10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form

10-Q

[X]

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended

June 30, 2025

[ ]

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number:

001-34084

POPULAR, INC.

(Exact name of registrant as specified in its charter)

Puerto Rico

66-0667416

(State or other jurisdiction of Incorporation or

(IRS Employer Identification Number)

organization)

Popular Center Building

209 Muñoz Rivera Avenue

Hato Rey

Puerto Rico

00918

(Address of principal executive offices)

(Zip code)

(

787

)

765-9800

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which

registered

Common Stock ($0.01 par value)

BPOP

The

NASDAQ Stock Market

6.125% Cumulative Monthly Income Trust

Preferred Securities

BPOPM

The

NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports

required to be filed by Section 13 or 15(d) of the

Securities Exchange

Act of

1934 during

the preceding

12 months

(or for

such shorter

period that

the registrant

was

required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X]

Yes

[

]

Indicate by

check mark

whether the registrant

has submitted

electronically every

Interactive Data

File required to

submitted pursuant to

Rule 405 of

Regulation S-T (§

232.405 of this

chapter) during the

preceding 12 months

(or for

such shorter period that the registrant was required to submit such files).

[X]

Yes

[

]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,

smaller reporting company, or an emerging growth company.

See definitions of “large accelerated filer”, “accelerated

filer,” “smaller reporting company,”

and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

[X]

Accelerated filer [

]

Non-accelerated filer [

]

Smaller reporting company

[ ]

Emerging growth company

[ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended

transition period for complying with any new or revised financial accounting standards provided pursuant to Section

13(a) of the Exchange Act.

[

]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[

]

Yes

[X]

Indicate

the

number

outstanding

each

the

issuer’s

classes

common

stock,

the

latest

practicable date:

Common Stock, $0.01 par value,

67,582,844

shares outstanding as of August 7, 2025.

POPULAR INC

INDEX

Part I – Financial Information

Page

Item 1. Financial Statements

Unaudited Consolidated Statements of Financial Condition

at June 30, 2025

and December 31, 2024

Unaudited Consolidated Statements of Operations for

the quarters

and six months ended June 30, 2025 and 2024

Unaudited Consolidated Statements of Comprehensive

Income for the

quarters and six months ended June 30, 2025 and

2024

Unaudited Consolidated Statements of Changes in

Stockholders’ Equity for the

quarters and six months ended June 30, 2025 and

2024

Unaudited Consolidated Statements of Cash Flows for

the six months

ended June 30, 2025 and 2024

Notes to Unaudited Consolidated Financial Statements

Item 2. Management’s Discussion and Analysis of Financial

Condition and

Results of Operations

133

Item 3. Quantitative and Qualitative Disclosures about

Market Risk

178

Item 4. Controls and Procedures

178

Part II – Other Information

Item 1. Legal Proceedings

178

Item 1A. Risk Factors

178

Item 2. Unregistered Sales of Equity Securities and

Use of Proceeds

179

Item 3. Defaults Upon Senior Securities

179

Item 4. Mine Safety Disclosures

179

Item 5. Other Information

179

Item 6. Exhibits

179

Signatures

181

Forward-Looking Statements

This

Form 10-Q

contains “forward-looking

statements” within

the meaning

of the

U.S. Private

Securities Litigation

Reform Act

1995,

including,

without

limitation,

statements

about

Popular,

Inc.’s

(the

“Corporation,”

“Popular,”

“we,”

“us,”

“our”)

business,

financial condition, results

of operations, plans,

objectives and future

performance. These statements

are not

guarantees of future

performance,

are

based

management’s

current

expectations

and,

their

nature,

involve

risks,

uncertainties,

estimates

and

assumptions. Potential

factors, some

of which

are beyond

the Corporation’s

control, could

cause actual

results to

differ materially

from those expressed in, or implied by, such forward-looking statements. Risks and uncertainties include without limitation the effect

of competitive and

economic factors, and our

reaction to those factors,

the adequacy of

the allowance for loan

losses, delinquency

trends, market

risk and

the impact

of interest

rate changes

(including on

our cost

of deposits),

capital markets

conditions, capital

adequacy

and

liquidity,

and

the

effect

legal

and

regulatory

proceedings

and

new

accounting

standards

the

Corporation’s

financial condition

and results

of operations.

All statements

contained herein

that

are not

clearly

historical in

nature are

forward-

looking, and the words “anticipate,” “believe,” “continues,”

“expect,” “estimate,” “intend,” “project” and similar expressions

and future

or conditional verbs

such as

“will,” “would,” “should,”

“could,” “might,” “can,”

“may” or similar

expressions are

generally intended to

identify forward-looking statements.

Various factors, some of which

are beyond Popular’s control, could cause actual results to differ materially from those expressed in,

or implied by, such forward-looking statements. Factors that might cause such a

difference include, but are not limited to:

●

the

rate

growth

decline

the

economy

and

employment

levels,

well

general

business

and

economic

conditions

the

geographic

areas

serve

and,

particular,

the

Commonwealth

Puerto

Rico

(the

“Commonwealth” or “Puerto Rico”), where a significant

portion of our business is concentrated;

●

adverse

economic conditions,

including high

levels

inflation, that

adversely affect

housing

prices, the

job

market,

consumer confidence

and spending

habits which

may affect

in turn,

among other

things, our

level of

non-performing

assets, charge-offs and provision expense;

●

changes in interest rates and market liquidity,

which may reduce interest margins, impact funding sources, reduce loan

originations, affect

our ability

to originate

and distribute

financial products

in the

primary and

secondary markets

and

impact the value of our investment portfolio and

our ability to return capital to our stockholders;

●

the

impact

bank

failures

adverse

developments

other

banks

and

negative

media

coverage

the

banking industry in general on investor and depositor

sentiment regarding the stability and liquidity of

banks;

●

the impact of the current fiscal and economic challenges of Puerto Rico and the measures

taken and to be taken by the

Puerto

Rico

Government

and

the

Federally-appointed

oversight

board

the

economy,

our

customers

and

our

business;

●

the

amount of

Puerto Rico

public sector

deposits held

the Corporation,

whose future

balances are

uncertain and

difficult

predict

and

may

impacted

factors

such

the

amount

Federal

funds

received

the

P.R.

Government

and

the

rate

expenditure

such

funds,

well

the

financial

condition,

liquidity

and

cash

management practices of the Puerto Rico Government

and its instrumentalities;

●

unforeseen or

catastrophic events,

including extreme

weather events

such as

hurricanes and

other natural

disasters,

man-made disasters, acts of violence or war or

pandemics, epidemics and other health-related

crises, or the fear of any

such event

occurring, any of

which could cause

adverse consequences for

our business, including,

but not

limited to,

disruptions in our operations;

●

our ability to

achieve the expected

benefits from our

transformation initiative, including

our ability to

achieve projected

earnings, efficiencies and

return on tangible

common equity and

accurately anticipate costs

and expenses associated

therewith;

●

the fiscal and monetary policies of the federal government

and its agencies;

●

changes in

federal

bank regulatory

and supervisory

policies, including

required levels

capital, liquidity,

resolution-

related requirements and the impact of other proposed

capital standards on our capital ratios;

●

changes

and

uncertainty

regarding

federal

funding,

tax,

trade

and

tariff

policies,

and

rulemaking,

supervision,

examination and enforcement priorities of the federal

administration;

●

increases

additional

Federal

Deposit

Insurance

Corporation

(“FDIC”)

assessments,

such

the

special

assessment implemented

by the

FDIC to

recover the

losses to

the deposit

insurance fund

(“DIF”) resulting

from the

receiverships of Silicon Valley Bank and Signature Bank;

●

regulatory approvals

that may

be necessary

to undertake

certain actions

or consummate

strategic transactions,

such

as acquisitions and dispositions;

●

the

relative strength

weakness

the

consumer and

commercial credit

sectors

and

the

real

estate markets

Puerto Rico and the other markets in which

our borrowers are located;

●

a deterioration in the credit quality of our

clients, customers and counterparties;

●

the performance of the stock and bond markets;

●

competition in the financial services industry;

●

possible legislative, tax or regulatory changes;

●

a failure

in or

breach of

our operational

or security

systems or

infrastructure or

those of

Evertec, Inc.,

our provider

core financial

transaction processing and

information technology services,

or of

third parties

providing services

to us,

including

result

cyberattacks,

e-fraud,

denial-of-services

and

computer

intrusion,

resulting

in,

among

other

things, loss or breach of customer data, disruption

of services, reputational damage or additional

costs to Popular;

●

changes in market rates and prices which may

adversely impact the value of financial assets

and liabilities;

●

potential judgments,

claims, damages,

penalties, fines,

enforcement actions

and

reputational damage

resulting from

pending or future litigation and regulatory or government

investigations or actions;

●

changes in accounting standards, rules and interpretations;

●

our ability to grow our core businesses;

●

decisions to downsize, sell or close branches or business

units or otherwise change our business mix;

and

●

management’s ability to identify and manage these and

other risks.

Moreover, the

outcome of any

legal and

regulatory proceedings, as

discussed in “Part

II, Item

1. Legal Proceedings,”

is inherently

uncertain and depends on judicial interpretations of law and the findings of regulators, judges and/or juries. Investors should refer to

the Corporation’s Annual

Report on Form

10-K for the

year ended December 31,

2024 (the “2024

Form 10-K”), as

well as “Part

II,

Item 1A” of our Quarterly

Report on this Form 10-Q for

a discussion of such factors and

certain risks and uncertainties to which the

Corporation is subject.

All forward-looking

statements included

in this

Form 10-Q

are based

upon information

available to

Popular as

of the

date of

this

Form 10-Q, and other than as

required by law, including the

requirements of applicable securities laws, we assume no

obligation to

update or revise any such forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date

of such statements.

POPULAR, INC.

CONSOLIDATED STATEMENTS

OF FINANCIAL CONDITION

(UNAUDITED)

[UNAUDITED]

June 30,

December 31,

(In thousands, except share information)

2025

2024

Assets:

Cash and due from banks

400,631

419,638

Money market investments:

Time deposits with other banks

6,340,786

6,380,948

Total money market investments

6,340,786

6,380,948

Trading account debt securities, at fair value

29,643

32,831

Debt securities available-for-sale, at fair

value:

Pledged securities with creditors’ right to repledge

31,022

30,486

Other debt securities available-for-sale

20,459,190

18,215,417

Debt securities available-for-sale

20,490,212

18,245,903

Debt securities held-to-maturity, at amortized cost:

Pledged securities with creditors’ right to repledge

27,560

27,405

Other debt securities held-to-maturity

7,514,164

7,730,672

Debt securities held-to-maturity (fair

value 2025 - $

7,555,517

; 2024 - $

7,682,664

)

7,541,724

7,758,077

Less – Allowance for credit losses

5,999

5,317

Debt securities held-to-maturity, net

7,535,725

7,752,760

Equity securities (realizable value 2025 -

222,907

; 2024 - $

208,663

)

222,391

208,166

Loans held-for-sale, at fair value

2,898

5,423

Loans held-in-portfolio

38,611,834

37,522,995

Less – Unearned income

426,656

415,343

Allowance for credit losses

769,485

746,024

Total loans held-in-portfolio, net

37,415,693

36,361,628

Premises and equipment, net

649,191

601,787

Other real estate

46,126

57,268

Accrued income receivable

274,867

263,389

Mortgage servicing rights, at fair value

103,077

108,103

Other assets

1,745,052

1,797,759

Goodwill

802,954

Other intangible assets

5,844

6,826

Total assets

76,065,090

73,045,383

Liabilities and Stockholders’ Equity

Liabilities:

Deposits:

Non-interest bearing

15,114,614

15,139,555

Interest bearing

52,102,877

49,744,790

Total deposits

67,217,491

64,884,345

Assets sold under agreements to repurchase

56,043

54,833

Other short-term borrowings

550,000

225,000

Notes payable

808,451

896,293

Other liabilities

1,479,087

1,371,846

Total liabilities

70,111,072

67,432,317

Commitments and contingencies (Refer

to Note 20)

Stockholders’ equity:

Preferred stock,

30,000,000

shares authorized;

885,726

shares issued and outstanding (2024 -

885,726

)

22,143

Common stock, $

0.01

par value;

170,000,000

shares authorized;

104,889,180

shares issued (2024 -

104,849,460

) and

67,937,468

shares outstanding (2024 -

70,141,291

)

1,049

1,048

Surplus

4,919,950

4,908,693

Retained earnings

4,861,958

4,570,957

Treasury stock - at cost,

36,951,712

shares (2024 -

34,708,169

)

(2,455,425)

(2,228,535)

Accumulated other comprehensive loss, net

of tax

(1,395,657)

(1,661,240)

Total stockholders’ equity

5,954,018

5,613,066

Total liabilities and stockholders’ equity

76,065,090

73,045,383

The accompanying notes are an integral part of

these Consolidated Financial Statements.

POPULAR, INC.

CONSOLIDATED STATEMENTS

OF OPERATIONS

(UNAUDITED)

Quarters ended June 30,

Six months ended June 30,

(In thousands, except per share information)

2025

2024

2025

2024

Interest income:

Loans

684,587

648,739

1,351,260

1,287,469

Money market investments

69,532

88,316

139,698

176,832

Investment securities

189,753

184,852

369,912

351,747

Total interest income

943,872

921,907

1,860,870

1,816,048

Interest expense:

Deposits

295,058

339,939

592,921

669,435

Short-term borrowings

5,300

1,126

6,726

2,318

Long-term debt

11,965

12,530

24,077

25,239

Total interest expense

312,323

353,595

623,724

696,992

Net interest income

631,549

568,312

1,237,146

1,119,056

Provision for credit losses

48,941

46,794

113,022

119,392

Net interest income after provision for credit losses

582,608

521,518

1,124,124

999,664

Non-interest income:

Service charges on deposit accounts

38,826

37,526

77,880

74,968

Other service fees

100,522

96,863

195,030

191,135

Mortgage banking activities (Refer to Note 9)

4,872

5,723

8,561

10,083

Net gain, including impairment on equity securities

1,862

319

1,448

1,422

Net gain on trading account debt securities

538

277

1,058

638

Adjustments to indemnity reserves on loans sold

120

212

293

(25)

Other operating income

21,737

25,386

36,268

51,903

Total non-interest income

168,477

166,306

320,538

330,124

Operating expenses:

Personnel costs

229,355

197,424

442,068

412,801

Net occupancy expenses

29,140

27,692

56,358

55,733

Equipment expenses

5,789

9,662

11,091

19,229

Other taxes

18,632

15,333

37,357

29,708

Professional fees

28,108

37,744

54,933

66,662

Technology and software expenses

84,696

79,752

168,364

159,214

Processing and transactional services

37,861

39,096

75,642

73,290

Communications

5,010

4,357

9,914

8,914

Business promotion

26,385

25,449

50,060

46,438

Deposit insurance

9,407

10,581

19,442

34,468

Other real estate owned (OREO) income

(4,124)

(5,750)

(7,454)

(11,071)

Other operating expenses

22,117

27,502

45,016

55,774

Amortization of intangibles

385

734

982

1,529

Total operating expenses

492,761

469,576

963,773

952,689

Income before income tax

258,324

218,248

480,889

377,099

Income tax expense

47,884

40,459

92,947

96,027

Net Income

210,440

177,789

387,942

281,072

Net Income Applicable to Common Stock

210,087

177,436

387,236

280,366

Net Income per Common Share – Basic

3.09

2.47

5.64

3.90

Net Income per Common Share – Diluted

3.09

2.46

5.64

3.90

The accompanying notes are an integral part of

these Consolidated Financial Statements.

POPULAR, INC.

CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

(UNAUDITED)

Quarters ended,

Six months ended,

June 30,

(In thousands)

2025

2024

2025

2024

Net income

210,440

177,789

387,942

281,072

Other comprehensive income (loss) before

tax:

Foreign currency translation adjustment

7,499

165

854

(3,855)

Amortization of net losses of pension and

postretirement benefit plans

2,272

3,618

4,545

7,236

Unrealized holding gains (losses) on debt securities

arising during the period

58,972

22,422

224,957

(50,608)

Amortization of unrealized losses of debt

securities transfer from available-for-

sale to held-to-maturity

46,242

44,421

91,552

88,430

Other comprehensive income before tax

114,985

70,626

321,908

41,203

Income tax expense

(20,655)

(15,722)

(56,325)

(23,954)

Total other comprehensive income, net of tax

94,330

54,904

265,583

17,249

Comprehensive income, net of tax

304,770

232,693

653,525

298,321

Tax effect allocated to each component of other comprehensive

income:

Quarters ended

Six months ended,

June 30,

(In thousands)

2025

2024

2025

2024

Amortization of net losses of pension and

postretirement benefit plans

852

)

1,357

)

1,704

)

2,714

)

Unrealized holding losses on debt securities

arising during the period

(10,555)

(5,481)

(36,311)

(3,555)

Amortization of unrealized losses of debt

securities transfer from available-for-

sale to held-to-maturity

(9,248)

(8,884)

(18,310)

(17,685)

Income tax expense

(20,655)

(15,722)

(56,325)

(23,954)

The accompanying notes are an integral

part of the Consolidated Financial Statements.

POPULAR, INC.

CONSOLIDATED STATEMENTS

OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

Accumulated

other

Common

Preferred

Retained

Treasury

comprehensive

(In thousands)

stock

Surplus

earnings

stock

loss

Total

Balance at March 31, 2024

1,048

22,143

4,847,466

4,253,030

(2,013,187)

(1,933,186)

5,177,314

Net income

177,789

Issuances of common stock

1,768

Dividends declared:

Common stock

[1]

(44,944)

Preferred stock

(353)

Common stock purchases

(3,200)

Stock based compensation

3,513

5,887

9,400

Other comprehensive income, net of tax

54,904

Balance at June 30, 2024

1,048

22,143

4,852,747

4,385,522

(2,010,500)

(1,878,282)

5,372,678

Balance at March 31, 2025

1,049

22,143

4,912,886

4,699,697

(2,346,093)

(1,489,987)

5,799,695

Net income

210,440

Issuances of common stock

1,760

Dividends declared:

Common stock

[1]

(47,826)

Preferred stock

(353)

Common stock purchases

[2]

(117,075)

Stock based compensation

5,304

7,743

13,047

Other comprehensive income, net of tax

94,330

Balance at June 30, 2025

1,049

22,143

4,919,950

4,861,958

(2,455,425)

(1,395,657)

5,954,018

[1]

Dividends declared per common share during the quarter

ended June 30, 2025 - $

0.7

0 (2024 - $

0.62

[2]

Includes common stock repurchases

of $

112

.0 million as part of

a repurchase authorization up

to $

500

million announced by the

Corporation on

July 24, 2024 (the "2024 Repurchase Program"). Refer to Note

17 for additional information.

POPULAR, INC.

CONSOLIDATED STATEMENTS

OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

Accumulated

other

Common

Preferred

Retained

Treasury

comprehensive

(In thousands)

stock

Surplus

earnings

stock

loss

Total

Balance at December 31, 2023

1,048

22,143

4,843,399

4,194,851

(2,018,957)

(1,895,531)

5,146,953

Net income

281,072

Issuances of common stock

3,567

Dividends declared:

Common stock

[1]

(89,695)

Preferred stock

(706)

Common stock purchases

(6,776)

Stock based compensation

5,781

15,233

21,014

Other comprehensive income, net of tax

17,249

Balance at June 30, 2024

1,048

22,143

4,852,747

4,385,522

(2,010,500)

(1,878,282)

5,372,678

Balance at December 31, 2024

1,048

22,143

4,908,693

4,570,957

(2,228,535)

(1,661,240)

5,613,066

Net income

387,942

Issuances of common stock

3,529

3,530

Dividends declared:

Common stock

[1]

(96,235)

Preferred stock

(706)

Common stock purchases

[2]

(243,055)

Stock based compensation

7,728

16,165

23,893

Other comprehensive income, net of tax

265,583

Balance at June 30, 2025

1,049

22,143

4,919,950

4,861,958

(2,455,425)

(1,395,657)

5,954,018

[1]

Dividends declared per common share during the six months

ended June 30, 2025 - $

1.40

(2024 - $

1.24

[2]

Includes common stock repurchases of $

234.3

million as part of the 2024 Repurchase Program. Refer

to Note 17 for additional information.

For the six months ended

June 30,

Disclosure of changes in number of shares:

2025

2024

Preferred Stock:

Balance at beginning and end of period

885,726

Common Stock – Issued:

Balance at beginning of period

104,849,460

104,767,348

Issuances of common stock

39,720

44,623

Balance at end of period

104,889,180

104,811,971

Treasury stock

(36,951,712)

(32,446,045)

Common Stock – Outstanding

67,937,468

72,365,926

The accompanying notes are an integral part of these Consolidated

Financial Statements.

POPULAR, INC.

CONSOLIDATED STATEMENTS

OF CASH FLOWS

(UNAUDITED)

Six months ended June 30,

(In thousands)

2025

2024

Cash flows from operating activities:

Net income

387,942

281,072

Adjustments to reconcile net income to net cash provided

by operating activities:

Provision for credit losses

113,022

119,392

Amortization of intangibles

982

1,529

Depreciation and amortization of premises and equipment

25,319

31,249

Net accretion of discounts and amortization of premiums and

deferred fees

(136,208)

(127,770)

Interest capitalized on loans subject to the temporary payment

moratorium or loss mitigation alternatives

(2,822)

(4,047)

Share-based compensation

21,930

16,391

Fair value adjustments on mortgage servicing rights

5,523

5,384

Adjustments to indemnity reserves on loans sold

(293)

Earnings from investments under the equity method, net

of dividends or distributions

152

(2,871)

Deferred income tax expense

20,832

19,702

Gain on:

Disposition of premises and equipment and other productive

assets

(91)

(6,295)

Sale of loans, including valuation adjustments on loans

held-for-sale and mortgage banking activities

(156)

(76)

Sale of equity method investment

(1,226)

Sale of foreclosed assets, including write-downs

(5,076)

(10,575)

Acquisitions of loans held-for-sale

(2,332)

(1,767)

Proceeds from sale of loans held-for-sale

15,584

19,358

Net originations on loans held-for-sale

(12,137)

(22,580)

Net decrease (increase) in:

Trading debt securities

10,040

6,735

Equity securities

(1,411)

(4,445)

Accrued income receivable

(11,419)

(17,340)

Other assets

(19,371)

(8,463)

Net increase (decrease) in:

Interest payable

2,584

3,145

Pension and other postretirement benefits obligation

2,191

3,732

Other liabilities

1,434

(59,481)

Total adjustments

27,051

(39,068)

Net cash provided by operating activities

414,993

242,004

Cash flows from investing activities:

Net decrease in money market investments

40,765

147,650

Purchases of investment securities:

Available-for-sale

(18,905,199)

(17,231,900)

Equity

(25,811)

(1,667)

Proceeds from calls, paydowns, maturities and redemptions

of investment securities:

Available-for-sale

17,145,332

15,375,714

Held-to-maturity

303,212

304,653

Proceeds from sale of investment securities:

Equity

14,497

4,046

Net disbursements

on loans

(912,037)

(287,684)

Proceeds from sale of loans

40,983

17,640

Acquisition of loan portfolios

(319,297)

(384,479)

Return of capital from equity method investments

279

Net proceeds from sale of equity method investment

1,226

Acquisition of premises and equipment and other productive

assets

(96,200)

(95,412)

Proceeds from sale of:

Premises and equipment and other productive assets

344

4,409

Foreclosed assets

47,590

58,979

Net cash used in investing activities

(2,664,595)

(2,087,772)

Cash flows from financing activities:

Net increase in:

Deposits

2,334,656

1,912,286

Assets sold under agreements to repurchase

1,210

14,300

Other short-term borrowings

325,000

Payments of notes payable

(88,522)

(46,000)

Principal payments of finance leases

(1,829)

(1,774)

Proceeds from issuances of common stock

3,530

3,567

Dividends paid

(98,661)

(90,151)

Net payments for repurchase of common stock

(236,203)

(452)

Payments related to tax withholding for share-based compensation

(7,983)

(6,324)

Net cash provided by financing activities

2,231,198

1,785,452

Net decrease in cash and due from banks, and restricted

cash

(18,404)

(60,316)

Cash and due from banks, and restricted cash at beginning

of period

429,406

427,575

Cash and due from banks, and restricted cash at the end of

the period

411,002

367,259

The accompanying notes are an integral part of these Consolidated

Financial Statements.

Notes to Consolidated Financial

Statements

(Unaudited)

Note 1 -

Nature of operations

Note 2 -

Basis of presentation

Note 3 -

New accounting pronouncements

Note 4 -

Restrictions on cash and due from banks and

certain securities

Note 5 -

Debt securities available-for-sale

Note 6 -

Debt securities held-to-maturity

Note 7 -

Loans

Note 8 -

Allowance for credit losses – loans held-in-

portfolio

Note 9 -

Mortgage banking activities

Note 10 -

Transfers of financial assets and mortgage

servicing assets

Note 11 -

Other real estate owned

Note 12 -

Other assets

Note 13 -

Goodwill and other intangible assets

Note 14 -

Deposits

Note 15 -

Borrowings

Note 16 -

Other liabilities

Note 17 -

Stockholders’ equity

Note 18 -

Other comprehensive income

Note 19 -

Guarantees

Note 20 -

Commitments and contingencies

Note 21-

Non-consolidated variable interest entities

100

Note 22 -

Related party transactions

102

Note 23 -

Fair value measurement

103

Note 24 -

Fair value of financial instruments

111

Note 25 -

Net income per common share

114

Note 26 -

Revenue from contracts with customers

115

Note 27 -

Leases

116

Note 28 -

Pension and postretirement benefits

118

Note 29 -

Stock-based compensation

119

Note 30 -

Income taxes

122

Note 31 -

Supplemental disclosure on the consolidated

statements of cash flows

126

Note 32 -

Segment reporting

127

Note 1 – Nature of Operations

Popular,

Inc. (the

“Corporation” or

“Popular”) is

a diversified,

publicly owned

financial holding

company subject

to the

supervision

and

regulation

the

Board

Governors

the

Federal

Reserve

System.

The

Corporation

has

operations

Puerto

Rico,

the

mainland United

States (“U.S.”)

and U.S.

and British

Virgin Islands.

In Puerto

Rico, the

Corporation provides retail,

mortgage and

commercial banking services and auto and equipment leasing and financing through its principal banking subsidiary, Banco Popular

de Puerto

Rico (“BPPR”),

as well

as broker-dealer

and insurance

services through

specialized subsidiaries. In

the U.S.

mainland,

the

Corporation provides

retail, mortgage,

commercial banking

services, as

well as

equipment leasing

and

financing, through

its

New

York-chartered

banking

subsidiary,

Popular

Bank

(“PB”

“Popular U.S.”),

which

has

branches

located

New

York,

New

Jersey, and Florida.

Note 2 – Basis of Presentation

Basis of Presentation

The (unaudited) interim Consolidated Financial Statements are, in the opinion of management, a fair statement of the results

for the

periods reported.

The consolidated statement

of financial condition

presented as

of December 31,

2024 was

derived from

audited

Consolidated Financial Statements of the Corporation

for the year ended December 31, 2024.

Certain

information

and

notes

the

financial

statements

disclosures

which

would

normally

included

financial

statements

prepared in

accordance with

Accounting Principles

Generally Accepted

in the

United States

of America

(U.S. GAAP),

have been

condensed or omitted from the unaudited financial statements pursuant

to the rules and regulations of the

Securities and Exchange

Commission.

Accordingly,

these

financial

statements

should

read

conjunction

with

the

audited

Consolidated

Financial

Statements of

the Corporation

for the

year ended

December 31,

2024,

included in

the 2024

Form 10-K.

Operating results

for the

interim periods disclosed herein are not necessarily

indicative of the results that may be expected

for a full year or any future period.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial

statements in conformity with

accounting principles generally accepted in

the United States

of America

requires management to make

estimates and assumptions that

affect the reported

amounts of assets and

liabilities and contingent

assets

and

liabilities

the

date

the

financial

statements,

and

the

reported

amounts

revenues

and

expenses

during

the

reporting period. Actual results could differ from those estimates.

Note 3 - New accounting pronouncements

Recently Adopted Accounting Standards Updates

Standard

Description

Date of adoption

Effect on the financial statements

FASB ASU 2025-02,

Liabilities (Topic 405) -

Amendments to SEC

Paragraphs Pursuant to

SEC Staff Accounting

Bulletin No. 122

The

Financial Accounting

Standards Board

("FASB")

issued

Accounting

Standard

Update

("ASU")

2025-02

March

2025,

which

amends

the

guidance

Accounting

Standards

Codification

("ASC")

450-10-

S99-1

removing

the

interpretative

guidance

Section

Topic

the

Staff Accounting Bulletin Series ("SAB") text

that

addressed

the

accounting

for

obligations to

safeguard crypto-assets

held

by platform

users to

align the

ASC with

the

latest

SAB

112

directive,

ensuring

consistency and clarity.

March 18, 2025

The

Corporation

was

not

impacted

the

adoption of

this

ASU

since

it does

not hold crypto-assets.

FASB ASU 2024-02,

Codification

Improvements—

Amendments to Remove

References to the

Concepts Statements

The

FASB

issued

ASU

2024-02

March

2024, which

removes various

references to

concept statements from the ASC. The ASU

intends

simplify

the

Codification

and

distinguish

between

nonauthoritative

and

authoritative guidance.

January 1, 2025

The

Corporation

was

not

impacted

the adoption of this ASU since it did not

provide for

accounting changes

or new

presentation

disclosure

requirements.

The

ASU

eliminated

references

within

the

ASC

the

concept

statements,

which

considered non-authoritative guidance.

FASB ASU 2024-01,

Compensation - Stock

Compensation (Topic 718)

- Scope Application of

Profits Interest and Similar

Awards

The

FASB

issued

ASU

2024-01

March

2024,

which

amends

ASC

Topic

718

including

illustrative

example

demonstrate how

an entity

would apply

the

scope

guidance

paragraph

718-10-15-3

to determine whether profits interest awards

should be accounted

for in accordance

with

ASC

Topic

718.

The

ASU

intended

reduce complexity and diversity in practice.

January 1, 2025

The

Corporation

was

not

impacted

the

adoption

this

ASU

since

the

performance

awards

the

Corporation

continue

meet

the

requirements of ASC 718-10-15-3.

FASB ASU 2023-08,

Intangibles - Goodwill and

Other - Crypto Assets

(Subtopic 350-60) -

Accounting for and

Disclosure of Crypto

Assets

The

FASB

issued

ASU

2023-08

December

2023,

which

amends

ASC

Subtopic

350-60

requiring

that

crypto

assets

are

measured

fair

value

the

statement

financial

position

each

reporting

period

with

changes

from

remeasurement

being

recognized

net

income.

The

ASU

also

requires

enhanced

disclosures

for

both

annual

and

interim

reporting

periods

provide

investors

with

relevant information

analyze and

assess

the

exposure

and

risk

significant

individual crypto asset holdings.

January 1, 2025

The

Corporation

was

not

impacted

the

adoption of

this

ASU

since

it does

not hold crypto-assets.

Recently Adopted Accounting Standards Updates

Standard

Description

Date of adoption

Effect on the financial statements

FASB ASU 2023-05,

Business Combinations -

Joint Venture Formations

(Subtopic 805-60) -

Recognition and initial

measurement

The

FASB

issued

ASU

2023-05

August

2023, which

amends ASC

Subtopic 805-60

to include specific

guidance about how

joint

ventures

should

recognize

and

initially

measure

assets

contributed

and

liabilities

assumed.

The

amendments

require

that

joint venture, upon formation, recognize and

initially

measure its

assets and

liabilities at

fair value.

January 1, 2025

The

Corporation

was

not

impacted

the

adoption

this

ASU

but

will

consider

this

guidance

for

the

initial

measurement of assets and liabilities of

newly

created

joint

ventures

prospectively.

Accounting Standards Updates Not Yet Adopted

Standard

Description

Date of adoption

Effect on the financial statements

FASB ASU 2025-05,

Financial Instruments -

Credit Losses (Topic 326)

- Measurement of Credit

Losses for Accounts

Receivables and Contract

Assets

The

FASB

issued

ASU

2025-05

July

2025,

which

permits

entities

elect

practical

expedient

when

accounting

for

current

accounts

receivable

and

current

contract

assets

arising

from

transactions

accounted

for

under

Topic

606,

Revenue

from

Contracts

with

Customers.

This

practical

expedient

establishes

that,

developing

reasonable

and

supportable

forecasts

part

estimating

expected

credit

losses,

entities

assume

that

current

conditions as

of the

balance sheet

date do

not

change

for

the

remaining

life

the

asset.

January 1, 2026

The Corporation

is currently

evaluating

any

impact

that

the

adoption

this

guidance

will

have

its

financial

statements

and

presentation

and

disclosures.

FASB ASU 2025-04,

Compensation—Stock

Compensation (Topic 718)

and Revenue from

Contracts with Customers

(Topic 606) - Clarifications

to Share-Based

Consideration Payable to

a Customer

The

FASB

issued

ASU

2025-04

May

2025,

which

clarifies

the

accounting

for

share-based

awards

granted

consideration

payable

customer.

The

ASU expands

the definition

of performance

condition

for

share-based

consideration

under ASC 718 and eliminates the forfeiture

policy election for

service conditions. It

also

confirms

that

the

variable

consideration

constraint

ASC

606

does

not

apply

such awards.

January 1, 2027

The Corporation

does not

expect to

impacted

the

adoption

this

ASU

since

does

not

grant

share-based

payment awards to customers.

FASB ASU 2025-03,

Business Combinations

(Topic 805) and

Consolidation (Topic 810)

- Determining the

Accounting Acquirer in the

Acquisition of a Variable

Interest Entity

The

FASB

issued

ASU

2025-03

May

2025 which

requires that

an entity

consider

the

factors

paragraphs

805-10-55-12

through

55-15

when

involved

acquisition transaction

effected primarily

exchanging

equity

interests when

the

legal

acquiree is

a variable

interest entity

("VIE")

that

meets

the

definition

business

determine

which

entity

the

accounting

acquirer.

This

replaces

the

requirement

that

the

primary

beneficiary

always is the acquirer.

January 1, 2027

The Corporation

is currently

evaluating

any

impact

that

the

adoption

this

guidance

will

have

its

financial

statements

and

presentation

and

disclosures.

FASB ASU 2024-04,

Debt—Debt with

Conversion and Other

Options (Subtopic 470-

20) - Induced Conversions

of Convertible Debt

Instruments

The

FASB

issued

ASU

2024-04

November

2024,

which

clarifies

the

requirements

for

determining

whether

certain

settlements

convertible

debt

instruments should

be accounted

for as

induced

conversion.

Also

makes

additional

clarifications

assist

stakeholders in

applying the

guidance. The

ASU

clarifies

that

the

incorporation,

elimination,

modification

volume-

weighted

average

price

("VWAP")

formula

does

not

automatically

cause

settlement

accounted

for

extinguishment

and

that

the

induced

conversion

guidance

applies to a convertible

debt instrument that

is not currently

convertible as long as

it had

a substantive

conversion feature

as of

both

its

issuance

date

and

the

date

the

inducement offer is accepted.

January 1, 2026

The Corporation

is currently

evaluating

any

impact

that

the

adoption

this

guidance

will

have

its

financial

statements

and

presentation

and

disclosures.

Accounting Standards Updates Not Yet Adopted

Standard

Description

Date of adoption

Effect on the financial statements

FASB ASU 2024-03,

Income Statement—

Reporting Comprehensive

Income—Expense

Disaggregation

Disclosures (Subtopic

220-40) - Disaggregation

of Income Statement

Expenses (As updated by

ASU 2025-01)

The

FASB

issued

ASU

2024-03

November

2024,

which

requires

public

entities

disclose

additional

information

about

specific

expense

categories

the

effective

income

tax

rate

and

income

tax expense tabular disclosures, as well

as the

disclosure of income

taxes paid,

within the income taxes note.

FASB ASU 2023-06,

Disclosure Improvements -

Codification Amendments

in Response to the SEC’s

Disclosure Update and

Simplification Initiative

The FASB

issued ASU

2023-06 in

October

2023

which

modifies

the

disclosure

presentation

requirements

various

subtopics

the

Codification

with

the

purpose

aligning

U.S.

GAAP

requirements

with

those

the

SEC

under

Regulation S-X and S-K.

The date on which

the SEC removes

related disclosure

requirements from

Regulation S-X or

Regulation S-K. If by

June 30, 2027, the

SEC has not

removed the

applicable

requirements from

Regulation S-X or

Regulation S-K, the

pending content of

the related

amendment will be

removed from the

Codification and will

not become

effective for any

entity.

The Corporation

does not

expect to

impacted

the

adoption

this

ASU

since

subject

SEC's

current

disclosure

and

presentation

requirements under Regulation S-X and

S-K.

Note 4 - Restrictions on cash and due

from banks and certain securities

BPPR is

required by

regulatory agencies

to maintain

average reserve

balances with

the Federal

Reserve Bank

of New

York

(the

“Fed”) or other banks. Required average reserve

balances in BPPR amounted to $

2.7

billion at June 30, 2025 (December 31, 2024 -

2.6

billion). Cash and

due from banks,

as well

as other highly

liquid securities, are

used to cover

these required average

reserve

balances.

At June

30, 2025,

the Corporation

held $

million in

restricted assets

in the

form of

funds deposited

in money

market accounts,

debt

securities

available

for

sale

and

equity

securities

(December

31,

2024

million).

The

restricted

assets

held

debt

securities available for sale and equity securities consist primarily of assets

held for the Corporation’s non-qualified retirement plans

and fund deposits guaranteeing possible liens or encumbrances

over the title of insured properties.

Note 5 – Debt securities available-for-sale

The

following

tables

present

the

amortized

cost,

gross

unrealized

gains

and

losses,

fair

value,

weighted

average

yield

and

contractual maturities of debt securities available-for-sale

at June 30, 2025 and December 31,

2024.

At June 30, 2025

Gross

Weighted

Amortized

unrealized

Fair

average

(In thousands)

cost

gains

losses

value

yield

U.S. Treasury securities

Within 1 year

11,617,164

23,332

11,593,913

3.66

After 1 to 5 years

3,823,444

20,739

25,300

3,818,883

3.80

Total U.S. Treasury

securities

15,440,608

20,820

48,632

15,412,796

3.69

Collateralized mortgage obligations - federal agencies

After 1 to 5 years

7,520

199

7,321

1.52

After 5 to 10 years

13,024

626

12,398

2.52

After 10 years

97,807

7,193

90,713

2.90

Total collateralized

mortgage obligations - federal agencies

118,351

8,018

110,432

2.77

Mortgage-backed securities - federal agencies

Within 1 year

15,394

149

15,246

2.54

After 1 to 5 years

83,070

2,438

80,639

2.28

After 5 to 10 years

696,835

290

31,836

665,289

2.38

After 10 years

5,174,509

710

970,159

4,205,060

1.67

Total mortgage-backed

securities - federal agencies

5,969,808

1,008

1,004,582

4,966,234

1.77

Other

Within 1 year

500

4.38

After 1 to 5 years

250

4.84

Total other

750

4.53

Total debt securities

available-for-sale

[1]

21,529,517

21,927

1,061,232

20,490,212

3.15

[1]

Includes $

15.5

billion pledged to secure government and trust

deposits, assets sold under agreements to repurchase, credit

facilities and loan

servicing agreements that the secured parties are not permitted

to sell or repledge the collateral, of which $

14.3

billion serve as collateral for

public funds.

The Corporation had unpledged Available

for Sale securities with a fair value of $

.0 billion that could be used to increase its

borrowing facilities.

At December 31, 2024

Gross

Weighted

Amortized

unrealized

Fair

average

(In thousands)

cost

gains

losses

value

yield

U.S. Treasury securities

Within 1 year

10,555,397

1,282

46,275

10,510,404

3.33

After 1 to 5 years

2,547,936

151

63,381

2,484,706

3.07

Total U.S. Treasury

securities

13,103,333

1,433

109,656

12,995,110

3.28

Collateralized mortgage obligations - federal agencies

After 1 to 5 years

10,538

345

10,193

1.53

After 5 to 10 years

15,334

904

14,430

2.24

After 10 years

104,168

132

8,639

95,661

2.76

Total collateralized

mortgage obligations - federal agencies

130,040

132

9,888

120,284

2.60

Mortgage-backed securities - federal agencies

Within 1 year

776

771

1.65

After 1 to 5 years

79,542

2,700

76,850

2.35

After 5 to 10 years

733,506

45,078

688,510

2.37

After 10 years

5,468,448

337

1,106,657

4,362,128

1.67

Total mortgage-backed

securities - federal agencies

6,282,272

427

1,154,440

5,128,259

1.75

Other

Within 1 year

500

5.00

After 1 to 5 years

1,750

5.50

Total other

2,250

5.39

Total debt securities

available-for-sale

[1]

19,517,895

1,992

1,273,984

18,245,903

2.78

[1]

Includes $

13.9

billion pledged to secure government and trust deposits,

assets sold under agreements to repurchase, credit facilities

and loan

servicing agreements that the secured parties are not permitted

to sell or repledge the collateral, of which $

12.9

billion serve as collateral for

public funds. The Corporation had unpledged Available

for Sale securities with a fair value of

4.3

billion that could be used to increase its

borrowing facilities.

The weighted

average yield

on debt

securities available-for-sale

is based

on amortized

cost; therefore,

does not

give

effect to

changes in fair value.

Securities

not

due

single

contractual

maturity

date,

such

mortgage-backed

securities

and

collateralized

mortgage

obligations,

are

classified

based

the

period

final

contractual

maturity.

The

expected

maturities

collateralized

mortgage

obligations, mortgage-backed securities

and certain

other securities

may differ

from their

contractual maturities

because they

may

be subject to prepayments or may be called

by the issuer.

At June 30,

2025, the Corporation did not

intend to sell or

believed it was more

likely than not that

it would be required

to sell debt

securities classified

as available-for-sale. There

were

debt securities

classified as

available-for-sale sold during

the six

months

ended June 30, 2025 and 2024.

The

following

tables

present

the

Corporation’s

fair

value

and

gross

unrealized

losses

debt

securities

available-for-sale,

aggregated by investment category and length of

time that individual securities have been in a continuous

unrealized loss position at

June 30, 2025 and December 31, 2024.

At June 30, 2025

Less than 12 months

12 months or more

Total

Gross

Fair

unrealized

Fair

unrealized

Fair

unrealized

(In thousands)

value

losses

value

losses

value

losses

U.S. Treasury securities

8,477,646

11,934

2,097,347

36,698

10,574,993

48,632

Collateralized mortgage obligations - federal agencies

6,592

92,871

7,997

99,463

8,018

Mortgage-backed securities -federal agencies

50,680

2,594

4,863,122

1,001,988

4,913,802

1,004,582

Total debt securities

available-for-sale in an unrealized loss position

8,534,918

14,549

7,053,340

1,046,683

15,588,258

1,061,232

At December 31, 2024

Less than 12 months

12 months or more

Total

Gross

Fair

unrealized

Fair

unrealized

Fair

unrealized

(In thousands)

value

losses

value

losses

value

losses

U.S. Treasury securities

2,309,894

24,646

3,638,092

85,010

5,947,986

109,656

Collateralized mortgage obligations - federal agencies

4,878

102,160

9,861

107,038

9,888

Mortgage-backed securities - federal agencies

70,777

3,175

5,031,414

1,151,265

5,102,191

1,154,440

Total debt securities

available-for-sale in an unrealized loss position

2,385,549

27,848

8,771,666

1,246,136

11,157,215

1,273,984

As of June 30,

2025, the portfolio of

available-for-sale debt securities reflects gross unrealized losses

of $

1.1

billion (December 31,

2024 -

1.3

billion), driven mainly

by mortgage-backed securities,

which have

been impacted by

the-interest rate environment

and

the

portfolio’s

longer

duration.

The

portfolio

available-for-sale

debt

securities

comprised

mainly

U.S

Treasuries

and

obligations

from

the

U.S.

Government,

its

agencies

government

sponsored

entities,

including

Federal

National

Mortgage

Association

(“FNMA”),

Federal

Home

Loan

Mortgage

Corporation

(“FHLMC”)

and

Government

National

Mortgage

Association

(“GNMA”).

These

securities

carry

explicit

implicit

guarantee

from

the

U.S.

Government,

are

highly

rated

major

rating

agencies, and have a long history of no credit

losses. Accordingly, the Corporation applies a zero-credit loss assumption.

Note 6 –Debt securities held-to-maturity

The following

tables present

the amortized

cost, allowance

for credit

losses, gross

unrealized gains

and losses,

approximate fair

value,

weighted average

yield

and contractual

maturities of

debt securities

held-to-maturity at

June 30,

2025

and

December 31,

2024.

