Financial Data and Key Metrics Changes - The company reported record assets exceeding $12 billion and record loans over $8 billion, with diluted earnings per share of $1.15, reflecting a 6.5% year-over-year increase [4][20] - Core revenues totaled $182 million, with total interest income rising to $194 million, an increase of $5 million, primarily due to higher average loan and cash balances [8][12] - The efficiency ratio was 52%, return on average assets was 1.73%, and return on average tangible common equity was 17% [11][20] Business Line Data and Key Metrics Changes - New loan origination reached $784 million, up 38% from the first quarter and 33% year-over-year, with strong performance across all lending channels [13][19] - Average loan balances increased to $8 billion, up nearly 2% from the first quarter, while end-of-period loans held for investment totaled $8.2 billion, up 7% year-over-year [12][19] - Total banking and financial service revenues were $30 million, reflecting increases in mortgage banking activities and wealth management [10] Market Data and Key Metrics Changes - Average core deposits were $9.7 billion, up close to 1%, with end-of-period balances increasing by $139 million or 1.4% quarter-over-quarter [14] - The commercial pipeline remains strong, with a focus on growing commercial lending in both Puerto Rico and the U.S. [12][19] - Cash increased by 20% to $852 million, reflecting new wholesale funding to support continued loan growth [16] Company Strategy and Development Direction - The company is focused on a digital-first strategy, enhancing customer relationships through technology and innovation [5][22] - A new $100 million stock buyback authorization was announced, supported by strong capital generation [5][20] - The company aims to grow market share by creating value and helping customers achieve progress, backed by a strong capital position [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Puerto Rico economy, noting stable growth and high levels of employment [21][22] - The company anticipates loan growth for the full year 2025 to be closer to 5%-6%, up from previous guidance of 3%-4% [38] - Credit quality remains stable, with net charge-offs decreasing and a strong capital base to support growth [17][19] Other Important Information - The company introduced new products, including an online marketplace and a U.S. Government money market fund, to enhance customer offerings [6] - The net interest margin was reported at 5.31%, with expectations for expansion as loan growth continues [16][19] Q&A Session Summary Question: Margin dynamics and deposit competition - Management noted that deposit costs increased slightly due to fluctuations in government deposits tied to variable rates, but retail customer deposits are expected to continue growing [27][30][32] Question: Loan growth consistency - Loan growth was strong throughout the quarter, driven by a solid pipeline and increased commercial line utilization, with expectations for continued growth in Puerto Rico and the U.S. [35][36][38] Question: Energy situation in Puerto Rico - Management discussed ongoing efforts to improve the energy grid in Puerto Rico, noting that while challenges exist, the economy remains resilient [57][60] Question: Credit quality and charge-offs - Management clarified that seasonal factors typically lead to a rise in delinquencies in the second quarter, but overall credit quality is improving with better vintages coming in [65][66][68] Question: Government deposits outlook - The expectation for government deposits remains stable, with rollovers anticipated over the coming quarters [72][73] Question: Expense management and technology investments - Management emphasized the importance of balancing investments in technology and efficiency improvements while maintaining strong capital returns to investors [74][78]

Financial Data and Key Metrics Changes - The company reported record assets exceeding $12 billion and record loans over $8 billion, with diluted earnings per share of $1.15, reflecting a 6.5% year-over-year increase [4][5] - Core revenues totaled $182 million, with total interest income rising to $194 million, an increase of $5 million, primarily due to higher average loan and cash balances [8][9] - The efficiency ratio was 52%, return on average assets was 1.73%, and return on average tangible common equity was 17% [11] Business Line Data and Key Metrics Changes - New loan origination reached $784 million, up 38% from the first quarter and 33% year-over-year, with growth across all lending channels [13] - Average core deposits were $9.7 billion, up nearly 1%, with end-of-period balances increasing by $139 million quarter-over-quarter [14] - Non-interest expenses totaled $94.8 million, up $1.4 million, aligning with the expected range for the year [9][19] Market Data and Key Metrics Changes - The Puerto Rico economy showed stable growth, with high levels of liquidity among individuals and businesses, contributing to the positive credit environment [5][22] - The company noted a strong commercial pipeline and increased loan growth expectations for 2025, now projected at 5% to 6% [38] Company Strategy and Development Direction - The company is focusing on a digital-first strategy, enhancing customer relationships through technology and innovation [5][24] - A new $100 million stock buyback authorization was announced to return capital to shareholders, supported by strong capital generation [5][20] - The company aims to grow market share by creating value and helping customers achieve progress, backed by a strong capital position [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Puerto Rican economy, highlighting stable wages and employment levels, and a positive business environment [22][24] - The company is committed to maintaining a strong risk management culture while pursuing growth opportunities [40] Other Important Information - Credit quality remains stable, with net charge-offs totaling $13 million, down from the previous quarter [17] - The company introduced new products, including an online marketplace and a U.S. Government money market fund, to enhance customer offerings [6] Q&A Session Summary Question: Margin dynamics and deposit competition - Management explained that deposit costs increased due to variable rate government deposits and emphasized ongoing retail customer growth [28][30] Question: Loan growth consistency - Management confirmed strong loan growth throughout the quarter, driven by a solid pipeline and increased commercial line utilization [36][38] Question: Energy situation in Puerto Rico - Management discussed ongoing efforts to improve the energy grid and its impact on the economy, noting that current issues are not significantly hindering economic performance [60][63] Question: Credit quality and charge-off levels - Management indicated that recent charge-off levels are expected to stabilize due to improved credit performance from new vintages [68][71] Question: Government deposits outlook - Management expects government deposits to continue rolling over in the coming quarters, maintaining a similar outlook as previous quarters [75][76] Question: Expense management and technology investments - Management highlighted ongoing efforts to improve efficiencies through technology while balancing investments and capital returns to shareholders [78][80]