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 $75.7
million, or $0.46 per diluted share, for the fourth quarter of
2024, compared to $73.7 million, or $0.45 per diluted share, for
the third quarter of 2024, and $79.5 million, or $0.46 per diluted
share, for the fourth quarter of 2023. For the year ended December
31, 2024, the Corporation reported a net income of $298.7 million,
or $1.81 per diluted share, compared to $302.9 million, or $1.71
per diluted share, for the year ended December 31, 2023.
Aurelio Alemán, President and Chief
Executive Officer of First BanCorp, commented: “We are very
pleased to conclude the year with strong fourth quarter results
underscored by solid loan growth across all business segments,
encouraging core customer deposit trends, and solid profitability
metrics. We earned $76 million in net income and grew pre-tax
pre-provision income by 5% on a linked quarter basis driven by net
interest income expansion and disciplined expense management.
Consistent with our strategy, steady core
deposit inflows during the quarter enabled us to reinvest a portion
of our investment portfolio cash flows into higher yielding
securities at a very attractive spread to our run-off yield, while
growing the loan book by $303 million and paying down higher-cost
funding sources, including the redemption of $50 million in junior
subordinated debentures.
Our solid performance this quarter caps a
year of record results for the franchise. We registered record
revenues and posted a return on average assets above 1.5% for the
third consecutive year. The loan portfolio expanded by 4.7% or $569
million, we added $267 million in core customer deposits and
distributed over 100% of earnings in the form of capital deployment
actions for the fourth consecutive year. These results were
complemented by ongoing community outreach initiatives aligned with
our commitment to support reconstruction efforts and facilitate the
development of affordable housing projects and the modernization of
critical infrastructure in our main market. We are achieving the
targets we set to measure our strategy's success and are seeing the
benefit of the investments we have made in technology to accelerate
our growth and improve how we serve our communities.
As we look to 2025, the operating
environment seems conducive to another year of positive performance
and organic capital generation. Given this backdrop, and our strong
capital levels and improved earnings profile, we are pleased to
announce that our Board approved a 13% increase in our common stock
dividend. We remain focused on deploying our capital in a
thoughtful manner by prioritizing responsible organic growth,
executing reasonable share repurchase opportunities, and
maintaining a sustainable dividend payout policy.”
Q4
Q3
Q4
Year
2024
2024
2023
2024
2023
Financial Highlights
(1)
Net interest income
$
209,267
$
202,064
$
196,682
$
807,479
$
797,110
Provision for credit losses
20,904
15,245
18,812
59,921
60,940
Non-interest income
32,199
32,502
33,609
130,722
132,694
Non-interest expenses
124,533
122,935
126,605
487,073
471,428
Income before income taxes
96,029
96,386
84,874
391,207
397,436
Income tax expense
20,328
22,659
5,385
92,483
94,572
Net income
$
75,701
$
73,727
$
79,489
$
298,724
$
302,864
Q4
Q3
Q4
Year
2024
2024
2023
2024
2023
Selected Financial Data
(1)
Net interest margin
4.33
%
4.25
%
4.14
%
4.25
%
4.22
%
Efficiency ratio
51.57
%
52.41
%
54.98
%
51.92
%
50.70
%
Earnings per share - diluted
$
0.46
$
0.45
$
0.46
$
1.81
$
1.71
Book value per share
$
10.19
$
10.38
$
8.85
$
10.19
$
8.85
Tangible book value per share (2)
$
9.91
$
10.09
$
8.54
$
9.91
$
8.54
Return on average equity
17.77
%
18.31
%
23.69
%
19.09
%
21.86
%
Return on average assets
1.56
%
1.55
%
1.70
%
1.58
%
1.62
%
Results for the Fourth Quarter
of 2024 compared to the Third Quarter of 2024
Profitability
Net income – $75.7 million, or
$0.46 per diluted share compared to $73.7 million, or $0.45 per
diluted share. Income before income taxes – $96.0
million compared to $96.4 million. Adjusted pre-tax,
pre-provision income (Non-GAAP)(2) – $116.9 million
compared to $111.6 million. Net interest income – $209.3
million compared to $202.1 million. Net interest margin increased
to 4.33%, compared to 4.25%. Provision for credit losses –
$20.9 million compared to $15.2 million. The increase in provision
reflects loan growth, mainly in the commercial loan portfolio. The
economic outlook continues to reflect a positive outlook which
impacted the provision levels but to a lesser extent than in the
previous quarter. Non-interest income – $32.2 million
compared to $32.5 million. Non-interest expenses – $124.5
million compared to $122.9 million. The efficiency ratio was
51.57%, compared to 52.41%. Income taxes – $20.3 million
compared to $22.7 million. The decrease in income tax expense was
due to a lower effective tax rate, in part due to a higher
proportion of exempt income to taxable income.
Balance Sheet
Total loans – grew by $303.2
million to $12.8 billion, primarily reflecting growth in the
commercial loan portfolio across all regions. Total loan
originations, other than credit card utilization activity, of $1.5
billion, up $352.1 million, mainly in commercial and construction
loans. Core deposits (other than brokered and government
deposits) – increased by $197.9 million to $12.9 billion, which
reflects growth of $106.7 million in the Puerto Rico region and
$87.3 million in the Florida region. This increase includes a
$296.8 million increase in non-interest-bearing deposits.
Government deposits (fully collateralized) – increased by
$367.9 million to $3.5 billion, mainly in the Puerto Rico region.
Brokered certificates of deposits (“CDs”) – decreased by
$41.9 million to $478.1 million, reflecting a $129.9 million
decrease in the Puerto Rico region, partially offset by an $88.0
million increase in the Florida region.
Asset Quality
Allowance for credit losses (“ACL”)
coverage ratio – amounted to 1.91%, compared to 1.98%.
Annualized net charge-offs to average loans ratio remained
flat at 0.78%, reflecting an increase in consumer loans and finance
leases net charge-offs which was offset by a decrease in commercial
and construction net charge-offs. Non-performing assets –
decreased by $0.8 million to $118.3 million, compared to $119.1
million.
Liquidity and
Capital
Liquidity – Cash and cash
equivalents amounted to $1.2 billion, compared to $685.4 million.
When adding $1.2 billion of free high-quality liquid securities
that could be liquidated or pledged within one day and $912.4
million in available lending capacity at the Federal Home Loan Bank
(“FHLB”), available liquidity amounted to 17.27% of total assets,
compared to 18.43%. 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
18.02%, 16.32%, 16.32%, and 11.07%, respectively, as of December
31, 2024. On a non-GAAP basis, the tangible common equity ratio(2)
decreased to 8.44% when compared to 8.79%, in part due to a
decrease 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 non-GAAP financial
measures. Refer to Non-GAAP Disclosures - Non-GAAP Financial
Measures for the definition of and additional information about
these non-GAAP financial measures.
NET INTEREST INCOME
The following table sets forth information concerning net
interest income for the last five quarters:
Quarter Ended
(Dollars in thousands)
December 31, 2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
Net Interest Income
Interest income
$
279,728
$
274,675
$
272,245
$
268,505
$
265,481
Interest expense
70,461
72,611
72,617
71,985
68,799
Net interest income
$
209,267
$
202,064
$
199,628
$
196,520
$
196,682
Average Balances
Loans and leases
$
12,584,143
$
12,354,679
$
12,272,816
$
12,207,840
$
12,004,881
Total securities, other short-term
investments and interest-bearing cash balances
6,592,411
6,509,789
6,698,609
6,720,395
6,835,407
Average interest-earning assets
$
19,176,554
$
18,864,468
$
18,971,425
$
18,928,235
$
18,840,288
Average interest-bearing liabilities
$
11,911,904
$
11,743,122
$
11,868,658
$
11,838,159
$
11,665,459
Average Yield/Rate
Average yield on interest-earning assets -
GAAP
5.79%
5.78%
5.76%
5.69%
5.59%
Average rate on interest-bearing
liabilities - GAAP
2.35%
2.45%
2.45%
2.44%
2.34%
Net interest spread - GAAP
3.44%
3.33%
3.31%
3.25%
3.25%
Net interest margin - GAAP
4.33%
4.25%
4.22%
4.16%
4.14%
Net interest income amounted to $209.3 million for the fourth
quarter of 2024, an increase of $7.2 million, compared to $202.1
million for the third quarter of 2024. The increase in net interest
income reflects the following:
- A $3.2 million increase in interest income from
interest-bearing cash balances, driven by a $349.3 million increase
in the average cash balances, which consisted primarily of deposits
maintained at the Federal Reserve Bank (the “FED”) which more than
compensated for the reduction in the federal funds rate.
