BPPR reports $521M in net interest income in Q1, up 12.8% Y-O-Y
Higher yields and lower costs lift margins, while Puerto Rico deposits rise by $434 million.
Banco Popular de Puerto Rico (BPPR), the main subsidiary of Popular Inc., began the year reporting net interest income of $521 million for the first quarter of 2025. This reflects a $14.9 million increase from the previous quarter, attributed to improved investment yields and reduced deposit costs.
The bank’s net interest margin rose 7 basis points to 3.63%, supported by “higher interest income from investments in securities by $14.5 million or 13 basis points mainly due to higher reinvestment of U.S. Treasury securities at higher yields,” according to the financial disclosure.
Deposit costs dropped 12 basis points to 1.55%, driven by “a $13.3 million decrease in the cost of market-linked Puerto Rico public interest-bearing deposits,” the disclosure reads.
“I’m pleased with our strong financial performance in the first quarter. We increased our net interest income, grew loans and deposits, maintained strong credit metrics, and expanded our customer base,” said CEO Ignacio Álvarez, who will step down on June 30 after eight years.
“I’m particularly pleased with our results in Puerto Rico, excluding public deposits, where deposits increased by $434 million, demonstrating the strength of our unique retail franchise.”
Despite an $8.3 million decline in loan portfolio interest income, higher average volumes in mortgage and auto lending contributed positively. A $6 million drop in money market income slightly offset the overall gains.
Credit quality improved. Nonperforming loans dropped by $30.1 million, with declines in auto, mortgage and commercial loans.
“In the BPPR segment, [net charge-offs (NCOs)] decreased by $15.5 million quarter-over-quarter, mainly driven by lower consumer NCOs by $10.9 million,” the report stated. The allowance for credit losses rose by $5.6 million, reflecting a shift toward more conservative economic assumptions.
At the corporate level, Popular Inc. reported net income of $177.5 million and earnings per share of $2.56, up from $2.51 in the fourth quarter of 2024. Net interest income rose to $605.6 million, and the net interest margin climbed to 3.4%, up from 3.35%. On a taxable-equivalent basis, net interest income reached $663.9 million, with a margin of 3.73%.
Popular reported that average deposit balances increased by $1.6 billion quarter-over-quarter, supported by growth in NOW and money market accounts. As of March 31, total deposits stood at $65.8 billion, while loans held in portfolio reached $37.3 billion, up by $146.4 million.
Operating expenses for the corporation rose slightly to $471 million, mainly due to personnel and technology-related costs.
Popular’s capital position remained solid, with a Common Equity Tier 1 ratio of 16.11%. Tangible book value per share rose by $3.86 to $72.02. During the quarter, the corporation repurchased 1.27 million shares of common stock for $122.3 million.
