First BanCorp. New

Good morning and welcome to the first Bancorp second quarter 2020 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to John Pelling, Investor Relations and Capital Planning Officer. Please go ahead.

Thank you, Andrew. Good morning, everyone, and thank you for joining First Bank Corp's conference call and webcast to discuss the company's financial results for the second quarter of 2020. Joining you today from First Bank Corp are Aurelio Alleman, President and Chief Executive Officer, and Orlando Berthoud, 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 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, onefirstbank.com. At this time, I'd like to turn the call over to our CEO, William Solomon.

William. Thank you, John, and good morning, everyone. This time, before going into the details of the quarter, I would like to discuss what we consider a more pressing matter at hand. Early this morning, under a separate press release, we disclosed an exciting piece of news. Yesterday, we did receive regulatory approval for moving ahead with our strategy transaction with Santander. We're very pleased of achieving this step. We do expect to meet all closing conditions and close the deal by September 1st. As we shared before, this is a transformational transaction for our company. And while there have been many moving parts since anomalies in October, we actually expect that the resulting deal metrics meaning TBB dilution, EPS accretion, and earn back, we'd be in line with those that we reported in October as compared to our standalone projections. Please keep in mind the deal excludes, just to remember some of the metrics that we shared at that point in time, the deal excludes MPAs. The premium is calculated based on the size of the balance sheet at closing. In addition to what we disclosed under the agreement in October, We expect that Santander will deliver to us an additional $28 million on loan loss reserves to account for loans that are subject to COVID-related moratoriums. We also have to consider that over the past few quarters, we have incurred expenses associated with the transaction of about $15 million already, which have impacted our bottom line and tangible book value already. Also, obviously, that will reduce the remaining cost going forward. And I think it's important to consider that given the timing, most of the savings of the transaction and the synergies will occur in 2021. We do expect to complete the full integration by the end of the second quarter of 2021. I think it's important to mention that a disclosure, when we disclose the transaction in October, We did not mention the DTA, but this transaction should have a potential benefit to our DTA. We can expand that later in the Q&A. And I just want to comment, you know, obviously we've been operating under this new COVID environment, and we have learned a great deal from an operational standpoint as we move through to the pandemic. And now, you know, as a larger institution with greater scale, We will definitely look to identify larger synergies and additional opportunities for growth in this consolidation. We're greatly appreciative and welcome both the employees and the expanded client base, and we will work hard to continue enhancing our products, services, and channels to meet or exceed their expectations. So we're very pleased of achieving this step. Please let's now move to slide five of the presentation so we can cover the highlights of the quarter. Definitely the landscape has changed. I would call the operating landscape of the industry. And from the operational standpoint, I must say that we're being extremely proud of our team and the dedicated frontline employees, and also to our customers for their ability to adapt in this challenging operating landscape. Priority number one, it's been the safety of our employees and customers while we provide the services. As of today, still more than 80% of the support staff is working remotely. And in the facilities, we continue to execute strict safety protocols, including contract tracing and preventive testing of COVID. Since the beginning of the pandemic, we've been committed to maximize the benefit of the CARES Act to support our customers. This includes the deferrals. includes the programs such as PPP, and we've also been involved in some other programs such as the FHLB of New York grants and the USDA support to rural communities. We understand that, obviously, those are key benefits to mitigate the challenging times that our customers are, we all experience it. It's really good experience that we and the trend that we continue to see on the Genital channels. They continue to enhance the customer experience and as mobile and online technology tools have definitely facilitated customer interaction remotely. And as you can see in the right side of this slide, definitely transactions have shifted from branches to our alternative digital channels, and we're very pleased to see those trends finally taking place in our market. Please let's move now to slide six to talk a little bit about the quarter. Before that, actually, reopening trends are important. When we talk about the quarter, the drivers are what's happening after the closure, what's happening with the reopening. Early indicators actually look good, But we continue to track these metrics within our customer base across different industries. The information included here pertains to our customer base, and we are tracking on a biweekly basis how the different sectors are moving. Obviously, you know, we're also conscious of the potential impact of additional tightening to the reopening efforts due to the spikes in cases recently. We have to say that the hospitality sector, hotel, restaurants, is definitely the most impacted so far, and the recovery will depend on the reopening in speed. As an example, we're looking into weekly activity of merchants and point-of-sale activity. We experienced significant increase during the last week of June compared to the last week of March. Obviously, retail is open. to the public and spend, it's been actually significantly up. Obviously, the second quarter results for us were hampered by the lockdown. Remember that in Puerto Rico, we were not able to reinate auto loans or mortgages up until May, and basically half of the quarter showed limited origination activity on the consumer side. Residential activity pick up in June. Worth mentioning that Florida did remain open, the Florida market, and we continue originating normal levels of mortgage, actually better than normal. But obviously quarterly originations in consumer driven auto and the residential portfolio, as you can see in the graph, show obviously the positive impact of fuel. The moratoriums, on the other hand, and federal programs have increased customer liquidity materially. When we look at growth, we experienced an outstanding $1.2 billion increase in core deposits, 13.5%, and this includes government deposits. I think it's important to keep in mind that the estimated stimulus for Puerto Rico market is about $14 billion so far, and this is very material. as a percent of the GDP has created this significant liquidity in the market. This should definitely help offset some of the risks that are present over the next couple of quarters. We compare this to the liquidity that we experienced during the last hurricanes and driven by the support and stimulus provided then. So please move to slide seven for a moment. Orlando will expand on this detail, but the quarter ended up with $21 million in net income, or $0.09 per share. As expected, we experienced some deterioration in the economic forecast, and that required an additional reserve bill. This quarter was $29 million, which impacted our bottom line. Pre-tax preparation revenue continues strong, $67 million considered in the right environment and the impact to the NIM. Definitely, I have to say, you know, we do have a fortress balance sheet, extremely well capitalized, total risk-based capital ratio of over 25%, and now the reserve to loans is at 3.555%, which both of these are among the highest of the industry, of the sector. And APAs continue to move down, now below 2.2% of assets. Again, we remain committed to servicing our clients under this, you know, new operational challenge of COVID. We're committed to the safety of our employees and the customers as a priority. And obviously, while we face, you know, we still face uncertainty regarding the future part of the economy, our fortress balance sheet and battle-tested management team will allow us to navigate this pandemic through the end. So with that, I'm going to leave you with Orlando to cover the details of the quarter and be available for the Q&A.

