First BanCorp. reports $74.6M in 3Q22 net income, steady vs. 3Q21
FirstBank Puerto Rico’s parent company, First BanCorp., reported net income of $74.6 million, or $0.40 per diluted share, for the third quarter of 2022, compared to $74.7 million, or $0.38 per diluted share, for the second quarter of 2022, and $75.7 million, or $0.36 per diluted share, for the third quarter of 2021.
Financial results for the third quarter of 2022 include a provision for credit losses of $15.8 million ($9.9 million after-tax) or a decrease of $0.08 per diluted share, compared to a provision of $10 million ($6.3 million after-tax) or a decrease of $0.05 per diluted share for the second quarter of 2022.
“Financial results for the third quarter continue to demonstrate the core earnings power of our franchise and our ability to achieve consistent performance,” said First BanCorp. CEO Aurelio Alemán.
“We earned $74.6 million, or $0.40 per diluted share, during the quarter and reached a record pre-tax pre-provision income of $122.4 million. This was our sixth consecutive quarterly increase in pre-tax pre-provision income, up 3% when compared to the second quarter of 2022 and 18% when compared to the same quarter last year.”
Net interest income increased to $207.9 million for the third quarter of 2022, compared to $184.7 million in the same year-ago quarter, and $196.2 million for the second quarter of 2022, primarily due to the upward repricing of variable-rate commercial loans and higher average balances in the consumer loan portfolio.
Net interest margin increased to 4.31% for the third quarter of 2022, compared to 3.60% for the third quarter of 2021, and 4% for the second quarter of 2022.
Core deposits, net of government deposits and brokered CDs, decreased by $530.3 million when compared to the second quarter of 2022, primarily in the Puerto Rico and Florida regions, while government deposits decreased by $11.3 million driven by a decrease in the US Virgin Islands region, offset by an increase in the Puerto Rico region.
Interest-bearing deposits continue to gradually decline; however, average deposit balances for core retail customers in Puerto Rico are still 27% above pre-pandemic levels, he said.
In an interview with News is my Business, Alemán said the downward trend was expected, as consumers are now spending the money they had tucked away from the economic stimulus payments they received to mitigate the effects of the COVID-19 pandemic in 2020.
He also said sophisticated investors are shifting their deposits to more long-term instruments like US Treasury bonds, which are paying higher interest.
Meanwhile, the bank’s loan portfolio balances, excluding U.S. Small Business Administration Paycheck Protection Program loans, grew by $112.8 million when compared to the second quarter of 2022, driven by increases of $112.8 million in consumer loans and $31.1 million in construction and commercial loans, partially offset by a decrease of $31.1 million in residential mortgages.
Looking ahead to the rest of the year, Alemán said the trends remain positive in terms of demand for loans, “and we expect a healthy quarter in terms of loan activity.”
