First BanCorp (FBP) 2023 Q2 法說會逐字稿

Good morning and welcome to the First Bancorp Second Quarter 2023 Financial Results Call. My name is Candice and I will be your moderator for today's call. (Operator Instructions) I would now like to turn the call over to our host, Ramon Rodriguez, Investor Relations Officer. Please go ahead.

Thank you, Candice. Good morning, everyone and thank you for joining First BanCorp's conference call and webcast to discuss the company's financial results for the second quarter of 2023. Joining you today from First BanCorp are Aurelio Aleman, 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 or press release, you can access them at our website at PHP investor.com. At this time I'd like to turn the call over to our CEO Aurelio Aleman.

Thank you, Ramon. Good morning to everyone and thanks for joining our call today. Once again, I have to say that we're very pleased to report strong results for our franchise. We earned $70.7 million or $0.39 per share during the quarter, which translated into a solid 1.51% return on assets. Pretax pre-provision was flat. Continued strong when compared to previous quarter. A slight reduction in net interest income was offset by lower expenses and higher non-interest revenues. The provision for credit losses increased to $22.2 million and credit quality remained stable, with non-performing assets representing just 63 basis points of total assets. All in a great quarter with most KPIs moving in the right direction.

This year we just began the celebration of our 75th anniversary for the company. That was going to be celebrating during the second half of the year, I'll take the opportunity to thank all my teams across the 3 regions for their work, their ongoing commitment to our organization, to our clients and the communities we serve. A great first half of the year to continue moving forward. On the capital front we completed our capital planning process during the second quarter and very pleased that our board approved an additional $225 million common share repurchase program. We expect to repurchase $150 million in common stock during the second half of 2023, of which $75 million relate to the remaining amount of the previously approved stock purchase program that was resumed early in July.

Our ample capital position remains significantly above well-capitalized thresholds, which allow us to continue growing the franchise on the current operating environment while preserving shareholder value. Now let's please move to page 5 to discuss some highlights of the balance sheet. The loan portfolio grew for the sixth consecutive quarter, underscored by solid consumer and commercial loan growth. Growth was actually in line with our mid-single digit growth guidance that we provided earlier in the year. Consumer loans grew $88 million or 10% linked quarter annualized and commercial loans increased $71 million or 5% linked quarter annualized. This loan growth was partially offset by the expected reduction on the residential mortgage portfolio which the quarter happened to be $90 million.

Loan production activity continued very consistent during the first half of the year. And I think the good news is we continue to see very strong pipelines for the remainder of the year, particularly on the main market. I think it's important to mention we continue to operate with our conservative risk appetite despite of the optimistic environment that we see. We have not changed risk appetite moving forward in our main market. We have said in the past we operate well-diversified and balanced portfolio managed within the guardrails established by our risk management function and overseen by our board. Our commercial loan book is specifically comprised of borrowers across multiple industry manual exposure to office.

As you can see in the graph on the right side, the limited real estate exposure and I will say minimal refinancing risk over the next 2 years. That said, we remain vigilant to the potential impact of monetary policy or potential slowdown in the US economy may have on credit and loan demand but are really very encouraged by the ongoing business activity in the island and economic growth over the short and medium term.

Let's turn to page 6 to discuss our funding profile and review an important element these days deposit performance. Overall, total deposits increased $768 million during the quarter, excluding brokered CDs and government deposits decreased by $104 million, mostly driven by reduction in demand deposit accounts across all regions, offset by increases in the time deposit category of $149 million. Customers continue to reallocate cash into higher yielding alternative. Government deposits which are fully collateralized increased by $761 million a primarily in Puerto Rico. Overall deposit growth allows us to continue to repay some of the borrowings we took out in the first quarter to provide additional liquidity.

Our liquidity position remains very strong. Total unused liquidity available liquidity increased to $5.6 billion during the quarter and now represents over 117% of uninsured deposits. The deposit base composition is very solid with a 36% noninterest bearing ratio and an average balance per account, approximately at $25,000. We do expect that industry wide core deposit trends will remain relatively stable over the second half of the year. We continue to focus on our core deposit strategy centered around increasing client share, launching new products, attracting new customers and providing superior quality service. Expanded branch network and self-service Digital channels are already part of the offering.

