DEF: Popular, Inc. Reports Robust 2025 Performance, New CEO

Popular, Inc. announces strong 2025 financial results, strategic advancements, and a new CEO, Javier D. Ferrer, ahead of its 2026 Annual Meeting of Shareholders.

Summary

• Popular, Inc. reported GAAP net income of $833.1 million for 2025, a significant increase from $614.2 million in 2024.
• Adjusted net income for 2025, excluding a partial reversal of the FDIC special assessment reserve, was $823.5 million, representing a 27% increase year-over-year.
• The loan portfolio grew by $2.2 billion, or 6%, to $39.3 billion, driven by commercial, construction, and mortgage loans.
• Year-end deposits reached $66.1 billion, an increase of $1.3 billion, or 2%, mainly from higher commercial and time deposits.
• The Corporation maintained a robust Common Equity Tier 1 ratio of 15.7% and achieved a tangible book value per share of $82.65, up 21.3% from 2024.
• Return on tangible common equity (ROTCE) for 2025 was 13%, with a long-term goal of 14%.
• Popular's stock closed 2025 at $124.52, a 32% increase, outperforming the Nasdaq Composite, KBW Nasdaq Regional Banking Index, and Nasdaq Bank Index.
• A new strategic framework was launched, focusing on being the #1 bank for customers, simple and efficient, and a top-performing bank.
• Significant progress was made in the multi-year Transformation initiative, including a new fully digital consumer credit origination platform and technology modernization.
• The company repurchased approximately 4.6 million shares for $502 million and increased its quarterly common stock dividend from $0.70 to $0.75 per share.
• Shareholders will vote on the election of 11 directors, an advisory vote on executive compensation, ratification of PricewaterhouseCoopers LLP as independent auditors, and amendments to the Restated Certificate of Incorporation for modernized indemnification and director/officer exculpation.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing as highly positive, reflecting strong financial performance, successful strategic execution, and significant shareholder returns, despite some minor operational delays and an increase in non-performing loans.

Positives

• GAAP net income increased to $833.1 million in 2025 from $614.2 million in 2024.
• Adjusted net income for 2025 was $823.5 million, a 27% increase over the previous year.
• The loan portfolio grew by $2.2 billion (6%) to $39.3 billion, with growth across most business segments.
• Deposits increased by $1.3 billion (2%) to $66.1 billion, driven by commercial and time deposits.
• The Common Equity Tier 1 ratio remained robust at 15.7% at year-end.
• Tangible book value per share increased by 21.3% to $82.65 from 2024.
• Return on tangible common equity (ROTCE) reached 13% for the year.
• Popular's stock price increased by 32% to $124.52, outperforming the Nasdaq Composite (20%), KBW Nasdaq Regional Banking Index (4%), and Nasdaq Bank Index (3%).
• Net interest income and operating income increased, while provisions for credit losses decreased.
• A new consumer credit origination platform was launched in Puerto Rico and the Virgin Islands, offering a fully digital process.
• Efficiency initiatives included exiting the U.S. mortgage business and optimizing mortgage servicing operations in Puerto Rico.
• The Corporation repurchased approximately 4.6 million shares for $502 million and announced a new $500 million repurchase program.
• The quarterly common stock dividend was increased from $0.70 to $0.75 per share.
• The Employee Loyalty score remained stable at 81%, exceeding the Qualtrics global benchmark and the financial industry average.
• Rating agencies upgraded the outlook on Popular's senior unsecured ratings to positive.

Negatives

• Operating expenses increased due to continued investment in people and technology, though they were below expectations due to efficiency efforts and delayed investments.
• The non-performing loan ratio increased to 1.27% in 2025 from 0.95% in 2024, primarily driven by two unrelated commercial loans totaling $188 million.
• Puerto Rico public sector deposits saw a reduction due to outflows to fulfill scheduled government obligations and operational needs.

