Popular (NASDAQ:BPOP) reported fourth-quarter net income of $233.9 million on Tuesday, capping an "excellent" 2025 as the financial institution benefited from higher interest rates and a resilient local economy.
The Hato Rey-based bank posted earnings of $3.53 per share, or $3.38 on an adjusted basis, handily beating the $3.02 consensus estimate from Zacks Investment Research.
The bank's performance was anchored by a significant expansion in net interest income, which reached $657.6 million for the quarter.
Net interest margin improved to 3.61% as the lender effectively managed deposit costs while reaping higher yields from its $39.3 billion loan portfolio.
For the full year, Popular reported a profit of $833.2 million, a massive leap from the $614.2 million recorded in 2024.
Non-performing loans dropped to 1.27% of total loans, a trend that recently prompted S&P Global Ratings to revise the bank's outlook to "positive."
Popular is also leaning into shareholder returns, repurchasing 1.25 million shares for $147.8 million during the quarter and maintaining a quarterly dividend of $0.75 per share.
With a Common Equity Tier 1 ratio of 15.72%, the bank remains well-capitalized to navigate any potential economic shifts in 2026.
As federal relief funds continue to flow into Puerto Rico's infrastructure, Popular's dominant 40% market share in deposits positions it as the primary beneficiary of the island's ongoing modernization.