value on a nonrecurring basis $ - $ - $ 8,442 $ 8,442 $ ( 1,710 ) [1] Relates mainly to certain impaired collateral dependent loans. The impairment was measured based on the fair value of the collateral, which is derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations. Costs to sell are excluded from the reported fair value amount. [2] Represents the fair value of foreclosed real estate and other collateral owned that were written down to their fair value. Costs to sell are excluded from the reported fair value amount. Six months ended June 30, 2024 (In thousands) Level 1 Level 2 Level 3 Total NONRECURRING FAIR VALUE MEASUREMENTS Assets Write-downs Loans [1] $ - $ - $ 2,039 $ 2,039 $ ( 329 ) Loans held-for-sale [2] - 3,028 - 3,028 ( 38 ) Other real estate owned [3] - - 4,426 4,426 ( 1,602 ) Other foreclosed assets [3] - - 211 211 ( 46 ) Total assets measured at fair value on a nonrecurring basis $ - $ 3,028 $ 6,676 $ 9,704 $ ( 2,015 ) [1] Relates mainly to certain impaired collateral dependent loans. The impairment was measured based on the fair value of the collateral, which is derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations. Costs to sell are excluded from the reported fair value amount. [2] Relates to a quarterly valuation on loans held-for-sale. Costs to sell are excluded from the reported fair value amount. [3] Represents the fair value of foreclosed real estate and other collateral owned that were written down to their fair value. Costs to sell are excluded from the reported fair value amount. 107 The following tables present the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarters and six months ended June 30, 2025 and 2024. Quarter ended June 30, 2025 MBS Other MBS Other classified securities classified securities as debt classified as as trading classified securities debt securities account as trading Mortgage available- available- debt account debt servicing Total (In thousands) for-sale for-sale securities securities rights assets Balance at March 31, 2025 $ 457 $ 750 $ 84 $ 127 $ 104,743 $ 106,161 Gains (losses) included in earnings - - - ( 5 ) ( 1,954 ) ( 1,959 ) Additions - - - - 288 288 Settlements ( 25 ) - - - - ( 25 ) Balance at June 30, 2025 $ 432 $ 750 $ 84 $ 122 $ 103,077 $ 104,465 Changes in unrealized gains (losses) included in earnings relating to assets still held at June 30, 2025 $ - $ - $ - $ 8 $ 348 $ 356 Six months ended June 30, 2025 MBS Other MBS Other classified securities classified securities as debt classified as as trading classified securities debt securities account as trading Mortgage available- available- debt account debt servicing Total (In thousands) for-sale for-sale securities securities rights assets Balance at January 1, 2025 $ 484 $ 2,250 $ 84 $ 133 $ 108,103 $ 111,054 Gains (losses) included in earnings - - - ( 11 ) ( 5,524 ) ( 5,535 ) Gains (losses) included in OCI ( 2 ) - - - - ( 2 ) Additions - - - - 498 498 Settlements ( 50 ) - - - - ( 50 ) Transfers out of Level 3 - ( 1,500 ) - - - ( 1,500 ) Balance at June 30, 2025 $ 432 $ 750 $ 84 $ 122 $ 103,077 $ 104,465 Changes in unrealized gains (losses) included in earnings relating to assets still held at June 30, 2025 $ - $ - $ - $ 16 $ ( 977 ) $ ( 961 ) 108 Quarter ended June 30, 2024 MBS Other Other classified securities MBS securities as debt classified as classified classified securities debt securities as trading as trading Mortgage available- available- account debt account debt servicing Total (In thousands) for-sale for-sale securities securities rights assets Balance at March 31, 2024 $ 607 $ 2,000 $ 84 $ 166 $ 114,964 $ 117,821 Gains (losses) included in earnings - - - ( 8 ) ( 1,945 ) ( 1,953 ) Gains (losses) included in OCI ( 1 ) - - - - ( 1 ) Additions - - - - 367 367 Settlements ( 25 ) - - - - ( 25 ) Balance at June 30, 2024 $ 581 $ 2,000 $ 84 $ 158 $ 113,386 $ 116,209 Changes in unrealized gains (losses) included in earnings relating to assets still held at June 30, 2024 $ - $ - $ - $ 10 $ 500 $ 510 Six months ended June 30, 2024 MBS Other Other classified securities CMOs securities as debt classified as classified MBS classified securities debt securities as trading classified as as trading Mortgage available- available- account debt trading account account debt servicing Total (In thousands) for-sale for-sale securities securities securities rights assets Balance at January 1, 2024 $ 606 $ 2,500 $ 5 $ 112 $ 167 $ 118,109 $ 121,499 Gains (losses) included in earnings - ( 500 ) - - ( 9 ) ( 5,384 ) ( 5,893 ) Additions - - - - - 661 661 Settlements ( 25 ) - ( 5 ) ( 28 ) - - ( 58 ) Balance at June 30, 2024 $ 581 $ 2,000 $ - $ 84 $ 158 $ 113,386 $ 116,209 Changes in unrealized gains (losses) included in earnings relating to assets still held at June 30, 2024 $ - $ ( 500 ) $ - $ - $ 12 $ ( 702 ) $ ( 1,190 ) 109 Gains and losses (realized and unrealized) included in earnings for the quarters and six months ended June 30, 2025 and 2024 for Level 3 assets and liabilities included in the previous tables are reported in the Consolidated Statement of Operations as follows: Quarter ended June 30, 2025 Six months ended June 30, 2025 Changes in unrealized Changes in unrealized Total gains gains (losses) relating to Total gains gains (losses) relating to (losses) included assets still held at (losses) included assets still held at (In thousands) in earnings reporting date in earnings reporting date Mortgage banking activities $ ( 1,954 ) $ 348 $ ( 5,524 ) $ ( 977 ) Trading account profit (loss) ( 5 ) 8 ( 11 ) 16 Total $ ( 1,959 ) $ 356 $ ( 5,535 ) $ ( 961 ) Quarter ended June 30, 2024 Six months ended June 30, 2024 Changes in unrealized Changes in unrealized Total gains gains (losses) relating to Total gains gains (losses) relating to (losses) included assets still held at (losses) included assets still held at (In thousands) in earnings reporting date in earnings reporting date Mortgage banking activities $ ( 1,945 ) $ 500 $ ( 5,384 ) $ ( 702 ) Trading account profit (loss) ( 8 ) 10 ( 9 ) 12 Provision for credit losses - - ( 500 ) ( 500 ) Total $ ( 1,953 ) $ 510 $ ( 5,893 ) $ ( 1,190 ) The following tables include quantitative information about significant unobservable inputs used to derive the fair value of Level 3 instruments, excluding those instruments for which the unobservable inputs were not developed by the Corporation such as prices of prior transactions and/or unadjusted third-party pricing sources at June 30, 2025 and 2024. Fair value at June 30, (In thousands) 2025 Valuation technique Unobservable inputs Weighted average (range) [1] Other - trading $ 122 Discounted cash flow model Weighted average life 2 years Yield 12 .0% Prepayment speed 10.8 % Loans held-in-portfolio $ 4,361 [2] External appraisal Haircut applied on external appraisals 5.0 % [1] Weighted average of significant unobservable inputs used to develop Level 3 fair value measurements were calculated by relative fair value. [2] Loans held-in-portfolio in which haircuts were not applied to external appraisals were excluded from this table. 