FULLTEXT DEL 5 AV 6
10-Q – 2025-11-10 – d873220d10q.htm
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 – Other real estate owned The following tables present the activity related to Other Real Estate Owned (“OREO”), for the quarters and nine months ended September 30, 2025 and 2024. For the quarter ended September 30, 2025 OREO OREO (In thousands) Commercial/Construction Mortgage Total Balance at beginning of period $ 5,897 $ 40,229 $ 46,126 Write-downs in value ( 70 ) ( 344 ) ( 414 ) Additions 152 8,731 8,883 Sales ( 323 ) ( 11,343 ) ( 11,666 ) Other adjustments - 21 21 Ending balance $ 5,656 $ 37,294 $ 42,950 For the quarter ended September 30, 2024 OREO OREO (In thousands) Commercial/Construction Mortgage Total Balance at beginning of period $ 9,428 $ 60,797 $ 70,225 Write-downs in value ( 39 ) ( 549 ) ( 588 ) Additions 1,125 7,966 9,091 Sales ( 588 ) ( 15,112 ) ( 15,700 ) Ending balance $ 9,926 $ 53,102 $ 63,028 For the nine months ended September 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 ( 934 ) ( 2,059 ) ( 2,993 ) Additions 723 25,428 26,151 Sales ( 2,557 ) ( 34,717 ) ( 37,274 ) Other adjustments - ( 202 ) ( 202 ) Ending balance $ 5,656 $ 37,294 $ 42,950 For the nine months ended September 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 ( 1,103 ) ( 1,260 ) ( 2,363 ) Additions 6,985 32,748 39,733 Sales ( 7,145 ) ( 47,548 ) ( 54,693 ) Other adjustments - ( 65 ) ( 65 ) Ending balance $ 9,926 $ 53,102 $ 63,028 79 Note 10 − Other assets The caption of other assets in the Consolidated Statements of Financial Condition consists of the following major categories: (In thousands) September 30, 2025 December 31, 2024 Net deferred tax assets (net of valuation allowance) $ 837,375 $ 926,329 Investments under the equity method 249,139 251,537 Prepaid taxes 54,447 42,909 Other prepaid expenses 34,639 28,376 Capitalized software costs 182,204 136,442 Derivative assets 27,700 25,975 Trades receivable from brokers and counterparties 9,670 588 Receivables from investments maturities 800 14,600 Principal, interest and escrow servicing advances 31,226 43,793 Guaranteed mortgage loan claims receivable 10,654 17,226 Operating ROU assets 99,384 93,389 Finance ROU assets 23,706 19,174 Assets for pension benefit 35,137 33,233 Others 148,805 164,188 Total other assets $ 1,744,886 $ 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 September 30, 2025 Software development costs $ 89,878 $ 34,203 $ 55,675 Software license costs 59,845 32,476 27,369 Cloud computing arrangements 110,472 11,312 99,160 Total Capitalized software costs [1] [2] $ 260,195 $ 77,991 $ 182,204 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: 80 Quarters ended September 30, Nine months ended September 30, (In thousands) 2025 2024 2025 2024 Software development and license costs $ 22,157 $ 21,118 $ 66,139 $ 57,431 Cloud computing arrangements 2,500 1,514 5,328 3,052 Total amortization expense $ 24,657 $ 22,632 $ 71,467 $ 60,483 81 Note 11 – Goodwill and other intangible assets Goodwill The following table shows the changes in the carrying amount of goodwill for the nine months ended September 30, 2025 and 2024, by reportable segments (refer to Note 32 for the definition of the Corporation’s reportable segment): September 30, 2025 Balance at Goodwill Balance at (In thousands) January 1, 2025 impairment September 30, 2025 Banco Popular de Puerto Rico $ 434,909 $ - $ 434,909 Popular U.S. 368,045 ( 13,000 ) 355,045 Total Popular, Inc. $ 802,954 $ ( 13,000 ) $ 789,954 September 30, 2024 Balance at Goodwill Balance at (In thousands) January 1, 2024 impairment September 30, 2024 Banco Popular de Puerto Rico $ 436,383 $ - $ 436,383 Popular U.S. 368,045 - 368,045 Total Popular, Inc. $ 804,428 $ - $ 804,428 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 September 30, 2025 Core deposits $ 12,810 $ 12,810 $ - Other customer relationships 14,286 9,586 4,700 Total other intangible assets $ 27,096 $ 22,396 $ 4,700 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 September 30, 2025, the Corporation recognized $ 0.4 million in amortization expense related to other intangible assets with definite useful lives (September 30, 2024 - $ 0.7 million). During the nine months ended September 30, 2025, the Corporation recognized $ 1.4 million in amortization related to other intangible assets with definite useful lives (September 30, 2024 - $ 2.2 million). The following table presents the estimated amortization of the intangible assets with definite useful lives for each of the following periods: 82 (In thousands) Remaining 2025 $ 384 Year 2026 1,440 Year 2027 959 Year 2028 959 Year 2029 958 Results of the Annual Goodwill Impairment Test The Corporation’s goodwill and other identifiable intangible assets having an indefinite useful life are tested for impairment, at least annually and on a more frequent basis if events or circumstances indicate impairment could have taken place. Such events could include, among others, a significant adverse change in the business climate, an adverse action by a regulator, an unanticipated change in the competitive environment and a decision to change the operations or dispose of a reporting unit. Management monitors events or changes in circumstances between annual tests to determine if these events or changes in circumstances would more likely than not reduce the fair value of its reporting units below their carrying amounts. The reporting units evaluated are one level below the business segments and correspond to the legal entities within each reportable segment. In accordance with push-down accounting, all goodwill is assigned to the reporting units following a business combination. When evaluating goodwill for impairment, the Corporation may decide to first perform a qualitative assessment, or “Step Zero” impairment test, to determine whether it is more likely than not that impairment has occurred. The qualitative assessment includes a review of macroeconomic conditions, industry and market considerations, internal cost factors, and our own overall financial and share price performance, among other factors. If it is determined that it is more likely than not that the carrying amounts of our reporting units exceed their fair value, the Corporation will perform a quantitative assessment and calculate the estimated fair value of the respective reporting unit. If the carrying amount of a reporting unit’s goodwill exceeds the fair value of that goodwill, an impairment loss is recognized. To assess a reporting unit’s fair value, the Corporation generally uses a combination of methods such as discounted cash flow analysis and market multiples. The financial projections used in the discounted cash flow (“DCF”) valuation analysis are based on the most recent (as of the valuation date) projections presented to the Corporation’s Asset / Liability Management Committee (“ALCO”). These projections reflect management’s expectations for the reporting unit’s financial prospects considering economic and industry conditions. The Corporation evaluates the results obtained under the valuation methodology to identify and understand the key value drivers, to ascertain that the results obtained are reasonable and appropriate under the circumstances. Elements considered include current market and economic conditions, developments in specific lines of business, and any particular features of the individual reporting units. The Corporation completed its annual goodwill impairment evaluation during the third quarter of 2025, using July 31, 2025 as the evaluation date. Through a qualitative analysis, Step Zero, the Corporation determined that for all reporting units, except for the Popular Equipment Finance (‘’PEF’’) reporting unit, it is more-likely-than-not that the fair value exceeded the carrying value. As a result, the Corporation performed a quantitative test to assess PEF’s goodwill impairment. The results of the PEF annual goodwill impairment test as of July 31, 2025, indicated that the estimated fair value was below it’s carrying amount. Accordingly, the Corporation recognized a goodwill impairment charge of $ 13.0 million, which was mainly driven by lower projected earnings for the forecasted period, primarily due to lower lending activity. The following tables present the gross amount of goodwill and accumulated impairment losses by reportable segments. 83 September 30, 2025 Balance at Balance at September 30, Accumulated September 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. 564,456 209,411 355,045 Total Popular, Inc. $ 1,003,166 $ 213,212 $ 789,954 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 84 Note 12 – Deposits Total deposits as of the end of the periods presented consisted of: (In thousands) September 30, 2025 December 31, 2024 Savings accounts $ 14,411,671 $ 14,224,271 NOW, money market and other interest -bearing demand deposits 27,606,313 26,507,637 Total savings, NOW, money market and other interest-bearing demand deposits 42,017,984 40,731,908 Certificates of deposit: Under $250,000 5,717,369 5,383,331 $250,000 and over 3,904,025 3,629,551 Total certificates of deposit 9,621,394 9,012,882 Total interest-bearing deposits $ 51,639,378 $ 49,744,790 Non- interest-bearing deposits $ 14,874,026 $ 15,139,555 Total deposits $ 66,513,404 $ 64,884,345 A summary of certificates of deposits by maturity at September 30, 2025 follows: (In thousands) 2025 $ 3,400,879 2026 3,671,826 2027 935,141 2028 697,796 2029 436,147 2030 and thereafter 479,605 Total certificates of deposit $ 9,621,394 At September 30, 2025, the Corporation had brokered deposits amounting to $ 1.8 billion (December 31, 2024 - $ 1.6 billion). The aggregate amount of overdrafts in demand deposit accounts that were reclassified to loans was $ 8.4 million at September 30, 2025 (December 31, 2024 - $ 10.4 million). At September 30, 2025, Puerto Rico government deposits amounted to $ 20.1 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. 85 Note 13 – Borrowings Assets sold under agreements to repurchase Assets sold under agreements to repurchase amounted to $ 57 million at September 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 September 30, 2025 December 31, 2024 Repurchase Repurchase (In thousands) liability liability U.S. Treasury securities Within 30 days $ 28,378 $ 22,591 After 30 to 90 days 24,065 13,813 Total U.S. Treasury securities 52,443 36,404 Mortgage-backed securities Within 30 days 4,410 4,924 After 30 to 90 days - 13,505 Total mortgage-backed securities 4,410 18,429 Total $ 56,853 $ 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 September 30, 2025 and December 31, 2024, other short-term borrowings consisted of $ 400 million and $ 225 million, respectively, in FHLB Advances. 86 Notes Payable The following table presents the composition of notes payable at September 30, 2025 and December 31, 2024. (In thousands) September 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 % $ 195,312 $ 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 $ 3,751 396,249 395,198 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 $ 241 198,393 198,373 Total notes payable $ 789,954 $ 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 September 30, 2025 is included in the table below. Assets sold under Short-term (In thousands) agreements to repurchase borrowings Notes payable Total 2025 $ 56,853 $ 400,000 $ 30,692 $ 487,545 2026 - - 74,500 74,500 2027 - - 6,112 6,112 2028 - - 440,599 440,599 2029 - - 39,658 39,658 Later years - - 198,393 198,393 Total borrowings $ 56,853 $ 400,000 $ 789,954 $ 1,246,807 At September 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 $ 0.6 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 September 30, 2025, the Corporation had borrowing facilities at the discount window of the Federal Reserve Bank of New York amounting to $ 11.2 billion (December 31, 2024 - $ 7.0 billion), which remained unused at September 30, 2025 and December 31, 2024. The facilities are a collateralized source of credit that is highly dependable even under difficult market conditions. 