Financial Data and Key Metrics Changes - The company reported a solid Return on Assets (ROA) of 1.64% and a pre-provision income growth of 7%, reaching $125 million during the quarter [7] - Net income for the quarter was $77 million, translating to $0.47 per share, compared to $76 million and $0.46 per share in the previous quarter [19] - Net interest income increased to $212 million, up $3 million from the prior quarter, with a net interest margin expansion of 19 basis points to 4.52% [22][26] Business Line Data and Key Metrics Changes - Total loans were slightly down, but core deposit loans remained stable, with a $70 million increase in non-interest bearing deposits [8][10] - Credit performance was stable, with early delinquency down compared to the prior quarter, indicating normalization in consumer credit trends [11][38] - The allowance for credit losses increased by $3.4 million to $247.3 million, reflecting higher qualitative adjustments due to economic uncertainty [39] Market Data and Key Metrics Changes - Year-to-date fiscal government tax collection increased by 3%, and the unemployment rate reached a low not seen in a long time [15] - The company noted a healthy pipeline for loans, sustaining mid-single-digit growth expectations for the year despite market uncertainties [9][18] Company Strategy and Development Direction - The company aims to continue deploying capital opportunistically to improve franchise and shareholder value, with a focus on growing the balance sheet and enhancing product offerings [42][44] - Management emphasized the importance of maintaining disciplined underwriting guidelines while exploring growth opportunities in both commercial and residential sectors [63][71] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about loan growth in the second half of the year, citing a better pipeline compared to the beginning of the year [76][78] - The company remains committed to its mid-single-digit growth guidance, despite acknowledging the unpredictable nature of the economic environment [18][79] Other Important Information - The company resumed its stock purchase program, repurchasing $22 million in the first quarter and planning to complete another $28 million in April [12][43] - The tangible book value per share increased by 7% to $10.64, with the tangible common equity ratio expanding to 9.1% [43] Q&A Session Summary Question: What are the expected yields for the second half of the year? - The expected yields for the second half of the year are projected to be around 1.35% to 1.40% [48] Question: What is the anticipated margin expansion? - The company anticipates a margin expansion of five to seven basis points, assuming a blended rate of new originations between 150 to 300 basis points [49][50] Question: How does the company view loan origination growth? - Management believes both construction and commercial loans will grow, while consumer loans are expected to grow at a slower pace [63] Question: What is the outlook on consumer charge-offs? - The company expects an improvement in consumer charge-off rates year over year, with older vintages that behaved worse being cleared out [81][84] Question: What is the status of the stock buyback program? - The company plans to complete a $50 million buyback by the end of April and retains flexibility for further buybacks if unique opportunities arise [98]

First BanCorp. (NYSE:FBP) Q1 2025 Earnings Conference Call April 24, 2025 12:00 PM ET Company Participants Ramon Rodriguez - Investor Relations Officer Aurelio Aleman - President and CEO Orlando Berges - Executive Vice President and CFO Conference Call Participants Frank Schiraldi - Piper Sandler Brett Rabatin - Hovde Group Steve Moss - Raymond James Kelly Motta - KBW Timur Braziler - Wells Fargo Operator Hello, everyone, and thank you for joining the First BanCorp. First Quarter 2025 Financial Results Conf ...

