Debt securities held-to-maturity

The following tables present the amortized cost, gross unrealized gains and losses, fair value, weighted average yield and contractual

maturities of debt securities available-for-sale at June 30, 2026 and December 31, 2025.


	At June 30, 2026
(In thousands)	Amortized cost	Gross unrealized gains	Gross unrealized losses	Fair value	Weighted average yield
U.S. Treasury securities
Within 1 year	$13,413,909	$338	$5,472	$13,408,775	3.56%
After 1 to 5 years	6,928,574	1,001	67,742	6,861,833	3.71
Total U.S. Treasury securities	20,342,483	1,339	73,214	20,270,608	3.61
Collateralized mortgage obligations - federal agencies
Within 1 year	44	-	-	44	5.42
After 1 to 5 years	2,930	-	50	2,880	1.48
After 5 to 10 years	9,680	1	481	9,200	2.48
After 10 years	83,627	45	6,263	77,409	2.95
Total collateralized mortgage obligations - federal agencies	96,281	46	6,794	89,533	2.86
Mortgage-backed securities - federal agencies
Within 1 year	477	-	3	474	2.22
After 1 to 5 years	101,278	13	3,698	97,593	2.14
After 5 to 10 years	1,028,726	107	85,945	942,888	1.75
After 10 years	4,183,655	556	792,994	3,391,217	1.77
Total mortgage-backed securities - federal agencies	5,314,136	676	882,640	4,432,172	1.78
Other
After 1 to 5 years	521	-	-	521	5.00
Total other	521	-	-	521	5.00
Total debt securities available-for-sale[1]	$25,753,421	$2,061	$962,648	$24,792,834	3.23%

[1]Includes $18.9 billion pledged to secure government and trust deposits, assets sold under agreements to repurchase, credit facilities and loan servicing

agreements that the secured parties are not permitted to sell or repledge the collateral, of which $17.6 billion serve as collateral for public funds. The

Corporation had unpledged Available for Sale securities with a fair value of $5.7 billion that could be used to increase its borrowing facilities.


	At December 31, 2025
(In thousands)	Amortized cost	Gross unrealized gains	Gross unrealized losses	Fair value	Weighted average yield
U.S. Treasury securities
Within 1 year	$10,154,698	$4,716	$1,528	$10,157,886	3.44%
After 1 to 5 years	5,555,079	29,795	19,306	5,565,568	3.70
Total U.S. Treasury securities	15,709,777	34,511	20,834	15,723,454	3.53
Collateralized mortgage obligations - federal agencies
Within 1 year	152	-	1	151	1.97
After 1 to 5 years	4,879	-	88	4,791	1.49
After 5 to 10 years	11,524	-	482	11,042	2.45
After 10 years	90,018	180	5,941	84,257	2.92
Total collateralized mortgage obligations - federal agencies	106,573	180	6,512	100,241	2.80
Mortgage-backed securities - federal agencies
Within 1 year	963	1	9	955	2.08
After 1 to 5 years	65,843	11	1,530	64,324	2.35
After 5 to 10 years	1,030,661	256	67,116	963,801	1.85
After 10 years	4,527,032	881	806,466	3,721,447	1.75
Total mortgage-backed securities - federal agencies	5,624,499	1,149	875,121	4,750,527	1.78
Other
Within 1 year	750	-	-	750	4.43
Total other	750	-	-	750	4.43
Total debt securities available-for-sale[1]	$21,441,599	$35,840	$902,467	$20,574,972	3.07%

[1] Includes $14.3 billion pledged to secure government and trust deposits, assets sold under agreements to repurchase, credit facilities and loan servicing

agreements that the secured parties are not permitted to sell or repledge the collateral, of which $13.2 billion serve as collateral for public funds. The

Corporation had unpledged Available for Sale securities with a fair value of $6.3 billion that could be used to increase its borrowing facilities.

The weighted average yield on debt securities available-for-sale is based on amortized cost; therefore, it does not give effect to changes in

fair value.

Debt securities not due on a single contractual maturity date, such as mortgage-backed securities and collateralized mortgage obligations,

are classified based on the period of final contractual maturity. The expected maturities of collateralized mortgage obligations, mortgage-

backed securities and certain other securities may differ from their contractual maturities because they may be subject to prepayments or

may be called by the issuer.

At June 30, 2026, the Corporation did not intend to sell or believe it was more likely than not that it would be required to sell debt securities

classified as available-for-sale. There were no debt securities classified as available-for-sale sold during the six months ended June 30,

2026 and 2025.

The following tables present the Corporation’s fair value and gross unrealized losses of debt securities available-for-sale, aggregated by

investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2026 and

December 31, 2025.


