First Bancorp. New · NYSE:FBP
First Bancorp. New — First Bancorp — Investor Presentation (October 2006)
56 slides from First Bancorp. New's investor presentation, Oct 24, 2006
Slide 1: First BanCorp Overview October 2006
First BanCorp (NYSE: FBP) Overview October 2006
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by First BanCorp to provide current information, including preliminary financial information, about its operations and includes information that has not been included in any report previously filed with the Securities and Exchange Commission. The financ
Slide 3: Management Presenters
Management Presenters Luis Beauchamp ‘Aurelio Aleman Todo esté en uno Mr. Beauchamp joined First BanCorp in 1980 and was named President and CEO and Board Member in September 2005 Prior to this postion, Mr. Beauchamp served as Chief Lending Offoer and SEVP ‘ofthe Wholesale Banking division Inthis tl
Slide 4: Management Presenters
Management Presenters Randotfo Rivera EVE, Wholesale Bi Lawrence Odell Femando Scherrer EVP, Chet Financial Officer Todo esté en uno As Execufive Vice President, Mr. Rivera is in charge of comorate banking, ‘commercial, international, government and institufional banking, structured finance and cash
Slide 5: Agenda
Agenda Company Overview Recent Developments Restatement Remediation Steps Business Overview Operating Results 3rd QTR 2006
Slide 6: Company Overview
Timeancor Company Overview
Slide 7: Company Overview
Company Overview Headquartered in San Juan, Puerto Rico Approximately 2,750 full time employees 138 branches, stand-alone offices and in-branch service centers Total assets of $17.4 billion as of Sep 30, 2006 2nd largest financial holding company in Puerto Rico and within the 50th largest bank holdi
Slide 8: Corporate Organizational Chart
Corporate Organizational Chart Notes: IBE: International Banking Entity Organizational chart shows the Corporation's main business entities Grupo Empresas de Servicios Financieros (d/b/a Puerto Rico Finance) First BanCorp FirstBank Puerto Rico First Express USVI FirstBank Insurance Agency First Insu
Slide 9: Recent Developments
Timeancor Recent Developments
Slide 10: First BanCorp Recent Developments
First BanCorp Recent Developments September 2005: Senior Management changes December 2005: First BanCorp announced that it would restate all reported financials dating back to 2000 to correct for issues related to accounting for certain mortgage-related transactions and to correct the accounting for
Slide 11: First BanCorp Recent Developments
First BanCorp Recent Developments July 2006: First BanCorp announced the declaration of the next payment of preferred dividends July 2006: Board appointed Fernando Scherrer as Chief Financial Officer of the Company July 2006: Received FDIC approval for an intercompany dividend from FirstBank to the
Slide 12: Restatement
Timeancor Restatement
Slide 13: 2000 - 2004 Restatement Highlights
2000 - 2004 Restatement Highlights Three principal areas: Re-characterization of Mortgage Loans and Pass-Through Trust Certificates As commercial loans secured by mortgages and pass-through trust certificates Revised classification of approximately $3.8 billion in mortgage loans transactions as of D
Slide 14: 2000 - 2004 Restatement Highlights: Net Income
2000 - 2004 Restatement Highlights Net Income Net Income Net Income Net Income Net Income $ In Thousands $ In Thousands $ In Thousands $ In Thousands $ In Thousands As Previously Reported As Restated $ Change % Change 2004 $178,878 $177,325 -$1,553 -0.87% 2003 $152,338 $119,894 -$32,444 -21.30% 2002
Slide 15: 2000 - 2004 Restatement Highlights
For Fiscal Year 2004, net adjustments decreased previously reported net income by approximately - $1.55 Million Cumulative adjustments decreased retained earnings and legal surplus by $17.1 Million Approximately $15.1 Million represents non-cash derivatives adjustment Restatement reflects changes in
Slide 16: Remediation Steps
Timeancor Remediation Steps
Slide 17: Corporate Governance Review
The Board of Directors engaged consultants for a complete Corporate Governance Review: Clearer understanding of the responsibilities and duties of the Board and its committees Alignment of those responsibilities with the industry's best practices Several changes to our Corporate Governance program w
Slide 18: Risk Management Review
Early in the process, Management engaged several consultants to evaluate the corporation's risk management policies, infrastructure and processes: Reviewed current Risk Management structures and roles Recommended enhancements tothe correct Risk Management Model Several changes to our Risk Management
Slide 19: Business Overview
Timeancor Business Overview
Slide 20: Business Overview
