First BanCorp. Announces Earnings for the Quarter Ended September 30, 2021
First BanCorp. (FBP) reported a third quarter net income of $75.7 million ($0.36 per diluted share), up from $70.6 million ($0.33) in Q2 2021. The results include a $12.1 million net benefit from credit loss provisions, though this is lower than the $26.2 million in Q2. The bank incurred $2.3 million in merger costs related to Banco Santander Puerto Rico. Despite a 0.99% annualized net charge-off to average loans ratio, non-performing assets dropped 32.5% to $172.4 million. Total deposits rose by $288.5 million, though total loans decreased by $249.0 million.
- Net income increased by $5.1 million from Q2 2021.
- Non-performing assets decreased by $83.2 million, achieving a decade low of 0.81% of total assets.
- Core deposits increased by $288.5 million.
- Total loans decreased by $249.0 million.
- Net interest margin declined to 3.60% from 3.81% in Q2.
- Annualized net charge-offs increased significantly to 0.99%.
-
Net income of
$75.7 million $0.36 $70.6 million $0.33
- Provision for credit losses was a net benefit of
- Merger and restructuring costs of
-
Income before income taxes of
$112.7 million $110.7 million
-
On a non-GAAP basis, adjusted pre-tax, pre-provision income of
$103.6 million $96.6 million
-
Net interest income remained relatively flat at
$184.7 million $184.8 million
-
Net interest margin was
3.60% for the third quarter of 2021, compared to3.81% for the second quarter of 2021. The decrease was primarily attributable to a change in asset mix resulting from average lower-yielding cash balances and investment securities increasing$1.2 billion 45% of total average interest-earning assets in the third quarter, compared to41% in the second quarter, associated with the growth in average deposits. In addition, the average total loan portfolio balance during the third quarter declined to55% of total average interest-earning assets, compared to59% in the second quarter.
-
Non-interest income of
$29.9 million
-
Non-interest expenses decreased by
$16.2 million $114.0 million $130.2 million $2.3 million $11.0 million $0.6 million $1.1 million $6.9 million
-
Income tax expense was
$37.1 million $40.1 million
- Credit quality variances:
- Non-performing assets decreased by
- An annualized net charge-offs to average loans ratio of
-
Total deposits, excluding brokered deposits and government deposits, increased by
$288.5 million $14.1 billion September 30, 2021 . The increase was primarily related to higher balances in demand deposit accounts in thePuerto Rico andFlorida regions, partially offset by a decrease in retail certificates of deposit (“CDs”).
-
Government deposits decreased in the quarter by
$345.7 million $3.5 billion September 30, 2021 , consisting of decreases of$256.3 million $87.3 million $2.1 million Virgin Islands ,Puerto Rico , andFlorida regions, respectively.
-
Brokered CDs decreased by
$29.1 million $108.6 million September 30, 2021 and non-maturity brokered deposits increased in the quarter by$0.9 million $248.7 million September 30, 2021 .
-
Total loans decreased in the quarter by
$249.0 million $11.2 billion September 30, 2021 . The decrease consisted of reductions of$180.4 million $156.8 million $88.2 million $130.9 million $52.5 million
-
Total loan originations, including refinancings, renewals and draws from existing commitments (other than credit card utilization activity), amounted to
$1.1 billion $87.4 million $74.1 million Florida region. Excluding SBA PPP loan originations, total loan originations decreased by$13.5 million
-
Liquidity levels have remained high with the ratio of cash and liquid securities to total assets increasing to
27.3% as ofSeptember 30, 2021 , compared to26.4% as ofJune 30, 2021 .
-
During the third quarter, First BanCorp. repurchased 4.16 million shares of its common stock through private and open market transactions for a total purchase price of approximately
$50 million $300 million
-
Capital ratios remained higher than required regulatory levels for bank holding companies and well-capitalized banks. Estimated total capital, common equity tier 1 capital (“CET1”), tier 1 capital, and leverage ratios of
20.67% ,17.62% ,17.92% , and10.17% , respectively, as ofSeptember 30, 2021 . The tangible common equity ratio was9.87% as ofSeptember 30, 2021 .
Aurelio Alemán, President and Chief Executive Officer of First BanCorp., commented: “Financial benefits of our fully integrated and expanded franchise are well underway as we report strong third quarter results. We generated
Early in the third quarter, we completed the integration of the acquired operations, which included the conversion of all deposit, debit card, online banking, and cash management platforms, leading to the achievement of efficiencies and synergies planned as part of the transaction. Adoption of electronic channels continues to grow significantly, with digital banking users registering an organic increase of
Finally, we continue to return capital to our shareholders. We repurchased 4.2 million shares amounting to approximately
NON-GAAP DISCLOSURES
This press release includes certain non-GAAP financial measures, including adjusted net income, adjusted pre-tax, pre-provision income, adjusted net interest income and margin, adjusted non-interest expenses, tangible common equity, tangible book value per common share, certain capital ratios, and certain other financial measures that exclude the effect of items that management believes are not reflective of core operating performance, are not expected to reoccur with any regularity or may reoccur at uncertain times and in uncertain amounts (the “Special Items”), and should be read in conjunction with the discussion below in Basis of Presentation – Use of Non-GAAP Financial Measures, 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 third and second quarters of 2021 and third quarter of 2020 included the following significant Special Items:
Quarter ended
- Merger and restructuring costs of
- Costs of
Quarter ended
- Merger and restructuring costs of
- Costs of
Quarter ended
- Merger and restructuring costs of
- An
- A
- Costs of
NET INCOME AND RECONCILIATION TO ADJUSTED NET INCOME (NON-GAAP)
Net income was
| Quarter Ended | Quarter Ended | Quarter Ended | |||||||||||
| (In thousands, except per share information) | |||||||||||||
| Net income, as reported (GAAP) | $ |
75,678 |
|
$ |
70,558 |
|
$ |
28,613 |
|
||||
| Adjustments: | |||||||||||||
| Merger and restructuring costs |
|
2,268 |
|
|
11,047 |
|
|
10,441 |
|
||||
| Partial reversal of deferred tax asset valuation allowance |
|
- |
|
|
- |
|
|
(8,000 |
) |
||||
| Gain on sales of investment securities |
|
- |
|
|
- |
|
|
(5,288 |
) |
||||
| Gain on early extinguishment of debt |
|
- |
|
|
- |
|
|
(94 |
) |
||||
| COVID-19 pandemic-related expenses |
|
640 |
|
|
1,105 |
|
|
962 |
|
||||
| Income tax impact of adjustments (1) |
|
(1,091 |
) |
|
(4,557 |
) |
|
(4,276 |
) |
||||
| Adjusted net income (Non-GAAP) | $ |
77,495 |
|
$ |
78,153 |
|
$ |
22,358 |
|
||||
| Preferred stock dividends |
|
(669 |
) |
|
(669 |
) |
|
(669 |
) |
||||
| Adjusted net income attributable to common stockholders (Non-GAAP) | $ |
76,826 |
|
$ |
77,484 |
|
$ |
21,689 |
|
||||
| Weighted-average diluted shares outstanding | $ |
207,796 |
|
|
214,609 |
|
$ |
217,715 |
|
||||
| Earnings Per Share - diluted (GAAP) | $ |
0.36 |
|
$ |
0.33 |
|
$ |
0.13 |
|
||||
| Adjusted Earnings Per Share - diluted (Non-GAAP) | $ |
0.37 |
|
$ |
0.36 |
|
$ |
0.10 |
|
||||
(1) See Basis of Presentation for the individual tax impact related to reconciling items. |
|||||||||||||
INCOME BEFORE INCOME TAXES AND RECONCILIATION TO ADJUSTED PRE-TAX, PRE-PROVISION INCOME (NON-GAAP)
Income before income taxes was
| (Dollars in thousands) | Quarter Ended | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
2021 |
|
2021 |
|
2021 |
|
2020 |
|
2020 |
||||||||||||
| Income before income taxes | $ |
112,735 |
|
$ |
110,650 |
|
$ |
89,172 |
|
$ |
65,514 |
|
$ |
24,208 |
|
|||||
| Less/Add: Provision for credit losses (benefit) expense |
|
(12,082 |
) |
|
(26,155 |
) |
|
(15,252 |
) |
|
7,691 |
|
|
46,914 |
|
|||||
| Add/Less: Net loss (gain) on sales of investment securities |
|
- |
|
|
- |
|
|
- |
|
|
182 |
|
|
(5,288 |
) |
|||||
| Less: Gain on early extinguishment of debt |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(94 |
) |
|||||
| Add: COVID-19 pandemic-related expenses |
|
640 |
|
|
1,105 |
|
|
1,209 |
|
|
1,125 |
|
|
962 |
|
|||||
| Add: Merger and restructuring costs |
|
2,268 |
|
|
11,047 |
|
|
11,267 |
|
|
12,321 |
|
|
10,441 |
|
|||||
| Adjusted pre-tax, pre-provision income (1) | $ |
103,561 |
|
$ |
96,647 |
|
$ |
86,396 |
|
$ |
86,833 |
|
$ |
77,143 |
|
|||||
| Change from most recent prior quarter (in dollars) | $ |
6,914 |
|
$ |
10,251 |
|
$ |
(437 |
) |
$ |
9,690 |
|
$ |
9,809 |
|
|||||
| Change from most recent prior quarter (in percentage) |
|
7.2 |
% |
|
11.9 |
% |
|
-0.5 |
% |
|
12.6 |
% |
|
14.6 |
% |
|||||
| (1) Non-GAAP financial measure. See Basis of Presentation below for definition and additional information about this non-GAAP financial measure. | ||||||||||||||||||||
NET INTEREST INCOME
The following table sets forth information concerning net interest income for the last five quarters:
| (Dollars in thousands) | Quarter Ended | |||||||||||||||||||
2021 |
2021 |
2021 |
2020 |
2020 |
||||||||||||||||
| Net Interest Income | ||||||||||||||||||||
| Interest income | $ |
200,172 |
|
$ |
201,459 |
|
$ |
194,642 |
|
$ |
198,700 |
|
$ |
170,402 |
|
|||||
| Interest expense |
|
15,429 |
|
|
16,676 |
|
|
18,377 |
|
|
20,933 |
|
|
21,706 |
|
|||||
| Net interest income | $ |
184,743 |
|
$ |
184,783 |
|
$ |
176,265 |
|
$ |
177,767 |
|
$ |
148,696 |
|
|||||
| Average Balances | ||||||||||||||||||||
| Loans and leases | $ |
11,223,926 |
|
$ |
11,560,731 |
|
$ |
11,768,266 |
|
$ |
11,843,157 |
|
$ |
10,163,671 |
|
|||||
| Total securities, other short-term investments and interest-bearing cash balances |
|
9,134,121 |
|
|
7,898,975 |
|
|
6,510,960 |
|
|
6,057,360 |
|
|
4,871,710 |
|
|||||
| Average interest-earning assets | $ |
20,358,047 |
|
$ |
19,459,706 |
|
$ |
18,279,226 |
|
$ |
17,900,517 |
|
$ |
15,035,381 |
|
|||||
| Average interest-bearing liabilities | $ |
11,718,557 |
|
$ |
12,118,631 |
|
$ |
11,815,179 |
|
$ |
11,704,166 |
|
$ |
9,732,691 |
|
|||||
| Average Yield/Rate | ||||||||||||||||||||
| Average yield on interest-earning assets - GAAP |
|
3.90 |
% |
|
4.15 |
% |
|
4.32 |
% |
|
4.42 |
% |
|
4.51 |
% |
|||||
| Average rate on interest-bearing liabilities - GAAP |
|
0.52 |
% |
|
0.55 |
% |
|
0.63 |
% |
|
0.71 |
% |
|
0.89 |
% |
|||||
| Net interest spread - GAAP |
|
3.38 |
% |
|
3.60 |
% |
|
3.69 |
% |
|
3.71 |
% |
|
3.62 |
% |
|||||
| Net interest margin - GAAP |
|
3.60 |
% |
|
3.81 |
% |
|
3.91 |
% |
|
3.95 |
% |
|
3.93 |
% |
|||||
Net interest income amounted to
-
A
$4.8 million $3.6 million $2.9 million $1.4 million $109.6 million
These variances were partially offset by a$2.8 million $0.7 million
-
A
$1.7 million
Partially offset by:
-
A
$2.6 million $82.3 million $1.9 million $0.4 million
-
A
$2.1 million $1.8 million U.S. agencies MBS premium amortization expense due to lower prepayments. In addition, there was an increase in interest income of approximately$0.5 million $441.5 million U.S. government and agencies debentures.
