Shares of Popular, Inc. BPOP have gained 5.9% in yesterday’s trading session in response to better-than-expected quarterly performance. Its first-quarter 2025 adjusted earnings per share (EPS) of $2.56 surpassed the Zacks Consensus Estimate of $2.26. The bottom line compared favorably with $1.43 reported in the year-ago quarter.

The results benefited from a rise in net interest income (NII) and loans and deposit balances. Decline in operating expenses seems encouraging in the quarter. Improvement in BPOP’s credit quality was another positive factor. However, a decline in fee income is a headwind.

The company’s net income (GAAP basis) came in at $177.5 million, which jumped 71.9% year over year.

Popular’s Revenues Rise & Expenses Decline Y/Y

Total quarterly revenues were $757.7 million, which beat the Zacks Consensus Estimate of $756.1 million. Further, the top line rose 6% from the year-ago quarter.

Quarterly NII was $605.6 million, up 10% year over year. Also, the net interest margin (non-taxable equivalent basis) expanded 24 basis points to 3.40%.

Non-interest income decreased 7.2% year over year to $152.1 million. The fall was primarily due to a decrease in mortgage banking activities’ income and net loss, including impairment, on equity securities, as well as other operating income.

Total operating expenses decreased 2.5% year over year to $471 million. The fall primarily stemmed from a decrease in total personnel costs, total other operating expenses, and amortization of intangibles.

BPOP’s Loans & Deposit Balances Rise Sequentially

As of March 31, 2025, total loans held-in-portfolio increased marginally on a sequential basis to $37.3 billion. Total deposits were $65.8 billion, which increased 1.4% from the previous quarter.

Popular’s Credit Quality Improves

In the first quarter of 2025, Popular recorded a provision for credit losses of $64.1 million, down 11.7% from the prior-year quarter.

As of March 31, 2025, non-performing assets were $366.2 million, which declined 15.8% year over year. The non-performing assets to total assets ratio was 0.49% compared with 0.61% as of March 31, 2024.

BPOP’s Capital Ratios Decline Y/Y

As of March 31, 2024, the Common Equity Tier 1 capital ratio and the Tier 1 capital ratio were 16.11% and 16.16%, respectively, compared with 16.36% and 16.42% in the year-ago quarter.

Popular’s Share Repurchase Update

In the reported quarter, the company repurchased 1,270,569 shares of common stock for $222.3 million.

Our View on BPOP

Popular is well-poised to benefit from its business transformation efforts, along with significant progress in modernizing customer channels. An increase in loans and deposit balances strengthens its balance sheet. However, any rise in expenses is expected to hurt the bottom-line growth in the near term.

Story Continues

Popular, Inc. Price, Consensus and EPS SurprisePopular, Inc. Price, Consensus and EPS Surprise

Popular, Inc. price-consensus-eps-surprise-chart | Popular, Inc. Quote

Currently, Popular carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of BPOP’s Peers

Hancock Whitney Corp.’s HWC first-quarter 2025 earnings per share of $1.38 exceeded the Zacks Consensus Estimate and the year-ago figure of $1.28. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

HWC’s results benefited from an increase in non-interest income and NII. Lower provisions were another positive. However, higher adjusted expenses alongside lower loans and deposits balances were headwinds.

Synovus Financial Corp. SNV reported first-quarter 2025 adjusted earnings per share of $1.30, which surpassed the Zacks Consensus Estimate of $1.11 per share. This compares with earnings of 79 cents per share a year ago.

Results benefited from strong year-over-year growth in NII and a fall in expenses and provisions for credit losses. Also, improving loan balances was a tailwind. However, a decline in non-interest revenues was a major headwind for SNV.

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