POPULAR, INC. (BPOP)

CIK: 0000763901. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-03-02.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=763901. Latest filing source: 0001193125-26-085756.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-02. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000763901.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000763901.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-214600.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

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

This
 
report
 
includes
 
management’s
 
discussion
 
and
 
analysis
 
(“MD&A”)
 
of
 
the
 
consolidated
 
financial
 
position
 
and
 
financial

performance
 
of
 
Popular,
 
Inc.
 
(the
 
“Corporation”
 
or
 
“Popular”). All
 
accompanying
 
tables,
 
financial
 
statements
 
and
 
notes
 
included

elsewhere in this report should be considered an
 
integral part of this analysis.

The Corporation is a
 
diversified, publicly owned financial holding company subject
 
to the supervision and regulation
 
of the Board of

Governors of the Federal Reserve System. The Corporation has
 
operations in Puerto Rico, the United States (“U.S.”) mainland and

the U.S. and British Virgin Islands. In Puerto Rico, the
 
Corporation provides retail, mortgage,
 
commercial banking services and auto

and equipment
 
leasing and
 
financing through its
 
principal banking subsidiary,
 
Banco Popular de
 
Puerto Rico
 
(“BPPR”), as
 
well as

broker-dealer and
 
insurance services
 
through specialized
 
subsidiaries. In
 
the
 
U.S. mainland,
 
the
 
Corporation provides
 
retail and

commercial
 
banking
 
services,
 
as
 
well
 
as
 
equipment
 
leasing
 
and
 
financing,
 
through
 
its
 
New
 
York-chartered
 
banking
 
subsidiary,

Popular
 
Bank
 
(“PB”
 
or
 
“Popular
 
U.S.”),
 
which
 
has
 
branches
 
located
 
in
 
New
 
York,
 
New
 
Jersey
 
and
 
Florida.
 
Note
 
28
 
to
 
the

Consolidated Financial Statements presents information
 
about the Corporation’s business segments.

As a financial services company,
 
the Corporation’s earnings are significantly affected
 
by general business and economic conditions

in the
 
markets which
 
we serve.
 
Lending and
 
deposit activities
 
and fee
 
income generation
 
are influenced
 
by the
 
level of
 
business

spending and
 
investment, consumer
 
income, spending
 
and savings,
 
capital market
 
activities, competition,
 
customer preferences,

interest rate conditions and prevailing market rates
 
on competing products.

The Corporation
 
operates in
 
a highly
 
regulated environment
 
and may
 
be adversely
 
affected by
 
changes in
 
federal and
 
local laws

and
 
regulations.
 
Also,
 
competition
 
with
 
other
 
financial
 
institutions,
 
as
 
well
 
as
 
with
 
non-traditional financial
 
service
 
providers
 
and

technology
 
companies
 
that
 
provide
 
electronic
 
and
 
internet-based
 
financial
 
solutions
 
and
 
services,
 
could
 
adversely
 
affect
 
its

profitability.

The
 
Corporation
 
continuously
 
monitors
 
general
 
business
 
and
 
economic
 
conditions,
 
industry-related
 
indicators
 
and
 
trends,

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

enhancements and changes in the regulation of financial
 
services companies.

The description of the Corporation’s business contained in
 
Item 1 of the 2025 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 2025 Form 10-K and “Part II

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

Corporation’s control that, in addition to the other information in
 
this Form 10-Q, readers should consider.

The Corporation’s common stock is traded on the NASDAQ
 
Global Select Market under the symbol BPOP.

OVERVIEW

Financial highlights for the quarter ended March 31, 2026

The Corporation’s net income
 
for the quarter ended March
 
31, 2026 amounted to $245.7
 
million, an increase of
 
$68.2 million when

compared to a
 
net income of
 
$177.5 million for the
 
quarter ended March
 
31, 2025. Higher net
 
income was mainly
 
driven by higher

net interest income of $64.6 million and lower
 
operating expenses
 
by $3.7 million.

Financial highlights for the quarter ended March 31, 2026
 
include:

●

Net interest income amounted to $670.2
 
million, an increase of $64.6 million
 
when compared to the quarter ended March

31, 2025, driven
 
by loan growth
 
and investments in
 
U.S. Treasury securities
 
at higher yields,
 
and lower cost
 
of deposits,

mainly
 
P.R.
 
public
 
deposits,
 
partially
 
offset
 
by
 
lower
 
money
 
market
 
investments.
 
Net
 
interest
 
income
 
on
 
a
 
taxable

equivalent
 
basis
 
for
 
the
 
first
 
quarter
 
of
 
2026
 
was
 
$757.8
 
million,
 
an
 
increase
 
of
 
$93.9
 
million.
 
Net
 
interest
 
margin

expanded by 26 basis points to 3.66%. On
 
a taxable equivalent basis, net interest margin expanded by
 
41 basis points to

4.14%.

106

●

The
 
provision for
 
credit
 
losses amounted
 
to
 
$75.9 million
 
for the
 
quarter ended
 
March 31,
 
2026, an
 
increase of
 
$11.8

million when compared to the quarter ended March 31, 2025, driven by a higher provision at BPPR in the commercial and

mortgage
 
loans
 
portfolio,
 
partially
 
offset
 
by
 
a
 
lower
 
provision
 
for
 
the
 
leases
 
and
 
consumer
 
loans
 
portfolio
 
due
 
to

improvements in credit
 
quality metrics. Provision
 
for credit losses
 
decreased at PB
 
primarily due to
 
the higher qualitative

reserves
 
established
 
during
 
the
 
first
 
quarter
 
of
 
2025
 
to
 
maintain
 
adequate
 
ACL
 
coverage,
 
for
 
certain
 
portfolios,
 
and

improvements in overall credit quality.

●

Non-interest income amounted to $165.6 million, an increase of $13.6 million when compared to the quarter ended March

31, 2025, mainly driven by
 
higher credit and debit card fee income,
 
higher asset management fees, and higher insurance

fees.

●

Operating expenses
 
amounted to
 
$467.3
 
million for
 
the quarter,
 
reflecting a
 
decrease of
 
$3.7 million
 
when compared
 
to

the
 
quarter
 
ended
 
March
 
31,
 
2025.
 
The
 
decrease
 
was
 
mainly
 
driven
 
by
 
lower
 
operational
 
loss
 
reserves
 
and
 
lower

professional services
 
expense, partially
 
offset by
 
higher technology
 
and software
 
expenses as
 
a result
 
of our
 
continued

investment in technology and higher personnel costs, mainly related to salaries, as well as
 
the valuation of securities held

for deferred benefit plans.

●

Income tax expense of $46.9 million with an effective tax rate (“ETR”) of 16.0%
 
during the quarter ended March 31, 2026,

compared to an income
 
tax expense of $45.1
 
million with an ETR
 
of 20.2% for the
 
quarter ended March 31,
 
2025 due to

higher income before tax, partially offset by higher exempt
 
income.

●

At March
 
31, 2026,
 
the Corporation’s
 
total assets
 
amounted to
 
$76.1 billion, compared
 
to $75.3
 
billion at
 
December 31,

2025.
 
The
 
increase
 
of
 
$782.8
 
million
 
was
 
primarily
 
due
 
to
 
higher
 
balance
 
in
 
the
 
available-for-sale
 
(“AFS”)
 
securities

portfolio,
 
driven
 
by
 
reinvestment in
 
U.S.
 
Treasury
 
securities,
 
and
 
an
 
increase
 
in
 
money market
 
investments and
 
other

assets, partially
 
offset
 
by a
 
decrease in
 
held-to-maturity (“HTM”)
 
investment securities
 
and a
 
decrease in
 
loan portfolio

balances, mainly at PB.

●

Deposits
 
amounted
 
to
 
$67.6
 
billion
 
at
 
March
 
31,
 
2026,
 
an
 
increase
 
of
 
$1.4
 
billion
 
from
 
December 31,
 
2025,
 
primarily

driven by growth at BPPR across retail, corporate,
 
and P.R. public deposits.

●

Stockholders’ equity
 
amounted to
 
$6.3 billion
 
at March
 
31, 2026,
 
compared to
 
$6.2 billion
 
at December
 
31, 2025.
 
The

Corporation and its banking subsidiaries continue
 
to be well capitalized. As
 
of March 31, 2026, the
 
Corporation’s tangible

book value
 
per common
 
share was
 
$84.98, an
 
increase of
 
$2.33 from
 
December 31,
 
2025. The
 
Common Equity
 
Tier
 
1

Capital ratio at March 31, 2026 was 15.92%,
 
compared to 15.72% at December 31, 2025.

Refer to Table 1 for selected financial data for the quarters ended March 31, 2026 and March
 
31, 2025.

