Loans

3 Months Ended

Mar. 31, 2021

Receivables

Loans

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 in the 2020 Form 10-K.

During the quarter ended March 31, 2021, the Corporation recorded purchases (including repurchases) of mortgage loans amounting to $126 million including $ 6 million in Purchased Credit Deteriorated (“PCD”) loans and commercial loans of $21 million; compared to purchases (including repurchases) of mortgage loans of $85 million including $4 million in PCD loans, consumer loans of $56 million and commercial loans of $1 million, during the quarter ended March 31, 2020.

The Corporation performed whole-loan sales involving approximately $66 million of residential mortgage loans and $17 million of commercial loans during the quarter ended March 31, 2021 (March 31, 2020 - $10 million of residential mortgage and $2 million of commercial and construction loans). Also, during the quarter ended March 31, 2021, the Corporation securitized approximately $ 102 million of mortgage loans into Government National Mortgage Association (“GNMA”) mortgage-backed securities and $ 86 million of mortgage loans into Federal National Mortgage Association (“FNMA”) mortgage-backed securities, compared to $ 51 million and $ 34 million, respectively, during the quarter ended March 31, 2020.

Delinquency status

The following table presents 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, 2021 and December 31, 2020.

March 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		$	196	$	-	$	814	$	1,010	$	137,097	$	138,107	$	814	$	-
Commercial real estate:
	Non-owner occupied		939		25,406		76,524		102,869		1,958,129		2,060,998		76,524		-
	Owner occupied		6,749		2,114		89,752		98,615		1,413,356		1,511,971		89,752		-
Commercial and industrial			3,870		650		34,333		38,853		4,032,359		4,071,212		33,773		560
Construction			639		-		14,877		15,516		145,081		160,597		14,877		-
Mortgage[1]			175,930		83,770		1,211,935		1,471,635		5,204,344		6,675,979		390,781		821,154
Leasing			7,564		1,408		3,040		12,012		1,232,944		1,244,956		3,040		-
Consumer:
	Credit cards		4,824		3,883		10,779		19,486		858,255		877,741		-		10,779
	Home equity lines of credit		-		-		46		46		3,498		3,544		-		46
	Personal		10,216		6,250		25,731		42,197		1,219,094		1,261,291		25,731		-
	Auto		47,396		8,783		15,405		71,584		3,131,553		3,203,137		15,405		-
	Other		360		375		15,489		16,224		108,508		124,732		15,281		208
Total		$	258,683	$	132,639	$	1,498,725	$	1,890,047	$	19,444,218	$	21,334,265	$	665,978	$	832,747

March 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		$	30,185	$	-	$	-	$	30,185	$	1,724,802	$	1,754,987	$	-	$	-
Commercial real estate:
	Non-owner occupied		8,280		-		392		8,672		2,034,383		2,043,055		392		-
	Owner occupied		5,437		644		323		6,404		323,541		329,945		323		-
Commercial and industrial			7,226		1,321		1,201		9,748		1,522,463		1,532,211		1,192		9
Construction			11,110		-		7,523		18,633		728,506		747,139		7,523		-
Mortgage			13,032		1,762		14,793		29,587		1,103,286		1,132,873		14,793		-
Consumer:
	Credit cards		-		-		-		-		22		22		-		-
	Home equity lines of credit		121		10		6,855		6,986		82,631		89,617		6,855		-
	Personal		1,156		666		1,086		2,908		162,540		165,448		1,086		-
	Other		-		-		-		-		2,066		2,066		-		-
Total		$	76,547	$	4,403	$	32,173	$	113,123	$	7,684,240	$	7,797,363	$	32,164	$	9

March 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		$	30,381	$	-	$	814	$	31,195	$	1,861,899	$	1,893,094	$	814	$	-
Commercial real estate:
	Non-owner occupied		9,219		25,406		76,916		111,541		3,992,512		4,104,053		76,916		-
	Owner occupied		12,186		2,758		90,075		105,019		1,736,897		1,841,916		90,075		-
Commercial and industrial			11,096		1,971		35,534		48,601		5,554,822		5,603,423		34,965		569
Construction			11,749		-		22,400		34,149		873,587		907,736		22,400		-
Mortgage[1]			188,962		85,532		1,226,728		1,501,222		6,307,630		7,808,852		405,574		821,154
Leasing			7,564		1,408		3,040		12,012		1,232,944		1,244,956		3,040		-
Consumer:
	Credit cards		4,824		3,883		10,779		19,486		858,277		877,763		-		10,779
	Home equity lines of credit		121		10		6,901		7,032		86,129		93,161		6,855		46
	Personal		11,372		6,916		26,817		45,105		1,381,634		1,426,739		26,817		-
	Auto		47,396		8,783		15,405		71,584		3,131,553		3,203,137		15,405		-
	Other		360		375		15,489		16,224		110,574		126,798		15,281		208
Total		$	335,230	$	137,042	$	1,530,898	$	2,003,170	$	27,128,458	$	29,131,628	$	698,142	$	832,756

