Q4 2024 OFG Bancorp Earnings Call
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Madison: Good morning. Thank you for joining OFG Bancorp's conference call. My name is Madison. I will be your operator today. Our speakers are Jose Rafael Fernandez, Chief Executive Officer and Chairman of the Board of Directors.
Speaker Change: Maritza Erezmendi, Chief Financial Officer and Cesar Ortiz, Chief Risk Officer. A presentation accompanies today's remarks. It can be found on the homepage of the OFG website under the fourth quarter 2024 section.
Speaker Change: This call may feature certain forward-looking statements about management's goals, plans, and expectations. These statements are subject to risks and uncertainties outlined in the Risk Factors section of OFG's SEC bylinks.
Speaker Change: Actual results may differ materially from those currently anticipated. We disclaim any obligation to update information disclosed in this call as a result of developments that occur afterwards.
Speaker Change: All lines have been placed on mute to prevent background noise. After the speaker's remarks, there will be a question and answer session. Instructions will be given at that time. I would now like to turn the call over to Mr. Fernndez.
Fernndez: Good morning and thank you for joining us. We are pleased to report our fourth quarter and 2024 results. It was another outstanding quarter and year of performance. Looking at the quarter, earnings per share were up 11.2% year-over-year on a 3.6% increase in total core revenues.
Fernndez: We showed consistent operational growth on our plans, including our digital-first strategy.
Fernndez: We steadily grew our banking market share, digital adoption of our new and upgraded products, services, and self-service tools keeps expanding. Results also benefited from lower taxes, and we bought back about 46 million dollars of common shares in the fourth quarter.
Fernndez: Please turn to page 3 for a summary of our fourth quarter results.
looking at the income statement
Fernndez: We reported earnings per share diluted over $1.09 on total core revenues of $182 million.
Fernndez: Net interest margin was 5.4%, provision was $30.2M, non-interest expenses were $99.7M. This resulted in slightly lower pre-tax income, which was more than offset by reduced year-end taxes.
Pre-provisioned net revenues total $83 million.
Fernndez: Turning to the balance sheet, total assets were $11.5 billion, up 1.4% from a year ago.
Fernndez: Customer deposits were $9.4 billion, loans held for investment totaled $7.8 billion,
Fernndez: New loan production was a solid $609 million, investments were $2.7 billion of 1% from a year ago and 4% from the last quarter, and cash at $591.1 million was down 13% from last quarter.
Fernndez: Looking at capital, the CET1 ratio was 14.26%, and we bought back $46 million in stock. That leaves $29.7 million remaining on our buyback authorization as of December 31, 2024.
Fernndez: Please turn to page 4 for a summary of our full year results.
Fernndez: Earnings per share of $4.23 increased 10.4% year-over-year on a 3.9% increase in total core revenues for a total of $710 million.
Fernndez: Net interest margin was 5.43%, provision was $82 million, non-interest expense total $376 million, and pre-provision net revenues was $336 million.
Fernndez: Capital management played a big role. Even with Durbin taking effect mid-year, we were able to increase average interest-earning assets by 11.8% year-over-year.
Fernndez: In addition, we acquired the servicing rights to a $1.7 billion Puerto Rico residential mortgage loan portfolio.
Fernndez: We bought back a total of 1.8 million shares and we increased the quarterly dividend 14% to $0.25 per quarter or $1 per share annually.
Fernndez: Puerto Rico's economy continues to do well with high levels of business activity and employment. We concluded our 60th year in business in excellent position, fulfilling our purpose of bringing progress to all our stakeholders.
Fernndez: Thanks to all our team members for always being more than ready to help our clients and customers today and tomorrow.
Please turn to page 5.
Fernndez: We're really building some real muscle with our digital first strategy.
We're all made through our digital...
and or self-service channels.
Fernndez: Over the last year and a half, we have introduced or relaunched four major new products and services.
