33 slides from First Bancorp. New's investor presentation, Sep 2, 2008
Slide 1: Investors Presentation September 2008
INVESTORS PRESENTATION September 2008
Slide 2: 60 years of steady growth and accomplishments
2 60 years of steady growth and accomplishments Founded in 1948 Headquartered in San Juan A unique, well diversified operation with over 550,000 retail and commercial customers 2nd largest financial holding company in Puerto Rico with total assets of $18.8 billion as of June 30, 2008 30th largest ba
Slide 3: Dual focus on resolving legal and accounting matters while achieving business results
3 Dual focus on resolving legal and accounting matters while achieving business results September 2006: Filed restated financials for the years 2000 to 2004 with the SEC January 2007: Implemented SFAS 157 and SFAS 159 February 2007: Filed 2005 financial statements with the SEC March 2007: Reached ag
Slide 4: Organized within a Bank Holding Company structure
4 Organized within a Bank Holding Company structure First BanCorp (FBP) FirstBank Puerto Rico First Express USVI FirstBank Insurance Agency First Insurance Agency USVI Money Express FirstMortgage First Leasing and Rental FirstBank Overseas (IBE) First BanCorp Overseas Branch (IBE) FirstBank Miami Co
Slide 5: A well diversified operation with multiple businesses across several markets
5 A well diversified operation with multiple businesses across several markets *Provided through alliance with UBS, the largest player in the Puerto Rico market
Slide 6: A well diversified operation with multiple businesses across several markets
6 A well diversified operation with multiple businesses across several markets Assets by Line of Business Total Assets - $18,828 million As of June 30, 2008 Limited exposure to US residential mortgage market with only 3.2% of total loan portfolio Assets by Geography Consumer & Residential 28%, $443
Slide 7: Key market characteristics - Puerto Rico
7 Key market characteristics - Puerto Rico Economic conditions The Island has been in a recession for the last 28 months Unemployment and bankruptcies have increased Consumers have been negatively impacted by increases in prices Auto and housing industry volumes have dropped significantly Federal an
Slide 8: Key market characteristics - Eastern Caribbean
8 Key market characteristics - Eastern Caribbean Economic conditions Tourism continues to be the main economic driver for the USVI Stable economic indicators and trends Government is active in initiatives to increase foreign investments FirstBank is a dominant player in this market Stable asset qual
Slide 9: Key market characteristics - Florida
9 Key market characteristics - Florida Economic conditions Very challenging real estate market conditions Increased foreclosures Deteriorated absorption rates Decreasing property values In Florida, actions were taken early in 2006 in our loan production office to reduce exposure to construction and
Slide 10: Outperformed the industry and increased or sustained share in our primary market
10 Outperformed the industry and increased or sustained share in our primary market Industry FirstBank ($ in millions) # / $ vs. June 07 vs. June 07 Share Rank Branches1 557 - - 9% 4 Deposits2 $37,263 3.4% 19.8% 8% 3 Commercial Loans3 $12,974 -4.8% 1.2% 21% 2 Construction Loans $6,283 11.0% 23.0% 12
Slide 11: Successful core deposit growth
11 Successful core deposit growth Successfully deploying our One Stop Shop strategy Leveraging the reduced competitive environment 2008 v. 2007 Total Deposits (net of brokered CDs) - $4,428 million 19% 21% 9% ($ in millions) 13%
Slide 12: Targeted loan production
12 Targeted loan production ($ in millions) Corporation is actively managing loan production opportunities Total Loan Production - $2,065 million
Slide 13: Consistent loan growth in selected segments
13 Consistent loan growth in selected segments Total Loan Portfolio - $12,250 million Franchise consistently demonstrates ability to grow in selected segments *includes Finance Leases ** Loans to local Financial Institutions ($ in millions) 2008 v. 2007 - - 5% - - 4% 7% 6%
Slide 14: Proactively managing asset quality during a deteriorating economic cycle
