First BanCorp (the “Corporation”) (NYSE: FBP), the bank holding company for FirstBank Puerto Rico (“FirstBank” or “the Bank”), today reported a net loss of $13.2 million for the first quarter of 2012, which included a non-cash charge of $6.2 million related to equity in losses of unconsolidated entities. Excluding this non-cash charge, the net loss would have been $6.9 million compared to a net loss of $14.8 million for the fourth quarter of 2011 and a net loss of $28.4 million for the first quarter of 2011.
2012 First Quarter Highlights Compared with 2011 Fourth Quarter:
Growth in Net Interest Income and Margin:
- Net interest income, excluding fair value adjustments, increased by $1.3 million.
- Net interest margin, excluding fair value adjustments, increased by 21 basis points to 3.20%.
Improvement in Charge-Offs activity and stable non-performing assets
- Net charge-offs decreased by $21.6 million to $46.2 million, or 1.78% (annualized) of average loans, the lowest level since the first quarter of 2009.
- Provision for loan and lease losses decreased for the fifth consecutive quarter, a decrease of $5.8 million to $36.2 million.
- Inflows of loans into non-performing status declined by $50.8 million, or 30% from the previous quarter.
- The level of non-performing loans decreased for the eighth consecutive quarter, declining by $23.7 million from the previous quarter to $1.12 billion.
- Total non-performing assets decreased by $5.0 million.
Improved fee income from diversified sources:
- Revenues from broker-dealer activities increased by $0.9 million.
- Revenues from insurance activities increased by $0.5 million.
- Deposit fee income increased by $0.3 million.
- Decrease of $0.6 million in Non-Interest Expenses.
- Non-cash charge associated with the equity in losses of unconsolidated entities of $6.2 million, compared to gains of $1.7 million in the fourth quarter of 2011.
- Increase of $1.9 million in the Income Tax Expense mainly related to increased income from profitable subsidiaries.
Strong capital position:
- Total capital, Tier 1 capital and Leverage ratios of the Corporation of 17.36%, 16.04% and 12.31%, respectively, up from 17.12%, 15.79% and 11.91%, respectively, as of December 31, 2011.
- Total capital, Tier 1 capital and Leverage ratios of the Corporation’s wholly owned banking subsidiary, FirstBank of 16.83%, 15.50% and 11.91%, respectively, up from 16.58%, 15.25%, and 11.52%, respectively, as of December 31, 2011.
- 13.14% Tier 1 common risk-based capital ratio, up from 12.96% as of December 31, 2011.
- 10.20% tangible common equity ratio, down from 10.25% as of December 31, 2011.
- Growth of $119.6 million, or 2%, in core deposits while reducing its cost by 14 basis points, reflecting increases in retail and commercial demand deposits, as well as in savings accounts, since December 31, 2011. Brokered deposits decreased by $125.6 million, or 3%.
- Strong loan originations amounted to $569 million for the first quarter.
- Total assets of $13.1 billion, a decrease of $41.7 million since the beginning of the year, driven by commercial loans paid-off during the quarter.
Aurelio Alemán, President and Chief Executive Officer of First BanCorp, commented “First quarter results demonstrated continued progress in our operating metrics toward our goal to return to profitability, as we continue making progress in key areas and adding to our revenue growth opportunities. Net interest income and margin increased as a result of improvements in our deposit mix and pricing, commensurate with higher yields on earning assets. Our strategies to increase core deposits were successful, as these grew $119 million, or 2%, and we continue focused on reducing the overall cost of funding. We are encouraged by the growth in retail and commercial deposits as we continue to explore new services to retain current clients and attract new ones. Deposit customers grew by 2% and deposit fee income increased by 9% during the first quarter of 2012, reflecting the strength of our franchise and the comprehensive suite of alternatives available to our customers. We are pleased with the increase in fee income reflecting the diversity of our strategies, including improvements in underwriting fees from our broker-dealer operations and increases in insurance income. In addition, despite the typical seasonal increase in certain expenses, non-interest expenses decreased $0.6 million. We are determined to continue with a strict cost control strategy. Credit quality continued to improve with a $22 million, or 32%, decrease in net charge-offs while the inflows of loans into non-performing and adversely classified categories decreased during the quarter, this trend has contributed to a decrease in the provision for loan losses. Even so, our non-performing assets levels remain elevated and continue to be a challenge in the current economic environment. Improving asset quality continues to be our first priority.”
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