Let's move to slide 7. Page 7 to discuss how we see the operating environment. The economic backdrop in Puerto Rico continues to be supported by strong labor market compared to prior years and a consistent flow of federal disaster funds foreign investment. A preliminary employment figures for June showed that payroll employing was up 2.4% when compared to the prior year and unemployment stayed at 6.1%. An important statistic that we continue to monitor is passenger activity, which at the main airport continues to increase. Traffic in June, up 22% when compared to June last year. And the Economic Activity Index, the coincident indicator of economic growth in the island registered in May, it's highest reading since June 2015, and it was up 1.8% when compared to the prior year.

Business activity continued to be solid. Manufacturing sector is stable. Strong consumer confidence reflected by strong auto sales and strong retail sales that are being reported during the first half of the year. And I think it's important to highlight that we're very encouraged to see the accelerated deployment of disaster relief funds. We actually have doubled the pace of disbursements when compared to the first 5 months of last year. January to May is at $1.8 billion versus approximately $900 million prior year. So that is really funds are do moving and we see it in the construction activity out there. During the quarter we also continue to make progress in our omnichannel strategy, deploying our small business digital lending offering to our regions and we also relaunched a new corporate portal which we actually serve as a very important tool for expanding digital sales capabilities and digital experience for our customers. Now I will turn the call to Orlando to go over some of the details of the financials and we'll come back for questions.

Thank you, Aurelio. Good morning, everyone. Second quarter was a very stable quarter. In the quarter we faced net interest income pressures that we had mentioned in the prior quarter earnings discussion. We also saw some increases in the provision for credit losses but ended up with a with a lower expense base. Net income, as Aurelio mentioned, was $70.7 million or $0.39 per share. If we exclude some non-recurring gains we had in the quarter, non-GAAP net income was $66.8 million or $0.37 a share.

Adjusted pretax pre-provision income was $118 million, basically the same as last quarter. And also, as Aurelio mentioned, strong return on assets at 1.51%. The provision for the quarter was $7 million higher. It's mostly related to the growth on the portfolios and the impact of the projected deterioration on commercial real estate values at a national level which could potentially affect our markets even though we don't see it at this point. But but still has been incorporated as part of the analysis of the provision.

The effective tax rate for the quarter was down to 30.1%, which is 1% lower. Last quarter was 31.2. It's mostly related to reduce federal taxes estimates as funding costs have grown in our US operations. In terms of net interest income for the quarter it was $199.8 million, which is $1.1 million lower than last quarter. Interest income was higher by $9.8 million, but interest expense grew $10.9 million in the quarter. In the commercial portfolio, interest income grew $3.4 million, driven basically by repricing and higher yielding new loan originations. The yield of the commercial portfolio grew 15 basis points this quarter and the average balance was up $27.1 million. As Aurelio mentioned, the ending balance, the growth in loans was about $140 million this quarter.

In terms of consumer loans, the interest income increased $3.9 million, mostly related to the $71.8 million growth in the average balances. But we also had a 13 basis points increase in yield.

Okay. I just got a message that we should be good to continue. So Orlando will continue.

Hopefully they heard the discussion so far. I was saying that over the last 12 months, our cumulative data on interest bearing deposits in Puerto Rico was 75%. However, for this quarter with the lag effect, it was 100%. On the other hand, the cumulative data on interest bearing deposits which exclude government and time was 14% over the last year. Net interest margin for the quarter decreased 11 basis points to 423, mainly reflecting the effect of the higher rates paid on the deposits and not increasing migration from noninterest bearing and other low cost deposits into time deposits that exceeded definitely the benefit of the increases in rates on the lending side.

We expect that interest income will continue growing during the next couple of quarters to 3 main factors repricing of loans and cash balances that will happen during the next couple of quarters at least based on rate expectation. The projected loan growth at a definitely higher yields and the repricing of the cash flows that we're getting from the low yielding investment portfolio maturities over the next 2 quarters, $380 million in investment securities mature from the existing portfolio. Interest expense, on the other hand, is also expected to increase. Maturing time deposits will reprise at higher rates, noninterest bearing and other low cost deposits probably should continue some shift into higher cost deposits and the cost of public deposits will grow with increases in rates. And those are the components that led us to say last quarter that we felt stable net interest income with some growth associated with portfolio growth and which we still feel it's going to be the case.

