Puerto Rican financial institution Popular (NASDAQ:BPOP) nearly met Wall Street’s revenue expectations in Q3 2026, but sales rose 7.4% year on year to $874.6 million. Its GAAP profit of $4.21 per share was 6.6% above analysts’ consensus estimates.
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Popular (BPOP) Q3 2026 highlights:
- Net Interest Income: $698.9 million vs analyst estimates of $737.1 million (8.1% year-on-year growth, 5.2% miss)
- Net Interest Margin: 3.6% vs analyst estimates of 4% (37.7 basis point miss)
- Revenue: $874.6 million vs analyst estimates of $887.6 million (7.4% year-on-year growth, 1.5% miss)
- Efficiency Ratio: 57.8% vs analyst estimates of 56.2% (164.9 basis point miss)
- EPS (GAAP): $4.21 vs analyst estimates of $3.95 (6.6% beat)
- Tangible Book Value per Share: $86.30 vs analyst estimates of $89.46 (13% year-on-year growth, 3.5% miss)
- Market Capitalization: $10.35 billion
"We reported earnings per share of $4.21, 3% lower than the second quarter and 34% higher than the third quarter of 2025, and a ROTCE of 15.80%. These results reflected higher net interest income, stable underlying credit trends and continued capital return, partially offset by higher operating expenses and lower non-interest income. During the quarter, we repurchased $179 million of common stock and declared a 20% increase in our quarterly common stock dividend to $0.90 per share."
Company overview
Founded in 1893 as the first bank in Puerto Rico to serve the working class, Popular (NASDAQ:BPOP) is a financial holding company that provides retail, mortgage, and commercial banking services primarily in Puerto Rico and the mainland United States.
Sales growth
From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Over the last five years, Popular grew its revenue at a tepid 6.9% compounded annual growth rate. This wasn’t a great result compared to the rest of the banking sector, but there are still things to like about Popular.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Popular’s annualized revenue growth of 8.7% over the last two years is above its five-year trend, which is encouraging.
Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Popular’s revenue grew by 7.4% year on year to $874.6 million.
Net interest income made up 78.1% of the company’s total revenue during the last five years, meaning lending operations are Popular’s largest source of revenue.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
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Tangible book value per share (TBVPS)
Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.
Popular’s TBVPS grew at a decent 5.5% annual clip over the last five years. TBVPS growth has accelerated recently, growing by 13.2% annually over the last two years from $67.40 to $86.30 per share.
Over the next 12 months, Consensus estimates call for Popular’s TBVPS to grow by 16.8% to $100.84, solid growth rate.
Key takeaways from Popular’s Q3 results
It was good to see Popular beat analysts’ EPS expectations this quarter. On the other hand, its net interest income missed and its tangible book value per share fell short of Wall Street’s estimates. Overall, this was a mixed quarter. The stock remained flat at $162.38 immediately following the results.
Is Popular an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).