BPOP

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Performance was driven by higher net interest income and stable underlying credit trends, though partially offset by increased personnel costs and performance-based compensation. - Puerto Rico's economic environment remains stable, supported by healthy employment levels, robust tourism, and ongoing infrastructure investment from federal disaster-recovery funds. - Management is executing a segment-led strategy, launching specialized deposit products for retail and college students to deepen customer primacy and lower acquisition costs. - The commercial franchise was strengthened by completing a multi-year migration to a new cash management platform, enhancing money movement capabilities for business clients. - Operational efficiency remains a priority, with the team identifying $50 million in recurring efficiencies expected to benefit the 2027 expense profile. - Management is monitoring affordability pressures driven by inflation and higher energy costs, though current borrower stress levels remain low despite the rate environment. - Capital allocation remains balanced between supporting growth, maintaining a strong tangible common equity ratio, and returning excess capital via buybacks and a 20% dividend increase. - Full-year loan growth expectations were moderated due to lower auto portfolio performance relative to expectations and a strategic shift toward more disciplined relationship-building in the U.S. commercial business. - Net interest income is projected to increase by approximately 8.5% for the full year, supported by the continued repricing of the investment portfolio into higher-yielding notes. - Management expects net charge-offs to be in the range of 80-90 basis points for 2026, with an initial expectation for them to decrease to a range of 60 to 75 basis points in 2027. - Puerto Rico public deposits are anticipated to remain stable between $20 billion and $22 billion for the remainder of the year, serving as a key liquidity anchor. - The corporation is targeting a sustainable annual Return on Tangible Common Equity (ROTCE) between 14% and 17%, assuming continued operating leverage and stable credit. - A $74 million commercial relationship was placed on non-accrual status, and a $34 million partial charge-off was recorded on a separate credit; both are attributed to borrower-specific issues rather than systemic trends. - The tangible book value per share decreased to $86.30, primarily reflecting lower market values on available-for-sale investment securities due to interest rate volatility. - Operating expenses for the full year are expected to increase by 2%, a figure that includes the maximum potential profit-sharing contribution based on strong financial results. - The U.S. deferred tax asset (DTA) valuation allowance remains a factor, with utilization dependent on sustained profitability levels in the U.S. mainland business. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management clarified that the Q4 guidance reflects specific C&I workout scenarios rather than a broad deterioration of the portfolio. - Core consumer and mortgage portfolios continue to exhibit strong performance with historically low delinquencies. - The launch of simpler, lower-fee products resulted in a $2 million quarterly reduction in fee income as over a million accounts were reclassified. - The strategic goal is to offset this $8 million to $10 million annual fee impact through increased deposit volume and deeper customer relationships. - Popular is reinvesting approximately $1.5 billion per quarter from maturing 1.25% legacy notes into 2- and 3-year notes yielding around 4.3%. - This mechanical repricing process is expected to provide a significant tailwind to net interest income regardless of immediate Fed rate moves. - Management is intentionally slowing U.S. production to move away from single-product transactions toward full-relationship banking, including deposits. - The shift in the U.S. focuses on CRE and multifamily deals where the bank can secure the entire operating relationship.

Popular came into this Q3 2026 earnings print with its stock already under pressure, and the latest move did not help. The shares slipped another 2.8% in Friday trading, even as the bank posted quarterly earnings per share of US$4.21 and net income of US$266.3 million. For a lender often viewed as a high return on equity story, the real headline this quarter sits in profitability. Return on tangible common equity landed at 15.8%, strong in absolute terms, yet clearly not enough to satisfy a market already pricing in a richer narrative. Like the strength in Popular's 15.8% return on tangible common equity but worried that the market still is not buying the story at the current share price? Benchmark it against a broader set of high quality peers by scanning our list of solid balance sheet and fundamentals stocks (26 results). - Revenue (Q3 2026 vs. Q3 2025): US$815.995m vs. US$742.575m (up 9.9%) - Net Income, Excl. Extra Items (Q3 2026 vs. Q3 2025): US$266.334m vs. US$210.964m (up 26.2%) - Basic EPS (Q3 2026 vs. Q3 2025): US$4.21 vs. US$3.15 (up 33.8%) - Net Interest Margin, or NIM (Q3 2026 vs. Q3 2025): 4.17% vs. 3.9% (up 27 bps) Ask Charlie what Popular's buybacks signal about next year's plans. Popular's bullish script leans heavily on digital projects feeding fee income and future operating leverage. "Ongoing investments in digital infrastructure, including Popular's treasury and cash management platform, Mi Banco marketplace and branch upgrades, are starting to show through in higher debit and credit card fee income and are expected to support further noninterest revenue growth and operating leverage." Card and service activity is helping, yet the quarter shows the trade offs. Noninterest income landed at US$176m and actually slipped quarter on quarter, even with a US$5m refinancing benefit. Expenses climbed to US$506m. Operating expense growth tracking near 2% supports the cost program story, but the noninterest revenue leg is not yet a clear beat. Concern around Popular's heavy Puerto Rico exposure is the core bear story that investors keep stress testing. "Continued high geographic concentration in Puerto Rico exposes Popular to local economic volatility, demographic shifts such as a shrinking and aging population, and potential natural disasters, which could weaken loan demand, pressure asset quality and reduce revenue and earnings stability." Current figures paint a mixed picture rather than a clear crack. Public sector deposits declined US$1.2b, although management flagged this as expected, and broader customer balances eased only modestly. Credit metrics stayed generally stable, with net charge offs of US$73m and lower levels than last quarter, even as nonperforming loans stepped up by US$52m to US$466m. So far, stress remains isolated, not systemic. One Narrative has put a figure on that disagreement. → See the Narrative with its higher Fair Value, assumptions and all. Popular highlights how a clear profit report can still leave investors uncertain. The real opportunity sits in stocks that could be undervalued before expectations catch up. - Company 1 - 41% below our estimate - sells advanced circuit systems into AI data centers and defense programs as clients prepare for heavier compute loads. - Company 2 - 49% below our estimate - secures large fixed price infrastructure and military facility projects as public agencies commit to complex, long duration construction work. - Company 3 - 17% below our estimate - builds electrical and communications systems for hyperscale data centers as operators expand capacity for heavier AI and cloud workloads. Those are three of them. See all 29 potentially undervalued companies → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BPOP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. - Net Income: $266 million for Q3 2026. - Earnings Per Share: $4.21, down $0.14 from Q2; up 34% year-over-year. - ROTCE: 15.8%, versus 17% in Q2 and 13.1% in Q3 2025; target range 14%17%. - Net Interest Income: $699 million, up $6 million, driven by higher investment securities and commercial loan income; full-year 2026 growth expected ~8.5%. - Net Interest Margin: 3.63% GAAP (down 3 bps); 4.16% taxable equivalent (down 1 bp). - Noninterest Income: $176 million, down $5 million QoQ but above guidance; up 3% YoY; Q4 guidance ~$170 million. - Operating Expenses: $506 million, up $21 million on higher personnel, profit sharing, and performance-based compensation; full-year growth expected ~2%. - Loans Held in Portfolio: Up $293 million on commercial and mortgage growth; full-year 2026 loan growth expected ~2%. - Total Deposits: $68.7 billion, down $1.5 billion QoQ, mainly from lower Puerto Rico public sector balances ($21.5 billion, down $1.2 billion); excluding public funds, customer balances down ~$289 million. - Deposit Costs: Total up 7 bps to 1.64%; excluding market-linked public deposits, up 3 bps to 1.13%. - Net Charge-Offs: $73 million, or annualized 73 bps, versus $104 million (1.05%) in Q2; full-year 2026 expected 8090 bps; initial 2027 expectation 6075 bps. - Nonperforming Loans: $466 million, up $52 