Q4 2025 Popular Inc Earnings Call

January 27, 2026

Speaker #1: Hello, everybody, and welcome to the POPULAR, Incorporated's fourth quarter 2025 earnings call. My name is Elliot, and I'll be coordinating your call today. If you would like to register a question, join today's event, please press star one on your telephone keypad.

Paul Cardillo: Hello, everybody, and welcome to Popular, Inc.'s Q4 2025 earnings call. My name is Elliot, and I'll be coordinating your call today. If you would like to register a question during today's event, please press star one on your telephone keypad. I'd like to hand over to Paul Cardillo. Please go ahead.

Operator: Hello, everybody, and welcome to Popular, Inc.'s Q4 2025 earnings call. My name is Elliot, and I'll be coordinating your call today. If you would like to register a question during today's event, please press star one on your telephone keypad. I'd like to hand over to Paul Cardillo. Please go ahead.

Speaker #1: And I'd like to hand over to Paul Cardillo. Please go ahead.

Speaker #2: Good morning, and thank you for joining us. With me on the call today is our President and CEO, Javier Ferrer; our CFO, Jorge Garcia; and our CRO, Lidio Soriano.

Ignacio Alvarez: Good morning, and thank you for joining us. With me on the call today is our President and CEO, Javier Ferrer, our CFO, Jorge García, and our CRO, Lidio Soriano. They will review our results for the full year and fourth quarter and then answer your questions. Other members of our management team will also be available during the Q&A session. Before we begin, I would like to remind you that during today's call, we may make forward-looking statements regarding Popular, such as projections of revenue, earnings, credit quality, expenses, taxes, and capital, as well as statements regarding Popular's plans and objectives. These statements are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements are set forth within today's earnings release and our SEC filings.

Paul Cardillo: Good morning, and thank you for joining us. With me on the call today is our President and CEO, Javier Ferrer, our CFO, Jorge García, and our CRO, Lidio Soriano. They will review our results for the full year and fourth quarter and then answer your questions. Other members of our management team will also be available during the Q&A session. Before we begin, I would like to remind you that during today's call, we may make forward-looking statements regarding Popular, such as projections of revenue, earnings, credit quality, expenses, taxes, and capital, as well as statements regarding Popular's plans and objectives. These statements are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements are set forth within today's earnings release and our SEC filings.

Q4 2025 Popular Inc Earnings Call

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Javier Ferrer: Thank you, Paul, and good morning, everyone. Please turn to slide four. In 2025, we deliver results that reflect the strength of our franchise and the continued stability of the Puerto Rico economy. Our annual net income of $833 million increased by $219 million, or 36% compared to 2024. Our strong fourth-quarter loan growth helped bring our total growth for the year to $2.2 billion, an increase of 6%. Banco Popular generated loan growth across most business segments, led by commercial loans. Popular Bank achieved growth in commercial and construction loans. Credit quality generally remained stable throughout 2025, aside from a couple of isolated commercial credit relationships in the third quarter. For the year, net charge-offs decreased by 16 basis points to 52 basis points. Our capital levels are strong, ending the year with a Common Equity Tier 1 ratio of 15.7%.

Speaker #3: Our annual net income of $833 million increased by $219 million, or 36%, compared to 2024. Our strong fourth quarter loan growth helped bring our total growth for the year to $2.2 billion, an increase of 6%.

Speaker #3: Banco Popular generated loan growth across most business segments, led by commercial loans. Popular Bank achieved growth in commercial and construction loans. Credit quality generally remained stable throughout 2025.

Speaker #3: Aside from a couple of isolated commercial credit relationships in the third quarter, for the year, net charge-offs decreased by 16 basis points to 52 basis points.

Speaker #3: Our capital levels are strong. Ending the year with a common equity tier-one ratio of 15.7%. Our tangible book value per share of $82.65 increased by 21% year over year, primarily due to lower unrealized losses on investment securities and net income for the year, offsetting part by dividends and our share repurchase activity.

Javier Ferrer: Our tangible book value per share of $82.65 increased by 21% year-over-year, primarily due to lower unrealized losses on investment securities and net income for the year, offset in part by dividends and our share repurchase activity. We repurchased approximately $500 million in common stock during 2025. Since resuming buybacks in the third quarter of 2024, we have repurchased approximately $720 million worth of common stock. We continue to believe that our shares are attractive at current prices. Additionally, in the fourth quarter, we increased our quarterly common stock dividend by $0.05 to $0.75 per share. Please turn to slide five, where we share highlights that reflect our strong operating performance in the fourth quarter. We reported net income of $234 million, an EPS of $3.53, an increase of $23.38 per share, respectively.

Our tangible book value per share of $82.65 increased by 21% year-over-year, primarily due to lower unrealized losses on investment securities and net income for the year, offset in part by dividends and our share repurchase activity. We repurchased approximately $500 million in common stock during 2025. Since resuming buybacks in the third quarter of 2024, we have repurchased approximately $720 million worth of common stock. We continue to believe that our shares are attractive at current prices. Additionally, in the fourth quarter, we increased our quarterly common stock dividend by $0.05 to $0.75 per share. Please turn to slide five, where we share highlights that reflect our strong operating performance in the fourth quarter. We reported net income of $234 million, an EPS of $3.53, an increase of $23.38 per share, respectively.

Speaker #3: We repurchased approximately $500 million in common stock during 2025. Since resuming buybacks in the third quarter of 2024, we have repurchased approximately $720 million worth of common stock.

Speaker #3: We continue to believe that our shares are attractive at current prices. Additionally, in the fourth quarter, we increased our quarterly common stock dividend by $0.05 to $0.75 per share.

Speaker #3: Please turn to slide five, where we share highlights that reflect our strong operating performance in the fourth quarter. We reported net income of $234 million and EPS of $3.53, an increase of $23 million and $0.38 per share, respectively.

Speaker #3: Our results were driven by higher net interest income and expanding net interest margin, strong loan growth, and importantly, lower operating expenses. Our credit metrics were stable in the quarter, with lower MPLs and net charge-offs.

Javier Ferrer: Our results were driven by higher net interest income, an expanding net interest margin, strong loan growth, and importantly, lower operating expenses. Our credit metrics were stable in the quarter, with lower NPLs and net charge-offs. We are very pleased to have exceeded a 14% ROTCE for the quarter and a 13% ROTCE for the full year. We demonstrated significant progress in our efforts to improve our sustainable returns towards our 14% objective. Please turn to slide 6. As of the end of the fourth quarter, business activity in Puerto Rico continued to be solid, as reflected by federal trends in total employment, consumer spending, construction, tourism, and other key economic data. The unemployment rate of 5.7% remained stable near all-time lows. Consumer spending remains healthy. Combined credit and debit card sales for Banco Popular customers increased by approximately 5% compared to the fourth quarter of 2024.

