First Ban(US:FBP)2025-10-23 13:30Financial Performance - First BanCorp reported a net income of $100.5 million, or $0.63 per diluted share, for Q3 2025, up from $80.2 million, or $0.50 per diluted share, in Q2 2025, and $73.7 million, or $0.45 per diluted share, in Q3 2024[1][7] - Adjusted diluted earnings per share increased by 13% year-over-year, resulting in a strong adjusted return on average assets of 1.70%[2][5] - The Corporation recorded an income tax expense of $5.7 million for Q3 2025, a significant decrease from $22.7 million in Q2 2025, due to a one-time reversal of $16.6 million in valuation allowance[16] - The adjusted net income for the third quarter of 2025 was $81.615 million, compared to $80.180 million in the previous quarter and $73.727 million in the same quarter of 2024[68] - The return on average equity (GAAP) for the third quarter of 2025 was 21.36%, up from 17.79% in the previous quarter and 18.31% in the same quarter of 2024[68] - The efficiency ratio for the quarter was 50.22%, compared to 52.41% in the same quarter last year, indicating improved operational efficiency[79] Loan and Deposit Growth - Total loans grew by $181 million, or 5.6% linked quarter annualized, surpassing the $13 billion loan portfolio threshold for the first time since 2010[3][6] - Core customer deposits increased by $139 million, or 4.4% linked quarter annualized, reflecting healthy growth in non-interest-bearing accounts and time deposits[3][5] - Total deposits increased by $307.0 million, with a $138.7 million rise in deposits excluding brokered CDs and government deposits[45] - Total loan originations amounted to $1.3 billion in Q3 2025, a decrease of $39.2 million compared to Q2 2025[35] - Total loans reached $13,061,230 thousand as of September 30, 2025, an increase from $12,879,859 thousand as of June 30, 2025, indicating a growth of 1.41%[94] Credit Quality and Loss Provisions - The provision for credit losses decreased to $17.6 million from $20.6 million in the previous quarter, primarily due to improvements in the residential mortgage loan portfolio[6][7] - Non-performing assets decreased by $8.6 million to $119.4 million, driven by a reduction in the OREO portfolio balance and nonaccrual loans[6][7] - The allowance for credit losses (ACL) for loans and finance leases was $247.0 million as of September 30, 2025, a decrease of $1.6 million from $248.6 million as of June 30, 2025, with a ratio of 1.89%[24] - The provision for credit losses on loans and finance leases was $18.3 million for Q3 2025, down from $20.4 million in Q2 2025[26] - Net charge-offs were $19.9 million for Q3 2025, or an annualized 0.62% of average loans, compared to $19.1 million, or 0.60%, in Q2 2025[30] Capital and Liquidity - Total capital ratios as of September 30, 2025, were estimated at 17.93% for total capital and 16.67% for common equity tier 1 capital, exceeding required regulatory levels[6][7] - Cash and cash equivalents amounted to $899.6 million, with total available liquidity at 18.10% of total assets, up from 17.58%[6][7] - The Corporation had $6.2 billion available to meet liquidity needs, representing 134% of estimated uninsured deposits[48] - The tangible common equity ratio increased to 9.73% as of September 30, 2025, from 9.56% as of June 30, 2025[50] Interest Income and Margin - Net interest income for Q3 2025 was $217.9 million, an increase of $2 million from Q2 2025, with a net interest margin of 4.57%[5][9] - Interest income on debt securities increased by $2.3 million due to $585.4 million in purchases of higher-yielding available-for-sale debt securities[14] - The average yield on interest-earning assets (GAAP) was 5.93% for the quarter ended September 30, 2025, compared to 5.78% in the same quarter of 2024, showing an increase of 0.15 percentage points[86] - The net interest margin improved to 4.70% for the nine-month period ended September 30, 2025, compared to 4.31% in the prior year, reflecting a positive trend in profitability[90] Non-Interest Income and Expenses - Non-interest income decreased by $0.2 million to $30.8 million in Q3 2025, driven by lower debit and credit card processing income[13] - Total non-interest expenses increased by $1.6 million to $124.9 million in Q3 2025, with adjusted non-interest expenses rising by $3.9 million on a non-GAAP basis[15] - Total non-interest income for the nine-month period ended September 30, 2025, was $97,478,000, a slight decrease of 1.1% from $98,523,000 in the same period of 2024[78] Tax and Regulatory Changes - The Corporation's estimated annual effective tax rate decreased to 22.2% for Q3 2025, attributed to a higher proportion of exempt to taxable income[17] - A reversal of approximately $16.6 million in valuation allowance related to deferred tax assets was recorded due to the enactment of Act 65-2025, reflecting expectations of realizing tax benefits[59]