Popular Inc ((BPOP)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Popular Inc’s recent earnings call painted a generally positive picture, highlighting significant net income growth, stable credit quality, and strong loan growth. Despite these strengths, the company acknowledged challenges such as potential deposit outflows, increased credit loss provisions, and a decrease in tangible book value per share.
Annual Net Income Growth
Popular Inc reported an impressive annual net income growth, reaching $614 million in 2024, up from $541 million in 2023. The adjusted net income was even higher at $646 million, reflecting a 10% increase from the previous year.
Strong Loan Growth
The company experienced robust loan growth, with total loans increasing by $2 billion, a 5.8% rise. In the fourth quarter alone, loan growth was $913 million, or 2.5%, highlighting a strong performance in their lending activities.
Stable Credit Quality
Credit quality remained steady throughout the year, with a slight decrease in non-performing loans and net charge-offs staying below historic levels, underscoring the company’s effective risk management strategies.
Shareholder Returns
Popular Inc announced a $500 million stock repurchase authorization, successfully repurchasing 2.3 million shares for $220 million in 2024. Additionally, the quarterly common stock dividend was increased by $0.08 to $0.70 per share, reflecting the company’s commitment to returning value to shareholders.
Tourism and Economic Strength in Puerto Rico
The economic environment in Puerto Rico showed positive signs, with passenger traffic at San Juan International Airport increasing by 10% in the fourth quarter. A record 13.2 million travelers visited the island in 2024, indicating robust economic activity.
Provision for Credit Losses
Higher provisions for credit losses were a concern, offsetting net interest income. However, the provision slightly decreased in the fourth quarter, which is a positive sign for the company’s future financial health.
Decreased Tangible Book Value Per Share
The tangible book value per share declined by $0.88 to $68.16 in the fourth quarter. This decrease was largely attributed to higher unrealized losses in the investment portfolio and share repurchase activities.
Potential Deposit Outflows
The company expressed concerns about potential deposit outflows estimated between $600 million to $800 million, which reflects ongoing pressures on deposit costs.
Forward-Looking Guidance
Popular Inc’s forward-looking guidance remains optimistic, bolstered by its strong financial performance in 2024. The company anticipates continued growth in net interest income, supported by strong loan growth and reduced deposit costs. While credit loss provisions have been challenging, a slight decrease in the fourth quarter suggests a positive trend.
In conclusion, Popular Inc’s earnings call conveyed a positive sentiment, driven by substantial net income growth, stable credit quality, and noteworthy loan growth. Despite facing challenges such as credit loss provisions and potential deposit outflows, the company remains confident in its forward-looking guidance, highlighting its resilience and strategic focus on shareholder returns.
