Popular, Inc. Announces Third Quarter 2026 Financial Results

SAN JUAN, Puerto Rico--(BUSINESS WIRE)--Popular, Inc. (the “Corporation,” “Popular,” “we,” “us,” “our”) (NASDAQ: BPOP):

Jorge J. García, President and Chief Executive Officer, said:

"We are pleased with our third quarter results. Our financial performance was solid, and we continued to advance our three strategic objectives: being the number one bank for our customers, being simple and efficient, and being a top-performing bank."

"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."

"Business activity in Puerto Rico remains healthy, supported by a strong labor market. Credit metrics continue to be stable while we remain attentive to economic conditions, given the potential impact of prolonged inflation and higher cost of fuel and energy."

"It is a privilege to step into this role with a strong capital position, a solid banking franchise, a talented team and meaningful momentum. Our responsibility is to build on those strengths and continue creating long-term value for our customers, shareholders, colleagues, and communities."

"I am grateful to our team for their commitment and the results they deliver every day."

Popular, Inc. – Net interest income ("NII") of $699 million increased $6 million from Q2 2026, driven by higher income from investment securities and commercial loans, as well as the impact of one additional day in the quarter. The increase was partially offset by higher interest expense on deposits, primarily reflecting higher average balances of public deposits and higher rates on such deposits. Average earning assets increased $677 million, primarily attributable to higher U.S. Treasury securities balances due to re-investment of maturities at higher yields, coupled with higher average commercial loans. Total average deposits increased by $502 million, driven by an average increase of $1.1 billion in Puerto Rico public deposits, partially offset by average decreases of $280 million in savings accounts, mainly retail deposits, and $362 million in non-interest-bearing demand deposits. Excluding P.R. public deposits, total average deposits decreased by $619 million.

Net interest margin ("NIM") decreased three basis points to 3.63%. Loan yields increased by one basis point to 7.24%. Deposit costs increased by seven basis points to 1.64%. Excluding P.R. public deposits, deposit costs increased three basis points to 1.13%. The additional day in the quarter contributed $6 million to net interest income in Q3 2026.

NII fully taxable equivalent ("FTE") and NIM FTE (Non-GAAP) – NII FTE of $802 million increased $13 million from Q2 2026, while NIM FTE decreased 1 basis point to 4.16%. Money market and investment securities yields FTE increased by 13 basis points, mainly driven by purchases and re-investment of maturities into higher yielding U.S. Treasury securities. Loan yields FTE increased by three basis points to 7.56%.

Interest income on a taxable equivalent basis is presented to show the effect of tax-exempt interest income from U.S. Treasury securities, certain GNMA securities and certain loans in BPPR's portfolios that are exempt from Puerto Rico income taxes.

Refer to tables D, E and F for more details on the components of NII and NIM on a taxable equivalent basis.

Banco Popular de Puerto Rico ("BPPR") Segment – NII of $592 million increased $2 million from Q2 2026. The increase was primarily due to an increase in income from money market and investment securities by $14 million or 10 basis points as a result of higher average balances and higher yields of U.S. Treasury securities and higher income from loans by $5 million, driven by higher average balances, mainly in the mortgage and personal loans portfolios and by one additional day in the quarter. Higher interest expense on deposits of $17 million was primarily due to higher average balances on the market-linked P.R. public deposits by $1.1 billion and an 11 basis points increase in the rates of those deposits. NIM declined four basis points during Q3 2026 to 3.81%. Deposit costs increased by nine basis points to 1.41%, including the costs of P.R. public deposits which increased 11 basis points to 2.72% for the period. Excluding P.R. public deposits, deposit costs increased by two basis points.

Popular Bank ("PB") Segment – NII of $117 million increased $4 million, or 3%, from Q2 2026. The increase was mainly due to higher income from loans by $6 million, mainly due to commercial loans with higher income by $8 million and higher yields by 11 basis points, driven by new originations carrying higher yields, partially offset by higher interest expense by $1 million attributable to higher average balances on time deposits. NIM expanded three basis points to 3.20%. Deposit costs increased by one basis point to 2.74%.

