Slide 1: Investor Presentation Second Quarter 2024
Investor Presentation Second 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: Q2 2024 Highlights
Q2 2024 Highlights Financial Highlights Quarter Highlights ($ in millions, except per share information) Income Statement Q2 2024 Q1 2024 Change Q2 2023 Highlights: Net Income $ 178 $ 103 $ 75 $ 151 • Net income of $178 million, an increase of $43 million compared to Adjusted Net Income1 178 135 43
Slide 4: Business Highlights
Business Highlights BPPR Popular U.S. ($ in millions) Q2 2024 Q1 2024 Change Q2 2023 ($ in millions) Q2 2024 Q1 2024 Change Q2 2023 Loans Held in Portfolio $ 25,111 $ 24,602 $ 509 $ 23,087 Loans Held in Portfolio $ 10,448 $ 10,484 $ (36) $ 9,911 P.R. Government Deposits 19,722 18,020 1,702 18,464 To
Slide 5: Financial Summary
Financial Summary Unaudited ($ in thousands, except EPS) Q2 2024 Q1 2024 Variance Net interest income $ 568,312 $ 550,744 $ 17,568 Provision for credit losses 46,794 72,598 (25,804) Net interest income after provision for credit losses $ 521,518 $ 478,146 $ 43,372 Service charges on deposits 37,526
Slide 6: Net Interest Margin Dynamics
Net Interest Margin Dynamics Total Loans and Deposits ($ in billions)1 Highlights: 52% 54% 55% 55% 54% • Net interest margin up 6 bps to 3.22% $80 • FTE2 net interest margin of 3.48%, an increase of 10 $70 bps $60 $64 $64 $66 $63 $64 $50 • Money market and investment securities represent 49% of earn
Slide 7: Capital
Capital Highlights: Popular, Inc • On July 24, 2024, we announced the following 18.19 18.30 capital actions: 16.36 16.48 16.42 16.54 • common stock repurchase authorization of $500 million; and • an increase in the Corporation’s quarterly 8.45 8.53 common stock dividend from $0.62 per share 6.19 6.3
Slide 8: Non-Performing Assets
Non-Performing Assets Q2 2024 vs Q1 2024 • NPAs and NPLs decreased $23 million and $12 million, ($ in millions) respectively: • NPL inflows decreased $2 million • BPPR NPLs at $287 million, or 1.1% of loans, down $12 million • Popular U.S. NPLs at $55 million, or 0.5% of loans, flat from the prior q
Slide 9: NCOs and Allowance for Credit Losses
NCOs and Allowance for Credit Losses Q2 2024 vs Q1 2024 • NCO ratio down 10 bps at 0.61% • NCOs down $9 million to $54 million • BPPR NCOs down $7 million to $49 million: • Consumer down $5 million • Commercial down $2 million • Popular U.S. NCOs down $1 million to $4 million • ACL at $730 million,
Slide 10: Allowance for Credit Losses – Q2 2024 Movement
Allowance for Credit Losses – Q2 2024 Movement ACL Movement: ACL Movement • Moody's updated the formulas for certain P.R. ($ in millions) economic variables, resulting in: • Unemployment forecast now more optimistic driven by recent performance • GDP forecast more conservative in the short term but
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 • Focus on customer service supported by broad branch network • Differentiated omnichannel experience • Diversified fee income Franchise • S
Slide 12: 2024 Guidance
2024 Guidance January 2024 Original Guidance July 2024 Update Net Interest Income 9%-13% increase for the year 8%-10% increase for the year Non-Interest Income $160-$165 million per quarter Unchanged NCOs 65-85 bps annualized Lower end of the 65-85 bps range Operating Expenses $1.89- $1.95 billion f
Slide 13: Footnotes
Footnotes Slide 3: (1) Refer to Non-GAAP Reconciliation in slide 16 on the Appendix section (2) FTE stands for fully taxable-equivalent basis; 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. Se
Slide 14: Appendix
Investor Presentation Second Quarter 2024 Appendix 14
Slide 15: Corporate Structure
Corporate Structure Franchise Summary Corporate Structure Industry Financial Services Headquarters San Juan, Puerto Rico Assets = $73 billion Assets $73 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 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation The following table presents the reconciliation of the net income to the Adjusted net income (Non-GAAP) for the quarter ended March 31, 2024. There were no adjustments to net income for the quarter ended June 30, 2024. 16
Slide 17: Q2 2024 vs. Q1 2024 Business Segments
Q2 2024 vs. Q1 2024 Business Segments Differences due to rounding 17
Slide 18: Deposit Mix and Historical Betas
Deposit Mix and Historical Betas • Total deposit cumulative beta of 39% at period end; total deposit beta at BPPR and PB of 35% and 57%, 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 19: Investment Portfolio
Investment Portfolio Highlights: $ in Millions Q2 2024 Variance to Q1 2024 • Conservative investment portfolio, with the Amortize % of Book Gain / 1 Maturity / Amortized Gain / majority invested in short to intermediate U.S. Description d Cost Portfolio Value (Loss) Yield WAL Cost (Loss) Treasuries,
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 June 30, 2024, our direct exposure to P.R. municipalities was $376 million, up by $13 million QoQ Municipalities Outstanding P.R. government exposure ($ in milli
Slide 21: Non-Owner Occupied CRE Portfolio
Non-Owner Occupied CRE Portfolio Highlights: Non-Owner Occupied CRE ($ in millions) • Non-Owner Occupied CRE (CRE NOO) mainly in retail, hotels and office space $5,035 $5,087 $5,057 $5,004 $4,744 • Office exposure limited to 1.8% of total loan portfolio $2,086 $2,082 $2,061 $2,025 and 13% of CRE NOO
Slide 22: Multifamily Loans Portfolio
Multifamily Loans Portfolio Highlights: Multifamily Loans • 87% of the portfolio concentrated in Popular U.S. ($ in millions) 4.0 • Strong credit risk profile with low levels of delinquency, $2,416 $2,385 $2,384 3.5 criticized and classified loans: $2,332 $2,328 • 30-89 DPD/Loans at 0.13% $2,124 $2,
Slide 23: Auto Portfolio
Auto Portfolio Delinquency Highlights: ($ in millions) Avg. 2011-2019 6/30/2024 • Auto balances increased during the pandemic; growth has 6.17% 4.46% moderated during recent quarters • Delinquency and NCOs gradually increased during 2023 but remain below pre-pandemic • Improvements have been observe
Slide 24: Auto Leases Portfolio
Auto Leases Portfolio Delinquency Avg. 2011-2019 6/30/2024 Highlights: ($ in millions) 2.06% 1.79% • Auto lease balances have continued to increase since the pandemic • Delinquency gradually increased during 2023, but improvements have been observed since Q4 2023 • NCOs decreased when compared to th
Slide 25: Credit Cards Portfolio
Credit Cards Portfolio Delinquency Highlights: Avg. 2011-2019 6/30/2024 ($ in millions) 3.74% 4.16% • Improvements in credit quality of originations • Balances have been gradually increasing due to higher originations and increased usage post pandemic • Delinquency and NCOs have been gradually incre
Slide 26: P.R. Personal Loans Portfolio
P.R. Personal Loans Portfolio Delinquency Highlights: ($ in millions) Avg. 2011-2019 6/30/2024 3.61% 3.09% • Improvements in credit quality of originations • Portfolio balances showed a slight decrease QoQ • Delinquency trends show gradual increase, but remain below pre-pandemic performance • NCO ra
Slide 27: 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 28: Investor Presentation Second Quarter 2024
Investor Presentation Second Quarter 2024