Popular (BPOP) Q3 2025 earnings summary

Executive summary

• Net income for Q3 2025 was $211.3 million, up $56.0 million year-over-year and slightly from Q2, with EPS of $3.15, driven by higher net interest income and margin expansion, partially offset by increased operating expenses.

• Results were supported by strong loan growth in both markets, stable customer deposit balances, and disciplined expense management.

• Credit quality was impacted by two large unrelated commercial exposures, raising NPLs by $188–$190 million and NPL ratio to 1.30%, but underlying portfolio quality remains stable.

• The company continues to progress toward its long-term 14% ROCI objective, exceeding 13% for the second consecutive quarter.

• Total assets reached $75.1 billion, with stockholders’ equity at $6.1 billion and tangible book value per share at $79.12.

Financial highlights

• Net interest income rose to $647 million, up $15 million sequentially and $74 million year-over-year, with net interest margin expanding to 3.51%.

• Non-interest income was $171 million, up from Q2, aided by a $5 million retroactive lease payment.

• Total operating expenses were $495 million, up $2.5–$3 million, including a $13 million non-cash goodwill impairment and cost efficiency actions.

• Effective tax rate for Q3 was 14.5%, down from 18.5% in Q2, with Q4 expected at 14–16% and full-year 2025 at 16–18%.

• Return on assets was 1.09% and return on common equity was 11.60% for Q3 2025.

Outlook and guidance

• Loan growth for 2025 is expected at 4–5%, up from original guidance.

• Net interest income growth for 2025 is projected at 10–11%.

• Q4 non-interest income expected between $160–$165 million; full-year non-interest income between $650–$655 million.

• Full-year net charge-offs expected between 50–65 basis points, reflecting potential further charge-offs on specific exposures.

• Management remains cautious due to economic uncertainty and potential volatility in Puerto Rico’s fiscal environment.