Fernndez: Oriental Servicing Portal was introduced mid-2023. By the end of this of December of last year, a third of all retail clients were using it.
Fernndez: There are more details first on the pipeline coming in this year. Now here is Maritza to go over the financials in more detail.
Fernndez, Maritza Diaz
Speaker Change: Thank you, Jose. Please turn to page 6 to review our financial highlights. Starting with the components of core revenues, total interest income was $190 million, up $1.1 million from the third quarter.
Speaker Change: This increase mainly reflects higher balances and higher yields on investment securities, higher loan balances, and higher interest rates.
Speaker Change: $700,000 from repayment of two commercial loans and reduced interest income from cash.
Speaker Change: Total not interest expense was $41 million, slightly down from the third quarter. The decrease reflects slightly lower average balances and cost of core deposits, and higher average balances of borrowings and brokerage deposits.
Ha, ha, ha
Total banking and financial service revenues were 33 million dollars.
An increase of 6.5 million dollars from the third quarter.
Speaker Change: The increase mainly reflects $2.1 million Animal Insurance Commission recognition in wealth management revenues.
Speaker Change: $4.8 million in favorable MSR valuation due to higher long-term rates, and $800,000 from the previously mentioned acquisition of Puerto Rico's residential mortgage servicing portfolio in August.
Looking at not interest expenses.
Speaker Change: They totaled $99.7 million, up $8.1 million from the third quarter.
Speaker Change: The increase mainly reflects $3.4 million in early retirement and business life-sizing, $1.4 million in annual performance incentives, and the absence of the third quarter $2.3 million card processing rebates.
Speaker Change: We expect 2025 non-interest expense to average 95 to 96 million dollars a quarter.
Speaker Change: This mainly reflects a combination of increased technology, spending and amortization, and higher electronic banking fees and transaction costs as we grow larger.
Speaker Change: The fourth quarter efficiency ratio was 54.82%, compared to 52.60% in the third quarter.
Fernndez, Maritza Diaz
Fernndez, Maritza Diaz
Speaker Change: Other performance metrics remain high. Return on average assets was 1.75%, return on average tangible common equity was 16.71%, and tangible book value per share was $25.43.
Speaker Change: That's down 3% from the third quarter mainly due to capital use in share buybacks and lower other comprehensive incomes.
Please turn to page 7 to review our operational highlights.
Speaker Change: Average loan balances were $7.7 billion, up slightly from the third quarter. End-of-period balances of loans held for investment increased 0.5%, or $41 million from the third quarter.
Speaker Change: The increase mainly reflects growth in Oro, U.S. commercial and Puerto Rico consumer loans more than upsetting repayments of Puerto Rico commercial and residential mortgages.
Speaker Change: Year over year, fourth quarter loans held for investment increased 3.3%. Loan yield was 8.01%, down 4 basis points from the third quarter.
Fernndez, Maritza Diaz
Speaker Change: Fourth quarter new loan origination of $609 million increased 5.5% from the third quarter. This reflects increases in Puerto Rico commercial, auto and residential mortgage lending, partially offset by a decrease in U.S. commercial and Puerto Rico consumer lending.
Speaker Change: We continue to have a strong commercial pipeline in Puerto Rico. In particular, small commercial had a very good fourth quarter and year. Residential mortgage lending improved.
Speaker Change: Average core deposits were $9.6 billion, down slightly from the third quarter. End of period balances decreased $84 million, or 0.9%.
Excluding Government Deposits
Speaker Change: savings and time increased, more than upsetting the declining demand. Year over year, ex-government deposits, retail and commercial also increased.
Speaker Change: Core deposit cost was 146 basis points, down 7 basis points from the third quarter.
Speaker Change: The aggregate rate paid was 4.40%, down 20 basis points. End of period balances were $557 million compared to $346 billion.
Speaker Change: Net interest margin was 5.40% compared to 5.43% in the third quarter.