Good morning, everyone. Aurelio mentioned we posted a net income of $21.3 million for the quarter for $0.09 a chair. That compares to $2.3 million, $0.01 a chair in the first quarter of 2020. This quarter, we had what we define in our press release as a few special items. in both income and expense components. They were tied to the pandemic, tied to the Santander construction. We even had an insurance recovery in the quarter that resulted in an income. And I will touch upon those in the next few slides. But if we were to adjust the balance sheet for these items on a non-GAAP basis, our net income for the quarter would have been 22 million or 10 cents a share. which compares to a net loss of $5.9 million, adjusted net loss of $5.9 million in the first quarter, which was $0.03 a share. As we had anticipated, net interest income declined in the second quarter to $135 million, lowered by $3.4 million from first quarter. And obviously, the net interest income was impacted by the significant reduction in interest rates. and the reduced level of loan originations that resulted from the pandemic. And the lockdown, as I already explained, we were not originating for half the quarter, half of the quarter. Also, we did have a large increase in deposits, which has translated into increased levels of cash and money market, which this interest rate scenario, in this interest rate scenario, it's significantly lower yields. Interest income by itself in the quarter declined 3.3 million in cash and investment securities, and an additional 3.3 million in loans, even though we did have an increase in the average balances related to the PPP loans, but those are lower yielding loans. On the other hand, although the average balances of interest-bearing deposits grew almost 400 million for the quarter, interest expense declined 3.2 million, basically reflecting the 22 basis points reduction in the average cost of interest-bearing liabilities. Right now, the overall cost of deposits is about 61 basis points, which reflects the reduction in rates and the increase in deposits. It's down from about 77 basis points in the first quarter. The margin for the quarter was 422 compared to 463 last quarter. Trying to break it down in components, the impact includes about four basis points reduction related to the PPP loans, about seven basis points reduction for the repricing of the cash balances, and another 11 basis points for the higher proportion of cash balance to interest earning assets, obviously change the mix of the earning assets. Downward repricing of loans, of commercial loans and credit cards was around nine basis points. And we did have some impact of our four basis points for accelerated premium amortizations, which resulted from the prepayments of the investment securities. As you remember, we had sold some securities last quarter in anticipation of that, and prepayments were even higher than we had assumed. The other component was around four basis points decrease related to late fees as we had a higher proportion of the portfolio under payment deferral programs. Non-interest income for the quarter was 20.9 million compared to 30 million, but also these two quarters had some special items. In the first quarter, remember, we realized an 8.2 million gain on the sales of approximately 275 million of available for sale securities. This quarter, we had a five million benefit from the final settlement of the business interruption insurance claims that we had related to hurricanes Irma and Maria back in 2017. Excluding these items, non-interest income still declined about six million in the quarter. Three million of this increase relates to the seasonal contingent insurance commission that we received in the first quarter. It happens the first quarter of every year. But we also saw decreases in service charges on deposits and transactional fee income, all primarily related to the lower volume of transactions resulting from the reduced business activity as a result of the COVID impact and the lockdown. On the expense side, expenses decreased 2.4 million for the quarter, from 92.2 million to 89.8 million. These expenses did include also some of the special items I mentioned. There are 2.9 million in merger-related expenses, what's called merger-related expenses, all associated with all the legal and integration efforts associated with the Santander transaction. Last quarter we had about 800,000 of those. We also had this quarter about three million in COVID-related expenses. And when I mean COVID-related expenses, that includes items such as cleaning costs, employee testing, protective material we have put in the branches or provided to our employees. Additional security has been put on the branches to control traffic, both