[1FIRST BANCORP LOGO]
Annie Astor-Carbonell
Senior Executive Vice President
and Chief Financial Officer
(787) 729-8088
annie.astor@firstbankpr.com
FIRST BANCORP REPORTS
EARNINGS PER SHARE INCREASE
OF 30.9%
San Juan, Puerto Rico, July 22, 2004 -- First BanCorp (NYSE:FBP), the
second largest Puerto Rico Financial Holding Company with diversified banking
operations in Puerto Rico and the US and British Virgin Islands, reported today
earnings for the quarter ended June 30, 2004.
Net income was $39,934,596 or $0.74 per share basic and $0.72 per share
diluted, for the second quarter of 2004, as compared to earnings of $29,270,698
or $0.56 per share basic and $0.55 per share diluted for the second quarter of
2003. These results represent an increase in diluted earnings per share of
30.91% for this quarter. Return on Assets (ROA), and Return on Common Equity
(ROCE) were 1.19% and 20.98% respectively,
First BanCorp reports earnings per
share increase of 30.9% -2-
for the quarter as compared to 1.26% and 18.47% respectively, for the same
quarter of 2003. Basic and diluted weighted average common shares for the 2004
second quarter were 40,215,478 and 41,371,752, respectively.
For the six month period ended June 30, 2004, earnings were $80,139,629
or $1.49 per share (basic) and $1.45 per share (diluted), as compared to
$65,698,994, or $1.30 per share (basic) and $1.28 per share (diluted). Basic and
diluted weighted average shares for the 2004 year-to-date period were 40,139,875
and 41,375,673, respectively.
Commenting on this quarter results, Mr. Angel Alvarez-Perez, Chairman,
President, and CEO of First BanCorp said, "this has been an excellent quarter.
Our core lending operations have continued to grow, especially commercial, auto,
and residential mortgages. With the increase in long term rates, we have been
able to replenish a portion of our investment portfolio at higher yields, and
the prepayments on the existing mortgage backed
First BanCorp reports earnings
per share increase of 30.9% -3-
securities portfolio have slowed. As a result of the positive outcome in both,
lending and investment operations net interest income has rebounded
significantly."
Net interest income, the Corporation's main source of income increased
by $30.4 million from $63.9 million during the second quarter of 2003 to $94.3
million during the second quarter of 2004, due to an increase in average earning
assets of $4,093 million, and an increase in the yield of the investment
portfolio. During the previous quarters, the Corporation's subsidiary bank's
strategy had been to decrease the level of medium to longer term investments
until the market provided a better opportunity to invest. Net interest margin on
a tax equivalent basis was 3.45% for the quarter ended June 2004, as compared to
3.07% for the quarter ended June 2003 and 3.33% for the previous quarter ended
March 2004. Fluctuations are the result of the investment strategy explained
above.
First BanCorp reports earnings
per share increase of 30.9% -4-
Other income, which is mostly operational, amounted to $13.7 million
for the second quarter of 2004, as compared to $23.0 million for the second
quarter of 2003. Other income for the previous year's comparative second quarter
included a gain on sale of investments of $10.1 million, and a derivative loss
of $678,000. Other income, excluding the net gains on sales of investments and
derivative losses for both periods, was $14.1 million for the June 2004 quarter,
$520,000 over the $13.5 million for the June 2003 quarter, due mainly to
commercial loan fees.
Net charge offs were $9.9 million (.52% of average loans) for the
second quarter of 2004, as compared to $9.9 million (.65% of average loans)
during the second quarter of 2003, and $9.2 million (.51% of average loans),
during the first quarter of 2004. The year-to-date charge off ratio for 2004 is
..52%, as compared to .70% for the year-to-date period of 2003. The charge offs
ratio is at the lowest level of the last 10 years, due to the Corporation's
effective risk management infrastructure.
First BanCorp reports earnings
per share increase of 30.9% -5-
The efficiency ratio was 42.17% and 45.20% for the three months ended
June 30, 2004 and 2003 respectively, one of the best in the industry. An
increase in expenses of $6.2 million is in part attributable to increases in
personnel and occupancy costs, to support the growth of the Corporation, to
merit salary increases and to strong advertising and business promotion costs to
support new products and services, especially First Mortgage and the "Perfect
Account" a new DDA product. When compared to the immediately preceding quarter
of March 2004, operating expenses increased by $2.4 million, mostly as a result
of the increases in promotion expenses, as explained above.