Our results were driven by higher net interest income, an expanding net interest margin, strong loan growth, and importantly, lower operating expenses. Our credit metrics were stable in the quarter, with lower NPLs and net charge-offs. We are very pleased to have exceeded a 14% ROTCE for the quarter and a 13% ROTCE for the full year. We demonstrated significant progress in our efforts to improve our sustainable returns towards our 14% objective. Please turn to slide 6. As of the end of the fourth quarter, business activity in Puerto Rico continued to be solid, as reflected by federal trends in total employment, consumer spending, construction, tourism, and other key economic data. The unemployment rate of 5.7% remained stable near all-time lows. Consumer spending remains healthy. Combined credit and debit card sales for Banco Popular customers increased by approximately 5% compared to the fourth quarter of 2024.

Speaker #3: We are very pleased to have exceeded a 14% ROTC for the quarter and a 13% ROTC for the full year. We demonstrated significant progress in our efforts to improve our sustainable returns towards our 14% objective.

Speaker #3: Please turn to slide six. As of the end of the fourth quarter, this is activity in Puerto Rico continued to be solid. As reflected by federal trends in total employment, consumer spending, construction, tourism, and other key economic data.

Speaker #3: The unemployment rate of 5.7% lows. Consumer spending remains healthy. Combined credit and debit card sales for Banco Popular customers increased by approximately 5% compared to the fourth quarter of 2024.

Speaker #3: We also continue to see healthy demand for homes in Puerto Rico. Mortgage balances at Banco Popular increased by quarter. The construction sector continues to show positive momentum.

Javier Ferrer: We also continue to see healthy demand for homes in Puerto Rico. Mortgage balances at Banco Popular increased by $115 million during the quarter. The construction sector continues to show positive momentum, with public and private investment fueling higher employment levels and driving cement sales to the highest levels since 2021. We are optimistic that these trends will persist, given the backlog of obligated federal disaster recovery funds, publicly announced real estate and tourism development projects, and the renewed focus on reshoring by global manufacturing companies. The tourism and hospitality sector continues to be a source of strength for the local economy. In 2025, airport passenger traffic reached a record of 13.6 million, increasing by 3% compared to 2024. During the fourth quarter, passenger traffic remained stable at around 3 million passengers.

We also continue to see healthy demand for homes in Puerto Rico. Mortgage balances at Banco Popular increased by $115 million during the quarter. The construction sector continues to show positive momentum, with public and private investment fueling higher employment levels and driving cement sales to the highest levels since 2021. We are optimistic that these trends will persist, given the backlog of obligated federal disaster recovery funds, publicly announced real estate and tourism development projects, and the renewed focus on reshoring by global manufacturing companies. The tourism and hospitality sector continues to be a source of strength for the local economy. In 2025, airport passenger traffic reached a record of 13.6 million, increasing by 3% compared to 2024. During the fourth quarter, passenger traffic remained stable at around 3 million passengers.

Speaker #3: With public and private investment fueling higher employment levels and driving cement sales to the highest level since 2021, we are optimistic that these trends will persist given the backlog of obligated federal disaster recovery funds, publicly announced real estate and tourism development projects, and the companies.

Speaker #3: The tourism and hospitality sector continues to be a source of strength for the local economy. In 2025, airport passenger traffic reached a record of 13.6 million, increasing by 3% compared to 2024.

Speaker #3: During the fourth quarter, passenger traffic remained stable at around 3 million passengers. And according to Discover Puerto Rico, in the fourth quarter, hotel demand reached nearly $350,000 room nights, marking 11% year over year growth and driving a 4% increase in total revenue.

Javier Ferrer: According to Discover Puerto Rico, in Q4, hotel demand reached nearly 350,000 room nights, marking 11% year-over-year growth and driving a 4% increase in total revenue. We are executing on our strategic framework to be the number one bank for our customers by strengthening relationships and providing exceptional service and products to our customers. We're also focused on delivering solutions faster and improving productivity while reducing costs. Ultimately, our goal is to be a top-performing bank. In addition to the rollout of a commercial cash management platform, we also deployed a new consumer credit origination platform in Puerto Rico and the Virgin Islands. This platform provides a fully digital origination process for personal loans and credit cards. We saw an upward trend in online originations during Q4 and have originated approximately $36 million since launch in Q3.

According to Discover Puerto Rico, in Q4, hotel demand reached nearly 350,000 room nights, marking 11% year-over-year growth and driving a 4% increase in total revenue. We are executing on our strategic framework to be the number one bank for our customers by strengthening relationships and providing exceptional service and products to our customers. We're also focused on delivering solutions faster and improving productivity while reducing costs. Ultimately, our goal is to be a top-performing bank. In addition to the rollout of a commercial cash management platform, we also deployed a new consumer credit origination platform in Puerto Rico and the Virgin Islands. This platform provides a fully digital origination process for personal loans and credit cards. We saw an upward trend in online originations during Q4 and have originated approximately $36 million since launch in Q3.

Speaker #3: We are executing on our strategic framework to be the number one bank for our customers, by strengthening relationships and providing exceptional service and products to our customers.

Speaker #3: We're also focused on delivering solutions faster and improving productivity while reducing costs. Ultimately, our goal is to be a top-performing bank. In addition to the rollout of a commercial cash management platform, we also deployed a new consumer credit origination platform in Puerto Rico and the Virgin Islands.

Speaker #3: This platform provides a fully digital origination process for personal loans and credit cards. We saw an upward trend in online originations during the fourth quarter and have originated approximately 36 million since launch in the third quarter.

Speaker #3: We have continued to invest in our physical retail network to blend the speed and convenience of self-service with in-person support. Our branches continue to be an advantage in Puerto Rico and the Virgin Islands.

Javier Ferrer: We have continued to invest in our physical retail network to blend the speed and convenience of self-service with in-person support. Our branches continue to be an advantage in Puerto Rico and the Virgin Islands. As we continue to modernize our channels and platforms, we are creating a more seamless experience to provide our customers with the flexibility to connect with Popular through the channel that best fits their needs without compromising the quality of our service. We're also seeing the results of our focus on being simple and efficient. We have sustained and continued to simplify our commercial credit origination and portfolio risk management. We are seeing faster cycle times, higher banker productivity, a more seamless customer journey, and loan growth in our small and middle market segments.

