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Did Popular beat or miss consensus estimates last quarter?

- **Record Financial Performance**: Q3 net income $211M (+$1M YoY), EPS $3.15 (+$0.06), driven by 15% YoY revenue growth and 5% NII expansion.
- **Puerto Rico Economic Strength**: Unemployment 5.6%, consumer spending up 5%, $129M mortgage growth, and $650M Amgen manufacturing expansion.
- **Credit Resilience**: Despite $188M in large commercial credit issues, net charge-offs 60 bps (vs. 45 bps Q2), stable consumer credit.
- **Margin Expansion**: NIM +2 bps YoY to 3.65%, with $2.5B in new Treasury purchases at 3.65% yield.
- **Shareholder Returns**: $119M buybacks in Q3, $429M remaining under $548M authorization.
- **14% ROTCE Target**: On track for FY25 ROTCE of 12%+, with digital transformation and operational efficiency driving long-term growth.

**【CEO Summary Section】**
- Reported net income of $211 million, up $1 million YoY, with EPS of $3.15, up $0.06. Driven by higher revenues, expanding net interest margin, and stable deposits.
- Highlighted strong loan growth ($502 million QoQ) and resilient consumer spending (+5% in credit/debit card sales YoY). Mortgage balances increased by $129 million.
- Puerto Rico economic indicators remain positive: unemployment at 5.6%, tourism growth, and $650 million manufacturing expansion by Amgen.
- Strategic focus on digital transformation, customer engagement, and operational efficiency to achieve 14% ROTCE.

**【CFO Financial Commentary】**
- GAAP net income $211 million (+$1M YoY), EPS $3.15 (+$0.06). NII $647 million (+$15M YoY) due to loan growth and disciplined deposit pricing.
- Noninterest income $171 million (+$3M QoQ), driven by transactional activity and a $5M retroactive payment.
- Operating expenses $495 million (+$3M QoY), with $13M noncash goodwill impairment offset by $13.5M cost savings.
- Effective tax rate 14.5% (18.5% Q2), expected 16%-18% for FY25.
- Share buybacks: $119M in Q3, $429M remaining under authorization.

**【Risk Management & Credit Commentary】**
- NPL ratio 1.3% (0.82% Q2), driven by two large commercial loans ($158M telecom, $30M Florida hotel). Excluding these, credit metrics stable.
- Net charge-offs $58M (60 bps annualized), up from $42M (45 bps). Auto loan charge-offs up $6M, credit card down $2M.
- Provision for credit losses $75M (+$29M QoQ) due to isolated credit events.
- Allowance for credit losses $786M, 2.03% of loans.

**【Q&A Highlights】**
- **Margin & Asset Yield**: CFO expects NIM expansion in Q4 from fixed asset repricing. New loan yields stable,5-10 bps higher YoY.
- **Credit Trends**: Consumer credit strong, auto delinquencies seasonal. Large commercial portfolio resilient despite isolated issues.
- **Expense Management**: FY25 expense growth 4%-5%, disciplined spending on digital initiatives.
- **ROTCE Target**: Confident in 14%+ ROTCE, with FY25 guidance of at least 12%.
- **Tax Rate**: FY25 effective rate 16%-18%, stable going forward.
- **Deposit Competition**: Puerto Rico market vibrant, no new entrants. Focused on relationship banking vs. price competition.

Popular, Inc. (BPOP) Q3 2025 Earnings Call Transcript

- **Record Q2 Performance**: $210M net income (16% QoQ), 13.3% ROTCE, $931M loan growth.
- **Capital Return**: $500M buyback + 7% dividend hike ($0.75/share).
- **Profit Sharing**: $13M accrued Q2, up to $40M/year if net income beats budget by 3%+.
- **Credit Strength**: NPLs down 82bps, charge-offs at 45bps, ACL coverage at 202bps.
- **Growth Outlook**: 10-11% NII growth, ROTCE >12% for full year, targeting 14% long-term.
- **Stablecoin Strategy**: Exploring use cases under GENIUS Act; early innings but potential deposit impact.


