OFG Bancorp (OFG) 2025 Q4 法說會逐字稿

Please stand by your meeting is about to begin. Good morning. Thank you for joining OFG Ban Corp's conference call. My name is Nikky and I will be your Operator today. Our speakers are Jose Rafael Fernandez, Chief Executive Officer and Chairman of the Board of Directors; Maritza Arizmendi, Chief Financial Officer. And Cesar Ortiz, Chief Risk Officer.

A presentation accompanies today's remarks. It can be found on the homepage of the OFG website under the fourth quarter 2025 section.

This call may feature certain forward-looking statements about management's goals, plans, and expectations. These statements are subject to risks and uncertainties outlined in the risk sectors section of OFG's SEC filings.

Actual results may differ materially from those currently anticipated. We disclaim any obligation to update information disclosed in this call as a result of developments that occur afterwards. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. Instructions will be given at that time.

I would now like to turn the call over to Mr. Fernandez.

Good morning and thank you for joining us. We are pleased to report our fourth quarter and 2025 results. Let's go to page 3 of the presentation to review the fourth quarter.

Earnings per share diluted were up 17% year over year on 2% growth in total core revenues. This was driven by discipline corporations and a favorable tax benefit. Asset quality and credit metrics were sound and well controlled throughout the quarter. During the quarter and year, in line with our strategies, we saw increased commercial loans and broad acceptance of our flagship mass market liberty account and mass affluent Elite deposit account.

Performance and credit metrics remain strong. Capital continued to grow, and we repurchased $40 million of common shares in the fourth quarter. Maritza will go into more detail on these numbers shortly.

Please turn to page 4.

We accomplished many of our strategic and financial goals last year.

Earnings per share increased 8.3% on a 2.8% increase in total core revenues. Total assets grew 8.4% to a record $12.5 billion. Core deposits grew 5% to $9.9 billion. Loans grew 5.3% to $8.2 billion with commercial loans growing to $3.5 billion now representing 43% of our loan book. In addition, new loan production increased 11.5% to $2.6 billion. We repurchased close to $92 million of shares and increased our dividend 20%.

Business activity is robust in Puerto Rico. The outlook for economic growth is positive, and businesses and the consumer are resilient. Having said all that, one of our biggest strategic and financial accomplishments of 2025 was the progress we made with our digital first strategy.

Please turn to page 5.

Over the last two years we have clearly emerged as a leader in banking innovation in Puerto Rico. Our digital focus gives us a differentiated approach and provides customers with a unique enhanced experience. In 2024. We introduced the Libre account for the mass market and the Elite account for the mass affluent market.

Both Libre and Elite have been successful in attracting deposits from new and existing customers. In addition, we enhance our Oriental Biz account suite, making treasury management easier and more secure for small businesses, driving a 5% increase in commercial customers during 2025.

We have further enhanced the customer experience through technology. In 2025 we launched our omni-channel platform. This provides customers with a seamless banking experience anywhere they choose to interact, transforming the branch into a place for building customer relationships.

With our intelligent banking model, customers now receive tailored insights based on cash flows and payment habits, helping them access and monitor their finances with real-time value-added tools to improve their financial life from their mobile phones.

Please turn to page 6.

All this has directly contributed to our increased market share in retail deposits and a 4% growth in retail customers. To put this into perspective, we have provided data showing our progress over the last two years. As you can see, OFG is well positioned for continued success in the coming years. Now here's Maritza to go over the financials in more detail.

Thank you, Jose. Let's turn to page 7 to review our financial highlights. All comparisons are to the third quarter unless otherwise noted. Core revenues total $185 million an increase of $1.4 million.

Total interest income was $197 million a decrease of $3 million. This reflected higher average balances of loans and cash at lower average yields. This was partially offset by higher average balances of investment securities at slightly higher yields.

Total interest expense was $44 million a decrease of $1 million. This reflected higher average balances of deposits and borrowings at lower average rates. Total banking and financial services revenues were $33 million an increase of $3.4 million.

This mainly reflected increased wealth management revenues due to $2.3 million in annual Insurance commission recognition. The other income category was a loss of $1.1 million compared to a profit of $2.2 million in the third quarter.

