Group 1 - High-yield stocks attract income-focused investors due to their potential for higher dividends compared to normal or low-yielding stocks [1] - The company invests significant resources, including thousands of hours and over $100,000 annually, into researching profitable investment opportunities [2] - The approach has resulted in over 180 five-star reviews from satisfied members who are experiencing benefits [2] Group 2 - The company offers high-yield strategies at a fraction of the cost, aiming to maximize returns for investors [2] - Immediate access to top investment picks is available for new members, highlighting the urgency of joining [1]

Core Viewpoint - Popular, Inc. (BPOP) reported a strong quarterly performance with adjusted earnings per share (EPS) of $2.56, exceeding expectations and showing significant year-over-year growth [1][2]. Financial Performance - The company's net income on a GAAP basis reached $177.5 million, reflecting a 71.9% increase year over year [2]. - Total quarterly revenues amounted to $757.7 million, surpassing the Zacks Consensus Estimate of $756.1 million and increasing by 6% from the previous year [3]. - Net interest income (NII) was reported at $605.6 million, a 10% rise year over year, with the net interest margin expanding by 24 basis points to 3.40% [3]. Income and Expenses - Non-interest income decreased by 7.2% year over year to $152.1 million, primarily due to lower income from mortgage banking activities and losses on equity securities [4]. - Total operating expenses fell by 2.5% year over year to $471 million, driven by reductions in personnel costs and other operating expenses [4]. Loans and Deposits - As of March 31, 2025, total loans held-in-portfolio increased slightly to $37.3 billion, while total deposits rose by 1.4% to $65.8 billion [5]. Credit Quality - The provision for credit losses was $64.1 million, down 11.7% from the prior year, indicating improved credit quality [6]. - Non-performing assets decreased by 15.8% year over year to $366.2 million, with the non-performing assets to total assets ratio improving to 0.49% [6]. Capital Ratios - As of March 31, 2024, the Common Equity Tier 1 capital ratio and Tier 1 capital ratio were 16.11% and 16.16%, respectively, showing a decline from the previous year [7]. Share Repurchase - In the reported quarter, the company repurchased 1,270,569 shares of common stock for a total of $222.3 million [8]. Strategic Outlook - The company is positioned to benefit from its business transformation efforts and modernization of customer channels, with an increase in loans and deposits strengthening its balance sheet [9].

Popular (BPOP) Q1 2025 Earnings Call April 23, 2025 11:00 AM ET Company Participants Paul Cardillo - Senior VP & Investor Relations OfficerIgnacio Alvarez - CEOJavier D. Ferrer - President & COOJorge Garcia - Executive VP & CFOLidio Soriano - Executive VP & Chief Risk Officer of Corporate Risk Management GroupFrank Schiraldi - Managing DirectorBen Gerlinger - Vice President of Equity ResearchGerard Cassidy - Managing DirectorTimur Braziler - Director - Mid-Cap Bank Equity ResearchJared Shaw - Managing Direc ...

Financial Performance - Net income for Q1 2025 was $177.5 million, slightly down from $177.8 million in Q4 2024[2] - EPS rose to $2.56 in Q1 2025, compared to $2.51 in Q4 2024[4] - Net income for Q1 2025 was $177.502 million, a slight decrease from $177.817 million in Q4 2024, but a significant increase from $103.283 million in Q1 2024, reflecting a year-over-year growth of 71.8%[63] - The effective tax rate for the first quarter of 2025 was 20.2%, compared to 19.8% for the previous quarter[29] - Return on average common equity improved to 10.07% in Q1 2025, compared to 9.94% in Q4 2024 and 6.07% in Q1 2024[60] - The return on average tangible common equity for the first quarter of 2025 is reported at 11.36%, an increase from 11.22% in the previous quarter[101] Income and Revenue - Net interest income increased to $605.6 million in Q1 2025, up $14.8 million from Q4 2024[4] - Total interest income for Q1 2025 was $916.998 million, a slight decrease of 0.3% from $919.767 million in Q4 2024, but an increase of 2.6% from $894.141 million in Q1 2024[62] - Net interest income after provision for credit losses rose to $541.516 million in Q1 2025, up 3.2% from $524.657 million in Q4 2024 and 13.3% from $478.146 million in Q1 2024[62] - Total non-interest income decreased to $152.1 million in Q1 2025, down from $164.7 million in Q4 2024[4] - Total non-interest income decreased to $152.061 million in Q1 2025, down 7.7% from $164.703 million in Q4 2024, but relatively stable compared to $163.818 million in Q1 2024[62] Assets and Liabilities - Total assets amounted to $74.0 billion at March 31, 2025, an increase of $993.2 million from the previous quarter[45] - Total liabilities increased to $68,238,911 thousand, up by $806,594 thousand from the prior quarter[64] - Total stockholders' equity increased to $5,799,695 thousand from the previous quarter, primarily due to net income of $177.5 million[45] - The total assets of the company reached $74,038,606,000 as of March 31, 2025, up from $73,045,383,000 at the end of 2024[101] Loans and Credit Quality - Loans held in portfolio rose to $37.3 billion, an increase of $146.4 million from Q4 2024[4] - Non-performing loans decreased by $36.7 million, with the NPLs to loans ratio at 0.84%[4] - The provision for loan losses for the first quarter of 2025 was $65.2 million, a decrease from $69.1 million in the previous quarter[39] - Net charge-offs for the quarter were $49.1 million, down $18.3 million from the fourth quarter of 2024, with an annualized NCO ratio of 0.53%[31][42] - Total non-performing assets decreased to $366.2 million as of March 31, 2025, from $408.0 million in the previous quarter[42] - The total current loans amount to $36.113 billion, reflecting a stable loan portfolio[85] - The total loans held-in-portfolio increased to $37.254 billion from $37.107 billion, indicating growth in the loan portfolio[85] Capital and Ratios - Common Equity Tier 1 ratio stood at 16.11% as of March 31, 2025[4] - Tier 1 capital ratio remained strong at 16.16% in Q1 2025, slightly up from 16.08% in Q4 2024[60] - The allowance for credit losses (ACL) as of March 31, 2025, was $762.1 million, an increase of $16.1 million from the previous quarter, resulting in an ACL to loans ratio of 2.05%[36][38] - The allowance for credit losses to loans held-in-portfolio increased to 2.05% from 2.01%[85] Shareholder Actions - Capital actions included the repurchase of 1,270,569 shares for $122.3 million during Q1 2025[4] - The Corporation repurchased 1.3 million shares of common stock at an average price of $96.24 during the first quarter of 2025[47] Market Performance - The market capitalization of Popular, Inc. was $6.372 billion as of March 31, 2025, down from $6.597 billion at the end of Q4 2024[60]

Loan Portfolio - Approximately 55% of the loan portfolio as of December 31, 2024, consisted of real estate-related loans, including residential mortgage loans, construction loans, and commercial loans secured by commercial real estate[29]. - The total loan portfolio amounted to $37.108 billion, with commercial and industrial loans making up 21% and mortgage loans accounting for 22%[30]. - The loan portfolio is diversified by category, with commercial and industrial loans making up 21% of the total portfolio[30]. - Approximately 26% of the loan portfolio is comprised of mortgage loans, indicating a strong focus on residential lending[30]. Company Operations - The company operates primarily in Puerto Rico, where it has the largest retail banking franchise, and also has a presence in the mainland United States, specifically in New York, New Jersey, and Florida[24]. - The Corporation's banking operations in Puerto Rico are primarily conducted through Banco Popular de Puerto Rico, which has the largest retail banking franchise in the region[7]. - The company’s lending activities are concentrated in commercial, mortgage, consumer, construction, and lease financings, with commercial loans being a significant portion of the portfolio[24][25][26][27]. - The company’s operations are significantly influenced by the economic trends in Puerto Rico, particularly in the residential and commercial real estate markets[28]. Competition and Market Environment - The competitive landscape includes local commercial banks, credit unions, and specialized financial institutions, with significant pressure on pricing and service delivery[44][45][46]. - The company faces substantial competition in both Puerto Rico and the mainland United States, requiring effective strategies to maintain market share[47]. Credit Policies and Risk Management - The company’s credit policies are designed to mitigate credit risk, with comprehensive procedures for monitoring and evaluating loan portfolio quality[34]. - The company has specialized workout officers to manage commercial loans that are past due 90 days and over, focusing on minimizing potential losses[40]. Financial Performance and Capital Management - The Corporation expects to achieve at least a 12% return on tangible common equity (ROTCE) by the end of 2025, down from an earlier target of 14% due to higher-cost deposits and lower loan growth[50]. - As of December 31, 2024, Popular had total consolidated assets of $73.0 billion, placing it under the most stringent regulatory standards[65]. - Both BPPR and PB met the quantitative requirements for 'well capitalized' status, indicating a total risk-based capital ratio of 10.0% or greater[92]. - Popular is required to maintain a capital conservation buffer of 2.5% of CET1, resulting in minimum ratios of at least 7% CET1 to risk-weighted assets[79]. - Popular has opted to phase in the regulatory capital effects of the Current Expected Credit Loss (CECL) model over three years, impacting future capital ratios[86]. Employee Engagement and Development - The Corporation invested more than $13 million in enhancing employee compensation in 2024, with 98% of employees participating in the 401(k) savings plan[54]. - The employee turnover rate was maintained at 8.6% as of the end of 2024, with an employee loyalty score of 81%, above the 50th percentile of the Qualtrics global benchmark[59]. - The Corporation's internal mobility rate in 2024 was 44%, indicating strong opportunities for employee advancement[56]. - More than 4,100 employees participated in various training programs, highlighting the Corporation's focus on talent development[55]. - The health and wellness center at the corporate offices received over 15,561 visits from employees during 2024, emphasizing the Corporation's commitment to employee well-being[52]. Regulatory Compliance and Legal Obligations - The FDIC's increased deposit insurance assessment rates began in 2023, aimed at restoring the DIF reserve ratio to meet statutory minimums by 2028[72]. - The SEC has adopted new rules requiring registrants to report material cybersecurity incidents on Form 8-K and disclose cybersecurity policies in the Annual Report on Form 10-K[118][119]. - The Federal Reserve Board may limit Popular's ability to conduct activities and make acquisitions as a financial holding company, requiring prior approval for acquisitions of nonbank companies with $10 billion or more in total assets[102]. - The Volcker Rule restricts Popular and its subsidiaries from engaging in certain proprietary trading and sponsoring covered funds, but it does not materially affect operations[103]. - The Community Reinvestment Act requires banks to serve the credit needs of their communities, with new regulations effective April 1, 2024, and certain data reporting requirements starting January 1, 2027[108]. Dividends and Shareholder Returns - BPPR declared cash dividends of $600 million during the year ended December 31, 2024, with a portion used for Popular's common stock dividends[93]. - At December 31, 2024, BPPR needed prior approval from the Federal Reserve Board before declaring a dividend in excess of $318 million due to its retained income and declared dividend activity[93].

