Popular, Inc. Q4 FY2025 Earnings Call

Hello, everybody, and welcome to the Popular, Inc. Fourth Quarter 2025 Earnings Call. My name is Elliot, and I will be coordinating your call today. If you would like to register a question during today's event, please press 1 on your telephone keypad. I would now like to hand over to Paul Cardillo. Please go ahead. Good morning, and thank you for joining us. With me on the call today is our President and CEO, Javier Ferrer-Fernández. Our CFO, Jorge Garcia, and our CRO, Lidio Soriano. They will review our results for the full year and fourth quarter and then answer your questions. Members of our management team will also be available during the Q&A session. Before we begin, I would like to remind you that during today's call, we may make forward-looking statements regarding Popular, Inc., such as projections of revenue, earnings, credit quality, expenses, taxes, and capital, as well as statements regarding Popular's plans and objectives. These statements are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements are set forth within today's earnings release and our SEC filings. You may find today's press release and our SEC filings on our webpage at popular.com. I will now turn the call over to our President and CEO, Javier Ferrer-Fernández.

Thank you, Paul, and good morning, everyone. Please turn to slide four. 2025 delivered results that reflect the strength of our franchise and the continued stability of the Puerto Rico economy. Our annual net income of $833 million increased by $219 million or 36% compared to 2024. Our strong fourth quarter loan growth helped bring our total growth for the year to $2.2 billion, an increase of 6%. Banco Popular generated loan growth across most business segments, led by commercial loans. Popular Bank achieved growth in commercial and construction loans. Credit quality generally remained stable throughout 2025, aside from a couple of isolated commercial credit relationships in the third quarter. For the year, net charge-offs decreased by 16 basis points to 52 basis points. Our capital levels are strong, ending the year with a common equity tier one ratio of 15.7%. Our tangible book value per share of $82.65 increased by 21% year over year, primarily due to lower unrealized losses on investment securities and net income for the year, offset in part by dividends and our share repurchase activity. We repurchased approximately $500 million in common stock during 2025. Since resuming buybacks in 2024, we have repurchased approximately $720 million worth of common stock. We continue to believe that our shares are attractive at current prices. Additionally, in the fourth quarter, we increased our quarterly common stock dividend by $0.05 to $0.75 per share. Please turn to slide five, where we share highlights that reflect our strong operating performance in the fourth quarter. We reported net income of $234 million and EPS of $3.53, an increase of $23 million and $0.38 per share, respectively. Our results were driven by higher net interest income, an expanding net interest margin, strong loan growth, and importantly, lower operating expenses. Our credit metrics were stable in the quarter with lower NPLs and net charge-offs. We are very pleased to have exceeded a 14% ROTCE for the quarter and a 13% ROTCE for the full year, demonstrating significant progress in our efforts to improve our sustainable returns towards our 14% objective. Please turn to Slide six. As of the end of the fourth quarter, business activity in Puerto Rico continued to be solid, as reflected by favorable trends in total employment, consumer spending, construction, tourism, and other key economic data. The unemployment rate of 5.7% remains stable near all-time lows. Consumer spending remains healthy. Combined credit and debit card sales for Banco Popular customers increased by approximately 5% compared to 2024. We also continue to see healthy demand for homes in Puerto Rico. Mortgage balances at Banco Popular increased by $115 million during the quarter. The construction sector continues to show positive momentum, with public and private investment fueling higher employment levels and driving cement sales to the highest level since 2021. We are optimistic that these trends will persist given the backlog of obligated federal disaster recovery funds, publicly announced real estate and tourism development projects, and the renewed focus on reshoring by global manufacturing companies. The tourism and hospitality sector continues to be a source of strength for the local economy. In 2025, airport passenger traffic reached a record of 13.6 million, increasing by 3% compared to 2024. During the fourth quarter, passenger traffic remained stable at around 3 million passengers. And according to Discover Puerto Rico, in the fourth quarter, hotel demand reached nearly 250,000 room nights, marking 11% year-over-year growth and driving a 4% increase in total revenue. We are executing on our strategic framework to be the number one bank for our customers by strengthening relationships and providing exceptional service and products to our customers. We are also focused on delivering solutions faster and improving productivity while reducing costs. Ultimately, our goal is to be a top-performing bank. In addition to the rollout of a commercial cash management platform, we also deployed a new consumer credit origination platform in Puerto Rico and The Virgin Islands. This platform provides a fully digital origination process for personal loans and credit cards. We saw an upward trend in online originations during the fourth quarter and have originated approximately $36 million since launch in the third quarter. We have continued to invest in our physical retail network to blend the speed and convenience of self-service with in-person support. Our branches continue to be an advantage in Puerto Rico and The Virgin Islands. As we continue to modernize our channels and platforms, we are creating a more seamless experience to provide our customers with the flexibility to connect with Popular through the channel that best fits their needs without compromising the quality of our service. We are also seeing the results of our focus on being simple and efficient. We have sustained and continued to simplify our commercial credit origination portfolio risk management. We are seeing faster cycle times, higher banker productivity, a more seamless customer journey, and loan growth in our small and middle market segments. During the year, we also executed a series of sustainable efficiency initiatives, including exiting our mortgage business in The United States, optimizing our mortgage servicing business in Puerto Rico, and transforming our ERP solution to a modern, cloud platform that significantly improves agility and performance. Currently, more than 800 of our colleagues are working on these projects. We are very proud of the progress that we have made. I will now turn the call over to Jorge for more details on our financial results.

