First BanCorp., the bank holding company for FirstBank Puerto Rico, reported net income of $167.4 million, or $0.76 per diluted share for the year ended Dec. 31, 2019, vs $201.6 million, or $0.92 per diluted share for the year ended Dec. 31, 2018.
The drop was attributed a one-time $63 million benefit last year, which when adjusted on a non-GAAP basis, then net income for 2019 was $165.6 million, or $0.75 per diluted share, which compares to adjusted net income of $137 million or $0.62 a share in 2018, bank officials said.
During a call with analysts, First BanCorp. CEO Aurelio Alemán described 2019 as a “monumental year,” saying the financial institution met “all our key franchise metrics.”
“We’re working diligently toward the approval, closing and integration of the recently announced acquisition of Banco Santander Puerto Rico. We reported $36.4 million of net income for the fourth quarter of 2019, which included $6.8 million of after-tax merger and restructuring charges,” he said.
“Our adjusted core results of $42.8 million, or $0.19 per diluted share, were slightly below the prior quarter reflecting the impact of the current interest rate environment. Our pre-tax, pre-provision income was stronger at $72.1 million this quarter,” Alemán said.
First BanCorp.’s loan portfolio grew during the fourth quarter with continued reductions in non-performing assets, Alemán said.
“Loan originations and renewals were solid reaching $1.1 billion. Net of non-performing loan reductions, the performing loan book grew approximately $43 million. Our deposits, net of government and brokered CDs, also grew nicely by $261 million in all regions, although the majority of the growth occurred in both Puerto Rico and Florida,” the executive said.
During the fourth quarter of 2019, the bank reported net income of $36.4 million, compared to $46.3 million for the third quarter of 2019. Adjusted net income amounted to $42.8 million, or $0.19 per diluted share, for the fourth quarter of 2019, compared to adjusted net income of $45.1 million, or $0.20 per diluted share, for the third quarter of 2019.
The bank disclosed a $10.9 million expense related to the acquisition of Banco Santander Puerto Rico and related restructuring initiatives. Merger and restructuring costs primarily included advisory, legal, valuation, and other professional service fees associated with the pending acquisition, as well as a $3.4 million charge related to a voluntary separation program offered to eligible FirstBank employees during the fourth quarter of 2019.
A total of 54 FirstBank employees elected to participate in the window on or before Dec. 6, 2019, the due date established for participation in the program, which represented a participation rate of 53% of eligible employees, with employment separations occurring no later than Feb. 29, 2020.
With regards to the effects of the ongoing earthquakes that have affected Puerto Rico since late last year, Alemán said from a business standpoint, “very few of our clients have been affected and we are supporting them with payment moratoriums and supporting in orientation and processing the insurance claims.”
“So far, we have been supported clients I would say in the hundreds, not really in thousands. Our exposure to the region, somehow 4% in the mortgage portfolio and about 10% on the other consumer portfolios, and we are receiving calls and we support the clients,” he said during the conference call transcription provided by Seeking Alpha.
“But so far, I have to say it’s been limited number the ones that have been impacted by this, we will continue monitoring and we will continue supporting them,” he said.