Popular (BPOP) 26 Oct 222022 Q3 Earnings call transcript

Welcome to today's Popular, Inc. Q3 2022 Earnings Call. My name is Juan I'll be coordinating your call today. [Operator Instructions] I'm now going to hand over to Paul Cardillo, Investor Relations Officer at Popular, Inc. To begin, please go ahead.

you us. thank and morning, for joining Good With Ignacio our Alvarez; the call CFO, our CEO, today is Soriano. our Lidio Vazquez; our us and on Carlos CRO, COO, Javier Ferrer, results review will answer our quarter They and third your then questions. team of available during also members session. Other will Q&A be management our the

that Before and you and set cause based on on forward-looking could filings. current would expectations today's uncertainties. statements call, differ remind I these are earnings SEC we forward-looking in are to we detailed subject forth press that risks to are Factors start, like to our from results that may make today's actual and within management's release materially are statements

popular.com. today's may the press our Ignacio over turn release CEO, find to page call on You at will I Alvarez. SEC now our filings and our web

and Good call. for you morning, the joining thank

and channels announced us the transaction changing Evertec acquire previously as and the on X. focus turn ongoing and experience were In impact the activity transformation, of agreements. enhancing we reflect to accelerate to Our omnichannel provide. Evertec the $XXX management. risk in quarter the quarter, Please digital $XXX the million, income commercial million closed needs to of our excluding transactions. markets, or the of strength economic revenue is key our quarter, our with results important to customer-facing extend solid beginning diversified that sources allowing of clients we achieved the the of our we prudent Slide agreement This already the At net we of and and for third expectations and the business

of lower the than second transactions, $XX quarterly was income, Evertec Our the excluding impact quarter. net the million

credit income investment not from positive the and variances do were losses quarter for Evertec. higher results operating include for and provision in characterized interest pickup our any quarter Third prior The expenses. results offset income by adjusted fee net in by equity

growth broad-based, and healthy all the growth loan was During by segments. was Total grew the both Puerto strong balances period. loan loan across particularly geographically quarter, loan in Commercial Rico and billion. during $X.X

quarter. Our net interest margin in improved the

we In to a our Credit In interest Evertec However, deposits intermediate-term July, rate complete remained levels. and in This bank. the million. to to our trends an Slide tangible the securities X. held announced turn of in our capital higher for to the million U.S. $XXX end favorable the ASR, going interest cost These which completed an capital Also, pretax outlook million of to in the of well portfolio to Puerto we sale loss are NPLs year. rapid fluctuations. our during have August, as accumulated increase future $X.X Please maturity. of completion we public and Rico we on had in quality Popular deposit as quarter program. October, below we treasuries the significantly the quarter, of to impact decreased begun reduces from particularly to see In OCI the $XXX uncertain in additional referred which NCOs from to interest third available pre-pandemic share of the accelerated before light sale return entered continued $XXX repurchase previously year-to-date, rates expect of forward, billion the rates upon in shares shareholders. period.

customer be users base. strong. our in by third million the Active Our X.XX to of base continues channels Banco or platform to retail among in reach of customers Adoption Puerto approximately exceeded Rico on our customers X,XXX quarter customer XX% Mi grew X.X unique digital million our

balances loan trend the digital lease through and Commercial and Island Commercial The growth third respectively. than two nearly Popular million remained well and our and Auto pre-pandemic thirds $XXX increased balances increased and remains stable million were by our loan versus we This levels deposits by above X% quarter or above significantly Additionally, Bank BPPR million, $XX of capture in continue at was our peers. to sales strong. and channels. X% loan during dollar BPPR quarter. the quarter debit XXXX. value the customers card second at of $XXX higher of credit

and certain complete In island Rico compared year. and on mortgage As Fiona available third value quarter impacted the to rates Florida the last originations and on have damages by caused inventory Rico impacted originations at September, dollar rising Ian, Hurricane blackout in Puerto to limited sectors of by Fiona in BPPR were Mainland, a of of The considerable mortgage the been Hurricane Puerto region. respectively. properties. by decreased Southwest and XX% the

While on our operations. the disaster. not by Ian in were was some flood-prone impacted concentrated our impact have material, customers significantly Hurricane not impact operation communities to a did the significant

fees fees various withdrawal ATM of offered products have waiving ATMs on We payment our in waiving forms both to for includes and of late customers regions. our outside network. certain This assistance using

Additionally, eligible offered to moratorium have storms. we impacted the by a borrowers

Fiona evaluating of and still hurricane are impact We the Ian.