million; NPL ratio 1.16% from 1.04%; includes $74 million commercial relationship placed on nonaccrual and $34 million partial charge-off. - Nonperforming Assets: Down $37 million, reflecting sale of $84 million in nonperforming loans held for sale. - Effective Tax Rate: 14% for the quarter; 14% expected for the full year. - Tangible Book Value Per Share: $86.30, down $1.64, on lower AFS securities market values. - Tangible Common Equity Ratio: 7.05%, down 13 bps from Q2. - Capital Returns: $236 million returned to shareholders, including $179 million in buybacks; quarterly dividend raised 20% to $0.90 per share; Q4 buybacks expected $150$200 million. - Card Sales Volume: Customer debit and credit card sales up ~7% year-over-year; debit card fees up 10% and credit card fees up 8% YoY. - Brokerage and Asset Management Fees: Up 60% year-over-year. - Warning! GuruFocus has detected 8 Warning Signs with BPOP. - High Yield Dividend Stocks in Gurus' Portfolio - This Powerful Chart Made Peter Lynch 29% A Year For 13 Years - How to calculate the intrinsic value of a stock? - Is BPOP fairly valued? Test your thesis with our free DCF calculator. Release Date: October 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Popular Inc (NASDAQ:BPOP) reported net income of $266 million and EPS of $4.21, up 34% year-over-year, with ROTCE of 15.8%. - Net interest income increased by $6 million to $699 million, driven by higher income from investment securities and commercial loans. - Loans held in portfolio grew by $293 million, led by commercial and mortgage lending, with full-year loan growth expected at approximately 2%. - Credit quality remained stable with net charge-offs declining to $73 million (73 basis points) from $104 million in the prior quarter. - Popular Inc (NASDAQ:BPOP) returned $236 million to shareholders, including $179 million in buybacks, and increased the quarterly dividend by 20% to $0.90 per share. - Total deposits decreased by $1.5 billion, primarily due to lower Puerto Rico public sector balances, with customer balances down $289 million excluding public funds. - Nonperforming loans increased by $52 million to $466 million, raising the NPL ratio to 1.16% from 1.04%, due to a commercial relationship placed on nonaccrual. - Operating expenses rose by $21 million to $506 million, driven by higher personnel costs, profit sharing, and performance-based compensation. - Noninterest income decreased by $5 million to $176 million, and fee income is expected to be reduced by $8-10 million annually from a new deposit product. - Net interest margin declined by 3 basis points to 3.63% on a GAAP basis, and deposit costs increased by 7 basis points to 1.64%. Q: With the new $74 million commercial nonaccrual and implied Q4 net charge-off guidance of roughly 100 basis points, is the elevated loss outlook driven by loss content in that specific credit or broader portfolio weakness? A: Luis Sousa, EVP and Chief Risk Officer, said the Q4 net charge-off guidance mainly reflects potential scenarios, including the disclosed C&I nonperforming loans. Lidio Soriano, EVP and Chief Risk Officer of Corporate Risk Management, added that core consumer and mortgage portfolios continue to perform very well, and the guidance reflects some of the cases the bank is working out. Q: What is the outlook for preferred issuance or further capital restructuring beyond the buyback? A: CEO Jorge Garcia said rates remain unattractive, so a preferred issuance is a discretionary transaction the company will not force. He noted Popular still has plenty of room to continue repurchases, which optimize the capital stack, and management will be strategic and take advantage if an opportunity arises. Q: How much federal disaster recovery funding remains unspent, and what is the pace of deployment? A: Jorge Garcia said slightly above $43 billion remains. He noted a pickup in FEMA fund spending in Q3 through the local COR3 group, with year-to-date spending slightly below the full prior year but almost 40% higher than at the same point last year. Q: What is the financial impact of the new simplified consumer deposit product launched in August, and was it driven by customer demand or competition? A: Jorge Garcia said the product responds to customer demand for simpler, lower-fee offerings and supports the segment-led strategy and customer primacy. Over 1 million accounts were reclassified into the new products, reducing Q3 fee income by about $2 million, or roughly $8 million to $10 million annualized. Management expects deposit growth to offset some of that, and the impact is embedded in the approximately $170 million Q4 noninterest income guidance. Q: How would a higher-for-longer rate environment affect loan demand, and which commercial industries are most sensitive? A: Jorge Garcia said stress tests show little stress from one or two rate moves at current levels. Higher for longer is favorable because it extends the investment portfolio repricing tailwind and tax-advantaged investment benefits. Puerto Rico loan demand remains strong and largely rate-insensitive, while US construction pipelines remain strong despite the rate environment. Q: Why was the Q3 reinvestment yield of about 4.3% below two- and three-year Treasury yields, and will future reinvestment track market rates more closely? A: The Treasurer explained that yields rose through the quarter, so bonds purchased earlier at maturity captured lower rates; the 4.3% reflects the average rather than the quarter-end level. Lidio Soriano added that about $1.5 billion to $1.6 billion reprices quarterly, including $600 million to $700 million of legacy investments yielding 1.25% and newer investments at 3.25%, so the portfolio yield should continue to rise significantly. Q: How is Popular framing risk to Puerto Rico public fund balances ahead of the 2028 election, and could infrastructure spending draw down those deposits? A: Jorge Garcia said some pickup in municipal-level spending is expected, but federal funds flow in and out and are not sitting on the balance sheet. The Federal Oversight Board still requires balanced budgets, and the company's $20 billion to $22 billion range incorporates scheduled payments, operating accounts and competitive bidding. Significant declines from infrastructure spending are not expected. Q: What is driving the more moderate commercial loan growth outlook, and does it change the longer-term growth view? A: Jorge Garcia cited weaker-than-expected auto originations, a deliberate shift in the US business toward deeper full-relationship clients led by deposits rather than single-product budget targets, and expected US construction payoffs. In Puerto Rico, demand is good but large-transaction supply is limited after several years of 6% to 9% growth. Longer term, growth should trend closer to slightly above Puerto Rico GDP, with NII growth and operating leverage still expected in 2027. Q: Is the 14% to 17% ROTCE target a through-the-cycle expectation, and what drives the high and low ends? A: Jorge Garcia said management is comfortable with the annual 14% to 17% range given the environment, balance sheet structure and execution, and is driving teams toward it. Lidio Soriano said the range is intentionally wide to be sustainable across operating environments. Garcia added that credit costs and provision are key swing factors, while NII growth and execution of segment-led strategies and deposit deepening support the high end. Q: What were the underwriting lessons from the two large C&I credit issues? A: Lidio Soriano said one case involved a client extending into a new venture, highlighting diversification risk, while the other was a long-standing, previously profitable food-service client hurt by competition and market conditions; no major underwriting change was needed beyond closer day-to-day client monitoring. Jorge Garcia said the telecom deal made sense for Puerto Rico's primary bank to lead, but acquisition integration issues caused operational problems. Soriano noted only two credit issues last year and three this year across thousands of relationships, with the book performing very strongly. Q: What is the near-term NIM trajectory entering 2027, especially with a possible December rate hike? A: Lidio Soriano said investment portfolio repricing and short-term asset and liability repricing remain tailwinds, and NII should continue to grow on an ascending trajectory depending on the asset mix between investments and loans. Jorge Garcia added that the level of public deposits is a big driver: growth there pressures NIM but contributes nicely to NII, and the company will take the NII growth. Q: What is the outlook for the US deferred tax asset, and what would a valuation allowance release mean for cash taxes and CET1? A: Lidio Soriano said the gross DTA is about $600 million, net of a roughly $385 million allowance for a net DTA of about $215 million, most of which expires between 2028 and 2031. Greater US profitability is the main path to using more of it. Jorge Garcia added that the DTA is NOL-based and not part of regulatory capital, so a reversal would not For the complete transcript of the earnings call, please refer to the full earnings call transcript.

