SAN JUAN, Puerto Rico--(BUSINESS WIRE)-- 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 $75.8 million, or $0.46 per diluted share, for the second quarter of 2024, compared to $73.5 million, or $0.44 per diluted share, for the first quarter of 2024, and $70.7 million, or $0.39 per diluted share, for the second quarter of 2023.
Aurelio Alemán, President and Chief Executive Officer of First BanCorp, commented: “We closed the first half of the year with another quarter of solid operating performance across most franchise metrics and remain highly encouraged by our growth prospects throughout the rest of the year. Once again, we delivered a strong return on assets of 1.61%, grew our net interest margin, registered organic loan growth across all businesses, grew core deposits and returned 100% of earnings to shareholders in the form of buybacks and common stock dividends. We continue to generate top quartile financial results through our proven business model, ongoing operational efficiency, and commitment to preserve shareholder value.
Core deposits, other than brokered and government deposits, were up by $132 million reflecting growth in all regions. More importantly, this growth includes a $47 million increase in non-interest-bearing deposits, further expanding our low-cost and well diversified funding base while reducing our exposure to higher-cost funding sources. Even though overall asset quality remained stable, as we have previously mentioned we have continued to see early-delinquency and charge-off trends within the consumer lending segment returning to historical levels.
Our balance sheet is uniquely positioned to continue serving our clients and communities while growing the franchise and without compromising our strong financial profile. We continue to prudently manage our capital and expect to capitalize on value-creating growth opportunities that best serve the long-term interest of the franchise and its shareholders.
Q2
Q1
YTD June
2024
2023
$ 199,628
$ 196,520
$ 199,815
$ 396,148
$ 400,700
11,605
12,167
22,230
23,772
37,732
32,038
33,983
36,271
66,021
68,789
118,682
120,923
112,917
239,605
228,185
101,379
97,413
100,939
198,792
203,572
25,541
23,955
30,284
49,496
62,219
$ 75,838
$ 73,458
$ 70,655
$ 149,296
$ 141,353
4.22%
4.16%
4.23%
4.19%
4.29%
51.23%
52.46%
47.83%
51.84%
48.60%
$ 0.46
$ 0.44
$ 0.39
$ 0.90
$ 0.78
$ 9.10
$ 8.88
$ 7.78
$ 8.81
$ 8.58
$ 7.47
20.80%
19.56%
19.66%
20.17%
20.31%
1.61%
1.56%
1.51%
1.59%
1.53%
Results for Second Quarter of 2024 compared to First Quarter of 2024
Profitability
Net income – $75.8 million, or $0.46 per diluted share compared to $73.5 million, or $0.44 per diluted share.
Income before income taxes – $101.3 million compared to $97.4 million.
Adjusted pre-tax, pre-provision income (Non-GAAP) (1) – $113.1 million, compared to $110.5 million.
Net interest income – $199.6 million compared to $196.5 million. The increase was mainly in commercial and construction loans due to higher volume and refinancings at higher market interest rates and higher average balances in interest-bearing cash balances. Net interest margin increased to 4.22%, compared to 4.16%.
Provision for credit losses – $11.6 million compared to $12.2 million. The decrease reflects a $10.1 million reduction in the provision for the residential mortgage loan portfolio associated with updated historical loss experience, particularly in the Puerto Rico region, and a $1.4 million reduction in the provision for the commercial and construction loan portfolios as a result of improvements in projections of macroeconomic variables, primarily in the commercial mortgage loan portfolio in the Puerto Rico region. Such decrease was partially offset by a $10.5 million increase in provision expense for consumer loans, in part driven by a $9.5 million recovery in the first quarter of 2024 associated with a bulk sale of fully charged-off consumer loans.
Non-interest income – $32.0 million compared to $34.0 million, mainly driven by $3.2 million in seasonal contingent commissions recorded in the first quarter of 2024.
Non-interest expenses – $118.7 million compared to $120.9 million, mainly driven by a $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. The efficiency ratio was 51.23%, compared to 52.46%.
Balance Sheet
Total loans – grew by $72.4 million to $12.4 billion, primarily attributed to growth in the commercial and construction and consumer loan portfolios in the Puerto Rico region. Total loan originations, other than credit card utilization activity, of $1.1 billion, up $25.3 million.
