Popular(US:BPOP)2025-08-11 20:08Part I – Financial Information Financial Statements Popular, Inc.'s unaudited consolidated financial statements as of June 30, 2025, show total assets increased to $76.1 billion, with Q2 2025 net income rising to $210.4 million and six-month net income to $387.9 million, driven by loan growth and higher net interest income Consolidated Financial Position Highlights | Financial Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Assets | $76,065,090 | $73,045,383 | | Total Loans Held-in-Portfolio, net | $37,415,693 | $36,361,628 | | Total Deposits | $67,217,491 | $64,884,345 | | Total Liabilities | $70,111,072 | $67,432,317 | | Total Stockholders' Equity | $5,954,018 | $5,613,066 | Consolidated Operational Highlights | Financial Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | 6 Months 2025 (in thousands) | 6 Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $631,549 | $568,312 | $1,237,146 | $1,119,056 | | Provision for Credit Losses | $48,941 | $46,794 | $113,022 | $119,392 | | Net Income | $210,440 | $177,789 | $387,942 | $281,072 | | Net Income per Common Share – Diluted | $3.09 | $2.46 | $5.64 | $3.90 | Notes to Unaudited Consolidated Financial Statements Notes detail accounting policies, financial instruments, and segment performance, highlighting $20.5 billion in available-for-sale securities, a $38.2 billion loan portfolio, $769.5 million in credit loss allowance, $67.2 billion in deposits, and BPPR as the primary profit driver Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong Q2 2025 performance to increased net interest income and margin, loan growth, and deposit increases, with improved credit quality and a robust capital position supporting a dividend increase and new stock repurchase program - Net income for Q2 2025 was $210.4 million, a $32.6 million increase from Q2 2024, primarily due to a $63.2 million rise in net interest income329331 - The net interest margin (NIM) expanded by 27 basis points year-over-year to 3.49%, driven by loan growth, higher yields on U.S. Treasuries, and lower deposit costs331348 - Total assets grew by $3.1 billion to $76.1 billion since year-end 2024, while deposits increased by $2.3 billion to $67.2 billion, largely from Puerto Rico public deposits331 - On July 16, 2025, the Corporation announced a quarterly dividend increase to $0.75 per share and a new $500 million stock repurchase program324326 Statement of Operations Analysis Q2 2025 saw net interest income rise to $631.5 million due to loan growth and lower deposit costs, with slight increases in credit loss provision, non-interest income, and operating expenses, while the effective tax rate remained stable Key Operating Metrics (Q2 2025 vs Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | Variance | | :--- | :--- | :--- | :--- | | Net Interest Income | $631.5 | $568.3 | $63.2 | | Provision for Credit Losses | $48.9 | $46.8 | $2.1 | | Non-Interest Income | $168.5 | $166.3 | $2.2 | | Operating Expenses | $492.8 | $469.6 | $23.2 | | Income Before Tax | $258.3 | $218.2 | $40.1 | - The increase in operating expenses was primarily driven by a $31.9 million rise in personnel costs due to higher incentives and salaries, partially offset by a $9.6 million decrease in professional fees365368 Statement of Financial Condition Analysis Total assets grew to $76.1 billion by June 30, 2025, driven by increases in available-for-sale securities and the loan portfolio, while deposits rose to $67.2 billion, and stockholders' equity reached $6.0 billion due to strong earnings - Loans held-in-portfolio grew by $1.1 billion since year-end 2024, with notable increases in commercial (+$428M), construction (+$204M), and mortgage (+$330M) portfolios385386 - Puerto Rico public deposits increased by $1.5 billion to $20.9 billion, representing 31% of total deposits as of June 30, 2025389 - Stockholders' equity increased to $6.0 billion, driven by $387.9 million in net income and a $261.8 million positive change in accumulated other comprehensive income, net of tax, for the six-month period17395 Capital The Corporation maintains a well-capitalized position with all ratios exceeding regulatory requirements, including a 15.91% CET1 ratio, and saw its tangible book value per common share increase to $75.41 Regulatory Capital Ratios | Ratio | June 30, 2025 | December 31, 2024 | Well-Capitalized Minimum | | :--- | :--- | :--- | :--- | | Common Equity Tier 1 | 15.91% | 16.03% | 6.5% | | Tier 1 Capital | 15.96% | 16.08% | 8.0% | | Total Capital | 17.70% | 17.83% | 10.0% | | Tier 1 Leverage | 8.51% | 8.66% | 5.0% | - Tangible book value per common share increased to $75.41 at June 30, 2025, from $68.16 at December 31, 2024405 Risk Management The Corporation actively manages market and interest rate risks, maintains an asset-sensitive position, improved credit quality with reduced non-performing assets, and boasts strong liquidity sources totaling $26.1 billion - The Corporation's Net Interest Income (NII) is asset-sensitive. A +100 basis point parallel shift in interest rates is projected to increase NII by $10.5 million over one year411412 - Total non-performing assets (NPAs) decreased by $50.3 million to $357.8 million at June 30, 2025, from December 31, 2024. The ratio of non-performing loans (NPLs) to total loans improved to 0.82% from 0.95%482483 - Total available liquidity sources increased to $26.1 billion as of June 30, 2025, up from $21.6 billion at year-end 2024, enhanced by the ability to pledge auto loans as collateral at the Federal Reserve's discount window423424 Quantitative and Qualitative Disclosures about Market Risk The report refers to the Market Risk section within Management's Discussion and Analysis for quantitative and qualitative disclosures about market risk, indicating no material changes beyond what is discussed there and in the 2024 Form 10-K - Disclosures regarding market risk for the current period are located in the Market Risk section of the MD&A515 Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the Corporation's disclosure controls and procedures were effective as of the end of the reporting period516 - No material changes occurred in the Corporation's internal control over financial reporting during the quarter ended June 30, 2025517 Part II – Other Information Legal Proceedings The company is involved in various legal proceedings, with estimated reasonably possible losses ranging from $0 to approximately $7.1 million as of June 30, 2025, as detailed in Note 20 of the Consolidated Financial Statements - The estimated range of reasonably possible losses for current legal proceedings, beyond existing accruals, is between $0 and approximately $7.1 million as of June 30, 2025229 Risk Factors No material changes have occurred to the risk factors previously disclosed in the Corporation's 2024 Form 10-K, advising readers to consider those discussed in that report - No material changes have been made to the risk factors disclosed in the Corporation's 2024 Form 10-K520 Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, the Corporation repurchased 1,136,390 common shares for approximately $112.0 million, with about $48.4 million remaining available under the 2024 repurchase program as of June 30, 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | Approx. Dollar Value Remaining | | :--- | :--- | :--- | :--- | :--- | | April 2025 | 357,832 | $87.37 | 355,539 | $129,330,233 | | May 2025 | 447,956 | $101.50 | 417,666 | $86,774,331 | | June 2025 | 380,593 | $105.93 | 363,185 | $48,375,729 | | Total Q2 | 1,186,381 | $98.66 | 1,136,390 | $48,375,729 | - As of June 30, 2025, the Corporation has repurchased a total of $451.5 million under its $500 million share repurchase authorization announced in July 2024523 Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications pursuant to the Sarbanes-Oxley Act, compensation agreements, and XBRL data files