Exhibit 99.1

 

Popular, Inc. Announces Third Quarter 2024 Financial Results

 

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Net income of $155.3 million in Q3 2024, compared to net income of $177.8 million in Q2 2024.

 

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Net interest income of $572.5 million, an increase of $4.2 million compared to Q2 2024.

 

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Net interest margin of 3.24% in Q3 2024, compared to 3.22% in Q2 2024; net interest margin on a taxable equivalent basis of 3.47% in Q3 2024, compared to 3.48% in Q2 2024.

 

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Non-interest income of $164.1 million, compared to $166.3 million in Q2 2024.

 

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Operating expenses amounted to $467.3 million, down by $2.3 million when compared to Q2 2024.

 

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Credit quality metrics remained stable:

 

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Non-performing loans held-in-portfolio (“NPLs”) increased by $19.6 million from Q2 2024; NPLs to loans ratio remained flat at 1.0%;

 

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Net charge-offs (“NCOs”) increased by $4.9 million from Q2 2024; annualized NCOs to average loans held-in-portfolio at 0.65% vs. 0.61% in Q2 2024;

 

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Allowance for credit losses (“ACL”) to loans held-in-portfolio at 2.06% vs. 2.05% in Q2 2024; and

 

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ACL to NPLs at 206.0% vs. 213.6% in Q2 2024.

 

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Money market and investment securities ending balances decreased by $1.8 billion from Q2 2024

 

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Average quarterly balances decreased by $808.2 million.

 

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Loans ending balances, excluding loans held-for-sale, amounted to $36.2 billion, an increase of $603.3 million from Q2 2024.

 

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Average quarterly loan balances increased by $384.8 million.

 

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Ending deposit balances amounted to $63.7 billion, a decrease of $1.9 billion from Q2 2024.

 

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Average quarterly deposit balances decreased by $519.9 million.

 

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Completed the repurchase of 599,096 shares of common stock for $58.8 million at an average price of $98.11 per share, under the previously announced share repurchase authorization.

 

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Common Equity Tier 1 ratio of 16.42%, Common Equity per share of $80.35 and Tangible Book Value per share of $69.04 at September 30, 2024, an increase of $6.33 per share from Q2 2024.

SAN JUAN, Puerto Rico – (BUSINESS WIRE) – Popular, Inc. (the “Corporation,” “Popular,” “we,” “us,” “our”) (NASDAQ:BPOP) reported net income of $155.3 million for the quarter ended September 30, 2024, compared to net income of $177.8 million for the quarter ended June 30, 2024.

Ignacio Alvarez, Chief Executive Officer, said: “Our results for the third quarter reflected an increase in net interest income, which was offset by a higher provision for credit losses. The increase in the provision was related in part to loan growth of nearly 2% during the quarter. Credit quality trends remained stable. While consumer portfolios reflected increased delinquencies, they remain slightly below pre-pandemic levels.

Capital continues to be a source of strength, evidenced by the increase in our dividend and stock repurchases. We also experienced healthy increases in our tangible book value per share and TCE ratio.

We continued to advance our business transformation, making meaningful progress in modernizing our customer channels and improving the customer experience. We are optimistic about the future, as we continue to leverage the opportunities stemming from our robust balance sheet, our dedicated team and extensive customer base.”

 

1

Earnings Highlights

 

(Unaudited)		Quarters ended												Nine months ended
(Dollars in thousands, except per share information)		30-Sep-24				30-Jun-24				30-Sep-23				30-Sep-24				30-Sep-23
Net interest income		$	572,473			$	568,312			$	534,020			$	1,691,529			$	1,597,344
Provision for credit losses			71,448				46,794				45,117				190,840				129,946
Net interest income after provision for credit losses			501,025				521,518				488,903				1,500,689				1,467,398
Other non-interest income			164,082				166,306				159,549				494,206				481,981
Operating expenses			467,321				469,576				465,984				1,420,010				1,366,955
Income before income tax			197,786				218,248				182,468				574,885				582,424
Income tax expense			42,463				40,459				45,859				138,490				135,676
Net income		$	155,323			$	177,789			$	136,609			$	436,395			$	446,748
Net income applicable to common stock		$	154,970			$	177,436			$	136,256			$	435,336			$	445,689
Net income per common share-basic		$	2.16			$	2.47			$	1.90			$	6.06			$	6.22
Net income per common share-diluted		$	2.16			$	2.46			$	1.90			$	6.05			$	6.21

Non-GAAP Financial Measures

This press release contains financial information prepared under accounting principles generally accepted in the United States (“U.S. GAAP”) and non-GAAP financial 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. Non-GAAP financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by other companies.

Net interest income on a taxable equivalent basis

Net interest income, on a taxable equivalent basis, is presented with its different components in Tables D, E and F. Net interest income on a taxable equivalent basis is a non-GAAP financial measure. Management believes that this presentation provides meaningful information since it facilitates the comparison of revenues arising from taxable and tax-exempt sources.

Tangible Common Equity

The tangible common equity, tangible common equity ratio, tangible assets and tangible book value per common share are non-GAAP financial measures. Tangible common equity ratio and tangible book value per common share in conjunction with more traditional bank capital 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, typically stemming from the use of the purchase accounting method for mergers and acquisitions. Neither tangible common equity nor tangible assets or related measures should be used in isolation or as a substitute for stockholders’ equity, total assets or any other measure calculated in accordance with GAAP.

