Company: BPOPM
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0001193125-25-043848
Chunk: 23

Company: POPULAR, INC.
Filing Date: 2025-03-03
Form: 10-K
Item: Item 1
Chunk 23
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 as reported
on consolidated financial statements (known
as the 
“leverage ratio”). 
The Capital Rules also impose
a “capital conservation buffer,”
composed entirely of CET1, on top
of these minimum risk-
weighted
asset
ratios. The
capital
conservation
buffer
is
designed
to
absorb
losses
during
periods
of
economic stress.
Banking 
institutions
with
a
ratio
of
CET1
to
risk-weighted
assets
above
the
minimum
but
below
the
capital
conservation
buffer
will
face 
constraints on
dividends, equity repurchases
and compensation based
on the
amount of
the shortfall and
eligible retained
income 
(that is, four
quarter trailing net income, net
of distributions and tax effects
not reflected in net
income). Popular, BPPR
and PB are 
therefore required to maintain such additional capital
conservation buffer of 2.5% of CET1,
effectively resulting in minimum ratios of 
(i) CET1
to risk-weighted
assets of
at least
7%, (ii)
Tier
1 capital
to risk-weighted
assets of
at least
8.5%, and
(iii) Total
capital to 
risk-weighted assets of at least 10.5%. 
Pursuant
to
the
Capital
Rules,
the
effects
of
certain
accumulated other
comprehensive income
or
loss
(“AOCI”)
items 
included in stockholders’ equity
(for example, marks-to-market of securities
held in the available
for sale portfolio) are
not excluded 
from
regulatory
capital
ratios;
however,
banking
organizations
that
are
not
subject
to
Categories
I
or
II
standards
under
the 
framework for
banking organizations
with $100
billion or
more in
assets, including
Popular,
BPPR and
PB, may
make a
one-time 
permanent election to continue to
exclude these items. Popular,
BPPR and PB have
made this election in order
to avoid significant 
variations in
the level
of capital
depending upon
the impact
of interest
rate fluctuations
on the
fair value
of their
available for
sale 
securities