FBP - Earnings call transcript Q3 2017

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Operator

Good morning and welcome to the First BanCorp Third Quarter 2017 Results Conference Call. 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 John Pelling, Investor Relations Officer. ahead. go Please

John Pelling

Good First Rocco. the and you XXXX. thank financial Thank conference morning, call joining quarter third BanCorp’s for discuss and for results you, the everyone, webcast Company’s to

FBP me Orlando and Vice are Joining Executive from Aurelio President Executive Berges, Financial and Chief and Aleman, President Officer; Chief Officer. today

structure, call statements to of today’s forward-looking important statements anyone forward-looking call. Aurelio. certain the from factors the described BanCorp, them webcast call, by Company’s begin to website, during responsibility due Aurelio? the you revenue, we made objectives Company’s involve not made does and presentation is turn my update issued of access to as differ over any I’d like forward-looking to the business. actual copy the as may filings. projections as or no inform plans SEC and Before latest of CEO, The the If statements it materially statements First you our on results earnings, to capital can call have The that www.firstbankpr.com. time, well already this a Company the such release the At could this in Company’s our press obligation at assumes

Aurelio Aleman

John. discuss morning, for our Thank you you, to Good everyone, third us joining thank and quarter results.

Maria. year before on and provide with against On two the time our with on begin in details the – will want financials highlights Orlando to the I the following usual. of Orlando situation really touch its this I call CFO. the Irma the as But Berges that here quarter

what the-board people, are have business, of outstanding First effect. say care we’ve challenge president show jump team is shown responded a very has to how communities, dedication to of on audience our aware present to that that to slide we’re proud to their Let’s as Bank the X, the situation, our our so the they

platform of then threat real event and station in say most you address as September to really If for for costumers, was the supply we was the to the secure number of opened we and Caribbean larger channels, our week early market. know the we Maria electricity storm. Puerto-Rico remain following a after Eastern establish that infrastructure our during impact our the to the a before the causing did and to consumers been of of by communication are and really generators provide actually access and commercial safety the going or good working achieved hurricane, island. did facilities have a high of the say And branches branches all very among to do and working one services, to to things. following most how the employees technology We new our serve the chain clients customers for the to who our our that next Immediately ensure impact service opening we XX% and to operational Monday, the

has Additionally, very community and for volunteers support efforts been important that area. in active recognize relief FirstBank impacted to it's volunteer, have

corporation helpful large organization Puerto are like communities who Rico with towards and alliance established clients really island. a the have We around an the [indiscernible]

services. getting back in have of in so mountain yesterday. I social bank responsibility weeks. operations of the of Actually to achieved And showing over are we X, poverty past the the high very up the we slide XX% say have almost a the spite the support progress. for percentage, the open better of To the developing that developed slight to achieve we to the alternate And able over are obviously graph conducting have think reopening need. their Puerto expose of on Island in from the six of normal network we challenges services lot have ways some weeks, and of limitation XX%, and bottom us. to is a we do getting our of to the are storms service areas recognize we say we being that of couple from are key the areas, level the business last Virgin back the Referring and it's of business high are remote important and in as XX% in Rico clients the to that today to coming the our business, back those the for all

but only taking but see fully about the Let's the get there. we government recent the unfortunately as the the we're since there's the Again over the shows and still will September please impact to number, Most progress slide can is goals period in have reconnected X close I power move the we polished impact challenges in compensate top to because be to making restored. you in up we can concerned the areas X, the by been being I ’XX, we am jalo and economy progress rebuild many grid correlated to after infrastructure is completely Slide as the talk about we sorry. to and services in the to put to this mid-December, we progress service order many on to see line energy know by is weeks we and by not business say first past to time to XX% but we and our key XX% key offer we be must see are back the electrical business are. have directly Slide hopefully the the reconnected able island X industry. to see remain this chain, to until Rico those where most industries grid see electricity Puerto can XX% generation which supply for [indiscernible] normal say everything this yes

Okay.

