Popular(US:BPOP)2025-10-23 16:00Financial Data and Key Metrics Changes - The company reported net income of $211 million and EPS of $3.15, an increase of $1 million and $0.06 per share respectively, driven by higher revenues and expanding net interest margin [2][3][11] - Net interest income increased by $15 million to $647 million, with net interest margin expanding by two basis points on a GAAP basis [11][12] - Total operating expenses were $495 million, an increase of $3 million compared to the previous quarter, primarily due to a non-cash goodwill impairment [16][17] Business Line Data and Key Metrics Changes - Loan growth was strong, with an increase of $502 million in total loans, driven by commercial and construction lending across both banks [12][13] - Non-interest income was $171 million, an increase of $3 million compared to Q2, benefiting from robust customer transaction activity [15][16] Market Data and Key Metrics Changes - The unemployment rate in Puerto Rico remained low at 5.6%, with solid business activity reflected in consumer spending and tourism [4][5] - Combined credit and debit card sales for Banco Popular customers increased by approximately 5% compared to 2024 [5] Company Strategy and Development Direction - The company’s strategic framework focuses on being the number one bank for customers, simplifying operations, and achieving top performance with a long-term goal of a 14% return on capital [8][9] - Recent initiatives include expanding digital capabilities and modernizing branches to enhance customer engagement [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic trends in Puerto Rico, citing strong consumer spending and a healthy construction sector [5][6] - The company aims to maintain sustainable returns above 12% for the year and is focused on deposit retention and loan generation [26][27] Other Important Information - The effective tax rate for Q3 was 14.5%, down from 18.5% in Q2, influenced by a higher proportion of exempt income [18][19] - The company declared a quarterly common stock dividend of $0.75 per share, an increase of $0.05 from Q2, and repurchased approximately $119 million in shares during Q3 [20] Q&A Session Summary Question: Margin and Asset Yields - Management indicated that they expect net interest margin to continue expanding despite potential rate cuts, supported by fixed asset repricing and loan growth [31][32] Question: Credit Trends - Management remains optimistic about consumer credit trends, noting that delinquency rates are still lower year-over-year [35] Question: Large C&I Loan Reserves - Management clarified that the loans in question are current on payments, and the decision to classify them as non-accrual was due to deteriorating business conditions [38][39] Question: Competition and Underwriting Standards - Management confirmed that there has been no relaxation in underwriting standards despite increased competition, emphasizing a conservative approach [80][81]