food and car traffic, Some special compensation, we did provide about $1.7 million in special compensations to our customer-facing employees and support employees that were there for the whole process, as well as expenses that we had incurred in customer communications to keep them abreast of what we're doing on the different branches and the programs. Also, remember that in the first quarter we did have about a one and a half million insurance recovery against expenses. If we were to exclude these items, the expenses decrease 8.2 million. Basically, reduction is associated with lower business volumes, as well as the expense control measures that we have implemented. So far, we've basically stopped all hiring of vacant positions. We have modified business promotion strategies and reviewed some of them. We have eliminated traveling. We have reassessed project plans, you name it. We've gone through all the different components, which have resulted in some of these reductions. They're basically explaining in more detail on the press release, but you can see some of the components, but there is a lot part of it which is volume related in terms of expenses. As volumes normalize, some of these expenses will grow. Obviously, an expense level, the expense levels estimated for going forward, it's a little bit more challenging, but still assuming that excluding any COVID related expenses and some of their expenses, we should be in that 88 to 90 million range in the next quarters without any transaction costs and integration costs, which would be part of the expenses that we'll see. In terms of reserves, the provision for the quarter was 39 million, which, as Aurelio mentioned, resulted in a 29 million increase in the allowance for credit losses. Total allowance for credit losses is 337 million now, as of June 30th, of which 319 million relates to loans. We look at, since the adoption of CECL, allowance credit losses on loans have grown 164 million dollars, from 155 million we had in December to the 319 million we have now. And the allowance represents 3.55% of loans, excluding the PPP loans, which is over two times the 1.72% of loans we had as of December. We believe this is allowance provides very ample coverage against possible losses, and obviously positions us well for what is the expectation of the economy. Like to mention that in addition to the 319 million allowance on the loan, we do have about seven million additional allowance related to unfunded commitments on some of the lending facilities that we have. Moving on to some of the other components, moratoriums are an important component. We had mentioned during the first quarter discussion We have implemented payment moratoriums programs to support customers during these initial stages of this pandemic. At the end of June, as of June 30, we had 36% of the portfolio on the moratoriums. A lot of them were moratoriums extended for that three months timeframe. And during July, many of these borrowers have started to make their scheduled payments and the moratorium as of the 24th of July have been reduced to approximately 18% of the portfolios, and that includes reductions on all the components, as you can see in the chart. It's important to mention that the government of Puerto Rico has passed legislation requiring banks to extend moratoriums through the end of August to residential mortgage borrowers that so desire. Borrowers had to be current to qualify as of the beginning of the pandemic. That would keep moratoriums on the residential for a little bit longer timeframe. We have continued to work with borrowers and have been performing detailed reviews of all commercial borrowers in the different industries. Clearly, the hospitality industry is still facing the largest challenge, but some of the other industries have started to normalize. Charge-up levels for the quarter were lower. Obviously, as we have some deferral programs, migrations tend to go down. That is part of what you will see on the nonperforming side. Inflows to nonperforming were $10 million in the quarter, which is $20 million lower than last quarter. a big part related to these deferrals that the other customers kept making their payments, overall non-performing decreased by 14 million to 303 million as of June 30th, compared to 317 million as of March 31st. We continue to monitor the portfolios, continue to spend time understanding customers' behaviors, As Aurelio mentioned, a number of customers are already open and operating, so we feel we're in good track to continue to execute. With that, I would like to open the call for questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. The first question comes from Ibrahim Poonawalla of Bank of America. Please go ahead.

