Popular, Inc. · NASDAQ:BPOP
Popular — Q3 2024 Earnings Presentation
27 slides from Popular's earnings presentation, Oct 23, 2024
Slide 1: Investor Presentation Third Quarter 2024
Investor Presentation Third Quarter 2024
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: Q3 2024 Highlights
Q3 2024 Highlights Financial Highlights Quarter Highlights ($ in millions, except per share information) Income Statement Q3 2024 Q2 2024 Change Q3 2023 Highlights: Net Income $ 155 $ 178 $ (23) $ 137 • Net income of $155 million, decreased $23 million, mainly driven by Net Interest Margin (NIM) 3.2
Slide 4: Business Highlights
Business Highlights BPPR Popular U.S. ($ in millions) Q3 2024 Q2 2024 Change Q3 2023 ($ in millions) Q3 2024 Q2 2024 Change Q3 2023 Loans Held in Portfolio $ 25,694 $ 25,111 $ 583 $23,729 Loans Held in Portfolio $ 10,469 $ 10,448 $ 21 $ 10,267 P.R. Government Deposits 18,716 19,722 (1,006) 17,750 To
Slide 5: Financial Summary
Financial Summary Quarterly Results and Variances (unaudited) ($ in thousands, except EPS) Q3 2024 Q2 2024 Variance Net interest income $ 572,473 $ 568,312 $ 4,161 Provision for credit losses 71,448 46,794 24,654 Net interest income after provision for credit losses $ 501,025 $ 521,518 $ (20,493) Se
Slide 6: Net Interest Margin Dynamics
Net Interest Margin Dynamics Quarter Highlights: Earning Assets • Total earning assets decreased by $1.2 billion: (ending balances, $ in billions)1 • $1.8 billion lower money market and investment $66.1 $67.2 $67.4 $69.2 $68.0 securities, partially offset by $603 million higher loan 70 0.1 4 $35.1 $
Slide 7: Capital
Capital Quarter Highlights: Popular, Inc. • Leverage ratio increased 14 bps to 8.67%; ratio impacted by a high proportion of zero-risk weighted assets on the balance Q3 2024 Q2 2024 sheet, which represented 40% of total assets 0.2 • 0.1 8 Common Equity Tier 1 of 16.48%, decreased 6 bps 0.1 6 18.24%
Slide 8: Non-Performing Assets
Non-Performing Assets Quarter Highlights: Non-Performing Assets • Non-Performing Loans (NPLs) increased $19 million: ($ in millions) • NPLs inflows decreased $7 million 600 $547 0.04 $529 $504 • BPPR NPLs increased $2 million to $289 million, or 1.1% of $472 0.035 loans 500 $444 $438 $435 $412 $424
Slide 9: NCOs and Allowance for Credit Losses
NCOs and Allowance for Credit Losses Quarter Highlights: Allowance for Credit Losses • NCO ratio increased 4 bps to 0.65% ($ in millions) • NCOs increased $5 million to $59 million Reserve Reserve Balance Build Balance Build Balance ACL/Loan • BPPR NCOs increased $5 million to $55 million: Portfolio
Slide 10: Allowance for Credit Losses – Q3 2024
Allowance for Credit Losses – Q3 2024 ACL Movement: • Moody’s economic scenario shows a deceleration in ACL Movement P.R. economic activity during 2024, in part driven by a ($ in millions) reduction in the P.R. Economic Activity Index1 • Economic scenario variance in the ACL mainly driven by changes
Slide 11: Driving Value
Driving Value Market leader in Puerto Rico • Substantial liquidity with diversified deposit base • Well-positioned to take advantage of ongoing economic growth • Focused on customer service supported by broad branch network • Differentiated omnichannel experience Franchise • Diversified fee income •
Slide 12: 2024 Results Guidance
2024 Results Guidance January 2024 Original Guidance October 2024 Guidance Net Interest 1.5%-2% increase in the fourth quarter of 2024; 9%-13% increase for the year Income 6%-7% increase for the year Non-Interest $160-$165 million per quarter $160-$165 million per quarter Income NCOs 65-85 bps annua
Slide 13: Footnotes
Footnotes Slide 3: (1) Fully taxable equivalent (“FTE”) net interest margin represents a non-GAAP financial measure. See the Corporation's earnings press release, Form 10-Q and Form 10-K filed with the U.S. Securities and Exchange Commission for the applicable periods for a GAAP to non-GAAP reconcil
Slide 14: Appendix
Investor Presentation Third Quarter 2024 Appendix 14
Slide 15: Corporate Structure
Corporate Structure Franchise Summary Corporate Structure Industry Financial Services Headquarters San Juan, Puerto Rico Assets = $71 billion Assets $71 billion (among top 50 BHCs in the U.S.) Holding Co. Banco Popular Popular’s Popular North (Including Popular de Securities Insurance America, Inc.
