Q2 2025 First BanCorp Earnings Call
Hello and welcome everyone to the first Bangor. 2q 2025 Financial results.
Becky: My name is Becky and I'll be your operator today.
Becky: During the presentation, you can register a question by pressing star, followed by 1 on your keypad. If you change your mind, please press star followed by 2.
I will now hand over to your host Ramon Rodriguez, IR officer to begin. Please go ahead.
Ramon Rodriguez: Thank you, Becky. Good morning, everyone. And thank you for joining First Bank Corps conference calling webcast to discuss the company's Financial results for the second quarter of 2025.
Speaker Change: Joining you today from First Bank Corp are president and chief executive officer in Orlando, vice president and Chief Financial Officer.
Speaker Change: Before we begin today's call, it is my responsibility to inform you that this call may involve certain forward-looking statements such as projections of Revenue earnings and capital structure as well as statements on the plans and objectives of the company's business.
Speaker Change: The company's actual results could be for materially from the forward-looking statements made due to the important factors described in the company's latest SEC filings.
Speaker Change: The company assumes no obligation to update any forward-looking statements made during the call.
Speaker Change: If anyone does not already have a copy of the webcast presentation or press release, you can access them at our website at fbb investor.com.
Speaker Change: At this time, I'd like to turn the call over to our CEO Aurelio almond.
Speaker Change: Thank you, Ramon. Good morning to everyone and thanks for joining our earnings call today.
Speaker Change: As usual, I will begin with discussing our financial performance and for the second quarter and then provide some high-level microservices and and also share some business highlights for the franchise.
Speaker Change: We are very pleased to report another strong quarter, the financial results, underscore the strength of the franchise and ability to deliver consistent return to our shareholders.
Speaker Change: We earned 80 million in net income, which translated into a strong return on asset of 1.69%.
Speaker Change: Driven by record netting. That is income stalling, on production and well-managed expense growth.
Speaker Change: Free tax. Preparation income was likely below probably quarter but up 9% when compared to Prior year.
Speaker Change: And more importantly, we did sustain our top card title, efficiency ratio at 50%
actually, in the low low end range of our range of 50 to 52%,
Turn into the, to the balance sheet. We were very encouraged to see commercial. Don't orientation activity pick up during the Border. A clear indication of a stable macro across our markets and obviously the successful execution of our teams.
Speaker Change: We grew total loans by 6%, link quarter annualized, mostly driven by strong commercial Loan Production in Puerto Rico and Florida.
Speaker Change: Commercial lending pipelines actually continue to be strong as we enter the second half of the year.
Speaker Change: Which is is crucial for our strategy.
Speaker Change: Moving on to the deposits, we did see a reduction in customer deposits during the quarter.
Speaker Change: Mostly driven by fluctuation in a few large commercial accounts.
While retail deposit accounts remain fairly stable. When we actually look at the detail of this decline.
it was concentrated on very high balance large commercial customers as an example, you know, 5 customers,
Speaker Change: Accounted for 120 million of that reduction.
Proven from a credit standpoint with most recent metrics, moving in the right direction, recent vintages performing better than prior vintages.
Speaker Change: Non-performing asset remains flat at 68 basis points of total asset and net charge of came down during the quarter.
This highlights the benefit of Prior years, credit policy calibration and the Improvement in the in the consumer vintages.
Speaker Change: Finally, our Capital continues to build quite nicely. Even though we continue to execute on our Capital deployment plan, during the first half of the year,
Speaker Change: consistent with the strategy that we announced year to today, we have deployed over 107% of earnings
Speaker Change: in the form of dividend BuyBacks and relation with traps.
Speaker Change: And we definitely feel this action, best suits, the long-term interests of the franchise and our shareholders.
Speaker Change: So, let's turn to page 5 to provide some highlights on the macro.
Oh, you know, I'm talking about my market, we believe the, the economic conditions and business activity in, in Puerto Rico and Florida.
Are are trending. Continue to Trend favorably.
Speaker Change: Obviously, there's economic concerns and uncertainty are on tariff and changes in US policies. And the potential effect. This represent obviously creates a degree of uncertainty for both retail and Commercial customers, but we continue to see Investments and commitment, you know, moving forward.
