First Ban(FBP) - 2024 Q4 - Annual Results

Executive Summary & Financial Highlights First BanCorp. reported strong Q4 2024 results with increased net income and loan growth, achieving record annual revenues and a sustainable dividend increase Earnings Overview First BanCorp. reported a net income of $75.7 million, or $0.46 per diluted share, for Q4 2024, showing a slight increase from Q3 2024 but a decrease compared to Q4 2023. For the full year 2024, net income was $298.7 million, or $1.81 per diluted share, a slight decline from $302.9 million in 2023 | Metric | Q4 2024 | Q3 2024 | Q4 2023 | Year 2024 | Year 2023 | | :------------------- | :------ | :------ | :------ | :-------- | :-------- | | Net Income (Millions USD) | $75.7 | $73.7 | $79.5 | $298.7 | $302.9 | | Diluted EPS (USD) | $0.46 | $0.45 | $0.46 | $1.81 | $1.71 | CEO Commentary & Strategic Outlook The CEO highlighted strong Q4 results driven by solid loan growth, encouraging core customer deposit trends, and robust profitability, with a 13% dividend increase approved for 2025 - Q4 2024 results were strong, marked by solid loan growth across all business segments, positive core customer deposit trends, and robust profitability[2] - Pre-tax pre-provision income grew by 5% on a linked quarter basis, attributed to net interest income expansion and disciplined expense management[2] - For the full year, the Corporation achieved record revenues and a return on average assets above 1.5% for the third consecutive year[4] Key Annual Performance Metrics | Metric | Change/Value | | :------------------------- | :----------- | | Loan Portfolio Expansion (USD) | 4.7% or $569M | | Core Customer Deposits Added (USD) | $267M | | Capital Deployment (% of earnings) | >100% of earnings (4th consecutive year) | | Common Stock Dividend Increase (%) | 13% | Key Financial Highlights (Table) This table provides a snapshot of key financial highlights for Q4 and full year 2024, compared to prior periods, covering income, expenses, and key ratios Financial Highlights (Thousands USD, except per share) | Financial Highlights (Thousands USD, except per share) | Q4 2024 | Q3 2024 | Q4 2023 | Year 2024 | Year 2023 |\n| :------------------------------------ | :--------- | :--------- | :--------- | :--------- | :--------- | | Net Interest Income (Thousands USD) | $209,267 | $202,064 | $196,682 | $807,479 | $797,110 | | Provision for Credit Losses (Thousands USD) | 20,904 | 15,245 | 18,812 | 59,921 | 60,940 | | Non-Interest Income (Thousands USD) | 32,199 | 32,502 | 33,609 | 130,722 | 132,694 | | Non-Interest Expenses (Thousands USD) | 124,533 | 122,935 | 126,605 | 487,073 | 471,428 | | Income Before Income Taxes (Thousands USD) | 96,029 | 96,386 | 84,874 | 391,207 | 397,436 | | Income Tax Expense (Thousands USD) | 20,328 | 22,659 | 5,385 | 92,483 | 94,572 | | Net Income (Thousands USD) | $75,701 | $73,727 | $79,489 | $298,724 | $302,864 | | Net Interest Margin | 4.33% | 4.25% | 4.14% | 4.25% | 4.22% | | Efficiency Ratio | 51.57% | 52.41% | 54.98% | 51.92% | 50.70% | | Diluted EPS (USD) | $0.46 | $0.45 | $0.46 | $1.81 | $1.71 | | Book Value per Share (USD) | $10.19 | $10.38 | $8.85 | $10.19 | $8.85 | | Tangible Book Value per Share (USD) | $9.91 | $10.09 | $8.54 | $9.91 | $8.54 | | Return on Average Equity | 17.77% | 18.31% | 23.69% | 19.09% | 21.86% | | Return on Average Assets | 1.56% | 1.55% | 1.70% | 1.58% | 1.62% | Quarterly Performance Analysis (Q4 2024 vs Q3 2024) This section analyzes First BanCorp.'s Q4 2024 performance compared to Q3 2024, focusing on profitability, balance sheet changes, asset quality, and liquidity and capital Profitability First BanCorp.'s Q4 2024 profitability saw increased net income and net interest income, alongside higher credit loss provisions and non-interest expenses Net Income & EPS Net income increased by $2.0 million to $75.7 million, with diluted EPS remaining stable at $0.46 Net Income and EPS (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :------- | :------ | :------ | :----- | | Net Income (Millions USD) | $75.7M | $73.7M | +$2.0M | | Diluted EPS (USD) | $0.46 | $0.45 | +$0.01 | Net Interest Income & Margin Net interest income increased by $7.2 million to $209.3 million, and the net interest margin improved by 8 basis points to 4.33% Net Interest Income and Margin (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :---------------- | :-------- | :-------- | :----- | | Net Interest Income (Millions USD) | $209.3M | $202.1M | +$7.2M | | Net Interest Margin (%) | 4.33% | 4.25% | +0.08% | Provision for Credit Losses Provision for credit losses increased by $5.7 million to $20.9 million, primarily due to loan growth, particularly in the commercial loan portfolio Provision for Credit Losses (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :-------------------------- | :-------- | :-------- | :----- | | Provision for Credit Losses (Millions USD) | $20.9M | $15.2M | +$5.7M | | Primary Driver | Loan growth (commercial loan portfolio) | | Economic Outlook Impact | Positive outlook, but less impact than prior quarter | Non-Interest Income Non-interest income slightly decreased by $0.3 million to $32.2 million Non-Interest Income (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :---------------- | :-------- | :-------- | :----- | | Non-Interest Income (Millions USD) | $32.2M | $32.5M | -$0.3M | | Key Drivers | Decrease in insurance commission income, partially offset by increase in card and processing income | Non-Interest Expenses Non-interest expenses increased by $1.6 million to $124.5 million, while the efficiency ratio improved to 51.57% Non-Interest Expenses and Efficiency Ratio (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :------------------ | :-------- | :-------- | :----- | | Non-Interest Expenses (Millions USD) | $124.5M | $122.9M | +$1.6M | | Efficiency Ratio (%) | 51.57% | 52.41% | -0.84% | Income Taxes Income tax expense decreased by $2.4 million to $20.3 million, primarily due to a lower effective tax rate from a higher proportion of exempt income Income Tax Expense (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :--------------- | :-------- | :-------- | :----- | | Income Tax Expense (Millions USD) | $20.3M | $22.7M | -$2.4M | | Reason | Lower effective tax rate due to higher proportion of exempt income | Balance Sheet Overview The balance sheet showed growth in total loans and core deposits, with a notable increase in non-interest-bearing deposits, while brokered CDs decreased Total Loans Total loans grew by $303.2 million to $12.8 billion, primarily driven by growth in the commercial loan portfolio across all regions Total Loans (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :--------- | :-------- | :-------- | :----- | | Total Loans (Billions USD) | $12.8B | $12.5B | +$303.2M | | Driver | Commercial loan portfolio growth across all regions | Deposits Core deposits increased by $197.9 million to $12.9 billion, including a significant rise in non-interest-bearing deposits, while brokered CDs decreased Deposit Trends (QoQ) | Deposit Type | Q4 2024 | Q3 2024 | Change | | :--------------------------- | :-------- | :-------- | :----- | | Core Deposits (Billions USD) | $12.9B | $12.7B | +$197.9M | | Non-Interest-Bearing Deposits (Millions USD) | | | +$296.8M | | Government Deposits (Billions USD) | $3.5B | $3.1B | +$367.9M | | Brokered CDs (Millions USD) | $478.1M | $520.0M | -$41.9M | Asset Quality Asset quality metrics showed a slight improvement with decreased non-performing assets and a stable net charge-off ratio, despite a decline in ACL coverage Non-Performing Assets Non-performing assets decreased by $0.8 million to $118.3 million Non-Performing Assets (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :-------------------- | :-------- | :-------- | :----- | | Non-Performing Assets (Millions USD) | $118.3M | $119.1M | -$0.8M | | Driver | Decrease in OREO and nonaccrual commercial/construction loans | Early Delinquency Total loans in early delinquency increased by $9.6 million to $153.0 million, driven by consumer and residential mortgage loans Early Delinquency (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :---------------------- | :-------- | :-------- | :----- | | Total