Non-interest income of $176 million decreased $5 million, or 3%, from Q2 2026.

Key drivers:

Banking fees decreased $2 million to $116 million, mainly due to a decrease in service charges on deposits driven by a new deposit product launched during the month of August, which offers $0 service fees to clients that meet certain criteria.

Other operating income decreased $3 million to $23 million, driven by a $3 million unrealized investment gain recognized in Q2, a $2 million impairment charge on certain equity investments, and a $2 million lower favorable valuation adjustment of securities held for deferred benefit plans, which have an offsetting effect in personnel costs. These were partially offset by a $5 million benefit recognized in other income in connection with the refinancing of a commercial loan during the quarter.

Refer to Table B for further details.

Total operating expenses of $506 million increased $21 million, or 4%, from Q2 2026.

Key drivers: Personnel costs increased by $16 million, or 7%, driven by higher salaries by $7 million due to annual salary and merit increases effective in Q3 combined with one additional day in the quarter and higher incentives by $8 million, including $5 million related to profit-sharing and $3 million related to short-term incentives, both of which are tied to the Corporation's financial performance.

Full-time equivalent employees were 9,112 as of September 30, 2026, compared to 9,203 as of June 30, 2026.

Transactional services increased $2 million, driven by a retroactive credit of $1.6 million recorded in Q2 and higher card supplies expenses. Net occupancy expenses increased $1 million, primarily due to repair projects across the Corporation. Professional fees increased $1 million, mainly due to costs associated with corporate initiatives.

For a breakdown of operating expenses by category in the consolidated statement of operations refer to Table B.

For the third quarter of 2026, the Corporation recorded an income tax expense of $44 million, a decrease of $2 million when compared to $46 million in the previous quarter.

The effective tax rate ("ETR") of the Corporation is impacted by the composition and source of its taxable income and tax credit activities. The ETR for the third quarter of 2026 was 14.2%, consistent with the previous quarter's ETR of 14.1%, primarily driven by the recognition of tax-exempt income and other tax benefits, such as the purchase of tax credits.

During the third quarter of 2026, the Corporation’s overall credit quality remained stable. Consumer and mortgage portfolio performance remained favorable, with historically low net charge-offs (despite a slight seasonal increase in the auto portfolio), historically low delinquency levels, and net recoveries in the mortgage portfolio. Changes in commercial credit metrics during the quarter were driven by borrower-specific developments; core commercial portfolios continue to show stable credit trends.

Non-Performing Loans ("NPLs") and Net Charge Offs ("NCOs")

Total NPLs held-in-portfolio increased $52 million to $466 million during Q3 2026. Excluding consumer loans, inflows of NPLs held-in-portfolio decreased $56 million in the third quarter of 2026. The ratio of NPLs to total loans held in the portfolio was 1.16% for the third quarter of 2026, compared to 1.04% for the previous quarter. NPLs held-for-sale decreased $84 million driven by the sale during Q3 of an NPL held-for-sale.

NCO Ratio of 0.73% decreased 32 basis points when compared to the previous quarter. Total NCOs decreased by $31 million quarter-over-quarter, reflecting lower commercial charge-offs.

BPPR segment - NPLs held-in-portfolio increased $54 million, primarily driven by a $52 million increase in commercial NPLs. The increase includes the inflow to NPL of a $74 million commercial and industrial ("C&I") loan, partially offset by a $34 million partial charge-off related to a commercial NPL that had entered non-performing status in the prior quarter. These events are considered borrower-specific and are not indicative of broader deterioration in the commercial portfolio. Excluding consumer loans, BPPR segment NPL inflows decreased $45 million compared to the prior quarter.

