Good morning, and welcome to the First BanCorp Third Quarter 2019 Results and Acquisition of Banco Santander Puerto Rico Discussion. [Operator Instructions] I'd now like to turn the conference over to John Pelling, Investor Relations. Please go ahead.

Thank you, Nick. Good morning, everyone, and thank you for joining First Bancorp's conference call and webcast to discuss the company's financial results for the third quarter 2019, as well as the strategic transaction announced after the close yesterday. Joining today from First Bancorp 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 structure 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 SEC 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, transaction presentation or the press release, you can access them at our website at 1firstbank.com. At this time, I'd like to turn the call over to our CEO, Alemán Aurelio. Aurelio Alemán: Thank you, John, and good morning, everyone, and thank you for joining us today. It's an important call. We will be discussing the third quarter results, and we will be disclosing the exciting transaction we announced yesterday. So it would be a different call. We're definitely very excited about the strategic transaction we reported the last night, but we will be discussing that one in the second part of this call. Then we will have a joint Q&A session for both results. Please let's move to the third quarter highlights, Page 5 of the deck. We reported this morning what we consider another strong quarter of bottom line results with net income of 46.3,…

Good morning, everyone. Aurelio mentioned this third quarter was a very good quarter to some extent driven by improvements in some assets slightly related components that led to provision reductions and improvements in net interest income. Net income, as he said, was $46.3 million or $0.21 a share, which compares to $41.3 million or $0.19 a share last quarter. Adjusted on a non-GAAP basis, net income was $44.7 million, which is about $0.20 a share, compared to $40.8 million last quarter. You can see the detail of the breakdown on the earnings release that was sent out this morning pre-tax pre-provision remained strong at $70.2 million, slightly lower than $31 million achieved in the second quarter. The provision for the quarter was much better. Provision is down $5.1 million to $7.4 million in the quarter. It was mostly driven by $6.5 million reserve releases in commercial loans. Combination of historical - low historical loss rates in the portfolios, the early payoff of $120 million in two large criticized loans, as Aurelio mentioned, and some credit upgrades we had in the quarter. In terms of net interest income, the net interest income grew $1.9 million, however, I would like to point out that we are starting to see the impact of the declining interest rate scenario on the variable-rate loans. On one hand, we saw interest income growing $2.9 million due to an increase of $96 million in the average balance of consumer loans. And we saw an additional $3 million growth from the accelerated discount accretion of an acquired loan that was paid off in the quarter. On the other hand, we saw a reduction of $900,000 from the downward repricing of the variable rate commercial loans, and $700,000 more related to a reduction in the commercial portfolio associated with…

So as Aurelio mentioned, we are extremely excited about announcing this deal, and having been able to reach this stuff. But it - so I'm going to walk you through some of the key components of the transaction, try to address later on any questions. The transaction, as Aurelio has also mentioned, is an all-cash transactions. There is a significant built-in liquidity in both of our balance sheet and in terms of cash and securities as well as in Santana's balance sheet, which helps in achieving the structure. The premium, it's $63 million, he made reference to, which is about 17.5% over the $362 million of Santana's core tangible common equity as of June for a total base price of $425 million. In addition, Santana has $638 million in excess capital that will be paid at PAR. He also made reference too, and it's important to highlight that we will not be acquiring any non performing in this transaction. The purchase price represents approximately 7.2 times last 12 months adjusted earnings given effect to a reduction in - of the excess capital. And obviously, it's subject to adjustments based on Santana's balance sheet at closing date, which, as we said, we expect to be sometime mid-2020 pending the receivable necessary regulatory approvals. Assuming a full-year earnings and cost savings for 2020, and we use 2020 because of the availability of consensus information, this transaction would be about 35% equity to consensus estimate of $0.81 a share. That would assume the transaction would have been completed beginning of 2020, and obviously, includes earnings throughout the full 12 months of both institutions. The tangible book value per share dilution on the transaction at closing estimated to be approximately 7%, with an [indiscernible] of 2.6 year using the crossover method. Some of the…

[Operator Instructions] Our first question comes from Ebrahim Poonawala, Bank of America Merrill Lynch. Go ahead.

