First BanCorp. reports $82M net income in 3Q, up 10% Y-O-Y
First BanCorp., the bank holding company for FirstBank Puerto Rico, reported a net income of $82 million, or $0.46 per diluted share, for the third quarter of 2023, compared to $74.6 million, or $0.40 per diluted share, for the third quarter of 2022, marking at 10% year-over-year growth.
The bank also experienced quarter-over-quarter growth, having reported $70.7 million, or $0.39 per diluted share, for the second quarter of 2023.
“For the third quarter, we earned $82 million in net income and delivered a strong return on average assets of 1.72% driven by a combination of loan growth across all our businesses, disciplined expense management and encouraging economic trends in our main market,” said First BanCorp. CEO Aurelio Alemán.
“The strength of our franchise and the competitive positioning of our balance sheet allows us to deliver consistent earnings even during a challenging period for the banking industry,” he said.
Net interest income was $199.7 million for the third quarter of 2023, compared to $207.9 million in the same quarter the previous year and $199.8 million for the second quarter of 2023.
Net interest margin decreased to 4.15% for the third quarter of 2023 from 4.23% for the second quarter, mainly driven by an increase in the mix of interest-bearing deposits to total deposits and market-driven increases in deposit costs that exceeded the benefit of higher yields in the loan portfolio and other interest-earning assets, the bank stated.
Total loans increased by $226.3 million from the previous quarter to $12 billion as of September 30, 2023. Alemán said total loans increased 1.5% during the quarter, or 6% on an annualized basis, “underscored by healthy levels of commercial and consumer loan originations across all regions.”
On a portfolio basis, the variance consisted of increases of $119.6 million in commercial and construction loans, $93.2 million in consumer loans – primarily finance leases and auto loans – and $13.5 million in residential mortgage loans.
In terms of geography, loan growth included increases of $174.1 million in Puerto Rico, $46.4 million in Florida, and $5.8 million in the U.S. Virgin Islands.
“Our well diversified loan portfolio has been sequentially expanding for the last seven quarters as we continue to focus on executing our strategy of capturing our fair share of the segments we serve,” Alemán said.
Total core deposits, other than brokered CDs and government deposits, decreased by 1.2% to $12.9 billion during the third quarter.
“The net reduction in core deposits during the quarter was primarily related to the erosion of excess liquidity in the market and the search for higher yielding alternatives by retail customers outside the traditional banking sector, offset by a stabilization in commercial deposit balances due to increased business activity in Puerto Rico,” the CEO said.
“The economy in Puerto Rico continues to perform well, labor market trends remain stable, and enduring consumer confidence is evidenced by most indicators despite higher rates and inflationary pressures,” said Alemán. “We have ample experience operating under changing market conditions and will continue to leverage our risk and control framework to continue supporting our customers throughout economic cycles.”
During the quarter, First BanCorp. repurchased $75 million in shares of common stock, finalizing the remaining buyback authorization under the 2022 capital plan.
“In consideration of our strong capital levels and the Board of Directors’ confidence in our strategy and outlook, we expect to continue repurchasing shares of common stock during the fourth quarter under the 2023 capital plan authorization of $225 million,” said Alemán.
See the full financial report here.