-
A
$1.2 million $1.4 million $724 million $0.2 million
-
A
$0.5 million $774.1 million Federal Reserve Bank of New York (the “FED”) as well as the increase in the rate paid by the FED to such balances from0.10% to0.15% that took effect onJune 17, 2021 .
Net interest margin was
The third quarter results continue to reflect the effect of SBA PPP loans. Interest and realized deferred fees on SBA PPP loans in the third quarter of 2021 amounted to
NON-INTEREST INCOME
The following table sets forth information concerning non-interest income for the last five quarters:
| Quarter Ended | ||||||||||||||||
|
|
|
|
|
||||||||||||
| (In thousands) | 2021 |
2021 |
2021 |
2020 |
2020 |
|||||||||||
| Service charges on deposit accounts | $ |
8,690 |
$ |
8,788 |
$ |
8,304 |
$ |
8,332 |
|
$ |
5,848 |
|||||
| Mortgage banking activities |
|
6,098 |
|
6,404 |
|
7,273 |
|
7,551 |
|
|
7,099 |
|||||
| Net (loss) gain on investments |
|
- |
|
- |
|
- |
|
(182 |
) |
|
5,288 |
|||||
| Gain on early extinguishment of debt |
|
- |
|
- |
|
- |
|
- |
|
|
94 |
|||||
| Other operating income |
|
15,158 |
|
14,692 |
|
15,379 |
|
14,499 |
|
|
11,605 |
|||||
| Non-interest income | $ |
29,946 |
$ |
29,884 |
$ |
30,956 |
$ |
30,200 |
|
$ |
29,934 |
|||||
Non-interest income amounted to
-
A
$0.2 million
-
A
$0.2 million
Partially offset by:
-
A
$0.3 million $1.1 million $0.6 million $0.2 million U.S. government-sponsored agencies during the third quarter of 2021 amounted to$109.6 million $4.5 million $0.3 million $146.7 million $5.6 million $0.2 million
NON-INTEREST EXPENSES
The following table sets forth information concerning non-interest expenses for the last five quarters:
| Quarter Ended | |||||||||||||||||
|
|
|
|
|
|||||||||||||
| (In thousands) | 2021 |
2021 |
2021 |
2020 |
2020 |
||||||||||||
| Employees' compensation and benefits | $ |
50,220 |
|
$ |
49,714 |
|
$ |
50,842 |
$ |
51,618 |
$ |
43,063 |
|||||
| Occupancy and equipment |
|
23,306 |
|
|
24,116 |
|
|
24,242 |
|
24,066 |
|
19,064 |
|||||
| Deposit insurance premium |
|
1,381 |
|
|
1,922 |
|
|
1,988 |
|
1,900 |
|
1,630 |
|||||
| Other insurance and supervisory fees |
|
2,249 |
|
|
2,360 |
|
|
2,362 |
|
2,720 |
|
1,389 |
|||||
| Taxes, other than income taxes |
|
5,238 |
|
|
5,576 |
|
|
6,199 |
|
5,795 |
|
4,510 |
|||||
| Professional fees: | |||||||||||||||||
| Collections, appraisals and other credit-related fees |
|
1,451 |
|
|
1,080 |
|
|
1,310 |
|
1,218 |
|
1,262 |
|||||
| Outsourcing technology services |
|
8,878 |
|
|
11,946 |
|
|
12,373 |
|
12,524 |
|
6,949 |
|||||
| Other professional fees |
|
3,225 |
|
|
3,738 |
|
|
4,018 |
|
3,567 |
|
3,352 |
|||||
| Credit and debit card processing expenses |
|
5,573 |
|
|
6,795 |
|
|
4,278 |
|
6,397 |
|
4,859 |
|||||
| Business promotion |
|
3,370 |
|
|
3,225 |
|
|
2,970 |
|
3,163 |
|
3,046 |
|||||
| Communications |
|
2,250 |
|
|
2,407 |
|
|
2,462 |
|
2,462 |
|
2,246 |
|||||
| Net (gain) loss on OREO operations |
|
(2,288 |
) |
|
(139 |
) |
|
1,898 |
|
580 |
|
1,019 |
|||||
| Merger and restructuring costs |
|
2,268 |
|
|
11,047 |
|
|
11,267 |
|
12,321 |
|
10,441 |
|||||
| Other |
|
6,915 |
|
|
6,385 |
|
|
7,092 |
|
6,431 |
|
4,678 |
|||||
| Total | $ |
114,036 |
|
$ |
130,172 |
|
$ |
133,301 |
$ |
134,762 |
$ |
107,508 |
|||||
Non-interest expenses amounted to
-
Merger and restructuring costs associated with the acquisition of BSPR of
$2.3 million $11.0 million
-
COVID-19 pandemic-related expenses of
$0.6 million $1.1 million
On a non-GAAP basis, adjusted non-interest expenses, excluding the effect of the Special Items mentioned above, amounted to
-
A
$3.2 million $2.3 million $0.5 million
-
A
$2.1 million $0.8 million $20.7 million Puerto Rico region.
-
A
$1.2 million $1.4 million
-
A
$0.5 million FDIC insurance premium expense, mainly related to improvements in earnings trend and risk profile of the Bank’s balance sheet.
-
A
$0.4 million $0.3 million Virgin Islands .
-
A
$0.3 million
Partially offset by:
-
A
$0.5 million $1.2 million
-
A
$0.5 million
The adjusted non-interest expense financial metric presented above is a non-GAAP financial measure. See Basis of Presentation for additional information and the reconciliation of total non-interest expense and certain non-interest expense components to adjusted total non-interest expense and certain adjusted non-interest expense components.
INCOME TAXES
The Corporation recorded an income tax expense of
The Corporation’s estimated effective tax rate, excluding entities with pre-tax losses from which a tax benefit cannot be recognized and discrete items, remained relatively unchanged at
CREDIT QUALITY
Non-Performing Assets
The following table sets forth information concerning non-performing assets for the last five quarters:
| (Dollars in thousands) |
|
|
|
|
|
|||||||||||||||
2021 |
2021 |
2021 |
2020 |
2020 |
||||||||||||||||
| Nonaccrual loans held for investment: | ||||||||||||||||||||
| Residential mortgage | $ |
60,589 |
|
$ |
121,695 |
|
$ |
132,339 |
|
$ |
125,367 |
|
$ |
122,797 |
|
|||||
| Commercial mortgage |
|
26,812 |
|
|
27,242 |
|
|
28,548 |
|
|
29,611 |
|
|
29,651 |
|
|||||
| Commercial and Industrial |
|
18,990 |
|
|
18,835 |
|
|
19,128 |
|
|
20,881 |
|
|
20,882 |
|
|||||
| Construction |
|
6,093 |
|
|
6,175 |
|
|
6,378 |
|
|
12,971 |
|
|
13,090 |
|
|||||
| Consumer and Finance leases |
|
9,657 |
|
|
8,703 |
|
|
14,708 |
|
|
16,259 |
|
|
14,870 |
|
|||||
| Total nonaccrual loans held for investment |
|
122,141 |
|
|
182,650 |
|
|
201,101 |
|
|
205,089 |
|
|
201,290 |
|
|||||
| OREO |
|
43,798 |
|
|
66,586 |
|
|
79,207 |
|
|
83,060 |
|
|
89,049 |
|
|||||
| Other repossessed property |
|
3,550 |
|
|
3,470 |
|
|
4,544 |
|
|
5,357 |
|
|
3,006 |
|
|||||
| Other assets (1) |
|
2,894 |
|
|
2,928 |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Total non-performing assets (2) | $ |
172,383 |
|
$ |
255,634 |
|
$ |
284,852 |
|
$ |
293,506 |
|
$ |
293,345 |
|
|||||
| Past-due loans 90 days and still accruing (3) | $ |
148,322 |
|
$ |
144,262 |
|
$ |
160,884 |
|
$ |
146,889 |
|
$ |
160,066 |
|
|||||
| Nonaccrual loans held for investment to total loans held for investment |
|
1.10 |
% |
|
1.60 |
% |
|
1.73 |
% |
|
1.74 |
% |
|
1.70 |
% |
|||||
| Nonaccrual loans to total loans |
|
1.09 |
% |
|
1.60 |
% |
|
1.72 |
% |
|
1.73 |
% |
|
1.69 |
% |
|||||
| Non-performing assets to total assets |
|
0.81 |
% |
|
1.20 |
% |
|
1.47 |
% |
|
1.56 |
% |
|
1.57 |
% |
|||||
(1) |
Residential pass-through MBS issued by the |
|||||||||
(2) |
Excludes purchased-credit deteriorated ("PCD") loans previously accounted for under Accounting Standards Codification ("ASC") 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans accounted for under ASC 310-30 as "units of account" both at the time of adoption of the current expected credit loss ("CECL") accounting standard on |
|||||||||
(3) |
These include rebooked loans, which were previously pooled into |
|||||||||
Variances in credit quality metrics:
-
Total non-performing assets decreased by
$83.2 million $172.4 million September 30, 2021 , compared to$255.6 million June 30, 2021 . Total nonaccrual loans held for investment decreased by$60.5 million $122.1 million September 30, 2021 , compared to$182.6 million June 30, 2021 .
The decrease in non-performing assets consisted of:
- A
Early in
- A
- A
- A
-
Inflows to nonaccrual loans held for investment were
$16.9 million $0.1 million $16.8 million $9.0 million $1.1 million $7.9 million $6.3 million $0.1 million $6.4 million $1.6 million $0.9 million $2.5 million
-
Adversely classified commercial and construction loans increased by
$29.8 million $242.3 million September 30, 2021 , mostly driven by the downgrade of a$28.3 million Florida region engaged in the travel and entertainment industry.
-
Total Troubled Debt Restructured (“TDR”) loans held for investment were
$428.6 million September 30, 2021 , down$21.5 million June 30, 2021 . The decrease was driven by the approximately$29.9 million $375.7 million September 30, 2021 . These figures exclude$57.7 million U.S. federal government (i.e.,Federal Housing Administration andVeterans Administration loans).
