The main variances of the total ACL by main categories are discussed below:
Allowance for Credit Losses for Loans and Finance Leases
As of March 31, 2024, the ACL for loans and finance leases was $263.6 million, an increase of $1.8 million, from $261.8 million as of December 31, 2023. The ratio of the ACL for loans and finance leases to total loans held for investment was 2.14% as of March 31, 2024, compared to 2.15% as of December 31, 2023. The ratio of the total ACL for loans and finance leases to nonaccrual loans held for investment was 283.54% as of March 31, 2024, compared to 312.81% as of December 31, 2023.
The ACL for commercial and construction loans increased by $1.9 million to $73.3 million as of March 31, 2024, when compared to December 31, 2023, mainly due to increased volume, particularly in the commercial and industrial loan portfolio, coupled with a deterioration on the economic outlook of certain macroeconomic variables.
The ACL for consumer loans increased by $0.6 million mainly due to increases in historical charge-off levels, mainly in credit cards, and increases in portfolio volumes in the auto loan and finance leases portfolios. Such increase was partially offset by updated macroeconomic variables, mainly in the projection of unemployment rates across all regions.
Meanwhile, the ACL for residential mortgage loans decreased by $0.7 million, mainly due to updated macroeconomic variables, mainly in the projection of unemployment rates, partially offset by newly originated loans that have a longer life.
The provision for credit losses on loans and finance leases was $12.9 million for the first quarter of 2024, compared to $19.0 million in the fourth quarter of 2023.
| - | Provision for credit losses for the consumer loan and finance lease portfolios was an expense of $16.2 million for the first quarter of 2024, compared to an expense of $24.0 million for the fourth quarter of 2023. The decrease in provision expense reflects a $9.5 million recovery associated with the aforementioned bulk sale during the first quarter of 2024 and updated macroeconomic variables, partially offset by increases in charge-off levels, mainly in credit cards, and increases in portfolio volume. |
| - | Provision for credit losses for the residential mortgage loan portfolio was a net benefit of $0.5 million for the first quarter of 2024, compared to a net benefit of $0.1 million for the fourth quarter of 2023. The net benefit recorded during the first quarter of 2024 was mainly due to updated macroeconomic variables, partially offset by newly originated loans that have a longer life. |
| - | Provision for credit losses for the commercial and construction loan portfolios was a net benefit of $2.8 million for the first quarter of 2024, compared to a net benefit of $4.9 million for the fourth quarter of 2023. The net benefit recorded during the first quarter of 2024 was mainly driven by the aforementioned $5.0 million recovery of a commercial and industrial loan in the Puerto Rico region, partially offset by a deterioration on the economic outlook of certain macroeconomic variables and increased volume. Meanwhile, the net benefit recorded during the fourth quarter of 2023 was mainly driven by an improvement on the economic outlook of certain macroeconomic variables, such as the commercial real estate (“CRE”) price index, which was partially offset by increased volume particularly in the commercial and industrial loan portfolio. |
The following table presents ratios of annualized net charge-offs (recoveries) to average loans held-in-portfolio for the last five quarters:
| | Quarter Ended | |
| | March 31, 2024 | | December 31, 2023 | | September 30, 2023 | | June 30, 2023 | | March 31, 2023 | |
| | | | | | | | | | | |
| Residential mortgage | 0.03% | | -0.04% | | -0.01% | | 0.06% | | 0.07% | |
| Construction | -0.02% | | 0.01% | | -3.18% | | -0.99% | | -0.17% | |
| Commercial mortgage | -0.01% | | 0.09% | | -0.01% | | 0.01% | | -0.03% | |
| Commercial and Industrial | -0.59% | | 0.00% | | -0.02% | | 0.87% | | 0.00% | |
| Consumer loans and finance leases | 1.70% | (1) | 2.26% | | 1.79% | | 1.51% | | 1.54% | |
| Total loans | 0.37% | (1) | 0.69% | | 0.48% | | 0.67% | | 0.46% | |
| (1) | The $9.5 million recovery associated with the bulk sale of fully charged-off consumer loans during the first quarter of 2024 reduced the consumer loans and finance leases and total net charge-offs to related average loans for the quarter ended March 31, 2024 by 104 basis points and 31 basis points, respectively. |
The ratios above are based on annualized net charge-offs and are not necessarily indicative of the results expected in subsequent periods.
Net charge-offs were $11.2 million for the first quarter of 2024, or an annualized 0.37% of average loans, compared to $20.8 million, or an annualized 0.69% of average loans, in the fourth quarter of 2023. The $9.6 million decrease in net charge-offs was mainly driven by a $9.5 million recovery associated with the aforementioned bulk sale of fully charged-off consumer loans during the first quarter of 2024, which reduced the total net charge-offs ratio by 31 basis points, and a $5.0 million recovery associated with a commercial and industrial loan in the Puerto Rico region, partially offset by an increase in consumer loans charge-offs reflected in the auto loans, finance leases and credit cards portfolios.
Allowance for Credit Losses for Unfunded Loan Commitments
As of March 31, 2024, the ACL for off-balance sheet credit exposures increased to $4.9 million, compared to $4.6 million as of December 31, 2023
Allowance for Credit Losses for Debt Securities
As of March 31, 2024, the ACL for debt securities was $1.6 million, of which $1.2 million related to Puerto Rico municipal bonds classified as held-to-maturity, compared to $2.7 million and $2.2 million, respectively, as of December 31, 2023.
Cash and cash equivalents increased by $21.4 million to $684.5 million as of March 31, 2024. When adding $2.0 billion of free high-quality liquid securities that could be liquidated or pledged within one day, total core liquidity amounted to $2.7 billion as of March 31, 2024, or 14.45% of total assets, compared to $2.8 billion, or 14.93% of total assets as of December 31, 2023. In addition, as of March 31, 2024, the Corporation had $972.5 million available for credit with the FHLB based on the value of collateral pledged with the FHLB. As such, the basic liquidity ratio (which includes cash, free high-quality liquid assets such as U.S. government and government-sponsored enterprises’ obligations that could be liquidated or pledged within one day, and available secured lines of credit with the FHLB to total assets) was approximately 19.60% as of March 31, 2024, compared to 19.82% as of December 31, 2023.
In addition to the aforementioned available credit from the FHLB, the Corporation also maintains borrowing capacity at the FED Discount Window Program. The Corporation does not consider borrowing capacity from the FED Discount Window as a primary source of liquidity but had approximately $1.6 billion available for funding under the FED’s Borrower-In-Custody (“BIC”) Program as of March 31, 2024. Also, the Corporation has access to financing with other counterparties through repurchase agreements. Combined, as of March 31, 2024, the Corporation had $5.4 billion, or 121% of estimated uninsured deposits (excluding fully collateralized government deposits), available to meet liquidity needs.
The Corporation’s total deposits, excluding brokered CDs, amounted to $15.8 billion as of each of March 31, 2024 and December 31, 2023, which includes government deposits of $3.2 billion that are fully collateralized. Excluding fully collateralized government deposits and FDIC-insured deposits, as of March 31, 2024, the estimated amount of uninsured deposits amounted to $4.4 billion, which represent 27.93% of total deposits, compared to $4.4 billion, or 28.13% of total deposits, as of December 31, 2023. Refer to Table 10 in the accompanying tables (Exhibit A) for additional information about the deposits composition.