110 Fair value at June 30, (In thousands) 2024 Valuation technique Unobservable inputs Weighted average (range) [1] Other - trading $ 158 Discounted cash flow model Weighted average life 2.3 years Yield 12 .0% Prepayment speed 10.8 % Loans held-in-portfolio $ 2,039 [2] External appraisal Haircut applied on external appraisals 10 .0% [1] Weighted average of significant unobservable inputs used to develop Level 3 fair value measurements were calculated by relative fair value. [2] Loans held-in-portfolio in which haircuts were not applied to external appraisals were excluded from this table. 111 Note 24 – Fair value of financial instruments The fair value of financial instruments is the amount at which an asset or obligation could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. For those financial instruments with no quoted market prices available, fair values have been estimated using present value calculations or other valuation techniques, as well as management’s best judgment with respect to current economic conditions, including discount rates, estimates of future cash flows, and prepayment assumptions. Many of these estimates involve various assumptions and may vary significantly from amounts that could be realized in actual transactions. The fair values reflected herein have been determined based on the prevailing rate environment at June 30, 2025 and December 31, 2024, as applicable. In different interest rate environments, fair value estimates can differ significantly, especially for certain fixed rate financial instruments. In addition, the fair values presented do not attempt to estimate the value of the Corporation’s fee generating businesses and anticipated future business activities, that is, they do not represent the Corporation’s value as a going concern. There have been no changes in the Corporation’s valuation methodologies and inputs used to estimate the fair values for each class of financial assets and liabilities not measured at fair value. The following tables present the carrying amount and estimated fair values of financial instruments with their corresponding level in the fair value hierarchy. The aggregate fair value amounts of the financial instruments disclosed do not represent management’s estimate of the underlying value of the Corporation. 112 June 30, 2025 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Assets: Cash and due from banks $ 400,631 $ 400,631 $ - $ - $ - $ 400,631 Money market investments 6,340,786 6,330,415 10,371 - - 6,340,786 Trading account debt securities, excluding derivatives [1] 29,643 5,813 23,624 206 - 29,643 Debt securities available-for-sale [1] 20,490,212 7,908,859 12,580,171 1,182 - 20,490,212 Debt securities held-to-maturity: U.S. Treasury securities $ 7,479,657 $ - $ 7,499,064 $ - $ - $ 7,499,064 Obligations of Puerto Rico, States and political subdivisions 48,598 - 6,820 42,361 - 49,181 Collateralized mortgage obligation-federal agency 1,510 - 1,312 - - 1,312 Securities in wholly owned statutory business trusts 5,960 - 5,960 - - 5,960 Total debt securities held-to-maturity $ 7,535,725 $ - $ 7,513,156 $ 42,361 $ - $ 7,555,517 Equity securities: FHLB stock $ 66,152 $ - $ 66,152 $ - $ - $ 66,152 FRB stock 101,252 - 101,252 - - 101,252 Other investments 54,987 - 47,009 8,047 447 55,503 Total equity securities $ 222,391 $ - $ 214,413 $ 8,047 $ 447 $ 222,907 Loans held-for-sale $ 2,898 $ - $ 2,898 $ - $ - $ 2,898 Loans held-in-portfolio 37,415,693 - - 36,611,781 - 36,611,781 Mortgage servicing rights 103,077 - - 103,077 - 103,077 Derivatives 24,792 - 24,792 - - 24,792 June 30, 2025 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Liabilities: Deposits: Demand deposits $ 57,618,705 $ - $ 57,618,705 $ - $ - $ 57,618,705 Time deposits 9,598,786 - 9,378,576 - - 9,378,576 Total deposits $ 67,217,491 $ - $ 66,997,281 $ - $ - $ 66,997,281 Assets sold under agreements to repurchase $ 56,043 $ - $ 56,049 $ - $ - $ 56,049 Other short-term borrowings [2] 550,000 - 550,000 - - 550,000 Notes payable: FHLB advances $ 214,200 $ - $ 211,087 $ - $ - $ 211,087 Unsecured senior debt securities 395,865 - 416,044 - - 416,044 Junior subordinated deferrable interest debentures (related to trust preferred securities) 198,386 - 187,515 - - 187,515 Total notes payable $ 808,451 $ - $ 814,646 $ - $ - $ 814,646 Derivatives $ 23,349 $ - $ 23,349 $ - $ - $ 23,349 [1] Refer to Note 23 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level. [2] Refer to Note 15 to the Consolidated Financial Statements for the composition of other short-term borrowings. 113 December 31, 2024 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Assets: Cash and due from banks $ 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 23 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level. [2] Refer to Note 15 to the Consolidated Financial Statements for the composition of other short-term borrowings. Refer to Note 20 to the Consolidated Financial Statements for the notional amount of commitments to extend credit, which represents the unused portion of credit facilities granted to customers, and letters of credit, which represent the contractual amount that is required to be paid in the event of nonperformance, at June 30, 2025 and December 31, 2024. The fair value of commitments to extend credit and letters of credit, which are based on the fees charged to enter into those agreements, are not material to Popular’s financial statements. 114 Note 25 – Net income per common share The following table sets forth the computation of net income per common share (“EPS”), basic and diluted, for the quarters and six months ended June 30, 2025 and 2024: Quarters ended June 30, Six months ended June 30, (In thousands, except per share information) 2025 2024 2025 2024 Net income $ 210,440 $ 177,789 $ 387,942 $ 281,072 Preferred stock dividends ( 353 ) ( 353 ) ( 706 ) ( 706 ) Net income applicable to common stock $ 210,087 $ 177,436 $ 387,236 $ 280,366 Average common shares outstanding 68,050,361 71,970,773 68,661,851 71,920,254 Average potential dilutive common shares 29,288 21,138 25,808 17,180 Average common shares outstanding - assuming dilution 68,079,649 71,991,911 68,687,659 71,937,434 Basic EPS $ 3.09 $ 2.47 $ 5.64 $ 3.90 Diluted EPS $ 3.09 $ 2.46 $ 5.64 $ 3.90 For the quarters and six months ended June 30, 2025 and 2024, the Corporation calculated the impact of potential dilutive common shares under the treasury stock method, consistent with the method used for the preparation of the financial statements for the year ended December 31, 2024. For a discussion of the calculation under the treasury stock method, refer to Note 30 of the Consolidated Financial Statements included in the 2024 Form 10-K. 115 Note 26 – Revenue from contracts with customers The following table presents the Corporation’s revenue streams from contracts with customers by reportable segment for the quarters and six months ended June 30, 2025 and 2024. Quarter ended