Popular’s first quarter results were shaped by a combination of higher net interest income, improved margins, and disciplined expense management. Management credited fixed-rate asset repricing and lower deposit costs as key drivers, as well as investments in digital capabilities and targeted customer programs. CEO Javier Ferrer-Fernández noted, “Quarterly net income and EPS improved by 38% and 48%, respectively, compared to the first quarter of last year.” The company also highlighted favorable credit trends, with lower nonperforming loans and stable consumer credit performance, despite isolated commercial loan challenges.

Is now the time to buy BPOP? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Popular’s Q1 Earnings Call

• Jared Shaw (Barclays) asked about deposit trends post-tax season, with management clarifying that while ending balances may drop, they expect less runoff than previous years and continued focus on new client growth.
• Shaw (Barclays) also questioned the outlook for M&A versus organic expansion. CEO Javier Ferrer-Fernández reiterated that the focus remains on profitability improvement and selective team hires, with no plans for large-scale branch expansion in the U.S.
• Brett Rabatin (StoneX Group) pressed for details on margin outlook and capital deployment, with CFO Jorge Garcia stating margins should expand gradually, and that capital ratios are expected to decline as share buybacks continue.
• Timur Braziler (UBS) sought clarity on the sustainability of profitability targets and the impact of Basel III regulations. Ferrer-Fernández emphasized that more time and consistent performance are required before claiming sustainable returns, and that Basel III should reduce risk-weighted assets modestly.
• Arren Cyganovich (Truist) inquired about the pace and impact of manufacturing reshoring in Puerto Rico. Management responded that while recent announcements are still in early stages, they expect benefits to materialize gradually, particularly in construction activity.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will watch (1) whether Popular can further grow and retain deposits amid seasonal shifts and heightened competition; (2) the pace and impact of digital adoption through initiatives like Mi Banco’s new marketplace; and (3) expense discipline as technology investments scale. We will also monitor progress on capital return initiatives and macroeconomic developments, including oil price trends and manufacturing reshoring announcements in Puerto Rico.

Popular currently trades at $143.25, down from $148.30 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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