So I guess just first question, I think, however, you mentioned that you made some conservative assumptions around how you've laid out either the expense savings of the earnings accretion tied to the deal. I think, some of the feedback from investors overnight has also been on similar lines where there is expectation that we could see better than 35% earnings accretion. One, I would appreciate if you could address in terms of the potential for that happening. And also tied to that, if you can talk about any loans, deposits that you will be running off of following the deal, which may have made sense as part of Santander global, but don't, as part of everything? Aurelio Alemán: Okay. Let me, let me, yes, let me cover the two areas. First, I think, first of all, obviously, we still operating on the Puerto Rico economy. So we know that predicting the economy, it's not an easy task. So we took a conservative approach of economic growth, but obviously, we are assuming, yes, there is going to be certain growth that is going to give us opportunity. So this works two ways. Our goal is to, after we combined the two institutions, we can start achieving some additional growth. So for that you need definitely to retain as much clients and as much front-end personnel to continue the task of increasing the franchise, you also need to retain significant part of the branch network to continue servicing and delivering to larger, larger client base. So as we go through the approval process, integration planning, and all the things that will take us over the next six months, we will learn more - we will continue to view - how the economy is moving. We have sectors of our strategy that,…

And just in terms of Orland, if you could remind us in terms of just the funding, there was about $900 million of cash on the balance sheet at the end of the quarter, if you could just talk to in terms of how much of the deal gets funded to this cash where that cash balance should be coming out of the deal, that would be helpful. Aurelio Alemán: Well, the modeling we did does assume that one - when you add up the $425 million and $638 million, so it's $1 billion of cash that it's coming out. And definitely the model assumes that reduction in interest income associated with that cash that goes out. It's - the way we see it, it's a combination of the liquidity we have in cash and the available securities that we have, obviously, we have the flexibility of drawing lines or using reports - FHLB lines or using reports if needed. But as I mentioned, also, there is significant built-in liquidity in Santana's balance sheet. So a bunch of that liquidity - it's going to be complemented on both institutions once combined. So that's why the deal was structured this way. We feel it's a very doable transaction, but clearly, as you all mentioned about $1 billion comes out and does affect some of the investment income. At this point a large chunk, as you saw, was sitting in the fed account at 180, so it's - that kind of impact on the income statement, but it's been incorporated into the numbers that we are assuming for the earnings accretion.

And just one last question on the deal in terms of the 6% credit marks seems little high given what Puerto Rico has gone through over the last few years, and obviously taking on the Nap's. Is there anything specific in the portfolio where you assumed a higher credit mark or are you just being conservative there? Aurelio Alemán: It's a - remember that if new to fair value marks assume lifetime losses in there. The portfolio - there is nothing - they have a good portfolio as you made reference to, we are not getting the non-performing, but what you still have a credit card portfolio in there, you have a mortgage portfolio, which is longer term, about $1 billion in mortgages. So it's that combination of the components with lifetime loss kind of scenarios that led to those marks. We will obviously update that, and we - the marks, it's been a combination of external parties we use for the assessment of the marks as well as using the internal models that we use for DFAST and for CECL and all those components. So we've done a lot of work. Well that has to be updated anyway as of transaction date, but it was most reasonable estimate based on all the information we have at this point.

Our next question comes from Alex Twerdahl with Sandler O'Neill. Go ahead.

Agreement is finally announced. Couple of clarification questions. In the cost savings number, the 35%, are there branch consolidations contemplated in that number? Aurelio Alemán: There is. Primarily, you're going to see overhead technology components, legal, marketing, a lot of initiative expenses. There is a small assumption on that part, yes, but the final number hasn't been determined.

So it seems like there is a little bit of potential about 35% as things get assessed could potentially move a little bit higher as the deal gets closer to close and thereafter. Aurelio Alemán: I think it goes together with growth opportunities. That could obviously are the best part of the deal. If you want to grow then you have to do less reduction on expenses.