Financial Data and Key Metrics Changes - The company announced a strategic transaction with Sixth Street, enhancing borrowing capacity and securing up to $500 million for acquisitions [6][7] - The same store portfolio has been reset to 168 buildings, representing 89% of the total in-place portfolio, with Q4 2024 occupancy at approximately 92% [20][48] - The company anticipates a 380 basis points occupancy improvement, equating to over 1 million square feet lease-up [20] Business Line Data and Key Metrics Changes - The Cincinnati acquisitions totaled approximately 762,000 square feet for $61.3 million, contributing to capital deployment efforts [10] - The company has a pipeline exceeding 11 million square feet and $1 billion in potential acquisitions, primarily in existing markets [11] Market Data and Key Metrics Changes - Market conditions remain favorable for buildings under 250,000 square feet, with over 95% of leases concentrated in this segment [9] - The rental growth rate in the company's markets is normalized between 3% and 4%, with mid-teens to low 20% growth expected on rent spreads for small to midsize spaces [32] Company Strategy and Development Direction - The focus for 2025 will be on leasing opportunities and capital deployment, with a strategic emphasis on expanding scale [7][11] - The company is positioned to execute on leasing and capital deployment strategies, leveraging the capital secured from the Sixth Street transaction [11][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tenant challenges and leasing remaining spaces, with strong momentum anticipated for 2025 [8][9] - The company is optimistic about the leasing environment, with significant leasing activity noted towards the end of January and into February [27] Other Important Information - The company has made solid progress on capital deployment and is strategically positioned to expand its scale in existing markets [11] - Management highlighted the importance of value-add acquisitions and the capability to handle multiple projects simultaneously [78] Q&A Session Summary Question: What is the potential for acquisitions and their timing? - The company assumes $360 million of acquisitions at the midpoint, with about $70 million already banked, and expects to deploy the remainder evenly over the coming quarters [17] Question: Can you provide details on the leasing environment and remaining vacancies? - All carryover vacant space has already commenced leasing, with occupancy increasing from 92.5% to 94.3% this year, indicating strong leasing activity [26][27] Question: What are the expectations for the St. Louis lease and tenant renewals? - The tenant has expressed interest in expanding and continuing the lease, despite a reduction in square footage [38] Question: How does the company view the Sixth Street transaction and stock performance? - Management believes the transaction is transformative and is focused on deploying capital effectively, with a buyback strategy in place if stock performance does not improve [56][57] Question: What are the pricing trends in the market? - The company is experiencing negative leverage in the marketplace, with significant competition for acquisitions, indicating a challenging environment for pricing [69][74] Question: Are there any impacts from tariffs or reshoring initiatives? - There is a significant increase in demand for bulk storage requirements due to tariffs, with companies rushing to secure warehouse space [90][91]

Financial Data and Key Metrics Changes - The company reported GAAP net income of approximately $10.6 million for Q3 2024, with diluted net income per share of $0.04 [5] - Distributable earnings were $28.2 million or $0.15 per share after tax, with a dividend of $0.10 per share declared [5][28] - Fee-related revenue increased by 3% from the previous quarter to $82.5 million, driven by inflows into workforce and affordable housing [25][26] Business Line Data and Key Metrics Changes - The company acquired $349 million in multifamily and workforce assets and $966 million in debt strategies during Q3 2024 [9][18] - The debt strategies vertical had its largest lending quarter in over two years, originating 15 loans totaling over $720 million [17] - Multifamily investments year-to-date totaled $784 million, with unlevered IRRs 23% better than pre-pandemic levels [19] Market Data and Key Metrics Changes - Real estate values have decreased by an average of 19% since the 2021 peak, but signs of stabilization are emerging [8][16] - The commercial property price index showed a 3% increase in 2024, indicating a potential recovery in real estate prices [16] - Absorption in multifamily exceeded deliveries, with 193,000 units absorbed compared to 163,000 delivered in Q3 [20][85] Company Strategy and Development Direction - The company plans to capitalize on investment opportunities in a buyer's market, focusing on sectors with secular tailwinds [8][9] - Investments in logistics and distribution capabilities are expected to drive future growth, with a focus on expanding institutional coverage [12][13] - The company is positioning itself for a cyclical recovery by reinvesting in its platform and expanding its investment strategies [28][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the commercial real estate market, citing pent-up demand for transactions and improving debt markets [16][40] - The company anticipates significant improvements in valuation and transaction volumes in the coming quarters [17][19] - Management highlighted the importance of maintaining team morale and investing in talent to support future growth [67][72] Other Important Information - The company has opened an office in Dubai to enhance its Middle Eastern investor base and is expanding its presence in Europe and Asia [13] - The logistics value-add strategy has seen significant investment, with a strong team and local offices established in key markets [11][12] - The company expects to see a stabilization of reserve income to more normalized positive levels in the upcoming quarters [29] Q&A Session Summary Question: Outlook on real estate market recovery and fundraising - Management noted that while transaction flow may slow due to rate changes, there is significant pent-up demand for transactions and a loan maturity wall that will force activity [37][39] Question: Expected improvement in fundraising for Q4 - Management indicated that logistics and other strategies are expected to contribute positively to fundraising, with a potential increase in contributions from existing funds [64][65] Question: Impact of institutional inflows on transaction revenues - Management acknowledged that inflows from institutional investors typically result in lower management fee rates, affecting the overall revenue mix [92][93] Question: Trends in rent and NOI growth across sectors - Management reported a 3.3% quarter-over-quarter rent growth in multifamily workforce housing, with strong absorption rates expected to continue into 2025 [84][86]