José Rafael Fernández: I’ll take the last part first. We did not double much on the 3%, 3.5%, 4% type of commercial real estate loans. We don’t have that type of yield on our CRE book. So it’s not something that we have to contend with. And then in general, we have a very diversified, well diversified CRE book. Most of the — I would say, the diversification comes from several industries. One is hospitality, hotels, another one is retail space and shopping centers. And then we have around $90 million in office space. This is non-owner occupied and these are 40%, 45% loan to value. We have 90 some percent occupancy. We have good coverage. We’re not seeing any stress on the commercial real estate in our book and for that matter in the Puerto Rico market. So it’s a different story here in Puerto Rico versus what you’re seeing in the States from what I can gather.
Alex Twerdahl: Thank you very much for taking all my questions.
José Rafael Fernández: Yeah. Sorry for the intermittency. I know Brett also brought it up.
Alex Twerdahl: Yeah. I’m sure there’s nothing you can do about it, so no worries.
Operator: [Operator Instructions] We’ll go next to Kelly Motta with KBW.
Kelly Motta: Hey, good morning. Thanks for the question.
José Rafael Fernández: Hi, Kelly.
Kelly Motta: The tax rate was lowered this quarter, and I know you had a discrete benefit in there, but it also, as you mentioned, was related to the mix of tax advantage activities that you partook in or business mix. So just wondering how we should be thinking about the overall tax rate as we look ahead if prior year is still a good run rate or if given a shift in mix, it might be a bit lower?
Maritza Arizmendi: Well, hi, Kelly. Thanks for the question. And as I shared in my prepared remarks, we are now expecting 29% effective tax rate for the full year. So that’s a decrease from what we saw last year. So, yeah, we see a lower tax rate for the full year at 29%.
Kelly Motta: All right. I appreciate the color. And I believe that your prepared remarks, too, you discussed you expect kind of loan growth continuing from here throughout the year. Previously you had said about 3% to 4% growth, assuming the economy grows 2% to 2.5%. Just wondering, where you see the drivers of growth ahead? And if there’s any kind of shift in the outlook as to what growth you can sustain? Yeah.
José Rafael Fernández: Yes. No shift in the outlook. We’re seeing the 3% to 4% growth for the year. And we are seeing mostly from the commercial business. We see opportunities there and we have a pretty good pipeline there. And we’re also seeing as you saw this quarter we’re seeing some growth in the consumer and auto, we’re expecting commercial to have a higher contribution to the origination than in the first quarter.
Kelly Motta : Got it. That’s really helpful. I guess, final question for me. I mean, it seems like the margin outlook is somewhat better than what we had been expecting before with growth from here. As we look ahead, I know you had said the efficiency ratio low to mid-50s. It seems net-net given your expense outlook hasn’t changed that we may be in the lower part of that range versus the higher end. Just wondering kind of how you’re thinking about as we look ahead kind of where we could fall out and how you’re managing what could get us to the higher or lower end of that range? Thanks.
Maritza Arizmendi : Yes. Well, I think, I understand very well your question. At the end we haven’t expected better NIM. But when we think about expenses, we think also about timing and when the investments are going to be deployed. And I think we will continue to be in that range and probably most of the time would be in the lower of that range. But in other instances [Technical Difficulty] the high end of that rate. So, I think, we continue to see the expenses as I mentioned $90 million to $92 million, we need to continue investing in our strategy. And I think that’s the range, I don’t see anyway, of course, being lower than that.
Kelly Motta : Got it. That’s helpful. Maybe one last for me, and then I’ll step back. Most of my questions have been asked and answered at this point. Just wondering if there’s any rule of thumb as to, I know you had said you’re still asset sensitive a bit how each kind of rate cuts impacts margin at least on the near term. Do you have any kind of heuristic on that?
José Rafael Fernández: We update that on the 10-Q, and you’ll see it when we file the 10-Q. But as you will see, we have been gradually being opportunistic investing longer on the duration side of the investment portfolio, locking in rates at a higher level. And that has helped us reducing our asset sensitivity, but we’re still asset sensitive. And you’ll get the details in the 10-Q when we file it because I think that’s kind of the timing that we shared out with the market.
Kelly Motta: Fair enough. Thank you so much. I will step back.
A – José Rafael Fernández: Yes. Thank you.
Operator: [Operator Instructions] We’ll return to Alex Twerdahl with Piper Sandler.
Alex Twerdahl: Hi. Just one follow-up on the NIM. Just when you think about the large government deposit that I think you mentioned is going to flow out or a good chunk of it’s going to flow out in the end of the second early third quarter. Does that get funded with sales and securities portfolio? Or does it get replaced with borrowings? How are you thinking about managing that outflow?