macro quarter. level assistance for the on Rico. our significant. not solid. that should activity work to update said, the to be low received perform to third X risk given Slide Puerto local That to customers requests of Business will turn with we credit Please However, continued effect were in remained impacted has date, on The current an environment continue the events. economy during well these the by

data non-farm higher while We the The in X.X% positive, slightly its suggested level total Puerto The solid metrics is continues employment the certain Index trends from September, economic by remain levels. August August Activity somewhat. in in exceed August Puerto Rico encouraged employment Economic be rate In employment June. still X.X% recently is increased lowest than of Rico levels. and ever. pre-pandemic Puerto XXXX to Rico, moderating which for XXXX may However, most released is

In Fiona supply disrupted average above quarter, be with rate XX% to as up but auto traffic levels. hospitality New Year-to-date compared residents. be XXXX to was auto these Despite sales Hotel the XXXX. for economy, are year-to-date third favorably particularly same strong. chain-related there has remained by Puerto is and passenger to and loan pleased by quarter Hurricane Mainland a continues room The in are levels. our the continues we remained destination strength The decreased to X% growth. historical Rico September, has results pre-pandemic Airport robust source remained be has the third challenges, XX% also to of demand for robust. by a continues industry the strong local period product total cars through by Occupancy rates to for compare September in popular to sector in short, continues shortages. compared for traffic with in tourism daily the Puerto Rico. increased affected demand and

through mindful more our primary may uncertainty and manage of over ability global to but details turn market, are of lie potential I'll the market call challenges remain Rico, volatility, results. our the on that financial our and We ahead. to optimistic Carlos economic about for Puerto any future the now

Thank you, Please X. Ignacio. Good morning. turn Slide to

in additional its completed completed QX, the press quarter shares details usual, Net $XXX appendix the common August, an is release was corporation after-tax the Evertec of to second previously sale Evertec. million. transactions for we earnings of announced X.X aggregate slide deck. Today's Early the $XXX stock. of the As remaining million the the from in quarter. variances with resulted gain million. In income information agreement in These provided

The from interest Evertec and extent, was loan both banks. income income million higher Popular million. to increase This rates, an a investment these lesser well Rico driven $XX net growth Excluding interest our by would third Net of have million expense as Bank. QX higher increased as resulting Noninterest variance deposits $XXX was somewhat been interest transactions, was QX. from the income quarter deposits offset from Puerto increased million. higher for $XXX government income on on to from by yield $XXX million, mainly securities, $XXX at by

million adjustments million our from the income due income reversal million. quarter for to remaining Equipment $XXX gain $XX resulted Evertec business. of million acquisition of the price for a last the the Excluding noninterest was from contingent quarter in consideration purchase U.S. an $XXX the increase year's variance to during The related noninterest of $X.X Finance pretax the transactions,

also a on charge reversal. the of eliminating $X this million quarter, benefit goodwill impairment for the took we of transaction, the During

fees portfolio We to These the Evertec. reduction also derivative recorded higher an higher merchant to due and insurance corporation's runoff primarily charges, fees, mortgage fees close eliminate offset and with acquiring lower the the positions. deposit overdraft due fees. on due losses by increase to in latter related income higher account in or modify the initiatives to of other banking agreement service service sharing to were servicing revenue a the And partially

is prior an on that million $XXX in to approximately income three from due partly noninterest $XXX factors to million effect XXXX The expect to rate million have also $XXX our We rate. be QX. run reduction run our would

First, investments our earnings portfolio related from Evertec. sale the stake reduced equity our of method ownership under the held to of in

earnings Second, cash the fees, elimination services. on modification overdraft of the management of stemming lower account and rate policies deposit charges credit service from related higher corporate

in them Lastly, rather we done portfolio than the have in past. in August, originations sell we decided as FHA-insured retain mortgage to

quarter business. $X OREO by and July. a Personnel transaction last were to for effort talent. million million to U.S. debit operating in quarterly QX. the to be The expenses January lower guidance As updated effective income card Credit $XX $X for previously was Total increase ability network sale by interest million charge salary our credit our from expenses properties. acquisition mentioned market webcast, of expenses $X million mostly processing as be retain attract our million $XX million the the to result adjustments mortgage provide gain compared due a decreased increased of the in to card lower, $XX result, and the we'll previously higher. of for our and quarter, $XXX fees due and to $XX quarter. $X but that was included an were will our third year's in In were gain in on exempt the losses lower impairment discussed Equipment million second related million goodwill tied costs incentives to Evertec, income. with and of on million enhance higher a income sale will concerted This tax provision merit XXXX This noninterest Finance

expenses Aerotech higher QX digital rate, the personnel, continuing impact compliance We and been in QX, be increases expenses goodwill expect XXX. by than transformation, guidance in in and technology, impairment will versus costs. we run quarterly XXXX anticipate of would our In our the million. expenses prior expenses approximately $XXX have million the driven $XXX of that of charge, Excluding consulting

