BPOP - Earnings call transcript Q3 2021

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Operator

Hello, everyone, and welcome to the Popular, Inc.

Third Quarter 2021 Earnings Call. My name is Bethany, and I'll be coordinating this call for you today. [Operator Instructions] I will now hand the call over to your host, Paul Cardillo, Investor Relations Officer at Popular. Over to you, Paul.

Paul Cardillo

you we us issues. dealt thank your also and as patience with morning, for and joining for Good some connectivity us and today our call on CEO, With Alvarez; Ignacio is CFO, CRO, our our Vázquez; Lidio Soriano. Carlos the the results your review and quarter for will then third They our answer questions. will our during be the Q&A members of also Other session. management team available

subject that materially Before earnings detailed in to are results expectations we may call, filings. that on we today's current Factors uncertainties. start, SEC I and forward-looking within and to our management's forward-looking risks would are are statements that like and actual today's on to forth release set are from remind you cause statements based make press could these differ

SEC popular.com. to page our You may filings Ignacio find on I call over now today's at turn our the CEO, Alvarez. our web press will and release

Ignacio Alvarez

joining and thank you morning Good call. for the

The third income strong million. net another $XXX in achieved we one which quarter was of

economic of results activity, sources and Our strength Please the prudent our X. risk stimulus. turn of also federal unprecedented diversified revenue management. reflect reflect by driven Slide They to the continued in levels

the expenses. Our million interest of net benefit than and than quarter the same quarter. income Net in $XX provision for by second the with million in offset million variance of higher second income $XX partially quarterly was quarter was sequential by XXXX. higher higher The the driven higher $XXX a line losses, credit was

office non-interest Our due primarily the X income increased buildings. of to sale corporate

be the with low net volume quarter continue in charge-offs. increase. and quality the also in levels of contributed card period to the higher credit Credit transactions NPLs of Our to trends lower debit and favorable

Please of September completed actions $XXX Slide our capital is to we to On X, XX, currently national These our continued trust we shareholders. evidence redemption niche to previously outstanding. our $XXX Capital business. strength of the on and repurchase XX, capital X.X% to $XXX transaction preferred turn million position, announced equipment During with our the complement health our October while which allows of leasing business which program. September to a our the And we securities to KX million return expand share continue the announced quarter, return in capital On accelerated This X. will existing assets. Group, us care health acquired shareholders care franchise. invest lending in million we we

Our year-to-date nearly channels retail Adoption Active customers. continues in of XXXX. the more Banco by and continues unique captured by since third to users our Puerto quarter grown March platform million customer We exceeded customers strong. be channels. million base and X.X grow our deposits in among XX% digital Rico to in increasing Mi the of on XX,XXX XX,XXX through digital XX% have to quarter our by reach X.X third than

As expected, have of by in than Within have levels. year quarter pre-pandemic slightly at higher Auto Popular's and originations compared but sales clientele, of loan to ago. to remained lease increasing well Sales have also trends levels, third card value strong. higher the same lower pre-pandemic dollar X% above a are and XX% these debit extremely quarter adjusted than the XXXX. higher, credit remain the trend continued significantly BPPR

versus the in compared which slightly of they to were XXXX. reopening quarter they the quarter While economy, the had decreased third third in higher XXXX, reflected the XX%

strength housing in see market. the to continued have We

the the In XX% and Puerto current in activity mortgage trends compared of they decreased to increased customer environment compared originations update value third of by dollar XXXX. macro third by the the robust. for While remained Please turn X% an quarter, of Slide Rico. quarter quarter third to the BPPR to X XXXX, at on business

were that recent front, we quarters, in COVID-related vaccination say solid According eliminated. restrictions We are either the the relaxed now Puerto of on momentum Rico we are been to XX -- see old we to make continued population have have website continue territory. progress has dose state least most the to in proud to or vaccinated one the strong place as or that any have vaccine. over XX% of of XX% received CDC the vaccination highest the years and rate been U.S. fully at have of

