First BanCorp Q3 2020 Earnings Report
Key Takeaways
First BanCorp reported a net income of $28.6 million for Q3 2020, influenced by the acquisition of Banco Santander Puerto Rico and various special items. The acquisition contributed significantly to deposits and loans, while also impacting net interest margin and non-interest expenses. Overall, the bank's capital position remained strong.
Net income was $28.6 million, or $0.13 per diluted share.
Completed the acquisition of Banco Santander Puerto Rico effective September 1, 2020, adding $4.2 billion in deposits and $2.6 billion in loans.
Net interest income increased by $13.5 million to $148.7 million.
Non-performing assets decreased by $10.5 million to $293.3 million as of September 30, 2020.
First BanCorp
First BanCorp
First BanCorp Revenue by Geographic Location
Forward Guidance
First BanCorp is optimistic about economic recovery in Puerto Rico, supported by hurricane and pandemic relief funding. They are prepared to support increased economic activity while remaining vigilant to potential economic hurdles related to future COVID-19 restrictions.
Positive Outlook
- Over $60 billion of remaining estimated hurricane and pandemic relief funding in Puerto Rico will contribute to the economic recovery.
- Employment figures continue to trend positive, now at 92% of August 2019 levels.
- Lending activity continues to improve in most products.
- The enhanced funding profile of our combined institution and greater customer reach should help to drive additional loan growth and net interest income.
- Capital deployment opportunities remain a priority as our economic environment stabilizes.
Challenges Ahead
- Potential economic hurdles related to future COVID-19 restrictions.
- The effect of the low interest rate environment in the repricing of variable rate commercial loans and the acceleration of the U.S. agencies MBS premium amortization.
- A higher proportion of low-yielding assets, such as U.S. agencies MBS, callable debentures and interest-bearing cash balances, to total interest-earning assets.
- Uncertainties relating to the impact of the COVID-19 pandemic.
- Cyber-security incidents.
Revenue & Expenses
Visualization of income flow from segment revenue to net income