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Published: 2024-01-25 07:00:40 ET
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EX-99.2 3 d730513dex992.htm EX-99.2 EX-99.2

Exhibit 99.2


Cautionary Note Regarding Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation those regarding Popular’s business, financial condition, results of operations and future plans, objectives, performance, earnings and expenses. These statements are not guarantees of future performance, are based on the current expectations of Popular, Inc.’s (the “Corporation”) management and, by their nature, involve risks, uncertainties, estimates and assumptions. Potential factors, some of which are beyond the Corporation’s control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. More information on the risks and important factors that could affect the Corporation’s future results and financial condition is included in our Form 10-K for the year ended December 31, 2022, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, in our earnings release for the quarter ended December 31, 2023, and in our Annual Report on form 10-K for the year ended December 31, 2023 to be filed with the Securities and Exchange Commission. Our filings are available on the Corporation’s website (www.popular.com) and on the Securities and Exchange Commission website (www.sec.gov). The Corporation assumes no obligation to update or revise any forward-looking statements which speak as of their respective dates.


2023 Highlights Financial Highlights Annual Highlights $ in millions, except ratios and EPS Income Statement 2023 2022 Change Highlights: • Adjusted net income of $587 million, excluding the after-tax impact of Net Income $ 541 $ 1,103 $ ( 562) $45 million of the FDIC Special Assessment Net Interest Margin 3.13% 3.11% 0.02% 1 • Net interest income decreased $36 million, NIM improved 2 basis Net Interest Margin FTE 3.31% 3.46% (0.15%) points (bps) Total Deposit Cost 1.68% 0.39% 1.29% • Loans increased $3 billion EPS $ 7.53 $ 14.65 $ ( 7.12) • Non-performing loans (NPLs) decreased $81 million Financial Ratios • NPLs to loans ratio down to 1.0% vs. 1.4% in 2022 ROA 0.76% 1.51% (0.75%) • Deposits increased $2.4 billion, driven by P.R. government deposits ROTCE 9.40% 21.13% (11.73%) and Popular Bank deposits • Common Equity Tier 1 capital ratio decreased 9 bps to 16.30% Ending Balances • Tangible book value per share increased $14.77 to $59.74 Loans Held in Portfolio $ 35,065 $ 32,078 $ 2,987 • Increased quarterly common stock dividend to $0.62 per share from Total Assets 70,758 67,638 3,120 $0.55 Total Deposits 63,618 61,227 2,391 Borrowings 1,078 1,400 (322) FDIC Special Assessment: • Recorded an expense of $71 million ($45 million net of tax) related to Credit Quality the FDIC Special Assessment in the fourth quarter of 2023 Non Performing Loans $ 358 $ 439 $ ( 81) NPL Ratio 1.02% 1.37% (0.35%) Redemption of Senior Notes: NCO Ratio 0.44% 0.20% 0.24% • In Q1 2023, issued $400 million aggregate principal amount of 7.25% ACL-NPL Ratio 204% 164% 40% Senior Notes due 2028. In Q3 2023, a portion of the net proceeds of this issuance was used to redeem, at par value, all outstanding $300 Capital million aggregate principal amount of the 6.125% Senior Notes that were due September 2023 Common Equity Tier 1 16.30% 16.39% (0.09%) Tangible Book Value Per Share $ 59.74 $ 44.97 $ 14.77 1 FTE net interest margin represents a non-GAAP financial measure. See the Corporation's earnings press release, Form 10-Q and Form 10-K filed with the U.S. Securities and Exchange 3 Commission for the applicable periods for a GAAP to non-GAAP reconciliation. FTE stands for fully taxable-equivalent basis


Q4 2023 Highlights Financial Highlights Quarter Highlights $ in millions, except ratios and EPS Income Statement Q4 2023 Q3 2023 Change Q4 2022 Highlights: • Adjusted net income of $140 million, excluding the after-tax Net Income $ 95 $ 137 $ (42) $ 257 Net Interest Margin 3.08% 3.07% 0.01% 3.28% impact of $45 million of the FDIC Special Assessment 1 Net Interest Margin FTE 3.26% 3.24% 0.02% 3.64% • Net interest income remained flat, NIM increased 1 bp Total Deposit Cost 2.00% 1.84% 0.16% 0.89% EPS $ 1.31 $ 1.90 $ (0.59) $ 3.56• Loans increased $1 billion • Non-performing loans decreased $4 million; NPLs to loans ratio Financial Ratios down to 1.0% vs. 1.1% in Q3 2023 ROA 0.52% 0.75% (0.23%) 1.44% • Deposits increased $280 million, mainly in Popular Bank ROTCE 6.32% 9.36% (3.04%) 19.23% • Common Equity Tier 1 capital ratio decreased 51 bps to 16.30% due to loan growth Ending Balances • Tangible book value per share increased $9.54 to $59.74 Loans Held in Portfolio $ 35,065 $ 34,029 $ 1,036 $ 32,078 Total Assets 70,758 69,737 1 ,021 67,638 Total Deposits 63,618 63,338 280 61,227 FDIC Special Assessment: Borrowings 1,078 1,098 ( 20) 1,400 • Recorded an expense of $71 million ($45 million net of tax) related Credit Quality to the FDIC Special Assessment in the fourth quarter of 2023 Non Performing Loans $ 358 $ 362 $ ( 4) $ 439 NPL Ratio 1.02% 1.06% (0.04%) 1.37% NCO Ratio 0.66% 0.39% 0.27% 0.39% ACL-NPL Ratio 204% 197% 7% 164% Capital Common Equity Tier 1 16.30% 16.81% (0.51%) 16.39% Tangible Book Value Per Share $ 59.74 $ 50.20 $ 9.54 $ 44.97 1 FTE net interest margin represents a non-GAAP financial measure. See the Corporation's earnings press release, Form 10-Q and Form 10-K filed with the U.S. Securities and Exchange Commission for the applicable periods for a GAAP to non-GAAP reconciliation. FTE stands for fully taxable-equivalent basis 4


