First BanCorp. Announces Earnings for the Quarter Ended June 30, 2024
Aurelio Alemán, President and Chief Executive Officer of First BanCorp, commented: “We closed the first half of the year with another quarter of solid operating performance across most franchise metrics and remain highly encouraged by our growth prospects throughout the rest of the year. Once again, we delivered a strong return on assets of 1.61%, grew our net interest margin, registered organic loan growth across all businesses, grew core deposits and returned 100% of earnings to shareholders in the form of buybacks and common stock dividends. We continue to generate top quartile financial results through our proven business model, ongoing operational efficiency, and commitment to preserve shareholder value.
Core deposits, other than brokered and government deposits, were up by Our balance sheet is uniquely positioned to continue serving our clients and communities while growing the franchise and without compromising our strong financial profile. We continue to prudently manage our capital and expect to capitalize on value-creating growth opportunities that best serve the long-term interest of the franchise and its shareholders. |
Q2 |
|
Q1 |
|
Q2 |
|
YTD June |
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2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
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Financial Highlights | |||||||||||
Net interest income |
|
|
|
|
|
||||||
Provision for credit losses |
11,605 |
12,167 |
22,230 |
23,772 |
37,732 |
||||||
Non-interest income |
32,038 |
33,983 |
36,271 |
66,021 |
68,789 |
||||||
Non-interest expenses |
118,682 |
120,923 |
112,917 |
239,605 |
228,185 |
||||||
Income before income taxes |
101,379 |
97,413 |
100,939 |
198,792 |
203,572 |
||||||
Income tax expense |
25,541 |
23,955 |
30,284 |
49,496 |
62,219 |
||||||
Net income |
|
|
|
|
|
||||||
Selected Financial Data | |||||||||||
Net interest margin |
4.22% |
4.16% |
4.23% |
4.19% |
4.29% |
||||||
Efficiency ratio |
51.23% |
52.46% |
47.83% |
51.84% |
48.60% |
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Earnings per share - diluted |
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|
|
|
|
||||||
Book value per share |
|
|
|
|
|
||||||
Tangible book value per share (1) |
|
|
|
|
|
||||||
Return on average equity |
20.80% |
19.56% |
19.66% |
20.17% |
20.31% |
||||||
Return on average assets |
1.61% |
1.56% |
1.51% |
1.59% |
1.53% |
||||||
(1) Represents a non-GAAP financial measure. Refer to Non-GAAP Disclosures - Non-GAAP Financial Measures for the definition of and additional information about this non-GAAP financial measure. | |||||||||||
(In thousands, except per share information and financial ratios) |
Results for Second Quarter of 2024 compared to First Quarter of 2024 |
||
Profitability |
Net income –
Income before income taxes
–
Adjusted pre-tax, pre-provision income (Non-GAAP)
(1)
–
Net interest income –
Provision for credit losses –
Non-interest income –
Non-interest expenses – |
|
|
||
Balance
|
Total loans – grew by
Core deposits (other than brokered and government deposits) –increased by
Government deposits (fully collateralized) – decreased by |
|
|
||
Asset
|
Allowance for credit losses (“ACL”) coverage ratio – amounted to 2.06%, compared to 2.14%. Annualized net charge-offs to average loans ratio increased to 0.69%, compared to 0.37%. First quarter of 2024 reflects a 31 basis points decrease due to the
Non-performing assets – decreased by |
|
|
||
Liquidity
|
Liquidity – Cash and cash equivalents amounted to
Capital – Repurchased |
NET INTEREST INCOME
The following table sets forth information concerning net interest income for the last five quarters:
|
|
Quarter Ended |
||||||||||||||||||
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest income |
|
$ |
272,245 |
|
|
$ |
268,505 |
|
|
$ |
265,481 |
|
|
$ |
263,405 |
|
|
$ |
252,204 |
|
Interest expense |
|
|
72,617 |
|
|
|
71,985 |
|
|
|
68,799 |
|
|
|
63,677 |
|
|
|
52,389 |
|
Net interest income |
|
$ |
199,628 |
|
|
$ |
196,520 |
|
|
$ |
196,682 |
|
|
$ |
199,728 |
|
|
$ |
199,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans and leases |
|
$ |
12,272,816 |
|
|
$ |
12,207,840 |
|
|
$ |
12,004,881 |
|
|
$ |
11,783,456 |
|
|
$ |
11,591,516 |
|
Total securities, other short-term investments and interest-bearing cash balances |
|
|
6,698,609 |
|
|
|
6,720,395 |
|
|
|
6,835,407 |
|
|
|
7,325,226 |
|
|
|
7,333,989 |
|
Average interest-earning assets |
|
$ |
18,971,425 |
|
|
$ |
18,928,235 |
|
|
$ |
18,840,288 |
|
|
$ |
19,108,682 |
|
|
$ |
18,925,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average interest-bearing liabilities |
|
$ |
11,868,658 |
|
|
$ |
11,838,159 |
|
|
$ |
11,665,459 |
|
|
$ |
11,671,938 |
|
|
$ |
11,176,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average Yield/Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average yield on interest-earning assets - GAAP |
|
|
5.76 |
% |
|
|
5.69 |
% |
|
|
5.59 |
% |
|
|
5.47 |
% |
|
|
5.35 |
% |
Average rate on interest-bearing liabilities - GAAP |
|
|
2.45 |
% |
|
|
2.44 |
% |
|
|
2.34 |
% |
|
|
2.16 |
% |
|
|
1.88 |
% |
Net interest spread - GAAP |
|
|
3.31 |
% |
|
|
3.25 |
% |
|
|
3.25 |
% |
|
|
3.31 |
% |
|
|
3.47 |
% |
Net interest margin - GAAP |
|
|
4.22 |
% |
|
|
4.16 |
% |
|
|
4.14 |
% |
|
|
4.15 |
% |
|
|
4.23 |
% |
Net interest income amounted to
-
A
$2.8 million increase in interest income on loans, driven by:
- A
- A
-
A
$1.8 million increase in interest income from interest-bearing cash balances, driven by a$133.8 million increase in the average balance of interest-bearing cash balances, primarily consisting of cash balances deposited at theFederal Reserve Bank (the “FED”).
Partially offset by:
-
A
$0.8 million net decrease in interest income from investment securities, driven by a$0.5 million decrease in interest income on debt securities associated with a$156.1 million decrease in the average balance and a$0.5 million decrease related to a higher level of premium amortization expense due to changes in anticipated prepayments ofU.S. agency mortgage-backed securities (“MBS”), partially offset by a$0.2 million increase in interest income on other equity securities.
-
A
$0.7 million net increase in interest expense on interest-bearing deposits, consisting of:
- A
Partially offset by:
- A
- A
Net interest margin for the second quarter of 2024 was 4.22%, a 6 basis points increase when compared to the first quarter of 2024, mostly reflecting a change in asset mix from lower-yielding interest-earning assets to higher-yielding interest-earning assets and higher yields on commercial loans, partially offset by an increase in the cost of interest-bearing deposits.
NON-INTEREST INCOME
The following table sets forth information concerning non-interest income for the last five quarters:
Quarter Ended | ||||||||||||||
|
|
|
|
|
||||||||||
(In thousands) | ||||||||||||||
Service charges and fees on deposit accounts | $ |
9,725 |
$ |
9,662 |
$ |
9,662 |
$ |
9,552 |
$ |
9,287 |
||||
Mortgage banking activities |
3,419 |
2,882 |
2,094 |
2,821 |
2,860 |
|||||||||
Gain on early extinguishment of debt |
- |
- |
- |
- |
1,605 |
|||||||||
Insurance commission income |
2,786 |
5,507 |
2,379 |
2,790 |
2,747 |
|||||||||
Card and processing income |
11,523 |
11,312 |
11,015 |
10,841 |
11,135 |
|||||||||
Other non-interest income |
4,585 |
4,620 |
8,459 |
4,292 |
8,637 |
|||||||||
Non-interest income | $ |
32,038 |
$ |
33,983 |
$ |
33,609 |
$ |
30,296 |
$ |
36,271 |
Non-interest income decreased by
-
A
$2.7 million decrease in insurance commission income mainly driven by$3.2 million in seasonal contingent commissions recorded in the first quarter of 2024 based on the prior year’s production of insurance policies.
Partially offset by:
-
A
$0.5 million increase in revenues from mortgage banking activities, mainly driven by an increase in the net realized gain on sales of residential mortgage loans in the secondary market due to a higher volume of sales and a$0.2 million net increase in the fair value of to-be-announced forward contracts and interest rate lock commitments. During the second and first quarters of 2024, net realized gains of$1.5 million and$1.1 million , respectively, were recognized as a result ofGovernment National Mortgage Association (“GNMA”) securitization transactions and whole loan sales toU.S. government-sponsored enterprises amounting to$43.5 million and$31.5 million , respectively.
NON-INTEREST EXPENSES
The following table sets forth information concerning non-interest expenses for the last five quarters:
Quarter Ended | |||||||||||||||||||
|
|
|
|
|
|||||||||||||||
(In thousands) | |||||||||||||||||||
Employees' compensation and benefits |
$ |
57,456 |
|
|
$ |
59,506 |
|
|
$ |
55,584 |
|
|
$ |
56,535 |
|
|
$ |
54,314 |
|
Occupancy and equipment |
|
21,851 |
|
|
|
21,381 |
|
|
|
21,847 |
|
|
|
21,781 |
|
|
|
21,097 |
|
Business promotion |
|
4,359 |
|
|
|
3,842 |
|
|
|
6,725 |
|
|
|
4,759 |
|
|
|
4,167 |
|
Professional service fees: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Collections, appraisals and other credit-related fees |
|
1,149 |
|
|
|
1,366 |
|
|
|
952 |
|
|
|
930 |
|
|
|
1,231 |
|
Outsourcing technology services |
|
7,698 |
|
|
|
7,469 |
|
|
|
7,003 |
|
|
|
7,261 |
|
|
|
7,278 |
|
Other professional fees |
|
3,584 |
|
|
|
3,841 |
|
|
|
3,295 |
|
|
|
2,831 |
|
|
|
3,087 |
|
Taxes, other than income taxes |
|
5,408 |
|
|
|
5,129 |
|
|
|
5,535 |
|
|
|
5,465 |
|
|
|
5,124 |
|
|
|
2,316 |
|
|
|
3,102 |
|
|
|
8,454 |
|
|
|
2,143 |
|
|
|
2,143 |
|
Other insurance and supervisory fees |
|
2,287 |
|
|
|
2,293 |
|
|
|
2,308 |
|
|
|
2,356 |
|
|
|
2,352 |
|
Net gain on OREO operations |
|
(3,609 |
) |
|
|
(1,452 |
) |
|
|
(1,005 |
) |
|
|
(2,153 |
) |
|
|
(1,984 |
) |
Credit and debit card processing expenses |
|
7,607 |
|
|
|
5,751 |
|
|
|
7,360 |
|
|
|
6,779 |
|
|
|
6,540 |
|
Communications |
|
2,261 |
|
|
|
2,097 |
|
|
|
2,134 |
|
|
|
2,219 |
|
|
|
1,992 |
|
Other non-interest expenses |
|
6,315 |
|
|
|
6,598 |
|
|
|
6,413 |
|
|
|
5,732 |
|
|
|
5,576 |
|
Total non-interest expenses |
$ |
118,682 |
|
|
$ |
120,923 |
|
|
$ |
126,605 |
|
|
$ |
116,638 |
|
|
$ |
112,917 |
|
Non-interest expenses amounted to
-
A
$2.1 million decrease in employees’ compensation and benefits expense, mainly driven by stock-based compensation expense of retirement-eligible employees recognized during the first quarter of 2024 and a decrease in payroll taxes due to employees reaching maximum taxable amounts.