107

Table 1 - Financial highlights

Financial Condition Highlights

Ending Balances at

Average for the quarter ended

(In thousands)

March 31, 2026

December 31,

2025

Variance

March 31, 2026

March 31,

2025

Variance

Money market investments

$

4,655,699

$

4,626,506

$

29,193

$

4,850,141

$

6,379,085

$

(1,528,944)

Investment securities

28,943,544

28,168,918

774,626

29,008,686

28,446,090

562,596

Loans

[1]

39,295,305

39,337,516

(42,211)

39,270,501

37,006,149

2,264,352

Earning assets

72,894,548

72,132,940

761,608

73,129,328

71,831,324

1,298,004

Total assets

76,131,018

75,348,267

782,751

77,089,305

74,951,813

2,137,492

Deposits

67,611,316

66,190,093

1,421,223

67,364,627

65,858,092

1,506,535

Borrowings

1,119,557

1,448,578

(329,021)

1,335,239

959,211

376,028

Total liabilities

69,819,932

69,099,188

720,744

69,688,807

67,795,911

1,892,896

Stockholders’ equity

6,311,086

6,249,079

62,007

6,289,337

7,155,902

(866,565)

Note: Average balances, for balances prior to the period ended March 31, 2026, 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

Quarter ended March 31,

(In thousands, except per share information)

2026

2025

Variance

Net interest income

$

670,180

$

605,597

$

64,583

Provision for credit losses

75,886

64,081

11,805

Non-interest income

165,626

152,061

13,565

Operating expenses

467,310

471,012

(3,702)

Income before income tax

292,610

222,565

70,045

Income tax expense

46,936

45,063

1,873

Net income

$

245,674

$

177,502

$

68,172

Net income applicable to common stock

$

245,321

$

177,149

$

68,172

Net income per common share - basic

$

3.78

$

2.56

$

1.22

Net income per common share - diluted

$

3.78

$

2.56

$

1.22

Dividends declared per common share

$

0.75

$

0.70

$

0.05

Quarter ended March 31,

Selected Statistical Information

2026

2025

Common Stock Data

End market price

$

134.17

$

92.37

Book value per common share at period end

97.27

83.75

Profitability Ratios

Return on average assets

1.29

%

0.96

%

Return on average common equity

13.76

10.07

Net interest spread (non-taxable equivalent basis)

3.09

2.74

Net interest spread (taxable equivalent basis) -non-GAAP

3.57

3.07

Net interest margin (non-taxable equivalent basis)

3.66

3.40

Net interest margin (taxable equivalent basis) -non-GAAP

4.14

3.73

Capitalization Ratios

Average equity to average assets

9.41

%

8.99

%

Common equity Tier 1 capital

15.92

16.11

Tangible common
 
book value per common share (non-GAAP)

[2]

84.98

72.02

Return on average tangible common equity

[2]

15.46

11.36

Tier 1 capital

15.98

16.17

Total capital

17.71

17.92

Tier 1 leverage

8.60

8.50

[1] Includes loans held-for-sale.

108

[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.

GAAP”) and
 
non-GAAP financial
 
measures. Management
 
uses non-GAAP
 
financial measures
 
when it
 
has determined
 
that these

measures provide
 
meaningful information
 
about the
 
underlying performance
 
of the
 
Corporation’s ongoing
 
operations. Non-GAAP

financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by
 
other

companies.

Adjusted net income - Non-GAAP Financial Measure

In
 
addition to
 
analyzing the
 
Corporation’s results
 
on
 
a reported
 
basis, management
 
monitors whether
 
the
 
impact of
 
certain non-

recurring or
 
infrequent transactions
 
need to
 
be excluded
 
from the
 
results of
 
operations to
 
present what

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-03-02. Report date: 2025-12-31.

Management’s
 
Discussion
 
and
 
Analysis
 
included
 
in this
 
Form
 
10-K
 
for
 
information
 
on
 
recent

significant
 
events that have
 
impacted or
 
will impact
 
our current and
 
future operations.

Human Capital Management

Popular seeks
 
to embody our
 
values and
 
behaviors throughout
 
our human capital
 
management practices.
 
Attracting,
 
developing,

and retaining
 
top talent
 
in an
 
environment
 
that promotes
 
wellness, inclusion,
 
respect, continuous
 
learning,
 
and transparency
 
are

fundamental
 
pillars of
 
the Corporation’s
 
long-term strategy.
 
As of December
 
31, 2025, Popular
 
employed 9,427
 
individuals,
 
none

of whom were
 
represented
 
by a collective
 
bargaining group.

Nurturing Well
 
-Being: Employee
 
Health & Financial
 
Security

Popular
 
believes
 
that the
 
health and
 
financial
 
wellness
 
of our
 
employees
 
is fundamental
 
to delivering
 
high-quality
 
service
 
to our

customers
 
and
 
contributing
 
positively
 
to
 
the
 
communities
 
in
 
which
 
we
 
operate.
 
Accordingly,
 
the
 
Corporation
 
offers
 
a

comprehensive
 
health and
 
wellness program
 
that includes
 
medical, pharmacy,
 
vision, and
 
dental insurance,
 
as well as additional

wellness initiatives.

Our programs
 
are designed
 
to ensure that
 
healthcare is
 
both accessible
 
and affordable
 
for our employees,
 
with Popular covering

up to 78%
 
of health
 
insurance premiums,
 
a figure that
 
surpasses regional
 
benchmarks.
 
In 2025,
 
we strengthened
 
our health
 
and

wellness
 
offerings
 
by opening
 
a state-of-the-art
 
fitness center
 
in our San
 
Juan, Puerto
 
Rico campus,
 
to encourage
 
an active
 
and

balanced
 
lifestyle.
 
As of
 
December
 
2025,
 
the fitness
 
center
 
had
 
a total
 
of 2,030
 
members,
 
including
 
active
 
employees,
 
eligible

family members
 
and retirees.

Additionally,
 
the
 
Corporation
 
promotes
 
employee
 
health
 
and
 
well-being
 
by
 
encouraging
 
annual
 
physical
 
examinations
 
and

operating
 
a comprehensive
 
health and
 
wellness center
 
at its Puerto
 
Rico corporate
 
offices, staffed
 
with healthcare
 
providers and

enhanced
 
by
 
the
 
addition
 
of
 
an
 
on-site
 
psychologist
 
to
 
provide
 
mental
 
health
 
support.
 
The
 
center
 
received
 
over
 
15,000
 
visits

from employees
 
during 2025.

Popular
 
also seeks
 
to foster
 
work-life
 
balance
 
by offering
 
paid time
 
off
 
benefits
 
to our
 
employees,
 
including
 
community
 
service

leave,
 
paid
 
parental
 
leave,
 
and
 
flexible
 
work
 
arrangements.
 
Our
 
hybrid
 
work
 
model,
 
available
 
to
 
approximately
 
half
 
of
 
our

workforce,
 
is
 
designed
 
to
 
strike
 
an
 
appropriate
 
balance
 
between
 
employee
 
flexibility
 
and
 
business
 
needs,
 
reinforcing
 
our

commitment
 
to
 
a flexible
 
and
 
productive
 
work
 
environment.
 
In
 
addition,
 
we regularly
 
offer
 
activities
 
and
 
workshops
 
focused
 
on

physical fitness
 
and personal financial
 
management.

Popular
 
further
 
offers
 
a 401(k)
 
savings
 
and
 
investment
 
plan,
 
in
 
which
 
98%
 
of
 
employees
 
participate.
 
Under
 
the
 
plan,
 
Popular

11

matches
 
$0.50 for
 
every
 
dollar
 
contributed
 
by an
 
employee,
 
up to
 
8% of
 
the employee’s
 
salary.
 
Moreover,
 
Popular
 
maintains
 
a

profit-sharing
 
plan, contingent
 
upon the
 
achievement
 
of pre-established
 
financial
 
goals, to
 
further
 
align employee
 
compensation

with
 
the
 
Corporation’s
 
overall
 
performance.
 
Under
 
the
 
profit-sharing
 
plan,
 
employees
 
may
 
receive
 
up
 
to
 
8%
 
of
 
their
 
eligible

compensation
 
(capped
 
at $70,000),
 
with the
 
first
 
4% paid
 
in cash
 
and any
 
amount
 
above that
 
threshold
 
paid to
 
the employee’s

savings
 
and
 
investment
 
plan
 
account.
 
Additionally,
 
Popular
 
regularly
 
reviews
 
employees’
 
base
 
compensation
 
to
 
remain

competitive
 
with market salaries
 
for comparable
 
positions.

Empowering Growth:
 
Our Commitment
 
to Talent
 
Developmen

t

We
 
are committed
 
to fostering
 
the continuous
 
development
 
and upskilling
 
of our
 
employees
 
and
 
believe
 
this
 
is fundamental
 
to

maintaining
 
our competitive
 
advantage.
 
Towards
 
that end,
 
Popular
 
offers
 
development
 
opportunities
 
designed
 
to strengthen
 
our

employees’
 
knowledge,
 
capabilities
 
and
 
skills,
 
supporting
 
their
 
personal
 
growth
 
while
 
enhancing
 
Popular’s
 
business
 
strategies

and organizational
 
effectiveness.

Our 40,000
 
square foot
 
development
 
center in
 
San Juan,
 
Puerto Rico,
 
and our satellite
 
facilities
 
in New York,
 
South Florida,
 
and

the
 
Virgin
 
Islands,
 
offer
 
year-round
 
training
 
sessions,
 
activities
 
and
 
workshops.
 
In
 
2025,
 
there
 
were
 
approximately
 
6,700

registered
 
participations
 
in corporate
 
academy
 
voluntary
 
courses,
 
new
 
employee
 
orientations,
 
health
 
coordinator
 
certifications,

and
 
manager
 
onboarding
 
programs—an
 
increase
 
of
 
approximately
 
2,500
 
compared
 
to
 
the
 
participation
 
levels
 
in
 
2024.
 
