First BanCorp. (the “Corporation” or “First BanCorp.”) (NYSE:
FBP), the bank holding company for FirstBank Puerto Rico
(“FirstBank” or “the Bank”), today reported a net income of $73.7
million, or $0.45 per diluted share, for the third quarter of 2024,
compared to $75.8 million, or $0.46 per diluted share, for the
second quarter of 2024, and $82.0 million, or $0.46 per diluted
share, for the third quarter of 2023.
Aurelio Alemán, President and Chief
Executive Officer of First BanCorp, commented: “Our third
quarter results reflect our commitment to deliver consistent
performance and our ability to generate organic capital on the back
of a stable environment in our main market. We posted a strong
return on assets of 1.55%, maintained positive credit performance
and stable deposit trends, and made good progress on our capital
deployment strategy.
The economy remains on solid footing
driven by positive labor market trends and increased business
activity. This environment continues to support credit demand and
has enabled our strongest quarter of commercial loan originations
this year. Our loan portfolio grew by $63 million despite higher
levels of unexpected commercial prepayments that amounted to
approximately $122 million in the third quarter. Our teams remain
focused on expanding existing relationships, building loan
pipelines, and adopting new platforms to enable future growth as we
close out 2024 and enter 2025.
Net interest income and the margin
continued to expand after reaching a trough in the first quarter.
We continue to expect that our bond book repricing opportunities
will allow for some net interest income expansion in 2025. Finally,
consistent with our guidance, we deployed over 100% of our
quarterly earnings for the redemption of $50 million in junior
subordinated debentures and the payment of common stock dividends.
Our franchise is delivering solid results, we have a strong capital
base, and we have ample flexibility to prudently allocate that
capital into opportunities that best serve the long-term interests
of our clients, communities and shareholders.”
Q3
Q2
Q3
YTD
2024
2024
2023
2024
2023
Financial Highlights
(1)
Net interest income
$
202,064
$
199,628
$
199,728
$
598,212
$
600,428
Provision for credit losses
15,245
11,605
4,396
39,017
42,128
Non-interest income
32,502
32,038
30,296
98,523
99,085
Non-interest expenses
122,935
118,682
116,638
362,540
344,823
Income before income taxes
96,386
101,379
108,990
295,178
312,562
Income tax expense
22,659
25,541
26,968
72,155
89,187
Net income
$
73,727
$
75,838
$
82,022
$
223,023
$
223,375
Selected Financial Data
(1)
Net interest margin
4.25
%
4.22
%
4.15
%
4.21
%
4.24
%
Efficiency ratio
52.41
%
51.23
%
50.71
%
52.03
%
49.29
%
Earnings per share - diluted
$
0.45
$
0.46
$
0.46
$
1.35
$
1.25
Book value per share
$
10.38
$
9.10
$
7.47
$
10.38
$
7.47
Tangible book value per share (2)
$
10.09
$
8.81
$
7.16
$
10.09
$
7.16
Return on average equity
18.31
%
20.80
%
20.70
%
19.52
%
19.00
%
Return on average assets
1.55
%
1.61
%
1.72
%
1.57
%
1.59
%
Results for Third Quarter of
2024 compared to Second Quarter of 2024
Profitability
Net income – $73.7 million, or
$0.45 per diluted share compared to $75.8 million, or $0.46 per
diluted share.
Income before income taxes –
$96.4 million compared to $101.3 million.
Adjusted pre-tax, pre-provision income
(Non-GAAP)(2) – $111.6 million, compared to $113.1
million.
Net interest income – $202.1
million compared to $199.6 million. The increase was mainly due to
a higher volume of loans and an increase of approximately $1.2
million associated with the effect of an additional day in the
third quarter of 2024. Net interest margin increased to 4.25%,
compared to 4.22%.
Provision for credit losses – $15.2
million compared to $11.6 million. The increase in provision
reflects the impact of higher charge-off levels in the consumer
loan and finance lease portfolios, partially offset by reductions
associated with the improved financial condition from certain
commercial borrowers and improvements in the long-term projections
of the unemployment rate primarily in the Puerto Rico region and
the commercial real estate (“CRE”) price index.
Non-interest income – $32.5 million
compared to $32.0 million. The increase was driven by insurance
proceeds of $0.8 million received in the third quarter of 2024.
Non-interest expenses – $122.9
million compared to $118.7 million. The increase was mainly due to
a $2.3 million realized gain on the sale of a commercial other real
estate owned (“OREO”) property in the Puerto Rico region in the
second quarter of 2024 and a $1.6 million increase in employees’
compensation and benefits expense, driven by annual salary merit
increases and an additional working day in the third quarter of
2024. The efficiency ratio was 52.41%, compared to 51.23%.
Balance Sheet
Total loans – grew by $62.8 million
to $12.5 billion, primarily reflecting growth in the consumer and
commercial loan portfolios. Total loan originations, other than
credit card utilization activity, of $1.2 billion, up $43.1
million, mainly in commercial and construction loans.
Core deposits (other than brokered and
government deposits) – decreased by $36.8 million to $12.7
billion, reflecting a decline of $51.0 million in the Virgin
Islands region and $31.5 million in the Puerto Rico region,
partially offset by a $45.7 million increase in the Florida region.
This decline includes a $96.9 million decrease in
non-interest-bearing deposits, partially offset by a $35.9 million
increase in time deposits.
Government deposits (fully
collateralized) – decreased by $40.1 million to $3.2 billion,
mainly in the Virgin Islands region.
Brokered certificates of deposits
(“CDs”) – decreased by $104.7 million to $520.0 million, mainly
in the Puerto Rico region.
Asset Quality
Allowance for credit losses (“ACL”)
coverage ratio – amounted to 1.98%, compared to 2.06%.
Annualized net charge-offs to average
loans ratio increased to 0.78%, compared to 0.69%; the increase
includes a $1.2 million fully reserved charge-off taken in
connection with the sale of an $8.2 million nonaccrual commercial
and industrial (“C&I”) loan in the Puerto Rico region.
Non-performing assets – decreased
by $7.8 million, driven by the sale and charge-off of the
aforementioned nonaccrual C&I loan.
Liquidity and
Capital
Liquidity – Cash and cash
equivalents amounted to $685.4 million, compared to $586.3 million.
When adding $1.8 billion of free high-quality liquid securities
that could be liquidated or pledged within one day and $964.7
million in available lending capacity at the Federal Home Loan Bank
(“FHLB”), available liquidity amounted to 18.43% of total assets,
compared to 18.50%.
Capital – Repurchased $50.0 million
of junior subordinated debentures and paid $26.1 million in common
stock dividends. Capital ratios exceeded required regulatory
levels. The Corporation’s estimated total capital, common equity
tier 1 (“CET1”) capital, tier 1 capital, and leverage ratios were
18.25%, 16.18%, 16.18%, and 10.96%, respectively, as of September
30, 2024. On a non-GAAP basis, the tangible common equity ratio(2)
increased to 8.79% when compared to 7.66%, driven by the $160.1
million increase in the fair value of available-for-sale debt
securities due to changes in market interest rates which is
recognized as part of accumulated other comprehensive loss.
(1) In thousands, except per share
information and financial ratios.
(2) Represents a non-GAAP financial
measure. Refer to Non-GAAP Disclosures - Non-GAAP Financial
Measures for the definition of and additional information about
this non-GAAP financial measure
NET INTEREST INCOME
The following table sets forth information concerning net
interest income for the last five quarters:
Quarter Ended
(Dollars in thousands)
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
Net Interest Income
Interest income
$
274,675
$
272,245
$
268,505
$
265,481
$
263,405
Interest expense
72,611
72,617
71,985
68,799
63,677
Net interest income
$
202,064
$
199,628
$
196,520
$
196,682
$
199,728
Average Balances
Loans and leases
$
12,354,679
$
12,272,816
$
12,207,840
$
12,004,881
$
11,783,456
Total securities, other short-term
investments and interest-bearing cash balances
6,509,789
6,698,609
6,720,395
6,835,407
7,325,226
Average interest-earning assets
$
18,864,468
$
18,971,425
$
18,928,235
$
18,840,288
$
19,108,682
Average interest-bearing liabilities
$
11,743,122
$
11,868,658
$
11,838,159
$
11,665,459
$
11,671,938
Average Yield/Rate
Average yield on interest-earning assets -
GAAP
5.78
%
5.76
%
5.69
%
5.59
%
5.47
%
Average rate on interest-bearing
liabilities - GAAP
2.45
%
2.45
%
2.44
%
2.34
%
2.16
%
Net interest spread - GAAP
3.33
%
3.31
%
3.25
%
3.25
%
3.31
%
Net interest margin - GAAP
4.25
%
4.22
%
4.16
%
4.14
%
4.15
%
Net interest income amounted to $202.1 million for the third
quarter of 2024, an increase of $2.5 million, compared to $199.6
million for the second quarter of 2024, including a net increase of
approximately $1.2 million associated with the effect of an
additional day in the third quarter of 2024. The increase in net
interest income reflects the following:
- A $3.8 million increase in interest income on loans, driven
by:
- A $1.6 million increase in interest income
on commercial and construction loans, driven by increases of $1.1
million associated with the effect of an additional day in the
third quarter of 2024, and a $0.4 million increase associated with
a $37.8 million increase in the average balance.
- A $1.4 million increase in interest income
on consumer loans and finance leases, of which $0.7 million was
associated with a $35.3 million increase in the average balance,
mainly in the auto loans and finance leases portfolios, and $0.7
million was associated with the effect of an additional day in the
third quarter of 2024.
- An $0.8 million increase in interest income
in residential mortgage loans driven by higher interest income
recognized on nonaccrual loans that returned to accrual status.
Partially offset by:
- A $1.0 million decrease in interest income from investment
securities driven by a $168.7 million decrease in the average
balance.
- A $0.3 million decrease in interest income from
interest-bearing cash balances driven by a $22.2 million reduction
in the average cash balances deposited at the Federal Reserve Bank
(the “FED”).
Interest expense on interest-bearing liabilities remained
relatively flat during the third and second quarters of 2024, as
further explained below.
- A $1.2 million increase in interest expense on time deposits,
excluding brokered CDs, mainly due to increases of approximately
$0.5 million associated with a $55.8 million increase in the
average balance, $0.4 million associated with higher interest rates
paid in the third quarter of 2024 on renewals, and $0.3 million
associated with the effect of an additional day in the third
quarter of 2024. The average cost of non-brokered time deposits in
the third quarter of 2024 increased 5 basis points to 3.60% when
compared to the previous quarter.
Partially offset by:
- A $1.0 million decrease in interest expense on brokered CDs,
primarily related to a $76.1 million reduction in the average
balance.
- A $0.2 million decrease in interest expense on interest-bearing
checking and saving accounts, mainly due to a decrease of
approximately $0.4 million associated with a $99.2 million
reduction in the average balance, partially offset by a $0.3
million increase associated with the effect of an additional day in
the third quarter of 2024. The average cost of interest-bearing
checking and saving accounts, excluding public sector deposits,
remained relatively flat at 0.76% in the third quarter of 2024,
when compared to 0.75% in the second quarter.
Net interest margin for the third quarter of 2024 was 4.25%, a 3
basis points increase when compared to the second quarter of 2024,
mostly reflecting a change in asset mix resulting from the
deployment of cash flows from lower-yielding investment securities
to fund loan growth while simultaneously repaying higher rate
brokered CDs.