Financial Data and Key Metrics Changes - The company reported an annual net income of $614 million for 2024, up from $541 million in 2023, with an adjusted net income of $646 million, reflecting a 10% increase year-over-year [5][6] - The common equity tier 1 (CET1) ratio ended the year at 16%, while tangible book value per share increased by 14% year-over-year to $68.16 [8][29] - Net interest income (NII) for the fourth quarter increased by $18 million, contributing to a 7% year-over-year increase in NII [10][16] Business Line Data and Key Metrics Changes - Total loan growth for the year reached $2 billion, a 5.8% increase, with strong performance in commercial loans [6][17] - Mortgage loan balances increased by $114 million in the fourth quarter, driven by home purchase activity [13] - Non-interest income remained flat at $165 million compared to the previous quarter, with the sale of the daily car rental business expected to impact future non-interest income [20][21] Market Data and Key Metrics Changes - The unemployment rate in Puerto Rico is currently at 5.4%, with consumer spending showing healthy trends, including a 5% increase in combined credit and debit card sales [12][13] - Passenger traffic at San Juan International Airport increased by 10% in the fourth quarter compared to the same period in 2023, indicating a strong tourism sector [14] Company Strategy and Development Direction - The company plans to continue its transformation efforts to meet changing customer needs and generate sustainable value for shareholders [43][44] - The ongoing disbursement of federal funds is expected to support economic activity in Puerto Rico for several years [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Puerto Rican economy's stability and the company's position to support clients in the coming years [15][44] - The company anticipates consolidated loan growth of 3% to 5% in 2025, with NII expected to increase by 7% to 9% [27][28] Other Important Information - The company resumed share buybacks with a $500 million authorization, repurchasing approximately $220 million worth of shares in 2024 [9][30] - The effective tax rate for the fourth quarter was 20%, with expectations for 2025 to be in the range of 19% to 21% [24] Q&A Session Summary Question: Trends in funding costs and deposit balances - Management noted an increase in deposits in the fourth quarter, with non-public deposits rising by about $600 million [50][52] Question: Margin expectations for the year - Management indicated that NIM is expected to continue expanding in 2025, driven by lower deposit costs [56][58] Question: Credit card portfolio charge-offs - Management acknowledged an increase in charge-offs but expressed optimism about recent performance trends [60] Question: Seasonal deposit inflows - Management confirmed that the outlook includes estimates of potential outflows but emphasized efforts to retain deposits [66][68] Question: Changes in underwriting standards for credit cards - Management stated that underwriting criteria have been tightened, with higher FICO scores for new originations [155]

Financial Highlights - Adjusted net income reached $646 million, a $59 million or 10% increase year-over-year[4] - Net Interest Margin (NIM) expanded by 11 bps to 3.24%, while Net Interest Margin FTE expanded by 18 bps to 3.49%[4] - Loans held in portfolio grew by $2.043 billion or 5.8%, primarily in commercial loans[4] - Total deposit costs increased by 39 bps, driven by P.R government deposits and high cost online deposits[4] - Tangible book value per share increased by $8.42 to $68.16[4] Credit Quality - Non-Performing Loan (NPL) ratio decreased by 7 bps to 0.95%[4] - Net Charge-Off (NCO) ratio was 0.68% compared to 0.44% in 2023[4] - Allowance for Credit Losses (ACL) to NPL ratio improved to 213% from 204% in 2023[4] Capital Actions - A $500 million common stock repurchase authorization was announced in Q3 2024[4] - $217 million was repurchased through the end of 2024 at an average price of $96.32 per share[4] - The quarterly common stock dividend increased from $0.62 to $0.70 per share beginning with the dividend declared in Q4[4]

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) Popular, Inc. reported solid Q4 2024 financial results with increased net income, strong loan growth, and improved net interest income and margin [Overall Performance & CEO Commentary](index=1&type=section&id=Overall%20Performance%20%26%20CEO%20Commentary) Popular, Inc. reported solid Q4 2024 financial results with increased net income, strong loan growth, and improved net interest income and margin - Net income for Q4 2024 was **$177.8 million**, up from **$155.3 million** in Q3 2024[1](index=1&type=chunk) - Net income for the year 2024 was **$614.2 million**, compared to **$541.3 million** for the year 2023. Excluding expenses incurred in connection with the FDIC Special Assessment and prior period tax withholdings, the adjusted net income for 2024 was **$646.1 million**, compared to **$586.6 million** in 2023[2](index=2&type=chunk) - The Corporation recommenced share buybacks, repurchasing **2,256,420 shares** for **$217.3 million** in 2024, and increased its quarterly common stock dividend from **$0.62 to $0.70 per share**[2](index=2&type=chunk) - The company is making meaningful progress in the modernization of customer channels and enhancement of customer experience through its Transformation initiative[4](index=4&type=chunk) [Earnings Highlights](index=2&type=section&id=Earnings%20Highlights) This section presents a consolidated overview of key financial performance indicators for the quarters and years ended December 31, 2024, and 2023, including net interest income, provision for credit losses, non-interest income, operating expenses, and net income per common share Earnings Highlights (in thousands) | Metric | Q4 2024 (in thousands) | Q3 2024 (in thousands) | Q4 2023 (in thousands) | Year 2024 (in thousands) | Year 2023 (in thousands) | | :----------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net interest income | $590,759 | $572,473 | $534,180 | $2,282,288 | $2,131,524 | | Provision for credit losses | 66,102 | 71,448 | 78,663 | 256,942 | 208,609 | | Other non-interest income | 164,703 | 164,082 | 168,743 | 658,909 | 650,724 | | Operating expenses | 467,627 | 467,321 | 531,145 | 1,887,637 | 1,898,100 | | Net income | $177,817 | $155,323 | $94,594 | $614,212 | $541,342 | | Net income per common share-basic | $2.51 | $2.16 | $1.31 | $8.56 | $7.53 | | Dividends Declared per Common Share | $0.70 | $0.62 | $0.62 | $2.56 | $2.27 | [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) This section clarifies the use of non-GAAP financial measures, such as Net Interest Income on a Taxable Equivalent Basis and Tangible Common Equity, explaining their utility for management and analysts [Explanation of Non-GAAP Measures](index=2&type=section&id=Explanation%20of%20Non-GAAP%20Measures) This section clarifies the use of non-GAAP financial measures, such as Net Interest Income on a Taxable Equivalent Basis and Tangible Common Equity, explaining that management uses them to provide more meaningful information about ongoing operations and for comparability, while also noting they should not be used in isolation from GAAP measures - Management uses non-GAAP financial measures when it has determined that these measures provide more meaningful information about the underlying performance of the Corporation's ongoing operations[6](index=6&type=chunk) - Net interest income on a taxable equivalent basis provides meaningful information as it facilitates the comparison of revenues arising from taxable and tax-exempt sources[7](index=7&type=chunk) - Tangible common equity and related ratios are commonly used by banks and analysts to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets[8](index=8&type=chunk) [Adjusted Net Income Reconciliation](index=3&type=section&id=Adjusted%20Net%20Income%20Reconciliation) This section provides a reconciliation of U.S. GAAP net income to adjusted net income (non-GAAP) for the years ended December 31, 2024, and 2023, detailing adjustments related to the FDIC Special Assessment and prior period tax withholdings Adjusted Net Income Reconciliation (in thousands) | (In thousands) | Income before income tax | Income tax expense (benefit) | Total | | :------------------------------------------------- | :----------------------- | :--------------------------- | :------ | | **Year