First Bancorp. New · NYSE:FBP
First Bancorp. New — First Bancorp — Investor Presentation (May 2019)
35 slides from First Bancorp. New's investor presentation, May 23, 2019
Slide 1: First BanCorp Investor Presentation May 2019
First BanCorpInvestor PresentationMay 2019
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 110% of TBV (5/22/19) compared to the SNL bank index (172% of TBV). Our capita
Slide 4: Franchise Overview
Franchise Overview Founded in Puerto Rico in 1948 Headquartered in San Juan, Puerto Rico with operations in PR, Eastern Caribbean (Virgin Islands) and Florida~2,690 FTE employees(1) 2nd largest financial holding company in Puerto Rico with attractive business mix and substantial loan market shareFlo
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 12/31/18.1) Others i
Slide 6: Diversified Business Model Across Regions
Diversified Business Model Across Regions Strong Capital and Operational Foundation to Support Growth 1) Originations include purchases, refinancings, and draws from existing revolving and non-revolving commitments. Consumer Banking Attractive branch network across densely populated regions in Puert
Slide 7: Main Market Continues to Show Signs of Economic Recovery
Main Market Continues to Show Signs of Economic Recovery Economic activity in the aftermath of both Hurricanes Irma and Maria has recovered. Several drivers of economic activity in Puerto Rico continue to show signs of stabilization, with employment levels improving each month and gas consumption/ce
Slide 8: Significant Inflow of Disaster-related Funds
Significant Inflow of Disaster-related Funds New Fiscal Plan certified by the Financial Oversight and Management Board for Puerto Rico on May 9, 2019.Recent government reports suggest that approximately $83 billion in federal aid and private insurance disbursements will impact the Puerto Rico econom
Slide 9: Favorable Funding Mix
1) Core deposits are total deposits excluding brokered CDs. Favorable Funding Mix Total Deposit Composition (%) Core Deposits(1) ($ millions) Core deposits increased $122 million during 1Q 2019Reliance on brokered CDs declined $46 million in 1Q 2019Non-interest bearing deposits continue to grow and
Slide 10: Geographic Diverse Business Model Sustains Portfolio
Geographic Diverse Business Model Sustains Portfolio 1) Including refinancing and draws from existing revolving and non-revolving commitments. Loan Originations* ($ millions) Loan Portfolio ($ millions) Residential Mortgage Consumer & Finance Leases Construction Commercial Loans HFS Our island is be
Slide 11: Consistently Improving Core Performance Metrics
Consistently Improving Core Performance Metrics Pre-tax pre-provision income of $70.4 million; four quarter average of $64.9 millionReplacement of NPLs with performing loans should further reduce provisioning needsPotential for additional loan growth opportunities; while changing the mix to higher y
Slide 12: Proactively Managing Asset Quality
Proactively Managing Asset Quality Commercial NPLs (Includes HFS) NPA Composition Residential Consumer Construction Commercial Loans HFS REO & Repo $621 $467 $523 $415 Net Carrying Value = % of unpaid principal balance net of reserves and accumulated charge-offs. $637 Non-Performing Assets ($ millio
Slide 13: Earnings Continue to Drive Significant Capital Formation
Earnings Continue to Drive Significant Capital Formation Tangible Book Value per Share Capital Ratios (%) Equity is valued at 110% of TBV (5/22/19) compared to the SNL bank index (172% of TBV)Capital ratios are among top 4% of banks above $10 billion in assetsCapital ratios are approximately 1,000 b
Slide 14: Executing for Earnings Growth
Executing for Earnings Growth Puerto RicoOpportunities for ongoing market share gainsLargest opportunity on deposit products, electronic banking & transaction servicesGrowth in selected loan products for balanced risk/return to manage risk concentration and diversify income sourcesDislocation in Pue
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 110% of TBV (5/22/19) compared to the SNL ba
Slide 16: Exhibits
Exhibits
Slide 17: Improving Core Performance
Improving Core Performance 1Q 2019 adjusted net income of $37.0 million, or $0.17 per diluted share (which excludes $6.4 million, $4.0 million after-tax, positive effect in earnings related to loan loss reserve releases and a $2.3 million expense recovery related to an employee retention benefit pay
Slide 18: 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 P
Slide 19: 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 opportunitiesLine of business diversification: Commercial represents 43%, residential represents 35% and consumer represents 22% of the total lo
Slide 20: Stock Profile
Stock Profile Trading Symbol: FBP Exchange: NYSE Share Price (5/22/19): $10.29 Shares Outstanding (in 000’s as of 3/31/19): 217,235 Market Capitalization (5/22/19): $2.24 billion Average 3M Daily Volume: 1,579,873 Tangible Book Value per Share (3/31/19) $9.32 Price (5/22/19) to Tangible Book Value (
Slide 21: FBP Stock Price Performance
FBP Stock Price Performance FBP showed strong institutional demand for shares following the aftermath of the hurricanes. 1) Source: SNL Financial. Information January 2, 2018 to May 22. 2019.