transactions, quarter. Evertec to interest X.XX% to of Slide improved points $XX was yields quarter second for are deposits. The a million rate increase higher increased million, X. by result lag in XX%. QX. the increase basis, Please repricing increase the year loan rate. tax the an XX taxable XX% mix, in XX% driven than margin subject basis equivalent interest higher This a X.XX%, in basis The to income basis second effective decrease unchanged, NIM effective was tax the Net at Our mainly quarter. point to points. a government basis and in asset the of a rate a remains environment, Net guidance XX was turn equivalent XX full on is interest tax by On $XXX compared taxable which preferential XX% was XXXX of a to in rate

deposits, the our trust public from $XXX balances managed Rico through deposits Puerto declined Excluding mainly division. in deposit million quarter, by

the As increase were deposits from other roughly an billion, million of QX. quarter, end the of $XXX third of $XX.X

$X.X to Puerto from week first approximately at deposits in public billion approximately as of the Rico obligations plan Puerto bank part fund BPPR billion. the October, adjustment. $XX.X Currently, in the totaled the government However, of pension Rico transferred

billion will slightly deposits We $XX our $XX billion, [ph] expect higher than between and previous poly end range. XXXX

are higher with Our QX balances X% increased up being loan quarter strong. loan growth year-to-date. were in commercial All billion to segments ending $X.X billion X% $X.X compared or the by loan and particularly or

Fed currently from quarter, provide During yield. $X.X TBOS a billion shifted liquidity higher effective the to funds tax that of we

demand by and BPPR are credit the for encouraged We PV. at

deposits liquidity. opportunities continued Rico We retail beta. will track existing the represent Slide last lower Please portion take our franchise Year-to-date, X. has total improve historical continue our But and in yield to commercial now to to advantage deposit turn a to the and cycle. extend below to deposits use of Puerto rate its these and of of compared

now XX% move rates, which of with As we total will the our of short-term rates given quarter approximately last up shift the to deposits, in discussed quarter, rapid higher public going interest for forward, market account sector tandem cost deposits, with lag. a

quarter, to public higher. we cost the For deposits expect XXX be of points fourth basis the

public resuming result trend sector As increased in reported cost, we to of expect the margin a before in a positive XXXX. deposit QX decrease our in

interest cost excess is be commercial Popular rising to and cash scenarios rates BPPR. in Our security deposit coming lesser increase will police and Rico neutral quarters. rate in to deposits at a relatively of Bank Puerto majority The in driven accounts in the extent, the by

to manage will deposit the taking the turn actively commercial We costs, consideration relationship to into Slide Please with continue client. X. total

temporary. We a in the have investment is decrease of seen value portfolio fair that

portfolio treasury portfolio agency bond average years. has an risk. The and which of mortgage-backed investment basically carry of is minimal X.X comprised Our approximately duration securities, credit

mark yield will their roll down down will the and zero. positions curve, to to face value As go the convert the par

for to interest of on sale the recorded rates loss interest million U.S. as year-to-date, of transfer had these in $X.X in be about capital third. amortized of effectively the this transfer the rates we billion the annual off X the into by of reducing forward, to of does losses a one million, in forward-looking treasuries rate same thereby This well liquidity. held in impact The material going value. range October, $XX tapering remaining Given maturity, $XXX from maturity effect positions quarter as move. have available result not until as transfer, securities of outlook will through AOCI maturity. the a exposure the a AOCI interest approximately pretax recognized rates time to at action uncertain AOCI increase per to the transfer then X-year of reduced At a yield positions for the This transferred rapid back good unrealized XXXX, on our no to and life which final remains on

and for portfolio short-term rental We in continue large to at maintain sale Fed. a the treasury cash

an While and they well subsidiaries, do impact in as corporation's ratios. losses gains impact the capital XX. have AOCI changes the wholly the in turn Slide unrealized ratios, banking of those the amount tangible of Please not on as capital regulatory to owned

transactions. equity Our Aerotech quarter, gain in return from the on XX.X% Regulatory the the strong. levels benefiting was tangible capital in remain

income. million another repurchased $XXX In capital quarterly already the million and average sale by X Tier $XX.XX. ASRs for at Annual result points of per the QX end QX partially In dividend was by ASR. unrealized a price and we equity purchase into on XX% a quarter balance. million announced available total, higher on The common stock. in value was the interest our EPS $XXX shares higher during to basis loss securities by common Popular's net down Our in accumulated offset ratio increased year agreement repurchase quarter. August, completed July, debt during QX. share, share. the driven XX%, decrease, we from In per The at of ASR XX were effect the These of the X.X million, rates an the we previously an impact of aggregate of book $X.XX of entered ASR the full is impact our reflected mostly combined $XX.XX in $XXX