Remember they key view as Aurelio mentioned is that this is a very strategic transaction. We think it's going to position us extremely well for the future. So it's not a financial - immediate financial transaction, but a long-term financial transaction the way we see it. So we want to be able to maximize the capacities of the combined entities.

And then just to clarify the 25% realized in 2020 that assumes $12 million of the $48 million is realized in 2020. Right? Not 25% of 35%?

No. It's 12 million. Aurelio Alemán: Correct.

And then, I think there was a comment in the press release last night that there is potential adjustment of pricing based on Santana's balance sheet at the time of closing. What would trigger an adjustment to the pricing of the transaction?

The way the transaction is structure is - and you will see the deal - the documents of the deal published, but it's basically a calculation of a base tangible common equity, which is based on the size of the institution. So obviously, we do expect that the institution will continue to execute basis. And the base capital we're using, it's 8%. So the institution will continue to do business and grow. So if that happens, the price might go up a bit. If it comes down in size by any reason, it might come down a bit. So we're just trying to point out that the premium is based on a base capital, which could change on size of the balance sheet as of the transaction date. Aurelio Alemán: And then the excess capital that remains at closing will be paid apart.

Right. And then, just a quick question on, I think, this is something that you guys have obviously been preparing your balance sheet for quite some time. Can you maybe just shed a little light and sort of where you are in terms of preliminary conversations that you've had in the confidence in being able to get this thing closed and sort of, I know, you said mid-2020, which gives, obviously, a lot of wiggle room, but just in terms of capital levels, in terms of balance sheet capacity things you need to do, are you - I mean, do you feel like from a regulatory standpoint, I think, a pretty good spot to get this thing closed delay?

I think the capital - the committing capital it's strong, when you look at deals in the market. And if you compare to the asset quality profile that is a pro form, and if you consider how much excess compared to normal even for Puerto Rico 11% leverage, I think, we think is a strong number. Aurelio Alemán: 11% Obviously again the estimated pro form at closing leverage.

Leverage. So as a matter of practice the formal application process is the only forum through is the regulators will provide and if anything view on a transaction proposal. However, in formal disclosure is an important aspect of any bank's supervisory relationship with our regulators and the content of those discussions are definitely can see they're considering configuration supervisory confidential information for banks that we're not allowed to share, but what I can say that our discussion today have been very helpful in preparing us to address the key points that most likely arise in the formal application process. So we think this structure that we have put together is strong because all the metrics that make an institution more healthy are actually cover in the way the transaction was structured. Aurelio Alemán: And with Santana keeping the non-performing and with us having achieved reductions we have achieved in non-performing and classified assets, I think that positions the institution in a much better way for any transaction.

Plus an improved funding profile. Yes.

Our next question comes from Brett Rabatin, Piper Jeffrey. Go ahead.

Wanted to, I guess, first just go back to - just thinking about the deal, and you're having Durban be lower, could you give us - I missed it, the numbers if you gave it on the card portfolio, how big it was or how much the income that you're going to not be pulling over from that institution?

Well, we did some estimates based on the compensation of other fee base that approximately $4 million pre-tax give or take $3 million after tax of fee income. If there is a possibility, we won't be able to charge. So that for our modeling purposes we are excluding that amount of income from the other fee-based income that Santana as an institution. Obviously we need to go through a very much detail at the end, but based on the information, we feel it's a reasonable estimate of what could be the impact. Based on similar - remember when this was adopted we went through similar analysis for ourselves to see what was the impact. So we use the same kind of approach to estimate what could be the impact on their numbers.

And the $4 million, that's on the card portfolio or is that Durban or is that both. I'm confused?

It's Durban, everything related to Durban limitation.

Okay. Aurelio Alemán: He asked about the card also.

The card, you mean the JetBlue card, the portfolio that’s being kept or…

Right, the card portfolio.

It's $75 million portfolio that's not coming over. Interest income on that is about 14%.