- Interested in Popular, Inc.? Here are five stocks we like better. - Popular reported strong third-quarter results, with net income of $266 million, or $4.21 per share—up 34% year over year—supported by higher net interest income and stable underlying credit trends. - Loans rose by $293 million, but deposits fell by $1.5 billion to $68.7 billion, largely because Puerto Rico public deposits declined. Management expects approximately 2% full-year 2026 loan growth and 8.5% net interest income growth. - Credit quality was generally stable, though two commercial relationships increased nonperforming loans and led Popular to raise its full-year net charge-off outlook to 80–90 basis points. The bank also returned $236 million to shareholders, raised its dividend 20%, and plans $150–$200 million in fourth-quarter share repurchases. - Popular's Earnings Beat Shows Why This Bank Stock Keeps Climbing Popular (NASDAQ:BPOP) reported third-quarter net income of $266 million, or $4.21 per share, as higher net interest income and stable underlying credit trends were partly offset by higher operating expenses and lower non-interest income. Earnings per share declined $0.14 from the second quarter but rose 34% from the third quarter of 2025. Return on tangible common equity was 15.8%, compared with 17% in the prior quarter and 13.1% a year earlier. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over - Trending Stocks: How to Spot, Trade, and Profit Safely "We delivered another solid quarter," Chief Financial Officer Lidio Soriano said during the company's earnings call, pointing to the company's focus on generating sustainable returns. Loans held in portfolio increased by $293 million during the quarter, driven by commercial and mortgage lending. Popular now expects full-year 2026 loan growth of about 2%, reflecting lower auto and lease activity and more moderate commercial growth. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? - Growth vs. Value Investing: What Are the Differences? President and CEO Jorge García said demand in Puerto Rico remains positive, though the size and supply of potential transactions have moderated after several years of growth that outpaced the island's economy. In the U.S., the company is emphasizing deeper, multiproduct customer relationships and deposit gathering rather than pursuing single-product lending relationships, García said. Total ending deposits were $68.7 billion, down $1.5 billion from the second quarter. Puerto Rico public deposits declined by $1.2 billion to $21.5 billion. Excluding public funds, customer balances decreased by about $289 million on an ending basis, a change management said was consistent with seasonal expectations. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price Popular expects Puerto Rico public deposits to remain between $20 billion and $22 billion for the rest of the year. García said the company does not expect infrastructure spending to cause a significant decline in those balances, though it anticipates some pickup in municipal activity tied to federally funded rebuilding projects. Net interest income increased $6 million from the prior quarter to $699 million, supported by higher income from investment securities and commercial loans. GAAP net interest margin declined 3 basis points to 3.63%, while tax-equivalent margin declined 1 basis point to 4.16%. The company maintained its strategy of reinvesting maturing U.S. Treasury securities into two- and three-year notes. During the quarter, it invested approximately $1.4 billion at an average yield of about 4.3% and an average duration of 2.7 years. That represented a 206-basis-point pickup relative to the securities that matured during the quarter. Popular expects full-year net interest income to increase about 8.5%. Management also said it expects net interest income to continue growing in 2027, supported by investment portfolio repricing and current loan demand, although the pace of margin expansion will depend partly on the mix of loans, investments and public deposits. Popular said overall credit quality remained stable, with consumer performance favorable and mortgage delinquencies and net recoveries remaining strong. Net charge-offs declined to $73 million, or 73 basis points annualized, from $104 million, or 1.05%, in the second quarter. Commercial credit metrics were affected by two unrelated commercial and industrial relationships. The company placed a $74 million relationship on nonaccrual status and recorded a $34 million partial charge-off on a credit that had become non-performing in the prior quarter. Soriano said the deterioration in both cases was driven primarily by borrower-specific issues rather than a shared risk factor. Total non-performing assets decreased by $37 million, aided by the sale of an $84 million non-performing loan held for sale. However, total non-performing loans increased by $52 million to $466 million, and the non-performing loan ratio rose to 1.16% from 1.04% in the prior quarter. Popular raised its full-year net charge-off outlook to a range of 80 to 90 basis points. Chief Risk Officer Luis Sousa said the fourth-quarter outlook mainly incorporates potential scenarios involving the disclosed commercial and industrial credits. Looking ahead, management's preliminary expectation is for 2027 net charge-offs of roughly 60 to 75 basis points. Non-interest income decreased $5 million sequentially to $176 million, though it remained above the company's guidance range. The quarter included a $5 million benefit associated with a commercial loan refinancing. Compared with a year earlier, non-interest income rose 3%, including growth in debit and credit card fees and a 60% increase in broker and asset management fees. Popular expects fourth-quarter non-interest income of about $170 million. Operating expenses increased $21 million to $506 million, primarily due to annual salary adjustments, higher profit sharing and performance-based compensation. The company now expects full-year operating expenses to rise about 2%, including the maximum profit-sharing contribution. García said the company has identified and implemented about $50 million in recurring efficiencies that it expects to benefit results next year. He said Popular has not deliberately deferred projects to reduce expenses. The company launched a simplified consumer deposit product during the quarter and reclassified more than 1 million existing accounts into the new offerings. García said the change reduced quarterly fee income by roughly $2 million and could represent an annualized impact of $8 million to $10 million, though Popular expects deeper customer relationships and deposit growth to help offset the effect over time. Popular also completed the final wave of onboarding for its commercial cash-management platform and introduced an account for college students. Its healthcare professional program has generated more than $90 million in new loans this year, García said. Popular returned $236 million to shareholders during the quarter, including $179 million in common-stock repurchases. It raised its quarterly dividend 20% to $0.90 per share, beginning with the Oct. 1 payment. Tangible book value per share declined $1.64 to $86.30, primarily due to lower market values of available-for-sale securities. The tangible common equity ratio was 7.05%, down 13 basis points from the prior quarter. Management expects to repurchase between $150 million and $200 million of common stock in the fourth quarter and said quarterly repurchases could remain in a similar range during 2027, subject to current conditions. The company continues to target annual return on tangible common equity of 14% to 17%. Popular, Inc (NASDAQ: BPOP) is a financial services company headquartered in San Juan, Puerto Rico. Its principal subsidiary, Banco Popular de Puerto Rico, provides banking services to individuals, businesses and institutions, including deposit accounts, consumer and commercial loans, residential mortgages, credit cards and electronic banking services. The company also offers investment, brokerage, insurance and wealth management services through specialized subsidiaries and affiliated businesses. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Popular Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Popular (BPOP) came out with quarterly earnings of $4.21 per share, beating the Zacks Consensus Estimate of $3.9 per share. This compares to earnings of $3.14 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.95%. A quarter ago, it was expected that this company that runs Banco Popular and other banks in Puerto Rico and the U.S. would post earnings of $3.69 per share when it actually produced earnings of $4.35, delivering a surprise of +17.89%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Popular, which belongs to the Zacks Banks - Southeast industry, posted revenues of $874.59 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 0.28%. This compares to year-ago revenues of $817.7 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Popular shares have added about 30.3% since the beginning of the year versus the S&P 500's gain of 13.3%. While Popular has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Popular was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $4.00 on $882.71 million in revenues for the coming quarter and $15.70 on $3.46 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Southeast is currently in the top 27% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, TowneBank (TOWN), is yet to report results for the quarter ended September 2026. This community bank is expected to post quarterly earnings of $0.82 per share in its upcoming report, which represents a year-over-year change of -1.2%. The consensus EPS estimate for the quarter has been revised 0.6% higher over the last 30 days to the current level. TowneBank's revenues are expected to be $250.72 million, up 15.