[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. These include loans rebooked, which were previously pooled into GNMA securities amounting to $29 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 (rebooked) 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.
[2]	Loans held-in-portfolio are net of $213 million in unearned income and exclude $84 million in loans held-for-sale.
[3]	Includes $6.3 billion pledged to secure credit facilities and public funds that the secured parties are not permitted to sell or repledge the collateral, of which $4.0 billion were pledged at the Federal Home Loan Bank ("FHLB") as collateral for borrowings and $2.3 billion at the Federal Reserve Bank ("FRB") for discount window borrowings.

December 31, 2020
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[1]		Current		Loans HIP		loans		loans
Commercial multi-family		$	796	$	-	$	505	$	1,301	$	150,979	$	152,280	$	505	$	-
Commercial real estate:
	Non-owner occupied		2,189		3,503		77,137		82,829		1,924,504		2,007,333		77,137		-
	Owner occupied		8,270		1,218		92,001		101,489		1,497,406		1,598,895		92,001		-
Commercial and industrial			10,223		775		35,012		46,010		4,183,098		4,229,108		34,449		563
Construction			-		-		21,497		21,497		135,609		157,106		21,497		-
Mortgage[2]			195,602		87,726		1,428,824		1,712,152		5,057,991		6,770,143		414,343		1,014,481
Leasing			9,141		1,427		3,441		14,009		1,183,652		1,197,661		3,441		-
Consumer:
	Credit cards		6,550		4,619		12,798		23,967		895,968		919,935		-		12,798
	Home equity lines of credit		184		-		48		232		3,947		4,179		-		48
	Personal		11,255		8,097		26,387		45,739		1,232,008		1,277,747		26,387		-
	Auto		53,186		12,696		15,736		81,618		3,050,610		3,132,228		15,736		-
	Other		304		483		15,052		15,839		110,826		126,665		14,881		171
Total		$	297,700	$	120,544	$	1,728,438	$	2,146,682	$	19,426,598	$	21,573,280	$	700,377	$	1,028,061
[1]	Loans included as 90 days or more past due include loans that that are not delinquent in their payment terms but that are reported as nonperforming due to other credit quality considerations. As part of the adoption of CECL, at January 1, 2020, the Corporation reclassified to this category $134 million of acquired loans with credit deterioration that were previously excluded from non-performing status. In addition, as part of the CECL transition, an additional $125 million of loans that were 90 days or more past due previously excluded from non-performing status are now included as non-performing.
[2]	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. These include $57 million in loans rebooked under the GNMA program at December 31, 2020, in which issuers such as BPPR have the option but not the obligation to repurchase loans that are 90 days or more past due.

December 31, 2020
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		$	5,273	$	-	$	1,894	$	7,167	$	1,736,544	$	1,743,711	$	1,894	$	-
Commercial real estate:
	Non-owner occupied		924		3,640		669		5,233		1,988,577		1,993,810		669		-
	Owner occupied		191		650		334		1,175		343,205		344,380		334		-
Commercial and industrial			1,117		72		3,091		4,280		1,540,513		1,544,793		3,091		-
Construction			21,312		-		7,560		28,872		740,230		769,102		7,560		-
Mortgage			33,422		15,464		14,864		63,750		1,056,787		1,120,537		14,864		-
Consumer:
	Credit cards		-		-		3		3		28		31		-		3
	Home equity lines of credit		236		342		7,491		8,069		86,502		94,571		7,491		-
	Personal		1,486		1,342		1,474		4,302		194,936		199,238		1,474		-
	Other		-		-		20		20		1,723		1,743		20		-
Total		$	63,961	$	21,510	$	37,400	$	122,871	$	7,689,045	$	7,811,916	$	37,397	$	3

