Popular, Inc. Reports Strong First Quarter 2026 Results: Net Income Surges, Capital and Liquidity Strengthen
Key Financial Highlights
- Net Income: Popular, Inc. posted net income of \$245.7 million in Q1 2026, up from \$233.9 million in Q4 2025 and \$177.5 million in Q1 2025. Earnings per share (EPS) rose to \$3.78 from \$3.53 in the previous quarter and \$2.56 a year ago.
- Adjusted Net Income: Q1 2026 saw no non-GAAP adjustments, while Q4 2025’s adjusted net income was \$224.2 million (excluding a partial reversal of the FDIC special assessment reserve).
- Net Interest Income: Net interest income increased to \$670.2 million in Q1 2026, a rise of \$12.6 million quarter-over-quarter. The net interest margin improved to 3.66% from 3.61% (taxable equivalent basis: 4.14% vs 4.03%).
- Deposits: Total deposits grew by \$1.4 billion from Q4 2025 to \$67.6 billion, including a \$250.1 million increase in Puerto Rico (P.R.) public deposits.
- Loans and Securities: Average quarterly loan balances increased by \$434.9 million (excluding loans held-for-sale). Money market and investment securities rose by \$803.7 million, with average balances up \$959.4 million.
- Capital Actions: The company repurchased 1,155,398 shares for \$155.2 million at an average price of \$134.31 per share. \$126.0 million remains authorized for further repurchases. Quarterly dividend declared: \$0.75 per share.
- Return Metrics: Return on average tangible common equity (ROTCE) jumped to 15.46% from 14.39% in Q4 2025 and 11.36% in Q1 2025.
- Common Equity Tier 1 Ratio: CET1 improved to 15.92%, up from 15.72% last quarter.
- Tangible Book Value: Tangible book value per share rose to \$84.98, up \$2.33 from Q4 2025.
Management Commentary
Javier D. Ferrer, President and CEO, highlighted the quarter’s success: “Quarter-over-quarter results were driven by higher net interest income, expanding margins, and importantly, lower operating expenses. We returned \$204 million to shareholders through buybacks and dividends. Our diversified business model, robust capital and liquidity, and continued investment position us well to create long-term shareholder value.”
He emphasized the resilience of the Puerto Rico and U.S. economies, and the company’s focus on disciplined risk management amid evolving geopolitical and macroeconomic conditions.
Detailed Financial Results
- Interest Income: The increase in net interest income was driven mainly by reduced interest expense on deposits (down \$22.1 million), primarily due to lower costs of P.R. public deposits and lower deposit costs at Popular Bank. Higher income from U.S. Treasury securities (\$5.9 million) was supported by increased deposit balances (up \$1.1 billion).
- Loan Income: Loan income was slightly lower (\$7.7 million) due to two fewer days in the quarter, offset by higher average loan balances and improved yields in auto and credit card portfolios.
- Money Market Investments: Income from money market investments decreased by \$4.0 million due to lower yields after short-term rate cuts by the Federal Open Market Committee in late 2025.
- Operating Expenses: Personnel costs, business promotion, and professional fees declined quarter-over-quarter, reflecting seasonal trends and cost discipline. Technology and software expenses increased by \$3.0 million, driven by continued investment in transformation initiatives.
- Deposit Insurance: Deposit insurance expenses rose by \$15.9 million, reflecting the absence of the \$15.3 million FDIC special assessment reversal seen in Q4 2025.
- Credit Quality: Credit metrics remained stable. Provision for credit losses increased slightly to \$75.9 million (vs \$72.0 million in Q4 2025), with allowance for credit losses at 2.60% of loan portfolio.
Balance Sheet Strength
- Total Assets: Assets rose to \$76.1 billion, up \$782.8 million from Q4 2025.
- Investment Securities: Available-for-sale securities increased by \$1.2 billion, mainly U.S. Treasuries; held-to-maturity securities declined by \$365 million due to maturities and paydowns.
- Stockholders’ Equity: Equity increased by \$62.0 million, reflecting net income, amortization of unrealized losses, and offset by stock repurchases and dividends.
Shareholder-Focused Actions
- Share Repurchases: \$155.2 million spent on common stock buybacks; \$126.0 million remains authorized.
- Dividends: Quarterly dividend of \$0.75 per share, consistent with prior quarter and up from \$0.70 a year ago.
- Capital Ratios: CET1 at 15.92%, tangible common equity ratio at 7.29%. Tangible book value per share \$84.98.
Potential Price Sensitive Issues
- Strong Net Income and EPS Growth: The continued growth in net income and EPS, alongside improving ROTCE, is likely to be positively viewed by investors.
- Capital Management: Aggressive share buybacks and increased dividend payments signal management confidence and could drive share price appreciation.
- Deposit Growth and Liquidity: Significant growth in deposits and available liquidity enhances the company’s ability to fund lending and investments, supporting future profitability.
- Credit Quality: Stable credit metrics and adequate provisioning indicate prudent risk management, reducing downside risk.
- FDIC Assessment: The impact of FDIC special assessments has normalized, removing a prior headwind to earnings.
- Macroeconomic Outlook: Management’s optimistic outlook for Puerto Rico and U.S. economies, combined with disciplined risk management, positions Popular, Inc. for continued growth.
Investor Considerations
- Popular, Inc. remains the leading financial institution in Puerto Rico and ranks among the top 50 U.S. bank holding companies.
- With robust capital ratios, liquidity, and diversified business lines, Popular is well-positioned to navigate macroeconomic uncertainties and deliver sustainable shareholder returns.
- Ongoing investments in technology and operational enhancements signal a commitment to long-term competitiveness.
Conference Call
Popular, Inc. will hold a conference call on April 23, 2026 at 11:00 a.m. ET to discuss results and outlook. The webcast and replay are available on the Investor Relations section of the company’s website.
Contact Information
Disclaimer: This article is based on Popular, Inc.’s public earnings report for the first quarter of 2026. All forward-looking statements are subject to risks and uncertainties, including but not limited to competitive, economic, regulatory, and macroeconomic factors. Investors are advised to consult the company’s SEC filings and conduct their own analysis before making investment decisions. This is not investment advice.
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