Puerto Rico
|
001-14793
|
66-0561882
|
(State or Other Jurisdiction of Incorporation)
|
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
1519 Ponce de Leon Ave.
P.O. Box 9146
San Juan, Puerto Rico
|
00908-0146
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which registered
|
Common Stock ($0.10 par value)
|
FBP
|
New York Stock Exchange
|
Item 2.02 |
Results of Operations and Financial Condition.
|
Item 9.01 |
Financial Statements and Exhibits
|
(d)
|
Exhibits
|
Exhibit
|
Description of Exhibit
|
|
99.1
|
Press Release dated April 23, 2024 - First BanCorp Announces Earnings for the quarter ended March 31, 2024
|
|
99.2
|
First BanCorp Conference Call Presentation – Financial Results for the quarter ended March 31, 2024
|
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
|
Exhibits 99.1 and 99.2 referenced therein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall Exhibits 99.1 and
99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.
|
Exhibit
|
Description of Exhibit
|
|
Press Release dated April 23, 2024 - First BanCorp Announces Earnings for the quarter ended March 31, 2024
|
||
First BanCorp Conference Call Presentation – Financial Results for the quarter ended March 31, 2024
|
||
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
|
Exhibits 99.1 and 99.2 referenced therein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall Exhibits 99.1 and
99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.
|
Date: April 23, 2024
|
First BanCorp.
|
||
By:
|
/s/ Orlando Berges
|
||
Name:
|
Orlando Berges
|
||
Title:
|
EVP and Chief Financial Officer
|
Q1
|
Q4
|
Q1
|
||||||||||
2024
|
2023
|
2023
|
||||||||||
(in thousands, except per share and financial ratios)
|
Financial Highlights
|
|||||||||||
Net interest income
|
$
|
196,520
|
$
|
196,682
|
$
|
200,885
|
||||||
Provision for credit losses
|
$
|
12,167
|
$
|
18,812
|
$
|
15,502
|
||||||
Non-interest income
|
$
|
33,983
|
$
|
33,609
|
$
|
32,518
|
||||||
Non-interest expenses
|
$
|
120,923
|
$
|
126,605
|
$
|
115,268
|
||||||
Income before income taxes
|
$
|
97,413
|
$
|
84,874
|
$
|
102,633
|
||||||
Income tax expense
|
$
|
23,955
|
$
|
5,385
|
$
|
31,935
|
||||||
Net Income
|
$
|
73,458
|
$
|
79,489
|
$
|
70,698
|
||||||
Selected Financial Data
|
||||||||||||
Net Interest Margin
|
4.16
|
%
|
4.14
|
%
|
4.34
|
%
|
||||||
Efficiency Ratio
|
52.46
|
%
|
54.98
|
%
|
49.39
|
%
|
||||||
Earnings per share - diluted
|
$
|
0.44
|
$
|
0.46
|
$
|
0.39
|
||||||
Book Value per Share
|
$
|
8.88
|
$
|
8.85
|
$
|
7.82
|
||||||
Tangible Book Value per Share (1)
|
$
|
8.58
|
$
|
8.54
|
$
|
7.50
|
||||||
Return on Average Common Equity
|
19.56
|
%
|
23.69
|
%
|
21.00
|
%
|
||||||
Return on Average Assets
|
1.56
|
%
|
1.70
|
%
|
1.55
|
%
|
||||||
(1) Represents a non-GAAP financial measure. Refer to “Non-GAAP Financial Measures” for the definition of and additional information about this non-GAAP financial measure.
|
Results for First Quarter of 2024 compared to Fourth Quarter 2023
|
Profitability
|
|
Net Income – $73.5 million, or $0.44
per diluted share compared to $79.5 million, or $0.46 per diluted share. Net income for the respective periods included $0.9 million ($0.6 million after-tax) and $6.3 million ($3.9 million after-tax, or a decrease of $0.03 per diluted
share), respectively, related to the estimated Federal Deposit Insurance Corporation (“FDIC”) special assessment expense.
Income before income taxes – $97.4
million compared to $84.9 million.
Adjusted pre-tax, pre-provision income (Non-GAAP)(1) – $110.5 million, compared to $110.0 million.
Net interest income – $196.5
million compared to $196.7 million. The decrease includes a net reduction of $1.1 million associated with the effect of one less day in the first quarter of 2024. Net interest margin increased to 4.16%, compared to 4.14%.
Provision for credit losses – $12.2
million compared to $18.8 million. First quarter of 2024 includes a $9.5 million recovery associated with a bulk sale of fully charged-off consumer loans, a $5.0 million recovery of a commercial and industrial loan and higher volume
of loans.
Non-interest expenses – $120.9
million compared to $126.6 million, mainly driven by the aforementioned $6.3 million FDIC special assessment recognized in the fourth quarter of 2023. The efficiency ratio was 52.46%, compared to 54.98%. On a non-GAAP basis, excluding
the FDIC special assessment, the adjusted efficiency ratio(1) was 52.05% and 52.24%, respectively.
|
|
|
|
Balance
Sheet
|
|
Total loans – grew by $130.7
million, primarily attributed to growth in the commercial and construction loan portfolios in the Puerto Rico and Florida regions. Total loan originations, other than credit card utilization activity, of $1.1 billion, down $214.9
million.
Core deposits (other than brokered and government deposits) – $12.6 billion, decreased by $25.8 million, reflecting a decline of $28.3 million in the Florida region, partially offset by increases of $1.3 million in the Virgin Islands region and $1.2 million in the
Puerto Rico region. This decrease is net of a $93.9 million increase in time deposits.
Government deposits (fully collateralized) – increased by $73.0 million and totaled $3.2 billion. Variance reflects growth of $56.8 million in the Puerto Rico region, $14.2 million in the Virgin Islands region, and $2.0 million in the Florida region.
|
|
|
|
Asset
Quality
|
|
Allowance for credit losses (“ACL”) coverage ratio – 2.14%, compared to 2.15%. Annualized net charge-offs to average loans ratio decreased to 0.37% (31 basis points decrease due to
aforementioned bulk sale), compared to 0.69%.
Non-performing assets – Increased
by $3.7 million to $129.6 million, mainly driven by inflow of a $10.5 million commercial and industrial loan in the Florida region, partially offset by lower other real estate owned (“OREO”).
|
|
|
|
Liquidity
and
Capital
|
|
Liquidity – Cash and cash
equivalents increased to $684.5 million, compared to $663.2 million. When adding $2.0 billion of free high-quality liquid securities that could be liquidated or pledged within one day, total core liquidity amounted to $2.7 billion, or
14.45% of total assets, compared to 14.93%. Including the $972.5 million in available lending capacity at the Federal Home Loan Bank (“FHLB”), available liquidity amounted to 19.60% of total assets, compared to 19.82%.
