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Loans

3 Months Ended

Mar. 31, 2022

Note 7 – Loans

For a summary of the accounting policies related to loans, interest recognition and allowance for credit losses refer to Note 2 - Summary of Significant Accounting Policies of the 2021 Form 10-K.

During the quarter ended March 31, 2022, the Corporation recorded purchases (including repurchases) of mortgage loans amounting to $82 million including $3 million in Purchased Credit Deteriorated (“PCD”) loans and consumer loans of $91 million; compared to purchases (including repurchases) of mortgage loans of $126 million including $6 million in PCD loans and commercial loans of $21 million, during the quarter ended March 31, 2021.

The Corporation performed whole-loan sales involving approximately $19 million of residential mortgage loans and $1 million of commercial loans during the quarter ended March 31, 2022 (March 31, 2021 - $66 million of residential mortgage loans and $17 million of commercial loans). Also, during the quarter ended March 31, 2022, the Corporation securitized approximately $78 million of mortgage loans into Government National Mortgage Association (“GNMA”) mortgage-backed securities and $58 million of mortgage loans into Federal National Mortgage Association (“FNMA”) mortgage-backed securities, compared to $102 million and $86 million, respectively, during the quarter ended March 31, 2021. Also, the Corporation securitized approximately $7 million of mortgage loans into Federal Home Loan Mortgage Corporation (“FHLMC”) mortgage-backed securities during the quarter ended March 31, 2022.

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 March 31, 2022 and December 31, 2021.

March 31, 2022
Puerto Rico

			Past due											Past due 90 days or more
		30-59		60-89		90 days		Total						Non-accrual			Accruing
(In thousands)		days		days		or more		past due		Current		Loans HIP		loans		loans
Commercial multi-family		$	2,130	$	189	$	274	$	2,593	$	160,648	$	163,241	$	274	$	-
Commercial real estate:
	Non-owner occupied		3,646		93		20,627		24,366		2,536,174		2,560,540		20,627		-
	Owner occupied		4,024		50		49,732		53,806		1,396,696		1,450,502		49,732		-
Commercial and industrial			1,218		169		48,167		49,554		3,333,918		3,383,472		47,149		1,018
Construction			715		-		-		715		126,610		127,325		-		-
Mortgage			182,397		79,374		736,338		998,109		5,125,554		6,123,663		306,560		429,778
Leasing			9,819		2,446		3,766		16,031		1,410,091		1,426,122		3,766		-
Consumer:
	Credit cards		5,817		3,728		9,049		18,594		896,966		915,560		-		9,049
	Home equity lines of credit		-		-		23		23		3,093		3,116		-		23
	Personal		10,215		6,184		19,157		35,556		1,267,920		1,303,476		19,157		-
	Auto		51,497		11,353		27,514		90,364		3,339,798		3,430,162		27,514		-
	Other		537		37		12,184		12,758		112,322		125,080		12,037		147
Total		$	272,015	$	103,623	$	926,831	$	1,302,469	$	19,709,790	$	21,012,259	$	486,816	$	440,015

March 31, 2022
Popular U.S.

			Past due											Past due 90 days or more
		30-59		60-89		90 days		Total						Non-accrual			Accruing
(In thousands)		days		days		or more		past due		Current		Loans HIP		loans		loans
Commercial multi-family		$	-	$	-	$	-	$	-	$	1,865,623	$	1,865,623	$	-	$	-
Commercial real estate:
	Non-owner occupied^[1]		902		740		374		2,016		1,391,874		1,393,890		374		-
	Owner occupied^[1]		6,385		-		677		7,062		1,398,580		1,405,642		677		-
Commercial and industrial			10,925		602		4,891		16,418		1,788,918		1,805,336		4,352		539
Construction			-		-		-		-		617,458		617,458		-		-
Mortgage			13,006		1,069		21,826		35,901		1,166,782		1,202,683		21,826		-
Consumer:
	Credit cards		-		-		-		-		26		26		-		-
	Home equity lines of credit		259		15		5,248		5,522		68,437		73,959		5,248		-
	Personal		739		558		627		1,924		203,381		205,305		627		-
	Other		-		1		1		2		6,007		6,009		1		-
Total		$	32,216	$	2,985	$	33,644	$	68,845	$	8,507,086	$	8,575,931	$	33,105	$	539
[1] During the first quarter of 2022, the Corporation reclassified $0.9 billion of loans from the Commercial Real Estate (“CRE”) Non-Owner-Occupied category to the CRE Owner-Occupied category. The selected loans are primarily to skilled and assisted living nursing homes where the majority of the revenues, which are the basis for the repayment of the loans, are generated from medical and related operational activities. These loans meet the type of business and source requirements as defined in the regulatory guidance allowing this classification.