Early Delinquency, CARES Act Modifications, and SBA PPP Loans
Total loans in early delinquency (i.e., 30-89 days past due loans, as defined in regulatory reporting instructions) amounted to
- Commercial and construction loans in early delinquency increased in the third quarter by
- Residential mortgage loans in early delinquency decreased by
As of
As of
Allowance for Credit Losses
The following table summarizes the activity of the allowance for credit losses (“ACL”) for on-balance sheet and off-balance sheet exposures during the third and second quarters of 2021:
| Quarter Ended |
||||||||||||||||||||
| Loans and | Unfunded Loan | Held-to-Maturity | Available-for-Sale | |||||||||||||||||
| Allowance for Credit Losses | Finance Leases | Commitments | Total | |||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Allowance for credit losses, beginning balance | $ |
324,958 |
|
$ |
2,730 |
|
$ |
10,685 |
|
$ |
1,166 |
|
|
339,539 |
|
|||||
| Provision for credit losses benefit |
|
(8,734 |
) |
|
(971 |
) |
|
(2,368 |
) |
|
(9 |
) |
|
(12,082 |
) |
|||||
| Net charge-offs |
|
(27,864 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(27,864 |
) |
|||||
| Allowance for credit losses, end of period | $ |
288,360 |
|
$ |
1,759 |
(1) |
|
$ |
8,317 |
|
$ |
1,157 |
|
$ |
299,593 |
|
||||
| (1) Included in accounts payable and other liabilities. | ||||||||||||||||||||
| Quarter Ended |
||||||||||||||||||||
| Loans and | Unfunded Loan | Held-to-Maturity | Available-for-Sale | |||||||||||||||||
| Allowance for Credit Losses | Finance Leases | Commitments | Total | |||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Allowance for credit losses, beginning balance | $ |
358,936 |
|
$ |
4,399 |
|
$ |
8,869 |
|
$ |
1,183 |
|
$ |
373,387 |
|
|||||
| Provision for credit losses (benefit) expense |
|
(26,302 |
) |
|
(1,669 |
) |
|
1,816 |
|
|
- |
|
|
(26,155 |
) |
|||||
| Net charge-offs |
|
(7,676 |
) |
|
- |
|
|
- |
|
|
(17 |
) |
|
(7,693 |
) |
|||||
| Allowance for credit losses, end of period | $ |
324,958 |
|
$ |
2,730 |
(1) |
|
$ |
10,685 |
|
$ |
1,166 |
|
$ |
339,539 |
|
||||
| (1) Included in accounts payable and other liabilities. | ||||||||||||||||||||
The main variances of the total ACL by main categories are discussed below:
Allowance for Credit Losses for Loans and Finance Leases
The following table sets forth information concerning the ACL for loans and finance leases during the periods indicated:
| Quarter Ended | ||||||||||||||||||||
| (Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|||||||||||
2021 |
|
2021 |
|
2021 |
|
2020 |
|
2020 |
||||||||||||
| Allowance for credit losses, beginning balance | $ |
324,958 |
|
$ |
358,936 |
|
$ |
385,887 |
|
$ |
384,718 |
|
$ |
319,297 |
|
|||||
| Provision for credit losses (benefit) expense |
|
(8,734 |
) |
|
(26,302 |
) |
|
(14,443 |
) |
|
10,186 |
|
|
48,078 |
|
|||||
| Initial allowance on PCD loans |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
28,744 |
|
|||||
| Net (charge-offs) recoveries of loans: | ||||||||||||||||||||
| Residential mortgage |
|
(23,450 |
)(1) |
|
|
(1,987 |
) |
|
(2,092 |
) |
|
(1,642 |
) |
|
(2,283 |
) |
||||
| Commercial mortgage |
|
(386 |
) |
|
(31 |
) |
|
(740 |
) |
|
1,769 |
|
|
(3,104 |
) |
|||||
| Commercial and Industrial |
|
327 |
|
|
5,809 |
|
|
(545 |
) |
|
(367 |
) |
|
(70 |
) |
|||||
| Construction |
|
35 |
|
|
38 |
|
|
(9 |
) |
|
102 |
|
|
36 |
|
|||||
| Consumer and finance leases |
|
(4,390 |
) |
|
(11,505 |
) |
|
(9,122 |
) |
|
(8,879 |
) |
|
(5,980 |
) |
|||||
| Net charge-offs |
|
(27,864 |
) |
|
(7,676 |
) |
|
(12,508 |
) |
|
(9,017 |
) |
|
(11,401 |
) |
|||||
| Allowance for credit losses on loans and finance leases, end of period | $ |
288,360 |
|
$ |
324,958 |
|
$ |
358,936 |
|
$ |
385,887 |
|
$ |
384,718 |
|
|||||
| Allowance for credit losses on loans and finance leases to period end total loans held for investment |
|
2.59 |
% |
|
2.85 |
% |
|
3.08 |
% |
|
3.28 |
% |
|
3.25 |
% |
|||||
| Net charge-offs (annualized) to average loans outstanding during the period |
|
0.99 |
% |
|
0.27 |
% |
|
0.43 |
% |
|
0.30 |
% |
|
0.45 |
% |
|||||
| Provision for credit losses on loans and finance leases to net charge-offs during the period | -0.31x |
-3.43x |
-1.15x |
1.13x |
4.22x |
|||||||||||||||
| __________________________________________ | |
(1) |
Includes net charge-offs totaling |
-
As of
September 30, 2021 , the ACL for loans and finance leases was$288.4 million $36.6 million June 30, 2021 . The reduction of the ACL for residential mortgage loans was$29.7 million $20.9 million $8.6 million $1.7 million
-
The provision for credit losses on loans and finance leases was a net benefit of
$8.7 million $26.3 million
| Quarter Ended |
||||||||||||||
| (In thousands) | Residential Mortgage Loans |
Commercial Loans (including Commercial Mortgage, C&I, and Construction) |
Consumer Loans and Finance Leases |
Total | ||||||||||
| Provision for credit losses on loans and finance leases (benefit) expense | $ |
(6,206 |
) |
$ |
(8,582 |
) |
$ |
6,054 |
$ |
(8,734 |
) |
|||
| Quarter Ended |
||||||||||||||
| (In thousands) | Residential Mortgage Loans |
Commercial Loans (including Commercial Mortgage, C&I, and Construction) |
Consumer Loans and Finance Leases |
Total | ||||||||||
| Provision for credit losses on loans and finance leases expense (benefit) | $ |
825 |
|
$ |
(27,921 |
) |
$ |
794 |
$ |
(26,302 |
) |
|||
- Provision for credit losses for the commercial and construction loan portfolio was a net benefit of
- Provision for credit losses for the residential mortgage loan portfolio was a net benefit of
- Provision for credit losses for the consumer loans and finance leases portfolio was
-
The ratio of the ACL for loans and finance leases to total loans held for investment was
2.59% as ofSeptember 30, 2021 , compared to2.85% as ofJune 30, 2021 . The decrease was mainly driven by the bulk sale of residential nonaccrual loans, as well as releases associated with improvements in the expectations in the outlook of macroeconomic factors. No ACL was allocated to SBA PPP loans since they are fully guaranteed. On a non-GAAP basis, excluding SBA PPP loans, the ratio of the ACL for loans and finance leases to adjusted total loans held for investment was2.64% as ofSeptember 30, 2021 , compared to2.94% as ofJune 30, 2021 . The ratio of the total ACL for loans and finance leases to nonaccrual loans held for investment was236.09% as ofSeptember 30, 2021 , compared to177.91% as ofJune 30, 2021 .
The following table sets forth information concerning the composition of the Corporation’s ACL for loans and finance leases as of
| (Dollars in thousands) | Residential Mortgage Loans |
Commercial Loans (including Commercial Mortgage, C&I, and Construction) |
Consumer and Finance Leases |
Total | |||||||||||||
| As of |
|||||||||||||||||
| Total loans held for investment: | |||||||||||||||||
| Amortized cost | $ |
3,095,015 |
|
$ |
5,239,422 |
|
$ |
2,806,145 |
|
$ |
11,140,582 |
|
|||||
| Allowance for credit losses on loans |
|
83,226 |
|
|
106,073 |
|
|
99,061 |
|
|
288,360 |
|
|||||
Allowance for credit losses on loans to amortized cost |
|
2.69 |
% |
|
2.02 |
% |
|
3.53 |
% |
|
2.59 |
% |
|||||
| As of |
|||||||||||||||||
| Total loans held for investment: | |||||||||||||||||
| Amortized cost | $ |
3,253,857 |
|
$ |
5,415,784 |
|
$ |
2,717,953 |
|
$ |
11,387,594 |
|
|||||
| Allowance for credit losses on loans |
|
112,882 |
|
|
114,679 |
|
|
97,397 |
|
|
324,958 |
|
|||||
| Allowance for credit losses on loans to amortized cost |
|
3.47 |
% |
|
2.12 |
% |
|
3.58 |
% |
|
2.85 |
% |
|||||
Net Charge-Offs
The following table presents ratios of annualized net charge-offs to average loans held-in-portfolio:
| Quarter Ended | ||||||||||||
2021 |
2021 |
2021 |
2020 |
2020 |
||||||||
| Residential mortgage |
|
(1) |
|
|
|
|
||||||
| Commercial mortgage |
|
|
|
- |
|
|||||||
| Commercial and Industrial |
- |
- |
|
|
|
|||||||
| Construction |
- |
- |
|
- |
- |
|||||||
| Consumer and finance leases |
|
|
|
|
|
|||||||
| Total loans |
|
(1) |
|
|
|
|
||||||
(1) |
Includes net charge-offs totaling |
|
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
-
A
$21.5 million $23.1 million
-
A
$5.8 million $24 thousand $5.8 million $5.2 million Puerto Rico region.
-
A
$7.1 million
Allowance for Credit Losses for Unfunded Loan Commitments
The Corporation estimates expected credit losses over the contractual period during which the Corporation is exposed to credit risk as a result of a contractual obligation to extend credit, such as pursuant to unfunded loan commitments and standby letters of credit for commercial and construction loans, unless the obligation is unconditionally cancellable by the Corporation. The ACL for off-balance sheet credit exposures is adjusted as a provision for credit loss expense. As of
Allowance for Credit Losses for
As of
Allowance for Credit Losses for
As of
STATEMENT OF FINANCIAL CONDITION
Total assets were approximately
The following variances within the main components of total assets are noted:
-
A
$130.6 million U.S. government and agencies securities, and the repurchase of 4.16 million shares of common stock in the third quarter for a total purchase price of approximately$50 million
-
A
$277.1 million U.S. government and agencies securities totaling$609.7 million $267.6 million U.S. agencies MBS, approximately$27.3 million U.S. agencies bonds that matured or were called prior to maturity during the third quarter, an$18.7 million $12.5 million Puerto Rico municipal bonds.
-
A
$249.0 million $204.8 million Puerto Rico region,$26.9 million Florida region, and$17.3 million Virgin Islands region. On a portfolio basis, the decrease consisted of reductions of$180.4 million $130.9 million $156.8 million $88.2 million $107.7 million $130.9 million $35.5 million
The decrease in thePuerto Rico region consisted of reductions of$158.9 million $80.3 million $137.0 million $91.1 million $80.3 million Puerto Rico region decreased by$78.6 million $35.5 million $18.0 million $11.7 million Puerto Rico . The decline in the residential mortgage loan portfolio in thePuerto Rico region reflects the$52.5 million 84% of the$115.5 million Puerto Rico region during the third quarter of 2021 consisted of conforming loan originations and refinancings. Conforming mortgage loans are generally originated with the intent to sell in the secondary market to GNMA andU.S. government-sponsored agencies. The growth in consumer loans was driven by new loan originations, primarily auto loans and finance leases, partially offset by reductions in the balances of personal loans and credit card loans.
The decrease in total loans in theFlorida region consisted of reductions of$12.8 million $38.1 million $11.6 million $2.5 million Florida region increased by$25.3 million $4.0 million
The decrease in total loans in theVirgin Islands region consisted of reductions of$8.2 million $8.7 million $12.6 million $0.4 million
Total loan originations, including refinancings, renewals and draws from existing commitments (excluding credit card utilization activity), amounted to$1.1 billion $87.4 million $74.1 million $13.5 million $24.4 million Florida region, as well as lower utilizations of commercial lines of credit in thePuerto Rico andFlorida regions during the third quarter; (ii) a$9.9 million Puerto Rico region; and (iii) a$20.8 million
Total loan originations in thePuerto Rico region amounted to$828.6 million $877.7 million Puerto Rico region during the second quarter of 2021 included$57.5 million Puerto Rico region increased by$8.2 million $22.2 million $11.4 million $2.6 million $39.2 million Puerto Rico municipalities.
Total loan originations in theFlorida region amounted to$241.6 million $264.7 million Florida region during the second quarter of 2021 included$9.1 million Florida region decreased by$14.0 million $14.8 million $34.1 million $1.1 million $0.3 million
Total loan originations in theVirgin Islands region amounted to$20.1 million $35.3 million Virgin Islands region during the second quarter of 2021 included$7.5 million Virgin Islands region decreased by$7.7 million $7.1 million $0.4 million $1.0 million
Total liabilities were approximately
The decrease in total liabilities was mainly due to:
-
A
$345.7 million $256.3 million Virgin Islands region,$87.3 million Puerto Rico region, and$2.1 million Florida region. The decrease in theVirgin Islands region was driven by a portion of American Rescue Plan Act (“ARPA”) federal funds previously received by the central government moved to another depository institution in the third quarter. The decrease in thePuerto Rico region reflects reduction in balances of transactional accounts of public corporations, agencies of the central government, and certain municipalities.
-
A
$28.2 million $29.1 million 1.91% , that were paid off during the third quarter, partially offset by a$0.9 million
Partially offset by:
-
A
$288.5 million $202.3 million Puerto Rico region and$91.8 million Florida region, partially offset by a decrease of$5.6 million Virgin Islands region. On a deposit type basis, the increase was primarily reflected in both commercial and retail demand deposits, partially offset by a decrease in retail CDs. The system conversion resulted in a net reclassification of approximately$724 million July 12, 2021 .