Ended December 31, 2024** | | | | | U.S. GAAP Net income | $796,618 | $182,406 | $614,212 | | FDIC Special Assessment | 14,287 | (5,234) | 9,053 | | Adjustments related to tax withholdings | 6,400 | 16,483 | 22,883 | | **Adjusted net income (Non-GAAP)** | **$817,305** | **$171,157** | **$646,148** | | **Year Ended December 31, 2023** | | | | | U.S. GAAP Net income | $675,539 | $134,197 | $541,342 | | FDIC Special Assessment | 71,435 | (26,170) | 45,265 | | **Adjusted net income (Non-GAAP)** | **$746,974** | **$160,367** | **$586,607** | - There were no adjustments to net income for the quarters ended December 31, 2024, and September 30, 2024[12](index=12&type=chunk) [Net Interest Income and Margin Analysis](index=4&type=section&id=Net%20Interest%20Income%20and%20Margin%20Analysis) This section analyzes the Corporation's net interest income and margin performance, detailing contributions from consolidated operations and segment-specific results for BPPR and Popular Bank [Consolidated Net Interest Income and Margin](index=4&type=section&id=Consolidated%20Net%20Interest%20Income%20and%20Margin) The Corporation's net interest income increased by $18.3 million to $590.8 million in Q4 2024, with the net interest margin rising by 11 basis points to 3.35% - Net interest income for Q4 2024 was **$590.8 million**, an increase of **$18.3 million** compared to **$572.5 million** in Q3 2024[16](index=16&type=chunk) - Net interest margin for Q4 2024 was **3.35%**, compared to **3.24%** in Q3 2024, an increase of **11 basis points**[16](index=16&type=chunk) - Net interest income on a taxable equivalent basis for Q4 2024 was **$638.5 million**, an increase of **$25.6 million** from Q3 2024, with a margin of **3.62%** (up **15 basis points**)[17](index=17&type=chunk) - Lower interest expense on deposit accounts by **$35.3 million**, mainly associated with reductions in market-linked P.R. Government deposit accounts and repricing across most other deposit products[19](index=19&type=chunk) - Higher interest income from loans by **$10.6 million** driven by higher volumes across most loan portfolios[19](index=19&type=chunk) [Banco Popular de Puerto Rico (BPPR) Segment](index=5&type=section&id=Banco%20Popular%20de%20Puerto%20Rico%20(BPPR)%20Segment) The BPPR segment's net interest income increased by $18.9 million to $506.9 million in Q4 2024, with its net interest margin rising by 15 basis points to 3.56% - Net interest income for the BPPR segment amounted to **$506.9 million** in Q4 2024, an increase of **$18.9 million** from Q3 2024[20](index=20&type=chunk) - Net interest margin for BPPR increased by **15 basis points** to **3.56%** in Q4 2024[20](index=20&type=chunk) - Lower interest expense on deposit accounts by **$30.7 million**, mainly driven by a **$27.4 million** decrease in the cost of P.R. Government deposits[24](index=24&type=chunk) - Higher interest income from loans by **$8.8 million**, primarily from higher average balances in commercial, auto, and mortgage loans[24](index=24&type=chunk) - Offset by lower interest income from investments in securities and money market investments by **$11.0 million** and **$10.0 million**, respectively[21](index=21&type=chunk) [Popular Bank (PB) Segment](index=5&type=section&id=Popular%20Bank%20(PB)%20Segment) The Popular Bank segment experienced a slight decrease in net interest income by $1.0 million to $92.2 million in Q4 2024, with its net interest margin decreasing by 2 basis points to 2.71% - Net interest income for the Popular Bank segment was **$92.2 million**, **$1.0 million** lower when compared to Q3 2024[22](index=22&type=chunk) - Net interest margin for Popular Bank decreased by **2 basis points** to **2.71%** in Q4 2024[22](index=22&type=chunk) - Lower interest income from money markets by **$6.7 million** due to lower volumes and yields[22](index=22&type=chunk)[25](index=25&type=chunk) - Offset by lower interest expense on deposit accounts by **$4.7 million** driven by a decrease in deposit costs and lower volumes in high-cost interest bearing deposit accounts[22](index=22&type=chunk)[25](index=25&type=chunk) - Offset by higher income from loans by **$0.4 million** mainly due to higher volumes in the commercial and construction loan portfolios[22](index=22&type=chunk)[25](index=25&type=chunk) [Non-Interest Income](index=6&type=section&id=Non-Interest%20Income) Non-interest income for Q4 2024 increased slightly by $0.6 million to $164.7 million, primarily due to higher income from mortgage banking activities, driven by favorable fair value adjustments of mortgage servicing rights - Non-interest income amounted to **$164.7 million** for Q4 2024, an increase of **$0.6 million** when compared to **$164.1 million** for Q3 2024[26](index=26&type=chunk) - The variance was primarily due to higher income from mortgage banking activities by **$3.6 million**, mainly due to a favorable variance in the fair value adjustment of mortgage servicing rights[26](index=26&type=chunk) - Partially offset by lower income in equity securities by **$1.9 million**[26](index=26&type=chunk) - Popular Auto LLC completed the sale of its daily car rental business, transferring approximately **$52.1 million** in assets[27](index=27&type=chunk) [Operating Expenses](index=6&type=section&id=Operating%20Expenses) Operating expenses for Q4 2024 remained relatively flat at $467.6 million, with a slight increase of $0.3 million compared to the previous quarter - Operating expenses for Q4 2024 totaled **$467.6 million**, an increase of **$0.3 million** when compared to Q3 2024[28](index=28&type=chunk) - Higher professional fees by **$5.7 million** mainly due to consulting fees related to corporate initiatives and IT projects[31](index=31&type=chunk) - Higher business promotion expense by **$4.2 million** mainly due to seasonal projects and higher donations[31](index=31&type=chunk) - Higher personnel costs by **$3.9 million** mainly due to higher incentive compensation and health insurance costs[31](index=31&type=chunk) - Lower technology and software expenses by **$7.1 million**, mainly due to IT projects which have reached the development stage and whose related costs are capitalized[31](index=31&type=chunk) - Lower equipment expense by **$4.5 million**, mainly due to a decrease in daily rental vehicle fleet depreciation as a result of the vehicles sold as part of the daily car rental business transaction[31](index=31&type=chunk) - Full-time equivalent employees were **9,231** as of December 31, 2024, compared to **9,246** as of September 30, 2024[28](index=28&type=chunk) [Income Taxes](index=6&type=section&id=Income%20Taxes) The Corporation recorded an income tax expense of $43.9 million in Q4 2024, with an effective tax rate (ETR) of 19.8%, down from 21.5% in the previous quarter - For Q4 2024, the Corporation recorded an income tax expense of **$43.9 million**, compared to **$42.5 million** for Q3 2024[29](index=29&type=chunk) - The effective tax rate (ETR) for Q4 2024 was **19.8%**, compared to **21.5%** for Q3 2024[30](index=30&type=chunk) - The ETR for the year ended December 31, 2024, was **22.9%** (**20.9%** excluding FDIC Special Assessment and prior period tax withholding adjustment), compared to **19.9%** for the previous year (**21.5%** adjusted)[30](index=30&type=chunk) [Credit Quality](index=7&type=section&id=Credit%20Quality) This section provides an overview of Popular, Inc.'s credit quality, detailing trends in non-performing loans, net charge-offs, other real estate owned, and allowance for credit losses across segments [Overview](index=7&type=section&id=Overview) Popular, Inc.'s credit quality metrics remained stable in Q4 2024, with non-performing loans (NPLs), net charge-offs (NCOs), and inflows to NPLs below historical averages - The Corporation's credit quality metrics remained stable in Q4 2024, with NPLs, NCOs, and inflows to NPLs below historical averages[32](index=32&type=chunk) - Auto loans and credit cards portfolios continued to show increases in delinquencies and NCOs, while mortgage and commercial portfolios continued to operate with strong credit quality trends[32](index=32&type=chunk) - Management believes improvements in risk management practices and the overall risk profile of the loan portfolio position the Corporation to operate successfully in the current environment[32](index=32&type=chunk) [Non-Performing Loans (NPLs) and Net Charge-Offs (NCOs)](index=7&type=section&id=Non-Performing%20Loans%20(NPLs)%20and%20Net%20Charge-Offs%20(NCOs)) Total