June 30, Six months ended June 30, (In thousands) 2025 2025 BPPR Popular U.S. BPPR Popular U.S. Service charges on deposit accounts $ 36,194 $ 2,632 $ 72,650 $ 5,230 Other service fees: Debit card fees 27,707 211 53,941 409 Insurance fees, excluding reinsurance 8,719 2,223 16,400 3,910 Credit card fees, excluding late fees and membership fees 28,145 334 53,530 739 Sale and administration of investment products 9,058 - 18,031 - Trust fees 6,879 - 13,510 - Total revenue from contracts with customers [1] $ 116,702 $ 5,400 $ 228,062 $ 10,288 [1] The amounts include intersegment transactions of $ 0.6 million and $ 1.2 million, respectively, for the quarter and six months ended June 30, 2025. Quarter ended June 30, Six months ended June 30, (In thousands) 2024 2024 BPPR Popular U.S. BPPR Popular U.S. Service charges on deposit accounts $ 35,055 $ 2,471 $ 70,071 $ 4,897 Other service fees: Debit card fees [2] 26,976 200 52,311 399 Insurance fees, excluding reinsurance 11,708 1,600 22,264 3,446 Credit card fees, excluding late fees and membership fees [2] 26,125 368 50,639 826 Sale and administration of investment products 7,850 - 15,277 - Trust fees 6,923 - 13,908 - Total revenue from contracts with customers [1] $ 114,637 $ 4,639 $ 224,470 $ 9,568 [1] The amounts include intersegment transactions of $ 2.7 million and $ 3.3 million, respectively, for the quarter and six months ended June 30, 2024. [2] Effective in the third quarter of 2024, the Corporation reclassified certain interchange fees, which were previously included jointly with credit card fees from common network activity, as debit card fees. For the quarter and six month period ended June 30, 2024, interchange fees of $ 10.9 million and $ 22.2 million were reclassified. Revenue from contracts with customers is recognized when, or as, the performance obligations are satisfied by the Corporation by transferring the promised services to the customers based on ASC 606 Revenue from Contracts with Customers. Revenue streams identified from contracts with customers, as listed above, will have certain timing for recognition based on the nature of the contract including when the obligation is satisfied and/or services are rendered. Service charges on deposit accounts, debit card fees, and credit card fees are recognized at a point in time, upon the occurrence of an activity or an event. Interchange fees on debit and credit card transactions are recognized upon settlement of the payment transaction. For more details over nature and timing of revenue streams from contracts with customers refer to Note 31 on the 2024 Form 10-K for a complete description of the nature and timing of revenue streams from contracts with customers. 116 Note 27 – Leases The Corporation enters in the ordinary course of business into operating and finance leases for land, buildings and equipment. These contracts generally do not include purchase options or residual value guarantees. The remaining lease terms of 0.11 to 29.5 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 12 and Note 16 to the Consolidated Financial Statements, respectively, for information on the balances of these lease assets and liabilities. The Corporation uses the incremental borrowing rate for purposes of discounting lease payments for operating and finance leases, since it does not have enough information to determine the rates implicit in the leases. The discount rates are based on fixed-rate and fully amortizing borrowing facilities of its banking subsidiaries that are collateralized. For leases held by non-banking subsidiaries, a credit spread is added to this rate based on financing transactions with a similar credit risk profile. The following table presents the undiscounted cash flows of operating and finance leases for each of the following periods: June 30, 2025 (In thousands) Remaining 2025 2026 2027 2028 2029 Later Years Total Lease Payments Less: Imputed Interest Total Operating Leases $ 14,190 $ 21,975 $ 16,790 $ 14,278 $ 12,184 $ 35,255 $ 114,672 $ ( 16,097 ) $ 98,575 Finance Leases 2,242 4,222 2,927 2,592 2,415 9,530 23,928 ( 2,612 ) 21,316 The following table presents the lease cost recognized by the Corporation in the Consolidated Statements of Operations as follows: Quarters ended June 30, Six months ended June 30, (In thousands) 2025 2024 2025 2024 Finance lease cost: Amortization of ROU assets $ 747 $ 749 $ 1,493 $ 1,497 Interest on lease liabilities 190 226 390 463 Operating lease cost 7,599 7,650 15,148 15,338 Short-term lease cost 214 120 407 236 Variable lease cost 89 70 174 139 Sublease income ( 20 ) ( 21 ) ( 40 ) ( 41 ) Total lease cost [1] $ 8,819 $ 8,794 $ 17,572 $ 17,632 [1] Total lease cost is recognized as part of net occupancy expense. 117 The following table presents supplemental cash flow information and other related information related to operating and finance leases. Six months ended June 30, 2025 (Dollars in thousands) 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 15,610 $ 15,689 Operating cash flows from finance leases 389 463 Financing cash flows from finance leases 1,829 1,774 ROU assets obtained in exchange for new lease obligations: Operating leases $ 5,832 $ 1,463 Weighted-average remaining lease term: Operating leases 7.5 years 7.2 years Finance leases 7.9 years 8.0 years Weighted-average discount rate: Operating leases 3.5 % 3.3 % Finance leases 3.5 % 3.8 % 118 Note 28 – Pension and postretirement benefits The Corporation has a non-contributory defined benefit pension plan and supplementary pension benefit restoration plans for regular employees of certain of its subsidiaries (the “Pension Plans”). The accrual of benefits under the Pension Plans is frozen to all participants. The Corporation also provides certain postretirement health care benefits for retired employees of certain subsidiaries (the “OPEB Plan”). The components of net periodic cost for the Pension Plans and the OPEB Plan for the periods presented were as follows: Pension Plans OPEB Plan Quarter ended June 30, Quarter ended June 30, (In thousands) 2025 2024 2025 2024 Personnel Cost: Service cost $ - $ - $ 15 $ 32 Other operating expenses: Interest cost 7,411 7,558 1,291 1,421 Expected return on plan assets ( 8,069 ) ( 8,594 ) - - Amortization of prior service cost/(credit) - - - - Amortization of net loss (gain) 3,449 4,166 ( 1,177 ) ( 548 ) Total net periodic pension cost $ 2,791 $ 3,130 $ 129 $ 905 Pension Plans OPEB Plan Six months ended June 30, Six months ended June 30, (In thousands) 2025 2024 2025 2024 Personnel Cost: Service cost $ - $ - $ 30 $ 63 Other operating expenses: Interest cost 14,821 15,117 2,582 2,843 Expected return on plan assets ( 16,138 ) ( 17,188 ) - - Amortization prior service cost/(credit) - - - - Amortization of net loss 6,899 8,332 ( 2,354 ) ( 1,096 ) Total net periodic pension cost $ 5,582 $ 6,261 $ 258 $ 1,810 The Corporation paid the following contributions to the plans for the six months ended June 30, 2025 and expects to pay the following contributions