Popular at Barclays Conference: Strategic Growth in Puerto Rico

On Tuesday, September 9, 2025, Popular Inc. (NASDAQ:BPOP) presented at the Barclays 23rd Annual Global Financial Services Conference. CEO Javier Ferrer highlighted the company’s robust performance in Puerto Rico and outlined strategic objectives for future growth. Despite potential risks such as tariffs and economic trends, Popular remains optimistic, focusing on customer satisfaction and shareholder value.

Key Takeaways

• Popular aims to achieve a 12% ROTCE by year-end, progressing towards 14%.
• The company maintains a 3% to 5% loan growth target, driven by commercial activity.
• Average deposit balances are 30% higher than pre-pandemic levels.
• Popular faces valuation discounts due to elevated disaster and credit risks in Puerto Rico.
• The bank’s relationship with public funds is seen as a long-term, profitable partnership.

Financial Results

• ROTCE Target: Popular aims for a 12% ROTCE by the end of the year, with a goal of reaching 14% in the future.
• Loan Growth Guidance: The company reiterated its 3% to 5% loan growth target for the year, supported by strong commercial activity.
• Deposit Balances: Average deposit balances have increased by 30% compared to pre-pandemic levels, indicating sustainability.
• CET1 Ratio: The second quarter saw a 20 basis point decrease in CET1, attributed to loan growth, buyback activity, and dividends.
• Public Funds Relationship: Popular views this as a long-term relationship, promising higher profitability.

Operational Updates

• Transformation Program: Currently in its third year, with a focus on simplification in the next phase.
• Strategic Framework: A new framework was unveiled, emphasizing shareholder value.
• Geographic Focus: Popular reports strong numbers in Puerto Rico and plans to defend and grow in specific segments.
• U.S. Market Headwind: The company anticipates some pay downs in the U.S., especially in the construction portfolio.
• Wage Increases in Puerto Rico: Minimum wages have risen by 40%, with construction sector wages up by 50%.

Future Outlook

• Economic Growth: Puerto Rico’s economy is expected to grow steadily or plateau around 2%.
• Potential Stimulus: Increased military spending in Puerto Rico could boost infrastructure improvements.
• U.S. Expansion: Popular continues to explore expansion opportunities in niche U.S. markets.
• Risk Factors: Potential risks include natural disasters and demographic trends affecting the public sector.

Q&A Highlights

• Valuation Discount: Popular attributes its valuation discount to disaster risk and economic trends in Puerto Rico.
• Federal Funds: These funds are collateralized with U.S. Treasuries, minimizing liquidity concerns.
• Military Spending Impact: Increased military presence could positively impact Puerto Rico’s economy.
• Credit Trends: Improvements are noted in commercial, mortgage, unsecured lending, and auto portfolios.

In conclusion, Popular Inc. remains committed to leveraging Puerto Rico’s economic environment and its strategic initiatives to meet financial targets. For more details, refer to the full transcript below.

Full transcript - Barclays 23rd Annual Global Financial Services Conference:

Jared, Conference Host/Analyst: Thank you, everybody. Continuing with the MeetCap Banks, we’re very excited to have Popular join us, coming up from San Juan. We have Javier Ferrer, the President and Chief Executive Officer, and Jorge Garcia, Chief Financial Officer, with us. Thanks a lot. Thanks for coming in.

Javier Ferrer, President and Chief Executive Officer, Popular: Great to be here.

Jared, Conference Host/Analyst: Hope it’s been a good day for you so far. Maybe just to start it off, just a little bit of an update on how things are going in the summer, where you’re seeing the state of things?

Javier Ferrer, President and Chief Executive Officer, Popular: I think it’s steady as she goes. We’re seeing a lot of good activity in Puerto Rico, a lot of momentum. The economy continues to be strong. I think that, of course, we’re benefiting from the Bad Bunny residency and,

Jared, Conference Host/Analyst: Yeah, definitely.