Speaker Change: Fourth quarter means benefited slightly from the commercial lump repayment I mentioned before.
Speaker Change: Please turn to page 8 to review our Credit Quality and Capital Strengths.
Speaker Change: Credit quality continues to be stable. Net charge-offs totaled $16 million, down $1.2 million from the third quarter.
Speaker Change: Net charges benefited from a $2.6 million recovery from the sale of a portfolio of fully charged off auto and consumer loans.
Speaker Change: Auto net charge-off rate fell 1 basis point to 1.63%. Consumers' net charge-off rate fell 98 basis points to 3.72%.
Speaker Change: At the same time, there were continued recoveries in mortgage and Puerto Rico commercial loans.
Speaker Change: As a result, the total net charge-off rate was 82 basis points, down 8 basis points sequentially, and down from 88 basis points in the year-ago quarter.
Speaker Change: The increase mainly reflects $18.1 million from increased loan volume, $7.6 million for a specific reserve related to four U.S. commercial loans.
Speaker Change: and the previously mentioned $2.6 million recovery from the sale of auto and consumer loans.
Speaker Change: The fourth quarter also included a $5.7 million qualitative adjustment related to recent increasing auto delinquency trends, which the model doesn't fully capture yet.
Thank you.
and 4.38% respectively. The non-performing loan rate was 1.06%.
Speaker Change: Looking at other capital metrics, total stockholders' equity decreased about $64 million from the end of last quarter, and the Tangible Common Equity Ratio decreased 59 basis points to 10.13%.
That mainly reflects shared buybacks and lower overcomprehensive incomes.
Speaker Change: The decrease mainly reflects a reduction in the 2024 ETR for higher-than-previously-forecasted business activities with preferential tax treatment.
and $2.3 million of discrete benefits.
Speaker Change: Excluding discrete items, ETR was 24.03% for 2024 compared to 32.08% for 2023.
Speaker Change: To summarize the fourth quarter, net interest income grew, driven by the investment portfolio and loans, partially offset by lower interest income from lower cash balances.
Speaker Change: Ex-public funds, retails, and commercial deposit balances increased, with savings and time deposits higher, as we continue to grow and deepen customer relationships with the recent added value products and services.
Speaker Change: Net interest margin held fairly steady as the yield from investment securities and reduced cost of core deposits helped offset some of the declining interest rates.
Speaker Change: Credit quality continues to be well managed. The trends are mostly stable, reflecting the solid economic environment in Puerto Rico.
Speaker Change: Non-interest expenses were higher, mainly due to early retirement, business rights citing, and increased annual performance incentives, as well as higher electronic banking fees and technology spending and amortization.
Speaker Change: Regarding capital allocation, we increased our buyback during the fourth quarter. Now, here's Jose.
Jose: Thank you, Maritza. Please turn to page 9. Our outlook for both Puerto Rico and OFG continues to be positive.
Jose: Looking at Puerto Rico, the island's economy is steadily growing. Wages and employment are at high levels. Altogether, the business environment here remains optimistic.
As always, we remain vigilant regarding the big macro uncertainties.
Jose: Turning to OFG, we continue to be well positioned for growth of loans and deposits as well as our customer base.
Jose: Consumer credit trends should remain at current levels. Our digital first strategy will continue to evolve and we will continue to invest in and deploy new customer innovations with the twin goals of further differentiating our business model while at the same time increasing efficiencies.
Jose: Our results could not have been achieved without the hard work and dedication of all our team members. We are very thankful to them and excited for what's to come. With this, we end our formal presentation. Operator, let's start the Q&A.
Speaker Change: Thank you. If you have a question at this time, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, press star 2. Again, if you would like to ask a question, press star, then the number 1 on your telephone keypad.
Speaker Change: And we will take our first question from Kelly Mata with KBW. Please go ahead.
Hi, good morning. Thanks for the question.
