Related party transactions

12 Months Ended

Dec. 31, 2024

Related Party Transactions

Related Party Transactions

Note 26 – Related party transactions

The Corporation has had loan transactions with the Corporation’s directors, executive officers, including certain related individuals or

organizations, and affiliates, and proposes to continue such transactions in the ordinary course of its business, on substantially the

same terms, including interest rates and collateral, as those prevailing for comparable loan transactions with third parties. The

activity and balance of all these loans were as follows:

(In thousands)

Balance at December 31, 2022

$

125,337

New loans

23,381

Payments

(9,731)

Other changes, including existing loans to new related parties

7,030

Balance at December 31, 2023

$

146,017

New loans

10,365

Payments

(11,743)

Other changes, including existing loans to new related parties

(2,422)

Balance at December 31, 2024

$

142,217

New loans and payments include disbursements and collections from existing lines of credit.

Certain loans to related parties have participated in the Corporation’s loan mitigation programs that are also available to third

parties.

From time to time, the Corporation, in the ordinary course of business, also obtains services from related parties that have some

association with the Corporation. Management believes the terms of such arrangements are consistent with arrangements entered

into with independent third parties.

Related party transactions with Evertec, as an affiliate

Until August 15, 2022, the Corporation had an investment in Evertec, Inc. (“Evertec”) which provides various processing and

information technology services to the Corporation and its subsidiaries and gave BPPR access to the ATH network owned and

operated by Evertec. This investment was accounted for under the equity method. The Corporation recorded $

1.5

 million in

dividends from its investment in Evertec during the year ended December 31, 2022.

On July 1, 2022, BPPR completed its previously announced acquisition of certain assets from Evertec Group, LLC (“Evertec Group”)

to service certain BPPR channels, in exchange for shares of Evertec held by BPPR. The transaction was accounted for as a

business combination. In connection with this transaction, BPPR also entered into amended and restated service agreements with

Evertec Group pursuant to which Evertec Group will continue to provide various information technology and transaction processing

services to Popular, BPPR and their respective subsidiaries. As part of the transaction, BPPR and Evertec entered into a revenue

sharing structure for BPPR in connection with its merchant acquiring relationship with Evertec. On August 15, 2022, the Corporation

completed the sale of its remaining shares of common stock of Evertec, together with the aforementioned business acquisition (the

“Evertec Transactions”). As a result, the Corporation discontinued accounting for its proportionate share of Evertec’s income (loss)

and changes in stockholder’s equity under the equity method of accounting in the third quarter of 2022. The Corporation recorded a

pre-tax gain of $

257.7

 million considering the initial exchange of Evertec shares as well as the sale of the remaining shares.

Year ended

(In thousands)

December 31, 2022

Share of Evertec income and Gain from the Evertec Transactions and

related accounting adjustments [1]

$

269,539

Share of other changes in Evertec's stockholders' equity

3,168

Share of Evertec's changes in equity recognized in income and Gain

from the Evertec Transaction and related accounting adjustments 

$

272,707

[1] The Gain from the Evertec Transactions and related accounting adjustments are reflected within other operating income in the accompanying

consolidated financial statements. The Corporation recognized an additional $

17.3

 million as an operating expense in connection with the Evertec

Transactions.

The following table presents the impact of transactions and service payments between the Corporation and Evertec (as an affiliate)

and their impact on the results of operations for the year ended 2022. Items that represent expenses to the Corporation are

presented with parenthesis.

Year ended

(In thousands)

December 31, 2022

Category

Interest expense on deposits

$

(267)

Interest expense

ATH and credit cards interchange income from services to Evertec

13,955

Other service fees

Rental income charged to Evertec

3,258

Net occupancy

Fees on services provided by Evertec

(128,681)

Professional fees

Other services provided to Evertec

420

Other operating expenses

Total

$

(111,315)

[1] Includes activity through June 30, 2022.

Centro Financiero BHD, S.A.

At December 31, 2024, the Corporation had a

15.63

% equity interest in Centro Financiero BHD, S.A. (“BHD”), one of the largest

banking and financial services groups in the Dominican Republic. During the year ended December 31, 2024, the Corporation

recorded $

33.0

 million in equity pickup, including the impact of changes in the fair value of available for sale securities included as a

component of Other Comprehensive Income, from its investment in BHD (December 31, 2023 - $

40.1

 million), which had a carrying

amount of $

239.5

 million at December 31, 2024 (December 31, 2023 - $

225.9

 million). The Corporation received $

19.4

 million in

cash dividend distributions and $

2.9

 in stock dividends during the year ended December 31, 2024 (December 31, 2023 - $

14.1

million in cash dividends and $

2.1

 million in stock dividends).