Speaker Change: the labor market remains, you know, strong resilient
Speaker Change: You know, reflecting the lowest on employment rate in decades.
And and after a few months of government transition, we're seeing some encouraging trends.
In disaster relief you know inflow which continue to support economic activity and infrastructure development in the island. So those those projects which we also participate as it relates to affordable housing
Speaker Change: In terms of the franchise, our key Investments are you know, technology.
And we continue to to, to to, to increase that investment.
Speaker Change: To achieve, you know, long-term growth for our business. We're also contributing to deliver our Best in Class efficiency ratio.
Speaker Change: It definitely the franchise investment remains. You're improving our interaction with customers and provide them with a seamless experience to our to our multiple channels.
Speaker Change: The the successful execution of our Amazon strategy has been evidenced by.
Speaker Change: The actually 8% annual rise in digital active customers achieve consistently over the past 5 years.
Speaker Change: Coupled with a steady reduction in Branch active customers over the same period.
Speaker Change: When we look at priority for the franchise supporting Economic Development, our our Market is the main priority lending to both consumer and corporations.
Speaker Change: If we break down our long growth for the first of the year, has been very strong.
Speaker Change: While Residential Mortgage slightly increase and Consumer, Credit demand has been relatively steady.
Based on current Landing pipelines reduction in in broader Market of certainty and our outlook for improving consumer, health in Puerto Rico, we remain confident that we can achieve our mid single digit, long growth, guidance for the full year. We still have, you know, half of the year to catch up with me.
Speaker Change: The corporation track records, speak for itself will continue to be returned focused and not okay or Capital, where it makes more sense to our customers and shareholders.
Speaker Change: As we do, you know, every year, we are reviewing our Capital plan.
Speaker Change: and we will provide an update when we report third quarter results in October,
Speaker Change: Remember that we still have 100 million left of our 2024, by back out to this session.
Which we expect to opportunistically execute over the next 2 quarters aiming to achieve our Target deploying 100% of our our earnings to shareholders in the form of capital actions.
Orlando: Thank you for for your interest uh support and thank to our colleagues for their Collective. Achievement supporting our customers and will now turn turn the call to Orlando to go over financial resources and more details.
Speaker Change: Orlando.
Good morning to everyone. Um, so you mentioned we we had a small second quarter uh was highlighted by a net, income of 80 million, which is 50 cents. A share.
Speaker Change: Uh the return on asset that he mentioned that increased to 169 and and an expansion of the net interest margin to 4:56 for the quarter.
Speaker Change: From 24, uh, pointed million in the first quarter. Uh which was driven by by reductions in net charge of uh in consumer, net charge of improvements, uh, in the microeconomic forecast, uh, specifically the, the projected unemployment rate in Puerto Rico, uh, which has an impact on on on projected losses.
Speaker Change: The income tax expense for the quarter. Um uh includes a benefit of 500,000 uh related to a reversal of a tax contingency, a cool. Uh but also uh the effective tax rate. It's it's coming in lower based on a higher proportion of exempt income.
Uh, considering uh, the projected, um, uh, consolidated income for the year. We believe that the stock, the effective price rate, for the year. It should be, uh, around the 23%
Speaker Change: In terms of that interesting income. Um,
Speaker Change: Uh, it increased to 215.9 million in the quarter, 315 million higher.
Speaker Change: Uh, than last quarter. Uh, this quarter, uh, includes a 1.6 million Improvement uh, for for an extra day in the quarter.
Speaker Change: However as we discussing the previous quarter, earnings call, then at interest income for for the first quarter included, uh, 1.2 million in fees and penalties that were collected on the early cancellation of a 74 million commercial mortgage loan and this quarter we didn't have anything similar to to that.
Speaker Change: On average, uh, the the commercial and construction loan portfolios. Grew a 100 million, the, the this quarter. But yields were down 4 basis points, uh, to 667 when, when, um, considering normalization of the second quarter yield or first quarter yields, I'm sorry. Uh, based on the 1.2 million in, in, in fees collected in, as I I just mentioned
Speaker Change: In the case of the consumer portfolio, the the average balances were slightly down to 2 million dollar basically on the unsecured Lending.