to our that also. borrowers there Orlando by the to in non-performing will the they after storms translate did our the of loss ability financial interrupted to and collections Obviously to the about [indiscernible] not for into highlights the lost move assets, more a This comment so for this to was of into in and get the XX. programs per our to [indiscernible] have delinquencies impacted net we this we of contact and quarter, limited so charges start explain Hurricane, mitigation credit did related or is few say we definitely and during quarter. offer area. very a let's results important can provision the and in but Okay, our income the storm borrower $XX.X efforts really were storm weeks included pure Orlando to impacted delinquencies And detail. X $X.XX million it quarter and next slide, talking million a both later share commercial the that much of detail and to are will definitely offered third consumer our and the borrowers after more

Excluding there the the million to agreement prior really storm, Xrd with track them was stronger that that the the on we the a good for something certain to recurring the subsequently When September got on we highlight impacted came compared impact of quarter. pre-tax quite numbers termination have items, Federal we formal the reflect to the quarter, to volumes. net pleased quarter. though were had been XX.X on even was to time. of pre-provision to the XX.X of Again, items I end October business will the do that did are our that And Reserve, numbers pending importantly want announced some income

really for the our at result reported October strong end economic worse our show definitely [indiscernible] even of in the we position scenario. Additionally, which test stress capital

normal to helped to Florida recognize as definitely trend to in have volumes definitely impacted the September, people top. volumes but difficult in Puerto to grip, sense hurricane quarter, our loan month like But quarter things this contributor Rico everyday see more our the because the until bit. lightly ACR obviously can the some on reduction the to a in graph comment started we Let month are first see to please lease September, impact take renewal normal. start coming we remember expect but on have initial strongly us and region of important with this that pipeline the and coming next quarter back, It diversification we portfolio going and should September. an connectivity in move on very our closer us most applications are strategy. seeing the activity remain on early regional being from of by slide to and timing is it’s the in flow is the of component we this and the it's during origination definitely flat so Loan in some important impacted it mortgage times important and Obviously a down in was the activity very was loan the a of the some until also up buying portfolio

significant On island and next other and translate loan ahead there the opportunity rebuild, our Rico Rico XXXX. be look expect we from definitely in this our the for hand, of reconstruction demand this year increase do sector the to should and to for and begin on what Porto as both XXXX is the Puerto for activity re-modeling we loan portfolio private infrastructure the will growing a

the deposits, stable. Just deposit the very touching on [indiscernible] franchise

early cash our that recognize the there we account. of is closely already crisis a actually disaster was of on which the from of a slide we bit in from normalized. We seeing to be continue volume the task. thing are borrowers, exposure an on have the is that into and used monitoring a will manage coming some flowing We're process our very on natural crisis in liquidity this claims to fiscal for bank, government the issuance not some little the reconstruction to demand XX, for moving easy is it the into is a Touching the process increase obviously claims

working feel our continue as with situation, in we We do support can, our but supporting exposure we the municipalities with and the exposure municipalities increase to and to we we continue very these Puerto to deposit, even the looking government and Rico that relationship with the stable. comfortable a government not have be the current to to as we're continue yes government much

Q&A. Now the going and to call I’m back details be for Orlando we hand more will for to

Orlando Berges

important most put most To commercial What as damage to compared before. officers the and so all storm far, XX.X our it's customers a determine property interruption, financial of it's impact of including qualitative that in each significant from to damage assessments visiting the done coverage Aurelio mentioned cetera. make the covered perspective, provision storms. Clearly, think item significant losses everyone. financial I results impact we million morning, additional loan that Good first for was I the them loan on a level we've of the et business

However, September the makes these through the so of to occur to quarter end costumers estimate the the immediate or on today. close by events that difficult really it all impact

detail assessment but more We not we've rather information expect market quarter will the the be impact come gathered information. that island. customer physical on from well to will from far, feel by substantially obtain the these damage as specific financial information so economic much we we to impact the the completed property From as activity as the so fourth customer

trends We declined we assumptions These well assumptions portfolio have experienced internal important when that and example To the you current have Rico unemployment detail calculate unemployment, activity. our both levels other are in this example example. from the in increase economic estimating perspective XX.X% to Rico ran Hurricane economic in we and losses we market models incorporated Katrina the stress these on index regions. in ratios and to in then Puerto on on are models unemployment assuming in just assume our done put Georgia levels for over similar activity give two in to some-- Puerto base we as in events proportionally applied the Rico resulting for we models to an of release. order doubled some current and in press Puerto from XX% based we the amount in hurricanes as balances them increases in portfolios decreases what resulting from our were So it’s which interim the the an used loss each

