First Bancorp. New · NYSE:FBP
First Bancorp. New — First Bancorp — Investor Presentation (June 2005)
28 slides from First Bancorp. New's investor presentation, Jun 22, 2005
Slide 1: First Bancorp Investors Presentation June 23, 2005
FIRST BANCORP INVESTORS PRESENTATION JUNE 23, 2005
Slide 2: First BanCorp
FIRST BANCORP Second largest Financial Holding Company in Puerto Rico, with 17.4 billion in assets. With diversified financial operations in Puerto Rico, the US and British Virgin Islands, and Florida, USA. Organized in Puerto Rico in 1948. ^ Public Institution since 1987 ^ NYSE listed since 1993. F
Slide 3: Profile of First BanCorp
PROFILE OF FIRST BANCORP 1991 3/2005 % CHANGE ASSETS (billions) 1.9 17.4 815.8 LOANS (billions) 1.3 11.0 746.2 INVESTMENTS (billions) .6 6.1 916.7 DEPOSITS (billions) 1.4 9.2 557.1 BORROWINGS (billions) .4 6.0 1,400.0 NET INT. INCOME (MIL) (1ST QTR ONLY) 14.7 109.6 645.6 NET INCOME (MIL) (1ST QTR ON
Slide 4: Current Structure
CURRENT STRUCTURE CURRENT STRUCTURE
Slide 5: Puerto Rico
Easternmost Caribbean Island of the Greater Antilles Population : 3.9 million US Citizens Geographical territory : 3,500 square miles Currency : US dollar Political Status : US Commonwealth Dual Judicial System, local and federal US Customs and migration PUERTO RICO
Slide 6: Puerto Rico commonwealth status
Commonwealth status means: ^ Same currency (US dollar). ^ Federal court system, in addition to local courts. ^ Same federal laws to the financial system. • Regulatory banking structure same as any bank in the US. ^ Federal Deposit Insurance ^ Same Social Security System. ^ No federal taxes in Puerto
Slide 7: Puerto Rico Economy
Fully integrated to US economy. ^ Full mobility of funds, people and goods between Puerto Rico and the mainland. Strong manufacturing base. ^ Construction, service, and tourism sectors emphasized more in recent years. GNP growth of 2.8% in fiscal year 2004. 2.3% GNP growth expected for fiscal year 2
Slide 8: First BanCorp Strengths: Strong Management Team
FIRST BANCORP STRENGTHS Years with Years of First BanCorp Experience Age ^Angel Alvarez, Chairman & CEO 15 33 57 ^Luis Beauchamp, SEVP & CCO 15 41 62 ^Annie Astor-Carbonell, SEVP & CFO 22 26 47 ^Aurelio Aleman, EVP-Consumer 8 24 46 ^Randolfo Rivera, EVP-Corporate 7 30 51 ^Dacio Pasarell, EVP-Operati
Slide 9: Strengths: Dynamic Local Management
STRENGTHS DYNAMIC LOCAL MANAGEMENT All important decisions made in Puerto Rico Clients have total access to management. Prompt credit decisions. BOTTOM LINE ORIENTED Consistent earnings increases for last 14 years. Above average profitability ratios for past 14 years. EFFICIENCY -- Efficiency ratio
Slide 10: Strengths: Banking Franchises and Branch Network
STRENGTHS STRONG COMMERCIAL AND CONSUMER BANKING FRANCHISES. STRONG INVESTMENTS/TREASURY MANAGEMENT -- This function is consistent contributor to earnings. SALES ORIENTED BRANCH NETWORK -- Modern branches. -- Sales culture at branches has advanced significantly in past three years. EXCELLENT GOODWIL
Slide 11: Income Statement
INCOME STATEMENT ($ in millions) (1)Include late loan fees and prepayment penalties reclassified to interest income from loan income.
Slide 12: Sources of Revenue
SOURCES OF REVENUE 2004 % 3/2005 % Interest Income (1): INVESTMENTS 296.4 36.4 71.7 29.8 COMMERCIAL 130.4 16.0 43.4 18.0 CONSUMER 174.4 21.4 47.3 19.6 RESIDENTIAL MORTGAGES 153.7 18.9 59.0 24.5 INTEREST INCOME 754.9 92.7 221.4 91.9 Other Income: SERVICE CHARGES, FEES & OTHER 45.8 5.6 11.2 4.6 GAINS
Slide 13: Sources of Revenue: Loan Income
SOURCES OF REVENUE LOAN INCOME(1) 2004 % 3/2005 % COMMERCIAL 130.4 28.5 43.4 29.0 CONSUMER 174.4 38.0 47.3 31.6 RESIDENTIAL MORTGAGES 153.7 33.5 59.0 39.4 458.5 100.0 149.7 100.0 (1)On a Tax Equivalent basis
Slide 14: Profitability
PROFITABILITY 2002 2003 2004 3/1/2005 0.219 0.252 0.2333 0.2544 Return on Average Assets Return on Average Common Equity 2002 2003 2004 3/1/2005 0.0123 0.0146 0.0131 0.014 SUPERIOR PROFITABILITY RATIOS
Slide 15: Profitability: Efficiency Ratio
PROFITABILITY One of First BanCorp's Competitive Advantages Above Average Efficiency Ratio 2002 2003 2004 3/1/2005 0.4081 0.3991 0.3974 0.4075 2002 2003 2004 3/1/2005 0.0151 0.0157 0.0133 0.0138 Expense to Average Assets Efficiency Ratio
Slide 16: Net Interest Income and Margin
Net Interest Income Net Interest Margin (1) 2002 2003 2004 3/1/2005 0.0356 0.0324 0.034 0.0333 2002 2003 2004 3/1/2005 267 292 383 110 (1) Ratio calculated on a tax equivalent basis. ($ In millions) NET INTEREST INCOME AND MARGIN Growth in Loan Portfolio Fueling NII Earnings Growth.