Javier Ferrer, President and Chief Executive Officer, Popular: That not only has brought in a big spend and a lot of movement and music and culture and food, but also a lot of visitors to Puerto Rico, not only from the United States, but also from Spain, Dominican Republic, and other parts of Europe. It’s been a pretty intense and beautiful summer, I gotta say, so far in Puerto Rico.

Jared, Conference Host/Analyst: You’re new to your role as CEO since our conference last year, but you’ve been part of Senior Management at the bank for a while. How should we view your priorities now compared to, you know, maybe where the focus was before?

Javier Ferrer, President and Chief Executive Officer, Popular: I have been with the bank for 11 years now. The last few years, with a very, very tight connection to the businesses and strategy and ultimately a transformation program, which is running on its third year. This December will be the last year of the first leg, as we call it, of the transformation program. Not many changes, I gotta say, Jared, but definitely changes, if any, on focus. We have, I think we’re focusing on the next leg of transformation, and that has a lot to do with the new strategic framework that we unveiled a couple of weeks back to the leadership and also to everybody at Popular. The idea behind it is to simplify what we’re trying to accomplish within transformation and the strategy of the corporation so that everybody can relate to what we’re trying to accomplish. I think that’s very powerful.

If you allow me, I’ll just go over the three objectives. I don’t think you’ll fall off your chair, because ultimately it’s about delivering value to our shareholders. The first one is be the number one bank for our customers, and that has everything to do with primacy. We have very strong primacy numbers in Puerto Rico, our top market. We need to continue to defend and grow in certain segments of primacy. It’s about share of wallets, being there for customers, earning their trust, delivering value for them. The second one is be simple and efficient. That’s exactly what it means. It’s very difficult to be simple, efficient. We need to make sure that we do things in a very cost-conscious way as we continue to invest in the company, and again, to deliver a best-in-class experience. The third one, be a top-performing bank, surprise, surprise.

That’s out there with what we’re trying to achieve in terms of our ROTCE target. We’ve put out a number. We continue to work towards wanting to hit 12% by the end of the year. We’ve hit it. We’ve talked about 14%. It’s all about profitability and also the employee experience, understanding that we need to have the best talent to run the bank and continue growing. Those three objectives have underlying areas of work. In some cases, it’d be digital experience, data analytics, payments, which is obviously key, given our footprint in Puerto Rico. I think the beauty of it is that it puts together an impact to our employees, our customers, and ultimately our shareholders. Transformation has given us some very good early wins, particularly on loan side products, small businesses being one of the segments that have been profitable for us in transformation. We won’t stop.

Our north is to continue to become the most profitable bank we can become. I understand that we have a big responsibility in Puerto Rico after under 32 years working there. There’s still room for us to grow in Puerto Rico the right way, and we intend to do it.

Jared, Conference Host/Analyst: Great. You know, as you said, Puerto Rico is benefiting from a sustained economic resurgence over the past few years with federal funding for infrastructure, potential benefits from onshoring due to tariffs, and of course, Bad Bunny summer residency.

Javier Ferrer, President and Chief Executive Officer, Popular: Yeah.

Jared, Conference Host/Analyst: How would you describe the current state of the economy and its resilience now?

Javier Ferrer, President and Chief Executive Officer, Popular: It’s strong. Puerto Ricans are resilient. That’s a great way of describing us, and you’re seeing it in the economy. Clearly, there’s some uncertainty out there given what’s coming out of Washington, the tariffs, and some inflation provoked by them. Again, we are not seeing any changes in the behavior of our customers. We are not seeing our commercial customers stop any of the big projects. We’re seeing people investing, both local, but also foreign investment and U.S. investment. Certainly, the fact that we are on the right side of the tariff wall and given our very strong manufacturing base and talent in Puerto Rico, we think that we are positioned quite strongly to continue attracting new investment. In the last few months, there’s been six, seven, eight new investment opportunities for people coming into Puerto Rico, either novel or expanding production in Puerto Rico.

