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Strong net result despite rising expenses

Strong net result despite rising expenses

  • Net income: $73.7 million or $0.45 per share.

  • Return on investment: 1.55%.

  • Adjusted earnings before taxes and provisions: 112 million dollars.

  • Loan portfolio growth: Increased by $63 million.

  • Core deposits: $12.7 billion.

  • Non-performing assets: 63 basis points of total assets.

  • Net interest income: $202.1 million, an increase of $2.5 million from last quarter.

  • Net interest margin: Expansion by 3 basis points to 4.25%.

  • Cost: $122.9 million, up $4.3 million from last quarter.

  • Efficiency ratio: About 52%.

  • Compensation for loan defaults: $247 million, down $7.5 million.

  • Tangible book value per share: Increased 15% to $10.09.

  • Tangible Common Equity Ratio: 8.79%.

Release date: October 23, 2024

For the full transcript of the conference call, please see the full conference call minutes.

  • First BanCorp (NYSE:FBP) reported a strong quarter with net income of $73.7 million, equivalent to $0.45 per share.

  • The company achieved a solid return on capital of 1.55% and maintained an efficiency ratio in the range of 52%.

  • Asset quality improved, with non-performing assets reduced to 63 basis points of total assets.

  • The loan portfolio grew by $63 million despite higher-than-expected commercial prepayments.

  • First BanCorp (NYSE:FBP) has successfully launched the nCino platform, improving the digital experience in commercial lending.

  • Adjusted profit before taxes and provisions fell slightly to $112 million due to increased expenses.

  • Loan growth expectations were revised down to 4% in 2024, largely due to higher-than-forecast prepayments.

  • Net charge-offs rose to $24 million, or 78 basis points of average loans, compared to 69 basis points last quarter.

  • Expenses increased to $122.9 million, up $4.3 million from the previous quarter, due to increased personnel and consulting costs.

  • Investment portfolio income decreased by $1 million as redemptions and maturities continued.

Q: What are your thoughts on when the balance sheet can start growing and how does this relate to NII growth in 2025? A: Orlando Berges, Executive Vice President and CFO, explained that cash flows from the investment portfolio continue to be reinvested in loans, which is why the balance sheet has not grown significantly. They expect a stable balance sheet until the investment portfolio reaches the desired liquidity requirements. Balance sheet growth is expected to correlate with deposit growth in the second half of 2025.

Q: Can you provide insight into the overall health of Puerto Rico consumers and current consumer trends? A: Aurelio Aleman, President and CEO, noted that consumer behavior is normalizing after the pandemic. They expect stability in the consumer portfolio with some improvement in delinquencies and loss metrics throughout 2025 without increasing risk appetite.