Popular (BPOP) Q4 2024 earnings summary

Executive summary

• Net income for 2024 was $614 million, with adjusted net income of $646 million, a 10% year-over-year increase, driven by higher net interest income and strong loan growth, partially offset by higher credit loss provisions and operating expenses.

• Fourth quarter net income reached $178 million, up $23 million sequentially, with stable credit quality and robust loan growth across both banks.

• Tangible book value per share increased 14% year-over-year to $68.16, despite a sequential decrease due to unrealized investment losses and share repurchases.

• Share repurchases resumed with $217 million to $220 million bought back by year-end, and quarterly dividend increased from $0.62 to $0.70 per share.

• Loans held in portfolio grew $2 billion or 5.8% for the year, mainly from commercial lending.

Financial highlights

• Net interest income grew 7% year-over-year, with a quarterly increase of $18 million, driven by lower deposit costs and higher loan balances.

• Net interest margin expanded by 11 basis points to 3.35% in Q4, mainly due to lower deposit costs.

• Loan balances grew by $913 million (2.5%) in Q4 and $2 billion (5.8%) for the year, led by commercial, auto, and mortgage segments.

• Non-performing loans and net charge-offs remained below historical levels; NPL ratio decreased to 0.95%, and NCO ratio was 0.68% for the year.

• Total assets at year-end were $73.0 billion, with deposits at $64.9 billion.

Outlook and guidance

• 2025 net interest income projected to increase by 7%-9%, supported by reinvestment of lower-yielding securities and loan originations.

• Loan growth guidance of 3%-5% for 2025, with growth rate improving as the year progresses.

• Operating expenses expected to rise by approximately 4% on a GAAP basis in 2025.

• Non-interest income projected at $155–$160 million per quarter, lower due to car rental business sale.

• Effective tax rate guidance for 2025 is 19%-21%.