87 Note 14 − Other liabilities The caption of other liabilities in the Consolidated Statements of Financial Condition consists of the following major categories: (In thousands) September 30, 2025 December 31, 2024 Accrued expenses $ 332,204 $ 334,145 Accrued interest payable 53,682 60,723 Accounts payable 99,649 91,218 Dividends payable 50,376 49,546 Trades payable 306,775 495,139 Liability for GNMA loans sold with an option to repurchase 9,389 9,108 Reserves for loan indemnifications 2,240 2,779 Reserve for operational losses 23,279 29,465 Operating lease liabilities 109,328 103,198 Finance lease liabilities 27,524 23,141 Pension benefit obligation 5,618 5,816 Postretirement benefit obligation 97,828 99,172 Others 72,023 68,396 Total other liabilities $ 1,189,915 $ 1,371,846 88 Note 15 – Stockholders’ equity As of September 30, 2025, stockholders’ equity totaled $ 6.1 billion. During the nine months ended September 30, 2025, the Corporation declared cash dividends of $ 2.15 (2024 - $ 1.86 ) per common share amounting to $ 146.6 million (2024 - $ 134.3 million). The quarterly dividend of $ 0.75 per share declared to stockholders of record as of the close of business on September 12, 2025 was paid on October 1, 2025 . During the quarter ended September 30, 2024, the Corporation completed the repurchase of 599,096 shares of common stock for $ 58.8 million at an average price of $ 98.11 per share under the 2024 common stock repurchase program. During the quarter and nine months ended September 30, 2025, the Corporation repurchased 1,000,862 shares of common stock for $ 119.4 million at an average price of $ 119.33 per share, and 3,407,821 shares of common stock for $ 353.7 million at an average price of $ 103.78 , per share, respectively, as part of the 2024 and 2025 common stock repurchases programs. As of September 30, 2025, $ 429.0 million remained available for stock repurchase under the active repurchase authorization. 89 Note 16 – Other comprehensive income (loss) The following table presents changes in accumulated other comprehensive income (loss) by component for the quarters and nine months ended September 30, 2025 and 2024. Changes in Accumulated Other Comprehensive Loss by Component [1] Quarters ended Nine months ended September 30, September 30, (In thousands) 2025 2024 2025 2024 Foreign currency translation Beginning Balance $ ( 70,512 ) $ ( 68,383 ) $ ( 71,365 ) $ ( 64,528 ) Other comprehensive (loss) income ( 14,524 ) 615 ( 13,670 ) ( 3,240 ) Net change ( 14,524 ) 615 ( 13,670 ) ( 3,240 ) Ending balance $ ( 85,036 ) $ ( 67,768 ) $ ( 85,035 ) $ ( 67,768 ) Adjustment of pension and postretirement benefit plans Beginning Balance $ ( 91,851 ) $ ( 113,371 ) $ ( 94,692 ) $ ( 117,894 ) Amounts reclassified from accumulated other comprehensive loss for amortization of net losses 1,421 2,261 4,262 6,784 Net change 1,421 2,261 4,262 6,784 Ending balance $ ( 90,430 ) $ ( 111,110 ) $ ( 90,430 ) $ ( 111,110 ) Unrealized net holding losses on debt securities Beginning Balance $ ( 1,233,294 ) $ ( 1,696,528 ) $ ( 1,495,183 ) $ ( 1,713,109 ) Other comprehensive income 94,747 326,148 283,394 271,985 Amounts reclassified from accumulated other comprehensive loss for amortization of net unrealized losses of debt securities transferred from available-for- sale to held-to-maturity 37,753 36,264 110,994 107,008 Net change 132,500 362,412 394,388 378,993 Ending balance $ ( 1,100,794 ) $ ( 1,334,116 ) $ ( 1,100,795 ) $ ( 1,334,116 ) Total accumulated other comprehensive loss $ ( 1,276,260 ) $ ( 1,512,994 ) $ ( 1,276,260 ) $ ( 1,512,994 ) [1] All amounts presented are net of tax. 90 The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) during the quarters and nine months ended September 30, 2025 and 2024. Reclassifications Out of Accumulated Other Comprehensive Loss Quarters ended Nine months ended Affected Line Item in the September 30, September 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 ) $ ( 6,817 ) $ ( 10,854 ) Total before tax ( 2,272 ) ( 3,618 ) ( 6,817 ) ( 10,854 ) Income tax benefit 851 1,357 2,555 4,070 Total net of tax $ ( 1,421 ) $ ( 2,261 ) $ ( 4,262 ) $ ( 6,784 ) 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 $ ( 47,191 ) $ ( 45,331 ) $ ( 138,743 ) $ ( 133,761 ) Total before tax ( 47,191 ) ( 45,331 ) ( 138,743 ) ( 133,761 ) Income tax expense 9,438 9,067 27,749 26,753 Total net of tax $ ( 37,753 ) $ ( 36,264 ) $ ( 110,994 ) $ ( 107,008 ) Total reclassification adjustments, net of tax $ ( 39,174 ) $ ( 38,525 ) $ ( 115,256 ) $ ( 113,792 ) 91 Note 17 – Guarantees The Corporation has obligations upon the occurrence of certain events under financial guarantees provided in certain contractual agreements. Also, from time to time, the Corporation securitized mortgage loans into guaranteed mortgage-backed securities subject, in certain instances, to lifetime credit recourse on the loans that serve as collateral for the mortgage-backed securities. The Corporation has not sold any mortgage loans subject to credit recourse since 2009. Also, from time to time, the Corporation may sell, in bulk sale transactions, residential mortgage loans and Small Business Administration (“SBA”) commercial loans subject to credit recourse or to certain representations and warranties from the Corporation to the purchaser. These representations and warranties may relate, for example, to borrower creditworthiness, loan documentation, collateral, prepayment and early payment defaults. The Corporation may be required to repurchase the loans under the credit recourse agreements or representation and warranties At September 30, 2025, the Corporation serviced $ 445 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. During the quarter and nine months ended September 30, 2025, the Corporation repurchased $ 0.2 million and $ 1.1 million, respectively, of unpaid principal balance in mortgage loans subject to the credit recourse provisions (September 30, 2024 - $ 0.5 million and $ 1.5 million, respectively). At September 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). 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 September 30, 2025, the Corporation serviced $ 8.4 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 September 30, 2025, the outstanding balance of funds advanced by the Corporation under such mortgage loan servicing agreements was $ 31 million (December 31, 2024 - $ 44 million). To the extent the mortgage loans underlying the Corporation’s servicing portfolio experience increased delinquencies, the Corporation would be required to dedicate additional cash resources to comply with its obligation to advance funds as well as incur additional administrative costs related to increases in collection efforts. Popular, Inc. Holding Company (“PIHC”) fully and unconditionally guarantees certain borrowing obligations issued by certain of its 100 % owned consolidated subsidiaries amounting to $ 94 million at September 30, 2025 and December 31, 2024, respectively. In addition, at both September 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. 92 Note 18 – Commitments and contingencies Off-balance sheet risk The Corporation is a party to financial instruments with off-balance sheet credit risk in the normal course of business to meet the financial needs of its customers. These financial instruments include loan commitments, letters of credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Statements of Financial Condition. The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, standby letters of credit and financial guarantees is represented by the contractual notional amounts of those instruments. The Corporation uses the same credit policies in making these commitments and conditional obligations as it does for those reflected on the Consolidated Statements of Financial Condition. Financial instruments with off-balance sheet credit risk, whose contract amounts represent potential credit risk as of the end of the periods presented were as follows: (In thousands) September 30, 2025 December 31, 2024 Commitments to extend credit: Credit card lines $ 6,266,974 $ 5,599,823 Commercial lines of credit 4,422,977 3,971,331 Construction lines of credit 1,126,310 1,131,824 Other consumer unused credit commitments 275,462 260,121 Commercial letters of credit 14,920 5,002 Standby letters of credit 130,856 144,845 Commitments to originate or fund mortgage loans 16,091 29,604 At September 30, 2025 and December 31, 2024, the Corporation maintained a reserve of $ 14 million and $ 15 million, respectively, for potential losses associated with unfunded loan commitments related to commercial and construction lines of credit. Other commitments At September 30, 2025 and December 31, 2024, the Corporation also maintained other non-credit commitments for $ 6 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 28 to the Consolidated Financial Statements. Puerto Rico has faced significant fiscal and economic challenges for over a decade. In response to such challenges, the U.S. Congress enacted PROMESA in 2016, which, among other things, established the Oversight Board and a framework for the restructuring of the debts of the Commonwealth, its instrumentalities and municipalities. The Commonwealth and several of its instrumentalities have availed themselves of debt restructuring proceedings under PROMESA. As of the date of this report, while municipalities have been designated as covered entities under PROMESA, no municipality has commenced or has been authorized by the Oversight Board to commence, any such debt restructuring proceeding under PROMESA. At September 30, 2025, the Corporation’s direct exposure to the Puerto Rico government and its instrumentalities and municipalities totaled $ 391 million, of which $ 342 million were outstanding ($ 336 million and $ 336 million at December 31, 2024). The Corporation’s exposure at September 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, $ 333 million consists of loans and $ 9 million are securities ($ 323 million and $ 13 million at December 31, 2024). Substantially all of the amount outstanding at September 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 September 30, 2025, 93 approximately 76 % of the Corporation’s exposure to municipal loans and securities was concentrated in the municipalities of San Juan, Guaynabo, Carolina and Caguas. The following table details the loans and investments representing the Corporation’s direct exposure to the Puerto Rico government according to their maturities as of September 30, 2025 : (In thousands) Investment Portfolio Loans Total Outstanding Total Exposure Central Government Within 1 year $ - $ - $ - $ 47,400 After 10 years 41 - 41 41 Total Central Government 41 - 41 47,441 Municipalities Within 1 year 2,605 11,574 14,179 16,179 After 1 to 5 years 5,660 166,515 172,175 172,175 After 5 to 10 years 450 124,087 124,537 124,537 After 10 years - 30,991 30,991 30,991 Total Municipalities 8,715 333,167 341,882 343,882 Total Direct Government Exposure $ 8,756 $ 333,167 $ 341,923 $ 391,323 In addition, at September 30, 2025, the Corporation had $ 208 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 $ 165 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 September 30, 2025, $ 36 million in bonds issued by HFA which are secured by second mortgage loans on Puerto Rico residential properties, and for which HFA also provides insurance to cover losses in the event of a borrower default and upon the satisfaction of certain other conditions (December 31, 2024 - $ 38 million). In the event that the mortgage loans insured by HFA and held by the Corporation directly or those serving as collateral for the HFA bonds default and the collateral is insufficient to satisfy the outstanding balance of these loans, HFA’s ability to honor its insurance will depend, among other factors, on the financial condition of HFA at the time such obligations become due and payable. The Corporation does not consider the government guarantee when estimating the credit losses associated with this portfolio. Although the Governor is currently authorized by local legislation to impose a temporary moratorium on the financial obligations of the HFA, a moratorium on such obligations has not been imposed as of the date hereof. BPPR’s commercial loan portfolio also includes loans to private borrowers who are service providers, lessors, suppliers or have other relationships with the government. These borrowers could be negatively affected by the Commonwealth’s fiscal crisis and the ongoing Title III proceedings under PROMESA. Similarly, BPPR’s mortgage and consumer loan portfolios include loans to government employees and retirees, which could also be negatively affected by fiscal measures such as employee layoffs or furloughs or reductions in pension benefits. In addition, $ 2.4 billion of residential mortgages and $ 80.9 million commercial loans were insured or guaranteed by the U.S. Government or its agencies at September 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 September 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. PROMESA does not apply to the USVI and, as such, there is currently no federal legislation permitting the restructuring of the debts of the USVI and its public corporations and instrumentalities. 