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First BanCorp. reports $201.6M in net income for ’18; $101.1M for 4Q18

First BanCorp., the bank holding company for FirstBank Puerto Rico, reported net income of $201.6 million, or $0.92 per diluted share, for the year ended Dec. 31, 2018, compared to $67 million, or $0.30 per diluted share, for the year ended Dec. 31, 2017.

The financial institution also reported net income of $101.1 million, or $0.46 per diluted share, for the fourth quarter of 2018, compared to $24.2 million, or $0.11 per diluted share, for the fourth quarter of 2017.

The fourth quarter 2018 results included a $53.3 million net tax benefit related to a $63.2 million one-time benefit resulting from the partial reversal of the corporation’s deferred tax asset valuation allowance, partially offset by a one-time non-cash charge of $9.9 million related to the enactment of the Puerto Rico Tax Reform of 2018, the financial company stated.

Meanwhile, on a non-GAAP basis, adjusted net income for the year ended December 31, 2018 of $137.1 million, or $0.62 per diluted share, compared to adjusted net income of $107.9 million, or $0.49 per diluted share for the year ended December 31, 2017.

“Our reported and core results for the fourth quarter and the year 2018 were very strong. For the quarter, core net income of $44.4 million represented an increase of 28 percent from the third quarter; pre-tax, pre-provision income reached $67.6 million and our margin expanded to 4.77 percent,” said First BanCorp President Aurelio Alemán.

“With the recapture of a portion of our Deferred Tax Asset valuation allowance, our tangible book value is now $9.07 per share,” he said.

On a year-over-year basis, the corporation improved its profitability metrics including:

  • Return on Average Assets (“ROA”) of 1.65 percent (1.12 percent adjusted for Special Items) for 2018 compared to 0.56 percent (0.90 percent adjusted for Special Items) for 2017;
  • Net Interest Margin of 4.55 percent for 2018 compared to 4.36 percent for 2017; and,
  • Efficiency ratio of 58.9 percent for 2018 compared to 62.8 percent for 2017. In addition, the ratio of non-performing assets to total assets decreased to 3.8 percent as of Dec. 31, 2018 from 5.3 percent as of Dec. 31, 2017 reflecting the effect of a $183.5 million, or 28 percent, decrease in total non-performing assets during the year.

“We’re very pleased with the corporation’s performance during 2018 and with what our team has been able to accomplish during the year following the devastating hurricanes in our market,” Alemán said.

“For the full year 2018 we generated Net Income of $201.6 million or a 1.65 percent ROA, we originated and renewed over $3.0 billion in loans and credit facilities, we grew our core deposits by $567 million, and reduced our non-performing assets by 28 percent,” he said.

Alemán also noted that “every key franchise metric has continued to move in a positive direction.”

The bank’s loan portfolio grew during the fourth quarter “even with continued meaningful reductions in non-performing assets. Consistent with our strategies, loan originations and renewals reached $1 billion in the fourth quarter.”

Commercial and construction loan originations increased to $632 million, consumer and auto loan originations increased to $340 million, while residential mortgage loan originations reached $129 million. Net of non-performing loan reductions, the performing loan book grew approximately $170 million.

“We continue to achieve meaningful progress in the reduction of non-performing assets, down $56 million or 11 percent this quarter and now representing only 3.8 percent of total assets. As anticipated, our core deposits remained relatively flat, given the timing of fund inflows to the island, yet we further improved the mix of non-interest bearing, which now represents 27 percent of our deposit base,” Alemán said.

The bank’s capital stood at $2 billion, and the bank reinstated its quarterly common dividend during the fourth quarter of 2018.

“Looking out to 2019 and beyond, the corporation plans to utilize its excess capital to support organic and non-organic growth in our markets and continue to return capital to our shareholders through dividends and other potential capital actions subject to required approvals and market conditions,” Alemán said.

“We’re optimistic about the strategic momentum of the franchise across our three regions and look forward to disciplined growth opportunities in 2019 as we continue to deliver solid results,” he said.

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