Popular Inc. in San Juan, Puerto Rico, reported better-than-expected first-quarter earnings despite grappling with the higher costs associated with its acquisition of assets from the failed Doral Bank.
The company posted a 13% dip in net income, to $74.8 million, from the same period a year earlier. Earnings per share of 71 cents still exceeded the average estimate of analysts Bloomberg polled by a healthy margin of 18 cents.
One of the particular benefits of the Doral acquisition was the addition of around $2.2 billion in deposits and $1.7 billion in commercial and residential loans. Altogether, the company's assets totaled $35.6 billion at the end of the first quarter, up 8% from the previous quarter but down 3% year-over-year.
The Doral deal also caused a jump in noninterest expenses, which rose 13%, to $312.3 million. Costs associated with the company's reorganization of its mainland division, Banco Popular North America, also contributed to this increase.
The rise in expenses was partially matched, however, by a 20% spike in noninterest income, to $115.2 million. Contributing to this upswing was $4.1 million in income related to the bank's loss-sharing agreements with the Federal Deposit Insurance Corp. program, versus $24.2 million in expenses under the program a year earlier. An increase in mortgage banking income also supported the growth.
Net interest income slipped 2% to $343.2 million, despite the addition of loans via the Doral acquisition. The net interest margin tightened 13 basis points, to 4.57%.