- A $1.2 million decrease in interest expense on junior
subordinated debentures mainly due to the full quarter effect of
the $50.0 million redemption of the then-outstanding
trust-preferred securities (“TruPS”) in September 2024.
- A $1.0 million decrease on interest expense on interest-bearing
deposits, consisting of:
- A $1.8 million decrease in interest expense
on brokered CDs, driven by a $115.1 million decrease in the average
balance.
- A $0.8 million decrease in interest expense
on time deposits, excluding brokered CDs, mainly associated with
new issuances and renewals at lower interest rates when compared to
the third quarter of 2024. The average cost of non-brokered time
deposits in the fourth quarter of 2024 decreased 9 basis points to
3.51% when compared to the previous quarter.
Partially offset by:
- A $1.6 million increase in interest expense
on interest-bearing checking and savings accounts, driven by a
$348.2 million increase in the average balance.
- A $1.0 million increase in interest income on loans, mainly
driven by:
- A $0.5 million increase in interest income
on commercial and construction loans, driven by a $192.1 million
increase in the average balance of this portfolio and higher
collections from late charges and prepayment penalties, partially
offset by the effect of lower market interest rates on the downward
repricing of variable-rate loans.
As of December 31, 2024, the interest rate on
approximately 53% of the Corporation’s commercial and construction
loans was tied to variable rates, with 33% based upon SOFR of 3
months or less, 12% based upon the Prime rate index, and 8% based
on other indexes. For the quarter ended December 31, 2024, the
average one-month SOFR decreased 62 basis points, the average
three-month SOFR decreased 58 basis points, and the average Prime
rate decreased 62 basis points, compared to the average rates for
such indexes for the previous quarter.
- A $0.4 million increase in interest income
on consumer loans and finance leases, in part due to a $21.3
million increase in the average balance, mainly in the auto loans
and finance leases portfolios, partially offset by the downward
repricing in the credit cards portfolio.
- A $0.8 million increase in interest income on debt securities,
driven by the effect during the fourth quarter of 2024 of $367.5
million in maturities of debt securities with an average yield of
0.65% being partially replenished with $222.1 million in purchases
of U.S. agencies mortgage-backed securities (“MBS”) with an average
yield of 5.40%.
Net interest margin for the fourth quarter of 2024 was 4.33%, an
8 basis points increase when compared to the third quarter of 2024,
mostly reflecting a change in asset mix resulting from an increase
in interest-bearing cash balances deposited at the FED as a result
of an increase in deposits, and the deployment of cash flows from
lower-yielding investment securities to fund loan growth and
purchases of higher-yielding investment securities, while
simultaneously repaying higher-rate brokered CDs and redeeming the
aforementioned junior subordinated debentures. These factors were
partially offset by the downward repricing of variable-rate
commercial loans and a lower federal funds rate on cash deposited
at the FED.
NON-INTEREST INCOME
The following table sets forth information concerning
non-interest income for the last five quarters:
Quarter Ended
December 31,2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31,2023
(In thousands)
Service charges and fees on deposit
accounts
$
9,748
$
9,684
$
9,725
$
9,662
$
9,662
Mortgage banking activities
3,183
3,199
3,419
2,882
2,094
Insurance commission income
2,274
3,003
2,786
5,507
2,379
Card and processing income
12,155
11,768
11,523
11,312
11,015
Other non-interest income
4,839
4,848
4,585
4,620
8,459
Non-interest income
$
32,199
$
32,502
$
32,038
$
33,983
$
33,609
Non-interest income decreased by $0.3 million to $32.2 million
for the fourth quarter of 2024, compared to $32.5 million for the
third quarter of 2024, mainly due to:
- A $0.7 million decrease in insurance commission income related
to less production of insurance policies during the fourth quarter
of 2024.
Partially offset by:
- A $0.4 million increase in card and processing income, mainly
due to credit card incentives recognized during the fourth quarter
of 2024.
NON-INTEREST EXPENSES
The following table sets forth information concerning
non-interest expenses for the last five quarters:
Quarter Ended
December 31,2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31,2023
(In thousands)
Employees' compensation and benefits
$
59,652
$
59,081
$
57,456
$
59,506
$
55,584
Occupancy and equipment
22,771
22,424
21,851
21,381
21,847
Business promotion
5,328
4,116
4,359
3,842
6,725
Professional service fees:
Collections, appraisals and other
credit-related fees
956
688
1,149
1,366
952
Outsourcing technology services
7,499
7,771
7,698
7,469
7,003
Other professional fees
3,355
4,079
3,584
3,841
3,295
Taxes, other than income taxes
5,994
5,665
5,408
5,129
5,535
FDIC deposit insurance
2,236
2,164
2,316
3,102
8,454
Other insurance and supervisory fees
1,967
2,092
2,287
2,293
2,308
Net gain on OREO operations
(1,074
)
(1,339
)
(3,609
)
(1,452
)
(1,005
)
Credit and debit card processing
expenses
7,147
7,095
7,607
5,751
7,360
Communications
2,251
2,170
2,261
2,097
2,134
Other non-interest expenses
6,451
6,929
6,315
6,598
6,413
Total non-interest expenses
$
124,533
$
122,935
$
118,682
$
120,923
$
126,605
Non-interest expenses amounted to $124.5 million in the fourth
quarter of 2024, an increase of $1.6 million, from $122.9 million
in the third quarter of 2024. The $1.6 million increase reflects
the following significant variances:
- A $1.2 million increase in business promotion expenses, mainly
as a result of increases in events and sponsorships and public
relations activities associated with seasonal campaign
efforts.
- A $0.6 million increase in employees’ compensation and benefits
expenses, in part due to increases in incentives and benefits.
- A $0.3 million increase in occupancy and equipment expenses,
mainly due to accelerated rent expense recognized due to the
closure of a branch in the Puerto Rico region during the fourth
quarter of 2024.
- A $0.3 million decrease in net gain on other real estate owned
(“OREO”) operations, driven by a write-down of a commercial
property in the Puerto Rico region and lower rental income.
Partially offset by:
- A $0.7 million decrease in professional services fees, mainly
due to a decrease in consulting fees driven by technology projects
completed during the third quarter of 2024.
- A $0.4 million decrease in other non-interest expenses, mainly
due to lower charges for operational and fraud losses.
INCOME TAXES
The Corporation recorded an income tax expense of $20.3 million
for the fourth quarter of 2024, compared to $22.7 million for the
third quarter of 2024. The decrease in income tax expense was due
to a lower effective tax rate, in part due to a higher proportion
of exempt income to taxable income.