In terms of other. Income, it increased by $4 million this quarter. We collected $3.6 million on a settlement of an old legal case and also recognize $1.6 million gain from the repurchase at a discount of $21.4 million in junior subordinated debentures. This gains basically offset with the $2.3 million we had last quarter in contingent insurance commissions which are collected the first quarter of each year based on prior year productions. In terms of the expenses we saw, operating expenses decreased $2.4 million to $112.9 million during the quarter compared to $115 million last quarters. Both quarters include approximately $2 million in net gains from the disposition of Oreo properties.

The second quarter also includes $1 million in legal and operational reserve releases. While the first quarter call we collected $1.2 million in annual credit card expense incentives that reduce our processing costs for the quarter. Excluding these items, expenses were approximately $115.9 million compared to $118 million last quarter, $2.5 million reduction. Most of this reduction relates to payroll taxes as employees reach the maximum taxable amounts for some of these tax components.

Expenses in general have remained below our guidance in part due to 2 delays in the timing of some of our capital projects but also due to continuation of our expense management initiatives. What we expect for the third quarter, there will be some increases on compensation based on the merit increases that have been granted. Yes, effective July and we'll see some increases in business promotion related to several events that are planned for the second half of the year as part of our 75th anniversary celebration. This expenses will take us closer to the guidance we have provided. But definitely we expect to be slightly under the guidance at this point.

Our efficiency ratio remains very low at 47.8, excluding some of those other income items I mentioned. It's closer to 49%, still very low and lower than the 50% threshold mark. Asset quality has continued to be performed very well. Non-performing assets decreased $7.9 million to $121 million with just 63 basis points of assets. Commercial, non-performing and down $4.4 million driven by the $6.2 million charge of we recorded on a Florida loan that was moved to non-performing last quarter. Also residential mortgage non-performing are down $3.1 million and properties in Oreo are down $1.3 million.

Inflows to NPLs decreased by $4.8 million, total $24 million for the quarter and it's mostly related to the loan I just mentioned that was moved to non-performing last quarter. We did see some uptick in early delinquency in the quarter. Early delinquency defined as 3089, that increased $24 million. But if we split it up in components in the commercial side, it was mostly temporary since we had a $4.5 million loan that matured and it's in the process of being renewed, but it remained current on the consumer side. Early delinquency represents 2.24% of consumer loans, which even though it's higher than March, it's very similar to what we had in December, which was 211, but it still is much lower than the 301 we had in pre-pandemic in these portfolios.

Finally for the quarter increased again because of the $6.1 million we took in the commercial case represent 67 basis points of average loans up from 46 basis points we had last quarter. The allowance for credit losses stands at $281 million, which is $3 million higher than last quarter. On just loans and leases is $267 million, which is $1.5 million higher than last quarter. This increase reflects again, the growth in the portfolio and the impact of the of the commercial real estate value forecasted deterioration at the national level, which does have an impact on the allowance for loans in our case, even though we do realize and consider that the future impact in Puerto Rico and what we have in the Florida market at this point is lower than what it's out there and at a national level.

The ACL to loans was flat at 228 when compared to '22 last quarter, which was 229. On the capital front, capital continues to be very strong, as Aurelio mentioned. We continue to execute our capital plan. At the end of the quarter, regulatory capital ratios could continue to be well significantly above well capitalized thresholds and our tangible book value per share decreased only $0.03, which driven by the decrease in the fair value of the securities, which also led to a 9 basis points reduction in TCE, which is now at 703. As of the end of the second quarter, the adjustment was $772 million, which represents about $4.30 on a tangible book value per share and decreases the TCE ratio by about 361 basis points.

Again, as we mentioned last quarter, the investment portfolio has not been growing. And based on our current analysis, we expect repayments of $713 million over the next 12 months. That includes the $380 million over the next 6 months that I mentioned. And there are another $1.3 billion in maturities through the middle of '25. So we continue to pick up that cash flow and reduce the OCI adjustments associated with it. With that operator, I would like to open the call for questions.

(Operator Instructions) So our first question comes from the line of Brett Rabatin of Hovde Group.

I wanted to start with the charge offs. Hey, Aurelio wanted to start with the charge offs in the quarter. I was having a little difficulty hearing but the CNI charge offs. Can you go back over that what the CNI charge offs were?