March 31, 2022
Popular, Inc.

			Past due											Past due 90 days or more
		30-59		60-89		90 days		Total						Non-accrual			Accruing
(In thousands)		days		days		or more		past due		Current		Loans HIP^{[2] [3]}		loans		loans
Commercial multi-family		$	2,130	$	189	$	274	$	2,593	$	2,026,271	$	2,028,864	$	274	$	-
Commercial real estate:
	Non-owner occupied		4,548		833		21,001		26,382		3,928,048		3,954,430		21,001		-
	Owner occupied		10,409		50		50,409		60,868		2,795,276		2,856,144		50,409		-
Commercial and industrial			12,143		771		53,058		65,972		5,122,836		5,188,808		51,501		1,557
Construction			715		-		-		715		744,068		744,783		-		-
Mortgage^[1]			195,403		80,443		758,164		1,034,010		6,292,336		7,326,346		328,386		429,778
Leasing			9,819		2,446		3,766		16,031		1,410,091		1,426,122		3,766		-
Consumer:
	Credit cards		5,817		3,728		9,049		18,594		896,992		915,586		-		9,049
	Home equity lines of credit		259		15		5,271		5,545		71,530		77,075		5,248		23
	Personal		10,954		6,742		19,784		37,480		1,471,301		1,508,781		19,784		-
	Auto		51,497		11,353		27,514		90,364		3,339,798		3,430,162		27,514		-
	Other		537		38		12,185		12,760		118,329		131,089		12,038		147
Total		$	304,231	$	106,608	$	960,475	$	1,371,314	$	28,216,876	$	29,588,190	$	519,921	$	440,554

[1]	It is the Corporation’s policy to report delinquent residential mortgage loans insured by Federal Housing Administration (“FHA”) or guaranteed by the U.S. Department of Veterans Affairs (“VA”) as accruing loans past due 90 days or more as opposed to non-performing since the principal repayment is insured. The balance of these loans includes $13 million at March 31, 2022 related to the rebooking of loans previously pooled into GNMA securities, in which the Corporation had a buy-back option as further described below. 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 repurchases option are required to be reflected (rebooked) on the financial statements of BPPR with an offsetting liability. These balances include $266 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of March 31, 2022. Furthermore, the Corporation has approximately $45 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.
[2]	Loans held-in-portfolio are net of $268 million in unearned income and exclude $55 million in loans held-for-sale.
[3]	Includes $6.4 billion pledged to secure credit facilities and public funds that the secured parties are not permitted to sell or repledge the collateral, of which $3.0 billion were pledged at the Federal Home Loan Bank ("FHLB") as collateral for borrowings and $1.7 billion at the Federal Reserve Bank ("FRB") for discount window borrowings and $1.7 billion serve as collateral for public funds.

