33 slides from First Bancorp. New's investor presentation, Jun 29, 2011
Slide 1: Investor Presentation June 2011
Investor Presentation June 2011 NYSE: FBP San Juan, PR CONFIDENTIAL Not for Distribution
Slide 2: Disclaimer
Disclaimer | 2 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in Form 10-Q or future filings by First BanCorp (the "Corporation") with the Securities and Exchange Commission ("SEC"), in the Corporation's pre
Slide 3: Offering Summary
Issuer: First BanCorp Ticker: FBP (NYSE) Offering Amount: $550 million priced at $3.50/share1 (including up to $35 million rights offering to current shareholders) Structure: Common stock Rights offering prior to completion (as promptly as practicable) Investors: Thomas H. Lee Partners, L.P. at 24.9
Slide 4: Investment Opportunity
Investment Opportunity | 4 Strong and uniquely positioned market franchise in a densely populated operating footprint Significant opportunities for consolidation and ongoing market share gains Capital restructured and balance sheet repositioned Pro forma capital ratios sufficient to withstand potent
Slide 5: Strengthened Governance & Risk Management; Experienced Leadership Team
Strengthened Governance & Risk Management Highly Committed and Experienced Leadership Team | 5 ? = Appointed to current position in 2009 or 2010
Slide 6: PR Economic Environment: Puerto Rico Implementing Economic Recovery Plan
PR Economic Environment Puerto Rico Implementing Economic Recovery Plan | 6 The government has recently announced aggressive tax reform plans (to be implemented during 2011 - 2013): 33% reduction in Corporate tax rate 45% reduction for small business 25-50% reduction for individuals Phase-out of Alt
Slide 7: Corporate Profile: Significant Competitive Strengths
Corporate Profile Significant Competitive Strengths As of March 31, 2011 Founded in 1948, headquartered in San Juan, Puerto Rico Offers retail and commercial banking services, mortgage banking, insurance and wholesale brokerage 71 banking branches and 45 specialized sales offices Approximately 2,500
Slide 8: Corporate Profile: Ranked 1st in Virgin Islands/Positioned for Expansion in Florida
Corporate Profile Ranked 1st in Virgin Islands/Positioned for Expansion in Florida 40% market share and leading bank Distribution network of 14 renovated and well positioned branches Largest ATM network Attractive customer and business mix with significant affluence Opportunities to increase profita
Slide 9: Enhancing Franchise Value: Unique Challenger to Puerto Rico's Largest Player
Enhancing Franchise Value Unique Challenger to Puerto Rico's Largest Player ($ millions) | 9 Total Assets Total Loans Market Share Growth Potential Source: Office of the Commissioner of Financial Institutions of Puerto Rico as of 12/31/2010; "Other" includes auto financing and small loans companies;
Slide 10: Enhancing Franchise Value: Impressive Core Deposit Growth
Total Core Deposits1 Cost of Interest Bearing Deposits1 Continued recent focus on core deposit growth $887 million or 17% increase since December 2009 2 Largest opportunity residing on transaction banking, corporate and government deposits and branch networking expansion 1 Deposits net of Brokered C
Slide 11: Enhancing Franchise Value: Selectively Responding to Increasing Loan Demand
Enhancing Franchise Value Selectively Responding to Increasing Loan Demand ($ millions) | 11 Focus in 2010: Improving portfolio yield Heavier emphasis on conforming residential mortgages Providing short term funding support to the public sector Halted construction lending; quarterly loan productions
Slide 12: Corporate Profile: Strategic Plan Execution Well Underway
Corporate Profile Strategic Plan Execution Well Underway Strengthening Governance & Risk Management Tightened underwriting approval standards and implemented loss mitigation programs Strengthened management team and governance structure Expanded the role of the Special Assets Group (SAG) to manage a
Slide 13: Executing Capital Plan: Pro-forma Capitalization Reflects Strength
Executing Capital Plan Pro-forma Capitalization Reflects Strength | 13 TARP Conversion July 7, 2010 - U.S. Treasury agreed to exchange TARP preferred stock for mandatorily convertible preferred (Series G) Each Series G will convert into common stock at 75% of its liquidation preference value at a pr
Slide 14: Executing Capital Plan: Pro-forma Capitalization Reflects Strength
Executing Capital Plan Pro-forma Capitalization Reflects Strength | 14 1 Standalone results reported at March 31, 2011 2 Assumes $550MM capital raise after expenses. Assumes proceeds will be invested in money market investments 3 Assumes 100% of TARP outstanding ($400MM) and $24MM of accrued dividen
Slide 15: Tangible Book Value Per Share Pro-forma
Tangible Book Value Per Share Pro-forma ($ thousands, except for per share information) | 15
Slide 16: De-risking Balance Sheet: Executing Targeted Deleverage
