BPOP Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics

Net Income: $234 million for Q4 2025, up $23 million (11%) year-over-year; annual net income reached $833 million, a 36% increase from 2024.

Earnings Per Share (EPS): Increased by $0.38 to $3.53 for Q4.

Net Interest Income (NII): $658 million for Q4, up $11 million; annual increase of 11% ($259 million).

Net Interest Margin: Expanded by 10 basis points to 3.61% (GAAP).

Loan Growth: $641 million in Q4, totaling $2.2 billion for the year (6% growth).

Credit Quality: Stable with net charge-offs at 51 basis points for Q4, down from 60 basis points in Q3; annual net charge-offs improved to 52 basis points.

Tangible Book Value per Share: Increased to $82.65, a 21% year-over-year rise.

Common Stock Dividend: Increased by $0.05 to $0.75 per share.

2Strategic Updates and Business Highlights

Continued loan growth across commercial and construction segments, with strong performance in Puerto Rico's economy reflected in employment and consumer spending.

Successful rollout of a new commercial cash management platform and a digital consumer credit origination platform.

Ongoing investments in physical retail network to enhance customer experience.

Strategic initiatives included exiting the U.S. mortgage business and optimizing mortgage servicing in Puerto Rico.

3Forward Guidance and Outlook

2026 Loan Growth: Expected to be between 3% to 4%, with commercial lending leading.

NII Guidance: Anticipated increase of 5% to 7% driven by lower deposit costs and continued loan originations.

Operating Expenses: Expected to rise by approximately 3% in 2026, reflecting ongoing investments in technology and personnel.

Net Charge-Offs: Projected to be between 55 to 70 basis points for 2026.

4Bad News, Challenges, or Points of Concern

Deposit Declines: Ending deposit balances decreased by $323 million, primarily due to anticipated outflows from Puerto Rico public deposits.

Consumer Loan Demand: Expected softening in consumer lending, particularly in auto loans, which may impact overall loan growth.

Geopolitical Risks: Concerns regarding the ongoing PREPA bankruptcy and its potential impact on economic growth in Puerto Rico.

Market Competition: Increased competition for deposits in Puerto Rico, though management noted no irrational pricing behavior.

5Notable Q&A Insights

Management acknowledged potential slower average balance sheet growth in 2026 and discussed the impact of competitive pressures on deposit pricing.

The company is open to M&A opportunities but prioritizes organic growth and transformation initiatives.

Concerns were raised about affordability in the market and its potential impact on customer segments.

The positive impact of military presence in Puerto Rico was noted as a potential economic booster.

Management emphasized the importance of maintaining a strong capital structure while considering buybacks and dividend increases. This summary encapsulates the key aspects of BPOP's Q4 2025 earnings call, highlighting financial performance, strategic initiatives, and outlook while addressing challenges and insights from the Q&A session.