December 31, 2021
Puerto Rico

			Past due											Past due 90 days or more
			30-59		60-89		90 days	Total						Non-accrual			Accruing
(In thousands)			days		days		or more	past due		Current		Loans HIP		loans		loans
Commercial multi-family		$	314	$	-	$	272	$	586	$	154,183	$	154,769	$	272	$	-
Commercial real estate:
	Non-owner occupied		2,399		136		20,716		23,251		2,266,672		2,289,923		20,716		-
	Owner occupied		3,329		278		54,335		57,942		1,365,787		1,423,729		54,335		-
Commercial and industrial			3,438		1,727		45,242		50,407		3,478,041		3,528,448		44,724		518
Construction			-		-		485		485		86,626		87,111		485		-
Mortgage			217,830		81,754		805,245		1,104,829		5,147,037		6,251,866		333,887		471,358
Leasing			9,240		2,037		3,102		14,379		1,366,940		1,381,319		3,102		-
Consumer:
	Credit cards		5,768		3,520		8,577		17,865		901,986		919,851		-		8,577
	Home equity lines of credit		46		-		23		69		3,502		3,571		-		23
	Personal		10,027		6,072		21,235		37,334		1,250,726		1,288,060		21,235		-
	Auto		59,128		15,019		23,085		97,232		3,314,955		3,412,187		23,085		-
	Other		432		714		12,621		13,767		110,781		124,548		12,448		173
Total		$	311,951	$	111,257	$	994,938	$	1,418,146	$	19,447,236	$	20,865,382	$	514,289	$	480,649

December 31, 2021
Popular U.S.

			Past due											Past due 90 days or more
			30-59		60-89		90 days		Total					Non-accrual			Accruing
(In thousands)			days		days		or more		past due		Current		Loans HIP	loans		loans
Commercial multi-family		$	3,826	$	-	$	-	$	3,826	$	1,804,035	$	1,807,861	$	-	$	-
Commercial real estate:
	Non-owner occupied		5,721		683		622		7,026		2,316,441		2,323,467		622		-
	Owner occupied		1,095		-		1,013		2,108		392,265		394,373		1,013		-
Commercial and industrial			9,410		2,680		4,015		16,105		1,794,026		1,810,131		3,897		118
Construction			-		-		-		-		629,109		629,109		-		-
Mortgage			11,711		2,573		21,969		36,253		1,139,077		1,175,330		21,969		-
Consumer:
	Credit cards		-		-		-		-		10		10		-		-
	Home equity lines of credit		71		34		5,406		5,511		69,780		75,291		5,406		-
	Personal		863		574		681		2,118		152,827		154,945		681		-
	Other		-		-		-		-		4,658		4,658		-		-
Total		$	32,697	$	6,544	$	33,706	$	72,947	$	8,302,228	$	8,375,175	$	33,588	$	118

December 31, 2021
Popular, Inc.

			Past due											Past due 90 days or more
			30-59		60-89		90 days		Total					Non-accrual			Accruing
(In thousands)			days		days		or more		past due	Current		Loans HIP^{[2] [3]}		loans		loans
Commercial multi-family		$	4,140	$	-	$	272	$	4,412	$	1,958,218	$	1,962,630	$	272	$	-
Commercial real estate:
	Non-owner occupied		8,120		819		21,338		30,277		4,583,113		4,613,390		21,338		-
	Owner occupied		4,424		278		55,348		60,050		1,758,052		1,818,102		55,348		-
Commercial and industrial			12,848		4,407		49,257		66,512		5,272,067		5,338,579		48,621		636
Construction			-		-		485		485		715,735		716,220		485		-
Mortgage^[1]			229,541		84,327		827,214		1,141,082		6,286,114		7,427,196		355,856		471,358
Leasing			9,240		2,037		3,102		14,379		1,366,940		1,381,319		3,102		-
Consumer:
	Credit cards		5,768		3,520		8,577		17,865		901,996		919,861		-		8,577
	Home equity lines of credit		117		34		5,429		5,580		73,282		78,862		5,406		23
	Personal		10,890		6,646		21,916		39,452		1,403,553		1,443,005		21,916		-
	Auto		59,128		15,019		23,085		97,232		3,314,955		3,412,187		23,085		-
	Other		432		714		12,621		13,767		115,439		129,206		12,448		173
Total		$	344,648	$	117,801	$	1,028,644	$	1,491,093	$	27,749,464	$	29,240,557	$	547,877	$	480,767