STATEMENT OF FINANCIAL CONDITION
Total assets were approximately $18.9 billion as of March 31, 2024, down $18.6 million from December 31, 2023.
The following variances within the main components of total assets are noted:
| • | A $21.4 million increase in cash and cash equivalents, related to the cash flows from the investment securities portfolio, partially offset by loan growth, the repurchases of common stock, and the payment of common stock dividends. |
| • | A $185.0 million decrease in investment securities, mainly driven by principal repayments of $171.5 million, which include scheduled repayments of $91.4 million and maturities of $80.1 million, and a $15.1 million decrease in the fair value of available-for-sale debt securities attributable to changes in market interest rates. |
| • | A $130.7 million increase in total loans. The variance consisted of increases of $80.9 million in the Florida region and $50.1 million in the Puerto Rico region, partially offset by a decrease of $0.3 million in the Virgin Islands region. On a portfolio basis, the variance consisted of increases of $123.9 million in commercial and construction loans, and $22.2 million in consumer loans, primarily auto loans and finance leases, partially offset by a $15.4 million decrease in residential mortgage loans. The growth of $56.8 million in commercial and industrial loans was mainly in the Puerto Rico region driven by increased lines of credit utilization and the origination of two term loans, which includes the origination of a $13.6 million loan to a municipality in Puerto Rico, partially offset by multiple payoffs and paydowns. In addition, the growth of $44.6 million in commercial mortgage loans was driven by the origination of three term loans in the Florida region, each in excess of $10 million, with an aggregate balance of $52.3 million. |
Total loan originations, including refinancings, renewals, and draws from existing commitments (excluding credit card utilization activity), amounted to $1.1 billion in the first quarter of 2024, a decrease of $214.9 million compared to the fourth quarter of 2023. The variances by geography and portfolio basis follow:
Total loan originations in the Puerto Rico region amounted to $807.5 million in the first quarter of 2024, a decrease of $254.5 million, compared to $1.1 billion in the fourth quarter of 2023. The $254.5 million decline in total loan originations consisted of decreases of $209.9 million in commercial and construction loans, $31.1 million in consumer loans and $13.5 million in residential mortgage loans. The decrease in commercial and construction loans was mainly driven by the $150.0 million commercial and industrial participated loan funded in the fourth quarter of 2023 in connection with the financial closing of a public-private partnership (P3) for improvement of infrastructure for toll roads.
Total loan originations in the Virgin Islands region amounted to $19.1 million in the first quarter of 2024, compared to $19.5 million in the fourth quarter of 2023. The $0.4 million decline in total loan originations consisted of decreases of $1.3 million in consumer loans and $0.2 million in commercial and construction loans, partially offset by a $1.1 million increase in residential mortgage loans.
Total loan originations in the Florida region amounted to $260.4 million in the first quarter of 2024, compared to $220.4 million in the fourth quarter of 2023. The $40.0 million growth in total loan originations was mainly due to a $41.4 million increase in commercial and construction loans, principally in commercial mortgage loans, mainly due to the aforementioned origination during the first quarter of 2024 of three large relationships each over $10 million with an aggregate balance of $52.3 million.
Total liabilities were approximately $17.4 billion as of March 31, 2024, a decrease of $0.7 million from December 31, 2023.
| • | Total deposits decreased $10.4 million consisting of: |
| o | A $57.6 million decrease in brokered CDs. The decline reflects maturing short-term brokered CDs amounting to $195.4 million with an all-in cost of 5.42% that were paid off during the first quarter of 2024, partially offset by $138.0 million of new issuances with original average maturities of approximately 2 years and an all-in cost of 4.79%. |
| o | A $25.8 million decrease in deposits, excluding brokered CDs and government deposits, reflecting a decline of $28.3 million in the Florida region, partially offset by increases of $1.3 million in the Virgin Islands region, and $1.2 million in the Puerto Rico region. The decrease in such deposits is net of a $93.9 million increase in time deposits. |
| o | A $73.0 million increase in government deposits, which includes increases of $56.8 million in the Puerto Rico region, $14.2 million in the Virgin Islands region, and $2.0 million in the Florida region. |
Total stockholders’ equity amounted to $1.5 billion as of March 31, 2024, a decrease of $17.9 million from December 31, 2023, mainly driven by a $50.0 million in stock repurchases under the 2023 capital plan authorization of $225 million, $26.9 million in common stock dividends declared in the first quarter of 2024, and a $15.1 million decrease in the fair value of available-for-sale debt securities due to changes in market interest rates recognized as part of accumulated other comprehensive loss, partially offset by net income generated in the first quarter of 2024.
As of March 31, 2024, capital ratios exceeded the required regulatory levels for bank holding companies and well-capitalized banks. The Corporation’s estimated CET1 capital, tier 1 capital, total capital and leverage ratios under the Basel III rules were 15.90%, 15.90%, 18.36%, and 10.65%, respectively, as of March 31, 2024, compared to CET1 capital, tier 1 capital, total capital, and leverage ratios of 16.10%, 16.10%, 18.57%, and 10.78%, respectively, as of December 31, 2023.
Meanwhile, estimated CET1 capital, tier 1 capital, total capital and leverage ratios of our banking subsidiary, FirstBank, were 16.12%, 16.89%, 18.15%, and 11.31%, respectively, as of March 31, 2024, compared to CET1 capital, tier 1 capital, total capital and leverage ratios of 16.33%, 17.11%, 18.36%, and 11.45%, respectively, as of December 31, 2023.
Tangible Common Equity (Non-GAAP)
On a non-GAAP basis, the Corporation’s tangible common equity ratio decreased to 7.59% as of March 31, 2024, compared to 7.67% as of December 31, 2023.