At June 30, 2025

Allowance

Carrying

Value

Gross

Weighted

Amortized

Book

[1]

for Credit

Net of

unrealized

Fair

average

(In thousands)

cost

Value

Losses

Allowance

gains

losses

value

yield

U.S. Treasury securities

Within 1 year

1,504,543

1,481,291

2,667

1,478,624

1.86

After 1 to 5 years

6,362,489

5,998,366

22,074

6,020,440

1.22

Total U.S. Treasury

securities

7,867,032

7,479,657

22,074

2,667

7,499,064

1.34

Obligations of Puerto Rico, States and

political subdivisions

Within 1 year

2,540

2,533

2,539

6.41

After 1 to 5 years

14,777

14,717

14,650

3.40

After 5 to 10 years

655

634

655

5.81

After 10 years

36,625

5,911

30,714

2,740

2,117

31,337

1.42

Total obligations of

Puerto Rico, States and

political subdivisions

54,597

5,999

48,598

2,798

2,215

49,181

2.24

Collateralized mortgage obligations - federal

agencies

After 10 years

1,510

198

1,312

2.87

Total collateralized

mortgage obligations -

federal agencies

1,510

198

1,312

2.87

Securities in wholly owned statutory business

trusts

After 5 to 10 years

5,960

6.33

Total securities

in wholly owned statutory

business trusts

5,960

6.33

Total debt securities

held-to-maturity [2]

7,929,099

7,541,724

5,999

7,535,725

24,872

5,080

7,555,517

1.35

[1]

Book value includes $

387

million of unrealized loss which remains in Accumulated

other comprehensive (loss) income (AOCI) related

to certain

securities previously transferred from available-for-sale securities

portfolio to the held-to-maturity securities portfolio.

[2]

Includes $

7.4

billion pledged to secure public and trust deposits that

the secured parties are not permitted to sell or repledge

the collateral.

The

Corporation had unpledged held-to-maturities securities with

a fair value of $

138.6

million that could be used to increase its borrowing

facilities.

At December 31, 2024

Allowance

Carrying

Value

Gross

Weighted

Amortized

Book

[1]

for Credit

Net of

unrealized

Fair

average

(In thousands)

cost

Value

Losses

Allowance

gains

losses

value

yield

U.S. Treasury securities

Within 1 year

599,910

4,498

595,412

2.76

After 1 to 5 years

7,572,435

7,093,508

65,096

7,028,412

1.28

Total U.S. Treasury

securities

8,172,345

7,693,418

69,594

7,623,824

1.39

Obligations of Puerto Rico, States and

political subdivisions

Within 1 year

2,440

2,435

2,438

6.39

After 1 to 5 years

16,454

16,374

16,341

3.69

After 5 to 10 years

655

633

653

5.81

After 10 years

37,633

5,210

32,423

2,318

2,596

32,145

1.42

Total obligations of

Puerto Rico, States and

political subdivisions

57,182

5,317

51,865

2,388

2,676

51,577

2.34

Collateralized mortgage obligations - federal

agencies

After 10 years

1,518

214

1,304

2.87

Total collateralized

mortgage obligations -

federal agencies

1,518

214

1,304

2.87

Securities in wholly owned statutory business

trusts

After 5 to 10 years

5,959

6.33

Total securities

in wholly owned statutory

business trusts

5,959

6.33

Total debt securities

held-to-maturity [2]

8,237,004

7,758,077

5,317

7,752,760

2,388

72,484

7,682,664

1.40

[1]

Book value includes $

479

million of unrealized loss which remains in Accumulated

other comprehensive (loss) income (AOCI) related

to certain

securities transferred from available-for-sale securities

portfolio to the held-to-maturity securities portfolio.

[2]

Includes $

7.6

billion pledged to secure public and trust deposits that

the secured parties are not permitted to sell or repledge

the collateral. The

Corporation had unpledged held-to-maturities securities with

a fair value of $

139.9

million that could be used to increase its borrowing

facilities.

Debt securities not due on a single contractual maturity date,

such as collateralized mortgage obligations, are classified in the period

of final

contractual maturity.

The expected

maturities of

collateralized mortgage

obligations and

certain other

securities may

differ

from their contractual maturities because they may be

subject to prepayments or may be called

by the issuer.

Credit Quality Indicators

The following describes the credit quality indicators by major security

type that the Corporation considers to develop the

estimate of

the allowance for credit losses for investment securities

held-to-maturity.

As discussed in

Note 2 of

the 2024 Form

10-K, U.S. Treasury

securities carry an explicit

guarantee from the U.S.

Government are

highly rated by major rating

agencies and have a long

history of no credit losses. Accordingly,

the Corporation applies a zero-credit

loss assumption and no allowance for credit losses

(“ACL”) for these securities has been established.

At June

30, 2025

and December 31,

2024, the “Obligations

of Puerto

Rico, States and

political subdivisions” classified

as held-to-

maturity,

includes

securities

issued

municipalities

Puerto

Rico

that

are

generally

not

rated

credit

rating

agency.

The

Corporation performs periodic credit quality

reviews of these securities and internally

assigns standardized credit risk ratings based

its

evaluation. For

the

definitions

the

obligor

risk

ratings, refer

the

Credit

Quality section

Note

the

Consolidated

Financial Statements.

This

includes

million

general and

special

obligation bonds

issued

by three

municipalities of

Puerto

Rico,

which

9.5

million

have

“Pass”

rating,

that

are

payable

primarily

from

certain

property

taxes

imposed

the

issuing

municipality (compared to $

million and $

11.1

million, respectively, at December 31, 2024).

At June 30, 2025, the portfolio of “Obligations of Puerto Rico, States

and political subdivisions” also includes $

million in securities

issued

the

Puerto

Rico

Housing Finance

Authority

(“HFA”),

government

instrumentality,

for

which the

underlying

source

payment

second

mortgage

loans

Puerto

Rico

residential

properties

(not

the

government),

but

for

which

HFA,

provides

guarantee in

the event

of default

and upon

the satisfaction

of certain

other conditions

(December 31,

2024 -

million). These

securities are not rated by a credit rating agency.

The

Corporation

assesses

the

credit

risk

associated

with

these

securities

evaluating

the

refreshed

FICO

scores

representative

sample

the

underlying

borrowers.

June

30,

2025,

the

average

refreshed

FICO

score

for

the

sample,

comprised

the

nominal

value

the

securities,

used

for

the

loss

estimate

was

676

(compared

and

674

respectively, at

December 31, 2024).

The loss estimates

for this portfolio

was based on

the methodology established

under CECL

for

similar

loan

obligations.

The

Corporation

does

not

consider

the

government

guarantee

when

estimating

the

credit

losses

associated with this portfolio.

deterioration of

the Puerto

Rico economy

the fiscal

health of

the

Government of

Puerto Rico

and/or

its

instrumentalities

(including if

any of

the issuing

municipalities become

subject to

a debt

restructuring proceeding

under the

Puerto Rico

Oversight

Management and Economic Stability Act (“PROMESA”) could

adversely affect the value of these securities, resulting in losses

to the

Corporation.

Refer to

Note 20

to the

Consolidated Financial

Statements

for additional

information on

the Corporation’s

exposure to

the Puerto

Rico Government.

Delinquency status

At June 30, 2025 and December 31, 2024, there were

securities held-to-maturity in past due or non-performing

status.

Allowance for credit losses on debt securities held-to-maturity

The allowance for credit losses related to

the Obligations of Puerto Rico and the States

and Political subdivisions securities at June

30, 2025 was $

6.0

million (December 31, 2024 - $

5.3

million).

Note 7 – Loans

For

a summary

the accounting

policies related

loans, interest

recognition and

allowance for

credit

losses

refer to

Note

–

Summary of Significant Accounting Policies of the 2024

Form 10-K.

The following

table presents

the Corporation's loan

purchases for

the quarters

and six

months ended June

30, 2025

and 2024

class of loans:

Quarters ended June 30,

Six months ended June 30,

(In thousands)

2025

2024

2025

2024

Commercial

67,726

159,258

74,886

215,422

Mortgage

125,690

84,849

246,597

170,653

Ending balance

193,416

244,107

321,483

386,075

The following table presents

the Corporation’s loan sales for the quarters and six months ended June 30, 2025 and 2024 by class of

loans:

Quarters ended June 30,

Six months ended June 30,

(In thousands)

2025

2024

2025

2024

Commercial

1,000

27,349

Construction

9,338

11,656

Mortgage

8,450

12,752

15,387

23,756

Ending balance

9,450

12,752

52,074

35,412

During the

quarter ended

June

30,

2025,

the

Corporation securitized

million

mortgage

loans

into

FNMA

mortgage-backed

securities, compared to $

million during the quarter ended June 30, 2024. The Corporation securitized $

million of mortgage loans

into GNMA

mortgage-backed securities

during the

quarter ended

June 30,

2025. There

were

GNMA securitizations

during the

quarter ended June 30, 2024.

During the six months

ended June 30, 2025,

the Corporation securitized $

million of mortgage loans into

FNMA mortgage-backed

securities, compared to

million during the

six months ended

June 30, 2024.

The Corporation securitized

million of mortgage

loans into

GNMA mortgage-backed

securities during

the six

months ended

June 30,

2025, compared

to $

million during

the six

months ended June 30, 2024.

Delinquency status

The following tables present the

amortized cost basis of loans

held-in-portfolio (“HIP”), net of unearned

income, by past due status,

and by loan class including those that are in non-performing status or that are accruing

interest but are past due 90 days or more at

June 30, 2025 and December 31, 2024.

June 30, 2025

BPPR

Past due

Past due 90 days or more

30-59

60-89

90 days

Total

Non-accrual

Accruing

(In thousands)

days

or more

past due

Current

Loans HIP

loans

Commercial multi-family

6,337

174

6,511

299,852

306,363

174

Commercial real estate:

Non-owner occupied

113

1,679

6,084

7,876

3,322,108

3,329,984

6,084

Owner occupied

1,087

2,098

27,320

30,505

1,171,601

1,202,106

27,320

Commercial and industrial

4,657

2,449

12,652

19,758

5,574,966

5,594,724

8,588

4,064

Construction

3,720

249,579

253,299

Mortgage

262,525

109,530

324,140

696,195

6,407,811

7,104,006

147,464

176,676

Leasing

23,109

5,629

7,976

36,714

1,946,354

1,983,068

7,976

Consumer:

Credit cards

14,184

9,360

25,201

48,745

1,166,545

1,215,290

25,201

Home equity lines of credit

1,809

Personal

19,022

11,917

17,499

48,438

1,743,772

1,792,210

17,499

Auto

102,643

22,404

40,595

165,642

3,696,060

3,861,702

40,595

Other

2,500

160

2,212

4,872

155,550

160,422

1,948

264

Total

439,897

165,226

463,853

1,068,976

25,736,007

26,804,983

257,648

206,205

June 30, 2025

Popular U.S.

Past due

Past due 90 days or more

30-59

60-89

90 days

Total

Non-accrual

Accruing

(In thousands)

days

or more

past due

Current

Loans HIP

loans

Commercial multi-family

4,675

10,751

15,426

2,199,000

2,214,426

10,751

Commercial real estate:

Non-owner occupied

1,503

7,893

9,396

2,181,994

2,191,390

7,893

Owner occupied

10,677

231

10,908

1,790,841

1,801,749

231

Commercial and industrial

9,235

5,195

3,025

17,455

2,431,573

2,449,028

2,836

189

Construction

1,214,902

Mortgage

677

3,329

28,052

32,058

1,308,363

1,340,421

28,052

Consumer:

Credit cards

Home equity lines of

credit

845

717

3,120

4,682

70,988

75,670

3,120

Personal

1,045

532

1,094

2,671

81,582

84,253

1,094

Other

694

695

7,658

8,353

Total

24,676

14,449

54,166

93,291

11,286,904

11,380,195

53,977

189

June 30, 2025

Popular, Inc.

Past due

Past due 90 days or more

30-59

60-89

90 days

Total

Non-accrual

Accruing

(In thousands)

days

or more

past due

Current

Loans HIP

[2] [3]

loans

Commercial multi-family

6,337

4,675

10,925

21,937

2,498,852

2,520,789

10,925

Commercial real estate:

Non-owner occupied

1,616

1,679

13,977

17,272

5,504,102

5,521,374

13,977

Owner occupied

11,764

2,098

27,551

41,413

2,962,442

3,003,855

27,551

Commercial and industrial

13,892

7,644

15,677

37,213

8,006,539

8,043,752

11,424

4,253

Construction

3,720

1,464,481

1,468,201

Mortgage

[1]

263,202

112,859

352,192

728,253

7,716,174

8,444,427

175,516

176,676

Leasing

23,109

5,629

7,976

36,714

1,946,354

1,983,068

7,976

Consumer:

Credit cards

14,184

9,360

25,201

48,745

1,166,548

1,215,293

25,201

Home equity lines of credit

845

717

3,120

4,682

72,797

77,479

3,120

Personal

20,067

12,449

18,593

51,109

1,825,354

1,876,463

18,593

Auto

102,643

22,404

40,595

165,642

3,696,060

3,861,702

40,595

Other

3,194

161

2,212

5,567

163,208

168,775

1,948

264

Total

464,573

179,675

518,019

1,162,267

37,022,911

38,185,178

311,625

206,394

[1]

At June 30, 2025, mortgage loans held-in-portfolio include

2.9

billion of loans that carry certain guarantees from

the FHA or the VA, for which

the

Corporation’s policy is to exclude them from non-performing

status, of which $

177

million are 90 days or more past due. The portfolio of

guaranteed loans includes $

million of residential mortgage loans in Puerto Rico that

are no longer accruing interest as of June 30, 2025. The

Corporation has $

million in reverse mortgage loans in Puerto Rico which

are guaranteed by FHA, but which are currently

not accruing interest

at June 30, 2025.

[2]

Loans held-in-portfolio are net of $

427

million in unearned income and exclude $

million in loans held-for-sale.

[3]

Includes $

21.4

billion pledged to secure credit facilities and public funds

that the secured parties are not permitted to sell or repledge

the collateral,

of which $

7.5

billion were pledged at the Federal Home Loan Bank

("FHLB") as collateral for borrowings and $

13.9

billion at the Federal Reserve

Bank ("FRB") for discount window borrowings. As of June

30, 2025, the Corporation had an available borrowing

facility with the FHLB and the

discount window of FRB of $

.0 billion and $

10.8

billion, respectively.

December 31, 2024

BPPR

Past due

Past due 90 days or more

30-59

60-89

90 days

Total

Non-accrual

Accruing

(In thousands)

days

or more

past due

Current

Loans HIP

loans

Commercial multi-family

1,491

113

1,683

306,318

308,001

Commercial real estate:

Non-owner occupied

3,103

586

6,429

10,118

3,236,385

3,246,503

6,429

Owner occupied

11,054

808

25,258

37,120

1,338,791

1,375,911

25,258

Commercial and industrial

5,738

2,712

23,895

32,345

5,314,549

5,346,894

19,335

4,560

Construction

1,039

211,251

212,290

Mortgage

262,222

116,694

365,759

744,675

6,065,206

6,809,881

158,442

207,317

Leasing

23,991

6,062

9,588

39,641

1,885,764

1,925,405

9,588

Consumer:

Credit cards

17,399

11,719

29,960

59,078

1,158,975

1,218,053

29,960

Home equity lines of credit

129

145

1,895

2,040

Personal

19,503

13,005

20,269

52,777

1,697,600

1,750,377

20,269

Auto

111,358

27,858

51,792

191,008

3,632,429

3,823,437

51,792

Other

1,816

277

1,312

3,405

156,824

160,229

899

413

Total

458,730

179,963

534,341

1,173,034

25,005,987

26,179,021

292,091

242,250

December 31, 2024

Popular U.S.

Past due

Past due 90 days or more

30-59

60-89

90 days

Total

Non-accrual

Accruing

(In thousands)

days

or more

past due

Current

Loans HIP

loans

Commercial multi-family

5,443

8,700

14,143

2,077,476

2,091,619

8,700

Commercial real estate:

Non-owner occupied

6,792

8,015

14,807

2,101,925

2,116,732

8,015

Owner occupied

5,191

1,776,644

1,781,835

5,191

Commercial and industrial

10,336

5,323

1,938

17,597

2,377,071

2,394,668

1,748

190

Construction

1,051,502

Mortgage

18,148

5,417

29,890

53,455

1,250,847

1,304,302

29,890

Consumer:

Credit cards

Home equity lines of credit

530

986

3,393

4,909

66,622

71,531

3,393

Personal

1,808

1,509

1,741

5,058

99,809

104,867

1,741

Other

514

525

11,024

11,549

Total

38,128

18,678

58,879

115,685

10,812,946

10,928,631

58,689

190

December 31, 2024

Popular, Inc.

Past due

Past due 90 days or more

30-59

60-89

90 days

Total

Non-accrual

Accruing

(In thousands)

days

or more

past due

Current

Loans HIP

[2]

[3]

loans

Commercial multi-family

1,491

5,556

8,779

15,826

2,383,794

2,399,620

8,779

Commercial real estate:

Non-owner occupied

9,895

586

14,444

24,925

5,338,310

5,363,235

14,444

Owner occupied

11,054

808

30,449

42,311

3,115,435

3,157,746

30,449

Commercial and industrial

16,074

8,035

25,833

49,942

7,691,620

7,741,562

21,083

4,750

Construction

1,039

1,262,753

1,263,792

Mortgage

[1]

280,370

122,111

395,649

798,130

7,316,053

8,114,183

188,332

207,317

Leasing

23,991

6,062

9,588

39,641

1,885,764

1,925,405

9,588

Consumer:

Credit cards

17,399

11,719

29,960

59,078

1,159,001

1,218,079

29,960

Home equity lines of credit

546

1,115

3,393

5,054

68,517

73,571

3,393

Personal

21,311

14,514

22,010

57,835

1,797,409

1,855,244

22,010

Auto

111,358

27,858

51,792

191,008

3,632,429

3,823,437

51,792

Other

2,330

277

1,323

3,930

167,848

171,778

910

413

Total

496,858

198,641

593,220

1,288,719

35,818,933

37,107,652

350,780

242,440

[1]

At December 31, 2024 mortgage loans held-in-portfolio include

2.6

billion of loans that carry certain guarantees from the FHA

or the VA, for

which the Corporation’s policy is to exclude them

from non-performing status, of which $

207

million are 90 days or more past due. The portfolio

guaranteed loans includes $

million of residential mortgage loans in Puerto Rico that

are no longer accruing interest as of December 31,

2024.

The Corporation has $

million in reverse mortgage loans in Puerto Rico which

are guaranteed by FHA, but which are currently not accruing

interest at December 31, 2024.

[2]

Loans held-in-portfolio are net of $

415

million in unearned income and exclude $

million in loans held-for-sale.

[3]

Includes $

16.8

billion pledged to secure credit facilities and public funds

that the secured parties are not permitted to sell or repledge

the collateral,

of which $

7.3

billion were pledged at the FHLB as collateral for borrowings

and $

9.5

billion at the FRB for discount window borrowings. As

December 31, 2024, the Corporation had an available borrowing

facility with the FHLB and the discount window

of FRB of $

3.8

billion and $

billion, respectively.

Recognition of interest income on mortgage loans is generally discontinued when loans are 90 days or more in arrears on payments

of principal or interest. The Corporation discontinues the recognition of interest income on residential mortgage loans insured by the

FHA or guaranteed by the VA when 15 months

delinquent as to principal or interest, since the principal repayment on these loans is

insured.

Loans with a

delinquency status of 90

days past due

as of June

30, 2025 include

million in loans

previously pooled into

GNMA

securities (December 31, 2024 - $

million). Under the GNMA program, issuers such as BPPR have

the option but not the obligation

to repurchase loans that

are 90 days or

more past due. For

accounting purposes, these loans subject to

the repurchase option are

required to be reflected on the financial statements of BPPR with an offsetting liability.

Loans in our serviced GNMA portfolio benefit

from payment forbearance programs but continue to reflect the

contractual delinquency until the borrower repays deferred payments

or completes a payment deferral modification or other

borrower assistance alternative.

The following tables present the amortized cost basis

of non-accrual loans as of June 30, 2025 and

December 31, 2024 by class of

loans:

June 30, 2025

BPPR

Popular U.S.

Popular, Inc.

(In thousands)

Non-accrual

with no

allowance

Non-accrual

with

allowance

Non-accrual

with no

allowance

Non-accrual

with

allowance

Non-accrual

with no

allowance

Non-accrual

with

allowance

Commercial multi-family

174

10,751

174

Commercial real estate non-owner occupied

3,168

2,916

7,016

877

10,184

3,793

Commercial real estate owner occupied

17,795

9,525

231

17,795

9,756

Commercial and industrial

8,588

2,836

11,424

Mortgage

63,464

84,000

905

27,147

64,369

111,147

Leasing

479

7,497

479

7,497

Consumer:

HELOCs

3,120

Personal

3,460

14,039

1,094

3,460

15,133

Auto

1,973

38,622

1,973

38,622

Other

1,948

Total

90,339

167,309

18,672

35,305

109,011

202,614

December 31, 2024

BPPR

Popular U.S.

Popular, Inc.

(In thousands)

Non-accrual

with no

allowance

Non-accrual

with

allowance

Non-accrual

with no

allowance

Non-accrual

with

allowance

Non-accrual

with no

allowance

Non-accrual

with

allowance

Commercial multi-family

8,700

Commercial real estate non-owner occupied

3,450

2,979

7,115

900

10,565

3,879

Commercial real estate owner occupied

17,767

7,491

4,957

234

22,724

7,725

Commercial and industrial

9,020

10,315

1,748

9,020

12,063

Mortgage

66,176

92,266

1,069

28,821

67,245

121,087

Leasing

500

9,088

500

9,088

Consumer:

HELOCs

3,393

Personal

2,960

17,309

1,741

2,960

19,050

Auto

1,992

49,800

1,992

49,800

Other

899

910

Total

101,865

190,226

21,841

36,848

123,706

227,074

The Corporation has

designated loans classified as

collateral dependent for

which the ACL

is measured based

on the fair

value of

the collateral less

cost to sell,

when foreclosure is

probable or when

the repayment is

expected to be

provided substantially by the

sale or

operation of

the collateral

and the

borrower is

experiencing financial

difficulty.

The fair

value of

the collateral

is based

appraisals,

which

may

adjusted

due

their

age,

type,

location,

and

condition

the

property

area

general

market

conditions to reflect the expected change in value between the effective date

of the appraisal and the measurement date. Appraisals

are updated every one to two years depending on

the type of loan and the total exposure of

the borrower.

Loans in

non-accrual status with

no allowance

at June

30, 2025 include

109

million in

collateral dependent loans

(December 31,

2024 -

124

million). The

Corporation recognized $

million in

interest income

on non-accrual

loans during

the six

months ended

June 30, 2025 (June 30, 2024 - $

million).

The following tables present the amortized cost basis

of collateral-dependent loans, for which the ACL was measured

based on the

fair value of the collateral less cost to sell, by

class of loans and type of collateral as of June

30, 2025 and December 31, 2024:

June 30, 2025

(In thousands)

Real Estate

Auto

Equipment

Accounts

Receivables

Other

Total

BPPR

Commercial multi-family

1,250

Commercial real estate:

Non-owner occupied

143,152

Owner occupied

24,596

Commercial and industrial

2,436

124

2,248

4,808

Mortgage

71,234

Leasing

1,393

Consumer:

Personal

3,572

Auto

16,545

Other

Total BPPR

246,240

17,950

124

2,248

266,562

Popular U.S.

Commercial multi-family

16,542

Commercial real estate:

Non-owner occupied

65,668

Commercial and industrial

Mortgage

1,408

Total Popular U.S.

83,618

83,631

Popular, Inc.

Commercial multi-family

17,792

Commercial real estate:

Non-owner occupied

208,820

Owner occupied

24,596

Commercial and industrial

2,436

124

2,248

4,821

Mortgage

72,642

Leasing

1,393

Consumer:

Personal

3,572

Auto

16,545

Other

Total Popular,

Inc.

329,858

17,950

124

2,248

350,193

December 31, 2024

(In thousands)

Real Estate

Auto

Equipment

Other

Total

BPPR

Commercial multi-family

1,278

Commercial real estate:

Non-owner occupied

145,974

Owner occupied

23,361

Commercial and industrial

2,754

11,593

14,347

Construction

576

Mortgage

77,910

Leasing

1,437

1,438

Consumer:

Personal

3,347

Auto

15,782

Other

Total BPPR

255,200

17,219

11,609

284,029

Popular U.S.

Commercial multi-family

14,517

Commercial real estate:

Non-owner occupied

7,116

Owner occupied

4,956

Commercial and industrial

1,154

1,172

Mortgage

1,430

Total Popular U.S.

28,019

1,154

29,191

Popular, Inc.

Commercial multi-family

15,795

Commercial real estate:

Non-owner occupied

153,090

Owner occupied

28,317

Commercial and industrial

2,754

12,747

15,519

Construction

576

Mortgage

79,340

Leasing

1,437

1,438

Consumer:

Personal

3,347

Auto

15,782

Other

Total Popular,

Inc.

283,219

17,219

12,763

313,220

Note 8 – Allowance for credit losses – loans

held-in-portfolio

The

Corporation follows

the current

expected credit

loss

(“CECL”) model

establish and

evaluate the

adequacy of

the ACL

provide for

expected losses

in the

loan portfolio.

This model

establishes a forward-looking

methodology that

reflects the

expected

credit losses over the lives

of financial assets starting when such

assets are first acquired or originated.

In addition, CECL provides

that

the

initial ACL

on PCD

financial

assets be

recorded as

increase to

the

purchase price,

with subsequent

changes to

the

allowance

recorded

credit

loss

expense.

The

provision

for

credit

losses

recorded

current

operations

based

this

methodology.

Loan losses

are charged

and

recoveries are

credited to

the ACL.

The

Corporation’s modeling

framework includes

competing risk

models that

generate lifetime

default and

prepayment estimates as

well as

other loan

level techniques

to estimate

loss

severity.

These

models

combine

credit

risk

factors

which

include

the

impact

loan

modifications,

with

macroeconomic

expectations to derive the lifetime expected loss.

At June

30, 2025,

the Corporation

estimated the

ACL by

weighting the

outputs of

optimistic, baseline,

and pessimistic

scenarios.

The

weightings applied

are subject

evaluation on

quarterly basis

part

the ACL’s

governance process.

During the

first

quarter

2025,

the

Corporation

assigned

equal

probability

weights

the

baseline

and

pessimistic

scenarios

response

economic uncertainty,

the optimistic scenario

being the lowest

of probabilities. During

the second

quarter of 2025,

the Corporation

moderately

reduced

the

probability

weight

for

the

pessimistic

scenario

based

changes

the

economic

outlook

and

reassessment of uncertainty compared to the previous quarter. The net impact of these two changes in the

assigned weights on the

ACL

levels

for

the

six

months

ended

June

30,

2025

was

13.7

million

additional

reserves.

The

probability

weight

for

the

pessimistic scenario remains above the levels observed

in 2024, given the ongoing economic uncertainty.

The following tables

present the changes

in the ACL

of loans

held-in-portfolio and unfunded

commitments for the

quarters and six

months ended June 30, 2025 and 2024.

For the quarter ended June 30, 2025

BPPR

Provision for

Beginning

credit losses

Ending

(In thousands)

Balance

(benefit)

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

3,420

270

3,696

Commercial real estate non-owner occupied

42,848

(160)

(21)

472

43,139

Commercial real estate owner occupied

36,019

(1,176)

(14)

1,019

35,848

Commercial and industrial

131,407

(6,769)

(2,466)

1,030

123,202

Total Commercial

213,694

(7,835)

(2,501)

2,527

205,885

Construction

2,719

356

3,075

Mortgage

74,289

(1,752)

(550)

2,979

74,966

Leasing

20,206

2,570

(3,982)

1,246

20,040

Consumer

Credit cards

96,523

13,094

(20,011)

2,700

92,306

Home equity lines of credit

(313)

307

Personal

89,786

18,881

(19,553)

3,777

92,891

Auto

171,979

16,852

(13,418)

6,861

182,274

Other

7,007

1,297

(700)

154

7,758

Total Consumer

365,355

49,811

(53,682)

13,799

375,283

Total - Loans

676,263

43,150

(60,715)

20,551

679,249

Allowance for credit losses - unfunded commitments:

Commercial

7,445

(1,569)

5,876

Construction

1,560

309

1,869

Ending balance - unfunded commitments [1]

9,005

(1,260)

7,745

[1] Allowance for credit losses of unfunded commitments

is presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the quarter ended June 30, 2025

Popular U.S.

Provision for

Beginning

credit losses

Ending

(In thousands)

Balance

(benefit)

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

10,081

3,567

(563)

13,085

Commercial real estate non-owner occupied

15,453

525

15,978

Commercial real estate owner occupied

14,193

(1,016)

(14)

13,203

Commercial and industrial

16,422

1,533

(49)

254

18,160

Total Commercial

56,149

4,609

(626)

294

60,426

Construction

6,793

711

7,504

Mortgage

9,740

437

10,209

Consumer

Home equity lines of credit

1,550

(799)

(16)

595

1,330

Personal

11,651

1,417

(2,920)

615

10,763

Other

(13)

Total Consumer

13,203

632

(2,949)

1,211

12,097

Total - Loans

85,885

6,389

(3,575)

1,537

90,236

Allowance for credit losses - unfunded commitments:

Commercial

1,630

305

1,935

Construction

3,492

(203)

3,289

Consumer

Ending balance - unfunded commitments [1]

5,164

144

5,308

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the quarter ended June 30, 2025

Popular Inc.

Provision for

Beginning

credit losses

Ending

(In thousands)

Balance

(benefit)

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

13,501

3,837

(563)

16,781

Commercial real estate non-owner occupied

58,301

365

(21)

472

59,117

Commercial real estate owner occupied

50,212

(2,192)

(28)

1,059

49,051

Commercial and industrial

147,829

(5,236)

(2,515)

1,284

141,362

Total Commercial

269,843

(3,226)

(3,127)

2,821

266,311

Construction

9,512

1,067

10,579

Mortgage

84,029

(1,315)

(550)

3,011

85,175

Leasing

20,206

2,570

(3,982)

1,246

20,040

Consumer

Credit cards

96,523

13,094

(20,011)

2,700

92,306

Home equity lines of credit

1,610

(1,112)

(16)

902

1,384

Personal

101,437

20,298

(22,473)

4,392

103,654

Auto

171,979

16,852

(13,418)

6,861

182,274

Other

7,009

1,311

(713)

155

7,762

Total Consumer

378,558

50,443

(56,631)

15,010

387,380

Total - Loans

762,148

49,539

(64,290)

22,088

769,485

Allowance for credit losses - unfunded commitments:

Commercial

9,075

(1,264)

7,811

Construction

5,052

106

5,158

Consumer

Ending balance - unfunded commitments [1]

14,169

(1,116)

13,053

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the six months ended June 30, 2025

BPPR

Provision for

Allowance for

Beginning

credit losses

credit losses -

Ending

(In thousands)

Balance

(benefit)

PCD Loans

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

2,783

905

3,696

Commercial real estate non-owner occupied

44,852

(2,759)

(86)

1,132

43,139

Commercial real estate owner occupied

37,355

(2,918)

(103)

1,514

35,848

Commercial and industrial

130,136

(7,026)

(5,778)

5,870

123,202

Total Commercial

215,126

(11,798)

(5,967)

8,524

205,885

Construction

2,743

332

3,075

Mortgage

72,901

(2,870)

(985)

5,911

74,966

Leasing

16,419

9,629

(8,526)

2,518

20,040

Consumer

Credit cards

99,130

26,916

(38,876)

5,136

92,306

Home equity lines of credit

(421)

(25)

446

Personal

91,296

35,709

(41,506)

7,392

92,891

Auto

165,995

36,323

(34,474)

14,430

182,274

Other

7,002

2,020

(1,580)

316

7,758

Total Consumer

363,477

100,547

(116,461)

27,720

375,283

Total - Loans

670,666

95,840

(131,939)

44,673

679,249

Allowance for credit losses - unfunded commitments:

Commercial

6,725

(849)

5,876

Construction

1,663

206

1,869

Ending balance - unfunded commitments [1]

8,388

(643)

7,745

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the six months ended June 30, 2025

Popular U.S.

Provision for

Beginning

credit losses

Ending

(In thousands)

Balance

(benefit)

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

6,453

7,194

(563)

13,085

Commercial real estate non-owner occupied

9,642

6,336

15,978

Commercial real estate owner occupied

12,473

193

(26)

563

13,203

Commercial and industrial

15,870

3,010

(1,196)

476

18,160

Total Commercial

44,438

16,733

(1,785)

1,040

60,426

Construction

8,521

(1,017)

7,504

Mortgage

9,508

484

217

10,209

Consumer

Home equity lines of credit

1,449

(935)

(46)

862

1,330

Personal

11,440

3,617

(5,546)

1,252

10,763

Other

(42)

Total Consumer

12,891

2,717

(5,634)

2,123

12,097

Total - Loans

75,358

18,917

(7,419)

3,380

90,236

Allowance for credit losses - unfunded commitments:

Commercial

1,662

273

1,935

Construction

5,409

(2,120)

3,289

Consumer

Ending balance - unfunded commitments [1]

7,082

(1,774)

5,308

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the six months ended June 30, 2025

Popular Inc.

Provision for

Allowance for

Beginning

credit losses

credit losses -

Ending

(In thousands)

Balance

(benefit)

PCD Loans

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

9,236

8,099

(563)

16,781

Commercial real estate non-owner occupied

54,494

3,577

(86)

1,132

59,117

Commercial real estate owner occupied

49,828

(2,725)

(129)

2,077

49,051

Commercial and industrial

146,006

(4,016)

(6,974)

6,346

141,362

Total Commercial

259,564

4,935

(7,752)

9,564

266,311

Construction

11,264

(685)

10,579

Mortgage

82,409

(2,386)

(985)

6,128

85,175

Leasing

16,419

9,629

(8,526)

2,518

20,040

Consumer

Credit cards

99,130

26,916

(38,876)

5,136

92,306

Home equity lines of credit

1,503

(1,356)

(71)

1,308

1,384

Personal

102,736

39,326

(47,052)

8,644

103,654

Auto

165,995

36,323

(34,474)

14,430

182,274

Other

7,004

2,055

(1,622)

325

7,762

Total Consumer

376,368

103,264

(122,095)

29,843

387,380

Total - Loans

746,024

114,757

(139,358)

48,053

769,485

Allowance for credit losses - unfunded commitments:

Commercial

8,387

(576)

7,811

Construction

7,072

(1,914)

5,158

Consumer

Ending balance - unfunded commitments [1]

15,470

(2,417)

13,053

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the quarter ended June 30, 2024

BPPR

Provision for

Allowance for

Beginning

credit losses

credit losses -

Ending

(In thousands)

Balance

(benefit)

PCD Loans

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

3,567

(264)

3,303

Commercial real estate non-owner occupied

53,666

(324)

53,386

Commercial real estate owner occupied

43,537

(5,296)

1,134

39,375

Commercial and industrial

102,844

14,440

(8,072)

2,051

111,263

Total Commercial

203,614

8,556

(8,072)

3,229

207,327

Construction

3,114

524

3,638

Mortgage

76,564

(6,419)

(26)

3,775

73,900

Leasing

8,991

8,094

(3,841)

1,141

14,385

Consumer

Credit cards

88,169

11,856

(16,419)

2,707

86,313

Home equity lines of credit

102

(94)

Personal

99,504

15,492

(23,293)

2,318

94,021

Auto

157,456

10,250

(16,609)

6,352

157,449

Other

6,808

210

(680)

151

6,489

Total Consumer

352,039

37,830

(57,095)

11,581

344,355

Total - Loans

644,322

48,585

(69,034)

19,726

643,605

Allowance for credit losses - unfunded commitments:

Commercial

4,942

598

5,540

Construction

1,441

654

2,095

Ending balance - unfunded commitments [1]

6,383

1,252

7,635

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the quarter ended June 30, 2024

Popular U.S.

Provision for

Beginning

credit losses

Ending

(In thousands)

Balance

(benefit)

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

9,176

(1,303)

7,877

Commercial real estate non-owner occupied

11,958

(1,151)

10,849

Commercial real estate owner occupied

20,270

(1,514)

18,815

Commercial and industrial

17,574

(1,367)

(1,195)

207

15,219

Total Commercial

58,978

(5,335)

(1,195)

312

52,760

Construction

8,025

1,126

100

9,251

Mortgage

9,874

(502)

(18)

9,389

Consumer

Home equity lines of credit

1,770

(510)

(14)

397

1,643

Personal

16,573

795

(4,596)

655

13,427

Other

(2)

(18)

Total Consumer

18,345

283

(4,628)

1,072

15,072

Total - Loans

95,222

(4,428)

(5,841)

1,519

86,472

Allowance for credit losses - unfunded commitments:

Commercial

2,542

308

2,850

Construction

7,837

562

8,399

Consumer

(5)

Ending balance - unfunded commitments [1]

10,384

865

11,249

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the quarter ended June 30, 2024

Popular Inc.

Provision for

Allowance for

Beginning

credit losses

credit losses -

Ending

(In thousands)

Balance

(benefit)

PCD Loans

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

12,743

(1,567)

11,180

Commercial real estate non-owner occupied

65,624

(1,475)

64,235

Commercial real estate owner occupied

63,807

(6,810)

1,193

58,190

Commercial and industrial

120,418

13,073

(9,267)

2,258

126,482

Total Commercial

262,592

3,221

(9,267)

3,541

260,087

Construction

11,139

1,650

100

12,889

Mortgage

86,438

(6,921)

(44)

3,810

83,289

Leasing

8,991

8,094

(3,841)

1,141

14,385

Consumer

Credit cards

88,169

11,856

(16,419)

2,707

86,313

Home equity lines of credit

1,872

(488)

(108)

450

1,726

Personal

116,077

16,287

(27,889)

2,973

107,448

Auto

157,456

10,250

(16,609)

6,352

157,449

Other

6,810

208

(698)

171

6,491

Total Consumer

370,384

38,113

(61,723)

12,653

359,427

Total - Loans

739,544

44,157

(74,875)

21,245

730,077

Allowance for credit losses - unfunded commitments:

Commercial

7,484

906

8,390

Construction

9,278

1,216

10,494

Consumer

(5)

Ending balance - unfunded commitments [1]

16,767

2,117

18,884

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the six months ended June 30, 2024

BPPR

Provision for

Allowance for

Beginning

credit losses

credit losses -

Ending

(In thousands)

Balance

(benefit)

PCD Loans

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

3,614

(312)

3,303

Commercial real estate non-owner occupied

53,754

(737)

369

53,386

Commercial real estate owner occupied

40,637

(149)

(2,785)

1,672

39,375

Commercial and industrial

107,577

14,816

(14,741)

3,611

111,263

Total Commercial

205,582

13,618

(17,526)

5,653

207,327

Construction

5,294

(1,656)

3,638

Mortgage

72,440

(6,738)

(791)

8,966

73,900

Leasing

9,708

11,062

(8,691)

2,306

14,385

Consumer

Credit cards

80,487

33,496

(32,815)

5,145

86,313

Home equity lines of credit

103

125

(291)

146

Personal

101,181

35,755

(47,642)

4,727

94,021

Auto

157,931

23,621

(36,776)

12,673

157,449

Other

7,132

310

(1,344)

391

6,489

Total Consumer

346,834

93,307

(118,868)

23,082

344,355

Total - Loans

639,858

109,593

(145,876)

40,007

643,605

Allowance for credit losses - unfunded commitments:

Commercial

5,062

478

5,540

Construction

1,618

477

2,095

Ending balance - unfunded commitments [1]

6,680

955

7,635

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the six months ended June 30, 2024

Popular U.S.

Provision for

Beginning

credit losses

Ending

(In thousands)

Balance

(benefit)

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

10,126

(1,813)

(441)

7,877

Commercial real estate non-owner occupied

11,699

(956)

106

10,849

Commercial real estate owner occupied

16,227

2,505

18,815

Commercial and industrial

14,779

1,836

(1,759)

363

15,219

Total Commercial

52,831

1,572

(2,200)

557

52,760

Construction

7,392

1,759

100

9,251

Mortgage

10,774

(1,427)

(18)

9,389

Consumer

Home equity lines of credit

1,875

(763)

(21)

552

1,643

Personal

16,609

5,786

(10,308)

1,340

13,427

Other

(49)

Total Consumer

18,486

5,046

(10,378)

1,918

15,072

Total - Loans

89,483

6,950

(12,596)

2,635

86,472

Allowance for credit losses - unfunded commitments:

Commercial

1,851

999

2,850

Construction

8,446

(47)

8,399

Consumer

(29)

Ending balance - unfunded commitments [1]

10,326

923

11,249

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial Condition.

For the six months ended June 30, 2024

Popular Inc.

Provision for

Allowance for

Beginning

credit losses

credit losses -

Ending

(In thousands)

Balance

(benefit)

PCD Loans

Charge-offs

Recoveries

Balance

Allowance for credit losses - loans:

Commercial

Commercial multi-family

13,740

(2,125)

(441)

11,180

Commercial real estate non-owner occupied

65,453

(1,693)

475

64,235

Commercial real estate owner occupied

56,864

2,356

(2,785)

1,755

58,190

Commercial and industrial

122,356

16,652

(16,500)

3,974

126,482

Total Commercial

258,413

15,190

(19,726)

6,210

260,087

Construction

12,686

103

100

12,889

Mortgage

83,214

(8,165)

(809)

9,026

83,289

Leasing

9,708

11,062

(8,691)

2,306

14,385

Consumer

Credit cards

80,487

33,496

(32,815)

5,145

86,313

Home equity lines of credit

1,978

(638)

(312)

698

1,726

Personal

117,790

41,541

(57,950)

6,067

107,448

Auto

157,931

23,621

(36,776)

12,673

157,449

Other

7,134

333

(1,393)

417

6,491

Total Consumer

365,320

98,353

(129,246)

25,000

359,427

Total - Loans

729,341

116,543

(158,472)

42,642

730,077

Allowance for credit losses - unfunded commitments:

Commercial

6,913

1,477

8,390

Construction

10,064

430

10,494

Consumer

(29)

Ending balance - unfunded commitments [1]

17,006

1,878

18,884

[1]

Allowance for credit losses of unfunded commitments is

presented as part of Other Liabilities in the Consolidated

Statements of Financial

Condition.

Modifications

modification

constitutes

change

loan

terms

the

form

principal

forgiveness,

interest

rate

reduction,

other

than-

insignificant payment delay, term extension or combination of the above made

to a borrower experiencing financial difficulty.

The amount of outstanding commitments to lend additional funds to debtors with financial difficulties owing receivables whose terms

have been

modified during

the six

months ended

June 30,

2025 amounted

to $

158

million (During

the year

ended December

31,

2024 - $

million), related to the commercial loan portfolios.

The following tables show the amortized cost basis of the loans modified to borrowers experiencing financial difficulties at the end of

the reporting period disaggregated by

class of financing receivable and

type of concession granted

for the quarters and

six months

ended June 30, 2025 and 2024. Loans modified

to borrowers experiencing financial difficulties that were fully paid down,

charged-off

or foreclosed upon by period end are not reported.