Slide 17: Asset Growth
ASSET GROWTH Consistent Asset and Loan Growth 2002 2003 2004 3/1/2005 9644 12668 15620 17384 Assets ($ in millions) 2002 2003 2004 3/1/2005 5638 7045 9478 10968 Loans
Slide 18: Loan Portfolio
LOAN PORTFOLIO (MILLIONS $) 2004 % of Total March 2005 % of Total Commercial Loans: Commercial C & I 1,862 19.7 1,992 18.1 Commercial Mortgages 944 10.0 1,232 11.2 Construction 401 4.2 478 4.4 3,207 33.9 3,702 33.7 Consumer Loans: Personal Loans 421 4.4 430 3.9 Auto & Leasing 1,041 11.0 1,137 10.4 O
Slide 19: Asset Quality - Non Performing Loans
ASSET QUALITY- NON PERFORMING LOANS Consistent Improvement in Non-Performing Loans Ratio 2002 2003 2004 3/1/2005 0.0163 0.0121 0.0097 0.0081 2002 2003 2004 3/1/2005 91.8 85.5 91.7 88.9 Total Non-Performing Loans Non-Performing Loans to Total Loans ($ in millions)
Slide 20: Asset Quality - Reserves
ASSET QUALITY-RESERVES Excellent Reserve Coverage Ratio Consistent Reduction in Write-Off Ratio Allowance for Loan Losses to Non Performing Loans 2002 2003 2004 3/1/2005 0.0087 0.0066 0.0048 0.0037 2002 2003 2004 3/1/2005 1.2195 1.4777 1.5386 1.6219 Net Charge Offs to Average Loans Outstanding
Slide 21: Investment Portfolio
INVESTMENT PORTFOLIO (MILLIONS) AT MARCH 31, 2005 Held to Available Maturity Yield for Sale Yield Total (at amortized cost) (at fair value) US Agencies 2,355.7 288.3 2,644.0 US Gov't Obligation 160.7 0 160.7 PR Gov't Obligation 13.8 24.9 38.7 Total US & PR 2,530.2 5.66 313.2 4.40 2,843.4 Mortgage Ba
Slide 22: Funding Composition
FUNDING FUNDING COMPOSITION at March 31, 2005 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 20.4 27.4 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 20.4 27.4 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Common Capital Sub Notes Other Liabilities Rep
Slide 23: Capital and Capital Ratios
CAPITAL and CAPITAL RATIOS FIRSTBANK AND FIRST BANCORP 12-31-02 12-31-03 12-31-04 3/31/05 FB FBC FB FBC FB FBC FB FBC LEVERAGE 6.62 7.35 7.38 8.35 7.50 9.25 7.38 8.91 TIER I R.W. 10.68 11.90 12.00 13.65 11.03 13.57 10.59 12.33 TOTAL R.W. 12.50 13.75 13.49 15.22 12.28 14.89 11.84 13.62 REGULATORY 740
Slide 24: Business Strategy
BUSINESS STRATEGY TO BE IMPLEMENTED BY WINNING TEAM INCREASE MARKET SHARE FOR COMMERCIAL & CONSUMER LOANS. EXPAND BRANCH NETWORK TO INCREASE SHARE OF DEPOSITS. INCREASE MORTGAGE ORIGINATIONS VIA FIRSTMORTGAGE TO CAPTURE HIGHER SHARE.
Slide 25: Business Strategy
BUSINESS STRATEGY EXPAND EASTERN CARIBBEAN MARKET PRESENCE. CONTINUE EXPANSION IN FLORIDA MARKET. •LOAN OFFICE •ACQUISITIONS CONTINUE GROWTH IN INSURANCE BUSINESS. CONTINUE TO EXPLOIT VARIOUS ALLIANCES.
Slide 26: Business Strategy
BUSINESS STRATEGY MAXIMIZE SPREAD INCOME ON INVESTMENTS AND GAINS ON SALE. ENHANCE CROSS SELLING POTENTIAL.
Slide 27: Business Strategy
BUSINESS STRATEGY ALL STRATEGIES WITHIN PRUDENT CREDIT AND INTEREST RATE RISK MANAGEMENT. EXCELLENT GOVERNANCE, INTERNAL CONTROLS, AND REGULATORY COMPLIANCE ARE KEY TO OUR STRATEGY.
Slide 28: Cautionary Language
CAUTIONARY LANGUAGE The forward looking statements presented today including, among other things, projections with respect to revenue and earnings growth and the Company's plans and objectives, are subject to risks and uncertainties. Various factors, including regional and national economic conditio