Popular BPOP Form 10-Q filing Q2 FY2026

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Item 1. Financial Statements

The accompanying notes are an integral part of these Consolidated Financial Statements.

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The accompanying notes are an integral part of these Consolidated Financial Statements.

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Tax effect allocated to each component of other comprehensive income:

The accompanying notes are an integral part of the Consolidated Financial Statements.

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[1]Dividends declared per common share during the quarter ended June 30, 2026 - $0.75 (2025 - $0.70).

[2]Includes common stock repurchases of $112.0 million as part of the 2024 common stock repurchase program.

[3]Includes common stock repurchases of $125.3 million as part of the 2025 common stock repurchase program.

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[1]Dividends declared per common share during the six months ended June 30, 2026 - $1.50 (2025 - $1.40).

[2]Includes common stock repurchases of $234.3 million as part of the 2024 common stock repurchase program.

[3]Includes common stock repurchases of $280.5 million as part of the 2025 common stock repurchase program.

The accompanying notes are an integral part of these Consolidated Financial Statements.

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The accompanying notes are an integral part of these Consolidated Financial Statements.

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Notes to Consolidated

Financial Statements (Unaudited)

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Note 1 - Nature of operations

Popular, Inc. (the “Corporation" or “Popular") 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 mainland United

States (“U.S.") and the U.S. and British Virgin Islands. In Puerto Rico, the Corporation provides retail, mortgage and commercial banking

services, as well as 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, mortgage 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 2 - Basis of presentation

Basis of Presentation

The (unaudited) interim Consolidated Financial Statements are, in the opinion of management, a fair statement of the results for the periods

reported. The consolidated statement of financial condition presented as of December 31, 2025 was derived from audited Consolidated

Financial Statements of the Corporation for the year ended December 31, 2025.

Certain information and notes to the financial statements disclosures which would normally be included in financial statements prepared in

accordance with Accounting Principles Generally Accepted in the United States of America (U.S. GAAP), have been condensed or omitted

from the unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly,

these financial statements should be read in conjunction with the audited Consolidated Financial Statements of the Corporation for the year

ended December 31, 2025, included in the 2025 Form 10-K. Operating results for the interim periods disclosed herein are not necessarily

indicative of the results that may be expected for a full year or any future period.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and contingent assets and

liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual

results could differ from those estimates.

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Note 3 - New accounting pronouncements

Recently Adopted Accounting Standards Updates

Standard Description Date of adoption Effect on the financial statements

FASB ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses for Accounts Receivables and Contract Assets The Financial Accounting Standards Board (the "FASB") issued Accounting Standard Update ("ASU") 2025-05 in July 2025, which permits entities to elect a practical expedient when accounting for current accounts receivable and current contract assets arising from transactions accounted for under Accounting Standard Update ("ASC") Topic 606, Revenue from Contracts with Customers. This practical expedient establishes that, in developing reasonable and supportable forecasts as part of estimating expected credit losses, entities assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. January 1, 2026 The Corporation does not currently engage in transactions within the scope of this guidance. Accordingly, adoption did not have a material impact on the consolidated financial statements. Should the Corporation enter into such transactions in the future, the impact would be evaluated at that time.

FASB ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20) - Induced Conversions of Convertible Debt Instruments The FASB issued ASU 2024-04 in November 2024, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. Also it makes additional clarifications to assist stakeholders in applying the guidance. The ASU clarifies that the incorporation, elimination, or modification of a volume- weighted average price ("VWAP") formula does not automatically cause a settlement to be accounted for as an extinguishment and that the induced conversion guidance applies to a convertible debt instrument that is not currently convertible as long as it had a substantive conversion feature as of both its issuance date and the date the inducement offer is accepted. January 1, 2026 The Corporation does not currently engage in transactions within the scope of this guidance. Accordingly, adoption did not have a material impact on the consolidated financial statements. Should the Corporation enter into such transactions in the future, the impact would be evaluated at that time.