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Popular, Inc. (BPOP) : Free Stock Analysis Report Towne Bank (TOWN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, Oct. 22, 2026 - Investor Relations Officer - Paul J. Cardillo - President and Chief Executive Officer - Jorge Jose Garca - Executive Vice President and Chief Financial Officer - Lidio V. Soriano Operator: Good day, and thank you for standing by. Welcome to the Popular Inc. Third Quarter 2026 Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press *1 on your telephone. You will then hear automated message advising your hand is raised. To withdraw your question, please press *1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Investor Relations Officer of Popular, Paul Cardillo. Please go ahead. Paul J. Cardillo: Good morning, and thank you for joining us. With me on the call today are our President and CEO, Jorge Jose García and our CFO, Lidio V. Soriano. They will review our third quarter results and then answer your questions. Other members of our management team, including our CRO, Luis Sosa, will also be available during the Q&A session. Before we begin, I would like to remind you that during today's call, we may make forward-looking statements regarding Popular, such as projections of revenue, earnings, credit quality, expenses, taxes, and capital, as well as statements regarding Popular's plans and objectives. These statements are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements are discussed in today's earnings release and our SEC filings. You may find today's earnings release and our SEC filings on our website at popular.com. I will now turn the call over to Jorge. Jorge Jose García: Thank you, Paul, and good morning, everyone. Please turn to Slide 4 to discuss the highlights of another solid quarter. We reported net income of $266 million and earnings per share of $4.21. A decrease of $0.14 per share from the second quarter. Results reflected higher net interest income and stable underlying credit trends. Partially offset by higher operating expenses and lower noninterest income. Compared with the third quarter of last year, earnings per share increased by 34%. Our ROTCE was 15.8%, compared with 17% in the second quarter and 13.1% in the third quarter of 2025. Held in portfolio increased by $293 million, driven by growth in commercial and mortgage lending. Total deposits decreased by $1.5 billion, primarily reflecting lower Puerto Rico public sector balances. Excluding public funds, customer balances decreased by approximately $289 million. Delta was consistent with our expectations and third quarter seasonality. Credit performance remained stable. Net charge-offs declined from the second quarter while nonperforming loans increased. Primarily reflecting a commercial relationship at BPPR that was placed on non-accrual. We continue to return capital to shareholders, repurchasing $179 million of common stock in the quarter. We also increased the quarterly dividend to $0.90 per share, beginning with the payment on October 1. While some indicators have moderated from the strong levels experienced over the last several years, Economic conditions and business activity in Puerto Rico remain stable. The labor market continued to be healthy. Total employment increased to approximately 1.26 million in September. Its highest level of the year. As the labor force grew by roughly 24 thousand people in the quarter, employment grew by 18 thousand jobs. The unemployment rate increased modestly to 6.2% largely reflecting a higher participation rate rather than job losses. Job growth was strongest in leisure and hospitality, with most other sectors showing modest growth or broadly stable conditions. Consumer spending was solid during the quarter, as evidenced by Popular's customers' debit and credit card sales volume, which increased by approximately 7% year over year. Tourism was another source of meaningful support for the Puerto Rico economy. Through August, hotel occupancy improved by more than 4 percentage points to approximately 79%. Cruise passenger arrivals increased by 27% through September. Air passenger traffic is moderated from record levels but remains healthy, declining approximately 3% year over year. Construction activity is supported by public and private investment, including the ongoing deployment of federal disaster-recovery funds and a growing pipeline of private sector projects. We continue to see demand in the energy sector as well as in warehousing and logistics. Overall, Puerto Rico's economic environment is stable, supported by healthy employment, tourism, infrastructure investment, and private sector development. At the same time, we are monitoring affordability pressures that are being driven by inflation, and the higher cost of fuel and energy. We continue to focus on the 3 objectives we have shared previously. Being the number 1 bank for our customers, being simple and efficient, and being a top performing bank. We are on the right path, and we will continue to execute with discipline. Being the number 1 bank for our customers means building stronger relationships and continuing to strengthen our deposit franchise. 1 of our most important competitive advantages. That starts with giving customers the flexibility to bank through the channel that best meets their needs. While continuing to enhance our products and maintain our high service standards. On the retail side, this quarter, we launched a simpler deposit product that encourages behavior such as direct deposits to eliminate banking fees. That will help us build deeper relationships over time. We also launched an account for college students to establish relationships earlier in their financial journey. These efforts advance our segment led strategy which leverages specialized offerings to unlock opportunities and deepening customer relationships. Our successful health care professional program is 1 example of this segment led approach. The program supports deposit retention and has also generated more than $90 million in loans. In new loans this year. On the commercial side, we completed the final wave of customer onboarding to our new cash management platform. Concluding a multiyear effort. The platform provides greater flexibility and mobile access enhanced money movement capabilities for our commercial clients. This strengthens our value proposition for business clients and further differentiates our commercial banking franchise in Puerto Rico. And gives us a platform to continue to enhance functionality. Together, these initiatives demonstrate that our strategy is translating into tangible results. I look forward to building on this momentum with our teams as we continue advancing our objectives. I will now turn the call over to Lidio for more details on our financial and credit performance. Lidio V. Soriano: Thank you, Jorge and good morning, everyone. As Jorge said, we delivered another solid quarter. Our focus on generating sustainable returns remained evident this quarter with ROTCE of 15.8% compared with 17% in the second quarter. Please turn to Slide number 7. Net interest income increased by $6 million to $699 million driven by higher income from investment securities and commercial loans. On a GAAP basis, net interest margin declined by 3 basis points to 3.63%, and on a taxable equivalent basis, NIM was 4.16%. 1 basis point lower than last quarter. Ending loan balances increased by $293 million driven by commercial and mortgage loans. We now expect full year loan growth for 2026 of approximately 2%, primarily reflecting lower auto and lease activity and more moderate commercial growth. Our investment portfolio, we have maintained our strategy of reinvesting proceeds from US treasury note maturities into 2- and 3-year notes. During the quarter, we invested approximately $1.4 billion with an average duration of 2.7 years, an average yield of approximately 4.3%. This represented a pickup of approximately 206 basis points on the notes that matured during the quarter. Ending deposits were $68.7 billion down $1.5 billion from the second quarter. Puerto Rico public deposit decreased by $1.2 billion to $21.5 billion. On an average basis, total deposits increased by $52 million excluding Puerto Rico public deposits, average customer deposits decreased by $619 million. Customer balances were consistent with historical patterns and continue to reflect the strength of our deposit franchise. We continue to expect Puerto Rico public deposits to remain between $20 billion and $22 billion for the rest of the year. Total deposit cost increased by 7 basis points to 1.64% primarily reflecting higher rates on market linked Puerto Rico public deposit that increased by 11 basis points. Excluding these balances, deposit cost increased by 3 basis points to 1.13%. Including an increase of 2 basis points in private sector deposit cost at BPPR and a 1 basis point increase at Popular Bank. For the year, we expect net interest income to increase by approximately 8.5%. Please turn to slide number 8. Non interest income decreased by $5 million to $176 million but remained above our guidance range. The quarter included a $5 million benefit associated with a commercial loan refinancing. Compared with the third quarter of 2025, noninterest income increased by 3% reflecting growth in debit and credit card fees of 10% and 8%, respectively. And a 60% increase