Popular, Inc.

Reported net income was $266 million and earnings per share was $4.21, down $0.14 per share from the second quarter but up 34% versus the third quarter of 2025. ROTCE was 15.8%, compared with 17% in the second quarter and 13.1% in the prior-year quarter. Net interest income increased by $6 million to $699 million; GAAP net interest margin declined 3 basis points to 3.63%, and taxable-equivalent NIM was 4.16%. Noninterest income decreased by $5 million to $176 million, operating expenses increased by $21 million to $506 million, and net charge-offs were $73 million, or 73 basis points annualized, versus $104 million, or 1.05%, in the prior quarter. Ending loans increased by $293 million and ending deposits were $68.7 billion, down $1.5 billion sequentially. Total NPLs rose $52 million to $466 million, and the NPL ratio increased to 1.16% from 1.04%. For 2026, management now expects loan growth of approximately 2%, NII to increase by approximately 8.5%, fourth-quarter noninterest income of $170 million, full-year operating expenses to increase by approximately 2%, and an effective tax rate of 14%. For credit, full-year net charge-offs are now expected in the 80-90 basis point range, with an initial 2027 expectation of roughly 60-75 basis points. Management expects Puerto Rico public deposits to remain between $20 billion and $22 billion for the rest of the year and expects to repurchase between $150 million and $200 million of common stock in the fourth quarter.

The CEO framed the quarter as evidence that Popular’s strategy is working, emphasizing higher net interest income, stable consumer and mortgage credit, and continued capital returns. He highlighted a stable Puerto Rico backdrop supported by employment, tourism, construction activity, and spending, while also noting affordability pressures from inflation and higher fuel and energy costs. Strategically, he stressed segment-led deposit and lending initiatives, including simpler retail deposit products, a student account, a healthcare professional program, and completion of the commercial cash management platform onboarding.

The CFO said the quarter benefited from higher income from investment securities and commercial loans, with NII up to $699 million and NIM at 3.63% GAAP. He attributed the $21 million increase in expenses to personnel costs, annual salary adjustments, profit sharing, and performance-based compensation, and said full-year expenses are now expected to rise about 2% including the maximum profit sharing contribution. On capital, he cited tangible book value per share of $86.30, a tangible common equity ratio of 7.05%, $236 million returned to shareholders in the quarter, and a fourth-quarter buyback plan of $150 million to $200 million, while reiterating a 14% to 17% annual ROTCE target.

Analysts focused on the new commercial credit issues, asking whether the higher fourth-quarter charge-off guide implied more losses in the newly nonaccrual commercial loan; management said the guidance mainly reflects potential scenarios, including the disclosed C&I deals, while core consumer and mortgage portfolios remain strong. Questions also centered on the new consumer deposit product, which management said was customer-driven and lowered quarterly fee income by about $2 million, or roughly $8 million to $10 million annualized, partially offset by expected deposit growth. Analysts pressed on public funds, loan growth moderation, NII/NIM trajectory, and DTA usage; management said public deposit balances should stay in the $20 billion to $22 billion range, NII should keep growing, and the U.S. DTA would not benefit CET1 even if more is utilized.