on XXX,XXX it and this basis the migrated higher started that and maintain. all that Aurelio would information points need the the cases and already areas the hurricane, and liquidity economic short increasing the residential through liquidity of the down interesting few activity the net of quarter impact had lot you be and expectation hurricane. expect since there five see magnitude to Obviously funding deposit with net have the economic are was that will in we we to in significant impact make weeks decline, to the the buy third due were if also recovery to will of has million decline collection we term events beginning outflow additional pre-hurricane Obviously mental be just that we case stimulate obtain those typically XXX all some market. other and half for efforts we margin due we excess pace interest loans efforts we this of sure just the We quarter NPAs we as temporary you rebuilding mentioned the in and are recognizing XXXX below took since the seen funding by accelerate to that due we clearly of to to levels. estimates reckon activity need. come even the in after these first change end subject a because the costumers levels additional will of impact lead impact, have a storm's common trends Other to of and mortgage did saw At to intuiting cash but up on liquidity is this we saw there anticipation

as the other the the good subsequent we million XX% and we down volume we banking of before of ATM of and other that we also mortgage significantly transactions are obviously from of reduced the were portion also mortgage conforming income ATM seen originations this transactions seen in XXX,XX On we the sale servicing level is POS in reductions and about and in the of of level and at rights. In items, saw and directly market X.X effect transactions fee sales we're income mortgage POS paper the down is of what reductions saw reduced were the income valuation of we now before.

piece customers, weaving the Of provide some did money. to course the to we help access

everything, they will compared $X.XX million be Aurelio loss net posted of XX recovered million from the this On share of the carried XX.X cost overall related insurance efforts a other in The and hurricane. income by it occupancy we quarter expense into, highly storm with quarter or loan XX mentioned, we in a operation expenses work of net also XXX,XXX from X.X around book salaries X.X includes sought million and the As amounts we Also, incurred about charge primarily we XX were combine a we that [indiscernible] X.X million the the damages third last A for relief opacity second during million XXX,XXX provision. $X.XX for as million the to out. donations XX compares side, with driven provision was we that the for losses is had the probable million we that million see the of time were which and quarter, it quarter,

had provision quarters. affects and last needed it a that normal pretax The specifically the with benefit quarter increase fact reserve in are last we On was reserve evaluation detail of the have to the from was income calculations. because over X.X and that taxable in than tax lower the a the based value million of now associated commercial had relationship resulting on reserve do overall quarter collateral level that offs, the we had and of of exempt two we lower the charge partial the also general changes on than we've based shows only the releases cases the loss some ratios and provision, year hand, reserve on for on evaluated other improvements impermanent the under

quarter rate the So assume tax whole to if on in XX% year for we XX% a of we all the would obviously expect but components. the normalized fourth of would that the it somewhere a depends relationship range be

for of securities pretax prefer of this across quarter the adjusted X.X bit gain have mentioned, down purchased we and XX% as was Aurelio X.X did at million million income one quarter value. we last million par XX.X from as So pre-provision a quarter extraordinary

of X.X insurance that were If be adjustments payroll preferred and are we other excluding you as which were items includes quarters. to component, the and related hurricane improving clearly million, we salaries If look quality brokered were two to, of expenses expenses, in the at impact normalized net XXX other some at share we to their Credit in increase XX.X quarter, receivable will the partially non-performing. the the gain is payroll larger last hurricane fact booked in in idle reductions decrease further on that had so at we improved impact the as also assets expenses the XX.X charged XX to XX.X for the hurricane mostly million we which quarter. of down move but will with the commercial well to Hurricanes income amount The expected the beginning interest have XXth has non-performing, performance of had and an that’s relationships it's last carrying the increase that and liquidity was million all situation million, the as income and this financial is Irma XX time we not like asset been the this was on have Rico that to mentioned sort therefore FDIC net non-GAAP it's situation have that net classified some our quarter these total of million and look reflective amounted some collect income the trust non-performing its of asset NPA a on million that financial the hurricane principal million values level books. to affect September $X.XXXa down XX is expenses the Puerto relationship million, which Maria by X.X expenses, at of to due the non-GAAP core of compared will we large XX.X time flow trends attributable previous million, in the and significant Aurelio accounts a from one other the insurance which for CDs cost as