94 At September 30, 2025, the Corporation had operations in the British Virgin Islands (“BVI”) and it had a loan portfolio amounting to $ 193 million comprised of various retail and commercial clients, compared to a loan portfolio of $ 196 million at December 31, 2024. At September 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. The last payment for the FDIC special assessment is projected to be in the third quarter, September 2026. Legal Proceedings The nature of Popular’s business ordinarily generates claims, litigation, arbitration, regulatory and governmental investigations, and legal and administrative cases and proceedings (collectively, “Legal Proceedings”). Popular’s Legal Proceedings may involve various lines of business and include claims relating to contract, torts, consumer protection, securities, antitrust, employment, tax and other laws. The recovery sought in Legal Proceedings may include substantial or indeterminate compensatory damages, punitive damages, injunctive relief, or recovery on a class-wide basis. When the Corporation determines that it has meritorious defenses to the claims asserted, it vigorously defends itself. The Corporation will consider the settlement of cases (including cases where it has meritorious defenses) when, in management’s judgment, it is in the best interest of the Corporation and its stockholders to do so. On at least a quarterly basis, Popular assesses its liabilities and contingencies relating to outstanding Legal Proceedings utilizing the most current information available. For matters where it is probable that the Corporation will incur a material loss and the amount can be reasonably estimated, the Corporation establishes an accrual for the loss. Once established, the accrual is adjusted on at least a quarterly basis to reflect any relevant developments, as appropriate. For matters where a material loss is not probable, or the amount of the loss cannot be reasonably estimated, no accrual is established. In certain cases, exposure to loss exists in excess of any accrual to the extent such loss is reasonably possible, but not probable. Management believes and estimates that the range of reasonably possible losses (with respect to those matters where such limits may be determined in excess of amounts accrued) for current Legal Proceedings ranged from $ 0 to approximately $ 7.2 million as of September 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. 95 Note 19 – Non-consolidated variable interest entities The Corporation is involved with two statutory trusts which it created to issue trust preferred securities to the public. These trusts are deemed to be variable interest entities (“VIEs”) since the equity investors at risk have no substantial decision-making rights. The Corporation does not hold any variable interest in the trusts, and therefore, cannot be the trusts’ primary beneficiary. Furthermore, the Corporation concluded that it did not hold a controlling financial interest in these trusts since the decisions of the trusts are predetermined through the trust documents and the guarantee of the trust preferred securities is irrelevant since in substance the sponsor is guaranteeing its own debt. Also, the Corporation is involved with various special purpose entities mainly in guaranteed mortgage securitization transactions, including GNMA and FNMA. The Corporation has also engaged in securitization transactions with FHLMC, but considers its exposure in the form of servicing fees and servicing advances not to be significant at September 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 21 to the Consolidated Financial Statements for additional information on the debt securities outstanding at September 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 September 30, 2025 and December 31, 2024. 96 (In thousands) September 30, 2025 December 31, 2024 Assets Servicing assets: Mortgage servicing rights $ 76,673 $ 84,356 Total servicing assets $ 76,673 $ 84,356 Other assets: Servicing advances $ 4,017 $ 6,112 Total other assets $ 4,017 $ 6,112 Total assets $ 80,690 $ 90,468 Maximum exposure to loss $ 80,690 $ 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 $ 6.1 billion at September 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 September 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 September 30, 2025. 97 Note 20 – Related party transactions Centro Financiero BHD, S.A. At September 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 nine months ended September 30, 2025, the Corporation recorded $ 17.0 million in equity pickup (September 30, 2024 - $ 29.6 million), including the net impact of $ 33.8 million from net earnings (September 30, 2024 - $ 31.5 million), offset by ($ 16.8 ) million recorded through Other Comprehensive Income (September 30, 2024 - ($ 1.9 ) million) related to foreign currency translation adjustments and changes in the fair value of available for sale securities. At September 30, 2025, the investment in BHD had a carrying amount of $ 236.5 million (December 31, 2024 - $ 239.5 million) and the Corporation received $ 20 million in cash dividend distributions during the nine months ended September 30, 2025 (September 30, 2024 - $ 19.4 million). 98 Note 21 – Fair value measurement ASC Subtopic 820-10 “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels in order to increase consistency and comparability in fair value measurements and disclosures. The hierarchy is broken down into three levels based on the reliability of inputs as follows: ● Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Corporation has the ability to access at the measurement date. Valuation on these instruments does not necessitate a significant degree of judgment since valuations are based on quoted prices that are readily available in an active market. ● Level 2 - Quoted prices other than those included in Level 1 that are observable either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or that can be corroborated by observable market data for substantially the full term of the financial instrument. ● Level 3 - Inputs are unobservable and significant to the fair value measurement. Unobservable inputs reflect the Corporation’s own judgements about assumptions that market participants would use in pricing the asset or liability. The Corporation maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Fair value is based upon quoted market prices when available. If listed prices or quotes are not available, the Corporation employs internally-developed models that primarily use market-based inputs including yield curves, interest rates, volatilities, and credit curves, among others. Valuation adjustments are limited to those necessary to ensure that the financial instrument’s fair value is adequately representative of the price that would be received or paid in the marketplace. These adjustments include amounts that reflect counterparty credit quality, the Corporation’s credit standing, constraints on liquidity and unobservable parameters that are applied consistently. There have been no changes in the Corporation’s methodologies used to estimate the fair value of assets and liabilities from those disclosed in the 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 September 30, 2025 and December 31, 2024: 99 At September 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 $ 6,423,246 $ 9,283,519 $ - $ - $ 15,706,765 Collateralized mortgage obligations - federal agencies - 104,700 - - 104,700 Mortgage-backed securities - 4,873,777 431 - 4,874,208 Other - - 750 - 750 Total debt securities available-for-sale $ 6,423,246 $ 14,261,996 $ 1,181 $ - $ 20,686,423 Trading account debt securities, excluding derivatives: U.S. Treasury securities $ 8,026 $ 10 $ - $ - $ 8,036 Obligations of Puerto Rico, States and political subdivisions - 46 - - 46 Collateralized mortgage obligations - 595 - - 595 Mortgage-backed securities - 24,227 84 - 24,311 Other - - 118 - 118 Total trading account debt securities, excluding derivatives $ 8,026 $ 24,878 $ 202 $ - $ 33,106 Equity securities $ - $ 50,047 $ - $ 825 $ 50,872 Mortgage servicing rights - - 99,523 - 99,523 Loans held-for-sale - 4,785 - - 4,785 Derivatives - 27,716 - - 27,716 Total assets measured at fair value on a recurring basis $ 6,431,272 $ 14,369,422 $ 100,906 $ 825 $ 20,902,425 Liabilities Derivatives $ - $ ( 26,157 ) $ - $ - $ ( 26,157 ) Total liabilities measured at fair value on a recurring basis $ - $ ( 26,157 ) $ - $ - $ ( 26,157 ) 100 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 September 30, 2025 and December 31, 2024. (In thousands) September 30, 2025 Aggregate Unpaid Fair Value Principal Balance Difference Loans held for sale $ 4,785 $ 4,715 $ 70 (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 September 30, 2025 and December 31, 2024. 101 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 nine months ended September 30, 2025 and 2024 and excludes nonrecurring fair value measurements of assets no longer outstanding as of the reporting date. Nine months ended September 30, 2025 (In thousands) Level 1 Level 2 Level 3 Total NONRECURRING FAIR VALUE MEASUREMENTS Assets Write-downs Other real estate owned [1] $ - $ - $ 3,983 $ 3,983 $ ( 1,351 ) Other foreclosed assets [1] - - 196 196 ( 51 ) Total assets measured at fair value on a nonrecurring basis $ - $ - $ 4,179 $ 4,179 $ ( 1,402 ) [1] 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. Nine months ended September 30, 2024 (In thousands) Level 1 Level 2 Level 3 Total NONRECURRING FAIR VALUE MEASUREMENTS Assets Write-downs Loans [1] $ - $ - $ 4,166 $ 4,166 $ ( 654 ) Other real estate owned [2] - - 5,749 5,749 ( 1,889 ) Other foreclosed assets [2] - - 174 174 ( 38 ) Total assets measured at fair value on a nonrecurring basis $ - $ - $ 10,089 $ 10,089 $ ( 2,581 ) [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. 