34 slides from First Bancorp. New's earnings presentation, Sep 17, 2009
Slide 1: Second Quarter 2009 Earnings Review
September 17, 2009 Second Quarter 2009 Earnings Review
Slide 2: Disclaimer
2 Disclaimer This slide 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 expressions are meant to identify "forward-looking statements" within
Slide 3: Agenda
3 Economic Outlook Second Quarter 2009 Highlights Summary & Business Overview Asset Quality Financial Performance & Capital Treasury & Liquidity Future Focus Agenda
Slide 4: Economic Outlook
Economic Outlook SS
Slide 5: Difficult Economic Environment In Both The United States And Puerto Rico
5 Difficult Economic Environment In Both The United States And Puerto Rico General economic environment has deteriorated sharply The current U.S. recession, widely expected to be the longest and deepest of any since the Great Depression, is starting to show early signs of a turnaround. Continued wea
Slide 6: Puerto Rico Will Receive Funds Through The Federal Stimulus And Activate Local Program
6 Puerto Rico Will Receive Funds Through The Federal Stimulus And Activate Local Program Puerto Rico Economic Outlook (cont.) The unemployment rate has risen steadily in recent months, to 15.2% as of June of 2009. - Unemployment rate increased to 16.5% as of July 2009. - Approximately 8,000 governme
Slide 7: Second Quarter 2009 Highlights
Second Quarter 2009 Highlights
Slide 8: Second Quarter 2009 Highlights
8 Second Quarter 2009 Highlights Loan production of $900.4 million, down vs. prior quarter Core deposit growth of $62.7 million compared to 1Q09 Provision expense of $235.2 million Increase in total allowance for credit losses to $407.7 million Allowance for credit losses of 3.11% to total loans Net
Slide 9: Summary & Business Overview
Summary & Business Overview SS
Slide 10: A Diversified Operation With Multiple Businesses Across Several Markets
10 A Diversified Operation With Multiple Businesses Across Several Markets Assets by Line of Business As of June 30, 2009 Assets by Geography Total Assets - $20,013 million Commercial Loans 29% Consumer & Residential Loans 27% Investments & Money Market 32% Construction Loans 7% Cash & Other 5% Puer
Slide 11: Continue our focus on core deposit growth and One Stop Shop strategy
11 Continue our focus on core deposit growth and the successful deployment of our One Stop Shop strategy In last 12 months core deposits have grown 8.40% FirstBank has 10.5% share of total deposits, net of brokered, in the Puerto Rico market Total Deposits (net of brokered CDs) - $4,799 million Grow
Slide 12: Weakening loan demand across all markets and segments
12 Weakening loan demand across all markets and segments Construction loan production is a result of disbursements of ongoing commitments * Includes the $500 million loan facility to the Puerto Rico Sales & Use Tax Financing Corp. Total Loan Production - $900 million Targeted Loan Production ($ in m
Slide 13: Total Loan Portfolio - $13,136 million
13 Total Loan Portfolio - $13,136 million ($ in millions) $12,250 $12,713 $13,088 $13,533 $13,136 * Includes Finance Leases ** Loans to local Financial Institution Source - Commissioner of Financial Institutions, June 2009 Within FBP's primary market, Puerto Rico, FirstBank has the following shares
Slide 14: Diversified Loan Portfolio
14 Diversified Loan Portfolio ($ in millions) Loan portfolio by geography and category As of June 30, 2009 Puerto Rico Virgin Islands United States Total Residential real estate loans, including loans held for sale 2,801 $ 453 $ 400 $ 3,654 $ Construction 966 176 438 1,580 Commercial real estate 958
Slide 15: Actively Managing Construction Portfolio
15 Actively Managing Construction Portfolio Construction Loan Portfolio by Geography & Type of Collateral For purposes of the above table, high-rise portfolio is composed of buildings with more than 7 stories, mainly composed of two projects that represent approximately 74% of the Corporation's tota
Slide 16: Asset Quality
Asset Quality SS ee
Slide 17: Non-Performing Assets and Net Charge-offs
17 Non-Performing Assets ($ in millions) Net Charge-offs Annualized to Average Loans Increase in both non-performing assets and net charge-offs mainly attributed to construction loans originated in Florida Continued increases in non-performing assets seen in commercial, construction and residential
Slide 18: Non-performing assets by geography
18 Non-performing assets by geography (in thousands) The high levels of non-performing assets will place significant pressure on the Corporation's forward earnings power (1) Collateral pledge with Lehman Brothers Special Financing, Inc. Managing Asset Quality During A Deteriorating Economic Cycle 06