**【CEO Opening Remarks】**
- Announced a $500 million common stock repurchase program and a 7% dividend increase to $0.75 per share.
- Reported Q2 net income of $210 million (EPS: $3.09), up 15% YoY, driven by higher NII and loan growth.
- Highlighted $931 million loan growth (BPPR: $681M, PB: $251M) and $158 million mortgage balance increase.
- Emphasized transformation program progress, including digital platform launches and branch modernization.

**【CFO Financial Commentary】**
- GAAP net income: $210M (EPS: $3.09), up 16% QoQ; ROTCE: 13.3% (vs. 11.4% Q1).
- NII: $632M (+$26M QoQ), NIM: +9bps (GAAP) / +12bps (TEB) due to lower deposit costs.
- Deposit growth: $1.4B (BPPR public: +$1.3B), cost: -5bps (BPPR: 1.52%, PB: -14bps).
- Noninterest income: $168M (+$16M QoQ), driven by card spending (+4%) and IRS reimbursement.
- Expense growth: 4-5% YoY (including $40M profit-sharing cap), vs. 4% original guidance.
- Guidance: 10-11% NII growth, ROTCE >12% for full year, targeting 14% long-term.

**【Credit Quality (CRO)】**
- NPLs: $770M (82bps of loans), down $4M QoQ; charge-offs: $42M (45bps annualized, -$7M QoQ).
- ACL: $770M (+$7M), ratio: 202bps (vs. 205bps Q1).
- Provision: $50M (-$15M QoQ), P/CO ratio: 117%.
- Credit metrics improved across portfolios, with NPL inflows down $4M QoQ.

**【Q&A Highlights】**
- **Stablecoins**: CEO formed team to explore use cases under GENIUS Act; early stage but potential impact on deposits.
- **Profit Sharing**: $13M accrued Q2, capped at $40M/year; embedded in guidance, tied to 3%+ net income beat.
- **Deposit Trends**: Seasonal Q3 decline expected, but 6% higher non-tax inflows suggest consumer strength.
- **Loan Growth**: Strong pipeline in PR and US; construction portfolio payoff expected in Q4.
- **Federal Stimulus**: Engaged in P3 projects; government agility may accelerate deployment of $200M+ in local activity from Bad Bunny concerts.


Popular, Inc. (BPOP) Q2 2025 Earnings Conference Call Transcript

- **CEO Transition Smooth**: Javier Ferrer takes over with strong track record, maintaining focus on Puerto Rico's economic strength.
- **Financial Performance Strong**: Q1 NII up 15%, NIM +5bps, and credit metrics improve amid macro uncertainty.
- **Deposit Growth Resilient**: $935M deposit increase driven by tax refunds and retention efforts, offsetting US repricing lag.
- **Credit Quality Improves**: Net charge-offs down 27%, NPL ratio down 11bps, with ACL conservative at 205bps.
- **Share Buybacks Active**: $340M repurchased YTD, with ROTCE at 11.4% and CET1 at 16.1% supporting capital returns.

**【CEO Opening Remarks】**
- Ignacio Alvarez announced his upcoming retirement on June 30, 2025, with Javier Ferrer succeeding him as CEO. Alvarez praised Ferrer's leadership and experience, emphasizing a smooth transition.
- Ferrer highlighted Q1 2025 performance: net interest income up $15M, NIM +5bps to 3.4%, loan growth $146M, and deposit growth $935M. Credit quality improved with lower charge-offs and early delinquencies.
- Ferrer emphasized Puerto Rico's economic resilience (5.5% unemployment, 6% card sales growth) and federal disaster recovery funds supporting long-term growth.

**【CFO Financial Highlights】**
- Net interest income increased 15% YoY, driven by asset repricing and lower deposit costs. NIM expanded 5bps (GAAP) and 11bps (tax-equivalent) due to tax-exempt securities.
- Non-interest income ($152M) fell $13M vs. Q4, primarily due to MSR fair value adjustments. Full-year guidance remains $155M-$160M.
- Operating expenses rose $3M, driven by annual incentives and payroll taxes. Full-year expense growth expected at 4%.
- CET1 ratio rose to 16.1%, with tangible book value per share up $3.86 to $72.02. Share buybacks ($122M Q1, $340M YTD) and ROTCE of 11.4% reflect capital return focus.

