First BanCorp. reports $305.M net income for 2023, $79.5M for 4Q
First BanCorp., the holding company for FirstBank Puerto Rico, reported net income of $79.5 million, or $0.46 per diluted share, for the fourth quarter of 2023. This compares to $82 million, or $0.46 per diluted share, for the third quarter of 2023, and $73.2 million, or $0.40 per diluted share, for the fourth quarter of 2022.
For the year ending Dec. 31, 2023, the corporation reported net income of $302.9 million, or $1.71 per diluted share, compared to $305.1 million, or $1.59 per diluted share, for the previous year.
“We closed an unprecedented and challenging year for the banking industry with another quarter of strong financial performance and solid loan growth for our franchise. We delivered a 1.7% return on average assets, grew loans by $233 million, or 7.8%, linked quarter annualized, and decreased nonperforming assets to just 0.67% of total assets,” said First BanCorp. President Aurelio Alemán.
“Core deposits, other than government and brokered, contracted by 2% as we continue to see use of excess liquidity across all market segments. We’re very fortunate to have the support of our loyal client base and the commitment from all our service-oriented colleagues during this period and as we continue to capitalize on the stable economic environment of our main operating markets,” Alemán noted.
Over the course of 2023, the financial institution “continued to deploy our capital wisely while selectively growing the loan portfolio, proactively managing the acceleration in funding costs and executing on multiple franchise investments,” the executive said.
Loans increased by $627.7 million, or 5.4%, during the year driven by strong commercial and consumer loan originations, and First BanCorp. expects to disburse a significant portion of unfunded construction loans in 2024.
Loan originations, including refinancings, renewals and draws from existing commitments (other than credit card utilization activity), totaled $1.3 billion in the fourth quarter of 2023, an increase of $116.5 million from the third quarter.
The growth in loan originations consisted of a $162.5 million increase in commercial and construction loans, which includes the origination of a $150 million commercial and industrial participated loan, partially offset by a $27.6 million decline in residential mortgages and $18.4 million in consumer loans, the bank explained in its earnings release.
“Franchise investments continue to enable the achievement of our strategic objectives. We grew digital banking registered users by 14%, deployed multiple enhancements to both our physical and information technology infrastructure, and advanced several process improvement initiatives aimed at supporting business goals and increasing efficiency across the organization,” he said.
For the third year, First BanCorp. distributed nearly 100% of earnings to shareholders via dividends and share repurchases while maintaining strong capital levels and liquidity, he added.
In 2023, the bank returned approximately $300 million, or close to 100%, of 2023 earnings, to shareholders through $200 million in stock repurchases and the payment of $100 million in common stock dividends.
“As we look forward to 2024, additional investments will be geared toward simplifying our commercial lending process and enhancing the resiliency of the franchise, while continuing to expand our digital offerings,” Alemán said.
“Although we are seeing an expected correction in the credit cycle of the consumer lending business driven by lower levels of excess liquidity and inflationary pressures, our ample reserve coverage levels and risk management framework should withstand the impact of any additional credit deterioration over the next year,” he said.
“That said, we remain confident that the economic prospects of our primary market, driven by a strong labor market and an unprecedented level of federal support, should also serve as a mitigant,” he continued.
“While we don’t manage the organization based on short-term stock price fluctuations, we do believe that our 2023 stock price performance is a clear reflection of the strength of our balance sheet and our growth prospects for the coming years. We thank our shareholders for their support and remain committed to delivering consistent results,” Alemán added.
