BPOP — Popular, Inc.

Summary of Popular Inc. (BPOP) Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Net Income: $246 million, up $12 million from Q4 2025 and 38% year-over-year.
• Earnings Per Share (EPS): $3.78, an increase of $0.25 from Q4 2025 and 48% compared to Q1 2025.
• Return on Common Equity (ROCE): 15.5%, up from 14.4% in Q4 2025 and 11.4% a year ago.
• Net Interest Income (NII): $670 million, up $13 million from Q4 2025, driven by fixed-rate asset repricing and lower deposit costs.
• Net Interest Margin (NIM): Expanded to 3.66% (GAAP) and 4.14% (taxable equivalent).
• Total Deposits: Increased to $67.6 billion, up $1.4 billion from Q4 2025, with retail and commercial deposits rising due to tax refund activity.
• Operating Expenses: Decreased to $467 million, down $6 million from Q4 2025, primarily due to lower personnel costs and fewer calendar days in the quarter.
• Tangible Book Value per Share: Increased to $84.98.

2. Strategic Updates and Business Highlights

• Continued investment in digital capabilities, including the launch of an integrated marketplace in the Mi Banco app to enhance customer engagement.
• Focus on targeted segment strategies, including new programs for healthcare professionals.
• Positive business environment in Puerto Rico, with growth in sectors like manufacturing, construction, and tourism.
• Strong demand for homes and a healthy labor market, with an unemployment rate at 5.6%.

3. Forward Guidance and Outlook

• Loan Growth: Expected to be at the low end of the 3% to 4% range for 2026 due to slower demand in consumer and auto segments.
• NII Growth: Guidance raised to the upper end of the 5% to 7% range for 2026, driven by positive deposit trends.
• Operating Expenses: Expected to increase by 2% to 3% for the year, down from previous guidance of 3%.
• Credit Quality: Annual net charge-off guidance maintained at 55 to 70 basis points.

4. Bad News, Challenges, or Points of Concern

• Net Charge-Offs: Increased to $60 million, or 61 basis points, primarily due to a single commercial relationship, raising concerns about potential credit quality deterioration.
• Loan Balances: Ending loan balances were flat, with declines in certain segments, indicating potential challenges in loan growth.
• Economic Risks: Ongoing geopolitical developments and sustained higher oil prices could impact customer bases and economic conditions in Puerto Rico.

5. Notable Q&A Insights

• Deposits: Management expects average account sizes to stabilize at higher levels despite potential declines in ending balances post-tax season.
• M&A Activity: No immediate plans for acquisitions; focus remains on organic growth and transformation efforts.
• Credit Quality: Management remains confident in credit quality metrics, with no significant signs of stress observed despite elevated oil prices.
• Capital Deployment: Discussions on capital actions, including potential buybacks and dividend increases, are ongoing, with a commitment to maintain an active repurchase program.

Overall, Popular Inc. reported strong financial results for Q1 2026, driven by improved net interest income and effective cost management, while navigating potential economic headwinds and maintaining a focus on strategic growth initiatives.