Core deposits (other than brokered and government deposits) –increased by $131.7 million to $12.7 billion, reflecting growth of $70.4 million in the Puerto Rico region, $41.4 million in the Florida region, and $19.9 million in the Virgin Islands region. This increase includes a $68.5 million increase in time deposits and a $46.8 million increase in non-interest-bearing deposits.
Government deposits (fully collateralized) – decreased by $47.4 million to $3.2 billion. Variance mainly reflects a decline of $76.6 million in the Puerto Rico region, partially offset by an increase of $28.3 million in the Virgin Islands region.
Asset Quality
Allowance for credit losses (“ACL”) coverage ratio – amounted to 2.06%, compared to 2.14%. Annualized net charge-offs to average loans ratio increased to 0.69%, compared to 0.37%. First quarter of 2024 reflects a 31 basis points decrease due to the $9.5 million recovery associated with a bulk sale of fully charged-off consumer loans.
Non-performing assets – decreased by $2.7 million to $126.9 million, mainly driven by the effect during the second quarter of 2024 of both the restoration to accrual status of a $10.0 million commercial and industrial (“C&I”) loan in the Florida region in the power generation industry and a $7.2 million decrease in the OREO portfolio balance, partially offset by the inflow of a $16.5 million commercial relationship in the Puerto Rico region in the food retail industry.
Liquidity and Capital
Liquidity – Cash and cash equivalents amounted to $586.3 million, compared to $684.5 million. When adding $1.9 billion of free high-quality liquid securities that could be liquidated or pledged within one day, total core liquidity amounted to $2.5 billion, or 13.37% of total assets, compared to 14.45%. Including the $968.1 million in available lending capacity at the Federal Home Loan Bank (“FHLB”), available liquidity amounted to 18.50% of total assets, compared to 19.60%.
Capital – Repurchased $50.0 million of common stock and paid $26.3 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 18.21%, 15.77%, 15.77%, and 10.63%, respectively, as of June 30, 2024. On a non-GAAP basis, the tangible common equity ratio(1) amounted to 7.66% compared to 7.59%.
NET INTEREST INCOME
The following table sets forth information concerning net interest income for the last five quarters:
Quarter Ended
(Dollars in thousands)
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
Net Interest Income
Interest income
$
272,245
268,505
265,481
263,405
252,204
Interest expense
72,617
71,985
68,799
63,677
52,389
Net interest income
199,628
196,520
196,682
199,728
199,815
Average Balances
Loans and leases
12,272,816
12,207,840
12,004,881
11,783,456
11,591,516
Total securities, other short-term investments and interest-bearing cash balances
6,698,609
6,720,395
6,835,407
7,325,226
7,333,989
Average interest-earning assets
18,971,425
18,928,235
18,840,288
19,108,682
18,925,505
Average interest-bearing liabilities
11,868,658
11,838,159
11,665,459
11,671,938
11,176,385
Average Yield/Rate
Average yield on interest-earning assets - GAAP
5.76
%
5.69
5.59
5.47
5.35
Average rate on interest-bearing liabilities - GAAP
2.45
2.44
2.34
2.16
1.88
Net interest spread - GAAP
3.31
3.25
3.47
Net interest margin - GAAP
4.22
4.16
4.14
4.15
4.23
Net interest income amounted to $199.6 million for the second quarter of 2024, an increase of $3.1 million, compared to $196.5 million for the first quarter of 2024. The increase in net interest income reflects the following:
- A $2.2 million increase in interest income on commercial and construction loans, due to a $1.4 million increase in interest income, which includes refinancings at higher market interest rates and $0.5 million in interest income recognized as a result of the repayment of two previously charged-off loans in the Florida region; and a $0.8 million increase in interest income mainly associated with a $50.2 million increase in the average balance of this portfolio.
- A $0.4 million increase in interest income on consumer loans and finance leases, mainly in the auto loans and finance leases portfolios.
Partially offset by:
- A $2.2 million increase in interest expense on time deposits, excluding brokered CDs, mainly due to approximately $1.2 million associated with higher rates paid in the second quarter of 2024 on new issuances and renewals, and $1.0 million of additional interest expense associated with a $109.8 million increase in the average balance. The average cost of non-brokered time deposits in the second quarter of 2024 increased 16 basis points to 3.55% when compared to the previous quarter.