Loan Modifications Made to Borrowers Experiencing Financial

Difficulty for the quarter ended June 30, 2025

Interest Rate Reduction

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June

30, 2025

% of total class

of Financing

Receivable

Amortized Cost

Basis at June

30, 2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June

30, 2025

% of total class of

Financing

Receivable

Commercial and industrial

837

0.01

837

0.01

Mortgage

Consumer:

Credit cards

395

0.03

395

0.03

Personal

1,159

0.06

1,159

0.06

Total

2,460

0.01

2,460

0.01

Term Extension

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June

30, 2025

% of total class

of Financing

Receivable

Amortized Cost

Basis at June

30, 2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June

30, 2025

% of total class of

Financing

Receivable

CRE non-owner occupied

108

58,652

2.68

58,760

1.06

CRE owner occupied

5,308

0.44

5,308

0.18

Commercial and industrial

5,693

0.10

5,693

0.07

Mortgage

12,983

0.18

665

0.05

13,648

0.16

Consumer:

Personal

260

0.01

0.02

281

0.01

Auto

Total

24,401

0.09

59,338

0.52

83,739

0.22

Other-Than-Insignificant Payment Delays

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June

30, 2025

% of total class

of Financing

Receivable

Amortized Cost

Basis at June

30, 2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June

30, 2025

% of total class of

Financing

Receivable

CRE non-owner occupied

4,436

0.13

4,436

0.08

CRE owner occupied

8,827

0.73

8,827

0.29

Commercial and industrial

166,870

2.98

166,870

2.07

Mortgage

420

0.01

420

Total

180,553

0.67

180,553

0.47

Combination - Term Extension

and Interest Rate Reduction

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June

30, 2025

% of total class

of Financing

Receivable

Amortized Cost

Basis at June

30, 2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June

30, 2025

% of total class of

Financing

Receivable

Commercial and industrial

100

Mortgage

3,936

0.06

3,936

0.05

Consumer:

Personal

3,429

0.19

0.09

3,502

0.19

Auto

Total

7,481

0.03

7,554

0.02

Combination -

Other-Than-Insignificant Payment Delays and Interest Rate

Reduction

Puerto Rico

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June

30, 2025

% of total class

of Financing

Receivable

Amortized Cost

Basis at June

30, 2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June

30, 2025

% of total class of

Financing

Receivable

Commercial and industrial

310

0.01

310

Consumer:

Credit cards

2,293

0.19

2,293

0.19

Total

2,603

0.01

2,603

0.01

Loan Modifications Made to Borrowers Experiencing Financial

Difficulty for the six months ended June 30,

2025

Interest Rate Reduction

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Commercial and industrial

2,048

0.04

2,048

0.03

Mortgage

Consumer:

Credit cards

542

0.04

542

0.04

Personal

2,280

0.13

2,280

0.12

Other

Total

4,944

0.02

4,944

0.01

Term Extension

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

CRE non-owner occupied

108

58,652

2.68

58,760

1.06

CRE owner occupied

5,308

0.44

5,308

0.18

Commercial and industrial

11,271

0.20

11,271

0.14

Mortgage

22,922

0.32

665

0.05

23,587

0.28

Consumer:

Personal

495

0.03

0.02

516

0.03

Auto

Total

40,191

0.15

59,338

0.52

99,529

0.26

Other-Than-Insignificant Payment Delays

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

CRE non-owner occupied

4,436

0.13

4,436

0.08

CRE owner occupied

20,980

1.75

20,980

0.70

Commercial and industrial

177,506

3.17

177,506

2.21

Mortgage

420

0.01

420

Total

203,342

0.76

203,342

0.53

Combination - Term Extension

and Interest Rate Reduction

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Commercial and industrial

100

Mortgage

7,061

0.10

7,061

0.08

Consumer:

Personal

6,534

0.36

114

0.14

6,648

0.35

Auto

Total

13,711

0.05

114

13,825

0.04

Combination - Other-Than-Insignificant Payment Delays

and Interest Rate Reduction

Puerto Rico

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2025

% of total class of

Financing

Receivable

Commercial and industrial

861

0.02

861

0.01

Consumer:

Credit cards

4,867

0.40

4,867

0.40

Total

5,728

0.02

5,728

0.02

Loan Modifications Made to Borrowers Experiencing Financial

Difficulty for the quarter ended June 30, 2024

Interest Rate Reduction

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2024

% of total class

of Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

CRE owner occupied

Commercial and industrial

1,747

0.03

1,747

0.02

Mortgage

Consumer:

Credit cards

422

0.04

422

0.04

Personal

848

0.05

848

0.05

Other

0.02

Total

3,117

0.01

3,117

0.01

Term Extension

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2024

% of total class

of Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

CRE non-owner occupied

3,084

0.10

3,084

0.06

CRE owner occupied

1,134

0.08

6,071

0.35

7,205

0.23

Commercial and industrial

23,059

0.46

23,059

0.32

Mortgage

16,933

0.26

642

0.05

17,575

0.22

Consumer:

Personal

238

0.01

136

0.10

374

0.02

Auto

Total

44,504

0.18

6,849

0.07

51,353

0.14

Other-Than-Insignificant Payment Delays

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2024

% of total class

of Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

CRE non-owner occupied

57,071

1.92

57,071

1.14

CRE owner occupied

6,230

0.44

6,230

0.20

Commercial and industrial

52,124

1.04

52,124

0.72

Mortgage

127

Total

115,552

0.46

115,552

0.32

Combination - Term Extension

and Interest Rate Reduction

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2024

% of total class

of Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Commercial and industrial

490

0.01

490

0.01

Mortgage

5,246

0.08

5,277

0.07

Consumer:

Personal

2,190

0.13

2,190

0.12

Total

7,926

0.03

7,957

0.02

Combination -

Other-Than-Insignificant Payment Delays and Interest Rate

Reduction

Puerto Rico

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2024

% of total class

of Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Commercial and industrial

Consumer:

Credit cards

243

0.02

243

0.02

Total

332

Loan Modifications Made to Borrowers Experiencing Financial

Difficulty for the six months ended June 30,

2024

Interest Rate Reduction

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

CRE owner occupied

Commercial and industrial

2,122

0.04

2,122

0.03

Mortgage

Consumer:

Credit cards

549

0.05

549

0.05

Personal

1,085

0.06

1,085

0.06

Other

0.02

Total

3,856

0.02

3,856

0.01

Term Extension

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

CRE non-owner occupied

39,484

1.33

39,484

0.79

CRE owner occupied

11,718

0.83

6,071

0.35

17,789

0.57

Commercial and industrial

23,767

0.48

23,767

0.33

Mortgage

29,868

0.45

642

0.05

30,510

0.39

Consumer:

Personal

436

0.02

141

0.10

577

0.03

Auto

Total

105,329

0.42

6,854

0.07

112,183

0.32

Other-Than-Insignificant Payment Delays

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

CRE non-owner occupied

57,071

1.92

57,071

1.14

CRE owner occupied

16,207

1.14

16,207

0.52

Commercial and industrial

56,477

1.13

56,477

0.78

Mortgage

127

Total

129,882

0.52

129,882

0.36

Combination - Term Extension

and Interest Rate Reduction

BPPR

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

CRE non-owner occupied

890

0.03

890

0.02

Commercial and industrial

586

0.01

586

0.01

Mortgage

8,655

0.13

0.01

8,723

0.11

Consumer:

Personal

3,234

0.19

144

0.11

3,378

0.18

Total

13,365

0.05

212

13,577

0.04

Combination - Other-Than-Insignificant Payment Delays

and Interest Rate Reduction

Puerto Rico

Popular U.S.

Popular, Inc.

(Dollars in thousands)

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Amortized Cost

Basis at June 30,

2024

% of total class of

Financing

Receivable

Commercial and industrial

Consumer:

Credit cards

539

0.05

539

0.05

Total

628

The following tables describe the financial effect of the

modifications made to borrowers experiencing

financial difficulties:

For the quarter ended June 30, 2025

Interest rate reduction

Loan Type

Financial Effect

Commercial and industrial

Reduced weighted-average contractual interest rate from

22.7

% to

9.9

Mortgage

Reduced weighted-average contractual interest rate from

.0% to

5.4

Consumer:

Credit cards

Reduced weighted-average contractual interest rate from

20.8

% to

7.9

Personal

Reduced weighted-average contractual interest rate from

20.9

% to

11.1

Auto

Reduced weighted-average contractual interest rate from

18.3

0% to

18.29

Term extension

Loan Type

Financial Effect

CRE Non-owner occupied

Added a weighted-average of

years to the life of loans.

CRE Owner occupied

Added a weighted-average of

months to the life of loans.

Commercial and industrial

Added a weighted-average of

months to the life of loans.

Mortgage

Added a weighted-average of

years to the life of loans.

Consumer:

Personal

Added a weighted-average of

years to the life of loans.

Auto

Added a weighted-average of

months to the life of loans.

Other than insignificant payment delays

Loan Type

Financial Effect

CRE Non-owner occupied

Added a weighted-average of

months to the life of loans.

CRE Owner occupied

Added a weighted-average of

months to the life of loans.

Commercial and industrial

Added a weighted-average of

months to the life of loans.

Mortgage

Added a weighted-average of

months to the life of loans.

Consumer:

Credit cards

Added a weighted-average of

months to the life of loans.

For the six months ended June 30, 2025

Interest rate reduction

Loan Type

Financial Effect

Commercial and industrial

Reduced weighted-average contractual interest rate from

24.3

% to

9.7

Mortgage

Reduced weighted-average contractual interest rate from

6.8

% to

5.5

Consumer:

Credit cards

Reduced weighted-average contractual interest rate from

.0% to

8.2

Personal

Reduced weighted-average contractual interest rate from

21.3

% to

11.5

Auto

Reduced weighted-average contractual interest rate from

18.3

0% to

18.29

Other

Reduced weighted-average contractual interest rate from

.0% to

.0%.

Term extension

Loan Type

Financial Effect

CRE Non-owner occupied

Added a weighted-average of

years to the life of loans.

CRE Owner occupied

Added a weighted-average of

months to the life of loans.

Commercial and industrial

Added a weighted-average of

months to the life of loans.

Mortgage

Added a weighted-average of

years to the life of loans.

Consumer:

Personal

Added a weighted-average of

years to the life of loans.

Auto

Added a weighted-average of

years to the life of loans.

Other than insignificant payment delay

Loan Type

Financial Effect

CRE Non-owner occupied

Added a weighted-average of

months to the life of loans.

CRE Owner occupied

Added a weighted-average of

months to the life of loans.

Commercial and industrial

Added a weighted-average of

months to the life of loans.

Mortgage

Added a weighted-average of

months to the life of loans.

Consumer:

Credit cards

Added a weighted-average of

months to the life of loans.

For the quarter ended June 30, 2024

Interest rate reduction

Loan Type

Financial Effect

CRE Owner occupied

Reduced weighted-average contractual interest rate from

.0% to

.0%.

Commercial and industrial

Reduced weighted-average contractual interest rate from

.0% to

9.3

Mortgage

Reduced weighted-average contractual interest rate from

6.4

% to

4.4

Consumer:

Credit cards

Reduced weighted-average contractual interest rate from

19.7

% to

4.2

Personal

Reduced weighted-average contractual interest rate from

19.2

% to

10.1

Other

Reduced weighted-average contractual interest rate from

.0% to

.0%.

Term extension

Loan Type

Financial Effect

CRE Non-owner occupied

Added a weighted-average of

months to the life of loans.

CRE Owner occupied

Added a weighted-average of

months to the life of loans.

Commercial and industrial

Added a weighted-average of

months to the life of loans.

Mortgage

Added a weighted-average of

years to the life of loans.

Consumer:

Personal

Added a weighted-average of

years to the life of loans.

Auto

Added a weighted-average of

years to the life of loans.

Other than insignificant payment delay

Loan Type

Financial Effect

CRE Non-owner occupied

Added a weighted-average of

months to the life of loans.

CRE Owner occupied

Added a weighted-average of

months to the life of loans.

Commercial and industrial

Added a weighted-average of

months to the life of loans.

Mortgage

Added a weighted-average of

months to the life of loans.

Consumer:

Credit cards

Added a weighted-average of

months to the life of loans.

For the six months ended June 30, 2024

Interest rate reduction

Loan Type

Financial Effect

CRE Non-owner occupied

Reduced weighted-average contractual interest rate from

10.1

% to

8.3

CRE Owner occupied

Reduced weighted-average contractual interest rate from

.0% to

.0%.

Commercial and industrial

Reduced weighted-average contractual interest rate from

19.2

% to

9.4

Mortgage

Reduced weighted-average contractual interest rate from

6.2

% to

4.5

Consumer:

Credit cards

Reduced weighted-average contractual interest rate from

20.2

% to

.0%.

Personal

Reduced weighted-average contractual interest rate from

18.8

% to

.0%.

Other

Reduced weighted-average contractual interest rate from

.0% to

.0%.

Term extension

Loan Type

Financial Effect

CRE Non-owner occupied

Added a weighted-average of

months to the life of loans.

CRE Owner occupied

Added a weighted-average of

months to the life of loans.

Commercial and industrial

Added a weighted-average of

months to the life of loans.

Mortgage

Added a weighted-average of

years to the life of loans.

Consumer:

Personal

Added a weighted-average of

years to the life of loans.

Auto

Added a weighted-average of

years to the life of loans.

Other than insignificant payment delay

Loan Type

Financial Effect

CRE Non-owner occupied

Added a weighted-average of

months to the life of loans.

CRE Owner occupied

Added a weighted-average of

months to the life of loans.

Commercial and industrial

Added a weighted-average of

months to the life of loans.

Mortgage

Added a weighted-average of

months to the life of loans.

Consumer:

Credit cards

Added a weighted-average of

months to the life of loans.

The following tables present, by

class, the performance of loans

that have been modified

during the twelve months

preceding June

30,

2025.

The

past

due

days

categories

includes

all

loans

modified

classified

non-accruing

the

time

the

modification. These

loans will

continue in

non-accrual status,

and presented

as past

due 90

days or

more, until

the borrower

has

demonstrated a willingness and

ability to make

the restructured loan payments

(at least six

months of sustained

performance after

the modification

or one

year for

loans providing

for quarterly

or semi-annual

payments) and

management has

concluded that

it is

probable that the borrower would not be in payment

default in the foreseeable future.

BPPR

June 30, 2025

Past Due 90 days or more [1]

(In thousands)

30-59 days

60-89 days

Past due 90

days or more

Total past

due

Current

Total

With Payment

Default

Without

Payment Default

CRE non-owner occupied

556

4,536

5,092

448

108

CRE owner occupied

386

2,583

2,969

43,635

46,604

429

2,154

Commercial and industrial

291

2,325

2,708

215,888

218,596

387

1,938

Mortgage

5,765

2,431

18,854

27,050

31,215

58,265

4,876

13,978

Consumer:

Credit cards

729

539

1,153

2,421

5,851

8,272

882

271

Personal

631

300

2,365

3,296

13,243

16,539

281

2,084

Auto

135

Other

Total

7,802

3,362

27,836

39,000

314,508

353,508

7,303

20,533

[1] Loans that were in non-accrual status at the time

of modification are presented as past due until the borrower

has demonstrated a willingness and ability

to make the restructured loan payments. Payment default

is defined as a restructured loan becoming 90 days past

due after being modified, foreclosed or

charged-off, whichever occurs first. The recorded investment

as of period end is inclusive of all partial paydowns

and charge-offs since the modification

date. Loans modified with financial difficulty that

were fully paid down, charged-off or foreclosed upon

by period end are not reported.

Popular U.S.

June 30, 2025

Past Due 90 days or more [1]

(In thousands)

30-59 days

60-89 days

Past due 90

days or more

Total past

due

Current

Total

With Payment

Default

Without

Payment Default

Commercial multi-family

5,791

CRE non-owner occupied

58,652

Commercial and industrial

609

Mortgage

1,481

Consumer:

Personal

208

225

Total

66,741

66,758

[1] Loans that were in non-accrual status at the time

of modification are presented as past due until the borrower

has demonstrated a willingness and ability

to make the restructured loan payments. Payment default

is defined as a restructured loan becoming 90 days past

due after being modified, foreclosed or

charged-off, whichever occurs first. The recorded investment

as of period end is inclusive of all partial paydowns

and charge-offs since the modification

date. Loans modified with financial difficulty that

were fully paid down, charged-off or foreclosed upon

by period end are not reported.

Popular Inc.

June 30, 2025

Past Due 90 days or more [1]

(In thousands)

30-59 days

60-89 days

Past due 90

days or more

Total past

due

Current

Total

With Payment

Default

Without

Payment Default

Commercial multi-family

5,791

CRE non-owner occupied

556

63,188

63,744

448

108

CRE owner occupied

386

2,583

2,969

43,635

46,604

429

2,154

Commercial and industrial

291

2,325

2,708

216,497

219,205

387

1,938

Mortgage

5,765

2,431

18,854

27,050

32,696

59,746

4,876

13,978

Consumer:

Credit cards

729

539

1,153

2,421

5,851

8,272

882

271

Personal

648

300

2,365

3,313

13,451

16,764

281

2,084

Auto

135

Other

Total

7,819

3,362

27,836

39,017

381,249

420,266

7,303

20,533

[1] Loans that were in non-accrual status at the time

of modification are presented as past due until the borrower

has demonstrated a willingness and ability

to make the restructured loan payments.

Payment default is defined as a restructured loan becoming

90 days past due after being modified, foreclosed

charged-off, whichever occurs first. The recorded investment

as of period end is inclusive of all partial paydowns

and charge-offs since the modification

date. Loans modified with financial difficulty that

were fully paid down, charged-off or foreclosed upon

by period end are not reported.

The following tables present, by

class, the performance of loans

that have been modified

during the twelve months

preceding June

30, 2024.

BPPR

June 30, 2024

Past Due 90 days or more [1]

(In thousands)

30-59 days

60-89 days

Past due 90

days or more

Total past

due

Current

Total

With Payment

Default

Without

Payment Default

Commercial multi-family

CRE non-owner occupied

176

2,847

3,023

123,280

126,303

2,847

CRE owner occupied

335

1,976

2,311

187,369

189,680

1,976

Commercial and industrial

379

16,325

16,731

81,051

97,782

11,994

4,331

Mortgage

8,969

3,596

23,535

36,100

46,337

82,437

4,833

18,702

Consumer:

Credit cards

174

113

368

1,269

1,637

Personal

172

1,461

1,711

5,085

6,796

232

1,229

Auto

107

Other

Total

10,018

3,969

46,394

60,381

444,454

504,835

17,138

29,256

[1] Loans that were in non-accrual status at the time

of modification are presented as past due until the borrower

has demonstrated a willingness and ability

to make the restructured loan payments. Payment default

is defined as a restructured loan becoming 90 days past

due after being modified, foreclosed or

charged-off, whichever occurs first. The recorded investment

as of period end is inclusive of all partial paydowns

and charge-offs since the modification

date. Loans modified with financial difficulty that

were fully paid down, charged-off or foreclosed upon

by period end are not reported.

Popular U.S.

June 30, 2024

Past Due 90 days or more [1]

(In thousands)

30-59 days

60-89 days

Past due 90

days or more

Total past

due

Current

Total

With Payment

Default

Without

Payment Default

CRE owner occupied

48,948

Mortgage

772

919

1,691

772

Consumer:

Personal

110

153

164

317

107

Total

882

925

50,031

50,956

879

[1] Loans that were in non-accrual status at the time

of modification are presented as past due until the borrower

has demonstrated a willingness and ability

to make the restructured loan payments. Payment default

is defined as a restructured loan becoming 90 days past

due after being modified, foreclosed or

charged-off, whichever occurs first. The recorded investment

as of period end is inclusive of all partial paydowns

and charge-offs since the modification

date. Loans modified with financial difficulty that

were fully paid down, charged-off or foreclosed upon

by period end are not reported.

Popular Inc.

June 30, 2024

Past Due 90 days or more [1]

(In thousands)

30-59 days

60-89 days

Past due 90

days or more

Total past

due

Current

Total

With Payment

Default

Without

Payment Default

Commercial multi-family

CRE non-owner occupied

176

2,847

3,023

123,280

126,303

2,847

CRE owner occupied

335

1,976

2,311

236,317

238,628

1,976

Commercial and industrial

379

16,325

16,731

81,051

97,782

11,994

4,331

Mortgage

8,969

3,596

24,307

36,872

47,256

84,128

4,833

19,474

Consumer:

Credit cards

174

113

368

1,269

1,637

Personal

196

1,571

1,864

5,249

7,113

235

1,336

Auto

107

Other

Total

10,037

3,993

47,276

61,306

494,485

555,791

17,141

30,135

[1] Loans that were in non-accrual status at the time

of modification are presented as past due until the borrower

has demonstrated a willingness and ability

to make the restructured loan payments.

Payment default is defined as a restructured loan becoming

90 days past due after being modified, foreclosed

charged-off, whichever occurs first. The recorded investment

as of period end is inclusive of all partial paydowns

and charge-offs since the modification

date. Loans modified with financial difficulty that

were fully paid down, charged-off or foreclosed upon

by period end are not reported.

Payment

default

defined

restructured

loan

becoming

days

past

due

after

being

modified,

foreclosed

charged-off,

whichever

occurs

first.

The

following

tables

provide

the

outstanding

balance

loans

modified

for

borrowers

under

financial

difficulties that were subject to payment default and that

had been modified during the twelve months prior

to default.

Amortized Cost Basis of Modified Financing Receivables That

Subsequently Defaulted During the Quarter Ended June

30, 2025

(In thousands)

Interest Rate

Reduction

Term Extension

Other-Than-

Insignificant

Payment Delays

Combination - Term

Extension and Interest

Rate Reduction

Combination - Other-

Than-Insignificant

Payment Delays and

Interest Rate

Reduction

Total

CRE non-owner occupied

448

CRE owner occupied

254

Commercial and industrial

318

388

Mortgage

4,478

1,256

5,734

Consumer:

Credit cards

172

771

943

Personal

127

105

139

371

Total

369

4,583

702

1,395

1,089

8,138

Amortized Cost Basis of Modified Financing Receivables That

Subsequently Defaulted During the Six Months Ended

June 30, 2025

(In thousands)

Interest Rate

Reduction

Term Extension

Other-Than-

Insignificant

Payment Delays

Combination - Term

Extension and Interest

Rate Reduction

Combination - Other-

Than-Insignificant

Payment Delays and

Interest Rate

Reduction

Total

CRE non-owner occupied

448

CRE owner occupied

429

517

Commercial and industrial

395

524

Mortgage

8,129

1,411

9,540

Consumer:

Credit cards

290

983

1,273

Personal

143

105

147

395

Total

532

8,322

907

1,558

1,378

12,697

Amortized Cost Basis of Modified Financing Receivables That

Subsequently Defaulted During the Quarter Ended June

30, 2024

(In thousands)

Interest Rate

Reduction

Term Extension

Other-Than-

Insignificant

Payment Delays

Combination - Term

Extension and Interest

Rate Reduction

Combination - Other-

Than-Insignificant

Payment Delays and

Interest Rate

Reduction

Total

Commercial and industrial

130

Mortgage

5,012

1,246

6,258

Consumer:

Credit cards

136

Personal

270

336

Total

330

5,069

1,312

127

6,860

Amortized Cost Basis of Modified Financing Receivables That

Subsequently Defaulted During the Six Months Ended

June 30, 2024

(In thousands)

Interest Rate

Reduction

Term Extension

Other-Than-

Insignificant

Payment Delays

Combination - Term

Extension and Interest

Rate Reduction

Combination - Other-

Than-Insignificant

Payment Delays and

Interest Rate

Reduction

Total

CRE owner occupied

543

Commercial and industrial

11,936

12,044

Mortgage

6,707

1,548

8,255

Consumer:

Credit cards

147

232

Personal

309

144

453

Total

394

19,186

1,692

223

21,527

Credit Quality

The risk

rating system

provides for

the assignment

of ratings

at the

obligor level

based on

the financial

condition of

the borrower.

The

risk rating

analysis process

performed at

least

once a

year

or more

frequently if

events or

conditions change

which may

deteriorate the credit quality.

In the case of

consumer and mortgage loans, these

loans are classified considering their

delinquency

status at the end of the reporting period.

The following tables present the amortized cost basis, net of unearned income, of

loans held-in-portfolio based on the Corporation’s

assignment of obligor risk ratings as defined at June 30,

2025 and December 31, 2024 and the gross write-offs recorded by

vintage

year.

For

the

definitions

the

obligor

risk

ratings,

refer

the

Credit

Quality

section

Note

the

Consolidated

Financial

Statements included in the 2024 Form 10-K:

June 30, 2025

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2025

2024

2023

2022

2021

Prior

Years

Total

BPPR

Commercial:

Commercial multi-family

Pass

5,807

49,680

36,848

134,824

20,776

49,916

107

297,958

Watch

532

974

1,506

Special Mention

3,052

Substandard

3,847

Total commercial

multi-family

5,807

49,680

36,848

135,356

20,776

57,789

107

306,363

Commercial real estate non-owner occupied

Pass

170,876

435,905

277,255

800,396

539,661

851,734

6,502

3,082,329

Watch

8,463

9,012

2,133

736

4,929

55,975

81,320

Special Mention

40,950

150

21,642

62,742

Substandard

14,255

8,650

30,652

26,150

23,886

103,593

Total commercial

real estate non-

owner occupied

179,339

459,172

328,988

831,934

570,740

953,237

6,574

3,329,984

Year-to-Date gross

write-offs

Commercial real estate owner occupied

Pass

37,062

137,720

79,163

103,152

183,384

334,315

6,647

881,443

Watch

1,871

14,458

5,509

26,227

21,246

80,797

150,108

Special Mention

1,671

16,158

743

11,605

1,461

31,638

Substandard

361

1,581

45,868

2,600

76,599

11,823

138,832

Doubtful

Total commercial

real estate owner

occupied

38,933

152,539

87,924

191,405

207,973

503,401

19,931

1,202,106

Year-to-Date gross

write-offs

103

Commercial and industrial

Pass

610,403

726,378

802,741

507,669

213,257

406,259

1,375,443

4,642,150

Watch

24,809

98,741

24,041

69,784

52,631

24,827

114,548

409,381

Special Mention

20,707

15,190

193

155,494

3,748

15,670

211,027

Substandard

4,506

14,137

39,212

77,310

4,268

27,254

165,473

332,160

Doubtful

Total commercial

and industrial

639,743

859,963

881,184

654,956

425,650

462,094

1,671,134

5,594,724

Year-to-Date gross

write-offs

505

134

209

370

207

4,332

5,778

Construction

Pass

12,476

93,063

71,433

13,614

2,392

10,344

28,788

232,110

Watch

15,355

15,437

Substandard

5,752

Total construction

12,476

93,063

86,788

13,614

8,226

10,344

28,788

253,299

Mortgage

Pass

500,848

896,365

701,587

393,941

390,381

4,147,454

7,030,576

Substandard

2,349

2,923

837

67,245

73,430

Total mortgage

500,848

896,441

703,936

396,864

391,218

4,214,699

7,104,006

Year-to-Date gross

write-offs

985

June 30, 2025

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2025

2024

2023

2022

2021

Prior

Years

Total

BPPR

Leasing

Pass

401,501

606,339

415,561

304,802

174,810

72,079

1,975,092

Substandard

102

947

2,339

2,527

1,318

743

7,976

Total leasing

401,603

607,286

417,900

307,329

176,128

72,822

1,983,068

Year-to-Date gross

write-offs

2,005

2,801

2,692

932

8,526

Consumer:

Credit cards

Pass

1,190,089

Substandard

25,179

Loss

Total credit cards

1,215,290

Year-to-Date gross

write-offs

38,876

HELOCs

Pass

1,809

Total HELOCs

1,809

Year-to-Date gross

write-offs

Personal

Pass

463,420

565,928

361,675

187,632

73,097

94,447

28,023

1,774,222

Substandard

1,776

3,660

1,823

675

7,307

2,295

17,559

Loss

128

173

429

Total Personal

463,443

567,832

365,508

189,514

73,833

101,762

30,318

1,792,210

Year-to-Date gross

write-offs

7,261

19,056

10,308

2,754

1,137

935

41,506

Auto

Pass

631,487

1,141,753

823,831

563,712

402,200

249,272

3,812,255

Substandard

559

10,807

13,078

10,413

7,488

7,015

49,360

Loss

Total Auto

632,046

1,152,577

836,966

574,133

409,688

256,292

3,861,702

Year-to-Date gross

write-offs

907

14,215

9,433

6,088

2,823

1,008

34,474

Other consumer

Pass

11,209

26,344

27,484

17,591

8,930

4,052

62,591

158,201

Substandard

221

105

264

645

Loss

1,026

550

1,576

Total Other

consumer

11,209

26,344

27,705

18,722

9,480

4,107

62,855

160,422

Year-to-Date gross

write-offs

159

152

158

115

984

1,580

Total BPPR

2,885,447

4,864,897

3,773,747

3,313,827

2,293,712

6,636,547

3,006,488

30,318

26,804,983

June 30, 2025

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2025

2024

2023

2022

2021

Prior

Years

Total

Popular U.S.

Commercial:

Commercial multi-family

Pass

220,110

141,968

158,579

463,959

304,759

713,040

7,845

2,010,260

Watch

19,739

24,169

124,218

168,126

Special Mention

7,922

Substandard

2,742

25,376

28,118

Total commercial

multi-family

220,110

141,968

158,579

494,362

328,928

862,634

7,845

2,214,426

Year-to-Date gross

write-offs

563

Commercial real estate non-owner occupied

Pass

134,448

184,579

311,357

474,945

168,109

650,531

9,897

1,933,866

Watch

10,300

8,875

10,900

11,365

9,221

85,023

135,684

Substandard

1,937

13,105

5,830

100,718

250

121,840

Total commercial

real estate non-

owner occupied

144,748

193,454

324,194

499,415

183,160

836,272

10,147

2,191,390

Commercial real estate owner occupied

Pass

182,187

256,245

256,523

265,347

267,836

283,143

8,454

1,519,735

Watch

13,500

25,370

7,838

859

55,575

103,142

Special Mention

18,056

38,063

22,984

79,103

Substandard

16,310

2,557

80,902

99,769

Total commercial

real estate owner

occupied

182,187

287,801

281,893

327,558

271,252

442,604

8,454

1,801,749

Year-to-Date gross

write-offs

Commercial and industrial

Pass

128,135

324,089

288,628

319,633

290,456

714,577

245,021

2,310,539

Watch

5,203

38,038

24,093

38,311

5,940

111,585

Special Mention

3,909

4,822

427

215

1,906

11,279

Substandard

2,623

274

196

1,509

11,023

15,625

Total commercial

and industrial

128,135

326,712

298,014

362,493

315,172

754,612

263,890

2,449,028

Year-to-Date gross

write-offs

552

599

1,196

Construction

Pass

153,767

373,195

503,352

62,476

6,030

11,641

1,110,461

Watch

324

3,945

4,615

67,330

7,057

83,271

Special Mention

12,568

Substandard

8,602

Total construction

154,091

377,140

520,535

138,408

13,087

11,641

1,214,902

Mortgage

Pass

82,666

89,746

86,297

209,953

267,057

576,649

1,312,368

Substandard

644

27,409

28,053

Total mortgage

82,666

89,746

86,941

209,953

267,057

604,058

1,340,421

June 30, 2025

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2025

2024

2023

2022

2021

Prior

Years

Total

Popular U.S.

Consumer:

Credit cards

Pass

Total credit cards

HELOCs

Pass

5,408

56,341

10,802

72,551

Substandard

1,478

558

2,049

Loss

164

906

1,070

Total HELOCs

7,050

56,354

12,266

75,670

Year-to-Date gross

write-offs

Personal

Pass

11,637

22,435

16,958

25,006

5,594

1,530

83,160

Substandard

231

228

251

279

1,038

Loss

Total Personal

11,637

22,666

17,193

25,257

5,643

1,857

84,253

Year-to-Date gross

write-offs

1,158

1,379

2,535

437

5,546

Other consumer

Pass

8,353

Total Other

consumer

8,353

Year-to-Date gross

write-offs

Total Popular U.S.

923,574

1,439,487

1,687,349

2,057,446

1,371,212

3,522,174

366,687

12,266

11,380,195

June 30, 2025

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2025

2024

2023

2022

2021

Prior

Years

Total

Popular, Inc.

Commercial:

Commercial multi-family

Pass

225,917

191,648

195,427

598,783

325,535

762,956

7,952

2,308,218

Watch

20,271

24,169

125,192

169,632

Special Mention

7,922

3,052

10,974

Substandard

2,742

29,223

31,965

Total commercial

multi-family

225,917

191,648

195,427

629,718

349,704

920,423

7,952

2,520,789

Year-to-Date gross

write-offs

563

Commercial real estate non-owner occupied

Pass

305,324

620,484

588,612

1,275,341

707,770

1,502,265

16,399

5,016,195

Watch

18,763

17,887

13,033

12,101

14,150

140,998

217,004

Special Mention

40,950

150

21,642

62,742

Substandard

14,255

10,587

43,757

31,980

124,604

250

225,433

Total commercial

real estate non-

owner occupied

324,087

652,626

653,182

1,331,349

753,900

1,789,509

16,721

5,521,374

Year-to-Date gross

write-offs

Commercial real estate owner occupied

Pass

219,249

393,965

335,686

368,499

451,220

617,458

15,101

2,401,178

Watch

1,871

27,958

30,879

34,065

22,105

136,372

253,250

Special Mention

18,056

1,671

54,221

743

34,589

1,461

110,741

Substandard

361

1,581

62,178

5,157

157,501

11,823

238,601

Doubtful

Total commercial

real estate owner

occupied

221,120

440,340

369,817

518,963

479,225

946,005

28,385

3,003,855

Year-to-Date gross

write-offs

129

Commercial and industrial

Pass

738,538

1,050,467

1,091,369

827,302

503,713

1,120,836

1,620,464

6,952,689

Watch

24,809

98,741

29,244

107,822

76,724

63,138

120,488

520,966

Special Mention

20,707

19,099

5,015

155,921

3,963

17,576

222,306

Substandard

4,506

16,760

39,486

77,310

4,464

28,763

176,496

347,785

Doubtful

Total commercial

and industrial

767,878

1,186,675

1,179,198

1,017,449

740,822

1,216,706

1,935,024

8,043,752

Year-to-Date gross

write-offs

505

686

209

370

620

214

4,370

6,974

June 30, 2025

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2025

2024

2023

2022

2021

Prior

Years

Total

Popular, Inc.

Construction

Pass

166,243

466,258

574,785

76,090

2,392

16,374

40,429

1,342,571

Watch

324

3,945

19,970

67,330

7,057

98,708

Special Mention

12,568

Substandard

8,602

5,752

14,354

Total construction

166,567

470,203

607,323

152,022

8,226

23,431

40,429

1,468,201

Mortgage

Pass

583,514

986,111

787,884

603,894

657,438

4,724,103

8,342,944

Substandard

2,993

2,923

837

94,654

101,483

Total mortgage

583,514

986,187

790,877

606,817

658,275

4,818,757

8,444,427

Year-to-Date gross

write-offs

985

Leasing

Pass

401,501

606,339

415,561

304,802

174,810

72,079

1,975,092

Substandard

102

947

2,339

2,527

1,318

743

7,976

Total leasing

401,603

607,286

417,900

307,329

176,128

72,822

1,983,068

Year-to-Date gross

write-offs

2,005

2,801

2,692

932

8,526

June 30, 2025

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2025

2024

2023

2022

2021

Prior

Years

Total

Popular, Inc.

Consumer:

Credit cards

Pass

1,190,092

Substandard

25,179

Loss

Total credit cards

1,215,293

Year-to-Date gross

write-offs

38,876

HELOCs

Pass

5,408

58,150

10,802

74,360

Substandard

1,478

558

2,049

Loss

164

906

1,070

Total HELOCs

7,050

58,163

12,266

77,479

Year-to-Date gross

write-offs

Personal

Pass

475,057

588,363

378,633

212,638

78,691

95,977

28,023

1,857,382

Substandard

2,007

3,888

2,074

724

7,586

2,295

18,597

Loss

128

180

484

Total Personal

475,080

590,498

382,701

214,771

79,476

103,619

30,318

1,876,463

Year-to-Date gross

write-offs

8,419

20,435

12,843

3,191

1,174

935

47,052

Auto

Pass

631,487

1,141,753

823,831

563,712

402,200

249,272

3,812,255

Substandard

559

10,807

13,078

10,413

7,488

7,015

49,360

Loss

Total Auto

632,046

1,152,577

836,966

574,133

409,688

256,292

3,861,702

Year-to-Date gross

write-offs

907

14,215

9,433

6,088

2,823

1,008

34,474

Other consumer

Pass

11,209

26,344

27,484

17,591

8,930

4,052

70,944

166,554

Substandard

221

105

264

645

Loss

1,026

550

1,576

Total Other

consumer

11,209

26,344

27,705

18,722

9,480

4,107

71,208

168,775

Year-to-Date gross

write-offs

159

152

158

115

984

1,622

Total Popular Inc.

3,809,021

6,304,384

5,461,096

5,371,273

3,664,924

10,158,721

3,373,175

42,584

38,185,178

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

BPPR

Commercial:

Commercial multi-family

Pass

50,384

37,211

136,093

20,939

20,134

34,009

105

298,875

Watch

541

1,601

2,142

Special Mention

3,161

Substandard

3,823

Total commercial

multi-family

50,384

37,211

136,634

20,939

20,134

42,594

105

308,001

Commercial real estate non-owner occupied

Pass

419,200

322,998

828,404

547,674

335,060

525,088

6,159

2,984,583

Watch

26,097

2,296

654

5,349

28,832

50,924

114,224

Special Mention

7,018

41,274

156

406

46,390

95,244

Substandard

1,002

110

26,430

1,954

22,956

52,452

Total commercial

real estate non-

owner occupied

452,315

367,570

829,324

579,859

365,846

645,358

6,231

3,246,503

Year-to-Date gross

write-offs

128

Commercial real estate owner occupied

Pass

131,449

79,109

94,008

214,520

46,206

309,791

7,214

882,297

Watch

14,002

2,637

64,735

7,225

4,890

85,580

179,072

Special Mention

1,209

19,436

19,288

15,872

1,499

57,304

Substandard

455

1,651

20,528

3,872

140,579

77,098

13,021

257,204

Doubtful

Total commercial

real estate owner

occupied

145,906

84,606

198,707

244,905

191,675

488,375

21,737

1,375,911

Year-to-Date gross

write-offs

2,793

Commercial and industrial

Pass

790,273

910,355

602,454

304,227

66,395

331,493

1,495,490

4,500,687

Watch

124,987

24,935

49,497

6,394

3,465

31,609

135,811

376,698

Special Mention

5,519

7,316

1,895

157,627

30,360

28,171

230,941

Substandard

6,063

30,496

37,558

4,203

14,776

23,135

122,275

238,506

Doubtful

Loss

Total commercial

and industrial

926,842

973,102

691,404

472,451

84,689

416,608

1,781,798

5,346,894

Year-to-Date gross

write-offs

1,099

707

331

122

2,838

11,841

7,617

24,555

Construction

Pass

63,107

53,070

33,423

14,908

9,483

1,011

16,782

191,784

Watch

13,872

Special Mention

6,058

Substandard

576

Total construction

63,107

66,942

33,423

21,542

9,483

1,011

16,782

212,290

Mortgage

Pass

879,075

724,383

409,133

401,113

234,486

4,085,088

6,733,278

Substandard

1,961

1,331

1,675

347

71,289

76,603

Total mortgage

879,075

726,344

410,464

402,788

234,833

4,156,377

6,809,881

Year-to-Date gross

write-offs

1,067

1,084

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

BPPR

Leasing

Pass

731,053

477,226

362,426

217,537

104,812

22,762

1,915,816

Substandard

1,195

2,280

2,834

1,885

920

402

9,516

Loss

Total leasing

732,248

479,506

365,260

219,422

105,732

23,237

1,925,405

Year-to-Date gross

write-offs

1,733

4,842

5,373

3,281

694

1,052

16,975

Consumer:

Credit cards

Pass

1,188,093

Substandard

29,960

Total credit cards

1,218,053

Year-to-Date gross

write-offs

69,731

HELOCs

Pass

2,040

Total HELOCs

2,040

Year-to-Date gross

write-offs

380

Personal

Pass

722,949

499,604

262,011

101,155

29,078

91,004

23,802

1,729,603

Substandard

924

4,965

3,561

1,221

271

8,205

1,626

20,773

Loss

Total Personal

723,873

504,569

265,572

102,377

29,349

99,209

25,428

1,750,377

Year-to-Date gross

write-offs

2,362

39,193

38,077

10,822

2,708

3,525

1,982

98,669

Auto

Pass

1,277,016

938,769

665,431

494,529

254,621

133,054

3,763,420

Substandard

7,239

16,876

13,579

10,775

6,377

5,131

59,977

Loss

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

62,678

158,908

Substandard

228

413

771

Loss

550

Total Other

consumer

28,543

29,813

20,065

10,679

4,617

3,421

63,091

160,229

Year-to-Date gross

write-offs

213

130

128

2,205

2,801

Total BPPR

5,286,562

4,225,323

3,629,863

2,580,268

1,307,356

6,014,384

3,109,837

25,428

26,179,021

December 31, 2024

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2024

2023

2022

2021

2020

Prior

Years

Total

Popular U.S.

Commercial:

Commercial multi-family

Pass

139,370

148,423

491,750

313,610

207,327

560,891

5,700

1,867,071

Watch

10,974

27,441

26,679

10,668

114,419

190,181

Special Mention

8,004

Substandard

2,761

23,602

26,363

Total commercial

multi-family

139,370

159,397

529,956

340,289

217,995

698,912

5,700

2,091,619

Year-to-Date gross

write-offs

441

Commercial real estate non-owner occupied

Pass

178,355

368,597

480,055

167,839

193,309

456,689

8,588

1,853,432

Watch

12,932

17,125

13,138

45,864

64,390

300

153,749

Special Mention

594

Substandard

2,657

2,741

5,758

97,801

108,957

Total commercial

real estate non-

owner occupied

178,355

381,529

499,837

183,718

244,931

619,474

8,888

2,116,732

Year-to-Date gross

write-offs

Commercial real estate owner occupied

Pass

304,778

257,586

244,811

279,419

35,459

246,158

7,669

1,375,880

Watch

25,614

13,531

32,132

16,301

54,877

142,455

Special Mention

488

69,505

34,428

27,406

10,825

142,652

Substandard

17,101

2,596

3,678

97,473

120,848

Total commercial

real estate owner

occupied

304,778

283,688

344,948

348,575

82,844

409,333

7,669

1,781,835

Year-to-Date gross

write-offs

154

December 31, 2024

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2024

2023

2022

2021

2020

Prior

Years

Total

Popular U.S.

Commercial and industrial

Pass

260,479

275,971

318,564

322,697

268,591

506,973

273,222

2,226,497

Watch

11,420

48,953

28,138

9,521

35,498

15,050

148,580

Special Mention

5,270

568

255

3,835

9,986

Substandard

2,276

195

1,610

5,479

9,605

Total commercial

and industrial

262,813

287,391

372,787

351,598

278,157

544,336

297,586

2,394,668

Year-to-Date gross

write-offs

1,103

1,571

190

300

211

480

123

3,978

Construction

Pass

259,194

512,428

155,268

765

927,655

Watch

1,541

36,264

7,172

24,691

69,668

Special Mention

4,897

6,367

11,264

Substandard

8,104

25,473

9,338

42,915

Total construction

259,194

518,866

206,003

33,410

34,029

1,051,502

Mortgage

Pass

98,345

88,788

215,600

272,908

216,025

382,746

1,274,412

Substandard

644

106

860

28,280

29,890

Total mortgage

98,345

89,432

215,706

273,768

216,025

411,026

1,304,302

Year-to-Date gross

write-offs

December 31, 2024

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2024

2023

2022

2021

2020

Prior

Years

Total

Popular U.S.

Consumer:

Credit cards

Pass

Total credit cards

HELOCs

Pass

5,914

50,533

11,691

68,138

Substandard

1,657

700

2,372

Loss

122

899

1,021

Total HELOCs

7,693

50,548

13,290

71,531

Year-to-Date gross

write-offs

Personal

Pass

28,083

23,084

41,182

8,618

651

1,507

103,125

Substandard

157

399

627

134

302

1,626

Loss

116

Total Personal

28,293

23,493

41,809

8,757

658

1,857

104,867

Year-to-Date gross

write-offs

802

4,536

10,869

2,458

231

307

19,203

Other consumer

Pass

11,537

Substandard

Total Other

consumer

11,549

Year-to-Date gross

write-offs

101

Total Popular U.S.

1,271,148

1,743,796

2,211,046

1,506,705

1,040,610

2,726,041

415,995

13,290

10,928,631

December 31, 2024

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2024

2023

2022

2021

2020

Prior

Years

Total

Popular, Inc.

Commercial:

Commercial multi-family

Pass

189,754

185,634

627,843

334,549

227,461

594,900

5,805

2,165,946

Watch

10,974

27,982

26,679

10,668

116,020

192,323

Special Mention

8,004

3,161

11,165

Substandard

2,761

27,425

30,186

Total commercial

multi-family

189,754

196,608

666,590

361,228

238,129

741,506

5,805

2,399,620

Year-to-Date gross

write-offs

441

Commercial real estate non-owner occupied

Pass

597,555

691,595

1,308,459

715,513

528,369

981,777

14,747

4,838,015

Watch

26,097

15,228

17,779

18,487

74,696

115,314

372

267,973

Special Mention

7,018

41,274

156

406

46,984

95,838

Substandard

1,002

2,767

29,171

7,712

120,757

161,409

Total commercial

real estate non-

owner occupied

630,670

749,099

1,329,161

763,577

610,777

1,264,832

15,119

5,363,235

Year-to-Date gross

write-offs

113

182

Commercial real estate owner occupied

Pass

436,227

336,695

338,819

493,939

81,665

555,949

14,883

2,258,177

Watch

14,002

28,251

78,266

39,357

21,191

140,457

321,527

Special Mention

1,697

88,941

53,716

27,406

26,697

1,499

199,956

Substandard

455

1,651

37,629

6,468

144,257

174,571

13,021

378,052

Doubtful

Total commercial

real estate owner

occupied

450,684

368,294

543,655

593,480

274,519

897,708

29,406

3,157,746

Year-to-Date gross

write-offs

2,947

Commercial and industrial

Pass

1,050,752

1,186,326

921,018

626,924

334,986

838,466

1,768,712

6,727,184

Watch

124,987

36,355

98,450

34,532

12,986

67,107

150,861

525,278

Special Mention

5,577

7,316

7,165

158,195

30,615

32,006

240,927

Substandard

8,339

30,496

37,558

4,398

14,821

24,745

127,754

248,111

Doubtful

Loss

Total commercial

and industrial

1,189,655

1,260,493

1,064,191

824,049

362,846

960,944

2,079,384

7,741,562

Year-to-Date gross

write-offs

2,202

2,278

521

422

3,049

12,321

7,740

28,533

December 31, 2024

Term Loans

Revolving

Loans

Amortized

Cost Basis

Revolving

Loans

Converted to

Term Loans

Amortized

Cost Basis

Amortized Cost Basis by Origination Year

(In thousands)

2024

2023

2022

2021

2020

Prior

Years

Total

Popular, Inc.