Speaker Change: Maybe starting off with the margin. Your NII was really strong and the margin came in.
Speaker Change: you know, towards the high end of what you had said previously.
Speaker Change: As we look ahead, and assuming there's only, you know, maybe a cut or two in 2025, I'm wondering if you could kind of walk us through
Speaker Change: both what you're seeing on the deposit side and the competitive environment there. And I'm wondering if you have the ability to kind of build off this 540 level as we look through 2025.
Speaker Change: Thank you for your question. Let me just start by talking a little bit about the competitive and deposits and that part of the question and I'll let Maritza finish it off with her name perspective.
Speaker Change: So, what we're seeing in the island from a competitive perspective hasn't changed much. It's really intense in all facets. We need to...
Fernandez, Maritza Diaz
Speaker Change: But we are also very rational in this market. So, from that perspective, on the deposit side, we're also getting some benefit from that right across the market. We're seeing good customer growth and it gives me an opportunity here to share with you a little bit of.
Speaker Change: pretty much both years, 23 and 24. And that puts us in a very good situation on the retail side, particularly on the deposit side. We're seeing very good acceptance on our...
Speaker Change: Más a checking account Libra account and as well as the newly launched in the middle of the summer a Mass affluent elite account both both of those are are Having good traction well received and it's bringing in good levels of deposits for us
Speaker Change: So, that's on the deposit side and certainly those products and the momentum we've had with the Digital First strategy that we've implemented are driving our customer growth and certainly will help us with the net interest margin. So, I'll let Maritza give you the specifics.
Speaker Change: Be mindful that we will have the full effect of the 100 basic spine cuts of 2024, we will have the full effect in 2020.
Speaker Change: And I think what is critical in that range is the funding mix, and I think Jose provides you with how we see the market, and that's why we're keeping the range as it is, even we are anticipating probably two cuts.
Speaker Change: That's super helpful, thank you. Next question I have would be on the expenses. There was kind of some push-pull in that.
Speaker Change: Even excluding that, it looks like general and administrative expenses were running higher. As you look ahead to next year, given, you know, your outlook and the initiatives that you continue to run and your
Capture Market Share
Speaker Change: Understood. Yeah, good point. And let me just give you my overall view on expenses. And it's driven by how we've executed on our digital-first vision here in our market.
Speaker Change: and just has two components. One is how do we deploy the technology and how do we invest in technology and in people and in processes to kind of get our digital-first execution going. That started back in 2021, 2022, so we've gone a long way. Just to give you some...
Some perspective here, too, and a context.
Speaker Change: From 2021 to 2024, the level of transactions in the bank has doubled.
on a year-over-year basis.
Speaker Change: is doubled from 2021 to 2024. Now, at the same time, in that same time period, the amounts of transactions done at the branches...
on a monthly basis.
has been reduced by 150,000 transactions.
Speaker Change: And that is totally driven by the investments we made with the sales service portal, with the digital account opening, with all the services that the clients can serve themselves with at the bank kiosk with the virtual tellers and through online and mobile.
workforce on the branch side.
Speaker Change: particular on the Teller side. We've also seen, in spite of that customer growth, or transactional growth that we've seen in those four years, we've also seen how we've been more efficient on the back office. We've been able to see some efficiencies there and we see more efficiencies there too. Now, all of that is being said to also
Speaker Change: Highlight the point that we can't stop here. We got to keep moving forward and we got to keep investing on our people and in our technology and and and the processing so when we look into expenses into Next year our range now is around 95 to 96 million dollars a quarter
Speaker Change: Efficiencies, investments in technology and in people and really we're really confident that how we're building this model and how we're deploying the strategy is creating great momentum for us to grow and further grow from where we are today.