Given the capital we the in activity delay current repurchase decided ASR. including rates, beyond our uncertainty markets, interest which stock in the additional volatility have the tangible temporary impact levels,

plan interest capital the more once and revisit XXXX, and around in to level second actions half certainty for the of dividend maintain will economy. the outlook have current rates We of due the to we

our result, capital a we announce January actions do new to webcast. not in As intend

capital of capital mainland move our expect strong return call our our that, regulatory time, buffer peers, geographic a turn in over towards not concentration for Over Rico. ratios capital to account levels our has to Lidio. changed, the Puerto Our on the plus regulatory perspective we in anchored ratios. I With to

Overall, morning. good exhibit of charge-offs continue decreasing trends and low non-performing Carlos, stable you, with levels credit loans. Thank Popular net to and quality

given environment, performance borrower and changes continue interest closely under monitor rising uncertainty. headwinds, We geopolitical in economic to macroeconomic rates, potential

in hurricanes being Corporation's Ian date, requests in evaluated, of more impact received should loan to that economic under of hurricanes significant. not markets believe profile low and levels difficult do improvement impact credit we and The Fiona business the risk risk positions to limited the successfully still we the is the Popular the conditions. However, assistance portfolios but federal [ph] be the the given on of operate

Puerto health The Turning to an by XX. U.S. NPLs offset increased million to was by in of number by decrease part second $X increase quarter. ratio as care X.X% was previous lower the was quarter, end loans mainly offset inflows, nonaccrual part by weeks to in increased million NPL by was that of inflows by mortgage the part Rico, The Slide Nonperforming by an Puerto to stop to to held excluding quarter. status in the due the Rico. due $XX placed $X $XX NPLs In during driven $XX in quarter, by in mentioned, in of the quarter. At in total consumer million, in $XX the in by assets during NPLs NPLs Compared and of hurricane decreased X.X% U.S., million $XX the million. care this we lower million. commercial by other relationship lower compared $XXX driven the mainly health $X mortgage NPLs portfolio million, million, previously decrease last the NPLs quarter, relationship higher by the NPL loan, Fiona activity driven in NPLs collection auto million, to two to

points $X manufacturing held The the an care to Net by Puerto to credit and $XXX was for impacted September. driven loans Slide activities in [ph] XX% ratio health and X.X% [ph] during of was to $X million quarter losses NPL million lack compared the to XX million held charge-off losses the The quarter. losses million, of last charge-offs inflow. points basis annualized recorded the amounted by credit by and net in or charge the $XX basis for allowance the changes the $X portfolio was of credit pharmaceutical a commercial million allowance two X.X% activity. Puerto a $XX prior of or the the $XX mentioned quarter. quarter, number weeks for for credit allowance The loans in Rico, million reserve the specific XX. were changes reflecting volumes, losses results in compared corporation credit NPLs for prior by expense million of or portfolio to an to of for relationship ratio an held million In compared previously quarter. in $XX in of quality, provision for to to Turning million remained in provision to in and Rico X credit compared previous portfolio flat credit loan The the the collection prior increased at $XX higher million $X allowance for of in XXX% in losses losses average

to persistent to supply provision the U.S. compared in for U.S., Analytics $XX million. Moody's rate, Notwithstanding Please constraints Discussed the the Analytics, Rico chain in Slide U.S. in high we continue $X Moody's baseline inflation, remains economic recession-free. outlook general uncertainty, was economy increase the forecast. leverage and and interest While near-term XX. Puerto million turn number webcast, prior to for

pessimistic probability scenario, under employment the recession quality portfolio nonperforming of turn with the was achieve strong The and concluding like difficult closely loan forecast utilizes in economic conditions. baseline in to period by positions to and portfolio in to in assigns its our Ignacio the believe the levels. continued part continued reserves, the the more economic to operate remain by Popular metrics summarize, forecast revert loan SX. loans. scenario, specific To the growth in successfully the quarter-over-quarter increases profile historical remarks. quarter to risk but Popular strength decreasing framework over ASL highest changes We for improvements net charge-offs attentive to offset I Rico call Our With the of that, [ph] Puerto loan change more evolving corporation's driven over low time to would by micro portfolio to his environment, third credit in that and followed the

updates. Thank and for you, Lidio Carlos, your

customer strong, results driven growth, stable and growth. the year-to-date Our loan been by quarter credit for solid robust and have earnings, quality continued

previous levels rates aware to additional interest to events stemming We and Puerto challenges may food diversified provide well revenue, are higher market from main funds of are optimistic leverage we and Consumer these opportunities that of any volatility, sources we stimulus. are opportunities strong about potential in Rico, market. continues activity With inflation, address fundamentals, management from and positioned remain expected potential healthy our recovery and and at challenges arise.

results, team's serve customers In in Fiona, proud assist support quickly their response and we thanks despite addition mobilized impacted in resolve wake agility of financial our to the our our Hurricane to need, I'm communities to extremely and employees. about challenges operational

colleagues amount commitment our evidences all Our serve. to in stakeholders the unwavering such performance we important

Instructions] are from ready today from comes Sandler. Twerdahl your Alex you. Thank first question now [Operator answer We questions. Piper to Our

line open. now Your is

morning. good Hey,

Good morning.