The CNI charge offs, you might remember last quarter when we moved into non-performing $7.1 million loan we have in the Florida market, which is on the energy industry which had some specific issues associated with the hurricane that happened the prior year and that case ended up non-performing at this point collectibility of the case it's not clear so we ended up charging the amounts that are expected not to be collected, which was approximately $6.1 million. So that case that was the only large thing. Every everything else was more or less in line, slightly lower on the consumer side on some components but in line with prior quarter.

Okay. And then if I heard you correctly, you said the NNI dollars would be higher in the back half than the first half. And it sounded like from I was trying to write down the notes. So I want you to have repricing. I think I heard you say $280 million of Securities Maturing. Are you guys assuming the margin reverts higher in the back half of the year? And any thoughts on the magnitude?

Well on the back half, that's what I was saying. There are positives and negatives in the sense that we see increases on the earnings side from, again, as you mentioned, on the investment portfolio repricing of some loans, repricing of cash and also the originations that are expected on the second half growth -- portfolio growth. We feel that, that portfolio growth is the one that is going to push net interest income up margin. I am not so sure it's going to be up margin. It's going to be flat to slightly down in the quarter, but volume it's going to take us up again some of it could clearly the investment portfolio repricing doesn't happen from the start. It happens throughout the quarter. It's going to move, 1.5% sort of yields into at least, in a cash account or some something better than that on the lending side. So those are going to do pickups. But the government side will reprice with rate increases as the one we had yesterday and that would offset some of it.

Okay. I didn't quite understand the -- look like during the quarter you used some -- you brought on some brokered CDs and at the end of the quarter anyway, the balance sheet was a little more liquid in cash. And I know you were trying to get out some higher cost stuff as well, but any thoughts on using the brokered CDs, what that was related to as opposed to just using liquidity from the balance sheet to fund loan growth?

Yes, the broker CDs we've been using it mostly on our Florida market. Not in Puerto Rico. We use balance sheet sometimes it's a function of a mix of tax implications. The use that we're expecting on some things in Puerto Rico what we want to keep in cash because of the level of government deposits that we have that have some additional volatility. So all of that is taken into account. But at the end it's a function of what how much we want to fund the US operations from Puerto Rico or using some direct cost in this case brokers in that operation. The Florida market has been very expensive and broker brokers that we're taking are not long term. So we've been using that as a way of managing and balancing what we want to see on the future of the balance sheet.

Our next question comes from the line of Timur Braziler of Wells Fargo.

Following up on the line of questioning around the NII it looks like the securities book from a period end balance is smaller than the average balance. I'm just wondering, is that a timing issue? Because it would imply that the balance sheet is going to be smaller in the back end of the year and then you're going to seemingly have some pressure from just seasonality of public funds and those rolling off in the back end of the year. Is the outlook that the loan growth offsets that and the balance sheet is kept flat to higher and that's what's driving the NII growth. Because it seems like there's some structural headwinds just on the balance sheet size and getting NII higher.

Well, you know, I think it's important. Orlando mentioned, the $380 million, for example, of cash flows in the second half of the year that comes from the investment portfolio are yielding, about one 3148 The objective is actually to replace that with loans on the books and those laws on the books are coming in, on average on a blended, about 7.5% when you add all the products. So obviously there is an improvement there to NII. The offset to that is how much will be the delta on the deposit side. Okay. Specifically government, we do not expect government deposits to decline because there is a continuation of money coming in. Money goes out.

There's a lot of inflow and outflow on that bucket net. This water was positive. They could decline slightly, but we don't expect a significant decline on those. The baton doses, as you can see on the slide that we put together, it's higher than in the other core deposits. So that $380 million is important the size of the at the end of the day a you know there are lungs that are that comes in to replace you know loans that paid off and mature. But what's I think what's going to drive the NII up is how much we can grow the portfolio. And obviously, we've been achieving our guidance on that sense which is mid-single digit. But I would say the reality is that we have to do more than that in terms of growth to be able to achieve, NII improvement.

