Popular’s Q2 Earnings Call: Our Top 5 Analyst Questions

Popular’s second quarter results reflected strong underlying business trends, with management highlighting higher net interest income, expanding net interest margin, and robust loan and deposit growth as key drivers. CEO Javier Ferrer pointed to a “very strong 13.3% return on tangible common equity,” supported by disciplined credit quality and a $900 million increase in loans. CFO Jorge Garcia attributed the improved results to balance sheet growth and asset repricing, while also noting that deposit retention strategies contributed to lower deposit costs. Management also underscored improved credit performance and operational discipline as factors supporting profitability.

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

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 Popular’s Q2 Earnings Call

• Forrest Hamilton (RBC): asked about the impact of stablecoins on deposits and future business; CEO Javier Ferrer-Fernández said Popular has formed a team to study use cases, noting it is early but the bank is preparing for potential industry impacts.
• Timur Braziler (Wells Fargo): questioned how profit sharing accruals will track against revenue guidance; CFO Jorge Garcia explained the accrual will rise if outperformance continues, but is capped at 8% of eligible employee salaries.
• Timur Braziler (Wells Fargo): also inquired about deposit seasonality and competition; Garcia noted greater focus on deposit retention, some ongoing yield-seeking behavior, and that typical seasonal patterns are expected to persist.
• Kelly Motta (KBW): asked for more detail on loan growth drivers and U.S. runoff; Garcia responded that strong pipelines exist in both regions, but expects some construction loan payoffs later in the year.
• Jared Shaw (Barclays): sought clarity on federal stimulus impact on large loan deals; Ferrer-Fernández confirmed fund deployment is accelerating in Puerto Rico, with more projects likely but no immediate pipeline for public-private partnerships.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be tracking (1) the execution of Popular’s transformation initiatives to improve efficiency and customer experience, (2) the pace of loan growth, particularly in infrastructure and commercial sectors, and (3) the effectiveness of deposit retention strategies amid evolving competition. Additionally, we will monitor credit quality trends as the economic environment shifts and federal recovery funds are deployed.

Popular currently trades at $114.82, in line with $115.19 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

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