Popular Q4 Earnings & Revenues Beat on Higher NII, Provisions Fall Y/Y

Core Viewpoint - Popular, Inc. (BPOP) reported strong fourth-quarter 2024 results, with adjusted earnings per share (EPS) of $2.51, exceeding the Zacks Consensus Estimate of $2.04 and significantly up from $1.31 in the same quarter last year [1][2]. Financial Performance - For the full year 2024, adjusted EPS was $8.56, beating the Zacks Consensus Estimate of $8.41, and up from $7.53 year-over-year [2]. - The company's net income (GAAP basis) for the fourth quarter was $177.8 million, an 88% increase year-over-year, while full-year net income was $614.2 million, a 13.4% increase [3]. - Total quarterly revenues reached $755.5 million, surpassing the Zacks Consensus Estimate of $740.72 million and reflecting a 7.5% increase from the previous year [4]. - Full-year revenues totaled $2.94 billion, up 5.7% year-over-year, and also exceeded the Zacks Consensus Estimate of $2.92 billion [4]. Income and Expenses - Net interest income (NII) for the fourth quarter was $590.8 million, a 10.6% increase year-over-year, with the net interest margin expanding by 27 basis points to 3.35% [4]. - Non-interest income decreased by 2.4% year-over-year to $164.7 million, primarily due to net losses from the sale of equity securities and trading account debt securities [5]. - Total operating expenses rose by 12% year-over-year to $467.6 million, driven by increases in personnel costs, processing and transactional services, and business promotion costs [5]. Loans and Deposits - As of December 31, 2024, total loans held-in-portfolio increased by 2.5% sequentially to $37.1 billion, while total deposits rose by 1.9% to $64.9 billion [6]. Credit Quality - The provision for credit losses in the fourth quarter was $66.1 million, down 16% from the prior-year quarter, indicating improved credit quality [7]. - Non-performing assets decreased by 6.8% year-over-year to $408 million, with the non-performing assets to total assets ratio improving to 0.56% from 0.62% a year earlier [7]. Capital Ratios - As of December 31, 2024, the Common Equity Tier 1 capital ratio and Tier 1 capital ratio were 16.03% and 16.08%, respectively, down from 16.30% and 16.36% in the previous year [8]. Share Repurchase - In the reported quarter, the company repurchased 2,256,420 shares of common stock for $217.3 million [9]. Strategic Outlook - The company is positioned to benefit from business transformation efforts and modernization of customer channels, with an increase in loans and deposits strengthening its balance sheet [10]. However, rising expenses may impact bottom-line growth in the near term [10].