Popular(BPOP) - 2025 Q1 - Quarterly Report

Financial Performance - The Corporation's net income for Q1 2025 was $177.5 million, an increase of$74.2 million from $103.3 million in Q1 2024[305]. - Adjusted net income for the quarter ended March 31, 2024, was$135.2 million, reflecting a significant increase from U.S. GAAP net income of $103.3 million[314]. - For the quarter ended March 31, 2025, total income increased to$208,019,000, up 24% from $168,078,000 in the same quarter of 2024[427]. - Net income for the quarter ended March 31, 2025, was$194,098,000, representing a 52% increase compared to $127,864,000 in the prior year[427]. Interest Income and Margin - Net interest income reached$605.6 million, up $54.9 million compared to Q1 2024, with a net interest margin expansion of 24 basis points to 3.40$605.6 million, an increase of $54.9 million compared to$550.7 million in the same quarter of 2024[323]. - Net interest margin for the first quarter of 2025 was 3.40%, an increase of 24 basis points from the previous year[323]. - Net interest income on a taxable equivalent basis for Q1 2025 was $663.9 million, up by$74.3 million from the same period in 2024[323]. Credit Quality and Losses - The provision for credit losses decreased to $64.1 million, down$8.5 million from Q1 2024, reflecting improved credit quality[307]. - For the quarter ended March 31, 2025, the Corporation recorded a provision for credit losses of $63.9 million, a decrease of$8.2 million compared to the same quarter of the previous year[331]. - The provision for loan losses was $52.7 million in 2025, down from$61.0 million in the same quarter of 2024, reflecting a favorable variance of $8.3 million[346]. - The allowance for credit losses (ACL) increased by$16.1 million to $762.1 million from December 31, 2024, driven by changes in economic scenario probability weights and qualitative reserves[478]. Operating Expenses - Operating expenses totaled$471.0 million, a decrease of $12.1 million compared to Q1 2024, driven by lower FDIC special assessments[307]. - Total operating expenses decreased by$12.1 million to $471.0 million for the quarter ended March 31, 2025, compared to$483.1 million in the same quarter of 2024[338]. - Technology and software expenses rose by $4.2 million due to higher software amortization related to transformation initiatives[337]. Assets and Liabilities - Total assets increased to$74.0 billion as of March 31, 2025, up $993.2 million from December 31, 2024, mainly due to higher AFS securities and loans[307]. - Total liabilities increased to$68.2 billion at March 31, 2025, an increase of $806.6 million compared to December 31, 2024[357]. - Loans held-in-portfolio increased by$146.4 million to $37.3 billion at March 31, 2025, compared to December 31, 2024[353]. Deposits and Equity - Deposits rose to$65.8 billion, an increase of $934.9 million from December 31, 2024, attributed to higher interest-bearing deposits[308]. - Stockholders' equity increased to$5.8 billion, up $186.6 million from December 31, 2024, with a tangible book value per share of$72.02[307]. - Average deposit balances grew by $1.6 billion, with Puerto Rico public deposits at$19.6 billion, up approximately $159.2 million from the previous quarter[358]. Non-Performing Assets - Non-Performing Assets (NPAs) decreased by$41.9 million from December 31, 2024, with Non-Performing Loans (NPLs) decreasing by $36.7 million[455]. - The ratio of NPLs to total loans held-in-portfolio improved to 0.84$314,069 thousand, with an ACL to NPLs ratio of 242.67% as of March 31, 2025, up from 212.68% at the end of 2024[482]. Dividends and Share Repurchase - The Corporation repurchased 1,270,569 shares for $122.3 million at an average price of$96.24 per share during Q1 2025[301]. - Dividends declared per share increased to $0.70, reflecting a 13$0.70 per share, totaling approximately $48 million[411]. Market and Economic Conditions - The U.S. Consumer Price Index showed a year-over-year increase of 2.4% as of March 2025, while Puerto Rico's Consumer Price Index increased by 1.8% over the 12 months ending in January 2025[435]. - The Corporation's financial flexibility may be adversely affected if the banking subsidiaries cannot maintain access to funding or if adequate funding is not available[400].