Early Delinquency (Millions USD) | $153.0M | $143.4M | +$9.6M | | Consumer Loans (Millions USD) | | | +$14.1M | | Residential Mortgage Loans (Millions USD) | | | +$0.9M | | Commercial & Construction Loans (Millions USD) | | | -$5.4M | Allowance for Credit Losses (ACL) The ACL coverage ratio decreased to 1.91% from 1.98% ACL Coverage Ratio (QoQ) | Metric | Q4 2024 | Q3 2024 | | :----------------- | :------ | :------ | | ACL Coverage Ratio (%) | 1.91% | 1.98% | Net Charge-Offs The annualized net charge-offs to average loans ratio remained flat at 0.78% Net Charge-Offs Ratio (QoQ) | Metric | Q4 2024 | Q3 2024 | | :----------------------------------- | :------ | :------ | | Annualized Net Charge-Offs to Average Loans Ratio (%) | 0.78% | 0.78% | Liquidity and Capital Liquidity improved with increased cash and cash equivalents, while capital ratios remained strong, exceeding regulatory requirements Liquidity Position Cash and cash equivalents increased significantly to $1.2 billion, with available liquidity at 17.27% of total assets Liquidity Metrics (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :---------------------- | :-------- | :-------- | :----- | | Cash & Cash Equivalents (Billions USD) | $1.2B | $685.4M | +$514.6M | | Available Liquidity (% of Total Assets) | 17.27% | 18.43% | -1.16% | Capital Ratios Capital ratios remained strong and exceeded regulatory levels, with the Corporation repurchasing junior subordinated debentures and paying common stock dividends Capital Ratios (QoQ) | Capital Ratio | Q4 2024 | Q3 2024 | | :------------ | :------ | :------ | | Total Capital (%) | 18.02% | 18.25% | | CET1 Capital (%) | 16.32% | 16.18% | | Tier 1 Capital (%) | 16.32% | 16.18% | | Leverage Ratio (%) | 11.07% | 10.96% | - Repurchased $50.0 million of junior subordinated debentures and paid $26.1 million in common stock dividends[8] Tangible Common Equity (Non-GAAP) The tangible common equity ratio decreased to 8.44% from 8.79%, primarily due to a decrease in the fair value of available-for-sale debt securities Tangible Common Equity Ratio (QoQ) | Metric | Q4 2024 | Q3 2024 | | :-------------------------- | :------ | :------ | | Tangible Common Equity Ratio (%) | 8.44% | 8.79% | | Driver | Decrease in fair value of available-for-sale debt securities | Detailed Statement of Financial Condition This section provides a detailed analysis of First BanCorp.'s balance sheet, including assets, liabilities, and stockholders' equity, as of December 31, 2024 Assets Analysis Total assets increased by $433.8 million to approximately $19.3 billion, driven by cash and loans, partially offset by decreased investment securities Total Assets & Loan Originations Total assets grew to $19.3 billion, with total loan originations increasing by $352.1 million to $1.5 billion, mainly in commercial and construction loans Total Assets and Loan Originations (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :---------------------- | :----------- | :----------- | :----- | | Total Assets (Billions USD) | ~$19.3B | ~$18.8B | +$433.8M | | Total Loan Originations (Billions USD) | $1.5B | $1.1B | +$352.1M | | PR Loan Originations (Billions USD) | $1.2B | $902.2M | +$272.1M | | VI Loan Originations (Millions USD) | $65.1M | $34.7M | +$30.4M | | FL Loan Originations (Millions USD) | $298.1M | $248.4M | +$49.7M | Cash and Cash Equivalents Cash and cash equivalents increased by $474.0 million, primarily due to increased deposits and investment securities inflows, partially offset by loan growth and debenture redemption Cash and Cash Equivalents (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :---------------------- | :-------- | :-------- | :----- | | Cash & Cash Equivalents (Millions USD) | +$474.0M | | | | Drivers | Increase in deposits, net cash inflows from investment securities portfolio | - Redemption of $50.0 million in outstanding TruPS contributed to the change in cash, aligning with capital structure optimization and reduced financing costs[43] Investment Securities Investment securities decreased by $334.9 million, mainly due to maturities, principal