- A $1.1 million decrease in interest expense on brokered CDs, primarily related to a $73.3 million decrease in the average balance of this portfolio.
- A $0.4 million decrease in interest expense on interest-bearing checking and saving accounts, mainly associated with a decrease in average rates in the second quarter of 2024 due to a change in mix within public sector deposits. The average cost of interest-bearing checking and saving accounts, excluding public sector deposits, remained flat at 0.75% in the second quarter of 2024, when compared to the previous quarter.
Net interest margin for the second quarter of 2024 was 4.22%, a 6 basis points increase when compared to the first quarter of 2024, mostly reflecting a change in asset mix from lower-yielding interest-earning assets to higher-yielding interest-earning assets and higher yields on commercial loans, partially offset by an increase in the cost of interest-bearing deposits.
NON-INTEREST INCOME
The following table sets forth information concerning non-interest income for the last five quarters:
9,725
9,662
9,552
9,287
3,419
2,882
2,094
2,821
2,860
-
1,605
2,786
5,507
2,379
2,790
2,747
11,523
11,312
11,015
10,841
11,135
4,585
4,620
8,459
4,292
8,637
33,609
30,296
Non-interest income decreased by $2.0 million to $32.0 million for the second quarter of 2024, compared to $34.0 million for the first quarter of 2024, mainly due to:
NON-INTEREST EXPENSES
The following table sets forth information concerning non-interest expenses for the last five quarters:
57,456
59,506
55,584
56,535
54,314
21,851
21,381
21,847
21,781
21,097
4,359
3,842
6,725
4,759
4,167
1,149
1,366
952
930
1,231
7,698
7,469
7,003
7,261
7,278
3,584
3,841
3,295
2,831
3,087
5,408
5,129
5,535
5,465
5,124
2,316
3,102
8,454
2,143
2,287
2,293
2,308
2,356
2,352
(3,609
)
(1,452
(1,005
(2,153
(1,984
7,607
5,751
7,360
6,779
6,540
2,261
2,097
2,134
2,219
1,992
6,315
6,598
6,413
5,732
5,576
126,605
116,638
Non-interest expenses amounted to $118.7 million in the second quarter of 2024, a decrease of $2.2 million, from $120.9 million in the first quarter of 2024. Non-interest expenses for the second and first quarters of 2024 include the aforementioned Federal Deposit Insurance Corporation (“FDIC”) special assessment expense of $0.2 million and $0.9 million, respectively. Refer to Non-GAAP Disclosures - Special Items for additional information. On a non-GAAP basis, excluding the effect of this Special Item, adjusted non-interest expenses decreased by $1.5 million mainly due to:
INCOME TAXES
The Corporation recorded an income tax expense of $25.5 million for the second quarter of 2024, compared to $23.9 million for the first quarter of 2024.
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 24.1% for the second quarter of 2024. As of June 30, 2024, the Corporation had a deferred tax asset of $142.7 million, net of a valuation allowance of $141.1 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:
Nonaccrual loans held for investment:
Residential mortgage
31,396
32,685
32,239
31,946
33,252
Construction
4,742
1,498
1,569
1,640
1,677
Commercial mortgage
11,736
11,976
12,205
21,632
21,536
C&I
27,661
25,067
15,250
18,809
9,194
Consumer and finance leases
20,638
21,739
22,444
19,137
16,362
Total nonaccrual loans held for investment
96,173
92,965
83,707
93,164
82,021
OREO
21,682
28,864
32,669
28,563
31,571
Other repossessed property
7,513
6,226
8,115
7,063
5,404
Other assets (1)
1,532
1,551
1,415
1,448
2,111
Total non-performing assets (2)
126,900
129,606
125,906
130,238
121,107
Past due loans 90 days and still accruing (3)
47,173
57,515
59,452
62,892
63,211
Nonaccrual loans held for investment to total loans held for investment
0.78
0.76
0.69
0.70
Nonaccrual loans to total loans
0.75
Non-performing assets to total assets
0.67
0.63
(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 $7.4 million as of June 30, 2024 (March 31, 2024- $8.6 million; December 31, 2023 - $8.3 million; September 30, 2023 - $8.9 million; June 30, 2023 - $9.5 million).