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Accounting Standards Updates Not Yet Adopted

Standard Description Date of adoption Effect on the financial statements

FASB ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818) The FASB issued ASU 2026-02 in May 2026, which improves the financial accounting for and disclosure of environmental credits and environmental credit obligations. This Update provides recognition, measurement, presentation and disclosure requirements for entities that generate, purchase or receive environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. January 1, 2028 The Corporation does not currently engage in transactions within the scope of this guidance. Accordingly, adoption is not expected to have a material impact on the consolidated financial statements. Should the Corporation enter into such transactions in the future, the impact would be evaluated at that time.

FASB ASU 2026-01, Equity (Topic 505) - Initial Measurement of Paid-in Kind Dividends on Equity-Classified Preferred Stock The FASB issued ASU 2026-01 in April 2026, which establishes authoritative guidance on the initial measurement of paid-in-kind (PIK) dividends on equity-classified preferred stock. The update establishes a consistent measurement requirement for PIK dividends but does not address when such dividends should be recognized. It requires PIK dividends to be initially measured using the stated PIK dividend rate in the preferred stock agreement, generally applied to the liquidation preference of the preferred stock. January 1, 2027 The Corporation does not currently engage in transactions within the scope of this guidance. Accordingly, adoption is not expected to have a material impact on the consolidated financial statements. Should the Corporation enter into such transactions in the future, the impact would be evaluated at that time.

FASB ASU 2025-10, Government Grants (Topic 832) - Accounting for Government Grants Received by Business Entities The FASB issued ASU 2025-10 in December 2025, which establishes the accounting for government grants received by a business entity. The update establishes recognition, measurement, and disclosure requirements for government grants. It allows asset related grants to be recognized either as deferred income or as an adjustment to the cost basis of an asset and income-related grants as deferred income. January 1, 2029 The Corporation does not currently engage in transactions within the scope of this guidance. Accordingly, adoption is not expected to have a material impact on the consolidated financial statements. Should the Corporation enter into such transactions in the future, the impact would be evaluated at that time.

FASB ASU 2025-09, Derivatives and Hedging (Topic 815) - Hedge Accounting Improvements The FASB issued ASU 2025-09 in November 2025, which aims to improve and broaden hedge accounting under ASC Topic 815 by allowing entities to group forecasted transaction with similar risk exposures, provides a model for hedging choose-your rate debt, expands hedge accounting for forecasted purchases and sales of non financial assets, eliminates net written option limitations for certain compound derivatives, and resolves recognition mismatches in dual hedging strategies involving foreign-currency- denominated debt. January 1, 2027 The Corporation does not currently engage in transactions within the scope of this guidance. Accordingly, adoption is not expected to have a material impact on the consolidated financial statements. Should the Corporation enter into such transactions in the future, the impact would be evaluated at that time.

FASB ASU 2025-08, Financial Instruments Credit Losses (Topic 326)- Purchased Loans The FASB issued ASU 2025-08 in November 2025, which aims to simplify and reduce the complexity of the accounting for purchased loans under ASC Topic 326. The update expands the population of loans subject to the gross-up approach to include purchased seasoned loans, regardless whether they had credit deterioration. January 1, 2027 The amendments in this standard apply to certain transactions entered into after the effective date. Adoption is not expected to have a material impact on the consolidated financial statements. However, the applicability and magnitude will depend on the nature and extent of transactions the Corporation may enter into in future periods.

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FASB ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) Derivatives Scope Refinements and Scope Clarification for Share Based Noncash Consideration from a Customer in a Revenue Contract The FASB issued ASU 2025-07 in September 2025, which refines the scope of derivative accounting under ASC Topic 815 and clarifies the treatment of share-based noncash consideration under ASC Topic 606. The update reduces complexity and diversity in application. Narrows the scope of derivative accounting under ASC Topic 815 for certain contracts whose underlyings are based on a party’s own operations or activities; and clarifies that ASC Topic 606 governs share- based noncash consideration received from a customer until the entity’s right becomes unconditional. January 1, 2027 The Corporation does not currently engage in transactions within the scope of this guidance. Accordingly, adoption is not expected to have a material impact on the consolidated financial statements. Should the Corporation enter into such transactions in the future, the impact would be evaluated at that time.

