Executive Summary

Q4 2024 delivered EPS of $2.51, net income of $177.8M, and net interest income of $590.8M, with GAAP net interest margin expanding 11 bps to 3.35% and FTE NIM +15 bps to 3.62% .
Balance sheet growth was solid: loans +$912.7M QoQ to $37.1B and deposits +$1.2B QoQ to $64.9B; credit quality stayed stable with NPL ratio down to 0.95% and ACL/NPL coverage up to 213% .
2025 guidance: NII +7–9% YoY, non-interest income $155–$160M per quarter (post rental divestiture), ETR 19–21%, operating expenses +4%, loan growth +3–5% with growth accelerating in 2H25, NCOs 70–90 bps; management expects continued NIM expansion as deposit costs decline and securities reinvest at ~4% yields .
Capital actions continue: CET1 16.03%, TBV/share $68.16 (−$0.88 QoQ), and ~$159M buybacks in Q4 at ~$96/share; management views the stock as attractive and may be opportunistic with repurchases depending on price .
Stock-relevant catalysts: ongoing NIM expansion from lower deposit costs, strong loan growth in both banks, and 2025 NII guidance; watch consumer credit normalization and deposit outflow risk ($600–$800M identified in Q3, partly mitigated by new deposit products) .

What Went Well and What Went Wrong

What Went Well

“Our financial results for the fourth quarter were solid… We achieved strong loan growth and continued to increase our net interest income and net interest margin” — CEO Ignacio Alvarez; NII +$18.3M QoQ; GAAP NIM +11 bps; FTE NIM +15 bps .
Deposit costs fell: total deposit cost to 1.96% (−20 bps QoQ), BPPR cost of interest-bearing deposits −29 bps to 2.26% and total BPPR deposit cost −22 bps to 1.67%, aiding margin expansion .
Loans and deposits both grew: loans +$912.7M QoQ (commercial +$578.5M, construction +$150.5M, mortgage +$120.8M), deposits +$1.215B QoQ; NPL ratio improved to 0.95%, ACL/NPL coverage rose to 212.68% .

What Went Wrong

Consumer credit normalization continued: quarterly NCOs rose to $67.4M with NCO ratio 0.74% (0.65% in Q3); BPPR consumer charge-offs increased +$5.7M QoQ; auto and credit card portfolios showed higher delinquencies/NCOs .
Tangible book value per share decreased $0.88 QoQ to $68.16, driven by higher AOCI losses on AFS securities (net unrealized losses +$197.7M), Q4 buybacks, and dividends .
Deposit outflow risk (identified $600–$800M in Q3) remains a key watch item despite Q4 inflows and mitigation efforts (launch of low-cost transactional product shifting ~$660M from zero-cost demand deposits) .

Financial Results

Core metrics vs prior periods and consensus

Metric	Q4 2023	Q3 2024	Q4 2024	Consensus (S&P Global)
Net Interest Income ($M)	$534.2	$572.5	$590.8	N/A – unavailable via S&P Global
Total Non-Interest Income ($M)	$168.7	$164.1	$164.7	N/A – unavailable via S&P Global
Diluted EPS ($)	$1.31	$2.16	$2.51	N/A – unavailable via S&P Global
Net Interest Margin (GAAP, %)	3.08%	3.24%	3.35%	N/A – unavailable via S&P Global
Net Interest Margin (FTE, %)	3.26%	3.47%	3.62%	N/A – unavailable via S&P Global
NCO Ratio (annualized, %)	0.66%	0.65%	0.74%	N/A – unavailable via S&P Global

Note: Wall Street consensus estimates were unavailable due to an S&P Global access error; please see Estimates Context section.

Segment performance (Q4 2024 vs Q3 2024)

Segment Metric	Q3 2024	Q4 2024
BPPR Net Interest Income ($M)	488	506.9
BPPR Net Interest Margin (%)	3.41	3.56
BPPR Total Deposits ($B)	52.7	54.1
BPPR Loans HIP ($B)	25.7	26.1
PB Net Interest Income ($M)	93	92.2
PB Net Interest Margin (%)	2.73	2.71
PB Total Deposits ($B)	11.9	11.7
PB Loans HIP ($B)	10.5	10.9

KPIs and credit metrics

KPI	Q4 2023	Q3 2024	Q4 2024
Loans HIP ($B)	35.1	36.2	37.1
Deposits ($B)	63.6	63.7	64.9
NPLs HIP ($M)	357.6	361.4	350.8
NPL Ratio (%)	1.02	1.00	0.95
ACL / Loans (%)	2.08	2.06	2.01
ACL / NPLs (%)	203.95	205.96	212.68

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Income Growth	FY2025	Not provided	+7% to +9% YoY	New
Non-Interest Income (per quarter)	FY2025	Not provided	$155M–$160M each quarter (post car rental sale)	New
Net Charge-Offs (annualized)	FY2025	65–85 bps (FY2024 actual 68 bps)	70–90 bps	Raised range vs FY2024 actual
Operating Expenses	FY2025	Not provided	+4% YoY	New
Effective Tax Rate	FY2025	Not provided	19%–21%	New
Loan Growth	FY2025	Not provided	+3%–5%, accelerating in 2H25	New
NIM Direction	FY2025	Not provided	Expected to expand; key risk is deposit mix/betas	New commentary
Dividends/Buybacks	Ongoing	$0.70/qtr, $500M buyback auth.	Continuation, opportunistic execution	Maintained program