(3)
These include rebooked loans, which were previously pooled into GNMA securities, amounting to $6.8 million as of June 30, 2024 (March 31, 2024- $8.8 million; December 31, 2023 - $7.9 million; September 30, 2023 - $8.5 million; June 30, 2023 - $6.5 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:
The decrease in non-performing assets was mainly driven by:
- A $7.2 million decrease in the OREO portfolio balance, mainly attributable to the aforementioned sale of a $5.3 million commercial real estate OREO property in Puerto Rico.
- A $1.3 million decrease in nonaccrual residential mortgage loans.
- A $1.1 million decrease in nonaccrual consumer loans, consisting mainly of auto loans and finance leases.
- A $5.6 million increase in nonaccrual commercial and construction loans, mainly related to the aforementioned inflow of a $16.5 million commercial relationship in the Puerto Rico region in the food retail industry, partially offset by the restoration to accrual status of a $10.0 million C&I loan in the Florida region in the power generation industry during the second quarter of 2024.
- A $1.3 million increase in other repossessed property, consisting of repossessed automobiles.
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 $147.4 million as of June 30, 2024, an increase of $13.7 million, compared to $133.7 million as of March 31, 2024, mainly due to a $15.2 million increase in consumer loans, mainly in the auto loan portfolio.
Allowance for Credit Losses
The following table summarizes the activity of the ACL for on-balance sheet and off-balance sheet exposures during the second and first quarters of 2024:
Quarter Ended June 30, 2024
Loans and Finance Leases
Debt Securities
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, 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
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
Quarter Ended March 31, 2024
57,397
71,426
133,020
261,843
4,638
2,197
511
269,189
(464
(2,799
16,180
12,917
281
(962
(69
(244
4,710
(15,634
(11,168
2,801,587
5,830,014
3,679,847
12,311,448
2.02
1.26
3.63
2.14
The main variances of the total ACL by main categories are discussed below:
Allowance for Credit Losses for Loans and Finance Leases
As of June 30, 2024, the ACL for loans and finance leases was $254.5 million, a decrease of $9.1 million, from $263.6 million as of March 31, 2024. The ratio of the ACL for loans and finance leases to total loans held for investment was 2.06% as of June 30, 2024, compared to 2.14% as of March 31, 2024. The ratio of the total ACL for loans and finance leases to nonaccrual loans held for investment was 264.66% as of June 30, 2024, compared to 283.54% as of March 31, 2024.
The ACL for residential mortgage loans decreased by $10.6 million, mainly 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.
The ACL for commercial and construction loans decreased by $3.1 million, mainly due to an improvement on the economic outlook of certain macroeconomic variables, particularly in variables associated with commercial real estate property performance.
Meanwhile, the ACL for consumer loans increased by $4.6 million, mainly driven by updated historical loss experience used for determining the ACL estimate resulting in an upward revision of estimated loss severities and higher required reserve levels in the auto loans and finance leases portfolios, increases in portfolio volumes, and increases in historical charge-off levels.
The provision for credit losses on loans and finance leases was $11.9 million for the second quarter of 2024, compared to $12.9 million in the first quarter of 2024.
Net Charge-Offs
The following table presents ratios of annualized net charge-offs (recoveries) to average loans held-in-portfolio for the last five quarters:
0.01
0.03
-0.04
-0.01
0.06
-0.02
-3.18
-0.99
-0.07
0.09
-0.08
-0.59
0.00
0.87
2.38
1.70
2.26
1.79
1.51
0.37
0.48
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 $21.0 million for the second quarter of 2024, or an annualized 0.69% of average loans, compared to $11.2 million, or an annualized 0.37% of average loans, in the first quarter of 2024. The $9.8 million increase in net charge-offs was mainly driven by the effect during the first quarter of 2024 of both the $9.5 million recovery associated with the aforementioned bulk sale of fully charged-off consumer loans and the aforementioned $5.0 million recovery associated with a C&I loan in the Puerto Rico region, partially offset by a decrease in charge-offs in the auto loans and finance leases portfolios and $1.2 million in recoveries of two commercial loans in the Florida region during the second quarter of 2024.