Refer to Table R for a reconciliation of total stockholders’ equity to tangible common equity and total assets to tangible assets.

 

2

Net interest income and net interest income on a taxable equivalent basis (non-GAAP )

Net interest income for the quarter ended September 30, 2024, was $572.5 million, an increase of $4.2 million when compared to $568.3 million for the previous quarter. Net interest margin for the third quarter of 2024 was 3.24% compared to 3.22% in the prior quarter.

Net Interest Income and Net Interest Margin Taxable Equivalent

Net interest income on a taxable equivalent basis for the third quarter of 2024 was $612.9 million, compared to $614.8 million in the previous quarter, a decrease of $1.8 million. Net interest margin on a taxable equivalent basis for the third quarter of 2024 was 3.47%, compared to 3.48% in the second quarter of 2024 driven by lower exempt income from U.S. Treasury Securities.

The main variances in net interest income and net interest margin on a taxable equivalent basis were:

 

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lower interest income from investment securities by $14.6 million due to lower volume of U.S. Treasury Bills by $1.2 billion due to the slow down in the reinvestment activity of matured investments, in part due to a reduction in average deposit balances during the quarter of $519.9 million, mainly P.R. low cost deposits, and funding loan growth; and

 

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higher interest expense from deposits by $11.0 million, due to higher cost of interest-bearing deposits by eight basis points. In Puerto Rico, government interest-bearing deposits increased by two basis points, and their average balances increased by $176.1 million quarter-over-quarter. This cost of deposits during the quarter was further impacted by a 21 basis points increase in the overall cost of time deposits, including the full quarter effect of the repricing of certain P.R. government deposits managed by the Corporation’s fiduciary services division, which were repriced late in the second quarter;

partially offset by:

 

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higher income from money market investments by $7.7 million due to higher volumes by $562.7 million compared to the previous quarter; and

 

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higher interest income from loans by $16.3 million due to a higher average loan balance and higher yields, mainly in the commercial, mortgage and auto loans portfolio.

Net Interest Income and Net Interest Margin (Banco Popular de Puerto Rico Segment)

Net interest income for the Banco Popular de Puerto Rico (“BPPR”) segment amounted to $488.0 million for the third quarter of 2024, a decrease of $0.7 million when compared to $488.7 million in the previous quarter. Net interest margin in the BPPR segment increased from the second quarter of 2024 by one basis points to 3.41%. The most significant variances quarter-over-quarter were:

 

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interest income from investment securities decreased by $9.9 million, primarily due to a $1.3 billion reduction in the volume of U.S. Treasury bills. This decline was mainly caused by maturities and a slowdown in reinvestment, partly due to support loan growth and a lower deposit balance; and

 

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interest expense on deposits increased by $6.9 million, mainly driven by P.R. government deposits that increased two basis points or $4.7 million quarter-over-quarter. Time deposit costs went up by $2.1 million or a 24-basis point increase, driven by the full quarter effect of the repricing of certain P.R. government deposits managed by the Corporation’s fiduciary services division. The total deposit cost for the quarter was 1.89%, a six-basis point increase from the prior quarter;

partially offset by:

 

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an increase of $12.8 million in interest income from loans, primarily driven by a higher average loan balance across all portfolios. The most significant contributions to the quarter-over-quarter variance came from commercial loans, auto loans, and mortgage loans, which increased by $4.1 million, $2.9 million, and $2.2 million, respectively; and

 

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higher income from money market investments by $3.6 million due to higher volumes by $239.9 million.

Net Interest Income and Net Interest Margin (Popular Bank Segment)

Net interest income and net interest margin for the Popular Bank (“PB”, or “Popular U.S.”) segment increased compared to the previous quarter by $7.3 million and 13 basis points and totaled $93.1 million and 2.73%, respectively. The most significant variances quarter-over-quarter contributing to net interest income and net interest margin for PB were:

 

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interest income from money markets and investment securities increased by $5.3 million, mainly due to higher volume of money market investments by $284.0 million resulting from higher average deposit balances; and

 

3

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interest income from loans increased by $3.2 million mainly due to a higher yield in the commercial loan portfolio by 12 basis points;

partially offset by:

 

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total interest expense on deposits in PB increased by $1.4 million primarily due to an increase in the average balance of time deposits of $307.0 million partially offset by a decrease in time deposit costs of 23 basis points, driven by changes in the cost of intercompany deposits. When compared to the previous period, the overall cost of deposits fell by eight basis points.

Non-interest income

Non-interest income amounted to $164.1 million for the quarter ended September 30, 2024, a decrease of $2.2 million when compared to $166.3 million for the quarter ended June 30, 2024. The variance in non-interest income was primarily due to lower income from mortgage banking activities by $3.1 million, mainly due to a decrease in the fair value of Mortgage Servicing Rights (“MSRs”) driven by portfolio runoff, a slight increase in prepayment speeds and lower estimated escrow float earnings.

Refer to Table B for further details.

