First Bancorp. New · NYSE:FBP
First Bancorp. New — First Bancorp — Investor Presentation (November 2019)
33 slides from First Bancorp. New's investor presentation, Nov 5, 2019
Slide 1: Investor Presentation November 2019
Investor PresentationNovember 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain “forward-looking statements” concerning First BanCorp.’s (the “Corporation”) future economic, operational and financial performance. “Forward-looking statements” include, without limitation, statements relating to the impact the Corporation ex
Slide 3: Compelling Value Proposition
Compelling Value Proposition Our business model is diverse and scalable by segment (commercial, residential and consumer) and by unique markets (Puerto Rico, Southeast Florida & Eastern Caribbean). Our equity is valued at 109% of TBV (11/1/19) compared to the SNL bank index (178% of TBV). Our capita
Slide 4: Franchise Overview
Franchise Overview Founded in Puerto Rico in 1948 Headquartered in San Juan, Puerto Rico with operations in PR, Eastern Caribbean (Virgin Islands) and Florida~2,700 FTE employees(1) 2nd largest financial holding company in Puerto Rico with attractive business mix and substantial loan market shareFlo
Slide 5: Diversified Business Model Across Regions
Diversified Business Model Across Regions Strong Capital and Operational Foundation to Support Growth 1 Originations include purchases, refinancings, and draws from existing revolving and non-revolving commitments. Consumer Banking Attractive branch network across densely populated regions in Puerto
Slide 6: Main Market Showing Signs of Economic Recovery
Main Market Showing Signs of Economic Recovery Economic activity in the aftermath of both Hurricanes Irma and Maria has recovered. Several drivers of economic activity in Puerto Rico continue to show signs of stabilization, with employment levels improving each month and gas consumption/cement sales
Slide 7: Favorable Funding Mix
1 Core deposits are total deposits excluding brokered CDs. Favorable Funding Mix Total Deposit Composition (%) Core Deposits1 ($ millions) Core deposits increased $211 million during 2019.Reliance on brokered CDs declined $73 million during 2019 and now represent 5% of total deposits.Non-interest be
Slide 8: Geographic Diverse Business Model Sustains Portfolio
Geographic Diverse Business Model Sustains Portfolio Loan Originations1 ($ millions) Loan Portfolio ($ millions) Residential Mortgage Consumer Construction Commercial Loans HFS Our island is beginning to show signs of growth and we continue relying on our regional diversification: 1 Including refina
Slide 9: Consistently Improving Core Performance Metrics
Consistently Improving Core Performance Metrics Pre-tax pre-provision income of $70.2 million; four quarter average of $69.6 millionReplacement of NPLs with performing loans has reduced provisioning needsPotential for additional loan growth opportunities; while changing the mix to higher yielding lo
Slide 10: Proactively Managing Asset Quality
Proactively Managing Asset Quality Commercial NPLs (Includes HFS) NPA Composition Residential Consumer Construction Commercial Loans HFS REO & Repo $332 $467 $523 $415 1 Net Carrying Value = % of unpaid principal balance net of reserves and accumulated charge-offs. $384 Non-Performing Assets ($ mill
Slide 11: Earnings Continue to Drive Significant Capital Formation
Earnings Continue to Drive Significant Capital Formation Tangible Book Value per Share Capital Ratios (%) Equity is valued at 109% of TBV (11/1/19) compared to the SNL bank index (178% of TBV)Capital ratios are among top 4% of banks above $10 billion in assetsCapital ratios are approximately 1,000 b
Slide 12: Puerto Rico Executing for Earnings Growth
Puerto Rico Executing for Earnings Growth Opportunities for ongoing market share gainsLargest opportunity on deposit products, electronic banking & transaction servicesGrowth in selected loan products for balanced risk/return to manage risk concentration and diversify income sourcesDislocation in Pu
Slide 13: Stronger Franchise: Proven Success Implementing Strategic Plan
Stronger Franchise: Proven Success Implementing Strategic Plan Our business model is diverse and scalable by segment (commercial, residential and consumer) and by unique markets (Puerto Rico, Southeast Florida & Eastern Caribbean). Our equity is valued at 109% of TBV (11/1/19) compared to the SNL ba
Slide 14: Acquisition of Banco Santander Puerto Rico
First BanCorp.Acquisition ofBanco Santander Puerto RicoOctober 21, 2019
Slide 15: Transaction Highlights
Transaction Highlights Creates a stronger competitor in Puerto Rico with the scale and breadth to better serve retail and commercial customers Enhances funding profile through the addition of a low-cost core deposit funding base and reduction of wholesale funding Deploys capital efficiently, acquiri
Slide 16: Overview of Banco Santander Puerto Rico
Overview of Banco Santander Puerto Rico (“BSPR”) BSPR Overview Financial Highlights ($ millions) Source: S&P Global Market Intelligence, Company Filings, Commissioner of Financial Institutions of Puerto Rico.1 Balances as of June 30, 2019.2 Net of brokered deposits. Leading full-service franchise wi
Slide 17: Stronger Combined Franchise