Good morning, guys. This is Chris Cardone for Ibrahim. Congrats on getting the regulatory approval. I just want to know, Are there any performing loans that you were planning to acquire initially but are no longer acquiring given the COVID stress?

The agreement, you mean from the Santander transaction, the agreement calls for acquiring all loans that are performing at closing. If there is any non-performing loans, that meets all the definition of non-performing has to be classified as such and Santander will keep. So if any loan has been affected to reach that point to be considered non-performing, it has to be classified as such and will not be part of the contraction. If it's just related to some payment deferrals that have been given in the market under normal terms and all of that, not necessarily, it's a function of of that payment capacity of the customer.

But, you know, the answer is anything that migrated to NPL since October to closing is not part of the transaction.

Got it. That's helpful. And just a quick follow-up. I appreciate your prepared remarks, but if you could just give us an update on the pro forma capital outlook. just in terms of the tangible book value dilution that you expect and where you expect the TCE ratio to win. That would be great. Thanks, guys.

You mean with the transaction? Yep. The ratios, as you know, we had anticipated the ratios, the tier one ratios to be above 15% on the transaction. Those numbers still hold. If you look at the balance sheet, we are a bit larger, mostly because of the large increase in deposits and a lot of cash and investment securities. So the risk weighting of that is zero or 20%, depending on the component. Santander balance sheet has remained fairly consistent to what we had before. I anticipate a slightly lower leverage only because of the higher average balances that we have on that cash, but not other than that, still all the ratios being well above, well capitalized. The leverage ratios will be, we had anticipated around 11% originally, maybe it's slightly lower, but still above 10% at closing. So it's fairly consistent with what we had disclosed before, including tangible book value dilution, similar to what we had disclosed before. We haven't seen any changes. Obviously, all based on as compared to our standalone, there have been some reviews of our standalone estimates. But the transaction will continue to add as we had expected.

Thanks for taking my questions.

Next question comes from Alex turtle of Piper Sandler. Please go ahead.

Hey, good morning, guys. Good morning. So just want to elaborate or I guess dig in a little bit more to that last comment about the tangible book value dilution being consistent with the announcement. So I think if I recall, at the announcement is that 7% tangible book value dilution from the transaction and then another somewhere between 1.5% and 2% dilution from the CECL impact of the acquired loans. Would it be fair? And then you also kind of alluded to a GTA and kind of, you know, I think you'll expand a little bit more upon that, upon me asking. But, you know, as you kind of put all that together and then look at tangible book value at 630 of $9.83, right? Is the right way to think about pro forma tangible book value just kind of knocking somewhere between 8.5% and 9% off of that the way we would have upon the announcement? Or is there something else we should be factoring in as well?

We believe it's going to be more in the 7% to 7.5% combined with CECL based on some of the changes on the balance sheet and some of the other components that we've seen. But not, you know, it's just a bit lower considering CECL, but not too different. And similar earn back to what we had before. The DTA component that you made reference to, we did not include that in any of the analysis. And it's something that clearly Santander adds to our bottom line, some revenue streams. that would allow us to utilize DTAs. We'll work exactly on the exact amount. We haven't finished the full analysis of the amount, but clearly it's gonna add some to the bottom line. I don't think it's gonna realize the whole DTA evaluation allowance that we have, but would allow us to realize part of it. And that's gonna help also in compensating for any delusion.