Uh, Auto and leasing portfolio, grew 24 million on on on average.
Speaker Change: The yields on on the overall consumer portfolios were down from 1068 to 1057 uh in part due to to a change in the mix uh as Auto to a lower yielding and some of the other unsecured lending portfolios.
Speaker Change: Regarding, uh, the investment Securities portfolio. We we're starting to see the pick up in yield.
Uh we saw a growth of 6 basis points in the quarter as we continue to to reinvest uh the lower yielding maturing cash flows into higher yielding instruments.
Speaker Change: Uh, this quarter, we we purchased 397 million insecurities, at a, at an average year of 478.
Speaker Change: Uh, on the funding side, we completed the the Redemption of the remaining uh junior subordinated Adventures.
Speaker Change: and pay down at the end of April of the first quarter 180 million in maturing Federal Home Loan Bank advances that were higher higher cost uh funding
Speaker Change: Uh, the result, the overall cost of a of a interest bearing liability secret 2.3 million for the quarter and the average cost was uh 214 which is 9 basis points lower.
Speaker Change: In the case of deposits, even though uh, the end of the quarter, they were down at 30o mentioned, on average interest for in deposits. Uh, excluding broker where 110 uh, million higher than last quarter.
The cost of the interest were in transaction accounts with uh, 1 138, which is 6 basis, points lower than last quarter and the cost of the time, deposits was uh, 336, which is uh, 3 basis points to lower.
Speaker Change: Uh all of this translates into a net interest margin of about 4.56, which is 4 basis points, higher than the 4502, reporting last quarter on a gap basis.
Uh, however, as we discussed in the prior earnings call, if we exclude the items I mentioned before, the, the, the piece on on the loan that was canceled, the the normalized margin for the first quarter was really, uh, 448.
Speaker Change: Uh, those resulting uh, for in an 8 basis points, increasing margin this quarter as compared to the first quarter.
Speaker Change: In terms of guidance, we we continue to sustain the 5 to 7 basis points, pick up in in each uh in the margin in each of the next quarter, as we assume mentioned, uh, uh, during the first quarter call.
Speaker Change: um,
Speaker Change: assuming the normal flow of the bets, we're confident, uh, will be able to continue to reinvest in Cumming, cash flows.
Speaker Change: From a lower yield insecurities into into higher yielding assets over the coming months and and into 2026.
Speaker Change: Uh based on portfolio, cash flows are expected to reach uh just over a billion in the second half of 2025.
Speaker Change: About 200 about 460 million of that in the third quarter and 600 million in in the fourth quarter.
Speaker Change: 4.8 million versus the prior quarter. But most of the increase uh was related to seasonal contingent Insurance commissions we received in in the first quarter.
And and lower realized gains on purchase of income tax credits.
Speaker Change: In, on the other hand, we were slightly better in in service. Charges on deposit accounts, and Mortgage Banking fees for the quarter.
Speaker Change: Operating expenses were 123.3 million.
Relatively in line with the 100 123 million we had last quarter.
Uh, compensation expense was down 2.1 million driven by by bonuses and stock based compensation. That was recognized during the first quarter.
And, and also, the the decrease in the payroll taxes assembly is reached the maximum taxable amount.
Speaker Change: Um, on the other hand, we had a an increase in credit card and debit and credit card processing expenses, uh, due to uh expense reimbursements, we received from the networks in the in the first quarter.
Speaker Change: And this quarter, we also had a a reduction of 500,000 in the gains on oral operations.
Speaker Change: Excluding Oreo expenses would have been about almost 1.24. It's 1 2 3.0.
Speaker Change: Which compares to 124.2 million in the first quarter.
Speaker Change: The efficiency ratio of mentioned was 50%. Pretty much in line with the with last quarter.
Speaker Change: Um, expenses for the quarter were below the guidance range we had provided in the baron, it's called. But, um, uh, based on projected expense trends for ongoing, technology projects and, and business promotion, efforts that are geared towards the second half of the year.