FASB ASU 2025-06, Intangibles - Goodwill and Other - Internal- Use Software (Subtopic 350 40) - Targeted Improvements to the Accounting for Internal Use Software The FASB issued ASU 2025-06 in September 2025, which seeks to modernize the accounting for internal-use software under ASC Subtopic 350-40, Intangibles— Goodwill and Other—Internal-Use Software. The update replaces the traditional stage based model (preliminary, development, post- implementation) with a principles based framework that better reflects current software development practices, including agile and cloud-based approaches. January 1, 2028 The Corporation is currently evaluating the impact that the adoption of this guidance will have on our accounting for internal use software considering our development practices which may include agile and cloud-based approaches.

FASB ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) - Clarifications to Share-Based Consideration Payable to a Customer The FASB issued ASU 2025-04 in May 2025, which clarifies the accounting for share- basedawardsgrantedas consideration payable to a customer. The ASU expands the definition of performance condition for share-based consideration under ASC Topic 718 and eliminates the forfeiture policy election for service conditions. It also confirms that the variable consideration constraint in ASC Topic 606 does not apply to such awards. January 1, 2027 The Corporation does not currently engage in transactions within the scope of this guidance. Accordingly, adoption is not expected to have a material impact on the consolidated financial statements. Should the Corporation enter into such transactions in the future, the impact would be evaluated at that time.

FASB ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) - Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity The FASB issued ASU 2025-03 in May 2025 which requires that an entity consider the factors in paragraphs 805-10-55-12 through 55-15 when it is involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a variable interest entity ("VIE") that meets the definition of a business to determine which entity is the accounting acquirer. This replaces the previous requirement that the primary beneficiary always is the acquirer. January 1, 2027 The amendments in this standard apply to certain transactions entered into after the effective date. Adoption is not expected to have a material impact on the consolidated financial statements. However, the applicability and magnitude will depend on the nature and extent of transactions the Corporation may enter into in future periods.

FASB ASU 2024-03, Income Statement— Reporting Comprehensive Income —Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses (As updated by ASU 2025-01) The FASB issued ASU 2024-03 in November 2024, which requires public entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods to improve financial transparency. For fiscal years beginning on January 1,2027 For interim periods within fiscal years beginning after January 1,2028 The Corporation is currently evaluating any impact that the adoption of this guidance will have on its financial statements and presentation and disclosures.

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Note 4 - Restrictions on cash and due from banks and certain securities

BPPR is required by regulatory agencies to maintain average reserve balances with the Federal Reserve Bank of New York (the “Fed") or

other banks. Required average reserve balances in BPPR amounted to $2.6 billion at June 30, 2026 (December 31, 2025 - $2.7 billion).

Cash and due from banks, as well as other highly liquid securities, are used to cover these required average reserve balances.

At June 30, 2026, the Corporation held $68.0 million in restricted assets in the form of funds deposited in money market accounts, debt

securities available for sale and equity securities (December 31, 2025 - $64.0 million). The restricted assets held in debt securities available

for sale and equity securities consist primarily of assets held for the Corporation’s non-qualified retirement plans and fund deposits

guaranteeing possible liens or encumbrances over the title of insured properties.

Note 5 - Debt securities available-for-sale

The following tables present the amortized cost, gross unrealized gains and losses, fair value, weighted average yield and contractual maturities of debt securities available-for-sale at June 30, 2026 and December 31, 2025.

[1]Includes $18.9 billion pledged to secure government and trust deposits, assets sold under agreements to repurchase, credit facilities and loan servicing

agreements that the secured parties are not permitted to sell or repledge the collateral, of which $17.6 billion serve as collateral for public funds. The

Corporation had unpledged Available for Sale securities with a fair value of $5.7 billion that could be used to increase its borrowing facilities.

