First Bancorp. New · NYSE:FBP
First Bancorp. New — First Bancorp — Q4 2017 Earnings Presentation
35 slides from First Bancorp. New's earnings presentation, Feb 8, 2018
Slide 1: First BanCorp Investor Presentation February 2018
First BanCorp Investor Presentation February 2018 Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain “forward-looking statements” concerning the Corporation’s future economic, operational and financial performance. The words or phrases “expect,” “anticipate,” “intend,” “look forward,” “should,” “would,” “believes” and similar expressions are
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 71% of TBV (2/5/18) and at approximately one-third of the SNL bank index (201%
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. ~2,530 FTE employees(1) 2nd largest financial holding company in Puerto Rico with attractive business mix and substantial loan market share. Florida presen
Slide 5: Franchise Positioning
Franchise Positioning Well-positioned Puerto Rico institution in a consolidating market 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 9/30/17. 1) Puerto R
Slide 6: Diversified Business Model Across Regions
Diversified Business Model Across Regions 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 to manage concentration
Slide 7: 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 opportunities. Line of business diversification: Commercial represents 43%, residential represents 37% and consumer represents 20% of the total
Slide 8: 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 $392 million during 2017. Reliance on brokered deposits declined $290 million during 2017. Non-interest bearing depo
Slide 9: Geographic Diverse Business Model Sustains Portfolio
Geographic Diverse Business Model Sustains Portfolio 1) Including refinancing and draws from existing revolving and non-revolving commitments. Loan Originations* ($ millions) Loan Portfolio ($ millions) Residential Mortgage Consumer & Finance Leases Construction Commercial Loans HFS Despite a challe
Slide 10: Fourth Quarter & FYE 2017 Highlights
Fourth Quarter & FYE 2017 Highlights Profitability 4Q 20117 net income of $24.2 million, or $0.11 per diluted share, compared to net loss of $10.8 million in 3Q 2017. FY2017 net income of $67.0 million (which included $71.3 pre-tax hurricane-related provision in addition to storm-related increased e
Slide 11: Stable Core Performance in Challenging Environment
Stable Core Performance in Challenging Environment Pre-tax pre-provision income of $53.9 million(1) average 4 quarters of $55 million. Replacement of NPLs with performing loans should reduce provisioning needs. Future earnings potential with a reduction in costs associated with managing NPLs and ORE
Slide 12: Proactively Managing Asset Quality
Proactively Managing Asset Quality Commercial NPLs (Includes HFS) NPA Composition Residential Consumer Construction Commercial Loans HFS REO & Repo $647 $641 $575 Dir. & Ind. Gov’t Exposure $651 Net Carrying Amount = % of unpaid principal balance net of reserves and accumulated charge-offs. $735 Non
Slide 13: Earnings Continue to Drive Significant Capital Formation
Earnings Continue to Drive Significant Capital Formation Tangible Book Value per Share Capital Ratios (%) Published DFAST results in October; under the severely adverse scenario, stressed capital ratios are significantly above regulatory capital requirements DFAST Projected Stressed Capital Ratios (
Slide 14: 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-br
Slide 15: 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 71% of TBV (2/5/18) and at approximately one
Slide 16: Exhibits
Exhibits
Slide 17: 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
Slide 18: Stock Profile
Stock Profile Trading Symbol: FBP Exchange: NYSE Share Price (2/5/18): $5.89 Shares Outstanding (in 000’s as of 12/31/17): 216,278 Market Capitalization (2/5/18): $1.3 billion Average 3M Daily Volume: 2,502,043 Tangible Book Value per Share (12/31/17) $8.28 Price (2/5/18) to Tangible Book Value (12/
Slide 19: FBP Stock Price Performance
FBP Stock Price Performance 8/3/17 PEs complete 20mm share secondary 11/30/16 PEs complete 21mm share secondary 2/2/17 PEs complete 23mm share secondary 5/10/17 US Treasury sells remaining 10mm share TARP Investment 11/8/16 Presidential election FBP showed strong institutional demand for shares duri
Slide 20: Puerto Rico Bank Sector Price / TBV Performance
Puerto Rico Bank Sector Price / TBV Performance Puerto Rico bank valuations continue to trail the broader market. 1) Source: SNL Financial. Information November 1, 2016 to Present.
Slide 21: Puerto Rico Update – Impact of Hurricanes Irma & Maria
Puerto Rico Update – Impact of Hurricanes Irma & Maria Recovery of Critical Services Hurricane Irma % of ECR Branches 1 Week After Impact / Today Hurricane Maria % of PR Branches 1 Week After Impact / Today 1 Week After Hurricane María Feb 5, 2018 Hurricane María Total Branches Open Total Branches o
Slide 22: Impact of Hurricanes Irma & Maria
Impact of Hurricanes Irma & Maria Challenges Impact of delay in electric power grid restoration. Potential demographic risks. Industries that will suffer / prosper. How long for tourism industry to uptick and recover. Timing of property & business interruption insurance recoveries to our clients. Fi
Slide 23: Fourth Quarter & FYE 2017 Results
Fourth Quarter & FYE 2017 Results
Slide 24: Results of Operations: Fourth Quarter Financial Highlights
Results of Operations: Fourth Quarter Financial Highlights ($ in thousands, except per share data) Select Financial Information
Slide 25: Key Highlights: Net Interest Income
Key Highlights Net Interest Income ($ millions) Net interest income decreased $0.6 million in 4Q 2017. This decrease was mainly due to: A $0.8 million decrease in interest income on commercial loans primarily related to a $37.9 million decrease in the average balance of these portfolios and the inte
Slide 26: Key Highlights: Adjusted Non-Interest Income
Key Highlights Adj. Non-Interest Income** ($ millions) * Other for 1Q 2017 of -$1.2 million due to a $12.2 million OTTI charge on Puerto Rico Government securities. ** Non-GAAP adjusted non interest income – See Appendix page 35 for reconciliation. Non-interest income for 4Q 2017 amounted to $15.0 m
Slide 27: Results of Operations: Operating Expenses
Results of Operations: Operating Expenses Non-interest expenses decreased by $0.5 million in 4Q 2017 to $85.1 million. Non-interest expenses for 4Q 2017 included insurance deductibles related to damages assessed on certain OREO properties damaged by Hurricane Maria and estimated storm-related costs
Slide 28: Key Highlights: Net Charge-Offs
Key Highlights Net Charge-Offs ($ millions) Net charge-offs for the fourth quarter of 2017 were $24.7 million, or an annualized 1.12% of average loans, compared to $17.6 million, or an annualized 0.80% of average loans, in the third quarter of 2017. Allowance coverage ratio of 2.62% compared to 2.60
Slide 29: Results of Operations: FYE 2017 Financial Highlights
Select Financial Information Results of Operations: FYE 2017 Financial Highlights
Slide 30: Results of Operations: Capital Position
Results of Operations: Capital Position Capital Ratios (%) Total stockholders’ equity amounted to $1.9 billion as of December 31, 2017, an increase of $15.3 million from September 30, 2017, mainly driven by the earnings generated in the fourth quarter, partially offset by a decrease in the fair valu
Slide 31: NPLs Held for Investment - Migration
NPLs Held for Investment - Migration ($ in 000)
Slide 32: PR Government Exposure
Fourth Quarter 2017 Highlights: PR Government Exposure ($ in millions) As of December 31, 2017, the Corporation had $214.5 million of direct exposure to the Puerto Rico Government, its municipalities and public corporations, compared to $214.8 million as of September 30, 2017. 86% of direct governme
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 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 34: 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 35: 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