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Fair value of financial instruments | 3 Months Ended
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Mar. 31, 2024
Fair Value Disclosures |
Fair Value of Financial Instruments | Note 24 – Fair value of financial instruments The fair value of financial instruments is the amount at which an asset or obligation could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. For those financial instruments with no quoted market prices available, fair values have been estimated using present value calculations or other valuation techniques, as well as management’s best judgment with respect to current economic conditions, including discount rates, estimates of future cash flows, and prepayment assumptions. Many of these estimates involve various assumptions and may vary significantly from amounts that could be realized in actual transactions. The fair values reflected herein have been determined based on the prevailing rate environment at March 31, 2024 and December 31, 2023, as applicable. In different interest rate environments, fair value estimates can differ significantly, especially for certain fixed rate financial instruments. In addition, the fair values presented do not attempt to estimate the value of the Corporation’s fee generating businesses and anticipated future business activities, that is, they do not represent the Corporation’s value as a going concern. There have been no changes in the Corporation’s valuation methodologies and inputs used to estimate the fair values for each class of financial assets and liabilities not measured at fair value. The following tables present the carrying amount and estimated fair values of financial instruments with their corresponding level in the fair value hierarchy. The aggregate fair value amounts of the financial instruments disclosed do not represent management’s estimate of the underlying value of the Corporation. March 31, 2024 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Assets: Cash and due from banks $ 320,486 $ 320,486 $ - $ - $ - $ 320,486 Money market investments 5,928,578 5,920,785 7,793 - - 5,928,578 Trading account debt securities, excluding derivatives [1] 27,303 8,316 18,737 250 - 27,303 Debt securities available-for-sale [1] 18,017,424 6,262,480 11,752,337 2,607 - 18,017,424 Debt securities held-to-maturity: U.S. Treasury securities $ 8,013,952 $ - $ 7,894,800 $ - $ - $ 7,894,800 Obligations of Puerto Rico, States and political subdivisions 55,981 - 6,918 49,284 - 56,202 Collateralized mortgage obligation-federal agency 1,536 - 1,364 - - 1,364 Securities in wholly owned statutory business trusts 5,960 - 5,960 - - 5,960 Total debt securities held-to-maturity $ 8,077,429 $ - $ 7,909,042 $ 49,284 $ - $ 7,958,326 Equity securities: FHLB stock $ 48,604 $ - $ 48,604 $ - $ - $ 48,604 FRB stock 99,920 - 99,920 - - 99,920 Other investments 47,223 - 40,933 6,531 336 47,800 Total equity securities $ 195,747 $ - $ 189,457 $ 6,531 $ 336 $ 196,324 Loans held-for-sale $ 5,352 $ - $ 5,532 $ - $ - $ 5,532 Loans held-in-portfolio 34,379,194 - - 33,249,195 - 33,249,195 Mortgage servicing rights 114,964 - - 114,964 - 114,964 Derivatives 24,045 - 24,045 - - 24,045 March 31, 2024 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Liabilities: Deposits: Demand deposits $ 55,053,712 $ - $ 55,053,712 $ - $ - $ 55,053,712 Time deposits 8,755,072 - 8,430,548 - - 8,430,548 Total deposits $ 63,808,784 $ - $ 63,484,260 $ - $ - $ 63,484,260 Assets sold under agreements to repurchase $ 66,090 $ - $ 66,088 $ - $ - $ 66,088 Notes payable: FHLB advances $ 373,665 $ - $ 358,046 $ - $ - $ 358,046 Unsecured senior debt securities 394,285 - 410,228 - - 410,228 Junior subordinated deferrable interest debentures (related to trust preferred securities) 198,353 - 187,383 - - 187,383 Total notes payable $ 966,303 $ - $ 955,657 $ - $ - $ 955,657 Derivatives $ 21,784 $ - $ 21,784 $ - $ - $ 21,784 [1] Refer to Note 23 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level. December 31, 2023 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Assets: Cash and due from banks $ 420,462 $ 420,462 $ - $ - $ - $ 420,462 Money market investments 6,998,871 6,991,758 7,113 - - 6,998,871 Trading account debt securities, excluding derivatives [1] 31,568 16,859 14,425 284 - 31,568 Debt securities available-for-sale [1] 16,729,044 3,936,036 12,789,902 3,106 - 16,729,044 Debt securities held-to-maturity: U.S. Treasury securities $ 8,121,411 $ - $ 8,092,339 $ - $ - $ 8,092,339 Obligations of Puerto Rico, States and political subdivisions 59,628 - 7,007 52,671 - 59,678 Collateralized mortgage obligation-federal agency 1,556 - 1,395 13 - 1,408 Securities in wholly owned statutory business trusts 5,960 - 5,960 - - 5,960 Total debt securities held-to-maturity $ 8,188,555 $ - $ 8,106,701 $ 52,684 $ - $ 8,159,385 Equity securities: FHLB stock $ 49,549 $ - $ 49,549 $ - $ - $ 49,549 FRB stock 98,948 - 98,948 - - 98,948 Other investments 45,229 - 37,965 7,869 310 46,144 Total equity securities $ 193,726 $ - $ 186,462 $ 7,869 $ 310 $ 194,641 Loans held-for-sale $ 4,301 $ - $ 4,328 $ - $ - $ 4,328 Loans held-in-portfolio 34,335,630 - - 33,376,255 - 33,376,255 Mortgage servicing rights 118,109 - - 118,109 - 118,109 Derivatives 24,419 - 24,419 - - 24,419 December 31, 2023 Carrying Measured (In thousands) amount Level 1 Level 2 Level 3 at NAV Fair value Financial Liabilities: Deposits: Demand deposits $ 55,116,351 $ - $ 55,116,351 $ - $ - $ 55,116,351 Time deposits 8,501,892 - 8,154,823 - - 8,154,823 Total deposits $ 63,618,243 $ - $ 63,271,174 $ - $ - $ 63,271,174 Assets sold under agreements to repurchase $ 91,384 $ - $ 91,386 $ - $ - $ 91,386 Notes payable: FHLB advances $ 394,665 $ - $ 377,851 $ - $ - $ 377,851 Unsecured senior debt securities 393,937 - 400,848 - - 400,848 Junior subordinated deferrable interest debentures (related to trust preferred securities) 198,346 - 180,076 - - 180,076 Total notes payable $ 986,948 $ - $ 958,775 $ - $ - $ 958,775 Derivatives $ 21,103 $ - $ 21,103 $ - $ - $ 21,103 [1] Refer to Note 23 to the Consolidated Financial Statements for the fair value by class of financial asset and its hierarchy level. The notional amount of commitments to extend credit at March 31, 2024 and December 31, 2023 was $ 11 billion and $ 10 billion, respectively, and represented the unused portion of credit facilities granted to customers. The notional amount of letters of credit at March 31, 2024 and December 31, 2023 was $ 117 million and $ 82 million, respectively, and represented the contractual amount that is required to be paid in the event of nonperformance. The fair value of commitments to extend credit and letters of credit, which are based on the fees charged to enter into those agreements, are not material to Popular’s financial statements.

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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