First Ban(FBP) - 2021 Q1 - Quarterly Report

Financial Performance - Total interest income for Q1 2021 was $194,642,000, an increase of 17.7% from $165,264,000 in Q1 2020[298] - Net income attributable to common stockholders for Q1 2021 was $60,481,000, compared to $1,597,000 in Q1 2020, reflecting significant growth[298] - The Corporation reported net income of $61.2 million, or $0.28 per diluted common share, for Q1 2021, compared to $2.3 million, or $0.01 per diluted common share, for Q1 2020[313] - Reported net income for Q1 2021 was $61.15 million, a significant increase from $2.27 million in Q1 2020[329] - Adjusted net income for Q1 2021 was $68.95 million, compared to a loss of $5.95 million in Q1 2020[329] Credit Losses and Provisions - The provision for credit losses showed a benefit of $(15,252,000) in Q1 2021, a substantial improvement from an expense of $77,366,000 in Q1 2020[298] - The provision for credit losses decreased by $92.6 million to a net benefit of $15.2 million in Q1 2021, compared to an expense of $77.4 million in Q1 2020[315] - Provision for credit losses for loans and finance leases was a net benefit of $14.4 million in Q1 2021, compared to an expense of $74.0 million in Q1 2020[369] - The provision for credit losses for residential mortgage loans was a net benefit of $4.2 million in Q1 2021, compared to an expense of $16.2 million in Q1 2020[370] - The provision for credit losses for unfunded loan commitments was a net benefit of $0.7 million in Q1 2021, compared to an expense of $1.8 million in Q1 2020[373] Deposits and Loans - Total deposits reached $16,010,436,000 as of March 31, 2021, an increase of $693,053,000 from December 31, 2020[307] - Total loan production for Q1 2021 was $1.2 billion, up from $802.6 million in Q1 2020, with $209.3 million in SBA PPP loans originated[323] - The total loan portfolio decreased by $129.7 million to $11.7 billion as of March 31, 2021, with reductions in residential mortgage loans and commercial loans[403] - The Corporation originated $209.3 million in PPP loans in the first quarter of 2021, with forgiveness remittances of approximately $175.7 million[413] - As of March 31, 2021, the Corporation had $197.5 million in loans extended to the Puerto Rico government and its municipalities, a slight decrease from $201.3 million as of December 31, 2020[414] Assets and Liabilities - Total assets increased to $19.4 billion as of March 31, 2021, up $620.7 million from December 31, 2020, primarily due to a $763.9 million increase in investment securities[320] - Total liabilities rose to $17.2 billion, an increase of $675.4 million from December 31, 2020, driven by a $472.3 million increase in total deposits[321] - The Corporation's total loans held for investment, net of the allowance for credit losses, amounted to $11.3 billion as of March 31, 2021[402] - The Corporation's total capital ratio was 20.73% as of March 31, 2021, exceeding the well-capitalized threshold of 10%[486] - The Corporation's stockholders' equity was $2.2 billion as of March 31, 2021, a decrease of $54.8 million from December 31, 2020[484] Operational Efficiency - The efficiency ratio for Q1 2021 was 64.33%, compared to 54.60% in Q1 2020, indicating increased operational costs[298] - Non-interest expenses for Q1 2021 were $133.3 million, compared to $92.2 million in Q1 2020, including $11.3 million of merger and restructuring costs related to the BSPR acquisition[318] - Adjusted non-interest expenses for Q1 2021 were $120.8 million, up from $92.1 million in Q1 2020, reflecting a $28.7 million increase primarily due to operations and personnel from the BSPR acquisition[389] Investment and Securities - The total available-for-sale investment securities portfolio as of March 31, 2021, amounted to $5.4 billion, a $759.8 million increase from December 31, 2020[430] - The Corporation's held-to-maturity investment securities portfolio was $189.7 million as of March 31, 2021, relatively flat compared to $189.5 million as of December 31, 2020[432] - The total investment securities available for sale increased from $4.6 billion to $5.4 billion, primarily due to purchases of U.S. agencies MBS and callable debentures[435] Liquidity and Cash Flow - Cash and cash equivalents increased to $1.5 billion as of March 31, 2021, up by $24.3 million from December 31, 2020[477] - Net cash provided by operating activities for Q1 2021 was $112.7 million, compared to $91.5 million in Q1 2020, reflecting a significant increase[479] - Net cash used in investing activities was $768.1 million in Q1 2021, compared to $105.6 million in Q1 2020, primarily due to purchases of U.S. agencies investment securities[480] - Net cash provided by financing activities was $679.7 million in Q1 2021, an increase from $457.7 million in Q1 2020, mainly due to an increase in non-brokered deposits[481] Market and Economic Conditions - The Corporation's ACL model projected a year-over-year decrease in the Commercial Real Estate Price Index of approximately 8.6% in Q2 2021[335] - The Regional Home Price Index in Puerto Rico is expected to increase by approximately 10.6% in Q2 2021[336] - Unemployment rates in Puerto Rico are projected to improve from approximately 8.1% in Q2 2021 to about 7.7% by the end of 2021[338] - The estimated impact of COVID-19 on economic variables is incorporated into the ACL, but the ultimate impact remains uncertain[341] Stock and Equity - The stock repurchase program allows for the repurchase of up to $300 million of outstanding stock, commencing in Q2 2021[301] - The Corporation announced a stock repurchase program of up to $300 million, effective from Q2 2021 through June 30, 2022[485] - The Corporation's credit ratings as of the date were B+ by S&P and Fitch, and B2 by Moody's, indicating a non-investment grade status[476]