BPOP — Popular, Inc.

Popular Inc. (BPOP) Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Net Income: $278 million, up 15% from Q1 2026 and 41% year-over-year.
• Earnings Per Share (EPS): $4.35, an increase of $0.57 from Q1.
• Return on Tangible Common Equity (ROTCE): Improved to 17% from 15.5% in Q1 and 13.3% a year ago.
• Net Interest Income (NII): Increased by $23 million to $693 million, with a stable net interest margin (NIM) at 3.66% (4.17% on a taxable equivalent basis).
• Loan Portfolio Growth: Increased by $460 million, driven by commercial construction and mortgage lending.
• Deposits: Increased by $2.6 billion, primarily due to higher Puerto Rico public deposits.
• Nonperforming Loans (NPL): Decreased by $45 million to $413 million, with an NPL ratio of 1.04%.
• Tangible Book Value per Share: Increased by $2.96 to $87.94.

2. Strategic Updates and Business Highlights

• Javier D. Ferrer-Fernández announced his retirement effective end of August, with Jorge Jose García set to take over as CEO.
• A 20% increase in the quarterly dividend to $0.90 per share was announced, alongside a new $1 billion share repurchase authorization.
• Continued investment in technology and modernization of retail branches, with over half upgraded to a new look.
• Strong performance in debit and credit card sales, with volumes up over 7% year-over-year.
• Focus on deepening relationships with specific client segments, including healthcare professionals and community associations in the U.S.

3. Forward Guidance and Outlook

• Loan Growth Guidance: Expected to remain at the low end of 3% to 4% for the year.
• NII Growth: Projected to increase by 8% to 9% for the year, despite higher costs associated with public deposits.
• Non-Interest Income: Expected to be in the range of $165 million to $170 million for the year.
• Expense Growth: Anticipated to be around 2% to 3% for the year, including higher personnel costs.
• Net Charge-Offs: Expected to be in the range of 65 to 80 basis points for the full year.

4. Bad News, Challenges, or Points of Concern

• Commercial Loan Issues: The resolution of a significant $155 million nonperforming loan resulted in a $71 million charge-off, impacting net charge-offs for the quarter.
• Competition: Increased competition in both Puerto Rico and the U.S., particularly in online deposit channels and from community banks.
• Deposit Trends: A decline in customer deposits (excluding public funds) by $400 million, attributed to seasonal spending patterns following tax refunds.
• Economic Conditions: While the overall economic environment in Puerto Rico remains stable, there are signs of moderation in some indicators compared to previous years.

5. Notable Q&A Insights

• Management clarified that the new $1 billion buyback authorization does not have a set timeframe, and they plan to execute buybacks throughout the year.
• Loan growth expectations may be influenced by the timing of payoffs in construction loans and a decrease in large ticket loans in Puerto Rico.
• The company is focused on maintaining a rational pricing strategy amidst competitive pressures, particularly in deposit and credit products.
• There was discussion around the normalization of net charge-offs, with current expectations indicating a lower range than historical norms due to strong consumer performance and recoveries in the mortgage portfolio.

Overall, Popular Inc. reported a strong quarter with significant earnings growth and strategic initiatives in place, despite facing some competitive pressures and challenges in the commercial loan segment.