Construction

Pass

322,301

565,498

188,691

14,908

9,483

1,776

16,782

1,119,439

Watch

15,413

36,264

7,172

24,691

83,540

Special Mention

4,897

6,367

6,058

17,322

Substandard

8,104

576

25,473

9,338

43,491

Total construction

322,301

585,808

239,426

21,542

9,483

34,421

50,811

1,263,792

Mortgage

Pass

977,420

813,171

624,733

674,021

450,511

4,467,834

8,007,690

Substandard

2,605

1,437

2,535

347

99,569

106,493

Total mortgage

977,420

815,776

626,170

676,556

450,858

4,567,403

8,114,183

Year-to-Date gross

write-offs

1,085

1,102

Leasing

Pass

731,053

477,226

362,426

217,537

104,812

22,762

1,915,816

Substandard

1,195

2,280

2,834

1,885

920

402

9,516

Loss

Total leasing

732,248

479,506

365,260

219,422

105,732

23,237

1,925,405

Year-to-Date gross

write-offs

1,733

4,842

5,373

3,281

694

1,052

16,975

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

Substandard

29,960

Total credit cards

1,218,079

Year-to-Date gross

write-offs

69,731

HELOCs

Pass

5,914

52,573

11,691

70,178

Substandard

1,657

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

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

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

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

425

783

Loss

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

213

130

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

Note 9 – Mortgage banking activities

Income

from

mortgage

banking

activities

includes

mortgage

servicing

fees

earned

connection

with

administering

residential

mortgage

loans

and

valuation

adjustments

mortgage

servicing

rights.

also

includes

gain

sales

and

securitizations

residential mortgage

loans, losses

on repurchased

loans, including

interest advances,

and trading

gains and

losses on

derivative

contracts

used

hedge

the

Corporation’s

securitization

activities.

addition,

fair

value

valuation

adjustments

residential

mortgage loans held for sale, if any, are recorded as part of the mortgage

banking activities.

The following table presents the components of mortgage

banking activities:

Quarters ended June 30,

Six months ended June 30,

(In thousands)

2025

2024

2025

2024

Mortgage servicing fees, net of fair value adjustments:

Mortgage servicing fees

6,912

7,602

14,080

15,353

Mortgage servicing rights fair value adjustments

(1,954)

(1,945)

(5,524)

(5,384)

Total mortgage

servicing fees, net of fair value adjustments

4,958

5,657

8,556

9,969

Net (loss) gain on sale of loans, including valuation on

loans held-for-sale

(37)

156

Trading account (loss) profit:

Unrealized (losses) gains on outstanding derivative positions

(8)

(95)

157

Realized (losses) gains on closed derivative positions

(10)

(9)

Total trading account

(loss) profit

(18)

(104)

169

Losses on repurchased loans, including interest advances

(31)

(1)

(47)

(131)

Total mortgage

banking activities

4,872

5,723

8,561

10,083

Note 10 – Transfers of financial assets and mortgage servicing assets

The

Corporation

typically

transfers

conforming

residential

mortgage

loans

conjunction

with

GNMA,

FNMA

and

FHLMC

securitization transactions

whereby the

loans are

exchanged for

cash or

securities and

servicing rights.

As seller,

the Corporation

has made

certain representations

and warranties

with respect

to the

originally transferred

loans and,

in the

past,

has sold

certain

loans

with

credit

recourse

government-sponsored

entity,

namely

FNMA.

Refer

Note

the

Consolidated

Financial

Statements for a description of such arrangements.

liabilities were

incurred as

a result

of these

securitizations during the

quarters and

six months

ended June 30,

2025 and

2024

because they did not contain any credit recourse

arrangements.

The

following tables

present the

initial fair

value of

the

assets obtained

proceeds from

residential mortgage

loans securitized

during the quarters and six months ended June 30,

2025 and 2024:

Proceeds Obtained During the Quarter Ended June 30, 2025

(In thousands)

Level 1

Level 2

Level 3

Initial Fair Value

Assets

Trading account debt securities:

Mortgage-backed securities - GNMA

2,581

Mortgage-backed securities - FNMA

2,553

Total trading account

debt securities

5,134

Mortgage servicing rights

Total

5,134

5,226

Proceeds Obtained During the Six months Ended June

30, 2025

(In thousands)

Level 1

Level 2

Level 3

Initial Fair Value

Assets

Trading account debt securities:

Mortgage-backed securities - GNMA

2,581

Mortgage-backed securities - FNMA

4,271

Total trading account

debt securities

6,852

Mortgage servicing rights

135

Total

6,852

135

6,987

Proceeds Obtained During the Quarter Ended June 30, 2024

(In thousands)

Level 1

Level 2

Level 3

Initial Fair Value

Assets

Trading account debt securities:

Mortgage-backed securities - FNMA

2,601

Total trading account

debt securities

2,601

Mortgage servicing rights

Total

2,601

2,673

Proceeds Obtained During the Six months Ended June

30, 2024

(In thousands)

Level 1

Level 2

Level 3

Initial Fair Value

Assets

Trading account debt securities:

Mortgage-backed securities - GNMA

1,100

Mortgage-backed securities - FNMA

3,706

Total trading account

debt securities

4,806

Mortgage servicing rights

117

Total

4,806

117

4,923

During the

six months

ended June 30,

2025, the

Corporation retained servicing

rights on

whole loan sales

involving $

million in

principal balance

outstanding (June

30, 2024

- $

million), with

net realized

gains of

0.4

million (June

30, 2024

- gains

of $

0.5

million). All loan sales performed during the six months

ended June 30, 2025 and 2024 were without

credit recourse agreements.

The Corporation recognizes as assets the rights to service loans for others,

whether these rights are purchased or result from asset

transfers such as sales and securitizations. These mortgage

servicing rights (“MSRs”) are measured at

fair value.

The

Corporation

uses

discounted

cash

flow

model

estimate

the

fair

value

MSRs.

The

discounted

cash

flow

model

incorporates

assumptions

that

market

participants

would

use

estimating

future

net

servicing

income,

including

estimates

prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, prepayment and late

fees, among other considerations. Prepayment speeds are

adjusted for the loans’ characteristics and portfolio behavior.

The following table

presents the changes

in MSRs measured

using the fair

value method for

the six months

ended June 30,

2025

and 2024.

Residential MSRs

(In thousands)

June 30, 2025

June 30, 2024

Fair value at beginning of period

108,103

118,109

Additions

498

661

Changes due to payments on loans

[1]

(4,326)

(4,435)

Reduction due to loan repurchases

(221)

(247)

Changes in fair value due to changes in valuation model inputs

or assumptions

(977)

(702)

Fair value at end of period

[2]

103,077

113,386

[1] Represents changes due to collection / realization

of expected cash flows over time.

[2] At June 30, 2025, PB had MSRs amounting to $

1.8

million (June 30, 2024 - $

1.9

million).

Residential mortgage loans serviced for others were $

8.6

billion at June 30, 2025 (December 31, 2024

9.0

billion).

Net mortgage servicing fees, a component of mortgage banking activities in the Consolidated Statements of Operations, include the

changes from period to period in the fair value of the MSRs, including changes due to collection / realization of expected cash flows.

The banking

subsidiaries receive servicing

fees based

on a

percentage of the

outstanding loan balance.

These servicing fees

are

credited to income

when they are collected.

At June 30,

2025, those weighted average

mortgage servicing fees were

0.32

% (June

30, 2024 -

0.32

%). Under these servicing agreements, the banking

subsidiaries do not generally earn significant prepayment

penalty

fees on the underlying loans serviced.

The section

below includes

information on

assumptions used

in the

valuation model

of the

MSRs, originated

and purchased.

Key

economic assumptions used

in measuring the

servicing rights derived

from loans securitized

or sold by

the Corporation during

the

quarters and six months ended June 30, 2025 and

2024 were as follows:

Quarters ended

Six months ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

BPPR

Prepayment speed

5.9

5.8

6.9

6.3

6.8

6.0

6.4

6.2

Weighted average life (in years)

10.4

8.8

9.2

8.6

9.8

8.8

9.4

8.7

Discount rate (annual rate)

9.5

12.9

9.8

12.9

9.7

12.9

9.6

12.7

Key

economic

assumptions

used

estimate

the

fair

value

MSRs

derived

from

sales

and

securitizations

mortgage

loans

performed

the

banking

subsidiaries

and

servicing

rights

purchased

from

other

financial

institutions,

and

the

sensitivity

immediate changes in those assumptions, were as follows

as of the end of the periods reported:

Originated MSRs

Purchased MSRs

June 30,

December 31,

June 30,

December 31,

(In thousands)

2025

2024

2025

2024

Fair value of servicing rights

33,734

34,019

69,343

74,084

Weighted average life (in years)

6.4

6.6

Weighted average prepayment speed (annual

rate)

5.6

5.8

6.9

Impact on fair value of 10% adverse change

(658)

(667)

(1,346)

(1,448)

Impact on fair value of 20% adverse change

(1,289)

(1,308)

(2,641)

(2,840)

Weighted average discount rate (annual rate)

11.3

11.4

10.9

10.8

Impact on fair value of 10% adverse change

(1,245)

(1,267)

(2,496)

(2,689)

Impact on fair value of 20% adverse change

(2,410)

(2,451)

(4,837)

(5,211)

The sensitivity analyses presented in the table above for servicing rights are hypothetical and should be used with caution. As the

figures indicate, changes in fair value based on a 10 and 20 percent variation in assumptions generally cannot be extrapolated

because the relationship of the change in assumption to the change in fair value may not be linear. Also, in the sensitivity tables

included herein the effect of a variation in a particular assumption on the fair value of the retained interest is calculated without

changing any other assumption. In reality, changes in one factor may result in changes in another (for example, increases in market

interest rates may result in lower prepayments and increased credit losses), which might magnify or counteract the sensitivity.

June

30,

2025,

the

Corporation

serviced

460

million

residential

mortgage

loans

with

credit

recourse

the

Corporation

(December 31, 2024

- $

495

million). Also refer

to Note

19 to

the Consolidated Financial

Statements for information

on changes in

the Corporation’s liability of estimated losses related

to loans serviced with credit recourse.

During the

six months

ended June

30, 2025,

the Corporation

repurchased $

million (June

30, 2024

- $

million) of

mortgage

loans from

its GNMA

servicing portfolio.

The determination

to repurchase

these loans

was based

on the

economic benefits

of the

transaction, which

results in

a reduction

of the

servicing costs

for these

severely delinquent

loans, mainly

related to

principal and

interest advances. The

risk associated with

the loans is

reduced due to

their guaranteed nature.

The Corporation may place

these

loans under modification

programs offered by

FHA, VA

or United States

Department of Agriculture (USDA)

or other loss

mitigation

programs offered by the Corporation,

and once brought back to current status, these may be either

retained in portfolio or re-sold in

the secondary market.

Note 11 – Other real estate owned

The following tables present the activity related to Other

Real Estate Owned (“OREO”),

for the quarters

and six months ended June

30, 2025 and 2024.

For the quarter ended June 30, 2025

OREO

(In thousands)

Commercial/Construction

Mortgage

Total

Balance at beginning of period

7,111

45,003

52,114

Write-downs in value

(835)

(516)

(1,351)

Additions

314

7,908

8,222

Sales

(693)

(12,145)

(12,838)

Other adjustments

(21)

Ending balance

5,897

40,229

46,126

For the quarter ended June 30, 2024

OREO

(In thousands)

Commercial/Construction

Mortgage

Total

Balance at beginning of period

15,962

64,580

80,542

Write-downs in value

(1,039)

(427)

(1,466)

Additions

516

12,146

12,662

Sales

(6,011)

(15,502)

(21,513)

Ending balance

9,428

60,797

70,225

For the six months ended June 30, 2025

OREO

(In thousands)

Commercial/Construction

Mortgage

Total

Balance at beginning of period

8,424

48,844

57,268

Write-downs in value

(864)

(1,715)

(2,579)

Additions

571

16,697

17,268

Sales

(2,234)

(23,374)

(25,608)

Other adjustments

(223)

Ending balance

5,897

40,229

46,126

For the six months ended June 30, 2024

OREO

(In thousands)

Commercial/Construction

Mortgage

Total

Balance at beginning of period

11,189

69,227

80,416

Write-downs in value

(1,064)

(711)

(1,775)

Additions

5,860

24,782

30,642

Sales

(6,557)

(32,436)

(38,993)

Other adjustments

(65)

Ending balance

9,428

60,797

70,225

Note 12 − Other assets

The caption of other assets in the Consolidated

Statements of Financial Condition consists of the

following major categories:

(In thousands)

June 30, 2025

December 31, 2024

Net deferred tax assets (net of valuation allowance)

862,089

926,329

Investments under the equity method

244,510

251,537

Prepaid taxes

63,677

42,909

Other prepaid expenses

31,982

28,376

Capitalized software costs

169,583

136,442

Derivative assets

24,792

25,975

Trades receivable from brokers and counterparties

880

588

Receivables from investments maturities

14,600

Principal, interest and escrow servicing advances

35,818

43,793

Guaranteed mortgage loan claims receivable

13,084

17,226

Operating ROU assets (Note 27)

89,253

93,389

Finance ROU assets (Note 27)

17,685

19,174

Assets for pension benefit

34,503

33,233

Others

157,196

164,188

Total other assets

1,745,052

1,797,759

The Corporation regularly incurs in

capitalizable costs associated with software development or

licensing which are recorded within

the Other Assets line

item in the accompanying Consolidated Statements

of Financial Condition.

In addition, the Corporation incurs

costs

associated

with

hosting

arrangements

that

are

service

contracts

that

are

also

recorded

within

Other

Assets.

The

hosting

arrangements can

include capitalizable

implementation costs

that are

amortized during

the term

of the

hosting arrangement.

The

following

table

summarizes

the

composition

acquired

developed

software

costs

well

costs

hosting

arrangements:

Gross Carrying

Accumulated

Net Carrying

(In thousands)

Amount

Amortization

Value

June 30, 2025

Software development costs

83,809

29,575

54,234

Software license costs

52,630

26,924

25,706

Cloud computing arrangements

98,766

9,123

89,643

Total Capitalized

software costs [1] [2]

235,205

65,622

169,583

December 31, 2024

Software development costs

79,233

23,057

56,176

Software license costs

42,234

21,459

20,775

Cloud computing arrangements

65,797

6,306

59,491

Total Capitalized

software costs [1] [2]

187,264

50,822

136,442

[1]

Software intangible assets are presented as part of Other

Assets in the Consolidated Statements of Financial Condition.

[2]

The tables above exclude assets that have been fully

amortized.

Total

amortization expense for

all capitalized software

and hosting arrangement

cost, reflected as

part of

technology and software

expenses in the consolidated statement of operations,

is as follows:

Quarters ended June 30,

Six

months ended June 30,

(In thousands)

2025

2024

2025

2024

Software development and license costs

22,254

18,612

43,982

36,313

Cloud computing arrangements

1,462

666

2,828

1,538

Total amortization

expense

23,716

19,278

46,810

37,851

Note 13 – Goodwill and other intangible assets

Goodwill

There were

changes in the carrying amount of goodwill

for the quarters and six months ended June 30, 2025

and 2024.

The following tables present the gross amount

of goodwill and accumulated impairment losses

by reportable segment:

June 30, 2025

Balance at

June 30,

Accumulated

June 30,

2025

impairment

2025

(In thousands)

(gross amounts)

losses

(net amounts)

Banco Popular de Puerto Rico

438,710

3,801

434,909

Popular U.S.

564,456

196,411

368,045

Total Popular,

Inc.

1,003,166

200,212

802,954

December 31, 2024

Balance at

December 31,

Accumulated

December 31,

2024

impairment

2024

(In thousands)

(gross amounts)

losses

(net amounts)

Banco Popular de Puerto Rico

438,710

3,801

434,909

Popular U.S.

564,456

196,411

368,045

Total Popular,

Inc.

1,003,166

200,212

802,954

Other Intangible Assets

The following table reflects the components of

other intangible assets subject to amortization:

Gross Carrying

Accumulated

Net Carrying

(In thousands)

Amount

Amortization

Value

June 30, 2025

Core deposits

12,810

Other customer relationships

14,286

9,202

5,084

Total other intangible

assets

27,096

22,012

5,084

December 31, 2024

Core deposits

12,810

12,595

215

Other customer relationships

14,286

8,435

5,851

Total other intangible

assets

27,096

21,030

6,066

During the quarter ended June 30, 2025, the Corporation recognized

0.4

million in amortization expense related to other intangible

assets

with

definite

useful

lives

(June

30,

2024

0.7

million).

During

the

six

months

ended

June

30,

2025,

the

Corporation

recognized $

1.0

million in amortization related to other intangible

assets with definite useful lives (June

30, 2024 - $

1.5

million).

The following

table presents

the estimated

amortization of

the intangible

assets with

definite useful

lives for

each of

the following

periods:

(In thousands)

Remaining 2025

768

Year 2026

1,440

Year 2027

959

Year 2028

959

Year 2029

958

Note 14 – Deposits

Total deposits as of the end of the periods presented consisted of:

(In thousands)

June 30, 2025

December 31, 2024

Savings accounts

14,337,808

14,224,271

NOW, money market and other interest

-bearing demand deposits

28,166,283

26,507,637

Total savings, NOW,

money market and other interest-bearing demand deposits

42,504,091

40,731,908

Certificates of deposit:

Under $250,000

5,580,334

5,383,331

$250,000 and over

4,018,452

3,629,551

Total certificates

of deposit

9,598,786

9,012,882

Total interest-bearing

deposits

52,102,877

49,744,790

Non- interest-bearing deposits

15,114,614

15,139,555

Total deposits

67,217,491

64,884,345

A summary of certificates of deposits by maturity at

June 30, 2025 follows:

(In thousands)

2025

4,645,684

2026

2,633,316

2027

823,872

2028

666,327

2029

446,123

2030 and thereafter

383,464

Total certificates of

deposit

9,598,786

At June 30, 2025, the Corporation had brokered

deposits amounting to $

1.7

billion (December 31, 2024 - $

1.6

billion).

The aggregate amount

of overdrafts in

demand deposit accounts that

were reclassified to

loans was $

6.4

million at June

30, 2025

(December 31, 2024 - $

10.4

million).

June

30,

2025,

Puerto

Rico

government

deposits

amounted

20.9

billion.

Puerto

Rico

government

deposits

are

interest

bearing accounts, which are indexed to short-term market

rates and fluctuate in cost with changes in those rates, in accordance

with

contractual terms.

Note 15 – Borrowings

Assets sold under agreements to repurchase

Assets sold under agreements to repurchase amounted

to $

million at June 30, 2025 and $

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

right

set-off

with

the

respective

counterparty

under

the

supplemental

terms

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

agreement

and

any

other

amount

obligation

owed

respect

any

other

agreement

transaction

between

them.

Pursuant to the

Corporation’s accounting policy,

the repurchase agreements

are not offset

with other repurchase

agreements held

with the same counterparty.

The following table

presents information related to

the Corporation’s repurchase

transactions accounted for as

secured borrowings

that

are

collateralized

with

debt

securities

available-for-sale,

debt

securities

held-to-maturity,

and

other

assets

held-for-trading

purposes or

which have

been obtained

under agreements

to resell.

It is

the Corporation’s

policy to

maintain effective

control over

assets sold under agreements to repurchase; accordingly, such

securities continue to be carried on the Consolidated Statements of

Financial Condition.

Repurchase agreements accounted for as secured borrowings

June 30, 2025

December 31, 2024

Repurchase

(In thousands)

liability

U.S. Treasury securities

Within 30 days

27,789

22,591

After 30 to 90 days

23,781

13,813

Total U.S. Treasury

securities

51,570

36,404

Mortgage-backed securities

Within 30 days

4,473

4,924

After 30 to 90 days

13,505

Total mortgage-backed

securities

4,473

18,429

Total

56,043

54,833

Repurchase agreements in this portfolio

are generally short-term, often overnight.

As such our risk

is very limited.

We manage the

liquidity risks arising from secured

funding by sourcing funding globally from

a diverse group of counterparties, providing

a range of

securities collateral and pursuing longer durations,

when appropriate.

Other short-term borrowings

At June 30,

2025 and December 31,

2024, other short-term

borrowings consisted of

550

million and $

225

million, respectively,

FHLB Advances.

Notes Payable

The following table presents the composition of notes

payable at June 30, 2025 and December

31, 2024.

(In thousands)

June 30, 2025

December 31, 2024

Advances with the FHLB with maturities ranging from

2025

through

2029

paying interest at

monthly

fixed rates ranging from

0.57

% to

4.17

214,200

302,722

Unsecured senior debt securities maturing on

2028

paying interest

semi-annually

at a fixed rate of

7.25

%, net of debt issuance costs of $

4,135

395,865

395,198

Junior subordinated deferrable interest debentures (related to

trust preferred securities) maturing on

2034

with fixed interest rates ranging from

6.125

% to

6.564

%, net of debt issuance costs of $

248

198,386

198,373

Total notes payable

808,451

896,293

Note: Refer to the 2024 Form 10-K for rates information

at December 31, 2024.

A breakdown of borrowings by contractual maturities

at June 30, 2025 is included in the

table below.

Assets sold under

Short-term

(In thousands)

agreements to

repurchase

borrowings

Notes payable

Total

2025

56,043

550,000

55,692

661,735

2026

74,500

2028

440,215

2029

39,658

Later years

198,386

Total borrowings

56,043

550,000

808,451

1,414,494

At June 30, 2025 and

December 31, 2024, the Corporation had FHLB borrowing facilities whereby

the Corporation could borrow up

to $

4.8

billion and $

4.7

billion, respectively,

of which $

0.8

billion and $

0.5

billion, respectively,

were used. In addition,

at December

31, 2024,

the Corporation

had placed

0.3

billion of

the available

FHLB credit

facility as

collateral for

municipal letters

of credit

secure

deposits.

The

FHLB

borrowing

facilities

are

collateralized

with

securities

and

loans

held-in-portfolio,

and

not

have

restrictive covenants or callable features.

Also, at

June 30,

2025, the Corporation

had borrowing facilities

at the

discount window of

the Federal

Reserve Bank of

New York

amounting to

10.8

billion (December 31,

2024 -

7.0

billion), which remained

unused at June

30, 2025

and December

31, 2024.

The facilities are a collateralized source of credit

that is highly dependable even under difficult market conditions.

Note 16 − Other liabilities

The caption of other liabilities in the Consolidated

Statements of Financial Condition consists of the

following major categories:

(In thousands)

June 30, 2025

December 31, 2024

Accrued expenses

333,826

334,145

Accrued interest payable

63,307

60,723

Accounts payable

100,842

91,218

Dividends payable

47,826

49,546

Trades payable

593,949

495,139

Liability for GNMA loans sold with an option to repurchase

8,097

9,108

Reserves for loan indemnifications

2,331

2,779

Reserve for operational losses

28,699

29,465

Operating lease liabilities (Note 27)

98,575

103,198

Finance lease liabilities (Note 27)

21,316

23,141

Pension benefit obligation

5,684

5,816

Postretirement benefit obligation

98,219

99,172

Others

76,416

68,396

Total other liabilities

1,479,087

1,371,846

Note 17 – Stockholders’ equity

As of June 30, 2025, stockholders’ equity totaled $

6.0

billion. During the six months ended June 30, 2025, the Corporation declared

cash dividends of $

1.40

(2024 - $

1.24

) per common share amounting to

96.2

million (2024 - $

89.7

million). The quarterly dividend

of $

0.70

per share declared to stockholders of record as

of the close of business on

May 29, 2025

was paid on

July 1, 2025

During

the

quarter

ended

June

30,

2025,

the

Corporation

completed

the

repurchase

1,136,390

common

stock

for

112.0

million at an

average price of $

98.54

per share. As

of June 30, 2025,

a total of

451.5

million has been repurchased

under

the common stock repurchase program of up

to $

500

million announced by the Corporation on July

24, 2024.

On July 16, 2025, the Corporation announced the following actions as part of its capital plan: (i) an increase in

its quarterly common

stock dividend from $

0.70

per share to $

0.75

per share, beginning with the dividend payable in the fourth quarter of 2025, subject to

approval by its Board of Directors, and (ii) a new

common stock repurchase program of up to $

500

million.

Note 18 – Other comprehensive income

The following

table presents changes

in accumulated other

comprehensive income by

component for the

quarters and six

months

ended June 30, 2025 and 2024.

Changes in Accumulated Other Comprehensive Loss

by Component [1]

Quarters ended

Six

months ended

June 30,

(In thousands)

2025

2024

2025

2024

Foreign currency translation

Beginning Balance

(78,011)

(68,548)

(71,365)

(64,528)

Other comprehensive income (loss)

7,499

165

854

(3,855)

Net change

7,499

165

854

(3,855)

Ending balance

(70,512)

(68,383)

(70,511)

(68,383)

Adjustment of pension and

postretirement benefit plans

Beginning Balance

(93,271)

(115,632)

(94,692)

(117,894)

Amounts reclassified from accumulated other

comprehensive loss for amortization of net losses

1,420

2,261

2,841

4,522

Net change

1,420

2,261

2,841

4,522

Ending balance

(91,851)

(113,371)

(91,851)

(113,372)

Unrealized net holding losses

on debt securities

Beginning Balance

(1,318,705)

(1,749,006)

(1,495,183)

(1,713,109)

Other comprehensive income (loss)

48,417

16,941

188,646

(54,163)

Amounts reclassified from accumulated other

comprehensive loss for amortization of net unrealized

losses of debt securities transferred from available-for-

sale to held-to-maturity

36,994

35,537

73,242

70,745

Net change

85,411

52,478

261,888

16,582

Ending balance

(1,233,294)

(1,696,528)

(1,233,295)

(1,696,527)

Total

(1,395,657)

(1,878,282)

(1,395,657)

(1,878,282)

[1]

All amounts presented are net of tax.

The following

table presents

the amounts

reclassified out

of each

component of

accumulated other comprehensive

income during

the quarters and six months ended June 30, 2025

and 2024.

Reclassifications Out of Accumulated Other Comprehensive

Loss

Quarters ended

Six

months ended

Affected Line Item in the

June 30,

(In thousands)

Consolidated Statements of Operations

2025

2024

2025

2024

Adjustment of pension and postretirement benefit plans

Amortization of net losses

Other operating expenses

(2,272)

(3,618)

(4,545)

(7,236)

Total before tax

(2,272)

(3,618)

(4,545)

(7,236)

Income tax benefit

852

1,357

1,704

2,714

Total net of tax

(1,420)

(2,261)

(2,841)

(4,522)

Unrealized net holding losses on debt securities

Amortization of unrealized net losses of debt

securities transferred to held-to-maturity

Interest income from investment securities

(46,242)

(44,421)

(91,552)

(88,430)

Total before tax

(46,242)

(44,421)

(91,552)

(88,430)

Income tax expense

9,248

8,884

18,310

17,685

Total net of tax

(36,994)

(35,537)

(73,242)

(70,745)

Total reclassification

adjustments, net of tax

(38,414)

(37,798)

(76,083)

(75,267)

Note 19 – Guarantees

The Corporation

has obligations

upon the

occurrence of

certain events

under financial

guarantees provided

in certain

contractual

agreements.

Also,

from

time

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

credit

recourse

certain

representations

and

warranties

from

the

Corporation

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

repurchase the

loans under

the credit

recourse agreements

representation and

warranties

At June 30, 2025, the Corporation serviced $

460

million (December 31, 2024 - $

495

million) in residential mortgage loans subject to

credit recourse provisions, principally loans associated

with FNMA and FHLMC residential mortgage loan

securitization programs. In

the event

of any

customer default,

pursuant to

the credit

recourse provided,

the Corporation

is required

to repurchase

the loan

reimburse

the

third-party investor

for

the

loss

incurred. The

maximum

potential amount

future payments

that

the

Corporation

would be required

to make under

the recourse arrangements in

the event of

nonperformance by the

borrowers is equivalent to

the

total outstanding balance of the residential mortgage loans serviced with recourse and

interest, if applicable. During the quarter and

six

months

ended

June

30,

2025,

the

Corporation

repurchased

0.5

million

and

0.8

million,

respectively,

unpaid

principal

balance in mortgage loans subject

to the credit recourse provisions

(June 30, 2024

0.5

million and $

1.1

million, respectively).

the event

of nonperformance

by the

borrower,

the Corporation

has rights

to the

underlying collateral

securing the

mortgage loan.

The

Corporation suffers

ultimate losses

these

loans

when the

proceeds

from

a foreclosure

sale

the

property

underlying a

defaulted mortgage loan are less

than the outstanding principal balance of

the loan plus any uncollected interest

advanced and the

costs of holding

and disposing the related

property. At

June 30, 2025,

the Corporation’s liability

established to cover

the estimated

credit loss exposure related to loans sold or serviced

with credit recourse amounted to $

million (December 31, 2024 - $

million).

The following table shows the changes in the Corporation’s liability of estimated losses related to loans serviced with credit recourse

provisions during the quarters and six months ended

June 30, 2025 and 2024.

Quarters ended June 30,

Six months ended June 30,

(In thousands)

2025

2024

2025

2024

Balance as of beginning of period

2,397

4,353

2,611

4,211

Provision (benefit) for recourse liability

(205)

(204)

(375)

Net charge-offs

(21)

(91)

(65)

(193)

Balance as of end of period

2,171

4,058

2,171

4,058

From time

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

principal, interest,

taxes

and

insurance, if

such

payments have

not

been

received from

the

borrowers. At

June

30,

2025, the

Corporation serviced $

8.6

billion in mortgage loans for third-parties, including the loans serviced with credit recourse (December 31,

2024 - $

9.0

billion). The Corporation generally recovers funds advanced pursuant to these arrangements from

the mortgage owner,

from liquidation proceeds when the mortgage

loan is foreclosed or,

in the case of FHA/VA

loans, under the applicable FHA

and

insurance

and guarantees

programs. However,

in the

meantime, the

Corporation must

absorb the

cost

of the

funds

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.

addition,

defaulted

loan

not

cured,

the

mortgage

loan

would

canceled

part

the

foreclosure proceedings

and the

Corporation would

not receive

any future

servicing income

with respect

to that

loan. At

June 30,

2025,

the

outstanding balance

funds

advanced

the

Corporation under

such

mortgage

loan servicing

agreements was

million

(December

31,

2024

million).

the

extent

the

mortgage

loans

underlying

the

Corporation’s

servicing

portfolio

experience

increased delinquencies,

the

Corporation would

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 $

million at June 30, 2025 and December 31, 2024, respectively. In addition,

at both June

30, 2025 and December

31, 2024, PIHC fully

and unconditionally guaranteed on a

subordinated basis $

193

million of

capital securities

(trust preferred

securities) issued

by wholly-owned

issuing trust

entities to

the extent

set forth

in the

applicable

guarantee agreement. Refer to

Note 17 to

the Consolidated Financial Statements

in the 2024

Form 10-K for

further information on

the trust preferred securities.

Note 20 – Commitments and contingencies

Off-balance sheet risk

The Corporation

is a

party to

financial instruments

with off-balance

sheet credit

risk in

the normal

course of

business to

meet the

financial needs of its customers. These financial instruments

include loan commitments, letters of credit and standby

letters of credit.

These instruments involve,

to varying

degrees, elements of

credit and

interest rate

risk in

excess of

the amount

recognized in

the

Consolidated Statements of Financial Condition.

The

Corporation’s

exposure

credit

loss

the

event

nonperformance

the

other

party

the

financial

instrument

for

commitments to extend credit, standby

letters of credit and financial

guarantees is represented by the

contractual notional amounts

of those instruments. The

Corporation uses the same

credit policies in

making these commitments and conditional

obligations as it

does for those reflected on the Consolidated Statements

of Financial Condition.

Financial instruments with

off-balance sheet credit

risk, whose contract

amounts represent potential credit

risk as of

the end of

the

periods presented were as follows:

(In thousands)

June 30, 2025

December 31, 2024

Commitments to extend credit:

Credit card lines

6,201,145

5,599,823

Commercial lines of credit

4,271,702

3,971,331

Construction lines of credit

1,114,750

1,131,824

Other consumer unused credit commitments

271,638

260,121

Commercial letters of credit

10,284

5,002

Standby letters of credit

124,831

144,845

Commitments to originate or fund mortgage loans

17,556

29,604

At June

30, 2025

and December

31, 2024,

the Corporation

maintained a

reserve of

million and

million, respectively,

for

potential losses associated with unfunded loan commitments

related to commercial and construction lines of

credit.

Other commitments

At June

30, 2025

and December 31,

2024, the

Corporation also maintained

other non-credit

commitments for $

million, primarily

for the acquisition of other investments.

Business concentration

Since the Corporation’s business activities are concentrated primarily in Puerto Rico, its results of operations and financial condition

are dependent

upon the

general trends

of the

Puerto Rico

economy and,

in particular,

the residential

and commercial

real estate

markets. The concentration

of the Corporation’s

operations in Puerto Rico

exposes it to

greater risk than other

banking companies

with a wider geographic base. Its

asset and revenue composition by geographical area

is presented in Note 32

to the Consolidated

Financial Statements.

Puerto

Rico

has

faced

significant

fiscal

and

economic

challenges

for

over

decade.

response

such

challenges,

the

U.S.

Congress

enacted

PROMESA

2016,

which,

among

other

things,

established

the

Oversight

Board

and

framework

for

the

restructuring

the

debts

the

Commonwealth,

its

instrumentalities

and

municipalities.

The

Commonwealth

and

several

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.

June

30,

2025,

the

Corporation’s

direct

exposure

the

Puerto

Rico

government

and

its

instrumentalities and

municipalities

totaled

412

million,

which

362

million

were

outstanding

336

million

and

336

million

December

31,

2024).

The

Corporation’s exposure at

June 30, 2025

included up to

47.4

million in Automated Clearing

House (“ACH”) transaction settlement

exposure, none of

which was outstanding. Of

the amount outstanding,

351

million consists of

loans and $

million are securities

323

million and $

million at

December 31, 2024).

Substantially all of

the amount outstanding

at June 30,

2025 and December

31, 2024 were obligations from various Puerto Rico municipalities. In most cases, these were “general obligations” of a municipality,

which

the

applicable

municipality

has

pledged

its

good

faith,

credit

and

unlimited

taxing

power,

“special

obligations”

municipality,

which

the

applicable

municipality

has

pledged

other

revenues.

June

30,

2025,

approximately

the

Corporation’s exposure

to municipal loans

and securities was

concentrated in the

municipalities of San

Juan, Guaynabo,

Carolina

and Caguas.

The following table details the loans and investments representing the Corporation’s direct exposure to

the Puerto Rico government

according to their maturities as of June 30, 2025

(In thousands)

Investment

Portfolio

Loans

Total Outstanding

Total Exposure

Central Government

Within 1 year

47,403

After 10 years

Total Central

Government

47,443

Municipalities

Within 1 year

2,540

12,764

15,304

17,304

After 1 to 5 years

7,885

147,033

154,918

After 5 to 10 years

655

146,732

147,387

After 10 years

44,582

Total Municipalities

11,080

351,111

362,191

364,191

Total Direct Government

Exposure

11,123

351,111

362,234

411,634

In addition,

at June

30, 2025,

the Corporation had

212

million in

loans insured

or securities issued

by Puerto

Rico governmental

entities but for

which the principal

source of

repayment is non-governmental

220

million at December

31, 2024). These

included

168

million

residential

mortgage

loans

insured

the

Puerto

Rico

Housing

Finance

Authority

(“HFA”),

governmental

instrumentality

that

has

been

designated

covered

entity

under

PROMESA

(December

31,

2024

176

million).

These

mortgage loans

are secured

by first

mortgages on

Puerto Rico

residential properties

and the

HFA

insurance covers

losses in

the

event of

a borrower default

and upon

the satisfaction

of certain

other conditions. The

Corporation also had

at June

30, 2025,

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 -

million). In

the event

that the

mortgage loans

insured by

HFA

and held

by the

Corporation directly

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

honor

its

insurance

will

depend, among

other factors,

the

financial

condition

HFA

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

currently

authorized

local

legislation

impose

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

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

government

employees

and

retirees,

which

could

also

negatively

affected

fiscal

measures

such

employee

layoffs

furloughs or reductions in pension benefits.

addition,

2.3

billion

residential

mortgages

and

83.1

million

commercial

loans

were

insured

guaranteed

the

U.S.

Government or its agencies at June 30,

2025 (compared to $

2.1

billion and $

87.4

million, respectively, at December 31,

2024). The

Corporation also had U.S. Treasury and obligations from the U.S.

Government, its agencies or government sponsored

entities within

the

portfolio

available-for-sale

and

held-to-maturity

securities

described

Note

and

the

Consolidated

Financial

Statements.

June

30,

2025, the

Corporation had

operations

the

United States

Virgin

Islands

(the

“USVI”) and

had

million

direct

exposure to USVI government

entities (December 31, 2024

- $

million). The USVI has

been experiencing a number of

fiscal and

economic challenges that could adversely affect the ability

of its public corporations and instrumentalities

to service their outstanding

debt obligations.

At June 30,

2025, the Corporation had

operations in the British

Virgin Islands (“BVI”)

and it had

a loan portfolio

amounting to $

194

million comprised

of various

retail and

commercial clients,

compared to

a loan

portfolio of

196

million at

December 31,

2024. At

June 30, 2025, the Corporation had

significant exposure to a single borrower

in the BVI.

FDIC Special Assessment

November 16,

2023, the

Federal Deposit

Insurance Corporation

(“FDIC”)

imposed a

special

assessment (the

“FDIC Special

Assessment”) amount to

recover the losses

to the

deposit insurance fund

resulting from the

FDIC’s funds

used, in March

2023, in

connection with the systemic risk exception, to the least-cost resolution

test, under the Federal Deposit Insurance Act to manage the

receiverships of several failed banks. In connection with this assessment, the Corporation accrued $

71.4

million, $

45.3

million net of

tax, in the fourth quarter of 2023, representing

the full amount of the assessment.

During the first quarter of 2024, the Corporation recorded an additional expense of $

14.3

million, $

9.1

million net of tax, to reflect the

FDIC's higher loss estimate communicated

by the FDIC. The

special assessment amount and collection

period may change as

the

estimated loss is periodically adjusted or if the total amount

collected varies.

Legal Proceedings

The nature of Popular’s

business ordinarily generates claims, litigation, arbitration,

regulatory and governmental investigations, and

legal

and

administrative

cases

and

proceedings

(collectively,

“Legal

Proceedings”).

Popular’s

Legal

Proceedings

may

involve

various lines

of business

and include

claims relating

to contract,

torts, consumer

protection, securities,

antitrust, employment,

tax

and

other

laws.

The

recovery

sought

Legal

Proceedings

may

include

substantial

indeterminate

compensatory

damages,

punitive

damages,

injunctive

relief,

recovery

class-wide

basis.

When

the

Corporation

determines

that

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 $

to approximately $

7.1

million as of

June

30,

2025.

certain

cases, management

cannot

reasonably estimate

the

possible

loss

this

time.

Any

estimate involves

significant

judgment,

given

the

varying

stages

the

Legal

Proceedings

(including

the

fact

that

many

them

are

currently

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

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

has

already

accrued

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

the Corporation’s consolidated financial position for that period.

100

Note 21 – Non-consolidated variable interest

entities

The Corporation is involved with

two

statutory trusts which it created to issue trust preferred securities to the public. These

trusts are

deemed to

be variable

interest entities

(“VIEs”) since

the equity

investors at

risk have

no substantial

decision-making rights.

The

Corporation does not

hold any variable

interest in the

trusts, and therefore,

cannot be the

trusts’ primary beneficiary.

Furthermore,

the

Corporation concluded

that

it did

not

hold

controlling financial

interest

these

trusts

since the

decisions

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

securitization

transactions

with

FHLMC,

but

considers

its

exposure in the form of servicing fees and servicing advances not to be significant

at June 30, 2025

These special purpose entities

are deemed

to be

VIEs since

they lack

equity investments

at risk.

The Corporation’s

continuing involvement in

these guaranteed

loan securitizations includes owning certain beneficial interests

in the form of securities as

well as the servicing rights

retained. The

Corporation is

not required to

provide additional financial

support to

any of

the variable

interest entities

to which

it has

transferred

the

financial

assets.

The

mortgage-backed

securities,

the

extent

retained,

are

classified

the

Corporation’s

Consolidated

Statements

Financial

Condition

available-for-sale

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

these

VIEs

the

form

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

has

other

form

continuing

involvement. Refer

Note

the

Consolidated

Financial

Statements

for

additional

information on the

debt securities outstanding at

June 30, 2025

and December 31,

2024, which are

classified as available-for-sale

and

trading

securities

the

Corporation’s

Consolidated

Statements

Financial

Condition.

addition,

the

Corporation

holds

variable

interests

the

form

servicing

fees,

since

retains

the

right

service

the

transferred

loans

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

non-consolidated VIEs

and the

maximum exposure

to loss

as a

result of

the Corporation’s

involvement as

servicer of

GNMA and

FNMA loans at June 30, 2025 and December 31,

2024.

101

(In thousands)

June 30, 2025

December 31, 2024

Assets

Servicing assets:

Mortgage servicing rights

79,881

84,356

Total servicing

assets

79,881

84,356

Other assets:

Servicing advances

5,598

6,112

Total other assets

5,598

6,112

Total assets

85,479

90,468

Maximum exposure to loss

85,479

90,468

The size of

the non-consolidated VIEs,

in which the

Corporation has a

variable interest in

the form

of servicing fees,

measured as

the total unpaid principal balance of the loans,

amounted to $

6.3

billion at June 30, 2025 (December 31, 2024 -

6.6

billion).

The Corporation

determined that

the maximum

exposure to

loss includes

the fair

value of

the MSRs

and the

assumption that

the

servicing advances at June 30, 2025 and December 31, 2024, will not be recovered. The agency debt securities are not included as

part of the maximum exposure to loss since they

are guaranteed by the related agencies.

ASU 2009-17 requires that an ongoing primary beneficiary assessment should be made to determine whether the Corporation is the

primary beneficiary of any of the VIEs it is

involved with. The conclusion on the assessment of these non-consolidated VIEs has not

changed

since

their

initial

evaluation.

The

Corporation

concluded

that

still

not

the

primary

beneficiary

these

VIEs,

and

therefore, these VIEs are not required to be consolidated

in the Corporation’s financial statements at June 30, 2025.

102

Note 22 – Related party transactions

Centro Financiero BHD, S.A.

At June 30, 2025, the Corporation had

15.63

% equity interest in Centro Financiero BHD,

S.A. (“BHD”), one of the largest banking

and financial

services groups

in the

Dominican Republic.

During the

six months

ended June

30, 2025,

the Corporation

recorded

13.0

million in equity

pickup (June 30,

2024 - $

17.4

million), including the

net impact of

19.9

million from net

earnings (June 30,

2024 - $

22.0

million), offset by ($

6.9

) million recorded through Other Comprehensive Income (June 30, 2024 - ($

4.6

) million) related

foreign

currency

translation adjustments

and

changes

the

fair value

available

for

sale

securities.

June

30,

2025,

the

investment in BHD had a carrying amount of

232.5

million (December 31, 2024 - $

239.5

million) and the Corporation received $

million in cash dividend distributions during the

six months ended June 30, 2025 (June 30, 2024 - $

19.4

million).

103

Note 23 – Fair value measurement

ASC Subtopic

820-10 “Fair

Value

Measurements and

Disclosures” establishes

a fair

value hierarchy

that prioritizes

the inputs

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

- Unadjusted

quoted prices

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,

other inputs

that

are

observable

or that

can

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

observable

inputs

and

minimizes

the

use

unobservable

inputs

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

a recurring basis at June 30, 2025 and December

31, 2024:

104

At June 30, 2025

(In thousands)

Level 1

Level 2

Level 3

Measured at NAV

Total

RECURRING FAIR VALUE

MEASUREMENTS

Assets

Debt securities available-for-sale:

U.S. Treasury securities

7,908,859

7,503,937

15,412,796

Collateralized mortgage obligations - federal

agencies

110,432

Mortgage-backed securities

4,965,802

432

4,966,234

Other

750

Total debt securities

available-for-sale

7,908,859

12,580,171

1,182

20,490,212

Trading account debt securities, excluding

derivatives:

U.S. Treasury securities

5,813

5,823

Obligations of Puerto Rico, States and political

subdivisions

Collateralized mortgage obligations

615

Mortgage-backed securities

22,949

23,033

Other

122

Total trading account

debt securities, excluding

derivatives

5,813

23,624

206

29,643

Equity securities

47,009

447

47,456

Mortgage servicing rights

103,077

Loans held-for-sale

2,898

Derivatives

24,792

Total assets measured

at fair value on a

recurring basis

7,914,672

12,678,494

104,465

447

20,698,078

Liabilities

Derivatives

(23,349)

Total liabilities measured

at fair value on a

recurring basis

(23,349)

105

At December 31, 2024

(In thousands)

Level 1

Level 2

Level 3

Measured at NAV

Total

RECURRING FAIR VALUE

MEASUREMENTS

Assets

Debt securities available-for-sale:

U.S. Treasury securities

7,512,171

5,482,939

12,995,110

Collateralized mortgage obligations - federal

agencies

120,284

Mortgage-backed securities

5,127,775

484

5,128,259

Other

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

2,824

Obligations of Puerto Rico, States and political

subdivisions

Collateralized mortgage obligations

655

Mortgage-backed securities

29,032

29,116

Other

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

Loans held-for-sale

5,423

Derivatives

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)

Total liabilities measured

at fair value on a

recurring basis

(22,832)

Loans held-for-sale measured at fair value

Loans held-for-sale measured at fair value were priced

based on secondary market prices. These loans

are classified as Level 2.