We are very nicely located, and also, we have the fiscal flexibility of adding benefits to industries that want to move to Puerto Rico. It’s no coincidence that we have four of the top 10 pharmaceutical companies operating from Puerto Rico, and three or four of the top drugs in the world produced in Puerto Rico currently. We stand in the fact that hurricanes may hit us once in a while. We’ve come back. That’s why I love the resiliency of the word you used. It’s defined us. Right now, of course, no situation is perfect, but we like the trajectory of Puerto Rico. I think it’s going to continue. We don’t see anything that ought to stop it in the near to mid term.

Jared, Conference Host/Analyst: This past quarter, you announced a large public-private partnership. You’ve talked about the continued flow of capital into the island. What do the loan growth dynamics look like as we look out through the rest of the year and sort of a starting point for next year, both on the commercial side and certainly on the consumer side as people have more money?

Javier Ferrer, President and Chief Executive Officer, Popular: Where do you want to go?

Sure. Jared, we enter in the second quarter earnings call. We reiterated our 3% to 5% loan growth guidance for the year. That’s driven primarily by commercial activity, but certainly in Puerto Rico, we expect the consumer portfolio to continue to contribute, both in the auto lending and unsecured consumer product as well as mortgage. If you look at the first half of the year, we’ve been very happy with the growth both in the U.S. market and in Puerto Rico, both markets contributing to that. As we look through the second half of the year, we continue to see some strong pipelines, large deals in both Puerto Rico and the U.S., but we are expecting a little bit of headwind in the U.S., particularly with pay downs on our construction portfolio.

Our construction portfolio is mainly focused in New York, and it’s really a development that usually ends up in a term loan on multifamily CRE projects. We don’t always participate on the takeout loans. What we’re seeing is, given a reduced construction pipeline for some of the uncertainties that are well documented, we do expect projects to come to their end quicker. We’re expecting some pay downs in the second half, and that adds a little bit to headwind to then why we are in that 3% to 5% guidance.

Jared, Conference Host/Analyst: Is there any thought of changing the U.S. mainland strategy of your portfolio? You have tons of capital. You have strong deposits. Are you comfortable with your exposure on the mainland now, or could you look at expanding that at all?

Javier Ferrer, President and Chief Executive Officer, Popular: We always look at opportunities to expand our book in the U.S., particularly in the niche businesses we operate. They’re very profitable. Always looking for opportunities of expansion into other areas, also, but that’s not, you know, it’s what other people are doing. We always look at how to grow our U.S. bank. It’s something that, you know, we consider.

Jared, Conference Host/Analyst: Okay. You know, there’s what, almost $50 billion of federal stimulus still to come. I think there’s some concern before the election that a Trump presidency could be disruptive to Puerto Rico and the flow of capital for these rebuilding plans. What’s the state of the relationship between Puerto Rico and the federal government now, and what should we expect in terms of timing for the deployment of that capital?

Javier Ferrer, President and Chief Executive Officer, Popular: The state of the relationship is strong. I recognize, and we all were sort of a bit trepidant, when the President revalidated because we remembered that he had very public confrontations with a local politician, the Mayor of San Juan. Obviously, they’d make the news, and it was a big thing. I have to say that our new Governor caucused with the Republican Party when she was elected representative to Congress for a couple of terms without vote to the House of Representatives. When she was inaugurated in Puerto Rico, President Trump sent a letter congratulating her. The relationship between the Puerto Rico government and the White House is productive. We did get some cuts at the beginning of the Deutsche program, but they were not targeted to Puerto Rico. They were part of what was happening in the mainland, with Mr. Musk and his team.