Operating expenses

Operating expenses for the third quarter of 2024 totaled $467.3 million, a decrease of $2.3 million when compared to the second quarter of 2024. The variance in operating expenses was driven primarily by:

 

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lower professional fees by $11.0 million mainly due to a decrease of $6.1 million in consulting fees related to corporate initiatives. The remaining decrease in professional fees is mainly attributed to lower legal service fees and equity compensation granted to directors during the second quarter of 2024;

 

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lower operational losses by $6.1 million due to a buildup of reserves for operational losses during the second quarter of 2024; and

 

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lower processing and transactional services expenses by $4.8 million mainly due to lower debit card issuance costs and point of service (POS) processing fees;

partially offset by:

 

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higher technology and software expenses by $8.7 million mainly driven by an increase of $3.0 million in IT project consulting fees, higher consulting fees for cybersecurity and fraud prevention initiatives, and higher software amortization expenses;

 

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higher personnel costs by $4.4 million mainly due to higher salary expense and contributions to employee savings plans resulting from annual salary revisions and merit increases effective in July 2024; partially offset by a decrease in restricted shares and incentive compensation expenses;

 

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higher other taxes expense by $2.4 million mainly due to an increase in municipal license tax and expenses related to regulatory examination fees in BPPR; and

 

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lower other real estate owned (OREO) benefit by $3.1 million mainly due to lower gains on sale of mortgage and commercial properties.

Full-time equivalent employees were 9,246 as of September 30, 2024, compared to 9,241 as of June 30, 2024.

For a breakdown of operating expenses by category refer to Table B.

Income taxes

For the quarter ended September 30, 2024, the Corporation recorded an income tax expense of $42.5 million, compared to an income tax expense of $40.5 million for the previous quarter.

The effective tax rate (“ETR”) for the third quarter of 2024 was 21.5%, compared to 18.5% for the previous quarter.

The ETR of the Corporation is impacted by the composition and source of its taxable income. The Corporation expects its ETR for the year 2024 to be within a range from 21% to 23%.

 

4

Credit Quality

The Corporation continued to reflect favorable credit quality metrics in the third quarter of 2024 when compared to the previous quarter. While non-performing loans (“NPLs”), net charge offs (“NCOs”) and inflows to NPLs remained below historical averages, consumer portfolios reflected increased delinquencies and NCOs for the quarter primarily driven by auto loans. The mortgage and commercial portfolios continue to operate with low level of delinquencies and NCOs. The Corporation continues to closely monitor changes in the macroeconomic environment and borrower performance given higher interest rates and inflationary pressures. Management believes that the improvements over recent years in risk management practices and the overall risk profile of the Corporation’s loan portfolios position Popular to continue to operate successfully under the current environment.

The following presents credit quality results for the third quarter of 2024:

Non-Performing Loans and Net Charge Offs

Total NPLs increased by $19.6 million compared to the previous quarter. Excluding consumer loans, inflows of NPLs held-in-the-portfolio saw a decrease of $7.7 million in the third quarter of 2024. The ratio of NPLs to total loans held in the portfolio remained steady at 1.0%, consistent with the prior quarter’s ratio. The drivers of these changes are mainly related to the following:

 

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In the BPPR segment, NPLs increased by $1.9 million, mainly driven by auto loans NPLs with a $8.5 million increase, offset in part by lower mortgage loans NPLs by $5.9 million. Excluding consumer loans, inflows to NPLs in the BPPR segment decreased by $4.5 million compared to the previous quarter.

 

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In the PB segment, NPLs increased by $17.6 million driven by a single $17.1 million mortgage loan. Inflows to NPLs, excluding consumer loans, decreased by $3.2 million, driven by lower inflows in the commercial portfolio by $19.6 million, offset in part by a single mortgage relationship.

Total NCOs of $58.5 million, increased by $4.9 million when compared to the second quarter of 2024. The Corporation’s ratio of annualized NCOs to average loans held-in-portfolio was 0.65%, compared to 0.61% in the second quarter of 2024. The drivers of these changes are mainly related to the following:

 

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In the BPPR segment, NCOs increased by $5.3 million quarter-over-quarter, mainly driven by higher consumer NCOs by $8.6 million. NCOs increase in the consumer portfolio was mostly related to auto loans by $6.6 million.

 

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In the PB segment, NCOs remained flat quarter-over-quarter.

Refer to Table N for further information on NCOs and related ratios.

Other Real Estate Owned Properties (“OREO”)

As of September 30, 2024, the Corporation’s OREO portfolio amounted to $63.0 million, a decrease of $7.2 million when compared to the second quarter of 2024. The decrease in OREO assets was driven by sales of residential properties in the BPPR segment.

Refer to Table L for additional information and related ratios.

Allowance for Credit Losses (“ACL”) and Provision for Credit Losses (“PCL”)

The ACL as of September 30, 2024 amounted to $744.3 million, an increase of $14.2 million when compared to the second quarter of 2024.

In the BPPR segment, the ACL increased by $22.6 million driven by an increase of $13.9 million in reserves for commercial loans and an $8.4 million increase in reserves for consumer portfolios. These increases were mainly due to a combination of growth in the commercial portfolio and changes in credit quality trends for the auto and credit cards portfolio. In the PB segment, the ACL decreased by $8.3 million from the previous quarter, mainly driven by lower reserves for the commercial and construction portfolios due to improvements in credit quality and lower balances.

The Corporation’s ratio of the ACL to loans held-in-portfolio was 2.06% in the third quarter of 2024, compared to 2.05% in the previous quarter. The ratio of the ACL to NPLs held-in-portfolio was 206.0%, down from 213.6% in the previous quarter.