Capital – Repurchased $50.0 million
of common stock and paid $26.6 million in common stock dividends. Capital ratios exceeded required regulatory levels. The Corporation’s estimated total capital, common equity tier 1 (“CET1”) capital, tier 1 capital, and leverage
ratios were 18.36%, 15.90%, 15.90%, and 10.65%, respectively, as of March 31, 2024. On a non-GAAP basis, the tangible common equity ratio(1) amounted to 7.59% compared to 7.67%.
|
Quarter Ended
|
||||||||||||
March 31, 2024
|
December 31, 2023
|
March 31, 2023
|
||||||||||
(In thousands, except per share information)
|
||||||||||||
Net income, as reported (GAAP)
|
$
|
73,458
|
$
|
79,489
|
$
|
70,698
|
||||||
Adjustments:
|
||||||||||||
FDIC special assessment expense
|
947
|
6,311
|
-
|
|||||||||
Income tax impact of adjustments (1)
|
(355
|
)
|
(2,367
|
)
|
-
|
|||||||
Adjusted net income attributable to common stockholders (non-GAAP)
|
$
|
74,050
|
$
|
83,433
|
$
|
70,698
|
||||||
Weighted-average diluted shares outstanding
|
167,798
|
171,351
|
181,236
|
|||||||||
Earnings Per Share - diluted (GAAP)
|
$
|
0.44
|
$
|
0.46
|
$
|
0.39
|
||||||
Adjusted Earnings Per Share - diluted (non-GAAP)
|
$
|
0.44
|
$
|
0.49
|
$
|
0.39
|
(1)
|
See Non-GAAP Disclosures - Special Items - FDIC Special Assessment Expense above for
discussion of the individual tax impact related to the above adjustments.
|
Quarter Ended
|
||||||||||||||||||||
March 31, 2024
|
December 31, 2023
|
September 30, 2023
|
June 30, 2023
|
March 31, 2023
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Income before income taxes
|
$
|
97,413
|
$
|
84,874
|
$
|
108,990
|
$
|
100,939
|
$
|
102,633
|
||||||||||
Add: Provision for credit losses expense
|
12,167
|
18,812
|
4,396
|
22,230
|
15,502
|
|||||||||||||||
Add: FDIC special assessment expense
|
947
|
6,311
|
-
|
-
|
-
|
|||||||||||||||
Less: Gain recognized from legal settlement
|
-
|
-
|
-
|
(3,600
|
)
|
-
|
||||||||||||||
Less: Gain on early extinguishment of debt
|
-
|
-
|
-
|
(1,605
|
)
|
-
|
||||||||||||||
Adjusted pre-tax, pre-provision income (1)
|
$
|
110,527
|
$
|
109,997
|
$
|
113,386
|
$
|
117,964
|
$
|
118,135
|
||||||||||
Change from most recent prior period (amount)
|
$
|
530
|
$
|
(3,389
|
)
|
$
|
(4,578
|
)
|
$
|
(171
|
)
|
$
|
(4,107
|
)
|
||||||
Change from most recent prior period (percentage)
|
0.5
|
%
|
-3.0
|
%
|
-3.9
|
%
|
-0.1
|
%
|
-3.4
|
%
|
(1)
|
Non-GAAP financial measure. See Non-GAAP Disclosures above for the definition and
additional information about this non-GAAP financial measure.
|
Quarter Ended
|
||||||||||||||||||||
(Dollars in thousands)
|
March 31, 2024
|
December 31, 2023
|
September 30, 2023
|
June 30, 2023
|
March 31, 2023
|
|||||||||||||||
Net Interest Income
|
||||||||||||||||||||
Interest income
|
$
|
268,505
|
$
|
265,481
|
$
|
263,405
|
$
|
252,204
|
$
|
242,396
|
||||||||||
Interest expense
|
71,985
|
68,799
|
63,677
|
52,389
|
41,511
|
|||||||||||||||
Net interest income
|
$
|
196,520
|
$
|
196,682
|
$
|
199,728
|
$
|
199,815
|
$
|
200,885
|
||||||||||
Average Balances
|
||||||||||||||||||||
Loans and leases
|
$
|
12,207,840
|
$
|
12,004,881
|
$
|
11,783,456
|
$
|
11,591,516
|
$
|
11,519,399
|
||||||||||
Total securities, other short-term investments and interest-bearing cash balances
|
6,720,395
|
6,835,407
|
7,325,226
|
7,333,989
|
7,232,347
|
|||||||||||||||
Average interest-earning assets
|
$
|
18,928,235
|
$
|
18,840,288
|
$
|
19,108,682
|
$
|
18,925,505
|
$
|
18,751,746
|
||||||||||
Average interest-bearing liabilities
|
$
|
11,838,159
|
$
|
11,665,459
|
$
|
11,671,938
|
$
|
11,176,385
|
$
|
10,957,892
|
||||||||||
Average Yield/Rate
|
||||||||||||||||||||
Average yield on interest-earning assets - GAAP
|
5.69
|
%
|
5.59
|
%
|
5.47
|
%
|
5.35
|
%
|
5.24
|
%
|
||||||||||
Average rate on interest-bearing liabilities - GAAP
|
2.44
|
%
|
2.34
|
%
|
2.16
|
%
|
1.88
|
%
|
1.54
|
%
|
||||||||||
Net interest spread - GAAP
|
3.25
|
%
|
3.25
|
%
|
3.31
|
%
|
3.47
|
%
|
3.70
|
%
|
||||||||||
Net interest margin - GAAP
|
4.16
|
%
|
4.14
|
%
|
4.15
|
%
|
4.23
|
%
|
4.34
|
%
|
|
• |
A $3.3 million net increase in interest expense on interest-bearing deposits, consisting of:
|
|
- |
A $2.2 million increase in interest expense on brokered CDs, primarily related to a $177.7 million increase in the average balance of this portfolio.
|
|
- |
A $2.1 million increase in interest expense on time deposits, excluding brokered CDs, mainly due to approximately $1.6 million associated with higher rates
paid in the first quarter of 2024 on new issuances and renewals, and $0.8 million of additional interest expense associated with a $99.5 million increase in the average balance, partially offset by $0.3 million associated with the effect of
one less day in the first quarter of 2024. The average cost of non-brokered time deposits in the first quarter of 2024 increased 22 basis points to 3.39% when compared to the previous quarter.
|
|
- |
A $1.0 million decrease in interest expense on interest-bearing checking and saving accounts, of which approximately $0.4 million was driven by a decrease in
average rates paid in the first quarter of 2024, primarily on public sector deposits; $0.3 million was due to a $100.9 million decrease in the average balance; and $0.3 million was associated with the effect of one less day in the first
quarter of 2024. The average cost of interest-bearing checking and saving accounts, excluding public sector deposits, remained stable at 0.75% in the first quarter of 2024, when compared to the previous quarter.
|
|
• |
A $0.5 million net decrease in investment securities, driven by a $0.3 million decrease in interest income on debt securities mainly associated with a $146.4
million decrease in the average balance and a $0.2 million decrease in interest income associated with dividends received on other equity securities during the fourth quarter of 2023.
|
|
• |
A $3.2 million net increase in interest income on loans, consisting of:
|
|
- |
A $2.5 million increase in interest income on commercial and construction loans, due to a $3.6 million increase in interest income associated with a $156.9
million increase in the average balance of this portfolio, which includes the full effect of the $150.0 million commercial and industrial participated loan funded late in the fourth quarter of 2023 in connection with the financial closing
of a public-private partnership (P3) for improvement of infrastructure for toll roads, and higher market interest rates. This variance was partially offset by $1.1 million associated with the effect of one less day in the first quarter of
2024.
|
|
- |
A $0.9 million increase in interest income on consumer loans and finance leases, due to a $1.6 million increase in interest income related to an increase of
$48.2 million in the average balance of this portfolio, mainly in the auto loans and finance leases portfolios, and higher yields, partially offset by $0.7 million associated with the effect of one less day in the first quarter of 2024.
|
|
- |
A $0.2 million decrease in interest income on residential mortgage loans, mainly driven by higher collections on nonaccrual loans during the fourth quarter of
2023, including $0.5 million recognized on the payoff of a nonaccrual loan in the Puerto Rico region.
