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TheStreet Open House

First BanCorp. Announces Earnings For The Quarter Ended June 30, 2012

First BanCorp. (the “Corporation”) (NYSE: FBP), the bank holding company for FirstBank Puerto Rico (“FirstBank” or “the Bank”), today reported a net income of $9.4 million for the second quarter of 2012, or $0.05 per diluted share, an improvement compared to a net loss of $13.2 million, or $0.06 loss per diluted share, for the first quarter of 2012 and a net loss of $14.9 million, or $1.04 loss per diluted share for the second quarter of 2011. The net loss for the six-month period ended June 30, 2012 was $3.8 million, or $0.02 loss per diluted share, compared to a net loss of $43.3 million, or $2.71 loss per diluted share for the same period in 2011.

2012 Second Quarter Highlights Compared with 2012 First Quarter:

  • Net income of $9.4 million is the first profit for a quarter since the 2009 first quarter.
  • Growth in Net Interest Income and Margin:
    • Net interest income, excluding fair value adjustments of $0.5 million, increased by $6.6 million.
    • Net interest margin, excluding fair value adjustments, increased by 24 basis points to 3.44%.
  • Provision for loan and lease losses of $24.9 million, down $11.3 million.
  • Stable non-performing assets levels:
    • Total non-performing assets decreased by $24.2 million.
    • The level of non-performing loans decreased for the ninth consecutive quarter, declining by $53.7 million from the previous quarter to $1.07 billion.
    • Inflows of loans into non-performing status declined by $18.5 million, or 15% from the previous quarter.
  • Increase of $5.5 million in Non-interest income:
    • Non-cash charge associated with the equity in losses of unconsolidated entities of $2.5 million, compared to losses of $6.2 million in the first quarter of 2012.
    • Interchange and other related fees of $1.0 million earned on the newly acquired credit cards portfolio.
  • Increase of $1.7 million in Non-Interest Expenses led by higher losses on real estate owned (REO) operations and credit card processing expenses.
  • Strong capital position:
    • Total capital, Tier 1 capital and Leverage ratios of the Corporation of 17.30%,15.98% and 12.51%, respectively, as of June 30, 2012 compared to 17.36%, 16.04% and 12.31%, respectively, as of March 31, 2012.
    • Total capital, Tier 1 capital and Leverage ratios of the Corporation’s wholly owned banking subsidiary, FirstBank of 16.80%, 15.48% and 12.13%, respectively, as of June 30, 2012 compared to 16.83%, 15.50%, and 11.91%, respectively, as of March 31, 2012.
    • 13.12% Tier 1 common risk-based capital ratio as of June 30, 2012, compared to 13.14% as of March 31, 2012.
    • 10.29% tangible common equity ratio as of June 30, 2012, compared to 10.20% as of March 31, 2012.
  • Growth of $147.7 million, or 2%, in total deposits, excluding brokered certificates of deposit (CDs), while brokered CDs decreased by $155.8 million, or 4%.
  • Re-entered the credit card business with the acquisition of an approximate $406 million portfolio of First Bank-branded credit card accounts from FIA Card Services.
  • Strong loan originations amounted to $838 million for the second quarter.

Aurelio Alemán, President and Chief Executive Officer of First BanCorp., commented: “We are very pleased to report our first quarterly profit in over three years. We are encouraged by the improvements achieved which reflect the prudent and proactive strategies that we have employed, and demonstrate the commitment of the management team and the progress in the execution of our plan to return to profitability. This plan includes the expansion of our products mix, improvement on net interest margin, reduction of our risk profile, and improvements in the quality of earnings and operating metrics.

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