First Ban(US:FBP)2025-08-07 20:40Financial Performance - In Q2 2025, First BanCorp reported net income of $80.2 million, with a return on average assets of 1.69% and a return on average common equity of 17.79%[218][225]. - For the quarter ended June 30, 2025, net income reported was $80.18 million, an increase from $75.84 million in the same quarter of 2024, representing a growth of 3.5%[237]. - Adjusted net income for the quarter ended June 30, 2025, was $80.18 million, compared to $75.93 million for the same period in 2024, reflecting an increase of 5.9%[237]. - Non-interest income for the second quarter of 2025 was $30.9 million, a decrease of $1.1 million compared to $32.0 million in Q2 2024, primarily due to lower realized gains from purchased income tax credits[257]. - Non-interest expenses for the first half of 2025 amounted to $246.4 million, an increase from $239.6 million in the same period of 2024, with an efficiency ratio improving to 49.78% from 51.84%[260]. Loan and Asset Management - Total loans increased by 6% on a linked-quarter annualized basis, driven by strong commercial loan production in Puerto Rico and Florida[218]. - Total loan production for Q2 2025 was $1.4 billion, an increase of $153.7 million compared to Q2 2024, mainly in commercial and construction loans[230]. - The total loan portfolio before the ACL increased to $12.9 billion as of June 30, 2025, up by $118.0 million from December 31, 2024, with significant growth in commercial and construction loans[268]. - As of June 30, 2025, the Corporation's loans held-for-investment portfolio comprised 48% commercial and construction loans, 30% consumer loans and finance leases, and 22% residential real estate loans[269]. - Total loans held for investment amounted to $12,870,002,000, with residential mortgage loans making up 22% of the total[359]. Credit Loss Provisions - The provision for credit losses for Q2 2025 was $20.6 million, up from $11.6 million in Q2 2024, primarily due to changes in the residential mortgage loan portfolio[229]. - The provision for credit losses for loans and finance leases was $20.4 million in Q2 2025, compared to $11.9 million in Q2 2024[252]. - The provision for credit losses for the consumer loan and finance lease portfolios decreased to $17.8 million in Q2 2025 from $26.7 million in Q2 2024, driven by improvements in macroeconomic variables and lower net charge-offs[253]. - The total provision for credit losses expense for the quarter was $20,381,000, an increase from $11,930,000 in the same quarter last year[357]. - The ACL for loans and finance leases at the end of the period was $248,578,000, compared to $243,942,000 at the end of the previous year[357]. Interest Income and Expenses - Net interest income for Q2 2025 rose by $16.3 million to $215.9 million, with a net interest margin increase of 34 basis points to 4.56%[229]. - Net interest income for the quarter ended June 30, 2025, was $215.9 million, up from $199.6 million in the same quarter of 2024, marking an increase of 8.2%[238]. - Interest expense on interest-bearing liabilities decreased by $10.3 million, driven by a $5.3 million reduction in borrowings and a $5.0 million decrease in interest-bearing deposits[248]. - The average yield on interest-earning assets increased to 5.88% in Q2 2025 from 5.76% in Q2 2024[251]. - The average cost of interest-bearing checking and savings accounts decreased to 1.38% in Q2 2025 from 1.52% in Q2 2024[248]. Asset and Liability Management - Total assets as of June 30, 2025, were approximately $18.9 billion, a decrease of $395.4 million from December 31, 2024[230]. - Total liabilities decreased by $571.6 million to $17.1 billion, driven by a $317.3 million decrease in total deposits[230]. - Total stockholders' equity increased by $176.2 million to $1.8 billion as of June 30, 2025, supported by net income and an increase in the fair value of available-for-sale debt securities[230]. - Cash and cash equivalents decreased by $422.7 million to $736.7 million as of June 30, 2025, compared to December 31, 2024[322]. - The Corporation had $6.0 billion available to meet liquidity needs as of June 30, 2025, representing 133% of estimated uninsured deposits, up from $5.9 billion or 124% as of December 31, 2024[294]. Market and Economic Conditions - The average unemployment rate in Puerto Rico is forecasted at 5.98% for the remainder of 2025, compared to 6.41% for the same period as of December 31, 2024[354]. - Puerto Rico's real GNP grew by 2.1% in fiscal year 2024, with projections of 1.1% growth for fiscal year 2025 and 0.5% for 2026[387]. - Over 80% of Puerto Rico's outstanding debt has been restructured, saving more than $50 billion in debt payments[391]. - The fiscal year 2026 Budget for Puerto Rico is $32.7 billion, with a 1.5% increase in the general fund budget from the previous fiscal year[394]. - Federal funding for education is expected to decline by approximately $1.2 billion in the fiscal year 2026 Budget[394]. Non-Performing Assets - Non-performing assets increased by $9.7 million to $128.0 million as of June 30, 2025, primarily due to inflows to nonaccrual status in the hospitality industry[230]. - Total non-performing assets decreased to $127,991,000 as of June 30, 2025, from $118,252,000 at the end of 2024[363]. - Nonaccrual commercial and construction loans increased by $16.2 million, primarily due to a $12.6 million commercial mortgage loan in Florida and a $4.3 million construction loan in Puerto Rico[368]. - The amount of nonaccrual consumer loans decreased by $2.5 million to $20.3 million as of June 30, 2025[371]. - Total loans in early delinquency (30-89 days past due) amounted to $134.0 million as of June 30, 2025, a decrease of $19.0 million from $153.0 million as of December 31, 2024[374].