Popular, Inc. (NASDAQ:BPOP) Q2 2019 Earnings Conference Call Transcript

Jul 24, 2019 • 11:00 am ET

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Popular, Inc. (NASDAQ:BPOP) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to the Popular Inc Q2 2019 Earnings Conference Call and Webcast. [Operator Instructions]. I would now like to turn the conference over to Mr. Paul Cardillo , Investor Relations Manager of Popular. Please go ahead, sir.

Executive
Mr. Paul Cardillo

Good morning and thank you for joining us on today's call. With us today is our CEO, Ignacio Alvarez our CFO Carlos Vazquez, and our CRO Lidio Soriano. They will review our results for the Second Quarter and then answer your questions. Other members of our management team will also be available during the Q&A session. Before we start, I would like to remind you that on today's call, we may make forward-looking statements that are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements are set forth within today's earnings press release and are detailed in our SEC filings. You may find today's press release and our SEC filings on our webpage at popular.com.

I will now turn the call over to our CEO, Ignacio Alvarez.

Executive
Ignacio Alvarez

Good morning and thank you for joining the call. We had a very strong second quarter and continue to build upon the success achieved in the first quarter. I will address key events for the quarter then give an update on our business and provide some thoughts around the environment in Puerto Rico, Carlos will comment on the quarter's financial results and Lidio will provide an update on credit trends and metrics.

Please turn to Slide 3. We reported quarterly net income of $171 million which is $3 million higher than last quarter's net income. This quarter's results were driven by higher net interest and noninterest income and lower income taxes, partially offset by higher expenses and lower revenues for mortgage banking activities. Net interest income was $5 million higher than in the previous quarter. While this variance was mainly driven by the impact of one more day in the second quarter, our deposit business and lending operation continued to show strength. This was particularly evident in auto and commercial loans.

Additionally, we saw higher volume and yield on our investment portfolio. Credit quality results were solid continuing their positive trend. We saw lower NPL inflows and charge-offs compared to the first quarter. Tangible book Value per share increased by $2.86 to $51.44. Now, I'd like to give an update on some of the metrics we track and comment on the business environment in Puerto Rico. Please turn to Slide 4. With respect to migration trend, the most recently released passenger data from the San Juan airport reflects that net number of people who left the island in the first quarter was approximately 2,000. Excluding the first quarter of 2018, which was substantially impacted by the inflow of people coming back to Puerto Rico, following the hurricane, this figure reflects a significant reduction compared to the first quarters of 2015, '16 and '17 which average out migration of