CONTENTS ÍNDICE Letter from the President & Chief Executive Officer.................................. 3 25-Year Historical Financial Summary...............................................................6 Management & Board of Directors....................................................................8 Carta del Presidente y Principal Oficial Ejecutivo...................................... 9 Resumen Financiero Histórico (25 años).......................................................12 Gerencia y Junta de Directores.........................................................................14 Popular, Inc. (NASDAQ: BPOP) is the leading Popular, Inc. (NASDAQ: BPOP) es la institución financial institution by both assets and deposits bancaria líder en depósitos y activos en Puerto in Puerto Rico and ranks among the top 50 U.S. Rico y se encuentra entre las primeras 50 entidades bank holding companies by assets. Founded in tenedoras de instituciones bancarias por número 1893, Banco Popular de Puerto Rico, Popular’s de activos. Fundado en 1893, Banco Popular de principal subsidiary, provides retail, mortgage Puerto Rico, la principal subsidiaria de Popular, and commercial banking services in Puerto Rico brinda servicios de banca individual, hipotecas y and the U.S. Virgin Islands. Popular also offers banca comercial en Puerto Rico e Islas Vírgenes in Puerto Rico auto and equipment leasing and estadounidenses. Popular también ofrece en Puerto financing, investment banking, broker-dealer and Rico servicios de financiamiento de autos y equipo, insurance services through specialized subsidiaries. inversiones y seguros a través de subsidiarias In the mainland United States, Popular provides especializadas. En Estados Unidos, Popular provee retail, mortgage and commercial banking services servicios de banca individual, hipotecas y banca through its New York-chartered banking subsidiary, comercial a través de su filial bancaria en Nueva Popular Bank, which has branches located in New York, Popular Bank, la cual cuenta con sucursales York, New Jersey and Florida. 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 El Formulario 10-K, el proxy y otra información any 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 2020 Annual Stockholders’ Meeting of Popular, La Reunión Anual de Accionistas 2020 Inc. will be held on Tuesday, May 12, at 9:00 a.m. at de Popular, Inc., se llevará a cabo el martes, the penthouse of the Popular Center Building, 12 de mayo, a las 9:00 a.m. en el piso PH San Juan, Puerto Rico. de Popular Center, San Juan, Puerto Rico. 2 | POPULAR, INC. POPULAR, INC. YEAR IN REVIEW DEAR SHAREHOLDERS: 2019 was an outstanding year for Popular. We achieved record core earnings, positive credit quality results, deposit and loan growth, in our Puerto Rico and United States operations, and maintained a robust capital position. Net income for 2019 was $671 million, compared to $618 million in the 2019 WAS AN OUTSTANDING previous year. Our 2018 results included the benefit of $159 million, YEAR FOR POPULAR. WE related to the early termination of the FDIC shared-loss agreements, and ACHIEVED RECORD CORE a $28 million expense related to the impact of the Puerto Rico tax reform EARNINGS, POSITIVE CREDIT on our deferred tax asset. After excluding the effects of these items, QUALITY RESULTS, DEPOSIT adjusted net income in 2018 was $487 million. AND LOAN GROWTH, IN OUR The adjusted increase of $184 million in net income this year was driven PUERTO RICO AND UNITED primarily by higher net interest income and a lower provision for loan STATES OPERATIONS, AND losses. During 2019 we benefitted from the full-year impact of the Reliable MAINTAINED A ROBUST acquisition, loan growth in both markets and continued increases in CAPITAL POSITION. deposit balances in Puerto Rico that, in turn, allowed us to increase the contribution from our investment portfolio. Additionally, during 2019 we recognized a $26 million income tax benefit related to exempt interest income from loans earned in prior years. We continued to experience stable credit quality metrics. Non-performing assets declined by 13%, when compared to the previous year, and the net charge-off ratio was 0.96%, compared to 1.13% in 2018. These results reflect positive performance both in Puerto Rico and the United States. While net-charge offs increased in the United States as we continued to work through the taxi medallion portfolio, this exposure was reduced to $19 million. Capital levels remained strong with year-end Tier 1 Capital and Tier 1 Common ratios of 17.8%. In 2019 we increased the