And can you remind us what that valuation allowance was at the end of 630, the total one?

The valuation allowance, I'm talking on the bank, it's about 40, from the top of my head, I'll give you the exact number. I think it's 47 million, Alex. Just on the bank, remember that there is a valuation allowance on the holding company that it's a bit different because of the individual... legal entity taxing component of the Puerto Rico laws. 50 million with the devaluation allowance on the bank as of June 30th, Alex.

50. So some portion of the 50 million will likely come back in when the deal closes or I guess subsequent to the deal closing. Yes. Okay. And then just, you know, last question for me is just as I think about the margin going forward, And if you back out the PPP impact of four basis points, the four basis points of accelerated prepayments, amortization, you know, and then I guess four basis points from the lower late fees, is that kind of the right starting point for the margin going into the third quarter? And then as you kind of look out and, you know, the opportunities you have on deposits and the pricing pressures on loans, like how should we be – thinking about the NIM trajectory over the next couple quarters?

Well, the PPP will be there for the, our estimation is that they will be there for the next couple of quarters, or a large part of it, because we feel that a large chunk of the loans will stay for the six month time frame. So in this quarter, next quarter, I think that that impact will still be there. To be honest, I was expecting prepayments. It was a bit higher, so that's a little bit difficult to estimate on the investment side. In terms of repricing of loans, it's a function of the curve. The estimation of the curve at this point, it's more stability, a little bit going down, not a lot. So I would say that it all depends on the curve, so it might not affect too much going forward. The one thing we've seen is deposits grow, and the thing is that reinvestment, it's based on the same low market. So to some extent, the ability of the market to reopen and be able to go back to originations Like Aurelio mentioned, the trends are better in June and July in some of the consumer portfolios. Think about a one and a half, one to one and a half investment alternative in the market as compared to seven or 8% on a consumer loan makes a big difference. Assuming normal trends, deposits continue to be healthy. So that makes changes. I don't know if we should, we shouldn't be going down, to be honest, but that mix of assets could change that a little bit. You're right, the late fees, you know, it's something that, it's a function to some extent of moratoriums. Is it gonna go down completely? The impact, I don't know, but part of it should go down. As well as I'm assuming that the prepayments at this point on investments should be lower. So that should be a smaller impact going forward than what we had in the quarter.

Okay. And then just as a follow-up, when you layer on the Santander balance sheet, initially it was supposed to be NIM dilutive, but given what's happened to the NIM already, do you still expect NIM dilution or is it going to be relatively neutral to the margin?

Sometimes their balance sheet should be a bit name-deluded. They still have a significant amount of securities in their portfolio, even though the transaction is a cash transaction, so some of it is going to be gone, but that affects income also. So it should still be a bit deluded as we had anticipated before, only because of the mix.

Thank you for taking my questions.

Just to clarify, the yields on their Loans are very similar to our yields. They have more commercial and mortgages. They don't have as much in consumer as you probably have seen on their balance sheet. So that by itself, it's a lower yield. Their cost of funds, it's good. So that helps. But they do have large amounts of cash and investment securities there.

Thank you for taking my questions.

Thanks, Alex. Again, if you have a question, please press star, then 1. The next question comes from Glenn Manna of KBW. Please go ahead.

Hi, good morning.

Morning, Glenn. Morning, Glenn.

Congratulations on getting the approvals for the deal. I'm sure, you know, given the current environment, that it was no small feat to get it done. But... Just to dive into the NIM just a little bit farther on yields on the commercial book, given the Fed move and how fast they move, could you provide some kind of a percentage that you think commercial loans, the variable portion, are pricing in where current rates are given moves in one-month and three-month LIBOR and PRIME?