NON-INTEREST INCOME
The following table sets forth information concerning
non-interest income for the last five quarters:
Quarter Ended
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
(In thousands)
Service charges and fees on deposit
accounts
$
9,684
$
9,725
$
9,662
$
9,662
$
9,552
Mortgage banking activities
3,199
3,419
2,882
2,094
2,821
Insurance commission income
3,003
2,786
5,507
2,379
2,790
Card and processing income
11,768
11,523
11,312
11,015
10,841
Other non-interest income
4,848
4,585
4,620
8,459
4,292
Non-interest income
$
32,502
$
32,038
$
33,983
$
33,609
$
30,296
Non-interest income increased by $0.5 million to $32.5 million
for the third quarter of 2024, compared to $32.0 million for the
second quarter of 2024, mainly due to:
- A $0.3 million increase in other non-interest income driven by
$0.8 million in insurance proceeds received in the third quarter of
2024 related to a 2020 outstanding insurance claim, partially
offset by a $0.6 million decrease related to lower realized gains
from purchased income tax credits.
- A $0.2 million increase in card and processing income, mainly
in merchant-related referral fees and interchange income due to
higher transactional volumes.
- A $0.2 million increase in insurance commission income.
Partially offset by:
- A $0.2 million decrease in revenues from mortgage banking
activities driven by a lower volume of sales of residential
mortgage loans in the secondary market. During the third and second
quarters of 2024, Government National Mortgage Association (“GNMA”)
securitization transactions and whole loan sales to U.S.
government-sponsored enterprises amounted to $38.2 million and
$43.5 million, respectively.
NON-INTEREST EXPENSES
The following table sets forth information concerning
non-interest expenses for the last five quarters:
Quarter Ended
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
(In thousands)
Employees' compensation and benefits
$
59,081
$
57,456
$
59,506
$
55,584
$
56,535
Occupancy and equipment
22,424
21,851
21,381
21,847
21,781
Business promotion
4,116
4,359
3,842
6,725
4,759
Professional service fees:
Collections, appraisals and other
credit-related fees
688
1,149
1,366
952
930
Outsourcing technology services
7,771
7,698
7,469
7,003
7,261
Other professional fees
4,079
3,584
3,841
3,295
2,831
Taxes, other than income taxes
5,665
5,408
5,129
5,535
5,465
FDIC deposit insurance
2,164
2,316
3,102
8,454
2,143
Other insurance and supervisory fees
2,092
2,287
2,293
2,308
2,356
Net gain on OREO operations
(1,339)
(3,609)
(1,452)
(1,005)
(2,153)
Credit and debit card processing
expenses
7,095
7,607
5,751
7,360
6,779
Communications
2,170
2,261
2,097
2,134
2,219
Other non-interest expenses
6,929
6,315
6,598
6,413
5,732
Total non-interest expenses
$
122,935
$
118,682
$
120,923
$
126,605
$
116,638
Non-interest expenses amounted to $122.9 million in the third
quarter of 2024, an increase of $4.2 million, from $118.7 million
in the second quarter of 2024. Non-interest expenses for the second
quarter of 2024 include a $0.2 million charge related to an
adjustment to the Federal Deposit Insurance Corporation (“FDIC”)
special assessment expense. Refer to Non-GAAP Disclosures - Special
Items for additional information. On a non-GAAP basis, excluding
the effect of this Special Item (as defined below in Non-GAAP
Disclosures - Special Items), adjusted non-interest expenses
increased by $4.4 million mainly due to:
- A $2.3 million decrease in net gain on OREO operations, driven
by the aforementioned $2.3 million realized gain on the sale of a
commercial real estate OREO property in the Puerto Rico region in
the second quarter of 2024.
- A $1.6 million increase in employees’ compensation and benefits
expense, driven by annual salary merit increases and an additional
working day in the third quarter of 2024, partially offset by a
decrease in payroll taxes due to employees reaching maximum taxable
amounts.
- A $0.6 million increase in other non-interest expenses, mainly
due to higher charges for operational and fraud losses, partially
offset by a decrease in amortization of intangible assets.
- A $0.6 million increase in occupancy and equipment expenses,
including a $0.1 million increase in rent expense related to a
branch which is expected to close during the fourth quarter of
2024.
Partially offset by:
- A $0.5 million decrease in credit and debit card processing
expenses, mainly due to higher reimbursements from credit card
networks compared to the second quarter of 2024.
INCOME TAXES
The Corporation recorded an income tax expense of $22.7 million
for the third quarter of 2024, compared to $25.5 million for the
second quarter of 2024, mainly due to lower pre-tax income and a
$0.4 million tax contingency accrual release in connection with the
expiration of the statute of limitation on some uncertain tax
positions.
The Corporation’s estimated annual effective tax rate, excluding
entities with pre-tax losses from which a tax benefit cannot be
recognized and discrete items, was 23.7% for the third quarter of
2024, compared to 24.1% for the second quarter of 2024. As of
September 30, 2024, the Corporation had a deferred tax asset of
$137.5 million, net of a valuation allowance of $121.6 million
against the deferred tax assets.
CREDIT QUALITY
Non-Performing Assets
The following table sets forth information concerning
non-performing assets for the last five quarters:
(Dollars in thousands)
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
Nonaccrual loans held for investment:
Residential mortgage
$
31,729
$
31,396
$
32,685
$
32,239
$
31,946
Construction
4,651
4,742
1,498
1,569
1,640
Commercial mortgage
11,496
11,736
11,976
12,205
21,632
C&I
18,362
27,661
25,067
15,250
18,809
Consumer and finance leases
23,106
20,638
21,739
22,444
19,137
Total nonaccrual loans held for
investment
$
89,344
$
96,173
$
92,965
$
83,707
$
93,164
OREO
19,330
21,682
28,864
32,669
28,563
Other repossessed property
8,844
7,513
6,226
8,115
7,063
Other assets (1)
1,567
1,532
1,551
1,415
1,448
Total non-performing assets (2)
$
119,085
$
126,900
$
129,606
$
125,906
$
130,238
Past due loans 90 days and still accruing
(3)
$
43,610
$
47,173
$
57,515
$
59,452
$
62,892
Nonaccrual loans held for investment to
total loans held for investment
0.72
%
0.78
%
0.76
%
0.69
%
0.78
%
Nonaccrual loans to total loans
0.72
%
0.78
%
0.75
%
0.69
%
0.78
%
Non-performing assets to total assets
0.63
%
0.67
%
0.69
%
0.67
%
0.70
%
(1)
Residential pass-through mortgage-backed
securities (“MBS”) issued by the Puerto Rico Housing Finance
Authority (“PRHFA”) held as part of the available-for-sale debt
securities portfolio.
(2)
Excludes purchased-credit deteriorated
(“PCD”) loans previously accounted for under Accounting Standards
Codification (“ASC”) Subtopic 310-30 for which the Corporation made
the accounting policy election of maintaining pools of loans as
“units of account” both at the time of adoption of current expected
credit losses (“CECL”) on January 1, 2020 and on an ongoing basis
for credit loss measurement. These loans will continue to be
excluded from nonaccrual loan statistics as long as the Corporation
can reasonably estimate the timing and amount of cash flows
expected to be collected on the loan pools. The portion of such
loans contractually past due 90 days or more amounted to $6.5
million as of September 30, 2024 (June 30, 2024- $7.4 million;
March 31, 2024 - $8.6 million; December 31, 2023 - $8.3 million;
September 30, 2023 - $8.9 million).
(3)
These include rebooked loans, which were
previously pooled into GNMA securities, amounting to $6.6 million
as of September 30, 2024 (June 30, 2024- $6.8 million; March 31,
2024 - $8.8 million; December 31, 2023 - $7.9 million; September
30, 2023 - $8.5 million). Under the GNMA program, the Corporation
has the option but not the obligation to repurchase loans that meet
GNMA’s specified delinquency criteria. For accounting purposes, the
loans subject to the repurchase option are required to be reflected
on the financial statements with an offsetting liability.
Variances in credit quality metrics:
- Total non-performing assets decreased by $7.8 million to $119.1
million as of September 30, 2024, compared to $126.9 million as of
June 30, 2024. Total nonaccrual loans held for investment decreased
by $6.9 million to $89.3 million as of September 30, 2024, compared
to $96.2 million as of June 30, 2024.
The decrease in non-performing assets was
driven by:
- A $9.6 million decrease in nonaccrual
commercial and construction loans, mainly associated with the sale
of an $8.2 million nonaccrual C&I loan in the Puerto Rico
region. The sale resulted in a $1.2 million charge-off that had
been previously reserved.
- A $2.3 million decrease in the OREO
portfolio balance, mainly attributable to the sale of residential
properties in the Puerto Rico region.
Partially offset by:
- A $2.5 million increase in nonaccrual
consumer loans, consisting mainly of auto loans.
- A $1.3 million increase in other
repossessed property, consisting of repossessed automobiles.
- A $0.3 million increase in nonaccrual
residential mortgage loans.
- Inflows to nonaccrual loans held for investment were $38.7
million in the third quarter of 2024, a decrease of $5.3 million,
when compared to the second quarter of 2024. Inflows to nonaccrual
commercial and construction loans were $1.0 million in the third
quarter of 2024, a decrease of $17.1 million when compared to the
second quarter of 2024, related to the inflow in the second quarter
of a $16.5 million commercial relationship in the Puerto Rico
region. Inflows to nonaccrual consumer loans were $33.0 million in
the third quarter of 2024, an increase of $10.5 million compared to
inflows of $22.5 million in the second quarter of 2024. Inflows to
nonaccrual residential mortgage loans were $4.7 million in the
third quarter of 2024, an increase of $1.3 million compared to
inflows of $3.4 million in the second quarter of 2024. See Early
Delinquency below for additional information.
- Adversely classified commercial and construction loans
decreased by $9.1 million to $77.7 million as of September 30,
2024, also driven by the sale and charge-off of the aforementioned
nonaccrual C&I loan.
Early Delinquency
Total loans held for investment in early delinquency (i.e.,
30-89 days past due accruing loans, as defined in regulatory
reporting instructions) amounted to $143.4 million as of September
30, 2024, a decrease of $4.0 million, compared to $147.4 million as
of June 30, 2024. The variances by major portfolio are as
follows:
- Consumer loans in early delinquency decreased by $7.9 million
to $103.9 million, mainly in the auto loans and finance leases
portfolios.
- Residential mortgage loans in early delinquency decreased by
$0.4 million to $31.9 million.
Partially offset by:
- Commercial and construction loans in early delinquency
increased by $4.3 million to $7.6 million, mainly due to a C&I
loan in the Florida region that matured and is in the process of
renewal but for which the Corporation continued to receive interest
and principal payments from the borrower.