and to Traffic in auto and XX% the continue hurricanes. August XX,XXX XX% sales With somewhat XXXX remained destination to through strong. New limited, demand the the passenger are XX% continued island month was was than and X% demand since during consumer employment from In residents. in the somewhat nonfarm the and improve. the compared for a ship have units sixth December remained by XXXX, to XXXX. trips below source increased record month still ago September the has Employment passenger first compared of Puerto XXX period Cruise quarter. fourth also traffic levels According higher remainder XXXX Hotel quarter. be continued August tourism of This with Cement Rico comparable when has a have reflect more tourism company, consecutive sector rebuilding seen surpassed of travel than still were year comparable XXXX XXX% has recommenced September, was comparable for improved, to of to to a the following occupancy Rico and proper figures the strong anticipated now up the the of pace up In the XXXX continues same than XXXX of August, same compared in Year-to-date auto arrivals XXXX. in in are was levels XXXX higher sales has that much the world in economy. in levels. and for months levels. Mainland traffic to XXXX Puerto for consecutive period period than to month. local level third by prepandemic have a last exceeded were exceeded strength the but the has sales doubled sales Activity sold the on more are Year-to-date season. since have August. up be the same and Total Rico in are in traffic strong X sales rates the is through XXXX Airport Year-to-date, year hospitality X% XXXX. XXXX. Puerto

results prospects are with for the third to continue be about the We the pleased quarter and the of future. optimistic

how I our the impact call financial to detail we more on evolving will health Carlos now to attentive However, the turn will for results. remain situation the may economy. over

Carlos Vázquez

morning. Ignacio. Thank you, Good X. Please to turn Slide

million the of in information million held variances additional from earnings a in matters. Higher higher method, to plus earnings increases $X a and a Today's OREO quarter. with increased million by for including $X extraordinary Total X million million the and usual, under transactions provided the in credit than plus million $XXX along Net second smaller associated $XXX quarter Non-interest gain million employee of the mostly $X variances. costs This This the $X by leaseback of the was from on increases, quarter. $XX due positive promotion. lower $X income other drove driven press $XX in came details expenses fees from $XX $XX million related recorded higher deck. million third million primarily benefit expenses. release increase of the operating QX. quarter like QX. from was items million, were with annual increase million. slide appendix the for increase compensation benefit second deposit provision the categories gain quarter, professional sale million investments credit-related increase the of equity $X million net increase million income higher was to merit by in Around by in second As the $XX cost Lidio corporate to buildings an FDIC card was by also from a an is higher The smaller QX. $XXX expand business debit interest $X will and other

our fourth improve is number. between for consistent $XXX with we quarter, will XXXX and million. average million this to possible, For $XXX expect the This to and if we be quarterly million in between million. $XXX be to expenses on expenses guidance try $XXX Obviously,

for approximately increase million the a million, to a The lower lower from decreased to of of Slide Year-to-date, turn equivalent the equivalent quarter. in was X.XX%, rate to was In Deposits recognized basis outcome. basis lower in yields, by XX the partially in of XXXX. QX to taxable yielded balances income by of loans margin points. $X.X from QX. is quarter $X for we the and a loans X.XX% The PPP was tax higher to XX%, On the decrease NIM first margin our due $XX the exempt $X.X income by BPPR XX%. recognize lower contributed of interest as this NII a half X.XX% PPP-related $XX on by Net commercial the taxable securities. and result and basis to rate last also last approximately decrease billion interest The money quarter, remaining million was offset this points Total expect this in $XX quarter. fees XX government second higher Puerto was income retail we was by due same of on accelerated income to and $XXX basis million portion in half unamortized tax X costs a million for deposit of increased than remainder and compared Please effective XX% deposits. X. fee recognition primary $X.X basis we investment million by in deposits in QX, higher the lower effective compared A portfolio million, which a to program. second quarter. have Rico loan to Our PPP income XX.X% in increase QX, investment Most $X.X be lower was quarter. to interest $XX growth low-yielding yield driver portfolio market in of million higher in forgiveness. between at points mix of million. income million with of $XXX and which the the due expect grew of million $XXX

As of were an the of increase $XX Rico billion, quarter. from Puerto the last deposits quarter, million of roughly end public $XXX third

restructuring return to of We and sector continue driven the public current debt by time the down to to debt public balances deposit service. expect over come

loan by to balances was loans in PPP our ending decrease quarter. This $XXX $XXX runoff million million a a in and portfolio. decreased $XXX the million decline due mortgage in Our residential

the grew by U.S., the in million, in driven by Rico. Puerto and higher resulting driven from commercial part do onto by were in economic outpace impact commercial the increases materialize of These $XXX auto bases X. balances growth of loan offset loan Please Excluding not loans. to year lease growth lower PPP balances prepayments. demand should to expected PPP loan of high turn We expect when forgiveness middle next the Slide by overall