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Deposit costs & betas	Q2: PR gov’t deposit cost up, time deposits repriced; Q3: total deposit cost up to 2.16%	Total deposit cost down to 1.96%; BPPR cost of interest-bearing deposits −29 bps; total BPPR deposit cost 1.67%	Improving
NIM trajectory	Q2/Q3: NIM expanded to 3.22%/3.24%; FTE NIM 3.48%/3.47%	NIM 3.35%; FTE NIM 3.62%; management expects further expansion in 2025	Positive
Securities reinvestment	Q2: reinvest at higher UST yields; Q3: maturities reinvestment slowed	~$600M purchased (2–3yr UST) at ~4% to lessen rate sensitivity; reinvestment continues	Ongoing, supportive
Puerto Rico macro	Q2/Q3: strong PR activity, public funds flows	Record tourism; unemployment ~5.4%; federal recovery funds ~$45–$47B obligated (FEMA/HUD)	Supportive
Consumer credit normalization	Q2/Q3: rising auto/card delinquencies and NCOs	NCO ratio 0.74%; recent vintages improving; expect slightly higher 1H then lower 2H	Nearing peak; moderating later
Deposit outflows risk	Q3: identified $600–$800M at-risk	Risk incorporated in outlook; mitigation via new product; some Q4 mix shift (~$660M)	Managed, still a watch item
Capital & buybacks	Q2/Q3: $500M buyback auth; dividend lifted	~$160M bought in Q4; opportunistic based on price; CET1 16.03%	Continuing

Management Commentary

“We achieved strong loan growth and continued to increase our net interest income and net interest margin… We closed the year on a strong footing” — CEO Ignacio Alvarez (press release) .
CFO Jorge García: “Net interest income increased by $18 million… driven primarily by lower deposit costs… we expect consolidated loan growth of 3% to 5%… 2025 NII will increase by 7% to 9%” .
CRO Lidio Soriano: “Credit quality metrics remained stable… consumer portfolios reflected increased delinquencies and net charge-offs… we are encouraged about the outlook given the performance of the most recent vintages” .
Capital and returns: “Return on tangible equity for the quarter was 11.2%… we continue to anticipate we will achieve at least 12% ROTCE in Q4 2025… longer term… sustainable 14% ROTCE” .

Q&A Highlights

Funding costs and deposit outflows: management launched a mass affluent product shifting ~$660M from zero-cost demand deposits; still assumes some outflows in guidance but working to retain balances .
Margin outlook: no NIM guidance given, but expects continued expansion from lower PR public deposit costs and reinvesting ~$1B/month maturities at higher rates; deposit mix/betas are key risk .
Consumer credit cards: charge-offs rising, but Puerto Rico cycle lagging mainland; view current phase as late stage, with recent vintages performing better .
Buyback cadence: opportunistic based on price; repurchased ~1.7M shares in Q4, and views shares attractive .
Capital levels: expect gradual CET1 normalization over time; higher buffer needed vs peers but not 400–500 bps .
PR infrastructure funds: ~$45–$47B FEMA/HUD recovery funds obligated, with long-duration electric grid projects (7–10 years) and housing programs .

Estimates Context

Wall Street consensus (S&P Global) for quarterly EPS, revenue, and target price was unavailable due to a data access error during retrieval. As a result, estimate comparisons are not shown. If desired, we can refresh and incorporate consensus when access is restored.

Key Takeaways for Investors

NIM expansion remains the central driver: deposit costs fell (total to 1.96%; BPPR to 1.67%), and reinvestments at ~4% support 2025 margin; this underpins the +7–9% NII guidance .
Loan growth broad-based (commercial, construction, mortgage), with both banks contributing; management guides +3–5% for 2025 with acceleration in 2H25 .
Consumer credit normalization is the main risk: NCO ratio rose to 0.74%, with auto and cards driving increases; recent vintages are improving, with NCOs expected a bit higher in 1H then moderating in 2H .
Capital return continues but TBV is sensitive to AOCI: Q4 TBV/share −$0.88 on AFS unrealized losses and buybacks/dividends; CET1 remains strong at 16.03% (capacity for continued buybacks) .
Deposit outflow risk still present ($600–$800M identified), but mitigations (product changes, branch retention efforts, seasonal inflows) are in place; monitor deposit mix and PR public balances .
2025 setup: guided ETR 19–21%, operating expenses +4%, non-interest income reset to $155–$160M/quarter (post divestiture), and continued NIM expansion; if estimates confirm, this supports mid/high-single-digit revenue growth with stable credit .
Trade: near-term upside hinges on sustained margin gains and deposit cost declines; watch consumer loss trends and AOCI volatility; opportunistic buybacks may add to EPS momentum .

S&P Global disclaimer: Consensus values were unavailable in this report due to access errors. All other values are sourced from company filings and the Q4 2024 earnings call.

POPULAR, INC. (BPOP)·Q4 2024 Earnings Summary