Thank you, Javier. Morning, and thank you all for joining the call today. As Javier mentioned, our quarterly net income increased by $23 million to $234 million and our EPS improved by $0.38 to $3.53. Excluding the partial reversal of the FDIC special assessment, adjusted net income for the quarter was $224 million, an improvement of $13 million from Q3. These results were driven by better NII and lower expenses. As we have mentioned before, our objective is to deliver sustainable financial results. While we benefited from the FDIC reversal, we are pleased to have exceeded 14% ROC for the period and 13% ROC for the full year. In 2025, we executed targeted initiatives to improve profitability by growing the top line and capturing sustainable cost efficiencies, both of which are key drivers of the ROX numerator. Looking ahead for 2026 and beyond, we will build on this progress and continue to drive improvement in operating leverage and profitability. At the same time, we see capital levels as a meaningful driver to improve Roxy. Our current objective remains a sustainable 14% Roxy. We will continue to use all available levers to position the company as a top-performing bank when compared to mainland peers. Please turn to slide eight. Our net interest income of $658 million increased by $11 million and was driven by higher loan balances, fixed-rate asset repricing in our investment portfolio, and lower deposit costs in both of our banks. For the year, NII increased by $259 million or 11%. During the quarter, our net interest margin expanded by 10 basis points to 3.61% on a GAAP basis. Our fully tax-equivalent margin improved by 13 basis points to 4.03%, driven by higher loan balances and lower interest expense, primarily due to lower balances and cost of Puerto Rico public deposits. Loan growth of $641 million in the quarter was strong, with both banks contributing to that increase. At BPPR, we saw loan growth of $497 million driven primarily by commercial and mortgage lending. At Popular Bank, we saw loan growth of $144 million, mainly driven by commercial lending. For 2026, we expect consolidated loan growth of 3% to 4%. In our investment portfolio, we continue to reinvest proceeds from bond maturities into US treasury notes and bills. During the quarter, we purchased approximately $900 million of treasury notes with a duration of 2.1 years and an average yield of around 3.56%. We expect to maintain a two to three-year duration in the investment portfolio. Ending deposit balances decreased by $323 million and average deposit balances decreased by $880 million. This decline was mostly driven by anticipated outflows from Puerto Rico public deposits, which ended the quarter at $19.4 billion, a decrease of $662 million compared to Q3. We continue to expect public deposits to be in the range of $18 billion to $20 billion. At BPPR, excluding Puerto Rico public deposits, ending balances increased by $525 million, driven by growth of $430 million in commercial demand deposits. Average deposits increased by $192 million. Total deposit cost decreased by 11 basis points at each bank. At BPPR, the decrease is mostly a result of Puerto Rico public deposits repricing lower by 22 basis points due to recent interest rate cuts by the Fed, while non-public customer deposit costs decreased by one basis point. At PB, the reduction was mainly related to lower online savings deposit costs and repricing of time deposits. We anticipate 2026 NII will increase 5% to 7%, driven by continued reinvestment of lower-yielding securities and loan originations in the current rate environment, as well as lower cost of Puerto Rico public deposits and online deposits at Popular Bank.