-
A
$2.2 million increase in net gain on other real estate owned (“OREO”) operations, mainly driven by the aforementioned$2.3 million realized gain on sale of a commercial real estate OREO property inPuerto Rico .
Partially offset by:
-
A
$1.9 million increase in credit and debit card processing expenses, mainly due to$1.3 million in certain credit card expense reimbursements recognized during the first quarter of 2024.
-
A
$0.5 million increase in occupancy and equipment expenses.
-
A
$0.5 million increase in business promotion expenses as part of ongoing marketing efforts.
INCOME TAXES
The Corporation recorded an income tax expense of
The Corporation’s estimated annual effective tax rate, excluding entities with pre-tax losses from which a tax benefit cannot be recognized and discrete items, was 24.1% for the second quarter of 2024. As of
CREDIT QUALITY
Non-Performing Assets
The following table sets forth information concerning non-performing assets for the last five quarters:
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
||||||||||
Nonaccrual loans held for investment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential mortgage |
$ |
31,396 |
|
|
$ |
32,685 |
|
|
$ |
32,239 |
|
|
$ |
31,946 |
|
|
$ |
33,252 |
|
Construction |
|
4,742 |
|
|
|
1,498 |
|
|
|
1,569 |
|
|
|
1,640 |
|
|
|
1,677 |
|
Commercial mortgage |
|
11,736 |
|
|
|
11,976 |
|
|
|
12,205 |
|
|
|
21,632 |
|
|
|
21,536 |
|
C&I |
|
27,661 |
|
|
|
25,067 |
|
|
|
15,250 |
|
|
|
18,809 |
|
|
|
9,194 |
|
Consumer and finance leases |
|
20,638 |
|
|
|
21,739 |
|
|
|
22,444 |
|
|
|
19,137 |
|
|
|
16,362 |
|
Total nonaccrual loans held for investment |
$ |
96,173 |
|
|
$ |
92,965 |
|
|
$ |
83,707 |
|
|
$ |
93,164 |
|
|
$ |
82,021 |
|
OREO |
|
21,682 |
|
|
|
28,864 |
|
|
|
32,669 |
|
|
|
28,563 |
|
|
|
31,571 |
|
Other repossessed property |
|
7,513 |
|
|
|
6,226 |
|
|
|
8,115 |
|
|
|
7,063 |
|
|
|
5,404 |
|
Other assets (1) |
|
1,532 |
|
|
|
1,551 |
|
|
|
1,415 |
|
|
|
1,448 |
|
|
|
2,111 |
|
Total non-performing assets (2) |
$ |
126,900 |
|
|
$ |
129,606 |
|
|
$ |
125,906 |
|
|
$ |
130,238 |
|
|
$ |
121,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Past due loans 90 days and still accruing (3) |
$ |
47,173 |
|
|
$ |
57,515 |
|
|
$ |
59,452 |
|
|
$ |
62,892 |
|
|
$ |
63,211 |
|
Nonaccrual loans held for investment to total loans held for investment |
|
0.78 |
% |
|
|
0.76 |
% |
|
|
0.69 |
% |
|
|
0.78 |
% |
|
|
0.70 |
% |
Nonaccrual loans to total loans |
|
0.78 |
% |
|
|
0.75 |
% |
|
|
0.69 |
% |
|
|
0.78 |
% |
|
|
0.70 |
% |
Non-performing assets to total assets |
|
0.67 |
% |
|
|
0.69 |
% |
|
|
0.67 |
% |
|
|
0.70 |
% |
|
|
0.63 |
% |
___________________________________________________________________ | |
(1) |
Residential pass-through MBS issued by the |
(2) |
Excludes purchased-credit deteriorated (“PCD”) loans previously accounted for under Accounting Standards Codification (“ASC”) Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans as “units of account” both at the time of adoption of current expected credit losses (“CECL”) on |
(3) |
These include rebooked loans, which were previously pooled into GNMA securities, amounting to |
Variances in credit quality metrics:
-
Total non-performing assets decreased by
$2.7 million to$126.9 million as ofJune 30, 2024 , compared to$129.6 million as ofMarch 31, 2024 . Total nonaccrual loans held for investment increased by$3.2 million to$96.2 million as ofJune 30, 2024 , compared to$93.0 million as ofMarch 31, 2024 .
The decrease in non-performing assets was mainly driven by:
- A
- A
- A
Partially offset by:
- A
- A
-
Inflows to nonaccrual loans held for investment were
$44.0 million in the second quarter of 2024, a decrease of$2.8 million , compared to inflows of$46.8 million in the first quarter of 2024. Inflows to nonaccrual consumer loans were$22.5 million in the second quarter of 2024, a decrease of$8.7 million compared to inflows of$31.2 million in the first quarter of 2024. Inflows to nonaccrual residential mortgage loans were$3.4 million in the second quarter of 2024, a decrease of$1.2 million compared to inflows of$4.6 million in the first quarter of 2024. Inflows to nonaccrual commercial and construction loans were$18.1 million in the second quarter of 2024, an increase of$7.1 million compared to inflows of$11.0 million in the first quarter of 2024. The net increase in inflows of commercial and construction loans was mostly related to the aforementioned$16.5 million commercial relationship in thePuerto Rico region. See Early Delinquencybelow for additional information.
-
Adversely classified commercial and construction loans increased by
$10.3 million to$86.8 million as ofJune 30, 2024 , also driven by the aforementioned inflow of a$16.5 million commercial relationship in thePuerto Rico region and the downgrade of a$5.1 million commercial mortgage loan in thePuerto Rico region, partially offset by an upgrade related to the aforementioned restoration to accrual status of a$10.0 million C&I loan in theFlorida region.
Early Delinquency
Total loans held for investment in early delinquency (i.e., 30-89 days past due accruing loans, as defined in regulatory reporting instructions) amounted to
Allowance for Credit Losses
The following table summarizes the activity of the ACL for on-balance sheet and off-balance sheet exposures during the second and first quarters of 2024:
|
|
Quarter Ended |
||||||||||||||||||||||||||||||
|
|
Loans and Finance Leases |
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
Residential Mortgage Loans |
|
Commercial and Construction Loans |
|
Consumer Loans and Finance Leases |
|
Total Loans and Finance Leases |
|
Unfunded Loans Commitments |
|
Held-to-Maturity |
|
Available-for-Sale |
|
Total ACL |
||||||||||||||||
Allowance for Credit Losses |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for credit losses, beginning balance |
|
$ |
56,689 |
|
|
$ |
73,337 |
|
|
$ |
133,566 |
|
|
$ |
263,592 |
|
|
$ |
4,919 |
|
|
$ |
1,235 |
|
|
$ |
442 |
|
|
$ |
270,188 |
|
Provision for credit losses - (benefit) expense |
|
|
(10,593 |
) |
|
|
(4,198 |
) |
|
|
26,721 |
|
|
|
11,930 |
|
|
|
(417 |
) |
|
|
32 |
|
|
|
60 |
|
|
|
11,605 |
|
Net (charge-offs) recoveries |
|
|
(45 |
) |
|
|
1,033 |
|
|
|
(21,978 |
) |
|
|
(20,990 |
) |
|
|
- |
|
|
|
- |
|
|
|
47 |
|
|
|
(20,943 |
) |
Allowance for credit losses, end of period |
|
$ |
46,051 |
|
|
$ |
70,172 |
|
|
$ |
138,309 |
|
|
$ |
254,532 |
|
|
$ |
4,502 |
|
|
$ |
1,267 |
|
|
$ |
549 |
|
|
$ |
260,850 |
|
Amortized cost of loans and finance leases |
|
$ |
2,809,666 |
|
|
$ |
5,863,843 |
|
|
$ |
3,711,999 |
|
|
$ |
12,385,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance for credit losses on loans to amortized cost |
|
|
1.64 |
% |
|
|
1.20 |
% |
|
|
3.73 |
% |
|
|
2.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Quarter Ended |
||||||||||||||||||||||||||||||
|
|
Loans and Finance Leases |
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
Residential Mortgage Loans |
|
Commercial and Construction Loans |
|
Consumer Loans and Finance Leases |
|
Total Loans and Finance Leases |
|
Unfunded Loans Commitments |
|
Held-to-Maturity |
|
Available-for-Sale |
|
Total ACL |
||||||||||||||||
Allowance for Credit Losses |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for credit losses, beginning balance |
|
$ |
57,397 |
|
|
$ |
71,426 |
|
|
$ |
133,020 |
|
|
$ |
261,843 |
|
|
$ |
4,638 |
|
|
$ |
2,197 |
|
|
$ |
511 |
|
|
$ |
269,189 |
|
Provision for credit losses - (benefit) expense |
|
|
(464 |
) |
|
|
(2,799 |
) |
|
|
16,180 |
|
|
|
12,917 |
|
|
|
281 |
|
|
|
(962 |
) |
|
|
(69 |
) |
|
|
12,167 |
|
Net (charge-offs) recoveries |
|
|
(244 |
) |
|
|
4,710 |
|
|
|
(15,634 |
) |
|
|
(11,168 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(11,168 |
) |
Allowance for credit losses, end of period |
|
$ |
56,689 |
|
|
$ |
73,337 |
|
|
$ |
133,566 |
|
|
$ |
263,592 |
|
|
$ |
4,919 |
|
|
$ |
1,235 |
|
|
$ |
442 |
|
|
$ |
270,188 |
|
Amortized cost of loans and finance leases |
|
$ |
2,801,587 |
|
|
$ |
5,830,014 |
|
|
$ |
3,679,847 |
|
|
$ |
12,311,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance for credit losses on loans to amortized cost |
|
|
2.02 |
% |
|
|
1.26 |
% |
|
|
3.63 |
% |
|
|
2.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
The main variances of the total ACL by main categories are discussed below:
Allowance for Credit Losses for Loans and Finance Leases
As of
The ACL for residential mortgage loans decreased by
The ACL for commercial and construction loans decreased by
Meanwhile, the ACL for consumer loans increased by
The provision for credit losses on loans and finance leases was
-
Provision for credit losses for the residential mortgage loan portfolio was a net benefit of
$10.6 million for the second quarter of 2024, compared to a net benefit of$0.5 million for the first quarter of 2024. The increase in net benefit during the second quarter of 2024 was mainly the result of the aforementioned updated historical loss experience.