Total stockholders’ equity amounted to
As of
Meanwhile, the estimated common equity tier 1 capital, tier 1 capital, total capital and leverage ratios of our banking subsidiary,
Tangible Common Equity
The Corporation’s tangible common equity ratio increased to
The following table presents a reconciliation of the Corporation’s tangible common equity and tangible assets over the last five quarters to the most comparable GAAP items:
| (In thousands, except ratios and per share information) | ||||||||||||||||||||
|
|
|
|
|
||||||||||||||||
2021 |
2021 |
2021 |
2020 |
2020 |
||||||||||||||||
| Tangible Equity: | ||||||||||||||||||||
| Total equity - GAAP | $ |
2,197,965 |
|
$ |
2,204,955 |
|
$ |
2,220,425 |
|
$ |
2,275,179 |
|
$ |
2,225,282 |
|
|||||
| Preferred equity |
|
(36,104 |
) |
|
(36,104 |
) |
|
(36,104 |
) |
|
(36,104 |
) |
|
(36,104 |
) |
|||||
|
(38,611 |
) |
|
(38,611 |
) |
|
(38,611 |
) |
|
(38,632 |
) |
|
(34,401 |
) |
||||||
| Purchased credit card relationship intangible |
|
(1,992 |
) |
|
(2,855 |
) |
|
(3,768 |
) |
|
(4,733 |
) |
|
(5,789 |
) |
|||||
| Core deposit intangible |
|
(30,494 |
) |
|
(32,416 |
) |
|
(34,339 |
) |
|
(35,842 |
) |
|
(37,749 |
) |
|||||
| Insurance customer relationship intangible |
|
(203 |
) |
|
(241 |
) |
|
(280 |
) |
|
(318 |
) |
|
(355 |
) |
|||||
| Tangible common equity | $ |
2,090,561 |
|
$ |
2,094,728 |
|
$ |
2,107,323 |
|
$ |
2,159,550 |
|
$ |
2,110,884 |
|
|||||
| Tangible Assets: | ||||||||||||||||||||
| Total assets - GAAP | $ |
21,256,154 |
|
$ |
21,369,962 |
|
$ |
19,413,734 |
|
$ |
18,793,071 |
|
$ |
18,659,768 |
|
|||||
|
(38,611 |
) |
|
(38,611 |
) |
|
(38,611 |
) |
|
(38,632 |
) |
|
(34,401 |
) |
||||||
| Purchased credit card relationship intangible |
|
(1,992 |
) |
|
(2,855 |
) |
|
(3,768 |
) |
|
(4,733 |
) |
|
(5,789 |
) |
|||||
| Core deposit intangible |
|
(30,494 |
) |
|
(32,416 |
) |
|
(34,339 |
) |
|
(35,842 |
) |
|
(37,749 |
) |
|||||
| Insurance customer relationship intangible |
|
(203 |
) |
|
(241 |
) |
|
(280 |
) |
|
(318 |
) |
|
(355 |
) |
|||||
| Tangible assets | $ |
21,184,854 |
|
$ |
21,295,839 |
|
$ |
19,336,736 |
|
$ |
18,713,546 |
|
$ |
18,581,474 |
|
|||||
| Common shares outstanding |
|
206,496 |
|
|
210,649 |
|
|
218,629 |
|
|
218,235 |
|
|
218,229 |
|
|||||
| Tangible common equity ratio |
|
9.87 |
% |
|
9.84 |
% |
|
10.90 |
% |
|
11.54 |
% |
|
11.36 |
% |
|||||
| Tangible book value per common share | $ |
10.12 |
|
$ |
9.94 |
|
$ |
9.64 |
|
$ |
9.90 |
|
$ |
9.67 |
|
|||||
Exposure to Puerto Rico Government
As of
The aforementioned exposure to municipalities in
As of
Conference Call / Webcast Information
First BanCorp.’s senior management will host an earnings conference call and live webcast on
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,” “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 following, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements: uncertainties relating to the impact of the COVID-19 pandemic, including new variants of the virus, such as the Delta variant, and the efficacy and acceptance of various vaccines and treatments for the disease, on the Corporation’s business, operations, employees, credit quality, financial condition and net income, including because of uncertainties as to the extent and duration of the pandemic and the impact of the pandemic on consumer spending, borrowing and saving habits, the underemployment and unemployment rates, which can adversely affect repayment patterns, the
Basis of Presentation
Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. Non-GAAP financial measures are used when management believes they will be helpful to an investor’s understanding of the Corporation’s results of operations or financial position. 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 earnings release. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.
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 equity less preferred equity, goodwill, core deposit intangibles, and other intangibles, such as the purchased credit card relationship intangible and the insurance customer relationship intangible. Tangible assets are total assets less goodwill, core deposit intangibles, and other intangibles, such as the purchased credit card relationship intangible and the insurance customer relationship intangible. Management uses and believe that many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with 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.
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, such as the COVID-19 pandemic in 2020 and 2021. 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, finance leases and debt securities and any gains or losses on sales of investment securities. In addition, from time to time, earnings are also adjusted for certain items regarded as Special Items, such as merger and restructuring costs in connection with the acquisition of BSPR and related integration and restructuring efforts, and costs incurred in connection with the COVID-19 pandemic response efforts, because management believes these items are not reflective of core operating performance, are not expected to reoccur with any regularity or may reoccur at uncertain times and in uncertain amounts.
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. 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.
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 third and second quarters of 2021, the third quarter of 2020, and the nine-month period ended
| (Dollars in thousands) | Quarter Ended | Nine-Month Period Ended | ||||||||||||||||||
2021 |
2021 |
2020 |
2021 |
2020 |
||||||||||||||||
| Net Interest Income | ||||||||||||||||||||
| Interest income - GAAP | $ |
200,172 |
|
$ |
201,459 |
|
$ |
170,402 |
|
$ |
596,273 |
|
$ |
494,282 |
|
|||||
| Unrealized (gain) loss on | ||||||||||||||||||||
| derivative instruments |
|
(4 |
) |
|
7 |
|
|
(18 |
) |
|
(22 |
) |
|
(18 |
) |
|||||
| Interest income excluding valuations |
|
200,168 |
|
|
201,466 |
|
|
170,384 |
|
|
596,251 |
|
|
494,264 |
|
|||||
| Tax-equivalent adjustment |
|
6,864 |
|
|
6,129 |
|
|
4,964 |
|
|
17,545 |
|
|
15,751 |
|
|||||
| Interest income on a tax-equivalent basis and excluding valuations | $ |
207,032 |
|
$ |
207,595 |
|
$ |
175,348 |
|
$ |
613,796 |
|
$ |
510,015 |
|
|||||
| Interest expense - GAAP |
|
15,429 |
|
|
16,676 |
|
|
21,706 |
|
|
50,482 |
|
|
71,727 |
|
|||||
| Net interest income - GAAP | $ |
184,743 |
|
$ |
184,783 |
|
$ |
148,696 |
|
$ |
545,791 |
|
$ |
422,555 |
|
|||||
| Net interest income excluding valuations | $ |
184,739 |
|
$ |
184,790 |
|
$ |
148,678 |
|
$ |
545,769 |
|
$ |
422,537 |
|
|||||
| Net interest income on a tax-equivalent basis and excluding valuations | $ |
191,603 |
|
$ |
190,919 |
|
$ |
153,642 |
|
$ |
563,314 |
|
$ |
438,288 |
|
|||||
| Average Balances | ||||||||||||||||||||
| Loans and leases | $ |
11,223,926 |
|
$ |
11,560,731 |
|
$ |
10,163,671 |
|
$ |
11,515,647 |
|
$ |
9,472,189 |
|
|||||
| Total securities, other short-term investments and interest-bearing cash balances |
|
9,134,121 |
|
|
7,898,975 |
|
|
4,871,710 |
|
|
7,857,639 |
|
|
3,859,381 |
|
|||||
| Average interest-earning assets | $ |
20,358,047 |
|
$ |
19,459,706 |
|
$ |
15,035,381 |
|
$ |
19,373,286 |
|
$ |
13,331,570 |
|
|||||
| Average interest-bearing liabilities | $ |
11,718,557 |
|
$ |
12,118,631 |
|
$ |
9,732,691 |
|
$ |
11,883,768 |
|
$ |
8,729,809 |
|
|||||
| Average Yield/Rate | ||||||||||||||||||||
| Average yield on interest-earning assets - GAAP |
|
3.90 |
% |
|
4.15 |
% |
|
4.51 |
% |
|
4.12 |
% |
|
4.95 |
% |
|||||
| Average rate on interest-bearing liabilities - GAAP |
|
0.52 |
% |
|
0.55 |
% |
|
0.89 |
% |
|
0.57 |
% |
|
1.10 |
% |
|||||
| Net interest spread - GAAP |
|
3.38 |
% |
|
3.60 |
% |
|
3.62 |
% |
|
3.55 |
% |
|
3.85 |
% |
|||||
| Net interest margin - GAAP |
|
3.60 |
% |
|
3.81 |
% |
|
3.93 |
% |
|
3.77 |
% |
|
4.23 |
% |
|||||
| Average yield on interest-earning assets excluding valuations |
|
3.90 |
% |
|
4.15 |
% |
|
4.51 |
% |
|
4.11 |
% |
|
4.95 |
% |
|||||
| Average rate on interest-bearing liabilities excluding valuations |
|
0.52 |
% |
|
0.55 |
% |
|
0.89 |
% |
|
0.57 |
% |
|
1.10 |
% |
|||||
| Net interest spread excluding valuations |
|
3.38 |
% |
|
3.60 |
% |
|
3.62 |
% |
|
3.54 |
% |
|
3.85 |
% |
|||||
| Net interest margin excluding valuations |
|
3.60 |
% |
|
3.81 |
% |
|
3.93 |
% |
|
3.77 |
% |
|
4.23 |
% |
|||||
| Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations |
|
4.03 |
% |
|
4.28 |
% |
|
4.64 |
% |
|
4.24 |
% |
|
5.11 |
% |
|||||
| Average rate on interest-bearing liabilities excluding valuations |
|
0.52 |
% |
|
0.55 |
% |
|
0.89 |
% |
|
0.57 |
% |
|
1.10 |
% |
|||||
| Net interest spread on a tax-equivalent basis and excluding valuations |
|
3.51 |
% |
|
3.73 |
% |
|
3.75 |
% |
|
3.67 |
% |
|
4.01 |
% |
|||||
| Net interest margin on a tax-equivalent basis and excluding valuations |
|
3.73 |
% |
|
3.94 |
% |
|
4.07 |
% |
|
3.89 |
% |
|
4.39 |
% |
|||||
Financial measures adjusted to exclude the effect of Special Items that management believes are not reflective of core operating performance, are not expected to reoccur with any regularity or may reoccur at uncertain times and in uncertain amounts.
To supplement the Corporation’s financial statements presented in accordance with GAAP, the Corporation uses, and believes that investors would benefit from disclosure of, non-GAAP financial measures that reflect adjustments to net income and non-interest expenses, and the components of each, to exclude items that management identifies as Special Items because management believes they are not reflective of core operating performance, are not expected to reoccur with any regularity or may reoccur at uncertain times and in uncertain amounts. This press release includes the following non-GAAP financial measures for the third and second quarters of 2021 and the third quarter of 2020 that reflect the described items that were excluded for one of those reasons:
- Adjusted net income – The adjusted net income amounts for the third and second quarters of 2021 and the third quarter of 2020 reflect the following exclusions:
- Merger and restructuring costs of
- COVID-19 pandemic-related expenses of
- Tax benefit of
- Gain of
- Gain of
- The tax-related effects of all of the pre-tax items mentioned in the above bullets as follows:
- Tax benefit of
- Tax benefit of
- No tax expense was recorded for the gain on sales of
- The gain realized on the repurchase and cancellation of trust-preferred securities in the third quarter of 2020 recorded at the holding company level had no effect on the income tax expense in 2020.