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[1] Includes $14.3 billion pledged to secure government and trust deposits, assets sold under agreements to repurchase, credit facilities and loan servicing

agreements that the secured parties are not permitted to sell or repledge the collateral, of which $13.2 billion serve as collateral for public funds. The

Corporation had unpledged Available for Sale securities with a fair value of $6.3 billion that could be used to increase its borrowing facilities.

The weighted average yield on debt securities available-for-sale is based on amortized cost; therefore, it does not give effect to changes in

fair value.

Debt securities not due on a single contractual maturity date, such as mortgage-backed securities and collateralized mortgage obligations,

are classified based on the period of final contractual maturity. The expected maturities of collateralized mortgage obligations, mortgage-

backed securities and certain other securities may differ from their contractual maturities because they may be subject to prepayments or

may be called by the issuer.

At June 30, 2026, the Corporation did not intend to sell or believe it was more likely than not that it would be required to sell debt securities

classified as available-for-sale. There were no debt securities classified as available-for-sale sold during the six months ended June 30,

2026 and 2025.

The following tables present the Corporation’s fair value and gross unrealized losses of debt securities available-for-sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2026 and

December 31, 2025.

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Debt securities available-for-sale in a continuous unrealized loss position for less than twelve months of $17.3 billion as of June 30, 2026,

compared to $1.2 billion on December 31, 2025, are impacted by changes in market rates.

As of June 30, 2026, the portfolio of available-for-sale debt securities reflects gross unrealized losses of $1.0 billion (December 31, 2025 -

$0.9 billion), driven mainly by mortgage-backed securities, which have been impacted by the interest rate environment and the portfolio’s

longer duration. The portfolio of available-for-sale debt securities is comprised mainly of U.S Treasuries and obligations from the U.S.

Government, its agencies or government sponsored entities, including Federal National Mortgage Association (“FNMA”), Federal Home

Loan Mortgage Corporation (“FHLMC”) and Government National Mortgage Association (“GNMA”). These securities carry an explicit or

implicit guarantee from the U.S. Government, are highly rated by major rating agencies, and have a long history of no credit losses.

Accordingly, the Corporation applies a zero-credit loss assumption.

Note 6 - Debt securities held-to-maturity

The following tables present the amortized cost, allowance for credit losses, gross unrealized gains and losses, approximate fair value, weighted average yield and contractual maturities of debt securities held-to-maturity at June 30, 2026 and December 31, 2025.

[1]Book value includes $201.8 million of unrealized loss which remains in Accumulated other comprehensive (loss) income (AOCI) related to certain securities

previously transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.

[2] Included $6.1 billion pledged to secure public and trust deposits that the secured parties are not permitted to sell or repledge the collateral. The Corporation

had unpledged held-to-maturities securities with a fair value of $99.7 million that could be used to increase its borrowing facilities.

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[1]Book value includes $293.0 million of unrealized loss which remains in Accumulated other comprehensive (loss) income (AOCI) related to certain securities

transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.

[2] Includes $7.3 billion pledged to secure public and trust deposits that the secured parties are not permitted to sell or repledge the collateral. The Corporation

had unpledged held-to-maturities securities with a fair value of $98.8 million that could be used to increase its borrowing facilities.

Debt securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period of final

contractual maturity. The expected maturities of collateralized mortgage obligations and certain other securities may differ from their

contractual maturities because they may be subject to prepayments or may be called by the issuer.

Credit Quality Indicators

The following describes the credit quality indicators by major security type that the Corporation considers to develop the estimate of the

allowance for credit losses for investment securities held-to-maturity.

As discussed in Note 2 of the 2025 Form 10-K, U.S. Treasury securities carry an explicit guarantee from the U.S. Government, are highly

rated by major rating agencies and have a long history of no credit losses. Accordingly, the Corporation applies a zero-credit loss

assumption and no allowance for credit losses (“ACL") for these securities has been established.