That has subsided, but none of them cut the obligated funds, which are close to $77 billion, to spend in Puerto Rico related to the hurricanes and COVID. Some of the COVID will lapse, but we haven’t heard anything that would lead us to think that is going to change. There has been a change recently with the White House dismissing six of seven members of the Puerto Rico fiscal oversight board. We will have to wait and see who the new members are, what that will mean for the PREPA bankruptcy, and the rebuilding of the grid. We think that what’s been said is it’s been couched in terms of "make Puerto Rico great again," using the board more proactively to generate economic activity. We’re looking forward to that. Certainly, Popular has been a big participant in every single P3 project.

We’ve told the government of Puerto Rico, the federal government, and folks that are coming to the island to look for opportunities in that sector, in the energy sector, that, of course, we are best suited to be the local partner for our financing. Again, we are looking forward to what this change is fulfilling, and we’re hoping that it will be for the good of Puerto Rico.

Jared, Conference Host/Analyst: It feels, you know, over the last few weeks, there’s been a focus on the Caribbean in general from the military, and I saw that the Secretary of Defense, or Secretary of War now, was down in Puerto Rico and looking at expanding operations there. What’s the potential? I know that there’s really no info out there, but what type of a stimulus could that be if there was more military spending coming through Puerto Rico? Could that accelerate some of the infrastructure improvements that are?

Javier Ferrer, President and Chief Executive Officer, Popular: Yes, and yes.

Jared, Conference Host/Analyst: Happening?

Javier Ferrer, President and Chief Executive Officer, Popular: Yes and yes. It’s interesting that you ask that question because in one of our meetings today, the question that popped up, absolutely. In Puerto Rico, there’s always this issue of the past history of using some of the land in Puerto Rico for military training operations. The smaller island has raised political issues, obviously. If you’re reading the news, you’re seeing the deployment towards the military deployment, naval, vis a vis Venezuela. I don’t think, I mean, I don’t have approval of it, but clearly, you can connect the stance, the administration stance on Venezuela and the military practice that has occurred in Puerto Rico in the last couple of weeks. It would definitely, assuming that the military comes back into some of the bases and reactivates that side of its presence in Puerto Rico, it would be a net positive to the economy for sure.

Jared, Conference Host/Analyst: We have a few questions for the audience. I think we can run through them, but it’s end of the day. We appreciate that everyone’s a little bit tired. Right now, what’s your current position in Popular shares? One, overweight or long. Two, equal weight. Three, short. Four, not involved. We have some opportunity to convince some people.

Javier Ferrer, President and Chief Executive Officer, Popular: Then,

Jared, Conference Host/Analyst: Great. What would have the largest impact on improving the relative valuation of shares of Popular? One, better relative margin performance. Two, above peer loan growth. Three, better expense control. Four, credit quality outperformance. Five, more active share repurchase. Six, an accretive bank acquisition.

Javier Ferrer, President and Chief Executive Officer, Popular: Interesting.

Jared, Conference Host/Analyst: Loan growth and capital management with buybacks.

Javier Ferrer, President and Chief Executive Officer, Popular: Yep.

Jared, Conference Host/Analyst: All right. Any thoughts or comments on that?

Javier Ferrer, President and Chief Executive Officer, Popular: No. I mean, I think interesting to see the loan growth popping up here because, you know, when I think back of my, you know, my tenure, you know, as Controller before I was in the CFO role and team Puerto Rico, you know, have struggled on loan growth and then to have experience somewhere between 6% and 10% in growth in the, you know, post-pandemic era, really outpacing our U.S., which has, you know, historically been our growth engine. It’s interesting to see that there, because we’re very proud with the growth that we’ve seen in Puerto Rico, the economic environment, how we’ve been supportive of that, and still our, you know, bullish perspective for future growth in Puerto Rico, both from organic clients and deepening those relationships with our existing clients, as well as new entrants into the market.

You know, we certainly drive our teams to focus on loan growth. Good to see that’s aligned with the participants here in the crowd. In terms of active share repurchases, you know, we do have an active program and continue to buy. We still believe our share price is attractive and continue to be active.

Jared, Conference Host/Analyst: Great.