for the year ending December 31, 2025. For the six months ended For the year ending (In thousands) June 30, 2025 December 31, 2025 Pension Plans $ 114 $ 227 OPEB Plan $ 3,223 $ 5,428 119 Note 29 - Stock-based compensation Incentive Plan On May 12, 2020, the stockholders of the Corporation approved the Popular, Inc. 2020 Omnibus Incentive Plan, which permits the Corporation to issue several types of stock-based compensation to employees and directors of the Corporation and/or any of its subsidiaries (the “2020 Incentive Plan”). The 2020 Incentive Plan replaced the Popular, Inc. 2004 Omnibus Incentive Plan, which was in effect prior to the adoption of the 2020 Incentive Plan (the “2004 Incentive Plan” and, together with the 2020 Incentive Plan, the “Incentive Plan”). Participants under the Incentive Plan are designated by the Talent and Compensation Committee of the Board of Directors (or its delegate, as determined by the Board). Under the Incentive Plan, the Corporation has issued restricted stock and performance shares to its employees and restricted stock and restricted stock units (“RSUs”) to its directors. The restricted stock granted under the Incentive Plan to employees becomes vested based on the employees’ continued service with Popular. Unless otherwise stated in an agreement, the compensation cost associated with the shares of restricted stock granted prior to 2021 was determined based on a two-prong vesting schedule. These grants include ratable vesting over five or four years commencing at the date of grant (“the graduated vesting portion”) with a portion vested at termination of employment after attainment of 55 years of age and 10 years of service or 60 years of age and 5 years of service (“the retirement vesting portion”). The graduated vesting portion is accelerated at termination of employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age and 5 years of service. Restricted stock granted on or after 2021 have ratable vesting in equal annual installments over a period of 4 years or 3 years, depending on the classification of the employee. The vesting schedule is accelerated at termination of employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age and 5 years of service. The performance share awards granted under the Incentive Plan consist of the opportunity to receive shares of Popular, Inc.’s common stock provided that the Corporation achieves certain goals during a three-year performance cycle. The goals will be based on two metrics weighted equally: the Relative Total Shareholder Return (“TSR”) and the Absolute Return on Average Tangible Common Equity (“ROATCE”). The TSR metric is a market condition under ASC 718. For equity settled awards based on market conditions, the fair value is determined as of the grant date and is not subsequently revised based on actual performance. The ROATCE metric is a performance condition under ASC 718. The fair value is determined based on the probability of achieving the ROATCE goal as of each reporting period. The TSR and ROATCE metrics are equally weighted and work independently. The number of shares that will ultimately vest ranges from 50 % to a 150 % target based on both market (TSR) and performance (ROATCE) conditions. The performance shares will vest at the end of the three-year performance cycle. If a participant terminates employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age and 5 years of service, the performance shares shall continue outstanding and vest at the end of the performance cycle. The following table summarizes the restricted stock and performance shares activity under the Incentive Plan for members of management. 120 (Not in thousands) Shares Weighted-Average Grant Date Fair Value Non-vested at December 31, 2023 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 241,762 100.67 Performance Shares Quantity Adjustment 48,923 92.33 Vested ( 277,721 ) 90.69 Forfeited ( 5,515 ) 60.68 Non-vested at June 30, 2025 255,357 $ 77.90 During the quarter ended June 30, 2025, 121,649 shares of restricted stock (June 30, 2024 – 97,732 ) were awarded to management under the Incentive Plan. During the quarters ended June 30, 2025 and 2024, no performance shares were awarded to management under the Incentive Plan. During the six months ended June 30, 2025, 194,268 shares of restricted stock (June 30, 2024 – 175,591 ) and 47,494 performance shares (June 30, 2024 - 65,225 ) were awarded to management under the Incentive Plan. During the quarter ended June 30, 2025, the Corporation recognized $ 6.9 million of restricted stock expense related to management incentive awards, with a tax benefit of $ 1.0 million (June 30, 2024 - $ 4.1 million, with a tax benefit of $ 1.0 million). For the six months ended June 30, 2025, the Corporation recognized $ 14.4 million of restricted stock expense related to management incentive awards, with a tax benefit of $ 1.6 million (June 30, 2024 - $ 10.5 million, with a tax benefit of $ 1.7 million). For the six months ended June 30, 2025, the fair market value of the restricted stock and performance shares vested was $ 20.0 million on the grant date and $ 27.4 million at vesting date. This differential triggers a windfall of $ 2.7 million that was recorded as a reduction on income tax expense. During the quarter ended June 30, 2025, the Corporation recognized $ 0.8 million of performance shares expense, with a tax benefit of $ 61 thousand due to performance shares target adjustment (June 30, 2024 - $ ( 0.9 ) million, with a tax benefit of $ ( 55 ) thousand). For the six months ended June 30, 2025, the Corporation recognized $ 4.2 million of performance shares expense, with a tax benefit of $ 0.5 million (June 30, 2024 - $ 4.1 million, with a tax benefit of $ 0.3 million). The total unrecognized compensation cost related to non-vested restricted stock awards and performance shares to members of management at June 30, 2025 was $ 17.6 million and is expected to be recognized over a weighted-average period of 1.65 years. The following table summarizes the restricted stock activity under the Incentive Plan for members of the Board of Directors: (Not in thousands) RSUs / Restricted stock Weighted-Average Grant Date Fair Value per Unit Non-vested at December 31, 2023 - $ - Granted 25,462 89.51 Vested ( 25,462 ) 89.51 Forfeited - - Non-vested at December 31, 2024 - $ - Granted 22,050 99.42 Vested ( 2,937 ) 92.45 Forfeited - - Non-vested at June 30, 2025 19,113 $ 99.42 The equity awards granted to members of the Board of Directors of Popular, Inc. (the “Directors”) after May 2025 will vest and become non-forfeitable on the first anniversary of the grant date of such award. Equity awards granted to the Directors may be paid in either common stock or RSUs, at each Director’s election. If RSUs are elected, the Directors may defer the delivery of the shares 121 of common stock underlying the RSUs award until their retirement. To the extent that cash dividends are paid on the Corporation’s outstanding common stock, the Directors will receive an additional number of RSUs that reflect a reinvested dividend equivalent. During the quarter ended June 30, 2025, 17,816 RSUs and 2,688 shares of restricted stock were granted to the Directors (June 30, 2024 - 20,411 RSUs and 1,392 shares of unrestricted stock) and the Corporation recognized $ 0.4 million of expense related to these shares with a tax benefit of $ 84 thousand (June 30, 2024 - $ 1.9 million with a tax benefit of $ 0.4 million). For the six months ended June 30, 2025, the Corporation granted 19,362 RSUs and 2,688 shares of restricted stock to the Directors (June 30, 2024 - 21,606 RSUs and 1,392 shares of unrestricted stock) and the Corporation recognized $ 0.7 million of expense related to these shares, with a tax benefit of $ 0.1 million, (June 30, 2024 - $ 2.1 million, with a tax benefit of $ 0.4 million). The fair value at vesting date of the RSUs vested during the six months ended June 30, 2025 for the Directors was $ 2.2 million. 