Popular, Inc.

Popular reported second-quarter net income of $278 million and EPS of $4.35, up $0.57 per share, or 15%, versus Q1 and 41% year over year. Net interest income increased $23 million to $693 million; NIM was 3.66% on a GAAP basis and 4.17% on a taxable-equivalent basis. Noninterest income was $181 million, operating expenses were $484 million, and ROTCE improved to 17%. Loans held in portfolio rose $460 million, deposits increased $2.6 billion to $70.2 billion, tangible book value per share increased to $87.94, and CET1 was 16.1%. For guidance, management raised the annual ROTCE objective to 14% to 17%, kept loan growth guidance at the low end of 3% to 4%, expects NII to increase 8% to 9% for the year, sees quarterly noninterest income at $165 million to $170 million, expects full-year expense growth of about 2% to 3%, and projects a 14% to 15% effective tax rate. It also expects public deposits to remain in the $20 billion to $22 billion range and full-year net charge-offs at 65 to 80 basis points.

Javier Ferrer-Fernández framed the quarter as evidence that Popular is executing well on its strategy, highlighting strong earnings growth, stable margin performance, balance sheet growth, and higher capital returns. He also spent much of his remarks on his planned retirement and leadership succession, expressing confidence in Jorge García, Lidio Soriano, and the broader management team. Strategically, he emphasized continued investment in physical and digital channels, targeted customer segments, and the theme that Popular is positioned to grow with its customers and communities.

Jorge García said the quarter came in ahead of expectations across nearly all categories, driven by higher NII, stronger fee income, expense discipline, and lower provision expense. He cited NII of $693 million, deposit cost of 1.57%, TBVPS of $87.94, and CET1 of 16.1%, and raised the annual ROTCE target to 14% to 17%. He also guided to 8% to 9% NII growth, $165 million to $170 million of quarterly noninterest income, 2% to 3% expense growth, and a 14% to 15% tax rate, while noting $300 million to $400 million of additional buybacks expected in the rest of 2026 and another $1 billion authorization.

Analysts focused on capital return, loan growth, competition, expenses, and credit normalization. On buybacks and capital levels, management said the new $1 billion authorization has no time limit, that $300 million to $400 million of repurchases are expected in the rest of 2026, and that any capital-stack optimization would be used to reduce CET1. On loan growth, management said the low-end 3% to 4% guidance reflects paydown timing in U.S. construction, fewer large-ticket Puerto Rico loans, and the offset from resolving the $155 million nonperforming loan. On credit, management said the quarter’s provision was largely driven by the two new commercial relationships, while underlying consumer and mortgage trends remained strong.