Business Overview First BanCorp is the parent company of FirstBank Puerto Rico, a state chartered commercial bank with operations in Puerto Rico, the Virgin Islands and Florida; FirstBank Insurance Agency; and Ponce General, the holding company of FirstBank Florida FirstBank Puerto Rico has 4 subsid
Slide 21: Geographic Footprint
Geographic Footprint Note: Branches as of October 2006; branch count represents FirstBank and FirstBank Florida branches only; Florida branch count includes headquarters and operations center (47) 1 13
Slide 22: Puerto Rico Footprint Opportunities
Puerto Rico Footprint Opportunities Within the Local Market Opportunities Within the Local Market Opportunities Within the Local Market Dark Green: Municipalities where FBP is present
Slide 23: Second largest financial holding company in Puerto Rico
FBP: Second largest financial holding company headquartered in Puerto Rico Share (June 06) Market Position Deposits Savings & CD's (w/o brokered) 7.29% 5th Consumer DDA's 5.56% 7th Commercial & Corporate DDA's 6.30% 5th Brokered CD's 41.58% 1st Government Deposits 9.95% 3rd Loans Corporate, Above $5
Slide 24: Business Highlights
Business Highlights Diverse Business Mix Core lending franchise is comprised of corporate, commercial and consumer lending Full service and scale corporate and commercial and construction banking operations differentiate First BanCorp from most Island peers Additional scale businesses, including mor
Slide 25: Business Highlights: Strengthened Risk Management Culture
Business Highlights Strengthened Risk Management Culture First BanCorp developed and invested in a state-of-the-art risk management system that allows the Bank to maintain a competitive advantage in the marketplace Vigorous interest rate risk management with ALCO Committee Enhanced credit quality ov
Slide 26: Branding initiative and One-Stop Shop
New branding initiative launched in 4th QTR 2005, where the Bank ties in all its product offerings and branch network through its One-Stop Shop initiative The Bank continues to grow organically by developing cross-selling strategies with its existing client base, with an objective of reaching 5 prod
Slide 27: Branding Strategy: The Tagline and Signature
Branding Strategy: The Tagline and Signature
Slide 28: First BanCorp's Total Assets
First BanCorp's Total Assets
Slide 29: Loan portfolio is well diversified
The Corporation's loan portfolio is well diversified The reclassification of mortgage related transactions previously classified as residential and commercial mortgage loans resulted in approximately $3.8 billion in loans to Doral and R&G secured by residential mortgages and pass through trust certi
Slide 30: Wholesale Banking
Wholesale Banking First BanCorp has developed a broad product offering for its larger corporate customer base Institutions, government agencies and corporations Cash management product launched in 1998 with over $2.0 million in fee income in 2005 Automated web-based system #3 share of government dep
Slide 31: Corporate and Commercial Lending
Corporate and Commercial Lending Commercial Banking at both the Corporate and Middle Market levels is expected to continue as one of the Corporation's growth drivers in the near term In 2005, the Corporation initiated a strategy to cater customer needs in the middle market segment Significant opport
Slide 32: Corporate and Commercial Lending
First BanCorp Corporate and Commercial Lending Corporate and Commercial Lending has shown a CAGR of 14.91% since 2003
Slide 33: Commercial Mortgage
First BanCorp Commercial Mortgage Commercial Real Estate Lending has shown a CAGR of 22.04% since 2003 Note: The increase includes the loans acquired as part of FB Florida acquisition in March 2005, FB Florida commercial mortgage loans at 9/30/2006 approximated $285 million.
Slide 34: Construction Lending
First BanCorp Construction Lending Specializes in the interim construction financing of residential, industrial and commercial projects in Puerto Rico, USVI, BVI and Florida Over $1.2 billion in successfully financed projects Currently providing financing to 42 projects ranging from $2 million to up
Slide 35: FirstBank Miami Agency
FirstBank Miami Agency FirstBank enters the US mainland market with focus on the Florida market in November 2004 with a Loan Agency office Coral Gables loan production office offering construction and commercial loans throughout Florida Agency managed by experienced, seasoned construction lenders we
Slide 36: Residential Real Estate Loans
First BanCorp Residential Real Estate Loans Residential Real Estate Lending has shown a CAGR of 42.76% since 2003 Note: The increase includes the loans acquired as part of FB Florida acquisition in March 2005, FB Florida residential mortgages at 9/30/2006 approximated $325 million.