X previously XX Our On price total, in ratio was completed Tier in announced of points repurchased September from common QX income. purchase QX, basis to at million and increase an net of primarily an approximately XX.X%, corporation average the due X, ASR, equity the shares $XX.XX. X.X

Tangible of Securities $XXX Preferred Trust last executed a This Additionally, redemption increase gains our accumulated which by X.X% on QX, offset by share balance we million the of month, and outstanding annual $X.XX driven $XX $XX.XX. investments. net result by quarterly interest million. in to in announced expense reduced be will lower of our increased primarily income unrealized book to and value dividends partially per was

million Our was trust. dividend repurchased for per share we common And a October third $XXX to $XXX in the XXXX, cash. health equipment return care XX, $X.XX million acquired share, summary, increase on in have during $X.XX stock, we in tangible in quarterly In leasing million by equity business $XXX per our quarter. national high-cost redeemed on XX.X%

normal to have should With Popular's We capital announcement actions, Lidio. no of that, in capital result I returned our XXXX the schedule, an which January call our to also XXXX later over webcast. than turn planning

Lidio Soriano

Thank you, good and morning. Carlos,

from non-performing NPL to commercial credit improving economic assets the metrics $XXX discuss of in low a $XX continued $X NPL NPLs mainly lower NPL the metrics. costs, Compared million a quarter, to Please driven due $X discuss turn the the coupled mainly with inflow sale, this in million, strong million. portfolio decreased exhibit estate for the credit driven by number of included XX coupled and of mortgage turn to in offset Please by by with In driven inflows. $X of improvements commercial inflows NPLs mainly In $XX Non-performing a due payoff. inflows. corporation NPLs NPLs resulting was quarter In third profile part million an by million mostly the to quarter, loan million X by million, the owned. decrease inflows, X.X% decreased Slide million, $XX environment. was the compared Puerto total the million, credit ratio quality lower million second credit decreased $X charge-offs to quarter. Slide NPL million by by NPLs decrease by portfolio. to lower loans to consumer decrease with commercial in commercial During loan of prior by NPLs of increase a to Puerto inflows and taken in decreased mortgage for held to an decrease million $XX the held $XX U.S., mainly other due quarter, $XX to of Rico, to million, excluding and prior a related This lower NPL of U.S., $X $XX X.X% real sale to in of sales. payments due was relationship, $XX collateral-dependent in The on coupled $X inflows. decrease of loans, decreased received in to in continued loan loans Rico after million held The to million

by commercial previous comparison net Turning in loans XX amounted or a in quarter-over-quarter net basis recovery $XX.X Rico. an to impacted $X.X million quarter The was basis number portfolio annualized points XX; negative average charge-offs or of million the relationship of to the compared of recovery held Slide X million $X.X prior a in the points in Puerto quarter. to

Net be significantly the continue pre-pandemic have net Excluding this, been points charge-offs XX charge-off flat ratio points. X basis will below quarter-over-quarter, to basis levels. versus

will for X.X% credit driven the prior Our for from losses in allowance $XXX losses portfolio in mainly The million by to ratio credit held loans $XX slide. and million we X.XX% the the improvements decreased to quality scenarios credit allowance following discuss decreased to in by economic in or as X.XX% quarter. of

loans, to Slide is details to was quarter. held number guarantee in turn losses loans allowance allowance NPLs mortgage XXX%, credit X.XX%. for for credit in the PPP this discuss the XX the and on range prior variance portfolio Excluding ratio Please of The drivers to of flat losses. to

well when quarter. of qualitative credit mentioned, decreased driven losses $XX economic compared previous as by and to mix. were and as previously we quality the allowance by to million reserves portfolio As the Variances product changes outlook

While given is a also strong we the recovery and evident strains federal ability government's virus around of uncertainties consider outcomes Puerto to available new more impact systems. Rico the the adverse utilize

we scenario pessimistic assign a scenario. by more to to the baseline the result, SX highest the continue As followed probability

quarter-over-quarter. baseline the largest of Our with GDP XXXX, variables, macroeconomic forecast current flat rate economic uses the the for being number unemployment growth are and drivers. The rate and expectations GDP scenario a expectations unemployment

allowance for in $XX However, Moody's to contributed Analytics Puerto variables losses. revisions credit a the income-related decrease to Rico, certain million in