The Corporation’s annual effective tax rate, excluding entities
with pre-tax losses from which a tax benefit cannot be recognized
and discrete items, was 23.0% for the fourth quarter of 2024,
compared to an estimated annual effective tax rate of 23.7% for the
third quarter of 2024. As of December 31, 2024, the Corporation had
a deferred tax asset of $136.4 million, net of a valuation
allowance of $119.1 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)
December 31,2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31,2023
Nonaccrual loans held for investment:
Residential mortgage
$
31,949
$
31,729
$
31,396
$
32,685
$
32,239
Construction
1,365
4,651
4,742
1,498
1,569
Commercial mortgage
10,851
11,496
11,736
11,976
12,205
Commercial and industrial (“C&I”)
20,514
18,362
27,661
25,067
15,250
Consumer and finance leases
22,788
23,106
20,638
21,739
22,444
Total nonaccrual loans held for
investment
$
87,467
$
89,344
$
96,173
$
92,965
$
83,707
OREO
17,306
19,330
21,682
28,864
32,669
Other repossessed property
11,859
8,844
7,513
6,226
8,115
Other assets (1)
1,620
1,567
1,532
1,551
1,415
Total non-performing assets (2)
$
118,252
$
119,085
$
126,900
$
129,606
$
125,906
Past due loans 90 days and still accruing
(3)
$
42,390
$
43,610
$
47,173
$
57,515
$
59,452
Nonaccrual loans held for investment to
total loans held for investment
0.69
%
0.72
%
0.78
%
0.76
%
0.69
%
Nonaccrual loans to total loans
0.69
%
0.72
%
0.78
%
0.75
%
0.69
%
Non-performing assets to total assets
0.61
%
0.63
%
0.67
%
0.69
%
0.67
%
(1) Residential pass-through 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
$6.2 million as of December 31, 2024 (September 30, 2024 - $6.5
million; June 30, 2024 - $7.4 million; March 31, 2024 - $8.6
million; December 31, 2023 - $8.3 million).
(3) These include rebooked loans,
which were previously pooled into Government National Mortgage
Association (“GNMA”) securities, amounting to $5.7 million as of
December 31, 2024 (September 30, 2024- $6.6 million; June 30, 2024
- $6.8 million; March 31, 2024 - $8.8 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.
Variances in credit quality metrics:
- Total non-performing assets decreased by $0.8 million to $118.3
million as of December 31, 2024, compared to $119.1 million as of
September 30, 2024. Total nonaccrual loans held for investment
decreased by $1.9 million to $87.4 million as of December 31, 2024,
compared to $89.3 million as of September 30, 2024.
The decrease in non-performing assets was driven by:
- A $2.0 million decrease in the OREO
portfolio balance, mainly attributable to the sale of residential
properties in the Puerto Rico region and the sale of a $0.6 million
construction property in the Puerto Rico region.
- A $1.8 million decrease in nonaccrual
commercial and construction loans, mainly due to repayments and a
$0.5 million charge-off recorded on a nonaccrual C&I loan in
the Puerto Rico region.
- A $0.3 million decrease in nonaccrual
consumer loans and finance leases.
Partially offset by:
- A $3.0 million increase in other
repossessed property, consisting of repossessed automobiles.
- A $0.2 million increase in nonaccrual
residential mortgage loans.
- Inflows to nonaccrual loans held for investment were $37.1
million in the fourth quarter of 2024, a decrease of $1.6 million,
when compared to the third quarter of 2024. Inflows to nonaccrual
consumer loans were $31.5 million in the fourth quarter of 2024, a
decrease of $1.5 million compared to inflows of $33.0 million in
the third quarter of 2024. Inflows to nonaccrual residential
mortgage loans were $4.2 million in the fourth quarter of 2024, a
decrease of $0.5 million compared to inflows of $4.7 million in the
third quarter of 2024. Inflows to nonaccrual commercial and
construction loans were $1.4 million in the fourth quarter of 2024,
an increase of $0.4 million compared to inflows of $1.0 million in
the third quarter of 2024. See Early Delinquency below for
additional information.
- Adversely classified commercial loans increased by $9.6 million
to $87.3 million as of December 31, 2024, driven by the downgrades
of two commercial mortgage loans in the Florida region amounting to
$24.4 million, partially offset by the upgrade of a $12.2 million
C&I loan in the Puerto Rico region.
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 $153.0 million as of December
31, 2024, an increase of $9.6 million, compared to $143.4 million
as of September 30, 2024. The variances by major portfolio are as
follows:
- Consumer loans in early delinquency increased by $14.1 million
to $118.0 million, mainly in the auto loans and finance leases
portfolios.
- Residential mortgage loans in early delinquency increased by
$0.9 million to $32.8 million.
Partially offset by:
- Commercial and construction loans in early delinquency
decreased by $5.4 million to $2.2 million, mainly due to the
refinancing of two matured C&I loans during the fourth quarter
of 2024.
Allowance for Credit Losses
The following table summarizes the activity of the ACL for
on-balance sheet and off-balance sheet exposures during the fourth
and third quarters of 2024:
Quarter Ended December
31,2024
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
$
40,651
$
62,649
$
143,696
$
246,996
$
3,461
$
1,119
$
526
$
252,102
Provision for credit losses - expense
(benefit)
308
(4,083
)
25,319
21,544
(318
)
(317
)
(5
)
20,904
Net charge-offs
(305
)
(29
)
(24,264
)
(24,598
)
-
-
-
(24,598
)
Allowance for credit losses, end of
period
$
40,654
$
58,537
$
144,751
$
243,942
$
3,143
$
802
$
521
$
248,408
Amortized cost of loans and finance
leases
$
2,828,431
$
6,160,418
$
3,757,707
$
12,746,556
Allowance for credit losses on loans to
amortized cost
1.44
%
0.95
%
3.85
%
1.91
%
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
%
Allowance for Credit Losses for Loans and Finance Leases
As of December 31, 2024, the ACL for loans and finance leases
was $243.9 million, a decrease of $3.1 million, from $247.0 million
as of September 30, 2024. The decrease was mainly related to the
ACL for commercial and construction loans, which decreased by $4.1
million, mainly due to releases associated with the improved
financial condition of certain commercial borrowers and an
improvement on the economic outlook of certain macroeconomic
variables, particularly in variables associated with commercial
real estate property performance, partially offset by loan growth.
Meanwhile, the ACL for consumer loans increased by $1.0 million,
driven by loan growth, mainly in auto loans and finance leases, and
higher charge-off and delinquency levels, partially offset by
improvements in macroeconomic variables, mainly in the projection
of the unemployment rate.
The provision for credit losses on loans and finance leases was
$21.5 million for the fourth quarter of 2024, compared to $16.5
million in the third quarter of 2024, as detailed below:
- Provision for credit losses for the residential mortgage loan
portfolio was an expense of $0.3 million for the fourth quarter of
2024, compared to a net benefit of $5.5 million for the third
quarter of 2024. The net benefit recorded during the third quarter
of 2024 was driven by updated macroeconomic variables, mainly in
the projection of the unemployment rate.
- Provision for credit losses for the commercial and construction
loan portfolios was a net benefit of $4.1 million for the fourth
quarter of 2024, compared to a net benefit of $6.4 million for the
third quarter of 2024. The decrease in net benefit during the
fourth quarter of 2024 was driven by loan growth.
- Provision for credit losses for the consumer loan and finance
lease portfolios was an expense of $25.3 million for the fourth
quarter of 2024, compared to an expense of $28.4 million for the
third quarter of 2024. The decrease in provision expense was driven
by the aforementioned changes in macroeconomic variables, partially
offset by loan growth and higher charge-off and delinquency
levels.
The ratio of the ACL for loans and finance leases to total loans
held for investment was 1.91% as of December 31, 2024, compared to
1.98% as of September 30, 2024. The ratio of the total ACL for
loans and finance leases to nonaccrual loans held for investment
was 278.90% as of December 31, 2024, compared to 276.46% as of
September 30, 2024.
