Popular, Inc. (NASDAQ:BPOP) Q2 2022 Earnings Conference Call July 28, 2022 11:00 AM ET

Company Participants

Paul Cardillo - Investor Relations Officer

Ignacio Alvarez - Chief Executive Officer

Carlos Vazquez - Chief Financial Officer

Lidio Soriano - Chief Risk Officer

Conference Call Participants

Brett Rabatin - Hovde Group

Timur Braziler - Wells Fargo

Gerard Cassidy - RBC Capital Markets

Alex Twerdahl - Piper Sandler

Kelly Motta - KBW

Operator

Good morning. Thank you for attending today's Popular, Inc. Second Quarter Earnings Call. My name is Francis, and I'll be your moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instructions]

I would now like to pass the conference over to our host, Paul Cardillo, Investor Relations Officer at Popular.

Paul Cardillo

Good morning, and thank you for joining us. With us on the call today is our CEO, Ignacio Alvarez; our CFO, Carlos Vazquez; and our CRO Lidio Soriano. They will review our second quarter results 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.

Ignacio Alvarez

Good morning and thank you for joining the call. The second quarter was another strong one in which we achieved net income of $211 million. Our results reflect the strength of economic activity in our markets, our diversified sources of revenue, and prudent risk management.

Reported net income was in line with the first quarter and $7 million lower than the same quarter of 2021. Compared to the first quarter, second quarter results were characterized by positive variances in net interest income and fee income, which were offset by higher provision for credit losses, operating expenses and tax rate. During the quarter, loan growth was solid and broad base, both geographically and across most loan segments.

Commercial loan growth was particularly healthy during the period at both, Banco Popular and Popular Bank. Our margin in Puerto Rico improved in the second quarter, but continues to be impacted by our asset mix. We are positioned to benefit from higher market rates, although to a lesser extent due to lower asset sensitivity.