Javier Ferrer, President and Chief Executive Officer, Popular: Good alignment.

Jared, Conference Host/Analyst: Number three. What will organic loan growth be at Popular in 2026? On 3% to 5%, 2, 5% to 7%, 3, 7% to 9%, or 4, greater than 9%?

Javier Ferrer, President and Chief Executive Officer, Popular: Good question.

Jared, Conference Host/Analyst: I’ll call it 3% to 7%.

Javier Ferrer, President and Chief Executive Officer, Popular: Okay, we’ll give you the answer to that in January.

Jared, Conference Host/Analyst: Yes.

Javier Ferrer, President and Chief Executive Officer, Popular: We’re just going like this.

Jared, Conference Host/Analyst: Okay. Our final question: to what do you attribute the Popular valuation discount relative to peers? One, elevated disaster risk in Puerto Rico. Two, elevated credit risk due to higher consumer lending exposure versus peers. Three, potential for weaker economic trends in Puerto Rico. Four, longer-term uncertainty around NII due to reliance on public funds. A little bit of a mix including disaster. Let’s open it to questions in the audience. I think there’s a microphone over. Give us one second.

Unidentified speaker: Could you actually comment on those four items on that slide, just as to what is, you know, what is the other side of it to eliminate the concern of those things that are called out? Thank you.

Javier Ferrer, President and Chief Executive Officer, Popular: I’m going to start with one, even though we got zero, because this is something that for me is a good result. We don’t think we understand that where we are geographically, but I think our performance, not only the bank’s performance, but also Puerto Rico’s performance in bouncing back clearly with, you know, federal help, like in any other disaster situation in the United States, as, I want to say the proof is in the pudding, and we can continue reconstructing and rebuilding. It’s good to get this result because this is very real, very real, and it speaks to the depth of folks answering the question. Right? It would be a very pat answer to have given, you know, a big percentage to number one. I’m going to go to three. You want to do two and I’ll do three?

Jared, Conference Host/Analyst: Sure.

Javier Ferrer, President and Chief Executive Officer, Popular: Just so both.

Jared, Conference Host/Analyst: Okay.

Javier Ferrer, President and Chief Executive Officer, Popular: On elevated credit risk, when we look at our loan composition, we actually see that as a strength for Popular. It really differentiates us from other regional banks in the U.S. that maybe have a higher concentration in CRE given our broad base. We participate in all financial products for our consumer and commercial base, particularly in Puerto Rico. In consumer lending, we might have a higher exposure. We see that as a strength. We have to look at risk-adjusted returns on that, particularly our exposure to auto lending. The yields that we get on auto lending in Puerto Rico on a risk-adjusted basis probably represent maybe subprime lending in the U.S., while in Puerto Rico, it’s really a prime borrower. You look at our originations, they’re well above 700.

Obviously, there’s a history of Puerto Rico with maybe some mortgage losses and things like that, but that’s pretty far in the rearview mirror. Given unemployment rates of 5.5%, compared to maybe historical double-digit unemployment rates, given the amount of investment in Puerto Rico from private sources as well as the impact of the federal reconstruction funds and everything else going on, increasing wages, etc., the consumer in Puerto Rico is in a much stronger position today. We are focused. We spend a lot of time on risk management in this portfolio, but this is not something that’s at least not keeping me up at night. Three is somehow somewhat related to two. I’d say that, of course, there’s always potential for weaker economic trends anywhere.

I think that the economy in Puerto Rico is well diversified, and it’s had its bumps, but we don’t see anything, again, in the short term to mid term, which will negate its momentum. The projected growth is not going to be double digits or even high single digits, but it’s projected to continue growing steadily or at least plateau at about 2%, 1.5%, 2%, 2.5%. It depends which economies or who you’re talking to. There’s a lot of opinions. We’re thinking that given what we’re seeing, the investment, without considering events just like what Jared asked, which is a potential benefit to the economy, we feel that throughout time, the economy ought to do well, rebounding from the bankruptcy. There are certain things that we don’t control. We don’t control, again, natural disasters. We don’t control the quality of the public sector. We don’t control some demographic trends.

