Hello, everyone, and welcome to the First BanCorp Third Quarter 2023 Financial Results. My name is Bruno and I'll be operating your call today. [Operator Instructions] I will now hand over to your host, Ramon Rodriguez, Investor Relations Officer.

Thank you, Bruno. 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 of 2023. Joining you today from First BanCorp are Aurelio Alemán, President and Chief Executive Officer; 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 or press release, you can access them at our website at fbpinvestor.com. At this time, I'd like to turn the call over to our CEO, Aurelio Alemán. Aurelio Alemán-Bermudez: Thank you, Ramon. Good morning to everyone, and thanks for joining the call today. Please let's turn to Page 4 to go over the financial highlights. We posted another good quarter with $82 million in net income or $0.46 per share, which translated into a fairly strong return on asset of 1.72%. Net interest income registered a slight decrease during the quarter, mainly due to the expected upward pressure on deposit pricing and increase in the mix of interest-bearing deposits to total deposits. Expenses were quite in line with guidance at $160 million, and the efficiency ratio reached 50.7% during the quarter, continue to be very, very top of the industry. These variances were mostly offset by a lower provision for credit losses during the quarter. In…

[Operator Instructions] We do have our first question. It comes from Alex Twerdahl from Piper Sandler. Alex, your line is now open. Please proceed.

Hi, good morning. Orlando Berges-González: Good morning, Alex. Aurelio Alemán-Bermudez: Good morning, Alex.

First, I just want to, I guess, start on the last comment that you made, Orlando, on the securities portfolio. I'm just curious, I think we're going to see a lot more companies look at restructuring their securities portfolios into the next quarter, just given what's happened with rates. And obviously, the new outlook out there and I think one of the big factors is how much capital companies have with whether or not they're going to be looking at that more seriously. You guys clearly have a lot of regulatory capital. And as you think about the uses of that regulatory capital, is restructuring of the securities portfolio in these small pieces of it on that radar at all? Orlando Berges-González: Well, we -- obviously, we have looked into it, but in reality, we have concluded, Alex, that once you consider the tax benefit nature of the portfolio, the immediate impact, the timeframe where we feel that this is going to affect, we don't feel there is a pressure to do that immediately, and we are not considering it at this point because of that.

And then on deposits, is it safe to say now that the government deposit piece is pretty close to having fully repriced now that the Fed is presumably done? Aurelio Alemán-Bermudez: I think it is safe to say that, yes.

And then as you think about sort of the expectations for the remaining portfolio, which has been much lower beta, maybe you can walk through some of the expectations over the next couple of quarters in terms of how you're thinking about how those betas might trend, I guess, as you see excess deposits and excess liquidity come out of the system? Orlando Berges-González: Yes. We don't -- the betas on the other deposits, we feel they are going to be pretty stable of what we have seen so far. There is obviously the component of the migration still into -- there could be still some migration into time deposits. And there is the component of maturing time deposits that we have that obviously are going to reprice at slightly higher rates. The average cost was about 291, the cost, obviously, it's a little bit higher now as we have repriced others. But when you look at a 1-year CDs, might be close to 3.75% to 4%. So there should be some impact in there. But that's why we mentioned that assuming your first statement that we agree that there is some stability on the government -- the public sector side in terms of cost based on where rates are, that those cash flows coming in from the portfolio, the investment portfolio, would be able to be used to generate better deals that would offset a large chunk of that. So that's why we see that stability and the margin coming in and starting on '24. Aurelio Alemán-Bermudez: And that's important. Yes, I just want to add, that's very important. I think the expectation of the cash flow from the investment portfolio are going to be increasing as we go forward. And obviously, the pressure of the betas on the government was significant. So we do expect to see some of that benefit of converting those cashflows to much higher dealing portfolio, loan portfolio to benefit of 2024 to mitigate what we have seen in the NIM and the NII.

So I guess, just boiling it down, do you expect this to sort of be the inflection point on NII and the NIM? And starting in the fourth quarter, we could start to see both of those go higher? Orlando Berges-González: We feel that we see the inflection point starting next year, early next year, in the first quarter where we'll see a little bit still the repricing on the time deposit side happening this quarter -- this fourth quarter of the year. So it -- again, going back to statements we have done in the past that the growth on the portfolio, on the investment portfolio could be a factor to offset some of that, helping keep that net interest income going up a bit from where we are or staying at the levels where we are.

Okay. And then just final question from me. Just the highway deal that you alluded to in your prepared remarks, can you just talk about how that -- I'm not sure if it's been disclosed how big the bank financing piece is exactly, but just how that might actually impact your balance sheet, both in the fourth quarter when that deal is expected to close as well as if there's a piece of it that might be sort of a go-forward piece? Aurelio Alemán-Bermudez: Yes. Well, it was publicly announced this week, on Tuesday, by the government and the winner of the bid. They're working together to close it close to the end of the year. So most of the benefit will come in the balance sheet for really 2024, some this year, but mostly 2024. Banks, local banks, it was publicly in the statement that local banks contributed around $600 million of the financing required of the initial payment of 2.850. Our position, we contributed -- we committed $150 million to the transaction which will be disbursed at closing, yes.

Thanks for the comment on that. Thank you for taking my questions. Aurelio Alemán-Bermudez: Thank you.

[Operator Instructions] We currently have no further questions registered. So I would like to hand the call back to Ramon Rodriguez for closing remarks. Ramon, over to you.

Thanks to everyone for participating in today's call. We will be attending Hovde's financial services conference in Palm Beach on November 2 and Piper Sandler's conference in Miami, November 16. We look forward to seeing a number of you at these events, and we greatly appreciate your continued support. Have a great day. Thank you.

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines. Thank you.