And thank you all for being with us. Turning to Slide number 12. Credit quality metrics remained stable during the fourth quarter, with lower NPLs and lower net charge-offs. Non-performing assets and loans decreased by $4 million this quarter, mainly due to Popular Bank. U.S. NPLs decreased by $14 million as a $17 million mortgage relationship returned to accrual status, offset in part by higher commercial NPLs. BPPR NPLs increased $5 million, with commercial up $8 million, consumer up $3 million, offset in part by an $8 million decrease in mortgage NPLs. Inflows of NPLs declined by $194 million, primarily in BPPR, as the previous quarter included inflows from two unrelated commercial relationships totaling $188 million. The ratio of NPLs to total loans held in the portfolio decreased three basis points to 1.27%. Turning to slide number 13, net charge-offs amounted to $50 million or annualized 51 basis points compared to $58 million or 60 basis points in the prior quarter. This quarter's results include $5 million in recoveries from the sales of previously charged-off auto loans and credit cards. Excluding this, the net charge-off ratio was 57 basis points. Net charge-offs in BPPR decreased by $7 million, driven by a decrease in commercial net charge-offs as the prior quarter included a $40 million charge-off related to a single borrower. In 2025, net charge-offs were 52 basis points, an improvement of 16 basis points from last year, driven by lower consumer net charge-offs. For 2026, based on current trends and macroeconomic outlook, we expect annual net charge-offs of 55 to 70 basis points. The allowance for credit losses increased by $22 million to $808 million, mostly in BPPR, due to higher reserves for the commercial portfolio driven by higher balances, specific reserves, and loan modifications, coupled with higher reserves for consumer loans due to changes in FICO mix. The compression ratio of the ACL to loans held in the portfolio remains stable at 2.05%, while the ratio of the ACL to NPLs was 162% compared to 157% in the previous quarter. The provision for loan losses was $71 million, down $3 million from $75 million in the prior quarter. For the BPPR segment, the provision was $72 million compared to $74 million in the previous quarter. With that, I would like to turn the call over to Javier Ferrer-Fernández for his concluding remarks. Thank you.

Well, thank you, Lidio and Jorge, for your updates. Our fourth quarter results closed out the year on a high note. We are very pleased with our financial performance in 2025. Increased revenues, maintained expense discipline, generated strong loan growth, and improved customer deposit trends. I am urging our teams to remain focused on deposit growth, loan generation, and particularly on our expense discipline. Our strategy is grounded in customer primacy. We are focused on deepening relationships, delivering value across channels, and simplifying how we operate. Most importantly, it is focused on translating these efforts into tangible financial results and generating value for our shareholders. In closing, I want to recognize our colleagues and their contribution to our results. I see what they do every day in our branches, call centers, and centralized offices. We are pushing ourselves to deliver more for our clients every day, and I am deeply grateful for their commitment and dedication. We are now ready to answer your questions.

Hey. Good morning, everyone. How are you doing?

Good morning, Brett. Doing well.

Wanted to start on the guidance and just thinking about the NII guide. And if I am reading it correctly, it kind of would suggest maybe slightly slower average balance sheet growth during 2026 and five to 10 basis points of margin expansion? And I know you guys do not like to give explicit margin guidance, but would that be within the realm of what you are looking at? And then just wanted to ask around the Roxy goal. You know, why would operating leverage that might not increase a bit from here?

Okay. Thank you, Brett. Good morning. First, on the NII, first, we were very pleased with the 11% growth this year. The 11% growth in NII was driven by expanding the margin, being able to reinvest fixed-rate investments in our portfolio into higher-yielding assets, loan growth, and lower cost of deposits. We believe all those three factors will continue into 2026, albeit at a smaller magnitude. We will see a slowdown, for example, of the yield uptake that we will get on the reinvestment of the portfolio. But we are very comfortable with that 5% to 7% guide. We are expecting margin to continue to expand throughout 2026. I think when you look at that range, if you are looking at what drives one for the other, it really always revolves around low-cost deposit levels and our ability to reduce deposits in the US market. In terms of the ROC fee, you know, we have talked in the past that we want to be driven by the improvement in performance and net income. Right? And again, we are very pleased with the results this year. We have a lot of momentum going into 2026. We expect that momentum to continue. We want that, you know, above 14% to be sustainable. There is enough uncertainty in the world, and we want to make sure that we are absorbing any ups and downs to the cycle. We are not quite there yet. We do feel that we have a lot of momentum and like the starting point where we are at. But that is something that we want to continue to focus on. And I think this year, we try to be more intent or deliberate in how we are managing capital levels as well. And, you know, as I discussed in my prepared remarks.

