29 slides from First Bancorp. New's investor presentation, Nov 16, 2016
Slide 1: First BanCorp Investor Presentation November 2016
First BanCorp Investor Presentation November 2016 Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain “forward-looking statements” concerning the Corporation’s future economic and financial performance. The words or phrases “expect,” “anticipate,” “intend,” “look forward,” “should,” “would,” “believes” and similar expressions are meant to iden
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 ~2,650 FTE employees(1) 2nd largest financial holding company in Puerto Rico with attractive business mix and substantial loan market share Florida presence
Slide 5: Strengthening geographic and line of business diversification
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 43%, residential represents 37% and consumer represents 20% of the total
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 6/30/16. 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 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 income sources FirstBank-bran
Slide 9: Third Quarter 2016 Highlights
Third Quarter 2016 Highlights Franchise Overview: Profitability Net income of $24.1 million, or $0.11 per diluted share, compared to $22.0 million in 2Q 2016. Net interest income declined $2.0 million, due to lower loan volumes and prepayments on securities. Non-interest income increased $6.4 millio
Slide 10: Favorable Funding Mix: Total Deposit Composition
Total Deposit Composition (%) Core Deposits(1) ($ millions) 1) Core deposits are total deposits excluding brokered CDs. Non-brokered deposits, excluding government deposits, increased $134 million YTD 2016. Reliance on brokered deposits declined $539 million YTD 2016. Puerto Rico non-brokered deposi
Slide 11: Loan Originations and Loan Portfolio
Loan Originations* ($ millions) Loan Portfolio ($ millions) $880 Residential Mortgage Consumer & Finance Leases Construction Commercial Loans HFS Loan Portfolio: The loan portfolio increased $12 million net of charge-offs. The performing portfolio increased $32 million. Commercial portfolio increase
Slide 12: Proactively Managing Asset Quality: Non-Performing Assets
Non-Performing Assets ($ millions) Total non-performing loans, including non-performing loans held for sale, decreased by $31 million, or 5%, driven largely by charge-offs activity. New non-performing loan inflows were $50 million in 3Q 2016, down $28 million from last quarter. Included in the “Dire
Slide 13: Proactively Managing Asset Quality: Quarterly Migration Trends
Proactively Managing Asset Quality Quarterly Migration Trends ($ in 000)
Slide 14: Puerto Rico Government Exposure
Puerto Rico Government Exposure As of September 30, 2016, the Corporation had $325.9 million of direct exposure to the Puerto Rico Government, its municipalities and public corporations, compared to $336.5 million as of June 30, 2016. Available-for-sale investment portfolio outstanding principal of
Slide 15: Stable Core Performance in Challenging Environment
Stable Core Performance in Challenging Environment Pre-tax pre-provision income of $50.2 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 16: Earnings Continue to Drive Capital Formation
Earnings Continue to Drive Capital Formation Capital Ratios (%) Total stockholders’ equity amounted to $1.8 billion as of September 30, 2016, an increase of $13.4 million from June 30, 2016, mainly driven by $24.1 million of net income offset by a decrease of $12.2 million in other comprehensive inc
Slide 17: 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 18: Exhibits
Exhibits
Slide 19: Exhibits
Exhibits Page Stock Profile…………………………………………………………………………………………………………….20 History …………………………………………………………………………………………………………………….21 2Q 2016 Earnings Presentation…………………………………………………………………………………22 Non-GAAP Reconciliations……………………………………………………………………………………….28
Slide 20: Stock Profile
Stock Profile Trading Symbol: FBP Exchange: NYSE Share Price (11/14/16): $6.36 Shares Outstanding (as of October 31, 2016): 217,419,933 Market Capitalization (11/14/16): $1,383 million 1 Yr. Average Daily Volume: 863,268 Price (11/14/16) to Tangible Book (9/30/16): 0.81x Includes the U.S. Treasury w
Slide 21: History: Key Events 2010-2016
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 $269 million. Feb-April 2011: Sal
Slide 22: Results of Operations: Third Quarter Financial Highlights
Results of Operations: Third Quarter Financial Highlights ($ in thousands, except per share data) Select Financial Information
Slide 23: Key Highlights: Net Interest Income
Key Highlights Net Interest Income ($ millions) GAAP NIM increased 5 basis points to 4.06%, due to the use of cash balances to repay maturing brokered CDs and repurchase agreements. Net interest income decreased $2.0 million in 3Q 2016. This decrease was mainly due to: A $1.7 million decrease in int
Slide 24: Key Highlights: Non-Interest Income
Key Highlights Non-Interest Income* ($ millions) * Non interest income excludes equity losses of unconsolidated entities, OTTI and gain on investments, HFS bulk sale impact and bargain purchase gain. Non-interest income increased $6.4 million in the quarter, mostly related to a $6.1 million gain in
Slide 25: Results of Operations: Operating Expenses
Results of Operations: Operating Expenses Non-interest expenses decreased by $1.2 million in 3Q 2016 to $88.3 million, due to: A $1.3 million decrease in credit related expenses. $0.7 related to lower write-downs in OREO and $0.6 million decrease in expenses related to troubled loan resolution and m
Slide 26: Key Highlights: Net Charge-Offs
Key Highlights Net Charge-Offs ($ millions) Total net charge-offs for 3Q 2016 were $42 million, an annualized 1.90% of average loans, compared to $25 million in 2Q 2016. Approximately $13.7 million of the charge-offs recorded in the third quarter is related to loans guaranteed by the Puerto Rico Tou
Slide 27: Results of Operations: Key Margin Drivers
Results of Operations: Key Margin Drivers Q3 vs. Q2 Change in Average Interest Earning Assets & Interest Bearing Liabilities * On a tax equivalent basis and excluding valuations ($ in 000) $ r in Average Average Volume Rate Average total investments (431,051) $ (0.16%) (3,289) $ Average loans & leas
Slide 28: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of Presentation Use 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 fin
Slide 29: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of Presentation Use 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 fin