Allowance for Credit Losses
The following table summarizes the activity of the ACL for
on-balance sheet and off-balance sheet exposures during the third
and second quarters of 2024:
Quarter Ended September 30,
2024
Loans and Finance
Leases
Debt Securities
(Dollars in thousands)
Residential Mortgage
Loans
Commercial and Construction
Loans
Consumer Loans and Finance
Leases
Total Loans and Finance
Leases
Unfunded Loans
Commitments
Held-to Maturity
Available- for-Sale
Total ACL
Allowance for Credit Losses
Allowance for credit losses, beginning
balance
$
46,051
$
70,172
$
138,309
$
254,532
$
4,502
$
1,267
$
549
$
260,850
Provision for credit losses - (benefit)
expense
(5,476
)
(6,435
)
28,381
16,470
(1,041
)
(148
)
(36
)
15,245
Net recoveries (charge-offs)
76
(1,088
)
(22,994
)
(24,006
)
-
-
13
(23,993
)
Allowance for credit losses, end of
period
$
40,651
$
62,649
$
143,696
$
246,996
$
3,461
$
1,119
$
526
$
252,102
Amortized cost of loans and finance
leases
$
2,820,147
$
5,884,535
$
3,741,342
$
12,446,024
Allowance for credit losses on loans to
amortized cost
1.44
%
1.06
%
3.84
%
1.98
%
Quarter Ended June 30,
2024
Loans and Finance
Leases
Debt Securities
(Dollars in thousands)
Residential Mortgage
Loans
Commercial and Construction
Loans
Consumer Loans and Finance
Leases
Total Loans and Finance
Leases
Unfunded Loans
Commitments
Held-to- Maturity
Available- for-Sale
Total ACL
Allowance for Credit Losses
Allowance for credit losses, beginning
balance
$
56,689
$
73,337
$
133,566
$
263,592
$
4,919
$
1,235
$
442
$
270,188
Provision for credit losses - (benefit)
expense
(10,593
)
(4,198
)
26,721
11,930
(417
)
32
60
11,605
Net (charge-offs) recoveries
(45
)
1,033
(21,978
)
(20,990
)
-
-
47
(20,943
)
Allowance for credit losses, end of
period
$
46,051
$
70,172
$
138,309
$
254,532
$
4,502
$
1,267
$
549
$
260,850
Amortized cost of loans and finance
leases
$
2,809,666
$
5,863,843
$
3,711,999
$
12,385,508
Allowance for credit losses on loans to
amortized cost
1.64
%
1.20
%
3.73
%
2.06
%
Allowance for Credit Losses for Loans and Finance Leases
As of September 30, 2024, the ACL for loans and finance leases
was $247.0 million, a decrease of $7.5 million, from $254.5 million
as of June 30, 2024. The decrease was mainly related to the ACL for
commercial and construction loans, which decreased by $7.5 million,
mainly due to releases associated with the improved financial
condition of certain commercial borrowers and the improvement in
the forecasted CRE price index, as well as the effect of the
aforementioned $1.2 million charge-off recorded on the sale of a
nonaccrual C&I loan that had been previously reserved. The ACL
for residential mortgage loans decreased by $5.4 million, driven by
updated macroeconomic variables, mainly in the long-term projection
of the unemployment rate in the Puerto Rico region. Meanwhile, the
ACL for consumer loans increased by $5.4 million, driven by higher
charge-off levels and loan portfolio growth.
The provision for credit losses on loans and finance leases was
$16.5 million for the third quarter of 2024, compared to $11.9
million in the second quarter of 2024, as detailed below:
- Provision for credit losses for the residential mortgage loan
portfolio was a net benefit of $5.5 million for the third quarter
of 2024, compared to a net benefit of $10.6 million for the second
quarter of 2024. The net benefit recorded during the third quarter
of 2024 was driven by the aforementioned changes in macroeconomic
variables. Meanwhile, the net benefit recorded during the second
quarter of 2024 was driven by updated historical loss experience
used for determining the ACL estimate resulting in a downward
revision of estimated loss severities and lower required reserve
levels.
- Provision for credit losses for the consumer loan and finance
lease portfolios was an expense of $28.4 million for the third
quarter of 2024, compared to an expense of $26.7 million for the
second quarter of 2024. The increase in provision expense was
driven by higher charge-off levels in these portfolios.
- Provision for credit losses for the commercial and construction
loan portfolios was a net benefit of $6.4 million for the third
quarter of 2024, compared to a net benefit of $4.2 million for the
second quarter of 2024. The increase in net benefit during the
third quarter of 2024 was driven by the aforementioned improvement
in the financial condition of certain commercial borrowers, and, to
a lesser extent, an improvement in the forecasted CRE price
index.
The ratio of the ACL for loans and finance leases to total loans
held for investment was 1.98% as of September 30, 2024, compared to
2.06% as of June 30, 2024. The ratio of the total ACL for loans and
finance leases to nonaccrual loans held for investment was 276.46%
as of September 30, 2024, compared to 264.66% as of June 30,
2024.
Net Charge-Offs
The following table presents ratios of annualized net
(recoveries) charge-offs to average loans held-in-portfolio for the
last five quarters:
Quarter Ended
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
Residential mortgage
-0.01%
0.01%
0.03%
-0.04%
-0.01%
Construction
-0.02%
-0.02%
-0.02%
0.01%
-3.18%
Commercial mortgage
-0.01%
-0.07%
-0.01%
0.09%
-0.01%
Commercial and Industrial
0.14%
-0.08%
-0.59%
0.00%
-0.02%
Consumer loans and finance leases
2.47%
2.38%
1.70%
(1)
2.26%
1.79%
Total loans
0.78%
0.69%
0.37%
(1)
0.69%
0.48%
(1)
The $9.5 million recovery associated with
the bulk sale of fully charged-off consumer loans during the first
quarter of 2024 reduced the consumer loans and finance leases and
total net charge-offs to related average loans ratio for the
quarter ended March 31, 2024 by 104 basis points and 31 basis
points, respectively.
The ratios above are based on annualized net charge-offs and are
not necessarily indicative of the results expected in subsequent
periods.
Net charge-offs were $24.0 million for the third quarter of
2024, or an annualized 0.78% of average loans, compared to $21.0
million, or an annualized 0.69% of average loans, in the second
quarter of 2024. The $3.0 million increase in net charge-offs was
driven by the aforementioned $1.2 million charge-off recorded on
the sale of a nonaccrual C&I loan in the third quarter of 2024;
$1.2 million in recoveries recorded on two commercial loans in the
Florida region during the second quarter of 2024; and a $1.0
million increase in net charge-offs in consumer loans and finance
leases.
Allowance for Credit Losses for Unfunded Loan Commitments
As of September 30, 2024, the ACL for off-balance sheet credit
exposures decreased to $3.5 million, compared to $4.5 million as of
June 30, 2024, driven by an improvement on the economic outlook of
certain macroeconomic variables, particularly in variables
associated with the CRE price index.
Allowance for Credit Losses for Debt Securities
As of September 30, 2024, the ACL for debt securities was $1.6
million, of which $1.1 million related to Puerto Rico municipal
bonds classified as held-to-maturity, compared to $1.8 million and
$1.3 million, respectively, as of June 30, 2024.
STATEMENT OF FINANCIAL CONDITION
Total assets were approximately $18.9 billion as of September
30, 2024, down $22.2 million from June 30, 2024.
The following variances within the main components of total
assets are noted:
- A $99.1 million increase in cash and cash equivalents, mainly
related to net cash inflows from the investment securities
portfolio, partially offset by repayments of brokered CDs, the
redemption of $50.0 million in outstanding trust-preferred
securities (“TruPS”) and loan growth funding. The redemption of
TruPS was aligned with the Corporation’s plan for optimization of
its capital structure while reducing financing costs.
- An $82.3 million decrease in investment securities, driven by
maturities of $140.8 million and principal repayments of $117.3
million, which include repayments of $101.7 million of U.S.
agencies MBS and debentures and $15.6 million of municipal bonds,
partially offset by a $160.1 million increase in the fair value of
available-for-sale debt securities attributable to changes in
market interest rates and $16.1 million in purchases of Community
Reinvestment Act qualified debt securities during the third quarter
of 2024.
- A $62.8 million increase in total loans. The growth consisted
of increases of $65.3 million in the Puerto Rico region and $47.5
million in the Florida region, partially offset by a $50.0 million
decrease in the Virgin Islands region. On a portfolio basis, the
variance consisted of increases of $29.4 million in consumer loans,
primarily auto loans and finance leases in the Puerto Rico region,
$20.7 million in commercial and construction loans, and $12.7
million in residential mortgage loans. The increase in commercial
and construction loans was mainly related to growth in the Florida
and Puerto Rico regions of approximately $40.8 million and $29.1
million, respectively, partially offset by a $49.2 million decrease
in the Virgin Islands region. The increase is net of multiple
repayments, including a $54.8 million repayment of a government
line of credit in the Virgin Islands region, a $36.3 million
repayment of a commercial loan in the Puerto Rico region, and $31.0
million in repayments prior to maturity of three commercial loans
in the Florida region.
Total loan originations, including
refinancings, renewals, and draws from existing commitments
(excluding credit card utilization activity), amounted to $1.2
billion in the third quarter of 2024, an increase of $43.1 million
compared to the second quarter of 2024.
Total loan originations in the Puerto Rico
region amounted to $902.2 million in the third quarter of 2024,
compared to $840.5 million in the second quarter of 2024. The $61.7
million increase in total loan originations was mainly in
commercial and construction loans, driven by five C&I
originations totaling $107.1 million, each in excess of $10
million, partially offset by decreases in commercial mortgage and
construction loan originations.
Total loan originations in the Virgin Islands
region amounted to $34.7 million in the third quarter of 2024,
compared to $20.8 million in the second quarter of 2024. The $13.9
million increase in total loan originations was mainly in
commercial and construction loans.
Total loan originations in the Florida region
amounted to $248.4 million in the third quarter of 2024, compared
to $280.9 million in the second quarter of 2024. The $32.5 million
decline in total loan originations consisted of decreases of $23.0
million in commercial and construction loans, mainly in C&I
loans; $7.0 million in residential mortgage loans; and $2.5 million
in consumer loans.
- An $87.3 million decrease in other assets, in part due to the
settlement in the third quarter of 2024 of certain receivables
associated with amounts in transit related to customer payments and
prepaid assets.
Total liabilities were approximately $17.2 billion as of
September 30, 2024, a decrease of $231.6 million from June 30,
2024.
- Total deposits decreased $181.6 million consisting of:
- A $104.7 million decrease in brokered CDs, mainly in the Puerto
Rico region. The decline reflects maturing short-term brokered CDs
amounting to $170.2 million with an all-in cost of 5.38% that were
paid off during the third quarter of 2024, partially offset by
$65.5 million of new issuances with original average maturities of
approximately 1 year and an all-in cost of 4.86%.
- A $40.1 million decrease in government deposits, which includes
a decline of $47.9 million in the Virgin Islands region, partially
offset by increases of $7.6 million in the Puerto Rico region and
$0.2 million in the Florida region.
- A $36.8 million decrease in deposits, excluding brokered CDs
and government deposits, reflecting decreases of $51.0 million in
the Virgin Islands region and $31.5 million in the Puerto Rico
region, partially offset by a $45.7 million increase in the Florida
region. The decrease in such deposits includes a $96.9 million
decrease in non-interest-bearing deposits, partially offset by a
$35.9 million increase in time deposits.
- A $50.0 million decrease in other borrowings related to the
aforementioned redemption of outstanding TruPS issued by FBP
Statutory Trust II.
