Popular (BPOP) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 rose to $178 million, up $43 million from the prior period's adjusted results, driven by higher net interest income, improved credit quality, and strong loan growth, especially in Puerto Rico.

• Announced a 13% increase in quarterly common stock dividend to $0.70 per share effective Q1 2025 and a $500 million common stock repurchase authorization, reflecting strong capital position and confidence in future performance.

• Loan balances increased by $473 million and deposit balances by $1.7 billion, mainly driven by BPPR and higher Puerto Rico government deposits.

• Credit quality improved, with lower net charge-offs, non-performing loans, and NPL inflows.

• Total assets reached $72.8 billion at June 30, 2024, up from $70.8 billion at year-end 2023.

Financial highlights

• Net interest income increased to $568.3 million in Q2 2024, up $18 million sequentially and $36.6 million year-over-year; net interest margin rose to 3.22%.

• Non-interest income was $166.3 million, up $2.5 million sequentially, mainly from higher card and service fees.

• Operating expenses (excluding special items) increased by $7 million sequentially, driven by professional fees and transaction costs; total operating expenses were $469.6 million.

• Tangible book value per share rose by $2.65 to $62.71 at June 30, 2024.

• Diluted EPS for Q2 2024 was $2.47, up from $1.43 in Q1 2024 and $2.10 in Q2 2023.

Outlook and guidance

• Net interest income growth guidance revised to 8%-10% for 2024 (GAAP basis); loan growth expected at the low end of the original 3%-6% range.

• Non-interest income expected to remain at $160-$165 million per quarter.

• Total 2024 expenses projected at $1.89-$1.95 billion; effective tax rate for 2024 expected in the 21%-23% range.

• Net charge-offs anticipated near the low end of the 65-85 basis points full-year guidance.

• Continued investment in talent and technology to drive transformation and long-term returns.