I would say net it comes to that if we grow what we've been growing, it's going to be about flat what we just saw and again, there's a lot of plus and minuses here that we are adding together and trying to simplify for you. But it will depend basically how much more -- I think if you look at the Treasury curves, that could be a good indicator what happened with the short term Treasury curves because that's where the pressure comes in, competing with the with the deposit of the CDs and the government deposit. So the especially the one year Treasury as an indicator.

Specifically on what you mentioned, the investment portfolio in actual dollars was down about $111 million in the quarter. The risk reduction that goes doesn't go into average, which is related to the OCI valuation. That doesn't affect the average. But also if you look at the lending side, the loan portfolio grew $140 million or so in the quarter and the average growth reflected on the portfolio was less than that. So when you consider those factors, we don't see the balance sheet coming down because of that.

It's reallocating it into some of the of the lending components that are coming into the balance sheet at a higher yield. And again, as I mentioned, we don't -- the level of government deposits that are that we have out there, it's taking us to a higher level of also of cash kept on the account which we don't foresee reducing that at this point based on the composition of those deposits. That's why you -- what you see at the end is not a reduction on the balance sheet.

Okay, that's helpful color. And then maybe just looking at the actual securities yields in the quarter, it looks like MBS yields declined, a good bit here quarter on quarter. Is that just a mix shift of what's rolling off? And I guess if the expectation isn't to reinvest future maturities, kind of what do those bond yields look like as some of this $380 million rolls off over the next 2 quarters?

On the investment on the CMO side, especially as there are 2 things obviously what's running off, but it's also a function of changes on prepayments from quarter to quarter that affects there is an average calculation that is done over time to incorporate repayment assumptions. And if that changes, it changes a bit the assumptions and we had some of the repayment of the prepayments assumptions affected that reduce a bit the amortization of some of the discount and premiums that we had on the portfolio that also created some of that variability that you are saying.

As the $380 million matures, those are things that, that are mostly contractual maturities that are that are coming due on the next 2 quarters. And clearly with lower yields and those are going to reprice. But we don't expect to see significant changes on the yield on the remaining portfolio. From what we have seen over the last 2 or 3 quarters.

Got it. And then switching to the expense side, there was a comment in the prepared remarks that delayed capital expenditures is partially responsible for the better expense run rate. I guess what's the time line look like for those capital expenditures and the fact that there is some delay? Does that mean the magnitude when that initially starts is going to be a little bit larger? So maybe just talk to the time line of those expenditures and then what that actually does to the expense rate once those start to hit.

When I say delays -- when we said delays in there, some of these projects not that they were put on hold. Some of these are ongoing. It's taking longer some of the stages of the project. So it's not going to be all at once kind of thing. It's going to happen over time. And that's why it's affecting -- on the next couple of quarters, it's going to be lower no matter what because of the pace at which some of those projects are ongoing at this point. So it's not something that you'll see hit at once because it's going to be unless we are able to accelerate some of it, which at this point we don't foresee that on the larger projects. So that's why the run rate on that specific component will continue to be lower than we had originally anticipated.

Got it. And then just lastly, a modeling question. Do you have the average balance of public funds for the quarter?

The average balance. I can -- I don't have it handy Timur. I can get it to you. We ended up with in Puerto Rico with $2.9 billion of government deposits. We had I think $2.2 billion at the end of last quarter. But we'll get you the average. I don't I remember from the top of my head what's exactly the average.

Our next question comes from the line of Alex Twerdahl of Piper Sandler.

First off, I was just curious what your expectations are for the balances of those government deposits over the next couple of quarters. If you expect those 2 to sort of flow out I guess with seasonality or maybe where you expect them to end the year.

I will say, most probably we'll stay around where we are today. I think we will see some in and outs. There's a couple of initiatives related to the energy that are linked to some of those deposits, the energy plan. So if those are move ahead of the time line, those deposit for this year is not a definitely by early next year they will which is the plan. So it's not a firm answer I know but that is just the volatility that is behind those. I think today I have to say, you know, we should be okay for this quarter based on what we know, what we see and the projects that are ahead of us. But aside from that, it will depend on the timing of some of those projects that are linked to this.

Okay. And then are those I mean, I assume that those are going to peak out at some level that's below Fed funds. Despite the high bid in nature. But I mean, maybe you can tell us where those might peak out in terms of the cost. And then also just if you have the cost of you put the betas in here of the various buckets, the interest bearing public funds, the time deposits and then sort of the core deposits, do you have the actual interest cost of each category?