the collection We like in did programs I thing point also and non-performing million in this related had to three and month One related Puerto efforts of to to a and million in consumers regular provide that relief which essence both X increases Rico. to were out in costumers. XX residential interruption also Libya implement hurricane that extension in payment we

ratio XXX which to date the which didn't timeframes. is applied of less one collection were in Net where were had much the payments hand mentioned with In higher than the resulted of branches. by a X earlier the of the us than basis had million of change this accordance million mortgage that related X of on residential the the the In-flows a to non-performing compared loans. of timeframe XXX was end A mortgage affected the cases quarter chunk, commercial the XX to line for XX.X loan in of delinquency existing we I lot applied of TDF. case last so when very increase million since down commercial not million related increase the the September million for took Virgin in Island, in the the do, XX the of some of was efforts second means of the guaranteed do the of increase loans as and Since the for this million on couldn't costumers from And the were island. of of Rico quarter additional million we dollar Irma the rate took commercial XX two in the them event the and because an and million quarter. availability date X.X% the of one XX the increases resolution month MPLs future of case includes or course have we X.X current large allowance the to loans the we of clearly the included rate on we also the consumer the a XX in million, collections interruption the obviously commercial XX of is all of loans XX which to and expenses charge-off last and define last and The as open Early charge-off million million hit were of of XXth increased only the quarter factor in did by the extensions of hurricanes primarily the to or Puerto nonperforming charge-off as provision towards of million loans extensions or prospectively the the However, and to TDF payments, carrying event, $X.XX end the guidance increased quarter September which the that we was on are there which last other from X.X% delinquency case branches collection were we some that was or hurricane at Maria all of relief. well we with as XX qualify information status and on of quarter. two at it the an delinquency points had September.

Aurelio loss On capital remained capital the mentioned the already the in ratios small quarter. despite front, extremely strong

drops repurchase interest mentioned and preferred on capital preferred that payments that to or very it's also sustain on make show Aurelio and resold adverse to which have continue shares a economic the ample the dividends, re-publish, and we scenario. We we

like Now, for I questions. the open to floor

Operator

Thank you.

answer question session. Sandler ahead. Alex go the Twerdahl first please [Operator of begin question Instructions]. from O’Neill, now Today's We comes will and

Alex Twerdahl

guys. morning Good

Aurelio Aleman

have Morning Good Alex, you. good to

Alex Twerdahl

you. Thank

with talk your still little assessing that provisioning to estimates where the the of process the good process your the I had came roughly up bit beginning pretty that you and hurricanes just of specifically in in was of off, towards say a the last headwinds? were following or made about First individual you borrowers, want would process some you kind you for third already provisioning when quarter,

Orlando Berges

look. We took a

time We kind this, the of on of we what have Clearly, damages are all preliminary saw, million others. based it insurance, kind understand. time going how more, little interruption or down did we customers takes line XX is the all balances visits with the we customers what were a bit of at the of business but the on more to visited

what's early detail end Okay, once into little at go by bit if September you the of or time the XX% covered, how we or so more down much the it's Rico balances, really shut any on that you fully if each business all a with the not, interruption, business portfolio, the assessment they're have going requires still saw made be to go a of that still we understand side quarter October look time to preliminary during about all But have Puerto since on happening of you the -- looking ones. what's the assess grounds customers. what's more and other of these we one and at then we some going to have from back

