Popular: 3 Key Takeaways for Long-Term Investors

On its third-quarter 2026 earnings call, held on Oct. 22, 2026, Popular (NASDAQ:BPOP) announced net income of $266 million. The bank is adjusting to slower loan expansion by disciplined capital repurchases. Higher yield pickups on maturing securities help protect net interest income.

Three things management said stand out.

1. Reinvesting Securities Yields a Significant Interest Rate Pickup

Management is continually rolling maturing lower-yielding Treasury notes into new multiyear securities at higher interest rates. This systematic reinvestment process provides a steady tailwind for net interest income, which is the net revenue earned from interest-bearing assets.

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.
-- Lidio V. Soriano, Executive Vice President and Chief Financial Officer

2. Account Fee Cuts Target Long-Term Customer Retention

The bank reclassified over a million retail accounts into a simpler deposit product designed to eliminate fees for active customers. The move trades short-term fee income for sticky, low-cost deposit balances.

In terms of the fee, what we did is we did reclassify over a million accounts into these new products... That resulted, I think, with a reduction in the quarter of around $2 million decrease in fee income.
-- Jorge Jose Garca, President and Chief Executive Officer

3. Full-Year Loan Growth Guidance Drops to Roughly 2%

Management lowered its loan expansion outlook due to slower auto financing demand and stricter discipline in commercial lending. Executive focus has shifted toward building complete customer banking relationships rather than chasing single-product loan volume.

We now expect full year loan growth for 2026 of approximately 2%, primarily reflecting lower auto and lease activity and more moderate commercial growth.
-- Lidio V. Soriano, Executive Vice President and Chief Financial Officer

Looking Ahead

Puerto Rico's local economic indicators reflect steady employment and expanding tourism. Popular relies on its dominant island market share and low-cost deposit franchise, while management watches pricing discipline and federal disaster-recovery spending.

Overall, Puerto Rico's economic environment is stable, supported by healthy employment, tourism, infrastructure investment, and private sector development.
-- Jorge Jose Garca, President and Chief Executive Officer

The institution aims for a return on average tangible common equity, a key measure of profitability on shareholder capital, of 14% to 17% annually. Management continues executing share buybacks to return capital.

We intend to be active participants in shaping what lies ahead. And not simply react to it.
-- Jorge Jose Garca, President and Chief Executive Officer

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