The change reflected $6.1 million for accelerated amortization of technology-related assets. Gains of $3.9 million on the sale of non-performing loans and $1.1 million on sales of real estate. Please note that the third quarter benefited from gains from OFG Ventures investment in fintech homes.

Looking at non-interest expenses, they totaled $105 million up $8.5 million from the third quarter. This reflected $3.3 million in professional services fees related to performance-based advisory costs. This was part of the cost savings renegotiation of a technology services contract.

$2.5 million of business sizing and $1 million related to the previously mentioned accelerated amortization of technology-related assets. Compared to the third quarter, there were $1.7 million in increased costs related to an additional accumulation of performance bonuses, expanded marketing activities, and the sales of foreclosed assets.

For 2026, we currently expect that total non-interest expense to be between $380 million to $385 million. Income tax was a benefit of $8.5 million due to two discrete items, $12.9 million from the expiration of a tax agreement from the 2019 acquisition of Scotia and Puerto Rico and USVI operations, and $3.9 million from a released evaluation allowance of deferred tax assets at the holding company level.

Excluding discrete benefits, the estimated tax rate for 2025 was 21.8%. Looking at some other metrics, tangible book value was $0.2996 per share. Efficiency ratio was 56.7%. Return on average assets was 1.81% and return on tangible return and return on average tangible common equity was 17.2%.

Now, let's turn to page 8 to review our operational highlights. Average loan balances were $8 billion up slightly from the third quarter. This reflected increases in Puerto Rico commercial loans, partially offset by lower balances in auto and residential mortgage.

Loan yield was 7.73%, down 70 basis points. This was mainly due to the effect on variable rate commercial loans from the Fed's 50 basis point rate cut in the fourth quarter.

New loan production was $606 million compared to $624 million. This reflected decreases in Puerto Rico and US commercial and consumer lending, partially offset by increases in auto and residential mortgage lending. Average core deposit balances were $9.9 billion up almost 1% from the third quarter.

This reflected increases in retail, commercial and government balances. By account size, it reflected increase in demand, time and savings deposits. Core deposit cost was 1.42%, down 5 basis points. This was mainly due to lower costs of government deposits. Excluding public funds, cost of deposit was 102 basis points compared to 103 basis points in the third quarter.

Investment totaled $2.8 billion down $96 million. This reflected principal pay downs and maturities, and it was partially offset by purchases of $25 million of mortgage backed securities and residential mortgage securitization of $21 million.

Average borrowings and brokerage deposits were $787 million compared to $769 million in the third quarter. The aggregate rate paid was 4.03%, down 8 basis points from the third quarter. End of period balances were $897 million compared to $746 million. This reflected increased broker deposits for liquidity management.

End of period cash at $1 billion was 41% higher, reflecting increased core and brokerage deposits. Net interest margin was 5.12%, within the range we had expected.

Please turn to page 9 to review our credit quality and capital strengths. Credit quality continues to be resilient. Provision for credit losses was $31.9 million up $4 million from the third quarter. This reflected $21 million for increased loan volume, $5.1 million for a specific reserve on a Puerto Rico telecommunications commercial loan $2.4 million related to the U.S. macroeconomic factors and $1.7 million in charge of from the sale of non-performing loans.

Net charge of totaled $27 million of $6.7 million. Net charge off included $4.8 million related to the sale of non-performing loans, of which $3.1 million had been previously reserved.

Looking at other credit metrics, we observe the typical seasonal pattern of higher delinquency and non-performing levels during the year-end period. Despite this, overall credit quality remains within expected ranges. Early delinquency rate was 2.8%, down from the third quarter and down year over year.

Total delinquency rate was 4.18%, up from the third quarter but down year over year. The non-performing loan rate was 1.59% due to the move to non-approval classification of the Puerto Rico telecommunication loan that I mentioned.

On the capital side, our CET1 ratio was 13.97%, stockholders' equity totaled $1.4 billion up $15 million and the annual common equity ratio decreased a basis point to 10.47%. To summarize the year, loans and core deposits both grew about 5% in 2025.

