Popular, Inc. (NASDAQ:BPOP) Q4 2022 Earnings Conference Call January 25, 2023 10:00 AM ET

Company Participants

Paul Cardillo - Investor Relations Officer

Ignacio Alvarez - Chief Executive Officer

Javier Ferrer - Chief Operating Officer

Carlos Vazquez - Chief Financial Officer

Lidio Soriano - Chief Risk Officer

Conference Call Participants

Timur Braziler - Wells Fargo Securities

Alex Twerdahl - Piper Sandler

Kelly Motta - KBW

Gerard Cassidy - RBC

Operator

Hello and welcome to today's Popular Fourth Quarter 2022 Earnings Call. My name is Bailey, and I will be the moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to our host, Paul Cardillo, Investor Relations Officer at Popular. Please go ahead.

Paul Cardillo

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

Before we begin, 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 web page at popular.com.

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

Ignacio Alvarez

Good morning, and thank you for joining the call. Our results for the quarter in the full year were solid and reflect the strength of our franchise. Our record annual net income of $1.1 billion reflects an increase of $168 million above our 2021 annual net income of $935 million. The increase was largely driven by the benefit of the Evertec Transactions, and the partial reversal of the DTA valuation allowance. The results also reflect higher net interest income, partially offset by higher provision expense and higher operating expenses. The 2021 results included a provision benefit of $193 million.

During the summer, we've completed the acquisition of key customer facing channels from Evertec, and also made important changes to our contractual relationship with them. Leveraging these transactions, we have embarked on a broad based multiyear technological and business process transformation. The needs and expectations of our clients as well as the competitive landscape has evolved, requiring us to make important investments in our technological infrastructure and adopt more agile practices.