We have continued to invest in our physical retail network to blend the speed and convenience of self-service with in-person support. Our branches continue to be an advantage in Puerto Rico and the Virgin Islands. As we continue to modernize our channels and platforms, we are creating a more seamless experience to provide our customers with the flexibility to connect with Popular through the channel that best fits their needs without compromising the quality of our service. We're also seeing the results of our focus on being simple and efficient. We have sustained and continued to simplify our commercial credit origination and portfolio risk management. We are seeing faster cycle times, higher banker productivity, a more seamless customer journey, and loan growth in our small and middle market segments.

Speaker #3: As we continue to modernize our channels and platforms, we are creating a more seamless experience to provide our customers with the flexibility to connect with popular through the channel that best fits their needs without compromising the quality of our service.

Speaker #3: We're also seeing the results of our focus on being simple and efficient. We have sustained and continue to simplify our commercial credit origination and portfolio risk management.

Speaker #3: We are seeing faster cycle times and higher banker productivity, a more seamless customer journey, and long growth in our small and middle market segments.

Speaker #3: During the year, we also executed a series of sustainable efficiency initiatives, including exiting our mortgage servicing business in Puerto Rico and transforming our ERP solution to a modern cloud platform that significantly improves agility and performance.

Javier Ferrer: During the year, we also executed a series of sustainable efficiency initiatives, including exiting our mortgage business in the United States, optimizing our mortgage servicing business in Puerto Rico, and transforming our ERP solution to a modern cloud platform that significantly improves agility and performance. Currently, more than 800 of our colleagues are working on these projects, and we are very proud of the progress that we have made. I will now turn the call over to Jorge for more details on our financial results. Jorge?

During the year, we also executed a series of sustainable efficiency initiatives, including exiting our mortgage business in the United States, optimizing our mortgage servicing business in Puerto Rico, and transforming our ERP solution to a modern cloud platform that significantly improves agility and performance. Currently, more than 800 of our colleagues are working on these projects, and we are very proud of the progress that we have made. I will now turn the call over to Jorge for more details on our financial results. Jorge?

Speaker #3: Currently, more than 800 of our colleagues are working on these projects, and we are very proud of the progress that we have made. I will now turn the call over to Jorge for more details on our financial results.

Speaker #3: Jorge.

Speaker #2: Thank you,

Jorge García: Thank you, Javier. Good morning, and thank you all for joining the call today. As Javier mentioned, our quarterly net income increased by $23 million to $234 million, and our EPS improved by $0.38 to $3.53. Excluding the partial reversal of the FDIC special assessment, adjusted net income for the quarter was $224 million, an improvement of $13 million from Q3. These results were driven by better NII and lower expenses. As we have mentioned before, our objective is to deliver sustainable financial results. While we benefited from the FDIC reversal, we are pleased to have exceeded 14% ROTCE for the period and 13% ROTCE for the full year. In 2025, we executed targeted initiatives to improve profitability by growing the top line and capturing sustainable cost efficiencies, both of which are key drivers of the ROTCE numerator.

Speaker #2: Javier. Good morning, and thank you all for joining the call today. As Javier mentioned, our quarterly net income increased by 23 million to $234 million, and our EPS improved by 38 cents to $3.53.

Speaker #2: Excluding the partial reversal of the FDIC special assessment, adjusted net income for the quarter was $224 million, an improvement of $13 million from Q3.

Speaker #2: These results were driven by better NII and lower expenses. As we have mentioned before, our objective is to deliver sustainable financial results. While we benefited from the FDIC reversal, we are pleased to have exceeded 14% ROTC for the period and 13% ROTC for the full year.

Speaker #2: In 2025, we executed targeted initiatives to improve profitability by growing the top line and capturing sustainable cost efficiencies. Both of which are key drivers of the ROTC numerator.

Speaker #2: Looking ahead to 2026 and beyond, we will build on this progress and continue to drive improvement in operating leverage and profitability. At the same time, we see capital levels as a meaningful driver to improve ROTC.

Jorge García: Looking ahead for 2026 and beyond, we will build on this progress and continue to drive improvement in operating leverage and profitability. At the same time, we see capital levels as a meaningful driver to improve ROTCE. Our current objective remains a sustainable 14% ROTCE. We'll continue to use all available levers to position the company as a top-performing bank when compared to mainland peers. Please turn to slide eight. Our net interest income of $658 million increased by $11 million and was driven by higher loan balances, fixed-rate asset repricing in our investment portfolio, and lower deposit costs in both of our banks. For the year, NII increased by $259 million, or 11%. During the quarter, our net interest margin expanded by 10 basis points to 3.61% on a GAAP basis.

Looking ahead for 2026 and beyond, we will build on this progress and continue to drive improvement in operating leverage and profitability. At the same time, we see capital levels as a meaningful driver to improve ROTCE. Our current objective remains a sustainable 14% ROTCE. We'll continue to use all available levers to position the company as a top-performing bank when compared to mainland peers. Please turn to slide eight. Our net interest income of $658 million increased by $11 million and was driven by higher loan balances, fixed-rate asset repricing in our investment portfolio, and lower deposit costs in both of our banks. For the year, NII increased by $259 million, or 11%. During the quarter, our net interest margin expanded by 10 basis points to 3.61% on a GAAP basis.

Speaker #2: Our current objective remains a sustainable 14% ROTC. We'll continue to use all available levers to position the company as a top-performing bank when compared to mainland peers.

Speaker #2: Please turn to slide eight. Our net interest income of $658 million increased by $11 million and was driven by higher loan balances, fixed-rate asset repricing in our investment portfolio, and lower deposit costs in both of our banks.

Speaker #2: For the year, NII increased by $259 million, or 11%. During the quarter, our net interest margin expanded by 10 basis points to 3.61% on a GAAP basis.

Speaker #2: Our fully tax-equivalent margin improved by 13 basis points to 4.03%, driven by higher loan balances and lower interest expense. Primarily due to lower balances and cost of Puerto Rico public deposits.

Jorge García: Our fully tax equivalent margin improved by 13 basis points to 4.03%, driven by higher loan balances and lower interest expense, primarily due to lower balances and costs of Puerto Rico public deposits. Loan growth of $641 million in the quarter was strong, with both banks contributing to that increase. At BBPR, we saw loan growth of $497 million driven primarily by commercial and mortgage lending. At Popular Bank, we saw loan growth of $144 million, mainly driven by commercial lending. For 2026, we expect consolidated loan growth of 3% to 4%. In our investment portfolio, we continue to reinvest proceeds from bond maturities into U.S. Treasury notes and bills. During the quarter, we purchased approximately $900 million of Treasury notes with a duration of 2.1 years and an average yield of around 3.56%. We expect to maintain a 2- to 3-year duration in the investment portfolio.

