Brett Rabatin: Yes, that’s helpful. And then I wanted to talk about credit quality for a second, just around the Mainland net charge-offs were higher, auto performed better than I would have expected. And I don’t know if you would attribute that to tax returns or anything specifically but was just hoping for some color on both of those. If I heard you correctly, it sounds like you do expect the auto to have a little bit of softening from the 1Q levels from here?
José Rafael Fernández: So on the US commercial loan, remember we had a seasoned portfolio and we make decisions based on risk management and that’s kind of was a risk management decision the sale of that performing loan we just felt that it was the right thing to do from a risk management perspective and that’s what you saw. And we certainly look at the auto portfolio as a key component of our balance sheet. As you know, it’s around 30% of our loan book. And we’re very encouraged with the first quarter levels of delinquency and lower charge-offs. So from our perspective, we’re still seeing good trends. It has a lot to do with how we manage that loan book. And I’ll let César give you a little bit more specifics on the auto portfolio, because we have — we mentioned it somewhat last quarter, but we have made some changes throughout the last couple of years on the credit profile.
César Ortiz: I want to highlight that the first quarter is always seasonal in terms of tax benefits. Maritza mentioned tax credits, tax refund, but also the end of the holidays that benefits the quarter, especially first quarter of the year. So, you’ll see those benefits in the retail portfolio. But in auto also, we strategically improved the credit profile of our portfolio back in 2022 and we shifted this portfolio from [Technical Difficulty] seeing the benefits of that shift in credit profile since we eliminated the tranches that due to the higher losses during those years. So, I think that’s what’s been noted in the credits [indiscernible] right now.
Brett Rabatin: Okay. That’s helpful. And then if I could sneak in one last one. José, any high-level comments on — we’ve seen stronger flows of funds to the island for projects. Anything in particular that you would highlight, as maybe more impactful things that you see happening this year in Puerto Rico. Obviously, the economy is a lot stronger than it’s ever been or has been in a long time.
José Rafael Fernández: Yes, let’s step back a second here. When you look at the macro and when you look at Puerto Rico, what we’re seeing today is not only federal funds coming in and flowing in at a steady pace and at a higher pace than right after the hurricanes and the earthquakes and certainly the pandemic kind of accelerated at all. But if we also think about it, Puerto Rico came out of bankruptcy a couple of years ago. So, what you’re seeing now is private capital at work from abroad, as well as internally. So you’re seeing businesses expanding, commercial business [Technical Difficulty] investments in their own businesses and you’re seeing US capital coming to Puerto Rico and expanding businesses and buying businesses.
So, that has a lot to do with that bankruptcy getting out — getting off bankruptcy. I think going forward, there’s one more bankruptcy that needs to be eliminated and this is the electric power authority. Hopefully, 2024 will be the year where it out of bankruptcy and there is $11 billion of federal funds that are on the sideline right now to continue to strengthen the electric grid and the transformation that is being done there for resiliency, as well as for diversified sources. So, I think if you look forward, there’s still quite a bit of backwind for Puerto Rico’s economy, because the engines are at work, federal funds, private capital coming in and businesses putting capital to work too. So we’re optimistic about Puerto Rico and that’s what banks exist and that’s why we’re here.
We are here to support small and midsized commercial clients. We’re here to support our consumers and our clients and trying to help them achieve their goals. So, I just think that we have a pretty strong pipeline on the commercial side on the larger kind of middle and higher kind of commercial clients, but we also have a pretty strong quarter. We had a pretty strong quarter in the small business commercial and we have a pretty good pipeline there too. So, we’re seeing good momentum overall, Brett.
Brett Rabatin: Okay. Great. Appreciate all the color.
José Rafael Fernández: Thank you.
Operator: We’ll go next to Alex Twerdahl with Piper Sandler.
Alex Twerdahl: Hey good morning all.
César Ortiz: Hi Alex.
Alex Twerdahl: I wanted to start on just kind of sort of longer-term strategy and sort of growth outlook. And when I look at your capital levels they continue to rise. TCE now above 10% and that common equity Tier 1 continues to rise. And kind of coupled with all the money you guys are making it just seems like — it’s hard to envision you being able to deploy all that capital just through organic growth. So I’m just — I’m wondering if you have any updated sort of longer-term thoughts on, utilization of capital and kind of how you’re thinking about deploying the excesses in the next couple of quarters or years?
José Rafael Fernández: Yeah. So the game plan for us remains relatively the same. We still see opportunities for us to grow here in Puerto Rico. And we still see opportunities for us to deploy capital here in Puerto Rico. I agree with you. We have a lot of capital. And we’re generating a lot of capital. So we also have shareholder capital return strategies. We increased the dividend. We continue to look at that. We announced — the Board announced a $50 million repurchase program that is also available to us. And we will be opportunistically executing on all three fronts. We operate with higher levels of capital than our peers in the states. But in general, I agree with your premise, in terms of our capital generation. And we expect to deploy it accordingly.