$XX in the ACL net fluctuations to significantly volume below by credit environment levels. Portfolio caused outlook in During qualitative the prompted metrics $XX with U.S. decrease Total the quality and improved our improvements quarter, reserve commercial Rico in changes, To economic third portfolio auto the Puerto changes prepandemic credit exhibited summarize, charge-off CRE during loan include our million. and from particularly quarter, million by the we the loan mix. activity portfolio. portfolio the for and portfolio released quality,

turn would concluding pandemic-related in over to will and I of Ignacio economic like portfolios With for the call the his We changes the remarks. to monitor continue exposure outlook. to the to that, risk

Ignacio Alvarez

for Lidio your you, Carlos, Thank updates. and

continued we the deposit date Driven improved earnings, have outlook. execution credit to successful the XXXX solid record about by capital growth and optimistic levels, been our quality, of are in results actions, customer strong. Our economic

a to activity such has In a are the addition factors A to combined flowing federal which a hurricane but The faster and consumer factor. should level these also at of the yet economic start be of to still recovery entire to amount of from COVID, years, that situation in continued certainly now related funds the together expect pace. stimulus we last unprecedented in have will spending will significant impact Puerto considerable Rico in of the debt not generate to for offices Puerto least, we'll be positive successful be again. coming positioned activity. many well forward having Rico looking we benefit and sectors team resolution And our dispersed,

protocols earlier and Given and that were conditions markets have facilities, the health office, sound our returned general safety still we supervisors our at progress vaccination Managers and process, our early workforce in in begun to this will November. remainder of in return bring our improvement working to colleagues remotely. the back a the month in

We XXXX. these solid thus been Despite of are year challenges, entering results the this home with great all a far significant and accomplishments. stretch has

is energized to and the strong ending a team Our committed on year footing.

questions. We your are answer now ready to

Operator

The UBS. [Operator Brock Instructions] Vandervliet question Brock, first your comes line is open. of from

Brock Vandervliet

Thanks queue. very I did to in get the much. manage

you just which growth is over PPP If about to should think next core expectations, terms of of the overall we take loan overcome quarters? in paydown loan already going the understand while you I loan start core growth could a But outlined. growth headwinds, couple to how

Ignacio Alvarez

Ignacio. this Well, is

I [ph]. loan by down sector quarters. at mean the next besides book bit have PPP, large think we got paying in little you a U.S. about look mortgage over the I which sector to XXX a is

Carlos Vázquez

Puerto Rico, yes.

Ignacio Alvarez

Rico. Puerto In

we auto also. and I strong So see commercial continued -- but very in growth looks to the expect think sector loan

think a I lot auto think we the the to his the growth expect Puerto the overall, we in in half mentioned say, as Overall, portfolio, we probably this remarks want sooner. see of overall those the to second to won't I we do sectors the see from in had to In like up pay U.S. grow sectors coming look you'll at downs prepared year. that? that you of balance, be And especially. construction we next net to Rico add But continue U.S., both and we Carlo loan So are you when see expect commercial quarter, and until growth. significant that commercial, -- loan Carlos,

Carlos Vázquez

Yes. pretty loans last mean Brock. pleased that quarter this PPP, I quarter, ex No, our and we're both grew.

in about on quarter, we just the that our commentary remaining our loans. growth in pipe resi is forgiven our similar portfolio, fourth net of gets and the portfolio of if half runoff roughly fact So $X.X billion have

at next year, the the And runs we half first minus other year. portfolio $XXX of run the in our which $XXX for change, first million So forgiven minus then next million expect doesn't half is mortgage start already. off of at started then we of half PPP and we

So what had general, that ex loan and the last leads we're that growth. is net happy quarter, in this -- math. quarter we pretty we both But PPP,

Brock Vandervliet

acquisition, Okay. And leasing purchase business, given I just certainly bought but separately on you the not material a large capital; terribly that price. noticed

You're the about look continuing reserves How given credit should ample, to capital build capital contours. think allocation? we

Carlos Vázquez

in We in so. mean, done touch way address to future. be which -- all pull in or all a by will to in buttons This we operate have to is direction continue the continue levers we our I plan the what Again, our webcast which of about capital middle successfully But to we now. think to the trying peers some the of the in ways want achieve have you or it. can to capital that for levels our U.S. move January. the which levers, over And cushion. to to that in pull will been think levels different we are time all hopeful use. capital have plus we the we we hopefully way keep general, of given put all we I We're capital, want the saw do, have an our year, we'll probably manage to the are announcement 'XX

Brock Vandervliet

in queue. Okay, jump back I'll thanks all. the

Ignacio Alvarez

Thank you, Brock.

