First Bancorp. New · NYSE:FBP
First Bancorp. New — First Bancorp — Q4 2015 Earnings Presentation
33 slides from First Bancorp. New's earnings presentation, Feb 10, 2016
Slide 1: First BanCorp Investor Presentation February 2016
First BanCorp Investor Presentation February 2016 Exhibit 99.1
Slide 2: Forward-Looking Statements
This presentation may contain “forward-looking statements” concerning the Corporation’s future economic performance. The words or phrases “expect,” “anticipate,” “look forward,” “should,” “believes” and similar statements of a future or forward-looking nature that reflect our current views with resp
Slide 3: Investment Thesis
Investment Thesis A turn-around story underscored by steady improvement and organic market share gains in the core franchise, operating within a challenging macro environment. Strong, tenured leadership team with a commitment to increasing shareholder value, while fulfilling our vision to be the mos
Slide 4: Franchise Overview
Franchise Overview Founded in 1948 Headquartered in San Juan, Puerto Rico with operations in PR, Eastern Caribbean (Virgin Islands) and Florida ~2,660 FTE employees(1) 2nd largest financial holding company in Puerto Rico with attractive business mix and substantial loan market share Florida presence
Slide 5: Loan Composition and Geographic Diversification
2015 Consumer Loan Composition 2015 Commercial Loan Composition Our well-diversified business model within commercial, consumer and residential across three unique regions allows us to be agile when responding to growth opportunities. Line of business diversification: Commercial represents 44%, resi
Slide 6: Diversified business model across all regions
Diversified business model across all regions Franchise Overview Consumer Banking Mortgage Banking Commercial Lending Focus on small to middle market commercial and corporate borrowers across FBP’s footprint. Complimented by full suite of deposit and business products. Balanced risk/return profile t
Slide 7: Well positioned Puerto Rico institution in a consolidating market
Franchise Overview Well positioned Puerto Rico institution in a consolidating market Source: PR Market Share Report prepared with data provided by the Commissioner of Financial Institutions of Puerto Rico as of 9/30/15. 1) Puerto Rico only. 2) Calculated as institution bank branches within a mile of
Slide 8: Executing for Earnings Growth
Executing for Earnings Growth Puerto Rico Market Share Puerto Rico Opportunities for ongoing market share gains Largest opportunity on deposit products, electronic banking & transaction services Growth in selected loan products for balanced risk/return to manage risk concentration and diversify inco
Slide 9: Fiscal Year 2015 Highlights
Fiscal Year 2015 Highlights During 2015 the Corporation achieved significant milestones in its successful turnaround strategy: Recognized an income tax benefit of $302.9 million in the Q4 2014 related to the reversal of a significant portion of the valuation allowance recorded against the deferred t
Slide 10: Total Deposit Composition and Core Deposits
Total Deposit Composition (%) Core Deposits(1) ($ millions) 1) Core deposits are total deposits excluding brokered CDs. $5,108 $6,176 $6,490 $6,738 Non-brokered deposits, excluding government deposits, increased $471 million compared to 2014. Reliance on brokered deposits declined $790 million in 20
Slide 11: Loan Originations and Loan Portfolio
Loan Originations(1) ($ millions) Loan Portfolio ($ millions) Business Model Driven by Strong Origination Capabilities $9,339 $9,567 $880 $891 $777 Residential Mortgage Consumer & Finance Leases Construction Commercial Loans HFS $9,298 $866 $9,337 $854 $9,310 Fourth Quarter: Commercial portfolio rem
Slide 12: Proactively Managing Asset Quality
Proactively Managing Asset Quality NPA Composition 1) Net Carrying Amount = % of carrying value net of reserves and accumulated charge-offs. Residential Consumer Construction Commercial Loans HFS REO & Repo $610 $717 $754 $644 $617 Non-Performing Assets ($ millions) Total non-performing loans, inclu
Slide 13: Proactively Managing Asset Quality: Quarterly Migration Trends
Proactively Managing Asset Quality Quarterly Migration Trends
Slide 14: Puerto Rico Government Exposure
($ in millions) Puerto Rico Government Exposure Total outstanding exposure to the Puerto Rico Government was $382 million with a book value of $361 million as of 4Q 2015, down from $371 million as of 3Q 2015. Investment portfolio outstanding principal of $65.6 million, being carried on books at $28.
Slide 15: Fourth Quarter Profitability and Asset Quality Highlights
Profitability Net income of $15.0 million, or $0.07 per diluted share, compared to $14.8 million in 3Q 2015. Net interest income & non interest income (excluding one time items) increased compared to 3Q 2015. Adjusted pre-tax, pre-provision income of $50.6 million, compared to $50.5 million for 3Q 2
Slide 16: Stable Core Performance in Challenging Environment
Stable Core Performance in Challenging Environment Pre-tax pre-provision income of $50.6 million1 average 4 quarters of $51 million. Replacement of NPLs with performing loans should reduce provisioning needs. Future earnings potential with a reduction in costs associated with managing NPLs and OREO.