Speaker #2: Loan growth of $641 million in the quarter was strong, with both banks contributing to that increase. At BBPR, we saw loan growth of $497 million, driven primarily by commercial and mortgage lending.

Speaker #2: At POPULAR Bank, we saw loan growth of $144 million, mainly driven by commercial lending. For 2026, we expect consolidated loan growth of 3 to 4%.

Speaker #2: In our investment portfolio, we continue to reinvest proceeds from bond maturities into US Treasury notes and bills. During the quarter, we purchased approximately $900 million of Treasury notes with a duration of 2.1 years and an average yield of around 3.56%.

Speaker #2: We expect to maintain a two- to three-year duration in the investment portfolio. Ending deposit balances decreased by $323 million, and average deposit balances decreased by $880 million.

Jorge García: Ending deposit balances decreased by $323 million, and average deposit balances decreased by $880 million. This decline was mostly driven by anticipated outflows from Puerto Rico public deposits, which ended the quarter at $19.4 billion, a decrease of $662 million compared to Q3. We continue to expect public deposits to be in the range of $18 to $20 billion. At BBPR, excluding Puerto Rico public deposits, ending balances increased by $525 million, driven by growth of $430 million in commercial demand deposits. Average deposits increased by $192 million. Total deposit costs decreased by 11 basis points at each bank. At BBPR, the decrease is mostly a result of Puerto Rico public deposits repricing lower by 22 basis points due to recent interest rate cuts by the Fed, while non-public customer deposit costs decreased by 1 basis point.

Ending deposit balances decreased by $323 million, and average deposit balances decreased by $880 million. This decline was mostly driven by anticipated outflows from Puerto Rico public deposits, which ended the quarter at $19.4 billion, a decrease of $662 million compared to Q3. We continue to expect public deposits to be in the range of $18 to $20 billion. At BBPR, excluding Puerto Rico public deposits, ending balances increased by $525 million, driven by growth of $430 million in commercial demand deposits. Average deposits increased by $192 million. Total deposit costs decreased by 11 basis points at each bank. At BBPR, the decrease is mostly a result of Puerto Rico public deposits repricing lower by 22 basis points due to recent interest rate cuts by the Fed, while non-public customer deposit costs decreased by 1 basis point.

Speaker #2: This decline was mostly driven by anticipated outflows from Puerto Rico public deposits, which ended the quarter at 19.4 billion, a decrease of $662 million compared to Q3.

Speaker #2: We continue to expect public deposits to be in the range of 18 to 20 billion. At BBPR, excluding Puerto Rico public deposits, ending balances increased by $525 million.

Speaker #2: Driven by growth of $430 million in commercial demand deposits. Average deposits increased by $192 million. Total deposit costs decreased by 11 basis points at each bank.

Speaker #2: At BBPR, the decrease was mostly a result of Puerto Rico public deposits repricing lower by 22 basis points due to recent interest rate cuts by the Fed.

Speaker #2: While non-public customer deposit costs decreased by one basis point. At PB, the reduction was mainly related to lower online savings deposit costs and repricing of time deposits.

Jorge García: At PV, the reduction was mainly related to lower online savings deposit costs and repricing of time deposits. We anticipate 2026 NII will increase 5% to 7%, driven by continued reinvestment of lower-yielding securities and loan originations in the current rate environment, as well as lower costs of Puerto Rico public deposits, and online deposits at Popular Bank. Please turn to slide 9. Non-interest income was $166 million, a decrease of $5 million compared to Q3 and in line with the high end of our guidance. We continue to see solid performance across most of our fee-generating segments, including robust customer transaction activity during the holiday season. In 2026, we expect quarterly non-interest income to continue to be in a range of $160 to $165 million. Please turn to slide 10. Total operating expenses were $473 million, a decrease of $22 million when compared to Q3.

At PV, the reduction was mainly related to lower online savings deposit costs and repricing of time deposits. We anticipate 2026 NII will increase 5% to 7%, driven by continued reinvestment of lower-yielding securities and loan originations in the current rate environment, as well as lower costs of Puerto Rico public deposits, and online deposits at Popular Bank. Please turn to slide 9. Non-interest income was $166 million, a decrease of $5 million compared to Q3 and in line with the high end of our guidance. We continue to see solid performance across most of our fee-generating segments, including robust customer transaction activity during the holiday season. In 2026, we expect quarterly non-interest income to continue to be in a range of $160 to $165 million. Please turn to slide 10. Total operating expenses were $473 million, a decrease of $22 million when compared to Q3.

Speaker #2: We anticipate 2026 NII will increase 5 to 7%. Driven by continued securities and loan originations in the current rate environment, as well as lower costs of Puerto Rico public deposits and online deposits at POPULAR Bank.

Speaker #2: Please turn to slide nine. Non-interest income was $166 million, a decrease of $5 million compared to Q3 and in line with the high end of our guidance.

Speaker #2: We continue to see solid performance across most of our fee-generating segments, including robust customer transaction activity, during the holiday season. In 2026, we expect quarterly non-interest income to continue to be in a range of $160 to $165 million.

Speaker #2: Please turn to slide 10. Total operating expenses were $473 million, a decrease of $22 million when compared to Q3. Excluding the FDIC reversal, operating expenses were $489 million.

Jorge García: Excluding the FDIC reversal, operating expenses were $489 million. Aside from the reversal, the largest quarter-over-quarter variance was related to a $13 million non-cash goodwill impairment taken in the third quarter. For the year, GAAP operating expenses increased by roughly 2.5%, which was below our original 4% guidance, as we executed on a series of sustainable efficiency initiatives and also benefited from the delay of some expenditures that will occur in 2026. In 2026, we expect total full-year GAAP expenses to increase by approximately 3% compared to 2025, as we continue to invest in our people and technology. Our effective tax rate in the fourth quarter was 16%, compared to approximately 15% in Q3. In 2025, our effective tax rate was 17%, compared to 23% last year, driven by a higher proportion of exempt income.

Excluding the FDIC reversal, operating expenses were $489 million. Aside from the reversal, the largest quarter-over-quarter variance was related to a $13 million non-cash goodwill impairment taken in the third quarter. For the year, GAAP operating expenses increased by roughly 2.5%, which was below our original 4% guidance, as we executed on a series of sustainable efficiency initiatives and also benefited from the delay of some expenditures that will occur in 2026. In 2026, we expect total full-year GAAP expenses to increase by approximately 3% compared to 2025, as we continue to invest in our people and technology. Our effective tax rate in the fourth quarter was 16%, compared to approximately 15% in Q3. In 2025, our effective tax rate was 17%, compared to 23% last year, driven by a higher proportion of exempt income.