-
Provision for credit losses for the commercial and construction loan portfolios was a net benefit of
$4.2 million for the second quarter of 2024, compared to a net benefit of$2.8 million for the first quarter of 2024. The increase in net benefit during the second quarter of 2024 was mainly driven by an improvement on the economic outlook of certain macroeconomic variables, particularly in variables associated with commercial real estate property performance, and$1.2 million in recoveries of two commercial loans in theFlorida region during the second quarter of 2024, compared to a$5.0 million recovery of a C&I loan in thePuerto Rico region during the first quarter of 2024.
-
Provision for credit losses for the consumer loan and finance lease portfolios was an expense of
$26.7 million for the second quarter of 2024, compared to an expense of$16.2 million for the first quarter of 2024. The increase in provision expense was mainly driven by the$9.5 million recovery associated with the aforementioned bulk sale of fully charged-off consumer loans during the first quarter of 2024, the upward historical loss experience resulting in higher required reserve levels in the auto loans and finance leases portfolios, increases in portfolio volumes, and increases in historical charge-off levels.
Net Charge-Offs
The following table presents ratios of annualized net charge-offs (recoveries) to average loans held-in-portfolio for the last five quarters:
Quarter Ended | ||||||||||||||
|
|
|
|
|
||||||||||
Residential mortgage |
0.01 |
% |
0.03 |
% |
-0.04 |
% |
-0.01 |
% |
0.06 |
% |
||||
Construction |
-0.02 |
% |
-0.02 |
% |
0.01 |
% |
-3.18 |
% |
-0.99 |
% |
||||
Commercial mortgage |
-0.07 |
% |
-0.01 |
% |
0.09 |
% |
-0.01 |
% |
0.01 |
% |
||||
Commercial and Industrial |
-0.08 |
% |
-0.59 |
% |
0.00 |
% |
-0.02 |
% |
0.87 |
% |
||||
Consumer loans and finance leases |
2.38 |
% |
1.70 |
% |
(1) |
2.26 |
% |
1.79 |
% |
1.51 |
% |
|||
Total loans |
0.69 |
% |
0.37 |
% |
(1) |
0.69 |
% |
0.48 |
% |
0.67 |
% |
(1) |
The |
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
Allowance for Credit Losses for Unfunded Loan Commitments
As of
Allowance for Credit Losses for
As of
LIQUIDITY
Cash and cash equivalents decreased by
In addition to the aforementioned available credit from the FHLB, the Corporation also maintains borrowing capacity at the FED Discount Window Program. The Corporation does not consider borrowing capacity from the FED Discount Window as a primary source of liquidity but had approximately
The Corporation’s total deposits, excluding brokered CDs, amounted to
STATEMENT OF FINANCIAL CONDITION
Total assets were approximately
The following variances within the main components of total assets are noted:
-
A
$98.2 million decrease in cash and cash equivalents, related to loan growth, the repurchases of common stock, the payment of common stock dividends, and repayment of matured brokered CDs, partially offset by cash inflows from the investment securities portfolio.
-
A
$95.1 million decrease in investment securities, mainly driven by principal repayments of$132.9 million , which include scheduled repayments of$97.9 million and maturities of$35.0 million , partially offset by$28.0 million in purchases of Community Reinvestment Act qualified debt securities during the second quarter of 2024 and a$10.6 million increase in the fair value of available-for-sale debt securities attributable to changes in market interest rates.
-
A
$72.4 million increase in total loans. The variance consisted of increases of$47.6 million in thePuerto Rico region,$17.7 million in theFlorida region, and$7.1 million in theVirgin Islands region. On a portfolio basis, the variance consisted of increases of$33.8 million in commercial and construction loans,$32.2 million in consumer loans, primarily auto loans and finance leases in thePuerto Rico region, and$6.4 million in residential mortgage loans. The growth in commercial and construction loans was mainly in thePuerto Rico region, driven by a$43.1 million increase in the floor plan lines of credit portfolio and a$9.6 million disbursement of a construction loan, partially offset by$27.4 million in payoffs associated with two C&I loans.
Total loan originations, including refinancings, renewals, and draws from existing commitments (excluding credit card utilization activity), amounted to$1.1 billion in the second quarter of 2024, an increase of$25.3 million compared to the first quarter of 2024. The variances by geography and portfolio basis follow:
Total loan originations in thePuerto Rico region amounted to$840.5 million in the second quarter of 2024, an increase of$33.0 million , compared to$807.5 million in the first quarter of 2024. The$33.0 million increase in total loan originations consisted of increases of$24.9 million in residential mortgage loans,$7.2 million in consumer loans, and$0.9 million in commercial and construction loans.
Total loan originations in theVirgin Islands region amounted to$20.8 million in the second quarter of 2024, compared to$19.1 million in the first quarter of 2024. The$1.7 million increase in total loan originations consisted of increases of$1.5 million in commercial and construction loans and$0.9 million in consumer loans, partially offset by a$0.7 million decrease in residential mortgage loans.
Total loan originations in theFlorida region amounted to$251.0 million in the second quarter of 2024, compared to$260.4 million in the first quarter of 2024. The$9.4 million decline in total loan originations was mainly due to a$21.7 million decrease in commercial and construction loans, principally in commercial mortgage loans. This variance was partially offset by increases of$9.8 million in residential mortgage loans and$2.5 million in consumer loans.
Total liabilities were approximately
-
Total deposits decreased
$16.6 million consisting of:
-
A
$100.9 million decrease in brokered CDs. The decline reflects maturing short-term brokered CDs amounting to$174.6 million with an all-in cost of 5.51% that were paid off during the second quarter of 2024, partially offset by$73.7 million of new issuances with original average maturities of approximately 1 year and an all-in cost of 5.18%.
-
A
$47.4 million decrease in government deposits, which includes a decline of$76.6 million in thePuerto Rico region, partially offset by increases of$28.3 million in theVirgin Islands region and$0.9 million in theFlorida region.
-
A
$131.7 million increase in deposits, excluding brokered CDs and government deposits, reflecting growth of$70.4 million in thePuerto Rico region,$41.4 million in theFlorida region, and$19.9 million in theVirgin Islands region. The increase in such deposits includes a$68.5 million increase in time deposits and a$46.8 million increase in non-interest-bearing deposits.
Total stockholders’ equity amounted to
As of
Meanwhile, estimated CET1 capital, tier 1 capital, total capital and leverage ratios of our banking subsidiary,
Tangible Common Equity (Non-GAAP)
On a non-GAAP basis, the Corporation’s tangible common equity ratio increased to 7.66% as of
The following table presents a reconciliation of the Corporation’s tangible common equity and tangible assets to the most comparable GAAP items as of the indicated dates:
|
|
|
|
|
|
|
|
|
|
||||||||||
(In thousands, except ratios and per share information) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tangible Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total common equity - GAAP |
$ |
1,491,460 |
|
|
$ |
1,479,717 |
|
|
$ |
1,497,609 |
|
|
$ |
1,303,068 |
|
|
$ |
1,397,999 |
|
|
|
(38,611 |
) |
|
|
(38,611 |
) |
|
|
(38,611 |
) |
|
|
(38,611 |
) |
|
|
(38,611 |
) |
Other intangible assets |
|
(9,700 |
) |
|
|
(11,542 |
) |
|
|
(13,383 |
) |
|
|
(15,229 |
) |
|
|
(17,092 |
) |
Tangible common equity - non-GAAP |
$ |
1,443,149 |
|
|
$ |
1,429,564 |
|
|
$ |
1,445,615 |
|
|
$ |
1,249,228 |
|
|
$ |
1,342,296 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tangible Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets - GAAP |
$ |
18,881,374 |
|
|
$ |
18,890,961 |
|
|
$ |
18,909,549 |
|
|
$ |
18,594,608 |
|
|
$ |
19,152,455 |
|
|
|
(38,611 |
) |
|
|
(38,611 |
) |
|
|
(38,611 |
) |
|
|
(38,611 |
) |
|
|
(38,611 |
) |
Other intangible assets |
|
(9,700 |
) |
|
|
(11,542 |
) |
|
|
(13,383 |
) |
|
|
(15,229 |
) |
|
|
(17,092 |
) |
Tangible assets - non-GAAP |
$ |
18,833,063 |
|
|
$ |
18,840,808 |
|
|
$ |
18,857,555 |
|
|
$ |
18,540,768 |
|
|
$ |
19,096,752 |
|
Common shares outstanding |
|
163,865 |
|
|
|
166,707 |
|
|
|
169,303 |
|
|
|
174,386 |
|
|
|
179,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tangible common equity ratio - non-GAAP |
|
7.66 |
% |
|
|
7.59 |
% |
|
|
7.67 |
% |
|
|
6.74 |
% |
|
|
7.03 |
% |
Tangible book value per common share - non-GAAP |
$ |
8.81 |
|
|
$ |
8.58 |
|
|
$ |
8.54 |
|
|
$ |
7.16 |
|
|
$ |
7.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exposure to Puerto Rico Government
As of
The aforementioned exposure to municipalities in
As of
NON-GAAP DISCLOSURES
This press release contains GAAP financial measures and non-GAAP financial measures. Non-GAAP financial measures are used when management believes that the presentation of these non-GAAP financial measures enhances the ability of analysts and investors to analyze trends in the Corporation’s business and understand the performance of the Corporation. The Corporation may utilize these non-GAAP financial measures as guides in its budgeting and long-term planning process. Where non-GAAP financial measures are used, the most comparable GAAP financial measure, as well as the reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure, can be found in the text or in the tables in or attached to this press release. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.
Certain non-GAAP financial measures, such as adjusted net income and adjusted earnings per share, adjusted pre-tax, pre-provision income, and adjusted non-interest expenses exclude the effect of items that management believes are not reflective of core operating performance (the “Special Items”). Other non-GAAP financial measures include adjusted net interest income and adjusted net interest income margin, tangible common equity, tangible book value per common share, and certain capital ratios. These measures should be read in conjunction with the accompanying tables (Exhibit A), which are an integral part of this press release, and the Corporation’s other financial information that is presented in accordance with GAAP.