The following table presents a reconciliation of the Corporation’s tangible common equity and tangible assets to the most comparable GAAP items as of the indicated dates:
| | | March 31, 2024 | | | December 31, 2023 | | | September 30, 2023 | | | June 30, 2023 | | | March 31, 2023 | |
| (In thousands, except ratios and per share information) | | | | | | | | | | | | | | | |
| Tangible Equity: | | | | | | | | | | | | | | | |
| Total common equity - GAAP | | $ | 1,479,717 | | | $ | 1,497,609 | | | $ | 1,303,068 | | | $ | 1,397,999 | | | $ | 1,405,593 | |
| Goodwill | | | (38,611 | ) | | | (38,611 | ) | | | (38,611 | ) | | | (38,611 | ) | | | (38,611 | ) |
| Other intangible assets | | | (11,542 | ) | | | (13,383 | ) | | | (15,229 | ) | | | (17,092 | ) | | | (19,073 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible common equity - non-GAAP | | $ | 1,429,564 | | | $ | 1,445,615 | | | $ | 1,249,228 | | | $ | 1,342,296 | | | $ | 1,347,909 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible Assets: | | | | | | | | | | | | | | | | | | | | |
| Total assets - GAAP | | $ | 18,890,961 | | | $ | 18,909,549 | | | $ | 18,594,608 | | | $ | 19,152,455 | | | $ | 18,977,114 | |
| Goodwill | | | (38,611 | ) | | | (38,611 | ) | | | (38,611 | ) | | | (38,611 | ) | | | (38,611 | ) |
| Other intangible assets | | | (11,542 | ) | | | (13,383 | ) | | | (15,229 | ) | | | (17,092 | ) | | | (19,073 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible assets - non-GAAP | | $ | 18,840,808 | | | $ | 18,857,555 | | | $ | 18,540,768 | | | $ | 19,096,752 | | | $ | 18,919,430 | |
| | | | | | | | | | | | | | | | | | | | | |
| Common shares outstanding | | | 166,707 | | | | 169,303 | | | | 174,386 | | | | 179,757 | | | | 179,789 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible common equity ratio - non-GAAP | | | 7.59 | % | | | 7.67 | % | | | 6.74 | % | | | 7.03 | % | | | 7.12 | % |
| Tangible book value per common share - non-GAAP | | $ | 8.58 | | | $ | 8.54 | | | $ | 7.16 | | | $ | 7.47 | | | $ | 7.50 | |
Exposure to Puerto Rico Government
As of March 31, 2024, the Corporation had $313.7 million of direct exposure to the Puerto Rico government, its municipalities, and public corporations, an increase of $15.8 million when compared to $297.9 million as of December 31, 2023, mainly due to the origination of a $13.6 million loan to a municipality in Puerto Rico that is supported by assigned property tax revenues. As of March 31, 2024, approximately $202.9 million of the exposure consisted of loans and obligations of municipalities in Puerto Rico that are supported by assigned property tax revenues and for which, in most cases, the good faith, credit, and unlimited taxing power of the applicable municipality have been pledged to their repayment, and $59.2 million consisted of loans and obligations which are supported by one or more specific sources of municipal revenues. The Corporation’s total direct exposure to the Puerto Rico government also included $8.9 million in a loan extended to an affiliate of the Puerto Rico Electric Power Authority and $39.6 million in loans to agencies of Puerto Rico public corporations. In addition, the total direct exposure included an obligation of the Puerto Rico government, specifically a residential pass-through MBS issued by the PRHFA, at an amortized cost of $3.1 million (fair value of $1.6 million as of March 31, 2024), included as part of the Corporation’s available-for-sale debt securities portfolio. This residential pass-through MBS issued by the PRHFA is collateralized by certain second mortgages and had an unrealized loss of $1.6 million as of March 31, 2024, of which $0.3 million is due to credit deterioration.
The aforementioned exposure to municipalities in Puerto Rico included $107.1 million of financing arrangements with Puerto Rico municipalities that were issued in bond form but underwritten as loans with features that are typically found in commercial loans. These bonds are accounted for as held-to-maturity debt securities.
As of March 31, 2024, the Corporation had $2.8 billion of public sector deposits in Puerto Rico, compared to $2.7 billion as of December 31, 2023. Approximately 20% of the public sector deposits as of March 31, 2024, were from municipalities and municipal agencies in Puerto Rico, and 80% were from public corporations, the Puerto Rico central government and agencies, and U.S. federal government agencies in Puerto Rico.
Conference Call / Webcast Information
First BanCorp.’s senior management will host an earnings conference call and live webcast on Tuesday, April 23, 2024, at 10:00 a.m. (Eastern Time). The call may be accessed via a live Internet webcast through the Corporation’s investor relations website, fbpinvestor.com, or through a dial-in telephone number at (833) 470-1428 or (404) 975-4839 for international callers. The participant access code is 829649. The Corporation recommends that listeners go to the web site at least 15 minutes prior to the call to download and install any necessary software. Following the webcast presentation, a question and answer session will be made available to research analysts and institutional investors. A replay of the webcast will be archived in the Corporation’s investor relations website, fbpinvestor.com, until April 23, 2025. A telephone replay will be available one hour after the end of the conference call through May 23, 2024, at (866) 813-9403. The replay access code is 838187.
This press release may contain “forward-looking statements” concerning the Corporation’s future economic, operational, and financial performance. The words or phrases “expect,” “anticipate,” “intend,” “should,” “would,” “will,” “plans,” “forecast,” “believe,” and similar expressions are meant to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by such sections. The Corporation cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof, and advises readers that any such forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions by us that are difficult to predict. Various factors, some of which are beyond our control, including, but not limited to, the uncertainties more fully discussed in Part I, Item 1A, “Risk Factors” of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”), and the following, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements: the effect of the current interest rate environment and inflation levels or changes in interest rates on the level, composition and performance of the Corporation’s assets and liabilities, and corresponding effects on the Corporation’s net interest income, net interest margin, loan originations, deposit attrition, overall results of operations, and liquidity position; the effects of changes in the interest rate environment, including any adverse change in the Corporation’s ability to attract and retain clients and gain acceptance from current and prospective customers for new products and services, including those related to the offering of digital banking and financial services; volatility in the financial services industry, including failures or rumored failures of other depository institutions, and actions taken by governmental agencies to stabilize the financial system, which could result in, among other things, bank deposit runoffs, liquidity constraints, and increased regulatory requirements and costs; the effect of continued changes in the fiscal and monetary policies and regulations of the U.S. federal government, the Puerto Rico government and other governments, including those determined by the Federal Reserve Board, the Federal Reserve Bank of New York, the FDIC, government-sponsored housing agencies and regulators in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, that may affect the future results of the Corporation; uncertainty as to the ability of FirstBank to retain its core deposits and generate sufficient cash flow through its wholesale funding sources, such as securities sold under agreements to repurchase, FHLB advances, and brokered CDs, which may require us to sell investment securities at a loss; adverse changes in general economic conditions in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, including in the interest rate environment, unemployment rates, market liquidity, housing absorption rates, real estate markets, and U.S. capital markets, which may affect funding sources, loan portfolio performance and credit quality, market prices of investment securities, and demand for the Corporation’s products and services, and which may reduce the Corporation’s revenues and earnings and the value of the Corporation’s assets; the impact of government financial assistance for hurricane recovery and other disaster relief on economic activity in Puerto Rico, and the timing and pace of disbursements of funds earmarked for disaster relief; the ability of the Corporation, FirstBank, and third-party service providers to identify and prevent cyber-security incidents, such as data security breaches, ransomware, malware, “denial of service” attacks, “hacking,” identity theft, and state-sponsored cyberthreats, and the occurrence of and response to any incidents that occur, which may result in misuse or misappropriation of confidential or proprietary information, disruption, or damage to our systems or those of third-party service providers on which we rely, increased costs and losses and/or adverse effects to our reputation; general competitive factors and other market risks as well as the implementation of existent or planned strategic growth opportunities, including risks, uncertainties, and other factors or events related to any business acquisitions, dispositions, strategic partnerships, strategic operational investments and any anticipated efficiencies or other expected results related thereto; uncertainty as to the implementation of the debt restructuring plan of Puerto Rico and the fiscal plan for Puerto Rico as certified on April 3, 2023, by the oversight board established by the Puerto Rico Oversight, Management, and Economic Stability Act, or any revisions to it, on our clients and loan portfolios, and any potential impact from future economic or political developments and tax regulations in Puerto Rico; the impact of changes in accounting standards, or assumptions in applying those standards, and of forecasts of economic variables considered for the determination of the ACL; the ability of FirstBank to realize the benefits of its net deferred tax assets; the ability of FirstBank to generate sufficient cash flow to make dividends to the Corporation; environmental, social, and governance (“ESG”) matters, including our climate-related initiatives and commitments; the impacts of natural or man-made disasters, the emergence or continuation of widespread health emergencies, geopolitical conflicts (including sanctions, war or armed conflict, such as the ongoing conflict in Ukraine, the conflict between Israel and Hamas, and the possible expansion of such conflicts in surrounding areas and potential geopolitical consequences), terrorist attacks, or other catastrophic external events, including impacts of such events on general economic conditions and on the Corporation’s assumptions regarding forecasts of economic variables; the risk that additional portions of the unrealized losses in the Corporation’s debt securities portfolio are determined to be credit-related resulting in additional charges to the provision for credit losses on the Corporation’s debt securities portfolio, and the potential for additional credit losses that could emerge from the downgrade of the U.S.’s Long-Term Foreign-Currency Issuer Rating to ‘AA+’ from ‘AAA’ in August 2023 and subsequent negative ratings outlooks; the impacts of applicable legislative, tax, or regulatory changes, as well as of the 2024 U.S. and Puerto Rico general election, on the Corporation’s financial condition or performance; the risk of possible failure or circumvention of the Corporation’s internal controls and procedures and the risk that the Corporation’s risk management policies may not be adequate; the risk that the FDIC may further increase the deposit insurance premium and/or require further special assessments, causing an additional increase in the Corporation’s non-interest expenses; any need to recognize impairments on the Corporation’s financial instruments, goodwill, and other intangible assets; the risk that the impact of the occurrence of any of these uncertainties on the Corporation’s capital would preclude further growth of FirstBank and preclude the Corporation’s Board of Directors from declaring dividends; and uncertainty as to whether FirstBank will be able to continue to satisfy its regulators regarding, among other things, its asset quality, liquidity plans, maintenance of capital levels, and compliance with applicable laws, regulations and related requirements. The Corporation does not undertake, and specifically disclaims any obligation to update any “forward-looking statements” to reflect occurrences or unanticipated events or circumstances after the date of such statements, except as required by the federal securities laws.
