Popular(BPOP)2025-01-29 03:07Financial Data and Key Metrics Changes - The company reported an annual net income of 541 million in 2023, with an adjusted net income of 68.16 [8][29] - Net interest income (NII) for the fourth quarter increased by 2 billion, a 5.8% increase, with strong performance in commercial loans [6][17] - Mortgage loan balances increased by 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 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]