These

courses
 
offer
 
instructor-led
 
training
 
experiences
 
for
 
employees
 
to
 
develop
 
and
 
apply
 
critical
 
core
 
and
 
technical
 
skills.
 
Our

commitment
 
to
 
continuous
 
learning
 
is
 
further
 
supported
 
through
 
employee
 
access
 
to
 
LinkedIn
 
Learning,
 
which
 
provides
 
an

extensive
 
library
 
of
 
over
 
16,000
 
e-learning
 
courses,
 
enabling
 
employees
 
to
 
pursue
 
self-directed
 
learning
 
aligned
 
with
 
both

professional
 
development goals
 
and business
 
needs.

Our
 
focus
 
on
 
training
 
and
 
development
 
has
 
provided
 
internal
 
growth
 
opportunities
 
for
 
our
 
workforce.
 
As
 
a
 
result,
 
the

Corporation’s
 
internal
 
mobility
 
rate in
 
2025 was
 
47%, reflecting
 
employees
 
who applied
 
for or
 
were selected
 
for open
 
positions,

received
 
promotions,
 
or made
 
lateral
 
moves
 
within
 
the
 
organization.
 
Additionally,
 
we continued
 
strengthening
 
key skills
 
across

accelerated
 
development
 
programs
 
focused
 
on
 
data
 
science,
 
agile
 
methodologies,
 
analytics,
 
process
 
efficiency,
 
and
 
product

management.
 
During
 
2025,
 
approximately
 
400
 
employees
 
participated
 
in these
 
programs,
 
further
 
enhancing
 
the
 
organization’s

talent.

During
 
2025,
 
Popular
 
successfully
 
implemented
 
the Executive
 
Development
 
Program,
 
engaging
 
over
 
80 executive
 
leaders
 
in a

comprehensive
 
initiative
 
focused
 
on strengthening
 
key
 
behaviors,
 
including
 
agility,
 
accountability,
 
collaboration,
 
and leadership

mindset,
 
aligned
 
with
 
our
 
company
 
values.
 
In
 
addition,
 
we
 
introduced
 
the
 
Middle
 
Management
 
Development
 
Program,
 
a two-

year
 
development
 
journey
 
for
 
over
 
1,700
 
leaders
 
designed
 
to
 
reinforce
 
alignment
 
with
 
the
 
Corporation’s
 
values
 
and
 
expected

behaviors
 
while
 
fostering
 
sustainable
 
organizational
 
transformation.
 
Furthermore,
 
we provided
 
our
 
leaders
 
with
 
advanced
 
tools

to support more
 
effective and
 
impactful performance
 
discussions.

Our
 
organizational
 
effectiveness
 
strategy
 
was
 
crucial
 
in
 
advancing
 
organizational
 
development
 
through
 
targeted
 
initiatives,

including
 
assessments,
 
team
 
integration
 
activities,
 
new
 
manager
 
integration
 
facilitations,
 
and
 
team
 
alignment
 
sessions.
 
These

efforts
 
are
 
designed
 
to
 
foster
 
a
 
cohesive,
 
agile,
 
and
 
adaptable
 
workforce
 
capable
 
of
 
supporting
 
the
 
Corporation’s
 
evolving

business objectives.

Enhancing Leadership
 
Continuity through
 
Strategic Succession
 
Planning

Popular’s
 
business
 
strategy
 
integrates
 
succession
 
planning
 
to
 
ensure
 
effective
 
and
 
orderly
 
leadership
 
transitions.
 
Succession

plans
 
for senior
 
management
 
are
 
developed
 
by the
 
Chief
 
Executive
 
Officer
 
and
 
presented
 
to the
 
Board
 
of Directors.
 
Popular’s

succession
 
planning
 
also
 
leverages
 
our
 
Executive
 
Talent
 
Management
 
Program
 
to
 
identify
 
high-potential
 
and
 
high-performing

managers,
 
providing
 
them
 
with
 
targeted
 
learning
 
opportunities
 
to
 
enhance
 
their
 
skills
 
and
 
prepare
 
them
 
for
 
future
 
senior

management positions.

Employee Experience

Popular
 
is
 
committed
 
to
 
providing
 
an
 
exceptional
 
employee
 
experience
 
that
 
inspires
 
our
 
employees
 
to
 
deliver
 
outstanding

service
 
to
 
our
 
customers
 
and
 
communities.
 
We
 
recognize
 
the
 
evolving
 
nature
 
of
 
our
 
employees’
 
needs
 
and
 
expectations
 
and

have
 
a
 
robust
 
approach
 
to
 
measuring
 
and
 
understanding
 
their
 
journey.
 
Our
 
employee
 
engagement
 
and
 
experience
 
survey

program
 
includes
 
biannual
 
pulse surveys,
 
an annual
 
enterprise-wide
 
survey,
 
and additional
 
surveys
 
that assess
 
the end
 
-to-end

employee
 
journey.
 
We believe
 
that these
 
insights
 
contributed
 
to our
 
ability
 
to maintain
 
a stable
 
employee
 
turnover
 
rate of
 
8.5%

as
 
of
 
the
 
end
 
of
 
2025.
 
Furthermore,
 
our
 
employee-experience
 
efforts
 
are
 
reflected
 
in
 
record
 
participation
 
rate
 
of
 
77%
 
and
 
a

sustained
 
employee-loyalty
 
score of
 
81%, positioning
 
us above
 
the 50th
 
percentile
 
of the Qualtrics
 
global benchmark
 
and above

the financial
 
services industry
 
average benchmark.

12

Board Oversight
 
in Human Capital

The
 
Talent
 
and
 
Compensation
 
Committee
 
of
 
the
 
Corporation’s
 
Board
 
of
 
Directors
 
has
 
oversight
 
responsibility
 
for
 
the

Corporation’s
 
human
 
capital
 
management
 
practices.
 
As
 
part
 
of
 
its
 
responsibilities,
 
the
 
Talent
 
and
 
Compensation
 
Committee

reviews
 
and
 
advises
 
management
 
on
 
the
 
Corporation’s
 
overall
 
compensation
 
philosophy,
 
programs
 
and
 
policies,
 
and
 
on
 
the

Corporation’s
 
talent
 
acquisition
 
and
 
development,
 
workforce
 
engagement,
 
succession
 
planning,
 
and
 
corporate
 
culture,
 
among

other human capital
 
matters.

We
 
encourage
 
you
 
to
 
review
 
our Corporate
 
Sustainability
 
Report
 
published
 
on www.popular.com
 
for more
 
detailed
 
information

regarding
 
the Corporation’s
 
human capital
 
management
 
programs
 
and initiatives.
 
The information
 
on the
 
Corporation’s
 
website,

including
 
the
 
Corporation’s
 
Corporate
 
Sustainability
 
Report,
 
is
 
not,
 
and
 
will
 
not
 
be
 
deemed
 
to
 
be,
 
a
 
part
 
of
 
this
 
Form
 
10-K
 
or

incorporated
 
into any of the
 
Corporation’s
 
filings with
 
the SEC.

Regulation and Supervision

Described below are the material elements of selected laws and regulations applicable to Popular, Popular North America

(“PNA”)
 
and
 
their
 
respective
 
subsidiaries.
 
Such
 
laws
 
and
 
regulations
 
are
 
continually
 
under
 
review
 
by
 
Congress
 
and
 
state

legislatures
 
and
 
federal
 
and
 
state
 
regulatory
 
agencies.
 
Any
 
change
 
in
 
the
 
laws
 
and
 
regulations
 
applicable
 
to
 
Popular
 
and
 
its

subsidiaries could have a material effect on the
 
business of Popular and its subsidiaries. We will continue to
 
assess our businesses

and risk management and compliance practices
 
to conform to developments in the regulatory
 
environment.

General

Popular and PNA are bank holding companies subject to consolidated supervision and
 
regulation by the Federal Reserve

Board under
 
the Bank
 
Holding Company Act
 
of 1956
 
(as amended, the
 
“BHC Act”). BPPR
 
and PB
 
are subject to
 
supervision and

examination by applicable
 
federal and state
 
banking agencies including,
 
in the
 
case of BPPR,
 
the Federal Reserve
 
Board and the

Office of
 
the Commissioner
 
of Financial
 
Institutions of
 
Puerto Rico
 
(the “Office
 
of the
 
Commissioner”), and, in
 
the case
 
of PB,
 
the

Federal
 
Reserve
 
Board
 
and
 
the
 
New
 
York
 
State
 
Department
 
of
 
Financial
 
Services
 
(the
 
“NYSDFS”).
 
Popular’s
 
broker-dealer
 
/

investment adviser
 
subsidiary,
 
Popular Securities,
 
LLC (“PS”)
 
and investment
 
adviser subsidiary
 
Popular Asset
 
Management LLC

(“PAM”)
 
are subject
 
to
 
regulation by
 
the SEC,
 
the Financial
 
Industry
 
Regulatory Authority
 
(“FINRA”), and
 
the Securities
 
Investor

Protection Corporation, among others. Other of our non-bank subsidiaries conduct reinsurance and
 
insurance producer and agency

activities, which are
 
subject to other
 
federal, state and
 
Puerto Rico laws
 
and regulations as
 
well as licensing
 
and regulation by
 
the

Puerto Rico Office of the Commissioner of Insurance and,
 
for one insurance agency subsidiary, the NYSDFS.