[1]	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 more as opposed to non-performing since the principal repayment is insured. The balance of these loans includes $13 million at December 31, 2021 related to the rebooking of loans previously pooled into GNMA securities, in which the Corporation had a buy-back option as further described below. 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 repurchases option are required to be reflected (rebooked) on the financial statements of BPPR with an offsetting liability. These balances include $304 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of December 31, 2021. Furthermore, the Corporation has approximately $50 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.
[2]	Loans held-in-portfolio are net of $266 million in unearned income and exclude $59 million in loans held-for-sale.
[3]	Includes $6.6 billion pledged to secure credit facilities and public funds that the secured parties are not permitted to sell or repledge the collateral, of which $3.2 billion were pledged at the FHLB as collateral for borrowings and $1.7 billion at the FRB for discount window borrowings and $1.7 billion serve as collateral for public funds.

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 VA when 15 months delinquent as to principal or interest, since the principal repayment on these loans is insured.

At March 31, 2022, mortgage loans held-in-portfolio include $1.9 billion (December 31, 2021 - $1.9 billion) of loans insured by the FHA, or guaranteed VA of which $0.4 billion (December 31, 2021 - $0.5 billion) are 90 days or more past due. These balances include $721 million in loans modified under a TDR (December 31, 2021 - $716 million), that are presented as accruing loans. The portfolio of guaranteed loans includes $266 million of residential mortgage loans in Puerto Rico that are no longer accruing interest as of March 31, 2022 (December 31, 2021 - $304 million). The Corporation has approximately $45 million in reverse mortgage loans in Puerto Rico which are guaranteed by FHA, but which are currently not accruing interest at March 31, 2022 (December 31, 2021 - $50 million).

Loans with a delinquency status of 90 days past due as of March 31, 2022 include $13 million in loans previously pooled into GNMA securities (December 31, 2021 - $13 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 March 31, 2022 and 2021 by class of loans:

March 31, 2022
	Puerto Rico				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	$	-	$	274	$	-	$	-	$	-	$	274
Commercial real estate non-owner occupied		15,477		5,150		-		374		15,477		5,524
Commercial real estate owner occupied		9,720		40,012		-		677		9,720		40,689
Commercial and industrial		27,536		19,613		-		4,352		27,536		23,965
Mortgage		159,025		147,535		-		21,826		159,025		169,361
Leasing		228		3,538		-		-		228		3,538
Consumer:
HELOCs		-		-		-		5,248		-		5,248
Personal		6,590		12,567		74		553		6,664		13,120
Auto		1,153		26,361		-		-		1,153		26,361
Other		263		11,774		-		1		263		11,775
Total	$	219,992	$	266,824	$	74	$	33,031	$	220,066	$	299,855

December 31, 2021
	Puerto Rico				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	$	-	$	272	$	-	$	-	$	-	$	272
Commercial real estate non-owner occupied		15,819		4,897		-		622		15,819		5,519
Commercial real estate owner occupied		13,491		40,844		-		1,013		13,491		41,857
Commercial and industrial		30,177		14,547		-		3,897		30,177		18,444
Construction		-		485		-		-		-		485
Mortgage		169,827		164,060		29		21,940		169,856		186,000
Leasing		276		2,826		-		-		276		2,826
Consumer:
HELOCs		-		-		-		5,406		-		5,406
Personal		6,279		14,956		81		600		6,360		15,556
Auto		879		22,206		-		-		879		22,206
Other		-		12,448		-		-		-		12,448
Total	$	236,748	$	277,541	$	110	$	33,478	$	236,858	$	311,019

Loans in non-accrual status with no allowance at March 31, 2022 include $220 million in collateral dependent loans (December 31, 2021 - $237 million). The Corporation recognized $4 million in interest income on non-accrual loans during the quarter ended March 31, 2022 (March 31, 2021 - $4 million).

