Popular Inc Surpasses Expectations in Q3 2026: Strong Loan Growth and Stable Credit Trends Offset by Higher Operating Expenses
Popular Inc, the leading financial institution serving Puerto Rico, announced its quarterly results for Q3 2026, exceeding market expectations. The company's net income for the quarter stood at $266 million, with earnings per share (EPS) clocking in at $4.21. Although this represents a decrease of $0.14 per share from the previous quarter, it marks a significant increase of 34% compared to Q3 2025.
According to CEO Jorge GarcÃa, the results reflected higher net interest income and stable underlying credit trends, offset by higher operating expenses and lower non-interest income. The company's return on tangible common equity (ROTCE) was recorded at 15.8%, a slight decline from the previous quarter but still above the 13.1% reported in Q3 2025.
Notably, loans held in portfolio increased by $293 million during the quarter, driven primarily by growth in commercial and mortgage lending. However, total deposits decreased by $1.5 billion, mainly due to lower balances from public sector funds in Puerto Rico. Excluding these funds, customer balances dropped by approximately $289 million, consistent with seasonal trends.
Credit performance remained stable throughout the quarter, with net charge-offs declining from the previous period. Nevertheless, non-performing loans increased, largely due to a commercial relationship at BPPR being placed on non-accrual. Despite this, Popular's continued emphasis on prudent risk management has ensured that credit quality remains a key strength for the company.
The economic environment in Puerto Rico continues to be stable, with a healthy labor market and solid consumer spending driving growth. Total employment increased to approximately 1.26 million in September, its highest level of the year, as the labor force grew by roughly 24,000 people during the quarter while employment rose by 18,000 jobs.
CEO GarcÃa highlighted various key sectors contributing to Puerto Rico's economic stability, including tourism, construction activity, and private sector development. These areas have seen significant growth, with hotel occupancy reaching approximately 79% through August, cruise passenger arrivals increasing by 27%, and air passenger traffic remaining healthy despite a slight decline.
However, the company is monitoring affordability pressures resulting from inflation and higher energy costs. Despite these challenges, Popular Inc remains committed to its core objectives: being the number one bank for customers, maintaining simplicity and efficiency, and achieving top-performing status.
