First BanCorp 3Q Earnings Fall

From the AP:

NEW YORK — First BanCorp, which offers banking services in Puerto Rico, Florida and the Virgin Islands, said Tuesday its third-quarter earnings fell 47 percent due to declining net interest income and rising loss reserves.

Net income fell to $14.1 million, or 5 cents per share, from $26.7 million, or 20 cents per share, during the same period a year ago.

Net interest income, the difference between how much it costs a bank to borrow money and how much it receives from lending that money, fell to $105 million in the third quarter, from $122.7 million during the same period last year. Declines in net interest income included an unrealized, non-cash valuation charge of $10.2 million from derivative and hedging activities.

Noninterest income, or fees and other charges, rose to $23.9 million in the third quarter, from $8 million during the same period a year ago.

First BanCorp increased its provision for loan losses to $34.3 million in the third quarter, a 66 percent jump from the $20.6 million held during the same period last year. Banks have been ramping up loss provisions in recent months due to rising delinquencies and defaults among loans, especially mortgages.

Shares fell 37 cents, or 4.7 percent, to $7.43 in afternoon trading. Earlier in the session, shares hit a 52-week low of $7.37. First BanCorp shares had traded between $7.60 and $13.87 during the past year.

It will be interesting to see how the collapse of the real estate market in the US affects the USVI. We are hearing that things are slow and inventories are high, but I don't know what that has done to prices so far.