Thank you for joining us for this conference call for OFG Bancorp. Our speakers are José Rafael Fernández, President, Chief Executive Officer and Vice Chairman; and Ganesh Kumar, Executive Vice President and Chief Financial Officer. There is a presentation that accompanies today's remarks. It can be found on the Investor Relations website, under the webcast presentations and other files page. Please note, this call may feature certain forward-looking statements about management's goals, plans and expectations, which are subject to various risks and uncertainties outlined in the risk factor section of OFG's Securities and Exchange Commission filings. Actual results may differ materially from those currently anticipated. We disclaim any obligation to update information disclosed in this call as a result of developments which occur afterwards. (Operator Instructions) I would now like to turn the call over to Mr. Fernández. José Rafael Fernández: Thank you and good morning to all. As always, I'll cover the big picture, and Ganesh will discuss key aspects of our financials. We'll start on Slide 4. Welcome to the new OFG. As you know, Wednesday we announced the change of name of Oriental Financial Group to OFG Bancorp. Our shareholders approved that proposal on Wednesday. And this new name OFG Bancorp better reflects what our company is all about. We're a well-diversified banking and wealth management company. Please turn to Slide 5. This year is off to a great start. First quarter was our first full quarter of the merged companies between OFG Bancorp and BBVA Puerto Rico operations. Our fourth quarter 2012 was all about closing the transaction, deleveraging the balance sheet, growing organically our operations and our business, and really transforming our balance sheet. Our first quarter 2013, we are showing the results of that balance sheet transformation to our income statement. Our strategy this…

Thank you, José Rafael. Let's now turn to Slide 7, where I can talk about the loan interest income. The results you see over here represent the first full quarter, and it has one notable difference. It is a loan income both in amount and its proportion. We crossed $100 million mark for the first time in a quarterly income from loans. It is also up 153% year-over-year and 110% quarter-over-quarter. The primary contributing factor has been the size of our loan portfolio. The balance has grew 215% year-over-year and up slightly quarter-over-quarter as well. Also to note, the loan yields are higher. Our non-covered loan yield is now at 6.64%, compared to this it was 6.05% prior year and $6.09% last quarter. This improvement is mostly due to a better mix and higher yielding loan book. It is also partly due to purchase accounting. As you can see, there is a complete transformation in our income statement. We are happy to note that loan income is now 88% of the total interest income and a year ago this was just 57%. Turning to Slide 8, where you can see the deposit interest expense was $10.5 million, which is up only 15% year-over-year versus 153% increase in loan income for the same period. Quarter-over-quarter as well similarly it is up 39% versus 140% growth in loan income. The balances of $5.6 billion is up 140% year-over-year and down more than 2% quarter-over-quarter. The quarter-over-quarter decline reflects maturities of certain higher price retail and broker CDs. The transformation from year-ago quarter is again evident over here. The balances are higher as mentioned, and more importantly the loan-to-deposit ratio is improved from 71% to 94%. The cost of deposit is down to 75 basis points. This is down from 158 basis points…

(Operator Instructions) Your first question comes from the line of Emlen Harmon with Jefferies.

Maybe to kick it off, it's good to hear your comments just on kind of a strong outlook for the loan portfolio. Would you slightly give maybe a little bit more color on the commercial side, about where you're seeing strengths? Particularly, whether that's specific industry types kind of from the legacy Oriental or legacy BBVA portfolio, just kind of where you're seeing that strong growth? And maybe a little bit more color on your expectations there? José Rafael Fernández: On the commercial side, let me just give you an indication on how we're seeing this, and then I'll pass it to José Ramón, so he can give you more specific color. But in general, we're seeing both the middle market segment, which are companies with sales of $10 million to $50 million. We're seeing some good opportunities there. We're also seeing some initial good opportunities on the wholesale side, more at the level of larger companies, $50 million in sales and above, and we see some opportunities there. I'd like to also highlight, Emlen, that we do recognize that there is a niche in Puerto Rico more into the smaller type of commercial loans that we feel that we have a good opportunity also to grow there. But I'll pass to José Ramón, if he wants to add any additional color. José Ramón González: You've covered the main points and the main segments. I think in the overall loan portfolio, the strongest growth has been in auto lending. And as José Rafael said, we have a very strong market position in that business. And we've started the year with a very good volume in that business and strength in that market. It is also a very profitable business, because of the spreads in that business. On the commercial side,…