Speaker Change: on the reserve bill that you had, I think in your prepared remarks you described credit as being stable but you did have a specific reserve related to those U.S. commercial loans that were called out in the release as well as
Speaker Change: The qualitative build related to auto delinquencies. Can you talk a bit about what you're seeing and
Speaker Change: You know take take that reserve and how you're feeling overall on on on acid quality. Thanks
Speaker Change: So, big picture and let Cesar Ortiz give you some more specifics on the credit in Puerto Rico and any color on the four loans in the US.
Speaker Change: But from a big picture, as I said in my remarks, the economy remains...
solid
Steady
We're seeing good optimism in the business sector.
Speaker Change: and the economy overall is performing well. So that's kind of the background, Kelly. And Alexis, I'll give you some color on the Puerto Rico credit, particularly on the consumer side.
Alexis: Thank you. Besides the macroeconomics, the macroeconomic situation that we have in Puerto Rico...
Alexis: Delinquencies will show an increasing trend towards this quarter. It's been seasonal. We're seeing every year it's a holiday seasonal increase in delinquency. And we should be seeing an improvement, too, in the first quarter of next year because there's also seasonal improvement in next quarter.
Alexis: But two additional things that I want to point out as key things.
Alexis: That gives us comfort for the outlook, right? The first one is the non-performing levels.
Alexis: We see slightly better non-performing levels at the same period last year.
Alexis: especially for the auto portfolio, which is the largest retail portfolio.
Alexis: And we're also seeing, you know, the out-of-portfolios now, as of December, an 87% prime portfolio.
Alexis: has been increasing since pre-pandemic 65% and we have discussed this every quarter, so those two things give us a good outlook in terms of the performance of the retail portfolio in Puerto Rico.
Alexis: The other question you have was for specific loans in specific reserves that we recorded for this quarter in the U.S.
Alexis: I want to point out that these are unique challenges that each borough has, operational challenges. We continue working with them, you know, engaging with them proactively to ensure that the risks that we have noted this quarter, which, you know, made us...
Alexis: record their reserves, continues to be mitigated but these are unique situations for those borrowers.
I will step back, thank you so much.
Yinera Bohan: Yep, thank you for your question Skelly. Thank you. And we will take our next question from Yinera Bohan with HVD Group. Please go ahead.
Hi, thank you for taking my questions.
Thank you. Thank you.
Speaker Change: And my first question has to do with your tax rate going forward. There was quite a reduction. So do you guys have any guidance on what we should expect going into the next quarter and next year?
Speaker Change: As I mentioned in my previous remarks, this 2024 full ETR was about 24% when compared to 2023 which was 32% because we have higher business activity with preferential tax rates.
Speaker Change: Going forward, we continue to see benefits in our operations from those types of activities, and that's why we're forecasting a 26% ETR for 2025.
Thank you.
Speaker Change: It seemed to be an uptick in the mortgage banking activities. Should we continue with this uptick as the run rate going forward?
Speaker Change: Well, this last quarter, this fourth quarter, as well as the third quarter, were impacted differently for the MSR evaluation. In this one, we did have...
Speaker Change: positive impact in the MSR valuation, that it will depend on the market rates.
Speaker Change: that we are acquiring the third quarter, that's about a million dollars more that we will have on a quarterly basis.
Thank you.
Perfect, thank you so much. That was all my questions.
Thank you for your questions.
Speaker Change: Thank you and we will take our next question from Tamir Brazelier with Wells Fargo. Please go ahead.
Hi, good morning.
Good morning.
Speaker Change: Looking at the link order reduction and demand deposits, what component of that was from public funds?
About $100 million, around $100 million.
Speaker Change: From our vantage point, what we're seeing is a steady inflow. We're starting to see a kind of a shift from...
Speaker Change: CDs back to savings and demand. It's going to happen throughout 2025 I believe, but what we're seeing is a net inflow of slow and...
Speaker Change: and methodical growth in consumer and commercial deposits throughout all our businesses.