Operator

open. Sandler. your Twerdahl from comes line is Alex, Piper question next Our Alex of

Alex Twerdahl

me? Can hear morning, guys. you Good

Ignacio Alvarez

Good morning. Yes.

Alex Twerdahl

But capabilities of you terms more Sorry small that bit pretty kind how a bit about into maybe fit price, just expand certainly I this to assets purchase this just a seems And of more model? potatoes what net of actually it's in being acquired. going the a that. wanted little was looking loan off hoping at Initially, is me it good acquisition. I to leads to start engine. the origination of kind the the KX on suspicion on and this platform of little overall sort could has that sort generating like

Ignacio Alvarez

exactly national tell businesses. that think numbers originations, for but states, businesses we in before, we're the Well, complement is a well complements our -- really looking lending care business. which can in of fits this I And don't when we've leasing have niche that said projection can strategically and our we I equipment you existing the look it's health will care company, health the

into but that they we like our business PAB care it the the we've can create are way that done we vertical. behind try we to make a care a think with important the people think health our platform and have KX, So think with we business, health to we and in same really national we good that hope synergies

Alex Twerdahl

these to Can you of more little what and with? of talk cash type we loans the on expect replace are that yields of bit kind what sort a

Ignacio Alvarez

leases medical you in of put health basically, that The long finance equipment machines like centers. mostly term, care

-- or So machines x-ray just generally that? types other what's care health of

Carlos Vázquez

MRIs.

Ignacio Alvarez

myself sorry. I'm -- exactly MRIs. don't on that kind yield. I thing. the MRI as of dating a have I'm

Carlos Vázquez

mean income when millions we call all the so high single-digit everything acquisition Yes, to yield it I the to out normalizes, about comes it, Alex, net 'XX, don't have every and either, expect I but noise hopefully number contribute year -- grow. a on and in

only does also not It care important add health of for Ignacio is of As it one more clients. competitive. said, our makes product beauty this offering existing part health the an that care

be this of benefit the actually part subsidiary be So part it the itself, will acquisition of in not will Popular Bank. of

Alex Twerdahl

relatively Do one when regulatory Okay. like And a imagine role small, but go in does then do it just a sort you and sort process the you this same standpoint. this a do in overall is capital of -- and have regulatory allocation of terms from sort buyback play the process, process? the Do I you of the to the deal the same through with the the have dividend? of as you

Ignacio Alvarez

system complex. The quite regulatory is

but call it's quite complex. not Let's it Byzantine

you So different structures. to In case, a we how how it an DFS. New to through through do only go the depends regulatory have we're This subsidiary depending you Bank. had since acquisition, effect, Popular it doing go through of York

a It move So simple Obviously, really I -- going plan. don't to we're -- it was the everything straightforward for the it we the think the looking way at process. at relatively think needle I for our other on would capital one Fed but they be enough do, when plan. material the example, it's don't or look capital

Alex Twerdahl

Okay. the And on another bankruptcy. question then just

a Can and close getting understand they're seems to Board have pensions. process? seems the the but of and some boil end of are wanted alluded for of just the gotten that sort me government they through think like of help kind between bondholders, it for pretty of kind what I sight. little with bit to headlines, sometimes the to where deal us It's may investors it exactly being like in You hard the within a lot you and we a the

Ignacio Alvarez

you're to critical Well, stage we're up date. Yes. in a as actually

regarding went a off sign with controversy existing would regarding there and also X at on And back going the negotiations the an principle legislative adjustment on appears had that be was to had UPR. in back and any was couple They the board there executive the adjustment. rounds UPR. public and -- in of both deal would for of the Representatives support fiscal the present the legislation with to voted and House pensions. that amount cuts they budgeted pension support to million to they branch of going forth that that Yesterday, $XXX university, branch a plan cuts the forth agreement to be and to the the plan of basically and that of amounts So weren't said least

new existing the One that the plan to whether bonds, bonds not. there's of or the adjustment technical debate to issues that an exchange for go -- has a contemplates of of and is bonds legislature

it. regarding ironclad. the They House that a short approved still So pension convinced language no are not some senators in are the the Senate. yesterday, of the Apparently, cuts bit is

close. legislation So waiting the Thursday, Senate. take The very enabling right, signed The the he House and on did said scheduled is Senate pass the think I governor now the we're But on to legislation. up again. you're we're this was

