Slide 1: Investor Presentation First Quarter 2023
INVESTOR PRESENTATION First 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. These statements are not guarantees of future performance, are based on the current expectations of Popular, I
Slide 3: Q1 2023 Highlights
Q1 2023 Highlights Financial Highlights Quarter Highlights $ in millions, except ratios and EPS Income Statement Q1 2023 Q4 2022 Change Q1 2022 Issuance of Senior Notes: Net Income $ 159 $ 257 $ (98) $ 212 • On March 13, 2023, issued $400 million aggregate Adjusted Net Income 159 189 1 (30) 212 prin
Slide 4: Business Highlights
Business Highlights BPPR Business Metrics $ in millions, except ratios Q1 2023 Q4 2022 Change Q1 2022 BPPR: Total Loans $ 22,773 $ 22,513 $ 260 $ 20,977 • Loans increased across all business segments P.R. Government Deposits 1 15,455 15,833 (378) 15,945 Total Deposits 52,456 53,178 (722) 55,129 • De
Slide 5: Financial Summary
Financial Summary (Unaudited) ($ in thousands) Q1 2023 Q4 2022 Variance Net interest income $ 531,656 $ 559,566 $ (27,910) Service charges on deposits 34,678 34,682 (4) Other service fees 90,076 89,022 1,054 Mortgage banking activities 7,400 6,562 838 Other non-interest income 29,807 28,199 1,608 Gr
Slide 6: Net Interest Margin Dynamics
Net Interest Margin Dynamics Total Loans and Deposits ($ in billions)² • Net interest margin of 3.22%; FTE net interest margin1 of 3.46%, a decrease of 18 basis points • Money market and investment securities are 50% of earning assets • FTE loan yield increased 27 basis points QoQ to 6.97% • Total d
Slide 7: Deposit Mix and Historical Betas
Deposit Mix and Historical Betas • Total deposit cumulative beta of 24% at period end; BPPR total deposit beta of 22% and PB of 38% • High beta public sector deposits now account for 25% of total deposits. P.R. public sector deposit betas are 100% with a quarter lag; expect costs to increase while s
Slide 8: Liquidity Sources
Liquidity Sources • No material incremental use of our available liquidity sources in Q1 2023 • Available liquidity increased to $18.3 billion from $17.0 billion in Q4 2022 • On March 13, 2023, issued $400 million aggregate principal amount of 7.25% Senior Notes due 2028. The net proceeds will be us
Slide 9: Deposit Composition
Deposit Composition • On March 31, 2023, deposits with balances in excess of $250,000, excluding foreign deposits, intercompany deposits and collateralized public funds, were $11.4 billion or 22% at BPPR and $2.4 billion or 25% at Popular U.S. compared to available liquidity sources of $15.8 billion
Slide 10: Investment Portfolio
Investment Portfolio • Conservative investment portfolio, with $ in Millions Q1 2023 Variance to Q4 2022 the majority invested in short to Amortized % of Book Gain / Maturity / Amortized Gain / intermediate U.S. Treasuries, which are Description Cost Portfolio Value (Loss) WAL 1 Cost (Loss) tax exem
Slide 11: Capital
Capital • Robust regulatory capital levels • Common Equity Tier 1 of 16.7% • Leverage ratio of 8.5% impacted by the high proportion of zero-risk weighted assets on the balance sheet, which represented 39% of total assets • TCE ratio1 at 5.4% compared to 4.8% in Q4 2022; BPPR at 3.6% compared to 3.0%
Slide 12: Non-Performing Assets
Non – Performing Assets Q1 2023 vs Q4 2022 variances: Non-Performing Assets • NPAs and NPLs decreased by $24 million and $27 million, respectively ▪ NPL inflows increased by $7 million ▪ P.R. NPLs at $379 million, or 1.7% of loans, down by $23 million, mainly driven by lower mortgage and consumer NP
Slide 13: NCOs and Allowance for Credit Losses
NCOs and Allowance for Credit Losses Q1 2023 vs Q4 2022 variances: NCOs and NCO-to-Loan Ratio • NCOs amounted to $33 million, increasing by $2 ($ in millions) million 0.41% ▪ BPPR’s NCOs at $31 million, increasing by $12 $33 million mainly due to an $10 million line of 0.29% $31 credit charge-off $2
Slide 14: Allowance for Credit Losses – Q1 2023 Movement
Allowance for Credit Losses – Q1 2023 Movement ACL Movement: ACL Movement • Moody’s February 2023 vintage reflects a ($ in millions) slight improvement in the economy with higher 2023 GDP growth for both P.R. and U.S. • $10 million in charge-offs recorded for a previously reserved loan • Increases r
Slide 15: Driving Value
Driving Value • Market leader in Puerto Rico ▪ Substantial liquidity with diversified deposit base ▪ Well-positioned to take advantage of ongoing economic recovery ▪ Focus on customer service supported by broad branch network ▪ Differentiated digital offering ▪ Diversified fee income driven by unmat
Slide 16: Appendix
INVESTOR PRESENTATION First Quarter 2023 Appendix
Slide 17: Corporate Structure
Corporate Structure Franchise Summary Corporate Structure Industry Financial services Headquarters San Juan, Puerto Rico Assets = $68 billion Assets $68 billion (among Holding Popular’s Banco Popular Popular Popular North top 50 BHCs in the de Puerto Rico Securities LLC Insurance America, Inc. Compa
Slide 18: Q1 2023 vs. Q4 2022 Business Segments
Q1 2023 vs. Q4 2022 Business Segments (Unaudited) BPPR Popular U.S. ($ in millions) Financial Results Q1 2023 Q4 2022 Variance Q1 2023 Q4 2022 Variance Net interest income $ 450 $ 472 $ (22) $ 90 $ 94 $ (4) Non-interest income 147 137 10 6 6 - Gross revenues 597 609 (12) 96 100 (4) Provision for cre
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 March 31, 2023, our direct exposure to P.R. municipalities was $324 million, down by $3 million QoQ Municipalities Outstanding P.R. government exposure ($ in mil
Slide 20: FICO Mix of Consumer Originations
FICO Mix of Consumer Originations Auto Loans PR Mortgage Originations (Non-Conforming) FICO Mix of Originations (% of Approved Amount) By Year and Original FICO (% of Mortgage Amount) 715 719 719 723 720 721 729 732 732 736 735 753 736 734 741 759 751 742 100% 4% 3% 4% 6% 7% 6% 5% 7% 7% 700 1% 2% 70
Slide 21: 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 22: Investor Presentation First Quarter 2023
INVESTOR PRESENTATION First Quarter 2023