122 Note 30 – Income taxes The table below presents a reconciliation of the statutory income tax rate to the effective income tax rate: Quarters ended June 30, 2025 June 30, 2024 (In thousands) Amount % of pre-tax income Amount % of pre-tax income Computed income tax expense at statutory rates $ 96,871 37.5 % $ 81,843 37.5 % Net benefit of tax exempt income ( 45,374 ) ( 17.6 ) ( 33,220 ) ( 15.2 ) Effect of income subject to preferential tax rate ( 606 ) ( 0.2 ) 1,272 0.6 Deferred tax asset valuation allowance 4,050 1.6 ( 235 ) ( 0.1 ) Difference in tax rates due to multiple jurisdictions ( 2,282 ) ( 0.9 ) ( 4,456 ) ( 2.1 ) Other tax benefits - - ( 4,500 ) ( 2.1 ) State and local taxes 414 0.1 2,204 1.0 Others ( 5,189 ) ( 2.0 ) ( 2,449 ) ( 1.1 ) Income tax expense $ 47,884 18.5 % $ 40,459 18.5 % Six months ended June 30, 2025 June 30, 2024 (In thousands) Amount % of pre-tax income Amount % of pre-tax income Computed income tax expense at statutory rates $ 180,333 37.5 % $ 141,412 37.5 % Net benefit of tax exempt income ( 85,329 ) ( 17.7 ) ( 61,979 ) ( 16.4 ) Effect of income subject to preferential tax rate ( 1,519 ) ( 0.3 ) ( 148 ) - Deferred tax asset valuation allowance 7,932 1.6 2,328 0.6 Difference in tax rates due to multiple jurisdictions ( 5,257 ) ( 1.1 ) ( 5,129 ) ( 1.4 ) Other tax benefits - - ( 4,500 ) ( 1.2 ) Tax on intercompany distributions [1] - - 24,325 6.4 U.S., States, and local taxes 4,450 0.9 3,240 0.9 Others ( 7,663 ) ( 1.6 ) ( 3,522 ) ( 0.9 ) Income tax expense $ 92,947 19.3 % $ 96,027 25.5 % [1] Includes $ 16.5 million of out-of-period adjustment recorded during the first quarter of 2024. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Significant components of the Corporation’s deferred tax assets and liabilities at June 30, 2025, and December 31, 2024, were as follows: 123 June 30, 2025 (In thousands) PR US Total Deferred tax assets: Tax credits available for carryforward $ 4,861 $ 32,925 $ 37,786 Net operating loss and other carryforward available 59,441 594,642 654,083 Postretirement and pension benefits 28,197 - 28,197 Allowance for credit losses 245,070 28,339 273,409 Deferred loan origination fees/cost 3,005 ( 2,702 ) 303 Depreciation 7,700 7,551 15,251 FDIC-assisted transaction 152,665 - 152,665 Lease liability 27,417 13,953 41,370 Unrealized net loss on investment securities 202,822 15,914 218,736 Difference in outside basis from pass-through entities 53,043 - 53,043 Mortgage Servicing Rights 14,561 - 14,561 Other temporary differences 36,015 8,743 44,758 Total gross deferred tax assets 834,797 699,365 1,534,162 Deferred tax liabilities: Intangibles 90,392 57,493 147,885 Right of use assets 24,908 12,280 37,188 Loans acquired 17,471 - 17,471 Other temporary differences 7,138 429 7,567 Total gross deferred tax liabilities 139,909 70,202 210,111 Valuation allowance 76,804 386,914 463,718 Net deferred tax asset $ 618,084 $ 242,249 $ 860,333 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 $ 924,756 124 The net deferred tax assets shown in the table above at June 30, 2025, is reflected in the Consolidated Statements of Financial Condition as $ 862.1 million in net deferred tax assets in the “Other assets” caption (December 31, 2024 - $ 926.3 million) and $ 1.8 million in deferred tax liabilities in the “Other liabilities” caption (December 31, 2024 - $ 1.6 million), reflecting the aggregate deferred tax assets or liabilities of individual tax-paying subsidiaries of the Corporation in their respective tax jurisdiction, Puerto Rico or the United States. At June 30, 2025, the net deferred tax assets of the U.S. operations amounted to $ 629.1 million with a valuation allowance of $ 386.9 million, for net deferred tax assets after valuation allowance of $ 242.2 million. The Corporation evaluates on a quarterly basis the realization of the deferred tax asset by taxing jurisdiction. The U. S. operations sustained profitability for the last three years and better results than projected for the period ended June 30, 2025. These historical financial results are objectively verifiable positive evidence, evaluated together with the positive evidence of stable credit metrics, in combination with the length of the expiration of the NOLs. On the other hand, the Corporation evaluated the negative evidence accumulated over the years, including financial results lower than expectations and challenges to the economy due to inflationary pressures that could stem from U. S. tariff policies and global geopolitical challenges, in addition to the economic effect of cuts in federal government spending that could negatively impact U. S. operations’ achieving expected pre-tax income levels. As of June 30, 2025, after weighting all positive and negative evidence, the Corporation concluded that it is more likely than not that $ 242.2 million of the deferred tax assets from the U.S. operations, comprised mainly of net operating losses, will be realized. The Corporation based this determination on its estimated earnings available to realize the deferred tax assets for the remaining carryforward period, together with the historical level of book income adjusted by permanent differences. Management will continue to monitor and review the U.S. operation’s results, including recent earnings trends, the pre-tax earnings forecast, any new tax initiative, and other factors, including net income versus forecast, targeted loan growth, net interest income margin, changes in deposit costs, allowance for credit losses, charge offs, non-performing loans held-in-portfolio (“NPLs”) inflows and non-performing asset (“NPA”) balances. Significant changes in these factors or sustainable continuance of financial improvement could impact the future realization of the deferred tax assets. At June 30, 2025, the Corporation’s net deferred tax assets related to its Puerto Rico operations amounted to $ 618.1 million. The Corporation’s Puerto Rico Banking operation has a historical record of profitability. This is considered a strong