Speaker #2: Aside from the reversal, the largest quarter-over-quarter variance was related to a $13 million non-cash goodwill impairment taken in the third quarter. For the year, GAAP operating expenses increased by roughly 2.5%, which was below our original 4% guidance, as we executed on a series of sustainable efficiency initiatives and also benefited from the delay of some expenditures that will occur in 2026.

Speaker #2: In 2026, we expect total full-year GAP expenses to increase by approximately 3% compared to 2025, as we continue to invest in our people and technology.

Speaker #2: Our effective tax rate in the fourth quarter was 16%, compared to approximately 15% in Q3. In 2025, our effective tax rate was 17%, compared to 23% last year, driven by a higher proportion of exempt income.

Speaker #2: In 2026, we expect the effective tax rate for the year to be in a range of 15 to 17%. Please turn to slide 11.

Jorge García: In 2026, we expect the effective tax rate for the year to be in a range of 15% to 17%. Please turn to slide 11. Tangible book value per share at the end of the quarter was $82.65, an increase of $3.53 per share, driven by our net income and lower unrealized losses in our investment portfolio, often in part by our capital return activity in the quarter. During the fourth quarter, we paid a quarterly common stock dividend of $0.75 per share, an increase of $0.05 from Q3. As Javier noted earlier, we're pushing our teams to enhance profitability through ongoing incremental revenue initiatives and expense discipline. While we've made progress over the past two years in reducing our CET1 ratio, there's more we can do. In Q4, we repurchased approximately $148 million in common stock.

In 2026, we expect the effective tax rate for the year to be in a range of 15% to 17%. Please turn to slide 11. Tangible book value per share at the end of the quarter was $82.65, an increase of $3.53 per share, driven by our net income and lower unrealized losses in our investment portfolio, often in part by our capital return activity in the quarter. During the fourth quarter, we paid a quarterly common stock dividend of $0.75 per share, an increase of $0.05 from Q3. As Javier noted earlier, we're pushing our teams to enhance profitability through ongoing incremental revenue initiatives and expense discipline. While we've made progress over the past two years in reducing our CET1 ratio, there's more we can do. In Q4, we repurchased approximately $148 million in common stock.

Speaker #2: Tangible book value per share at the end of the quarter was $82.65, an increase of $3.53 per share, driven by our net income and lower unrealized losses in our investment portfolio, offset in part by our capital return activity in the quarter.

Speaker #2: During the fourth quarter, we paid a quarterly common stock dividend of $0.75 per share, an increase of $0.05 from Q3. As Javier noted earlier, we're pushing our teams to enhance profitability through ongoing incremental revenue initiatives and expense discipline.

Speaker #2: While we've made progress over the past two years in reducing our CET1 ratio, there's more we can do. In Q4, we repurchased approximately $148 million in common stock.

Speaker #2: We believe this is a good run rate for the pace of buybacks going forward, subject to market conditions. As of December 31st, we had 281 million remaining on our active share repurchase authorization.

Jorge García: We believe this is a good run rate for the pace of buybacks going forward, subject to market conditions. As of 31 December, we had $281 million remaining on our active share repurchase authorization. In addition to the common stock repurchases, we'll continue to use capital for loan growth, and we also expect to pursue a dividend increase later this year. Finally, we carry less additional tier-one capital than peers and see that as another opportunity to optimize our capital structure in the future. We believe that these actions, which are subject to market conditions and board approval, will help us achieve our long-term stated CET1 goal of having levels consistent with mainland bank peers, plus a buffer for our geographic concentration. With that, I turn the call over to Lidio.

We believe this is a good run rate for the pace of buybacks going forward, subject to market conditions. As of 31 December, we had $281 million remaining on our active share repurchase authorization. In addition to the common stock repurchases, we'll continue to use capital for loan growth, and we also expect to pursue a dividend increase later this year. Finally, we carry less additional tier-one capital than peers and see that as another opportunity to optimize our capital structure in the future. We believe that these actions, which are subject to market conditions and board approval, will help us achieve our long-term stated CET1 goal of having levels consistent with mainland bank peers, plus a buffer for our geographic concentration. With that, I turn the call over to Lidio.

Speaker #2: In addition to the common stock repurchases, we'll continue to use capital for loan growth. And we also expect to pursue a dividend increase later this year.

Speaker #2: Finally, we carry less additional Tier 1 capital than peers, and see that as another opportunity to optimize our capital structure in the future. We believe that these actions, which are subject to market conditions and board approval, will help us achieve our long-term stated CET1 goal of having levels consistent with mainline bank peers, plus a buffer for our geographic concentration.

Speaker #2: With that, I turn the call over to Lidio. Thank you, Jorge, and thank you all for being with us. Turning to slide number 12.

Paul Cardillo: Thank you, Jorge, and thank you all for being with us. Turning to slide number 12, credit quality metrics remained stable during the fourth quarter, with lower NPLs and lower net charge-offs. Non-performing assets and loans decreased by $4 million this quarter, mainly due to Popular Bank. U.S. NPLs decreased by $14 million, as a $17 million mortgage relationship returned to accrual status, offset in part by higher commercial NPLs. BBPR NPLs increased $5 million, with commercial up $8 million and consumer up $3 million, offset in part by an $8 million decrease in mortgage NPLs. Inflows of NPLs declined by $194 million, primarily in BBPR, as the previous quarter included inflows from two unrelated commercial relationships totaling $188 million. The ratio of NPLs to total loans held in portfolio decreased 3 basis points to 1.27%.

Lidio Soriano: Thank you, Jorge, and thank you all for being with us. Turning to slide number 12, credit quality metrics remained stable during the fourth quarter, with lower NPLs and lower net charge-offs. Non-performing assets and loans decreased by $4 million this quarter, mainly due to Popular Bank. U.S. NPLs decreased by $14 million, as a $17 million mortgage relationship returned to accrual status, offset in part by higher commercial NPLs. BBPR NPLs increased $5 million, with commercial up $8 million and consumer up $3 million, offset in part by an $8 million decrease in mortgage NPLs. Inflows of NPLs declined by $194 million, primarily in BBPR, as the previous quarter included inflows from two unrelated commercial relationships totaling $188 million. The ratio of NPLs to total loans held in portfolio decreased 3 basis points to 1.27%.

Speaker #2: remained stable during the fourth Credit quality metrics quarter, with lower MPLs and lower net charge-off. Non-performing assets and loans decreased by $4 million this quarter, mainly due to POPULAR Bank.

