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Popular, Inc.'s BPOP third-quarter 2024 adjusted earnings per share of $2.16 missed the Zacks Consensus Estimate of $2.33. However, the bottom line increased 13.7% from the year-ago quarter.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
The results were primarily affected by higher provisions and deteriorating capital position. Nonetheless, a rise in net interest income (NII), fee income and lower expenses were tailwinds.
Popular’s Revenues Rise & Expenses Decline Y/Y
Total quarterly revenues were $736.6 million, which missed the Zacks Consensus Estimate of $748.9 million. Nonetheless, the top line rose 6.2% from the year-ago quarter.
Quarterly NII was $572.5 million, up 7.2% year over year. However, the net interest margin shrunk 17 basis points to 3.24%.
Non-interest income increased 2.8% year over year to $164.1 million. The rise was primarily due to an increase in service charges on deposit accounts, other service fees, net gain on trading account debt securities and adjustments to indemnity reserves on loans sold.
Total operating expenses declined marginally year over year to $467.3 million.
BPOP’s Loans & Deposit Balances Rise Sequentially
As of Sept. 30, 2024, total loans held-in-portfolio increased 1.7% on a sequential basis to $36.2 billion. Total deposits were $63.7 billion, which increased 2.8% from the previous quarter.
Popular’s Credit Quality: Mixed Bag
In the third quarter of 2024, Popular recorded a provision for credit losses of $71.4 million, up 58.4% from the prior-year quarter.
As of Sept. 30, 2024, non-performing assets were $424.4 million, which declined 4.4% year over year. The non-performing assets to total assets ratio was 0.60% compared with 0.64% as of Sept. 30, 2023.
BPOP’s Capital Ratios Decline Y/Y
As of Sept. 30, 2024, the Common Equity Tier 1 capital ratio and the Tier 1 capital ratio were 16.42% and 16.48%, respectively, compared with 16.81% and 16.87% in the year-ago quarter.
Popular’s Share Repurchase Update
In the reported quarter, the company repurchased 599,096 shares for $58.8 million.
Our View on BPOP
Popular is well-poised to benefit from its business transformation efforts, along with significant progress in modernizing customer channels. A rise in loan and deposit balances will support its financials in the long term. However, rising provisions amid a challenging macroeconomic backdrop remain a major concern.
Popular, Inc. Price, Consensus and EPS Surprise
Popular, Inc. price-consensus-eps-surprise-chart | Popular, Inc. Quote