Fernndez, Maritza Diaz
Speaker Change: And then, I guess just from a competitive standpoint, you know, from a deposit standpoint, how that's trending, the ability to maybe work down costs, even though they're so low to begin with, and just on public funds, if there's expectation for further decline there throughout 25.
Speaker Change: Well, on the public phones, remember, there are variable rates, so if rates go down, they'll...
Speaker Change: But don't forget that there are credit unions in Puerto Rico, federal credit unions, that they definitely are trying to disrupt to some degree the market, and they're bringing in higher yielding accounts, and that definitely is a factor.
Speaker Change: But we do have, as a bank, OFG, we do have a very strong franchise with very sticky core.
Speaker Change: and I have a question for you. I'm wondering if you can talk a little bit about the consumer deposits that we feel with the two products that I mentioned earlier that we have developed and introduced recently, we have done very well at growing our customers as well as our retail
Ferndez, Maritza Diaz Fernndez, Maritza Diaz
Speaker Change: Okay, great. And then just a couple follow-ups on credit. The four U.S. commercial loans, are those all in a similar geography or is that spread out somewhat?
Speaker Change: Now remember our US strategy is more of a diversification, a geographic diversification strategy, so it's
Speaker Change: nationwide, industry-wide. So we are not specific to our geography. So and these are all mostly I would say all of them are CNI commercial loans across the United States.
And then, you know.
Speaker Change: increase now for two straight quarters. Is there going to be an ability at some point to start seeing some reserve release or is that really off the table until we get a level of plateauing on the consumer and autoboats?
Speaker Change: I'll let Maritza give you the specifics. In my mind, I think the economy in Puerto Rico is shifting from...
Speaker Change: That's how we're looking at the world from our vantage point. Going forward, we're seeing the economy in Puerto Rico doing fine.
Speaker Change: We're seeing the economy having good growth and all, but we're starting to see the economy in Puerto Rico also entering into a more normal cyclical behavior.
We're just trying to
We also are cognizant of those changes.
Speaker Change: I'll let Maritza give you the specifics on this. I think, you know, sharing the same view on how this economy and having a stable and good economy. I think we have reached a good level of allowance coverage at this point.
Speaker Change: This quarter, the volume factor was $18 million, so that could be our main benchmark going forward and remain with the same level of allowance coverage that we have right now.
Speaker Change: So, provision around 18 to 20 million dollars a quarter and assuming all things remain equal. So, that's kind of the outlook here.
Great, thank you.
Speaker Change: Thank you. And we will take our next question from Bader Haile with Piper Sandler. Please go ahead.
Hey, good morning, guys.
Good morning.
Fernndez, Maritza Diaz
Speaker Change: Let me give you a big picture here. When we look at wealth management, we're seeing a very good momentum with wealth management, particularly on the brokerage and insurance both.
doing well.
Speaker Change: And seeing good momentum, particularly on the brokerage financial services side. We're seeing a very good opportunity to deepen the relationships of our customers not only on the deposit side to to the brokerage side, but also from the brokerage to.
Speaker Change: side. And when we're seeing that on the wealth management, but we're also focusing on deepening our relationships with the auto clients, and mortgage clients, and small business clients, we do see a very good opportunity to work internally. And that will help us through the earlier question. Bye bye.
Speaker Change: I think banking, when you look at banking, we need to think about Durbin, since we're now $11.6 billion, so the second half of last year we had the impact of Durbin, but in spite of that we have been able to mitigate somewhat the effect on the banking services income.
Speaker Change: by the acquisition of the servicing portfolio that Maritza mentioned earlier, as well as by growing our clients, growing the transactionality and the debit and the...
Speaker Change: of our customers and the fees that we generate. So I think that the team has done a very good job at mitigating the impacts on...
on MSR.
Speaker Change: excited about the ability for us to continue to steadily grow our fee income.
Speaker Change: So we're seeing auto business and consumer business also rates coming in around the same levels.