I guess, within that do you feel like from a production standpoint kind of beat up the BBVA's side of the house, so it was kind of up to a run rate in terms of production or is there some lag there just some kind of the integration in the conversion period? José Rafael Fernández: I think in that there is some level of disruption, because of the integration. And there is a lot of effort and time spent working with integrations. So we feel that 2013 might not show the entire full potential of our production capabilities. Having said that though, they are showing good results vis-à-vis our budget and our targets for the 2013 year. So we clearly recognized that that this is a year where we need to kind of have a two-pronged approach, which is integration and running the business. And there is going to be a lot of more focus in the next three quarters on integration, because of the timeline that we have.

And then just one more. On the margin guidance, I mean you guys are saying 4.20% to 4.25%. I did resist to know kind of what size balance sheet you're assuming within that margin guidance. I guess is there anymore kind of balance sheet restructuring yet to come? And also, if kind of run rate this quarter's margin rate after backing out the deposit accretion, I guess something closer to kind of like the mid 4% range. So just curious kind of what the potential adjustment is as we go forward? José Rafael Fernández: I'll let Ganesh go into the details of that question.

Emlen, I know, as you see the balance sheet, the total assets or the whole balance sheet has dropped down to 8.7%, primarily because of the pay downs of repos and the subordinated notes using the cash. So the cash position has come down to similar extent. But, however, the earning assets are in level with the end of the last quarter. So I think that's one thing that basically this quarter we did not see a whole lot of drop in the earning assets. But for a few big loans that are coming to maturities, which we need to kind of further see on whether we can roll them over and keep them or let them go, because of other reasons. So I think what I am trying to say is the NIM normalized, if you want to use it, you can use an average of $7.5 million earning assets for the whole year. That's $1 billion for the whole year. And $420 million is what I said is a normalized NIM. When I say normalized, it does not include the purchase accounting fluctuations that accrete, because of the actual cash flow behavior. At this point in time, I don't know to predict those things, because the event haven't occurred yet. So I think that's our baseline guidance at this point in time and as we go further we can add some color to it through the quarters.

So based on your comments it sounds like it would be fair to say that just kind of a 25-ish basis point contribution from just purchase accounting from the BBVA deal this quarter?

Correct.

Your next question comes from the line of Robert Greene with Sterne, Agee & Leach. Robert Greene - Sterne, Agee & Leach: Just on the expense side, I thought the expenses came in pretty well in the quarter, at about $59 million run rate. And I was wondering if you kind of break that out just a little bit. Obviously, you've got the restructuring charge. I'm wondering what are the various puts and takes in terms of investment spend with the new platform versus potential cost savings and sort of what you think the timing of that might be?

As basically we have said that the $8 million throughout the year is the one-time savings that we're going to have for the integration expenses, that of course, does not include the $3.4 million for termination of BBVA contract that we talked about. The capital spend we explained last quarter about the whole $35 million total estimate and the capital spend, finally, we said that $18 million we might spend on integrating organizations technology, buildings and all of those kind of things, that would be amortized over X number of years, right. So this year, the amortization of such items would not have a much impact because we have not incurred them yet. And they would happen throughout the second quarter and the third quarter and fourth quarter, it might have a very minimal impact. So I don't see that to be a big factor. What you're seeing over here is that the $59 million run rate is not what we expect for the whole year because some of the marketing expenses and one-time expenses have not kicked in, so they would happen in the second quarter and third quarters. Robert Greene - Sterne, Agee & Leach: And then secondly, I wanted to revisit the margin question because obviously there is a lot of moving parts. And so just to clarify, is the 4.20% to 4.25% is that what you expect for the full year or is that sort of your normalized run rate?

It is the normalized run rate for the full year. And what I mean by that is if we take the portfolio from pre-acquisition and apply the purchase accounting mark that we did on day one, that's what we think that number would be, 4.20% to 4.25%. What happens because of the purchase accounting, because of the actual cash flow behaviors, then we have to do something and that's what gives us the bump over and above the 4.20%. Robert Greene - Sterne, Agee & Leach: So for that sort of I guess 25 basis points that you mentioned, do you have sort of the accretable yields. Obviously, there is the BBVA deal, but do you have that for, like I guess, the legacy Eurobank, what's flowing through on the accretive yield side?