This year, we expect loans to continue to grow in low single-digits. We also expect retail and commercial deposit to increase with Libre Plus, Elite, Oriental Biz and our digital offerings driving customer growth.

As for the Puerto Rico, as for the large Puerto Rico government deposit, $500 million moved this month to our wealth management business as an advisory account. The remaining $600 million is staying as a variable rate core deposit.

Net interest margin was 5.27% for 2025. Looking ahead, net interest margins should range between 4.95%. to 5.05% in 2026. That takes into account two more 25 basis point costs, the effect of the partial exit of the government deposit and the incremental cost of funding to replace it of cost of funding to replace it.

Non-interest expenses total $389 million in 2025. We currently expect them to be between $380 million to $385 million this year.

Credit should remain steady, reflecting the strong economic environment in Puerto Rico. Our effective tax rate for 2026 should be around 23%, excluding any possible discrete items. Capital should continue to build, enabling us to continue to return capital to shareholders through dividends and buy back shares on a regular basis. Now here's Jose.

Thank you, Maritza. Please turn to page 10.

The Puerto Rico economy continues to be steady with a sustainable long-term outlook. Liquidity is solid, businesses and consumers remain resilient, and unemployment is low. Public reconstruction funds and private investments are providing economic tailwinds.

Manufacturing investments are continuing from multinational companies seeking on shoring solutions, particularly in the pharmaceutical and medical devices sectors, having said that, we always have to closely monitor all the global macroeconomic and political uncertainties these days and their political impact on Puerto Rico.

Turning to OFG, the success of our differentiated positioning has been evident over the last several years. We will continue to focus on the client experience with enhanced product tailoring strategies. Our Libre plus and Elite accounts offer AI insights and tools not available elsewhere in Puerto Rico. Commercial loan and deposit account growth is benefiting from deeper relationships and services, and credit and asset quality are sound and well controlled.

The technology investments we make and our continuous improvement culture are starting to produce tangible efficiencies. All of these give us confidence in in sustainable long-term growth across our core businesses. As always, we could not have achieved these results without the hard work of our dedicated team members. We're very thankful to them and excited about our future. With this we end our formal presentation. Operator, let's start the Q&A.

(Operator Instructions)

Kelly Motta, KBW.

Hey, good morning, thanks for the question. May be to just kick it off with credit just given that provisions were a bit elevated for the second quarter now, can you provide additional color into, the larger, Puerto Rico charge off this quarter as well as I know there was some movement in [NPLs] with some sales. Can you provide more color as to, what was done there and what migrated back in? Thank you.

Yes, hi Kelly, this is Jose. I'll let Cesar, take that question.

So the charge-offs that you're looking into in the quarter are the result of a sale that we performed of, that released $17 million in non-performing loans during the quarter, and that really, triggered charge-offs, et cetera. But the result at the end of the day was a gain of $3.9 million that we reported.

Off set of course by the NPL of a loan, telecommunications loan that, what was, recorded as non-accrual and non-performing during this quarter. So that, that's basically the moment in non-performing during the quarter and commercial

So when you look at it, it's $45 million on the communication loan minus the $17 million on the sale of the NPLs, and that's why you see the, increasing NPLs, in the quarter and particularly on the commercial. So it's only one loan and it's not a something that it's across the across the portfolio we just see this as very idiosyncratic.

Yeah, and just to add and I share a little bit on my prepared remarks there was a charge of related to the sales of about $4.8 million and a big portion of it was already reserved it was about $3.1 million that was already reserved.

Got it. And then on loan growth, I mean you've been talking about auto being more competitive and in prior calls and such, in terms of your outlook for low single-digit loan growth ahead, can you provide additional color in terms of what's the driver of that is the expectation that auto will be kind of more muted like the past two quarters. Thanks.

Yeah, that's a great point. We see auto starting to stabilize at this at these levels, as again in Puerto Rico you also are starting to see a stabilization in the new car sales. So, we look at auto balances to be down in the year between 2% and 3%. We also see commercial loans up 5%, 6% during the year, both Puerto Rico and U.S. So with that kind of set up we see consumer going up a bit, mortgage also is trending down but less than in years past we see those single digits as a reasonable target for us for loan growth overall.