Total stockholders’ equity amounted to $1.7 billion as of
September 30, 2024, an increase of $209.4 million from June 30,
2024, driven by a $160.1 million increase in the fair value of
available-for-sale debt securities due to changes in market
interest rates recognized as part of accumulated other
comprehensive loss and the net income generated in the third
quarter of 2024, partially offset by $26.3 million in common stock
dividends declared in the third quarter of 2024.
As of September 30, 2024, capital ratios exceeded the required
regulatory levels for bank holding companies and well-capitalized
banks. The Corporation’s estimated CET1 capital, tier 1 capital,
total capital and leverage ratios under the Basel III rules were
16.18%, 16.18%, 18.25%, and 10.96%, respectively, as of September
30, 2024, compared to CET1 capital, tier 1 capital, total capital,
and leverage ratios of 15.77%, 15.77%, 18.21%, and 10.63%,
respectively, as of June 30, 2024.
Meanwhile, estimated CET1 capital, tier 1 capital, total capital
and leverage ratios of our banking subsidiary, FirstBank, were
16.00%, 16.76%, 18.01%, and 11.36%, respectively, as of September
30, 2024, compared to CET1 capital, tier 1 capital, total capital
and leverage ratios of 15.97%, 16.73%, 17.98%, and 11.29%,
respectively, as of June 30, 2024.
LIQUIDITY
Cash and cash equivalents increased by $99.1 million to $685.4
million as of September 30, 2024. When adding $1.8 billion of free
high-quality liquid securities that could be liquidated or pledged
within one day, total core liquidity amounted to $2.5 billion as of
September 30, 2024, or 13.32% of total assets, compared to $2.5
billion, or 13.37% of total assets as of June 30, 2024. In
addition, as of September 30, 2024, the Corporation had $964.7
million available for credit with the FHLB based on the value of
collateral pledged with the FHLB. As such, the basic liquidity
ratio (which includes cash, free high-quality liquid assets such as
U.S. government and government-sponsored enterprises’ obligations
that could be liquidated or pledged within one day, and available
secured lines of credit with the FHLB to total assets) was
approximately 18.43% as of September 30, 2024, compared to 18.50%
as of June 30, 2024.
In addition to the aforementioned available credit from the
FHLB, the Corporation also maintains borrowing capacity at the FED
Discount Window Program. The Corporation had approximately $2.6
billion available for funding under the FED’s Borrower-In-Custody
Program as of September 30, 2024. In the aggregate, as of September
30, 2024, the Corporation had $6.1 billion, or 131% of estimated
uninsured deposits (excluding fully collateralized government
deposits), available to meet liquidity needs.
The Corporation’s total deposits, excluding brokered CDs,
amounted to $15.8 billion as of September 30, 2024, compared to
$15.9 billion as of June 30, 2024, which includes $3.2 billion in
government deposits that are fully collateralized as of each of
September 30, 2024 and June 30, 2024. Excluding fully
collateralized government deposits and FDIC-insured deposits, as of
September 30, 2024, the estimated amount of uninsured deposits was
$4.6 billion, which represents 29.25% of total deposits, compared
to $4.5 billion, or 28.46% of total deposits, as of June 30, 2024.
Refer to Table 11 in the accompanying tables (Exhibit A) for
additional information about the deposits composition.
Tangible Common Equity (Non-GAAP)
On a non-GAAP basis, the Corporation’s tangible common equity
ratio increased to 8.79% as of September 30, 2024, compared to
7.66% as of June 30, 2024, driven by the $160.1 million increase in
the fair value of available-for-sale debt securities. Refer to
Non-GAAP Disclosures- Non-GAAP Financial Measures for the
definition of and additional information about this non-GAAP
financial measure.
The following table presents a reconciliation of the
Corporation’s tangible common equity and tangible assets to the
most comparable GAAP items as of the indicated dates:
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
(In thousands, except ratios and per share
information)
Tangible Equity:
Total common equity - GAAP
$
1,700,885
$
1,491,460
$
1,479,717
$
1,497,609
$
1,303,068
Goodwill
(38,611
)
(38,611
)
(38,611
)
(38,611
)
(38,611
)
Other intangible assets
(8,260
)
(9,700
)
(11,542
)
(13,383
)
(15,229
)
Tangible common equity -
non-GAAP
$
1,654,014
$
1,443,149
$
1,429,564
$
1,445,615
$
1,249,228
Tangible Assets:
Total assets - GAAP
$
18,859,170
$
18,881,374
$
18,890,961
$
18,909,549
$
18,594,608
Goodwill
(38,611
)
(38,611
)
(38,611
)
(38,611
)
(38,611
)
Other intangible assets
(8,260
)
(9,700
)
(11,542
)
(13,383
)
(15,229
)
Tangible assets - non-GAAP
$
18,812,299
$
18,833,063
$
18,840,808
$
18,857,555
$
18,540,768
Common shares outstanding
163,876
163,865
166,707
169,303
174,386
Tangible common equity ratio -
non-GAAP
8.79
%
7.66
%
7.59
%
7.67
%
6.74
%
Tangible book value per common share -
non-GAAP
$
10.09
$
8.81
$
8.58
$
8.54
$
7.16
Exposure to Puerto Rico Government
As of September 30, 2024, the Corporation had $309.0 million of
direct exposure to the Puerto Rico government, its municipalities,
and public corporations, a decrease of $7.7 million when compared
to $316.7 million as of June 30, 2024, mainly due to multiple
repayments. As of September 30, 2024, approximately $195.6 million
of the exposure consisted of loans and obligations of
municipalities in Puerto Rico that are supported by assigned
property tax revenues and for which, in most cases, the good faith,
credit, and unlimited taxing power of the applicable municipality
have been pledged to their repayment, and $50.9 million consisted
of loans and obligations which are supported by one or more
specific sources of municipal revenues. The Corporation’s total
direct exposure to the Puerto Rico government also included $8.8
million in a loan extended to an affiliate of the Puerto Rico
Electric Power Authority and $50.7 million in loans to agencies of
Puerto Rico public corporations. In addition, the total direct
exposure included an obligation of the Puerto Rico government,
specifically a residential pass-through MBS issued by the PRHFA, at
an amortized cost of $3.0 million (fair value of $1.6 million as of
September 30, 2024), included as part of the Corporation’s
available-for-sale debt securities portfolio. This residential
pass-through MBS issued by the PRHFA is collateralized by certain
second mortgages and had an unrealized loss of $1.4 million as of
September 30, 2024, of which $0.3 million is due to credit
deterioration.
The aforementioned exposure to municipalities in Puerto Rico
included $92.1 million of financing arrangements with Puerto Rico
municipalities that were issued in bond form but underwritten as
loans with features that are typically found in commercial loans.
These bonds are accounted for as held-to-maturity debt
securities.
As of each of September 30, 2024 and June 30, 2024, the
Corporation had $2.7 billion of public sector deposits in Puerto
Rico. Approximately 22% of the public sector deposits as of
September 30, 2024 were from municipalities and municipal agencies
in Puerto Rico, and 78% were from public corporations, the Puerto
Rico central government and agencies, and U.S. federal government
agencies in Puerto Rico.
NON-GAAP DISCLOSURES
This press release contains GAAP financial measures and non-GAAP
financial measures. Non-GAAP financial measures are used when
management believes that the presentation of these non-GAAP
financial measures enhances the ability of analysts and investors
to analyze trends in the Corporation’s business and understand the
performance of the Corporation. The Corporation may utilize these
non-GAAP financial measures as guides in its budgeting and
long-term planning process. Where non-GAAP financial measures are
used, the most comparable GAAP financial measure, as well as the
reconciliation of the non-GAAP financial measure to the most
comparable GAAP financial measure, can be found in the text or in
the tables in or attached to this press release. Any analysis of
these non-GAAP financial measures should be used only in
conjunction with results presented in accordance with GAAP.
Certain non-GAAP financial measures, such as adjusted net income
and adjusted earnings per share, adjusted pre-tax, pre-provision
income, and adjusted non-interest expenses exclude the effect of
items that management believes are not reflective of core operating
performance (the “Special Items”). Other non-GAAP financial
measures include adjusted net interest income and adjusted net
interest income margin, tangible common equity, tangible book value
per common share, and certain capital ratios. These measures should
be read in conjunction with the accompanying tables (Exhibit A),
which are an integral part of this press release, and the
Corporation’s other financial information that is presented in
accordance with GAAP.
Special Items
The financial results for the nine-month periods ended September
30, 2024 and 2023 included the following Special Items:
Quarter Ended June 30, 2024 and Nine-Month
Period Ended September 30, 2024
FDIC Special Assessment Expense
Charges of $0.2 million ($0.1 million after-tax, calculated
based on the statutory tax rate of 37.5%) and $1.1 million ($0.7
million after-tax, calculated based on the statutory tax rate of
37.5%) were recorded in the second quarter of 2024 and nine-month
period ended September 30, 2024, respectively, to increase the
initial estimated FDIC special assessment resulting from the FDIC’s
updates related to the loss estimate in connection with losses to
the Deposit Insurance Fund associated with protecting uninsured
deposits following the failures of certain financial institutions
during the first half of 2023. The aforementioned charges increased
the estimated FDIC special assessment to a total of $7.4 million,
which was the revised estimated loss reflected in the FDIC invoice
for the first quarterly collection period with a payment date of
June 28, 2024. The FDIC deposit special assessment is reflected in
the condensed consolidated statements of income as part of “FDIC
deposit insurance” expenses.
Nine-Month Period Ended September 30,
2023
Gain Recognized from Legal Settlement
During the second quarter of 2023, the Corporation recognized a
$3.6 million ($2.3 million after-tax, calculated based on the
statutory tax rate of 37.5%) gain from a legal settlement reflected
in the condensed consolidated statements of income as part of other
non-interest income.
Gain on Early Extinguishment of Debt
During the second quarter of 2023, the Corporation recognized a
$1.6 million gain on the repurchase of $21.4 million in junior
subordinated debentures reflected in the condensed consolidated
statements of income as “Gain on early extinguishment of debt.” The
junior subordinated debentures are reflected in the condensed
consolidated statements of financial condition as “Other
borrowings.” The purchase price equated to 92.5% of the $21.4
million par value. The 7.5% discount resulted in the gain of $1.6
million. The gain, realized at the holding company level, had no
effect on the income tax expense in the second quarter of 2023.
Non-GAAP Financial Measures
Adjusted Pre-Tax, Pre-Provision Income
Adjusted pre-tax, pre-provision income is a non-GAAP performance
metric that management uses and believes that investors may find
useful in analyzing underlying performance trends, particularly in
times of economic stress, including as a result of natural
catastrophes or health epidemics. Adjusted pre-tax, pre-provision
income, as defined by management, represents income before income
taxes adjusted to exclude the provisions for credit losses on
loans, unfunded loan commitments and debt securities. In addition,
from time to time, earnings are also adjusted for certain items
that management believes are not reflective of core operating
performance, which are regarded as Special Items.