- Adjusted non-interest expenses – The following tables reconcile for the third quarter of 2021 and second quarter of 2021 the non-interest expenses to adjusted non-interest expenses, which is a non-GAAP financial measure that excludes the relevant Special Items identified above:
| (In thousands) | ||||||||||||||
| Third Quarter 2021 | Non-Interest Expenses (GAAP) |
Merger and Restructuring Costs |
COVID-19 Pandemic- Related Expenses |
Adjusted (Non-GAAP) |
||||||||||
| Non-interest expenses | $ |
114,036 |
|
$ |
2,268 |
$ |
640 |
$ |
111,128 |
|
||||
| Employees' compensation and benefits |
|
50,220 |
|
|
- |
|
10 |
|
50,210 |
|
||||
| Occupancy and equipment |
|
23,306 |
|
|
- |
|
576 |
|
22,730 |
|
||||
| Business promotion |
|
3,370 |
|
|
- |
|
- |
|
3,370 |
|
||||
| Professional service fees |
|
13,554 |
|
|
- |
|
- |
|
13,554 |
|
||||
| Taxes, other than income taxes |
|
5,238 |
|
|
- |
|
49 |
|
5,189 |
|
||||
| Insurance and supervisory fees |
|
3,630 |
|
|
- |
|
- |
|
3,630 |
|
||||
| Net gain on other real estate owned operations |
|
(2,288 |
) |
|
- |
|
- |
|
(2,288 |
) |
||||
| Merger and restructuring costs |
|
2,268 |
|
|
2,268 |
|
- |
|
- |
|
||||
| Other non-interest expenses |
|
14,738 |
|
|
- |
|
5 |
|
14,733 |
|
||||
| (In thousands) | ||||||||||||||
| Second Quarter 2021 | Non-Interest Expenses (GAAP) |
Merger and Restructuring Costs |
COVID-19 Pandemic- Related Expenses |
Adjusted (Non-GAAP) |
||||||||||
| Non-interest expenses | $ |
130,172 |
|
$ |
11,047 |
$ |
1,105 |
$ |
118,020 |
|
||||
| Employees' compensation and benefits |
|
49,714 |
|
|
- |
|
10 |
|
49,704 |
|
||||
| Occupancy and equipment |
|
24,116 |
|
|
- |
|
992 |
|
23,124 |
|
||||
| Business promotion |
|
3,225 |
|
|
- |
|
4 |
|
3,221 |
|
||||
| Professional service fees |
|
16,764 |
|
|
- |
|
- |
|
16,764 |
|
||||
| Taxes, other than income taxes |
|
5,576 |
|
|
- |
|
97 |
|
5,479 |
|
||||
| Insurance and supervisory fees |
|
4,282 |
|
|
- |
|
- |
|
4,282 |
|
||||
| Net gain on other real estate owned operations |
|
(139 |
) |
|
- |
|
- |
|
(139 |
) |
||||
| Merger and restructuring costs |
|
11,047 |
|
|
11,047 |
|
- |
|
- |
|
||||
| Other non-interest expenses |
|
15,587 |
|
|
- |
|
2 |
|
15,585 |
|||||
-
ACL on loans and finance leases to adjusted total loans held for investment ratio - The following table reconciles the ratio of the ACL on loans and finance leases to adjusted total loans held for investment, excluding SBA PPP loans, as of
September 30, 2021 andJune 30, 2021 :
| Allowance for credit losses for loans and finance leases to Loans Held for Investment (GAAP to Non-GAAP reconciliation) | ||||||||
| As of |
||||||||
| (In thousands) | Allowance for Credit Losses for Loans and Finance Leases |
Loans Held for Investment |
||||||
| Allowance for credit losses for loans and finance leases and loans held for investment (GAAP) | $ |
288,360 |
|
$ |
11,140,582 |
|||
| Less: | ||||||||
| SBA PPP loans |
|
- |
|
|
218,360 |
|||
| Allowance for credit losses for loans and finance leases and adjusted loans held for investment, excluding SBA PPP loans (Non-GAAP) | $ |
288,360 |
|
$ |
10,922,222 |
|||
| Allowance for credit losses for loans and finance leases to loans held for investment (GAAP) |
|
2.59 |
% |
|||||
| Allowance for credit losses for loans and finance leases to adjusted loans held for investment, excluding SBA PPP loans (Non-GAAP) |
|
2.64 |
% |
|||||
| Allowance for credit losses for loans and finance leases to Loans Held for Investment (GAAP to Non-GAAP reconciliation) | ||||||||
| As of |
||||||||
| (In thousands) | Allowance for Credit Losses for Loans and Finance Leases |
Loans Held for Investment |
||||||
| Allowance for credit losses for loans and finance leases and loans held for investment (GAAP) | $ |
324,958 |
|
$ |
11,387,594 |
|||
| Less: | ||||||||
| SBA PPP loans |
|
- |
|
|
349,261 |
|||
| Allowance for credit losses for loans and finance leases and adjusted loans held for investment, excluding SBA PPP loans (Non-GAAP) | $ |
324,958 |
|
$ |
11,038,333 |
|||
| Allowance for credit losses for loans and finance leases to loans held for investment (GAAP) |
|
2.85 |
% |
|||||
| Allowance for credit losses for loans and finance leases to adjusted loans held for investment, excluding SBA PPP loans (Non-GAAP) |
|
2.94 |
% |
|||||
Management believes that the presentation of adjusted net income, adjusted non-interest expenses and adjustments to the various components of non-interest expenses, and the ratio of allowance for credit losses to adjusted total loans held for investment enhances the ability of analysts and investors to analyze trends in the Corporation’s business and understand the performance of the Corporation. In addition, the Corporation may utilize these non-GAAP financial measures as guides in its budgeting and long-term planning process.
| FIRST BANCORP | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||||||||||||
| As of | ||||||||||||
|
|
|
||||||||||
| (In thousands, except for share information) | 2021 |
2021 |
2020 |
|||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ |
2,655,491 |
|
$ |
2,786,066 |
|
$ |
1,433,261 |
|
|||
| Money market investments: | ||||||||||||
| Time deposits with other financial institutions |
|
300 |
|
|
300 |
|
|
300 |
|
|||
| Other short-term investments |
|
2,382 |
|
|
2,403 |
|
|
60,272 |
|
|||
| Total money market investments |
|
2,682 |
|
|
2,703 |
|
|
60,572 |
|
|||
| Investment securities available for sale, at fair value (allowance for credit losses of |
|
6,689,479 |
|
|
6,402,258 |
|
|
4,647,019 |
|
|||
| Investment securities held to maturity, at amortized cost, net of allowance for credit losses of |
|
169,488 |
|
|
179,327 |
|
|
180,643 |
|
|||
| Equity securities |
|
37,427 |
|
|
37,722 |
|
|
37,588 |
|
|||
| Total investment securities |
|
6,896,394 |
|
|
6,619,307 |
|
|
4,865,250 |
|
|||
| Loans, net of allowance for credit losses of |
||||||||||||
| (June 30, 2021 - |
|
10,852,222 |
|
|
11,062,636 |
|
|
11,391,402 |
|
|||
| Loans held for sale, at lower of cost or market |
|
30,681 |
|
|
32,699 |
|
|
50,289 |
|
|||
| Total loans, net |
|
10,882,903 |
|
|
11,095,335 |
|
|
11,441,691 |
|
|||
| Premises and equipment, net |
|
149,894 |
|
|
152,974 |
|
|
158,209 |
|
|||
| Other real estate owned |
|
43,798 |
|
|
66,586 |
|
|
83,060 |
|
|||
| Accrued interest receivable on loans and investments |
|
58,454 |
|
|
63,301 |
|
|
69,505 |
|
|||
| Deferred tax asset, net |
|
243,447 |
|
|
273,869 |
|
|
329,261 |
|
|||
|
38,611 |
|
|
38,611 |
|
|
38,632 |
|
||||
| Intangible assets |
|
32,689 |
|
|
35,512 |
|
|
40,893 |
|
|||
| Other assets |
|
251,791 |
|
|
235,698 |
|
|
272,737 |
|
|||
| Total assets | $ |
21,256,154 |
|
$ |
21,369,962 |
|
$ |
18,793,071 |
|
|||
| LIABILITIES | ||||||||||||
| Deposits: | ||||||||||||
| Non-interest-bearing deposits | $ |
7,097,313 |
|
$ |
6,258,463 |
|
$ |
4,546,123 |
|
|||
| Interest-bearing deposits |
|
10,887,345 |
|
|
11,811,528 |
|
|
10,771,260 |
|
|||
| Total deposits |
|
17,984,658 |
|
|
18,069,991 |
|
|
15,317,383 |
|
|||
| Securities sold under agreements to repurchase |
|
300,000 |
|
|
300,000 |
|
|
300,000 |
|
|||
| Advances from the FHLB |
|
320,000 |
|
|
320,000 |
|
|
440,000 |
|
|||
| Other borrowings |
|
183,762 |
|
|
183,762 |
|
|
183,762 |
|
|||
| Accounts payable and other liabilities |
|
269,769 |
|
|
291,254 |
|
|
276,747 |
|
|||
| Total liabilities |
|
19,058,189 |
|
|
19,165,007 |
|
|
16,517,892 |
|
|||
| STOCKHOLDERS' EQUITY | ||||||||||||
| Preferred Stock, authorized 50,000,000 shares; issued 22,828,174 shares; outstanding 1,444,146 shares; aggregate liquidation value of |
|
36,104 |
|
|
36,104 |
|
|
36,104 |
|
|||
| Common stock, |
||||||||||||
| (June 30, 2021 - 223,632,377 shares issued; December 31,2020 - 223,034,348 shares issued) |
|
22,366 |
|
|
22,363 |
|
|
22,303 |
|
|||
| Less: |
|
(1,716 |
) |
|
(1,298 |
) |
|
(480 |
) |
|||
| Common stock outstanding, 206,495,900 shares outstanding | ||||||||||||
| (June 30, 2021 - 210,649,414 shares outstanding; December 31, 2020 - 218,235,064 shares outstanding) |
|
20,650 |
|
|
21,065 |
|
|
21,823 |
|
|||
| Additional paid-in capital |
|
799,132 |
|
|
847,412 |
|
|
946,476 |
|
|||
| Retained earnings |
|
1,375,797 |
|
|
1,315,352 |
|
|
1,215,321 |
|
|||
| Accumulated other comprehensive (loss) income |
|
(33,718 |
) |
|
(14,978 |
) |
|
55,455 |
|
|||
| Total stockholders' equity |
|
2,197,965 |
|
|
2,204,955 |
|
|
2,275,179 |
|
|||
| Total liabilities and stockholders' equity | $ |
21,256,154 |
|
$ |
21,369,962 |
|
$ |
18,793,071 |
|
|||
| FIRST BANCORP | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||
| Quarter Ended | Nine-Month Period Ended | ||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
| (In thousands, except per share information) | 2021 |
2021 |
2020 |
2021 |
2020 |
||||||||||||||
| Net interest income: | |||||||||||||||||||
| Interest income | $ |
200,172 |
|
$ |
201,459 |
|
$ |
170,402 |
|
$ |
596,273 |
|
$ |
494,282 |
|||||
| Interest expense |
|
15,429 |
|
|
16,676 |
|
|
21,706 |
|
|
50,482 |
|
|
71,727 |
|||||
| Net interest income |
|
184,743 |
|
|
184,783 |
|
|
148,696 |
|
|
545,791 |
|
|
422,555 |
|||||
| Provision for credit losses (benefit) expense: | |||||||||||||||||||
| Loans |
|
(8,734 |
) |
|
(26,302 |
) |
|
48,078 |
|
|
(49,479 |
) |
|
158,531 |
|||||
| Unfunded loan commitments |
|
(971 |
) |
|
(1,669 |
) |
|
(803 |
) |
|
(3,346 |
) |
|
2,359 |
|||||
| Debt securities |
|
(2,377 |
) |
|
1,816 |
|
|
(361 |
) |
|
(664 |
) |
|
2,404 |
|||||
| Provision for credit losses (benefit) expense |
|
(12,082 |
) |
|
(26,155 |
) |
|
46,914 |
|
|
(53,489 |
) |
|
163,294 |
|||||
| Net interest income after provision for credit losses |
|
196,825 |
|
|
210,938 |
|
|
101,782 |
|
|
599,280 |
|
|
259,261 |
|||||
| Non-interest income: | |||||||||||||||||||
| Service charges on deposit accounts |
|
8,690 |
|
|
8,788 |
|
|
5,848 |
|
|
25,782 |
|
|
16,280 |
|||||
| Mortgage banking activities |
|
6,098 |
|
|
6,404 |
|
|
7,099 |
|
|
19,775 |
|
|
14,573 |
|||||
| Net gain on investments |
|
- |
|
|
- |
|
|
5,288 |
|
|
- |
|
|
13,380 |
|||||
| Gain on early extinguishment of debt |
|
- |
|
|
- |
|
|
94 |
|
|
- |
|
|
94 |
|||||
| Other non-interest income |
|
15,158 |
|
|
14,692 |
|
|
11,605 |
|
|
45,229 |
|
|
36,699 |
|||||
| Total non-interest income |
|
29,946 |
|
|
29,884 |
|
|
29,934 |
|
|
90,786 |
|
|
81,026 |
|||||
| Non-interest expenses: | |||||||||||||||||||
| Employees' compensation and benefits |
|
50,220 |
|
|
49,714 |
|
|
43,063 |
|
|
150,776 |
|
|
125,454 |
|||||
| Occupancy and equipment |
|
23,306 |
|
|
24,116 |
|
|
19,064 |
|
|
71,664 |
|
|
50,567 |
|||||
| Business promotion |
|
3,370 |
|
|
3,225 |
|
|
3,046 |
|
|
9,565 |
|
|
8,982 |
|||||
| Professional service fees |
|
13,554 |
|
|
16,764 |
|
|
11,563 |
|
|
48,019 |
|
|
35,324 |
|||||
| Taxes, other than income taxes |
|
5,238 |
|
|
5,576 |
|
|
4,510 |
|
|
17,013 |
|
|
11,967 |
|||||
| Insurance and supervisory fees |
|
3,630 |
|
|
4,282 |
|
|
3,019 |
|
|
12,262 |
|
|
8,193 |
|||||
| Net (gain) loss on other real estate owned operations |
|
(2,288 |
) |
|
(139 |
) |
|
1,019 |
|
|
(529 |
) |
|
3,018 |
|||||
| Merger and restructuring costs |
|
2,268 |
|
|
11,047 |
|
|
10,441 |
|
|
24,582 |
|
|
14,188 |
|||||
| Other non-interest expenses |
|
14,738 |
|
|
15,587 |
|
|
11,783 |
|
|
44,157 |
|
|
31,785 |
|||||
| Total non-interest expenses |
|
114,036 |
|
|
130,172 |
|
|
107,508 |
|
|
377,509 |
|
|
289,478 |
|||||
| Income before income taxes |
|
112,735 |
|
|
110,650 |
|
|
24,208 |
|
|
312,557 |
|
|
50,809 |
|||||
| Income tax (expense) benefit |
|
(37,057 |
) |
|
(40,092 |
) |
|
4,405 |
|
|
(105,171 |
) |
|
1,326 |
|||||
| Net income | $ |
75,678 |
|
$ |
70,558 |
|
$ |
28,613 |
|
$ |
207,386 |
|
$ |
52,135 |
|||||
| Net income attributable to common stockholders | $ |
75,009 |
|
$ |
69,889 |
|
$ |
27,944 |
|
$ |
205,379 |
|
$ |
50,128 |
|||||
| Earnings per common share: | |||||||||||||||||||
| Basic | $ |
0.36 |
|
$ |
0.33 |
|
$ |
0.13 |
|
$ |
0.97 |
|
$ |
0.23 |
|||||
| Diluted | $ |
0.36 |
|
$ |
0.33 |
|
$ |
0.13 |
|
$ |
0.96 |
|
$ |
0.23 |
|||||
About First BanCorp.