Total assets were $14,465 million as of June 30, 2004, as compared to
$9,934 million as of June 30, 2003 and $12,668 million as of December 31, 2003.
Loans receivable increased by 25.3% to $7,892 million, as compared to $6,299
million as of June 30, 2003. The largest loan volume increases were achieved in
the commercial and residential real estate portfolios.
First BanCorp reports earnings
per share increase of 30.9% -6-
Non-performing loans as of June 30, 2004 were $91.0 million (1.15% of
total loans), as compared to $89.0 million (1.41% of total loans) and $85.7
million (1.15% of total loans), as of June 30, 2003 and March 31, 2004,
respectively. Non-performing loans remained in line, when compared to the
previous year, as a result of controlled delinquencies, especially in the Bank's
consumer portfolios. The increase in dollar amount, when compared to the March
2004 figure, is composed entirely of secured real estate loans, and is mainly
due to the general growth of the portfolios.
The allowance for loan losses to non-performing loans (reserve
coverage), was 146.9% as of June 30, 2004, compared to 135.5% as of June 30,
2003 and 152.2%, as of March 31, 2004. The slight decrease in the reserve
coverage, when compared to the March 2004 quarter, is directly related to the
increase in secured non-performing loans. The improvement since the prior
First BanCorp reports earnings
per share increase of 30.9% -7-
year's comparable quarter is related to the stability in the delinquencies and
non-performing loans.
First BanCorp is a $14.5 billion well-capitalized Financial Holding
Company. It is the parent company of FirstBank Puerto Rico, which is the second
largest commercial bank in Puerto Rico and Virgin Islands and of FirstBank
Insurance Agency. Both First BanCorp and FirstBank Puerto Rico, operate within
US banking laws and regulations. The Bank operates a total of 111 financial
service facilities throughout Puerto Rico and the US and British Virgin Islands,
including the operations of its subsidiaries. Among the subsidiaries are Money
Express, a finance company, First Leasing and Car Rental, a car and truck rental
leasing company, and First Mortgage, a mortgage banking company. In the US and
British Virgin Islands the Bank operates FirstBank Insurance VI, an insurance
agency, First Trade, Inc., a foreign corporation management company, and First
Express, a small loan company.
First BanCorp reports earnings
per share increase of 30.9% -8-
The Corporation's common and preferred shares trade on the New York
Stock Exchange, under the symbols FBP, FBPPrA, FBPPrB, FBPPrC, FBPPrD and
FBPPrE.
This press release contains certain "forward-looking statements"
concerning the Corporation's economic future performance. The words or phrases
"expect", "anticipate", "look forward", "should", and similar expressions are
meant to identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995.
The Corporation wishes to caution readers not to place undue reliance
on any such "forward-looking statements", which speak only as of the date made
and to advise readers that various factors, including regional and national
economic conditions, changes in interest rates, competitive and regulatory
factors and legislative changes, could affect the Corporation's financial
performance and could cause the Corporation's actual
First BanCorp reports earnings
per share increase of 30.9% -9-
results for future period to differ materially from those anticipated or
projected.
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.
FIRST BANCORP
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA
THREE MONTHS ENDED SIX MONTHS ENDED
-----------------------------------------------------------------------------------
JUNE 30, JUNE 30, MARCH 30, JUNE 30, JUNE 30,
2004 2003 2004 2004 2003
--------- --------- --------- --------- ---------
INTEREST INCOME:
Loans $ 103,074 $ 97,285 $ 100,048 $ 203,123 $ 191,241
Investments 58,134 25,540 46,499 104,633 64,503
--------- --------- --------- --------- ---------
Total interest income 161,208 122,825 146,547 307,756 255,744
--------- --------- --------- --------- ---------
INTEREST EXPENSE:
Deposits 26,610 27,278 27,047 53,657 56,217