 

5

The provision for loan losses for the loan and lease portfolios for the third quarter of 2024 was $72.8 million, compared to $44.2 million in the previous quarter. The provision loan losses for the BPPR segment amounted to $77.2 million, compared to $48.6 million in the previous quarter, an increase of $28.6 million largely driven by the commercial loan growth and changes in credit quality trends for the auto loans portfolios. The PB segment had a release of $4.4 million, consistent with the previous quarter and driven by improvements in credit quality.

The provision for loan losses for the loan and lease portfolios, along with the $0.5 million reserve release related to unfunded loan commitments and the $0.9 million reserve release in the Corporation’s investment portfolio for the third quarter of 2024, are consolidated and shown together under the provision for credit losses in our Consolidated Statement of Operations. For the third quarter, the provision for credit losses amounted to $71.4 million, up from $46.8 million in the previous quarter.

Non-Performing Assets

 

(Unaudited)
(In thousands)		30-Sep-24				30-Jun-24				30-Sep-23
Non-performing loans held-in-portfolio		$	361,398			$	341,835			$	361,523
Other real estate owned			63,028				70,225				82,322
Total non-performing assets		$	424,426			$	412,060			$	443,845
Net charge-offs for the quarter		$	58,529			$	53,630			$	32,655
Ratios:
Loans held-in-portfolio		$	36,194,967			$	35,591,620			$	34,029,313
Non-performing loans held-in-portfolio to loans held-in-portfolio			1.00	%			0.96	%			1.06	%
Allowance for credit losses to loans held-in-portfolio			2.06				2.05				2.09
Allowance for credit losses to non-performing loans, excluding loans held-for-sale			205.96				213.58				196.69

Refer to Table L for additional information.

Provision for Credit Losses (Benefit) - Loan Portfolios

 

(Unaudited)		Quarters ended												Nine months ended
(In thousands)		30-Sep-24				30-Jun-24				30-Sep-23				30-Sep-24				30-Sep-23
Provision for credit losses (benefit) - loan portfolios:
BPPR		$	77,147			$	48,585			$	54,017			$	186,740			$	127,599
Popular U.S.			(4,378	)			(4,428	)			(10,503	)			2,572				(1,278	)
Total provision for credit losses (benefit) - loan portfolios		$	72,769			$	44,157			$	43,514			$	189,312			$	126,321

 

6

Credit Quality by Segment

 

(Unaudited)
(In thousands)		Quarters ended
BPPR		30-Sep-24				30-Jun-24				30-Sep-23
Provision for credit losses - loan portfolios		$	77,147			$	48,585			$	54,017
Net charge-offs			54,581				49,308				25,600
Total non-performing loans held-in-portfolio			288,815				286,887				333,825
Annualized net charge-offs to average loans held-in-portfolio			0.86	%			0.79	%			0.44	%
Allowance / loans held-in-portfolio			2.59	%			2.56	%			2.63	%
Allowance / non-performing loans held-in-portfolio			230.66	%			224.34	%			187.08	%
		Quarters ended
Popular U.S.		30-Sep-24				30-Jun-24				30-Sep-23
Provision for credit losses (benefit) - loan portfolios		$	(4,378	)		$	(4,428	)		$	(10,503	)
Net charge-offs			3,948				4,322				7,055
Total non-performing loans held-in-portfolio			72,583				54,948				27,698
Annualized net charge-offs to average loans held-in-portfolio			0.15	%			0.16	%			0.28	%
Allowance / loans held-in-portfolio			0.75	%			0.83	%			0.84	%
Allowance / non-performing loans held-in-portfolio			107.66	%			157.37	%			312.42	%

Financial Condition Highlights

 

(Unaudited)
(In thousands)		30-Sep-24				30-Jun-24				30-Sep-23
Cash and money market investments		$	6,958,382			$	7,211,367			$	6,924,772
Investment securities			25,280,451				26,742,639				25,653,616
Loans			36,194,967				35,591,620				34,029,313
Total assets			71,323,074				72,845,072				69,736,936
Deposits			63,668,501				65,530,862				63,337,600
Borrowings			973,736				1,047,264				1,097,720
Total liabilities			65,532,560				67,472,394				65,279,328
Stockholders’ equity			5,790,514				5,372,678				4,457,608

 

7

Total assets amounted to $71.3 billion at September 30, 2024, a decrease of $1.5 billion from the second quarter of 2024, driven by:

 

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a decrease in securities available-for-sale (“AFS”) of $1.4 billion, mainly due to repayments and maturities, partially offset by a decrease in the unrealized losses of AFS securities of $378.9 million;

 

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a decrease in other assets of $404.6 million, driven by unsettled trade receivables related to proceeds from maturities of U.S. Treasury Notes and interest payments from the second quarter of 2024 which were received in the third quarter; and

 

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a decrease in money market investments of $320.6 million, mainly driven by lower deposits and deployment of funds to support loan growth;

partially offset by:

 

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an increase in loans held-in-portfolio by $603.3 million, primarily in BPPR with an increase of $582.1 million across most portfolios, particularly commercial loans, while PB’s increased by $21.2 million.

Total liabilities decreased by $1.9 billion from the second quarter of 2024, driven by:

 

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a decrease of $1.9 billion in deposits, mainly driven by interest bearing deposit accounts in BPPR, including the P.R. government demand accounts, offset by an increase in time deposits at PB.