Okay. And then the other question I have was just around, you know, loan growth, which was better than I expected and pretty strong in commercial. You know, when I think about that guidance for the coming year, I mean, you have had 6% ish growth. The past two years. 4Q was 7%. You know, is the slowness or slower level anticipated in '26? You know, is that just conservatism around consumer, or any thoughts around that? And then as it relates to onshoring, you guys seen any opportunities related to that?

Okay. So let's start first on the loan growth. You know, as you said, we have seen loan growth around 6% for the last couple of years led by growth in Puerto Rico. Growth in Puerto Rico was across all of our portfolio. Right? You know, commercial, mortgage, and consumer. As we look into 2026, we expect to continue to see commercial to lead the way and mortgage in Puerto Rico, but we do see a softening on the consumer, particularly around auto. So that is one part of the guide. The other growth engine for us has been in the US. You know, we are in good markets in the US. We like those markets. But we want to make sure that we are pricing for relationships and for profitable loan growth. There is some of that embedded. As well as, Brett, if you can imagine, there is always timing as loan transactions are focused on larger clients. When those things close in terms of funding that you advance or when things slow down on expected payoff, that has an impact on those kind of year-over-year changes. But we are confident on the 3% to 4% guide and the momentum that we had over the last couple of years. Both Puerto Rico and our US markets.

Okay. That is helpful. Congrats on a strong year, guys.

Good morning.

Good morning.

Maybe, I guess, just sticking to the theme of growth outlook. When you look at fees, where do you see potential softness, I guess, in fees in that growth rate? You have had some pretty good trends during the course of the year.

Yeah. Remember, Jared, one of the things that the '25 results included, you know, roughly $10 million of kind of unusual items, you know, the recovery for prior periods of a tenant, and then we also had some refunds of federal taxes that were recognized in fee income. So that is $10 million really if you look at the guide, you are making up for that $10 million year. So there is a little bit more growth embedded in that guide than probably, you know, jumps out at you.

Okay. And then on capital, nice to see the buyback. And the commentary around sort of the willingness to bring capital ratios down. How should we think about M&A with that backdrop? And you certainly have the capital and the growth to do something, I guess, you know, in terms of potential sizes or anything like that? Any thoughts you could share with us?

Sure. This is Javier. Well, our primary focus continues to be our transformation program. That said, in the US, we are always open to opportunities to add on profitable niche businesses, teams, and assets. So whole bank M&A is not a priority. However, it would be responsible for us to say that we would not evaluate opportunities to enhance shareholder value over the long term. I think we said this before. There is a high threshold for any transaction we may consider. And we will evaluate opportunities to grow inorganically as long as they meet the following criteria to complement our US business. First, it needs to be compelling enough for us to consider reallocating resources away from our transformation initiatives. We have a little bit over 800 employees who are currently focused on these efforts. That we would need to reallocate to whatever effort related to an M&A. You know, due diligence, integration, conversion. Number two, core deposits. The transaction needs to strengthen our deposit franchise and lower cost deposits with lower cost deposits. Number three, it needs to be commercial-led, which is our key strategy in The United States. It needs to enhance our commercial-led and niche business strategy and also provide some CRE diversification. Four, it needs to be geographically consistent. So create greater market penetration in our existing footprint, increasing opportunities for value creation through cost synergies, or need to extend presence to adjacent markets or geographies. And I think, also, it needs to have the scale in terms of scale, it needs to be right-sized for our US business. I have a preference for not for MOEs. MOEs. I, you know, I do not think either of those. Not that they can work, but that is just my bias. And I think the last item would be cultural fit, and it is the last, but it is really top of mind. Whatever target needs to align to our culture of performance and employee well-being. So we are very mindful that not all customer demographics will make sense as a part of Popular. So I think, you know, very specifically, that is how we think today about M&A.

Okay. Thanks. That is great insight. Just maybe finally for me, do you just have the spot deposit costs and asset yields at the end of the year?

We do not usually provide, you know, the spot rates, Jared.

Hi. Good morning. I was wondering if we could touch base on expense.

Good morning, Ben.

