Popular, Inc. (NASDAQ:BPOP) closed its 2025 fiscal year with a fourth-quarter earnings report that delivered a significant bottom-line beat, though the market's initial reaction appeared muted as investors digested the results against a complex operational backdrop.
The Puerto Rico-based financial holding company reported net income applicable to common stock of $233.5 million, or $3.53 per diluted share, for the quarter ended December 31, 2025. This represents a solid increase from the $2.51 per share reported in the same quarter last year and notably surpassed the analyst consensus estimate of $3.08 per share. On an adjusted basis, which excludes a partial reversal of an FDIC special assessment reserve, earnings per share were $3.38.
Revenue Performance vs. Estimates
Total revenue, defined as net interest income plus non-interest income, reached $823.8 million for the quarter. This figure not only exceeded the analyst sales estimate of approximately $713.4 million but also demonstrated robust year-over-year growth. The strong top-line performance was primarily fueled by expansion in the company's core banking business.
- Reported Revenue: $823.8 million
- Analyst Estimate: ~$713.4 million
- Variance: Beat by approximately 15.5%
The revenue strength was driven by higher net interest income, which climbed to $657.6 million from $646.5 million in the prior quarter. Management cited lower deposit costs, particularly on Puerto Rico public deposits, and solid loan growth across commercial and mortgage portfolios as key contributors.
Market Reaction and Price Action
Despite the clear earnings and revenue beats, the stock's immediate reaction was subdued. In pre-market trading following the release, shares of Popular Inc. were up approximately 2.95%. However, this positive momentum follows a period of slight weakness, with the stock down about 2.4% over the past month. The tempered reaction may reflect investor focus on several mixed signals within the otherwise strong report, including a slight increase in the allowance for credit losses and ongoing economic uncertainty. It suggests the market is weighing the strong profitability against the forward-looking credit environment and the impact of shifting interest rates.
Key Highlights from the Quarterly Report
Beyond the headline numbers, the fourth-quarter press release outlined several important developments for Popular:
- Strong Full-Year Growth: For the full year 2025, Popular reported net income of $833.2 million, a 36% increase over 2024. The company achieved a return on tangible common equity (ROTCE) of 13% for the year, progressing toward its stated 14% objective.
- Net Interest Margin Expansion: The consolidated net interest margin (NIM) improved to 3.61%, a 10 basis-point increase from the third quarter. This was largely due to a reduction in the cost of deposits.
- Credit Quality and Provisioning: Credit metrics remained relatively stable. Non-performing loans decreased slightly to $498.3 million. The provision for credit losses was $72.0 million, down from $75.1 million in Q3. However, the allowance for credit losses increased to $808.1 million, reflecting loan growth and specific reserves.
- Capital Management: The company actively returned capital to shareholders, repurchasing $147.8 million worth of common stock during the quarter. The Common Equity Tier 1 (CET1) ratio remained strong at 15.72%.
Looking Ahead
While the press release did not provide specific quantitative financial guidance for 2026, CEO Javier D. Ferrer expressed optimism, stating the company is "moving full speed ahead" with its strategic framework and is focused on improving productivity and reducing costs. The company's commentary about building on positive momentum will be measured against analyst expectations for the coming year.
Analysts currently estimate revenue of approximately $720.1 million for the first quarter of 2026, with full-year 2026 sales projected around $2.91 billion. Investors will monitor Popular's ability to sustain its net interest margin and manage credit costs in the evolving economic landscape to meet these expectations.
For a detailed breakdown of future earnings estimates and historical performance, you can review Popular Inc.'s earnings and estimates page here.
Disclaimer: This article is for informational purposes only and is not intended as investment advice. The analysis is based on publicly available data and earnings materials. Investors should conduct their own research and consider their individual financial circumstances before making any investment decisions.