The

following

tables summarize

the difference

between the

aggregate fair

value

and the

aggregate unpaid

principal

balance

for

mortgage loans originated as held-for-sale measured

at fair value as of June 30, 2025 and December

31, 2024.

(In thousands)

June 30, 2025

Aggregate Unpaid

Fair Value

Principal Balance

Difference

Loans held for sale

2,898

2,832

(In thousands)

December 31, 2024

Aggregate Unpaid

Fair Value

Principal Balance

Difference

Loans held for sale

5,423

5,436

(13)

loans held-for-sale were 90 or more days past

due or on nonaccrual status as of June 30,

2025 and December 31, 2024.

106

The fair value information included in the following tables is

not as of period end, but as of

the date that the fair value measurement

was recorded during the

six months ended June

30, 2025 and 2024

and excludes nonrecurring fair

value measurements of assets

no longer outstanding as of the reporting date.

Six months ended June 30, 2025

(In thousands)

Level 1

Level 2

Level 3

Total

NONRECURRING FAIR VALUE

MEASUREMENTS

Assets

Write-downs

Loans

[1]

4,361

(91)

Other real estate owned

[2]

3,919

(1,573)

Other foreclosed assets

[2]

162

(46)

Total assets measured

at fair value on a nonrecurring basis

8,442

(1,710)

[1] Relates mainly to certain impaired collateral dependent loans.

The impairment was measured based on the fair value

of the collateral, which is

derived from appraisals that take into consideration prices

in observed transactions involving similar assets in similar

locations. Costs to sell are

excluded from the reported fair value amount.

[2] Represents the fair value of foreclosed real estate and

other collateral owned that were written down to their fair

value. Costs to sell are

excluded from the reported fair value amount.

Six months ended June 30, 2024

(In thousands)

Level 1

Level 2

Level 3

Total

NONRECURRING FAIR VALUE

MEASUREMENTS

Assets

Write-downs

Loans

[1]

2,039

(329)

Loans held-for-sale

[2]

3,028

(38)

Other real estate owned

[3]

4,426

(1,602)

Other foreclosed assets

[3]

211

(46)

Total assets measured

at fair value on a nonrecurring basis

3,028

6,676

9,704

(2,015)

[1] Relates mainly to certain impaired collateral dependent loans.

The impairment was measured based on the fair value

of the collateral, which is

derived from appraisals that take into consideration prices

in observed transactions involving similar assets in similar

locations. Costs to sell are

excluded from the reported fair value amount.

[2] Relates to a quarterly valuation on loans held-for-sale.

Costs to sell are excluded from the reported fair value amount.

[3] Represents the fair value of foreclosed real estate and

other collateral owned that were written down to their fair

value. Costs to sell are

excluded from the reported fair value amount.

107

The following tables present the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the quarters

and six months ended June 30, 2025 and 2024.

Quarter ended June 30, 2025

MBS

Other

MBS

Other

classified

securities

classified

securities

as debt

classified as

as trading

classified

securities

debt securities

account

as trading

Mortgage

available-

debt

account debt

servicing

Total

(In thousands)

for-sale

securities

rights

assets

Balance at March 31, 2025

457

750

127

104,743

106,161

Gains (losses) included in earnings

(5)

(1,954)

(1,959)

Additions

288

Settlements

(25)

Balance at June 30, 2025

432

750

122

103,077

104,465

Changes in unrealized gains (losses) included in

earnings relating to assets still held at June 30,

2025

348

356

Six months ended June 30, 2025

MBS

Other

MBS

Other

classified

securities

classified

securities

as debt

classified as

as trading

classified

securities

debt securities

account

as trading

Mortgage

available-

debt

account debt

servicing

Total

(In thousands)

for-sale

securities

rights

assets

Balance at January 1, 2025

484

2,250

133

108,103

111,054

Gains (losses) included in earnings

(11)

(5,524)

(5,535)

Gains (losses) included in OCI

(2)

Additions

498

Settlements

(50)

Transfers out of Level 3

(1,500)

Balance at June 30, 2025

432

750

122

103,077

104,465

Changes in unrealized gains (losses) included in

earnings relating to assets still held at June 30,

2025

(977)

(961)

108

Quarter ended June 30, 2024

MBS

Other

classified

securities

MBS

securities

as debt

classified as

classified

securities

debt securities

as trading

Mortgage

available-

account debt

servicing

Total

(In thousands)

for-sale

securities

rights

assets

Balance at March 31, 2024

607

2,000

166

114,964

117,821

Gains (losses) included in earnings

(8)

(1,945)

(1,953)

Gains (losses) included in OCI

(1)

Additions

367

Settlements

(25)

Balance at June 30, 2024

581

2,000

158

113,386

116,209

Changes in unrealized gains (losses) included in

earnings relating to assets still held at June 30,

2024

500

510

Six months ended June 30, 2024

MBS

Other

classified

securities

CMOs

securities

as debt

classified as

classified

MBS

classified

securities

debt securities

as trading

classified as

as trading

Mortgage

available-

account debt

trading account

account debt

servicing

Total

(In thousands)

for-sale

securities

rights

assets

Balance at January 1,

2024

606

2,500

112

167

118,109

121,499

Gains (losses) included in earnings

(500)

(9)

(5,384)

(5,893)

Additions

661

Settlements

(25)

(5)

(28)

(58)

Balance at June 30, 2024

581

2,000

158

113,386

116,209

Changes in unrealized gains (losses)

included in earnings relating to assets

still held at June 30, 2024

(500)

(702)

(1,190)

109

Gains and losses (realized and

unrealized) included in earnings for the quarters

and six months ended June 30,

2025 and 2024 for

Level 3 assets and liabilities included in the

previous tables are reported in the Consolidated Statement

of Operations as follows:

Quarter ended June 30, 2025

Six months ended June 30, 2025

Changes in unrealized

Total gains

gains (losses) relating to

Total gains

gains (losses) relating to

(losses) included

assets still held at

(losses) included

assets still held at

(In thousands)

in earnings

reporting date

in earnings

reporting date

Mortgage banking activities

(1,954)

348

(5,524)

(977)

Trading account profit (loss)

(5)

(11)

Total

(1,959)

356

(5,535)

(961)

Quarter ended June 30, 2024

Six months ended June 30, 2024

Changes in unrealized

Total gains

gains (losses) relating to

Total gains

gains (losses) relating to

(losses) included

assets still held at

(losses) included

assets still held at

(In thousands)

in earnings

reporting date

in earnings

reporting date

Mortgage banking activities

(1,945)

500

(5,384)

(702)

Trading account profit (loss)

(8)

(9)

Provision for credit losses

(500)

Total

(1,953)

510

(5,893)

(1,190)

The following

tables include

quantitative information

about significant

unobservable inputs

used to

derive the

fair value

of Level

instruments, excluding those instruments

for which the

unobservable inputs were not

developed by the

Corporation such as

prices

of prior transactions and/or unadjusted third-party pricing

sources at June 30, 2025 and 2024.

Fair value at

June 30,

(In thousands)

2025

Valuation technique

Unobservable inputs

Weighted average (range) [1]

Other - trading

122

Discounted cash flow model

Weighted average life

years

Yield

.0%

Prepayment speed

10.8

Loans held-in-portfolio

4,361

[2]

External appraisal

Haircut applied on

external appraisals

5.0

[1]

Weighted average of significant unobservable inputs

used to develop Level 3 fair value measurements

were calculated by relative fair value.

[2]

Loans held-in-portfolio in which haircuts were not applied

to external appraisals were excluded from this table.

110

Fair value at

June 30,

(In thousands)

2024

Valuation technique

Unobservable inputs

Weighted average (range) [1]

Other - trading

158

Discounted cash flow model

Weighted average life

2.3

years

Yield

.0%

Prepayment speed

10.8

Loans held-in-portfolio

2,039

[2]

External appraisal

Haircut applied on

external appraisals

.0%

[1]

Weighted average of significant unobservable inputs

used to develop Level 3 fair value measurements

were calculated by relative fair value.

[2]

Loans held-in-portfolio in which haircuts were not applied

to external appraisals were excluded from this table.

111

Note 24 – Fair value of financial instruments

The fair

value of

financial instruments

is the

amount at

which an

asset or

obligation could

be exchanged

in a

current transaction

between

willing

parties,

other

than

forced

liquidation

sale.

For

those

financial

instruments

with

quoted

market

prices

available, fair values have been estimated using present

value calculations or other valuation techniques, as well

as management’s

best judgment with respect to current economic conditions, including discount rates, estimates of future cash flows, and prepayment

assumptions. Many of these

estimates involve various assumptions and

may vary significantly from

amounts that could be

realized

in actual transactions.

The fair

values reflected

herein have

been determined

based on

the prevailing

rate environment at

June 30,

2025 and

December

31, 2024, as applicable. In different interest rate environments,

fair value estimates can differ significantly, especially for certain fixed

rate

financial

instruments.

addition,

the

fair

values

presented

not

attempt

estimate

the

value

the

Corporation’s

fee

generating businesses

and anticipated

future business

activities, that

is, they

do not

represent the

Corporation’s value

as a

going

concern. There have been

no changes in the

Corporation’s valuation methodologies and inputs

used to estimate the

fair values for

each class of financial assets and liabilities not measured

at fair value.

The following tables present the

carrying amount and estimated fair

values of financial instruments with their

corresponding level in

the fair

value hierarchy.

The aggregate

fair value

amounts of

the financial

instruments disclosed

do not

represent management’s

estimate of the underlying value of the Corporation.

112

June 30, 2025

Carrying

Measured

(In thousands)

amount

Level 1

Level 2

Level 3

at NAV

Fair value

Financial Assets:

Cash and due from banks

400,631

Money market investments

6,340,786

6,330,415

10,371

6,340,786

Trading account debt securities, excluding

derivatives

[1]

29,643

5,813

23,624

206

29,643

Debt securities available-for-sale

[1]

20,490,212

7,908,859

12,580,171

1,182

20,490,212

Debt securities held-to-maturity:

U.S. Treasury securities

7,479,657

7,499,064

Obligations of Puerto Rico, States and political

subdivisions

48,598

6,820

42,361

49,181

Collateralized mortgage obligation-federal agency

1,510

1,312

Securities in wholly owned statutory business trusts

5,960

Total debt securities

held-to-maturity

7,535,725

7,513,156

42,361

7,555,517

Equity securities:

FHLB stock

66,152

FRB stock

101,252

Other investments

54,987

47,009

8,047

447

55,503

Total equity securities

222,391

214,413

8,047

447

222,907

Loans held-for-sale

2,898

Loans held-in-portfolio

37,415,693

36,611,781

Mortgage servicing rights

103,077

Derivatives

24,792

June 30, 2025

Carrying

Measured

(In thousands)

amount

Level 1

Level 2

Level 3

at NAV

Fair value

Financial Liabilities:

Deposits:

Demand deposits

57,618,705

Time deposits

9,598,786

9,378,576

Total deposits

67,217,491

66,997,281

Assets sold under agreements to repurchase

56,043

56,049

Other short-term borrowings

[2]

550,000

Notes payable:

FHLB advances

214,200

211,087

Unsecured senior debt securities

395,865

416,044

Junior subordinated deferrable interest debentures

(related to trust preferred securities)

198,386

187,515

Total notes payable

808,451

814,646

Derivatives

23,349

[1]

Refer to Note 23 to the Consolidated Financial Statements

for the fair value by class of financial asset and its hierarchy

level.

[2]

Refer to Note 15 to the Consolidated Financial Statements

for the composition of other short-term borrowings.

113

December 31, 2024

Carrying

Measured

(In thousands)

amount

Level 1

Level 2

Level 3

at NAV

Fair value

Financial Assets:

Cash and due from banks

419,638

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

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

Securities in wholly owned statutory business trusts

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

FRB stock

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

Loans held-in-portfolio

36,361,628

35,652,539

Mortgage servicing rights

108,103

Derivatives

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

Time deposits

9,012,882

8,795,803

Total deposits

64,884,345

64,667,266

Assets sold under agreements to repurchase

54,833

54,845

Other short-term borrowings

[2]

225,000

Notes payable:

FHLB advances

302,722

295,023

Unsecured senior debt securities

395,198

415,148

Junior subordinated deferrable interest debentures

(related to trust preferred securities)

198,373

189,758

Total notes payable

896,293

899,929

Derivatives

22,832

[1]

Refer to Note 23 to the Consolidated Financial Statements

for the fair value by class of financial asset and its hierarchy

level.

[2]

Refer to Note 15 to the Consolidated Financial Statements

for the composition of other short-term borrowings.

Refer

Note

the

Consolidated

Financial

Statements

for

the

notional

amount

commitments

extend

credit,

which

represents the unused portion of

credit facilities granted to customers,

and letters of credit,

which represent the contractual amount

that is required to be paid in the event of nonperformance, at June

30, 2025 and December 31, 2024. The fair value of commitments

extend credit

and

letters

credit,

which

are

based

the

fees

charged

enter

into

those

agreements, are

not

material

Popular’s financial statements.

114

Note 25 – Net income per common share

The following table sets

forth the computation of

net income per common

share (“EPS”), basic and

diluted, for the quarters

and six

months ended June 30, 2025 and 2024:

Quarters ended June 30,

Six

months ended June 30,

(In thousands, except per share information)

2025

2024

2025

2024

Net income

210,440

177,789

387,942

281,072

Preferred stock dividends

(353)

(706)

Net income applicable to common stock

210,087

177,436

387,236

280,366

Average common shares outstanding

68,050,361

71,970,773

68,661,851

71,920,254

Average potential dilutive common shares

29,288

21,138

25,808

17,180

Average common shares outstanding - assuming dilution

68,079,649

71,991,911

68,687,659

71,937,434

Basic EPS

3.09

2.47

5.64

3.90

Diluted EPS

3.09

2.46

5.64

3.90

For the quarters

and six months ended June 30, 2025 and 2024, the

Corporation calculated the impact of potential dilutive common

shares under the treasury stock method, consistent with the method used for the preparation of the financial statements for the year

ended December 31, 2024. For a discussion of the

calculation under the treasury stock method, refer

to Note 30 of the Consolidated

Financial Statements included in the 2024 Form 10-K.

115

Note 26 – Revenue from contracts with customers

The

following

table

presents

the

Corporation’s

revenue

streams

from

contracts

with

customers

reportable

segment

for

the

quarters and six months ended June 30, 2025 and

2024.

Quarter ended June 30,

Six

months ended June 30,

(In thousands)

2025

BPPR

Popular U.S.

BPPR

Popular U.S.

Service charges on deposit accounts

36,194

2,632

72,650

5,230

Other service fees:

Debit card fees

27,707

211

53,941

409

Insurance fees, excluding reinsurance

8,719

2,223

16,400

3,910

Credit card fees, excluding late fees and membership

fees

28,145

334

53,530

739

Sale and administration of investment products

9,058

18,031

Trust fees

6,879

13,510

Total revenue from

contracts with customers [1]

116,702

5,400

228,062

10,288

[1]

The amounts include intersegment transactions of $

0.6

million and $

1.2

million, respectively, for the

quarter and six months ended June 30, 2025.

Quarter ended June 30,

Six

months ended June 30,

(In thousands)

2024

BPPR

Popular U.S.

BPPR

Popular U.S.

Service charges on deposit accounts

35,055

2,471

70,071

4,897

Other service fees:

Debit card fees [2]

26,976

200

52,311

399

Insurance fees, excluding reinsurance

11,708

1,600

22,264

3,446

Credit card fees, excluding late fees and membership

fees [2]

26,125

368

50,639

826

Sale and administration of investment products

7,850

15,277

Trust fees

6,923

13,908

Total revenue from

contracts with customers [1]

114,637

4,639

224,470

9,568

[1]

The amounts include intersegment transactions of $

2.7

million and $

3.3

million, respectively, for the

quarter and six months ended June 30, 2024.

[2]

Effective in the third quarter of 2024, the Corporation

reclassified certain interchange fees, which were

previously included jointly with credit card fees

from common network activity,

as debit card fees. For the quarter and six month period

ended June 30, 2024, interchange fees of $

10.9

million and $

22.2

million were reclassified.

Revenue from contracts with

customers is recognized when,

or as, the performance

obligations are satisfied by

the Corporation by

transferring the promised services to the customers based on ASC 606 Revenue

from Contracts with Customers. Revenue streams

identified from contracts with customers, as

listed above, will have certain timing for

recognition based on the nature of

the contract

including when

the obligation is

satisfied and/or services

are rendered. Service

charges on

deposit accounts, debit

card fees,

and

credit card

fees are

recognized at

a point

in time,

upon the

occurrence of

an activity

or an

event. Interchange

fees on

debit and

credit

card

transactions

are

recognized upon

settlement

the

payment

transaction. For

details

over

nature

and

timing

revenue streams from contracts with customers refer to Note 31 on the

2024 Form 10-K for a complete description of the nature and

timing of revenue streams from contracts with customers.

116

Note 27 – Leases

The

Corporation enters

the

ordinary course

business

into

operating and

finance

leases

for

land,

buildings

and

equipment.

These contracts generally do not include purchase options or residual value guarantees.

The remaining lease terms of

0.11

29.5

years

considers options

extend the

leases for

years. The

Corporation identifies

leases when

has

both the

right to

obtain substantially all of the economic benefits from

the use of the asset and the right to direct

the use of the asset.

The Corporation

recognizes right-of-use

assets (“ROU

assets”) and

lease liabilities

related to

operating and

finance leases

in its

Consolidated Statements of Financial Condition under the caption of other assets and other liabilities, respectively. Refer to Note 12

and

Note

the

Consolidated Financial

Statements,

respectively,

for

information

the

balances of

these

lease

assets

and

liabilities.

The Corporation uses the incremental

borrowing rate for purposes of

discounting lease payments for operating and

finance leases,

since it

does not have

enough information to

determine the rates

implicit in the

leases. The discount

rates are based

on fixed-rate

and

fully

amortizing

borrowing

facilities

its

banking

subsidiaries

that

are

collateralized.

For

leases

held

non-banking

subsidiaries, a credit spread is added to this rate

based on financing transactions with a

similar credit risk profile.

The following table presents the undiscounted

cash flows of operating and finance leases for

each of the following periods:

June 30, 2025

(In thousands)

Remaining

2025

2026

2027

2028

2029

Later

Years

Total Lease

Payments

Less: Imputed

Interest

Total

Operating Leases

14,190

21,975

16,790

14,278

12,184

35,255

114,672

(16,097)

98,575

Finance Leases

2,242

4,222

2,927

2,592

2,415

9,530

23,928

(2,612)

21,316

The following table presents the lease cost recognized

by the Corporation in the Consolidated

Statements of Operations as follows:

Quarters ended June 30,

Six

months ended June 30,

(In thousands)

2025

2024

2025

2024

Finance lease cost:

Amortization of ROU assets

747

749

1,493

1,497

Interest on lease liabilities

190

226

390

463

Operating lease cost

7,599

7,650

15,148

15,338

Short-term lease cost

214

120

407

236

Variable lease cost

174

139

Sublease income

(20)

(21)

(40)

(41)

Total lease cost

[1]

8,819

8,794

17,572

17,632

[1]

Total lease cost

is recognized as part of net occupancy expense.

117

The

following

table

presents

supplemental

cash

flow

information

and

other

information

operating

and

finance

leases.

Six months ended June 30, 2025

(Dollars in thousands)

2025

2024

Cash paid for amounts included in the measurement of

lease liabilities:

Operating cash flows from operating leases

15,610

15,689

Operating cash flows from finance leases

389

463

Financing cash flows from finance leases

1,829

1,774

ROU assets obtained in exchange for new lease obligations:

Operating leases

5,832

1,463

Weighted-average remaining lease term:

Operating leases

7.5

years

7.2

years

Finance leases

7.9

years

8.0

years

Weighted-average discount rate:

Operating leases

3.5

3.3

Finance leases

3.5

3.8

118

Note 28 – Pension and postretirement benefits

The

Corporation

has

non-contributory

defined

benefit

pension

plan

and

supplementary

pension

benefit

restoration

plans

for

regular employees of

certain of its

subsidiaries (the “Pension

Plans”). The accrual

of benefits under

the Pension Plans

is frozen to

all

participants.

The

Corporation

also

provides

certain

postretirement

health

care

benefits

for

retired

employees

certain

subsidiaries (the “OPEB Plan”).

The components of net periodic cost for the

Pension Plans and the OPEB Plan for the periods presented

were as follows:

Pension Plans

OPEB Plan

Quarter ended June 30,

(In thousands)

2025

2024

2025

2024

Personnel Cost:

Service cost

Other operating expenses:

Interest cost

7,411

7,558

1,291

1,421

Expected return on plan assets

(8,069)

(8,594)

Amortization of prior service cost/(credit)

Amortization of net loss (gain)

3,449

4,166

(1,177)

(548)

Total net periodic

pension cost

2,791

3,130

129

905

Pension Plans

OPEB Plan

Six months ended June 30,

(In thousands)

2025

2024

2025

2024

Personnel Cost:

Service cost

Other operating expenses:

Interest cost

14,821

15,117

2,582

2,843

Expected return on plan assets

(16,138)

(17,188)

Amortization prior service cost/(credit)

Amortization of net loss

6,899

8,332

(2,354)

(1,096)

Total net periodic

pension cost

5,582

6,261

258

1,810

The

Corporation

paid

the

following

contributions

the

plans

for

the

six

months

ended

June

30,

2025

and

expects

pay

the

following contributions for the year ending December

31, 2025.

For the six months ended

For the year ending

(In thousands)

June 30, 2025

December 31, 2025

Pension Plans

114

227

OPEB Plan

3,223

5,428

119

Note 29 - Stock-based compensation

Incentive Plan

On May 12,

2020, the stockholders of

the Corporation approved the

Popular, Inc.

2020 Omnibus Incentive Plan,

which permits the

Corporation to

issue several

types of

stock-based compensation

to employees

and directors

of the

Corporation and/or

any of

its

subsidiaries (the

“2020 Incentive

Plan”). The

2020 Incentive

Plan replaced

the Popular,

Inc. 2004

Omnibus Incentive

Plan, which

was in effect

prior to the adoption of

the 2020 Incentive Plan (the

“2004 Incentive Plan” and, together

with the 2020 Incentive

Plan,

the “Incentive Plan”). Participants under the Incentive Plan are designated by the Talent and Compensation Committee of the Board

of Directors (or its delegate, as determined by the Board). Under the Incentive Plan, the Corporation has issued restricted stock and

performance shares to its employees and restricted

stock and restricted stock units (“RSUs”)

to its directors.

The restricted

stock granted

under the

Incentive Plan

to employees

becomes vested

based on

the employees’

continued service

with

Popular.

Unless otherwise stated in an agreement, the compensation cost associated with the shares of restricted stock

granted prior to 2021 was determined based on a two-prong vesting schedule. These grants include ratable vesting over five or four

years commencing at the date of grant (“the graduated vesting portion”) with a portion vested at termination of employment after

attainment of 55 years of age and 10 years of service or 60 years of age and 5 years of service (“the retirement vesting portion”).

The graduated vesting portion is accelerated at termination of employment after attaining the earlier of 55 years of age and 10 years

of service or 60 years of age and 5 years of service. Restricted stock granted on or after 2021 have ratable vesting in equal annual

installments over a period of 4 years or 3 years, depending on the classification of the employee. The vesting schedule is

accelerated at termination of employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age

and 5 years of service.

The

performance share

awards

granted

under

the

Incentive

Plan

consist

the

opportunity

receive

Popular,

Inc.’s

common stock provided that the Corporation achieves certain goals during a three-year performance cycle.

The goals will be based

two

metrics

weighted

equally:

the

Relative

Total

Shareholder

Return

(“TSR”)

and

the

Absolute

Return

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

activity

under

the

Incentive

Plan

for

members

management.

120

(Not in thousands)

Weighted-Average

Grant Date Fair

Value

Non-vested at December 31, 2023

299,896

58.20

Granted

242,474

86.62

Performance Shares Quantity Adjustment

(18,650)

87.79

Vested

(267,873)

74.26

Forfeited

(7,939)

50.68

Non-vested at December 31, 2024

247,908

66.86

Granted

241,762

100.67

Performance Shares Quantity Adjustment

48,923

92.33

Vested

(277,721)

90.69

Forfeited

(5,515)

60.68

Non-vested at June 30, 2025

255,357

77.90

During

the

quarter

ended

June

30,

2025,

121,649

restricted

stock

(June

30,

2024

–

97,732

)

were

awarded

management under the Incentive

Plan. During the

quarters ended June 30,

2025 and 2024,

performance shares were awarded

to management under the Incentive Plan.

During the six months ended June 30, 2025,

194,268

shares of restricted stock (June 30,

2024 –

175,591

) and

47,494

performance shares (June 30, 2024 -

65,225

) were awarded to management under the

Incentive Plan.

During the quarter ended June 30, 2025, the Corporation recognized

6.9

million of restricted stock expense related to management

incentive awards, with a tax benefit of $

1.0

million (June 30, 2024 - $

4.1

million, with a tax benefit of $

1.0

million). For the six months

ended

June

30,

2025,

the

Corporation

recognized

14.4

million

restricted

stock

expense

management

incentive

awards, with a tax benefit of $

1.6

million (June 30, 2024 - $

10.5

million, with a tax benefit of $

1.7

million). For the six months ended

June 30, 2025, the fair market value

of the restricted stock and performance shares vested

was $

20.0

million on the grant date and

27.4

million

vesting date.

This

differential

triggers

windfall of

2.7

million

that

was recorded

reduction on

income

tax

expense. During the

quarter ended June

30, 2025, the Corporation

recognized $

0.8

million of performance shares

expense, with a

tax benefit of $

thousand due to performance shares target

adjustment (June 30, 2024 -

(0.9)

million, with a tax benefit

of $

(55)

thousand).

For the six months ended June

30, 2025, the Corporation recognized $

4.2

million of performance shares expense, with

a tax benefit

of $

0.5

million (June 30,

2024 - $

4.1

million, with a

tax benefit of

0.3

million).

The total unrecognized compensation

cost related to non-vested restricted stock awards

and performance shares to members of management

at June 30, 2025 was $

17.6

million and is expected to be recognized over a

weighted-average period of

1.65

years.

The following table summarizes the restricted stock

activity under the Incentive Plan for members of

the Board of Directors:

(Not in thousands)

RSUs / Restricted stock

Weighted-Average Grant

Date Fair Value per Unit

Non-vested at December 31, 2023

Granted

25,462

89.51

Vested

(25,462)

89.51

Forfeited

Non-vested at December 31, 2024

Granted

22,050

99.42

Vested

(2,937)

92.45

Forfeited

Non-vested at June 30, 2025

19,113

99.42

The

equity

awards

granted to

members of

the Board

Directors of

Popular,

Inc.

(the

“Directors”) after

May

2025

will

vest

and

become non-forfeitable on the first anniversary of the grant date of

such award. Equity awards granted to the Directors may be

paid

in either common stock or RSUs, at each Director’s

election. If RSUs are elected, the Directors may defer the delivery of the shares

121

of common stock underlying

the RSUs award until

their retirement. To

the extent that cash

dividends are paid on

the Corporation’s

outstanding common stock, the Directors

will receive an additional number of RSUs

that reflect a reinvested dividend equivalent.

During the quarter ended June 30, 2025,

17,816

RSUs and

2,688

shares of restricted stock were granted to the Directors (June 30,

2024

20,411

RSUs

and

1,392

unrestricted stock)

and the

Corporation recognized

0.4

million

expense related

these shares with

a tax benefit

of $

thousand (June 30,

2024 - $

1.9

million with a

tax benefit of

0.4

million). For the

six months

ended June 30,

2025, the Corporation

granted

19,362

RSUs and

2,688

shares of restricted stock

to the Directors (June

30, 2024 -

21,606

RSUs

and

1,392

unrestricted

stock)

and

the

Corporation

recognized

0.7

million

expense

these

shares, with

a tax

benefit of $

0.1

million, (June

30, 2024

- $

2.1

million, with a

tax benefit of

0.4

million). The fair

value at vesting

date of the RSUs vested during the six months

ended June 30, 2025 for the Directors was

2.2

million.

122

Note 30 – Income taxes

The table below presents a reconciliation of

the statutory income tax rate to the effective income tax

rate:

Quarters ended

June 30, 2025

June 30, 2024

(In thousands)

Amount

% of pre-tax

income

Amount

% of pre-tax

income

Computed income tax expense at statutory rates

96,871

37.5

81,843

37.5

Net benefit of tax exempt income

(45,374)

(17.6)

(33,220)

(15.2)

Effect of income subject to preferential tax rate

(606)

(0.2)

1,272

0.6

Deferred tax asset valuation allowance

4,050

1.6

(235)

(0.1)

Difference in tax rates due to multiple jurisdictions

(2,282)

(0.9)

(4,456)

(2.1)

Other tax benefits

(4,500)

(2.1)

State and local taxes

414

0.1

2,204

1.0

Others

(5,189)

(2.0)

(2,449)

(1.1)

Income tax expense

47,884

18.5

40,459

18.5

Six months ended

June 30, 2025

June 30, 2024

(In thousands)

Amount

% of pre-tax

income

Amount

% of pre-tax

income

Computed income tax expense at statutory rates

180,333

37.5

141,412

37.5

Net benefit of tax exempt income

(85,329)

(17.7)

(61,979)

(16.4)

Effect of income subject to preferential tax rate

(1,519)

(0.3)

(148)

Deferred tax asset valuation allowance

7,932

1.6

2,328

0.6

Difference in tax rates due to multiple jurisdictions

(5,257)

(1.1)

(5,129)

(1.4)

Other tax benefits

(4,500)

(1.2)

Tax on intercompany

distributions

[1]

24,325

6.4

U.S., States, and local taxes

4,450

0.9

3,240

0.9

Others

(7,663)

(1.6)

(3,522)

(0.9)

Income tax expense

92,947

19.3

96,027

25.5

[1]

Includes $

16.5

million of out-of-period adjustment recorded during the

first quarter of 2024.

Deferred income taxes reflect the

net tax effects

of temporary differences between the

carrying amounts of assets and

liabilities for

financial reporting

purposes and

their tax

bases. Significant

components of

the Corporation’s

deferred tax

assets and

liabilities at

June 30, 2025, and December 31, 2024, were

as follows:

123

June 30, 2025

(In thousands)

Total

Deferred tax assets:

Tax credits available

for carryforward

4,861

32,925

37,786

Net operating loss and other carryforward available

59,441

594,642

654,083

Postretirement and pension benefits

28,197

Allowance for credit losses

245,070

28,339

273,409

Deferred loan origination fees/cost

3,005

(2,702)

303

Depreciation

7,700

7,551

15,251

FDIC-assisted transaction

152,665

Lease liability

27,417

13,953

41,370

Unrealized net loss on investment securities

202,822

15,914

218,736

Difference in outside basis from pass-through entities

53,043

Mortgage Servicing Rights

14,561

Other temporary differences

36,015

8,743

44,758

Total gross deferred

tax assets

834,797

699,365

1,534,162

Deferred tax liabilities:

Intangibles

90,392

57,493

147,885

Right of use assets

24,908

12,280

37,188

Loans acquired

17,471

Other temporary differences

7,138

429

7,567

Total gross deferred

tax liabilities

139,909

70,202

210,111

Valuation allowance

76,804

386,914

463,718

Net deferred tax asset

618,084

242,249

860,333

December 31, 2024

(In thousands)

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

Allowance for credit losses

247,153

24,415

271,568

Depreciation

7,700

7,229

14,929

FDIC-assisted transaction

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

Mortgage Servicing Rights

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

Other temporary differences

6,799

429

7,228

Total gross deferred

tax liabilities

134,469

72,894

207,363

Valuation allowance

69,837

386,914

456,751

Net deferred tax asset

671,394

253,362

924,756

124

The net

deferred tax

assets

shown in

the table

above at

June 30,

2025, is

reflected in

the Consolidated

Statements of

Financial

Condition as $

862.1

million in net

deferred tax assets

in the “Other assets”

caption (December 31,

2024 - $

926.3

million) and $

1.8

million in deferred tax liabilities in the “Other liabilities” caption

(December 31, 2024 - $

1.6

million), reflecting the aggregate deferred

tax assets or

liabilities of individual

tax-paying subsidiaries of the

Corporation in their

respective tax jurisdiction, Puerto

Rico or the

United States.

June

30,

2025,

the

net

deferred

tax

assets

the

U.S.

operations

amounted

629.1

million

with

valuation

allowance

386.9

million, for

net

deferred tax

assets

after valuation

allowance of

242.2

million. The

Corporation evaluates

quarterly

basis the

realization of

the deferred

tax asset

by taxing

jurisdiction.

The U.

S. operations

sustained profitability

for the

last three

years

and

better

results

than

projected

for

the

period

ended

June

30,

2025.

These

historical

financial

results

are

objectively

verifiable positive evidence, evaluated together

with the positive evidence

of stable credit metrics,

in combination with the

length of

the

expiration

the

NOLs.

the

other

hand,

the

Corporation

evaluated

the

negative

evidence

accumulated

over

the

years,

including financial results lower than expectations and challenges to the economy due to inflationary pressures that could stem from

U. S. tariff policies and global geopolitical challenges,

in addition to the economic effect of cuts in federal government spending that

could negatively impact U. S. operations’ achieving expected pre-tax

income levels.

As of June 30, 2025, after weighting all positive

and negative evidence,

the Corporation concluded

that it is

more likely than

not that $

242.2

million of the

deferred tax assets

from

the

U.S.

operations, comprised

mainly

net

operating losses,

will

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

book

income

adjusted

permanent

differences.

Management

will

continue

monitor

and

review

the

U.S.

operation’s

results, including recent earnings trends, the pre-tax earnings

forecast, any new tax initiative, and other factors,

including net income

versus forecast, targeted loan growth, net interest income margin, changes in deposit costs, allowance

for credit losses, charge offs,

non-performing loans

held-in-portfolio (“NPLs”)

inflows

and

non-performing asset

(“NPA”)

balances. Significant

changes

in these

factors or sustainable continuance of financial improvement

could impact the future realization of the deferred

tax assets.

At June 30,

2025, the Corporation’s

net deferred tax

assets related to

its Puerto Rico

operations amounted to

618.1

million.

The

Corporation’s Puerto Rico

Banking operation has

a historical record

of profitability.

This is considered

a strong piece

of objectively

verifiable positive evidence that outweighs any

negative evidence considered by Management in

the evaluation of the realization

the

deferred

tax

assets.

Based

this

evidence

and

management’s

estimate

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

future

years.

This

objectively

verifiable

negative

evidence is

considered

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,

the reporting

date,

that

likely

than

not that

the

Holding

Company will not be

able to realize any

portion of the deferred tax

assets. Accordingly, the

Corporation has maintained a valuation

allowance on the deferred tax assets of $

76.8

million as of June 30, 2025.

The reconciliation of unrecognized tax benefits, excluding

interest, was as follows:

(In millions)

2025

2024

Balance at January 1

1.5

Balance at March 31

1.5

Balance at June 30

1.5

At June

30, 2025,

the total

amount of

accrued interest

recognized in the

statement of

financial condition

amounted to

2.5

million

(December 31, 2024 -

2.4

million). Management determined that at

June 30, 2025 and December

31, 2024, there was

need to

accrue for the payment of

penalties. The Corporation’s policy is to

report interest related to unrecognized tax benefits

in income tax

expense, while the penalties, if any, are reported in other operating expenses

in the Consolidated Statements of Operations.

After consideration

of the

effect on

U.S. federal

tax of

unrecognized U.S.

state tax

benefits, the

total amount

of unrecognized

tax

benefits that if recognized, would affect the Corporation’s effective tax rate, was $

3.0

million at June 30, 2025 (December 31, 2024 -

3.0

million).

125

The amount of

unrecognized tax benefits

may increase or

decrease in the

future for various

reasons including adding amounts

for

current

tax

year

positions,

expiration

open

income

tax

returns

due

the

statutes

limitation,

changes

Management’s

judgment about

the level

of uncertainty,

status of

examinations, litigation

and legislative

activity and

the addition

or elimination

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.

June

30,

2025,

the

following

years

remain

subject

examination

the

U.S.

Federal jurisdiction: 2021 and thereafter; and in

the Puerto Rico jurisdiction, 2018 and thereafter.

126

Note 31 – Supplemental disclosure on the consolidated

statements of cash flows

Additional disclosures on cash flow information and

non-cash activities for the six months ended June

30, 2025 and June 30, 2024

are listed in the following table:

(In thousands)

June 30, 2025

June 30, 2024

Non-cash activities:

Loans transferred to other real estate

14,006

25,922

Loans transferred to other property

45,065

38,867

Total loans transferred

to foreclosed assets

59,071

64,789

Loans transferred to other assets

26,604

25,427

Financed sales of other real estate assets

2,580

6,220

Financed sales of other foreclosed assets

29,089

26,894

Total financed sales

of foreclosed assets

31,669

33,114

Financed sale of premises and equipment

29,727

38,715

Transfers from loans held-in-portfolio to

loans held-for-sale

2,662

7,505

Transfers from loans held-for-sale to loans

held-in-portfolio

1,224

2,896

Loans securitized into investment securities

[1]

6,852

4,806

Trades receivable from brokers and counterparties

26,198

Trades payable to brokers and counterparties

593,949

24,603

Net change in receivables from investments maturities

14,377

124,000

Recognition of mortgage servicing rights on securitizations

or asset transfers

498

661

Loans booked under the GNMA buy-back option

3,339

3,437

Capitalization of lease right of use asset

9,143

1,946

[1]

Includes loans securitized into trading securities and subsequently

sold before quarter end.

The following table provides a reconciliation of

cash and due from banks, and restricted cash

reported within the Consolidated

Statement of Financial Condition that sum to the total of

the same such amounts shown in the Consolidated

Statement of Cash

Flows.

(In thousands)

June 30, 2025

June 30, 2024

Cash and due from banks

394,211

348,170

Restricted cash and due from banks

6,420

11,803

Restricted cash in money market investments

10,371

7,286

Total cash and due

from banks, and restricted cash

[2]

411,002

367,259

[2]

Refer to Note 4 - Restrictions on cash and due from banks

and certain securities for nature of restrictions.

127

Note 32 – Segment reporting

The

Corporation’s

corporate

structure

consists

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

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.

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

the

individual

operating

segments

are

the

same

those

the

Corporation.

Transactions

between

reportable segments are primarily conducted at market rates, resulting

in profits that are eliminated for reporting consolidated results

operations. Assets

representing transactions

between reportable

segments

the

Corporate

group

are

also

eliminated in

the

tables presented below.

The tables that follow present the results of operations

and total assets by reportable segments:

128

2025

For the quarter ended June 30, 2025

Intersegment

(In thousands)

BPPR

Popular U.S.

Eliminations

Interest income

748,712

195,668

(1,041)

Interest expense

210,237

93,474

(1,041)

Net interest income

538,475

102,194

Provision for credit losses

42,452

6,532

Non-interest income

145,685

7,421

Personnel costs

164,794

27,387

Professional fees

13,025

2,450

Technology and

software expenses

64,226

10,345

Processing and transactional services

37,276

582

Amortization of intangibles

240

145

Depreciation expense

10,344

2,266

Other operating expenses

[1]

132,004

28,021

Total operating

expenses

421,909

71,196

Income before income tax

219,799

31,887

Income tax expense

35,256

9,280

Net income

184,543

22,607

Segment assets

60,926,458

14,865,364

(120,633)

For the quarter ended June 30, 2025

Reportable

(In thousands)

Segments

Corporate

Eliminations

Total Popular,

Inc.

Interest income

943,339

1,578

(1,045)

943,872

Interest expense

302,670

10,698

(1,045)

312,323

Net interest income (expense)

640,669

(9,120)

631,549

Provision for credit losses (benefit)

48,984

(43)

48,941

Non-interest income

153,106

16,107

(736)

168,477

Personnel costs

192,181

37,174

229,355

Professional fees

15,475

12,887

(254)

28,108

Technology and

software expenses

74,571

10,125

84,696

Processing and transactional services

37,858

37,861

Amortization of intangibles

385

Depreciation expense

12,610

429

13,039

Other operating expenses

[1]

160,025

(60,181)

(527)

99,317

Total operating

expenses

493,105

437

(781)

492,761

Income before income tax

251,686

6,593

258,324

Income tax expense

44,536

3,277

47,884

Net income

207,150

3,316

(26)

210,440

Segment assets

75,671,189

5,786,893

(5,392,992)

76,065,090

[1]

Other operating expenses includes net occupancy expenses,

equipment expense, excluding depreciation, other operating

taxes,

communications expense, business promotion expenses, deposit

insurance costs and OREO expenses.

129

For the six months ended June 30, 2025

Intersegment

(In thousands)

BPPR

Popular U.S.

Eliminations

Interest income

1,480,600

382,060

(2,722)

Interest expense

420,233

186,924

(2,722)

Net interest income

1,060,367

195,136

Provision for credit losses

95,964

17,142

Non-interest income

283,190

13,564

Personnel costs

316,078

52,829

Professional fees

26,084

5,189

Technology and

software expenses

128,377

20,433

Processing and transactional services

74,455

1,179

Amortization of intangibles

582

400

Depreciation expense

20,038

4,463

Other operating expenses

[1]

260,758

53,640

Total operating

expenses

826,372

138,133

Income before income tax

421,221

53,425

Income tax expense

70,699

16,002

Net income

350,522

37,423

Segment assets

60,926,458

14,865,364

(120,633)

For the six months ended June 30, 2025

Reportable

Total

(In thousands)

Segments

Corporate

Eliminations

Popular, Inc.

Interest income

1,859,938

3,114

(2,182)

1,860,870

Interest expense

604,435

21,471

(2,182)

623,724

Net interest income (expense)

1,255,503

(18,357)

1,237,146

Provision for credit losses (benefit)

113,106

(84)

113,022

Non-interest income

296,754

25,136

(1,352)

320,538

Personnel costs

368,907

73,161

442,068

Professional fees

31,273

24,244

(584)

54,933

Technology and

software expenses

148,810

19,554

168,364

Processing and transactional services

75,634

75,642

Amortization of intangibles

982

Depreciation expense

24,501

818

25,319

Other operating expenses

[1]

314,398

(116,583)

(1,350)

196,465

Total operating

expenses

964,505

1,202

(1,934)

963,773

Income before income tax

474,646

5,661

582

480,889

Income tax expense

86,701

5,952

294

92,947

Net income (loss)

387,945

(291)

288

387,942

Segment assets

75,671,189

5,786,893

(5,392,992)

76,065,090

[1]

Other operating expenses includes net occupancy expenses,

equipment expense, excluding depreciation, other operating taxes,

communications expense, business promotion expenses, deposit

insurance costs and OREO expenses.

130

2024

For the quarter ended June 30, 2024

Intersegment

(In thousands)

BPPR

Popular U.S.

Eliminations

Interest income

737,342

186,595

(2,622)

Interest expense

248,597

100,744

(2,622)

Net interest income

488,745

85,851

Provision for credit losses (benefit)

50,382

(3,563)

Non-interest income

152,354

6,000

Personnel costs

145,764

26,062

Professional fees

14,568

3,154

Technology and

software expenses

60,256

9,784

Processing and transactional services

38,537

555

Amortization of intangibles

424

310

Depreciation expense

13,317

2,204

Other operating expenses

[1]

127,106

27,608

Total operating

expenses

399,972

69,677

Income before income tax

190,745

25,737

Income tax expense

33,540

7,989

Net income

157,205

17,748

Segment assets

58,464,408

14,287,739

(264,040)

For the quarter ended June 30, 2024

Reportable

(In thousands)

Segments

Corporate

Eliminations

Total Popular,

Inc.

Interest income

921,315

4,390

(3,798)

921,907

Interest expense

346,719

10,674

(3,798)

353,595

Net interest income (expense)

574,596

(6,284)

568,312

Provision for credit losses (benefit)

46,819

(25)

46,794

Non-interest income

158,354

10,716

(2,764)

166,306

Personnel costs

171,826

25,598

197,424

Professional fees

17,722

20,324

(302)

37,744

Technology and

software expenses

70,040

9,712

79,752

Processing and transactional services

39,092

39,096

Amortization of intangibles

734

Depreciation expense

15,521

367

15,888

Other operating expenses

[1]

154,714

(54,854)

(922)

98,938

Total operating

expenses

469,649

1,151

(1,224)

469,576

Income before income tax

216,482

3,306

(1,540)

218,248

Income tax expense (benefit)

41,529

(476)

(594)

40,459

Net income

174,953

3,782

(946)

177,789

Segment assets

72,488,107

5,828,667

(5,471,702)

72,845,072

[1]

Other operating expenses includes net occupancy expenses,

equipment expense, excluding depreciation, other operating taxes,

communications expense, business promotion expenses, deposit

insurance costs and OREO expenses.