Yes, that's also been taken out. But the fee base - the $4 million was mostly Durbin.

And then how are - your margin would have been down 10 basis points if you exclude the discount accretion benefit in the quarter. Can you talk about both your margin going forward, I know you said a little bit of pressure if the fed cuts? Or maybe give us some color on how much your margin comes down from here with fed cuts and then how you're thinking about their balance sheet with lower rates? Aurelio Alemán: I mean our margins - remember, that there were a few components. If rates coming down, we built in with some more liquidity on some of the repayments. We had a large repayments on the commercial portfolio and we did have some repayments on the investment portfolio also. So looking forward where the way the market moves we've continued to accumulate a bit of catch more than we would like to seek, so that affects our margin. And as I mentioned, with rates coming down, there was a $900,000 impact. It's a bit difficult to estimate exactly. We think it's going to put a bit of pressure on margin to come down a little bit more. Obviously, there are - remember, there is a combination of the consumer portfolios are still moving well, so those are highly yielding. On the other hand, we have continued to reduce the size of our mortgage portfolio with originations of what would have been paper to be sold in the market rather than keep it in on the books. So those combined will put a little bit of pressure. So I'm assuming that coming from down a bit from the 479. Normal pay downs and normal deposit behavior will help keep that a large amount, but it's a bit difficult to say with the way rates have been moving. Their balance sheet would - I would say would have the similar behavior, they have a good amount of liquidity, and obviously with the transaction $1 billion is going to go out. So there is some impact on interest income, not necessarily a margin because obviously those - that $1 billion would be low yielding kind of investment. So we're looking at it mostly from the interest income perspective rather than the margin perspective in that sense.

Okay. Aurelio Alemán: But I don't think it's different from what you are seeing in other places that there was a little bit of pressure on margin. Aurelio Alemán: Yes , but the target portfolio has a lower amount of proportion of variable-rate loans than ours having a fixed rate mortgage, having a fixed rate personal loans and credit card portfolio, which actually are mostly fixed. So that really - and then the loans tied to LIBOR [indiscernible].

And then on CECL, the $45 million to $55 million, that's for the acquired portfolio if I understand correctly, do you have an estimate for your portfolio? Aurelio Alemán: Well, we've - I do - I don't have it. I'm not disclosing it yet, because we're going to include that on the queue, Brett. We have gone through the full exercise, we have gone through the different iterations of the CECL. So those numbers, we're going to share what's the estimated impact we're seeing on CECL for our portfolio. The number we estimated on their portfolio are on non-PCD loans, obviously, we felt it was important to give some idea of where we see the range coming in on their portfolio for the impact on dilution, on the book value per share that was important that you all understand. So, but - within a couple of weeks once we publish the Q, you will see a little bit of the disclosures on the estimated impact will have on our institution.

Okay. Aurelio Alemán: At the end it's - we're going to have that no matter what. So we don't think would be the new impact what would be on the acquired transaction.

And then wonder, if I could just if I can one more on credit. Your net charge-offs are lower, Nap's lower, but you had higher migration into Nap's this quarter. Given what we're seeing with credit trends it would seem like your provisioning level that decline in the third quarter could be sustainable. Can you just talk about provisioning from here and absent that increase an inflow in 3Q, are you expecting credits to continue to improve? Aurelio Alemán: I think, yes, I think, we have to see how the balance sheet is also changing the loan portfolio is changing. The mix of core mortgage portfolio is reducing even though originators are increasing and conforming is the one that we are increasing, for the portfolio, it's going a little down. Consumer will continue to grow, that is our expectation, both auto, personal loans, credit cards all the three products. And commercial will also grow, but when you look at the proportion, provision component of the consumer is higher than commercial. So from that perspective, predicting the provision is going to be driven by how this portfolio makes us more. Definitely, we see very stable migration. On credit trends, we see very early good early indications on the delinquencies, which is really our daily primary leading indicator. So from that perspective, there's a lot of moving parts inside those formulas as you are very aware, but we continue to see a positive trend when you add all the components within. Aurelio Alemán: Keep in mind that, obviously, this quarter we did have some reserve releases on the large repayments. The $120 million repayments were criticized loans, so they had some reserve releases in there. You don't have that every quarter. And you have to balance the fact that as we grow the consumer portfolio, you're going to have some more charge-offs, you will have some provision associated with it, but a much higher yielding asset at the same time on the income statement. So if you ask me, I mean, we had talked about not being more than $15 million, that stands, I think, $7 million, it's on the low side of the quarter. We will never get to $50 million, I would say, in this current scenario based on the behavior of the portfolio.