First BanCorp. is the parent corporation of
EXHIBIT A
Table 1 – Selected Financial Data
| (In thousands, except per share amounts and financial ratios) | Quarter Ended | Nine-Month Period Ended | |||||||||||||||||
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|||||||||||
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||||||||
| Condensed Income Statements: | |||||||||||||||||||
| Total interest income | $ |
200,172 |
|
$ |
201,459 |
|
$ |
170,402 |
$ |
596,273 |
|
$ |
494,282 |
||||||
| Total interest expense |
|
15,429 |
|
|
16,676 |
|
|
21,706 |
|
50,482 |
|
|
71,727 |
||||||
| Net interest income |
|
184,743 |
|
|
184,783 |
|
|
148,696 |
|
545,791 |
|
|
422,555 |
||||||
| Provision for credit losses (benefit) expense |
|
(12,082 |
) |
|
(26,155 |
) |
|
46,914 |
|
(53,489 |
) |
|
163,294 |
||||||
| Non-interest income |
|
29,946 |
|
|
29,884 |
|
|
29,934 |
|
90,786 |
|
|
81,026 |
||||||
| Non-interest expenses |
|
114,036 |
|
|
130,172 |
|
|
107,508 |
|
377,509 |
|
|
289,478 |
||||||
| Income before income taxes |
|
112,735 |
|
|
110,650 |
|
|
24,208 |
|
312,557 |
|
|
50,809 |
||||||
| Income tax (expense) benefit |
|
(37,057 |
) |
|
(40,092 |
) |
|
4,405 |
|
(105,171 |
) |
|
1,326 |
||||||
| Net income |
|
75,678 |
|
|
70,558 |
|
|
28,613 |
|
207,386 |
|
|
52,135 |
||||||
| Net income attributable to common stockholders |
|
75,009 |
|
|
69,889 |
|
|
27,944 |
|
205,379 |
|
|
50,128 |
||||||
| Per Common Share Results: | |||||||||||||||||||
| Net earnings per share - basic | $ |
0.36 |
|
$ |
0.33 |
|
$ |
0.13 |
$ |
0.97 |
|
$ |
0.23 |
||||||
| Net earnings per share - diluted | $ |
0.36 |
|
$ |
0.33 |
|
$ |
0.13 |
$ |
0.96 |
|
$ |
0.23 |
||||||
| Cash dividends declared | $ |
0.07 |
|
$ |
0.07 |
|
$ |
0.05 |
$ |
0.21 |
|
$ |
0.15 |
||||||
| Average shares outstanding |
|
206,725 |
|
|
213,574 |
|
|
216,922 |
|
212,406 |
|
|
216,876 |
||||||
| Average shares outstanding diluted |
|
207,796 |
|
|
214,609 |
|
|
217,715 |
|
213,523 |
|
|
217,533 |
||||||
| Book value per common share | $ |
10.47 |
|
$ |
10.30 |
|
$ |
10.03 |
$ |
10.47 |
|
$ |
10.03 |
||||||
| Tangible book value per common share (1) | $ |
10.12 |
|
$ |
9.94 |
|
$ |
9.67 |
$ |
10.12 |
|
$ |
9.67 |
||||||
| Selected Financial Ratios (In Percent): | |||||||||||||||||||
| Profitability: | |||||||||||||||||||
| Return on Average Assets |
|
1.42 |
|
|
1.40 |
|
|
0.72 |
|
1.38 |
|
|
0.50 |
||||||
| Interest Rate Spread (2) |
|
3.51 |
|
|
3.73 |
|
|
3.75 |
|
3.67 |
|
|
4.01 |
||||||
| Net Interest Margin (2) |
|
3.73 |
|
|
3.94 |
|
|
4.07 |
|
3.89 |
|
|
4.39 |
||||||
| Return on Average Total Equity |
|
13.43 |
|
|
12.60 |
|
|
5.07 |
|
12.28 |
|
|
3.13 |
||||||
| Return on Average Common Equity |
|
13.53 |
|
|
12.68 |
|
|
5.03 |
|
12.36 |
|
|
3.06 |
||||||
| Average Total Equity to Average Total Assets |
|
10.61 |
|
|
11.13 |
|
|
14.22 |
|
11.22 |
|
|
15.84 |
||||||
| Total capital |
|
20.67 |
|
|
20.38 |
|
|
20.32 |
|
20.67 |
|
|
20.32 |
||||||
| Common equity Tier 1 capital |
|
17.62 |
|
|
17.34 |
|
|
17.21 |
|
17.62 |
|
|
17.21 |
||||||
| Tier 1 capital |
|
17.92 |
|
|
17.64 |
|
|
17.52 |
|
17.92 |
|
|
17.52 |
||||||
| Leverage |
|
10.17 |
|
|
10.51 |
|
|
13.04 |
|
10.17 |
|
|
13.04 |
||||||
| Tangible common equity ratio (1) |
|
9.87 |
|
|
9.84 |
|
|
11.36 |
|
9.87 |
|
|
11.36 |
||||||
| Dividend payout ratio |
|
19.29 |
|
|
21.39 |
|
|
38.81 |
|
21.72 |
|
|
64.90 |
||||||
| Efficiency ratio (3) |
|
53.12 |
|
|
60.64 |
|
|
60.18 |
|
59.30 |
|
|
57.48 |
||||||
| Asset Quality: | |||||||||||||||||||
| Allowance for credit losses on loans and finance leases to loans held for investment |
|
2.59 |
|
|
2.85 |
|
|
3.25 |
|
2.59 |
|
|
3.25 |
||||||
| Net charge-offs (annualized) to average loans |
|
0.99 |
|
|
0.27 |
|
|
0.45 |
|
0.56 |
|
|
0.55 |
||||||
| Provision for credit losses for loans and finance leases to net charge-offs |
|
(31.34 |
) |
|
(342.66 |
) |
|
421.70 |
|
(102.98 |
) |
|
407.94 |
||||||
| Non-performing assets to total assets |
|
0.81 |
|
|
1.20 |
|
|
1.57 |
|
0.81 |
|
|
1.57 |
||||||
| Nonaccrual loans held for investment to total loans held for investment |
|
1.10 |
|
|
1.60 |
|
|
1.70 |
|
1.10 |
|
|
1.70 |
||||||
| Allowance for credit losses on loans and finance leases to total nonaccrual loans held for investment |
|
236.09 |
|
|
177.91 |
|
|
191.13 |
|
236.09 |
|
|
191.13 |
||||||
| Allowance for credit losses on loans and finance leases to total nonaccrual loans held for investment, excluding residential real estate loans |
|
468.48 |
|
|
533.11 |
|
|
490.13 |
|
468.48 |
|
|
490.13 |
||||||
| Other Information: | |||||||||||||||||||
| Common Stock Price: End of period | $ |
13.15 |
|
$ |
11.92 |
|
$ |
5.22 |
$ |
13.15 |
|
$ |
5.22 |
||||||
| _______________ | |
1- |
Non-GAAP financial measure. See page 18 for GAAP to Non-GAAP reconciliations. |
2- |
On a tax-equivalent basis and excluding changes in the fair value of derivative instruments (Non-GAAP financial measure). See page 22 for GAAP to Non-GAAP reconciliations and refer to discussions in Tables 2 and 3 below. |
3- |
Non-interest expenses to the sum of net interest income and non-interest income. The denominator includes non-recurring income and changes in the fair value of derivative instruments. |
Table 2 – Quarterly Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis)
| (Dollars in thousands) | ||||||||||||||||||||||||
| Average volume | Interest income (1) / expense | Average rate (1) | ||||||||||||||||||||||
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
June 30, |
|
September 30, |
||||||||
| Quarter ended | 2021 |
|
2021 |
|
2020 |
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2021 |
|
2020 |
|||||||
| Interest-earning assets: | ||||||||||||||||||||||||
| Money market & other short-term investments | $ |
2,514,882 |
$ |
1,741,167 |
$ |
1,450,669 |
$ |
968 |
$ |
433 |
$ |
405 |
|
|
|
|||||||||
| Government obligations (2) |
|
2,325,835 |
|
1,895,868 |
|
1,129,976 |
|
7,044 |
|
6,609 |
|
4,890 |
|
|
|
|||||||||
| MBS |
|
4,255,171 |
|
4,222,478 |
|
2,253,121 |
|
17,091 |
|
14,352 |
|
11,525 |
|
|
|
|||||||||
| FHLB stock |
|
27,080 |
|
28,489 |
|
31,635 |
|
327 |
|
366 |
|
441 |
|
|
|
|||||||||
| Other investments |
|
11,153 |
|
10,973 |
|
6,309 |
|
30 |
|
6 |
|
10 |
|
|
|
|||||||||
| Total investments (3) |
|
9,134,121 |
|
7,898,975 |
|
4,871,710 |
|
25,460 |
|
21,766 |
|
17,271 |
|
|
|
|||||||||
| Residential mortgage loans |
|
3,193,918 |
|
3,357,114 |
|
3,117,021 |
|
43,901 |
|
45,627 |
|
41,577 |
|
|
|
|||||||||
| Construction loans |
|
171,088 |
|
177,688 |
|
185,359 |
|
2,178 |
|
5,108 |
|
2,453 |
|
|
|
|||||||||
| C&I and commercial mortgage loans |
|
5,104,362 |
|
5,353,657 |
|
4,468,614 |
|
64,835 |
|
67,027 |
|
51,902 |
|
|
|
|||||||||
| Finance leases |
|
528,893 |
|
501,734 |
|
447,854 |
|
9,945 |
|
9,322 |
|
8,349 |
|
|
|
|||||||||
| Consumer loans |
|
2,225,665 |
|
2,170,538 |
|
1,944,823 |
|
60,713 |
|
58,745 |
|
53,796 |
|
|
|
|||||||||
| Total loans (4) (5) |
|
11,223,926 |
|
11,560,731 |
|
10,163,671 |
|
181,572 |
|
185,829 |
|
158,077 |
|
|
|
|||||||||
| Total interest-earning assets | $ |
20,358,047 |
$ |
19,459,706 |
$ |
15,035,381 |
$ |
207,032 |
$ |
207,595 |
$ |
175,348 |
|
|
|
|||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Brokered CDs | $ |
126,775 |
$ |
146,912 |
$ |
332,429 |
$ |
664 |
$ |
768 |
$ |
1,850 |
|
|
|
|||||||||
| Other interest-bearing deposits |
|
10,788,020 |
|
11,131,583 |
|
8,412,342 |
|
9,018 |
|
10,014 |
|
14,238 |
|
|
|
|||||||||
| Loans payable |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
|
|||||||||