102 The following tables present the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarters and nine months ended September 30, 2025 and 2024. Quarter ended September 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 June 30, 2025 $ 432 $ 750 $ 84 $ 122 $ 103,077 $ 104,465 Gains (losses) included in earnings - - - ( 4 ) ( 3,835 ) ( 3,839 ) Gains (losses) included in OCI ( 1 ) - - - - ( 1 ) Additions - - - - 281 281 Balance at September 30, 2025 $ 431 $ 750 $ 84 $ 118 $ 99,523 $ 100,906 Changes in unrealized gains (losses) included in earnings relating to assets still held at September 30, 2025 $ - $ - $ - $ - $ ( 1,505 ) $ ( 1,505 ) Nine months ended September 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 - - - ( 15 ) ( 9,359 ) ( 9,374 ) Gains (losses) included in OCI ( 3 ) - - - - ( 3 ) Additions - - - - 779 779 Settlements ( 50 ) - - - - ( 50 ) Transfers out of Level 3 - ( 1,500 ) - - - ( 1,500 ) Balance at September 30, 2025 $ 431 $ 750 $ 84 $ 118 $ 99,523 $ 100,906 Changes in unrealized gains (losses) included in earnings relating to assets still held at September 30, 2025 $ - $ - $ - $ 23 $ ( 2,482 ) $ ( 2,459 ) 103 Quarter ended September 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 June 30, 2024 $ 581 $ 2,000 $ 84 $ 158 $ 113,386 $ 116,209 Gains (losses) included in earnings - - - ( 4 ) ( 4,896 ) ( 4,900 ) Gains (losses) included in OCI 2 - - - - 2 Additions - - - - 337 337 Settlements ( 25 ) - - - - ( 25 ) Balance at September 30, 2024 $ 558 $ 2,000 $ 84 $ 154 $ 108,827 $ 111,623 Changes in unrealized gains (losses) included in earnings relating to assets still held at September 30, 2024 $ - $ - $ - $ 6 $ ( 2,577 ) $ ( 2,571 ) Nine months ended September 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 ) - - ( 13 ) ( 10,280 ) ( 10,793 ) Gains (losses) included in OCI 2 - - - - - 2 Additions - - - - - 998 998 Settlements ( 50 ) - ( 5 ) ( 28 ) - - ( 83 ) Balance at September 30, 2024 $ 558 $ 2,000 $ - $ 84 $ 154 $ 108,827 $ 111,623 Changes in unrealized gains (losses) included in earnings relating to assets still held at September 30, 2024 $ - $ - $ - $ - $ 18 $ ( 3,279 ) $ ( 3,261 ) 104 Gains and losses (realized and unrealized) included in earnings for the quarters and nine months ended September 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 September 30, 2025 Nine months ended September 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 $ ( 3,835 ) $ ( 1,505 ) $ ( 9,359 ) $ ( 2,482 ) Trading account profit (loss) ( 4 ) - ( 15 ) 23 Total $ ( 3,839 ) $ ( 1,505 ) $ ( 9,374 ) $ ( 2,459 ) Quarter ended September 30, 2024 Nine months ended September 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 $ ( 4,896 ) $ ( 2,577 ) $ ( 10,280 ) $ ( 3,279 ) Trading account profit (loss) ( 4 ) 6 ( 13 ) 18 Provision for credit losses - - ( 500 ) - Total $ ( 4,900 ) $ ( 2,571 ) $ ( 10,793 ) $ ( 3,261 ) 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 September 30, 2025 and 2024. Fair value at September 30, (In thousands) 2025 Valuation technique Unobservable inputs Weighted average (range) [1] Other - trading $ 118 Discounted cash flow model Weighted average life 2 years Yield 12 .0% Prepayment speed 10.8 % Other real estate owned $ 34 [2] External appraisal Haircut applied on external appraisals 20 % [1] Weighted average of significant unobservable inputs used to develop Level 3 fair value measurements were calculated by relative fair value. [2] Other real estate owned in which haircuts were not applied to external appraisals were excluded from this table. 105 Fair value at September 30, (In thousands) 2024 Valuation technique Unobservable inputs Weighted average (range) [1] Other - trading $ 154 Discounted cash flow model Weighted average life 2.3 years Yield 12 .0% Prepayment speed 10.8 % Loans held-in-portfolio $ 4,166 [2] External appraisal Haircut applied on external appraisals 7.5 % ( 5 .0% - 10 .0%) Other real estate owned $ 16 [3] External appraisal Haircut applied on external appraisals 35 .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. [3] Other real estate owned in which haircuts were not applied to external appraisals were excluded from this table. 106 Note 22 – Fair value of financial instruments The fair value of financial instruments is the amount at which an asset or obligation could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. For those financial instruments with no quoted market prices available, fair values have been estimated using present value calculations or other valuation techniques, as well as management’s best judgment with respect to current economic conditions, including discount rates, estimates of future cash flows, and prepayment assumptions. Many of these estimates involve various assumptions and may vary significantly from amounts that could be realized in actual transactions. The fair values reflected herein have been determined based on the prevailing rate environment at September 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. 107 September 30, 2025 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Assets: Cash and due from banks $ 377,079 $ 377,079 $ - $ - $ - $ 377,079 Money market investments 4,754,391 4,744,211 10,180 - - 4,754,391 Trading account debt securities, excluding derivatives [1] 33,106 8,026 24,878 202 - 33,106 Debt securities available-for-sale [1] 20,686,423 6,423,246 14,261,996 1,181 - 20,686,423 Debt securities held-to-maturity: U.S. Treasury securities $ 7,374,072 $ - $ 7,405,080 $ - $ - $ 7,405,080 Obligations of Puerto Rico, States and political subdivisions 45,760 - 6,799 40,334 - 47,133 Collateralized mortgage obligation-federal agency 1,506 - 1,315 - - 1,315 Securities in wholly owned statutory business trusts 5,960 - 5,960 - - 5,960 Total debt securities held-to-maturity $ 7,427,298 $ - $ 7,419,154 $ 40,334 $ - $ 7,459,488 Equity securities: FHLB stock $ 58,552 $ - $ 58,552 $ - $ - $ 58,552 FRB stock 102,038 - 102,038 - - 102,038 Other investments 58,403 - 50,047 8,137 825 59,009 Total equity securities $ 218,993 $ - $ 210,637 $ 8,137 $ 825 $ 219,599 Loans held-for-sale $ 7,783 $ - $ 7,783 $ - $ - $ 7,783 Loans held-in-portfolio 37,900,938 - - 37,105,428 - 37,105,428 Mortgage servicing rights 99,523 - - 99,523 - 99,523 Derivatives 27,716 - 27,716 - - 27,716 September 30, 2025 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Liabilities: Deposits: Demand deposits $ 56,892,010 $ - $ 56,892,010 $ - $ - $ 56,892,010 Time deposits 9,621,394 - 9,419,413 - - 9,419,413 Total deposits $ 66,513,404 $ - $ 66,311,423 $ - $ - $ 66,311,423 Assets sold under agreements to repurchase $ 56,853 $ - $ 56,859 $ - $ - $ 56,859 Other short-term borrowings [2] 400,000 - 400,000 - - 400,000 Notes payable: FHLB advances $ 195,312 $ - $ 193,131 $ - $ - $ 193,131 Unsecured senior debt securities 396,249 - 420,152 - - 420,152 Junior subordinated deferrable interest debentures (related to trust preferred securities) 198,393 - 188,081 - - 188,081 Total notes payable $ 789,954 $ - $ 801,364 $ - $ - $ 801,364 Derivatives $ 26,157 $ - $ 26,157 $ - $ - $ 26,157 [1] Refer to Note 21 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level. [2] Refer to Note 13 to the Consolidated Financial Statements for the composition of other short-term borrowings. 108 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 21 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level. [2] Refer to Note 13 to the Consolidated Financial Statements for the composition of other short-term borrowings. Refer to Note 18 to the Consolidated Financial Statements for the notional amount of commitments to extend credit, which represents the unused portion of credit facilities granted to customers, and letters of credit, which represent the contractual amount that is required to be paid in the event of nonperformance, at September 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. 109 Note 23 – Net income per common share The following table sets forth the computation of net income per common share (“EPS”), basic and diluted, for the quarters and nine months ended September 30, 2025 and 2024: Quarters ended September 30, Nine months ended September 30, (In thousands, except per share information) 2025 2024 2025 2024 Net income $ 211,317 $ 155,323 $ 599,259 $ 436,395 Preferred stock dividends ( 353 ) ( 353 ) ( 1,059 ) ( 1,059 ) Net income applicable to common stock $ 210,964 $ 154,970 $ 598,200 $ 435,336 Average common shares outstanding 67,058,260 71,807,136 68,121,447 71,882,273 Average potential dilutive common shares 35,554 21,266 22,239 29,880 Average common shares outstanding - assuming dilution 67,093,814 71,828,402 68,143,686 71,912,153 Basic EPS $ 3.15 $ 2.16 $ 8.78 $ 6.06 Diluted EPS $ 3.14 $ 2.16 $ 8.78 $ 6.05 For the quarters and nine months ended September 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. 110 Note 24 – Revenue from contracts with customers The following table presents the Corporation’s revenue streams from contracts with customers by reportable segment for the quarters and nine months ended September 30, 2025 and 2024. Quarter ended September 30, Nine months ended September 30, (In thousands) 2025 2025 BPPR Popular U.S. BPPR Popular U.S. Service charges on deposit accounts $ 36,392 $ 2,685 $ 109,042 $ 7,915 Other service fees: Debit card fees 27,868 216 81,809 625 Insurance fees, excluding reinsurance 9,449 1,772 25,849 5,682 Credit card fees, excluding late fees and membership fees 27,846 301 81,376 1,040 Sale and administration of investment products 9,459 - 27,490 - Trust fees 7,279 - 20,789 - Total revenue from contracts with customers [1] $ 118,293 $ 4,974 $ 346,355 $ 15,262 [1] The amounts include intersegment transactions of $ 0.6 million and $ 1.8 million, respectively, for the quarter and nine months ended September 30, 2025. Quarter ended September 30, Nine months ended September 30, (In thousands) 2024 2024 BPPR Popular U.S. BPPR Popular U.S. Service charges on deposit accounts $ 35,699 $ 2,616 $ 105,770 $ 7,513 Other service fees: Debit card fees [2] 25,997 200 78,308 599 Insurance fees, excluding reinsurance 11,702 1,684 33,966 5,130 Credit card fees, excluding late fees and membership fees [2] 26,189 379 76,828 1,205 Sale and administration of investment products 8,387 - 23,664 - Trust fees 6,902 - 20,810 - Total revenue from contracts with customers [1] $ 114,876 $ 4,879 $ 339,346 $ 14,447 [1] The amounts include intersegment transactions of $ 0.6 million and $ 3.9 million, respectively, for the quarter and nine months ended September 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 nine month period ended September 30, 2024, interchange fees of approximately $ 22.2 million, corresponding to the first and second quarters 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. 111 Note 25 - 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. 112 (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 225,928 100.32 Performance Shares Quantity Adjustment 43,961 91.54 Vested ( 281,558 ) 90.26 Forfeited ( 5,515 ) 60.68 Non-vested at September 30, 2025 230,724 $ 75.82 During the quarter ended September 30, 2025, no shares of restricted stock (September 30, 2024 – 928 shares of restricted stock) were awarded to management under the Incentive Plan. During the quarters ended September 30, 2025 and 2024, no performance shares were awarded to management under the Incentive Plan. During the nine months ended September 30, 2025, 194,268 shares of restricted stock (September 30, 2024 – 176,519 shares of restricted stock) and 31,660 performance shares (September 30, 2024 - 65,225 performance shares) were awarded to management under the Incentive Plan. During the quarter ended September 30, 2025, the Corporation recognized $ 2.1 million of restricted stock expense related to management incentive awards, with a tax benefit of $ 0.4 million (September 30, 2024 - $ 1.8 million, with a tax benefit of $ 0.4 million). For the nine months ended September 30, 2025, the Corporation recognized $ 16.4 million of restricted stock expense related to management incentive awards, with a tax benefit of $ 2.1 million (September 30, 2024 - $ 12.3 million, with a tax benefit of $ 2.0 million). For the nine months ended September 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 triggered a windfall of $ 2.7 million that was recorded as a reduction on income tax expense. During the quarter ended September 30, 2025, the Corporation recognized $ ( 1.0 ) million of performance shares expense/(credit), with a tax benefit of $ ( 0.1 ) million due to performance shares target adjustment (September 30, 2024 - $ ( 0.5 ) million, with a tax benefit of $ ( 32 ) thousand). For the nine months ended September 30, 2025, the Corporation recognized $ 3.2 million of performance shares expense, with a tax benefit of $ 0.3 million (September 30, 2024 - $ 3.5 million, with a tax benefit of $ 0.2 million). The total unrecognized compensation cost related to non-vested restricted stock awards and performance shares to members of management at September 30, 2025 was $ 14.6 million and is expected to be recognized over a weighted-average period of 1.58 years. The following table summarizes the restricted stock activity under the Incentive Plan for members of the Board of Directors: (Not in thousands) 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 23,310 100.14 Vested ( 4,197 ) 98.52 Forfeited - - Non-vested at September 30, 2025 19,113 $ 100.49 113 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 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 September 30, 2025, 1,260 RSUs and no shares of restricted stock were granted to the Directors (September 30, 2024 - 1,281 RSUs and no shares of restricted stock) and the Corporation recognized $ 0.6 million of expense related to these shares with a tax benefit of $ 0.1 million (September 30, 2024 - $ 0.1 million with a tax benefit of $ 21 thousand). For the nine months ended September 30, 2025, the Corporation granted 20,622 RSUs and 2,688 shares of restricted stock to the Directors (September 30, 2024 - 22,887 RSUs and 1,392 shares of unrestricted stock) and the Corporation recognized $ 1.3 million of expense related to these shares, with a tax benefit of $ 0.2 million, (September 30, 2024 - $ 2.2 million, with a tax benefit of $ 0.4 million). The fair value at vesting date of the RSUs vested during the nine months ended September 30, 2025 for the Directors was $ 2.3 million. 