Net Charge-Offs
The following table presents ratios of net charge-offs
(recoveries) to average loans held-in-portfolio for the last five
quarters:
Quarter Ended
December 31,2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31,2023
Residential mortgage
0.04%
-0.01%
0.01%
0.03%
-0.04%
Construction
-0.17%
-0.02%
-0.02%
-0.02%
0.01%
Commercial mortgage
-0.01%
-0.01%
-0.07%
-0.01%
0.09%
Commercial and Industrial
0.02%
0.14%
-0.08%
-0.59%
0.00%
Consumer loans and finance leases
2.59%
2.47%
2.38%
1.70%
(1)
2.26%
Total loans
0.78%
0.78%
0.69%
0.37%
(1)
0.69%
(1)
The $10.0 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 $24.6 million for the fourth quarter of
2024, or an annualized 0.78% of average loans, compared to $24.0
million, or an annualized 0.78% of average loans, in the third
quarter of 2024. The $0.6 million increase in net charge-offs was
driven by a $1.3 million increase in net charge-offs in consumer
loans and finance leases and a $0.4 million increase in net
charge-offs in the residential mortgage loan portfolio, partially
offset by a $1.2 million charge-off recorded on the sale of a
nonaccrual C&I loan in the third quarter of 2024.
Allowance for Credit Losses for Unfunded Loan Commitments
As of December 31, 2024, the ACL for off-balance sheet credit
exposures decreased to $3.1 million, compared to $3.5 million as of
September 30, 2024, driven by an improvement on the economic
outlook of certain macroeconomic variables, particularly in
variables associated with commercial real estate property
performance.
Allowance for Credit Losses for Debt Securities
As of December 31, 2024, the ACL for debt securities was $1.3
million, of which $0.8 million related to Puerto Rico municipal
bonds classified as held-to-maturity, compared to $1.6 million and
$1.1 million, respectively, as of September 30, 2024. The $0.3
million decrease in the ACL of Puerto Rico municipal bonds was
mainly related to updated financial information of a certain bond
issuer received during the fourth quarter of 2024.
STATEMENT OF FINANCIAL CONDITION
Total assets were approximately $19.3 billion as of December 31,
2024, up $433.8 million from September 30, 2024.
The following variances within the main components of total
assets are noted:
- A $474.0 million increase in cash and cash equivalents, mainly
related to an overall increase in deposits and the net cash inflows
from the investment securities portfolio, partially offset by loan
growth funding and the redemption of $50.0 million in outstanding
TruPS. The redemption of TruPS was aligned with the Corporation’s
plan for optimization of its capital structure while reducing
financing costs.
- A $334.9 million decrease in investment securities, driven by
the aforementioned maturities of $367.5 million, $105.2 million in
principal repayments of U.S. agencies MBS and debentures, and the
$82.3 million decrease in the fair value of available-for-sale debt
securities attributable to changes in market interest rates,
partially offset by the aforementioned purchases of U.S. agencies
MBS totaling $222.1 million during the fourth quarter of 2024.
- A $303.2 million increase in total loans. The growth consisted
of increases of $127.9 million in the Puerto Rico region, $126.9
million in the Florida region, and $48.4 million in the Virgin
Islands region. On a portfolio basis, the variance consisted of
increases of $275.9 million in commercial and construction loans;
$16.4 million in consumer loans, primarily auto loans and finance
leases in the Puerto Rico region, partially offset by a decrease in
personal loans; and $10.9 million in residential mortgage loans.
The increase in commercial and construction loans reflects growth
of $114.0 million in the Florida region, $110.9 million in the
Puerto Rico region, and $51.0 million in the Virgin Islands
region.
Total loan originations, including
refinancings, renewals, and draws from existing commitments
(excluding credit card utilization activity), amounted to $1.5
billion in the fourth quarter of 2024, an increase of $352.1
million compared to the third quarter of 2024.
Total loan originations in the Puerto Rico
region amounted to $1.2 billion in the fourth quarter of 2024,
compared to $902.2 million in the third quarter of 2024. The $272.1
million increase in total loan originations was mainly in
commercial and construction loans, driven by five C&I
originations totaling $156.5 million, including four disbursements
of lines of credit that increased originations by $136.5 million,
and four commercial mortgage loan originations totaling $152.8
million, each in excess of $20 million.
Total loan originations in the Virgin Islands
region amounted to $65.1 million in the fourth quarter of 2024,
compared to $34.7 million in the third quarter of 2024. The $30.4
million increase in total loan originations was mainly in
commercial and construction loans related to higher utilization of
a government line of credit.
Total loan originations in the Florida region
amounted to $298.1 million in the fourth quarter of 2024, compared
to $248.4 million in the third quarter of 2024. The $49.7 million
increase in total loan originations was mainly related to a $46.5
million increase in commercial and construction loans.
Total liabilities were approximately $17.6 billion as of
December 31, 2024, an increase of $465.4 million from September 30,
2024.
The following variances within the main components of total
liabilities are noted:
- Total deposits increased $523.9 million consisting of:
- A $367.9 million increase in government deposits, which
reflects growth of $385.5 million in the Puerto Rico region,
partially offset by a decrease of $19.7 million in the Virgin
Islands region.
- A $197.9 million increase in deposits, excluding brokered CDs
and government deposits, which reflects growth of $106.7 million in
the Puerto Rico region and $87.3 million in the Florida region. The
increase in such deposits includes a $296.8 million increase in
non-interest-bearing deposits.
Partially offset by:
- A $41.9 million decrease in brokered CDs, reflecting a $129.9
million decrease in the Puerto Rico region, partially offset by an
$88.0 million increase in the Florida region. The decline reflects
maturing short-term brokered CDs amounting to $174.1 million with
an all-in cost of 5.26% that were paid off during the fourth
quarter of 2024, partially offset by $132.2 million of new
issuances with original average maturities of approximately 1 year
and an all-in cost of 4.14%.
Partially offset by:
- A $50.0 million decrease in other borrowings related to the
aforementioned redemption of outstanding TruPS issued by FBP
Statutory Trust II, a financing trust that is wholly owned by the
Corporation.
Total stockholders’ equity amounted to $1.7 billion as of
December 31, 2024, a decrease of $31.6 million from September 30,
2024, driven by an $82.3 million decrease 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 $26.3 million in common stock dividends
declared in the fourth quarter of 2024, partially offset by the net
income generated in the fourth quarter of 2024.
As of December 31, 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
16.32%, 16.32%, 18.02%, and 11.07%, respectively, as of December
31, 2024, compared to CET1 capital, tier 1 capital, total capital,
and leverage ratios of 16.18%, 16.18%, 18.25%, and 10.96%,
respectively, as of September 30, 2024.
Meanwhile, estimated CET1 capital, tier 1 capital, total capital
and leverage ratios of our banking subsidiary, FirstBank, were
15.76%, 16.51%, 17.76%, and 11.20%, respectively, as of December
31, 2024, compared to CET1 capital, tier 1 capital, total capital
and leverage ratios of 16.00%, 16.76%, 18.01%, and 11.36%,
respectively, as of September 30, 2024.
LIQUIDITY
Cash and cash equivalents increased by $474.0 million to $1.2
billion as of December 31, 2024. When adding $1.2 billion of free
high-quality liquid securities that could be liquidated or pledged
within one day, total core liquidity amounted to $2.4 billion as of
December 31, 2024, or 12.54% of total assets, compared to $2.5
billion, or 13.32% of total assets as of September 30, 2024. In
addition, as of December 31, 2024, the Corporation had $912.4
million available for credit with the FHLB based on the value of
the 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 17.27% as of December 31, 2024, compared to 18.43% as
of September 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 December 31, 2024. In the aggregate, as of December
31, 2024, the Corporation had $5.9 billion, or 124% of estimated
uninsured deposits (excluding fully collateralized government
deposits), available to meet liquidity needs.