Got it. Last question if I can just sneak it in is on your expenses [380 to 385], relative to your operating is relatively flat year over year. Can you provide like your confidence in that and the drivers of those increased efficiencies?

Well, yeah, thank you for your question, Kelly. The range reflects our continuous investment in technology and people capabilities, talent to continue driving the digital affairs strategy that we are deploying constantly in the bank. And we are harvesting certain efficiencies like this year we have, if you look at our full-time equivalent employees, there are 30 people, 60 altogether, no? so we continue to expect that number to go down, but we need to continue reinvesting.

That's why we see expenses to continue to be flat this year, but. We're thinking that by the end of the year we will start seeing some of that saving and the 2027 and 2028 we see savings to accelerate, and we will see that more in a tangible way for 2027, 2028.

It's something that we've always kind of been very cognizant of these investments in technology they certainly have enhanced the customer experience in a significant way and is providing us the ability to grow and differentiate ourselves but it also has a very intentional effort to bring efficiencies to the bank and this is the first year where we are seeing in 2026 we're seeing the expense range is flattening it out and it has everything to do with a little bit of what we've done in the past but it's been more importantly on the culture of a continuous improvement and how do we look at processes to simplify them, make them more agile and really try to eliminate.

Interactions and processes that are very manual and very with very little value add try to convert them into technologies and use the blockchain and all the technology all the robotics. You know we're starting to use all those things, and we feel more confident in our expense ranges in '26 for sure and we will continue to work hard to bring additional expense reductions in '27 and '28 Maritza mentioned.

Great thank you so much I'll step back appreciate the color.

Yes, thank you, Kelly.

Arren Cyganovich, Truist.

Thank you, good morning, Jose I was wondering if you could talk a little bit about, what you're viewing is the best strategic initiatives or your focus on strategic initiatives for 2026 maybe relative to 2025. It seems like you're making a good push, on the deposit side and of course always investing in technology.

Yeah, thank you Arren so we will continue to enhance our retail efforts it's not something that we're going to, decelerate so we will continue to invest in enhancing the customer experience, adding additional functionality to our omni channel platform and drive, additional benefits for our customers on the retail side and you'll see some of those, playing out through throughout 2026.

But in 2026 our focus is going to be much more on commercial and we are, we see a good opportunity as you as you saw we grew 5% of our customer commercial customers last year. And I think we have an opportunity here to continue to translate the same strategies that we have done in terms of technology and digital, translated as it is appropriate on the commercial side, and it's going to be a journey, it's going to be 33 years or so for us to be able to deploy all this and all that stuff.

But that's where we're going to be putting, more effort we see an opportunity for us to keep growing our commercial business and we think the Puerto Rico economy is supporting that and also as a bank feel compelled to invest in small and mid-size clients and help them grow because that's critical for the growth of our of our economy here in Puerto Rico we're really focused on the Puerto Rico market and we feel that we have a great opportunity there.

Thanks, and on capital return, I think Maritza said that, or she expects capital to build, so to return capital to shareholders. I'm trying to balance the, two. What's the expectations for, capital return for 2026?

I think, the fourth quarter, capital actions that we took in terms of the buyback. I think it's going to become more, given our evaluation, right, given the way the market is valuing our stock and given the multiples that they're assigning to us versus our peers, we feel the best, use of our capital, after long growth and. Balance sheet growth is buying back shares and so we will continue to be very intentional there we certainly will also look at the dividend but again we see some differentiation in the evaluation there and we feel that it's the best the best way' to reward our shareholders by buying back shares.

Great and then just lastly some clarification on your answer about expenses, the expense reductions in 27 and '28, is that more so thinking about the efficiencies that you're going to get from actions you're making this year and then I guess I'm just thinking like is it actually going to go down or are you going to have some part going down and some growth on top of that.

So I don't want to put the car in front of the horses, right, but I tell you we're working very hard to bring additional efficiencies during 2026 that will play out in '27 and '28. We will give you more details as we execute on those initiatives but as Maritza mentioned.