Allowance for Credit Losses for Unfunded Loan Commitments
As of June 30, 2024, the ACL for off-balance sheet credit exposures decreased to $4.5 million, compared to $4.9 million as of March 31, 2024, mainly 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 June 30, 2024, the ACL for debt securities was $1.8 million, of which $1.3 million related to Puerto Rico municipal bonds classified as held-to-maturity, compared to $1.6 million and $1.2 million, respectively, as of March 31, 2024.
LIQUIDITY
Cash and cash equivalents decreased by $98.2 million to $586.3 million as of June 30, 2024. When adding $1.9 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 June 30, 2024, or 13.37% of total assets, compared to $2.7 billion, or 14.45% of total assets as of March 31, 2024. In addition, as of June 30, 2024, the Corporation had $968.1 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 18.50% as of June 30, 2024, compared to 19.60% as of March 31, 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 does not consider borrowing capacity from the FED Discount Window as a primary source of liquidity but had approximately $2.5 billion available for funding under the FED’s Borrower-In-Custody Program as of June 30, 2024. Combined, as of June 30, 2024, the Corporation had $6.0 billion, or 132% of estimated uninsured deposits (excluding fully collateralized government deposits), available to meet liquidity needs. Also, the Corporation has access to financing with other counterparties through repurchase agreements.
The Corporation’s total deposits, excluding brokered CDs, amounted to $15.9 billion as of June 30, 2024, compared to $15.8 billion as of March 31, 2024, which includes $3.2 billion in government deposits that are fully collateralized as of each of June 30, 2024 and March 31, 2024. Excluding fully collateralized government deposits and FDIC-insured deposits, as of June 30, 2024, the estimated amount of uninsured deposits was $4.5 billion, which represents 28.46% of total deposits, compared to $4.4 billion, or 27.93% of total deposits, as of March 31, 2024. Refer to Table 11 in the accompanying tables (Exhibit A) for additional information about the deposits composition.
STATEMENT OF FINANCIAL CONDITION
Total assets were approximately $18.9 billion as of June 30, 2024, down $9.6 million from March 31, 2024.
The following variances within the main components of total assets are noted:
Total liabilities were approximately $17.4 billion as of June 30, 2024, a decrease of $21.3 million from March 31, 2024.
Total stockholders’ equity amounted to $1.5 billion as of June 30, 2024, an increase of $11.7 million from March 31, 2024, mainly driven by net income generated in the second quarter of 2024 and a $10.6 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, partially offset by $50.0 million in stock repurchases under the 2023 capital plan authorization of $225 million and $26.6 million in common stock dividends declared in the second quarter of 2024.
As of June 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 15.77%, 15.77%, 18.21%, and 10.63%, respectively, as of June 30, 2024, compared to CET1 capital, tier 1 capital, total capital, and leverage ratios of 15.90%, 15.90%, 18.36%, and 10.65%, respectively, as of March 31, 2024.
Meanwhile, estimated CET1 capital, tier 1 capital, total capital and leverage ratios of our banking subsidiary, FirstBank, were 15.97%, 16.73%, 17.98%, and 11.29%, respectively, as of June 30, 2024, compared to CET1 capital, tier 1 capital, total capital and leverage ratios of 16.12%, 16.89%, 18.15%, and 11.31%, respectively, as of March 31, 2024.