Speaker Change: Uh, we, we do expect that our base. For the next couple of quarters will be closer to the guidance that we we provided before that 1, 125 to 126 range. Excluding the Oreo against her office.
Speaker Change: Um, the efficiency ratio, uh, we still um, believe it's going to be between that 50 to 52 range, uh, considering the, the expenses changes and the and the uh, income changes that are are being forecasted.
In asset quality and Pa's, uh, decrease 1.4 million in the quarter.
Speaker Change: uh, we had a 2 and a half million reduction in in on a Google Consumer loans and a 3 million reduction on Oreo and other repossess as its
Speaker Change: Um, on the other hand, we had a, a 4 million uh, migration to non-performing and then construction loan portfolio in the Puerto Rico region.
Speaker Change: The NPI ratio remained flat at CCA basis points of assets.
Speaker Change: Inflows, uh to non-accrual were 3, 3 4. 1 4.
Speaker Change: Inflows, uh, for Consumer and Residential Mortgage Loans. Combined were down about 400,000 this quarter.
Speaker Change: In general.
Speaker Change: We mentioned, uh, before credit metrics seem to be holding up well. Uh, loans in early, in register slight increase of about 2.8 million to 134 million mostly in in the order portfolio.
Speaker Change: Um, and as I already mentioned, we continue to do monitor Consumer Credit closely. And we're seeing Improvement in reducing, uh, recent vintages,
Speaker Change: Uh, which which is a result of the credit policy adjustment that was done back in in 2023?
Speaker Change: The allowance uh, for the quarter increased 1.3 million to 248.6 million.
Speaker Change: Mostly, uh, the the allowance increase based on the growth and the the commercial portfolio during the quarter.
Speaker Change: Uh but we did have a reductions in allowance for Consumer. Loans resulting from the improved uh unemployment rate forecast in Puerto Rico.
Speaker Change: Uh, the ratio of the allowance, the overall allowance increase 2 basis points to 1 93 but it's mostly due to a 6 basis point reduction in the allowance for for the consumer portfolio.
Speaker Change: Net charge of the quarter, where 19.1 million 60 basis, uh, points of average loans, which is down from 68.6 pounds in the first quarter.
Uh but keep in mind that uh the the first quarter and I charge off included 2.4 million in recoveries that were related to the bulb sale of of consumer charge of loans.
Speaker Change: If we were to exclude uh that sale, the net charge of for the first quarter would have been 76 basis points. So we had a 16 basis point reduction as compared to that number.
Speaker Change: on the Capitol Front as a aelio commented, we we executed on our Capital deployment strategies during the quarter
Speaker Change: by Redeeming the remaining subordinated Ventures.
Speaker Change: Purchasing 28 million in stock.
Um just to clarify there. Um you remember, we had a plan of 50 million per quarter in in the first quarter. We we purchased the redeemed, the 50 million of the drops.
Speaker Change: Uh, but also based on the way, the the market was moving, we accelerated uh, some repurchases of the of the second quarter amounts and we repurchased 22 million in in the first quarter.
Speaker Change: So, we completed the second quarter, the 20n million to reach the 50 million. And on top of that, we we uh, redeemed, the remaining 11 million or so of the of the remaining drops.
Uh, in terms of the, of the tangible book value per share. It increased 5% during the quarter to 1116 uh, on the TC ratio expanded to 9.6% uh mostly due to to to 41 million increase in the fair value of of the Investment Portfolio.
Speaker Change: So far this year, the fair value has has improved 125 million.
The remaining. Um, uh, uh
Valuation allowance a ocl that we have in the Box, we present about 2.69 cents in tangible, Book, value.
I know we're 200 basis points of the, on the tangible company. R.
Speaker Change: Um, again we will continue to deploy our excess capital and and the thoughtful matter.
Always looking for the best interest of the franchise and the shareholders.
Speaker Change: Um this this concludes our very remarks that uh operator please open the call for questions.
Thank you.
Speaker Change: If you wish to ask a question, please press star. Followed by 1 on your telephone keypad now.