Good morning. So on the expense guide, I know you guys always give a GAAP basis. So it is inclusive of investment and things like that. I know that last year, you were also investing. And this year, I am assuming 27 yards, will are they going to because it is your size investment almost like a core. So I was kind of curious. Is this year on an investment basis kind of smaller or larger or anything you could frame up sort of timing and any expectations on that relative to kind of what we have seen previously or potentially starting new projects that are multiyear in nature?

I mean, I think the run rate that we are going is not changing much. It gets to a point then where we only have so much capacity and resources to be able to do so much at once. I think certainly in '25, we were running at that capacity level. As things roll off and we go live, you know, for example, Javier talked about that we went live on a new ERP on January 1. That releases some resources, but then a lot of those resources get reallocated to the next big project and the next thing going on. You know? So I think we all feel fairly comfortable with the level and focus of the teams. You know, we can always certainly do more, but there is a reality that you can only have so much, you know, resource and management focus on these implementations.

Hey, good morning. Thanks for the question. Maybe turning back to Capital, I want to make sure I heard you correctly. It seems like you alluded to maybe additional tier one being lower than peers. Wondering if from a high level you can discuss, you know, it seems like maybe then leverage would be your guiding ratio, how you are thinking about that. As we move ahead. Given the importance of capital return to the profitability improvement story? Thank you.

Sure. Thank you, Kelly. So we often talk with you all about CET1 and a lot of focus on CET1. We talked about, you know, our goal of getting that lower plus a buffer. One of the things that we do not very often talk about is that, you know, we have somewhat inefficient capital stack and that we really have very little additional tier one. Right? We have, you know, around five basis points when we look at peers, they have anywhere between 50 and 100 basis points of additional tier one. So we look at this as another lever that is an opportunity that we are evaluating and looking at. Perhaps there is an opportunity for something that is accretive without necessarily impacting the total tier one or total regulatory capital and being able to balance lowering CET1 with managed and board's intent to be more, you know, deliberate in reducing that capital over a prolonged period of time.

Hi. Good morning.

Good morning.

Trying to put a finer point on auto expectations. Can you just give us a little bit of color here, as to what current demand looks like? And as you start looking out throughout the course of 2026, do you see this being a tough comp year kind of throughout the year, or do trends start getting better maybe post-April once you kind of lapse through some of the pull forward when tariffs first got announced last year?

I will give you a little bit of perspective in terms of the auto industry and maybe a little bit of perspective in terms of the outlook for 2026. I mean, if you look historically, prior to COVID, I mean, new auto sales in Puerto Rico, you had a year above 100,000, that was a great year for the industry. Over the recent years, after COVID, numbers have been higher than that. We had years of 120,000 was the record year for the industry. This year, we are ending up the year around 111,000, which is a 9% down from the previous year. And the expectation for the industry is to be slightly down 5% from the numbers that we have. What I will say still, I mean, a year that is above 110,000 or close to 110,000, that is a great year for the industry in Puerto Rico.

Thank you. You could talk a little bit about whether or not you are seeing any kind of deposit competition in Puerto Rico and your expectations for deposit growth in the year?

Well, I think clearly, there is competition in the market. No? You can see from our numbers that we have grown deposit balances. And we expect to do the same this year. But there are a few banks in the market and also credit unions. So but we are not seeing any irrationality in the pricing. So on this cycle. So I would say that it is pretty steady, and we will not, however, we said it before, we will not lose good clients to pricing deposit pricing. So again, we are going to be, we are going to defend our position and particularly good relationships in all segments. But hopefully not do anything that is crazy.

Morning, Jorge. Good morning, Javier.

Good morning.

And at the risk of being called a curmudgeon again as I was on a call with one of your peers, I have to ask a question. I mean, the outlook for you folks and your peers is quite good for 2026. The economy is healthy. Credit, as you guys pointed out, is resilient. We have a steeper positive slope yield curve. Maybe it gets even more positive slope. We have got loan growth as you pointed out as well. When you look around corners, aside from the geopolitical risk that we are all aware of, when you guys have to look around corners, what are you watching out for so that we do not get a surprise this year that nobody is obviously expecting?

