I will now turn the call over to Mr. Richard Carrion.Richard Carrion Good morning, and thank you for joining the call. Please turn to the second slide. For the third quarter, we reported net income of $27.5 million in our third consecutive profitable quarter compared with net income of $110.7 million in the second quarter. About one-third of the link quarter profit decline was due to the provision expense with most of the remainder due to a onetime $60 million tax benefit in the previous quarter. Our revenue generating capacity has remained strong throughout this credit cycle and the net interest margin has been above 4% for the last four quarters. Gross revenues for the quarter amounted to $492 million including $369.3 million in net interest income and $122.4 million in non-interest income. Revenues were partially offset in the third quarter by a higher provision expense that was driven by a rise in Puerto Rico commercial non-performers, which led us to provision roughly 111% of our non-covered charge-offs. As we have previously reiterated credit cards in Puerto Rico have continued higher than we expected at this point and we have provision accordingly. So let me address the credit issue before Jorge discusses the quarterly figures in more detail. The credit risk in our non-covered Puerto Rico commercial portfolio is greatly diversified across business sectors with no significant borrower concentration and has the low average loan size. No one business sector represents more than 10% of the loan portfolio balance. The commercial book on the island is comprised mainly of loans to small and middle sized businesses with an average loan size of 476,000. As we disclosed last month we completed the sale of $358 million of unpaid principal balance in construction and CRE loans at a price of 45% of the UPBS of March 31 st which was in line with previous indications. We ended up recognizing a net benefit of $5 million on the sale. We believe that the remaining $259 million in book balance of our held-for-sale portfolio is properly marked and continue to pursue opportunities to sell. Smaller deals maybe the most efficient way to move forward. In addition to the third quarter loan sale we have also been able to close several individual deals and negotiated payrolls with borrowers in transactions price between 50% to 70% net of the unpaid principal balance.
Now, in addition to credit management we need to do more to help recover the earnings power of our franchise. That is why we have launched an action plan to reduce expenses which mainly consist of an employee retirement window and further efficiencies in our Puerto Rico retail network.On the earnings front, we continue to find opportunities to add good assets. This quarter we added $130 million in credit card receivables that we purchased from Citibank in a deal that closed in August. This follows the purchase of $518 million in high quality mortgages executed in two transactions during the first two quarters. All these transactions are immediately accretive and a credit card transaction adds a high performing portfolio of good clients to our Puerto Rico credit card business which in this quarter generated $51 million in gross revenues. Loan demand is soft but some sectors are showing signs of strength particularly the corporate sector. This quarter we closed two large loans that in addition to the credit card receivables helped maintain the volume in the Puerto Rico log book. We’re confident that we have the buildings blocks to generate profitability growth as the economy improves. Please turn to the next slide. We’ll talk about the Puerto Rico economy. Here the key point is that while recent signals have been mixed the economy appears to be leveling off. Retail sales are slowly recovering behind the push in auto sales which are up 10% during the first eight months of the year versus last year. Read the rest of this transcript for free on seekingalpha.com