Aurelio Aleman

I obviously just think here. and to I Alex Yes add variable want

For [indiscernible] have no is varied We open, are and operating mall, supported it's by have today, clarity manufacturing to they but it’s Retail, don't not and the for really expense for all to we is some them of were diesel more that coming grid by brings of we're our will so or great, for see, assurance they and cash to that’s services by the there varies it really when their more are still won’t not. we back industry bring so if XX% to know cannot up the we few but of provision is reach are see, good clients we a by with grip see and that really industry. we and lot to clients higher you industry. not will not own have when the really the seeing, grid XX% him different of flow until So, the there, hospitals but they back as some it's more the if have today they what them operate probably the because critical the mid-December priority to open still reopening are until then reflects of to and close a is uncertainty example, the it’s or back table back

to I mention because I think supermarket, factor stations branches and So, all in we telecommunications, percentage it's an overcome very are the factors obviously think important I bank are it now. a high want open gas are

and was really up how it's we and is closer get and attention clients possible at into we task. hard the that industry there significant a by our as we accelerate, around it's December the to to So, look hopefully bring difficult everybody to world task, a as it's damage that soon grid that there's working lot of as obviously but a difficult

Alex Twerdahl

customers the generators? full operate more for on are don't that from or expenses it electricity so are the time unable grid in grid that is the going are to to have capacity and Right higher on is which [indiscernible] not a or just the they be

Aurelio Aleman

assessment for some months, be those depends, open that going and Orlando for supply of operating we've they that been move and of grid exercise by able the interruption business and this Yes. quarter will able it's income some business the their continue for them because to have and portfolio have progress them build to some a been can cannot understanding of their three client of so months new that them so a six coverage, conclude of as and of have to it them chain client open last large are both, some have to both, individually an and interruption having here. or analyses, only net we We some last businesses make the the so them mentioned quickly equivalent to see so will conclude we is will it

Alex Twerdahl

intuitively then makes bit that provided stress of provisioning the you your that little the a additional is bit towards did at is portfolio consumer specific a quarter that sense loans there risk? models, and in the segment Okay seems more a which little from in it you general consumer but more

Orlando Berges

is factor, follow, it's take if and or into on grid business and There the their were good in because some of stories are unemployment to next takes the demand consideration we also of more. to I growth being hiring – cash services we're Again, decisions are quarter the timely not the will is again when if going and last and assuming this saying we of not businesses, but that business obviously open this we're longer. complex, based of think that longer doesn’t there will term short models temporarily increase related revenue potentially in to say the modeling and terminations the [indiscernible] employment is increase the unemployment they we the taking because the an also general grid here quarter unemployment flows. tell

an as across based And on on that's a board unemployment what resi there which So is be when are also. we could variable impact. models unemployment the It's include that the portfolio on the the across board showing. consumer use

Aurelio Aleman

lower collateral the a you do probably happen from number portfolio take of No, the it. mentioned because the the portfolio the the order content the an resi Alex of portfolio, in loss be he of but loss on calculations their behind is value an order would that model if card separate obviously content credit than

time. loss so the at credit portfolio in have, their that them among divided model an of small but personnel of it’s or end all more a auto weight is or we built portfolio components loans on do based it’s over portfolio, on So a the is

Alex Twerdahl

loans TDF some an third it the and stand the that the how exactly can today? and us made particular Okay a impacted progress on the but like cash give hurricanes that's and received likely know going just by finally, just loan, loans to of update update on quarter the how else I set color you stands for good for payment, you then just full you everything TDF

Aurelio Aleman

as part and of GDB portion guarantee agreement recognize, updated TDF linked the we agreement selling. obviously of [indiscernible] exchange have are the we and closing and final the are by that we are to so appraisals the process collaterals we only in is settlement the the Well the they those received and was the what and of agreement, which that spending own the guarantee delayed value GDB which

to the property a business taken, in it getting that we it’s crisis to and same very challenges, we have the the it those that high have occupancy the working it. actually of center there is continue the is is of little and to and actually, are a hotel out is the the better conventional the damage shows large benefits one collateral was a out it now related charges and and So, offered are value, lot becoming those collaterals and to going the they properties to because largest activity, very prior and

damages of of types they two them though and fixed other The one be fully even operational. need to to is operating, be

in and work under falls with the really evaluation toward position same to borrowers we're we the So back of that business that and borrowers have this now analysis profit. the either bringing making to other

Alex Twerdahl

Great Okay. my taking for question. thanks

Operator

our from go question of comes Jaffray And ahead. Companies. Rabatin Brett next Please Piper today

Brett Rabatin

morning everyone. Good Hi.