Slide 16: Q3 2024 vs Q2 2024 Business Segments
Q3 2024 vs Q2 2024 Business Segments Financial Results BPPR Popular U.S. (Unaudited) ($ in millions) Q3 2024 Q2 2024 Variance Q3 2024 Q2 2024 Variance Net interest income $ 488 $ 489 $ (1) $ 93 $ 86 $ 7 Provision for credit losses 78 51 27 (6) (3) (3) Net interest income after provision for credit l
Slide 17: Deposit Mix and Historical Beta
Deposit Mix and Historical Beta • With the rate cycle transitioning, we expect higher beta products (mainly in the U.S.) to respond to rate reductions with similar elasticity to declining rates, subject to competitive market dynamics • Lower beta products include P.R. retail and commercial deposits
Slide 18: Investment Portfolio
Investment Portfolio Quarter Highlights: $ in millions Q3 2024 Variance to Q2 2024 • Conservative investment portfolio, with the majority Amortized % of Book Gain / Maturity1 Amortized Gain / Description Cost Portfolio Value (Loss) Yield / WAL Cost (Loss) invested in short to intermediate U.S. Treas
Slide 19: 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 September 30, 2024, our direct exposure to P.R. municipalities was $336 million, down by $40 million QoQ. Municipalities Outstanding P.R. government exposure ($
Slide 20: Non-Owner Occupied CRE Portfolio
Non-Owner Occupied CRE Portfolio Quarter Highlights: Non-Owner Occupied CRE • Non-Owner Occupied CRE (CRE NOO) mainly in retail, hotels and office ($ in millions) space $5,035 $5,087 $5,057 $5,004 $5,185 • Office exposure limited to 2.0% of total loan portfolio and 14% of CRE $2,086 $2,082 $2,061 $2
Slide 21: Multifamily Loans Portfolios
Multifamily Loans Portfolios Quarter Highlights: Multifamily Loans • 87% of the portfolio concentrated in Popular U.S. ($ in millions) 2.0% • Strong credit risk profile with low levels of delinquency, NCOs and $2,416 $2,405 1.8% classified loans: $2,328 $2,385 $2,384 1.6% • 30-89 DPD/Loans at 0.12%
Slide 22: Auto Loans Portfolio
Auto Loans Portfolio Quarter Highlights: Delinquency Avg. 2011-2019 9/30/2024 ($in millions) 6.17% 4.67% • Auto balances have steadily increased since the pandemic 4500 0.06 • Delinquency and NCOs have gradually increased, but continue to $3,773 $3,819 $3,633 $3,661 $3,707 remain below pre-pandemic
Slide 23: Auto Leases Portfolio
Auto Leases Portfolio Quarter Highlights: Delinquency Avg. 2011-2019 9/30/2024 ($in millions) • Auto lease balances have grown steadily since the pandemic 2.06% 1.69% 2500 0.06 • Delinquency gradually increased during 2023, but stabilization observed in 2024 $1,887 $1,828 0.05 2000 $1,698 $1,732 $1,
Slide 24: Credit Cards Portfolio
Credit Cards Portfolio Quarter Highlights: Delinquency Avg. 2011-2019 9/30/2024 ($in millions) 3.74% 4.62% • Improvements in credit quality of originations 1400 0.06 • Balances continue to increase due to higher originations and $1,163 $1,187 $1,136 $1,142 0.055 increased usage post pandemic $1,124
Slide 25: P.R. Personal Loans Portfolio
P.R. Personal Loans Portfolio Quarter Highlights: Delinquency Avg. 2011-2019 9/30/2024 ($ in millions) • Improvements in credit quality of originations 3.61% 3.19% 200 0 0.06 • Portfolio balances have been increasing since the pandemic, but $1,763 $1,776 $1,746 $1,745 $1,754 $1,686 180 0 $1,586 $1,6
Slide 26: Popular, Inc. Credit Ratings
Popular, Inc. Credit Ratings SeniorSenior Unsecured 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 Fitch upgrades upgrades to B1 S&P upgrades to Moody’s upgrad
Slide 27: Investor Presentation Third Quarter 2024
Investor Presentation Third Quarter 2024