Tangible Common Equity (Non-GAAP)
On a non-GAAP basis, the Corporation’s tangible common equity ratio increased to 7.66% as of June 30, 2024, compared to 7.59% as of March 31, 2024, mainly driven by the $10.6 million increase in the fair value of available-for-sale debt securities due to changes in market interest rates. 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:
(In thousands, except ratios and per share information)
Tangible Equity:
Total common equity - GAAP
1,491,460
1,479,717
1,497,609
1,303,068
1,397,999
Goodwill
(38,611
Other intangible assets
(9,700
(11,542
(13,383
(15,229
(17,092
Tangible common equity - non-GAAP
1,443,149
1,429,564
1,445,615
1,249,228
1,342,296
Tangible Assets:
Total assets - GAAP
18,881,374
18,890,961
18,909,549
18,594,608
19,152,455
Tangible assets - non-GAAP
18,833,063
18,840,808
18,857,555
18,540,768
19,096,752
Common shares outstanding
163,865
166,707
169,303
174,386
179,757
Tangible common equity ratio - non-GAAP
7.66
7.59
7.67
6.74
7.03
Tangible book value per common share - non-GAAP
8.81
8.58
8.54
7.16
7.47
Exposure to Puerto Rico Government
As of June 30, 2024, the Corporation had $316.7 million of direct exposure to the Puerto Rico government, its municipalities, and public corporations, an increase of $3.0 million when compared to $313.7 million as of March 31, 2024. As of June 30, 2024, approximately $203.1 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 $59.4 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 $42.3 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 $3.1 million (fair value of $1.5 million as of June 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 $1.6 million as of June 30, 2024, of which $0.4 million is due to credit deterioration.
The aforementioned exposure to municipalities in Puerto Rico included $107.5 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 June 30, 2024, the Corporation had $2.7 billion of public sector deposits in Puerto Rico, compared to $2.8 billion as of March 31, 2024. Approximately 23% of the public sector deposits as of June 30, 2024 were from municipalities and municipal agencies in Puerto Rico, and 77% 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 second and first quarters of 2024 and second quarter of 2023 included the following Special Items:
Quarters Ended June 30, 2024 and March 31, 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 $0.9 million ($0.6 million after-tax) were recorded in the second and first quarter of 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.
Quarter Ended June 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 reconciles, for the second and first quarters of 2024, second quarter of 2023, and six-month periods ended June 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.
75,838
73,458
70,655
149,296
141,353
152
947
1,099
(3,600
(1,605
(57
(355
1,350
(412
75,933
74,050
66,800
149,983
137,498
165,543
167,798
179,277
166,670
180,253
0.46
0.44
0.39
0.90
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 six-month periods ended June 30, 2024 and 2023:
84,874
108,990
18,812
4,396
6,311
113,136
110,527
109,997
113,386
117,964
223,663
236,099
2,609
530
(3,389
(4,578
(171
(12,436
5,475
2.4
0.5
-3.0
-3.9
-0.1
-5.3
Conference Call / Webcast Information
First BanCorp.’s senior management will host an earnings conference call and live webcast on Tuesday, July 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 for international callers. The participant access code is 715720. 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 July 23, 2025. A telephone replay will be available one hour after the end of the conference call through August 22, 2024, at (866) 813-9403. The replay access code is 306594.
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, 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 interest rate environment and inflation levels or changes in interest rates 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 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 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 between Israel and Hamas, 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, 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
581,843
680,734
661,925
500
300
3,939
3,485
939
4,439
3,785
1,239
4,957,311
5,047,179
5,229,984
343,168
348,095
351,981
5,300,479
5,395,274
5,581,965
51,037
51,390
49,675
5,351,516
5,446,664
5,631,640
12,130,976
12,047,856
11,923,640
10,392
12,080
7,368
12,141,368
12,059,936
11,931,008
77,895
73,154
77,716
138,554
141,471
142,016
142,725
147,743
150,127
38,611
9,700
11,542
13,383
373,041
258,457
229,215
5,406,054
5,346,326
5,404,121
11,122,902
11,199,185
11,151,864
16,528,956
16,545,511
16,555,985
500,000
161,700
199,258
204,033
194,255
17,389,914
17,411,244
17,411,940
22,366
961,254
959,319
965,707
1,941,980
1,892,714
1,846,112
(790,465
(740,447
(697,406
(643,675
(654,235
(639,170
Table 2 – Condensed Consolidated Statements of Income
540,750
494,600
144,602
93,900
396,148
400,700
20,770
24,847
37,026
721
(136
616
92
(1,031
739
(939
90
188,023
184,353
177,585
372,376
362,968
19,387
18,828
6,301
5,672
22,835
22,053
7,371
10,127
11,384
17,498
20,631
116,962
110,736
43,232
42,283
8,201
8,142
12,431
12,676
11,596
25,107
23,569
10,537
10,236
5,418
4,276
(5,061
(3,980
13,358
11,858
10,863
10,988
9,920
21,065
0.79
Table 3 – Selected Financial Data
0.16
0.14
0.32
0.28
164,945
167,142
178,926
166,043
179,567
9.10
8.88
7.78
18.29
17.54
12.22
1.61
1.56
1.59
1.53
20.80
19.56
19.66
20.17
20.31
3.41
3.35
3.58
3.38
3.71
4.32
4.27
4.35
4.29
4.42
51.23
52.46
47.83
51.84
48.60
7.74
7.99
7.87
7.52
18.21
18.36
19.15
15.77
15.90
16.64
10.63
10.65
10.73
34.80
36.41
35.45
35.59
35.57
18.50
19.60
21.82
13.37
14.45
16.70
75.00
74.48
69.76
28.46
27.93
27.12
2.28
0.53
0.56
56.84
115.66
107.73
77.27
113.76
264.66
283.54
325.60
392.94
437.28
547.60
(4)
(5)
(6)
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 second and first quarters of 2024, the second quarter of 2023, and the six-month periods ended June 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.
