Popular, Inc. (NASDAQ:BPOP) Q3 2023 Earnings Conference Call October 26, 2023 11:00 AM ET

Company Participants

Paul Cardillo - Investor Relations

Ignacio Alvarez - President and CEO

Carlos Vazquez - CFO

Lidio Soriano - CRO

Conference Call Participants

Timur Braziler - Wells Fargo Securities

Brett Rabatin - Hovde Group

Alexander Twerdahl - Piper Sandler

Broderick Preston - UBS

Kelly Motta - KBW

Operator

Hello, and welcome to today's Popular Inc. 3Q Earnings Call. My name is Jordan, and I'll be coordinating your call today. [Operator Instructions]. I'm now going to hand over to Paul Cardillo, Investor Relations Officer of Popular to begin. Paul, 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 CFO, Carlos Vazquez; and our CRO, Lidio Soriano. They will review our results for the third 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 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. We are pleased to report another strong quarter. Net income totaled $137 million, which includes the effect of an after-tax goodwill impairment of $16 million in our U.S.-based equipment leasing subsidiary. Excluding this impact, net income would have been $153 million, $2 million more than the previous quarter. The increase in net income was driven by lower operating expenses and higher net interest income, offset in part by a higher provision for credit losses and higher income taxes.

We grew loan balances by $1 billion during the quarter. BPPR generated loan growth across almost all business segments reflecting the continued strength of the local economy. Popular Bank achieved growth in commercial and construction loans. Year-to-date, loan balances have grown by $2 billion. Our net interest margin decreased seven basis points to 3.07% in the quarter, primarily due to a 27-basis point increase in deposit costs. This was partially offset by higher loan balances and the repricing of loans in a higher interest rate environment. Noninterest income remains solid and continues to benefit from steady customer transactional activity.