in brokerage and asset management fees. These results demonstrate the benefit of a broad product offering. We expect fourth quarter non interest income of $170 million. Please turn to slide number 9. Operating expenses increased by $21 million to $506 million. The increase was primarily related to higher personnel costs, including annual salary adjustments higher profit sharing expenses, and increased performance based compensation, linked to the corporation's financial results. Based on current trends, we now expect full year operational expenses to increase by approximately 2% including the maximum profit sharing contribution. Our effective tax rate was 14% during the quarter, driven by higher taxes and income. For the full year, we expect an effective tax rate of 14%. Turning to credit. Overall credit quality remained stable during the third quarter. Consumer performance remained favorable with net charge-offs continuing at a historically low level despite a seasonal increase in other losses. Mortgage performance also remains strong. with historically low delinquencies and net recoveries. Commercial credit metrics were influenced by developments involving 2 unrelated commercial and industrial relationships. We placed a $74 million relationship on non accrual status and recorded a $34 million partial charge-off on a credit that entered non performing status in the second quarter. The 2 credits are in different industries, and do not share a common risk factor. In each case, the deterioration was driven primarily by borrower specific issues. Please turn to Slide number 10. Total nonperforming assets decreased by $37 million reflecting the sale of the $84 million nonperforming loan held for sale. While total NPLs increased by $52 million to $466 million The NPL ratio increased to 1.16% from 1.04% in the prior quarter. Excluding consumer loans, NPL inflows decreased by $56 million from the second quarter. Turning to Slide 11, net charge-offs were $73 million or an annualized 73 basis points compared with $104 million or 1.05% in the prior quarter. Given our year-to-date commercial charge-offs and NPL inflows this quarter, we now expect net charge-offs to be in the range of 80-90 basis points for the full year. While we will provide formal 2027 guidance, when we report fourth quarter results in January, Looking ahead to 2027, our initial expectation is that net charge-offs will be in the range of roughly 60 to 75 basis points. Overall, underlying credit metrics were stable and reserve coverage remained strong. We remain vigilant and continue to take a disciplined approach to managing risk. Turning now to capital. Please turn to Slide 12. Tangible book value per share decreased by $1.64 to $86.30 primarily reflecting lower market values on available for sale investment securities. The tangible common equity ratio of 7.05%, down 13 basis points from the second quarter. Remain comfortable with both the absolute level of TCE and the real sensitivity of the securities portfolio to changes in interest rates. Capital actions will continue to balance the need to support growth, maintain capital strength, and return excess capital to shareholders. During the quarter, we returned $236 million to shareholders including $179 million through common stock repurchases. We also increased our early common stock dividend by 20%. In the fourth quarter, we expect to repurchase between $150 million and $200 million of common stock. Based on current conditions, we expect quarterly repurchases to remain within a similar range during 2027. And finally, continue to target a 14% to 17% annual RoTCE. With that, I will turn the call back to Jorge for his concluding remarks. Jorge Jose García: Thank you, Lidio. My first 2 months as CEO, I have been visiting branches, regional offices and customers across our markets. I have experienced firsthand the trust our customers place in us and their deep connections with our teams. I also continue to hear from customers that they are up optimistic about Puerto Rico's long term opportunities And how vital it is that we play a role in that outcome. Staying connected also extends to the communities we serve. 2 weeks ago, as we celebrated our 1 133rd anniversary, I joined hundreds of colleagues who volunteered at food banks, youth centers and other nonprofits as part of our embracing our communities day of service. These experiences reaffirmed what I already knew. What makes Popular special is our people. Our pride and commitment are the foundation of our sustainable success. I am fortunate to step into this role with a strong capital position, a solid franchise, a talented team, and real momentum. Our responsibility is to carry that forward and continue creating long term value for our customers, shareholders, colleagues, and our communities. I am grateful to my colleagues for their commitment and the results they deliver every day. We intend to be active participants in shaping what lies ahead. And not simply react to it. With that, we are now ready to take your questions. Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder to ask a question, you will need to press *1 on your cell phone and wait for your name to be announced. To withdraw your question, please press *1 again. Please standby while we compile the Q and A roster. And our first question comes from the line of Jared Shaw with Barclays. Your line is now open. Jared Shaw: Hi, good morning. Good morning. Good morning. Thanks. Maybe just starting with credit. In walking through some of the items you spoke about. So the, the 1 new commercial non performer, I mean, I guess, we without that, commercial nonperformers would have been lower. And then when we look at the net charge off guidance for fourth quarter, I guess that implies about 100 basis points. So is there-- is that going to be some loss content in that commercial loan? Or is that just more overall weaker expectations in the portfolio? Analyst: Good morning. This is Luis. Jorge Jose García: I would say that our net charge-off guidance for the fourth quarter mainly reflects our potential scenarios, including the C&I deals that we have disclosed. Think if I can add, I mean, what is important is that we have. We see the core portfolios continue to behave very well as we said in the prepared remarks. Both consumer and mortgage portfolio exhibited strong performance in the third quarter, and that is our expectation going to the fourth quarter. The guidance that we provided reflects some of the cases that we are working out. Jared Shaw: Okay. Okay. So overall, though, apart from the 1 offs, you still feel pretty good about credit? It sounds like. Okay. And then any update on, the outlook for preferred issuance or any capital restocking beyond the buyback? Lidio V. Soriano: Oh, Jared, I mean, the rates continue to not be attractive to us. I mean, as we have said, this is really a discretionary transaction. We still can have plenty of room to continue our repurchase activity. This is something that makes things better for our capital stack, I mean, optimizes it. And we will be strategic and take advantage if we see an opportunity. But right now, we are not just going to force a transaction that does not make sense. Jared Shaw: Okay. Thanks. If I could just sneak 1 third 1 in. Just what is. Do you know what the update of the balance of federal spending is? You talked about continued spending from that $48 billion out there. what is remaining left of allocated but not spent? Jorge Jose García: Yeah. Slightly over $43 billion. And 1 thing important there, we did see a pickup. In spend in the third quarter from, you know, the FEMA funds that are managed through the local core 3. Group. That, that, you know, basically year-to-date, we are running just slightly below the entire year or the end of the third quarter, we are slightly below the total of last year, almost 40% higher than at the same time last year. So we are glad to see a little bit of that pickup. Thanks. Operator: Thank you. 1 moment for our next question. Our next question comes from the line of Terence McEvoy with Wells Fargo. Your line is now open. Analyst: Hi. Good morning. Can you hear me? Jorge Jose García: Yes, we can. Good morning, Terry, and thank you for picking up coverage. Welcome to the call. Thank you. Much appreciated. First question, the new consumer deposit product was that in response to market demand or customer demand? Are your competitors offering that? And then financially, what would-- what is the full quarter impact was rolled out in August? And how should we think about maybe a full year impact of what that could mean to fee income? Yeah. So a couple of things. I mean, certainly, it is something that we hear from our customers that they want simpler products, lower fees. So the idea is to launch a product that gives them the opportunity to establish relationships and deepening that relationship that go along with the primacy-- customer primacy that we are targeting. The other thing with launching the project, it just continues to be part of our strategy to create segment led strategies. We believe that there is still great opportunity in Puerto Rico for us to be able to deepen and provide more value and enhance-- enhance functionality to certain segments, both in the retail as well as in the commercial. So, you know, that is a big driver. In terms of the fee, what we did is we did reclassify over a million accounts into these new products to be able to give existing clients the benefit and not essentially put the onus on them on having to change accounts. That resulted, I think, with a reduction in the quarter of around $2 million decrease