Tangible Common Equity Ratio and Tangible Book Value per Common
Share
The tangible common equity ratio and tangible book value per
common share are non-GAAP financial measures that management
believes are generally used by the financial community to evaluate
capital adequacy. Tangible common equity is total common equity
less goodwill and other intangible assets. Tangible assets are
total assets less goodwill and other intangible assets. Tangible
common equity ratio is tangible common equity divided by tangible
assets. Tangible book value per common share is tangible assets
divided by common shares outstanding. Refer to Statement of
Financial Condition - Tangible Common Equity (Non-GAAP) for a
reconciliation of the Corporation’s total stockholders’ equity and
total assets in accordance with GAAP to the non-GAAP financial
measures of tangible common equity and tangible assets,
respectively. Management uses and believes that many stock analysts
use the tangible common equity ratio and tangible book value per
common share in conjunction with other more traditional bank
capital ratios to compare the capital adequacy of banking
organizations with significant amounts of goodwill or other
intangible assets, typically stemming from the use of the purchase
method of accounting for mergers and acquisitions. Accordingly, the
Corporation believes that disclosure of these financial measures
may be useful to investors. Neither tangible common equity nor
tangible assets, or the related measures, should be considered in
isolation or as a substitute for stockholders’ equity, total
assets, or any other measure calculated in accordance with GAAP.
Moreover, the manner in which the Corporation calculates its
tangible common equity, tangible assets, and any other related
measures may differ from that of other companies reporting measures
with similar names.
Net Interest Income Excluding Valuations, and on a
Tax-Equivalent Basis
Net interest income, interest rate spread, and net interest
margin are reported excluding the changes in the fair value of
derivative instruments and on a tax-equivalent basis in order to
provide to investors additional information about the Corporation’s
net interest income that management uses and believes should
facilitate comparability and analysis of the periods presented. The
changes in the fair value of derivative instruments have no effect
on interest due or interest earned on interest-bearing liabilities
or interest-earning assets, respectively. The tax-equivalent
adjustment to net interest income recognizes the income tax savings
when comparing taxable and tax-exempt assets and assumes a marginal
income tax rate. Income from tax-exempt earning assets is increased
by an amount equivalent to the taxes that would have been paid if
this income had been taxable at statutory rates. Refer to Table 4
in the accompanying tables (Exhibit A) for a reconciliation of the
Corporation’s net interest income to adjusted net interest income
excluding valuations, and on a tax-equivalent basis. Management
believes that it is a standard practice in the banking industry to
present net interest income, interest rate spread, and net interest
margin on a fully tax-equivalent basis. This adjustment puts all
earning assets, most notably tax-exempt securities and tax-exempt
loans, on a common basis that management believes facilitates
comparison of results to the results of peers.
NET INCOME AND RECONCILIATION TO ADJUSTED NET INCOME
(NON-GAAP)
The following table shows, for the third quarters of 2024 and
2023, net income and earnings per diluted share, and reconciles,
for the second quarter of 2024 and nine-month periods ended
September 30, 2024 and 2023, net income to adjusted net income and
adjusted earnings per diluted share, which are non-GAAP financial
measures that exclude the significant Special Items discussed in
the Non-GAAP Disclosures - Special Items section.
Quarter Ended
Nine-Month Period
Ended
September 30, 2024
June 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
(In thousands, except per share
information)
Net income, as reported (GAAP)
$
73,727
$
75,838
$
82,022
$
223,023
$
223,375
Adjustments:
FDIC special assessment expense
-
152
-
1,099
-
Gain recognized from legal settlement
-
-
-
-
(3,600
)
Gain on early extinguishment of debt
-
-
-
-
(1,605
)
Income tax impact of adjustments (1)
-
(57
)
-
(412
)
1,350
Adjusted net income attributable to common
stockholders (non-GAAP)
$
73,727
$
75,933
$
82,022
$
223,710
$
219,520
Weighted-average diluted shares
outstanding
163,872
165,543
176,962
165,730
179,144
Earnings Per Share - diluted (GAAP)
$
0.45
$
0.46
$
0.46
$
1.35
$
1.25
Adjusted Earnings Per Share - diluted
(non-GAAP)
$
0.45
$
0.46
$
0.46
$
1.35
$
1.23
(1) See Non-GAAP Disclosures - Special
Items above for discussion of the individual tax impact related to
the above adjustments.
INCOME BEFORE INCOME TAXES AND RECONCILIATION TO ADJUSTED
PRE-TAX, PRE-PROVISION INCOME (NON-GAAP)
The following table reconciles income before income taxes to
adjusted pre-tax, pre-provision income for the last five quarters
and for the nine-month periods ended September 30, 2024 and
2023:
Quarter Ended
Nine-Month Period
Ended
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
September 30, 2024
September 30, 2023
(Dollars in thousands)
Income before income taxes
$
96,386
$
101,379
$
97,413
$
84,874
$
108,990
$
295,178
$
312,562
Add: Provision for credit losses
expense
15,245
11,605
12,167
18,812
4,396
39,017
42,128
Add: FDIC special assessment expense
-
152
947
6,311
-
1,099
-
Less: Gain recognized from legal
settlement
-
-
-
-
-
-
(3,600
)
Less: Gain on early extinguishment of
debt
-
-
-
-
-
-
(1,605
)
Adjusted pre-tax, pre-provision income
(1)
$
111,631
$
113,136
$
110,527
$
109,997
$
113,386
$
335,294
$
349,485
Change from most recent prior period
(amount)
$
(1,505
)
$
2,609
$
530
$
(3,389
)
$
(4,578
)
$
(14,191
)
$
(3,553
)
Change from most recent prior period
(percentage)
-1.3
%
2.4
%
0.5
%
-3.0
%
-3.9
%
-4.1
%
-1.0
%
(1)
Non-GAAP financial measure. See Non-GAAP
Disclosures above for the definition and additional information
about this non-GAAP financial measure.
Conference Call / Webcast Information
First BanCorp.’s senior management will host an earnings
conference call and live webcast on Wednesday, October 23, 2024, at
10:00 a.m. (Eastern Time). The call may be accessed via a live
Internet webcast through the Corporation’s investor relations
website, fbpinvestor.com, or through a dial-in telephone number at
(833) 470-1428 or (404) 975-4839. The participant access code is
104808. The Corporation recommends that listeners go to the web
site at least 15 minutes prior to the call to download and install
any necessary software. Following the webcast presentation, a
question and answer session will be made available to research
analysts and institutional investors. A replay of the webcast will
be archived in the Corporation’s investor relations website,
fbpinvestor.com, until October 23, 2025. A telephone replay will be
available one hour after the end of the conference call through
November 22, 2024, at (866) 813-9403. The replay access code is
131916.
Safe Harbor
This press release may contain “forward-looking statements”
concerning the Corporation’s future economic, operational, and
financial performance. The words or phrases “expect,” “anticipate,”
“intend,” “should,” “would,” “will,” “plans,” “forecast,”
“believe,” and similar expressions are meant to identify
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are subject to the
safe harbor created by such sections. The Corporation cautions
readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date hereof, and advises
readers that any such forward-looking statements are not guarantees
of future performance and involve certain risks, uncertainties,
estimates, and assumptions by us that are difficult to predict.
Various factors, some of which are beyond our control, including,
but not limited to, the uncertainties more fully discussed in Part
I, Item 1A, “Risk Factors” of the Corporation’s Annual Report on
Form 10-K for the year ended December 31, 2023, as updated in the
Corporation’s subsequent Quarterly Reports on Form 10-Q, and the
following, could cause actual results to differ materially from
those expressed in, or implied by, such forward-looking statements:
the effect of the current global interest rate environment
(including the potential for ongoing reductions in interest rates)
and inflation levels on the level, composition and performance of
the Corporation’s assets and liabilities, and corresponding effects
on the Corporation’s net interest income, net interest margin, loan
originations, deposit attrition, overall results of operations, and
liquidity position; the effects of changes in the interest rate
environment, including any adverse change in the Corporation’s
ability to attract and retain clients and gain acceptance from
current and prospective customers for new products and services,
including those related to the offering of digital banking and
financial services; volatility in the financial services industry,
including failures or rumored failures of other depository
institutions, and actions taken by governmental agencies to
stabilize the financial system, which could result in, among other
things, bank deposit runoffs, liquidity constraints, and increased
regulatory requirements and costs; the effect of continued changes
in the fiscal and monetary policies and regulations of the U.S.
federal government, the Puerto Rico government and other
governments, including those determined by the Federal Reserve
Board, the Federal Reserve Bank of New York, the FDIC,
government-sponsored housing agencies and regulators in Puerto
Rico, the U.S., and the U.S. and British Virgin Islands, that may
affect the future results of the Corporation; uncertainty as to the
ability of FirstBank to retain its core deposits and generate
sufficient cash flow through its wholesale funding sources, such as
securities sold under agreements to repurchase, FHLB advances, and
brokered CDs, which may require us to sell investment securities at
a loss; adverse changes in general political and economic
conditions in Puerto Rico, the U.S., and the U.S. and British
Virgin Islands, including in the interest rate environment,
unemployment rates, market liquidity, housing absorption rates,
real estate markets, and U.S. capital markets, which may affect
funding sources, loan portfolio performance and credit quality,
market prices of investment securities, and demand for the
Corporation’s products and services, and which may reduce the
Corporation’s revenues and earnings and the value of the
Corporation’s assets; the impact of government financial assistance
for hurricane recovery and other disaster relief on economic
activity in Puerto Rico, and the timing and pace of disbursements
of funds earmarked for disaster relief; the ability of the
Corporation, FirstBank, and third-party service providers to
identify and prevent cyber-security incidents, such as data
security breaches, ransomware, malware, “denial of service”
attacks, “hacking,” identity theft, and state-sponsored
cyberthreats, and the occurrence of and response to any incidents
that occur, which may result in misuse or misappropriation of
confidential or proprietary information, disruption, or damage to
our systems or those of third-party service providers on which we
rely, increased costs and losses and/or adverse effects to our
reputation; general competitive factors and other market risks as
well as the implementation of existent or planned strategic growth
opportunities, including risks, uncertainties, and other factors or
events related to any business acquisitions, dispositions,
strategic partnerships, strategic operational investments,
including systems conversions, and any anticipated efficiencies or
other expected results related thereto; uncertainty as to the
implementation of the debt restructuring plan of Puerto Rico and
the fiscal plan for Puerto Rico as certified on June 5, 2024, by
the oversight board established by the Puerto Rico Oversight,
Management, and Economic Stability Act, or any revisions to it, on
our clients and loan portfolios, and any potential impact from
future economic or political developments and tax regulations in
Puerto Rico; the impact of changes in accounting standards, or
determinations and assumptions in applying those standards, and of
forecasts of economic variables considered for the determination of
the ACL; the ability of FirstBank to realize the benefits of its
net deferred tax assets; the ability of FirstBank to generate
sufficient cash flow to pay dividends to the Corporation;
environmental, social, and governance matters, including our
climate-related initiatives and commitments; the impacts of natural
or man-made disasters, the emergence or continuation of widespread
health emergencies, geopolitical conflicts (including sanctions,
war or armed conflict, such as the ongoing conflict in Ukraine, the
conflict in the Middle East, and the possible expansion of such
conflicts in surrounding areas and potential geopolitical
consequences), terrorist attacks, or other catastrophic external
events, including impacts of such events on general economic
conditions and on the Corporation’s assumptions regarding forecasts
of economic variables; the risk that additional portions of the
unrealized losses in the Corporation’s debt securities portfolio
are determined to be credit-related, resulting in additional
charges to the provision for credit losses on the Corporation’s
debt securities portfolio, and the potential for additional credit
losses that could emerge from the downgrade of the U.S.’s Long-Term
Foreign-Currency Issuer Default Rating to ‘AA+’ from ‘AAA’ in
August 2023 and subsequent negative ratings outlooks; the impacts
of applicable legislative, tax, or regulatory changes or changes in
legislative, tax, or regulatory priorities, potential government
shutdowns, and political impasses, including uncertainties
regarding the U.S. debt ceiling and federal budget, as well as of
the 2024 U.S. and Puerto Rico general election, on the
Corporation’s financial condition or performance; the risk of
possible failure or circumvention of the Corporation’s internal
controls and procedures and the risk that the Corporation’s risk
management policies may not be adequate; the risk that the FDIC may
further increase the deposit insurance premium and/or require
further special assessments, causing an additional increase in the
Corporation’s non-interest expenses; any need to recognize
impairments on the Corporation’s financial instruments, goodwill,
and other intangible assets; the risk that the impact of the
occurrence of any of these uncertainties on the Corporation’s
capital would preclude further growth of FirstBank and preclude the
Corporation’s Board of Directors from declaring dividends; and
uncertainty as to whether FirstBank will be able to continue to
satisfy its regulators regarding, among other things, its asset
quality, liquidity plans, maintenance of capital levels, and
compliance with applicable laws, regulations and related
requirements. The Corporation does not undertake to, and
specifically disclaims any obligation to update any
“forward-looking statements” to reflect occurrences or
unanticipated events or circumstances after the date of such
statements, except as required by the federal securities laws.
