CONTENTS ÍNDICE LETTER FROM THE PRESIDENT & CARTA DEL PRESIDENTE Y 3 9 CHIEF EXECUTIVE OFFICER PRINCIPAL OFICIAL EJECUTIVO 25-YEAR HISTORICAL FINANCIAL RESUMEN FINANCIERO HISTÓRICO 6 12 SUMMARY (25 AÑOS) MANAGEMENT & GERENCIA Y 8 14 BOARD OF DIRECTORS JUNTA DE DIRECTORES Popular, Inc. (NASDAQ: BPOP) is the leading financial Popular, Inc. (NASDAQ: BPOP) es la institución institution by both assets and deposits in Puerto bancaria líder en depósitos y activos en Puerto Rico and ranks among the top 50 U.S. bank holding Rico y se encuentra entre las primeras 50 entidades companies by assets. Founded in 1893, Banco Popular tenedoras de instituciones bancarias por número de Puerto Rico, Popular’s principal subsidiary, provides de activos. Fundado en 1893, Banco Popular de retail, mortgage and commercial banking services in Puerto Rico, la principal subsidiaria de Popular, Puerto Rico and the U.S. Virgin Islands. Popular also brinda servicios de banca individual, hipotecas y offers in Puerto Rico auto and equipment leasing and banca comercial en Puerto Rico e Islas Vírgenes financing, investment banking, broker-dealer and estadounidenses. Popular también ofrece en Puerto insurance services through specialized subsidiaries. Rico servicios de financiamiento de autos y equipo, In the mainland United States, Popular provides retail, inversiones y seguros a través de subsidiarias mortgage and commercial banking services through especializadas. En Estados Unidos, Popular provee its New York-chartered banking subsidiary, Popular servicios de banca individual, hipotecas y banca Bank, which has branches located in New York, New comercial a través de su filial bancaria en Nueva Jersey and Florida. York, Popular Bank, la cual cuenta con sucursales localizadas en Nueva York, Nueva Jersey y Florida. CORPORATE INFORMATION INFORMACIÓN CORPORATIVA Independent Registered Public Accounting Firm: Firma registrada de Contabilidad Pública PricewaterhouseCoopers LLP Independiente: PricewaterhouseCoopers LLP The company’s Form 10-K, proxy statement and any El Formulario 10-K, el proxy y otra información other financial information is available on financiera están disponibles en popular.com/en/investor-relations/annual-reports/ popular.com/accionistas/informe-anual/ ANNUAL MEETING REUNIÓN ANUAL The 2021 Annual Stockholders’ Meeting of La Reunión Anual de Accionistas de Popular, Inc. Popular, Inc. will be held on Thursday, May 6, se celebrará el jueves 6 de mayo de 2021 a las 2021, at 9:00 a.m. AST by means of remote 9:00 a.m. AST exclusivamente vía comunicación communication, in a virtual format only through remota, mediante formato virtual a través de www.virtualshareholdermeeting.com/BPOP2021. www.virtualshareholdermeeting.com/BPOP2021. 2 | POPULAR, INC. POPULAR, INC. YEAR IN REVIEW DEAR SHAREHOLDERS: The year 2020 was certainly a challenging one, starting with the earthquakes in the southwestern part of Puerto Rico, which were shortly followed by an unexpected global pandemic. Yet, despite all the professional and personal difficulties, we continued serving our customers, delivering value to our shareholders, supporting our colleagues, and providing much- needed services and assistance to our communities. We generated net income for the year of $507 million, 24% lower than the previous year. The decrease was largely driven by a higher provision expense, lower fees and lower net interest income related to the economic disruption caused by the pandemic. However, as business restrictions were loosened, the economy began to improve. Credit quality results remained positive throughout the year, notwithstanding the economic impact of the pandemic. We granted payment deferral assistance to approximately 132,000 customer accounts, representing $8.3 billion of loans or 28% of the total loan balance. At year-end, 97% of customers had exited payment relief programs and approximately 94% of these accounts remained current. While pleased with our results, given the uncertainty related to the pandemic, we continue to closely monitor developments in the health and economic fronts and their impact on our business. Capital levels remained strong with a year-end Common Equity Tier 1 ratio of 16.3%. Our robust capital position allowed us to increase the quarterly common stock dividend from $0.30 to $0.40 per share in the first quarter of 2020 and return $500 million to our shareholders through stock repurchases. Even with these actions, our tangible book value increased by nearly $8 or 14% per share to $63.07. The year 2020 was certainly a challenging one, starting Our stock closed 2020 at $56.32, 4% lower than in 2019. This performance with the earthquakes in compares favorably against the KBW Nasdaq Regional Banking Index, the southwestern part of which decreased