December 31, 2020
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[2]		past due	Current		Loans HIP[3] [4]		loans		loans
Commercial multi-family		$	6,069	$	-	$	2,399	$	8,468	$	1,887,523	$	1,895,991	$	2,399	$	-
Commercial real estate:
	Non-owner occupied		3,113		7,143		77,806		88,062		3,913,081		4,001,143		77,806		-
	Owner occupied		8,461		1,868		92,335		102,664		1,840,611		1,943,275		92,335		-
Commercial and industrial			11,340		847		38,103		50,290		5,723,611		5,773,901		37,540		563
Construction			21,312		-		29,057		50,369		875,839		926,208		29,057		-
Mortgage[1]			229,024		103,190		1,443,688		1,775,902		6,114,778		7,890,680		429,207		1,014,481
Leasing			9,141		1,427		3,441		14,009		1,183,652		1,197,661		3,441		-
Consumer:
	Credit cards		6,550		4,619		12,801		23,970		895,996		919,966		-		12,801
	Home equity lines of credit		420		342		7,539		8,301		90,449		98,750		7,491		48
	Personal		12,741		9,439		27,861		50,041		1,426,944		1,476,985		27,861		-
	Auto		53,186		12,696		15,736		81,618		3,050,610		3,132,228		15,736		-
	Other		304		483		15,072		15,859		112,549		128,408		14,901		171
Total		$	361,661	$	142,054	$	1,765,838	$	2,269,553	$	27,115,643	$	29,385,196	$	737,774	$	1,028,064

[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. These include loans rebooked, which were previously pooled into GNMA securities amounting to $57 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 (rebooked) 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.
[2]	Loans included as 90 days or more past due include loans that that are not delinquent in their payment terms but that are reported as nonperforming due to other credit quality considerations. As part of the adoption of CECL, at January 1, 2020, the Corporation reclassified to this category $134 million of acquired loans with credit deterioration that were previously excluded from non-performing status. In addition, as part of the CECL transition, an additional $144 million of loans that were 90 days or more past due previously excluded from non-performing status are now included as non-performing.
[3]	Loans held-in-portfolio are net of $203 million in unearned income and exclude $99 million in loans held-for-sale.
[4]	Includes $6.5 billion pledged to secure credit facilities and public funds that the secured parties are not permitted to sell or repledge the collateral, of which $4.1 billion were pledged at the FHLB as collateral for borrowings and $2.4 billion at the FRB for discount window borrowings.

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 Federal Housing Administration (“FHA”) or guaranteed by the U.S. Department of Veterans Affairs (“VA”) when 15 months delinquent as to principal or interest, since the principal repayment on these loans is insured.

At March 31, 2021, mortgage loans held-in-portfolio include $2.1 billion (December 31, 2020 - $2.1 billion) of loans insured by the Federal Housing Administration (“FHA”), or guaranteed by the U.S. Department of Veterans Affairs (“VA”) of which $0.8 billion (December 31, 2020 - $1.0 million) are 90 days or more past due. These balances include $675 million in loans modified under a TDR (December 31, 2020 - $655 million), that are presented as accruing loans. The portfolio of U.S. guaranteed loans includes $341 million of residential mortgage loans in Puerto Rico that are no longer accruing interest as of March 31, 2021 (December 31, 2020 - $329 million). The Corporation has approximately $58 million in reverse mortgage loans in Puerto Rico which are guaranteed by FHA, but which are currently not accruing interest at March 31, 2021 (December 31, 2020 - $60 million).

Loans with a delinquency status of 90 days past due as of March 31, 2021 include $29 million in loans previously pooled into GNMA securities (December 31, 2020 - $57 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, 2021 and December 31, 2020 by class of loans:

March 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	$	-	$	814	$	-	$	-	$	-	$	814
Commercial real estate non-owner occupied		60,727		15,797		-		392		60,727		16,189
Commercial real estate owner occupied		25,612		64,140		-		323		25,612		64,463
Commercial and industrial		22,264		11,509		-		1,192		22,264		12,701
Construction		14,877		-		7,523		-		22,400		-
Mortgage		160,605		230,176		-		14,793		160,605		244,969
Leasing		-		3,040		-		-		-		3,040
Consumer:
HELOCs		-		-		-		6,855		-		6,855
Personal		7,690		18,041		-		1,086		7,690		19,127
Auto		-		15,405		-		-		-		15,405
Other		-		15,281		-		-		-		15,281
Total	$	291,775	$	374,203	$	7,523	$	24,641	$	299,298	$	398,844

December 31, 2020
	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	$	-	$	505	$	-	$	1,894	$	-	$	2,399
Commercial real estate non-owner occupied		35,968		41,169		-		669		35,968		41,838
Commercial real estate owner occupied		14,825		77,176		-		334		14,825		77,510
Commercial and industrial		1,148		33,301		-		3,091		1,148		36,392
Construction		-		21,497		-		7,560		-		29,057
Mortgage		141,737		272,606		517		14,347		142,254		286,953
Leasing		-		3,441		-		-		-		3,441
Consumer:
HELOCs		-		-		-		7,491		-		7,491
Personal		9,265		17,122		-		1,474		9,265		18,596
Auto		-		15,736		-		-		-		15,736
Other		-		14,881		-		20		-		14,901
Total	$	202,943	$	497,434	$	517	$	36,880	$	203,460	$	534,314

Loans in non-accrual status with no allowance at March 31, 2021 include $299 million in collateral dependent loans (December 31, 2020 - $203 million). The Corporation recognized $4 million in interest income on non-accrual loans during the quarter ended March 31, 2021 (March 31, 2020 - $3 million).

