First BanCorp. Reports Operating Results (10-Q)

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Nov 09, 2010
First BanCorp. (FBP, Financial) filed Quarterly Report for the period ended 2010-09-30.

First Bancorp. has a market cap of $30.5 million; its shares were traded at around $0.33 . FBP is in the portfolios of Arnold Schneider of Schneider Capital Management, Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Net loss for the quarter ended September 30, 2010 amounted to $75.2 million, compared to a net loss of $165.2 million for the quarter ended September 30, 2009. The Corporations financial results for the third quarter of 2010, as compared to the third quarter of 2009, were principally impacted by (i) the impact in 2009 of a non-cash charge of $152.2 million to increase the deferred tax asset valuation allowance, and (ii) a reduction of $27.6 million in the provision for loan and lease losses related to lower charges to specific reserves, a slower migration of loans to non-performing status and the overall decline in the size of the loan portfolio. These factors were partially offset by (i) a decrease of $30.7 million in non-interest income driven by a reduction of $33.7 million in gains on sale of investments due to a lower volume of sales, aside from a nominal loss of $0.3 million resulting from a transaction on which the Corporation sold mortgage-backed securities realizing a gain of $47.1 million that was offset by the cost of $47.4 million for the early extinguishment of a matching set of repurchase agreements, (ii) a decrease of $15.4 million in net interest income mainly resulting from the Corporations deleveraging strategies to preserve its capital position and from higher than historical levels of liquidity maintained in the balance sheet due to the current economic environment, and (iii) an increase of $5.9 million in non-interest expenses driven by increases in the FDIC deposit insurance premium and higher losses on real estate owned (REO) operations due to write-downs to the value of repossessed properties and higher costs associated with a larger inventory.

Net interest income is the excess of interest earned by First BanCorp on its interest-earning assets over the interest incurred on its interest-bearing liabilities. First BanCorps net interest income is subject to interest rate risk due to the re-pricing and maturity mismatch of the Corporations assets and liabilities. Net interest income for the quarter and nine-month period ended September 30, 2010 was $113.7 million and $349.6 million, respectively, compared to $129.1 million and $381.7 million for the comparable periods in 2009. On a tax-equivalent basis and excluding the changes in the fair value of derivative instruments and unrealized gains and losses on liabilities measured at fair value, net interest income for the quarter and nine-month period ended September 30, 2010 was $121.9 million and $373.3 million, respectively, compared to $145.1 million and $420.1 million for the comparable periods of 2009.

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