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 on appraisals, which may be adjusted due to their age, and the type, location, and condition of the property or area or 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.

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 March 31, 2022 and December 31, 2021:

		March 31, 2022
(In thousands)			Real Estate		Auto		Equipment		Accounts Receivables		Other		Total
Puerto Rico
Commercial multi-family		$	1,367	$	-	$	-	$	-	$	-	$	1,367
Commercial real estate:
	Non-owner occupied		215,343		-		-		-		-		215,343
	Owner occupied		40,200		-		-		-		-		40,200
Commercial and industrial			1,731		-		668		10,250		32,149		44,798
Mortgage			165,879		-		-		-		-		165,879
Leasing			-		652		6		-		-		658
Consumer:
	Personal		6,585		-		-		-		-		6,585
	Auto		-		6,781		-		-		-		6,781
	Other		-		-		-		-		263		263
Total Puerto Rico		$	431,105	$	7,433	$	674	$	10,250	$	32,412	$	481,874
Popular U.S.
Mortgage		$	731		-		-		-		-	$	731
Total Popular U.S.		$	731	$	-	$	-	$	-	$	-	$	731
Popular, Inc.
Commercial multi-family		$	1,367	$	-	$	-	$	-	$	-	$	1,367
Commercial real estate:
	Non-owner occupied		215,343		-		-		-		-		215,343
	Owner occupied		40,200		-		-		-		-		40,200
Commercial and industrial			1,731		-		668		10,250		32,149		44,798
Mortgage			166,610		-		-		-		-		166,610
Leasing			-		652		6		-		-		658
Consumer:
	Personal		6,585		-		-		-		-		6,585
	Auto		-		6,781		-		-		-		6,781
	Other		-		-		-		-		263		263
Total Popular, Inc.		$	431,836	$	7,433	$	674	$	10,250	$	32,412	$	482,605

		December 31, 2021
(In thousands)			Real Estate		Auto		Equipment		Accounts Receivables		Other		Total
Puerto Rico
Commercial multi-family		$	1,374	$	-	$	-	$	-	$	-	$	1,374
Commercial real estate:
	Non-owner occupied		211,026		-		-		-		-		211,026
	Owner occupied		47,268		-		-		-		-		47,268
Commercial and industrial			2,650		-		680		10,675		27,893		41,898
Mortgage			179,774		-		-		-		-		179,774
Leasing			-		574		-		-		-		574
Consumer:
	Personal		6,165		-		-		-		-		6,165
	Auto		-		8,983		-		-		-		8,983
Total Puerto Rico		$	448,257	$	9,557	$	680	$	10,675	$	27,893	$	497,062
Popular U.S.
Mortgage		$	926		-		-		-		-	$	926
Total Popular U.S.		$	926	$	-	$	-	$	-	$	-	$	926
Popular, Inc.
Commercial multi-family		$	1,374	$	-	$	-	$	-	$	-	$	1,374
Commercial real estate:
	Non-owner occupied		211,026		-		-		-		-		211,026
	Owner occupied		47,268		-		-		-		-		47,268
Commercial and industrial			2,650		-		680		10,675		27,893		41,898
Mortgage			180,700		-		-		-		-		180,700
Leasing			-		574		-		-		-		574
Consumer:
	Personal		6,165		-		-		-		-		6,165
	Auto		-		8,983		-		-		-		8,983
Total Popular, Inc.		$	449,183	$	9,557	$	680	$	10,675	$	27,893	$	497,988

Purchased Credit Deteriorated (PCD) Loans

The Corporation has purchased loans during the quarter for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows:


(In thousands)		March 31, 2022		March 31, 2021
Purchase price of loans at acquisition	$	2,002	$	4,935
Allowance for credit losses at acquisition		612		1,356
Non-credit discount / (premium) at acquisition		99		121
Par value of acquired loans at acquisition	$	2,713	$	6,412