At June 30, 2026 and December 31, 2025, the “Obligations of Puerto Rico, States and political subdivisions" classified as held-to-maturity,

included securities issued by municipalities of Puerto Rico that are generally not rated by a credit rating agency. The Corporation performs

periodic credit quality reviews of these securities and internally assigns standardized credit risk ratings based on its evaluation. For the

definitions of the obligor risk ratings, refer to the Credit Quality section of Note 8 to the Consolidated Financial Statements. This includes

$7.1 million of general and special obligation bonds issued by three municipalities of Puerto Rico, of which $6.3 million have a “Pass" rating,

that are payable primarily from certain property taxes imposed by the issuing municipality (compared to $8.7 million and $7.9 million,

respectively, at December 31, 2025).

At June 30, 2026, the portfolio of “Obligations of Puerto Rico, States and political subdivisions" also included $34.8 million in securities

issued by the Puerto Rico Housing Finance Authority (“HFA"), a government instrumentality, for which the underlying source of payment is

second mortgage loans in Puerto Rico residential properties (not the government), but for which HFA provides a guarantee in the event of

default and upon the satisfaction of certain other conditions (December 31, 2025 - $36.0 million). These securities are not rated by a credit

rating agency. Refer to Note 16 to the Consolidated Financial Statements for additional information on the Corporation’s exposure to the

Puerto Rico Government.

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A deterioration of the Puerto Rico economy or of the fiscal health of the Government of Puerto Rico and/or its instrumentalities (including if

any of the issuing municipalities become subject to a debt restructuring proceeding under the Puerto Rico Oversight Management and

Economic Stability Act (“PROMESA”)) could adversely affect the value of these securities, resulting in losses to the Corporation.

At June 30, 2026, the portfolio of “Obligations of Puerto Rico, States and political subdivisions” had no securities issued by the HFA for

which the underlying source of payment is U.S. Treasury securities (December 31, 2025 - $6.8 million), as all such securities were fully

redeemed during the quarter ended on March 31, 2026. Historically, the Corporation has applied a zero-credit loss assumption for these

securities, and no ACL has been established for these securities given that U.S. Treasury securities carry an explicit guarantee from the

U.S. Government, are highly rated by major rating agencies, and have a long history of no credit losses.

Delinquency status

At June 30, 2026 and December 31, 2025, there were no securities held-to-maturity in past due or non-performing status.

Allowance for credit losses on debt securities held-to-maturity

The allowance for credit losses related to the Obligations of Puerto Rico and the States and Political subdivisions securities at June 30,

2026 was $6.2 million (December 31, 2025 - $5.8 million).

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 2025 Form 10-K.

The following table presents the Corporation's loan purchases for the quarters and six months ended June 30, 2026 and 2025 by class of loans:

The following table presents the Corporation’s loan sales for the quarters and six months ended June 30, 2026 and 2025 by class of loans:

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 June 30, 2026

and December 31, 2025.

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[1]At June 30, 2026, mortgage loans held-in-portfolio include $6.8 billion of loans that carry certain guarantees from the FHA or the VA, for which the

Corporation’s policy is to exclude them from non-performing status, of which $191.5 million are 90 days or more past due. The portfolio of guaranteed loans

includes $39.8 million of residential mortgage loans in Puerto Rico that are no longer accruing interest as of June 30, 2026. The Corporation has $26.3

million in reverse mortgage loans in Puerto Rico which are guaranteed by FHA, but which are currently not accruing interest at June 30, 2026.

[2]Loans held-in-portfolio are net of $406.7 million in unearned income and exclude $88.6 million in loans held-for-sale.

[3]Includes $22.8 billion pledged to secure credit facilities and public funds that the secured parties are not permitted to sell or repledge the collateral, of which

$7.4 billion were pledged at the Federal Home Loan Bank ("FHLB") as collateral for borrowings and $15.3 billion at the Federal Reserve Bank ("FRB") for

discount window borrowings. As of June 30, 2026, the Corporation had an available borrowing facility with the FHLB and the discount window of FRB of $4.1

billion and $11.9 billion, respectively.