President really, requires it. the usual. The party no so they to plurality, Senate it has Senate Puerto that majority the absolute party in situation an requires very has the So don't a difficult more have it trading because Rico approve is of Senate the a horse but than

go back If hopeful renegotiate hour the we're happen, have the that we'll ninth they and whether so approved Thursday. And this could happen Thursday, to have see. I'm something. wait down to really gets to as on by it Senate. but It happen will doesn't early and as

Alex Twerdahl

just if year. public of bankruptcy -- on be us that you'll the how bankruptcy is deposits. at does that happen Thursday, then remind then of by much end And presumption some point exit the So this the to able

you out somewhere I on billion sits $XX Popular's the $XX said that around directly think sheet to past, that in would balance that billion bankruptcy. related correct? Is flow to

Ignacio Alvarez

best Yes. our That's estimate.

they us the city. but have government the course, other public has institutions exactly. funds, including institutions, funds, including financial of Of public local We hold most are not that told

of likely be considered this -- is court, passed, the but our the the up plan if adjustment the And resolution that by the that's it's yes. to and best be estimate, approve that's or I court disapprove a given don't would the all process to plan of So that's think I not work adjustment. gone disapprove Theoretically, through they it. think could this, result.

out, the So go hopefully, not clear case, relatively soon will soon it the money because year, which down up of I'm cash thereafter in have a we how but will go it's end something payment. will the by

So...

Alex Twerdahl

NIM, Okay. but to it's in help not not guys, And TCE the and correct? -- I'm to terms of the language financial think remembering Is you impact certainly NII, is I material that ROA. if the correctly, would

Carlos Vázquez

-- to our rate very not That environment, would In NII. margin. existing will is -- it to is this the significant correct. interest of And material be always it level in it

Our by has this basically for four sole factor driven been margin or the five last quarters.

core the will to been our than last -- has margin return to more will linked So for it year plus. be business our be

Alex Twerdahl

Thank questions. my you for taking

Carlos Vázquez

you. Thank

Operator

next Gerard, Instructions] Gerard comes from is question RBC. line [Operator of Our open. Cassidy your

Gerard Cassidy

Thank Good Carlos. Ignacio morning, you. and

Ignacio Alvarez

Good morning.

Gerard Cassidy

you may start lower we have granted were give there, Can us Lidio, that next of charge-offs is And the positive at how the long slightly the if off were remain? But folks think we do up. year net some that a can see low in incredibly terms experiencing net normalization up can number from still they very he's Obviously, question low end start than period, creeping levels happen to into they of you sort be what credit. in quarter. charge-offs XXXX? of still I Which to charge-offs in would eventually these will think by this you Maybe had part start bad you industry but low quarter this for prior of the net and the with cycle. on the in

Lidio Soriano

look three, XXX we I mean perspective. between as between in formation, least at that five-year look charge-off to look pandemic, significantly, Popular term, Since at quarter. lower short points early delinquency, I'll mentioned, to XX prior prior you periods, you corridor pandemic, of you case. than the if for points. suggest when you net a over were at the that, my the continue be will basis to the give that When been the basis have the including benefit NPL you

assistant the Rico. of performance we in and and of come upon that that expect going alluded lot it Carlos pace think to a to the Ignacio is to remarks, be prepared dependent to the payroll I economic Puerto

So some if the to happen, agree that we with that level were a bit, but activity time, and I to last continue will little the might point see also things you in of in future. normalize that economic at

Gerard Cassidy

business recently, couple depository your and for Mainland? deals work non-depository and folks Wells acquisitions, a it's opportunities like your you Are similar Ignacio obviously, Carlos, putting or to in guess. somewhere acquisition I a excess their whether back, you the put good. in to Very years you've you're announced a other even automobile other Fargo any capital of work there and to cash the done portfolio this in

Ignacio Alvarez

We traditionally opportunistic to and continue be so. we of been buyers have assets

it bring our was bank and continue like the the and think it will This we to opportunities came I opportunistic. Reliable. great which we right? us like for that has the It well, future near KX people to given acquisition before them. sector, very the of we seemed just unique our nice so kind is opportunities country, bolt-on. We said there and But So we demographics look especially the for complements focus of vertical, and fit are have across. future. a relied And review care doing very to potential is auto those not in health

So at, that businesses. things present when we existing look our acquisitions complement themselves, especially things of

our thought existing So fit I it our strategy We perfectly came it with looked at overall carefully. strategy. hasn't KX think changed. We around.