About First BanCorp.
First BanCorp. is the parent corporation of FirstBank Puerto
Rico, a state-chartered commercial bank with operations in Puerto
Rico, the U.S., and the British Virgin Islands and Florida, and of
FirstBank Insurance Agency. First BanCorp.’s shares of common stock
trade on the New York Stock Exchange under the symbol FBP.
Additional information about First BanCorp. may be found at
www.1firstbank.com.
EXHIBIT A
Table 1 – Condensed Consolidated Statements of Financial
Condition
As of
September 30, 2024
June 30, 2024
December 31, 2023
(In thousands, except for share
information)
ASSETS
Cash and due from banks
$
684,028
$
581,843
$
661,925
Money market investments:
Time deposits with other financial
institutions
500
500
300
Other short-term investments
843
3,939
939
Total money market investments
1,343
4,439
1,239
Debt securities available for sale, at
fair value (ACL of $526 as of September 30, 2024; $549 as of June
30, 2024; and $511 as of December 31, 2023)
4,894,781
4,957,311
5,229,984
Debt securities held to maturity, at
amortized cost, net of ACL of $1,119 as of September 30, 2024;
$1,267 as of June 30, 2024; and $2,197 as of December 31, 2023
(fair value of $316,854 as of September 30, 2024; $333,690 as of
June 30, 2024; and $346,132 as of December 31, 2023)
322,023
343,168
351,981
Total debt securities
5,216,804
5,300,479
5,581,965
Equity securities
52,432
51,037
49,675
Total investment securities
5,269,236
5,351,516
5,631,640
Loans, net of ACL of $246,996 as of
September 30, 2024; $254,532 as of June 30, 2024; and $261,843 as
of December 31, 2023
12,199,028
12,130,976
11,923,640
Loans held for sale, at lower of cost or
market
12,641
10,392
7,368
Total loans, net
12,211,669
12,141,368
11,931,008
Accrued interest receivable on loans and
investments
67,112
77,895
77,716
Premises and equipment, net
136,401
138,554
142,016
OREO
19,330
21,682
32,669
Deferred tax asset, net
137,484
142,725
150,127
Goodwill
38,611
38,611
38,611
Other intangible assets
8,260
9,700
13,383
Other assets
285,696
373,041
229,215
Total assets
$
18,859,170
$
18,881,374
$
18,909,549
LIABILITIES
Deposits:
Non-interest-bearing deposits
$
5,275,733
$
5,406,054
$
5,404,121
Interest-bearing deposits
11,071,657
11,122,902
11,151,864
Total deposits
16,347,390
16,528,956
16,555,985
Advances from the FHLB
500,000
500,000
500,000
Other borrowings
111,700
161,700
161,700
Accounts payable and other liabilities
199,195
199,258
194,255
Total liabilities
17,158,285
17,389,914
17,411,940
STOCKHOLDERSʼ EQUITY
Common stock, $0.10 par value, 223,663,116
shares issued (September 30, 2024 - 163,875,810 shares outstanding;
June 30, 2024 - 163,865,453 shares outstanding; and December 31,
2023 - 169,302,812 shares outstanding)
22,366
22,366
22,366
Additional paid-in capital
962,973
961,254
965,707
Retained earnings
1,989,419
1,941,980
1,846,112
Treasury stock, at cost (September 30,
2024 - 59,787,306 shares; June 30, 2024 - 59,797,663 shares; and
December 31, 2023 - 54,360,304 shares)
(790,252
)
(790,465
)
(697,406
)
Accumulated other comprehensive loss
(483,621
)
(643,675
)
(639,170
)
Total stockholdersʼ equity
1,700,885
1,491,460
1,497,609
Total liabilities and stockholdersʼ
equity
$
18,859,170
$
18,881,374
$
18,909,549
Table 2 – Condensed Consolidated Statements of Income
Quarter Ended
Nine-Month Period
Ended
September 30, 2024
June 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
(In thousands, except per share
information)
Net interest income:
Interest income
$
274,675
$
272,245
$
263,405
$
815,425
$
758,005
Interest expense
72,611
72,617
63,677
217,213
157,577
Net interest income
202,064
199,628
199,728
598,212
600,428
Provision for credit losses - expense
(benefit):
Loans
16,470
11,930
10,643
41,317
47,669
Unfunded loan commitments
(1,041
)
(417
)
(128
)
(1,177
)
488
Debt securities
(184
)
92
(6,119
)
(1,123
)
(6,029
)
Provision for credit losses - expense
15,245
11,605
4,396
39,017
42,128
Net interest income after provision for
credit losses
186,819
188,023
195,332
559,195
558,300
Non-interest income:
Service charges and fees on deposit
accounts
9,684
9,725
9,552
29,071
28,380
Mortgage banking activities
3,199
3,419
2,821
9,500
8,493
Gain on early extinguishment of debt
-
-
-
-
1,605
Card and processing income
11,768
11,523
10,841
34,603
32,894
Other non-interest income
7,851
7,371
7,082
25,349
27,713
Total non-interest income
32,502
32,038
30,296
98,523
99,085
Non-interest expenses:
Employees’ compensation and benefits
59,081
57,456
56,535
176,043
167,271
Occupancy and equipment
22,424
21,851
21,781
65,656
64,064
Business promotion
4,116
4,359
4,759
12,317
12,901
Professional service fees
12,538
12,431
11,022
37,645
34,591
Taxes, other than income taxes
5,665
5,408
5,465
16,202
15,701
FDIC deposit insurance
2,164
2,316
2,143
7,582
6,419
Net gain on OREO operations
(1,339
)
(3,609
)
(2,153
)
(6,400
)
(6,133
)
Credit and debit card processing
expenses
7,095
7,607
6,779
20,453
18,637
Other non-interest expenses
11,191
10,863
10,307
33,042
31,372
Total non-interest expenses
122,935
118,682
116,638
362,540
344,823
Income before income taxes
96,386
101,379
108,990
295,178
312,562
Income tax expense
22,659
25,541
26,968
72,155
89,187
Net income
$
73,727
$
75,838
$
82,022
$
223,023
$
223,375
Net income attributable to common
stockholders
$
73,727
$
75,838
$
82,022
$
223,023
$
223,375
Earnings per common share:
Basic
$
0.45
$
0.46
$
0.47
$
1.35
$
1.25
Diluted
$
0.45
$
0.46
$
0.46
$
1.35
$
1.25
Table 3 – Selected Financial Data
Quarter Ended
Nine-Month Period
Ended
September 30, 2024
June 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
(Shares in thousands)
Per Common Share Results:
Net earnings per share - basic
$
0.45
$
0.46
$
0.47
$
1.35
$
1.25
Net earnings per share - diluted
$
0.45
$
0.46
$
0.46
$
1.35
$
1.25
Cash dividends declared
$
0.16
$
0.16
$
0.14
$
0.48
$
0.42
Average shares outstanding
163,059
164,945
176,358
165,041
178,486
Average shares outstanding diluted
163,872
165,543
176,962
165,730
179,144
Book value per common share
$
10.38
$
9.10
$
7.47
$
10.38
$
7.47
Tangible book value per common share
(1)
$
10.09
$
8.81
$
7.16
$
10.09
$
7.16
Common stock price: end of period
$
21.17
$
18.29
$
13.46
$
21.17
$
13.46
Selected Financial Ratios (In
Percent):
Profitability:
Return on average assets
1.55
1.61
1.72
1.57
1.59
Return on average equity
18.31
20.80
20.70
19.52
19.00
Interest rate spread (2)
3.42
3.41
3.41
3.39
3.60
Net interest margin (2)
4.34
4.32
4.24
4.31
4.36
Efficiency ratio (3)
52.41
51.23
50.71
52.03
49.29
Capital and Other:
Average total equity to average total
assets
8.46
7.74
8.32
8.06
8.39
Total capital
18.25
18.21
18.84
18.25
18.84
Common equity Tier 1 capital
16.18
15.77
16.35
16.18
16.35
Tier 1 capital
16.18
15.77
16.35
16.18
16.35
Leverage
10.96
10.63
10.57
10.96
10.57
Tangible common equity ratio (1)
8.79
7.66
6.74
8.79
6.74
Dividend payout ratio
35.39
34.80
30.10
35.52
33.56
Basic liquidity ratio (4)
18.43
18.50
19.67
18.43
19.67
Core liquidity ratio (5)
13.32
13.37
14.58
13.32
14.58
Loan to deposit ratio
76.21
75.00
72.77
76.21
72.77
Uninsured deposits, excluding fully
collateralized deposits, to total deposits (6)
29.25
28.46
27.74
29.25
27.74
Asset Quality:
Allowance for credit losses for loans and
finance leases to total loans
held for investment
1.98
2.06
2.21
1.98
2.21
Net charge-offs (annualized) to average
loans outstanding
0.78
0.69
0.48
0.61
0.54
Provision for credit losses for loans and
finance leases
to net charge-offs
68.61
56.84
75.56
73.56
102.22
Non-performing assets to total assets
0.63
0.67
0.70
0.63
0.70
Nonaccrual loans held for investment to
total loans held for investment
0.72
0.78
0.78
0.72
0.78
Allowance for credit losses for loans and
finance leases to total nonaccrual loans
held for investment
276.46
264.66
282.96
276.46
282.96
Allowance for credit losses for loans and
finance leases to total nonaccrual loans
held for investment, excluding residential
estate loans
428.70
392.94
430.62
428.70
430.62
(1)
Non-GAAP financial measures. Refer to
Non-GAAP Disclosures and Statement of Financial Condition -
Tangible Common Equity (Non-GAAP) above for additional information
about the components and a reconciliation of these measures.
(2)
Non-GAAP financial measures reported on a
tax-equivalent basis and excluding changes in the fair value of
derivative instruments. Refer to Non-GAAP Disclosures and Table 4
below for additional information and a reconciliation of these
measures.
(3)
Non-interest expenses to the sum of net
interest income and non-interest income.
