Popular (BPOP) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $178 million, nearly flat sequentially and up significantly year-over-year, with EPS of $2.56, driven by higher net interest income, lower provision for credit losses, and reduced operating expenses, partially offset by lower non-interest income.

• Net interest income rose $15 million sequentially to $605.6 million, with net interest margin expanding to 3.40% and NIM FTE up to 3.73%.

• Deposits increased by $935 million to $65.8 billion, while loan balances rose by $146 million to $37.3 billion.

• Credit quality improved: NPLs down $37 million to $314 million, NPL ratio at 0.84%, and net charge-offs annualized at 0.53%.

• CEO transition announced, with Javier Ferrer succeeding Ignacio Alvarez effective June 30, 2025.

Financial highlights

• Tangible book value per share increased $3.86 to $72.02, driven by net income and lower unrealized losses.

• Non-interest income was $152 million, down $13 million from Q4, mainly due to lower car rental revenue, investment income, and mortgage banking activities.

• Operating expenses were $471 million, up $3.4 million sequentially, mainly due to higher personnel, technology, and processing costs.

• Effective tax rate was 20%, flat with Q4; income tax expense was $45.1 million.

• Return on average assets was 0.96%; return on average common equity was 10.07%.

Outlook and guidance

• Full-year 2025 expenses expected to rise by about 4% over 2024; net interest income projected to increase by 7%-9%.

• Loan growth guidance for 2025 maintained at 3%-5%, with the lower end more likely; non-interest income expected at $155-$160 million per quarter.

• Effective tax rate guidance at 19%-21%; NCOs expected at 70–90 bps annualized.

• Management highlights strong capital and liquidity to navigate macroeconomic uncertainty.

• Deposit growth and ongoing investments in technology and transformation initiatives are expected to support future performance.