NPLs decreased by $10.6 million in Q4 2024, with the NPLs to total loans ratio falling to 0.95% - Total NPLs decreased by **$10.6 million** compared to Q3 2024[33](index=33&type=chunk) - The ratio of NPLs to total loans held in the portfolio was **0.95%** for Q4 2024, compared to **1.0%** for Q3 2024[33](index=33&type=chunk) - Total NCOs of **$67.4 million**, increased by **$8.9 million** when compared to Q3 2024. The annualized NCOs to average loans held-in-portfolio ratio was **0.74%** vs. **0.65%** in Q3 2024[33](index=33&type=chunk) - In the BPPR segment, NPLs increased by **$3.3 million**, mainly driven by higher auto loans and leases NPLs[40](index=40&type=chunk) - In the PB segment, NPLs decreased by **$13.9 million** driven by a **$17.3 million** commercial loan sale[40](index=40&type=chunk) - In the BPPR segment, NCOs increased by **$8.0 million** quarter-over-quarter, mainly driven by higher consumer NCOs[40](index=40&type=chunk) [Other Real Estate Owned (OREO)](index=7&type=section&id=Other%20Real%20Estate%20Owned%20(OREO)) The Corporation's OREO portfolio decreased by $5.8 million to $57.3 million as of December 31, 2024, primarily due to the sale of residential OREO properties within the BPPR segment - As of December 31, 2024, the Corporation's OREO portfolio amounted to **$57.3 million**, a decrease of **$5.8 million** when compared to Q3 2024[34](index=34&type=chunk) - The decrease in OREO assets was driven by the sale of residential OREO properties in the BPPR segment[34](index=34&type=chunk) [Allowance for Credit Losses (ACL) and Provision for Credit Losses (PCL)](index=7&type=section&id=Allowance%20for%20Credit%20Losses%20(ACL)%20and%20Provision%20for%20Credit%20Losses%20(PCL)) The Allowance for Credit Losses (ACL) increased slightly by $1.7 million to $746.0 million as of December 31, 2024, with the ACL to loans held-in-portfolio ratio at 2.01% - The ACL as of December 31, 2024, amounted to **$746.0 million**, an increase of **$1.7 million** when compared to Q3 2024[36](index=36&type=chunk) - The Corporation's ratio of the ACL to loans held-in-portfolio was **2.01%** in Q4 2024, compared to **2.06%** in Q3 2024[41](index=41&type=chunk) - The ratio of the ACL to NPLs held-in-portfolio was **212.7%**, compared to **206.0%** in Q3 2024[41](index=41&type=chunk) - The provision for credit losses amounted to **$66.1 million** in Q4 2024, compared to **$71.4 million** in Q3 2024[43](index=43&type=chunk) - In the BPPR segment, the ACL increased by **$4.5 million** driven by an increase of **$10.7 million** in reserves for consumer loans, offset by a **$6.1 million** decrease in reserves for commercial loans[37](index=37&type=chunk) - In the PB segment, the ACL decreased by **$2.8 million** from Q3 2024, mainly due to improvements in risk ratings of certain commercial relationships[38](index=38&type=chunk) [Credit Quality by Segment](index=9&type=section&id=Credit%20Quality%20by%20Segment) This section provides a detailed breakdown of credit quality metrics for the BPPR and Popular U.S. segments, including provision for credit losses, net charge-offs, total non-performing loans, and related ratios, highlighting segment-specific trends in loan performance Credit Quality by Segment (in thousands) | Metric | BPPR (31-Dec-24) | Popular U.S. (31-Dec-24) | | :------------------------------------------ | :--------------- | :----------------------- | | Provision for credit losses - loan portfolios | $67,088 | $2,041 | | Net charge-offs | 62,604 | 4,829 | | Total non-performing loans held-in-portfolio | 292,091 | 58,689 | | Annualized net charge-offs to average loans held-in-portfolio | 0.97% | 0.18% | | Allowance / loans held-in-portfolio | 2.56% | 0.69% | | Allowance / non-performing loans held-in-portfolio | 229.61% | 128.40% | [Financial Condition](index=9&type=section&id=Financial%20Condition) This section reviews Popular, Inc.'s balance sheet, highlighting changes in total assets, liabilities, stockholders' equity, and key capital ratios as of December 31, 2024 [Balance Sheet Overview](index=9&type=section&id=Balance%20Sheet%20Overview) Total assets increased by $1.7 billion to $73.0 billion at December 31, 2024, driven by increases in available-for-sale securities and loans held-in-portfolio, partially offset by decreases in money market investments and held-to-maturity securities - Total assets amounted to **$73.0 billion** at December 31, 2024, an increase of **$1.7 billion** from Q3 2024[48](index=48&type=chunk) - Increase in securities available-for-sale (AFS) of **$1.1 billion**[51](index=51&type=chunk) - Increase in loans held-in-portfolio by **$912.7 million** (BPPR up **$453.6 million**, PB up **$459.1 million**)[51](index=51&type=chunk) - Decrease in money market investments of **$149.8 million**[51](index=51&type=chunk) - Decrease in securities held-to-maturity (HTM) of **$107.2 million**[51](index=51&type=chunk) - Total liabilities increased by **$1.9 billion** from Q3 2024[48](index=48&type=chunk) - Increase of **$1.2 billion** in deposits (BPPR up **$1.3 billion**, PB down **$187.1 million**)[51](index=51&type=chunk) - Increase in other liabilities of **$481.5 million**, mainly driven by unsettled trade payables[51](index=51&type=chunk) - Increase in other short-term borrowings of **$225.0 million**, due to FHLB advances in PB[51](index=51&type=chunk) [Stockholders' Equity and Capital Ratios](index=10&type=section&id=Stockholders'%20Equity%20and%20Capital%20Ratios) Stockholders' equity decreased by $177.4 million, primarily due to increased net unrealized losses on AFS securities, higher Treasury Stock from common stock repurchases, and dividends declared, partially offset by net income - Stockholders' equity decreased by **$177.4 million** from Q3 2024[48](index=48&type=chunk) - Mainly due to the change in accumulated other comprehensive loss driven by the increase in net unrealized losses in the portfolio of AFS securities of **$197.7 million**[48](index=48&type=chunk) - Increase in Treasury Stock of **$159.1 million** due to common stock repurchases[48](index=48&type=chunk) - Common and preferred dividends declared during the quarter of **$49.9 million**[48](index=48&type=chunk) - Common Equity Tier 1 ratio of **16.03%**, Common Equity per share of **$79.71** and Tangible Book Value per share of **$68.16** at December 31, 2024[49](index=49&type=chunk) [Corporate Information](index=11&type=section&id=Corporate%20Information) This section provides essential corporate details, including cautionary notes on forward-looking statements, an overview of Popular, Inc.'s operations, and conference call information [Cautionary Note Regarding Forward-Looking Statements](index=11&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section advises readers that the press release contains forward-looking statements subject to various risks, uncertainties, estimates, and assumptions that could cause actual results to differ materially - This press release contains 'forward-looking statements' that are not guarantees of future performance and involve risks, uncertainties, estimates and assumptions[52](index=52&type=chunk) - Potential factors that could cause actual results to differ materially include competitive and economic factors, adequacy of the allowance for loan losses, market risk and interest rate changes, capital market conditions, and new regulatory requirements[52](index=52&type=chunk) - More information on risks and important factors is included in the Corporation's Form 10-K and 10-Q filings with the SEC[53](index=53&type=chunk) [About Popular, Inc.](index=11&type=section&id=About%20Popular%2C%20Inc.) Popular, Inc. is described as the leading financial institution in Puerto Rico and among the top 50 U.S. bank holding companies by assets - Popular, Inc. is the leading financial institution in Puerto Rico, by both assets and deposits, and ranks among the **top 50 U.S. bank holding companies** by assets[54](index=54&type=chunk) - Banco Popular de Puerto Rico, Popular's principal subsidiary, provides retail, mortgage and commercial banking services in Puerto Rico and the U.S. Virgin Islands[54](index=54&type=chunk) - In the mainland United States, Popular provides retail, mortgage and commercial banking services through its New York-chartered banking subsidiary, Popular Bank, which has branches located in New York, New Jersey and Florida[54](index=54&type=chunk) [Conference Call