Financial Data and Key Metrics Changes - The company reported diluted EPS of $1.16, a 16% increase year over year, with total core revenue rising by 5.6% [3] - Total interest income reached $200 million, up $6 million, while total interest expense increased to $45 million, up $3 million [7][8] - Net interest margin was 5.24%, down from 5.31% in the previous quarter [11] - Return on average assets was 1.69%, and return on tangible common equity was 16.39% [9] Business Line Data and Key Metrics Changes - Loans and core deposit balances increased year over year, with a particular focus on commercial loans [3] - Average loan balances were $8 billion, up nearly 2% from the second quarter, while end-of-loans held for investment totaled $8.1 billion, reflecting a 5% year-over-year increase [9][10] - Core deposits were up $287 million or 3% year over year, with average core deposits at $9.9 billion [10] Market Data and Key Metrics Changes - The Puerto Rico economy is performing well, with high levels of wages and employment, and a boost from tourism [16] - The company is seeing strong business activity in Puerto Rico, contributing to its growth outlook [3][16] Company Strategy and Development Direction - The company is pursuing a digital-first strategy, enhancing its position in banking innovation in Puerto Rico [4] - New product offerings, such as the Libre and Elite accounts, are aimed at attracting deposits from new and existing customers [5] - The company is leveraging AI to provide tailored insights to customers, enhancing customer engagement and operational efficiency [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the commercial pipeline and credit trends, anticipating annual loan growth of 5% to 6% [14][16] - The company remains watchful of global macroeconomic and geopolitical uncertainties but is optimistic about its growth prospects [17] - The anticipated effective tax rate for the year has been adjusted to 23.06% from a previous estimate of 24.9% [15] Other Important Information - The company repurchased $20.4 million of common shares during the quarter [3] - Credit quality remains stable, with a non-performing loan rate of 1.22% [14] Q&A Session Summary Question: Dynamics impacting deposit costs - Management indicated that higher deposit costs are driven by a strategic focus on attracting mass affluent clients through competitive rates on accounts [20][21] Question: Outlook for commercial loan growth - Management noted that while there were paydowns on lines of credit, the commercial pipeline remains solid, with confidence in future growth [22][23] Question: Credit quality and charge-offs - Management clarified that recent charge-offs are idiosyncratic and not indicative of broader market issues, with a focus on managing risk within the portfolio [31][32] Question: Guidance on net interest margin - Management provided guidance for the fourth quarter net interest margin at 5.10% to 5.20%, influenced by recent Fed rate cuts [42][45] Question: Investments in AI and operational efficiencies - Management discussed ongoing investments in AI to enhance customer service and operational efficiencies, with a focus on delivering unique insights to customers [46][47] Question: Capital management priorities - Management emphasized that capital priorities include funding loan growth, share buybacks, and dividends, supported by a strong economic outlook in Puerto Rico [49][50]

Core Insights - Starz Entertainment Corp. reported modest results for 2Q25, missing revenue and adjusted EPS estimates, with revenue of $319.7 million, down 8.0% YoY from $347.6 million in 2Q24 [2][14] - The company experienced an operating loss of $26.9 million in 2Q25, compared to an operating income of $10.1 million in the prior-year period [2][14] - Starz ended the quarter with 12.2 million U.S. OTT subscribers, a sequential decline of 120,000, and total U.S. subscribers reached 17.6 million, down 410,000 from the previous quarter [2][15] Financial Performance - Adjusted OIBDA for 2Q25 was $33.4 million, down from $56.3 million in 2Q24, leading to a decrease in adjusted OIBDA margin to 10.4% from 16.2% [2][14] - The net loss for the quarter was $42.5 million, compared to a net income of $4.2 million in 2Q24, with diluted loss per share at $2.54 versus diluted earnings per share of $0.26 in 2Q24 [2][14] Subscriber Trends - The decline in subscribers was attributed to lower OTT additions and ongoing pressure on linear subscribers, particularly due to the underperformance of BMF Season 4 [2][15] - Despite the overall decline, the Outlander prequel, Blood of My Blood, achieved strong performance, becoming the third-highest series premiere in Starz history for subscriber additions [2][10] Strategic Outlook - Starz is focusing on a digital-first growth strategy and expects sequential revenue and OTT subscriber growth in upcoming quarters, supported by a strong content lineup [2][8] - The company aims to reach $200 million in adjusted OIBDA by year-end and convert 70% of that into free cash flow by 2026 [2][8] Valuation - The intrinsic value of Starz Entertainment Corp. is estimated at $18.00 per share, based on a 2026e EV/EBITDA multiple of 4.4x, maintaining a 'Buy' rating with an implied upside of 33.3% from the current market price of $13.50 [6][16] - The valuation is sensitive to fluctuations in adjusted EBITDA and EV/EBITDA multiples, with potential changes impacting the target prices significantly [18] Company Strategy - Starz is strategically exiting seven international territories to streamline its business and is prioritizing lower-cost original content production [21] - The company is targeting key demographics and aims to achieve a 20% margin run rate by FY28 to boost profitability [11][12]

Group 1 - U.S. Bancorp (USB) has partnered with Fiserv (FI) to integrate its Elan Financial Services credit card program into Fiserv's Credit Choice solution, enhancing digital card issuance capabilities for financial institutions [1][8] - The integration supports USB's digital-first strategy, allowing consumers and small businesses to manage both debit and credit card accounts within a unified digital platform [2][8] - The collaboration is expected to accelerate this summer, with full conversion of the portfolio targeted by the end of 2025, and digital card solutions to be integrated by the first half of 2026 [3][8] Group 2 - USB shares have increased by 3.1% over the past three months, outperforming the industry's growth of 0.6% [4] - USB currently holds a Zacks Rank of 3 (Hold) [6] Group 3 - Other financial firms are also pursuing similar strategic partnerships, such as UBS Group AG's collaboration with General Atlantic to focus on private credit opportunities [9][10] - Citigroup, Inc. has entered a multi-year agreement with Google Cloud to support its digital strategy through cloud technology and AI, aiming to modernize its technological infrastructure [11][12]