Company: BPOPM
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0001193125-25-043848
Chunk: 38

Company: POPULAR, INC.
Filing Date: 2025-03-03
Form: 10-K
Item: Item 1A
Chunk 38
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competitors
have
raised
the
interest
rates
they
pay
on
deposits,
our
funding
costs
have
increased,
as
we
have
had
to 
increase the
rates we
pay to
our depositors
to avoid
losing deposits and
to procure
new ones.
Rising interest
rates have
also led 
customers to move their funds to alternative investments that pay higher
interest rates.
Additionally, periods of market stress or lack 
of market
or customer
confidence in
financial institutions
may result
in a
loss of
customer deposits,
especially to
the extent
those 
deposits are in
excess of the
FDIC-insured limit of
$250,000. As of
December 31, 2024,
we had $13
billion of total
deposits (other 
than collateralized
public funds,
which represent
public deposit
balances from
governmental entities
in the
U.S. and
its territories, 
including Puerto Rico
and the
United States Virgin
Islands, that are
collateralized based on
such jurisdictions’
applicable collateral 
requirements) in excess of the FDIC-insured limit. If deposits decrease, we may need to rely on more expensive sources of funding, 
which
would
negatively
impact
our
interest
rate
margin
and
net
interest
income.
In
addition,
a
reduction
in
our
deposits
would 
decrease our earning assets, which would also
negatively affect our net interest income. 
We have a significant amount of deposits from the Puerto
Rico government, its instrumentalities and municipalities ($19.5 
billion,
or
approximately 30%
of
our
total
deposits, as
of
December 31,
2024),
and
the
amount
of
these
deposits may
fluctuate 
depending on the financial condition and liquidity of these entities, as well as on our ability to maintain these customer relationships. 
Under the terms
of BPPR’s deposit
pricing agreement with the
Puerto Rico government, most
public fund deposit rates
are market 
linked with
a lag
minus a specified
spread.
Therefore, as market
rates rise, we
are required to
sequentially increase the
rates we 
pay
our public