Good afternoon and welcome to the First Bancorp report on its First Quarter Results Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. John Pelling, Investor Relations Officer. Please go ahead.

Thank you, Daniele. Good morning everyone and thank you for joining First BanCorp's conference call and webcast to discuss the company's financial results for the first quarter 2015. Joining me today are Aurelio Alemán, President and Chief Executive Officer; and Orlando Berges, Executive Vice President and Chief Financial Officer. Before we begin today's call, it is my responsibility to inform you that this call may involve certain forward-looking statements, such as projections of revenue, earnings and capital structures, as well as statements on the plans and objectives of the company's business. The company's actual results could differ materially from the forward-looking statements made due to the important factors described in the company's latest Securities and Exchange Commission filings. The company assumes no obligation to update any forward-looking statements made during the call. If anyone does not already have a copy of the webcast presentation or press release issued by First Bancorp, you can access it at the company's website at firstbankpr.com. At this time, I would like to turn the call over to our CEO, Aurelio Alemán. Aurelio? Aurelio Alemán: Thank you, John. Good morning, everyone, and thank you for joining today to discuss our first quarter. As usual on the call are with me our CFO, Orlando Berges who will cover most of the details of the financial results of the quarter. Let's walk you through some of the highlights, please move to Slide 5 of the deck. This was a really exciting quarter for our company, and we achieved several significant strategic milestones over the past few months. And I would like to focus on some of these milestones before we head into some of the details first. Since our last call we announced the partial recapture of the deferred stock asset which last month was recognized as…

Good morning, everyone. So Aurelio mentioned the first quarter results reflected net income of $25.6 million or $0.12 a shares which compares to $333 million last quarter – you remember, last quarter results include the partial reversal of the deferred tax asset evaluation allowance which is shown as a credit, so we recover that context expense line, and that obviously affects the comparability, moreover to mention that since the evaluation allowance has been reverse fortified, we are now require to be at good income tax expense calculation on current earnings, that must not mean that the actual payments are going to be the same amount but for GAAP purposes now we're going to be showing income tax expense going forward. So for this quarter I think it's better to compare pretax income which amounted to $33.7 million in the quarter versus $31.9 million last quarter. In this quarter results, the bucketed side showed a $13.4 million margin scheme from the development section which I will explain a little bit in more detail. We also saw increases of $1.4 million in non-interest income and reduction of $1.9 million in expenses. That net of $2.1 million exactly in expenses related to conversion and contract cost on the Doral volumes. On the other hand, net interest income for the quarter is down $3.5 million, I am also going to detail, and the probation for the quarter which is $9 million higher than last quarter. The increase in the provision, it's a number of factors; on the commercial side we had $10.6 million more provision which reflects migration of certain commercial loans to worse loan classification and some increases on some of the specific returns on in parallels. But also we had much higher recoveries on the fourth quarter of last year, we had…

[Operator Instructions] The first question comes from Alex Twerdahl from Sandler O'Neill. Please go ahead.

Good morning. Aurelio Alemán: Good morning.

First, I just wanted to ask a little bit more about the broker deposits, obviously they came down a lot sequentially and you were able to replace some during the first quarter with the deposits in cash from Doral. Can you talk a little bit about how many of those broker deposits will mature in the second quarter and then the remainder of 2015, and if there is more ability to replace those with either cash on hand or other ways in order to bring down cost of deposits further and reduce that FDIC insurance expense?

Sure, really the objective as we have mentioned is to continue to lower the level of broker CDs that we have in the books. We're planning to get below 20% of assets on that line carry forward. And the first quarter obviously, we have two big phase; number one, we grew a lot organically on deposits, as Aurelio mentioned, we more than $160 million growth in deposits organically plus the one's we acquired from Doral. So we had some good amount of excess cash. And we will continue to write – we have basically spread out, we have typically from quarter to quarter, about $600 million to $700 million of broker CDs that matured each quarter and will replace us as needed and remember that one of the benefits been able to use it for car [ph] purchases. So we will continue to reduce the size of the portfolio as a function of the overall liquidity component and lending component what gives you an idea of the level of maturities we do have in quarter.

Okay, thanks. And then I just wanted to ask about the tax rate going forward, is the 20 – almost 24% that we saw this quarter, is that a reasonable tax rate used for 2015 for GAAP purposes?

Yes, for GAAP purposes we're going to be around that level for the year. Keep in mind that still – because of the evaluation allowance being only partially reverse, some events could always happen that changes have been of what still on their evaluation allowance but the 24/7 assuming the current levels evolved over the same income we have as a relationship of the other income, it will be a good number for this year. Obviously we – I mean if, for example, we can rate the portfolios a bit more and those percentage could change a bit from quarter to quarter but except very good at indication.

Okay, thanks. That's all the questions I have right at this second.

Thank you.

Our next question comes from Brian Klock from Keefe Bruyette & Woods. Please go ahead.

