📢 What This Document Is

This filing is an SEC Form 8-K, which is a report used to announce major, unscheduled corporate events. In this case, it serves as the primary release for Popular, Inc.'s financial results for the first quarter of 2026 (Q1 2026). The document provides a detailed breakdown of the bank's performance compared to the previous quarter (Q4 2025) and the same period last year (Q1 2025).

👉 Why it matters: This report is critical because it shows investors and analysts exactly how the bank performed recently, helping determine if the company is healthy, growing, or facing risks.

🏦 Who is Popular, Inc.?

Popular, Inc. is a major financial institution primarily focused on Puerto Rico. It is significant enough to rank among the top 50 U.S. bank holding companies by assets. Founded in 1893, the bank operates a diversified model across several regions.

👉 In simple terms: Popular is a full-service bank that offers retail, commercial, and mortgage services in Puerto Rico and the U.S. (through Popular Bank in New York, New Jersey, and Florida). They also offer related services like auto leasing, equipment financing, and insurance.

📈 Headline Financial Performance for Q1 2026

Overall, Popular reported a strong start to 2026. The headline figures show year-over-year growth in profitability and a healthy operational increase.

• Net Income: The bank reported net income of $245.7 million for Q1 2026. This was up from $233.9 million in the prior quarter (Q4 2025), indicating sustained profitability.
• Earnings Per Share (EPS): Diluted EPS was $3.78 in Q1 2026, which is notably higher than the $3.53 reported in Q4 2025.
• Performance Momentum: CEO Javier D. Ferrer highlighted that these results reflected "disciplined execution across our businesses and continued momentum throughout the franchise," suggesting management is executing its plan effectively.

💸 Interest Income Story

The primary source of revenue for Popular is typically net interest income (NII)—the difference between the interest the bank earns on loans and the interest it pays out on deposits.

• Net Interest Income (NII): NII for Q1 2026 was $670.2 million, marking an increase of $12.6 million compared to Q4 2025.
• Net Interest Margin (NIM): The overall net interest margin was 3.66% in Q1 2026, an improvement from 3.61% in Q4 2025. This shows the bank's ability to maintain strong pricing power over its lending activities.
• Non-Interest Income: Total non-interest income for the quarter was $165.6 million. Although this was slightly down by $0.7 million compared to $166.3 million in Q4 2025, it remains a substantial secondary revenue stream.

📉 Controlling Operating Costs

A key driver of the strong quarterly results was managing expenses. The bank successfully lowered its operational spending, which boosted the bottom line.

• Operating Expenses (OpEx): Total operating expenses were $467.3 million, a decrease of $5.9 million compared to the $473.2 million recorded in Q4 2025.
• Cost Management: Excluding the unusual partial reversal of the FDIC special assessment reserve, operating expenses saw a more significant decrease of $21.2 million compared to Q4 2025.
• Return on Equity: The Return on Average Tangible Common Equity (ROTCE) improved to 15.46% in Q1 2026 (up from 14.39% in Q4 2025), demonstrating that every dollar of capital is generating a higher return.

🏦 Balance Sheet Strength and Deposits

The bank maintained robust liquidity and continued to grow its deposit base, which is the bedrock of its lending capacity.

• Total Deposits: The total deposit base reached $67.6 billion, an increase of $1.4 billion from Q4 2025.
• Growth Drivers: The growth included a significant increase in P.R. public deposits, which grew by $250.1 million. Excluding these public deposits, the total deposit increase was still $1.2 billion.
• Loan Portfolio: Loans held-in-portfolio (excluding those held-for-sale) totaled $39.3 billion, a small decrease of $37.8 million from the previous quarter.

🛡️ Credit Quality and Risk Management

Managing risk is essential for any bank. This section details how the bank is performing relative to the risks inherent in its loan portfolio.

