The local banking industry maintained a positive trajectory in the first quarter of 2017, registering a Pre-Tax ROE of 8.6% on an annualized basis, despite ongoing severe economic and fiscal hardships being faced by Puerto Rico. Economic growth forecasts pointing to continued contraction, uncertainties regarding the impact of imminent austerity measures, and tepid loan demand, among other downside risks, will likely continue to temper the performance of banks. Banks are advised to continue cost optimizing their operations, exploiting opportunities to enhance customer and shareholder value by leveraging emerging technologies, and strengthening their digital competencies to achieve greater productivity. The strong capital levels of banks, with the Tier 1 Risk Based Capital Ratio reaching 20.5% in YTD 2017, provide a robust capital cushion in the event that adverse risks materialize. The delinquency ratios have continued to decrease, with the 90+ days past due non accruing ratio reaching 6.3% in YTD 2017. In this issue we examined the historical and possible future trends of total loan originations and total loan portfolios, and their implications for banks.