131

For the six months ended June 30, 2024

Intersegment

(In thousands)

BPPR

Popular U.S.

Eliminations

Interest income

1,451,330

369,478

(5,909)

Interest expense

489,744

198,774

(5,909)

Net interest income

961,586

170,704

Provision for credit losses

111,062

7,872

Non-interest income

298,023

13,120

(56)

Personnel costs

298,690

53,206

Professional fees

26,936

6,633

(56)

Technology and

software expenses

123,440

18,684

Processing and transactional services

72,091

1,188

Amortization of intangibles

908

621

Depreciation expense

26,326

4,147

Other operating expenses

[1]

258,879

55,240

Total operating

expenses

807,270

139,719

(56)

Income before income tax

341,277

36,233

Income tax expense

62,746

11,445

Net income

278,531

24,788

Segment assets

58,464,408

14,287,739

(264,040)

For the six months ended June 30, 2024

Reportable

Total

(In thousands)

Segments

Corporate

Eliminations

Popular, Inc.

Interest income

1,814,899

8,189

(7,040)

1,816,048

Interest expense

682,609

21,423

(7,040)

696,992

Net interest income (expense)

1,132,290

(13,234)

1,119,056

Provision for credit losses (benefit)

118,934

458

119,392

Non-interest income

311,087

22,438

(3,401)

330,124

Personnel costs

351,896

60,905

412,801

Professional fees

33,513

33,728

(579)

66,662

Technology and

software expenses

142,124

17,090

159,214

Processing and transactional services

73,279

73,290

Amortization of intangibles

1,529

Depreciation expense

30,473

776

31,249

Other operating expenses

[1]

314,119

(104,339)

(1,836)

207,944

Total operating

expenses

946,933

8,171

(2,415)

952,689

Income before income tax

377,510

575

(986)

377,099

Income tax expense (benefit)

74,191

22,200

(364)

96,027

Net income

303,319

(21,625)

(622)

281,072

Segment assets

72,488,107

5,828,667

(5,471,702)

72,845,072

[1]

Other operating expenses includes net occupancy expenses,

equipment expense, excluding depreciation, other operating taxes,

communications expense, business promotion expenses, deposit

insurance costs and OREO expenses.

132

Geographic Information

The following information presents selected

financial information based on the

geographic location where the Corporation conducts

its business. The

banking operations of BPPR

are primarily based in

Puerto Rico, where it

has the largest retail

banking franchise.

BPPR

also

conducts

banking

operations

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

periodic loan

participations with

PB.

During

the

six

months

ended

June

30,

2025,

BPPR

participated

loans

originated

totaling

million

(2024

did

participate). Total

assets for

the BPPR

segment related

to its

operations in the

United States

amounted to

1.4

billion (December

31, 2024

- $

1.6

billion), including $

104

million in

multifamily loans (December

31, 2024

- $

104

million), $

435

million in commercial

real estate loans (December 31, 2024 - $

588

million), $

689

million in C&I loans (December 31, 2024 - $

685

million), and $

million

in unsecured personal loans

(December 31, 2024 -

113

million). During the six

months ended June 30,

2025, the BPPR segment

generated $

51.4

million (June 30, 2024 - $

60.1

million) in revenues from its operations in the United States, mainly from net interest

income. In the

Virgin Islands, the BPPR

segment offers banking

products, including loans and

deposits. Total

assets for the BPPR

segment related to

its operations in

the U.S. and

British Virgin Islands

amounted to $

1.1

billion (December 31, 2024

- $

1.0

billion).

The BPPR segment generated $

25.0

million in revenues during the six months ended June 30, 2025 (June 30, 2024 - $

21.3

million)

from its operations in the U.S. and British

Virgin Islands.

Geographic Information

Quarter ended

Six months ended

(In thousands)

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Revenues:

[1]

Puerto Rico

636,232

586,338

1,246,193

1,152,082

United States

139,274

127,011

266,490

253,752

Other

24,520

21,269

45,001

43,346

Total consolidated

revenues

800,026

734,618

1,557,684

1,449,180

[1]

Total revenues include

net interest income, service charges on deposit accounts,

other service fees, mortgage banking activities, net

gain (loss),

including impairment, on equity securities, net gain on trading

account debt securities, adjustments to indemnity reserves

on loans sold, and

other operating income.

Selected Balance Sheet Information:

(In thousands)

June 30, 2025

December 31, 2024

Puerto Rico

Total assets

58,522,143

55,888,211

Loans

24,979,110

24,154,610

Deposits

53,876,271

52,099,309

United States

Total assets

16,236,670

15,890,339

Loans

12,686,305

12,431,859

Deposits

11,529,189

11,030,879

Other

Total assets

1,306,277

1,266,833

Loans

522,661

526,606

Deposits

[1]

1,812,031

1,754,157

[1]

Represents deposits from BPPR operations located in the

U.S. and British Virgin Islands.

133

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

This

report

includes

management’s

discussion

and

analysis

(“MD&A”)

the

consolidated

financial

position

and

financial

performance

Popular,

Inc.

(the

“Corporation”

“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.

the

U.S.

mainland,

the

Corporation

provides

retail,

mortgage, and commercial

banking services, as

well as

equipment leasing and

financing, through its

New York

-chartered banking

subsidiary, Popular Bank (“PB” or “Popular U.S.”), which has branches located in New York,

New Jersey and Florida. Note 32 to the

Consolidated Financial Statements presents information

about the Corporation’s business segments.

As a financial services company,

the Corporation’s earnings are significantly affected

by general business and economic conditions

in the

markets which

we serve.

Lending and

deposit activities

and fee

income generation

are influenced

by the

level of

business

spending and

investment, consumer

income, spending

and savings,

capital market

activities, competition,

customer preferences,

interest rate conditions and prevailing market rates

on competing products.

The Corporation

operates in

a highly

regulated environment

and may

be adversely

affected by

changes in

federal and

local laws

and

regulations.

Also,

competition

with

other

financial

institutions,

well

with

non-traditional financial

service

providers

and

technology

companies

that

provide

electronic

and

internet-based

financial

solutions

and

services,

could

adversely

affect

its

profitability.

The

Corporation

continuously

monitors

general

business

and

economic

conditions,

industry-related

indicators

and

trends,

competition, interest rate volatility, credit quality indicators, loan, and deposit demand, operational and systems efficiencies, revenue

enhancements and changes in the regulation of financial

services companies.

The description of the Corporation’s business contained in

Item 1 of the 2024 Form 10-K, while not all inclusive,

discusses additional

information about the business of the Corporation. Readers should also refer to “Part I - Item 1A” of the 2024 Form 10-K and “Part II

- Item 1A” of this Form 10-Q for a discussion of certain risks and uncertainties to which the Corporation is subject, many beyond the

Corporation’s control that, in addition to the other information in

this Form 10-Q, readers should consider.

The Corporation’s common stock is traded on the NASDAQ

Global Select Market under the symbol BPOP.

SIGNIFICANT EVENTS

Capital Actions

On July 16, 2025, the Corporation announced

the following capital actions:

●

an increase

in the

Corporation’s quarterly

common stock

dividend from

$0.70 to

$0.75 per

share, commencing

with the

dividend payable in the fourth quarter of 2025,

subject to the approval by the Corporation’s Board of Directors;

and

●

a new common stock repurchase program of up

to $500 million.

This new common stock repurchase program is in addition

to the $500 million common stock repurchase program

announced by the

Corporation on July 24, 2024 (the “2024

Repurchase Program”).

The

Corporation’s

planned

common

stock

repurchases

may

executed

open

market

transactions,

privately

negotiated

transactions, block trades

or any other

manner determined by

the Corporation. The

timing, quantity and

price of such

repurchases

will

subject

various

factors,

including

market

conditions,

the

Corporation’s

capital

position

and

financial

performance,

the

capital impact of strategic initiatives and regulatory and tax considerations.

The common stock repurchase program does not require

134

the Corporation to acquire a specific dollar amount or

number of shares and may be modified, suspended or terminated

at any time

without prior notice.

During

the

quarter

and

six

months

ended

June

30,

2025,

the

Corporation

repurchased

1,136,390

common

stock

for

$112.0 million at an average price of $98.54 per share and 2,406,959 shares

of common stock for $234.2 million at an average price

of $97.32 per share, respectively.

As of June 30, 2025, the

Corporation had repurchased a total of approximately 4.7 million

of common stock for $451.5

million as part of the 2024 Repurchase

Program.

OVERVIEW

Financial highlights for the quarter ended June 30,

2025

The Corporation’s

net income for

the quarter

ended June 30,

2025 amounted to

$210.4 million, an

increase of

$32.6 million when

compared to a net income of $177.8 million for the quarter ended June 30, 2024. Higher net income was mainly driven by higher net

interest income, offset in part by an increase in operating

expense and income tax expense.

Financial highlights for the quarter ended June 30,

2025 include:

●

Net interest income

amounted to $631.5

million, an increase

of $63.2 million

when compared to

the quarter

ended June

30, 2024, driven by

loan growth and higher

deposits,

higher volume of U.S.

Treasuries with higher

yields, and lower cost

deposits,

mainly

P.R.

public

deposits

and

re-pricing

PB,

partially

offset

lower

income

from

money

market

securities. Net interest margin expanded by 27 bps to 3.49%. On a taxable

equivalent basis, net interest margin expanded

by 37 basis points to 3.85% driven by tax-exempt

investment securities at higher yields.

●

The provision for credit losses amounted to $48.9 million

for the quarter ended June 30, 2025,

an increase of $2.1 million

when

compared

the

quarter

ended

June

30,

2024,

driven

additional

reserves

the

commercial

loans

portfolio,

specifically in Commercial

Real Estate portfolio in

the PB segment

due to higher

qualitative reserves and changes

in the

macroeconomic

scenario,

partially

offset

lower

provision

the

BPPR

segment

due

lower

net

charge-offs

and

improvements of credit quality in the commercial

portfolio.

●

Non-interest income

amounted to

$168.5 million,

an increase

of $2.2

million when

compared to

the quarter

ended June

30, 2024, mainly driven by higher

credit and debit card fee income,

higher investment management fees,

and a favorable

fair value

adjustment of

equity securities held

for deferred

benefit plans,

partially offset

by lower

other operating

income

mainly related to the daily rental car business sold

during the fourth quarter of 2024.

●

Operating expenses amounted to $492.8 million for

the quarter, reflecting

an increase of $23.2 million when

compared to

the quarter

ended June

30, 2024.

The increase

was driven

mainly by

higher personnel

costs due

to higher

incentives,

partially offset by lower professional fees.

●

Income tax expense of

$47.9 million with an

effective tax rate

(“ETR”) of 18.5% during

the quarter ended June

30, 2025,

compared to an income tax expense of $40.5

million with an ETR of 18.5% for the quarter ended

June 30, 2024.

●

At June

30, 2025,

the Corporation’s

total assets

amounted to

$76.1 billion,

compared to

$73.0 billion

at December

31,

2024. The

increase of

$3.1 billion

is primarily

due to

higher balance

in the

available-for-sale (“AFS”)

securities portfolio

and an

increase across

most loan

portfolios,

mainly in

commercial, mortgage,

and construction,

partially offset

by lower

balance in the held-to-maturity (“HTM”) investment

securities, money market investments, and a decrease in

other assets.

●

Deposits amounted to $67.2

billion at June 30, 2025,

an increase of $2.3

billion from December 31, 2024,

driven by P.R.

public deposits.

●

Stockholders’

equity

amounted

$6.0

billion

June

30,

2025,

compared

$5.6

billion

December 31,

2024.

The

Corporation and its

banking subsidiaries continue

to be

well capitalized. As

of June

30, 2025, the

Corporation’s tangible

book value

per common

share was

$75.41, an

increase of

$7.25 from

December 31,

2024. The

Common Equity

Tier

Capital ratio at June 30, 2025 was 15.91%,

compared to 16.03% at December 31, 2024.

Refer to Table 1 for selected financial data for the quarters ended June 30, 2025 and June

30, 2024.

135

Table 1 - Financial Highlights

Financial Condition Highlights

Ending balances at

Average for the six months ended

(In thousands)

June 30, 2025

December 31,

2024

Variance

June 30,

2025

June 30,

2024

Variance

Money market investments

6,340,786

6,380,948

(40,162)

6,314,487

6,477,180

(162,693)

Investment securities

28,283,970

26,244,977

2,038,993

28,642,361

28,034,347

608,014

Loans

[1]

38,188,076

37,113,075

1,075,001

37,310,383

35,226,488

2,083,895

Earning assets

72,812,832

69,739,000

3,073,832

72,267,231

69,738,015

2,529,216

Total assets

76,065,090

73,045,383

3,019,707

75,391,749

72,800,664

2,591,085

Deposits

67,217,491

64,884,345

2,333,146

66,112,327

64,529,716

1,582,611

Borrowings

1,414,494

1,176,126

238,368

1,120,666

1,045,181

75,485

Total liabilities

70,111,072

67,432,317

2,678,755

68,224,476

66,549,458

1,675,018

Stockholders’ equity

5,954,018

5,613,066

340,952

7,167,273

6,251,206

916,067

Note: Average balances exclude unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities transferred from available-for-

sale to held-to-maturity.

Operating Highlights

Quarters ended June 30,

Six months ended June 30,

(In thousands, except per share information)

2025

2024

Variance

2025

2024

Variance

Net interest income

631,549

568,312

63,237

1,237,146

1,119,056

118,090

Provision for credit losses

(benefit)

48,941

46,794

2,147

113,022

119,392

(6,370)

Non-interest income

168,477

166,306

2,171

320,538

330,124

(9,586)

Operating expenses

492,761

469,576

23,185

963,773

952,689

11,084

Income before income tax

258,324

218,248

40,076

480,889

377,099

103,790

Income tax expense

47,884

40,459

7,425

92,947

96,027

(3,080)

Net income

210,440

177,789

32,651

387,942

281,072

106,870

Net income applicable to common stock

210,087

177,436

32,651

387,236

280,366

106,870

Net income per common share – basic

3.09

2.47

0.62

5.64

3.90

1.74

Net income per common share – diluted

3.09

2.46

0.63

5.64

3.90

1.74

Dividends declared per common share

0.70

0.62

0.08

1.40

1.24

0.16

Quarters ended June 30,

Six months ended June 30,

Selected Statistical Information

2025

2024

2025

2024

Common Stock Data

End market price

110.21

88.43

110.21

88.43

Book value per common share at period end

87.31

73.94

87.31

73.94

Profitability Ratios

Return on assets

1.11

0.97

1.04

0.77

Return on common equity

11.77

10.38

10.93

8.24

Net interest spread (non-taxable equivalent basis)

2.85

2.44

2.79

2.41

Net interest spread (taxable equivalent) - Non-GAAP

3.21

2.70

3.14

2.65

Net interest margin (non-taxable equivalent basis)

3.49

3.22

3.45

3.20

Net interest margin (taxable equivalent) - Non-GAAP

3.85

3.48

3.80

3.44

Capitalization Ratios

Average equity to average assets

9.48

8.60

9.51

8.59

Common equity Tier 1 capital

15.91

16.48

15.91

16.48

Tangible common

book value per common share (non-GAAP)

[2]

75.41

62.71

75.41

62.71

Return on average tangible common equity

[2]

13.26

11.77

12.32

9.35

Tier I capital

15.96

16.54

15.96

16.54

Total capital

17.70

18.30

17.70

18.30

Tier 1 leverage

8.51

8.53

8.51

8.53

[1]

Includes loans held-for-sale.

[2]

Refer to Table 10 for reconciliation to GAAP financial measures.

Non-GAAP Financial Measures

This Form 10-Q

contains financial information

prepared under accounting

principles generally accepted in

the United States

(“U.S.

136

GAAP”)

and

non-GAAP

financial

measures.

Management

uses

non-GAAP

financial

measures

when

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

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

“adjusted

net

income”

the

Corporation.

Management

believes

that

the

“adjusted

net

income”

provides

meaningful

information

about

the

underlying

performance

the

Corporation’s

ongoing

operations.

The

“adjusted

net

income”

non-GAAP

financial

measure.

The

following

table

presents

the

adjusted

net

income

for

the

six

months

ended

June

30,

2024.

There

were

non-GAAP

adjustments for the six months ended June 30, 2025.

Table 2 - Adjusted Net Income

for the Six Months Ended June 30, 2024 (Non-GAAP)

(In thousands)

Income before

income tax

Income tax

expense

(benefit)

Total

U.S. GAAP Net income

$377,099

$96,027

$281,072

Non-GAAP Adjustments:

FDIC Special Assessment [1]

14,287

(5,234)

9,053

Adjustments related to intercompany distributions [2]

6,400

16,483

22,883

Adjusted net income (Non-GAAP)

$397,786

$84,778

$313,008

[1] Expense recorded during the first quarter of 2024 to

increase the estimate recognized during the fourth

quarter of 2023 related to the November 16,

2023 FDIC Special Assessment to recover the losses to the

deposit insurance fund used by the FDIC in connection

with the receiverships of several

failed banks. The special assessment amount and collection

period may change if the estimated loss is periodically

adjusted or if the total amount

collected varies.

[2] Income tax expense and other related expenses from

prior periods related to withholding taxes on certain

distributions from U.S. subsidiaries.

137

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

3 and 4 for

the quarter and

six months

ended June

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

tax-exempt

interest

income

are

certain

loans

and

investments

obligations

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 attributed to

exempt income, reducing

the benefit

of the

tax-exempt income. The

effective yield, on

a taxable

equivalent

basis, will vary depending on the

level of these expenses that are

attributed to the available exempt income.

Under Puerto Rico tax

law, the exempt interest can be

deducted up to the amount of taxable income. Management believes that this presentation provides

meaningful information since it facilitates the comparison

of revenues arising from taxable and exempt

sources.

Tangible Common Equity and Tangible Assets

Tangible

common equity,

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

traditional

bank

capital

ratios

commonly

used

banks

and

analysts

compare

the

capital

adequacy

banking

organizations

with

significant

amounts

goodwill

other

intangible

assets,

typically

stemming

from

the

use

the

purchase

accounting method for

mergers and acquisitions.

Tangible

common equity,

tangible assets

and other related

measures should not

used

isolation

a substitute

for

stockholders' equity,

total

assets

any

other

measure calculated

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

June 30, 2025 and December 31, 2024.

138

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

the

Corporation’s

accounting

policies,

their

nature,

are

inherently

subject to estimation techniques, valuation assumptions

and other subjective assessments.

Management

has

discussed

the

development

and

selection

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

the

2024

Form

10-K.

Also,

refer

Note

the

Consolidated

Financial

Statements

included

the

2024

Form

10-K

for

summary of the Corporation’s significant accounting policies and to Note 3 to the Consolidated Financial Statements included in this

Form 10-Q for information on recently adopted accounting

standard updates.

STATEMENT

OF OPERATIONS ANALYSIS

NET INTEREST INCOME

The

Corporation’s

net

interest

income

for

the

quarter

ended

June

30,

2025

was

$631.5

million

and

increased

$63.2

million,

compared to the same

quarter in 2024.

Higher net interest income

was supported by

an increase in average

deposit balances and

loan growth.

Net interest

income on

a taxable

equivalent basis

for the

second quarter

of 2025

was $697.2

million, an

increase of

$82.4 million.

Net interest margin (“NIM”) for the quarter was 3.49%, an increase

of 27 basis points when compared to the second quarter

of 2024.

On a

taxable equivalent

basis, net

interest margin

for the

second quarter

2025 was

3.85% or

37 basis

points higher

than the

second quarter

of 2024.

NIM expansion

was mainly

attributed to

lower deposit

costs driven

by the

repricing of

high-cost deposits

that are

market-linked, such

as P.R.

public deposits,

coupled with

a higher

volume of

loans and

higher yields

of U.S.

Treasuries.

Total cost of deposits decreased 32 basis points to 1.78%.

On a taxable equivalent basis, the main drivers of

the increase for the second quarter of 2025

were:

●

higher income

from

U.S. Treasury

securities

$21.5

million,

due to

investment

activity

higher yields

supported

deposits growth.

The U.S.

Treasuries yield

increased 30

basis points

when compared

to the

second quarter

of 2024

reinvestment of maturing debt securities along with

incremental balances are being reinvested

at higher current rates;

●

higher

income

from

loans

$40.4

million

resulting

from

higher

average

balances

across

most

portfolios,

led

commercial, construction,

mortgage, auto

and lease

portfolios, resulting

from origination

activity.

Higher yields

from the

auto, lease and

mortgage portfolios mitigated the

impact of lower

yields from the

commercial and construction portfolios,

due to

the impact of

short-term market rates

decline on adjustable-rate

loans. Overall, the

loan portfolio yield

decreased

by two basis points to 7.50%; and

●

lower interest expense on deposits

by $44.9 million or 32

basis points lower when compared to

the same period in 2024.

The cost

of interest-bearing

deposits decreased

by 45

basis points,

mainly due

to the

repricing of

P.R.

public deposits

which decreased by 93 basis points to 3.22% and

a decrease in the cost of deposits in the

PB segment;

partially offset by:

●

lower interest

income from

money market

investments by

$18.8 million

103 basis

points mainly

due

lower yields

resulting from lower short-term market rates.

139

Table 3 - Analysis of Levels & Yields

on a Taxable Equivalent Basis

(Non-GAAP)

Quarter ended June 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)

6,251

6,471

(220)

4.46

5.49

(1.03)

Money market

investments

69,532

88,316

(18,784)

(15,866)

(2,918)

28,809

28,943

(134)

3.29

3.01

0.28

Investment securities [1]

236,372

216,922

19,450

18,673

777

5.99

5.69

0.30

Trading securities

407

367

Total money market,

investment and

trading

35,087

35,440

(353)

3.50

3.47

0.03

securities

306,311

305,605

706

2,828

(2,122)

Loans:

18,676

17,707

969

6.73

6.86

(0.13)

Commercial

313,493

302,003

11,490

(4,831)

16,321

1,459

1,070

389

8.19

9.11

(0.92)

Construction

29,806

24,224

5,582

(2,558)

8,140

1,963

1,789

174

7.18

6.86

0.32

Leasing

35,249

30,697

4,552

1,467

3,085

8,339

7,817

522

5.89

5.66

0.23

Mortgage

122,873

110,673

12,200

4,632

7,568

3,211

3,192

14.00

13.97

0.03

Consumer

112,083

110,906

1,177

374

803

3,937

3,819

118

9.14

8.88

0.26

Auto

89,706

84,268

5,438

2,780

2,658

37,585

35,394

2,191

7.50

7.52

(0.02)

Total loans

703,210

662,771

40,439

1,864

38,575

72,672

70,834

1,838

5.57

5.49

0.08

Total earning assets

1,009,521

968,376

41,145

4,692

36,453

Interest bearing

deposits:

8,062

7,522

540

1.71

1.97

(0.26)

NOW and money

market

34,288

36,783

(2,495)

(4,611)

2,116

14,605

14,728

(123)

0.83

0.92

(0.09)

Savings

30,378

33,749

(3,371)

(2,862)

(509)

8,532

8,237

295

3.15

3.39

(0.24)

Time deposits

67,032

69,494

(2,462)

(4,857)

2,395

20,333

19,364

969

3.22

4.15

(0.93)

P.R. public

deposits

163,360

199,913

(36,553)

(45,918)

9,365

51,532

49,851

1,681

2.29

2.74

(0.45)

Total interest bearing

deposits

295,058

339,939

(44,881)

(58,248)

13,367

14,825

15,176

(351)

Non-interest bearing

demand deposits

66,357

65,027

1,330

1.78

2.10

(0.32)

Total deposits

295,058

339,939

(44,881)

(58,248)

13,367

470

390

4.52

5.64

(1.12)

Short-term borrowings

5,300

1,126

4,174

(213)

4,387

Other medium and

832

978

(146)

5.79

5.16

0.63

long-term debt

11,965

12,530

(565)

181

(746)

Total interest bearing

52,834

50,909

1,925

2.36

2.79

(0.43)

liabilities (excluding

demand deposits)

312,323

353,595

(41,272)

(58,280)

17,008

Other sources of funds

5,013

4,749

264

72,672

70,834

1,838

1.72

2.01

(0.29)

Total source of funds

312,323

353,595

(41,272)

(58,280)

17,008

Net interest margin/

income on a taxable

equivalent basis (Non-

GAAP)

3.85

3.48

0.37

697,198

614,781

82,417

62,972

19,445

3.21

2.70

0.51

Net interest spread

Taxable equivalent

adjustment

65,649

46,469

19,180

Net interest margin/

income non-taxable

equivalent basis (GAAP)

3.49

3.22

0.27

631,549

568,312

63,237

Note: The changes that are not due solely to volume or

rate are allocated to volume and rate based on the

proportion of the change in each category.

[1] Average balances exclude unrealized gains or losses

on debt securities available-for-sale and the unrealized

loss related to certain securities transferred from

available-for-sale to held-to-maturity.

140

The Corporation’s net

interest income for the

six-month period ended June

30, 2025 was

$1.2 billion, or $118.1

million higher than

the same period

in 2024. Taxable

equivalent net interest

income was $1.4

billion, an increase

of $156.7 million

when compared to

the same

period in

2024. NIM

was 3.45%,

an increase

25 basis

points when

compared to

3.20% in

2024. NIM,

on a

taxable

equivalent basis, for the six months ended June

30, 2025, was 3.80%, an increase of

36 basis points compared to the same

period

of 2024.

The main drivers of the variances in net interest income on a taxable equivalent basis for the six-month period ended June 20, 2025

were:

●

higher income from U.S.

Treasury securities by

$53.9 million mainly driven

by higher yields, coupled with

higher average

volume by $640.0 million;

●

higher income from

loans by $71.6

million driven by

higher average balances across

most portfolios, mainly commercial,

construction and

mortgage, and

higher yields

in the

mortgage, auto

and leasing

portfolios due

to originations

at higher

rates, partially

offset by

lower yields

in commercial

and construction

portfolios due

adjustable-rate loans

which were

impacted by the decline in index rates; and

●

lower deposit

cost by

$76.5 million

mainly due

to the

repricing of

marked linked

P.R.

public deposits,

which reflected

lower cost by 90 basis points and deposit costs repricing

in both banks;

partially offset by:

●

lower income from money markets investments by

$37.1 million driven by the decline in

short-term market rate and lower

average balances due to loan growth and investments,

mainly in U.S. Treasuries; and

●

higher

short-term

borrowings

expenses

$4.4

million

mainly

due

higher

average

balances

FHLB

advances

Popular Bank.

141

Table 4 – Analysis of Levels & Yields

on a Taxable Equivalent Basis

from Continuing Operations (Non-GAAP)

Period ended June 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)

6,314

6,477

(163)

4.46

5.49

(1.03)

Money market

investments

139,698

176,832

(37,134)

(32,791)

(4,343)

28,613

28,626

(13)

3.22

2.86

0.36

Investment securities

[1]

456,807

408,024

48,783

45,804

2,979

(1)

5.90

4.60

1.30

Trading securities

847

678

169

186

(17)

Total money market,

investment and

trading

34,956

35,133

(177)

3.45

3.35

0.10

securities

597,352

585,534

11,818

13,199

(1,381)

Loans:

18,585

17,660

925

6.72

6.85

(0.13)

Commercial

619,461

601,507

17,954

(13,059)

31,013

1,385

1,031

354

8.15

9.04

(0.89)

Construction

55,995

46,324

9,671

(4,994)

14,665

1,951

1,766

185

7.14

6.80

0.34

Leasing

69,693

60,051

9,642

3,129

6,513

8,254

7,770

484

5.86

5.64

0.22

Mortgage

241,789

219,216

22,573

8,609

13,964

3,207

3,208

(1)

14.02

13.94

0.08

Consumer

222,989

222,396

593

230

363

3,929

3,791

138

9.11

8.82

0.29

Auto

177,511

166,322

11,189

5,010

6,179

37,311

35,226

2,085

7.49

7.50

(0.01)

Total loans

1,387,438

1,315,816

71,622

(1,075)

72,697

72,267

70,359

1,908

5.54

5.43

0.11

Total earning assets

1,984,790

1,901,350

83,440

12,124

71,316

Interest bearing

deposits:

8,022

7,643

379

1.72

1.99

(0.27)

NOW and money

market

68,290

75,548

(7,258)

(9,978)

2,720

14,556

14,711

(155)

0.85

0.93

(0.08)

Savings

61,658

67,873

(6,215)

(5,274)

(941)

8,466

8,029

437

3.18

3.29

(0.11)

Time deposits

133,713

131,511

2,202

(5,555)

7,757

20,310

19,017

1,293

3.27

4.17

(0.90)

P.R. public

deposits

329,260

394,503

(65,243)

(90,446)

25,203

51,354

49,400

1,954

2.33

2.73

(0.40)

Total interest bearing

deposits

592,921

669,435

(76,514)

(111,253)

34,739

14,758

15,129

(371)

Non-interest bearing

demand deposits

66,112

64,529

1,583

1.81

2.09

(0.28)

Total deposits

592,921

669,435

(76,514)

(111,253)

34,739

297

215

4.57

5.67

(1.10)

Short-term

borrowings

6,726

2,318

4,408

(404)

4,812

Other medium and

847

988

(141)

5.72

5.13

0.59

long-term debt

24,077

25,239

(1,162)

250

(1,412)

Total interest bearing

52,498

50,470

2,028

2.40

2.78

(0.38)

liabilities (excluding

demand deposits)

623,724

696,992

(73,268)

(111,407)

38,139

5,011

4,760

251

Other sources of

funds

72,267

70,359

1,908

1.74

1.99

(0.25)

Total source of funds

623,724

696,992

(73,268)

(111,407)

38,139

3.80

3.44

0.36

Net interest margin/

income on a taxable

equivalent basis

(Non-GAAP)

1,361,066

1,204,358

156,708

123,531

33,177

3.14

2.65

0.49

Net interest spread

Taxable equivalent

adjustment

123,920

85,302

38,618

3.45

3.20

0.25

Net interest margin/

income non-taxable

equivalent basis

(GAAP)

1,237,146

1,119,056

118,090

Note: The changes that are not due solely to volume or

rate are allocated to volume and rate based on the

proportion of the change in each category.

[1] Average balances exclude unrealized gains or losses

on debt securities available-for-sale and the unrealized

loss related to certain securities transferred

from available-for-sale to held-to-maturity.

142

Provision for Credit Losses - Loans Held-in-Portfolio

and Unfunded Commitments

For the

quarter ended

June 30,

2025,

the Corporation

recorded a

provision for

credit losses

related to

loans held-in-portfolio

and

unfunded commitments of

$48.4 million, an

increase of $2.1

million when compared to

the same quarter

of the previous

year.

The

provision

for

the

loan

portfolio

was

$49.5

million,

increase

$5.4

million,

and

the

provision

release

unfunded

commitments was $1.1

million, a favorable

variance of $3.2

million, mainly driven

by lower unfunded

commitments reserves at

the

BPPR segment.

As discussed

in Note

8 to

the Consolidated

Financial Statements,

the Corporation

estimates the

ACL by

weighting the

outputs of

optimistic,

baseline,

and

pessimistic

scenarios.

During

the

first

quarter

2025,

response

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

six

months

ended June

30,

2025

was

$13.7

million

additional

reserves. 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:

●

In the BPPR segment,

the provision for loans losses

was $43.2 million, a decrease

of $5.4 million when

compared to the

same quarter in

2024, mainly driven

by lower reserves

for the commercial

portfolio of $16.4 million

due to improvements

in credit quality and lower net

charge-offs,

which offset the increase in the

weight assigned to the pessimistic scenario for

the

year

2025,

discussed

above.

The

favorable

variance

was

partially

offset

higher

reserves

the

consumer

portfolio due to changes in credit quality mainly within

the auto portfolio and changes in the macroeconomic

scenarios.

●

the Popular

U.S. segment,

the provision

for

loans losses

was

$6.4 million

for the

quarter ended

June

30, 2025,

increase of

$10.8 million, mainly

driven by

higher qualitative reserves

for the

U.S. Commercial Real

Estate portfolio

and

changes in macroeconomic

scenarios, when compared to

the reserve release

recorded for the

same period in

2024 due

to improvement in credit ratings.

For the six

months ended June

30, 2025, the

provision for credit

loss related to

loans held-in-portfolio and

unfunded commitments

amounted to $112.3 million, a decrease of $6.1 million, compared to the six months ended June 30, 2024. The provision for the loan

portfolio

was

$114.8

million,

decrease

$1.8

million,

and

the

provision

release

unfunded

commitments

was

$2.4

million, a

decrease of

$4.3 million,

mainly driven

by the

reduction in

unfunded commitment

reserves within

the U.S.

construction

portfolio. The major drivers of the decrease

in the provision for loan losses during

the six months ended June 30,

2025 by business

segment when compared to the same period in

2024, were as follows:

●

In the

BPPR segment,

the provision

for loan

losses was

$95.8 million,

a decrease

of $13.8

million, driven

by lower

net

charge-offs,

mainly

commercial

and

consumer

loans,

and

improvement

credit

quality,

mainly

the

commercial

portfolio, partially offset by the

increase in the probability weight assigned to

the pessimistic scenario which generated an

additional reserve of $8.8 million.

●

In the

Popular U.S.

segment, the

provision for

loan losses

was $18.9

million, an

increase of

$12.0 million,

driven by

increase of $7.1 million mainly

due to credit quality changes and

additional qualitative reserves established, mainly within

the

commercial

portfolio,

and

increase

$4.9

million

the

increase

probability

weight

assigned

the

pessimistic scenario.

At June

30, 2025,

the total

allowance for

credit losses

for loans

held-in-portfolio amounted

to $769.5

million, compared

to $746.0

million as of December 31, 2024.

The ratio of the allowance for

credit losses to loans held-in-portfolio was

2.02% at June 30, 2025,

compared to 2.01% at

December 31, 2024. Refer to

Note 8 to the

Consolidated Financial Statements, for additional

information on

the

Corporation’s

methodology to

estimate

its

ACL.

Refer to

the

Credit Risk

section of

this MD&A

for a

detailed

analysis

net

charge-offs, non-performing assets, the allowance for credit losses

and selected loan losses statistics.

Non-Interest Income

143

Non-interest income amounted to $168.5 million for the second quarter of 2025, an increase of $2.2 million when compared with the

same quarter for the previous year. The variance was primarily due

to:

●

higher other

service fees

$3.7 million

mainly due

higher credit

and debit

card fee

income by

$2.5 million,

due to

higher volume

of costumer

transactions,

and higher

investment management

fees by

$1.2 million,

due to

higher assets

under management; and

●

a favorable fair value adjustment of equity securities held

for deferred compensation plans which have an offsetting effect

in personnel cost of $1.5 million;

partially offset by:

●

lower other operating income

by $3.6 million mainly

due to lower daily

car rental revenue by

$4.9 million and lower

gains

from

the sale

of car

rental units

$2.9 million,

both due

the sale

the daily

car rental

business during

the fourth

quarter of 2024, partially

offset by $2.3 million

of income related to

the reimbursement of excess

interest paid to the

U.S.

Internal Revenue Service

(“the IRS”) for

late payment penalties

related to tax

withholdings on intercompany

distributions

for the years 2014-2024

previously disclosed in 2024, and

a $1.2 million cash

distribution from the exit of

a legacy equity

investment.

Non-interest income amounted to $320.5 million for the six

months ended June 30, 2025, a decrease of $9.6 million when

compared

to the same period of the previous year. The main factors that

contributed to the variance were:

●

lower other operating income by $15.6 million mainly due to daily

car rental revenue by $9.8 million and the gains from the

sale of car rental units by

$6.3 million during the six months ended June

30, 2024 associated with the car rental business

sold in the fourth quarter of 2024, partially offset

by $3.9

million income related to the reimbursement of interest paid from

the IRS, as discussed above;

partially offset by:

●

higher other

service fees

by $3.9

million due

higher credit

and debit

card fee

income by

$4.0 million,

due to

higher

volume

transactions,

and

higher

investment

management

fees

$2.8

million,

due

higher

assets

under

management,

partially offset by lower insurance fees by $4.1 million;

and

●

higher

service

charges

deposit

accounts

$2.9

million

mainly

due

higher

non-balance

compensation

fees

commercial deposits.

144

Operating Expenses

Operating expenses amounted to $492.8 million for the

quarter ended June 30, 2025, an

increase of $23.2 million, when compared

with the same quarter of 2024. The variance

in operating expenses was mainly driven by:

●

higher personnel costs by $31.9 million mainly due to higher incentives, including $13.0 million related to the profit-sharing

plan

which

tied

the

Corporation’s

financial

performance

and

$9.9

million

other

performance-based incentives

and

stock-

based compensation, and higher salaries expense by

$4.1 million due to a higher headcount and

annual salary revisions;

●

higher

technology

and

software

expenses

$4.9

million

mainly

due

higher

software

amortization

expense

due

the

acquisition

and

renewal

multiple

technology

licenses

reflective

the

continuous

investment

technology

and

transformation initiatives and an increase in network

management services expense; and

●

higher other taxes expense by $3.3 million

mainly due to higher regulatory fees and

an increase in municipal license tax;

partially offset by:

●

lower

professional

fees

$9.6

million

mainly

due

decrease

advisory

expenses

corporate

initiatives,

decrease, due

expense-recognition timing

differences,

in the

cost of

restricted stock

granted to

directors, and

lower legal

fees;

●

lower operational losses by

$5.6 million due to

a buildup of reserves

for operational losses during the

second quarter of 2024;

and

●

lower equipment expenses

by $3.9 million, mainly due to the

elimination of the car rental fleet depreciation

expense, related to

the car rental business sold in 2024.

Operating

expenses

amounted

$963.8

million

for

the

six

months

ended

June

30,

2025,

increase

$11.1

million

when

compared with the

same period of

2024. Excluding the

$6.4 million of

interest accrued related

to prior period

tax withholdings and

the

$14.3

million

impact

the

FDIC

Special

Assessment,

total

operating

expenses

for

the

six

months

ended

June

30,

2025,

increased by $31.8 million, when compared with

the same period of 2024. The main drivers of the increase

were:

●

higher personnel costs by $29.3 million mainly due to higher incentives, including $13.0 million related to the profit-sharing plan

which

tied

the

Corporation’s

financial

performance

and

$9.3

million

other

performance-based incentives

and

stock-

based compensation, and higher salaries expenses

by $5.7 million due to a higher headcount

and annual salary revisions;

●

higher

technology

and

software

expenses

$9.2

million

mainly

due

higher

software

amortization

expense

due

the

acquisition

and

renewal

multiple

technology

licenses

reflective

the

continuous

investment

technology

and

transformation initiatives and an increase in network

management services expense;

and

●

higher other taxes expense by $7.6 million

mainly due to higher regulatory fees and an

increase in municipal license tax;

partially offset by:

●

lower professional fees by $11.7

million mainly due to a

decrease in advisory expenses related to corporate initiatives

focused

on compliance and cyber security efforts, a decrease in

IT professional services,

and lower legal fees;

●

lower equipment expenses

by $8.1 million, mainly due to the depreciation of car rental units associated with the daily car rental

transaction; and

●

lower operational losses by $3.1 million due to a

buildup of reserves for operational losses during

the second quarter of 2024.

145

Table 5 - Operating Expenses

Quarters ended June 30,

Six months ended June 30,

(In thousands)

2025

2024

Variance

2025

2024

Variance

Personnel costs:

Salaries

132,752

128,634

4,118

263,702

258,018

5,684

Commissions, incentives, and other bonuses

40,551

30,626

9,925

78,537

69,237

9,300

Profit sharing

13,000

Pension, postretirement, and medical insurance

18,458

16,619

1,839

33,024

34,004

(980)

Other personnel costs, including payroll taxes

24,594

21,545

3,049

53,805

51,542

2,263

Total personnel

costs

229,355

197,424

31,931

442,068

412,801

29,267

Net occupancy expenses

29,140

27,692

1,448

56,358

55,733

625

Equipment expenses

5,789

9,662

(3,873)

11,091

19,229

(8,138)

Other taxes

18,632

15,333

3,299

37,357

29,708

7,649

Professional fees

28,108

37,744

(9,636)

54,933

66,662

(11,729)

Technology and

software expenses

84,696

79,752

4,944

168,364

159,214

9,150

Processing and transactional services:

Credit and debit cards

13,044

13,739

(695)

25,970

25,883

Other processing and transactional services

24,817

25,357

(540)

49,672

47,407

2,265

Total processing

and transactional services

37,861

39,096

(1,235)

75,642

73,290

2,352

Communications

5,010

4,357

653

9,914

8,914

1,000

Business promotion:

Rewards and customer loyalty programs

18,047

16,406

1,641

34,412

30,462

3,950

Other business promotion

8,338

9,043

(705)

15,648

15,976

(328)

Total business

promotion

26,385

25,449

936

50,060

46,438

3,622

Deposit insurance

9,407

10,581

(1,174)

19,442

34,468

(15,026)

Other real estate owned (OREO) income

(4,124)

(5,750)

1,626

(7,454)

(11,071)

3,617

Other operating expenses:

Operational losses

6,185

11,823

(5,638)

12,323

15,384

(3,061)

All other

15,932

15,679

253

32,693

40,390

(7,697)

Total other operating

expenses

22,117

27,502

(5,385)

45,016

55,774

(10,758)

Amortization of intangibles

385

734

(349)

982

1,529

(547)

Total operating

expenses

492,761

469,576

23,185

963,773

952,689

11,084

Income Taxes

For the quarter

and six months

ended June 30,

2025, the Corporation recorded

an income tax

expense of $47.9

million and $92.9

million with an effective tax rate (“ETR”) of 18.5% and 19.3%, respectively, compared to $40.5 million and $96.0 million with an ETR

of 18.5% and 25.5% for the respective periods

of year 2024.

Higher income tax expense of $7.4

million for the second quarter,

when compared to the same quarter of

2024, is mainly attributed

to higher income before tax, partially offset with higher net exempt income. For the

six-month period ended June 30, 2025, the lower

income

tax

expense

$3.1

million

reflects

the

impact

the

tax

withholding

expense

$22.9

million

recorded

during

the

first

quarter of year 2024, in connection with intercompany distributions

for years 2014-2024, as disclosed in Note 34 to the Consolidated

Financial Statements in the

2024 Form 10-K,

and the benefit

of $5.2 million

related to the FDIC

Special Assessment expense; this

was partially offset by the increase in

income before tax. Excluding the impact of the

withholding tax expense and the additional net

expense related to the FDIC Special Assessment in the first quarter

of 2024, the ETR for the six-month period ended June 30, 2024,

would have been 21.3%.

June

30,

2025,

the

Corporation

had

net

deferred

tax

asset

amounting

$860.3

million,

net

valuation

allowance

$463.7million. The net

deferred tax asset

related to the

U.S. operations was

$242.2 million, net

of a valuation

allowance of $386.9

million.

Refer to

Note 30

to the

Consolidated Financial

Statements for

a reconciliation

of the

statutory income

tax rate

to the

effective tax

rate and additional information on the income

tax expense and deferred tax asset balances.

REPORTABLE SEGMENT RESULTS

The Corporation’s

reportable segments

for managerial

reporting purposes

consist of

Banco Popular

de Puerto

Rico and

Popular

U.S. A Corporate group

has also been defined to support the reportable

segments.

146

For

description

the

Corporation’s

reportable

segments,

including

additional

financial

information

and

the

underlying

management accounting process, refer to Note 32

to the Consolidated Financial Statements.

The corporate group reported a net income of $3.3

million for the quarter ended June 30, 2025, compared with a net income of $3.8

million for the same quarter of

the previous year. For

the six months ended June 30,

2025, the corporate group reported net loss

$0.3 million, compared

to a

net loss of

$21.6 million for

the same period

of the

previous year.

The higher loss

in 2024 was

mainly

attributed to

the expense

related to

the $22.9

million adjustment

recorded in

the first

quarter of

2024 to

recognize the

tax impact

associated with

prior period

intercompany distributions and

the additional

$6.5 million

expense for

the tax

impact of

intercompany

distributions paid

during the

first quarter

of 2024.

A positive

adjustment of

$3.9 million

was recorded

during the

six months

ended

June 30,

2025, resulting

from reimbursements

received from

the U.S.

Internal Revenue

Service related

to interest

paid for

these

intercompany

distributions.

There

were

intercompany

distributions

between

the

U.S.

subsidiaries

and

the

bank

holding

companies.

Highlights on the earnings results for the reportable

segments are discussed below:

Banco Popular de Puerto Rico

The Banco

Popular de

Puerto Rico

reportable segment’s

net income

amounted to

$184.5 million

for the

quarter ended

June 30,

2025, compared

with a

net income of

$157.2 million

for the

same quarter

of the

previous year.

The factors

that contributed

to the

variance in the financial results included the following:

●

Net interest income

of $538.5 million

was higher by

$49.7 million primarily

driven by lower

interest expense on

deposits,

mainly from the

re-pricing of P.R.

public funds,

higher income from

U.S. Treasury

securities, mainly due

to higher

yields

and

higher income

from

the

loans portfolio

driven by

loan

growth, partially

offset

lower income

from

money market

investments reflecting the

decline in rates.

