Popular Second Quarter Profit Jumps 32%, US$1bn Buyback
Puerto Rico · Companies
Key Facts
—Net Income US$278 million, up 32% from US$210 million in Q2 2025
—Earnings Per Share Diluted EPS of US$4.35, compared to US$3.09 a year earlier
—Share Buyback New authorization of up to US$1.0 billion after exhausting a prior US$500 million plan
—CEO Transition Javier D. Ferrer retires August 31, 2026; CFO Jorge J. García becomes CEO September 1
—Capital Return Plans for a 20% dividend increase to US$0.90 per share, subject to board approval in Q4
Popular second quarter results showed a sharp 32% year-over-year increase in net income, as Puerto Rico’s largest financial institution benefited from a robust net interest margin and announced a new US$1 billion share repurchase program alongside a planned leadership transition.
Popular Second Quarter Results
Popular Inc (NASDAQ: BPOP) is the bank holding company for Banco Popular de Puerto Rico, the largest bank on the Caribbean island, which is a United States territory. For international investors unfamiliar with the institution, it also operates Banco Popular North America, with a significant presence in mainland U.S. states like New York, Florida, and New Jersey, as well as a substantial financial services operation in the U.S. Virgin Islands.
The bank is a dominant force in its home market, providing retail, commercial, and mortgage banking services. Because Puerto Rico uses the U.S. dollar and falls under U.S. federal banking regulations, Popular Inc offers foreign portfolio investors exposure to a U.S.-regulated asset without the direct mainland macroeconomic correlations, often driven by the specific dynamics of the Puerto Rican economy and its diaspora.
Profitability Surge and Net Interest Income
The company reported net income of US$278 million for the period ending June 30, 2026, a significant climb from the US$210 million recorded in the same quarter of the prior year. Diluted earnings per share (EPS) reached US$4.35, comfortably exceeding the US$3.09 figure from the second quarter of 2025.
Driving this performance was net interest income (NII), which stood at approximately US$693 million. The net interest margin (NIM) – a critical metric measuring the difference between interest income generated and interest paid out – came in at a healthy 3.66%. This indicates the bank successfully capitalized on the elevated interest rate environment to maximize lending profitability while managing deposit costs.
Capital Strength and Aggressive Shareholder Returns
Popular Inc showcased fortress-like capital levels. The Common Equity Tier 1 (CET1) capital ratio, a key measure of a bank’s financial strength, reached 16.08%. This ratio sits well above typical regulatory requirements, providing a massive buffer against potential credit losses and giving management significant flexibility to return capital to shareholders.
Reflecting this confidence, the board authorized a new common-stock repurchase program of up to US$1.0 billion. This new authorization came immediately after the company fully exhausted its prior US$500 million buyback plan. Management disclosed that it had already repurchased US$125 million of stock during the second quarter and expects to buy back an additional US$300 million to US$400 million during the remainder of 2026.
Beyond the buyback, the bank signaled a 20% increase in its quarterly common stock dividend to US$0.90 per share. This increase is subject to formal board approval and is expected to take effect in the fourth quarter of 2026. The return on average tangible common equity (ROTCE), a preferred profitability gauge for banks, hit 17.02%.
Leadership Transition: Ferrer Retires, García Takes Helm
The strong financial results coincide with a major leadership change at the top. Javier D. Ferrer, who has led the institution, will retire effective August 31, 2026. His departure marks the end of a tenure that navigated the bank through Puerto Rico’s complex economic restructuring and post-pandemic recovery.
The incoming President and Chief Executive Officer is Jorge J. García, who currently serves as the company’s Chief Financial Officer. His appointment is effective September 1, 2026. This internal succession suggests a continuity of strategy, as García has been intimately involved in the capital allocation framework that produced the current elevated shareholder returns.
Strategic Outlook and Credit Quality
Looking ahead, management raised its annual return on tangible common equity target range to between 14% and 17%, signaling confidence that the high profitability levels are sustainable through economic cycles. The bank’s forward guidance emphasizes a focus on delivering sustainable, through-the-cycle shareholder returns.
While the earnings power remains robust, management noted mixed credit quality metrics during the quarter. However, the overall tone regarding asset quality remained solid, suggesting that any deterioration is contained and manageable within the bank’s strong provisioning and capital framework. The combination of the US$1 billion buyback and the dividend hike underscores a strategic priority to distribute excess capital efficiently to investors.
Frequently Asked Questions
What is Popular Inc and where does it operate?
Popular Inc is the parent company of Banco Popular de Puerto Rico, the largest bank in Puerto Rico. It also operates Banco Popular North America in mainland U.S. states like New York and Florida, and provides financial services in the U.S. Virgin Islands.
How much did Popular Inc’s net income grow in the second quarter?
Net income grew 32% year-over-year to US$278 million, up from US$210 million in the second quarter of 2025. Diluted earnings per share rose to US$4.35 from US$3.09.
Who is the new CEO of Popular Inc?
Jorge J. García, the current Chief Financial Officer, will become President and CEO on September 1, 2026. He succeeds Javier D. Ferrer, who is retiring effective August 31, 2026.
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