First, delaying comments second about on the of of I your to until actions wanted ask capital 'XX. the half the

whole kind next the that X anything if through was the whole that to won't ongoing you're the exercise until take the plans with you by around or have time, announce year? now, exercise this that right of go if - if Fed and I curious think then place if half gets supposed you go the to that just through delayed months Just and of second

process through The normal Fed with go No. the Yeah. we - is completed. go

else biggest completed have saw that and everything test We part I the process. stress of that our

these finishing the stress because is So capital close test. freshest is that it's talk It we when actions about discussions to done. convenient

the chance never be to no might or quarter good completed us We maybe that it's second Fed already from to we different. you be normally like in we them talk So that, reasonable think to it respond will it [ph] it update a refresh requests allows about not, that enough. The I know. the but one

HTM, given or the it think be and stress that to should to that as relates TCE, floor And of about from of mattered And that Fed really to it have. the there's just the transfer as correlated AFS you I'm hasn't has timing we it Okay. maybe upon just is regulatory test? completing then of the the you capital either that aware doesn't have of? if you a still kind But amount you wondering internally historically, suggested

not ended we're is It get a through probable at It up it beginning whatsoever, We as printing Fed it and what No. covered all. not It's the comments with of implemented. whatsoever. was not decision, the to separate working from we we quarter. did, received have which on was any fourth capital the

the Okay. on then, clarify just you Carlos, I if wondering Thanks was could And for expenses. that. guidance

I or quarterly said the it million the back fourth run factor that into page it quarterly so higher get on we rate the sharing it just Is of in second the for than Is guidance, big and same rate. that the we're whether XXXX $XXX for 'XX How and next half run year? then quarter no should be profit does be that average two not the higher the think you then? there's quarters? should all surprises

what our current than run higher said Now is rate. I

quality run average our the not for the rate. car it's but year, So in

Okay.

that profit run current there next then average the half second then and rate? year, up comes around the of going sharing starting a from on that So to in be point you're will be should added XXX,

you for mean, budget in. as kick our I sharing, that to to outperform know, have profit we Yeah.

earlier this in the we But part to it until only spoke typically about was of happen it is doesn't and a is - intended second normally the it year. that's quarter outperform a reasonably latter is that fourth. that we year in that why that is to the So the outperformance. again, were going difference program the share The year,

our because we now. is get means doing So not of is there that always including we better, part shareholders. the But everybody that hope bucket

questions. my taking for Thanks Okay.

today Our Fargo. next Braziler ahead. from is from go question Wells Please Tim

decline XX-day that to quarter quarter in should the in Hi, Carlos, going larger kind your thinking around interest might outperform post up? government just about catches the NIM rate same then one the will question good for just morning. and we while Is margin last to be first that commentary How is fourth in going deposits more 'XX. lag, there maybe the turnover, be hike? net trend My stabilizes? it it balances should the hard and quarters. repricing is the of higher book It that couple given more take so out, seems to Or book a for like be

mean XX I in exactly not it's days.

So to it's pretty XX close day.

from XXX. the third see Fed quarter, in can in the quarter business for the commentary next you As rate increase was our

expect So that's what we government the to in next quarter. increase deposit costs go up

So quarter. conceptually, year XXX, is fourth then next first the the benefit over on quarter carry in of if the to and and this increase And so quarter would that so forth. did the lag

up, as helping one up catch but quarter it the the is just soon rate have lag will as rates go of We as to then start talked constant, later. increases about

is one average that that the Okay. got end quarter flush system, through of kind rate $XX.X hike following last of that that Or is period? number? public billion the in then funds, The an should And it.

end And the of sorry, period. That's now, is number again, of No. $XX.X as XX. billion. -

from in down that already quarter it's number. So

ultimately Okay. And and that of are growing growth you visibility maybe of wondering can point to kind the from I'm balances point larger a balance increased quarter. a you kind down? those those a come just good provide Or us for accounts? and have the translates here activity government still low going within and to if And high

Yeah. is keep again, for that the in given we right the And now I don't and peak entity. estimate one mind information have the is not best the from balance low the have quarter. our But again, the government. government

accounts us make that XXX deposit over have government balances. the We

sometimes, that is have - our it advances between them $XX to best right and will billion visibility. year be hard $XX now for end continues But the to of So guess changed to billion. anymore. is last think we that What lower to from has that range don't of had just the range XX, happen is a XX quarter, range and going we

the of part still be that range, XX. increased XX our the but haven't going somewhere and it's between upper to estimate is We

the Okay. Lidio. provide And any went on quarter? one for during you maybe additional Can then care loan color health that the nonperforming U.S.