Slide 22: 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 January 2, 2018 to May 22, 2019.
Slide 23: First Quarter 2019 Results
First Quarter 2019 Results 123
Slide 24: Profitability
Profitability 1Q 2019 net income of $43.3 million, or $0.20 per diluted share. Adjusted 1Q 2019 net income of $37.0 million, or $0.17 per diluted share, compared to 4Q 2018 adjusted net income of $44.4 million, or $0.20 per diluted share.Adjusted pre-tax, pre-provision income of $70.4 million, compa
Slide 25: Results of Operations: First Quarter Financial Highlights
Results of Operations: First Quarter Financial Highlights ($ in thousands, except per share data) Select Financial Information
Slide 26: Net Interest Income Key Highlights
Key Highlights Net Interest Income ($ millions) Net interest income increased $2.5 million in 1Q 2019. This increase was mainly due to:A $2.7 million increase in interest income on commercial and construction loans, due to higher balances and upward repricing of variable rate commercial loans and hi
Slide 27: Results of Operations: Non-Interest Income
Non-interest income for 1Q 2019 amounted to $22.6 million, compared to $20.5 million for 4Q 2018. The $2.0 million increase was primarily due to: A $2.4 million increase in insurance income, included as part of Other, reflecting the effect of seasonal contingent commissions of $2.7 million recorded
Slide 28: Results of Operations: Non-interest Expenses
Results of Operations: Non-interest Expenses Non-interest expenses decreased by $0.7 million in 1Q 2019 to $90.0 million due to:A $1.4 million decrease in professional service fees, mainly $0.9 million in consulting fees reflecting a decrease in costs incurred in efforts to support the implementatio
Slide 29: Results of Operations: Net Charge-offs
Key Highlights Net Charge-Offs ($ millions) Net charge-offs for 1Q 2019 were $24.4 million, or an annualized 1.10% of average loans, compared to $11.9 million, or an annualized 0.54% of average loans, in 4Q 2018. The $12.6 million increase was primarily related to: the effect in the previous quarter
Slide 30: First Quarter 2019 Highlights: PR Government Exposure
First Quarter 2019 Highlights: PR Government Exposure ($ in millions) As of March 31, 2019, the Corporation had $213.5 million of direct exposure to the Puerto Rico Government, its municipalities and public corporations, compared to $214.7 million as of December 31, 2018. 89% of direct government ex
Slide 31: NPL Migration
NPL MIGRATION (Sin 000) Beginning balance $ 147,287 $ 120,907 § 32,107 § 11,377 $20,406 $332,085 Pls: ‘Additions to non-performing 11,460 94 139 07 114,972 24,132 Less: Non performing loans transferred to OREO (6,222) (822) (214) (459) 7 717) Non-performing loans charged-off (4,342) (2,395) (6,235)
Slide 32: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of PresentationUse 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 fina
Slide 33: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of PresentationUse 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 fina
Slide 34: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of PresentationUse 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 fina
Slide 35: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Basis of PresentationUse 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 fina