Our next question comes from Joe Gladue of Alden Securities. Go ahead.

Just let me follow up a little bit on one of Brett's questions on the margin. I just see that Santana's net interest margins about, if I'm looking at this correctly, about 100 basis points lower than Firestone's. And just wondering if there is any changes in mix or any structural changes that you'll be able to accomplish shortly after the acquisition that might started narrow that difference between margin of what you are acquiring? Aurelio Alemán: Yes, keep in mind, you have to think a little bit about their composition. Number one, proportionately they have a large amount of investments and cash balance sheet on the balance sheet. Number two, their portfolio are of higher components are commercial and mortgages. So those items would by themselves yield slow - lower kind of interest rates. On the other hand, we should get up which by not having the non-performing that it's in their balance sheet, and that would help improve. If you look at their consumer portfolio, it's mostly credit card. So we do have other components of our consumer portfolios that improve the margin. So as we can develop more, some of those businesses through that branch network would improve the margin, but you have to keep in mind what's the composition of their current asset mix.

Our next question comes from Glen Manna of KBW. Go ahead.

Congratulations on the deal. Just from a bigger picture perspective, we've seen a lot of consolidation on the island over the last year and a half whether it's portfolio is our whole bank. And really I'd be interested to get, from your perspective, you've all been long-time bankers on the island. How do you see the environment of banking changing on the island in banks' roles in the future of Puerto Rico? Aurelio Alemán: Well, I think it would be - one thing is definitely the local capital is been invested in growing, in Puerto Rico for the last years. And we've seen how popular [indiscernible], we see how Oriental is doing it, and how we're going to be doing it. There are other players like CT and Banesco, which are also being growing in recent years. Puerto Rico is also, through the digital channels, we have other competitors that are very active in the credit card market, they're very active in the personnel loan market, they're very active in the deposits. So the landscape is not just the branch networks. We have to, as we are all doing, we're also investing in digital channels and technology component. And then you will add the credit unions, which we divide a credit union into sector, the co-ops, which are the local credit unions, and then the federal trade unions, both of them have continued to grow. The largest as - if you add all the co-ops, they are the largest lender of personal loans, they have the largest market share altogether. They also have 40% of the branches in Puerto Rico, and you add all the branches of the credit unions that are physically in the island. And then you see some of the other fed like unions continue expanding, they definitely - they have a competitive advantage in the tax side. And there are no barriers of entry for fed like unions to continue grow in Puerto Rico, some of them continued to open branches, and they have been very active in the offering of deposits. So we think, it continues to be competitive. We think the scale that we're going to have help us to be - to improve competition in certain sectors that we haven't been able to successfully to do it like some of the small business and commercial banking sectors. So by having and expand the branch network, we will also compete to the larger banking department.