Slide 17: Select Financial Information: Fiscal Year 2015 Highlights
($ in thousands, except per share data) Select Financial Information Fiscal Year 2015 Highlights
Slide 18: Select Financial Information: Non-GAAP Adjusted Pre-tax Income
($ in millions) Select Financial Information Non-GAAP Adjusted Pre-tax Income
Slide 19: Earnings Continue to Drive Capital Formation
Earnings Continue to Drive Capital Formation Capital Ratios (%) Total stockholders’ equity amounted to $1.7 billion as of December 31, 2015, a decrease of $6.8 million from September 30, 2015, mainly driven by a decrease of $23.1 million in other comprehensive income mainly attributable to the $20.5
Slide 20: Stronger Franchise: Proven Success Implementing Strategic Plan
Stronger Franchise: Proven Success Implementing Strategic Plan Our franchise has never been stronger and is poised to increase shareholder value navigating through fiscal and economic challenges. Strong, tenured leadership team with exceptional track record of executing strategic plan during challen
Slide 21: Exhibits
Exhibits
Slide 22: Exhibits
Exhibits Page Stock Profile…………………………………………………………………………………………………………….23 History …………………………………………………………………………………………………………………….24 4Q Earnings Presentation…………………………………………………………………………………………25 Non-GAAP Reconciliations……………………………………………………………………………………….32
Slide 23: Stock Profile
Stock Profile Trading Symbol: FBP Exchange: NYSE Share Price (2/9/16): $2.29 Shares Outstanding (as of December 31, 2015): 215,088,698 Market Capitalization (2/9/16): $493 million 1 Yr. Average Daily Volume: 1,051,654 Price (2/9/16) to Tangible Book (12/31/15): 0.31x Includes the U.S. Treasury warra
Slide 24: History
June 2010: Written Agreement with the FED and Consent Order with FDIC July 2010: The U.S. Treasury exchanged TARP for convertible preferred August 2010: Exchange of 89% Perpetual Preferred Stock for Common Feb 2011: Sale of non-performing loans with book value of $269 million Feb-April 2011: Sale of
Slide 25: Fourth Quarter Financial Highlights
Results of Operations: Fourth Quarter Financial Highlights ($ in thousands, except per share data) Select Financial Information
Slide 26: Key Highlights: Net Interest Income
Key Highlights Net Interest Income ($ millions) Net interest income increased $0.3 million in 4Q 2015. This increase was mainly due to: A $1.5 million increase in interest income on securities driven by lower prepayments; and A $1.3 million increase in interest income on commercial and construction
Slide 27: Key Highlights: Cost of Deposits
Key Highlights Cost of Deposits (%) Cost of total deposits, excluding brokered CDs, increased 1 basis point to 0.62%. The average rate paid on non-brokered interest-bearing deposits increased by 1 basis point to 0.75% during the 4Q. Brokered CDs declined by $170.6 million during 4Q 2015. Results of
Slide 28: Key Highlights: Non-Interest Income
Key Highlights Non-Interest Income* ($ millions) * Non interest income excludes equity losses of unconsolidated entities, OTTI, HFS bulk sale impact and bargain purchase gain. Excluding the $3.0 million OTTI charge on Puerto Rico Government debt securities and the $7.0 million pre-tax gain on sale o
Slide 29: Results of Operations: Operating Expenses
Results of Operations: Operating Expenses Non-interest expenses increased by $2.7 million in 4Q 2015 to $96.0 million. Excluding non-recurring expense of 2.2 million related to the voluntary early retirement program reflected in employees’ compensation and benefits, non-interest expenses increased b
Slide 30: Key Highlights: Net Charge-Offs
Key Highlights Net Charge-Offs ($ millions) Total net charge-offs for 3Q 2015 were $22 million, or 0.95% of average loans, compared to $24 million in 3Q 2015. Allowance coverage ratio of 2.60% as of December 31, 2015 compared to 2.46% as of September 30, 2015. The ratio of the allowance to NPLs held
Slide 31: Results of Operations: Key Margin Drivers
Results of Operations: Key Margin Drivers Q4 vs. Q3 Change in Average Interest Earning Assets & Interest Bearing Liabilities * On a tax equivalent basis and excluding valuations
Slide 32: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of Presentation Use of Non-GAAP Financial Measures This presentation may contain non-GAAP financial measures. Non-GAAP financial measures are set forth when management believes they will be helpful to an understanding of the Corporation’s results of operation
Slide 33: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of Presentation Use of Non-GAAP Financial Measures This presentation may contain non-GAAP financial measures. Non-GAAP financial measures are set forth when management believes they will be helpful to an understanding of the Corporation’s results of operation