Slide 1: Investor Presentation First Quarter 2024
Investor Presentation First 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: Q1 2024 Highlights
Q1 2024 Highlights Financial Highlights Quarter Highlights $ in millions, except ratios and EPS Income Statement Q1 2024 Q4 2023 Change Q1 2023 Highlights: Net Income $ 103 $ 95 $ 8 $ 159 • Adjusted net income of $135 million, excluding the impact of the Q1 2024 Adjusted Net Income1 135 140 (5) 159
Slide 4: Business Highlights
Business Highlights BPPR Popular Bank $ in millions, except ratios Q1 2024 Q4 2023 Change Q1 2023 $ in millions, except ratios Q1 2024 Q4 2023 Change Q1 2023 Loans Held in Portfolio $ 24,602 $ 24,478 $ 124 $ 22,773 Loans Held in Portfolio $ 10,484 $ 10,554 $ (70) $ 9,532 P.R. Government Deposits 18,
Slide 5: Financial Summary
Financial Summary (Unaudited) ($ in thousands, except EPS) Q1 2024 Q4 2023 Variance Net interest income $ 550,744 $ 534,180 $ 16,564 Provision for credit losses 72,598 78,663 (6,065) Net interest income after provision for credit losses $ 478,146 $ 455,517 $ 22,629 Service charges on deposits 37,442
Slide 6: Net Interest Margin Dynamics
Net Interest Margin Dynamics Total Loans and Deposits ($ in billions)1 Highlights: $80 • Net interest margin of 3.16%, an increase of $70 53% 52% 54% 55% 55% 8 bps; FTE net interest margin of 3.38%, an $60 $64 $63 $64 $64 $61 increase of 12 bps $50 • Money market and investment securities are $40 48
Slide 7: Deposit Mix and Historical Betas
Deposit Mix and Historical Betas • Total deposit cumulative beta of 35% at period end; total deposit beta at BPPR and PB of 30% and 59%, respectively ▪ Excluding public sector, BPPR’s cumulative beta at 7% ▪ PB cumulative betas higher due to market environment and deposit mix • High beta public sect
Slide 8: Capital
Capital Popular, Inc Highlights: 18.1 18.3 • Robust regulatory capital levels 16.3 16.4 16.4 16.5 • Common Equity Tier 1 of 16.4% increased 6 bps mainly due to earnings 8.5 8.4 6.2 6.2 for the quarter • Leverage ratio decreased 6 bps to 8.4% Common Equity Tier 1 Risk-Based Total Risk-Based Tier 1 Le
Slide 9: Non-Performing Assets
Non-Performing Assets Q1 2024 vs Q4 2023 Variances: • NPAs and NPLs decreased by $3 million each Non-Performing Assets ▪ NPL inflows increased by $8 million, driven by $900 4.00% $800 higher inflows in the U.S. mortgage and 3.50% $700 commercial portfolios, offset in part by lower $610 $570 3.00% $5
Slide 10: NCOs and Allowance for Credit Losses
NCOs and Allowance for Credit Losses Q1 2024 vs Q4 2023 Variances: NCOs and NCO-to-Loan Ratio • NCOs amounted to $62 million, increased by $5 ($ in millions) 0.71% million $62 ▪ BPPR’s NCOs: $57 million, increased by $5 million $57 ▪ Commercial NCOs higher by $3 million ▪ Consumer NCOs higher by $3
Slide 11: Allowance for Credit Losses – Q1 2024 Movement
Allowance for Credit Losses – Q1 2024 Movement ACL Movement: • Moody’s February 2024 baseline scenario ACL Movement shows a slight improvement in GDP growth ($ in millions) for 2024 with a deceleration in economic activity in 2025 • The weight assigned to the pessimistic scenario decreased this quar
Slide 12: 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 omnichannel experience ▪ Diversified fee income driven by u
Slide 13: 2024 Guidance
2024 Guidance January 2024 April 2024 Original Guidance Update Net Interest Income 9% - 13% increase for the year Unchanged Non-Interest $160 - $165 million per quarter Unchanged Income NCOs 65 - 85 bps annualized Unchanged Operating Expenses $1.89 - $1.95 billion for the year Unchanged Effective Ta
Slide 14: Footnotes