Loan Portfolio3 De-risking Balance Sheet Executing Targeted Deleverage ($ millions) | 16 Deposits Investment Securities Reduced total assets by $4.5 billion or 23% since December 2009, through planned deleverage for capital preservation1 Targeted disposition of investment securities and related high
Slide 17: De-risking Balance Sheet: Construction Portfolio Down 53%
In February 2011, closed loan sale transaction of $516.7 million portfolio with a net book value of $438.5 million Loan pool composition: 74% Construction , 19% CRE, 7% C&I 94% adversely classified loans 58% non-performing loans Out of the Construction loans, 63% were residential construction Improv
Slide 18: De-risking Balance Sheet: Credit Quality Stabilizing
De-risking Balance Sheet Credit Quality Stabilizing ($ millions) | 18 Non-performing Assets Allowance for Loan and Lease Losses 1 As of March 31, 2011 2 Commercial includes Commercial & Industrial, Construction and Commercial Real Estate Reserve coverage of 5.06% of total loans1 Reduced NPLs by 25%
Slide 19: De-risking Balance Sheet: Conservative Stress Test Application
| 19 Analysis employing varying stress factors depending on portfolio type Loss factors assumed are significantly higher than current/historical experience and average SCAP loss rates2 Substantial tangible common equity base more than sufficient to sustain even the More Adverse Scenario De-risking B
Slide 20: De-risking Balance Sheet: Third Party Loan Review
| 20 Contracted the services of three independent firms to perform a loss content analysis of loan portfolios as of December 31, 20101 Reviews are independent of the stress testing previously conducted by the Corporation and are meant to provide an alternative view for comparison purposes In general
Slide 21: Strong Underlying Earnings Fundamentals: Improvement in Core Operating Metrics
Strong Underlying Earnings Fundamentals Improvement in Core Operating Metrics ($ millions, except for per share results) | 21 Narrowed net loss and reduced provision for loan and lease losses 1 Non-GAAP financial measure 2 Fair value adjustments on derivatives and financial liabilities measured at f
Slide 22: Strong Underlying Earnings Fundamentals: Eight Levers To Increased Profitability
Strong Underlying Earnings Fundamentals Eight Levers To Increased Profitability ($ millions) | 22 Key Drivers for Increased Profitability: 1Q2011 adjusted pre-tax pre-provision (PTPP)*, excluding $5.3 million gain on sale of mortgage loans Reinvestment of $300 million of excess liquidity at yields b
Slide 23: Investment Opportunity: Attractive Valuation
Investment Opportunity Attractive Valuation | 23 FBP is currently trading, and on a pro forma1 basis will trade, at attractive multiples versus peers Significant upside for new shareholders Note: Market data as of May 31, 2011; assumes FBP issuance priced at $3.50/share; FBP financial data for the p
Slide 24: Summary of Investment Opportunity
Summary of Investment Opportunity | 24 Acquisition of strong franchise at significant discount to tangible book value Positioned to substantially increase market share Stable pre-tax, pre-provision earnings with significant opportunities for improvement Pro forma tangible common equity capital and t
Slide 25: Exhibits
Exhibits
Slide 26: High-Quality, Low Risk Investment Portfolio
High-Quality, Low Risk Investment Portfolio ($ millions) | 26 By Rating Distribution As of March 31, 2011 Total Investment Portfolio - $3,033 million
Slide 27: Sources of Funding
1 As of March 31, 2011 - IRAs are included as Certificate of Deposits and Brokered CDs are presented with Principal Value 2 During 1Q 2011 Sources of Funding1 ($ millions) | 27 Average Cost of Funds on Interest-bearing Liabilities: 2.22% 2 Total brokered CD's decreased from $7.6B at year-end 2009 to
Slide 28: Strong Liquidity Position
1 As of 3/31/2011; Surplus: (liquid assets - short-term liabilities) + secured line of credit As a safeguard in the face of the looming risks, during 2010 the Corporation continued maintaining elevated liquidity levels, well in excess of policy minimums (of 5% basic surplus) and recent targets (of 8
Slide 29: Loan Sale Transaction
| 29 Loan Sale Transaction ($ millions)
Slide 30: Adjusted Pre-tax, Pre-provision Income Reconciliation
Adjusted Pre-tax, Pre-provision Income Reconciliation ($ thousands) 1 See basis of presentation for definition 2 Exclusion of $5.3MM gain on mortgage loans results in $36.4MM core pre-tax pre-provision income during 1Q 2011 | 30 2
Slide 31: Reconciliation of the Loss per Common Share
Reconciliation of the Loss per Common Share ($ thousands, except per share information) | 31 1 Includes a non-cash adjustment of $11.3MM for the fourth quarter ended December 31, 2010 as an acceleration of the Series G preferred stock discount accretion pursuant to an amendment to the exchange agree
Slide 32: Tangible Common Equity Ratio Reconciliation
Tangible Common Equity Ratio Reconciliation ($ millions) | 32
Slide 33: Share Reconciliation
Share Reconciliation ($ thousands, except for per share information) | 33 1 1 5-Day VWAP as of May 24, 2011