• Non-Performing Loans (NPLs): Total NPLs decreased by $40.2 million. This signals that the bank is successfully managing its highest-risk loans.
• NPL Ratio: The NPLs to loans ratio dropped to 1.17% from 1.27% in Q4 2025, a favorable sign of improving credit quality.
• Allowance for Credit Losses (ACL): The ACL to loans held-in-portfolio improved to 2.10% (from 2.05% in Q4 2025). This is the buffer the bank keeps aside to cover potential loan defaults.
• Net Charge-offs (NCOs): Total net charge-offs increased to $60.0 million, driven largely by a single $11.1 million commercial loan charge-off (a loan that went from non-accrual to charged-off status). This indicates specific, isolated credit events.

💰 Shareholder Returns and Capital Stability

The bank remains committed to returning capital to its owners while maintaining a large buffer of regulatory capital.

• Capital Strength: The Common Equity Tier 1 ratio remained high at 15.92%. This ratio is a key measure of financial stability, showing the bank has strong capital reserves relative to its risk-weighted assets.
• Shareholder Payments: The company executed capital actions including the repurchase of 1,155,398 shares of common stock for $155.2 million and declared a quarterly common stock dividend of $0.75 per share.
• Dividends and Buybacks: CEO Ferrer stated that the company returned $204 million to shareholders through buybacks and dividends, highlighting the commitment to value creation.

📈 Segment-Specific Operational Trends

Popular operates across various segments (Commercial, Mortgage, Consumer, etc.). The quarterly figures show specific trends in lending and deposit generation across these areas.

• Commercial Loans: Total Commercial loans grew to $19.7 billion (Total Commercial loans held-in-portfolio). The bank showed growth in key sub-segments like Commercial real estate owner-occupied, which saw an 1.88% increase.
• Consumer Loans: Total Consumer loans held-in-portfolio increased to $7.1 billion (up 1.02% over the prior quarter). The highest weighted segments remained Personal loans and Auto loans.
• Deposit Growth (Non-PR): Ex-P.R. public deposits saw stable growth, with the total deposits excluding P.R. public deposits increasing by $1.2 billion.

🗣️ Management's Strategic Outlook

Management provided a clear, confident message regarding the future stability and growth potential of the company.

• Resilience Focus: CEO Javier D. Ferrer stated, “The Puerto Rico and United States economies remained resilient, with healthy business performance and consumer activity.” This commentary underscores the bank's view of the current macroeconomic environment.
• Strategic Goal: The CEO noted the company’s goal is to reach a "sustainable, through-the-cycle, 14% objective" for ROTCE. Achieving 15.5% in Q1 2026 is described as a "meaningful step forward" toward this long-term goal.
• Investment Stance: The bank confirmed its commitment to investment, stating, “We continue to invest in our businesses and expand our operational capabilities in support of our strategic objectives.”

🧭 Navigation & Next Steps

This section captures all the logistical information for investors who want to follow up on the results.

• Conference Call: Popular will hold a conference call to discuss the results on Thursday, April 23, 2026, at 11:00 a.m. Eastern Time.
• Investor Relations Contact: For investor inquiries, Paul J. Cardillo, SVP and Investor Relations Officer, can be reached at 212-417-6721 or [email protected].
• Media Relations Contact: MC González Noguera, EVP and Chief Communications & Public Affairs Officer, can be reached at 917-804-5253 or [email protected].

🧠 The Analogy

Think of Popular, Inc. as a massive, highly diversified grocery store that doesn't just sell groceries—it also gives out store credit (loans) and manages the money for local vendors and customers (deposits). This Q1 report shows that, despite some minor inventory hiccups (like increased loan write-offs), the store's main attractions (low operational costs and growing deposit base) kept sales (net income) up and improved the store's overall financial health (capital ratios).

🧩 Final Takeaway

Popular delivered a strong quarterly performance, driven by effective cost control and stable growth in net interest income. The bank is managing credit risks responsibly, maintaining robust capital reserves, and continues to signal a focus on long-term, sustained shareholder value creation.