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First BanCorp. reports $73.5M in Q1 net income

The financial institution plans to continue investing in technology.

First BanCorp., the bank holding company for FirstBank Puerto Rico, reported net income of $73.5 million, or $0.44 per diluted share, for the first quarter of 2024, compared to $79.5 million, or $0.46 per diluted share, for the fourth quarter of 2023, and $70.7 million, or $0.39 per diluted share, for the first quarter of 2023.

The quarter-to-quarter drops were attributed to a special assessment expense related to the Federal Deposit Insurance Corp. (FDIC), the bank stated.

On Nov. 16, 2023, the FDIC approved a final rule to implement a special assessment to recover the loss to the Deposit Insurance Fund associated with protecting uninsured deposits following certain bank failures during the first half of 2023. Under that final rule, the FDIC will collect the special assessment at a quarterly rate of 3.36 basis points to be applied to the special assessment base over eight quarters.

“We continue to successfully navigate the challenging interest rate cycle delivering another quarter of strong operating results,” said Aurelio Alemán, CEO of First BanCorp. “Consistent with our guidance, we grew the loan portfolio for the ninth consecutive quarter, prudently managed our expense base, sustained our profitability profile and returned over 100% of earnings in the form of buybacks and dividends during the first quarter.”

The bank’s net interest income for the first quarter of 2024 was $196.5 million, slightly down from $196.7 million in the previous quarter, attributed to one fewer day in the quarter. However, the net interest margin improved slightly from 4.14% to 4.16%.

“Core deposit balances stabilized during the quarter although we continue to see internal migration of customers seeking higher yields in time deposits, as expected,” Alemán noted.

For the quarter, First Bancorp reported core deposits of $12.6 billion, a drop of $25.8 million, reflecting a decline of $28.3 million in the Florida region, slightly offset by gains of $1.3 million in the U.S. Virgin Islands region and $1.2 million in the Puerto Rico region. This decrease is net of a $93.9 million increase in time deposits.

Government deposits increased by $73 million and totaled $3.2 billion during the first quarter of 2024.

“That said, we remain well positioned to redeploy investment portfolio cash flows into higher-yielding assets under a higher-for-longer interest rate environment, which should be margin accretive for the year,” Alemán said.

“Early delinquency metrics improved, and we took advantage of market opportunities to sell a portfolio of previously charged-off consumer loans which positively impacted the provision expense for the quarter,” he added.

“We have ample balance sheet flexibility to execute on our business plans while navigating the current operating environment and look forward to sharing our progress with all stakeholders over the course of the year,” he added.

Tech investments on the radar
In an interview with News is my Business, Alemán elaborated on the bank’s ongoing strategy to integrate technology not only for its customer-facing online transactions, but also for internal operations — all with the goal of achieving greater efficiencies.

“Last year we began the process of moving all our new processes to the cloud, and we should continue on that plan through 2025,” he said. “Once you’re on the cloud, you have scalability, which leads to growth.”

Late last month, FirstBank announced it had chosen cloud banking services provider nCino Inc. to modernize the commercial banking experience for its customers in Puerto Rico, Florida and the USVI. That project to elevate the customer experience with increased agility and simplicity in online commercial operations, involves a $15 million investment.

Additionally, Alemán confirmed a further investment of $5 million to implement a platform run by Oracle at its Money Express subsidiary, which provides small loans.

“That’s also a platform that will provide digital services to our customers,” he noted. “Technology is here to be able to give clients better service, so they’re able to do things faster and more efficiently.”

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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