|
|
• |
A $0.3 million increase in interest income from interest-bearing cash balances, driven by a $29.4 million increase in the average balance of interest-bearing
cash balances, primarily consisting of cash balances deposited at the Federal Reserve Bank (“FED”).
|
Quarter Ended
|
||||||||||||||||||||
March 31, 2024
|
December 31, 2023
|
September 30, 2023
|
June 30, 2023
|
March 31, 2023
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Service charges and fees on deposit accounts
|
$
|
9,662
|
$
|
9,662
|
$
|
9,552
|
$
|
9,287
|
$
|
9,541
|
||||||||||
Mortgage banking activities
|
2,882
|
2,094
|
2,821
|
2,860
|
2,812
|
|||||||||||||||
Gain on early extinguishment of debt
|
-
|
-
|
-
|
1,605
|
-
|
|||||||||||||||
Insurance commission income
|
5,507
|
2,379
|
2,790
|
2,747
|
4,847
|
|||||||||||||||
Card and processing income
|
11,312
|
11,015
|
10,841
|
11,135
|
10,918
|
|||||||||||||||
Other non-interest income
|
4,620
|
8,459
|
4,292
|
8,637
|
4,400
|
|||||||||||||||
Non-interest income
|
$
|
33,983
|
$
|
33,609
|
$
|
30,296
|
$
|
36,271
|
$
|
32,518
|
|
• |
A $3.1 million increase 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.
|
|
• |
A $0.8 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 higher margins. During the first quarter of 2024 and fourth quarter of 2023, net realized gains of $1.1 million and $0.4 million, respectively, were recognized as a result of
Government National Mortgage Association (“GNMA”) securitization transactions and whole loan sales to U.S. government-sponsored enterprises amounting to $31.5 million and $23.7 million respectively.
|
|
• |
A $0.3 million increase in card and processing income, mainly in merchant-related fees, due to higher transactional volumes.
|
|
• |
A $3.8 million decrease in other non-interest income, mainly driven by a $3.0 million gain recognized on the sale of a banking premise in the Florida region
during the fourth quarter of 2023.
|
Quarter Ended
|
||||||||||||||||||||
March 31, 2024
|
December 31, 2023
|
September 30, 2023
|
June 30, 2023
|
March 31, 2023
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Employees' compensation and benefits
|
$
|
59,506
|
$
|
55,584
|
$
|
56,535
|
$
|
54,314
|
$
|
56,422
|
||||||||||
Occupancy and equipment
|
21,381
|
21,847
|
21,781
|
21,097
|
21,186
|
|||||||||||||||
Business promotion
|
3,842
|
6,725
|
4,759
|
4,167
|
3,975
|
|||||||||||||||
Professional service fees:
|
||||||||||||||||||||
Collections, appraisals and other credit-related fees
|
1,366
|
952
|
930
|
1,231
|
848
|
|||||||||||||||
Outsourcing technology services
|
7,469
|
7,003
|
7,261
|
7,278
|
8,141
|
|||||||||||||||
Other professional fees
|
3,841
|
3,295
|
2,831
|
3,087
|
2,984
|
|||||||||||||||
Taxes, other than income taxes
|
5,129
|
5,535
|
5,465
|
5,124
|
5,112
|
|||||||||||||||
FDIC deposit insurance
|
3,102
|
8,454
|
2,143
|
2,143
|
2,133
|
|||||||||||||||
Other insurance and supervisory fees
|
2,293
|
2,308
|
2,356
|
2,352
|
2,368
|
|||||||||||||||
Net gain on OREO operations
|
(1,452
|
)
|
(1,005
|
)
|
(2,153
|
)
|
(1,984
|
)
|
(1,996
|
)
|
||||||||||
Credit and debit card processing expenses
|
5,751
|
7,360
|
6,779
|
6,540
|
5,318
|
|||||||||||||||
Communications
|
2,097
|
2,134
|
2,219
|
1,992
|
2,216
|
|||||||||||||||
Other non-interest expenses
|
6,598
|
6,413
|
5,732
|
5,576
|
6,561
|
|||||||||||||||
Total non-interest expenses
|
$
|
120,923
|
$
|
126,605
|
$
|
116,638
|
$
|
112,917
|
$
|
115,268
|
|
• |
A $2.9 million decrease in business promotion expenses, mainly as a result of decreases in advertising and public relations activities.
|
|
• |
A $1.6 million decrease 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 $0.4 million decrease in occupancy and equipment expenses, in part due to a decrease in depreciation charges.
|
|
• |
A $0.4 million increase in net gain on OREO operations, mainly driven by an increase in net realized gains on sales of OREO properties, primarily residential
properties in Puerto Rico.
|
|
• |
A $0.4 million decrease in taxes, other than income taxes, mainly in the municipal
tax accrual.
|
|
• |
A $3.9 million increase in employees’ compensation and benefits expense,
mainly driven by a seasonal increase in payroll taxes and bonuses, and stock-based compensation expense of retirement-eligible employees.
|
|
• |
A $1.4 million increase in professional service fees, mainly in consulting
fees, in part driven to information technology infrastructure enhancements.
|
(Dollars in thousands)
|
March 31, 2024
|
December 31, 2023
|
September 30, 2023
|
June 30, 2023
|
March 31, 2023
|
|||||||||||||||
Nonaccrual loans held for investment:
|
||||||||||||||||||||
Residential mortgage
|
$
|
32,685
|
$
|
32,239
|
$
|
31,946
|
$
|
33,252
|
$
|
36,410
|
||||||||||
Construction
|
1,498
|
1,569
|
1,640
|
1,677
|
1,794
|
|||||||||||||||
Commercial mortgage
|
11,976
|
12,205
|
21,632
|
21,536
|
21,598
|
|||||||||||||||
Commercial and Industrial
|
25,067
|
15,250
|
18,809
|
9,194
|
13,404
|
|||||||||||||||
Consumer and finance leases
|
21,739
|
22,444
|
19,137
|
16,362
|
15,936
|
|||||||||||||||
Total nonaccrual loans held for investment
|
$
|
92,965
|
$
|
83,707
|
$
|
93,164
|
$
|
82,021
|
$
|
89,142
|
||||||||||
OREO
|
28,864
|
32,669
|
28,563
|
31,571
|
32,862
|
|||||||||||||||
Other repossessed property
|
6,226
|
8,115
|
7,063
|
5,404
|
4,743
|
|||||||||||||||
Other assets (1)
|
1,551
|
1,415
|
1,448
|
2,111
|
2,203
|
|||||||||||||||
Total non-performing assets (2)
|
$
|
129,606
|
$
|
125,906
|
$
|
130,238
|
$
|
121,107
|
$
|
128,950
|
||||||||||
Past due loans 90 days and still accruing (3)
|
$
|
57,515
|
$
|
59,452
|
$
|
62,892
|
$
|
63,211
|
$
|
74,380
|
||||||||||
Nonaccrual loans held for investment to total loans held for investment
|
0.76
|
%
|
0.69
|
%
|
0.78
|
%
|
0.70
|
%
|
0.77
|
%
|
||||||||||
Nonaccrual loans to total loans
|
0.75
|
%
|
0.69
|
%
|
0.78
|
%
|
0.70
|
%
|
0.77
|
%
|
||||||||||
Non-performing assets to total assets
|
0.69
|
%
|
0.67
|
%
|
0.70
|
%
|
0.63
|
%
|
0.68
|
%
|
(1) |
Residential pass-through mortgage-backed security ("MBS") issued by the Puerto Rico Housing Finance Authority ("PRHFA") held as part of the
available-for-sale debt securities portfolio.