quarterly common stock dividend, from $0.25 to $0.30 per share, and repurchased $250 million in common stock. We also announced several capital actions we will execute in 2020, including an increase in the quarterly common stock dividend from $0.30 to $0.40 per share and a common stock repurchase program of up to $500 million. Popular’s shares closed 2019 at $58.75, 24% higher than in 2018. This performance compares favorably against our U.S. peers and the KBW Nasdaq Regional Banking Index, both of which increased 20% in the year. 2019 ANNUAL REPORT | 3 WE CONTINUED TO EXECUTE OUR BUSINESS STRATEGY, STRUCTURED AROUND FOUR PILLARS. SUSTAINABLE AND PROFITABLE GROWTH: In Puerto Rico, we added 45,000 customers to reach 1.8 million, 915,000 of which actively used our digital channels. We grew loans and deposits by 1.5% and 10%, respectively. Our auto loan portfolio increased by 12%, evidencing the successful integration of the Reliable acquisition. At year-end, we acquired a $74 million credit card portfolio in Puerto Rico and, in a separate transaction, acquired the rights to issue credit cards under the JetBlue co-branded loyalty program in Puerto Rico. In the United States, we grew loans and deposits each by 9%. We continued expanding our niche businesses, mainly condo association banking and health care lending. SIMPLICITY: We continued to leverage technology and process optimization to streamline our operations to achieve efficiencies, improve both the customer and employee experience and position the Corporation for future growth. Progress in 2019 included an acceleration in the deployment of robotic process automation technology and the expansion of our process efficiency program, which is based on the LEAN methodology. CUSTOMER FOCUS: We dedicated significant resources to reinforce our service culture, offering new tools and development opportunities to all our employees. We also continued the transformation of our branch network in Puerto Rico and the United States, increasingly integrating technology to enhance our customers’ experience regardless of how they choose to interact with us. For example, in Puerto Rico we launched a new branch model focused on providing banking services via digital channels and self-service technology. We sought additional opportunities to serve the underserved. We opened a branch in Virgin Gorda in the British Virgin Islands, and we are proud to serve this community as the only bank branch on the island. FIT FOR THE FUTURE: We continued to invest in our talent and risk management infrastructures. Regarding our people, we implemented initiatives related to development, compensation, leadership and recognition. While ensuring we have the necessary talent today, we are anticipating and preparing for future needs. In the area of internal controls, we focused on our compliance program, particularly on strengthening the first line of defense, and on bolstering our cybersecurity program. Popular’s steadfast commitment to our customers, our people and our communities is an intrinsic part of how we conduct our business. That commitment inspired the founding of Popular 126 years ago, has manifested itself throughout our history and today is stronger than ever. We are proud of our tradition as a responsible corporate citizen, yet aware that local and global challenges facing our communities require more deliberate action from everyone, including the private sector. To this end, in 2019 we embarked on a process to formalize our priorities regarding environmental, social and governance (or ESG) practices. As part of this process, we will establish specific targets, track our progress and communicate our results regularly. We are convinced that continuous improvement in these areas provides the foundation for the long-term success of our company and our ability to deliver value to all our stakeholders. 4 | POPULAR, INC. I would like to acknowledge the hard work of over 8,000 colleagues in Puerto Rico, the United States and the Virgin Islands, which made possible our accomplishments in 2019. In recognition of our strong financial results and achievements during the year, our Board of Directors approved the maximum possible award under our Profit Sharing Plan for the second consecutive year. Early in 2020, our team demonstrated once again its resiliency and solidarity after a series of seismic events, including a magnitude 6.4 earthquake, impacted the southwestern region of Puerto Rico. Our employees in affected areas responded admirably, going above and beyond the call of duty to assist our clients and communities,