**【Credit Quality Update】**
- Net charge-offs ($49M) improved 27% vs. Q4, with NPL ratio down 11bps to 84bps. ACL increased $16M to $762M, reflecting cautious economic outlook.
- Puerto Rico public deposits stable at $19.6B, while US deposits lag in repricing due to competitive online banking.

**【Q&A Key Themes】**
- **Tariff Uncertainty**: Management expects federal disaster funds to offset macro risks, with Puerto Rico's pharmaceutical sector poised for growth.
- **Deposit Strategy**: Teams focused on retention, with tax refund inflows ($200M ahead of 2024) driving Q1 growth. Seasonal outflows may occur post-April.
- **Loan Growth**: Guidance maintained at 3%-5%, but lower end more likely due to macro uncertainty. Construction and healthcare lending remain strong.
- **Capital Return**: CET1 ratio of 16.1% allows continued buybacks ($160M remaining in $500M auth). No immediate plans to lower target ratio below 14%.


Popular (BPOP)-23 Apr 25-2025 Q1 Earnings call transcript

- **Record 2024 Performance**: Net income up 13.5%, adjusted net income +10%, with $2 billion loan growth.
- **Shareholder Returns**: $220 million buybacks and $0.70 dividend, resuming $500M authorization.
- **NIM Expansion**: 2025 NII growth 7-9%, driven by $600M/month Treasury reinvestments at 4%.
- **Loan Growth Outlook**: 3-5% YoY in 2025, supported by Puerto Rico commercial and Florida construction lending.
- **Credit Stability**: NPL ratio 0.95%, net charge-offs 74bps, within 65-85bps guidance.
- **Federal Funding**: $45-47B recovery funds for electric grid, water, and housing projects over 7-10 years.


**【CEO Opening Remarks】**
- **Annual Net Income Growth**: $614 million in 2024 vs. $541 million in 2023, with adjusted net income up 10% to $646 million.
- **Loan Growth**: Total loan growth of $2 billion (5.8% YoY), driven by commercial lending in Puerto Rico and construction loans in Florida.
- **Capital Returns**: Resumed $500 million stock buyback program, repurchasing 2.3 million shares ($220 million) in 2024. Dividend increased to $0.70 per share.
- **Tangible Book Value**: $68.16 per share, up 14% YoY, driven by lower unrealized losses and net income.

**【CFO Financial Highlights】**
- **Q4 2024 Results**: Net income of $178 million (+$23 million QoQ), net interest income up $18 million, NIM expands 11bps to 3.35%.
- **Deposit Management**: Puerto Rico public deposits stabilize at $19.5 billion, U.S. deposits decline $190 million. Expect public deposits to remain $18-20 billion in 2025.
- **Expense Control**: Total expenses flat QoQ at $468 million, 2025 full-year expense growth expected at 4%.
- **Tax Rate**: 20% in Q4, 23% for 2024. 2025 effective tax rate expected 19-21%.

**【CRO Credit Quality Update】**
- **NPLs**: 0.95% of loans, stable QoQ. BPPR auto loans increase $3 million, PV commercial NPLs decrease $40 million.
- **Net Charge-offs**: $77 million (74bps annualized), within 65-85bps guidance. 2025 guidance: 70-90bps.
- **Allowance for Credit Losses**: $746 million, 2.01% of loans. ACL/NPL ratio 213%.

**【Q&A Key Themes】**
- **Deposit Trends**: $600-800 million high-cost deposits at risk, but 2024 efforts reduce Puerto Rico non-public deposits by $100 million QoQ.
- **NIM Expansion**: 2025 NII growth 7-9%, driven by reinvesting $600 million/month in 4% U.S. Treasuries and lower Puerto Rico public deposit costs.
- **Loan Growth**: 3-5% YoY in 2025, with Q4 2024 $913 million (+2.5%) as strong start.
- **Federal Funds**: $45-47 billion FEMA/HUD recovery funds remaining, focused on electric grid, water, and housing.
- **Credit Card Portfolio**: Tightened underwriting standards, higher FICO scores for new originations.


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