Puerto Rico typically rebounds and grows. For us, the important thing is to be a good partner there and continue to be profitable as the economy continues to generate positive results. I don’t believe that the bank is tethered to a potential growth rate. There are people who say, well, if the economy is only growing 2%, the bank is capped at that. I don’t believe that’s the case. It has not necessarily been the case in the past. If there’s a downturn, the way we look at it is we would be the stronger, we want to be the stronger bank so that we come out of the cycle bigger and more profitable. That’s why this impetus on our ROTCE results and profitability is top of mind for the institution.

Not that it has changed dramatically, but I think the focus on it is what is changing or has changed in the near term, in the last year or so. If you live in a place, you do your darnest for it to grow and do better. There are no guarantees. I see also the younger generation in Puerto Rico being a lot more entrepreneurs out of that generation, a lot of people thinking about exporting services and goods. I don’t think that it’s a given that Puerto Rico necessarily will exhibit weaker economic trends in the near term for sure. That’s not what we’re seeing.

Jared, Conference Host/Analyst: Maybe we’re at the last one?

Javier Ferrer, President and Chief Executive Officer, Popular: If you want to.

Jared, Conference Host/Analyst: Okay.

Javier Ferrer, President and Chief Executive Officer, Popular: On the last one, I think one of the first times I’ve seen this concept of a negative long term on reliance on public funds. I want to first highlight that I think of the public funds almost like a repo book. It is an important relationship. It’s not one entity. It’s not just a central government. It’s over 200 public entities. These are real clients, and we have deep relationships with them. We can’t really, you know, money is fungible, but all that money needs to be collateralized. It’s all collateralized with U.S. Treasuries or agency-backed securities. It’s not like we’re using that money to deploy it in lending, for example. It does not represent a liquidity event in that we could either monetize the collateral or use it as collateral to borrow in any one of our off-balance sheet sources.

Right now, the public funds, we like this relationship, but we’ve also extended the portfolios in 2022 to 2023. That relationship actually is not providing the level of profitability that it did maybe in 2021, in 2022, given the extension. Over time, this is actually a tailwind that is providing for the investment thesis in Popular as a nice tailwind of improving our NII as our laddered investment approach that’s funded by these deposits reprice. I invite the participants to look at our webcast deck. We provide quite a bit of information on there as to where we see the book maturing at what level and the yields on those maturities versus current market rates and the improvement that we can get. I actually see this in the short to midterm as a source of strength and driver of NII profitability.

In the longer term, we do believe that this is a long-term relationship that will continue to provide higher profitability than what it is doing today.

Jared, Conference Host/Analyst: Welcome.

Javier Ferrer, President and Chief Executive Officer, Popular: Thanks.

Jared, Conference Host/Analyst: Anyone else? Yeah. I guess sticking with the consumer discussion, we’ve seen the consumer in Puerto Rico, the strength improve consistently over the past few years. We’ve seen average deposit balances steadily increasing as well. Do you think this is sustainable? How should we think about baseline consumer deposit growth and seasonality, now that we’ve?

Javier Ferrer, President and Chief Executive Officer, Popular: Yeah. We saw, like many banks, an increase in average deposit balances during the pandemic as our clients benefited from all the stimulus from the federal government. We saw increases of up to 150% of average balances pre- and post-pandemic. Right now, we’re around 30% higher balances than pre-pandemic. We believe those levels are sustainable. During that period of time, what we have seen is that minimum wages in Puerto Rico have increased by about 40%. Wages in the construction sector, which is an important part and one of the areas of growth in Puerto Rico, have grown about 50% on the minimum wage there. All those have bumping up effects. When we look at our client activity, particularly around direct deposits, which is really driven by payrolls and salaries, we’ve seen an increase of about 40%.