First BanCorp. is the parent corporation of FirstBank Puerto Rico, a state-chartered commercial bank with operations in Puerto Rico, the U.S., and the British Virgin Islands and Florida, and of FirstBank Insurance Agency. First BanCorp.’s shares of common stock trade on the New York Stock Exchange under the symbol FBP. Additional information about First BanCorp. may be found at www.1firstbank.com.
First BanCorp.
Ramon Rodriguez
Senior Vice President
Corporate Strategy and Investor Relations
ramon.rodriguez@firstbankpr.com
(787) 729-8200 Ext. 82179
Table 1 – Condensed Consolidated Statements of Financial Condition
| | | As of | |
| | | March 31, 2024 | | | December 31, 2023 | |
| (In thousands, except for share information) | | | | | | |
| ASSETS | | | | | | |
| Cash and due from banks | | $ | 680,734 | | | $ | 661,925 | |
| Money market investments: | | | | | | | | |
| Time deposits with other financial institutions | | | 300 | | | | 300 | |
| Other short-term investments | | | 3,485 | | | | 939 | |
| Total money market investments | | | 3,785 | | | | 1,239 | |
Debt securities available for sale, at fair value (ACL of $442 as of March 31, 2024 and $511 as of December 31, 2023) | | | 5,047,179 | | | | 5,229,984 | |
Debt securities held to maturity, at amortized cost, net of ACL of $1,235 as of March 31, 2024 and $2,197 as of December 31, 2023 (fair value of $338,120 as of March 31, 2024 and $346,132 as of December 31, 2023) | | | 348,095 | | | | 351,981 | |
| Total debt securities | | | 5,395,274 | | | | 5,581,965 | |
| Equity securities | | | 51,390 | | | | 49,675 | |
| Total investment securities | | | 5,446,664 | | | | 5,631,640 | |
| Loans, net of ACL of $263,592 as of March 31, 2024 and $261,843 as of December 31, 2023 | | | 12,047,856 | | | | 11,923,640 | |
| Loans held for sale, at lower of cost or market | | | 12,080 | | | | 7,368 | |
| Total loans, net | | | 12,059,936 | | | | 11,931,008 | |
| Accrued interest receivable on loans and investments | | | 73,154 | | | | 77,716 | |
| Premises and equipment, net | | | 141,471 | | | | 142,016 | |
| OREO | | | 28,864 | | | | 32,669 | |
| Deferred tax asset, net | | | 147,743 | | | | 150,127 | |
| Goodwill | | | 38,611 | | | | 38,611 | |
| Other intangible assets | | | 11,542 | | | | 13,383 | |
| Other assets | | | 258,457 | | | | 229,215 | |
| Total assets | | $ | 18,890,961 | | | $ | 18,909,549 | |
| LIABILITIES | | | | | | | | |
| Deposits: | | | | | | | | |
| Non-interest-bearing deposits | | $ | 5,346,326 | | | $ | 5,404,121 | |
| Interest-bearing deposits | | | 11,199,185 | | | | 11,151,864 | |
| Total deposits | | | 16,545,511 | | | | 16,555,985 | |
| Advances from the FHLB | | | 500,000 | | | | 500,000 | |
| Other borrowings | | | 161,700 | | | | 161,700 | |
| Accounts payable and other liabilities | | | 204,033 | | | | 194,255 | |
| Total liabilities | | | 17,411,244 | | | | 17,411,940 | |
| STOCKHOLDERSʼ EQUITY | | | | | | | | |
Common stock, $0.10 par value, 223,663,116 shares issued (March 31, 2024 - 166,707,047 shares outstanding; December 31, 2023 - 169,302,812 shares outstanding) | | | 22,366 | | | | 22,366 | |
| Additional paid-in capital | | | 959,319 | | | | 965,707 | |
| Retained earnings | | | 1,892,714 | | | | 1,846,112 | |
| Treasury stock, at cost (March 31, 2024 - 56,956,069 shares; December 31, 2023 - 54,360,304 shares) | | | (740,447 | ) | | | (697,406 | ) |
| Accumulated other comprehensive loss | | | (654,235 | ) | | | (639,170 | ) |
| Total stockholdersʼ equity | | | 1,479,717 | | | | 1,497,609 | |
| Total liabilities and stockholdersʼ equity | | $ | 18,890,961 | | | $ | 18,909,549 | |
Table 2 – Condensed Consolidated Statements of Income
| | | Quarter Ended | |
| | | March 31, 2024 | | | December 31, 2023 | | | March 31, 2023 | |
| (In thousands, except per share information) | | | | | | | | | |
| Net interest income: | | | | | | | | | |
| Interest income | | $ | 268,505 | | | $ | 265,481 | | | $ | 242,396 | |
| Interest expense | | | 71,985 | | | | 68,799 | | | | 41,511 | |
| Net interest income | | | 196,520 | | | | 196,682 | | | | 200,885 | |
| Provision for credit losses - expense (benefit): | | | | | | | | | | | | |
| Loans | | | 12,917 | | | | 18,975 | | | | 16,256 | |
| Unfunded loan commitments | | | 281 | | | | (123 | ) | | | (105 | ) |
| Debt securities | | | (1,031 | ) | | | (40 | ) | | | (649 | ) |
| Provision for credit losses - expense | | | 12,167 | | | | 18,812 | | | | 15,502 | |
| Net interest income after provision for credit losses | | | 184,353 | | | | 177,870 | | | | 185,383 | |
| | | | | | | | | | | | | |
| Non-interest income: | | | | | | | | | | | | |
| Service charges and fees on deposit accounts | | | 9,662 | | | | 9,662 | | | | 9,541 | |
| Mortgage banking activities | | | 2,882 | | | | 2,094 | | | | 2,812 | |
| Card and processing income | | | 11,312 | | | | 11,015 | | | | 10,918 | |
| Other non-interest income | | | 10,127 | | | | 10,838 | | | | 9,247 | |
| Total non-interest income | | | 33,983 | | | | 33,609 | | | | 32,518 | |
| | | | | | | | | | | | | |
| Non-interest expenses: | | | | | | | | | | | | |
| Employees’ compensation and benefits | | | 59,506 | | | | 55,584 | | | | 56,422 | |
| Occupancy and equipment | | | 21,381 | | | | 21,847 | | | | 21,186 | |
| Business promotion | | | 3,842 | | | | 6,725 | | | | 3,975 | |
| Professional service fees | | | 12,676 | | | | 11,250 | | | | 11,973 | |
| Taxes, other than income taxes | | | 5,129 | | | | 5,535 | | | | 5,112 | |
| FDIC deposit insurance | | | 3,102 | | | | 8,454 | | | | 2,133 | |