The Corporation’s total deposits, excluding brokered CDs,
amounted to $16.4 billion as of December 31, 2024, compared to
$15.8 billion as of September 30, 2024, which includes $3.5 billion
and $3.2 billion, respectively, in government deposits that are
fully collateralized. Excluding fully collateralized government
deposits and FDIC-insured deposits, as of December 31, 2024, the
estimated amount of uninsured deposits was $4.8 billion, which
represents 29.36% of total deposits, compared to $4.6 billion, or
29.25% of total deposits, as of September 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 decreased to 8.44% as of December 31, 2024, compared to 8.79%
as of September 30, 2024, driven by the $82.3 million decrease in
the fair value of available-for-sale debt securities and increase
in tangible assets. 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:
December 31,2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31,2023
(In thousands, except ratios and per share
information)
Tangible Equity:
Total common equity - GAAP
$
1,669,236
$
1,700,885
$
1,491,460
$
1,479,717
$
1,497,609
Goodwill
(38,611
)
(38,611
)
(38,611
)
(38,611
)
(38,611
)
Other intangible assets
(6,967
)
(8,260
)
(9,700
)
(11,542
)
(13,383
)
Tangible common equity -
non-GAAP
$
1,623,658
$
1,654,014
$
1,443,149
$
1,429,564
$
1,445,615
Tangible Assets:
Total assets - GAAP
$
19,292,921
$
18,859,170
$
18,881,374
$
18,890,961
$
18,909,549
Goodwill
(38,611
)
(38,611
)
(38,611
)
(38,611
)
(38,611
)
Other intangible assets
(6,967
)
(8,260
)
(9,700
)
(11,542
)
(13,383
)
Tangible assets - non-GAAP
$
19,247,343
$
18,812,299
$
18,833,063
$
18,840,808
$
18,857,555
Common shares outstanding
163,869
163,876
163,865
166,707
169,303
Tangible common equity ratio -
non-GAAP
8.44
%
8.79
%
7.66
%
7.59
%
7.67
%
Tangible book value per common share -
non-GAAP
$
9.91
$
10.09
$
8.81
$
8.58
$
8.54
Exposure to Puerto Rico Government
Direct Exposure
As of December 31, 2024, the Corporation had $288.6 million of
direct exposure to the Puerto Rico government, its municipalities,
and public corporations, compared to $285.5 million as of September
30, 2024. As of December 31, 2024, approximately $195.8 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 $51.1 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 $30.0 million in loans to public corporations of
Puerto Rico. 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 $2.9 million (fair value of $1.6 million as of December 31,
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 $1.3 million as of December 31, 2024, of
which $0.3 million is due to credit deterioration.
The aforementioned exposure to municipalities in Puerto Rico
included $92.4 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.
Indirect Exposure
As of December 31, 2024 and September 30, 2024, the Corporation
had $3.1 billion and $2.7 billion, respectively, of public sector
deposits in Puerto Rico. Approximately 17% of the public sector
deposits as of December 31, 2024 were from municipalities and
municipal agencies in Puerto Rico, and 83% were from public
corporations, the Puerto Rico central government and agencies, and
U.S. federal government agencies in Puerto Rico.
Additionally, as of December 31, 2024, the outstanding balance
of construction loans funded through conduit financing structures
to support the federal programs of Low-Income Housing Tax Credit
(“LIHTC”) combined with Community Development Block Grant-Disaster
Recovery (“CDBG-DR”) funding amounted to $59.2 million, compared to
$40.2 million as of September 30, 2024. The main objective of these
programs is to spur development in new or rehabilitated and
affordable rental housing. PRHFA, as program subrecipient and
conduit issuer, issues tax-exempt obligations which are acquired by
private financial institutions and are required to co-underwrite
with PRHFA a mirror construction loan agreement for the specific
project loan to which the Corporation will serve as ultimate lender
but where the PRHFA will be the lender of record. The total amount
of unfunded loan commitments related to these loans as of December
31, 2024 was $94.2 million.
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, and adjusted pre-tax,
pre-provision income 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 years ended December 31, 2024 and
2023 included the following Special Items:
Years Ended December 31, 2024 and
2023
FDIC Special Assessment Expense
- Charges of $1.1 million ($0.7 million
after-tax, calculated based on the statutory tax rate of 37.5%) and
$6.3 million ($3.9 million after-tax, calculated based on the
statutory tax rate of 37.5%) were recorded for the years ended
December 31, 2024 and 2023, respectively, as a result of the
special assessment imposed by the FDIC 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 estimated FDIC special
assessment of $7.4 million 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.
Gain Recognized from Legal Settlement
- 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 for the year ended December 31, 2023 as part of other
non-interest income.
Gain on Early Extinguishment of Debt
- A $1.6 million gain on the repurchase of
$21.4 million in junior subordinated debentures reflected in the
condensed consolidated statements of income for the year ended
December 31, 2023 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 recorded during 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 fourth and third quarters of
2024, net income and earnings per diluted share, and reconciles,
for the fourth quarter of 2023 and years ended December 31, 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
Year Ended
December 31, 2024
September 30, 2024
December 31, 2023
December 31, 2024
December 31, 2023
(In thousands, except per share
information)
Net income, as reported (GAAP)
$
75,701
$
73,727
$
79,489
$
298,724
$
302,864
Adjustments:
FDIC special assessment expense
-
-
6,311
1,099
6,311
Gain recognized from legal settlement
-
-
-
-
(3,600
)
Gain on early extinguishment of debt
-
-
-
-
(1,605
)
Income tax impact of adjustments (1)
-
-
(2,367
)
(412
)
(1,017
)
Adjusted net income attributable to common
stockholders (non-GAAP)
$
75,701
$
73,727
$
83,433
$
299,411
$
302,953
Weighted-average diluted shares
outstanding
163,893
163,872
171,351
165,268
177,180
Earnings Per Share - diluted (GAAP)
$
0.46
$
0.45
$
0.46
$
1.81
$
1.71
Adjusted Earnings Per Share - diluted
(non-GAAP)
$
0.46
$
0.45
$
0.49
$
1.81
$
1.71
(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 years ended December 31, 2024 and 2023:
Quarter Ended
Year Ended
December 31, 2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
(Dollars in thousands)
Income before income taxes
$
96,029
$
96,386
$
101,379
$
97,413
$
84,874
$
391,207
$
397,436
Add: Provision for credit losses
expense
20,904
15,245
11,605
12,167
18,812
59,921
60,940
Add: FDIC special assessment expense
-
-
152
947
6,311
1,099
6,311
Less: Gain recognized from legal
settlement
-
-
-
-
-
-
(3,600
)
Less: Gain on early extinguishment of
debt
-
-
-
-
-
-
(1,605
)
Adjusted pre-tax, pre-provision income
(1)
$
116,933
$
111,631
$
113,136
$
110,527
$
109,997
$
452,227
$
459,482
Change from most recent prior period
(amount)
$
5,302
$
(1,505
)
$
2,609
$
530
$
(3,389
)
$
(7,255
)
$
(15,798
)
Change from most recent prior period
(percentage)
4.7
%
-1.3
%
2.4
%
0.5
%
-3.0
%
-1.6
%
-3.3
%
(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 Thursday, January 23, 2025, 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
960930. 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 January 23, 2026. A telephone replay will be
available one hour after the end of the conference call through
February 22, 2025, at (866) 813-9403. The replay access code is
745161.