The Corporation has designated loans classified as collateral dependent for which it applies the practical expedient to measure the ACL based on the fair value of the collateral less cost to sell, 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 by class of loans and type of collateral as of March 31, 2021 and December 31, 2020:

		March 31, 2021
(In thousands)			Real Estate		Auto		Equipment		Taxi Medallions		Accounts Receivables		Other		Total
Puerto Rico
Commercial multi-family		$	1,374	$	-	$	-	$	-	$	-	$	-	$	1,374
Commercial real estate:
	Non-owner occupied		295,454		-		-		-		-		-		295,454
	Owner occupied		78,710		-		-		-		-		-		78,710
Commercial and industrial			6,481		-		1,428		-		10,982		12,005		30,896
Construction			14,877		-		-		-		-		-		14,877
Mortgage			208,691		-		-		-		-		-		208,691
Consumer:
	Personal		7,817		-		-		-		-		-		7,817
	Auto		-		517		-		-		-		-		517
Total Puerto Rico		$	613,404	$	517	$	1,428	$	-	$	10,982	$	12,005	$	638,336
Popular U.S.
Commercial and industrial		$	-	$	-	$	-	$	115	$	-	$	-	$	115
Construction			7,523		-		-		-		-		-		7,523
Mortgage			573		-		-		-		-		-		573
Total Popular U.S.		$	8,096	$	-	$	-	$	115	$	-	$	-	$	8,211
Popular, Inc.
Commercial multi-family		$	1,374	$	-	$	-	$	-	$	-	$	-	$	1,374
Commercial real estate:
	Non-owner occupied		295,454		-		-		-		-		-		295,454
	Owner occupied		78,710		-		-		-		-		-		78,710
Commercial and industrial			6,481		-		1,428		115		10,982		12,005		31,011
Construction			22,400		-		-		-		-		-		22,400
Mortgage			209,264		-		-		-		-		-		209,264
Consumer:
	Personal		7,817		-		-		-		-		-		7,817
	Auto		-		517		-		-		-		-		517
Total Popular, Inc.		$	621,500	$	517	$	1,428	$	115	$	10,982	$	12,005	$	646,547

		December 31, 2020
(In thousands)			Real Estate		Auto		Equipment		Taxi Medallions		Accounts Receivables		Other		Total
Puerto Rico
Commercial multi-family		$	1,301	$	-	$	-	$	-	$	-	$	-	$	1,301
Commercial real estate:
	Non-owner occupied		299,223		-		-		-		-		-		299,223
	Owner occupied		79,769		-		-		-		-		-		79,769
Commercial and industrial			7,577		-		1,438		-		10,989		12,046		32,050
Construction			21,497		-		-		-		-		-		21,497
Mortgage			181,648		-		-		-		-		-		181,648
Consumer:
	Personal		7,414		-		-		-		-		-		7,414
	Auto		-		4		-		-		-		-		4
Total Puerto Rico		$	598,429	$	4	$	1,438	$	-	$	10,989	$	12,046	$	622,906
Popular U.S.
Commercial multi-family		$	1,755	$	-	$	-	$	-	$	-	$	-	$	1,755
Commercial and industrial			-		-		-		1,545		-		-		1,545
Construction			7,560		-		-		-		-		-		7,560
Mortgage			855		-		-		-		-		-		855
Total Popular U.S.		$	10,170	$	-	$	-	$	1,545	$	-	$	-	$	11,715
Popular, Inc.
Commercial multi-family		$	3,056	$	-	$	-	$	-	$	-	$	-	$	3,056
Commercial real estate:
	Non-owner occupied		299,223		-		-		-		-		-		299,223
	Owner occupied		79,769		-		-		-		-		-		79,769
Commercial and industrial			7,577		-		1,438		1,545		10,989		12,046		33,595
Construction			29,057		-		-		-		-		-		29,057
Mortgage			182,503		-		-		-		-		-		182,503
Consumer:
	Personal		7,414		-		-		-		-		-		7,414
	Auto		-		4		-		-		-		-		4
Total Popular, Inc.		$	608,599	$	4	$	1,438	$	1,545	$	10,989	$	12,046	$	634,621

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, 2021		March 31, 2020
Purchase price of loans at acquisition	$	4,935	$	3,112
Allowance for credit losses at acquisition		1,356		429
Non-credit premium at acquisition		121		138
Par value of acquired loans at acquisition	$	6,412	$	3,679