In This Article:
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Net Income: $155 million, a decrease of $23 million from the second quarter.
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Net Interest Income: Increased by $4 million compared to the second quarter.
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Loan Growth: Increased by $603 million, nearly 2% growth.
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Net Interest Margin: Expanded by 2 basis points to 3.24%.
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Operating Expenses: Decreased by $2 million to $467 million.
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Share Repurchase: 600,000 shares repurchased for approximately $59 million.
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Tangible Book Value Per Share: Increased by 10% to $69.04.
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Credit and Debit Card Sales: Increased by approximately 4% compared to the third quarter of 2023.
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Auto Loan and Lease Balances: Increased by $105 million compared to the second quarter.
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Mortgage Loan Balances: Increased by $104 million in the third quarter.
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Provision for Credit Losses: $71 million, $25 million higher than the second quarter.
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Effective Tax Rate: 22%, compared to 19% in the prior quarter.
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Return on Tangible Common Equity (ROTCE): 10%, down from 11.8% last quarter.
Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Popular Inc (NASDAQ:BPOP) achieved a net income of $155 million in the third quarter, despite a decrease from the previous quarter.
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Net interest income increased by $4 million compared to the second quarter, driven by higher average loan balances and loan repricing.
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The company experienced strong loan growth, with balances increasing by $603 million, particularly in the commercial segment.
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Operating expenses decreased by $2 million to $467 million, indicating effective cost management.
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Tangible book value per share increased by 10% to $69.04, driven by lower unrealized losses in the investment portfolio.
Negative Points
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Net income decreased by $23 million from the second quarter, primarily due to a higher provision for credit losses.
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Deposit levels at BPPR reduced by $1.8 billion, impacting the balance and mix of earning assets.
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Non-interest income decreased by $2 million from Q2, driven by lower income from mortgage banking activities.
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The provision for credit losses increased by $25 million compared to the second quarter, reflecting higher balances and losses.
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The company revised its ROTCE target to at least 12% by the fourth quarter of 2025, down from the previous target of 14%.
Q & A Highlights
Q: Can you elaborate on the deposit trends, particularly on the retail side, and what factors influenced these movements? A: Jorge Garcia, CFO, explained that over the past several quarters, there has been a consistent trend of high net worth and corporate clients seeking yield enhancement, moving funds into higher-yielding assets. This quarter saw an acceleration of this trend, coupled with increased spending across the retail network. Despite these outflows, average retail deposit balances remain about 30% higher than pre-pandemic levels. Garcia noted that while it's challenging to predict future movements, there might still be a risk of $600 million to $800 million in deposit outflows.