repayments, and fair value decreases, partially offset by new purchases Investment Securities (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :---------------------- | :-------- | :-------- | :----- | | Investment Securities (Millions USD) | -$334.9M | | | | Maturities (Millions USD) | $367.5M | | | | Principal Repayments (Millions USD) | $105.2M | | | | Decrease in Fair Value (AFS) (Millions USD) | $82.3M | | | | Purchases (U.S. agencies MBS) (Millions USD) | $222.1M | | | Total Loans Total loans increased by $303.2 million, with growth across all regions and primarily in commercial and construction loans Total Loans by Portfolio (QoQ) | Loan Type | Change | | :------------------------ | :----- | | Total Loans (Millions USD) | +$303.2M | | Commercial & Construction Loans (Millions USD) | +$275.9M | | Consumer Loans (Millions USD) | +$16.4M | | Residential Mortgage Loans (Millions USD) | +$10.9M | - Loan growth was observed across all regions: Puerto Rico (+$127.9 million), Florida (+$126.9 million), and Virgin Islands (+$48.4 million)[43] Liabilities Analysis Total liabilities increased by $465.4 million to approximately $17.6 billion, driven by deposits and offset by decreased other borrowings Total Liabilities & Deposits Total liabilities increased to $17.6 billion, with total deposits rising by $523.9 million due to government and core deposit growth, while brokered CDs decreased Total Liabilities and Deposits (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :---------------- | :----------- | :----------- | :----- | | Total Liabilities (Billions USD) | ~$17.6B | ~$17.2B | +$465.4M | | Total Deposits (Billions USD) | ~$16.9B | ~$16.3B | +$523.9M | | Government Deposits (Millions USD) | | | +$367.9M | | Core Deposits (excl. brokered/gov) (Millions USD) | | | +$197.9M | | Non-Interest-Bearing Deposits (Millions USD) | | | +$296.8M | | Brokered CDs (Millions USD) | $478.1M | $520.0M | -$41.9M | - The decrease in brokered CDs reflects $174.1 million in maturing short-term brokered CDs with an average cost of 5.26% being paid off, partially offset by $132.2 million of new issuances at an average cost of 4.14%[45] Other Borrowings Other borrowings decreased by $50.0 million due to the redemption of outstanding junior subordinated debentures Other Borrowings (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :-------------- | :-------- | :-------- | :----- | | Other Borrowings (Millions USD) | $61.7M | $111.7M | -$50.0M | | Reason | Redemption of outstanding TruPS | Stockholders' Equity Total stockholders' equity decreased by $31.6 million to $1.7 billion, primarily due to fair value changes in available-for-sale debt securities and common stock dividends Stockholders' Equity (QoQ) | Metric | Q4 2024 | Q3 2024 | Change | | :--------------------- | :-------- | :-------- | :----- | | Total Stockholders' Equity (Billions USD) | $1.7B | $1.7B | -$31.6M | | Key Factors | -$82.3M from fair value of AFS debt securities, -$26.3M in common stock dividends, partially offset by net income | Liquidity Details Core liquidity, including cash and high-quality liquid securities, totaled $2.4 billion, with significant borrowing capacity available to meet liquidity needs Liquidity Metrics | Metric | Q4 2024 | Q3 2024 | | :----------------------------------- | :-------- | :-------- | | Cash & Cash Equivalents (Billions USD) | $1.2B | $685.4M | | Total Core Liquidity (Billions USD) | $2.4B | $2.5B | | Core Liquidity (% of Total Assets) | 12.54% | 13.32% | | Available FHLB Lending Capacity (Millions USD) | $912.4M | | | Available FED Borrower-In-Custody Program (Billions USD) | ~$2.6B | | | Total Available Liquidity (Billions USD) | $5.9B | | | Total Available Liquidity (% of Uninsured Deposits) | 124% | | Deposit Composition | Deposit Type | Q4 2024 | Q3 2024 | | :----------------------------------------- | :-------- | :-------- | | Total Deposits (excl. brokered CDs) (Billions USD) | $16.4B | $15.8B | | Government Deposits (fully collateralized) (Billions USD) | $3.5B | $3.2B | | Estimated Uninsured Deposits (Billions USD) | $4.8B | $4.6B | | Uninsured Deposits (% of Total Deposits) | 29.36% | 29.25% | Tangible Common Equity (Non-GAAP) Reconciliation The tangible common equity ratio decreased to 8.44% due to a decline in the fair value of available-for-sale debt securities and an increase in tangible assets Tangible Common Equity Reconciliation (Thousands USD, except ratios) | Metric | Dec 31, 2024 | Sep 30, 2024 | Dec 31, 2023 | | :----------------------------------- | :----------- | :----------- | :----------- | | Total Common Equity - GAAP (Thousands USD) | $1,669,236 | $1,700,885 | $1,497,609 | | Goodwill (Thousands USD) | (38,611) | (38,611) | (38,611) | | Other Intangible Assets (Thousands USD) | (6,967) | (8,260) | (13,383) | | Tangible Common Equity - Non-GAAP (Thousands USD) | $1,623,658 | $1,654,014 | $1,445,615 | | Total Assets - GAAP (Thousands USD) | $19,292,921 | $18,859,170 | $18,909,549 | | Goodwill (Thousands USD) | (38,611) | (38,611) | (38,611) | | Other Intangible Assets (Thousands USD) | (6,967) | (8,260) | (13,383) | | Tangible Assets - Non-GAAP (Thousands USD) | $19,247,343 | $18,812,299 | $18,857,555 | | Tangible Common Equity Ratio - Non-GAAP (%) | 8.44% | 8.79% | 7.67% | | Tangible Book Value per Common Share - Non-GAAP (USD) | $9.91 | $10.09 | $8.54 | Exposure to Puerto Rico Government This section details First BanCorp.'s direct and indirect exposure to the Puerto Rico government, its municipalities, and public corporations Direct Exposure Direct exposure to the Puerto Rico government increased slightly to $288.6 million, primarily comprising loans and obligations to municipalities and public corporations Direct Exposure to Puerto Rico Government (Thousands USD) | Category | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------- | :----------- | :----------- | | Total Direct Exposure (Thousands USD) | $288,600 | $285,500 | | Loans/Obligations of Municipalities (property tax) (Thousands USD) | $195,800 | | | Loans/Obligations of Municipalities (specific revenues) (Thousands USD) | $51,100 | | | Loan to PR Electric Power Authority Affiliate (Thousands USD) | $8,800 | | | Loans to Public Corporations (Thousands USD) | $30,000 | | | PRHFA Residential MBS (amortized cost) (Thousands USD) | $2,900 | | - The exposure includes $92.4 million in financing arrangements with Puerto Rico municipalities, underwritten as commercial loans but issued in bond form and accounted for as held-to-maturity debt securities[55] Indirect Exposure Indirect exposure primarily consists of public sector deposits, which increased to $3.1 billion, alongside construction loans funded through conduit financing structures Indirect Exposure to Puerto Rico Government (Thousands USD) | Category | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------- | :----------- | :----------- | | Public Sector Deposits in Puerto Rico (Thousands USD) | $3,100,000 | $2,700,000 | | Composition of Public Sector Deposits (%) | 17% from municipalities, 83% from public corporations/central government/US federal agencies | | Construction Loans (LIHTC/CDBG-DR) (Thousands USD) | $59,200 | $40,200 | | Unfunded Loan Commitments (LIHTC/CDBG-DR) (Thousands USD) | $94,200 | | Non-GAAP Financial Measures This section explains First BanCorp.'s use of non-GAAP financial measures to provide additional insights into underlying performance and facilitate comparability Overview of Non-GAAP Disclosures Non-GAAP financial measures are utilized to enhance analysis of business trends, performance, and for budgeting and long-term planning processes - Non-GAAP financial measures are used to enhance analysis of business trends and performance, particularly during economic stress[58] - These measures are utilized in budgeting and long-term planning processes[58] - Non-GAAP measures include adjusted net income, adjusted EPS, adjusted pre-tax, pre-provision income, tangible common equity, tangible book value per common share, and certain capital ratios[59] Special Items Affecting Financial Results Financial results for 2024 and 2023 included special items such as FDIC assessment expenses, legal settlement gains, and gains on early extinguishment of