Popular(US:BPOP)2024-08-09 20:52Financial Performance - Net income for the quarter ended June 30, 2024, was $177,789 thousand, up $26,629 thousand from the prior year[281]. - For the quarter ended June 30, 2024, the Corporation recorded net income of $177.8 million, an increase of 17.6% compared to $151.2 million for the same quarter of the previous year[290]. - Adjusted net income for the six months ended June 30, 2024, was $313,008 thousand, reflecting non-GAAP adjustments[285]. - Net income for the six months ended June 30, 2024, was $271.2 million, compared to $89.2 million for the same period in 2023[381]. - Banco Popular de Puerto Rico reported a net income of $157.2 million for Q2 2024, compared to $131.8 million in Q2 2023, attributed to higher net interest income and service fees[317]. Asset and Liability Management - As of June 30, 2024, total assets increased to $72,845,072 thousand, up $2,086,917 thousand from December 31, 2023[280]. - The Corporation's total liabilities were $67.5 billion at June 30, 2024, an increase of $1.9 billion from December 31, 2023[334]. - Stockholders' equity rose to $5.4 billion, an increase of $225.7 million, driven by net income of $281.1 million for the six months ended June 30, 2024[342]. - The Corporation's borrowings decreased to $1.0 billion as of June 30, 2024, down from $1.1 billion at the end of 2023[341]. - The Corporation's total deposits reached $54.5 billion at BPPR and $11.9 billion at Popular U.S. as of June 30, 2024, with a total of $65.5 billion consolidated[366]. Loan and Credit Quality - Loans reached $35,599,845 thousand, reflecting a $530,573 thousand increase compared to December 31, 2023[280]. - The total allowance for credit losses for loans held-in-portfolio amounted to $730.1 million as of June 30, 2024, with a ratio of 2.05% to loans held-in-portfolio, slightly down from 2.08% at December 31, 2023[306]. - The provision for loan losses for the six months ended June 30, 2024, was $116.5 million, an increase from $82.8 million for the same period in 2023[304]. - Total non-performing assets (NPAs) decreased by $26 million compared to December 31, 2023, with non-performing loans (NPLs) held-in-portfolio decreasing by $16 million[400]. - The allowance for credit losses to loans held-in-portfolio ratio was 2.56%, up from 2.05% in the previous period, indicating a strengthening of reserves[403]. Interest Income and Margin - Net interest income for the quarter ended June 30, 2024, was $568,312 thousand, an increase of $36,644 thousand from the same quarter in 2023[281]. - Net interest margin for the second quarter of 2024 was 3.22%, an increase of 8 basis points from 3.14% in the same quarter of the previous year[290]. - Taxable equivalent net interest income reached $1.2 billion, up by $75.6 million from the same period in 2023[301]. - Higher interest income from investment securities increased by $112.7 million, driven by a 75 basis point rise in yield due to reinvestment of maturities[301]. - The net interest margin for the six months ended June 30, 2024, was 3.36%, up from 3.26% for the same quarter in the previous year, driven by higher yields from investment securities and loans[321]. Dividends and Stockholder Returns - The Corporation announced a common stock repurchase program of up to $500 million on July 24, 2024[278]. - The quarterly common stock dividend will increase from $0.62 to $0.70 per share starting in the first quarter of 2025, pending Board approval[278]. - The Corporation declared cash dividends of $1.24 per common share for the six months ended June 30, 2024, totaling approximately $89.7 million[371]. - The Corporation's latest quarterly dividend was $0.62 per share, amounting to approximately $45 million per quarter[370]. Economic and Market Conditions - The Puerto Rico economy's real GNP is estimated to have grown by 2.8% during fiscal year 2024, with a projected growth of 1.4% for fiscal year 2025[387]. - Inflation in Puerto Rico increased by 2.5% during the 12-month period ended April 2024, compared to a 3.0% increase in the U.S.[388]. - The Economic Activity Index for Puerto Rico reflected a 2.0% year-over-year decline in April 2024[387]. Operating Expenses - Operating expenses for Q2 2024 increased to $469.6 million, a rise of $9.3 million compared to Q2 2023, primarily due to higher technology, personnel costs, and FDIC insurance expenses[310]. - For the first half of 2024, operating expenses totaled $952.7 million, an increase of $51.7 million year-over-year, with personnel costs contributing $22.6 million to the variance[311]. Credit Loss Provisions - The Corporation recorded a provision for credit losses of $46.8 million, up from $37.2 million in the same quarter of the previous year, driven by loan growth and higher reserves in the auto leasing portfolio[291]. - The provision for credit losses for the period ended June 30, 2024, was $44.2 million, an increase from $35.7 million for the same period in 2023[418]. - The total commercial loans held-in-portfolio was $17,728,126 thousand, with total commercial ACL at $260,087 thousand, resulting in an ACL to loans ratio of 1.47%[420].