Popular (NASDAQ:BPOP) executives highlighted stronger profitability, solid loan growth, stable credit trends, and ongoing efficiency initiatives during the company’s full-year 2025 and fourth-quarter earnings call. Management also provided 2026 guidance that points to continued net interest income growth, modest expense increases, and a slightly slower pace of loan expansion compared to the past two years.
Full-year 2025 results and fourth-quarter performance
President and CEO Javier Ferrer said 2025 results reflected “the strength of our franchise” and what he described as continued stability in Puerto Rico’s economy. Popular reported full-year net income of $833 million, up $219 million, or 36%, versus 2024.
Loan growth, margin expansion, and 2026 net interest income outlook
Popular ended 2025 with total loan growth of $2.2 billion, representing a 6% increase. Ferrer said Banco Popular generated loan growth across most business segments, led by commercial loans, while Popular Bank achieved growth in commercial and construction loans.
CFO Jorge García reported fourth-quarter net interest income (NII) of $658 million, up $11 million from the third quarter. For the full year, NII increased $259 million, or 11%. Management pointed to higher loan balances, fixed-rate asset repricing in the investment portfolio, and lower deposit costs at both banks.
Fourth-quarter net interest margin expanded 10 basis points to 3.61% on a GAAP basis, while the fully tax-equivalent margin rose 13 basis points to 4.03%. García said the increase was driven by higher loan balances and lower interest expense, “primarily due to lower balances and costs of Puerto Rico public deposits.”
Loans grew $641 million in the quarter, with $497 million coming from BBPR (driven mainly by commercial and mortgage lending) and $144 million from Popular Bank (mainly commercial). For 2026, management guided to consolidated loan growth of 3%-4%. In response to analyst questions about the lower outlook compared with recent performance, management said it expects commercial and Puerto Rico mortgage lending to lead, but sees “softening” in consumer demand, particularly in auto, and emphasized the focus on pricing for profitable relationship-based growth in U.S. markets.
On 2026 NII, Popular guided to an increase of 5%-7%. García said the outlook is supported by continued reinvestment of lower-yielding securities and loan originations in the current rate environment, as well as lower costs of Puerto Rico public deposits and online deposits at Popular Bank. Executives said they expect margin expansion to continue during 2026, though at a smaller magnitude than in 2025 as the pace of portfolio yield pickup slows.
Deposits, investment portfolio positioning, and fee income expectations
Ending deposit balances decreased $323 million in the fourth quarter, and average deposit balances fell $880 million, largely due to expected outflows in Puerto Rico public deposits. Puerto Rico public deposits ended the quarter at $19.4 billion, down $662 million from the third quarter, with management continuing to expect a range of $18 billion-$20 billion.
Excluding Puerto Rico public deposits, BBPR ending balances increased $525 million, including $430 million of growth in commercial demand deposits. Total deposit costs declined 11 basis points at each bank; management cited lower repricing of Puerto Rico public deposits at BBPR and lower online savings costs and repricing of time deposits at Popular Bank.
On the investment portfolio, García said Popular continued reinvesting maturities into U.S. Treasury notes and bills. During the quarter, the company purchased about $900 million of Treasury notes, with a duration of 2.1 years and an average yield of around 3.56%, and expects to maintain a 2-3 year duration. Management also noted that roughly 30% of deposits in Puerto Rico require collateralization, which the company said keeps it active in buying investment securities even as it aims to increase the loan-to-deposit ratio over time.
Non-interest income was $166 million, down $5 million from the third quarter, and management said results were in line with the high end of guidance. For 2026, Popular expects quarterly non-interest income in a range of $160 million-$165 million. On the call, management noted that 2025 included about $10 million of “unusual items,” including a recovery for a prior-period tenant and refunds of federal taxes recognized in fee income.
Expenses, credit trends, and capital return strategy
Fourth-quarter operating expenses were $473 million, down $22 million from the third quarter. Excluding a partial reversal of the FDIC special assessment, expenses were $489 million. García said the largest quarter-over-quarter variance outside the FDIC item was a $13 million non-cash goodwill impairment recorded in the third quarter.
For 2026, Popular expects full-year GAAP expenses to rise by approximately 3% compared with 2025, as it continues to invest in people and technology. Executives described ongoing investments as part of a continuous effort to improve customer experience and productivity, noting that project costs can fluctuate as systems run in parallel near “go-live” timelines.
Credit metrics were described as stable. Chief Risk Officer Lidio Soriano said non-performing assets and loans declined $4 million in the quarter, and the ratio of non-performing loans to total loans held in portfolio fell 3 basis points to 1.27%. Net charge-offs were $50 million, or 51 basis points annualized, compared with $58 million, or 60 basis points, in the prior quarter. For full-year 2025, net charge-offs were 52 basis points, improving by 16 basis points from the prior year. For 2026, Popular expects annual net charge-offs of 55-70 basis points, with management noting the range reflects stable macro expectations while incorporating potential charge-offs tied to certain commercial relationships for which reserves have been established.
Popular also emphasized capital strength and shareholder returns. The company ended the year with a Common Equity Tier 1 ratio of 15.7%. Tangible book value per share was reported at $82.65 for year-end 2025, up 21% year-over-year, which management attributed primarily to lower unrealized losses on investment securities and net income, partially offset by dividends and buybacks. (García also cited tangible book value per share of $83.65 at the end of the quarter.)
Popular repurchased approximately $500 million of common stock during 2025 and about $148 million in the fourth quarter. Since resuming buybacks in the third quarter of 2024, the company has repurchased roughly $720 million of common stock. As of Dec. 31, Popular had $281 million remaining under its active repurchase authorization. Management said the fourth-quarter buyback level is viewed as a reasonable “run rate,” subject to market conditions, and reiterated the belief that shares are attractive at current prices.
In addition, Popular increased its quarterly common dividend by $0.05 to $0.75 per share in the fourth quarter, and García said the company expects to pursue another dividend increase later in 2026. Executives also discussed opportunities to optimize the capital structure, noting that Popular carries less additional Tier 1 capital than peers and views that as a potential lever over time.
On M&A, Ferrer said whole-bank acquisitions are “not a priority,” with management focused primarily on its transformation program. However, he said the company remains open in the U.S. to add-on opportunities for profitable niche businesses, teams, and assets, emphasizing a high threshold and criteria including core deposits, commercial-led strategy alignment, geographic fit, and cultural alignment.
About Popular (NASDAQ:BPOP)
Popular, Inc, headquartered in San Juan, Puerto Rico, is a financial holding company and a leading provider of banking services in the United States mainland and Puerto Rico. Through its primary subsidiaries—Banco Popular de Puerto Rico and Popular Bank—the company delivers comprehensive commercial and consumer banking solutions. It offers deposit products, lending facilities, cash management services and payment-processing solutions designed for individuals, small businesses and large corporations.
The company’s product suite encompasses checking and savings accounts, certificates of deposit, residential and commercial mortgage loans, business lines of credit and credit cards.