So, I don't want to say you had a pretty busy quarter with the Doral transaction closing, the consent order lifted. Can you let us I guess on the Doral side of things you know with a little bit of noise with from some of the non-recurring cost and the initial provision booked. But it seems like if you take those provision out and those expenses they are not going to recur, it seems like it's a quarter, it's the first month of the Doral transaction seems to be in-line with your guidance at the close, I think you said it was about 10 million to 12 million annual pre-tax income benefit from Doral? Aurelio Alemán: The way we see it from preliminary numbers are consistent with our estimates, keep in mind obviously that we do expect to capture some more volumes in the market on the residential side, having one less layer that helps the number but we still have noise in the expense side because of the interim cost and interim servicing cost and the conversion related cost. We want to see it normalize onto the third quarter, because second quarter is still has conversion related matters, by the third quarter we should have affirmed a more normalized component on that sites.

And I guess a follow-up question would be you mentioned about the DFAST failing your stress test in March and again looking at your capital ratio is very strong. I guess Aurelio can you comment on your thoughts of I guess what can you do with that excess capital in the meantime and with the consent order lifted does that help you become more active on the capital management side? Aurelio Alemán: It is important Brian, that relate to the question [indiscernible] and we put certain milestones on the road before getting the -- talk about definitely capital plan. Some of those milestones, we have hit several of those. We still need to find out the final feedback from the DFAST, and we also -- we're still operating on the agreement which hopefully will be a resolution during this year also. We cannot anticipate when exactly that's going to happen and obviously you know the capital alternative that we will continue to pursue in spite of those events, any of the opportunities we see out there, we continue growing our portfolio, in Puerto Rico or Florida or the Virgin Islands which we see some stabilization too and also we continue to work on achieving better asset quality ratios so those are alternative that we continue to evaluate and when in the two fronts, one to grow the asset, the other one to continue cleaning up and having a better balance sheet which brings some future benefits as we have done before the cost and actually basically premium side of things we [indiscernible] to liquidity. As I mentioned things we evaluate continuously and obviously we're more active on the street to be honest, building pipelines and we're seeing investment activity. As obviously this market continues to consolidate and right size the banking system. We continue to see a healthy pipeline in all of the products, it's less than before, yes, but it's still healthy to be able to certain portfolio growth in U.S. revenues in our balance sheet. But the last quarter of the year we will have a more clear view hopefully of how we will reduce that excess capital.

The next question comes from Taylor Brodarick from Guggenheim Securities. Please go ahead.

I think Alex and Brian hit my main ones, but deferred tax asset allowance it might be in the deck but I didn't see what it was at March 31? Aurelio Alemán: We're having a little difficult hearing you clearly; can you repeat the question please?

I was just asking what the March 31, DTA allowance was? Aurelio Alemán: The allowance we had in March, 105 million, let me get the exact amount. You mean what's left for reversal, that's what you want?

Yes after the reversal kind of where we're -- yes what's the most recent number? Aurelio Alemán: It's 200 million.

And then Aurelio, is there I guess as far as the written agreement goes, is there any other I guess timeline, color you can provide or is that just the consent order it's just going to occur when it occurs at their discretion? Aurelio Alemán: Fortunately we have a don't have a timeline, they were trying together when we entered those due in 2010, possibly [indiscernible] and which lift the process or led the process and obviously there is a process to follow which cannot anticipate how long it's going to take.

We have a repeat question from Brian Klock from Keefe Bruyette & Woods. Please go ahead.

So just a follow-up question, so I guess looking at slide 18 where you actually show the reserves related to each of the commercial NPL buckets, I would think that the PREPA was included into that 186.5 million C&I book-value. So would it be a comfortable conclusion I come to is that reserve ratio the 24.7 reserve to that 186.5 is the PREPA reserve that you're carrying under PREPA exposure on that same ratio or is it a little bit slightly higher than that sort of ratio? Aurelio Alemán: I made a slide where you can reference to -- the PREPA is a facility which is C&I as you mentioned and we had -- we mentioned before we had classified the asset and we have started some specific reserves going back where we review the reporter, review of the reserves is a function of the projected cash flow information running the sensitivity analysis. What we have seen is overall carried amount on all the portfolio so PREPA would not necessarily flow what you see there, it's a fortunate to be specific estimates of cash flow that we get from PREPA and consulting groups that we use and that's why we have estimated those reserves.

So I guess, is there any way to kind of get us comfortable at what kind of level or reserve you have on PREPA I guess is it somewhat more or less than that reserve you're carrying on non-performing C&I loans I guess that's what I'm trying to ask. Aurelio Alemán: I mean we haven't disclosed specific reserve for loans, it's a bit slower than this overall reserve that you've here but what we typically don't disclose on specific loans Brian, and we I know other people have done that but rather if we did one more loan in our books, we hope that with the analysis we got very established possible exposures in there and we have had some reserves that are the upside of the reporter but it's based on those cash flows but it's not a highest average percent that you've shown here. So with the overall asset -- [indiscernible] in the portfolio.

This concludes our question and answer session. I would like to turn the conference back over to Mr. John Pelling for any closing remark.

Thank you, Daniele. We appreciate your interest in First Bancorp. We're around if you've any further questions. This will conclude the call. Thank you. Aurelio Alemán: Thank you all.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.