The accretable yield for Eurobank is still on our books. You would see that on the Q, and still we have a $167 million and this was supposed to flow over the, let's say, eight to nine quarters.

The next question comes from the line of Brian Klock with Keefe, Bruyette & Woods. Brian Klock - Keefe, Bruyette & Woods: I guess, my question is really kind of following up I think you kind of hit some of the answers on the NIM that the other guys were asking. I guess, Ganesh, do you have what the accretable yield impact was on net interest income in the quarter from the BBVA, PCI book and the non-PCI book or do we need to wait for the Q for that?

I can clarify that a little in the Q, but the accretable yield that we have on the BBVA PR book is around $510 million and we expect this to flow in maximum of let's say three year, four years rather. So the $508 million actually you might have seen in the 10-K, Brian, we took the acquired book and we have two trenches in that one. One, which is the SOP, which is under the purchase accounting, another one is I recorded it under FASB 91. So the SOP $2.5 billion and the other portfolio is around $857 million or $860 million. So the SOP book is when we say accretable yield as you know it's related to the SOP book. So that $2.5 billion book is what I'm saying it has $508 million of accretable yield. José Rafael Fernández: That already discounts the first quarter.

That discounts in the first quarter and remaining is $508 million for another three years up to the end of the 2016. Brian Klock - Keefe, Bruyette & Woods: I guess, maybe thinking about on the asset quality side, maybe thinking about the provision acts that covered. So maybe if you guys can kind of talk about what you're seeing there and thinking about where would you think provisions would go and maybe talk about some of the flows in NPAs for the quarter?

In the earnings table we just show on the last page the originated and the new book. And you see that total delinquencies are staying flat. In terms of the acquired book, when I mentioned the BBVA PR is in line with the expectations, obviously, the SOP doesn't have the technical delinquency. But there is also a book the FASB 91 portfolio, it's primarily its auto portfolio and certain revolvers. The only thing that's not represented sort of you can get represented over here is that book. And auto portfolio as we always mention that the auto portfolio loss ratios are anywhere around 1.52% depending on the FICO scores and we have not seen any changes for a long time even with the historical data that we have prior to acquisition. Brian Klock - Keefe, Bruyette & Woods: And I guess just thinking about from a provision level on that again NPAs have come down. So it seems like your provision levels are probably slightly lower going forward. How should we think about the provisions on the non-covered?

Well, if you look at a dollar-to-dollar replacement on the portfolio, the $270 million that José Rafael was talking about mostly that the auto production was $35 million, right. Brian Klock - Keefe, Bruyette & Woods: $100 million?

$35 million a month and then $105 million a quarter, and I think that is a portfolio that we might provision a little bit higher than traditionally, because of the shorter duration and the FICO scores and things like that. So it would require a little bit more. So the newer production probably I'm saying that the provisioning percentage will be higher than what you saw in with our legacy Oriental production in the past. José Rafael Fernández: But Brian, I think when you ask about provisioning I think you'll see levels around what you're seeing in the first quarter, at least for the foreseeable future as we continue to feel and get more comparable with the performance of the new portfolio businesses that we have acquired. So if you're asking on in terms of your modeling, I think it will be good to maintain same the levels. And if we feel that there is a divergence on the positive side, we'll certainly adjust.

Your next question comes from the line of (Joe Gladue) (inaudible) analyst.

One, I was hoping you could give us a little color on what you're seeing in the mortgage and housing market in Puerto Rico, just what's going on in terms of absorption inventory and just sales levels? And also touch on if you see any opportunities for market share gains? José Rafael Fernández: Regarding residential mortgage, I would say that on the lower balance type of residences, we're seeing at pent up demand and there is price stability. And we feel encourage with that, because that's exactly our focus on our residential mortgage business. We originate average around $130,000 to $150,000 per loan. So as what we're seeing there and on the higher-end condos and higher properties, there is still excess supply. Some encouraging signs are starting to be seen as some of the other banks have been both selling residential loans that were construction projects. And they are selling at a significant discount and we're seeing or starting to see some movement on those portfolios by the new acquiree or acquirer just bringing down the prices. So there is still excess supply out there. I don't have the exact number as of this first quarter, but certainly is slowly moving the inventory as residential construction projects are being bulk sold and the corresponding purchasers are reducing the values or the prices on there properties. So that's what we're seeing. I think it still going to take a couple of more years for those higher-end residences projects to flow through and stabilize that market.