in fee income. So on an annualized basis, you know, it is probably somewhere between $8 million and $10 million. Of course, you know, we expect to be able to gain traction and increase our deposits to offset some of that. And, you know, it is embedded in the guide for the fourth quarter. A $170 million target for fees for the fourth quarter. Great. Thank you. And then maybe as a follow-up, how could a higher for longer rate environment impact loan demand? And then on that same theme, are there particular industries within your commercial portfolio that are more sensitive to higher rates that you are monitoring today? So we. In the past, when we look at our models and stress test, we do not see a lot of stress related to, you know, 1 or 2, you know, moves in the rate and certainly not where the rates are at today. In terms of where we are at, you know, in hire for longer will help us continue to take benefits of our. The tailwind of the repricing of our investment portfolio. We certainly look forward to stability. You know, if we can you know, the rhythm of change and the movement of particularly the short term and of the of the curve create some noise given the exposure we have and the repricing of our public funds. But overall, you know, hire for longer, it is it is favorable for us. We get to take a higher benefit on tax advantages of some of the investments. And we have not found particularly these levels where there is significant stress to our borrowers from those rates. Demand in Puerto Rico continues to be strong. A lot of the transactions are not gonna be rate sensitive. We do see some more rate sensitivity in The US at times, But, you know, frankly, right now, the pipelines around. Particularly around commercial projects construction projects in The US continues to be strong even looking through to the current rate environment. that is great. Thanks for taking my questions. Operator: Thank you. 1 moment for our next question. Our next question comes from the line of Timur Braziler with UBS. Your line is now open. Timur Braziler: Hi. Good morning. Starting on the reinvestment rate, I think it was $1.4 billion purchased at 4.3%. I guess, why 4.3%? I mean, it is decent amount lower than the 2 and 3 year yields were during the quarter. And I guess as we roll forward into 4Q and beyond, should that reinvestment rate more so mirror that 2 and 3 year rate, or are we call it, you know, 40, 50 basis points below it going forward? Analyst: Yeah. Good morning. This is Juan Pablo, treasurer. Yeah. I mean, of the reflection is if we recall the quarter, it did not start out where it ended up. Right? So, you know, we are effectively, you know, purchasing, you know, bonds as they mature during the month. And, you know, any given period like this 1 where you start out lower and ended up higher, or is you are going to miss out on the higher rate. Right? So I think of it more as on average during the quarter and not just the endpoint as the quarter. So that is that is in effect what we are doing as we got about $1.5 billion-$1.6 billion coming due every quarter. And we just kind of continue that mechanical process. Lidio V. Soriano: I would just add that, I mean, as you see, we have some of the slide in the appendix. We have a significant amount of investments that we are repricing on a quarterly basis around $1.5 billion to $1.6 billion. Out of which $600 million-$700 million relates to legacy investments that were 1 and a quarter percent. And even the newer investments were 3 and a quarter percent. So going forward, we will continue to see a significant pickup in the yield of that portfolio given the repricing dynamics and given the interest rate environment that we have today. Timur Braziler: Okay. Great. And then maybe looking at the public funds you guys have been closer in guiding those balances. More recently. But I am wondering, particularly going into the 28 election, is there any kind of empirical data that you can point to as to, you know, projects kicking off? Like, is there a risk through 2027 that some of the public funds that are sitting on balance sheet are actually being utilized, or maybe looking at history is different versus this time when there is a little bit more flush in liquidity. But I guess, what is the way that you guys are framing risk around public funds balances in reference to the election that is coming up 2 years from now? Jorge Jose García: So I think a couple of things, Timur, I mean, number 1, yes, I think we would expect some pickup in activity related to municipal spending. Particularly at the municipal level, maybe not as much as the central government level. But couple of things there. First, you know, remember that there are a lot of projects that they are still rebuilding, you know, with FEMA and federal funds. Lot of those projects are at the municipal level. So what we. Where we think we will see some of the first impact is in seeing a speed up or a pickup in the activity. Maybe you know, the mayors and the municipalities, prioritizing either projects that can. That are of big scale or that can be completed quickly. Since that money is gonna be coming in from federal funds as a flow. Right? So it is in and out. Those monies are not sitting on our balance sheet right now. So other than that, you also have the federal oversight board that is still manages for a balanced budget, and the government needs to be able to those budgets approved and execute to those approved budget. Budgets by the oversight board. So I mean, it. You know, so we give ranges, and in those ranges, we tend to incorporate scheduled payments, like, for pensions or kind of the continued value. The continued value bonds that and then some sense of operating accounts but and certainly competition. Right? I mean, we actively bid on retaining certain, you know, excess funds from the government client. So. But in terms of predicting or projecting that we are gonna see significant declines because of infrastructure spend, out of these funds that is not something that we think will be significant. Great. For that color. Operator: Thank you. 1 moment for our next question. Our next question comes from the line of Arren Cyganovich with Truist Securities. Your line is now open. Arren Cyganovich: Thanks. Maybe you could just talk a little bit about the loan growth expectation, modest slowdown in loan growth into the fourth quarter. Makes sense in terms of the you know, auto and consumer side, but commercial has been pretty strong over the past couple of quarters. So what is driving the kind of more moderate expectation there into the quarter? Jorge Jose García: Yes. So certainly, you look at from the original guidance and where we are at now, the auto portfolio is 1 of the areas where, you know, we have been under our expectations for the year, so that certainly has an impact. The other thing is that we are trying to be a lot more disciplined in our US business as well. Historically, you know, we drove the teams to kind of hit their budget targets. And, you know, that has resulted in a lot of, you know, single product clients that we are not deepening those relationships, and we are pushing our teams to really create deeper relationships, lead with deposits, And even in CRE and multifamily transactions, we wanna make sure that we have a whole relationship, and that is certainly slowing down the production of our US team. We are also expecting some payoffs in our construction portfolio in The US like we saw in this quarter. There are strong pipelines coming behind those, but as you can imagine, those construction projects take a little bit more time to start seeing the effect. In Puerto Rico, you know, there is still good demand. I think the issue in Puerto Rico is more about supply. We have been benefiting from 6% to 9% growth over the last few years. Some of that growth has been driven by tax incentives. And there is only so many large transactions that can occur in Puerto Rico. So I still see a lot of positive movement in Puerto Rico, a lot of positive demand, but just the scale and supply of it is you know, reducing. Okay. Arren Cyganovich: Mean, I guess that does not-- I know you are not going to give 2027 guidance, but does that impact your you know, view in terms of loan growth you know, post this quarter? I mean, it sounds like you have some headwinds there. Lidio V. Soriano: I mean, we. We have talked in the past that we have been growing, outpacing the Puerto Rico economy and GDP significant significantly given our size, over time, should be we should be growing closer or above, you know, slightly above the Puerto Rico economy. I think what is important as we look forward, Arren, is that we will continue to see NII growth. We look at our projections into 2027, particularly in this environment, given the tailwinds that we have with the investment portfolio repositioning and the loan demand that we are seeing and the prices. Current prices we do expect to continue to see creating operating leverage in 2027. Okay. Arren Cyganovich: And can you just remind me on the on the RoTCE updated guidance of 14% to 17% that you put out there last quarter or I think it was last quarter. That. that is more of a kind of a longer term expectation. Right? Like, just over time, not necessarily No. I know, expectation of your insurance. With No. Lidio V. Soriano: We are-- I mean, I guess-- we, I mean, I know you are now. We are-- I know you are earning that now, but Yeah. Yeah. You know, I just did not know if that was, like, if you are always expecting to earn between that seems you know, I mean, always is a tough it is a tough word, but we are basically based on