That coincides with changes in the minimum wages and merit increases, etc., over that period of time. We do believe the levels where we’re at, we don’t expect to see a lot of degradation in those average balances. In terms of seasonality, we do see seasonality, and we expect that to continue. Additionally, the first half of the year sees some increases in deposit balances as particular retail clients benefit from tax refunds. Then we see them spend that in the third quarter. The fourth quarter has more stability with some bias towards higher balances. Some of those higher balances are driven by local laws that require employers to provide a Christmas bonus of at least $600 per employee. Our clients get that in the fourth quarter, and that supports a little bit of that activity.

Plus, you do get a little bit of a tendency of window dressing with commercial clients that might hoard some cash at the end of the year to strengthen their balance sheet for their audited financial statements. That’s a cyclicality we expect to continue. I think going forward, deposit growth in Puerto Rico is probably driven more by general economic activity, obviously inflationary effects and things like that.

Jared, Conference Host/Analyst: On credit, credit trends have remained better than what we’ve seen as historically been the longer-term normalized level. Given the stronger health of the consumer that you just discussed and broader economic tailwinds, do you think these lower overall credit levels are sustainable?

Javier Ferrer, President and Chief Executive Officer, Popular: I mean, there’s nothing that we’re seeing, as we’ve said various times today, that we’re seeing a shift or a change in the economic environment, the operating environment in Puerto Rico that would lead us to believe that should change. I’m very happy with how commercial portfolios and mortgage portfolios have performed. We did see some deterioration in the second half of 2023. We’ve reacted to that. We saw that normalization very quickly, particularly in the unsecured lending and auto portfolios, throughout 2024 and the first half of this year. There’s nothing within our parameter or focus right now that concerns us or that would change that. With commercial loans, you always can get idiosyncratic issues with any individual borrower that could have a temporary impact on that. There’s no industry or segment that we’re really focused on right now that would concern it.

Jared, Conference Host/Analyst: On capital, you know, capital is very strong, continues to grow, even with some of the capital management tools you’re utilizing. How are you thinking about optimal capital levels here? I know that you still wanna run maybe a little richer just given some of the geographic concentration. Longer term, where do you think an optimal capital level is for the franchise?

Javier Ferrer, President and Chief Executive Officer, Popular: I mean, we do have operating targets internally. We run stress tests that are important in establishing those operating targets, but we don’t make those public. Certainly, as a management team, we do agree that our CET1 levels are high. We do believe that we should be running at a higher level than our U.S.-based peers, given our geographic concentration in Puerto Rico, but we don’t believe that needs to be 400 or 500, 600 basis points, however you compare us to. We do, as a management team and as a board, have a conservative approach. We do like the flexibility and optionality that having higher levels of capital provide us, and we really want to bring those down over time.

Second quarter, CET1 came down 20 basis points, and that was driven by growth, loan growth, so increasing our risk-weighted assets, great opportunity to continue in that organic growth, strong buyback activity, and then the dividends. We want to continue to deploy those levers and bring down our capital levels over time. We don’t really want to do step functions. We do realize, we know the math. If you reduce the denominator and our ROTCE goes up, we understand the benefits of that. We are very much focused on improving the numerator, making sure that we improve profitability. We’ve been doing that. We understand the impact of reducing capital. That’s not, we’re not blind to that. We are focused on that. We believe that’s more transactional versus the sustainability. It’s going to really come from our investments and our efforts on the profitability side.

Jared, Conference Host/Analyst: Okay. Thanks. Any closing remarks?

Javier Ferrer, President and Chief Executive Officer, Popular: No. You know, it’s been a great day. Thank you. Thank you for having us. We’ve had fantastic conversations, one-on-ones, and appreciate the opportunity to be here.

Jared, Conference Host/Analyst: Thank you for joining us, and thanks, everybody, for joining us today.

Javier Ferrer, President and Chief Executive Officer, Popular: Thank you, Jared. Thank you, Jared.

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