Well, that is a very good question. Of course, we think about it all the time. I think that one of the themes that is in The States as in Puerto Rico is affordability. Right? I mean, we think about that and how it may impact certain segments of our clients. Right? And it is something that obviously impacts home creation, let us say, and it may impact our customers if inflation would escalate. So that is something that we think about. And the other item that we cannot control, but it obviously has an impact on our economy is the PREPA situation. The fact that the electric power authority bankruptcy is still pending. So anything having to do with the generation of electricity is a concern because it is essentially a tax on economic growth. Now we are also benefiting from the fact that gasoline is at very good levels. So we are benefiting from that. But I think those will be the two items that are kind of lurking, you know, and may bite us. But you know, we are hoping that this is a year where the PREPA bankruptcy gets dealt with. And, clearly, everybody recognizes that, you know, developing the grid and fixing this is critical for Puerto Rico's future. So we think that, you know, clear heads will prevail and we will get to a resolution that is rational for all the parties involved.

Hey. Most of my questions have been asked, but I just wanted to check in on what are the market conditions that would impact your buyback? Just is that valuation, pricing, are you targeting some sort of total return target? Just any kind of color more on the buyback pace, please.

First, Emmanuel, just want to welcome you to the call and thank you for picking up coverage for all the banks in Puerto Rico and supporting our island. So appreciate it. In terms of market conditions, I mean, you know, we tend to do these on 10b5-1 plans. So, certainly, changes in market prices that, you know, could impact the grids that we use. So that is certainly something that is something unexpected, could be an accelerator or decelerator from the target number. But, also, you know, global political, macroeconomic environment, and these are all things that impact our perception, you know, of what is happening and how quickly we want to execute on the repurchases. But I will reiterate what Javier said. We believe that we find that our current share price is very attractive.

Hi. Good morning.

Good morning.

Thank you. Good morning, everyone. Very nice quarter. I just wanted to build off of the last question on expenses. If we pull out the profit sharing incurred last year, it implies a little bit faster of a growth rate. I was just hoping you would be able to dissect the drivers of that. Is it the planned investments that were delayed that is causing the 100 basis point difference in the growth rate? Or is it something else? Any breakdown would be helpful. Thank you.

Yeah. Thanks, Brandon. Thanks for the question. You know, first, I think if you look at where we ended up 2025 versus our original guide and even our guidance in the third quarter call, we did, I think, outpace or overperform in 2025. The teams have done a really good job to be focused on efficiency. We have implemented a lot of opportunities that are sustainable and will continue to generate savings, but we also had some wins that resulted in maybe a benefit that we see in '25 that we will not see repeat '26, or we will see a lower level in '26 versus '25. Then when you add that to the continued investments in technology, you know, I think we have talked in the past how as projects go near live, you start doubling up on expenses as you are supporting two platforms. And kind of incurring, you know, the cost of licensing on the old platform and the cost of development and the new platform, etcetera. That tends to have some peaks and valleys, and that is part of the noise that you are seeing and comparing the run rate. But we will continue to invest in technology and continue to invest in our people and ensure that we are attracting talent. And those are the two biggest drivers when we look at year-over-year and our expectation of expense growth.

Hey, thanks for letting me circle back. I apologize. I forgot there are so many people on this call. Just to dig down a bit the NII guide and parsing that with your commentary for margin expansion. Thinking through the funding side, mainly deposits, you know, you had some declines in brokered. You gave the range for government. Are embedded in your NII guide, do you have any, you know, thoughts around or I guess, opportunity to run off some higher-cost funding given the strong cash flows you are generating off the securities portfolio? And overall outlook for, you know, core deposits in Puerto Rico here? Thank you.

You know, of course, our objective is not only to retain, you know, client deposits, but, you know, also increase them. Right? So we have been seeing good momentum in our retail network across all segments, you know, affluent, mass affluent, and mass. We have seen strong deposit growth in commercial, really led by corporate and small business. So we expect some of those trends to continue. I think the opportunity on that NII is, you know, can we reduce the cost of the US deposits? And those are driven both by the competitive nature of online, you know, direct deposit, which are important funding sources for our US business. But we are also seeing strong competition in New York and the Florida markets. Know, the reality is that kind of for that incremental money and clients that are more rate sensitive, it is still very competitive out there, and it is our team's goal is we are very much focused on relationship growth and if that begins with the loan relationship in the US, making sure that that translates into deposit relationships. That, you know, maybe impacts our loan growth guidance as we want our team to be more focused on those relationships and that profitability. But at the end, no secret. In banking, the deposits and low-cost transactional accounts and primacy with those clients are going to be the driver of that guide. And when we look at the outperformance this year, it was really driven by the growth in deposits. Both of our markets. Well, thanks again for joining us and for your questions. We look forward to updating you on our first quarter results in April. Have a good day.