If any reason you want to remove your question from the key, please press star. Followed by 2.
Speaker Change: When preparing to ask your question, please, ensure your device is unmuted locally.
Speaker Change: Our first question comes from Brett rabbit from Hove group, your line is now open. Please go ahead.
Brett Rabbit: Hey, good morning, gentlemen.
Speaker Change: um, wanted to just make sure from a um,
Speaker Change: Housekeeping perspective, the tax rate that you guys expected. I thought I heard 23% is that for the full year or was that for the back half of 25?
For the full year of bread.
Speaker Change: That would be the the estimated um um um uh tax rate, effective tax rate based on the forecast, that makes of exempt and taxable income. And some of the other components for the year
Speaker Change: Okay, keep in mind that we do have the just 1 1 comment, keep in mind that um, 1 of the benefits of the the Redemption of the props is that they were sitting at the holding company level and the, the expense the interest expense there because we don't have a profit at the holding company level was really not getting any tax benefit.
Speaker Change: So that's part of the reason we're getting some some uh, some of the uh, the effective tax rate improvements.
Ah, okay. That's helpful.
Speaker Change: Um, and then just the comments on the deposit, um, decline that that seem to be kind of high at work for commercial, any additional color there do, do you think that migration um, has run its course or can you give us any any other?
Speaker Change: Color around, you know what, what you're seeing on on larger deposits.
Speaker Change: You know there there is a you know there's a lot of you know moving Parts primarily uh it's really recurring business purpose, actually Capital Investments. There's some tax payments that took place there is even settlements.
A you know, there's significant number of those variances that we saw this quarter, We Believe are non-recurring in nature and there's some there's some, you know, High yielding seeking behaviors too.
That, you know, very high balances, uh, segment. So,
you know, but but you know, when you look at it, it was highly concentrated as I mentioned, you know, top 5, uh, customers represented 120% and
Speaker Change: And, you know, 25 customers the overall variance is, is around 25 customer overall. So
Speaker Change: When the in front, the commercial segment itself. So from the retail side, you know, very stable, net net. You know, net customers are growing and net accounts are growing.
Speaker Change: Which is an important metric that we, that we follow.
Okay.
Speaker Change: Um,
Speaker Change: Um, portfolio.
Speaker Change: Is, you know, we believe it's sustainable to improving the trend on the charge of for the consumer portfolios.
Speaker Change: Okay.
Speaker Change: Great. Thanks. Appreciate all the color, guys.
Thank you, thanks.
Thank you.
Tamar Brasilia: Our next question comes from Tamar Brasilia from Wells. Fargo, your line is now open. Please go ahead.
Tamar Brasilia: Hi, good morning.
Tamar Brasilia: Morning, back on the back, on the deposit, commentary. I think last quarter of the comments. Were that the deposit stability? Uh, you're seeing more deposit stability versus the last couple of years. Were these outflows surprising? Is this kind of excess liquidity that you were expecting to leave at some point and it is just culminated in 2 q and then the comment on on the 25th overall, is that the total in this larger commercial segment or is that the total that made up the composition of the 2q decline.
No, is the total that made the the the composition of the decline, we have a lot more customers on that segment.
Tamar Brasilia: It's just, you know, top customers that show variances.
Tamar Brasilia: All together, you know? So some of them were surprised because of the movement took place but but you know, some of them are just, you know,
you know, regarding business purposes that
Tamar Brasilia: Just you know a lot of things that happen in the same time in the same course. Also tax events of tax payments on the April, do we saw some of that
Tamar Brasilia: We believe, you know, most of them are not recurring, but obviously you you combine that with, you know, the higher for longer rates.
Tamar Brasilia: You know, that that hygiene in Behavior as long as rates are high, that highly in Behavior will continue and we do have we do have, you know, certain parameters of the which point we compete also?
Tamar Brasilia: Got it and I guess as we look into 3 Q specifically with your comments around, maintaining the mid single digit loan guy, that implies some accelerating uh on the loan growth front.
If I'm not mistaken I think 3 Q is a little bit more challenging from a deposit standpoint from seasonality. Can you just give us uh some parameters on what the expectation is internally for funding, the second half loan growth.