Aurelio Aleman

Brett. Hi

Orlando Berges

Brett. morning Good

Brett Rabatin

you're expect construction, aside next year originations Rico, about Florida from in I in impacted obviously any just going the prospects looking loan can to talk about demand and you quarter the for possible from wanted I then make the the you in you've the mentioned what it's and were grow growth first loan to but said and XQ fourth overall talk just to and at to Puerto what the portfolios in construction perspective? look growing over you're early for and know predictions portfolio ’XX volume you

Aurelio Aleman

have materials, the the of are will XX% contracts, be companies we at the equation, track and when and prior the which look suppliers are what will funding infrastructure year. look business I the the seen do different activity at looking look it importing and showing already funding construction on across look are translates the we and the the we we here this the really has a the growth businesses. getting damages of of commercial you some suffered years the numbers side if at impact into this you private I in Rico today island you on be of reconstruction think key happened side, all two XX year demand continue think believe supporting and the we side on should we that and a strategies equation, it’s on insurance are storms after were increased or record, of a Florida really sector hotels when that the to the really of actually strategy loss, sources the been at should, that other In Obviously, funds, remodeled. it's the in reconstructed business slow for businesses Puerto

wooden municipalities, large you some sector hasn't be infrastructure it's the when are definitely look housing been in present going in route into-- seeing in also the here. construction structures probably you that side, when there roads and side would space suffered area take electrical volume the with with found Rico be those area at look industry factor affordable will it So will taken the of projects. of of most there affordable before, mountain you a replacing the water be will that the are and that be that When to housing, we and the the were housing in Puerto that cerement be on the

for recovering any in we industry consumer the billion source estimated to helping have term, there's function think estimated are could amount from it's take we one assume of this to look obviously the and by effect just you think don't so unemployment they so we issue the I the have So, when and Puerto going I ripple to the track material into specific on back employment on of because seeing and that I date. Rico at $XX are billion itself, $XX get to bring to inflow, the assuming other it’s is consideration statistics

hand, part going for have it’s but We so is on Puerto get of or what factor obviously policy rebuilding yes. Rico the those construction to impact process got and and other have analyze. know so an equation, we and challenges, congress activity it’s still happen sure revisited today, the could definitely these the to foreign also policy are going they On to we that’s have that the have

Brett Rabatin

assessment pre-hurricane the a to just that your assuming I to power would us Okay are want you you're the you the than can the have color go in provision and make the economy with assumptions back and understood if bit to and sure later back and want and of comes assumptions assuming quarter, you give XXXX and be little stability, I little gave on understand the in possibly, for the some provisioning? lower what fourth sure and more around the that are then the a weaker levels, essentially unemployment making I you I you appreciate making might and then color

Orlando Berges

Yes.

more the we exists, So, over a what of issues of seeing, of we so costumers large difficulty of number have are and and tested we stronger are happens in and in economic what number correlation did having opening. are that we this -- had great because unemployment we have model of with what grid electrical happens with activity there years basically businesses losses

hitting by Rico the it are number by over the and third end first the starts of accelerated and an Puerto end Puerto XX.X% the down was last published of assuming quarter fourth assuming of unemployment the gradually the unemployment, number coming in XX%, just increase in Rico of that end in the is we XX% on through XXXX. the are assumption quarter quarter we that the So was

to year, comes economic some by in percentage and activity. the the the much we of the of first next grade on of quarter this run economic and back year end of beginning the the next the of monies would this start accumulate higher Some and of insurance year be island activity then will

to at season a similar Puerto on this the bit lot the that impacted high are the economy coming is the going impact tourism BI, we little on the it’s BI by is the to because unemployment high of the driven be going they higher some correlation and a just Rico. important industry with that there On industries it now all assumptions, to is which tourism to is and the a beginning have be fact of

unemployment can in activity it or XX% exact year increase coming this XXXX. quarter then So on starts by reduction proportional number increase, end slowly of of we down in the is through the economic that to and XX.X% third to used,

Brett Rabatin

their is this you're premier? I will give income what us, to lastly -- to power little your earning throughout were and quarter, to you the benefit pre-provision or expenses Okay be just view can you the that fee then happens in on late color of assuming will kind what process be revenue able maintain,

