Company: BPOPM
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0001193125-25-043848
Chunk: 24

Company: POPULAR, INC.
Filing Date: 2025-03-03
Form: 10-K
Item: Item 1
Chunk 24
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 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 Reserve has indicated that it expects
to work with the other federal banking regulators
on a revised proposal in 2025. 
The
Capital
Rules
preclude certain
hybrid
securities, such
as
trust
preferred
securities, from
inclusion
in
bank
holding 
companies’ Tier 1 capital. Trust preferred securities no
longer 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, 2024, 
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