Enhanced Prudential Standards

Under
 
the
 
Dodd-Frank
 
Wall
 
Street
 
Reform
 
and
 
Consumer
 
Protection
 
Act
 
(the
 
“Dodd-Frank
 
Act”),
 
as
 
modified
 
by
 
the

Economic
 
Growth,
 
Regulatory
 
Relief,
 
and
 
Consumer
 
Protection
 
Act
 
and
 
the
 
federal
 
banking
 
regulators’
 
2019
 
“Tailoring
 
Rules,”

banking
 
organizations are
 
categorized based
 
on status
 
as
 
a U.S.
 
G-SIB,
 
size
 
and four
 
other risk-based
 
indicators. Among
 
bank

holding companies with $100
 
billion or more in
 
total consolidated assets, the
 
most stringent standards apply
 
to U.S. G-SIBs,
 
which

are subject to Category I standards,
 
and the least stringent standards apply to Category IV organizations, which have between $100

billion and $250 billion in total consolidated assets and less than $75 billion in all four other risk-based indicators and
 
which are also

not U.S. G-SIBs. Bank holding companies with total consolidated assets of $50 billion or more are subject to risk committee and risk

management requirements. As of December 31, 2025,
 
Popular had total consolidated assets of $75.3 billion.

13

Transactions with Affiliates

BPPR
 
and
 
PB
 
are
 
subject
 
to
 
restrictions
 
that
 
limit
 
the
 
amount
 
of
 
extensions
 
of
 
credit
 
and
 
certain
 
other
 
“covered

transactions” (as defined in Section
 
23A of the Federal
 
Reserve Act) between BPPR or
 
PB, on the
 
one hand, and Popular,
 
PNA or

any
 
of
 
our
 
other
 
non-banking
 
subsidiaries,
 
on
 
the
 
other
 
hand,
 
and
 
that
 
impose
 
collateralization
 
requirements
 
on
 
such
 
credit

extensions. A bank may not engage in any covered transaction if the aggregate amount of the bank’s covered transactions with that

affiliate would exceed 10% of
 
the bank’s capital stock and
 
surplus or the aggregate amount of
 
the bank’s covered transactions with

all non-bank affiliates would exceed 20%
 
of the bank’s capital stock and
 
surplus. In addition, any transaction between BPPR
 
or PB,

on the one
 
hand, and Popular,
 
PNA or any
 
of our other
 
non-banking subsidiaries, on
 
the other,
 
is required to
 
be carried out
 
on an

arm’s length basis.

Source of Financial Strength

The
 
Dodd-Frank Act
 
requires bank
 
holding companies,
 
such
 
as Popular
 
and
 
PNA, to
 
act
 
as
 
a source
 
of
 
financial
 
and

managerial strength to their subsidiary banks. Popular
 
and PNA are expected to commit resources
 
to support their subsidiary banks,

including at times when Popular
 
and PNA may not be
 
in a financial position to
 
provide such resources. Any capital loans
 
by a bank

holding company
 
to any
 
of its
 
subsidiary depository
 
institutions are
 
subordinated in
 
right of
 
payment to
 
depositors and
 
to certain

other indebtedness of such subsidiary depository institution. In the
 
event of a bank holding company’s bankruptcy,
 
any commitment

by
 
the
 
bank
 
holding
 
company
 
to
 
a
 
federal
 
banking
 
agency
 
to
 
maintain
 
the
 
capital
 
of
 
a
 
subsidiary
 
depository
 
institution
 
will
 
be

assumed by
 
the bankruptcy
 
trustee and
 
entitled to
 
a priority
 
of payment.
 
BPPR and
 
PB are
 
currently the
 
only insured
 
depository

institution subsidiaries of Popular and PNA.

Resolution Planning and Resolution-Related Requirements

A

bank holding
 
company with
 
$250 billion
 
or more
 
in total
 
consolidated assets
 
(or that
 
is a
 
Category III
 
firm based
 
on

certain risk-based indicators described in the Tailoring
 
Rules) is required to report periodically to the FDIC
 
and the Federal Reserve

Board
 
such
 
company’s
 
plan
 
for
 
its
 
rapid
 
and
 
orderly
 
resolution
 
in
 
the
 
event
 
of
 
material
 
financial
 
distress
 
or
 
failure.
 
In
 
addition,

insured depository institutions with total
 
assets of $50 billion or
 
more are required to
 
submit to the FDIC
 
periodic contingency plans

for
 
resolution
 
in
 
the
 
event
 
of
 
the
 
institution’s
 
failure.
 
In
 
June
 
2024,
 
the
 
FDIC
 
finalized
 
amendments
 
to
 
the
 
resolution
 
planning

requirements for insured depository institutions with
 
$50 billion or more in
 
total assets. The amendments require insured
 
depository

institutions with
 
between $50
 
billion and $100
 
billion in
 
assets to submit
 
informational filings on
 
a three-year cycle,
 
with an
 
interim

supplement updating key information submitted in the off years. These amendments
 
became effective October 1, 2024, and BPPR’s

first submission under the new rule is due by
 
April 1, 2026.

On August
 
29, 2023,
 
the Federal
 
Reserve Board,
 
FDIC and
 
Office of
 
the Comptroller
 
of the
 
Currency (“OCC”)
 
issued a

proposed
 
rule
 
that
 
would
 
require
 
bank
 
holding
 
companies
 
and
 
insured
 
depository
 
institutions
 
with
 
$100
 
billion
 
or
 
more
 
in

consolidated assets (as well as their insured depository institution affiliates) to maintain minimum
 
amounts of eligible long-term debt

(generally, debt
 
that is unsecured, has
 
a maturity greater than one
 
year from issuance and satisfies
 
additional criteria), subject to a

three-year phase-in
 
period. The
 
proposal would
 
also apply
 
“clean holding
 
company” requirements
 
to Category
 
II through
 
IV bank

holding companies,
 
which would,
 
among other
 
things, prohibit
 
those holding
 
companies from
 
entering into
 
derivatives and
 
certain

other financial
 
contracts with
 
third parties.
 
As of
 
December 31,
 
2025, Popular,
 
PNA, BPPR
 
and PB’s
 
total assets
 
were below
 
the

thresholds for applicability
 
of these rules,
 
except that BPPR
 
is subject to
 
the FDIC’s resolution
 
planning requirements applicable to

insured depository institutions with more than $50
 
billion but less than $100 billion in assets.

FDIC Insurance

Substantially all the deposits of BPPR and PB are insured up to applicable limits by the Deposit Insurance Fund (“DIF”) of

the
 
FDIC,
 
and
 
BPPR
 
and
 
PB
 
are
 
subject
 
to
 
FDIC
 
deposit
 
insurance
 
assessments
 
to
 
maintain
 
the
 
DIF.
 
Deposit
 
insurance

assessments are
 
based on
 
the average
 
consolidated total
 
assets of
 
the insured
 
depository institution
 
minus the
 
average tangible

equity of the institution during the assessment period. For larger
 
depository institutions with over $10 billion in assets,
 
such as BPPR

and PB, the FDIC uses a “scorecard” methodology, which considers CAMELS ratings, among
 
other measures, that seeks to capture

both the probability that an individual large institution will
 
fail and the magnitude of the impact on the DIF
 
if such a failure occurs. The

FDIC has the ability
 
to make discretionary adjustments to the
 
total score based upon significant
 
risk factors that are not
 
adequately

captured in the calculations. The initial base deposit insurance assessment rate for larger depository institutions ranges from 3 to 30

basis
 
points
 
on
 
an
 
annualized
 
basis.
 
Taking
 
into
 
account the
 
adjustments the
 
FDIC
 
may
 
make
 
to
 
the
 
base
 
rate,
 
the
 
total
 
base

assessment rate could range from 1.5 to 40 basis points
 
on an annualized basis.

In
 
October
 
2022,
 
the
 
FDIC
 
finalized
 
a
 
rule
 
that
 
increased
 
initial
 
base
 
deposit
 
insurance
 
assessment
 
rates
 
by
 
2
 
basis

points, beginning with the first quarterly assessment period of 2023. The FDIC, as required under the Federal Deposit Insurance Act

14

(“FDIA”), established
 
a plan
 
in September
 
2020 to
 
restore the
 
DIF reserve
 
ratio to
 
meet or
 
exceed the
 
statutory minimum
 
of 1.35

percent within
 
eight years. The
 
increased assessment is
 
intended to improve
 
the likelihood that
 
the DIF
 
reserve ratio would
 
reach

the required minimum by the statutory deadline
 
of September 30, 2028.

As of December 31, 2025, BPPR and
 
PB had a DIF average total asset
 
less average tangible equity assessment base of

$69 billion.

On
 
November 16,
 
2023,
 
the
 
FDIC finalized
 
a
 
rule
 
that
 
imposes
 
a special
 
assessment to
 
recover the
 
costs to
 
the
 
DIF

resulting
 
from
 
the
 
FDIC’s
 
use,
 
in
 
March
 
2023,
 
of
 
the systemic
 
risk
 
exception to
 
the
 
least-cost resolution
 
test
 
under the
 
FDIA
 
in

connection with the
 
receiverships of Silicon
 
Valley Bank
 
and Signature Bank.
 