the environment that we are seeing, you know, the balance sheet structure and all our plans and the execution that we are seeing from our teams, we felt very comfortable giving the guidance of the 14 to 17% on an annual basis, and, you know, that is what we are driving our teams to. I think what is important, I mean, we wanted it to also be sustainable. So it takes into account potentially different operating environments, So that is why maybe a little bit of the wider range and why so wide. I mean, it is for us, the sustainable part is as important as just hitting the target. Got it. Okay. Thank you. Operator: Thank you. 1 moment for our next question. Our next question comes from the line of Kelly Motta with KBW. Your line is now open. Jorge Jose García: Good morning, Kelly. Kelly Motta: Morning. Thanks for the questions here. So, piecing together the outlook for loan growth coming in a little bit weaker with auto being a higher yielding category. Just wondering as we think through the outlook ahead for specifically loan yields, if there could be some pressure off offsetting the rate hikes from just a change in mix and overall how new origination yields are coming in. Thanks. Lidio V. Soriano: I think with the higher rates, I mean, the. Those. The current higher rates impact those consumer loans a lot more, right, than the commercial And we have been. If you if you look over the last I would say, probably since the Fed started moving rates down, we had been seeing kind of incremental yields in our loan portfolio every quarter, and this quarter, was, I think, the first time that we see a decline in those yields. As the. As I think the portfolio starts stabilizing. I mean, the way, you know, I look I look at it, I think given the ins and outs of the portfolio, I mean, auto, for example, we. Our originations are even this quarter where we did not grow, I think the originations were, like, $450 million. So it is significant amount of volume that is coming in. it is gonna depend on obviously, the credit risk profile of those clients, the terms of those loans. But right now, I do not think loan yield is something, you know, that is putting pressure, you know, in terms of as we look forward. it is not a it is not a concern for us. Again, the NII, we do see NII continuing to expand in 2027. And, yeah. Got it. Kelly Motta: Okay. that is that is helpful. And then and then on expenses, I appreciate you lowered it to the lower end of the guide, which is you know, nice given the incentive compensation with revenue coming in so strong. Just wondering the drivers of that, if additional you were better at getting some costs savings out or if maybe projects have been kicked out till next year? Thanks. Jorge Jose García: We have not made any conscious decisions to move projects. I mean, for us, the rhythm of the project is more about capacity, how much we can continue. We have actually thrown in some nonbudgeted or unanticipated projects this year. The teams have done a great job in delivering efficiencies $50 million in recurring efficiencies have been implemented and identified. Expect that amount to be a benefit next year. Obviously, it is not. At some point, we are gonna start seeing expense growth again, but the teams have done an awesome job. The 2% includes the, as you mentioned, probably sharing. We are expecting a disrate to max out that profit sharing payment based on our formulas. And that is all embedded in into that guide. But it goes to just a lot of effort from a lot of people that are just. We call it a lot of buns and singles Nothing huge to create those efficiencies and savings. Great. I will step back. Thank you. Operator: Thank you. 1 moment for our next question. Our next question comes from the line of Gerard Cassidy with RBC Capital Markets. Your line is now open. Analyst: Hi, Jorge. Hi, Lidio. Hi, Kelly. How are you? Jorge, now with Terry covering you, maybe you guys can do your call from Portland in July. The weather's nice. I figured October was. it is not that cold and the leaves are pretty. So I will leave you with that. it is. It is gorgeous up here today. that is for sure. Thank you. Question for you. Can you guys share with us, how much of your US deferred tax asset do you expect to utilize over the next 2 to 3 years? And what needs to change to support a release of that large, you know, valuation allowance? And then what are the implications for. If you are able to do that, of course, what are the implications for cash taxes and CET1 capital? Lidio V. Soriano: What. Should that happen or when that happens? Let me just give you some of the numbers, and then I give you what it take. What it will take in order for us to be able to utilize more of that DTA. The DTA number, gross, is around $100 million, net of an allowance of close to $385 million that gives a net of $250 million of DTA. That majority of that DTA expires between the years 2028 and 2031. And the 1 way that we can use it is to become more I mean, that. Jorge Jose García: that is it. I mean, the more money we make, the more we are gonna be able to use our DTA. We have done. The team has done a great job of improving profitability in the US. So this year and last year, and that is something that, obviously, we feel very proud of. Something that we continue to work hard in order to realize as much as we can from those NOLs. Yeah. Lidio V. Soriano: 1 thing, Gerard, the DTA in The US is NOL based. it is not part of regulatory capital. There are there are some limitations. So even if you were in a situation where you could reverse more of that DTA, it is not gonna have a benefit on CET 1. And now the flip side of that is that the income that The US business is generating, you know, that capital is actually accruing at a. Essentially a pretax level instead of at the after tax amount that you see on a GAAP basis. Very good. Correct. Analyst: And then just to circle back to credit, you know, when you think about the large credit that went into non accrual in the second quarter and now it is off, of course,, and you took a charge as well. And then the large credit that showed up this quarter, When you guys do the, like, post op analysis, of what went wrong with the credit or, you know, the underwriting, What did you learn? Or can you share with us, you know, what were some of maybe the shortfalls in the underwriting possibly or just. Really, what did you learn from those 2 experiences? I mean, in those 2 experiences in particular, I would say, I mean, part of the learnings. I mean, in 1 of the cases, it was a client that was extending into a new venture. I think that is always something that we look very carefully from underwriting standpoint. So that is something that we need to keep bringing our teams as you are diversifying your industry. that is something that also brings risk with it. I think the other 1 is a long-standing client. We have a very profitable relationship. Over time, he is in the food service industry, but over time, competition and market conditions in the island. I-- from there, I mean, I do not know. I am not sure. I mean, other than having a closer look at the client and being on top of the client on a day to day basis, I do not think that from underwriting perspective, there was anything that we needed to change. Jorge Jose García: And I think, Gerard, I mean, given our position in Puerto Rico, we wanna lend to some of these deals. You know, the telecom transaction was, you know, a fairly large deal. It makes sense to us as the primary bank in Puerto Rico to lend into an acquisition of a large telecom provider in Puerto Rico. You know, unfortunately, you know, these are operational issues that the integration of the acquisition did not go well. And, you know, we ended up, you know, having to take the hit for it. I think the other part that is important is that, you know, we have been able to work through you know, a handful of these, you know, C and I loans over the last few quarters, but we still have still been able to perform or have slowed those losses. And be able to continue to improve our profitability. I mean, just to Yep. Analyst: To finalize, as you are-- I mean, when you look at it, we have thousands of relationship, and we have had issues with maybe 2 cases last year and 3 cases this year. So just to keep in mind that the performance of our book has been very, very strong. Notwithstanding the fact that every now and then, we may have issues with 1 of our customers. Appreciate the color. Thank you. Operator: Thank you. 1 moment for our next question. Our next question comes from the line of Manuel Navas with Piper Sandler. Your line is now open. Jorge Jose García: Hi, Manuel. Manuel Navas: Hey, guys. How should I think about the near term NIM I hear you on the NII guide for the year. NII improvement for next year. And I just kind of want to think about the near term NIM and how it could enter next year, especially if there is, like, a December rate hike as well. Lidio V. Soriano: I mean, I. As you look at our name, I think we have, as Jorge mentioned in earlier. In the commentary, we have a. Still a lot of tailwinds related to the repricing of our investment portfolio, so that is going to lead to an increase in asset yields as well as well as the repricing of some of our short term short term assets and short term liabilities. We have also. We guided. We said we expect net interest income to continue to grow. Continue to be the guide for us as our organization. So that regard, I mean, you think you can think of we will see a ascending trajectory that is going to depend upon the mix between assets. Our assets between and investment. Sorry, between