Popular, Inc. BPOP reported second-quarter 2026 earnings per share of $4.35, which surpassed the Zacks Consensus Estimate of $3.69. The bottom line compared favorably with $3.09 in the year-ago quarter.
The results benefited from higher net interest income (NII), strong fee income growth and rising loan and deposit balances. Lower operating expenses on a year-over-year basis were also encouraging. However, higher provisions and net charge-offs were headwinds.
The company’s net income (GAAP basis) came in at $278.2 million, which rose 32.2% year over year.
Popular’s Revenues Rise & Expenses Decline Y/Y
Total quarterly revenues were $874 million, rising 9.2% from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $842.3 million.
Quarterly NII was $693.4 million, up 9.8% year over year. Also, net interest margin (non-taxable equivalent basis) expanded 17 basis points to 3.66%.
Non-interest income increased 7.2% year over year to $180.5 million. The rise was primarily driven by increases in banking fees, asset management and insurance fees, mortgage banking activities and other operating income.
Total operating expenses decreased 1.8% year over year to $484.1 million. The decline primarily stemmed from decreases in professional fees, transactional services, net occupancy and other operating expenses, partly offset by higher technology and software expenses and business promotion costs.
BPOP’s Loans & Deposits Rise Sequentially
As of June 30, 2026, total loans held-in-portfolio increased 1.2% on a sequential basis to $39.7 billion. The rise was mainly driven by growth across commercial, construction and mortgage loans.
Total deposits were $70.2 billion, up 3.9% from the previous quarter. The increase included a $3 billion rise in Puerto Rico public deposits.
Popular’s Credit Quality Deteriorates
In the second quarter of 2026, Popular recorded a provision for credit losses of $65.9 million, up 34.6% from the prior-year quarter.
As of June 30, 2026, non-performing assets were $546.7 million, which increased 52.8% year over year. Non-performing loans held-in-portfolio were $413.4 million, up 32.7% year over year.
The non-performing loan ratio was 1.04% compared with 0.82% in the year-ago quarter. The net charge-off ratio increased to 1.05% from 0.45%.
BPOP’s Capital & Profitability Ratios Improve
As of June 30, 2026, the Common Equity Tier 1 capital ratio and the Tier 1 capital ratio were 16.08% and 16.13%, respectively, up from 15.91% and 15.96% in the year-ago quarter.
The return on average assets was 1.41%, up from 1.11% a year earlier. Return on average tangible common equity increased to 17.02% from 13.26%.
Popular’s Share Repurchase Update
In the reported quarter, the company repurchased 833,369 shares of common stock for $125 million at an average price of $150.36 per share.
The company fully utilized its prior $500 million authorization and announced a new common stock repurchase authorization of up to $1 billion. It also announced a planned 20% increase in the quarterly common stock dividend to 90 cents per share from 75 cents, effective in the fourth quarter of 2026, subject to board approval.
Our View on BPOP
Higher NII, solid fee income generation and continued loan and deposit growth are likely to support Popular's financial performance. The company's strong capital position, robust capital return initiatives and improving profitability ratios are also encouraging. However, elevated net charge-offs, higher credit loss provisions and deteriorating asset quality remain concerns.
Popular, Inc. Price, Consensus and EPS Surprise
Popular, Inc. price-consensus-eps-surprise-chart | Popular, Inc. Quote
Currently, Popular carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of BPOP’s Peers
Hancock Whitney Corp.’s HWC second-quarter 2026 earnings per share of $1.55 matched the Zacks Consensus Estimate. The bottom line rose 17.4% from the prior-year quarter.
HWC’s results were supported by higher net interest income and non-interest income, along with a decline in provisions. Also, a sequential increase in loans and deposit balances was positive. However, higher expenses were the undermining factor.
F.N.B. Corporation FNB reported second-quarter 2026 earnings of 42 cents per share, which matched the Zacks Consensus Estimate. The bottom line jumped 16.7% year over year.
FNB’s results primarily benefited from higher NII, a rise in non-interest income and lower provisions. Higher average loans and deposits were other positives. However, higher non-interest expenses hurt the results to some extent.
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This article originally published on Zacks Investment Research (zacks.com).