piece of objectively verifiable positive evidence that outweighs any negative evidence considered by Management in the evaluation of the realization of the 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 $ 76.8 million as of June 30, 2025. The reconciliation of unrecognized tax benefits, excluding interest, was as follows: (In millions) 2025 2024 Balance at January 1 $ 1.5 $ 1.5 Balance at March 31 $ 1.5 $ 1.5 Balance at June 30 $ 1.5 $ 1.5 At June 30, 2025, the total amount of accrued interest recognized in the statement of financial condition amounted to $ 2.5 million (December 31, 2024 - $ 2.4 million). Management determined that at June 30, 2025 and December 31, 2024, there was no need to accrue for the payment of penalties. The Corporation’s policy is to report interest related to unrecognized tax benefits in income tax expense, while the penalties, if any, are reported in other operating expenses in the Consolidated Statements of Operations. After consideration of the effect on U.S. federal tax of unrecognized U.S. state tax benefits, the total amount of unrecognized tax benefits that if recognized, would affect the Corporation’s effective tax rate, was $ 3.0 million at June 30, 2025 (December 31, 2024 - $ 3.0 million). 125 The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to the statutes of limitation, changes in Management’s judgment about the level of uncertainty, status of examinations, litigation and legislative activity and the addition or elimination of uncertain tax positions. The Corporation does not anticipate a reduction in the total amount of unrecognized tax benefits within the next 12 months. The Corporation and its subsidiaries file income tax returns in Puerto Rico, the U.S. federal jurisdiction, various U.S. states and political subdivisions, and foreign jurisdictions. At June 30, 2025, the following years remain subject to examination in the U.S. Federal jurisdiction: 2021 and thereafter; and in the Puerto Rico jurisdiction, 2018 and thereafter. 126 Note 31 – Supplemental disclosure on the consolidated statements of cash flows Additional disclosures on cash flow information and non-cash activities for the six months ended June 30, 2025 and June 30, 2024 are listed in the following table: (In thousands) June 30, 2025 June 30, 2024 Non-cash activities: Loans transferred to other real estate $ 14,006 $ 25,922 Loans transferred to other property 45,065 38,867 Total loans transferred to foreclosed assets 59,071 64,789 Loans transferred to other assets 26,604 25,427 Financed sales of other real estate assets 2,580 6,220 Financed sales of other foreclosed assets 29,089 26,894 Total financed sales of foreclosed assets 31,669 33,114 Financed sale of premises and equipment 29,727 38,715 Transfers from loans held-in-portfolio to loans held-for-sale 2,662 7,505 Transfers from loans held-for-sale to loans held-in-portfolio 1,224 2,896 Loans securitized into investment securities [1] 6,852 4,806 Trades receivable from brokers and counterparties 22 26,198 Trades payable to brokers and counterparties 593,949 24,603 Net change in receivables from investments maturities 14,377 124,000 Recognition of mortgage servicing rights on securitizations or asset transfers 498 661 Loans booked under the GNMA buy-back option 3,339 3,437 Capitalization of lease right of use asset 9,143 1,946 [1] Includes loans securitized into trading securities and subsequently sold before quarter end. The following table provides a reconciliation of cash and due from banks, and restricted cash reported within the Consolidated Statement of Financial Condition that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows. (In thousands) June 30, 2025 June 30, 2024 Cash and due from banks $ 394,211 $ 348,170 Restricted cash and due from banks 6,420 11,803 Restricted cash in money market investments 10,371 7,286 Total cash and due from banks, and restricted cash [2] $ 411,002 $ 367,259 [2] Refer to Note 4 - Restrictions on cash and due from banks and certain securities for nature of restrictions. 127 Note 32 – 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: 128 2025 For the quarter ended June 30, 2025 Intersegment (In thousands) BPPR Popular U.S. Eliminations Interest income $ 748,712 $ 195,668 $ ( 1,041 ) Interest expense 210,237 93,474 ( 1,041 ) Net interest income 538,475 102,194 - Provision for credit losses 42,452 6,532 - Non-interest income 145,685 7,421 - Personnel costs 164,794 27,387 - Professional fees 13,025 2,450 - Technology and software expenses 64,226 10,345 - Processing and transactional services 37,276 582 - Amortization of intangibles 240 145 - Depreciation expense 10,344 2,266 - Other operating expenses [1] 132,004 28,021 - Total operating expenses 421,909 71,196 - Income before income tax 219,799 31,887 - Income tax expense 35,256 9,280 - Net income $ 184,543 $ 22,607 $ - Segment assets $ 60,926,458 $ 14,865,364 $ ( 120,633 ) For the quarter ended June 30, 2025 Reportable (In thousands) Segments Corporate Eliminations Total Popular, Inc. Interest income $ 943,339 $ 1,578 $ ( 1,045 ) $ 943,872 Interest expense 302,670 10,698 ( 1,045 ) 312,323 Net interest income (expense) 640,669 ( 9,120 ) - 631,549 Provision for credit losses (benefit) 48,984 ( 43 ) - 48,941 Non-interest income 153,106 16,107 ( 736 ) 168,477 Personnel costs 192,181 37,174 - 229,355 Professional fees 15,475 12,887 ( 254 ) 28,108 Technology and software expenses 74,571 10,125 - 84,696 Processing and transactional services 37,858 3 - 37,861 Amortization of intangibles 385 - - 385 Depreciation expense 12,610 429 - 13,039 Other operating expenses [1] 160,025 ( 60,181 ) ( 527 ) 99,317 Total operating expenses 493,105 437 ( 781 ) 492,761 Income before income tax 251,686 6,593 45 258,324 Income tax expense 44,536 3,277 71 47,884 Net income $ 207,150 $ 3,316 $ ( 26 ) $ 210,440 Segment assets $ 75,671,189 $ 5,786,893 $ ( 5,392,992 ) $ 76,065,090 [1] Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes, communications expense, business promotion expenses, deposit insurance costs and OREO expenses. 