(2
(3
3
268,503
252,201
540,748
494,603
4,866
4,813
5,540
9,679
11,887
277,111
273,316
257,741
550,427
506,490
196,518
199,812
396,146
400,703
204,494
201,331
205,352
405,825
412,590
12,240,328
11,555,659
6,709,502
7,283,450
18,949,830
18,839,109
11,853,409
11,067,741
18,884,431
18,858,299
18,788,578
18,871,365
18,673,506
5,351,308
5,308,531
5,968,892
5,329,920
5,983,896
5.72
5.29
1.71
3.27
4.19
5.86
5.79
5.46
5.83
5.42
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)
June 30,
March 31,
667,564
533,747
617,356
9,060
7,254
7,880
5.44
5.45
5.12%
2,619,778
2,684,169
2,909,204
8,947
9,053
10,973
1.37
1.35
3,359,598
3,451,293
3,757,425
14,339
15,238
17,087
1.77
1.82%
34,032
34,635
36,265
818
854
780
9.64
9.89
8.63%
17,637
16,551
13,739
244
66
58
5.55
1.60
1.69%
33,408
32,465
36,778
2.00
1.94
2.01%
2,807,639
2,810,304
2,808,465
40,686
40,473
39,864
5.81
5.78
5.69%
245,219
218,854
149,783
4,955
4,537
2,903
8.10
8.32
7.77%
5,528,607
5,504,782
5,191,040
100,919
99,074
89,290
7.32
7.22
6.90%
873,908
863,685
769,316
17,255
17,127
14,714
7.92
7.95
7.67%
2,817,443
2,810,215
2,672,912
79,888
79,640
74,192
11.37
11.13%
243,703
240,851
220,963
7.96
7.91
7.65%
5.46%
3,002,159
2,892,355
2,511,504
26,588
24,410
15,667
3.55
3.39
2.50%
676,421
749,760
333,557
8,590
9,680
3,761
5.09
5.18
4.52%
7,528,378
7,534,344
7,517,995
28,493
28,935
22,176
1.52
1.54
1.18%
101,397
1,328
5.25%
534,231
5,610
6,048
4.50
4.54%
177,701
3,336
3,350
3,409
8.27
8.31
7.69%
1.88%
3.58%
4.35%
Table 6 – Year-to-Date Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis)
600,655
511,392
16,314
12,530
4.94
2,651,974
2,909,587
18,000
21,738
1.36
3,405,445
3,810,491
29,577
36,483
1.74
1.93
34,334
38,539
1,672
1,201
9.77
6.28
17,094
13,441
310
197
3.64
2.96
65,873
72,149
1.97
2,808,972
2,821,779
81,159
79,658
232,036
147,923
9,492
5,579
8.20
7.61
5,516,695
5,179,448
199,993
175,175
7.27
6.82
868,796
752,501
34,382
28,523
7.94
7.64
2,813,829
2,654,008
159,528
145,406
11.05
484,554
434,341
7.58
2,947,257
2,427,399
50,998
26,449
2.20
713,091
250,588
18,270
5,348
5.14
4.30
7,531,361
7,531,374
57,428
39,692
1.06
96,229
2,397
5.02
581,436
11,220
13,224
4.59
180,715
6,686
6,790
8.29
Table 7 – Loan Portfolio by Geography
2,163,245
161,057
485,364
160,093
3,681
22,183
185,957
1,697,939
62,821
662,549
2,423,309
2,176,489
135,456
942,632
3,254,577
4,034,521
201,958
1,627,364
880,312
2,755,077
68,540
8,070
2,831,687
9,833,155
431,555
2,120,798
9,843,547
12,395,900
2,164,347
162,893
474,347
144,094
3,530
89,664
237,288
1,705,745
63,502
592,484
2,361,731
2,163,439
126,560
940,996
3,230,995
4,013,278
193,592
1,623,144
871,927
2,734,347
67,946
5,627
2,807,920
9,783,899
424,431
2,103,118
9,795,979
12,323,528
2,187,875
168,131
465,720
2,821,726
111,664
3,737
99,376
214,777