|
(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 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 $8.6 million as of March 31, 2024 (December 31, 2023- $8.3 million; September 30, 2023 - $8.9 million; June 30, 2023 - $9.5 million; March 31, 2023 - $10.4 million).
|
(3) |
These include rebooked loans, which were previously pooled into GNMA securities, amounting to $8.8 million as of March 31, 2024 (December
31, 2023- $7.9 million; September 30, 2023 - $8.5 million; June 30, 2023 - $6.5 million; March 31, 2023 - $7.1 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.
|
|
• |
Total non-performing assets increased by $3.7 million to $129.6 million as
of March 31, 2024, compared to $125.9 million as of December 31, 2023. Total nonaccrual loans held for investment increased
by $9.3 million to $93.0 million as of March 31, 2024, compared to $83.7 million as of December 31, 2023.
|
|
- |
The inflow to nonaccrual status of a $10.5 million commercial and industrial loan in the Florida region in the power generation industry during the first
quarter of 2024.
|
|
- |
A $0.5 million increase in nonaccrual residential mortgage loans.
|
|
- |
A $3.8 million decrease in the OREO portfolio balance, mainly attributable to the sale of residential properties in the Puerto Rico region.
|
|
- |
A $1.9 million decrease in other repossessed property, consisting of repossessed automobiles.
|
|
- |
A $0.7 million decrease in nonaccrual consumer loans, consisting mainly of auto loans and finance leases.
|
|
• |
Inflows to nonaccrual loans held for investment were $46.8 million in the first quarter of 2024, an increase of $11.9 million, compared to inflows of $34.9
million in the fourth quarter of 2023. The increase was mostly related to the aforementioned inflow of the $10.5 million commercial and industrial loan in the Florida region. Inflows to nonaccrual consumer loans were $31.2 million, an
increase of $3.1 million compared to inflows of $28.1 million in the fourth quarter of 2023. Inflows to nonaccrual residential mortgage loans were $4.6 million in the first quarter of 2024, a decrease of $0.7 million compared to inflows of
$5.3 million in the fourth quarter of 2023. See Early Delinquency below for additional information.
|
|
• |
Adversely classified commercial and construction loans increased by $9.0 million to $76.5 million as of March 31, 2024, mainly driven by the aforementioned
inflow to nonaccrual status of a $10.5 million commercial and industrial loan in the Florida region.
|
|
• |
Consumer loans in early delinquency decreased by $15.5 million to $96.5 million, mainly in the auto loan portfolio.
|
|
• |
Residential mortgage loans in early delinquency decreased by $4.0 million to $32.5 million.
|
|
• |
Commercial and construction loans in early delinquency increased by $2.4 million to $4.7 million, mainly due to certain commercial loans that matured and are
in the process of renewal but for which the Corporation continues to receive interest and principal payments from the borrower.
|
Quarter ended March 31, 2024
|
||||||||||||||||||||||||||||||||
Loans and Finance Leases
|
Debt Securities
|
|||||||||||||||||||||||||||||||
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
|
%
|
Quarter ended December 31, 2023
|
||||||||||||||||||||||||||||||||
Loans and Finance Leases
|
Debt Securities
|
|||||||||||||||||||||||||||||||
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
|
$
|
57,200
|
$
|
76,875
|
$
|
129,540
|
$
|
263,615
|
$
|
4,761
|
$
|
2,250
|
$
|
465
|
$
|
271,091
|
||||||||||||||||
Provision for credit losses - (benefit) expense
|
(90
|
)
|
(4,905
|
)
|
23,970
|
18,975
|
(123
|
)
|
(53
|
)
|
13
|
18,812
|
||||||||||||||||||||
Net recoveries (charge-offs)
|
287
|
(544
|
)
|
(20,490
|
)
|
(20,747
|
)
|
-
|
-
|
33
|
(20,714
|
)
|
||||||||||||||||||||
Allowance for credit losses, end of period
|
$
|
57,397
|
$
|
71,426
|
$
|
133,020
|
$
|
261,843
|
$
|
4,638
|
$
|
2,197
|
$
|
511
|
$
|
269,189
|
||||||||||||||||
Amortized cost of loans and finance leases
|
$
|
2,821,726
|
$
|
5,706,092
|
$
|
3,657,665
|
$
|
12,185,483
|
||||||||||||||||||||||||
Allowance for credit losses on loans to amortized cost
|
2.03
|
%
|
1.25
|
%
|
3.64
|
%
|
2.15
|
%
|
|
- |
Provision for credit losses for the consumer loan and finance lease portfolios was an expense of $16.2 million for the first quarter of 2024, compared to an expense of $24.0 million for the fourth quarter of
2023. The decrease in provision expense reflects a $9.5 million recovery associated with the aforementioned bulk sale during the first quarter of 2024 and updated macroeconomic variables, partially offset by increases in charge-off
levels, mainly in credit cards, and increases in portfolio volume.
|
|
- |
Provision for credit losses for the residential mortgage loan portfolio was a net benefit of $0.5 million for the first quarter of 2024, compared to a net benefit of $0.1 million for the fourth quarter of
2023. The net benefit recorded during the first quarter of 2024 was mainly due to updated macroeconomic variables, partially offset by newly originated loans that have a longer life.
|
|
- |
Provision for credit losses for the commercial and construction loan portfolios was a net benefit of $2.8 million for the first quarter of 2024, compared to a net benefit of $4.9 million for the fourth
quarter of 2023. The net benefit recorded during the first quarter of 2024 was mainly driven by the aforementioned $5.0 million recovery of a commercial and industrial loan in the Puerto Rico region, partially offset by a deterioration
on the economic outlook of certain macroeconomic variables and increased volume. Meanwhile, the net benefit recorded during the fourth quarter of 2023 was mainly driven by an improvement on the economic outlook of certain macroeconomic
variables, such as the commercial real estate (“CRE”) price index, which was partially offset by increased volume particularly in the commercial and industrial loan portfolio.
|
Quarter Ended
|
||||||||||
March 31, 2024
|
December 31, 2023
|
September 30, 2023
|
June 30, 2023
|
March 31, 2023
|
||||||
Residential mortgage
|
0.03%
|
-0.04%
|
-0.01%
|
0.06%
|
0.07%
|
|||||
Construction
|
-0.02%
|
0.01%
|
-3.18%
|
-0.99%
|
-0.17%
|
|||||
Commercial mortgage
|
-0.01%
|
0.09%
|
-0.01%
|
0.01%
|
-0.03%
|
|||||
Commercial and Industrial
|
-0.59%
|
0.00%
|
-0.02%
|
0.87%
|
0.00%
|
|||||
Consumer loans and finance leases
|
1.70%
|
(1)
|
2.26%
|
1.79%
|
1.51%
|
1.54%
|
||||
Total loans
|
0.37%
|
(1)
|
0.69%
|
0.48%
|
0.67%
|
0.46%
|
(1) |
The $9.5 million recovery associated with the bulk sale of fully charged-off consumer loans during the first quarter of 2024 reduced the consumer loans and finance leases and total net
charge-offs to related average loans for the quarter ended March 31, 2024 by 104 basis points and 31 basis points, respectively.
