First Ban(US:FBP)2020-11-09 21:43Financial Performance - Total interest income for the quarter ended September 30, 2020, was $170,402,000, compared to $172,295,000 in 2019, reflecting a decrease of 1%[410] - Net interest income increased to $148,696,000 from $144,425,000 year-over-year, representing a growth of 2%[410] - Net income attributable to common stockholders for the quarter was $27,944,000, down from $45,658,000, a decline of 39%[410] - The Corporation reported a net income of $28.6 million for Q3 2020, compared to $46.3 million in Q3 2019, with adjusted net income of $22.4 million[459] - Net interest income for Q3 2020 was $148.7 million, an increase from $144.4 million in Q3 2019, with approximately $14.0 million attributed to the acquisition of BSPR[433] - The Corporation recorded a net income tax benefit of $4.4 million for Q3 2020, compared to an income tax expense of $19.3 million in Q3 2019[557] Credit Losses and Provisions - Provision for credit losses surged to $46,914,000 from $7,398,000, indicating a significant increase of 533%[410] - The provision for credit losses increased to $46.9 million in Q3 2020, compared to $7.4 million in Q3 2019, largely due to the Day 1 reserves required for non-PCD loans acquired in the BSPR acquisition[436] - Provision for credit losses for loans and finance leases increased by $126.7 million to $158.5 million for the first nine months of 2020, compared to $31.8 million for the same period in 2019[508] - The BSPR acquisition resulted in a $37.5 million provision for credit losses for non-PCD loans in the third quarter of 2020[504] - The Corporation's allowance for credit losses for loans and finance leases increased to $384.7 million as of September 30, 2020, compared to $155.1 million as of December 31, 2019[563] Loan and Asset Growth - Total loans, including loans held for sale, increased to $11,895,945,000 from $9,041,682,000, a growth of 32%[412] - Total assets as of September 30, 2020, were $18.7 billion, an increase of $6.0 billion from December 31, 2019, including $2.6 billion in loans and $354.8 million in investment securities from the BSPR acquisition[442] - The total loan portfolio reached $11.9 billion, an increase of $2.9 billion compared to December 31, 2019, driven by the addition of $2.6 billion in loans from the BSPR acquisition[564] - The residential mortgage loan portfolio increased by $702.9 million compared to December 31, 2019, primarily due to $816.6 million from the BSPR acquisition in Puerto Rico[570] - Commercial and industrial loans rose to $3.2 billion, reflecting an increase of $995.9 million, with a 10.76% organic growth[565] Non-Interest Income and Expenses - Non-interest income rose to $29,934,000, up from $21,401,000, marking an increase of 40%[410] - Non-interest income for Q3 2020 amounted to $29.9 million, an increase of $8.5 million compared to $21.4 million in Q3 2019, primarily due to a $5.3 million gain on sales of investment securities[516][517] - Non-interest expenses for Q3 2020 were $107.5 million, up from $92.8 million in Q3 2019, including $10.4 million in merger and restructuring costs related to the BSPR acquisition[439] - Non-interest expenses for the first nine months of 2020 totaled $289.5 million, up from $276.2 million in the same period of 2019[544] Deposits and Funding - As of September 30, 2020, total deposits increased by $4.8 billion to $12.5 billion from $7.7 billion as of December 31, 2019[608] - Demand deposits grew by 35%, or $1.1 billion, contributing to an overall increase in deposits, excluding brokered and government deposits, to $12.5 billion[601] - The Corporation's deposits, excluding brokered and government deposits, increased by $4.8 billion, primarily due to the acquisition of BSPR[601] - The Corporation had approximately $648.2 million in callable securities with an average yield of 0.92% as of September 30, 2020[594] Tax and Regulatory Matters - The estimated annual effective tax rate for the first nine months of 2020 was 21%, down from 29% in the same period of 2019[558] - The Corporation incurred an income tax expense of approximately $1.2 million for the third quarter of 2020 related to U.S. operations, consistent with the prior year[561] Market and Economic Conditions - The average yield on interest-earning assets was 4.51% for the quarter, down from 5.83% in the same quarter of the previous year[490] - Average one-month LIBOR rate declined by 173 basis points, three-month LIBOR rate declined by 167 basis points, and Prime Rate declined by 180 basis points compared to the same period in 2019[494]