Stockholders’ equity increased by $417.8 million from the second quarter of 2024 mainly due to the change in the accumulated other comprehensive loss driven by the decrease in net unrealized losses in the portfolio of AFS securities of $326.1 million and the amortization of unrealized losses from securities previously reclassified to HTM of $36.3 million, net of tax effect, coupled with retained earnings resulting from the quarter’s net income of $155.3 million, partially offset by common and preferred dividends declared during the quarter of $45.0 million and by an increase in Treasury Stock due to the repurchases of 599,096 shares of common stock for $58.8 million during the quarter as part of the previously announced authorization.

The Corporation is in the process of completing its annual goodwill impairment test, using July 31, 2024 as the evaluation date. The Corporation expects to finalize its evaluation prior to the filing of its Form 10-Q for the quarter ended September 30, 2024 with the Securities and Exchange Commission. Any impairment of goodwill would result in a non-cash expense, net of tax impact. A charge to earnings related to goodwill impairment would not materially impact regulatory capital and tangible capital calculations.

Common Equity Tier 1 ratio (“CET1”), common equity per share and tangible book value per share were 16.42%, $80.35 and $69.04, respectively, at September 30, 2024, compared to 16.48%, $73.94 and $62.71, respectively, at June 30, 2024. Refer to Table A for capital ratios.

 

8

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation those regarding Popular’s business, financial condition, results of operations, plans, objectives and future performance. These statements are not guarantees of future performance, are based on management’s current expectations and, by their nature, involve risks, uncertainties, estimates and assumptions. Potential factors, some of which are beyond the Corporation’s control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. Risks and uncertainties include, without limitation, the effect of competitive and economic factors, and our reaction to those factors, the adequacy of the allowance for loan losses, delinquency trends, market risk and the impact of interest rate changes (including on our cost of deposits), our ability to attract deposits and grow our loan portfolio, capital market conditions, capital adequacy and liquidity, the effect of legal and regulatory proceedings, new regulatory requirements or accounting standards on the Corporation’s financial condition and results of operations, the occurrence of unforeseen or catastrophic events, including extreme weather events, pandemics, man-made disasters or acts of violence or war, as well as actions taken by governmental authorities in response thereto, and the direct and indirect impact of such events on Popular, our customers, service providers and third parties. Other potential factors include Popular’s ability to successfully execute its transformation initiative, including, but not limited to, achieving projected earnings, efficiencies and return on tangible common equity and accurately anticipating costs and expenses associated therewith, imposition of additional or special FDIC assessments, changes to regulatory capital, liquidity and resolution-related requirements applicable to financial institutions in response to recent developments affecting the banking sector and the impact of bank failures or adverse developments at other banks and related negative media coverage of the banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks. All statements contained herein that are not clearly historical in nature, are forward-looking, and the words “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” “project” and similar expressions, and future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, are generally intended to identify forward-looking statements.

More information on the risks and important factors that could affect the Corporation’s future results and financial condition is included in our Form 10-K for the year ended December 31, 2023, our Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 and the Form 10-Q for the quarter ended September 30, 2024, to be filed with the Securities and Exchange Commission. Our filings are available on the Corporation’s website (www.popular.com) and on the Securities and Exchange Commission website (www.sec.gov). The Corporation assumes no obligation to update or revise any forward-looking statements or information which speak as of their respective dates.

About Popular, Inc.

Popular, Inc. (NASDAQ: BPOP) 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. Founded in 1893, 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. Popular also offers in Puerto Rico auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. 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.

Conference Call

Popular will hold a conference call to discuss its financial results today, Wednesday, October 23, 2024 at 11:00 a.m. Eastern Time. The call will be broadcast live over the Internet and can be accessed through the Investor Relations section of the Corporation’s website: www.popular.com.

Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through a dial-in telephone number 1-833-470-1428 (Toll Free) or 1-404-975-4839 (Local). The dial-in access code is 177500.

A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Friday, November 22, 2024. The replay dial in is: 1-866-813-9403 or 1-929-458-6194. The replay passcode is 473434.

An electronic version of this press release can be found at the Corporation’s website: www.popular.com.

 

9

Popular, Inc.

Financial Supplement to Third Quarter 2024 Earnings Release

 

Table A - Selected Ratios and Other Information

Table B - Consolidated Statement of Operations

Table C - Consolidated Statement of Financial Condition

Table D - Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - QUARTER

Table E - Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - QUARTER

Table F - Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP) - YEAR-TO-DATE

Table G - Mortgage Banking Activities and Other Service Fees

Table H - Loans and Deposits

Table I - Loan Delinquency - BPPR Operations

Table J - Loan Delinquency - Popular U.S. Operations

Table K - Loan Delinquency - Consolidated

Table L - Non-Performing Assets

Table M - Activity in Non-Performing Loans

Table N - Allowance for Credit Losses, Net Charge-offs and Related Ratios

Table O - Allowance for Credit Losses ‘‘ACL’’ - Loan Portfolios - BPPR Operations

Table P - Allowance for Credit Losses ‘‘ACL’’ - Loan Portfolios - Popular U.S. Operations

Table Q - Allowance for Credit Losses ‘‘ACL’’ - Loan Portfolios - Consolidated

Table R - Reconciliation to GAAP Financial Measures

 

10

POPULAR, INC.

Financial Supplement to Third Quarter 2024 Earnings Release

Table A - Selected Ratios and Other Information

(Unaudited)

 

		Quarters ended												Nine months ended
		30-Sep-24				30-Jun-24				30-Sep-23				30-Sep-24				30-Sep-23
Basic EPS		$	2.16			$	2.47			$	1.90			$	6.06			$	6.22
Diluted EPS		$	2.16			$	2.46			$	1.90			$	6.05			$	6.21
Average common shares outstanding			71,807,136				71,970,773				71,794,934				71,882,273				71,676,630
Average common shares outstanding - assuming dilution			71,828,402				71,991,911				71,818,102				71,912,153				71,736,514
Common shares outstanding at end of period			71,787,349				72,365,926				72,127,595				71,787,349				72,127,595
Market value per common share		$	100.27			$	88.43			$	63.01			$	100.27			$	63.01
Market capitalization - (In millions)		$	7,198			$	6,399			$	4,545			$	7,198			$	4,545
Return on average assets			0.84	%			0.97	%			0.75	%			0.79	%			0.84	%
Return on average common equity			8.82	%			10.38	%			8.17	%			8.43	%			9.13	%
Net interest margin (non-taxable equivalent basis)			3.24	%			3.22	%			3.07	%			3.20	%			3.14	%
Net interest margin (taxable equivalent basis) -non-GAAP			3.47	%			3.48	%			3.24	%			3.44	%			3.32	%
Common equity per share		$	80.35			$	73.94			$	61.49			$	80.35			$	61.49
Tangible common book value per common share (non-GAAP) [1]		$	69.04			$	62.71			$	50.20			$	69.04			$	50.20
Tangible common equity to tangible assets (non-GAAP) [1]			7.03	%			6.30	%			5.25	%			7.03	%			5.25	%
Return on average tangible common equity [1]			9.98	%			11.77	%			9.36	%			9.56	%			10.48	%
Tier 1 capital			16.48	%			16.54	%			16.87	%			16.48	%			16.87	%
Total capital			18.24	%			18.30	%			18.67	%			18.24	%			18.67	%
Tier 1 leverage			8.67	%			8.53	%			8.41	%			8.67	%			8.41	%
Common Equity Tier 1 capital			16.42	%			16.48	%			16.81	%			16.42	%			16.81	%

 

[1]	Refer to Table R for reconciliation to GAAP financial measures.

 

11

POPULAR, INC.

Financial Supplement to Third Quarter 2024 Earnings Release

Table B - Consolidated Statement of Operations

(Unaudited)

 

		Quarters ended								Variance Q3 2024 vs. Q2 2024				Quarter ended				Variance Q3 2024 vs. Q3 2023				Nine months ended
(In thousands, except per share information)		30-Sep-24				30-Jun-24								30-Sep-23								30-Sep-24				30-Sep-23
Interest income:
Loans		$	664,731			$	648,739			$	15,992			$	596,886			$	67,845			$	1,952,200			$	1,708,216
Money market investments			96,061				88,316				7,745				99,286				(3,225	)			272,893				265,785
Investment securities			176,656				184,852				(8,196	)			148,614				28,042				528,403				403,814
Total interest income			937,448				921,907				15,541				844,786				92,662				2,753,496				2,377,815
Interest expense:
Deposits			350,985				339,939				11,046				294,121				56,864				1,020,420				730,824
Short-term borrowings			1,430				1,126				304				1,478				(48	)			3,748				5,987
Long-term debt			12,560				12,530				30				15,167				(2,607	)			37,799				43,660
Total interest expense			364,975				353,595				11,380				310,766				54,209				1,061,967				780,471
Net interest income			572,473				568,312				4,161				534,020				38,453				1,691,529				1,597,344
Provision for credit losses			71,448				46,794				24,654				45,117				26,331				190,840				129,946
Net interest income after provision for credit losses			501,025				521,518				(20,493	)			488,903				12,122				1,500,689				1,467,398
Service charges on deposit accounts			38,315				37,526				789				37,318				997				113,283				109,777
Other service fees			98,748				96,863				1,885				93,407				5,341				289,883				277,748
Mortgage banking activities			2,670				5,723				(3,053	)			5,393				(2,723	)			12,753				15,109
Net (loss) gain, including impairment, on equity securities			(546	)			319				(865	)			(1,319	)			773				876				1,165
Net gain on trading account debt securities			817				277				540				219				598				1,455				632
Net loss on sale of loans, including valuation adjustments on loans held-for-sale			—				—				—				(44	)			44				—				(44	)
Adjustments to indemnity reserves on loans sold			808				212				596				(187	)			995				783				(31	)
Other operating income			23,270				25,386				(2,116	)			24,762				(1,492	)			75,173				77,625
Total non-interest income			164,082				166,306				(2,224	)			159,549				4,533				494,206				481,981
Operating expenses:
Personnel costs
Salaries			135,983				128,634				7,349				127,832				8,151				394,001				378,126
Commissions, incentives and other bonuses			26,350				30,626				(4,276	)			27,670				(1,320	)			95,587				86,025
Pension, postretirement and medical insurance			16,387				16,619				(232	)			16,985				(598	)			50,391				49,871
Other personnel costs, including payroll taxes			23,136				21,545				1,591				20,665				2,471				74,678				69,358
Total personnel costs			201,856				197,424				4,432				193,152				8,704				614,657				583,380
Net occupancy expenses			28,031				27,692				339				28,100				(69	)			83,764				81,304
Equipment expenses			9,349				9,662				(313	)			8,905				444				28,578				26,878
Other taxes			17,757				15,333				2,424				8,590				9,167				47,465				41,290
Professional fees			26,708				37,744				(11,036	)			38,514				(11,806	)			93,370				122,077
Technology and software expenses			88,452				79,752				8,700				72,930				15,522				247,666				213,843
Processing and transactional services
Credit and debit cards			11,761				13,739				(1,978	)			13,762				(2,001	)			37,644				37,896
Other processing and transactional services			22,559				25,357				(2,798	)			24,137				(1,578	)			69,966				70,713
Total processing and transactional services			34,320				39,096				(4,776	)			37,899				(3,579	)			107,610				108,609
Communications			5,229				4,357				872				4,220				1,009				14,143				12,483
Business promotion
Rewards and customer loyalty programs			16,533				16,406				127				15,988				545				46,995				44,962
Other business promotion			9,104				9,043				61				7,087				2,017				25,080				22,067
Total business promotion			25,637				25,449				188				23,075				2,562				72,075				67,029
Deposit insurance			10,433				10,581				(148	)			8,932				1,501				44,901				24,600
Other real estate owned (OREO) income			(2,674	)			(5,750	)			3,076				(5,189	)			2,515				(13,745	)			(10,197	)
Other operating expenses

 

12

Operational losses			5,769				11,823				(6,054	)			5,504				265				21,153				16,584
All other			15,750				15,679				71				17,557				(1,807	)			56,140				53,690
Total other operating expenses			21,519				27,502				(5,983	)			23,061				(1,542	)			77,293				70,274
Amortization of intangibles			704				734				(30	)			795				(91	)			2,233				2,385
Goodwill impairment charge			—				—				—				23,000				(23,000	)			—				23,000
Total operating expenses			467,321				469,576				(2,255	)			465,984				1,337				1,420,010				1,366,955
Income before income tax			197,786				218,248				(20,462	)			182,468				15,318				574,885				582,424
Income tax expense			42,463				40,459				2,004				45,859				(3,396	)			138,490				135,676
Net income		$	155,323			$	177,789			$	(22,466	)		$	136,609			$	18,714			$	436,395			$	446,748
Net income applicable to common stock		$	154,970			$	177,436			$	(22,466	)		$	136,256			$	18,714			$	435,336			$	445,689
Net income per common share - basic		$	2.16			$	2.47			$	(0.31	)		$	1.90			$	0.26			$	6.06			$	6.22
Net income per common share - diluted		$	2.16			$	2.46			$	(0.30	)		$	1.90			$	0.26			$	6.05			$	6.21
Dividends Declared per Common Share		$	0.62			$	0.62			$	—			$	0.55			$	0.07			$	1.86			$	1.65

 

13

Popular, Inc.

Financial Supplement to Third Quarter 2024 Earnings Release

Table C - Consolidated Statement of Financial Condition

(Unaudited)

 

(In thousands)		30-Sep-24				30-Jun-24				30-Sep-23				Variance Q3 2024 vs. Q2 2024
Assets:
Cash and due from banks		$	427,594			$	359,973			$	535,335			$	67,621
Money market investments			6,530,788				6,851,394				6,389,437				(320,606	)
Trading account debt securities, at fair value			30,843				28,045				30,988				2,798
Debt securities available-for-sale, at fair value			17,186,123				18,543,279				17,129,858				(1,357,156	)
Less: Allowance for credit losses			—				500				—				(500	)
Debt securities available-for-sale, net			17,186,123				18,542,779				17,129,858				(1,356,656	)
Debt securities held-to-maturity, at amortized cost			7,865,294				7,975,524				8,302,082				(110,230	)
Less: Allowance for credit losses			5,430				6,251				6,057				(821	)
Debt securities held-to-maturity, net			7,859,864				7,969,273				8,296,025				(109,409	)
Equity securities			198,191				195,791				190,688				2,400
Loans held-for-sale, at lower of cost or fair value			5,509				8,225				5,239				(2,716	)
Loans held-in-portfolio			36,599,612				35,978,602				34,369,775				621,010
Less: Unearned income			404,645				386,982				340,462				17,663
Allowance for credit losses			744,320				730,077				711,068				14,243
Total loans held-in-portfolio, net			35,450,647				34,861,543				33,318,245				589,104
Premises and equipment, net			624,376				599,058				534,384				25,318
Other real estate			63,028				70,225				82,322				(7,197	)
Accrued income receivable			257,406				260,162				257,833				(2,756	)
Mortgage servicing rights, at fair value			108,827				113,386				119,030				(4,559	)
Other assets			1,767,919				2,172,555				2,032,565				(404,636	)
Goodwill			804,428				804,428				804,428				—
Other intangible assets			7,531				8,235				10,559				(704	)
Total assets		$	71,323,074			$	72,845,072			$	69,736,936			$	(1,521,998	)
Liabilities and Stockholders’ Equity:
Liabilities:
Deposits:
Non-interest bearing		$	15,276,071			$	15,470,082			$	15,201,374			$	(194,011	)
Interest bearing			48,392,430				50,060,780				48,136,226				(1,668,350	)
Total deposits			63,668,501				65,530,862				63,337,600				(1,862,361	)
Assets sold under agreements to repurchase			55,360				105,684				93,071				(50,324	)
Notes payable			918,376				941,580				1,004,649				(23,204	)
Other liabilities			890,323				894,268				844,008				(3,945	)
Total liabilities			65,532,560				67,472,394				65,279,328				(1,939,834	)
Stockholders’ equity:
Preferred stock			22,143				22,143				22,143				—
Common stock			1,048				1,048				1,048				—
Surplus			4,853,869				4,852,747				4,797,364				1,122
Retained earnings			4,495,878				4,385,522				4,189,865				110,356
Treasury stock			(2,069,430	)			(2,010,500	)			(2,018,870	)			(58,930	)
Accumulated other comprehensive loss, net of tax			(1,512,994	)			(1,878,282	)			(2,533,942	)			365,288
Total stockholders’ equity			5,790,514				5,372,678				4,457,608				417,836
Total liabilities and stockholders’ equity		$	71,323,074			$	72,845,072			$	69,736,936			$	(1,521,998	)

 

14

Popular, Inc.

Financial Supplement to Third Quarter 2024 Earnings Release

Table D - Analysis of Levels and Yields on a Taxable Equivalent Basis (Non-GAAP)

For the quarters ended September 30, 2024 and June 30, 2024

(Unaudited)

 

Average Volume												Average Yields / Costs														Interest												Variance Attributable to
30-Sep-24				30-Jun-24				Variance				30-Sep-24				30-Jun-24				Variance						30-Sep-24				30-Jun-24				Variance				Rate				Volume
(In millions)																										(In thousands)
$	7,033			$	6,471			$	562				5.43	%			5.49	%			(0.06	)%		Money market investments		$	96,061			$	88,316			$	7,745			$	59			$	7,686
	27,569				28,943				(1,374	)			2.92				3.01				(0.09	)		Investment securities [1]			202,317				216,922				(14,605	)			(4,017	)			(10,588	)
	30				26				4				5.87				5.69				0.18			Trading securities			436				367				69				16				53
	34,632				35,440				(808	)			3.43				3.47				(0.04	)		Total money market, investment and trading securities			298,814				305,605				(6,791	)			(3,942	)			(2,849	)
																								Loans:
	17,798				17,707				91				6.90				6.86				0.04			Commercial			308,734				302,003				6,731				5,175				1,556
	1,129				1,070				59				8.85				9.11				(0.26	)		Construction			25,102				24,224				878				(446	)			1,324
	1,851				1,789				62				6.97				6.86				0.11			Leasing			32,241				30,697				1,544				472				1,072
	7,911				7,817				94				5.73				5.66				0.07			Mortgage			113,409				110,673				2,736				1,399				1,337
	3,211				3,192				19				14.08				13.97				0.11			Consumer			112,423				110,906				1,517				675				842
	3,879				3,819				60				8.94				8.88				0.06			Auto			87,189				84,268				2,921				1,575				1,346
	35,779				35,394				385				7.56				7.52				0.04			Total loans			679,098				662,771				16,327				8,850				7,477
$	70,411			$	70,834			$	(423	)			5.53	%			5.49	%			0.04	%		Total earning assets		$	977,912			$	968,376			$	9,536			$	4,908			$	4,628
																								Interest bearing deposits:
$	26,148			$	26,105			$	43				3.64	%			3.60	%			0.04	%		NOW and money market [2]		$	238,923			$	233,345			$	5,578			$	7,861			$	(2,283	)
	14,322				14,732				(410	)			0.92				0.92				—			Savings			33,169				33,795				(626	)			858				(1,484	)
	9,069				9,014				55				3.46				3.25				0.21			Time deposits			78,893				72,799				6,094				5,459				635
	49,539				49,851				(312	)			2.82				2.74				0.08			Total interest bearing deposits			350,985				339,939				11,046				14,178				(3,132	)
	14,968				15,176				(208	)														Non-interest bearing demand deposits
	64,507				65,027				(520	)			2.16				2.10				0.06			Total deposits			350,985				339,939				11,046				14,178				(3,132	)
	101				80				21				5.62				5.64				(0.02	)		Short-term borrowings			1,431				1,126				305				8				297
	950				978				(28	)			5.32				5.16				0.16			Other medium and long-term debt			12,560				12,530				30				131				(101	)
	50,590				50,909				(319	)			2.87				2.79				0.08			Total interest bearing liabilities (excluding demand deposits)			364,976				353,595				11,381				14,317				(2,936	)
	4,853				4,749				104															Other sources of funds
$	70,411			$	70,834			$	(423	)			2.06	%			2.01	%			0.05	%		Total source of funds			364,976				353,595				11,381				14,317				(2,936	)
													3.47	%			3.48	%			(0.01	)%		Net interest margin/ income on a taxable equivalent basis (Non-GAAP)			612,936				614,781				(1,845	)		$	(9,409	)		$	7,564
													2.66	%			2.70	%			(0.04	)%		Net interest spread
																								Taxable equivalent adjustment			40,464				46,469				(6,005	)
													3.24	%			3.22	%			0.02	%		Net interest margin/ income non-taxable equivalent basis (GAAP)		$	572,472			$	568,312			$	4,160

Note: The changes that are not due solely to volume or rate are allocated to volume and rate based on the proportion of the change in each category.

 

[1]	Average balances exclude unrealized gains or losses on debt securities available-for-sale and the unrealized loss related to certain securities transferred from available-for-sale to held-to-maturity.

[2]	Includes interest bearing demand deposits corresponding to certain government entities in Puerto Rico.

 

15