| Net gain on OREO operations | | | (1,452 | ) | | | (1,005 | ) | | | (1,996 | ) |
| Credit and debit card processing expenses | | | 5,751 | | | | 7,360 | | | | 5,318 | |
| Other non-interest expenses | | | 10,988 | | | | 10,855 | | | | 11,145 | |
| Total non-interest expenses | | | 120,923 | | | | 126,605 | | | | 115,268 | |
| | | | | | | | | | | | | |
| Income before income taxes | | | 97,413 | | | | 84,874 | | | | 102,633 | |
| Income tax expense | | | 23,955 | | | | 5,385 | | | | 31,935 | |
| | | | | | | | | | | | | |
| Net income | | $ | 73,458 | | | $ | 79,489 | | | $ | 70,698 | |
| | | | | | | | | | | | | |
| Net income attributable to common stockholders | | $ | 73,458 | | | $ | 79,489 | | | $ | 70,698 | |
| | | | | | | | | | | | | |
| Earnings per common share: | | | | | | | | | | | | |
| Basic | | $ | 0.44 | | | $ | 0.47 | | | $ | 0.39 | |
| Diluted | | $ | 0.44 | | | $ | 0.46 | | | $ | 0.39 | |
Table 3 – Selected Financial Data
| | | Quarter Ended | |
| | | March 31, 2024 | | | December 31, 2023 | | | March 31, 2023 | |
| (Shares in thousands) | | | | | | | | | |
| Per Common Share Results: | | | | | | | | | |
| Net earnings per share - basic | | $ | 0.44 | | | $ | 0.47 | | | $ | 0.39 | |
| Net earnings per share - diluted | | $ | 0.44 | | | $ | 0.46 | | | $ | 0.39 | |
| Cash dividends declared | | $ | 0.16 | | | $ | 0.14 | | | $ | 0.14 | |
| Average shares outstanding | | | 167,142 | | | | 170,624 | | | | 180,215 | |
| Average shares outstanding diluted | | | 167,798 | | | | 171,351 | | | | 181,236 | |
| Book value per common share | | $ | 8.88 | | | $ | 8.85 | | | $ | 7.82 | |
Tangible book value per common share (1) | | $ | 8.58 | | | $ | 8.54 | | | $ | 7.50 | |
| Common Stock Price: End of period | | $ | 17.54 | | | $ | 16.45 | | | $ | 11.42 | |
| Selected Financial Ratios (In Percent): | | | | | | | | | | | | |
| Profitability: | | | | | | | | | | | | |
| Return on Average Assets | | | 1.56 | | | | 1.70 | | | | 1.55 | |
| Return on Average Common Equity | | | 19.56 | | | | 23.69 | | | | 21.00 | |
Interest Rate Spread (2) | | | 3.35 | | | | 3.34 | | | | 3.84 | |
Net Interest Margin (2) | | | 4.27 | | | | 4.23 | | | | 4.48 | |
Efficiency ratio (3) | | | 52.46 | | | | 54.98 | | | | 49.39 | |
| Capital and Other: | | | | | | | | | | | | |
| Average Total Equity to Average Total Assets | | | 7.99 | | | | 7.16 | | | | 7.36 | |
| Total capital | | | 18.36 | | | | 18.57 | | | | 19.02 | |
| Common equity Tier 1 capital | | | 15.90 | | | | 16.10 | | | | 16.33 | |
| Tier 1 capital | | | 15.90 | | | | 16.10 | | | | 16.33 | |
| Leverage | | | 10.65 | | | | 10.78 | | | | 10.57 | |
Tangible common equity ratio (1) | | | 7.59 | | | | 7.67 | | | | 7.12 | |
| Dividend payout ratio | | | 36.41 | | | | 30.05 | | | | 35.69 | |
Basic liquidity ratio (4) | | | 19.60 | | | | 19.82 | | | | 21.42 | |
Core liquidity ratio (5) | | | 14.45 | | | | 14.93 | | | | 16.77 | |
| Loan to deposit ratio | | | 74.48 | | | | 73.65 | | | | 72.22 | |
Uninsured deposits, excluding fully collateralized deposits, to total deposits (6) | | | 27.93 | | | | 28.13 | | | | 35.68 | |
| | | | | | | | | | | | | |
| Asset Quality: | | | | | | | | | | | | |
| | | | | | | | | | | | |
Allowance for credit losses for loans and finance leases to total loans held for investment | | | 2.14 | | | | 2.15 | | | | 2.29 | |
| Net charge-offs (annualized) to average loans outstanding | | | 0.37 | | | | 0.69 | | | | 0.46 | |
Provision for credit losses for loans and finance leases
to net charge-offs | | | 115.66 | | | | 91.46 | | | | 122.51 | |
| Non-performing assets to total assets | | | 0.69 | | | | 0.67 | | | | 0.68 | |
| Nonaccrual loans held for investment to total loans held for investment | | | 0.76 | | | | 0.69 | | | | 0.77 | |
Allowance for credit losses for loans and finance leases to total nonaccrual loans held for investment | | | 283.54 | | | | 312.81 | | | | 297.91 | |
Allowance for credit losses for loans and finance leases to total nonaccrual loans held for investment, excluding residential estate loans | | | 437.28 | | | | 508.75 | | | | 503.62 | |
| (1) | Non-GAAP financial measures (as defined above). Refer to Non-GAAP Disclosures, Statement of Financial Condition above and Table 4 below for additional information about the components and a reconciliation of these measures. |
| (2) | On a tax-equivalent basis and excluding changes in the fair value of derivative instruments (non-GAAP financial measure). Refer to Non-GAAP Disclosures above for additional information and a reconciliation of these measures. |
| (3) | Non-interest expenses to the sum of net interest income and non-interest income. |
| (4) | Defined as the sum of cash and cash equivalents, free high quality liquid assets that could be liquidated within one day, and available secured lines of credit with the FHLB to total assets. |
| (5) | Defined as the sum of cash and cash equivalents and free high quality liquid assets that could be liquidated within one day to total assets. |
| (6) | Exclude insured deposits not covered by federal deposit insurance. |
Table 4 – Reconciliation of Net Interest Income to Net Interest Income Excluding Valuations and on a Tax-Equivalent Basis
The following table reconciles net interest income in accordance with GAAP to net interest income excluding valuations, and net interest income on a tax-equivalent basis for the first quarter of 2024 and fourth and first quarters of 2023. The table also reconciles net interest spread and net interest margin to these items excluding valuations, and on a tax-equivalent basis.
