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
Executive
Lidio V. Soriano

charge-off from our taxi medallion portfolio, which has a carrying value of $32.5 million net of reserves. The allowance for loan losses decreased by $7 million from the previous quarter to $544 million, mainly due to a decrease of $8 million in Puerto Rico, offset in part by an increase of $1 million in the US.

The Puerto Rico decrease was primarily attributed to improvement in the loss trends in the mortgage portfolio. The ratio of allowance for loan losses to loans held in portfolio was 2.01% in the second quarter compared to 2.07% in the previous quarter. The ratio of the allowance for loan losses to NPLs held in portfolio stood at 96.3% compared to 93.9% in the previous quarter.

The provision for loan losses remained essentially flat at $40 million, compared to the prior quarter. In Puerto Rico, the provision decreased by $2 million, while in the US, the provision increased by $1 million. To summarize, credit quality results for the second quarter were strong with improvements across all metrics in Puerto Rico and continued stability in the US.

With that, I would like to turn the call over to Ignacio for his concluding remarks. Thank you.

Executive
Ignacio Alvarez

Thank you. Lidio and Carlos for your updates. Our robust second quarter results give us momentum as we enter the second half of the year. Our Puerto Rico franchise is extraordinary. We've consistently grown our retail and commercial customer base and serve nearly 1.8 million customers. However, we do not take our leadership position for granted, and we remain focused on enhancing our customers' experience across all channels. Our unmatched branch network is enhanced by our innovative digital solutions. Approximately 873,000 of our clients are active online and 78% of these clients use mobile devices to interact with us. In June of this year 51% of our deposit transactions in Puerto Rico were processed to smart ATMs and mobile devices, a figure that has been growing consistently. The breadth and depth of our retail and commercial product offerings in Puerto Rico, allow us to meet the evolving banking needs of our customers.

Our operation in the mainland United States, while more focused, provides a diversification to our footprint. We have a strong commercial lending unit that is comforted by two specialized national lending businesses, Condo association banking and healthcare.Our investments in EVERTEC and BHD Leon continue to contribute to earnings and represent unrecognized investment value. We are energized by our results and remain focused on enhancing shareholder value.

We are now ready to answer your questions.