14 Proactively managing asset quality during a deteriorating economic cycle Non Performing Assets ($ in millions) Stricter credit policies implemented since 2006 showing improving trends in 2008 in the consumer portfolios Reinforced workout & loss mitigation programs to manage increases in construct
Slide 15: Proactively managing asset quality
15 Proactively managing asset quality Increase in NPAs has been experiencing a decelerating trend during 2008 The Corporation will continue to increase reserves for loan losses as market conditions demand Non Performing Assets (NPA) Allowance for Loan & Lease Losses (ALLL) ($ in millions)
Slide 16: Proactively managing asset quality: allowance ratios
16 Proactively managing asset quality Allowance to Loan & Lease Losses Ratios Allowance to non performing loans showing a decreasing trend as residential mortgage loans, which represent the largest increase in NPAs since 2006, require a lower allowance The allowance to total loans showing an increas
Slide 17: Financial Performance and Capital
FINANCIAL PERFORMANCE AND CAPITAL
Slide 18: Improved profitability while strengthening provision
18 Improved profitability while strengthening provision YTD Jun 07 YTD Jun 08 Income Statement ($ 000) Net interest income 234,650 259,064 Provision for loan and lease losses 49,542 87,116 Non-interest income 26,725 41,382 Non-interest expenses 152,818 163,950 Income tax (expense) benefit (12,388) 1
Slide 19: Improving key financial metrics
19 Improving key financial metrics Net Interest Margin* Return on Average Assets Return on Average Total Common Equity Dividend Payout Ratio Efficiency Ratio *On a Tax Equivalent Basis
Slide 20: Managing a strong capital position
20 Managing a strong capital position * Not applicable to First Bancorp Approximately $345 million in excess of regulatory total capital minimum requirement
Slide 21: Treasury & Liquidity
TREASURY & LIQUIDITY
Slide 22: High grade investment portfolio
22 High grade investment portfolio Highly liquid securities portfolio Over 95% of portfolio AAA-rated No exposure to sub-prime mortgage and CDOs Easily pledgeable for financing Total Investment Portfolio - $6,086 million By Rating Distribution As of June 30, 2008 ($ in millions)
Slide 23: Strong sources of borrowings
23 Strong sources of borrowings Average Cost of Funds Interest-bearing Liabilities 3.89%* *YTD June 30, 2008
Slide 24: Liquidity
24 Liquidity *Information for FirstBank Puerto Rico including FirstBank Overseas Corp 1. Surplus: (liquid assets - short-term liabilities) + secured line of credit; 2. Subject to 6% haircut; 3. Subject to 25% haircut; 4. Subject to 50% haircut under FRB BIC Program Basic Liquidity Surplus* Jun-08 $
Slide 25: Stock Performance
STOCK PERFORMANCE
Slide 26: Stock Performance vs. Peers
26 Stock Performance FBP Stock Performance vs. Peers* YTD August 29, 2008 *Full service commercial banks in PR Source: Bloomberg
Slide 27: Stock Performance: Price to Book Value
27 Stock Performance Source: Bloomberg, Quarterly information provided by FBP First BanCorp - Market Price to Book Value Ratio P/B multiple at lowest level in last 12 yrs.
Slide 28: Future Focus
FUTURE FOCUS
Slide 29: Enhancing shareholder value through strategic growth
29 Enhancing shareholder value through strategic growth Wholesale Banking Retail Banking Consumer Lending Mortgage Lending Insurance Solidify leadership while capitalizing on market opportunities with strong emphasis on asset quality Grow deposits Offer additional fee based services Increase penetra
Slide 30: Enhancing shareholder value through strategic growth: key strategic priorities
30 Enhancing shareholder value through strategic growth Asset quality improvement Managing revenue and expenses through formal business performance improvement project Phase 1: $10 MM in identified benefits included in 2008 budget Phase 2: Internal target of $35 MM in additional benefits for 2009-20
Slide 31: Disclaimer
DISCLAIMER
Slide 32: Disclaimer
32 Disclaimer This presentation has been prepared by First BanCorp to provide current information, including preliminary financial information, about its operations and includes information that has not been included in any report previously filed with the Securities and Exchange Commission. The fin
Slide 33: Investors Presentation September 2008
INVESTORS PRESENTATION September 2008