114 Note 26 – Income taxes The table below presents a reconciliation of the statutory income tax rate to the effective income tax rate: Quarters ended September 30, 2025 September 30, 2024 (In thousands) Amount % of pre-tax income Amount % of pre-tax income Computed income tax expense at statutory rates $ 92,733 37.5 % $ 74,169 37.5 % Net benefit of tax exempt income ( 51,732 ) ( 20.9 ) ( 29,055 ) ( 13.3 ) Effect of income subject to preferential tax rate ( 2,490 ) ( 1.0 ) ( 327 ) - Deferred tax asset valuation allowance 2,748 1.1 451 - Difference in tax rates due to multiple jurisdictions ( 6,212 ) ( 2.5 ) ( 6,764 ) ( 3.1 ) State and local taxes 2,717 1.1 3,429 0.4 Others ( 1,794 ) ( 0.8 ) 560 - Income tax expense $ 35,970 14.5 % $ 42,463 21.5 % Nine months ended September 30, 2025 September 30, 2024 (In thousands) Amount % of pre-tax income Amount % of pre-tax income Computed income tax expense at statutory rates $ 273,066 37.5 % $ 215,582 37.5 % Net benefit of tax exempt income ( 137,061 ) ( 18.8 ) ( 91,035 ) ( 15.8 ) Effect of income subject to preferential tax rate ( 4,009 ) ( 0.6 ) ( 475 ) ( 0.1 ) Deferred tax asset valuation allowance 10,680 1.5 2,779 0.5 Difference in tax rates due to multiple jurisdictions ( 11,469 ) ( 1.6 ) ( 11,893 ) ( 2.1 ) Other tax benefits - - ( 4,500 ) ( 0.8 ) Tax on intercompany distributions [1] - - 24,325 4.2 U.S., States, and local taxes 7,167 1.0 6,669 1.2 Others ( 9,456 ) ( 1.3 ) ( 2,962 ) ( 0.5 ) Income tax expense $ 128,918 17.7 % $ 138,490 24.1 % [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 September 30, 2025, and December 31, 2024, were as follows: 115 September 30, 2025 (In thousands) PR US Total Deferred tax assets: Tax credits available for carryforward $ 4,861 $ 38,382 $ 43,243 Net operating loss and other carryforward available 60,370 584,546 644,916 Postretirement and pension benefits 28,228 - 28,228 Allowance for credit losses 249,065 28,482 277,547 Deferred loan origination fees/cost 4,533 ( 2,844 ) 1,689 Depreciation 7,700 7,742 15,442 FDIC-assisted transaction 152,665 - 152,665 Lease liability 28,040 18,572 46,612 Unrealized net loss on investment securities 179,530 14,083 193,613 Difference in outside basis from pass-through entities 53,182 - 53,182 Mortgage Servicing Rights 15,051 - 15,051 Other temporary differences 33,698 8,555 42,253 Total gross deferred tax assets 816,923 697,518 1,514,441 Deferred tax liabilities: Intangibles 91,503 55,023 146,526 Right of use assets 25,509 16,666 42,175 Loans acquired 17,244 - 17,244 Other temporary differences 7,476 429 7,905 Total gross deferred tax liabilities 141,732 72,118 213,850 Valuation allowance 78,134 386,914 465,048 Net deferred tax asset $ 597,057 $ 238,486 $ 835,543 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 $ 924,756 116 The net deferred tax assets shown in the table above at September 30, 2025, is reflected in the Consolidated Statements of Financial Condition as $ 837.3 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 September 30, 2025, the net deferred tax assets of the U.S. operations amounted to $ 625.4 million with a valuation allowance of $ 386.9 million, for net deferred tax assets after valuation allowance of $ 238.5 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. These historical financial results are objectively verifiable positive evidence, evaluated together with the positive evidence of stable credit metrics. 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 and the length of the federal budget impasse that could negatively impact U. S. operations’ achieving expected pre-tax income levels in the near future. As of September 30, 2025, after weighting all positive and negative evidence, the Corporation concluded that it is more likely than not that $ 238.5 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 September 30, 2025, the Corporation’s net deferred tax assets related to its Puerto Rico operations amounted to $ 597.1 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 $ 78.1 million as of September 30, 2025. The reconciliation of unrecognized tax benefits, excluding interest, was as follows: 117 (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 Balance at September 30 $ 1.5 $ 1.5 At September 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 September 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 September 30, 2025 (December 31, 2024 - $ 3.0 million). The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to the 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 September 30, 2025, the following years remain subject to examination in the U.S. Federal jurisdiction: 2022 and thereafter; and in the Puerto Rico jurisdiction, 2018 and thereafter. 118 Note 27 – Supplemental disclosure on the consolidated statements of cash flows Additional disclosures on cash flow information and non-cash activities for the nine months ended September 30, 2025 and September 30, 2024 are listed in the following table: (In thousands) September 30, 2025 September 30, 2024 Non-cash activities: Loans transferred to other real estate $ 20,915 $ 34,756 Loans transferred to other property 66,838 61,447 Total loans transferred to foreclosed assets 87,753 96,203 Loans transferred to other assets 37,338 37,495 Financed sales of other real estate assets 5,234 8,551 Financed sales of other foreclosed assets 43,032 39,283 Total financed sales of foreclosed assets 48,266 47,834 Financed sale of premises and equipment 41,746 59,628 Transfers from loans held-in-portfolio to loans held-for-sale 5,739 7,505 Transfers from loans held-for-sale to loans held-in-portfolio 1,792 5,084 Loans securitized into investment securities [1] 6,852 11,162 Trades receivable from brokers and counterparties 9,125 4,983 Trades payable to brokers and counterparties 306,775 3,540 Net change in receivables from investments maturities 13,861 176,000 Recognition of mortgage servicing rights on securitizations or asset transfers 675 998 Loans booked under the GNMA buy-back option 5,349 2,836 Capitalization of lease right of use asset 33,276 2,553 [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) September 30, 2025 September 30, 2024 Cash and due from banks $ 370,684 $ 418,168 Restricted cash and due from banks 6,395 9,426 Restricted cash in money market investments 10,180 8,072 Total cash and due from banks, and restricted cash [2] $ 387,259 $ 435,666 [2] Refer to Note 4 - Restrictions on cash and due from banks and certain securities for nature of restrictions. 119 Note 28 – Segment reporting The Corporation’s corporate structure consists of two reportable segments – Banco Popular de Puerto Rico and Popular U.S. Management determined the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. The segments were determined based on the organizational structure, which focuses primarily on the markets the segments serve, as well as on the products and services offered by the segments. The chief operating decision maker (“CODM”) of the Corporation is the Chief Executive Officer (“CEO”) who utilizes net income as one of the segment profitability measures, to evaluate the performance of each reportable segment and assess where to allocate resources effectively. The CEO receives profitability reports that include net income per segment, net interest income and other income and expense categories. The CODM uses the segment’s net income and components of net income, including segment revenues and expenses to assess performance and to manage important aspects by each reportable segments, such as human capital, investment in technology, making budget allocations, as well as other strategic decisions. Banco Popular de Puerto Rico: The Banco Popular de Puerto Rico reportable segment includes commercial, consumer and retail banking operations, as well as mortgage and auto lending operations conducted at BPPR, including U.S. based activities conducted through its New York Branch. Other financial services within the BPPR segment include the trust service units of BPPR, asset management services of Popular Asset Management and the brokerage operations of Popular Securities, and the insurance agency and reinsurance businesses of Popular Insurance, Popular Risk Services, Popular Life Re, and Popular Re. Popular U.S.: Popular U.S. reportable segment consists of the banking operations of Popular Bank (PB), Popular Insurance Agency, U.S.A., and PEF. PB operates through a retail branch network in the U.S. mainland under the name of Popular, and equipment leasing and financing services through PEF. Popular Insurance Agency, U.S.A. offers investment and insurance services across the PB branch network. The Corporate group consists primarily of the holding companies Popular, Inc., Popular North America, Popular International Bank and certain of the Corporation’s investments accounted for under the equity method, including BHD. The accounting policies of the individual operating segments are the same as those of the Corporation. Transactions between reportable segments are primarily conducted at market rates, resulting in profits that are eliminated for reporting consolidated results of operations. Assets representing transactions between reportable segments or the Corporate group are also eliminated in the tables presented below. The tables that follow present the results of operations and total assets by reportable segments: 120 2025 For the quarter ended September 30, 2025 Intersegment (In thousands) BPPR Popular U.S. Eliminations Interest income $ 765,204 $ 201,327 $ ( 423 ) Interest expense 214,489 96,124 ( 423 ) Net interest income 550,715 105,203 - Provision for credit losses 73,326 1,833 - Non-interest income 150,619 6,888 - Personnel costs 170,524 28,451 - Professional fees 12,764 2,643 - Technology and software expenses 67,146 9,977 - Processing and transactional services 37,794 607 - Amortization of intangibles 240 144 - Goodwill impairment charge - 13,000 - Depreciation expense 10,759 2,439 - Other operating expenses [1] 113,649 26,463 - Total operating expenses 412,876 83,724 - Income before income tax 215,132 26,534 - Income tax expense 26,104 8,732 - Net income $ 189,028 $ 17,802 $ - Segment assets $ 59,771,004 $ 14,940,858 $ ( 50,833 ) For the quarter ended September 30, 2025 Reportable (In thousands) Segments Corporate Eliminations Total Popular, Inc. Interest income $ 966,108 $ 1,373 $ ( 832 ) $ 966,649 Interest expense 310,190 10,786 ( 832 ) 320,144 Net interest income (expense) 655,918 ( 9,413 ) - 646,505 Provision for credit losses (benefit) 75,159 ( 34 ) - 75,125 Non-interest income 157,507 15,330 ( 1,642 ) 171,195 Personnel costs 198,975 34,013 - 232,988 Professional fees 15,407 10,682 ( 281 ) 25,808 Technology and software expenses 77,123 9,994 - 87,117 Processing and transactional services 38,401 7 - 38,408 Amortization of intangibles 384 - - 384 Goodwill impairment charge 13,000 - - 13,000 Depreciation expense 13,198 384 - 13,582 Other operating expenses [1] 140,112 ( 54,815 ) ( 1,297 ) 84,000 Total operating expenses 496,600 265 ( 1,578 ) 495,287 Income before income tax 241,666 5,686 ( 64 ) 247,288 Income tax expense 34,836 1,120 15 35,971 Net income $ 206,830 $ 4,566 $ ( 79 ) $ 211,317 Segment assets $ 74,661,029 $ 5,772,344 $ ( 5,367,575 ) $ 75,065,798 [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. 