The FDIC estimated
 
in approving the
 
rule that those

assessed losses total $16.3 billion. The rule provides
 
that this loss estimate will be periodically adjusted,
 
which will affect the amount

of
 
the special
 
assessment. Under
 
the rule,
 
the assessment
 
base is
 
the
 
estimated uninsured
 
deposits that
 
an insured
 
depository

institution reported in its Consolidated Reports of Condition and Income (“Call Report”) at December 31, 2022,
 
excluding the first $5

billion
 
in estimated
 
uninsured deposits.
 
For
 
a holding
 
company
 
that
 
has
 
more than
 
one
 
insured depository
 
institution subsidiary,

such as Popular,
 
the $5 billion
 
exclusion is allocated
 
among the company’s
 
insured depository institution subsidiaries
 
in proportion

to each
 
insured depository
 
institution’s estimated
 
uninsured deposits.
 
The special
 
assessments were
 
to be
 
collected at
 
an annual

rate of approximately 13.4 basis points per
 
year (3.36 basis points per quarter) over
 
eight quarters,
 
with the first assessment period

having begun
 
January 1,
 
2024. In
 
June 2024,
 
due to
 
the increase
 
in the
 
estimate of
 
losses, the
 
FDIC announced that
 
it projected

that the special
 
assessment would be collected
 
for an additional
 
two quarters beyond the
 
initial eight quarter collection
 
period, at a

lower rate.
 
In December
 
2025, the
 
FDIC reduced
 
the rate
 
at which
 
the assessment
 
is collected,
 
with an
 
invoice payment
 
date of

March 30, 2026, from 3.36 basis points to
 
2.97 basis points,
 
and also reduced the collection period back
 
to eight quarters.

Brokered Deposits

The FDIA
 
and regulations
 
adopted thereunder
 
restrict the
 
use of
 
brokered deposits
 
and the
 
rate of
 
interest payable
 
on

deposits for institutions
 
that are less
 
than well capitalized.
 
Popular does not
 
believe the brokered
 
deposits regulations have
 
had or

will have a material effect on the funding or liquidity
 
of BPPR and PB.

Capital Adequacy

Popular, PNA,
 
BPPR and PB are
 
each required to comply
 
with applicable capital adequacy standards
 
established by the

federal
 
banking
 
agencies
 
(the
 
“Capital
 
Rules”),
 
which
 
implement
 
the
 
Basel
 
III
 
framework
 
set
 
forth
 
by
 
the
 
Basel
 
Committee
 
on

Banking Supervision (the “Basel Committee”) as
 
well as certain provisions of the Dodd-Frank
 
Act.

Among other
 
matters, the
 
Capital Rules:
 
(i) impose
 
a capital
 
measure called
 
“Common Equity
 
Tier
 
1” (“CET1”)
 
and the

related regulatory capital ratio of CET1 to risk-weighted assets; (ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1

capital” instruments meeting
 
certain revised requirements;
 
and (iii) mandate
 
that most deductions/adjustments to
 
regulatory capital

measures be made
 
to CET1
 
and not to
 
the other components
 
of capital.
 
Under the Capital
 
Rules, for most
 
banking organizations,

including
 
Popular,
 
the
 
most
 
common
 
form
 
of
 
Additional
 
Tier
 
1
 
capital
 
is
 
non-cumulative
 
perpetual preferred
 
stock
 
and
 
the
 
most

common form of Tier
 
2 capital is subordinated notes and
 
a portion of the
 
allocation for loan and lease losses,
 
in each case, subject

to the Capital Rules’ specific requirements.

Pursuant to the Capital Rules, the minimum
 
capital ratios are:

4.5% CET1 to risk-weighted assets;

6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted
 
assets;

8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets; and

4% Tier 1 capital to average consolidated assets as reported
 
on consolidated financial statements (known
 
as the

“leverage ratio”).

The Capital Rules also impose
 
a “capital conservation buffer,”
 
composed entirely of CET1, on top
 
of these minimum risk-

weighted
 
asset
 
ratios. The
 
capital
 
conservation
 
buffer
 
is
 
designed
 
to
 
absorb
 
losses
 
during
 
periods
 
of
 
economic stress.
 
Banking

institutions
 
with
 
a
 
ratio
 
of
 
CET1
 
to
 
risk-weighted
 
assets
 
above
 
the
 
minimum
 
but
 
below
 
the
 
capital
 
conservation
 
buffer
 
will
 
face

constraints on
 
dividends, equity repurchases
 
and compensation based
 
on the
 
amount of
 
the shortfall and
 
eligible retained
 
income

(that is, four
 
quarter trailing net income, net
 
of distributions and tax effects
 
not reflected in net
 
income). Popular, BPPR
 
and PB are

therefore required to maintain such additional capital
 
conservation buffer of 2.5% of CET1,
 
effectively resulting in minimum ratios of

(i) CET1
 
to risk-weighted
 
assets of
 
at least
 
7%, (ii)
 
Tier
 
1 capital
 
to risk-weighted
 
assets of
 
at least
 
8.5%, and
 
(iii) Total
 
capital to

15

risk-weighted assets of at least 10.5%.

Pursuant
 
to
 
the
 
Capital
 
Rules,
 
the
 
effects
 
of
 
certain
 
accumulated other
 
comprehensive income
 
or
 
loss
 
(“AOCI”)
 
items

included in stockholders’ equity
 
(for example, marks-to-market of securities
 
held in the available
 
for sale portfolio) are
 
not excluded

from
 
regulatory
 
capital
 
ratios;
 
however,
 
banking
 
organizations
 
that
 
are
 
not
 
subject
 
to
 
Categories
 
I
 
or
 
II
 
standards
 
under
 
the

framework for
 
banking organizations
 
with $100
 
billion or
 
more in
 
assets, including
 
Popular,
 
BPPR and
 
PB, may
 
make a
 
one-time

permanent election to continue to
 
exclude these items. Popular,
 
BPPR and PB have
 
made this election in order
 
to avoid significant

variations in
 
the level
 
of capital
 
depending upon
 
the impact
 
of interest
 
rate fluctuations
 
on the
 
fair value
 
of their
 
available for
 
sale

securities portfolios.
 
On July
 
27, 2023,
 
the federal
 
banking regulators
 
proposed revisions
 
to the
 
Capital Rules
 
to implement
 
the

Basel Committee’s 2017 standards, described
 
below, and make
 
other changes to the
 
Capital Rules, including the ability
 
of banking

organizations in Categories III and IV to elect not to recognize most elements of AOCI in regulatory capital. The proposal introduces

revised credit risk, equity risk, operational risk, credit valuation adjustment risk and market risk requirements, among other changes.

However, the
 
revised capital requirements
 
of the
 
proposed rule would
 
not apply
 
to Popular,
 
BPPR, or
 
PB because
 
they have
 
less

than $100 billion in total consolidated assets and trading
 
assets and liabilities below the threshold for market risk requirements. The

federal
 
banking
 
regulators have
 
subsequently indicated
 
that
 
they
 
expect to
 
issue
 
a
 
revised
 
proposal, the
 
timing
 
and contents
 
of

which are uncertain.

The
 
Capital
 
Rules
 
preclude certain
 
hybrid
 
securities, such
 
as
 
trust
 
preferred
 
securities, from
 
inclusion
 
in
 
bank
 
holding

companies’
 
Tier
 
1
 
capital.
 
Trust
 
preferred
 
securities
 
not
 
included
 
in
 
Popular’s
 
Tier
 
1
 
capital
 
may
 
nonetheless
 
be
 
included
 
as
 
a

component of
 
Tier 2 capital.
 
Popular has
 
not issued
 
any trust
 
preferred securities since
 
May 19,
 
2010. As
 
of December
 
31, 2025,

Popular has
 
$193 million
 
of trust
 
preferred securities
 
outstanding which
 
no longer
 
qualify for
 
Tier
 
1 capital
 
treatment, but
 
instead

qualify for Tier 2 capital treatment.

The Capital Rules also provide for a number of deductions
 
from and adjustments to CET1.
 
Banking organizations that are

not subject to Category
 
I or II standards
 
are subject to rules that
 
provide for simplified capital requirements relating
 
to the threshold

deductions
 
for
 
certain
 
mortgage
 
servicing
 
assets,
 
deferred
 
tax
 
assets,
 
investments
 
in
 
the
 
capital
 
of
 
unconsolidated
 
financial

institutions and inclusion of minority interests
 
in regulatory capital.

Failure
 
to
 
meet
 
capital
 
guidelines
 
could
 
subject
 
Popular
 
and
 
its
 
depository
 
institution
 
subsidiaries
 
to
 
a
 
variety
 
of

enforcement remedies, including the termination of deposit insurance by the FDIC
 
and to certain restrictions on our business. Refer

to “Prompt Corrective Action” below for further
 
discussion.