129 For the six months ended June 30, 2025 Intersegment (In thousands) BPPR Popular U.S. Eliminations Interest income $ 1,480,600 $ 382,060 $ ( 2,722 ) Interest expense 420,233 186,924 ( 2,722 ) Net interest income 1,060,367 195,136 - Provision for credit losses 95,964 17,142 - Non-interest income 283,190 13,564 - Personnel costs 316,078 52,829 - Professional fees 26,084 5,189 - Technology and software expenses 128,377 20,433 - Processing and transactional services 74,455 1,179 - Amortization of intangibles 582 400 - Depreciation expense 20,038 4,463 - Other operating expenses [1] 260,758 53,640 - Total operating expenses 826,372 138,133 - Income before income tax 421,221 53,425 - Income tax expense 70,699 16,002 - Net income $ 350,522 $ 37,423 $ - Segment assets $ 60,926,458 $ 14,865,364 $ ( 120,633 ) For the six months ended June 30, 2025 Reportable Total (In thousands) Segments Corporate Eliminations Popular, Inc. Interest income $ 1,859,938 $ 3,114 $ ( 2,182 ) $ 1,860,870 Interest expense 604,435 21,471 ( 2,182 ) 623,724 Net interest income (expense) 1,255,503 ( 18,357 ) - 1,237,146 Provision for credit losses (benefit) 113,106 ( 84 ) - 113,022 Non-interest income 296,754 25,136 ( 1,352 ) 320,538 Personnel costs 368,907 73,161 - 442,068 Professional fees 31,273 24,244 ( 584 ) 54,933 Technology and software expenses 148,810 19,554 - 168,364 Processing and transactional services 75,634 8 - 75,642 Amortization of intangibles 982 - - 982 Depreciation expense 24,501 818 - 25,319 Other operating expenses [1] 314,398 ( 116,583 ) ( 1,350 ) 196,465 Total operating expenses 964,505 1,202 ( 1,934 ) 963,773 Income before income tax 474,646 5,661 582 480,889 Income tax expense 86,701 5,952 294 92,947 Net income (loss) $ 387,945 $ ( 291 ) $ 288 $ 387,942 Segment assets $ 75,671,189 $ 5,786,893 $ ( 5,392,992 ) $ 76,065,090 [1] Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes, communications expense, business promotion expenses, deposit insurance costs and OREO expenses. 130 2024 For the quarter ended June 30, 2024 Intersegment (In thousands) BPPR Popular U.S. Eliminations Interest income $ 737,342 $ 186,595 $ ( 2,622 ) Interest expense 248,597 100,744 ( 2,622 ) Net interest income 488,745 85,851 - Provision for credit losses (benefit) 50,382 ( 3,563 ) - Non-interest income 152,354 6,000 - Personnel costs 145,764 26,062 - Professional fees 14,568 3,154 - Technology and software expenses 60,256 9,784 - Processing and transactional services 38,537 555 - Amortization of intangibles 424 310 - Depreciation expense 13,317 2,204 - Other operating expenses [1] 127,106 27,608 - Total operating expenses 399,972 69,677 - Income before income tax 190,745 25,737 - Income tax expense 33,540 7,989 - Net income $ 157,205 $ 17,748 $ - Segment assets $ 58,464,408 $ 14,287,739 $ ( 264,040 ) For the quarter ended June 30, 2024 Reportable (In thousands) Segments Corporate Eliminations Total Popular, Inc. Interest income 921,315 4,390 ( 3,798 ) 921,907 Interest expense 346,719 10,674 ( 3,798 ) 353,595 Net interest income (expense) $ 574,596 $ ( 6,284 ) $ - $ 568,312 Provision for credit losses (benefit) 46,819 ( 25 ) - 46,794 Non-interest income 158,354 10,716 ( 2,764 ) 166,306 Personnel costs 171,826 25,598 - 197,424 Professional fees 17,722 20,324 ( 302 ) 37,744 Technology and software expenses 70,040 9,712 - 79,752 Processing and transactional services 39,092 4 - 39,096 Amortization of intangibles 734 - - 734 Depreciation expense 15,521 367 - 15,888 Other operating expenses [1] 154,714 ( 54,854 ) ( 922 ) 98,938 Total operating expenses 469,649 1,151 ( 1,224 ) 469,576 Income before income tax 216,482 3,306 ( 1,540 ) 218,248 Income tax expense (benefit) 41,529 ( 476 ) ( 594 ) 40,459 Net income $ 174,953 $ 3,782 $ ( 946 ) $ 177,789 Segment assets $ 72,488,107 $ 5,828,667 $ ( 5,471,702 ) $ 72,845,072 [1] Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes, communications expense, business promotion expenses, deposit insurance costs and OREO expenses. 131 For the six months ended June 30, 2024 Intersegment (In thousands) BPPR Popular U.S. Eliminations Interest income $ 1,451,330 $ 369,478 $ ( 5,909 ) Interest expense 489,744 198,774 ( 5,909 ) Net interest income 961,586 170,704 - Provision for credit losses 111,062 7,872 - Non-interest income 298,023 13,120 ( 56 ) Personnel costs 298,690 53,206 - Professional fees 26,936 6,633 ( 56 ) Technology and software expenses 123,440 18,684 - Processing and transactional services 72,091 1,188 - Amortization of intangibles 908 621 - Depreciation expense 26,326 4,147 - Other operating expenses [1] 258,879 55,240 - Total operating expenses 807,270 139,719 ( 56 ) Income before income tax 341,277 36,233 - Income tax expense 62,746 11,445 - Net income $ 278,531 $ 24,788 $ - Segment assets $ 58,464,408 $ 14,287,739 $ ( 264,040 ) For the six months ended June 30, 2024 Reportable Total (In thousands) Segments Corporate Eliminations Popular, Inc. Interest income $ 1,814,899 $ 8,189 $ ( 7,040 ) $ 1,816,048 Interest expense 682,609 21,423 ( 7,040 ) 696,992 Net interest income (expense) 1,132,290 ( 13,234 ) - 1,119,056 Provision for credit losses (benefit) 118,934 458 - 119,392 Non-interest income 311,087 22,438 ( 3,401 ) 330,124 Personnel costs 351,896 60,905 - 412,801 Professional fees 33,513 33,728 ( 579 ) 66,662 Technology and software expenses 142,124 17,090 - 159,214 Processing and transactional services 73,279 11 - 73,290 Amortization of intangibles 1,529 - - 1,529 Depreciation expense 30,473 776 - 31,249 Other operating expenses [1] 314,119 ( 104,339 ) ( 1,836 ) 207,944 Total operating expenses 946,933 8,171 ( 2,415 ) 952,689 Income before income tax 377,510 575 ( 986 ) 377,099 Income tax expense (benefit) 74,191 22,200 ( 364 ) 96,027 Net income $ 303,319 $ ( 21,625 ) $ ( 622 ) $ 281,072 Segment assets $ 72,488,107 $ 5,828,667 $ ( 5,471,702 ) $ 72,845,072 [1] Other operating expenses includes net occupancy expenses, equipment expense, excluding depreciation, other operating taxes, communications expense, business promotion expenses, deposit insurance costs and OREO expenses. 132 Geographic Information The following information presents selected financial information based on the geographic location where the Corporation conducts its business. The banking operations of BPPR are primarily based in Puerto Rico, where it has the largest retail banking franchise. BPPR also conducts banking operations in the U.S. Virgin Islands, the British Virgin Islands and New York. BPPR’s banking operations in the mainland United States include commercial lending activities in addition to periodic loan participations with PB. During the six months ended June 30, 2025, BPPR participated in loans originated by PB totaling $ 2 9 million (2024 - did no t participate). Total assets for the BPPR segment related to its operations in the United States amounted to $ 1.4 billion (December 31, 2024 - $ 1.6 billion), including $ 104 million in multifamily loans (December 31, 2024 - $ 104 million), $ 435 million in commercial real estate loans (December 31, 2024 - $ 588 million), $ 689 million in C&I loans (December 31, 2024 - $ 685 million), and $ 70 million in unsecured personal loans (December 31, 2024 - $ 113 million). During the six months ended June 30, 2025, the BPPR segment generated $ 51.4 million (June 30, 2024 - $ 60.1 million) in revenues from its operations in the United States, mainly from net interest income. In the Virgin Islands, the BPPR segment offers banking products, including loans and deposits. Total assets for the BPPR segment related to its operations in the U.S. and British Virgin Islands amounted to $ 1.1 billion (December 31, 2024 - $ 1.0 billion). The BPPR segment generated $ 25.0 million in revenues during the six months ended June 30, 2025 (June 30, 2024 - $ 21.3 million) from its operations in the U.S. and British Virgin Islands. Geographic Information Quarter ended Six months ended (In