121 For the nine months ended September 30, 2025 Intersegment (In thousands) BPPR Popular U.S. Eliminations Interest income $ 2,245,804 $ 583,387 $ ( 3,145 ) Interest expense 634,722 283,048 ( 3,145 ) Net interest income 1,611,082 300,339 - Provision for credit losses 169,290 18,975 - Non-interest income 433,809 20,452 - Personnel costs 486,602 81,280 - Professional fees 38,848 7,832 - Technology and software expenses 195,523 30,410 - Processing and transactional services 112,249 1,786 - Amortization of intangibles 822 544 - Goodwill impairment charge - 13,000 - Depreciation expense 30,797 6,902 - Other operating expenses [1] 374,407 80,103 - Total operating expenses 1,239,248 221,857 - Income before income tax 636,353 79,959 - Income tax expense 96,803 24,734 - Net income $ 539,550 $ 55,225 $ - Segment assets $ 59,771,004 $ 14,940,858 $ ( 50,833 ) For the nine months ended September 30, 2025 Reportable Total (In thousands) Segments Corporate Eliminations Popular, Inc. Interest income $ 2,826,046 $ 4,487 $ ( 3,014 ) $ 2,827,519 Interest expense 914,625 32,257 ( 3,014 ) 943,868 Net interest income (expense) 1,911,421 ( 27,770 ) - 1,883,651 Provision for credit losses (benefit) 188,265 ( 118 ) - 188,147 Non-interest income 454,261 40,466 ( 2,994 ) 491,733 Personnel costs 567,882 107,174 - 675,056 Professional fees 46,680 34,926 ( 865 ) 80,741 Technology and software expenses 225,933 29,548 - 255,481 Processing and transactional services 114,035 15 - 114,050 Amortization of intangibles 1,366 - - 1,366 Goodwill impairment charge 13,000 - - 13,000 Depreciation expense 37,699 1,202 - 38,901 Other operating expenses [1] 454,510 ( 171,398 ) ( 2,647 ) 280,465 Total operating expenses 1,461,105 1,467 ( 3,512 ) 1,459,060 Income before income tax 716,312 11,347 518 728,177 Income tax expense 121,537 7,072 309 128,918 Net income $ 594,775 $ 4,275 $ 209 $ 599,259 Segment assets $ 74,661,029 $ 5,772,344 $ ( 5,367,575 ) $ 75,065,798 [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. 122 2024 For the quarter ended September 30, 2024 Intersegment (In thousands) BPPR Popular U.S. Eliminations Interest income $ 743,936 $ 195,102 $ ( 2,345 ) Interest expense 255,928 101,974 ( 2,345 ) Net interest income 488,008 93,128 - Provision for credit losses (benefit) 77,514 ( 6,066 ) - Non-interest income 149,050 6,789 - Personnel costs 149,563 26,372 - Professional fees 14,490 2,821 - Technology and software expenses 67,778 9,959 - Processing and transactional services 33,775 542 - Amortization of intangibles 394 310 - Depreciation expense 13,023 2,063 - Other operating expenses [1] 124,621 22,662 - Total operating expenses 403,644 64,729 - Income before income tax 155,900 41,254 - Income tax expense 30,064 12,472 - Net income $ 125,836 $ 28,782 $ - Segment assets $ 56,906,693 $ 14,306,045 $ ( 260,464 ) For the quarter ended September 30, 2024 Reportable (In thousands) Segments Corporate Eliminations Total Popular, Inc. Interest income 936,693 2,098 ( 1,343 ) 937,448 Interest expense 355,557 10,761 ( 1,343 ) 364,975 Net interest income (expense) $ 581,136 $ ( 8,663 ) $ - $ 572,473 Provision for credit losses (benefit) 71,448 - - 71,448 Non-interest income 155,839 8,876 ( 633 ) 164,082 Personnel costs 175,935 25,921 - 201,856 Professional fees 17,311 9,584 ( 187 ) 26,708 Technology and software expenses 77,737 10,715 - 88,452 Processing and transactional services 34,317 3 - 34,320 Amortization of intangibles 704 - - 704 Depreciation expense 15,086 385 - 15,471 Other operating expenses [1] 147,283 ( 46,614 ) ( 859 ) 99,810 Total operating expenses 468,373 ( 6 ) ( 1,046 ) 467,321 Income before income tax 197,154 219 413 197,786 Income tax expense (benefit) 42,536 ( 279 ) 206 42,463 Net income $ 154,618 $ 498 $ 207 $ 155,323 Segment assets $ 70,952,274 $ 5,887,340 $ ( 5,516,540 ) $ 71,323,074 [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. 123 For the nine months ended September 30, 2024 Intersegment (In thousands) BPPR Popular U.S. Eliminations Interest income $ 2,195,266 $ 564,580 $ ( 8,254 ) Interest expense 745,672 300,748 ( 8,254 ) Net interest income 1,449,594 263,832 - Provision for credit losses 188,576 1,806 - Non-interest income 447,073 19,909 ( 56 ) Personnel costs 448,253 79,578 - Professional fees 41,426 9,454 ( 56 ) Technology and software expenses 191,218 28,643 - Processing and transactional services 105,866 1,730 - Amortization of intangibles 1,302 931 - Depreciation expense 39,349 6,210 - Other operating expenses [1] 383,500 77,902 - Total operating expenses 1,210,914 204,448 ( 56 ) Income before income tax 497,177 77,487 - Income tax expense 92,810 23,917 - Net income $ 404,367 $ 53,570 $ - Segment assets $ 56,906,693 $ 14,306,045 $ ( 260,464 ) For the nine months ended September 30, 2024 Reportable Total (In thousands) Segments Corporate Eliminations Popular, Inc. Interest income $ 2,751,592 $ 10,287 $ ( 8,383 ) $ 2,753,496 Interest expense 1,038,166 32,184 ( 8,383 ) 1,061,967 Net interest income (expense) 1,713,426 ( 21,897 ) - 1,691,529 Provision for credit losses (benefit) 190,382 458 - 190,840 Non-interest income 466,926 31,314 ( 4,034 ) 494,206 Personnel costs 527,831 86,826 - 614,657 Professional fees 50,824 43,312 ( 766 ) 93,370 Technology and software expenses 219,861 27,805 - 247,666 Processing and transactional services 107,596 14 - 107,610 Amortization of intangibles 2,233 - - 2,233 Depreciation expense 45,559 1,161 - 46,720 Other operating expenses [1] 461,402 ( 150,953 ) ( 2,695 ) 307,754 Total operating expenses 1,415,306 8,165 ( 3,461 ) 1,420,010 Income before income tax 574,664 794 ( 573 ) 574,885 Income tax expense (benefit) 116,727 21,921 ( 158 ) 138,490 Net income $ 457,937 $ ( 21,127 ) $ ( 415 ) $ 436,395 Segment assets $ 70,952,274 $ 5,887,340 $ ( 5,516,540 ) $ 71,323,074 [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. 124 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 nine months ended September 30, 2025, BPPR participated in loans originated by PB totaling $ 29 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 $ 103 million in multifamily loans (December 31, 2024 - $ 104 million), $ 421 million in commercial real estate loans (December 31, 2024 - $ 588 million), $ 707 million in C&I loans (December 31, 2024 - $ 685 million), and $ 54 million in unsecured personal loans (December 31, 2024 - $ 113 million). During the nine months ended September 30, 2025, the BPPR segment generated $ 75.6 million (September 30, 2024 - $ 91.2 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 $ 38.7 million in revenues during the nine months ended September 30, 2025 (September 30, 2024 - $ 32.3 million) from its operations in the U.S. and British Virgin Islands. Geographic Information Quarter ended Nine months ended (In thousands) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Revenues: [1] Puerto Rico $ 654,274 $ 582,953 $ 1,900,467 $ 1,735,035 United States 135,852 133,067 402,342 386,819 Other 27,574 20,535 72,575 63,881 Total consolidated revenues $ 817,700 $ 736,555 $ 2,375,384 $ 2,185,735 [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) September 30, 2025 December 31, 2024 Puerto Rico Total assets $ 57,492,551 $ 55,888,211 Loans 25,362,400 24,154,610 Deposits 52,929,118 52,099,309 United States Total assets $ 16,279,331 $ 15,890,339 Loans 12,815,827 12,431,859 Deposits 11,861,212 11,030,879 Other Total assets $ 1,293,916 $ 1,266,833 Loans 516,714 526,606 Deposits [1] 1,723,074 1,754,157 [1] Represents deposits from BPPR operations located in the U.S. and British Virgin Islands. 125 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This report includes management’s discussion and analysis (“MD&A”) of the consolidated financial position and financial performance of Popular, Inc. (the “Corporation” or “Popular”). All accompanying tables, financial statements and notes included elsewhere in this report should be considered an integral part of this analysis. The Corporation is a diversified, publicly owned financial holding company subject to the supervision and regulation of the Board of Governors of the Federal Reserve System. The Corporation has operations in Puerto Rico, the United States (“U.S.”) mainland and the U.S. and British Virgin Islands. In Puerto Rico, the Corporation provides retail, mortgage, commercial banking services and auto and equipment leasing and financing through its principal banking subsidiary, Banco Popular de Puerto Rico (“BPPR”), as well as broker-dealer and insurance services through specialized subsidiaries. In the U.S. mainland, the Corporation provides retail and commercial banking services, as well as equipment leasing and financing, through its New York-chartered banking subsidiary, Popular Bank (“PB” or “Popular U.S.”), which has branches located in New York, New Jersey and Florida. Note 28 to the Consolidated Financial Statements presents information about the Corporation’s business segments. As a financial services company, the Corporation’s earnings are significantly affected by general business and economic conditions in the markets which we serve. Lending and deposit activities and fee income generation are influenced by the level of business spending and investment, consumer income, spending and savings, capital market activities, competition, customer preferences, interest rate conditions and prevailing market rates on competing products. The Corporation operates in a highly regulated environment and may be adversely affected by changes in federal and local laws and regulations. Also, competition with other financial institutions, as well as with non-traditional financial service providers and technology companies that provide electronic and internet-based financial solutions and services, could adversely affect its profitability. The Corporation continuously monitors general business and economic conditions, industry-related indicators and trends, competition, interest rate volatility, credit quality indicators, loan, and deposit demand, operational and systems efficiencies, revenue enhancements and changes in the regulation of financial services companies. The description of the Corporation’s business contained in Item 1 of the 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. OVERVIEW Financial highlights for the quarter ended September 30, 2025 The Corporation’s net income for the quarter ended September 30, 2025 amounted to $211.3 million, an increase of $56.0 million when compared to a net income of $155.3 million for the quarter ended September 30, 2024. Higher net income was mainly driven by higher net interest income, offset in part by an increase in operating expense. Financial highlights for the quarter ended September 30, 2025 include: ● Net interest income amounted to $646.5 million, an increase of $74.0 million when compared to the quarter ended September 30, 2024, driven by lower cost of deposits, investments in U.S. Treasury securities at higher yields and loan growth. Net interest income on a taxable equivalent basis for the third quarter of 2025 was $720.8 million, an increase of $107.9 million. Net interest margin expanded by 27 bps to 3.51%. On a taxable equivalent basis, net interest margin expanded by 43 basis points to 3.90%. ● The provision for credit losses amounted to $75.1 million for the quarter ended September 30, 2025, an increase of $3.7 million when compared to the quarter ended September 30, 2024, driven by higher reserves in the commercial loans 126 portfolio, mainly due to two unrelated NPL inflows during the quarter, partially offset by a lower provision for the consumer loans portfolio due to improvements in credit quality. ● Non-interest income amounted to $171.2 million, an increase of $7.1 million when compared to the quarter ended September 30, 2024, mainly driven by higher credit and debit card fee income, a favorable valuation adjustment of equity securities held for deferred compensation plans, higher other operating income due to a