The net interest

margin for the

quarter ended June

30, 2025 was

3.68%, and

increase of 28 basis points, compared to 3.40% for the same quarter in the previous year. The increase in the margin was

mainly impacted

by lower

cost of

deposits and

higher yield

from investment

securities, as

well as

higher loan

balances

which carry a higher yield, partially offset by lower rates

on money market investments;

●

the provision

for loan

losses of

$43.2 million

was lower

by $5.4

million mainly

driven by

lower reserves

for commercial

loans,

due

improvements

credit

quality

and

lower

net

charge-offs

partially

offset

higher

provision

for

the

consumer loan portfolios due to changes in credit quality,

mainly within the auto portfolio, and changes in macroeconomic

scenarios;

●

lower non-interest income by $6.7 million mainly due to lower income from the daily car rental business, which was sold in

the fourth quarter of 2024;

●

higher operating expenses by $21.9 million mostly due to higher personnel costs by $19.0 million, mainly due to the profit-

sharing expense accrual and other performance-related

incentives, and higher technology expenses by

$4.0 million, offset

by lower

equipment expenses by

$4.2 million

mainly related to

the daily

car rental

business sold

in the

fourth quarter

2024; and

●

higher

income

tax

expense

$1.7

million

mainly

due

higher

income

before

tax;

partially

offset

higher

exempt

income and other tax credits recorded during the

first quarter of 2025.

For the six months ended

June 30, 2025, the BPPR segment

recorded a net income of $350.4

million compared to a net income

$278.5 million for the

same period of the

previous year. The factors

that contributed to the variance

in the financial results

included

the following:

●

Net

interest

income

$1.1

billion was

higher by

$98.8 million

primarily

driven by

lower interest

expense on

deposits,

mainly from

the re-pricing

of P.R.

public funds,

higher income

from investment

securities and

higher income

from loans

due to portfolio growth, partially offset by lower income from money market

investments reflecting the decline in rates and

lower balances. The net interest margin for the six months ended June

30, 2025 was 3.66% compared with the 3.36% for

147

the same period

of the previous

year. The

increase in the

margin was mainly

impacted by

lower cost of

deposits, higher

yield from investment securities and loan growth, partially

offset by lower rates from money market investments;

●

the provision

for loan

losses of

$95.9 million

was lower

by $13.7

million mainly

driven by

the commercial

and consumer

portfolios due to lower net charge-offs and

improvements in credit quality,

partially offset by the increase in the

probability

weight assigned to the pessimistic economic scenario;

●

lower non-interest income by $14.8 million mainly due to lower income from the daily car rental business sold in 2024 and

lower insurance fees, partially

offset by higher credit

and debit card income,

due to higher volume

of transactions, higher

investment management fees and an increase in non-balance

compensation fees in commercial deposits;

●

higher operating

expenses by

$19.2 million

mostly due

to higher

personnel costs

by $17.4

million, due

to incentives

discussed

above,

higher

regulatory

examination

fees,

municipal

license

tax

and

higher

technology expenses,

partially

offset by

lower equipment

expenses related

to the

daily rental

business sold

and lower

FDIC expense

due to

the FDIC

Special Assessment recorded in 2024;

and

●

Higher income tax expense by $8.0 million mainly

due to higher income before tax.

Popular U.S.

For the quarter ended June 30, 2025, the reportable segment of Popular U.S. reported a net income of $22.6 million, compared with

a net income

of $17.7 million for

the same quarter of

the previous year.

The factors that contributed

to the variance

in the financial

results included the following:

●

Net interest income of

$102.2 million, higher by

$16.3 million due to

higher income from loans,

mainly from growth in

the

commercial and

construction portfolios,

and lower

cost of

deposits due

to the

repricing of

most interest-bearing

deposit

products,

partially

offset

lower

income

from

money

market

investments

due

average

balances

and

lower

yields

reflecting

the

decrease

short-term

rates.

The

net

interest

margin

for

the

quarter

ended

June

30,

2025

was

2.93%

compared to 2.60% for the same quarter in the

previous year driven by lower cost of deposits;

●

the provision for loan losses was $6.4 million, reflecting higher reserves due to changes in economic scenarios, compared

to a benefit of $4.4 million in 2024, which was

mainly related to improvements in commercial

credit ratings;

●

higher operating expenses by $1.5 million, reflecting

higher personnel costs driven by incentives;

and

●

higher income tax expense by $1.3 million due

to higher net income before tax.

For the six months ended June 30, 2025, the reportable segment of Popular

U.S. recorded a net income of $37.4 million, compared

with

net

income

$24.8

million

for

the

same

period

the

year.

The

factors

that

contributed

the

variance

the

financial results included the following:

●

Higher net interest

income by $24.4

million due to

higher income from

the loans

portfolio mainly related

to growth in

the

commercial and construction

portfolios and lower

interest expense from

deposits, due to

product repricing as

mentioned

above, partially offset by lower income from money market investments due to lower rates. The net interest margin for the

six months ended June 30, 2025 was 2.84% compared to 2.60% for the same

period of the previous year driven by lower

cost of deposits;

●

the provision

for loan

losses of

$18.9 million

was higher

by $12.0

million driven

by higher

reserves

for the

commercial

portfolio due to higher loan balances;

148

●

lower operating expenses by

$1.6 million reflecting lower

FDIC expense due to

FDIC Special Assessment of

$1.6 million

recorded in

2024 and

lower professional

fees, offset

by higher

allocation of

Corporate expenses

reflective of

personnel

costs and consulting fees; and

●

higher income tax expense by $4.6 million due

to higher net income before tax.

STATEMENT

OF FINANCIAL CONDITION ANALYSIS

Assets

The Corporation’s total assets were $76.1 billion at June 30, 2025, compared

to $73.0 billion at December 31, 2024. The variance in

total assets of $3.1 billion was driven by an increase in AFS securities and loan growth across most portfolios at both BPPR and PB

segments,

partially offset by a decrease in

HTM securities, other assets, and money market investments.

Refer to the Consolidated

Statements of Financial Condition included in

this report and to the following narrative for

additional information.

Money market investments and investment securities

Money market investments decreased by $40.2 million as of June 30,

2025, when compared to December 31, 2024, driven by funds

deployed to support loan growth.

AFS securities increased $2.2 billion, mainly due to investment in U.S. Treasury securities and the

decrease in

the unrealized

losses of

AFS securities

of $232.7

million, partially

offset

by maturities

and principal

paydowns.

HTM

securities

decreased

$216.4 million

driven

maturities

and

principal

paydowns,

partially

offset

the

amortization

$91.6

million of the discount related to U.S. Treasury securities previously reclassified

from the AFS to HTM.

Refer to Note 5 and to Note 6

to the

Consolidated Financial

Statements for

additional information

with respect

to the

Corporation’s debt

securities available-for-

sale and held-to-maturity.

149

Loans

Refer to Table

6 for a

breakdown of the Corporation’s

loan portfolio. Also, refer

to Note 7 in

the Consolidated Financial Statements

for detailed information about the Corporation’s loan portfolio

composition and loan purchases and sales.

Loans held-in-portfolio

increased by

$1.1 billion

to $38.2

billion at

June 30,

2025, compared

December 31,

2024. Despite

the

uncertainty about the economic outlook, demand for credit across all segments was strong during the second quarter of 2025. In the

BPPR segment

loan balances

increased by

$626.0 million

across all

portfolios, mostly

due to

commercial and

construction loans,

which

include

the

origination

$265.0

million

commercial

loan

during

the

second

quarter

2025

which

represents

the

Corporation’s

portion

$425.0

million

issuance

which

BPPR

acted

the

lead

bank

and

administrative agent,

and

higher

mortgage loans,

driven primarily

by home

purchase activity.

Auto loans

and leases

also increased,

driven by

a strong

origination

activity. The PB

segment also increased

by $451.6 million, driven by commercial and construction lending.

Nonetheless, the impact

of trade and tariff policies on economic activity may affect

loan demand as uncertainty on the short-term

economic outlook exists.

150

Table 6 - Loans Ending Balances

(In thousands)

June 30, 2025

December 31, 2024

Variance

Loans held-in-portfolio:

Commercial

Commercial multi-family

2,520,789

2,399,620

121,169

Commercial real estate non-owner occupied

5,521,374

5,363,235

158,139

Commercial real estate owner occupied

3,003,855

3,157,746

(153,891)

Commercial and industrial

8,043,752

7,741,562

302,190

Total Commercial

19,089,770

18,662,163

427,607

Construction

1,468,201

1,263,792

204,409

Leasing

1,983,068

1,925,405

57,663

Mortgage

8,444,427

8,114,183

330,244

Consumer

Credit cards

1,215,293

1,218,079

(2,786)

Home equity lines of credit

77,479

73,571

3,908

Personal

1,876,463

1,855,244

21,219

Auto

3,861,702

3,823,437

38,265

Other

168,775

171,778

(3,003)

Total Consumer

7,199,712

7,142,109

57,603

Total loans held-in

-portfolio

38,185,178

37,107,652

1,077,526

Loans held-for-sale:

Mortgage

2,898

5,423

(2,525)

Total loans held-for-sale

2,898

5,423

(2,525)

Total loans

38,188,076

37,113,075

1,075,001

151

Other assets

Other assets amounted to $1.7 billion at June 30, 2025, a decrease of

$52.7 million when compared to $1.8 billion at December 31,

2024.

The variance

was mainly

driven by

decrease in

net

deferred tax

assets

$64.2

million

due to

positive changes

the

valuation of

AFS securities,

a reduction

in unsettled

trade receivables

of $14.6

million related

to proceeds

from maturities

of U.S.

Treasury securities,

lower principal, interest and escrow servicing advances

of $8.0 million, and a reduction in investments under

the

equity

method

$7.0

million

mainly

unrealized

losses

the

underlying

investment

portfolio

held

the

investee,

partially offset

by an

increase in

capitalized software costs

of $33.1

million mainly

related to

technology modernization

and higher

prepaid

taxes

$20.8

million.

Refer

Note

the

Consolidated

Financial

Statements

for

breakdown

the

principal

categories that comprise the caption

of “Other Assets” in

the Consolidated Statements of Financial

Condition at June 30,

2025 and

December 31, 2024.

Liabilities

The Corporation’s total

liabilities were $70.1

billion at June

30, 2025, an

increase of $2.7

billion, when compared

to December 31,

2024. The following is a discussion of the significant

changes in liabilities.

Deposits and Borrowings

Total Deposits

The Corporation’s

deposits totaled $67.2

billion as

of June

30, 2025,

compared to

$64.9 billion

as of

December 31,

2024. Ending

deposit

balances increased

$2.3 billion,

while

average quarterly

balances grew

by $2.1

billion. The

average deposit

balance,

excluding P.R.

public deposits, increased by

$1.1 billion. Non-interest-bearing deposits

remained flat when compared to

December

31, 2024. At the end

of the second quarter of

2025, Puerto Rico public deposits were

$20.9 billion, an increase of

$1.5

billion when

compared to December 31, 2024.

P.R

public deposits represent 31% of

total deposits and are expected

to continue to range in

the

short term

between $18

billion and

$20 billion.

However,

the rate

at which

public deposit

balances may

change is

uncertain and

difficult to predict. The amount and timing of any such change is likely

to be impacted by, for example, the level of federal assistance

and speed

at which

any federal

assistance is

distributed, the

financial condition,

liquidity and

cash management

practices of

the

Puerto Rico Government and its instrumentalities,

and the implementation of fiscal and debt adjustment plans approved pursuant to

PROMESA or

other

actions

mandated by

the

Fiscal

Oversight and

Management Board

for Puerto

Rico

(the

“Oversight Board”).

Additionally,

the Trump

Administration is

conducting a

review of

federal funding,

which could

entail a

reduction in

federal funding

available for Puerto Rico. P.R

public deposits costs are generally

indexed to changes in short-term

market rates with a

one-quarter

lag, in

accordance with

contractual terms.

As a

result, these

deposits’ costs

have typically

lagged variable

asset repricing.

These

deposits require that the bank pledge high credit quality securities as collateral; therefore, liquidity risks arising

from deposit outflows

are lower.

At BPPR,

excluding Puerto

Rico public

deposits, ending

deposits increased

by $340

million, while

at PB

segment ending

deposit

balances increased by

$400 million, net

of intercompany activity.

We continue to

expect third quarter deposit

balances in BPPR

reflect historical seasonality and decrease based on past

experience of our retail client behavior.

The volume and cost of P.R.

public deposits and the proportion of high-cost deposits in the U.S, directly impact the balance and mix

of earning assets and therefore represent a key

factor in the Corporation’s ability to expand its net

interest margin.

Refer to Table 7 for a breakdown of the Corporation’s deposits at June 30, 2025 and December

31, 2024.

152

Table 7 - Deposits Ending Balances

(In thousands)

June 30, 2025

December 31, 2024

Variance

Deposits excluding P.R.

public deposits:

Demand deposits

15,114,614

15,139,555

(24,941)

Savings, NOW and money market deposits (non-brokered)

21,554,606

21,177,506

377,100

Savings, NOW and money market deposits (brokered)

829,506

736,225

93,281

Time deposits (non-brokered)

7,938,858

7,476,924

461,934

Time deposits (brokered CDs)

861,947

890,704

(28,757)

Sub-total deposits excluding P.R.

public deposits

46,299,531

45,420,914

878,617

P.R. public

deposits:

Demand deposits

[1]

12,376,316

11,730,273

646,043

Savings, NOW and money market deposits (non-brokered)

7,743,663

7,087,904

655,759

Time deposits (non-brokered)

797,981

645,254

152,727

Sub-total P.R.

public deposits

20,917,960

19,463,431

1,454,529

Total deposits

67,217,491

64,884,345

2,333,146

[1] Includes interest bearing demand deposits.

Borrowings

The Corporation’s

borrowings totaled

$1.4 billion

at June

30, 2025

compared to

$1.2

billion at

December 31,

2024. The

increase

was

mainly

higher

FHLB

advances

$236.5

million,

mainly

PB.

Refer

Note

the

Consolidated

Financial

Statements for detailed

information on the

Corporation’s borrowings. Also,

refer to the

Liquidity section in

this MD&A for

additional

information on the Corporation’s funding sources.

Stockholders’ Equity

Stockholders’ equity totaled $6.0 billion at June 30, 2025, an increase of $341.0 million when compared to December 31, 2024. The

increase was

principally due

to net

income for

the six

months ended

June 30,

2025 of

$387.9 million,

coupled with

the after-tax

effect of the

decrease in net unrealized losses in

the portfolio of AFS securities

of $188.6 million and the

amortization of unrealized

losses

from

securities

previously reclassified

HTM

$73.2 million,

partially

offset

increase in

treasury

stock

$226.9

million, mainly due to

common stock repurchases, and

the common and preferred dividends

declared of $96.9 million.

Refer to the

Consolidated Statements

of Financial

Condition, Comprehensive

Income and

Changes in

Stockholders’ Equity

for information

the composition of stockholders’ equity.

The composition of the Corporation’s financing to total assets

at June 30, 2025 and December 31, 2024

is included in Table 8.

153

Table 8 - Financing to Total

Assets

June 30,

December 31,

% (decrease) increase

% of total assets

(Dollars in millions)

2025

2024

from 2024 to 2025

2025

2024

Non-interest-bearing core deposits

15,115

15,139

(0.2)

19.9

20.7

Interest-bearing core deposits

46,517

44,622

4.2

61.2

61.1

Interest-bearing other deposits

5,586

5,123

9.0

7.3

7.0

Repurchase agreements

1.8

0.1

Other short-term borrowings

550

225

144.4

0.7

0.3

Notes payable

808

896

(9.8)

1.1

1.2

Other liabilities

1,479

1,372

7.8

1.9

Stockholders’ equity

5,954

5,613

6.1

7.8

7.7

154

CAPITAL

Regulatory Capital

The Corporation, BPPR and PB

are subject to regulatory capital

requirements established by the Federal Reserve Board.

The risk-

based

capital

standards

applicable

the

Corporation,

BPPR

and

(“Basel

III

capital

rules”)

are

based

the

final

capital

framework for strengthening international capital standards, known

as Basel III, of the Basel Committee on Banking Supervision.

of June 30,

2025, the Corporation’s, BPPR’s

and PB’s capital

ratios continue to

exceed the minimum requirements

for being “well-

capitalized”.

The risk-based

capital ratios

presented in

Table

which include

common equity

tier 1,

Tier

1 capital,

total capital

and leverage

capital as of June 30, 2025 and December

31, 2024.

Table 9 - Capital Adequacy

Data

(Dollars in thousands)

June 30, 2025

December 31, 2024

Common equity tier 1 capital:

Common stockholders' equity - U.S. GAAP basis

5,931,875

5,590,923

CECL transitional amount

[1]

42,375

AOCI related adjustments due to opt-out election

1,325,146

1,589,875

Goodwill, net of associated deferred tax liability (DTL)

(653,493)

(657,181)

Intangible assets, net of associated DTLs

(5,844)

(6,826)

Deferred tax assets and other deductions

(228,617)

(296,374)

Common equity tier 1 capital

6,369,067

6,262,792

Additional tier 1 capital:

Preferred stock

22,143

Additional tier 1 capital

22,143

Tier 1 capital

6,391,210

6,284,935

Tier 2 capital:

Trust preferred securities subject to phase in as

tier 2

192,674

Other inclusions (deductions), net

503,781

490,594

Tier 2 capital

696,455

683,268

Total risk-based capital

7,087,665

6,968,203

Minimum total capital requirement to be well capitalized

4,003,691

3,907,346

Excess total capital over minimum well capitalized

3,083,974

3,060,857

Total risk-weighted

assets

40,036,914

39,073,462

Total assets for leverage

ratio

75,114,655

72,593,464

Risk-based capital ratios:

Common equity tier 1 capital

15.91

16.03

Tier 1 capital

15.96

16.08

Total capital

17.70

17.83

Tier 1 leverage

8.51

8.66

[1] The CECL transitional amount includes the impact

of Popular's adoption of the new CECL accounting standard

on January 1, 2020.

155

The Basel

III capital rules

provide that a

depository institution is

deemed to be

well capitalized if

it maintains a

leverage ratio of

least 5%,

a common equity

Tier 1

ratio of

at least 6.5%,

a Tier

1 capital ratio

of at least

8% and a

total risk-based

ratio of at

least

10%. The Corporation, BPPR and PB leverage ratio, common equity

Tier 1 ratio and Tier

1 capital ratio, respectively as of June 30,

2025, continue to exceed the minimum requirements

for being “well-capitalized” under the Basel III

capital rules.

Pursuant

the

adoption

the

CECL

accounting

standard

January

2020,

the

Corporation

elected

use

the

five-year

transition

period option

provided in

the

final

interim

regulatory capital

rules effective

March 31,

2020.

The

five-year

transition

period provision delayed for two years the estimated impact of CECL on regulatory capital, followed by a three-year transition period

to phase out

the aggregate amount of

the capital benefit provided

during the initial two-year

delay. During

the first quarter

of 2025,

the Corporation phased-in all the cumulative CECL

deferral over the three-year transition period.

The decrease in the common

equity Tier I

capital ratio, Tier

I capital ratio, total capital

ratio,

and leverage ratio as of

June 30, 2025

as compared to December 31, 2024

was mainly due to

higher risk weighted assets driven by

the increase in loans held

in portfolio,

the

repurchase

under

the

2024

Repurchase

Program

and

common

stock

dividends,

partially

offset

the

six-month

period’s earnings.

Reconciliation to Tangible Common Equity and Tangible Assets

Table

10 provides

a reconciliation of

total stockholders’ equity

to tangible common

equity and total

assets to tangible

assets as

June 30, 2025, and December 31, 2024.

156

Table 10 - Reconciliation

of Tangible Common Equity

and Tangible Assets

(In thousands, except share or per share information)

June 30, 2025

December 31, 2024

Total stockholders’

equity

5,954,018

5,613,066

Less: Preferred stock

(22,143)

Less: Goodwill

(802,954)

Less: Other intangibles

(5,844)

(6,826)

Total tangible common

equity

5,123,077

4,781,143

Total assets

76,065,090

73,045,383

Less: Goodwill

(802,954)

Less: Other intangibles

(5,844)

(6,826)

Total tangible assets

75,256,292

72,235,603

Tangible common

equity to tangible assets

6.81

6.62

Common shares outstanding at end of period

67,937,468

70,141,291

Tangible book value

per common share

75.41

68.16

Quarterly average

Total stockholders’

equity [1]

6,849,789

6,620,766

Average unrealized (gains) losses on AFS securities

transferred to HTM

334,183

505,791

Adjusted total stockholder's equity

7,183,972

7,126,557

Less: Preferred Stock

(22,143)

Less: Goodwill

(802,953)

(804,411)

Less: Other intangibles

(6,096)

(7,288)

Total tangible common

equity

6,352,780

6,292,715

Return on average tangible common equity

13.26

11.22

[1] Average balances exclude unrealized gains or

losses on debt securities available-for-sale.

157

RISK MANAGEMENT

Market / Interest Rate Risk

The Corporation’s assets that are mainly subject to market valuation risk are debt securities classified as available-for-sale. Refer to

Notes 5 and 6 to

the Consolidated Financial Statements for further information on

the debt securities available-for-sale and held-to-

maturity portfolios.

Debt securities

classified as

available-for-sale and

held-to-maturity amounted

$20.5 billion

and

$7.5 billion,

respectively, as of June 30, 2025. Other assets subject to market risk include mortgage servicing rights ("MSRs") with a fair value of

$103.1 million as of June 30, 2025.

Interest Rate Risk (“IRR”)

The Corporation’s net interest income is subject

to various categories of interest rate risk,

including repricing, basis, yield curve and

option risks.

In managing

interest rate

risk, management may

alter the

mix of

floating and

fixed rate

assets and

liabilities, change

pricing

schedules,

adjust

maturities

through

sales

and

purchases

investment

securities,

and

enter

into

derivative

contracts,

among other alternatives.

Management utilizes various tools to assess IRR, including Net Interest

Income (“NII”) simulation modeling, static gap analysis, and

Economic Value of Equity (“EVE”) to monitor the risk arising from the dynamic characteristics of assets and liabilities subject to IRR.

The

three

methodologies complement

each

other

and

are

used jointly

the

evaluation of

the

Corporation’s IRR.

NII simulation

modeling is prepared for a five-year period, which in conjunction with the EVE analysis, provides management a better view of long-

term IRR.

Net

interest

income

simulation

analysis

performed by

legal

entity and

consolidated

basis

used

estimate the

potential

change

net

interest

income

resulting

from

hypothetical

changes

interest

rates.

Sensitivity

analysis

calculated

using

simulation model which incorporates actual balance

sheet figures detailed by maturity and interest

yields or costs.

Management assesses interest

rate risk

by comparing various

NII simulations under

different interest rate

scenarios to assess

the

degree of

change and

the projected

shape of

the yield

curve. Management

also performs

analyses to

isolate and

measure basis

and

prepayment

risk

exposures.

These

models

are

periodically

monitored.

Assumptions

are

validated

management

and

are

subject to independent validations according to the Corporations’

Model Governance Policy.

The Corporation processes NII

simulations under interest rate

scenarios in which the

yield curve is assumed

to rise and

decline by

the same magnitude

(parallel shifts). The

rate scenarios considered in

these market risk

simulations include instantaneous parallel

changes of

-100,

-200, +100,

and +200

basis points

during the

succeeding twelve-month

period. Assumptions

included in

these

analyses

include

that

the

balance

sheet

remains

flat,

relative

levels

market

interest

rates

across

all

yield

curve

points

and

indexes, interest rate spreads, loan

prepayments and deposit elasticity.

Thus, they should not be

relied upon as indicative of

actual

results

and

not

contemplate

actions

that

management

may

engage

response

future

changes

interest

rates.

Additionally,

the Corporation

is also

subject to

the risk

inherent in

the use

of different

rate indexes

for the

repricing of

assets and

liabilities, as well the

risk of pricing lags

due to contractual or

timing differences between the

market and management response

changes

the

rate

environment.

These

forward-looking

computations

are

management’s

best

estimate

based

known

and

available information and actual results

may differ.

The following table presents the

results of the simulations at

June 30, 2025 and

December 31, 2024, assuming a static balance

sheet and parallel changes over flat spot rates

over a one-year time horizon:

158

Table 11

- Net Interest Income Sensitivity (One Year

Projection)

June 30, 2025

December 31, 2024

(Dollars in thousands)

Amount Change

Percent Change

Amount Change

Percent Change

Change in interest rate

+200 basis points

22,433

0.85

44,747

1.78

+100 basis points

10,515

0.40

22,917

0.91

-100 basis points

(12,636)

(0.48)

9,157

0.36

-200 basis points

(18,563)

(0.71)

588

0.02

As of June

30, 2025, NII simulations

show the Corporation maintains

an asset sensitive position

that is symmetric

in the rising

and

declining rates scenarios. Compared to the

results as of December 31, 2024,

the variation in sensitivity and the

resulting profile are

mainly driven

by updated

deposit beta

model assumptions that

reflect lower

elasticity in

declining rate

scenarios. In

declining rate

scenarios, the reduction in net interest income is driven by the repricing of short-term assets and variable rate loans offset in part by

declining

deposit

costs.

rising rate

scenarios, Popular’s

net interest

income

would increase

due

the

repricing

short-term

assets,

variable

rate

loans,

and

intermediate

maturity

assets

coming

due

within

one

year,

that

are

offset

part

increased

deposits costs

due to

BPPR’s large

proportion of

market-linked Puerto Rico

public sector

deposits. Changes

in the

balance sheet

during the quarter

led to reduced

asset sensitivity.

The Corporation purchased

$2.4 billion in

U.S. Treasury

Notes with an

average

maturity

approximately

1.5

years.

Higher

loan

balances

and

growth

market-linked

Puerto

Rico

public

sector

deposits

also

contributed to reduced asset sensitivity.

The

Corporation’s

loan

and

investment

portfolios

are

subject

prepayment

risk.

Prepayment

risk

also

could

have

significant

impact on the duration of mortgage-backed securities

and collateralized mortgage obligations.

Trading

The Corporation

engages in

trading activities

in the

ordinary course

of business

at its

subsidiaries, BPPR

and Popular

Securities.

Popular Securities’

trading activities

consist primarily

of market-making

activities to

meet expected

customers’ needs

related to

its

retail brokerage business, and purchases and sales of

U.S. Government and government sponsored securities with the objective of

realizing gains

from expected

short-term price

movements. BPPR’s

trading activities consist

primarily of

holding U.S.

Government

sponsored

mortgage-backed

securities

and

economic

hedges

the

market

risk

with

“TBA”

(to-be-announced)

market

transactions. In

addition, BPPR

uses forward

contracts or

TBAs that

have characteristics

similar to

that of

the forecasted

security

and its conversion timeline to hedge its securitization

pipeline.

At June 30,

2025, the Corporation held

trading securities with a

fair value of

$29.6 million, representing 0.04%

of the Corporation’s

total assets, compared

with $32.8 million

and 0.05%, respectively,

at December 31,

2024. The trading

portfolio consists principally

of investment grade securities such as mortgage-backed securities of $23.0

million with a weighted average yield of 5.28% and U.S.

Treasuries of $5.8 million with a weighted average yield of 3.41% at June 30, 2025

and $29.1 million with a yield of 5.54% and $2.8

million with a yield of 3.28%, respectively, as of December 31, 2024.

The Corporation’s trading activities are

limited by internal policies. For each

of the two subsidiaries, the

market risk assumed under

trading

activities

measured

the

5-day

net

value-at-risk

(“VAR”),

with

confidence

level

99%.

The

VAR

measures

the

maximum estimated loss that may occur over a

5-day holding period, given a 99% probability.

The Corporation’s trading portfolio had a 5-day VAR of $0.4 million for the last week

in June 2025. VAR models include assumptions

and estimates

thus actual

results could

differ from

the outputs

from these

models and

assumptions. Back-testing is

performed on

model results to compare actual results against maximum

estimated losses, in order to evaluate model

and assumptions accuracy.

In the opinion of management, the size and composition

of the trading portfolio does not represent

a significant source of market risk

for the Corporation.

159

Liquidity

Liquidity Risk Management Process

The Corporation

has adopted

policies and

limits to

monitor the

Corporation’s liquidity

position and

that of

its banking

subsidiaries.

Refer to

the Enterprise

Risk Management

section of

Management’s Discussion

and Analysis

included in

the 2024

Form 10-K

for

information on the framework

in place to monitor,

review, and approve

policies to measure, limit and

manage funding activities and

strategies

impacting

liquidity

risk.

Additionally,

contingency

funding

plans

are

used

model

various

stress

events

different

magnitudes that

affect different

time horizons,

to assist

management in

evaluating the

size of

the liquidity

buffers needed

if those

events occur. However,

such models may not predict

accurately how the market and customers

might react to every

event and are

dependent on

many assumptions.

The objective

of effective

liquidity management

is to

ensure that

the Corporation

has sufficient

liquidity

meet

all

its

financial

obligations,

finance

expected

future

growth,

fund

planned

capital

distributions

and

maintain

reasonable safety margin for cash needs under both

normal and stressed market conditions.

Sources of Liquidity

Deposits, including

customer deposits,

brokered deposits

and public

funds deposits,

continue to

be the

most significant

source of

funds for the Corporation,

representing

88% and 89% of

funding of the Corporation’s

total assets at June

30, 2025 and December

31, 2024, respectively.

The ratio of

total ending loans to

deposits remained at

57% at June

30, 2025 and

December 31, 2024.

addition to

traditional deposits,

the Corporation

maintains borrowing

arrangements, which

amounted to

$1.4 billion

in outstanding

balances at June 30, 2025 (December 31, 2024 - $1.2 billion). A detailed description of the Corporation’s borrowings, including their

terms, is

included in

Note 15

to the

Consolidated Financial

Statements. Also,

the Consolidated

Statements of

Cash Flows

in the

accompanying Consolidated Financial Statements provide

information on the Corporation’s cash inflows and outflows.

The

following

sections

provide

further

information

the

Corporation’s

major

funding

activities

and

needs,

well

the

risks

involved in these activities.

Banking Subsidiaries

Primary

sources of

funding

for the

Corporation’s

banking subsidiaries

(BPPR and

or,

collectively,

“the banking

subsidiaries”)

include

retail,

commercial

and

public

sector

deposits,

brokered

deposits,

unpledged

investment

securities,

mortgage

loan

securitization and, to a lesser extent, loan sales. In

addition, the Corporation maintains borrowing facilities with the FHLB and at the

discount window

of the

Federal Reserve

Bank of

New York

(the “FRB”)

and has

a considerable

amount of

collateral pledged

that

can be used to raise funds under these facilities.

During the second quarter of 2025, BPPR was able to increase its available

liquidity by approximately $2.9 billion after the merger of

Popular Auto, LLC with

and into BPPR, effective

on May 1,

2025, that allowed BPPR

to pledge auto loans

and leases as collateral

under the federal

reserve’s discount

window. At

June 30,

2025, the Corporation’s

available liquidity increased

to $26.1 billion

from

$21.6

billion on

December 31,

2024. During

the second

quarter of

2025, the

Corporation had

no material

incremental use

of its

available liquidity sources. The liquidity sources of

the Corporation at June 30, 2025 are presented

in Table 12 below:

160

Table 12 - Liquidity Sources

June 30, 2025

December 31, 2024

(In thousands)

BPPR

Popular U.S.

Total

BPPR

Popular U.S.

Total

Unpledged securities and unused funding

sources:

Money market (excess funds at the

Federal Reserve Bank)

4,753,672

1,576,770

6,330,442

4,882,358

1,488,857

6,371,215

Unpledged securities

4,453,281

519,711

4,972,992

3,806,066

522,869

4,328,935

FHLB borrowing capacity

3,178,798

816,840

3,995,638

2,777,090

1,058,921

3,836,011

Discount window of the Federal Reserve

Bank borrowing capacity

7,895,298

2,875,787

10,771,085

4,839,388

2,178,646

7,018,034

Total available liquidity

20,281,049

5,789,108

26,070,157

16,304,902

5,249,293

21,554,195

Refer

Note

the

Consolidated

Financial

Statements

for

additional

information

the

Corporation’s

borrowing

facilities

available through its banking subsidiaries.

The principal

uses of

funds for

the banking

subsidiaries include

loan originations,

investment portfolio

purchases, loan

purchases

and repurchases, repayment of outstanding obligations (including deposits), advances on certain serviced portfolios and operational

expenses. Also, the

banking subsidiaries assume liquidity

risk related to collateral

posting requirements for certain

activities mainly

connection

with

contractual

commitments,

recourse

provisions,

servicing

advances,

derivatives

and

credit

card

licensing

agreements.

The banking

subsidiaries maintain

sufficient funding

capacity to

address large

increases in

funding requirements

such as

deposit

outflows.

The

Corporation has

established

liquidity

guidelines

that

require

the

banking

subsidiaries

have

sufficient

liquidity

cover all short-term borrowings and a portion of deposits.

Deposits are

a key

source of

funding. Refer

to Table

7 for

a breakdown

of deposits

by major

types. Core

deposits are

generated

from a large base of consumer, corporate and public sector customers. Core deposits

include certificates

of deposit under $250,000,

all

interest-bearing

transactional

deposit

accounts,

non-interest-bearing

deposits,

and

savings

deposits.

Core

deposits

exclude

brokered

deposits

and

certificates

deposit

over

$250,000.

Core

deposits,

excluding

P.R.

public

funds,

which

are

fully

collateralized, have

historically provided

the Corporation

with a

sizable source

of relatively

stable and

low-cost funds.

P.R.

public

funds, while

linked to

market interest

rates, provide

a stable

source of

funding with

an attractive

earning spread.

As of

June 30,

2025, total Puerto Rico public sector deposits were

$20.9 billion, compared to $19.5 billion at

December 31, 2024.

Core deposits

continue to

represent 92%

of total

deposits at

$61.6

billion, as

of June

30, 2025,

and compared

December 31,

2024. Core deposits financed 85% of the Corporation’s

earning assets at June 30, 2025, compared

to 86% at December 31, 2024.

The distribution by maturity

of certificates of deposit

with denominations of $250,000 and

over at June 30,

2025 is presented in

the

table that follows:

161

Table 13 - Distribution by

Maturity of Certificates of Deposit of $250,000 and Over

(In thousands)

3 months or less

2,591,418

Over 3 to 12 months

992,191

Over 1 year to 3 years

287,373

Over 3 years

147,470

Total

4,018,452

The

Corporation

had

$1.7

billion

brokered

deposits

June

30,

2025,

which

financed

approximately

its

total

assets

(December 31, 2024 - $1.6 billion and 2%,

respectively).

As of

June 30,

2025, the

banking subsidiaries had

sufficient current

and projected

liquidity sources

to meet

their anticipated

cash

flow obligations, as well as special needs and off-balance sheet commitments,

in the ordinary course of business and have sufficient

liquidity

resources to

address

stress

event.

Although

the

banking

subsidiaries

have

historically

been

able

replace

maturing

deposits and advances, no assurance can

be given that they would

be able to replace those

funds in the future if

the Corporation’s

financial

condition

general

market

conditions

were

deteriorate.

The

Corporation’s

financial

flexibility

would

severely

constrained

the

banking

subsidiaries

are

unable

maintain

access

funding

adequate

funding

not

available

accommodate future

financing needs

acceptable interest

rates. The

banking subsidiaries

also

are required

deposit cash

qualifying

securities

meet

margin

requirements

repurchase

agreements,

deposit

agreements

and

other

collateralized

borrowing facilities. To

the extent that

the value of

securities previously pledged as

collateral declines because of

market changes,

the Corporation will be required to deposit additional cash or securities to meet its margin or collateral requirements and would need

rely

heavily

alternative

funding

sources.

these

scenarios,

the

Corporation’s

financial

flexibility

and

ability

grow

revenues may not increase proportionately to cover costs and

profitability would be adversely affected.

The Corporation considers balances in

excess of $250,000 to have a

higher potential liquidity risk.

Table

14 reflects the aggregate

balance in

deposit accounts

in excess

of $250,000,

including collateralized

public funds

and deposits

outside of

the U.S.

and its

territories.

Collateralized public funds, as presented in Table 14, represent public deposit balances from governmental

entities in the

U.S.

and

its

territories,

including

Puerto

Rico

and

the

United

States

Virgin

Islands,

collateralized

based

such

jurisdictions’

applicable collateral requirements.

162

Table 14 - Deposits

30-Jun-25

Popular, Inc.

(Dollars in thousands)

BPPR

% of Total

Popular U.S.

% of Total

(Consolidated)

% of Total

Deposits:

Deposits balances under $250,000 [1]

23,741,443

8,341,661

32,083,104

Transactional deposits balances over

$250,000

7,968,081

2,042,469

10,010,550

Time deposits balances over $250,000

2,262,268

833,527

3,095,795

Uninsured foreign deposits

444,748

Collateralized public funds

21,269,940

313,354

21,583,294

Intercompany deposits

195,313

415,184

Total deposits

55,881,793

100

11,946,195

100

67,217,491

100

[1] Includes the first $250,000 in balances of transactional

and time deposit accounts with balances in excess

of $250,000.

31-Dec-24

Popular, Inc.

(Dollars in thousands)

BPPR

% of Total

Popular U.S.

% of Total

(Consolidated)

% of Total

Deposits

Deposits balances under $250,000 [1]

23,588,937

7,961,334

31,550,271

Transactional deposits balances over

$250,000

8,046,175

1,944,674

9,990,849

Time deposits balances over $250,000

1,991,934

813,424

2,805,358

Uninsured foreign deposits

450,068

Collateralized public funds

19,771,083

316,716

20,087,799

Intercompany deposits

205,839

667,839

Total deposits

54,054,036

100

11,703,987

100

64,884,345

100

[1] Includes the first $250,000 in balances of transactional

and time deposit accounts with balances in excess

of $250,000.

Bank Holding Companies

The principal

sources of

funding for

the BHCs,

which are

Popular,

Inc.

(holding company

only) and

PNA, include

cash on

hand,

investment

securities,

dividends

received from

banking

and

non-banking subsidiaries,

asset sales,

credit

facilities

available from

affiliate banking subsidiaries and proceeds from potential securities offerings.

Dividends from banking and non-banking subsidiaries

are subject

to various

regulatory limits

and authorization

requirements imposed

by banking

regulators, including

the FED

and the

NYDFS, that may limit the ability of those subsidiaries

to act as a source of funding to the BHCs.

The principal uses of these funds include the repayment of debt, interest payments to holders of senior debt and junior subordinated

deferrable interest debentures (related to trust preferred securities), the payment of dividends to common stockholders,

repurchases

of the Corporation’s securities and capitalizing its subsidiaries.

The outstanding balance of notes payable at the

BHCs amounted to $594 million at June 30, 2025

and December 31, 2024.

The contractual maturities of the BHCs notes payable

at June 30, 2025 are presented in Table 15.

Table 15

- Distribution of BHC's Notes Payable by Contractual

Maturity

Year

(In thousands)

2028

395,865

Later years

198,386

Total

594,251

163

As of

June 30,

2025, the

BHCs had

cash and

money markets

investments totaling

$503 million

and borrowing

potential of

$165

million

from

its

secured

facility

with

BPPR.

The

BHCs’

liquidity

position

continues

adequate

with

sufficient

cash

hand,

investments and

other sources of

liquidity that are

expected to be

sufficient to

meet all

interest payments and

dividend obligations

for the

foreseeable future.

Additionally,

the Corporation’s

latest quarterly

paid dividend

was $0.70

per share

or approximately

$48

million per quarter.

The BHCs have in

the past borrowed in the

corporate debt market primarily to finance

their non-banking subsidiaries and refinance

debt

obligations.

These

sources

funding

are

costly

given

that

two

out

three

principal

credit

rating

agencies

rate

the

Corporation’s debt

securities below

“investment grade”.

The Corporation

has a

shelf registration

statement filed

and effective

with

the

Securities

and

Exchange

Commission,

which

permits

the

Corporation

issue

unspecified

amount

debt

equity

securities.

Non-Banking Subsidiaries

The

principal

sources

funding

for

the

non-banking

subsidiaries

include

internally

generated

cash

flows

from

operations,

loan

sales, repurchase agreements, capital

injections and borrowed funds

from their direct

parent companies or the

holding companies.

The principal uses of funds for the non-banking

subsidiaries include repayment of maturing debt,

operational expenses and payment

of dividends to the BHCs.

Dividends

During

the

six

months

ended June

30,

2025,

the

Corporation declared

cash

dividends of

$1.40

per

common

outstanding

($96.2 million in the

aggregate). The dividends for the

Corporation’s Series A preferred stock amounted to

$0.7 million.

On July 16,

2025, the

Corporation announced an

increase in its

quarterly common stock

dividend from $0.70

to $0.75

per share, commencing

with the dividend payable in the fourth quarter of

2025, subject to the approval by the Corporation’s

Board of Directors.

During the six

months ended June 30,

2025, the BHCs

received dividends and distributions

amounting to $200 million

from BPPR,

$23 from

Popular International

Bank, Inc.

(“PIBI”) and

$15 million

from

its

other non-banking

subsidiaries. Dividends

from BPPR

constitute Popular,

Inc.’s primary

source of

liquidity.

In addition,

during the

six months

ended June

30, 2025,PIBI,

a wholly

owned

subsidiary of Popular, Inc., received $20.0 million in cash dividends

and $5.3 million in stock dividends from its investment

in BHD.

addition to

regulatory

limits previously

discussed, the

ability

of a

bank

subsidiary to

up-stream dividends

its

BHC could

impacted by

its financial

performance and

capital, including

tangible and

regulatory capital,

thus potentially

limiting the

amount of

cash up

streamed to

the BHCs

from the

banking subsidiaries.

This could,

in turn,

affect BHC’s

ability to

declare dividends

on its

outstanding common

and

preferred stock,

repurchase its

securities

meet

its

debt

obligations, for

example. At

June

30,

2025,

BPPR could declare

a dividend of

up to

approximately $209 million

without prior approval

of the Federal

Reserve Board due

to its

retained income, declared dividend activity and transfers to statutory reserves over the measurement period.

In addition, pursuant to

the

FRB

requirements, PB

may not

declare

pay

dividend without

the

prior

approval

the

Federal Reserve

Board

and

the

NYSDFS.

Other Funding Sources and Capital

addition to

cash

reserves held

the

FRB

that

totaled $6.3

billion at

June

30, 2025,

the

debt securities

portfolio provides

additional

source

liquidity,

which

may

realized

through

either

securities

sales,

collateralized

borrowings

repurchase

agreements.

The

Corporation’s

debt

securities

portfolio

consists

primarily

liquid

U.S.

government

debt

securities,

U.S.

government

sponsored

agency

debt

securities,

U.S.

government

sponsored

agency

mortgage-backed

securities,

and

U.S.

government

sponsored

agency

collateralized

mortgage

obligations

that

can

used

raise

funds

the

repo

markets.

The

availability

repurchase

agreements

would

subject

having

sufficient

unpledged

collateral

available

the

time

the

transactions are

consummated, in addition

to overall

liquidity and

risk appetite

of the

various counterparties.

Refer to

Table

12 for

details of

the Corporation’s

unpledged debt

securities and

available credit

facilities with

the FHLB

and the

discount window

of the

Federal Reserve Bank. A substantial portion

of these debt securities could

be used to raise financing

in the U.S. money markets

from secured lending sources, subject to changes in

their fair market value and customary adjustments (haircuts).

Additional

liquidity

may

provided

through

loan

maturities,

prepayments

and

sales.

The

loan

portfolio

provides

source

collateral to

secure the

available credit

facilities with

the FHLB

and the

discount window

of the

Federal Reserve

Bank. After

the

merger of Popular Auto LLC into its

parent company BPPR, effective on May 1, 2025, the

Corporation has $2.9 billion in auto loans

pledged at June 30, 2025, in

addition to mortgage loans, to secure credit

facilities with the Federal Reserve's discount window.

The

164

loan portfolio

can also

be used to

obtain funding

in the

capital markets. Mortgage

loans and

some types of

consumer loans, have

secondary markets which the Corporation could use.

Off-Balance Sheet Arrangements and Other Commitments

In the ordinary course

of business, the Corporation

engages in financial transactions that

are not recorded on

the balance sheet or

may be recorded on the balance sheet in amounts that are different than the full contract or notional amount of the transaction. As a

provider of

financial services,

the Corporation

routinely enters

into commitments

with off-balance

sheet risk

to meet

the financial

needs

its

customers.

Refer

Note

the

Consolidated

Financial

Statements

for

information

the

Corporation’s

commitments to extent credit and other non-credit commitments.

Other types

of off-balance

sheet arrangements

that the

Corporation enters

in the

ordinary course

of business

include derivatives,

operating

leases

and

provision

guarantees,

indemnifications,

and

representation

and

warranties.

Refer

Note

the

Consolidated

Financial

Statements

for

information

operating

leases

and

Note

the

Consolidated

Financial

Statements for

a detailed

discussion related

to the

Corporation’s guarantees,

indemnifications obligations, and

representation and

warranties arrangements.