And when you look at loans on the island and normalized for the pay downs and maybe the run-off in the rise book, the planned run-offs in the rise book, it looks like it's about 3% quarter-over-quarter annualized growth, is that kind of where you see the island growing at? And also with respect to bringing on Santana's mortgage book, are your plans to continue to kind of run mortgages down or does this kind of alter some of those plans? Aurelio Alemán: Yes, I think, in the mortgage book we'll reach next year the point of stabilization. When you calculate our 3% year-over-year, remember that we have taken down significant Naples. So the risking - it's been part of our history for the last 10 years, and we don't see, we see - we finish in that - in the coming quarters. So from that perspective, we probably can achieve more than the 3%, once you can see their all the aspects. And there is a component that we were not participating over this period, which is the construction sector, which we are starting to see some new projects coming into the pipeline, and even though the funds as we are all aware, the recovery funds of Puerto Rico have been delayed and are moving slowly. They're coming at a pace that obviously will last more than we all wanted to last, which at the end, it's going to bring more loan volume on the construction sector as we see it. So it's been certain important how our $9 billion loan portfolio has moved over the last 10 years with NPL cells, migration of OREOs, originations, and then sale of our participations, which we also part of our de-risking was also to reduce concentration in some borrowers, and some of that actually achieve also - let's say, actually this quarter we achieved some of that also. So it is, I think, I think, the 3% is low end of the number we should be capable of doing better than that.

And I just wanted to get the CECL cap. Did you disclose the percentage of non-PCD loans that you're acquiring in the breakout versus the whole number or not? Aurelio Alemán: We did not. Remember that PCD definitions are pretty ample under CECL, and it requires a lot more analysis. We did estimate how much were they non-PCD, obviously, it's a higher percentage of non-PCD from PCD loans because they are keeping the non performing. But the rules for CECL are bit more gray area kind of thing or more ample than the old PCI kind of definitions. So we did some estimates to get to those numbers that I showed on the $45 million to $55 million, which obviously will - as we go through the integration process, will iron out to come up with specific amounts. But there is some space that you can think of a typical institution, and then any kind of delinquency could all for a definition of PCD and things like that. So that's why it's a little bit difficult to say a specific number.

Next is a follow-up question from Ebrahim Poonawala from Bank of America Merrill Lynch. Go ahead.

Just a quick question just on capital. I'm assuming if the TCE shakes out somewhere between 10% and 11% pro forma for the deal, sorry if I missed that. But wondering in terms of additional capital actions, should we anticipate that the dividend that you initiated last year, we still see some movement on that, I think you initiated in the fourth quarter of last year? And just in terms of the outlook of where the pro forma TCE would be in kind of your expectations beyond that? I know the deal is probably the big priority right now. But if you can just talk to how you think about capital levels pro forma for the deal and your plans to use that? Aurelio Alemán: Yes, you are right. The deal is the priority and, but also there could be some room for moving on the dividend as you see where the earnings are and how much payout have. Definitely other larger actions will have to wait until we have the final number and we are ready to close the deal and we close the deal. But when you look at it on a pro form basis assuming the Puerto Rico economy continue at the pace it is moving and the asset quality trends continue on the pace will be achieving, they should be opportunities for external actions after we close the deal.

Up next is a follow-up question from Brett Rabatin, Piper Jeffrey. Go ahead.

I just wanted to go back to talking about the assumptions in the deal. And I guess first, everyone is super-focused on 35% expense saves. Can you just go back to the branch assumption? And you said small I think how much of the 27 locations you might look at and just talk about what percentage of facilities might be of the expense saving assumption that you have? Aurelio Alemán: We're not giving a specific number of branches where, Brett, there are also back office facilities that are embedded in this. Most institutions as their life facility and computer centers and technology components that are occupying the model facilities, which definitely would be put together. So that is a number that we're not disclosing, but we want to make sure we go to a more detailed view or link with the growth strategies and make sure that at the end we can disclose that. But when you look at 35%, we feel very comfortable with that number.

And then wanted to make sure I understood, I mean, you've got a few things that are kind of net drag down and our higher fee income pro form, but obviously there is going to be things that you'll do with the balance sheet that will be synergistic. Can you maybe just talk about once you guiding the deal closed, what opportunities you see with the balance sheet in terms of your comment earlier about some things could be conservative? Aurelio Alemán: The opportunities that we see is number one, Aurelio made reference to the small business and middle market business. We think that would help the combined institutional develop - further develop that business. Aurelio Alemán: Yes, but in the period - in the time frame of our projections that we have for you that would share. I think it's important to highlight, I'm glad you asked a question, we are assuming no growth of loan portfolio for the target in that period of time. Okay? So it is a no-growth scenario in the assumptions. As Orland say we have areas that we believe, but again, we want to put that into our new projections once we go through a more detailed process and link that to the trends that we continue to see in the economy. But in a projected period that we are sharing with you in the presentations, that is - the assumption is no growth in the little portfolios.