|
|
• |
A $21.4 million increase in cash and cash equivalents, related to the cash flows from the investment securities portfolio, partially offset by loan growth, the repurchases of common stock, and the payment of common stock dividends.
|
|
• |
A $185.0 million decrease in investment securities, mainly driven by principal repayments of $171.5 million, which include scheduled repayments of $91.4 million and maturities of $80.1 million, and a $15.1
million decrease in the fair value of available-for-sale debt securities attributable to changes in market interest rates.
|
|
• |
A $130.7 million increase in total loans. The variance consisted of increases of $80.9 million in the Florida region and $50.1 million in the Puerto Rico region, partially offset by a decrease of $0.3 million
in the Virgin Islands region. On a portfolio basis, the variance consisted of increases of $123.9 million in commercial and construction loans, and $22.2 million in consumer loans, primarily auto loans and finance leases, partially
offset by a $15.4 million decrease in residential mortgage loans. The growth of $56.8 million in commercial and industrial loans was mainly in the Puerto Rico region driven by increased lines of credit utilization and the origination of
two term loans, which includes the origination of a $13.6 million loan to a municipality in Puerto Rico, partially offset by multiple payoffs and paydowns. In addition, the growth of $44.6 million in commercial mortgage loans was driven
by the origination of three term loans in the Florida region, each in excess of $10 million, with an aggregate balance of $52.3 million.
|
|
• |
Total deposits decreased $10.4 million consisting of:
|
|
o |
A $57.6 million decrease in brokered CDs. The decline reflects maturing short-term brokered CDs amounting to $195.4 million with an all-in cost of 5.42% that were paid off during the first quarter of 2024,
partially offset by $138.0 million of new issuances with original average maturities of approximately 2 years and an all-in cost of 4.79%.
|
|
o |
A $25.8 million decrease in deposits, excluding brokered CDs and government deposits, reflecting a decline of $28.3 million in the Florida region, partially offset by increases of $1.3 million in the Virgin
Islands region, and $1.2 million in the Puerto Rico region. The decrease in such deposits is net of a $93.9 million increase in time deposits.
|
|
o |
A $73.0 million increase in government deposits, which includes increases of $56.8 million in the Puerto Rico region, $14.2 million in the Virgin Islands region, and $2.0
million in the Florida region.
|
March 31, 2024
|
December 31, 2023
|
September 30, 2023
|
June 30, 2023
|
March 31, 2023
|
||||||||||||||||
(In thousands, except ratios and per share information)
|
||||||||||||||||||||
Tangible Equity:
|
||||||||||||||||||||
Total common equity - GAAP
|
$
|
1,479,717
|
$
|
1,497,609
|
$
|
1,303,068
|
$
|
1,397,999
|
$
|
1,405,593
|
||||||||||
Goodwill
|
(38,611
|
)
|
(38,611
|
)
|
(38,611
|
)
|
(38,611
|
)
|
(38,611
|
)
|
||||||||||
Other intangible assets
|
(11,542
|
)
|
(13,383
|
)
|
(15,229
|
)
|
(17,092
|
)
|
(19,073
|
)
|
||||||||||
Tangible common equity - non-GAAP
|
$
|
1,429,564
|
$
|
1,445,615
|
$
|
1,249,228
|
$
|
1,342,296
|
$
|
1,347,909
|
||||||||||
Tangible Assets:
|
||||||||||||||||||||
Total assets - GAAP
|
$
|
18,890,961
|
$
|
18,909,549
|
$
|
18,594,608
|
$
|
19,152,455
|
$
|
18,977,114
|
||||||||||
Goodwill
|
(38,611
|
)
|
(38,611
|
)
|
(38,611
|
)
|
(38,611
|
)
|
(38,611
|
)
|
||||||||||
Other intangible assets
|
(11,542
|
)
|
(13,383
|
)
|
(15,229
|
)
|
(17,092
|
)
|
(19,073
|
)
|
||||||||||
Tangible assets - non-GAAP
|
$
|
18,840,808
|
$
|
18,857,555
|
$
|
18,540,768
|
$
|
19,096,752
|
$
|
18,919,430
|
||||||||||
Common shares outstanding
|
166,707
|
169,303
|
174,386
|
179,757
|
179,789
|
|||||||||||||||
Tangible common equity ratio - non-GAAP
|
7.59
|
%
|
7.67
|
%
|
6.74
|
%
|
7.03
|
%
|
7.12
|
%
|
||||||||||
Tangible book value per common share - non-GAAP
|
$
|
8.58
|
$
|
8.54
|
$
|
7.16
|
$
|
7.47
|
$
|
7.50
|
As of
|
||||||||
March 31, 2024
|
December 31, 2023
|
|||||||
(In thousands, except for share information)
|
||||||||
ASSETS
|
||||||||
Cash and due from banks
|
$
|
680,734
|
$
|
661,925
|
||||
Money market investments:
|
||||||||
Time deposits with other financial institutions
|
300
|
300
|
||||||
Other short-term investments
|
3,485
|
939
|
||||||
Total money market investments
|
3,785
|
1,239
|
||||||
Debt securities available for sale, at fair value (ACL of $442 as of March 31, 2024 and $511 as of
December 31, 2023) |
5,047,179
|
5,229,984
|
||||||
Debt securities held to maturity, at amortized cost, net of ACL of $1,235 as of March 31, 2024 and $2,197 as of
December 31, 2023 (fair value of $338,120 as of March 31, 2024 and $346,132 as of December 31, 2023) |
348,095
|
351,981
|
||||||
Total debt securities
|
5,395,274
|
5,581,965
|
||||||
Equity securities
|
51,390
|
49,675
|
||||||
Total investment securities
|
5,446,664
|
5,631,640
|
||||||
Loans, net of ACL of $263,592 as of March 31, 2024 and $261,843 as of December 31, 2023
|
12,047,856
|
11,923,640
|
||||||
Loans held for sale, at lower of cost or market
|
12,080
|
7,368
|
||||||
Total loans, net
|
12,059,936
|
11,931,008
|
||||||
Accrued interest receivable on loans and investments
|
73,154
|
77,716
|
||||||
Premises and equipment, net
|
141,471
|
142,016
|
||||||
OREO
|
28,864
|
32,669
|
||||||
Deferred tax asset, net
|
147,743
|
150,127
|
||||||
Goodwill
|
38,611
|
38,611
|
||||||
Other intangible assets
|
11,542
|
13,383
|
||||||
Other assets
|
258,457
|
229,215
|
||||||
Total assets
|
$
|
18,890,961
|
$
|
18,909,549
|
||||
LIABILITIES
|
||||||||
Deposits:
|
||||||||
Non-interest-bearing deposits
|
$
|
5,346,326
|
$
|
5,404,121
|
||||
Interest-bearing deposits
|
11,199,185
|
11,151,864
|
||||||
Total deposits
|
16,545,511
|
16,555,985
|
||||||
Advances from the FHLB
|
500,000
|
500,000
|
||||||
Other borrowings
|
161,700
|
161,700
|
||||||