Special Items
The financial results for the second and first quarters of 2024 and second quarter of 2023 included the following Special Items:
Quarters Ended
FDIC Special Assessment Expense
Charges of
Quarter Ended
Gain Recognized from Legal Settlement
During the second quarter of 2023, the Corporation recognized a
Gain on Early Extinguishment of Debt
During the second quarter of 2023, the Corporation recognized a
Non-GAAP Financial Measures
Adjusted Pre-Tax, Pre-Provision Income
Adjusted pre-tax, pre-provision income is a non-GAAP performance metric that management uses and believes that investors may find useful in analyzing underlying performance trends, particularly in times of economic stress, including as a result of natural catastrophes or health epidemics. Adjusted pre-tax, pre-provision income, as defined by management, represents income before income taxes adjusted to exclude the provisions for credit losses on loans, unfunded loan commitments and debt securities. In addition, from time to time, earnings are also adjusted for certain items that management believes are not reflective of core operating performance, which are regarded as Special Items.
Tangible Common Equity Ratio and Tangible Book Value per Common Share
The tangible common equity ratio and tangible book value per common share are non-GAAP financial measures that management believes are generally used by the financial community to evaluate capital adequacy. Tangible common equity is total common equity less goodwill and other intangible assets. Tangible assets are total assets less goodwill and other intangible assets. Tangible common equity ratio is tangible common equity divided by tangible assets. Tangible book value per common share is tangible assets divided by common shares outstanding. Refer to Statement of Financial Condition - Tangible Common Equity (Non-GAAP) for a reconciliation of the Corporation’s total stockholders’ equity and total assets in accordance with GAAP to the non-GAAP financial measures of tangible common equity and tangible assets, respectively. Management uses and believes that many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with other more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase method of accounting for mergers and acquisitions. Accordingly, the Corporation believes that disclosure of these financial measures may be useful to investors. Neither tangible common equity nor tangible assets, or the related measures, should be considered in isolation or as a substitute for stockholders’ equity, total assets, or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Corporation calculates its tangible common equity, tangible assets, and any other related measures may differ from that of other companies reporting measures with similar names.
Net Interest Income Excluding Valuations, and on a Tax-Equivalent Basis
Net interest income, interest rate spread, and net interest margin are reported excluding the changes in the fair value of derivative instruments and on a tax-equivalent basis in order to provide to investors additional information about the Corporation’s net interest income that management uses and believes should facilitate comparability and analysis of the periods presented. The changes in the fair value of derivative instruments have no effect on interest due or interest earned on interest-bearing liabilities or interest-earning assets, respectively. The tax-equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a marginal income tax rate. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. Refer to Table 4 in the accompanying tables (Exhibit A) for a reconciliation of the Corporation’s net interest income to adjusted net interest income excluding valuations, and on a tax-equivalent basis. Management believes that it is a standard practice in the banking industry to present net interest income, interest rate spread, and net interest margin on a fully tax-equivalent basis. This adjustment puts all earning assets, most notably tax-exempt securities and tax-exempt loans, on a common basis that management believes facilitates comparison of results to the results of peers.
NET INCOME AND RECONCILIATION TO ADJUSTED NET INCOME (NON-GAAP)
The following table reconciles, for the second and first quarters of 2024, second quarter of 2023, and six-month periods ended
Quarter Ended | Six-Month Period Ended | ||||||||||||||||||
|
|
|
|
|
|||||||||||||||
(In thousands, except per share information) | |||||||||||||||||||
Net income, as reported (GAAP) | $ |
75,838 |
|
$ |
73,458 |
|
$ |
70,655 |
|
$ |
149,296 |
|
$ |
141,353 |
|
||||
Adjustments: | |||||||||||||||||||
|
152 |
|
947 |
|
- |
|
1,099 |
|
- |
|
|||||||||
Gain recognized from legal settlement |
- |
|
- |
|
(3,600 |
) |
- |
|
(3,600 |
) |
|||||||||
Gain on early extinguishment of debt |
- |
|
- |
|
(1,605 |
) |
- |
|
(1,605 |
) |
|||||||||
Income tax impact of adjustments (1) |
(57 |
) |
(355 |
) |
1,350 |
|
(412 |
) |
1,350 |
|
|||||||||
Adjusted net income attributable to common stockholders (non-GAAP) | $ |
75,933 |
|
$ |
74,050 |
|
$ |
66,800 |
|
$ |
149,983 |
|
$ |
137,498 |
|
||||
Weighted-average diluted shares outstanding |
165,543 |
|
167,798 |
|
179,277 |
|
166,670 |
|
180,253 |
|
|||||||||
Earnings Per Share - diluted (GAAP) | $ |
0.46 |
|
$ |
0.44 |
|
$ |
0.39 |
|
$ |
0.90 |
|
$ |
0.78 |
|
||||
Adjusted Earnings Per Share - diluted (non-GAAP) | $ |
0.46 |
|
$ |
0.44 |
|
$ |
0.37 |
|
$ |
0.90 |
|
$ |
0.76 |
|
(1) |
See Non-GAAP Disclosures - Special Items above for discussion of the individual tax impact related to the above adjustments. |
INCOME BEFORE INCOME TAXES AND RECONCILIATION TO ADJUSTED PRE-TAX, PRE-PROVISION INCOME (NON-GAAP)
The following table reconciles income before income taxes to adjusted pre-tax, pre-provision income for the last five quarters and for the six-month periods ended
Quarter Ended | Six-Month Period Ended | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Income before income taxes | $ |
101,379 |
|
$ |
97,413 |
|
$ |
84,874 |
|
$ |
108,990 |
|
$ |
100,939 |
|
$ |
198,792 |
|
$ |
203,572 |
|
||||||
Add: Provision for credit losses expense |
11,605 |
|
12,167 |
|
18,812 |
|
4,396 |
|
22,230 |
|
23,772 |
|
37,732 |
|
|||||||||||||
Add: |
152 |
|
947 |
|
6,311 |
|
- |
|
- |
|
1,099 |
|
- |
|
|||||||||||||
Less: Gain recognized from legal settlement |
- |
|
- |
|
- |
|
- |
|
(3,600 |
) |
- |
|
(3,600 |
) |
|||||||||||||
Less: Gain on early extinguishment of debt |
- |
|
- |
|
- |
|
- |
|
(1,605 |
) |
- |
|
(1,605 |
) |
|||||||||||||
Adjusted pre-tax, pre-provision income (1) | $ |
113,136 |
|
$ |
110,527 |
|
$ |
109,997 |
|
$ |
113,386 |
|
$ |
117,964 |
|
$ |
223,663 |
|
$ |
236,099 |
|
||||||
Change from most recent prior period (amount) | $ |
2,609 |
|
$ |
530 |
|
$ |
(3,389 |
) |
$ |
(4,578 |
) |
$ |
(171 |
) |
$ |
(12,436 |
) |
$ |
5,475 |
|
||||||
Change from most recent prior period (percentage) |
2.4 |
% |
0.5 |
% |
-3.0 |
% |
-3.9 |
% |
-0.1 |
% |
-5.3 |
% |
2.4 |
% |
____________________________________________ | |||||||||||||||
(1) |
Non-GAAP financial measure. See Non-GAAP Disclosures above for the definition and additional information about this non-GAAP financial measure. |
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,” “will,” “plans,” “forecast,” “believe,” and similar expressions are meant to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by such sections. The Corporation cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof, and advises readers that any such forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions by us that are difficult to predict. Various factors, some of which are beyond our control, including, but not limited to, the uncertainties more fully discussed in Part I, Item 1A, “Risk Factors” of the Corporation’s Annual Report on Form 10-K for the year ended
About First BanCorp.
First BanCorp. is the parent corporation of
EXHIBIT A
Table 1 – Condensed Consolidated Statements of Financial Condition
As of | |||||||||||
|
|
|
|||||||||
(In thousands, except for share information) | |||||||||||
ASSETS | |||||||||||
Cash and due from banks |
$ |
581,843 |
|
|
$ |
680,734 |
|
|
$ |
661,925 |
|
Money market investments: |
|
|
|
|
|
|
|
|
|||
Time deposits with other financial institutions |
|
500 |
|
|
|
300 |
|
|
|
300 |
|
Other short-term investments |