Details](index=11&type=section&id=Conference%20Call%20Details) This section provides details for Popular, Inc.'s conference call to discuss financial results, including the date, time, webcast access, dial-in numbers, and replay information - Popular will hold a conference call to discuss its financial results on **Tuesday, January 28, 2025, at 10:00 a.m. Eastern Time**[55](index=55&type=chunk) - The call will be broadcast live over the Internet via the Investor Relations section of www.popular.com[55](index=55&type=chunk) - Dial-in telephone numbers are **1-833-470-1428** (Toll Free) or **1-404-975-4839** (Local), with access code **200257**. A replay will be available until **Thursday, February 27, 2025**[56](index=56&type=chunk)[57](index=57&type=chunk) [Financial Supplement](index=12&type=section&id=Financial%20Supplement) This section presents a comprehensive collection of detailed financial tables, including selected ratios, statements of operations and financial condition, and analyses of credit quality and non-GAAP reconciliations [Selected Ratios and Other Information (Table A)](index=13&type=section&id=Table%20A%20-%20Selected%20Ratios%20and%20Other%20Information) This table provides key financial ratios and other selected information for Popular, Inc., including EPS, return on assets/equity, net interest margins, common equity per share, tangible book value per share, and various capital ratios for the quarters and years ended December 31, 2024, and 2023 Selected Ratios and Other Information | Metric | 31-Dec-24 | 30-Sep-24 | 31-Dec-23 | | :------------------------------------------ | :-------- | :-------- | :-------- | | Basic EPS | $2.51 | $2.16 | $1.31 | | Diluted EPS | $2.51 | $2.16 | $1.31 | | Return on average assets | 0.97% | 0.84% | 0.52% | | Return on average common equity | 9.94% | 8.82% | 5.55% | | Net interest margin (non-taxable equivalent) | 3.35% | 3.24% | 3.08% | | Net interest margin (taxable equivalent basis) - non-GAAP | 3.62% | 3.47% | 3.26% | | Common equity per share | $79.71 | $80.35 | $71.03 | | Tangible common book value per common share (non-GAAP) | $68.16 | $69.04 | $59.74 | | Common Equity Tier 1 capital | 16.03% | 16.42% | 16.30% | [Consolidated Statement of Operations (Table B)](index=14&type=section&id=Table%20B%20-%20Consolidated%20Statement%20of%20Operations) This table presents the consolidated statement of operations for Popular, Inc., detailing interest income and expense, net interest income, provision for credit losses, non-interest income, and operating expenses, leading to net income for quarterly and annual periods Consolidated Statement of Operations (in thousands) | (In thousands) | 31-Dec-24 | 30-Sep-24 | Variance Q4 2024 vs. Q3 2024 | | :------------------------------------------ | :-------- | :-------- | :----------------------------- | | Total interest income | $919,767 | $937,448 | $(17,681) | | Total interest expense | 329,008 | 364,975 | (35,967) | | Net interest income | 590,759 | 572,473 | 18,286 | | Provision for credit losses | 66,102 | 71,448 | (5,346) | | Total non-interest income | 164,703 | 164,082 | 621 | | Total operating expenses | 467,627 | 467,321 | 306 | | Net income | $177,817 | $155,323 | $22,494 | [Consolidated Statement of Financial Condition (Table C)](index=16&type=section&id=Table%20C%20-%20Consolidated%20Statement%20of%20Financial%20Condition) This table provides a consolidated statement of financial condition, outlining assets, liabilities, and stockholders' equity for Popular, Inc. as of December 31, 2024, September 30, 2024, and December 31, 2023 Consolidated Statement of Financial Condition (in thousands) | (In thousands) | 31-Dec-24 | 30-Sep-24 | Variance Q4 2024 vs. Q3 2024 | | :------------------------------------------ | :-------- | :-------- | :----------------------------- | | Total assets | $73,045,383 | $71,323,074 | $1,722,309 | | Loans held-in-portfolio | 37,522,995 | 36,599,612 | 923,383 | | Total deposits | 64,884,345 | 63,668,501 | 1,215,844 | | Total liabilities | 67,432,317 | 65,532,560 | 1,899,757 | | Total stockholders' equity | 5,613,066 | 5,790,514 | (177,448) | [Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - Q4 2024 vs Q3 2024 (Table D)](index=17&type=section&id=Table%20D%20-%20Analysis%20of%20Levels%20and%20Yields%20on%20a%20Taxable%20Equivalent%20Basis%20(Non-GAAP)%20-%20QUARTER) This table provides a detailed analysis of average volumes, yields, and interest income/expense on a taxable equivalent basis for earning assets and interest-bearing liabilities, comparing Q4 2024 with Q3 2024, and attributing variances to rate and volume changes Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - Q4 2024 vs Q3 2024 | Metric | 31-Dec-24 | 30-Sep-24 | Variance | | :------------------------------------------ | :-------- | :-------- | :------- | | Total earning assets (Avg Volume, in millions) | $70,182 | $70,411 | $(229) | | Total earning assets (Avg Yields) | 5.49% | 5.53% | (0.04)% | | Total interest bearing deposits (Avg Volume, in millions) | $49,178 | $49,539 | $(361) | | Total interest bearing deposits (Avg Costs) | 2.55% | 2.82% | (0.27)% | | Net interest margin/income on a taxable equivalent basis (Non-GAAP) | 3.62% | 3.47% | 0.15% | [Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - Q4 2024 vs Q4 2023 (Table E)](index=18&type=section&id=Table%20E%20-%20Analysis%20of%20Levels%20and%20Yields%20on%20a%20Taxable%20Equivalent%20Basis%20(Non-GAAP)%20-%20QUARTER) This table presents an analysis of average volumes, yields, and interest income/expense on a taxable equivalent basis for earning assets and interest-bearing liabilities, comparing Q4 2024 with Q4 2023, and attributing variances to rate and volume changes Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - Q4 2024 vs Q4 2023 | Metric | 31-Dec-24 | 31-Dec-23 | Variance | | :------------------------------------------ | :-------- | :-------- | :------- | | Total earning assets (Avg Volume, in millions) | $70,182 | $68,885 | $1,297 | | Total earning assets (Avg Yields) | 5.49% | 5.18% | 0.31% | | Total interest bearing deposits (Avg Volume, in millions) | $49,178 | $48,249 | $929 | | Total interest bearing deposits (Avg Costs) | 2.55% | 2.62% | (0.07)% | | Net interest margin/income on a taxable equivalent basis (Non-GAAP) | 3.62% | 3.26% | 0.36% | [Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - Year-to-Date (Table F)](index=19&type=section&id=Table%20F%20-%20Analysis%20of%20Levels%20and%20Yields%20on%20a%20Taxable%20Equivalent%20Basis%20(Non-GAAP)%20-%20YEAR-TO-DATE) This table provides a year-to-date analysis of average volumes, yields, and interest income/expense on a taxable equivalent basis for earning assets and interest-bearing liabilities, comparing the years ended December 31, 2024, and 2023, with variances attributed to rate and volume changes Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - Year-to-Date | Metric | 31-Dec-24 | 31-Dec-23 | Variance | | :------------------------------------------ | :-------- | :-------- | :------- | | Total earning assets (Avg Volume, in millions) | $70,327 | $68,175 | $2,152 | | Total earning assets (Avg Yields) | 5.47% | 4.94% | 0.53% | | Total interest bearing deposits (Avg Volume, in millions) | $49,380 | $47,239 | $2,141 | | Total interest bearing deposits (Avg Costs) | 2.71% | 2.22% | 0.49% | | Net interest margin/income on a taxable equivalent basis (Non-GAAP) | 3.49% | 3.31% | 0.18% | [Mortgage Banking Activities and Other Service Fees (Table G)](index=20&type=section&id=Table%20G%20-%20Mortgage%20Banking%20Activities%20and%20Other%20Service%20Fees) This table details income from mortgage banking activities and other service fees, including mortgage servicing fees, net gains/losses on loan sales, trading account profit, and various other service fees like debit card, insurance, and credit card fees, for quarterly and annual periods Mortgage Banking Activities (in thousands) | (In thousands) | 31-Dec-24 | 30-Sep-24 | Variance Q4 2024 vs. Q3 2024 | | :------------------------------------------ | :-------- | :-------- | :----------------------------- | | Total mortgage servicing fees, net of fair value adjustments | $6,225 | $2,663 | $3,562 | | Total mortgage banking activities | $6,306 | $2,670 | $3,636 | Other Service Fees (in thousands) | (In thousands) | 31-Dec-24 | 30-Sep-24 | Variance Q4 2024 vs. Q3 2024 | | :------------------------------------------ | :-------- | :-------- | :----------------------------- | | Debit card fees | $26,903 | $26,197 | $706 | | Credit card fees | 30,803 | 31,262 | (459) | | Sale and administration of investment products | 9,549 | 8,387 | 1,162 | | Total other service fees | $99,350 | $98,748 | $602 | [Consolidated Loans and Deposits (Table H)](index=21&type=section&id=Table%20H%20-%20Consolidated%20Loans%20and%20Deposits) This table provides a breakdown of ending balances for loans held-in-portfolio by category (Commercial, Construction, Leasing, Mortgage, Consumer) and deposits by type (non-P.R. government, P.R. government), showing quarterly and annual changes Consolidated Loans Held-in-Portfolio (in thousands) | (Dollars in thousands) | 31-Dec-24 | 30-Sep-24 | Variance Q4 2024 vs. Q3 2024 | | :------------------------------------------ | :-------- | :-------- | :----------------------------- | | Total Commercial | $18,662,163 | $18,083,629 | $578,534 | | Construction | 1,263,792 | 1,113,307 | 150,485 | | Mortgage | 8,114,183 | 7,993,348 | 120,835 | | Total Consumer | 7,142,109 | 7,117,631 | 24,478 | | Total loans held-in-portfolio | $37,107,652 | $36,194,967 | $912,685 | Consolidated Deposits (in thousands) | (In thousands) | 31-Dec-24 | 30-Sep-24 | Variance Q4 2024 vs. Q3 2024 | | :------------------------------------------ | :-------- | :-------- | :----------------------------- | | Sub-total non-P.R. government deposits | $45,420,914 | $44,952,629 | $468,285 | | Sub-total P.R. government deposits | 19,463,431 | 18,715,872 | 747,559 | | Total deposits | $64,884,345 | $63,668,501 | $1,215,844 | [Loan Delinquency - BPPR Operations (Table I)](index=22&type=section&id=Table%20I%20-%20Loan%20Delinquency%20-%20BPPR%20Operations) This table provides a detailed breakdown of loan delinquency for the Banco Popular de Puerto Rico (BPPR) segment, categorizing loans by past due status (30-59, 60-89, 90+ days), non-accrual, and accruing loans, for Q4 2024 and Q3 2024 Loan Delinquency - BPPR Operations (in thousands) | (In thousands) | Past due 30-59 days | Past due 60-89 days | Past due 90 days or more | Total past due | Non-accrual loans | Accruing loans past due 90 days or more | | :------------------------------------------ | :------------------ | :------------------ | :----------------------- | :------------- | :---------------- | :-------------------------------------- | | Commercial multi-family | $1,491 | $113 | $79 | $1,683 | $79 | $— | | Mortgage | 262,222 | 116,694 | 365,759 | 744,675 | 158,442 | 207,317 | | Auto | 111,358 | 27,858 | 51,792 | 191,008 | 51,792 | $— | | Total | $458,730 | $179,963 | $534,341 | $1,173,034 | $292,091 | $242,250 | [Loan Delinquency - Popular U.S. Operations (Table J)](index=24&type=section&id=Table%20J%20-%20Loan%20Delinquency%20-%20Popular%20U.S.%20Operations) This table details loan delinquency for the Popular U.S. (PB) segment, showing loans categorized by past due status (30-59, 60-89, 90+ days), non-accrual, and accruing loans, for Q4 2024 and Q3 2024 Loan Delinquency - Popular U.S. Operations (in thousands) | (In thousands) | Past due 30-59 days | Past due 60-89 days | Past due 90 days or more | Total past due | Non-accrual loans | Accruing loans past due 90 days or more | | :------------------------------------------ | :------------------ | :------------------ | :----------------------- | :------------- | :---------------- | :-------------------------------------- | | Commercial multi-family | $— | $5,443 | $8,700 | $14,143 | $8,700 | $— | | Mortgage | 18,148 | 5,417 | 29,890 | 53,455 | 29,890 | $— | | Personal | 1,808 | 1,509 | 1,741 | 5,058 | 1,741 | $— | | Total | $38,128 | $18,678 | $58,879 | $115,685 | $58,689 | $190 | [Loan Delinquency - Consolidated (Table K)](index=26&type=section&id=Table%20K%20-%20Loan%20Delinquency%20-%20Consolidated) This table provides a consolidated view of loan delinquency for Popular, Inc., categorizing loans by past due status (30-59, 60-89, 90+ days), non-accrual, and accruing loans, for Q4 2024 and Q3 2024 Loan Delinquency - Consolidated (in thousands) | (In thousands) | Past due 30-59 days | Past due 60-89 days | Past due 90 days or more | Total past due | Non-accrual loans | Accruing loans past due 90 days or more | | :------------------------------------------ | :------------------ | :------------------ | :----------------------- | :------------- | :---------------- | :-------------------------------------- | | Commercial multi-family | $1,491 | $5,556 | $8,779 | $15,826 | $8,779 | $— | | Mortgage | 280,370 | 122,111 | 395,649 | 798,130 | 188,332 | 207,317 | | Auto | 111,358 | 27,858 | 51,792 | 191,008 | 51,792 | $— | | Total | $496,858 | $198,641 | $593,220 | $1,288,719 | $350,780 | $242,440 | [Non-Performing Assets (Table L)](index=28&type=section&id=Table%20L%20-%20Non-Performing%20Assets) This table presents a summary of non-performing assets, including non-accrual loans by category and other real estate owned (OREO), along with key ratios such as non-performing assets to total assets and allowance for credit losses to non-performing loans, for various periods Non-Performing Assets (in thousands) | (In thousands) | 31-Dec-24 | 30-Sep-24 | Variance Q4 2024 vs. Q3 2024 | | :------------------------------------------ | :-------- | :-------- | :----------------------------- | | Total non-performing loans held-in-portfolio | $350,780 | $361,398 | $(10,618) | | Other real estate owned ("OREO") | 57,268 | 63,028 | (5,760) | | Total non-performing assets | $408,048 | $424,426 | $(16,378) | | Non-performing assets to total assets | 0.56% | 0.60% | | | Non-performing loans held-in-portfolio to loans held-in-portfolio | 0.95% | 1.00% | | | Allowance for credit losses to non-performing loans, excluding loans held-for-sale | 212.68% | 205.96% | | [Activity in Non-Performing Loans (Table M)](index=29&type=section&id=Table%20M%20-%20Activity%20in%20Non-Performing%20Loans) This table details the activity in non-performing loans (NPLs) for commercial, mortgage, and total non-consumer portfolios, broken down by BPPR and Popular U.S. segments, showing beginning balances, new NPLs, advances, transfers to OREO, charge-offs, and loans returned to accrual status or collections Activity in Non-Performing Commercial Loans (in thousands) | (In thousands) | BPPR | Popular U.S. | Popular, Inc. | | :------------------------------------------ | :----- | :----------- | :------------ | | Beginning balance NPLs | $53,819 | $38,476 | $92,295 | | Plus: New non-performing loans | 2,915 | 9,203 | 12,118 | | Less: Loans returned to accrual status / loan collections | (4,854) | (23,199) | (28,053) | | Ending balance NPLs | $51,101 | $23,654 | $74,755 | Activity in Non-Performing Mortgage Loans (in thousands) | (In thousands) | BPPR | Popular U.S. | Popular, Inc. | | :------------------------------------------ | :----- | :----------- | :------------ | | Beginning balance NPLs | $157,920 | $28,434 | $186,354 | | Plus: New non-performing loans | 44,670 | 4,637 | 49,307 | | Less: Loans returned to accrual status / loan collections | (40,307) | (3,202) | (43,509) | | Ending balance NPLs | $158,442 | $29,890 | $188,332 | [Allowance for Credit Losses, Net Charge-offs and Related Ratios (Table N)](index=30&type=section&id=Table%20N%20-%20Allowance%20for%20Credit%20Losses%2C%20Net%20Charge-offs%20and%20Related%20Ratios) This table provides a comprehensive overview of the Allowance for Credit Losses (ACL) and net charge-offs (NCOs) for Popular, Inc., including segment-specific breakdowns (BPPR and Popular U.S.), and related ratios such as annualized NCOs to average loans and provision for credit losses to net charge-offs Allowance for Credit Losses and Net Charge-offs (in thousands) | (In thousands) | 31-Dec-24 | 30-Sep-24 | | :------------------------------------------ | :-------- | :-------- | | Balance at beginning of period - loans held-in-portfolio | $744,320 | $730,077 | | Provision for credit losses | 69,129 | 72,769 | | Total loans charged-off - Popular, Inc. | $67,433 | $58,529 | | Balance at end of period - loans held-in-portfolio | $746,024 | $744,320 | Related Ratios | Metric | POPULAR, INC. | BPPR | Popular U.S. | | :------------------------------------------ | :------------ | :----- | :------------- | | Annualized net charge-offs (recoveries) to average loans held-in-portfolio | 0.74% | 0.97% | 0.18% | | Provision for credit losses (benefit) - loan portfolios to net charge-offs | 102.52% | 107.16% | 42.27% | [Allowance for Credit Losses "ACL" - Loan Portfolios - BPPR Operations (Table O)](index=34&type=section&id=Table%20O%20-%20Allowance%20for%20Credit%20Losses%20%22ACL%22%20-%20Loan%20Portfolios%20-%20BPPR%20Operations) This table details the Allowance for Credit Losses (ACL) for the Banco Popular de Puerto Rico (BPPR) segment's loan portfolios, broken down by loan category, and presents the ACL to loans held-in-portfolio ratio for Q4 2024 and Q3 2024 Allowance for Credit Losses "ACL" - Loan Portfolios - BPPR Operations (in thousands) | (In thousands) | Total ACL | Total loans held-in-portfolio | ACL to loans held-in-portfolio | | :------------------------------------------ | :-------- | :---------------------------- | :----------------------------- | | Total commercial | $215,126 | $10,277,309 | 2.09% | | Mortgage | 72,901 | 6,809,881 | 1.07% | | Total consumer | $363,477 | $6,954,136 | 5.23% | | Total | $670,666 | $26,179,021 | 2.56% | [Allowance for Credit Losses "ACL" - Loan Portfolios - Popular U.S. Operations (Table P)](index=36&type=section&id=Table%20P%20-%20Allowance%20for%20Credit%20Losses%20%22ACL%22%20-%20Loan%20Portfolios%20-%20Popular%20U.S.