Popular(US:BPOP)2025-07-23 16:02Financial Data and Key Metrics Changes - The company reported net income of $210 million and EPS of $3.09 per share, an increase of $32 million and $0.53 per share respectively compared to the first quarter [6][14] - The return on tangible common equity improved to 13.3%, an increase of 190 basis points from the previous quarter [15][26] - Net interest income increased by $26 million to $632 million, driven by balance sheet growth and lower deposit costs [17][19] Business Line Data and Key Metrics Changes - Loan growth exceeded $900 million during the quarter, with significant contributions from commercial and construction lending [7][18] - Mortgage balances increased by $158 million, while auto loan and lease balances rose by $76 million [9] - Non-interest income was $168 million, an increase of $16 million compared to Q1, driven by higher transaction activity [22] Market Data and Key Metrics Changes - The unemployment rate in Puerto Rico remained low at 5.5%, with consumer spending showing resilience [8] - Combined credit and debit card sales for Banco Popular customers increased by approximately 4% compared to the same quarter last year [8] - The tourism sector is expected to benefit from significant events, contributing an estimated $200 million in local economic activity [10] Company Strategy and Development Direction - The company announced a new common stock repurchase program of up to $500 million and a 7% increase in its quarterly dividend [6] - Ongoing transformation efforts aim to enhance customer experiences, modernize technology, and drive sustainable growth [11][12] - The company is focused on maintaining its market position and promoting economic progress in Puerto Rico [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities in Puerto Rico, supported by federal disaster recovery funds [10][11] - The company expects to exceed a 12% return on tangible common equity for the full year, driven by strong credit quality and loan growth [16][28] - Credit quality metrics improved, with lower non-performing loans and charge-offs, indicating a strong risk profile [28][32] Other Important Information - Total operating expenses increased by $22 million to $493 million, with personnel costs being the largest contributor [23] - The company repurchased approximately $112 million in shares during the quarter [27] - Regulatory capital levels remain strong, with a CET ratio of 15.91% [26] Q&A Session Summary Question: Impact of stablecoins on Popular's business - Management is exploring potential use cases for stablecoins following the approval of the Genius Act, acknowledging its future impact on the industry [40][41] Question: Profit sharing accruals and revenue guidance - The profit sharing accrual is tied to exceeding budgeted net income by at least 3%, with expectations to reach the maximum cap based on performance [44][46] Question: Deposit competition and seasonality - Competition for commercial deposits is increasing, but the company is focused on deposit retention strategies [48][50] Question: Loan growth and federal stimulus - Management is seeing deployment of federal funds in Puerto Rico and expects more projects to be announced soon [70][71] Question: Fee income guidance - The company anticipates steady trends in fee income, with cyclical increases expected in the second and fourth quarters [72][74] Question: Capital and buybacks - Management is comfortable with the current pace of share buybacks, viewing the share price as attractive [75]