|
3,939 |
|
|
|
3,485 |
|
|
|
939 |
|
Total money market investments |
|
4,439 |
|
|
|
3,785 |
|
|
|
1,239 |
|
Debt securities available for sale, at fair value (ACL of |
|
4,957,311 |
|
|
|
5,047,179 |
|
|
|
5,229,984 |
|
Debt securities held to maturity, at amortized cost, net of ACL of |
|
343,168 |
|
|
|
348,095 |
|
|
|
351,981 |
|
Total debt securities |
|
5,300,479 |
|
|
|
5,395,274 |
|
|
|
5,581,965 |
|
Equity securities |
|
51,037 |
|
|
|
51,390 |
|
|
|
49,675 |
|
Total investment securities |
|
5,351,516 |
|
|
|
5,446,664 |
|
|
|
5,631,640 |
|
Loans, net of ACL of |
|
12,130,976 |
|
|
|
12,047,856 |
|
|
|
11,923,640 |
|
Loans held for sale, at lower of cost or market |
|
10,392 |
|
|
|
12,080 |
|
|
|
7,368 |
|
Total loans, net |
|
12,141,368 |
|
|
|
12,059,936 |
|
|
|
11,931,008 |
|
Accrued interest receivable on loans and investments |
|
77,895 |
|
|
|
73,154 |
|
|
|
77,716 |
|
Premises and equipment, net |
|
138,554 |
|
|
|
141,471 |
|
|
|
142,016 |
|
OREO |
|
21,682 |
|
|
|
28,864 |
|
|
|
32,669 |
|
Deferred tax asset, net |
|
142,725 |
|
|
|
147,743 |
|
|
|
150,127 |
|
|
|
38,611 |
|
|
|
38,611 |
|
|
|
38,611 |
|
Other intangible assets |
|
9,700 |
|
|
|
11,542 |
|
|
|
13,383 |
|
Other assets |
|
373,041 |
|
|
|
258,457 |
|
|
|
229,215 |
|
Total assets |
$ |
18,881,374 |
|
|
$ |
18,890,961 |
|
|
$ |
18,909,549 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|||
Deposits: |
|
|
|
|
|
|
|
|
|||
Non-interest-bearing deposits |
$ |
5,406,054 |
|
|
$ |
5,346,326 |
|
|
$ |
5,404,121 |
|
Interest-bearing deposits |
|
11,122,902 |
|
|
|
11,199,185 |
|
|
|
11,151,864 |
|
Total deposits |
|
16,528,956 |
|
|
|
16,545,511 |
|
|
|
16,555,985 |
|
Advances from the FHLB |
|
500,000 |
|
|
|
500,000 |
|
|
|
500,000 |
|
Other borrowings |
|
161,700 |
|
|
|
161,700 |
|
|
|
161,700 |
|
Accounts payable and other liabilities |
|
199,258 |
|
|
|
204,033 |
|
|
|
194,255 |
|
Total liabilities |
|
17,389,914 |
|
|
|
17,411,244 |
|
|
|
17,411,940 |
|
STOCKHOLDERSʼ EQUITY |
|
|
|
|
|
|
|
|
|||
Common stock, |
|
22,366 |
|
|
|
22,366 |
|
|
|
22,366 |
|
Additional paid-in capital |
|
961,254 |
|
|
|
959,319 |
|
|
|
965,707 |
|
Retained earnings |
|
1,941,980 |
|
|
|
1,892,714 |
|
|
|
1,846,112 |
|
|
|
(790,465 |
) |
|
|
(740,447 |
) |
|
|
(697,406 |
) |
Accumulated other comprehensive loss |
|
(643,675 |
) |
|
|
(654,235 |
) |
|
|
(639,170 |
) |
Total stockholdersʼ equity |
|
1,491,460 |
|
|
|
1,479,717 |
|
|
|
1,497,609 |
|
Total liabilities and stockholdersʼ equity |
$ |
18,881,374 |
|
|
$ |
18,890,961 |
|
|
$ |
18,909,549 |
|
Table 2 – Condensed Consolidated Statements of Income
Quarter Ended | Six-Month Period Ended | ||||||||||||||||||
|
|
|
|
|
|||||||||||||||
(In thousands, except per share information) | |||||||||||||||||||
Net interest income: | |||||||||||||||||||
Interest income |
$ |
272,245 |
|
|
$ |
268,505 |
|
|
$ |
252,204 |
|
|
$ |
540,750 |
|
|
$ |
494,600 |
|
Interest expense |
|
72,617 |
|
|
|
71,985 |
|
|
|
52,389 |
|
|
|
144,602 |
|
|
|
93,900 |
|
Net interest income |
|
199,628 |
|
|
|
196,520 |
|
|
|
199,815 |
|
|
|
396,148 |
|
|
|
400,700 |
|
Provision for credit losses - expense (benefit): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans |
|
11,930 |
|
|
|
12,917 |
|
|
|
20,770 |
|
|
|
24,847 |
|
|
|
37,026 |
|
Unfunded loan commitments |
|
(417 |
) |
|
|
281 |
|
|
|
721 |
|
|
|
(136 |
) |
|
|
616 |
|
Debt securities |
|
92 |
|
|
|
(1,031 |
) |
|
|
739 |
|
|
|
(939 |
) |
|
|
90 |
|
Provision for credit losses - expense |
11,605 |
|
|
12,167 |
|
|
22,230 |
|
|
23,772 |
|
|
37,732 |
|
|||||
Net interest income after provision for credit losses |
188,023 |
|
|
184,353 |
|
|
177,585 |
|
|
372,376 |
|
|
362,968 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service charges and fees on deposit accounts |
|
9,725 |
|
|
|
9,662 |
|
|
|
9,287 |
|
|
|
19,387 |
|
|
|
18,828 |
|
Mortgage banking activities |
|
3,419 |
|
|
|
2,882 |
|
|
|
2,860 |
|
|
|
6,301 |
|
|
|
5,672 |
|
Gain on early extinguishment of debt |
|
- |
|
|
|
- |
|
|
|
1,605 |
|
|
|
- |
|
|
|
1,605 |
|
Card and processing income |
|
11,523 |
|
|
|
11,312 |
|
|
|
11,135 |
|
|
|
22,835 |
|
|
|
22,053 |
|
Other non-interest income |
|
7,371 |
|
|
|
10,127 |
|
|
|
11,384 |
|
|
|
17,498 |
|
|
|
20,631 |
|
Total non-interest income |
32,038 |
|
|
33,983 |
|
|
36,271 |
|
|
66,021 |
|
|
68,789 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Non-interest expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Employees’ compensation and benefits |
|
57,456 |
|
|
|
59,506 |
|
|
|
54,314 |
|
|
|
116,962 |
|
|
|
110,736 |
|
Occupancy and equipment |
|
21,851 |
|
|
|
21,381 |
|
|
|
21,097 |
|
|
|
43,232 |
|
|
|
42,283 |
|
Business promotion |
|
4,359 |
|
|
|
3,842 |
|
|
|
4,167 |
|
|
|
8,201 |
|
|
|
8,142 |
|
Professional service fees |
|
12,431 |
|
|
|
12,676 |
|
|
|
11,596 |
|
|
|
25,107 |
|
|
|
23,569 |
|
Taxes, other than income taxes |
|
5,408 |
|
|
|
5,129 |
|
|
|
5,124 |
|
|
|
10,537 |
|
|
|
10,236 |
|
|
|
2,316 |
|
|
|
3,102 |
|
|
|
2,143 |
|
|
|
5,418 |
|
|
|
4,276 |
|
Net gain on OREO operations |
|
(3,609 |
) |
|
|
(1,452 |
) |
|
|
(1,984 |
) |
|
|
(5,061 |
) |
|
|
(3,980 |
) |
Credit and debit card processing expenses |
|
7,607 |
|
|
|
5,751 |
|
|
|
6,540 |
|
|
|
13,358 |
|
|
|
11,858 |
|
Other non-interest expenses |
|
10,863 |
|
|
|
10,988 |
|
|
|
9,920 |
|
|
|
21,851 |
|
|
|
21,065 |
|
Total non-interest expenses |
118,682 |
|
|
120,923 |
|
|
112,917 |
|
|
239,605 |
|
|
228,185 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income before income taxes |
|
101,379 |
|
|
|
97,413 |
|
|
|
100,939 |
|
|
|
198,792 |
|
|
|
203,572 |
|
Income tax expense |
|
25,541 |
|
|
|
23,955 |
|
|
|
30,284 |
|
|
|
49,496 |
|
|
|
62,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income |
$ |
75,838 |
|
|
$ |
73,458 |
|
|
$ |
70,655 |
|
|
$ |
149,296 |
|
|
$ |
141,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income attributable to common stockholders |
$ |
75,838 |
|
|
$ |
73,458 |
|
|
$ |
70,655 |
|
|
$ |
149,296 |
|
|
$ |
141,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
$ |
0.46 |
|
|
$ |
0.44 |
|
|
$ |
0.39 |
|
|
$ |
0.90 |
|
|
$ |
0.79 |
|
Diluted |
$ |
0.46 |
|
|
$ |
0.44 |
|
|
$ |
0.39 |
|
|
$ |
0.90 |
|
|
$ |
0.78 |
|
Table 3 – Selected Financial Data
Quarter Ended | Six-Month Period Ended | |||||||||||||
|
|
|
|
|
||||||||||
(Shares in thousands) | ||||||||||||||
Per Common Share Results: | ||||||||||||||
Net earnings per share - basic |
$ |
0.46 |
|
$ |
0.44 |
|
$ |
0.39 |
|
$ |
0.90 |
|
$ |
0.79 |
Net earnings per share - diluted |
$ |
0.46 |
|
$ |
0.44 |
|
$ |
0.39 |
|
$ |
0.90 |
|
$ |
0.78 |
Cash dividends declared |
$ |
0.16 |
|
$ |
0.16 |
|
$ |
0.14 |
|
$ |
0.32 |
|
$ |
0.28 |
Average shares outstanding |
|
164,945 |
|
|
167,142 |
|
|
178,926 |
|
|
166,043 |
|
|
179,567 |
Average shares outstanding diluted |
|
165,543 |
|
|
167,798 |
|
|
179,277 |
|
|
166,670 |
|
|
180,253 |
Book value per common share |
$ |
9.10 |
|
$ |
8.88 |
|
$ |
7.78 |
|
$ |
9.10 |
|
$ |
7.78 |
Tangible book value per common share (1) |
$ |
8.81 |
|
$ |
8.58 |
|
$ |
7.47 |
|
$ |
8.81 |
|
$ |
7.47 |
Common stock price: end of period |
$ |
18.29 |
|
$ |
17.54 |
|
$ |
12.22 |
|
$ |
18.29 |
|
$ |
12.22 |
Selected Financial Ratios (In Percent): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profitability: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
1.61 |
|
|
1.56 |
|
|
1.51 |
|
|
1.59 |
|
|
1.53 |
Return on average equity |
|
20.80 |
|
|
19.56 |
|
|
19.66 |
|
|
20.17 |
|
|
20.31 |
Interest rate spread (2) |
|
3.41 |
|
|
3.35 |
|
|
3.58 |
|
|
3.38 |
|
|
3.71 |
Net interest margin (2) |
|
4.32 |
|
|
4.27 |
|
|
4.35 |
|
|
4.29 |
|
|
4.42 |
Efficiency ratio (3) |
|
51.23 |
|
|
52.46 |
|
|
47.83 |
|
|
51.84 |
|
|
48.60 |
Capital and Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total equity to average total assets |
|
7.74 |
|
|
7.99 |
|
|
7.67 |
|
|
7.87 |
|
|
7.52 |
Total capital |
|
18.21 |
|
|
18.36 |
|
|
19.15 |
|
|
18.21 |
|
|
19.15 |
Common equity Tier 1 capital |
|
15.77 |
|
|
15.90 |
|
|
16.64 |
|
|
15.77 |
|
|
16.64 |
Tier 1 capital |
|
15.77 |
|
|
15.90 |
|
|
16.64 |
|
|
15.77 |
|
|
16.64 |
Leverage |
|
10.63 |
|
|
10.65 |
|
|
10.73 |
|
|
10.63 |
|
|
10.73 |
Tangible common equity ratio (1) |
|
7.66 |
|
|
7.59 |
|
|
7.03 |
|
|
7.66 |
|
|
7.03 |
Dividend payout ratio |
|
34.80 |
|
|
36.41 |
|
|
35.45 |