In
 
December 2017,
 
the Basel
 
Committee published
 
standards that
 
it
 
described as
 
the finalization
 
of the
 
Basel III
 
post-

crisis regulatory
 
reforms. Among other
 
things, these
 
standards revise
 
the Basel
 
Committee’s standardized approach
 
for credit
 
risk

(including
 
by
 
recalibrating
 
risk
 
weights
 
and
 
introducing
 
new
 
capital
 
requirements
 
for
 
certain
 
“unconditionally
 
cancellable

commitments,” such
 
as
 
unused credit
 
card
 
lines of
 
credit) and
 
provide
 
a new
 
standardized approach
 
for operational
 
risk capital.

Under the current U.S. capital rules, operational risk capital requirements and a capital floor apply only to Category I and Category II

banking organizations and not to Popular, BPPR and PB.

In 2020, federal bank regulators adopted a rule
 
that allowed banking organizations to elect to delay
 
temporarily the

estimated effects of adopting the Current Expected Credit
 
Loss (“CECL”) model of ASU 2016-13 on regulatory
 
capital until January

2022 and subsequently to phase in the effects through
 
January 2025. The Corporation’s capital ratios
 
at December 31, 2025 reflect

the full phased in impact from the adoption of CECL.

Refer to
 
the Consolidated
 
Financial Statements
 
in this
 
Form 10-K.,
 
Note 20
 
and Table
 
10 of
 
Management’s Discussion

and Analysis for the
 
capital ratios of Popular,
 
BPPR and PB
 
under Basel III. Refer
 
to the Consolidated Financial Statements
 
in this

Form 10-K Note 2 for more information regarding
 
CECL.

Prompt Corrective Action

The
 
FDIA
 
requires,
 
among
 
other
 
things,
 
the
 
federal
 
banking
 
agencies
 
to
 
take
 
prompt
 
corrective
 
action
 
in
 
respect
 
of

insured
 
depository
 
institutions
 
that
 
do
 
not
 
meet
 
minimum
 
capital
 
requirements.
 
The
 
FDIA
 
establishes
 
five
 
capital
 
tiers:
 
“well

capitalized,”
 
“adequately
 
capitalized,”
 
“undercapitalized,”
 
“significantly
 
undercapitalized,”
 
and
 
“critically
 
undercapitalized”.
 
A

depository institution’s capital tier will depend upon how its
 
capital levels compare with various relevant capital
 
measures and certain

other factors.

16

An insured
 
depository institution will
 
be deemed
 
to be
 
(i) “well
 
capitalized” if
 
the institution
 
has a
 
total risk-based
 
capital

ratio of 10.0% or greater, a CET1 capital ratio of 6.5%
 
or greater, a Tier 1
 
risk-based capital ratio of 8.0% or greater, and a leverage

ratio of 5.0% or
 
greater, and is
 
not subject to any order
 
or written directive by
 
any such regulatory authority to
 
meet and maintain a

specific capital level for any capital
 
measure; (ii) “adequately capitalized” if the institution
 
has a total risk-based capital ratio
 
of 8.0%

or greater, a
 
CET1 capital ratio of 4.5%
 
or greater, a
 
Tier 1 risk-based capital
 
ratio of 6.0% or greater,
 
and a leverage ratio of
 
4.0%

or greater
 
and is
 
not “well
 
capitalized”; (iii)
 
“undercapitalized” if
 
the institution
 
has a
 
total risk-based
 
capital ratio
 
that is
 
less than

8.0%, a CET1 capital
 
ratio less than 4.5%,
 
a Tier 1
 
risk-based capital ratio of
 
less than 6.0% or
 
a leverage ratio of
 
less than 4.0%;

(iv) “significantly
 
undercapitalized” if
 
the institution
 
has a
 
total risk-based
 
capital ratio
 
of less
 
than 6.0%,
 
a CET1
 
capital ratio
 
less

than 3%, a Tier
 
1 risk-based capital ratio of less than 4.0% or
 
a leverage ratio of less than 3.0%;
 
and (v) “critically undercapitalized”

if
 
the
 
institution’s
 
tangible
 
equity
 
is
 
equal
 
to
 
or
 
less
 
than
 
2.0%
 
of
 
average
 
quarterly
 
tangible
 
assets.
 
An
 
institution
 
may
 
be

downgraded to, or deemed
 
to be in, a
 
capital category that is
 
lower than indicated by
 
its capital ratios if
 
it is determined to
 
be in an

unsafe
 
or
 
unsound
 
condition
 
or
 
if
 
it
 
receives
 
an
 
unsatisfactory
 
examination
 
rating
 
with
 
respect
 
to
 
certain
 
matters.
 
An
 
insured

depository institution’s capital category is determined solely for the purpose of applying prompt corrective action
 
regulations, and the

capital category
 
may not
 
constitute an
 
accurate representation
 
of the
 
institution’s overall
 
financial condition
 
or prospects
 
for other

purposes.

The FDIA generally prohibits an insured depository institution from making any capital
 
distribution (including payment of a

dividend) or
 
paying any
 
management fee to
 
its holding
 
company, if
 
the depository
 
institution would thereafter
 
be undercapitalized.

Undercapitalized
 
depository
 
institutions
 
are
 
subject
 
to
 
restrictions
 
on
 
borrowing
 
from
 
the
 
Federal
 
Reserve
 
System.
 
In
 
addition,

undercapitalized
 
depository
 
institutions
 
are
 
subject
 
to
 
growth
 
limitations
 
and
 
are
 
required
 
to
 
submit
 
capital
 
restoration
 
plans.
 
A

depository institution’s
 
holding company must
 
guarantee the capital
 
restoration plan, up
 
to an
 
amount equal to
 
the lesser
 
of 5%
 
of

the
 
depository
 
institution’s
 
assets
 
at
 
the
 
time
 
it
 
becomes
 
undercapitalized
 
or
 
the
 
amount
 
of
 
the
 
capital
 
deficiency,
 
when
 
the

institution fails to comply with the
 
plan. The federal banking agencies may not
 
accept a capital restoration plan without determining,

among other things,
 
that the plan
 
is based
 
on realistic assumptions
 
and is
 
likely to succeed
 
in restoring the
 
depository institution’s

capital. If a depository institution fails to submit an
 
acceptable plan, it is treated as if it is
 
significantly undercapitalized.

Significantly
 
undercapitalized
 
depository
 
institutions
 
may
 
be
 
subject
 
to
 
a
 
number
 
of
 
requirements
 
and
 
restrictions,

including orders to
 
sell sufficient voting
 
stock to become
 
adequately capitalized, requirements to
 
reduce total assets
 
and cessation

of receipt
 
of deposits
 
from correspondent
 
banks. Critically
 
undercapitalized depository
 
institutions are
 
subject to
 
appointment of
 
a

receiver or conservator.

The capital-based prompt
 
corrective action provisions
 
of the FDIA
 
apply to
 
the FDIC-insured depository
 
institutions such

as
 
BPPR
 
and
 
PB,
 
but
 
they
 
are
 
not
 
directly
 
applicable
 
to
 
holding
 
companies
 
such
 
as
 
Popular
 
and
 
PNA,
 
which
 
control
 
such

institutions. As of December 31, 2025,
 
both BPPR and PB met the quantitative requirements
 
for ‘well capitalized’ status.

Restrictions on Dividends and Repurchases

The
 
principal
 
sources
 
of
 
funding
 
for
 
Popular
 
and
 
PNA
 
have
 
included
 
dividends
 
received
 
from
 
their
 
banking
 
and
 
non-

banking subsidiaries, asset sales
 
and proceeds from
 
the issuance of
 
debt and equity.
 
Various statutory
 
provisions limit the amount

of
 
dividends an
 
insured depository
 
institution may
 
pay to
 
its
 
holding company
 
without regulatory
 
approval. A
 
member bank
 
must

obtain the approval of the
 
Federal Reserve Board for any
 
dividend, if the total of
 
all dividends declared by the
 
member bank during

the calendar year would exceed the total of its net income for that year,
 
combined with its retained net income for the preceding two

years, after
 
considering those
 
years’ dividend
 
activity,
 
less any
 
required transfers to
 
surplus or
 
to a
 
fund for
 
the retirement
 
of any

preferred stock. During the year
 
ended December 31, 2025, BPPR declared
 
cash dividends of $575
 
million, a portion of
 
which was

used by Popular for the payments of the cash dividends on its
 
outstanding common stock. At December 31, 2025, BPPR needed to

obtain prior approval of the Federal Reserve Board before declaring a dividend
 
in excess of $191 million due to its
 
retained income,

declared dividend activity and transfers to statutory reserves over the three years ended December 31, 2025. In addition, a member

bank may
 
not declare
 
or pay
 
a dividend
 
in an
 
amount greater
 
than its
 
undivided profits
 
as reported
 
in its
 
Report of
 
Condition and

Income, unless the member bank has received the approval of
 
the Federal Reserve Board. A member bank also may not permit
 
any

portion of its permanent capital to
 
be withdrawn unless the withdrawal has
 
been approved by the Federal Reserve Board.
 
Pursuant

to
 
these
 
requirements, PB
 
may
 
not
 
declare
 
or
 
pay
 
a
 
dividend without
 
the
 
prior
 
approval
 
of
 
the
 
Federal
 
Reserve
 
Board
 
and
 
the

NYSDFS.

