24 slides from First Bancorp. New's earnings presentation, Jul 30, 2014
Slide 1: Financial Results Second Quarter 2014
Financial Results Second Quarter 2014
Slide 2: Forward-Looking Statements
Forward-Looking StatementsThis presentation contains “forward-looking statements” concerning First BanCorp’s (the “Corporation”) future economic performance. The words or phrases “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “expect,” “anticipate,” “look forward,”
Slide 3: Agenda
Agenda Second Quarter 2014 Highlights: Aurelio Alemán, President & Chief Executive Officer Second Quarter Results of Operations: Orlando Berges, Executive Vice President & Chief Financial Officer Summary Questions & Answers 3
Slide 4: Second Quarter 2014 Highlights
SECOND QUARTER 2014 Highlights
Slide 5: Profitability and Asset Quality Highlights
Profitability • Net income of $21.2 million, or $0.11 per diluted share, up 24.2% compared to $17.1 million in 1Q 2014. • Year-over-year 2Q net income increased $4.4 million compared to adjusted 2Q 2013 net income of $16.8 million. • Net interest margin decreased by 6 basis points to 4.21% driven by
Slide 6: Second Quarter 2014 Highlights: Loan Portfolio
Second Quarter 2014 Highlights: LOAN PORTFOLIO Origination and renewal activity at $871 million for 2Q 2014 at healthy levels compared to 1Q 2014, but declined compared to 2Q 2013: - Increase compared to 1Q was mainly related to seasonal renewals on commercial facilities. - Slight improvement in res
Slide 7: Second Quarter 2014 Highlights: Deposit Mix
Core deposits declined $342 million during 2Q 2014 due largely to a reduction of $302 million in government deposits; brokered CDs were reduced $29.5 million during 2Q 2014. We reduced the cost of deposits net of brokered from 0.76% to 0.72%. Puerto Rico core deposits, excluding government, grew $14
Slide 8: Second Quarter 2014 Results of Operations
SECOND QUARTER 2014 Results of Operations
Slide 9: Income Statement Summary
Interest income 158,423 $ 160,571 $ (2,148) $ 160,670 $ Interest expense 28,516 29,251 (735) 33,782 Net interest income 129,907 131,320 (1,413) 126,888 Provision for loan and lease losses 26,744 31,915 (5,172) 87,464 Non-interest income 16,601 17,960 (1,359) 14,263 Equity in losses of unconsolidated
Slide 10: Net Interest Income
Results of Operations: NET INTEREST INCOME NIM declined 6 basis points, compared to Q1 14, but increased 17 basis points year-over-year. Net interest income declined $1.4 million in the first quarter due to:- A decrease of approximately $1.4 million in interest income related to faster prepayments o
Slide 11: Cost of Funds
Results of Operations: COST OF FUNDS Cost of total deposits, excluding brokered CDs, decreased to 0.72% from 0.76%. The average rate paid on non-brokered deposits, including interest-bearing checking accounts, savings and retail CDs, declined by 5 basis points to 0.82% during the second quarter. The
Slide 12: Non-Interest Income
12 Results of Operations: NON-INTEREST INCOME* Non-interest income* declined $1.4 million compared to 1Q 2014, due to: - $1.1MM decrease in insurance agency activities reflecting the impact of the previous quarter of seasonal profit sharing; - A $0.5 million decrease in fee income from the broker-de
Slide 13: Operating Expenses
Results of Operations: OPERATING EXPENSES Credit related expenses increased $1.9 million compared to 1Q 2014. The increase was primarily related to the impact in the previous quarter of a $0.9 million gain realized on a sale and an increase of $1.0 million in attorneys’ loan collection fees, apprais
Slide 14: Asset Quality
1,639 1,551 1,506 1,239 1,233 1,208 1,184 1,138 1,119 1,066 1,008 976 683 506 498 496 522 565 150 150 163 163 172 176 188 194 213 242 251 260 256 151 147 175 154 138 159 148 95 80 55 55 55 1,790 1,701 1,669 1,562 1,410 1,390 1,377 1,337 1,332 1,308 1,259 1,238 1,087 752 726 725 731 757 9.5% 10.0% 9.
Slide 15: Net Charge-Offs & Allowance Coverage
Results of Operations: NET CHARGE-OFFS & ALLOWANCE COVERAGE ($ in millions) Total net charge-offs for 2Q 2014 were $52 million, or 2.19% of average loans. Allowance coverage ratio of 2.55% as of June 30, 2014 compared to 2.79% as of March 31, 2014. The decrease in the ratio was primarily related to:
Slide 16: Capital Position
Results of Operations: CAPITAL POSITION Total stockholders’ equity amounted to $1.3 billion as of June 30, 2014, an increase in net income of $20.5 million and a reduction in loss of value of U.S. agency MBS. The capital levels continue to be strong as First BanCorp executes on its strategic plan. C
Slide 17: Second Quarter Highlights: PR Government Exposure
Second Quarter Highlights: PR GOVERNMENT EXPOSURE ($ in millions) Total asset exposure to the Puerto Rico Government as of June 30, 2014 was $399 million down $77 million from 1Q 2014. In addition, there is $196 million of indirect exposure to the Tourism Development Fund supporting hotel projects.
Slide 18: Second Quarter 2014 Q&A
SECOND QUARTER 2014 Q&A
Slide 19: Exhibits
EXHIBITS
Slide 20: Net Interest Income Changes: Key Margin Drivers
Average Average Volume Rate Average total investments (5,075) $ (0.31%) (1,972) $ Average loans & leases: Residential mortgage loans 85,158 0.03% 1,749 Construction loans (17,874) (0.36%) (324) C&I and commercial mortgage loans (166,593) 0.03% (839) Finance leases (3,401) (0.02%) (86) Consumer loans
Slide 21: Migration of Non-Performing Loans
Results of Operations: MIGRATION (Dollars in thousands) Commercial Mortgage Loans C&I Loans Construction Loans Total Commercial Portfolios As of June 30, 2014 Non-performing loans held for investment at realizable value 44,368 $ 39,070 $ 3,048 $ 86,486 $ Other non-performing loans held for investmen
Slide 22: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of Presentation Use of Non-GAAP Financial Measures This presentation may contain non-GAAP financial measures. Non-GAAP financial measures are set forth when management believes they will be helpful to an understanding of the Corporation’s results of operation
Slide 23: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of Presentation Use of Non-GAAP Financial Measures This presentation may contain non-GAAP financial measures. Non-GAAP financial measures are set forth when management believes they will be helpful to an understanding of the Corporation’s results of operation
Slide 24: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of Presentation Use of Non-GAAP Financial Measures This presentation may contain non-GAAP financial measures. Non-GAAP financial measures are set forth when management believes they will be helpful to an understanding of the Corporation’s results of operation