	At June 30, 2026
	Less than 12 months		12 months or more		Total
(In thousands)	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses
U.S. Treasury securities	$17,032,384	$51,923	$440,538	$21,291	$17,472,922	$73,214
Collateralized mortgage obligations - federal agencies	9,946	85	70,494	6,709	80,440	6,794
Mortgage-backed securities -federal agencies	208,344	10,374	4,185,326	872,266	4,393,670	882,640
Total debt securities available-for-sale in an unrealized loss position	$17,250,674	$62,382	$4,696,358	$900,266	$21,947,032	$962,648


	At December 31, 2025
	Less than 12 months		12 months or more		Total
(In thousands)	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses
U.S. Treasury securities	$992,083	$82	$943,699	$20,752	$1,935,782	$20,834
Collateralized mortgage obligations - federal agencies	1,481	3	83,266	6,509	84,747	6,512
Mortgage-backed securities - federal agencies	222,333	9,975	4,469,097	865,146	4,691,430	875,121
Total debt securities available-for-sale in an unrealized loss position	$1,215,897	$10,060	$5,496,062	$892,407	$6,711,959	$902,467

Debt securities available-for-sale in a continuous unrealized loss position for less than twelve months of $17.3 billion as of June 30, 2026,

compared to $1.2 billion on December 31, 2025, are impacted by changes in market rates.

As of June 30, 2026, the portfolio of available-for-sale debt securities reflects gross unrealized losses of $1.0 billion (December 31, 2025 -

$0.9 billion), driven mainly by mortgage-backed securities, which have been impacted by the interest rate environment and the portfolio’s

longer duration. The portfolio of available-for-sale debt securities is comprised mainly of U.S Treasuries and obligations from the U.S.

Government, its agencies or government sponsored entities, including Federal National Mortgage Association (“FNMA”), Federal Home

Loan Mortgage Corporation (“FHLMC”) and Government National Mortgage Association (“GNMA”). These securities carry an explicit or

implicit guarantee from the U.S. Government, are highly rated by major rating agencies, and have a long history of no credit losses.

Accordingly, the Corporation applies a zero-credit loss assumption.

The following tables present the amortized cost, allowance for credit losses, gross unrealized gains and losses, approximate fair value,

weighted average yield and contractual maturities of debt securities held-to-maturity at June 30, 2026 and December 31, 2025.


	At June 30, 2026
(In thousands)	Amortized cost	Book Value [1]	Allowance for Credit Losses	Carrying Value Net of Allowance	Gross unrealized gains	Gross unrealized losses	Fair value	Weighted average yield
U.S. Treasury securities
Within 1 year	$2,550,122	$2,514,507	$-	$2,514,507	$-	$2,273	$2,512,234	1.06%
After 1 to 5 years	3,806,389	3,640,221	-	3,640,221	-	19,074	3,621,147	1.33
Total U.S. Treasury securities	6,356,511	6,154,728	-	6,154,728	-	21,347	6,133,381	1.22
Obligations of Puerto Rico, States and political subdivisions
Within 1 year	2,720	2,720	8	2,712	8	-	2,720	6.45
After 1 to 5 years	3,910	3,910	24	3,886	11	-	3,897	1.84
After 5 to 10 years	450	450	14	436	6	-	442	5.81
After 10 years	34,769	34,769	6,184	28,585	2,465	1,770	29,280	1.43
Total obligations of Puerto Rico, States and political subdivisions	41,849	41,849	6,230	35,619	2,490	1,770	36,339	1.84
Collateralized mortgage obligations - federal agencies
After 10 years	1,483	1,483	-	1,483	-	187	1,296	2.87
Total collateralized mortgage obligations - federal agencies	1,483	1,483	-	1,483	-	187	1,296	2.87
Securities in wholly owned statutory business trusts
After 5 to 10 years	5,960	5,960	-	5,960	-	-	5,960	6.33
Total securities in wholly owned statutory business trusts	5,960	5,960	-	5,960	-	-	5,960	6.33
Total debt securities held-to-maturity [2]	$6,405,803	$6,204,020	$6,230	$6,197,790	$2,490	$23,304	$6,176,976	1.23%

[1]Book value includes $201.8 million of unrealized loss which remains in Accumulated other comprehensive (loss) income (AOCI) related to certain securities

previously transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.

[2] Included $6.1 billion pledged to secure public and trust deposits that the secured parties are not permitted to sell or repledge the collateral. The Corporation

had unpledged held-to-maturities securities with a fair value of $99.7 million that could be used to increase its borrowing facilities.