The Corporation monitors its cash requirements, including

its contractual obligations and debt commitments.

Financial Information of Guarantor and Issuers of Registered

Guaranteed Securities

The principal sources of funding for Popular, Inc. Holding Company (“PIHC”) and Popular North America, Inc. (“PNA”) have included

dividends received

from their

banking and

non-banking subsidiaries subject

to statutory

provisions that

limit dividends

paid by

the

banking subsidiary without regulatory approval,

asset sales and proceeds from the issuance

of debt and equity.

The Corporation ("PIHC") is

the parent holding company

of Popular North America (“PNA”)

and operates financial services through

its subsidiaries. PNA, a wholly owned subsidiary of Popular, Inc., manages entities such as Equity One, Inc., and PB, including PB’s

subsidiaries: Popular Equipment Finance, LLC,

Popular Insurance Agency, U.S.A., and E-LOAN, Inc.

PNA has issued junior subordinated debentures guaranteed by PIHC (the “obligor group”), purchased by statutory

trusts established

by the Corporation using proceeds from trust preferred

securities (“capital securities”) and common securities

of the trusts.

PIHC guarantees

the junior

subordinated debentures

issued by

PNA. If

PIHC fails

to make

interest payments

on the

debentures

held by the trust,

the trust will not

distribute payments on the

capital securities. The guarantee

ranks subordinate and junior

in right

payment to

all

other liabilities

PIHC and

equally with

all

other PIHC-issued

guarantees, allowing

direct

legal

action against

PIHC without involving other entities.

Funding

for

PIHC

and

PNA

includes

dividends

from

subsidiaries,

asset

sales,

and

proceeds

from

debt

and

equity

issuance.

Statutory provisions limit the dividends an insured

depository institution can pay to its holding

company without regulatory approval.

The summarized

financial information

below shows

the combined

financial position

of the

obligor group

as of

June 30,

2025, and

December 31, 2024, and the results of

their operations for the six-month period ended June

30, 2025 and June 30, 2024. Excluded

are investments and equity in earnings from subsidiaries

and affiliates outside the obligor group.

Intercompany balances

and transactions

within the

obligor group

have been

eliminated. Material

amounts due

from, due

to, and

transactions with subsidiaries and affiliates are shown separately. Related party transactions

are also presented separately.

165

Table 16 - Summarized Statement

of Condition

(In thousands)

June 30, 2025

December 31, 2024

Assets

Cash and money market investments

502,784

634,809

Investment securities

35,557

35,150

Accounts receivables from non-obligor subsidiaries

29,111

14,602

Other loans (net of allowance for credit losses of $197 (2024

- $281))

24,791

25,381

Investment in equity method investees

5,281

5,279

Other assets

83,401

65,483

Total assets

680,925

780,704

Liabilities and Stockholders' equity

Accounts payable to non-obligor subsidiaries

5,004

12,163

Notes payable

594,251

593,571

Other liabilities

129,332

126,718

Stockholders' (deficit) equity

(47,662)

48,252

Total liabilities and

stockholders' equity

680,925

780,704

Table 17 - Summarized Statement

of Operations

For the period ended

(In thousands)

June 30, 2025

June 30, 2024

Income:

Dividends from non-obligor subsidiaries

215,100

313,000

Interest income from non-obligor subsidiaries and affiliates

2,248

7,106

Earnings (losses) from investments in equity method investees

(10)

Other operating income

6,155

2,439

Total income

223,504

322,535

Expenses:

Services provided by non-obligor subsidiaries and affiliates

(net of

reimbursement by subsidiaries for services provided by parent

$127,054 (2024 - $120,987))

7,739

6,447

Other expenses

14,359

22,685

Income tax expense

[1]

5,952

22,208

Total expenses

28,050

51,340

Net income

195,454

271,195

[1] The

net income

for the

six months

ended

June

30, 2024,

included

$22.9

million

expenses,

which

$16.5

million

was

reflected

income tax

expense and

$6.4 million

was reflected

in other

operating expenses,

related to

an out-of-period

adjustment associated

with the

Corporation’s U.S.

subsidiary’s non-payment

of taxes

on certain

intercompany distributions

to the

Bank Holding

Company (BHC)

in Puerto

Rico, a foreign corporation for U.S. tax purposes.

In addition to the

dividend income reflected in the

Statement of Operations table

above, during the six months

ended June

30,

2025,

the

obligor

group

recorded

$23.0

million

dividend

distributions

from

non-obligor

subsidiary

which

was

recorded as a reduction to the investment (2024 -

$67.4 million).

166

Risk to Liquidity

The

Corporation’s

liquidity

may

come

under

pressure

experiences

significant

unexpected

cash

outflows

due

deposit

withdrawals, which could arise

from various factors like

economic conditions, loss of

depositor confidence, competition, exogenous

events, regulatory requirements or changes, a

downgrade in credit rating, or other events

causing counterparties to avoid exposure.

Investors should refer to Liquidity Risks section of “Part I, Item 1A”

of 2024 Form 10-K for an additional discussion of liquidity

risks to

which the Corporation is subject.

Credit Risk

Geographic and Government Risk

The Corporation is exposed to geographic and government risk.

The Corporation’s assets and revenue composition by geographical

area and by

business segment reporting are

presented in Note 32 to the

Consolidated Financial Statements. Readers

should refer

Economic

and

Market

Risk

section

and

Business

Risk

Section

“Part

Item

1A”

the

2024

Form

10-K

for

additional

discussion

how

the

Corporation is

impacted

global

and

local

economic

and

market

conditions, including

weakness

the

economy,

particularly in Puerto

Rico, where a

significant portion of

our business is

concentrated. This section

also addresses how

our credit risk and credit

losses can increase to the extent

our loans are concentrated on borrowers engaged in

the same or similar

activities or in borrowers who as a group

may be uniquely or disproportionately affected by certain

economic or market conditions.

Commonwealth of Puerto Rico

significant portion

our financial

activities and

credit

exposure is

concentrated in

the

Commonwealth of

Puerto Rico

(“Puerto

Rico”) which has faced severe economic and fiscal

challenges in the past and may face additional

challenges in the future.

Economic Performance

The latest estimates from the

Puerto Rico Planning Board (the

“Planning Board”) indicate that real

GNP grew by 2.1%

during fiscal

year

2024

(July 2023-June

2024) and

1.1% in

fiscal

year

2025 (July

2024-June 2025).

For fiscal

year 2026

(July

2025-June

2026),

the

Planning

Board

forecasts

modest

GNP

growth

0.5%.

Meanwhile,

the

Puerto

Rico

Economic

Activity

Index

showed a

0.9% year-over-year

decline and

a 0.5%

month-over-month increase

in February

2025. While

this index

is not

a direct

measure of real GNP, it serves as an indicator of ongoing economic activity.

2021

and

2022,

inflation

rose

sharply

the

U.S.

and

Puerto

Rico

due

post-pandemic

demand

and

supply

chain

issues.

Inflation

began

decrease

mid-2022

the

Federal

Reserve

raised

interest

rates,

largely

stabilizing

September

2024,

leading to

a series

of rate

reductions by the

Federal Reserve for

the first

time in

four years.

As of

June 2025,

the U.S.

Consumer

Price Index

showed a

2.7% year-over-year increase,

which is

significantly lower

than peak

2022 inflation

levels but

still above

the

Federal Reserve’s

target. In

Puerto

Rico, the

Consumer Price

Index

increased by

0.9% over

the 12

months ending

in June

2025.

Fiscal Challenges of Puerto Rico and its Municipalities

Puerto Rico’s

economy contracted

in the

2000s, public

debt

increased rapidly

due to

borrowing to

cover

deficits to

pay

debt

service, pension benefits,

and other expenditures.

By 2016, the

government had over

$120 billion in

combined debt and

unfunded

pension liabilities, lost access to capital markets, and

faced a fiscal crisis.

response,

the

U.S.

Congress

enacted

PROMESA

June

2016.

PROMESA

established

Oversight

Board

with

significant

control over Puerto Rico’s

fiscal and economic affairs,

including those of its public

corporations, instrumentalities and municipalities

(collectively, “PR Government Entities”). On August 5, 2025, President Donald J. Trump dismissed five of the seven members of the

Oversight Board, reportedly due to inefficient leadership and

excessive spending. As of the date of

this report, the vacant Oversight

Board seats remain unfilled, and no official replacements have been announced. While the two remaining members may continue to

act

behalf

the

Oversight

Board,

their

authority

limited

with

respect

certain

matters

specified

PROMESA

and

the

Oversight

Board’s

by-laws.

still

too

early

determine

what

impact

these

changes

may

have

the

Oversight

Board’s

operations or on Puerto Rico’s fiscal and economic

affairs.

167

Under PROMESA, the Oversight

Board will remain

in place until market

access is restored and

balanced budgets are achieved for

least

four

consecutive

years.

PROMESA

also

established

two

mechanisms

for

the

restructuring

the

obligations

Government Entities:

(a) Title

III, an

in-court process

akin to

that of

the U.S.

Bankruptcy Code

and which

permits adjustment

of a

broad range

obligations, and

(b) Title

VI,

a largely

out-of-court process

through which

a supermajority

of creditors

can

modifications to debt and bind holdouts.

Since

2017,

Puerto

Rico

and

several

its

instrumentalities

have

availed

themselves

these

mechanisms.

The

Puerto

Rico

government exited Title III in March 2022, and several instrumentalities, such as the Government Development Bank and the Puerto

Rico Highways and Transportation

Authority have also completed

debt restructurings under Titles

III or VI

of PROMESA. However,

the Puerto Rico Electric Power Authority is still undergoing

its debt restructuring.

Puerto

Rico's economic

difficulties

have also

impacted its

municipalities. Historically,

the central

government provided

significant

municipal subsidies.

However,

these, have

decreased pursuant

to fiscal

measures required

by the

Oversight Board.

This decline

has been partly offset by federal disaster and COVID-relief funding received

by municipalities in recent years. The latest Puerto

Rico

fiscal plan proposes a

restructured grant system to enhance

municipal services and encourage accountability through

performance

metrics.

Municipalities

are

subject

PROMESA,

and

the

Oversight

Board

has

required

certain

municipalities

submit

fiscal

plans

and

annual budgets

for review

and approval.

Municipalities are

also required

to seek

Oversight Board

approval to

issue, guarantee

modify

their

debts

and

enter

into

significant

contracts.

date

municipality

has

availed

itself

the

debt

restructuring

mechanisms available to them under PROMESA.

Exposure of the Corporation

The credit

quality of BPPR’s

loan portfolio

reflects, among other

things, the

general economic conditions

in Puerto

Rico and

other

adverse conditions affecting Puerto

Rico consumers and businesses.

Deterioration in the Puerto

Rico economy has resulted

in the

past, and could

result in the future,

in higher delinquencies, greater

charge-offs and increased losses,

which could materially affect

our financial condition and results of operations.

At June

30, 2025,

the Corporation’s

direct exposure

PR Government

Entities totaled

$412 million,

which $362

million were

outstanding, compared

to $336

million, at

December 31,

2024, all

of which

were outstanding.

The Corporation’s

exposure to

Government Entities

at June

30, 2025

included up

$47.4 million

in Automated

Clearing House

(“ACH”) transaction

settlement

exposure, none of which

was outstanding.

Substantially all of the

Corporation’s direct exposure outstanding at

June 30, 2025

were

obligations from various

Puerto Rico municipalities.

In most

cases, these were

“general obligations” of

a municipality,

to which

the

applicable municipality

has

pledged its

good faith,

credit

and unlimited

taxing

power,

or “special

obligations” of

a municipality,

which the applicable municipality has pledged basic property tax or sales tax

revenues.

At June 30, 2025, 81% of the

Corporation’s

exposure to

municipal loans

and securities

was concentrated

in the

municipalities of

San Juan,

Guaynabo, Carolina

and Caguas.

For

additional

discussion

the

Corporation’s

direct

exposure

the

Puerto

Rico

government

and

its

instrumentalities

and

municipalities, refer to Note 20 – Commitments and

Contingencies to the Consolidated Financial

Statements.

In addition,

at June 30,

2025, the Corporation

had $212 million

in loans insured

or securities issued

by PR Governmental

Entities,

but

for which

the principal

source of

repayment is

non-governmental ($220 million

December 31, 2024).

These included

$168

million

residential mortgage

loans

insured

the

Puerto

Rico

Housing

Finance Authority

(“HFA”),

Puerto

Rico

Government

Entity ($176 million at December 31, 2024).

The Corporation also had, at June 30,

2025, $37 million in bonds issued by

HFA which

are secured

by second mortgage

loans on

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

($38 million at

December 31, 2024).

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.

BPPR’s

commercial loan

portfolio also

includes loans

private borrowers

who

are service

providers, lessors,

suppliers or

have

other

relationships

with

the

government.

These

borrowers

could

negatively

affected

deterioration

the

fiscal

and

economic

situation

Government

Entities.

Similarly,

BPPR’s

mortgage

and

consumer

loan

portfolios

include

loans

government

employees

and

retirees,

which

could

also

negatively

affected

fiscal

measures,

such

employee

layoffs

furloughs or reductions in pension benefits, if the

fiscal and economic situation deteriorates.

As of June

30, 2025, BPPR had

$20.9 billion in deposits from

the Puerto Rico government, its

instrumentalities, and municipalities.

The

rate

which

public

deposit

balances

may

decline is

uncertain and

difficult

predict.

The

amount

and

timing

any

such

reduction is likely to

be impacted by,

for example, the level

of federal assistance, the

speed at which such

assistance is distributed

168

and

the financial

condition, liquidity

and cash

management practices

of such

entities, as

well as

the ability

BPPR to

maintain

these customer relationships.

United States Virgin Islands

The

Corporation

has

operations

the

United

States

Virgin

Islands

(the

“USVI”)

and

has

credit

exposure

USVI

government

entities.

The USVI has

been experiencing a

number of fiscal

and economic challenges,

which could adversely

affect the

ability of its

public

corporations and instrumentalities to service their outstanding

debt obligations. PROMESA does not apply to the USVI

and, as such,

there

currently

federal

legislation

permitting

the

restructuring

the

debts

the

USVI

and

its

public

corporations

and

instrumentalities.

Non-Performing Assets

NPAs

include primarily

past-due loans

that are

no longer

accruing interest,

renegotiated loans,

and real

estate property

acquired

through foreclosure. A summary, including certain credit quality metrics, is presented

in Table 18.

The Corporation’s

credit quality

metrics demonstrated

favorable trends

in the

second quarter

of 2025

with improvements

in NPLs

and Net Charge-Offs (NCOs). The Corporation continues to

closely monitor the economic landscape and borrower performance, as

economic

uncertainty

remains

key

consideration.

The

Corporation’s

experience

managing

credit

risk

under

different

macroeconomic and

operating environments and,

more recently,

the steps

taken around

credit tightening

supports management’s

view

that

exposure

riskier

borrowers

adequately

managed.

Nonetheless,

carefully

monitoring

the

performance

our

loan

portfolio and its response to the environment will

continue to be a priority.

Total

NPAs of $357.8 million

as of June 30, 2025 decreased by

$50.3 million when compared with December 31, 2024. Total

NPLs

of $311.6

million decreased by

$39.2 million from December

31, 2024. BPPR’s

NPLs decreased by $34.4

million, mainly driven

lower consumer,

mortgage and commercial

NPLs by $12.9

million, $11.0

million and $8.9

million, respectively.

Popular U.S. NPLs

decreased

$4.7

million,

mostly

driven

decreases

$1.9

million

and

$1.8

million

commercial

and

mortgage

NPLs,

respectively.

On June

30, 2025, the

ratio of

NPLs to total

loans held-in-portfolio was

0.82%, compared to

0.95% on December

31, 2024.

Other

real estate owned loans (“OREOs”) decreased by $11.1 million from December 31, 2024. The decrease in OREO was mainly driven

by the combination of

sales and lower residential

property foreclosures. On June

30, 2025, NPLs secured

by real estate amounted

$189

million

the

Puerto

Rico

operations

and

$50

million

Popular

U.S,

compared

with

$200

million

and

$56

million,

respectively, on December 31, 2024.

The Corporation’s commercial

loan portfolio secured

by real estate

(“CRE”) amounted to

$11.0

billion on June

30, 2025,

with $3.0

billion secured by owner-occupied properties (December

31, 2024 - $10.9 billion and $3.2 billion, respectively).

The

non-owner occupied

CRE portfolio

was $5.5

billion at

June

30, 2025,

split

between $3.3

billion in

BPPR

and $2.2

billion in

Popular U.S.

This portfolio is diversified across sectors: retail (33%), hotels (19%), and office

space (13%) which together represent

two-thirds of

total non-owner

occupied CRE

exposure. Specifically,

office space

leasing accounts

for just

1.8% ($688.8

million) of

the total

loan portfolio,

mainly comprising

mid-rise

properties with

an average

loan size

of $2.4

million, and

is well

diversified by

tenant type.

Within CRE, the

commercial multi-family portfolio is

$2.5 billion (approximately 7%

of total loans),

concentrated in New

York

Metro

($1.5 billion), South Florida ($716.6 million) and Puerto Rico

($202.1 million) regions. In the New York Metro, there is no exposure to

rent-controlled buildings and rent-stabilized

units make up less than 40% of total units,

with most originated after 2019.

CRE NPLs amounted to

$52.5 million on June 30,

2025, compared with $53.7 million

on December 31, 2024. The

CRE NPL ratios

for

the

BPPR

and

Popular

U.S.

segments

were

0.69%

and

0.30%,

respectively,

June

30,

2025,

compared

with

0.64%

and

0.37%, respectively, on December 31, 2024.

169

In addition

to the

NPLs included

in Table

18, on

June 30,

2025, there

were $529

million of

performing loans,

mostly commercial

loans, which in management’s opinion, are currently subject to potential future classification as non-performing (December 31, 2024

- $596 million).

The following table presents the Corporation’s NPAs as of June 30, 2025 and December

31, 2024:

170

Table 18 - Non-Performing

Assets

June 30, 2025

December 31, 2024

(Dollars in thousands)

BPPR

Popular

U.S.

Popular,

Inc.

As a % of

loans HIP

category

Commercial

Commercial multi-family

174

10,751

10,925

0.4

8,700

8,779

0.4

Commercial real estate non-owner

occupied

6,084

7,893

13,977

0.3

6,429

8,015

14,444

0.3

Commercial real estate owner

occupied

27,320

231

27,551

0.9

25,258

5,191

30,449

1.0

Commercial and industrial

8,588

2,836

11,424

0.1

19,335

1,748

21,083

0.3

Total Commercial

42,166

21,711

63,877

0.3

51,101

23,654

74,755

0.4

Leasing

7,976

0.4

9,588

0.5

Mortgage

147,464

28,052

175,516

2.1

158,442

29,890

188,332

2.3

Consumer

Home equity lines of credit

3,120

4.0

3,393

4.6

Personal

17,499

1,094

18,593

1.0

20,269

1,741

22,010

1.2

Auto

40,595

1.1

51,792

1.4

Other

1,948

1.2

899

910

0.5

Total Consumer

60,042

4,214

64,256

0.9

72,960

5,145

78,105

1.1

Total non-performing

loans held-in-

portfolio

257,648

53,977

311,625

0.8

292,091

58,689

350,780

0.9

Other real estate owned (“OREO”)

45,643

483

46,126

57,197

57,268

Total non-performing

assets

[1]

303,291

54,460

357,751

349,288

58,760

408,048

Accruing loans past due 90 days or

[2]

206,205

189

206,394

242,250

190

242,440

Ratios:

Non-performing assets to total assets

0.51

0.34

0.47

0.61

0.37

0.56

Non-performing loans held-in-portfolio

to loans held-in-portfolio

0.96

0.47

0.82

1.12

0.54

0.95

Allowance for credit losses to loans

held-in-portfolio

2.53

0.79

2.02

2.56

0.69

2.01

Allowance for credit losses to non-

performing loans, excluding held-for-

sale

263.63

167.17

246.93

229.61

128.40

212.68

[1] There were no non-performing loans held-for-sale

as of June 30, 2025 and December 31, 2024.

[2] It is the Corporation’s policy to report delinquent

residential mortgage loans insured by FHA or guaranteed

by the VA as accruing

loans past due 90

days or

opposed

non-performing

since

the principal

repayment

is insured.

These

balances

include

$52 million

of residential

mortgage

loans

insured

FHA

guaranteed

the

that

are

longer

accruing

interest

June

30,

2025

(December

31,

2024

$65

million).

Furthermore, the Corporation

has $29 million

in reverse mortgage

loans which are

guaranteed by

FHA, but which

are currently

not accruing interest.

Due to the guaranteed

nature of the loans,

it is the Corporation’s

policy to exclude these

balances from non-performing

assets (December 31,

2024 -

$31 million).

For the quarter ended June 30,

2025, total inflows of NPLs held-in-portfolio, excluding consumer loans,

decreased by $26.1 million,

when compared

to the

inflows for

the same

period in

2024. Inflows

of NPLs

held-in-portfolio at

the BPPR

segment decreased

$8.8 million,

compared to

the same

period in

2024, mainly

driven by

lower mortgage

NPL inflows

by $6.6

million. Inflows

of NPLs

held-in-portfolio at the Popular U.S. segment decreased by

$17.3 million from the same period in

2024, driven by lower commercial

NPL inflows by $16.6 million, as the prior period

was impacted by a single $17.3 million loan.

Tables 19 to 25 present the Corporation’s inflows to NPLs for the quarters and six months ended

June 30, 2025 and 2024.

171

Table 19 - Activity in Non

-Performing Loans Held-in-Portfolio (Excluding Consumer

Loans)

For the quarter ended June 30, 2025

For the six months ended June 30, 2025

(Dollars in thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance

191,103

46,594

237,697

209,543

53,544

263,087

Plus:

New non-performing loans

32,205

8,909

41,114

69,228

17,067

86,295

Advances on existing non-performing loans

Less:

Non-performing loans transferred to OREO

(2,385)

(433)

(2,818)

(4,940)

(433)

(5,373)

Non-performing loans charged-off

(790)

(583)

(1,373)

(1,717)

(1,713)

(3,430)

Loans returned to accrual status / loan collections

(30,503)

(4,744)

(35,247)

(82,484)

(18,740)

(101,224)

Ending balance NPLs

189,630

49,763

239,393

189,630

49,763

239,393

Table 20 - Activity in Non

-Performing Loans Held-in-Portfolio (Excluding Consumer

Loans)

For the quarter ended June 30, 2024

For the six months ended June 30, 2024

(Dollars in thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance

229,796

49,478

279,274

254,476

22,354

276,830

Plus:

New non-performing loans

41,040

25,907

66,947

74,543

61,280

135,823

Advances on existing non-performing loans

298

320

Less:

Non-performing loans transferred to OREO

(4,540)

(24)

(4,564)

(8,649)

(24)

(8,673)

Non-performing loans charged-off

(5,590)

(18)

(5,608)

(13,899)

(968)

(14,867)

Loans returned to accrual status / loan collections

(40,746)

(26,324)

(67,070)

(86,511)

(33,645)

(120,156)

Ending balance NPLs

219,960

49,317

269,277

219,960

49,317

269,277

Table 21 - Activity in Non

-Performing Commercial Loans Held-in-Portfolio

For the quarter ended June 30, 2025

For the six months ended June 30, 2025

(Dollars in thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance

42,597

17,507

60,104

51,101

23,654

74,755

Plus:

New non-performing loans

1,768

5,632

7,400

7,549

11,045

18,594

Advances on existing non-performing loans

Less:

Non-performing loans transferred to OREO

(140)

(260)

Non-performing loans charged-off

(403)

(583)

(986)

(1,142)

(1,713)

(2,855)

Loans returned to accrual status / loan

collections

(1,656)

(865)

(2,521)

(15,082)

(11,312)

(26,394)

Ending balance NPLs

42,166

21,711

63,877

42,166

21,711

63,877

172

Table 22 - Activity in Non

-Performing Commercial Loans Held-in-Portfolio

For the quarter ended June 30, 2024

For the six months ended June 30, 2024

(Dollars in thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance

63,323

21,407

84,730

72,992

11,163

84,155

Plus:

New non-performing loans

4,031

21,940

25,971

8,374

36,979

45,353

Advances on existing non-performing loans

282

302

Less:

Non-performing loans transferred to OREO

(280)

Non-performing loans charged-off

(5,700)

(13,699)

(950)

(14,649)

Loans returned to accrual status / loan collections

(5,204)

(5,866)

(11,070)

(11,217)

(9,731)

(20,948)

Ending balance NPLs

56,170

37,763

93,933

56,170

37,763

93,933

Table 23 - Activity in Non

-Performing Construction Loans Held-in-Portfolio

For the quarter ended June 30, 2024

For the six months ended June 30, 2024

(Dollars in thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance

6,378

Less:

Loans returned to accrual status / loan collections

(6,378)

Ending balance NPLs

173

Table 24 - Activity in Non

-Performing Mortgage Loans Held-in-Portfolio

For the quarter ended June 30, 2025

For the six months ended

June 30, 2025

(Dollars in thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance

148,506

29,087

177,593

158,442

29,890

188,332

Plus:

New non-performing loans

30,437

3,277

33,714

61,679

6,022

67,701

Advances on existing non-performing loans

Less:

Non-performing loans transferred to OREO

(2,245)

(433)

(2,678)

(4,680)

(433)

(5,113)

Non-performing loans charged-off

(387)

(575)

Loans returned to accrual status / loan

collections

(28,847)

(3,879)

(32,726)

(67,402)

(7,428)

(74,830)

Ending balance NPLs

147,464

28,052

175,516

147,464

28,052

175,516

Table 25 - Activity in Non

-Performing Mortgage Loans Held-in-Portfolio

For the quarter ended June 30, 2024

For the six months ended June 30, 2024

(Dollars in thousands)

BPPR

Popular U.S.

Popular, Inc.

BPPR

Popular U.S.

Popular, Inc.

Beginning balance

166,473

28,071

194,544

175,106

11,191

186,297

Plus:

New non-performing loans

37,009

3,967

40,976

66,169

24,301

90,470

Advances on existing non-performing loans

Less:

Non-performing loans transferred to OREO

(4,260)

(24)

(4,284)

(8,369)

(24)

(8,393)

Non-performing loans charged-off

110

(18)

(200)

(18)

(218)

Loans returned to accrual status / loan collections

(35,542)

(20,458)

(56,000)

(68,916)

(23,914)

(92,830)

Ending balance NPLs

163,790

11,554

175,344

163,790

11,554

175,344

174

Loan Delinquencies

Another key measure used to evaluate and

monitor the Corporation’s asset quality is loan

delinquencies. Loans delinquent 30 days

or more, as a percentage of their related portfolio

category on June 30, 2025 and December 31, 2024,

are presented below.

Table 26 - Loan Delinquencies

(Dollars in thousands)

June 30, 2025

December 31, 2024

Loans delinquent

30 days or more

Total loans

Total delinquencies

as a percentage

of total loans

Loans delinquent

30 days or more

Total loans

Total delinquencies

as a percentage

of total loans

Commercial

Commercial multi-family

21,937

2,520,789

0.87

15,826

2,399,620

0.66

Commercial real estate

non-owner occupied

17,272

5,521,374

0.31

24,925

5,363,235

0.46

Commercial real estate

owner occupied

41,413

3,003,855

1.38

42,311

3,157,746

1.34

Commercial and industrial

37,213

8,043,752

0.46

49,942

7,741,562

0.65

Total Commercial

117,835

19,089,770

0.62

133,004

18,662,163

0.71

Construction

3,720

1,468,201

0.25

1,039

1,263,792

0.08

Leasing

36,714

1,983,068

1.85

39,641

1,925,405

2.06

Mortgage

[1]

728,253

8,444,427

8.62

798,130

8,114,183

9.84

Consumer

Credit cards

48,745

1,215,293

4.01

59,078

1,218,079

4.85

Home equity lines of credit

4,682

77,479

6.04

5,054

73,571

6.87

Personal

51,109

1,876,463

2.72

57,835

1,855,244

3.12

Auto

165,642

3,861,702

4.29

191,008

3,823,437

5.00

Other

5,567

168,775

3.30

3,930

171,778

2.29

Total Consumer

275,745

7,199,712

3.83

316,905

7,142,109

4.44

Loans held-for-sale

2,898

5,423

Total

1,162,267

38,188,076

3.04

1,288,719

37,113,075

3.47

[1]

Loans delinquent 30 days or more includes $0.4 billion

of residential mortgage loans insured by FHA or guaranteed

by the VA as of June

30,

2025 (December 31, 2024 - $0.4 billion). Refer to Note

7 to the Consolidated Financial Statements for additional

information of guaranteed loans.

Allowance for Credit Losses Loans Held-in-Portfolio

The ACL

represents management’s

estimate of

expected credit

losses through

the remaining

contractual life

of the

different loan

segments, impacted by expected prepayments. The ACL

is maintained at a sufficient

level to provide for estimated credit

losses on

collateral dependent loans as well as loans modified

for borrowers with financial difficulties separately from the remainder

of the loan

portfolio. Refer to

Note 8 to

the Consolidated Financial

Statements, for additional

information on the

Corporation’s methodology to

estimate its ACL.

On June 30,

2025, the ACL increased by

$23.5 million from December 31,

2024 to $769.5 million. The

increase in ACL was

driven

by changes in the economic scenario

probability weights and increases in qualitative reserves, in

response to the current economic

environment uncertainty,

coupled with

reserve build-up associated

with portfolio

growth and

unfavorable changes in

the economic

assumptions used

in the

ACL model.

These increases

were offset

in part

by the

net effect

of changes

in credit

quality and

NCOs

during the period.

Given that any economic outlook is inherently uncertain, the Corporation

leverages multiple scenarios to estimate

its

ACL.

Prior

the

first

quarter

2025,

the

Corporation

assigned

the

baseline

scenario

the

highest

probability

among

the

scenarios

used

estimate

the

ACL,

followed

the

pessimistic

scenario

given

the

uncertainties

the

economic

outlook

and

downside risk, and

the optimistic scenario

had the lowest

probability. During

the first quarter

of 2025, the

Corporation modified the

weight assigned

to the

pessimistic scenario to

be equal

to the

baseline scenario

in response

to the

current economic

uncertainty,

resulting in

an increase

of $18.2

million in

the reserves.

the second

quarter of

2025, the

probability weight

for the

pessimistic

175

scenario was moderately decreased based on changes in the economic outlook and a reassessment of uncertainty compared to the

quarter.

This

change

resulted

$4.5

million

reduction

ACL

reserve

levels,

for

$13.7

million

net

increase

from

December

31,

2024.

The

probability

weight

for

the

pessimistic

scenario

remains

above

the

levels

observed

2024,

given

the

ongoing

economic

uncertainty.

Refer

Note

the

Consolidated

Financial

Statements,

for

additional

information

the

Corporation’s methodology to estimate its ACL, including

probability weights assigned

June

30,

2025,

the

ACL

for BPPR

increased by

$8.6

million

from

December 31,

2024,

driven by

changes

the

probability

weights that resulted

in a

$8.8 million net

ACL increase, coupled

with an increase

in the reserves

for auto loans

due to migrations

between FICO

score categories

and changes

in the

economic scenarios.

This increase

was partially

offset by

lower reserves

for

commercial loans

due to

improvements in credit

quality,

partially offset

by ACL

reserve build-up

due to

portfolio growth. In

PB, on

June

30,

2025,

the

ACL

increased

$14.9

million,

when

compared

December

31,

2024.

This

increase

was

influenced

changes in

the forecast

of the

U.S. unemployment rate

as well

as higher

qualitative reserves for

the CRE

portfolio in

response to

current market volatility and economic uncertainty, coupled

with changes in the probability weights that resulted in a

$4.9 million net

increase.

The Corporation’s ratio of the allowance for credit losses to loans held-in-portfolio was 2.02% on June 30, 2025, compared to 2.01%

December 31,

2024. The

ratio of

the ACL

NPLs held-in-portfolio

stood

246.9%, compared

212.7% on

December 31,

2024.

Tables

27 and

28 detail

the allowance

for credit

losses by

loan categories

and the

percentage it

represents of

total loans

held-in-

portfolio and

NPLs. The

breakdown is

made for

analytical purposes,

and it

is not

necessarily indicative

of the

categories in

which

future loan losses may occur.

176

Table 27 - Allowance for Credit

Losses - Loan Portfolios

June 30, 2025

(Dollars in thousands)

Total ACL

Total loans held-

in-portfolio

ACL to loans held-

in-portfolio

Total non-

performing loans

held-in-portfolio

ACL to non-

performing loans

held-in-portfolio

Commercial

Commercial multi-family

16,781

2,520,789

0.67

10,925

153.60

Commercial real estate non-owner occupied

59,117

5,521,374

1.07

13,977

422.96

Commercial real estate owner occupied

49,051

3,003,855

1.63

27,551

178.04

Commercial and industrial

141,362

8,043,752

1.76

11,424

N.M.

Total Commercial

266,311

19,089,770

1.40

63,877

416.91

Construction

10,579

1,468,201

0.72

Leasing

20,040

1,983,068

1.01

7,976

251.25

Mortgage

85,175

8,444,427

1.01

175,516

48.53

Consumer

Credit cards

92,306

1,215,293

7.60

Home equity lines of credit

1,384

77,479

1.79

3,120

44.36

Personal

103,654

1,876,463

5.52

18,593

557.49

Auto

182,274

3,861,702

4.72

40,595

449.01

Other

7,762

168,775

4.60

1,948

398.46

Total Consumer

387,380

7,199,712

5.38

64,256

602.87

Total

769,485

38,185,178

2.02

311,625

246.93

N.M. - Not meaningful.

Table 28 - Allowance for Credit

Losses - Loan Portfolios

December 31, 2024

(Dollars in thousands)

Total ACL

Total loans held-

in-portfolio

ACL to loans held-

in-portfolio

Total non-

performing loans

held-in-portfolio

ACL to non-

performing loans

held-in-portfolio

Commercial

Commercial multi-family

9,236

2,399,620

0.38

8,779

105.21

Commercial real estate non-owner occupied

54,494

5,363,235

1.02

14,444

377.28

Commercial real estate owner occupied

49,828

3,157,746

1.58

30,449

163.64

Commercial and industrial

146,006

7,741,562

1.89

21,083

692.53

Total Commercial

259,564

18,662,163

1.39

74,755

347.22

Construction

11,264

1,263,792

0.89

Leasing

16,419

1,925,405

0.85

9,588

171.25

Mortgage

82,409

8,114,183

1.02

188,332

43.76

Consumer

Credit cards

99,130

1,218,079

8.14

Home equity lines of credit

1,503

73,571

2.04

3,393

44.30

Personal

102,736

1,855,244

5.54

22,010

466.77

Auto

165,995

3,823,437

4.34

51,792

320.50

Other

7,004

171,778

4.08

910

769.67

Total Consumer

376,368

7,142,109

5.27

78,105

481.87

Total

746,024

37,107,652

2.01

350,780

212.68

177

Annualized net charge-offs (recoveries)

The following

table presents

annualized net charge-offs

(recoveries) to average

loans held-in-portfolio (“HIP”)

by loan

category for

the quarters and six months ended June 30, 2025

and 2024.

Table 29 - Annualized Net Charge

-offs (Recoveries) to Average Loans

Held-in-Portfolio

Quarters ended

June 30, 2025

June 30, 2024

BPPR

Popular U.S.

Popular Inc.

BPPR

Popular U.S.

Popular Inc.

Commercial

―

0.02

0.01

0.20

0.04

0.13

Construction

―

(0.04)

Mortgage

(0.14)

(0.01)

(0.12)

(0.23)

(0.01)

(0.19)

Leasing

0.56

―

0.56

0.60

―

0.60

Consumer

2.29

4.00

2.33

2.68

6.58

2.80

Total annualized

net charge-offs

(recoveries) to average loans held-in-

portfolio

0.61

0.07

0.45

0.79

0.16

0.61

Six months ended

June 30, 2025

June 30, 2024

BPPR

Popular U.S.

Popular Inc.

BPPR

Popular U.S.

Popular Inc.

Commercial

(0.05)

0.02

(0.02)

0.25

0.04

0.15

Construction

―

(0.02)

Mortgage

(0.14)

(0.03)

(0.12)

(0.25)

(0.01)

(0.21)

Leasing

0.62

―

0.62

0.72

―

0.72

Consumer

2.55

3.95

2.59

2.83

7.54

2.98

Total annualized

net charge-offs

(recoveries) to average loans held-in-

portfolio

0.67

0.07

0.49

0.86

0.19

0.66

NCOs for the quarter ended June 30, 2025, amounted

to $42.2 million, decreasing by $11.4 million when compared to the same

period in 2024. The BPPR segment decreased by

$9.1 million, mainly driven by decreases of

$5.6 million and $4.9 million in

consumer and commercial NCOs, respectively. The PB segment NCOs decreased

by $2.3 million, mainly driven by lower

consumer

NCOs by $1.8 million

NCOs for the six months ended June 30, 2025,

amounted to $91.3 million, decreasing by $24.5

million when compared to the same

period in 2024. The BPPR segment decreased by

$18.6 million, mainly driven by decreases of

$14.4 million and $7.0 million in

commercial and consumer NCOs, respectively. The PB segment NCOs decreased

by $5.9 million, mainly driven by lower consumer

NCOs by $4.9 million.

Loan Modifications

For

the

quarter

ended

June

30,

2025,

modified

loans

borrowers

with

financial

difficulty

amounted

$276.9

million,

which

$266.6 million were in

accruing status. The BPPR segment’s

modifications to borrowers with financial difficulty

amounted to $217.5

million, mainly comprised of commercial and mortgage loans of $192.5

million and $17.4 million, respectively. A total of $10.7 million

the

mortgage

modifications

were

government

guaranteed

loans.

The

Popular

U.S.

segment’s

modifications

borrowers with financial difficulty amounted to $59.4 million,

mostly comprised of commercial loans.

Refer

Note

the

Consolidated

Financial

Statements

for

additional

information

modifications

made

borrowers

experiencing financial difficulties.

178

ADOPTION OF NEW ACCOUNTING STANDARDS AND ISSUED BUT NOT

YET EFFECTIVE ACCOUNTING STANDARDS

Refer to Note 3, “New Accounting Pronouncements”

to the Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About

Market Risk

Quantitative and qualitative disclosures for the current

period can be found in the Market Risk

section of this report, which includes

changes in market risk exposures from disclosures presented

in the 2024 Form 10-K.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Corporation’s management,

with the

participation of the

Corporation’s Chief Executive

Officer and Chief

Financial Officer,

has

evaluated the effectiveness of the Corporation’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and

15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report. Based

on such evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer have concluded that,

as of the end of such

period, the Corporation’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a

timely basis,

information required to

be disclosed

by the

Corporation in

the reports

that it

files or

submits under

the Exchange Act

and

such

information

accumulated

and

communicated

management,

appropriate,

allow

timely

decisions

regarding

required disclosures.

Internal Control Over Financial Reporting

There have been no changes in the Corporation’s internal control over financial reporting (as such term is defined in Rules 13a-15(f)

and 15d-15(f) under

the Exchange Act)

that occurred during

the quarter ended

June 30,

2025 that have

materially affected, or

are

reasonably likely to materially affect, the Corporation’s internal control

over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings

For a discussion of Legal Proceedings, see Note 20

to the Consolidated Financial Statements.

Item 1A. Risk Factors

In addition to the other information set forth in

this report, you should carefully consider the risk

factors discussed under “Part I - Item

1A - Risk Factors” in our 2024 Form

10-K. These factors could materially adversely affect our business, financial condition, liquidity,

results of

operations and

capital position,

and could

cause our

actual results

differ

materially from

our historical

results or

the

results contemplated

by the

forward-looking statements

contained in

this report.

Also refer

to the

discussion in

“Part I

- Item

2 –

Management’s Discussion

and Analysis

of Financial

Condition and

Results of

Operations” in

this report

for additional

information

that may supplement or update the discussion

of risk factors below and in our 2024 Form 10-K.

There have been no material changes to the risk

factors previously disclosed under Item 1A of the

Corporation’s 2024 Form 10-K.

The risks described

in our 2024 Form

10-K and in

this report are not

the only risks

facing us. Additional risks

and uncertainties not

currently

known

that

currently

deem

immaterial

also

may

materially

adversely

affect

our

business,

financial

condition, liquidity, results of operations and capital position.

179

Item 2.

Unregistered Sales of Equity Securities and

Use of Proceeds

The Corporation did not have any unregistered

sales of equity securities during the quarter ended

June 30, 2025.

Issuer Purchases of Equity Securities

The following table

sets forth the

details of

purchases of common

stock by

the Corporation and

its affiliated

purchasers during the

quarter ended June 30, 2025:

Issuer Purchases of Equity Securities

Not in thousands

Period

Total Number of

Shares Purchased [1]

Average Price Paid per

Total Number of

Purchased as Part of Publicly

Announced Plans or Programs [2]

Approximate Dollar Value of

Shares that May Yet be

Purchased Under the Plans or

Programs [2]

April 1 - April 30

357,832

87.37

355,539

$129,330,233

May 1 -May 31

447,956

101.50

417,666

$86,774,331

June 1 - June 30

380,593

105.93

363,185

$48,375,729

Total

1,186,381

98.66

1,136,390

$48,375,729

[1]

Includes

2,293,

30,290

and

17,408

the

Corporation’s

common

stock

acquired

the

Corporation

during

April,

May

and

June

2025,

respectively,

in connection

with the

satisfaction of

tax withholding

obligations on

vested awards

of restricted

stock or

restricted stock

units granted

directors and certain

employees under

the Corporation’s

Omnibus Incentive

Plan. The acquired

shares of common

stock were added

back to treasury

stock.

[2] As part of its capital

plan, in July 2024,

the Corporation announced plans

to repurchase up to

$500 million in common

stock and repurchases

began

in August 2024.

As of June 30, 2025,

the Corporation repurchased 4,663,379

shares of common stock for

$451.5 million at an average

price of $96.82

per share, under the previously announced share repurchase

authorization.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Rule 10b5-1 Trading Plans or Other Preplanned Trading Arrangements

Certain of our

officers or directors have

made, and may from

time to time make,

elections to participate in,

and are

participating in

our dividend reinvestment and purchase plan, the

Company stock fund associated with our 401(k)

plans and/or the Company stock

fund associated with

our non-qualified deferred compensation

plans and have shares

withheld to cover

withholding taxes upon the

vesting of

equity awards, which

may be

designed to satisfy

the affirmative defense

conditions of Rule

10b5-1 under the

Exchange

Act or may constitute non-Rule 10b5–1

trading arrangements

(as defined in Item 408(c) of Regulation

S-K).

180

Item 6.

Exhibits

Exhibit Index

Exhibit No

Exhibit Description

10.1

Form of Director Compensation Letter, Election Form, Restricted Stock Award Agreement and Restricted

Stock Unit Award Agreement, effective May 8, 2025

(1)*

10.2

Equity Award Agreement, dated as of June 26, 2025, by and between Ignacio Alvarez and Popular, Inc.

(1)*

10.3

2025 Long-Term Equity Incentive Award Agreement, dated as of June 26, 2025, by and between Javier D.

Ferrer and Popular, Inc.

(1)*

22.1

Issuers of Guaranteed Securities (Incorporated by reference to Exhibit 22.1 of Popular, Inc.’s Annual

Report on Form 10-K for the year ended December 31, 2024)

31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(1)

31.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(1)

32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-

Oxley Act of 2002

(1)

32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-

Oxley Act of 2002 d82325dex322.htm

(1)

101. INS

XBRL Instance Document – the instance document

does not appear in the Interactive Data File because

its XBRL tags are embedded within the Inline Document.

101.SCH

Inline Taxonomy Extension Schema Document

(1)

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

(1)

101.DEF

Inline XBRL Taxonomy Extension Definitions Linkbase Document

(1)

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

(1)

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

(1)

104

The cover page of Popular, Inc. Quarterly Report on Form 10-Q for the

quarter ended June 30, 2025,

formatted in Inline XBRL (included within the Exhibit

101 attachments)

(1)

Included herewith

* This exhibit is a management contract or compensatory

plan or arrangement.

Popular, Inc. has not filed as exhibits certain instruments defining

the rights of holders of debt of Popular, Inc. not

exceeding 10% of the total assets of Popular, Inc. and its consolidated

subsidiaries. Popular, Inc. hereby agrees to

furnish upon request to the Commission a copy of

each instrument defining the rights of holders

of senior and

subordinated debt of Popular, Inc., or of any of its consolidated

subsidiaries.

181

SIGNATURES

Pursuant to the

requirements of the Securities Exchange

Act of 1934, the

registrant has duly caused this

report to be signed

on its

behalf by the undersigned thereunto duly authorized.

POPULAR, INC.

(Registrant)

Date: August 11, 2025

By: /s/ Jorge J. García

Jorge J. García

Executive Vice President &

Chief Financial Officer

Date: August 11, 2025

By: /s/ Denissa M. Rodríguez

Denissa M. Rodríguez

Senior Vice President & Corporate Comptroller