Stronger Combined Franchise Increased Scale Enhanced Funding Profile Improved Asset Quality Attractive Capital Deployment / Pro Forma Capital Ratios at Close (mid 2020) $17.6bn Total Assets1 $12.0bn Loans2 #2 Rank in Puerto Rico $14.2bn Deposits 84% Loans / Deposits2 $13.6bn Deposits Excluding Broke
Slide 18: Franchise Positioning
Franchise Positioning Creates a stronger competitor in Puerto Rico with over $11bn in deposits in Puerto Rico and the scale and breadth to better serve retail and commercial customers Source: S&P Global Market Intelligence, Commissioner of Financial Institutions of Puerto Rico.1 Balances as of June
Slide 19: Pro Forma Loan and Deposit Composition
Pro Forma Loan and Deposit Composition FBP Loan Portfolio BSPR Loan Portfolio Pro FormaFBP Loan Portfolio1 Commentary FBP Deposit Mix BSPR Deposit Mix Pro FormaFBP Deposit Mix Pro forma loan portfolio will exclude nonperforming BSPR loans (and assets) as well as the JetBlue credit card portfolioPro
Slide 20: Transaction Summary
Transaction Summary Consideration 100% cash consideration Transaction Value $425 million base purchase price, comprised of $63 million premium on $362 million of BSPR’s core tangible common equity1$638 million excess capital1 paid to Santander at parPurchase price subject to adjustment based on BSPR
Slide 21: Transaction Assumptions
Transaction Assumptions Cost Saves ~$48 million (pre-tax) or ~35% of BSPR’s LTM 6/30/19 non-interest expense excluding OREO expense25% realized in 2020, 100% thereafter Durbin Amendment ~$(4) million (pre-tax) Loan Mark Gross loan mark of 5.9% Goodwill and Intangibles Core Deposit Intangible: 1.5% o
Slide 22: Potential Financial Impact of CECL
Potential Financial Impact of CECL Overview Estimated Impact of CECL on Transaction General purchase accounting rules for business combinations require that all loans be marked at fair valueUnder CECL, the loan portfolio will be separated into Purchase Credit Deteriorated (“PCD”) loans and Non-Purch
Slide 23: Exhibits
Exhibits
Slide 24: Third Quarter 2019 Highlights
Profitability 3Q 2019 net income of $46.3 million, or $0.21 per diluted share. Adjusted 3Q 2019 net income of $44.7 million, or $0.20 per diluted share, compared to 2Q 2019 adjusted net income of $40.8 million, or $0.18 per diluted share.Adjusted pre-tax, pre-provision income of $70.2 million, compa
Slide 25: Franchise History
Franchise History Our turnaround story De-Risking of Balance Sheet Building Capital Enhanced Franchise Value June 2010: Written Agreement with the FED and Consent Order with FDIC. July 2010:The U.S. Treasury exchanged TARP preferred for convertible preferred. August 2010: Exchange of 89% Perpetual P
Slide 26: Diversity in Core Franchise
Our well-diversified business model within commercial, consumer and residential across three unique regions allows us to be agile when responding to growth opportunitiesLine of business diversification: Commercial represents 42%, residential represents 33% and consumer represents 25% of the total lo
Slide 27: Significant Projected Inflow of Disaster-related Funds
Significant Projected Inflow of Disaster-related Funds New Fiscal Plan certified by the Financial Oversight and Management Board for Puerto Rico on May 9, 2019.Recent government reports suggest that approximately $83 billion in federal aid and private insurance disbursements will impact the Puerto R
Slide 28: Third Quarter 2019 Highlights: PR Government Exposure
28 Third Quarter 2019 Highlights: PR Government Exposure ($ in millions) As of September 30, 2019, the Corporation had $204.8 million of direct exposure to the Puerto Rico Government, compared to $213.5 million as of June 30, 2019. 89% of direct government exposure is to municipalities, which are su
Slide 29: NPL Migration
NPL MIGRATION (Sin 000) Beginning balance Plus: Additions to non-performing Less. Non-perfoming loans transferred to OREO Non-perfoming loans charged-off Loans retumed to accrual status / collections / paidof Reclassification Ending balance Beginning balance Plus. Additions to non-performing Less. N
Slide 30: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of PresentationUse of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures. Non-GAAP financial measures are used when management believes they will be helpful to an understanding of the Corporation’s results of operations or fina
Slide 31: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of PresentationUse of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures. Non-GAAP financial measures are used when management believes they will be helpful to an understanding of the Corporation’s results of operations or fina
Slide 32: Use of Non-GAAP Financial Measures
32 Use of Non-GAAP Financial Measures Basis of PresentationUse of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures. Non-GAAP financial measures are used when management believes they will be helpful to an understanding of the Corporation’s results of operations or f
Slide 33: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of PresentationUse of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures. Non-GAAP financial measures are used when management believes they will be helpful to an understanding of the Corporation’s results of operations or fina
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