Popular in P.R. cuts 3Q profite after restaurant borrower’s bankruptcy

Popular in Hato Rey, Puerto Rico, lowered its third-quarter profit after a quick-service restaurant borrower ceased substantially all operations and filed for Chapter 11 bankruptcy protection.

The $77.7 billion-asset company disclosed the change in a regulatory filing on Nov. 9. The bankruptcy came after Popular issued its third-quarter earnings release, so the bank is treating it as a recognized subsequent event and revising the quarter’s results.

The C&I relationship became nonperforming in the second quarter, and Popular recorded some reserves and chargeoffs on it in the third quarter. The filing didn’t name the borrower or give the size of the loan.

Net income fell by 9%, to $242.4 million. Popular added $38 million to its loan-loss provision, bringing the quarter’s total to $96.7 million. Lower income tax expense offset part of the hit.

Tangible book value slipped to $85.92 a share from $86.30, and return on tangible common equity fell to 14.39% from 15.80%.

Popular said it expects another chargeoff on the same relationship in the fourth quarter. It raised its full-year 2026 net chargeoff guidance to 90-95 basis points from 80-90 basis points and left the rest of its outlook unchanged.