investments and loans. Jorge Jose García: I think the other the other factor is the level of public deposits. You know, this. that is really a big driver Manuel. I mean, if we continue to see growth in public deposits, that does put pressure on NIM. it is not good for NIM. But it does contribute nicely to NII, and we will take the NII growth. Yep. Got it. And just switching over to growth for a second. Manuel Navas: What dynamics would need to come into play for loan growth to accelerate? I hear you that perhaps the tendency is more towards GDP levels of Puerto Rico, where that is the longer term trend. But what would take what would give you some tailwind on loan growth? Jorge Jose García: Yeah. I mean, I think when. You know, 1 of the cool things about going from the accounting and finance world to the CEO role is being able to spend time with clients and spending a lot of time with our customers. And you hear a lot of people enthusiastic about the opportunities in Puerto Rico. And these are people thinking, you know, 3, 5, 10 years down the road, And you see some of their projects, some of their visions, some of those dreams, And if they start coming to petition, you see acceleration. We are able to bring in and see population growth in The US, attract the professionals, and the diaspora to Puerto Rico, you see, you know, $4 billion of manufacturing jobs. Or I am sorry. $4 billion of manufacturing investment announced. As those things starts coming in, if you are seeing a shift, in population, in the ecosystem that goes around some of those investments, certainly, you know, those are things that could help the entire economy of Puerto Rico. And we will benefit from that lift. I appreciate that. The last question here is shifting over to the ROTCE guide. Manuel Navas: What are kind of the biggest drivers of the high end of that guide or the low end of it? You know, it is through the cycle. But if. As you look into next year, just kinda thoughts on what could really drive it towards the high end? But potentially what could drive it to the lower end. Jorge Jose García: We love the ROTCE guidance because it captures everything, Manuel. So, certainly, you know, when you when you look at that band, you know, credit cost, you know, provision is a factor. Now NII growth. Continued NII growth is a is a positive factor. You know, the our ability to be able to execute on our segment led strategies in Puerto Rico and deepening deposit relationships in Puerto Rico, which we believe we can do. That will help the top end of that range. So these are all things that, you know, drive profitability in banks, and it is no different for us. I appreciate the commentary. Thank you. Operator: Thank you. I have no further questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Before you buy stock in Popular, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Popular wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $350,756!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,363,905!* Now, it's worth noting Stock Advisor's total average return is 922% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 22, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Popular (BPOP) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Puerto Rican financial institution Popular (NASDAQ:BPOP) nearly met Wall Street's revenue expectations in Q3 2026, but sales rose 7.4% year on year to $874.6 million. Its GAAP profit of $4.21 per share was 6.6% above analysts' consensus estimates. Is now the time to buy Popular? Find out in our full research report. - Net Interest Income: $698.9 million vs analyst estimates of $737.1 million (8.1% year-on-year growth, 5.2% miss) - Net Interest Margin: 3.6% vs analyst estimates of 4% (37.7 basis point miss) - Revenue: $874.6 million vs analyst estimates of $887.6 million (7.4% year-on-year growth, 1.5% miss) - Efficiency Ratio: 57.8% vs analyst estimates of 56.2% (164.9 basis point miss) - EPS (GAAP): $4.21 vs analyst estimates of $3.95 (6.6% beat) - Tangible Book Value per Share: $86.30 vs analyst estimates of $89.46 (13% year-on-year growth, 3.5% miss) - Market Capitalization: $10.35 billion "We reported earnings per share of $4.21, 3% lower than the second quarter and 34% higher than the third quarter of 2025, and a ROTCE of 15.80%. These results reflected higher net interest income, stable underlying credit trends and continued capital return, partially offset by higher operating expenses and lower non-interest income. During the quarter, we repurchased $179 million of common stock and declared a 20% increase in our quarterly common stock dividend to $0.90 per share." Founded in 1893 as the first bank in Puerto Rico to serve the working class, Popular (NASDAQ:BPOP) is a financial holding company that provides retail, mortgage, and commercial banking services primarily in Puerto Rico and the mainland United States. From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Over the last five years, Popular grew its revenue at a tepid 6.9% compounded annual growth rate. This wasn't a great result compared to the rest of the banking sector, but there are still things to like about Popular. We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Popular's annualized revenue growth of 8.7% over the last two years is above its five-year trend, which is encouraging. This quarter, Popular's revenue grew by 7.4% year on year to $874.6 million. Net interest income made up 78.1% of the company's total revenue during the last five years, meaning lending operations are Popular's largest source of revenue. While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income. ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who's building AI, one company is already using it to print money. And nobody's paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won't last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice. Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability. This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights. Popular's TBVPS grew at a decent 5.5% annual clip over the last five years. TBVPS growth has accelerated recently, growing by 13.2% annually over the last two years from $67.40 to $86.30 per share. Over the next 12 months, Consensus estimates call for Popular's TBVPS to grow by 16.8% to $100.84, solid growth rate. It was good to see Popular beat analysts' EPS expectations this quarter. On the other hand, its net interest income missed and its tangible book value per share fell short of Wall Street's estimates. Overall, this was a mixed quarter. The stock remained flat at $162.38 immediately following the results. So should you invest in Popular right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

Popular has rewarded shareholders with strong multi year returns, which naturally raises a sharper question for anyone looking at the stock today. Is the current share price still aligned with what the bank is earning, or has sentiment moved ahead of the underlying profits. - Over the past 3 years, Popular has returned 184.1%, which puts a lot of weight on whether the business can keep justifying that performance through its earnings power. - The bank's valuation now leans heavily on how stable its lending model, credit quality and funding costs prove to be, because those factors can shape both near term profitability and longer term earnings capacity. - There is a second opinion on Popular worth weighing. See what analysts think Popular's shares could be worth. For investors, the debate is whether Popular's current price fairly reflects what its earnings suggest the stock should be worth. If you want a wider lens while you weigh Popular against its earnings, you can use a focused screen of 33 high quality undervalued stocks as another starting point for your research. The P/E ratio tends to fit Popular because earnings are a primary value yardstick for banks. Popular currently trades on a P/E of 10.5x, which is below the banks industry average of 11.5x and also below the 12.5x level implied by peers in its group. For a reader, that gap shows the market giving the stock a lower earnings tag than many comparable institutions. The fair P/E level suggested by the model, which blends Popular's forecast return on equity, book value profile, sector, size and risk, sits above the current 10.5x. That places the shares in undervalued territory on this metric, while still leaving you to judge whether the bank's credit quality, funding costs and profitability path justify closing that gap. Explore the numbers behind Popular's P/E valuation. Simply Wall St Narratives for Popular pick up where the valuation puzzle leaves you. They spell out which combinations of future growth, margins and earnings would need to hold for the shares to be worth meaningfully more or less than today's price. Each scenario ties a fair value estimate to a specific set of potential catalysts and risks, so you can track over time which version of Popular's story is actually unfolding. One of the top community narratives on Popular: 19% undervalued "The capital-rich balance sheet, with CET1 around 16.1% and a higher through the cycle ROTCE objective of 14% to 17%, gives Popular scope to continue buybacks and higher dividends under its US$1b authorization..." Discover why this Narrative puts Popular at 19% undervalued. The people setting Popular's priorities, deciding how much risk to take and how they pay themselves can tilt the whole investment case, and that balance has not been explored here. See who runs Popular and how they are paid. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BPOP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]