(4)
Defined as the sum of cash and cash
equivalents, free high quality liquid assets that could be
liquidated within one day, and available secured lines of credit
with the FHLB to total assets.
(5)
Defined as the sum of cash and cash
equivalents and free high quality liquid assets that could be
liquidated within one day to total assets.
(6)
Exclude insured deposits not covered by
federal deposit insurance.
Table 4 – Reconciliation of Net Interest Income to Net
Interest Income Excluding Valuations and on a Tax-Equivalent
Basis
The following table reconciles net interest income in accordance
with GAAP to net interest income excluding valuations, and net
interest income on a tax-equivalent basis for the third and second
quarters of 2024, the third quarter of 2023, and the nine-month
periods ended September 30, 2024 and 2023, respectively. The table
also reconciles net interest spread and net interest margin to
these items excluding valuations, and on a tax-equivalent
basis.
Quarter Ended
Nine-Month Period
Ended
September 30,
June 30,
September 30,
September 30,
September 30,
(Dollars in thousands)
2024
2024
2023
2024
2023
Net Interest Income
Interest income - GAAP
$
274,675
$
272,245
$
263,405
$
815,425
$
758,005
Unrealized loss (gain) on derivative
instruments
5
-
(3
)
3
-
Interest income excluding valuations -
non-GAAP
274,680
272,245
263,402
815,428
758,005
Tax-equivalent adjustment
4,528
4,866
4,690
14,207
16,577
Interest income on a tax-equivalent basis
and excluding valuations - non-GAAP
$
279,208
$
277,111
$
268,092
$
829,635
$
774,582
Interest expense - GAAP
$
72,611
$
72,617
$
63,677
$
217,213
$
157,577
Net interest income - GAAP
$
202,064
$
199,628
$
199,728
$
598,212
$
600,428
Net interest income excluding valuations
- non-GAAP
$
202,069
$
199,628
$
199,725
$
598,215
$
600,428
Net interest income on a tax-equivalent
basis and excluding valuations - non-GAAP
$
206,597
$
204,494
$
204,415
$
612,422
$
617,005
Average Balances
Loans and leases
$
12,354,679
$
12,272,816
$
11,783,456
$
12,278,724
$
11,632,424
Total securities, other short-term
investments and interest-bearing cash balances
6,509,789
6,698,609
7,325,226
6,642,446
7,297,528
Average Interest-Earning Assets
$
18,864,468
$
18,971,425
$
19,108,682
$
18,921,170
$
18,929,952
Average Interest-Bearing Liabilities
$
11,743,122
$
11,868,658
$
11,671,938
$
11,816,378
$
11,271,354
Average Assets (1)
$
18,883,374
$
18,884,431
$
18,895,980
$
18,875,397
$
18,748,479
Average Non-Interest-Bearing Deposits
$
5,341,589
$
5,351,308
$
5,621,233
$
5,333,838
$
5,861,680
Average Yield/Rate
Average yield on interest-earning assets -
GAAP
5.78
%
5.76
%
5.47
%
5.74
%
5.35
%
Average rate on interest-bearing
liabilities - GAAP
2.45
%
2.45
%
2.16
%
2.45
%
1.87
%
Net interest spread - GAAP
3.33
%
3.31
%
3.31
%
3.29
%
3.48
%
Net interest margin - GAAP
4.25
%
4.22
%
4.15
%
4.21
%
4.24
%
Average yield on interest-earning assets
excluding valuations - non-GAAP
5.78
%
5.76
%
5.47
%
5.74
%
5.35
%
Average rate on interest-bearing
liabilities
2.45
%
2.45
%
2.16
%
2.45
%
1.87
%
Net interest spread excluding valuations -
non-GAAP
3.33
%
3.31
%
3.31
%
3.29
%
3.48
%
Net interest margin excluding valuations -
non-GAAP
4.25
%
4.22
%
4.15
%
4.21
%
4.24
%
Average yield on interest-earning assets
on a tax-equivalent basis and excluding valuations - non-GAAP
5.87
%
5.86
%
5.57
%
5.84
%
5.47
%
Average rate on interest-bearing
liabilities
2.45
%
2.45
%
2.16
%
2.45
%
1.87
%
Net interest spread on a tax-equivalent
basis and excluding valuations - non-GAAP
3.42
%
3.41
%
3.41
%
3.39
%
3.60
%
Net interest margin on a tax-equivalent
basis and excluding valuations - non-GAAP
4.34
%
4.32
%
4.24
%
4.31
%
4.36
%
(1) Includes, among other things, the ACL
on loans and finance leases and debt securities, as well as
unrealized gains and losses on available-for-sale debt
securities.
Table 5 – Quarterly Statement of Average Interest-Earning
Assets and Average Interest-Bearing Liabilities (On a
Tax-Equivalent Basis)
Average Volume
Interest Income (1) /
Expense
Average Rate (1)
Quarter Ended
September 30,
June 30,
September 30,
September 30,
June 30,
September 30,
September 30,
June 30,
September 30,
2024
2024
2023
2024
2024
2023
2024
2024
2023
(Dollars in thousands)
Interest-earning assets:
Money market and other short-term
investments
$
645,398
$
667,564
$
807,883
$
8,782
$
9,060
$
10,956
5.40
%
5.44
%
5.38
%
Government obligations(2)
2,520,133
2,619,778
2,817,646
8,458
8,947
9,415
1.33
%
1.37
%
1.33
%
MBS
3,290,547
3,359,598
3,650,737
13,830
14,339
15,677
1.67
%
1.71
%
1.70
%
FHLB stock
33,985
34,032
34,666
804
818
768
9.39
%
9.64
%
8.79
%
Other investments
19,726
17,637
14,294
73
244
61
1.47
%
5.55
%
1.69
%
Total investments(3)
6,509,789
6,698,609
7,325,226
31,947
33,408
36,877
1.95
%
2.00
%
2.00
%
Residential mortgage loans
2,816,343
2,807,639
2,800,675
41,505
40,686
39,640
5.85
%
5.81
%
5.62
%
Construction loans
195,001
245,219
183,507
4,417
4,955
4,937
8.99
%
8.10
%
10.67
%
C&I and commercial mortgage loans
5,616,658
5,528,607
5,261,849
102,768
100,919
93,711
7.26
%
7.32
%
7.07
%
Finance leases
885,807
873,908
808,480
17,290
17,255
15,802
7.74
%
7.92
%
7.75
%
Consumer loans
2,840,870
2,817,443
2,728,945
81,281
79,888
77,125
11.35
%
11.37
%
11.21
%
Total loans(4)(5)
12,354,679
12,272,816
11,783,456
247,261
243,703
231,215
7.94
%
7.96
%
7.78
%
Total interest-earning assets
$
18,864,468
$
18,971,425
$
19,108,682
$
279,208
$
277,111
$
268,092
5.87
%
5.86
%
5.57
%
Interest-bearing liabilities:
Time deposits
$
3,057,918
$
3,002,159
$
2,708,297
$
27,768
$
26,588
$
19,852
3.60
%
3.55
%
2.91
%
Brokered CDs
600,319
676,421
318,831
7,656
8,590
3,830
5.06
%
5.09
%
4.77
%
Other interest-bearing deposits
7,429,163
7,528,378
7,956,856
28,280
28,493
30,616
1.51
%
1.52
%
1.53
%
Securities sold under agreements to
repurchase
-
-
26,254
-
-
359
0.00
%
0.00
%
5.43
%
Advances from the FHLB
500,000
500,000
500,000
5,672
5,610
5,675
4.50
%
4.50
%
4.50
%
Other borrowings
155,722
161,700
161,700
3,235
3,336
3,345
8.24
%
8.27
%
8.21
%
Total interest-bearing liabilities
$
11,743,122
$
11,868,658
$
11,671,938
$
72,611
$
72,617
$
63,677
2.45
%
2.45
%
2.16
%
Net interest income
$
206,597
$
204,494
$
204,415
Interest rate spread
3.42
%
3.41
%
3.41
%
Net interest margin
4.34
%
4.32
%
4.24
%
(1)
Non-GAAP financial measures reported on a
tax-equivalent basis. The tax-equivalent yield was estimated by
dividing the interest rate spread on exempt assets by 1 less the
Puerto Rico statutory tax rate of 37.5% and adding to it the cost
of interest-bearing liabilities. When adjusted to a tax-equivalent
basis, yields on taxable and exempt assets are comparable. Changes
in the fair value of derivative instruments are excluded from
interest income because the changes in valuation do not affect
interest paid or received. Refer to Non-GAAP Disclosures - Non-GAAP
Financial Measures and Table 4 above for additional information and
a reconciliation of these measures.
(2)
Government obligations include debt issued
by government-sponsored agencies.
(3)
Unrealized gains and losses on
available-for-sale debt securities are excluded from the average
volumes.
(4)
Average loan balances include the average
of non-performing loans.
(5)
Interest income on loans includes $3.2
million, $3.1 million, and $2.9 million, for the quarters ended
September 30, 2024, June 30, 2024, and September 30, 2023,
respectively, of income from prepayment penalties and late fees
related to the Corporation’s loan portfolio.
Table 6 – Year-to-Date Statement of Average Interest-Earning
Assets and Average Interest-Bearing Liabilities (On a
Tax-Equivalent Basis)
Average Volume
Interest Income (1) /
Expense
Average Rate (1)
Nine-Month Period Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
(Dollars in thousands)
Interest-earning assets:
Money market and other short-term
investments
$
615,679
$
611,308
$
25,096
$
23,486
5.43
%
5.14
%
Government obligations (2)
2,607,706
2,878,603
26,458
31,153
1.35
%
1.45
%
MBS
3,366,866
3,756,654
43,407
52,160
1.72
%
1.86
%
FHLB stock
34,217
37,234
2,476
1,969
9.64
%
7.07
%
Other investments
17,978
13,729
383
258
2.84
%
2.51
%
Total investments (3)
6,642,446
7,297,528
97,820
109,026
1.96
%
2.00
%
Residential mortgage loans
2,811,447
2,814,667
122,664
119,298
5.81
%
5.67
%
Construction loans
219,601
159,914
13,909
10,516
8.44
%
8.79
%
C&I and commercial mortgage loans
5,550,259
5,207,216
302,761
268,886
7.27
%
6.90
%
Finance leases
874,508
771,366
51,672
44,325
7.87
%
7.68
%
Consumer loans
2,822,909
2,679,261
240,809
222,531
11.36
%
11.10
%
Total loans (4) (5)
12,278,724
11,632,424
731,815
665,556
7.94
%
7.65
%
Total interest-earning assets
$
18,921,170
$
18,929,952
$
829,635
$
774,582
5.84
%
5.47
%
Interest-bearing liabilities:
Time deposits
$
2,984,413
$
2,522,061
$
78,766
$
46,301
3.52
%
2.45
%
Brokered CDs
675,226
273,586
25,926
9,178
5.11
%
4.49
%
Other interest-bearing deposits
7,497,046
7,674,759
85,708
70,308
1.52
%
1.22
%
Securities sold under agreements to
repurchase
-
72,648
-
2,756
0.00
%
5.07
%
Advances from the FHLB
500,000
553,993
16,892
18,899
4.50
%
4.56
%
Other borrowings
159,693
174,307
9,921
10,135
8.28
%
7.77
%
Total interest-bearing liabilities
$
11,816,378
$
11,271,354
$
217,213
$
157,577
2.45
%
1.87
%
Net interest income
$
612,422
$
617,005
Interest rate spread
3.39
%
3.60
%
Net interest margin
4.31
%
4.36
%
(1)
Non-GAAP financial measures reported on a
tax-equivalent basis. The tax-equivalent yield was estimated by
dividing the interest rate spread on exempt assets by 1 less the
Puerto Rico statutory tax rate of 37.5% and adding to it the cost
of interest-bearing liabilities. When adjusted to a tax-equivalent
basis, yields on taxable and exempt assets are comparable. Changes
in the fair value of derivative instruments are excluded from
interest income because the changes in valuation do not affect
interest paid or received. Refer to Non-GAAP Disclosures - Non-GAAP
Financial Measures and Table 4 above for additional information and
a reconciliation of these measures.