by 12%, but underperformed versus our U.S. peers, who experienced an increase of 8% in their stock price. Puerto Rico, which were shortly followed by an Faced with the pandemic, we acted decisively to ensure the safety of unexpected global pandemic. our employees and customers while continuing to offer essential banking services. We adapted our operations in a rapidly evolving situation, leveraged the strength of our digital channels and provided support and relief to our customers in multiple ways. One of the most important efforts revolved around the Small Business Administration’s Paycheck Protection Program (PPP). Aware of the importance of the program for small and mid-sized businesses, we mobilized all resources at our disposal to process as many applications as possible. 2020 ANNUAL REPORT | 3 Despite the efforts devoted to managing We drew on talent from across the organization, pandemic-related matters, we continued developed new digital tools and streamlined our strengthening our business and executing processes to provide the much-needed help to our our strategy, which is structured around customers. In the first round, we funded $1.4 billion in four pillars. loans, representing 28,000 small and medium sized businesses and 278,000 employees. SUSTAINABLE AND PROFITABLE GROWTH In Puerto Rico, we grew loans by 7%, driven by an Last year, I shared that we had embarked on a process increase in commercial, auto and mortgage loans. to formalize our priorities regarding environmental, Deposits increased by 35%, registering growth in social, and governance (ESG) practices. As part of retail, commercial and public deposits. We expanded this process, we committed to establish specific our customer base on the island, adding 106,000 targets, track our progress, and communicate our new customers during the year. In the United States, results regularly. During 2020, we published our our loan portfolio grew by 8% and deposits by 2%. first Corporate Sustainability Report, an important We continued to expand niche businesses, mainly milestone in our journey towards greater transparency community association banking and health care and accountability. Another key achievement was the lending, and also achieved strong growth in our approval of a series of revisions to our commercial credit residential mortgage program. policy which formally incorporate ESG considerations into the credit analysis and evaluation processes. We SIMPLICITY believe these changes will result in more sustainable We continued to streamline our operations to credit decisions for the long-term well-being of our achieve efficiencies. We realigned our New York markets. Metro branch network, closing 11 branches, which will allow us to reduce operating expenses and While we are satisfied with our progress on this front, leverage resources to focus on small and medium we acknowledge there are opportunities to continue size businesses. After a pre-tax charge of $23 million expanding our efforts. To this end, we have created in 2020, we expect annual savings of approximately the Corporate Communications and Public Affairs $12 million moving forward. Group to integrate several existing functions at the company to achieve a unified and more impactful CUSTOMER FOCUS approach for strategic communications, government We continued reinforcing the areas of affairs, and ESG strategy. To lead this group, María communication, recognition, and collaboration Cristina González Noguera is joining Popular as our among our employees to ensure the sustainability Chief Communications and Public Affairs Officer. íMar a our service framework. We also leveraged the strength of our digital channels and saw an Cristina has extensive experience in both the public accelerated adoption that we believe will remain and private sectors. Most recently, she was the SVP of after the pandemic passes. In Puerto Rico, we Global Public Affairs at The Estée Lauder Companies reached 1.1 million active customers in our digital and was previously the Director of Communication banking platform, an increase of 154,000 customers to First Lady Michelle Obama and Special Assistant from 2019. In addition, we captured 67% of deposit to President Barack Obama. We are confident she transactions through digital channels, up from 52% will bring critical insights that will help us solidify our in the previous year. position as a leader in corporate sustainability. FIT FOR THE FUTURE I am extremely proud of our accomplishments Given the COVID-19 pandemic, we focused on during 2020. I am especially proud of our colleagues’ the well-being of our employees on all fronts. remarkable commitment to serve our customers and We implemented protective health measures, their ability to adapt to a rapidly changing environment,