During the
 
year ended
 
December 31,
 
2025, Popular
 
received cash
 
dividends of
 
$23 million
 
from Popular
 
International

Bank, Inc. (“PIBI”) and $22 million from its other
 
non-banking subsidiaries.

It is Federal Reserve Board policy that bank holding companies generally should pay dividends on common
 
stock only out

17

of net
 
income available to
 
common shareholders
 
over the past
 
year and
 
only if
 
the prospective rate
 
of earnings retention
 
appears

consistent with the organization’s current and
 
expected future capital needs, asset quality
 
and overall financial condition. Moreover,

under Federal Reserve Board policy, a bank
 
holding company should not maintain dividend levels that place undue pressure on the

capital of depository
 
institution subsidiaries or that
 
may undermine the bank
 
holding company’s ability to
 
be a source
 
of strength to

its
 
banking subsidiaries.
 
Federal Reserve
 
policy
 
also
 
provides that
 
a
 
bank
 
holding company
 
should
 
inform
 
the
 
Federal
 
Reserve

reasonably in advance of declaring or paying a dividend that
 
exceeds earnings for the period for which the dividend is
 
being paid or

that could result in a material adverse change
 
to the bank holding company’s capital structure.

The
 
Federal Reserve
 
Board
 
also restricts
 
the
 
ability of
 
banking
 
organizations to
 
conduct stock
 
repurchases. In
 
certain

circumstances, a banking organization’s repurchases
 
of its common stock may
 
be subject to a
 
prior approval or notice requirement

under other regulations or policies of the Federal Reserve. Any redemption or
 
repurchase of preferred stock or subordinated debt is

subject to the prior approval of the Federal Reserve.

Subject to compliance with certain conditions, distributions of U.S. sourced dividends to a corporation
 
organized under the

laws
 
of the
 
Commonwealth of
 
Puerto Rico
 
are subject
 
to
 
a withholding
 
tax
 
of 10%
 
instead of
 
the 30%
 
applied to
 
other “foreign”

corporations. Accordingly, dividends from current or accumulated earnings and profits
 
paid by PNA to Popular, Inc. sourced from the

U.S. operations of PB are subject to a 10% tax withholding.

A corporation organized under the laws of the Commonwealth of Puerto

Rico that is engaged in a U.S. trade or business is generally subject to a branch profits tax of 30% on its earnings and profits
 
for the

taxable year that are “effectively connected” with
 
such U.S. trade or business, adjusted as
 
provided by U.S. federal income tax law.

Accordingly,
 
to
 
the extent
 
BPPR’s
 
U.S. operations
 
generate effectively
 
connected earnings
 
and profits
 
that
 
are not
 
reinvested in

such U.S. operations
 
(and that are
 
not otherwise adjusted
 
as provided by
 
U.S. federal income tax
 
law), such effectively
 
connected

earnings and profits will generally be subject
 
to a branch profits tax of 30%.

Refer to
 
Part II,
 
Item 5,
 
“Market for
 
Registrant’s Common
 
Equity,
 
Related Stockholder
 
Matters and
 
Issuer Purchases
 
of

Equity Securities” for further information on Popular’s
 
distribution of dividends and repurchases of equity
 
securities.

See
 
“Puerto
 
Rico
 
Regulation”
 
below
 
for
 
a
 
description
 
of
 
certain
 
restrictions
 
on
 
BPPR’s
 
ability
 
to
 
pay
 
dividends
 
under

Puerto Rico law.

Interstate Branching

The Dodd-Frank
 
Act amended
 
the Riegle-Neal
 
Interstate Banking
 
and Branching
 
Efficiency Act
 
of 1994
 
(the “Interstate

Banking
 
Act”)
 
to
 
authorize
 
national
 
banks
 
and
 
state
 
banks
 
to
 
branch
 
interstate
 
through

de
 
novo

branches. For
 
purposes
 
of
 
the

Interstate Banking Act, BPPR is treated as a state bank and is subject to the same restrictions on interstate branching as other state

banks.

Activities and Acquisitions

In general, the BHC Act limits the activities
 
permissible for bank holding companies to the business of banking, managing

or controlling banks and such other activities as the Federal Reserve Board has determined to be so closely related to banking as to

be
 
properly
 
incidental
 
thereto.
 
A
 
company
 
that
 
meets
 
management
 
and
 
capital
 
standards
 
and
 
whose
 
subsidiary
 
depository

institutions meet management,
 
capital and
 
Community Reinvestment Act
 
(“CRA”) standards may
 
elect to
 
be treated
 
as a
 
financial

holding company
 
and engage
 
in a
 
substantially broader
 
range of
 
nonbanking financial
 
activities, including
 
securities underwriting

and dealing, insurance underwriting and making
 
merchant banking investments in nonfinancial
 
companies.

In order for a bank holding company to elect to be treated as a financial
 
holding company, (i) all of its depository institution

subsidiaries
 
must
 
be
 
well capitalized
 
(as described
 
above)
 
and
 
well managed
 
and
 
(ii)
 
it
 
must
 
file a
 
declaration with
 
the Federal

Reserve Board that it elects to be a “financial holding
 
company.” As noted above, a bank
 
holding company electing to be a financial

holding company must itself be and remain
 
well capitalized and well managed. The Federal Reserve Board’s
 
regulations applicable

to bank holding companies separately define
 
“well capitalized” for bank holding companies,
 
such as Popular,
 
to require maintaining

a tier 1 capital
 
ratio of at least
 
6% and a total capital
 
ratio of at least 10%.
 
Popular and PNA have elected
 
to be treated as
 
financial

holding
 
companies.
 
A
 
depository
 
institution
 
is
 
deemed
 
to
 
be
 
“well
 
managed”
 
if,
 
at
 
its
 
most
 
recent
 
inspection,
 
examination
 
or

subsequent review
 
by the
 
appropriate federal banking
 
agency (or
 
the appropriate state
 
banking agency), the
 
depository institution

received
 
at
 
least
 
a
 
“satisfactory”
 
composite
 
rating
 
and
 
at
 
least
 
a
 
“satisfactory”
 
rating
 
for
 
the
 
management
 
component
 
of
 
the

composite
 
rating.
 
If,
 
after
 
becoming
 
a
 
financial
 
holding
 
company,
 
the
 
company
 
fails
 
to
 
continue
 
to
 
meet
 
any
 
of
 
the
 
capital
 
or

management requirements
 
for financial
 
holding company
 
status, the
 
company
 
must
 
enter into
 
a confidential
 
agreement with
 
the

Federal
 
Reserve
 
Board
 
to
 
comply
 
with
 
all
 
applicable capital
 
and
 
management
 
requirements.
 
If
 
the
 
company
 
does
 
not
 
return
 
to

18

compliance
 
within
 
180
 
days,
 
the
 
Federal
 
Reserve
 
Board
 
may
 
extend
 
the
 
agreement
 
or
 
may
 
order
 
the
 
company
 
to
 
divest
 
its

subsidiary banks or the
 
company may discontinue, or
 
divest investments in companies
 
engaged in, activities permissible only
 
for a

bank holding company that has elected to be treated as a financial
 
holding company. In addition, if a depository institution subsidiary

controlled by a financial holding company does not
 
maintain a CRA rating of at least “satisfactory,” the financial holding company
 
will

be subject to restrictions on certain new activities
 
and acquisitions.

The Federal Reserve Board
 
may in certain circumstances limit
 
our ability to conduct
 
activities and make acquisitions that

would otherwise be permissible for
 
a financial holding company.
 
Furthermore, a financial holding company must obtain
 
prior written

approval from the Federal Reserve Board before acquiring a nonbank company with $10 billion or more in total consolidated assets.

In addition, we
 
are required to
 
obtain prior Federal
 
Reserve Board approval
 
before engaging in
 
certain banking and
 
other financial

activities both in the United States and abroad.

The “Volcker
 
Rule” adopted
 
as part
 
of the
 
Dodd-Frank Act
 
restricts the
 
ability of
 
Popular and
 
its subsidiaries,
 
including

BPPR and PB as
 
well as non-banking subsidiaries, to
 
sponsor or invest in
 
“covered funds,” including private funds,
 
or to engage in

certain types
 
of proprietary
 
trading. Popular
 
and its
 
subsidiaries generally
 
do not
 
engage in
 
the businesses
 
subject to
 
the Volcker

Rule; therefore, the Volcker Rule does not have a material effect on our
 
operations.

Anti-Money Laundering Initiative and the USA PATRIOT Act

A major focus of governmental policy relating to financial institutions in
 
recent years has been aimed at combating money

laundering and
 
terrorist financing.
 
The USA
 
PATRIOT
 
Act of
 
2001 (the
 
“USA PATRIOT
 
Act”) strengthened
 
the ability
 
of the
 
U.S.

government to help prevent, detect and prosecute international money
 
laundering and the financing of terrorism. Title
 
III of the USA

PATRIOT
 
Act imposed
 
significant compliance
 
and due
 
diligence obligations,
 
created new
 
crimes and
 
penalties and
 
expanded the

extra-territorial jurisdiction of the United States. Failure of a financial institution to comply with the USA PATRIOT Act’s requirements

could have serious legal and reputational consequences
 
for the institution.