%20Operations) This table details the Allowance for Credit Losses (ACL) for the Popular U.S. (PB) segment's loan portfolios, broken down by loan category, and presents the ACL to loans held-in-portfolio ratio for Q4 2024 and Q3 2024 Allowance for Credit Losses "ACL" - Loan Portfolios - Popular U.S. Operations (in thousands) | (In thousands) | Total ACL | Total loans held-in-portfolio | ACL to loans held-in-portfolio | | :------------------------------------------ | :-------- | :---------------------------- | :----------------------------- | | Total commercial | $44,438 | $8,384,854 | 0.53% | | Mortgage | 9,508 | 1,304,302 | 0.73% | | Total consumer | $12,891 | $187,973 | 6.86% | | Total | $75,358 | $10,928,631 | 0.69% | [Allowance for Credit Losses "ACL" - Loan Portfolios - Consolidated (Table Q)](index=38&type=section&id=Table%20Q%20-%20Allowance%20for%20Credit%20Losses%20%22ACL%22%20-%20Loan%20Portfolios%20-%20Consolidated) This table provides a consolidated view of the Allowance for Credit Losses (ACL) for Popular, Inc.'s loan portfolios, broken down by loan category, and presents the ACL to loans held-in-portfolio ratio for Q4 2024 and Q3 2024 Allowance for Credit Losses "ACL" - Loan Portfolios - Consolidated (in thousands) | (In thousands) | Total ACL | Total loans held-in-portfolio | ACL to loans held-in-portfolio | | :------------------------------------------ | :-------- | :---------------------------- | :----------------------------- | | Total commercial | $259,564 | $18,662,163 | 1.39% | | Mortgage | 82,409 | 8,114,183 | 1.02% | | Total consumer | $376,368 | $7,142,109 | 5.27% | | Total | $746,024 | $37,107,652 | 2.01% | [Reconciliation to GAAP Financial Measures (Table R)](index=40&type=section&id=Table%20R%20-%20Reconciliation%20to%20GAAP%20Financial%20Measures) This table provides a reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures, specifically for tangible common equity, tangible assets, tangible book value per common share, and return on average tangible common equity, for various periods Reconciliation to GAAP Financial Measures (in thousands, except share or per share information) | (In thousands, except share or per share information) | 31-Dec-24 | 30-Sep-24 | 31-Dec-23 | | :------------------------------------------------- | :-------- | :-------- | :-------- | | Total stockholders' equity | $5,613,066 | $5,790,514 | $5,146,953 | | Total tangible common equity | $4,781,143 | $4,956,412 | $4,310,618 | | Total assets | $73,045,383 | $71,323,074 | $70,758,155 | | Total tangible assets | $72,235,603 | $70,511,115 | $69,943,963 | | Tangible common equity to tangible assets | 6.62% | 7.03% | 6.16% | | Tangible book value per common share | $68.16 | $69.04 | $59.74 |

Part I – Financial Information [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents Popular, Inc.'s unaudited consolidated financial statements as of September 30, 2024, and for the three and nine-month periods then ended, including statements of financial condition, operations, comprehensive income, changes in stockholders' equity, and cash flows, with detailed notes [Unaudited Consolidated Statements of Financial Condition](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Financial%20Condition) As of September 30, 2024, Popular, Inc. reported total assets of **$71.3 billion**, an increase from **$70.8 billion** at year-end 2023, primarily driven by growth in net loans held-in-portfolio, with total liabilities stable at **$65.5 billion** and stockholders' equity growing to **$5.8 billion** from **$5.1 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$71,323,074** | **$70,758,155** | | Total loans held-in-portfolio, net | $35,450,647 | $34,335,630 | | Total debt securities (AFS & HTM), net | $25,045,987 | $24,917,599 | | **Total Liabilities** | **$65,532,560** | **$65,611,202** | | Total deposits | $63,668,501 | $63,618,243 | | **Total Stockholders' Equity** | **$5,790,514** | **$5,146,953** | [Unaudited Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) For Q3 2024, Popular, Inc. reported **net income of $155.3 million** ($2.16 per diluted share), up from **$136.6 million** in Q3 2023, driven by higher net interest income of **$572.5 million** versus **$534.0 million**, partially offset by increased provision for credit losses Key Operating Results (in thousands, except per share data) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $572,473 | $534,020 | $1,691,529 | $1,597,344 | | Provision for Credit Losses | $71,448 | $45,117 | $190,840 | $129,946 | | Non-interest Income | $164,082 | $159,549 | $494,206 | $481,981 | | Total Operating Expenses | $467,321 | $465,984 | $1,420,010 | $1,366,955 | | **Net Income** | **$155,323** | **$136,609** | **$436,395** | **$446,748** | | Net Income per Share – Diluted | $2.16 | $1.90 | $6.05 | $6.21 | [Unaudited Consolidated Statements of Comprehensive Income (Loss)](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company reported **comprehensive income of $520.6 million** for Q3 2024, a significant turnaround from a **$68.9 million comprehensive loss** in Q3 2023, primarily due to a positive swing in other comprehensive income driven by unrealized holding gains on debt securities Comprehensive Income (Loss) Summary (in thousands) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $155,323 | $136,609 | $436,395 | $446,748 | | Total other comprehensive income (loss), net of tax | $365,288 | $(205,507) | $382,537 | $(9,014) | | **Comprehensive income (loss), net of tax** | **$520,611** | **$(68,898)** | **$818,932** | **$437,734** | [Unaudited Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity increased from **$5.15 billion** at year-end 2023 to **$5.79 billion** at September 30, 2024, driven by **$436.4 million** in net income and **$382.5 million** in positive other comprehensive income, partially offset by dividends and stock repurchases - Key drivers for the increase in stockholders' equity in the first nine months of 2024 were net income (**$436.4M**) and other comprehensive income (**$382.5M**)[12](index=12&type=chunk) - Reductions to equity included dividends on common stock (**$134.3M**), preferred stock (**$1.1M**), and common stock repurchases (**$65.9M**)[12](index=12&type=chunk) - Dividends declared per common share for the nine months ended September 30, 2024, were **$1.86**, up from **$1.65** in the same period of 2023[12](index=12&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash provided by operating activities was **$475.2 million**, while net cash used in investing activities significantly decreased to **$209.6 million** from **$2.1 billion** in the prior year, and net cash used in financing activities was **$257.5 million** Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $475,239 | $473,023 | | Net cash used in investing activities | $(209,614) | $(2,066,726) | | Net cash (used in) provided by financing activities | $(257,534) | $1,658,782 | | **Net increase in cash and due from banks** | **$8,091** | **$65,079** | [Notes to Unaudited Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed disclosures supporting the consolidated financial statements, covering the nature of operations, basis of presentation, accounting pronouncements, debt securities, loan portfolio, credit quality, and other key financial areas [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=135&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q3 2024 financial