Tamar Brasilia: You know, the the second half we we believe stability, you know that we're going to achieve as stability in the deposits. There's again, there's some, you know, Deltas on the Garment side that are difficult to predict
When they come in and out. There's some variances, you know, sometimes on the government accounts, on the large accounts,
Tamar Brasilia: money flowing in and flowing out in terms of the most, some of the you know payments that come in
From from different funds.
Tamar Brasilia: You know no, no, no tax, uh, Deltas should happen in the second half or or minimum.
Tamar Brasilia: You know we will say you know stability obviously a lot of the liquidity that you're going to see coming in the second half its you know Orlando me mentioned it's more than a billion dollars from the cash flows on the investment portfolios that the primary objective is to deploy that in loans don't necessarily securities.
Tamar Brasilia: But the excess will go back to securities.
Tamar Brasilia: Got it. Okay, that's a good color there. And then just lastly for me on the loan growth, um,
Tamar Brasilia: It's been a good start to the year out of the Mainland, just the composition that you're expecting in the second half of the year, is that going to be more? So, from Puerto Rico, on the commercial side or or is the expectation still here that the mainland is going to drive much of the near-term loan growth.
Tamar Brasilia: Uh, it's a combination. It's a combination of Florida, will continue to contribute.
Tamar Brasilia: Uh, you know, as well as you know, the Puerto Rico commercial sector is what we see most of the growth.
Tamar Brasilia: Stability, and the consumer and, and actually some growth in the, in the Residential Mortgage. We, we already have achieved some this year.
Tamar Brasilia: Great.
Tamar Brasilia: Thanks for the caller.
Tamar Brasilia: Okay.
Tamar Brasilia: Thank you.
Tamar Brasilia: Our next question comes from Steve Moss from Raymond. James, your line is now open. Please go ahead.
Chase: Hey, this is Chase on for Steve. Good morning.
Tamar Brasilia: Good morning.
Tamar Brasilia: So first, um, I was curious let alone, you know what's happened coming in these days?
You well um, could you could you repeat the question we couldn't hear you. Well,
Tamar Brasilia: Oh sorry. Um, I was just curious for a loan yields have been coming in these days.
Tamar Brasilia: Well, as I was saying, um, if you look at the, the yields on the, uh, can I portfolio came down 4 basis points.
Tamar Brasilia: Um,
the yield on the, on the consumer portfolios are very much, uh, similar. The the difference has been more than anything, the change on on mix. Um, as you know, uh uh, credit cards are are based out of prime, um, personal loans.
Tamar Brasilia: Uh, we have 2, 2 components, uh, typical on secure personal loans and that, uh, 13% range. And uh, and the only the, the the uh, the small loans under special legislation in Puerto Rico.
Tamar Brasilia: Uh, are are closer to the 30%.
Uh, the the auto portfolio it's on on the 8% range.
Tamar Brasilia: Uh so so we've seen some reductions on the commercial side, not so much on the on the consumer side.
Tamar Brasilia: And mortgage. It's uh, it's a market function. It's similar to what you see in the states that we're seeing that, uh, you know, 6 and a half to 6 and 3 quarter kind of deals that uh in general, depending on the type of uh of product.
Tamar Brasilia: Gotcha, thanks for that color and 1 last 1 for me. Um,
Speaker Change: How much room do you think there is to continue, pushing down funding costs? And do you expect to pay down your remaining? If that you'll be Advanced as they mature,
Speaker Change: The, I mean, the there there are a few few components. Um, uh, what we have in broker deposits that we use to fund the Florida operation or part of the Florida operation. Uh though those will continue to come down as the market is lower than what uh some of the things that mature.
Speaker Change: Uh, time deposits. There is a little bit of space, uh, but it's coming, uh, as it's been coming down, uh, clearly rates.
Speaker Change: Staying at at at uh, this levels, uh consistently will stop that a little bit.
Speaker Change: Uh, the the federal Home Bank advances um, would would be a function of of needs at the time and and uh, um, um funding time frames management.