1,725,325
65,312
526,446
2,317,083
2,130,368
119,040
924,824
3,174,232
3,967,357
188,089
1,550,646
5,706,092
856,815
2,726,457
68,498
5,895
2,800,850
9,738,504
424,718
2,022,261
12,185,483
9,745,872
12,192,851
Table 8 – Non-Performing Assets by Geography
As of June 30, 2024
Puerto Rico
Virgin Islands
United States
Total
16,895
6,446
8,055
3,776
966
2,865
8,871
26,387
1,274
20,276
326
36
70,199
17,883
8,091
17,413
4,202
67
7,330
183
96,474
22,268
8,158
44,028
3,145
As of March 31, 2024
17,521
6,693
8,471
531
967
3,037
8,939
13,431
1,119
10,517
21,503
203
33
56,023
17,921
19,021
24,577
4,287
5,916
287
23
88,067
22,495
19,044
51,614
5,762
139
As of December 31, 2023
18,324
6,688
7,227
595
974
3,106
9,099
13,414
1,169
667
21,954
419
71
57,393
18,349
7,965
28,382
7,857
252
6
95,047
22,888
7,971
53,308
6,005
Residential pass-through MBS issued by the PRHFA held as part of the available-for-sale debt securities portfolio.
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 $7.4 million as of June 30, 2024 (March 31, 2024 - $8.6 million; December 31, 2023 - $8.3 million).
These include rebooked loans, which were previously pooled into GNMA securities, amounting to $6.8 million as of June 30, 2024 (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.
Table 9 – Allowance for Credit Losses on Loans and Finance Leases
Six-Month Period Ended
265,567
260,464
2,116
(389
(289
(875
14
10
371
24
434
393
40
(32
433
118
626
4,660
(6,218
5,286
(6,246
(13,011
(37,612
(25,979
(19,279
(32,158
(32,548
267,058
0.57x
1.16x
1.08x
0.77x
1.14x
Table 10 – Annualized Net Charge-Offs (Recoveries) to Average Loans
0.01%
0.03%
0.06%
0.02%
-0.02%
-0.99%
-0.59%
-0.07%
-0.01%
-0.04%
Commercial and Industrial
-0.08%
0.87%
-0.33%
0.44%
Consumer loans and finance leases
2.38%
1.70%
2.04%
Total loans
0.69%
0.37%
0.67%
0.53%
0.56%
The $9.5 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 quarter ended March 31, 2024 by 104 basis points and 31 basis points, respectively, and for the six-month period ended June 30, 2024 by 52 basis points and 15 basis points, respectively.
Table 11 – Deposits
As of
(In thousands)
Time deposits
3,037,120
2,961,526
2,833,730
Interest-bearing saving and checking accounts
7,461,003
7,511,973
7,534,800
Non-interest-bearing deposits
Total deposits, excluding brokered CDs (1)
15,904,177
15,819,825
15,772,651
Brokered CDs
624,779
725,686
783,334
Total deposits
Total deposits, excluding brokered CDs and government deposits
12,706,646
12,574,900
12,600,719
As of each of June 30, 2024, March 31, 2024 and December 31, 2023, government deposits amounted to $3.2 billion.
First BanCorp. Ramon Rodriguez Senior Vice President Corporate Strategy and Investor Relations ramon.rodriguez@firstbankpr.com (787) 729-8200 Ext. 82179