First BanCorp. New

Hello, my name is Bailey and I will be your conference operator today. At this time I would like to welcome everyone to the first Bancor fourth quarter 2021 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer session. If you would like to ask the question during this time simply press star followed by one on your telephone keypad If you would like to withdraw your question, that is star followed by two. Thank you. Ramon Rodriguez, Head of Investor Relations, you may begin the conference.

Thank you, Bailey. Good morning, everyone, and thank you for joining First Bank Corp's conference call and webcast to discuss the company's financial results for the fourth quarter and full year 2021. Joining you today from First Bank Corp are Aurelio Aleman, President and Chief Executive Officer, and Orlando Verges, Executive Vice President and Chief Financial Officer. Before we begin today's call, it is my responsibility to inform you that this call may involve certain forward-looking statements such as projections of revenue, earnings, and capital structure, as well as statements on the plans and objectives of the company's business. The company's actual results could differ materially from the forward-looking statements made due to the important factors described in the company's latest SEC filings. The company assumes no obligation to update any forward-looking statements made during the call. If anyone does not already have a copy of the webcast presentation or press release, you can access them at our website at onefirstbank.com. At this time, I'd like to turn the call over to our CEO, Aurelio Aleman.

Thanks, Ramon. Good morning to everyone, and thanks for joining our earnings call today. Let's start by moving to slide four. We closed 2021 with another record quarter for the company, clearly reflecting the strength of the franchise and also combined with improved economic backdrop in our operating markets. During the quarter, we generated 73.6 million in net income or 35 cents per diluted share. And importantly, I think a record 104.9 million in adjusted pre-tax, pre-provision income. Asset quality continues the trend, the improvement trend that we had during the year. Now non-performing assets are reaching a decade low of 0.76 as a percent of total assets, driven by repayment of several non-agreed loans, REO sales, and obviously less migration. The ratio of the ACL for loans and final leases to total loans decreased to 2.43% during the quarter, driven by combined factors such as reduction in the residential mortgages, as well as reductions associated with improvement in macroeconomic factors and their impact on qualitative reserves. In terms of expenses, the efficiency ratio continued to trend down now to 52%. I have to say this is a historical low compared to 53% registered during the third quarter. On the capital front, we continue executing our capital plan, returning capital to shareholders. During the fourth quarter, we raised the common dividend by 43% to 10 cents per share. We repurchased 4.6 million common shares amounting to 63.9 million. And we also executed the announced redemption of 36.1 million of outstanding preferred shares. Happily to say that we ended the year with a very strong, you know, capital position, 17.8% common equity tier one, leaving ample room for further capital deployment initiatives during 2022. Let's move to slide five to provide some detail on the deposit and loan performance. The loan portfolio, slightly decreasing the quarter by $75 million, you know, mostly driven by $73 million reduction in SBA PPP loans, Also, we have for large commercial repayments of relationships from Florida and Virgin Islands, which amounted to $125 million. And we also experienced a reduction of $112 million in the residential mortgage loans that sit in the portfolio. These reductions were partially offset by, I would have to say, quite strong auto and commercial originations. commercial orientation both in Puerto Rico and Florida. And despite this large repayment, the commercial portfolio grew by $59 million, turning the corner, hopefully, as we continue to move on into 2022. Loan ordination for the fourth quarter was also quite strong, with $1.4 billion, including credit card utilization activity. It's really the best quarter we have had this year. Again, with strong originations in Puerto Rico and Florida. I have to say that we closed the year with a very strong pipeline. Actually, the stronger pipeline coming into the first quarter of the year. Definitely, loan portfolio balances remain impacted by excess liquidity and these paydowns. I think with rate markets moving up, that this should diminish. On the other hand, loan variations continue to be strong. And, you know, we're very focused on our strategy for growing the portfolios centered around increasing consumer and commercial books while, you know, continue to focus in the conforming residential mortgages that as we have done over the past year. In terms of deposit, core deposit continues to grow, but as expected at a slower pace compared to prior quarters. Over the next few quarters, we expect a reduction of approximately $150 million of government deposits from the recent bankruptcy settlement. That should happen probably second quarter, I will say. Excluding broker and government deposit, core deposit did raise to an increase of $64 million during the quarter. I'd like to take an opportunity before handing the court to Orlando to provide a summary of the year, so let's move to slide six. You know, definitely the core results for the company reflect, you know, the transformational progress that we had in multiple fronts in 2021. We generated $281 million of net income, or $1.31 per diluted share, compared to 102.3 in prior year. We registered a 30% increase in adjusted pre-tax preparation income, and we grew total loan originations and renewals by 20%, including PPP and credit card activity, when compared to 2020. I think, moreover, new money, commercial loan originations, including closed and unfunded commercial and construction loans, grew by 50% when compared to prior year. I think it's important to comment that over 75% of the construction loans that we originated in 2021 are expected to partially fund in 2022, so they did not fund it in 2021. And importantly, during the year, we returned capital equivalent to 112% of earnings, again, in the form of repurchase of common, redemption of preferreds, and dividends. Key to the efficiency ratio, we completed the timely integration of the acquired operations during the year. We executed on all the operational efficiencies of our plan as part of the transaction and did achieve the established financial targets of the transaction. Again, the transaction allowed us to expand our footprint, strengthen our leadership position in the market in Puerto Rico. Importantly, we have invested significantly in our digital capabilities. The pandemic triggered an accelerated adoption of digital channels, which did continue to grow significantly. Digital engagement improving across all our digital functionalities. We also, during the year, re-engineered the auto lending orientation process by deploying a fully digital platform to our dealer network. allowing us to offer a complete digital experience. I have to say that additional investments in technology and digital offerings are planned for 2022 in order to continue improving our competitive position in an increasingly digital environment, which we have great progress in 2021. On the macro front, we are in the initial stages of a growth cycle in Puerto Rico. The recent announcement of the resolution of the debt restructuring process should allow for the government to focus their efforts towards supporting economic growth initiatives and capitalizing on the large amount of obligated disaster relief funds pending to be deployed. Like other jurisdictions, COVID cases increased recently, driven by the Omicron variant. However, our quite high vaccination rate provides for an important safety net Do we start any impact in the healthcare infrastructure and economic activity? We are confident that the positive backdrop in our three operators should result in increased loan demand in 2022. So with that, that's summary. I'd like to turn the call over to Orlando for more details in the financial results. Thanks.