mean mean, is, case portfolio. but all I of real systemic. at I difficulty our health not the just of It one of that had systemic not a some customer financial

we just looks charge-offs normalize quality? of starting context, of Okay. provisioning there we're kind entering staring guess, And take We're should broader mainland? higher. we to That's even then guess, credit additional down normalization? is somewhat. that of do normalizing I recession allowance period is a period be enter it go that consumer like in assuming at of a to a as Or then similar Are landscape the asset as we level I And seeing on room helpful. of of kind kind

say, would as good such a a thing there's provision. mean, I I

lot it credit I necessarily the not this a think was the quarter this growth environment. case driven because of was by

think Fiona to some it's numbers. of in me, too of terms I early impact still we have an tell of the

higher of charge-off little So a you little a because Fiona of bit of Fiona. a of higher NPL because n a have bit

very, - for So the and third very the credit very, is feel the we for are still quarter, picture numbers we're that good the very organization. good we strong, very

color. the for you Thank Okay.

you. Thank

Hovde Our ahead. from Group. next go Please Rabatin question Brett comes from

Hey. Good morning, everyone.

Brett. morning, Good

- if your Wanted sort let's of have the we change wait would I environment and back the that market book your could maybe did look different And that your after do we tangible plan. than XX% question question. from mentioned capital dropped immediately XX here to bond to to the not our that? change here, the than to you $XX at correctly changes earlier decision your the second commentary, Fed around alter in color mean say, action you capital process? book I quarter, adjusted over some is, go and my specifically and presently Any tell the understand I stock tangible the at

speak. was to environment that by I made still to have as was it decision prudent, Fed to as banks ASR Well, paused clear not by that also opposed back a our we're shares other It We and that decision given we that requested this account take the Fed. want actually a us. into buying related to was buybacks, not this felt the make absolutely was the

wanted written timetable is reasonable the So nothing to that there's couldn't look what expect thinking. that's you revisit going think earlier. that. we nothing stone we we're world and changes what do that We're to time at We it had to that's dramatically, a because give to with a

around to Fair think margin NII than it and fourth a to the the take it there's And we maybe it, deposits Or absolute just Okay. NII then And a like total so number? as seems the banks enough. the direction maybe between more speak. some Can government different at for about a and $XX complicated you dollars? quarter with a way to look margin out relationship you $XX commentary, Do figuring about of you're decline me million could somewhere that's levels? point of different fair million think kind dollars quarter. I think little would linked

loan putting to production, for that in it is on what what have basis on expect are the very or the depend rates NII, you growth today. the government What new you're you have balance from right? will they whatever plus deposits, Well, shouldn't Brett, where in calculation complicated XXX be cost, the points in selling loan increased and you're for

to be comes number number $XX out that that if is... and million, additional So

And Okay. one Fair enough. Carlos. maybe last then Thanks, one.

advantage at least the your banks, of presumably But or much path? Do 'XX, sensitive. slide the Puerto government in running a the things lot sheet? thematically, continue from to loan lower change betas how think a But deposit big Or the about step back deck price have mainland sheet your wanted as in case would just and and you maybe be going you I the mainland BPOP obviously, balance more are Rico you're the to here in even have continue deposits sort think the generally banks speaking, illustrate than from that the growth. just and same of balance forward. the to to will specifically

even maybe bit than a very expected, we No. better than loan this little seen we - we've I mean it's good expected. sooner definitely year, growth

happen You in year. it until quarter of net actually half year, growth remember, the loan to we guiding the were the very of second started will the a and first happening

expected. maybe growth little loan better we than So performed a has

portfolio like redeploy we on for what and would us exactly have loans investment the when would that to expect that you it done sheet with balance that to We reducing do happens perfect us do thing the more. to are

of year. still on rest very next for and We are the positive growth loan this year

reduction the of to we portfolios continued out, So pans and more you more should should do sheet can I I to hope in year directionally, gravitate a loan, what normal cash investment a is just [ph] see what securities gradual that, levels. as balance our investment and comes next in Now if said start so

Popular, our opposed historical asset represented something has you XXs of If for investment high in to total XX% look portfolio assets. of the our total as

definitely next hope have start path would in and than direction the we We relationships I that treasuries that rather we So can in can investment year. have. loans that

all Appreciate color. the Okay.