	At December 31, 2025
(In thousands)	Amortized cost	Book Value [1]	Allowance for Credit Losses	Carrying Value Net of Allowance	Gross unrealized gains	Gross unrealized losses	Fair value	Weighted average yield
U.S. Treasury securities
Within 1 year	$2,558,293	$2,519,071	$-	$2,519,071	$5,224	$110	$2,524,185	1.31%
After 1 to 5 years	5,003,219	4,749,896	-	4,749,896	35,910	-	4,785,806	1.27
Total U.S. Treasury securities	7,561,512	7,268,967	-	7,268,967	41,134	110	7,309,991	1.28
Obligations of Puerto Rico, States and political subdivisions
Within 1 year	2,605	2,605	5	2,600	4	-	2,604	6.43
After 1 to 5 years	12,508	12,508	39	12,469	24	87	12,406	3.49
After 5 to 10 years	450	450	15	435	15	-	450	5.81
After 10 years	35,544	35,544	5,753	29,791	2,908	1,829	30,870	1.43
Total obligations of Puerto Rico, States and political subdivisions	51,107	51,107	5,812	45,295	2,951	1,916	46,330	2.22
Collateralized mortgage obligations - federal agencies
After 10 years	1,495	1,495	-	1,495	-	189	1,306	2.87
Total collateralized mortgage obligations - federal agencies	1,495	1,495	-	1,495	-	189	1,306	2.87
Securities in wholly owned statutory business trusts
After 5 to 10 years	5,960	5,960	-	5,960	-	-	5,960	6.33
Total securities in wholly owned statutory business trusts	5,960	5,960	-	5,960	-	-	5,960	6.33
Total debt securities held-to-maturity [2]	$7,620,074	$7,327,529	$5,812	$7,321,717	$44,085	$2,215	$7,363,587	1.29%

[1]Book value includes $293.0 million of unrealized loss which remains in Accumulated other comprehensive (loss) income (AOCI) related to certain securities

transferred from available-for-sale securities portfolio to the held-to-maturity securities portfolio.

[2] Includes $7.3 billion pledged to secure public and trust deposits that the secured parties are not permitted to sell or repledge the collateral. The Corporation

had unpledged held-to-maturities securities with a fair value of $98.8 million that could be used to increase its borrowing facilities.

Debt securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period of final

contractual maturity. The expected maturities of collateralized mortgage obligations and certain other securities may differ from their

contractual maturities because they may be subject to prepayments or may be called by the issuer.

Credit Quality Indicators

The following describes the credit quality indicators by major security type that the Corporation considers to develop the estimate of the

allowance for credit losses for investment securities held-to-maturity.

As discussed in Note 2 of the 2025 Form 10-K, U.S. Treasury securities carry an explicit guarantee from the U.S. Government, are highly

rated by major rating agencies and have a long history of no credit losses. Accordingly, the Corporation applies a zero-credit loss

assumption and no allowance for credit losses (“ACL") for these securities has been established.

At June 30, 2026 and December 31, 2025, the “Obligations of Puerto Rico, States and political subdivisions" classified as held-to-maturity,

included securities issued by municipalities of Puerto Rico that are generally not rated by a credit rating agency. The Corporation performs

periodic credit quality reviews of these securities and internally assigns standardized credit risk ratings based on its evaluation. For the

definitions of the obligor risk ratings, refer to the Credit Quality section of Note 8 to the Consolidated Financial Statements. This includes

$7.1 million of general and special obligation bonds issued by three municipalities of Puerto Rico, of which $6.3 million have a “Pass" rating,

that are payable primarily from certain property taxes imposed by the issuing municipality (compared to $8.7 million and $7.9 million,

respectively, at December 31, 2025).

At June 30, 2026, the portfolio of “Obligations of Puerto Rico, States and political subdivisions" also included $34.8 million in securities

issued by the Puerto Rico Housing Finance Authority (“HFA"), a government instrumentality, for which the underlying source of payment is

second mortgage loans in Puerto Rico residential properties (not the government), but for which HFA provides a guarantee in the event of

default and upon the satisfaction of certain other conditions (December 31, 2025 - $36.0 million). These securities are not rated by a credit

rating agency. Refer to Note 16 to the Consolidated Financial Statements for additional information on the Corporation’s exposure to the

Puerto Rico Government.

A deterioration of the Puerto Rico economy or of the fiscal health of the Government of Puerto Rico and/or its instrumentalities (including if

any of the issuing municipalities become subject to a debt restructuring proceeding under the Puerto Rico Oversight Management and

Economic Stability Act (“PROMESA”)) could adversely affect the value of these securities, resulting in losses to the Corporation.

At June 30, 2026, the portfolio of “Obligations of Puerto Rico, States and political subdivisions” had no securities issued by the HFA for

which the underlying source of payment is U.S. Treasury securities (December 31, 2025 - $6.8 million), as all such securities were fully

redeemed during the quarter ended on March 31, 2026. Historically, the Corporation has applied a zero-credit loss assumption for these

securities, and no ACL has been established for these securities given that U.S. Treasury securities carry an explicit guarantee from the

U.S. Government, are highly rated by major rating agencies, and have a long history of no credit losses.

At June 30, 2026 and December 31, 2025, there were no securities held-to-maturity in past due or non-performing status.

Allowance for credit losses on debt securities held-to-maturity

The allowance for credit losses related to the Obligations of Puerto Rico and the States and Political subdivisions securities at June 30,

2026 was $6.2 million (December 31, 2025 - $5.8 million).