Risks

• The effect of competitive and economic factors, and the Corporation's reaction to those factors.
• The adequacy of the allowance for loan losses and delinquency trends.
• Market risk and the impact of interest rate changes, including on the cost of deposits.
• The ability to attract deposits and grow the loan portfolio.
• Capital market conditions, capital adequacy, and liquidity.
• The effect of legal and regulatory proceedings.
• New regulatory requirements or accounting standards on the Corporation's financial condition and results of operations.
• The occurrence of unforeseen or catastrophic events, such as extreme weather events, pandemics, man-made disasters, or acts of violence or war, and governmental responses thereto.
• The ability to successfully execute the Transformation initiative, including achieving projected earnings, efficiencies, and return on tangible common equity, and accurately anticipating associated costs and expenses.
• The ability to execute capital actions, including share repurchases and dividends.
• The imposition of additional or special FDIC assessments, or increases thereto.
• Changes to regulatory capital, liquidity, and resolution-related requirements applicable to financial institutions in response to recent banking sector developments.
• The impact of bank failures or adverse developments at other banks and related negative media coverage of the banking industry in general on investor and depositor sentiment.
• The impact of any future U.S. government shutdown and changes in and uncertainty regarding federal funding, tax, and trade policies.
• Rulemaking, supervision, examination, and enforcement priorities of the federal administration.
• Risks related to the composition and structure of the Board and its committees.
• Environmental risks, including risks pertaining to climate change.
• Emerging technology risks, including risks relating to artificial intelligence.

Future Outlook

Popular is optimistic about its prospects for the year, committed to its new strategic framework centered on being the #1 bank for customers, simple and efficient, and a top-performing bank. The Corporation will continue its multi-year Transformation, investing in technology, talent, and digital capabilities to provide personalized services, increase employee performance, and generate sustainable profitable growth. The long-term goal is to achieve a sustainable Return on Tangible Common Equity (ROTCE) of 14%.

Management Comments

• "In 2025, Popular sustained its momentum, building on the foundation laid in previous years and advancing key strategic initiatives. The team's dedication resulted in robust financial performance, meaningful returns to shareholders and steadfast progress in our multi-year Transformation." Richard L. Carrín, Chairman of the Board.
• "Javier's leadership marks an exciting new chapter for Popular, and we are confident that his vision and dedication will further drive Popular's growth and Transformation." Richard L. Carrín, Chairman of the Board.
• "2025 was an excellent year for Popular, reflecting the strength of our franchise and the work of our team across the organization. We delivered strong financial results, continued advancing our strategic priorities and executed significant capital actions for our shareholders." Javier D. Ferrer, President & Chief Executive Officer.
• "Looking ahead, we are optimistic about Popular's prospects for the year. We will continue to work with a strong sense of purpose to make a meaningful difference in the lives of our customers, colleagues and communities, and deliver sustained value to you, our shareholders." Javier D. Ferrer, President & Chief Executive Officer.

Industry Context

StockSavvy.ai notes that Popular, Inc.'s 32% stock price increase in 2025 significantly outperformed the broader market and regional banking indices, including the Nasdaq Composite (20%), KBW Nasdaq Regional Banking Index (4%), and Nasdaq Bank Index (3%). This outperformance suggests strong investor confidence in Popular's strategic execution and financial health, particularly given the general banking sector's challenges and regulatory changes highlighted in the filing's risk factors.

Comparison to Industry Standards

• Popular's 32% stock price increase in 2025 significantly outperformed the Nasdaq Composite (20%), the KBW Nasdaq Regional Banking Index (4%), and the Nasdaq Bank Index (3%) in the same period.
• The 3-year Total Shareholder Return (TSR) for the 2023-2025 performance cycle ranked at the 97.5th percentile (2nd out of 42 comparator banks) relative to an industry index of U.S. banks with assets between $25 billion and $500 billion.
• Popular's Employee Loyalty score of 81% is higher than the Qualtrics global benchmark and above the average benchmark of the financial industry.
• The proposed amendments to the Restated Certificate of Incorporation regarding indemnification and director/officer exculpation aim to align with the current practice of other financial institutions and are commonplace among U.S. companies, particularly those incorporated in Delaware.