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[1]At December 31, 2025 mortgage loans held-in-portfolio include $3.2 billion of loans that carry certain guarantees from the FHA or the VA, for which the

Corporation’s policy is to exclude them from non-performing status, of which $197 million are 90 days or more past due. The portfolio of guaranteed loans

includes $47 million of residential mortgage loans in Puerto Rico that are no longer accruing interest as of December 31, 2025. The Corporation has $27.0

million in reverse mortgage loans in Puerto Rico which are guaranteed by FHA, but which are currently not accruing interest at December 31, 2025.

[2]Loans held-in-portfolio are net of $421.6 million in unearned income and exclude $10.0 million in loans held-for-sale.

[3]Includes $22.7 billion pledged to secure credit facilities and public funds that the secured parties are not permitted to sell or repledge the collateral, of which

$7.5 billion were pledged at the FHLB as collateral for borrowings and $15.2 billion at the FRB for discount window borrowings. As of December 31, 2025,

the Corporation had an available borrowing facility with the FHLB and the discount window of FRB of $4.0 billion and $12.1 billion, respectively.

The following tables present the amortized cost basis of non-accrual loans as of June 30, 2026 and December 31, 2025 by class of loans:

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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, 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.

Loans in non-accrual status with no allowance at June 30, 2026 include $106.7 million in collateral dependent loans (December 31, 2025 -

$142.0 million). The Corporation recognized $2.9 million in interest income on non-accrual loans during the six months ended June 30, 2026

(June 30, 2025 - $3.0 million).

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 June 30, 2026 and December 31, 2025:

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Note 8 - Allowance for credit losses – loans held-in-portfolio

The Corporation follows the current expected credit loss (“CECL”) model to establish and evaluate the adequacy of the ACL to provide for

expected losses in the loan portfolio. This model establishes a forward-looking methodology that reflects the expected credit losses over the

lives of financial assets starting when such assets are first acquired or originated. In addition, CECL provides that the initial ACL on PCD

financial assets be recorded as an increase to the purchase price, with subsequent changes to the allowance recorded as a credit loss

expense. The provision for credit losses recorded in current operations is based on this methodology. Loan losses are charged and

recoveries are credited to the ACL. The Corporation’s modeling framework includes internally developed quantitative models that generate

lifetime default and prepayment estimates as well as other loan level techniques to estimate loss severity. These models combine credit risk

factors which include the impact of loan modifications, with macroeconomics expectations to derive the lifetime expected loss.

At June 30, 2026, the Corporation estimated the ACL by weighting the outputs of optimistic, baseline, and pessimistic scenarios. The

weightings applied are subject to evaluation on a quarterly basis as part of the ACL’s governance process. During the first quarter of 2026,

among the three scenarios evaluated to estimate the ACL, the baseline scenario was assigned the highest probability, followed by the

pessimistic scenario, where weight was increased during 2025 in response to ongoing uncertainties. There were no changes to the

probability weights during the second quarter of 2026.

The following tables present the changes in the ACL of loans held-in-portfolio and unfunded commitments for the quarters and six months ended June 30, 2026 and 2025.

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[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

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[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

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[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

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[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

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[1]Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

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[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

[1] Allowance for credit losses of unfunded commitments is presented as part of Other Liabilities in the Consolidated Statements of Financial Condition.

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Modifications

A modification constitutes a change in loan terms in the form of principal forgiveness, an interest rate reduction, other-than-insignificant

payment delay, term extension or combination of the above made to a borrower experiencing financial difficulty.

The amount of outstanding commitments to lend additional funds to debtors with financial difficulties owing receivables whose terms have

been modified during the six months ended June 30, 2026 amounted to $85.6 million (during the year ended December 31, 2025 - $159.1

million), related to the commercial loan portfolios.

The following tables show the amortized cost basis of the loans modified to borrowers experiencing financial difficulties at the end of the reporting period disaggregated by class of financing receivable and type of concession granted for the quarters and six months ended

June 30, 2026 and 2025. Loans modified to borrowers experiencing financial difficulties that were fully paid down, charged-off or foreclosed

upon by period end are not reported.

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Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the quarter ended June 30, 2026

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Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the six months ended June 30, 2026

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Loan Modifications Made to Borrowers Experiencing Financial Difficulty for the quarter ended June 30, 2025