Thank you

Our next from KBW. from question Motta today Kelly comes

line is Your open, now

so deposit back wanted to had it you I Fed the on much question. betas. just slide Thank Hi. on for that circle you helpful. I gave really

betas point a historical whether non-public of total how give made so wondering run those - or expect And you deposit beta you to what we've that the interest-bearing that could mainland beta funds, we're deposit there's is historically, wanted for higher argument just clarification expect than you of deposit for Just given beta? the be betas core seeing rate? when an guys to banks, an with what kind the what deposit be seen the

the the on increased, historical have chart cycle is for is Okay. here What last rate we Kelly. betas

mix. the of the This our different, historical states, be historical true. call, as earlier is typically it to for have was betas ours been of mentioned in peer year lower So and continues that than the course, in what are is is banks they

will now in lot have question hike government than they on whether the last We remain we On a more had your deposits cycle. rate the same.

or far, we're to were bit end increases that this betas the from our simply quick. rates So well-informed they last analysts to higher lot of well. is of time, a reaction because being of so expect up tracking they being than a very in accelerating in cycle There discussion rate rapid the

there is some I think discussion. merit

but seen we We until course, see is of over. haven't it won't the cycle yet, it

well in whole we market if ends day, our are trends. bank at this the the in And of up hope the will at historical we the performing within still So below Puerto would betas. remain market in higher time, point that, least betas, at Rico end

reason, helpful. XQ. your would That's margin in And Okay. similar to contract ended margin now? sequentially what factor guidance gave then the And what's in if those your that for in hanging coming happen Does up deposit for down. current to public margin they that of you those whatever amount the guidance to are

comment between the you the year-end. Well, Yeah. for expect XX if deposits is XX put that together you our first if import end up we of a will couple comments, and balance

of implies expect the they around sort So be that of sort ounces to that where are we now.

in incorporates of It what not So some in of on maybe those reduction increase happen. balances, expectation deposits, incorporate balances that cost points margin balances. XXX yes. but that in And in a were of increase our huge include commentary does does to basis not commentary reduction an the

back. step I'll Thanks.

RBC. next Our go today question Please Cassidy Instructions] [Operator Gerard from from ahead. is

another the as perhaps compete year Thomas there maybe to? lending changes you Hi. growth, you Have know from maybe I banks strong active weren't any you Gerard. of always quarter. them, that that a any I new but market speak guys behalf into morning, seen mainland entrants This is Circling with ago? mean, for calling back Good loan to guys on everyone. can

really. not No,

We new haven't any interest. seen

big for yet. significantly these see of you or of haven't projects entrants been bread may down that done high think But non-U.S. have levels and loan, competition the it in from we butter road banks. some any of I infrastructure commercial the seen not some

seen the Okay. the for back on quality in that auto we seeing states? are portfolio, you few us in we've auto Thank that the presentation, a can in auto you quarter. acquisition in used years head of guys you. then outlook price car And as an And Puerto Are Wells your Island. with increase year? a your the inflation with Rico And the you bigger in next mentioned you the into in obviously credit space lender loan share NCOs

the Mainland you We an as in in Puerto increase Rico. have seen have price, in seen the US same

on realization So early that had of I performed is Dutch given sell. to and lower lower mean that our charge-offs basis. continued liquidity than outlook, in level but feel regards continue it well portfolio, across be the most through the activity our pandemic we economic to we delinquency, base, mean that to we Puerto expected and a we lower that or mean, in better repossess and we - of still our see lower the Rico I much prior in We-- the client I also portfolio. loan going-forward the [ph] perform - high of with auto

great. Okay, for Thank you question. taking my

a follow-up Brett Group. Rabatin Hovde question from next Our is today from

Your line is now open.

follow up. Hey, thanks to auto, ask but about you was the that. for I going addressed just

past the the earlier pipeline to Is there see, loan just looking better expected. what good. economic it's the holding where to you is growth loan So at the say Or it mean pretty in one guys relative continued I the And and quarter? pipeline be you in relative than maybe follow-up [indiscernible] year? maybe it improving was would they're to data, about as pipeline around the actually

the loan the especially corporate but that business We've said lumpy. same. about Ignacio, in I've quarter. good I is Obviously, second demand our it's before, This starting this some is say would had of

mean one demand, payoffs it any of in So across in it's loan balance you're to quarter, loan come lighter never in one loan quarter demand the we're and loan so have I the and going I still seeing Puerto may But sure good seen quarter or get form terms the you But steady. every see other. or Rico. a for loan in heavy And I a the smaller other. changes sectors bigger in decrease not that sometimes also in can demand far.

hearing in in guys around its around not how or year? if a good like thoughts opportunity was maybe And and might environment. you one, kind be then in one with Puerto really the a talked things operation, level around - And I that possibly next what but and the are about seem just Puerto Rico good would seeing for for this Luma improve just what last I've could, it from ground Rico things. of would Okay. Luma lot production really Any happened Fiona to heard [ph] you of electricity - improve a