| Other borrowed funds |
|
483,762 |
|
483,762 |
|
493,572 |
|
3,848 |
|
3,828 |
|
2,840 |
|
|
|
|||||||||
| FHLB advances |
|
320,000 |
|
356,374 |
|
494,348 |
|
1,899 |
|
2,066 |
|
2,778 |
|
|
|
|||||||||
| Total interest-bearing liabilities | $ |
11,718,557 |
$ |
12,118,631 |
$ |
9,732,691 |
$ |
15,429 |
$ |
16,676 |
$ |
21,706 |
|
|
|
|||||||||
| Net interest income | $ |
191,603 |
$ |
190,919 |
$ |
153,642 |
||||||||||||||||||
| Interest rate spread |
|
|
|
|||||||||||||||||||||
| Net interest margin |
|
|
|
|||||||||||||||||||||
| _______________ | ||
1- |
On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the |
|
2- |
Government obligations include debt issued by government-sponsored agencies. | |
3- |
Unrealized gains and losses on available-for-sale securities are excluded from the average volumes. | |
4- |
Average loan balances include the average of non-performing loans. | |
5- |
Interest income on loans includes |
|
Table 3 – Year-to-Date Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis)
| (Dollars in thousands) | |||||||||||||||
| Average volume | Interest income (1) / expense | Average rate (1) | |||||||||||||
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|||||
| Nine-Month Period Ended | 2021 |
|
2020 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
| Interest-earning assets: | |||||||||||||||
| Money market & other short-term investments | $ |
1,898,678 |
$ |
1,099,634 |
$ |
1,750 |
$ |
2,950 |
|
|
|||||
| Government obligations (2) |
|
1,890,437 |
|
784,348 |
|
19,627 |
|
15,454 |
|
|
|||||
| MBS |
|
4,029,794 |
|
1,937,083 |
|
41,173 |
|
37,874 |
|
|
|||||
| FHLB stock |
|
28,917 |
|
32,234 |
|
1,094 |
|
1,527 |
|
|
|||||
| Other investments |
|
9,813 |
|
6,082 |
|
45 |
|
31 |
|
|
|||||
| Total investments (3) |
|
7,857,639 |
|
3,859,381 |
|
63,689 |
|
57,836 |
|
|
|||||
| Residential mortgage loans |
|
3,347,186 |
|
2,952,278 |
|
135,114 |
|
118,044 |
|
|
|||||
| Construction loans |
|
186,998 |
|
159,092 |
|
10,530 |
|
6,519 |
|
|
|||||
| C&I and commercial mortgage loans |
|
5,295,346 |
|
4,032,497 |
|
198,131 |
|
146,629 |
|
|
|||||
| Finance leases |
|
504,379 |
|
433,014 |
|
28,137 |
|
24,015 |
|
|
|||||
| Consumer loans |
|
2,181,738 |
|
1,895,308 |
|
178,195 |
|
156,972 |
|
|
|||||
| Total loans (4) (5) |
|
11,515,647 |
|
9,472,189 |
|
550,107 |
|
452,179 |
|
|
|||||
| Total interest-earning assets | $ |
19,373,286 |
$ |
13,331,570 |
$ |
613,796 |
$ |
510,015 |
|
|
|||||
| Interest-bearing liabilities: | |||||||||||||||
| Brokered CDs | $ |
153,984 |
$ |
393,038 |
$ |
2,421 |
$ |
6,572 |
|
|
|||||
| Other interest-bearing deposits |
|
10,874,337 |
|
7,330,643 |
|
30,385 |
|
46,167 |
|
|
|||||
| Loans payable |
|
- |
|
11,241 |
|
- |
|
21 |
|
|
|||||
| Other borrowed funds |
|
483,762 |
|
472,715 |
|
11,248 |
|
10,311 |
|
|
|||||
| FHLB advances |
|
371,685 |
|
522,172 |
|
6,428 |
|
8,656 |
|
|
|||||
| Total interest-bearing liabilities | $ |
11,883,768 |
$ |
8,729,809 |
$ |
50,482 |
$ |
71,727 |
|
|
|||||
| Net interest income | $ |
563,314 |
$ |
438,288 |
|||||||||||
| Interest rate spread |
|
|
|||||||||||||
| Net interest margin |
|
|
|||||||||||||
| ________________ | |
1- |
On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the |
2- |
Government obligations include debt issued by government-sponsored agencies. |
3- |
Unrealized gains and losses on available-for-sale securities are excluded from the average volumes. |
4- |
Average loan balances include the average of non-performing loans. |
5- |
Interest income on loans includes |
Table 4 – Non-Interest Income
Quarter Ended |
|
Nine-Month Period Ended |
|||||||||||||||
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|||||||||
| (In thousands) | 2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
| Service charges on deposit accounts | $ |
8,690 |
$ |
8,788 |
$ |
5,848 |
$ |
25,782 |
$ |
16,280 |
|||||||
| Mortgage banking activities |
|
6,098 |
|
6,404 |
|
7,099 |
|
19,775 |
|
14,573 |
|||||||
| Insurance income |
|
2,318 |
|
2,215 |
|
1,473 |
|
9,775 |
|
7,436 |
|||||||
| Other operating income |
|
12,840 |
|
12,477 |
|
10,132 |
|
35,454 |
|
29,263 |
|||||||
| Non-interest income before net gain on sales of investment securities | 29,946 | 29,884 | 24,552 | 90,786 | 67,552 | ||||||||||||
| Net gain on sales of investment securities |
|
- |
|
- |
|
5,288 |
|
- |
|
13,380 |
|||||||
| Gain on early extinguishment of debt |
|
- |
|
- |
|
94 |
|
- |
|
94 |
|||||||
$ |
29,946 |
$ |
29,884 |
$ |
29,934 |
$ |
90,786 |
$ |
81,026 |
||||||||
Table 5 – Non-Interest Expenses
| Quarter Ended | Nine-Month Period Ended | |||||||||||||||||||
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
||||||||||||||||
| (In thousands) | 2021 |
2021 |
2020 |
2021 |
2020 |
|||||||||||||||
| Employees' compensation and benefits | $ |
50,220 |
|
$ |
49,714 |
|
$ |
43,063 |
$ |
150,776 |
|
$ |
125,454 |
|||||||
| Occupancy and equipment |
|
23,306 |
|
|
24,116 |
|
|
19,064 |
|
71,664 |
|
|
50,567 |
|||||||
| Deposit insurance premium |
|
1,381 |
|
|
1,922 |
|
|
1,630 |
|
5,291 |
|
|
4,588 |
|||||||
| Other insurance and supervisory fees |
|
2,249 |
|
|
2,360 |
|
|
1,389 |
|
6,971 |
|
|
3,605 |
|||||||
| Taxes, other than income taxes |
|
5,238 |
|
|
5,576 |
|
|
4,510 |
|
17,013 |
|
|
11,967 |
|||||||
| Collections, appraisals and other credit related fees |
|
1,451 |
|
|
1,080 |
|
|
1,262 |
|
3,841 |
|
|
4,345 |
|||||||
| Outsourcing technology services |
|
8,878 |
|
|
11,946 |
|
|
6,949 |
|
33,197 |
|
|
21,450 |
|||||||
| Other professional fees |
|
3,225 |
|
|
3,738 |
|
|
3,352 |
|
10,981 |
|
|
9,529 |
|||||||
| Credit and debit card processing expenses |
|
5,573 |
|
|
6,795 |
|
|
4,859 |
|
16,646 |
|
|
12,747 |
|||||||
| Business promotion |
|
3,370 |
|
|
3,225 |
|
|
3,046 |
|
9,565 |
|
|
8,982 |
|||||||
| Communications |
|
2,250 |
|
|
2,407 |
|
|
2,246 |
|
7,119 |
|
|
5,975 |
|||||||
| Net (gain) loss on OREO operations |
|
(2,288 |
) |
|
(139 |
) |
|
1,019 |
|
(529 |
) |
|
3,018 |
|||||||
| Merger and restructuring costs |
|
2,268 |
|
|
11,047 |
|
|
10,441 |
|
24,582 |
|
|
14,188 |
|||||||
| Other |
|
6,915 |
|
|
6,385 |
|
|
4,678 |
|
20,392 |
|
|
13,063 |
|||||||
| Total | $ |
114,036 |
|
$ |
130,172 |
|
$ |
107,508 |
$ |
377,509 |
|
$ |
289,478 |
|||||||
Table 6 – Selected Balance Sheet Data
| (In thousands) | As of | |||||||||||
September 30, |
June 30, |
December 31, |
||||||||||
2021 |
2021 |
2020 |
||||||||||
| Balance Sheet Data: | ||||||||||||
| Loans, including loans held for sale | $ |
11,171,263 |
|
$ |
11,420,293 |
|
$ |
11,827,578 |
||||
| Allowance for credit losses for loans and finance leases |
|
288,360 |
|
|
324,958 |
|
|
385,887 |
||||
| Money market and investment securities, net of allowance for credit losses for debt securities |
|
6,899,076 |
|
|
6,622,010 |
|
|
4,925,822 |
||||
| Intangible assets |
|
71,300 |
|
|
74,123 |
|
|
79,525 |
||||
| Deferred tax asset, net |
|
243,447 |
|
|
273,869 |
|
|
329,261 |
||||
| Total assets |
|
21,256,154 |
|
|
21,369,962 |
|
|
18,793,071 |
||||
| Deposits |
|
17,984,658 |
|
|
18,069,991 |
|
|
15,317,383 |
||||
| Borrowings |
|
803,762 |
|
|
803,762 |
|
|
923,762 |
||||
| Total preferred equity |
|
36,104 |
|
|
36,104 |
|
|
36,104 |
||||
| Total common equity |
|
2,195,579 |
|
|
2,183,829 |
|
|
2,183,620 |
||||
| Accumulated other comprehensive (loss) income, net of tax |
|
(33,718 |
) |
|
(14,978 |
) |
|
55,455 |
||||
| Total equity |
|
2,197,965 |
|
|
2,204,955 |
|
|
2,275,179 |
||||
Table 7 – Loan Portfolio
Composition of the loan portfolio including loans held for sale, at period-end.
