First BanCorp. reports $70.6M in net income, up 231% Y-O-Y
First BanCorp, the parent company of FirstBank Puerto Rico, reported net income of $70.6 million, or $0.33 per diluted share, for the second quarter of 2021, up 231% from the $21.3 million, or $0.09 per diluted share on record for the same year-ago quarter.
The quarter includes a net benefit of $26.2 million recorded to the provision for credit losses, primarily due to continuing improvements in macroeconomic forecasts, the bank confirmed.
In addition, during the second quarter of 2021, First BanCorp recorded merger and restructuring costs of $11 million related to the integration process of the assets of Banco Santander Puerto Rico, an acquisition it completed in September 2020.
“We’re on schedule to complete the full integration now during this quarter. A few weeks ago, in early July, we completed all system conversions,” Aurelio Alemán, First BanCorp CEO said during a call with investors to discuss the quarter’s results.
“Again, this for us was really a huge milestone to move forward and this actually, this final conversion allowed us to finalize the branch consolidation in Puerto Rico,” said Alemán, confirming that six branches were consolidated during the integration phase.
Alemán also noted that economic activity continues to improve and is on track to reach pre-pandemic levels in the next few months.
“Improved consumer confidence is apparent as we have seen an extraordinary rise in retail sales, auto sales, and government collections, and as evidenced by our historically low levels of troubled assets and high levels of liquidity in our markets,” he said in a press release.
However, he said while the bank has seen strong growth in deposits for the second quarter, that “continues to have an adverse effect on loan growth. Our originations, including refinancing, were healthy at $1.2 billion, but the overall portfolio declined primarily due to commercial payoffs, including Paycheck Protection Program loans repaid during the second quarter.”
During the second quarter First BanCorp disbursed $74 million in new U.S. Small Business Administration PPP loans and received principal forgiveness remittances of about $151 million, he said.
During the second quarter the financial institution repurchased 7.96 million shares for approximately $100 million, representing a 4% reduction in shares outstanding.