And just one another question, just I guess on the deposit rates, I'm just wondering if you're still seeing any opportunities for any further reductions in deposits rates that they reached bottom yet? José Rafael Fernández: I think our larger scale and our stronger leadership position in the banking market here in Puerto Rico gives us an opportunity to drive the cost of deposits down as you have seen in the results in the first quarter. I'd like to highlight that we have already in the first quarter announced some significant reduction in the cost of funds to our purchased BBVA retail clients that are now Oriental clients. So the good thing is that we announce that. And so far we have not seen any type of erosion from those reductions. And we will see additional benefit into the second quarter from those announcements of reduction in the cost of those deposits as we are implementing them now in the month of April, but so far so good. We are seeing that we have more leverage in terms of cost of deposits. We're acting on it in the first quarter. Results should be seen in the second quarter. And we're looking forward to see how things move. We do have excess deposits as Ganesh mentioned earlier. So we are in a very good position to continue to help bring down cost of deposit in Puerto Rico. Having said that though, there are a still a couple of players who continue to be rational on the retail deposit side and on the CD market and that is part of the reality we need to deal with here in Puerto Rico.

Your next question comes from the line of Emlen Harmon with Jefferies.

I had a quick follow-up, actually two quick follow-ups for you. You have clearly maintained your GAAP, EPS guidance around $1.40. Putting up a GAAP number a couple of cents in excess of that run rate in the quarter, do you feel like that estimate is more of a kind of conservative estimate relative to where you were a quarter ago?

Emlen, I'd like to say that guidance is not aggressive and it's not conservative, it's realistic. And you need to realize that we as managers want to make sure that we get a good grip on all the integration efforts on the acquired operations and we want to over deliver and that's kind of the objective here. So we feel comfortable with the guidance of $1.40. And we are working hard to surpass those results, but I'd like to say it again that I think those are very good and realistic numbers for this first year.

And just lastly with the rating agencies downgrading Puerto Rican sovereign debt this quarter, and I think a couple of sovereign negative outlook. Are there any operational complication, should Puerto Rican debt be downgraded another notch. And I think if memory serves from the K you did guys hold some municipal debt on there. So just kind of curious how that may affect you guys operationally? José Rafael Fernández: Let me just answer a couple of things here, first, I think the government is doing what they need to do fiscally to prevent that from happening. And what we're seeing in the first quarter is that they have, as I mentioned, acted on the pension reform and they got it passed, and they follow through on the sale of the airport and reduced around $600 million in debt from the Puerto authority. I think there are still some challenges going forward. And the jury is still out there but I think the agencies are feeling somewhat more comfortable with the progress that the current administration is having regarding that. Now, into your other question regarding how Oriental will be affected? Yes, we do have some Puerto Rico government loans. Those are loans that will not be affected by the downgrading in terms of operations. These are loans that shorter term and/or are municipal loans that are packed by property taxes that are very much securing our loans. So we feel comfortable with that. Having said that, I would like to add that downgrade will not be positive for the Puerto Rico economy and Puerto Rico in general. So we feel okay with all the credit risk that we have discussed in this call and particularly with the municipal and government loans that we have. We have dedicated quite a bit of time to that. And we feel very comfortable with the exposure there as we have a good coverage from a cash flow prospective and the different entities that we're lending to.

And that was our final question. Now, I'd like to turn the floor back over to José Rafael for any closing comment. José Rafael Fernández: Thank you, Operator. Before we close we wanted to thank our customers who are placing their trust on our ability to serve them. It's been a wonderful beginning for our new journey here at OFG Bank Corp and our customers have been very loyal. And we're very happy to receive the large amount of new commercial and retail clients that we are in the process of getting to know. Also, I'd like to thank our employees. This is a hard work and our employees are the key to this success, not only for an integration perspective, but also from a business perspective. We're doing two things at the same time and we're doing them both well. So I want to thank them also. And lastly, I'd like to thank our investors for their support. I'm very honored to receive the support from the investors to Oriental as we embark on this wonderful journey to become the leading bank in Puerto Rico. So with that I look forward to talking to you in July, when we hold our second quarter 2013 call. I really appreciate the time spent on this call and we'll be looking forward for the second quarter results. Have a great day and a great weekend. Thank you.

Thank you. This concludes today's conference call. You may now disconnect.