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 and existing products and
services, including those related to the offering of digital
banking and financial services; volatility in the financial
services industry, 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 (including as a result of the new presidential
administration), 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, widespread health emergencies, geopolitical
conflicts (including sanctions, war or armed conflict, such as the
ongoing conflict in Ukraine, the conflict in the Middle East, the
possible expansion of such conflicts in surrounding areas and
potential geopolitical consequences, and the threat of conflict
from neighboring countries in our region), 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 further downgrades of the U.S.’s Long-Term Foreign-Currency
Issuer Default Rating and 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 the
change in administration as a result of the 2024 U.S. presidential
and Puerto Rico general elections, 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
December 31,2024
September 30, 2024
December 31, 2023
(In thousands, except for share
information)
ASSETS
Cash and due from banks
$
1,158,215
$
684,028
$
661,925
Money market investments:
Time deposits with other financial
institutions
500
500
300
Other short-term investments
700
843
939
Total money market investments
1,200
1,343
1,239
Debt securities available for sale, at
fair value (ACL of $521 as of December 31,2024; $526 as of
September 30, 2024; and $511 as of December 31, 2023)
4,565,302
4,894,781
5,229,984
Debt securities held to maturity, at
amortized cost, net of ACL of $802 as of December 31, 2024; $1,119
as of September 30, 2024; and $2,197 as of December 31, 2023 (fair
value of $308,040 as of December 31, 2024; $316,854 as of September
30, 2024; and $346,132 as of December 31, 2023)
316,984
322,023
351,981
Total debt securities
4,882,286
5,216,804
5,581,965
Equity securities
52,018
52,432
49,675
Total investment securities
4,934,304
5,269,236
5,631,640
Loans, net of ACL of $243,942 as of
December 31, 2024; $246,996 as of September 30, 2024; and $261,843
as of December 31, 2023
12,502,614
12,199,028
11,923,640
Loans held for sale, at lower of cost or
market
15,276
12,641
7,368
Total loans, net
12,517,890
12,211,669
11,931,008
Accrued interest receivable on loans and
investments
71,881
67,112
77,716
Premises and equipment, net
133,437
136,401
142,016
OREO
17,306
19,330
32,669
Deferred tax asset, net
136,356
137,484
150,127
Goodwill
38,611
38,611
38,611
Other intangible assets
6,967
8,260
13,383
Other assets
276,754
285,696
229,215
Total assets
$
19,292,921
$
18,859,170
$
18,909,549
LIABILITIES
Deposits:
Non-interest-bearing deposits
$
5,547,538
$
5,275,733
$
5,404,121
Interest-bearing deposits
11,323,760
11,071,657
11,151,864
Total deposits
16,871,298
16,347,390
16,555,985
Advances from the FHLB
500,000
500,000
500,000
Other borrowings
61,700
111,700
161,700
Accounts payable and other liabilities
190,687
199,195
194,255
Total liabilities
17,623,685
17,158,285
17,411,940
STOCKHOLDERSʼ EQUITY
Common stock, $0.10 par value, 223,663,116
shares issued (December 31, 2024 - 163,868,877 shares outstanding;
September 30, 2024 - 163,875,810 shares outstanding; and December
31, 2023 - 169,302,812 shares outstanding)
22,366
22,366
22,366
Additional paid-in capital
964,964
962,973
965,707
Retained earnings
2,038,812
1,989,419
1,846,112
Treasury stock, at cost (December 31, 2024
- 59,794,239 shares; September 30, 2024 - 59,787,306 shares; and
December 31, 2023 - 54,360,304 shares)
(790,350
)
(790,252
)
(697,406
)
Accumulated other comprehensive loss
(566,556
)
(483,621
)
(639,170
)
Total stockholdersʼ equity
1,669,236
1,700,885
1,497,609
Total liabilities and stockholdersʼ
equity
$
19,292,921
$
18,859,170
$
18,909,549
Table 2 – Condensed Consolidated
Statements of Income
Quarter Ended
Year Ended
December 31, 2024
September 30, 2024
December 31, 2023
December 31, 2024
December 31, 2023
(In thousands, except per share
information)
Net interest income:
Interest income
$
279,728
$
274,675
$
265,481
$
1,095,153
$
1,023,486
Interest expense
70,461
72,611
68,799
287,674
226,376
Net interest income
209,267
202,064
196,682
807,479
797,110
Provision for credit losses - expense
(benefit):
Loans
21,544
16,470
18,975
62,861
66,644
Unfunded loan commitments
(318
)
(1,041
)
(123
)
(1,495
)
365
Debt securities
(322
)
(184
)
(40
)
(1,445
)
(6,069
)
Provision for credit losses - expense
20,904
15,245
18,812
59,921
60,940
Net interest income after provision for
credit losses
188,363
186,819
177,870
747,558
736,170
Non-interest income:
Service charges and fees on deposit
accounts
9,748
9,684
9,662
38,819
38,042
Mortgage banking activities
3,183
3,199
2,094
12,683
10,587
Gain on early extinguishment of debt
-
-
-
-
1,605
Card and processing income
12,155
11,768
11,015
46,758
43,909
Other non-interest income
7,113
7,851
10,838
32,462
38,551
Total non-interest income
32,199
32,502
33,609
130,722
132,694
Non-interest expenses:
Employees’ compensation and benefits
59,652
59,081
55,584
235,695
222,855
Occupancy and equipment
22,771
22,424
21,847
88,427
85,911
Business promotion
5,328
4,116
6,725
17,645
19,626
Professional service fees
11,810
12,538
11,250
49,455
45,841
Taxes, other than income taxes
5,994
5,665
5,535
22,196
21,236
FDIC deposit insurance
2,236
2,164
8,454
9,818
14,873
Net gain on OREO operations
(1,074
)
(1,339
)
(1,005
)
(7,474
)
(7,138
)
Credit and debit card processing
expenses
7,147
7,095
7,360
27,600
25,997
Other non-interest expenses
10,669
11,191
10,855
43,711
42,227
Total non-interest expenses
124,533
122,935
126,605
487,073
471,428
Income before income taxes
96,029
96,386
84,874
391,207
397,436
Income tax expense
20,328
22,659
5,385
92,483
94,572
Net income
$
75,701
$
73,727
$
79,489
$
298,724
$
302,864
Net income attributable to common
stockholders
$
75,701
$
73,727
$
79,489
$
298,724
$
302,864
Earnings per common share:
Basic
$
0.46
$
0.45
$
0.47
$
1.82
$
1.72
Diluted
$
0.46
$
0.45
$
0.46
$
1.81
$
1.71
Table 3 – Selected Financial
Data
Quarter Ended
Year Ended
December 31, 2024
September 30,
2024
December 31, 2023
December 31, 2024
December 31, 2023
(Shares in thousands)
Per Common Share Results:
Net earnings per share - basic
$
0.46
$
0.45
$
0.47
$
1.82
$
1.72
Net earnings per share - diluted
$
0.46
$
0.45
$
0.46
$
1.81
$
1.71
Cash dividends declared
$
0.16
$
0.16
$
0.14
$
0.64
$
0.56
Average shares outstanding
163,084
163,059
170,624
164,549
176,504
Average shares outstanding diluted
163,893
163,872
171,351
165,268
177,180
Book value per common share
$
10.19
$
10.38
$
8.85
$
10.19
$
8.85
Tangible book value per common share
(1)
$
9.91
$
10.09
$
8.54
$
9.91
$
8.54
Common stock price: end of period
$
18.59
$
21.17
$
16.45
$
18.59
$
16.45
Selected Financial Ratios (In
Percent):
Profitability:
Return on average assets
1.56
1.55
1.70
1.58
1.62
Return on average equity
17.77
18.31
23.69
19.09
21.86
Interest rate spread (2)
3.55
3.42
3.34
3.44
3.53
Net interest margin (2)
4.44
4.34
4.23
4.36
4.33
Efficiency ratio (3)
51.57
52.41
54.98
51.92
50.70
Capital and Other:
Average total equity to average total
assets
8.80
8.46
7.16
8.25
7.41
Total capital
18.02
18.25
18.57
18.02
18.57
Common equity Tier 1 capital
16.32
16.18
16.10
16.32
16.10
Tier 1 capital
16.32
16.18
16.10
16.32
16.10
Leverage
11.07
10.96
10.78
11.07
10.78
Tangible common equity ratio (1)
8.44
8.79
7.67
8.44
7.67
Dividend payout ratio
34.47
35.39
30.05
35.25
32.64
Basic liquidity ratio (4)
17.27
18.43
19.82
17.27
19.82
Core liquidity ratio (5)
12.54
13.32
14.93
12.54
14.93
Loan to deposit ratio
75.64
76.21
73.65
75.64
73.65
Uninsured deposits, excluding fully
collateralized deposits, to total deposits (6)
29.36
29.25
28.13
29.36
28.13
Asset Quality:
Allowance for credit losses for loans and
finance leases to total loans held for investment
1.91
1.98
2.15
1.91
2.15
Net charge-offs (annualized) to average
loans outstanding
0.78
0.78
0.69
0.65
0.58
Provision for credit losses for loans and
finance leases to net charge-offs
87.58
68.61
91.46
77.83
98.91
Non-performing assets to total assets
0.61
0.63
0.67
0.61
0.67
Nonaccrual loans held for investment to
total loans held for investment
0.69
0.72
0.69
0.69
0.69
Allowance for credit losses for loans and
finance leases to total nonaccrual loans held for investment
278.90
276.46
312.81
278.90
312.81
Allowance for credit losses for loans and
finance leases to total nonaccrual loans held for investment,
excluding residential estate loans
439.39
428.70
508.75
439.39
508.75
(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 fourth and third
quarters of 2024, the fourth quarter of 2023, and the years ended
December 31, 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
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(Dollars in thousands)
2024
2024
2023
2024
2023
Net Interest Income
Interest income - GAAP
$
279,728
$
274,675
$
265,481
$
1,095,153
$
1,023,486
Unrealized (gain) loss on derivative
instruments
(3
)
5
8
-
8
Interest income excluding valuations -
non-GAAP
279,725
274,680
265,489
1,095,153
1,023,494
Tax-equivalent adjustment
5,226
4,528
4,262
19,433
20,839
Interest income on a tax-equivalent basis
and excluding valuations - non-GAAP
$
284,951
$
279,208
$
269,751
$
1,114,586
$
1,044,333
Interest expense - GAAP
$
70,461
$
72,611
$
68,799
$
287,674
$
226,376
Net interest income - GAAP
$
209,267
$
202,064
$
196,682
$
807,479
$
797,110
Net interest income excluding valuations
- non-GAAP
$
209,264
$
202,069
$
196,690
$
807,479
$
797,118
Net interest income on a tax-equivalent
basis and excluding valuations - non-GAAP
$
214,490
$
206,597
$
200,952
$
826,912
$
817,957
Average Balances
Loans and leases
$
12,584,143
$
12,354,679
$
12,004,881
$
12,355,496
$
11,726,304
Total securities, other short-term
investments and interest-bearing cash balances
6,592,411
6,509,789
6,835,407
6,629,868
7,181,048
Average Interest-Earning Assets
$
19,176,554
$
18,864,468
$
18,840,288
$
18,985,364
$
18,907,352
Average Interest-Bearing Liabilities
$
11,911,904
$
11,743,122
$
11,665,459
$
11,840,390
$
11,370,689
Average Assets (1)
$
19,217,363
$
18,883,374
$
18,581,625
$
18,961,356
$
18,706,423
Average Non-Interest-Bearing Deposits
$
5,402,606
$
5,341,589
$
5,384,264
$
5,351,124
$
5,741,345
Average Yield/Rate
Average yield on interest-earning assets -
GAAP
5.79
%
5.78
%
5.59
%
5.77
%
5.41
%
Average rate on interest-bearing
liabilities - GAAP
2.35
%
2.45
%
2.34
%
2.43
%
1.99
%
Net interest spread - GAAP
3.44
%
3.33
%
3.25
%
3.34
%
3.42
%
Net interest margin - GAAP
4.33
%
4.25
%
4.14
%
4.25
%
4.22
%
Average yield on interest-earning assets
excluding valuations - non-GAAP
5.79
%
5.78
%
5.59
%
5.77
%
5.41
%
Average rate on interest-bearing
liabilities
2.35
%
2.45
%
2.34
%
2.43
%
1.99
%
Net interest spread excluding valuations -
non-GAAP
3.44
%
3.33
%
3.25
%
3.34
%
3.42
%
Net interest margin excluding valuations -
non-GAAP
4.33
%
4.25
%
4.14
%
4.25
%
4.22
%
Average yield on interest-earning assets
on a tax-equivalent basis and excluding valuations - non-GAAP
5.90
%
5.87
%
5.68
%
5.87
%
5.52
%
Average rate on interest-bearing
liabilities
2.35
%
2.45
%
2.34
%
2.43
%
1.99
%
Net interest spread on a tax-equivalent
basis and excluding valuations - non-GAAP
3.55
%
3.42
%
3.34
%
3.44
%
3.53
%
Net interest margin on a tax-equivalent
basis and excluding valuations - non-GAAP
4.44
%
4.34
%
4.23
%
4.36
%
4.33
%
(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
December 31,
September 30,
December 31,
December 31,
September 30,
December 31,
December 31,
September 30,
December 31,
2024
2024
2023
2024
2024
2023
2024
2024
2023
(Dollars in thousands)
Interest-earning assets:
Money market and other short-term
investments
$
994,674
$
645,398
$
503,293
$
11,986
$
8,782
$
6,933
4.78
%
5.40
%
5.47
%
Government obligations (2)
2,248,155
2,520,133
2,738,478
7,681
8,458
9,161
1.36
%
1.33
%
1.33
%
MBS
3,295,492
3,290,547
3,543,423
15,685
13,830
15,481
1.89
%
1.67
%
1.73
%
FHLB stock
33,995
33,985
34,745
790
804
830
9.22
%
9.39
%
9.48
%
Other investments
20,095
19,726
15,468
160
73
232
3.16
%
1.47
%
5.95
%
Total investments (3)
6,592,411
6,509,789
6,835,407
36,302
31,947
32,637
2.18
%
1.95
%
1.89
%
Residential mortgage loans
2,832,473
2,816,343
2,812,428
41,574
41,505
40,711
5.82
%
5.85
%
5.74
%
Construction loans
228,438
195,001
211,641
5,351
4,417
4,295
9.29
%
8.99
%
8.05
%
C&I and commercial mortgage loans
5,775,301
5,616,658
5,355,145
102,720
102,768
96,299
7.06
%
7.26
%
7.13
%
Finance leases
894,116
885,807
844,780
17,546
17,290
16,584
7.79
%
7.74
%
7.79
%
Consumer loans
2,853,815
2,840,870
2,780,887
81,458
81,281
79,225
11.32
%
11.35
%
11.30
%
Total loans (4) (5)
12,584,143
12,354,679
12,004,881
248,649
247,261
237,114
7.84
%
7.94
%
7.84
%
Total interest-earning assets
$
19,176,554
$
18,864,468
$
18,840,288
$
284,951
$
279,208
$
269,751
5.90
%
5.87
%
5.68
%
Interest-bearing liabilities:
Time deposits
$
3,042,752
$
3,057,918
$
2,792,843
$
26,946
$
27,768
$
22,304
3.51
%
3.60
%
3.17
%
Brokered CDs
485,176
600,319
572,105
5,907
7,656
7,452
4.83
%
5.06
%
5.17
%
Other interest-bearing deposits
7,777,387
7,429,163
7,635,223
29,854
28,280
29,918
1.52
%
1.51
%
1.55
%
Securities sold under agreements to
repurchase
976
-
925
12
-
13
4.88
%
0.00
%
5.58
%
Advances from the FHLB
500,217
500,000
502,446
5,674
5,672
5,709
4.50
%
4.50
%
4.51
%
Other borrowings
105,396
155,722
161,917
2,068
3,235
3,403
7.78
%
8.24
%
8.34
%
Total interest-bearing liabilities
$
11,911,904
$
11,743,122
$
11,665,459
$
70,461
$
72,611
$
68,799
2.35
%
2.45
%
2.34
%
Net interest income
$
214,490
$
206,597
$
200,952
Interest rate spread
3.55
%
3.42
%
3.34
%
Net interest margin
4.44
%
4.34
%
4.23
%
(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 $3.9
