First BanCorp. reports net income of $74.7M for 2Q22
First BanCorp. reported net income of $74.7 million, or $0.38 per diluted share, for the second quarter of 2022 ended June 30, compared to $82.6 million, or $0.41 per diluted share, for the first quarter of 2022, and $70.6 million, or $0.33 per diluted share, for the second quarter of 2021.
Financial results for the second quarter of 2022 include a provision for credit losses of $10 million ($6.3 million after-tax) reflecting an overall increase in the loan portfolio, mainly in the auto loans and finance lease portfolios, and increased economic uncertainty that is reflected in the forecast of certain macro-economic variables and the related qualitative reserves, First Bank’s parent company stated.
The provision for credit losses for the first quarter of 2022 was a net benefit of $13.8 million ($8.6 million after-tax) or an increase of $0.07 per diluted share.
Net interest income increased to $196.2 million for the second quarter of 2022, compared to $185.6 million for the first quarter of 2022, primarily due to the upward repricing of variable-rate commercial loans and interest-bearing cash balances maintained at the Federal Reserve Bank of New York, as well as a decrease in the premium amortization expense on U.S. agencies mortgage-backed securities.
“We continued to perform exceptionally well during the second quarter by leveraging our market position to strategically grow the balance sheet and continue improving the banking experience of our customers,” said First BanCorp. CEO Aurelio Alemán.
“These results were achieved within the context of an uncertain global economic backdrop and highlight the strength of our franchise,” he said.
The bank registered loan growth across its targeted business segments during the quarter of $58.8 million. Loan portfolio balances, excluding the $40.3 million in the carrying value of U.S. Small Business Administration PPP loans, grew by $144.2 million when compared to the first quarter of 2022, driven by increases of $130.7 million in consumer loans and $58.8 million in construction and commercial loans, partially offset by a decrease of $45.3 million in residential mortgages.
“Total loan originations, excluding credit card utilization activity, were very strong at $1.4 billion, an increase of $280.8 million when compared to the first quarter of 2022 primarily attributed to higher commercial and consumer loan originations,” he said.
“We expect that healthy loan pipelines coupled with steady recovery trends in our main market should result in sustained loan originations throughout the second half of the year,” Alemán added.
Core deposits, net of government deposits and brokered CDs, decreased by $360.2 million when compared to the first quarter of 2022, primarily in the Puerto Rico region, while government deposits grew by $176.6 million driven by increases in both Puerto Rico and the U.S. Virgin Islands, of $77.2 million and $98.1 million, respectively.
The bank’s Florida region also showed growth in the segment, of $1.3 million.
During the second quarter of 2022, First BanCorp. repurchased approximately 7.07 million shares of its common stock through open market transactions for a total purchase price of approximately $100 million under the $350 million stock repurchase program announced on April 27, 2022.
“We believe that our fortress balance sheet, complemented by strong economic tailwinds in Puerto Rico, will contribute to the mitigation of rising market challenges and allow us to continue supporting our clients and delivering value to shareholders,” he said.