April 23rd, 2026

The call presents a clearly positive operating quarter: strong profitability, margin expansion, deposit growth, fee income gains and tightened expense guidance. Credit metrics mostly improved (NPL ratio fell) but net charge-offs rose due to a few identified commercial items and reserves were increased for specific exposures. Management reiterated conservative guidance on loan growth, affirmed capital-return intentions and called out macro risks (notably oil prices) and concentrated public deposits as watch items. Overall the positives across earnings, margins, fees and expense control materially outweigh the identifiable headwinds and one-off credit items.

Company Guidance

Management's forward guidance emphasized revenue, credit and capital targets: they now expect 2026 net interest income growth at the upper end of the 5–7% range (assumes no further Fed cuts) with NIM expected to expand later in the year, consolidated loan growth at the low end of the prior 3–4% range, quarterly noninterest income of $160–165 million, and annual net charge-offs of 55–70 bps; full‑year operating expenses are guided to rise 2–3% (vs. prior 3%), the effective tax rate is expected at the low end of 15–17% (~15%), Puerto Rico public deposits to remain $18–20 billion (Q1 ended at $19.7B), CET1 is roughly 15.9% with management targeting capital actions (they repurchased $155M in Q1 and expect to exhaust the remaining $126M authorization in Q2) and they plan to evaluate a dividend increase and other capital optimization before the next call.