First Bank

Hello and welcome everyone to the First Bank Corp 2Q 2025 financial results. My name is Becky and I'll be your operator today. During the presentation, you can register a question by pressing star followed by one on your keypad. If you change your mind, please press star followed by two. I will now hand over to our host, Ramon Rodriguez, IR officer, to begin. Please go ahead.

Thank you, Becky. Good morning, everyone, and thank you for joining First Bank Corp's conference call and webcast to discuss the company's financial results for the second quarter of 2025. Joining you today from First Bank Corp are Aurelio Aleman, President and Chief Executive Officer, and Orlando Bergez, Executive Vice President and Chief Financial Officer. 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. The company's actual results could differ materially from the forward-looking statements made due to the important factors described in the company's latest SEC filings. The company assumes no obligation to update any forward-looking statements made during the call. If anyone does not already have a copy of the webcast presentation or press release, you can access them at our website at fbpinvestor.com. At this time, I'd like to turn the call over to our CEO, Aurelio Alemán.

Thank you, Ramón. Good morning to everyone, and thanks for joining our earnings call today. As usual, I will begin with discussing our financial performance for the second quarter and then provide some high-level macro observations and also share some business highlights for the franchise. We are very pleased to report another strong quarter. The financial results underscored the strength of the franchise and ability to deliver consistent return to our shareholders. We earned 80 million in net income, which translated into a strong return on assets of 1.69%, driven by record net interest income, solid loan production, and well-managed expense growth. Pre-tax preprovision income was likely below prior quarter, but up 9% when compared to prior year. And more importantly, we did sustain our top quartile efficiency ratio at 50%, actually in the low end range of our range of 50 to 52%. Turning to the balance sheet, we were very encouraged to see commercial long-ordination activity pick up during the quarter, a clear indication of a stable macro across our markets, and obviously the successful execution of our teams. We grew total loans by 6% in quarter annualized, mostly driven by strong commercial loan production in Puerto Rico and Florida. Commercial lending pipelines actually continue to be strong as we enter the second half of the year, which is crucial for our strategy. Moving on to deposits, we did see a reduction in customer deposits during the quarter, mostly driven by frustration 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, five customers accounted for $120 million of that reduction. In terms of asset quality, the environment continues stable. I will say stable to improving from a credit standpoint, with most recent metrics moving in the right direction. Recent vintages performing better than prior vintages. Non-performing assets remain flat at 68 basis points of total assets and net charge-off came down during the quarter. This highlights the benefit of prior year's credit policy calibration and the improvement in the consumer vintages. 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. Consistent with the strategy that we announced, year-to-date we have deployed over 107% of earnings in the form of dividend buybacks and relational drops. And we definitely feel this action best suits the long-term interest of the franchise and our shareholders. So let's turn to page five to provide some highlights on the macro. You know, talking about main market, we believe the economic conditions and business activity in Puerto Rico and Florida are trending, continue to trend favorably. Obviously, there's economic concerns and uncertainty around tariffs and changes in U.S. policies, and the potential effect this represents obviously creates a degree of uncertainty for both retail and commercial customers, but we continue to see investment and commitment moving forward. The labor market remains strong, resilient, reflecting the lowest unemployment rate in decades. And after a few months of government transition, we're seeing some encouraging trends in disaster relief inflow, which continue to support economic activity and infrastructure development in the island. So those projects, which we also participate as it relates to affordable housing. In terms of the franchise, our key investments are technology, and we continue to increase that investment to achieve long-term growth for our business. We're also contributing to deliver our basic class efficiency ratio. Definitely, the franchise investment remains. improving our interaction with customers and provide them with a seamless experience through our multiple channels. The successful execution of our omni-channel strategy has been evidenced by the actually 8% annual rise in digital active customers achieved consistently over the past five years, coupled with a steady reduction in branch active customers over the same period. When we look at our strategic priorities for the franchise, supporting economic development, of course, our market is a main priority, lending to both consumer and corporations. If we break down our long growth for the first half of the year, commercial credit demand has been very strong, while residential mortgage has slightly increased, and consumer credit demand has been relatively steady. Based on current lending pipelines, reduction in in brother market uncertainty and our outlook for improving consumer health in puerto rico we remain confident that we can achieve our mid single digit long road guidance for the full year we still have you know half of the year to catch up the corporation track record speak for itself will continue to be return focus and allocate our capital where it makes more sense to our customers and shareholders as we do you know Every year we are reviewing our capital plan, and we will provide an update when we report third quarter results in October. Remember that we still have $100 million left of our 2024 buyback authorization, which we expect to opportunistically execute over the next two quarters, aiming to achieve our target of deploying 100% of our earnings to shareholders in the form of capital actions. Thank you for your interest and support, and thanks to our colleagues for their collective achievement supporting our customers. I will now turn the call to Orlando to go over financial resources in more detail. Orlando.