performance, highlighting **net income of $155.3 million** driven by higher net interest income, and analyzes financial condition, capital adequacy, liquidity, and risk management practices - Q3 2024 net income was **$155.3 million**, compared to **$136.6 million** in Q3 2023[355](index=355&type=chunk) - Net interest margin for Q3 2024 increased to **3.24%** from **3.07%** in Q3 2023, mainly due to higher yields on investment securities and loans[355](index=355&type=chunk) - Total assets grew to **$71.3 billion** from **$70.8 billion** at year-end 2023, driven by loan growth[361](index=361&type=chunk) - Tangible book value per common share increased to **$69.04** from **$59.74** at year-end 2023[363](index=363&type=chunk)[424](index=424&type=chunk) [Operating Results Analysis](index=140&type=section&id=Operating%20Results%20Analysis) Net interest income for Q3 2024 rose to **$572.5 million**, up **$38.5 million** year-over-year, driven by higher yields on loans and investments, while provision for credit losses increased to **$71.4 million**, and non-interest income grew to **$164.1 million** - Net interest income increased by **$38.5 million** YoY in Q3 2024, driven by higher yields on investment securities (**+$33.8M**) and loans (**+$69.6M**), partially offset by higher deposit interest expense (**+$56.9M**)[366](index=366&type=chunk) - The provision for credit losses increased by **$26.3 million** YoY to **$71.4 million** in Q3 2024, primarily due to higher net charge-offs in the commercial loan portfolio compared to net recoveries in Q3 2023[356](index=356&type=chunk)[370](index=370&type=chunk) - Operating expenses were stable YoY, with increases in technology (**+$15.5M**) and personnel costs (**+$8.7M**) being offset by a **$23.0M** goodwill impairment charge recorded in Q3 2023 and lower professional fees (**-$11.8M**)[376](index=376&type=chunk) [Financial Condition Analysis](index=152&type=section&id=Financial%20Condition%20Analysis) As of September 30, 2024, total assets reached **$71.3 billion**, with loans held-in-portfolio growing by **$1.1 billion** to **$36.2 billion**, total deposits remaining stable at **$63.7 billion**, and stockholders' equity increasing by **$643.6 million** to **$5.8 billion** - Loans held-in-portfolio increased by **$1.1 billion** to **$36.2 billion** since Dec 31, 2023, with the BPPR portfolio growing by **$1.2 billion**[399](index=399&type=chunk) - Total deposits were stable at **$63.7 billion**. Puerto Rico public sector deposits increased to **$18.7 billion** from **$18.1 billion** at year-end 2023[405](index=405&type=chunk)[408](index=408&type=chunk) - Stockholders' equity grew by **$643.6 million** since year-end 2023, driven by net income and a **$272.0 million** after-tax decrease in unrealized losses on AFS securities[415](index=415&type=chunk) [Capital](index=158&type=section&id=Capital) The Corporation's capital ratios remained strong and well-capitalized as of September 30, 2024, with the Common Equity Tier 1 (CET1) capital ratio at **16.42%** and tangible book value per common share increasing to **$69.04** Regulatory Capital Ratios | Ratio | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Common equity tier 1 capital | 16.42% | 16.30% | | Tier 1 capital | 16.48% | 16.36% | | Total capital | 18.24% | 18.13% | | Tier 1 leverage | 8.67% | 8.51% | - The increase in capital ratios compared to year-end 2023 was mainly due to earnings for the nine-month period, partially offset by higher risk-weighted assets from loan growth[422](index=422&type=chunk) [Risk Management](index=161&type=section&id=Risk%20Management) The company actively manages market, interest rate, liquidity, and credit risks, maintaining an asset-sensitive position with strong liquidity totaling **$20.5 billion**, and stable credit quality metrics including a **1.0%** non-performing loan ratio - The Corporation's Net Interest Income (NII) simulation shows an asset-sensitive position. A **+100 basis point** parallel rate shift is estimated to increase NII by **$20.6 million (0.87%)** over one year[429](index=429&type=chunk) - Total available liquidity sources increased to **$20.5 billion** as of September 30, 2024, from **$19.5 billion** at year-end 2023[436](index=436&type=chunk)[437](index=437&type=chunk) - Non-performing loans (NPLs) to total loans held-in-portfolio ratio was stable at **1.0%** as of September 30, 2024, unchanged from December 31, 2023[478](index=478&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=185&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the Market Risk section within Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, for market risk disclosures - Disclosures regarding market risk for the current period are located in the Market Risk section of the MD&A[506](index=506&type=chunk) [Item 4. Controls and Procedures](index=185&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2024, 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 period covered by this report[507](index=507&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[508](index=508&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=185&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including the *Golden v. Popular, Inc.* class action which is now closed, and the *Lipsett v. Popular, Inc.* class action which has reached a settlement in principle, with estimated possible losses up to **$6.49 million** - The *Golden v. Popular, Inc.* class action lawsuit regarding overdraft fees has been settled and is now closed[235](index=235&type=chunk) - A settlement in principle has been reached in the *Lipsett v. Popular, Inc.* class action, with a final approval hearing set for January 27, 2025[237](index=237&type=chunk) - Management estimates the range of reasonably possible losses for current legal proceedings, in excess of amounts accrued, is from **$0** to approximately **$6.49 million** as of September 30, 2024[231](index=231&type=chunk) [Item 1A. Risk Factors](index=185&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023 - There have been no material changes to the risk factors previously disclosed in the Corporation's 2023 Form 10-K[510](index=510&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=185&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2024, the Corporation repurchased **602,451** common shares at an average price of **$98.06** per share, with **$441.2 million** remaining under the **$500 million** repurchase program announced in August 2024 Issuer Purchases of Equity Securities (Q3 2024) | Period | Total Shares Purchased | Average Price Paid | Shares Purchased Under Plan | Remaining Plan Value | | :--- | :--- | :--- | :--- | :--- | | July 2024 | 2,668 | $87.72 | - | $500,000,000 | | August 2024 | 303,638 | $97.14 | 303,202 | $470,550,231 | | September 2024 | 296,145 | $99.11 | 295,894 | $441,224,007 | | **Total Q3** | **602,451** | **$98.06** | **599,096** | **$441,224,007** | - In July 2024, the Corporation announced a new stock repurchase program of up to **$500 million**. Repurchases began in August 2024[512](index=512&type=chunk) [Item 3. Defaults Upon Senior Securities](index=186&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[513](index=513&type=chunk) [Item 4. Mine Safety Disclosures](index=186&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[514](index=514&type=chunk) [Item 5. Other Information](index=186&type=section&id=Item%205.%20Other%20Information) This section notes that certain officers or directors may participate in company stock plans, potentially designed to satisfy Rule 10b5-1 conditions or constitute non-Rule 10b5-1 trading arrangements - Certain officers and directors participate in company stock plans, which may be designed to satisfy Rule 10b5-1 or be considered non-Rule 10b5-1 trading arrangements[515](index=515&type=chunk) [Item 6. Exhibits](index=187&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including Sarbanes-Oxley Act certifications and XBRL data files

Popular, Inc. (NASDAQ:BPOP) Q3 2024 Earnings Conference Call October 23, 2024 11:00 AM ET Company Participants Paul Cardillo - Investor Relations Officer Ignacio Alvarez - Chief Executive Officer Jorge Garcia - Executive Vice President and Chief Financial Officer Lidio Soriano - Executive Vice President and Chief Risk Officer Conference Call Participants Brett Rabatin - Hovde Group Frank Schiraldi - Piper Sandler Kelly Motta - KBW Jared Shaw - Barclays Timur Braziler - Wells Fargo Benjamin Gerlinger - Citi ...