Slide 37: Mortgage Lending (FirstMortgage)
Mortgage Lending (FirstMortgage - PR Production) Mortgage closings have shown a CAGR of 28.33% since 2001, strengthened by the launch of First Mortgage in 2003 Puerto Rico's mortgage market has historically been dominated by Doral, R&G and Popular Mortgage, however, recent developments in the mortga
Slide 38: Consumer Lending
First BanCorp Consumer Lending Consumer Lending has shown a CAGR of 19.08% since 2003
Slide 39: Auto Lending
Auto Lending Puerto Rico Operations A highly competitive and specialized business on the Island Four major participants: Banco Popular, Reliable, FirstBank and BBVA Strong #2 position with 16.9% market share (Puerto Rico) as of June 2006 Also offers leasing and rental services through First Truck &
Slide 40: Consumer and Personal Lending
Consumer and Personal Lending Puerto Rico Operations Offers unsecured lending, credit lines and marine financing Currently #3 in market share Puerto Rico (personal loan segment) with a $366 million portfolio Successful in developing direct and indirect channels Focus on service - 15 minute reply on
Slide 41: Money Express
Money Express Specializes in sub-prime unsecured personal lending Loan sizes below $5,000, under Money Express Brand Loans size over $5,000 under Prestamas Brand Puerto Rico market size is largely fixed (approximately $1 billion), so focus on capturing market share from competitors FirstBank current
Slide 42: Insurance Business
Insurance Business FirstBank Insurance and First Insurance VI have experienced tremendous growth since their inception We currently operate insurance agency offices in Puerto Rico and the Virgin Islands Leverage the insurance needs of customers across the Bank's business lines, including auto, mortg
Slide 43: Eastern Caribbean Franchise
Eastern Caribbean Franchise In 1999 and 2002, FirstBank acquired the USVI and BVI branches of Citibank and JPMorgan Chase, respectively FirstBank has become a market leader in these particularly affluent markets In the USVI, #1 share by assets (37%), #1 share by originations (71%) and #2 share by de
Slide 44: FirstBank Florida
FirstBank Florida In March 2005, First BanCorp acquired Ponce General (parent of FirstBank Florida) Continued effort to expand Florida franchise beyond the Bank's Coral Gables-based loan agency Branch network integration through FirstBank Florida branding Anticipated de novo branching Emphasis on de
Slide 45: Investment Security Portfolio
Investment Security Portfolio
Slide 46: U.S. Gov't & Agency Portfolio by Final Maturity
U.S. Gov't & Agency Portfolio by Final Maturity1 Date 11/30/2007 3/29/2007 2/15/2015 8/15/2015 4/8/2019 6/30/2020 10/6/2020 2/17/2022 3/7/2022 7/30/2023 4/26/2024 2/14/2025 6/5/2028 9/8/2028 6/9/2033 Amount 140505315 97614866 300000000 100000000 492398487 199889766 450000000 300000000 400000000 1716
Slide 47: Funding Mix
148 Funding Funding Mix As of September30, 2006 Regular Otheray% —‘TePurchase agreements Certficate of 10% Deposits 11% Structured repurchase agreement DDA and Savings 12%, 11% Brokered CD's - Callable 29% Brokered CD's - Bullets 23%
Slide 48: Weighted Average Time Left to Final Maturity of Brokered CD Portfolio
Weighted Average Time Left to Final Maturity of the Callable & Fixed Brokered CD Portfolio Bullets Portfolio WAVG Life Left Callables 12/1/2002 2.54 9.2 12.06 12/1/2003 1.54 10.62 14.21 12/1/2004 1.38 11.91 13.5 12/1/2005 0.3 6.19 11.01 9/1/2006 0.47 6.23 10.78 Note: effective maturity may differ du
Slide 49: Operating Results 3rd QTR 2006
Operating Results 3rd QTR 2006
Slide 50: First BanCorp Total Assets
First BanCorp Total Assets Decrease in total assets is a result of the deleveraging plan after payment of $2.4 billion from Doral
Slide 51: Asset Quality
Asset Quality Non performing residential mortgage loans have increased during 2006. The Corporation has experienced minimal losses in this portfolio Current reserve levels for the mortgage portfolio was reviewed and validated by an external consultant
Slide 52: Asset Quality (Cont.)
Asset Quality (Cont.) Adding back the non-recurrent payment of $2.4 billion from Doral in May 2006 to the denominator of the formula, for comparability purposes, the ratios would have been 1.38% and 1.74% for June 2006 and September 2006, respectively. The increase for the second and third quarter 2
Slide 53: Allowance for Loan Losses
155 Allowance for Loan Losses Allowance for Loan Losses On Millions) Allowance to Total Loans. $153 1 4 =
Slide 54: Capital Position
Capital Position (1) As filed with the Board of Governors of the Federal Reserve System
Slide 55: First Bank's Liquidity
First Bank's Liquidity As of September 30, 2006 First Bank1 ($000) % Basic Surplus* (w/out repo roll.) 2,099,693 12.44% Unsecured Lines 335,000 Overall Surplus 3,690,628 21.87% On June 30, 2006 Basic Surplus (w/out repo roll.) 3,580,698 18.19% Unsecured Lines 335,000 Overall Surplus 3,915,698 19.89%
Slide 56: First BanCorp Overview October 2006
First BanCorp (NYSE: FBP) Overview October 2006