Business Highlights BPPR Business Metrics $ in millions, except ratios Q4 2023 Q3 2023 Change Q4 2022 BPPR: Loans Held in Portfolio $ 24,478 $ 23,729 $ 749 $ 22,512 • Loans increased by $749 million QoQ across all business P.R. Government Deposits 18,068 17,750 318 15,833 segments: Total Deposits 53,133 53,839 (706) 53,178 ▪ Commercial loans by $511 million Borrowings 105 108 (3) 109 ▪ Mortgage loans by $103 million Net Interest Margin 3.19% 3.14% 0.05% 3.26% ▪ Auto loans and leases by $61 million Total Deposit Cost 1.79% 1.68% 0.11% 0.83% ▪ Credit cards portfolio by $58 million • Deposits decreased by $706 million from Q3 2023, driven by BPPR Customer Engagement commercial clients • NIM increased by 5 bps to 3.19% Q4 2023 Q3 2023 Change Q4 2022 • Total cost of deposits increased 11 bps to 1.79% in Q4 2023 Customers (in thousands) 2,012 2 ,009 3 1 ,978 1 Active Online Users 54% 54% 0% 54% • Total customers surpassed two million in 2023 Deposits Captured Through Earnings Digital Channels 62% 62% 0% 63% Popular Bank Popular Bank: $ in millions, except ratios Q4 2023 Q3 2023 Change Q4 2022 Loans Held in Portfolio $ 10,554 $ 10,267 $ 287 $ 9,531 • Loans increased $287 million QoQ, mainly commercial and Total Deposits 11,271 10,302 969 8,666 construction loans Borrowings 381 398 ( 17) 794 • Deposits increased $969 million in the quarter driven by an Net Interest Margin 2.72% 2.90% (0.18%) 3.55% increase in deposits gathered through the Popular Direct online Total Deposit Cost 3.17% 2.84% 0.33% 1.34% channel • Total deposit cost increased 33 bps to 3.17%. 1 Customers who have logged on to Popular’s web and/or mobile platform in the past 30 days 5


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Net Interest Margin Dynamics 1 Total Loans and Deposits ($ in billions) $80 52% 54% 55% 52% 53% • Net interest margin of 3.08%; FTE net interest $70 margin of 3.26%, an increase of 2 bps $60 $64 $63 $64 $61 $61 • Money market and investment securities are 48% $50 of earning assets $40 $35 $30 $34 $33 $32 • FTE loan yield increased 17 bps QoQ to 7.41% $32 $20 • Total deposit cost increased 16 bps QoQ to 2.00% $10 $- Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Total Loans Total Deposits Loans to Deposits 1 Loan Yields, Deposit Cost and NIM (FTE) Money Market and Investment Securities ($ in billions) 7.41 7.24 7.15 6.97 50% 6.70 50% 51% 48% 48% $9 $6 3% $6 $6 $7 3.64 3.46 3.29 3.24 3.26 2.96% 3% 2.95% 2.00 3% 1.84 $27 $26 1.57 $26 $26 $25 1.28 0.89 3% 2.63% 2.70% 2.65% 3% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 3% Investment Securities Money Market and Investments Yield (FTE) Loan Yield (FTE) Total Deposit Cost Net Interest Margin (FTE) Money Market Investments Money Market and Investments to Earning Assets 2% 7 ¹ Balances are as of end of period


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NCOs and Allowance for Credit Losses NCOs and NCO-to-Loan Ratio ($ in millions) Q4 2023 vs Q3 2023 Variances: 0.66% $57 • NCOs amounted to $57 million, increased by $24 million $33 $33 $31 ▪ BPPR’s NCOs at $52 million, increased by $24 $26 million: $18 $4 $6 ▪ Commercial: NCOs of $4 million, a ($8) variance of $14 million, due to an $11 (0.11%) million recovery in Q3 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 NCO NCO% ▪ Consumer: higher by $11 million ▪ Popular Bank’s NCOs at $5 million, Accounting Reserve Reserve decreased by $2 million, driven by the Guidance Build Build ACL Balance Balance Balance ACL/Loan ($ in millions) 12/31/22 Adjustment (Release) 09/30/23 (Release) 12/31/23 12/31/23 commercial portfolio Commercial $ 240 $ (2) $ 7 $ 245 $ 26 $ 271 1.45% ▪ NCO ratio at 0.66% vs. 0.39% Mortgage 135 (36) (8) 92 (9) 83 1.08% • ACL at $729 million, increased by $18 million Leases 21 (0) (10) 10 (0) 10 0.56% Consumer: - • ACL-to-Loans ratio at 2.08% vs. 2.09% Credit Cards 59 - 14 73 8 80 7.09% • ACL-to-NPLs at 204% vs. 197% Personal Loans 121 (8) 16 129 (9) 120 5.96% Auto 125 (0) 30 155 2 158 4.31% Other 20 - (12) 7 (0) 7 4.45% Total Consumer 325 (8) 47 364 1 365 5.24% Total ACL $ 720 $ (46) $ 36 $ 711 $ 18 $ 729 2.08% Dollars in millions Differences due to rounding 11


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