|
|
35.59 |
|
|
35.57 |
Basic liquidity ratio (4) |
|
18.50 |
|
|
19.60 |
|
|
21.82 |
|
|
18.50 |
|
|
21.82 |
Core liquidity ratio (5) |
|
13.37 |
|
|
14.45 |
|
|
16.70 |
|
|
13.37 |
|
|
16.70 |
Loan to deposit ratio |
|
75.00 |
|
|
74.48 |
|
|
69.76 |
|
|
75.00 |
|
|
69.76 |
Uninsured deposits, excluding fully collateralized deposits, to total deposits (6) |
|
28.46 |
|
|
27.93 |
|
|
27.12 |
|
|
28.46 |
|
|
27.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses for loans and finance leases to total loans held for investment |
|
2.06 |
|
|
2.14 |
|
|
2.28 |
|
|
2.06 |
|
|
2.28 |
Net charge-offs (annualized) to average loans outstanding |
|
0.69 |
|
|
0.37 |
|
|
0.67 |
|
|
0.53 |
|
|
0.56 |
Provision for credit losses for loans and finance leases to net charge-offs |
|
56.84 |
|
|
115.66 |
|
|
107.73 |
|
|
77.27 |
|
|
113.76 |
Non-performing assets to total assets |
|
0.67 |
|
|
0.69 |
|
|
0.63 |
|
|
0.67 |
|
|
0.63 |
Nonaccrual loans held for investment to total loans held for investment |
|
0.78 |
|
|
0.76 |
|
|
0.70 |
|
|
0.78 |
|
|
0.70 |
Allowance for credit losses for loans and finance leases to total nonaccrual loans held for investment |
|
264.66 |
|
|
283.54 |
|
|
325.60 |
|
|
264.66 |
|
|
325.60 |
Allowance for credit losses for loans and finance leases to total nonaccrual loans held for investment, excluding residential estate loans |
|
392.94 |
|
|
437.28 |
|
|
547.60 |
|
|
392.94 |
|
|
547.60 |
_________________________________________________________________ | |||||||||||||||||
(1) |
Non-GAAP financial measures. Refer to Non-GAAP Disclosures and Statement of Financial Condition - Tangible Common Equity (Non-GAAP) above for additional information about the components and a reconciliation of these measures. | ||||||||||||||||
(2) |
Non-GAAP financial measures reported on a tax-equivalent basis and excluding changes in the fair value of derivative instruments. Refer to Non-GAAP Disclosures and Table 4 below for additional information and a reconciliation of these measures. | ||||||||||||||||
(3) |
Non-interest expenses to the sum of net interest income and non-interest income. | ||||||||||||||||
(4) |
Defined as the sum of cash and cash equivalents, free high quality liquid assets that could be liquidated within one day, and available secured lines of credit with the FHLB to total assets. | ||||||||||||||||
(5) |
Defined as the sum of cash and cash equivalents and free high quality liquid assets that could be liquidated within one day to total assets. | ||||||||||||||||
(6) |
Exclude insured deposits not covered by federal deposit insurance. |
Table 4 – Reconciliation of Net Interest Income to Net Interest Income Excluding Valuations and on a Tax-Equivalent Basis
The following table reconciles net interest income in accordance with GAAP to net interest income excluding valuations, and net interest income on a tax-equivalent basis for the second and first quarters of 2024, the second quarter of 2023, and the six-month periods ended
Quarter Ended | Six-Month Period Ended | ||||||||||||||||||
(Dollars in thousands) |
|
|
|
|
|
||||||||||||||
Net Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income - GAAP |
$ |
272,245 |
|
|
$ |
268,505 |
|
|
$ |
252,204 |
|
|
$ |
540,750 |
|
|
$ |
494,600 |
|
Unrealized (gain) loss on derivative instruments |
|
- |
|
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(2 |
) |
|
|
3 |
|
Interest income excluding valuations - non-GAAP |
|
272,245 |
|
|
|
268,503 |
|
|
|
252,201 |
|
|
|
540,748 |
|
|
|
494,603 |
|
Tax-equivalent adjustment |
|
4,866 |
|
|
|
4,813 |
|
|
|
5,540 |
|
|
|
9,679 |
|
|
|
11,887 |
|
Interest income on a tax-equivalent basis and excluding valuations - non-GAAP |
$ |
277,111 |
|
|
$ |
273,316 |
|
|
$ |
257,741 |
|
|
$ |
550,427 |
|
|
$ |
506,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense - GAAP |
$ |
72,617 |
|
|
$ |
71,985 |
|
|
$ |
52,389 |
|
|
$ |
144,602 |
|
|
$ |
93,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net interest income - GAAP |
$ |
199,628 |
|
|
$ |
196,520 |
|
|
$ |
199,815 |
|
|
$ |
396,148 |
|
|
$ |
400,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net interest income excluding valuations - non-GAAP |
$ |
199,628 |
|
|
$ |
196,518 |
|
|
$ |
199,812 |
|
|
$ |
396,146 |
|
|
$ |
400,703 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net interest income on a tax-equivalent basis and excluding valuations - non-GAAP |
$ |
204,494 |
|
|
$ |
201,331 |
|
|
$ |
205,352 |
|
|
$ |
405,825 |
|
|
$ |
412,590 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans and leases |
$ |
12,272,816 |
|
|
$ |
12,207,840 |
|
|
$ |
11,591,516 |
|
|
$ |
12,240,328 |
|
|
$ |
11,555,659 |
|
Total securities, other short-term investments and interest-bearing cash balances |
|
6,698,609 |
|
|
|
6,720,395 |
|
|
|
7,333,989 |
|
|
|
6,709,502 |
|
|
|
7,283,450 |
|
Average Interest-Earning Assets |
$ |
18,971,425 |
|
|
$ |
18,928,235 |
|
|
$ |
18,925,505 |
|
|
$ |
18,949,830 |
|
|
$ |
18,839,109 |
|
Average Interest-Bearing Liabilities |
$ |
11,868,658 |
|
|
$ |
11,838,159 |
|
|
$ |
11,176,385 |
|
|
$ |
11,853,409 |
|
|
$ |
11,067,741 |
|
Average Assets (1) |
$ |
18,884,431 |
|
|
$ |
18,858,299 |
|
|
$ |
18,788,578 |
|
|
$ |
18,871,365 |
|
|
$ |
18,673,506 |
|
Average Non-Interest-Bearing Deposits |
$ |
5,351,308 |
|
|
$ |
5,308,531 |
|
|
$ |
5,968,892 |
|
|
$ |
5,329,920 |
|
|
$ |
5,983,896 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average Yield/Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average yield on interest-earning assets - GAAP |
|
5.76 |
% |
|
|
5.69 |
% |
|
|
5.35 |
% |
|
|
5.72 |
% |
|
|
5.29 |
% |
Average rate on interest-bearing liabilities - GAAP |
|
2.45 |
% |
|
|
2.44 |
% |
|
|
1.88 |
% |
|
|
2.45 |
% |
|
|
1.71 |
% |
Net interest spread - GAAP |
|
3.31 |
% |
|
|
3.25 |
% |
|
|
3.47 |
% |
|
|
3.27 |
% |
|
|
3.58 |
% |
Net interest margin - GAAP |
|
4.22 |
% |
|
|
4.16 |
% |
|
|
4.23 |
% |
|
|
4.19 |
% |
|
|
4.29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average yield on interest-earning assets excluding valuations - non-GAAP |
|
5.76 |
% |
|
|
5.69 |
% |
|
|
5.35 |
% |
|
|
5.72 |
% |
|
|
5.29 |
% |
Average rate on interest-bearing liabilities |
|
2.45 |
% |
|
|
2.44 |
% |
|
|
1.88 |
% |
|
|
2.45 |
% |
|
|
1.71 |
% |
Net interest spread excluding valuations - non-GAAP |
|
3.31 |
% |
|
|
3.25 |
% |
|
|
3.47 |
% |
|
|
3.27 |
% |
|
|
3.58 |
% |
Net interest margin excluding valuations - non-GAAP |
|
4.22 |
% |
|
|
4.16 |
% |
|
|
4.23 |
% |
|
|
4.19 |
% |
|
|
4.29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations - non-GAAP |
|
5.86 |
% |
|
|
5.79 |
% |
|
|
5.46 |
% |
|
|
5.83 |
% |
|
|
5.42 |
% |
Average rate on interest-bearing liabilities |
|
2.45 |
% |
|
|
2.44 |
% |
|
|
1.88 |
% |
|
|
2.45 |
% |
|
|
1.71 |
% |
Net interest spread on a tax-equivalent basis and excluding valuations - non-GAAP |
|
3.41 |
% |
|
|
3.35 |
% |
|
|
3.58 |
% |
|
|
3.38 |
% |
|
|
3.71 |
% |
Net interest margin on a tax-equivalent basis and excluding valuations - non-GAAP |
|
4.32 |
% |
|
|
4.27 |
% |
|
|
4.35 |
% |
|
|
4.29 |
% |
|
|
4.42 |
% |
__________________________________________________________ | |
(1) |
Includes, among other things, the ACL on loans and finance leases and debt securities, as well as unrealized gains and losses on available-for-sale debt securities. |
Table 5 – Quarterly Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis)
Average Volume |
|
Interest Income (1) / Expense |
|
Average Rate (1) |
|||||||||||||||||||||
Quarter Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
|
2024 |
|
|
2023 |
|||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||
Money market and other short-term investments | $ |
667,564 |
$ |
533,747 |
$ |
617,356 |
$ |
9,060 |
$ |
7,254 |
$ |
7,880 |
5.44 |
% |
5.45 |
% |
5.12% |
||||||||
Government obligations (2) |
2,619,778 |
2,684,169 |
2,909,204 |
8,947 |
9,053 |
10,973 |
1.37 |
% |
1.35 |
% |
1.51% |
||||||||||||||
MBS |
3,359,598 |
3,451,293 |
3,757,425 |
14,339 |
15,238 |
17,087 |
1.71 |
% |
1.77 |
% |
1.82% |
||||||||||||||
FHLB stock |
34,032 |
34,635 |
36,265 |
818 |
854 |
780 |
9.64 |
% |
9.89 |
% |
8.63% |
||||||||||||||
Other investments |
17,637 |
16,551 |
13,739 |
244 |
66 |
58 |
5.55 |
% |
1.60 |
% |
1.69% |
||||||||||||||
Total investments (3) |
6,698,609 |
6,720,395 |
7,333,989 |
33,408 |
32,465 |
36,778 |
2.00 |