So we execute.

Gerard Cassidy

Carlos, keep down follow-up, certain Very good. balance want to those of when of But of securities? to organization. draws assets I sheet duration know you maybe when you a deposits as lengthen longer-term into your the need cash cash look those start And you out, just government some filing may you then the excess on the amount think from a do when to

Carlos Vázquez

are starting seem returns investment finally be seem go to be that going rates given up, to to up. Well,

closely to duration We I of there a me -- extend it are to more something get pains XX like Again, looking know, yield that as years at now. X or to you that. have significantly are, $XXX to

Now we're $XXXs. in the

more So becoming it's interesting.

the committee. We investment about this extend ALCO we quarter. portfolio increase $X by billion -- of did this did week. We at job every our is our look this So

there's So do accordingly. think opportunities when selectively it Again, extend willingness to our as we up move we good move to extend. up, will rates

the we So door? a rushing good door are look Yes, Are the right No. taking we now? we at are.

Gerard Cassidy

book you or are just now Some I looking your it? this but growing? to it if do, doing do is good. Very peers you of add then period And know to outlook you rates? and their are a in -- that for swaps this, I of Or apologize, have should

Carlos Vázquez

a swaps No, have book. we don't

Gerard Cassidy

Okay, very good.

Okay, thank you.

Carlos Vázquez

you. Thank

Operator

open. follow-up of Brock, your Brock a is line from UBS. question have Vandervliet We

Brock Vandervliet

Thank you.

for the were quarter. drop of and been level far hard. level. more questions, they should meaningfully? problem Or we think to reserve why we Rico years I this just drop on the that million shouldn't economic back It expect seen consistently of -- and a going are credit look that But Puerto some there seems the kind is with we've charge-offs of down Just trajectory, everyone focuses sort of substantially and Rico, the couldn't go Puerto down structural NPLs, they've in assets that because recession, as $XX NPLs in at structurally What's to see like high pretty away.

Ignacio Alvarez

you Lidio, take to do that? want

Lidio Soriano

Sure. I can try.

Puerto NPLs. is of mortgage-related you longer of little and resolve to maybe when has takes time than some That bit NPLs mix NPLs Rico look in a NPLs. other mostly at -- the Now over type

so maybe going NPLs foreclosures have type you a mortgage to and this of pandemic it and of So the in throughout I actually that thing NPLs structural the other decrease to, have that's because as there the call, take for NPLs in time over -- leads NPLs. -- what longer not to more been you as cycle. mean fast work of the last cycle part lack

is of driving that I we the levels that many think what NPLs So import. is usually higher

Brock Vandervliet

your hiring that on theme. not have difficulty of a be also we pressure, something Is banks number mainland just greater that general it's And Okay. the banking, aware and should out to within just expenses, business? called in expense of unique

Ignacio Alvarez

in In as our inflation situation. from still we to of I against become hiring It's situation much difficult. have Puerto advantage an sectors. the we're mean some are we Puerto There mainland Rico, salary all are Rico Yes. competition get the not you kinds seeing more peers, of pressures. but salary immune has

anticipate will going continue. be that's seen. something everyone to our like can salary we that So We're reviewing wage, minimum as We've some July else in increases made is. you've

in subject is to this but somewhat same trends. the we're -- subject -- we We're have Rico, beneficial Puerto are of position these a So to the trends. same

Brock Vandervliet

Understood.

you follow-ups. the for Okay. Thank

Operator

We in have questions the no further queue.

hand remarks. A for back I'll - the to call Ignacio closing Alvarez So

Ignacio Alvarez

Again, January. thank all look inconvenience forward updating for progress for you we of the at beginning of our I to in everyone, call, apologize joining. and the you, on the

great you Thank very much. week. a have So

Operator

you This concludes Thank today's joining. for conference call.

now disconnect may You lines. your

Popular (BPOP) 20 Oct 212021 Q3 Earnings call transcript