retroactive charge to a tenant for energy supplied in prior years, and higher investment management fees. ● Operating expenses amounted to $495.3 million for the quarter, reflecting an increase of $28.0 million when compared to the quarter ended September 30, 2024. The increase was mainly driven by higher personnel costs, primarily due to profit sharing accrual and higher incentives, and a non-cash goodwill impairment charge related to our U.S. based leasing subsidiary, partially offset by lower insurance claims and operational losses reserves and lower equipment expenses. ● Income tax expense of $36.0 million with an effective tax rate (“ETR”) of 14.5% during the quarter ended September 30, 2025, compared to an income tax expense of $42.5 million with an ETR of 21.5% for the quarter ended September 30, 2024 due to higher tax-exempt income and tax credit purchases during 2025. ● At September 30, 2025, the Corporation’s total assets amounted to $75.1 billion, compared to $73.0 billion at December 31, 2024. The increase of $2.1 billion is primarily due to higher balance in the available-for-sale (“AFS”) securities portfolio, mainly driven by higher U.S. Treasury securities, and an increase across most loan portfolios, mainly in commercial, mortgage, and construction, partially offset by lower balance in the money market investments, held-to- maturity (“HTM”) investment securities, and a decrease in other assets. ● Deposits amounted to $66.5 billion at September 30, 2025, an increase of $1.6 billion from December 31, 2024, driven by an increase in high-cost deposits, mainly time deposits at PB, and P.R. public deposits. ● Stockholders’ equity amounted to $6.1 billion at September 30, 2025, compared to $5.6 billion at December 31, 2024. The Corporation and its banking subsidiaries continue to be well capitalized. As of September 30, 2025, the Corporation’s tangible book value per common share was $79.12, an increase of $10.96 from December 31, 2024. The Common Equity Tier 1 Capital ratio at September 30, 2025 was 15.79%, compared to 16.03% at December 31, 2024. Refer to Table 1 for selected financial data for the quarters ended September 30, 2025 and September 30, 2024. 127 Table 1 - Financial Highlights Financial Condition Highlights Ending balances at Average for the nine months ended (In thousands) September 30, 2025 December 31, 2024 Variance September 30, 2025 September 30, 2024 Variance Money market investments $ 4,754,391 $ 6,380,948 $ (1,626,557) $ 6,205,101 $ 6,663,967 $ (458,866) Investment securities 28,371,673 26,244,977 2,126,696 28,758,022 27,701,911 1,056,111 Loans [1] 38,694,941 37,113,075 1,581,866 37,692,744 35,411,807 2,280,937 Earning assets 71,821,005 69,739,000 2,082,005 72,655,867 69,777,685 2,878,182 Total assets 75,065,798 73,045,383 2,020,415 75,776,756 72,851,597 2,925,159 Deposits 66,513,404 64,884,345 1,629,059 66,452,057 64,521,953 1,930,104 Borrowings 1,246,807 1,176,126 70,681 1,145,836 1,039,130 106,706 Total liabilities 68,950,126 67,432,317 1,517,809 68,584,814 66,530,111 2,054,703 Stockholders’ equity 6,115,672 5,613,066 502,606 7,191,941 6,321,486 870,455 Note: Average balances exclude unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities transferred from available-for- sale to held-to-maturity. Operating Highlights Quarters ended September 30, Nine months ended September 30, (In thousands, except per share information) 2025 2024 Variance 2025 2024 Variance Net interest income $ 646,505 $ 572,473 $ 74,032 $ 1,883,651 $ 1,691,529 $ 192,122 Provision for credit losses (benefit) 75,125 71,448 3,677 188,147 190,840 (2,693) Non-interest income 171,195 164,082 7,113 491,733 494,206 (2,473) Operating expenses 495,287 467,321 27,966 1,459,060 1,420,010 39,050 Income before income tax 247,288 197,786 49,502 728,177 574,885 153,292 Income tax expense 35,971 42,463 (6,492) 128,918 138,490 (9,572) Net income $ 211,317 $ 155,323 $ 55,994 $ 599,259 $ 436,395 $ 162,864 Net income applicable to common stock $ 210,964 $ 154,970 $ 55,994 $ 598,200 $ 435,336 $ 162,864 Net income per common share – basic $ 3.15 $ 2.16 $ 0.99 $ 8.78 $ 6.06 $ 2.72 Net income per common share – diluted $ 3.14 $ 2.16 $ 0.98 $ 8.78 $ 6.05 $ 2.73 Dividends declared per common share $ 0.75 $ 0.62 $ 0.13 $ 2.15 $ 1.86 $ 0.29 Quarters ended September 30, Nine months ended September 30, Selected Statistical Information 2025 2024 2025 2024 Common Stock Data End market price $ 129.10 100.27 $ 129.10 100.27 Book value per common share at period end 91.00 80.35 91.00 80.35 Profitability Ratios Return on assets 1.09 % 0.84 % 1.06 % 0.79 % Return on common equity 11.60 8.82 11.15 8.43 Net interest spread (non-taxable equivalent basis) 2.87 2.43 2.81 2.41 Net interest spread (taxable equivalent) - Non-GAAP 3.26 2.66 3.18 2.65 Net interest margin (non-taxable equivalent basis) 3.51 3.24 3.46 3.20 Net interest margin (taxable equivalent) - Non-GAAP 3.90 3.47 3.83 3.44 Capitalization Ratios Average equity to average assets 9.46 % 8.86 % 9.49 % 8.68 % Common equity Tier 1 capital 15.79 16.42 15.79 16.42 Tangible common book value per common share (non-GAAP) [2] 79.12 69.04 79.12 69.04 Return on average tangible common equity [2] 13.06 9.98 12.57 9.56 Tier I capital 15.84 16.48 15.84 16.48 Total capital 17.58 18.24 17.58 18.24 Tier 1 leverage 8.48 8.67 8.48 8.67 [1] Includes loans held-for-sale. [2] Refer to Table 10 for reconciliation to GAAP financial measures. Non-GAAP Financial Measures This Form 10-Q contains financial information prepared under accounting principles generally accepted in the United States (“U.S. 128 GAAP”) and non-GAAP financial measures. Management uses non-GAAP financial measures when it is determined that these measures provide meaningful information about the underlying performance of the Corporation’s ongoing operations. Non-GAAP financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by other companies. Adjusted net income - Non-GAAP Financial Measure In addition to analyzing the Corporation’s results on a reported basis, management monitors whether the impact of certain non- recurring or infrequent transactions need to be excluded from the results of operations to present what is then considered to be “adjusted net income” of the Corporation. Management believes that the “adjusted net income” provides meaningful information about the underlying performance of the Corporation’s ongoing operations. The “adjusted net income” is a non-GAAP financial measure. The following table presents the adjusted net income for the nine months ended September 30, 2024. There were no non-GAAP adjustments for the nine months ended September 30, 2025. Table 2 - Adjusted Net Income for the Nine Months Ended September 30, 2024 (Non-GAAP) (In thousands) Income before income tax Income tax expense (benefit) Total U.S. GAAP Net income $574,885 $138,490 $436,395 Non-GAAP Adjustments: FDIC Special Assessment [1] 14,287 (5,234) 9,053 Adjustments related to intercompany distributions [2] 6,400 16,483 22,883 Adjusted net income (Non-GAAP) $595,572 $127,241 $468,331 [1] Expense recorded during the first quarter of 2024 to increase the estimate recognized during the fourth quarter of 2023 related to the November 16, 2023 FDIC Special Assessment to recover the losses to the deposit insurance fund used by the FDIC in connection with the receiverships of several failed banks. The special assessment amount and collection period may change if the estimated loss is periodically adjusted or if the total amount collected varies. [2] Income tax expense and other related expenses from prior periods related to withholding taxes on certain distributions from U.S. subsidiaries. 129 Net interest income on a taxable equivalent basis – Non-GAAP Financial Measure Net interest income, on a taxable equivalent basis, is presented with its different components in Table s 3 and 4 for the quarter and nine months ended September 30, 2025, as compared with the same period in 2024, segregated by major categories of interest earning assets and interest-bearing liabilities. The main sources of tax-exempt interest income are certain loans and investments in obligations of the U.S. Government, its agencies and sponsored entities, and certain obligations of the Commonwealth of Puerto Rico and its agencies and assets held by the Corporation’s international banking entities. On tables 3 and 4, the interest income has been converted to a taxable equivalent basis, using the applicable statutory income tax rates for each period net of interest expense that the Puerto Rico tax law requires to be disallowed, based on an equal proportion of tax-exempt assets to total assets, and by an allocation of general and administrative expenses attributable to exempt income, reducing the benefit of the tax-exempt income. The effective yield, on a taxable equivalent basis, will vary depending on the level of these expenses that are attributable to the available exempt income. Under Puerto Rico tax law, the exempt interest can be deducted up to the amount of taxable income. Management believes that this presentation provides meaningful information since it facilitates the comparison of revenues arising from taxable and exempt sources. Tangible Common Equity and Tangible Assets Tangible common equity, tangible common equity ratio, tangible assets and tangible book value per common share are non-GAAP financial measures. Tangible common equity ratio and tangible book value per common share should be used in conjunction with more traditional bank capital ratios commonly used by banks and analysts to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method for mergers and acquisitions. Tangible common equity, tangible assets and other related measures should not be used in isolation or as a substitute for stockholders' equity, total assets or any other measure calculated in accordance with GAAP. Moreover, the way the Corporation calculates its tangible common equity, tangible assets and other related measures may differ from that of other companies reporting measures with similar names. Table 10 provides a reconciliation of total stockholders’ equity to tangible common equity and total assets to tangible assets as of September 30, 2025 and December 31, 2024. 130 CRITICAL ACCOUNTING POLICIES / ESTIMATES The accounting and reporting policies followed by the Corporation and its subsidiaries conform to U.S. GAAP and general practices within the financial services industry. Various elements of the Corporation’s accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. Management has discussed the development and selection of the critical accounting estimates with the Corporation’s Audit Committee. The Corporation has identified as critical accounting estimates those related to: (i) Fair Value Measurement of Financial Instruments; (ii) Loans and Allowance for Credit Losses; (iii) Income Taxes; (iv) Goodwill and Other Intangible Assets; and (v) Pension and Postretirement Benefit Obligations. For a summary of these critical accounting estimates, refer to the MD&A included in the 2024 Form 10-K. Also, refer to Note 2 to the Consolidated Financial Statements included in the 2024 Form 10-K for a summary of the Corporation’s significant accounting policies and to Note 3 to the Consolidated Financial Statements included in this Form 10-Q for information on recently adopted accounting standard updates. STATEMENT OF OPERATIONS ANALYSIS NET INTEREST INCOME Net interest income (“NII”) for the quarter ended September 30, 2025 was $646.5 million an increase of $74.0 million, compared to the same quarter in 2024. The increase in net interest income was supported by lower cost of deposits, mainly P.R. public deposits, higher income from investments in U.S. Treasury securities at higher yields, and from loan growth. Net interest income on a taxable equivalent basis for the third quarter of 2025 was $720.8 million, an increase of $107.9 million. Net interest margin (“NIM”) for the quarter was 3.51%, an increase of 27 basis points when compared to the third quarter of 2024. On a taxable equivalent basis, net interest margin for the third quarter of 2025 was 