I energy. federal to slow civil is ever and there's efforts from government emphasis. think in a would force I think recovery lining on were to I like Maria There's next year say, Fiona, don't that work the know, notice much the too a the that, a they've task created something cycle, the if I especially more has but lot

hard understand FEMA upfront The not I necessarily electric up to they to tied people of to company really cost that FEMA project. it's it normal a the the in jurisdiction have with think can up there's pace. they XX% but And going ours, situation, were works a recently, announced come pick the could certain of where like like problem a to And you. insurance lot an XX%. we be which strapped, part reimburse of more

front. lot under of government show a progress in to lot to more think see perform. a lot also pressure And we're I pressure of a So going think Lumas to the federal is under is I this focus.

think pace accelerate. will I the So

Appreciate the Great. color. Okay.

from is a Wells follow-up Braziler question from Fargo. next Our Timur

line now is open. Your

Hi. up. A follow

questions me. two for Just more

can't Timur. you, We hear

hear Is that Can better? you me?

a better. It's Thank lot you.

yes. Sorry,

started far of rate And hitting the as it's wondering, is revenue So the down sale? run on Maybe two Evertec a fee the gain does coming then quarter. kind revenue quick follow-ups I'm sharing of XXX, And that for the around for full just like impact? this that component what as me. large this that from majority starting quarter, on step is that from look share? guidance pretty quarter's income

million equipment things that Well, Yeah. U.S. $X the the our of connected million - in has quarter, $X in to number. couple that a finance - this unusual company the it number, is our -

So the XXX is rate. not exactly run

always XXX. talking we're XXX The that, XXX So to if you a to runway referring we're to of here, for couple there's adjust the about differences. back we're

one million to First was a from about a year happening, and pickup $X that that million is sorry. quarter, Evertec an equity anymore, we of all, $X [indiscernible] don't - have

the number well the that will number. that mentioned So then And as affect moving other affects I factors forward.

this of in So with much things guidance. prior number it's a the because I'll in line number quarter a you change big happening statement take the quarter pretty when out, the just disagree was with for this neutral

for on I goodwill No, then drove a hasn't on for for impairment that's that acquisition impairment? last what And the on your just [ph] guess Okay. some me, books that color KX fair drove just been Maybe statement. that what an long.

that your deal leads contingent -- was to that To of in luckily, It's Yeah. and thought lot we a we acquisition The such the way a some typical have structured there performance. goodwill meeting not budget extent, the linked exactly adjustment the that exercise. they to was would, an payments goodwill. in that

well. So those as contingent payments went away

the didn't for So of at the an effect effect out and end the the day, performance on have quarter. those a- passed the of two things

their a expected meet targets. luckily to are slower we has bit they just picked It than lately. a was it So matter up that

of So make up ground. we some that hope they'll

you I the it. appreciate it. Got for color Thank

welcome You're

question Our today from Twerdahl Sandler. is next Piper Alex from

Your is open. line now

in quick on Rico question us the in loan big I give in like both there's follow-up growth. loan Mainland, of granularity color some Puerto the you any the a growth saw Just that you was on commercial if and wondering there? loans the if could really chunky

stuff. typical Yes. in think I we had In one the some large that, it's sector. loan Rico, hospitality much we Puerto - had Other than pretty

I large away a that in that think would in sector. did that mind both I is So loan Puerto the come markets, to Rico have they right the only hospitality we thing say

you of any... on line And sight

that off sector a both now. there's well, on that's and and island interest, say lot of right sector that very it's in would a performing I

have you be loans any next line on quarters? that, Do could on over other the Yes. like chunky of that big coming several any potentially sight

just following pipeline. we're mentioned. bigger bit than honest, size, to ones probably have be one, we nice Not up the normally some perhaps But we little have what bigger that But do. some one but probably in loan normal, prospects a I nice we than that is that on

sector of missed us noninterest-bearing deposits. but to complexion And give the Can if retail this, the just versus sectors? - that commercial relative I various X, has public sorry I'm Okay. then the distribution of the you versus slide, those Slide

don't that work have on have We'll don't that way. up here. broken - that have We we to exactly

by As break we opposed deposits by from product to our segments. you can typically up see as financials,

don't we'll with So the a... up information, but come we have

Is public - interest-bearing? say mean, of Okay. very For it don't to I any bearing... one much would sector there those be fair noninterest deposits that have

opposite. The

if be and okay. a you interest-bearing, retail, the - then equal would rough I They're And all split? it guessing commercial you mean, the

obviously, I the you top The want beta you you to on - can interest-bearing head, X do give my gives know of of the the best a number have don't I melded we the off Alex. is slide what slide noninterest-bearing. and Page don't the of and

looking we're can see your question. see if to but So address we to -

Okay. follow Thanks ups. my for taking

further back are hand at over would to Ignacio time. you no remarks. There Alvarez closing questions now this I for

in and And us joining our for for updating January again call. questions. we Thanks your Have nice day. a our look on forward to you progress

concludes That Popular XXXX call. QX today's Inc. earnings

your disconnect now may You lines.