| | | Quarter Ended | |
| (Dollars in thousands) | | March 31, 2024 | | | December 31, 2023 | | | March 31, 2023 | |
| Net Interest Income | | | | | | | | | |
| Interest income - GAAP | | $ | 268,505 | | | $ | 265,481 | | | $ | 242,396 | |
| Unrealized (gain) loss on derivative instruments | | | (2 | ) | | | 8 | | | | 6 | |
| Interest income excluding valuations - non-GAAP | | | 268,503 | | | | 265,489 | | | | 242,402 | |
| Tax-equivalent adjustment | | | 4,813 | | | | 4,262 | | | | 6,347 | |
| Interest income on a tax-equivalent basis and excluding valuations - non-GAAP | | $ | 273,316 | | | $ | 269,751 | | | $ | 248,749 | |
| | | | | | | | | | | | | |
| Interest expense - GAAP | | $ | 71,985 | | | $ | 68,799 | | | $ | 41,511 | |
| | | | | | | | | | | | | |
| Net interest income - GAAP | | $ | 196,520 | | | $ | 196,682 | | | $ | 200,885 | |
| | | | | | | | | | | | | |
Net interest income excluding valuations - non-GAAP | | $ | 196,518 | | | $ | 196,690 | | | $ | 200,891 | |
| | | | | | | | | | | | | |
| Net interest income on a tax-equivalent basis and excluding valuations - non-GAAP | | $ | 201,331 | | | $ | 200,952 | | | $ | 207,238 | |
| | | | | | | | | | | | | |
| Average Balances | | | | | | | | | | | | |
| Loans and leases | | $ | 12,207,840 | | | $ | 12,004,881 | | | $ | 11,519,399 | |
| Total securities, other short-term investments and interest-bearing cash balances | | | 6,720,395 | | | | 6,835,407 | | | | 7,232,347 | |
| Average Interest-Earning Assets | | $ | 18,928,235 | | | $ | 18,840,288 | | | $ | 18,751,746 | |
| Average Interest-Bearing Liabilities | | $ | 11,838,159 | | | $ | 11,665,459 | | | $ | 10,957,892 | |
Average Assets (1) | | $ | 18,858,299 | | | $ | 18,581,625 | | | $ | 18,557,156 | |
| Average Non-Interest-Bearing Deposits | | $ | 5,308,531 | | | $ | 5,384,264 | | | $ | 5,999,066 | |
| | | | | | | | | | | | | |
| Average Yield/Rate | | | | | | | | | | | | |
| Average yield on interest-earning assets - GAAP | | | 5.69 | % | | | 5.59 | % | | | 5.24 | % |
| Average rate on interest-bearing liabilities - GAAP | | | 2.44 | % | | | 2.34 | % | | | 1.54 | % |
| Net interest spread - GAAP | | | 3.25 | % | | | 3.25 | % | | | 3.70 | % |
| Net interest margin - GAAP | | | 4.16 | % | | | 4.14 | % | | | 4.34 | % |
| | | | | | | | | | | | | |
| Average yield on interest-earning assets excluding valuations - non-GAAP | | | 5.69 | % | | | 5.59 | % | | | 5.24 | % |
| Average rate on interest-bearing liabilities | | | 2.44 | % | | | 2.34 | % | | | 1.54 | % |
| Net interest spread excluding valuations - non-GAAP | | | 3.25 | % | | | 3.25 | % | | | 3.70 | % |
| Net interest margin excluding valuations - non-GAAP | | | 4.16 | % | | | 4.14 | % | | | 4.34 | % |
| | | | | | | | | | | | | |
| Average yield on interest-earning assets on a tax-equivalent basis | | | | | | | | | | | | |
| and excluding valuations - non-GAAP | | | 5.79 | % | | | 5.68 | % | | | 5.38 | % |
| Average rate on interest-bearing liabilities | | | 2.44 | % | | | 2.34 | % | | | 1.54 | % |
| Net interest spread on a tax-equivalent basis and excluding valuations - non-GAAP | | | 3.35 | % | | | 3.34 | % | | | 3.84 | % |
| Net interest margin on a tax-equivalent basis and excluding valuations - non-GAAP | | | 4.27 | % | | | 4.23 | % | | | 4.48 | % |
| (1) | Includes, among other things, the ACL on loans and finance leases and debt securities, as well as unrealized gains and losses on available-for-sale debt securities. |
Table 5 – Quarterly Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis)
| | | Average Volume | | | Interest income (1) / expense | | | Average Rate (1) | |
| Quarter Ended | | March 31, | | | December 31, | | | March 31, | | | March 31, | | | December 31, | | | March 31, | | | March 31, | | | December 31, | | | March 31, | |
| | | 2024 | | | 2023 | | | 2023 | | | 2024 | | | 2023 | | | 2023 | | | 2024 | | | 2023 | | | 2023 | |
| (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Money market and other short-term investments | | $ | 533,747 | | | $ | 503,293 | | | $ | 404,249 | | | $ | 7,254 | | | $ | 6,933 | | | $ | 4,650 | | | | 5.45 | % | | | 5.47 | % | | | 4.67 | % |
Government obligations (2) | | | 2,684,169 | | | | 2,738,478 | | | | 2,909,976 | | | | 9,053 | | | | 9,161 | | | | 10,765 | | | | 1.35 | % | | | 1.33 | % | | | 1.50 | % |
| MBS | | | 3,451,293 | | | | 3,543,423 | | | | 3,864,145 | | | | 15,238 | | | | 15,481 | | | | 19,396 | | | | 1.77 | % | | | 1.73 | % | | | 2.04 | % |
| FHLB stock | | | 34,635 | | | | 34,745 | | | | 40,838 | | | | 854 | | | | 830 | | | | 421 | | | | 9.89 | % | | | 9.48 | % | | | 4.18 | % |
| Other investments | | | 16,551 | | | | 15,468 | | | | 13,139 | | | | 66 | | | | 232 | | | | 139 | | | | 1.60 | % | | | 5.95 | % | | | 4.29 | % |
Total investments (3) | | | 6,720,395 | | | | 6,835,407 | | | | 7,232,347 | | | | 32,465 | | | | 32,637 | | | | 35,371 | | | | 1.94 | % | | | 1.89 | % | | | 1.98 | % |
| Residential mortgage loans | | | 2,810,304 | | | | 2,812,428 | | | | 2,835,240 | | | | 40,473 | | | | 40,711 | | | | 39,794 | | | | 5.78 | % | | | 5.74 | % | | | 5.69 | % |
| Construction loans | | | 218,854 | | | | 211,641 | | | | 146,041 | | | | 4,537 | | | | 4,295 | | | | 2,676 | | | | 8.32 | % | | | 8.05 | % | | | 7.43 | % |
| C&I and commercial mortgage loans | | | 5,504,782 | | | | 5,355,145 | | | | 5,167,727 | | | | 99,074 | | | | 96,299 | | | | 85,885 | | | | 7.22 | % | | | 7.13 | % | | | 6.74 | % |
| Finance leases | | | 863,685 | | | | 844,780 | | | | 735,500 | | | | 17,127 | | | | 16,584 | | | | 13,809 | | | | 7.95 | % | | | 7.79 | % | | | 7.61 | % |
| Consumer loans | | | 2,810,215 | | | | 2,780,887 | | | | 2,634,891 | | | | 79,640 | | | | 79,225 | | | | 71,214 | | | | 11.37 | % | | | 11.30 | % | | | 10.96 | % |
Total loans (4) (5) | | | 12,207,840 | | | | 12,004,881 | | | | 11,519,399 | | | | 240,851 | | | | 237,114 | | | | 213,378 | | | | 7.91 | % | | | 7.84 | % | | | 7.51 | % |