So we did provide some information on the release. Let me give you exact so that I don't misquote. About 70% of our portfolio, let me get the exact numbers for you, hold on. You know, when you have information and you don't find it. The commercial portfolios are about two-thirds of the commercial portfolios are either based on prime or based on LIBOR. Most on LIBOR, it's about a third on prime, and the other two-thirds of that, 66% of the portfolio, it's LIBOR-based. We do have floors on many loans, so some of the portfolio won't suffer from future changes on rates because of the floors are there, but there are still some that don't have floors, and if rates were to go down, especially the three-month LIBOR, it would affect the bid. At this point, the expectation is that prime will be sort of at this level for a little bit of time, and the changes to the three-month LIBOR, not expecting to be large, so I don't expect that to be a significant impact. Obviously, if things get worse and we move to the old subject of negative rates, that could have some impact on some of these loans that don't have floors. But again, about two-thirds of the portfolio is floating and it will move with either one of these items.

Okay, thank you. And maybe given the addition of Santander, can you discuss or just remind us of some of the opportunities that you have on the funding side of the balance sheet after the deal closes?

I mean, at this point, the funding, meaning we have changed a lot of funding components. Deposits have grown. We have been able to eliminate a lot of the wholesale funding. It's significantly down. Broker cities are significantly down. We still use some broker cities in our Florida market, which has a different funding profile at this point. It has remained an expensive deposit market. So we tend to use Puerto Rico funding or wholesale funding to fund that market. At Santander, we'll just add to that. I believe at the end it's a function of what makes sense in terms of portfolios and being able to mix correctly. They don't have wholesale funding. It's almost nothing what they had on the balance sheet the last time I looked. Obviously, we want to keep all those deposits, so it's not going to change. We don't want to take away their deposits. They're not expensive deposits. They're normal market deposits. We want to keep all those customers. That's only going to add to that deposit mix that we have to help fund the assets. The Santander part, it's not going to change much what we have been doing so far within our own balance sheet. It's just going to add to that diversity of customers.

Okay, thank you. And on the payment deferrals, and just kind of last question, you know, the slide shows a 36% – a drop from 36% of the portfolio down to 18% here in July. And you had mentioned some of the government mandates with respect to – resume mortgages, but still that shows a pretty big drop in what's on deferral. Could you talk about customer behavior and maybe some of the people that are on deferral that are still paying and kind of how they're responding to it?

Behavior has been really, really good. These decrease I mentioned significantly has been on customers that have already started payment. The payment patterns in July The overall payment patterns, we've been tracking that, you know, weekly to compare to prior to the pandemic implications. And it's been really, really consistent with that. So far, it's been really good. I think that it's, you know, keep in mind that deposits in the market have grown significantly. You know, just ourselves, we grew, what, 1.2 billion in deposits during government. And that means liquidity also. So that helps in that component. There are customers that we've had a number of customers that originally we were anticipating that we could need on the commercial side extensions from the three months, maybe up to six months. And many of them have come back and said, no, we don't need any more extension. I think still the challenge is going to be with the hospitality industry, and we have to continue to work with those and some retail side could be affected. What happens with the lockdown and whether we have to revert back to some of it could change a bit, but as of now, the payment trends have been really good during the month of July, so it makes us comfortable with what's going on with these customers.

Okay, thank you for taking my questions. Thanks, Tom.

This concludes our question and answer session and the first Bancorp conference call. Thank you for attending today's presentation.

All right, thanks. I wanted to sneak one more in here. With respect to sort of pro forma capital, I don't want to put the cart too far ahead of the horse here with the deal not even closed yet, but with a pro forma tangible book value of 910-ish, that's trading at 65% of tangible book value and 15-ish percent common equity tier one, how should we be thinking about the timeframe for additional capital return with respect to things like buybacks once the the deal actually is closed.

You know, I think, Alex, you know, we, you know, this question had a different answer three months ago, but, you know, with the pandemic, I think, you know, it's not really prudent to, you know, we need to rethink the capital plan differently if things go well and the pandemic gets resolved and the recovery is as expected in the most recent trends, you know, obviously something should happen next year regarding next capital actions. But I think it's going to be driven by how we see the pandemic, how we see the additional provisions, if any, or not. It's the most prudent thing to do, obviously. It is there. Hopefully, that will be the next step as the economy continues to improve. That's our main goal, to move ahead, complete this one, and then be able to move to our next capital action. Perfect. Thanks for taking my follow-up.

Thank you.

Thanks, Alex.

Okay, and this concludes the question and answer session and the first main conference call. Thank you for attending today's presentation. You may now disconnect.