Borrowings 40,320 31,644 35,297 75,617 63,187
--------- --------- --------- --------- ---------
Total interest expense 66,930 58,922 62,344 129,274 119,404
--------- --------- --------- --------- ---------
Net interest income 94,278 63,903 84,203 178,482 136,340
--------- --------- --------- --------- ---------
PROVISION FOR LOAN LOSSES 13,200 12,600 13,200 26,400 29,164
--------- --------- --------- --------- ---------
Net interest income after provision
for loan losses 81,078 51,303 71,003 152,082 107,176
--------- --------- --------- --------- ---------
OTHER INCOME:
Service charges on deposit accounts 2,742 2,370 2,783 5,526 4,945
Other fees on loans 4,218 4,995 5,946 10,163 10,001
Mortgage banking activities 217 1,584 1,545 1,762 1,942
Net gain on sale of investments 551 10,135 3,965 4,516 23,822
Derivatives loss (961) (678) (424) (1,386) (115)
Rental Income 702 545 618 1,319 1,030
Gain on sale of credit cards portfolio 297 5,236 5,533
Other operating income 5,884 4,046 4,330 10,216 7,543
--------- --------- --------- --------- ---------
Total other income 13,650 22,997 23,999 37,649 49,168
--------- --------- --------- --------- ---------
OTHER OPERATING EXPENSES:
Employees' compensation and benefits 21,513 18,314 19,986 41,499 36,524
Occupancy and equipment 9,447 8,831 9,383 18,831 17,715
Business promotion 4,588 2,706 3,469 8,057 5,423
Taxes, other than income taxes 1,951 1,760 1,948 3,899 3,507
Insurance and supervisory fees 1,010 813 1,076 2,086 1,751
Other 7,001 6,851 7,296 14,297 13,825
--------- --------- --------- --------- ---------
Total other operating expenses 45,510 39,275 43,158 88,669 78,745
--------- --------- --------- --------- ---------
INCOME BEFORE INCOME TAX 49,218 35,025 51,844 101,062 77,599
INCOME TAX PROVISION 9,283 5,754 11,639 20,922 11,900
--------- --------- --------- --------- ---------
NET INCOME $ 39,935 $ 29,271 $ 40,205 $ 80,140 $ 65,699
========= ========= ========= ========= =========
NET INCOME APPLICABLE TO
COMMON STOCK $ 29,866 $ 22,520 $ 30,136 $ 60,002 $ 52,197
========= ========= ========= ========= =========
NET INCOME PER COMMON SHARE - BASIC $ 0.74 $ 0.56 $ 0.75 $ 1.49 $ 1.30
========= ========= ========= ========= =========
NET INCOME PER COMMON SHARE - DILUTED $ 0.72 $ 0.55 $ 0.73 $ 1.45 $ 1.28
========= ========= ========= ========= =========
DIVIDENDS DECLARED PER COMMON SHARE $ 0.12 $ 0.11 $ 0.12 $ 0.24 $ 0.22
========= ========= ========= ========= =========
FIRST BANCORP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA
JUNE 30, 2004 JUNE 30, 2003 DECEMBER 31, 2003
------------- ------------- -----------------
ASSETS
Cash and due from banks $ 83,322 $ 81,421 $ 89,305
------------ ------------ ------------
Money market instruments 371,929 535,357 705,940
------------ ------------ ------------
Federal funds sold and securities purchased
under agreements to resell 71,000 282,000 265,000
------------ ------------ ------------
Investment securities available for sale, at market:
United States and Puerto Rico Government obligations 302,038 23,080 16,157
Mortgage backed securities 1,216,429 1,290,465 1,086,891
Corporate bonds 44,290 152,783 53,770
Equity investment 53,078 36,774 62,320
------------ ------------ ------------
Total investment securities available for sale 1,615,835 1,503,102 1,219,138
------------ ------------ ------------
Investment securities held to maturity, at cost:
United States and Puerto Rico Government obligations 2,445,267 888,969 1,119,775
Mortgage backed securities 1,712,718 76,013 1,970,855
Corporate bonds 19,983 64,638 39,847
------------ ------------ ------------
Total investment securities held to maturity 4,177,968 1,029,620 3,130,477
------------ ------------ ------------
Federal Home Loan Bank (FHLB) stock 61,150 42,595 45,650
------------ ------------ ------------
Loans receivable:
Commercial Loans 2,971,815 2,642,112 2,832,635
Finance Leases 186,933 152,235 161,283
Consumer Loans 1,244,398 1,199,316 1,171,590
Residential Loans 3,489,118 2,305,354 2,879,010
------------ ------------ ------------
Total loans receivable 7,892,264 6,299,017 7,044,518
Allowance for loan losses (133,678) (120,563) (126,378)
------------ ------------ ------------