NCOs decreased $30 million, primarily reflecting lower commercial charge-offs by $38 million. This variance resulted from the prior quarter, which included the resolution of a commercial relationship that resulted in a $71 million charge-off, partially offset by the previously mentioned commercial charge-off of $34 million in Q3 2026. NCO Ratio of 1.03% decreased 43 basis points quarter-over-quarter.

PB segment - NPLs held-in-portfolio decreased by $2 million, while inflows to NPLs, excluding consumer loans, decreased $11 million compared to the previous quarter. NCO Ratio of 0.03%, decreased five basis points during the quarter.

Refer to table L for a breakdown of Non-Performing Assets.

Allowance for loan losses ("ACL")

The ACL as of September 30, 2026 amounted to $771 million, a decrease of $14 million when compared to the second quarter of 2026. The decline was driven primarily by improved consumer credit performance, in part offset by higher reserves for specific commercial exposures.

BPPR segment - The ACL decreased by $11 million compared to the previous quarter, mostly driven by a $17 million decrease in reserves for consumer loans due to favorable changes in the credit composition of the auto and personal loans portfolios. These decreases were partially offset by higher reserves for commercial loans, mostly associated with C&I NPL inflows during the last two quarters, changes in macroeconomic scenarios and reserve build-up due to loan growth.

PB segment - The ACL amounted to $89 million, a decrease of $3 million quarter-over-quarter, reflecting lower reserves for construction loans by $2 million, mostly due to lower loan volumes.

Provision for credit losses

Provision for loan losses of $59 million for the third quarter of 2026 decreased by $6 million when compared to the prior quarter, primarily driven by lower reserve requirements in the PB segment and favorable changes in the macroeconomic scenarios. Including the provision for unfunded loan commitments and the provision related to the Corporation’s investment portfolio, the provision for credit losses for the third quarter was $59 million.

Refer to tables N, O, P and Q for more details on the Allowance for Credit Losses.

Total assets - Total assets of $77.8 billion decreased $1.2 billion from the second quarter of 2026, primarily due to a $1.5 billion decrease in money market and investment securities. The decrease resulted mainly from lower reinvestment of maturing U.S. Treasury securities in Q3 to fund scheduled P.R. public deposit outflows towards the end of the quarter. Loans held-in-portfolio increased $293 million, mainly due to an increase of $268 million in the BPPR segment across most portfolios and an increase of $25 million in the PB segment, primarily in commercial loans.

Total liabilities - Total liabilities decreased $1.0 billion from the second quarter of 2026, mainly reflecting a $1.5 billion decrease in deposits, including $1.2 billion in P.R. public deposits as a result of operational needs and scheduled payment commitments, coupled with a $188 million decrease in short-term borrowings due to lower FHLB advances at PB. This was partially offset by a $646 million increase in other liabilities, primarily from U.S. Treasury purchases pending to be settled at period end.

Stockholders’ equity - Stockholders' equity decreased $194 million when compared to the second quarter of 2026, mainly driven by $255 million in unrealized losses on debt securities available-for-sale ("AFS"), $179 million of common stock repurchases, and $57 million of common and preferred dividends declared. This was offset by $266 million of net income and $31 million of amortization of unrealized losses on securities previously reclassified to held-to-maturity ("HTM"), net of tax.

The Corporation maintained a diversified loan portfolio at September 30, 2026, with approximately 71% of loan balances in its main market of Puerto Rico and with 56% of its consolidated loan portfolio consisting of real estate-related loans, including residential mortgage loans, construction loans, commercial multi-family, and commercial loans secured by commercial real estate.

Popular, Inc.
Investor Relations:
Paul J. Cardillo, 212-417-6721
Senior Vice President and Investor Relations Officer
pcardillo@popular.com
or
Media Relations:
MC González Noguera, 917-804-5253
Executive Vice President and Chief Communications & Public Affairs Officer
mc.gonzalez@popular.com