Footnotes Slide 3: (1) Refer to Non-GAAP Reconciliation on slide 17 on the Appendix (2) 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 per
Slide 15: Appendix
Investor Presentation First Quarter 2024 Appendix 15
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 top 50 BHCs in the U.S.) Holding Popular’s Banco Popular Popular Popular North Companies Insurance de Puerto Rico Securities LLC Ame
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Net Income for the Quarter Ended March 31, 2024 (Non-GAAP) (Unaudited) Income Income Tax (In thousands) Before Expense Impact on Net Income Tax (Benefit) Income U.S. GAAP Net income $ 158,851 $ 55,568 $ 103,283 Non-GAAP Adjustments: FDIC Special Assessment [1] 14,287
Slide 18: Q1 2024 vs. Q4 2023 Business Segments
Q1 2024 vs. Q4 2023 Business Segments (Unaudited) ($ in millions) BPPR Popular U.S. Financial Results Q1 2024 Q4 2023 Variance Q1 2024 Q4 2023 Variance Net interest income $ 473 $ 455 $ 18 $ 85 $ 86 $ (1) Provision for credit losses 61 67 (6) 12 12 - Net interest income after provision for credit lo
Slide 19: Investment Portfolio
Investment Portfolio Highlights: $ in millions Q1 2024 Variance to Q4 2023 • Comprised primarily of investments in Amortized % of Book Gain / Maturity / Amortized Gain / Description Cost Portfolio Value (Loss) Yield WAL1 Cost (Loss) short to intermediate U.S. Treasuries, which are tax exempt for P.R
Slide 20: 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 March 31, 2024, our direct exposure to P.R. municipalities was $363 million, up by $30 million QoQ Municipalities Outstanding P.R. government exposure ($ in milli
Slide 21: Non-Owner Occupied CRE Portfolio
Non-Owner Occupied CRE Portfolio 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 $5,035 $5,087 $5,057 $4,744 3.3% loan portfolio and 12% of C
Slide 22: Multifamily Loans Portfolio
Multifamily Loans Portfolio Highlights: Multifamily Loans • 88% of the portfolio concentrated in the U.S. region ($ in millions) • Strong credit risk profile with low delinquency levels and criticized and classified loans $2,416 $2,336 $2,332 $2,328 $2,385 • Q1 2024 NPLs increase related to a single
Slide 23: Auto Portfolio
Auto Portfolio Delinquency Highlights: ($ in millions) Avg. 2011-2019 3/31/2024 • Auto balances increased during the pandemic, but 6.17% 3.86% growth has moderated during recent quarters $4,500 6.00% • $4,000 $3,633 $3,661 $3,707 $3,566 Delinquency and NCOs gradually increased during 2023$3,500 $3,4
Slide 24: Auto Leases Portfolio
Auto Leases Portfolio Delinquency Highlights: ($ in millions) Avg. 2011-2019 3/31/2024 2.06% 1.81% • Auto lease balances have continued to increase since the pandemic • Delinquency gradually increased during 2023, but remained below pre-pandemic at Q1 2024 • NCOs remained stable compared to previous
Slide 25: Credit Cards Portfolio
Credit Cards Portfolio Delinquency Highlights: ($ in millions) Avg. 2011-2019 3/31/2024 3.74% 4.06% • Balances have been gradually increasing due to higher originations and increased usage post pandemic • Delinquency and NCOs have been gradually increasing, surpassing Q4 2019 level • FICO mix of ori
Slide 26: P.R. Personal Loans Portfolio
P.R. Personal Loans Portfolio Delinquency Highlights: ($ in millions) Avg. 2011-2019 3/31/2024 • Portfolio balances had been steadily increasing post- 3.61% 2.92% pandemic; moderately decreasing in Q1 2024 • Delinquency has increased gradually during the past quarters, but remains below pre-pandemic
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 Fitch upgrades upgrades to B1 S&P upgrades to Moody’s upgrad
Slide 28: Investor Presentation First Quarter 2024
Investor Presentation First Quarter 2024