First BanCorp (FBP) Reports Strong Q3 2023 Earnings, Net Income Rises to $82.0 Million
First BanCorp (NYSE:FBP) reported a net income of $82.0 million for Q3 2023, up from $70.7 million in Q2 2023.
Income before income taxes rose to $109.0 million in Q3 2023, compared to $101.0 million in the previous quarter.
The bank's net interest income remained stable at $199.7 million, while the provision for credit losses decreased significantly to $4.4 million.
First BanCorp (NYSE:FBP) also reported a strong return on average assets of 1.72% in Q3 2023.
First BanCorp (NYSE:FBP) announced its earnings for the quarter ended September 30, 2023, on October 20, 2023. The bank reported a net income of $82.0 million, or $0.46 per diluted share, for the third quarter of 2023, compared to $70.7 million, or $0.39 per diluted share, for the second quarter of 2023. The return on average assets for the third quarter of 2023 stood at 1.72%, compared to 1.51% for the second quarter of 2023.
Financial Highlights
First BanCorp (NYSE:FBP) reported income before income taxes of $109.0 million for the third quarter of 2023, compared to $101.0 million for the second quarter of 2023. On a non-GAAP basis, pre-tax, pre-provision income was $113.4 million for the third quarter of 2023, compared to adjusted pre-tax, pre-provision income of $118.0 million for the second quarter of 2023.
Net interest income remained stable at $199.7 million for the third quarter of 2023, compared to $199.8 million for the second quarter of 2023. However, the net interest margin decreased to 4.15% for the third quarter of 2023 from 4.23% for the second quarter of 2023, mainly due to an increase in the mix of interest-bearing deposits to total deposits and continued market-driven increases in deposit costs.
The provision for credit losses decreased significantly to $4.4 million for the third quarter of 2023, compared to $22.2 million for the second quarter of 2023. This decrease was primarily related to the reserve recorded during the second quarter of 2023 as a result of increased uncertainty in the forecasted commercial real estate price index and a reduction in the allowance for credit losses for held-to-maturity debt securities during the third quarter of 2023.
CEO's Commentary
Aurelio Aleman, President and Chief Executive Officer of First BanCorp, commented on the results:
For the third quarter we earned $82.0 million in net income and delivered a strong return on average assets of 1.72% driven by a combination of loan growth across all our businesses, disciplined expense management, and encouraging economic trends in our main market. The strength of our franchise and the competitive positioning of our balance sheet allows us to deliver consistent earnings even during a challenging period for the banking industry."
Looking Ahead
First BanCorp (NYSE:FBP) remains optimistic about its future performance. The bank's total loans increased by $226.3 million from the prior quarter to $12.0 billion as of September 30, 2023. The bank also reported that its capital ratios exceed required regulatory levels for bank holding companies and well-capitalized banks. The Corporations estimated total capital, common equity tier 1 capital, tier 1 capital, and leverage ratios were 18.84%, 16.35%, 16.35%, and 10.57%, respectively, as of September 30, 2023.
This article first appeared on GuruFocus.