And does the increased size of the platform - does it change your ability to compete better in terms of larger credits on the island? Aurelio Alemán: It change the ability to reach out to clients. I think it also - if you have a larger corporate banking team, you can get to more clients to. So it changes the ability at our own levels. We are - personal loans and credit cards to the branches in addition to the digital channels, so that is an expanded. In most of the products mortgage is same, the order we're doing direct, but the rest of the products, they either use their branch network of the sales team, which are going to be on expanded group.

And then one other last one from me just on the mortgage portfolio. I'm just curious how much more you want to de-emphasize that piece of the book given the seasonal treatment? Aurelio Alemán: Well, when we don't - we basically want to see the mix of conforming. It's really our focus on the non-interest income that comes with that. We see - well, probably you should expect next year similar decrease through the end of the year on the mortgage portfolio, which - and then that should start leveling to the level that we see by the end of next year, because their originators our repayment are you going to be probably close one to the other.

I said last one, but actually one more if I could. Just thinking about the portfolio before the close of the deal given that you're going to deploy all those capital with it, would it be fair to assume that the loan portfolio might be flattish in the next few quarters?

You mean ours?

Correct. I can tell you that we expect to grow in the consumer and we expect to continue leaders in the mortgage, and the commercial is very deal-driven small and middle, it's growing, corporately depends on this, I get closed in the quarter and prepayments that we received to offset. Obviously, this quarter, it was a strong origination border, but it also there were $150 million in good prepayments, which what we call good prepayments. So our goal is to grow the portfolio, obviously, how the opportunities on the pipeline and the pipelines are positive. It's how fast we can close now these deals that will make the difference in having an appreciable net growth. Yes. Aurelio Alemán: We'll continue our normal business. We don't intend to hold back. Remember, after all, we continue to generate revenues and net income and that builds capital. So allows for the growth component on the balance sheet.

Next is a follow-up question from Alex Twerdahl, Sandler O'Neill. Go ahead.

Just a couple of follow-ups from me. First off, do you have the cost of deposits on Santander's deposit book? Aurelio Alemán: It's slightly lower than our cost of interest bearing deposits.

And that - is that for your total interest-bearing deposits or just ... Aurelio Alemán: Total interest bearing, including brokerage.

And then the $120 million of large criticized commercial mortgages that that paid down during the quarter, was it there in Puerto Rico, and if so, do they re-fi with another bank or were they paid off or was there outside money they came into buying? What, could you just maybe elaborate a little bit on what happened to them? Aurelio Alemán: Actually both of them refi back in Banco Puerto Rico other type of funding sources.

Okay. Aurelio Alemán: Attractions related to acquisitions of those assets.

And then is it fair to assume that since you didn't take the JetBlue credit card portfolio, I'm not sure if that was an option or not. But is it fair to assume that the loans that you took are all loans that you want and there will not be any divestitures of concentrations or anything like that following the close of this transaction? Aurelio Alemán: It is fair. Yes. Aurelio Alemán: Thank you, Alex. I just want to mention, I know that the Q&A session is over, just want to mention that we are definitely very pleased Santander has been an extremely good banking franchise in Puerto Rico and we really excited about the combination. So we look forward to continue updating you as this process progress over the next months, and thank you all for your attention today.

Just real quick on the investor front. We have a number of conferences up coming, Bank of America Conference in New York November 5 and 6, Sandler Conference in Naples on November 14. We also have Bank of America Investor Tour to Puerto Rico on December 12. So with that, we greatly appreciate your ongoing support, and we look forward to seeing many of you at these upcoming conferences. And with that, we will conclude the call. Thank you.

Conference is now concluded. Thank you for attending today's presentation. You may now disconnect.