Nature of Operations and basis of Presentation

12 Months Ended

Dec. 31, 2024

Nature of operation [Abstract]

Nature of operations and basis of presentation

Note 1 – Nature of Operations

Nature of Operations

Popular, Inc. (the “Corporation” or “Popular”) is a diversified, publicly-owned financial holding company subject to the supervision

and regulation of the Board of Governors of the Federal Reserve System. The Corporation has operations in Puerto Rico, the

mainland United States (“U.S.”) and the U.S. and British Virgin Islands. In Puerto Rico, the Corporation provides retail, mortgage,

and commercial banking services, through its principal banking subsidiary, Banco Popular de Puerto Rico (“BPPR”), as well as

investment banking, broker-dealer, auto and equipment leasing and financing, and insurance services through specialized

subsidiaries. In the mainland U.S., the Corporation provides retail, mortgage and commercial banking services 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, investment and insurance services and equipment leasing and financing services through specialized subsidiaries.

Tax impact on Intercompany Distributions

The net income for the year ended December 31, 2024 included $

22.9

 million of expenses, of which $

16.5

 million was reflected in

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. The adjustment corrected errors for income tax expense that

should have been recognized of $

5.5

 million and $

5.4

 million in the years 2023 and 2022, respectively, and an aggregate of $

5.6

million, in the years prior to 2022. The $

6.4

 million recognized as other operating expense corresponded to interest due up to March

31, 2024 on the related late payment of the withholding tax, of which approximately $

3.0

 million corresponded to years prior to 2022.

As a result of this adjustment, the deferred tax asset related to NOL of the BHC and its related valuation allowance was reduced by

$

52.2

 million. The Corporation evaluated the impact of the out-of-period adjustment and concluded it was not material to any

previously issued interim or annual consolidated financial statements.