Total loans, net 7,758,586 6,178,454 6,918,140
Other real estate owned 5,599 2,752 4,617
Premises and equipment, net 85,905 83,215 85,269
Accrued interest receivable 52,149 33,204 41,508
Other assets 181,377 162,594 162,866
------------ ------------ ------------
Total assets $ 14,464,820 $ 9,934,314 $ 12,667,910
============ ============ ============
LIABILITIES & STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 6,952,337 $ 5,433,642 $ 6,765,107
Federal funds purchased and securities sold
under agreements to repurchase 4,413,070 2,363,557 3,650,297
Advances from FHLB 1,223,000 713,000 913,000
Notes Payable & Subordinated Notes 236,521 82,817 82,818
Other Borrowings 102,610
Payable for unsettled investment trade 198,575 375,000
Accounts payable and other liabilities 209,856 111,102 167,119
------------ ------------ ------------
13,335,969 9,079,118 11,578,341
------------ ------------ ------------
Stockholders' equity:
Preferred Stock 550,100 360,500 550,100
------------ ------------ ------------
Common stock outstanding 40,216 40,006 40,027
Additional paid - in capital 2,323 676 269
Capital Reserve and Legal Surplus 243,106 219,345 243,107
Retained earnings 270,397 188,644 220,038
Accumulated other comprehensive income, net of tax 22,709 46,025 36,028
------------ ------------ ------------
1,128,851 855,196 1,089,569
------------ ------------ ------------
Total liabilities and stockholders' equity $ 14,464,820 $ 9,934,314 $ 12,667,910
============ ============ ============
BOOK VALUE PER COMMON SHARE $ 14.39 $ 12.37 $ 13.48
============ ============ ============
FIRST BANCORP
SELECTED FINANCIAL DATA
(UNAUDITED)
DOLLARS IN THOUSANDS
CREDIT QUALITY DATA AT: June 30, 2004 June 30, 2003 December 31, 2003
- ----------------------- ------------- ------------- -----------------
Non-performing Assets $102,344 $100,878 $100,771
-------- -------- --------
Non-performing Loans 90,987 88,998 85,525
-------- -------- --------
Past Due Loans 16,519 28,787 23,493
-------- -------- --------
Allowance for Loan Losses 133,678 120,563 126,378
-------- -------- --------
Non-performing Assets to Total Assets 0.71% 1.02% 0.80%
-------- -------- --------
Non-performing Loans to Total Loans 1.15% 1.41% 1.21%
-------- -------- --------
Allowance to Non-Performing Loans 146.92% 135.47% 147.77%
-------- -------- --------
SELECTED PERFORMANCE RATIOS: Three Months Ended Three Months Ended Six Months Ended
- ---------------------------- June 30, March 31, June 30,
2004 2003 2004 2004 2003
----------- ----------- ----------- ----------- -----------
Net Interest Yield (1) 3.45% 3.07% 3.33% 3.39% 3.38%
----------- ----------- ----------- ----------- -----------
Return on Assets 1.19% 1.26% 1.32% 1.25% 1.41%
----------- ----------- ----------- ----------- -----------
Return on Equity 14.27% 13.80% 14.56% 14.41% 15.82%
----------- ----------- ----------- ----------- -----------
Return on Common Equity 20.98% 18.47% 21.74% 21.35% 22.20%
----------- ----------- ----------- ----------- -----------
Net Write offs to Average Loans 0.52% 0.65% 0.51% 0.52% 0.70%
----------- ----------- ----------- ----------- -----------
Efficiency Ratio 42.17% 45.20% 39.89% 41.03% 42.45%
----------- ----------- ----------- ----------- -----------
AVERAGE BALANCES:
Assets $13,437,398 $ 9,306,733 $12,161,894 $12,799,646 $ 9,334,255
----------- ----------- ----------- ----------- -----------
Earnings Assets 13,065,221 8,972,529 11,764,838 12,415,096 8,992,382
----------- ----------- ----------- ----------- -----------
Loans 7,582,815 6,067,527 7,188,149 7,385,273 5,900,148
----------- ----------- ----------- ----------- -----------
Deposits 6,924,520 5,373,362 6,705,126 6,814,823 5,364,859
----------- ----------- ----------- ----------- -----------
Interest-bearing liabilities 11,607,155 7,891,580 10,315,508 10,964,365 7,935,467
----------- ----------- ----------- ----------- -----------
Stockholders Equity 1,119,628 848,233 1,104,490 1,112,059 830,672
----------- ----------- ----------- ----------- -----------
Common Stockholders Equity 569,528 487,733 554,390 561,959 470,172
----------- ----------- ----------- ----------- -----------
(1) On a taxable equivalent basis.