Speaker #2: US MPLs decreased by $14 million, as a $17 million mortgage relationship returned to accrual status, offset in part by higher commercial MPLs. BPR MPLs increased $5 million, with commercial up $8 million and consumer up $3 million, offset in part by an $8 million decrease in mortgage MPLs.

Speaker #2: Inflows of MPLs declined by $194 million, primarily in BPR, as the previous quarter included inflows from two unrelated commercial relationships totaling $188 million. The ratio of MPLs to total loans held in portfolio decreased three basis points to 1.27%.

Speaker #2: Turning to slide number 13. Net charge-offs amounted to $50 million, or an annualized 51 basis points, compared to $58 million, or 60 basis points, in the prior quarter.

Paul Cardillo: Turning to slide number 13, net charge-off amounted to $50 million, or an annualized 51 basis points, compared to $58 million, or 60 basis points, in the prior quarter. This quarter results include $5 million in recoveries from the sales of previously charge-off auto loans and credit cards. Excluding this, the net charge-off ratio was 57 basis points. The net charge-off in BBPR decreased by $7 million, driven by a decrease in commercial net charge-off as the prior quarter included a $14 million charge-off related to a single borrower. In 2025, net charge-offs were 52 basis points, an improvement of 16 basis points from last year, driven by lower consumer net charge-offs. For 2026, based on current trends and macroeconomic outlook, we expect annual net charge-off of 55 to 70 basis points.

Turning to slide number 13, net charge-off amounted to $50 million, or an annualized 51 basis points, compared to $58 million, or 60 basis points, in the prior quarter. This quarter results include $5 million in recoveries from the sales of previously charge-off auto loans and credit cards. Excluding this, the net charge-off ratio was 57 basis points. The net charge-off in BBPR decreased by $7 million, driven by a decrease in commercial net charge-off as the prior quarter included a $14 million charge-off related to a single borrower. In 2025, net charge-offs were 52 basis points, an improvement of 16 basis points from last year, driven by lower consumer net charge-offs. For 2026, based on current trends and macroeconomic outlook, we expect annual net charge-off of 55 to 70 basis points.

Speaker #2: This quarter results includes $5 million in recoveries from the sales of previously charged off auto loans and credit cards. Excluding this, the net charge-off ratio was 57 basis points.

Speaker #2: The net charge-off in BPR decreased by $7 million, driven by a decrease in commercial net charge-off as the prior quarter included a $14 million charge-off related to a single borrower.

Speaker #2: In 2025, net charge-off was 52 basis points, an improvement of $16 basis points from last year, driven by lower consumer net charge-offs. For 2026, based on current trends and macroeconomic outlook, we expect annual net charge-off of $55 to $70 basis points.

Speaker #2: The allowance for credit losses increased by $22 million, $308 million, mostly in BPR, due to higher research for the commercial portfolio driven by higher balances specific reserves and loan modifications, coupled with higher reserves for consumer loans due to changes in FICOMEX.

Paul Cardillo: The Allowance for Credit Losses increased by $22 million to $308 million, mostly in BBPR, due to higher reserves for the commercial portfolio, driven by higher balances, specific reserves, and loan modifications, coupled with higher reserves for consumer loans due to changes in FICO mix. The comparison ratio of the ACL to loans held in portfolio remained stable at 2.05%, while the ratio of the ACL to NPLs was 162%, compared to 157% in the previous quarter. The provision for loan losses was $71 million, down $3 million from $75 million in the prior quarter. For the BBPR segment, the provision was $72 million, compared to $74 million in the previous quarter. With that, I would like to turn the call over to Mr. Ferrer for his concluding remarks. Thank you.

The Allowance for Credit Losses increased by $22 million to $308 million, mostly in BBPR, due to higher reserves for the commercial portfolio, driven by higher balances, specific reserves, and loan modifications, coupled with higher reserves for consumer loans due to changes in FICO mix. The comparison ratio of the ACL to loans held in portfolio remained stable at 2.05%, while the ratio of the ACL to NPLs was 162%, compared to 157% in the previous quarter. The provision for loan losses was $71 million, down $3 million from $75 million in the prior quarter. For the BBPR segment, the provision was $72 million, compared to $74 million in the previous quarter. With that, I would like to turn the call over to Mr. Ferrer for his concluding remarks. Thank you.

Speaker #2: The corporation ratio of the ACL to loans held in portfolio remained stable, at 2.05%, while the ratio of the ACL to MPLs was 162%, compared to 157% in the previous quarter.

Speaker #2: The provision for loan losses was $71 million down $3 million from $75 million in the prior quarter. For the BPR segment, the provision was $72 million, compared to $74 million in the previous quarter.

Speaker #2: With that, I would like to turn the call over to Mr. Ferrer for his concluding remarks. Thank

Speaker #2: you.

Speaker #3: Well, thank you,

Javier Ferrer: Well, thank you, Lidio and Jorge, for your updates. Our Q4 results closed out the year on a high note. We are very pleased with our financial performance in 2025. We increased revenues, maintained expense discipline, generated strong loan growth, and improved customer deposit trends. I'm urging our teams to remain focused on deposit growth, loan generation, and particularly on our expense discipline. Our strategy is grounded in customer primacy. We are focused on deepening relationships, delivering value across channels, and simplifying how we operate. Most importantly, it is focused on translating these efforts into tangible financial results and generating value for our shareholders. In closing, I want to recognize our colleagues and their contribution to our results. I see what they do every day in our branches, call centers, and centralized offices.

Speaker #3: Lidio and Jorge, thank you for your updates. Our fourth quarter results closed out the year on a high note. We are very pleased with our financial performance in 2025.

Speaker #3: We increased revenues, maintained expense discipline, generated strong loan growth, and improved customer deposit trends. I'm urging our teams to remain focused on deposit growth, loan generation, and particularly on our expense discipline.

Speaker #3: Our strategy is grounded in customer primacy, where our focus on deepening relationships, delivering value across channels, and simplifying how we operate. Most importantly, it is focused on translating these efforts into tangible financial results and generating value for our shareholders.

Speaker #3: In closing, I want to recognize our colleagues and their contribution to our results. I see what they do every day, in our branches, call centers, and centralized offices.

Speaker #3: We are pushing ourselves to deliver more for our clients every day, and I am deeply grateful for their commitment and dedication. We are now ready to answer your

Javier Ferrer: We are pushing ourselves to deliver more for our clients every day, and I am deeply grateful for their commitment and dedication. We are now ready to answer your questions.