(2)
Government obligations include debt issued
by government-sponsored agencies.
(3)
Unrealized gains and losses on
available-for-sale debt securities are excluded from the average
volumes.
(4)
Average loan balances include the average
of non-performing loans.
(5)
Interest income on loans includes $9.5
million and $8.9 million for the nine-month periods ended September
30, 2024 and 2023, respectively, of income from prepayment
penalties and late fees related to the Corporation's loan
portfolio.
Table 7 – Loan Portfolio by Geography
As of September 30,
2024
Puerto Rico
Virgin Islands
United States
Consolidated
(In thousands)
Residential mortgage loans
$
2,168,590
$
159,088
$
492,469
$
2,820,147
Commercial loans:
Construction loans
173,352
2,001
31,989
207,342
Commercial mortgage loans
1,728,552
68,781
674,547
2,471,880
Commercial and Industrial loans
2,161,688
81,942
961,683
3,205,313
Commercial loans
4,063,592
152,724
1,668,219
5,884,535
Finance leases
893,374
-
-
893,374
Consumer loans
2,770,616
69,751
7,601
2,847,968
Loans held for investment
9,896,172
381,563
2,168,289
12,446,024
Loans held for sale
12,641
-
-
12,641
Total loans
$
9,908,813
$
381,563
$
2,168,289
$
12,458,665
As of June 30, 2024
Puerto Rico
Virgin Islands
United States
Consolidated
(In thousands)
Residential mortgage loans
$
2,163,245
$
161,057
$
485,364
$
2,809,666
Commercial loans:
Construction loans
160,093
3,681
22,183
185,957
Commercial mortgage loans
1,697,939
62,821
662,549
2,423,309
Commercial and Industrial loans
2,176,489
135,456
942,632
3,254,577
Commercial loans
4,034,521
201,958
1,627,364
5,863,843
Finance leases
880,312
-
-
880,312
Consumer loans
2,755,077
68,540
8,070
2,831,687
Loans held for investment
9,833,155
431,555
2,120,798
12,385,508
Loans held for sale
10,392
-
-
10,392
Total loans
$
9,843,547
$
431,555
$
2,120,798
$
12,395,900
As of December 31,
2023
Puerto Rico
Virgin Islands
United States
Consolidated
(In thousands)
Residential mortgage loans
$
2,187,875
$
168,131
$
465,720
$
2,821,726
Commercial loans:
Construction loans
111,664
3,737
99,376
214,777
Commercial mortgage loans
1,725,325
65,312
526,446
2,317,083
Commercial and Industrial loans
2,130,368
119,040
924,824
3,174,232
Commercial loans
3,967,357
188,089
1,550,646
5,706,092
Finance leases
856,815
-
-
856,815
Consumer loans
2,726,457
68,498
5,895
2,800,850
Loans held for investment
9,738,504
424,718
2,022,261
12,185,483
Loans held for sale
7,368
-
-
7,368
Total loans
$
9,745,872
$
424,718
$
2,022,261
$
12,192,851
Table 8 – Non-Performing Assets by Geography
As of September 30,
2024
(In thousands)
Puerto Rico
Virgin Islands
United States
Total
Nonaccrual loans held for investment:
Residential mortgage
$
16,047
$
6,434
$
9,248
$
31,729
Construction
3,687
964
-
4,651
Commercial mortgage
2,734
8,762
-
11,496
Commercial and Industrial
17,131
1,231
-
18,362
Consumer and finance leases
22,763
307
36
23,106
Total nonaccrual loans held for
investment
62,362
17,698
9,284
89,344
OREO
15,715
3,615
-
19,330
Other repossessed property
8,655
186
3
8,844
Other assets (1)
1,567
-
-
1,567
Total non-performing assets (2)
$
88,299
$
21,499
$
9,287
$
119,085
Past due loans 90 days and still accruing
(3)
$
40,458
$
3,152
$
-
$
43,610
As of June 30, 2024
(In thousands)
Puerto Rico
Virgin Islands
United States
Total
Nonaccrual loans held for investment:
Residential mortgage
$
16,895
$
6,446
$
8,055
$
31,396
Construction
3,776
966
-
4,742
Commercial mortgage
2,865
8,871
-
11,736
Commercial and Industrial
26,387
1,274
-
27,661
Consumer and finance leases
20,276
326
36
20,638
Total nonaccrual loans held for
investment
70,199
17,883
8,091
96,173
OREO
17,413
4,202
67
21,682
Other repossessed property
7,330
183
-
7,513
Other assets (1)
1,532
-
-
1,532
Total non-performing assets (2)
$
96,474
$
22,268
$
8,158
$
126,900
Past due loans 90 days and still accruing
(3)
$
44,028
$
3,145
$
-
$
47,173
As of December 31,
2023
(In thousands)
Puerto Rico
Virgin Islands
United States
Total
Nonaccrual loans held for investment:
Residential mortgage
$
18,324
$
6,688
$
7,227
$
32,239
Construction
595
974
-
1,569
Commercial mortgage
3,106
9,099
-
12,205
Commercial and Industrial
13,414
1,169
667
15,250
Consumer and finance leases
21,954
419
71
22,444
Total nonaccrual loans held for
investment
57,393
18,349
7,965
83,707
OREO
28,382
4,287
-
32,669
Other repossessed property
7,857
252
6
8,115
Other assets (1)
1,415
-
-
1,415
Total non-performing assets (2)
$
95,047
$
22,888
$
7,971
$
125,906
Past due loans 90 days and still accruing
(3)
$
53,308
$
6,005
$
139
$
59,452
(1)
Residential pass-through MBS issued by the
PRHFA held as part of the available-for-sale debt securities
portfolio.
(2)
Excludes PCD loans previously accounted
for under ASC Subtopic 310-30 for which the Corporation made the
accounting policy election of maintaining pools of loans as “units
of account” both at the time of adoption of CECL on January 1, 2020
and on an ongoing basis for credit loss measurement. These loans
will continue to be excluded from nonaccrual loan statistics as
long as the Corporation can reasonably estimate the timing and
amount of cash flows expected to be collected on the loan pools.
The portion of such loans contractually past due 90 days or more
amounted to $6.5 million as of September 30, 2024 (June 30, 2024 -
$7.4 million; December 31, 2023 - $8.3 million).
(3)
These include rebooked loans, which were
previously pooled into GNMA securities, amounting to $6.6 million
as of September 30, 2024 (June 30, 2024 - $6.8 million; December
31, 2023 - $7.9 million). Under the GNMA program, the Corporation
has the option but not the obligation to repurchase loans that meet
GNMA's specified delinquency criteria. For accounting purposes, the
loans subject to the repurchase option are required to be reflected
on the financial statements with an offsetting liability.
Table 9 – Allowance for Credit Losses on Loans and Finance
Leases
Quarter Ended
Nine-Month Period
Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
(Dollars in thousands)
Allowance for credit losses on loans and
finance leases, beginning of period
$
254,532
$
263,592
$
267,058
$
261,843
$
260,464
Impact of adoption of ASU 2022-02
-
-
-
-
2,116
Provision for credit losses on loans and
finance leases expense
16,470
11,930
10,643
41,317
47,669
Net recoveries (charge-offs) of loans and
finance leases:
Residential mortgage
76
(45
)
35
(213
)
(840
)
Construction
11
14
1,459
35
1,893
Commercial mortgage
41
393
74
474
192
Commercial and Industrial
(1,140
)
626
152
4,146
(6,094
)
Consumer loans and finance leases
(22,994
)
(21,978
)
(15,806
)
(60,606
)
(1)
(41,785
)
Net charge-offs
(24,006
)
(20,990
)
(14,086
)
(56,164
)
(1)
(46,634
)
Allowance for credit losses on loans and
finance leases, end of period
$
246,996
$
254,532
$
263,615
$
246,996
$
263,615
Allowance for credit losses on loans and
finance leases to period end total loans held for investment
1.98
%
2.06
%
2.21
%
1.98
%
2.21
%
Net charge-offs (annualized) to average
loans outstanding during the period
0.78
%
0.69
%
0.48
%
0.61
%
0.54
%
Provision for credit losses on loans and
finance leases to net charge-offs during the period
0.69x
0.57x
0.76x
0.74x
1.02x
(1)
For the nine-month period ended September
30 2024, includes a recovery totaling $10.0 million associated with
the aforementioned bulk sale of fully charged-off consumer loans
and finance leases.
Table 10 – Annualized Net (Recoveries) Charge-Offs to Average
Loans
Quarter Ended
Nine-Month Period
Ended
September 30, 2024
June 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Residential mortgage
-0.01%
0.01%
-0.01%
0.01%
0.04%
Construction
-0.02%
-0.02%
-3.18%
-0.02%
-1.58%
Commercial mortgage
-0.01%
-0.07%
-0.01%
-0.03%
-0.01%
Commercial and Industrial
0.14%
-0.08%
-0.02%
-0.17%
0.28%
Consumer loans and finance leases
2.47%
2.38%
1.79%
2.19%
(1)
1.61%
Total loans
0.78%
0.69%
0.48%
0.61%
(1)
0.54%
(1)
The $10.0 million recovery associated with
the aforementioned bulk sale reduced the consumer loans and finance
leases and total net charge-offs to related average loans ratio for
the for the nine-month period ended September 30, 2024 by 36 basis
points and 11 basis points, respectively.
Table 11 – Deposits
As of
September 30, 2024
June 30, 2024
December 31, 2023
(In thousands)
Time deposits
$
3,067,261
$
3,037,120
$
2,833,730
Interest-bearing saving and checking
accounts
7,484,348
7,461,003
7,534,800
Non-interest-bearing deposits
5,275,733
5,406,054
5,404,121
Total deposits, excluding brokered CDs
(1)
15,827,342
15,904,177
15,772,651
Brokered CDs
520,048
624,779
783,334
Total deposits
$
16,347,390
$
16,528,956
$
16,555,985
Total deposits, excluding brokered CDs and
government deposits
$
12,669,900
$
12,706,646
$
12,600,719
(1)
As of each of September 30, 2024, June 30,
2024 and December 31, 2023, government deposits amounted to $3.2
billion.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241023947356/en/
First BanCorp. Ramon Rodriguez Senior Vice President
Corporate Strategy and Investor Relations
ramon.rodriguez@firstbankpr.com (787) 729-8200 Ext. 82179
First Bancorp (NYSE:FBP)
過去 株価チャート
から 10 2024 まで 11 2024
First Bancorp (NYSE:FBP)
過去 株価チャート
から 11 2023 まで 11 2024