The
 
Anti-Money
 
Laundering
 
Act
 
of
 
2020
 
(“AMLA”),
 
which
 
amended
 
the
 
Bank
 
Secrecy
 
Act
 
(the
 
“BSA”),
 
is
 
intended
 
to

comprehensively
 
reform
 
and
 
modernize
 
U.S.
 
anti-money
 
laundering
 
laws.
 
Among
 
other
 
things,
 
the
 
AMLA
 
codifies
 
a
 
risk-based

approach to anti-money laundering compliance for financial institutions; requires the U.S. Department of the Treasury to
 
promulgate

priorities
 
for
 
anti-money
 
laundering
 
and
 
countering
 
the
 
financing
 
of
 
terrorism
 
policy;
 
requires
 
the
 
development
 
of
 
standards
 
for

testing technology and
 
internal processes for BSA
 
compliance; expands enforcement-
 
and investigation-related authority,
 
including

a
 
significant
 
expansion
 
in
 
the
 
available
 
sanctions
 
for
 
certain
 
BSA
 
violations;
 
and
 
expands
 
BSA
 
whistleblower
 
incentives
 
and

protections.
 
Many
 
of
 
the
 
statutory
 
provisions
 
in
 
the
 
AMLA
 
require
 
additional
 
rulemakings,
 
reports
 
and
 
other
 
measures,
 
and
 
the

impact
 
of
 
the
 
AMLA
 
will
 
depend on,
 
among
 
other
 
things,
 
rulemaking and
 
implementation guidance.
 
In
 
June
 
2021,
 
the
 
Financial

Crimes Enforcement Network, a bureau of
 
the U.S. Department of the
 
Treasury,
 
issued the priorities for anti-money laundering
 
and

countering the
 
financing of
 
terrorism policy
 
required under AMLA.
 
The priorities
 
include: corruption, cybercrime,
 
terrorist financing,

fraud, transnational crime, drug trafficking, human trafficking and
 
proliferation financing.

Federal regulators
 
regularly examine BSA/Anti-Money
 
Laundering and sanctions
 
compliance to
 
enhance their
 
adequacy

and effectiveness, and the frequency and extent of such examinations
 
and related remedial actions have been
 
increasing.

Community Reinvestment Act

The
 
CRA
 
requires
 
banks
 
to
 
help
 
serve
 
the
 
credit
 
needs
 
of
 
their
 
communities,
 
including
 
extending
 
credit
 
to
 
low-
 
and

moderate-income individuals
 
and geographies.
 
Should
 
Popular
 
or our
 
bank
 
subsidiaries
 
fail
 
to
 
serve
 
adequately
 
the community,

potential penalties may include regulatory denials of applications to expand branches, relocate offices or branches, add subsidiaries

and affiliates, expand into new financial activities and merge
 
with or purchase other financial institutions.

Interchange Fees Regulation

The Federal Reserve Board
 
has established standards for
 
debit card interchange fees
 
and prohibited network exclusivity

arrangements and routing restrictions. The
 
maximum permissible interchange fee that
 
an issuer may receive
 
for an electronic debit

transaction is
 
the sum
 
of
 
21 cents
 
per transaction
 
and 5
 
basis points
 
multiplied by
 
the value
 
of
 
the transaction.
 
Additionally,
 
the

Federal Reserve
 
Board allows
 
for an
 
upward adjustment
 
of
 
no more
 
than 1
 
cent
 
to
 
an issuer’s
 
debit card
 
interchange fee
 
if the

issuer develops and implements policies and procedures
 
reasonably designed to achieve certain fraud-prevention
 
standards.

In
 
October
 
2023,
 
the
 
Federal
 
Reserve
 
Board
 
proposed
 
amendments
 
to
 
its
 
rules
 
on
 
interchange
 
fees.
 
If
 
adopted,
 
the

19

proposed changes
 
would establish
 
a maximum
 
permissible interchange
 
fee of
 
no more
 
than 14.4
 
cents per
 
transaction plus
 
four

basis
 
points
 
multiplied
 
by
 
the
 
value
 
of
 
the
 
transaction.
 
The
 
fraud
 
prevention
 
adjustment
 
would
 
be
 
increased
 
to
 
1.3
 
cents
 
per

transaction. The proposed changes would also establish an automatic update of
 
the interchange fee cap every other year based on

a survey of debit card issuers.

Consumer Financial Protection Act of 2010

The Consumer
 
Financial Protection
 
Bureau (the
 
“CFPB”) supervises
 
“covered persons”
 
(broadly defined
 
to include
 
any

person offering or
 
providing a consumer financial
 
product or service and
 
any affiliated service
 
provider) for compliance with
 
federal

consumer financial laws. The CFPB
 
also has the broad power
 
to prescribe rules applicable to
 
a covered person or service
 
provider

identifying
 
as
 
unlawful,
 
unfair,
 
deceptive,
 
or
 
abusive
 
acts
 
or
 
practices
 
in
 
connection
 
with
 
any
 
transaction
 
with
 
a
 
consumer
 
for
 
a

consumer financial product or service, or the offering of
 
a consumer financial product or service. We are subject to examination and

regulation by the CFPB. During 2025, the CFPB reduced its staff by over 80%. The
 
reduction in force is the subject of litigation, and

the
 
staffing
 
cuts
 
are
 
currently
 
stayed
 
pending
 
the
 
federal
 
circuit
 
court’s
 
en
 
banc
 
rehearing
 
of
 
the
 
case.
 
The
 
impact
 
of
 
these

developments
 
on
 
banking
 
organizations
 
subject
 
to
 
CFPB
 
regulation
 
and
 
supervision,
 
including
 
us,
 
is
 
uncertain.
 
The
 
Consumer

Financial Protection Act permits states to adopt consumer protection laws and standards that are more stringent than those adopted

at
 
the federal
 
level and,
 
in certain
 
circumstances, permits
 
state attorneys
 
general to
 
enforce compliance
 
with both
 
the state
 
and

federal laws and regulations. States and state attorneys general
 
may increase regulatory, investigative and enforcement activity with

respect to consumer protection, in
 
response to changes in regulation, supervision
 
and enforcement of consumer protection laws
 
by

federal regulators.

On October 22, 2024, the CFPB finalized a new rule to implement Section 1033 of the Consumer Financial Protection Act

that
 
requires
 
a
 
provider
 
of
 
payment
 
accounts
 
or
 
products,
 
such
 
as
 
a
 
bank,
 
to
 
make
 
data
 
available
 
to
 
consumers
 
upon
 
request

regarding the
 
products or
 
services they
 
obtain from
 
the provider.
 
Any such
 
data provider
 
also has
 
to make
 
such data
 
available to

third parties, with the consumer’s express authorization and
 
through an interface that satisfies formatting, performance
 
and security

standards,
 
for
 
the
 
purpose
 
of
 
such
 
third
 
parties
 
providing
 
the
 
consumer
 
with
 
financial
 
products
 
or
 
services
 
requested
 
by
 
the

consumer. Data required to be made available under the rule includes
 
transaction information, account balance, account and routing

numbers,
 
terms
 
and
 
conditions,
 
upcoming
 
bill
 
information,
 
and
 
certain
 
account
 
verification
 
data.
 
The
 
rule
 
is
 
intended
 
to
 
give

consumers
 
control
 
over
 
their
 
financial
 
data,
 
including
 
with
 
whom
 
it
 
is
 
shared,
 
and
 
encourage
 
competition
 
in
 
the
 
provision
 
of

consumer financial
 
products or
 
services. For
 
banks with
 
at least
 
$10 billion
 
and less
 
than $250
 
billion in
 
total assets,
 
compliance

with the rule’s requirements is required beginning on
 
April 1, 2027. The rule is the subject of litigation,
 
which is currently stayed while

the CFPB considers revisions to the rule.

Office of Foreign Assets Control Regulation

The
 
U.S.
 
Treasury
 
Department
 
Office
 
of
 
Foreign
 
Assets
 
Control
 
(“OFAC”)
 
administers
 
economic
 
sanctions
 
that
 
affect

transactions
 
with
 
designated
 
foreign
 
countries,
 
nationals
 
and
 
others.
 
The
 
OFAC-administered
 
sanctions
 
targeting
 
countries
 
take

many
 
different
 
forms.
 
Generally,
 
however,
 
they
 
contain
 
one
 
or
 
more
 
of
 
the
 
following
 
elements:
 
(i)
 
restrictions
 
on
 
trade
 
with
 
or

investment in a sanctioned country; and (ii) a blocking
 
of assets in which the government of the
 
sanctioned country or other specially

designated nationals have an interest, by prohibiting
 
transfers of property subject to U.S. jurisdiction (including
 
property in the United

States or the possession or control of U.S.
 
persons outside of the United States). Blocked assets (e.g., property
 
and bank deposits)

cannot
 
be
 
paid
 
out,
 
withdrawn, set
 
off
 
or
 
transferred
 
in
 
any
 
manner without
 
a
 
license
 
from
 
OFAC.
 
Failure
 
to
 
comply
 
with these

sanctions
 
could
 
have
 
serious
 
legal
 
and
 
reputational
 
consequences,
 
including
 
denial
 
by
 
federal
 
regulators
 
of
 
proposed
 
merger,

acquisition, restructuring, or other expansionary activity.

Protection of Customer Personal Information and