debt Special Items (Millions USD) | Special Item | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :---------------------------- | :---------------------- | :---------------------- | | FDIC Special Assessment Expense (pre-tax) (Millions USD) | $1.1 | $6.3 | | FDIC Special Assessment Expense (after-tax) (Millions USD) | $0.7 | $3.9 | | Gain Recognized from Legal Settlement (pre-tax) (Millions USD) | - | $3.6 | | Gain Recognized from Legal Settlement (after-tax) (Millions USD) | - | $2.3 | | Gain on Early Extinguishment of Debt (pre-tax) (Millions USD) | - | $1.6 | Adjusted Pre-Tax, Pre-Provision Income Adjusted pre-tax, pre-provision income is a non-GAAP metric used to analyze underlying performance trends by excluding credit loss provisions and other special items - This metric helps analyze underlying performance trends, especially during economic stress[63] - It represents income before income taxes, adjusted to exclude provisions for credit losses on loans, unfunded loan commitments, debt securities, and other special items[63] Tangible Common Equity Ratio and Tangible Book Value per Common Share These non-GAAP measures evaluate capital adequacy for banking organizations with significant goodwill or intangible assets by adjusting total common equity and total assets - Tangible common equity is total common equity less goodwill and other intangible assets[64] - Tangible assets are total assets less goodwill and other intangible assets[64] - These metrics are used to compare capital adequacy of banking organizations with significant goodwill or intangible assets[64] Net Interest Income Excluding Valuations, and on a Tax-Equivalent Basis Net interest income, interest rate spread, and net interest margin are reported on a tax-equivalent basis, excluding derivative fair value changes, to facilitate comparability - Excludes changes in the fair value of derivative instruments, which do not affect interest due or earned[65] - Tax-equivalent adjustment recognizes income tax savings from tax-exempt assets, making yields comparable to taxable assets[65] - This is a standard practice in the banking industry to facilitate comparison with peers[65] Reconciliation of Net Income to Adjusted Net Income (Non-GAAP) This section reconciles GAAP net income and diluted EPS to adjusted non-GAAP figures by excluding special items like FDIC assessment expenses and legal settlement gains Net Income Reconciliation (Thousands USD, except per share) | Metric | Q4 2024 | Q3 2024 | Q4 2023 | Year 2024 | Year 2023 | | :----------------------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Net Income, as Reported (GAAP) (Thousands USD) | $75,701 | $73,727 | $79,489 | $298,724 | $302,864 | | Adjustments: | | | | | | | FDIC Special Assessment Expense (Thousands USD) | - | - | 6,311 | 1,099 | 6,311 | | Gain Recognized from Legal Settlement (Thousands USD) | - | - | - | - | (3,600) | | Gain on Early Extinguishment of Debt (Thousands USD) | - | - | - | - | (1,605) | | Income Tax Impact of Adjustments (Thousands USD) | - | - | (2,367) | (412) | (1,017) | | Adjusted Net Income Attributable to Common Stockholders (Non-GAAP) (Thousands USD) | $75,701 | $73,727 | $83,433 | $299,411 | $302,953 | | Earnings Per Share - Diluted (GAAP) (USD) | $0.46 | $0.45 | $0.46 | $1.81 | $1.71 | | Adjusted Earnings Per Share - Diluted (Non-GAAP) (USD) | $0.46 | $0.45 | $0.49 | $1.81 | $1.71 | Reconciliation of Income Before Income Taxes to Adjusted Pre-Tax, Pre-Provision Income (Non-GAAP) This table reconciles income before income taxes to adjusted pre-tax, pre-provision income by adjusting for credit loss provisions and special items Adjusted Pre-Tax, Pre-Provision Income Reconciliation (Thousands USD) | Metric | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Year 2024 | Year 2023 | | :----------------------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Income Before Income Taxes (Thousands USD) | $96,029 | $96,386 | $101,379 | $97,413 | $84,874 | $391,207 | $397,436 | | Add: Provision for Credit Losses Expense (Thousands USD) | 20,904 | 15,245 | 11,605 | 12,167 | 18,812 | 59,921 | 