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SAN JUAN - On Thursday, Popular Inc. (NASDAQ:BPOP) reported third-quarter earnings that exceeded analyst expectations, driven by higher net interest income and improved margins.
The Puerto Rico-based financial institution saw its shares rise 2.26% in pre-market trading following the announcement.
The bank reported earnings per share of $3.14 for the third quarter, beating the analyst estimate of $2.95 by $0.19. Revenue came in at $817.7 million, slightly below the consensus estimate of $821 million.
Net income reached $211.3 million in Q3, a slight improvement from $210.4 million in the previous quarter. The company’s net interest income grew to $646.5 million, an increase of $15 million from Q2, while net interest margin expanded to 3.51% from 3.49% in the previous quarter.
"We are very pleased with our strong results in the third quarter, which were driven by higher revenues, continued expansion of our net interest margin, and discipline in expense management," said Javier D. Ferrer, President and Chief Executive Officer of Popular, Inc.
Credit quality metrics showed some deterioration as non-performing loans increased by $190.6 million from the previous quarter, primarily due to two large commercial loans with book values of $158.3 million and $30.1 million. This pushed the non-performing loans ratio to 1.30% from 0.82% in Q2.
Net charge-offs increased to $57.8 million, up $15.6 million from the second quarter, with the annualized net charge-offs to average loans ratio rising to 0.60% from 0.45%.
The bank’s loan portfolio grew by $502 million to $38.7 billion, with increases across most portfolios, particularly in commercial and mortgage loans. Meanwhile, deposits decreased by $704.1 million to $66.5 billion, including a reduction of $841.9 million in Puerto Rico public deposits.
Popular’s Common Equity Tier 1 ratio stood at 15.79%, while tangible book value per share increased by $3.71 to $79.12. During the quarter, the bank repurchased over 1 million shares of common stock for $119.4 million and declared a common stock dividend of $0.75 per share, up from $0.70 previously.
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