Yes we -- the average cost of broker of government deposits in Puerto Rico for the quarter was 270.It obviously not all accounts are at the same type of accounts. Obviously that does not include some non-interest bearing accounts or very low interest bearing accounts that are more of kind of accounts. But on average, it's about 270 at this point. And there are some accounts that move straight with changes in rates, others that are move a little bit differently. So that's where we have the average cost was about 50 basis points lower than last quarter. I mean, higher than last quarter. I'm sorry about that.

Okay. And what about for non public fund deposits?

Nonpublic funds only that includes if you look at a I need to take it take it out. Alex I don't have that one broken down. I'm sorry. I would have to we can include that as part of the disclosures. I don't have it broken down the non-government deposits separately.

Okay, understood. And then Aurelio just going back to your comments on the loan outlook and I think you said very strong pipelines through the remainder of the year. And then I guess just based on your comment that the sort of new loan yields were like in the 7.5% range. Is that the assumption that the bulk of what you're looking at are you referring to is commercial in nature or maybe just talk about maybe the complexion of the loan growth that you expect and if there's any big chunky moving parts in there that maybe could cause it to come in better or worse, any paydowns or anything that we should be thinking about for the third quarter?

Yes, I think I the third quarter is kind of in a normal in the normal, run rate that we had in the first half. There are a couple of chunky ones for the fourth quarter that will that should close, I'm sorry, in the fourth quarter. In terms of the year that I mentioned, they're a combination of all the production that we do. Yes, there is. There is. There is a chart on the portfolio yield. It's like ten. How we have evolved with the trends and rates on a portfolio basis. You know, it has accumulated about 100 basis points overall. But when you look at the blended that comes in happens to be around that number a little bit higher depends on the mix of consumer versus commercial.

Alex, to your question, I pull out the number. It's the cost of deposits of other deposits excluding government and time deposits. It's 68 basis points for was 68 basis points for the quarter.

And on the chart, that we had on the on the presentation, we did include the average cost of all funding sources. Including noninterest bearing. The average cost was the 123 that we included on the on the presentation. And you can see the movement on that on that chart over the last 4 quarters how the average cost has moved. That includes the wholesale funding and government and everything.

Got it. The security maturity that you alluded to, I think you said 340 for the back or $380 million for the back half of the year. Can you just break that out by quarter and tell us the I guess the first and the second quarter as well? I think that was you aggregated it all together in your prepared remarks.

It was aggregated the -- it was not exactly 5050. It was about 170 in the third quarter and the rest on the other -- on the fourth quarter.

And then you talked about, getting back to your expense guidance. Just remind us that was, I think $116 million per quarter.

The guidance was 120.

Excluding Oreo. That excludes Oreo. So if you look at with Oreo, assuming that $2 million or so gain like we had this quarter would have been equivalent to 118. We exclude Oreo because of the volatility. We're still selling all the properties that we had there at lower values that we've been clearing different kinds of issues we could have with the properties and we're still generating profits. That number should eventually come down. But still, it has been sustained over the first couple of quarters. We expect that number to be positive in the third quarter, but it's going to be probably a little bit lower than what we had this quarter.

Our next question comes from the line of Kelly Motta, KBW.

I guess circling back to the expenses again, I know as you've touched on at length, that part of the lower expense run rate right now has to do with some of these special projects you are undertaking and the time line of that just as we look ahead, can you remind can you remind us, just like on a broad level of kind of what the things your strategically focused on over the next year or 2 that may comprise some of these projects, whatever you're able to share?

Well, I think the largest component is migration to cloud of all IT components that encompass a significant number of projects. I think the other second one is process improvement is investment in technology that obviously will make us more efficient in terms of automated activity. So my behind it to and robotics RPA. So it's really primarily technology some facilities components to in line with it. But I will say that will be probably 80 over 20 meaning the technology side. And it's taking as Orlando mentioned, it's not that it's being accumulated, it's happening, but it's -- we forecasted a faster pace and it's happening at a slower.

I said there are no additional questions at this time. Ladies and gentlemen, that concludes today's call. Thank you for joining First BanCorp Second Quarter 2023 Earnings Results Call. You may now disconnect your lines.