Management Changes

Corporate Governance

Related Party Transactions

• Popular and its subsidiaries contributed approximately $1.1 million to Fundacion Banco Popular (BPPR Foundation) through employee contribution matching in 2025, plus an additional $1.0 million, and provided $1.6 million in human and operational resources. Mr. Carrín, Mr. Ferrer, Mr. Negrón, and Ms. Burckhart are members of its Board of Trustees.
• Popular Bank contributed approximately $234,000 to the Popular Foundation (New York) through employee contribution matching in 2025, and provided $103,000 in human resources. Mr. Carrín, Mr. Chinea, Mr. Ferrer, and Mr. Negrón are members of its Board of Directors.
• A daughter of former CEO Ignacio Alvarez was employed as Counsel in the Legal Division, receiving approximately $136,500 in compensation during fiscal year 2025, which was approved and ratified by the Audit Committee.
• An entity indirectly owned by Ms. Ferr Rangel and her siblings (the Contracted Entity) has a contract with BPPR to provide call center services, with an estimated total amount of approximately $862,000 for the current one-year term. BPPR paid approximately $817,000 in 2025.
• Popular donated $155,000 in 2025 to the Luis A. Ferr Foundation, Inc. (LAF Foundation), a non-profit organization where Ms. Ferr Rangel serves as President and Trustee. This includes annual donations of $80,000 for facility repairs and $75,000 for educational programs over a five-year period.
• Related parties of Mr. Ballester have five outstanding commercial loans from BPPR (acquired from Westernbank in 2010) with an aggregate outstanding balance of approximately $27.0 million as of December 31, 2025. These loans were restructured and extended until November 2027, with interest rates of 5.25% for Notes A ($13.5 million) and 1% for Notes B ($13.5 million).
• An entity in which Mr. Carrín has an ownership interest (23.32%) and his sister has a 21.5% participation, has a commercial loan from Popular (refinanced in 2017 and 2021) with an outstanding balance of approximately $29.8 million as of December 31, 2025, at an interest rate of 4.50% and maturity date of December 2026.

Stakeholder Impact

• Shareholders received meaningful returns through a 32% stock price increase, increased quarterly dividends ($0.75/share), and significant share repurchases ($502 million). Proposed amendments to indemnification and exculpation aim to protect directors and officers, which could indirectly benefit shareholders by attracting and retaining strong leadership.
• Employees benefited from investments in human capital, including improved tools for performance conversations, leadership development programs, a new fitness center, and expanded mental health support. The Employee Loyalty score of 81% indicates high engagement. A profit-sharing incentive of $40 million was approved.
• Customers benefited from the modernization of customer channels, a new fully digital consumer credit origination platform, and investments in physical retail networks and digital channels for an exceptional experience. The new strategic framework aims to make Popular the #1 bank for customers.
• Communities received approximately $13.5 million in social investment through foundations and corporate donations for education, financial inclusion, and entrepreneurship in Puerto Rico, the U.S. mainland, and the Virgin Islands. Approximately $505,000 was allocated to environmental initiatives.
• Directors and Officers are impacted by proposed amendments to the Restated Certificate of Incorporation, which aim to modernize indemnification provisions and provide for director and officer exculpation, enhancing the ability to attract and retain qualified individuals by limiting personal liability for certain fiduciary duty breaches.

Next Steps

• Shareholders will consider the election of 11 candidates to the Board of Directors for a one-year term at the 2026 Annual Meeting.
• Shareholders will vote on an advisory basis to approve executive compensation.
• Shareholders will ratify the appointment of PricewaterhouseCoopers LLP as independent registered public accountants for 2026.
• Shareholders will consider amendments to Popular's Restated Certificate of Incorporation to modernize indemnification provisions and provide for director and officer exculpation.
• The Corporation will continue to work with a strong sense of purpose to make a meaningful difference in the lives of customers, colleagues, and communities.
• The Corporation will continue to deliver sustained value to shareholders.
• The 2025 Corporate Sustainability Report is expected to be published during the second quarter of 2026.
• Changes to the Executive Compensation Program for 2026 will be implemented, including increased base salaries and long-term incentive opportunities for NEOs, and an accelerated payout scale for corporate financial goals in short-term incentives.

Key Dates

Recommendation

Popular, Inc. demonstrated exceptional financial performance in 2025, with significant increases in net income, loan and deposit growth, and a robust capital position. The 32% stock price appreciation, outperforming key industry benchmarks, coupled with increased dividends and substantial share repurchases, signals strong shareholder value creation. The ongoing multi-year Transformation and new strategic framework position the company for continued growth and efficiency. While there was a slight increase in the non-performing loan ratio and some delayed investments, the overall trajectory and management's proactive measures warrant a strong buy recommendation for long-term investors.

Keywords

Popular Inc, SEC Filing, Proxy Statement, Financial Results, Banking, Puerto Rico, Financial Performance, Corporate Governance, Executive Compensation, Risk Management, Strategic Initiatives, Transformation, Loan Growth, Deposit Growth, Shareholder Returns, Dividends, Share Repurchase, CEO Transition, Indemnification, Exculpation, PricewaterhouseCoopers LLP, Nasdaq Bank Index, ROTCE, Net Income, Common Equity Tier 1, Tangible Book Value, Digital Transformation, Financial Inclusion, Environmental Initiatives, Human Capital