Popular Inc. in San Juan, Puerto Rico, reported a triple-digit increase in fourth-quarter profit on higher fee and interest income.
The $35.8 billion-asset company said Tuesday that its net income rose 181% from a year earlier to $137.4 million. Adjusted earnings per share of 95 cents beat the average estimate of analysts polled by Bloomberg by 3 cents.
For the full year Popular swung to a profit of $891.6 million from a net loss of $317.2 million in 2014.
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After scaling back its U.S. operations, Popular Inc. plans to focus on niche commercial lending markets, including financing for elder care and assisted living facilities.
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Several Puerto Rican banks are dealing with a sour participation to a major utility on the island. The creditor like the Puerto Rican government is barred from filing for bankruptcy, complicating matters for its lenders.
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First Bancorp, OFG Bancorp and Popular Inc. have been trimming exposure to central government loans in recent years to limit their exposure to a financial crisis. Most still bank the island's municipalities, though they have strict underwriting and collateral to protect their interests.
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The adjusted fourth-quarter results excluded the impact of fair-value adjustments related to Popular's acquisition of the assets of the
Net interest income rose 15% to $294 million after the provision for loan losses. The net interest margin fell 31 basis points to 4.39%.
Total loans improved 4.9% from the fourth quarter of 2014 to $23.1 billion, including $137 million in loans held for sale. Commercial and mortgage lending were the strongest categories.
Noninterest income rose 29% to $132.4 million, thanks in part to higher mortgage banking revenue and lower costs from loss-share agreements with the Federal Deposit Insurance Corp.
Noninterest expenses fell 24% to $305.8 million on lower costs associated with the company's restructuring and other real estate owned.