We are pushing ourselves to deliver more for our clients every day, and I am deeply grateful for their commitment and dedication. We are now ready to answer your questions.

Speaker #3: questions. Thank

Speaker #1: you. If you would like to ask a question, please press star, followed by one on your telephone keypad. If you would like to withdraw your question, please press star, followed by two.

Jorge García: Thank you. If you would like to ask a question, please press star followed by one on the telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. First question comes from Brett Rabatin with Hovde Group. Your line is open. Please go ahead.

Operator: Thank you. If you would like to ask a question, please press star followed by one on the telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. First question comes from Brett Rabatin with Hovde Group. Your line is open. Please go ahead.

Speaker #1: When preparing to ask your question, please ensure your device is unmuted locally. First question comes from Brett Rabbiton with Hope Group. Your line is open.

Speaker #1: Please go ahead.

Speaker #4: Hey, good morning, everyone. How are you doing?

[Analyst] (Hovde Group): Hey, good morning, everyone. How are you doing?

Brett Rabatin: Hey, good morning, everyone. How are you doing?

Jorge García: Good morning, Brett. Doing well.

Jorge García: Good morning, Brett. [crosstalk] Doing well.

Speaker #4: Doing Good morning, Brett.

Speaker #4: Well, I wanted to start on the—

[Analyst] (Hovde Group): I wanted to start on the guidance and just thinking about the NII guide. If I'm reading it correctly, it kind of would suggest maybe slightly slower average balance sheet growth during 2026 and 5 to 10 basis points of margin expansion. I know you guys don't like to give explicit margin guidance, but would that be within the realm of what you're looking at? Then just wanted to ask around the ROTCE goal, why with operating leverage that might not increase a bit from here?

Brett Rabatin: I wanted to start on the guidance and just thinking about the NII guide. If I'm reading it correctly, it kind of would suggest maybe slightly slower average balance sheet growth during 2026 and 5 to 10 basis points of margin expansion. I know you guys don't like to give explicit margin guidance, but would that be within the realm of what you're looking at? Then just wanted to ask around the ROTCE goal, why with operating leverage that might not increase a bit from here?

Speaker #5: Guidance—and just thinking about the NII guide—and if I'm reading it correctly, it kind of would suggest maybe slightly slower average balance sheet growth during '26, and 5 to 10 basis points of margin expansion.

Speaker #5: And I know you guys don't like to give explicit margin guidance, but would that be within the realm of what you're looking at? And then just wanted to ask around the ROTSI goal, why with operating leverage that might not increase a bit from here?

Speaker #4: Okay. Thank you, Brett. Good morning. First, on the NII, first, we were very pleased with the 11% growth this year. The 11% growth in NII was driven by expanding the margin, being able to reinvest fixed rate investments in our portfolio into higher yielding assets, loan growth, and lower cost of deposits.

Jorge García: Okay. Thank you, Brett. Good morning. First, on the NII, first, we were very pleased with the 11% growth this year. The 11% growth in NII was driven by expanding the margin, being able to reinvest fixed-rate investments in our portfolio into higher-yielding assets, loan growth, and lower cost of deposits. We believe all those three factors will continue into 2026, albeit at a smaller magnitude. We will see a slowdown, for example, of the yield uptake that we will get on the reinvestment of the portfolio. But we're very comfortable with that 5% to 7% guide. We are expecting margin to continue to expand throughout 2026. I think when you look at that range, if you're looking at what drives one for the other, really always revolves around low-cost deposit levels and our ability to reduce deposits in the US market.

Speaker #4: We believe all those three factors will continue into 2026, albeit at a smaller magnitude. We will see a slowdown, for example, of the yield uptake that we will get on the reinvestment of the portfolio.

Speaker #4: But we're very comfortable with that 5 to 7% guide. We are expecting margin to continue to expand throughout 2026. I think when you look at that range if you're looking at what drives one for the other, really always revolves around low cost deposit levels and our ability to reduce deposits in the US market.

Speaker #4: In terms of the ROTSI, we talked in the past that we want ROTSI to be driven by the improvement in performance and net income, right?

Jorge García: In terms of the ROTCE, we've talked in the past that we want ROTCE to be driven by the improvement in performance and net income, right? And again, we are very pleased with the results this year. We have a lot of momentum going into 2026. We expect that momentum to continue. We want that above 14% to be sustainable. There's enough uncertainty in the world, and we want to make sure that we are absorbing any ups and downs through the cycle. So we're not quite there yet. We do feel that we have a lot of momentum and like the starting point where we're at, but that is something that we want to continue to focus on. And I think this year we try to be more intent or deliberate in how we're managing capital levels as well, and as I discussed in my prepared remarks.

In terms of the ROTCE, we've talked in the past that we want ROTCE to be driven by the improvement in performance and net income, right? And again, we are very pleased with the results this year. We have a lot of momentum going into 2026. We expect that momentum to continue. We want that above 14% to be sustainable. There's enough uncertainty in the world, and we want to make sure that we are absorbing any ups and downs through the cycle. So we're not quite there yet. We do feel that we have a lot of momentum and like the starting point where we're at, but that is something that we want to continue to focus on. And I think this year we try to be more intent or deliberate in how we're managing capital levels as well, and as I discussed in my prepared remarks.

Speaker #4: And again, we are very pleased with the results this year. We have a lot of momentum going into 2026. We expect that momentum to continue.

Speaker #4: We want that above 14% to be sustainable. There's enough uncertainty in the world, and we want to make sure that we are absorbing any ups and downs through the cycle.

Speaker #4: So we're not quite there yet. We do feel that we have a lot of momentum, and like the starting point where we're at, but that is something that we want to continue to focus on.

Speaker #4: And I think this year we try to be more intent or deliberate in how we're managing capital levels as well, and as I discussed in my prepared remarks.

Speaker #5: Okay. And then the other question I had was just around loan growth, which was better than I expected, and pretty strong in commercial. When I think about that guidance for the coming year, I mean, you've had 6%-ish growth the past two years, 4Q was 7%.

[Analyst] (Hovde Group): Okay. And then the other question I had was just around loan growth, which was better than I expected and pretty strong in commercial. When I think about that guidance for the coming year, I mean, you've had 6%-ish growth the past two years. Q4 was 7%. Is this slowness or slower level anticipated in 2026? Is that just conservatism around consumer or any thoughts around that? And then as it relates to onshoring, are you guys seeing any opportunities related to that?

