Popular Announces Capital Actions

Rhea-AI Summary

Popular, Inc. (NASDAQ: BPOP) has announced significant capital actions, demonstrating its strong financial position. The plans to repurchase up to $500 million of common stock through various methods, including open market transactions and block trades. Additionally, Popular will increase its quarterly common stock dividend from $0.62 to $0.70 per share, effective from the first quarter of 2025, subject to board approval.

These capital actions reflect Popular's robust capital position and its commitment to balancing customer needs with shareholder returns. CEO Ignacio Alvarez emphasized that these moves allow the company to continue serving customers while prudently increasing dividends and returning capital to shareholders. The timing, quantity, and price of stock repurchases will be influenced by market conditions, capital position, financial performance, and regulatory considerations.

Positive

• Announcement of up to $500 million in common stock repurchases
• Increase in quarterly common stock dividend from $0.62 to $0.70 per share
• Strong capital position allowing for both customer service and shareholder returns

Negative

• None.

Insights

Financial Analyst

The announcement from Popular, Inc. regarding the initiation of a $500 million stock repurchase program and an increase in dividends is a significant move that highlights the company's strong financial position. Stock repurchases can often be a signal that a company believes its stock is undervalued. This can lead to an increase in the stock price as the supply of the stock decreases and earnings per share (EPS) potentially increase. Additionally, the dividend increase from $0.62 to $0.70 per share is a clear indication of confidence in sustained or improved profitability. For investors, these actions suggest that the company has surplus capital and a positive outlook on its future cash flows.

Investors should note that while these capital actions are positive, they are also subject to market conditions and other influencing factors, making them somewhat unpredictable. Also, stock repurchases can be altered or stopped without notice, which introduces a level of uncertainty. Overall, these actions indicate financial health and a commitment to delivering shareholder value.

Market Research Analyst

Popular, Inc.'s decision to execute a $500 million stock repurchase program and increase its quarterly dividend is likely to be well-received by the market. These actions are designed to return excess capital to shareholders, which can be particularly appealing in an environment where investors are looking for solid returns on their investments. By reducing the number of shares outstanding, the company may boost its earnings per share (EPS), creating potential for stock price appreciation.

From a market research perspective, these moves might imply that Popular, Inc. is experiencing robust financial health and expects continued growth. This can also attract more conservative investors who favor dividend-paying stocks with potential for capital gains. However, the flexibility of the repurchase program to be modified or terminated can introduce some volatility. Investors must watch for any shifts in market conditions that could impact the execution of these plans.

SAN JUAN, Puerto Rico--(BUSINESS WIRE)-- Popular, Inc. (the “Corporation”) (NASDAQ: BPOP) announced today the following capital actions:

• common stock repurchases of up to $500 million; and
• an increase in the Corporation’s quarterly common stock dividend from $0.62 to $0.70 per share, commencing with the dividend payable in the first quarter of 2025, subject to the approval by the Corporation’s Board of Directors.

The Corporation’s planned common stock repurchases may be executed in open market transactions, privately negotiated transactions, block trades or any other manner determined by the Corporation. The timing, quantity and price of such repurchases will be subject to various factors, including market conditions, the Corporation’s capital position and financial performance, the capital impact of strategic initiatives and regulatory and tax considerations. The common stock repurchase program does not require the Corporation to acquire a specific dollar amount or number of shares and may be modified, suspended or terminated at any time without prior notice.

“The announced capital actions reflect the strength of our capital position, which allows us to continue to serve the needs of our customers, while prudently increasing our dividend and returning capital to our shareholders,” said Ignacio Alvarez, Chief Executive Officer of the Corporation.

About Popular, Inc.

Popular, Inc. (NASDAQ: BPOP) is the leading financial institution in Puerto Rico, by both assets and deposits, and ranks among the top 50 U.S. bank holding companies by assets. Founded in 1893, Banco Popular de Puerto Rico, Popular’s principal subsidiary, provides retail, mortgage and commercial banking services in Puerto Rico and the U.S. Virgin Islands. Popular also offers in Puerto Rico auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. In the mainland United States, Popular provides retail, mortgage and commercial banking services through its New York-chartered banking subsidiary, Popular Bank, which has branches located in New York, New Jersey and Florida.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation those about the Corporation’s business, financial condition, results of operations, plans, objectives and future performance. These statements are not guarantees of future performance, are based on management’s current expectations and, by their nature, involve risks, uncertainties, estimates and assumptions. Potential factors, some of which are beyond the Corporation’s control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. Risks and uncertainties include, without limitation, the effect of competitive and economic factors, and our reaction to those factors, the adequacy of the allowance for loan losses, delinquency trends, market risk and the impact of interest rate changes (including on our cost of deposits), our ability to attract deposits and grow our loan portfolio, capital market conditions, capital adequacy and liquidity, the effect of legal and regulatory proceedings, new regulatory requirements or accounting standards on the Corporation’s financial condition and results of operations, the occurrence of unforeseen or catastrophic events, including extreme weather events, pandemics, man-made disasters or acts of violence or war, as well as actions taken by governmental authorities in response thereto, and the direct and indirect impact of such events on Popular, our customers, service providers and third parties. Other potential factors include Popular’s ability to successfully execute its transformation initiative, including, but not limited to, achieving projected earnings, efficiencies and return on tangible common equity and accurately anticipating costs and expenses associated therewith, imposition of additional or special FDIC assessments, changes to regulatory capital, liquidity and resolution-related requirements applicable to financial institutions in response to recent developments affecting the banking sector and the impact of bank failures or adverse developments at other banks and related negative media coverage of the banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks. All statements contained herein that are not clearly historical in nature, are forward-looking, and the words “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” “project” and similar expressions, and future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, are generally intended to identify forward-looking statements.

More information on the risks and important factors that could affect the Corporation’s future results and financial condition is included in our Annual Report on Form 10-K for the year ended December 31, 2023 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. Our filings are available on the Corporation’s website (www.popular.com) and on the Securities and Exchange Commission website (www.sec.gov). The Corporation assumes no obligation to update or revise any forward-looking statements or information which speak as of their respective dates.

Financial (English): P-EN-FIN

View source version on businesswire.com: https://www.businesswire.com/news/home/20240724256149/en/

Popular, Inc.

Investor Relations:

Paul J. Cardillo, 212-417-6721

Senior Vice President and Investor Relations Officer

pcardillo@popular.com

or

Media Relations:

María Cristina González Noguera, 917-804-5253

Executive Vice President and Chief Communications & Public Affairs Officer

mc.gonzalez@popular.com

Source: Popular, Inc.

FAQ

What capital actions did Popular Inc (NASDAQ: BPOP) announce?

Popular Inc announced two major capital actions: a common stock repurchase program of up to $500 million and an increase in the quarterly common stock dividend from $0.62 to $0.70 per share, starting in Q1 2025.

When will Popular Inc (BPOP) implement the increased dividend?

The increased quarterly dividend of $0.70 per share is set to commence with the dividend payable in the first quarter of 2025, subject to approval by the 's Board of Directors.

How will Popular Inc (BPOP) execute its $500 million stock repurchase program?

Popular Inc may execute the stock repurchases through various methods, including open market transactions, privately negotiated transactions, and block trades. The specific timing, quantity, and price will depend on market conditions and other factors.

What factors will influence Popular Inc's (BPOP) stock repurchase decisions?

Popular Inc's stock repurchase decisions will be influenced by market conditions, the company's capital position, financial performance, the capital impact of strategic initiatives, and regulatory and tax considerations.