% |
1.94 |
% |
2.01% |
||||||||||||||
Residential mortgage loans |
2,807,639 |
2,810,304 |
2,808,465 |
40,686 |
40,473 |
39,864 |
5.81 |
% |
5.78 |
% |
5.69% |
||||||||||||||
Construction loans |
245,219 |
218,854 |
149,783 |
4,955 |
4,537 |
2,903 |
8.10 |
% |
8.32 |
% |
7.77% |
||||||||||||||
C&I and commercial mortgage loans |
5,528,607 |
5,504,782 |
5,191,040 |
100,919 |
99,074 |
89,290 |
7.32 |
% |
7.22 |
% |
6.90% |
||||||||||||||
Finance leases |
873,908 |
863,685 |
769,316 |
17,255 |
17,127 |
14,714 |
7.92 |
% |
7.95 |
% |
7.67% |
||||||||||||||
Consumer loans |
2,817,443 |
2,810,215 |
2,672,912 |
79,888 |
79,640 |
74,192 |
11.37 |
% |
11.37 |
% |
11.13% |
||||||||||||||
Total loans (4) (5) |
12,272,816 |
12,207,840 |
11,591,516 |
243,703 |
240,851 |
220,963 |
7.96 |
% |
7.91 |
% |
7.65% |
||||||||||||||
Total interest-earning assets | $ |
18,971,425 |
$ |
18,928,235 |
$ |
18,925,505 |
$ |
277,111 |
$ |
273,316 |
$ |
257,741 |
5.86 |
% |
5.79 |
% |
5.46% |
||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||
Time deposits | $ |
3,002,159 |
$ |
2,892,355 |
$ |
2,511,504 |
$ |
26,588 |
$ |
24,410 |
$ |
15,667 |
3.55 |
% |
3.39 |
% |
2.50% |
||||||||
Brokered CDs |
676,421 |
749,760 |
333,557 |
8,590 |
9,680 |
3,761 |
5.09 |
% |
5.18 |
% |
4.52% |
||||||||||||||
Other interest-bearing deposits |
7,528,378 |
7,534,344 |
7,517,995 |
28,493 |
28,935 |
22,176 |
1.52 |
% |
1.54 |
% |
1.18% |
||||||||||||||
Securities sold under agreements to repurchase |
- |
- |
101,397 |
- |
- |
1,328 |
0.00 |
% |
0.00 |
% |
5.25% |
||||||||||||||
Advances from the FHLB |
500,000 |
500,000 |
534,231 |
5,610 |
5,610 |
6,048 |
4.50 |
% |
4.50 |
% |
4.54% |
||||||||||||||
Other borrowings |
161,700 |
161,700 |
177,701 |
3,336 |
3,350 |
3,409 |
8.27 |
% |
8.31 |
% |
7.69% |
||||||||||||||
Total interest-bearing liabilities | $ |
11,868,658 |
$ |
11,838,159 |
$ |
11,176,385 |
$ |
72,617 |
$ |
71,985 |
$ |
52,389 |
2.45 |
% |
2.44 |
% |
1.88% |
||||||||
Net interest income | $ |
204,494 |
$ |
201,331 |
$ |
205,352 |
|||||||||||||||||||
Interest rate spread |
3.41 |
% |
3.35 |
% |
3.58% |
||||||||||||||||||||
Net interest margin |
4.32 |
% |
4.27 |
% |
4.35% |
________________________________ | ||||||||||||||||||||||||
(1) |
Non-GAAP financial measures reported 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 debt 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 6 – Year-to-Date Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis)
Average Volume | Interest Income (1) / Expense |
Average Rate (1) |
|||||||||||||||
Six-Month Period Ended |
|
|
|
|
|
|
|||||||||||
(Dollars in thousands) |
|
|
|||||||||||||||
Interest-earning assets: |
|
|
|||||||||||||||
Money market and other short-term investments |
$ |
600,655 |
|
$ |
511,392 |
|
$ |
16,314 |
|
$ |
12,530 |
|
5.45 |
% |
|
4.94 |
% |
Government obligations (2) |
|
2,651,974 |
|
|
2,909,587 |
|
|
18,000 |
|
|
21,738 |
|
1.36 |
% |
|
1.51 |
% |
MBS |
|
3,405,445 |
|
|
3,810,491 |
|
|
29,577 |
|
|
36,483 |
|
1.74 |
% |
|
1.93 |
% |
FHLB stock |
|
34,334 |
|
|
38,539 |
|
|
1,672 |
|
|
1,201 |
|
9.77 |
% |
|
6.28 |
% |
Other investments |
|
17,094 |
|
|
13,441 |
|
|
310 |
|
|
197 |
|
3.64 |
% |
|
2.96 |
% |
Total investments (3) |
|
6,709,502 |
|
|
7,283,450 |
|
|
65,873 |
|
|
72,149 |
|
1.97 |
% |
|
2.00 |
% |
Residential mortgage loans |
|
2,808,972 |
|
|
2,821,779 |
|
|
81,159 |
|
|
79,658 |
|
5.79 |
% |
|
5.69 |
% |
Construction loans |
|
232,036 |
|
|
147,923 |
|
|
9,492 |
|
|
5,579 |
|
8.20 |
% |
|
7.61 |
% |
C&I and commercial mortgage loans |
|
5,516,695 |
|
|
5,179,448 |
|
|
199,993 |
|
|
175,175 |
|
7.27 |
% |
|
6.82 |
% |
Finance leases |
|
868,796 |
|
|
752,501 |
|
|
34,382 |
|
|
28,523 |
|
7.94 |
% |
|
7.64 |
% |
Consumer loans |
|
2,813,829 |
|
|
2,654,008 |
|
|
159,528 |
|
|
145,406 |
|
11.37 |
% |
|
11.05 |
% |
Total loans (4) (5) |
|
12,240,328 |
|
|
11,555,659 |
|
|
484,554 |
|
|
434,341 |
|
7.94 |
% |
|
7.58 |
% |
Total interest-earning assets |
$ |
18,949,830 |
|
$ |
18,839,109 |
|
$ |
550,427 |
|
$ |
506,490 |
|
5.83 |
% |
|
5.42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Time deposits |
$ |
2,947,257 |
|
$ |
2,427,399 |
|
$ |
50,998 |
|
$ |
26,449 |
|
3.47 |
% |
|
2.20 |
% |
Brokered CDs |
|
713,091 |
|
|
250,588 |
|
|
18,270 |
|
|
5,348 |
|
5.14 |
% |
|
4.30 |
% |
Other interest-bearing deposits |
|
7,531,361 |
|
|
7,531,374 |
|
|
57,428 |
|
|
39,692 |
|
1.53 |
% |
|
1.06 |
% |
Securities sold under agreements to repurchase |
|
- |
|
|
96,229 |
|
|
- |
|
|
2,397 |
|
0.00 |
% |
|
5.02 |
% |
Advances from the FHLB |
|
500,000 |
|
|
581,436 |
|
|
11,220 |
|
|
13,224 |
|
4.50 |
% |
|
4.59 |
% |
Other borrowings |
|
161,700 |
|
|
180,715 |
|
|
6,686 |
|
|
6,790 |
|
8.29 |
% |
|
7.58 |
% |
Total interest-bearing liabilities |
$ |
11,853,409 |
|
$ |
11,067,741 |
|
$ |
144,602 |
|
$ |
93,900 |
|
2.45 |
% |
|
1.71 |
% |
Net interest income |
|
|
|
|
|
|
$ |
405,825 |
|
$ |
412,590 |
|
|
|
|
||
Interest rate spread |
|
|
|
|
|
|
|
|
|
|
|
|
3.38 |
% |
|
3.71 |
% |
Net interest margin |
|
|
|
|
|
|
|
|
|
|
|
|
4.29 |
% |
|
4.42 |
% |
______________________________________________________ | ||||||||||||||||
(1) |
Non-GAAP financial measures reported 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 debt securities are excluded from the average volumes. | |||||||||||||||
(4) |
Average loan balances include the average of non-performing loans. | |||||||||||||||
(5) |
Interest income on loans includes $6.3 million and $6.0 million for the six-month periods ended June 30, 2024 and 2023, respectively, of income from prepayment penalties and late fees related to the Corporation's loan portfolio. |
Table 7 – Loan Portfolio by Geography
As of June 30, 2024 | |||||||||||
|
|
|
Consolidated | ||||||||
(In thousands) | |||||||||||
Residential mortgage loans | $ |
2,163,245 |
$ |
161,057 |
$ |
485,364 |
$ |
2,809,666 |
|||
Commercial loans: | |||||||||||
Construction loans |
160,093 |
3,681 |
22,183 |
185,957 |
|||||||
Commercial mortgage loans |
1,697,939 |
62,821 |
662,549 |
2,423,309 |
|||||||
Commercial and Industrial loans |
2,176,489 |
135,456 |
942,632 |
3,254,577 |
|||||||
Commercial loans |
4,034,521 |
201,958 |
1,627,364 |
5,863,843 |
|||||||
Finance leases |
880,312 |
- |
- |
880,312 |
|||||||
Consumer loans |
2,755,077 |
68,540 |
8,070 |
2,831,687 |
|||||||
Loans held for investment |
9,833,155 |
431,555 |
2,120,798 |
12,385,508 |
|||||||
Loans held for sale |
10,392 |
- |
- |
10,392 |
|||||||
Total loans | $ |
9,843,547 |
$ |
431,555 |
$ |
2,120,798 |
$ |
12,395,900 |
|||
As of March 31, 2024 | |||||||||||
|
|
|
Consolidated | ||||||||
(In thousands) | |||||||||||
Residential mortgage loans | $ |
2,164,347 |
$ |
162,893 |
$ |
474,347 |
$ |
2,801,587 |
|||
Commercial loans: | |||||||||||
Construction loans |
144,094 |
3,530 |
89,664 |
237,288 |
|||||||
Commercial mortgage loans |
1,705,745 |
63,502 |
592,484 |
2,361,731 |
|||||||
Commercial and Industrial loans |
2,163,439 |
126,560 |
940,996 |
3,230,995 |
|||||||
Commercial loans |
4,013,278 |
193,592 |
1,623,144 |
5,830,014 |
|||||||
Finance leases |
871,927 |
- |
- |
871,927 |
|||||||
Consumer loans |
2,734,347 |
67,946 |
5,627 |
2,807,920 |
|||||||
Loans held for investment |
9,783,899 |
424,431 |
2,103,118 |
12,311,448 |
|||||||
Loans held for sale |
12,080 |
- |
- |
12,080 |
|||||||
Total loans | $ |
9,795,979 |
$ |
424,431 |
$ |
2,103,118 |
$ |
12,323,528 |
|||
As of December 31, 2023 | |||||||||||
|
|
|
Consolidated | ||||||||
(In thousands) | |||||||||||
Residential mortgage loans | $ |
2,187,875 |
$ |
168,131 |
$ |
465,720 |
$ |
2,821,726 |
|||
Commercial loans: | |||||||||||
Construction loans |
111,664 |
3,737 |
99,376 |
214,777 |
|||||||
Commercial mortgage loans |
1,725,325 |
65,312 |
526,446 |
2,317,083 |
|||||||
Commercial and Industrial loans |
2,130,368 |
119,040 |
924,824 |
3,174,232 |
|||||||
Commercial loans |
3,967,357 |
188,089 |
1,550,646 |
5,706,092 |
|||||||
Finance leases |
856,815 |
- |
- |
856,815 |
|||||||
Consumer loans |
2,726,457 |
68,498 |
5,895 |
2,800,850 |
|||||||
Loans held for investment |
9,738,504 |
424,718 |
2,022,261 |
12,185,483 |
|||||||
Loans held for sale |
7,368 |
- |
- |
7,368 |
|||||||
Total loans | $ |
9,745,872 |
$ |
424,718 |
$ |
2,022,261 |
$ |
12,192,851 |
Table 8 – Non-Performing Assets by Geography
As of June 30, 2024 |
|||||||||||
(In thousands) |
