First Ban(US:FBP)2020-01-28 20:37Financial Data and Key Metrics Changes - Adjusted net income for Q4 2019 was $42.8 million or $0.19 per diluted share, slightly lower than Q3 2019 [8][16] - Pretax pre-provision income was strong at $72 million, consistently over $70 million for the past year [8][16] - Full-year net income was $167 million or $0.76 per share, compared to $201 million in the previous year [27] Business Line Data and Key Metrics Changes - Loan originations and renewals exceeded $1 billion, reaching $1.1 billion in Q4 2019 [9] - The loan portfolio grew by $31 million, primarily from the consumer portfolio [9] - Non-performing assets (NPAs) decreased to 2.5%, a decade low [9] Market Data and Key Metrics Changes - Core deposits increased by $261 million, with growth in both Puerto Rico and Florida [10] - Noninterest income for the quarter was $24 million, an increase of $3 million [21] - Total expenses were $100.23 million, with a significant portion attributed to merger and restructuring costs [22] Company Strategy and Development Direction - The company is focused on integrating pending acquisitions and enhancing service capabilities [13] - A 67% increase in dividends was announced, reflecting confidence in capital generation [10] - The company aims to reduce reliance on brokered CDs, which decreased by $48 million [10] Management's Comments on Operating Environment and Future Outlook - Management noted minimal impact from recent earthquakes, with operations returning to normal quickly [6][7] - The company expects continued support for reconstruction efforts in affected areas, which may positively influence economic activity [30] - Future margin impacts will depend on interest rate movements, with expectations of stabilization [20][34] Other Important Information - The company adopted the new CECL standard for credit losses, expecting an increase of approximately $93 million in the allowance for credit losses [17] - Nonperforming loans decreased by $12.4 million, with significant reductions in commercial and residential mortgage loans [24] Q&A Session Summary Question: Update on loan and deposit growth activity on the Island - Management indicated that the impact from recent events is limited, with no significant changes in overall business volumes [29][30] Question: Expectations for margin outlook - Management expects stabilization in margins if there are no additional Fed fund rate cuts, with a small impact anticipated [34][47] Question: Provisioning expectations for 2020 - Management stated that provisioning will depend on economic assumptions and loan growth, with CECL adoption not expected to significantly alter provisioning levels [36][38] Question: Loan growth outlook for 2020 - Management anticipates continued growth in the mortgage portfolio, with a slowdown in reductions expected later in the year [40][41] Question: Balance sheet cleanup before closing the Santander transaction - Management confirmed that no significant balance sheet cleanup is necessary, focusing instead on optimization [43] Question: Timing for the Santander deal closing - Management projected that the deal closing is expected around the end of the second quarter [44]