Brett Rabatin: Okay. And then the other question I had was just around loan growth, which was better than I expected and pretty strong in commercial. When I think about that guidance for the coming year, I mean, you've had 6%-ish growth the past two years. Q4 was 7%. Is this slowness or slower level anticipated in 2026? Is that just conservatism around consumer or any thoughts around that? And then as it relates to onshoring, are you guys seeing any opportunities related to that?

Speaker #5: Is this slowness or slower level anticipated in '26? Is that just conservatism around consumer or any thoughts around that? And then as it relates to onshoring you guys seeing any opportunities related to

Speaker #5: that? Okay.

Jorge García: Okay. So let's start first on the loan growth. As you said, we have seen loan growth around 6% for the last couple of years, led by growth in Puerto Rico. That growth in Puerto Rico was across all of our portfolio, right? Commercial, mortgage, and consumer. As we look into 2026, we expect to continue to see commercial to lead the way and mortgage in Puerto Rico, but we do see a softening on the consumer, particularly around auto. So that is one part of the guide. The other growth engine for us has been in the US. We are in good markets in the US. We like those markets, but we want to make sure that we are pricing for relationships and for profitable loan growth. There's some of that embedded.

Speaker #4: So let's start first on the loan growth. As you said, we have seen loan growth around 6% for the last couple of years, led by growth in Puerto Rico.

Speaker #4: That growth in Puerto Rico was across all of our portfolio, right? Commercial, mortgage, and consumer. As we look into 2026, we expect to continue to see commercial to lead the way and mortgage in Puerto Rico, but we do see a softening on the consumer, particularly around auto.

Speaker #4: So that is one part of the guide. The other growth engine for us has been in the US, we are in good markets in the US.

Speaker #4: We like those markets, but we want to make sure that we are pricing for relationships and for profitable loan growth. There's some of that embedded.

Speaker #4: As well as, Brett, as you can imagine, there's always timing, as loan transactions are focused on larger clients. When those things close in terms of funding that you advance, or when things slow down on expected payoff, that has an impact on those kind of year-over-year changes.

Jorge García: As well as Brett, as you can imagine, there's always timing as loan transactions are focused on larger clients. When those things close in terms of funding that you advance or when things slow down on expected payout, that has an impact on those kind of year-over-year kind of changes. But we're confident on the 3% to 4% guide and the momentum that we've had over the last couple of years in both Puerto Rico and our US markets.

As well as Brett, as you can imagine, there's always timing as loan transactions are focused on larger clients. When those things close in terms of funding that you advance or when things slow down on expected payout, that has an impact on those kind of year-over-year kind of changes. But we're confident on the 3% to 4% guide and the momentum that we've had over the last couple of years in both Puerto Rico and our US markets.

Speaker #4: But we're confident on the 3% to 4% guide and the momentum that we've had over the last couple of years in both Puerto Rico and our U.S. markets.

Speaker #5: Okay. That's helpful. Congrats on a strong year, guys.

[Analyst] (Hovde Group): Okay. That's helpful. Congrats on a strong year, guys.

Brett Rabatin: Okay. That's helpful. Congrats on a strong year, guys.

Jorge García: Thank you.

Speaker #5: Thank Thank you.

Speaker #5: You. We now turn to Jared.

Paul Cardillo: Thank you.

Lidio Soriano: Thank you.

Jorge García: We now turn to Jared Shaw with Barclays. Your line is open. Please go ahead.

Operator: We now turn to Jared Shaw with Barclays. Your line is open. Please go ahead.

Speaker #1: Shaw with Barclays. Your line is open. Please go

Speaker #1: ahead. Hey, good

[Analyst] (Barclays): Hey, good morning.

Jared Shaw: Hey, good morning.

Speaker #6: morning. Good

Jorge García: Good morning.

Speaker #6: Maybe, I guess, just sticking to the morning theme of growth outlook—when you look at fees, where do you see potential softness, I guess, in fees in that growth rate?

[Analyst] (Barclays): Maybe, I guess, just sticking to the theme of growth outlook, when you look at fees, where do you see potential softness, I guess, in fees and that growth rate? You've had some pretty good trends during the course of the year.

Jared Shaw: Maybe, I guess, just sticking to the theme of growth outlook, when you look at fees, where do you see potential softness, I guess, in fees and that growth rate? You've had some pretty good trends during the course of the year.

Speaker #6: You've had some pretty good trends during the course of the year.

Speaker #5: Yeah. Remember, Jared, one of the things that the '25 results included roughly 10 million of kind of unusual items, the recovery for prior periods of about 10 and then we also had some refunds of federal taxes that were recognized in fee income.

Jorge García: Yeah. Remember, Jared, one of the things that the 2025 results included roughly $10 million of kind of unusual items, the recovery for prior periods, about $10 million. And then we also had some refunds of federal taxes that were recognized in fee income. So that $10 million, really, if you look at the guide, you're making up for that $10 million next year. So there's a little bit more growth embedded in that guide than probably jumps out at you.

Speaker #5: So that 10 million really if you look at the guide, you're making up for that 10 million next year. So there's a little bit more growth embedded in that guide than probably jumps out at you.

Speaker #6: Okay, and then on capital, nice to see the buyback and the commentary around sort of the willingness to bring capital ratios down. How should we think about M&A with that backdrop?

[Analyst] (Barclays): Okay. And then on capital, nice to see the buyback and the commentary around sort of the willingness to bring capital ratios down. How should we think about M&A with that backdrop? And you certainly have the capital and the growth to do something, I guess, in terms of potential sizes or anything like that. Any thoughts you could share with us?

Jared Shaw: Okay. And then on capital, nice to see the buyback and the commentary around sort of the willingness to bring capital ratios down. How should we think about M&A with that backdrop? And you certainly have the capital and the growth to do something, I guess, in terms of potential sizes or anything like that. Any thoughts you could share with us?

Speaker #6: And you certainly have the capital and the growth to do something, I guess, in terms of potential sizes or anything like that. Any thoughts you could share with us?

Speaker #4: Sure. This is Javier. Well, our primary focus continues to be our transformation program. That said, in the U.S., we're always open to opportunities to add on profitable niche businesses.

Jorge García: Sure. This is Javier. Well, our primary focus continues to be our transformation program. That said, in the U.S., we're always open to opportunities to add on profitable niche businesses, teams, and assets. So whole bank M&A is not a priority. However, it would be responsible for us to say that we would not evaluate opportunities to enhance shareholder value over the long term. I think we said this before. There is a high threshold for any transaction that we may consider, and we'll evaluate opportunities to grow inorganically as long as they meet the following criteria to complement our U.S. business. First, it needs to be compelling enough for us to consider reallocating resources away from our transformation initiatives.

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Q4 2025 Popular Inc Earnings Call

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