|
|
|
Total |
|||||||
Nonaccrual loans held for investment: | |||||||||||
Residential mortgage | $ |
16,895 |
|
$ |
6,446 |
|
$ |
8,055 |
|
$ |
31,396 |
Construction |
3,776 |
|
|
966 |
|
|
- |
|
|
4,742 |
|
Commercial mortgage |
2,865 |
|
|
8,871 |
|
|
- |
|
|
11,736 |
|
Commercial and Industrial |
26,387 |
|
|
1,274 |
|
|
- |
|
|
27,661 |
|
Consumer and finance leases |
20,276 |
|
|
326 |
|
|
36 |
|
|
20,638 |
|
Total nonaccrual loans held for investment |
70,199 |
|
|
17,883 |
|
|
8,091 |
|
|
96,173 |
|
OREO |
17,413 |
|
|
4,202 |
|
|
67 |
|
|
21,682 |
|
Other repossessed property |
7,330 |
|
|
183 |
|
|
- |
|
|
7,513 |
|
Other assets (1) |
1,532 |
|
|
- |
|
|
- |
|
|
1,532 |
|
Total non-performing assets (2) | $ |
96,474 |
|
$ |
22,268 |
|
$ |
8,158 |
|
$ |
126,900 |
Past due loans 90 days and still accruing (3) | $ |
44,028 |
|
$ |
3,145 |
|
$ |
- |
|
$ |
47,173 |
|
|
|
|
|
|
|
|
|
|
||
As of March 31, 2024 |
|||||||||||
(In thousands) |
|
|
|
|
|
|
Total |
||||
Nonaccrual loans held for investment: |
|
||||||||||
Residential mortgage | $ |
17,521 |
|
$ |
6,693 |
|
$ |
8,471 |
|
$ |
32,685 |
Construction |
531 |
|
|
967 |
|
|
- |
|
|
1,498 |
|
Commercial mortgage |
3,037 |
|
|
8,939 |
|
|
- |
|
|
11,976 |
|
Commercial and Industrial |
13,431 |
|
|
1,119 |
|
|
10,517 |
|
|
25,067 |
|
Consumer and finance leases |
21,503 |
|
|
203 |
|
|
33 |
|
|
21,739 |
|
Total nonaccrual loans held for investment |
56,023 |
|
|
17,921 |
|
|
19,021 |
|
|
92,965 |
|
OREO |
24,577 |
|
|
4,287 |
|
|
- |
|
|
28,864 |
|
Other repossessed property |
5,916 |
|
|
287 |
|
|
23 |
|
|
6,226 |
|
Other assets (1) |
1,551 |
|
|
- |
|
|
- |
|
|
1,551 |
|
Total non-performing assets (2) | $ |
88,067 |
|
$ |
22,495 |
|
$ |
19,044 |
|
$ |
129,606 |
Past due loans 90 days and still accruing (3) | $ |
51,614 |
|
$ |
5,762 |
|
$ |
139 |
|
$ |
57,515 |
|
|
|
|
|
|
|
|
|
|
||
As of December 31, 2023 |
|||||||||||
(In thousands) |
|
|
|
|
|
|
Total |
||||
Nonaccrual loans held for investment: |
|
||||||||||
Residential mortgage | $ |
18,324 |
|
$ |
6,688 |
|
$ |
7,227 |
|
$ |
32,239 |
Construction |
595 |
|
|
974 |
|
|
- |
|
|
1,569 |
|
Commercial mortgage |
3,106 |
|
|
9,099 |
|
|
- |
|
|
12,205 |
|
Commercial and Industrial |
13,414 |
|
|
1,169 |
|
|
667 |
|
|
15,250 |
|
Consumer and finance leases |
21,954 |
|
|
419 |
|
|
71 |
|
|
22,444 |
|
Total nonaccrual loans held for investment |
57,393 |
|
|
18,349 |
|
|
7,965 |
|
|
83,707 |
|
OREO |
28,382 |
|
|
4,287 |
|
|
- |
|
|
32,669 |
|
Other repossessed property |
7,857 |
|
|
252 |
|
|
6 |
|
|
8,115 |
|
Other assets (1) |
1,415 |
|
|
- |
|
|
- |
|
|
1,415 |
|
Total non-performing assets (2) | $ |
95,047 |
|
$ |
22,888 |
|
$ |
7,971 |
|
$ |
125,906 |
Past due loans 90 days and still accruing (3) | $ |
53,308 |
|
$ |
6,005 |
|
$ |
139 |
|
$ |
59,452 |
___________________________________ | |
(1) |
Residential pass-through MBS issued by the PRHFA held as part of the available-for-sale debt securities portfolio. |
(2) |
Excludes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans as “units of account” both at the time of adoption of CECL on January 1, 2020 and on an ongoing basis for credit loss measurement. These loans will continue to be excluded from nonaccrual loan statistics as long as the Corporation can reasonably estimate the timing and amount of cash flows expected to be collected on the loan pools. The portion of such loans contractually past due 90 days or more amounted to $7.4 million as of June 30, 2024 (March 31, 2024 - $8.6 million; December 31, 2023 - $8.3 million). |
(3) |
These include rebooked loans, which were previously pooled into GNMA securities, amounting to $6.8 million as of June 30, 2024 (March 31, 2024 - $8.8 million; December 31, 2023 - $7.9 million). Under the GNMA program, the Corporation has the option but not the obligation to repurchase loans that meet GNMA's specified delinquency criteria. For accounting purposes, the loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability. |
Table 9 – Allowance for Credit Losses on Loans and Finance Leases
Quarter Ended |
|
Six-Month Period Ended |
||||||||||||||||||||
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
||||||||||||||
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Allowance for credit losses on loans and finance leases, beginning of period |
$ |
263,592 |
|
$ |
261,843 |
|
$ |
265,567 |
|
$ |
261,843 |
|
$ |
260,464 |
|
|||||||
Impact of adoption of ASU 2022-02 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
2,116 |
|
|||||||
Provision for credit losses on loans and finance leases expense |
|
11,930 |
|
|
12,917 |
|
|
20,770 |
|
|
24,847 |
|
|
37,026 |
|
|||||||
Net (charge-offs) recoveries of loans and finance leases: |
|
|
|
|
|
|||||||||||||||||
Residential mortgage |
|
(45 |
) |
|
(244 |
) |
|
(389 |
) |
|
(289 |
) |
|
(875 |
) |
|||||||
Construction |
|
14 |
|
|
10 |
|
|
371 |
|
|
24 |
|
|
434 |
|
|||||||
Commercial mortgage |
|
393 |
|
|
40 |
|
|
(32 |
) |
|
433 |
|
|
118 |
|
|||||||
Commercial and Industrial |
|
626 |
|
|
4,660 |
|
|
(6,218 |
) |
|
5,286 |
|
|
(6,246 |
) |
|||||||
Consumer loans and finance leases |
|
(21,978 |
) |
|
(15,634 |
) |
(1) |
|
(13,011 |
) |
|
(37,612 |
) |
(1) |
|
(25,979 |
) |
|||||
Net charge-offs |
|
(20,990 |
) |
|
(11,168 |
) |
(1) |
|
(19,279 |
) |
|
(32,158 |
) |
(1) |
|
(32,548 |
) |
|||||
Allowance for credit losses on loans and finance leases, end of period |
$ |
254,532 |
|
$ |
263,592 |
|
$ |
267,058 |
|
$ |
254,532 |
|
$ |
267,058 |
|
|||||||
|
|
|
|
|
||||||||||||||||||
Allowance for credit losses on loans and finance leases to period end total loans held for investment |
|
2.06 |
% |
|
2.14 |
% |
|
2.28 |
% |
|
2.06 |
% |
|
2.28 |
% |
|||||||
Net charge-offs (annualized) to average loans outstanding during the period |
|
0.69 |
% |
|
0.37 |
% |
|
0.67 |
% |
|
0.53 |
% |
|
0.56 |
% |
|||||||
Provision for credit losses on loans and finance leases to net charge-offs during the period |
0.57x |
1.16x |
1.08x |
0.77x |
1.14x |
(1) |
For the quarter ended March 31, 2024 and six-month period ended June 30 2024, includes a recovery totaling $9.5 million associated with the aforementioned bulk sale of fully charged-off consumer loans. |
Table 10 – Annualized Net Charge-Offs (Recoveries) to Average Loans
|
Quarter Ended |
|
Six-Month Period Ended |
||||||
|
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
Residential mortgage |
0.01% |
|
0.03% |
|
0.06% |
|
0.02% |
|
0.06% |
Construction |
-0.02% |
|
-0.02% |
|
-0.99% |
|
-0.02% |
|
-0.59% |
Commercial mortgage |
-0.07% |
|
-0.01% |
|
0.01% |
|
-0.04% |
|
-0.01% |
Commercial and Industrial |
-0.08% |
|
-0.59% |
|
0.87% |
|
-0.33% |
|
0.44% |
Consumer loans and finance leases |
2.38% |
|
1.70% |
(1) |
1.51% |
|
2.04% |
(1) |
1.53% |
Total loans |
0.69% |
|
0.37% |
(1) |
0.67% |
|
0.53% |
(1) |
0.56% |
(1) |
The $9.5 million recovery associated with the aforementioned bulk sale reduced the consumer loans and finance leases and total net charge-offs to related average loans ratio for the quarter ended March 31, 2024 by 104 basis points and 31 basis points, respectively, and for the six-month period ended June 30, 2024 by 52 basis points and 15 basis points, respectively. |
Table 11 – Deposits
|
As of |
|||||||
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|||
(In thousands) |
|
|
|
|
|
|||
Time deposits |
$ |
3,037,120 |
|
$ |
2,961,526 |
|
$ |
2,833,730 |
Interest-bearing saving and checking accounts |
|
7,461,003 |
|
|
7,511,973 |
|
|
7,534,800 |
Non-interest-bearing deposits |
|
5,406,054 |
|
|
5,346,326 |
|
|
5,404,121 |
Total deposits, excluding brokered CDs (1) |
|
15,904,177 |
|
|
15,819,825 |
|
|
15,772,651 |
Brokered CDs |
|
624,779 |
|
|
725,686 |
|
|
783,334 |
Total deposits |
$ |
16,528,956 |
|
$ |
16,545,511 |
|
$ |
16,555,985 |
Total deposits, excluding brokered CDs and government deposits |
$ |
12,706,646 |
|
$ |
12,574,900 |
|
$ |
12,600,719 |
|
|
|
|
|
|
|
|
|
___________________________________________________________ | |
(1) |
As of each of June 30, 2024, March 31, 2024 and December 31, 2023, government deposits amounted to $3.2 billion. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240723074670/en/
First BanCorp.
Senior Vice President
Corporate Strategy and Investor Relations
ramon.rodriguez@firstbankpr.com
(787) 729-8200 Ext. 82179
Source: First BanCorp.