Accounts payable and other liabilities
|
204,033
|
194,255
|
||||||
Total liabilities
|
17,411,244
|
17,411,940
|
||||||
STOCKHOLDERSʼ EQUITY
|
||||||||
Common stock, $0.10 par value, 223,663,116 shares issued (March 31, 2024 - 166,707,047 shares outstanding;
December 31, 2023 - 169,302,812 shares outstanding) |
22,366
|
22,366
|
||||||
Additional paid-in capital
|
959,319
|
965,707
|
||||||
Retained earnings
|
1,892,714
|
1,846,112
|
||||||
Treasury stock, at cost (March 31, 2024 - 56,956,069 shares; December 31, 2023 - 54,360,304 shares)
|
(740,447
|
)
|
(697,406
|
)
|
||||
Accumulated other comprehensive loss
|
(654,235
|
)
|
(639,170
|
)
|
||||
Total stockholdersʼ equity
|
1,479,717
|
1,497,609
|
||||||
Total liabilities and stockholdersʼ equity
|
$
|
18,890,961
|
$
|
18,909,549
|
Quarter Ended
|
||||||||||||
March 31, 2024
|
December 31, 2023
|
March 31, 2023
|
||||||||||
(In thousands, except per share information)
|
||||||||||||
Net interest income:
|
||||||||||||
Interest income
|
$
|
268,505
|
$
|
265,481
|
$
|
242,396
|
||||||
Interest expense
|
71,985
|
68,799
|
41,511
|
|||||||||
Net interest income
|
196,520
|
196,682
|
200,885
|
|||||||||
Provision for credit losses - expense (benefit):
|
||||||||||||
Loans
|
12,917
|
18,975
|
16,256
|
|||||||||
Unfunded loan commitments
|
281
|
(123
|
)
|
(105
|
)
|
|||||||
Debt securities
|
(1,031
|
)
|
(40
|
)
|
(649
|
)
|
||||||
Provision for credit losses - expense
|
12,167
|
18,812
|
15,502
|
|||||||||
Net interest income after provision for credit losses
|
184,353
|
177,870
|
185,383
|
|||||||||
Non-interest income:
|
||||||||||||
Service charges and fees on deposit accounts
|
9,662
|
9,662
|
9,541
|
|||||||||
Mortgage banking activities
|
2,882
|
2,094
|
2,812
|
|||||||||
Card and processing income
|
11,312
|
11,015
|
10,918
|
|||||||||
Other non-interest income
|
10,127
|
10,838
|
9,247
|
|||||||||
Total non-interest income
|
33,983
|
33,609
|
32,518
|
|||||||||
Non-interest expenses:
|
||||||||||||
Employees’ compensation and benefits
|
59,506
|
55,584
|
56,422
|
|||||||||
Occupancy and equipment
|
21,381
|
21,847
|
21,186
|
|||||||||
Business promotion
|
3,842
|
6,725
|
3,975
|
|||||||||
Professional service fees
|
12,676
|
11,250
|
11,973
|
|||||||||
Taxes, other than income taxes
|
5,129
|
5,535
|
5,112
|
|||||||||
FDIC deposit insurance
|
3,102
|
8,454
|
2,133
|
|||||||||
Net gain on OREO operations
|
(1,452
|
)
|
(1,005
|
)
|
(1,996
|
)
|
||||||
Credit and debit card processing expenses
|
5,751
|
7,360
|
5,318
|
|||||||||
Other non-interest expenses
|
10,988
|
10,855
|
11,145
|
|||||||||
Total non-interest expenses
|
120,923
|
126,605
|
115,268
|
|||||||||
Income before income taxes
|
97,413
|
84,874
|
102,633
|
|||||||||
Income tax expense
|
23,955
|
5,385
|
31,935
|
|||||||||
Net income
|
$
|
73,458
|
$
|
79,489
|
$
|
70,698
|
||||||
Net income attributable to common stockholders
|
$
|
73,458
|
$
|
79,489
|
$
|
70,698
|
||||||
Earnings per common share:
|
||||||||||||
Basic
|
$
|
0.44
|
$
|
0.47
|
$
|
0.39
|
||||||
Diluted
|
$
|
0.44
|
$
|
0.46
|
$
|
0.39
|
Quarter Ended
|
||||||||||||
March 31, 2024
|
December 31, 2023
|
March 31, 2023
|
||||||||||
(Shares in thousands)
|
||||||||||||
Per Common Share Results:
|
||||||||||||
Net earnings per share - basic
|
$
|
0.44
|
$
|
0.47
|
$
|
0.39
|
||||||
Net earnings per share - diluted
|
$
|
0.44
|
$
|
0.46
|
$
|
0.39
|
||||||
Cash dividends declared
|
$
|
0.16
|
$
|
0.14
|
$
|
0.14
|
||||||
Average shares outstanding
|
167,142
|
170,624
|
180,215
|
|||||||||
Average shares outstanding diluted
|
167,798
|
171,351
|
181,236
|
|||||||||
Book value per common share
|
$
|
8.88
|
$
|
8.85
|
$
|
7.82
|
||||||
Tangible book value per common share (1)
|
$
|
8.58
|
$
|
8.54
|
$
|
7.50
|
||||||
Common Stock Price: End of period
|
$
|
17.54
|
$
|
16.45
|
$
|
11.42
|
||||||
Selected Financial Ratios (In Percent):
|
||||||||||||
Profitability:
|
||||||||||||
Return on Average Assets
|
1.56
|
1.70
|
1.55
|
|||||||||
Return on Average Common Equity
|
19.56
|
23.69
|
21.00
|
|||||||||
Interest Rate Spread (2)
|
3.35
|
3.34
|
3.84
|
|||||||||
Net Interest Margin (2)
|
4.27
|
4.23
|
4.48
|
|||||||||
Efficiency ratio (3)
|
52.46
|
54.98
|
49.39
|
|||||||||
Capital and Other:
|
||||||||||||
Average Total Equity to Average Total Assets
|
7.99
|
7.16
|
7.36
|
|||||||||
Total capital
|
18.36
|
18.57
|
19.02
|
|||||||||
Common equity Tier 1 capital
|
15.90
|
16.10
|
16.33
|
|||||||||
Tier 1 capital
|
15.90
|
16.10
|
16.33
|
|||||||||
Leverage
|
10.65
|
10.78
|
10.57
|
|||||||||
Tangible common equity ratio (1)
|
7.59
|
7.67
|
7.12
|
|||||||||
Dividend payout ratio
|
36.41
|
30.05
|
35.69
|
|||||||||
Basic liquidity ratio (4)
|
19.60
|
19.82
|
21.42
|
|||||||||
Core liquidity ratio (5)
|
14.45
|
14.93
|
16.77
|
|||||||||
Loan to deposit ratio
|
74.48
|
73.65
|
72.22
|
|||||||||
Uninsured deposits, excluding fully collateralized deposits, to total deposits (6)
|
27.93
|
28.13
|
35.68
|
|||||||||
Asset Quality:
|
||||||||||||
|
||||||||||||
Allowance for credit losses for loans and finance leases to total loans
held for investment |
2.14
|
2.15
|
2.29
|
|||||||||
Net charge-offs (annualized) to average loans outstanding
|
0.37
|
0.69
|
0.46
|
|||||||||
Provision for credit losses for loans and finance leases
to net charge-offs |
115.66
|
91.46
|
122.51
|
|||||||||
Non-performing assets to total assets
|
0.69
|
0.67
|
0.68
|
|||||||||
Nonaccrual loans held for investment to total loans held for investment
|
0.76
|
0.69
|
0.77
|
|||||||||
Allowance for credit losses for loans and finance leases to total nonaccrual loans
held for investment |
283.54
|
312.81
|
297.91
|
|||||||||
Allowance for credit losses for loans and finance leases to total nonaccrual loans
held for investment, excluding residential estate loans |
437.28
|
508.75
|
503.62
|
(1) |
Non-GAAP financial measures (as defined above). Refer to Non-GAAP Disclosures, Statement of Financial Condition
above and Table 4 below for additional information about the components and a reconciliation of these measures.