| Total interest-earning assets | | $ | 18,928,235 | | | $ | 18,840,288 | | | $ | 18,751,746 | | | $ | 273,316 | | | $ | 269,751 | | | $ | 248,749 | | | | 5.79 | % | | | 5.68 | % | | | 5.38 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Time deposits | | $ | 2,892,355 | | | $ | 2,792,843 | | | $ | 2,342,360 | | | $ | 24,410 | | | $ | 22,304 | | | $ | 10,782 | | | | 3.39 | % | | | 3.17 | % | | | 1.87 | % |
| Brokered CDs | | | 749,760 | | | | 572,105 | | | | 166,698 | | | | 9,680 | | | | 7,452 | | | | 1,587 | | | | 5.18 | % | | | 5.17 | % | | | 3.86 | % |
| Other interest-bearing deposits | | | 7,534,344 | | | | 7,635,223 | | | | 7,544,901 | | | | 28,935 | | | | 29,918 | | | | 17,516 | | | | 1.54 | % | | | 1.55 | % | | | 0.94 | % |
| Securities sold under agreements to repurchase | | | - | | | | 925 | | | | 91,004 | | | | - | | | | 13 | | | | 1,069 | | | | 0.00 | % | | | 5.58 | % | | | 4.76 | % |
| Advances from the FHLB | | | 500,000 | | | | 502,446 | | | | 629,167 | | | | 5,610 | | | | 5,709 | | | | 7,176 | | | | 4.50 | % | | | 4.51 | % | | | 4.63 | % |
| Other borrowings | | | 161,700 | | | | 161,917 | | | | 183,762 | | | | 3,350 | | | | 3,403 | | | | 3,381 | | | | 8.31 | % | | | 8.34 | % | | | 7.46 | % |
| Total interest-bearing liabilities | | $ | 11,838,159 | | | $ | 11,665,459 | | | $ | 10,957,892 | | | $ | 71,985 | | | $ | 68,799 | | | $ | 41,511 | | | | 2.44 | % | | | 2.34 | % | | | 1.54 | % |
| Net interest income | | | | | | | | | | | | | | $ | 201,331 | | | $ | 200,952 | | | $ | 207,238 | | | | | | | | | | | | | |
| Interest rate spread | | | | | | | | | | | | | | | | | | | | | | | | | | | 3.35 | % | | | 3.34 | % | | | 3.84 | % |
| Net interest margin | | | | | | | | | | | | | | | | | | | | | | | | | | | 4.27 | % | | | 4.23 | % | | | 4.48 | % |
| (1) | On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate of 37.5% and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments are excluded from interest income because the changes in valuation do not affect interest paid or received. Refer to Non-GAAP Disclosures and Table 4 above for additional information and a reconciliation of these measures. |
| (2) | Government obligations include debt issued by government-sponsored agencies. |
| (3) | Unrealized gains and losses on available-for-sale debt securities are excluded from the average volumes. |
| (4) | Average loan balances include the average of non-performing loans. |
| (5) | Interest income on loans includes $3.2 million, $3.0 million, and $3.1 million, for the quarters ended March 31, 2024, December 31, 2023, and March 31, 2023, respectively, of income from prepayment penalties and late fees related to the Corporation’s loan portfolio. |
Table 6 – Loan Portfolio by Geography
| | | As of March 31, 2024 | |
| | | Puerto Rico | | | Virgin Islands | | | United States | | | Consolidated | |
| (In thousands) | | | |
| Residential mortgage loans | | $ | 2,164,347 | | | $ | 162,893 | | | $ | 474,347 | | | $ | 2,801,587 | |
| | | | | | | | | | | | | | | | | |
| Commercial loans: | | | | | | | | | | | | | | | | |
| Construction loans | | | 144,094 | | | | 3,530 | | | | 89,664 | | | | 237,288 | |
| Commercial mortgage loans | | | 1,705,745 | | | | 63,502 | | | | 592,484 | | | | 2,361,731 | |
| Commercial and Industrial loans | | | 2,163,439 | | | | 126,560 | | | | 940,996 | | | | 3,230,995 | |
| Commercial loans | | | 4,013,278 | | | | 193,592 | | | | 1,623,144 | | | | 5,830,014 | |
| | | | | | | | | | | | | | | | | |
| Finance leases | | | 871,927 | | | | - | | | | - | | | | 871,927 | |
| | | | | | | | | | | | | | | | | |
| Consumer loans | | | 2,734,347 | | | | 67,946 | | | | 5,627 | | | | 2,807,920 | |
| Loans held for investment | | | 9,783,899 | | | | 424,431 | | | | 2,103,118 | | | | 12,311,448 | |
| | | | | | | | | | | | | | | | | |
| Loans held for sale | | | 12,080 | | | | - | | | | - | | | | 12,080 | |
| Total loans | | $ | 9,795,979 | | | $ | 424,431 | | | $ | 2,103,118 | | | $ | 12,323,528 | |
| | | As of December 31, 2023 | |
| | | Puerto Rico | | | Virgin Islands | | | United States | | | Consolidated | |
| (In thousands) | | | |
| Residential mortgage loans | | $ | 2,187,875 | | | $ | 168,131 | | | $ | 465,720 | | | $ | 2,821,726 | |
| | | | | | | | | | | | | | | | | |
| Commercial loans: | | | | | | | | | | | | | | | | |
| Construction loans | | | 111,664 | | | | 3,737 | | | | 99,376 | | | | 214,777 | |
| Commercial mortgage loans | | | 1,725,325 | | | | 65,312 | | | | 526,446 | | | | 2,317,083 | |
| Commercial and Industrial loans | | | 2,130,368 | | | | 119,040 | | | | 924,824 | | | | 3,174,232 | |
| Commercial loans | | | 3,967,357 | | | | 188,089 | | | | 1,550,646 | | | | 5,706,092 | |
| | | | | | | | | | | | | | | | | |
| Finance leases | | | 856,815 | | | | - | | | | - | | | | 856,815 | |
| | | | | | | | | | | | | | | | | |
| Consumer loans | | | 2,726,457 | | | | 68,498 | | | | 5,895 | | | | 2,800,850 | |
| Loans held for investment | | | 9,738,504 | | | | 424,718 | | | | 2,022,261 | | | | 12,185,483 | |
| | | | | | | | | | | | | | | | | |
| Loans held for sale | | | 7,368 | | | | - | | | | - | | | | 7,368 | |
| Total loans | | $ | 9,745,872 | | | $ | 424,718 | | | $ | 2,022,261 | | | $ | 12,192,851 | |
Table 7 – Non-Performing Assets by Geography
| | | As of March 31, 2024 | |
| (In thousands) | | Puerto Rico | | | Virgin Islands | | | United States | | | Total | |
| Nonaccrual loans held for investment: | | | |
| Residential mortgage | | $ | 17,521 | | | $ | 6,693 | | | $ | 8,471 | | | $ | 32,685 | |
| Construction | | | 531 | | | | 967 | | | | - | | | | 1,498 | |
| Commercial mortgage | | | 3,037 | | | | 8,939 | | | | - | | | | 11,976 | |
| Commercial and Industrial | | | 13,431 | | | | 1,119 | | | | 10,517 | | | | 25,067 | |
| Consumer and finance leases | | | 21,503 | | | | 203 | | | | 33 | | | | 21,739 | |
| Total nonaccrual loans held for investment | | | 56,023 | | | | 17,921 | | | | 19,021 | | | | 92,965 | |
