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First BanCorp reports $58.9M in Y-O-Y net income growth during 1Q21

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First BanCorp., the parent company of FirstBank Puerto Rico, reported net income of $61.2 million, or $0.28 per diluted share, for the first quarter of 2021, compared to $50.1 million, or $0.23 per diluted share, for the fourth quarter of 2020, and $2.3 million, or $0.01 per diluted share, for the first quarter of 2020.

Financial results for the first quarter of 2021 include a net benefit of $15.3 million ($9.5 million after-tax, or an increase of $0.04 per diluted share) recorded to the provision for credit losses, primarily related to an improving macroeconomic outlook during the quarter.

In addition, during the first quarter of 2021, the financial institution recorded merger and restructuring costs associated with its acquisition of the former Banco Santander Puerto Rico of $11.3 million ($7.0 million after-tax, or a decrease of $0.03 per diluted share), compared to $12.3 million ($7.7 million after-tax, or a decrease of $0.04 per diluted share) for the fourth quarter of 2020.

“We’re very pleased with our results for the first quarter of 2021 and our continued progress on the integration of the acquired operations,” said First BanCorp. CEO Aurelio Alemán.

“We generated net income of $61 million, or $0.28 per share, compared to $50 million in the fourth quarter. Improving macroeconomic forecasts led to a reserve release of $15 million this quarter. Core operating performance was strong with pre-tax pre-provision income of $86 million,” he said.

In a press release, he explained that total pandemic relief funding assigned to Puerto Rico is currently estimated at $45 billion, equivalent to 63% of fiscal year 2019 GNP or 4.5 times the Commonwealth’s budget for fiscal year 2021.

“This significant amount of stimulus continues to strengthen our customers, driving growth in deposits and also softening in loan demand in the near term. Deposits, excluding government and brokered, increased $472 million this quarter which continues to enhance our liquidity profile,” he said.

“The economy in our main market continues to show signs of recovery, with tourism, hotel occupancy, airline passengers, manufacturing and cement sales all showing improving trends. While advancements are evident in overcoming the pandemic challenges and vaccinations continue to progress, we continue to operate under strict safety rules yet remain optimistic about recovery trends across the economy,” Alemán said.

“We have solidified our market position and are poised to benefit from these improving economic conditions. Our asset quality ratios continue to improve, and our capital ratios remain very strong,” he added.

Coupled with the earnings release First BanCorp. announced that its Board approved a $300 million share repurchase program, starting this quarter through June 30, 2022.

“The repurchase may be in the open market or in privately negotiated transactions. Timing and exact amount will be subject to market conditions,” Alemán said during a call with analysts to discuss the most recent results.

“Given our outside capital position and the continued earnings accretion, we are committed to return excess capital to our shareholders, and we’re very, very pleased to move forward with this announcement,” he added.

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This story was written by our staff based on a press release.
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