Strategic Performance Drivers and Market Context

• Net income growth was primarily driven by higher net interest income and margin expansion resulting from fixed-rate asset repricing and lower deposit costs.

• The Puerto Rico economy remains resilient, characterized by historic low unemployment of 5.6% and strong consumer spending, with credit and debit card volumes up approximately 5%.

• Management reported a 15.5% ROCE for the period, driven by better NII, higher NIM, and lower expenses, while separately noting the accelerating pace of execution across strategic initiatives such as the launch of an integrated marketplace within the Mi Banco app.

• Operational efficiency improved through lower personnel costs and professional fees, even as the company continues to invest in technology and transformation programs.

• The tourism sector serves as a significant tailwind, with hotel occupancy reaching 83% and cruise arrivals increasing 40% year-over-year through February.

• Credit quality remains stable with lower nonperforming loans, though net charge-offs were impacted by a single previously identified commercial relationship.

Outlook and Strategic Assumptions

• Management raised the 2026 net interest income growth outlook to the upper end of the 5% to 7% range, assuming no further Fed rate cuts.

• Consolidated loan growth is now expected at the low end of the 3% to 4% range due to slower demand in consumer and auto segments.

• The effective tax rate for the year is projected at the low end of the 15% to 17% range, driven by higher expected excess income.

• Public deposits are anticipated to remain stable within a range of $18 billion to $20 billion for the remainder of the year.

• Strategic focus remains on reaching a sustainable 14% through-the-cycle ROCE objective while maintaining active capital return through buybacks and potential dividend increases.

Risk Factors and Structural Dynamics

• Management is closely monitoring geopolitical developments, as sustained high oil and commodity prices could impact the Puerto Rico customer base and energy costs.

• The allowance for credit losses increased by $16 million, partly due to a specific reserve for a single borrower in the telecommunications industry.

• In January, the company went live on a new ERP system, resulting in a shift of technology costs from capitalization to amortization.

• A strategic partnership between the Puerto Rico Tourism Company and Royal Caribbean is expected to establish San Juan as a home port starting in July 2026.

Q&A Session Highlights

Deposit retention and average account size trends post-tax season

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