3.90%, an increase of 43 basis points when compared to the third quarter of 2024, driven by higher level of tax-exempt securities and loans. NIM expansion, when compared to the same quarter of the previous year, was mainly attributable to lower deposit costs driven as a result of the repricing of high-cost deposits that are market-linked, mainly those of P.R. public deposits, and higher yields on U.S. Treasury securities. Total cost of deposits decreased 37 basis points to 1.79%. On a taxable equivalent basis, the main drivers of the increase for the third quarter of 2025 were: ● higher income from investment securities and money market investments by $17.5 million, mainly driven by higher income from U.S. Treasury securities by $49.3 million or 57 basis points, due to higher re-investment activity at higher yields partially offset by lower income from money market securities by $29.2 million as a result of the deployment of funds to loan growth and the purchase of U.S. Treasury securities. During the third quarter of 2025, the Corporation purchased approximately $2.5 billion of U.S. Treasury notes with an average duration of 1.4 years and a yield of approximately 3.65%, through a combination of approximately $1.0 billion in maturing U.S. Treasuries and a reduction of approximately $1.5 billion in overnight Fed funds; ● higher income from loans by $45.6 million driven by loan growth most notably in the commercial, construction and mortgage portfolios, including certain tax-exempt loans in BPPR, partially offset by lower yields by 7 basis points, mainly from adjustable rate commercial and construction portfolios due to short-term market rates decline; and ● lower interest expense on deposits by $47.6 million, or 37 basis points, when compared to the same period in 2024. The cost of interest-bearing deposits decreased by 52 basis points, mainly due to the repricing of market-linked P.R. public deposits which decreased by 105 basis points to 3.19%, and a decrease in the cost of deposits in Popular U.S., particularly in time deposits and those captured through online channels. 131 Table 3 - Analysis of Levels & Yields on a Taxable Equivalent Basis (Non-GAAP) Quarter ended September 30, Variance Average Volume Average Yields / Costs Interest Attributable to 2025 2024 Variance 2025 2024 Variance 2025 2024 Variance Rate Volume (In millions) (In thousands) $ 5,990 $ 7,033 $ (1,043) 4.43 % 5.43 % (1.00) % Money market investments $ 66,867 $ 96,061 $ (29,194) $ (16,107) $ (13,087) 28,957 27,569 1,388 3.42 2.92 0.50 Investment securities [1] 249,071 202,317 46,754 32,970 13,784 28 30 (2) 5.43 5.87 (0.44) Trading securities 391 436 (45) (31) (14) Total money market, investment and trading 34,975 34,632 343 3.59 3.43 0.16 securities 316,329 298,814 17,515 16,832 683 Loans: 19,229 17,798 1,431 6.72 6.90 (0.18) Commercial 325,869 308,734 17,135 (7,239) 24,374 1,549 1,129 420 8.24 8.85 (0.61) Construction 32,184 25,102 7,082 (1,732) 8,814 1,981 1,851 130 7.26 6.97 0.29 Leasing 35,957 32,241 3,716 1,378 2,338 8,484 7,911 573 5.96 5.73 0.23 Mortgage 126,352 113,409 12,943 4,523 8,420 3,257 3,211 46 13.80 14.08 (0.28) Consumer 113,280 112,423 857 (787) 1,644 3,945 3,879 66 9.15 8.94 0.21 Auto 91,006 87,189 3,817 2,338 1,479 38,445 35,779 2,666 7.49 7.56 (0.07) Total loans 724,648 679,098 45,550 (1,519) 47,069 $ 73,420 $ 70,411 $ 3,009 5.63 % 5.53 % 0.10 % Total earning assets $ 1,040,977 $ 977,912 $ 63,065 $ 15,313 $ 47,752 Interest bearing deposits: $ 8,184 $ 7,387 $ 797 1.77 % 2.04 % (0.27) % NOW and money market $ 36,421 $ 37,857 $ (1,436) $ (4,891) $ 3,455 14,529 14,318 211 0.81 0.92 (0.11) Savings 29,772 33,134 (3,362) (3,981) 619 8,825 8,366 459 3.16 3.45 (0.29) Time deposits 70,196 72,503 (2,307) (6,096) 3,789 20,766 19,468 1,298 3.19 4.24 (1.05) P.R. public deposits 167,043 207,491 (40,448) (52,899) 12,451 52,304 49,539 2,765 2.30 2.82 (0.52) Total interest bearing deposits 303,432 350,985 (47,553) (67,867) 20,314 14,846 14,968 (122) Non-interest bearing demand deposits 67,150 64,507 2,643 1.79 2.16 (0.37) Total deposits 303,432 350,985 (47,553) (67,867) 20,314 405 101 304 4.52 5.62 (1.10) Short-term borrowings 4,616 1,430 3,186 (267) 3,453 Other medium and 812 950 (138) 5.98 5.32 0.66 long-term debt 12,096 12,560 (464) 226 (690) Total interest bearing 53,521 50,590 2,931 2.37 2.87 (0.50) liabilities (excluding demand deposits) 320,144 364,975 (44,831) (67,908) 23,077 Other sources of funds 5,053 4,853 200 $ 73,420 $ 70,411 $ 3,009 1.73 % 2.06 % (0.33) % Total source of funds $ 320,144 $ 364,975 $ (44,831) $ (67,908) $ 23,077 Net interest margin/ income on a taxable equivalent basis (Non- GAAP) 3.90 % 3.47 % 0.43 % $ 720,833 $ 612,937 $ 107,896 $ 83,221 $ 24,675 3.26 % 2.66 % 0.60 % Net interest spread Taxable equivalent adjustment 74,328 40,464 33,864 Net interest margin/ income non-taxable equivalent basis (GAAP) 3.51 % 3.24 % 0.27 % $ 646,505 $ 572,473 $ 74,032 Note: The changes that are not due solely to volume or rate are allocated to volume and rate based on the proportion of the change in each category. [1] Average balances exclude unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities transferred from available-for-sale to held-to-maturity. 132 Net Interest income for the nine-month period ended September 30, 2025 was $1.9 billion, or $192.1 million higher than the same period in 2024. Taxable equivalent net interest income was $2.1 billion, an increase of $264.6 million when compared to the same period in 2024. NIM was 3.46%, an increase of 26 basis points when compared to 3.20% in 2024. NIM, on a taxable equivalent basis, for the nine months ended September 30, 2025 was 3.83%, an increase of 39 basis points compared to the same period of 2024. The main drivers of the variances in net interest income on a taxable equivalent basis for the nine-month period ended September 30, 2025 were: ● higher income from investment securities and money market investments by $29.3 million driven by higher income from U.S. Treasury securities by $103.2 million mainly due to higher yields by 47 basis points and higher average volume by $1.1 billion, as the Corporation continues to re-invest U.S. Treasury Notes maturities at higher yields, as well as use of funds for the purchase of U.S. Treasury securities, partially offset by lower income from money market investments by $66.3 million, or 102 basis points, mainly due money market investments lower yield due to the decline in short-term market rates and the use of funds for loan growth and investments in U.S. Treasury securities , as discussed above; ● higher income from loans by $117.2 million resulting from higher average balances by $2.3 billion, reflected across most portfolios, most notably in the commercial, construction and mortgage loan portfolios, partially offset by lower loan yield by three basis points driven by adjustable-rate construction and commercial portfolios due to the decline in market rates; and ● lower deposit cost by $124.1 million mainly due to the repricing of market linked P.R. public deposits, which declined by 96 basis points, and the repricing of high-cost deposits at Popular U.S. 133 Table 4 – Analysis of Levels & Yields on a Taxable Equivalent Basis from Continuing Operations (Non-GAAP) Period ended September 30, Variance Average Volume Average Yields / Costs Interest Attributable to 2025 2024 Variance 2025 2024 Variance 2025 2024 Variance Rate Volume (In millions) (In thousands) $ 6,205 $ 6,664 $ (459) 4.45 % 5.47 % (1.02) % Money market investments $ 206,565 $ 272,893 $ (66,328) $ (48,483) $ (17,845) 28,729 28,271 458 3.28 2.88 0.40 Investment securities [1] 705,879 610,341 95,538 79,281 16,257 29 30 (1) 5.74 5.02 0.72 Trading securities 1,237 1,114 123 155 (32) Total money market, investment and trading 34,963 34,965 (2) 3.49 3.38 0.11 securities 913,681 884,348 29,333 30,953 (1,620) Loans: 18,802 17,707 1,095 6.72 6.87 (0.15) Commercial 945,330 910,241 35,089 (20,306) 55,395 1,440 1,064 376 8.19 8.97 (0.78) Construction 88,179 71,426 16,753 (6,722) 23,475 1,961 1,794 167 7.18 6.86 0.32 Leasing 105,650 92,292 13,358 4,501 8,857 8,331 7,818 513 5.89 5.67 0.22 Mortgage 368,141 332,626 35,515 13,125 22,390 3,224 3,209 15 14.10 13.94 0.16 Consumer 339,880 334,818 5,062 3,058 2,004 3,935 3,820 115 9.00 8.86 0.14 Auto 264,905 253,511 11,394 3,760 7,634 37,693 35,412 2,281 7.49 7.52 (0.03) Total loans 2,112,085 1,994,914 117,171 (2,584) 119,755 $ 72,656 $ 70,377 $ 2,279 5.57 % 5.46 % 0.11 % Total earning assets $ 3,025,766 $ 2,879,262 $ 146,504 $ 28,369 $ 118,135 Interest bearing deposits: $ 8,077 $ 7,558 $ 519 1.73 % 2.00 % (0.27) % NOW and money market $ 104,711 $ 113,405 $ (8,694) $ (14,883) $ 6,189 14,547 14,579 (32) 0.84 0.93 (0.09) Savings 91,430 101,008 (9,578) (9,213) (365) 8,587 8,142 445 3.17 3.35 (0.18) Time deposits 203,909 204,014 (105) (11,631) 11,526 20,464 19,168 1,296 3.24 4.20 (0.96) P.R. public deposits 496,303 601,993 (105,690) (144,853) 39,163 51,675 49,447 2,228 2.32 2.76 (0.44) Total interest bearing deposits 896,353 1,020,420 (124,067) (180,580) 56,513 14,778 15,075 (297) Non-interest bearing demand deposits 66,453 64,522 1,931 1.80 2.11 (0.31) Total deposits 896,353 1,020,420 (124,067) (180,580) 56,513 333 89 244 4.55 5.65 (1.10) Short-term borrowings 11,342 3,748 7,594 (669) 8,263 Other medium and 835 975 (140) 5.79 5.18 0.61 long-term debt 36,173 37,799 (1,626) 3,875 (5,501) Total interest bearing 52,843 50,511 2,332 2.39 2.81 (0.42) liabilities (excluding demand deposits) 943,868 1,061,967 (118,099) (177,374) 59,275 5,035 4,791 244 Other sources of funds $ 72,656 $ 70,377 $ 2,279 1.74 % 2.02 % (0.28) % Total source of funds $ 943,868 $ 1,061,967 $ (118,099) $ (177,374) $ 59,275 3.83 % 3.44 % 0.39 % Net interest margin/ income on a taxable equivalent basis (Non-GAAP) $ 2,081,898 $ 1,817,295 $ 264,603 $ 205,743 $ 58,860 3.18 % 2.65 % 0.53 % Net interest spread Taxable equivalent adjustment 198,247 125,766 72,481 3.46 % 3.20 % 0.26 % Net interest margin/ income non-taxable equivalent basis (GAAP) $ 1,883,651 $ 1,691,529 $ 192,122 Note: The changes that are not due solely to volume or rate are allocated to volume and rate based on the proportion of the change in each category. [1] Average balances exclude unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities transferred from available-for-sale to held-to-maturity. 134 Provision for Credit Losses - Loans Held-in-Portfolio and Unfunded Commitments For the quarter ended September 30, 2025, the Corporation recorded a provision for credit losses of $75.1 million, an increase of $3.7 million when compared to the same quarter of the previous year. The provision for loan and lease losses was $74.5 million, an increase of $1.7 million, and the provision for unfunded commitments was $0.8 million, an unfavorable variance of $1.3 million, mainly driven by higher unfunded commitments at the BPPR segment. The provision release for HTM was $0.2 million, an increase of $0.6 million when compared to the same quarter of the previous year. As discussed in Note 8 to the Consolidated Financial Statements, the Corporation estimates the ACL by weighting the outputs of optimistic, baseline, and pessimistic scenarios. During the first quarter of 2025, in response to the economic uncertainty, the Corporation increased the probability assigned to the pessimistic scenario making it equal to the baseline scenario. Subsequently, in the second quarter of 2025, the probability assigned to the pessimistic scenario was moderately reduced based on the changes in the economic outlook and a reassessment of uncertainty compared to the previous quarter. The net impact of these two events on the ACL levels for the nine months ended September 30, 2025 was $13.7 million in additional reserves. There were no changes to the probability weights during the third quarter of 2025. The probability weight for the pessimistic scenario remains above the levels observed in 2024, given the ongoing economic uncertainty. The major drivers of the changes in the provision for loan losses during the quarter by business segment when compared to the same quarter in 2024, were as follows: