Slide 1: Investor Presentation Fourth Quarter 2023
INVESTOR PRESENTATION Fourth Quarter 2023
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation 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 an
Slide 3: 2023 Highlights
2023 Highlights Financial Highlights Annual Highlights $ in millions, except ratios and EPS Income Statement 2023 2022 Change Highlights: Net Income $ 541 $ 1,103 $ (562) • Adjusted net income of $587 million, excluding the after-tax impact of $45 million of the FDIC Special Assessment Net Interest
Slide 4: Q4 2023 Highlights
Q4 2023 Highlights Financial Highlights Quarter Highlights $ in millions, except ratios and EPS Income Statement Q4 2023 Q3 2023 Change Q4 2022 Highlights: Net Income $ 95 $ 137 $ (42) $ 257 • Adjusted net income of $140 million, excluding the after-tax Net Interest Margin 3.08% 3.07% 0.01% 3.28% im
Slide 5: Business Highlights
Business Highlights BPPR Business Metrics $ in millions, except ratios Q4 2023 Q3 2023 Change Q4 2022 BPPR: Loans Held in Portfolio $ 24,478 $ 23,729 $ 749 $ 22,512 • Loans increased by $749 million QoQ across all business P.R. Government Deposits 18,068 17,750 318 15,833 segments: Total Deposits 53
Slide 6: Financial Summary
Financial Summary (Unaudited) ($ in thousands) Q4 2023 Q3 2023 Variance Net interest income $ 534,180 $ 534,020 $ 160 Provision for credit losses 78,663 45,117 33,546 Net interest income after provision for credit losses $ 455,517 $ 488,903 $ (33,386) Service charges on deposits 37,699 37,318 381 Ot
Slide 7: Net Interest Margin Dynamics
Net Interest Margin Dynamics Total Loans and Deposits ($ in billions)1 $80 • Net interest margin of 3.08%; FTE net interest 52% 53% 52% 54% 55% $70 margin of 3.26%, an increase of 2 bps $60 $64 $63 $64 $61 $61 • Money market and investment securities are 48% $50 of earning assets $40 • FTE loan yiel
Slide 8: Deposit Mix and Historical Betas
Deposit Mix and Historical Betas • Total deposit cumulative beta of 36% at period end; total deposit beta at BPPR and PB of 32% and 56%, respectively ▪ Excluding public sector, BPPR’s cumulative beta at 7% ▪ PB cumulative betas higher due to the competitive environment and an increased balance of on
Slide 9: Capital
Capital Popular, Inc • Robust regulatory capital levels 16.8 16.3 16.9 16.4 18.7 18.1 • Common Equity Tier 1 of 16.3% decreased 51 bps due to the increase in 8.4 8.5 6.2 risk weighted assets resulting from loan 5.3 growth during the quarter Common Equity Tier 1 Risk-Based Total Risk-Based Tier 1 Lev
Slide 10: Non-Performing Assets
Non-Performing Assets Q4 2023 vs Q3 2023 Variances: Non-Performing Assets • NPAs and NPLs decreased by $6 million and $4 million, $900 4.00% respectively $800 3.50% ▪ NPL inflows increased by $18 million, mostly driven $700 $633 $610 3.00% $570 by a single commercial relationship in the P.R. $600 $5
Slide 11: NCOs and Allowance for Credit Losses
NCOs and Allowance for Credit Losses NCOs and NCO-to-Loan Ratio ($ in millions) Q4 2023 vs Q3 2023 Variances: 0.66% • NCOs amounted to $57 million, increased by $57 $24 million $33 ▪ BPPR’s NCOs at $52 million, increased by $31 $33 $24 $26 million: $18 ▪ Commercial: NCOs of $4 million, a $4 $6 ($8)
Slide 12: Allowance for Credit Losses – Q4 2023 Movement
Allowance for Credit Losses – Q4 2023 Movement ACL Movement: • Moody’s November 2023 baseline scenario shows a slight improvement in GDP growth for 2023 and 2024, with unemployment remaining consistent with prior quarters • Economic scenario variance is driven by changes in income-based variables an
Slide 13: Driving Value
Driving Value • Market leader in Puerto Rico ▪ Substantial liquidity with diversified deposit base ▪ Well-positioned to take advantage of ongoing economic growth ▪ Focus on customer service supported by broad branch network ▪ Differentiated digital offering ▪ Diversified fee income driven by unmatch
Slide 14: 2024 Guidance
2024 Guidance Net Interest Income 9% - 13% increase for the year Non-Interest $160 - $165 million per quarter Income NCOs 65 - 85 bps annualized Operating $1.89 - $1.95 billion for the year Expenses Effective Tax 19% - 23% for the year Rate Loan Growth 3% - 6% for the year 14
Slide 15: Appendix
INVESTOR PRESENTATION Fourth Quarter 2023 Appendix
Slide 16: Corporate Structure
Corporate Structure Franchise Summary Corporate Structure Industry Financial Services Headquarters San Juan, Puerto Rico Assets = $71 billion Assets $71 billion (among Holding Popular’s Banco Popular Popular Popular North top 50 BHCs in the de Puerto Rico Securities LLC Insurance America, Inc. Compa
Slide 17: 2023 Financial Summary
2023 Financial Summary (Unaudited) ($ in thousands) 2023 2022 Variance Net interest income $ 2,131,524 $ 2,167,359 $ (35,835) Provision for credit losses 208,609 83,030 125,579 Net interest income after provision for credit losses $ 1,922,915 $ 2,084,329 $ (161,414) Service charges on deposits 147,4
Slide 18: Q4 2023 vs. Q3 2023 Business Segments
Q4 2023 vs. Q3 2023 Business Segments (Unaudited) BPPR Popular U.S. ($ in millions) Financial Results Q4 2023 Q3 2023 Variance Q4 2023 Q3 2023 Variance Net interest income $ 455 $ 454 $ 1 $ 86 $ 87 $ (1) Provision for credit losses (benefit) 67 52 15 12 (7) 19 Net interest income after provision for
Slide 19: 2023 vs. 2022 Business Segments
2023 vs. 2022 Business Segments (Unaudited) BPPR Popular U.S. ($ in millions) Financial Results 2023 2022 Variance 2023 2022 Variance Net interest income $ 1,812 $ 1,823 $ (11) $ 351 $ 373 $ (22) Provision for credit losses 195 70 125 15 13 2 Net interest income after provision for credit losses 1,6
Slide 20: Investment Portfolio
Investment Portfolio $ in millions Q4 2023 Variance to Q3 2023 • Conservative investment portfolio, with the majority invested in short to Amortized % of Book Gain / Maturity / Amortized Gain / intermediate U.S. Treasuries, which are Description Cost Portfolio Value (Loss) Yield WAL 1 Cost (Loss) ta
Slide 21: P.R. Public Sector Exposure
P.R. Public Sector Exposure The Corporation does not own any loans issued by the P.R. central government or its public corporations. As of December 31, 2023, our direct exposure to P.R. municipalities was $333 million, flat QoQ Outstanding P.R. government exposure Municipalities ($ in millions) Loan
Slide 22: Non-Owner Occupied CRE
Non-Owner Occupied CRE Highlights: Non-Owner Occupied CRE • Non-Owner Occupied CRE (CRE NOO) properties $ in millions concentrated in retail, hotels and office space ▪ Office exposure is limited, representing only 1.8% of total $4,744 $5,035 $5,087 3.3 $4,651 loan portfolio and 13% of CRE NOO $4,500
Slide 23: Auto Portfolio
Auto Portfolio Highlights: Delinquency Avg. 2011-2019 12/31/2023 ($ in millions) • Auto balances increased during the pandemic, but 6.17% 4.73% growth has moderated during recent quarters • Delinquency and NCOs have been gradually increasing, but remain below pre-pandemic at Q4 2023 • FICO mix of or
Slide 24: Auto Leases Portfolio
Auto Leases Portfolio Highlights: Delinquency ($ in millions) Avg. 2011-2019 12/31/2023 • Auto lease balances have continued to increase 2.06% 2.05% since the pandemic • Delinquency near pre-pandemic levels at Q4 2023 • NCOs increased in Q4 2023, surpassing pre- pandemic levels • FICO mix of origina
Slide 25: Credit Cards Portfolio
Credit Cards Portfolio Highlights: Delinquency Avg. 2011-2019 12/31/2023 ($ in millions) • Balances have been gradually increasing due to 3.74% 4.09% higher originations and increased usage post pandemic • Delinquency and NCOs have been gradually increasing, surpassing pre-pandemic levels in Q4 2023
Slide 26: P.R. Personal Loans Portfolio
P.R. Personal Loans Portfolio Highlights: Delinquency ($ in millions) Avg. 2011-2019 12/31/2023 • The portfolio balance has been steadily increasing 3.61% 2.97% due to higher originations • Delinquency has increased gradually during 2023, but remains below pre-pandemic performance • NCO rate has bee
Slide 27: Popular, Inc. Credit Ratings
Popular, Inc. Credit Ratings Senior SeniorUnsecured Ratings Unsecured Ratings Fitch BBB- Stable Outlook S&P BB+ Stable Outlook Moody’s Ba1 Stable Outlook 2018 2019 2020 2021 2022 April April Moody’s June Moody's April September upgrades to Ba3 Fitch upgrades upgrades to B1 S&P upgrades to Moody’s up
Slide 28: Investor Presentation Fourth Quarter 2023
INVESTOR PRESENTATION Fourth Quarter 2023