| (In thousands) | As of | |||||||||
| September 30, | June 30, | December 31, | ||||||||
2021 |
2021 |
2020 |
||||||||
| Residential mortgage loans | $ |
3,095,015 |
$ |
3,253,857 |
$ |
3,521,954 |
||||
| Commercial loans: | ||||||||||
| Construction loans |
|
170,208 |
|
177,032 |
|
212,500 |
||||
| Commercial mortgage loans |
|
2,136,502 |
|
2,154,889 |
|
2,230,602 |
||||
| Commercial and Industrial loans |
|
2,932,712 |
|
3,083,863 |
|
3,202,590 |
||||
| Commercial loans |
|
5,239,422 |
|
5,415,784 |
|
5,645,692 |
||||
| Finance leases |
|
548,837 |
|
516,756 |
|
472,989 |
||||
| Consumer loans |
|
2,257,308 |
|
2,201,197 |
|
2,136,654 |
||||
| Loans held for investment |
|
11,140,582 |
|
11,387,594 |
|
11,777,289 |
||||
| Loans held for sale |
|
30,681 |
|
32,699 |
|
50,289 |
||||
| Total loans | $ |
11,171,263 |
$ |
11,420,293 |
$ |
11,827,578 |
||||
Table 8 – Loan Portfolio by Geography
| (In thousands) | As of September 30, 2021 | ||||||||||||
| Consolidated | |||||||||||||
| Residential mortgage loans | $ |
2,450,624 |
$ |
190,539 |
$ |
453,852 |
$ |
3,095,015 |
|||||
| Commercial loans: | |||||||||||||
| Construction loans |
|
45,666 |
|
4,471 |
|
120,071 |
|
170,208 |
|||||
| Commercial mortgage loans |
|
1,644,633 |
|
64,665 |
|
427,204 |
|
2,136,502 |
|||||
| Commercial and Industrial loans |
|
1,847,057 |
|
114,494 |
|
971,161 |
|
2,932,712 |
|||||
| Commercial loans |
|
3,537,356 |
|
183,630 |
|
1,518,436 |
|
5,239,422 |
|||||
| Finance leases |
|
548,837 |
|
- |
|
- |
|
548,837 |
|||||
| Consumer loans |
|
2,187,584 |
|
51,913 |
|
17,811 |
|
2,257,308 |
|||||
| Loans held for investment |
|
8,724,401 |
|
426,082 |
|
1,990,099 |
|
11,140,582 |
|||||
| Loans held for sale |
|
29,205 |
|
830 |
|
646 |
|
30,681 |
|||||
| Total loans | $ |
8,753,606 |
$ |
426,912 |
$ |
1,990,745 |
$ |
11,171,263 |
|||||
| (In thousands) | As of June 30, 2021 | ||||||||||||
| Consolidated | |||||||||||||
| Residential mortgage loans | $ |
2,591,304 |
$ |
198,658 |
$ |
463,895 |
$ |
3,253,857 |
|||||
| Commercial loans: | |||||||||||||
| Construction loans |
|
62,830 |
|
4,362 |
|
109,840 |
|
177,032 |
|||||
| Commercial mortgage loans |
|
1,687,731 |
|
58,105 |
|
409,053 |
|
2,154,889 |
|||||
| Commercial and Industrial loans |
|
1,945,708 |
|
129,825 |
|
1,008,330 |
|
3,083,863 |
|||||
| Commercial loans |
|
3,696,269 |
|
192,292 |
|
1,527,223 |
|
5,415,784 |
|||||
| Finance leases |
|
516,756 |
|
- |
|
- |
|
516,756 |
|||||
| Consumer loans |
|
2,128,572 |
|
52,287 |
|
20,338 |
|
2,201,197 |
|||||
| Loans held for investment |
|
8,932,901 |
|
443,237 |
|
2,011,456 |
|
11,387,594 |
|||||
| Loans held for sale |
|
25,565 |
|
935 |
|
6,199 |
|
32,699 |
|||||
| Total loans | $ |
8,958,466 |
$ |
444,172 |
$ |
2,017,655 |
$ |
11,420,293 |
|||||
| (In thousands) | As of December 31, 2020 | ||||||||||||
| Consolidated | |||||||||||||
| Residential mortgage loans | $ |
2,788,827 |
$ |
213,376 |
$ |
519,751 |
$ |
3,521,954 |
|||||
| Commercial loans: | |||||||||||||
| Construction loans |
|
73,619 |
|
11,397 |
|
127,484 |
|
212,500 |
|||||
| Commercial mortgage loans |
|
1,793,095 |
|
60,129 |
|
377,378 |
|
2,230,602 |
|||||
| Commercial and Industrial loans |
|
2,135,291 |
|
129,440 |
|
937,859 |
|
3,202,590 |
|||||
| Commercial loans |
|
4,002,005 |
|
200,966 |
|
1,442,721 |
|
5,645,692 |
|||||
| Finance leases |
|
472,989 |
|
- |
|
- |
|
472,989 |
|||||
| Consumer loans |
|
2,058,217 |
|
51,726 |
|
26,711 |
|
2,136,654 |
|||||
| Loans held for investment |
|
9,322,038 |
|
466,068 |
|
1,989,183 |
|
11,777,289 |
|||||
| Loans held for sale |
|
44,994 |
|
681 |
|
4,614 |
|
50,289 |
|||||
| Total loans | $ |
9,367,032 |
$ |
466,749 |
$ |
1,993,797 |
$ |
11,827,578 |
|||||
Table 9 – Non-Performing Assets
| As of | ||||||||||||
| (Dollars in thousands) | September 30, |
June 30, |
December 31, |
|||||||||
2021 |
2021 |
2020 |
||||||||||
| Nonaccrual loans held for investment: | ||||||||||||
| Residential mortgage | $ |
60,589 |
|
$ |
121,695 |
|
$ |
125,367 |
|
|||
| Commercial mortgage |
|
26,812 |
|
|
27,242 |
|
|
29,611 |
|
|||
| Commercial and Industrial |
|
18,990 |
|
|
18,835 |
|
|
20,881 |
|
|||
| Construction |
|
6,093 |
|
|
6,175 |
|
|
12,971 |
|
|||
| Consumer and Finance leases |
|
9,657 |
|
|
8,703 |
|
|
16,259 |
|
|||
| Total nonaccrual loans held for investment |
|
122,141 |
|
|
182,650 |
|
|
205,089 |
|
|||
| OREO |
|
43,798 |
|
|
66,586 |
|
|
83,060 |
|
|||
| Other repossessed property |
|
3,550 |
|
|
3,470 |
|
|
5,357 |
|
|||
| Other assets (1) |
|
2,894 |
|
|
2,928 |
|
|
- |
|
|||
| Total non-performing assets (2) | $ |
172,383 |
|
$ |
255,634 |
|
$ |
293,506 |
|
|||
| Past-due loans 90 days and still accruing (3) | $ |
148,322 |
|
$ |
144,262 |
|
$ |
146,889 |
|
|||
| Allowance for credit losses on loans | $ |
288,360 |
|
$ |
324,958 |
|
$ |
385,887 |
|
|||
| Allowance for credit losses on loans to total nonaccrual loans held for investment |
|
236.09 |
% |
|
177.91 |
% |
|
188.16 |
% |
|||
| Allowance for credit losses on loans to total nonaccrual loans held for investment, excluding residential real estate loans |
|
468.48 |
% |
|
533.11 |
% |
|
484.04 |
% |
|||
| _______________ | |
(1) |
Residential pass-through MBS issued by the Puerto Rico Housing Finance Authority held as part of the available-for-sale investment securities portfolio with an amortized cost of |
(2) |
Excludes PCD loans previously accounted for under ASC 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans accounted for under ASC 310-30 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 accrete interest income based on the effective interest rate of the loan pools determined at the time of adoption of CECL and 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 amortized cost of such loans as of September 30, 2021, June 30,2021, and December 31, 2020, amounted to |
(3) |
These include rebooked loans, which were previously pooled into GNMA securities, amounting to |
Table 10 – Non-Performing Assets by Geography
| As of | ||||||||||
| (In thousands) | September 30, |
June 30, |
December 31, |
|||||||
2021 |
2021 |
2020 |
||||||||
| Nonaccrual loans held for investment: | ||||||||||
| Residential mortgage | $ |
41,309 |
$ |
100,089 |
$ |
101,763 |
||||
| Commercial mortgage |
|
16,839 |
|
17,172 |
|
18,733 |
||||
| Commercial and Industrial |
|
16,799 |
|
16,632 |
|
18,876 |
||||
| Construction |
|
4,604 |
|
4,679 |
|
5,323 |
||||
| Finance leases |
|
698 |
|
598 |
|
1,466 |
||||
| Consumer |
|
8,511 |
|
7,628 |
|
13,615 |
||||
| Total nonaccrual loans held for investment |
|
88,760 |
|
146,798 |
|
159,776 |
||||
| OREO |
|
39,375 |
|
61,976 |
|
78,618 |
||||
| Other repossessed property |
|
3,333 |
|
3,262 |
|
5,120 |
||||
| Other assets (1) |
|
2,894 |
|
2,928 |
|
- |
||||
| Total non-performing assets (2) | $ |
134,362 |
$ |
214,964 |
$ |
243,514 |
||||
| Past-due loans 90 days and still accruing (3) | $ |
146,823 |
$ |
142,622 |
$ |
144,619 |
||||
| Nonaccrual loans held for investment: | ||||||||||
| Residential mortgage | $ |
10,491 |
$ |
9,372 |
$ |
9,182 |
||||
| Commercial mortgage |
|
9,973 |
|
10,070 |
|
10,878 |
||||
| Commercial and Industrial |
|
1,415 |
|
1,400 |
|
1,444 |
||||
| Construction |
|
1,489 |
|
1,496 |
|
7,648 |
||||
| Consumer |
|
88 |
|
136 |
|
354 |
||||
| Total nonaccrual loans held for investment |
|
23,456 |
|
22,474 |
|
29,506 |
||||
| OREO |
|
4,189 |
|
4,610 |
|
4,411 |
||||
| Other repossessed property |
|
175 |
|
112 |
|
109 |
||||
| Total non-performing assets | $ |
27,820 |
$ |
27,196 |
$ |
34,026 |
||||
| Past-due loans 90 days and still accruing | $ |
1,249 |
$ |
1,356 |
$ |
2,020 |
||||
| Nonaccrual loans held for investment: | ||||||||||
| Residential mortgage | $ |
8,789 |
$ |
12,234 |
$ |
14,422 |
||||
| Commercial mortgage |
|
- |
|
- |
|
- |
||||
| Commercial and Industrial |
|
776 |
|
803 |
|
561 |
||||
| Construction |
|
- |
|
- |
|
- |
||||
| Consumer |
|
360 |
|
341 |
|
824 |
||||
| Total nonaccrual loans held for investment |
|
9,925 |
|
13,378 |
|
15,807 |
||||
| OREO |
|
234 |
|
- |
|
31 |
||||
| Other repossessed property |
|
42 |
|
96 |
|
128 |
||||
| Total non-performing assets | $ |
10,201 |
$ |
13,474 |
$ |
15,966 |
||||
| Past-due loans 90 days and still accruing | $ |
250 |
$ |
284 |
$ |
250 |
||||
(1) |
Residential pass-through MBS issued by the Puerto Rico Housing Finance Authority held as part of the available-for-sale investment securities portfolio with an amortized cost of |
(2) |
Excludes PCD loans previously accounted for under ASC 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans accounted for under ASC 310-30 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 accrete interest income based on the effective interest rate of the loan pools determined at the time of adoption of CECL and 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 amortized cost of such loans as of September 30, 2021, June 30,2021, and December 31, 2020, amounted to |
(3) |
These include rebooked loans, which were previously pooled into GNMA securities, amounting to |
Table 11 – Allowance for Credit Losses for Loans and Finance Leases
| Quarter Ended | Nine-Month Period Ended | |||||||||||||||||||
| (Dollars in thousands) | September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|||||||||||||||
2021 |
2021 |
2020 |
2021 |
2020 |
||||||||||||||||
| Allowance for credit losses on loans and finance leases, beginning balance | $ |
324,958 |
|
$ |
358,936 |
|
$ |
319,297 |
|
$ |
385,887 |
|
$ |
155,139 |
|
|||||
| Impact of adopting CECL |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
81,165 |
|
|||||
| Allowance for credit losses on loans and finance leases, beginning balance after CECL adoption |
|
324,958 |
|
|
358,936 |
|
|
319,297 |
|
|
385,887 |
|
|
236,304 |
|
|||||
| Provision for credit losses on loans and finance leases (benefit) expense |
|
(8,734 |
) |
|
(26,302 |
) |
|
48,078 |
|
|
(49,479 |
) |
|
158,531 |
|
|||||
| Initial allowance on PCD loans |
|
- |
|
|
- |
|
|
28,744 |
|
|
- |
|
|
28,744 |
|
|||||
| Net (charge-offs) recoveries of loans: | ||||||||||||||||||||
| Residential mortgage |
|
(23,450 |
)(1) |
|
|
(1,987 |
) |
|
(2,283 |
) |
|
(27,529 |
)(1) |
|
|
(7,856 |
) |
|||
| Commercial mortgage |
|
(386 |
) |
|
(31 |
) |
|
(3,104 |
) |
|
(1,157 |
) |
|
(3,163 |
) |
|||||
| Commercial and Industrial |
|
327 |
|
|
5,809 |
|
|
(70 |
) |
|
5,591 |
|
|
(75 |
) |
|||||
| Construction |
|
35 |
|
|
38 |
|
|
36 |
|
|
64 |
|
|
6 |
|
|||||
| Consumer and finance leases |
|
(4,390 |
) |
|
(11,505 |
) |
|
(5,980 |
) |
|
(25,017 |
) |
|
(27,773 |
) |
|||||
| Net charge-offs |
|
(27,864 |
) |
|
(7,676 |
) |
|
(11,401 |
) |
|
(48,048 |
) |
|
(38,861 |
) |
|||||
| Allowance for credit losses on loans and finance leases, end of period | $ |
288,360 |
|
$ |
324,958 |
|
$ |
384,718 |
|
$ |
288,360 |
|
$ |
384,718 |
|
|||||
| Allowance for credit losses on loans and finance leases to period end total loans held for investment |
|
2.59 |
% |
|
2.85 |
% |
|
3.25 |
% |
|
2.59 |
% |
|
3.25 |
% |
|||||
| Net charge-offs (annualized) to average loans outstanding during the period (2) |
|
0.99 |
% |
|
0.27 |
% |
|
0.45 |
% |
|
0.56 |
% |
|
0.55 |
% |
|||||
| Provision for credit losses on loans and finance leases to net charge-offs during the period | -0.31x |
-3.43x |
4.22x |
-1.03x |
4.08x |
|||||||||||||||
(1) |
Includes net charge-offs totaling |
|
(2) |
Excluding net charge-offs associated with the bulk sale, total net charge-offs to average loans for the third quarter and first nine months of 2021 was |
|
Table 12 – Net Charge-Offs to Average Loans
Nine-Month Period Ended |
Year Ended | |||||||||||
September 30, 2021 |
December 31, |
December 31, |
December 31, |
December 31, |
||||||||
| (annualized) | 2020 |
2019 |
2018 |
2017 |
||||||||
| Residential mortgage |
|
(1) |
|
|
|
|
||||||
| Commercial mortgage |
|
|
|
|
|
|||||||
| Commercial and Industrial |
- |
|
|
|
|
|||||||
| Construction |
- |
- |
- |
|
|
|||||||
| Consumer and finance leases |
|
|
|
|
|
|||||||
| Total loans |
|
(1) |
|
|
|
|
||||||
(1) |
Includes net charge-offs totaling |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20211025005222/en/
First BanCorp.
Senior Vice President
Corporate Strategy
ramon.rodriguez@firstbankpr.com
(787) 729-8200 Ext. 82179
Source: First BanCorp.
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