Orlando Berges

get Fee be next it's one feel coming income components; four it's the on to year. things it's the things mortgage take main in number our would level is on going affected pre-hurricane The we the this still the through origination, going quarter, going to don't side, that component banking fourth to be to and to quarter. fourth

that lower impact gains of We at that of customers impact commercial to to affected. to have impact. that be and of some related on on the do some sales the the would the all believe year still quarter fourth networks that the the that on so there the because [indiscernible] on the So to so be had beginning we're is we've going see still going availability cost going

XXXX. Assuming that of start normalize will the quarter grid some first see the comes substantially the we to by first of up, that quarter

it's normal insurance be but think going levels, businesses decent by not haven't on, The chunk are, other and to are that in it's are start through there. the back back the in continuing, waiving provide other here it’s on like we up that much fourth coming end and fourth on than it's a we other impact so after normal large quarter to of business in income our fee seen a are I the levels. impact chunk made the transactions And decisions deposit to customers quarter of ATM still those to opportunities went so don't there components right going to fees

very of impact. we large the the would insurance expenses and those part interest those with the expect to that side, quarter of At the second the anticipating the hurricane is quarter of expenses are the On so on moves quarter going related at recover have if corporation feel based we end point, expense an expenses, would to a of what we year. more be of end, expect end but of happens to in normalize at do that and do first policies it's beginning will part at our we the obviously net it we're income way judgmental be next economy the end this the which fourth

we that pre-provision will eventually be believe same back revenues. the I So, to do pretax,

Brett Rabatin

Okay, color. great appreciate I the

Operator

Jo comes Gladue go today our Merion ahead. Please from of next question And Capital Group.

Jo Gladue

Good morning.

Orlando Berges

Hi Jo.

Aurelio Aleman

Jo. Hi

Jo Gladue

addition you touch the more you just if provision wondering Let estimates how tried about higher unemployment growth and incorporate one on any I your estimates of to certainly of incorporate in the to tried any question to it, guess I me, calculated estimates that included unemployment. loss, that the of population about that have but number we've you guess the just sort sort of potential I seen

Orlando Berges

the of have because happen economic better already people loans at at going leave if a have it’s we that this you out on The have the components the that go side. contribute or doesn't the leave look income had we've historical thing loss included mean to economy with based because to to pay I and way the unemployment the and model we fact able so on of the people the sometimes looks and and out migration information to someone the it, to the components activity if see obviously be population been have same end with Permian, they loss those that

part part So major of component we as any comfortable and properly reflected that part the feel migration as it's this from of two modeling.

it’s activity. not feel did unemployment specifically we incorporate separate because on the we economic anything So and the measured

Jo Gladue

enough. fair Okay,

any expect I provide forward, in you'll will ask, and quarters? some recoveries you funding. provide cost net margin lower you some that Do go of of Let the some I down of some expansion couple everything be insurance into the likely and decent the mentioned drawing comments think next on the have going some, margin me think over to you liquidity interest the would guess, imagine extra I

Orlando Berges

we're a I to don't expansion. going big have think

some within when are completing have back that have we we all to programs And a even all not are see and factors still getting relief seeing the hotel payments the You bit Florida down, wholesale funding market we is coming the little inside again. that and market, have front expensive more margin our coming and need payment the happens clearly affecting getting we more is what market expensive. with some the some extending on

be that there couple going things So in are of to a are going direction. opposite

shouldn’t So, than points affected component assume by I so level anything more have impact some the this be basis else. five margin about quarter as the excess I non-performing that we liquidity, would at mentioned though that was was but next it's from there to going

Jo Gladue

was And possible, anymore if Fed about, do guess, you for specifically of of if I wondering of I at I available? some discount, the any that a guess lastly that will capital assume I trust ask securities approval get the and repurchase is the preferred

Aurelio Aleman

type opportunities as for transaction. to Well, it's table, the it the something looking on of same transactions but we of come the continue the done that depends two availability the of we

Orlando Berges

ahead as the up they it. to don't they were Fed so have going And [indiscernible] we and mentioned able went with They and supported time. -- the transaction it we execute the show to transactions, the all

other The continue will come up sense side the could I that to be same. make

Jo Gladue

off action a imagine, And have some down actions would the down bit but that from of then road is put you assumption? would capital a have until potential storms disruptions I other the fair settle things little any the

Orlando Berges

yes. fair is assumption, That a

Jo Gladue

it me. Thanks. that’s from Alright,

Orlando Berges

you. Thank

Operator

question [indiscernible], our And Please comes from go next Glenn ahead.