|
(2) |
On a tax-equivalent basis and excluding changes in the fair value of derivative instruments (non-GAAP financial measure). Refer to Non-GAAP Disclosures
above 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.
|
Quarter Ended
|
||||||||||||
(Dollars in thousands)
|
March 31, 2024
|
December 31, 2023
|
March 31, 2023
|
|||||||||
Net Interest Income
|
||||||||||||
Interest income - GAAP
|
$
|
268,505
|
$
|
265,481
|
$
|
242,396
|
||||||
Unrealized (gain) loss on derivative instruments
|
(2
|
)
|
8
|
6
|
||||||||
Interest income excluding valuations - non-GAAP
|
268,503
|
265,489
|
242,402
|
|||||||||
Tax-equivalent adjustment
|
4,813
|
4,262
|
6,347
|
|||||||||
Interest income on a tax-equivalent basis and excluding valuations - non-GAAP
|
$
|
273,316
|
$
|
269,751
|
$
|
248,749
|
||||||
Interest expense - GAAP
|
$
|
71,985
|
$
|
68,799
|
$
|
41,511
|
||||||
Net interest income - GAAP
|
$
|
196,520
|
$
|
196,682
|
$
|
200,885
|
||||||
Net interest income excluding valuations - non-GAAP
|
$
|
196,518
|
$
|
196,690
|
$
|
200,891
|
||||||
Net interest income on a tax-equivalent basis and excluding valuations - non-GAAP
|
$
|
201,331
|
$
|
200,952
|
$
|
207,238
|
||||||
Average Balances
|
||||||||||||
Loans and leases
|
$
|
12,207,840
|
$
|
12,004,881
|
$
|
11,519,399
|
||||||
Total securities, other short-term investments and interest-bearing cash balances
|
6,720,395
|
6,835,407
|
7,232,347
|
|||||||||
Average Interest-Earning Assets
|
$
|
18,928,235
|
$
|
18,840,288
|
$
|
18,751,746
|
||||||
Average Interest-Bearing Liabilities
|
$
|
11,838,159
|
$
|
11,665,459
|
$
|
10,957,892
|
||||||
Average Assets (1)
|
$
|
18,858,299
|
$
|
18,581,625
|
$
|
18,557,156
|
||||||
Average Non-Interest-Bearing Deposits
|
$
|
5,308,531
|
$
|
5,384,264
|
$
|
5,999,066
|
||||||
Average Yield/Rate
|
||||||||||||
Average yield on interest-earning assets - GAAP
|
5.69
|
%
|
5.59
|
%
|
5.24
|
%
|
||||||
Average rate on interest-bearing liabilities - GAAP
|
2.44
|
%
|
2.34
|
%
|
1.54
|
%
|
||||||
Net interest spread - GAAP
|
3.25
|
%
|
3.25
|
%
|
3.70
|
%
|
||||||
Net interest margin - GAAP
|
4.16
|
%
|
4.14
|
%
|
4.34
|
%
|
||||||
Average yield on interest-earning assets excluding valuations - non-GAAP
|
5.69
|
%
|
5.59
|
%
|
5.24
|
%
|
||||||
Average rate on interest-bearing liabilities
|
2.44
|
%
|
2.34
|
%
|
1.54
|
%
|
||||||
Net interest spread excluding valuations - non-GAAP
|
3.25
|
%
|
3.25
|
%
|
3.70
|
%
|
||||||
Net interest margin excluding valuations - non-GAAP
|
4.16
|
%
|
4.14
|
%
|
4.34
|
%
|
||||||
Average yield on interest-earning assets on a tax-equivalent basis
|
||||||||||||
and excluding valuations - non-GAAP
|
5.79
|
%
|
5.68
|
%
|
5.38
|
%
|
||||||
Average rate on interest-bearing liabilities
|
2.44
|
%
|
2.34
|
%
|
1.54
|
%
|
||||||
Net interest spread on a tax-equivalent basis and excluding valuations - non-GAAP
|
3.35
|
%
|
3.34
|
%
|
3.84
|
%
|
||||||
Net interest margin on a tax-equivalent basis and excluding valuations - non-GAAP
|
4.27
|
%
|
4.23
|
%
|
4.48
|
%
|
(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.
|
Average Volume
|
Interest income (1) / expense
|
Average Rate (1)
|
||||||||||||||||||||||||||||||||||
Quarter Ended
|
March 31,
|
December 31,
|
March 31,
|
March 31,
|
December 31,
|
March 31,
|
March 31,
|
December 31,
|
March 31,
|
|||||||||||||||||||||||||||
2024
|
2023
|
2023
|
2024
|
2023
|
2023
|
2024
|
2023
|
2023
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
Money market and other short-term investments
|
$
|
533,747
|
$
|
503,293
|
$
|
404,249
|
$
|
7,254
|
$
|
6,933
|
$
|
4,650
|
5.45
|
%
|
5.47
|
%
|
4.67
|
%
|
||||||||||||||||||
Government obligations (2)
|
2,684,169
|
2,738,478
|
2,909,976
|
9,053
|
9,161
|
10,765
|
1.35
|
%
|
1.33
|
%
|
1.50
|
%
|
||||||||||||||||||||||||
MBS
|
3,451,293
|
3,543,423
|
3,864,145
|
15,238
|
15,481
|
19,396
|
1.77
|
%
|
1.73
|
%
|
2.04
|
%
|
||||||||||||||||||||||||
FHLB stock
|
34,635
|
34,745
|
40,838
|
854
|
830
|
421
|
9.89
|
%
|
9.48
|
%
|
4.18
|
%
|
||||||||||||||||||||||||
Other investments
|
16,551
|
15,468
|
13,139
|
66
|
232
|
139
|
1.60
|
%
|
5.95
|
%
|
4.29
|
%
|
||||||||||||||||||||||||
Total investments (3)
|
6,720,395
|
6,835,407
|
7,232,347
|
32,465
|
32,637
|
35,371
|
1.94
|
%
|
1.89
|
%
|
1.98
|
%
|
||||||||||||||||||||||||
Residential mortgage loans
|
2,810,304
|
2,812,428
|
2,835,240
|
40,473
|
40,711
|
39,794
|
5.78
|
%
|
5.74
|
%
|
5.69
|
%
|
||||||||||||||||||||||||
Construction loans
|
218,854
|
211,641
|
146,041
|
4,537
|
4,295
|
2,676
|
8.32
|
%
|
8.05
|
%
|
7.43
|
%
|
||||||||||||||||||||||||
C&I and commercial mortgage loans
|
5,504,782
|
5,355,145
|
5,167,727
|
99,074
|
96,299
|
85,885
|
7.22
|
%
|
7.13
|
%
|
6.74
|
%
|
||||||||||||||||||||||||
Finance leases
|
863,685
|
844,780
|
735,500
|
17,127
|
16,584
|
13,809
|
7.95
|
%
|
7.79
|
%
|
7.61
|
%
|
||||||||||||||||||||||||
Consumer loans
|
2,810,215
|
2,780,887
|
2,634,891
|
79,640
|
79,225
|
71,214
|
11.37
|
%
|
11.30
|
%
|
10.96
|
%
|
||||||||||||||||||||||||
Total loans (4) (5)
|
12,207,840
|
12,004,881
|
11,519,399
|
240,851
|
237,114
|
213,378
|
7.91
|
%
|
7.84
|
%
|
7.51
|
%
|
||||||||||||||||||||||||
Total interest-earning assets
|
$
|
18,928,235
|
$
|
18,840,288
|
$
|
18,751,746
|
$
|
273,316
|
$
|
269,751
|
$
|
248,749
|
5.79
|
%
|
5.68
|
%
|
5.38
|
%
|
||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
Time deposits
|
$
|
2,892,355
|
$
|
2,792,843
|
$
|
2,342,360
|
$
|
24,410
|
$
|
22,304
|
$
|
10,782
|
3.39
|
%
|
3.17
|
%
|
1.87
|
%
|
||||||||||||||||||
