Popular (BPOP) investor relations material

Executive summary

• Net income for 2025 reached $833 million, up 36% year-over-year, with Q4 net income at $234 million and EPS of $3.53, driven by higher net interest income, margin expansion, strong loan growth, and lower expenses.

• Adjusted net income for 2025 was $823 million, excluding a partial FDIC special assessment reserve.

• Loans held in portfolio grew 6% year-over-year to $39.3 billion, led by commercial, construction, and mortgage loans, with stable credit quality and net charge-offs decreasing to 52 basis points.

• Tangible book value per share increased 21% year-over-year to $82.65, supported by lower unrealized losses and net income, despite capital returns.

• The Puerto Rico economy remains robust, with record airport traffic, strong consumer spending, and healthy construction and tourism sectors.

Financial highlights

• Net interest income for the year rose 11% ($259 million), with Q4 NII at $657.6 million, up $11 million sequentially, driven by higher loan balances and lower deposit costs.

• Net interest margin for 2025 was 3.49%, up 25 bps year-over-year; Q4 NIM was 3.61%, up 10 bps sequentially.

• Non-interest income for Q4 was $166 million, slightly down from Q3 but at the high end of guidance.

• Operating expenses for Q4 were $473 million, down $22 million from Q3; full-year GAAP expenses rose 2.5%, below the 4% guidance.

• Effective tax rate for 2025 was 17%, down from 23% last year, due to higher exempt income.

Outlook and guidance

• 2026 consolidated loan growth expected at 3%-4%, with NII projected to increase 5%-7%.

• Quarterly non-interest income expected in the $160 million-$165 million range.

• Full-year GAAP expenses anticipated to rise by about 3% in 2026.

• Effective tax rate for 2026 expected between 15%-17%.

• Annual net charge-offs forecasted at 55-70 basis points, reflecting stable credit quality and some provision for larger commercial relationships.

• ROTCE target remains a sustainable 14%.