60,940 | | Add: FDIC Special Assessment Expense (Thousands USD) | - | - | 152 | 947 | 6,311 | 1,099 | 6,311 | | Less: Gain Recognized from Legal Settlement (Thousands USD) | - | - | - | - | - | - | (3,600) | | Less: Gain on Early Extinguishment of Debt (Thousands USD) | - | - | - | - | - | - | (1,605) | | Adjusted Pre-Tax, Pre-Provision Income (Thousands USD) | $116,933 | $111,631 | $113,136 | $110,527 | $109,997 | $452,227 | $459,482 | | Change from Most Recent Prior Period (Amount, Thousands USD) | $5,302 | ($1,505) | $2,609 | $530 | ($3,389) | ($7,255) | ($15,798) | | Change from Most Recent Prior Period (Percentage) | 4.7% | -1.3% | 2.4% | 0.5% | -3.0% | -1.6% | -3.3% | Corporate Information & Outlook This section provides details on First BanCorp.'s upcoming conference call, a safe harbor statement regarding forward-looking information, and general corporate and investor relations contact information Conference Call / Webcast Information First BanCorp.'s senior management will host an earnings conference call and live webcast on January 23, 2025, with details provided for access and replay - Conference call and live webcast scheduled for January 23, 2025, at 10:00 a.m. (Eastern Time)[69] - Access via fbpinvestor.com or dial-in (833) 470-1428 / (404) 975-4839, participant access code 960930[69] - Webcast replay available until January 23, 2026; telephone replay until February 22, 2025 (access code 745161)[69] Safe Harbor Statement This standard safe harbor statement cautions readers about forward-looking statements and outlines various factors that could cause actual results to differ materially from projections - Forward-looking statements are subject to risks, uncertainties, estimates, and assumptions that are difficult to predict[70] - Key risk factors include the global interest rate environment, inflation, volatility in the financial services industry, changes in fiscal and monetary policies, and the ability to retain core deposits[70] - Other risks include adverse changes in economic conditions in Puerto Rico and the U.S., cybersecurity incidents, impacts of natural disasters, and regulatory changes[70] About First BanCorp. First BanCorp. is the parent corporation of FirstBank Puerto Rico, operating in multiple regions, with its common stock trading on the NYSE under FBP - First BanCorp. is the parent company of FirstBank Puerto Rico and FirstBank Insurance Agency[71] - FirstBank Puerto Rico operates in Puerto Rico, the U.S., British Virgin Islands, and Florida[71] - Common stock trades on the NYSE under the symbol FBP[71] Investor Relations Contact Ramon Rodriguez, Senior Vice President of Corporate Strategy and Investor Relations, serves as the primary contact for investor inquiries - Contact: Ramon Rodriguez, Senior Vice President, Corporate Strategy and Investor Relations[71] - Email: ramon.rodriguez@firstbankpr.com, Phone: (787) 729-8200 Ext. 82179[71] Exhibit A - Supplementary Financial Tables This exhibit provides a series of supplementary financial tables detailing First BanCorp.'s consolidated statements, selected data, and reconciliations for various periods Condensed Consolidated Statements of Financial Condition (Table 1) Table 1 presents the condensed consolidated statements of financial condition for First BanCorp., detailing assets, liabilities, and stockholders' equity at period-end - Provides a detailed breakdown of assets, liabilities, and stockholders' equity at quarter-end and year-end[72] - Key asset categories include cash, investment securities, and loans. Key liability categories include deposits and borrowings[72] Condensed Consolidated Statements of Income (Table 2) Table 2 outlines the condensed consolidated statements of income, showing interest income and expense, non-interest income and expenses, provision for credit losses, and net income - Details interest income, interest expense, net interest income, and provision for credit losses[73] - Includes non-interest income components (e.g., service charges, mortgage banking, card and processing income) and non-interest expenses (e.g., compensation, occupancy, professional