Popular (BPOP) Earnings Date & Reports

Key Takeaways

• Popular reported diluted earnings per share (EPS) of $4.21 for the third quarter, up 34% year over year and above the roughly $3.95 consensus estimate.
• Net interest income rose 8.1% to $698.9 million, but total revenue of $874.6 million came in just below the $887.6 million analysts expected.
• The company raised its quarterly dividend by 20% to $0.90 per share and repurchased $179 million of common stock.
• Net charge-offs fell to $73 million, or 0.73% annualized, down from $104 million in the prior quarter.
• Management lowered its full-year 2026 loan growth outlook to about 2% while raising net charge-off guidance to 80–90 basis points.

Earnings Context and Why It Matters

Popular, Inc. is a leading financial holding company operating primarily in Puerto Rico and the mainland United States. Its quarterly earnings offer a direct read on the health of the Puerto Rican economy, which has been supported by employment, tourism, and federal disaster-recovery spending. For investors, the third-quarter report carries extra weight because it reveals whether the bank can sustain strong profitability while navigating higher funding costs and emerging commercial credit developments. After several years of elevated returns, the focus has shifted to deposit trends, net interest margin stability, and whether management can keep returning meaningful capital to shareholders without weakening its balance sheet.

Reported Results

For the third quarter of 2026, Popular reported net income of $266 million, or $4.21 per diluted share, compared with $211 million, or $3.14 per diluted share, a year earlier. The result exceeded the consensus EPS estimate of about $3.95. Total revenue rose 7.4% year over year to $874.6 million, narrowly missing the $887.6 million analyst estimate.

Net interest income increased 8.1% to $698.9 million, helped by higher income from investment securities and commercial loans, while the net interest margin (NIM) was 3.63% on a GAAP basis. Non-interest income came in at $176 million, down from the prior quarter but still above management's guidance range. Operating expenses rose 4% sequentially to $506 million, driven largely by higher personnel costs. The company's return on tangible common equity (ROTCE) was 15.8%, compared with 17.0% in the second quarter.

On credit, non-performing loans increased to $466 million, lifting the NPL ratio to 1.16% from 1.04%, while net charge-offs declined to 0.73% annualized. Management raised its full-year net charge-off guidance to 80–90 basis points and trimmed its 2026 loan growth outlook to approximately 2%.

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Market Reaction and Investor Sentiment

Popular's third-quarter report drew a muted response from the market. The stock traded near $162 shortly after the announcement, reflecting a profit beat that was offset by a revenue miss, a slightly narrower net interest margin, and softer-than-expected tangible book value per share of $86.30. Investors appeared to weigh the strong bottom line and continued capital returns against the mixed revenue picture and a more cautious loan-growth outlook. The 20% dividend increase and ongoing buyback activity signaled confidence in the bank's capital position, but the upward revision to net charge-off guidance tempered enthusiasm.

Forward Outlook and Key Factors to Monitor

Looking ahead, investors should focus on how Popular manages its credit and growth trade-offs. Management now expects full-year 2026 loan growth of roughly 2%, down from a prior 3%–4% range, reflecting softer auto and lease activity and more moderate commercial lending. At the same time, full-year net charge-offs are now guided to 80–90 basis points, though management offered an early 2027 expectation of 60–75 basis points, suggesting it views recent commercial credit deterioration as borrower-specific rather than systemic.

Funding and margin trends also remain in focus. The bank expects net interest income to grow approximately 8.5% for the year and projects fourth-quarter non-interest income of about $170 million. Deposit costs and the level of Puerto Rico public-sector balances will be important variables, as will the pace of investment in securities at higher yields.

Finally, capital returns will be closely watched. With a Common Equity Tier 1 (CET1) capital ratio of 16.06% and management signaling quarterly repurchases in the $150 million–$200 million range into 2027, investors will monitor whether the bank can sustain both growth investment and shareholder payouts without eroding its strong capital base.

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