Brokered CDs
|
749,760
|
572,105
|
166,698
|
9,680
|
7,452
|
1,587
|
5.18
|
%
|
5.17
|
%
|
3.86
|
%
|
||||||||||||||||||||||||
Other interest-bearing deposits
|
7,534,344
|
7,635,223
|
7,544,901
|
28,935
|
29,918
|
17,516
|
1.54
|
%
|
1.55
|
%
|
0.94
|
%
|
||||||||||||||||||||||||
Securities sold under agreements to repurchase
|
-
|
925
|
91,004
|
-
|
13
|
1,069
|
0.00
|
%
|
5.58
|
%
|
4.76
|
%
|
||||||||||||||||||||||||
Advances from the FHLB
|
500,000
|
502,446
|
629,167
|
5,610
|
5,709
|
7,176
|
4.50
|
%
|
4.51
|
%
|
4.63
|
%
|
||||||||||||||||||||||||
Other borrowings
|
161,700
|
161,917
|
183,762
|
3,350
|
3,403
|
3,381
|
8.31
|
%
|
8.34
|
%
|
7.46
|
%
|
||||||||||||||||||||||||
Total interest-bearing liabilities
|
$
|
11,838,159
|
$
|
11,665,459
|
$
|
10,957,892
|
$
|
71,985
|
$
|
68,799
|
$
|
41,511
|
2.44
|
%
|
2.34
|
%
|
1.54
|
%
|
||||||||||||||||||
Net interest income
|
$
|
201,331
|
$
|
200,952
|
$
|
207,238
|
||||||||||||||||||||||||||||||
Interest rate spread
|
3.35
|
%
|
3.34
|
%
|
3.84
|
%
|
||||||||||||||||||||||||||||||
Net interest margin
|
4.27
|
%
|
4.23
|
%
|
4.48
|
%
|
(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 Puerto Rico statutory tax rate of 37.5% and adding to
it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments are excluded from interest income because the
changes in valuation do not affect interest paid or received. Refer to Non-GAAP Disclosures and Table 4 above for additional information and a reconciliation of these measures.
|
(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 $3.2 million, $3.0 million, and $3.1 million, for the quarters ended March 31, 2024, December 31, 2023, and March 31, 2023, respectively, of income from
prepayment penalties and late fees related to the Corporation’s loan portfolio.
|
As of March 31, 2024
|
||||||||||||||||
Puerto Rico
|
Virgin Islands
|
United States
|
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
|
||||||||||||||||
Puerto Rico
|
Virgin Islands
|
United States
|
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
|
As of March 31, 2024
|
||||||||||||||||
(In thousands)
|
Puerto Rico
|
Virgin Islands
|
United States
|
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)
|
Puerto Rico
|
Virgin Islands
|
United States
|
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 $8.6 million as of March 31, 2024 (December 31, 2023 - $8.3 million).
|
(3) |
These include rebooked loans, which were previously pooled into GNMA securities, amounting to $8.8 million as of March 31, 2024 (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.
|
Quarter Ended
|
||||||||||||||||
March 31,
|
December 31,
|
March 31,
|
||||||||||||||
2024
|
2023
|
2023
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Allowance for credit losses on loans and finance leases, beginning of period
|
$
|
261,843
|
$
|
263,615
|
$
|
260,464
|
||||||||||
Impact of adoption of ASU 2022-02
|
-
|
-
|
2,116
|
|||||||||||||
Provision for credit losses on loans and finance leases expense
|
12,917
|
18,975
|
16,256
|
|||||||||||||
Net (charge-offs) recoveries of loans and finance leases:
|
||||||||||||||||
Residential mortgage
|
(244
|
)
|
287
|
(486
|
)
|
|||||||||||
Construction
|
10
|
(4
|
)
|
63
|
||||||||||||
Commercial mortgage
|
40
|
(539
|
)
|
150
|
||||||||||||
Commercial and Industrial
|
4,660
|
(1
|
)
|
(28
|
)
|
|||||||||||
Consumer loans and finance leases
|
(15,634
|
)
|
(1)
|
(20,490
|
)
|
(12,968
|
)
|
|||||||||
Net charge-offs
|
(11,168
|
)
|
(1)
|
(20,747
|
)
|
(13,269
|
)
|
|||||||||
Allowance for credit losses on loans and finance leases, end of period
|
$
|
263,592
|
$
|
261,843
|
$
|
265,567
|
||||||||||
Allowance for credit losses on loans and finance leases to period end total
loans held for investment
|
2.14
|
%
|
2.15
|
%
|
2.29
|
%
|
||||||||||
Net charge-offs (annualized) to average loans outstanding during the period
|
0.37
|
%
|
0.69
|
%
|
0.46
|
%
|
||||||||||
Provision for credit losses on loans and finance leases to net charge-offs during the period
|
1.16
|
x
|
0.91
|
x
|
1.23
|
x
|
(1) |
For the quarter ended March 31, 2024, includes a recovery totaling $9.5 million associated with the bulk sale of fully charged-off consumer loans.
|
Quarter Ended
|
|||||
March 31, 2024
|
December 31, 2023
|
March 31, 2023
|
|||
Residential mortgage
|
0.03%
|
-0.04%
|
0.07%
|
||
Construction
|
-0.02%
|
0.01%
|
-0.17%
|
||
Commercial mortgage
|
-0.01%
|
0.09%
|
-0.03%
|
||
Commercial and Industrial
|
-0.59%
|
0.00%
|
0.00%
|
||
Consumer loans and finance leases
|
1.70%
|
(1)
|
2.26%
|
1.54%
|
|
Total loans
|
0.37%
|
(1)
|
0.69%
|
0.46%
|
(1) |
The recovery associated with the aforementioned bulk sale reduced the consumer loans and finance leases and total net charge-offs to related average loans for the quarter ended March 31,
2024 by 104 basis points and 31 basis points, respectively.
|
As of
|
||||||||
March 31, 2024
|
December 31, 2023
|
|||||||
(In thousands)
|
||||||||
Time deposits
|
$
|
2,961,526
|
$
|
2,833,730
|
||||
Interest-bearing saving and checking accounts
|
7,511,973
|
7,534,800
|
||||||
Non-interest-bearing deposits
|
5,346,326
|
5,404,121
|
||||||
Total deposits, excluding brokered CDs (1)
|
15,819,825
|
15,772,651
|
||||||
Brokered CDs
|
725,686
|
783,334
|
||||||
Total deposits
|
$
|
16,545,511
|
$
|
16,555,985
|
||||
Total deposits, excluding brokered CDs and government deposits
|
$
|
12,574,900
|
$
|
12,600,719
|
(1) |
As of each March 31, 2024 and December 31, 2023, government deposits amounted to $3.2 billion.
|