First BanCorp., the bank holding company for FirstBank Puerto Rico, reported Wednesday net income of $15.9 million for the third quarter of 2013, or $0.08 per diluted share, compared to a net loss of $122.6 million, or $0.60 per diluted share, for the second quarter of 2013 and net income of $19.1 million, or $0.09 per diluted share, for the third quarter of 2012.
While when compared, the year-over-year figure is slightly lower, the third quarter results push FirstBank into black for the first time this year.
The results for the second quarter included a $72.9 million loss on the bulk sale of non-performing residential assets and a $66.6 million loss related to the write-off of assets pledged as collateral to Lehman Brothers Inc.
“The results for the third quarter continue to show improvements associated with the execution of our business strategies. Net income for the quarter amounted to $15.9 million, including $3.4 million in non-recurring expenses related to the secondary stock offering and the conversion of the credit card processing platform, both completed during the quarter,” said First BanCorp President Aurelio Alemán.
“Excluding these items, net income amounted to $19.3 million. Furthermore, the results were impacted by a $5.9 million loss in the equity of the unconsolidated entity to which we sold loans in 2011 and a $3 million increase in the tax reserve for uncertain tax positions,” he said.
The quarter showed improvement in pre-tax pre-provision income, which increased to $50 million, expansion of the net interest margin to 4.19 percent and growth of $78.6 million in non-brokered deposits and $63 million in loans held in portfolio. Loan originations were approximately $836 million for the quarter, he added.
Adjusted net income of $19.3 million, or $0.09 per diluted share, excluding $1.7 million in costs associated with the secondary offering of the corporation’s common stock by certain of the existing stockholders and $1.7 million in costs associated with the conversion of the credit card processing platform, compared to an adjusted net income of $16.8 million, or $0.08 per diluted share, for the second quarter of 2013, excluding the effects of the bulk sale of non-performing residential assets and the Lehman collateral write-off.
Meanwhile, Alemán said it was a good quarter for originations, which totaled $920 million for the third quarter including credit cards.
“It was not better than the prior one but it was better than the same quarter last year. We’ll continue our focus. We have some opportunities on growing with the consumer book. We have some opportunities in growing the commercial book, following the sales that we completed in the first half of the year,” Alemán said.
During the earnings call held early Wednesday, the bank executive discussed Puerto Rico’s current economic problems, saying “the steps the government has taken fiscally are positive after approving the budget, reforming the pension system, and enhance and diversify the revenue … of all the corporations.”
Still, he said the bank will continue developing its strategies based on the premise that the island’s economy will remain flat.
“Despite the negative market headwinds, we have stayed the course in the execution of our strategies. We are pleased with the steps taken by the Puerto Rico government with regard to the fiscal situation and their efforts to address investor concerns and remain unwavering in our commitment to the Puerto Rico market,” he said. “We will continue to focus on enhancing franchise value through the organic reduction of nonperforming loans and earnings generation.”
To review the bank’s full third quarter report, click here.