| OREO | | | 24,577 | | | | 4,287 | | | | - | | | | 28,864 | |
| Other repossessed property | | | 5,916 | | | | 287 | | | | 23 | | | | 6,226 | |
Other assets (1) | | | 1,551 | | | | - | | | | - | | | | 1,551 | |
Total non-performing assets (2) | | $ | 88,067 | | | $ | 22,495 | | | $ | 19,044 | | | $ | 129,606 | |
Past due loans 90 days and still accruing (3) | | $ | 51,614 | | | $ | 5,762 | | | $ | 139 | | | $ | 57,515 | |
| | | As of December 31, 2023 | |
| (In thousands) | | Puerto Rico | | | Virgin Islands | | | United States | | | Total | |
| Nonaccrual loans held for investment: | | | |
| Residential mortgage | | $ | 18,324 | | | $ | 6,688 | | | $ | 7,227 | | | $ | 32,239 | |
| Construction | | | 595 | | | | 974 | | | | - | | | | 1,569 | |
| Commercial mortgage | | | 3,106 | | | | 9,099 | | | | - | | | | 12,205 | |
| Commercial and Industrial | | | 13,414 | | | | 1,169 | | | | 667 | | | | 15,250 | |
| Consumer and finance leases | | | 21,954 | | | | 419 | | | | 71 | | | | 22,444 | |
| Total nonaccrual loans held for investment | | | 57,393 | | | | 18,349 | | | | 7,965 | | | | 83,707 | |
| OREO | | | 28,382 | | | | 4,287 | | | | - | | | | 32,669 | |
| Other repossessed property | | | 7,857 | | | | 252 | | | | 6 | | | | 8,115 | |
Other assets (1) | | | 1,415 | | | | - | | | | - | | | | 1,415 | |
Total non-performing assets (2) | | $ | 95,047 | | | $ | 22,888 | | | $ | 7,971 | | | $ | 125,906 | |
Past due loans 90 days and still accruing (3) | | $ | 53,308 | | | $ | 6,005 | | | $ | 139 | | | $ | 59,452 | |
| (1) | Residential pass-through MBS issued by the PRHFA held as part of the available-for-sale debt securities portfolio. |
| (2) | Excludes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans as “units of account” both at the time of adoption of CECL on January 1, 2020 and on an ongoing basis for credit loss measurement. These loans will continue to be excluded from nonaccrual loan statistics as long as the Corporation can reasonably estimate the timing and amount of cash flows expected to be collected on the loan pools. The portion of such loans contractually past due 90 days or more amounted to $8.6 million as of March 31, 2024 (December 31, 2023 - $8.3 million). |
| (3) | These include rebooked loans, which were previously pooled into GNMA securities, amounting to $8.8 million as of March 31, 2024 (December 31, 2023 - $7.9 million). Under the GNMA program, the Corporation has the option but not the obligation to repurchase loans that meet GNMA's specified delinquency criteria. For accounting purposes, the loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability. |
Table 8 – Allowance for Credit Losses on Loans and Finance Leases
| | | Quarter Ended | |
| | | March 31, | | | | | | December 31, | | | March 31, | |
| | | 2024 | | | | | | 2023 | | | 2023 | |
| (Dollars in thousands) | | | | | | | | | | | | |
| Allowance for credit losses on loans and finance leases, beginning of period | | $ | 261,843 | | | | | | $ | 263,615 | | | $ | 260,464 | |
| Impact of adoption of ASU 2022-02 | | | - | | | | | | | - | | | | 2,116 | |
| Provision for credit losses on loans and finance leases expense | | | 12,917 | | | | | | | 18,975 | | | | 16,256 | |
| Net (charge-offs) recoveries of loans and finance leases: | | | | | | | | | | | | | | | |
| Residential mortgage | | | (244 | ) | | | | | | 287 | | | | (486 | ) |
| Construction | | | 10 | | | | | | | (4 | ) | | | 63 | |
| Commercial mortgage | | | 40 | | | | | | | (539 | ) | | | 150 | |
| Commercial and Industrial | | | 4,660 | | | | | | | (1 | ) | | | (28 | ) |
| Consumer loans and finance leases | | | (15,634 | ) | | | | (1) | | | (20,490 | ) | | | (12,968 | ) |
| Net charge-offs | | | (11,168 | ) | | | | (1) | | | (20,747 | ) | | | (13,269 | ) |
| Allowance for credit losses on loans and finance leases, end of period | | $ | 263,592 | | | | | | | $ | 261,843 | | | $ | 265,567 | |
| | | | | | | | | | | | | | | | | |
Allowance for credit losses on loans and finance leases to period end total loans held for investment | | | 2.14 | % | | | | | | | 2.15 | % | | | 2.29 | % |
| Net charge-offs (annualized) to average loans outstanding during the period | | | 0.37 | % | | | | | | | 0.69 | % | | | 0.46 | % |
| Provision for credit losses on loans and finance leases to net charge-offs during the period | | | 1.16 | x | | | | | | | 0.91 | x | | | 1.23 | x |
| (1) | For the quarter ended March 31, 2024, includes a recovery totaling $9.5 million associated with the bulk sale of fully charged-off consumer loans. |
Table 9 – Annualized Net Charge-Offs (Recoveries) to Average Loans
| | Quarter Ended |
| | March 31, 2024 | | December 31, 2023 | | March 31, 2023 |
| Residential mortgage | 0.03% | | -0.04% | | 0.07% |
| Construction | -0.02% | | 0.01% | | -0.17% |
| Commercial mortgage | -0.01% | | 0.09% | | -0.03% |
| Commercial and Industrial | -0.59% | | 0.00% | | 0.00% |
| Consumer loans and finance leases | 1.70% | (1) | 2.26% | | 1.54% |
| Total loans | 0.37% | (1) | 0.69% | | 0.46% |
| (1) | The recovery associated with the aforementioned bulk sale reduced the consumer loans and finance leases and total net charge-offs to related average loans for the quarter ended March 31, 2024 by 104 basis points and 31 basis points, respectively. |
| | | As of | |
| | | March 31, 2024 | | | December 31, 2023 | |
| (In thousands) | | | |
| Time deposits | | $ | 2,961,526 | | | $ | 2,833,730 | |
| Interest-bearing saving and checking accounts | | | 7,511,973 | | | | 7,534,800 | |
| Non-interest-bearing deposits | | | 5,346,326 | | | | 5,404,121 | |
Total deposits, excluding brokered CDs (1) | | | 15,819,825 | | | | 15,772,651 | |
| Brokered CDs | | | 725,686 | | | | 783,334 | |
| Total deposits | | $ | 16,545,511 | | | $ | 16,555,985 | |
| Total deposits, excluding brokered CDs and government deposits | | $ | 12,574,900 | | | $ | 12,600,719 | |
| (1) | As of each March 31, 2024 and December 31, 2023, government deposits amounted to $3.2 billion. |