Speaker Change: Uh, as you saw we we paid down the 180 million in the first quarter. Um, we didn't need the the funding with the cash flows coming in from from the Investment Portfolio. We might have some opportunities so
Speaker Change: So there is um there is a some some uh some opportunities in reality, they have Federal Loan Bank advances.
Speaker Change: um,
Speaker Change: The the what what matures in within the next 3 months it's only 30 million.
so we will probably, you know, pay those down but um uh there's um
Speaker Change: About 90 million on, on the 6 months to to, uh, a year time frame that, uh, we'll see based on on the, on the funding mix. But, um, but uh, yeah, the idea is to to uh, get those costs down, uh, eliminating some of it or, or just repricing some of it.
Speaker Change: All right, thank you for that color. That's all my questions. Uh, thank you so much.
Speaker Change: Thanks.
Speaker Change: Thank you.
Our next question comes from Kelly M from KBW, your line is now open. Please go ahead.
Speaker Change: Hey, good morning, thanks for the question.
Speaker Change: um, I I I, I think maybe, um,
Speaker Change: Going back to the loan growth, and the mid single digits you guys had some nice grow loan growth this quarter. It looks like, um, as you called out, a lot of it was in, um, commercial and cni. Um, just wondering if you were seeing any changes in the utilization rate and, um,
Speaker Change: In terms of the loan growth, in the back half of the year. Um,
how your expectations are do you feel better about it than than you did maybe the same time, 3 3 months ago just wondering kind of your overall level of confidence in the mid single digit, loan growth and and kind of um
Speaker Change: Any utilization rate factors that we should be considering here?
Speaker Change: you know, I I, I can tell you, you know,
Speaker Change: The last year. So so from that standpoint we we, you know, pretty confident on the continuous, you know, movement of that pipeline into into closing
Speaker Change: regarding a utilization, I don't have, you know, the data had I don't want to
Speaker Change: You know, just do it from the top of my head, you know, we can get back to you on that or the overall, you know, in a way.
Speaker Change: Or presentation, when we update.
Speaker Change: Got it. That's, that's helpful. Um,
Speaker Change: And and then just on a, on a high level on the efficiency. You continue to kind of Target that I think 52% of issues C ratio and um
For the past, several quarters. Now you've been coming in quite below that as, as we look ahead to next year. Are there any significant investments in in technology or um, things you're you're looking at to, um, you know, Drive longer term efficiencies that we should be considering when when building out a a longer term expense run right here.
Well, you know, we've been doing, we are making those Investments for some time and those will continue.
Hey, I think we we we provide some highlights earlier in the year of, you know, completing important steps in our Cloud migration.
Speaker Change: And eliminating the Mainframe that existed in Puerto Rico until the first quarter as an example.
Speaker Change: The adoption of cloud-based technology, the movement of everything that we still have in the open environment. Here will continue
Speaker Change: You know, investment in additional, you know, self-service tools and and functionality in the applications, the digital applications across different businesses and products, including mortgage, Auto and deposits.
Speaker Change: Will continue, you know? It's it's been, it's been a significant amount of the expense base for some time.
Speaker Change: So it will continue to be.
Speaker Change: A, you know, some obviously process automation related in as the new tools bring, you know, some AI components into it.
Speaker Change: so, I would say, you know,
Speaker Change: You know, we don't expect a big peak of those because we continue to to sustain, you know, the levels that we that we've been doing been very active in in those Investments like last year. And so, you know, platform implementation was 1 of them.
Speaker Change: Some of the process automation on the risk management. You know, tools.
Got it. Thanks so much. I'll step back.
Speaker Change: Thanks Kelly. Thanks.
Speaker Change: Thank you. We currently have no further questions so I'll hand back to Ramon Rodriguez for closing remarks.
Ramon Rodriguez: Thanks to everyone for participating. In today's call, we will be attending Raymond James Financial Services conference. In Chicago on September 3. We look forward to seeing your number of you at this event and we greatly appreciate your continued support. Have a great day and thank you. Thank you.
Ramon Rodriguez: This concludes today's call, thank you for joining. You may now disconnect your lines.