fees)[73] Selected Financial Data (Table 3) Table 3 presents selected financial data, including per common share results, profitability ratios, capital ratios, liquidity ratios, and asset quality metrics - Summarizes key per share metrics, profitability, capital, liquidity, and asset quality ratios[74] - Includes non-GAAP measures like tangible book value per common share and tax-equivalent net interest margin[74][75] Reconciliation of Net Interest Income to Net Interest Income Excluding Valuations and on a Tax-Equivalent Basis (Table 4) Table 4 reconciles GAAP net interest income to adjusted net interest income, interest rate spread, and net interest margin, both excluding derivative valuations and on a tax-equivalent basis - Shows adjustments for unrealized gains/losses on derivative instruments and tax-equivalent adjustments[77][78] - Provides average balances for interest-earning assets and interest-bearing liabilities, along with corresponding average yields and rates[78] Quarterly Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis) (Table 5) Table 5 presents quarterly average volumes, interest income/expense, and average rates for interest-earning assets and interest-bearing liabilities on a tax-equivalent basis - Breaks down average volumes and rates for various interest-earning assets (e.g., investments, loans) and interest-bearing liabilities (e.g., deposits, borrowings)[79] - Includes interest income from prepayment penalties and late fees on loans[81] Year-to-Date Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis) (Table 6) Table 6 provides a year-to-date view of average interest-earning assets and interest-bearing liabilities, along with their respective interest income/expense and average rates, on a tax-equivalent basis - Offers a year-over-year comparison of average volumes and rates for interest-earning assets and interest-bearing liabilities[82] - Highlights the impact of tax-equivalent adjustments on yields and rates[82] Loan Portfolio by Geography (Table 7) Table 7 details the Corporation's loan portfolio by geographic region and loan type for December 31, 2024, September 30, 2024, and December 31, 2023 - Provides a geographical breakdown of the loan portfolio, including loans held for investment and loans held for sale[84] - Shows the distribution of residential mortgage, construction, commercial mortgage, C&I, finance leases, and consumer loans across regions[84] Non-Performing Assets by Geography (Table 8) Table 8 presents non-performing assets by geographic region, including nonaccrual loans, OREO, and other repossessed property - Details nonaccrual loans by type (residential mortgage, construction, commercial, consumer) and region[85] - Includes information on past due loans 90 days and still accruing, and notes exclusions for purchased-credit deteriorated (PCD) loans[85][86][87] Allowance for Credit Losses on Loans and Finance Leases (Table 9) Table 9 summarizes the activity of the allowance for credit losses (ACL) on loans and finance leases, including beginning and ending balances, provision, and net charge-offs - Shows the movement in ACL, including the impact of ASU 2022-02 adoption[88] - Provides ratios such as ACL to total loans held for investment and provision for credit losses to net charge-offs[88] Annualized Net Charge-Offs (Recoveries) to Average Loans (Table 10) Table 10 presents the annualized net charge-offs (recoveries) to average loans ratio by loan type for quarterly and year-to-date periods - Breaks down net charge-off ratios for residential mortgage, construction, commercial mortgage, C&I, and consumer loans[89] - Notes the impact of a $10.0 million recovery from a bulk sale of fully charged-off consumer loans on the 2024 year-to-date ratios[89] Deposits (Table 11) Table 11 provides a detailed breakdown of deposits, including time deposits, interest-bearing accounts, non-interest-bearing deposits, and brokered CDs - Categorizes deposits into interest-bearing and non-interest-bearing types[90] - Separately identifies brokered CDs and government deposits for clarity on funding sources[90]