We are looking at FTEs and where can we redeploy our people talent to more customer facing and value add building relationships type of talent versus having FTEs sitting behind a desk in operations and servicing and pushing papers and dealing with excel spreadsheets to manage different, functions and I can give you an example we have been able to automize the entire fraud management processes just simply by using robotics and being able to eliminate several.

FTEs that were basically managing fraud on a daily basis and those are some of the small examples that we can provide and I'm sure you know many banks in the U.S. and in Puerto Rico are also doing the same we're trying too hard to bring it bring down expenses not without investing in technology, investing in our people and continuing to do the right thing for the long-term of our franchise which is critical for us it's important.

Great, thank you.

Yeah, you're welcome.

Brett Rebatin, Hovde Group.

Hey, good morning, everyone. Wanted to start on the margin and just on the fourth quarter wanted to get a little better color on the link quarter change in the loan yields which had been fairly stable up until this quarter so just the 17-basis point length quarter change was just hoping to figure out how much of that was the large non-accrual loan and any other comments on the loan portfolio yield change link quarter.

Yeah, thank you, Brett, for your question, and remember that we are asset sensitive and we continue to be asset sensitive and this quarter, as I mentioned in my remarks, the loan yield went down basically because of first the 50 basis point cut during the quarter, but also we have the full effect of the September 25, basis cut so that's one of the main drivers for the reduction in the name, and we were able to compensate that through our government deposit variable rate because it also get a reduction there, but it reflects our asset sensitive positioning.

And I think also you're also on the loan side you're starting to see since we have moved our auto originations to higher significantly higher quality we have been able to we're also seeing a slight decrease in the yield coming in on the auto lending side and that's just a testament to the credit quality that we're bringing in better credit quality.

Okay, that's helpful. And then just thinking about the margin guidance for '26, it was nice to see that the funding costs, which were up a little bit in 3Q, moved back down in the fourth quarter, is the margin guidance for '26, does that reflect some additional.

Leverage to lower funding costs from here, you, one of the key things that's always been a question is Puerto Rico has lower cost deposits the mainland, how much can those go down as rates go down given, they're already fairly competitively priced.

Yeah, the reality is when you look forward for this year 2026, we will have a change in our funding mix because the $50 million ex $500 million exit in the bank, now moving to the wealth management business, and we will replace that with wholesale funding and that carries a higher cost of about 25 basis points to 40 basis points depending on the terms of that wholesale funding, but the reality is that we will have that change, and that's part of the impact of the but when you look at 2026 will have the full effect of the 75 basis point cuts that happened in the in the last part of 2025.

You will have all that full effect, plus we are also foreseeing two additional costs during 2025. And we are sensitive. We have more assets repricing than the deposit side. That's why we are giving that indicative in the margin that guidance. And when you look at 2024 versus 2025, it reflects that. We had a margin in 2024 of 5.43%. This year, it was 5.27%. It was about 16 basis point reduction, and it's related to the rate cost of 100 basis points late 2024 and this year 75 basis points end of 2025.

Right, and I would also add, and as you saw this quarter and you saw throughout 2025 core deposits excluding government went up on the retail side as well as on the commercial side and that is also something that we expect to help mitigate what Maritza just said, right, because the more core funding that we bring in. It's going to be cheaper than wholesale funding,

so we, our margin guidance is the margin guidance and that's how we see it, but we're going to be working hard to beat that margin guidance as you guys, can expect. So we'll update everybody on the first quarter when we talk again.

Okay, if I could ask one last one, the other thing I was hoping to figure out was if you look at slide 20, it has the auto portfolio net charge off rate, it was a little bit higher in the fourth quarter as were NPLs and just wanted to see if the higher level in 4Q if that seems to be an anomaly or a year in clean-up of the portfolio or what have you versus something maybe you're seeing with the book.

Yeah, Cesar can take that one.

This is like Maritza mentioned before, it's typical that the seasonality of the portfolio starts very low in terms of delinquencies and non-performing loans in the first quarter of the year, and then it takes up until the fourth quarter, and at the fourth quarter is at the upper level of that equation.