Speaker Change: trending slightly lower but not that much. That's why Maritza reaffirms the net interest margin at 530 to 540. We feel that on the long side we see quite a bit of inelastic behavior particularly on the consumer portfolios.
Speaker Change: Got it, thank you. And one last question, is there any concern that the new administration would slow down any federal disbursements to the island, or maybe what you're hearing in regards to that?
Speaker Change: So, look, we've had, I would say, more than 50% of the funds that were initially allocated to Puerto Rico, more than 50% have been obligated.
Speaker Change: They should come in and we'll continue to be deployed on the projects that have started or about to start as they have been obligated. So I think there are a lot of backlogs in projects and there's a lot of steps that need to go through in the federal government. So in general.
Speaker Change: It's a different situation when you're starting versus when you have had five or six years of run rate in terms of getting the funds deployed and invested in the infrastructure. So yeah, there's always a risk.
four or five years ago.
For more information visit www.FEMA.gov
Awesome. That's all my questions. Thank you.
Thank you for your questions.
Speaker Change: I think last fall you had mentioned that you were maybe behind a bit on the buyback. It was really nice to see that come through.
Speaker Change: I'm wondering if you could give us a refresh on how you're viewing capital allocation and rank stacking that as well as You have a bit left on the buyback if you know an additional one is a consideration given the strong capital you have and profitability
Speaker Change: Yeah, nothing, nothing better than having a fortress balance sheet with
Fernndez, Maritza Diaz
Speaker Change: here in Puerto Rico and also in the U.S. We're going to look at the dividend. We're going to look at the buybacks. You saw what we did last quarter, last year in general. I think we had a very
solid buyback execution for us.
Speaker Change: and I see 2025 relatively the same. We're seeing dividends going up and the buyback being executed.
Speaker Change: as well as deploying capital primarily for our loan growth. So the game plan is the same and we'll try not to be on the catch-up at the end of the year on the buyback as we did last year, so we'll be more methodical on that one. But in general, that's how we see it, Kelly.
Kelly Mata: Great, that's super helpful. And then I would also like to touch on
Speaker Change: M&A. Obviously, Puerto Rico is very consolidated at this point, but obviously with the new administration potentially making acquisitions easier. Wondering about your vantage point on that, if there's, you know, potential opportunities to expand the U.S.
Speaker Change: Well, we have our strategy in the U.S. and our strategy in the U.S. is, you know, somewhat different from some of our peers here in Puerto Rico. We feel that the U.S. banking system is well served by more than 5,000 banks and adding one more, it's really not a good strategy to follow from our side.
particularly right now.
Speaker Change: We will continue to execute on our loan participation program that we have on the commercial side and continue to use that as a diversification strategy from Puerto Rico. And that's kind of our...
Speaker Change: Way of looking at it. From an M&A perspective, certainly here in Puerto Rico, there's really not much of M&A to talk about.
Speaker Change: But I think, you know, given where Puerto Rico is, and given where OFG is positioned right now, I think they're...
Speaker Change: The focus for us has to be on growing organically and focusing really hard on gaining market share and executing on our strategy, and that's our focus. So, and I think...
Speaker Change: You know, you mentioned M&A. I tend to think regulatory. I don't think there's going to be much changes from the regulatory front.
Speaker Change: on the day-to-day basis, but I do think that there is going to be on the longer term a change in
approach.
Speaker Change: And as you know, we're now past the $10 billion mark, so looking forward to see how is that being impacted with the new administration and the new regulatory regime that is coming in.
Speaker Change: Those are my thoughts on the M&A in general, Kelly. Thank you so much for those insights. I will step back.
Thank you, Kelly.
Speaker Change: Thank you. And at this time there are no further questions. I will now turn the call back over to Jose for closing remarks.
Jose: Thank you, operator. Thanks again to all our team members and thanks to all our stakeholders who have listened in. Have a great day.
Jose: Thank you. This does conclude today's presentation. Thank you for your participation. You may disconnect at any time.