Cadence Bank

Hello everyone and thank you for joining the first Bancorp fourth quarter 2024 and full year 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 telephone keypad. If you change your mind please press star followed by two. I will now hand over to your host Ramon Rodriguez, Investor Relations Officer to begin. Please go ahead.

Thank you Becky. Good morning, everyone, and thank you for joining FirstBank Corp's conference call and webcast to discuss the company's financial results for the fourth quarter and full year 2024. Joining you today from FirstBank Corp are Aurelio Alemán, President and Chief Executive Officer, and Orlando Vergés, 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 filing. 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 fppinvestor.com. At this time, I'd like to turn the call over to our CEO, Aurelio Alemán.

Thank you, Ramon. Good morning to everyone, and thanks for joining our earnings call today. I will begin by briefly discussing the business performance for the fourth quarter. Then we'll move on to provide some high-level highlights of how we performed during the full year. We're quite excited how we closed 2024 and with another quarter of consistent execution and strong financial performance. We earned 76 million in net income and grew pre-tax, pre-provision income by 5% to 117 million, primarily driven by net interest margin income expansion and our discipline expense management process. Return average asset was again strong at 1.56%, and the organization continued to operate at an efficiency ratio close to 52%, which is in line with our guidance. Turning to the balance sheet, the quarter was strong. Total loans grew by $303 million of 9.7% per quarter annualized, driven by growth actually across all business segments, consumer, commercial, and mortgage, and between Puerto Rico and the Florida region primarily, particularly within the commercial and construction lending segments. However, we saw we were expecting some portfolio repayments in the quarter, which came a little bit lower. We anticipate that some of that will come in, you know, between the first and second quarter of this year in the range of probably $5,200 million. In terms of deposit, core deposit trends were also very encouraging with total deposits other than broker and government up 2% sequentially. from private quarters and 4% when we include government deposits. As we have seen in private quarters, we see some seasonality in deposit inflows during the quarter that they are temporary in nature or they have to do with the variability of the government sector funding of reconstruction activity. Credit performance was Relatively stable during the quarter with non-performing assets hitting another record low of 61 basis points of total assets. On the capital front and liquidity, our liquidity and capital position remains very strong. We sustain our commitment to deliver over 100% of earnings in the form of capital actions by redeeming 50 million of our outstanding junior debentures and paying 26.3 million in common dividends. Even when accounting for these actions, our regulatory capital ratios increased during the quarter and remained significantly above what capitalized. We still have $200 million left in our capital plan authorization, which we expect to continue deploying through 2025 in a manner that best suits the long-term interests of the franchise. Please let's turn to slide five to provide some highlights of the year. The solid performance of the quarter got a year of record results for the franchise in the back of a positive economic backdrop of our operating markets. We raised, actually, total record revenue, 6% increase in any per share, and reached a multi-year low in non-performing assets. The portfolio expanded by 4.7%. of $569 million, we added $267 million in core customer deposit and distributed 100% of earnings to shareholders, loan growth was actually quite in line with our guidance of mid-single-digit growth. Consistent with our strategy, our well-positioned balance sheet allows us to capitalize on bond book and loan repricing opportunities under the current rate environment, while proactively managing funding costs that actually will continue through 2025. We're considering stable deposits going forward. Our asset mix will continue to skew towards higher-yielding assets, coupled with gradually declining funding costs to drive additional net interest income expansion in 2025. Over the course of 2024, our franchise made great progress advancing technology initiatives to improve our interaction with customers through both the convenience of digital channels and service-focused relationships with officers. We are achieving the targets we set to measure our strategic success, and we're seeing the benefit of the investment we made in technology to accelerate our growth and improve how we serve our communities and customers. As we look ahead, the operating environment For 2025, actually, the operating environment seems conductive of another year of positive performance and organic capital generation. If we look at the key economic metrics in the environment, during the fourth quarter, payroll employment continued to improve. Tourism metrics and passenger activity at our main airport reached record levels again. and disaster relief fund disbursement rate raised to another year of sequential increments in 2024. And we do expect this trend to continue as per the Puerto Rico planning board is forecasting another year of economic growth in 2025. So, given this backdrop for 2025, we're sustaining our mid-single G loan growth guidance. We're sustaining our 100% net payout ratio of our capital. That includes redeeming the remaining $61 million towards units that were into the ventures and executing reasonable share repurchase opportunities and definitely maintaining a sustainable dividend payout policy. In line with this guideline, we were very pleased to announce earlier this week that our board approved 13 percent increase in our quarterly common stock dividend that was raised to 18 cents per share. Again, we will continue to monitor general macro, how things develop, political changes as we execute our strategy, as we execute our capital deployment plan. And to close, I have to say that I'm really, really proud of what our teams have accomplished so far. We are very positive and look forward to to a very positive 2025 with optimism and excitement of what lies ahead of us. Now I will turn the call to Orlando to go over some more detail and we will be back for questions. Thanks to all.