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First BanCorp. reports $76M in Q2 net income, opens $250M stock buyback

CEO Aurelio Alemán highlighted the bank’s operating performance, growth in deposits and shareholder returns.

First BanCorp., the bank holding company for FirstBank Puerto Rico, reported a net income of $75.8 million, or $0.46 per diluted share, for the second quarter of 2024. This compares to $73.5 million, or $0.44 per diluted share, for the first quarter of 2024, and $70.7 million, or $0.39 per diluted share, for the second quarter of 2023.

“We closed the first half of the year with another quarter of solid operating performance across most franchise metrics and remain highly encouraged by our growth prospects throughout the rest of the year,” said First BanCorp CEO Aurelio Alemán.

“Once again, we delivered a strong return on assets of 1.61%, grew our net interest margin, registered organic loan growth across all businesses, grew core deposits and returned 100% of earnings to shareholders in the form of buybacks and common stock dividends,” he said.

“We continue to generate top quartile financial results through our proven business model, ongoing operational efficiency and commitment to preserve shareholder value,” Alemán said.

Core deposits, other than brokered and government deposits, were up by $132 million, reflecting growth in all regions.

“More importantly, this growth includes a $47 million increase in noninterest-bearing deposits, further expanding our low-cost and well-diversified funding base while reducing our exposure to higher-cost funding sources,” the CEO said. 

“Even though overall asset quality remained stable, as we have previously mentioned, we have continued to see early-delinquency and charge-off trends within the consumer lending segment returning to historical levels,” Alemán noted.

“Our balance sheet is uniquely positioned to continue serving our clients and communities while growing the franchise and without compromising our strong financial profile. We continue to prudently manage our capital and expect to capitalize on value-creating growth opportunities that best serve the long-term interest of the franchise and its shareholders,” he said.

A day ahead of the earnings report, First BanCorp. announced that its board of directors approved a quarterly cash dividend of $0.16 per share on its outstanding common stock. The dividend is payable on Sept. 13 to shareholders of record at the close of business on Aug. 29.

The financial institution also confirmed a new repurchase program of up to $250 million that could include repurchases of common stock or junior subordinated debentures. The program is expected to be executed, “at management’s discretion,” through the end of fourth quarter of 2025. This approval is in addition to the $50 million remaining under the stock repurchase program announced on July 24, 2023.

“This authorization reflects the corporation’s commitment to continue returning capital to our stakeholders. We intend to use a balanced approach to deploy capital generated by our operations to both support growth and financial soundness, and to distribute capital to shareholders, including in the form of dividends and stock repurchases,” Alemán said.

Repurchases under the program may be executed through open market purchases; accelerated share repurchases; privately negotiated transactions or plans, including Rule 10b5-1 plans; and redemption of junior subordinated debentures.

In a call with News is my Business, Alemán said the share repurchase program is aimed at eliminating that “debt from the market, which paid higher interest rates. We will use the $300 million to redeem other shares, which add up to about $180 million. But we’ll be opportunistic,” he said.

“This repurchase program shows the solidity that we have from the point of view of our capital. When corporations have the capacity to do this, it’s because they have more capital than required and can optimize their capital structure by generating greater return per share for stockholders,” he said.

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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