But nature jobs, if you compare the nature jobs, we usually compare it to last year, same period last year, and what you saw, what you see there is 1.63% last year, but that was benefited because we sold a charge of portfolio. Without that sale, that number would have been 1.86%.

We are right now at 1.81% this quarter, so it is a positive sign, but again, the seasonality of the portfolio will result in an increased delinquency in this quarter, but we expect that benefit in the next quarter. You're going to see a positive effect on all those metrics.

Okay, it's that's.

(multiple speakers)

No, it's just end of the year seasonality, and we'll, we're, we'll keep on, keep you guys updated in the first part of the year and see if that, turns around again, but that's what we've seen in the last three years. We'll be watching closely in the first part of this year to see if that replicates again.

Okay, great sorry for interrupting and thanks for all the caller.

Yeah, thank you for your question.

Timur Braziler, Wells Fargo.

Hi, good morning, maybe bigger picture, on the credit, hi, can you hear me?

Operator we can't hear it anymore.

Okay perfect sorry about that, maybe just a bigger picture on credit, if we look at kind of 1% full year charge off rate. Is that kind of a good proxy for where we are in this, post pandemic cycle, and then if you look at the allowance ratio, year over year you added a little bit over $25 million to allowance, you built that to almost, 2.46% of loans.

I guess how do we think about, the allowance bill in 2025, what that might portend for charge off activity in 2026, and then you know what does a stabilized level of credit activity look like going forward here?

Well, I think that the 1% range that you're mentioning is within what we can expect here in nature if we look at 2025 without any specifics of the sales or any particular case, that should be a good run rate. When we think about how we build the reserve, please be mindful that there's some specific reserve at the end of this year related to the telecommunication loan, so that's a very isolated case, very specific.

So, setting that aside, I think that we will continue, monitoring credit and building reserve as needed, but 1% net charge of delinquency remaining at the level that we're managing this year.

Maybe we won't be reserved at the same level because of the specifics that we have this quarter, but definitely it could be about flat from what we have right now, excluding any specific case that we have managed during the year, okay.

Got it. And then the telecom credits this quarter, was there anything incremental that happened in 4Q that drove the activity, or is this just really recalibration of maybe what the other banks were talking about in the third quarter and you guys kind of catching up to that, same level of reserving in the fourth quarter?

No, it's basically we receive financials every period. So last period, didn't, warranted a right away, no accrual status, but this period it repeated the deterioration of the, on the financials. So basically, we decided, yeah, this is a declaration that merits the no accrued status.

Yeah, and at the end this is a loan that is continues to pays it stays paying so what we're doing is being, prudent and given the specific situation of the company that comes from the outcome of a merger, we decided to put it in our accrual.

Got it. That's great color. Thank you and then just last for me, you guys have had really good success rolling out some of these retail deposit products during the course of 2025 that have been, differentiated from what the Island typically sees. I'm just wondering from a competitive standpoint, what's been the reaction and as you think about, Puerto Rico ex public fund deposits during 2026, during 2027.

Does it feel like the competitive nature is shifting now and do you still think you can maybe get those lower with these rate cuts, or is the competitive nature such that even with these rate cuts, the cost of the core Puerto Rico deposits are likely continuing to rise here?

Yeah, I think the competitive landscape is slowly but surely intensifying. I think, each institution has its own drivers, right, and some of the drivers that come in from the reinvestment in the investment portfolio at a higher yield. Gives flexibility to be more competitive and more aggressive on some of the CD offerings and stuff like that.

So I, I'm not saying that we are going out crazy here in the market in Puerto Rico in terms of deposits, but it's slightly and slowly but surely getting more intense in terms of a deposit competition. Also be aware that we have credit unions, U.S. credit unions that are and have been for the last three or four years very aggressive they remain.

So and that is also, part of the equation here in Puerto Rico this this tax-exempt credit unions, they have another lever there that allows them to be more aggressive on the deposit side so that's our strategy is to target the mass and the mass affluent we have come up with the products we have come up with the differentiation in terms of our platforms in technology and the way we do the business that's the formula that we're using and it's paying off I'm sure our friendly and larger competitors are also doing their thing and I'm sure they're going to be very competitive throughout so it's just now blocking and tackling and trying to achieve organic growth on the loan side and on the deposit side and it's exciting for us at this juncture how we are well positioned to achieve both.