Slide 19: Non-Performing Loans to Total Loans - Puerto Rico
19 Non-Performing Loans to Total Loans (in thousands) 12.23% 16.16% 2.23% 6.51% 3.09% Puerto Rico As of June 30, 2009 *Includes Finance Leases Non-performing/loan portfolio % Managing Asset Quality During A Deteriorating Economic Cycle 2,801,139 5,088,413 965,944 10,701,260 1,845,764 342,501 157,322
Slide 20: Non-Performing Loans to Total Loans - United States
20 Non-Performing Loans to Total Loans 12.47% 79.58% 2.52% 31.72% 10.20% United States (in thousands) As of June 30, 2009 Non-performing/loan portfolio % Managing Asset Quality During A Deteriorating Economic Cycle 400,708 562,211 437,871 1,439,914 39,124 49,962 57,364 348,478 987 456,791 $0 $200,00
Slide 21: Non-Performing Loans to Total Loans - Virgin Islands
21 Non-Performing Loans to Total Loans 1.63% 1.16% 2.93% 1.75% 1.87% Virgin Islands (in thousands) As of June 30, 2009 Non-performing/loan portfolio % Managing Asset Quality During A Deteriorating Economic Cycle 452,588 994,536 176,392 252,915 112,641 7,381 4,723 2,052 3,296 17,452 $0 $200,000 $400,
Slide 22: Allowance to Loan & Lease Losses Ratios
22 Allowance to Loan & Lease Losses Ratios The allowance to total loans showing an increasing trend as the Corporation reviews and adjusts its reserve policies and as economic environmental factors change $935 million of non-performing assets have been specifically analyzed for impairment, with a re
Slide 23: Provision to Net Charge-offs
23 Provision to Net Charge-offs The Corporation will continue to take provisions as necessary in accordance with the performance of the loan portfolio Managing Asset Quality During A Deteriorating Economic Cycle 190,948 59,429 235,152 108,321 38,424 129,937 181% 155% 176% $0 $50,000 $100,000 $150,00
Slide 24: Financial Performance & Capital
Financial Performance & Capital
Slide 25: Financial Results
25 (in thousands) Financial Results Jun-09 Mar-09 Dec-08 Sep-08 Jun-08 Income Statement ($000) Net interest income 131,014 $ 121,598 $ 124,196 $ 144,621 $ 134,606 $ Provision for loan and lease losses 235,152 59,429 48,513 55,319 41,323 Non-interest income 23,415 30,053 19,390 13,871 12,002 Non-inte
Slide 26: Key Financial Metrics
26 Key Financial Metrics Net Interest Margin* Efficiency Ratio *On a Tax Equivalent Basis Excluding FDIC Special Assessment 62.16% 55.74% 55.33% 59.41% 2007 2008 Mar-09 Jun-09 56.39% 2.83% 3.20% 2.85% 2.92% 2007 2008 Mar-09 Jun-09
Slide 27: Managing Well-Capitalized Position
27 * Not applicable to First BanCorp ** Includes retained earnings Total regulatory capital composition: $827 million in net common equity **, $550.1 million in non-cumulative preferred stock, $225 million in Trust Preferred stock, $376 million cumulative preferred stock (TARP, net of discount of $2
Slide 28: Treasury & Liquidity
Treasury & Liquidity SS
Slide 29: High Grade Investment Portfolio
29 High Grade Investment Portfolio Highly liquid securities portfolio 95% of portfolio AAA-rated No exposure to sub-prime mortgage and CDOs Proactively managing portfolio prepayment risk Easily pledgeable for financing By Rating Distribution: 29 ($ in millions) Total Investment Portfolio - $6,368 mi
Slide 30: Strong Sources Of Borrowings
30 Strong Sources Of Borrowings * As of June 30, 2009 Average Cost of Funds on Interest-bearing Liabilities: 2.80%* FED Discount 0.7% Term Notes 0.1% Other Liabilities 1.3% Regular Repos 9.7% FHLB Advances 7.4% Certificates of Deposit 9.6% DDA and Savings 17.2% Structured Repos 13.3% Brokered CD's -
Slide 31: Maintaining High Liquidity
31 Maintaining High Liquidity * Information for FirstBank Puerto Rico including FirstBank Overseas Corp as of June 30, 2009 (excludes liquidity of FirstBank Florida) 1. Surplus: (liquid assets - short-term liabilities) + secured line of credit; 2. Market Value, Subject to 6% haircut; 3. Subject to 2
Slide 32: Future Focus
Future Focus SS
Slide 33: Key Management Actions for Return to Profitability
Key Management Actions for Return to Profitability Optimization of interest margin Maximize loan repricing opportunities: approximately $500 million in loans that will reprice between September 1, 2009 and December 31, 2009, with an expanded target spread of 200 basis points Maximize opportunities t
Slide 34: Contact Information
34 Contact Information First BanCorp [NYSE: FBP] Alan Cohen Senior Vice President Marketing and Public Relations Office (787) 729-8256 alan.cohen@firstbankpr.com