Unidentified Analyst

stepped have faced last and of few the on lot think and over your management a team. the associates Hi. credit to years disasters, for and that's response your guys you've always of adversity you bank's I the up Congratulations these

Aurelio Aleman

Thank appreciate you, Glenn. I it.

Orlando Berges

Thanks.

Unidentified Analyst

your you Just to expire? expectations come right back in looking holiday are the late maybe the taking give color advantage that kind holidays paying? payment kind expectations and customers your payment the -- that when December on these for at of can people of of What payment are some to then what are now, us

Aurelio Aleman

portfolio are their to we doing calling a unemployment really mortgage the We're we they number and the to instead portfolio until of have can’t the not the for continue we you lost say on doing, so until we of offered December, of or calling client, December. to done we're consumer to a waiting at optimistic. but When is looks then their were have XXX% retaining the the while tell end I look prepare what we side and the actually there period clients general payments. collection actions, even that understand jobs making though can the until

and of you and after it's of payments second I but customers impacting on matter case not to of submit portfolio majority and expect make it. case ratio year. principle the are estimate for that side, on commercial the we provision go the the we the by we again large explained and that On numbers the and interest case doing at the a the we first the when size is have case an the of it includes top extension We do actually have look Orlando payments, on a by initial period only requested quarter be as that things not back track

Unidentified Analyst

maybe there were more any up what things you just a like you're near term? and you are of give how applications and would anecdotal and could follow and seeing you the going you evidence evidence, little gave were customers are about industries said up, Okay, bit borrowing what in you seeing a

Aurelio Aleman

applicant. nothing are We

availability that the to seen very supplying the construction increases that are or and have activity the for they services some for We to reconstruction type acting activities the borrowers related of activity. to that’s related line bring have of the some materials, industry

of general, If in construction, services you're demand. increased are to you in the related business seeing an

Unidentified Analyst

lastly, then, I am sorry... And

Orlando Berges

we on going just the of don't some will the side, but mortgage but it’s side the you as was lower that coming is by I order lower do see December. well as start it low No, naturally, to expect say up

Unidentified Analyst

have through track question, in moved Florida? over were a are franchise, extensive proportion card pretty just then customers lastly to of immigration your kind the you you And what either have withdrawals credit Florida ATM typically usage of on able to Puerto Rico that or

Orlando Berges

on look more, but we up a analysis getting complex that some other It to but number know now that. it everything definite not information think data employees, more other sources is is a anecdotal, requires doesn't to everybody a information working we anecdotal, I to than back get just just framed based it and that are we honest, about on lot be to coming to it’s there's situations. know trying my determine there track, people No, at very number, and is move that the trend, are of having temporarily we large I are managing cases number show concerning forces, a a more show referred, specific people

or of employees the island take see of gap] preeminent people to [audio retirement up if when airport don't a going of the temporary and come island have number we is normal or couple it's the we know I back to know out certainty. mostly the will We quarters that they're decide would at it primarily the in I age you electricity XXXX have grade don't until I I moving is think that’s to not not, people and with think it, and

Unidentified Analyst

Great, thank you for taking my questions.

Orlando Berges

Glenn. you, Thank

Operator

back for over closing questions, [Operator am conference to Instructions], return the of I end the any remarks. going Mr. so Pelling to

John Pelling

Rocco. Thank you,

then next on conclude New KBW in road week December Sandler Maple’s the Bank and then O'Neill time we XX. on at have will America in support. Rico XXth Court This you. the XXth be to call. will Moving December appreciate on Puerto attending Thank of Conference tour and at York your the We on and

Operator

is And concluded thank we thank you conference attending today's sir, and presentation. now this you all for

lines your have a disconnect wonderful now day. may You and

First BanCorp. (FBP) 7 Nov 172017 Q3 Earnings call transcript