Got it. Thanks for the call. Appreciate it.

Yeah, thank you, Tim.

Manuel Navas, Piper Sandler.

Hey, good morning. I just wanted to follow-up on that last question. Has there been any price response from other players on the Island from your new, Libre and Elite products, and where are those having the most success? Yeah, happy to hear a little bit more of those two products as well.

So there's no need to be to have a price response because we're not paying high yields. So I don't know where the idea that we're, kind of bringing in higher yields or so it really its actually Libre account is a non-interest-bearing account, so I don't know what where that comes from but Elite it does pay 1.28%.

Average cost of funds on the balances that we have and that is the way we approach the mass affluent and it's paying off and it's doing well because it's not about the rate only it's about the what we offer as a product and what is the value proposition that we bring into the equation here and it's not only a rate it's more than a rate it's the functionality is the accessibility is the everyday every time anywhere.

Wherever you are and the fast, the agile way we service our customers in any interaction that they have with us that brings us the ability to attract, deepen and expand relationships across the markets that we operate, which is here in Puerto Rico, so reaction from the competition zero there's no, increasing in competition in terms of rates here. What we're seeing is more on a targeted basis CD rate, and that's what I mentioned earlier, Manuel.

Oh, I appreciate that and it is pretty early innings, but you're seeing that deeper relationship. Are you seeing younger, clientele in these accounts as well, given they're a little bit more digital forward.

Actually, that's a good point Manuel. Given Puerto Rico's demographic, demographics, what we're seeing is that I'll share this information, 75% of the accounts that we're opening on the Libre account are new customers, 40% of those are 29 years or younger.

And to us that is extreme extremely positive because it allows us to build a long-term relationship and build a long-term franchise with them so it's exciting times for us that's kind of the crux of the matter you actually pointed out one of the great things that is going on in the last couple of years.

I appreciate that extra color, going back to the NIM for a moment, as you're targeting a little different auto client and commercial loans are adjusting. What are kind of some of your new, yields coming on, especially in those two categories in auto and commercial?

So commercial, remember our commercial originations are 50% fixed 50% variable, and the rates are depending on the type and the and the size of the commercial loan but it ranges between let's say 275 basis points to 350 basis points above the term that we're lending at. So that's kind of I'm giving you a range and you can get on the lower end when it's larger, a larger account, a larger loan or if it's small business or a larger commercial account or a loan so that's on the commercial side on the auto side.

I think the yields are in the eight handle eight and change, it is coming from the higher eight levels it's now stabilizing around 830 or 840 or something like that between 830 and 850 and it's all about, certainly competition but also us originating close to 90% of our loans in prime loans and super prime loans.

Okay, that's really helpful and then my, I guess my just my last question is there a level, I appreciate the commentary around the buyback. The pace was a little accelerated in the fourth quarter. Do you think we stay at this fourth quarter pace, and is there any price sensitivity or where is there some price sensitivity on repurchases?

Well, I'll repeat what I said earlier, Manuel, because we don't have a price target we do, we do see the market being, kind of penalizing us a bit on in terms of the multiples that they're pricing was at so I think, we kind of look at the market in general we see where we can deploy our capital in terms of loan growth this year we're probably going to grow single-digits.

As I said earlier, low single-digits because of what I mentioned earlier on the auto so we might have more ability to deploy capital by through buybacks throughout the year, but we don't have a set, a number or a set stock price to go after it's just a part of our natural ongoing capital management strategies.

I really appreciate the commentary. Thank you.

Yes, thank you for your questions, Manuel, and welcome to the calls.

Thank you.

Yeah.

(Operator Instructions).

And at this time if there are no further questions, I will now try to call back over to management for closing remarks.

Thank you, Operator and thanks, again to all our team members, thanks to all our shareholders who have listened in, looking forward to our next call, have a great day.

Thank you.

This does conclude today's program.

Thank you for your participation, and you may disconnect at any time.