The Asian Banker Thursday, 12 December 2024

First Bancorp reports 2017 Q4 financial results

(1)Non-performing assets increased in the quarter by $9.9 million, to $650.6 million as of December 31, 2017, primarily from the identification of storm-impacted commercial credits.
(2)Non-performing loan inflows amounted to $58.3 million, compared to inflows of $103.9 million in the third quarter of 2017.
(3)A net charge-off rate of 1.12%, compared to 0.80% for the third quarter of 2017, an increase driven by charge-offs totaling $8.3 million taken on two collateral-dependent commercial and construction loans in Puerto Rico.


Aurelio Alemán, President and Chief Executive Officer of First BanCorp., commented: “We are quite pleased with our results for the fourth quarter and fiscal year end 2017. Notwithstanding the uncertain macroeconomic backdrop in Puerto Rico, which was further affected by Hurricanes Irma and Maria in September, our institution continues to improve performance metrics and demonstrate the strength of its earnings capabilities. We generated net income for the fourth quarter of $24.2 million, or $0.11 per diluted share, and $67.0 million, or $0.30 per diluted share for the year. Fiscal year results were affected by the hurricanes, including the $66.5 million storm-related provision in the third quarter and $4.8 million in the fourth quarter as well as impact to overall business volumes. Adjusted pre-tax pre-provision income reached $218 million for 2017, a $10 million increase over 2016.

Despite the continued impact of the hurricanes, our fourth quarter and fiscal year 2017 results demonstrate the strength of our franchise. Loan origination volumes in Puerto Rico and the Virgin Islands have been affected by the hurricanes while our steady growth in Florida continues to support our balance sheet. For the year prior to the hurricanes impact, we were averaging over $920 million in origination and renewal volume per quarter compared to an average $640 million over the past two quarters, we expect this to increase in the later part of 2018. During the fourth quarter, deposits net of government and brokered increased by $377 million; $247 million of this increase was noninterest-bearing deposits, mostly in Puerto Rico. Our nonperforming assets increased by $9.9 million related to storm-impacted commercial credits. Since December 31, 2016, we have reduced nonperforming assets by $83.9 million. We will have a better sense of the impact of the storms on our borrowers following the moratorium in the first quarter. While we continue monitoring the impact of the storms on our economy and our customers, we remain confident that our participation in the rebuilding efforts in Puerto Rico will drive better results in 2018.

On the capital front, during the course of 2017 we repurchased $7.3 million of our trust preferred securities; we successfully completed three secondary offerings, through which our private equity owners reduced their positions to below 5% each and the U.S. Treasury exited its position; we continue paying dividends on our preferred stock; and the Federal Reserve lifted the Written Agreement. We continue growing our capital base and at year end our tangible book value per common share grew to $8.28.

Our leadership team is committed to continuing to enhance shareholder value as we rebuild and navigate the Puerto Rico and Virgin Islands economic turnaround and continue to grow our Florida franchise.”

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