First BanCorp. reported Tuesday net income of $25.5 million for the first quarter of 2017, or $0.11 per diluted share, compared to $23.9 million, or $0.11 per diluted share, for the fourth quarter of 2016 and $23.3 million, or $0.11 per diluted share, for the first quarter of 2016.
“We posted yet another quarter of positive operating results despite continued market headwinds. Most importantly, all of our core operating metrics improved,” said First BanCorp. President Aurelio Alemán.
“Net income of $25.5 million had some noise with an other-than-temporary impairment (OTTI) charge on Puerto Rico government securities offset by a tax benefit,” he said.
The bank’s pre-tax pre-provision income of $55.4 million, improved slightly from last quarter, the report showed.
“Our Net Interest Margin grew 12 basis points to 4.42 percent,” he said.
Expenses remained below the bank’s $90 million target and, excluding the OTTI charge and other non-recurring items, its non-interest income increased slightly.
Nonperforming assets declined $87 million, primarily due to the bank’s sale of its exposure to debt owed by the Puerto Rico Electric Power Authority, which also contributed to a reduction in First BanCorp.’s overall government exposure, he said.
Non-performing loan inflows also decreased $34 million, he said.
“While the overall loan portfolio declined, our performing loan book increased this quarter, as we successfully continue to replace nonperforming assets with performing loans. The increase in the performing book was primarily driven by our Florida market, which contributed $50 million of growth in the first quarter,” he said.
“Loan originations and renewal volumes were healthy at $868 million for the quarter and continue to show the resiliency of our local economy. Core deposits, excluding government and brokered CDs, increased $86 million, due in part to the roll-out of technological advancements for commercial banking customers in the prior quarters,” Alemán said.
While he said the bank is “pleased with the results this quarter,” it continues to cautiously navigate the fiscal situation in Puerto Rico.
“We are closely following the developments and potential implications of the recently approved fiscal plan and are attentive to the process of consensual negotiations with debt holders which must be concluded by month end. While we expect austerity measures in the coming months, we are well-prepared to weather what might come our way,” he said.
During a conference call with investors, Alemán noted that the fiscal plan includes “actions that could impact property taxes, actions that will impact loans, some of them are contingent to the Puerto Rico government. So, on the other hand we have seen, you have read in the recent weeks about how tax — tax collections improving versus budget.”
“So we have to monitor the developments from now through the end of the quarter and see the final budget and see exactly what measures that included into the budget and that will be part of our quarterly assessment,” he said during the call.