thousands) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Revenues: [1] Puerto Rico $ 636,232 $ 586,338 $ 1,246,193 $ 1,152,082 United States 139,274 127,011 266,490 253,752 Other 24,520 21,269 45,001 43,346 Total consolidated revenues $ 800,026 $ 734,618 $ 1,557,684 $ 1,449,180 [1] Total revenues include net interest income, service charges on deposit accounts, other service fees, mortgage banking activities, net gain (loss), including impairment, on equity securities, net gain on trading account debt securities, adjustments to indemnity reserves on loans sold, and other operating income. Selected Balance Sheet Information: (In thousands) June 30, 2025 December 31, 2024 Puerto Rico Total assets $ 58,522,143 $ 55,888,211 Loans 24,979,110 24,154,610 Deposits 53,876,271 52,099,309 United States Total assets $ 16,236,670 $ 15,890,339 Loans 12,686,305 12,431,859 Deposits 11,529,189 11,030,879 Other Total assets $ 1,306,277 $ 1,266,833 Loans 522,661 526,606 Deposits [1] 1,812,031 1,754,157 [1] Represents deposits from BPPR operations located in the U.S. and British Virgin Islands. 133 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This report includes management’s discussion and analysis (“MD&A”) of the consolidated financial position and financial performance of Popular, Inc. (the “Corporation” or “Popular”). All accompanying tables, financial statements and notes included elsewhere in this report should be considered an integral part of this analysis. The Corporation is a diversified, publicly owned financial holding company subject to the supervision and regulation of the Board of Governors of the Federal Reserve System. The Corporation has operations in Puerto Rico, the United States (“U.S.”) mainland and the U.S. and British Virgin Islands. In Puerto Rico, the Corporation provides retail, mortgage, commercial banking services and auto and equipment leasing and financing through its principal banking subsidiary, Banco Popular de Puerto Rico (“BPPR”), as well as broker-dealer and insurance services through specialized subsidiaries. In the U.S. mainland, the Corporation provides retail, mortgage, and commercial banking services, as well as equipment leasing and financing, through its New York -chartered banking subsidiary, Popular Bank (“PB” or “Popular U.S.”), which has branches located in New York, New Jersey and Florida. Note 32 to the Consolidated Financial Statements presents information about the Corporation’s business segments. As a financial services company, the Corporation’s earnings are significantly affected by general business and economic conditions in the markets which we serve. Lending and deposit activities and fee income generation are influenced by the level of business spending and investment, consumer income, spending and savings, capital market activities, competition, customer preferences, interest rate conditions and prevailing market rates on competing products. The Corporation operates in a highly regulated environment and may be adversely affected by changes in federal and local laws and regulations. Also, competition with other financial institutions, as well as with non-traditional financial service providers and technology companies that provide electronic and internet-based financial solutions and services, could adversely affect its profitability. The Corporation continuously monitors general business and economic conditions, industry-related indicators and trends, competition, interest rate volatility, credit quality indicators, loan, and deposit demand, operational and systems efficiencies, revenue enhancements and changes in the regulation of financial services companies. The description of the Corporation’s business contained in Item 1 of the 2024 Form 10-K, while not all inclusive, discusses additional information about the business of the Corporation. Readers should also refer to “Part I - Item 1A” of the 2024 Form 10-K and “Part II - Item 1A” of this Form 10-Q for a discussion of certain risks and uncertainties to which the Corporation is subject, many beyond the Corporation’s control that, in addition to the other information in this Form 10-Q, readers should consider. The Corporation’s common stock is traded on the NASDAQ Global Select Market under the symbol BPOP. SIGNIFICANT EVENTS Capital Actions On July 16, 2025, the Corporation announced the following capital actions: ● an increase in the Corporation’s quarterly common stock dividend from $0.70 to $0.75 per share, commencing with the dividend payable in the fourth quarter of 2025, subject to the approval by the Corporation’s Board of Directors; and ● a new common stock repurchase program of up to $500 million. This new common stock repurchase program is in addition to the $500 million common stock repurchase program announced by the Corporation on July 24, 2024 (the “2024 Repurchase Program”). The Corporation’s planned common stock repurchases may be executed in open market transactions, privately negotiated transactions, block trades or any other manner determined by the Corporation. The timing, quantity and price of such repurchases will be subject to various factors, including market conditions, the Corporation’s capital position and financial performance, the capital impact of strategic initiatives and regulatory and tax considerations. The common stock repurchase program does not require 134 the Corporation to acquire a specific dollar amount or number of shares and may be modified, suspended or terminated at any time without prior notice. During the quarter and six months ended June 30, 2025, the Corporation repurchased 1,136,390 shares of common stock for $112.0 million at an average price of $98.54 per share and 2,406,959 shares of common stock for $234.2 million at an average price of $97.32 per share, respectively. As of June 30, 2025, the Corporation had repurchased a total of approximately 4.7 million shares of common stock for $451.5 million as part of the 2024 Repurchase Program. OVERVIEW Financial highlights for the quarter ended June 30, 2025 The Corporation’s net income for the quarter ended June 30, 2025 amounted to $210.4 million, an increase of $32.6 million when compared to a net income of $177.8 million for the quarter ended June 30, 2024. Higher net income was mainly driven by higher net interest income, offset in part by an increase in operating expense and income tax expense. Financial highlights for the quarter ended June 30, 2025 include: ● Net interest income amounted to $631.5 million, an increase of $63.2 million when compared to the quarter ended June 30, 2024, driven by loan growth and higher deposits, higher volume of U.S. Treasuries with higher yields, and lower cost of deposits, mainly P.R. public deposits and re-pricing at PB, partially offset by lower income from money market securities. Net interest margin expanded by 27 bps to 3.49%. On a taxable equivalent basis, net interest margin expanded by 37 basis points to 3.85% driven by tax-exempt investment securities at higher yields.