million, $3.2 million, and $3.0 million, for the quarters ended
December 31, 2024, September 30, 2024, and December 31, 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)
Year Ended
December 31,2024
December 31,2023
December 31,2024
December 31,2023
December 31,2024
December 31,2023
(Dollars in thousands)
Interest-earning assets:
Money market and other short-term
investments
$
710,945
$
584,083
$
37,082
$
30,419
5.22
%
5.21
%
Government obligations (2)
2,517,327
2,843,284
34,139
40,314
1.36
%
1.42
%
MBS
3,348,925
3,702,908
59,092
67,641
1.76
%
1.83
%
FHLB stock
34,161
36,606
3,266
2,799
9.56
%
7.65
%
Other investments
18,510
14,167
543
490
2.93
%
3.46
%
Total investments (3)
6,629,868
7,181,048
134,122
141,663
2.02
%
1.97
%
Residential mortgage loans
2,816,732
2,814,102
164,238
160,009
5.83
%
5.69
%
Construction loans
221,822
172,952
19,260
14,811
8.68
%
8.56
%
C&I and commercial mortgage loans
5,606,827
5,244,503
405,481
365,185
7.23
%
6.96
%
Finance leases
879,437
789,870
69,218
60,909
7.87
%
7.71
%
Consumer loans
2,830,678
2,704,877
322,267
301,756
11.38
%
11.16
%
Total loans (4) (5)
12,355,496
11,726,304
980,464
902,670
7.94
%
7.70
%
Total interest-earning assets
$
18,985,364
$
18,907,352
$
1,114,586
$
1,044,333
5.87
%
5.52
%
Interest-bearing liabilities:
Time deposits
$
2,999,078
$
2,590,313
$
105,712
$
68,605
3.52
%
2.65
%
Brokered CDs
627,454
348,829
31,833
16,630
5.07
%
4.77
%
Other interest-bearing deposits
7,567,514
7,664,793
115,562
100,226
1.53
%
1.31
%
Securities sold under agreements to
repurchase
245
54,570
12
2,769
4.90
%
5.07
%
Advances from the FHLB
500,055
541,000
22,566
24,608
4.51
%
4.55
%
Other borrowings
146,044
171,184
11,989
13,538
8.21
%
7.91
%
Total interest-bearing liabilities
$
11,840,390
$
11,370,689
$
287,674
$
226,376
2.43
%
1.99
%
Net interest income
$
826,912
$
817,957
Interest rate spread
3.44
%
3.53
%
Net interest margin
4.36
%
4.33
%
(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 $13.4
million and $11.9 million for the years ended December 31, 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 December 31,
2024
Puerto Rico
Virgin Islands
United States
Consolidated
(In thousands)
Residential mortgage loans
$
2,166,980
$
156,225
$
505,226
$
2,828,431
Commercial loans:
Construction loans
181,607
2,820
43,969
228,396
Commercial mortgage loans
1,800,445
67,449
698,090
2,565,984
Commercial and Industrial loans
2,192,468
133,407
1,040,163
3,366,038
Commercial loans
4,174,520
203,676
1,782,222
6,160,418
Finance leases
899,446
-
-
899,446
Consumer loans
2,781,182
69,577
7,502
2,858,261
Loans held for investment
10,022,128
429,478
2,294,950
12,746,556
Loans held for sale
14,558
434
284
15,276
Total loans
$
10,036,686
$
429,912
$
2,295,234
$
12,761,832
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 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 December 31,2024
(In thousands)
Puerto Rico
Virgin Islands
United States
Total
Nonaccrual loans held for investment:
Residential mortgage
$
16,854
$
6,555
$
8,540
$
31,949
Construction
403
962
-
1,365
Commercial mortgage
2,716
8,135
-
10,851
Commercial and Industrial
19,595
919
-
20,514
Consumer and finance leases
22,538
205
45
22,788
Total nonaccrual loans held for
investment
62,106
16,776
8,585
87,467
OREO
13,691
3,615
-
17,306
Other repossessed property
11,637
219
3
11,859
Other assets (1)
1,620
-
-
1,620
Total non-performing assets (2)
$
89,054
$
20,610
$
8,588
$
118,252
Past due loans 90 days and still accruing
(3)
$
39,307
$
3,083
$
-
$
42,390
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 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 $6.2 million as of December 31, 2024 (September 30,
2024 - $6.5 million; December 31, 2023 - $8.3 million).
(3)
These include rebooked loans, which were
previously pooled into GNMA securities, amounting to $5.7 million
as of December 31, 2024 (September 30, 2024 - $6.6 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
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2024
2024
2023
2024
2023
(Dollars in thousands)
Allowance for credit losses on loans and
finance leases, beginning of period
$
246,996
$
254,532
$
263,615
$
261,843
$
260,464
Impact of adoption of ASU 2022-02
-
-
-
-
2,116
Provision for credit losses on loans and
finance leases expense
21,544
16,470
18,975
62,861
66,644
Net (charge-offs) recoveries of loans and
finance leases:
Residential mortgage
(305
)
76
287
(518
)
(553
)
Construction
96
11
(4
)
131
1,889
Commercial mortgage
59
41
(539
)
533
(347
)
Commercial and Industrial
(184
)
(1,140
)
(1
)
3,962
(6,095
)
Consumer loans and finance leases
(24,264
)
(22,994
)
(20,490
)
(84,870
)
(1)
(62,275
)
Net charge-offs
(24,598
)
(24,006
)
(20,747
)
(80,762
)
(1)
(67,381
)
Allowance for credit losses on loans and
finance leases, end of period
$
243,942
$
246,996
$
261,843
$
243,942
$
261,843
Allowance for credit losses on loans and
finance leases to period end total
loans held for investment
1.91
%
1.98
%
2.15
%
1.91
%
2.15
%
Net charge-offs (annualized) to average
loans outstanding during the period
0.78
%
0.78
%
0.69
%
0.65
%
0.58
%
Provision for credit losses on loans and
finance leases to net charge-offs during the period
0.88x
0.69x
0.91x
0.78x
0.99x
(1)
For the year ended December 31, 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 Charge-Offs
(Recoveries) to Average Loans
Quarter Ended
Year Ended
December 31,2024
September 30, 2024
December 31,2023
December 31,2024
December 31,2023
Residential mortgage
0.04
%
-0.01
%
-0.04
%
0.02
%
0.02
%
Construction
-0.17
%
-0.02
%
0.01
%
-0.06
%
-1.09
%
Commercial mortgage
-0.01
%
-0.01
%
0.09
%
-0.02
%
0.01
%
Commercial and Industrial
0.02
%
0.14
%
0.00
%
-0.12
%
0.21
%
Consumer loans and finance
leases
2.59
%
2.47
%
2.26
%
2.29
%
(1)
1.78
%
Total loans
0.78
%
0.78
%
0.69
%
0.65
%
(1)
0.58
%
(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 year ended December 31, 2024 by 27 basis points and 9
basis points, respectively.
Table 11 – Deposits
As of
December 31,2024
September 30, 2024
December 31, 2023
(In thousands)
Time deposits
$
3,007,144
$
3,067,261
$
2,833,730
Interest-bearing saving and checking
accounts
7,838,498
7,484,348
7,534,800
Non-interest-bearing deposits
5,547,538
5,275,733
5,404,121
Total deposits, excluding brokered CDs
(1)
16,393,180
15,827,342
15,772,651
Brokered CDs
478,118
520,048
783,334
Total deposits
$
16,871,298
$
16,347,390
$
16,555,985
Total deposits, excluding brokered CDs and
government deposits
$
12,867,789
$
12,669,900
$
12,600,719
(1)
As of December 31,2024, government
deposits amounted to $3.5 billion and as of each of September 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/20250123807546/en/
First BanCorp. Ramon Rodriguez Senior Vice President
Corporate Strategy and Investor Relations
ramon.rodriguez@firstbankpr.com (787) 729-8200 Ext. 82179
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